HF 2665

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to taxation; allowing certain county boards 
  1.3             to grant tax abatements for economic development 
  1.4             purposes; amending Minnesota Statutes 1994, section 
  1.5             375.192, subdivision 2; proposing coding for new law 
  1.6             in Minnesota Statutes, chapter 375. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1994, section 375.192, 
  1.9   subdivision 2, is amended to read: 
  1.10     Subd. 2.  Upon written application by the owner of any 
  1.11  property, the county board may grant the reduction or abatement 
  1.12  of estimated market valuation or taxes and of any costs, 
  1.13  penalties, or interest on them as the board deems just and 
  1.14  equitable and order the refund in whole or part of any taxes, 
  1.15  costs, penalties, or interest which have been erroneously or 
  1.16  unjustly paid.  Except as provided in section 375.194, the 
  1.17  county board is authorized to consider and grant reductions or 
  1.18  abatements on applications only as they relate to taxes payable 
  1.19  in the current year and the two prior years; provided that 
  1.20  reductions or abatements for the two prior years shall be 
  1.21  considered or granted only for (i) clerical errors, or (ii) when 
  1.22  the taxpayer fails to file for a reduction or an adjustment due 
  1.23  to hardship, as determined by the county board.  The application 
  1.24  must include the social security number of the applicant.  The 
  1.25  social security number is private data on individuals as defined 
  1.26  by section 13.02, subdivision 12. All applications must be 
  2.1   approved by the county assessor, or, if the property is located 
  2.2   in a city of the first or second class having a city assessor, 
  2.3   by the city assessor, and by the county auditor before 
  2.4   consideration by the county board, except that the part of the 
  2.5   application which is for the abatement of penalty or interest 
  2.6   must be approved by the county treasurer and county auditor.  
  2.7   Approval by the county or city assessor is not required for 
  2.8   abatements of penalty or interest.  No reduction, abatement, or 
  2.9   refund of any special assessments made or levied by any 
  2.10  municipality for local improvements shall be made unless it is 
  2.11  also approved by the board of review or similar taxing authority 
  2.12  of the municipality.  Before taking action on any reduction or 
  2.13  abatement where the reduction of taxes, costs, penalties, and 
  2.14  interest exceed $10,000, the county board shall give 20 days' 
  2.15  notice to the school board and the municipality in which the 
  2.16  property is located.  The notice must describe the property 
  2.17  involved, the actual amount of the reduction being sought, and 
  2.18  the reason for the reduction.  If the school board or the 
  2.19  municipality object to the granting of the reduction or 
  2.20  abatement, the county board must refer the abatement or 
  2.21  reduction to the commissioner of revenue with its 
  2.22  recommendation.  The commissioner shall consider the abatement 
  2.23  or reduction under section 270.07, subdivision 1.  
  2.24     An appeal may not be taken to the tax court from any order 
  2.25  of the county board made in the exercise of the discretionary 
  2.26  authority granted in this section.  
  2.27     The county auditor shall notify the commissioner of revenue 
  2.28  of all abatements resulting from the erroneous classification of 
  2.29  real property, for tax purposes, as nonhomestead property.  For 
  2.30  the abatements relating to the current year's tax processed 
  2.31  through June 30, the auditor shall notify the commissioner on or 
  2.32  before July 31 of that same year of all abatement applications 
  2.33  granted.  For the abatements relating to the current year's tax 
  2.34  processed after June 30 through the balance of the year, the 
  2.35  auditor shall notify the commissioner on or before the following 
  2.36  January 31 of all applications granted.  The county auditor 
  3.1   shall submit a form containing the social security number of the 
  3.2   applicant and such other information the commissioner prescribes.
  3.3      Sec. 2.  [375.194] [ECONOMIC DEVELOPMENT TAX ABATEMENT.] 
  3.4      Subdivision 1.  [DEFINITIONS.] For purposes of this 
  3.5   section, the following terms have the meanings given them. 
  3.6      (a) "Eligible county" means a county whose county 
  3.7   government tax rate is at least 35 points higher than the county 
  3.8   government tax rate of any adjacent bordering county in the 
  3.9   initial year that the tax abatement is granted on the eligible 
  3.10  property.  An eligible county cannot be one of the seven 
  3.11  metropolitan counties under section 473.121, subdivision 4. 
  3.12     (b) "Eligible property" means property located in an 
  3.13  eligible county and is either (i) commercial property classified 
  3.14  under section 273.13, subdivision 24, whose estimated market 
  3.15  value has increased by at least $400,000 from improvements made 
  3.16  on that property by the taxpayer, or (ii) industrial property 
  3.17  classified under section 273.13, subdivision 24, whose estimated 
  3.18  market value has increased by at least $100,000 from 
  3.19  improvements made on that property by the taxpayer.  For 
  3.20  purposes of this subdivision, improvements made to multiple 
  3.21  adjacent parcels may be aggregated.  If there is a question as 
  3.22  to the distinction between what type of property is included in 
  3.23  the category of "commercial" versus "industrial," the 
  3.24  commissioner of revenue shall make the determination, and that 
  3.25  decision shall be final. 
