Agenda Packets - 1997/04/28 - Laserfiche WebLink

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• • 'bus Tax Bili Apxi12A, 199'I f‘d2RlIATI Page 51 ection ONLY Priority for use revenue surpluses. Sets priorities for using forecast revenue . surpluses in November of odd-numbered years. These amounts will be used first to ensure$522 million is in the budget reserve account. The rest will be divided: One-half will be used to reduce the school property tax levy recognition percent to the 2 percent level. (The levy recognition percent is currently at 7 percent.) The other half will be used to put in the property tax reform account established in section 2. 2 Property tax reform account. Establishes a property tax reform account and appropriates$487 million to it on July 1, 1997. This account is used to pay for property tax reform in fiscal years 1998-2001. Investment earnings are credited to the account. 3 Budget reserve appropriation. Sets the budget reserve at$522 million on July 1, 1997. Article 13: Tax Increment Financing Overview . This article makes a number of changes in the tax increment financing (TIF) law. The changes generally tend to limit the ability of development authorities and municipalities to,collect and spend increments. The major changes include: 8. The but-for test is applied to new authorizations and approvals of additional spending of$50,000 or more in existing TIP districts- ► Increments that remain unspent when a TIF district is decertified must be returned to the city/town,county,and school district. • The ability to use increments to construct governmentally owned facilities is restricted to instances when it is part of and necessary to induce a private, taxable development. ▪ The bill allows small cities (populations of 5,000 or less more than 10 miles from a city with a population of 10,000 or more) to use economic development districts for small commercial developments (15,000 square feet or less). The bill limits the fiscal disparities law option that shifts the cost of the contribution to taxpayers in the city,county, and school district to redevelopment districts only. 8. In addition, the bill adopts an explicit definition of tax increments, clarifies the spending restrictions applicable to redevelopment districts,and makes a number of other more minor and clarifying changes. • Research Department Minnesota House of Representatives 600 State Office Striding 2'd S3I l I3 NW JO 31151d31WdOZ:Z0 L6 T2 add