HF 1830

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to tax increment financing; modifying the 
  1.3             state aid offset; changing local approval requirements 
  1.4             for special laws relating to tax increment financing 
  1.5             in certain circumstances; amending Minnesota Statutes 
  1.6             1994, sections 273.1399, subdivisions 1, 2, 6, and by 
  1.7             adding a subdivision; 469.177, subdivision 6; and 
  1.8             469.179, by adding a subdivision; repealing Minnesota 
  1.9             Statutes 1994, section 469.175, subdivision 7a. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  Minnesota Statutes 1994, section 273.1399, 
  1.12  subdivision 1, is amended to read: 
  1.13     Subdivision 1.  [DEFINITIONS.] For purposes of this 
  1.14  section, the following terms have the meanings given. 
  1.15     (a) "Qualifying captured net tax capacity" means the 
  1.16  following amounts:  
  1.17     (1) The captured net tax capacity of a new or the expanded 
  1.18  part of an existing economic development or soils condition tax 
  1.19  increment financing district, other than a qualified 
  1.20  manufacturing district, for which certification was requested 
  1.21  after April 30, 1990;. 
  1.22     (2) the captured net tax capacity of a qualified 
  1.23  manufacturing district, multiplied by the following percentage 
  1.24  based on the number of years that have elapsed since the 
  1.25  assessment year of the original net tax capacity.  In no case 
  1.26  may the final amounts be less than zero or greater than the 
  1.27  total captured net tax capacity of the district: 
  2.1           Number of Years        Percentage
  2.2                  1                    0
  2.3                  2                   20
  2.4                  3                   40
  2.5                  4                   60
  2.6                  5                   80
  2.7                  6 or more          100;
  2.8      (3) The captured net tax capacity of a new or the expanded 
  2.9   part of an existing tax increment financing district, other than 
  2.10  a qualified housing district, qualified hazardous substance 
  2.11  subdistrict, or an economic development or soils condition 
  2.12  district, for which certification was requested after April 30, 
  2.13  1990, multiplied by the following percentage based on the number 
  2.14  of years that have elapsed since the assessment year of the 
  2.15  original net tax capacity.  In no case may the final amounts be 
  2.16  less than zero or greater than the total captured net tax 
  2.17  capacity of the district. 
  2.18           Number of     Renewal and     All other 
  2.19           years         Renovation      Districts
  2.20                         Districts
  2.21           0 to 5           0                0 
  2.22              6            12.5              6.25
  2.23              7            25               12.5 
  2.24              8            37.5             18.75 
  2.25              9            50               25 
  2.26             10            62.5             31.25 
  2.27             11            75               37.5 
  2.28             12            87.5             43.75 
  2.29             13            100              50 
  2.30             14            100              56.25 
  2.31             15            100              62.5 
  2.32             16            100              68.75 
  2.33             17            100              75 
  2.34             18            100              81.25 
  2.35             19            100              87.5 
  2.36             20            100              93.75 
  3.1              21 or more    100              100 
  3.2      In the case of (3) The following rules apply to a hazardous 
  3.3   substance subdistrict,.  The applicable percentage under clause 
  3.4   (2) must be determined under the "all other districts" category. 
  3.5   The number of years must be measured from the date of 
  3.6   certification of the subdistrict for purposes of the additional 
  3.7   captured net tax capacity resulting from the reduction in the 
  3.8   subdistrict's or site's original net tax capacity.  After 
  3.9   termination of the overlying district, captured net tax capacity 
  3.10  includes the full amount that is captured by the subdistrict. 
  3.11     (4) Qualified captured tax capacity does not include the 
  3.12  captured tax capacity of exempt districts under subdivision 6.  
  3.13     (b) The terms defined in section 469.174 have the meanings 
  3.14  given in that section. 
  3.15     (c) "Qualified manufacturing district" means an economic 
  3.16  development district that qualifies under section 469.176, 
  3.17  subdivision 4c, paragraph (a), without regard to clauses (2) and 
  3.18  (5), for which certification was requested after June 30, 1991, 
  3.19  located in a home rule charter or statutory city that has a 
  3.20  population under 10,000 according to the last federal census. 
  3.21     (d) "Qualified housing district" means a housing district 
  3.22  for a residential rental project or projects in which the only 
  3.23  properties receiving assistance from revenues derived from tax 
  3.24  increments from the district meet all of the requirements for a 
  3.25  low-income housing credit under section 42 of the Internal 
  3.26  Revenue Code of 1986, as amended through December 31, 1992, 
  3.27  regardless of whether the project actually receives a low-income 
  3.28  housing credit. 
