CCP 11-24-1997 - Laserfiche WebLink

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------------ 4(n I 2 MinnesotJ Solutions .' Tax increment produced in these tax increment financing districts generally does not provide I public subsidies for structures to be built on the property. Instead, removal of obsolete and/or .. abandoned buildings, remediation of contamination, etc., will consume the tax increment generated. These tax increment financing districts generally do not "cash Row," particularly the more difficult ones, because tax increment rarely provides sufficient resources to deal with redevelopment or pollution problems Following the property tax reform of the 1997 Legislative I Session and the subsequent reduction in commercial/industrial class rates, redeveicpment will be more difficult to achieve. Public sector investment is required to direct develo~ment of these difficult sites. I Housing districts: Housing districts can be established to reduce interest rates to make housing more affordable I and to subsidize the cost of construction. The provision of affordable housing and the maintenance of the existing housing stock. particularly in older communities, is a costly endeavor tax increment financing provides a useful tool to help close the many gaps in the financing of I affordable housing. Economic deve/ooment districts: I Economic development districts generally provide developer incentives by assisting with site and infrastructure expenses. The justification for public subsidy, in this case, is to maintain existing jobs when there is danger of losing employment to another state or to provide an I additional incentive for companies to locate in Minnesota. Although the legislature has moved to make the "rules of the game" more consistent for tax .. increment financing districts certified prior to 1990 and those created after the new restrictions were put into place, it is still important to note the year during which a district was certified. Permitted uses of tax increment generated within a tax increment financing districts can vary I depending upon the date of certification and the type of tax increment financing district Tax increment financino Grants/Deoartment of Revenue: I The 1997 Legislature appropriated $2 million for grants to cities that have citywide tax increment financing deficits as a result of the class rate reductions. In order to qualify, the deficits must be due to binding contracts and obligations entered into before enactment of the bill. Applications I must be made to the Commission of Revenue Calculation of tax increment financing obligations will be made using data filed with the State Auditor. The grant will be made the year after the deficit occurs. If the available appropriation is less than the grant entitlement, the grants are I proportionately reduced. The legislature also provided an exemption from the pooling restrictions. This exemption allows cities to pool tax increment financing revenues to offset shortfalls caused by the class rate reductions. Use of this pooling authority is subject to approval by the Commissioner I of Revenue. Both provisions expire January 1, 2001. Task Force: The 1997 Legislature directed the creation of a legislative task force of six legislators from each I body to work on a recodification of the tax increment financing laws. House Members Appointed Senators Apoointed I Edgar Olson Roxann Daggett Linda Scheid William Belanger Thomas Bakk Dennis Ozment Leonard Price Edward Oliver .. Ann Rest Gail Skare Lawrence Pogemiller John Hottinger November 19. 1997 I . - ---- -