SF 3089

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; modifying the property tax abatement process as it applies
to certain electric generating facilities; amending Minnesota Statutes 2004,
sections 116J.993, subdivision 3; 469.1813, subdivisions 1, 6b, 8, 9, by adding a
subdivision; Minnesota Statutes 2005 Supplement, section 469.1813, subdivision
6.

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

Section 1.

Minnesota Statutes 2004, section 116J.993, subdivision 3, is amended to
read:

Subd. 3.

Business subsidy.

"Business subsidy" or "subsidy" means a state or local
government agency grant, contribution of personal property, real property, infrastructure,
the principal amount of a loan at rates below those commercially available to the recipient,
any reduction or deferral of any tax or any fee, any guarantee of any payment under any
loan, lease, or other obligation, or any preferential use of government facilities given
to a business.

The following forms of financial assistance are not a business subsidy:

(1) a business subsidy of less than $25,000;

(2) assistance that is generally available to all businesses or to a general class of
similar businesses, such as a line of business, size, location, or similar general criteria;

(3) public improvements to buildings or lands owned by the state or local
government that serve a public purpose and do not principally benefit a single business or
defined group of businesses at the time the improvements are made;

(4) redevelopment property polluted by contaminants as defined in section 116J.552,
subdivision 3;

(5) assistance provided for the sole purpose of renovating old or decaying building
stock or bringing it up to code and assistance provided for designated historic preservation
districts, provided that the assistance is equal to or less than 50 percent of the total cost;

(6) assistance to provide job readiness and training services if the sole purpose of
the assistance is to provide those services;

(7) assistance for housing;

(8) assistance for pollution control or abatement, including assistance for a tax
increment financing hazardous substance subdistrict as defined under section 469.174,
subdivision 23;

(9) assistance for energy conservation;

(10) tax reductions resulting from conformity with federal tax law;

(11) workers' compensation and unemployment insurance;

(12) benefits derived from regulation;

(13) indirect benefits derived from assistance to educational institutions;

(14) funds from bonds allocated under chapter 474A, bonds issued to refund
outstanding bonds, and bonds issued for the benefit of an organization described in section
501(c)(3) of the Internal Revenue Code of 1986, as amended through December 31, 1999;

(15) assistance for a collaboration between a Minnesota higher education institution
and a business;

(16) assistance for a tax increment financing soils condition district as defined under
section 469.174, subdivision 19;

(17) redevelopment when the recipient's investment in the purchase of the site
and in site preparation is 70 percent or more of the assessor's current year's estimated
market value;

(18) general changes in tax increment financing law and other general tax law
changes of a principally technical nature;

(19) federal assistance until the assistance has been repaid to, and reinvested by, the
state or local government agency;

(20) funds from dock and wharf bonds issued by a seaway port authority;

(21) business loans and loan guarantees of $75,000 or less; deleted text begin and
deleted text end

(22) federal loan funds provided through the United States Department of
Commerce, Economic Development Administration new text begin ; and
new text end

new text begin (23) property tax abatements granted under section 469.1813 new text end .

Sec. 2.

Minnesota Statutes 2004, section 469.1813, subdivision 1, is amended to read:

Subdivision 1.

Authority.

The governing body of a political subdivision may grant
deleted text begin an deleted text end new text begin a current or prospective new text end abatement new text begin , by contract or otherwise, new text end of the taxes imposed by
the political subdivision on a parcel of property, new text begin which may include personal property
and machinery, new text end or defer the payments of the taxes and abate the interest and penalty
that otherwise would apply, if:

deleted text begin (a) deleted text end new text begin (1) new text end it expects the benefits to the political subdivision of the proposed abatement
agreement to at least equal the costs to the political subdivision of the proposed agreement
or intends the abatement to phase in a property tax increase, as provided in clause (b)(7);
and

deleted text begin (b) deleted text end new text begin (2) new text end it finds that doing so is in the public interest because it will:

deleted text begin (1) deleted text end new text begin (i) new text end increase or preserve tax base;

deleted text begin (2) deleted text end new text begin (ii) new text end provide employment opportunities in the political subdivision;

deleted text begin (3) deleted text end new text begin (iii) new text end provide or help acquire or construct public facilities;

deleted text begin (4) deleted text end new text begin (iv) new text end help redevelop or renew blighted areas;

deleted text begin (5) deleted text end new text begin (v) new text end help provide access to services for residents of the political subdivision;

deleted text begin (6) deleted text end new text begin (vi) new text end finance or provide public infrastructure; deleted text begin or
deleted text end

deleted text begin (7) deleted text end new text begin (vii) new text end phase in a property tax increase on the parcel resulting from an increase of
50 percent or more in one year on the estimated market value of the parcel, other than
increase attributable to improvement of the parcel new text begin ; or
new text end

new text begin (viii) stabilize the tax base through equalization of property tax revenues for a
specified period of time with respect to a taxpayer whose real and personal property is
subject to valuation under Minnesota Rules, chapter 8100 new text end .

Sec. 3.

Minnesota Statutes 2005 Supplement, section 469.1813, subdivision 6, is
amended to read:

Subd. 6.

Duration limit.

