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SENATE PROPOSAL OF AMENDMENT 2007-2008

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H.521

 

An act relating to miscellaneous substantive tax amendments

The Senate proposes to the House to amend the bill as follows:

First:  By adding a Sec. 10 to read:

Sec. 10.  32 V.S.A. § 3481(1) is amended to read:

(1)  “Appraisal value” shall mean, with respect to property enrolled in a use value appraisal program, the use value appraisal as defined in subdivision 3752(12) of this title, multiplied by the common level of appraisal, and with respect to all other property, the estimated fair market value.  The estimated fair market value of a property is the price which the property will bring in the market when offered for sale and purchased by another, taking into consideration all the elements of the availability of the property, its use both potential and prospective, any functional deficiencies, and all other elements such as age and condition which combine to give property a market value. Those elements shall include a consideration of a decrease in value in non‑rental residential property due to a housing subsidy covenant as defined in section 610 of Title 27, or the effect of any state or local law or regulation affecting the use of land, including but not limited to chapter 151 of Title 10 or any land capability plan established in furtherance or implementation thereof, rules adopted by the state board of health and any local or regional zoning ordinances or development plans.  In determining estimated fair market value, the sale price of the property in question is one element to consider, but is not solely determinative.

For residential rental property that is subject to a housing subsidy covenant or other legal restriction, imposed by a governmental, quasi‑governmental, or public purpose entity, on rents that may be charged, fair market value shall be determined by an income approach using the following elements:

(A)  market rents with utility allowance adjustments for the geographic area in which the property is located as determined by the federal office of Housing and Urban Development or in the case of properties authorized under 42 U.S.C. § 1437, 12 U.S.C. § 1701q, 42 U.S.C. § 1485, 12 U.S.C. § 1715z‑1, 42 U.S.C. § 1437f, and 24 CFR Part 882 Subpart D and E, the higher of contract rents (meaning the amount of federal rental assistance plus any tenant contribution) and HUD market rents;

(B)  actual expenses incurred with respect to the property as which shall be provided by the property owner in a format acceptable to the commissioner and certified by an independent third party, such as a certified public accounting firm or public or quasi‑public funding agency;

(C)  a vacancy rate that is 50 percent of the market vacancy rate as determined by the United States Census Bureau with local review by the Vermont housing finance agency; and

(D)  a capitalization rate that is typical for the geographic area determined and published annually prior to April 1 by the division of property valuation and review after consultation with the Vermont housing finance agency.

Second:  By adding a Sec. 11 to read:

Sec. 11.  EXTENSION OF GRANDFATHERED EDUCATION PROPERTY
   TAX EXEMPTIONS FROM 1997

      Property tax exemptions authorized before July 1, 1997, under a municipal tax stabilization agreement, charter provision or vote of a municipality, still in effect on June 30, 2007, and qualified as exemptions affecting the education property tax grand list under 32 V.S.A. § 5404a(a), shall continue to affect the education property tax grand list under that section through June 30, 2008.

Third:  By adding Secs. 12 through 22 to read:

Sec. 12.  32 V.S.A. § 5404a(b) is amended to read:

(b)  An agreement affecting the education property tax grand list defined under subsection (a) of this section shall reduce the municipality’s education property tax liability under this chapter for the duration of the agreement or exemption without extension or renewal, and for a maximum of ten years, subject to the provisions of subsection 5930b(f) of this title.  A municipality’s property tax liability under this chapter shall be reduced by any difference between the amount of the education property taxes collected on the subject property and the amount of education property taxes that would have been collected on such property if its fair market value were taxed at the equalized nonresidential rate for the tax year.

Sec. 13.  32 V.S.A. § 5404a(e) is amended to read:

(e)  Allocations.  A municipality on behalf of a person may apply to the Vermont economic progress council for an allocation of the education grand list value for up to ten years, of a portion 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 5930a(c) and (d) of this title. The allocation may be awarded for up to ten years, subject to the provisions of subsection § 5930b(f) 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 for infrastructure that includes wastewater treatment, water supply, transportation, and telecommunications and utility connections.

