Introduced by Representative Bostic of St. Johnsbury
Subject: Commerce and development; brownfields; redevelopment zones
Statement of purpose: This bill proposes to create redevelopment zones to enhance downtown redevelopment.
AN ACT RELATING TO REDEVELOPMENT ZONES
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. 10 V.S.A. chapter 21A is added to read:
CHAPTER 21A. REDEVELOPMENT ZONES
§ 511. DEFINITIONS
As used in this chapter:
(1) “Redevelopment zone” means an area within a municipality designated to accommodate a significant amount of industrial activity, high technology, or other job-producing activity; it includes one or more industrial facilities that have been vacant or substantially underutilized for more than ten years; and it has at least 15,000 square feet or a minimum of five acres if the site includes an older structure, and for which there is no economically feasible future business or industrial use.
(2) “Secretary” means the secretary of commerce and community development.
(3) “Substantially underutilized” means a property or facility of which less than ten percent has been occupied for uses other than storage or warehousing for at least ten years and for which active and sustained marketing have produced no significant employment.
§ 512. DESIGNATION OF REDEVELOPMENT ZONES
(a) The secretary may approve an application from a municipality for designation of a municipal site as a redevelopment zone. The application to participate in the redevelopment zone program shall include any restrictions or requirements on the type or size of businesses within the redevelopment zone, and any other information that the secretary requires to make a determination, accompanied by evidence from the municipality supporting the following:
(1) The site is or is part of an existing industrial center, an extension of an existing center, or an industrial facility or industrial property.
(2) The designation is consistent with the approved regional and municipal plans in accordance with section 2293 of Title 3 and is supported by the applicable regional development corporation and regional planning commissions.
(b) A redevelopment zone approved and designated by the secretary shall be in effect for ten years. A municipality may apply for an extension of this period for no more than an additional ten years.
(c) A municipality may restrict access to the redevelopment zone to businesses that have applied to the secretary for eligibility to enter the redevelopment zone.
§ 513. QUALIFYING BUSINESS
(a) Any business that intends to locate or expand into a redevelopment zone may qualify for the benefits offered under section 289 of this title, provided the secretary determines the business complies with all the following:
(1) It is in compliance with applicable local zoning and development criteria for locating in the redevelopment zone.
(2) It is in compliance with applicable federal, state, and local regulations.
(3) Within a year of approval, it will have employed at least ten new full‑time employees in positions that are not retail sales.
(4) Wages and benefits paid to all full-time employees meet or exceed the prevailing compensation level for that particular employment.
(5) If locating within a limited local market, it will not have an unfair competitive advantage over other Vermont businesses in the same or similar line of business and in the same limited local market as a result of the benefits available under this chapter.
(b) Any taxpayer that purchases and redevelops an industrial building in a redevelopment zone for sale or lease to a qualifying business may be eligible for the benefits in subsection 289(a) of this title directly related to the taxpayer’s business activities as a redeveloper, seller, or lessor within the redevelopment zone, provided the secretary determines that the taxpayer satisfies subdivisions (a)(1) and (2) of this section. Any benefits received by a redeveloper related to the redevelopment, sale, or lease of improved space to a qualifying business within a redevelopment zone shall not also be separately available to a qualifying business that purchases or leases all or part of the facility improved by the redeveloper.
§ 514. BENEFITS FOR BUSINESSES LOCATED IN REDEVELOPMENT
(a) A qualified business located in a redevelopment zone is eligible for the following benefits:
(1) A ten-year credit equal to the income tax that would otherwise be due under chapter 151 of Title 32, multiplied first by a fraction, the numerator of which is the total wages, salaries, and other personal service compensation paid during the taxable year to employees for services performed within the redevelopment zone, and the denominator of which is the total of those payments to employees within the state, and second by a fraction, the numerator of which is the average value of all real and tangible personal property within the redevelopment zone, and the denominator of which is the average value of such property within the state.
(2) A ten-year exemption from the sales tax imposed under 32 V.S.A. § 9771 and the use tax imposed under 32 V.S.A. § 9773 for the building materials, machinery, equipment, or trade fixtures purchased for use in the redevelopment zone.
(3) Consideration by the public service board of lower rates through economic development agreements for regulated utilities as allowable under 30 V.S.A. § 229.
(4) A ten-year exemption from the education tax imposed under 32 V.S.A. § 5402 on the incremental education tax on the equalized nonresidential value of the redeveloped property.
(5) Eligibility for the employment training program in section 531 of this title.
