HF 1491

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to tax increment financing; allowing certain 
  1.3             disaster areas to qualify as redevelopment districts 
  1.4             with an original tax capacity equal to the land value; 
  1.5             amending Minnesota Statutes 2002, sections 469.174, 
  1.6             subdivision 10, by adding a subdivision; 469.177, 
  1.7             subdivision 1. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 2002, section 469.174, 
  1.10  subdivision 10, is amended to read: 
  1.11     Subd. 10.  [REDEVELOPMENT DISTRICT.] (a) "Redevelopment 
  1.12  district" means a type of tax increment financing district 
  1.13  consisting of a project, or portions of a project, within which 
  1.14  the authority finds by resolution that one or more of the 
  1.15  following conditions, reasonably distributed throughout the 
  1.16  district, exists: 
  1.17     (1) parcels consisting of 70 percent of the area of the 
  1.18  district are occupied by buildings, streets, utilities, paved or 
  1.19  gravel parking lots, or other similar structures and more than 
  1.20  50 percent of the buildings, not including outbuildings, are 
  1.21  structurally substandard to a degree requiring substantial 
  1.22  renovation or clearance; or 
  1.23     (2) the property consists of vacant, unused, underused, 
  1.24  inappropriately used, or infrequently used railyards, rail 
  1.25  storage facilities, or excessive or vacated railroad 
  1.26  rights-of-way; or 
  2.1      (3) tank facilities, or property whose immediately previous 
  2.2   use was for tank facilities, as defined in section 115C.02, 
  2.3   subdivision 15, if the tank facilities: 
  2.4      (i) have or had a capacity of more than 1,000,000 gallons; 
  2.5      (ii) are located adjacent to rail facilities; and 
  2.6      (iii) have been removed or are unused, underused, 
  2.7   inappropriately used, or infrequently used; or 
  2.8      (4) a qualifying disaster area, as defined in subdivision 
  2.9   10b. 
  2.10     (b) For purposes of this subdivision, "structurally 
  2.11  substandard" shall mean containing defects in structural 
  2.12  elements or a combination of deficiencies in essential utilities 
  2.13  and facilities, light and ventilation, fire protection including 
  2.14  adequate egress, layout and condition of interior partitions, or 
  2.15  similar factors, which defects or deficiencies are of sufficient 
  2.16  total significance to justify substantial renovation or 
  2.17  clearance. 
  2.18     (c) A building is not structurally substandard if it is in 
  2.19  compliance with the building code applicable to new buildings or 
  2.20  could be modified to satisfy the building code at a cost of less 
  2.21  than 15 percent of the cost of constructing a new structure of 
  2.22  the same square footage and type on the site.  The municipality 
  2.23  may find that a building is not disqualified as structurally 
  2.24  substandard under the preceding sentence on the basis of 
  2.25  reasonably available evidence, such as the size, type, and age 
  2.26  of the building, the average cost of plumbing, electrical, or 
  2.27  structural repairs, or other similar reliable evidence.  The 
  2.28  municipality may not make such a determination without an 
  2.29  interior inspection of the property, but need not have an 
  2.30  independent, expert appraisal prepared of the cost of repair and 
  2.31  rehabilitation of the building.  An interior inspection of the 
  2.32  property is not required, if the municipality finds that (1) the 
  2.33  municipality or authority is unable to gain access to the 
  2.34  property after using its best efforts to obtain permission from 
  2.35  the party that owns or controls the property; and (2) the 
  2.36  evidence otherwise supports a reasonable conclusion that the 
  3.1   building is structurally substandard.  Items of evidence that 
  3.2   support such a conclusion include recent fire or police 
  3.3   inspections, on-site property tax appraisals or housing 
  3.4   inspections, exterior evidence of deterioration, or other 
  3.5   similar reliable evidence.  Written documentation of the 
  3.6   findings and reasons why an interior inspection was not 
  3.7   conducted must be made and retained under section 469.175, 
  3.8   subdivision 3, clause (1). 
