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HomeMy WebLinkAboutFinal Adoption of Ordinance 1862, amending BMC to provide for Creation of Urban Renewal, Tax Increment_111 Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Brit Fontenot, Economic Development Director SUBJECT: Final Adoption of Ordinance 1862 Amending Chapter 2, Article 6, Division 7 of the Bozeman Municipal Code to Provide for the Creation of Urban Renewal, Tax Increment Financing, and other Districts as Authorized by Title 7, Chapter 15, Parts 42 and 43, MCA. MEETING DATE: June 3, 2013 AGENDA ITEM TYPE: Consent RECOMMENDATION: Finally adopt Ordinance 1862 via the Commission’s Consent agenda. If approved on second reading, Ordinance 1862 will be effective on July 3, 2013. BACKGROUND: At the public hearing held May 20, 2013 the Bozeman City Commission voted 5 – 0 to approve the first reading of Ordinance 1862. On November 19, 2012 the City Commission adopted Ordinance 1844 which became effective on December 19, 2012. Ordinance 1844 established the South Bozeman Technology District with a base year of 2012. Ordinance 1862 represents the next step in the creation of the South Bozeman Technology District. (ATTACHMENT 1) Overtime, the City Commission has created by ordinance several urban renewal and tax increment financing districts throughout the City. The intent of this Ordinance is to provide for the authority of the city commission to create urban renewal, tax increment financing, and other districts pursuant to Title 7, Chapter 15, Parts 42 and 43, MCA and to provide general rules applicable to newly created districts. This Ordinance is not intended to supersede or repeal any ordinances or resolutions regarding existing urban renewal or tax increment financing districts. The City Commission recognizes the Montana Legislature adopted Senate Bill 239, effective July 1, 2013, which consolidated several types of districts authorized to use tax increment financing including technology and industrial districts into what will be called “targeted economic development district[s].” Section 25 of Senate Bill 239 provides that existing technology and industrial districts, such as those created within the City of Bozeman, 69 2 may continue to operate and issue bonds under the laws governing the districts and financial operations of those districts as those laws read on December 31, 2012. UNRESOLVED ISSUES: None identified at this time. ALTERNATIVES: As determined by the Commission. FISCAL EFFECTS: None identified at this time. Attachments: 1. Ordinance 1862. Report prepared on May 21, 2013 70 Ordinance 1862 Page 1 of 7 ORDINANCE NO. 1862 AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA AMENDING CHAPTER 2, ARTICLE 6, DIVISION 7 OF THE BOZEMAN MUNICIPAL CODE TO PROVIDE FOR THE CREATION OF URBAN RENEWAL, TAX INCREMENT FINANCING, AND OTHER DISTRICTS AS AUTHORIZED BY TITLE 7, CHAPTER 15, PARTS 42 AND 43, MCA. NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA: Section 1 Legislative Intent. Overtime, the City Commission has created by ordinance several urban renewal and tax increment financing districts throughout the City. The intent of this Ordinance is to provide for the authority of the city commission to create urban renewal, tax increment financing, and other districts pursuant to Title 7, Chpt. 15, Parts 42 and 43, MCA and to provide general rules applicable to newly created districts. This Ordinance is not intended to supersede or repeal any ordinances or resolutions regarding existing urban renewal or tax increment financing districts. The City Commission recognizes the Montana Legislature adopted Senate Bill 239, effective July 1, 2013, which consolidated several types of districts authorized to use tax increment financing including technology and industrial districts into what will be called “targeted economic development district[s].” Section 25 of Senate Bill 239 provides that existing technology and industrial districts, such as those created within the City of Bozeman, may continue to operate and issue bonds under the laws governing the districts and financial operations of those districts as those laws read on December 31, 2012. Section 2 That the table of contents to Chapter 2, Article 6, Division 7 shall be amended to read as follows: DIVISION 7. – URBAN RENEWAL, TAX INCREMENT FINANCING, AND ECONOMIC DEVELOPMENT INDUSTRIAL DISTRICTS PROGRAM Sec. 2.06.1250. - Definitions. Sec. 2.06.12560. – Urban renewal, tax increment, and economic development Industrial development districts; creation. Sec. 2.06.12670. - Costs which may be paid from tax increments. 71 Ordinance 1862 Page 2 of 7 Sec. 2.06.12780. - Use of tax increments for bond payments. Sec. 2.06.12890. - Contents of ordinance. Sec. 2.06.12901300. - Districts; tTermination of tax increment financing provisions. Sec. 2.06.13010. - Administration. Sec. 2.06.1310. – North Park Industrial District. Sec. 2.06.1320. – Downtown Area Urban Renewal District. Sec. 2.06.1330. – North Seventh Avenue Urban Renewal District. Sec. 2.06.1340. – Northeast Urban Renewal District. Sec. 2.06.1350. – South Bozeman Economic Development District. Secs. 2.06.13520—2.06.1440. - Reserved. Section 3 That Chapter 2, Article 6, Division 7 shall be amended to read as follows: Sec. 2.06.1250. - Definitions. A. The following words, terms and phrases, when used in this division, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning: 1. "Actual taxable value" means the taxable value of taxable property at any time, as calculated from the assessment role last equalized. 