SF 1397

as introduced - 87th Legislature (2011 - 2012) Posted on 02/23/2012 09:47am

A bill for an act
relating to property taxation; authorizing cities to provide incentive valuation
reductions for certain vacant properties; amending Minnesota Statutes 2010,
section 273.11, by adding a subdivision; proposing coding for new law in
Minnesota Statutes, chapter 469.

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

Section 1.

Minnesota Statutes 2010, section 273.11, is amended by adding a
subdivision to read:

new text begin Subd. 24. new text end

new text begin Leasing incentive for vacant buildings. new text end

new text begin The assessor shall reduce the
estimated market value of a commercial and industrial building qualifying under section
469.1817 as provided under that section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning for property taxes assessed
in 2011 and payable in 2012.
new text end

Sec. 2.

new text begin [469.1817] INCENTIVE FOR LEASING OF VACANT BUILDINGS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms
have the meanings given, unless the context clearly indicates otherwise.
new text end

new text begin (b) "Agency" means the home rule charter or statutory city in which the building
is located or the city's economic development authority to which the city delegates, by
resolution, the authority to act under this section.
new text end

new text begin (c) "Building" means a commercial or industrial building that is subject to property
taxation and that the owner is offering to lease.
new text end

new text begin (d) "Vacant property" means a building classified as class 3a property under section
273.13, subdivision 24, paragraph (a), clause (1), if 50 percent or more of the square
footage of the building has not been occupied during the previous 12-month period. For
purposes of this paragraph, square footage that is leased is considered to be occupied.
new text end

new text begin Subd. 2. new text end

new text begin Findings. new text end

new text begin Prior to authorizing a reduction in value under subdivision 3, the
agency must make the following findings:
new text end

new text begin (1) the building is a vacant property as defined in subdivision 1;
new text end

new text begin (2) the building owner likely will be unable to lease or otherwise put the building to
productive use unless an incentive is provided under subdivision 3;
new text end

new text begin (3) the owner and one or more tenants have entered or will enter into a lease for,
at least, the duration of reduction under subdivision 3 and the lease is conditioned upon
receipt of the incentive under this section; and
new text end

new text begin (4) the incentive will yield net public benefits to the affected taxing jurisdictions.
new text end

new text begin Subd. 3. new text end

new text begin Incentive to lease vacant buildings. new text end

new text begin (a) After determining that the
building meets the requirements of this section and making the findings required in
subdivision 2, the agency may, by resolution, approve a reduction in the estimated market
value of the vacant property of an amount not to exceed the lesser of:
new text end

new text begin (1) 50 percent of the building's estimated market value; or
new text end

new text begin (2) the amount it determines is necessary to successfully lease the vacant portion
of the building.
new text end

new text begin (b) Prior to approval of the incentive under paragraph (a), the agency, building
owner, and tenant shall enter into a development agreement that specifies:
new text end

new text begin (1) the amount of the reduction in estimated market value for each year;
new text end

new text begin (2) the number of years to which the reduction applies;
new text end

new text begin (3) the terms of the lease or leases covering the property; and
new text end

new text begin (4) any other provisions that the agency determines appropriate.
new text end

new text begin (c) The reduction under this section takes effect for the first taxes payable year that
begins six months or more after the agency notifies the assessor of the reduction that
applies under this section.
new text end

new text begin Subd. 4. new text end

new text begin Maximum duration; termination. new text end

new text begin The maximum duration of a valuation
reduction under this section is five property taxes payable years. The valuation reduction
terminates at the end of the earlier of the five-year period or the term provided in the
development agreement.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning for property taxes assessed
in 2011 and payable in 2012.
new text end