Bill Text: PA HB1133 | 2009-2010 | Regular Session | Introduced

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Bill Title: Further providing for definitions and for TRID criteria; providing for TRID project cost; further providing for creation of value capture area and for dedication of tax revenues; establishing the TRID Development Program and the TRID Development Fund; and imposing powers and duties on the Office of the Budget, the Department of Community and Economic Development and the Department of Revenue.

Spectrum: Slight Partisan Bill (Democrat 16-6)

Status: (Introduced - Dead) 2009-03-27 - Referred to TRANSPORTATION [HB1133 Detail]

Download: Pennsylvania-2009-HB1133-Introduced.html

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PRINTER'S NO. 1345
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 1133 Session of2009
INTRODUCED BY LENTZ, McCALL, MARKOSEK, M. SMITH, BARRAR, FREEMAN, GEIST, HARKINS, JOSEPHS, KILLION, MANDERINO, MELIO, PAYTON, PHILLIPS, SEIP, SIPTROTH, K. SMITH, STURLA, WHEATLEY, YOUNGBLOOD AND YUDICHAK, MARCH 27, 2009
REFERRED TO COMMITTEE ON TRANSPORTATION, MARCH 27, 2009
AN ACT
Amending the act of December 8, 2004 (P.L.1801, No.238),
entitled "An act empowering municipalities, counties and
public transportation agencies to work cooperatively to
establish Transit Revitalization Investment Districts (TRID),
including partnerships with the National Railroad Passenger
Corporation requiring planning studies, comprehensive plan
and zoning amendments and use of existing statutes and
techniques to achieve transit-oriented development,
redevelopment, community revitalization and enhanced
community character through TRID creation; establishing value
capture areas as a means to reserve and use future,
designated incremental tax revenues for public transportation
capital improvements, related site development improvements
and maintenance; promoting the involvement of and
partnerships with the private sector in TRID development and
implementation; encouraging public involvement during TRID
planning and implementation; and providing for duties of the
Department of Community and Economic Development," further
providing for definitions and for TRID criteria; providing
for TRID project cost; further providing for creation of
value capture area and for dedication of tax revenues;
establishing the TRID Development Program and the TRID
Development Fund; and imposing powers and duties on the
Office of the Budget, the Department of Community and
Economic Development and the Department of Revenue.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 103 of the act of December 8, 2004
(P.L.1801, No.238), known as the Transit Revitalization
Investment District Act, is amended by adding definitions to
read:
Section 103. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
* * *
"Applicant." The municipality which hosts the proposed TRID
district.
"Cost of a project." Any of the following expenses incurred
for a project identified as a component of a TRID plan:
(1) Expenses for the acquisition, construction,
reconstruction, expansion, extension, demolition,
improvement, rehabilitation or remodeling of interests in
land, buildings, structures, improvements or infrastructure
which are part of the project.
(2) Expenses for the remediation of existing
environmental hazards on the land where the project is or
will be located.
(3) Financing charges and other costs and expenses
incurred in financing and issuing bonds for the project.
(4) Costs and expenses of administration and
professional services rendered in completing the project.
This paragraph includes engineering, financial, accounting
and legal services.
(5) Costs and expenses associated with the preparation
of plans, specifications, studies and surveys necessary or
incidental to determining the feasibility or practicality of
constructing the project.
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* * *
"Development program." The TRID Development Program
established in section 801.
"Fund." The TRID Development Fund established in section
803.
"Infrastructure." Any of the following:
(1) Drainage and storm water systems.
(2) Energy facilities which distribute electric power.
(3) Wastewater systems.
(4) Transportation facilities. This paragraph includes
roads, parking facilities, sidewalks, bridges, rails, ports,
waterways, airports, transit terminals, platforms and
stations.
(5) Pipelines for transporting natural gas.
(6) Facilities for the transmission of information. This
paragraph includes telecommunication and cable facilities.
(7) Water supply facilities.
(8) Interests in land to construct a facility, pipeline
or system listed in paragraphs (1) through (7).
(9) Engineering, design and inspection costs associated
with the construction of a facility, pipeline or system
listed in paragraphs (1) through (7).
"Issuing authority." Any of the following:
(1) The Pennsylvania Economic Development Financing
Authority.
(2) An authority established under the act of May 24,
1945 (P.L.991, No.385), known as the Urban Redevelopment Law.
