Subdivision 1. Generally. In sections 469.174 to
469.179, the terms defined in this section have the meanings
given them herein, unless the context indicates a different
meaning.
Subd. 2. Authority. "Authority" means a rural
development financing authority created pursuant to sections
469.142 to 469.151; a housing and redevelopment authority
created pursuant to sections 469.001 to 469.047; a port
authority created pursuant to sections 469.048 to 469.068; an
economic development authority created pursuant to sections
469.090 to 469.108; a redevelopment agency as defined in
sections 469.152 to 469.165; a municipality that is
administering a development district created pursuant to
sections 469.124 to 469.134 or any special law; a municipality
that undertakes a project pursuant to sections 469.152 to
469.165, except a town located outside the metropolitan area or
with a population of 5,000 persons or less; or a municipality
that exercises the powers of a port authority pursuant to any
general or special law.
Subd. 3. Bonds. "Bonds" means any bonds, including
refunding bonds, notes, interim certificates, debentures, or
other obligations issued by an authority under section 469.178
or which were issued in aid of a project under any other law,
except revenue bonds issued pursuant to sections 469.152 to
469.165, prior to August 1, 1979.
Subd. 4. Captured net tax capacity. "Captured net
tax capacity" means the amount by which the current net tax
capacity of a tax increment financing district or an extended
subdistrict exceeds the original net tax capacity, including the
value of property normally taxable as personal property by
reason of its location on or over property owned by a tax-exempt
entity. In the case of a hazardous substance subdistrict,
except an extended subdistrict, "captured net tax capacity"
means the amount, if any, by which the lesser of (1) the
original net tax capacity or (2) the current net tax capacity of
the portion of the tax increment financing district overlying
the subdistrict exceeds the original net tax capacity of the
subdistrict.
Subd. 5. Governing body. "Governing body" means the
elected council or board of a municipality.
Subd. 6. Municipality. "Municipality" means any
city, however organized, and with respect to a project
undertaken pursuant to sections 469.152 to 469.165,
"municipality" has the meaning given in sections 469.152 to
469.165, and with respect to a project undertaken pursuant to
sections 469.142 to 469.151, or a county or multicounty project
undertaken pursuant to sections 469.004 to 469.008,
"municipality" also includes any county.
Subd. 7. Original net tax capacity. (a) Except as
provided in paragraph (b), "original net tax capacity" means the
tax capacity of all taxable real property within a tax increment
financing district as certified by the commissioner of revenue
for the previous assessment year, provided that the request by
an authority for certification of a new tax increment financing
district or for the expansion of an existing district has been
made to the county auditor by June 30. The original tax
capacity of districts for which requests are filed after June 30
has an original tax capacity based on the current assessment
year. In any case, the original tax capacity must be determined
together with subsequent adjustments as set forth in section
469.177, subdivisions 1 and 4. In determining the original net
tax capacity the net tax capacity of real property exempt from
taxation at the time of the request shall be zero, except for
real property which is tax exempt by reason of public ownership
by the requesting authority and which has been publicly owned
for less than one year prior to the date of the request for
certification, in which event the net tax capacity of the
property shall be the net tax capacity as most recently
determined by the commissioner of revenue.
(b) The original net tax capacity of any designated
hazardous substance site or hazardous substance subdistrict
shall be determined as of the date the authority certifies to
the county auditor that the authority has entered a
redevelopment or other agreement for the removal actions or
remedial actions specified in a development response action
plan, or otherwise provided funds to finance the development
response action plan. The original net tax capacity equals (i)
the net tax capacity of the parcel or parcels in the site or
subdistrict, as most recently determined by the commissioner of
revenue, less (ii) the estimated costs of the removal actions
and remedial actions as specified in a development response
action plan to be undertaken with respect to the parcel or
parcels, (iii) but not less than zero.
(c) The original net tax capacity of a hazardous substance
site or subdistrict shall be increased by the amount by which it
was reduced pursuant to paragraph (b), clause (ii), upon
certification by the municipality that the cost of the removal
and remedial actions specified in the development response
action plan, except for long-term monitoring and similar
activities, have been paid or reimbursed.
(d) For purposes of this subdivision, "real property" shall
include any property normally taxable as personal property by
reason of its location on or over publicly owned property.
Subd. 8. Project. "Project" means a project as
described in section 469.142; an industrial development district
as described in section 469.058, subdivision 1; an economic
development district as described in section 469.101,
subdivision 1; a project as defined in section 469.002,
subdivision 12; a development district as defined in section
469.125, subdivision 9, or any special law; or a project as
defined in section 469.153, subdivision 2, paragraph (a), (b),
or (c).
