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HomeMy WebLinkAbout1991 04-29 CCP Board of Equalization BOARD OF EQUALIZATION CITY OF BROOKLYN CENTER APRIL 29, 1991 7 p.m. 1. Call to order 2. Roll Call 3. Purpose of Board of Equalization 4. Procedural Review of Property Taxation 5. City Assessor's Report 6. Public Inq Re garding Local Assessments � g g a. Appointments 1. Wiley- Crosby 5621 Indiana Avenue North PID #03 118 - 21 - 31 - 0001 (Blue report) 2. Jack Schubert 50's Grill Restaurant PID #03- 118 -21 -41 -0015 (Green report) b. Walk -Ins c. Letters 1. Reolita Paray 3307 66th Avenue North PID #34- 119 -21 -14 -0065 (Yellow report) 7. Legislative Update 8. Adjournment Note: Attached are copies of the materials which will be presented overhead in the City Assessor's report. SPENDING RULES - Elected Officials Formulas /Distribution - Truth -in- Taxation Hearings PROPERTY - Governor - Budget Hearing Ls lelators' - Referendum Issues TAXES ASSESSMENT - value - Classification 1991 Assessment Timeline October 1989 - September 1990 Review sales /market activity June 1990 - December 1990 Property Inspections October 1990 - September 1991 Period used by Commissioner of Revenue and Tax Court to gauge 1991 Assessment December 1990 Finalize residential values January 2, 1991 Assessment Date January 2, 1991 Homestead Cards /Value notices sent January 1991 Finalize non - residential values March 1991 Mail value notices -- amended and non - residential . April 29, 1991 Local Board of Equalization June 17, 1991 County Board of Equalization Fall 1991 Truth -in- Taxation /Budget Hearings January 1992 Tax Rates calculated March 1992 Tax Statements mailed May 15, 1992 First half payment due May 15, 1992 Deadline for Tax Court petitions May 15, 1992 Deadline to apply for value abatement for 1991pay92 taxes October 15, 1992 Second half payment due June 1994 Anticipated conclusion of Tax Court activity pertaining to this assessment 5 I What is Market Value? Minnesota Statutes (272.03, subdivision 8) define market value as: "Market value means the usual selling price at the place where the property to which the term is applied shall be at the time of assessment being the price which would be obtained at a private sale or at an auction sale, if it is determined by the assessor that the price from the auction sale represents an arm's length transaction. The price obtained at a forced sale shall not be considered." The text, Property Assessment Valuation copyright 1977, International Association of Assessing Officers, defines market value as: "Market value is the most probable price expressed in terms of money that a property would bring if exposed for sale in the open market in an arm's- length transaction between a willing seller and a willing buyer, both of whom are knowledgeable concerning all the uses to which it is adapted and for which it is capable of being used." The fundamental points in these definitions include: 1. It is the most probable price, not the highest, lowest, or average. 2. -It is expressed in terms of money (a cash basis). 3. A reasonable time for exposure in the marketplace. 4. Buyer and seller are motivated by self- interest. 5. Buyer and seller are both well informed, or.advised, and are acting prudently. 6. The definition recognizes the present use of the property as well as other potential uses. 3 AVG PROPERTY TAXES IN THE LAST 16 YRS CITY OF BROOKLYN CENTER 2 1.9 1.8 1.7 1.6 1.5 j 1.4 0 1.3 X y 1.2 � 1.1 v fin' 1 Ldz 0.9 Ot 0.8 ti 0.7 Z 0.6 0.5 0.4 0.3 0.2 0', 76 77 78 79 80 81 82 83 84 85 86 87 BE 89 90 91 YEAR PAYABLE 0 AVG VAL HOME + HIGHER VAL HOME 16 YEAR MARKET VALUE AND TAX AMOUNT COMPARISON PID # YEAR 1976 1977 1978 1979 1980 1981 1982 1983 M.V. $30,965 $33,130 $37,400 $44,900 $52,900 $55,800 $59,700 $61,800 34- TAX $566.40. $685.70 $661.02 $610.84 $437.32 $367.76 $430.68 $496.26 119- 21- YEAR 1984 1985 1986 1987 1988 1989 