Sec. 14.  32 V.S.A. § 5930a(b) is amended to read:

(b)  The Vermont economic progress council, within 60 days of receipt of a complete application, shall approve or deny the following economic incentives:

(1)  tax stabilization agreements and exemptions under subdivision 5404a(a)(2) of this title;

(2)  applications for allocation to municipalities of a portion of education grand list value and municipal liability from new economic development under subsection 5404a(e) of this title; and

(3)  the Vermont employment growth incentives (VEGI) under section 5930b of this title.

(4)  the tax increment financing (TIF) district program as established in section 5404a of this title.

All incentives are subject to application of the incentive ratio as determined under section 5930b(b)(3) of this title and no tax stabilization agreement, exemption or allocation shall be approved except in conjunction with the approval of an incentive under subdivision (3) of this subsection.

Sec. 15.  32 V.S.A. § 5930a(d) is amended to read:

(d)  The council shall apply the cost‑benefit model in reviewing applications under subdivisions (b)(1), (2), and (3) of this section to determine the net fiscal benefit to the state.  The cost‑benefit model shall be a uniform and comprehensive methodology for assessing and measuring the projected net fiscal benefit or cost to the state of proposed economic development activities over the five‑year award period.  Any modification of the cost‑benefit model shall be subject to the approval of the joint fiscal committee.  The cost‑benefit analysis shall include consideration of the effect of the passage of time and inflation on the value of multi‑year fiscal benefits and costs.

(1)  In determining the projected net fiscal benefit or cost of the incentives considered under subdivisions (b)(1) and (2) of this section, the council shall calculate the net present value of the enhanced or forgone statewide education tax revenues, reflecting both direct and indirect economic activity.  If the council approves an incentive pursuant to this section, the net fiscal costs, if any, to the state shall be counted as if all those costs occurred in the year in which the council first approved the incentive and that cost shall reduce the amount of the annual authorization for such approvals established by the legislature for the applicable calendar year.

(2)  In determining the projected net fiscal benefit or cost of the incentives considered under subdivision (b)(3) of this section, the council shall calculate the net present value of the enhanced or forgone state tax revenues attributable to the incentives, reflecting both direct and indirect economic activity over the five‑year award period.  If the council approves an incentive, the net fiscal costs, if any, to the state shall be counted as if all of those costs occurred in the year in which the council first approved the incentive and that cost shall reduce the amount of the council’s annual authorization for approval of economic incentives as established by the legislature for the applicable calendar year.

Sec. 16.  REPEAL

32 V.S.A. § 5930b(a)(12) (definition of “incremental payroll”) is repealed.

Sec. 17.  32 V.S.A. § 5930b(a)(16) is amended to read:

(16)  “Payroll target” means the projected qualifying payroll Vermont gross wages and salaries for qualifying jobs in an award period year as reported on the Vermont employment growth incentive application.

Sec. 18.  32 V.S.A. § 5930b(a)(17) is amended to read:

(17)  “Payroll threshold” means base payroll or application base payroll (if year 1), plus expected average industry payroll growth as determined by the cost‑benefit model.

Sec. 19.  32 V.S.A. § 5930b(a)(21) is amended to read:

(21)  “Qualifying payroll” means actual annualized Vermont gross wages and salaries paid for qualifying jobs created in or carried forward to a utilization period the award period year, provided incremental payroll in that year equals or exceeds such gross wages that:

(A)  award period year base payroll; minus

(B)  Vermont gross wages and salaries paid for new qualifying jobs created in or carried forward to the award period year; equals or exceeds

(C)  prior‑year base payroll minus any carry‑forward of qualifying payroll under subdivision (c)(4) of this section, plus award‑year payroll threshold.

Sec. 20. 32 V.S.A. § 5930b(c) is amended to read:

(c)  Claiming an employment growth incentive.

