Bill Text: MN SF2016 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Tax increment financing (TIF) expenditures outside the district modification
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2012-02-23 - Referred to Taxes [SF2016 Detail]
Download: Minnesota-2011-SF2016-Introduced.html
1.2relating to taxation; tax increment financing; modifying expenditures outside
1.3district;amending Minnesota Statutes 2011 Supplement, section 469.1763,
1.4subdivision 2.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2011 Supplement, section 469.1763, subdivision 2,
1.7is amended to read:
1.8 Subd. 2. Expenditures outside district. (a) For each tax increment financing
1.9district, an amount equal to at least 75 percent of the total revenue derived from tax
1.10increments paid by properties in the district must be expended on activities in the district
1.11or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities
1.12in the district or to pay, or secure payment of, debt service on credit enhanced bonds.
1.13For districts, other than redevelopment districts for which the request for certification
1.14was made after June 30, 1995, the in-district percentage for purposes of the preceding
1.15sentence is 80 percent. Not more than 25 percent of the total revenue derived from tax
1.16increments paid by properties in the district may be expended, through a development fund
1.17or otherwise, on activities outside of the district but within the defined geographic area of
1.18the project except to pay, or secure payment of, debt service on credit enhanced bonds.
1.19For districts, other than redevelopment districts for which the request for certification was
1.20made after June 30, 1995, the pooling percentage for purposes of the preceding sentence is
1.2120 percent. The revenue derived from tax increments for the district that are expended on
1.22costs under section469.176, subdivision 4h , paragraph (b), may be deducted first before
1.23calculating the percentages that must be expended within and without the district.
2.1 (b) In the case of a housing district, a housing project, as defined in section469.174,
2.2subdivision 11 , is an activity in the district.
2.3 (c) All administrative expenses are for activities outside of the district, except that
2.4if the only expenses for activities outside of the district under this subdivision are for
2.5the purposes described in paragraph (d), administrative expenses will be considered as
2.6expenditures for activities in the district.
2.7 (d) The authority may elect, in the tax increment financing plan for the district,
2.8to increase by up to ten percentage points the permitted amount of expenditures for
2.9activities located outside the geographic area of the district under paragraph (a). As
2.10permitted by section469.176, subdivision 4k , the expenditures, including the permitted
2.11expenditures under paragraph (a), need not be made within the geographic area of the
2.12project. Expenditures that meet the requirements of this paragraph are legally permitted
2.13expenditures of the district, notwithstanding section469.176, subdivisions 4b, 4c, 4d, and
2.144j . To qualify for the increase under this paragraph, the expenditures must:
2.15 (1) be used exclusively to assist housing that
2.16(i) meets the requirement for a qualified low-income building, as that term is used in
2.17section 42 of the Internal Revenue Code;and
2.18(2) (ii) does not exceed the qualified basis of the housing, as defined under section
2.1942(c) of the Internal Revenue Code, less the amount of any credit allowed under section
2.2042 of the Internal Revenue Code; and
2.21(3) be (iii) is used to:
2.22(i) (A) acquire and prepare the site of the housing;
2.23(ii) (B) acquire, construct, or rehabilitate the housing; or
2.24(iii) (C) make public improvements directly related to the housing; or
2.25(4) (2) be used to develop housing:
2.26(i) if the market value of the housingdoes upon completion of construction or
2.27rehabilitation, as evidenced by a written certificate of the county assessor or city assessor
2.28having the powers of the county assessor for the jurisdiction in which the property is
2.29located, based on the assessor's reviews of plans and specifications for the construction
2.30or rehabilitation, is estimated to not exceed the lesser of:
2.31(A) 150 percent of the average market value of single-family homes in that
2.32municipality; or
2.33(B) $200,000 for municipalities located in the metropolitan area, as defined in
2.34section473.121 , or $125,000 for all other municipalities; and
2.35(ii) if the expenditures are used to pay the cost of site acquisition, relocation,
2.36demolition of existing structures, site preparation, rehabilitation, and pollution abatement
3.1on one or more parcels,if provided that the parcel contains a residence containing is
3.2occupied by one to four family dwelling unitsthat has been vacant for six or more months
3.3and is in foreclosure as defined in section
325N.10, subdivision 7, but without regard to
3.4whether the residence is the owner's principal residence, and only after the redemption
3.5period stated in the notice provided under section
580.06 has expired with respect to
3.6which a mortgage was foreclosed under chapter 580, 581, or 582, and any applicable
3.7redemption period has expired without redemption.
3.8 (e) For a district created within a biotechnology and health sciences industry zone
3.9as defined in section469.330, subdivision 6 , or for an existing district located within
3.10such a zone, tax increment derived from such a district may be expended outside of the
3.11district but within the zone only for expenditures required for the construction of public
3.12infrastructure necessary to support the activities of the zone, land acquisition, and other
3.13redevelopment costs as defined in section469.176, subdivision 4j . These expenditures are
3.14considered as expenditures for activities within the district.
