A newly filed bill (S.679) would allow economic development bonds to be issued for freight projects, which could be exempted from job creation requirements.
Economic development bonds are a category of general obligation debt, which is backed by the taxpayers’ personal property, and they can be issued for anything from land acquisition to employee training. This bill would add “freight transportation” to that list.
The bill would also add language stating that certain infrastructure types (including freight and industrial development sites) will serve a public purpose – which is language designed to authorize the use of eminent domain to seize lands needed for the project.
The bill also creates a subcategory of economic development projects – “strategic infrastructure projects” – which are not subject to the job creation and capital investment requirements that companies must usually meet for bonds to be issued.
Instead, “strategic infrastructure projects” must be owned and operated by a state or local government entity which has determined that there’s an immediate need for it. In addition, the Coordinating Council for Economic Development must determine that the project will help them promote economic development by providing necessary infrastructure for an industry considering locating in the state (or that is already here).
Bonds for a strategic infrastructure project can be issued for the following purposes:
- land acquisition
- site preparation
- road, and highway, and freight transportation improvements
- rail spur construction
- water service
- wastewater treatment
However, if the bonds are to be issued for land acquisition or site preparation, the purpose must be for an industrial development site located in a low income county – or one that will be considered low income at the start of the next tax year.
This bill is currently awaiting a hearing from the Senate Finance Committee.
[…] Two bills would expand the possible use of economic development bonds, which are backed by the taxpayers’ personal property. Currently, these bonds can be issued for anything from land acquisition to employee training. This bill would add “freight transportation” to that list. […]