(1)  A business whose application is approved and, in any year during the award period, meets or exceeds its payroll target and either its jobs or capital investment target may file an annual return claiming incentives pursuant to this section.  Upon approval by the department of taxes, incentive payments will be issued by the department of taxes calculated for each of the five award period years in equal annual installments.  The department of taxes will disburse the incentives over consecutive five‑year periods, beginning with each award period year, provided that the incentive‑triggering award period year payroll and job targets are maintained in each utilization period year for which an installment is claimed.

(2)  Incentives shall be calculated and disbursed as follows:  Qualifying payroll for the utilization award period year, not to exceed the payroll target or targets reduced by the payroll threshold for the incentive‑triggering award period year or years shall be multiplied by the incentive percentage.   Up to one‑fifth of the total incentive amount shall be disbursed in the first of five consecutive utilization period years, to the extent the full amount of qualifying payroll was actually paid in that year.  A full one‑fifth of the total incentive amount shall be disbursed in each of the remaining four consecutive utilization period years, provided that incentive‑triggering targets are maintained.

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(4)  Qualifying jobs, qualifying capital investment, and qualifying payroll in excess of the jobs, capital investment, and payroll targets for an award year shall be carried forward and counted toward future award period year targets, provided such excess jobs, investment and payroll are maintained.

(5)  A business whose application is approved and, in the first award period year, fails to meet or exceed its payroll target and one out of two of its jobs and capital investment targets shall forfeit all authority to earn and claim incentives under this section.  The department of taxes shall notify the Vermont economic progress council that the first year award period targets have not been met, and the council shall rescind the incentive authorization in its entirety. A business whose incentive authorization is rescinded for failure to meet first‑year award period targets may reapply to the Vermont economic progress council for a new authorization pursuant to this section.

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Sec. 21. 32 V.S.A. § 5930b(f) is added to read:

(f)  The property of a business whose authority to earn, apply or retain incentives under this section has been revoked is ineligible for property tax stabilization under subdivision 5404a(a)(2) of this title or allocation of property tax value under subsection 5404a(e) of this title for any education property tax grand list after the date of revocation.

Sec. 22.  EFFECTIVE DATE

Secs. 11 through 21 (Vermont Employment Growth Incentive technical amendments conforming to Act 184) of this act shall apply to claims filed in 2007 and after.

Fourth:  By adding a Sec. 23 to read:

Sec. 23.  32 V.S.A. § 5930ee is amended to read:

§ 5930ee.  LIMITATIONS

Beginning in fiscal year 2007 2008 and thereafter, the state board may award tax credits to all qualified applicants under this subchapter, provided that:

(1)  The total amount of tax credits awarded annually, together with sales tax reallocated under section 9819 of this title, does not exceed $1,500,000.00  $1,600,000.00.

* * *

Fifth:  By adding Secs. 24 and 25 to read:

Sec. 24.  32 V.S.A. § 6066a(g) is added to read:

(g)  Upon transfer of a residence, the parties’ proration of current‑year taxes shall be based upon the adjusted property tax, unless the parties otherwise agree.  No reimbursement by the transferee to the transferor for any property tax adjustment in the property tax year following the transfer shall be required unless the parties otherwise agree.

Sec. 25.  REPEAL

     32 V.S.A. § 6066(f) (proration of taxes shall be based upon the unadjusted property tax) is repealed as of January 1, 2007.

Sixth:  By striking Sec. 7 and inserting a new Sec. 7 to read:

Sec. 7.  32 V.S.A. § 9741(29) is amended to read:

(29)  Aircraft, including depreciable parts, machinery and equipment to be installed as a capital asset in such aircraft, sold to a person which holds itself out to the general public as engaging in air commerce, for use primarily in the carriage of persons or property for compensation or hire; and parts, machinery, and equipment to be installed in an aircraft.

