Senate tax committee chairman: 'We want to leave Renaissance Zones alone'
BISMARCK — A bill that puts a sunset on Renaissance Zone income tax breaks was amended by a North Dakota Senate committee Friday, March 24, with its chairman saying they want to leave the program alone.
House Bill 1182, which narrowly passed the House last month, placed a Jan. 1 sunset on applying for the income tax breaks associated with Renaissance Zones. That program uses income tax and property tax incentives to encourage commercial and residential redevelopment.
Almost 60 North Dakota cities have Renaissance Zones.
Jim Gilmour, planning director for the city of Fargo, said the change would have made it harder to recruit businesses to the city's downtown. The city's mayor, Tim Mahoney, previously said the change would "cripple" downtown growth.
Fargo officials warned lawmakers last month that buildings were being constructed with the assumption the income tax breaks would be in place and would help attract tenants.
"It would have been bad to see the rug get pulled out from under them," Gilmour said.
Rep. Rick Becker, R-Bismarck, the bill's primary sponsor, previously told lawmakers the state has to make up for the revenue lost when individual cities give the income tax incentives.
The Senate Finance and Taxation Committee on Friday replaced the bill with requirements that a city notify the affected county and school district before granting a property tax incentive that lasts more than five years. If a county or school district declines to participate in the incentive, the bill allows the taxing authorities to negotiate.
The committee gave a unanimous "do pass" recommendation to the amended bill Friday.
"We want to leave Renaissance Zones alone," said Sen. Dwight Cook, R-Mandan, chairman of the Senate Finance and Taxation Committee.
As for the notification and negotiation proposal, Gilmour said Fargo has a good working relationship with the county and schools.
"We're already communicating with them on a regular basis," Gilmour said. "Sometimes cities don't like additional requirements, but when you're already doing it, it's hard to really object."