May 24, 2011 in TIF
The governor has already vetoed HF42, the major Omnibus Tax Bill passed by the Legislature. However, on May 23, 2011, the House and Senate approved a technical corrections bill, HF 1219. The summary of the bill gives an overview. Article 4 contains the TIF changes which include:
1. Extensions of some of the JOBS bill provisions for TIF passed in 2010 (more below)
2.Special bills for Sauk Rapids, Lino Lakes, Chohasset, and Ramsey.
3.Special pooling through 2016 for foreclosed, affordable homes.
The special provisions form 2010 that allowed a broader use of nine year economic development districts is found in Article 4, Sec. 16. Minnesota Statutes 2010, section 469.176, subdivision 4c, is amended to read:
“(1)the municipality finds that the project will create or retain jobs in this state, including construction jobs, and that construction of the project would not have commenced before July 1, 2011 2012, without the authority providing assistance under the provisions of this paragraph; (2) construction of the project begins no later than July 1, 2011 2012; and (3) the request for certification of the district is made no later than June 30, 2011 2012; and (4) for development of housing under this paragraph, the construction must begin before January 1, 2012. The provisions of this paragraph may not be used to assist housing that is developed to qualify under section 469.1761, subdivision 2 or 3, or similar requirements of other law, if construction of the project begins later than July 1, 2011.”
This means a one year extension for commercial/industrial/utility projects and a six month market rate housing extension. Affordable housing is not allowed in the economic development district.
The general pooling from existing cash balances of older districts was extended as well in Sec. 17. Minnesota Statutes 2010, section 469.176, subdivision 4m, amended to read:
Subd. 4m. Temporary authority to stimulate construction. (a) Notwithstanding the restrictions in any other subdivision of this section or any other law to the contrary, except the requirement to pay bonds to which the increments are pledged and the provisions of subdivisions 4g and 4h, the authority may spend tax increments for one or more of the following purposes:
(1) to provide improvements, loans, interest rate subsidies, or assistance in any form to private development consisting of the construction or substantial rehabilitation of buildings and ancillary facilities, if doing so will create or retain jobs in this state, including construction jobs, and that the construction commences before July 1, 2011 2012, and would not have commenced before that date without the assistance; or (2) to make an equity or similar investment in a corporation, partnership, or limited liability company that the authority determines is necessary to make construction of a development that meets the requirements of clause (1) financially feasible.(b) The authority may undertake actions under the authority of this subdivision only after approval by the municipality of a written spending plan that specifically authorizes the authority to take the actions. The municipality shall approve the spending plan only after a public hearing 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. (c) The authority to spend tax increments under this subdivision expires December 31, 2011 2012. (d) For a development consisting of housing, the authority to spend tax increments under this subdivision expires December 31, 2011, and construction must commence before July 1, 2011, except the authority to spend tax increments on market rate housing developments under this subdivision expires July 31, 2012, and construction must commence before January 1, 2012.
Again we have a one year extension for non-housing and a six month extension for market rate housing.
No word on the Governor’s willingness to sign this bill.