Senate Bill No. 272

(By Senators Kessler (Acting President) and Hall,

By Request of the Executive)

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[Introduced January 25, 2011; referred to the Committee on Energy, Industry and Mining; and then to the Committee on Finance.]

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A BILL to amend and reenact §7-11B-3, §7-11B-4, §7-11B-7, §7-11B-8, §7-11B-9, §7-11B-10, §7-11B-17 and §7-11B-22 of the Code of West Virginia, 1931, as amended, all relating to the West Virginia Tax Increment Financing Act; revising definitions relating to governing bodies of counties and municipalities; adding definition for "municipality"; adding remediation of property to definition of "development or "redevelopment project"; redefining "project costs" to include remediation costs for landfills, former coal mining sites, solid waste facilities or hazardous waste sites; defining "remediation"; requiring the Director of the Development Office to provide the Legislature with an itemized list of applications seeking approval of development and redevelopment districts along with a status explanation of applications on dates certain; clarifying municipalities' power to utilize tax increment financing and to finance project costs by other means; clarifying that municipalities are not required to seek approval when amending project plans if the project is not enlarged or the total amount of indebtedness increased; providing that development or redevelopment districts shall not be terminated so long as tax increment financing obligations remain outstanding; clarifying the time when bonds may be refunded or refinanced and when refunding bonds may be issued in principal amounts; and providing technical corrections.

Be it enacted by the Legislature of West Virginia:
That §7-11B-3, §7-11B-4, §7-11B-7, §7-11B-8, §7-11B-9, §7-11B- 10, §7-11B-17 and §7-11B-22 of the Code of West Virginia, 1931, as amended, be amended and reenacted, all to read as follows:
ARTICLE 11B. WEST VIRGINIA TAX INCREMENT FINANCING ACT.
§7-11B-3. Definitions.
(a) General. -- When used in this article, words and phrases defined in this section shall have the meanings ascribed to them in this section unless a different meaning is clearly required either by the context in which the word or phrase is used or by specific definition in this article.
(b) Words and phrases defined. --
(1) "Agency" includes a municipality, a county or municipal development agency established pursuant to authority granted in section one, article twelve of this chapter, a port authority, an airport authority or any other entity created by this state or an agency or instrumentality of this state that engages in economic development activity.
(2) "Base assessed value" means the taxable assessed value of all real and tangible personal property, excluding personal motor vehicles, having a tax situs within a development or redevelopment district as shown upon the landbooks and personal property books of the assessor on July 1 of the calendar year preceding the effective date of the order or ordinance creating and establishing the development or redevelopment district.
(3) "Blighted area" means an area within the boundaries of a redevelopment district located within the territorial limits of a municipality or county in which the structures, buildings or improvements, by reason of dilapidation, deterioration, age or obsolescence, inadequate provision for access, ventilation, light, air, sanitation, open spaces, high density of population and overcrowding or the existence of conditions which endanger life or property, are detrimental to the public health, safety, morals or welfare. "Blighted area" includes any area which, by reason of the presence of a substantial number of substandard, slum, deteriorated or deteriorating structures, predominance of defective or inadequate street layout, faulty lot layout in relation to size, adequacy, accessibility or usefulness, unsanitary or unsafe conditions, deterioration of site or other improvements, diversity of ownership, defective or unusual conditions of title or the existence of conditions which endanger life or property by fire and other causes, or any combination of such factors, substantially impairs or arrests the sound growth of a municipality, retards the provision of housing accommodations or constitutes an economic or social liability and is a menace to the public health, safety, morals or welfare in its present condition and use, or any area which is predominantly open and which because of lack of accessibility, obsolete platting, diversity of ownership, deterioration of structures or of site improvements, or otherwise, substantially impairs or arrests the sound growth of the community. (4) "Conservation area" means any improved area within the boundaries of a development or redevelopment district located within the territorial limits of a municipality or county in which fifty percent or more of the structures in the area have an age of thirty-five years or more. A conservation area is not yet a blighted area but is detrimental to the public health, safety, morals or welfare and may become a blighted area because of any one or more of the following factors: Dilapidation, obsolescence, deterioration, illegal use of individual structures, presence of structures below minimum code standards, abandonment, excessive vacancies, overcrowding of structures and community facilities, lack of ventilation, light or sanitary facilities, inadequate utilities, excessive land coverage, deleterious land use or layout, depreciation of physical maintenance and lack of community planning. A conservation area shall meet at least three of the factors provided in this subdivision.
(5) "County commission" means the governing body of a county of this state and, for purposes of this article only, includes the governing body of a Class I or Class II municipality in this state.
(6) "Current assessed value" means the annual taxable assessed value of all real and tangible personal property, excluding personal motor vehicles, having a tax situs within a development or redevelopment district as shown upon the landbook and personal property records of the assessor.