  3.9      (d) A parcel is deemed to be occupied by a structurally 
  3.10  substandard building for purposes of the finding under paragraph 
  3.11  (a) if all of the following conditions are met: 
  3.12     (1) the parcel was occupied by a substandard building 
  3.13  within three years of the filing of the request for 
  3.14  certification of the parcel as part of the district with the 
  3.15  county auditor; 
  3.16     (2) the substandard building was demolished or removed by 
  3.17  the authority or the demolition or removal was financed by the 
  3.18  authority or was done by a developer under a development 
  3.19  agreement with the authority; 
  3.20     (3) the authority found by resolution before the demolition 
  3.21  or removal that the parcel was occupied by a structurally 
  3.22  substandard building and that after demolition and clearance the 
  3.23  authority intended to include the parcel within a district; and 
  3.24     (4) upon filing the request for certification of the tax 
  3.25  capacity of the parcel as part of a district, the authority 
  3.26  notifies the county auditor that the original tax capacity of 
  3.27  the parcel must be adjusted as provided by section 469.177, 
  3.28  subdivision 1, paragraph (h). 
  3.29     (e) For purposes of this subdivision, a parcel is not 
  3.30  occupied by buildings, streets, utilities, paved or gravel 
  3.31  parking lots, or other similar structures unless 15 percent of 
  3.32  the area of the parcel contains buildings, streets, utilities, 
  3.33  paved or gravel parking lots, or other similar structures. 
  3.34     (f) For districts consisting of two or more noncontiguous 
  3.35  areas, each area must qualify as a redevelopment district under 
  3.36  paragraph (a) to be included in the district, and the entire 
  4.1   area of the district must satisfy paragraph (a). 
  4.2      [EFFECTIVE DATE.] This section is effective for districts 
  4.3   for which the request for certification is made after the day 
  4.4   following final enactment. 
  4.5      Sec. 2.  Minnesota Statutes 2002, section 469.174, is 
  4.6   amended by adding a subdivision to read: 
  4.7      Subd. 10b.  [QUALIFIED DISASTER AREA.] A "qualified 
  4.8   disaster area" is an area that meets the following requirements: 
  4.9      (1) parcels consisting of 70 percent of the area of the 
  4.10  district were occupied by buildings, streets, utilities, paved 
  4.11  or gravel parking lots, or other similar structures immediately 
  4.12  before the disaster or emergency; 
  4.13     (2) the area of the district was subject to a disaster or 
  4.14  emergency, as defined in section 273.123, subdivision 1, within 
  4.15  the 18-month period ending on the day the request for 
  4.16  certification of the district is made; and 
  4.17     (3) 50 percent or more of the buildings in the area have 
  4.18  suffered substantial damage as a result of the disaster or 
  4.19  emergency. 
  4.20     [EFFECTIVE DATE.] This section is effective for districts 
  4.21  for which the request for certification is made after the day 
  4.22  following final enactment.  
  4.23     Sec. 3.  Minnesota Statutes 2002, section 469.177, 
  4.24  subdivision 1, is amended to read: 
  4.25     Subdivision 1.  [ORIGINAL NET TAX CAPACITY.] (a) Upon or 
  4.26  after adoption of a tax increment financing plan, the auditor of 
  4.27  any county in which the district is situated shall, upon request 
  4.28  of the authority, certify the original net tax capacity of the 
  4.29  tax increment financing district and that portion of the 
  4.30  district overlying any subdistrict as described in the tax 
  4.31  increment financing plan and shall certify in each year 
  4.32  thereafter the amount by which the original net tax capacity has 
  4.33  increased or decreased as a result of a change in tax exempt 
  4.34  status of property within the district and any subdistrict, 
  4.35  reduction or enlargement of the district or changes pursuant to 
  4.36  subdivision 4.  
  5.1      (b) For districts approved under section 469.175, 
  5.2   subdivision 3, or parcels added to existing districts after May 
  5.3   1, 1988, if the classification under section 273.13 of property 
  5.4   located in a district changes to a classification that has a 
  5.5   different assessment ratio, the original net tax capacity of 
  5.6   that property must be redetermined at the time when its use is 
  5.7   changed as if the property had originally been classified in the 
  5.8   same class in which it is classified after its use is changed. 
