2002 Minnesota Statutes

     469.1813 Abatement authority. 

    Subdivision 1.    Authority.  The governing body of a 
 political subdivision may grant an abatement of the taxes 
 imposed by the political subdivision on a parcel of property, or 
 defer the payments of the taxes and abate the interest and 
 penalty that otherwise would apply, if: 

    (a) 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 

    (b) it finds that doing so is in the public interest 
 because it will: 

    (1) increase or preserve tax base; 

    (2) provide employment opportunities in the political 
 subdivision; 

    (3) provide or help acquire or construct public facilities; 

    (4) help redevelop or renew blighted areas; 

    (5) help provide access to services for residents of the 
 political subdivision; 

    (6) finance or provide public infrastructure; or 

    (7) 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. 

    Subd. 1a.    Use of term.  As used in this section and 
 sections 469.1814 and 469.1815, "abatement" includes a deferral 
 of taxes with abatement of interest and penalties unless the 
 context indicates otherwise. 

    Subd. 2.    Abatement resolution.  (a) The governing 
 body of a political subdivision may grant an abatement only by 
 adopting an abatement resolution, specifying the terms of the 
 abatement.  In the case of a town, the board of supervisors may 
 approve the abatement resolution.  The resolution must also 
 include a specific statement as to the nature and extent of the 
 public benefits which the governing body expects to result from 
 the agreement.  The resolution may provide that the political 
 subdivision will retain or transfer to another political 
 subdivision the abatement to pay for all or part of the cost of 
 acquisition or improvement of public infrastructure, whether or 
 not located on or adjacent to the parcel for which the tax is 
 abated.  The abatement may reduce all or part of the property 
 tax amount for the political subdivision on the parcel.  A 
 political subdivision's maximum annual amount for a parcel 
 equals its total local tax rate multiplied by the total net tax 
 capacity of the parcel. 

    (b) The political subdivision may limit the abatement: 

    (1) to a specific dollar amount per year or in total; 

    (2) to the increase in property taxes resulting from 
 improvement of the property; 

    (3) to the increases in property taxes resulting from 
 increases in the market value or tax capacity of the property; 

    (4) in any other manner the governing body of the 
 subdivision determines is appropriate; or 

    (5) to the interest and penalty that would otherwise be due 
 on taxes that are deferred. 

    (c) The political subdivision may not abate tax 
 attributable to the areawide tax under chapter 276A or 473F, 
 except as provided in this subdivision. 

    Subd. 3.    School district abatements.  An abatement 
 granted under this section is not an abatement for purposes of 
 state aid or local levy under sections 127A.40 to 127A.51. 

    Subd. 4.    Property located in tax increment financing 
 districts.  The governing body of a political subdivision may 
 not enter into a property tax abatement agreement under sections 
 469.1812 to 469.1815 that provides for abatement of taxes on a 
 parcel, if the abatement will occur while the parcel is located 
 in a tax increment financing district. 

    Subd. 5.    Notice and public hearing.  (a) The 
 governing body of the political subdivision may approve an 
 abatement under sections 469.1812 to 469.1815 only after holding 
 a public hearing on the abatement. 

    (b) Notice of the hearing must be published in a newspaper 
 of general circulation in the political subdivision at least 
 once more than ten days but less than 30 days before the 
 hearing.  The newspaper must be one of general interest and 
 readership in the community, and not one of limited subject 
 matter.  The newspaper must be published at least once per 
 week.  The notice must indicate that the governing body will 
 consider granting a property tax abatement, identify the 
 property or properties for which an abatement is under 
 consideration, and the total estimated amount of the abatement. 

    Subd. 6.    Duration limit.  (a) A political subdivision 
 may grant an abatement for a period no longer than ten years, 
 except as provided under paragraph (b).  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. 

    (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 15 years.  If the political 
 subdivision which declined to grant an abatement later grants an 
 abatement for the parcel, the 15-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).  

    Subd. 6a.    Deferment payment schedule.  When the tax 
 is deferred and the interest and penalty abated, the political 
 subdivision must set a schedule for repayments.  The deferred 
 payment must be included with the current taxes due and payable 
 in the years the deferred payments are due and payable and must 
 be levied accordingly. 

    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. 

    (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.  

    Subd. 7.    Review and modification of abatements.  The 
 political subdivision may provide in the abatement resolution 
 that the abatement may not be modified or changed during its 
 term.  If the abatement resolution does not provide that the 
 abatement may not be modified or changed, the governing body of 
 the political subdivision may review and modify the abatement 
 every second year after it was approved. 

    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) five percent of the 
 current levy, or (2) $100,000, whichever is greater. 

    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. 

    HIST: 1997 c 231 art 2 s 46; 1998 c 397 art 11 s 3; 1999 c 243 
 art 10 s 8-14; 1999 c 248 s 19; 2000 c 490 art 11 s 33-35; 
 1Sp2001 c 5 art 15 s 26; 2002 c 377 art 7 s 5