1990 1991 14- M.V. $61,800 $61,600 $62,700 $65,700 $68,900 $70,600 $71,300 $71,000 0030 TAX $ 579.90 $ 530.22 $554.06 $574.63 $651.38 $816.66 $805.02 $868.16 16 Year Trend M. V. +129.299 Tax +53.2896 PID # YEAR 1976 1977 1978 1979 1980 1981 1982 1983 M.V. $51,165 $53,720 $57,400 $62,100 $72,600 $77,300 $84,200 $83,000 34- TAX $1,215.36 $1,433.92 $1,677.52 $1,328.64 $934.68 $694.00 $934.84 $1,159.50 119- 21- YEAR 1984 1985 1986 1987 1988 1989 1990 1991 32- M.V. $89,100 $88,000 $88,400 $91,700 $94,900 $99,700 $103,200 $98,400 0045 TAX $1,269.70 $1,349.16 $1,307.46 $1,358.32 $1,472.93 $1,485.16 $1,445.08 $1,610.64 0 0 16 Year Trend M. V. +92.32 Tax +32.52 /o The above properties were chosen to be representative samples of homes in Brooklyn Center in two different price ranges. These properties have not been extensively changed physically although normal maintenance and depreciation are present in these average properties. The income - adjusted homestead credit (circuit breaker) has not been considered in this example. 25— Apr -91 mpp CITY OF BROOKLYN CENTER EFFECTIVE TAX RATES PAY 1991 ANOKA OSSEO ROBBINSDALE BROOKLYN CENTER ISD #11 ISD #279 ISD #281 ISD #286 Market TCR = 108.466 TCR = 116.376 TCR = 113.273 TCR = 103.940 Value TAX $ ETR TAX $ ETR TAX $ ETR TAX $ ETR 40000 $434 1.08% $466 1.16% $453 1.13% $416 1.04% 45000 $488 1.08% $524 1.16% $510 1.13% $468 1.04% 50000 $542 1.08% $582 1.16% $566 - 1.13% $520 1.04% 55000 $597 1.08% $640 1.16% $623 1.13 % $572 1.04% 60000 $651 1.08% $698 1.16% $680 1.13% $624 1.04% 65000 $705 1.08% $756 1.16% $736 1.13% $676 1.04% 70000 $781 1.12% $838 1,20% $010 1,17% $748 1.07% 75000 $889 1.19% $954 1,27% $020 1,24% $852 1.14% 80000 $998 1,25% $1,071 1,Q4% $1,042 1,30% $956 1.20% 85000 $1,106 1.30% $1,187 1,4Q% $1,155 11311% $1,060 1.25% 90000 $1,215 1.35% $1,303 1,45 %e $1,209, 1,41% $1,164 1.29% 95000 $1,323 1.39% $1,420 1,49% $1,382 1,45% $1,268 1.33% 100000 $1,432 1.43% $1,536 1.54% $1,495 1.50% $1,372 1.37% 110000 $1,649 1.50% $1,769 1.61% $1,722 1.57% $1,580 1.44% 120000 .$1,974 1.65% $2,118 1.77% $2,062 1.72% $1,892 1.58% 130000 $2,299 1.77 % $2,467 1.90 % $2,401 1.85% $2,204 1.70% 140000 $2,625 1.87% $2,816 2.01% $2,741 ? 1.96% $2,515 1.80% 150000 $2,950 1.97% $3,165 2.11% $3,081 2.05% $2,827 1.88% 175000 $3,764 2.15% $4,038 2.31% $3,931 2.25% $3,607 2.06% 200000 $4,577 2.29% $4,911 2.46% $4,780 2.39% $4,386 2.19% 225000 $5,391 2.40% $5,784 2.57% $5,630 2.50% $5,166 2.30% 250000 $6,204 2.48% $6,657 2.66% $6,479 2.59% $5,945 2.38% 275000 $7,018 2.55% $7,530 2.74% $7,329 2.67% $6,725 2.45% 300000 $7,831 2.61% $8,402 2.80% $8,178 2.73% $7,504 2.50% B.C. TAX CAPACITY RATE DISTRIBUTION PAYABLE IN 1991 CITY 19.208 (16.5 %) VOC. SCHOOLS 1.046 (0.9X) COUNTY 30.114 (25.9 %) MISC. 7.365 (6.3X) S.D. 279 58.643 (50.4 %) TOTAL TAX ON A $100,000 PROPERTY IN B.0 6 5 4 ty" 3H o� c F 3 0 ze Z 2 i 0 COML /IND APARTMENT RES. NHS RES. HS PROPERTY TYPE . ® 1990 ® 1991 SALES RATIO Estimated Market Value Sale Price $ 93,000 $100,000 = 93% MEDIAN RATIO "MIDDLE" .98 .98 .94 .93 -- Median .92 -- Median .93 .92 92 median 100 - - 00 93.4 90 .:::: 110 85 _ - ... 100 IOW coefficient high coefficient (narrow grouping) (wme 9mt;*V) _ 26-Nov -90 10/89 -9/90 RESIDENTIAL SALES 14:24:16, HENNEPIN INFORMATION SERVICES "IBM 3090 MVS /SP g.1.1 RATIO Count Midpoint One symbol equals approximately .80 occurrences 0 61.00 I 0 63.00 I 0 65.00 I. 0 67.00 I. 0 69.00 I. 2 71.00 Ix:x 0 73.00 I 0 75.00 I 1 77.00 Ix 0 79.00 I 3 81.00 Ixxxx . 4 83.00 Ixxxxx 8 85.00 Ixxxxxxxxxx , 18 87.00 Ixxxxxxxxxxxxxxx;xxxxxxx 22 89.00 Ixxxxxxxxxxxxxxxxx ; xxxxxxxxxx 27 91.00 Ixxxxxxxxxxxxxxxxxx ;xxxxxxxxxxxxxxx 37 .93.00 Ixxxxxxxxxxxxxxxxxxx ;xxxxxxxxxxxxxxxxxx *xxxx *x* 20 95.00 Ixxxxxxxxxxxxxxxxxxxx ; xxxx 28 97.00 Ixxxxxxxxxxxxxxxxxxx ;xxxxxxxxxxxxxxx 24 99.00 Ixxxxxxxxxxxxxxxxxx ; *xxx�txxxxx* 9 101.00 Ixxxxxxxxxx* 5 103.00 Ixxxxxx 7 105.00 Ixxxxxxxx* 4 107.00 Ixxxx* . 