HF 4089

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

  1.1                          A bill for an act 
  1.2             relating to property taxation; reducing class rates; 
  1.3             modifying the education homestead credit and the 
  1.4             education agricultural credit; changing limited market 
  1.5             value; changing the calculation of levy limits to 
  1.6             eliminate the deduction for certain mining tax 
  1.7             distributions; extending levy limits; amending 
  1.8             Minnesota Statutes 1998, section 275.72, subdivision 
  1.9             1; Minnesota Statutes 1999 Supplement, sections 
  1.10            273.11, subdivision 1a; 273.13, subdivisions 22, 23, 
  1.11            24, 25, and 31; 273.1382, subdivisions 1, 1a, and 1b; 
  1.12            and 275.71, subdivisions 2, 3, and 4; repealing 
  1.13            Minnesota Statutes 1999 Supplement, section 273.13, 
  1.14            subdivision 24a. 
  1.15  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.16     Section 1.  Minnesota Statutes 1999 Supplement, section 
  1.17  273.11, subdivision 1a, is amended to read: 
  1.18     Subd. 1a.  [LIMITED MARKET VALUE.] In the case of all 
  1.19  property classified as agricultural homestead or nonhomestead, 
  1.20  residential homestead or nonhomestead, or noncommercial seasonal 
  1.21  recreational residential, the assessor shall compare the value 
  1.22  with that determined in the preceding assessment.  The amount of 
  1.23  the increase entered in the current assessment shall not exceed 
  1.24  the greater of (1) 8.5 seven percent of the value in the 
  1.25  preceding assessment, or (2) 15 percent of the difference 
  1.26  between the current assessment and the preceding assessment.  
  1.27  This limitation shall not apply to increases in value due to 
  1.28  improvements.  For purposes of this subdivision, the term 
  1.29  "assessment" means the value prior to any exclusion under 
  1.30  subdivision 16. 
  2.1      The provisions of this subdivision shall be in effect only 
  2.2   through assessment year 2001. 
  2.3      For purposes of the assessment/sales ratio study conducted 
  2.4   under section 127A.48, and the computation of state aids paid 
  2.5   under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and 
  2.6   477A, market values and net tax capacities value limitations 
  2.7   determined under this subdivision and subdivision 16, shall 
  2.8   be used disregarded. 
  2.9      Sec. 2.  Minnesota Statutes 1999 Supplement, section 
  2.10  273.13, subdivision 22, is amended to read: 
  2.11     Subd. 22.  [CLASS 1.] (a) Except as provided in subdivision 
  2.12  23, real estate which is residential and used for homestead 
  2.13  purposes is class 1.  The market value of class 1a property must 
  2.14  be determined based upon the value of the house, garage, and 
  2.15  land.  
  2.16     The first $76,000 tier of market value of class 1a property 
  2.17  has a net class rate of one percent of its market value; and the 
  2.18  remaining market value of class 1a property that exceeds $76,000 
  2.19  has a class rate of 1.65 1.5 percent of its market value.  For 
  2.20  the purposes of this subdivision, the first tier means the first 
  2.21  $76,000 of market value. 
  2.22     (b) Class 1b property includes homestead real estate or 
  2.23  homestead manufactured homes used for the purposes of a 
  2.24  homestead by 
  2.25     (1) any blind person, or the blind person and the blind 
  2.26  person's spouse; or 
  2.27     (2) any person, hereinafter referred to as "veteran," who: 
  2.28     (i) served in the active military or naval service of the 
  2.29  United States; and 
  2.30     (ii) is entitled to compensation under the laws and 
  2.31  regulations of the United States for permanent and total 
  2.32  service-connected disability due to the loss, or loss of use, by 
  2.33  reason of amputation, ankylosis, progressive muscular 
  2.34  dystrophies, or paralysis, of both lower extremities, such as to 
  2.35  preclude motion without the aid of braces, crutches, canes, or a 
  2.36  wheelchair; and 
  3.1      (iii) has acquired a special housing unit with special 
  3.2   fixtures or movable facilities made necessary by the nature of 
  3.3   the veteran's disability, or the surviving spouse of the 
  3.4   deceased veteran for as long as the surviving spouse retains the 
  3.5   special housing unit as a homestead; or 
  3.6      (3) any person who: 
  3.7      (i) is permanently and totally disabled and 
  3.8      (ii) receives 90 percent or more of total household income, 
  3.9   as defined in section 290A.03, subdivision 5, from 
  3.10     (A) aid from any state as a result of that disability; or 
  3.11     (B) supplemental security income for the disabled; or 
  3.12     (C) workers' compensation based on a finding of total and 
  3.13  permanent disability; or 
  3.14     (D) social security disability, including the amount of a 
  3.15  disability insurance benefit which is converted to an old age 
  3.16  insurance benefit and any subsequent cost of living increases; 
  3.17  or 
  3.18     (E) aid under the federal Railroad Retirement Act of 1937, 
  3.19  United States Code Annotated, title 45, section 228b(a)5; or 
  3.20     (F) a pension from any local government retirement fund 
  3.21  located in the state of Minnesota as a result of that 
  3.22  disability; or 
  3.23     (G) pension, annuity, or other income paid as a result of 
  3.24  that disability from a private pension or disability plan, 
  3.25  including employer, employee, union, and insurance plans and 
  3.26     (iii) has household income as defined in section 290A.03, 
  3.27  subdivision 5, of $50,000 or less; or 
  3.28     (4) any person who is permanently and totally disabled and 
  3.29  whose household income as defined in section 290A.03, 
  3.30  subdivision 5, is 275 percent or less of the federal poverty 
  3.31  level. 
  3.32     Property is classified and assessed under clause (4) only 
  3.33  if the government agency or income-providing source certifies, 
  3.34  upon the request of the homestead occupant, that the homestead 
  3.35  occupant satisfies the disability requirements of this paragraph.
  3.36     Property is classified and assessed pursuant to clause (1) 
  4.1   only if the commissioner of economic security certifies to the 
  4.2   assessor that the homestead occupant satisfies the requirements 
  4.3   of this paragraph.  