Subd. 9. Tax increment financing district. "Tax
increment financing district" or "district" means a contiguous
or noncontiguous geographic area within a project delineated in
the tax increment financing plan, as provided by section
469.175, subdivision 1, for the purpose of financing
redevelopment, mined underground space development, housing or
economic development in municipalities through the use of tax
increment generated from the captured net tax capacity in the
tax increment financing district.
Subd. 10. Redevelopment district. (a) "Redevelopment
district" means a type of tax increment financing district
consisting of a project, or portions of a project, within which
the authority finds by resolution that one of the following
conditions, reasonably distributed throughout the district,
exists:
(1) parcels consisting of 70 percent of the area of the
district are occupied by buildings, streets, utilities, or other
improvements and more than 50 percent of the buildings, not
including outbuildings, are structurally substandard to a degree
requiring substantial renovation or clearance; or
(2) the property consists of vacant, unused, underused,
inappropriately used, or infrequently used railyards, rail
storage facilities, or excessive or vacated railroad
rights-of-way.
(b) For purposes of this subdivision, "structurally
substandard" shall mean containing defects in structural
elements or a combination of deficiencies in essential utilities
and facilities, light and ventilation, fire protection including
adequate egress, layout and condition of interior partitions, or
similar factors, which defects or deficiencies are of sufficient
total significance to justify substantial renovation or
clearance.
A building is not structurally substandard if it is in
compliance with the building code applicable to new buildings or
could be modified to satisfy the building code at a cost of less
than 15 percent of the cost of constructing a new structure of
the same square footage and type on the site. The municipality
may find that a building is not disqualified as structurally
substandard under the preceding sentence on the basis of
reasonably available evidence, such as the size, type, and age
of the building, the average cost of plumbing, electrical, or
structural repairs, or other similar reliable evidence. If the
evidence supports a reasonable conclusion that the building is
not disqualified as structurally substandard, the municipality
may make such a determination without an interior inspection or
an independent, expert appraisal of the cost of repair and
rehabilitation of the building.
A parcel is deemed to be occupied by a structurally
substandard building for purposes of the finding under paragraph
(a) if all of the following conditions are met:
(1) the parcel was occupied by a substandard building
within three years of the filing of the request for
certification of the parcel as part of the district with the
county auditor;
(2) the substandard building was demolished or removed by
the authority or the demolition or removal was financed by the
authority or was done by a developer under a development
agreement with the authority;
(3) the authority found by resolution before the demolition
or removal that the parcel was occupied by a structurally
substandard building and that after demolition and clearance the
authority intended to include the parcel within a district; and
(4) upon filing the request for certification of the tax
capacity of the parcel as part of a district, the authority
notifies the county auditor that the original tax capacity of
the parcel must be adjusted as provided by section 469.177,
subdivision 1, paragraph (h).
(c) For purposes of this subdivision, a parcel is not
occupied by buildings, streets, utilities, or other improvements
unless 15 percent of the area of the parcel contains
improvements.
(d) For districts consisting of two or more noncontiguous
areas, each area must qualify as a redevelopment district under
paragraph (a) to be included in the district, and the entire
area of the district must satisfy paragraph (a).
Subd. 10a. Renewal and renovation district. (a)
"Renewal and renovation district" means a type of tax increment
financing district consisting of a project, or portions of a
project, within which the authority finds by resolution that:
(1)(i) parcels consisting of 70 percent of the area of the
district are occupied by buildings, streets, utilities, or other
improvements; (ii) 20 percent of the buildings are structurally
substandard; and (iii) 30 percent of the other buildings require
substantial renovation or clearance to remove existing
conditions such as: inadequate street layout, incompatible uses
or land use relationships, overcrowding of buildings on the
land, excessive dwelling unit density, obsolete buildings not
suitable for improvement or conversion, or other identified
hazards to the health, safety, and general well-being of the
community; and
(2) the conditions described in clause (1) are reasonably
distributed throughout the geographic area of the district.
(b) For purposes of determining whether a building is
structurally substandard, whether parcels are occupied by
buildings or other improvements, or whether noncontiguous areas
qualify, the provisions of subdivision 10, paragraphs (b), (c),
and (d) apply.
Subd. 11. Housing district. "Housing district" means
a type of tax increment financing district which consists of a
project, or a portion of a project, intended for occupancy, in
part, by persons or families of low and moderate income, as
defined in chapter 462A, Title II of the National Housing Act of
1934, the National Housing Act of 1959, the United States
Housing Act of 1937, as amended, Title V of the Housing Act of
1949, as amended, any other similar present or future federal,
state, or municipal legislation, or the regulations promulgated
under any of those acts. A project does not qualify under this
subdivision if the fair market value of the improvements which
are constructed for commercial uses or for uses other than low
and moderate income housing consists of more than 20 percent of
the total fair market value of the planned improvements in the
development plan or agreement. The fair market value of the
improvements may be determined using the cost of construction,
capitalized income, or other appropriate method of estimating
market value.
