DOJ: News Release

McGrath: TIF Funds Inappropriate for MetraPark Financing

HELENA – In an opinion released today, Montana Attorney General Mike McGrath held that industrial district tax increment financing may not be used to finance infrastructure improvements in Yellowstone County’s MetraPark facility.

Chief Deputy Yellowstone County Attorney Daniel Schwarz requested the opinion on behalf of the Yellowstone County Commission. MetraPark is a multipurpose arena and exhibition building located northeast of Billings, just outside the city limits.

Montana law allows for tax increment financing (TIF) for urban renewal plans, industrial districts and technology districts. Schwarz asked whether an industrial TIF might be used to fund improvements to MetraPark. McGrath’s analysis held that industrial districts and TIF financing within those districts are meant to develop infrastructure for value-adding industries, and so an industrial TIF funding scheme is not appropriate for the facility.

“As meritorious as the activities conducted at MetraPark may be … these activities do not constitute the manufacturing transformation of primary, raw resources into ‘processed’ substances,” McGrath held.

Schwarz also inquired whether a city and county can enter into an agreement to create an urban renewal TIF district that includes properties of both the city and the county.

McGrath said the city and county may not, noting that under Montana’s Urban Renewal Law, only cities and towns may create TIF districts for urban renewal. While the statutes do provide opportunities for a county to participate in a municipal urban renewal plan, they do not expand “the scope of permissible urban renewal project(s) to include lands outside the municipal boundary.”

“There is no suggestion anywhere in the statute that an urban renewal project may be undertaken outside of the boundaries of a municipality by either a city or a county,” McGrath held.

Opinions of the attorney general carry the weight of law unless they are overturned by a court or the legislature modifies the laws involved.

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