Strike Three

Editor's Note:  It is most interesting to watch the Town of Marlinton in action.  The town fathers and mothers tend to turn to outside help for their problems.  Nothing is different this time either.  The Great Greenbrier Valley Economic Development Corporation rides in like the calvary or more appropriately, the Keystone Cops to rescue the town.

They came to the rescue of the town with the Edray Industrial Park which stands empty with no tenant and no prospect of a tenant.  They came to the rescue with the Floodwall Protection Project for Marlinton.  The problem is that there is no floodwall protection project and in fact it amounts to nothing more that a poster on the town office wall.

And now:  strike three.  The Greenbrier Valley Economic Development Corporation rides to the rescue again.  They propose to rebuild the town center.  We shall see; just don't get your hopes too high.  They admit that they don't have a comprehensive plan.

An Interview With a Pocahontas Mother Whose Children Were Stolen by CPS

 

 

The Problems with Tax Incremental Financing

30

Jun
2013

The Problems with Tax Incremental Financing (TIF)

by Legate Damar

The state of Kentucky’s sluggish economy has state lawmakers concerned about tax revenues for the next two years as they begin preparing the state budget.

Speaking to legislators Thursday, State Budget Director Jane Driskell painted a stark financial picture for Kentucky with revenue declining three out of the last four months.

"According to Driskell some of Kentucky’s major state indicators, don't reflect a robust economic recovery to date. Employment and income growth are lower than you would expect, and it's been a very flat recovery for Kentucky. There's still a lot of caution with businesses and consumers (Sluggish economy raises concerns among Kentucky lawmakers, 2013).”

As a result, the state has taken in about one percent less in sales tax revenue through May compared to last year while the surrounding states have seen an increase, said Greg Harkenrider, deputy executive director of financial analysis for Kentucky (Sluggish economy raises concerns among Kentucky lawmakers, 2013).

The slow economic growth in Kentucky may spur interest in the economic stimulus tool known as Tax Increment Financing (TIF). Tax increment financing, or TIF, uses anticipated future gains in taxes to support current improvements that are expected to generate increased revenue (TIF districts spark growth, projects throughout NKY, 2013).

According to the Enquirer, the use of TIF’s to spur new projects and redevelopment may become a catalyst for economic growth in Northern Kentucky. TIF has been used extensively in some parts of the country, but has been only sparingly utilized in Kentucky.

Jim Parsons, an attorney with Taft Stettinius and Hollister who has assisted on TIF projects throughout the state, said the development incentive is still fairly new in Kentucky.

“Kentucky didn’t really have a very active TIF statute until 2000 and that was created for some more specialized projects,” Parsons said. “In 2007, the current TIF statute was adopted and that is the one we are operating under today. It has opened up the possibility of using the incremental increase in taxes to support development projects within designated areas (TIF districts spark growth, projects throughout NKY, 2013).”

Some areas in Kentucky that have implemented TIF’s are:

• Boone County has designated three TIF districts, most recently for a small area near Mount Zion Road where a public market is nearing completion.
• Covington recently designated a large portion of the city as a TIF district.
• A significant project in Bowling Green that involves about a four-or-five-hundred-acre redevelopment of downtown.
• Dayton with the Manhattan Harbour mixed-use development in front of the city’s flood wall.
• Newport with the Ovation project where Corporex, has proposed a $1 billion residential and commercial development on the site
• In Louisville the Marriott Hotel, KFC Yum Arena, Churchill Downs expansion, and the University of Louisville is also using TIF to build parts of its research campus, as direct state appropriations for that type of project becomes less likely because of budget constraints.
• There are also several projects in downtown Lexington (TIF districts spark growth, projects throughout NKY, 2013).

Problems with TIF’s

TIF began in the state of California in 1952, but the state has currently discontinued the use of them due to a couple of lawsuits. As of 2008, California had over four hundred TIF districts with an aggregate of over $10 billion per year in revenues, over $28 billion of long-term debt, and over $674 billion of assessed land valuation. Thousands of TIF districts still currently operate nationwide in the US in small and mid-sized cities. According to Boone County Administrator Jeff Earlywine, when properly utilized, TIF districts can effectively promote growth.

“It is absolutely an economic development tool that can be used to enhance or make a project come to fruition that otherwise might not happen,” Earlywine said. “It’s also a policy issue for the elected officials in Northern Kentucky who are going to have to help determine when, where and how often it is effective and appropriate to utilize (TIF districts spark growth, projects throughout NKY, 2013).”

Earlywine’s advice for evaluating the appropriateness of TIF’s may be an understatement given the fact that in California where TIF districts originated, they have become monstrous, unaccountable bureaucracies and have attracted much criticism. Some question whether TIF districts actually serve their resident populations. An organization called Municipal Officials for Redevelopment Reform (MORR) holds regular conferences on redevelopment abuse and as far back as 2002 published “Redevelopment: The unknown government“ in response to TIF abuses.

Another Unaccountable Government Agency?

