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1 private - sector interest can be generated, the 2001 property tax reform package significantly <br />diminished the ability of cities to undertake these efforts by dramatically reducing revenues <br />3 generated by TIF. Exacerbating this situation, the redevelopment account administered by the <br />4 Dept. of Trade and Economic Development and the Metropolitan Council programs supporting <br />5 land recycling continue to be under funded. <br />6 <br />7 Response: In recognition of the unique needs of land recycling projects, the state <br />8 should restore and increase funding for the redevelopment account administered by the <br />9 Dept. of Trade and Economic Development and the redevelopment programs administered <br />10 by the Metropolitan Council. Additionally, as part of a comprehensive approach to land <br />11 recycling needs, the Legislature should consider state income tax credits and other tax <br />12 incentives for local historic preservation efforts. The Legislature should also enact <br />13 authority similar to the "This Old House" law that would provide a tax deferral on <br />14 improvements to commercial buildings located in designated rehabilitation or historic <br />15 preservation districts. Finally, the Legislature should continue its support and increase <br />16 funding levels for state and regional programs to assist in contamination cleanup and <br />17 brownfields remediation efforts. <br />18 <br />19 LE -21. Property Tax Abatement Authority (ABH) <br />20 <br />21 Issue: In an effort to increase the number of development tools available, the 1997 <br />22 Legislature authorized local units of government to grant property tax abatements. Although TIF <br />continues to be the primary financing mechanism for local development projects, tax abatements <br />provide a good addition to a needed list of economic development tools. In order to provide <br />25 maximum benefits, tax abatements should be less restrictive in terms of funding caps and <br />26 financing terms. Property tax abatements should not be considered a replacement for tax <br />27 increment financing. <br />28 <br />29 Response: TIF is still the primary, viable development tool available for cities. <br />30 Abatement authority should continue to be available, but not offered as a rationale to <br />31 eliminate TIF. Additionally, the Legislature should develop a state fund to facilitate state <br />32 participation in abatement projects. Finally, the funding caps should be increased or <br />33 eliminated. <br />34 <br />35 LE -22. OSA Response Timelines (ABH) <br />36 <br />37 Issue: The Office of the State Auditor (OSA) is responsible for TIF oversight. As part of <br />38 its review of TIF districts, the OSA identifies alleged violations of the TIF laws and issue <br />39 noncompliance notices to TIF authorities. After responding to these noncompliance notices <br />40 within the required 60 -day period, authorities often do not receive timely responses on the matter <br />41 from the OSA. Government agencies typically have response tirne deadlines. Additionally, TIF <br />42 authorities are often unclear about the final disposition of the matter upon receipt of a final <br />43 noncompliance notice. <br />Response: In the event that the OSA determines to issue a final non - compliance <br />notice to a TIF authority, the Legislature should require the OSA to issue the notice within <br />17 <br />