  3.29     (e) "Qualified hazardous substance subdistrict" means a 
  3.30  hazardous substance subdistrict in which the municipality has 
  3.31  made an election to make an alternative local contribution as 
  3.32  provided under section 469.175, subdivision 7a. 
  3.33     Sec. 2.  Minnesota Statutes 1994, section 273.1399, 
  3.34  subdivision 2, is amended to read: 
  3.35     Subd. 2.  [REPORTING.] The county auditor shall calculate 
  3.36  the qualifying captured net tax capacity amount for each 
  4.1   municipal part of each school district in the county and report 
  4.2   the amounts to the commissioner of revenue at the time and in 
  4.3   the manner prescribed by the commissioner.  (a) The commissioner 
  4.4   of revenue shall use the retained captured value, tax increment, 
  4.5   and other information reported in the abstract of tax lists 
  4.6   supplement in administering the provisions of this section. 
  4.7      (b) Each tax increment authority or municipality must by 
  4.8   March 15 of each year submit to the commissioner of revenue a 
  4.9   report on local contributions made to each tax increment 
  4.10  district in the preceding year.  The commissioner shall 
  4.11  prescribe the form and content of the report, including the 
  4.12  sources and amounts of contributions and any other information 
  4.13  the commissioner requires.  Submission of a local contribution 
  4.14  report is required for a tax increment district to be exempt 
  4.15  from the aid reduction provisions of this section. 
  4.16     Sec. 3.  Minnesota Statutes 1994, section 273.1399, 
  4.17  subdivision 6, is amended to read: 
  4.18     Subd. 6.  [EXEMPTION; ETHANOL PROJECTS EXEMPT DISTRICTS.] 
  4.19  (a) The provisions of this section do not apply to exempt tax 
  4.20  increment financing districts as specified by this subdivision. 
  4.21     (b) A tax increment financing district for an ethanol 
  4.22  production facility that satisfies all of the following 
  4.23  requirements is exempt: 
  4.24     (1) The district is an economic development district, that 
  4.25  qualifies under section 469.176, subdivision 4c, paragraph (a), 
  4.26  clause (1). 
  4.27     (2) The facility is certified by the commissioner of 
  4.28  revenue agriculture to qualify for state payments for ethanol 
  4.29  development under section 41A.09 to the extent funds are 
  4.30  available. 
  4.31     (3) Increments from the district are used only to finance 
  4.32  the qualifying ethanol development project located in the 
  4.33  district or to pay for administrative costs of the district. 
  4.34     (4) The district is located outside of the seven-county 
  4.35  metropolitan area, as defined in section 473.121. 
  4.36     (5) The tax increment financing plan was approved by a 
  5.1   resolution of the county board. 
  5.2      (6) The exemption provided by this paragraph applies until 
  5.3   the first year after the total amount of increment for the 
  5.4   district does not exceed exceeds $1,000,000.  The county auditor 
  5.5   shall notify the commissioners of revenue and education of the 
  5.6   expiration of the exemption by June 1 of the year in which the 
  5.7   auditor projects the revenues from increments will exceed 
  5.8   $1,000,000. 
  5.9      (c) A qualified housing district is exempt. 
  5.10     (d) A district is exempt if the municipality elects at the 
  5.11  time of approving the tax increment financing plan for the 
  5.12  district to make a qualifying local contribution.  In order to 
  5.13  qualify for the exemption in each year, the authority or the 
  5.14  municipality must make a qualifying local contribution equal to 
  5.15  the listed percentages of increment from the district or 
  5.16  subdistrict: 
  5.17     (1) for an economic development district, 17.5 percent; 
  5.18     (2) for a housing district or a renewal and renovation 
  5.19  district, 15 percent; 
  5.20     (3) for a redevelopment district or a mined underground 
  5.21  space district, 12.5 percent; 
  5.22     (4) for a hazardous waste subdistrict or a soils condition 
  5.23  district, ten percent. 
