Oppose: HB 443, sponsored by Representative Cook of Conrad - This bill would limit the term of bond financing in a TIF district to the 15th anniversary of its creation. It has a number of other provisions including the ability to spend remaining TIF funds on "new projects" when the district terminates rather than returning the funds to the affected taxing jurisdictions. This bill is very troubling in that by limiting the term of a bond issue, it effectively eliminates the use of bonds in TIF districts, particularly for smaller communities. Many times districts don't even "take off" for several years after their creation and are only able to bond in their 10th or later year of existence. There are currently at least TIF six districts being formed in the state as communities struggle to pay for critical infrastructure to support economic development, as federal grant dollars become more scarce. We can not afford to lose or limit one of the most effective programs that our state has in its "tool box" of economic development strategies! -Janet Cornish
Missoula County created its first industrial TIF in 1991 on approximately 1900 acres of land that included the Missoula Airport and 446 acres of vacant land that has become the Missoula County Development Park. We are proud to say that the Development Park now supports well over 1,500 jobs and the taxable value has grown from $176,605 in 1991 (0.15% of total county tax base) to $2,501,373 in 2012 (1.2% of county tax base). We are confident that this development would not have occurred without tax increment financing.
This TIFID will sunset in 2018, 27 years after its initial creation. The sunset of this TIF was extended once to accommodate a second bond issue which will ultimately enable the district to complete its primary infrastructure plan. Even after 27 years, the TIFID may not complete all of the infrastructure that is planned to accommodate the anticipated need for industrial activity in the area. Infrastructure development takes decades to plan and construct, and market downturns such as the Great Recession and other unforeseen events often slows this process down. Limiting a TIF district to 15 years will simply not allow enough time to develop the public infrastructure needed to support robust and diverse industrial activities.
Tax increment financing (“TIF”) is a critical economic development tool for local governments across the State of Montana. TIF districts allow local governments to reduce blight and build public infrastructure to encourage private investment and development. It takes years for a TIF district to accumulate sufficient TIF funds to pay for streets, sidewalks, utilities and other statutorily authorized improvements. The ability to finance these improvements by issuing bonds with a repayment term that is currently authorized under the TIF statutes is essential in helping to accelerate growth in a TIF district. By financing costs early and spreading the costs over a longer period of time, TIF districts can help to transform a community through private development.
We believe House Bill 443 (“HB 443”) would negatively impact the ability of local governments to utilize TIF in two ways.
First, HB 443 provides for the expiration of TIF provisions 15 years after such provisions are adopted. For communities issuing TIF bonds to pay for improvements, this shortened period means significantly less time to develop sufficient increment. Bond investors require an established historical tax increment revenue stream before they will make an investment in TIF bonds. This requirement further reduces the time period for issuing and repaying bonds. The affect will be a reduction in the overall scope of the public improvements undertaken within a TIF district and therefore less ambitious private development.
Second, HB 443 provides that the Department of Revenue “may adopt rules to implement and administer the revenue and taxation provisions” of the TIF statutes. It is not clear what this broad delegation of authority is intended to achieve or if it is a permissible delegation of authority. To the extent that this provision gives the Department of Revenue the ability to substantively change TIF statutes through administrative processes, it creates uncertainty about the future of TIF. Such uncertainty negatively affects the marketability of TIF bonds, leading to lower bond ratings, higher interest rates or the inability to sell TIF bonds altogether. Bond investors require certainty with respect to the base taxable value of a TIF district and the manner in which increment is calculated and comfort that bond repayments will not be jeopardized through an unpredictable administrative process.
For these reasons, we believe HB 443 threatens the viability of TIF as a powerful tool for economic development, and we do not support HB 443.
Please contact Dan Semmens or Erin McCrady of Dorsey & Whitney LLP with any questions.