3.15(f) The authority under paragraph (d), clause(4) (2), expires on December 31, 2016.
3.16Increments may continue to be expended under this authority after that date, if they are
3.17used to pay bonds or binding contracts that would qualify under subdivision 3, paragraph
3.18(a), if December 31, 2016, is considered to be the last date of the five-year period after
3.19certification under that provision.
3.20EFFECTIVE DATE.This section is effective for any district that is subject to the
3.21provisions of Minnesota Statutes, section 469.1763, regardless of when the request for
3.22certification was made.
1.3district;amending Minnesota Statutes 2011 Supplement, section 469.1763,
1.4subdivision 2.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2011 Supplement, section 469.1763, subdivision 2,
1.7is amended to read:
1.8 Subd. 2. Expenditures outside district. (a) For each tax increment financing
1.9district, an amount equal to at least 75 percent of the total revenue derived from tax
1.10increments paid by properties in the district must be expended on activities in the district
1.11or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities
1.12in the district or to pay, or secure payment of, debt service on credit enhanced bonds.
1.13For districts, other than redevelopment districts for which the request for certification
1.14was made after June 30, 1995, the in-district percentage for purposes of the preceding
1.15sentence is 80 percent. Not more than 25 percent of the total revenue derived from tax
1.16increments paid by properties in the district may be expended, through a development fund
1.17or otherwise, on activities outside of the district but within the defined geographic area of
1.18the project except to pay, or secure payment of, debt service on credit enhanced bonds.
1.19For districts, other than redevelopment districts for which the request for certification was
1.20made after June 30, 1995, the pooling percentage for purposes of the preceding sentence is
1.2120 percent. The revenue derived from tax increments for the district that are expended on
1.22costs under section
1.23calculating the percentages that must be expended within and without the district.
2.1 (b) In the case of a housing district, a housing project, as defined in section
2.2subdivision 11
2.3 (c) All administrative expenses are for activities outside of the district, except that
2.4if the only expenses for activities outside of the district under this subdivision are for
2.5the purposes described in paragraph (d), administrative expenses will be considered as
2.6expenditures for activities in the district.
2.7 (d) The authority may elect, in the tax increment financing plan for the district,
2.8to increase by up to ten percentage points the permitted amount of expenditures for
2.9activities located outside the geographic area of the district under paragraph (a). As
2.10permitted by section
2.11expenditures under paragraph (a), need not be made within the geographic area of the
2.12project. Expenditures that meet the requirements of this paragraph are legally permitted
2.13expenditures of the district, notwithstanding section
2.144j
2.15 (1) be used exclusively to assist housing that
2.16(i) meets the requirement for a qualified low-income building, as that term is used in
2.17section 42 of the Internal Revenue Code;
2.18
2.1942(c) of the Internal Revenue Code, less the amount of any credit allowed under section
2.2042 of the Internal Revenue Code; and
2.21
2.22
2.23
2.24
2.25
2.26(i) if the market value of the housing
2.27rehabilitation, as evidenced by a written certificate of the county assessor or city assessor
2.28having the powers of the county assessor for the jurisdiction in which the property is
2.29located, based on the assessor's reviews of plans and specifications for the construction
2.30or rehabilitation, is estimated to not exceed the lesser of:
2.31(A) 150 percent of the average market value of single-family homes in that
2.32municipality; or
2.33(B) $200,000 for municipalities located in the metropolitan area, as defined in
2.34section
2.35(ii) if the expenditures are used to pay the cost of site acquisition, relocation,
2.36demolition of existing structures, site preparation, rehabilitation, and pollution abatement
3.1on one or more parcels,
3.2occupied by one to four family dwelling units
3.3
3.4
3.5
3.6which a mortgage was foreclosed under chapter 580, 581, or 582, and any applicable
3.7redemption period has expired without redemption.
3.8 (e) For a district created within a biotechnology and health sciences industry zone
3.9as defined in section
3.10such a zone, tax increment derived from such a district may be expended outside of the
3.11district but within the zone only for expenditures required for the construction of public
3.12infrastructure necessary to support the activities of the zone, land acquisition, and other
3.13redevelopment costs as defined in section
3.14considered as expenditures for activities within the district.
3.15(f) The authority under paragraph (d), clause
3.16Increments may continue to be expended under this authority after that date, if they are
3.17used to pay bonds or binding contracts that would qualify under subdivision 3, paragraph
3.18(a), if December 31, 2016, is considered to be the last date of the five-year period after
3.19certification under that provision.
3.20EFFECTIVE DATE.This section is effective for any district that is subject to the
3.21provisions of Minnesota Statutes, section 469.1763, regardless of when the request for
3.22certification was made.
