SF 838

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; allowing cities, towns, and 
  1.3             counties to abate property taxes on certain 
  1.4             improvements made to commercial property; proposing 
  1.5             coding for new law in Minnesota Statutes, chapter 469. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  [469.21] [DEFINITIONS.] 
  1.8      Subdivision 1.  [GENERALLY.] In sections 469.21 to 469.217, 
  1.9   the terms defined in this section have the meanings given them, 
  1.10  unless the context indicates a different meaning. 
  1.11     Subd. 2.  [IMPROVEMENTS.] "Improvements" means new 
  1.12  construction on vacant land or land with existing structures, 
  1.13  and rehabilitation, reconstruction, and additions to existing 
  1.14  structures.  The improvements must increase the value of the 
  1.15  eligible property by at least $5,000. 
  1.16     Subd. 3.  [ELIGIBLE PROPERTY.] "Eligible property" means 
  1.17  taxable property, classified as class 3 under section 273.13, 
  1.18  subdivision 24.  
  1.19     Subd. 4.  [ELIGIBLE TAX.] "Eligible tax" means the net 
  1.20  property tax on the taxpayer's eligible property that is 
  1.21  attributable to the market value of improvements made to the 
  1.22  property as provided in the agreement. 
  1.23     Subd. 5.  [TAXPAYER.] "Taxpayer" means the person 
  1.24  responsible for payment of the eligible tax, including a lessee 
  1.25  who pays taxes under the terms of a lease. 
  2.1      Subd. 6.  [GOVERNING BODY.] "Governing body" means the 
  2.2   county board in the case of a county, the city council or other 
  2.3   body having general legislative powers in the case of a city, 
  2.4   and the board of supervisors in the case of a town. 
  2.5      Subd. 7.  [GOVERNMENTAL SUBDIVISION.] "Governmental 
  2.6   subdivision" means a county, home rule charter or statutory 
  2.7   city, or town. 
  2.8      Subd. 8.  [NET PROPERTY TAX.] "Net property tax" means the 
  2.9   property tax payable on the eligible property, less 
  2.10     (1) special assessments, penalties, and interest payable on 
  2.11  the property; and 
  2.12     (2) any state-paid credits. 
  2.13     The taxes are considered payable in the year prescribed by 
  2.14  law for payment of the taxes. 
  2.15     Sec. 2.  [469.211] [AUTHORITY TO ABATE.] 
  2.16     (a) The governing body of a governmental subdivision may 
  2.17  enter into a written property tax abatement agreement with a 
  2.18  taxpayer.  The agreement may provide for an abatement of up to 
  2.19  50 percent of the portion of each year's eligible tax which is 
  2.20  levied by the governmental subdivision.  The maximum term of the 
  2.21  abatement agreement is three years. 
  2.22     (b) If the taxpayer is not the owner of the eligible 
  2.23  property, the agreement must require that the entire property 
  2.24  tax abatement, for each payable year covered by the agreement, 
  2.25  be given to the taxpayer and not to the owner of the property. 
  2.26     (c) An existing abatement agreement may be terminated, 
  2.27  extended, or otherwise modified during its term; however, any 
  2.28  change to the terms or conditions of an abatement agreement, 
  2.29  except for the correction of transcription or other errors of a 
  2.30  clerical nature, must be treated under sections 469.21 to 
  2.31  469.217 as if the modified agreement were a new agreement. 
  2.32     (d) Abatement agreements executed before September 1 of an 
  2.33  assessment year may be effective beginning with property taxes 
  2.34  payable in the subsequent year.  Abatement agreements executed 
  2.35  on or after September 1 in an assessment year may be effective 
  2.36  no sooner than for property taxes payable in the second 
  3.1   subsequent year. 
  3.2      Sec. 3.  [469.212] [PROCEDURES FOR ABATEMENT.] 
  3.3      Subdivision 1.  [RESOLUTION OF GOVERNING BODY.] The 
  3.4   governing body of a governmental subdivision may not enter into 
  3.5   an abatement agreement under section 469.211 until it has 
  3.6   adopted a resolution in support of the proposed agreement.  The 
  3.7   resolution must contain a statement that the governing body 
  3.8   expects the benefits to the governmental subdivision of the 
  3.9   proposed abatement agreement to at least equal the costs to the 
  3.10  governmental subdivision of the proposed agreement.  The 
  3.11  resolution must also include a specific statement as to the 
  3.12  nature and extent of the public benefits which the governing 
  3.13  body expects to result from the agreement.  
