Introduced by Representatives Evans of Essex, Keenan of St. Albans City, Perry of Richford, Atkins of Winooski, Barnard of Richmond, Bostic of St. Johnsbury, Botzow of Pownal, Branagan of Georgia, Cross of Winooski, Gervais of Enosburg, Haas of Rochester, Heath of Westford, Larson of Burlington, LaVoie of Swanton, Martin of Wolcott, McAllister of Highgate, Miller of Shaftsbury, Monti of Barre City, Parent of St. Albans City, Severance of Colchester, Shand of Weathersfield, Sweaney of Windsor and Trombley of Grand Isle
Subject: Economic development; tax incentive financing; expanded duration of indebtedness
Statement of purpose: This bill proposes to improve the time frames for the Tax Increment Financing Districts in order to make the statutes reflect financial and debt realities.
AN ACT RELATING TO IMPROVING THE PROVISIONS FOR TAX INCREMENT FINANCING DISTRICTS
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. 24 V.S.A. § 1891 is amended to read:
§ 1891. DEFINITIONS
When used in this subchapter:
shall include means a city, town, or incorporated village.
body” means the mayor and board of aldermen of a city, the city council, the
of selectmen selectboard of a town, and the president and trustees
of an incorporated village.
shall include its ordinary signification, such as installations, includes
the installation, new construction, or reconstruction of streets,
utilities, other infrastructure, including those for transportation, telecommunications,
wastewater treatment, and water supply, parks, playgrounds, land
acquisition and improvement, parking facilities, brownfields
remediation, and other public improvements necessary for carrying out the
objectives of this chapter.
Sec. 2. 24 V.S.A. § 1894 is amended to read:
§ 1894. POWER AND LIFE OF DISTRICT
municipality may incur indebtedness against revenues of the tax increment
financing districts for a period of
ten 20 years following the
creation of the district. The ten-year 20-year borrowing period
of the district shall commence at 12:01 a.m. on April 1 of the year so voted,
and shall end at midnight on March 31 ten 20 years thereafter. Any
indebtedness incurred during the ten-year 20-year period may be
retired over any period authorized by the legislative body of the municipality
under section 1898 of this title. The district shall continue until the date
and hour all such indebtedness is retired.
Sec. 3. 24 V.S.A. §1900 is amended to read:
§ 1900. DISTRIBUTION
addition to all other provisions of this chapter, with respect to any tax
increment financing district, any tax increment received
which in any
tax year that exceeds the amounts pledged for the payment on principal
and interest on the bonds issued for improvements in the district shall be
distributed to the state, city, town, or village budget and
school district budget, in proportion that each budget bears to the combined
total of both budgets unless otherwise negotiated by the state, city,
town, or village and school district.
Sec. 4. 32 V.S.A. § 5404a is amended to read:
§ 5404a. TAX STABILIZATION AGREEMENTS
* * *
municipality may apply to the Vermont economic progress council for an
allocation of the education grand list value for up to
ten 20 years,
of a portion 75 percent of the increase in the value and
liability assessed under section 5402 of this title on new economic development
that is subsequently approved by the Vermont economic progress council pursuant
to this section and subsections (c and (d) of section 5930a of this
title. Allocation to a municipality pursuant to this subsection shall be in
addition to any other payments to the municipality under chapter 133 of Title
16. If allocated, the allocated portion of the education fund liability
shall be used by the municipality to support economic development through
the purchase or financing of for infrastructure including, but
not limited to that includes wastewater treatment, water supply,
transportation, and telecommunications and utility connections that
support real property improvements and economic development.
which that have existing tax increment financing districts under
subchapter 5 of chapter 53 of Title 24 shall have the authority to expand those
districts and to collect all state and local property taxes on properties contained
wholly or partly within the tax increment financing district and apply those
revenues 75 percent of the increase in the value and liability assessed
under section 5402 of this title on new real property improvements to
repayment of debt issued to finance improvements within the tax increment
financing district to the extent and for related costs for up to 20
years, if approved for this purpose by the Vermont economic progress
council upon application by the district under procedures for approval of
tax stabilization agreements under this section, and that any such action shall
be included in the annual authorization limits provided in section 5930a(d)(1)
of this title pursuant to this section.