Subd. 12. Economic development district. "Economic
development district" means a type of tax increment financing
district which consists of any project, or portions of a
project, not meeting the requirements found in the definition of
redevelopment district, renewal and renovation district, soils
condition district, mined underground space development
district, or housing district, but which the authority finds to
be in the public interest because:
(1) it will discourage commerce, industry, or manufacturing
from moving their operations to another state or municipality;
or
(2) it will result in increased employment in the state; or
(3) it will result in preservation and enhancement of the
tax base of the state.
Subd. 13. Mined underground space development district.
"Mined underground space development district" means a type
of tax increment financing district consisting of a project, or
portions of a project, for the development or redevelopment of
mined underground space pursuant to sections 469.135 to 469.141.
Subd. 14. Administrative expenses. "Administrative
expenses" means all expenditures of an authority other than
amounts paid for the purchase of land or amounts paid to
contractors or others providing materials and services,
including architectural and engineering services, directly
connected with the physical development of the real property in
the district, relocation benefits paid to or services provided
for persons residing or businesses located in the district, or
amounts used to pay interest on, fund a reserve for, or sell at
a discount bonds issued pursuant to section 469.178.
"Administrative expenses" includes amounts paid for services
provided by bond counsel, fiscal consultants, and planning or
economic development consultants.
Subd. 15. Parcel. "Parcel" means a tract or plat of
land established prior to the certification of the district as a
single unit for purposes of assessment.
Subd. 16. Designated hazardous substance site.
"Designated hazardous substance site" means any parcel or
parcels with respect to which the authority has certified to the
county auditor that the authority has entered into a
redevelopment or other agreement providing for the removal
actions or remedial actions specified in a development response
action plan or the authority will use other available money,
including without limitation tax increments, to finance the
removal or remedial actions. A parcel described in the plan or
plan amendment may be designated for inclusion in the hazardous
substance subdistrict prior to approval of the development
action response plan on the basis of the reasonable expectation
of the municipality. Such parcel may not be certified as part
of the subdistrict until the development action response plan
has been approved.
Subd. 17. Development action response plan.
"Development action response plan" means a plan or proposal for
removal actions or remedial actions if the plan or proposal is
submitted to the pollution control agency and the actions
recommended in the plan or proposal are approved in writing by
the commissioner of the agency as reasonable and necessary to
protect the public health, welfare, and environment. The
commissioner shall review the development action response plan
and approve, modify, or reject the recommended actions within 60
days after submission of the plan (or revised plan) by the
authority. The commissioner shall notify the authority in
writing of the decision on the recommended actions within 30
days after the decision and, if the recommended actions are
rejected, shall specify the reasons for rejection.
Subd. 18. Terms defined in other chapters. The terms
"removal," "remedy," "remedial action," "response,"
"hazardous
substance," and "pollutant or contaminant" have the meanings
given in section 115B.02. The term "petroleum" has the meaning
given in section 115C.02.
Subd. 19. Soils condition district. (a) "Soils
condition district" means a type of tax increment financing
district consisting of a project, or portions of a project,
within which the authority finds by resolution that the
following conditions exist:
(1) the presence of hazardous substances, pollution, or
contaminants requires removal or remedial action for use;
(2) the estimated cost of the proposed removal and remedial
action exceeds the fair market value of the land before
completion of the preparation.
The requirements of clause (2) need not be satisfied, if
each parcel of property in the district either satisfies the
requirements of clause (2) or the estimated costs of the
proposed removal or remedial action exceeds $2 per square foot
for the area of the parcel.
(b) The proposed removal or remediation action must be
specified in a development action response plan to satisfy the
requirements of paragraph (a).
Subd. 20. Internal Revenue Code. "Internal Revenue
Code" means the Internal Revenue Code of 1986, as amended
through December 31, 1993.
Subd. 21. Credit enhanced bonds. "Credit enhanced
bonds" means special obligation bonds that are:
(1) payable primarily from tax increments (i) derived from
a tax increment financing district within which the activity, as
defined in section 469.1763, subdivision 1, financed by at least
the applicable in-district percentage of the bond proceeds is
located and (ii) estimated on the date of issuance to be
sufficient to pay when due the debt service on the bonds, and
(2) further secured by tax increments (i) derived from one
or more tax increment financing districts and (ii) determined by
the issuer to be necessary in order to make the marketing of the
bonds feasible.
