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2006 SESSION

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069145820
SENATE BILL NO. 575 Offered January 11, 2006 Prefiled January 11, 2006 A BILL to amend the Code of Virginia by adding a section numbered 58.1-608.3:01, relating to the entitlement of sales tax revenues generated from transactions on the premises of a mixed-use development that incorporates affordable housing. ---------- Patron-- Stolle ---------- Referred to Committee on Finance ----------

Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia is amended by adding a section numbered 58.1-608.3:01 as follows:

§ 58.1-608.3:01. Entitlement to sales tax revenues from mixed-use development projects.

A. As used in this section, the following words and terms have the following meanings, unless some other meaning is plainly intended:

"Affordable housing" means housing that is affordable to households with incomes at or below the area median family income as determined by the United States Department of Housing and Urban Development.

"Authority" means any (i) county, city, or town, (ii) redevelopment authority or redevelopment commission thereof, or (iii) other governmental entity affiliated with the county, city, or town that has the primary purpose of redeveloping real property. The term shall include only those authorities that are authorized to issue bonds.

"Bonds" means any obligations of an authority for the payment of money.

"Cost," as applied to any mixed-use development, means: (i) the purchase price of any real estate acquired by an authority for a mixed-use development and the amount to be paid to discharge any obligations in order to vest title to the real estate or any part of it in the authority; (ii) expenses incident to determining the feasibility or practicability of the mixed-use development; (iii) the cost of plans and specifications, surveys, and estimates of costs and of revenues; (iv) the cost of all land, property, rights, and easements and franchises acquired; (v) the cost of improvements, property, or equipment; (vi) the cost of engineering, legal, and other professional services; (vii) the cost of construction or reconstruction; (viii) the cost of all labor, materials, machinery, and equipment; (ix) financing charges; (x) interest before and during construction and for up to one year after completion of construction; (xi) start-up costs and operating capital; (xii) payments by an authority of its share of the cost of any multijurisdictional mixed-use development; (xiii) administrative expenses; (xiv) any amounts to be deposited to reserve or replacement funds; and (xv) other expenses as may be necessary or incident to the financing of the mixed-use development.

"Mixed-use development" means a building or buildings in a real estate development project that incorporate retail dealers and residential units with at least 20% of the residential units used for affordable housing. A mixed-use development may include an economically mixed project provided that at least 20% of the residential units in the project are used for affordable housing.

"Sales tax revenues" means such tax collections realized under the Virginia Retail Sales and Use Tax Act (§ 58.1-600 et seq.) of this title, as limited herein. "Sales tax revenues" does not include the revenue generated by the one-half percent sales and use tax increase enacted by the 1986 Special Session of the General Assembly that shall be paid to the Transportation Trust Fund as defined in § 33.1-23.03:1, nor shall it include the one percent of the state sales and use tax revenue distributed among the counties and cities of the Commonwealth pursuant to subsection D of § 58.1-638 on the basis of school-age population.

B. Any authority that has issued bonds on or after July 1, 2006, but before July 1, 2010, to pay the cost, or portion thereof, of any mixed-use development shall be entitled to all sales tax revenues generated by transactions taking place on the premises of such development. Such entitlement shall continue for the lifetime of such bonds, which entitlement shall not exceed 35 years, and all such sales tax revenues shall be applied to repayment of the bonds. The State Comptroller shall remit such sales tax revenues to the authority on a quarterly basis, subject to such reasonable processing delays as may be required by the Department of Taxation to calculate the actual net sales tax revenues derived from transactions taking place on the premises of the mixed-use development. The State Comptroller shall make such remittances to eligible authorities, as provided herein, notwithstanding any provisions to the contrary in the Virginia Retail Sales and Use Tax Act (§ 58.1-600 et seq.). No such remittances shall be made until construction of the mixed-use development is completed and, in the case of a renovation or expansion, until the governing body of the authority has certified that the renovation or expansion is completed.

C. No authority shall be entitled to sales tax revenues under this section unless the mixed-use development project has been certified by the Department of Housing and Community Development as a qualifying mixed-use development under the conditions of this section. The Department of Housing and Community Development shall establish an application process for such purposes. Upon determining that a mixed-use development is a qualifying project, the Department of Housing and Community Development shall provide a certification of the same to the authority and shall provide a copy of the certification to the Tax Commissioner. The Department of Housing and Community Development shall at least annually check each certified mixed-use development to verify that it continues to be a qualifying project under the conditions of this section.  

D. Nothing in this section shall be construed as authorizing the pledging of the faith and credit of the Commonwealth of Virginia, or any of its revenues, for the payment of any bonds. Any appropriation made pursuant to this section shall be made only from sales tax revenues derived from transactions taking place on the premises of the mixed-use development for which bonds may have been issued to pay the cost, in whole or in part, of such development.

2. That the Tax Commissioner, in consultation with the Director of the Department of Housing and Community Development, shall establish guidelines for purposes of implementing the provisions of this act. Such guidelines shall be exempt from the Administrative Process Act (§ 2.2-4000 et seq.).