(3) An authority established under Article XXV-A of the
act of July 28, 1953 (P.L.723, No.230), known as the Second
Class County Code.
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(4) An authority established under Article XXIII(n) or
(o) of the act of August 9, 1955 (P.L.323, No.130), known as
The County Code.
(5) An authority established under section 4 of the act
of August 23, 1967 (P.L.251, No.102), known as the Economic
Development Financing Law.
(6) An authority authorized to issue tax increment bonds
or notes under section 9 of the act of July 11, 1990
(P.L.465, No.113), known as the Tax Increment Financing Act.
"Project user." A taxable entity that generates revenue
under any of the following:
(1) Article II of the act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971.
(2) Section 316 of the Tax Reform Code of 1971.
(3) Article IV of the Tax Reform Code of 1971.
* * *
Section 2. Section 301 of the act is amended to read:
Section 301. Criteria for proposed TRID.
Local municipalities, counties, transportation authorities
and public transportation agencies proposing to define and
develop a TRID shall use the following criteria and process:
(1) Eligible TRID locations may include any geographic
area of a municipality or municipalities, including vacant,
underutilized or potentially redevelopable land, within an
area generally formed by a minimum radius of one-eighth mile
and not to exceed a radius of one-half mile from a railroad,
transit, light rail, busway or similar transit stop or
station, measured from the centerline of the track or roadway
traversing the station or stop location. TRID designation may
also include new station locations proposed in conjunction
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with a planned public transportation service, as defined on
an adopted county, regional or public transportation agency
plan.
(2) The specific boundaries of a TRID may be expanded or
reduced based on local circumstances such as local economic
development and planning goals, community character, property
boundary and scale variations but only when:
(i) authorized by the governing body or bodies of
the affected jurisdiction or jurisdictions in cooperation
with the pertinent public transportation agency; and
(ii) the rationale for the boundaries is supported
by the findings of the required TRID planning study.
(3) A local municipality or municipalities shall further
define and support the rationale for the TRID designation
through a TRID planning study as well as appropriate
amendments to the municipal comprehensive plan, zoning
ordinance and other pertinent regulations.
(4) A local municipality may designate the county
planning agency or county redevelopment authority to
undertake or assist the TRID planning study on its behalf.
(5) An existing neighborhood improvement district, tax
increment district or urban renewal area may be used as the
basis for the boundaries of a TRID when justified by the TRID
planning study required in section 304.
Section 3. The act is amended by adding a section to read:
Section 304.1. TRID project cost.
The issuing authority shall provide for the cost of a project
through financing not backed by the full faith and credit of the
Commonwealth.
Section 4. Sections 701 and 702 of the act are amended to
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read:
Section 701. Creation of value capture area.
In conjunction with the formal establishment of the TRID
boundaries, a coterminous value capture area shall
simultaneously be created to enable local municipalities, school
districts, the county and the public transportation agency to
share the increased tax increment of real estate and other
designated tax revenues generated by new real estate investment
within the TRID. The participants in the TRID, through the
designated management entity, shall develop an administrative
and project schedule and budget to implement the project,
including future maintenance needs, as defined in the TRID
planning study[, as well as the shares and use of such tax
revenues as are projected to be generated from the TRID value
capture area]. The participating municipality or municipalities
may review and revise the TRID budget.
Section 702. Dedication of tax revenues.
Tax revenues generated within a TRID shall be dedicated to
completion and future maintenance of the specific and necessary
[improvements] costs of a project designated in the
comprehensive plan amendment and TRID planning study as follows:
(1) Local municipalities and counties shall not use such
revenues for general government purposes, and a public
transportation agency shall not use such revenues for transit
capital investments elsewhere on the public transportation
system.
(2) Local municipalities, school districts and the
county shall establish an amortization schedule for receipt,
investment and expenditure of any TRID tax revenues, not to
exceed 20 years, similar to the amortization schedule in the
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act of July 11, 1990 (P.L.465, No.113), known as the Tax
Increment Financing Act. However, where a municipal or joint
municipal authority has been created, it shall be responsible
for fixing the amortization schedule and for defining the
TRID capital improvement plan.
Section 5. The act is amended by adding a chapter to read:
CHAPTER 8
TRID DEVELOPMENT PROGRAM
Section 801. Development program.
(a) Establishment.--There is established within the
department a development program to be known as the TRID
Development Program.