(7) "Development office" means the West Virginia Development Office created in section one, article two, chapter five-b of this code.
(8) "Development project" or "redevelopment project" means a project undertaken in a development or redevelopment district for eliminating or preventing the development or spread of slums or deteriorated, deteriorating or blighted areas, for discouraging the loss of commerce, industry or employment, for increasing employment, for remediation of property or for any combination thereof in accordance with a tax increment financing plan. A development or redevelopment project may include one or more of the following:
(A) The acquisition of land and improvements, if any, within the development or redevelopment district and clearance or remediation, or both, of the land so acquired; or
(B) The development, redevelopment, revitalization or conservation of the project area whenever necessary to provide land for needed public facilities, public housing, or industrial or commercial development or revitalization, to eliminate unhealthful, unsanitary or unsafe conditions, to lessen density, mitigate or eliminate traffic congestion, reduce traffic hazards, eliminate obsolete or other uses detrimental to public welfare or otherwise remove or prevent the spread of blight or deterioration;
(C) The financial or other assistance in the relocation of persons and organizations displaced as a result of carrying out the development or redevelopment project and other improvements necessary for carrying out the project plan, together with those site improvements that are necessary for the preparation of any sites and making any land or improvements acquired in the project area available, by sale or lease, for public housing or for development, redevelopment or rehabilitation by private enterprise for commercial or industrial uses in accordance with the plan;
(D) The construction of capital improvements within a development or redevelopment district designed to increase or enhance the development of commerce, industry or housing within the development project area; or
(E) Any other projects the county commission or the agency deems appropriate to carry out the purposes of this article.
(9) "Development or redevelopment district" means an area proposed by one or more agencies as a development or redevelopment district, which may include one or more counties, one or more municipalities or any combination, thereof, that has been approved by the county commission of each county in which the project area is located if the project is located outside the corporate limits of a municipality, or by the governing body of a municipality if the project area is located within a municipality, or by both the county commission and the governing body of the municipality when the development or redevelopment district is located both within and without a municipality.
(10) "Economic development area" means any area or portion of an area within the boundaries of a development or redevelopment district located within the territorial limits of a municipality or county that does not meet the requirements of subdivisions (3) and (4) of this subsection and for which the county commission finds that development or redevelopment will not be solely used for development of commercial businesses that will unfairly compete in the local economy and that development or redevelopment is in the public interest because it will:
(A) Discourage commerce, industry or manufacturing from moving their operations to another state;
(B) Result in increased employment in the municipality or county, whichever is applicable; or
(C) Result in preservation or enhancement of the tax base of the county or municipality.
(11) "Governing body of a municipality" means the city council of a Class I or Class II municipality in this state.
(12) "Incremental value" for any a development or redevelopment district means the difference between the base assessed value and the current assessed value. The incremental value will be positive if the current value exceeds the base value and the incremental value will be negative if the current value is less than the base assessed value.
(13) "Includes" and "including" when used in a definition contained in this article shall not be deemed to does not exclude other things otherwise within the meaning of the term being defined.
(14) "Local levying body" means the county board of education and the county commission and includes the governing body of a municipality when the development or redevelopment district is located, in whole or in part, within the boundaries of the municipality.
(15) "Municipality" means any Class I, Class II and Class III city and any Class IV town or village heretofore or hereafter incorporated as a municipal corporation under the laws of this state.
(15) (16) "Obligations" or "tax increment financing obligations" means bonds, loans, debentures, notes, special certificates or other evidences of indebtedness issued by a county commission or municipality pursuant to this article to carry out a development or redevelopment project or to refund outstanding obligations under this article.
(16) (17) "Order" means an order of the county commission adopted in conformity with the provisions of this article and as provided in this chapter.
(17) (18) "Ordinance" means a law adopted by the governing body of a municipality in conformity with the provisions of this article and as provided in chapter eight of this code.
(18) (19) "Payment in lieu of taxes" means those estimated revenues from real property and tangible personal property having a tax situs in the area selected for a development or redevelopment project which revenues, according to the development or redevelopment project or plan, are to be used for a private use and which levying bodies would have received had a county or municipality not adopted one or more tax increment financing plans and which would result from levies made after the date of adoption of a tax increment financing plan during the time the current assessed value of all taxable real and tangible personal property in the area selected for the development or redevelopment project exceeds the total base assessed value of all taxable real and tangible personal property in the development or redevelopment district until the designation is terminated as provided in this article.
(19) (20) "Person" means any a natural person and any a corporation, association, partnership, limited partnership, limited liability company or other entity, regardless of its form, structure or nature, other than a government agency or instrumentality.
(20) (21) "Private project" means any project that is subject to ad valorem property taxation in this state or to a payment in lieu of tax agreement that is undertaken by a project developer in accordance with a tax increment financing plan in a development or redevelopment district.
