Authorizes and provides for cooperative endeavor agreements between local governmental subdivisions and other entities that may require payments in lieu of ad valorem taxes (RE1 SEE FISC NOTE LF RV See Note)
The implementation of HB 445 will have significant implications for state tax law by enabling local authorities to negotiate tax arrangements that deviate from standard ad valorem taxation practices. It will allow for the possible exemption from such taxes based on cooperative agreements that benefit the community economically. Such agreements can be beneficial for attracting new investments, particularly in manufacturing and related sectors, as they may grant tax relief to new businesses that meet specific job creation and economic output criteria.
House Bill 445 aims to authorize local taxing authorities to enter into cooperative endeavor agreements with property owners that require payments in lieu of ad valorem taxes. This bill modifies existing laws to expand the definition of cooperative endeavor agreements and set clear eligibility and approval processes for these agreements. The intention behind the bill is to create a framework that facilitates economic development while ensuring local governments have the authority to negotiate tax arrangements that can spur job creation and investment.
The sentiment around HB 445 appears to be generally supportive among proponents of economic development and job creation, including stakeholders like local governments and business associations. They argue that the bill enhances flexibility in tax negotiations, potentially leading to increased investments in the state. However, there are concerns from critics about the potential for lost tax revenue and the possibility that these agreements may favor certain businesses over others, which could lead to inequity in tax burdens among different sectors.
Notable points of contention revolve around the eligibility conditions set forth in the bill, particularly the criteria that require the property owner to demonstrate that the economic benefits derived from the agreement exceed 20 times the anticipated benefit of the agreement to themselves. Additionally, the requirement of creating at least 250 new jobs raises questions about the practicality of these targets and whether they adequately reflect the interests of all stakeholders, including smaller businesses that might not meet such thresholds.