MISSISSIPPI LEGISLATURE

2000 Regular Session

To: Conservation and Water Resources; Ways and Means

By: Representative Ellington

AN ACT TO CREATE THE MISSISSIPPI BROWNFIELDS VOLUNTARY CLEANUP AND REDEVELOPMENT INCENTIVES ACT; TO EXPRESS THE FINDINGS OF THE LEGISLATURE; TO AUTHORIZE A LIMITED PARTIAL EXEMPTION FROM AD VALOREM TAXES ON REAL PROPERTY FOR REDEVELOPMENT PROJECTS LOCATED ON BROWNFIELD AGREEMENT SITES; TO PROVIDE THAT THE AMOUNT OF THE AD VALOREM TAX EXEMPTION SHALL BE BASED UPON THE INCREMENTAL INCREASE BETWEEN THE CURRENT ASSESSED VALUE OF THE PROPERTY AND THE ORIGINAL ASSESSED VALUE OF THE PROPERTY; TO AMEND SECTION 57-1-301, MISSISSIPPI CODE OF 1972, TO MODIFY THE DEFINITION OF "CAPITAL IMPROVEMENT" TO INCLUDE BROWNFIELD AGREEMENT SITE REMEDIATION; TO AMEND SECTION 57-61-9, MISSISSIPPI CODE OF 1972, TO AUTHORIZE A PRIVATE MATCH OF TWO DOLLARS FOR EVERY ONE DOLLAR OF STATE ASSISTANCE FOR REDEVELOPMENT PROJECTS ON BROWNFIELD AGREEMENT SITES; TO AMEND SECTION 57-73-21, MISSISSIPPI CODE OF 1972, TO AUTHORIZE A JOB TAX CREDIT FOR REDEVELOPMENT PROJECTS ON A BROWNFIELD AGREEMENT SITE UNDER THE MISSISSIPPI BROWNFIELDS VOLUNTARY CLEANUP AND REDEVELOPMENT ACT AND TO SPECIFY THE AMOUNT OF THE JOB TAX CREDIT; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. This act shall be known and may be cited as the "Mississippi Brownfields Voluntary Cleanup and Redevelopment Incentives Act."

SECTION 2. The Legislature finds the following:

(a) There are properties in Mississippi, often refereed to as "brownfields," which were contaminated or perceived to have been contaminated by past activities but are attractive locations for redevelopment.

(b) The safe development or redevelopment of brownfields would benefit the citizens of Mississippi in many ways, including improving the tax base of local governments and creating job opportunities for citizens in the vicinity of brownfields.

(c) Owners and prospective developers and redevelopers of brownfields, local governments in which brownfields are located and federal and state government agencies should be encouraged to provide capital and labor to improve brownfields so that the property can be determined to be safe or made safe for appropriate future use.

(d) The reduction of public health and environmental hazards on existing brownfield sites is essential to creating a better quality of life for the citizens of this state.

(e) Section 49-35-27 requires the Department of Environmental Quality to conduct a survey of incentive programs in other states for cleanup of contaminated sites by January 1, 1999. The department has conducted its survey and filed its report showing incentives provided in other states.

SECTION 3. (1) All real property, new facilities or structures or improvements to existing structures or facilities which are a part of a redevelopment project on a brownfield agreement site that is remediated under Sections 49-35-1 through 49-35-25 shall be exempt from all ad valorem taxation subject to the limitations provided in this section.

(2) (a) Any person, firm or corporation desiring to obtain the exemption authorized in this section shall file a written application for the exemption with the governing authorities of the municipality or county. The application shall describe that portion of the brownfield agreement site which is part of the redevelopment project and associated real property, facilities and structures for which the exemption is sought.

(b) Upon receipt of the application, the municipal clerk or the chancery clerk, as the case may be, shall certify the assessed value of the real property on which the redevelopment project is located, including any facilities or structures in that property, described in the application. Property taxable when the application is received shall be included in the assessed value at its most recently determined valuation. Property exempt from taxation under any other section of law when the application is received shall be included at zero value. This assessed value is the "original assessed value."

(c) Each year after an application for the exemption has been field, the municipal clerk or the chancery clerk, as the case may be, and the State Tax Commission, if applicable, shall certify the amount by which the assessed value of the real property on which the redevelopment project is located, including any new facilities or structures or improvements to existing structures or facilities, has increased or decreased from the original assessed value. This assessed value is the "current assessed value."

