FISCAL NOTE
Date Requested: March 09, 2021
Time Requested: 10:57 AM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2959 |
Introduced |
HB2984 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
General Revenue Fund, local governments
Sources of Revenue:
General Fund local property tax revenue
Legislation creates:
Decreases Existing Revenue
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to amend the code as it relates to property tax increment financing districts and real property of public service businesses situated within such districts. The bill amends the definitions of base assessed value, current assessed value, and payment in lieu of taxes, and adds a definition for public service business. It also authorizes payment in lieu of tax agreements for property located within property tax increment financing districts. The bill authorizes a county commission or municipality to extend the length of existence of certain districts and extends the length of existence of certain districts from 30 to 40 years. It removes the requirement that a copy of the proposed project plan for tax increment financing be provided to other levying bodies with the power to levy taxes prior to any public hearing to consider the project. It clarifies the base assessed value and termination date when two or more tax increment financing districts have been combined and modifies language related to the discharge of any tax increment financing obligations outstanding on the termination date of a property tax district. It also eliminates certain limitations on the terms of property tax increment financing obligations issued to refund existing obligations. The bill requires the Auditor to apportion and certify the value of real property owned by a public service business within a development or redevelopment district to the county commission and municipality that created such district, and requires a sheriff to properly allocate taxes and levies apportioned by the Auditor.
The Tax Department cannot quantify the local or state tax revenue impact of this proposal. For tax increment financing districts that are extended, the local government entities in that county would be denied property taxes on the increment until after December 31, 2050.
Additional administrative costs to the State Tax Department would be minimal. Additional costs to local governments cannot be determined.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2021
Increase/Decrease
(use"-") |
2022
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 |
Explanation of above estimates (including long-range effect):
The Tax Department cannot quantify the local or state tax revenue impact of this proposal. For tax increment financing districts that are extended, the local government entities in that county would be denied property taxes on the increment until after December 31, 2050.
There are currently 42 separate property tax increment financing districts in West Virginia that would potentially qualify for extended lifespans up through 2050. Some of these districts began operating as far back as 2003. The proposed statutory extension language would permit some of the older districts to exist for a period well beyond the normal 30-year bond time limits. The provisions of the bill would also add a provision proclaiming that any unpaid bond debts or other obligations at the time of district expiration “shall be deemed to be discharged and satisfied, and no longer due and payable following such termination date..” Such a provision could have a chilling effect on the future ability to attract new debt capital for tax increment finance districts.
Additional administrative costs to the State Tax Department would be minimal. Additional costs to local governments cannot be determined.
Memorandum
The stated purpose of this bill is to amend the code as it relates to property tax increment financing districts and real property of public service businesses situated within such districts. The bill amends the definitions of base assessed value, current assessed value, and payment in lieu of taxes, and adds a definition for public service business. It also authorizes payment in lieu of tax agreements for property located within property tax increment financing districts. The bill authorizes a county commission or municipality to extend the length of existence of certain districts and extends the length of existence of certain districts from 30 to 40 years. It removes the requirement that a copy of the proposed project plan for tax increment financing be provided to other levying bodies with the power to levy taxes prior to any public hearing to consider the project. It clarifies the base assessed value and termination date when two or more tax increment financing districts have been combined and modifies language related to the discharge of any tax increment financing obligations outstanding on the termination date of a property tax district. It also eliminates certain limitations on the terms of property tax increment financing obligations issued to refund existing obligations. The bill requires the Auditor to apportion and certify the value of real property owned by a public service business within a development or redevelopment district to the county commission and municipality that created such district, and requires a sheriff to properly allocate taxes and levies apportioned by the Auditor.
W. Va. Code §7-11B-10(a) limits the existence of a development or redevelopment district to thirty years. The tax increment financing obligations may not exceed the district existence. The bill allows an extension until December 31, 2050 for those districts which have tax increment financing obligations issued prior to December 31, 2020. (§10(a)). The municipality or county commission must extend the time by amended ordinance or by entry of an order amending under §7 of the bill. This may create a constitutional problem, as Article X Section 8a of The Constitution of W. Va. limits the term for any bonds or other obligations to thirty years:
. . . The term for any bonds or other obligations issued may not exceed thirty tax years…
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov