Bill Text: MN SF464 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Transit improvement area inclusion in tax increment financing (TIF) economic development districts
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2011-02-28 - Author added Dibble [SF464 Detail]
Download: Minnesota-2011-SF464-Introduced.html
1.2relating to taxation; tax increment financing; transit improvement areas;
1.3amending Minnesota Statutes 2010, sections 469.174, subdivision 12; 469.176,
1.4subdivision 4c; 469.1763, subdivision 2.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2010, section 469.174, subdivision 12, is amended to
1.7read:
1.8 Subd. 12. Economic development district. "Economic development district"
1.9means a type of tax increment financing district which consists of any project, or portions
1.10of a project, which the authority finds to be in the public interest because:
1.11(1) it will discourage commerce, industry, or manufacturing from moving their
1.12operations to another state or municipality; or
1.13(2) it will result in increased employment in the state; or
1.14(3) it will result in preservation and enhancement of the tax base of the state.; or
1.15(4) it is located in a transit improvement area as defined in section 469.351,
1.16subdivisions 1 to 3, and it will be used to support activities for which the transit
1.17improvement area was designated.
1.18EFFECTIVE DATE.This section applies to all districts, regardless of when the
1.19request for certification was made.
1.20 Sec. 2. Minnesota Statutes 2010, section 469.176, subdivision 4c, is amended to read:
1.21 Subd. 4c. Economic development districts. (a) Revenue derived from tax
1.22increment from an economic development district may not be used to provide
1.23improvements, loans, subsidies, grants, interest rate subsidies, or assistance in any form
2.1to developments consisting of buildings and ancillary facilities, if more than 15 percent
2.2of the buildings and facilities (determined on the basis of square footage) are used for a
2.3purpose other than:
2.4(1) the manufacturing or production of tangible personal property, including
2.5processing resulting in the change in condition of the property;
2.6(2) warehousing, storage, and distribution of tangible personal property, excluding
2.7retail sales;
2.8(3) research and development related to the activities listed in clause (1) or (2);
2.9(4) telemarketing if that activity is the exclusive use of the property;
2.10(5) tourism facilities;
2.11(6) qualified border retail facilities;or
2.12(7) space necessary for and related to the activities listed in clauses (1) to (6).; or
2.13(8) activities within a transit improvement area as defined in section 496.351,
2.14subdivisions 1 to 3.
2.15(b) Notwithstanding the provisions of this subdivision, revenues derived from tax
2.16increment from an economic development district may be used to provide improvements,
2.17loans, subsidies, grants, interest rate subsidies, or assistance in any form for up to 15,000
2.18square feet of any separately owned commercial facility located within the municipal
2.19jurisdiction of a small city, if the revenues derived from increments are spent only to
2.20assist the facility directly or for administrative expenses, the assistance is necessary to
2.21develop the facility, and all of the increments, except those for administrative expenses,
2.22are spent only for activities within the district.
2.23(c) A city is a small city for purposes of this subdivision if the city was a small city
2.24in the year in which the request for certification was made and applies for the rest of
2.25the duration of the district, regardless of whether the city qualifies or ceases to qualify
2.26as a small city.
2.27(d) Notwithstanding the requirements of paragraph (a) and the finding requirements
2.28of section469.174, subdivision 12 , tax increments from an economic development district
2.29may be used to provide improvements, loans, subsidies, grants, interest rate subsidies, or
2.30assistance in any form to developments consisting of buildings and ancillary facilities, if
2.31all the following conditions are met:
2.32(1) the municipality finds that the project will create or retain jobs in this state,
2.33including construction jobs, and that construction of the project would not have
2.34commenced before July 1, 2011, without the authority providing assistance under the
2.35provisions of this paragraph;
2.36(2) construction of the project begins no later than July 1, 2011; and
3.1(3) the request for certification of the district is made no later than June 30, 2011.
3.2EFFECTIVE DATE.This section applies to all districts, regardless of when the
3.3request for certification was made.
3.4 Sec. 3. Minnesota Statutes 2010, section 469.1763, subdivision 2, is amended to read:
3.5 Subd. 2. Expenditures outside district. (a) For each tax increment financing
3.6district, an amount equal to at least 75 percent of the total revenue derived from tax
3.7increments paid by properties in the district must be expended on activities in the district
3.8or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities
3.9in the district or to pay, or secure payment of, debt service on credit enhanced bonds.
3.10For districts, other than redevelopment districts for which the request for certification
3.11was made after June 30, 1995, the in-district percentage for purposes of the preceding
3.12sentence is 80 percent. Not more than 25 percent of the total revenue derived from tax
3.13increments paid by properties in the district may be expended, through a development fund
3.14or otherwise, on activities outside of the district but within the defined geographic area of
3.15the project except to pay, or secure payment of, debt service on credit enhanced bonds.
