HF 2956

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; clarifying the 
  1.3             calculation of local contributions in lieu of state 
  1.4             aid reductions; making technical changes; correcting a 
  1.5             special law for the city of Morris; amending Minnesota 
  1.6             Statutes 1995 Supplement, sections 273.1399, 
  1.7             subdivision 6; 469.175, subdivision 5; and 469.176, 
  1.8             subdivision 2; Laws 1995, chapter 264, article 5, 
  1.9             section 40, subdivision 1. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  Minnesota Statutes 1995 Supplement, section 
  1.12  273.1399, subdivision 6, is amended to read: 
  1.13     Subd. 6.  [EXEMPT DISTRICTS.] (a) The provisions of this 
  1.14  section do not apply to exempt tax increment financing districts 
  1.15  as specified by this subdivision. 
  1.16     (b) A tax increment financing district for an ethanol 
  1.17  production facility that satisfies all of the following 
  1.18  requirements is exempt: 
  1.19     (1) The district is an economic development district, that 
  1.20  qualifies under section 469.176, subdivision 4c, paragraph (a), 
  1.21  clause (1). 
  1.22     (2) The facility is certified by the commissioner of 
  1.23  agriculture to qualify for state payments for ethanol 
  1.24  development under section 41A.09 to the extent funds are 
  1.25  available. 
  1.26     (3) Increments from the district are used only to finance 
  1.27  the qualifying ethanol development project located in the 
  2.1   district or to pay for administrative costs of the district. 
  2.2      (4) The district is located outside of the seven-county 
  2.3   metropolitan area, as defined in section 473.121. 
  2.4      (5) The tax increment financing plan was approved by a 
  2.5   resolution of the county board. 
  2.6      (6) The exemption provided by this paragraph applies until 
  2.7   the first year after the total amount of increment for the 
  2.8   district exceeds $1,500,000.  The county auditor shall notify 
  2.9   the commissioner of revenue of the expiration of the exemption 
  2.10  by June 1 of the year in which the auditor projects the revenues 
  2.11  from increments will exceed $1,500,000.  On or before the 
  2.12  expiration of the exemption, the municipality may elect to make 
  2.13  a qualifying local contribution under paragraph (d) in lieu of 
  2.14  the state aid reduction. 
  2.15     (c) A qualified housing district is exempt. 
  2.16     (d)(1) A district is exempt if the municipality elects at 
  2.17  the time of approving the tax increment financing plan for the 
  2.18  district to make a qualifying local contribution.  To qualify 
  2.19  for the exemption in each year, the authority or the 
  2.20  municipality must make a qualifying local contribution equal to 
  2.21  the listed percentages of increment from the district or 
  2.22  subdistrict: 
  2.23     (1) (A) for an economic development district, a housing 
  2.24  district, or a renewal and renovation district, ten percent; 
  2.25     (2) (B) for a redevelopment district, a mined underground 
  2.26  space district, a hazardous substance subdistrict, or a soils 
  2.27  condition district, 7.5 percent. 
  2.28     (2) If the municipality elects to make a qualifying 
  2.29  contribution and fails to make the required contribution for a 
  2.30  year, the state aid reduction applies for the year.  The state 
  2.31  aid reduction equals the greater of (A) the required local 
  2.32  contribution or (B) the amount of the aid reduction that applies 
  2.33  under subdivision 3.  For a district exempt under paragraph (b), 
  2.34  no qualifying local contribution is required for years in which 
  2.35  the district is exempt. 
  2.36     The maximum local contribution for all districts in the 
  3.1   municipality is limited to (3)(A) If the sum of required local 
  3.2   contributions for all districts in the municipality exceeds two 
  3.3   percent of city net tax capacity as defined in section 477A.011, 
  3.4   subdivision 20, for a year, the municipality's total required 
  3.5   local contribution for that year is limited to two percent of 
  3.6   net tax capacity to qualify for the exemption under this 
  3.7   subdivision.  The municipality may allocate the contribution 
  3.8   among the districts on which it has made elections as it 
  3.9   determines appropriate. 
