Tax increment financing.

WORKING DRAFT
2010
STATE OF
WYOMING
10LSO-0137

HOUSE BILL
NO.
HB0040

Tax increment financing.

Sponsored by:
Joint Revenue Interim Committee

A BILL

for

AN ACT relating to municipalities; providing for tax increment financing for municipal public improvements; providing definitions; providing for bonding; providing for apportionment of property taxes within a specified area and excise taxes to finance public improvements; and providing for an effective date.

Be It Enacted by the Legislature of the State of
Wyoming
:

Section 1.

W.S. 15
‑
9
‑
301 through 15
‑
9
‑
309 are created to read:

ARTICLE 3
TAX INCREMENT FINANCING

15
‑
9
‑
301.

Declarations.

(a)

The
Wyoming
legislature declares it to be the public policy of the
s
tate of
Wyoming

to promote and facilitate the orderly development and economic stability of its municipalities.

Municipal
governing bodies need the ability to raise revenue to finance public improvements that are designed

to encourage economic growth and development in specified geographic areas.

The construction

of necessary public improvements in accordance with local economic development plans will

encourage investment in job

producing private development and expand the public tax base.

(b)

It is the purpose of this article:

(i)

To encourage municipalities
to use
future tax revenues to finance public improvements

designed to encourage private development in selected areas;

(ii)

To assist those municipalities that have a competitive disadvantage

in their ability to attract business, private investment or commercial development;

and

(iii)

To prevent or arrest the decay of selected areas due to the inability of

existing financial methods to pro
vide needed public improvements
and to encourage

private investment designed to promote and facilitate the orderly redevelopment of

selected areas.

15
‑
9
‑
302.

Definitions.

(a)

As used in this article, unless the context otherwise requires:

(i)

"
Assessed value
"

means the taxable value of all property that is

subject to taxation within the increment area.

Assessed value shall be determined

from the assessment roll of the county within which the increment area is located for
the ensuing tax year;

(ii)

"
Available excise tax
"

means all excise taxes collected pursuant to

W.S. 39
‑
15
‑
104, 39
‑
15
‑
204(a)(i), 39
‑
16
‑
104 and 39
‑
16
‑
204(a)(i);

(ii
i
)

"
Available property tax
"

means all property taxes levied by
a municipal governing body
upon the taxable value of all property that is subject to taxation within

the increment area, not including property taxes derived from the levy each year of

a tax
for any other public body
;

(iv)

"
Bonds
"

means any bonds,
including refunding bonds, notes, interim

certificates, temporary bonds, certificates of indebtedness, debentures or other

ob
ligations;

(v)

"
Increment area
"

means the geographic area
, not to exceed forty (40) acres,
from which available

property taxes and available excise taxes are to be appropriated to finance public

improvement
s authorized under this article;

(vi)

"
Increment value
"

means any increase in the available property tax

in an increment area after the increment area is created and any increase in the

available excise taxes collected within the bo
undaries of said increment area;

(vii)

"
Municipality
"

means any city or town;

(viii)

"
Ordinance
"

means any appropriate method of taking legislative

action by a g
overning body of a municipality;

(
ix
)

"
Public body
"

means a governmental entity that levies property and excise taxes within a prop
osed or approved increment area

or has such a levy imposed on its behalf
;

(x)

"
Public improvements
"

means, but
is
not limited to:

(A)

Infrastructure improvements within the increment area that include:

(
I
)

Street and road construction and maintenance;

(
II
)

Water and sewer system construction and improvements;

(
III
)

Sidewalks and streetlights;

(
IV
)

Parking facilities;

(
V
)

F
acilities of a regional transportation authority;

(
VI
)

Park facilities and recreational areas;

(
VII
)

Surface water drainage systems;

(
VIII
)

Business parks; and

(
IX
)

Publicly owned buildings.

(B)

Expenditures for any of the following purposes:

(
I
)

Providing environmental analysis, professional

management, planning and promotion of development

within the increment area;

(
II
)

Providing maintenance and security for common or

public areas in the increment area; or

(
III
)

Historic preservation activities.