For purposes of this subdivision, "applicable in-district
percentage" means the percentage under section 469.1763,
subdivision 2, for the district.
Subd. 22. Tourism facility. "Tourism facility" means
property that:
(1) is located in a county where the median income is no
more than 85 percent of the state median income;
(2) is located in a county in which, excluding the cities
of the first class in that county, the earnings on
tourism-related activities are 15 percent or more of the total
earnings in the county;
(3) is located outside the metropolitan area defined in
section 473.121, subdivision 2;
(4) is not located in a city with a population in excess of
20,000; and
(5) is acquired, constructed, or rehabilitated for use as a
convention and meeting facility, amusement park, recreation
facility, cultural facility, marina, park, hotel, motel, lodging
facility, or nonhomestead dwelling unit that in each case is
intended to serve primarily individuals from outside the county.
Subd. 23. Hazardous substance subdistrict.
"Hazardous substance subdistrict" or "subdistrict" means
a
hazardous substance subdistrict created under section 469.175,
subdivision 7.
Subd. 24. Extended subdistrict. "Extended
subdistrict" means a hazardous substance subdistrict, but only
for any period during which the subdistrict remains in effect
after the overlying tax increment district has terminated.
HIST: 1987 c 291 s 175; 1988 c 719 art 5 s 84; art 12 s 1-8;
1989 c 277 art 2 s 62; 1989 c 329 art 13 s 20; 1Sp1989 c 1 art
14 s 1-5; 1990 c 391 art 8 s 50; 1990 c 604 art 7 s 4-9; 1991 c
291 art 10 s 4,5; 1993 c 375 art 14 s 4-6; 1994 c 465 art 1 s
53; 1994 c 587 art 1 s 24; 1995 c 264 art 5 s 12-16; 1996 c 471
art 7 s 9,10
Subdivision 1. Tax increment financing plan. (a) A
tax increment financing plan shall contain:
(1) a statement of objectives of an authority for the
improvement of a project;
(2) a statement as to the development program for the
project, including the property within the project, if any, that
the authority intends to acquire;
(3) a list of any development activities that the plan
proposes to take place within the project, for which contracts
have been entered into at the time of the preparation of the
plan, including the names of the parties to the contract, the
activity governed by the contract, the cost stated in the
contract, and the expected date of completion of that activity;
(4) identification or description of the type of any other
specific development reasonably expected to take place within
the project, and the date when the development is likely to
occur;
(5) estimates of the following:
(i) cost of the project, including administration expenses;
(ii) amount of bonded indebtedness to be incurred;
(iii) sources of revenue to finance or otherwise pay public
costs;
(iv) the most recent net tax capacity of taxable real
property within the tax increment financing district and within
any subdistrict;
(v) the estimated captured net tax capacity of the tax
increment financing district at completion; and
(vi) the duration of the tax increment financing district's
and any subdistrict's existence;
(6) statements of the authority's alternate estimates of
the impact of tax increment financing on the net tax capacities
of all taxing jurisdictions in which the tax increment financing
district is located in whole or in part. For purposes of one
statement, the authority shall assume that the estimated
captured net tax capacity would be available to the taxing
jurisdictions without creation of the district, and for purposes
of the second statement, the authority shall assume that none of
the estimated captured net tax capacity would be available to
the taxing jurisdictions without creation of the district or
subdistrict;
(7) identification and description of studies and analyses
used to make the determination set forth in subdivision 3,
clause (2); and
(8) identification of all parcels to be included in the
district or any subdistrict.
(b) For a housing district, redevelopment district, or a
hazardous substance subdistrict, the authority may elect in the
tax increment financing plan to provide for the identification
of a minimum market value in the plan, development agreement, or
assessment agreement, and provide that increment is first
received by the authority when (1) the market value of the
improvements as determined by the assessor reaches or exceeds
the minimum market value, or (2) four years has elapsed from the
date of certification of the original net tax capacity of the
taxable real property in the district or subdistrict by the
county auditor, whichever is earlier.
Subd. 1a. Inclusion of county road costs. (a) The
county board may require the authority to pay all or a portion
of the cost of county road improvements out of increment
revenues, if the following conditions occur:
(1) the proposed tax increment financing plan or an
amendment to the plan contemplates construction of a development
that will, in the judgment of the county, substantially increase
the use of county roads requiring construction of road
improvements or other road costs; and
(2) the road improvements or other road costs are not
scheduled for construction within five years under the county
capital improvement plan or other formally adopted county plan,
and in the opinion of the county, would not reasonably be
expected to be needed within the reasonably foreseeable future
if the tax increment financing plan were not implemented.
