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2023 SESSION
23103965DBe it enacted by the General Assembly of Virginia:
1. That §§ 30-309, 30-310, and 30-312 of the Code of Virginia are amended and reenacted and that the Code of Virginia is amended by adding a section numbered 30-310.1 as follows:
§ 30-309. MEI Project Approval Commission; membership; terms; compensation and expenses; definition.
A. The MEI Project Approval Commission (the Commission) is
established as an advisory commission in the legislative branch of state
government. The purpose of the Commission shall be to review financing for
individual incentive packages, including but not limited to packages offering
tax incentives, for economic development, film, and episodic television projects
(including but not limited to MEI projects) for which (i) one or more of the
incentives in the incentive package is not authorized under current law or an
amendment by the General Assembly is being sought to one or more currently
existing incentives included as part of the incentive package, (ii) one of the incentives being sought includes
a cash payment to a
private sector business of more
than $3.5 million
from any fund prior to any performance metrics
being met by the proposed project, or (ii) (iii)
the aggregate amount of incentives to be provided by the Commonwealth in the
incentive package including discretionary
grants, tax incentives such as
credits and exemptions related to economic development or the film or
television industry, general or nongeneral funds, proceeds
from bonds, rights to lease property at below fair market value, or any other
incentives from the Commonwealth is in excess of $10 million in value. However, Except
for the value of any sales tax exemption available pursuant to subdivision 18
of § 58.1-609.3 or tax credit available pursuant to §
58.1-439.12:03, the value of any existing nondiscretionary incentives
shall not be considered in calculating whether the
incentives are in excess of $10 million in value, and no
review shall be required for a project if the only incentives to be provided to
a potential project are nondiscretionary tax credits or
exemptions available to any qualified taxpayer under existing law incentives.
B. The Commission shall consist of 14 members as follows: seven members of the House Committee on Appropriations or the House Committee on Finance appointed by the chair of the House Committee on Appropriations and five members of the Senate Committee on Finance and Appropriations appointed by the chair of the Senate Committee on Finance and Appropriations. In addition, the Secretaries of Finance and Commerce and Trade shall serve as ex officio, nonvoting members of the Commission.
C. Members shall serve terms coincident with their terms of office. Vacancies for unexpired terms shall be filled in the same manner as the original appointments. Members may be reappointed for successive terms.
D. The members of the Commission shall elect a chairman and vice-chairman annually. A majority of the voting members of the Commission shall constitute a quorum. The meetings of the Commission shall be held at the call of the chairman or whenever the majority of the members so request.
E. Legislative members of the Commission shall receive such compensation as provided in § 30-19.12, and nonlegislative members shall receive such compensation as provided in § 2.2-2813.
F. As used in this chapter, "MEI project" means the same as that term is defined in § 2.2-2260, and "nondiscretionary incentive" means a tax credit, tax exemption, or grant to which a taxpayer or applicant is entitled if he meets the statutory criteria required for the credit, exemption, or grant.
§ 30-310. Review of incentive packages.
A. 1. The Commission shall review individual incentive
packages, including but not limited to packages offering tax incentives, for
economic development, film, and episodic television projects (including but not
limited to MEI projects) for which (i) one or more of the incentives in the
incentive package is not authorized under current law or an amendment by the
General Assembly is being sought to one or more currently existing incentives
included as part of the incentive package, (ii)
one of the incentives being sought includes a cash payment to a
private sector business of more than $3.5 million
from any fund prior to any performance metrics
being met by the proposed project, or (ii) (iii)
the aggregate amount of incentives to be provided by the Commonwealth in the
incentive package including discretionary
grants, tax incentives such as credits and exemptions,
general or nongeneral funds, proceeds from bonds, rights to lease property at
below fair market value, or any other incentives from the Commonwealth is in
excess of $10 million in value. However, Except for the value of any sales tax exemption
available pursuant to subdivision 18 of § 58.1-609.3 or tax
credit available pursuant to § 58.1-439.12:03, the value of any
existing nondiscretionary incentives shall not
be considered in calculating whether the incentives are in excess of $10
million in value, and no review shall be required for a
project if the only incentives to be provided to a potential project are
nondiscretionary tax credits or
exemptions available to any
qualified taxpayer under existing law
incentives. The Commission shall also review economic
development projects in which a business relocates or expands its operations in
one or more Virginia localities and simultaneously closes its operations or
substantially reduces the number of its employees in another Virginia locality if the aggregate amount of incentives to be
provided by the Commonwealth in the incentive package including
discretionary grants, general or nongeneral funds, proceeds from
bonds, rights to lease property at below fair market value, or any other
incentives from the Commonwealth is in excess of $2.5 million in value.
The Commission shall recommend approval or denial of such packages and projects
to the General Assembly. Factors that shall be considered by the Commission in
its review shall include but not be limited to (a) return on investment, (b)
the time frame for repayment of incentives to the Commonwealth, (c) average
wages of the jobs created by the prospective MEI project or other economic
development project, (d) the amount of capital investment that is required, and
(e) the need for enhanced employment opportunities in the prospective location
of the prospective MEI project or other economic development project.