(g) A municipality that establishes a tax increment financing district under subchapter 5 of chapter 53 of Title 24 may collect all property taxes on properties contained wholly or partly within the tax increment financing district and apply 75 percent of the increase in the value and liability assessed under section 5402 of this title on the new real property improvements to repayment of debt issued to finance improvements within the district or related costs for up to 20 years, if approved by the Vermont economic progress council pursuant to this section or both.
(h) Any allocation approved pursuant to subsection (e) of this section or appropriation of tax increment approved under subsection (f) or (g) of this section is in addition to any other payments to the municipality under chapter 133 of Title 16. Allocations and tax increment appropriations approved pursuant to subsections (e), (f), and (g) of this section shall affect the property tax liability of the municipality under this chapter beginning April 1 of the year following approval. Allocations and tax increment appropriations authorized pursuant to subsections (e), (f), and (g) of this section shall remain available to the municipality for the full period authorized and shall be restricted only to the extent the real property improvements giving rise to the increased value to the grand list fail to occur within the authorized period. The Vermont economic progress council and the department of taxes shall report to the general assembly on the effect of the allocations and tax increment financing districts approved on the education property tax grand list of the municipality and of the state as part of the annual reporting requirement under section 5930a of this title. To approve utilization of incremental revenues pursuant to subsections (f) and (g) of this section, the council shall do all the following:
(1) Review each application and ascertain, to the best of its judgment, that the new real property improvements would not have occurred or would have occurred in a significantly different and significantly less desirable manner but for the proposed utilization of the incremental tax revenues.
(2) Evaluate whether each application meets all the following criteria:
(A) The municipality has held public hearings and established a tax increment financing district in accordance with 24 V.S.A. §§ 1891–1900.
(B) The municipality has developed a tax increment financing district plan including a project description, development financing plan, a pro forma projection of expected costs and revenues, a statement and demonstration that the project would not proceed without the allocation of tax increment, a development schedule including a list, cost estimate, and schedule for public improvements and projected private development to occur as a result of the improvements.
(C) The proposed infrastructure improvements and the projected development or redevelopment is compatible with approved municipal and regional development plans.
(D) The use of incremental education tax revenues for tax increment district purposes will not result in the net loss of preexisting tax revenues to the municipality, state, or other taxing jurisdictions.
(E) The development or redevelopment will accomplish one of the following:
(i) Reduce pressure for industrial, commercial, or residential development on open lands or ensure development or redevelopment of an area within a downtown, village center, or growth center.
(ii) Ensure the mitigation and redevelopment of a brownfield located within the district, which for the purposes of this section means the presence or potential presence of a hazardous substance, pollutant, or contaminant that may complicate the expansion, development, redevelopment, or reuse of the property.
(iii) Ensure the recruitment of an entirely new business or business operation or the expansion of an existing business within the district that will include the creation of new full-time jobs.
(iv) Ensure the development or redevelopment of an area equal to 25 percent of the total tax incentive financing district area that is determined to be blighted. For the purposes of this section, “blighted” means either of the following:
(I) An area in which the structures or buildings pose an actual or potential hazard to the public including condemned or unsafe buildings, sites, or structure, or structures or buildings that are conducive to ill health, the transmission of disease, infant mortality, juvenile delinquency, or crime and are therefore detrimental to the public health, safety, morals, or welfare.
(II) An area that substantially impairs or arrests the sound growth of the municipality, including provision of adequate housing, or that constitutes an economic or social liability and is a menace to the public health, safety, morals, or welfare as the result of substandard, unsafe, or deteriorating development.
(3) Evaluate whether the application meets at least two of the following criteria:
(A) The development or redevelopment will enhance employment opportunities within the municipality and the surrounding region.
(B) The development or redevelopment will preserve and enhance the tax base for the municipality and the state.
(C) The development or redevelopment will create or enhance public benefits such as:
(i) Access to open spaces.
(ii) Community facilities.
(iii) Rehabilitation of historic structures or buildings.
(iv) Reduction of traffic congestion.
(v) Improvements to or development of public transportation.
(vi) Development of high density housing that is affordable to the majority of the residents living within the district.
(D) The district encompasses an area that is economically distressed, which for the purposes of this subdivision means the area has experienced recent patterns of increasing unemployment, a drop in average wages, or a decline in real property values.
(E) The district encompasses an area that has been identified by the municipality as a priority for development or redevelopment.
Sec. 5. REPEAL
32 V.S.A. § 5401(10)(E) is repealed.
The Vermont General Assembly
115 State Street