Purpose of the Bill

The purpose of this bill is to address labor law violations in projects funded by tax increment financing in Minnesota. It aims to hold developers, contractors, and subcontractors accountable if they violate state or municipal labor laws during the development of these projects.

Main Provisions

• Payment Cessation: The bill allows municipal authorities to stop tax increment payments to developers, property owners, or note holders if a labor law violation is found. This includes halting payments for project development costs and any accrued interest.
• Public Process: Before finding a labor law violation, the municipality must hold a public hearing after giving notice in a widely circulated newspaper. The notice must be published between 10 and 30 days before the hearing and include proposed findings.
• Documentation Requirement: Any finding of a labor law violation must clearly cite the specific labor law violated and provide supporting facts, such as dates and locations of the violation.
• Objection and Appeals: Developers, property owners, or note holders involved in the project can file objections in writing before the finding is officially adopted. Within 30 days, entities found in violation can contest the finding in district court. Courts will favor the challenger if they determine proper procedures were not followed or no law was violated.
• Legal Recourse: Those affected by the payment stoppage can seek damages or equitable relief. Prevailing parties in such legal challenges are entitled to recover costs and reasonable attorney fees.

Significant Changes

• New Legal Authority for Municipalities: The bill introduces a significant change by granting municipalities the authority to halt financial payments related to tax increment-financed projects when labor law breaches are established, introducing a layer of compliance enforcement not previously existing in Minnesota Statutes.

Relevant Terms

• Tax increment financing
• Labor law violations
• Developer, contractor, subcontractor
• Public hearing
• Equitable relief
• Attorney fees