According to the report, California state law allows a city council to create a redevelopment agency to administer one or more "project areas" within its boundaries. An area may be small, or it can encompass the entire city. This is similar to Kentucky’s law whereby the statute was enacted at the state level, but only city and county officials have the authority to designate a TIF district (TIF districts spark growth, projects throughout NKY, 2013).

Similar to the problems with Kentucky’s special districts, these project areas are governed by a redevelopment agency with its own staff and governing board, appointed by a city council. Legally a redevelopment agency is an entirely separate government authority, with its own revenue, budget, staff and expanded powers to issue debt and condemn private property. Out of California's 475 cities, 356 have active redevelopment agencies. No vote of the residents affected was required. NO review by the Local Agency Formation Commission (LAFCO) was done. (Only 20 of 58 counties have also created redevelopment agencies, and with unincorporated areas shrinking, counties constitute barely 4% of all redevelopment expenditures.) (Redevelopment: The unknown government, 2002).

Broad Powers

In California all a city needs to do to create or expand a redevelopment area is declare it "blighted, which is easily done. State law is so vague that almost anything has been designated as "blight." Parkland, new residential areas, professional baseball stadiums, oil fields, shopping centers, orange groves, open desert and dry riverbeds have all been designated as "blight" for redevelopment purposes (Redevelopment: The unknown government, 2002).

"Cities adopted very loose and very creative definitions of blight," writes syndicated Sacramento Bee columnist Dan Walters, author and long-time state policy analyst. "Often, vacant, never-developed land is branded as blighted to allow its inclusion in a redevelopment zone."

A city park in Lancaster has been declared blighted to justify paving over 19 acres of parkland and axing 100 trees for a new Costco. ("Landcaster Ready to Pave Parkland and Put Up a Costco," Los Angeles Times, June 24, 2001.) (Redevelopment: The unknown government, 2002).

To eliminate alleged blight, a redevelopment agency, once created, has four extraordinary powers held by no other government authority in California: 

1) Tax Increment: A redevelopment agency has the exclusive use of all increases in property tax revenues ("tax increment") generated in its designated project areas.

2) Bonded Debt: An agency has the power to sell bonds secured against future tax increment, and may do so without voter approval.

3) Business Subsidies: An agency has the power to give public money directly to developers and other private businesses in the form of cash grants, tax rebates, free land or public improvements.

4) Eminent Domain: An agency has the expanded powers to condemn private property, not just for public use, but to transfer to other private owners.

These four powers represent an enormous expansion of government intrusion into our traditional system of private property and free enterprise. Let us carefully consider the costs of this power and if it has done anything to eliminate real blight (Redevelopment: The unknown government, 2002).

Vacuum for our Tax Dollars

There are a couple of different models that can be used to generate revenue in a TIF district. One is use of the increments, which is based on the increased value of the property before and after the improvements, Earlywine said. Another is the wage assessment up to 2 percent above and beyond the locality’s normal payroll tax rate.

“The wage assessment will probably be the source of revenue that we look at more than any other in Boone County because our real estate tax rate is low, so it doesn’t generate as much additional tax revenue,” he said (TIF districts spark growth, projects throughout NKY, 2013).

If the increments model is used, once a redevelopment project area is created, all property tax increment within it goes directly to the agency. This means all increases in property tax revenues are diverted to the redevelopment agency or to pay down the bond debt and away from the cities, counties and school districts that would normally receive them (Redevelopment: The unknown government, 2002).

The bi-partisan Commission on Local Governance for the 21st Century, chaired by San Diego Mayor Susan Golding, released its report, Growth Within Bounds (State of California, Sacramento, 2000). The commission specifically cited the negative impact of tax increment financing, noting that "this financing tool has steadily eaten into local property tax allocations that could otherwise be used for general governmental services, such as police, fire protection and parks" (page 111).

In 2001, this revenue diversion was just over $2.1 billion statewide in California. This means over 10% of all property taxes was diverted from public services to redevelopment schemes. Even with modest inflation, the percent taken has roughly doubled every 15 years (Redevelopment: The unknown government, 2002).

Corporate Welfare

The process arguably leads to favoritism for politically connected developers, implementing lawyers, economic development officials and others involved in the process. Redevelopment subsidies are often not distributed evenly: Favored developers, NFL team owners, giant discount stores, hotels, and auto dealers receive the most money. Small business owners must face giant new competitors funded by their own taxes. Redevelopment in California has become a massive wealth-transfer machine and corporate welfare. Cash and land go to powerful developers and corporate retailers, while small business owners and taxpayers must foot the bill.

Redevelopment's extreme bias in favor of retail and against industry has created low wage jobs at the expense of skilled workers. It subsidizes big box stores selling largely imported goods at the expense of American manufacturing jobs (Redevelopment: The unknown government, 2002). A recent example of this bias was the request by the Kenton County Fiscal Court to rezone 28 acres near the intersection of Ky. 17 and Taylor Mill Road from single-family residential to NSC, or Neighborhood Shopping Center zone for a Walmart. Fortunately for the city of Independence it was later withdrawn due to opposition by hundreds of residents (Kenton County drops disputed rezoning, 2013).

