HomeMy WebLinkAboutJuly 2, 2001
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Planning and Zoning Issues
1 Comprehensive Plan and Zoning Ordinance Issues
a. Residential Densities
b. Park Land V5. Fee in Lieu
2 Mackin Development Proposal
3 Legislative Report
4 Other Business1
5 Adjourn.
1 Please note that the City Council reserves the right to add or delete items from the agenda based
upon time availability.
16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
Jun 28 2881 17:48:23 Via Fax
AMM FAX
NEWS
June 25-29.2001, no. 2
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b124474245 Frank Boyles
Page BB2 Of 8B3
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Association of
Metropolitan
M un ici pa litie~
House and Senate 'pass tax bill
Both the House and the Senate approved
the tax bill (HFl) by wide margins Thurs-
day afternoon.
The centerpiece of the bill is a state take-
over of the general education levy, at a
cost of approximately $900 million. To
, help fund this state takeover, the bill cre-
ates a. new, state-imposed property tax
levy on all ell and cabin properties. The
levywitl be $592 million in 2002, with an
increase based on the implicit price de-
flator (IPD) in future years. Revenue
from the levy growth will be dedicated
to a new education funding account be.
ginning in 2004.
The bill also contains considerable class
rate compression. For residential home-
stead and residential nonhomestead
properties, the class rates will be 1.0%
for the first tier (all value under $500)000)
and 1.250/0 for the second tier (all value
over $500,000).
The class rate for two and three unit
rental properties will be 1.5% for 2002.
and then drop to 1.25% begining in 2003.
The rate for apartments will be 1.80%
for 2002, 1.500/0 for 2003, and 1.25%
AM"{ News FtIX is flJ.JU!.d to all A~fM dty
managers and admil'listrtlton, l~gislat;tle
ctmlaclsarrd Board fft,embers. Please share
this fax with you.r mayors, c:oultcU",e",bers
alld staff to keep them abreast of impor-
tant metro dty is.vues.
US University Allel'lue West
St. Paul, MN 55103-2044-
Pholle: (651) 215..4000
Fa::c (651) 281-1299
E-lhl1.il: Ilmnlyvrurr.l4S.otg
begining in 2004. Apartments con-
structed after June 30~ 2001 would go
directly to a l.25% class rate. The class
rates for 4d apartments will be 0.9~~ for
2002, 1.0% for 2003, and then 1.250/0
begining in 2004.
Commerieallindustrial property will have
a 1.5% class rate for the first tier (all
value up to $150,000) and 2.0% for the
second tier (all value over $150,000.)
Agricultural property will have a 0.55%
class rate for the first tier (all value un-
der $600,000) and a 1.00l}o class rate
for the second tier (all value over
$600JOOO).
Other provisions of special interest to
metro-area eities include;
~vy Limits. The bill contains levy lim-
its for cities with populations over 2500
for taxes payable in 2002 and 2003. The
20021evy linlit will be the greater of ei-
ther 1) a two year adjustment to the pay-
able 2000 revenue base, or 2) a one: year
adjustment to the actual levy for pay-
. able 200 I, plus aids and minus specials.
The adjustment factors are the IPD,
which is 4.3 percent for 2001 and 3.0
percent for 2002. household growth. and
half of new ell growth.
PERA Special Levy. If the state de-
partments bill includes an unfunded man-
date to increase the employer contribu-
tion to PERA (proposed at .375 per-
cent)~ cities and counties will be allowed
to special levy for the l.mfunded amount.
City 2nd Town HACA are eliminated.
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Local Government Aid (LGA). An
additional $140 miIIion is appropriated for
City LGA. however, the formula is modi-
fied for local effort and to increase caps.
Therefore, a number ofcitjes, including
several in the suburban metro area, will
not only lose HACA, but will also have
their LGA reduced, possibly to their 1993
aid base. Cities do have the authority.
within the levy limit provisions, to levy
back for lost aid.
Truth in Taxation. The requirement
for a hearing is dropped in 2002 and 2003
if the year to year increase is at or less
than the IPD.
The transit property tax levy for op-
erating ~xpcnses is replaced by a statu-
tory dedication of the motor vehicle sales
tax (MYST). The metro share is 20.5
percent of MVST for 2002/03 ($109.8
million per year) and 22.5 percent of
MVSTfor2004/05 ($125.1 millionper
year). The capital levy for transit is ex-
tended to the entire metropolitan area.
Homestead Credit. 'The current Edu-
cation and Ag Homestead.Credits are
eliminated and a new Market Value
Homestead Credit is created. The new
credit will be equal to 0.40/0 of markt':t
value up to $304, less 0.090/0 times any
value over $76,000.
Property Tax Refund (Circuit
Breaker). The maximum property bx
refund for homeowners is increased
from $440 to $] ,450 and the ma~irnum
qualifying income is inereased from
$61,930 to $77)520.
Jun 28 2881 17:41:14 Via Fax
continued from page I
Limited Market Value is phased out
over six years.