(b) If the county elects to use increments to finance the
road improvements, the county must notify the authority and
municipality within 30 days after receipt of the information on
the proposed tax increment district under subdivision 2. The
notice must include the estimated cost of the road improvements
and schedule for construction and payment of the cost. The
authority must include the improvements in the tax increment
financing plan. The improvements may be financed with the
proceeds of tax increment bonds or the authority and the county
may agree that the county will finance the improvements with
county funds to be repaid in installments, with or without
interest, out of increment revenues. If the cost of the road
improvements and other project costs exceed the projected amount
of the increment revenues, the county and authority shall
negotiate an agreement, modifying the development plan or
proposed road improvements that will permit financing of the
costs before the tax increment financing plan may be approved.
Subd. 2. Consultations; comment and filing. Before
formation of a tax increment financing district, the authority
shall provide an opportunity to the members of the county boards
of commissioners of any county in which any portion of the
proposed district is located and the members of the school board
of any school district in which any portion of the proposed
district is located to meet with the authority. The authority
shall present to the members of the county boards of
commissioners and the school boards its estimate of the fiscal
and economic implications of the proposed tax increment
financing district. The information on the fiscal and economic
implications of the plan must be provided to the county and
school district boards at least 30 days before the public
hearing required by subdivision 3. The 30-day requirement is
waived if the county and school district submit written comments
on the proposal and any modification of the proposal to the
authority after receipt of the information. The members of the
county boards of commissioners and the school boards may present
their comments at the public hearing on the tax increment
financing plan required by subdivision 3. Upon adoption of the
tax increment financing plan, the authority shall file a copy of
the plan with the commissioner of revenue. The authority must
also file with the commissioner a copy of the development plan
for the project area.
Subd. 2a. Housing districts; redevelopment districts.
In the case of a proposed housing district or redevelopment
district, in addition to the requirements of subdivision 2, at
least 30 days before the publication of the notice for public
hearing under subdivision 3, the authority shall deliver written
notice of the proposed district to each county commissioner who
represents part of the area proposed to be included in the
district. The notice must contain a general description of the
boundaries of the proposed district and the proposed activities
to be financed by the district, an offer by the authority to
meet and discuss the proposed district with the county
commissioner, and a solicitation of the commissioner's comments
with respect to the district.
Subd. 3. Municipality approval. A county auditor
shall not certify the original net tax capacity of a tax
increment financing district until the tax increment financing
plan proposed for that district has been approved by the
municipality in which the district is located. If an authority
that proposes to establish a tax increment financing district
and the municipality are not the same, the authority shall apply
to the municipality in which the district is proposed to be
located and shall obtain the approval of its tax increment
financing plan by the municipality before the authority may use
tax increment financing. The municipality shall approve the tax
increment financing plan only after a public hearing thereon
after published notice in a newspaper of general circulation in
the municipality at least once not less than ten days nor more
than 30 days prior to the date of the hearing. The published
notice must include a map of the area of the district from which
increments may be collected and, if the project area includes
additional area, a map of the project area in which the
increments may be expended. The hearing may be held before or
after the approval or creation of the project or it may be held
in conjunction with a hearing to approve the project. Before or
at the time of approval of the tax increment financing plan, the
municipality shall make the following findings, and shall set
forth in writing the reasons and supporting facts for each
determination:
(1) that the proposed tax increment financing district is a
redevelopment district, a renewal or renovation district, a
mined underground space development district, a housing
district, a soils condition district, or an economic development
district; if the proposed district is a redevelopment district
or a renewal or renovation district, the reasons and supporting
facts for the determination that the district meets the criteria
of section 469.174, subdivision 10, paragraph (a), clauses (1)
and (2), or subdivision 10a, must be retained and made available
to the public by the authority until the district has been
terminated.
(2) that the proposed development or redevelopment, in the
opinion of the municipality, would not reasonably be expected to
occur solely through private investment within the reasonably
foreseeable future and that the increased market value of the
site that could reasonably be expected to occur without the use
of tax increment financing would be less than the increase in
the market value estimated to result from the proposed
development after subtracting the present value of the projected
tax increments for the maximum duration of the district
permitted by the plan. The requirements of this clause do not
apply if the district is a qualified housing district, as
defined in section 273.1399, subdivision 1.
(3) that the tax increment financing plan conforms to the
general plan for the development or redevelopment of the
municipality as a whole.
(4) that the tax increment financing plan will afford
maximum opportunity, consistent with the sound needs of the
municipality as a whole, for the development or redevelopment of
the project by private enterprise.
(5) that the municipality elects the method of tax
increment computation set forth in section 469.177, subdivision
3, clause (b), if applicable.
