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The tax conference committee voted to extend the authority for 15 more years and continue to negotiate other provisions of the omnibus tax bill.
(Published May 10, 2013)
Legislators called the compromise "halfway to forever" in extending the authority for cities to use two economic development tools: Housing Improvement Areas (HIAs) and Special Service Districts (SSDs) for economic development purposes. The current law sunsets the authority for creating new HIAs/SSDs on June 30, 2013. As the amended omnibus tax bill currently sits in conference committee, the authority for cities to create new HIAs/SSDs would be extended until June 30, 2028.
The tax conference committee took up HIA/SSD differences authority on Monday night. The House tax bill (HF 677, Rep. Ann Lenczenski, DFL-Bloomington) included a permanent extension, removing the sunset date. In comparison, the Senate tax bill (SF 552, Sen. Rod Skoe, DFL-Clearbrook) originally included a five year sunset extension. The HIA/SSD provision is one of many smaller pieces of the omnibus tax bills. The tax conference committee is still working out differences in larger provisions of the omnibus tax bill before passing the report out of the conference committee.
Comments were made by tax conference committee members supporting the intent behind both the House and Senate approach and the usefulness of the tools in cities. Sen. Dziedzic and Sen. Rest supported having local governments come to the Capitol to share their experiences with the tool, thus preserving a sunset. Rep. Davnie supported allowing the cities to utilize the tool as they see fit, without being required to come back to the Capitol to extend the sunset date each time. Rep. Lenczenski shared openness to either approach, noting that the legislature has continued to approve and extend the sunset since it was enacted.
The League thanks those who were involved in having support for the League-supported bill throughout the legislative process:
The League’s policy, FF-26 (page 99 in 2013 City Policies) calls for a permanent extension of the Housing Improvement Area authority. Staff will recommend an update to the policy to include support for making the Special Service District authority permanent during the summer policy committee process.
Questions? Contact Heather Cederholm at firstname.lastname@example.org or at (651) 281-1256.
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