  5.24     The amount of the local contribution must be made out of 
  5.25  unrestricted money of the authority or municipality, such as the 
  5.26  general fund, a property tax levy, or a federal or a state 
  5.27  grant-in-aid which may be spent for general government 
  5.28  purposes.  The local contribution may not be made, directly or 
  5.29  indirectly, with tax increments or developer payments as defined 
  5.30  under section 469.1766.  The local contribution must be used to 
  5.31  pay project costs and cannot be used for general government 
  5.32  purposes or for improvements or costs that the authority or 
  5.33  municipality planned to incur absent the project.  The authority 
  5.34  or municipality may request contributions from other local 
  5.35  government entities that will benefit from the district's 
  5.36  activities.  These contributions reduce the local contribution 
  6.1   required of the municipality or authority by this paragraph.  
  6.2   Cities, counties, towns, and schools may contribute to paying 
  6.3   these costs, notwithstanding any other law to the contrary. 
  6.4      If the state contributes to the project costs through a 
  6.5   direct grant or similar incentive, the required local 
  6.6   contribution is reduced by one-half of the dollar amount of the 
  6.7   state grant or other similar incentive. 
  6.8      Sec. 4.  Minnesota Statutes 1994, section 273.1399, is 
  6.9   amended by adding a subdivision to read: 
  6.10     Subd. 7.  [APPLICATION TO EXTENSIONS BY SPECIAL LAW.] The 
  6.11  provisions of this section apply to a tax increment financing 
  6.12  district, notwithstanding the date on which the request for 
  6.13  certification was made, if the duration limit of the district 
  6.14  under section 469.176 is extended by a special law.  The section 
  6.15  applies beginning for the first taxes payable year after the 
  6.16  district would have terminated under general law and the aid 
  6.17  reduction is determined by using 100 percent of the captured tax 
  6.18  capacity as the qualified captured tax capacity of the 
  6.19  district.  The exemption provided by subdivision 6, paragraph 
  6.20  (d), does not apply. 
  6.21     Sec. 5.  Minnesota Statutes 1994, section 469.177, 
  6.22  subdivision 6, is amended to read: 
  6.23     Subd. 6.  [REQUEST FOR CERTIFICATION OF NEW TAX INCREMENT 
  6.24  FINANCING DISTRICT.] A request for certification of a new tax 
  6.25  increment financing district pursuant to subdivision 1 or of a 
  6.26  modification to an existing tax increment financing district 
  6.27  pursuant to section 469.175, subdivision 4, received by the 
  6.28  county auditor on or before July 1 June 30 of the calendar year 
  6.29  shall be recognized by the county auditor in determining local 
  6.30  tax rates for the current and subsequent levy years.  Requests 
  6.31  received by the county auditor after July 1 June 30 of the 
  6.32  calendar year shall not be recognized by the county auditor in 
  6.33  determining local tax rates for the current levy year but shall 
  6.34  be recognized by the county auditor in determining local tax 
  6.35  rates for subsequent levy years.  
  6.36     Sec. 6.  Minnesota Statutes 1994, section 469.179, is 
  7.1   amended by adding a subdivision to read: 
  7.2      Subd. 4.  [LOCAL APPROVAL OF SPECIAL LAWS.] If a special 
  7.3   law allows an extension of the duration limit of an existing tax 
  7.4   increment financing district under section 469.176 or allows 
  7.5   establishment of a new district with a longer duration limit 
  7.6   than that permitted by general law, the "affected local 
  7.7   government units," for purposes of section 645.021 and article 
  7.8   XII, section 2, of the Minnesota Constitution, include the city 
  7.9   or town, the school district, and the county in which the tax 
  7.10  increment district is located. 
  7.11     Sec. 7.  [REPEALER.] 
  7.12     Minnesota Statutes 1994, section 469.175, subdivision 7a, 
  7.13  is repealed. 
  7.14     Sec. 8.  [EFFECTIVE DATE.] 
  7.15     Sections 1 to 3 are effective if the request for the 
  7.16  certification of a new tax increment financing district is made 
  7.17  after June 30, 1995; the sections do not apply to additions of 
  7.18  new area to existing tax increment financing districts.  The 
  7.19  amendment in section 2, adding paragraph (a) to Minnesota 
  7.20  Statutes 1994, section 273.1399, subdivision 2, however, applies 
  7.21  to all tax increment financing districts for which the request 
  7.22  for certification was made after April 30, 1990, including 
  7.23  additions of new area to existing districts.  Section 5 is 
  7.24  effective June 29, 1995, and applies to all requests for 
  7.25  certifications received after that date.  Sections 4 and 6 are 
  7.26  effective for special laws, if their enactment occurs on or 
  7.27  after the enactment day of this act.