|
<br />-20-
<br />Tax Base Change for Low-Income Rental Property – Effective for assessment years 2022 and 2023,
<br />the first-tier limit for class 4d low-income rental property is reduced from $174,000 to $100,000, with
<br />class rates remaining at 0.75 percent on the first $100,000 and 0.25 percent on the remaining balance. The
<br />tier limit will once again be adjusted annually after assessment year 2023.
<br />
<br />Local Sales Tax Projects Defined – Minnesota cities are authorized to include up to five capital projects
<br />in proposals for local sales taxes. The definition of a capital project for this purpose was updated to
<br />include: a single building or structure, including associated infrastructure; improvements within a
<br />single park or recreation area, or; a contiguous trail.
<br />
<br />Tax Increment Financing (TIF) Flexibility – The Legislature enacted several measures that provide
<br />additional flexibility for TIF spending, including:
<br />
<br />• Allowing unobligated TIF to be used to provide loans, interest rate subsidies, or other assistance
<br />to private developers for the construction or substantial rehabilitation of buildings and ancillary
<br />facilities, if doing so will create jobs. Transfer authority expires on December 31, 2022, and all
<br />transferred increment must be spent by December 31, 2025, or returned to the TIF district.
<br />• Allowing TIF districts that have elected to increase pooling by 10 percent to use the increment for
<br />owner-occupied housing that meets the requirements of a housing TIF district, in addition to
<br />current low-income rental housing.
<br />• Providing three-year extensions of the five-year and six-year rules for redevelopment districts
<br />created after December 31, 2017, but before June 30, 2020, thereby extending their duration.
<br />• Creating a three-city pilot program, giving temporary authority to transfer unobligated housing
<br />TIF district increment to the cities affordable housing trust funds.
<br />
<br />Sales and Use Tax Refund Process – Effective for purchases made after June 30, 2021, cities and other
<br />local governments are allowed to utilize a streamlined process to secure a sales tax refund on construction
<br />materials purchased by a contractor on behalf of the city for construction, remodeling, expansion, or
<br />improvement of public safety facilities owned by local governments, such as police and fire stations. The
<br />process also applies to materials used in related facilities, such as access roads, lighting, sidewalks, and
<br />utility components. Under the process, local governments would continue to initially pay sales tax on
<br />these materials, but would then be allowed to file for a refund of the sales tax paid. Contractors would be
<br />required to provide the local government with the information necessary to file for the refund.
<br />
<br />Fire Protection Special Taxing District Authority – Effective for property tax levies payable in 2023
<br />and thereafter, the current law giving emergency medical districts taxing authority is expanded to include
<br />fire protection districts. Two or more local units of government are now permitted to establish a special
<br />taxing district to provide fire protection, emergency medical services, or both. The special taxing district
<br />will have authority to levy property taxes to finance district operations, spread either across the entire
<br />district at a set rate, or allocated to each participating jurisdiction based on factors , such as population or
<br />service calls. Districts will also have authority to issue debt related to the function of the district. The
<br />property tax and debt issuance authority also apply to existing districts established prior to June 30, 2021.
<br />
<br />Open Meeting Law – The Legislature made several pandemic-related changes to the Open Meeting Law,
<br />including removing the statutory cap of three times per year for elected officials to utilize a medical
<br />exception for attending meetings remotely between January 1, 2021, and July 1, 2021, and removing the
<br />requirement for elected officials participating in public meetings remotely, due to military service or
<br />medical exceptions, to disclose their remote locations. The law changes also updated the definition of
<br />“interactive technology” to replace “interactive television” throughout the text of the Open Meeting Laws,
<br />and added requirements for public bodies meeting remotely to enable remote participation by the public
<br />free of charge and enable public comment from remote locations, when practical.
|