Missoula County opposes HB 443 - Revise termination and authorization of tax increment financing. Missoula County created its first industrial TIF in 1991 on approximately 1900 acres of land that included the Missoula Airport and 446 acres of vacant land that has become the Missoula County Development Park. We are proud to say that the Development Park now supports well over 1,500 jobs and the taxable value has grown from $176,605 in 1991 (0.15% of total county tax base) to $2,501,373 in 2012 (1.2% of county tax base). We are confident that this development would not have occurred without tax increment financing.
This TIFID will sunset in 2018, 27 years after its initial creation. The sunset of this TIF was extended once to accommodate a second bond issue which will ultimately enable the district to complete its primary infrastructure plan. Even after 27 years, the TIFID may not complete all of the infrastructure that is planned to accommodate the anticipated need for industrial activity in the area. Infrastructure development takes decades to plan and construct, and market downturns such as the Great Recession and other unforeseen events often slows this process down. Limiting a TIF district to 15 years will simply not allow enough time to develop the public infrastructure needed to support robust and diverse industrial activities. Please oppose HB 443. Respectfully, Dale Bickell on behalf of the Missoula County Commissioners
Missoula County opposes HB 443 - Revise termination and authorization of tax increment financing. Missoula County created its first industrial TIF in 1991 on approximately 1900 acres of land that included the Missoula Airport and 446 acres of vacant land that has become the Missoula County Development Park. We are proud to say that the Development Park now supports well over 1,500 jobs and the taxable value has grown from $176,605 in 1991 (0.15% of total county tax base) to $2,501,373 in 2012 (1.2% of county tax base). We are confident that this development would not have occurred without tax increment financing.
This TIFID will sunset in 2018, 27 years after its initial creation. The sunset of this TIF was extended once to accommodate a second bond issue which will ultimately enable the district to complete its primary infrastructure plan. Even after 27 years, the TIFID may not complete all of the infrastructure that is planned to accommodate the anticipated need for industrial activity in the area. Infrastructure development takes decades to plan and construct, and market downturns such as the Great Recession and other unforeseen events often slows this process down. Limiting a TIF district to 30 years will simply not allow enough time to develop the public infrastructure needed to support robust and diverse industrial activities. Please oppose HB 443.
Respectfully, Dale Bickell on behalf of the Missoula County Commissioners
Missoula County continues to oppose House Bill 443 - Revise termination and authorization of tax increment financing, before the House on third reading this afternoon. Infrastructure development takes decades to plan and construct and market downturns such as the Great Recession and other unforseen events often slows this process down. Limiting a TIF district to 30 years will simply not allow enough time to develop the public infrastructure needed to support robust and diverse industrial activities. Please oppose HB 443.
Respectfully, Dale Bickell on behalf of the Missoula County Commissioners
Missoula County opposes HB 443 - Revise termination and authorization of tax increment financing. Missoula County created its first industrial TIF in 1991 on approximately 1900 acres of land that included the Missoula Airport and 446 acres of vacant land that has become the Missoula County Development Park. We are proud to say that the Development Park now supports well over 1,500 jobs and the taxable value has grown from $176,605 in 1991 (0.15% of total county tax base) to $2,501,373 in 2012 (1.2% of county tax base). We are confident that this development would not have occurred without tax increment financing.
This TIFID will sunset in 2018, 27 years after its initial creation. The sunset of this TIF was extended once to accommodate a second bond issue which will ultimately enable the district to complete its primary infrastructure plan. Even after 27 years, the TIFID may not complete all of the infrastructure that is planned to accommodate the anticipated need for industrial activity in the area. Infrastructure development takes decades to plan and construct, and market downturns such as the Great Recession and other unforeseen events often slows this process down. Limiting a TIF district to 30 years will simply not allow enough time to develop the public infrastructure needed to support robust and diverse industrial activities. Please oppose HB 443.
