3.10 EDSR 01-20-2015 - Laserfiche WebLink

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MEMORANDUM TO: Elk River EDA Chair and Commissioners FROM: Andrea McDowell Poehler DATE: Wednesday, December 31, 2014 RE: Economic Development Authority Legislative Update __________________________________________________________________ The bylaws for the EDA require an annual update of legislative changes to the Economic Development Authority Act, Minn. Stat. § 469.090 to § 469.1082.  There were no legislative changes to theEconomic Development Authority Act. Other economic development legislative changes included the following:  Economic development provisions in the Omnibus Capital Investment (Bonding) Act . Chapter 294 (HF 2490*/SF 2605) is the 2014 Omnibus Capital Investment (Bonding) Act. Article 1, section 21, subd. 2 provides $4 million for Greater Minnesota Business Development Public Infrastructure Grants under Minn. Stat. § 116J.431. Effective May 21, 2014.  Tax increment financing (TIF) five-year rule. Section 3 amends Minn. Stat. § 469.1763, subd. 3 to extend the five-year rule to eight years for redevelopment districts certified after April 20, 2009, and before June 30, 2012. The five-year rule essentially requires development activity within a TIF district to be finished within a five-year period that begins with certification of the original tax capacity of the TIF district. After this five-year period has expired, increments may only be spent to pay off obligations that were incurred to fund work done during the five-year period or to the extent permitted under the pooling rules and when these obligations are paid (or enough money has been collected to pay them), the district must be decertified. Effective for districts for which the request for certification was made after April 20, 2009.  Tax increment economic development districts; fiscal disparities option. Section 4 amends Minn. Stat. § 469.177, subd. 3 to allow cities the option to make the fiscal disparities contribution for economic development TIF districts in the same ways that are available for other types of tax increment districts. Under this change, a city can elect to make the fiscal disparities contribution either out of the TIF district increment, as is currently required, or out of the general city tax base. If chosen, this new option will allow economic development districts to realize more increment, but will shift the fiscal disparities contribution to the balance of the local tax base, thereby reducing the city’s tax base for 12 Page of 179711v2