Purpose of the Bill

The purpose of this bill is to address the consequences of labor law violations within the scope of property development projects that utilize tax increment financing (TIF). It aims to give municipalities the power to take financial actions against those who disregard labor laws during the execution of such projects.

Main Provisions

• Stopping Payments: The bill grants authorities the ability to halt payments to developers, property owners, or note holders if it is determined that there has been a violation of state or municipal labor laws during a project's development. This includes stopping payments for costs and any interest that has accrued through financing related to the project.

• Public Hearing Requirement: Before a decision is made to stop payments, the municipality must hold a public hearing. Notice of this hearing must be published in a local newspaper at least ten days before the hearing. The notice must include the proposed findings regarding the labor law violation.

• Labor Law Finding: Any finding of a violation must be made public and include specific citations and supportive facts, including relevant dates and locations of violations.

• Objection Process: Developers or any stakeholders related to the project may file a written objection before or during the hearing when a finding is to be adopted.

Significant Changes to Existing Law

• The bill proposes a new section in Minnesota Statutes chapter 469, establishing clear procedures for addressing labor law violations in projects with TIF.
• It introduces specific legal recourses in the form of equitable relief or damages for parties affected by the municipality's findings or the cessation of payments.

Legal Challenge

• Affected parties have 30 days to challenge the findings or stoppage of payments in district court.
• Courts will rule in favor of the challenger if it is demonstrated that the findings or procedures were faulty or if the cited labor law was not actually violated.
• Prevailing parties in such suits are entitled to recover costs and reasonable attorney fees.

Relevant Terms

• Property taxation
• Tax increment financing (TIF)
• Labor law violations
• Developer contractor
• Municipality hearing
• Equitable relief
• Legal challenge