This costly distortion of the free enterprise system is justified as the only way to boost local sales taxes. Yet, if new developments are justified by market demand, they will be built anyway. If not, they will fail, regardless of the subsidies. The catalyst for TIF’s is motivated by a belief that tax subsidies to selected private businesses can stimulate the local economy. It assumes that the free enterprise alone is inadequate. It presumes that government planners can allocate resources more efficiently than can the free market, which history has demonstrated as patently absurd (Redevelopment: The unknown government, 2002).

Evidence in Support of TIF’s?

Is there any evidence that redevelopment has promoted economic development in blighted areas? The first systematic statewide analysis of redevelopment agencies was published by the prestigious Public Policy Institute of California in 1998, titled “Subsidizing redevelopment in California.” Veteran researcher Michael Dardia compared 114 different redevelopment project areas to similar neighborhoods outside of redevelopment areas, from 1983 to 1996.

The report concluded that redevelopment activities were not responsible for any net economic growth or increase in property taxes, and that they were a net drain on public resources. As the report's title suggests, Dardia concluded that redevelopment was being subsidized by taxes being drained from schools, the state, and special districts (Redevelopment: The unknown government, 2002). As greedy as our special districts have been for our tax dollars, wouldn’t it be amusing to see them compete with a Redevelopment Agency (Nickel and Dimed by our Special Districts, 2013)?

Similarly, the Los Angeles Times (January 30, 2000) published a detailed study showing the North Hollywood Project Area's 20-year, $117 million effort had produced no net benefits for the community. The Times compared North Hollywood to ten other socio-economic comparable areas in Los Angeles that had no other redevelopment, including Van Nuys, mar Vista and Venice. "Although they received no redevelopment money, most of the comparison areas registered improvements in income and poverty rates equal to or better than the heavily funded North Hollywood Project area," the report concluded (Redevelopment: The unknown government, 2002).

Census data confirm the conclusions of the Public Policy Institute and Los Angeles Times. A 10-year comparison (1979-1989) of redevelopment and non-redevelopment cities shows no net per-capita income gains due to redevelopment activity. Pairing similar cities by area, size, and income, shows those without redevelopment posted greater gains in living standard than those with redevelopment (Redevelopment: The unknown government, 2002).

Redevelopment apologists and lobbyists counter with pretty pictures of new stadiums and shopping malls. Surely, with all the money spent, some nice new buildings have been completed. But their evidence of success is purely anecdotal. The evidence of failure is in the numbers. All objective comparison studies have shown that aggregate statewide redevelopment activity does NOT generate economic development and does NOT eliminate blight (Redevelopment: The unknown government, 2002).

Eminent Domain Abuses

"Nor shall private property be taken for public use without just compensation." Thus the Bill of Rights specifies the only purpose for eminent domain: "public use."

Since then, government has used eminent domain to acquire land for public use. Roads, schools, parks, military bases, and police stations were essential public facilities that took priority over individual property rights. Private real estate transactions, on the other hand, were always voluntary agreements between individuals. Redevelopment has changed all that. Under redevelopment, "public use" now includes privately owned shopping centers, auto malls, and movie theaters. "Public use" is now anything a favored developer wants to do with another individual's land. Eminent domain is used to effect what once were purely private transactions (Redevelopment: The unknown government, 2002). The designation as blighted, essential to most TIF implementation, can allow governmental condemnation of property through eminent domain laws. The famous Kelo v. City of New London United States Supreme Court case, where homes were condemned for a private development, was about actions within a TIF district.

Covington Assistant City Manager Larisa Sims said the city of Covington completed a center city action plan that helped identify the areas that had redevelopment potential.

“We’ve been trying to promote more redevelopment in the core,” Sims said. “We have a lot of building stock that is in need of rehabilitation and renovation. As a way to help facilitate redevelopment, we thought a TIF district would be a good source of revenue.”

The Covington TIF district will capture 80 percent of the local incremental increases in payroll taxes and property taxes and Kenton County has agreed to provide a 60 percent contribution of its increases. The district stretches from the Ohio River south to 13th Street, and from Interstate 75 to the Licking River, with the exception of MainStrasse and the Licking Riverside neighborhoods, which already have significant development. Projects that could benefit from the establishment of the TIF district include the $25 million Hotel Covington, the $81 million development of Gateway Community College Urban Campus, and the $35 million Northern Kentucky Convention Center expansion (TIF districts spark growth, projects throughout NKY, 2013).

“We also have some larger structures that will be undergoing renovation for mixed use... and there is some interest to use TIF as part of their funding stack,” Sims said. “So it is already spurring some interest.”

This may explain why Covington Mayor Sherry Carran is such an ardent opponent of language safeguarding private property rights and the removal of regulatory barriers included in the Goals & Objectives of the Areawide Comprehensive Plan for Kenton County (Stand up for your Private Property Rights!, 2013). It would serve as a major impediment for the city of Covington to impose eminent domain on the property owners in their city if that language were included in the Comprehensive Plan. It would be a real shame if it precluded city officials from violating anyone’s private property rights.