1 109.00 Ix 1 .111.00 Ix ; 1 113.00 Ix 1 115.00 Ix , 1 117.00 Ix _ 1 119.00 Ix. ----- --------------------- 0 8 16 24 32 40 Histogram frequency Mean 94.972 Median 93.342 Std dev 11.005 '.Valid,cases 228 Missing cases' 0 '. CITY OF BROOKLYN CENTER BDBK91 1991 RESIDENTIAL SALES RATIO STUDY Aggregate Ratio - 93.1 % Median Ratio - 92.8 % Coefficient of Dispersion - 5.1 Avg. S.P. - $76,398 Avg. A.V. - $71,188 356 Sales / 8180 = 4.35% (Sales - October, 1989 through September, 1990) STYLE RAMBLERS EXP. SE -SF SPL LVL 2 -ST TH CONDO # 26 37 23 13 * 4 32 12 SP M916 $68,952 $88,743 $83,585 $104,550 $64,255 $46,500 AV $72,499 $63,705 $84,826 $76,377 $98,250 $59,644 $43,208 R 93.0% 92.4% 95.6% 91.4% 94.0% 92.8% 92.4% LOCATION -PRICE (Res. Only) LAKE -RIVER TRAFFIC COML -APT PARK SP +$90,000 SP- $55,000 # * 3 59 13 10 28 9 SP $130,666 $75,297 $71,345 $81,330 $103,723 $50,744 AV $116,633 $70,835 $67,326 $77,910 $89,878 $51,866 R 91.4% 94.1% 94.4% 95.8% 86.7% 102.2% AGE (Res. Only) 0 -5 YRS 6 -10 YRS 11 -15 YRS 16 -20 YRS 21 -25 YRS 26 -30 YRS 31 -35 YRS # * 3 * 3 6 9 31 33 138 SP $96,967 $76,133 $85,967 $89,588 $87,730 $81,869 $78,554 AV $93,200 $68,633 $8ZC50 $83,233 $81,971 $76,427 $72,687 R 96.1% 90.1% 95.4Qb 92.9% 93.4% 93.4% 92.5% TOWNHOUSES 36 -40 YRS 40+ YRS 0 -5 YRS 6 -10 YRS 11 -15 YRS 16 -20 YRS # 54 33 * 1 19 8 * 4 SP $73,952 $68,627 $61,700 $64,356 $62,836 $67,250 AV $68,630 $66,076 $60,000 $59,342 $58,525 $66,225 R 92.8% 96.3a/o 37.2% 92.2% 93.1% 98.5% NEIGHECR fQQl3 - MEDIAN RATIOS (Res. Only) #1 #2 #3 #4 #5 # 17 30 45 9 52 SP $74,974 $80,902 $82,079 $100,300 $79,437 AV $69,594 $74,103 $77,049 $90,178 $73,906 R 92.3% 92.2% 93.1% 92.2% 92.8% #6 #7 #8 #9 #10 # 33 71 20 28 * 5 SP $82,195 $73,846 $69,827 $77,821 $76,800 AV $76,639 $69,324 $65,335 $73,150 $72,340 R 92.9% 93.0% 91.9% 92.1% 93.4% * =Sam le Insufficient 12 r A li! � � tP3 I f ' ��I • .�su J �r i i - � • �(_ �i L lJP ru 1 1� �,�I 6 F I!nt.9lQlllllllmlil s w ' NIJ if1QP.PlII J IIt Q Illy 1 12 TO 111 h� �. I}QQID r1( 11 III k' , \ . �cawiii =, � ':, �_ �� - r m�t•�i� [}I , � ��JJI�,�, �, >^ —: �' ' z�r EQ1{Wlu�! 11 a „w FQ1411i'nn!altTElIIIBE}QEQQ { 711 I I-1l I q 't _ �, t33 ➢1fl1JI' II:nI}113IfQll 1 1 { EIIJmjjlrlf3Q _ . _ � �•'" ra `� ��ulJ Illl._i?.r(LT}1Jp1111111BIQ11. �1ft1Q xQl ➢I:n, ; toil�YI11t}�11'll j t_•,.. .� r ur 9 .. 1,.5 ,llf 1 un QIIQIQQiI(I FL I ... 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E t /�:; - ' rff}�fl3�flQllliIDf[N[QQI QIBIL_.IIEFi Q �i t ,«. ,.'•• ' r•, IWIr 11111 IE1' :399 cdE' IQIQlflll'I1f3QQl ttl' il}0 9fullHILI'lI r rtlr [� t �lI Minn• ll,G1L 1.(Y1Q111� �,IJ .. tl� f �-� .: 1.fi7(i }QQ9ET7_ B fQi�f[iLF iaJlQllllfllll h nn °Jlillll(1- E: y } ? \i� c» -• ►may _ Ijrrll(T I . T11L_ I7Eltztl 'f3QQ!I }rJ�C39U11J811111� IiI1L ; l:m�z 1 - .'Ir�tl I �I 4. . "• I,. ��♦ _ frT -LCI. 1 lop., JI { ! - - �f_:�:. c U U �...`• 1 B [t.0 - - 1[ifl1i11Q.. >' / _ �.• �- = � � }uh'i •I, .lr. rr ,, , 1 n.m I ,�r�, r ¢+ dtn�j -- _ I l• i f _ fr • - ((111ff►� _ iIII!�I } DlldP; i > d :'� "z+n /( of =� il�ltiic ITtnQIf1M�t�1'�'It:nuui Il ® � 1 . � 4 I ., - gin. a' �e,+�..' ,. � •�`� �1111!(TI } ' 1991 Summary of Statistical Measures 1. Average Deviation = 4.9 2. Coefficient of Dispersion = 5.2 3. Coefficient of Variation = 7.1 4. Index of Regression = 100.5 5. Mean Assessment Ratio = 93.6 6. Median Assessment Ratio = 92.8 7. Range 131.0 Minus 75.8 = 55.2 8. Sales Weighted Aggregate Ratio = 93.2 9. Standard Deviation = 6.7 10. Sample Sufficiency Gauge = .28 ** Note: Residential Properties Only - Condos not considered. ** When the gauge is less than 1.00, the sample is considered sufficient to use for a sales ratio study. 11 W !• -1 t•�(I. I I --- t--I,, 1 � I 1 i ! ! 1 1 t__;•'! , E;� � I IL:= _ i Iliiiiillli� u� � -~ = " -- = �'� i I '� :. T -. iYS -r. A u�. .. i•� —• I _ '' — T --..� � . i ( � "..' niuli'lllrf�ill��p(1IU�i m` � �I�,� -��'� ;� ,,,� t J, .: -• _ =�- !I -�- ' ,•., �l_.