Bill Text: MN SF2794 | 2013-2014 | 88th Legislature | Introduced
Bill Title: Workforce housing tax increment financing (TIF)
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2014-03-19 - Referred to Taxes [SF2794 Detail]
Download: Minnesota-2013-SF2794-Introduced.html
1.2relating to taxation; tax increment financing; providing use for certain workforce
1.3housing;amending Minnesota Statutes 2012, sections 462A.33, subdivision
1.43; 469.174, subdivision 12; 469.175, subdivision 3; 469.1761, by adding a
1.5subdivision; Minnesota Statutes 2013 Supplement, section 469.176, subdivision
1.64c.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2012, section 462A.33, subdivision 3, is amended to read:
1.9 Subd. 3. Contribution requirement. Fifty percent of the funds appropriated for
1.10this section must be used for challenge grants or loans for housing proposals with financial
1.11or in-kind contributions from nonstate resources that reduce the need for deferred loan or
1.12grant funds from state resources. Challenge grants or loans must be used for economically
1.13viable homeownership or rental housing proposals that address the housing needs of
1.14the local work force.
1.15 Among comparable proposals, preference must be given to proposals that include
1.16contributions from nonstate resources for the greatest portion of the total development
1.17cost. Comparable proposals with contributions from local units of government or private
1.18philanthropic, religious, or charitable organizations must be given preference in awarding
1.19grants or loans.
1.20 For the purpose of this subdivision, a contribution may consist partially or wholly
1.21of the premium paid for federal housing tax credits or of the provision of tax increment
1.22financing to the project.
1.23 Sec. 2. Minnesota Statutes 2012, section 469.174, subdivision 12, is amended to read:
2.1 Subd. 12. Economic development district. "Economic development district"
2.2means a type of tax increment financing district which consists of any project, or portions
2.3of a project, which the authority finds to be in the public interest because:
2.4(1) it will discourage commerce, industry, or manufacturing from moving their
2.5operations to another state or municipality; or
2.6(2) it will result in increased employment in the state;or
2.7(3) it will result in preservation and enhancement of the tax base of the state; or
2.8(4) it satisfies the requirements of a workforce housing project under section
2.9469.175, subdivision 3, paragraph (f).
2.10EFFECTIVE DATE.This section is effective for districts for which the request for
2.11certification is made after June 30, 2014.
2.12 Sec. 3. Minnesota Statutes 2012, section 469.175, subdivision 3, is amended to read:
2.13 Subd. 3. Municipality approval. (a) A county auditor shall not certify the original
2.14net tax capacity of a tax increment financing district until the tax increment financing plan
2.15proposed for that district has been approved by the municipality in which the district
2.16is located. If an authority that proposes to establish a tax increment financing district
2.17and the municipality are not the same, the authority shall apply to the municipality in
2.18which the district is proposed to be located and shall obtain the approval of its tax
2.19increment financing plan by the municipality before the authority may use tax increment
2.20financing. The municipality shall approve the tax increment financing plan only after a
2.21public hearing thereon after published notice in a newspaper of general circulation in the
2.22municipality at least once not less than ten days nor more than 30 days prior to the date
2.23of the hearing. The published notice must include a map of the area of the district from
2.24which increments may be collected and, if the project area includes additional area, a map
2.25of the project area in which the increments may be expended. The hearing may be held
2.26before or after the approval or creation of the project or it may be held in conjunction with
2.27a hearing to approve the project.
