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Hf3745 - Hf3767 Session Weekly SESSION WEEKLY A NONPARTISAN PUBLICATION MINNESOTA HOUSE OF REPRESENTATIVES • PUBLIC INFORMATION SERVICES VOLUME 27, NUMBER 9 • April 9, 2010 HF3745 - HF3767 SESSION WEEKLY Session Weekly is a nonpartisan publication of Minnesota House of Representatives Public Information Services. During the 2009-2010 Legislative Session, each issue reports House action between Thursdays of each week, lists bill introductions and provides other Page 5 Page 6 Page 18 information. No fee. To subscribe, contact: Minnesota House of Representatives CONTENTS Public Information Services 175 State Office Building 100 Rev. Dr. Martin Luther King Jr. Blvd. HIGHLIGHTS St. Paul, MN 55155-1298 651-296-2146 or 800-657-3550 or the Consumers • 5 Environment • 7 Local Government • 11 Minnesota Relay service at 711 or Education • 5 Health • 7 Military • 12 800-627-3529 (TTY) Elections • 6 Housing • 9 State Government • 12 www.house.mn/hinfo/subscribesw.asp Employment • 7 Human Services • 10 Taxes • 13 Energy • 7 Law • 11 Transportation • 13 Director Barry LaGrave Editor/Assistant Director Lee Ann Schutz BILL INTRODUCTIONS (HF3745-HF3767) • 23 Assistant Editor Mike Cook Art & Production Coordinator FEATURES Paul Battaglia Writers FIRST READING : Expanded use of development tool seen as key to ‘jobs’ new law • 3-4 Kris Berggren, Nick Busse, Susan Hegarty, AT ISSUE : Office of the Legislative Auditor has a watchdog role •16 Patty Ostberg, Lauren Radomski Chief Photographer AT ISSUE : Legislators try to soften the blow of deep spending cuts • 17 Tom Olmscheid AT ISSUE : State colleges and universities prepare for more budget cuts • 18 Photographers Kristin Schue, Andrew VonBank AT ISSUE : Strong difference on equalizing nursing home rates • 19 Staff Assistants AT ISSUE : Legislators seek power to call a special session • 20 Christy Novak, Susan Xiong AT ISSUE : Low-interest loan program designed to assist ag growth • 21 Session Weekly (ISSN 1049-8176) is published MINNESOTA INDEX : Twins Territory • 24 weekly during the legislative session by Minnesota House of Representatives Public Information Services, 175 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., If you enjoy Session Weekly, please consider helping to defray St. Paul, MN 55155-1298. Periodicals postage production and mailing costs with a voluntary donation for the 2010 paid at St. Paul, Minn., and additional offices. session. POSTMASTER: Send address changes to Session Weekly, House Public Information Make your check payable to: Services, 175 State Office Building, Minnesota House of Representatives, and mail it to: 100 Rev. Dr. Martin Luther King Jr. Blvd., House Public Information Services St. Paul, MN 55155-1298. 175 State Office Building 100 Rev. Dr. Martin Luther King Jr. Blvd. St. Paul, MN 55155-1298 Printed on recycled paper which is 50% recycled, 30% post-consumer content. On the cover: Former legislators, from left, Steve Kelley, Brad Finstad, Matt Entenza, Dick Day, Steve Sviggum and Dean Johnson throw out ceremonial first pitches prior to the Minnesota Twins April 3 exhibition game against the St. Louis Cardinals. The legislators were honored by the Twins for their contributions to the creation of Target Field. — Photo by: Tom Olmscheid FIRST READING Betting on TIF Expanded use of development tool key component to ‘jobs’ new law BY LEE ANN SCHUTZ mong the alphabet soup acronyms of government-speak is one that A represents a tool many communities have come to rely on to create economic development. It’s called TIF, short for tax increment financing. Hoping to jumpstart the state’s construction value over the frozen amount, known as industry, the so-called omnibus jobs law the increment, are put toward economic expands the use of TIF so that local projects, development, usually improvements directly languishing on the shelf because of the poor beneficial to the project such as land acquisition, economy, can get going by July 1, 2011. streets, sewer, water or parking facilities. In Another provision of the new law may be essence, the local authority is betting that if a more high profile — establishment of an angel piece of property is redeveloped, its value will investment tax credit — but some House Taxes increase and in turn, so will the property taxes Committee members think the TIF expansion, generated from the improvements. and help to retain the St. Paul Ford Motor According to the nonpartisan House Company plant, could have a long-term greater Research Department, one of three financing impact on job retention and creation. techniques is used by local authorities to fund “As I see it, the real job production is the these upfront costs: expansive emergency use of TIF that will help • bonds are issued and the increment is used the building trades … and the CARZ zone … to pay the bonds back; those are the ones that, I think, will produce • interfund loans are used, where the authority PHOTO B Y TO M O lm SCHEID the jobs out of this,” said Rep. Joe Mullery advances money from its own funds and Rep. Denise