Bill Text: MN HF707 | 2013-2014 | 88th Legislature | Introduced
Bill Title: Tax increment financing five-year rule extended to ten years.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2013-03-06 - Author added FitzSimmons [HF707 Detail]
Download: Minnesota-2013-HF707-Introduced.html
1.2relating to tax increment financing; extending the five-year rule to ten years;
1.3amending Minnesota Statutes 2012, section 469.1763, subdivisions 3, 4.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. Minnesota Statutes 2012, section 469.1763, subdivision 3, is amended to read:
1.6 Subd. 3.Five-year Ten-year rule. (a) Revenues derived from tax increments are
1.7considered to have been expended on an activity within the district under subdivision 2
1.8only if one of the following occurs:
1.9(1) before or withinfive ten years after certification of the district, the revenues are
1.10actually paid to a third party with respect to the activity;
1.11(2) bonds, the proceeds of which must be used to finance the activity, are issued and
1.12sold to a third party before or withinfive ten years after certification, the revenues are
1.13spent to repay the bonds, and the proceeds of the bonds either are, on the date of issuance,
1.14reasonably expected to be spent before the end of the later of (i) thefive-year ten-year
1.15 period, or (ii) a reasonable temporary period within the meaning of the use of that term
1.16under section 148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably
1.17required reserve or replacement fund;
1.18(3) binding contracts with a third party are entered into for performance of the
1.19activity before or withinfive ten years after certification of the district and the revenues
1.20are spent under the contractual obligation;
1.21(4) costs with respect to the activity are paid before or withinfive ten years after
1.22certification of the district and the revenues are spent to reimburse a party for payment
1.23of the costs, including interest on unreimbursed costs; or
2.1(5) expenditures are made for housing purposes as permitted by subdivision 2,
2.2paragraphs (b) and (d), or for public infrastructure purposes within a zone as permitted
2.3by subdivision 2, paragraph (e).
2.4(b) For purposes of this subdivision, bonds include subsequent refunding bonds if
2.5the original refunded bonds meet the requirements of paragraph (a), clause (2).
2.6(c) For a redevelopment district or a renewal and renovation district certified after
2.7June 30, 2003, and before April 20, 2009, the five-year periods described in paragraph
2.8(a) are extended to ten years after certification of the district. This extension is provided
2.9primarily to accommodate delays in development activities due to unanticipated economic
2.10circumstances.
2.11EFFECTIVE DATE.This section is effective for districts certified after June 30,
2.122003.
2.13 Sec. 2. Minnesota Statutes 2012, section 469.1763, subdivision 4, is amended to read:
2.14 Subd. 4. Use of revenues for decertification. (a) In each year beginning with
2.15thesixth eleventh year following certification of the district, if the applicable in-district
2.16percent of the revenues derived from tax increments paid by properties in the district
2.17exceeds the amount of expenditures that have been made for costs permitted under
2.18subdivision 3, an amount equal to the difference between the in-district percent of the
2.19revenues derived from tax increments paid by properties in the district and the amount of
2.20expenditures that have been made for costs permitted under subdivision 3 must be used
2.21and only used to pay or defease the following or be set aside to pay the following:
2.22(1) outstanding bonds, as defined in subdivision 3, paragraphs (a), clause (2), and (b);
2.23(2) contracts, as defined in subdivision 3, paragraph (a), clauses (3) and (4);
2.24(3) credit enhanced bonds to which the revenues derived from tax increments are
2.25pledged, but only to the extent that revenues of the district for which the credit enhanced
2.26bonds were issued are insufficient to pay the bonds and to the extent that the increments
2.27from the applicable pooling percent share for the district are insufficient; or
2.28(4) the amount provided by the tax increment financing plan to be paid under
2.29subdivision 2, paragraphs (b), (d), and (e).
2.30(b) The district must be decertified and the pledge of tax increment discharged
2.31when the outstanding bonds have been defeased and when sufficient money has been set
2.32aside to pay, based on the increment to be collected through the end of the calendar year,
2.33the following amounts:
2.34(1) contractual obligations as defined in subdivision 3, paragraph (a), clauses (3)
2.35and (4);
3.1(2) the amount specified in the tax increment financing plan for activities qualifying
3.2under subdivision 2, paragraph (b), that have not been funded with the proceeds of bonds
3.3qualifying under paragraph (a), clause (1); and
3.4(3) the additional expenditures permitted by the tax increment financing plan for
3.5housing activities under an election under subdivision 2, paragraph (d), that have not been
3.6funded with the proceeds of bonds qualifying under paragraph (a), clause (1).
