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Introduced Version - Originating in Committee Senate Bill 783 History

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Senate Bill No. 783

(By Senators Helmick, Sharpe, Plymale, Chafin, Prezioso

Edgell, Love, Bailey, Bowman, McCabe, Unger, Sypolt,

Fanning, Facemyer, Boley, Sprouse and Guills)

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[Originating in the Committee on Finance;

reported February 22, 2008.]

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A BILL to amend and reenact §7-22-3, §7-22-5, §7-22-7 and §7-22-16 of the Code of West Virginia, 1931, as amended, all relating to modifying the County Economic Opportunity Development Act to promote development of municipal areas which are unusable without extraordinary expenditures.

Be it enacted by the Legislature of West Virginia:
That §7-22-3, §7-22-5, §7-22-7 and §7-22-16 of the Code of West Virginia, 1931, as amended, be amended and reenacted, all to read as follows:
ARTICLE 22. COUNTY ECONOMIC OPPORTUNITY DEVELOPMENT DISTRICTS.
§7-22-3. Definitions.
For purposes of this article, the term:
(1) "County commission" means the governing body of a county of this state;
(2) "Development expenditures" means payments for governmental functions, programs, activities, facility construction, improvements and other goods and services which a district board is authorized to perform or provide under section five of this article;
(3) "Remediation" means measures undertaken to bring about the reconditioning or restoration of property located within the boundaries of a county economic opportunity development district project that has been affected by exploration, industrial operations or solid waste disposal and which measures, when undertaken, will eliminate or ameliorate the existing state of such property and enable the property to be commercially developed.
(3) (4) "District" means an economic opportunity development district created pursuant to this article;
(4) (5) "District board" means a district board created pursuant to section ten of this article; and
(5) (6) "Eligible property" means any taxable or exempt real property located in a district established pursuant to this article.
§7-22-5. Development expenditures.
Any county commission that has established an economic opportunity development district under this article may make, or authorize to be made by a district board and other public or private parties, development expenditures as will promote the economic vitality of the district and the general welfare of the county, including, but not limited to, expenditures for the following purposes:
(1) Beautification of the district by means such as landscaping and construction and erection of fountains, shelters, benches, sculptures, signs, lighting, decorations and similar amenities;
(2) Provision of special or additional public services such as sanitation, security for persons and property and the construction and maintenance of public facilities, including, but not limited to, sidewalks, parking lots, parking garages and other public areas;
(3) Making payments for principal, interest, issuance costs, any of the costs described in section twenty of this article and appropriate reserves for bonds and other instruments and arrangements issued or entered into by the county commission for financing the expenditures of the district described in this section and to otherwise implement the purposes of this article;
(4) Providing financial support for public transportation and vehicle parking facilities open to the general public, whether physically situate within the district's boundaries or on adjacent land;
(5) Acquiring, building, demolishing, razing, constructing, repairing, reconstructing, refurbishing, renovating, rehabilitating, expanding, altering, otherwise developing, operating and maintaining real property generally, parking facilities, commercial structures and other capital improvements to real property, fixtures and tangible personal property, whether or not physically situate within the district's boundaries: Provided, That the expenditure directly benefits the district;
(6) Developing plans for the architectural design of the district and portions thereof and developing plans and programs for the future development of the district;
(7) Developing, promoting and supporting community events and activities open to the general public that benefit the district;
(8) Providing the administrative costs for a district management program;
(9) Providing for the usual and customary maintenance and upkeep of all improvements and amenities in the district as are commercially reasonable and necessary to sustain its economic viability on a permanent basis;
(10) Providing any other services that the county commission or district board is authorized to perform and which the county commission does not also perform to the same extent on a countywide basis;
(11) Making grants to the owners or tenants of economic opportunity development district for the purposes described in this section;
(12) Acquiring an interest in any entity or entities that own any portion of the real property situate in the district and contributing capital to any entity or entities;
(13) Remediation of publicly or privately owned landfills, solid waste facilities or hazardous waste sites to facilitate commercial development which would not otherwise be economically feasible; and
(13) (14) To do any and all things necessary, desirable or appropriate to carry out and accomplish the purposes of this article notwithstanding any provision of this code to the contrary.
§7-22-7. Application to development office for approval of an economic opportunity development district project.

