If there is no plan, the tax collected at the 100% rate (owner and/or operator is a responsible party) or 25% rate (neither the owner nor the operator is a responsible party) is to be distributed to the local taxing districts in which the contaminated property is located. The tax is to be distributed as if it were a property tax, using the percentage that each local taxing district's net tax capacity based tax rate is of the total net tax capacity based tax rate for the unique taxing area excluding the state general tax. Market value tax rates are not to be used for this distribution. In addition, there is no tax increment district portion, fiscal disparity portion, or state general tax portion of contamination tax collections.
The total of contamination tax collections, penalties, and interest (there are no county costs to be collected) are to be distributed to the local taxing districts in the manner described above. This is unlike the distribution of penalties and interest on delinquent property taxes that have been collected. Penalties on delinquent property taxes are distributed 50% to the school districts within the county and 50% to the county government itself. Interest on delinquent property taxes that have been collected are distributed 50% to the school districts within the county, and the remaining 50% is either distributed to the county (if the property taxes were delinquent for a year or less) or split between the county and the city or town where the property is located (if the taxes were delinquent for more than one year) on the basis of the net tax capacity local tax rates of the county and of the city or town.
The contamination taxes are to be distributed to the local taxing districts at the same time as property taxes. The provisions of M.S. 276.11 and 276.111 apply to these distributions.
The distributions of contamination taxes to the local taxing districts are like payments in-lieu-of property taxes. The local taxing district is not required to use this money to reduce its property tax levy.
The law does not specify how the local taxing districts are to use their distribution of contamination taxes. Therefore, they may use this money for any lawful purpose.
If there is a cleanup plan, the tax collected at the 50% rate (the owner and/or operator is a responsible party) or 12.5% rate (neither the owner nor the operator is a responsible party) is to be distributed as follows: the county treasurer retains 5% of the total revenue (taxes, penalties, and interest) as county administrative costs, and pays the remaining 95% to the Commissioner of Revenue.
The Commissioner of Revenue deposits the state's share of the contamination tax in the Contaminated Site Cleanup and Development Account in the State General Fund, to be used to finance cleanup grants.
The rationale for the state’s 95% share is that it is used to finance cleanup grants which speed up the return of at least some of the reduction in market value back to the tax base for property taxation.
If a parcel of property for which there is an approved response action plan goes tax-forfeited due to the nonpayment of delinquent contamination taxes, the state retains its interest in the 95% state share of the unpaid contamination taxes, penalties, and interest, just as the county retains its 5% share. Therefore, the state should receive 95% of the proceeds from the sale of the property. The provisions of M.S. 282.08, which apportions money from the county’s forfeited tax sale fund (40% county, 20% city/town, 40% school district) do not apply to contamination taxes for which there is a state share.
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