  4.4      Permanently and totally disabled for the purpose of this 
  4.5   subdivision means a condition which is permanent in nature and 
  4.6   totally incapacitates the person from working at an occupation 
  4.7   which brings the person an income.  The first $32,000 market 
  4.8   value of class 1b property has a net class rate of .45 percent 
  4.9   of its market value.  The remaining market value of class 1b 
  4.10  property has a net class rate using the rates for class 1 or 
  4.11  class 2a property, whichever is appropriate, of similar market 
  4.12  value.  
  4.13     (c) Class 1c property is commercial use real property that 
  4.14  abuts a lakeshore line and is devoted to temporary and seasonal 
  4.15  residential occupancy for recreational purposes but not devoted 
  4.16  to commercial purposes for more than 250 days in the year 
  4.17  preceding the year of assessment, and that includes a portion 
  4.18  used as a homestead by the owner, which includes a dwelling 
  4.19  occupied as a homestead by a shareholder of a corporation that 
  4.20  owns the resort or a partner in a partnership that owns the 
  4.21  resort, even if the title to the homestead is held by the 
  4.22  corporation or partnership.  For purposes of this clause, 
  4.23  property is devoted to a commercial purpose on a specific day if 
  4.24  any portion of the property, excluding the portion used 
  4.25  exclusively as a homestead, is used for residential occupancy 
  4.26  and a fee is charged for residential occupancy.  Class 1c 
  4.27  property has a class rate of one percent of total market value 
  4.28  with the following limitation:  the area of the property must 
  4.29  not exceed 100 feet of lakeshore footage for each cabin or 
  4.30  campsite located on the property up to a total of 800 feet and 
  4.31  500 feet in depth, measured away from the lakeshore.  If any 
  4.32  portion of the class 1c resort property is classified as class 
  4.33  4c under subdivision 25, the entire property must meet the 
  4.34  requirements of subdivision 25, paragraph (d), clause (1), to 
  4.35  qualify for class 1c treatment under this paragraph. 
  4.36     (d) Class 1d property includes structures that meet all of 
  5.1   the following criteria: 
  5.2      (1) the structure is located on property that is classified 
  5.3   as agricultural property under section 273.13, subdivision 23; 
  5.4      (2) the structure is occupied exclusively by seasonal farm 
  5.5   workers during the time when they work on that farm, and the 
  5.6   occupants are not charged rent for the privilege of occupying 
  5.7   the property, provided that use of the structure for storage of 
  5.8   farm equipment and produce does not disqualify the property from 
  5.9   classification under this paragraph; 
  5.10     (3) the structure meets all applicable health and safety 
  5.11  requirements for the appropriate season; and 
  5.12     (4) the structure is not salable as residential property 
  5.13  because it does not comply with local ordinances relating to 
  5.14  location in relation to streets or roads. 
  5.15     The market value of class 1d property has the same class 
  5.16  rates as class 1a property under paragraph (a). 
  5.17     Sec. 3.  Minnesota Statutes 1999 Supplement, section 
  5.18  273.13, subdivision 23, is amended to read: 
  5.19     Subd. 23.  [CLASS 2.] (a) Class 2a property is agricultural 
  5.20  land including any improvements that is homesteaded.  The market 
  5.21  value of the house and garage and immediately surrounding one 
  5.22  acre of land has the same class rates as class 1a property under 
  5.23  subdivision 22.  The value of the remaining land including 
  5.24  improvements up to $115,000 has a net class rate of 0.35 percent 
  5.25  of market value.  The value of class 2a property over $115,000 
  5.26  of market value up to and including $600,000 market value has a 
  5.27  net class rate of 0.8 0.75 percent of market value.  The 
  5.28  remaining property over $600,000 market value has a class rate 
  5.29  of 1.20 one percent of market value. 
  5.30     (b) Class 2b property is (1) real estate, rural in 
  5.31  character and used exclusively for growing trees for timber, 
  5.32  lumber, and wood and wood products; (2) real estate that is not 
  5.33  improved with a structure and is used exclusively for growing 
  5.34  trees for timber, lumber, and wood and wood products, if the 
  5.35  owner has participated or is participating in a cost-sharing 
  5.36  program for afforestation, reforestation, or timber stand 
  6.1   improvement on that particular property, administered or 
  6.2   coordinated by the commissioner of natural resources; (3) real 
  6.3   estate that is nonhomestead agricultural land; or (4) a landing 
  6.4   area or public access area of a privately owned public use 
  6.5   airport.  Class 2b property has a net class rate of 1.20 one 
  6.6   percent of market value. 
  6.7      (c) Agricultural land as used in this section means 
  6.8   contiguous acreage of ten acres or more, used during the 
  6.9   preceding year for agricultural purposes.  "Agricultural 
  6.10  purposes" as used in this section means the raising or 
  6.11  cultivation of agricultural products or enrollment in the 
  6.12  Reinvest in Minnesota program under sections 103F.501 to 
  6.13  103F.535 or the federal Conservation Reserve Program as 
  6.14  contained in Public Law Number 99-198.  Contiguous acreage on 
  6.15  the same parcel, or contiguous acreage on an immediately 
  6.16  adjacent parcel under the same ownership, may also qualify as 
  6.17  agricultural land, but only if it is pasture, timber, waste, 
  6.18  unusable wild land, or land included in state or federal farm 
  6.19  programs.  Agricultural classification for property shall be 
  6.20  determined excluding the house, garage, and immediately 
  6.21  surrounding one acre of land, and shall not be based upon the 
  6.22  market value of any residential structures on the parcel or 
  6.23  contiguous parcels under the same ownership. 
  6.24     (d) Real estate, excluding the house, garage, and 
  6.25  immediately surrounding one acre of land, of less than ten acres 
  6.26  which is exclusively and intensively used for raising or 
  6.27  cultivating agricultural products, shall be considered as 
  6.28  agricultural land.  