2.28 (b) Before or at the time of approval of the tax increment financing plan, the
2.29municipality shall make the following findings, and shall set forth in writing the reasons
2.30and supporting facts for each determination:
2.31 (1) that the proposed tax increment financing district is a redevelopment district, a
2.32renewal or renovation district, a housing district, a soils condition district, or an economic
2.33development district; if the proposed district is a redevelopment district or a renewal or
2.34renovation district, the reasons and supporting facts for the determination that the district
2.35meets the criteria of section469.174, subdivision 10 , paragraph (a), clauses (1) and (2), or
3.1subdivision 10a, must be documented in writing and retained and made available to the
3.2public by the authority until the district has been terminated;
3.3 (2) that, in the opinion of the municipality:
3.4 (i) the proposed development or redevelopment would not reasonably be expected to
3.5occur solely through private investment within the reasonably foreseeable future; and
3.6 (ii) the increased market value of the site that could reasonably be expected to occur
3.7without the use of tax increment financing would be less than the increase in the market
3.8value estimated to result from the proposed development after subtracting the present
3.9value of the projected tax increments for the maximum duration of the district permitted
3.10by the plan. The requirements of this item do not apply if the district is a housing district;
3.11 (3) that the tax increment financing plan conforms to the general plan for the
3.12development or redevelopment of the municipality as a whole;
3.13 (4) that the tax increment financing plan will afford maximum opportunity,
3.14consistent with the sound needs of the municipality as a whole, for the development or
3.15redevelopment of the project by private enterprise;
3.16 (5) that the municipality elects the method of tax increment computation set forth in
3.17section469.177, subdivision 3, paragraph (b) , if applicable.
3.18 (c) When the municipality and the authority are not the same, the municipality shall
3.19approve or disapprove the tax increment financing plan within 60 days of submission by the
3.20authority. When the municipality and the authority are not the same, the municipality may
3.21not amend or modify a tax increment financing plan except as proposed by the authority
3.22pursuant to subdivision 4. Once approved, the determination of the authority to undertake
3.23the project through the use of tax increment financing and the resolution of the governing
3.24body shall be conclusive of the findings therein and of the public need for the financing.
3.25 (d) For a district that is subject to the requirements of paragraph (b), clause (2),
3.26item (ii), the municipality's statement of reasons and supporting facts must include all of
3.27the following:
3.28 (1) an estimate of the amount by which the market value of the site will increase
3.29without the use of tax increment financing;
3.30 (2) an estimate of the increase in the market value that will result from the
3.31development or redevelopment to be assisted with tax increment financing; and
3.32 (3) the present value of the projected tax increments for the maximum duration of
3.33the district permitted by the tax increment financing plan.
3.34 (e) For purposes of this subdivision, "site" means the parcels on which the
3.35development or redevelopment to be assisted with tax increment financing will be located.
4.1(f) Before or at the time of approval of the tax increment financing plan for a district
4.2to be used to fund a workforce housing project under section 469.176, subdivision 4c,
4.3paragraph (d), the municipality shall make the following findings and shall set forth in
4.4writing the reasons and supporting facts for each determination:
4.5(1) the unemployment rate for the county is equal to or less than 90 percent of the
4.6statewide unemployment rate for the most recent year for which data is available;
4.7(2) the percentage of adults, aged 16 to 64, in the county who are employed exceeds
4.880 percent for the most recently available reporting period using data from the United
4.9States Census Bureau or that the city is located outside of the metropolitan area, as defined
4.10in section 473.121, subdivision 2, and has a residential postsecondary student population
4.11equal to or greater than ten percent of its total population;
4.12(3) the average vacancy rate for market rate residential units located in the
4.13municipality and in any statutory or home rule charter city located within 15 miles or less
4.14of the boundaries of the municipality has been two percent or less for at least a two-year
4.15period;
4.16(4) one or more businesses located in the municipality or within 15 miles of the
4.17municipality that employ a minimum of 20 full-time equivalent employees in aggregate
4.18have provided a written statement to the municipality indicating that the lack of available
4.19market rate residential units has impeded their ability to recruit and hire employees; and
4.20(5) the municipality and the development authority intend to use increments from
4.21the district for the development of market rate residential units to serve employees of
4.22businesses located in the municipality or surrounding area.
4.23EFFECTIVE DATE.This section is effective for districts for which the request for
4.24certification is made after June 30, 2014.
4.25 Sec. 4. Minnesota Statutes 2013 Supplement, section 469.176, subdivision 4c, is
4.26amended to read:
4.27 Subd. 4c. Economic development districts. (a) Revenue derived from tax increment
4.28from an economic development district may not be used to provide improvements, loans,
4.29subsidies, grants, interest rate subsidies, or assistance in any form to developments
4.30consisting of buildings and ancillary facilities, if more than 15 percent of the buildings and
4.31facilities (determined on the basis of square footage) are used for a purpose other than:
4.32 (1) the manufacturing or production of tangible personal property, including
4.33processing resulting in the change in condition of the property;
4.34 (2) warehousing, storage, and distribution of tangible personal property, excluding
4.35retail sales;
5.1 (3) research and development related to the activities listed in clause (1) or (2);
5.2 (4) telemarketing if that activity is the exclusive use of the property;
5.3 (5) tourism facilities;or
5.4 (6) space necessary for and related to the activities listed in clauses (1) to (5); or
5.5 (7) a workforce housing project that satisfies the requirements of paragraph (d).
