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<br />“compress” the difference between the tax capacity rates applicable to residential homestead <br />properties and commercial and industrial properties. <br />8. Changes to Local Tax Rate. The local tax rate to be applied in the tax increment <br />financing district is the lower of the current local tax rate or the original local tax rate for the tax <br />increment financing district. In the event that the Current Local Tax Rate is higher than the Original <br />Local Tax Rate, then the “excess” or difference that comes about after applying the lower Original <br />Local Tax Rate instead of the Current Local Tax Rate is considered “excess” tax increment and is <br />distributed by Sherburne County to the other taxing jurisdictions and such amount is not available <br />to the City as tax increment. <br />9. Legislation. The Minnesota Legislature has frequently modified laws affecting real <br />property taxes, particularly as they relate to tax capacity rates and the overall level of taxes as <br />affected by state aid to municipalities. <br />10. Multi-Owner District. In determining the amount of tax increment generated by <br />the development property, Sherburne County may allocate a sharing factor when there are multiple <br />parcels of land in the tax increment financing district. This may result in a lower amount of tax <br />increment attributable to the development property than if the development property was the only <br />parcel in the district. In addition, the sharing factor calculation is not consistent with the method <br />that the City will use to determine Pledged Tax Increments. <br />D-7 <br />EL185-50-718703.v2 <br /> <br />