Tax Increment Financing Update on HB 1189

Summary

A presentation, Tax Increment Financing Update on HB 1189, dated November 16, 2021. It explains that tax increment financing (TIF) uses property taxes generated from the increased assessed valuation of a site after private development, with an example comparing an undeveloped Parcel A at an assessed valuation of $6 million ($28,500 in local property taxes) and a developed Parcel B at $121 million ($574,750), each at a 4.75 levy rate per $1,000. It states that the 2021 Legislature approved HB 1189 authorizing tax increment financing and lists the project analysis, public hearings and outreach required. It describes current TIF projects at the Port of Pasco, including the Reimann Industrial Center, and the Port of Vancouver.

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Issuer: Congressional materials
Document type: 2021 11 16 A29281 D236540 Candice Bock Awc Tax Increment Financing Ppt
Date: 2021-11-16
Case: 2021 11 16 A29281 D236540 Candice Bock Awc Tax Increment Financing Ppt

Cite this document

“Tax Increment Financing Update on HB 1189.” Original at app.leg.wa.gov, dated 2021-11-16. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2021-11-16-2021-11-16-a29281-d236540-candice-bock-awc-tax-increment-financing-ppt/, SHA-256 d5beef033b9e9761182570cdcefc4564de641a1d4f3d08c33b6a285a0065bb43.

Full text

Tax Increment Financing
        Update on HB 1189
                        What is TIF?
Generally,TIF captures property taxes generated from the increased
assessed valuation on the site that results from private development
following infrastructure investment.


Parcel A: Undeveloped Site               Parcel B: Developed Site
Assessed valuation of $6 million         Assessed valuation of $121 million
x 4.75 levy rate per $1,000 AV
= $28,500 in local property taxes paid   x 4.75 levy rate per $1,000 AV
                                         = $574,750 in local property taxes
                                         paid
History
Previous efforts to authorize tax increment financing struck down by voters and the courts
    • Washington State Constitution requires state property tax to be allocated to the common school
      fund.
    • Legislature approved the Community Development Refinancing Act in 1982
        • Overturned for two reasons: 1) gifting of public funds and 2) uniform property tax rate
Since then, the Legislature authorized several versions of “TIF lite” that relied on a credit
against the state sales tax.
    • LIFT, LRF - Fell out of favor because these programs rely on investments from the state general
      fund
2021 Legislature approved HB 1189, authorizing tax increment financing.
    • Constitutional, carefully crafted: school levy exempted, uniform property tax levies, funds used for
      public benefit
Overview of HB 1189
• Economic development tool available to cities, counties and ports
• Designed for a specific project/site where there is certainty that the infrastructure will
  result in development (not “build infrastructure, development will follow”)
• Must be able to demonstrate that the infrastructure will result in private development,
  which will increase the assessed valuation of the project/site.
• “But for” test: private development would not otherwise occur within the reasonably
  foreseeable future but for an investment in infrastructure
Overview of HB 1189
Eligible Infrastructure improvements owned by a           Eligible expenditures for any of the following
local government within or outside of and serving         purposes:
the increment area that include:                          ▪ Purchasing, rehabilitating, retrofitting for energy efficiency,
▪ Street and road construction;                              and constructing housing for the purpose of creating or
▪ Water and sewer system construction and                    preserving long-term affordable housing;
   improvements;                                          ▪ Purchasing, rehabilitating, retrofitting for energy efficiency,
▪ Sidewalks and other non-motorized transportation           and constructing childcare facilities serving children and
   improvements and streetlights;                            youth that are low-income, homeless, or in foster care;
▪ Parking, terminal, and dock facilities;                    Providing maintenance and security for the public
▪ Park and ride facilities or other transit facilities;      improvements; or
▪ Park and community facilities and recreational areas;   ▪ Historic preservation activities authorized under RCW
▪ Stormwater and drainage management systems;                35.21.395.
▪ Electric, broadband, or rail service;
▪ Mitigation of brownfields; or
Project Analysis
• Must prepare project analysis. Highlights:
   • A description of the expected private development within
      the increment area, including a comparison of scenarios
      with and without proposed public improvements.
   • An assessment of any impacts and necessary mitigation
      to address impacts on the following:
         • Affordable and low-income housing
         • Local business community
         • Local school districts
         • Local fire service
              • If 20% of the assessed valuation in fire district is
                within the increment level or there is an
                increase in level of service to increment area,
                must negotiate a mitigation plan.
           Hold two public hearings exclusively on the
           project

           Submit a project analysis to the state office of
           the treasurer for review
Required
Outreach   Publish notice in public newspaper



           Notice to county treasurer, county assessor, and
           governing body of each taxing district where
           the increment area is located
Current TIF projects
• Port of Pasco
    • Holding public briefings (October & November)
    • Submitted project analysis to Treasurer for review
    • Project: Reimann Industrial Center (150 acres)
        • Darigold facility ($500 million investment; 200 new job & 350 farm jobs)
        • $20 million in infrastructure needs (water, sewer, transportation, other utilities)
        • $8.2 million generated from TIF
Current TIF
projects
• Port of Vancouver
    • Early stages – hired a
      consultant to develop
      project analysis and
      meeting with
      Treasurer’s office
    • TIF would provide
      critical portion of
      funding, but not all
      funding

File and source

File: 2021-11-16_a29281_d236540_candice-bock-awc-tax-increment-financing-ppt.pdf
Size: 577,323 bytes
SHA-256: d5beef033b9e9761182570cdcefc4564de641a1d4f3d08c33b6a285a0065bb43
Our copy: 2021-11-16_a29281_d236540_candice-bock-awc-tax-increment-financing-ppt.pdf
Original: app.leg.wa.gov