5.6 (b) Notwithstanding the provisions of this subdivision, revenues derived from tax
5.7increment from an economic development district may be used to provide improvements,
5.8loans, subsidies, grants, interest rate subsidies, or assistance in any form for up to 15,000
5.9square feet of any separately owned commercial facility located within the municipal
5.10jurisdiction of a small city, if the revenues derived from increments are spent only to
5.11assist the facility directly or for administrative expenses, the assistance is necessary to
5.12develop the facility, and all of the increments, except those for administrative expenses,
5.13are spent only for activities within the district.
5.14 (c) A city is a small city for purposes of this subdivision if the city was a small city
5.15in the year in which the request for certification was made and applies for the rest of
5.16the duration of the district, regardless of whether the city qualifies or ceases to qualify
5.17as a small city.
5.18(d) A project qualifies as a workforce housing project under this paragraph if
5.19tax increments from the district are used exclusively to assist in the acquisition of
5.20property; construction of improvements; provision of loans or subsidies, grants, interest
5.21rate subsidies, public infrastructure, and related financing costs for rental housing
5.22developments in the municipality; and the governing body of the municipality has made
5.23the findings for the project required by section 469.175, subdivision 3, paragraph (f).
5.24EFFECTIVE DATE.This section is effective for districts for which the request for
5.25certification is made after June 30, 2014.
5.26 Sec. 5. Minnesota Statutes 2012, section 469.1761, is amended by adding a subdivision
5.27to read:
5.28 Subd. 5. Income limits; MHFA challenge program. For a project receiving a loan
5.29or grant from the Minnesota Housing Finance Agency challenge program under section
5.30462A.33, the income limits under section 462A.33 are substituted for the applicable
5.31income limits under subdivision 2 or 3 for the project.
5.32EFFECTIVE DATE.This section is effective for tax increment financing districts
5.33for which the request for certification is made after June 30, 2014.
1.3housing;amending Minnesota Statutes 2012, sections 462A.33, subdivision
1.43; 469.174, subdivision 12; 469.175, subdivision 3; 469.1761, by adding a
1.5subdivision; Minnesota Statutes 2013 Supplement, section 469.176, subdivision
1.64c.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2012, section 462A.33, subdivision 3, is amended to read:
1.9 Subd. 3. Contribution requirement. Fifty percent of the funds appropriated for
1.10this section must be used for challenge grants or loans for housing proposals with financial
1.11or in-kind contributions from nonstate resources that reduce the need for deferred loan or
1.12grant funds from state resources. Challenge grants or loans must be used for economically
1.13viable homeownership or rental housing proposals that address the housing needs of
1.14the local work force.
1.15 Among comparable proposals, preference must be given to proposals that include
1.16contributions from nonstate resources for the greatest portion of the total development
1.17cost. Comparable proposals with contributions from local units of government or private
1.18philanthropic, religious, or charitable organizations must be given preference in awarding
1.19grants or loans.
1.20 For the purpose of this subdivision, a contribution may consist partially or wholly
1.21of the premium paid for federal housing tax credits or of the provision of tax increment
1.22financing to the project.
1.23 Sec. 2. Minnesota Statutes 2012, section 469.174, subdivision 12, is amended to read:
2.1 Subd. 12. Economic development district. "Economic development district"
2.2means a type of tax increment financing district which consists of any project, or portions
2.3of a project, which the authority finds to be in the public interest because:
2.4(1) it will discourage commerce, industry, or manufacturing from moving their
2.5operations to another state or municipality; or
2.6(2) it will result in increased employment in the state;
2.7(3) it will result in preservation and enhancement of the tax base of the state; or
2.8(4) it satisfies the requirements of a workforce housing project under section
2.9469.175, subdivision 3, paragraph (f).
