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HF 1750

as introduced - 87th Legislature (2011 - 2012) Posted on 05/21/2011 09:01am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to taxation; modifying determinations of substandard buildings
for redevelopment districts and renewal and renovation districts in the tax
increment financing law; amending Minnesota Statutes 2010, sections 469.174,
subdivisions 10, 10a; 469.176, subdivision 4j.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2010, section 469.174, subdivision 10, is amended to
read:


Subd. 10.

Redevelopment district.

(a) "Redevelopment district" means a type of
tax increment financing district consisting of a project, or portions of a project, within
which the authority finds by resolution that one or more of the following conditions,
reasonably distributed throughout the district, exists:

(1) parcels consisting of 70 percent of the area of the district are occupied by
buildings, streets, utilities, paved or gravel parking lots, or other similar structures
and more than 50 percent of the buildings, not including outbuildings, are deleted text begin structurallydeleted text end
substandard deleted text begin to a degree requiring substantial renovation or clearancedeleted text end new text begin buildingsnew text end ;

(2) the property consists of vacant, unused, underused, inappropriately used, or
infrequently used rail yards, rail storage facilities, or excessive or vacated railroad
rights-of-way;

(3) tank facilities, or property whose immediately previous use was for tank
facilities, as defined in section 115C.02, subdivision 15, if the tank facilities:

(i) have or had a capacity of more than 1,000,000 gallons;

(ii) are located adjacent to rail facilities; and

(iii) have been removed or are unused, underused, inappropriately used, or
infrequently used; or

(4) a qualifying disaster area, as defined in subdivision 10b.

(b) For purposes of this subdivision, "deleted text begin structurallydeleted text end substandardnew text begin buildingnew text end " deleted text begin shall mean
containing
deleted text end new text begin means a building that satisfies the conditions in either clause (1) or (2):
new text end

new text begin (1) the building both:
new text end

new text begin (i) fails to comply with the building code applicable to new buildings, and the
modifications necessary to satisfy the building code applicable to new buildings would
cost at least 15 percent of the cost of constructing a new structure of the same square
footage and type on the site; and
new text end

new text begin (ii) is characterized by at least one of the following factors:
new text end

new text begin (A) the building containsnew text end defects in structural elements or a combination of
deficiencies in essential utilities and facilities, light and ventilation, fire protection
including adequate egress, layout and condition of interior partitions, or similar factors,
which defects or deficiencies are of sufficient total significance to justify substantial
renovation or clearancedeleted text begin .deleted text end new text begin ;
new text end

deleted text begin (c) A building is not structurally substandard if it is in compliance with the building
code applicable to new buildings or could be modified to satisfy the building code at a
cost of less than 15 percent of the cost of constructing a new structure of the same square
footage and type on the site.
deleted text end

new text begin (B) property taxes or special assessments have been delinquent for at least two years;
new text end

new text begin (C) the assessor's market value of the property has declined to a greater extent than
the average percentage declines for the same property class in either the municipality or
the county where the property is located; or
new text end

new text begin (D) the building has a vacancy rate higher than the average vacancy rate for all
properties in the same property class in either the municipality or the county where the
property is located; and
new text end

new text begin (2) the building has been substantially unoccupied or unused for any commercial,
industrial, or residential purpose for a least one year by a person with the legal or equitable
right to occupy the property.
new text end

new text begin (c) new text end The municipality may find that a building is deleted text begin not disqualified as structurallydeleted text end new text begin
a
new text end substandard new text begin building new text end under deleted text begin the preceding sentencedeleted text end new text begin paragraph (b)new text end on the basis of
reasonably available evidence, such as the size, type, and age of the building, the average
cost of plumbing, electrical, or structural repairs, or other similar reliable evidence. deleted text begin The
municipality may not make such a determination
deleted text end new text begin Failure to comply with energy codes
may be taken into account in the analysis under paragraph (b), clause (1), item (i), but
may not be the basis for a finding under paragraph (b), clause (1), item (ii), subitem (A).
Except in the case of a finding based on paragraph (b), clause (2), the municipality may
not find that a building is a substandard building
new text end without an interior inspection of the
property, but need not have an independent, expert appraisal prepared of the cost of repair
and rehabilitation of the building. An interior inspection of the property is not required,
if the municipality finds that (1) the municipality or authority is unable to gain access to
the property after using its best efforts to obtain permission from the party that owns or
controls the property; and (2) the evidence otherwise supports a reasonable conclusion
that the building is deleted text begin structurallydeleted text end new text begin anew text end substandardnew text begin building as defined in this subdivisionnew text end .
Items of evidence that support such a conclusion include recent fire or police inspections,
on-site property tax appraisals or housing inspections, exterior evidence of deterioration,
or other similar reliable evidence. Written documentation of the findings and reasons
why an interior inspection was not conducted must be made and retained under section
469.175, subdivision 3, clause (1). deleted text begin Failure of a building to be disqualified under the
provisions of this paragraph is a necessary, but not a sufficient, condition to determining
that the building is substandard.
deleted text end

