Bill Text: MN SF1459 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Tax increment financing (TIF) substandard buildings determinations modifications
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2011-05-21 - Referred to Taxes [SF1459 Detail]
Download: Minnesota-2011-SF1459-Introduced.html
1.2relating to taxation; modifying determinations of substandard buildings
1.3for redevelopment districts and renewal and renovation districts in the tax
1.4increment financing law;amending Minnesota Statutes 2010, sections 469.174,
1.5subdivisions 10, 10a; 469.176, subdivision 4j.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2010, section 469.174, subdivision 10, is amended to
1.8read:
1.9 Subd. 10. Redevelopment district. (a) "Redevelopment district" means a type of
1.10tax increment financing district consisting of a project, or portions of a project, within
1.11which the authority finds by resolution that one or more of the following conditions,
1.12reasonably distributed throughout the district, exists:
1.13 (1) parcels consisting of 70 percent of the area of the district are occupied by
1.14buildings, streets, utilities, paved or gravel parking lots, or other similar structures
1.15and more than 50 percent of the buildings, not including outbuildings, arestructurally
1.16substandardto a degree requiring substantial renovation or clearance buildings;
1.17 (2) the property consists of vacant, unused, underused, inappropriately used, or
1.18infrequently used rail yards, rail storage facilities, or excessive or vacated railroad
1.19rights-of-way;
1.20 (3) tank facilities, or property whose immediately previous use was for tank
1.21facilities, as defined in section115C.02, subdivision 15 , if the tank facilities:
1.22 (i) have or had a capacity of more than 1,000,000 gallons;
1.23 (ii) are located adjacent to rail facilities; and
1.24 (iii) have been removed or are unused, underused, inappropriately used, or
1.25infrequently used; or
2.1 (4) a qualifying disaster area, as defined in subdivision 10b.
2.2 (b) For purposes of this subdivision, "structurally substandard building" shall mean
2.3containing means a building that satisfies the conditions in either clause (1) or (2):
2.4(1) the building both:
2.5(i) fails to comply with the building code applicable to new buildings, and the
2.6modifications necessary to satisfy the building code applicable to new buildings would
2.7cost at least 15 percent of the cost of constructing a new structure of the same square
2.8footage and type on the site; and
2.9(ii) is characterized by at least one of the following factors:
2.10(A) the building contains defects in structural elements or a combination of
2.11deficiencies in essential utilities and facilities, light and ventilation, fire protection
2.12including adequate egress, layout and condition of interior partitions, or similar factors,
2.13which defects or deficiencies are of sufficient total significance to justify substantial
2.14renovation or clearance.;
2.15(c) A building is not structurally substandard if it is in compliance with the building
2.16code applicable to new buildings or could be modified to satisfy the building code at a
2.17cost of less than 15 percent of the cost of constructing a new structure of the same square
2.18footage and type on the site.
2.19(B) property taxes or special assessments have been delinquent for at least two years;
2.20(C) the assessor's market value of the property has declined to a greater extent than
2.21the average percentage declines for the same property class in either the municipality or
2.22the county where the property is located; or
2.23(D) the building has a vacancy rate higher than the average vacancy rate for all
2.24properties in the same property class in either the municipality or the county where the
2.25property is located; and
2.26(2) the building has been substantially unoccupied or unused for any commercial,
2.27industrial, or residential purpose for a least one year by a person with the legal or equitable
2.28right to occupy the property.
2.29(c) The municipality may find that a building isnot disqualified as structurally
2.30a substandard building underthe preceding sentence paragraph (b) on the basis of
2.31reasonably available evidence, such as the size, type, and age of the building, the average
2.32cost of plumbing, electrical, or structural repairs, or other similar reliable evidence.The
2.33municipality may not make such a determination Failure to comply with energy codes
2.34may be taken into account in the analysis under paragraph (b), clause (1), item (i), but
2.35may not be the basis for a finding under paragraph (b), clause (1), item (ii), subitem (A).
2.36Except in the case of a finding based on paragraph (b), clause (2), the municipality may
3.1not find that a building is a substandard building without an interior inspection of the
3.2property, but need not have an independent, expert appraisal prepared of the cost of repair
3.3and rehabilitation of the building. An interior inspection of the property is not required,
3.4if the municipality finds that (1) the municipality or authority is unable to gain access to
3.5the property after using its best efforts to obtain permission from the party that owns or
3.6controls the property; and (2) the evidence otherwise supports a reasonable conclusion
3.7that the building isstructurally a substandard building as defined in this subdivision.