Seventh:  By adding a Sec. 26 to read:

Sec. 26.  32 V.S.A. § 10002(o) is added to read:

      (o)  Also excluded from the definition of land is the land sold to an organization that qualifies under Section 501(c)(3) of the Internal Revenue Code and also meets the “public support” test of Section 509(a)(2) of the Code, if one of the stated purposes of the organization is to provide affordable housing and if the land is sold by the organization within 12 months of the transfer to the organization to a buyer in a transfer which meets all the requirements of subsection (b) of this section. 

(1)  If the organization fails to transfer the land within 12 months, or transfers it within 12 months but not to a buyer for occupancy as the buyer’s principal residence, then the organization shall become liable for the land gains tax due on the original transfer of the land to the organization and for the land gains tax on the transfer by the organization; and

(2)  If the organization transfers the land within 12 months, but at the time of the transfer by the organization there is no dwelling on the land completed and fit for occupancy, and the buyer fails to complete and occupy a principal residence on the land within two years of purchase from the organization, then the organization shall become liable for the land gains tax due on the original transfer of the land to the organization, and the buyer who purchased the land from the organization shall become liable for the land gains tax due on the transfer from the organization to the buyer.

Eighth:  By adding Secs. 27 and 28 to read:

Sec. 27.  24 V.S.A. § 138(a) and (d) are amended to read:

(a)  Local option taxes are authorized under this section for the purpose of affording municipalities an alternative method of raising municipal revenues to facilitate the transition and reduce the dislocations in those municipalities that may be caused by reforms to the method of financing public education under the Equal Educational Opportunity Act of 1997.  Accordingly:

(1)  the local option taxes authorized under this section may be imposed by a municipality; and

(2)  if a municipality opting opts to impose a local option tax may do so prior to July 1, 1998 to be effective beginning January 1, 1999, and anytime after December 1, 1998 a, the local option tax shall be effective beginning on the next tax quarter following 90 days’ notice to the department of taxes of the imposition; and

(3)  a local option tax may only be adopted by a municipality in which:

(A)  the education property tax rate in 1997 was less than $1.10 per $100.00 of equalized education property value; or

(B)  the equalized grand list value of personal property, business machinery, inventory, and equipment is at least ten percent of the equalized education grand list as reported in the 1998 Annual Report of the Division of Property Valuation and Review; or

(C)  the combined education tax rate of the municipality will increase by 20 percent or more in fiscal year 1999 or in fiscal year 2000 over the rate of the combined education property tax in the previous fiscal year.

(d)  Of the taxes Taxes collected under this section, shall be paid as follows:

(1)  70 percent of the taxes shall be paid on a quarterly basis to the municipality in which they were collected, after reduction for the costs of administration and collection under subsection (c) of this section.  Revenues received by a municipality may be expended for municipal services only, and not for education expenditures.  Any remaining revenue shall be deposited into the PILOT special fund established by 32 V.S.A. § 3709.

(2)  The first $2.5 million of any remaining revenue shall be deposited into the PILOT special fund established by 32 V.S.A. § 3709.

(3)  Any then‑remaining revenue shall be deposited 50 percent into the PILOT special fund established by 32 V.S.A. § 3709; and 50 percent shall go to the agency of transportation for state aid to town highways, which amount shall be in addition to the appropriations required by 19 V.S.A. § 306, and which shall be distributed to towns in accordance with 19 V.S.A. § 306(a).

Sec. 28.  EFFECTIVE DATE

Sec. 27 of this act (local option tax authority expanded to all towns) shall take effect upon passage, except the amendments to 24 V.S.A. § 138(d) shall apply to local option revenue payments beginning with the first quarterly payment in calendar year 2008.

Ninth:   By adding Secs. 29 through 38 to read:

Sec. 29.  24 V.S.A. § 1891 is amended to read:

§ 1891.  DEFINITIONS

When used in this subchapter:

* * *

(6)  “Related costs” means expenses, exclusive of the actual cost of constructing and financing improvements, as defined in subdivision 1751(3) of this title, that are directly related to creation of the tax increment financing district and reimbursement of sums previously advanced by the municipality for those purposes, and attaining necessary to attain the purposes and goals for which the tax increment financing district was created, as approved by the Vermont economic progress council.  As used in this subdivision, related costs are “improvements” as defined in subdivision 1751(3) of this title.

