SF 2002

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

  1.1                          A bill for an act 
  1.2             relating to tax increment financing; modifying the 
  1.3             rule allowing use of economic development districts 
  1.4             for commercial developments in small cities; amending 
  1.5             Minnesota Statutes 1998, sections 469.174, subdivision 
  1.6             27; and 469.176, subdivision 4c. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1998, section 469.174, 
  1.9   subdivision 27, is amended to read: 
  1.10     Subd. 27.  [SMALL CITY.] "Small city" means any home rule 
  1.11  charter or statutory city that has a population of 5,000 or less 
  1.12  and that is located ten miles or more from a home rule charter 
  1.13  or statutory city, located in this state, with a population of 
  1.14  10,000 or more.  For purposes of this definition, the distance 
  1.15  between cities is measured by drawing a straight line from the 
  1.16  nearest boundaries of the two cities. 
  1.17     Sec. 2.  Minnesota Statutes 1998, section 469.176, 
  1.18  subdivision 4c, is amended to read: 
  1.19     Subd. 4c.  [ECONOMIC DEVELOPMENT DISTRICTS.] (a) Revenue 
  1.20  derived from tax increment from an economic development district 
  1.21  may not be used to provide improvements, loans, subsidies, 
  1.22  grants, interest rate subsidies, or assistance in any form to 
  1.23  developments consisting of buildings and ancillary facilities, 
  1.24  if more than 15 percent of the buildings and facilities 
  1.25  (determined on the basis of square footage) are used for a 
  1.26  purpose other than:  
  2.1      (1) the manufacturing or production of tangible personal 
  2.2   property, including processing resulting in the change in 
  2.3   condition of the property; 
  2.4      (2) warehousing, storage, and distribution of tangible 
  2.5   personal property, excluding retail sales; 
  2.6      (3) research and development related to the activities 
  2.7   listed in clause (1) or (2); 
  2.8      (4) telemarketing if that activity is the exclusive use of 
  2.9   the property; 
  2.10     (5) tourism facilities; or 
  2.11     (6) qualified border retail facilities; 
  2.12     (7) space necessary for and related to the activities 
  2.13  listed in clauses (1) to (6).  
  2.14     (b) Notwithstanding the provisions of this subdivision, 
  2.15  revenue derived from tax increment from an economic development 
  2.16  district may be used to pay for site preparation and public 
  2.17  improvements, if the following conditions are met: 
  2.18     (1) bedrock soils conditions are present in 80 percent or 
  2.19  more of the acreage of the district; 
  2.20     (2) the estimated cost of physical preparation of the site 
  2.21  exceeds the fair market value of the land before completion of 
  2.22  the preparation; and 
  2.23     (3) revenues from tax increments are expended only for the 
  2.24  additional costs of preparing the site because of unstable soils 
  2.25  and the bedrock soils condition, the additional cost of 
  2.26  installing public improvements because of unstable soils or the 
  2.27  bedrock soils condition, and reasonable administrative costs. 
  2.28     (c) Notwithstanding the provisions of this subdivision, 
  2.29  revenues derived from tax increment from an economic development 
  2.30  district may be used to provide improvements, loans, subsidies, 
  2.31  grants, interest rate subsidies, or assistance in any form for 
  2.32  up to 15,000 square feet of any one or more separately owned 
  2.33  commercial facility facilities, each consisting of 30,000 square 
  2.34  feet or less and located within the municipal jurisdiction of a 
  2.35  small city, if the revenues derived from increments are spent 
  2.36  only to assist the facility directly or for administrative 
  3.1   expenses, the assistance is necessary to develop the facility, 
  3.2   and all of the increments, except those for administrative 
  3.3   expenses, are spent only for activities within the district. 
  3.4      (d) For purposes of this subdivision, a qualified border 
  3.5   retail facility is a development consisting of a shopping center 
  3.6   or one or more retail stores, if the authority finds that all of 
  3.7   the following conditions are satisfied: 
  3.8      (1) the district is in a small city located within one mile 
  3.9   or less of the border of the state; 
  3.10     (2) the development is not located in the seven-county 
  3.11  metropolitan area, as defined in section 473.121, subdivision 2; 
  3.12     (3) the development will contain new buildings or will 
  3.13  substantially rehabilitate existing buildings that together 
  3.14  contain at least 25,000 square feet of retail space; and 
  3.15     (4) without the use of tax increment financing for the 
  3.16  development, the development or a similar competing development 
  3.17  will instead occur in the bordering state or province. 
  3.18     (e) A city is a small city for purposes of this subdivision 
  3.19  if the city was a small city in the year in which the request 
  3.20  for certification was made and applies for the rest of the 
  3.21  duration of the district, regardless of whether the city 
  3.22  qualifies or ceases to qualify as a small city. 
  3.23     Sec. 3.  [EFFECTIVE DATE.] 
  3.24     Sections 1 and 2 are effective for requests for 
  3.25  certification of tax increment financing districts or the 
  3.26  additions of new area to existing tax increment financing 
  3.27  districts made after the day following final enactment.