The lack of evidence supporting TIF’s, private property violations, corporate welfare, and the eminent domain abuses should come as no surprise to libertarians or Tea Party members. Everywhere in the world, those countries that respect property rights and free consumer choice outperform those that put economic decisions in the hands of bureaucrats. It is ironic that even as we encourage former Soviet bloc governments to free their economies, we increasingly entangle our local and state governments in economic policies that have repeatedly failed elsewhere (Redevelopment: The unknown government, 2002). If you think this can only happen in a liberal state like California you are sadly mistaken. I’m sure TIF legislation started out innocently in California with a very noble purpose but evolved into a government money-making scam, rife with corporate influence, greed, and violations of private property rights. Given the nature of government to grow and the greed inherent in corporations I’m confident it will ultimately happen in Kentucky. This is why we need to stand and fight.

Tax Increment Financing

West Virginia Code 7-11B-24 - Tax increment financing obligations -- special fund for repayment

West Virginia Code > Chapter 7 > Article 11B > § 7-11B-24 - Tax increment financing obligations -- special fund for repayment Current as of: 2010 Check for updates (a) Tax increment financing obligations issued by a county commission or municipality are payable out of the tax increment financing fund created for each development and redevelopment district created under this article. (b) The county commission or municipality issuing the tax increment financing obligations shall irrevocably pledge all or part of the tax increment financing fund to the payment of the obligations. The tax increment financing fund, or the designated part thereof, may thereafter be used only for the payment of the obligations and their interest until they have been fully paid. (c) A holder of the tax increment financing obligations shall have a lien against the tax increment financing fund for payment of the obligations and interest on them and may bring suit to enforce the lien. (d) A county commission or municipality may issue and secure additional bonds payableout of the tax increment fund created for each development or redevelopment district created under this article, which bonds may rank on a parity with, or be subordinate or superior to, other bonds issued by the county commission or municipality from each such tax increment fund. West Virginia Code 7-11B-25 - Tax increment financing obligations - Tax exemption West Virginia Code > Chapter 7 > Article 11B > § 7-11B-25 - Tax increment financing obligations - Tax exemption Current as of: 2010 Check for updates Tax increment financing obligations issued under this article, together with the interest and income therefrom, shall be exempt from all state income taxes, whether imposed on individuals, corporations or other persons, from state business franchise taxes and from ad valorem property taxes. West Virginia Code 7-11B-26 - Excess funds West Virginia Code > Chapter 7 > Article 11B > § 7-11B-26 - Excess funds Current as of: 2010 Check for updates (a) Moneys received in the tax increment financing fund of the development or redevelopment district in excess of amounts needed to pay project costs and debt service may be used by the county commission or municipality that created the development or redevelopment district for other projects within the district or distributed to the levying bodies as provided in this article.(b) Upon termination of the district, all amounts in the tax increment financing fund of the district shall be paid over to the levying bodies in the same proportion that ad valoremproperty taxes on the base value was paid over to those levying bodies for the tax year in which the district is terminated. West Virginia Code > Chapter 7 > Article 12 > § 7-12-1 - Establishment authorized; name; exceptions Current as of: 2010 Check for updates Except as hereinafter provided, the governing body of every municipality and the county commission of every county is hereby authorized to create and establish a public agency to be known as a development authority. The name of the authority shall contain the words "development authority," together with the designation of the municipality or the county within which such authority is intended to operate. Nothing in this article contained, however, shall be construed as permitting the governing body of any municipality or county commission of any county in which there exists, on the date on which this article becomes effective, one or more public development authorities, corporations or commissions, organized and existing pursuant to an act or acts of the Legislature, either local or general, and performing substantially the same or similar functions as the development authorities herein authorized, to create and establish such a development authority until such time as all such other public development authorities, corporations and commissions cease operations in such municipality or county: Provided, That nothing herein shall be construed to prohibit the creation and establishment of a municipal development authority when a county or regional development authority exists, and any municipal development authority shall have the exclusive right to exercise its powers granted pursuant to this article within the boundaries of the municipality. West Virginia Code 7-12-2 - Purposes West Virginia Code > Chapter 7 > Article 12 > § 7-12-2 - Purposes Current as of: 2010 Check for updates The purposes for which the authority is created are to promote, develop and advance the business prosperity and economic welfare of the municipality or county for which it is created, its citizens and its industrial complex; to encourage and assist through loans, investments or other business transactions in the locating of new business and industrywithin the municipality or county and to rehabilitate and assist existing businesses and industries therein; to stimulate and promote the expansion of all kinds of business and industrial activity which will tend to advance business and industrial development and maintain the economic stability of the municipality or county, provide maximum opportunities for employment, encourage thrift, and improve the standard of living of the citizens of the county; to cooperate and act in conjunction with other organizations, federal, state or local, in the promotion and advancement of industrial, commercial, agricultural, and recreational developments within the municipality or county; and to furnish money and credit, land and industrial sites, technical assistance and such other aid as may be deemed requisite to approved and deserving applicants for the promotion, development and conduct of all kinds of business activity within the municipality or county. West Virginia Code 7-12-3 - Management and control of county authority vested in board; appointment and terms of members; vacancies; removal of members West