Respectfully, Dale Bickell on behalf of the Missoula County Commissioners
Oppose: HB 443, sponsored by Representative Cook of Conrad - This bill would limit the term of bond financing in a TIF district to the 15th anniversary of its creation. It has a number of other provisions including the ability to spend remaining TIF funds on "new projects" when the district terminates rather than returning the funds to the affected taxing jurisdictions. This bill is very troubling in that by limiting the term of a bond issue, it effectively eliminates the use of bonds in TIF districts, particularly for smaller communities. Many times districts don't even "take off" for several years after their creation and are only able to bond in their 10th or later year of existence. There are currently at least TIF six districts being formed in the state as communities struggle to pay for critical infrastructure to support economic development, as federal grant dollars become more scarce. We can not afford to lose or limit one of the most effective programs that our state has in its "tool box" of economic development strategies!
ReplyDelete-Janet Cornish
Missoula County created its first industrial TIF in 1991 on approximately 1900 acres of land that included the Missoula Airport and 446 acres of vacant land that has become the Missoula County Development Park. We are proud to say that the Development Park now supports well over 1,500 jobs and the taxable value has grown from $176,605 in 1991 (0.15% of total county tax base) to
ReplyDelete$2,501,373 in 2012 (1.2% of county tax base). We are confident that this development would not have occurred without tax increment financing.
This TIFID will sunset in 2018, 27 years after its initial creation. The sunset of this TIF was extended once to accommodate a second bond issue which will ultimately enable the district to complete its primary infrastructure plan. Even after 27 years, the TIFID may not complete all of the infrastructure that is planned to accommodate the anticipated need for industrial activity in the area. Infrastructure development takes decades to plan and construct, and market downturns such as the Great Recession and other unforeseen events often slows this process down. Limiting a TIF district to 15 years will simply not allow enough time to develop the public infrastructure needed to support robust and diverse industrial activities.
-Dale
Sent on behalf of Dan Semmens and Erin McCrady:
ReplyDeleteTax increment financing (“TIF”) is a critical economic development tool for local governments across the State of Montana. TIF districts allow local governments to reduce blight and build public infrastructure to encourage private investment and development. It takes years for a TIF district to accumulate sufficient TIF funds to pay for streets, sidewalks, utilities and other statutorily authorized improvements. The ability to finance these improvements by issuing bonds with a repayment term that is currently authorized under the TIF statutes is essential in helping to accelerate growth in a TIF district. By financing costs early and spreading the costs over a longer period of time, TIF districts can help to transform a community through private development.
We believe House Bill 443 (“HB 443”) would negatively impact the ability of local governments to utilize TIF in two ways.
First, HB 443 provides for the expiration of TIF provisions 15 years after such provisions are adopted. For communities issuing TIF bonds to pay for improvements, this shortened period means significantly less time to develop sufficient increment. Bond investors require an established historical tax increment revenue stream before they will make an investment in TIF bonds. This requirement further reduces the time period for issuing and repaying bonds. The affect will be a reduction in the overall scope of the public improvements undertaken within a TIF district and therefore less ambitious private development.
Second, HB 443 provides that the Department of Revenue “may adopt rules to implement and administer the revenue and taxation provisions” of the TIF statutes. It is not clear what this broad delegation of authority is intended to achieve or if it is a permissible delegation of authority. To the extent that this provision gives the Department of Revenue the ability to substantively change TIF statutes through administrative processes, it creates uncertainty about the future of TIF. Such uncertainty negatively affects the marketability of TIF bonds, leading to lower bond ratings, higher interest rates or the inability to sell TIF bonds altogether. Bond investors require certainty with respect to the base taxable value of a TIF district and the manner in which increment is calculated and comfort that bond repayments will not be jeopardized through an unpredictable administrative process.
For these reasons, we believe HB 443 threatens the viability of TIF as a powerful tool for economic development, and we do not support HB 443.
Please contact Dan Semmens or Erin McCrady of Dorsey & Whitney LLP with any questions.
