Chairman Linda W. Cropp at the request of the Mayor
A BILL IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
TO CREATE THE DISTRICT OF COLUMBIA TAX INCREMENT FINANCE COMMISSION AND TO
AUTHORIZE TAX INCREMENT ALLOCATION FINANCING FOR THE DOWNTOWN AREA OF THE DISTRICT OF
COLUMBIA BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, AS FOLLOWS:
Sec. 1. This act may be cited as the "1997 District
of Columbia Tax Increment Finance Commission Act."
Sec. 2. The Council finds that:
(1) There exists in the District of Columbia a substantial problem of chronic
unemployment and underemployment.
(2) The downtown area of the District has declined over many years and as a result the
real property tax base and the sales tax base of the District have failed to keep pace
with the expenditures of the government of the District.
(3) Causes of the decline of the downtown area of the District include the lack of new
retail development and the lack of development of entertainment, cultural, recreational,
housing and community facilities within the downtown area.
(4) The lack of authority to provide financial incentives to encourage development in
the downtown area in accordance with the District’s comprehensive plan have contributed to
the decline of the downtown area.
(5) Governmental action is required to revitalize the downtown area; to eliminate those
conditions of blight that exist in and near the downtown area; to reduce the problems of
unemployment and underemployment; and to encourage the investment of private funds in the
downtown area.
(6) It is declared to be the policy of the District, in the interests of promoting the
health, security and general welfare of all the people of the District, and a public
purpose, to encourage the development and improvement of the downtown area and to assist
private investment within the downtown area by creating a District instrumentality with
the powers necessary to issue revenue bonds and to pledge certain dedicated taxes and
fees, including tax increments, as security for the payment of the revenue bonds and to
finance development costs as authorized by this act.
(7) The issuance of revenue bonds pursuant to this act will contribute to (i) the
health, education, safety and welfare of the residents of the District; (ii) the creation
and preservation of jobs for residents of the District; and (iii) the economic development
of the District.
Sec. 3. In this act:
"Assessor" means the Office of Taxation and Revenue, or such other person or
office as is from time to time responsible for maintaining the records pertaining to the
assessed value of real property within the downtown area;
"available real property taxes" means real property taxes provided for in
Chapter 8 of Title 47 of the D.C. Code and payments in lieu of real property taxes,
exclusive of the special tax provided for in Section 481 of the District of Columbia Home
Rule Act (D.C. Code Section 47-331) and pledged to the payment of general obligation
indebtedness of the District;
"available sales tax" means the tax imposed on retail sales and sales at retail
pursuant to Chapter 20 of Title 47 of the D.C. Code, including any penalties and interest
charges, exclusive of the portion thereof required to be deposited in the Washington
Convention Center Authority Fund established pursuant to D.C. Code Section 9-809 and the
portion thereof required to be deposited in the Metrorail/Metrobus Account pursuant to
D.C. Code Section 1-2466(b)(2)(A);
"bonds" means bonds, notes or other obligations of the Commission;
"capital improvement" shall have the meaning under generally accepted accounting
principles.
"Collector" means the District of Columbia Treasurer, or such other person or
office as is from time to time responsible for the collection of real property taxes and
sales taxes within the downtown area;
"Commission" means the District of Columbia Tax Increment Finance Commission
created by this act;
"Council" means the Council of the District;
"DD Regulations" means the Downtown Development District Regulations, 11 DCMR
§700 et seq. (1995), the Zoning Regulations of the District, as amended from time
to time; "development costs" means any or all of the following costs incurred or
estimated to be incurred in furtherance of the objectives of this act:
(A) costs of studies, surveys, plans and specifications, including professional service
costs for architectural, accounting, engineering, legal, marketing, financial and planning
services;
(B) property assembly costs, including acquisition of land and other property, real or
personal, or rights or interests in property, demolition of buildings and other
structures, remediation of environmental hazards, and the clearing and grading of land;
(C) costs of preservation, rehabilitation, reconstruction, repair or remodeling of
existing public or private buildings, structures and fixtures;
(D) costs of any public works or improvements undertaken by, or at the direction of the
Commission, the District or any other governmental unit;
(E) costs of parking and transportation facilities, stadia, museums, other cultural
institutions, educational institutions, retail, entertainment and recreation facilities,
telecommunications infrastructure, public plazas, malls, pedestrian walkways and parks
that are owned by the Commission, the District or any other governmental unit or are
privately owned but available for use by the general public;
(F) costs of construction of new public or privately owned housing units and community
facilities and costs of preservation, rehabilitation, reconstruction, repair or remodeling
of public and private buildings for use as housing units and community facilities;
(G) costs of maintaining and operating public works and improvements;
(H) financing costs, including but not limited to all expenses related to the issuance of
bonds of the Commission, interest on bonds, bond reserves, credit enhancements, and costs
related to the performance by the Commission of its covenants and agreements with the
holders of its bonds;
(I) working capital and working capital reserves directly related to the development of a
project;
(J) administrative costs of the Commission; and
(K) relocation, job training and education costs.