(d) Any amount by which the current assessed value of the real property on which the redevelopment project is located, including any facilities or structures on that property, exceeds the original assessed value shall be referred to as the "captured assessed value." The municipal clerk or the chancery clerk, as the case may be, shall certify to the municipality or county the captured assessed value for each year of the duration of the tax exemption under this section.

(e) The owner of the real property, new facilities or structures or improvements to existing structures or facilities which are a part of a redevelopment project on a brownfield agreement site that is remediated under Sections 49-35-1 through 49-35-25 shall be exempt from all ad valorem taxation on the captured assessed value for a period of five (5) years from the date of completion of the redevelopment project, unless the amount of the ad valorem tax exemption on the captured assessed value exceeds the costs of remediation of the brownfield agreement site subject to the ad valorem tax exemption. If the amount of the ad valorem tax exemption on the captured assessed value exceeds the cost of remediation of the brownfield agreement site subject to the ad valorem tax exemption, then such owner may not receive the amount of the ad valorem tax exemption which exceeds the cost of remediation of the brownfield agreement site, and the ad valorem tax exemption authorized under this section shall cease.

(3) Any exemption granted under this section shall be in lieu of ad valorem tax exemptions authorized under any other provision of law.

(4) The ad valorem tax exemption authorized under this section shall not apply if the governing body of a municipality and the owner of the property propose to use tax increment financing under Sections 21-45-1 through 21-45-21 to provide funds for the redevelopment project.

SECTION 4. Section 57-1-301, Mississippi Code of 1972, is amended as follows:

57-1-301. (1) There is established a local governments capital improvements revolving loan program to be administered by the Department of Economic and Community Development for the purpose of assisting counties and municipalities in making capital improvements.

(2) For purposes of Sections 57-1-301 and 57-1-335, "capital improvements" include any combination of the following:

(a) Construction or repair of water and sewer facilities;

(b) Construction or repair of drainage systems for industrial development;

(c) Improvements in fire protection;

(d) Construction of new buildings for economic development purposes;

(e) Renovation or repair of existing buildings for economic development purposes;

(f) Construction or repair of access roads for industrial development;

(g) Purchase of buildings for economic development purposes;

(h) Construction or repair of railroad spurs for industrial development;

(i) Construction of any county or municipally owned health care facilities, excluding any county health departments;

(j) Construction, purchase, renovation or repair of any building to be utilized as an auditorium or convention center;

(k) Construction of multipurpose facilities for tourism development; * * *

(l) Loans to a county to aid in retiring interest-bearing loans utilized for the purchase of a motion picture sound stage; or

(m) Remediation of brownfield agreement sites in accordance with Sections 49-35-1 through 49-35-25.

SECTION 5. Section 57-61-9, Mississippi Code of 1972, is amended as follows:

57-61-9. (1) Any private company desiring assistance from a municipality shall submit to the municipality a letter of intent to locate, expand or build a facility entirely or partially within the municipality or on land the municipality is authorized to own or otherwise acquire. The letter of intent shall include:

(a) Except for strategic investments, a commitment that the proposed project will create and maintain a minimum of ten (10) net new full-time equivalent jobs, will create and maintain at least a five percent (5%) increase in full-time equivalent jobs in the case of expansion of an enterprise already located at the site or at least a twenty-five percent (25%) increase in full-time equivalent jobs pursuant to subsection (9) of Section 57-61-15 and will create and maintain at least one (1) net new full-time equivalent job for every Fifteen Thousand Dollars ($15,000.00) either loaned or granted for the project. The commitment required by this paragraph (a) shall include any jobs created prior to the effective date of this chapter resulting from contracts entered into contingent upon assistance being made available under this chapter. All jobs required to be maintained by this paragraph (a) shall be maintained until such time as any loan made under this chapter for the benefit of a private company is repaid.

(b) A statement that the specific improvements are necessary for the efficient and cost-effective operation of the private company, together with supporting financial and engineering documentation.

(c) Any commitment to pay rental on, or to make loan repayments related to, the improvements to be made with funds loaned to a municipality under this chapter.