(x
i
)

"
Public improvement costs
"

means, but is not limited to, the costs of:

(
A
)

D
esign, planning, acquisition, site preparation, construction, reconstruction,

rehabilitation, improvement and installation of public improvements;

(
B
)

R
elocating,

maintaining and operating property pending construction of public improvements;

(
C
)

R
elocating utilities as a result of public improvements;

(
D
)

F
inancing public

improvements, including interest during construction, legal and other professional

services, taxes, insurance, principal and interest costs on bonds issued to finance
public improvements
and any necessary reserves therefor;

(
E
)

A
ssessments incurred

in revaluing taxable property for the purpose of determining the tax allocation base

value that are in excess of costs incurred by the assessor in accordance with any
revaluation plan
and the costs of apportioning the tax allocation revenues and

complying with this chapter and other applicable law; and

(
F
)

A
dministrative expenses

and feasibility studies reasonably necessary and related to these costs, including

related costs that may have been incurred before adoption of the ordinance

authorizing the public improvements and the use of community development

financing to fund the costs of the public improvements.

(xi
i
)

"
Taxable property
"

shall have the same meaning as set forth in W.S.
39
‑
11
‑
103(a);

(xii
i
)

"
Tax allocation base value
"

means
:

(
A
)

T
he assessed value of taxable

property located within an increment area for taxes imposed in the year in which the

increment area is created, plus any increase in the assessed value of taxable property

located within an increment area that is placed on the assessment rolls after the
increment area is created; or

(
B
)

T
he available excise taxes collected within the

boundaries of the increment area in the twelve (12) month period ending on the last

day of the month prior to the effective date of
creation of the increment area
.

(xi
v
)

"
Tax allocation revenues
"

means those tax revenues derived from the

increment value of available property taxes and available excise taxes collected in the
increment area.

15
‑
9
‑
303.

Conditions
r
estricting
f
inancing.

(a)

A municipality may finance public improvements using
tax increment
financing subject to the following conditions:

(
i
)

The municipality adopts an ordinance designating an increment area

within its boundaries and specifying the public improvements proposed to be

financed in whole or in part with the use of
tax increment
financing;

(
ii
)

The public improvements proposed to be financed in whole or in part

using
tax increment
financing are
designed
to encourage private

development within the increment area and to increase the assessed value of the

taxable property therein; and

(
iii
)

Private development that is anticipated to occur within the increment

area, as a result of the public improvements, will be consistent with any

comprehensive plan and development standards adopted by the municipality.

15
‑
9
‑
304.

Coordination with other programs; improvements by private developer
shall
meet applicable state and local standards.

(a)

Public improvements that are financed with
tax increment
financing may

be undertaken and coordinated with other programs or efforts undertaken by the municipality and

other public bodies and may be funded in part from revenue sources other than tax allocation

revenues.

(b)

Public improvements that are constructed by a private developer
shall
meet all

applicable state and local standards.

15
‑
9
‑
305.

Procedure for creating increment area.

(a)

Before adopting an ordinance creating an increment area, a municipality
shall
:

(i)

Make available to the county assessor of the county in which the proposed

increment area is located and the
division
of economic analysis of the
department of administration and information
, a copy of the

municipality
'
s
local economic development plan;

(ii)

E
stablish the tax allocation base value of the
proposed increment area;

(iii)

O
btain project
ions of tax allocation revenues;

(
iv
)

Hold a public hearing on the creation of the increment area and the public

improvements that are proposed to be financed, in whole or in part, with
tax increment
financing.

The public hearing may be held by either the governing body of the

municipality, or a committee of the governing body that includes at least a majority of the whole

governing body
.
Notice of the public hearing
shall
be published in a legal newspaper of general circulation

within the proposed increment area at least ten (10) days before the public hearing.
The n
otice
shall
describe
:

(
A
)

T
he boundaries
of the proposed increment area;

(
B
)

T
he contemplated public

improveme
nts and estimated costs thereof;

(
C
)

T
he portion of the costs of the public improvements

to be borne by
tax increment financing;

(D
)

A
ll available sources of revenue to finance
the public improvements;
and

(
E
)

A
n estimate of the period during which the tax allocation revenues
will be apportioned.

