HF 2240

as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; repealing the transit zone tax 
  1.3             with certain exceptions; amending Minnesota Statutes 
  1.4             1998, section 273.13, subdivision 24; repealing Laws 
  1.5             1998, chapter 389, article 3, section 45. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1998, section 273.13, 
  1.8   subdivision 24, is amended to read: 
  1.9      Subd. 24.  [CLASS 3.] (a) Commercial and industrial 
  1.10  property and utility real and personal property, except class 5 
  1.11  property as identified in subdivision 31, clause (1), is class 
  1.12  3a.  Each parcel has a class rate of 2.45 percent of the first 
  1.13  tier of market value, and 3.5 percent of the remaining market 
  1.14  value, except that in the case of contiguous parcels of 
  1.15  commercial and industrial property owned by the same person or 
  1.16  entity, only the value equal to the first-tier value of the 
  1.17  contiguous parcels qualifies for the reduced class rate.  For 
  1.18  the purposes of this subdivision, the first tier means the first 
  1.19  $150,000 of market value.  In the case of utility property owned 
  1.20  by one person or entity, only one parcel in each county has a 
  1.21  reduced class rate on the first tier of market value. 
  1.22     For purposes of this paragraph, parcels are considered to 
  1.23  be contiguous even if they are separated from each other by a 
  1.24  road, street, vacant lot, waterway, or other similar intervening 
  1.25  type of property. 
  2.1      (b) Employment property defined in section 469.166, during 
  2.2   the period provided in section 469.170, shall constitute class 
  2.3   3b and has a class rate of 2.3 percent of the first $50,000 of 
  2.4   market value and 3.5 percent of the remainder, except that for 
  2.5   employment property located in a border city enterprise zone 
  2.6   designated pursuant to section 469.168, subdivision 4, paragraph 
  2.7   (c), the class rate of the first tier of market value and the 
  2.8   class rate of the remainder is determined under paragraph (a), 
  2.9   unless the governing body of the city designated as an 
  2.10  enterprise zone determines that a specific parcel shall be 
  2.11  assessed pursuant to the first clause of this sentence.  The 
  2.12  governing body may provide for assessment under the first clause 
  2.13  of the preceding sentence only for property which is located in 
  2.14  an area which has been designated by the governing body for the 
  2.15  receipt of tax reductions authorized by section 469.171, 
  2.16  subdivision 1. 
  2.17     (c)(1) Subject to the limitations of clause (2), structures 
  2.18  which are (i) located on property classified as class 3a, (ii) 
  2.19  constructed under an initial building permit issued after 
  2.20  January 2, 1996, (iii) located in a transit zone as defined 
  2.21  under section 473.3915, subdivision 3, (iv) located within the 
  2.22  boundaries of a school district, and (v) not primarily used for 
  2.23  retail or transient lodging purposes, shall have a class rate 
  2.24  equal to 85 percent of the class rate of the second tier of the 
  2.25  commercial property rate under paragraph (a) on any portion of 
  2.26  the market value that does not qualify for the first tier class 
  2.27  rate under paragraph (a).  As used in item (v), a structure is 
  2.28  primarily used for retail or transient lodging purposes if over 
  2.29  50 percent of its square footage is used for those purposes.  A 
  2.30  class rate equal to 85 percent of the class rate of the second 
  2.31  tier of the commercial property class rate under paragraph (a) 
  2.32  shall also apply to improvements to existing structures that 
  2.33  meet the requirements of items (i) to (v) if the improvements 
  2.34  are constructed under an initial building permit issued after 
  2.35  January 2, 1996, even if the remainder of the structure was 
  2.36  constructed prior to January 2, 1996.  For the purposes of this 
  3.1   paragraph, a structure shall be considered to be located in a 
  3.2   transit zone if any portion of the structure lies within the 
  3.3   zone.  If any property once eligible for treatment under this 
  3.4   paragraph ceases to remain eligible due to revisions in transit 
  3.5   zone boundaries, the property shall continue to receive 
  3.6   treatment under this paragraph for a period of three years. 
  3.7      (2) This clause applies to any structure qualifying for the 
  3.8   transit zone reduced class rate under clause (1) on January 2, 
  3.9   1999, or any structure meeting any of the qualification criteria 
  3.10  in item (i) and otherwise qualifying for the transit zone 
  3.11  reduced class rate under clause (1).  Such a structure shall 
  3.12  continue to receive the transit zone reduced class rate until 
  3.13  the occurrence of one of the events in item (ii). 