3.8Items of evidence that support such a conclusion include recent fire or police inspections,
3.9on-site property tax appraisals or housing inspections, exterior evidence of deterioration,
3.10or other similar reliable evidence. Written documentation of the findings and reasons
3.11why an interior inspection was not conducted must be made and retained under section
3.12469.175, subdivision 3
, clause (1). Failure of a building to be disqualified under the
3.13provisions of this paragraph is a necessary, but not a sufficient, condition to determining
3.14that the building is substandard.
3.15 (d) A parcel is deemed to be occupied by astructurally substandard building
3.16for purposes of the finding under paragraph (a) or by the improvements described in
3.17paragraph (e) if all of the following conditions are met:
3.18 (1) the parcel was occupied by a substandard building or met the requirements
3.19of paragraph (e), as the case may be, within three years of the filing of the request for
3.20certification of the parcel as part of the district with the county auditor;
3.21 (2) the substandard building or the improvements described in paragraph (e) were
3.22demolished or removed by the authority or the demolition or removal was financed by the
3.23authority or was done by a developer under a development agreement with the authority;
3.24 (3) the authority found by resolution before the demolition or removal that the
3.25parcel was occupied by astructurally substandard building or met the requirements of
3.26paragraph (e) and that after demolition and clearance the authority intended to include
3.27the parcel within a district; and
3.28 (4) upon filing the request for certification of the tax capacity of the parcel as part
3.29of a district, the authority notifies the county auditor that the original tax capacity of the
3.30parcel must be adjusted as provided by section469.177, subdivision 1 , paragraph (f).
3.31 (e) For purposes of this subdivision, a parcel is not occupied by buildings, streets,
3.32utilities, paved or gravel parking lots, or other similar structures unless 15 percent of the
3.33area of the parcel contains buildings, streets, utilities, paved or gravel parking lots, or
3.34other similar structures.
4.1 (f) For districts consisting of two or more noncontiguous areas, each area must
4.2qualify as a redevelopment district under paragraph (a) to be included in the district, and
4.3the entire area of the district must satisfy paragraph (a).
4.4EFFECTIVE DATE.This section is effective for districts for which certification
4.5was requested after the date of final enactment of this act.
4.6 Sec. 2. Minnesota Statutes 2010, section 469.174, subdivision 10a, is amended to read:
4.7 Subd. 10a. Renewal and renovation district. (a) "Renewal and renovation district"
4.8means a type of tax increment financing district consisting of a project, or portions of a
4.9project, within which the authority finds by resolution that:
4.10 (1)(i) parcels consisting of 70 percent of the area of the district are occupied by
4.11buildings, streets, utilities, paved or gravel parking lots, or other similar structures; (ii)
4.1220 percent of the buildings arestructurally substandard buildings; and (iii) 30 percent
4.13of the other buildings require substantial renovation or clearance to remove existing
4.14conditions such as: inadequate street layout, incompatible uses or land use relationships,
4.15overcrowding of buildings on the land, excessive dwelling unit density, obsolete buildings
4.16not suitable for improvement or conversion, or other identified hazards to the health,
4.17safety, and general well-being of the community; and
4.18 (2) the conditions described in clause (1) are reasonably distributed throughout the
4.19geographic area of the district.
4.20 (b) For purposes of determining whether a building isstructurally a substandard
4.21building, whether parcels are occupied by buildings, streets, utilities, paved or gravel
4.22parking lots, or other similar structures, or whether noncontiguous areas qualify, the
4.23provisions of subdivision 10, paragraphs (b) through (f), apply.
4.24EFFECTIVE DATE.This section is effective for districts for which certification
4.25was requested after the date of final enactment of this act.