  3.10     (B) If a municipality makes an election under this 
  3.11  subdivision for a district in a year in which item (A) applies, 
  3.12  a minimum annual qualifying contribution must be made for the 
  3.13  district equal to the lesser of 0.25 percent of city net tax 
  3.14  capacity or three percent of increment revenues.  This minimum 
  3.15  contribution applies for the life of the district for each year 
  3.16  that the restriction in item (A) applies and is in addition to 
  3.17  the contribution required by item (A). 
  3.18     (4) The amount of the local contribution must be made out 
  3.19  of unrestricted money of the authority or municipality, such as 
  3.20  the general fund, a property tax levy, or a federal or a state 
  3.21  grant-in-aid which may be spent for general government 
  3.22  purposes.  The local contribution may not be made, directly or 
  3.23  indirectly, with tax increments or developer payments as defined 
  3.24  under section 469.1766.  The local contribution must be used to 
  3.25  pay project costs and cannot be used for general government 
  3.26  purposes or for improvements or costs that the authority or 
  3.27  municipality planned to incur absent the project.  The authority 
  3.28  or municipality may request contributions from other local 
  3.29  government entities that will benefit from the district's 
  3.30  activities.  These contributions reduce the local contribution 
  3.31  required of the municipality or authority by this paragraph.  
  3.32  Cities, counties, towns, and schools may contribute to paying 
  3.33  these costs, notwithstanding any other law to the contrary. 
  3.34     (5) The municipality may make a local contribution in 
  3.35  excess of the required contribution for a year.  If it does so, 
  3.36  the municipality may credit the excess to a local contribution 
  4.1   account for the district.  The balance in the account may be 
  4.2   used to meet the requirements for qualifying local contributions 
  4.3   for later years.  No interest or investment earnings may be 
  4.4   credited or imputed to the account, except those (A) actually 
  4.5   paid by the municipality out of its unrestricted funds or by 
  4.6   another person or entity, other than a developer as used in 
  4.7   section 469.1766, and (B) used as required for a qualifying 
  4.8   local contribution. 
  4.9      (6) If the state contributes to the project costs through a 
  4.10  direct grant or similar incentive, the required local 
  4.11  contribution is reduced by one-half of the dollar amount of the 
  4.12  state grant or other similar incentive. 
  4.13     Sec. 2.  Minnesota Statutes 1995 Supplement, section 
  4.14  469.175, subdivision 5, is amended to read: 
  4.15     Subd. 5.  [ANNUAL DISCLOSURE.] (a) For all tax increment 
  4.16  financing districts, whether created prior or subsequent to 
  4.17  August 1, 1979, on or before July 1 of each year, the authority 
  4.18  shall submit to the county board, the county auditor, the school 
  4.19  board, state auditor and, if the authority is other than the 
  4.20  municipality, the governing body of the municipality, a report 
  4.21  of the status of the district.  The report shall include the 
  4.22  following information:  the amount and the source of revenue in 
  4.23  the account, the amount and purpose of expenditures from the 
  4.24  account, the amount of any pledge of revenues, including 
  4.25  principal and interest on any outstanding bonded indebtedness, 
  4.26  the original net tax capacity of the district, the captured net 
  4.27  tax capacity retained by the authority, the captured net tax 
  4.28  capacity shared with other taxing districts, the tax increment 
  4.29  received, and any additional information necessary to 
  4.30  demonstrate compliance with any applicable tax increment 
  4.31  financing plan. 
  4.32     (b) An annual statement showing the tax increment received 
  4.33  and expended in that year, the original net tax capacity, 
  4.34  captured net tax capacity, amount of outstanding bonded 
  4.35  indebtedness, the amount of the district's increments paid to 
  4.36  other governmental bodies, the amount paid for administrative 
  5.1   costs, the sum of increments paid, directly or indirectly, for 
  5.2   activities and improvements located outside of the district, and 
  5.3   any additional information the authority deems necessary shall 
  5.4   be published in a newspaper of general circulation in the 
  5.5   municipality.  If the fiscal disparities contribution for the 
  5.6   district is computed under section 469.177, subdivision 3, 
  5.7   paragraph (a), the annual statement must disclose that fact and 
  5.8   indicate the amount of increased property tax imposed on other 
  5.9   properties in the municipality as a result of the fiscal 
  5.10  disparities contribution.  The commissioner of revenue shall 
  5.11  prescribe the form of this statement and the method for 
  5.12  calculating the increased property taxes.  The authority must 
  5.13  publish the annual statement for a year no later than July 1 of 
  5.14  the next year.  The authority must provide a copy of the annual 
  5.15  statement to the state auditor by the time it submits it for 
  5.16  publication.  