  6.29     Land shall be classified as agricultural even if all or a 
  6.30  portion of the agricultural use of that property is the leasing 
  6.31  to, or use by another person for agricultural purposes. 
  6.32     Classification under this subdivision is not determinative 
  6.33  for qualifying under section 273.111. 
  6.34     The property classification under this section supersedes, 
  6.35  for property tax purposes only, any locally administered 
  6.36  agricultural policies or land use restrictions that define 
  7.1   minimum or maximum farm acreage. 
  7.2      (e) The term "agricultural products" as used in this 
  7.3   subdivision includes production for sale of:  
  7.4      (1) livestock, dairy animals, dairy products, poultry and 
  7.5   poultry products, fur-bearing animals, horticultural and nursery 
  7.6   stock described in sections 18.44 to 18.61, fruit of all kinds, 
  7.7   vegetables, forage, grains, bees, and apiary products by the 
  7.8   owner; 
  7.9      (2) fish bred for sale and consumption if the fish breeding 
  7.10  occurs on land zoned for agricultural use; 
  7.11     (3) the commercial boarding of horses if the boarding is 
  7.12  done in conjunction with raising or cultivating agricultural 
  7.13  products as defined in clause (1); 
  7.14     (4) property which is owned and operated by nonprofit 
  7.15  organizations used for equestrian activities, excluding racing; 
  7.16     (5) game birds and waterfowl bred and raised for use on a 
  7.17  shooting preserve licensed under section 97A.115; 
  7.18     (6) insects primarily bred to be used as food for animals; 
  7.19  and 
  7.20     (7) trees, grown for sale as a crop, and not sold for 
  7.21  timber, lumber, wood, or wood products. 
  7.22     (f) If a parcel used for agricultural purposes is also used 
  7.23  for commercial or industrial purposes, including but not limited 
  7.24  to:  
  7.25     (1) wholesale and retail sales; 
  7.26     (2) processing of raw agricultural products or other goods; 
  7.27     (3) warehousing or storage of processed goods; and 
  7.28     (4) office facilities for the support of the activities 
  7.29  enumerated in clauses (1), (2), and (3), 
  7.30  the assessor shall classify the part of the parcel used for 
  7.31  agricultural purposes as class 1b, 2a, or 2b, whichever is 
  7.32  appropriate, and the remainder in the class appropriate to its 
  7.33  use.  The grading, sorting, and packaging of raw agricultural 
  7.34  products for first sale is considered an agricultural purpose.  
  7.35  A greenhouse or other building where horticultural or nursery 
  7.36  products are grown that is also used for the conduct of retail 
  8.1   sales must be classified as agricultural if it is primarily used 
  8.2   for the growing of horticultural or nursery products from seed, 
  8.3   cuttings, or roots and occasionally as a showroom for the retail 
  8.4   sale of those products.  Use of a greenhouse or building only 
  8.5   for the display of already grown horticultural or nursery 
  8.6   products does not qualify as an agricultural purpose.  
  8.7      The assessor shall determine and list separately on the 
  8.8   records the market value of the homestead dwelling and the one 
  8.9   acre of land on which that dwelling is located.  If any farm 
  8.10  buildings or structures are located on this homesteaded acre of 
  8.11  land, their market value shall not be included in this separate 
  8.12  determination.  
  8.13     (g) To qualify for classification under paragraph (b), 
  8.14  clause (4), a privately owned public use airport must be 
  8.15  licensed as a public airport under section 360.018.  For 
  8.16  purposes of paragraph (b), clause (4), "landing area" means that 
  8.17  part of a privately owned public use airport properly cleared, 
  8.18  regularly maintained, and made available to the public for use 
  8.19  by aircraft and includes runways, taxiways, aprons, and sites 
  8.20  upon which are situated landing or navigational aids.  A landing 
  8.21  area also includes land underlying both the primary surface and 
  8.22  the approach surfaces that comply with all of the following:  
  8.23     (i) the land is properly cleared and regularly maintained 
  8.24  for the primary purposes of the landing, taking off, and taxiing 
  8.25  of aircraft; but that portion of the land that contains 
  8.26  facilities for servicing, repair, or maintenance of aircraft is 
  8.27  not included as a landing area; 
  8.28     (ii) the land is part of the airport property; and 
  8.29     (iii) the land is not used for commercial or residential 
  8.30  purposes. 
  8.31  The land contained in a landing area under paragraph (b), clause 
  8.32  (4), must be described and certified by the commissioner of 
  8.33  transportation.  The certification is effective until it is 
  8.34  modified, or until the airport or landing area no longer meets 
  8.35  the requirements of paragraph (b), clause (4).  For purposes of 
  8.36  paragraph (b), clause (4), "public access area" means property 
  9.1   used as an aircraft parking ramp, apron, or storage hangar, or 
  9.2   an arrival and departure building in connection with the airport.
  9.3      Sec. 4.  Minnesota Statutes 1999 Supplement, section 
  9.4   273.13, subdivision 24, is amended to read: 
  9.5      Subd. 24.  [CLASS 3.] (a) Commercial and industrial 
  9.6   property and utility real and personal property is class 3a.  
  9.7   Each parcel of real property has a class rate of 2.4 two percent 
  9.8   of the first tier of market value, and 3.4 three percent of the 
  9.9   remaining market value, except that in the case of contiguous 
  9.10  parcels of property owned by the same person or entity, only the 
  9.11  value equal to the first-tier value of the contiguous parcels 
  9.12  qualifies for the reduced class rate.  For the purposes of this 
  9.13  subdivision, the first tier means the first $150,000 of market 
  9.14  value.  Real property owned in fee by a utility for transmission 
  9.15  line right-of-way shall be classified at the class rate for the 
  9.16  higher tier.  All personal property shall be classified at the 
  9.17  class rate for the higher tier.  For purposes of this 
  9.18  subdivision "personal property" means tools, implements, and 
  9.19  machinery of an electric generating, transmission, or 
  9.20  distribution system, or a pipeline system transporting or 
  9.21  distributing water, gas, crude oil, or petroleum products or 
  9.22  mains and pipes used in the distribution of steam or hot or 
  9.23  chilled water for heating or cooling buildings, which are 
  9.24  fixtures. 
