Minnesota Legislature
HF 707
as introduced - 88th Legislature (2013 - 2014) Posted on 03/13/2013 11:20am
Bill Text Versions
| Engrossments | ||
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| Introduction | Posted on 02/18/2013 |
Current Version - as introduced
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A bill for an act
relating to tax increment financing; extending the five-year rule to ten years;
amending Minnesota Statutes 2012, section 469.1763, subdivisions 3, 4.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2012, section 469.1763, subdivision 3, is amended to read:
Subd. 3.
deleted text begin Five-yeardeleted text end new text begin Ten-yearnew text end rule.
(a) Revenues derived from tax increments are
considered to have been expended on an activity within the district under subdivision 2
only if one of the following occurs:
(1) before or within deleted text begin fivedeleted text end new text begin tennew text end years after certification of the district, the revenues are
actually paid to a third party with respect to the activity;
(2) bonds, the proceeds of which must be used to finance the activity, are issued and
sold to a third party before or within deleted text begin fivedeleted text end new text begin tennew text end years after certification, the revenues are
spent to repay the bonds, and the proceeds of the bonds either are, on the date of issuance,
reasonably expected to be spent before the end of the later of (i) the deleted text begin five-yeardeleted text end new text begin ten-year
new text end period, or (ii) a reasonable temporary period within the meaning of the use of that term
under section 148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably
required reserve or replacement fund;
(3) binding contracts with a third party are entered into for performance of the
activity before or within deleted text begin fivedeleted text end new text begin tennew text end years after certification of the district and the revenues
are spent under the contractual obligation;
(4) costs with respect to the activity are paid before or within deleted text begin fivedeleted text end new text begin tennew text end years after
certification of the district and the revenues are spent to reimburse a party for payment
of the costs, including interest on unreimbursed costs; or
(5) expenditures are made for housing purposes as permitted by subdivision 2,
paragraphs (b) and (d), or for public infrastructure purposes within a zone as permitted
by subdivision 2, paragraph (e).
(b) For purposes of this subdivision, bonds include subsequent refunding bonds if
the original refunded bonds meet the requirements of paragraph (a), clause (2).
deleted text begin
(c) For a redevelopment district or a renewal and renovation district certified after
June 30, 2003, and before April 20, 2009, the five-year periods described in paragraph
(a) are extended to ten years after certification of the district. This extension is provided
primarily to accommodate delays in development activities due to unanticipated economic
circumstances.
deleted text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for districts certified after June 30,
2003.
new text end
Sec. 2.
Minnesota Statutes 2012, section 469.1763, subdivision 4, is amended to read:
Subd. 4.
Use of revenues for decertification.
(a) In each year beginning with
the deleted text begin sixthdeleted text end new text begin eleventhnew text end year following certification of the district, if the applicable in-district
percent of the revenues derived from tax increments paid by properties in the district
exceeds the amount of expenditures that have been made for costs permitted under
subdivision 3, an amount equal to the difference between the in-district percent of the
revenues derived from tax increments paid by properties in the district and the amount of
expenditures that have been made for costs permitted under subdivision 3 must be used
and only used to pay or defease the following or be set aside to pay the following:
(1) outstanding bonds, as defined in subdivision 3, paragraphs (a), clause (2), and (b);
(2) contracts, as defined in subdivision 3, paragraph (a), clauses (3) and (4);
(3) credit enhanced bonds to which the revenues derived from tax increments are
pledged, but only to the extent that revenues of the district for which the credit enhanced
bonds were issued are insufficient to pay the bonds and to the extent that the increments
from the applicable pooling percent share for the district are insufficient; or
(4) the amount provided by the tax increment financing plan to be paid under
subdivision 2, paragraphs (b), (d), and (e).
(b) The district must be decertified and the pledge of tax increment discharged
when the outstanding bonds have been defeased and when sufficient money has been set
aside to pay, based on the increment to be collected through the end of the calendar year,
the following amounts:
(1) contractual obligations as defined in subdivision 3, paragraph (a), clauses (3)
and (4);
(2) the amount specified in the tax increment financing plan for activities qualifying
under subdivision 2, paragraph (b), that have not been funded with the proceeds of bonds
qualifying under paragraph (a), clause (1); and
(3) the additional expenditures permitted by the tax increment financing plan for
housing activities under an election under subdivision 2, paragraph (d), that have not been
funded with the proceeds of bonds qualifying under paragraph (a), clause (1).
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for districts certified after June 30,
2003.
new text end