HF 4423

as introduced - 91st Legislature (2019 - 2020) Posted on 03/12/2020 01:18pm

A bill for an act
relating to taxation; property and local; creating property valuation definition of
"highest and best use"; providing considerations for valuation of class 3a property;
amending Minnesota Statutes 2018, sections 272.03, by adding a subdivision;
273.11, subdivision 1, by adding a subdivision.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2018, section 272.03, is amended by adding a subdivision
to read:

new text begin Subd. 16. new text end

new text begin Highest and best use. new text end

new text begin "Highest and best use" means the reasonably probable
use of property that results in the highest value. "Reasonably probable use" means a use
that is physically possible, legally permissible, and financially feasible.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for property assessed on or after January
2, 2021.
new text end

Sec. 2.

Minnesota Statutes 2018, section 273.11, subdivision 1, is amended to read:

Subdivision 1.

Generally.

Except as provided in this section or section 273.17,
subdivision 1, all property shall be valued at its market value new text begin based upon its highest and
best use new text end . The market value as determined pursuant to this section shall be stated such that
any amount under $100 is rounded up to $100 and any amount exceeding $100 shall be
rounded to the nearest $100. In estimating and determining such value, the assessor shall
not adopt a lower or different standard of value because the same is to serve as a basis of
taxation, nor shall the assessor adopt as a criterion of value the price for which such property
would sell at a forced sale, or in the aggregate with all the property in the town or district;
but the assessor shall value each article or description of property by itself, and at such sum
or price as the assessor believes the same to be fairly worth in money. The assessor shall
take into account the effect on the market value of property of environmental factors in the
vicinity of the property. In assessing any tract or lot of real property, the value of the land,
exclusive of structures and improvements, shall be determined, and also the value of all
structures and improvements thereon, and the aggregate value of the property, including all
structures and improvements, excluding the value of crops growing upon cultivated land.
In valuing real property upon which there is a mine or quarry, it shall be valued at such
price as such property, including the mine or quarry, would sell for at a fair, voluntary sale,
for cash, if the material being mined or quarried is not subject to taxation under section
298.015 and the mine or quarry is not exempt from the general property tax under section
298.25. In valuing real property which is vacant, platted property shall be assessed as
provided in subdivisions 14a and 14c. All property, or the use thereof, which is taxable
under section 272.01, subdivision 2, or 273.19, shall be valued at the market value of such
property and not at the value of a leasehold estate in such property, or at some lesser value
than its market value.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for property assessed on or after January
2, 2021.
new text end

Sec. 3.

Minnesota Statutes 2018, section 273.11, is amended by adding a subdivision to
read:

new text begin Subd. 24. new text end

new text begin Valuation of class 3a property. new text end

new text begin In determining the value of property classified
as 3a under section 273.13, subdivision 24:
new text end

new text begin (1) the assessor must not reduce the value of the property because of a use restriction
on the property that prohibits the continuation of the property's current use or prohibits a
competitive use by a subsequent owner;
new text end

new text begin (2) a property must have the same highest and best use as the subject property to be
considered a comparable property;
new text end

new text begin (3) the assessor must determine whether the highest and best use of the property is the
continuation of the property's current use; and
new text end

new text begin (4) a vacant and available property must not be considered a comparable property unless
the subject property itself is also a vacant and available property.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for property assessments made on or
after January 2, 2021.
new text end