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CHAPTER 1$
<br />zolo 11inn. l ~~-s eh. l~ 32 Cities have temporary authority to spend TIF funds to stimulate construction
<br />amendingMmn Stat. G ~lfs9.lif,
<br />~:a~t„~ sand. =~~,. using economic development districts for any type of prof ect, if three
<br />conditions are met:
<br />• The municipality funds projects that will create new jobs in the state,
<br />including construction jobs, and the project otherwise would not have
<br />begun before July 1, 2011, without assistance.
<br />• Construction of the project begins no later than July 1, 2011.
<br />• The request for certification is made by June 30, 2011.
<br />This temporary authority to spend the tax increment expires Dec. 31, 2011.
<br />Minn. star. a 4Uy.1?s, subd. s. The city using TIF must report annually to the county board, the county
<br />auditor, the school board, and the state auditor as to the status of the TIF
<br />district or districts and publish the report. The state auditor has established a
<br />uniform system of accounting and financial reporting for TIF districts. The
<br />city must annually submit to the state auditor a financial report in
<br />compliance with these standards.
<br />Minn. scat. ~ =1c~.rz,1, sutd~. i, The state auditor may audit TIF districts. If the state auditor notifies a TIF
<br />`"i'~ authority of an alleged violation, a copy of the notice is also forwarded to
<br /> the county attorney. If no corrective action is brought within one year, the
<br /> county attorney must notify the state auditor, who then notifies the attorney
<br /> general. If the attorney general finds a substantial violation, the attorney
<br /> general will petition the state tax court to suspend the authority's power to
<br /> use TIF for a period of up to five years.
<br />;F'ltt<n. star. ~ a~~.l %~, suhd. A. The TIF agreement with the developer is a complex document. Assistance
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<br />from a financial advisor and the city attorney is necessary in order to
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<br />za{;1}. f3r~~otcft`e/~ "I'rai c anticipate the many potential problems. An agreement can establish a
<br />rr<<~. ,-. coa~razr ofxafrs~y, coy minimum market value for tax increment assessment purposes, as well as
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<br />provide that the developer pay a certain level of taxes regardless of any
<br /> classification rate changes or levy decreases The agreement should be
<br /> entered into before the assembly and acquisition of the land on which the
<br /> completed improvements are to be located.
<br />see Minn. scat. v§ ~c~.l ~~; The 2001 tax reform legislation, which reduced class rates and provided for
<br />sut~ds. Ib, Il; 459.1?71, s~ibd. 1;
<br />=~t}~_1 f~l, a~~~.17<33, 4r~~.1; ~t3,
<br />the state takeover of the general education levy, resulted in several changes
<br />and apt}.1H7=~. to various statutes to accommodate the changes. These changes considerably
<br /> reduce the continued viability of TIF in the future.
<br />M,n,,. stet. 2 46~.1?~. The law imposes a 180-day statute of limitations on actions to challenge the
<br /> creation or modification of a TIF district. The law is complex including a
<br /> "but-for" finding before a city approves a TIF plan and the creation of a TIF
<br /> district. Cities must follow statutory requirements as to administrative
<br /> expenses, plan modifications, reporting requirements, use of increment in
<br /> pre-1979 districts, excess increments, pool, and decertification, among other
<br /> things.
<br />Minn. Brat. § 4b9.1?~. Before a district can be created, the law requires a detailed estimate of the
<br /> impact of a proposed district on city-provided services, such as police and
<br /> fire protection, public infrastructure, and borrowing costs attributable to the
<br /> district, in addition to other complex estimations must be prepared.
<br />15:16 LEAGUE OF MINNESOTA CITIES
<br />This chapter last revised 12/2010
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