SF 1803

as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; modifying the LGA/HACA offset 
  1.3             for certain tax increment financing districts; 
  1.4             amending Minnesota Statutes 1998, section 273.1399, 
  1.5             subdivisions 3, 6, 7, and 8. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1998, section 273.1399, 
  1.8   subdivision 3, is amended to read: 
  1.9      Subd. 3.  [CALCULATION OF EDUCATION AIDS.] For each school 
  1.10  district containing qualifying captured net tax capacity, the 
  1.11  commissioner of children, families, and learning shall compute a 
  1.12  hypothetical state aid amount that would be paid to the school 
  1.13  district if the qualifying captured net tax capacity were 
  1.14  divided by the sales ratio and included in the school district's 
  1.15  adjusted tax capacity for purposes of calculating equalized 
  1.16  levies as defined in section 273.1398, subdivision 1, and 
  1.17  associated state aids.  The commissioner of children, families, 
  1.18  and learning shall notify the commissioner of revenue of the 
  1.19  difference between the actual aid paid and the hypothetical aid 
  1.20  amounts calculated for each school district, broken down by the 
  1.21  municipality that approved the tax increment financing district 
  1.22  containing the qualifying captured net tax capacity.  Fifty 
  1.23  percent of the resulting amount is the reduction in state tax 
  1.24  increment financing aid. 
  1.25     Sec. 2.  Minnesota Statutes 1998, section 273.1399, 
  2.1   subdivision 6, is amended to read: 
  2.2      Subd. 6.  [EXEMPT DISTRICTS.] (a) The provisions of this 
  2.3   section do not apply to exempt tax increment financing districts 
  2.4   as specified by this subdivision. 
  2.5      (b) A tax increment financing district for an ethanol 
  2.6   production facility that satisfies all of the following 
  2.7   requirements is exempt: 
  2.8      (1) The district is an economic development district, that 
  2.9   qualifies under section 469.176, subdivision 4c, paragraph (a), 
  2.10  clause (1). 
  2.11     (2) The facility is certified by the commissioner of 
  2.12  agriculture to qualify for state payments for ethanol 
  2.13  development under section 41A.09 to the extent funds are 
  2.14  available. 
  2.15     (3) Increments from the district are used only to finance 
  2.16  the qualifying ethanol development project located in the 
  2.17  district or to pay for administrative costs of the district. 
  2.18     (4) The district is located outside of the seven-county 
  2.19  metropolitan area, as defined in section 473.121. 
  2.20     (5) The tax increment financing plan was approved by a 
  2.21  resolution of the county board. 
  2.22     (6) The exemption provided by this paragraph applies until 
  2.23  the first year after the total amount of increment for the 
  2.24  district exceeds $1,500,000.  The county auditor shall notify 
  2.25  the commissioner of revenue of the expiration of the exemption 
  2.26  by June 1 of the year in which the auditor projects the revenues 
  2.27  from increments will exceed $1,500,000.  On or before the 
  2.28  expiration of the exemption, the municipality may elect to make 
  2.29  a qualifying local contribution under paragraph (d) (f) in lieu 
  2.30  of the state aid reduction. 
  2.31     (c) A qualified housing district is exempt. 
  2.32     (d) A district is exempt if the state contributes to the 
  2.33  project costs through a direct grant or similar incentive. 
  2.34     (e) A district is exempt for the year following a year when 
  2.35  the commissioner of trade and economic development has 
  2.36  determined that the project financed by tax increments from the 
  3.1   district has resulted in a qualified increase in the number of 
  3.2   jobs in the project area that pay at least poverty level wages.  