Virginia Code > Chapter 7 > Article 12 > § 7-12-3 - Management and control of county authority vested in board; appointment and terms of members; vacancies; removal of members Current as of: 2010 Check for updates The management and control of a county authority, its property, operations, business and affairs shall be lodged in a board of not fewer than twelve nor more than twenty-one persons who shall be appointed by the county commission and be known as members of the authority. The county commission shall appoint one member to represent the county commission on the board and, for each municipality located within the county, the county commission shall appoint one member to represent the municipality. The city and town council of each municipality located within the county shall submit to the county commission the names of three persons, one of whom the county commission shall appoint to be the municipality's representative on the board. Other members of the board shall be appointed by the county commission and shall include representatives of business, industry and labor. The members of the authority first appointed shall serve respectively for terms of one year, two years and three years, divided equally or as nearly equal as possible between these terms. Thereafter, members shall be appointed for terms of three years each. A member may be reappointed for such additional term or terms as the county commission may deem proper. If a member resigns, is removed or for any other reason his membership terminates during his term of office, a successor shall be appointed by the county commission to fill out the remainder of his term. Members in office at the expiration of their respective terms shall continue to serve until their successors have been appointed and have qualified. The county commission may at any time remove any member of the board by an order duly entered of record and may appoint a successor member for any member so removed.Other persons, firms, unincorporated associations, and corporations, who reside, maintain offices, or have economic interests, as the case may be, in the county, shall be eligible to participate in and request the county commission to appoint members to the development authority as the said authority shall by its bylaws provide. West Virginia Code > Chapter 7 > Article 12 > § 7-12-3a - Management and control of municipal authority vested in board; appointment and terms of members; vacancies; removal of members Current as of: 2010 Check for updates The management and control of a municipal authority, its property, operations, business and affairs shall be lodged in a board of not fewer than twelve nor more than twenty-one persons who shall be appointed by the governing body and be known as members of the authority. One member of the authority shall also be a member of the governing body appointed to represent it on the board. Other members shall be appointed by the governing body and shall include representatives of business, industry and labor. The members of the authority first appointed shall serve respectively for terms of one year, two years and three years, divided equally or as nearly equal as possible between these terms. Thereafter, members shall be appointed for terms of three years each. A member may be reappointed for such additional term or terms as the appointing agency may deem proper. If a member resigns, is removed or for any other reason his membership terminates during his term of office, a successor shall be appointed by the appointing agency to fill out the remainder of his term. Members in office at the expiration of their respective terms shall continue to serve until their successors have been appointed and have qualified. The appointing agency may at any time remove its appointed member of the authority by an order duly entered of record or by other action appropriate for such appointing agency and may appoint a successor member for any member so removed.In addition to the appointing agencies hereinbefore named, such other persons, firms, unincorporated associations, and corporations, who reside, maintain offices, or have economic interests, as the case may be, in the municipality, are eligible to participate in and request the governing body to appoint members to the development authority as the said authority by its bylaws provides. West Virginia Code 7-12-4 - Qualifications of members West Virginia Code > Chapter 7 > Article 12 > § 7-12-4 - Qualifications of members Current as of: 2010 Check for updates (a) In addition to the appointing agencies as provided for in section three of this article, such other persons, firms, unincorporated associations and corporations, which reside or maintain offices in the county of the development authority, are eligible to participate in and request the governing body to appoint members to the development authority as the said authority by its bylaws provides. Members can also be drawn from citizens of a county contiguous to the county in which the county development authority is located regardless of their state of residence.(b) Any person employed by, owning an interest in, or otherwise associated with a publicutility company as defined in section two, article one, chapter twenty-four of this code or bank as defined in section two, article one, chapter thirty-one-a of this code may serve as a board member and shall not be disqualified from serving as a board member because of conflict of interest as defined in section fifteen, article ten, chapter sixty-one of this code and shall not be subject to prosecution under the provisions of said section when the violation is created solely as a result of his or her relationship with the bank or public utility. This member must recuse himself or herself from board participation regarding the conflicting issue as provided for in section five of this article. West Virginia Code 7-12-5 - Compensation of members; expenses; recusal of member from voting where conflict of interest involved West Virginia Code > Chapter 7 > Article 12 > § 7-12-5 - Compensation of members; expenses; recusal of member from voting where conflict of interest involved Current as of: 2010 Check for updates (a) No member of the authority shall receive any compensation, whether in formal salary, per diem allowance or otherwise, in connection with his or her services as such member. Each member shall, however, be entitled to reimbursement by the authority for any necessary expenditures in connection with the performance of his or her general duties as such member.