3.16For districts, other than redevelopment districts for which the request for certification was
3.17made after June 30, 1995, the pooling percentage for purposes of the preceding sentence is
3.1820 percent. The revenue derived from tax increments for the district that are expended on
3.19costs under section469.176, subdivision 4h , paragraph (b), may be deducted first before
3.20calculating the percentages that must be expended within and without the district.
3.21 (b) In the case of a housing district, a housing project, as defined in section469.174,
3.22subdivision 11 , is an activity in the district.
3.23 (c) All administrative expenses are for activities outside of the district, except that
3.24if the only expenses for activities outside of the district under this subdivision are for
3.25the purposes described in paragraph (d), administrative expenses will be considered as
3.26expenditures for activities in the district.
3.27 (d) The authority may elect, in the tax increment financing plan for the district,
3.28to increase by up to ten percentage points the permitted amount of expenditures for
3.29activities located outside the geographic area of the district under paragraph (a). As
3.30permitted by section469.176, subdivision 4k , the expenditures, including the permitted
3.31expenditures under paragraph (a), need not be made within the geographic area of the
3.32project. Expenditures that meet the requirements of this paragraph are legally permitted
3.33expenditures of the district, notwithstanding section469.176, subdivisions 4b, 4c, and 4j .
3.34To qualify for the increase under this paragraph, the expenditures must:
4.1 (1) be used exclusively to assist housing that meets the requirement for a qualified
4.2low-income building, as that term is used in section 42 of the Internal Revenue Code;
4.3 (2) not exceed the qualified basis of the housing, as defined under section 42(c) of
4.4the Internal Revenue Code, less the amount of any credit allowed under section 42 of
4.5the Internal Revenue Code;and
4.6 (3) be used to:
4.7 (i) acquire and prepare the site of the housing;
4.8 (ii) acquire, construct, or rehabilitate the housing; or
4.9 (iii) make public improvements directly related to the housing.; or
4.10(4) be used within designated improvement areas as defined in section 469.351,
4.11subdivisions 1 to 3.
4.12 (e) For a district created within a biotechnology and health sciences industry
4.13zone as defined in section469.330, subdivision 6 , a district created within a transit
4.14improvement area as defined in section 469.351, subdivisions 1 to 3, or foran existing
4.15district districts located within such a biotechnology and health sciences industry zone
4.16or a transit improvement area, tax increment derived from sucha district districts may
4.17be expended outside of the district but within the zone, or a transit improvement area,
4.18only for expenditures required for the construction of public infrastructure necessary to
4.19support the activities of the biotechnology and health sciences industry zone, or the transit
4.20improvement area, including land acquisition, and other redevelopment costs as defined
4.21in section469.176, subdivision 4j . These expenditures are considered as expenditures
4.22for activities within the district.
4.23EFFECTIVE DATE.This section applies to all districts, regardless of when the
4.24request for certification was made.
1.3amending Minnesota Statutes 2010, sections 469.174, subdivision 12; 469.176,
1.4subdivision 4c; 469.1763, subdivision 2.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2010, section 469.174, subdivision 12, is amended to
1.7read:
1.8 Subd. 12. Economic development district. "Economic development district"
1.9means a type of tax increment financing district which consists of any project, or portions
1.10of a project, which the authority finds to be in the public interest because:
1.11(1) it will discourage commerce, industry, or manufacturing from moving their
1.12operations to another state or municipality; or
1.13(2) it will result in increased employment in the state; or
1.14(3) it will result in preservation and enhancement of the tax base of the state
1.15(4) it is located in a transit improvement area as defined in section 469.351,
1.16subdivisions 1 to 3, and it will be used to support activities for which the transit
1.17improvement area was designated.
1.18EFFECTIVE DATE.This section applies to all districts, regardless of when the
1.19request for certification was made.
1.20 Sec. 2. Minnesota Statutes 2010, section 469.176, subdivision 4c, is amended to read:
1.21 Subd. 4c. Economic development districts. (a) Revenue derived from tax
1.22increment from an economic development district may not be used to provide
1.23improvements, loans, subsidies, grants, interest rate subsidies, or assistance in any form
2.1to developments consisting of buildings and ancillary facilities, if more than 15 percent
2.2of the buildings and facilities (determined on the basis of square footage) are used for a
2.3purpose other than:
2.4(1) the manufacturing or production of tangible personal property, including
2.5processing resulting in the change in condition of the property;
2.6(2) warehousing, storage, and distribution of tangible personal property, excluding
2.7retail sales;
2.8(3) research and development related to the activities listed in clause (1) or (2);
2.9(4) telemarketing if that activity is the exclusive use of the property;
2.10(5) tourism facilities;
2.11(6) qualified border retail facilities;
2.12(7) space necessary for and related to the activities listed in clauses (1) to (6)
2.13(8) activities within a transit improvement area as defined in section 496.351,
2.14subdivisions 1 to 3.
