Laserfiche WebLink
smi <br />aw <br />3 <br />3 <br />3 <br />3 <br />3 <br />3 <br />3 <br />3 <br />3 <br />3 <br />3 <br />Available Fun 1Sources <br />Tax Abatement <br />(Minnesota Statutes <br />Chapter 469.1812.469 <br />Springsted <br />18 <br />Minnesota Statutes refers to tax abatement as the capture of property taxes. <br />Under Minnesota law, taxes .due on real property subject to tax abatement must <br />.1815) still be paid as due. If tax abatement is'in place, the appropriate portion of the <br />taxes can be captured and applied to development purposes. The captured taxes <br />must be used to offset the costs agreed to under an abatement agreement. Tax <br />abatement revenues can be used to fund eligible expenditures either on a pay - <br />as- you -go basis or to pay annual debt service of general obligation tax <br />abatement bonds. <br />Tax abatement can be used to capture taxes on land and existing buildings as <br />well as new improvements. Limited restrictions exist on the end use and <br />current use of tax abatement. The maximum aggregate amount of abatement for <br />a political subdivision is the greater of 10% of the current tax levy or $200,000. <br />Examples of the use of tax abatement include, but are not limited to: <br />• Commercial <br />• Retail <br />• Industrial <br />Cities, counties, towns, and school districts all have the authority to grant <br />abatements. In addition, the county and school district affected by the <br />abatement have the option of declining participation. If one of the jurisdictions <br />should choose to decline, the maximum duration of abatement is 15 years. In <br />the case in which the city (or town), county, and school district all participate, <br />the maximum duration of abatement is 10 years. <br />In order for a city, town, county, or school district to utilize tax abatement, the <br />following findings must be made: <br />• The benefits gained must equal or exceed the cost to the political <br />subdivision; and <br />• The project must be in the public interest because it does one of the <br />following: <br />1. Increases or preserves the tax base. <br />2. Provides employment opportunities. <br />3. Provides or helps acquire or construct public facilities. <br />4. Helps redevelop or renew blighted areas. <br />5. Helps provide access to services. <br />6. Finances or provides for public infrastructure. <br />The abatement approval process is much simpler than tax increment and <br />consists of the following steps: calling for a public hearing, publishing a notice <br />of the hearing, conducting the hearing, and passing the abatement resolutions. <br />Dollars generated through abatement carry less spending restrictions as <br />compared to tax increment. The City's maximum aggregate abatement <br />available based on the 10% limitation is approximately $652,964/year based a <br />the City's 2005 net levy of $6,529,638. <br />- 1 8 7 - <br />City of Lino Lakes - Pavement Management Plan Financing Re <br />