SF 1826

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

  1.1                          A bill for an act 
  1.2             relating to taxation; authorizing expenditures of tax 
  1.3             increments for job training for employees of 
  1.4             businesses located in tax increment financing 
  1.5             districts; amending Minnesota Statutes 2002, section 
  1.6             469.176, by adding a subdivision; Minnesota Statutes 
  1.7             2003 Supplement, section 469.175, subdivisions 1, 4, 6.
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 2003 Supplement, section 
  1.10  469.175, subdivision 1, is amended to read: 
  1.11     Subdivision 1.  [TAX INCREMENT FINANCING PLAN.] A tax 
  1.12  increment financing plan shall contain:  
  1.13     (1) a statement of objectives of an authority for the 
  1.14  improvement of a project; 
  1.15     (2) a statement as to the development program for the 
  1.16  project, including the property within the project, if any, that 
  1.17  the authority intends to acquire; 
  1.18     (3) a list of any development activities that the plan 
  1.19  proposes to take place within the project, for which contracts 
  1.20  have been entered into at the time of the preparation of the 
  1.21  plan, including the names of the parties to the contract, the 
  1.22  activity governed by the contract, the cost stated in the 
  1.23  contract, and the expected date of completion of that activity; 
  1.24     (4) identification or description of the type of any other 
  1.25  specific development reasonably expected to take place within 
  1.26  the project, and the date when the development is likely to 
  2.1   occur; 
  2.2      (5) estimates of the following:  
  2.3      (i) cost of the project, including administrative expenses, 
  2.4   except that if part of the cost of the project is paid or 
  2.5   financed with increment from the tax increment financing 
  2.6   district, the tax increment financing plan for the district must 
  2.7   contain an estimate of the amount of the cost of the project, 
  2.8   including administrative expenses, that will be paid or financed 
  2.9   with tax increments from the district; 
  2.10     (ii) amount of bonded indebtedness to be incurred; 
  2.11     (iii) sources of revenue to finance or otherwise pay public 
  2.12  costs; 
  2.13     (iv) the most recent net tax capacity of taxable real 
  2.14  property within the tax increment financing district and within 
  2.15  any subdistrict; 
  2.16     (v) the estimated captured net tax capacity of the tax 
  2.17  increment financing district at completion; and 
  2.18     (vi) the duration of the tax increment financing district's 
  2.19  and any subdistrict's existence; 
  2.20     (6) statements of the authority's alternate estimates of 
  2.21  the impact of tax increment financing on the net tax capacities 
  2.22  of all taxing jurisdictions in which the tax increment financing 
  2.23  district is located in whole or in part.  For purposes of one 
  2.24  statement, the authority shall assume that the estimated 
  2.25  captured net tax capacity would be available to the taxing 
  2.26  jurisdictions without creation of the district, and for purposes 
  2.27  of the second statement, the authority shall assume that none of 
  2.28  the estimated captured net tax capacity would be available to 
  2.29  the taxing jurisdictions without creation of the district or 
  2.30  subdistrict; 
  2.31     (7) identification and description of studies and analyses 
  2.32  used to make the determination set forth in subdivision 3, 
  2.33  clause (2); and 
  2.34     (8) identification of all parcels to be included in the 
  2.35  district or any subdistrict; and 
  2.36     (9) identification of any job training costs intended to be 
  3.1   paid by use of tax increments, including the name of the 
  3.2   employer whose employees will be trained and the nature and cost 
  3.3   of the training.  The plan is not required to identify the 
  3.4   provider of the job training. 
  3.5      [EFFECTIVE DATE.] This section applies to districts for 
  3.6   which the request for certification was made after July 31, 
  3.7   1979, and is effective for tax increment financing plans 
  3.8   approved after June 30, 2004.  
  3.9      Sec. 2.  Minnesota Statutes 2003 Supplement, section 
  3.10  469.175, subdivision 4, is amended to read: 
  3.11     Subd. 4.  [MODIFICATION OF PLAN.] (a) A tax increment 
  3.12  financing plan may be modified by an authority. 