(b) Whenever a person associated with a public utility or bank as set out in section four of this article has a conflict of interest between the board and that public utility or bank, then he or she must recuse himself or herself from any vote, discussion or other activity associated with the board or its members that creates the conflict of interest. West Virginia Code 7-12-6 - Authority to be a public corporation West Virginia Code > Chapter 7 > Article 12 > § 7-12-6 - Authority to be a public corporation Current as of: 2010 Check for updates The authority and the members thereof shall constitute and be a public corporation under the name provided for in section one, and as such shall have perpetual succession, may contract and be contracted with, sue and be sued, plead and be pleaded, and have and use a common seal. West Virginia Code 7-12-7 - Powers generally West Virginia Code > Chapter 7 > Article 12 > § 7-12-7 - Powers generally Current as of: 2010 Check for updates (a) The development authority is hereby given power and authority as follows: (1) To make and adopt all necessary bylaws and rules for its organization and operations not inconsistent with laws; (2) to elect its own officers, to appoint committees and to employ and fix compensation for personnel necessary for its operation; (3) to enter into contracts with any person, agency, governmental department, firm or corporation, including both public and private corporations, and generally to do any and all things necessary or convenient for the purpose of promoting, developing and advancing the business prosperity and economic welfare of the county in which it is intended to operate, its citizens and industrial complex, including, without limiting any of the foregoing, the construction of any building or structure for lease to the federal government or any of its agencies or departments, and in connection therewith to prepare and submit bids and negotiate with the federal government or such agencies or departments in accordance with plans and specifications and in the manner and on the terms and conditions and subject to any requirements, regulations, rules and laws of the United States of America for the construction of said buildings or structures and the leasing thereof to the federal government or such agencies or departments; (4) to amend or supplement any contracts or leases or to enter into new, additional or further contracts or leases upon such terms and conditions, for such consideration and for such term of duration, with or without option of renewal, as may be agreed upon by the authority and such person, agency, governmental department, firm or corporation; (5) unless otherwise provided for in, and subject to the provisions of, such contracts, or leases, to operate, repair, manage and maintain such buildings and structures and provide adequate insurance of all types and in connection with the primary use thereof and incidental thereto to provide such services, such as barber shops, newsstands, drugstores and restaurants, and to effectuate such incidental purposes, grant leases, permits, concessions or other authorizations to any person or persons, upon such terms and conditions, for such consideration and for such term of duration as may be agreed upon by the authority and such person, agency, governmental department, firm or corporation; (6) to delegate any authority given to it by law to any of its officers, committees, agents or employees; (7) to apply for, receive and use grants-in-aid, donations and contributions from any source or sources and to accept and use bequests, devises, gifts and donations from any person, firm or corporation; (8) to acquire real property by gift, purchase or construction, or in any other lawful manner, and hold title thereto in its own name and to sell, lease or otherwise dispose of all or part of such real property which it may own, either by contract or at public auction, upon the approval by the board of directors of the development authority; (9) to purchase or otherwise acquire, own, hold, sell, lease and dispose of all or part of any personal property which it may own, either by contract or at public auction; (10) pursuant to a determination by the board that there exists a continuing need for programs to alleviate and prevent unemployment within the county in which the authority is intended to operate or aid in the rehabilitation of areas in said county which are underdeveloped, decaying or otherwise economically depressed and that moneys or funds of the authority are necessary therefor, to borrow money and execute and deliver the authority's negotiable notes, mortgage bonds, other bonds, debentures and other evidences of indebtedness therefor, on such terms as the authority shall determine and give such security therefor as shall be requisite, including giving a mortgage or deed of trust on its real or personal property and facilities in connection with the issuance of mortgage bonds; (11) to raise funds by the issuance and sale of revenue bonds in the manner provided by the applicable provisions of article sixteen, chapter eight of this code, it being hereby expressly provided that a development authority created under this article is a "governing body" within the definition of that term as used in said article sixteen, chapter eight of this code; and (12) to expend its funds in the execution of the powers and authority herein given, which expenditures, by the means authorized herein, are hereby determined and declared as a matter of legislative finding to be for a public purpose and use, in the public interest, and for the general welfare of the people of West Virginia, to alleviate and prevent economic deterioration and to relieve the existing critical condition of unemployment existing within the state.(b) The amendment of this section enacted in the year one thousand nine hundred ninety-eight is intended to clarify the intent of the Legislature as to the manner in which an authority may sell, lease or otherwise dispose of real and personal property owned by an authority and shall be retroactive to the date of the prior enactment of this section. (c) Notwithstanding any provision of this code to the contrary, any development authority participating in the Appalachian Region Interstate Compact pursuant to chapter seven-a of this code may agree to a revenue and economic growth-sharing arrangement with respect to tax revenues and other income and revenues generated by any facility owned by an authority. Any development authority or member locality may be located in any jurisdiction participating in the Appalachian Region Interstate Compact or a similar agreement for interstate cooperation for economic and workforce development authorized by law. The obligations of the parties to any such agreement shall not be debt within the meaning of section eight, article X of the Constitution of West Virginia. Any such agreement shall be approved by a majority vote of the governing bodies of the member localities reaching such an agreement but does not require any other approval. (d) "Member localities" means the counties, municipalities or combination thereof which are members of an authority. West Virginia Code 7-12-7a - Findings respecting necessity for exercise of right of eminent domain; authorization to exercise right of eminent domain West Virginia Code > Chapter 7 > Article 12 > § 7-12-7a - Findings respecting necessity for exercise of right of eminent domain; authorization to exercise right of eminent domain Current as of: 2010 Check for updates (a) It is hereby found and determined by the Legislature that