(b) Goal.--The goal of the development program is to enhance
the economic development of this Commonwealth by providing
financial assistance in the form of multiyear grants to issuing
authorities for TRID projects.
(c) Dedication.--Grants under the program shall be dedicated
to completion and future maintenance of the specific and
necessary costs of a project designated in the comprehensive
plan amendment and TRID planning study.
(d) Issuing authorities.--
(1) Subject to paragraph (2), each issuing authority
shall establish an allocation schedule for receipt,
investment and expenditure of grants. The allocation schedule
may not exceed 20 years. The allocation schedule shall be
similar to the allocation schedule in the act of July 11,
1990 (P.L.465, No.113), known as the Tax Increment Financing
Act.
(2) If a municipal or joint municipal authority has been
created, it shall be responsible for fixing the allocation
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schedule and for defining the TRID capital improvement plan
in the area of its jurisdiction.
(e) Restrictions.--
(1) An issuing authority may not use a grant for general
government purposes.
(2) A public transportation agency may not use a grant
for transit capital investments elsewhere on the public
transportation system or on any general administrative or
operating expenses.
Section 802. Administration.
(a) Issuing authorities.--Each issuing authority shall
submit annually a list of taxable properties and businesses
within the TRID district to the Department of Revenue for the
purpose of assessment.
(b) Department of Revenue.--The Department of Revenue shall
verify the submitted list of taxable properties and businesses
within each TRID district and direct the transfer of the
following tax revenues to the fund:
(1) Twenty-five percent of the tax under Article II of
the act of March 4, 1971 (P.L.6, No.2), known as the Tax
Reform Code of 1971, generated by existing businesses within
the defined value capture area remitted by the project user.
(2) The entire tax under Article II of the Tax Reform
Code of 1971 generated by businesses located within the
defined value capture area from activities as a result of the
project.
(3) The net increase in personal income tax withheld by
the project user as an employer under section 316 of the Tax
Reform Code of 1971 from activities as a result of the
project.
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(c) Department.--
(1) The department has the following duties:
(i) Implement this chapter.
(ii) Review applications under section 805.
(2) The department has the following powers:
(i) Make grants under sections 801(b), 803(c) and
806.
(ii) Promulgate regulations to implement this
chapter.
Section 803. Fund.
(a) Establishment.--The TRID Development Fund is established
as a separate fund in the State Treasury.
(b) Sources.--The following are the sources of the fund:
(1) Transfers under section 802(b).
(2) Appropriations.
(3) Return on money in the fund.
(c) Use.--The department shall use the money in the fund to
make grants under section 802(c)(2)(i).
(d) Nonlapse.--The money in the fund is continuously
appropriated into the fund. This appropriation shall not lapse
at the end of any fiscal year.
Section 804. Application.
An applicant must submit an application to the department
requesting financial assistance for a project by March 31. The
application must be on a form required by the department and
must include all of the following:
(1) The name and address of the applicant.
(2) The name, address and State tax identification
number of the project user.
(3) A description of the project. This paragraph
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includes all of the following:
(i) A detailed narrative describing the project and
the project user.
(ii) A detailed statement of the cost of the
project. This subparagraph includes:
(A) the amount and type of debt to be issued by
the applicant for the project;
(B) the identity of the party responsible for
repayment of the debt; and
(C) the collateral or security to be provided.
(iii) A statement of the number of net new full-time
jobs to be created by the project and the number of
existing full-time jobs to be preserved by the project.
(iv) A statement of the amount of grant funds being
requested per year.
(v) A statement of the number of years for which a
grant is being requested. The request may not exceed 20
years.
(vi) Financial information from the project user
prepared or reported on by an independent certified
public accountant projecting for the next three years all
of the following:
(A) The projected tax under Article II of the
act of March 4, 1971 (P.L.6, No.2), known as the Tax
Reform Code of 1971, to be collected as a result of
the project.
(B) The projected net increase in personal
income tax withheld by the project user as an
employer under section 316 of the Tax Reform Code of
1971 as a result of the project.
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(C) The projected tax of the project user under
Article IV of the Tax Reform Code of 1971 as a result
of the project.
(vii) Evidence of a firm commitment from the project
user to use the project upon completion.
(viii) Any other information required by the
department.
Section 805. Review.
(a) Project review.--Upon receiving a completed application,
the department shall review the application to determine all of
the following:
(1) That the cost of the project is reasonable.