  9.25     For purposes of this paragraph, parcels are considered to 
  9.26  be contiguous even if they are separated from each other by a 
  9.27  road, street, vacant lot, waterway, or other similar intervening 
  9.28  type of property. 
  9.29     (b) Employment property defined in section 469.166, during 
  9.30  the period provided in section 469.170, shall constitute class 
  9.31  3b.  The class rates for class 3b property are determined under 
  9.32  paragraph (a). 
  9.33     (c)(1) Subject to the limitations of clause (2), structures 
  9.34  which are (i) located on property classified as class 3a, (ii) 
  9.35  constructed under an initial building permit issued after 
  9.36  January 2, 1996, (iii) located in a transit zone as defined 
 10.1   under section 473.3915, subdivision 3, (iv) located within the 
 10.2   boundaries of a school district, and (v) not primarily used for 
 10.3   retail or transient lodging purposes, shall have a class rate 
 10.4   equal to the lesser of 2.975 percent or the class rate of the 
 10.5   second tier of the commercial property rate under paragraph (a) 
 10.6   on any portion of the market value that does not qualify for the 
 10.7   first tier class rate under paragraph (a).  As used in item (v), 
 10.8   a structure is primarily used for retail or transient lodging 
 10.9   purposes if over 50 percent of its square footage is used for 
 10.10  those purposes.  A class rate equal to the lesser of 2.975 
 10.11  percent or the class rate of the second tier of the commercial 
 10.12  property class rate under paragraph (a) shall also apply to 
 10.13  improvements to existing structures that meet the requirements 
 10.14  of items (i) to (v) if the improvements are constructed under an 
 10.15  initial building permit issued after January 2, 1996, even if 
 10.16  the remainder of the structure was constructed prior to January 
 10.17  2, 1996.  For the purposes of this paragraph, a structure shall 
 10.18  be considered to be located in a transit zone if any portion of 
 10.19  the structure lies within the zone.  If any property once 
 10.20  eligible for treatment under this paragraph ceases to remain 
 10.21  eligible due to revisions in transit zone boundaries, the 
 10.22  property shall continue to receive treatment under this 
 10.23  paragraph for a period of three years. 
 10.24     (2) This clause applies to any structure qualifying for the 
 10.25  transit zone reduced class rate under clause (1) on January 2, 
 10.26  1999, or any structure meeting any of the qualification criteria 
 10.27  in item (i) and otherwise qualifying for the transit zone 
 10.28  reduced class rate under clause (1).  Such a structure continues 
 10.29  to receive the transit zone reduced class rate until the 
 10.30  occurrence of one of the events in item (ii).  Property 
 10.31  qualifying under item (i)(D), that is located outside of a city 
 10.32  of the first class, qualifies for the transit zone reduced class 
 10.33  rate as provided in that item.  Property qualifying under item 
 10.34  (i)(E) qualifies for the transit zone reduced class rate as 
 10.35  provided in that item. 
 10.36     (i) A structure qualifies for the rate in this clause if it 
 11.1   is: 
 11.2      (A) property for which a building permit was issued before 
 11.3   December 31, 1998; or 
 11.4      (B) property for which a building permit was issued before 
 11.5   June 30, 2001, if: 
 11.6      (I) at least 50 percent of the land on which the structure 
 11.7   is to be built has been acquired or is the subject of signed 
 11.8   purchase agreements or signed options as of March 15, 1998, by 
 11.9   the entity that proposes construction of the project or an 
 11.10  affiliate of the entity; 
 11.11     (II) signed agreements have been entered into with one 
 11.12  entity or with affiliated entities to lease for the account of 
 11.13  the entity or affiliated entities at least 50 percent of the 
 11.14  square footage of the structure or the owner of the structure 
 11.15  will occupy at least 50 percent of the square footage of the 
 11.16  structure; and 
 11.17     (III) one of the following requirements is met: 
 11.18     the project proposer has submitted the completed data 
 11.19  portions of an environmental assessment worksheet by December 
 11.20  31, 1998; or 
 11.21     a notice of determination of adequacy of an environmental 
 11.22  impact statement has been published by April 1, 1999; or 
 11.23     an alternative urban areawide review has been completed by 
 11.24  April 1, 1999; or 
 11.25     (C) property for which a building permit is issued before 
 11.26  July 30, 1999, if: 
 11.27     (I) at least 50 percent of the land on which the structure 
 11.28  is to be built has been acquired or is the subject of signed 
 11.29  purchase agreements as of March 31, 1998, by the entity that 
 11.30  proposes construction of the project or an affiliate of the 
 11.31  entity; 
 11.32     (II) a signed agreement has been entered into between the 
 11.33  building developer and a tenant to lease for its own account at 
 11.34  least 200,000 square feet of space in the building; 
 11.35     (III) a signed letter of intent is entered into by July 1, 
 11.36  1998, between the building developer and the tenant to lease the 
 12.1   space for its own account; and 
 12.2      (IV) the environmental review process required by state law 
 12.3   was commenced by December 31, 1998; 
 12.4      (D) property for which an irrevocable letter of credit with 
 12.5   a housing and redevelopment authority was signed before December 
 12.6   31, 1998.  The structure shall receive the transit zone reduced 
 12.7   class rate during construction and for the duration of time that 
 12.8   the original tenants remain in the building.  Any unoccupied net 
 12.9   leasable square footage that is not leased within 36 months 
 12.10  after the certificate of occupancy has been issued for the 
 12.11  building shall not be eligible to receive the reduced class 
 12.12  rate.  This reduced class rate applies only if the entity that 
 12.13  constructed the structure continues to own the property; 
 12.14     (E) property, located in a city of the first class, and for 
 12.15  which the building permits for the excavation, the parking ramp, 
 12.16  and the office tower were issued prior to April 1, 1999, shall 
 12.17  receive the reduced class rate during construction and for the 
 12.18  first five assessment years immediately following its initial 
 12.19  occupancy provided that, when completed, at least 25 percent of 
 12.20  the net leasable square footage must be occupied by the entity 
 12.21  or the parent entity constructing the structure each year during 
 12.22  this time period.  In order to receive the reduced class rate on 
 12.23  the structure in any subsequent assessment years, at least 50 
 12.24  percent of the rentable square footage must be occupied by the 
 12.25  entity or the parent entity that constructed the structure.  