(21) (22) "Project" means any capital improvement, facility or both, as specifically set forth and defined in the project plan, requiring an investment of capital, including, but not limited to, extensions, additions or improvements to existing facilities, including water or wastewater facilities, and the remediation of contaminated property as provided for in article twenty-two, chapter twenty-two of this code property located within the development or redevelopment district as provided herein but does not include performance of any governmental service by a county or municipal government.
(22) (23) "Project area" means an area within the boundaries of a development or redevelopment district in which a development or redevelopment project is undertaken as specifically set forth and defined in the project plan.
(23) (24) "Project costs" means expenditures made in preparation of the development or redevelopment project plan and made, or estimated to be made, or monetary obligations incurred, or estimated to be incurred, by the county commission which are listed in the project plan as capital improvements within a development or redevelopment district, plus any costs incidental thereto. "Project costs" include, but are not limited to:
(A) Capital costs, including, but not limited to, the actual costs of the construction of public works or improvements, capital improvements and facilities, new buildings, structures and fixtures, the demolition, alteration, remodeling, repair or reconstruction of existing buildings, structures and fixtures, environmental remediation, parking and landscaping, the acquisition of equipment and site clearing, grading and preparation;
(B) Costs of remediation of publicly or privately owned landfills, former coal mining sites, solid waste facilities or hazardous waste sites to facilitate commercial development which would not otherwise be economically feasible ;
(B) (C) Financing costs, including, but not limited to, an interest paid to holders of evidences of indebtedness issued to pay for project costs, all costs of issuance and any redemption premiums, credit enhancement or other related costs;
(C) (D) Real property assembly costs, meaning any deficit incurred resulting from the sale or lease as lessor by the county commission of real or personal property having a tax situs within a development or redevelopment district for consideration that is less than its cost to the county commission;
(D) (E) Professional service costs, including, but not limited to, those costs incurred for architectural planning, engineering and legal advice and services;
(E) (F) Imputed administrative costs, including, but not limited to, reasonable charges for time spent by county employees or municipal employees in connection with the implementation of a project plan;
(F) (G) Relocation costs, including, but not limited to, those relocation payments made following condemnation and job training and retraining;
(G) (H) Organizational costs, including, but not limited to, the costs of conducting environmental impact and other studies and the costs of informing the public with respect to the creation of a development or redevelopment district and the implementation of project plans;
(H) (I) Payments made, in the discretion of the county commission or the governing body of a municipality, which are found to be necessary or convenient to creation of development or redevelopment districts or the implementation of project plans; and
(I) (J) That portion of costs related to the construction of environmental protection devices, storm or sanitary sewer lines, water lines, amenities or streets or the rebuilding or expansion of streets, or the construction, alteration, rebuilding or expansion of which is necessitated by the project plan for a development or redevelopment district whether or not the construction, alteration, rebuilding or expansion is within the area or on land contiguous thereto.
(24) (25) "Project developer" means any person who engages in the development of projects in the state.
(25) (26) "Project plan" means the plan for a development or redevelopment project that is adopted by a county commission or governing body of a municipality in conformity with the requirements of this article and this chapter or chapter eight of this code.
(26) (27) "Real property" means all lands, including improvements and fixtures on them and property of any nature appurtenant to them or used in connection with them and every estate, interest and right, legal or equitable, in them, including terms of years and liens by way of judgment, mortgage or otherwise, and indebtedness secured by the liens.
(27) (28) "Redevelopment area" means an area designated by a county commission or the governing body of a municipality in respect to which the commission or governing body has made a finding that there exist conditions which cause the area to be classified as a blighted area, a conservation area, an economic development area or a combination thereof, which area includes only those parcels of real property directly and substantially benefitted by the proposed redevelopment project located within the development or redevelopment district or land contiguous thereto. contiguous land.
(29) "Remediation" means measures undertaken to bring about the reconditioning or restoration of property located within the boundaries of a development or redevelopment district that has been affected by exploration, mining, industrial operations or solid waste disposal and which measures, when undertaken, will eliminate or ameliorate the existing state of the property and enable the property to be commercially developed.
(28) (30) "Redevelopment plan" means the comprehensive program under this article of a county or municipality for redevelopment intended by the payment of redevelopment costs to reduce or eliminate those conditions, the existence of which qualified the redevelopment area as a blighted area, conservation area, economic development area or combination thereof and to thereby enhance the tax bases of the levying bodies which extend into the redevelopment area. Each redevelopment plan shall conform to the requirements of this article.
(29) (31) "Tax increment" means the amount of regular levy property taxes attributable to the amount by which the current assessed value of real and tangible personal property having a tax situs in a development or redevelopment district exceeds the base assessed value of the property.