"development sponsor" means any organization or person that seeks to
undertake, or undertakes, a project.
"District" means the District of Columbia;
"downtown area" means the area of the District addressed by the Downtown
Interactive Task Force, being the area with the boundary commencing at the intersection of
Pennsylvania Avenue, N.W. and Twelfth Street, N.W.; north on Twelfth Street, N.W. to N
Street, N.W.; east on N Street, N.W. to New Jersey Avenue, N.W.; southeast on New Jersey
Avenue, N.W. to Second Street, N.W.; south on Second Street, N.W. to Pennsylvania Avenue,
N.W.; and northwest on Pennsylvania Avenue, N.W. to the point of commencement;
"FAR" means Floor Area Ratio within the meaning of the Zoning Regulations of the
District, as amended from time to time;
"gross floor area" means Gross Floor Area within the meaning of the Zoning
Regulations of the District, as amended from time to time;
"initial assessed value" means, with respect to each lot of taxable real
property within a tax increment area, the assessed value of the parcel on the date of
adoption of the resolution establishing the tax increment area;
"initial sales tax amount" means, with respect to a tax increment area, the
amount of sales tax receipts collected by the District and derived from sales at locations
within the tax increment area in the calendar year immediately preceding the year in which
the tax increment area is established;
"project" means any capital improvement undertaken within the downtown area;
"property tax increment receipts" means the portion of the available real
property taxes allocable to the Commission pursuant to section 12;
"sales tax increment receipts" means the portion of the available sales taxes
allocable to the Commission pursuant to section 13; and
"tax increment area" means any area designated and established pursuant to
section 11.
Sec. 4. There is created the "District of
Columbia Tax Increment Finance Commission." The Commission is a body corporate and
politic constituting an instrumentality of the District government.
Sec. 5. The authority of the Council to borrow money
and to issue taxable or tax-exempt revenue bonds, notes or other obligations, as provided
in subsection (a)(l) of Section 490 of the District of Columbia Home Rule Act, is
delegated to the Commission for the purposes specified in section 17.
Sec. 6. (a) The membership of the Commission consists
of two voting ex-officio members and five voting public members appointed by the Mayor and
confirmed by the Council. The ex-officio members are the Mayor and the Chief Financial
Officer of the District. Any ex-officio member may appoint a representative to act on
behalf of the ex-officio member by filing written notice of the appointment with the
Commission.
(b) The five public members shall consist of persons with professional experience (i)
in the planning and development of large scale private sector property developments, each
in excess of $50 million; (ii) in urban retail business development; (iii) in the
development of housing projects, each in excess of 100 units, in urban areas; (iv) in
senior executive positions in banking and finance at an institution with over $50 million
is assets; or (v) in the practice of law with experience in downtown development. Each
public member shall reside in the District.
(c) The term of each public member is four years; provided, however, that the initial
terms of the public members shall be determined by lot so that the term of office of one
of the public members shall end on the 31st day of January of the first year following the
year of enactment of this act; the term of office of one of the public members shall end
on the 31st day of January of the second year following the year of enactment of this act;
the term of office of one of the public members shall end on the 31st day of January of
the third year following the year of enactment of this act; and the term of office of two
of the public members shall end on the 31st day of January of the fourth year following
the year of enactment of this act.
(d) The members of the Commission shall serve without compensation, but shall be
reimbursed for actual expenses incurred by them in the performance of their duties.
