Skip to main content Skip to office menu Skip to footer
Capital IconMinnesota Legislature

HF 2331

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:03am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

Line numbers 1.1 1.2 1.3 1.4 1.5 1.6
1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21 1.22 1.23 1.24 1.25 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22 2.23 2.24 2.25 2.26
2.27 2.28
2.29 2.30 2.31 2.32 2.33 2.34 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20 3.21 3.22 3.23 3.24 3.25 3.26 3.27 3.28 3.29 3.30 3.31 3.32 3.33 3.34 3.35 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 4.18 4.19 4.20 4.21 4.22 4.23 4.24 4.25 4.26 4.27 4.28 4.29 4.30 4.31 4.32 4.33 4.34 4.35 4.36 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15 5.16 5.17 5.18 5.19 5.20 5.21 5.22 5.23 5.24 5.25 5.26 5.27 5.28 5.29 5.30 5.31
5.32 5.33
5.34 5.35 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10 6.11 6.12 6.13 6.14 6.15 6.16 6.17
6.18 6.19
6.20 6.21 6.22 6.23 6.24 6.25 6.26 6.27 6.28 6.29 6.30 6.31 6.32 6.33 6.34
7.1 7.2

A bill for an act
relating to tax increment financing; modifying the plan and reporting
requirements; clarifying the definition of administrative expenses; modifying
the interfund loan requirement; amending Minnesota Statutes 2008, sections
469.175, subdivisions 1, 6; 469.176, subdivision 3; 469.178, subdivision 7.

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

Section 1.

Minnesota Statutes 2008, section 469.175, subdivision 1, is amended to read:


Subdivision 1.

Tax increment financing plan.

(a) A tax increment financing plan
shall contain:

(1) a statement of objectives of an authority for the improvement of a project;

(2) a statement as to deleted text beginthe development program for the project, includingdeleted text end the property
within the project, if any, that the authority intends to acquire, identified by parcel number,
identifiable property name, block, or other appropriate means indicating the area in which
the authority intends to acquire properties;

(3) a list of any development activities that the plan proposes to take place within
the project, deleted text beginfor which contracts have been entered into at the time of the preparation of
the plan,
deleted text end including the names of the parties to the contract, the activity governed by the
contract, the new text beginestimated new text endcost stated in the contract, and the expected date of completion
of that activity;

deleted text begin (4) identification or description of the type of any other specific development
reasonably expected to take place within the project, and the date when the development is
likely to occur;
deleted text end

deleted text begin (5)deleted text endnew text begin (4)new text end estimates of the following:

(i) cost of the project, including administrative expensesdeleted text begin, except that if part of the
cost of the project is paid or financed with increment from the tax increment financing
district, the tax increment financing plan for the district must contain an estimate of the
amount of the cost of the project, including administrative expenses,
deleted text endnew text begin and interest costsnew text end that
will be paid or financed with tax increments from the district;

(ii) amount of deleted text beginbonded indebtedness to be incurreddeleted text endnew text begin bonds to be issuednew text end;

deleted text begin (iii) sources of revenue to finance or otherwise pay public costs;
deleted text end

deleted text begin (iv)deleted text endnew text begin (iii)new text end the deleted text beginmost recentdeleted text end new text beginoriginal new text endnet tax capacity of taxable real property within the
tax increment financing district and within any subdistrict;

deleted text begin (v)deleted text end new text begin(iv) new text endthe estimated captured net tax capacity of the tax increment financing district
at completion;

new text begin (v) the total authorized costs to be paid with tax increments, but not to exceed the
estimated tax increments to be generated by the development activity;
new text endand

(vi) the duration of the tax increment financing district's and any subdistrict's
existence;

(6) statements of the authority's alternate estimates of the impact of tax increment
financing on the net tax capacities of all taxing jurisdictions in which the tax increment
financing district is located in whole or in part. For purposes of one statement, the
authority shall assume that the estimated captured net tax capacity would be available to
the taxing jurisdictions without creation of the district, and for purposes of the second
statement, the authority shall assume that none of the estimated captured net tax capacity
would be available to the taxing jurisdictions without creation of the district or subdistrict;

(7) identification and description of studies and analyses used to make the
determination set forth in subdivision 3, clause (2); and

(8) identification of all parcels to be included in the district or any subdistrict.

(b) The authority may specify in the tax increment financing plan the first year in
which it elects to receive increment, up to four years following the year of approval of the
district. This paragraph does not apply to an economic development district.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax increment financing plans
approved after June 30, 2009.
new text end

Sec. 2.

