HF 617

as introduced - 88th Legislature (2013 - 2014) Posted on 02/14/2013 02:01pm

A bill for an act
relating to tax increment financing; authorizing transit improvement districts;
amending Minnesota Statutes 2012, sections 469.174, subdivision 14, by adding
a subdivision; 469.175, subdivision 3; 469.176, subdivision 1b, by adding a
subdivision.

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

Section 1.

Minnesota Statutes 2012, section 469.174, subdivision 14, is amended to read:

Subd. 14.

Administrative expenses.

"Administrative expenses" means all
expenditures of an authority other than:

(1) amounts paid for the purchase of land;

(2) amounts paid to contractors or others providing materials and services, including
architectural and engineering services, directly connected with the physical development
of the real property in the project;

(3) relocation benefits paid to or services provided for persons residing or businesses
located in the project;

new text begin (4) amounts paid for services, as authorized by section 469.176, subdivision 4n,
paragraph (a), clause (4) or (7), for a transit improvement district;
new text end

deleted text begin (4) deleted text end new text begin (5) new text end amounts used to pay principal or interest on, fund a reserve for, or sell at a
discount bonds issued pursuant to section 469.178; or

deleted text begin (5) deleted text end new text begin (6) new text end amounts used to pay other financial obligations to the extent those obligations
were used to finance costs described in clauses (1) to (3).

For districts for which the requests for certifications were made before August 1,
1979, or after June 30, 1982, "administrative expenses" includes amounts paid for services
provided by bond counsel, fiscal consultants, and planning or economic development
consultants.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for requests for certification made
after June 30, 2013.
new text end

Sec. 2.

Minnesota Statutes 2012, section 469.174, is amended by adding a subdivision
to read:

new text begin Subd. 30. new text end

new text begin Transit improvement district. new text end

new text begin (a) For purposes of this subdivision and
section 469.176, subdivision 4n, the following terms have the meanings given.
new text end

new text begin (b) "Transit improvement district" means a type of tax increment financing district
consisting of a project, or portions of a project, within which the authority finds by
resolution that:
new text end

new text begin (1) the nearest boundary of each parcel of the district lies within one-half mile
of a qualifying transit line; and
new text end

new text begin (2) establishment of the district is in the public interest because it will aid in
financing improvements or services that will increase the effectiveness of the transit.
new text end

new text begin (c) "Streetcar line" means a form of transportation service provided to the public on
a regular and continuing basis that:
new text end

new text begin (1) operates on rails using a fixed guideway system;
new text end

new text begin (2) provides circulator service that includes interconnection with regular route
transit; and
new text end

new text begin (3) is located entirely within a statutory or home rule charter city.
new text end

new text begin (d) "Qualifying transit line" means a light rail transit line, commuter rail line, or bus
rapid transit line, identified by and operated or to be operated by the council, as defined in
section 473.121, or by the commissioner of transportation, or a streetcar line.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for requests for certification made
after June 30, 2013.
new text end

Sec. 3.

Minnesota Statutes 2012, section 469.175, subdivision 3, is amended to read:

Subd. 3.

Municipality approval.

(a) A county auditor shall not certify the original
net tax capacity of a tax increment financing district until the tax increment financing plan
proposed for that district has been approved by the municipality in which the district
is located. If an authority that proposes to establish a tax increment financing district
and the municipality are not the same, the authority shall apply to the municipality in
which the district is proposed to be located and shall obtain the approval of its tax
increment financing plan by the municipality before the authority may use tax increment
financing. The municipality shall approve the tax increment financing plan only after a
public hearing thereon after published notice in a newspaper of general circulation in the
municipality at least once not less than ten days nor more than 30 days prior to the date
of the hearing. The published notice must include a map of the area of the district from
which increments may be collected and, if the project area includes additional area, a map
of the project area in which the increments may be expended. The hearing may be held
before or after the approval or creation of the project or it may be held in conjunction with
a hearing to approve the project.

(b) Before or at the time of approval of the tax increment financing plan, the
municipality shall make the following findings, and shall set forth in writing the reasons
and supporting facts for each determination:

(1) that the proposed tax increment financing district is a redevelopment district,
a renewal or renovation district, a housing district, a soils condition district, new text begin transit
improvement district, new text end or an economic development district; if the proposed district is a
redevelopment district or a renewal or renovation district, the reasons and supporting facts
for the determination that the district meets the criteria of section 469.174, subdivision
10, paragraph (a), clauses (1) and (2), or subdivision 10a, must be documented in writing
and retained and made available to the public by the authority until the district has been
terminated;

(2) that, in the opinion of the municipality:

(i) the proposed development or redevelopment would not reasonably be expected to
occur solely through private investment within the reasonably foreseeable future; and

(ii) the increased market value of the site that could reasonably be expected to occur
without the use of tax increment financing would be less than the increase in the market
value estimated to result from the proposed development after subtracting the present
value of the projected tax increments for the maximum duration of the district permitted
by the plan. The requirements of this item do not apply if the district is a housing district;

(3) that the tax increment financing plan conforms to the general plan for the
development or redevelopment of the municipality as a whole;

(4) that the tax increment financing plan will afford maximum opportunity,
consistent with the sound needs of the municipality as a whole, for the development or
redevelopment of the project by private enterprise;

(5) that the municipality elects the method of tax increment computation set forth in
section 469.177, subdivision 3, paragraph (b), if applicable.

