HF 3170

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to tax increment financing; making technical 
  1.3             and minor policy changes; amending Minnesota Statutes 
  1.4             2002, sections 469.174, subdivision 11; 469.175, 
  1.5             subdivision 4a; 469.176, subdivision 4d; 469.1761, 
  1.6             subdivision 1; 469.1771, subdivision 5; 469.178, 
  1.7             subdivision 1; Minnesota Statutes 2003 Supplement, 
  1.8             sections 116J.556; 469.174, subdivision 25; 469.177, 
  1.9             subdivision 1; repealing Minnesota Statutes 2002, 
  1.10            sections 469.176, subdivision 1a; 469.1766. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  Minnesota Statutes 2003 Supplement, section 
  1.13  116J.556, is amended to read: 
  1.14     116J.556 [LOCAL MATCH REQUIREMENT.] 
  1.15     (a) In order to qualify for a grant under sections 116J.551 
  1.16  to 116J.557, the municipality must pay for at least one-quarter 
  1.17  of the project costs as a local match.  The municipality shall 
  1.18  pay an amount of the project costs equal to at least 12 percent 
  1.19  of the cleanup costs from the municipality's general fund, a 
  1.20  property tax levy for that purpose, or other unrestricted money 
  1.21  available to the municipality (excluding tax increments).  These 
  1.22  unrestricted moneys may be spent for project costs, other than 
  1.23  cleanup costs, and qualify for the local match payment equal to 
  1.24  12 percent of cleanup costs.  The rest of the local match may be 
  1.25  paid with tax increments, regional, state, or federal money 
  1.26  available for the redevelopment of brownfields or any other 
  1.27  money available to the municipality. 
  1.28     (b) If the development authority establishes a tax 
  2.1   increment financing district or hazardous substance subdistrict 
  2.2   on the site to pay for part of the local match requirement, the 
  2.3   district or subdistrict must be decertified when an amount of 
  2.4   tax increments equal to no more than three times the costs of 
  2.5   implementing the response action plan for the site and the 
  2.6   administrative costs for the district or subdistrict have been 
  2.7   received, after deducting the amount of the state grant. 
  2.8      [EFFECTIVE DATE.] This section is effective the day 
  2.9   following final enactment.  
  2.10     Sec. 2.  Minnesota Statutes 2002, section 469.174, 
  2.11  subdivision 11, is amended to read: 
  2.12     Subd. 11.  [HOUSING DISTRICT.] "Housing district" means a 
  2.13  type of tax increment financing district which consists of a 
  2.14  project, or a portion of a project, intended for occupancy, in 
  2.15  part, by persons or families of low and moderate income, as 
  2.16  defined in chapter 462A, Title II of the National Housing Act of 
  2.17  1934, the National Housing Act of 1959, the United States 
  2.18  Housing Act of 1937, as amended, Title V of the Housing Act of 
  2.19  1949, as amended, any other similar present or future federal, 
  2.20  state, or municipal legislation, or the regulations promulgated 
  2.21  under any of those acts.  A district does not qualify as a 
  2.22  housing district under this subdivision if the fair market value 
  2.23  of the improvements which are constructed in the district for 
  2.24  commercial uses or for uses other than low and moderate income 
  2.25  housing consists of more than 20 percent of the total fair 
  2.26  market value of the planned improvements in the development plan 
  2.27  or agreement.  The fair market value of the improvements may be 
  2.28  determined using the cost of construction, capitalized income, 
  2.29  or other appropriate method of estimating market value, and that 
  2.30  satisfies the requirements of section 469.1761.  Housing project 
  2.31  means a project, or a portion of a project, that meets all of 
  2.32  the qualifications of a housing district under this subdivision, 
  2.33  whether or not actually established as a housing district. 
  2.34     [EFFECTIVE DATE.] This section is effective for districts 
  2.35  for which the request for certification was filed with the 
  2.36  county auditor after October 5, 1989, except (1) the new 
  3.1   language is effective for requests for certification made after 
  3.2   June 30, 2004, and (2) the fair market value of the improvements 
  3.3   which are constructed for commercial uses in a district for 
  3.4   which the request for certification was filed with the county 
  3.5   auditor after October 5, 1989, and before July 1, 2004, may not 
  3.6   exceed more than 20 percent of total fair market value of the 
  3.7   planned improvements in the development plan or agreement. 
