Bill Text: VA HB1262 | 2024 | Regular Session | Prefiled
Bill Title: Local sales tax entitlement; blighted retail district.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced) 2024-02-13 - Left in Finance [HB1262 Detail]
Download: Virginia-2024-HB1262-Prefiled.html
Be it enacted by the General Assembly of Virginia:
1. That the Code of Virginia is amended by adding a section numbered 58.1-608.3:1 as follows:
§58.1-608.3:1. Entitlement to tax revenues from blighted retail district.
A. For purposes of this section:
"Blighted retail district" means a property (i) of at least 20 contiguous acres; (ii) that predominantly consists of blighted properties, as that term is defined in §36-3; (iii) that has been in a blighted or undeveloped condition for more than 10 years; (iv) that is zoned to allow for commercial retail purposes; and (v) that is designated by an eligible county as meeting the requirements of this section.
"Economic development authority" means a local industrial development authority or a local or regional political subdivision, the public purpose of which is to assist in economic development.
"Eligible county" means Stafford County.
"Gap financing" means debt financing to compensate for a shortfall in project funding between the expected development costs of the reconstruction or renovation of a blighted retail district and the debt and equity capital provided by the developer of the project.
"Project" means the reconstruction or renovation of a blighted retail district involving a capital investment by the owner of such facility of at least $15 million.
B. 1. If the requirements of this section are met, a blighted retail district project shall be entitled to an amount equal to the revenues generated by a one percent local sales and use tax on transactions taking place on the premises of the blighted retail district. The entitlement shall be contingent on the locality enacting an ordinance (i) designating a property as meeting the definition of blighted retail district as defined in this section and (ii) designating certain local tax revenues to the blighted retail district project pursuant to subsection C. The entitlement shall also be subject to the conditions set forth in subsection D. The purpose of such entitlement shall be to assist the developer with obtaining gap financing and making payments of principal and interest thereon. The entitlement shall continue until the gap financing is paid in full. Entitled sales and use tax revenues shall be applied solely to payments of principal and interest on the qualified gap financing.
2. On a quarterly basis, the Tax Commissioner shall certify the amount of the entitled sales and use tax revenues to the Comptroller, who shall remit such revenues to the county which the blighted retail district is located. The county shall remit the revenues to the economic development authority. No payments herein shall be made until an agreement exists between the developer of the blighted retail district and the economic development authority.
C. If a locality has adopted the ordinance required by subdivision B 1 to entitle a blighted retail district project to an amount equal to the revenues generated by a one percent local sales and use tax on transactions taking place on the premises of the blighted retail district, the local governing body of the county in which the blighted retail district is located shall direct by ordinance that such revenues shall be applied to the payment of principal and interest on the qualified gap financing.
D. Prior to any entitlement to tax revenues for a blighted retail district pursuant to subsections B and C, the owner of such project shall have a minimum of 70 percent of funding for the project in place through debt or equity, enter into a performance agreement with the economic development authority or political subdivision, and enter into an agreement to pay an access fee. The access fee shall be equivalent to the local sales and use tax revenue generated by and returned to the blighted retail district pursuant to subdivision B 1 and shall be collected by the locality and remitted to the economic development authority on a quarterly basis. The access fee and the sales and use tax entitlement shall be used solely to make payments of principal and interest on the qualified gap financing.
E. In the event that the total amount of sales and use tax entitlement and the access fee exceed any annual debt service on the qualified gap financing, such excess shall be paid to the principal of the loan until the qualified gap financing is paid in full.
F. A blighted retail district that is entitled to and receives revenues pursuant to this section shall not be eligible to receive revenues pursuant to § 58.1-608.3, 58.1-3851.1, 58.1-3851.2, or 58.1-3851.3.
