HF 1153

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; extending a program that 
  1.3             excludes improvement value on certain older homes; 
  1.4             amending Minnesota Statutes 2002, section 273.11, 
  1.5             subdivision 16. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 2002, section 273.11, 
  1.8   subdivision 16, is amended to read: 
  1.9      Subd. 16.  [VALUATION EXCLUSION FOR CERTAIN IMPROVEMENTS.] 
  1.10  Improvements to homestead property made before January 2, 
  1.11  2003 2013, shall be fully or partially excluded from the value 
  1.12  of the property for assessment purposes provided that (1) the 
  1.13  house is at least 45 years old at the time of the improvement 
  1.14  and (2) the assessor's estimated market value of the house on 
  1.15  January 2 of the current year is equal to or less than $400,000. 
  1.16     For purposes of determining this eligibility, "house" means 
  1.17  land and buildings.  
  1.18     The age of a residence is the number of years since the 
  1.19  original year of its construction.  In the case of a residence 
  1.20  that is relocated, the relocation must be from a location within 
  1.21  the state and the only improvements eligible for exclusion under 
  1.22  this subdivision are (1) those for which building permits were 
  1.23  issued to the homeowner after the residence was relocated to its 
  1.24  present site, and (2) those undertaken during or after the year 
  1.25  the residence is initially occupied by the homeowner, excluding 
  2.1   any market value increase relating to basic improvements that 
  2.2   are necessary to install the residence on its foundation and 
  2.3   connect it to utilities at its present site.  In the case of an 
  2.4   owner-occupied duplex or triplex, the improvement is eligible 
  2.5   regardless of which portion of the property was improved. 
  2.6      If the property lies in a jurisdiction which is subject to 
  2.7   a building permit process, a building permit must have been 
  2.8   issued prior to commencement of the improvement.  The 
  2.9   improvements for a single project or in any one year must add at 
  2.10  least $5,000 to the value of the property to be eligible for 
  2.11  exclusion under this subdivision.  Only improvements to the 
  2.12  structure which is the residence of the qualifying homesteader 
  2.13  or construction of or improvements to no more than one two-car 
  2.14  garage per residence qualify for the provisions of this 
  2.15  subdivision.  If an improvement was begun between January 2, 
  2.16  1992, and January 2, 1993, any value added from that improvement 
  2.17  for the January 1994 and subsequent assessments shall qualify 
  2.18  for exclusion under this subdivision provided that a building 
  2.19  permit was obtained for the improvement between January 2, 1992, 
  2.20  and January 2, 1993.  Whenever a building permit is issued for 
  2.21  property currently classified as homestead, the issuing 
  2.22  jurisdiction shall notify the property owner of the possibility 
  2.23  of valuation exclusion under this subdivision.  The assessor 
  2.24  shall require an application, including documentation of the age 
  2.25  of the house from the owner, if unknown by the assessor.  The 
  2.26  application may be filed subsequent to the date of the building 
  2.27  permit provided that the application must be filed within three 
  2.28  years of the date the building permit was issued for the 
  2.29  improvement.  If the property lies in a jurisdiction which is 
  2.30  not subject to a building permit process, the application must 
  2.31  be filed within three years of the date the improvement was 
  2.32  made.  The assessor may require proof from the taxpayer of the 
  2.33  date the improvement was made.  Applications must be received 
  2.34  prior to July 1 of any year in order to be effective for taxes 
  2.35  payable in the following year. 
  2.36     No exclusion for an improvement may be granted by a local 
  3.1   board of review or county board of equalization, and no 
  3.2   abatement of the taxes for qualifying improvements may be 
  3.3   granted by the county board unless (1) a building permit was 
  3.4   issued prior to the commencement of the improvement if the 
  3.5   jurisdiction requires a building permit, and (2) an application 
  3.6   was completed. 
  3.7      The assessor shall note the qualifying value of each 
  3.8   improvement on the property's record, and the sum of those 
  3.9   amounts shall be subtracted from the value of the property in 
  3.10  each year for ten years after the improvement has been made.  
  3.11  After ten years the amount of the qualifying value shall be 
  3.12  added back as follows: 
  3.13     (1) 50 percent in the two subsequent assessment years if 
  3.14  the qualifying value is equal to or less than $10,000 market 
  3.15  value; or 
  3.16     (2) 20 percent in the five subsequent assessment years if 
  3.17  the qualifying value is greater than $10,000 market value. 
  3.18  If an application is filed after the first assessment date at 
  3.19  which an improvement could have been subject to the valuation 
  3.20  exclusion under this subdivision, the ten-year period during 
  3.21  which the value is subject to exclusion is reduced by the number 
  3.22  of years that have elapsed since the property would have 
  3.23  qualified initially.  The valuation exclusion shall terminate 
  3.24  whenever (1) the property is sold, or (2) the property is 
  3.25  reclassified to a class which does not qualify for treatment 
  3.26  under this subdivision.  Improvements made by an occupant who is 
  3.27  the purchaser of the property under a conditional purchase 
  3.28  contract do not qualify under this subdivision unless the seller 
  3.29  of the property is a governmental entity.  The qualifying value 
  3.30  of the property shall be computed based upon the increase from 
  3.31  that structure's market value as of January 2 preceding the 
  3.32  acquisition of the property by the governmental entity. 
  3.33     The total qualifying value for a homestead may not exceed 
  3.34  $50,000.  The total qualifying value for a homestead with a 
  3.35  house that is less than 70 years old may not exceed $25,000.  
  3.36  The term "qualifying value" means the increase in estimated 
  4.1   market value resulting from the improvement if the improvement 
  4.2   occurs when the house is at least 70 years old, or one-half of 
  4.3   the increase in estimated market value resulting from the 
  4.4   improvement otherwise.  The $25,000 and $50,000 maximum 
  4.5   qualifying value under this subdivision may result from multiple 
  4.6   improvements to the homestead.  
  4.7      If 50 percent or more of the square footage of a structure 
  4.8   is voluntarily razed or removed, the valuation increase 
  4.9   attributable to any subsequent improvements to the remaining 
  4.10  structure does not qualify for the exclusion under this 
  4.11  subdivision.  If a structure is unintentionally or accidentally 
  4.12  destroyed by a natural disaster, the property is eligible for an 
  4.13  exclusion under this subdivision provided that the structure was 
  4.14  not completely destroyed.  The qualifying value on property 
  4.15  destroyed by a natural disaster shall be computed based upon the 
  4.16  increase from that structure's market value as determined on 
  4.17  January 2 of the year in which the disaster occurred.  A 
  4.18  property receiving benefits under the homestead disaster 
  4.19  provisions under section 273.123 is not disqualified from 
  4.20  receiving an exclusion under this subdivision.  If any 
  4.21  combination of improvements made to a structure after January 1, 
  4.22  1993, increases the size of the structure by 100 percent or 
  4.23  more, the valuation increase attributable to the portion of the 
  4.24  improvement that causes the structure's size to exceed 100 
  4.25  percent does not qualify for exclusion under this subdivision. 
  4.26     [EFFECTIVE DATE.] This section is effective for all 
  4.27  qualifying improvements made after January 1, 2003, through 
  4.28  assessment year 2012.