  3.8      Sec. 3.  Minnesota Statutes 2003 Supplement, section 
  3.9   469.174, subdivision 25, is amended to read: 
  3.10     Subd. 25.  [INCREMENT.] "Increment," "tax increment," "tax 
  3.11  increment revenues," "revenues derived from tax increment," and 
  3.12  other similar terms for a district include: 
  3.13     (1) taxes paid by the captured net tax capacity, but 
  3.14  excluding any excess taxes, as computed under section 469.177; 
  3.15     (2) the proceeds from the sale or lease of property, 
  3.16  tangible or intangible, to the extent purchased by the authority 
  3.17  with tax increments; 
  3.18     (3) principal and interest received on loans or other 
  3.19  advances made by the authority with tax increments; and 
  3.20     (4) interest or other investment earnings on or from tax 
  3.21  increments; 
  3.22     (5) repayment or return of tax increments made to the 
  3.23  authority under agreements for districts for which the request 
  3.24  for certification was made after August 1, 1993; and 
  3.25     (6) the market value homestead credit paid to the authority 
  3.26  under section 273.1384. 
  3.27     [EFFECTIVE DATE.] This section is effective for tax 
  3.28  increment financing districts, regardless of when the request 
  3.29  for certification was made, including districts for which the 
  3.30  request for certification was made before August 1, 1979. 
  3.31     Sec. 4.  Minnesota Statutes 2002, section 469.175, 
  3.32  subdivision 4a, is amended to read: 
  3.33     Subd. 4a.  [FILING PLAN WITH STATE.] (a) The authority must 
  3.34  file a copy of the tax increment financing plan and amendments 
  3.35  to the plan with the commissioner of revenue.  The authority 
  3.36  must also file a copy of the development plan or the project 
  4.1   plan for the project area with the commissioner of revenue.  The 
  4.2   commissioner of revenue shall provide a copy of a plan to the 
  4.3   state auditor upon request and the state auditor. 
  4.4      (b) Filing under this subdivision must be made within 60 
  4.5   days after the latest of: 
  4.6      (1) the filing of the request for certification of the 
  4.7   district; 
  4.8      (2) approval of the plan by the municipality; or 
  4.9      (3) adoption of the plan by the authority. 
  4.10     [EFFECTIVE DATE.] This section is effective for plans filed 
  4.11  after July 1, 2004. 
  4.12     Sec. 5.  Minnesota Statutes 2002, section 469.176, 
  4.13  subdivision 4d, is amended to read: 
  4.14     Subd. 4d.  [HOUSING DISTRICTS.] Revenue derived from tax 
  4.15  increment from a housing district must be used solely to finance 
  4.16  the cost of housing projects as defined in section sections 
  4.17  469.174, subdivision 11, and 469.1761.  The cost of public 
  4.18  improvements directly related to the housing projects and the 
  4.19  allocated administrative expenses of the authority may be 
  4.20  included in the cost of a housing project. 
  4.21     [EFFECTIVE DATE.] This section is effective for all 
  4.22  districts to which the provisions of Minnesota Statutes, section 
  4.23  469.1761, applies.  
  4.24     Sec. 6.  Minnesota Statutes 2002, section 469.1761, 
  4.25  subdivision 1, is amended to read: 
  4.26     Subdivision 1.  [REQUIREMENT IMPOSED.] (a) In order for a 
  4.27  tax increment financing district to qualify as a housing 
  4.28  district,: 
  4.29     (1) the income limitations provided in this section must be 
  4.30  satisfied; and 
  4.31     (2) no more than 20 percent of the square footage of 
  4.32  buildings that receive assistance from tax increments may 
  4.33  consist of commercial, retail, or other nonresidential uses.  
  4.34     (b) The requirements imposed by this section apply to 
  4.35  residential property receiving assistance financed with tax 
  4.36  increments, including interest reduction, land transfers at less 
  5.1   than the authority's cost of acquisition, utility service or 
  5.2   connections, roads, parking facilities, or other subsidies.  The 
  5.3   provisions of this section do not apply to districts located in 
  5.4   a targeted area as defined in section 462C.02, subdivision 9, 
  5.5   clause (e). 
  5.6      [EFFECTIVE DATE.] This section is effective for districts 
  5.7   for which the request for certification was made after June 30, 
  5.8   2004. 