(7)  “Financing” means any type of indebtedness incurred or financial vehicles used by a municipality to pay for improvements in a tax increment financing district.

Sec. 30.  24 V.S.A. § 1893 is amended to read:

§ 1893.  PURPOSE

The purpose of tax increment financing districts is to provide revenues for improvements, located wholly or partly within that serve the district and related costs, which will stimulate development or redevelopment within the district, provide for employment opportunities, improve and broaden the tax base, or and enhance the general economic vitality of the municipality, the region, or and the state.

Sec. 31.  24 V.S.A. § 1894 is amended to read:

§ 1894.  POWER AND LIFE OF DISTRICT

(a)  The municipality may incur indebtedness against revenues of the tax increment financing districts for a period of up to 20 years following the creation of the district.  The 20‑year borrowing period of the district shall commence at 12:01 a.m. on April 1 of the year so voted.  Any indebtedness incurred during the borrowing 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 the indebtedness is retired.

(b)  Notwithstanding subsection (a) of this section, any district created to use education tax increment financing  A municipality that has created a tax increment financing district approved under 32 V.S.A. § 5404a(f) may:

(1)  Incur indebtedness for improvements for the district for a period of up to 20 years, provided that the first indebtedness is incurred within five years following approval of the district pursuant to 32 V.S.A. § 5404a(f), and such that the 20 years for incurring indebtedness begins at the time of initial indebtedness.  Prior to requesting municipal approval to secure financing, the municipality shall provide the council with the proposed financing for approval to assure its consistency with the plan approved pursuant to 32 V.S.A. § 5404a(h).  The council shall also assure the viability and reasonableness of any proposed financing other than bonding and least‑cost financing.  A municipality that has not incurred indebtedness within five years following the creation of the district, shall request reapproval from the Vermont economic progress council in order to utilize education tax increment financing following that period.

(2)  The education tax increment may be retained for a 20‑year period,  provided that the 20‑year period commences within five years following approval of the district pursuant to 32 V.S.A. § 5404a(f).  The retention period shall commence at 12:01 a.m. April 1 of the year following the municipality’s notice to the tax department and the Vermont economic progress council.  If a municipality fails to incur debt within the five‑year period but retains the education tax increment, the municipality shall repay the increment in accordance with section 1900 of this title.

Sec. 32.  24 V.S.A. § 1896 is amended to read:

§ 1896.  TAX INCREMENTS

(a)  In each subsequent year, the listers or assessor shall include no more than the original taxable value of such the real property in the assessed valuation upon which the listers or assessor computes the rates of all taxes levied by the municipality, the school district, and every other taxing district in which the tax increment financing district is situated; but the listers or assessor shall extend all rates so determined against the entire assessed valuation of such real property for that year.  In each year for which the assessed valuation exceeds the original taxable value, the municipality treasurer shall hold apart, rather than remit to the taxing districts, that proportion of all taxes paid that year on the real property in the district which such the excess valuation bears to the total assessed valuation.  The amount so held apart each year is referred to in this act as the “tax increment” for that year.  So much of the tax increments received with respect to the district and pledged and appropriated under section 1897 of this title for the payment of debt service on bonds issued for financing for improvements and related costs shall be segregated by the municipality in a special account on its official books and records until all capital indebtedness of the district has been fully paid.  The final payment shall be reported to the lister or assessor, who shall thereafter include the entire assessed valuation of the district in the assessed valuations upon which tax rates are computed and extended and taxes are remitted to all taxing districts.

(b)  Adjustment upon reappraisal.  In the event of a reappraisal of 20 percent or more of all parcels in the municipality, the value of the original taxable property in the district shall be changed by a multiplier, the denominator of which is the municipality’s education property tax grand list for the property within the district in the year prior to the reappraisal or partial reappraisal and the numerator of which shall be the municipality’s reappraised or partially reappraised education property tax grand list for the property within the districtIn such a district, the The state education property tax revenues for the district in the first year following a townwide reappraisal or partial town‑wide reappraisal shall not be less than the dollar amount of the state education property tax revenues  in the prior year.