Minnesota Statutes 2008, section 469.175, subdivision 6, is amended to read:


Subd. 6.

Annual financial reporting.

(a) The state auditor shall develop a uniform
system of accounting and financial reporting for tax increment financing districts. The
system of accounting and financial reporting shall, as nearly as possible:

(1) provide for full disclosure of the sources and uses of deleted text beginpublic funds indeleted text endnew text begin tax
increments of
new text end the district;

(2) permit comparison and reconciliation with the affected local government's
accounts and financial reports;

(3) permit auditing of the funds expended on behalf of a district, including a single
district that is part of a multidistrict project or that is funded in part or whole through
the use of a development account funded with tax increments from other districts or
with other public money;

(4) be consistent with generally accepted accounting principles.

(b) The authority must annually submit to the state auditor a financial report
in compliance with paragraph (a). Copies of the report must also be provided to the
county auditor and to the governing body of the municipality, if the authority is not
the municipality. To the extent necessary to permit compliance with the requirement
of financial reporting, the county and any other appropriate local government unit or
private entity must provide the necessary records or information to the authority or the
state auditor as provided by the system of accounting and financial reporting developed
pursuant to paragraph (a). The authority must submit the annual report for a year on or
before August 1 of the next year.

(c) The annual financial report must also include the following items:

(1) the original net tax capacity of the district and any subdistrict under section
469.177, subdivision 1;

(2) the net tax capacity for the reporting period of the district and any subdistrict;

(3) the captured net tax capacity of the district;

(4) any fiscal disparity deduction from the captured net tax capacity under section
469.177, subdivision 3;

(5) the captured net tax capacity retained for tax increment financing under section
469.177, subdivision 2, paragraph (a), clause (1);

(6) any captured net tax capacity distributed among affected taxing districts under
section 469.177, subdivision 2, paragraph (a), clause (2);

(7) the type of district;

(8) the date the municipality approved the tax increment financing plan and the
date of approval of any modification of the tax increment financing plan, the approval of
which requires notice, discussion, a public hearing, and findings under subdivision 4,
paragraph (a);

(9) the date the authority first requested certification of the original net tax capacity
of the district and the date of the request for certification regarding any parcel added
to the district;

(10) the date the county auditor first certified the original net tax capacity of the
district and the date of certification of the original net tax capacity of any parcel added
to the district;

(11) the month and year in which the authority has received or anticipates it will
receive the first increment from the district;

(12) the date the district must be decertified;

(13) for the reporting period and prior years of the district, the actual amount
received from, at least, the following categories:

(i) tax increments paid by the captured net tax capacity retained for tax increment
financing under section 469.177, subdivision 2, paragraph (a), clause (1), but excluding
any excess taxes;

(ii) tax increments that are interest or other investment earnings on or from tax
increments;

(iii) tax increments that are proceeds from the sale or lease of property, tangible or
intangible, purchased by the authority with tax increments;

(iv) tax increments that are repayments of loans or other advances made by the
authority with tax increments;

(v) bond deleted text beginor loandeleted text end proceeds;new text begin and
new text end

deleted text begin (vi) special assessments;
deleted text end

deleted text begin (vii) grants;
deleted text end

deleted text begin (viii) transfers from funds not exclusively associated with the district; and
deleted text end

deleted text begin (ix)deleted text endnew text begin (vi)new text end the market value homestead credit paid to the authority under section
273.1384;

(14) for the reporting period and for the prior years of the district, the actual amount
expended for, at least, the following categories:

(i) acquisition of land and buildings through condemnation or purchase;

(ii) site improvements or preparation costs;

(iii) installation of public utilities, parking facilities, streets, roads, sidewalks, or
other similar public improvements;

(iv) administrative costs, including the allocated cost of the authority;new text begin and
new text end

(v) deleted text beginpublic park facilities, facilities for social, recreational, or conference purposes, or
other similar public improvements; and
deleted text endnew text begin for housing districts, construction of affordable
housing;
new text end

deleted text begin (vi) transfers to funds not exclusively associated with the district;
deleted text end

(15) the amount of any payments for activities and improvements located outside of
the district that are paid for or financed with tax increments;

(16) the amount of payments of principal and interest that are made during the
reporting period on any nondefeased:

(i) general obligation tax increment financing bonds;new text begin and
new text end