When the municipality and the authority are not the same,
the municipality shall approve or disapprove the tax increment
financing plan within 60 days of submission by the authority, or
the plan shall be deemed approved. When the municipality and
the authority are not the same, the municipality may not amend
or modify a tax increment financing plan except as proposed by
the authority pursuant to subdivision 4. Once approved, the
determination of the authority to undertake the project through
the use of tax increment financing and the resolution of the
governing body shall be conclusive of the findings therein and
of the public need for the financing.
Subd. 4. Modification of plan. (a) A tax increment
financing plan may be modified by an authority, provided that
any reduction or enlargement of geographic area of the project
or tax increment financing district, increase in amount of
bonded indebtedness to be incurred, including a determination to
capitalize interest on the debt if that determination was not a
part of the original plan, or to increase or decrease the amount
of interest on the debt to be capitalized, increase in the
portion of the captured net tax capacity to be retained by the
authority, increase in total estimated tax increment
expenditures or designation of additional property to be
acquired by the authority shall be approved upon the notice and
after the discussion, public hearing, and findings required for
approval of the original plan; provided that if an authority
changes the type of district from housing, redevelopment, or
economic development to another type of district, this change
shall not be considered a modification but shall require the
authority to follow the procedure set forth in sections 469.174
to 469.179 for adoption of a new plan, including certification
of the net tax capacity of the district by the county auditor.
If a redevelopment district or a renewal and renovation district
is enlarged, the reasons and supporting facts for the
determination that the addition to the district meets the
criteria of section 469.174, subdivision 10, paragraph (a),
clauses (1) and (2), or subdivision 10a, must be documented.
The requirements of this paragraph do not apply if (1) the only
modification is elimination of parcels from the project or
district and (2)(A) the current net tax capacity of the parcels
eliminated from the district equals or exceeds the net tax
capacity of those parcels in the district's original net tax
capacity or (B) the authority agrees that, notwithstanding
section 469.177, subdivision 1, the original net tax capacity
will be reduced by no more than the current net tax capacity of
the parcels eliminated from the district. The authority must
notify the county auditor of any modification that reduces or
enlarges the geographic area of a district or a project area.
(b) The geographic area of a tax increment financing
district may be reduced, but shall not be enlarged after five
years following the date of certification of the original net
tax capacity by the county auditor or after August 1, 1984, for
tax increment financing districts authorized prior to August 1,
1979.
Subd. 5. Annual disclosure. (a) For all tax
increment financing districts, whether created prior or
subsequent to August 1, 1979, on or before July 1 of each year,
the authority shall submit to the county board, the county
auditor, the school board, state auditor and, if the authority
is other than the municipality, the governing body of the
municipality, a report of the status of the district. The
report shall include the following information: the amount and
the source of revenue in the account, the amount and purpose of
expenditures from the account, the amount of any pledge of
revenues, including principal and interest on any outstanding
bonded indebtedness, the original net tax capacity of the
district and any subdistrict, the captured net tax capacity
retained by the authority, the captured net tax capacity shared
with other taxing districts, the tax increment received, and any
additional information necessary to demonstrate compliance with
any applicable tax increment financing plan.
(b) An annual statement showing the tax increment received
and expended in that year, the original net tax capacity,
captured net tax capacity, amount of outstanding bonded
indebtedness, the amount of the district's and any subdistrict's
increments paid to other governmental bodies, the amount paid
for administrative costs, the sum of increments paid, directly
or indirectly, for activities and improvements located outside
of the district, and any additional information the authority
deems necessary shall be published in a newspaper of general
circulation in the municipality. If the fiscal disparities
contribution under chapter 276A or 473F for the district is
computed under section 469.177, subdivision 3, paragraph (a),
the annual statement must disclose that fact and indicate the
amount of increased property tax imposed on other properties in
the municipality as a result of the fiscal disparities
contribution. The commissioner of revenue shall prescribe the
form of this statement and the method for calculating the
increased property taxes. The authority must publish the annual
statement for a year no later than July 1 of the next year. The
authority must provide a copy of the annual statement to the
state auditor by the time it submits it for publication.
Subd. 6. Financial reporting. (a) The state auditor
shall develop a uniform system of accounting and financial
reporting for tax increment financing districts. The system of
accounting and financial reporting shall, as nearly as possible:
(1) provide for full disclosure of the sources and uses of
public funds in the district;
(2) permit comparison and reconciliation with the affected
local government's accounts and financial reports;
(3) permit auditing of the funds expended on behalf of a
district, including a single district that is part of a
multidistrict project or that is funded in part or whole through
the use of a development account funded with tax increments from
other districts or with other public money;
(4) be consistent with generally accepted accounting
principles.
