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A DS-3. Community Development Principles (B) (cont'd) <br />Community and economic development .legislation should respond to the <br />following concerns: <br />1. Protection of cities' ability to finance capital improvements; <br />2. Management of economic growth to maximize cities' existing capital <br />investment; <br />3. Revitalization of cities reversing the trend of dispersion of <br />population and economic activity; <br />4. Recognition and allowance for the great differences between cities, <br />regarding their stages of growth and development, demographics, and <br />types of economic activity within and adjacent to their borders; and <br />5. The legislature should enable the Small Business Finance Agency to <br />package projects which are approved by local city councils into larger <br />industrial revenue bonds. <br />DS-4. Development Financing (B) <br />The League supports the continued use of industrial development bonds <br />and other tax-exempt instruments as development tools. <br />The following principles should apply to the allocation of tax-exempt <br />development authority: <br />1. A maxii,m of Minnesota tax-exempt development allocation authority <br />being retained by municipalities; <br />2. The maintenance of local discretion and flexibility in development <br />decisions; and <br />3. The minimization of state control of local development decisions. <br />Tax-exempt financing allows cities to undertake a diverse range of <br />activities to prevent economic deterioration, to attract new <br />businesses and jobs, to retain existing businesses and jobs, and to <br />maintain and strengthen the local tax base. <br />Pending federal tax legislation would substantially change the <br />applicability of tax-exempt development financing. Should the state <br />become involved in designing a new system appropriating tax-exempt <br />bond authority to cities, the League recommends that the above three <br />principles apply, in general, and that the League be centrally <br />involved with the governor and the Legislature in fashioning an <br />equitable system. <br />- 5 - <br />