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presence of these facilities in their <br />communities, the Legislature created the <br />Utility Valuation Transition Aid program. <br />This program compensates host <br />communities that have lost more than 4 <br />percent of their net tax capacity as a result of <br />Department of Revenue's rule changes. <br />Response: The League of Minnesota <br />Cities supports the continuation of the <br />Utility Valuation Transition Aid program <br />and opposes any efforts to change <br />statutory language or to divert promised <br />funds away from host communities for <br />any purpose. If the Legislature does <br />determine that it is necessary to re- <br />allocate the funds in the Utility Valuation <br />Transition Aid program for another <br />purpose, the League supports other <br />legislative efforts that would compensate <br />the host communities for the economic <br />and environmental costs of hosting these <br />facilities thought reimbursement from the <br />investor owned utilities. These other <br />efforts could include, but are not limited <br />to, increasing the class rate on utility <br />property to the extent that it would offset <br />the negative effects of the utility valuation <br />rule change. <br />FF -22. Transition for Property <br />Acquired by Tax -Exempt Entities <br />Issue: When an existing taxable property is <br />acquired by a tax exempt entity and <br />removed from the tax base, the taxes <br />formerly paid by the property owner are <br />shifted to other, remaining taxable properties <br />within the jurisdiction. When the acquired <br />property is a large percentage of the tax base <br />of a city or other local unit of government, <br />the shift in taxes can be substantial. <br />Response: To avoid immediate, large tax <br />burden shifts when an existing taxable <br />property is acquired by an entity <br />qualifying for a Minnesota property tax <br />exemption, state law should require the <br />new owner to continue to pay the <br />property taxes with a five-year phase-out <br />of taxable value or the state legislature <br />should create a program that provides a <br />state -paid transition aid paid over a <br />period of time to local units of <br />government that experience tax exempt <br />acquisitions, paid over a period of time. <br />FF -23. Payments for Services to <br />Tax -Exempt Property <br />Issue: Taxable property in many cities is <br />being acquired by nonprofit and government <br />entities. Converting the property to tax- <br />exempt status can lead to serious tax base <br />erosion without any corresponding reduction <br />in the service needs created by the property. <br />In 2013, legislation was introduced that <br />would have broadly exempted non-profit <br />property from paying user fees or service <br />charges for any service funded in part with <br />property taxes over the previous five years. <br />Under certain circumstances, this proposal <br />could have potentially exempted non -profits <br />from paying for even utility charges. <br />Response: Cities should have the <br />authority to collect payments from <br />statutorily -exempt property owners to <br />cover costs of service similar to the <br />authority provided under the special <br />assessment law. The League of Minnesota <br />Cities opposes legislation that would <br />exempt non -profits from paying for user <br />fees and service charges that help fund <br />services these organizations use. <br />FF -24. Fire Service Taxing Districts <br />Issue: Fire service districts have the <br />potential to reduce duplication of equipment <br />purchases and services, and to improve <br />uniformity of service delivery throughout a <br />region. One obstacle to establishing fire <br />League of Minnesota Cities <br />2016 City Policies Page 106 <br />