(e) Members of the Commission shall hold office until their respective successors have
been appointed and qualified. Any public member may resign by filing notice of resignation
with the Commission, the Mayor and the Council. Any public member may be removed from
office by a resolution adopted by a two-thirds vote of the Council. Each vacancy shall be
filled for the unexpired term by appointment as provided in paragraph (a) and paragraph
(b) of this section.
(f) A member of the Commission may not vote on a resolution of the Commission if the
member has a direct ownership or equity interest in a firm, partnership, corporation or
association that may benefit from the enactment of the resolution. A resolution of the
Commission that is approved by a majority of the members not barred from voting under this
paragraph is a valid action of the Commission for all purposes.
Sec. 7. (a) The members of the Commission shall elect
a chairperson from among themselves. The chairperson shall serve for a one year term
expiring on the 31st day of January. The chairperson shall preside over all meetings of
the Commission. A vice-chairperson may be elected by the Commission from among its other
members. The vice-chairperson shall serve for a term expiring on the same date as the term
of the chairperson. The vice-chairperson shall preside over all meetings in the absence of
the chairperson.
(b) The members of the Commission may appoint a secretary and a treasurer, who shall be
members of the Commission, to hold office at the pleasure of the members.
(c) The Commission may appoint an executive director, and may engage professional
advisers, counsel, technical experts, agents and employ other personnel. Until such time
as the Commission employs personnel, the usual functions of an executive director shall be
performed by the Director of the Office of Business and Economic Development (or such
deputy or associate as the Director may designate) and the usual functions of employees
shall be performed by the Office of Business and Economic Development.
(d) The Commission may provide for compensation to be paid to its employees and its
professional advisors. The compensation may include such incentives and bonuses as may be
determined by the Commission.
Sec. 8. (a) The Commission shall meet at least twice in each year. A
majority of the members of the Commission constitutes a quorum for the transaction of
business or the exercise of a power or function at a meeting of the Commission.
(b) The Commission may meet and transact business by electronic media if (1)
participants and members of the public in attendance can hear and have the same right to
participate in the meeting as if the meeting were conducted in person and (2) copies of
all resolutions and pertinent materials are reasonably available to participants and to
the public. A meeting by electronic media as provided in this paragraph has the same legal
effect as a meeting in person.
(c) The Commission shall keep minutes of each meeting and send a certified copy of the
minutes to the Council.
(d) The Commission shall act by resolution. All resolutions, all proceedings of the
Commission, and all documents and records of the Commission shall be public records, open
to public inspection, except such documents as are kept or prepared for negotiations or in
connection with any suit, action or proceeding to which the Commission is or may be a
party.
(e) In connection with any project, the Commission may consult with any economic
development corporation in whose jurisdiction such project is located.
Sec. 9. The purposes of the Commission are to promote,
develop and advance the general prosperity and economic welfare of the people of the
District, to relieve problems of unemployment and underemployment, to re-establish the
downtown area as the primary retail shopping and entertainment center for the Washington
metropolitan area, and within the downtown area, to improve public facilities and public
infrastructure, to encourage private development, to foster the development of
entertainment, cultural, recreational and residential facilities, to provide improved
transportation and community facilities, by providing various means of financing public
and private development costs in accordance with this act.
Sec. 10. In furtherance of its corporate purposes,
the Commission has the following powers:
- to sue and be sued;
- to have a seal;
- to make and alter bylaws for its organization and management;
- to adopt regulations governing the exercise of its powers and to establish procedures in
furtherance of the purposes and objectives of this act; - to acquire interests in personal property, by purchase, gift or lease;
- to lease property for such rentals and upon such terms and conditions as the Commission
may consider advisable; - to issue bonds and otherwise to incur indebtedness, in accordance with this act, in
order to finance the cost of any purpose authorized by this act or by a supplemental act
of the Council; - to sell, by installment sale or otherwise, exchange, donate, convey or encumber in any
manner by mortgage or by creation of any other security interest personal property owned
by it, or in which it has an interest; - to sell personal property, with or without consideration, and without regard to the fair
market value or acquisition cost of the property; - to accept gifts, grants or loans from, and enter into agreements with, the federal
government, any federal agency, the District, any District instrumentality, or any private
organization or person; - to deposit and invest its funds;
- to charge fees to private developers and other persons;
- to incur and to finance development costs; to enter into agreements to secure its bonds
and other undertakings; - to establish within the downtown area, one or more tax increment areas, to establish the
boundaries of each tax increment area and, subject to the rights of its bondholders, - to abolish or merge tax increment areas or to alter the boundaries of tax increment
areas; and - to enter into agreements, including security agreements, loan agreements and development
agreements, with respect to the exercise of any of its powers, and to do all things
necessary or convenient to carry out its corporate purposes and exercise the powers
granted by this act.
