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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 In addition to the required
review of certain incentive packages pursuant to § 30-310, the ]
Commission may, in its discretion, [ hold meetings to also
] 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.