3.7EFFECTIVE DATE.This section is effective for districts certified after June 30,
3.82003.
1.3amending Minnesota Statutes 2012, section 469.1763, subdivisions 3, 4.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. Minnesota Statutes 2012, section 469.1763, subdivision 3, is amended to read:
1.6 Subd. 3.
1.7considered to have been expended on an activity within the district under subdivision 2
1.8only if one of the following occurs:
1.9(1) before or within
1.10actually paid to a third party with respect to the activity;
1.11(2) bonds, the proceeds of which must be used to finance the activity, are issued and
1.12sold to a third party before or within
1.13spent to repay the bonds, and the proceeds of the bonds either are, on the date of issuance,
1.14reasonably expected to be spent before the end of the later of (i) the
1.15 period, or (ii) a reasonable temporary period within the meaning of the use of that term
1.16under section 148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably
1.17required reserve or replacement fund;
1.18(3) binding contracts with a third party are entered into for performance of the
1.19activity before or within
1.20are spent under the contractual obligation;
1.21(4) costs with respect to the activity are paid before or within
1.22certification of the district and the revenues are spent to reimburse a party for payment
1.23of the costs, including interest on unreimbursed costs; or
2.1(5) expenditures are made for housing purposes as permitted by subdivision 2,
2.2paragraphs (b) and (d), or for public infrastructure purposes within a zone as permitted
2.3by subdivision 2, paragraph (e).
2.4(b) For purposes of this subdivision, bonds include subsequent refunding bonds if
2.5the original refunded bonds meet the requirements of paragraph (a), clause (2).
2.6
2.7
2.8
2.9
2.10
2.11EFFECTIVE DATE.This section is effective for districts certified after June 30,
2.122003.
2.13 Sec. 2. Minnesota Statutes 2012, section 469.1763, subdivision 4, is amended to read:
2.14 Subd. 4. Use of revenues for decertification. (a) In each year beginning with
2.15the
2.16percent of the revenues derived from tax increments paid by properties in the district
2.17exceeds the amount of expenditures that have been made for costs permitted under
2.18subdivision 3, an amount equal to the difference between the in-district percent of the
2.19revenues derived from tax increments paid by properties in the district and the amount of
2.20expenditures that have been made for costs permitted under subdivision 3 must be used
2.21and only used to pay or defease the following or be set aside to pay the following:
2.22(1) outstanding bonds, as defined in subdivision 3, paragraphs (a), clause (2), and (b);
2.23(2) contracts, as defined in subdivision 3, paragraph (a), clauses (3) and (4);
2.24(3) credit enhanced bonds to which the revenues derived from tax increments are
2.25pledged, but only to the extent that revenues of the district for which the credit enhanced
2.26bonds were issued are insufficient to pay the bonds and to the extent that the increments
2.27from the applicable pooling percent share for the district are insufficient; or
2.28(4) the amount provided by the tax increment financing plan to be paid under
2.29subdivision 2, paragraphs (b), (d), and (e).
2.30(b) The district must be decertified and the pledge of tax increment discharged
2.31when the outstanding bonds have been defeased and when sufficient money has been set
2.32aside to pay, based on the increment to be collected through the end of the calendar year,
2.33the following amounts:
2.34(1) contractual obligations as defined in subdivision 3, paragraph (a), clauses (3)
2.35and (4);
3.1(2) the amount specified in the tax increment financing plan for activities qualifying
3.2under subdivision 2, paragraph (b), that have not been funded with the proceeds of bonds
3.3qualifying under paragraph (a), clause (1); and
3.4(3) the additional expenditures permitted by the tax increment financing plan for
3.5housing activities under an election under subdivision 2, paragraph (d), that have not been
3.6funded with the proceeds of bonds qualifying under paragraph (a), clause (1).
3.7EFFECTIVE DATE.This section is effective for districts certified after June 30,
3.82003.
