Amendments	Fiscal Memos
SA0363	Amendment 1-0 to SB1434
SA0461	Amendment 2-0 to SB1434
SA0462	Amendment 3-0 to SB1434

	Amendments	Fiscal Memos
HA0483	Amendment 1-1 to HB0524
HA0503	Amendment 2- to HB0524

NOTE: Each fiscal memorandum applies only to the amendment(s) identified in the memorandum. The fiscal memorandum must be matched to any amendments that have been adopted.

Fiscal Summary

NOT SIGNIFICANT

Bill Summary

ON APRIL 30, 2019, THE HOUSE ADOPTED AMENDMENTS #1 AND #2 AND PASSED HOUSE BILL 524, AS AMENDED.

AMENDMENT #1 rewrites this bill to enact the "Regional Retail Tourism Development District Act", which is similar to the present law "Border Region Retail Tourism Development District Act".

This amendment provides for the establishment of regional retail tourism development districts (districts) within municipalities that border a neighboring state and provides for the allocation of certain revenue from the sales and use taxes to pay for the costs of any economic development project in such district. For purposes of this amendment, "economic development project" means the provision of financial assistance to an extraordinary retail or tourism facility, and other retail or tourism facilities developed to accompany the extraordinary retail or tourism facility, in a district by a municipality or an industrial development corporation. "Extraordinary retail or tourism facility" means a store, series of stores, or other public tourism facility located within a district that:

(1) Includes retail or other public tourism facilities that are reasonably anticipated to draw at least one million visitors a year upon completion; and
(2) Is reasonably expected to require a capital investment of at least $20 million and is reasonably anticipated to remit at least $2 million in state sales and use tax when completed.

If a municipality or industrial development corporation has financed, constructed, leased, equipped, renovated, assisted, incented, or acquired an extraordinary retail or tourism facility or an economic development project in a certified district, then 75 percent of state sales and use tax collected in the district in excess of base tax revenues would be apportioned and distributed to the municipality in an amount equal to the incremental increase in state sales and use taxes derived from the sale of goods, products, and services within the district in excess of base tax revenues. Apportionment and distribution of such taxes would continue until all the costs of the economic development project, including any principal and interest on indebtedness, have been fully paid or for 30 years, whichever occurs first. "Base tax revenues" means the revenues generated from the collection of state sales and use taxes from all businesses within the applicable district as of the end of the state's fiscal year immediately prior to the year in which the municipality or industrial development corporation is entitled to receive an allocation of tax revenue pursuant to this amendment. Revenue generated from certain sales and use tax increases resulting from laws passed in 1992 and 2002, which is allocated to educational purposes, will not be reallocated under this amendment.

Tax revenue distributed to a municipality pursuant to this amendment would be for the exclusive use of the municipality or the industrial development corporation for payment of the cost of the economic development project. The apportionment and payment would be made by the department of revenue to the municipality within 90 days of the end of each fiscal year for which the municipality is entitled to receive an allocation and payment pursuant to this amendment.

To be entitled to receive the apportionment of state sales and use taxes as provided in this amendment, a municipal legislative body must adopt an ordinance designating the boundaries of the district. No municipality may contain more than one such district, and such a district may be no more than 1/2 mile from an existing federally-designated interstate exit, no more than 20 miles from the state border of two neighboring states, and no larger than 950 acres. The municipality must then file a certified copy of the ordinance with the commissioner of revenue along with a request for certification of the district. The request must include a master development plan for the proposed district.

After certification of the district, the municipality will be required to submit annually to the commissioner a summary of the cost of the economic development project with supporting documentation, certified by the chief financial officer of the municipality, which must include the cost of any new phases or additional development of the project to be completed within the 30-year time limit. The commissioner will review the cost certification to determine whether state sales and use taxes, in the amount determined by the commissioner, will be apportioned and distributed to the municipality pursuant to this amendment and must notify the department of economic and community development of such determination.