2.10EFFECTIVE DATE.This section is effective for districts for which the request for
2.11certification is made after June 30, 2014.
2.12 Sec. 3. Minnesota Statutes 2012, section 469.175, subdivision 3, is amended to read:
2.13 Subd. 3. Municipality approval. (a) A county auditor shall not certify the original
2.14net tax capacity of a tax increment financing district until the tax increment financing plan
2.15proposed for that district has been approved by the municipality in which the district
2.16is located. If an authority that proposes to establish a tax increment financing district
2.17and the municipality are not the same, the authority shall apply to the municipality in
2.18which the district is proposed to be located and shall obtain the approval of its tax
2.19increment financing plan by the municipality before the authority may use tax increment
2.20financing. The municipality shall approve the tax increment financing plan only after a
2.21public hearing thereon after published notice in a newspaper of general circulation in the
2.22municipality at least once not less than ten days nor more than 30 days prior to the date
2.23of the hearing. The published notice must include a map of the area of the district from
2.24which increments may be collected and, if the project area includes additional area, a map
2.25of the project area in which the increments may be expended. The hearing may be held
2.26before or after the approval or creation of the project or it may be held in conjunction with
2.27a hearing to approve the project.
2.28 (b) Before or at the time of approval of the tax increment financing plan, the
2.29municipality shall make the following findings, and shall set forth in writing the reasons
2.30and supporting facts for each determination:
2.31 (1) that the proposed tax increment financing district is a redevelopment district, a
2.32renewal or renovation district, a housing district, a soils condition district, or an economic
2.33development district; if the proposed district is a redevelopment district or a renewal or
2.34renovation district, the reasons and supporting facts for the determination that the district
2.35meets the criteria of section
3.1subdivision 10a, must be documented in writing and retained and made available to the
3.2public by the authority until the district has been terminated;
3.3 (2) that, in the opinion of the municipality:
3.4 (i) the proposed development or redevelopment would not reasonably be expected to
3.5occur solely through private investment within the reasonably foreseeable future; and
3.6 (ii) the increased market value of the site that could reasonably be expected to occur
3.7without the use of tax increment financing would be less than the increase in the market
3.8value estimated to result from the proposed development after subtracting the present
3.9value of the projected tax increments for the maximum duration of the district permitted
3.10by the plan. The requirements of this item do not apply if the district is a housing district;
3.11 (3) that the tax increment financing plan conforms to the general plan for the
3.12development or redevelopment of the municipality as a whole;
3.13 (4) that the tax increment financing plan will afford maximum opportunity,
3.14consistent with the sound needs of the municipality as a whole, for the development or
3.15redevelopment of the project by private enterprise;
3.16 (5) that the municipality elects the method of tax increment computation set forth in
3.17section
3.18 (c) When the municipality and the authority are not the same, the municipality shall
3.19approve or disapprove the tax increment financing plan within 60 days of submission by the
3.20authority. When the municipality and the authority are not the same, the municipality may
3.21not amend or modify a tax increment financing plan except as proposed by the authority
3.22pursuant to subdivision 4. Once approved, the determination of the authority to undertake
3.23the project through the use of tax increment financing and the resolution of the governing
3.24body shall be conclusive of the findings therein and of the public need for the financing.
3.25 (d) For a district that is subject to the requirements of paragraph (b), clause (2),
3.26item (ii), the municipality's statement of reasons and supporting facts must include all of
3.27the following:
3.28 (1) an estimate of the amount by which the market value of the site will increase
3.29without the use of tax increment financing;
3.30 (2) an estimate of the increase in the market value that will result from the
3.31development or redevelopment to be assisted with tax increment financing; and
3.32 (3) the present value of the projected tax increments for the maximum duration of
3.33the district permitted by the tax increment financing plan.
3.34 (e) For purposes of this subdivision, "site" means the parcels on which the
3.35development or redevelopment to be assisted with tax increment financing will be located.