  3.14     (i) A structure qualifies for the rate in this clause if it 
  3.15  is: 
  3.16     (A) property for which a building permit was issued before 
  3.17  December 31, 1998; or 
  3.18     (B) property for which a building permit was issued before 
  3.19  June 30, 2001, if: 
  3.20     (I) at least 50 percent of the land on which the structure 
  3.21  is to be built has been acquired or is the subject of signed 
  3.22  purchase agreements or signed options as of March 15, 1998, by 
  3.23  the entity that proposes construction of the project or an 
  3.24  affiliate of the entity; 
  3.25     (II) signed agreements have been entered into with one 
  3.26  entity or with affiliated entities to lease for the account of 
  3.27  the entity or affiliated entities at least 50 percent of the 
  3.28  square footage of the structure or the owner of the structure 
  3.29  will occupy at least 50 percent of the square footage of the 
  3.30  structure; and 
  3.31     (III) one of the following requirements is met: 
  3.32     the project proposer has submitted the completed data 
  3.33  portions of an environmental assessment worksheet by December 
  3.34  31, 1998; or 
  3.35     a notice of determination of adequacy of an environmental 
  3.36  impact statement has been published by April 1, 1999; or 
  4.1      an alternative urban areawide review has been completed by 
  4.2   April 1, 1999; or 
  4.3      (C) property for which a building permit is issued before 
  4.4   July 30, 1999, if: 
  4.5      (I) at least 50 percent of the land on which the structure 
  4.6   is to be built has been acquired or is the subject of signed 
  4.7   purchase agreements as of March 31, 1998, by the entity that 
  4.8   proposes construction of the project or an affiliate of the 
  4.9   entity; 
  4.10     (II) a signed agreement has been entered into between the 
  4.11  building developer and a tenant to lease for its own account at 
  4.12  least 200,000 square feet of space in the building; 
  4.13     (III) a signed letter of intent is entered into by July 1, 
  4.14  1998, between the building developer and the tenant to lease the 
  4.15  space for its own account; and 
  4.16     (IV) the environmental review process required by state law 
  4.17  was commenced by December 31, 1998. 
  4.18     (ii) A structure specified by this clause shall continue to 
  4.19  receive the transit zone reduced class rate until the occurrence 
  4.20  of one of the following events: 
  4.21     (A) if the structure upon initial occupancy will be owner 
  4.22  occupied by the entity initially constructing the structure or 
  4.23  an affiliated entity, the structure shall receive the reduced 
  4.24  class rate until the structure ceases to be at least 50 percent 
  4.25  occupied by the entity or an affiliated entity, provided, if the 
  4.26  portion of the structure occupied by that entity or an affiliate 
  4.27  of the entity is less than 85 percent, the transit zone class 
  4.28  rate reduction for the portion of structure not so occupied 
  4.29  shall terminate upon the leasing of such space to any 
  4.30  nonaffiliated entity; or 
  4.31     (B) if the structure is leased by a single entity or 
  4.32  affiliated entity at the time of initial occupancy, the 
  4.33  structure shall receive the reduced class rate until the 
  4.34  structure ceases to be at least 50 percent occupied by the 
  4.35  entity or an affiliated entity, provided, if the portion of the 
  4.36  structure occupied by that entity or an affiliate of the entity 
  5.1   is less than 85 percent, the transit zone class rate reduction 
  5.2   for the portion of structure not so occupied shall terminate 
  5.3   upon the leasing of such space to any nonaffiliated entity; or 
  5.4      (C) if the structure meets the criteria in item (i)(C), the 
  5.5   structure shall receive the reduced class rate as follows:  as 
  5.6   to the portion of the structure actually leased to a tenant who 
  5.7   is subject to a lease or a signed agreement to lease as of March 
  5.8   1, 1999, the structure shall receive the reduced rate until the 
  5.9   expiration of the initial lease term of the applicable tenants; 
  5.10  and as to the balance of the structure not subject to a lease or 
  5.11  agreement to lease as of March 1, 1999, for taxes assessed for 
  5.12  1999, payable 2000.  
  5.13     Percentages occupied or leased shall be determined based 
  5.14  upon net leasable square footage in the structure.  The assessor 
  5.15  shall allocate the value of the structure in the same fashion as 
  5.16  provided in the general law for portions of any structure 
  5.17  receiving and not receiving the transit tax class reduction as a 
  5.18  result of this clause. 
  5.19     Sec. 2.  [REPEALER.] 
  5.20     Laws 1998, chapter 389, article 3, section 45, is repealed. 
  5.21     Sec. 3.  [EFFECTIVE DATE.] 
  5.22     Section 1 is effective for taxes assessed in 2000, payable 
  5.23  in 2001, and thereafter.  Section 2 is effective the day 
  5.24  following final enactment.