 12.26  This reduced class rate applies only if the entity or the parent 
 12.27  entity that constructed the structure continues to own the 
 12.28  property. 
 12.29     (ii) A structure specified by this clause, other than a 
 12.30  structure qualifying under clause (i)(D) or (E), shall continue 
 12.31  to receive the transit zone reduced class rate until the 
 12.32  occurrence of one of the following events: 
 12.33     (A) if the structure upon initial occupancy will be owner 
 12.34  occupied by the entity initially constructing the structure or 
 12.35  an affiliated entity, the structure receives the reduced class 
 12.36  rate until the structure ceases to be at least 50 percent 
 13.1   occupied by the entity or an affiliated entity, provided, if the 
 13.2   portion of the structure occupied by that entity or an affiliate 
 13.3   of the entity is less than 85 percent, the transit zone class 
 13.4   rate reduction for the portion of structure not so occupied 
 13.5   terminates upon the leasing of such space to any nonaffiliated 
 13.6   entity; or 
 13.7      (B) if the structure is leased by a single entity or 
 13.8   affiliated entity at the time of initial occupancy, the 
 13.9   structure shall receive the reduced class rate until the 
 13.10  structure ceases to be at least 50 percent occupied by the 
 13.11  entity or an affiliated entity, provided, if the portion of the 
 13.12  structure occupied by that entity or an affiliate of the entity 
 13.13  is less than 85 percent, the transit zone class rate reduction 
 13.14  for the portion of structure not so occupied shall terminate 
 13.15  upon the leasing of such space to any nonaffiliated entity; or 
 13.16     (C) if the structure meets the criteria in item (i)(C), the 
 13.17  structure shall receive the reduced class rate until the 
 13.18  expiration of the initial lease term of the applicable tenants. 
 13.19     Percentages occupied or leased shall be determined based 
 13.20  upon net leasable square footage in the structure.  The assessor 
 13.21  shall allocate the value of the structure in the same fashion as 
 13.22  provided in the general law for portions of any structure 
 13.23  receiving and not receiving the transit tax class reduction as a 
 13.24  result of this clause. 
 13.25     Sec. 5.  Minnesota Statutes 1999 Supplement, section 
 13.26  273.13, subdivision 25, is amended to read: 
 13.27     Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
 13.28  estate containing four or more units and used or held for use by 
 13.29  the owner or by the tenants or lessees of the owner as a 
 13.30  residence for rental periods of 30 days or more.  Class 4a also 
 13.31  includes hospitals licensed under sections 144.50 to 144.56, 
 13.32  other than hospitals exempt under section 272.02, and contiguous 
 13.33  property used for hospital purposes, without regard to whether 
 13.34  the property has been platted or subdivided.  Class 4a property 
 13.35  in a city with a population of 5,000 or less, that is (1) 
 13.36  located outside of the metropolitan area, as defined in section 
 14.1   473.121, subdivision 2, or outside any county contiguous to the 
 14.2   metropolitan area, and (2) whose city boundary is at least 15 
 14.3   miles from the boundary of any city with a population greater 
 14.4   than 5,000 has a class rate of 2.15 percent of market value.  
 14.5   All other class 4a property has a class rate of 2.4 two percent 
 14.6   of market value.  For purposes of this paragraph, population has 
 14.7   the same meaning given in section 477A.011, subdivision 3. 
 14.8      (b) Class 4b includes: 
 14.9      (1) residential real estate containing less than four units 
 14.10  that does not qualify as class 4bb, other than seasonal 
 14.11  residential, and recreational; 
 14.12     (2) manufactured homes not classified under any other 
 14.13  provision; 
 14.14     (3) a dwelling, garage, and surrounding one acre of 
 14.15  property on a nonhomestead farm classified under subdivision 23, 
 14.16  paragraph (b) containing two or three units; 
 14.17     (4) unimproved property that is classified residential as 
 14.18  determined under subdivision 33.  
 14.19     Class 4b property has a class rate of 1.65 1.5 percent of 
 14.20  market value.  
 14.21     (c) Class 4bb includes: 
 14.22     (1) nonhomestead residential real estate containing one 
 14.23  unit, other than seasonal residential, and recreational; and 
 14.24     (2) a single family dwelling, garage, and surrounding one 
 14.25  acre of property on a nonhomestead farm classified under 
 14.26  subdivision 23, paragraph (b). 
 14.27     Class 4bb has a class rate of 1.2 one percent on the first 
 14.28  $76,000 of market value and a class rate of 1.65 1.5 percent of 
 14.29  its market value that exceeds $76,000. 
 14.30     Property that has been classified as seasonal recreational 
 14.31  residential property at any time during which it has been owned 
 14.32  by the current owner or spouse of the current owner does not 
 14.33  qualify for class 4bb. 