4.26 Sec. 3. Minnesota Statutes 2010, section 469.176, subdivision 4j, is amended to read:
4.27 Subd. 4j. Redevelopment districts. At least 90 percent of the revenues derived
4.28from tax increments from a redevelopment district or renewal and renovation district
4.29must be used to finance the cost of correcting conditions that allow designation of
4.30redevelopment and renewal and renovation districts under section469.174 . These costs
4.31include, but are not limited to, acquiring properties containingstructurally substandard
4.32buildings or improvements or hazardous substances, pollution, or contaminants, acquiring
4.33adjacent parcels necessary to provide a site of sufficient size to permit development,
5.1demolition and rehabilitation of structures, clearing of the land, the removal of hazardous
5.2substances or remediation necessary to development of the land, and installation of
5.3utilities, roads, sidewalks, and parking facilities for the site. The allocated administrative
5.4expenses of the authority, including the cost of preparation of the development action
5.5response plan, may be included in the qualifying costs.
5.6EFFECTIVE DATE.This section is effective for districts for which certification
5.7was requested after the date of final enactment of this act.
1.3for redevelopment districts and renewal and renovation districts in the tax
1.4increment financing law;amending Minnesota Statutes 2010, sections 469.174,
1.5subdivisions 10, 10a; 469.176, subdivision 4j.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2010, section 469.174, subdivision 10, is amended to
1.8read:
1.9 Subd. 10. Redevelopment district. (a) "Redevelopment district" means a type of
1.10tax increment financing district consisting of a project, or portions of a project, within
1.11which the authority finds by resolution that one or more of the following conditions,
1.12reasonably distributed throughout the district, exists:
1.13 (1) parcels consisting of 70 percent of the area of the district are occupied by
1.14buildings, streets, utilities, paved or gravel parking lots, or other similar structures
1.15and more than 50 percent of the buildings, not including outbuildings, are
1.16substandard
1.17 (2) the property consists of vacant, unused, underused, inappropriately used, or
1.18infrequently used rail yards, rail storage facilities, or excessive or vacated railroad
1.19rights-of-way;
1.20 (3) tank facilities, or property whose immediately previous use was for tank
1.21facilities, as defined in section
1.22 (i) have or had a capacity of more than 1,000,000 gallons;
1.23 (ii) are located adjacent to rail facilities; and
1.24 (iii) have been removed or are unused, underused, inappropriately used, or
1.25infrequently used; or
2.1 (4) a qualifying disaster area, as defined in subdivision 10b.
2.2 (b) For purposes of this subdivision, "
2.3
2.4(1) the building both:
2.5(i) fails to comply with the building code applicable to new buildings, and the
2.6modifications necessary to satisfy the building code applicable to new buildings would
2.7cost at least 15 percent of the cost of constructing a new structure of the same square
2.8footage and type on the site; and
2.9(ii) is characterized by at least one of the following factors:
2.10(A) the building contains defects in structural elements or a combination of
2.11deficiencies in essential utilities and facilities, light and ventilation, fire protection
2.12including adequate egress, layout and condition of interior partitions, or similar factors,
2.13which defects or deficiencies are of sufficient total significance to justify substantial
2.14renovation or clearance
2.15
2.16
2.17
2.18
2.19(B) property taxes or special assessments have been delinquent for at least two years;
2.20(C) the assessor's market value of the property has declined to a greater extent than
2.21the average percentage declines for the same property class in either the municipality or
2.22the county where the property is located; or
2.23(D) the building has a vacancy rate higher than the average vacancy rate for all
2.24properties in the same property class in either the municipality or the county where the
2.25property is located; and
2.26(2) the building has been substantially unoccupied or unused for any commercial,
2.27industrial, or residential purpose for a least one year by a person with the legal or equitable
2.28right to occupy the property.
2.29(c) The municipality may find that a building is
2.30a substandard building under
2.31reasonably available evidence, such as the size, type, and age of the building, the average
2.32cost of plumbing, electrical, or structural repairs, or other similar reliable evidence.
2.33
2.34may be taken into account in the analysis under paragraph (b), clause (1), item (i), but
2.35may not be the basis for a finding under paragraph (b), clause (1), item (ii), subitem (A).