  5.9      (c) The amount to be added to the original net tax capacity 
  5.10  of the district as a result of previously tax exempt real 
  5.11  property within the district becoming taxable equals the net tax 
  5.12  capacity of the real property as most recently assessed pursuant 
  5.13  to section 273.18 or, if that assessment was made more than one 
  5.14  year prior to the date of title transfer rendering the property 
  5.15  taxable, the net tax capacity assessed by the assessor at the 
  5.16  time of the transfer.  If improvements are made to tax exempt 
  5.17  property after certification of the district and before the 
  5.18  parcel becomes taxable, the assessor shall, at the request of 
  5.19  the authority, separately assess the estimated market value of 
  5.20  the improvements.  If the property becomes taxable, the county 
  5.21  auditor shall add to original net tax capacity, the net tax 
  5.22  capacity of the parcel, excluding the separately assessed 
  5.23  improvements.  If substantial taxable improvements were made to 
  5.24  a parcel after certification of the district and if the property 
  5.25  later becomes tax exempt, in whole or part, as a result of the 
  5.26  authority acquiring the property through foreclosure or exercise 
  5.27  of remedies under a lease or other revenue agreement or as a 
  5.28  result of tax forfeiture, the amount to be added to the original 
  5.29  net tax capacity of the district as a result of the property 
  5.30  again becoming taxable is the amount of the parcel's value that 
  5.31  was included in original net tax capacity when the parcel was 
  5.32  first certified.  The amount to be added to the original net tax 
  5.33  capacity of the district as a result of enlargements equals the 
  5.34  net tax capacity of the added real property as most recently 
  5.35  certified by the commissioner of revenue as of the date of 
  5.36  modification of the tax increment financing plan pursuant to 
  6.1   section 469.175, subdivision 4. 
  6.2      (d) For districts approved under section 469.175, 
  6.3   subdivision 3, or parcels added to existing districts after May 
  6.4   1, 1988, if the net tax capacity of a property increases because 
  6.5   the property no longer qualifies under the Minnesota 
  6.6   Agricultural Property Tax Law, section 273.111; the Minnesota 
  6.7   Open Space Property Tax Law, section 273.112; or the 
  6.8   Metropolitan Agricultural Preserves Act, chapter 473H, or 
  6.9   because platted, unimproved property is improved or three years 
  6.10  pass after approval of the plat under section 273.11, 
  6.11  subdivision 1, the increase in net tax capacity must be added to 
  6.12  the original net tax capacity.  
  6.13     (e) The amount to be subtracted from the original net tax 
  6.14  capacity of the district as a result of previously taxable real 
  6.15  property within the district becoming tax exempt, or a reduction 
  6.16  in the geographic area of the district, shall be the amount of 
  6.17  original net tax capacity initially attributed to the property 
  6.18  becoming tax exempt or being removed from the district.  If the 
  6.19  net tax capacity of property located within the tax increment 
  6.20  financing district is reduced by reason of a court-ordered 
  6.21  abatement, stipulation agreement, voluntary abatement made by 
  6.22  the assessor or auditor or by order of the commissioner of 
  6.23  revenue, the reduction shall be applied to the original net tax 
  6.24  capacity of the district when the property upon which the 
  6.25  abatement is made has not been improved since the date of 
  6.26  certification of the district and to the captured net tax 
  6.27  capacity of the district in each year thereafter when the 
  6.28  abatement relates to improvements made after the date of 
  6.29  certification.  The county auditor may specify reasonable form 
  6.30  and content of the request for certification of the authority 
  6.31  and any modification thereof pursuant to section 469.175, 
  6.32  subdivision 4.  
  6.33     (f) If a parcel of property contained a substandard 
  6.34  building that was demolished or removed and if the authority 
  6.35  elects to treat the parcel as occupied by a substandard building 
  6.36  under section 469.174, subdivision 10, paragraph (b), the 
  7.1   auditor shall certify the original net tax capacity of the 
  7.2   parcel using the greater of (1) the current net tax capacity of 
  7.3   the parcel, or (2) the estimated market value of the parcel for 
  7.4   the year in which the building was demolished or removed, but 
  7.5   applying the class rates for the current year. 
  7.6      (g) For a redevelopment district qualifying under section 
  7.7   469.174, subdivision 10, paragraph (a), clause (4), as a 
  7.8   qualified disaster area, the auditor shall certify the value of 
  7.9   the land as the original tax capacity for the district. 
  7.10     [EFFECTIVE DATE.] This section is effective for districts 
  7.11  for which the request for certification is made after the day 
  7.12  following final enactment.