HB2562 HFIN FBM 2-19 HOUSE COMMITTEE ON FINANCE
FLOOR BOOK MEMO
COM. SUB. FOR HOUSE BILL 2562 (SALES TAX INCREMENT FINANCING)
Sponsors: By Mr. Speaker, (Mr. Armstead) and Delegate Miley)
[By Request of the Executive]
Attorney: McO / Assistant:
Date: February 19, 2015
Title: OK
Fiscal Note: Yes
Code: §7-22-7a (amend)
Purpose: The committee substitute would add new provisions to the current statutes that govern sales tax increment financing districts (STIF District) that have been formed by county commissions. Under current law, a county commission’s application to the WV Development Office for its approval to form a STIF District must include the Tax Commissioner’s good faith estimate of the aggregate amount of consumers sales and service tax that was actually remitted to the Tax Commissioner by businesses in or expected to move into the proposed district “for the twelve full calendar months next preceding the date of the application.” This amount is designated as the “Base Tax Revenue Amount” for the district. During the life of the district, from sales and service taxes generated from business activity in the district, the amount of the Base Tax Revenue Amount will be deposited in the state’s General Revenue Fund and any excess revenues are dedicated to paying the cost of the development of the STIF District.
The bill would make several changes to current law:
1. The bill would require the Base Tax Revenue Amount for a STIF District to be recalculated by the Tax Commissioner if requested by its governing county commission before April 30, 2015, but in no event may the recalculation reduce the Base Tax Revenue Amount by more than $1 million. The recalculated Base Tax Revenue Amount will apply on and after July 1, 2015.
2. In any month in which the sales tax revenue collections from the STIFF District are less than the recalculated Base Tax Revenue Amount, the entire amount of the collections are to be deposited into the state General Revenue Account and the deficiency for the month are added to the amount to be deposited in the next ensuing month(s) until the deficiency is paid in full. However, if there are monthly deficiencies remaining at the end of a fiscal year, the deficiencies are discharged.
3. If bonds are issued to fund the cost of the STIF District’s development, then so long as the bonds are outstanding, the Tax Commissioner must provide on a monthly basis “information on or derived from special district excise tax returns” to the trustee for bonds issued for the district. The trustee may share the information so obtained with the county commission that established the economic opportunity development district that issued the bonds pursuant to this article and with the bondholders and with bond counsel for bonds issued pursuant to this article, as well as the county commission's legal counsel, financial advisor, placement agents and underwriters. The Tax Commissioner must also provide this information to the county commission, which may share that information with its legal counsel, financial advisor, placement agents and underwriters. All persons with whom this information is shared may not otherwise disclose it.
Committee Action: The bill was reported as a Committee Substitute that retains the provisions described above, only adding to the original bill’s language the provisions above that the county commission may share the tax information with its placement agents, and that the trustee for bonds may share the tax information with the county commission’s legal counsel, financial advisor, placement agents and underwriters.
Effective Date: Passage