2.0. HRSR 03-10-1998 - Laserfiche WebLink

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• the powers and process for tax abatement. Some highlights of the abatement authority include: • • The abatement is granted individually by each political subdivision (city, county, school district). • Compared with TIF, the process to grant an abatement is simple. The basic process requirement is a public hearing. Following the hearing, the governing body adopt a resolution specifying the terms of the abate- ment. • Abatements may be granted for no longer than ten years. Abatements by school districts are subject to annual reauthorization. • Unless the authorizing resolution prohibits change, the abatement may be reviewed and modified every second year after its approval. Abatements pledged to pay bonds are not subject to periodic review. • In any year, the total taxes abated by a political subdivision may not exceed the greater of 5% of the current levy or$100,000. • Taxes cannot be abated for property located within a tax increment financing district. • The statute grants the authority to issue general obligation bonds sup- ported by the collection of abated taxes. The proceeds of the bonds may be used to pay for(1) public improvements that benefit the property, (2) land acquisition, (3) reimbursement to the property owner for improve- ments to the property, and (4)the costs of issuing the bonds. The actual application of the abatement legislation will require additional study and analysis. The bonding authority should be approached carefully. The statute does not specifically exempt this debt from a referendum. It may be possible to pledge abated property taxes as revenue to another type of debt. The abatement will function more like a rebate. A property owner's taxes will not be reduced. The amount abated is included in the tax levy, collected, and paid to the prop- erty owner or used by the political subdivision pursuant to the statute and the enabling resolution. This process makes timing an important factor. Since the estimated total abatement must be added to the proposed and final tax levy for the political subdivision, abatements become tied to the general levy process. You must understand the levy process to know when abatement revenue will first become available. Levy limits may complicate the use of tax abatements in 1998 and 1999. Public improvements are often financed using the power to levy special Special Assessments assessments (Minnesota Statutes Chapter 429). A special assessments is a means for benefitting properties to pay for all or part of the costs associated with improvements and to spread the impact over a period of years. From a city perspective, this authority provides an important means of raising capital. • Special assessments can be used to finance a wide range of public • improvements. A New Bridge • Revitalizing Monticello's Downtown and Rlverfront - Page 4:15