2. "Base taxable value" means the actual taxable value of all taxable property within an urban renewal area or industrial district prior to the effective date of a tax increment financing provision. This value may be adjusted as provided in MCA 7-15-4287 or 7- 15-4293. 3. "Incremental taxable value" means the amount, if any, by which the actual taxable value at any time exceeds the base taxable value of all property within a tax increment financing industrial district. 4. "Industrial district" means a tax increment financing industrial district created pursuant to MCA 7-15-4299. 5. "Industrial infrastructure development project" means a project undertaken within or for an industrial district that consists of any or all of the activities authorized by MCA 7-15- 4288. 6. "Tax increment" means the collections realized from extending the tax levies, expressed in mills, of all taxing bodies in which the industrial district or a part thereof is located against the incremental taxable value. 7. "Tax increment provision" means a provision for the segregation and application of tax increments as authorized by MCA 7-15-4282 through 7-15-4292. 8. "Taxes" means all taxes levied by a taxing body against property on an ad valorem basis. 72 Ordinance 1862 Page 3 of 7 Sec. 2.06.12560. – Urban renewal, tax increment, and economic development Industrial development districts; creation. A. The city commission may, from time to time, create by ordinance an urban renewal, tax increment financing, or economic development industrial district pursuant to title 7, chapter 15, parts 42 and 43, MCA, following a public hearing on the proposed district. In order for land to be included in the proposed district, in addition to the requirements of Montana law, it must: 1. Consist of an continuous area with an accurately described boundary; 2. Not be contained within the boundaries of another industrial tax increment financing, district or an urban renewal, or other economic development district with a tax increment provision; 3. Be zoned in accordance for the purposes for which the district will be created and be in compliance with the Bozeman Community Plan for light or heavy industrial use in accordance with the Bozeman area master plan; and 4. Be determined to be in compliance with all other legal requirements. deficient in infrastructure improvements for industrial development. B. The industrial district must have as its purpose only those authorized by law. the development of infrastructure to encourage the growth and retention of secondary, value- added industries. C. Notice of the public hearing on the creation of a proposed industrial district shall be given in accordance with the provisions of MCA 7-15-4215. Sec. 2.06.12670. - Costs which may be paid from tax increments. A. The district’s tax increment received from an industrial district may be used to pay for the following costs incurred by for an authorized urban renewal, tax increment, economic development or authorized industrial infrastructure development project (in that district) as provided by Title 7, Chpt. 15, Parts 42 and 43, MCA and as authorized by ordinance of the city commission. 1. Land acquisition; 2. Demolition and removal of structures; 3. Relocation of occupants; 4. The acquisition, construction and improvement of infrastructure or industrial infrastructure, which includes streets, roads, curbs, gutters, sidewalks, pedestrian malls, alleys, parking lots and off-street parking facilities, sewers, sewer lines, sewage treatment facilities, storm sewers, waterlines, waterways, water treatment facilities, natural gas lines, electrical lines, telecommunication lines, rail lines, rail spurs, bridges, publicly owned buildings, and any public improvements authorized by MCA 7-12-41 through 7-12-45, 7-13-42, 7-13-43, and 7-14-47, and items of personal property to be used in connection with improvements for which the foregoing costs may be incurred; 73 Ordinance 1862 Page 4 of 7 5. Costs incurred in connection with the redevelopment activities allowed under MCA 7- 15-4233; 6. Acquisition of infrastructure-deficient areas or portions thereof; 7. Administrative costs associated with the management of the industrial district; 8. Assemblage of land for development or redevelopment by private enterprises or public agencies including sale, initial leasing, or retention by the municipality itself at its fair value; 9. The compilation and analysis of pertinent information required to adequately determine the infrastructure needs of secondary, value-adding industries in the industrial district; 10. The connection of the industrial district to existing infrastructure outside the industrial district; and 11. The provision of direct assistance, through industrial infrastructure development projects, to secondary, value-adding industries to assist in meeting their infrastructure and land needs within the industrial district. Sec. 2.06.12780. - Use of tax increments for bond payments. The tax increments received may be pledged for the payment of the principal of premiums, if any, and interest on bonds which the city may issue for the purpose of providing funds to pay for costs accrued pursuant to section 2.06.12670. Sec. 2.06.12890. - Contents of ordinance. A. Each ordinance creating an urban renewal, tax increment financing, or economic development industrial