(d) If required by the department, a notarized statement of willingness to grant a lien on the facility for which the improvement is being provided, in an amount and a manner to be determined by the department, which lien may be foreclosed in the event that the private company fails to operate in the facility according to the terms of the agreement and/or to collateralize the loan made for the benefit of the private company for which the improvement is being provided in an amount and manner to be determined by the department. In the event the contractual agreement is to be entered into with a department or subsidiary of the United States government, the department shall determine that the governmental unit will operate the proposed project for a sufficient number of years to retire the loan based on increased revenue estimates by the University Research Center and any agreement entered into shall reflect that the interest paid on any loan for such purpose shall be included in Mississippi's contributory value in the project. In the event the private company requesting the assistance is a subsidiary of another corporation, if required by the department, any contractual agreement entered into shall also require the parent company to unconditionally warrant the performance of the subsidiary in carrying out the terms of the agreement or it shall require the subsidiary and/or the parent company to pledge assets in an amount and a manner to be determined by the department and/or to collateralize the loan in an amount and a manner to be determined by the department to ensure the performance of the terms of the contract.

(2) Upon receipt of the letter of intent from a private company, the municipality may apply to the department for a loan or grant. The application from the municipality shall include but not be limited to:

(a) A statement of the purpose of the proposed loan or grant, including a list of eligible items and the cost of each.

(b) A statement showing the sources of funding for the entire project, including the private company's or governmental unit's investment in the project and any public and other private sources of funding.

(c) A certified copy of the signed letter of intent from a private company or governmental unit, as specified in this section.

(d) Evidence that there will be a private match of at least Three Dollars ($3.00) for every One Dollar ($1.00) of state assistance, except in the case of ports or redevelopment projects on brownfield agreement sites remediated under Sections 49-35-1 through 49-35-25, where the private match will be at least Two Dollars ($2.00) for every One Dollar ($1.00) of state assistance.

(e) Demonstration that the private company is financially sound and is likely to fulfill the commitments made in its letter of intent.

(f) A proposed timetable for the provision of the improvements.

(g) Evidence that the project will be expeditiously carried out and completed as planned.

(h) A demonstration that insufficient local capital improvement funds at reasonable rates and terms are available within the necessary time to provide the needed improvement on public property. This includes local funds available through issuance of bonds or other means, state funds available through existing programs, and available federal program funds such as community development block grant funds, urban development action grant funds, and economic development administration funds.

(i) A demonstration that insufficient private funds are available at reasonable rates and terms within the necessary time to fund improvement on property owned by the private company.

(3) The department shall consider grant and loan applications based on the following criteria:

(a) The number of net new full-time equivalent jobs that will be provided and the amount of additional state and local tax revenue estimated by the University Research Center to be directly generated by the private company's new investment, and additionally, as to loan applications by state agencies, the extent to which shipping through the port will be increased by the proposed port development projects, the degree to which jobs will be increased in the port area and the impact on port revenues.

(b) The ability to repay the principal and interest, in the case of a loan, based on increased revenue estimates and any revenue-producing provision of a contractual agreement.

(c) The increase in the employment base of the state.

The department and the University Research Center may use the resources and capabilities of the planning and development districts in carrying out the provisions of this chapter.

(4) No loan shall be made in excess of the amounts which can be repaid with the increased revenues estimated by the University Research Center, provided that this subsection (4) shall not apply to loans in connection with a United States Navy home port.

(5) (a) Notwithstanding anything contained in this chapter, an agency of the State of Mississippi operating a state-owned port, and hereinabove identified as a "municipality" and "governmental unit" for purposes of this chapter, may make application for a loan or grant under the terms and provisions of this chapter. In addition, a public agency operating a port bordering on the Gulf of Mexico, which shall be considered to be a "municipality" or a "governmental unit" for the purposes of this chapter, may make application for a loan or grant under the terms and provisions of this chapter from funds other than those funds authorized for a state-owned port under paragraph (e)(iii) of Section 57-61-11. The application shall be initiated by submission of a letter of intent to engage in a project or projects for the purpose of effecting enlargement and improvement in all facilities used and useful in attracting international and foreign commerce through the port. Projects eligible for inclusion in the letter of intent may include but not be restricted to:

(i) Dredging and deepening the access channel and harbor basin of the port;

(ii) Effecting the enlargement of the land area of the port by reclamation;

(iii) Construction and installation of piling, bulkheads, docks, wharves, warehouses and appurtenances; and

(iv) Acquisition of facilities and equipment for handling bulk and containerized cargo.

