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j) <br />Encourage compact development and <br />consider reauthorization of compact <br />development TIF districts with <br />modifications to increase their <br />effectiveness; <br />k) Discourage any statutory mechanisms <br />that directly or indirectly decrease the <br />impact of city redevelopment and <br />economic development projects; <br />I) Simplify the substandard building test <br />to resolve ambiguities and reduce the <br />continued threats of litigation; <br />m) Create an exception to the interfund <br />loan resolution requirement in Minn. <br />Stat. 469.178, subd. 7, to authorize the <br />development authority to delegate to a <br />staff person the ability to set the terms <br />and conditions of an interfund loan. <br />n) Amend the definition of <br />redevelopment district under the TIF <br />Act to include the obsolescence and <br />incompatible land uses included in a <br />renewal and renovation district, <br />thereby providing cities with more <br />flexible tools to address land recycling <br />and redevelopment. <br />LE-27. Property Tax Abatement <br />Authority <br />Issue: In an effort to increase the number of <br />development tools available, the 1997 <br />Legislature authorized local units of <br />government to grant property tax <br />abatements. Although tax increment <br />financing (TIF) continues to be the primary <br />financing mechanism for local development <br />projects, tax abatements provide cities with <br />an important, additional economic <br />development tool. Recognizing the need for <br />municipal development tools, the 2008 <br />Legislature expanded the abatement <br />authority by converting the limit on <br />abatements from ten percent of the current <br />tax levy to ten percent of net tax capacity. <br />In order to provide maximum benefits and <br />recognize local decision -making, tax <br />abatements should have less restrictive <br />funding caps, financing terms, and <br />authorized uses. <br />The tax abatement law requires that a <br />political subdivision may only approve an <br />abatement after holding a public meeting <br />with a minimum of 10 days published public <br />notice. When more than one political <br />subdivision abates property taxes for a <br />development project, there must be separate <br />notices and hearings for each subdivision. <br />This requirement can be particularly <br />burdensome for programs designed to <br />develop multiple properties over an <br />extended period of time. If one political <br />subdivision could be designated as the lead <br />entity for purposes of the notice and hearing <br />requirements, such projects could be made <br />more efficient without sacrificing public <br />transparency. <br />Property tax abatements should not be <br />considered a replacement for TIF. <br />Response: In light of current economic <br />conditions existing property tax <br />abatement authority should be <br />strengthened. The Legislature should: <br />a) Expand the abatement authority to <br />allow abatement revenues to be used <br />for economic development activities <br />such as workforce readiness and <br />assistance programs, and technology <br />infrastructure improvements; <br />b) Develop a state fund to facilitate state <br />participation in abatement projects; <br />c) Increase funding caps and duration <br />limits; and <br />d) Amend Minn. Stat. § 469.1813, subd. <br />5, to create a streamlined notice and <br />hearing requirement for multi - <br />jurisdictional tax abatement projects. <br />League of Minnesota Cities <br />2018 City Policies Page 69 <br />