(6) A workers’ compensation insurance rating transfer, only for an out‑of‑state business that has at least three years of experience and is relocating from a state that participates in the Workers’ Compensation Statistical Plan as developed and overseen by the National Council on Compensation Insurance. Other businesses may apply to the National Council on Compensation Insurance for an experience rating at lower thresholds than may be available in Vermont.
(7) Expedited processing of applications for state permits and other state approvals, with all applications being decided, where legally permissible, within 30 days of the receipt of a completed application.
(8) Priority consideration by any state agency for eligibility for state or federal funding or other aid to industrial development based on a cost-benefit analysis.
(9) Priority consideration for financing programs available through the Vermont economic development authority in chapter 12 of this title.
(10) Technical support from the department of public safety for the rehabilitation of older and historic buildings, consistent with the department’s available resources.
(b) Benefits shall not be available for any of the following:
(1) Retail sales activities.
(2) Activities relating to the calculation of benefit amounts or eligibility.
(3) Relocating a business within Vermont to a redevelopment zone.
(c) Benefits under this section shall be available during the first tax year in which the qualified business has made expenditures in the designated redevelopment zone. A taxpayer claiming an income tax benefit under this section shall submit a copy of the employer’s application to the secretary and the secretary’s written determination along with the first return on which a benefit is claimed. Annually, beginning no later than 12 months after the secretary’s determination under section 288 of this title, a qualifying business shall submit a written report to the secretary verifying that the business continues to meet all requirements of subsection 288(a) of this title.
§ 515. TERMINATION OF BENEFITS
Benefits granted to a business in a redevelopment zone may be terminated by the secretary upon determination that the business no longer is in compliance with the requirements of section 288 of this title. A decision to terminate redevelopment benefits shall not be subject to chapter 25 of Title 3 and shall be final and not reviewable.
§ 516. RESPONSIBILITIES OF THE SECRETARY
The secretary shall:
(1) Act as the ombudsman between state agencies, businesses, and municipalities under this chapter.
(2) Maintain a list of all redevelopment zones and any local restrictions on each.
(3) Develop and maintain an effective marketing program to inform businesses outside Vermont of the benefits of locating in Vermont and, specifically, in redevelopment zones.
(4) Provide written notice to the municipality of the secretary’s decision to grant or deny a request for designation of a redevelopment zone. This determination shall be made within 45 days of receipt of a completed application from a municipality. The secretary shall state all the reasons for denying the request and the steps that must be taken to bring the municipality’s plan into conformance with the requirements of section 288 of this section.
(5) No later than 45 days after receipt of a completed application from a business under section 287 of this title, including any additional information requested by the secretary to make a determination, the secretary shall issue a written decision to the business, and, if denied, the reasons for the denial. A business denied eligibility may submit a new application at any time.
(6) The secretary shall notify all providers of telecommunications services holding certificates of public good in the state of the establishment of redevelopment zones and encourage their participation in planning for the provision of sufficient telecommunications infrastructure to serve businesses operating in those zones.
§ 517. PILOT PROJECT
(a) The secretary may designate two pilot redevelopment zones on or before December 31, 2005, and grant the benefits under this program to businesses that locate in the two pilot zones.
(b) The secretary, on or before January 15, 2007, and biennially thereafter, shall report to the general assembly on the progress of the two pilot redevelopment zones and the impact of this program on new economic development and the creation of new jobs.
Sec. 2. 24 V.S.A. § 4387(a) is amended to read:
(a) All plans, including all prior amendments, shall expire every five years unless they are readopted according to the procedures in section 4385 of this title except for that part of a plan creating a redevelopment zone under chapter 21A of Title 10, which shall expire at the end of the term of the redevelopment zone.
Sec. 3. 24 V.S.A. § 4414(13) is added to read:
(13) A redevelopment zone pursuant to chapter 21A of Title 10.
Sec. 4. 32 V.S.A. § 5404a(a) is amended to read:
(a) Tax agreements and exemptions affecting the education property tax grand list. A tax agreement or exemption shall affect the education property tax grand list of the municipality in which the property subject to the agreement is located if the agreement or exemption is:
* * *
(7) approval of a qualified business pursuant to chapter 21A of Title 10, provided the agreement provides for substantial creation of new jobs and economic activity.
Sec. 5. 32 V.S.A. § 9741(48) is added to read:
(48) Sales of building materials, machinery, equipment, or trade fixtures incorporated into a redevelopment zone designated pursuant to chapter 21A of Title 10.
Sec. 6. EFFECTIVE DATE
This act shall take effect on passage.
The Vermont General Assembly
115 State Street