(c) When the municipality and the authority are not the same, the municipality shall
approve or disapprove the tax increment financing plan within 60 days of submission by the
authority. When the municipality and the authority are not the same, the municipality may
not amend or modify a tax increment financing plan except as proposed by the authority
pursuant to subdivision 4. Once approved, the determination of the authority to undertake
the project through the use of tax increment financing and the resolution of the governing
body shall be conclusive of the findings therein and of the public need for the financing.

(d) For a district that is subject to the requirements of paragraph (b), clause (2),
item (ii), the municipality's statement of reasons and supporting facts must include all of
the following:

(1) an estimate of the amount by which the market value of the site will increase
without the use of tax increment financing;

(2) an estimate of the increase in the market value that will result from the
development or redevelopment to be assisted with tax increment financing; and

(3) the present value of the projected tax increments for the maximum duration of
the district permitted by the tax increment financing plan.

(e) For purposes of this subdivision, "site" means the parcels on which the
development or redevelopment to be assisted with tax increment financing will be located.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for requests for certification made
after June 30, 2013.
new text end

Sec. 4.

Minnesota Statutes 2012, section 469.176, subdivision 1b, is amended to read:

Subd. 1b.

Duration limits; terms.

(a) No tax increment shall in any event be
paid to the authority:

(1) after 15 years after receipt by the authority of the first increment for a renewal
and renovation district;

(2) after 20 years after receipt by the authority of the first increment for a soils
condition district;

(3) after eight years after receipt by the authority of the first increment for an
economic development district;

(4) for a housing district, new text begin transit improvement district, new text end a compact development
district, or a redevelopment district, after 25 years from the date of receipt by the authority
of the first increment.

(b) For purposes of determining a duration limit under this subdivision or subdivision
1e that is based on the receipt of an increment, any increments from taxes payable in the year
in which the district terminates shall be paid to the authority. This paragraph does not affect
a duration limit calculated from the date of approval of the tax increment financing plan or
based on the recovery of costs or to a duration limit under subdivision 1c. This paragraph
does not supersede the restrictions on payment of delinquent taxes in subdivision 1f.

(c) An action by the authority to waive or decline to accept an increment has no
effect for purposes of computing a duration limit based on the receipt of increment under
this subdivision or any other provision of law. The authority is deemed to have received an
increment for any year in which it waived or declined to accept an increment, regardless
of whether the increment was paid to the authority.

(d) Receipt by a hazardous substance subdistrict of an increment as a result of a
reduction in original net tax capacity under section 469.174, subdivision 7, paragraph
(b), does not constitute receipt of increment by the overlying district for the purpose of
calculating the duration limit under this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for requests for certification made
after June 30, 2013.
new text end

Sec. 5.

Minnesota Statutes 2012, section 469.176, is amended by adding a subdivision
to read:

new text begin Subd. 4n. new text end

new text begin Transit improvement districts. new text end

new text begin (a) The authority may expend
tax increments from a transit improvement district for any purpose permitted for a
redevelopment district or a housing district and for:
new text end

new text begin (1) acquiring, constructing, or improving transit stations;
new text end

new text begin (2) acquiring and improving green space related to the transit improvements;
new text end

new text begin (3) streetscape improvements, such as improvements to streets and sidewalks or
other public right-of-way for the purpose of enhancing the movement, safety, convenience,
or enjoyment of users of the qualifying transit line and other pedestrians, including
decorative lighting and surfaces, plantings, display and exhibit space, adornments, seating,
and shelters;
new text end

new text begin (4) operating paratransit or circulator systems that serve passengers of or feed
passengers to the qualifying transit line;
new text end

new text begin (5) making transit improvement loans as authorized by section 469.351, subdivision
4;
new text end

new text begin (6) implementing transit area improvement plans that meet the requirements of
section 469.351, subdivision 3;
new text end

new text begin (7) paying the capital costs of a streetcar line; and
new text end

new text begin (8) financing mitigation costs related to the qualifying transit line.
new text end

new text begin (b) The authority must not expend tax increments from a transit improvement district
for the direct cost of construction or operation of the qualifying transit line, except as
explicitly permitted under paragraph (a).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for requests for certification made
after June 30, 2013.
new text end