HF 2104

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; eliminating soils condition tax 
  1.3             increment financing districts; expanding the 
  1.4             definition of redevelopment tax increment financing 
  1.5             districts; amending Minnesota Statutes 1996, sections 
  1.6             469.174, subdivisions 10 and 12; 469.175, subdivision 
  1.7             3; and 469.176, subdivisions 1b and 4j; repealing 
  1.8             Minnesota Statutes 1996, sections 469.174, subdivision 
  1.9             19; and 469.176, subdivision 4b. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  Minnesota Statutes 1996, section 469.174, 
  1.12  subdivision 10, is amended to read: 
  1.13     Subd. 10.  [REDEVELOPMENT DISTRICT.] (a) "Redevelopment 
  1.14  district" means a type of tax increment financing district 
  1.15  consisting of a project, or portions of a project, within which 
  1.16  the authority finds by resolution that one of the following 
  1.17  conditions, reasonably distributed throughout the district, 
  1.18  exists: 
  1.19     (1) parcels consisting of 70 percent of the area of the 
  1.20  district are occupied by buildings, streets, utilities, or other 
  1.21  improvements and more than 50 percent of the buildings, not 
  1.22  including outbuildings, are structurally substandard to a degree 
  1.23  requiring substantial renovation or clearance; or 
  1.24     (2) the property consists of vacant, unused, underused, 
  1.25  inappropriately used, or infrequently used railyards, rail 
  1.26  storage facilities, or excessive or vacated railroad 
  1.27  rights-of-way; or 
  2.1      (3) the presence of hazardous substances, pollution, or 
  2.2   contaminants will require removal or remediation action, and 
  2.3   with respect to each parcel in the proposed district either: 
  2.4      (i) the estimated cost of the proposed removal and 
  2.5   remediation action exceeds the fair market value of the land 
  2.6   before completion of the preparation; or 
  2.7      (ii) the estimated cost of the proposed removal or 
  2.8   remediation action exceeds $2 per square foot for the area of 
  2.9   the parcel. 
  2.10     (b) For purposes of this subdivision, "structurally 
  2.11  substandard" shall mean containing defects in structural 
  2.12  elements or a combination of deficiencies in essential utilities 
  2.13  and facilities, light and ventilation, fire protection including 
  2.14  adequate egress, layout and condition of interior partitions, or 
  2.15  similar factors, which defects or deficiencies are of sufficient 
  2.16  total significance to justify substantial renovation or 
  2.17  clearance.  
  2.18     A building is not structurally substandard if it is in 
  2.19  compliance with the building code applicable to new buildings or 
  2.20  could be modified to satisfy the building code at a cost of less 
  2.21  than 15 percent of the cost of constructing a new structure of 
  2.22  the same square footage and type on the site.  The municipality 
  2.23  may find that a building is not disqualified as structurally 
  2.24  substandard under the preceding sentence on the basis of 
  2.25  reasonably available evidence, such as the size, type, and age 
  2.26  of the building, the average cost of plumbing, electrical, or 
  2.27  structural repairs, or other similar reliable evidence.  If the 
  2.28  evidence supports a reasonable conclusion that the building is 
  2.29  not disqualified as structurally substandard, the municipality 
  2.30  may make such a determination without an interior inspection or 
  2.31  an independent, expert appraisal of the cost of repair and 
  2.32  rehabilitation of the building. 
  2.33     A parcel is deemed to be occupied by a structurally 
  2.34  substandard building for purposes of the finding under paragraph 
  2.35  (a) if all of the following conditions are met: 
  2.36     (1) the parcel was occupied by a substandard building 
  3.1   within three years of the filing of the request for 
  3.2   certification of the parcel as part of the district with the 
  3.3   county auditor; 
  3.4      (2) the substandard building was demolished or removed by 
  3.5   the authority or the demolition or removal was financed by the 
  3.6   authority or was done by a developer under a development 
  3.7   agreement with the authority; 
  3.8      (3) the authority found by resolution before the demolition 
  3.9   or removal that the parcel was occupied by a structurally 
  3.10  substandard building and that after demolition and clearance the 
  3.11  authority intended to include the parcel within a district; and 
  3.12     (4) upon filing the request for certification of the tax 
  3.13  capacity of the parcel as part of a district, the authority 
  3.14  notifies the county auditor that the original tax capacity of 
  3.15  the parcel must be adjusted as provided by section 469.177, 
  3.16  subdivision 1, paragraph (h). 
  3.17     (c) For purposes of this subdivision, a parcel is not 
  3.18  occupied by buildings, streets, utilities, or other improvements 
  3.19  unless 15 percent of the area of the parcel contains 
  3.20  improvements. 