in fulfilling their prescribed purposes and exercising their powers, including the purpose of promoting, developing and advancing the business prosperity and economic welfare of the county for which created by acquiring lands and other real property to be furnished by lease, sale or other disposition as industrial sites, county development authorities are performing essential public purposes; that the performance of such essential public purposes are frequently impeded, unduly delayed, or wholly frustrated by imperfections in the title to essential land and other real properties, by lost heirs or widely scattered owners of undivided interests in essential lands and other real properties and by owners of relatively small but essential parcels of a proposed land development site who refuse to sell their land or other real property to the county; and, that the exercise by county development authorities of the right of eminent domain within the limitations herein provided is therefore necessary and appropriate to achieve the said public purposes of county development authorities.(b) Any county development authority heretofore or hereafter created by a county commission pursuant to the authority of this article is hereby authorized and empowered to exercise the right of eminent domain if an order of such county commission authorizing exercise of the right of eminent domain as to any proposed acquisition is first made and entered and at least three fourths of the entire tract has either been purchased, optioned, or is under contract to be purchased: Provided, That prior to the issuance of the order by the county commission, it shall hold a public hearing on the public necessity of the exercise of eminent domain and shall cause a Class II legal advertisement to be published in accordance with the provisions of section two, article three, chapter fifty-nine, prior to the hearing: Provided, however, That a separate hearing must be held and a separate order promulgated for each parcel over which the authority wishes to exercise the power of eminent domain: Provided further, That the right of eminent domain shall not be exercised to acquire real property which exceeds one fourth of any land development site proposed by the county development authority, and the aforesaid order of a county commission shall specifically state the anticipated size of the entire site with respect to which the exercise by a county development authority of the right of eminent domain is authorized. West Virginia Code 7-12-8 - Incurring indebtedness; rights of creditors West Virginia Code > Chapter 7 > Article 12 > § 7-12-8 - Incurring indebtedness; rights of creditors Current as of: 2010 Check for updates The authority may incur any proper indebtedness and issue any obligations and give anysecurity therefor which it may deem necessary or advisable in connection with carrying out its purposes as hereinbefore mentioned. No statutory limitation with respect to the nature, or amount, interest rate or duration of indebtedness which may be incurred by municipalities or other public bodies shall apply to indebtedness of the authority. No indebtedness of any nature of the authority shall constitute an indebtedness of the governing body of the municipality or county commission of the municipality or county in which the commission is intended to operate or any municipality situated therein, or a charge against any property of said county commission, municipalities, or other appointing agencies. The rights of creditors of the authority shall be solely against the authority as a corporate body and shall be satisfied only out of property held by it in its corporate capacity. West Virginia Code 7-12-9 - Agreements in connection with obtaining funds West Virginia Code > Chapter 7 > Article 12 > § 7-12-9 - Agreements in connection with obtaining funds Current as of: 2010 Check for updates The authority may, in connection with obtaining funds for its purposes, enter into any agreement with any person, firm or corporation, including the federal government; or any agency or subdivision thereof, containing such provisions, covenants, terms and conditions as the authority may deem advisable. West Virginia Code 7-12-9a - Joint undertakings by county development authorities West Virginia Code > Chapter 7 > Article 12 > § 7-12-9a - Joint undertakings by county development authorities Current as of: 2010 Check for updates (a) The Legislature hereby finds and declares that the citizens of the state would benefit from coordinated economic development efforts and that to encourage cooperation and coordination, county economic development authorities should share in the tax revenues derived from joint programs regardless of the county in which they are located.(b) Any three or more county development authorities may contract to share expenses for and revenues derived from joint economic development projects within their respective geographic territories. Notwithstanding any other section of the code to the contrary, county development authorities may contract to distribute on a pro rata basis proceeds derived from joint economic development projects. (c) Each county development authority participating in a joint economic development project contract must contribute at least fifteen thousand dollars in cash to the project. (d) In the event that a county development authority desires to withdraw from participation, then the remaining participants may jointly choose a successor. No withdrawing county development authority shall be entitled to the return of any money or property advanced to the project, unless specifically provided for in the contract. (e) In the event that a joint economic development project is terminated, all funds, property and other assets shall be returned to the county development authorities in the same proportion as contributions of funds, property and other assets were made by the county development authorities. (f) A grant, which may not exceed one hundred thousand dollars, may be made by the West Virginia development office to any county economic development authority which enters into such contracts. West Virginia Code 7-12-9b - Joint development entities West Virginia Code > Chapter 7 > Article 12 > § 7-12-9b - Joint development entities Current as of: 2010 Check for updates (a) The Legislature hereby finds and declares that the citizens of this state would benefit from coordinated economic development efforts and that to encourage cooperation and coordination, county governing bodies, municipal governing bodies and county and municipal development authorities should be authorized to organize and jointly own all of the partnership, ownership and membership interests in a partnership, corporation or limited liability company for the sole purpose of undertaking jointly through their joint ownership of or membership in the partnership, corporation or limited liability company any project or projects that an authority established pursuant to this article would be permitted to undertake.