05-09-1990 Council Agenda - Laserfiche WebLink

Home Browse Search

marketing. In Greater Minnesota, they may include tourism projects. No more than 10 percent of the square feet of assisted buildings may be for non- quali- fying purposes. If the non - qualifying square footage is directly related to and in support of the qualifying activity, up to 25 percent of the project may be for non - qualifying purposes. The municipality must find that the project will expand or preserve employment or tax base in the state, rather than just the municipality. As an alternative, the municipality may find that the project will prevent a business from leaving the municipality. Cities cannot use TIF to encourage a business to move from one Minnesota city to another. Cities with fewer than 5,000 residents can use TIF to subsidize development of retail or commercial space with less than 5,000 square feet. This exemption is cumulative and applies to all facilities in all the districts in the city. Penalties If the city uses TIF to install improve- ments (such as road improvements) expecting that the area will be devel- oped for qualifying uses, but non- quali- fying uses actually exceed the permitted threshold, the owners of the non- quali- fying properties must pay the authority 90 percent of the benefit (measured under the special assessment law) derived from the improvements. The amount of the repayment cannot exceed the amount of increment spent on the improvement. The payments will be used to pre-pay or defease bonds. The commissioner of revenue will en- force the TIF law. In addition, the law authorizes taxpayer suits. The prevail- ing party receives costs and attorneys fees. The state auditor is responsible for auditing local governments' use of TIF. If an audit discovers a misuse of TIF the auditor is to send the relevant informa- tion to the commissioner of revenue. County expenses Counties may charge for their adminis- trative expenses incurred in all TIF dis- tricts, including pre -1979 districts. The bill limits county charges to expenses they incur after May 1, 1990. Excess increments A city or county receiving distributions of excess tax increments must deduct the amount from the levy limits of that government unit for the following year. These distributions are not new money. The law does not consider any distribu- tions as permanent reductions in the levy /aid base of the government receiv- ing them. AL Page 56