(b) With respect to a state-owned port bordering on the Gulf of Mexico, the letter of intent shall include the following information and any other information required by the department:

(i) Present and future annual tonnages expected as a result of the improvements.

(ii) Reasons why present facilities are inadequate to enable the port to compete, including limitations imposed by insufficient depth of channel and basin.

(iii) Increased channel and basin depths necessary to accommodate modern shipping.

(iv) Comparison of the percentage of the world's cargo shipping that can now be accommodated with what could be accommodated with project improvements.

(v) Economic contribution to the region and state resulting from increased shipping activity.

(vi) Statement of degree to which port revenues are expected to be increased as a result of projects.

(vii) Financial data of port activities, including cost of project, degree of federal funding available and required local participation.

On or before January 1, 1989, a state-owned port described in this paragraph (b) shall submit to the Senate Finance Committee and the House Ways and Means Committee of the Mississippi Legislature a comprehensive, written report updating for each committee the information listed in items (i) through (vii) of this paragraph (b) with particular emphasis on the economic contribution to the region and state by shipping activity at the port; on financial data with respect to the degree of federal funding available and local participation in funding port activities; and on progress made in dredging and completing other improvements necessary to accommodate modern shipping.

(c) The department shall consider grant and loan applications based on the following:

(i) The extent to which shipping through the port will be increased by the proposed projects.

(ii) The degree to which jobs will be increased in the port area.

(iii) Impact on port revenues.

(iv) The ability of the port to repay interest and principal in the case of a loan.

(6) A municipality may apply to the department for a grant under the terms and provisions of this chapter, and the department may award grants to a municipality subject to limitations contained in this chapter. The application shall be initiated by submission of a letter of intent to engage in a project or projects for the purpose of providing improvements necessary to accommodate a United States Navy home port.

(7) The Legislature hereby finds and determines that financing facilities necessary to accommodate a Navy home port serves a valid public purpose in that a Navy home port will significantly contribute to the employment base of the state which is in great need of assistance; provided, that in the event such facilities are no longer required for use by the Navy as a home port, such facilities shall revert as provided in Section 59-9-21.

(8) (a) A municipality is authorized to negotiate a contract for the acquisition, construction and erection of a project or any portion of a project hereunder where a municipality finds that, because of the particular nature of a project or any portion thereof, it would be in the best public interest of the municipality to negotiate.

(b) Contracts by a private company for the acquisition, construction or erection of a project which receives assistance under this chapter shall be effected in the manner prescribed by law for public contracts, unless the department makes a written finding that, because of special circumstances with respect to the projects or any portion thereof, it would better serve the public interest or more effectively achieve the purposes of this chapter to enter into such contracts based on negotiation.

(9) A municipality is authorized upon such terms and conditions as the municipality may deem advisable, provided such terms and conditions shall not be in conflict with the provisions of this chapter, to (a) acquire, whether by construction, purchase, gift or lease, all of or any portion of a project hereunder; (b) to lease or sell to others all of or any portion of a project hereunder; and (c) to lend to the private company the proceeds of the loan from the board to such municipality.

(10) All agreements between a municipality and a private company related directly or indirectly to a project or a portion of a project to be funded in whole or in part under this chapter are subject to approval by the department.

SECTION 6. Section 57-73-21, Mississippi Code of 1972, is amended as follows:

57-73-21. (1) Annually by December 31, using the most current data available from the University Research Center, Mississippi State Employment Security Commission and the United States Department of Commerce, the State Tax Commission shall rank and designate the state's counties as provided in this section. The twenty-eight (28) counties in this state having a combination of the highest unemployment rate and lowest per capita income for the most recent thirty-six-month period, with equal weight being given to each category, are designated less developed areas. The twenty-seven (27) counties in the state with a combination of the next highest unemployment rate and next lowest per capita income for the most recent thirty-six-month period, with equal weight being given to each category, are designated moderately developed areas. The twenty-seven (27) counties in the state with a combination of the lowest unemployment rate and the highest per capita income for the most recent thirty-six-month period, with equal weight being given to each category, are designated developed areas. Counties designated by the Tax Commission qualify for the appropriate tax credit for jobs as provided in subsections (2), (3) and (4) of this section. The designation by the Tax Commission is effective for the tax years of permanent business enterprises which begin after the date of designation. For companies which plan an expansion in their labor forces, the Tax Commission shall prescribe certification procedures to ensure that the companies can claim credits in future years without regard to whether or not a particular county is removed from the list of less developed or moderately developed areas.