 14.34     (d) Class 4c property includes: 
 14.35     (1) except as provided in subdivision 22, paragraph (c), 
 14.36  real property devoted to temporary and seasonal residential 
 15.1   occupancy for recreation purposes, including real property 
 15.2   devoted to temporary and seasonal residential occupancy for 
 15.3   recreation purposes and not devoted to commercial purposes for 
 15.4   more than 250 days in the year preceding the year of 
 15.5   assessment.  For purposes of this clause, property is devoted to 
 15.6   a commercial purpose on a specific day if any portion of the 
 15.7   property is used for residential occupancy, and a fee is charged 
 15.8   for residential occupancy.  In order for a property to be 
 15.9   classified as class 4c, seasonal recreational residential for 
 15.10  commercial purposes, at least 40 percent of the annual gross 
 15.11  lodging receipts related to the property must be from business 
 15.12  conducted during 90 consecutive days and either (i) at least 60 
 15.13  percent of all paid bookings by lodging guests during the year 
 15.14  must be for periods of at least two consecutive nights; or (ii) 
 15.15  at least 20 percent of the annual gross receipts must be from 
 15.16  charges for rental of fish houses, boats and motors, 
 15.17  snowmobiles, downhill or cross-country ski equipment, or charges 
 15.18  for marina services, launch services, and guide services, or the 
 15.19  sale of bait and fishing tackle.  For purposes of this 
 15.20  determination, a paid booking of five or more nights shall be 
 15.21  counted as two bookings.  Class 4c also includes commercial use 
 15.22  real property used exclusively for recreational purposes in 
 15.23  conjunction with class 4c property devoted to temporary and 
 15.24  seasonal residential occupancy for recreational purposes, up to 
 15.25  a total of two acres, provided the property is not devoted to 
 15.26  commercial recreational use for more than 250 days in the year 
 15.27  preceding the year of assessment and is located within two miles 
 15.28  of the class 4c property with which it is used.  Class 4c 
 15.29  property classified in this clause also includes the remainder 
 15.30  of class 1c resorts provided that the entire property including 
 15.31  that portion of the property classified as class 1c also meets 
 15.32  the requirements for class 4c under this clause; otherwise the 
 15.33  entire property is classified as class 3.  Owners of real 
 15.34  property devoted to temporary and seasonal residential occupancy 
 15.35  for recreation purposes and all or a portion of which was 
 15.36  devoted to commercial purposes for not more than 250 days in the 
 16.1   year preceding the year of assessment desiring classification as 
 16.2   class 1c or 4c, must submit a declaration to the assessor 
 16.3   designating the cabins or units occupied for 250 days or less in 
 16.4   the year preceding the year of assessment by January 15 of the 
 16.5   assessment year.  Those cabins or units and a proportionate 
 16.6   share of the land on which they are located will be designated 
 16.7   class 1c or 4c as otherwise provided.  The remainder of the 
 16.8   cabins or units and a proportionate share of the land on which 
 16.9   they are located will be designated as class 3a.  The owner of 
 16.10  property desiring designation as class 1c or 4c property must 
 16.11  provide guest registers or other records demonstrating that the 
 16.12  units for which class 1c or 4c designation is sought were not 
 16.13  occupied for more than 250 days in the year preceding the 
 16.14  assessment if so requested.  The portion of a property operated 
 16.15  as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 
 16.16  nonresidential facility operated on a commercial basis not 
 16.17  directly related to temporary and seasonal residential occupancy 
 16.18  for recreation purposes shall not qualify for class 1c or 4c; 
 16.19     (2) qualified property used as a golf course if: 
 16.20     (i) it is open to the public on a daily fee basis.  It may 
 16.21  charge membership fees or dues, but a membership fee may not be 
 16.22  required in order to use the property for golfing, and its green 
 16.23  fees for golfing must be comparable to green fees typically 
 16.24  charged by municipal courses; and 
 16.25     (ii) it meets the requirements of section 273.112, 
 16.26  subdivision 3, paragraph (d). 
 16.27     A structure used as a clubhouse, restaurant, or place of 
 16.28  refreshment in conjunction with the golf course is classified as 
 16.29  class 3a property; 
 16.30     (3) real property up to a maximum of one acre of land owned 
 16.31  by a nonprofit community service oriented organization; provided 
 16.32  that the property is not used for a revenue-producing activity 
 16.33  for more than six days in the calendar year preceding the year 
 16.34  of assessment and the property is not used for residential 
 16.35  purposes on either a temporary or permanent basis.  For purposes 
 16.36  of this clause, a "nonprofit community service oriented 
 17.1   organization" means any corporation, society, association, 
 17.2   foundation, or institution organized and operated exclusively 
 17.3   for charitable, religious, fraternal, civic, or educational 
 17.4   purposes, and which is exempt from federal income taxation 
 17.5   pursuant to section 501(c)(3), (10), or (19) of the Internal 
 17.6   Revenue Code of 1986, as amended through December 31, 1990.  For 
 17.7   purposes of this clause, "revenue-producing activities" shall 
 17.8   include but not be limited to property or that portion of the 
 17.9   property that is used as an on-sale intoxicating liquor or 3.2 
 17.10  percent malt liquor establishment licensed under chapter 340A, a 
 17.11  restaurant open to the public, bowling alley, a retail store, 
 17.12  gambling conducted by organizations licensed under chapter 349, 
 17.13  an insurance business, or office or other space leased or rented 
 17.14  to a lessee who conducts a for-profit enterprise on the 
 17.15  premises.  Any portion of the property which is used for 
 17.16  revenue-producing activities for more than six days in the 
 17.17  calendar year preceding the year of assessment shall be assessed 
 17.18  as class 3a.  The use of the property for social events open 
 17.19  exclusively to members and their guests for periods of less than 
 17.20  24 hours, when an admission is not charged nor any revenues are 
 17.21  received by the organization shall not be considered a 
 17.22  revenue-producing activity; 
 17.23     (4) post-secondary student housing of not more than one 
 17.24  acre of land that is owned by a nonprofit corporation organized 
 17.25  under chapter 317A and is used exclusively by a student 
 17.26  cooperative, sorority, or fraternity for on-campus housing or 
 17.27  housing located within two miles of the border of a college 
 17.28  campus; 
 17.29     (5) manufactured home parks as defined in section 327.14, 
 17.30  subdivision 3; and 
 17.31     (6) real property that is actively and exclusively devoted 
 17.32  to indoor fitness, health, social, recreational, and related 
 17.33  uses, is owned and operated by a not-for-profit corporation, and 
 17.34  is located within the metropolitan area as defined in section 
 17.35  473.121, subdivision 2. 