Dear Representatives Coffin and Wilson,
ReplyDeleteMissoula County opposes HB 443 - Revise termination and authorization of tax increment financing. Missoula County created its first industrial TIF in 1991 on approximately 1900 acres of land that included the Missoula Airport and 446 acres of vacant land that has become the Missoula County Development Park. We are proud to say that the Development Park now supports well over 1,500 jobs and the taxable value has grown from $176,605 in 1991 (0.15% of total county tax base) to $2,501,373 in 2012 (1.2% of county tax base). We are confident that this development would not have occurred without tax increment financing.
This TIFID will sunset in 2018, 27 years after its initial creation. The sunset of this TIF was extended once to accommodate a second bond issue which will ultimately enable the district to complete its primary infrastructure plan. Even after 27 years, the TIFID may not complete all of the infrastructure that is planned to accommodate the anticipated need for industrial activity in the area. Infrastructure development takes decades to plan and construct, and market downturns such as the Great Recession and other unforeseen events often slows this process down. Limiting a TIF district to 15 years will simply not allow enough time to develop the public infrastructure needed to support robust and diverse industrial activities. Please oppose HB 443.
Respectfully,
Dale Bickell on behalf of the Missoula County Commissioners
Sent the following to Missoula Reps:
ReplyDeleteMissoula County opposes HB 443 - Revise termination and authorization of tax increment financing. Missoula County created its first industrial TIF in 1991 on approximately 1900 acres of land that included the Missoula Airport and 446 acres of vacant land that has become the Missoula County Development Park. We are proud to say that the Development Park now supports well over 1,500 jobs and the taxable value has grown from $176,605 in 1991 (0.15% of total county tax base) to $2,501,373 in 2012 (1.2% of county tax base). We are confident that this development would not have occurred without tax increment financing.
This TIFID will sunset in 2018, 27 years after its initial creation. The sunset of this TIF was extended once to accommodate a second bond issue which will ultimately enable the district to complete its primary infrastructure plan. Even after 27 years, the TIFID may not complete all of the infrastructure that is planned to accommodate the anticipated need for industrial activity in the area. Infrastructure development takes decades to plan and construct, and market downturns such as the Great Recession and other unforeseen events often slows this process down. Limiting a TIF district to 30 years will simply not allow enough time to develop the public infrastructure needed to support robust and diverse industrial activities. Please oppose HB 443.
Respectfully,
Dale Bickell on behalf of the Missoula County Commissioners
Sent the following to Missoula Reps:
ReplyDeleteMissoula County continues to oppose House Bill 443 - Revise termination and authorization of tax increment financing, before the House on third reading this afternoon. Infrastructure development takes decades to plan and construct and market downturns such as the Great Recession and other unforseen events often slows this process down. Limiting a TIF district to 30 years will simply not allow enough time to develop the public infrastructure needed to support robust and diverse industrial activities. Please oppose HB 443.
Respectfully,
Dale Bickell on behalf of the Missoula County Commissioners
Senators Malek and Barrett,
ReplyDeleteMissoula County opposes HB 443 - Revise termination and authorization of tax increment financing. Missoula County created its first industrial TIF in 1991 on approximately 1900 acres of land that included the Missoula Airport and 446 acres of vacant land that has become the Missoula County Development Park. We are proud to say that the Development Park now supports well over 1,500 jobs and the taxable value has grown from $176,605 in 1991 (0.15% of total county tax base) to $2,501,373 in 2012 (1.2% of county tax base). We are confident that this development would not have occurred without tax increment financing.
This TIFID will sunset in 2018, 27 years after its initial creation. The sunset of this TIF was extended once to accommodate a second bond issue which will ultimately enable the district to complete its primary infrastructure plan. Even after 27 years, the TIFID may not complete all of the infrastructure that is planned to accommodate the anticipated need for industrial activity in the area. Infrastructure development takes decades to plan and construct, and market downturns such as the Great Recession and other unforeseen events often slows this process down. Limiting a TIF district to 30 years will simply not allow enough time to develop the public infrastructure needed to support robust and diverse industrial activities. Please oppose HB 443.
Respectfully,
Dale Bickell on behalf of the Missoula County Commissioners