(b) The authority must annually submit to the state
auditor, on or before July 1, a financial report in compliance
with paragraph (a). Copies of the report must also be provided
to the county and school district boards and to the governing
body of the municipality, if the authority is not the
municipality. To the extent necessary to permit compliance with
the requirement of financial reporting, the county and any other
appropriate local government unit or private entity must provide
the necessary records or information to the authority or the
state auditor as provided by the system of accounting and
financial reporting developed pursuant to paragraph (a).
(c) The annual financial report must also include the
following items:
(1) the original net tax capacity of the district and any
subdistrict;
(2) the captured net tax capacity of the district,
including the amount of any captured net tax capacity shared
with other taxing districts;
(3) for the reporting period and for the duration of the
district, the amount budgeted under the tax increment financing
plan, and the actual amount expended for, at least, the
following categories:
(i) acquisition of land and buildings through condemnation
or purchase;
(ii) site improvements or preparation costs;
(iii) installation of public utilities, parking facilities,
streets, roads, sidewalks, or other similar public improvements;
(iv) administrative costs, including the allocated cost of
the authority;
(v) public park facilities, facilities for social,
recreational, or conference purposes, or other similar public
improvements;
(4) for properties sold to developers, the total cost of
the property to the authority and the price paid by the
developer; and
(5) the amount of increments rebated or paid to developers
or property owners for privately financed improvements or other
qualifying costs.
(d) The reporting requirements imposed by this subdivision
apply to districts certified before, on, and after August 1,
1979.
Subd. 6a. Reporting requirements. (a) The
municipality must annually report to the state auditor the
following amounts for the entire municipality:
(1) the total principal amount of nondefeased tax increment
financing bonds that are outstanding at the end of the previous
calendar year; and
(2) the total annual amount of principal and interest
payments that are due for the current calendar year on (i)
general obligation tax increment financing bonds, and (ii) other
tax increment financing bonds.
(b) The municipality must annually report to the state
auditor the following amounts for each tax increment financing
district located in the municipality:
(1) the type of district, whether economic development,
redevelopment, housing, soils condition, mined underground
space, or hazardous substance site;
(2) the date on which the district is required to be
decertified;
(3) the amount of any payments and the value of in-kind
benefits, such as physical improvements and the use of building
space, that are financed with revenues derived from increments
and are provided to another governmental unit (other than the
municipality) during the preceding calendar year;
(4) the tax increment revenues for taxes payable in the
current calendar year;
(5) whether the tax increment financing plan or other
governing document permits increment revenues to be expended (i)
to pay bonds, the proceeds of which were or may be expended on
activities located outside of the district, (ii) for deposit
into a common fund from which money may be expended on
activities located outside of the district, or (iii) to
otherwise finance activities located outside of the tax
increment financing district; and
(6) any additional information that the state auditor may
require.
(c) The report required by this subdivision must be filed
with the state auditor on or before July 1 of each year.
(d) The state auditor may provide for combining the reports
required by this subdivision and subdivisions 5 and 6 so that
only one report is made for each year to the auditor.
(e) This section applies to districts certified before, on,
and after August 1, 1979.
Subd. 7. Creation of hazardous substance subdistrict;
response actions. (a) An authority which is creating or has
created a tax increment financing district may establish within
the district a hazardous substance subdistrict upon the notice
and after the discussion, public hearing, and findings required
for approval of or modification to the original plan. The
geographic area of the subdistrict is made up of any parcels in
the district designated for inclusion by the municipality or
authority that are designated hazardous substance sites, and any
additional parcels in the district designated for inclusion that
are contiguous to the hazardous substance sites, including
parcels that are contiguous to the site except for the
interposition of a right-of-way. Before or at the time of
approval of the tax increment financing plan or plan
modification providing for the creation of the hazardous
substance subdistrict, the authority must make the findings
under paragraphs (b) to (d), and set forth in writing the
reasons and supporting facts for each.
(b) Development or redevelopment of the site, in the
opinion of the authority, would not reasonably be expected to
occur solely through private investment and tax increment
otherwise available, and therefore the hazardous substance
district is deemed necessary.
(c) Other parcels that are not designated hazardous
substance sites are expected to be developed together with a
designated hazardous substance site.
(d) The subdistrict is not larger than, and the period of
time during which increments are elected to be received is not
longer than, that which is necessary in the opinion of the
authority to provide for the additional costs due to the
designated hazardous substance site.
(e) Upon request by an authority that has incurred expenses
for removal or remedial actions to implement a development
response action plan, the attorney general may:
(1) bring a civil action on behalf of the authority to
recover the expenses, including administrative costs and
litigation expenses, under section 115B.04 or other law; or
(2) assist the authority in bringing an action as described
in clause (1), by providing legal and technical advice,
intervening in the action, or other appropriate assistance.