(
v
)

Adopt an ordinance establishing the increment area that includes the items prescribed

in subsection (b)
of this section
, along with
:

(
A
)

T
he date when the apportionment of the tax allocation

revenues will commence
;
and

(
B
)

A
finding that the conditions of W.S. 15
‑
9
‑
303 are met.

The

municipality shall deliver a certified copy of the ordinance to the county treasurer, the county

assessor and to
the state department of revenue
and shall record the ordinance in the real estate

records of the county clerk.

15
‑
9
‑
306.

Apportionment of property and excise taxes; issuance of limited

obligation and special revenue bonds; special funds; adjustment evaluations.

(a)

Notwithstanding any law to the contrary, any local economic development plan as

originally adopted by the municipality, or as later modified pursuant to this article, may contain a

provision that tax allocation

revenues shall be apportioned for a period not to exceed twenty-five

(25) years after the effective date of approval
of the plan
by the governing body, as follows:

(i)

All or any portion of the available property taxes, as specified by the

ordinance of the governing body, in excess of the tax allocation base value as
defined in W.S. 15
‑
9
‑
302(a)(xiii)(A)
shall be apportioned and, when collected,

paid into a special property tax fund of the municipality and may be irrevocably

pledged by the municipality for the payment of the principal of, the interest on, and

any premiums due in connection with limited obligation bonds issued by the

municipality for financing or refinancing, in whole or in part, the public

improvements within the boundaries of the increment area, provided that the question

of initially issuing such bonds and the question of the intended pledge are first

submitted for approval to the qualified electors of the municipality at an election

which shall be called, conducted, canvassed and returned in the manner provided for

bond elections by the Political Subdivision Bond Election Law, W.S. 22
‑
21
‑
101

through 22
‑
21
‑
112.

Bonds issued pursuant to this section shall constitute an

indebtedness of the municipality within the meaning of constitutional and statutory

limitations.

Unless and until the assessed value of the taxable property within

the boundaries of the increment area exceeds the tax allocation base value
under W.S. 15
‑
9
‑
302(a)(xiii)(A)
for

assessment of the taxable
property within such boundaries
all of the available property taxes in the increment area shall

be paid into the treasury of the
municipality
levying
the taxes;

(ii)

All or any portion of the available excise taxes, as specified by the

ordinance of the governing body, in excess of the tax allocation base value
as defined by W.S. 15
‑
9
‑
302(a)(xiii)(B)
shall be apportioned to and, when

collected, paid into a special excise tax fund of the municipality and may be

irrevocably pledged by the municipality for the payment of the principal of, the

interest on, and any premiums due in connection with special revenue bonds issued

by the municipality for financing or refinancing, in whole or in part, the public

improvements within the boundaries of the increment area.

No election is required

for the issuance of special revenue bonds.

However, each bond issued pursuant to

this section shall recite in substance that the bond, including interest payable thereon,

is payable solely from the available excise tax allocation revenues and the special

excise tax fund pledged to the payment thereof.

Unless and until the total available

excise tax collections in the increment area exceeds the tax allocation base value
under W.S. 15
‑
9
‑
302(a)(xiii)(B)
in

such area

all available excise tax

collections shall be paid into the funds of the public body collecting the taxes
as provided in title 39 of
Wyoming
statutes
.

(
b
)

The provisions of subsection (a) of this section regarding the apportionment of

available property
taxes
shall take precedence over any other provisions

of state law regarding the imposition or allocation of such
property
taxes
.

R
eceipts from
excise
taxes

apportioned and paid to a municipality pursuant to this subsection shall constitute revenues of the

municipality and not revenues of the public body to which the receipts would have been apportioned

and paid but for the operation of subsection (a) of this section.

(
c
)

The state and each public body collecting excise taxes

within an increment area shall keep books and records in a manner such that the available excise taxes levied and collected within the area may be determined and paid in

accordance with this article, which books and records shall be furnished to the municipality

periodically at its request.

To the extent the available excise taxes

cannot be accurately determined for purposes of determining any tax allocation base value as

provided in
W.S. 15
‑
9
‑
302(a)(xiii)(B)
, the governing body may estimate the tax allocation base

value based on the information available, which estimation shall be deemed to be the accurate and

conclusive tax allocation base value for all purposes of this article.