(30) (32) "Tax increment financing fund" means a separate fund for a development or redevelopment district established by the county commission or governing body of the municipality into which all tax increment revenues and other pledged revenues are deposited and from which projected project costs, debt service and other expenditures authorized by this article are paid.
(31) (33) "This code" means the Code of West Virginia, 1931, as amended by the Legislature.
(32) (34) "Total ad valorem property tax regular levy rate" means the aggregate levy rate of all levying bodies on all taxable property having a tax situs within a development or redevelopment district in a tax year but does not include excess levies, levies for general obligation bonded indebtedness or any other levies that are not regular levies.
§7-11B-4. Powers generally.
 In addition to any other powers conferred by law, a county commission or governing body of a Class I or Class II municipality may exercise any powers necessary and convenient to carry out the purpose of this article, including the power to:
(1) Create development and redevelopment areas or districts and to define the boundaries of those areas or districts;
(2) Cause project plans to be prepared, to approve the project plans and to implement the provisions and effectuate the purposes of the project plans;
(3) Establish tax increment financing funds for each development or redevelopment district;
(4) Issue tax increment financing obligations and pledge tax increments and other revenues for repayment of the obligations;
(5) Deposit moneys into the tax increment financing fund for any development or redevelopment district;
(6) Enter into any contracts or agreements, including, but not limited to, agreements with project developers, consultants, professionals, financing institutions, trustees and bondholders determined by the county commission to be necessary or convenient to implement the provisions and effectuate the purposes of project plans which may include provisions for reimbursement of project costs expended by such entities from tax increment or the proceeds of tax increment financing obligations;
(7) Receive from the federal government or the state loans and grants for, or in aid of, a development or redevelopment project and to receive contributions from any other source to defray project costs;
(8) Exercise the right of eminent domain to condemn property for the purposes of implementing the project plan with the rules and procedures set forth in chapter fifty-four of this code shall govern governing all condemnation proceedings authorized in this article;
(9) Make relocation payments to those persons, businesses or organizations that are displaced as a result of carrying out the development or redevelopment project;
(10) Clear and improve property acquired by the county commission pursuant to the project plan and construct public facilities on it or contract for the construction, development, redevelopment, rehabilitation, remodeling, alteration or repair of the property;
(11) Cause parks, playgrounds or water, sewer or drainage facilities or any other public improvements, including, but not limited to, fire stations, community centers and other public buildings which the county commission is otherwise authorized to undertake to be laid out, constructed or furnished in connection with the development or redevelopment project. When the public improvement of the county commission is to be located, in whole or in part, within the corporate limits of a municipality, the county commission shall consult with the mayor and the governing body of the municipality regarding the public improvement and shall pay for the cost of the public improvement from the tax increment financing fund;
(12) Lay out and construct, alter, relocate, change the grade of, make specific repairs upon or discontinue public ways and construct sidewalks in, or adjacent to, the project area. Provided, That When the public way or sidewalk is located within a municipality, the governing body of the municipality shall consent to the same and if the public way is a state road, the consent of the commissioner of highways shall be is necessary;
(13) Cause private ways, sidewalks, ways for vehicular travel, playgrounds or water, sewer or drainage facilities and similar improvements to be constructed within the project area for the particular use of the development or redevelopment district or those dwelling or working in it;
(14) Construct any capital improvements of a public nature;
(15) Construct capital improvements to be leased or sold to private entities in connection with the goals of the development or redevelopment project;
(16) Cause capital improvements owned by one or more private entities to be constructed within the development or redevelopment district;
(17) Designate one or more official or employee of the county commission to make decisions and handle the affairs of development and redevelopment project areas or districts district created by the county commission pursuant to this article;
(18) Adopt orders, ordinances or bylaws or repeal or modify such ordinances or bylaws or establish exceptions to existing ordinances and bylaws regulating the design, construction and use of buildings within the development or redevelopment district created by a county commission or governing body of a municipality under this article;
(19) Enter orders, adopt bylaws or repeal or modify such orders or bylaws or establish exceptions to existing orders and bylaws regulating the design, construction and use of buildings within the development or redevelopment district created by a county commission or governing body of a municipality under this article;
(20) (19) Sell, mortgage, lease, transfer or dispose of any property or interest therein, by contract or auction, acquired by it the county commission or governing body of the municipality pursuant to the project plan for development, redevelopment or rehabilitation in accordance with the project plan;
(21) (20) Expend project revenues as provided in this article; and
(21) Temporarily finance any project costs through the issuance of bonds, loans, debentures, notes, special certificates or other evidences of indebtedness or the expenditure of the g eneral f unds of a county commission or municipality: Provided, That any temporary financing may be paid from tax increments or the proceeds of any tax increment financing obligations and any expenditure of general funds for such costs may be reimbursed from tax increment or the proceeds of any tax increment financing obligations; and
(22) Do all things necessary or convenient to carry out the powers granted in this article.