- 3'4f[�!(t(l�tul f?k1LLil1. l .:. 1 � - _ -� -_ P V . ".l C .^ r rl I , .� _ 11 Tiwl• �"' f}(HUt l 41 il[fIII t � r ��llll(9f}"tiB9rlIlH1(Illll ......lr I I/ I t• ; : r ��l rlll 11 l� ,It(ISJ11?'1T "`: -__- f � � — '�y � ! � . 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';� fllDIIdQIIIQICw�'ll iu1 D ' �� _ I�fI9g(�jj(� E : I . � m m� IriB}�, � ._ �� ( DiID ➢IIIIII111111tIi1rittt7DDED � �,r [Eta- qun III. Egg QDEIm' f:�61J1I1�i7� 111 t- _ :i rwi➢Q — .�9JljI11Q`utiiDl�l : .,,,.. `� ➢g! ;% =' ' � � lit! J �� j�� rTm, ���iQDnnitll��� - -�- r Q - __ ` • ....,�,a ,.: �.• .. . rilmlx[l — . Y,..:e •., rifb'i[d ' " Hil6utlD '� �y� QIb1�in "c1 D Lill III I I h �I MB . J IIjI4iiB1' f h — >� o " t ili i.� �I � I ill i 11 I�� � I n, il•;• it i•, • sw'R ✓'... ua.. ,,; -Td... k" j I I ' j II I I I I I ii �ij�l it .�II I I IIII i i. i(j� : I'''I • ��r: 1, � � �ib'�' ,.' � � ,111 1 t !III1111�1: IIj Ii iih.ijll�Il 11111��11j�h:i I�:!Illl�il�f��!1 _ �� • :. , ., , �h...�� - 1 ,,,1 I�li,lill!Ill�i 1t��dl�llj!dliUl lljl :i�iil�:. !II 31:II��11ilLllti IL'.Ittl „I!:ll,u !I -,. -• „ ,r_ -,� t ..fir--- • ^--�III'�.'. , NORTH METRO MAYORS ASSOCIATION LEGISLATI ALERT THE OGREN TAX PROPOSAL Information from the press and our lobbyists tell us that the budget balancing situation at the Capitol is very uncertain. The House side appears to be much more flexible and creative at this stage of the process. Please review the attached Ogren Tax Proposal plan. Request that you share this NMMA information with your Mayor and City Council members ASAP and contact office by Tuesday, April 30th with your comments and recommendations. In general, the Ogren proposal is the kindest to cities out of any that have been suggested to date. It's elements include the following: 1. Dedication of 1.5 cents of the current 6 cent sales tax to local units of government - provided that the county pass an additional 0.5 cent sales tax. 2. This new tax would begin being collected July 1, 1991. Two cents of the sales tax would be placed in the Homestead Credit Trust Fund (HCTF). This fund would maintained on a separate basis and would not be invaded for, or enriched by, state expenditure. 3. As a result of this fund, the state would no longer fund city, county and township HACA, LGA, disparity and equalization aids. 4. During the first year, HCTF dollars would be distributed to local governments based on a formula that combines current aid and property tax relief programs. The 1992 Legislature will design the formula for future years. 5. Local units would receive the benefit on any growth in the two -cents sales tax trust fund. Local governments would be responsible for their own financial requirements and would have to see themselves through swings in the economy. For your information, sales tax revenue collections have never suffered a decrease since the initial sales tax law was enacted. In fact, even during recessionary years (1981 -82, 1985 -36 and current 1991) revenues grew at more then 1.4 percent. This suggests a fairly stable revenue source for local units of government vis -a -vis other alternatives that have been recommended. 6. Counties have the option not to participate in the HCTF. The difference in lost HCTF revenue would be made up with an allowance of a fifty percent property tax levy. (This really isn't an option in the opinion of most people.) 7. In 1992, all levies except Social Services and debt levy would be frozen for �� r�tci grin counties cities ands e cial toxin districts. C ities under 1 000 would la P g i P g be exempt. After 1992, levy freeze/limits would be lifted and local units of government would be answerable to their respective property owners for property tax levy changes. H. The revenues from the Ogren proposal would be about $1.45 billion in 1992 -1993, compared to $1.4 billion spent in state money for non - school property tax relief in 1990 -1991. 