(
d
)

The county assessor shall apportion any increased assessed value of taxable property

occurring in the increment area to the increment value.

(e
)

The apportionment of increases in assessed value of taxable property in an increment
area
and the associated distribution to the municipality of receipts of available property taxes that

are imposed on the increment value, and available excise taxes collected,
shall
cease when tax

allocation revenues are no longer necessary or obligated to pay the costs of the public improvements.

Any excess tax allocation revenues and earnings thereon
shall
be returned to the county treasurer and

distributed to the public body that imposed the available property taxes, or had the available property

taxes imposed for it, or collected available excise taxes in the increment area that year, in proportion

to the rates of their available property tax levies or excise tax collections that year.

(
f
)

In the event there is a general reassessment of taxable property valuations in any

county including all or part of the increment area subject to apportionment of valuation for

assessment under subsection (
b) of this section
or a change in the excise tax percentage levied in any
public body
including all or part of the increment area subject to apportionment of excise taxes

under subsection (
b) of this section
the portions of valuations for assessment or excise taxes under

both paragraphs
(a)
(i) and (ii) of this section shall be proportionately adjusted in

accordance with the reassessment or change.

15
‑
9
‑
307.

Indebtedness; security.

(a)

A municipality designating an increment area and authorizing the use of
tax increment
financing may issue limited obligation bonds as allowed by W.S. 15
‑
9
‑
306(a)(ii) or

special revenue bonds as allowed by W.S. 15
‑
9
‑
306(a)(iii), to finance the public improvements and

retire the indebtedness in whole or in part from the appropriate tax allocation revenues it receives,

subject to the following requirements:

(i)

The ordinance adopted by the governing body of the municipality creating the

increment area and authorizing the use of
tax increment
financing

indicates the type of indebtedness the municipality intends to incur and the maximum

amount of the indebtedness that is contemplated;

(ii)

The municipality includes this statement of intent in all notices required by

W
.
S. 15
‑
9
‑
306; and

(iii)

The ordinance adopted by the governing body authorizing the issuance of

bonds determines for each issue the amount, date, form, terms, conditions,

denominations, maximum fixed or variable interest rate or rates, maturity or
maturities,
not to exceed twenty-five (25) years, redemption rights, registration

privileges, manner of execution, manner of sale, call provisions, if any, and

covenants including the refunding of existing bonds.

Refunding bonds may be issued

in the same manner as new money bonds are issued.

(b)

Limited obligation bonds
under W.S. 15
‑
9
‑
306(a)(i)
constitute an indebtedness of the municipality issuing the
bonds
and the principal of and interest on the bonds may also be payable from other tax revenues,

the full faith
and credit of the municipality
an
d nontax income, revenues, fees
and rents from the

public improvements, a
s well as contributions, grants
and nontax money available to the

municipality for payment of costs of the public improvements or associated debt service on the

limited obligation bonds.

(c)

Special revenue bonds
under W.S. 15
‑
9
‑
306(a)(ii)
are not an indebtedness of the
municipality issuing the bonds
and the principal of and interest on the bonds shall only be payable from the revenues lawfully

pledged to meet the principal and interest requirements and any reserves created therefor.

The owner

of a special revenue bond issued pursuant to this section shall not have any claim against the

municipality arising from the bond except for payment from the revenues lawfully pledged to meet

the principal and interest requirements and any reserves created therefor.

The substance of the

limitations included in this subsection shall be plainly printed, written or engraved on each bond

issued pursuant to this section.

(d)

In addition to the requirements in
subsection
(a)
of this section
, a municipality designating an increment

area and authorizing the use of
tax increment
financing may require any nonpublic

participant to provide additional security for the payment of the bonds and interest thereon.

15
‑
9
‑
30
8
.

Conclusive presumption of validity
.

A direct or collateral attack on a public improvement, public improvement ordinance or

increment area purported to be authorized or created in conformance with applicable legal

requirements, including this article, may not be commenced more than thirty (30) days after

publication of notice as required by W.S. 15
‑
9
‑
305.

15
‑
9
‑
3
09
.

Supplemental nature of article.

This article supplements and neither restricts nor limits any powers which the state or any

municipality might otherwise have under any laws of this state.

Section 2.