  3.21     (d) For districts consisting of two or more noncontiguous 
  3.22  areas, each area must qualify as a redevelopment district under 
  3.23  paragraph (a) to be included in the district, and the entire 
  3.24  area of the district must satisfy paragraph (a). 
  3.25     (e) The proposed removal or remediation action supporting 
  3.26  the creation of a district under paragraph (a), clause (3), must 
  3.27  be specified in a development action response plan to satisfy 
  3.28  the requirements of paragraph (a), clause (3). 
  3.29     Sec. 2.  Minnesota Statutes 1996, section 469.174, 
  3.30  subdivision 12, is amended to read: 
  3.31     Subd. 12.  [ECONOMIC DEVELOPMENT DISTRICT.] "Economic 
  3.32  development district" means a type of tax increment financing 
  3.33  district which consists of any project, or portions of a 
  3.34  project, not meeting the requirements found in the definition of 
  3.35  redevelopment district, renewal and renovation district, soils 
  3.36  condition district, mined underground space development 
  4.1   district, or housing district, but which the authority finds to 
  4.2   be in the public interest because: 
  4.3      (1) it will discourage commerce, industry, or manufacturing 
  4.4   from moving their operations to another state or municipality; 
  4.5   or 
  4.6      (2) it will result in increased employment in the state; or 
  4.7      (3) it will result in preservation and enhancement of the 
  4.8   tax base of the state. 
  4.9      Sec. 3.  Minnesota Statutes 1996, section 469.175, 
  4.10  subdivision 3, is amended to read: 
  4.11     Subd. 3.  [MUNICIPALITY APPROVAL.] A county auditor shall 
  4.12  not certify the original net tax capacity of a tax increment 
  4.13  financing district until the tax increment financing plan 
  4.14  proposed for that district has been approved by the municipality 
  4.15  in which the district is located.  If an authority that proposes 
  4.16  to establish a tax increment financing district and the 
  4.17  municipality are not the same, the authority shall apply to the 
  4.18  municipality in which the district is proposed to be located and 
  4.19  shall obtain the approval of its tax increment financing plan by 
  4.20  the municipality before the authority may use tax increment 
  4.21  financing.  The municipality shall approve the tax increment 
  4.22  financing plan only after a public hearing thereon after 
  4.23  published notice in a newspaper of general circulation in the 
  4.24  municipality at least once not less than ten days nor more than 
  4.25  30 days prior to the date of the hearing.  The published notice 
  4.26  must include a map of the area of the district from which 
  4.27  increments may be collected and, if the project area includes 
  4.28  additional area, a map of the project area in which the 
  4.29  increments may be expended.  The hearing may be held before or 
  4.30  after the approval or creation of the project or it may be held 
  4.31  in conjunction with a hearing to approve the project.  Before or 
  4.32  at the time of approval of the tax increment financing plan, the 
  4.33  municipality shall make the following findings, and shall set 
  4.34  forth in writing the reasons and supporting facts for each 
  4.35  determination: 
  4.36     (1) that the proposed tax increment financing district is a 
  5.1   redevelopment district, a renewal or renovation district, a 
  5.2   mined underground space development district, a housing 
  5.3   district, a soils condition district, or an economic development 
  5.4   district; if the proposed district is a redevelopment district 
  5.5   or a renewal or renovation district, the reasons and supporting 
  5.6   facts for the determination that the district meets the criteria 
  5.7   of section 469.174, subdivision 10, paragraph (a), clauses (1) 
  5.8   and (2), or subdivision 10a, must be retained and made available 
  5.9   to the public by the authority until the district has been 
  5.10  terminated. 
  5.11     (2) that the proposed development or redevelopment, in the 
  5.12  opinion of the municipality, would not reasonably be expected to 
  5.13  occur solely through private investment within the reasonably 
  5.14  foreseeable future and that the increased market value of the 
  5.15  site that could reasonably be expected to occur without the use 
  5.16  of tax increment financing would be less than the increase in 
  5.17  the market value estimated to result from the proposed 
  5.18  development after subtracting the present value of the projected 
  5.19  tax increments for the maximum duration of the district 
  5.20  permitted by the plan.  The requirements of this clause do not 
  5.21  apply if the district is a qualified housing district, as 
  5.22  defined in section 273.1399, subdivision 1. 
  5.23     (3) that the tax increment financing plan conforms to the 
  5.24  general plan for the development or redevelopment of the 
  5.25  municipality as a whole. 
