1.1                          A bill for an act
  1.2             relating to taxation; property tax; allowing for 
  1.3             market value exclusion on certain business property; 
  1.4             amending Minnesota Statutes 1996, 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 1996, section 273.11, is 
  1.8   amended by adding a subdivision to read: 
  1.9      Subd. 19.  [VALUATION EXCLUSION FOR IMPROVEMENTS TO CERTAIN 
  1.10  BUSINESS PROPERTY.] Property classified under section 273.13, 
  1.11  subdivision 24, which is eligible for the preferred class rate 
  1.12  on the market value up to $100,000, shall qualify for a 
  1.13  valuation exclusion for assessment purposes, provided all of the 
  1.14  following conditions are met: 
  1.15     (1) the building must be at least 25 years old at the time 
  1.16  of the improvement; 
  1.17     (2) the building must be located in a city or town with a 
  1.18  population of 10,000 or less that is located outside the 
  1.19  seven-county metropolitan area, as defined in section 473.121, 
  1.20  subdivision 2; 
  1.21     (3) the total estimated market value of the land and 
  1.22  buildings must be $100,000 or less prior to the improvement; 
  1.23     (4) the current year's estimated market value of the 
  1.24  property must be equal to or less than the property's estimated 
  1.25  market value in each of the two previous years' assessments; and 
  2.1      (5) a building permit must have been issued prior to the 
  2.2   commencement of the improvement, or if the building is located 
  2.3   in a city or town which does not have a building permit process, 
  2.4   the property owner must notify the assessor prior to the 
  2.5   commencement of the improvement. 
  2.6      The assessor shall estimate the market value of the 
  2.7   building in the assessment year immediately following the year 
  2.8   that (1) the building permit was taken out, or (2) the taxpayer 
  2.9   notified the assessor that an improvement was to be made.  If 
  2.10  the estimated market value of the building has increased over 
  2.11  the prior year's assessment, the assessor shall note the amount 
  2.12  of the increase on the property's record, and that amount shall 
  2.13  be subtracted from the value of the property in each year for 
  2.14  five years after the improvement has been made, at which time an 
  2.15  amount equal to 20 percent of the excluded value shall be added 
  2.16  back in each of the five subsequent assessment years. 
  2.17     For any property, there can be no more than two 
  2.18  improvements qualifying for exclusion under this subdivision.  
  2.19  The maximum amount of value that can be excluded from any 
  2.20  property under this subdivision is $50,000. 
  2.21     The assessor shall require an application, including 
  2.22  documentation of the age of the building from the owner, if 
  2.23  unknown by the assessor.  Applications must be received prior to 
  2.24  July 1 of any year in order to be effective for taxes payable in 
  2.25  the following year. 
  2.26     For purposes of this subdivision, "population" has the same 
  2.27  meaning given in section 477A.011, subdivision 3. 
  2.28     Sec. 2.  [EFFECTIVE DATE.] 
  2.29     Section 1 is effective for the 1998 assessment taxes 
  2.30  payable in 1999 and thereafter, for improvements made after 
  2.31  January 2, 1997.