TIF legislation update
I have two tax increment financing (TIF) bills I am trying to pass before the Council term ends in August. Both bills are up for the 2nd of three readings tonight. I am expecting that they should be approved on 3rd reading on August 6, 2019. Here's what the two bills do:
BL2019-1645: This bill would amend the TIF provisions of 8 existing redevelopment plans. The key amendments would be: (1) a new requirement to have a periodic (every 7 to 10 years) reassessment by MDHA and the Metro Council of the impact and goals for TIF loan investments in each redevelopment area; (2) new language that would let the Council initiate TIF plan amendments in the future; and (3) a new requirement that the standard amount of tax increment to be used on new loans will be 75%.
BL2019-1630: This bill would create certain requirements for any new or amended TIF districts passed in the future. The requirements would match the changes to existing TIF plans made in BL2019-1645. This is to make sure that the terms of any future new TIF districts will match the changes we make to existing districts now.
For more information about the path that led to this point, here's a timeline:
April 2016: The Council passed a first round of TIF legislation described here. This reform created an annual TIF reporting requirement. It also required Metro to hold back money from new property tax revenue to pay its own bond debt instead of using all of the revenue to pay development loans. It also required that TIF property taxes be returned fully to Metro after the first development loan is paid. This was meant to address the situation where, for example, the AT&T building's taxes are still being used to pay other development loans some 30 years after construction was complete.
August 2018: Legislation to create a Donelson Transit-Oriented Development District failed in the Council. To many, it felt like the city's approach to creating new TIF districts needed to be updated before moving forward.
September 2018: I introduced three pieces of legislation to start the conversation about updating the city's approach to TIF districts. Here's a brief description of this 2018 proposed legislation.
October 2018: MDHA, the Mayor's Office, and I agreed that all efforts to make new TIF loans or create new TIF districts would be frozen until June 30, 2019, while a TIF Study Committee did its work. More info about that here.
May 2019: The TIF Study Committee releases its unanimous report. More here. The committee gave a presentation to the Council about its findings and recommendations.
May 2019: To implement the committee's recommendations, I filed four pieces of legislation.
June 2019: Two of these bills (-1644 and -1613) passed and became law.
July 16, 2019: The other two bills (-1630 and -1645) are set for 2nd of three readings. Here is the handout I have provided to Council members for this evening's meeting.
August 6, 2019: Hopefully, this is when the two remaining bills are approved by the Council on 3rd and final reading.
Let me know any thoughts or questions you have. Bob