§7-11B-7. Creation of a development or redevelopment or district. (a) County commissions and the governing bodies of Class I and II municipalities, upon their own initiative or upon application of an agency or a developer, may propose creation of a development or redevelopment district and designate the boundaries of the district Provided, That a district may not include noncontiguous land. which must be comprised of contiguous land.
(b) The county commission or municipality proposing creation of a development or redevelopment district shall then hold a public hearing at which interested parties are afforded a reasonable opportunity to express their views on the proposed creation of a development or redevelopment district and its proposed boundaries.
(1) Notice of the hearing shall be published as a Class II legal advertisement in accordance with section two, article three, chapter fifty-nine of this code.
(2) The notice shall include the time, place and purpose of the public hearing, describe in sufficient detail the tax increment financing plan, the proposed boundaries of the development or redevelopment district and, when a development or redevelopment project plan is being proposed, the proposed tax increment financing obligations to be issued to finance the development or redevelopment project costs.
(3) Prior to the first day of publication, a copy of the notice shall be sent by first-class mail to the director of the Development Office and to the chief executive officer of all other local levying bodies having the power to levy taxes on real and tangible personal property located within the proposed development or redevelopment district.
(4) All parties who appear at the hearing shall be afforded an opportunity to express their views on the proposal to create the development or redevelopment district and, if applicable, the development or redevelopment project plan and proposed tax increment financing obligations.
(c) After the public hearing, the county commission or the governing body of the municipality, shall finalize the boundaries of the development or redevelopment district, the development or redevelopment project plan, or both, and submit the same to the director of the Development Office for his or her review and approval. The director, within sixty days after receipt of the application, shall approve the application as submitted, reject the application or return the application to the county commission or governing body of the municipality for further development or review in accordance with instructions of the director of the Development Office. A development or redevelopment district or development or redevelopment project plan may not be adopted by the county commission or the governing body of a municipality until after it has been approved by the executive director of the Development Office. On February 1 and August 1 of each year, the director of the Development Office shall deliver to the Legislature of this state an itemized list of all applications seeking approval of: (i) the boundaries of a development or redevelopment district and: (ii) a development or redevelopment project plan, or both, that have not been approved, rejected or returned to the county commission or governing body of the municipality as required herein. Such itemized list shall include a detailed explanation of the reasons why such applications, if any, have not been approved, rejected or returned to the county commission or governing body of the municipality within the time frame provided herein.
(d) Upon approval of the application by the Development Office, the county commission may enter an order and the governing body of the municipality proposing the district or development or redevelopment project plan may adopt an ordinance that:
(1) Describes the boundaries of a development or redevelopment district sufficiently to identify with ordinary and reasonable certainty the territory included in the district, which boundaries shall create a contiguous district;
(2) Creates the development or redevelopment district as of a date provided in the order or ordinance;
(3) Assigns a name to the development or redevelopment district for identification purposes and which:
(A) The name May include a geographic or other designation;
(B) Shall identify the county or municipality authorizing the district; and
(C) Shall be assigned a number, beginning with the number one
(B) Each subsequently and each subsequently created district in the county or municipality shall be assigned the next consecutive number;
(4) Contains findings that the real property within the development or redevelopment district will be benefitted by eliminating or preventing the development or spread of slums or blighted, deteriorated or deteriorating areas, discouraging the loss of commerce, industry or employment, increasing employment or any combination thereof;
(5) Approves the development or redevelopment project plan, if applicable;
(6) Establishes a tax increment financing fund as a separate fund into which all tax increment revenues and other revenues designated by the county commission or governing body of the municipality for the benefit of the development or redevelopment district shall be deposited and from which all project costs shall be paid, which may be assigned to and held by a trustee for the benefit of bondholders if tax increment financing obligations are issued by the county commission or the governing body of the municipality; and
(7) Provides that ad valorem property taxes on real and tangible personal property having a tax situs in the development or redevelopment district shall be assessed, collected and allocated in the following manner, commencing upon the date of adoption of such order or ordinance and continuing for so long as any tax increment financing obligations are payable from the tax increment financing fund, hereinafter authorized, are outstanding and unpaid:
(A) For each tax year, the county assessor shall record in the land and personal property books both the base assessed value and the current assessed value of the real and tangible personal property having a tax situs in the development or redevelopment district;
(B) Ad valorem taxes collected from regular levies upon real and tangible personal property having a tax situs in the district that are attributable to the lower of the base assessed value or the current assessed value of real and tangible personal property located in the development project shall be allocated to the levying bodies in the same manner as applicable to the tax year in which the development or redevelopment project plan is adopted by order of the county commission or by ordinance adopted by the governing body of the municipality;
(C) The tax increment with respect to real and tangible personal property in the development or redevelopment district shall be allocated and paid into the tax increment financing fund and shall be used to pay the principal of and interest on tax increment financing obligations issued to finance the costs of the development or redevelopment projects in the development or redevelopment district. Any levying body having a development or redevelopment district within its taxing jurisdiction shall not receive any portion of the annual tax increment except as otherwise provided in this article; and
(D) In no event shall the tax increment include any taxes collected from excess levies, levies for general obligation bonded indebtedness or any levies other than the regular levies provided for in article eight, chapter eleven of this code.