4.1(f) Before or at the time of approval of the tax increment financing plan for a district
4.2to be used to fund a workforce housing project under section 469.176, subdivision 4c,
4.3paragraph (d), the municipality shall make the following findings and shall set forth in
4.4writing the reasons and supporting facts for each determination:
4.5(1) the unemployment rate for the county is equal to or less than 90 percent of the
4.6statewide unemployment rate for the most recent year for which data is available;
4.7(2) the percentage of adults, aged 16 to 64, in the county who are employed exceeds
4.880 percent for the most recently available reporting period using data from the United
4.9States Census Bureau or that the city is located outside of the metropolitan area, as defined
4.10in section 473.121, subdivision 2, and has a residential postsecondary student population
4.11equal to or greater than ten percent of its total population;
4.12(3) the average vacancy rate for market rate residential units located in the
4.13municipality and in any statutory or home rule charter city located within 15 miles or less
4.14of the boundaries of the municipality has been two percent or less for at least a two-year
4.15period;
4.16(4) one or more businesses located in the municipality or within 15 miles of the
4.17municipality that employ a minimum of 20 full-time equivalent employees in aggregate
4.18have provided a written statement to the municipality indicating that the lack of available
4.19market rate residential units has impeded their ability to recruit and hire employees; and
4.20(5) the municipality and the development authority intend to use increments from
4.21the district for the development of market rate residential units to serve employees of
4.22businesses located in the municipality or surrounding area.
4.23EFFECTIVE DATE.This section is effective for districts for which the request for
4.24certification is made after June 30, 2014.
4.25 Sec. 4. Minnesota Statutes 2013 Supplement, section 469.176, subdivision 4c, is
4.26amended to read:
4.27 Subd. 4c. Economic development districts. (a) Revenue derived from tax increment
4.28from an economic development district may not be used to provide improvements, loans,
4.29subsidies, grants, interest rate subsidies, or assistance in any form to developments
4.30consisting of buildings and ancillary facilities, if more than 15 percent of the buildings and
4.31facilities (determined on the basis of square footage) are used for a purpose other than:
4.32 (1) the manufacturing or production of tangible personal property, including
4.33processing resulting in the change in condition of the property;
4.34 (2) warehousing, storage, and distribution of tangible personal property, excluding
4.35retail sales;
5.1 (3) research and development related to the activities listed in clause (1) or (2);
5.2 (4) telemarketing if that activity is the exclusive use of the property;
5.3 (5) tourism facilities;
5.4 (6) space necessary for and related to the activities listed in clauses (1) to (5); or
5.5 (7) a workforce housing project that satisfies the requirements of paragraph (d).
5.6 (b) Notwithstanding the provisions of this subdivision, revenues derived from tax
5.7increment from an economic development district may be used to provide improvements,
5.8loans, subsidies, grants, interest rate subsidies, or assistance in any form for up to 15,000
5.9square feet of any separately owned commercial facility located within the municipal
5.10jurisdiction of a small city, if the revenues derived from increments are spent only to
5.11assist the facility directly or for administrative expenses, the assistance is necessary to
5.12develop the facility, and all of the increments, except those for administrative expenses,
5.13are spent only for activities within the district.
5.14 (c) A city is a small city for purposes of this subdivision if the city was a small city
5.15in the year in which the request for certification was made and applies for the rest of
5.16the duration of the district, regardless of whether the city qualifies or ceases to qualify
5.17as a small city.
5.18(d) A project qualifies as a workforce housing project under this paragraph if
5.19tax increments from the district are used exclusively to assist in the acquisition of
5.20property; construction of improvements; provision of loans or subsidies, grants, interest
5.21rate subsidies, public infrastructure, and related financing costs for rental housing
5.22developments in the municipality; and the governing body of the municipality has made
5.23the findings for the project required by section 469.175, subdivision 3, paragraph (f).
5.24EFFECTIVE DATE.This section is effective for districts for which the request for
5.25certification is made after June 30, 2014.
5.26 Sec. 5. Minnesota Statutes 2012, section 469.1761, is amended by adding a subdivision
5.27to read:
5.28 Subd. 5. Income limits; MHFA challenge program. For a project receiving a loan
5.29or grant from the Minnesota Housing Finance Agency challenge program under section
5.30462A.33, the income limits under section 462A.33 are substituted for the applicable
5.31income limits under subdivision 2 or 3 for the project.
5.32EFFECTIVE DATE.This section is effective for tax increment financing districts
5.33for which the request for certification is made after June 30, 2014.
