1.1 	A bill for an act
1.2 	relating to taxation; tax increment financing;
1.3 	prohibiting the inclusion in a district or the use of
1.4 	increment to assist certain facilities as defined
1.5 	under federal law; amending Minnesota Statutes 2004,
1.6 	section 469.176, subdivisions 4l, 7.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. Minnesota Statutes 2004, section 469.176,
1.9 	subdivision 4l, is amended to read:
1.10 		Subd. 4l.Prohibited facilities.  (a) No tax increment
1.11 	from any district may be used for:
1.12 	(1) a commons area used as a public park; ~~or~~ 
1.13 	(2) a facility used for social, recreational, or conference
1.14 	purposes; or 
1.15 	(3) a property that includes a casino or other facility
1.16 	conducting class III gaming as defined in United States Code,
1.17 	title 25, section 2703, regardless of whether it is conducted by
1.18 	an Indian tribe or tribal business.
1.19 	(b) This subdivision does not apply to a privately owned
1.20 	facility for conference purposes or a parking structure.
1.21 	
EFFECTIVE DATE. This section is effective for
1.22 	expenditures of increment made after June 30, 2005, regardless
1.23 	of when the request for certification of the district was made.

1.24 	Sec. 2. Minnesota Statutes 2004, section 469.176,
1.25 	subdivision 7, is amended to read:
1.26 		Subd. 7.Parcels not includable in districts.  (a) The
2.1 	authority may request inclusion in a tax increment financing
2.2 	district and the county auditor may certify the original tax
2.3 	capacity of a parcel or a part of a parcel that qualified under
2.4 	the provisions of section 273.111 or 273.112 or chapter 473H for
2.5 	taxes payable in any of the five calendar years before the
2.6 	filing of the request for certification only for:
2.7 	(1) a district in which 85 percent or more of the planned
2.8 	buildings and facilities (determined on the basis of square
2.9 	footage) are a qualified manufacturing facility or a qualified
2.10 	distribution facility or a combination of both; or
2.11 	(2) a qualified housing district.
2.12 	(b)(1) A distribution facility means buildings and other
2.13 	improvements to real property that are used to conduct
2.14 	activities in at least each of the following categories:
2.15 	(i) to store or warehouse tangible personal property;
2.16 	(ii) to take orders for shipment, mailing, or delivery;
2.17 	(iii) to prepare personal property for shipment, mailing,
2.18 	or delivery; and
2.19 	(iv) to ship, mail, or deliver property.
2.20 	(2) A manufacturing facility includes space used for
2.21 	manufacturing or producing tangible personal property, including
2.22 	processing resulting in the change in condition of the property,
2.23 	and space necessary for and related to the manufacturing
2.24 	activities.
2.25 	(3) To be a qualified facility, the owner or operator of a
2.26 	manufacturing or distribution facility must agree to pay and pay
2.27 	90 percent or more of the employees of the facility at a rate
2.28 	equal to or greater than 160 percent of the federal minimum wage
2.29 	for individuals over the age of 20.
2.30 	(c) The authority may not request inclusion in a tax
2.31 	increment financing district and the county auditor may not
2.32 	certify the original tax capacity of a parcel or a part of a
2.33 	parcel that contains or is expected to contain uses, facilities,
2.34 	properties, or businesses containing class III gaming, as
2.35 	defined in United States Code, title 25, section 2703,
2.36 	regardless of whether it is conducted by an Indian tribe or
3.1 	tribal business.
3.2 	
EFFECTIVE DATE. This section is effective for parcels for
3.3 	which the request for certification is made after June 30, 2005.