Amendments	Fiscal Memos
SA0864	Amendment 1-0 to SB1260
SA1032	Amendment 2-0 to SB1260

	Amendments	Fiscal Memos
HA0800	Amendment 1-1 to HB0351

NOTE: Each fiscal memorandum applies only to the amendment(s) identified in the memorandum. The fiscal memorandum must be matched to any amendments that have been adopted.

Fiscal Summary

Increase State Expenditures – Exceeds $457,800/FY23-24 and Subsequent Years/ Department of Economic and Community Development Other Fiscal Impact – There will be a total recurring increase to expenditures exceeding $442,800 per industrial development corporation established in FY24-25 and subsequent years. It is unknown what percentage of these costs will be paid by Department of Economic and Community Development or mandated to be paid by the local governing body. Any increase in local revenue as a result establishment of an industrial development corporation cannot reasonably be determined. *

Bill Summary

This bill authorizes industrial development corporations to be established and operated solely to assist and benefit minority-owned businesses, locally owned businesses, businesses that have 50 or fewer employees and annual gross revenues of $5,000,000 or less ("small businesses"), and commercial businesses for which fifty-one percent of the ownership interest is owned or held by women ("women-owned businesses). This bill provides that a commercial entity does not qualify as a locally owned business unless the subject business has conducted a majority of its operations under the jurisdiction of a local government's industrial development corporation for at least five years. However, this requirement does not apply to a business entity that was formed contemporaneously with the local industrial development corporation and conducts the majority of its operations under the jurisdiction of such corporation.

This bill requires the following:

(1) That all such industrial development corporations must have neighborhood advisory committees to assist their boards of directors in promoting, funding, and cultivating the businesses described above. This bill provides that a neighborhood advisory committee is a committee appointed by an industrial development board to act in an advisory capacity to make recommendations and provide feedback to the industrial development corporation's board of directors for a particular local government's industrial development corporation jurisdiction as it relates to a particular neighborhood or community of focus as defined by the governing body of the local government in which the industrial development corporation is located;

(2) That 100 percent of all reasonable costs related to the creation of industrial development corporations must be funded by the department of economic and community development for a period not to exceed five years; and

(3) That all reasonable operating costs related to staffing and operational expenditures must be fully reimbursed by the department of economic and community development, or the governing body of the local government within which the corporation operates, for a period not to exceed four years. Following such time, the department and local governments are only required to provide financial support as directed by the general assembly.

ON APRIL 22, 2024, THE HOUSE ADOPTED AMENDMENT #1 AND PASSED HOUSE BILL 351, AS AMENDED.

AMENDMENT #1 rewrites the bill to, instead, do the following:

(1) Authorize industrial development corporations to be established and operated solely to assist and benefit locally owned businesses and small businesses;

(2) Require industrial development corporations to have neighborhood advisory committees to assist their boards of directors in promoting, funding, and cultivating locally owned businesses and small businesses;

(3) Require that reasonable costs related to the creation of industrial development corporations to be funded by the local governments in which the corporation is created;

(4) Require that all reasonable operating costs related to staffing and operational expenditures be fully reimbursed by the governing body of the local government within which the corporation operates for a period not to exceed four years. Following such time, the local governments are encouraged to financially assist and support industrial development corporations;

(5) Require the department of economic and community development to, within existing resources, provide guidance and assistance to a local government that creates an industrial development corporation;

(6) Define, for purposes of the bill, a "neighborhood advisory committee" as a committee appointed by an industrial development board to act in an advisory capacity to make recommendations and provide feedback to the industrial development corporation's board of directors for a particular local government's industrial development corporation jurisdiction as it relates to a particular neighborhood or community of focus as defined by the governing body of the local government in which the industrial development corporation is located; and

(7) Define, for purposes of the bill, a "small business" as a business that has 50 or fewer employees and that has annual gross revenues of $5 million or less.

ON APRIL 24, 2024, THE SENATE SUBSTITUTED HOUSE BILL 351 FOR SENATE BILL 1260, ADOPTED AMENDMENT #2, AND PASSED HOUSE BILL 351, AS AMENDED.

AMENDMENT #2 makes the following changes:

(1) On or before January 31, 2028, requires the joint government operations committee to review any industrial development corporation established pursuant to this bill and submit a report to the general assembly on the effectiveness of the industrial development corporation; and

(2) Provides that this bill is repealed June 30, 2028.