(e) Proceeds from tax increment financing obligations issued under this article may only be used to pay for costs of development or redevelopment projects to foster economic development in the development or redevelopment district or land contiguous thereto.
contiguous land.
(f) Notwithstanding subsection (e) (d) of this section, a county commission may not enter an order approving a development or redevelopment project plan unless the county commission expressly finds and states in the order that the development or redevelopment project is not reasonably expected to occur without the use of tax increment financing.
(g) Notwithstanding subsection (e) (d) of this section, the governing body of a municipality may not adopt an ordinance approving a development or redevelopment project plan unless the governing body expressly finds and states in the ordinance that the development or redevelopment project is not reasonably expected to occur without the use of tax increment financing.
(h) No county commission shall establish a development or redevelopment district any portion of which is within the boundaries of a Class I or Class II municipality without the formal consent of the governing body of such municipality.
(i) A tax increment financing plan that has been approved by a county commission or the governing body of a municipality may be amended by following the procedures set forth in this article for adoption of a new development or redevelopment project plan.
(j) The county commission may modify the boundaries of the development or redevelopment district, from time to time, by entry of an order modifying the order creating the development or redevelopment district.
(k) The governing body of a municipality may modify the boundaries of the development or redevelopment district, from time to time, by amending the ordinance establishing the boundaries of the district.
(l) Before a county commission or the governing body of a municipality may amend such an order or ordinance, the county commission or municipality shall give the public notice, hold a public hearing and obtain the approval of the director of the Development Office, following the procedures for establishing a new development or redevelopment district. In the event any tax increment financing obligations are outstanding with respect to the development or redevelopment district, any change in the boundaries shall not reduce the amount of tax increment available to secure the outstanding tax increment financing obligations.
§7-11B-8. Project plan - approval.
(a) The county commission or municipality creating the district shall cause the preparation of a project plan for each development or redevelopment district and the project plan shall be adopted by order of the county commission or ordinance adopted by the governing body of the municipality after it is approved by the executive director of the Development Office. This process shall conform to the procedures set forth in this section.
(b) Each project plan shall include:
(1) A statement listing the kind, number and location of all proposed public works or other improvements within the district and on land outside but contiguous to the district;
(2) A cost-benefit analysis showing the economic impact of the plan on each levying body that is at least partially within the boundaries of the development or redevelopment district. This analysis shall show the impact on the economy if the project is not built and is built pursuant to the development or redevelopment plan under consideration. The cost-benefit analysis shall include a fiscal impact study on every affected levying body and sufficient information from the developer for the agency, if any are proposing the plan, to enable the county commission be asked to approve the project and the Development Office to evaluate whether the project as proposed is financially feasible;
(3) An economic feasibility study;
(4) A detailed list of estimated project costs;
(5) A description of the methods of financing all estimated project costs including the issuance of tax increment obligations and the time when the costs or monetary obligations related thereto related monetary obligations are to be incurred;
(6) A certification by the county assessor of the base assessed value of real and tangible personal property having a tax situs in a development or redevelopment district. Provided, That If such certification is made during the months of January or February of each year, the county assessor may certify an estimated base assessed value of real and tangible personal property having a tax situs in a development or redevelopment district Provided, however, and that prior to issuance of tax increment obligations, the county assessor shall certify a final base assessed value for the estimated base assessed value permitted by this section;
(7) The type and amount of any other revenues that are expected to be deposited to the tax increment financing fund of the development or redevelopment district;
(8) A map showing existing uses and conditions of real property in the development or redevelopment district;
(9) A map of proposed improvements and uses in the district;
(10) Proposed changes of zoning ordinances, if any;
(11) Appropriate cross-references to any master plan, map, building codes and municipal ordinances or county commission orders affected by the project plan;
(12) A list of estimated nonproject costs;
(13) A statement of the proposed method for the relocation of any persons, businesses or organizations to be displaced;
(14) A certificate from the executive director of the Workers' Compensation Commission, the Commissioner of the Bureau of Employment Programs and the State Tax Commissioner that the project developer, if any, is in good standing with the Workers' Compensation Commission, the Bureau of Employment Programs and the State Tax Division; and
(15) A certificate from the sheriff of the county or counties in which the development or redevelopment district is located that the project developer, if any, is not delinquent on payment of any real and personal property taxes in such county.
