1997 Minnesota Statutes

     469.1771 Violations. 

    Subdivision 1.    Enforcement.  (a) The owner of taxable 
 property located in the city, town, school district, or county 
 in which the tax increment financing district is located may 
 bring suit for equitable relief or for damages, as provided in 
 subdivisions 3 and 4, arising out of a failure of a municipality 
 or authority to comply with the provisions of sections 469.174 
 to 469.179, or related provisions of this chapter.  The 
 prevailing party in a suit filed under the preceding sentence is 
 entitled to costs, including reasonable attorney fees. 

    (b) The state auditor may examine and audit political 
 subdivisions' use of tax increment financing.  Without previous 
 notice, the state auditor may examine or audit accounts and 
 records on a random basis as the auditor deems to be in the 
 public interest.  If the state auditor finds evidence that an 
 authority or municipality has violated a provision of the law 
 for which a remedy is provided under this section, the state 
 auditor shall forward the relevant information to the county 
 attorney.  The county attorney may bring an action to enforce 
 the provisions of sections 469.174 to 469.179 or related 
 provisions of this chapter, for matters referred by the state 
 auditor or on behalf of the county. 

    (c) If the state auditor finds an authority is not in 
 compliance with sections 469.174 to 469.179 or related 
 provisions of law, the auditor shall notify the governing body 
 of the municipality that approved the tax increment financing 
 district of its findings.  The governing body of the 
 municipality must respond in writing to the state auditor within 
 60 days after receiving the notification.  Its written response 
 must state whether the municipality accepts, in whole or part, 
 the auditor's findings.  If the municipality does not accept the 
 findings, the statement must indicate the basis for its 
 disagreement.  The state auditor shall annually summarize the 
 responses it receives under this section and send the summary 
 and copies of the responses to the chairs of the committees of 
 the legislature with jurisdiction over tax increment financing. 

    Subd. 2.    Collection of increment.  If an authority 
 includes or retains a parcel of property in a tax increment 
 financing district that does not qualify for inclusion or 
 retention within the district, the authority must pay to the 
 county auditor an amount of money equal to the increment 
 collected from the property for the year or years.  The property 
 must be eliminated from the original and captured tax capacity 
 of the district effective for the current property tax 
 assessment year.  This subdivision does not apply to a failure 
 to decertify a district at the end of the duration limit 
 specified in the tax increment financing plan. 

    Subd. 3.    Expenditure of increment.  If an authority 
 expends revenues derived from tax increments, including the 
 proceeds of tax increment bonds, (1) for a purpose that is not a 
 permitted project under section 469.176, (2) for a purpose that 
 is not permitted under section 469.176 for the district from 
 which the increment was received, or (3) on activities outside 
 of the geographic area in which the revenues may be expended 
 under this chapter, the authority must pay to the county auditor 
 an amount equal to the expenditures made in violation of the law.

    Subd. 4.    Limitations.  (a) If the increments are 
 pledged to repay bonds that were issued before the lawsuit was 
 filed under this section, the damages under this section may not 
 exceed the greater of (1) ten percent of the expenditures or 
 revenues derived from increment, or (2) the amount of available 
 revenues after paying debt services due on the bonds.  

    (b) The court may abate all or part of the amount if it 
 determines the action was taken in good faith and would work an 
 undue hardship on the municipality. 

    Subd. 5.    Disposition of payments.  If the authority 
 does not have sufficient increments or other available money to 
 make a payment required by this section, the municipality that 
 approved the district must use any available money to make the 
 payment including the levying of property taxes.  Money received 
 by the county auditor under this section must be distributed as 
 excess increments under section 469.176, subdivision 2, 
 paragraph (a), clause (4).  No distributions may be made to the 
 municipality that approved the tax increment financing district. 

    Subd. 6.    Application.  This section applies to 
 increments collected from tax increment financing districts and 
 projects for which certification was requested before, on, and 
 after August 1, 1979. 

    HIST: 1990 c 604 art 7 s 25; 1991 c 291 art 10 s 14,15; 1995 c 
 264 art 5 s 34