  5.9      Sec. 7.  Minnesota Statutes 2003 Supplement, section 
  5.10  469.177, subdivision 1, is amended to read: 
  5.11     Subdivision 1.  [ORIGINAL NET TAX CAPACITY.] (a) Upon or 
  5.12  after adoption of a tax increment financing plan, the auditor of 
  5.13  any county in which the district is situated shall, upon request 
  5.14  of the authority, certify the original net tax capacity of the 
  5.15  tax increment financing district and that portion of the 
  5.16  district overlying any subdistrict as described in the tax 
  5.17  increment financing plan and shall certify in each year 
  5.18  thereafter the amount by which the original net tax capacity has 
  5.19  increased or decreased as a result of a change in tax exempt 
  5.20  status of property within the district and any subdistrict, 
  5.21  reduction or enlargement of the district or changes pursuant to 
  5.22  subdivision 4.  
  5.23     (b) If the classification under section 273.13 of property 
  5.24  located in a district changes to a classification that has a 
  5.25  different assessment ratio, the original net tax capacity of 
  5.26  that property must be redetermined at the time when its use is 
  5.27  changed as if the property had originally been classified in the 
  5.28  same class in which it is classified after its use is changed. 
  5.29     (c) The amount to be added to the original net tax capacity 
  5.30  of the district as a result of previously tax exempt real 
  5.31  property within the district becoming taxable equals the net tax 
  5.32  capacity of the real property as most recently assessed pursuant 
  5.33  to section 273.18 or, if that assessment was made more than one 
  5.34  year prior to the date of title transfer rendering the property 
  5.35  taxable, the net tax capacity assessed by the assessor at the 
  5.36  time of the transfer.  If improvements are made to tax exempt 
  6.1   property after certification of the district and before the 
  6.2   parcel becomes taxable, the assessor shall, at the request of 
  6.3   the authority, separately assess the estimated market value of 
  6.4   the improvements.  If the property becomes taxable, the county 
  6.5   auditor shall add to original net tax capacity, the net tax 
  6.6   capacity of the parcel, excluding the separately assessed 
  6.7   improvements.  If substantial taxable improvements were made to 
  6.8   a parcel after certification of the district and if the property 
  6.9   later becomes tax exempt, in whole or part, as a result of the 
  6.10  authority acquiring the property through foreclosure or exercise 
  6.11  of remedies under a lease or other revenue agreement or as a 
  6.12  result of tax forfeiture, the amount to be added to the original 
  6.13  net tax capacity of the district as a result of the property 
  6.14  again becoming taxable is the amount of the parcel's value that 
  6.15  was included in original net tax capacity when the parcel was 
  6.16  first certified.  The amount to be added to the original net tax 
  6.17  capacity of the district as a result of enlargements equals the 
  6.18  net tax capacity of the added real property as most recently 
  6.19  certified by the commissioner of revenue as of the date of 
  6.20  modification of the tax increment financing plan pursuant to 
  6.21  section 469.175, subdivision 4. 
  6.22     (d) If the net tax capacity of a property increases because 
  6.23  the property no longer qualifies under the Minnesota 
  6.24  Agricultural Property Tax Law, section 273.111; the Minnesota 
  6.25  Open Space Property Tax Law, section 273.112; or the 
  6.26  Metropolitan Agricultural Preserves Act, chapter 473H, or 
  6.27  because platted, unimproved property is improved or three years 
  6.28  pass market value is increased after approval of the plat under 
  6.29  section 273.11, subdivision 1 subdivision 14, 14a, or 14b, the 
  6.30  increase in net tax capacity must be added to the original net 
  6.31  tax capacity.  
  6.32     (e) The amount to be subtracted from the original net tax 
  6.33  capacity of the district as a result of previously taxable real 
  6.34  property within the district becoming tax exempt, or a reduction 
  6.35  in the geographic area of the district, shall be the amount of 
  6.36  original net tax capacity initially attributed to the property 
  7.1   becoming tax exempt or being removed from the district.  If the 
  7.2   net tax capacity of property located within the tax increment 
  7.3   financing district is reduced by reason of a court-ordered 
  7.4   abatement, stipulation agreement, voluntary abatement made by 
  7.5   the assessor or auditor or by order of the commissioner of 
  7.6   revenue, the reduction shall be applied to the original net tax 
  7.7   capacity of the district when the property upon which the 
  7.8   abatement is made has not been improved since the date of 
  7.9   certification of the district and to the captured net tax 
  7.10  capacity of the district in each year thereafter when the 
  7.11  abatement relates to improvements made after the date of 
  7.12  certification.  The county auditor may specify reasonable form 
  7.13  and content of the request for certification of the authority 
  7.14  and any modification thereof pursuant to section 469.175, 
  7.15  subdivision 4.  
