Date Requested:February 07, 2011
Time Requested:05:23 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R2218 Introduced SB272
CBD Subject: WV TAX INCREMENT FINANCING ACT
FUND(S)
General Revenue Fund, local government funds
Sources of Revenue
General Fund,Other Fund local government funds
Legislation creates:
Neither Program nor Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

    The stated 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.
    
    According to our interpretation, this bill extends to Class III cities and Class IV towns or villages the potential to initiate a development or redevelopment project with a tax increment financing plan. The bill authorizes county commissions or municipal governing bodies to temporarily finance any project costs through the issuance of bonds, loans, debentures, notes, special certificates or other evidences of indebtedness or the expenditure of general fund of the county or municipality, provided that any temporary financing may be paid from tax increments or proceeds of any tax increment financing obligations. Additionally, the bill provides that the Development Office is to deliver to the Legislature twice each year a list of all applications that have not been approved, rejected or returned to the initiating governing body. Also, the bill provides that municipalities or county commissions, in regards to existing development or redevelopment districts, do not have to obtain the approval of the Development Office prior to amending a project plan if the amendment does not enlarge the district or increase the total amount of indebtedness contained in the tax increment financing portion of the project plan application.
    
    The State Tax Department does not possess the necessary information to determine how many new development or redevelopment projects with a tax increment financing plan may be initiated upon passage of this bill.
    
    There will be no increase in administrative costs to the State Tax Department attributable to passage of this bill. The Development Office and local governments may incur additional administrative costs associated with this bill.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2011
Increase/Decrease
(use"-")
2012
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0
3. Explanation of above estimates (including long-range effect):
    According to our interpretation, this bill extends to Class III cities and Class IV towns or villages the potential to initiate a development or redevelopment project with a tax increment financing plan. The bill authorizes county commissions or municipal governing bodies to temporarily finance any project costs through the issuance of bonds, loans, debentures, notes, special certificates or other evidences of indebtedness or the expenditure of general fund of the county or municipality, provided that any temporary financing may be paid from tax increments or proceeds of any tax increment financing obligations. Additionally, the bill provides that the Development Office is to deliver to the Legislature twice each year a list of all applications that have not been approved, rejected or returned to the initiating governing body. Also, the bill provides that municipalities or county commissions, in regards to existing development or redevelopment districts, do not have to obtain the approval of the Development Office prior to amending a project plan if the amendment does not enlarge the district or increase the total amount of indebtedness contained in the tax increment financing portion of the project plan application.
    
    The State Tax Department does not possess the necessary information to determine how many new development or redevelopment projects with a tax increment financing plan may be initiated upon passage of this bill.
    
    There will be no increase in administrative costs to the State Tax Department attributable to passage of this bill. The Development Office and local governments may incur additional administrative costs associated with this bill.


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov
    The stated 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.
    
    The bill’s stated purpose, as shown above, includes the statement “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.” It is not clear that the proposed changes in the bill actually allow the approval of projects if the Director of the Development Office does not take action on the applications for projects by a date certain.