Sec. 11. (a) Upon receipt of a written petition of the
development sponsor(s) of a project that satisfies the requirements of Section 16, the
Commission shall by resolution establish the area described in the petition and including
the entire site of the project as a separate tax increment area. Each resolution shall
adopt tax increment financing for the tax increment area, shall determine the boundaries
of the tax increment area and establish the termination date of the tax increment area.
(b) The Commission shall by resolution provide for the allocation, in accordance with
Sections 12 and 13, of property tax increment receipts and sales tax increment receipts
within each tax increment area established by the Commission and shall establish one or
more separate tax allocation funds for the deposit and application of property tax
increment receipts and sales tax increment receipts from each tax increment area.
(c) Subject to (i) the consent of each development sponsor of a project within the
affected tax increment areas and (ii) the rights of the holders of its bonds, the
Commission may by resolution abolish a tax increment area, merge tax increment areas or
alter the boundaries of a tax increment area.
(d) A certified copy of each resolution adopted pursuant to this section shall be filed
with.the Council, the Assessor, and the Collector.
Sec. 12. Each resolution establishing a tax increment area
shall provide that the available real property taxes, if any, arising from the
levies upon taxable property in the tax increment area in each year after the date of
adoption of the resolution until the termination date of the tax increment area, shall be
divided as follows:
(1) That portion of available real property taxes levied upon each lot of taxable real
property that is attributable to the lower of the current assessed value or the initial
assessed value of each lot of taxable real property shall be allocated to, and when
collected should be paid by the Collector to the District in the manner required by law in
the absence of the adoption of tax increment financing.
(2) That portion, if any, of the available real property taxes that is attributable to
the increase in the current assessed value of each lot of taxable real property over and
above the initial assessed value of the lot shall be allocated to, and when collected
shall be paid by the Collector to the Commission.
Sec. 13. Each resolution establishing a tax increment
area shall provide that the available sales taxes, if any, derived from sales at locations
in the tax increment area in each year commencing after the date of adoption of the
resolution until the termination date of the tax increment area, shall be divided as
follows:
(1) That portion of the annual sales tax receipts equal to the initial sales tax amount
shall be paid by the Collector to the District in the manner required by law in the
absence of the adoption of tax increment financing.
(2) That portion, if any, of the annual sales tax receipts in excess of the initial
sales tax amount shall be allocated to, and when collected shall be paid by the Collector
to the Commission.
Sec. 14. When the Commission provides for tax
increment allocation financing and establishes a tax increment area, the Assessor shall
determine and certify the initial assessed value of each lot of taxable property within
the tax increment area and the Collector shall determine and certify the initial sales tax
amount for the tax increment area.
Sec. 15. All property tax increment receipts paid to
the Commission from the allocation of real property taxes provided for in section 12, and
all sales tax increment receipts paid to the Commission from the allocation of
sales taxes provided for in section 13, shall be deposited into one or more separate tax
allocation funds for the applicable tax increment area as determined by the Commission.
Moneys held or to be held in a tax allocation fund shall be used to pay development costs
associated with projects in the applicable tax increment area and to pay the principal of
and interest on the bonds of the Commission issued with respect to the tax increment area.
Moneys in a tax allocation fund or specific portions of the moneys may be pledged as
security for the payment of bonds of the Commission issued to finance development costs
with respect to the applicable tax increment area. Subject to its agreements with the
holders of its bonds, any moneys in a tax allocation fund that are not required to retire
indebtedness or to pay development costs may, by resolution of the Commission, be
paid over to the District for deposit in the General Fund.