(c) If the project plan is to include tax increment financing, the tax increment financing portion of the plan shall set forth:
(1) The amount of indebtedness to be incurred pursuant to this article;
(2) An estimate of the tax increment to be generated as a result of the project;
(3) The method for calculating the tax increment which shall be in conformance with the provisions of this article together with any provision for adjustment of the method of calculation;
(4) Any other revenues, such as payment in lieu of tax revenues, to be used to secure the tax increment financing; and
(5) Any Other provisions as may be deemed necessary in order to carry out any tax increment financing to be used for the development or redevelopment project.
(d) If less than all of the tax increment is to be used to fund a development or redevelopment project or to pay project costs or retire tax increment financing obligations, the project plan shall set forth the portion of the tax increment to be deposited in the tax increment financing fund of the development or redevelopment district and provide for the distribution of the remaining portion of the tax increment to the levying bodies in whose jurisdiction the district lies.
(e) The county commission or governing body of the municipality that established the tax increment financing fund shall hold a public hearing at which interested parties shall be afforded a reasonable opportunity to express their views on the proposed project plan being considered by the county commission or the governing body of the municipality.
(1) Notice of the hearing shall be published as a Class II legal advertisement in accordance with section two, article three, chapter fifty-nine of this code.
(2) Prior to this publication, a copy of the notice shall be sent by first-class mail to the chief executive officer of all other levying bodies having the power to levy taxes on property located within the proposed development or redevelopment district.
(f) Approval by the county commission or the governing body of a municipality of an initial development or redevelopment project plan must be within one year after the date of the county assessor's certification required by subdivision (6), subsection (b) of this section. Provided, That Additional development or redevelopment project plans may be approved by the county commission or the governing body of a municipality in subsequent years so long as the development or redevelopment district continues to exist. The approval shall be by order of the county commission or ordinance of the municipality which shall contain a finding that the plan is economically feasible.
§7-11B-9. Project plan - amendment.
(a) The county commission may by order, or the governing body of a municipality by ordinance, adopt an amendment to a project plan.
(b) Adoption of an amendment to a project plan shall be preceded by a public hearing held by the county commission or governing body of the municipality at which interested parties shall be afforded a reasonable opportunity to express their views on the amendment.
(1) Notice of the hearing shall be published as a Class II legal advertisement in accordance with section two, article three, chapter fifty-nine of this code.
(2) Prior to publication, a copy of the notice shall be sent by first-class mail to the chief executive officer of all other local levying bodies having the power to levy taxes on property within the development or redevelopment district.
(3) Copies of the proposed plan amendments shall be made available to the public at the county clerk's office or municipal clerk's office at least fifteen days prior to the hearing.
(c) One or more existing development or redevelopment districts may be combined pursuant to lawfully adopted amendments to the original plans for each district: Provided, That the county commission or governing body of the municipality finds that the combination of the districts will not impair the security for any tax increment financing obligations previously issued pursuant to this article.
(d) A municipality or county commission is not required to obtain the approval of the director of the Development Office prior to amending a project plan if the amendment does not enlarge the development or redevelopment district or increase the total amount of indebtedness contained in the tax increment financing portion of the project plan application.
§7-11B-10. Termination of development or redevelopment district. (a) No development or redevelopment district may be in existence for a period longer than thirty years and no tax increment financing obligations may have a final maturity date later than the termination date of the area or district.
(b) The county commission or governing body of the municipality creating the development or redevelopment district may set a shorter period for the existence of the district. In this event, no tax increment financing obligations may have a final maturity date later than the termination date of the district.
(c) Upon termination of the district, no further ad valorem tax revenues shall be distributed to the tax increment financing fund of the district.
(d) The county commission shall adopt, upon the expiration of the time periods set forth in this section, an order terminating the development or redevelopment district created by the county commission. Provided, That No district shall No district may be terminated so long as bonds tax increment financing obligations with respect to the district remain outstanding.
(e) The governing body of the county commission shall repeal, upon the expiration of the time periods set forth in this section, the ordinance establishing the development or redevelopment district. Provided, That no district shall No district may be terminated so long as bonds tax increment financing obligations with respect to the district remain outstanding.
§7-11B-17. Division of ad valorem real property tax revenue. (a) For So long as the development or redevelopment district exists, the county sheriff shall divide the ad valorem tax revenue collected, with respect to taxable property in the district, as follows:
(1) The assessor shall determine for each tax year:
(A) The amount of ad valorem property tax revenue that should be generated by multiplying the assessed value of the property for the then current tax year by the aggregate of applicable levy rates for the tax year;
(B) The amount of ad valorem tax revenue that should be generated by multiplying the base assessed value of the property by the applicable regular ad valorem levy rates for the tax year;
(C) The amount of ad valorem tax revenue that should be generated by multiplying the assessed value of the property for the current tax year by the applicable levy rates for general obligation bond debt service for the tax year;
(D) The amount of ad valorem property tax revenue that should be generated by multiplying the assessed value of the property for the current tax year by the applicable excess levy rates for the tax year; and
(E) The amount of ad valorem property tax revenue that should be generated by multiplying the incremental value by the applicable regular levy rates for the tax year.