The decision to participate in any action to recover expenses is
at the discretion of the attorney general.
(f) If the attorney general brings an action as provided in
paragraph (e), clause (1), the authority shall certify its
reasonable and necessary expenses incurred to implement the
development response action plan and shall cooperate with the
attorney general as required to effectively pursue the action.
The certification by the authority is prima facie evidence that
the expenses are reasonable and necessary. The attorney general
may deduct litigation expenses incurred by the attorney general
from any amounts recovered in an action brought under paragraph
(e), clause (1). The authority shall reimburse the attorney
general for litigation expenses not recovered in an action under
paragraph (e), clause (1), but only from the additional tax
increment required to be used as described in section 469.176,
subdivision 4e. The authority must reimburse the attorney
general for litigation expenses incurred to assist in bringing
an action under paragraph (e), clause (2), but only from amounts
recovered by the authority in an action or, if the amounts are
insufficient, from the additional tax increment required to be
used as described in section 469.176, subdivision 4e. All money
recovered or paid to the attorney general for litigation
expenses under this paragraph shall be paid to the general fund
of the state for deposit to the account of the attorney
general. For the purposes of this section, "litigation
expenses" means attorney fees and costs of discovery and other
preparation for litigation.
(g) The authority shall reimburse the pollution control
agency for its administrative expenses incurred to review and
approve a development action response plan. The authority must
reimburse the pollution control agency for expenses incurred for
any services rendered to the attorney general to support the
attorney general in actions brought or assistance provided under
paragraph (e), but only from amounts recovered by the authority
in an action brought under paragraph (e) or from the additional
tax increment required to be used as described in section
469.176, subdivision 4e. All money paid to the pollution
control agency under this paragraph shall be deposited in the
environmental response, compensation and compliance fund.
(h) Actions taken by an authority consistent with a
development response action plan are deemed to be authorized
response actions for the purpose of section 115B.17, subdivision
12. An authority that takes actions consistent with a
development response action plan qualifies for the defenses
available under sections 115B.04, subdivision 11, and 115B.05,
subdivision 9.
(i) All money recovered by an authority in an action
brought under paragraph (e) in excess of the amounts paid to the
attorney general and the pollution control agency must be
treated as excess increments and be distributed as provided in
section 469.176, subdivision 2, clause (4), to the extent the
removal and remedial actions were initially financed with
increment revenues.
Subd. 7a. Repealed, 1995 c 264 art 5 s 48
Subd. 8. Payment of debt service on credit enhanced
bonds. A tax increment financing plan may provide for the use
of the tax increment to pay, or secure payment of, debt service
on credit enhanced bonds issued to finance any project located
within the boundaries of the municipality, whether or not the
tax increment financing district from which the increment is
derived is located within the boundaries of the project.
HIST: 1987 c 291 s 176; 1987 c 312 art 1 s 26 subd 2; 1988 c
719 art 5 s 84; art 12 s 9-14; 1989 c 277 art 2 s 63; 1989 c 329
art 13 s 20; 1989 c 335 art 1 s 246,247; 1Sp1989 c 1 art 14 s
6-8; 1990 c 604 art 7 s 10-14; 1993 c 375 art 3 s 43; art 14 s
7-9; 1995 c 264 art 5 s 17-21; 1996 c 471 art 7 s 11-13; art 11
s 14
* NOTE: The amendment to subdivision 5 by Laws 1996, chapter
*471, article 11, section 14, is effective July 1, 1997, for
*taxes levied in 1997, payable in 1998 and subsequent years,
*except as provided in section 276A.03. Laws 1996, chapter 471,
*article 11, section 20. 469.176 Limitations.
Subdivision 1. Duration of tax increment financing
districts. (a) Subject to the limitations contained in
subdivisions 1a to 1f, any tax increment financing district as
to which bonds are outstanding, payment for which the tax
increment and other revenues have been pledged, shall remain in
existence at least as long as the bonds continue to be
outstanding. The municipality may, at the time of approval of
the initial tax increment financing plan, provide for a shorter
maximum duration limit than specified in subdivisions 1a to 1f.
The specified limit applies in place of the otherwise applicable
limit.
(b) The tax increment pledged to the payment of the bonds
and interest thereon may be discharged and the tax increment
financing district may be terminated if sufficient funds have
been irrevocably deposited in the debt service fund or other
escrow account held in trust for all outstanding bonds to
provide for the payment of the bonds at maturity or date of
redemption and interest thereon to the maturity or redemption
date.