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ECONOMIC DEVELOPMENT UPDATE DTED EDAM Minnesota Department of Trade Economic Development . and Economic Development Association of Minnesota Contact:Gans Goddard 612-297-116$ April$, 1994 Contact:Jobe Moon 612-ssa-6315 1-800- 54-3858 Vol. 1,No, 7 This Week in Review: 25 year duration limit option for development distriots created after Minimum Wagelpereasp: S.F. 1944 redevelopment and housing districts; 6/30/94 to 25 years; Eliminates the (Kelly) was amended to increase the Requires county approval of new TIF authorization for TIT economic minimum wage 50 cents a year, for districts to capture the county's tax rate and development districts to be used for three years,raising the current rate from requires county approval of significant commercial or retail in cities under $4.25 to $5.75 for employers with amendments to existing TIF districts; 5,000 in population; Extends the $500,000 or more in annual sales. The Reduces the income limits for new housing duration of TIF financed interest rate bill is currently in the Senate Finance districts to 80% of median income; Imposes reduction programs to 15 years. Committee, H.F. (Rukavina) would volume limits(an average of 25%of a cities increase the minimum wage 75 cents a per capita tax capacity) on the formation of Gas Tax: The full Senate passed (S.F. year, for three years up to $6.50 for new TIF districts; Repeals the authority to 2097)a gas tax proposal to increase the larger employers. This bill is on the use economic development districts for tax 4.4 cents a gallon and index the tax House Floor. Both bills would make commercial development under 5,000 sqr. to the Consumer Price Index. All Minnesota the highest minimum wage ft. in size for cities with populations under proceeds would go to the MVET fund. state in the nation. 5,000. These provisions would become * The House passed H.F. 324 (Garcia) effective July 1, 1994. which would extend the 6.5 cent sales nation:The Senate Metro Local tax and dedicate the majority of the Government Committee heard S.F. 365 'Rural Job Credit: Establishes a rural job fund to transit projects. The bill passed on changes in cities ability to annex credit for employers located outside of 7 12-11 (with no votes coming from rural property. Tinder a compromise county metro area. Employers must create legislators) and sent it to the House 4IIlI° ECONO agreement between Sen.Hottinger, Sen. 10 qualifying jobs paying 170 percent or Taxes Committee. Minnesota currently Viokerman,the League of Cities and the more of minimum wage. The maximum has a 20 cent pet gallon tax,in addition Association of Townships, the bill was $5,000 per employee tax credit is aimed at to the 18.4 cent Federal tax. amended to require public hearings on manufacturing jobs. a 30 day notice, townships would Woes Compenaation: S.F. 2475 received all the tax receipts of the year "Other TIF bills: These bills received (Novak)was referred to Senate Finance. the property is annexed, 2/3 in the hearings on 4/5 but were not included in the Expect a hearing next week. The Dept. following year, and 1/3 in the second Houses Omnibus Tax Bill, of Labor & Industry has prepared an year, It also requires annexed lands be *H.F.2474(Jefferson)Extends the duration analysis that indicates a 0.6%reduction included in land use plans, limits the of TIF district funds used for interest in WC rates under this bill. length of time municipalities have to reduction programs from 12 to 15 years. carry out the annexation, All parties * H.F. 3070 (Bauerly) Authorizes the $&e]gcement Equipment Sales Tu agreed to work throughout the year to establishment of a new type of TIF district Reform: The current Senate proposal develop future legislation. The bill has called Manufacturing Districts.been set to the Senate Floor. is following a phased in approach over * H.F. 3180(Hausman) Allows cities to use the next 5 years, while the House TIE funds to serve as a 100% of the local version is focusing on Federal 1994 Omnibne Tax Bill:The House Tax match for contamination site cleanup, conformity and will begin this July 1, Committee on Friday morning passed to the floor, the 1994 Omnibus Tax Bill. Senate Omnibus Tax bill: The following 1 JJ4: The legislation includes the following provisions have been included on TIF: Senate: bill language: * Tax Increment Eliminates the current requirement that and General Information-612-296.0504 Financing (TIF) H.F. 3195 (Rest) by amount equal to 18% of cleanup cost come Senate Index-296-2887 far the most restrictive of the TIF bills from sources other than TIF for House of Representatives: introduced was included and would do contamination cleanup; Eliminates General Information-612-296-2146 the following: Modifies the "but for" LGA/HACA penalty for soils conditions TIF House Index-296-6646 test to require a finding that the TIF districts created to remediato contaminated assisted development will exceed the sites; Allows soils conditions districts to be /o make a change of addnea,phone or fax value of the development that would created to remedial* petroleum pollution; mmrbeg please contact Gana Goddard.DTED occur without using TIT;Eliminates the Extends the duration of economic Project Coordinator et 612-297-1168 or 1400-657.3858.twitted by uuD.