  5.26     (4) that the tax increment financing plan will afford 
  5.27  maximum opportunity, consistent with the sound needs of the 
  5.28  municipality as a whole, for the development or redevelopment of 
  5.29  the project by private enterprise. 
  5.30     (5) that the municipality elects the method of tax 
  5.31  increment computation set forth in section 469.177, subdivision 
  5.32  3, clause (b), if applicable. 
  5.33     When the municipality and the authority are not the same, 
  5.34  the municipality shall approve or disapprove the tax increment 
  5.35  financing plan within 60 days of submission by the authority, or 
  5.36  the plan shall be deemed approved.  When the municipality and 
  6.1   the authority are not the same, the municipality may not amend 
  6.2   or modify a tax increment financing plan except as proposed by 
  6.3   the authority pursuant to subdivision 4.  Once approved, the 
  6.4   determination of the authority to undertake the project through 
  6.5   the use of tax increment financing and the resolution of the 
  6.6   governing body shall be conclusive of the findings therein and 
  6.7   of the public need for the financing. 
  6.8      Sec. 4.  Minnesota Statutes 1996, section 469.176, 
  6.9   subdivision 1b, is amended to read: 
  6.10     Subd. 1b.  [DURATION LIMITS; TERMS.] (a) No tax increment 
  6.11  shall in any event be paid to the authority 
  6.12     (1) after 25 years from date of receipt by the authority of 
  6.13  the first tax increment for a mined underground space 
  6.14  development district, 
  6.15     (2) after 15 years after receipt by the authority of the 
  6.16  first increment for a renewal and renovation district, 
  6.17     (3) after 12 years from approval of the tax increment 
  6.18  financing plan for a soils condition district, 
  6.19     (4) after nine years from the date of the receipt, or 11 
  6.20  years from approval of the tax increment financing plan, 
  6.21  whichever is less, for an economic development district, 
  6.22     (5) (4) for a housing district or a redevelopment district, 
  6.23  after 20 years from the date of receipt by the authority of the 
  6.24  first tax increment by the authority pursuant to section 
  6.25  469.175, subdivision 1, paragraph (b); or, if no provision is 
  6.26  made under section 469.175, subdivision 1, paragraph (b), after 
  6.27  25 years from the date of receipt by the authority of the first 
  6.28  increment. 
  6.29     (b) For purposes of determining a duration limit under this 
  6.30  subdivision or subdivision 1e that is based on the receipt of an 
  6.31  increment, any increments from taxes payable in the year in 
  6.32  which the district terminates shall be paid to the authority.  
  6.33  This paragraph does not affect a duration limit calculated from 
  6.34  the date of approval of the tax increment financing plan or 
  6.35  based on the recovery of costs or to a duration limit under 
  6.36  subdivision 1c.  This paragraph does not supersede the 
  7.1   restrictions on payment of delinquent taxes in subdivision 1f. 
  7.2      Sec. 5.  Minnesota Statutes 1996, section 469.176, 
  7.3   subdivision 4j, is amended to read: 
  7.4      Subd. 4j.  [REDEVELOPMENT DISTRICTS.] At least 90 percent 
  7.5   of the revenues derived from tax increments from a redevelopment 
  7.6   district or renewal and renovation district must be used to 
  7.7   finance the cost of correcting conditions that allow designation 
  7.8   of redevelopment and renewal and renovation districts under 
  7.9   section 469.174.  These costs include acquiring properties 
  7.10  containing structurally substandard buildings or improvements or 
  7.11  hazardous substances, pollution, or contaminants, acquiring 
  7.12  adjacent parcels necessary to provide a site of sufficient size 
  7.13  to permit development, demolition of structures, clearing of the 
  7.14  land, the removal or remediation necessary to development of the 
  7.15  land, and installation of utilities, roads, sidewalks, and 
  7.16  parking facilities for the site.  The allocated administrative 
  7.17  expenses of the authority, including the cost of preparation of 
  7.18  the development action response plan, may be included in the 
  7.19  qualifying costs. 
  7.20     Sec. 6.  [REPEALER.] 
  7.21     Minnesota Statutes 1996, sections 469.174, subdivision 19; 
  7.22  and 469.176, subdivision 4b, are repealed. 
  7.23     Sec. 7.  [EFFECTIVE DATE.] 
  7.24     Sections 1 to 6 are effective for districts for which 
  7.25  certification is requested after June 30, 1997.  Soils condition 
  7.26  districts for which certification is requested before that date 
  7.27  will continue to be subject to the provisions of Minnesota 
  7.28  Statutes 1996, sections 469.174, subdivision 19, 469.176, 
  7.29  subdivisions 1b and 4b, for the duration of their existence.