(2) Permanent business enterprises primarily engaged in manufacturing, processing, warehousing, distribution, wholesaling and research and development, or permanent business enterprises designated by rule and regulation of the Department of Economic and Community Development as air transportation and maintenance facilities, final destination or resort hotels having a minimum of one hundred fifty (150) guest rooms, recreational facilities that impact tourism, movie industry studios, or telecommunications enterprises, in counties designated by the Tax Commission as less developed areas are allowed a job tax credit for taxes imposed by Section 27-7-5 equal to Two Thousand Dollars ($2,000.00) annually for each net new full-time employee job for five (5) years beginning with years two (2) through six (6) after the creation of the job. The number of new full-time jobs must be determined by comparing the monthly average number of full-time employees subject to the Mississippi income tax withholding for the taxable year with the corresponding period of the prior taxable year. Only those permanent businesses that increase employment by ten (10) or more in a less developed area are eligible for the credit. Credit is not allowed during any of the five (5) years if the net employment increase falls below ten (10). The Tax Commission shall adjust the credit allowed each year for the net new employment fluctuations above the minimum level of ten (10).

(3) Permanent business enterprises primarily engaged in manufacturing, processing, warehousing, distribution, wholesaling and research and development, or permanent business enterprises designated by rule and regulation of the Department of Economic and Community Development as air transportation and maintenance facilities, final destination or resort hotels having a minimum of one hundred fifty (150) guest rooms, recreational facilities that impact tourism, movie industry studios, or telecommunications enterprises, in counties that have been designated by the Tax Commission as moderately developed areas are allowed a job tax credit for taxes imposed by Section 27-7-5 equal to One Thousand Dollars ($1,000.00) annually for each net new full-time employee job for five (5) years beginning with years two (2) through six (6) after the creation of the job. The number of new full-time jobs must be determined by comparing the monthly average number of full-time employees subject to Mississippi income tax withholding for the taxable year with the corresponding period of the prior taxable year. Only those permanent businesses that increase employment by fifteen (15) or more in areas that have not been designated less developed areas are eligible for the credit. The credit is not allowed during any of the five (5) years if the net employment increase falls below fifteen (15). The Tax Commission shall adjust the credit allowed each year for the net new employment fluctuations above the minimum level of fifteen (15).

(4) Permanent business enterprises primarily engaged in manufacturing, processing, warehousing, distribution, wholesaling and research and development, or permanent business enterprises designated by rule and regulation of the Department of Economic and Community Development as air transportation and maintenance facilities, final destination or resort hotels having a minimum of one hundred fifty (150) guest rooms, recreational facilities that impact tourism, movie industry studios, or telecommunications enterprises, in counties designated by the Tax Commission as developed areas are allowed a job tax credit for taxes imposed by Section 27-7-5 equal to Five Hundred Dollars ($500.00) annually for each net new full-time employee job for five (5) years beginning with years two (2) through six (6) after the creation of the job. The number of new full-time jobs must be determined by comparing the monthly average number of full-time employees subject to Mississippi income tax withholding for the taxable year with the corresponding period of the prior taxable year. Only those permanent businesses that increase employment by twenty (20) or more in developed areas are eligible for the credit. The credit is not allowed during any of the five (5) years if the net employment increase falls below twenty (20). The Tax Commission shall adjust the credit allowed each year for the net new employment fluctuations above the minimum level of twenty (20).

(5) In addition to the credits authorized in subsections (2), (3) and (4), an additional Five Hundred Dollars ($500.00) credit for each net new full-time employee shall be allowed for any company establishing or transferring its national or regional headquarters from within or outside the State of Mississippi. A minimum of thirty-five (35) jobs must be created to qualify for the additional credit. The State Tax Commission shall establish criteria and prescribe procedures to determine if a company qualifies as a national or regional headquarters for purposes of receiving the credit awarded in this subsection.