  3.3   As used in this subdivision, "poverty level wages" means 
  3.4   compensation on an hourly basis equivalent to 110 percent of the 
  3.5   federal poverty threshold for a family of four; compensation 
  3.6   includes wages, scheduled bonuses, health and dental insurance, 
  3.7   child care, training programs certified by the commissioner of 
  3.8   trade and economic development, and pension benefits.  For a 
  3.9   district located in the metropolitan area defined in section 
  3.10  473.121, subdivision 2, to qualify under this paragraph, the 
  3.11  increase in such jobs must exceed 40.  For districts located 
  3.12  outside the metropolitan area, the increase must exceed ten if 
  3.13  the district is located in a home rule charter or statutory city 
  3.14  or town that has a population of less than 5,000, and the 
  3.15  increase must exceed 20 if the district is located in a larger 
  3.16  municipality. 
  3.17     (f)(1) A district is exempt if the municipality elects at 
  3.18  the time of approving the tax increment financing plan for the 
  3.19  district to make a qualifying local contribution.  To qualify 
  3.20  for the exemption in each year, the authority or the 
  3.21  municipality must make a qualifying local contribution equal to 
  3.22  the listed percentages of increment from the district or 
  3.23  subdistrict: 
  3.24     (A) for an economic development district, a housing 
  3.25  district, or a renewal and renovation district, ten five 
  3.26  percent; 
  3.27     (B) for a redevelopment district, a mined underground space 
  3.28  district, a hazardous substance subdistrict, or a soils 
  3.29  condition district, five 2.5 percent. 
  3.30     (2) If the municipality elects to make a qualifying 
  3.31  contribution and fails to make the required contribution for a 
  3.32  year, the state aid reduction applies for the year.  The state 
  3.33  aid reduction equals the greater of (A) the required local 
  3.34  contribution or (B) the amount of the aid reduction that applies 
  3.35  under subdivision 3.  For a district exempt under paragraph (b), 
  3.36  no qualifying local contribution is required for years in which 
  4.1   the district is exempt. 
  4.2      (3)(A) If the sum of required local contributions for all 
  4.3   districts in the municipality exceeds two percent of city net 
  4.4   tax capacity as defined in section 477A.011, subdivision 20, for 
  4.5   a year, the municipality's total required local contribution for 
  4.6   that year is limited to two percent of net tax capacity to 
  4.7   qualify for the exemption under this subdivision.  The 
  4.8   municipality may allocate the contribution among the districts 
  4.9   on which it has made elections as it determines appropriate. 
  4.10     (B) If a municipality makes an election under this 
  4.11  subdivision for a district in a year in which item (A) applies, 
  4.12  a minimum annual qualifying contribution must be made for the 
  4.13  district equal to the lesser of 0.25 percent of city net tax 
  4.14  capacity or three percent of increment revenues.  This minimum 
  4.15  contribution applies for the life of the district for each year 
  4.16  that the restriction in item (A) applies and is in addition to 
  4.17  the contribution required by item (A). 
  4.18     (4) The amount of the local contribution must be made out 
  4.19  of unrestricted money of the authority or municipality, such as 
  4.20  the general fund, a property tax levy, or a federal or a state 
  4.21  grant-in-aid which may be spent for general government 
  4.22  purposes.  The local contribution may not be made, directly or 
  4.23  indirectly, with tax increments or developer payments as defined 
  4.24  under section 469.1766.  The local contribution must be used to 
  4.25  pay project costs and cannot be used for general government 
  4.26  purposes or for improvements or costs that the authority or 
  4.27  municipality planned to incur absent the project.  The authority 
  4.28  or municipality may request contributions from other local 
  4.29  government entities that will benefit from the district's 
  4.30  activities.  These contributions reduce the local contribution 
  4.31  required of the municipality or authority by this paragraph.  
  4.32  Cities, counties, towns, and schools may contribute to paying 
  4.33  these costs, notwithstanding any other law to the contrary. 