  3.13     (b) The authority may make the following modifications only 
  3.14  upon the notice and after the discussion, public hearing, and 
  3.15  findings required for approval of the original plan: 
  3.16     (1) any reduction or enlargement of geographic area of the 
  3.17  project or tax increment financing district that does not meet 
  3.18  the requirements of paragraph (e); 
  3.19     (2) increase in amount of bonded indebtedness to be 
  3.20  incurred; 
  3.21     (3) a determination to capitalize interest on the debt if 
  3.22  that determination was not a part of the original plan, or to 
  3.23  increase or decrease the amount of interest on the debt to be 
  3.24  capitalized; 
  3.25     (4) increase in the portion of the captured net tax 
  3.26  capacity to be retained by the authority; 
  3.27     (5) increase in the estimate of the cost of the project, 
  3.28  including administrative expenses, that will be paid or financed 
  3.29  with tax increment from the district; or 
  3.30     (6) designation of additional property to be acquired by 
  3.31  the authority; or 
  3.32     (7) a decision to pay for job training for employees of a 
  3.33  business located in the district that was not a part of the 
  3.34  original plan. 
  3.35     (c) If an authority changes the type of district to another 
  3.36  type of district, this change is not a modification but requires 
  4.1   the authority to follow the procedure set forth in sections 
  4.2   469.174 to 469.179 for adoption of a new plan, including 
  4.3   certification of the net tax capacity of the district by the 
  4.4   county auditor.  
  4.5      (d) If a redevelopment district or a renewal and renovation 
  4.6   district is enlarged, the reasons and supporting facts for the 
  4.7   determination that the addition to the district meets the 
  4.8   criteria of section 469.174, subdivision 10, paragraph (a), 
  4.9   clauses (1) and (2), or subdivision 10a, must be documented.  
  4.10     (e) The requirements of paragraph (b) do not apply if (1) 
  4.11  the only modification is elimination of parcels from the project 
  4.12  or district and (2)(A) the current net tax capacity of the 
  4.13  parcels eliminated from the district equals or exceeds the net 
  4.14  tax capacity of those parcels in the district's original net tax 
  4.15  capacity or (B) the authority agrees that, notwithstanding 
  4.16  section 469.177, subdivision 1, the original net tax capacity 
  4.17  will be reduced by no more than the current net tax capacity of 
  4.18  the parcels eliminated from the district.  The authority must 
  4.19  notify the county auditor of any modification that reduces or 
  4.20  enlarges the geographic area of a district or a project area.  
  4.21     (f) The geographic area of a tax increment financing 
  4.22  district may be reduced, but shall not be enlarged after five 
  4.23  years following the date of certification of the original net 
  4.24  tax capacity by the county auditor or after August 1, 1984, for 
  4.25  tax increment financing districts authorized prior to August 1, 
  4.26  1979. 
  4.27     [EFFECTIVE DATE.] This section is effective for districts 
  4.28  for which the request for certification was made after July 31, 
  4.29  1979, and is effective for modifications made after June 30, 
  4.30  2004. 
  4.31     Sec. 3.  Minnesota Statutes 2003 Supplement, section 
  4.32  469.175, subdivision 6, is amended to read: 
  4.33     Subd. 6.  [ANNUAL FINANCIAL REPORTING.] (a) The state 
  4.34  auditor shall develop a uniform system of accounting and 
  4.35  financial reporting for tax increment financing districts.  The 
  4.36  system of accounting and financial reporting shall, as nearly as 
  5.1   possible: 
  5.2      (1) provide for full disclosure of the sources and uses of 
  5.3   public funds in the district; 
  5.4      (2) permit comparison and reconciliation with the affected 
  5.5   local government's accounts and financial reports; 
  5.6      (3) permit auditing of the funds expended on behalf of a 
  5.7   district, including a single district that is part of a 
  5.8   multidistrict project or that is funded in part or whole through 
  5.9   the use of a development account funded with tax increments from 
  5.10  other districts or with other public money; 
  5.11     (4) be consistent with generally accepted accounting 
  5.12  principles. 
