BILL AS INTRODUCEDH.302
2001Page 1
H.302
Introduced by Representatives Endres of Milton, Mazur of South Burlington, Allaire of Rutland City, Audette of South Burlington, Crawford of Burke, Crowley of West Rutland, Dakin of Colchester, Donovan of Burlington, George of Middlebury, Kilmartin of Newport City, Marron of Stowe, Metzger of Milton, Milkey of Brattleboro, Morrissey of Bennington, Pembroke of Bennington, Pugh of South Burlington, Quaid of Williston, Randall of Bradford, Rosenquist of Georgia, Schaefer of Colchester, Schiavone of Shelburne, Severance of Colchester, Shaw of Derby, Stevens of Essex, Voyer of Morristown, Winters of Swanton and Wright of Burlington
Referred to Committee on
Date:
Subject:Municipal government; tax increment financing; preservation of green-spaces
Statement of purpose: This bill proposes to amend existing law relating to tax increment financing (TIF) districts in order to:
(1) define an allowable TIF district in terms of its relative size within a municipality rather than in terms of the life of the district in years;
(2) make the base value for a TIF district retroactive by one year to allow the first year of construction to serve as the basis for calculating debt retirement;
(3) allow improvements which serve a TIF district but are located outside it to be eligible for funding from TIF proceeds; and
(4) allow up to ten percent of the tax increment revenues of a TIF district to be used for the acquisition of land for preservation purposes.
AN ACT RELATING TO TAX INCREMENT FINANCING
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. 24 V.S.A. § 1892(c) is added to read:
(c) In any year no more than 25 percent of the total land area of a municipality may be included in a tax increment financing district.
Sec. 2. 24 V.S.A. § 1893 is amended to read:
§ 1893. PURPOSE
The purpose of tax increment financing districts shall be to provide revenues for improvements located wholly or partly withinserving a district, whether such improvements are within or outside the district which will encourage development, provide for employment opportunities, improve and broaden the tax base or enhance the general economy of the municipality, the region or the state.
Sec. 3. 24 V.S.A. § 1894 is amended to read:
§ 1894. POWER AND LIFE OF DISTRICT
A municipality may incur indebtedness against revenues of the tax increment financing districts for a period of ten years following the creation ofthe districtthe number of years established by the legislative body of the municipality at the time the district is created pursuant to section 1892 of this title. The ten 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 years thereafteron the date the district is created. Any indebtedness incurred during the tenyearthis 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. 4. 24 V.S.A. § 1895 is amended to read:
§ 1895. ORIGINAL TAXABLE VALUE
On or about 12:01 a.m., April 1, of the first year the lister or assessor for the municipality shall certify the assessed valuation of all taxable real property within the district as then most recently determined, which is referred to in this subchapter as the “original taxable value,” andThe assessed valuation of all real property within the district as certified by the listers or assessor on or about 12:01 a.m. of the first day of April immediately preceding the date of the creation of the district shall be the “original taxable value”, and the listers or assessor shall certify to the legislative body in each year thereafter during the life of the district the amount by which the original taxable value has increased or decreased, and the proportion which any such increase bears to the total assessed valuation of the real property for that year or the proportion which any such decrease bears to the original taxable value.
Sec. 5. 24 V.S.A. § 1897 is amended to read:
§ 1897. TAX INCREMENT FINANCING
The legislative body may pledge and appropriate any part or all of the tax increments received from properties contained wholly or partly within the tax increment financing district for the payment of the principal of and interest on bonds issued for improvements contained wholly or partly within the districtserving the district, whether such improvements are located within or outside the district. Such 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 the purpose.
Sec. 6. 24 V.S.A. § 1898(b) is amended to read:
(b) A municipality shall have power to issue general obligation and revenue bonds from time to time in its discretion to finance the undertaking of any improvements wholly or partly within such districtserving the district, whether such improvements are located within or outside the district. If revenue bonds are issued, such bonds shall be made payable, as to both principal and interest, solely from the income proceeds, revenues, tax increments and funds of the municipality derived from, or held in connection with its undertaking and carrying out of improvements under this chapter. So long as any such bonds of a municipality are outstanding the local governing body may deduct, in any one or more years from any net increase in the aggregate taxable valuation of land and improvements in all areas covered by their district the amount necessary to produce tax revenues equal to the current debt service on such bonds, assuming the previous year’s total tax rate and full collection. Only the balance, if any, of such net increase shall be taken into account in computing the sums which may be appropriated for other purposes under applicable tax rate limits. But all the taxable property in all areas covered by the district, including the whole of such net increase, shall be subject to the same total tax rate as other taxable property, except as may be otherwise provided by law. Such net increase shall be computed each year by subtracting, from the current aggregate valuation of the land and improvements in all areas covered by the district, the sum of the aggregate valuations of land and improvements in each such area on the date the district was approved under this section. An area shall be deemed to be covered as a district until the date all the indebtedness incurred by the municipality to finance the applicable improvements have been paid. Notwithstanding any provisions in this chapter to the contrary, any provision of a municipal charter of any municipality which specifies a different debt limit, or which requires a greater vote to authorize bonds, or which prescribes a different computation of appropriations under tax rate limits, or which is otherwise inconsistent with this subsection, shall apply.
Sec. 7. 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 tax increment received which in any tax year exceeds the amounts pledged for the payment on principal and interest on the bonds issued for improvements in the districtserving the district, whether such improvements are located within or outside the district, shall be distributed to the 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 city, town or village and school district.
Sec. 8. 24 V.S.A. § 1891(3) is amended to read:
(3) “Improvements” shall include its ordinary signification, such as installations, construction, or reconstruction of streets, utilities, parks, playgrounds, land acquisition, parking facilities and other public improvements necessary for carrying out the objectives of this chapter. In addition, “improvements” shall include acquisition of land for the purpose of land preservation within the district, provided that no more than ten percent of the tax increment revenues be used for land preservation purposes.