Dittrich, who sponsors a bill that (DFL-Mpls). the increments are used to reimburse the would allow the City of Coon Rapids to use tax borrowed money; or increment financing, listens as Mayor Tim Howe tells the House Taxes Committee April 7 what A TIF primer improvements along Coon Rapids Boulevard For those unfamiliar with TIF, a quick TIF Districts by Type Statewide would mean to his city. primer may be in order. For Calendar Year 2007 Using TIF, a local government can create • the developer pays the upfront costs and a specific district in which property tax Soils Condition Pre-1979 the increments are used to reimburse the 1% 2% developer. values are essentially frozen. Based on the Economic Development Redevelopment 23% Although TIF districts are established physical condition of the site and the type 47% of construction to occur, TIF districts can locally, any deviation from state law regarding be classified for redevelopment, economic how it is used must get legislative approval. development, housing, renewal and That’s because redirected property tax renovation, or soils reclamation. However, revenue directly impacts the other local taxing most TIF districts need to address some sort authorities — namely the county and local school district. of blight. The type of district created dictates Housing the timeline until it sunsets and when the tax 26% First Reading continued on page 4 advantage goes away. Renewal & Renovation 1% Taxes generated by the increase in property Source: Office of the State Auditor April 9, 2010 Session Weekly 3 PHOTO B Y TO M O lm SCHEID Sponsored by Rep. Denise Dittrich, HF3007 would allow the City of Coon Rapids to use tax increment financing to make improvements along Coon Rapids Boulevard. First Reading continued from page 3 Mankato and Cohasset. required. Authority to spend increments under But they are not alone with their requests. this provision expires Dec. 31, 2011. TIF expansion Each session a string of cities comes forward HF2695*/SF2568/CH216 The new law, with various effective dates, asking for TIF changes. Seven communities makes several changes to TIF usage, most were before the House Taxes Committee April notably for the City of Bloomington to 7 with their requests. coax a phased-in expansion of the Mall of Under the new law, the need for a legislative Omnibus Jobs Law Provisions America, which is in the district represented • An investment credit for angel type venture OK won’t change, but municipalities will see capital investment. by Rep. Ann Lenczewski (DFL-Bloomington), more opportunities to use TIF, especially for • A refundable historic structure rehabilitation chairwoman of the House Taxes Committee, projects that will create new jobs and those that credit. and sponsor of the law along with Sen. Tom might help with “Main Street” redevelopment. • Authority for local governments to finance energy conservation improvements and Bakk (DFL-Cook). A new type of district is authorized in the But don’t read too much into her support of collect repayments as special assessments law — compact development TIF districts. (at the request of the property owner). TIF in this legislation. Generally, Lenczewski Under the new definition, 70 percent of • Authority of the Public Finance Authority to isn’t a fan of the tool. the area in the district must be occupied issue revenue bonds for city transportation “It’s been a bill with a lot of compromise,” by structures classed as 3a commercial- projects. she said during the April 1 law signing. “My industrial, and the planned redevelopment • Compact development tax increment financing districts. goal was to get a bill that the governor would must at least triple the square footage of class sign, an early bill to get people back to work • Expanded authority to temporarily use TIF 3a buildings. The blight condition does not for economic development. and no conference committee.” necessarily apply, but the project should be • Expanded authority to use excess TIF Lenczewski said there are about 2,200 TIF transit-friendly. The authority for creating revenues for construction of new private districts across the state, and that it is a form this type of district ends June 30, 2012. development. of property tax that lacks transparency. Increments from these districts may be used to • Provision of modified JOBZ benefits to the Ford Motor Company site in St. Paul, if “That’s the core of the problem of TIF for pay administrative expenses, land acquisition certain conditions are met. me,” she said. “We don’t see these property tax costs, demolition and preparation costs, and • Expanded authority for several cities to use subsidies that are going to things.” public improvement costs. TIF for housing replacement. She said TIF is a “good deal” for cities Additionally, several provisions for economic • Additional flexibility for the City of because they get a “discounted new amenity development TIF districts are modified in Bloomington to expand the Mall of paid for not only by the city tax base, but the America.
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