(a) General. -- The development office shall receive and act on applications filed with it by county commissions pursuant to section six of this article. Each application must include:
(1) A true copy of the notice described in section six of this article;
(2) The total cost of the project;
(3) A reasonable estimate of the number of months needed to complete the project;
(4) A general description of the capital improvements, additional or extended services and other proposed development expenditures to be made in the district as part of the project;
(5) A description of the proposed method of financing the development expenditures, together with a description of the reserves to be established for financing ongoing development or redevelopment expenditures necessary to permanently maintain the optimum economic viability of the district following its inception: Provided, That the amounts of the reserves shall not exceed the amounts that would be required by ordinary commercial capital market considerations;
(6) A description of the sources and anticipated amounts of all financing, including, but not limited to, proceeds from the issuance of any bonds or other instruments, revenues from the special district excise tax and enhanced revenues from property taxes and fees;
(7) A description of the financial contribution of the county commission to the funding of development expenditures;
(8) Identification of any businesses that the county commission expects to relocate their business locations from the district to another place in the state in connection with the establishment of the district or from another place in this state to the district: Provided, That for purposes of this article, any entities shall be designated "relocated entities";
(9) Identification of any businesses currently conducting business in the proposed economic opportunity development district that the county commission expects to continue doing business there after the district is created;
(10) A good faith estimate of the aggregate amount of consumers sales and service tax that was actually remitted to the Tax Commissioner by all business locations identified as provided in subdivisions (8) and (9) of this subsection with respect to their sales made and services rendered from their then current business locations that will be relocated from, or to, or remain in the district, for the twelve full calendar months next preceding the date of the application: Provided, That for purposes of this article, the aggregate amount is designated as "the base tax revenue amount";
(11) A good faith estimate of the gross annual district tax revenue amount;
(12) The proposed application of any surplus from all funding sources to further the objectives of this article;
(13) The Tax Commissioner's certification of: (i) The amount of consumers sales and service taxes collected from businesses located in the economic opportunity district during the twelve calendar months preceding the calendar quarter during which the application will be submitted to the development office; (ii) the estimated amount of economic opportunity district excise tax that will be collected during the first twelve months after the month in which the Tax Commissioner would first begin to collect that tax; and (iii) the estimated amount of economic opportunity district excise tax that will be collected during the first thirty-six months after the month in which the Tax Commissioner would first begin to collect that tax: Provided, That for county economic opportunity development district projects involving remediation, the period shall be forty-eight months. The development office may not approve a project involving remediation authorized under section five of this article unless the county commission submits clear and convincing information, to the satisfaction of the development office, that the proposed remediation expenditures to be financed by the issuance of bonds or notes pursuant to section sixteen of this article does not constitute more than twenty-five percent of the total development expenditures associated with the project; and
(14) Any additional information the development office may require.
(b) Review of applications. -- The development office shall review all project proposals for conformance to statutory and regulatory requirements, the reasonableness of the project's budget and timetable for completion and the following criteria:
(1) The quality of the proposed project and how it addresses economic problems in the area in which the project will be located;
(2) The merits of the project determined by a cost-benefit analysis that incorporates all costs and benefits, both public and private;
(3) Whether the project is supported by significant private sector investment and substantial credible evidence that, but for the existence of sales tax increment financing, the project would not be feasible;
(4) Whether the economic opportunity district excise tax dollars will leverage or be the catalyst for the effective use of private, other local government, state or federal funding that is available;
(5) Whether there is substantial and credible evidence that the project is likely to be started and completed in a timely fashion;
(6) Whether the project will, directly or indirectly, improve the opportunities in the area where the project will be located for the successful establishment or expansion of other industrial or commercial businesses;
(7) Whether the project will, directly or indirectly, assist in the creation of additional long-term employment opportunities in the area and the quality of jobs created in all phases of the project, to include, but not be limited to, wages and benefits;
(8) Whether the project will fulfill a pressing need for the area, or part of the area, in which the economic opportunity district is located;
(9) Whether the county commission has a strategy for economic development in the county and whether the project is consistent with that strategy;
(10) Whether the project helps to diversify the local economy;
(11) Whether the project is consistent with the goals of this article;
(12) Whether the project is economically and fiscally sound using recognized business standards of finance and accounting; and
(13) The ability of the county commission and the project developer or project team to carry out the project: Provided, That no project may be approved by the development office unless the amount of all development expenditures proposed to be made in the first twenty-four months following the creation of the district results in capital investment of more than fifty million dollars in the district and the county submits clear and convincing information, to the satisfaction of the development office, that such investment will be made if the development office approves the project and the Legislature authorizes the county commission to levy an excise tax on sales of goods and services made within the economic opportunity district as provided in this article.
(c) Additional criteria. -- The development office may establish other criteria for consideration when approving the applications.
(d) Action on the application. -- The executive director of the development office shall act to approve or not approve any application within thirty days following the receipt of the application or the receipt of any additional information requested by the development office, whichever is the later.
(e) Certification of project. -- If the executive director of the development office approves a county's economic opportunity district project application, he or she shall issue to the county commission a written certificate evidencing the approval.
The certificate shall expressly state a base tax revenue amount, the gross annual district tax revenue amount and the estimated net annual district tax revenue amount which, for purposes of this article, is the difference between the gross annual district tax revenue amount and the base tax revenue amount, all of which the development office has determined with respect to the district's application based on any investigation it considers reasonable and necessary, including, but not limited to, any relevant information the development office requests from the Tax Commissioner and the Tax Commissioner provides to the development office: Provided, That in determining the net annual district tax revenue amount, the development office may not use a base tax revenue amount less than that amount certified by the Tax Commissioner but, in lieu of confirmation from the Tax Commissioner of the gross annual district tax revenue amount, the development office may use the estimate of the gross annual district tax revenue amount provided by the county commission pursuant to subsection (a) of this section.
(f) Certification of enlargement of geographic boundaries of previously certified district. -- If the executive director of the development office approves a county's economic opportunity district project application to expand the geographic boundaries of a previously certified district, he or she shall issue to the county commission a written certificate evidencing the approval.
The certificate shall expressly state a base tax revenue amount, the gross annual district tax revenue amount and the estimated net annual district tax revenue amount which, for purposes of this article, is the difference between the gross annual district tax revenue amount and the base tax revenue amount, all of which the development office has determined with respect to the district's application based on any investigation it considers reasonable and necessary, including, but not limited to, any relevant information the development office requests from the Tax Commissioner and the Tax Commissioner provides to the development office: Provided, That in determining the net annual district tax revenue amount, the development office may not use a base tax revenue amount less than that amount certified by the tax Commissioner but, in lieu of confirmation from the Tax Commissioner of the gross annual district tax revenue amount, the development office may use the estimate of the gross annual district tax revenue amount provided by the county commission pursuant to subsection (a) of this section.
(g) Promulgation of rules. -- The executive director of the development office may promulgate rules to implement the economic opportunity development district project application approval process and to describe the criteria and procedures it has established in connection therewith. These rules are not subject to the provisions of chapter twenty-nine-a of this code but shall be filed with the Secretary of State.
§7-22-16. Bonds issued to finance downtown redevelopment district projects.