(d) A parcel is deemed to be occupied by a deleted text begin structurallydeleted text end substandard building
for purposes of the finding under paragraph (a) or by the improvements described in
paragraph (e) if all of the following conditions are met:

(1) the parcel was occupied by a substandard building or met the requirements
of paragraph (e), as the case may be, within three years of the filing of the request for
certification of the parcel as part of the district with the county auditor;

(2) the substandard building or the improvements described in paragraph (e) were
demolished or removed by the authority or the demolition or removal was financed by the
authority or was done by a developer under a development agreement with the authority;

(3) the authority found by resolution before the demolition or removal that the
parcel was occupied by a deleted text begin structurallydeleted text end substandard building or met the requirements of
paragraph (e) and that after demolition and clearance the authority intended to include
the parcel within a district; and

(4) upon filing the request for certification of the tax capacity of the parcel as part
of a district, the authority notifies the county auditor that the original tax capacity of the
parcel must be adjusted as provided by section 469.177, subdivision 1, paragraph (f).

(e) For purposes of this subdivision, a parcel is not occupied by buildings, streets,
utilities, paved or gravel parking lots, or other similar structures unless 15 percent of the
area of the parcel contains buildings, streets, utilities, paved or gravel parking lots, or
other similar structures.

(f) For districts consisting of two or more noncontiguous areas, each area must
qualify as a redevelopment district under paragraph (a) to be included in the district, and
the entire area of the district must satisfy paragraph (a).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for districts for which certification
was requested after the date of final enactment of this act.
new text end

Sec. 2.

Minnesota Statutes 2010, section 469.174, subdivision 10a, is amended to read:


Subd. 10a.

Renewal and renovation district.

(a) "Renewal and renovation district"
means a type of tax increment financing district consisting of a project, or portions of a
project, within which the authority finds by resolution that:

(1)(i) parcels consisting of 70 percent of the area of the district are occupied by
buildings, streets, utilities, paved or gravel parking lots, or other similar structures; (ii)
20 percent of the buildings are deleted text begin structurallydeleted text end substandardnew text begin buildingsnew text end ; and (iii) 30 percent
of the other buildings require substantial renovation or clearance to remove existing
conditions such as: inadequate street layout, incompatible uses or land use relationships,
overcrowding of buildings on the land, excessive dwelling unit density, obsolete buildings
not suitable for improvement or conversion, or other identified hazards to the health,
safety, and general well-being of the community; and

(2) the conditions described in clause (1) are reasonably distributed throughout the
geographic area of the district.

(b) For purposes of determining whether a building is deleted text begin structurallydeleted text end new text begin anew text end substandardnew text begin
building
new text end , whether parcels are occupied by buildings, streets, utilities, paved or gravel
parking lots, or other similar structures, or whether noncontiguous areas qualify, the
provisions of subdivision 10, paragraphs (b) through (f), apply.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for districts for which certification
was requested after the date of final enactment of this act.
new text end

Sec. 3.

Minnesota Statutes 2010, section 469.176, subdivision 4j, is amended to read:


Subd. 4j.

Redevelopment districts.

At least 90 percent of the revenues derived
from tax increments from a redevelopment district or renewal and renovation district
must be used to finance the cost of correcting conditions that allow designation of
redevelopment and renewal and renovation districts under section 469.174. These costs
include, but are not limited to, acquiring properties containing deleted text begin structurallydeleted text end substandard
buildings or improvements or hazardous substances, pollution, or contaminants, acquiring
adjacent parcels necessary to provide a site of sufficient size to permit development,
demolition and rehabilitation of structures, clearing of the land, the removal of hazardous
substances or remediation necessary to development of the land, and installation of
utilities, roads, sidewalks, and parking facilities for the site. The allocated administrative
expenses of the authority, including the cost of preparation of the development action
response plan, may be included in the qualifying costs.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for districts for which certification
was requested after the date of final enactment of this act.
new text end