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H.F. 2420 May 17. 1999 <br /> Version: Conference Committee Report Page 38 <br /> Section <br /> Article 10: Tax Increment Financing <br /> • <br /> Overview <br /> • <br /> This article makes a number of changes in the tax increment financing law: <br /> • Reduces the required local contribution for housing districts from 10 percent to 5 <br /> percent; <br /> • Prohibits the use of increments for social and recreational facilities; <br /> • Pooling is permitted to make up deficits that resulted from property tax rate <br /> compression enacted in 1997, 1998, and 1999. In addition, $4 million is appropriated <br /> to the TIP grant program for deficits. <br /> • Provides a new enforcement mechanism that will authorize the attorney general to <br /> petition the tax court to suspend the TIF authority of a municipality or development <br /> authority for violations referred by the state auditor. <br /> • Pooling by pre-1982 districts is ratified, if it was done before receiving a non- <br /> compliance notice from the State Auditor or the end of 1999. These districts are <br /> allowed to pay off pre-existing bonds and contractual obligations. <br /> The article provides special law authority for several cities: <br /> • Onamia <br /> • St. Cloud <br /> • Dawson <br /> ► Brooklyn Center <br /> • St. Paul <br /> ► Jackson <br /> ► Minneota <br /> ► Fridley <br /> 1 Local contributions, housing districts. Reduces the required local contribution for <br /> housing districts from 10 percent to 5 percent. If the municipality elects to make a local <br /> contribution out of its unrestricted moneys (such as its general fund), the district is exempt <br /> from the state aid offset. The contribution is a percentage of the district's increments. <br /> Under present law, housing, renewal and renovation, and economic development districts <br /> are subject to a 10 percent contribution rate. Redevelopment, soils districts, and hazardous <br /> substance subdistricts contribute at the 5 percent rate. Qualified housing districts (those that <br /> provide low income rental housing) are exempt. Effective for districts for which the request <br /> for certification is made after June 30, 1999. <br /> Article 10: Tax Increment Financing <br />