 17.36     Class 4c property has a class rate of 1.65 1.5 percent of 
 18.1   market value, except that (i) each parcel of seasonal 
 18.2   residential recreational property not used for commercial 
 18.3   purposes has the same class rates as class 4bb property, (ii) 
 18.4   manufactured home parks assessed under clause (5) have the same 
 18.5   class rate as class 4b property, and (iii) property described in 
 18.6   paragraph (d), clause (4), has the same class rate as the rate 
 18.7   applicable to the first tier of class 4bb nonhomestead 
 18.8   residential real estate under paragraph (c).  
 18.9      (e) Class 4d property is qualifying low-income rental 
 18.10  housing certified to the assessor by the housing finance agency 
 18.11  under sections 273.126 and 462A.071.  Class 4d includes land in 
 18.12  proportion to the total market value of the building that is 
 18.13  qualifying low-income rental housing.  For all properties 
 18.14  qualifying as class 4d, the market value determined by the 
 18.15  assessor must be based on the normal approach to value using 
 18.16  normal unrestricted rents. 
 18.17     Class 4d property has a class rate of one percent of market 
 18.18  value.  
 18.19     Sec. 6.  Minnesota Statutes 1999 Supplement, section 
 18.20  273.13, subdivision 31, is amended to read: 
 18.21     Subd. 31.  [CLASS 5.] Class 5 property includes:  
 18.22     (1) unmined iron ore and low-grade iron-bearing formations 
 18.23  as defined in section 273.14; and 
 18.24     (2) all other property not otherwise classified. 
 18.25     Class 5 property has a class rate of 3.4 three percent of 
 18.26  market value. 
 18.27     Sec. 7.  Minnesota Statutes 1999 Supplement, section 
 18.28  273.1382, subdivision 1, is amended to read: 
 18.29     Subdivision 1.  [EDUCATION CREDIT TAX RATE.] Each year, the 
 18.30  respective county auditors shall determine the general education 
 18.31  credit tax rate for each school district as the sum of:  (i) the 
 18.32  district's initial tax rate for each school district for the 
 18.33  general education levy certified under section 126C.13, 
 18.34  subdivision 2 or 3.  That rate plus; (ii) the school district's 
 18.35  education homestead credit tax rate adjustment under section 
 18.36  275.08, subdivision 1e, shall be the general education credit 
 19.1   tax rate for the district; and (iii) the rate obtained by 
 19.2   dividing an amount equal to 12 percent of the district's 
 19.3   adjusted net tax capacity by the district's taxable net tax 
 19.4   capacity plus its distribution net tax capacity, if any, under 
 19.5   chapter 276A or 473F.  
 19.6      Sec. 8.  Minnesota Statutes 1999 Supplement, section 
 19.7   273.1382, subdivision 1a, is amended to read: 
 19.8      Subd. 1a.  [EDUCATION HOMESTEAD CREDIT.] Each county 
 19.9   auditor shall determine a general education homestead credit for 
 19.10  each homestead within the county equal to 66.2 percent for taxes 
 19.11  payable in 1999 and 83 88 percent for taxes payable in 2000 and 
 19.12  thereafter of the education credit tax rate times the net tax 
 19.13  capacity of the homestead for the taxes payable year.  The 
 19.14  amount of general education homestead credit for a homestead may 
 19.15  not exceed $320 for taxes payable in 1999 and $390 for taxes 
 19.16  payable in 2000 and thereafter $535.  In the case of an 
 19.17  agricultural homestead, only the net tax capacity of the house, 
 19.18  garage, and surrounding one acre of land shall be used in 
 19.19  determining the property's education homestead credit. 
 19.20     Sec. 9.  Minnesota Statutes 1999 Supplement, section 
 19.21  273.1382, subdivision 1b, is amended to read: 
 19.22     Subd. 1b.  [EDUCATION AGRICULTURAL CREDIT.] Property 
 19.23  classified as class 2a agricultural homestead or class 2b 
 19.24  agricultural nonhomestead or timberland is eligible for 
 19.25  education agricultural credit.  The credit is equal to 54 72 
 19.26  percent, in the case of agricultural homestead property up to 
 19.27  $600,000 in market value, or 50 percent, in the case of all 
 19.28  other agricultural nonhomestead property or timberland, of the 
 19.29  property's net tax capacity times the education credit tax rate 
 19.30  determined in subdivision 1.  The net tax capacity of class 2a 
 19.31  property attributable to the house, garage, and surrounding one 
 19.32  acre of land is not eligible for the credit under this 
 19.33  subdivision. 
 19.34     Sec. 10.  Minnesota Statutes 1999 Supplement, section 
 19.35  275.71, subdivision 2, is amended to read: 
 19.36     Subd. 2.  [LEVY LIMIT BASE.] (a) The levy limit base for a 
 20.1   local governmental unit for taxes levied in 1997 shall be equal 
 20.2   to the sum of: 
 20.3      (1) the amount the local governmental unit levied in 1996, 
 20.4   less any amount levied for debt, as reported to the department 
 20.5   of revenue under section 275.62, subdivision 1, clause (1), and 
 20.6   less any tax levied in 1996 against market value as provided for 
 20.7   in section 275.61; 
 20.8      (2) the amount of aids the local governmental unit was 
 20.9   certified to receive in calendar year 1997 under sections 
 20.10  477A.011 to 477A.03 before any reductions for state tax 
 20.11  increment financing aid under section 273.1399, subdivision 5; 
 20.12     (3) the amount of homestead and agricultural credit aid the 
 20.13  local governmental unit was certified to receive under section 
 20.14  273.1398 in calendar year 1997 before any reductions for tax 
 20.15  increment financing aid under section 273.1399, subdivision 5; 
 20.16     (4) the amount of local performance aid the local 
 20.17  governmental unit was certified to receive in calendar year 1997 
 20.18  under section 477A.05; and 
 20.19     (5) the amount of any payments certified to the local 
 20.20  government unit in 1997 under sections 298.28 and 298.282. 
 20.21     If a governmental unit was not required to report under 
 20.22  section 275.62 for taxes levied in 1997, the commissioner shall 
 20.23  request information on levies used for debt from the local 
 20.24  governmental unit and adjust its levy limit base accordingly. 
