Agenda - Economic Development Authority - 07/09/2015

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RELEVANT LINKS: Minn. Stat. § 469.175, subd. 5. Minn. Stat. § 469.1771, subds. 1, 2b. Minn. Stat. § 469.177, subd. 8. Lake Superior Paper Indus. v. State, 624 N.W.2d 254 (Minn. 2001). Brookfield Trade Center, Inc. v. County of Ramsey, 609 N.W.2d 868 (Minn. 1998). See Minn. Stat. §§ 469.177, subds. lb, 11. Minn. Stat. § 469.1771, subd. 1. Minn. Stat. § 469.1793. Minn. Stat. § 469.1814. Minn. Stat. § 469.174. Minn. Stat. § 469.175. The city using TIF must report annually to the county board, the county auditor, the school board, and the state auditor as to the status of the TIF district or districts and publish the report. The state auditor has established a uniform system of accounting and financial reporting for TIF districts. The city must annually submit to the state auditor a financial report in compliance with these standards. The state auditor may audit TIF districts. If the state auditor notifies a TIF authority of an alleged violation, a copy of the notice is also forwarded to the county attorney. If no corrective action is brought within one year, the county attorney must notify the state auditor, who then notifies the attorney general. If the attorney general finds a substantial violation, the attorney general will petition the state tax court to suspend the authority's power to use TIF for a period of up to five years. The TIF agreement with the developer is a complex document. Assistance from a financial advisor and the city attorney is necessary in order to anticipate the many potential problems. An agreement can establish a minimum market value for tax increment assessment purposes, as well as provide that the developer pay a certain level of taxes regardless of any classification rate changes or levy decreases. The agreement should be entered into before the assembly and acquisition of the land on which the completed improvements are to be located. The 2001 tax reform legislation, which reduced class rates and provided for the state takeover of the general education levy, resulted in several changes to various statutes to accommodate the changes. These changes considerably reduce the continued viability of TIF in the future. The law imposes a 180 -day statute of limitations on actions to challenge the creation or modification of a TIF district. The law is complex including a "but -for" finding before a city approves a TIF plan and the creation of a TIF district. Cities must follow statutory requirements including but not limited to administrative expenses, plan modifications, reporting requirements, use of increment in pre -1979 districts, excess increments, pooling, decertification, and use of funds outside the district. Before a district can be created, the law requires a detailed estimate of the impact of a proposed district on city -provided services, such as police and fire protection, public infrastructure, and borrowing costs attributable to the district, in addition to other complex estimations that must be prepared. League of Minnesota Cities Handbook for Minnesota Cities 11/4/2014 Community Development and Redevelopment Chapter 151 Page 18