Agenda - Council - 04/28/1981 - Laserfiche WebLink

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A �' Y M -2- If the League amendments don't go on to S.F. 635, TIF will be a much less workable tool and fewer cities will be able to take advantage of it. As discussed below, more and more smaller cities are beginning to use TIF. Certain parts of S.F. 635 as amended would be especially harmful to smaller cities and projects. Those parts are pointed out in the section - by - section - summary. WHO IS USING TIF? It is worth noting that since 1968, 105 cities in Minnesota have initiated or planned 193 TIF projects. Over two - thirds of the cities using TIF are located outside the metropolitan area. Of the 193 projects in the state, 99 are located in cities under 10,000 population. More and more cities under 10,000 population are taking advantage of TIF. In 1978 15 of these small cities started their first TIF project, and 10 more followed in 1979. In 1980, 15 more of these small cities have started or are planning their first project. A total of 53 projects were begun in small cities in the last three years. Even if your city is not now using TIF, this option for community development must be preserved! * SUMMARY OF S.F. 635 PROBLEM AREAS 1. S.F. 635 WOULD CAUSE ECONOMIC DEVELOPMENT TIF DISTRI Summary M.S. 273.73, subd. 4, defines captured assessed value (CAV) under the tax increment law. Under section 1 of S.F. 635, the CAV of parcels in economic development districts would be included in adjusted assessed value of each school district for purposes of computing school aids. The state would end up paying less school aids and the school district would still receive the same amount for pupils, but the local tax payer would pay a higher school mill rate. League Amendment • Strike Section 1. Explanation of Amendment This part of S.F. 635 would build into every economic development proposal - a high level of local opposition to TIF. Since a higher school levy would be the direct result of any economic development project, city officials would be understandably much more reluctant to approve such a project. Since school district boundaries are hot conterminous with city boundaries, there would be increased pressure from county or township officials to oppose the use of TIF for economic development. By removing Section 1 of S.F. 635, the League amendment would prevent this indirect attempt to restrict the use of TIF for economic development. NOTE: Senator Hanson has indicated he feels strongly about including this particular provision in the bill. 2. DATE FOR DETERMINATION OF "ORIGINAL ASSESSED VALUE" MODIFIED - THE INTENT IS rarocncG TWr RaCF vniiiF (IF M STRICT AND DECREASE THE TAX INCREMENT. Summary M.S. 273.73, subd. 7, now defines "original assessed value" as the value of taxable property in a TIF district as most recently certified by the Commissioner of Revenue. Section 2 of S.F. 635 would change that date to January 2 of the year in which the request for certification of a TIF district occurs.