Sec. 16. (a) Each project within a tax increment area
shall be entitled to be allocated all funds held in a tax allocation fund, including the
proceeds of sale of the bonds, the property tax increment receipts and/or the sales tax
increment receipts derived from the project, provided that the project satisfies one of
the following:
(1) If located within a Housing Priority Area established under the DD Regulations, the
project, for the term of the bonds, (i) commits to provide the on-site component of the
residential gross floor area required by the DD Regulations for the Housing Priority Area,
or (ii) commits to provide the on-site component of the residential gross floor area
required by the DD Regulations for the Housing Priority Area and in addition commits to
utilize not less than 90% of the leasable area of the floor at street level, and not less
than 75 % of the leasable area of the floor immediately above or immediately below the
floor at street level, for one or more of the preferred uses set forth in Sections 1710
and/or 1711 of the DD Regulations, with all the preferred use space (if newly constructed)
having a clear ceiling height of not less than fifteen feet; or(2) If not located within a Housing Priority Area established under the DD Regulations,
the project, for the term of the bonds, commits to residential housing as its principal
use; or(3) If not located within a Housing Priority Area established under the DD Regulations,
the project, for the term of the bonds, commits to utilize not less than 90% of the
leasable space on the floor at street level, and not less than 75% of the leasable space
on the floor immediately above or below the floor at street level, for one or more of the
preferred uses set forth in Sections 1710 and/or 1711 of the DD Regulations, with all the
preferred use space (if newly constructed) having a clear ceiling height of not less than
fifteen feet.
(b) The requirements for a project to comply with this section shall be set forth in an
agreement between the Commission and the development sponsor of the project.
(c) Subject to compliance with the regulations and procedures established by the
Commission, a project which complies with the requirements set forth in this section shall
be entitled to have the Commission issue bonds with respect to the property tax increment
receipts and/or the sales tax increment receipts derived from the project.
(d) The Zoning Administrator, the Director, Office of Planning and the Office of
Corporation Counsel shall furnish to the Commission such certificates as may be required
to confirm a project’s compliance with the requirements set forth in this section.
Sec. 17. The Commission shall authorize and provide for the
issuance of bonds pursuant to the act for the purpose of raising funds to pay development
costs and for the purpose of funding or refunding any of its bonds. The Commission shall
exercise the power to authorize bonds by adopting a bond resolution, which shall describe
in brief and general terms sufficient for reasonable identification (1) the development
costs to be financed or the bonds that are to be funded or refunded and (2) the property
tax increment receipts, the sales tax increment receipts and the other revenues, assets
and funds of the Commission that are to be pledged to secure the repayment of the bonds.
Sec. 18. (a) Upon the adoption of a bond resolution
the Commission may incur indebtedness, borrow money and issue its bonds for the purposes
authorized by the bond resolution. The bonds may be issued in more than one series, may be
executed in such manner, and may bear such date or dates, mature at such time or times
(provided, however, that the final maturity date of any bonds payable from property tax
increment receipts or sales tax increment receipts derived from a tax increment area may
not be later than the termination date of that tax increment area), bear interest at any
fixed or variable rate, be subject to redemption upon such terms and have such other terms
and provisions as the bond resolution, including any resolution supplemental thereto, a
trust agreement or a trust indenture may provide.
(b) The aggregate principal amount of bonds, other than refunding bonds, issued before
January 1, 2003 shall not exceed $300 million.
(c) The Commission may charge an administrative fee in connection with the issuance of
bonds. The amount of the administrative fee shall not exceed the lesser of (i) $50,000 and
(ii) 0.5%of the principal amount of the bonds issued.
(d) Bonds of the Commission may be sold at public or private sale and at a price or
prices as the Commission shall determine by resolution or by any officer or employee of
the Commission to the extent the power has been delegated to the officer or employee
pursuant to a resolution of the Commission.
(e) All tax increment receipts not required as security for bonds, for debt service on
bonds, or for administrative costs, may be used to prepay the bonds and otherwise shall be
returned to the District of Columbia for deposit in the General Fund. In no event shall
the proceeds of any tax increment bonds exceed twenty-five percent of the total project
costs.