2. a. Any time a proposed individual incentive package is to
be considered by the Commission, materials outlining (i) the value of the
proposed incentives; (ii) assumed return on investment; (iii) the time frame
for repayment of incentives to the Commonwealth; (iv) average wages of the jobs
created by the prospective economic development, film, or episodic television
project; (v) the amount of capital investment that is required; (vi) the need
for enhanced employment opportunities in the prospective location of the prospective
economic development, film, or episodic television project; (vii) the total
amount of state incentives received by the sponsor of the economic development,
film, or episodic television project in the past; and (viii) a list of all
other existing, nondiscretionary incentives tax credits or exemptions
for which the sponsor of the economic development, film, or episodic television
project may qualify shall be provided to the staff of the House Committee on
Appropriations and Senate Committee on Finance and Appropriations not less than
five business days prior to the scheduled Commission meeting. Staff shall also
be provided with an aggregate list of all discretionary incentives currently
committed by the Commonwealth for the next 10 years, including anticipated
requests for appropriations to satisfy such commitments during that time.
b. The timing of any request for an endorsement of a proposed individual incentive package should be scheduled so that the MEI Commission could, at its discretion, have up to seven days subsequent to the presentation of the incentive package prior to endorsing or rejecting such proposal.
c. State agencies, localities, authorities, or other political subdivisions of the Commonwealth that have significant involvement in a proposed individual incentive package in terms of providing facilities or regulatory support to a project or in developing the proposed individual incentive package shall review the materials required by subdivision 2 and certify the accuracy of such materials prior to consideration by the Commission.
B. An affirmative vote by four of the seven members of the
Commission from the House of Delegates and three of the five members of the
Commission from the Senate shall be required to endorse any incentive package,
including but not limited to packages offering tax incentives, for economic
development, film, and episodic television projects (including but not limited
to MEI projects) for which (i) one or more of the incentives in the incentive
package is not authorized under current law or an amendment by the General
Assembly is being sought to one or more currently existing incentives included
as part of the incentive package, (ii) one of the
incentives being sought includes a cash payment to a
private sector business of more than $3.5 million
from any fund prior to any performance metrics
being met by the proposed project, or (ii) (iii)
the aggregate amount of incentives to be provided by the Commonwealth in the
incentive package including discretionary
grants, tax incentives such as credits and exemptions,
general or nongeneral funds, proceeds from bonds, rights to lease property at
below fair market value, or any other incentives from the Commonwealth is in
excess of $10 million in value. Except for the value of
any sales tax exemption available pursuant to subdivision 18 of § 58.1-609.3 or tax
credit available pursuant to § 58.1-439.12:03, the value of any
existing nondiscretionary incentives shall
not be considered in calculating whether the incentives are in excess of $10
million in value. Such vote shall also be required to
endorse any economic development project in which a business relocates or
expands its operations in one or more Virginia localities and simultaneously
closes its operations or substantially reduces the number of its employees in
another Virginia locality if the
aggregate amount of incentives to be provided by the Commonwealth in the
incentive package including discretionary grants,
general or nongeneral funds, proceeds from bonds, rights to lease property at
below fair market value, or any other incentives from the Commonwealth is in
excess of $2.5 million in value. However, no vote shall be
required for a project if the only incentives to be provided to a potential
project are nondiscretionary tax credits or
exemptions incentives
available to any qualified taxpayer under existing law.
§ 30-310.1. Review of tax financing projects.
The Commission may, in its discretion, hold meetings to review potential economic development projects presented by private sector businesses or state authorities which would be financed through entitlements to sales taxes or through personal or corporate income tax incentives or modifications. No meetings shall be held under this section regarding projects that are otherwise required to be presented to the Commission pursuant to this chapter. The Commission shall not be required to endorse or recommend any such project but may include recommendations in its annual report prepared pursuant to § 30-312.
§ 30-312. Commission report to General Assembly.
The chairman of the Commission shall report annually by the first day of each General Assembly Regular Session on all endorsed incentive packages for which an offer has been made and publicly announced. Staff identified in § 30-311 shall assist the commission in preparing such report, which shall contain the following information: (i) the industrial sector of the MEI project or other economic development project, (ii) known competitor states, (iii) employment creation and capital investment expectations, (iv) anticipated average annual wage of the new jobs, (v) local and state returns on investment as prepared by the Virginia Economic Development Partnership Authority, (vi) expected time frame for repayment of the incentives to the Commonwealth in the form of direct and indirect general tax revenues, (vii) details of the proposed incentive package, including the breakdown of the components into various uses and an expected timeline for payments, and (viii) draft legislation or amendments to the Appropriation Act that propose financing for the endorsed incentive package through the Virginia Public Building Authority or any other proposed funding or financing mechanisms.
To assist in the preparation of the report, the draft legislation or amendments referred to in clause (viii) shall be submitted to the staffs of the House Committee on Appropriations and the Senate Committee on Finance and Appropriations no later than December 15 each year.