(ii) other tax increment financing bondsnew text begin, including pay-as-you-go contracts and
notes
new text end; deleted text beginand
deleted text end

deleted text begin (iii) notes and pay-as-you-go contracts;
deleted text end

(17) the principal amount, at the end of the reporting period, of any nondefeased:

(i) general obligation tax increment financing bonds;new text begin and
new text end

(ii) other tax increment financing bondsnew text begin, including pay-as-you-go contracts and
notes
new text end; deleted text beginand
deleted text end

deleted text begin (iii) notes and pay-as-you-go contracts;
deleted text end

(18) the amount of principal and interest payments that are due for the current
calendar year on any nondefeased:

(i) general obligation tax increment financing bonds;new text begin and
new text end

(ii) other tax increment financing bondsnew text begin, including pay-as-you-go contracts and
notes
new text end; deleted text beginand
deleted text end

deleted text begin (iii) notes and pay-as-you-go contracts;
deleted text end

(19) if the fiscal disparities contribution under chapter 276A or 473F for the district
is computed under section 469.177, subdivision 3, paragraph (a), the amount of new text begintotal
new text endincreased property taxes deleted text beginimposed on other properties in the municipality that approved the
tax increment financing plan as a result of the fiscal disparities contribution;
deleted text endnew text begin to be paid
from outside the tax increment financing district; and
new text end

deleted text begin (20) the estimate, if any, contained in the tax increment financing plan of the amount
of the cost of the project, including administrative expenses, that will be paid or financed
with tax increment; and
deleted text end

deleted text begin (21)deleted text endnew text begin (20)new text end any additional information the state auditor may require.

deleted text begin (d) The commissioner of revenue shall prescribe the method of calculating the
increased property taxes under paragraph (c), clause (19), and the form of the statement
disclosing this information on the annual statement under subdivision 5.
deleted text end

deleted text begin (e)deleted text endnew text begin (d)new text end The reporting requirements imposed by this subdivision apply to districts
certified before, on, and after August 1, 1979.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax increment financing reports
due after December 31, 2009.
new text end

Sec. 3.

Minnesota Statutes 2008, section 469.176, subdivision 3, is amended to read:


Subd. 3.

Limitation on administrative expenses.

new text begin new text end

(a) For districts for which certification was requested before August 1, 1979, or after
June 30, 1982 and before August 1, 2001, no tax increment shall be used to pay any
administrative expenses for a project which exceed ten percent of the total estimated tax
increment expenditures authorized by the tax increment financing plan or the total tax
increment expenditures for the project, whichever is less.

(b) For districts for which certification was requested after July 31, 1979, and before
July 1, 1982, no tax increment shall be used to pay administrative expenses, as defined in
Minnesota Statutes 1980, section 273.73, for a district which exceeds five percent of the
total tax increment expenditures authorized by the tax increment financing plan or the total
estimated tax increment expenditures for the district, whichever is less.

(c) For districts for which certification was requested after July 31, 2001, no tax
increment may be used to pay any administrative expenses for a project which exceed
ten percent of total estimated tax increment expenditures authorized by the tax increment
financing plan or the total tax increments, as defined in section 469.174, subdivision 25,
clause (1), from the district, whichever is less.

new text begin (d) Increments used to pay the county's administrative expenses under subdivision
4h are not subject to the percentage limits in this subdivision.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for all districts, regardless of when
the request for certification was made.
new text end

Sec. 4.

Minnesota Statutes 2008, section 469.178, subdivision 7, is amended to read:


Subd. 7.

Interfund loans.

The authority or municipality may advance or loan
money to finance expenditures under section 469.176, subdivision 4, from its general
fund or any other fund under which it has legal authority to do so. The loan or advance
must be authorized, by resolution of the governing body or of the authority, whichever
has jurisdiction over the fund from which the advance or loan is deleted text beginmadedeleted text endnew text begin authorizednew text end, before
money is transferred, advanced, or spent, whichever is earliest. The resolution may
generally grant to the authority the power to make interfund loans under one or more
tax increment financing plans or for one or more districts. The terms and conditions
for repayment of the loan must be provided in writing and include, at a minimum, the
principal amount, the interest rate, and maximum term. The maximum rate of interest
permitted to be charged is limited to the greater of the rates specified under section
270C.40 or 549.09 as of the date the loan or advance is made, unless the written agreement
states that the maximum interest rate will fluctuate as the interest rates specified under
section 270C.40 or 549.09 are from time to time adjusted.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for interfund loans made after June
30, 2009.
new text end