County researching tax abatement program

In an effort to encourage property owners to make significant improvements and be rewarded with a tax break, Union County Board of Supervisors is considering a rural tax abatement program.

During the board’s meeting Monday supervisors reviewed details of the program with attorney Robert Josten from Dorsey and Whitney and county assessor Mindy Schaefer. Supervisors did not take any action but will continue research.

“It’s been used extensively in cities, but not extensively for residential in counties,” Josten said via a conference call. He said state code allows tax abatements for rural residences.

The maximum the county can give to residential development is 100 percent of the first $75,000 of new value added for a maximum of five years. “You can do less that. You can’t do more than that,” he said.

Josten said the code also allows the program to be used in areas that are considered blighted; areas with deteriorating properties.

“It could be hard to designate,” Josten said about blight. “It (the program) generally relates to already developed, but poorly developed or not completely developed areas. I’m not sure we can find that kind of eligibility in your county.”

Schaefer suggested the unincorporated area known as Kent could qualify as the area for blight. Josten said blight areas could receive 100 % for 10 years.

Josten said for the program to be promoted, every eligible property owner must be notified through a mailing and information must state how a public hearing for the program has been scheduled.

“How can we make it easy without doing a separate mailing,” Josten said. He suggested including that information when the county is planning to mail other information to the same residents, like property tax statements.

County Auditor Sandy Hysell said there are options for the county to inform those residents through the mail.

“That is the only part of the statute that is difficult to comply with. It’s time consuming and takes some hands on efforts to do that. Once you done that, held the hearing, the process is ver simple,” Josten said.

Josten said a second hearing could be petitioned by people if they don’t think they were fully informed from the first hearing or have additional concerns to address. Josten said rules allow 30 days for a possible, second hearing to be requested after the first. If a second hearing is not requested, the county can formally approve the program.

Improvements can either be new construction or additions to existing properties. Josten said the supervisors will define what is considered blight based on input from various others involved in property evaluations. The blight area benefit can be simultaneous with the program for the rest of the county. Property within incorporated city limits are not included.

Schaefer questioned the boundary for properties in Kent for a blight program. Supervisor Ron Riley said there are newer homes near Kent. He suggested using Kent’s boundaries when it was incorporated.

A property owner files an application for the program with the assessor. If the information in the application meets the program, it will be eligible for the abatement. Schaefer questioned the code having at least a 10% increase in value of the property, which Josten confirmed.

“If someone builds a $2,000 deck, it probably won’t,” Schaefer said about qualifying projects and adding 10%. Schaefer said she recommends she view the property before and after the work to determine the added value. “If the structure already exists and they plan on doing this. Once they file the application, I need to see it before they start the work and after. That way I can note what was changed. If you put on a 20 x 30 addition on the house I need to see what it looked like before.”

Schaefer suggested the program start Jan. 1 of a year to have a base of the evaluations of properties.

Supervisor Dennis Brown suggested starting in 2023 to give Schaefer time to review all applications. Schaefer said a similar program with towns has a deadline within a year for people to apply that creates time for authorities to review properties.

Supervisors were optimistic about the benefits.

“It could entice someone to build a house and move here,” Brown said.

The county can have the program for an indefinite amount of time.

Supervisors will further research the proposal for how residents can be informed by mail and legally coincide with a public hearing date.

“We’d like to start this as soon as possible,” said Supervisor Rick Friday. “It’s a good way to promote rural revitalization.”