Sec. 19. The housing and community development fund
is established as a special fund to be administered by the Department of Housing and
Community Development of the District. If less than 25 percent of the net proceeds of sale
of any issue of bonds shall be used for development costs associated with a housing
project, then a portion of the proceeds equal to the excess of (i) 25 percent of the net
proceeds over (ii) the portion of the proceeds used for development costs associated with
a housing project, shall be deposited into the housing and community development fund.
Moneys in the housing and community development fund shall be used for projects within the
downtown area that provide housing or community facilities, provided that (i) not less
than 60 percent of the moneys in the housing and community development fund shall be
granted to projects within the downtown area that provide housing, and (ii) the amount of
each grant for projects that provide housing shall be $30 per FAR square foot of the
housing provided.
Sec. 20. A series of bonds may be secured by a trust
agreement or trust indenture between the.Commission and a corporate trustee having trust
powers, or by a secured loan agreement or other instrument or under a resolution of the
Commission giving power to a corporate trustee by means of which the Commission may:
(1) make and enter into any and all covenants and agreements with the trustee or the
holders of the bonds that the Commission may determine to be necessary or desirable
including, without limitation, covenants and agreements as to
(A) the application, investment, deposit, use and disposition of the proceeds of bonds
and the other moneys, securities and property of the Commission,
(B) the terms and conditions of any agreement with any other person concerning the
development of the downtown area,
(C) the assignment by the Commission of its rights in any agreement,
(D) terms and conditions upon which additional bonds of the Commission may be issued,
(
(E) providing for the appointment of a trustee to act on behalf of bondholders and
abrogating or limiting the rights of the bondholders to appoint a trustee pursuant to
section 21; and
(F) vesting in a trustee, for the benefit of the holders of bonds, or in the bondholders
directly, such rights and remedies as the Commission shall determine;
(2) pledge, mortgage or assign moneys, agreements, property or other assets of the
Commission, either presently in hand or to be received in the future, or both;
(3) provide for bond insurance and letters of credit, or otherwise enhance the credit
of and security for the payment of its bonds; and
(4) provide for any other matters of like or different character that in any way affect
the security for or payment of the bonds.
Sec. 21. If there shall be a default in the payment
of the principal of or interest on any bonds of a series after the principal or interest
shall become due and payable, whether at maturity or upon call for redemption, or if the
Commission shall fail or refuse to carry out and perform the terms of any agreement with
the holders of any the bonds; then the holders of the bonds, or the trustee appointed to
act on behalf of the holders, may:
(1) By action, writ or other proceeding enforce all rights of the holders
of the bonds, including the right to require the Commission to carry out and perform the
terms of any agreement with the holders of the bonds or its duties under this act;
(2) By action, require the Commission to account as if it were the trustee of an express
trust;
(3) By action, petition to enjoin any acts or things that may be unlawful or in violation
of the rights of the holders of the bonds, and
(4) Declare all the bonds due and payable, whether or not in advance of maturity and, if
all the defaults be made good, annul the declaration and its consequences.
Sec. 22. The Commission may cause any bond resolution
adopted by it to be posted for public inspection in its office. The Commission may
thereupon cause to be published in a newspaper of general circulation in the District a
notice stating the fact and date of adoption and the place where the bond
resolution has been posted for public inspection and also the date of the first
publication of the notice and also that any suit, action or proceeding of any kind or
nature in any court questioning the validity of the creation of the Commission or the
validity or proper authorization of bonds provided for by the bond resolution, or the
validity of any covenants or agreements provided for by said bond resolution shall be
commenced within 20 days after the first publication of the notice. If any such notice
shall at any time be published and if no suit, action or proceeding questioning the
validity of the creation of the Commission or the validity or proper authorization of
bonds provided for by the bond resolution referred to in said notice, or the validity of
any covenants or agreements provided for by said bond resolution shall be commenced or
instituted within 20 days after the first publication of said notice, then all residents,
taxpayers and owners of property in the District and all other persons whatsoever shall be
forever barred and foreclosed from instituting or commencing any suit, action or
proceeding in any court, or from pleading any defense to any suit, action or proceeding,
questioning the validity of the creation of the Commission, or the validity or proper
authorization of the bonds, or the validity of any such covenants and agreements, and the
Commission shall be conclusively deemed to have been validity created and to be authorized
to exercise its powers under this act, and said bonds, covenants and agreements shall be
conclusively deemed to be valid and binding obligations of the Commission.
