Housing Improvement Areas & Special Service Districts Bill Laid Over

Both Senate and House bills were laid over in their respective tax committees for possible inclusion in the omnibus tax bills.
(Published Mar 18, 2013)

The bill (HF 350) that would repeal the existing sunset for new housing improvement areas and special service districts was heard by the House Property & Local Taxes Division last Tuesday. The bill was laid over for possible inclusion in the Division’s report, and the omnibus tax bill. The Senate version of the bill was heard by the Senate Taxes Committee and was laid over for possibly inclusion in the omnibus tax bill.

Housing Improvement Areas are used by at least 10 cities, with many cities establishing more than one area within a city. The Special Service District tool is utilized by over 15 cities all over the state.

We continue to encourage city officials to contact their legislators and share their experience with the tools. Even if your city does not currently utilize the tools, share any potential future use of the tools and the importance of having another "tool in the toolbox" for cities, retail businesses, and homeowners to use going forward.

Click here to find out who your legislators are

Legislative Detail
SF 212 is authored by Sen. Melisa Franzen (DFL-Edina), Sen. Ann Rest (DFL-New Hope), Sen. Dave Senjem (R-Rochester), and Sen. Bev Scalze (DFL-Little Canada), and Sen. Carla Nelson (R-Rochester).

The House companion bill, (HF 350), is authored by Rep. Steve Simon (DFL-St. Louis Park), Rep. Mike Nelson (DFL-Brooklyn Park), Rep. Mike Benson (R-Rochester), Rep. Barb Yarusso (DFL-Shoreview), Rep. Jason Isaccson (DFL-Shoreview), Rep. Connie Bernardy (DFL, Fridley) and Rep. Carolyn Laine (DFL-Columbia Heights).

In previous hearings, legislators had no opposition to effectiveness of the tools and their use by cities. A few legislators have shared concern about repealing the sunset.

City outreach and advocacy on this issue has been crucial to its continued movement through the legislative process. In the most recent hearing, Mark Sather, City Manager, White Bear Lake and Julie Wischnack, Community Development Director for Minnetonka testified in support of the bill. In previous hearings, Dale Granbush, Chair of the Downtown White Bear Lake; Jim Hovland, Mayor, City of Edina; Michele Schnitker, Housing Supervisor, City of St. Louis Park; and Sean Walther, Senior Planner, City of St. Louis Park have also testified in support of the bill. The City of Rochester submitted a letter of support from Mayor Brede and John Wade, President of the Rochester Downtown Alliance. Many legislators have mentioned being contacted by their cities during other hearings on this bill.

Background
HIAs allow cities to assist property owners in condominiums and townhomes with financing housing improvements. Cities act as a conduit for the financing either by advancing funds and recovering the costs by charging property owners fees, or by issuing bonds and imposing fees or assessments to repay the bonds.

SSDs are a tool for cities to provide an increased level of service or infrastructure to their commercial or industrial areas. SSDs are established at the request of those who will pay for the increased level of service, typically business properties in downtown retail areas.

Under Minnesota Statutes, section 428A.11 to 428A.21, statewide city authority to create new HIAs and SSDs is scheduled to sunset on June 30, 2013. League policy FF-26, in the 2013 City Policies (pdf), supports making the authority for HIAs permanent. Both tools are used by cities throughout the state to improve neighborhood stability and increase services or infrastructure to a commercial or industrial area of the city. The League and Metro Cities are working together to ensure this local tool remains an option for cities.

Questions? Contact Heather Cederholm at hcederholm@lmc.org or at 651-281-1256.

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