2.36Except in the case of a finding based on paragraph (b), clause (2), the municipality may
3.1not find that a building is a substandard building without an interior inspection of the
3.2property, but need not have an independent, expert appraisal prepared of the cost of repair
3.3and rehabilitation of the building. An interior inspection of the property is not required,
3.4if the municipality finds that (1) the municipality or authority is unable to gain access to
3.5the property after using its best efforts to obtain permission from the party that owns or
3.6controls the property; and (2) the evidence otherwise supports a reasonable conclusion
3.7that the building is
3.8Items of evidence that support such a conclusion include recent fire or police inspections,
3.9on-site property tax appraisals or housing inspections, exterior evidence of deterioration,
3.10or other similar reliable evidence. Written documentation of the findings and reasons
3.11why an interior inspection was not conducted must be made and retained under section
3.13
3.14
3.15 (d) A parcel is deemed to be occupied by a
3.16for purposes of the finding under paragraph (a) or by the improvements described in
3.17paragraph (e) if all of the following conditions are met:
3.18 (1) the parcel was occupied by a substandard building or met the requirements
3.19of paragraph (e), as the case may be, within three years of the filing of the request for
3.20certification of the parcel as part of the district with the county auditor;
3.21 (2) the substandard building or the improvements described in paragraph (e) were
3.22demolished or removed by the authority or the demolition or removal was financed by the
3.23authority or was done by a developer under a development agreement with the authority;
3.24 (3) the authority found by resolution before the demolition or removal that the
3.25parcel was occupied by a
3.26paragraph (e) and that after demolition and clearance the authority intended to include
3.27the parcel within a district; and
3.28 (4) upon filing the request for certification of the tax capacity of the parcel as part
3.29of a district, the authority notifies the county auditor that the original tax capacity of the
3.30parcel must be adjusted as provided by section
3.31 (e) For purposes of this subdivision, a parcel is not occupied by buildings, streets,
3.32utilities, paved or gravel parking lots, or other similar structures unless 15 percent of the
3.33area of the parcel contains buildings, streets, utilities, paved or gravel parking lots, or
3.34other similar structures.
4.1 (f) For districts consisting of two or more noncontiguous areas, each area must
4.2qualify as a redevelopment district under paragraph (a) to be included in the district, and
4.3the entire area of the district must satisfy paragraph (a).
4.4EFFECTIVE DATE.This section is effective for districts for which certification
4.5was requested after the date of final enactment of this act.
4.6 Sec. 2. Minnesota Statutes 2010, section 469.174, subdivision 10a, is amended to read:
4.7 Subd. 10a. Renewal and renovation district. (a) "Renewal and renovation district"
4.8means a type of tax increment financing district consisting of a project, or portions of a
4.9project, within which the authority finds by resolution that:
4.10 (1)(i) parcels consisting of 70 percent of the area of the district are occupied by
4.11buildings, streets, utilities, paved or gravel parking lots, or other similar structures; (ii)
4.1220 percent of the buildings are
4.13of the other buildings require substantial renovation or clearance to remove existing
4.14conditions such as: inadequate street layout, incompatible uses or land use relationships,
4.15overcrowding of buildings on the land, excessive dwelling unit density, obsolete buildings
4.16not suitable for improvement or conversion, or other identified hazards to the health,
4.17safety, and general well-being of the community; and
4.18 (2) the conditions described in clause (1) are reasonably distributed throughout the
4.19geographic area of the district.
4.20 (b) For purposes of determining whether a building is
4.21building, whether parcels are occupied by buildings, streets, utilities, paved or gravel
4.22parking lots, or other similar structures, or whether noncontiguous areas qualify, the
4.23provisions of subdivision 10, paragraphs (b) through (f), apply.
4.24EFFECTIVE DATE.This section is effective for districts for which certification
4.25was requested after the date of final enactment of this act.
4.26 Sec. 3. Minnesota Statutes 2010, section 469.176, subdivision 4j, is amended to read:
4.27 Subd. 4j. Redevelopment districts. At least 90 percent of the revenues derived
4.28from tax increments from a redevelopment district or renewal and renovation district
4.29must be used to finance the cost of correcting conditions that allow designation of
4.30redevelopment and renewal and renovation districts under section
4.31include, but are not limited to, acquiring properties containing
4.32buildings or improvements or hazardous substances, pollution, or contaminants, acquiring
4.33adjacent parcels necessary to provide a site of sufficient size to permit development,
5.1demolition and rehabilitation of structures, clearing of the land, the removal of hazardous
5.2substances or remediation necessary to development of the land, and installation of
5.3utilities, roads, sidewalks, and parking facilities for the site. The allocated administrative
5.4expenses of the authority, including the cost of preparation of the development action
5.5response plan, may be included in the qualifying costs.
5.6EFFECTIVE DATE.This section is effective for districts for which certification
5.7was requested after the date of final enactment of this act.
