people respond better to laws that give them some benefit and not just restrict their ability to...
TRANSCRIPT
Why Economic Incentives?
People respond better to laws that give them some benefit and not just restrict their ability to live
An economic incentive will motivate people to the region and not push them away
Specific Industry Incentives based on location
Why? Results based off of the Georgia
Entertainment Industry Investment Act of 2008
Imitation is the highest form of flattery
Movies Shot in Georgia
More than 26 feature films were filmed in Georgia during the 2009 fiscal year*
Features include: The Blind Side The Crazies Zombieland The Last Song Why Did I get Married Too
*Source: Augusta Chronicle
Financial year 2009results from the Georgia Entertainment Investment Act of 2008
180 Commercials 29 Music Videos 14 Feature films 12 Independent Films 78 Episodic and Television Total Combined Budgets: $716.7 million
Source: Dept of Economic Development, Georgia Film, Music & Digital Entertainment Office
348 Number of Combined Productions $770.2 million Total value of all
production budgets $1.3 billion Economic Impact
Source: Dept of Economic Development, Georgia Film, Music & Digital Entertainment Office (including interactive video games)
Financial year 2009results from the Georgia Entertainment Investment Act of 2008
Drawbacks to Media Act
Most of the filming has only taken place in Atlanta or Savannah
Recently, there was filming in 50 counties in Georgia
Georgia has a total of 159 counties
*Source: Augusta Chronicle
Industry specific incentives based on location needed
Easy for industries to know where they get breaks
Migration of workers, experts, and students in specific areas to certain parts of the metro region
Industries with growth projections for the future
Biotechnology Ecommerce & Online Auctions Voice over Internet Providers Environmental Consulting Recycling Facilities Land Development
Josh Spiro, The Best and Worst Industries of the Next Decade (2010), http://www.inc.com/news/articles/2010/01/best-and-worst-industries.html
General Assembly to pick where industry incentives are placed
To keep counties from competing with each other
Businesses will view the region with stability since the General Assembly have shown control
Educational Enhancements in Specified Regions
Board of Regents of the University System of Georgia Develop training programs for schools located
within designated regions The values of an educated workforce Who works the cold room? How school developments impact in the
surrounding community
Will new vehicles cause electricity consumption to increase?
Chevy Volt
Nissan Leaf
Ford Focus Electric
Property Assessed Clean Energy (PACE) Bonds
What is PACE used to finance? Advantages associated with using PACE
bonds Differences in PACE for the various states
with enabling legislation
What are PACE bonds financing?
Joe Biden, Steven Chu, and Shaun Donovan http://www.youtube.com/watch?v=2HpwQff2tI
A
Bill Clinton http://www.youtube.com/watch?v=-UjhPf6Go5
A
How to set up PACE Financing
1. The passage of state enabling legislation allowing for special municipal taxing districts
2. Municipality (city or county) creates a special “PACE” district
3. PACE districts issues a PACE master bond4. Commercial/residential real estate owners
apply for PACE funds to install hyper energy efficiency measures and renewable energy production
5. PACE funding treated as senior “property tax lien” and repaid by real estate owner over 20 years as an annual property tax surcharge
PACE Bonds are coming to a state near you
States with legislation enabling PACE Financing California (AB 811) Colorado (HB 08-1350) Illinois (SB 583) Louisiana (SB 224) Maryland (HB 1567) Nevada (SB 398) New Mexico (HB 572) Ohio (BH 1) Oklahoma (SB 668) Oregon (HB 2181 & 2626) Texas (HB 1391 & HB 1937) Vermont (H 446) Virginia (SB 1212) Wisconsin (AB 255)
An example of PACE(warning some math involved!)
The amount of seniority to the existing mortgage created by a PACE lien will typically represent less than 1% of home value
This is because in most PACE states, upon foreclosure, only the delinquent tax lien gets paid (not the whole PACE loan) while the homeowner assumes the remaining balance
Assumptions: Home Value: $300,000 Mortgage: $250,000 PACE Lien: $15,000(5% of home value) Annual PACE: $1,392(7% rate, 20 year amortization)
Property Surcharge Average Period Between Less than 12 months
Delinquency and Foreclosure Assume 1 year PACE surcharge is delinquent and paid ahead of the mortgage: Senior Payment:$1,392 % of Home Value:.5% % of Existing Mortgage:.6%
Let’s compare legislation
Texas http://files.statesurge.com/file/896737
California http://info.sen.ca.gov/pub/07-08/bill/asm/ab_0
801-0850/ab_811_bill_20080721_chaptered.pdf
Georgia http://www.legis.state.ga.us/legis/2009_10/pdf
/hb1388.pdf