Additional development or new phases of a project within a district must not be initiated after the expiration of 20 years following the district's certification. The certified district would be dissolved following the expiration of 30 years, or upon the date on which the cost of the project has been fully paid, whichever is sooner.

Annual adjustments to the sales and use tax revenues collected in the district must be made by the department of revenue within 90 days of the end of each fiscal year and would be effective immediately upon notification of such adjustment from the department of revenue to the municipality or industrial development corporation.

This amendment authorizes an eligible municipality in which a district is located to delegate to any industrial development corporation within the county where the municipality is located the authority to carry out all or part of the project, to issue revenue bonds to finance a project within a district and to incur costs for the project. The municipality may enter into an agreement with an industrial development corporation in which the municipality agrees to pay to the industrial development corporation the tax revenues received pursuant to this amendment sufficient to service the repayment of such bonds and costs incurred for the project. Upon receipt, that portion of such tax revenues would be held in trust by the municipality for the benefit of the industrial development corporation.

Prior to the issuance of any bonds to finance the cost of an economic development project that will be repaid from apportionments under this amendment, the municipality or industrial development corporation issuing such bonds must submit a proposed debt amortization schedule for such bonds to the commissioner of revenue for approval. The schedule must show the anticipated contribution to be made to the annual debt service for such bonds from the apportionment of sales and use taxes pursuant to this amendment and all other sources. After the date of issuance of such bonds, the municipality would be required to continue contributing each year thereafter until such bonds are retired or a sufficient sinking fund has been established for their retirement. Any bonds, notes, refunding bonds, or other indebtedness relative to the cost of an economic development project may not be issued for a term longer than 30 years.

A municipality, including through an industrial development corporation, may limit, condition, or provide incentives or financial support in the district as it deems appropriate. Such provisions may include a requirement that the benefited property owners participate in the repayment of indebtedness in an amount equal to 25 percent of the property tax for the real property owned by the property owner in the district each year, for such length of time as the municipality receives an appropriation of sales and use tax and the property owner provides a lien on the property for such repayment. However, a municipality may not provide financial assistance to the location or relocation of existing retailers located within a 15-mile radius of the district if the existing location is inside the borders of this state, unless the sales floor space is increased by at least 35 percent from the existing store.

This amendment authorizes a municipality to allocate some or all of the incremental increase in property tax revenue directly as a result of the development within the district to pay for some costs associated with the district formation as well as economic development projects or extraordinary retail or tourism projects within the district.

AMENDMENT #2 removes references to parcels located in a municipality in regard to a "district" and specifies instead that districts under this bill are parcels in Washington County with the boundaries described above in the summary for House Amendment #1.

ON MAY 2, 2019, THE SENATE SUBSTITUTED HOUSE BILL 524 FOR SENATE BILL 1434, ADOPTED AMENDMENTS #2 AND #3, AND RESET HOUSE BILL 524, AS AMENDED.

AMENDMENT #2 reduces the duration of a regional retail tourism development district that is created pursuant to this bill from 30 years to 15 years and prohibits the initiation of new project phases within a district after ten years following certification of the district instead of after 20 years following certification of the district.

AMENDMENT #3 makes the same changes as House Amendment #2.

ON MAY 2, 2019, THE SENATE FURTHER CONSIDERED HOUSE BILL 524, AND PASSED HOUSE BILL 524, AS AMENDED BY AMENDMENTS #2 AND #3.

ON MAY 2, 2019, THE HOUSE NON-CONCURRED IN SENATE AMENDMENT #2 AND CONCURRED IN SENATE AMENDMENT #3.

ON MAY 2, 2019, THE SENATE LIFTED THE TABLING MOTION ON HOUSE BILL 524, RECONSIDERED ITS ACTION IN ADOPTING SENATE AMENDMENT #2, AND RE-PASSED HOUSE BILL 524, AS AMENDED BY AMENDMENT #3.