HF 3876

as introduced - 91st Legislature (2019 - 2020) Posted on 02/27/2020 01:45pm

A bill for an act
relating to taxation; property and local; tax increment financing; extending the
five-year pooling rule to ten years for redevelopment districts located outside the
metro area; amending Minnesota Statutes 2018, section 469.1763, subdivision 3.

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

Section 1.

Minnesota Statutes 2018, section 469.1763, subdivision 3, is amended to read:

Subd. 3.

Five-year rule.

(a) Revenues derived from tax increments paid by properties
in the district are considered to have been expended on an activity within the district under
subdivision 2 only if one of the following occurs:

(1) before or within five years after certification of the district, the revenues are actually
paid to a third party with respect to the activity;

(2) bonds, the proceeds of which must be used to finance the activity, are issued and
sold to a third party before or within five years after certification, the revenues are spent to
repay the bonds, and the proceeds of the bonds either are, on the date of issuance, reasonably
expected to be spent before the end of the later of (i) the five-year period, or (ii) a reasonable
temporary period within the meaning of the use of that term under section 148(c)(1) of the
Internal Revenue Code, or are deposited in a reasonably required reserve or replacement
fund;

(3) binding contracts with a third party are entered into for performance of the activity
before or within five years after certification of the district and the revenues are spent under
the contractual obligation;

(4) costs with respect to the activity are paid before or within five years after certification
of the district and the revenues are spent to reimburse a party for payment of the costs,
including interest on unreimbursed costs; or

(5) expenditures are made for housing purposes as permitted by subdivision 2, paragraphs
(b) and (d), or for public infrastructure purposes within a zone as permitted by subdivision
2, paragraph (e).

(b) For purposes of this subdivision, bonds include subsequent refunding bonds if the
original refunded bonds meet the requirements of paragraph (a), clause (2).

(c) For a redevelopment district or a renewal and renovation district certified after June
30, 2003, and before April 20, 2009, the five-year periods described in paragraph (a) are
extended to ten years after certification of the district. For a redevelopment district certified
after April 20, 2009, and before June 30, 2012, the five-year periods described in paragraph
(a) are extended to eight years after certification of the district. This extension is provided
primarily to accommodate delays in development activities due to unanticipated economic
circumstances.

new text begin (d) For a redevelopment district that is located outside of the metropolitan area defined
in section 473.121, subdivision 2, that is certified after June 30, 2020, the five-year periods
described in paragraph (a) are extended to ten years after certification of the district.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end