1.1 	A bill for an act
1.2 	relating to taxation; tax increment financing; allowing use of increment to offset 
1.3 	state aid reductions; amending Minnesota Statutes 2008, section 469.176, by 
1.4 	adding a subdivision.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. Minnesota Statutes 2008, section 469.176, is amended by adding a 
1.7 	subdivision to read:
1.8 		Subd. 4m.Use to offset state aid reductions. (a) Notwithstanding any other 
1.9 	provision of this section, section 469.1763, or a special law, upon the request of the 
1.10 	municipality, the authority may elect, by resolution, to transfer increments from a district 
1.11 	to the municipality for deposit in its general fund. The permitted transfer for a calendar 
1.12 	year is limited to the amount allowed under paragraph (b). Following the election, 
1.13 	expenditure of increments from the district are limited by the conditions in paragraph (c). 
1.14 	The transferred increments may be expended for any purpose the municipality's general 
1.15 	fund permits.
1.16 	(b) For each calendar year for which transfers are permitted under this section, 
1.17 	the maximum transfer equals the lesser of:
1.18 	(1) the excess of the district's available increment over the sum of:
1.19 	(i) required payments of obligations that will come due during the calendar year or 
1.20 	the first six months of the following calendar year on outstanding bonds and binding 
1.21 	contracts to which the district's increments are pledged; plus
1.22 	(ii) transfers of increments from the district to offset deficits in other districts to be 
1.23 	made during the calendar year under section 469.1763, subdivision 6; or
2.1 	(2) the sum of the following amounts, limited to the relevant amounts that are 
2.2 	effective through the calendar year in which the transfer is to be made:
2.3 	(i) unallotment of aid payments previously certified by the state to be paid to the 
2.4 	municipality during calendar years 2008 to 2012;
2.5 	(ii) reductions in state reimbursement payments for property tax credits to be paid 
2.6 	to the municipality in calendar years 2008 to 2012; and
2.7 	(iii) reductions in local government aids to be paid to the municipality resulting from 
2.8 	reductions in the appropriation or changes in the formula, enacted by the legislature, for 
2.9 	calendar years 2009 to 2012; less
2.10 	(iv) any special levy made by the municipality under section 275.70, subdivision 
2.11 	5, clause (22).
2.12 	(c) Following an election under this subdivision, an authority may expend 
2.13 	increments from the district for only the following purposes:
2.14 	(1) payment of bonds and binding contracts with an entity not under the control of 
2.15 	the municipality or authority to which the district's increments were pledged that were 
2.16 	outstanding when the election was made;
2.17 	(2) transfers to offset deficits in other districts as permitted under section 469.1763, 
2.18 	subdivision 6;
2.19 	(3) administrative expenses of the district; and
2.20 	(4) transfers permitted under this subdivision.
2.21 	(d) The commissioner of revenue shall calculate and certify the amount, if any, of 
2.22 	the reduction under paragraph (b), clause (2), item (iii), for a city, upon request of the city.
2.23 	(e) The authority to transfer increments under this section expires on December 
2.24 	31, 2012.

2.25 	EFFECTIVE DATE. This section is effective the day following final enactment 
2.26 	and applies to increments from any district, regardless of when the request for certification 
2.27 	was made.