  5.13     (b) The authority must annually submit to the state auditor 
  5.14  a financial report in compliance with paragraph (a).  Copies of 
  5.15  the report must also be provided to the county auditor and to 
  5.16  the governing body of the municipality, if the authority is not 
  5.17  the municipality.  To the extent necessary to permit compliance 
  5.18  with the requirement of financial reporting, the county and any 
  5.19  other appropriate local government unit or private entity must 
  5.20  provide the necessary records or information to the authority or 
  5.21  the state auditor as provided by the system of accounting and 
  5.22  financial reporting developed pursuant to paragraph (a).  The 
  5.23  authority must submit the annual report for a year on or before 
  5.24  August 1 of the next year. 
  5.25     (c) The annual financial report must also include the 
  5.26  following items: 
  5.27     (1) the original net tax capacity of the district and any 
  5.28  subdistrict under section 469.177, subdivision 1; 
  5.29     (2) the net tax capacity for the reporting period of the 
  5.30  district and any subdistrict; 
  5.31     (3) the captured net tax capacity of the district; 
  5.32     (4) any fiscal disparity deduction from the captured net 
  5.33  tax capacity under section 469.177, subdivision 3; 
  5.34     (5) the captured net tax capacity retained for tax 
  5.35  increment financing under section 469.177, subdivision 2, 
  5.36  paragraph (a), clause (1); 
  6.1      (6) any captured net tax capacity distributed among 
  6.2   affected taxing districts under section 469.177, subdivision 2, 
  6.3   paragraph (a), clause (2); 
  6.4      (7) the type of district; 
  6.5      (8) the date the municipality approved the tax increment 
  6.6   financing plan and the date of approval of any modification of 
  6.7   the tax increment financing plan, the approval of which requires 
  6.8   notice, discussion, a public hearing, and findings under 
  6.9   subdivision 4, paragraph (a); 
  6.10     (9) the date the authority first requested certification of 
  6.11  the original net tax capacity of the district and the date of 
  6.12  the request for certification regarding any parcel added to the 
  6.13  district; 
  6.14     (10) the date the county auditor first certified the 
  6.15  original net tax capacity of the district and the date of 
  6.16  certification of the original net tax capacity of any parcel 
  6.17  added to the district; 
  6.18     (11) the month and year in which the authority has received 
  6.19  or anticipates it will receive the first increment from the 
  6.20  district; 
  6.21     (12) the date the district must be decertified; 
  6.22     (13) for the reporting period and prior years of the 
  6.23  district, the actual amount received from, at least, the 
  6.24  following categories: 
  6.25     (i) tax increments paid by the captured net tax capacity 
  6.26  retained for tax increment financing under section 469.177, 
  6.27  subdivision 2, paragraph (a), clause (1), but excluding any 
  6.28  excess taxes; 
  6.29     (ii) tax increments that are interest or other investment 
  6.30  earnings on or from tax increments; 
  6.31     (iii) tax increments that are proceeds from the sale or 
  6.32  lease of property, tangible or intangible, purchased by the 
  6.33  authority with tax increments; 
  6.34     (iv) tax increments that are repayments of loans or other 
  6.35  advances made by the authority with tax increments; 
  6.36     (v) bond or loan proceeds; 
  7.1      (vi) special assessments; 
  7.2      (vii) grants; and 
  7.3      (viii) transfers from funds not exclusively associated with 
  7.4   the district; 
  7.5      (14) for the reporting period and for the prior years of 
  7.6   the district, the actual amount expended for, at least, the 
  7.7   following categories: 
  7.8      (i) acquisition of land and buildings through condemnation 
  7.9   or purchase; 
  7.10     (ii)  site improvements or preparation costs; 
  7.11     (iii) installation of public utilities, parking facilities, 
  7.12  streets, roads, sidewalks, or other similar public improvements; 
  7.13     (iv) administrative costs, including the allocated cost of 
  7.14  the authority; 
  7.15     (v) public park facilities, facilities for social, 
  7.16  recreational, or conference purposes, or other similar public 
  7.17  improvements; and 
  7.18     (vi) transfers to funds not exclusively associated with the 
  7.19  district; and 
  7.20     (vii) job training as permitted under section 469.176, 
  7.21  subdivision 4m; 
  7.22     (15) for properties sold to developers, the total cost of 
