HF 962

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; converting the state general tax on commercial and industrial
properties to a site value tax; authorizing the commissioner of revenue to
promulgate standards for determining site values and to reallocate the portion of
estimated market value attributable to land; amending Minnesota Statutes 2006,
sections 270C.85, subdivision 2; 270C.88, subdivision 1; 275.025, subdivision 4,
by adding a subdivision.

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

Section 1.

Minnesota Statutes 2006, section 270C.85, subdivision 2, is amended to read:

Subd. 2.

Powers and duties.

The commissioner shall have and exercise the
following powers and duties in administering the property tax laws.

(a) Confer with, advise, and give the necessary instructions and directions to local
assessors and local boards of review throughout the state as to their duties under the
laws of the state.

(b) Direct proceedings, actions, and prosecutions to be instituted to enforce the
laws relating to the liability and punishment of public officers and officers and agents of
corporations for failure or negligence to comply with the provisions of the property tax
laws, and cause complaints to be made against local assessors, members of boards of
equalization, members of boards of review, or any other assessing or taxing officer, to the
proper authority, for their removal from office for misconduct or negligence of duty.

(c) Require county attorneys to assist in the commencement of prosecutions in
actions or proceedings for removal, forfeiture, and punishment, for violation of the
property tax laws in their respective districts or counties.

(d) Require town, city, county, and other public officers to report information as to
the assessment of property, and such other information as may be needful in the work of
the commissioner, in such form as the commissioner may prescribe.

(e) Transmit to the governor, on or before the third Monday in December of each
even-numbered year, and to each member of the legislature, on or before November
15 of each even-numbered year, the report of the department for the preceding years,
showing all the taxable property subject to the property tax laws and the value of the
same, in tabulated form.

(f) Inquire into the methods of assessment and taxation and ascertain whether the
assessors faithfully discharge their duties.

(g) Reallocate the estimated market value of a parcel between the amount attributable
to land and improvements for properties subject to taxation under section 275.025,
subdivision 4, paragraph (b), under standards promulgated by the commissioner.

EFFECTIVE DATE.

This section is effective beginning with taxes payable in 2010.

Sec. 2.

Minnesota Statutes 2006, section 270C.88, subdivision 1, is amended to read:

Subdivision 1.

In writing.

Any order or decision of the commissioner increasing
or decreasing any tax, assessment, or other obligation by a sum exceeding $1,000 on
real or personal property, or the net tax capacity thereof, or other obligation relating
thereto, the result of which is to increase or decrease the total amount payable under the
property tax laws, including penalties and interest, by a sum exceeding $1,000, must bear
the written signature or facsimile signature of the commissioner or the commissioner's
delegate. Written approval of the commissioner or a delegate shall not be required with
respect to orders reducing net tax capacity of property by reason of its classification as
a homestead. The provisions of this subdivision do not apply to orders issued under the
authority in section 270C.85, subdivision 2, paragraph (g).

Sec. 3.

Minnesota Statutes 2006, section 275.025, is amended by adding a subdivision
to read:

Subd. 2a.

Commercial-industrial land value.

For the purposes of this section,
"commercial-industrial land value" means the estimated market value of the land value
of all taxable property classified as class 3 or class 5 under section 273.13, excluding
property described in section 473.625. County commercial-industrial land value amounts
are not adjusted for the captured net tax capacity of a tax increment financing district
under section 469.177, subdivision 2, the net tax capacity of transmission lines deducted
from a local government's total net tax capacity under section 273.425, or fiscal disparities
contribution and distribution net tax capacities under chapter 276A or 473F.

EFFECTIVE DATE.

This section is effective beginning with taxes payable in 2010.

Sec. 4.

Minnesota Statutes 2006, section 275.025, subdivision 4, is amended to read:

Subd. 4.

Apportionment and levy of state general tax.

(a) Ninety-five
percent of the state general tax must be levied by applying a uniform rate to all (1)
commercial-industrial tax capacity and to commercial-industrial land value as provided in
paragraph (b) and (2) five percent of the state general tax must be levied by applying a
uniform rate to all seasonal residential recreational tax capacity. On or before October 1
each year, the commissioner of revenue shall certify the preliminary state general levy
rates to each county auditor that must be used to prepare the notices of proposed property
taxes for taxes payable in the following year. By January 1 of each year, the commissioner
shall certify the final state general levy rate to each county auditor that shall be used
in spreading taxes.

(b) For taxes payable in 2010 and later years, the portion of the state general tax
levied on commercial-industrial tax capacity and commercial-industrial land value must
be divided into a commercial-industrial tax capacity share and a commercial-industrial
land value share as follows. For taxes payable in 2010, 90 percent is apportioned to
regular commercial-industrial tax capacity and ten percent to commercial-industrial
land value. In each succeeding year, an additional ten percentage points of the
commercial-industrial share is shifted from commercial-industrial tax capacity to
commercial-industrial land value. For taxes payable in 2019 and thereafter, the full amount
of the commercial-industrial share is levied upon commercial-industrial land value.

(c) For each of the three component shares of the state general levy determined in
paragraphs (a) and (b), the tax must be distributed among the counties by applying a
uniform statewide rate to each county's tax base for the relevant class.

EFFECTIVE DATE.

This section is effective beginning with taxes payable in 2010.

Sec. 5. COMMISSIONER TO PROMULGATE STANDARDS.

On or before July 1, 2008, the commissioner of revenue shall promulgate standards
and methods to be used in determining the site value of properties subject to taxation under
Minnesota Statutes, section 275.025, subdivision 4, paragraph (b). Before promulgating
the standards and methods, the commissioner shall seek advice and comments from
assessors and other experts in valuing land. Promulgation of the standards and methods
is not subject to the administrative procedures act and the standards and methods are
not a rule under the administrative procedures act, Minnesota Statutes, chapter 14. The
commissioner shall provide assistance to assessors in valuing land for purposes of
Minnesota Statutes, section 275.025, upon request.

EFFECTIVE DATE.

This section is effective the day following final enactment.