SF 2176

as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; increasing the length of time 
  1.3             during which tax increment revenues may be used for 
  1.4             activities in a tax increment financing district; 
  1.5             amending Minnesota Statutes 2000, section 469.1763, 
  1.6             subdivisions 3 and 4. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2000, section 469.1763, 
  1.9   subdivision 3, is amended to read: 
  1.10     Subd. 3.  [FIVE-YEAR RULE.] (a) Revenues derived from tax 
  1.11  increments are considered to have been expended on an activity 
  1.12  within the district under subdivision 2 only if one of the 
  1.13  following occurs: 
  1.14     (1) before or within five ten years after certification of 
  1.15  the district, the revenues are actually paid to a third party 
  1.16  with respect to the activity; 
  1.17     (2) bonds, the proceeds of which must be used to finance 
  1.18  the activity, are issued and sold to a third party before or 
  1.19  within five ten years after certification, the revenues are 
  1.20  spent to repay the bonds, and the proceeds of the bonds either 
  1.21  are, on the date of issuance, reasonably expected to be spent 
  1.22  before the end of the later of (i) the five-year ten-year 
  1.23  period, or (ii) a reasonable temporary period within the meaning 
  1.24  of the use of that term under section 148(c)(1) of the Internal 
  1.25  Revenue Code, or are deposited in a reasonably required reserve 
  1.26  or replacement fund; 
  2.1      (3) binding contracts with a third party are entered into 
  2.2   for performance of the activity before or within five ten years 
  2.3   after certification of the district and the revenues are spent 
  2.4   under the contractual obligation; or 
  2.5      (4) costs with respect to the activity are paid before or 
  2.6   within five ten years after certification of the district and 
  2.7   the revenues are spent to reimburse a party for payment of the 
  2.8   costs, including interest on unreimbursed costs. 
  2.9      (b) For purposes of this subdivision, bonds include 
  2.10  subsequent refunding bonds if the original refunded bonds meet 
  2.11  the requirements of paragraph (a), clause (2). 
  2.12     [EFFECTIVE DATE.] This section is effective for districts 
  2.13  for which certification is requested after April 30, 1996. 
  2.14     Sec. 2.  Minnesota Statutes 2000, section 469.1763, 
  2.15  subdivision 4, is amended to read: 
  2.16     Subd. 4.  [USE OF REVENUES FOR DECERTIFICATION.] (a) 
  2.17  Beginning with the sixth 11th year following certification of 
  2.18  the district, the applicable in-district percent of the revenues 
  2.19  derived from tax increments paid by properties in the district 
  2.20  that remain after the expenditures permitted under subdivision 3 
  2.21  must be used only to pay: 
  2.22     (1) outstanding bonds, as defined in subdivision 3, 
  2.23  paragraphs (a), clause (2), and (b); 
  2.24     (2) contracts, as defined in subdivision 3, paragraph (a), 
  2.25  clauses (3) and (4); or 
  2.26     (3) credit enhanced bonds to which the revenues derived 
  2.27  from tax increments are pledged, but only to the extent that 
  2.28  revenues of the district for which the credit enhanced bonds 
  2.29  were issued are insufficient to pay the bonds and to the extent 
  2.30  that the increments from the applicable pooling percent share 
  2.31  for the district are insufficient. 
  2.32     (b) When the outstanding bonds have been defeased and when 
  2.33  sufficient money has been set aside to pay contractual 
  2.34  obligations as defined in subdivision 3, paragraph (a), clauses 
  2.35  (3) and (4), the district must be decertified and the pledge of 
  2.36  tax increment discharged. 
  3.1      [EFFECTIVE DATE.] This section is effective for districts 
  3.2   for which certification is requested after April 30, 1996.