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<br />5. "Tourism" means all tourism-related businesses and activities including recreation, <br />historical and cultural events, guide services, and unique lodging and food services <br />which serve as destination attractions. <br /> <br />~I Municipality's authority to grant tax exemption or payments in lieu of <br />taxes - Notice to competitors - Limitations. After negotiation with a potential project operator, <br />a municipality may grant a partial or complete exemption from ad valorem taxation on all <br />buildings, structures, fixtures, and improvements used in or necessary to the operation of a <br />project for a period not exceeding five years from the date of commencement of project <br />operations. A municipality may also grant a partial or complete exemption from ad valorem <br />taxation on buildings, structures, fixtures, and improvements used in or necessary to the <br />operation of a project that produces or manufactures a product from agricultural commodities for <br />all or part of the sixth year through the tenth year from the date of commencement of project <br />operations. <br /> <br />In addition to, or in lieu of, a property tax exemption granted under this section, a <br />municipality may establish an amount due as payments in lieu of ad valorem taxes on buildings, <br />structures, fixtures, and improvements used in the operation of a project. The governing body of <br />the municipality shall designate the amount of the payments for each year and the beginning <br />year and the concluding year for payments in lieu of taxes, but the option to make payments in <br />lieu of taxes under this section may not extend beyond the twentieth year from the date of <br />commencement of project operations. To establish the amount of payments in lieu of taxes, the <br />governing body of the municipality may use actual or estimated levels of assessment and <br />taxation or may establish payment amounts based on other factors. The governing body of the <br />municipality may designate different amounts of payments in lieu of taxes in different years to <br />recognize future project expansion plans or other considerations. <br /> <br />By November first of each year, the municipality that granted the option to make <br />payments in lieu of taxes shall certify to the county auditor the amount of payments in lieu of <br />taxes due under this section in the following year. After receiving the statement from the <br />municipality, the county auditor shall certify the payments in lieu of taxes to the county treasurer <br />for collection at the time when, and in the manner in which, ad valorem taxes must be certified. <br />Upon receipt by the county treasurer of the amount of payments in lieu of taxes under this <br />section, the county treasurer shall apportion and distribute that amount to taxing districts on the <br />basis on which the general real estate tax levy is apportioned and distributed. The municipality <br />may enter into a written agreement with the local school district and any other local taxing <br />districts that wish to enter the agreement for an alternate method of apportionment and <br />distribution. If such an agreement is entered into, the county treasurer shall apportion and <br />distribute the money according to the written agreement. All provisions of law relating to <br />enforcement, administration, collection, penalties, and delinquency proceedings for ad valorem <br />taxes apply to payments in lieu of taxes under this section. However, the discount for early <br />payment of taxes under section 57-20-09 does not apply to payments in lieu of taxes under this <br />section. The buildings, structures, fixtures, and improvements comprising a project for which <br />payments in lieu of taxes are allowed under this section must be excluded from the valuation of <br />property in the taxing district for purposes of determining the mill rate for the taxing district. <br /> <br />Negotiations with potential project operators for tax exemption or payments in lieu of <br />taxes must be carried on by the city council or commission if the project is proposed to be <br />located within the boundaries of a city, and by the board of county commissioners if the project is <br />proposed to be located outside the corporate limits of any city. A partial exemption must be <br />stated as a percentage of the total ad valorem taxes assessed against the property. Unless the <br />governing body of the municipality determines that there is no existing business within the <br />municipality for which the potential project would be a competitor, the potential project operator <br />shall publish two notices to competitors, the form of which must be prescribed by the tax <br />commissioner, of the application for tax exemption or payments in lieu of taxes in the official <br />newspaper of the municipality at least one week apart. The publications must be completed not <br />less than fifteen nor more than thirty days before the governing body of the municipality is to <br />consider the application. The municipality shall determine whether the granting of the exemption <br /> <br />Page No. 2 <br />