Sec. 33.  24 V.S.A. § 1897 is amended to read:

§ 1897.  TAX INCREMENT FINANCING

(a)  The legislative body may pledge and appropriate any part or all of the tax increments received from properties contained within the tax increment financing district for the payment of the principal of and interest on bonds issued for financing of improvements contained wholly or partly within the district and for related costs in the same proportion by which the infrastructure or related costs directly serve the district at the time of approval of the project financing by the council, and in the case of infrastructure essential to the development of the district that does not reasonably lend itself to a proportionality formula, the council shall apply a rough proportionality and rational nexus test; provided, that if any tax increment utilization is approved pursuant to 32 V.S.A. § 5404a(g) 32 V.S.A. § 5404a(f), no more than 75 percent of the state property tax increment and no less than 75 percent of the municipal tax increment may be used to service this debt.  Bonds shall only be issued if the legal voters of the municipality, by a majority vote of all voters present and voting on the question at a special or annual municipal meeting duly warned for the purpose, shall give authority to the legislative body to pledge the credit of the municipality for these purposes.  Except as otherwise provided by the municipal charter, the legal voters of a municipality, by a single vote, shall authorize the legislative body to pledge the credit of the municipality up to a specified maximum dollar amount for all debt obligations to be financed with state property tax increment pursuant to approval by the Vermont economic progress council and subject to the provisions of this section and 32 V.S.A. § 5404a.

(b)  A municipality’s pledge of credit for the purpose of issuing a bond financing improvements under this subchapter and 32 V.S.A. § 5404a shall include notice that if the tax increment received by the municipality from any property tax source is insufficient to pay the principal and interest on the debt in any year, for whatever reason, including a decrease in property value or repeal of a state property tax source, unless determined otherwise at the time of such repeal, the municipality shall remain liable for full payment of the bond principal and interest for the term of indebtedness. 

Sec. 34.  24 V.S.A. § 1898(e) is amended to read:

(e)  Prior to the resolution or ordinance of the local governing body authorizing the bonds issued financing under this section, the legislative body of the municipality shall hold one or more public hearings, after public notice, on a financial plan for the proposed improvements and related costs to be funded, including a statement of costs and sources of revenue, the estimates of assessed values within the district, the portion of those assessed values to be applied to the proposed improvements, the resulting tax increments in each year of the financial plan, the amount of bonded indebtedness or other financing to be incurred, other sources of financing and anticipated revenues, and the duration of the financial plan.  A municipality that has approved the creation of a district under this chapter may designate a coordinating agency to administer the district to ensure compliance with this chapter and any other statutory or other requirements.

Sec. 35.  24 V.S.A. § 1900 is amended to read:

§ 1900.  DISTRIBUTION

In addition to all other provisions of this chapter, with respect to any tax increment financing district, any municipal tax increment received in any tax year that exceeds the amounts pledged for the payment on principal and interest on the bonds issued any financing for improvements and related costs in the district shall be used to prepay financing, placed in escrow for payment of financing, or distributed to the state education fund, the city, town, or village budget in proportion that each budget bears to the combined total of the budgets unless otherwise negotiated by the city, town, or village.  Any state education tax increment received in any tax year that exceeds the amount pledged for the payment on principal and interest on the bonds issued for improvements and related costs in the district shall not be remitted to the municipality but shall be used only for prepayment of principal and interest on the bonds issued, placed in escrow for bond payment, or otherwise used for defeasance of the bonds.

Sec. 36.  32 V.S.A. § 5404a(f), (g), and (h) are amended and (j) and (k) are added to read:

(f)  A municipality that establishes a tax increment financing district under subchapter 5 of chapter 53 of Title 24 shall collect all property taxes on properties contained within the district and apply up to 75 percent of the tax increment as defined in 24 V.S.A. § 1896 to repayment of debt issued to finance financing of the improvements and related costs for up to 20 years pursuant to 24 V.S.A. § 1894, if approved by the Vermont economic progress council pursuant to this section.