  3.26     (c) "Improvements" means (i) new construction, and (ii) 
  3.27  rehabilitation, reconstruction, and additions to existing 
  3.28  structures. 
  3.29     (d) "Maximum tax abatement" for any given year means the 
  3.30  difference between (i) the eligible county's tax rate times the 
  3.31  net tax capacity of the eligible property, and (ii) the county 
  3.32  tax rate of the adjacent county which is closest geographically 
  3.33  to the eligible property, times the net tax capacity of the 
  3.34  eligible property. 
  3.35     (e) "Taxpayer" means the person who is responsible for 
  3.36  payment of the property tax, including a lessee who pays the 
  4.1   taxes on the qualifying property under the terms of the lease. 
  4.2      Subd. 2.  [ABATEMENT AUTHORITY.] The county board of a 
  4.3   qualifying county may enter into a written agreement with the 
  4.4   taxpayer of qualifying property to grant a property tax 
  4.5   abatement to the taxpayer.  The agreement must specify the 
  4.6   percentage of the maximum tax abatement to be granted for each 
  4.7   of the designated tax abatement years.  The agreement must not 
  4.8   provide a property tax abatement for any given year that exceeds 
  4.9   the maximum tax abatement under subdivision 1, paragraph (d).  
  4.10  The maximum length of the agreement is ten years.  The agreement 
  4.11  is binding unless both the county board and the taxpayer 
  4.12  mutually agree upon any changes in the agreement. 
  4.13     Subd. 3.  [ABATEMENT CALCULATIONS.] The actual tax 
  4.14  abatement shall be computed annually by the county auditor where 
  4.15  the qualifying property is located based upon the qualifying 
  4.16  county's tax rate for the current year and the county tax rate 
  4.17  of the closest adjacent county bordering the property for the 
  4.18  current year; provided, however, that even if the difference in 
  4.19  those county tax rates in any given year is less than the 
  4.20  required 35-point minimum, the agreement under subdivision 2 
  4.21  shall remain in effect for the agreement's duration. 
  4.22     If the qualifying improvements are made over two calendar 
  4.23  years, the county board is allowed to grant the initial tax 
  4.24  abatement based on improvements of less than the $100,000 
  4.25  estimated market value for industrial property and $400,000 
  4.26  estimated market value for commercial property provided that the 
  4.27  county board has finalized the agreement and is reasonably 
  4.28  assured that the minimum requirements will be met as provided in 
  4.29  subdivision 2 over the two-year time period.  However, the 
  4.30  contract's ten-year maximum time period begins with the year the 
  4.31  first abatement is granted. 
  4.32     Subd. 4.  [PROPOSED AND FINAL PROPERTY TAX STATEMENTS.] For 
  4.33  purposes of determining the qualifying property's taxes on the 
  4.34  proposed property tax statement under section 275.065, the 
  4.35  amount shown will be the amount before the deduction of the tax 
  4.36  abatement under subdivision 3.  The property taxes shown on the 
  5.1   final property tax statement shall reflect both the taxes before 
  5.2   and after the tax abatement granted under this section. 
  5.3      Subd. 5.  [DETERMINATION OF COUNTY TAX RATE.] The county's 
  5.4   proposed and final tax rates shall be determined by dividing the 
  5.5   certified levy by the total taxable net tax capacity, without 
  5.6   regard to any abatements granted under this section.  The county 
  5.7   board shall make available the estimated amount of the abatement 
  5.8   at the public hearing under section 275.065, subdivision 6. 
  5.9      Subd. 6.  [QUALIFYING PROPERTY LOCATED IN A TAX INCREMENT 
  5.10  FINANCING DISTRICT.] A qualifying property may be located in a 
  5.11  tax increment financing district; provided that (i) the 
  5.12  governing body of the municipality containing the district 
  5.13  approves the written agreement under subdivision 2, and (ii) the 
  5.14  county treasurer when making the property tax settlements shall 
  5.15  deduct the dollar amount of the tax abatement amount granted to 
  5.16  the qualifying property under this section from the property tax 
  5.17  distribution made to the tax increment financing district. 
  5.18     Sec. 3.  [EFFECTIVE DATE.] 
  5.19     Sections 1 and 2 are effective for taxes levied in 1996 and 
  5.20  thereafter, payable in 1997 and thereafter.