  7.16     (f) If a parcel of property contained a substandard 
  7.17  building that was demolished or removed and if the authority 
  7.18  elects to treat the parcel as occupied by a substandard building 
  7.19  under section 469.174, subdivision 10, paragraph (b), the 
  7.20  auditor shall certify the original net tax capacity of the 
  7.21  parcel using the greater of (1) the current net tax capacity of 
  7.22  the parcel, or (2) the estimated market value of the parcel for 
  7.23  the year in which the building was demolished or removed, but 
  7.24  applying the class rates for the current year. 
  7.25     (g) For a redevelopment district qualifying under section 
  7.26  469.174, subdivision 10, paragraph (a), clause (4), as a 
  7.27  qualified disaster area, the auditor shall certify the value of 
  7.28  the land as the original tax capacity for any parcel in the 
  7.29  district that contains a building that suffered substantial 
  7.30  damage as a result of the disaster or emergency. 
  7.31     [EFFECTIVE DATE.] This section is effective for land 
  7.32  platted on or after August 1, 1991.  
  7.33     Sec. 8.  Minnesota Statutes 2002, section 469.1771, 
  7.34  subdivision 5, is amended to read: 
  7.35     Subd. 5.  [DISPOSITION OF PAYMENTS.] If the authority does 
  7.36  not have sufficient increments or other available money to make 
  8.1   a payment required by this section, the municipality that 
  8.2   approved the district must use any available money to make the 
  8.3   payment including the levying of property taxes.  Money received 
  8.4   by the county auditor under this section must be distributed as 
  8.5   excess increments under section 469.176, subdivision 2, 
  8.6   paragraph (a) (c), clause (4), except that if the county auditor 
  8.7   receives the payment after (1) 60 days from a municipality's 
  8.8   receipt of the state auditor's notification under subdivision 1, 
  8.9   paragraph (c), of noncompliance requiring the payment, or (2) 
  8.10  the commencement of an action by the county attorney to compel 
  8.11  the payment, then no distributions may be made to the 
  8.12  municipality that approved the tax increment financing district. 
  8.13     [EFFECTIVE DATE.] This section is effective at the same 
  8.14  time as the amendments to Minnesota Statutes, section 469.176, 
  8.15  subdivision 2, by Laws 2003, chapter 127, article 10, section 11.
  8.16     Sec. 9.  Minnesota Statutes 2002, section 469.178, 
  8.17  subdivision 1, is amended to read: 
  8.18     Subdivision 1.  [GENERALLY.] Notwithstanding any other law, 
  8.19  no bonds, payment for which tax increment is pledged, shall be 
  8.20  issued in connection with any project for which tax increment 
  8.21  financing has been undertaken except as authorized in this 
  8.22  section.  The proceeds from the bonds shall be used only in 
  8.23  accordance with section 469.176, subdivision subdivisions 4 to 
  8.24  4l, as if the proceeds were tax increment, except that a tax 
  8.25  increment financing plan need not be adopted for any project for 
  8.26  which tax increment financing has been undertaken prior to 
  8.27  August 1, 1979, pursuant to laws not requiring a tax increment 
  8.28  financing plan.  The bonds are not included for purposes of 
  8.29  computing the net debt of any municipality. 
  8.30     [EFFECTIVE DATE.] This section is effective for tax 
  8.31  increment financing districts for which the request for 
  8.32  certification was made after August 1, 1979. 
  8.33     Sec. 10.  [REPEALER.] 
  8.34     Minnesota Statutes 2002, sections 469.176, subdivision 1a; 
  8.35  and 469.1766, are repealed. 
  8.36     [EFFECTIVE DATE.] The repeal of Minnesota Statutes, section 
  9.1   469.1766, is effective for districts for which the request for 
  9.2   certification was made after August 1, 1993.  The repeal of 
  9.3   Minnesota Statutes, section 469.176, subdivision 1a, is 
  9.4   effective the day following final enactment, provided that 
  9.5   Minnesota Statutes, section 469.176, subdivision 1a, is 
  9.6   satisfied for any district to which it applies, if bonds have 
  9.7   been issued, property acquired, or public improvements 
  9.8   constructed before the end of the three-year period, regardless 
  9.9   of whether the action was undertaken before or after 
  9.10  certification of the district.