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HF 3671

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

KEY: stricken = removed, old language.
underscored = added, new language.
  1.1                          A bill for an act 
  1.2             relating to taxation; providing a valuation exclusion 
  1.3             for certain improvements to commercial property; 
  1.4             amending Minnesota Statutes 2000, section 273.11, by 
  1.5             adding a subdivision. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 2000, section 273.11, is 
  1.8   amended by adding a subdivision to read: 
  1.9      Subd. 20.  [VALUATION EXCLUSION FOR CERTAIN IMPROVEMENTS TO 
  1.10  COMMERCIAL PROPERTY.] Improvements to commercial property made 
  1.11  before January 2, 2012, shall be fully or partially excluded 
  1.12  from the value of the property for assessment purposes if (1) 
  1.13  the property is at least 45 years old at the time of the 
  1.14  improvement, and (2) the assessor's estimated market value of 
  1.15  the commercial property on January 2 of the current year is 
  1.16  equal to or less than $400,000. 
  1.17     For purposes of determining this eligibility, "commercial 
  1.18  property" means land and buildings.  
  1.19     The age of a commercial property is the number of years 
  1.20  since the original year of its construction.  In the case of 
  1.21  commercial property that is relocated, the relocation must be 
  1.22  from a location within the state and the only improvements 
  1.23  eligible for exclusion under this subdivision are those for 
  1.24  which building permits were issued to the owner after the 
  1.25  commercial property was relocated to its present site, excluding 
  2.1   any market value increase relating to basic improvements that 
  2.2   are necessary to install the commercial property on its 
  2.3   foundation and connect it to utilities at its present site.  
  2.4      If the property lies in a jurisdiction which is subject to 
  2.5   a building permit process, a building permit must have been 
  2.6   issued prior to commencement of the improvement.  The 
  2.7   improvements for a single project or in any one year must add at 
  2.8   least $5,000 to the value of the property to be eligible for 
  2.9   exclusion under this subdivision.  Whenever a building permit is 
  2.10  issued for property currently classified as commercial property, 
  2.11  the issuing jurisdiction shall notify the property owner of the 
  2.12  possibility of valuation exclusion under this subdivision.  The 
  2.13  assessor shall require an application, including documentation 
  2.14  of the age of the commercial property from the owner, if unknown 
  2.15  by the assessor.  The application may be filed subsequent to the 
  2.16  date of the building permit but it must be filed within three 
  2.17  years of the date the building permit was issued for the 
  2.18  improvement.  If the property lies in a jurisdiction which is 
  2.19  not subject to a building permit process, the application must 
  2.20  be filed within three years of the date the improvement was 
  2.21  made.  The assessor may require proof from the taxpayer of the 
  2.22  date the improvement was made.  Applications must be received 
  2.23  prior to July 1 of any year in order to be effective for taxes 
  2.24  payable in the following year. 
  2.25     No exclusion for an improvement may be granted by a local 
  2.26  board of review or county board of equalization, and no 
  2.27  abatement of the taxes for qualifying improvements may be 
  2.28  granted by the county board unless (1) a building permit was 
  2.29  issued prior to the commencement of the improvement if the 
  2.30  jurisdiction requires a building permit, and (2) an application 
  2.31  was completed. 
  2.32     The assessor shall note the qualifying value of each 
  2.33  improvement on the property's record, and the sum of those 
  2.34  amounts shall be subtracted from the value of the property in 
  2.35  each year for ten years after the improvement has been made.  
  2.36  After ten years the amount of the qualifying value shall be 
  3.1   added back as follows: 
  3.2      (1) 50 percent in the two subsequent assessment years if 
  3.3   the qualifying value is equal to or less than $10,000 market 
  3.4   value; or 
  3.5      (2) 20 percent in the five subsequent assessment years if 
  3.6   the qualifying value is greater than $10,000 market value. 
  3.7   If an application is filed after the first assessment date at 
  3.8   which an improvement could have been subject to the valuation 
  3.9   exclusion under this subdivision, the ten-year period during 
  3.10  which the value is subject to exclusion is reduced by the number 
  3.11  of years that have elapsed since the property would have 
  3.12  qualified initially.  The valuation exclusion terminates when 
  3.13  (1) the property is sold, or (2) the property is reclassified to 
  3.14  a class that does not qualify for treatment under this 
  3.15  subdivision. 
  3.16     The total qualifying value for a commercial property may 
  3.17  not exceed $50,000, provided that the total qualifying value for 
  3.18  a commercial property that is less than 70 years old may not 
  3.19  exceed $25,000.  The term "qualifying value" means the increase 
  3.20  in estimated market value resulting from the improvement if the 
  3.21  improvement occurs when the commercial property is at least 70 
  3.22  years old, or one-half of the increase in estimated market value 
  3.23  resulting from the improvement otherwise.  The $25,000 and 
  3.24  $50,000 maximum qualifying value under this subdivision may 
  3.25  result from multiple improvements to the commercial property. 
  3.26     If 50 percent or more of the square footage of a structure 
  3.27  is voluntarily razed or removed, the valuation increase 
  3.28  attributable to any subsequent improvements to the remaining 
  3.29  structure does not qualify for the exclusion under this 
  3.30  subdivision.  If a structure is unintentionally or accidentally 
  3.31  destroyed by a natural disaster, the property is eligible for an 
  3.32  exclusion under this subdivision provided that the structure was 
  3.33  not completely destroyed.  The qualifying value on property 
  3.34  destroyed by a natural disaster shall be computed based upon the 
  3.35  increase from that structure's market value as determined on 
  3.36  January 2 of the year in which the disaster occurred.  If any 
  4.1   combination of improvements made to a structure after January 1, 
  4.2   2002, increases the size of the structure by 100 percent or 
  4.3   more, the valuation increase attributable to the portion of the 
  4.4   improvement that causes the structure's size to exceed 100 
  4.5   percent does not qualify for exclusion under this subdivision. 
  4.6      [EFFECTIVE DATE.] This section is effective for taxes 
  4.7   payable in 2004 and thereafter.