HF 3480

as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; property; limiting market value 
  1.3             growth on all property; phasing in the market value of 
  1.4             new improvements; eliminating the current phase-out of 
  1.5             limited market value; making limited market value 
  1.6             permanent; amending Minnesota Statutes 2001 
  1.7             Supplement, section 273.11, subdivision 1a. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 2001 Supplement, section 
  1.10  273.11, subdivision 1a, is amended to read: 
  1.11     Subd. 1a.  [LIMITED MARKET VALUE.] In the case of all 
  1.12  property classified as agricultural homestead or nonhomestead, 
  1.13  residential homestead or nonhomestead, timber, or noncommercial 
  1.14  seasonal recreational residential, the assessor shall compare 
  1.15  the value with the taxable portion of the value determined in 
  1.16  the preceding assessment.  
  1.17     For assessment year 2002, the amount of the increase shall 
  1.18  not exceed the greater of (1) ten percent of the value in the 
  1.19  preceding assessment, or (2) 15 percent of the difference 
  1.20  between the current assessment and the preceding assessment. 
  1.21     For assessment year 2003, the amount of the increase shall 
  1.22  not exceed the greater of (1) 12 percent of the value in the 
  1.23  preceding assessment, or (2) 20 percent of the difference 
  1.24  between the current assessment and the preceding assessment. 
  1.25     For assessment year 2004, the amount of the increase shall 
  1.26  not exceed the greater of (1) 15 percent of the value in the 
  2.1   preceding assessment, or (2) 25 percent of the difference 
  2.2   between the current assessment and the preceding assessment. 
  2.3      For assessment year 2005, the amount of the increase shall 
  2.4   not exceed the greater of (1) 15 percent of the value in the 
  2.5   preceding assessment, or (2) 33 percent of the difference 
  2.6   between the current assessment and the preceding assessment.  
  2.7      For assessment year 2006, the amount of the increase shall 
  2.8   not exceed the greater of (1) 15 percent of the value in the 
  2.9   preceding assessment, or (2) 50 percent of the difference 
  2.10  between the current assessment and the preceding assessment. 
  2.11     This limitation shall not apply to increases in value due 
  2.12  to improvements.  For purposes of this subdivision, the term 
  2.13  "assessment" means the value prior to any exclusion under 
  2.14  subdivision 16. 
  2.15     The provisions of this subdivision shall be in effect 
  2.16  through assessment year 2006 as provided in this subdivision. (a)
  2.17  The assessor shall establish the taxable market value of each 
  2.18  property by comparing the assessor's current year's estimated 
  2.19  market value of the property with the property's limited market 
  2.20  value for the preceding assessment.  The property's limited 
  2.21  market value for the current assessment year, excluding the 
  2.22  market value of any new improvements as provided in paragraph 
  2.23  (c), is limited according to the following schedule: 
  2.24     (1) in the case of property classified as residential 
  2.25  homestead, residential nonhomestead, agricultural homestead, or 
  2.26  agricultural nonhomestead, the amount of increase entered in the 
  2.27  current assessment must not exceed six percent of the value in 
  2.28  the preceding assessment; and 
  2.29     (2) in the case of all other property not included in 
  2.30  clause (1), the amount of increase entered in the current 
  2.31  assessment must not exceed ten percent of the value in the 
  2.32  preceding assessment. 
  2.33     (b) The limitations in paragraph (a) are in effect 
  2.34  beginning with assessment year 2002, for taxes payable in 2003, 
  2.35  except that in determining the limited market value for taxes 
  2.36  payable in 2003, the assessor shall:  (i) calculate a 
  3.1   hypothetical limited market value for the property for taxes 
  3.2   payable in 2002, as if the limitation in paragraph (a) had been 
  3.3   in effect; and (ii) calculate the limited market value for the 
  3.4   property for taxes payable in 2003, using the previous year's 
  3.5   value determined under item (i). 
  3.6      (c) In the case of improvements made to real property for 
  3.7   assessment year 2002 and subsequent years, the assessor shall 
  3.8   add the market value of the improvements to the property in the 
  3.9   following manner: 
  3.10     (1) if the total value of the improvement is less than 
  3.11  $5,000 market value, the full amount must be added in the 
  3.12  following assessment year; 
  3.13     (2) if the total value of the improvement is equal to or 
  3.14  greater than $5,000 market value, but less than $20,000 market 
  3.15  value, 50 percent of the value must be added in each of the two 
  3.16  subsequent assessments; or 
  3.17     (3) if the total value of the improvement is equal to or 
  3.18  greater than $20,000 market value, 20 percent of the value of 
  3.19  the improvement must be added in each of the five subsequent 
  3.20  assessments. 
  3.21     If more than one improvement is made to the real property 
  3.22  either in the same year or in multiple years, the assessor shall 
  3.23  combine the market value of all improvements that have not yet 
  3.24  been added to the assessment into one total market value amount; 
  3.25  and shall then apply the provisions of clause (1), (2), or (3), 
  3.26  whichever is applicable. 
  3.27     For purposes of this subdivision, "new improvements" are 
  3.28  physical changes made to any existing structure including, but 
  3.29  not limited to, adding square footage or remodeling existing 
  3.30  space.  New improvements do not include new construction in 
  3.31  which either the entire structure is built or the existing 
  3.32  structure's square footage is increased by over 50 percent.  
  3.33     (d) For purposes of this subdivision, the term "assessment" 
  3.34  means the value prior to any exclusion under subdivision 16. 
  3.35     (e) For purposes of the assessment/sales ratio study 
  3.36  conducted under section 127A.48, and the computation of state 
  4.1   aids paid under chapters 122A, 123A, 123B, 124D, 125A, 126C, 
  4.2   127A, and 477A, market values and net tax capacities determined 
  4.3   under this subdivision and subdivision 16, shall be used. 
  4.4      [EFFECTIVE DATE.] This section is effective the day 
  4.5   following final enactment.