9. Cities, townships and counties with unorganized townships would be able to: -levy up to 6 percent in undedicated lodging taxes, and -allow utility franchise fees. 10. Before HCTp revenues would be distributed, the trust fund would: -reduce rates on high value homes to 2.5 percent in payable 1.992 and 2.0 percent in payable 1993 ($24 million in 1992), -reduce rates on high value C/I to 4.85 percent in payable 1992 and 4.75 percent in payable 1993 ($18 million in 1993), and -pay for the Governor's $47 million K -12 education levy (one time only). 11. All new excess levy referenda would be levied on market value rather than tax value. This would amount to a reduction in excess levy referenda from an estimated $50 million statewide in 1992 to $10 million. This would encompass all referenda, including bond elections. As many of you know, AMM's Legislative Coordinating Committee, the Summit Group and the League support the basic concept of the Ogren bill. There still are some concerns, namely: homestead and C/I buy - downs, 1992 levy freeze and future formula rewriting. Reality however, is that the Ogren bill is the most friendly towards cities. It would definitely be harder to manipulate in future legislative sessions. REQUESTED ACTION: Consult your mayor and city council members for their support for the Ogren bill. Call our oiFce by noon on Tuesday, April 30th, 1991. Upon a majority of our members responding in the aff5rmative, NNBIA will communicate with our legislative delegation and request their active support. Also, our lobbyists will be advised to make direct contact in bath the House and the Senate with our delegation. Various of our members have been contacted by Rep. Ogren over the past several days and have suggested a number of changes in his proposal. Some of these suggestions have already been incorporated in Ogren's bill. i NORTH M MAYORS ASSOCIATION i LEGISLATIVE ALERT TO: NMMA City Managers /Administrators Community Development Committee FROM: Joseph D. Strauss Sarah M. Nelson DATE: April 24, 1991 RE: TIF Summary The attached TIF summary is for your review and comment. It was distributed at the Senate Economic Development And Housing Committee and then forwarded to the Tax Committee where Senator James Metzen has requested a hearing. Please contact your State Senator and House members to ask for their support - ASAP. . This hill takes the sting out of last year's TIF defeat. It gives us the basic tools that our communities need to continue to shape tax base and create jobs, as well as, have the ability to address housing and redevelopment needs. At the present time, the House does not have a companion bill. The House only has a technical corrections and outstate manufacturing district bill. (Potential for an urban and rural split.) Our version will be a real struggle in the House, but we have a fighting chance in the conference Committee. SUMMARY OF S.F. NO. 1012 RELATING TO TAX INCREMENT FINANCING Section 1: Clarifies that the reduction in Local Government AiT and Homestead and Agricultural Credit Aid apply, in the,case of applicable existing districts, only to the area of the district that was certified after April 30, 1990. Eliminates redevelopment districts, renewal and renovation districtst housing districts, hazardous substance subdistricts, and manufacturing districts from the districts subject to the state aid penalties. Includes economic development districts (other than manufacturing districts), soils condition districts and mined underground space development districts as districts subject to the state aid penalties. Section 2: Excludes the equalized levies for (1) health and safety, (2) cooperation and combination, (3) community education, (4) early childhood family education, (5) non - regular transportation from the calculation of the state aid reductions. The Department of Education is unable to certify these aids by the August 1 deadline. This will decrease the state aid reductions for qualifying tax increment financing districts in school districts with these types of state aid. Section 1 . 