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CHAPTER 13 - ECONOMIC DEVELOPMENT AND SPECIAL PROGRAMS classification remains the same as when the TIF district was created (with the possible exception of changes taxable/exempt status), A classification change is defined as occurring if the new classification has a different assessment ratio than the previous classification. E2 NOTE The determination of a classification change can be complicated by splits, combinations, new plats, or other similar divisions where the change In classification may not be readily apparent. 4. Exempt to Taxable (M.S. 469.177, subd.1(c)) When a property changes classifications from exempt to taxable, a new base value is established, The value to be used is one of the following: 1, If the six-year exempt report has been produced in the past year, the base value is from that report. 2, If the parcel is not on the six-year exempt report or if the date of transfer making the property taxable is outside of that one year window, the base value is determined by the assessor as of the date of the transfer, 3, If improvements are made to an exempt property after the TIF district is created but before the parcel becomes taxable, the TIF authority may request the assessor to value those improvements separately and the auditor to exclude the value of the new improvements from the new base value, 4. If substantial improvements are made to a parcel after certification of the TIF district by the county auditor and if the parcel becomes exempt as a result of tax forfeiture, or foreclosure or a similar lease or revenue agreement, then the new base value is the base value before the property the property became exempt. 119 NOTE Counties need to be attentive to ownership changes as the process can get interesting if a parcel goes partially taxable or if the portion of the property that is exempt changes from one year to the next or changes from taxable to exempt and back to taxable all within the same year. 5. Taxable to Exempt (M.S, 469,177, subd.1(e)) If a taxable parcel in a TIF district becomes exempt, the new base value becomes zero, Some counties change the base market value to zero and assign an exempt classification - other counties just change the classification to an exempt classification to arrive at a base tax capacity of zero, 6. Tax Adjustments that Affect the Base Year (M.S. 469.177, subd. 1(e)) If a tax court petition or county abatement affects the base year value for a parcel in a TIF district, the change in base value is applied to that year and subsequent tax years. 7. Substandard Buildings (M.S. 469.177, subd. 1(1)) If a parcel contained a substandard building that was removed and the TIF authority chooses to treat the parcel as having been occupied by a substandard building, the auditor assigns a new base TAX INCREMENT FINANCING REVISION DATE: NOVEMBER, 2010 13,01 -18