(g)  Any allocation approved pursuant to subsection (e) of this section or utilization of tax increment approved under subsection (f) of this section shall be in addition to any other payments to the municipality under chapter 133 of Title 16.  Allocations Except as otherwise provided in this section or chapter 53 of Title 24, allocations and tax increment utilizations approved pursuant to subsections (e) and (f) of this section shall affect the education property tax grand list and the municipal grand list of the municipality under this chapter beginning April 1 of the year following approval and shall remain available to the municipality for the full period authorized and restricted only to the extent that the real property development giving rise to the increased value to the grand list fails to occur within the authorized period.

(h)  Criteria for approval.  To approve utilization of incremental revenues pursuant to subsection (f) of this section, the Vermont economic progress council shall do all the following:

(1)  Review each application to determine that the new real property development would not have occurred or would have occurred in a significantly different and less desirable manner but for the proposed utilization of the incremental tax revenues.  A district created in a designated growth center under 24 V.S.A. § 2793c shall be deemed to have complied with this subdivision.  The review shall take into account:

* * *

(C)  The amount of additional revenue expected to be generated as a result of the proposed development; the percentage of that revenue that shall be paid to the education fund; the percentage that shall be paid to the municipality; and the percentage of the revenue paid to the municipality that shall be used to pay the municipal tax increment bonds financing incurred for development of the tax increment financing district.

(2)  Process requirements.  Determine that each application meets all of the following four requirements:

* * *

(B)  The municipality has developed a tax increment financing district plan, including: a project description; a development financing plan; a pro forma projection of expected costs and a list of previously advanced related costs to be reimbursed; a projection of revenues; a statement and demonstration that the project would not proceed without the allocation of a tax increment; a projection of types and amount of expected financing; evidence that the municipality is actively seeking or has obtained other sources of funding and investment; and a development schedule that includes a list, a cost estimate, and a schedule for public improvements and projected private development to occur as a result of the improvements.

* * *

(4)  Project criteria.  Determine that the proposed development within a tax incentive increment financing district will accomplish at least three of the following five criteria:

* * *

(C)  The project will affect the mitigation remediation and redevelopment of a brownfield located within the district.  For the purposes of this section, “brownfield” means an area in which a hazardous substance, pollutant, or contaminant is or may be present, and that situation is likely to complicate the expansion, development, redevelopment, or reuse of the property.

* * *

(j)  A municipality with an active tax increment financing district shall:

(1)  Provide VEPC and the tax department with all information required for VEPC and the tax department to issue the report required by subsection (i) of this section on or before December 1 each year.

(2)  Report actual investment, financing activity, escrow status, and “related costs” accounting to VEPC according to the current law municipal audit cycle in 24 V.S.A. § 1681.

(k)  The state auditor of accounts shall review and audit all active tax increment financing districts every three years.

Sec. 37.  Sec. 2i of No. 184 of the Acts of the 2005 Adj. Sess. (2006) is amended to read:

Sec. 2i.  TAX INCREMENT FINANCING DISTRICTS; CAP

Notwithstanding any other provision of law, the Vermont economic progress council may not approve the use of education tax increment financing for more than ten tax increment financing districts and no more than one newly created tax increment financing district in any municipality within the period of five state fiscal years beginning July 1, 2006 2007.  Thereafter no tax increment financing districts may be approved without further authorization by the General Assembly general assembly.


Sec. 38.  EFFECTIVE DATES

Secs. 29 through 37 of this act (tax increment financing amendments) shall take effect on July 1, 2007, except 24 V.S.A. § 1896(b) which shall be retroactively effective to July 1, 2006.

Tenth:  In Sec. 9, after the words “This act shall take effect upon passage except”, by inserting “as provided in Secs. 22, 28, and 38 and subdivisions (1) and (2) of this section”



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us