8.0. EDSR 03-13-1995 - Laserfiche WebLink

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i 'o ai" C Action Alert ____ House bill would restrict TIF further Gary Carlson The House Property Tax and Tax Increment Financing Division will hear Summary of H F 147 H.F. 147 on.Wednesday March 8 at 8:00 a.m. The bill is authored by Reps. Ozment,Rest,Abrams and Winter. It The bill as proposed to be satisfactory). The State Auditor would place further restrictions on the amended by Representative would replace the Department of use of tax increment in cities through- Ozment would significantly restrict Revenues as the overseer of TIF out the state. Although the bill contains the permissible uses of tax incre- financed by capturing .1 percent(or several provisions that will affect future ment financing as well as add other about$230,000 from all increments projects,the bill would also place onerous reporting and approval statewide. County attorneys could restrictions on existing districts and requirements. sue to enforce the TIF law. require the decertification of all The major provision of the bill In another provision of the bill, districts as soon as existing commit- would strictly limit the use of tax school district approval would be ments are fulfilled. increment revenues in districts required for any tax increment The bill would require a more certified before May 1, 1990. district that is either initially planned stringent"but for"test,require school Under the bill,tax increment for housing or may eventually be approval for housing districts, limit the revel;ues would only be permitted used for housing. Even though the pooling of revenues and require to fulfill commitments currently in current school revenue formula decertification of existing districts as place.pay reasonable administra- would provide for additional .. soon as financial obligations and tive expenses or to make payments operating revenues for any new projects are completed. to school districts. For example, students located in a tax increment The League summarized the tax increment revenues could only district,the concern apparently provisions in H.F. 147 in the February be used to pay outstanding bonds surrounds the capital needs of 3 edition of the Cities Bulletin. that are secured by tax increment school districts that may be stressed Although Rep.Ozment will offer a revenues and that were issued by additional students. "delete-all"replacement for the bill,the before February 1, 1995 or to The bill would expand the general restrictions will not change. A satisfy formal commitments, annual tax increment reporting summary of the"delete-all"is to the agreements,or contracts entered requirements to include a descrip- right. into by February 1, 1995. tion of the activities that have Call your legislator and let them In addition,the bill would occurred within the district during know how these changes will impact require the authority to decertify the previous year as well as addi- your city. If you have specific projects the district when all outstanding tional information on the use of the that will be affected by the provisions, bonds ha.a been paid or defeased tax increment revenues, including a highlight these impacts. and all contractual obligations have n•;rrative of activities or improve- 1) The retroactive provisions been satisfied or are otherwise ments outside the district. Probably unfairly affect projects and broader covered by escrowed funds. the most difficult provision would area development efforts currently in The bill tightens up the"but be to write this narrative in"plain progress. for"test by requiring a finding that and simple language"that would be 2) The bill will add further the use of TIF will discourage easily understandable to a person restrictions to TIF that will adversely businesses from moving to another not familiar with tax increment impact Minnesota cities,especially state(the intent is to limit city vs. financing. where competing against other states city development conte"ts). Soil The League has a copy of the for jobs and economic development. ( districts would be limited to section by section of H.F. 147 and If you have any questions about polluted lands(topography and the delete-all bill. Contact Joel this bill,call Gary Carlson or Joel terrain alone would no longer be Jamnik.N—R Jamnik at the League or Vern Peterson at AMM. March 3, 1995 Page 5