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r.~rch 20, <br />TO: <br /> <br />FROM: <br /> <br />SUBJECT: <br /> <br />1981 <br /> <br /> Mayors, Managers, Clerks, Legislative Contacts, <br /> Persons Interested in Industrial Revenue Bonds <br /> <br /> Peggy Flicker, Legislative Counsel <br /> <br /> CITIES' ABILITY TO USE INDUSTRIAL REVENUE BONDS THREATENED <br /> <br />A House Subcommittee is considering amendments to the state Industrial Revenue Bond <br />law which could effectively prevent cities from being able to decide for themselves <br />the appropriate uses for Industrial Revenue Bonds and would drastically limit the <br />types of projects which could be financed with IR Bonds. The amen'dments would: <br /> <br /> require cities to prepare detailed and specific economic <br /> development plans, which would have to be~by the <br /> state Department of Finance before any bond projects could' <br /> be authorized. <br /> <br /> COMMENTS This could allow the state to interfere in or control local. <br /> development decisions, and unreasonably withhold approval. <br /> In addition, preparation of the plans would cost cities <br /> : ..~ money, and duplicate current local planning activities.~ <br /> <br />COMMENTS <br />OR <br /> <br />Commercial bond projects would be limited to s~rictly defined <br />blighted area- either an area that has formally qualified as a <br />particular type of tax increment redevelopment district, or an <br />area that could qualify as such a district, as long as that area <br />was at least 2 acres or more in size.- ~ <br /> <br />· This.could makeit much more difficult for cities to use industrial <br /> revenue bonds in various downtown or other redevelopment efforts.. <br /> <br />If an area could not qualify as a blighted area, then several conditions <br />would have to be met. Unacceptable conditions are: l) the contracting <br />party and any principle user of the facility would have to enten a <br />binding legal agreement to pay employees average prevailing wages for <br />five years after the facility begins operations. 2) any commercial <br />project would be prohibited if a "substantially similiar business" <br />exists anywhere within a five-mile radius of the proposed project. <br /> <br />~)00 hanover building, 480 eedar street. <br /> <br /> (OVER) ...... <br />saint paul. minnesota 551'01 <br /> <br /> <br />