Vermont § 1894 - Power and life of district

§ 1894. Power and life of district

• (a) Incurring indebtedness. (1) A municipality approved under 32 V.S.A. § 5404a(h) may incur indebtedness against revenues of the tax increment financing district at
  any time during a period of up to five years following the creation of the district.
  If no debt is incurred during this five-year period, the district shall terminate,
  unless the Vermont Economic Progress Council grants an extension to a municipality
  pursuant to subsection (d) of this section. However, if any indebtedness is incurred
  within the first five years after the creation of the district, then the district
  has a total of ten years after the creation of the district to incur any additional
  debt. (2) Any indebtedness incurred under subdivision (1) of this subsection may be retired
  over any period authorized by the legislative body of the municipality. (3) The district shall continue until the date and hour the indebtedness is retired or,
  if no debt is incurred, five years following the creation of the district. (b) Use of the education property tax increment. For only debt incurred within the period permitted under subdivision (a)(1) of this
  section after creation of the district, and related costs, up to 70 percent of the
  education tax increment may be retained for up to 20 years, beginning with the education
  tax increment generated the year in which the first debt incurred for improvements
  financed in whole or in part with incremental education property tax revenue. Upon
  incurring the first debt, a municipality shall notify the Department of Taxes and
  the Vermont Economic Progress Council of the beginning of the 20-year retention period
  of education tax increment. (c) Use of the municipal property tax increment. For only debt incurred within the period permitted under subdivision (a)(1) of this
  section after creation of the district, and related costs, not less than 85 percent
  of the municipal tax increment shall be retained to service the debt, beginning the
  first year in which debt is incurred, pursuant to subsection (b) of this section. (d) Approval of tax increment financing plan. The Vermont Economic Progress Council shall approve a municipality’s tax increment
  financing plan prior to a public vote to pledge the credit of that municipality under
  subsection (h) of this section. The tax increment financing plan shall include all
  information related to the proposed financing necessary for approval by the Council
  and to assure its viability and consistency with the tax increment financing district
  plan approved by the Council pursuant to 32 V.S.A. § 5404a(h). The tax increment financing plan may be submitted to and approved by the Council
  concurrently with the tax increment financing district plan. If no indebtedness is
  incurred within five years after the creation of the district, the municipality may
  submit an updated executive summary of the tax increment financing district plan and
  an updated tax increment financing plan to the Council to obtain approval for a five-year
  extension of the period to incur indebtedness; provided, however, that the updated
  plan is submitted prior to the five-year termination date of the district. The Council
  shall review the updated tax increment financing plan to determine whether the plan
  has continued viability and consistency with the approved tax increment financing
  plan. Upon approval of the updated tax increment financing plan, the Council shall
  grant an extension of the period to incur indebtedness of no more than five years.
  The submission of an updated tax increment financing plan as provided in this subsection
  shall operate as a stay of the termination of the district until the Council has determined
  whether to approve the plan. (e) Proportionality. The municipal legislative body may commit the State education and municipal tax increments
  received from properties contained within the tax increment financing district for
  the financing of improvements and for related costs only in the same proportion by
  which the improvement or related costs serve the district, as determined by the Council
  when approved in accordance with 32 V.S.A. § 5404a(h), and in the case of an improvement that does not reasonably lend itself to a proportionality
  formula, the Council shall apply a rough proportionality and rational nexus test. (f) Required share of increment. If any tax increment utilization is approved pursuant to 32 V.S.A. § 5404a(h), not more than 70 percent of the State property tax increment and not less than 85
  percent of the municipal tax increment may be approved by the Council or used by the
  municipality to service this debt. (g) Adjustment of percentage. During the tenth year following the creation of the tax increment financing district,
  the municipality shall submit an updated tax increment financing plan to the Council
  which shall include adjustments and updates of appropriate data and information sufficient
  for the Council to determine, based on tax increment financing debt actually incurred
  and the history of increment generated during the first ten years, whether the percentages
  approved under subsection (f) of this section should be continued or adjusted to a
  lower percentage to be retained for the remaining duration of the retention period
  and still provide sufficient municipal and education increment to service the remaining
  debt. (h) Vote required on each instance of debt. Notwithstanding any provision of any municipal charter, each instance of borrowing
  to finance or otherwise pay for tax increment financing district improvements shall
  occur only after the legal voters of the municipality, by a majority vote of all voters
  present and voting on the question at a special or annual municipal meeting duly warned
  for the purpose, authorize the legislative body to pledge the credit of the municipality,
  borrow, or otherwise secure the debt for the specific purposes so warned; provided
  that each request to pledge the credit of the municipality for the purposes of financing
  tax increment financing district improvements shall include the new amount of debt
  proposed to be incurred and the total outstanding tax increment financing debt approved
  to date. (i) Notice to voters. A municipal legislative body shall provide information to the public prior to the
  public vote required under subsection (h) of this section. This information shall
  include the amount and types of debt and related costs to be incurred, including principal,
  interest, and fees, terms of the debt, the improvements to be financed, the expected
  development to occur because of the improvements, and notice to the voters that if
  the tax increment received by the municipality from any property tax source is insufficient
  to pay the principal and interest on the debt in any year, for whatever reason, including
  a decrease in property value or repeal of a State property tax source, unless determined
  otherwise at the time of such repeal, the municipality shall remain liable for the
  full payment of the principal and interest for the term of indebtedness. If interfund
  loans within the municipality are used, the information must also include documentation
  of the terms and conditions of such loan. If interfund loans within the municipality
  are used as the method of financing, no interest shall be charged. (Added 1985, No. 87; amended 1987, No. 204 (Adj. Sess.), § 1; 2005, No. 184 (Adj. Sess.), § 2c; 2007, No. 190 (Adj. Sess.), § 56, eff. June 6, 2008; 2011, No. 45, § 15, eff. May 24, 2011; 2013, No. 80, § 4; 2013, No. 174 (Adj. Sess.), §§ 8, 9, eff. June 4, 2014; 2017, No. 69, § J.3. eff. June 28, 2017.)