(a) A political subdivision may grant an abatement for a
period no longer than 15 years, except as provided under paragraph (b). new text begin The abatement
period will commence in the first year in which the abatement granted is either paid or
retained in accordance with section 469.1815, subdivision 2. new text end The subdivision may specify
in the abatement resolution a shorter duration. If the resolution does not specify a period
of time, the abatement is for eight years. If an abatement has been granted to a parcel of
property and the period of the abatement has expired, the political subdivision that granted
the abatement may not grant another abatement for eight years after the expiration of the
first abatement. This prohibition does not apply to improvements added after and not
subject to the first abatement. new text begin Economic abatement agreements for real and personal
property subject to valuation under Minnesota Rules, chapter 8100, are not subject to this
prohibition and may be granted successively.
new text end

(b) A political subdivision proposing to abate taxes for a parcel may request, in
writing, that the other political subdivisions in which the parcel is located grant an
abatement for the property. If one of the other political subdivisions declines, in writing,
to grant an abatement or if 90 days pass after receipt of the request to grant an abatement
without a written response from one of the political subdivisions, the duration limit
for an abatement for the parcel by the requesting political subdivision and any other
participating political subdivision is increased to 20 years. If the political subdivision
which declined to grant an abatement later grants an abatement for the parcel, the 20-year
duration limit is reduced by one year for each year that the declining political subdivision
grants an abatement for the parcel during the period of the abatement granted by the
requesting political subdivision. The duration limit may not be reduced below the limit
under paragraph (a).

Sec. 4.

Minnesota Statutes 2004, section 469.1813, subdivision 6b, is amended to read:

Subd. 6b.

Extended duration limit.

(a) Notwithstanding the provisions of
subdivision 6, a political subdivision may grant an abatement for a period of up to 20
years, if the abatement is for a qualified business.

(b) To be a qualified business for purposes of this subdivision, at least 50 percent of
the payroll of the operations of the business that qualify for the abatement must be for
employees engaged in one of the following lines of business or any combination of them:

(1) manufacturing;

(2) agricultural processing;

(3) mining;

(4) research and development;

(5) warehousing; or

(6) qualified high technology.

new text begin Alternatively, a qualified business also includes a taxpayer whose real and personal
property is subject to valuation under Minnesota Rules, chapter 8100.
new text end

(c)(1) "Manufacturing" means the material staging and production of tangible
personal property by procedures commonly regarded as manufacturing, processing,
fabrication, or assembling which changes some existing material into new shapes, new
qualities, or new combinations.

(2) "Mining" has the meaning given in section 613(c) of the Internal Revenue Code
of 1986.

(3) "Agricultural processing" means transforming, packaging, sorting, or grading
livestock or livestock products, agricultural commodities, or plants or plant products into
goods that are used for intermediate or final consumption including goods for nonfood use.

(4) "Research and development" means qualified research as defined in section
41(d) of the Internal Revenue Code of 1986.

(5) "Qualified high technology" means one or more of the following activities:

(i) advanced computing, which is any technology used in the design and
development of any of the following:

(A) computer hardware and software;

(B) data communications; and

(C) information technologies;

(ii) advanced materials, which are materials with engineered properties created
through the development of specialized process and synthesis technology;

(iii) biotechnology, which is any technology that uses living organisms, cells,
macromolecules, microorganisms, or substances from living organisms to make or modify
a product, improve plants or animals, or develop microorganisms for useful purposes;

(iv) electronic device technology, which is any technology that involves
microelectronics, semiconductors, electronic equipment, and instrumentation, radio
frequency, microwave, and millimeter electronics, and optical and optic-electrical devices,
or data and digital communications and imaging devices;

(v) engineering or laboratory testing related to the development of a product;

(vi) technology that assists in the assessment or prevention of threats or damage to
human health or the environment, including, but not limited to, environmental cleanup
technology, pollution prevention technology, or development of alternative energy sources;

(vii) medical device technology, which is any technology that involves medical
equipment or products other than a pharmaceutical product that has therapeutic or
diagnostic value and is regulated; or

(viii) advanced vehicles technology which is any technology that involves electric
vehicles, hybrid vehicles, or alternative fuel vehicles, or components used in the
construction of electric vehicles, hybrid vehicles, or alternative fuel vehicles. An electric
vehicle is a road vehicle that draws propulsion energy only from an on-board source of
electrical energy. A hybrid vehicle is a road vehicle that can draw propulsion energy from
both a consumable fuel and a rechargeable energy storage system.

(d) The authority to grant new abatements under this subdivision expires on July 1,
2004 new text begin , except that the authority to grant new abatements for real and personal property
subject to valuation under Minnesota Rules, chapter 8100, does not expire new text end .

Sec. 5.

Minnesota Statutes 2004, section 469.1813, subdivision 8, is amended to read:

Subd. 8.

Limitation on abatements.

In any year, the total amount of property taxes
abated by a political subdivision under this section may not exceed (1) ten percent of
the current levy, or (2) $200,000, whichever is greater. The limit under this subdivision
does not apply to new text begin :
new text end

new text begin (1) new text end an uncollected abatement from a prior year that is added to the abatement levy new text begin ; or
new text end

new text begin (2) a taxpayer whose real and personal property is subject to valuation under
Minnesota Rules, chapter 8100 new text end .

Sec. 6.

Minnesota Statutes 2004, section 469.1813, subdivision 9, is amended to read:

Subd. 9.

Consent of property owner not required.

A political subdivision may
abate the taxes on a parcel under sections 469.1812 to 469.1815 without obtaining the
consent of the property owner. new text begin This subdivision does not apply to abatements granted to a
taxpayer whose real and personal property is valued under Minnesota Rules, chapter 8100. new text end

Sec. 7.

Minnesota Statutes 2004, section 469.1813, is amended by adding a subdivision
to read:

new text begin Subd. 10. new text end

new text begin Applicability to utility properties. new text end

new text begin When this statute is applied or
utilized with respect to a taxpayer whose real and personal property is subject to valuation
under Minnesota Rules, chapter 8100, the provisions of this section and sections 469.1814
and 469.1815 shall apply only to property specified or described in the abatement contract
or agreement.
new text end

Sec. 8. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 7 are effective for abatements granted after June 30, 2006.
new text end