district shall: 1. Designate each tax increment financing district by number; 2. Set forth a legal description of and map showing the boundaries of the industrial district; 3. Include a plan that describes the district or tax increment industrial development project and contains provisions for undertaking and implementing the district or project; and 4. Establish the base year for the calculation of tax increment within the industrial district. Sec. 2.06.12901300. - Districts; tTermination of tax increment financing provisions. A. An urban renewal or economic development district’s Ttax increment financing provisions industrial districts will shall terminate pursuant to title 7, chapter 15, parts 42 and 43, MCA. upon the later of: 1. The 15th year following the creation of the industrial district; or 2. The payment or provision for payment in full or discharge of all bonds for which the a tax increment has been pledged and the interest thereon. B. After termination of the tax increment financing provision, all taxes shall be levied upon the actual taxable value of the taxable property in the industrial district and shall be paid into funds of the taxing bodies levying taxes within the industrial district. 74 Ordinance 1862 Page 5 of 7 Sec. 2.06.13010. - Administration. The urban renewal, tax increment financing, or economic development district programs created pursuant to in this division shall be administered by the city commission. The commission shall be advised on matters pertaining to the program by a the tax increment financial industrial district board created pursuant to article 5, division 10 of this chapter and may delegate specific authority to such board pursuant to ordinance or resolution. Sec. 2.06.1310. – North Park Economic Development District. There hereby exists a Mandeville Farm Tax Increment Financing Industrial District created pursuant to Ordinance 1684, hereafter to be known as the North Park Economic Development District. Sec. 2.06.1320. – Downtown Area Urban Renewal District. There hereby exists a Downtown Area Urban Renewal District created pursuant to Ordinance 1409. Sec. 2.06.1330. – North Seventh Avenue Urban Renewal District. There hereby exists a North Seventh Avenue Urban Renewal District created pursuant to Ordinance 1685. Sec. 2.06.1340. – Northeast Urban Renewal District. There hereby exists a Northeast Urban Renewal District created pursuant to Ordinance 1655. Sec. 2.06.1350.- South Bozeman Technology District. There hereby exists a South Bozeman Technology District created pursuant to Ordinance 1844. Secs. 2.06.1350 – 1440. – Reserved. Section 4 Repealer. All provisions of the ordinances of the City of Bozeman in conflict with the provisions of this ordinance are hereby repealed and all other provisions of the ordinances of the City of Bozeman not in conflict with the provisions of this ordinance shall remain in full force and effect. Specifically, nothing herein shall be construed to repeal: Ordinance 1336 creating a Tax Increment Financing Industrial District Program; Ordinance 1685 creating the North Seventh Avenue Urban Renewal District, its urban renewal plan, and its advisory board; Ordinance 1655 creating the Northeast Urban Renewal District, its urban renewal plan, and its advisory board; Ordinance 1409 creating the Downtown Area Urban Renewal 75 Ordinance 1862 Page 6 of 7 District, it urban renewal plan, and its downtown Bozeman Improvement District Board; Ordinance 1684 creating the Mandeville Farm Tax Increment Financing Industrial District; or Ordinance 1844 creating the South Bozeman Technology District. The provisions of the above ordinances pertaining to the powers, duties, and composition of such board shall remain in effect until specifically repealed. Section 5 Savings Provision. This ordinance does not affect the rights and duties that matured, penalties that were incurred or proceedings that were begun before the effective date of this ordinance. All other provisions of the Bozeman Municipal Code not amended by this Ordinance shall remain in full force and effect. Section 6 Severability. That should any sentence, paragraph, subdivision, clause, phrase or section of this ordinance be adjudged or held to be unconstitutional, illegal, or invalid, the same shall not affect the validity of this ordinance as a whole, or any part or provision thereof, other than the part so decided to be invalid, illegal or unconstitutional, and shall not affect the validity of the Bozeman Municipal Code as a whole. Section 7 Codification. This Ordinance shall be codified as indicated in Section 2 - 3. Section 8 Effective Date. This ordinance shall be in full force and effect thirty (30) days after final adoption. 76 Ordinance 1862 Page 7 of 7 PROVISIONALLY ADOPTED by the City Commission of the City of Bozeman, Montana, on first reading at a regular session held on the 20th day of May, 2013. ____________________________________ SEAN A. BECKER Mayor ATTEST: ______________________________ STACY ULMEN, CMC City Clerk FINALLY PASSED, ADOPTED AND APPROVED by the City Commission of the City of Bozeman, Montana on second reading at a regular session thereof held on the 3rd day of June, 2013. The effective date of this ordinance is July 3rd, 2013. _________________________________ SEAN A. BECKER Mayor ATTEST: _______________________________ STACY ULMEN, CMC City Clerk APPROVED AS TO FORM: _________________________________ GREG SULLIVAN City Attorney 77