W.S. 39
‑
15
‑
111(b)(i), (iii)(intro) and by creating a new subsection (p), 39
‑
15
‑
211(a)(i)(B)(intro) and by creating a new subparagraph (D), 39
‑
16
‑
111(b)(i), (iii)(intro) and by creating a new subsection (p)
and
39
‑
16
‑
211(a)(i)(B)(intro) and by creating a new subparagraph (D) are amended to read:

39
‑
15
‑
111.

Distribution.

(b)

Revenues earned under W.S. 39
‑
15
‑
104 during each fiscal year shall be recognized as revenue during that fiscal year for accounting purposes. Revenue collected by the department under W.S. 39
‑
15
‑
104 shall be transferred to the state treasurer who shall:

(i)

Credit sixty-nine percent (69%) to the state general fund except as provided by subsections (c)
,

and
(d)

and (p)
of this section;

(iii)

Except as provided in subsection (p) of this section, f
rom the remaining share,
until June 30, 2004, deduct an amount equivalent to one-half percent (0.5%) and thereafter
deduct an amount equivalent to one percent (1%) of the tax collected under W.S. 39
‑
15
‑
104. From this amount, the state treasurer shall distribute
until June 30, 2004, twenty thousand dollars ($20,000.00) and thereafter
forty thousand dollars ($40,000.00) annually to each county in equal monthly installments and then distribute the remainder to each county in the proportion that the total population of the county bears to the total population of the state. The balance shall then be paid monthly to the treasurers of the counties, cities and towns for payment into their respective general funds. The percentage of the balance that will be distributed to each county and its cities and towns will be determined by computing the percentage that net sales taxes collected attributable to vendors in each county including its cities and towns bear to total net sales taxes collected of vendors in all counties including their cities and towns. Subject to
subsection

subsections
(h)
and (p)
of this section, this percentage of the balance shall be distributed within each county as follows:

(
p
)

I
f, after
July 1, 2010
, any local economic

development pl
an is adopted that provides for
or modifies an existing

plan to include a provision for the apportionment of available excise

taxes in accordance with W.S. 15
‑
9
‑
306(
a
), the state treasurer shall

thereafter pay to the municipality in which the increment area, as

defined by
W
.
S
. 15
‑
9
‑
302
(a)
(v), is located and such municipality shall deposit

into its excise tax fund created pursuant to
W
.
S
.

15
‑
9
‑
306
(a)
(ii), the excise

tax allocation revenues, as defined by
W
.
S
. 15
‑
9
‑
302(a)(xi
v
), available

under paragraphs (b)(i) and (iii) of this section, as determined pursuant

to
W
.
S
. 15
‑
9
‑
306(a)(ii), which payments shall continue for so long as the

apportionment of
t
axes is in effect pursuant to
W
.
S
. 15
‑
9
‑
3
06
(
e
) and the

local economic development plan.

39
‑
15
‑
211.

Distribution.

(a)

All revenue collected by the department from the taxes imposed under W.S. 39
‑
15
‑
204(a)(i), (ii), (v) and (vi) shall be transferred to the state treasurer who shall:

(i)

For revenues collected under W.S. 39
‑
15
‑
204(a)(i):

(B)

Subject to subparagraph (D) of this paragraph, d
eposit the remainder into an account for monthly distribution to counties imposing the tax and its cities and towns. The distribution to the county and its cities and towns shall be equal to the amount collected in each county less the costs of collection as provided by subparagraph (a)(i)(A) of this section. The distribution shall be as follows:

(D)

If, after July 1, 20
10
, any local economic development plan is adopted that provides for, or modifies an existing plan to include a provision for the apportionment of available excise taxes in accordance with
W
.
S
. 15
‑
9
‑
306(
a
), the state treasurer shall thereafter pay to the municipality in which the increment area, as defined by
W
.
S
. 15
‑
9
‑
302
(a)
(v), is located and such municipality shall deposit into its excise tax fund created pursuant to
W
.
S
.

15
‑
9
‑
306
(a)
(ii), the excise tax allocation revenues, as defined by
W
.
S
. 15
‑
9
‑
302(a)(xi
v
), available under
subparagraph
(i)
(B)
of this
sub
section, as determined pursuant to
W
.
S
. 15
‑
9
‑
306(a)(ii), which payments shall continue for so long as the apportionment of taxes is in effect pursuant to
W
.
S
. 15
‑
9
‑
3
0
6(
e
) and the local economic development plan.