 20.25     (b) The levy limit base for a local governmental unit for 
 20.26  taxes levied in 1998 is equal to its adjusted levy limit base in 
 20.27  the previous year, subject to any adjustments under section 
 20.28  275.72 and multiplied by the increase that would have occurred 
 20.29  under subdivision 3, clause (3), if that clause had been in 
 20.30  effect for taxes levied in 1997. 
 20.31     (c) The levy limit base for a city with a population 
 20.32  greater than 2,500 for taxes levied in 1999 2000 is limited 
 20.33  equal to its adjusted levy limit base in the previous year, 
 20.34  subject to adjustments under section 275.72. 
 20.35     (d) (b) The levy limit base for a county for taxes levied 
 20.36  in 1999 2000 is limited equal to the difference between (1) its 
 21.1   adjusted levy limit base in the previous year subject to 
 21.2   adjustments under section 275.72, and (2) one-half of the 
 21.3   county's share of the net cost to the state for assumption of 
 21.4   district court costs, as reported by the supreme court to the 
 21.5   commissioner of revenue under section 273.1398, subdivision 4a, 
 21.6   paragraph (a). 
 21.7      Sec. 11.  Minnesota Statutes 1999 Supplement, section 
 21.8   275.71, subdivision 3, is amended to read: 
 21.9      Subd. 3.  [ADJUSTED LEVY LIMIT BASE.] For taxes levied 
 21.10  in 1998 and 1999 2000, the adjusted levy limit is equal to the 
 21.11  levy limit base computed under subdivision 2 or section 275.72, 
 21.12  multiplied by: 
 21.13     (1) one plus a percentage equal to the percentage growth in 
 21.14  the implicit price deflator; and 
 21.15     (2) for all cities and for counties outside of the 
 21.16  seven-county metropolitan area, one plus a percentage equal to 
 21.17  the percentage increase in number of households, if any, for the 
 21.18  most recent 12-month period for which data is available; and for 
 21.19  counties located in the seven-county metropolitan area, one plus 
 21.20  a percentage equal to the greater of the percentage increase in 
 21.21  the number of households in the county or the percentage 
 21.22  increase in the number of households in the entire seven-county 
 21.23  metropolitan area for the most recent 12-month period for which 
 21.24  data is available; and 
 21.25     (3) one plus a percentage equal to the percentage increase 
 21.26  in the taxable market value of the jurisdiction due to new 
 21.27  construction of class 3 and class 5 property, as defined in 
 21.28  section 273.13, subdivisions 24 and 31, for the most recent year 
 21.29  for which data are available. 
 21.30     Sec. 12.  Minnesota Statutes 1999 Supplement, section 
 21.31  275.71, subdivision 4, is amended to read: 
 21.32     Subd. 4.  [PROPERTY TAX LEVY LIMIT.] For taxes levied 
 21.33  in 1998 and 1999 and 2000, the property tax levy limit for a 
 21.34  local governmental unit is equal to its adjusted levy limit base 
 21.35  determined under subdivision 3 plus any additional levy 
 21.36  authorized under section 275.73, which is levied against net tax 
 22.1   capacity, reduced by the sum of (1) the total amount of aids 
 22.2   that the local governmental unit is certified to receive under 
 22.3   sections 477A.011 to 477A.014, (2) homestead and agricultural 
 22.4   aids it is certified to receive under section 273.1398, (3) 
 22.5   local performance aid it is certified to receive under section 
 22.6   477A.05, (4) taconite aids under sections 298.28 and 298.282 
 22.7   including any aid which was required to be placed in a special 
 22.8   fund for expenditure in the next succeeding year but excluding 
 22.9   amounts allocated under section 298.28, subdivision 2, paragraph 
 22.10  (b), (5) flood loss aid under section 273.1383, and (6) 
 22.11  low-income housing aid under sections 477A.06 and 477A.065. 
 22.12     Sec. 13.  Minnesota Statutes 1998, section 275.72, 
 22.13  subdivision 1, is amended to read: 
 22.14     Subdivision 1.  [ADJUSTMENTS FOR CONSOLIDATION.] If all of 
 22.15  the area included in two or more local governmental units is 
 22.16  consolidated, merged, or otherwise combined to constitute a 
 22.17  single governmental unit, the levy limit base for the resulting 
 22.18  governmental unit in the first levy year in which the 
 22.19  consolidation is effective shall be equal to (1) the 
 22.20  highest average tax rate in any of the merging governmental 
 22.21  units in for the previous current taxes payable year multiplied 
 22.22  by the net tax capacity of all the merging governmental units in 
 22.23  for the previous current taxes payable year, minus (2) the sum 
 22.24  of all levies in the merging governmental units in for the 
 22.25  previous current taxes payable year that qualify as special 
 22.26  levies under section 275.70, subdivision 3.  The average tax 
 22.27  rate of a governmental unit for the current taxes payable year 
 22.28  shall be determined by (1) adding the governmental subdivision's 
 22.29  final certified levy for the current taxes payable year and its 
 22.30  property tax aids described in section 275.71, subdivision 4, 
 22.31  for the current aid payment year, and dividing that result by 
 22.32  (2) the sum of the governmental subdivision's total taxable net 
 22.33  tax capacity and its total fiscal disparity distribution net tax 
 22.34  capacity, if any, for the current taxes payable year.  The net 
 22.35  tax capacity of all the merging governmental units for the 
 22.36  purpose of this adjustment shall be the sum of their total 
 23.1   taxable net tax capacity plus their total fiscal disparity 
 23.2   distribution net tax capacity, if any, for the current taxes 
 23.3   payable year.  
 23.4      Sec. 14.  [REPEALER.] 
 23.5      Minnesota Statutes 1999 Supplement, section 273.13, 
 23.6   subdivision 24a, is repealed. 
 23.7      Sec. 15.  [EFFECTIVE DATE.] 
 23.8      Sections 1 to 11, 13, and 14 are effective for taxes 
 23.9   payable in 2001 and subsequent years.  Section 12 is effective 
 23.10  for taxes levied in 1999, payable in 2000, and subsequent years.