(2) The sheriff shall determine from the calculations set forth in subdivision (1) of this subsection the percentage share of total ad valorem revenue for each levying body according to paragraphs (B) through (D), inclusive, of said subdivision by dividing each of such amounts by the total ad valorem revenue figure determined by the calculation in paragraph (A) of said subdivision; and
(3) On each date on which ad valorem tax revenue is to be distributed to the levying bodies, such revenue shall be distributed by:
(A) Applying the percentage share determined according to paragraph (B), subdivision (1) of this subsection to the revenues received and distributing such share to the levying bodies entitled to such distribution pursuant to current law;
(B) Applying the percentage share determined according to paragraph (C), subdivision (1) of this subsection to the revenues received and distributing such share to the levying bodies entitled to such distribution by reason of having general obligation bonds outstanding;
(C) Applying the percentage share determined according to paragraph (D), subdivision (1) of this subsection to the revenues received and distributing such share to the levying bodies entitled to such distribution by reason of having excess levies in effect for the tax year; and
(D) Applying the percentage share determined according to paragraph (E), subdivision (1) of this subsection to the revenues received and distributing such share to the tax increment financing fund of the development or redevelopment district.
(b) In each year for which there is a positive tax increment, the county sheriff shall remit to the tax increment financing fund of the development or redevelopment district that portion of the ad valorem property taxes collected that consists of the tax increment.
(c) Any additional moneys appropriated to the development or redevelopment district pursuant to an appropriation by the county commission that created the district and any additional moneys dedicated to the fund from other sources shall be deposited to the tax increment financing fund for the development or redevelopment district by the sheriff.
(d) Any funds deposited into the tax increment financing fund of the development or redevelopment district may be used to pay project costs, principal and interest on bonds tax increment financing obligations and the cost of any other improvements in the development or redevelopment district deemed proper by the county commission.
(e) Unless otherwise directed pursuant to any an agreement with the holders of tax increment financing obligations, moneys in the tax increment financing fund may be temporarily invested in the same manner as other funds of the county commission or the municipality that established the fund.
(f) If less than all of the tax increment is to be used for project costs or pledged to secure tax increment financing obligations as provided in the plan for the development or redevelopment district, the sheriff shall account for that fact in distributing the ad valorem property tax revenues.
§7-11B-22. Tax increment financing obligations -- terms, conditions.

(a) Tax increment financing obligations may not be issued in an amount exceeding the estimated aggregate project costs, including all costs of issuance of the tax increment financing obligations.
(b) Tax increment financing obligations shall not be included in the computation of the Constitutional debt limitation of the county commission or municipality issuing the tax increment financing obligations.
(c) Tax increment financing obligations shall mature over a period not exceeding thirty years from the date of entry of the county commission's order, or the effective date of the municipal ordinance, creating the development or redevelopment district and approving the development or redevelopment plan, or a period terminating with the date of termination of the development or redevelopment district, whichever period terminates earlier.
(d) Tax increment financing obligations may contain a provision authorizing their redemption, in whole or in part, at stipulated prices, at the option of the county commission or municipality issuing the obligations, and, if so, the obligations shall provide the method of selecting the tax increment financing obligations to be redeemed.
(e) The principal and interest on tax increment financing obligations may be payable at any place set forth in the resolution, trust indenture or other document governing the obligations.
(f) Bonds or notes shall be issued in registered form.
(g) Bonds or notes may be issued in any denomination.
(h) Each tax increment financing obligation issued under this article is declared to be a negotiable instrument.
(i) The tax increment financing obligations may be sold at public or private sale.
(j) Insofar as they are consistent with subsections (a), (b) and (c) of this section, the procedures for issuance, form, contents, execution, negotiation and registration of county and municipal industrial or commercial revenue bonds set forth in article two-c, chapter thirteen of this code are incorporated by reference herein.
(k) The bonds may be refunded or refinanced and refunding bonds may be issued in any principal amount: Provided, That the last maturity of the refunding bonds shall not be later than the last maturity of the bonds being refunded maximum maturity provided in this article.

NOTE: The purpose of this bill is to clarify the power of municipalities to use tax increment financing for development and redevelopment projects. The bill also allows certain remediation projects to fall within the parameters of the article and provides that the Director of the Development Office must take action on applications for projects by a date certain or the projects are deemed approved by operation of law.

Strike-throughs indicate language that would be stricken from the present law and underscoring indicates new language that would be added.