HF 606

as introduced - 88th Legislature (2013 - 2014) Posted on 02/14/2013 02:00pm

A bill for an act
relating to tax increment financing; reenacting and modifying compact
development district authority; amending Minnesota Statutes 2012, sections
469.174, subdivisions 10c, 14, by adding a subdivision; 469.176, subdivisions 1i,
4g; repealing Minnesota Statutes 2012, section 469.175, subdivision 2b.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2012, section 469.174, subdivision 10c, is amended to
read:

Subd. 10c.

Compact development district.

"Compact development district" means
a type of tax increment financing district consisting of a project, or portions of a project,
within which the authority finds by resolution that new text begin either of new text end the following conditions are
satisfied:

(1) new text begin (i) new text end parcels consisting of 70 percent of the area of the district are occupied by
buildings or similar structures that are classified as class 3a property under section 273.13,
subdivision 24 new text begin or class 4a under section 273.13, subdivision 25 new text end ; and

deleted text begin (2) deleted text end new text begin (ii) new text end the planned redevelopment or development of the district, when completed,
will increase the total square footage of buildings, classified as class 3a under section
273.13, subdivision 24, occupying the district by three times or more relative to the square
footage of similar buildings occupying the district when the resolution was approved new text begin ; or
new text end

new text begin (2)(i) the nearest boundary of each parcel of the district lies within one-half mile
of a qualifying transit line; and
new text end

new text begin (ii) establishment of the district is in the public interest because it will aid in
financing improvements or services that will increase the effectiveness of the transit and
encourage compact development of property in the district new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 30, 2013.
new text end

Sec. 2.

Minnesota Statutes 2012, section 469.174, subdivision 14, is amended to read:

Subd. 14.

Administrative expenses.

"Administrative expenses" means all
expenditures of an authority other than:

(1) amounts paid for the purchase of land;

(2) amounts paid to contractors or others providing materials and services, including
architectural and engineering services, directly connected with the physical development
of the real property in the project;

(3) relocation benefits paid to or services provided for persons residing or businesses
located in the project;

new text begin (4) amounts paid for services, as authorized by section 469.176, subdivision 1i,
clause (5), for a compact development district;
new text end

deleted text begin (4) deleted text end new text begin (5) new text end amounts used to pay principal or interest on, fund a reserve for, or sell at a
discount bonds issued pursuant to section 469.178; or

deleted text begin (5) deleted text end new text begin (6) new text end amounts used to pay other financial obligations to the extent those obligations
were used to finance costs described in clauses (1) to (3).

For districts for which the requests for certifications were made before August 1,
1979, or after June 30, 1982, "administrative expenses" includes amounts paid for services
provided by bond counsel, fiscal consultants, and planning or economic development
consultants.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 30, 2013.
new text end

Sec. 3.

Minnesota Statutes 2012, section 469.174, is amended by adding a subdivision
to read:

new text begin Subd. 30. new text end

new text begin Qualifying transit line. new text end

new text begin "Qualifying transit line" means a light rail transit
line, commuter rail line, or bus rapid transit line, identified by and operated or to be operated
by the council, as defined in section 473.121, or by the commissioner of transportation.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 30, 2013.
new text end

Sec. 4.

Minnesota Statutes 2012, section 469.176, subdivision 1i, is amended to read:

Subd. 1i.

Compact development districts.

Tax increments derived from a compact
development district may be used only to pay:

(1) administrative expenses up to the amount permitted under subdivision 3;

(2) the cost of acquiring land located in the district or abutting the boundary of
the district;

(3) demolition and removal of buildings or other improvements and other site
preparation costs for lands located in the district or abutting the boundary of the district; and

(4) installation of public infrastructure or public improvements serving the district,
new text begin including:
new text end

new text begin (i) acquiring, constructing, or improving transit stations;
new text end

new text begin (ii) acquiring and improving green space related to the transit improvements;
new text end

new text begin (iii) streetscape improvements, such as improvements to streets and sidewalks
or other public rights-of-way for the purpose of enhancing the movement, safety,
convenience, or enjoyment of users of a qualifying transit line and other pedestrians,
including decorative lighting and surfaces, plantings, display and exhibit space,
adornments, seating, and shelters; new text end but excluding

new text begin (iv) new text end the costs of streets, roads, highways, parking, or other public improvements
primarily designed to serve private passenger motor vehicles deleted text begin . deleted text end new text begin ;
new text end

new text begin (5) operating paratransit or circulator systems that serve passengers of or feed
passengers to a qualifying transit line;
new text end

new text begin (6) making transit improvement loans as authorized by section 469.351, subdivision
4;
new text end

new text begin (7) implementing transit area improvement plans that meet the requirements of
section 469.351, subdivision 3; and
new text end

new text begin (8) financing the cost of programs to mitigate the economic and environmental
effects resulting from construction and operation of the qualifying transit line.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 30, 2013.
new text end

Sec. 5.

Minnesota Statutes 2012, section 469.176, subdivision 4g, is amended to read:

Subd. 4g.

General government use prohibited.

(a) Tax increments may not be
used to circumvent existing levy limit law.

(b) No tax increment from any district may be used for the acquisition, construction,
renovation, operation, or maintenance of a building to be used primarily and regularly
for conducting the business of a municipality, county, school district, or any other local
unit of government or the state or federal government. This provision does not prohibit
the use of revenues derived from tax increments for the construction or renovation of
a parking structure.

(c)(1) Tax increments may not be used to pay for the cost of public improvements,
equipment, or other items, if:

(i) the improvements, equipment, or other items are located outside of the area of the
tax increment financing district from which the increments were collected; and

(ii) the improvements, equipment, or items that (A) primarily serve a decorative or
aesthetic purpose, or (B) serve a functional purpose, but their cost is increased by more than
100 percent as a result of the selection of materials, design, or type as compared with more
commonly used materials, designs, or types for similar improvements, equipment, or items.

(2) The provisions of this paragraph do not apply to expenditures related to the
rehabilitation of historic structures that are:

(i) individually listed on the National Register of Historic Places; deleted text begin or
deleted text end

(ii) a contributing element to a historic district listed on the National Register of
Historic Places new text begin ; or
new text end

new text begin (iii) as authorized for a compact development district under subdivision 1i, clause
(4), item (iii) new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 30, 2013.
new text end

Sec. 6. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2012, section 469.175, subdivision 2b, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 30, 2013, and reinstates
the statutory authority to establish and maintain compact development tax increment
financing districts.
new text end