39
‑
16
‑
111.

Distribution.

(b)

Revenues earned under this article during each fiscal year shall be recognized as revenue during that fiscal year for accounting purposes. Revenue collected by the department from the taxes imposed by this article shall be transferred to the state treasurer who shall:

(i)

Credit sixty-nine percent (69%) to the general fund except as provided by subsections (d)
,

and
(e)
and (p)

of this section;

(iii)

Except as provided by subsection (p) of this section, f
rom the remaining share,
until June 30, 2004, deduct an amount equivalent to one-half percent (0.5%) and thereafter
deduct an amount equivalent to one percent (1%) of the tax collected under W.S. 39
‑
16
‑
104. From this amount, the state treasurer shall distribute
until June 30, 2004, five thousand dollars ($5,000.00) and thereafter

ten thousand dollars ($10,000.00) annually to each county in equal monthly installments and then distribute the remainder to each county in the proportion that the total population of the county bears to the total population of the state. The remainder shall then be paid monthly to the treasurers of the counties, cities and towns for payment into their respective general funds. The percentage of the remainder that will be distributed to each county and its cities and towns will be determined by computing the percentage that net use taxes collected attributable to vendors in each county including its cities and towns bear to total net use taxes collected of vendors in all counties including their cities and towns. The distribution shall be as follows:

(
p
)

I
f, after
July 1, 20
10
, any local economic

development pl
an is adopted that provides for
or modifies an existing

plan to include a provision for the apportionment of available excise

taxes in accordance with W.S. 15
‑
9
‑
306(
a
), the state treasurer shall

thereafter pay to the municipality in which the increment area, as

defined by
W
.
S
. 15
‑
9
‑
302
(a)
(v), is located and such municipality shall deposit

into its excise tax fund created pursuant to
W
.
S
.

15
‑
9
‑
306
(a)
(ii), the excise

tax allocation revenues, as defined by
W
.
S
. 15
‑
9
‑
302(a)(xi
v
), available
under paragraphs (b)(i) and
(iii) of this section, as determined pursuant

to
W
.
S
. 15
‑
9
‑
306(a)(ii), which payments shall continue for so long as the

apportionment of
t
axes is in effect pursuant to
W
.
S
. 15
‑
9
‑
3
06
(
e
) and the

local economic development plan.

39
‑
16
‑
211.

Distribution.

(a)

All revenue collected by the department from the taxes imposed under W.S. 39
‑
16
‑
204(a)(i), (iv) and (v) shall be transferred to the state treasurer who shall:

(i)

For revenues collected under W.S. 39
‑
16
‑
204(a)(i):

(B)

Subject to subparagraph (D) of this paragraph, d
eposit the remainder into an account for monthly distribution to counties imposing the tax and its cities and towns. The distribution to the county and its cities and towns shall be equal to the amount collected in each county less the costs of collection as provided by subparagraph (a)(i)(A) of this section. The distribution shall be as follows:

(D)

If, after July 1, 20
10
, any local economic development plan is adopted that provides for, or modifies an existing plan to include a provision for the apportionment of available excise taxes in accordance with
W
.
S
. 15
‑
9
‑
306(
a
), the state treasurer shall thereafter pay to the municipality in which the increment area, as defined by
W
.
S
. 15
‑
9
‑
302
(a)
(v), is located and such municipality shall deposit into its excise tax fund created pursuant to
W
.
S
.

15
‑
9
‑
306
(a)
(ii), the excise tax allocation revenues, as defined by
W
.
S
. 15
‑
9
‑
302(a)(xi
v
), available under
sub
paragraph (i)
(B)
of this
sub
section, as determined pursuant to
W
.
S
. 15
‑
9
‑
306(a)(ii), which payments shall continue for so long as the apportionment of taxes is in effect pursuant to
W
.
S
. 15
‑
9
‑
3
0
6(
e
) and the local economic development plan.

Section
3
.

Th
is act is effective July 1, 2010
.

(END)

1
HB0040