1 Provides that penalties and interest on real and personal property taxes are distributed proportionally to the local taxing jurisdictions in which they are Located. Requires penalties and interest on taxes on the original net tax capacity of a tax increment financing district be allocated between the local taxing jurisdictions in the proportion that the local tax rate of each taxing jurisdiction in the year of collection bears to the total local tax rates of all the taxing jurisdictions. The allocation relating to the net tax capacity of the captured tax increment. is distributed to the authority that created the district. Section 4_: Requires that the income limits for interest reduction programs be adjusted for family size. P,ect_o n - 5 : _ Provides that a parcel may be deemed to be in s for the purpose build of creating a P P occupied b substandard g P y redevelopment, renewal and renovation district if: 1) the parcel was occupied by a structurally substandard building within seven years prior to the creation of the district; 2) prior to the parcels's demolition and clearance the authority finds by resolution that the parcel was occupied by structurally substandard buildings and that after demolition and clearance the parcel will be included within a district; and, 3) upon filing the request for certification of the district the authority notifies the county auditor that the original tax capacity of the parcel must be adjusted pursuant to law. Sggtion 6: Defines a manu rement financing district ict in economic development type of tax one squa in which 70 percent of the buildings and facili of re footage are used for (1) manufacturing or p roduc ti on personal property (including processing resulting in the change in condition of the property), (2) warehousing, storage and distribution of property (excluding retail saleS)s or (3) research and development.. Section 7: Provides that a tax increment financing plan may elect the first year in which initial tax increment receipts shall occur, provided the year elected is no later than the year in which the fifth anniversary of the date of certification of any parcel occurs. Section 8: Provides the term of years for which tax increment receipts may be paid to an authority o that manufacturing district to be fifteen years. delinquent taxes on property in a district be paid to the , authority after the district �s decertified if the delinquency required the authority to service debt secured by tax increment receipts with other revenues. 2 : Clarifies that "activities" means any purpose for which tax increment may be lawfully expended and includes administrative expenses in pooling restriction calculations. Defines "polluted property" as defined elsewhere in Minnesota statutes. Section 1QL Lowers pooling restrictions a by providing must hat 74 percent of the tax increment derive extended on activities in the district, activities related to polluted property in the district, to pay bonds used to finance district activities, or to service the debt of credit enhanced bonds. Section provides that the five year rule applies only to economic development districts (including manufacturing districts), mined underground space development d st i ts, housing districts and soil condition distric of debt. service the expenditure of tax increment on the pay on bonds for these types of districts will satisfy the five year rule if the roceeds of the bonds are spent in the district within five years or within the "temporary period" limits established by federal arbitrage law. Clarifies that paying interest costs on developer financings are not prohibited by the five year rule. Provides that the five year rule is sat if an