  5.17     Sec. 3.  Minnesota Statutes 1995 Supplement, section 
  5.18  469.176, subdivision 2, is amended to read: 
  5.19     Subd. 2.  [EXCESS TAX INCREMENTS.] (a) In any year in which 
  5.20  the tax increment exceeds the amount necessary to pay the costs 
  5.21  authorized by the tax increment financing plan, including the 
  5.22  amount necessary to cancel any tax levy as provided in section 
  5.23  475.61, subdivision 3, the authority shall use the excess amount 
  5.24  to do any of the following:  (1) prepay any outstanding bonds, 
  5.25  (2) discharge the pledge of tax increment therefor, (3) pay into 
  5.26  an escrow account dedicated to the payment of such bond, or (4) 
  5.27  return the excess amount to the county auditor who shall 
  5.28  distribute the excess amount to the municipality, county, and 
  5.29  school district in which the tax increment financing district is 
  5.30  located in direct proportion to their respective local tax 
  5.31  rates.  The county auditor must report to the commissioner of 
  5.32  children, families, and learning the amount of any excess tax 
  5.33  increment distributed to a school district within 30 days of the 
  5.34  distribution. 
  5.35     (b) The amounts distributed to a city or county must be 
  5.36  deducted from the levy limits of the governmental unit for the 
  6.1   following year.  In calculating the levy limit base for later 
  6.2   years, the amount deducted must be treated as a local government 
  6.3   aid payment. 
  6.4      Sec. 4.  Laws 1995, chapter 264, article 5, section 40, 
  6.5   subdivision 1, is amended to read:  
  6.6      Subdivision 1.  [AUTHORIZATION.] Notwithstanding the 
  6.7   provisions of Minnesota Statutes, section 469.175, subdivision 
  6.8   4, paragraph (b), the economic development authority of the city 
  6.9   of Morris may, within one year after the effective date of this 
  6.10  section, enlarge the geographic area of tax increment financing 
  6.11  district No. 5 to include a parcel identified as lot 2, block 2 
  6.12  3, Stevens county - Morris industrial park.  The district is 
  6.13  established under and subject to Minnesota Statutes, sections 
  6.14  469.174 to 469.178, except: 
  6.15     (1) the duration limit for the district and enlarged area 
  6.16  is December 31, 2005; and 
  6.17     (2) the buildings to be constructed in the enlarged 
  6.18  geographic area of the district may, notwithstanding the 
  6.19  provisions of Minnesota Statutes, section 469.176, subdivision 
  6.20  4c, include space necessary for and related to the manufacturing 
  6.21  facility located on parcels contiguous to the district.  The 
  6.22  maximum space for nonmanufacturing uses may not exceed 40 
  6.23  percent of the square footage of the buildings.  This test may 
  6.24  be applied based on a two-year test period. 
  6.25     Sec. 5.  [EFFECTIVE DATE.] 
  6.26     Section 1 is effective for all tax increment financing 
  6.27  districts and subdistricts for which an election was or is made 
  6.28  under Minnesota Statutes, section 273.1399, subdivision 6, 
  6.29  paragraph (d), except the amendment adding paragraph (d), clause 
  6.30  (3), item (B) applies to elections made after the day following 
  6.31  final enactment.  Section 2 is effective beginning for annual 
  6.32  statements required to be published for calendar year 1995.  
  6.33  Section 3 is effective the day following final enactment and 
  6.34  applies to all tax increment financing districts for which the 
  6.35  request for certification was made after August 1, 1979.  
  6.36  Notwithstanding the provisions of Minnesota Statutes, section 
  7.1   469.1782, subdivision 2, section 4 is effective without local 
  7.2   approval on the effective date of Laws 1995, chapter 264, 
  7.3   article 5, section 40.