HB458: MEI Project Approval Commission; incentives requiring review.
HOUSE BILL NO. 458
Be it enacted by the General Assembly of Virginia:
1. That §§ 30-309 and 30-310 of the Code of Virginia are amended and reenacted 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 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 tax credits or exemptions generally
available to a potential project 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.
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.
§ 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 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 tax
credits or exemptions generally available to a potential project 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. 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 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 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.
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 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 tax
credits or exemptions generally available to a potential project 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 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
available to any qualified taxpayer under existing law.