(2) The number of net new full-time jobs created or to
be created by the project and the number of existing full-
time jobs to be preserved by the project.
(3) That a firm commitment from the project user to use
the project upon completion exists.
(4) That the financing for the project identifies a
party other than the Commonwealth that will be responsible
for repayment of the debt.
(5) That the applicant submitted satisfactory financial
information from the project user prepared or reported on by
an independent certified public accountant.
(6) That the financing for the project does not pledge
the full faith and credit of the Commonwealth.
(7) That the applicant and the project user complied
with all other criteria established by the department.
(b) Financial review.--
(1) Upon being satisfied that all requirements have been
met, the department shall forward the application to the
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Office of the Budget and the Department of Revenue. The
office, in conjunction with the Department of Revenue, shall
review the application. Notwithstanding section 353(f) of the
act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform
Code of 1971, the Department of Revenue may supply the
department and the office with information concerning taxes
owed or paid by a project user or for which a project user
may otherwise be liable or with any other aspect of an
applicant's tax liability. The office, in conjunction with
the Department of Revenue, shall evaluate the information in
section 804(3)(vi).
(2) The office may accept, reject or adjust the
projections in section 804(3)(vi).
Section 806. Approval.
(a) Financial approval.--Upon being satisfied that all
requirements have been met, the Secretary of the Budget shall
establish a maximum annual amount for the grant and shall notify
the department and the Department of Revenue. The annual amount
established shall be based upon the review made in section
805(b).
(b) Grant approval.--Upon receipt of the notification
required in subsection (a) and before July 1, the department
shall approve the application and award the applicant a grant
for the immediately following fiscal year in an amount not to
exceed the amount established by the secretary. If the
department does not act before July 1, the grant shall not be
awarded for the immediately following fiscal year but shall be
awarded in the next available fiscal year. Prior to providing
grant funds to the applicant, the department shall enter into a
contract with the applicant and the project user. The contract
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shall include provisions which do all of the following:
(1) Specify the amount of the grant per year for the
first four years.
(2) Specify the total number of years that grant funds
may be provided to the applicant. The total may not exceed 20
years.
(3) If the grant will be awarded for more than four
years, establish the procedure for the award of a grant after
the fourth year. To provide a grant beyond the initial four-
year period, the applicant must demonstrate to the
satisfaction of the department, secretary and the Department
of Revenue all of the following:
(i) That the tax revenues specified in section 805
during the first or second year generated an amount equal
to or exceeding the amount of the grant awarded for that
year.
(ii) That the tax revenues specified in section
804(3)(vi) during the fourth year are anticipated to be
equal to or exceed the amount of the grant to be awarded
during the fourth year.
(iii) That the tax revenues specified in section
804(3)(vi) during the succeeding three-year period are
anticipated to be equal to or exceed the amount of the
grant to be awarded during that same time period. Grants
shall be verified prior to any subsequent request being
granted.
(iv) That the amount of the annual grant requested
in the fifth and each succeeding year will not exceed the
amount of any annual debt service owed on the project.
(4) Specify that the annual amount of the grant in any
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one year may not exceed the annual amount of debt service on
the project for that year.
(5) If the grant in any one year exceeds annual payment
on debt service in that year, require the applicant to repay
the amount of the grant for that year which exceeds payment
on debt service for that year.
(6) Require the applicant to ensure that the full amount
of annual debt service is paid for the project, regardless of
the amount of the grant received.
(7) Require the project user to do all of the following:
(i) Use the project for the period of time the
applicant is receiving grants under this chapter.
(ii) Repay the appropriate portion of a grant if the
project user fails to use the project for the period of
time the applicant is receiving grants.
(8) Require the project user to timely pay all
Commonwealth and local taxes and fees.
(9) Require the department to approve any change of use
of a project during the period in which the applicant is
receiving a grant from the department. The department may not
unreasonably withhold its consent to a change of use under
this paragraph.
(c) Limitations.--If sufficient funds are not appropriated
or accumulated to cover the anticipated cost of grants awarded
in any given fiscal year, the department shall prorate payments
to applicants in the proportion that each awarded grant bears to
the total awarded grants. Prorated payment amounts shall be
determined by the amount of annual tax revenue accumulated in
the fund under section 802(b).
Section 6. This act shall take effect in 60 days.
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