Sec. 23. (a) Neither the members of the Commission
nor any person executing bonds issued pursuant to this act shall be liable personally on
the bonds by reason of the issuance thereof.
(b) Notwithstanding any other provision of this act, bonds issued pursuant to this act
are not general obligations of the District and shall not be in any way a debt or
liability of the District within the meaning of any debt or other limit prescribed by law.
Neither the full faith and credit nor the taxing power of the District (other than
property tax increment receipts and sales tax increment receipts from the project) may be
pledged to secure the payment of any bonds issued pursuant to this act.
Sec. 24. The property tax increment receipts and the
sales tax increment receipts constitute "tax increments" as defined in
subsection (m)(6) of Section 490 of the District of Columbia Home Rule Act that are
declared to be dedicated pursuant to this act to the payment of debt service on bonds
issued pursuant to this act, the provision and maintenance of reserves for that purpose,
and to the payment of development costs.
Sec. 25. The District does hereby pledge to and
covenant and agree with the holders of any bonds issued pursuant to a bond resolution of
the Commission that the District will not limit or alter the rights vested in the
Commission by this act to adopt a tax increment financing, to establish tax increment
areas, to allocate available real property taxes, to allocate available sales taxes, to
receive, apply and pledge property tax increment receipts and sales tax increment receipts
and to fulfill the terms of any agreement made with the holders of the bonds, and will not
in any way impair the rights or remedies of the holders, and will not modify in any way
the exemptions from taxation provided for in this act, until the bonds, together with
interest thereon, with interest on any unpaid installment of interest and all costs and
expenses in connection with any suit, action or proceeding by or on behalf of the holders,
are fully met and discharged. The Commission is authorized to include this pledge and
agreement of the District as part of its contract with the holders of any of its bonds.
This act shall constitute a contract between the District and the holders of the bonds
authorized by this act. To the extent that any acts or resolutions of the Council may be
in conflict with this act, this act shall be controlling.
Sec. 26. It is the intention of the Council that a
pledge made by the Commission in respect of its bonds shall be valid and binding from the
time the pledge is made; that the money or property so pledged and thereafter received by
the Commission shall immediately be subject to the lien of the pledge without physical
delivery or further act; and that the lien of the pledge shall be valid and binding as
against all parties having any claim of any kind in tort, contract or otherwise against
the District or the Commission irrespective of whether the parties have notice. Neither
the bond resolution, trust agreement nor any other instrument by which a pledge is created
need be recorded or filed under the provisions of the Uniform Commercial Code to be valid,
binding and effective against the parties.
Sec. 27. All bonds issued by the Commission pursuant
to this act are declared to be issued by an instrumentality of the District for an
essential public and governmental purpose. The bonds and the interest thereon and the
income therefrom, and all funds, revenues and other moneys of the Commission, and all
moneys pledged or available to pay or secure the payment of the bonds, shall at all times
be exempt from taxation by the District except for estate, inheritance and gift taxes.
Sec. 28. The Commission may require that the sponsor
of any project which is allocated property tax increments or sales tax increments pursuant
to this Act shall comply with the requirements of Mayor’s Order 83-265 (November 9, 1983)
in connection with the construction of such project.
Sec. 29. Before one year from the date of enactment
of this act, the Office of Business and Economic Development shall report to the Mayor and
City Council on the desirability of authorizing tax increment allocation financing for
areas of the District outside of the downtown area.
Sec. 30. This act shall take effect following
approval by the Mayor (or in the event of veto by the Mayor, action by the Council to
override the veto), approval by the Financial Responsibility and Management Assistance
Authority as provided in section 203(a) of the District of Columbia Financial
Responsibility and Management Assistance Authority Act of 1995, approved April 17, 1995
(109 Stat. 116; D.C. Code §47-392.3(c)), and a 30-day period of Congressional review as
provided in section 602(c)(1) of the District of Columbia Self-Government and Governmental
Reorganization Act, approved December 24, 1973 (87 Stat. 813; D.C. Code §1-233(c)(1)),
and publication in the District of Columbia Register.
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