(6) In addition to the credits authorized in subsections (2), (3), (4) and (5), any job requiring research and development skills (chemist, engineer, etc.) shall qualify for an additional Five Hundred Dollars ($500.00) credit for each net new full-time employee.

(7) In lieu of the tax credits provided in subsections (2) through (6), permanent business enterprises primarily engaged in manufacturing, processing, warehousing, distribution, wholesaling and research and development, or permanent business enterprises designated by rule and regulation of the Department of Economic and Community Development which are situated on a brownfield agreement site remediated under Sections 49-35-1 through 49-35-25, are allowed a job tax credit for taxes imposed by Section 27-7-5 equal to the amounts provided in subsection (2), (3) or (4) for each net new full-time employee job for five (5) years, which credit is available during years two (2) through six (6) after the creation of the job. The number of new full-time jobs must be determined by comparing the monthly average number of full-time employees subject to Mississippi income tax withholding for the taxable year with the corresponding period of the prior taxable year. This subsection shall be administered in the same manner as subsections (2), (3) and (4), except the landowner shall not be required to increase employment by the levels provided in subsections (2), (3) and (4) to be eligible for the tax credit.

(8) Tax credits for five (5) years for the taxes imposed by Section 27-7-5 shall be awarded for additional net new full-time jobs created by business enterprises qualified under subsections (2), (3), (4), (5), (6) and (7) of this section. Except as otherwise provided, the Tax Commission shall adjust the credit allowed in the event of employment fluctuations during the additional five (5) years of credit.

(9) The sale, merger, acquisition, reorganization, bankruptcy or relocation from one county to another county within the state of any business enterprise may not create new eligibility in any succeeding business entity, but any unused job tax credit may be transferred and continued by any transferee of the business enterprise. The Tax Commission shall determine whether or not qualifying net increases or decreases have occurred or proper transfers of credit have been made and may require reports, promulgate regulations, and hold hearings as needed for substantiation and qualification.

(10) Any tax credit claimed under this section but not used in any taxable year may be carried forward for five (5) years from the close of the tax year in which the qualified jobs were established but the credit established by this section taken in any one (1) tax year must be limited to an amount not greater than fifty percent (50%) of the taxpayer's state income tax liability which is attributable to income derived from operations in the state for that year.

(11) No business enterprise for the transportation, handling, storage, processing or disposal of hazardous waste is eligible to receive the tax credits provided in this section.

(12) The credits allowed under this section shall not be used by any business enterprise or corporation other than the business enterprise actually qualifying for the credits.

(13) The tax credits provided for in this section shall be in addition to any tax credits described in Sections 57-51-13(b), 57-53-1(1)(a) and 57-54-9(b) and granted pursuant to official action by the Department of Economic Development prior to July 1, 1989, to any business enterprise determined prior to July 1, 1989, by the Department of Economic Development to be a qualified business as defined in Section 57-51-5(f) or Section 57-54-5(d) or a qualified company as described in Section 57-53-1, as the case may be; however, from and after July 1, 1989, tax credits shall be allowed only under either this section or Sections 57-51-13(b), 57-53-1(1)(a) and Section 57-54-9(b) for each net new full-time employee.

(14) As used in this section, the term "telecommunications enterprises" means entities engaged in the creation, display, management, storage, processing, transmission or distribution for compensation of images, text, voice, video or data by wire or by wireless means, or entities engaged in the construction, design, development, manufacture, maintenance or distribution for compensation of devices, products, software or structures used in the above activities. Companies organized to do business as commercial broadcast radio stations, television stations or news organizations primarily serving in-state markets shall not be included within the definition of the term "telecommunications enterprises."

SECTION 7. Nothing in this act shall affect or defeat any claim, assessment, appeal, suit, right or cause of action for taxes due or accrued under the ad valorem or income tax laws before the date on which this act becomes effective or are begun thereafter. The provisions of the ad valorem and income tax laws are expressly continued in full force, effect and operation for the purpose of the assessment, collection and enrollment of liens for any taxes due or accrued and the execution of any warrant under such laws before the date on which this act becomes effective, and for the imposition of any penalties, forfeitures or claims for failure to comply with such laws.

SECTION 8. This act shall take effect and be in force from and after January 1, 2001.