  7.23  the property to the authority and the price paid by the 
  7.24  developer; 
  7.25     (16) the amount of any payments and the value of any 
  7.26  in-kind benefits, such as physical improvements and the use of 
  7.27  building space, that are paid or financed with tax increments 
  7.28  and are provided to another governmental unit other than the 
  7.29  municipality during the reporting period; 
  7.30     (17) the amount of any payments for activities and 
  7.31  improvements located outside of the district that are paid for 
  7.32  or financed with tax increments; 
  7.33     (18) the amount of payments of principal and interest that 
  7.34  are made during the reporting period on any nondefeased: 
  7.35     (i) general obligation tax increment financing bonds; 
  7.36     (ii) other tax increment financing bonds; and 
  8.1      (iii) notes and pay-as-you-go contracts; 
  8.2      (19) the principal amount, at the end of the reporting 
  8.3   period, of any nondefeased: 
  8.4      (i) general obligation tax increment financing bonds; 
  8.5      (ii) other tax increment financing bonds; and 
  8.6      (iii) notes and pay-as-you-go contracts; 
  8.7      (20) the amount of principal and interest payments that are 
  8.8   due for the current calendar year on any nondefeased: 
  8.9      (i) general obligation tax increment financing bonds; 
  8.10     (ii) other tax increment financing bonds; and 
  8.11     (iii) notes and pay-as-you-go contracts; 
  8.12     (21) if the fiscal disparities contribution under chapter 
  8.13  276A or 473F for the district is computed under section 469.177, 
  8.14  subdivision 3, paragraph (a), the amount of increased property 
  8.15  taxes imposed on other properties in the municipality that 
  8.16  approved the tax increment financing plan as a result of the 
  8.17  fiscal disparities contribution; 
  8.18     (22) whether the tax increment financing plan or other 
  8.19  governing document permits increment revenues to be expended: 
  8.20     (i) to pay bonds, the proceeds of which were or may be 
  8.21  expended on activities outside of the district; 
  8.22     (ii) for deposit into a common bond fund from which money 
  8.23  may be expended on activities located outside of the district; 
  8.24  or 
  8.25     (iii) to otherwise finance activities located outside of 
  8.26  the tax increment financing district; 
  8.27     (23) the estimate, if any, contained in the tax increment 
  8.28  financing plan of the amount of the cost of the project, 
  8.29  including administrative expenses, that will be paid or financed 
  8.30  with tax increment; and 
  8.31     (24) any additional information the state auditor may 
  8.32  require. 
  8.33     (d) The commissioner of revenue shall prescribe the method 
  8.34  of calculating the increased property taxes under paragraph (c), 
  8.35  clause (21), and the form of the statement disclosing this 
  8.36  information on the annual statement under subdivision 5. 
  9.1      (e) The reporting requirements imposed by this subdivision 
  9.2   apply to districts certified before, on, and after August 1, 
  9.3   1979. 
  9.4      [EFFECTIVE DATE.] This section is effective for reports 
  9.5   filed in 2005 and thereafter. 
  9.6      Sec. 4.  Minnesota Statutes 2002, section 469.176, is 
  9.7   amended by adding a subdivision to read: 
  9.8      Subd. 4m.  [USE OF INCREMENTS FOR JOB 
  9.9   TRAINING.] Notwithstanding the limits on use of increments in 
  9.10  subdivision 4, 4b, 4c, or 4j, increments may be expended for job 
  9.11  training that is intended to result in new job growth within a 
  9.12  tax increment financing district.  The authority may expend 
  9.13  increments directly for the cost of the job training or may 
  9.14  reimburse an employer located within the district or a 
  9.15  municipality in which the district is located for job training 
  9.16  expenditures.  Increments may be expended only for job training 
  9.17  programs that are approved for this purpose by the local 
  9.18  workforce council established under section 268.666 that has 
  9.19  jurisdiction over the workforce service area that includes the 
  9.20  tax increment financing district.  For purposes of section 
  9.21  469.1763, increments expended under this subdivision are 
  9.22  considered to be expended on activities in the district.  
  9.23     [EFFECTIVE DATE.] This section is effective for districts 
  9.24  for which the request for certification was made after July 31, 
  9.25  1979, provided that districts for which the request for 
  9.26  certification was made before the effective date of this act 
  9.27  must modify their plans to provide for this expenditure.