Economic Development Tax Abatement Policy

Otter Tail County Policy on Economic Development Tax Abatements
  • Adopted September 8, 1998
  • Amended July 11, 2000
Counties are authorized pursuant to Minnesota Statutes §469.1812 through §469.1815 to provide tax abatements for economic development purposes. Counties do not receive local government assistance from the state, as do other levels of local government. There is a natural phase-in of property taxes on new construction resulting from the assessment and levy procedures. In determining whether or not the Otter Tail County Board of Commissioners should utilize tax abatements for economic development purposes, the following factors will be considered:
  1. The benefits to the County must be at least equal to the costs of the abatement (M.S. §469.1813, Subdivision. 1(a)).
  2. Whether the public interest will be served in one of the following respects (M.S. §469.1813, Subdivision. 1(b)):
    • A. Increase or preserve tax base;
    • B. Provide employment opportunities in the county;
    • C. Provide or help acquire or construct public facilities;
    • D. Help develop or renew blighted areas; or
    • E. Help provide access to services for residents in the county.
  3. Total tax abatements in the county cannot exceed five percent of the current net levy or $100,000.00, whichever is greater (M.S.§469.1813, Subdivision. 8). No individual tax abatement should exceed one percent of the current net levy.
  4. The extent to which the proposal adds to the county's net commercial, industrial or general tax base.
  5. Whether or not the new business provides services not already provided in the county, or which are needed.
  6. The extent to which the proposal results in an increase in new employment opportunities that provide good wages and benefits for employees, or the retention of good jobs. Proposals that provide quality employment, which is paid above the minimum wage, and provides prospects for advancement, are preferred.
  7. Generally, establishments which will be engaged in the retail sales of merchandise to the public will not be considered for economic development tax abatements unless they provide substantial opportunities for quality employment and economic development.
  8. Otter Tail County does not support tax abatements for proposals that are not economically feasible.
  9. Whether or not the proposed business would be in competition with existing businesses in Otter Tail County. Abatements should not be given to businesses, which would receive a competitive advantage over existing businesses in Otter Tail County.
  10. The extent to which the project represents "new" dollars into the county.
  11. The extent to which the project requires improvements in county infrastructure, such as pollution control, road construction or other traffic problems. Also to be considered is the impact of the proposal on other county services such as law enforcement, human services or prosecutions.
  12. Whether or not the project will generate significant environmental problems or alleviate such problems. Factors to be considered include the impact upon natural resources such as pollution and crowding potential.
  13. The extent to which other levels of local government are in support of the project. The County Board should receive a resolution from the municipality and school district involved that they will also be providing an abatement for the project.
  14. Tax abatements will not be provided to projects receiving other forms of public economic assistance.
  15. Consistency of the plans with County land use controls.
  16. A written application will be required before Otter Tail County will consider granting an economic development tax abatement. Applications must be made by July 1 of each year, and all applications will be considered thereafter. The information provided on the application will be reviewed and confirmed by county officials. The application shall include the following information:
    • A. A map or site plan, prepared by an architect or engineer, showing the boundaries of the proposed development including the legal description of the property, parking and size and location of the buildings.
    • B. General description of the project, including size and type of buildings; business type or use; traffic information, including parking capacity, projected vehicle counts, traffic flow and pedestrian safety; timing of the project and estimated market value following completion.
    • C. A statement identifying the public benefits of the proposal, including estimated increase in property valuation, new jobs to be created with estimate wage levels and other community benefits.
    • D. A written prospectus of the developer's company or corporation, principles, history and past projects.
    • E. Financial information should be provided including past information and pro forma future projections for the project.
  17. The County will generally limit its relief of a deferral of taxes with an abatement of interest and penalties which would otherwise apply, with the taxes to be paid in a period of time not longer than twice the length of the period of deferral." 

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