Tax Increment Financing (Tll"). The
Local Development Article (XV) con.
tains amendments to the-ta..x increment
financing act, special TIF laws, amend-
ments to economic development laws
and the TIF grant program. The TIF act
amendments include many of the tech-
nical amendments contained in a previ-
ous tiL"(. bill but do not include several
policy amendments. Among the amend-
ments not in the bill are the pre-1990
amendments, the definition ofbtight and
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6124474245 Frank Boyles
Page BB3 Of BB3
the repeal of the conclusiveness clause.
The bill does continue the authority of
the Office of State Auditor (OSA) to
enforce the TIP Act. The LGA/HACA
and local contribution are repealed.
The article includes several sections re-
lated to the grant program. The corn:rnis-
sjoner of revenue will administer the
grant program, with tl:te fIrst grant to be
made in 2003, The appropriation is $91.0
million for the first year of the grant pro-
gram and $38.0 million in each subse-
quent year. To apply for a grant a mu-
nicipality or authority must use its avail-
able TIF from all districts and take local
actions as defined in the bill. The local
actions are the removal of the certified
tax levy and changing the fiscal dispari-
ties election, if needed, to take the con-
tribution from outside the district. Dis-
tricts for which certification was re-
quested prior to August 1, 2001 and have
a bond or binding contract that was is-
sued or approved before August 1,200 I
or was issued pursuant to a binding con-
tract entered into by July 1,2001 are eli-
gible to apply for the grant.
Items not in the tax bill include the
reverse referendum provision initially in
the House bill and an airport noise miti-
gation proposal initially in the Senate bill.
Permit fee and building code mandates
Remi Storze
J
I
\
Cities will have to comply with a fee-
reporting requirement and a series of
other changes relating to fees and the
state building code contained in
Chapter 207 (HF 1310/SF 1205)
signed mto law by the governor on
May 29. The League has contacted the
Department of Administration to
request city participation as the
department moves forward on
implementing these new requirements.
As soon as the Legislature sets the
budget for state agencies, the depart-
ment will be able to address the new
laws. The League will be coordinating
a forum with the department and will
be soliciting city parti~ipants.
The bill, among other things,
mandates a fee report, limits building
code ordinances to the state building
code for residential building systems
or components, directs rulemaking for
repetitive plan check fees. The
following items summarize the fee-
and code-related provisions of the bill:
Repetitive Plan Check Fee
Rulemaking. This section gives direction
to the Department of Administration
to create rules regarding repetitive
plan review fees. Effective Aug. 1, 2001.
National Model Minimum State
Building Code Pre-empts Local
Ordinatlces. The bill prohibits munici-
palities from adopting ordinances or
requiring through development
agreements any provision that is more
restrictive than the building code
when regulating components or
systems of residential structure. Its
language provides that the section will
not prohibit municipalities from
adopting planning, zoning or subdivi-
sion ordinances unless they conflict
i...,
with state building code provisions
regulating components or systems of a
residential structure. The language
allows local governments to adopt
more restrictive provisions if necessi-
tated by local geological conditions
and approved by the state building
official. Effective Aug. 1, 2001.
Interpretive Alltltority. This
section gives the state binding inter-
pretative authority over disputes
ansmg from local building code
interpretation. A committee of five
building officials and two construction
industry representatives will make the
final interpretation. It requires munici-
pal building officials to enforce final
interpretations until the interpretation
is considered for adoption as part of
the state building code. Effective.
Aug. 1,2001.
Permit Fee Limitation of Minor
Residetttial Improvements. This section
limits permit fees to $15 or 5 percent,
whichever is greater, for improvement,
installation or replacement of a
residential fixture or appliance that
does not modify electric or gas service,
has a labor cost of $500 or less, and is
done by the homeowner or a licensed
contractor. Effective Jan. 1, 2002.
Annual Reporting. Starting
April 1, 2003, municipalities shall
report information relative to fee
revenue and expenditures to the Dept.
of Administration. This information
will include all construction- and
development-related fees collected
from builders, developers, and subcon-
tractors. The report will also collect
information relating to the costs to
the municipality for performing
construction- and development-related
activities. It is extremely important for
cities to accurately report all the costs
related to these activities.
Local Builder License Fee Prohib-
ited. This section clarifies existing law.
It states municipalities may not
require a state licensed builder to pay
a local fee related to licensure or
registration. Effective Aug. 1,2001.
Bllilding Standards. This section
identifies building standards as the
state building code in effect at the
time of construction or remodeling.
Effective day after final enactment.
Uilrranties by Vendors. This
section includes non-compliance with
building standards as an item the
vendor must warrant of the product.
Effective day after final enactment.
Home Improvement ~rranties.
This section includes non-compliance
with building standards as an item the
home improvement warranty must
warrant of the product. Effective day
after final enactment.
Development Fees. This section
'provides a statement of npxus and
proportionality to fees. It requires that
fees imposed under ~462 must be fair,
reasonable, and proportionate to the
actual cost of the service for which
the fee is imposed. It requires munici-
palities to establish procedures to
account for the use of the fee. Also,
this section makes clear that disputed
fees, specific fees to specific applica-
tions, are eligible for judicial review
under ~462.361. It provides a process
for fees to be escrowed and for
approved projects to proceed while
the dispute is being resolved. Effective
Jan. 1, 2001.l"
June 13, 2001
Page 5
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