8.4. SR 07-31-1995 - Laserfiche WebLink

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Law summaries continued housing, renewal and renovation districts would require a 10 percent contribution. Redevelopment, hazard- ous substance, soils, and mined underground space districts would require a 7.5 percent contribution. These local government contribu- tions must be made out of the develop- ment authority's unrestricted money, and cannot be made, directly or indirectly, with tax increments or certain developer payments. The maximum. contribution by the develop- ment authority is limited to two percent of the adjusted net tax capacity of the city. If the state contributes to the projected costs, through a direct grant or similar incentive, the required local contribution is reduced by one-half of the dollar amount of the grant or incentive. Development authorities may also request contributions from the county, school district, or other units of - government. Special law duration extensions Under any duration extension request to the legislature, development authorities will have the option of having the LGA/HACA penalty applied or having state school aid recomputed with the TIF district's captured value, at the time of the extension, included as if it were pan of the school district's tax base. This would have the effect of reducing state school aid and increasing local prop- erty taxes on all other property within the school district boundaries. In' addition, special law duration exten- sions will be required to obtain approval from all affected governmen- tal units (city or town, county, and school district). Duration extensions are granted for the cities of St. Louis Park, Hastings, Hopkins, Morris, Oakdale, and Lake City. Lakefield is authorized to establish a redevelopment TIF district to develop property previously used for a municipal hospital. Crystal, Fridley, Minneapolis, and St. Paul are authorized to establish pilot projects for the creation of housing replacement TIF projects. "But-for" test modified Municipalities will be required to make a finding .that the taxable market value of a site will increase if TIF is used over that which would occur if TIF was not used. In making this determination, the present value of the tax increment subsidies is deducted from the projected market value of the TIF development. Qualified housing districts (those providing assistance to low-income rental projects) are exempt from the "but-for" test. Pooling of tax increment revenues The amount of increment revenues that may be spent outside anon- redevelopment TIF district is limited to 20 percent of the total collections within the. district. Redevelopment districts will continue to have the 25 percent limitation. Restrictions on uses of certain districts The use of soils districts is restricted to pollution or contamination clean-up. Economic development. districts may no longer be used for commercial purposes in cities with populations under 5,000. These cities are now subject to the same limitations as large cities where use is limited to manufacturing, research and develop- ment, warehousing, etc. If 80 percent of an area has bedrock soils conditions, an economic development district may be used for correcting soils deficiencies and for public improvements (previ- ously, this was a permissible use for all soils districts). Green acres, metropolitan agricul- tural preserves, and open space Properties that were enrolled in a deferred assessment program within the last five years may not be included within a TIF district. An exception is made for parcels outside the metro area to be used for manufacturing facilities. Newspaper disclosure Additional items must now be included in the annual newspaper disclosure which is also made manda- tory. Under current law, newspaper disclosure is not required as long as an annual report is filed with the State Auditor. The. additional items include: the amount of increment paid to other governmental units, the amount paid for administrative costs, the amount of increment spent outside the TIF district, and the effect on property taxes due to the election to pay the fiscal disparities contribution out of a general tax on the municipality. Copies of the newspaper disclosure must be provided to the State Auditor (rather than the commissioner of revenue). Request for certification date • changed For consistency with general property tax timelines, the cut-off date for submitting certification requests for parcels to qualify for the next taxes payable year is changed from July 1 to June 30. State oversight Responsibility for state oversight of tax increment financing will be transferred from the Commissioner of Revenue to the State Auditor. To fund this new duty, one tenth of one percent of all increment revenues generated will be paid to the State Auditor's office. The State Auditor is authorized to examine the use of TIF for compli- ance with the law and to refer violation information to the county attorney who may bring an action to enforce the law. The State Auditor must also prepare reports of non-compliance to the governing body who approved the district and forward them for comments to the municipality which must respond in writing within 60 days. These LS4 1995 Law Summaries