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

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f -5- 7. REVERSE REFERENDUM REQUIREMENT FOR ECONOMIC DEVELOPMENT DISTRICTS Summary S.F. 635 adds a new requirement to the TIF law which allows for a reverse referendum in the case of economic development districts. A reverse referendum would be required if requested by a number of voters equal in number to 10% of the votes cast in the city in the last general election. League Amendment Strike sections of S.F. 635 which relate to the reverse referendum requirement. Explanation of Amendment The League opposes this reverse referendum provision for several reasons. First, the concept in general is contrary to trust in the accountability of local elected officials. It could allow for a minority of voters tostand in the way of worthwhile economic development projects. Second, the TIF law currently contains safeguards to • that public opinion forms an important part of the TIF planning process. Third, the referendum provision applies only to economic development districts, and is a fairly transparent attempt to make it more difficult to use TIF for economic development purposes. It is extremely important that this particular provision be removed from the bill if it is to be acceptable to the League. 8. CHANGES THE "KNOCK- DOWN" PROVISION FROM FIVE TO THREE YEARS Summary M.S. 273.75, subd. 6, currently contains a significant restriction called the "knock- down" provision. If no demolition, rehab, etc. have begun on a parcel within 5 years after certification of the district then no additional tax increment may be taken from the parcel and the base value is adjusted to exclude the original assessed value of a parcel. S.F. 635 would lower the limit to 3 years. League Amendment . Retainthe 5 year provision in current law. Explanation of Amendment There are two major problems with the bill. First, it does not recognize the importance of timing in the implementation of a TIF project. It may reasonably take as long as five years to begin necessary work, given problems with acquisition, relocation, etc. It would "knock- down" parcels prematurely. Second, it would result in many parcels going 'but" and then back "in" to the base value of a district. This would be expensive and time consuming to administer. 9. REQUIRES "PRIOR" PLANNED IMPROVEMENTS TO BE INCLUDED IN BASE VALUE Summary M.S. 273.76, subd. 4, now authorizes a county to increase the base value of a TIF district by the assessed value of the improvements for which building permits were issued 18 months before approval of the TIF plan - "prior planned improvements." The idea is to prevent a TIF district from benefiting from development which was occurring or going to occur anyway. (OVER) ii