2.15(b) Notwithstanding the provisions of this subdivision, revenues derived from tax
2.16increment from an economic development district may be used to provide improvements,
2.17loans, subsidies, grants, interest rate subsidies, or assistance in any form for up to 15,000
2.18square feet of any separately owned commercial facility located within the municipal
2.19jurisdiction of a small city, if the revenues derived from increments are spent only to
2.20assist the facility directly or for administrative expenses, the assistance is necessary to
2.21develop the facility, and all of the increments, except those for administrative expenses,
2.22are spent only for activities within the district.
2.23(c) A city is a small city for purposes of this subdivision if the city was a small city
2.24in the year in which the request for certification was made and applies for the rest of
2.25the duration of the district, regardless of whether the city qualifies or ceases to qualify
2.26as a small city.
2.27(d) Notwithstanding the requirements of paragraph (a) and the finding requirements
2.28of section
2.29may be used to provide improvements, loans, subsidies, grants, interest rate subsidies, or
2.30assistance in any form to developments consisting of buildings and ancillary facilities, if
2.31all the following conditions are met:
2.32(1) the municipality finds that the project will create or retain jobs in this state,
2.33including construction jobs, and that construction of the project would not have
2.34commenced before July 1, 2011, without the authority providing assistance under the
2.35provisions of this paragraph;
2.36(2) construction of the project begins no later than July 1, 2011; and
3.1(3) the request for certification of the district is made no later than June 30, 2011.
3.2EFFECTIVE DATE.This section applies to all districts, regardless of when the
3.3request for certification was made.
3.4 Sec. 3. Minnesota Statutes 2010, section 469.1763, subdivision 2, is amended to read:
3.5 Subd. 2. Expenditures outside district. (a) For each tax increment financing
3.6district, an amount equal to at least 75 percent of the total revenue derived from tax
3.7increments paid by properties in the district must be expended on activities in the district
3.8or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities
3.9in the district or to pay, or secure payment of, debt service on credit enhanced bonds.
3.10For districts, other than redevelopment districts for which the request for certification
3.11was made after June 30, 1995, the in-district percentage for purposes of the preceding
3.12sentence is 80 percent. Not more than 25 percent of the total revenue derived from tax
3.13increments paid by properties in the district may be expended, through a development fund
3.14or otherwise, on activities outside of the district but within the defined geographic area of
3.15the project except to pay, or secure payment of, debt service on credit enhanced bonds.
3.16For districts, other than redevelopment districts for which the request for certification was
3.17made after June 30, 1995, the pooling percentage for purposes of the preceding sentence is
3.1820 percent. The revenue derived from tax increments for the district that are expended on
3.19costs under section
3.20calculating the percentages that must be expended within and without the district.
3.21 (b) In the case of a housing district, a housing project, as defined in section
3.22subdivision 11
3.23 (c) All administrative expenses are for activities outside of the district, except that
3.24if the only expenses for activities outside of the district under this subdivision are for
3.25the purposes described in paragraph (d), administrative expenses will be considered as
3.26expenditures for activities in the district.
3.27 (d) The authority may elect, in the tax increment financing plan for the district,
3.28to increase by up to ten percentage points the permitted amount of expenditures for
3.29activities located outside the geographic area of the district under paragraph (a). As
3.30permitted by section
3.31expenditures under paragraph (a), need not be made within the geographic area of the
3.32project. Expenditures that meet the requirements of this paragraph are legally permitted
3.33expenditures of the district, notwithstanding section
3.34To qualify for the increase under this paragraph, the expenditures must:
4.1 (1) be used exclusively to assist housing that meets the requirement for a qualified
4.2low-income building, as that term is used in section 42 of the Internal Revenue Code;
4.3 (2) not exceed the qualified basis of the housing, as defined under section 42(c) of
4.4the Internal Revenue Code, less the amount of any credit allowed under section 42 of
4.5the Internal Revenue Code;
4.6 (3) be used to:
4.7 (i) acquire and prepare the site of the housing;
4.8 (ii) acquire, construct, or rehabilitate the housing; or
4.9 (iii) make public improvements directly related to the housing
4.10(4) be used within designated improvement areas as defined in section 469.351,
4.11subdivisions 1 to 3.
4.12 (e) For a district created within a biotechnology and health sciences industry
4.13zone as defined in section
4.14improvement area as defined in section 469.351, subdivisions 1 to 3, or for
4.15
4.16or a transit improvement area, tax increment derived from such
4.17be expended outside of the district but within the zone, or a transit improvement area,
4.18only for expenditures required for the construction of public infrastructure necessary to
4.19support the activities of the biotechnology and health sciences industry zone, or the transit
4.20improvement area, including land acquisition, and other redevelopment costs as defined
4.21in section
4.22for activities within the district.
4.23EFFECTIVE DATE.This section applies to all districts, regardless of when the
4.24request for certification was made.