authority adopts by resolution an expenditure pla authority adopts by resolution an expenditure plan that describes planned activities, states the expenditures to be made on each of the activities, and then the plan can not be further modified. section 12: Clarifies that payment of credit enhanced bonds out of the 70 percent, in- district share is not subject to the f ive increments f rom the district and the ye rule if pooling share are insufficient. in addition, administrat ive costs for activities in the district are exempt from the five year rule. S � Provides that tax increment revenues may be used to pay debt service on credit enhanced bonds issued to finance activities outside of the district, regardless of when the district is created. Clarifies that tax increment revenues from 1979 through 1982 tax increment financing districts can be pooled for this purpose. Se ction 14; Provides that if property in a tax increment district receives substantial taxable improvements after certification and then becomes tax exempt as a resu fthe foreclosure, forced sale and conveyance to an authoritYr w en the property is returned to the tax roles its � provides value will be used as the original net tax capacity. that for parcels with demolished substandard aulsubstandard authority elects to treat as still occupied by building, the original net tax capacity is the greater of 1} the current tax capacity, or 2) the tax capacity before demolition, but at current class rates. Sections 15 nd 5: Provides that the captured net tax capacity of a district is certified and the current net tax capacity of a district is determined each year commencing in the year in which tax increment is first payable to the authority a.a elected in the tax increment fi c the ariginal an election, in the year in which of the district is certified. se ti .n 17 Expands the assessment agreement law to allow agreements with property owners who are not developers. Assessment agreements also may be entered into for properties in the district even if the authority is not in the chain of title. Provides that minimum s market reeme t and that increase the agreement can the term of the arse 9 terminate when specified conditions are met. gig-t n. Clarifies that the commissioner of revenue does not have general rule-making powers with respect to tax increment financing. _ce_tioz} 19• Clarifies that only the failure to decertify districts that result from the authority wrongly characterizing the type of district are subject to the enforcement and penalty provisions. Section-2U., corrects drafting in the maximum limitation on penalties. 4 5ecti ri 21: Establishes a presumption as to the application of changes in the tax increment financing act to .r amendments that add area to existing districts. If the change in the tax increment financing act was effective for districts where the request for certification was filed after a specified date, the changes are presumed to apply only to the added area unless specifically stated otherwise. Section 22: Clarifies that the City council must make the finding that neighborhood revitalization money may be used to specifically include only areas where the city determines that private investment will not be sufficient to develop the area. Section 23: Extends Moorhead's authority to issue bonds for pre -1979 districts from 1992 to 1994. Segtion 24: Provides that the Minneapolis Community Development Agency (with the City of Minneapolis) shall reserve $20 000,000 each year through 2009 to be expended in neighborhood revitalization subject to the same provisions as neighborhood program revenues, and that 52.5 percent of the money must be expended on housing programs and related purposes. Section 25: Extends the term of the Dawson number 4 tax increment financing district to ten years from the effective date for the section. Section 26: Provides effective dates.