  3.14     Subd. 2.  [PUBLIC MEETING.] The governing body of a 
  3.15  governmental subdivision may not vote on a resolution in support 
  3.16  of a proposed abatement agreement until the proposed agreement 
  3.17  is discussed at a public meeting of the governing body.  The 
  3.18  contents of an adopted resolution must not differ materially 
  3.19  from the terms of the proposed agreement, as those terms were 
  3.20  presented at the public meeting during which the proposed 
  3.21  agreement was discussed.  During the meeting to discuss a 
  3.22  proposed agreement, the governing body shall hear comments 
  3.23  regarding the proposed agreement, allow the public to ask 
  3.24  questions about the proposed agreement, and explain the reasons 
  3.25  for the proposed agreement.  Opportunity to make comments and 
  3.26  ask questions must be granted to all residents of the 
  3.27  governmental subdivision and to all other interested persons.  
  3.28  Other official business may be conducted at the meeting.  Notice 
  3.29  of the opportunity to comment on the proposed agreement must be 
  3.30  published in a newspaper of general circulation in the 
  3.31  governmental subdivision, at least twice, once each in 
  3.32  successive weeks, and in no event may a required notice be 
  3.33  published less than ten days nor more than 30 days before the 
  3.34  date of the meeting.  The newspaper selected must be one of 
  3.35  general interest and readership in the community, and not one of 
  3.36  limited subject matter.  The notice must appear in a newspaper 
  4.1   that is published at least once per week.  The notice must not 
  4.2   be placed in the part of the newspaper where legal notices and 
  4.3   classified advertisements appear. 
  4.4      Subd. 3.  [ADOPTION OF ABATEMENT.] Upon adoption of the 
  4.5   resolution of abatement, the governing body shall notify the 
  4.6   county auditor and the county assessor of the amount and terms 
  4.7   of the abatement agreement.  
  4.8      Sec. 4.  [469.213] [LIMITATION ON ABATEMENTS.] 
  4.9      The amount of abatements granted by the governmental 
  4.10  subdivision under sections 469.21 to 469.217 may not exceed five 
  4.11  percent of the current levy excluding any current levy for 
  4.12  abatements.  Additional abatements in a subsequent year may not 
  4.13  exceed the greater of 110 percent of the abatements in the 
  4.14  current year, or $100,000. 
  4.15     Sec. 5.  [469.214] [TAX ABATEMENT AMOUNT.] 
  4.16     The county assessor shall determine and certify to the 
  4.17  county auditor the market value of improvements to be abated by 
  4.18  the agreement under section 469.211.  The county auditor shall 
  4.19  calculate the tax abatement amount. 
  4.20     Sec. 6.  [469.215] [PROPOSED AND FINAL PROPERTY TAX 
  4.21  STATEMENTS.] 
  4.22     For purposes of determining the eligible property's taxes 
  4.23  on the proposed property tax statement under section 275.065, 
  4.24  the amount shown will be the amount before the deduction of the 
  4.25  tax abatement under section 469.211.  The property taxes shown 
  4.26  on the final property tax statement shall reflect both the taxes 
  4.27  before and after the tax abatement granted under section 
  4.28  469.211.  The amount of the abatement must be identified as 
  4.29  "local property tax credit." 
  4.30     Sec. 7.  [469.216] [DETERMINATION OF GOVERNMENTAL 
  4.31  SUBDIVISION'S TAX RATE.] 
  4.32     The governmental subdivision's proposed and final tax rates 
  4.33  shall be determined by dividing the certified levy by the total 
  4.34  taxable net tax capacity, without regard to any abatements 
  4.35  granted under section 469.211. 
  4.36     Sec. 8.  [469.217] [PROPERTY LOCATED IN TAX INCREMENT 
  5.1   FINANCING DISTRICTS.] 
  5.2      The governing body of a governmental subdivision may not 
  5.3   enter into a property tax abatement agreement under sections 
  5.4   469.21 to 469.216, if: 
  5.5      (1) the property is located in a tax increment financing 
  5.6   district; 
  5.7      (2) bonds, secured by increments from the tax increment 
  5.8   financing district, are outstanding; and 
  5.9      (3) the governing body of the municipality, as defined in 
  5.10  section 469.174, does not consent in writing to the abatement 
  5.11  agreement. 
  5.12     Sec. 9.  [EFFECTIVE DATE.] 
  5.13     Sections 1 to 8 are effective the day following final 
  5.14  enactment for property taxes payable in 1998 and thereafter.