(a) General. -- The county commission that established the economic opportunity development district may issue bonds or notes for the purpose of financing development expenditures, as described in section five of this article, with respect to one or more projects within the economic opportunity development district.
(b) Limited obligations. -- All bonds and notes issued by a county commission under the authority of this article are limited obligations of the county.
(c) Term of obligations. -- No county commission may issue notes, bonds or other instruments for funding district projects or improvements that exceed a repayment schedule of thirty years: Provided That the maximum repayment schedule of bonds issued to finance remediation authorized under section five of this article may not exceed twenty years.
(d) Debt service. -- The principal and interest on the bonds shall be payable out of the funds on deposit in the subaccount established for the economic opportunity development district pursuant to section eight of this article, including, without limitation, any funds derived from the special district excise tax imposed by section twelve of this article or other revenues derived from the economic opportunity development district to the extent pledged for the purpose by the county commission in the resolution authorizing the bonds.
(e) Surplus funds. -- To the extent that the average daily amount on deposit in the subaccount established for a district pursuant to section eight of this article exceeds, for more than six consecutive calendar months, the sum of: (1) One hundred thousand dollars; plus (2) the amount required to be kept on deposit pursuant to the documents authorizing, securing or otherwise relating to the bonds or notes issued under this section, then the excess shall be used by the district either to redeem the bonds or notes previously issued or remitted to the general fund of this state.
(f) Debt not general obligation of county. -- Neither the notes or bonds and any interest coupons issued under the authority of this article shall ever constitute an indebtedness of the county commission issuing the notes or bonds within the meaning of any constitutional provision or statutory limitation and shall never constitute or give rise to a pecuniary liability of the county commission issuing the notes or bonds.
(g) Debt not a charge general credit or taxing powers of county. -- Neither the bonds or notes, nor interest thereon, is a charge against the general credit or taxing powers of the county commission and that fact shall be plainly stated on the face of each bond or note.
(h) Issuance of bonds or notes. --
(1) Bonds or notes allowed under this section may be executed, issued and delivered at any time and from time to time, may be in a form and denomination, may be of a tenor, must be negotiable but may be registered as to the principal thereof or as to the principal and interest thereof, may be payable in any amounts and at any time or times, may be payable at any place or places, may bear interest at any rate or rates payable at any place or places and evidenced in any manner and may contain any provisions therein not inconsistent herewith, all as provided in the order or orders of the county commission whereunder the bonds or notes are authorized to be issued.
(2) The bonds may be sold by the county commission at public or private sale at, above or below par as the county commission authorizes.
(3) Bonds and notes issued pursuant to this article shall be signed by the president of the county commission, or other chief officer thereof, and attested by the county clerk and be under the seal of the county.
(4) Any coupons attached to the bonds shall bear the facsimile signature of the president of the commission or other chief officer thereof. In case any of the officials whose signatures appear on the bonds, notes or coupons cease to be officers before the delivery of the bonds or notes, their signatures shall, nevertheless, be valid and sufficient for all purposes to the same extent as if they had remained in office until the delivery.
(i) Additional bonds or notes. -- If the proceeds of the bonds or notes, by error of calculation or otherwise, are less than the cost of the economic opportunity development district project, or if additional real or personal property is to be added to the district project or if it is determined that financing is needed for additional development or redevelopment expenditures, additional bonds or notes may, in like manner, be issued to provide the amount of the deficiency or to defray the cost of acquiring or financing any additional real or personal property or development or redevelopment expenditures and, unless otherwise provided for in the trust agreement, mortgage or deed of trust, are considered to be of the same issue and shall be entitled to payment from the same fund, without preference or priority, and shall be of equal priority as to any security.
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