(b) Any combination of two or more county governing bodies, municipal governing bodies, municipal development authorities or county development authorities may jointly form and hold all of the partnership, ownership or membership interests in a partnership, corporation or limited liability company, the sole purpose of which is to develop and own one or more joint economic development projects (for purposes of this section, a "joint development entity"). No person or entity other than a county governing body, municipal governing body, municipal development authority or county development authority may own any ownership or membership interest in a joint development entity. Any existing partnership, corporation or limited liability company is a joint development entity on and after the effective date of this section if: (i) It was organized for the purposes described in this subsection prior to the effective date of this section; and (ii) the partnership, ownership or membership interests in it meet the requirements of this subsection on and after the effective date of this section. (c) To the extent consistent with and not prohibited by or in conflict with the restrictions and limitations on, or the rights and attributes of, a joint development entity set forth in this section, the applicable general law governing partnerships, corporations or limited liability companies govern the organization, existence, duration, powers, governance and dissolution of a joint development entity and the rights and responsibilities of the partners, owners or members of a joint development entity. (d) A joint development entity is a public corporation and a political subdivision and instrumentality of its partners, owners or members and has the powers, rights and privileges of an authority set forth in sections seven, eight, nine, ten, eleven, twelve and fourteen of this article in addition to those granted to partnerships, corporations and limited liability companies under applicable general law. (e) For West Virginia tax purposes, a joint development entity is a political subdivision of the State of West Virginia and is exempt from all state and local taxation and all real and personal property owned by a joint development entity, or which the joint development entity may acquire to be leased, sold or otherwise disposed of, is exempt from taxation by the state or any county, municipality or other levying body as public property. West Virginia Code 7-12-10 - Property, bonds and obligations of authority exempt from taxation West Virginia Code > Chapter 7 > Article 12 > § 7-12-10 - Property, bonds and obligations of authority exempt from taxation Current as of: 2010 Check for updates The authority shall be exempt from the payment of any taxes or fees to the state or any subdivision thereof or to any officer or employee of the state or other subdivision thereof. The property of the authority shall be exempt from all local and municipal taxes. Bonds, notes, debentures and other evidence of indebtedness of the authority are declared to be issued for a public purpose and to be public instrumentalities, and shall be exempt from taxes West Virginia Code 7-12-11 - Participation and appropriations authorized; transfers and conveyances of property West Virginia Code > Chapter 7 > Article 12 > § 7-12-11 - Participation and appropriations authorized; transfers and conveyances of property Current as of: 2010 Check for updates The governing body of a municipality and county commission are hereby authorized and empowered to appoint members of the said authority and the county commission and any municipality therein, or any one or more of them, jointly and severally, are hereby authorized and empowered to contribute by appropriation from their respective general funds not otherwise appropriated to the cost of the operation and projects of the authority.The county commission of the county or municipal corporations therein are hereby authorized and empowered to transfer and convey to the said authority property of any kind acquired by said county commission or municipal corporation for or adaptable to use in industrial, economic and recreational development, such transfers or conveyances to be without consideration or for such price and upon such terms and conditions as the said county commission or municipal corporation deems proper. West Virginia Code 7-12-12 - Contributions by county commissions, municipalities and others; funds and accounts; reports; audit and examination of books, records and accounts West Virginia Code > Chapter 7 > Article 12 > § 7-12-12 - Contributions by county commissions, municipalities and others; funds and accounts; reports; audit and examination of books, records and accounts Current as of: 2010 Check for updates Contributions may be made to the authority from time to time by the county commission of the county or any municipal corporation therein, and by any persons, firms or corporations which shall desire to do so. All such funds and all other funds received by the authority shall be deposited in such bank or banks as the authority may direct and shall be withdrawn therefrom in such manner as the authority may direct. The authority shall keep strict account of all its receipts and expenditures and shall each quarter make a quarterly report to the county commission and municipalities containing an itemized statement of its receipts and disbursements during the preceding quarter. Within sixty days after the end of each fiscal year, the authority shall make an annual report containing an itemized statement of its receipts and disbursements for the preceding year, and such annual report shall be published as a Class I legal advertisement in compliance with the provisions of article three, chapter fifty-nine of this code, and the publication area for such publication shall be the county in which the development authority is located. The books, records and accounts of the authority shall be subject to audit and examination by the office of the state tax commissioner of West Virginia and by any other proper public official or body in the manner provided by law. West Virginia Code 7-12-13 - Sale or lease of property; reversion of assets upon dissolution West Virginia Code > Chapter 7 > Article 12 > § 7-12-13 - Sale or lease of property; reversion of assets upon dissolution Current as of: 2010 Check for updates In the event the board of the authority shall so determine, the authority may lease or sell all of its property and equipment, either by contract or at public auction, on such terms and conditions as the authority may fix and determine. Upon the dissolution of the authority, all of its assets and property shall revert to and become the property of the county or municipality for which said authority was created.The amendment of this section in the year one thousand nine hundred ninety-eight, is intended to clarify the intent of the Legislature as to the manner in which an authority may sell, lease or otherwise dispose of real and personal property owned by an authority, and shall be retroactive to the date of the prior enactment of this section.