  4.34     (5) The municipality may make a local contribution in 
  4.35  excess of the required contribution for a year.  If it does so, 
  4.36  the municipality may credit the excess to a local contribution 
  5.1   account for the district.  The balance in the account may be 
  5.2   used to meet the requirements for qualifying local contributions 
  5.3   for later years.  No interest or investment earnings may be 
  5.4   credited or imputed to the account, except those (A) actually 
  5.5   paid by the municipality out of its unrestricted funds or by 
  5.6   another person or entity, other than a developer as used in 
  5.7   section 469.1766, and (B) used as required for a qualifying 
  5.8   local contribution. 
  5.9      (6) If the state contributes to the project costs through a 
  5.10  direct grant or similar incentive, the required local 
  5.11  contribution is reduced by one-half of the dollar amount of the 
  5.12  state grant or other similar incentive. 
  5.13     Sec. 3.  Minnesota Statutes 1998, section 273.1399, 
  5.14  subdivision 7, is amended to read: 
  5.15     Subd. 7.  [EXEMPTION; AGRICULTURAL PROCESSING FACILITIES.] 
  5.16  The provisions of this section do not apply to a tax increment 
  5.17  financing district that satisfies all of the following 
  5.18  requirements: 
  5.19     (1) the district is established to construct or expand an 
  5.20  agricultural processing facility; 
  5.21     (2) the construction or expansion of the facility creates, 
  5.22  or upon completion will create, a minimum of five permanent 
  5.23  full-time jobs; 
  5.24     (3) the district is located outside of the seven-county 
  5.25  metropolitan area, as defined in section 473.121; 
  5.26     (4) the tax increment financing plan was approved by a 
  5.27  resolution of the county board; 
  5.28     (5) the municipality approving the tax increment financing 
  5.29  plan agrees to make a local contribution that meets the 
  5.30  requirements of subdivision 6, paragraph (d) (f), except that a 
  5.31  required rate of five 2.5 percent applies and the limitation 
  5.32  under subdivision 6, paragraph (d) (f), clause (3), also 
  5.33  applies; and 
  5.34     (6) the commissioner of agriculture has certified to the 
  5.35  county auditor that the requirements of this subdivision have 
  5.36  been met. 
  6.1      The exemption provided by this subdivision applies until 
  6.2   the first year after the total amount of increment for the 
  6.3   district exceeds $1,500,000.  The county auditor shall notify 
  6.4   the commissioner of revenue of the expiration of the exemption 
  6.5   by June 1 of the year in which the auditor projects the revenues 
  6.6   from increment will exceed $1,500,000. 
  6.7      For purposes of this section, "agricultural processing 
  6.8   facility" means land, buildings, structures, fixtures, and 
  6.9   improvements used or operated primarily for the processing or 
  6.10  production of marketable products from agricultural crops, 
  6.11  including waste and residues from agricultural crops, and 
  6.12  including livestock products, poultry products, and wood 
  6.13  products, but not the raising of livestock or poultry. 
  6.14     Sec. 4.  Minnesota Statutes 1998, section 273.1399, 
  6.15  subdivision 8, is amended to read: 
  6.16     Subd. 8.  [APPLICATION TO EXTENSIONS BY SPECIAL LAW.] The 
  6.17  provisions of this section apply to a tax increment financing 
  6.18  district, notwithstanding the date on which the request for 
  6.19  certification was made, if (1) the duration limit of the 
  6.20  district under section 469.176 is extended by a special law and 
  6.21  (2) the municipality elects under section 469.1782, subdivision 
  6.22  1, clause (2), that this section applies to the extension.  The 
  6.23  section applies beginning for the first taxes payable year after 
  6.24  the district would have terminated under general law and the aid 
  6.25  reduction is determined by using 100 percent of the captured tax 
  6.26  capacity as the qualified captured tax capacity of the 
  6.27  district.  The exemption provided by subdivision 6, 
  6.28  paragraph (d) (f), does not apply. 
  6.29     Sec. 5.  [EFFECTIVE DATE.] 
  6.30     Sections 1 to 4 apply to all tax increment financing 
  6.31  districts that are subject to Minnesota Statutes, section 
  6.32  273.1399, and are effective the day following final enactment.