HF 1977

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; reducing property tax class 
  1.3             rates; amending Minnesota Statutes 1994, sections 
  1.4             273.13, subdivisions 22, 23, 24, 25, and 31; and 
  1.5             273.1398, subdivision 1; repealing Minnesota Statutes 
  1.6             1994, section 273.13, subdivision 32. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1994, section 273.13, 
  1.9   subdivision 22, is amended to read: 
  1.10     Subd. 22.  [CLASS 1.] (a) Except as provided in subdivision 
  1.11  23, real estate which is residential and used for homestead 
  1.12  purposes is class 1.  The market value of class 1a property must 
  1.13  be determined based upon the value of the house, garage, and 
  1.14  land.  
  1.15     The first $72,000 of market value of class 1a property has 
  1.16  a net class rate of one percent of its market value and a gross 
  1.17  class rate of 2.17 percent of its market value.  For taxes 
  1.18  payable in 1992, the market value of class 1a property that 
  1.19  exceeds $72,000 but does not exceed $115,000 has a class rate of 
  1.20  two percent of its market value; and the market value of class 
  1.21  1a property that exceeds $115,000 has a class rate of 2.5 
  1.22  percent of its market value.  For taxes payable in 1993 and 
  1.23  thereafter, The market value of class 1a property that exceeds 
  1.24  $72,000 has a class rate of two one percent. 
  1.25     (b) Class 1b property includes homestead real estate or 
  1.26  homestead manufactured homes used for the purposes of a 
  2.1   homestead by 
  2.2      (1) any blind person, or the blind person and the blind 
  2.3   person's spouse; or 
  2.4      (2) any person, hereinafter referred to as "veteran," who: 
  2.5      (i) served in the active military or naval service of the 
  2.6   United States; and 
  2.7      (ii) is entitled to compensation under the laws and 
  2.8   regulations of the United States for permanent and total 
  2.9   service-connected disability due to the loss, or loss of use, by 
  2.10  reason of amputation, ankylosis, progressive muscular 
  2.11  dystrophies, or paralysis, of both lower extremities, such as to 
  2.12  preclude motion without the aid of braces, crutches, canes, or a 
  2.13  wheelchair; and 
  2.14     (iii) has acquired a special housing unit with special 
  2.15  fixtures or movable facilities made necessary by the nature of 
  2.16  the veteran's disability, or the surviving spouse of the 
  2.17  deceased veteran for as long as the surviving spouse retains the 
  2.18  special housing unit as a homestead; or 
  2.19     (3) any person who: 
  2.20     (i) is permanently and totally disabled and 
  2.21     (ii) receives 90 percent or more of total income from 
  2.22     (A) aid from any state as a result of that disability; or 
  2.23     (B) supplemental security income for the disabled; or 
  2.24     (C) workers' compensation based on a finding of total and 
  2.25  permanent disability; or 
  2.26     (D) social security disability, including the amount of a 
  2.27  disability insurance benefit which is converted to an old age 
  2.28  insurance benefit and any subsequent cost of living increases; 
  2.29  or 
  2.30     (E) aid under the federal Railroad Retirement Act of 1937, 
  2.31  United States Code Annotated, title 45, section 228b(a)5; or 
  2.32     (F) a pension from any local government retirement fund 
  2.33  located in the state of Minnesota as a result of that 
  2.34  disability; or 
  2.35     (4) any person who is permanently and totally disabled and 
  2.36  whose household income as defined in section 290A.03, 
  3.1   subdivision 5, is 150 percent or less of the federal poverty 
  3.2   level. 
  3.3      Property is classified and assessed under clause (4) only 
  3.4   if the government agency or income-providing source certifies, 
  3.5   upon the request of the homestead occupant, that the homestead 
  3.6   occupant satisfies the disability requirements of this paragraph.
  3.7      Property is classified and assessed pursuant to clause (1) 
  3.8   only if the commissioner of economic security certifies to the 
  3.9   assessor that the homestead occupant satisfies the requirements 
  3.10  of this paragraph.  
  3.11     Permanently and totally disabled for the purpose of this 
  3.12  subdivision means a condition which is permanent in nature and 
  3.13  totally incapacitates the person from working at an occupation 
  3.14  which brings the person an income.  The first $32,000 market 
  3.15  value of class 1b property has a net class rate of .45 .36 
  3.16  percent of its market value and a gross class rate of .87 
  3.17  percent of its market value.  The remaining market value of 
  3.18  class 1b property has a gross or net class rate using the rates 
  3.19  for class 1 or class 2a property, whichever is appropriate, of 
  3.20  similar market value.  
  3.21     (c) Class 1c property is commercial use real property that 
  3.22  abuts a lakeshore line and is devoted to temporary and seasonal 
  3.23  residential occupancy for recreational purposes but not devoted 
  3.24  to commercial purposes for more than 250 days in the year 
  3.25  preceding the year of assessment, and that includes a portion 
  3.26  used as a homestead by the owner, which includes a dwelling 
  3.27  occupied as a homestead by a shareholder of a corporation that 
  3.28  owns the resort or a partner in a partnership that owns the 
  3.29  resort, even if the title to the homestead is held by the 
  3.30  corporation or partnership.  For purposes of this clause, 
  3.31  property is devoted to a commercial purpose on a specific day if 
  3.32  any portion of the property, excluding the portion used 
  3.33  exclusively as a homestead, is used for residential occupancy 
  3.34  and a fee is charged for residential occupancy.  Class 1c 
  3.35  property has a class rate of one .79 percent of total market 
  3.36  value for taxes payable in 1993 and thereafter with the 
  4.1   following limitation:  the area of the property must not exceed 
  4.2   100 feet of lakeshore footage for each cabin or campsite located 
  4.3   on the property up to a total of 800 feet and 500 feet in depth, 
  4.4   measured away from the lakeshore.  
  4.5      Sec. 2.  Minnesota Statutes 1994, section 273.13, 
  4.6   subdivision 23, is amended to read: 
  4.7      Subd. 23.  [CLASS 2.] (a) Class 2a property is agricultural 
  4.8   land including any improvements that is homesteaded.  The market 
  4.9   value of the house and garage and immediately surrounding one 
  4.10  acre of land has the same class rates as class 1a property under 
  4.11  subdivision 22.  The value of the remaining land including 
  4.12  improvements up to $115,000 has a net class rate of .45 .36 
  4.13  percent of market value and a gross class rate of 1.75 percent 
  4.14  of market value.  The remaining value of class 2a property over 
  4.15  $115,000 of market value that does not exceed 320 acres has a 
  4.16  net class rate of one .79 percent of market value, and a gross 
  4.17  class rate of 2.25 percent of market value.  The remaining 
  4.18  property over the $115,000 market value in excess of 320 acres 
  4.19  has a class rate of 1.5 1.19 percent of market value, and a 
  4.20  gross class rate of 2.25 percent of market value.  
  4.21     (b) Class 2b property is (1) real estate, rural in 
  4.22  character and used exclusively for growing trees for timber, 
  4.23  lumber, and wood and wood products; (2) real estate that is not 
  4.24  improved with a structure and is used exclusively for growing 
  4.25  trees for timber, lumber, and wood and wood products, if the 
  4.26  owner has participated or is participating in a cost-sharing 
  4.27  program for afforestation, reforestation, or timber stand 
  4.28  improvement on that particular property, administered or 
  4.29  coordinated by the commissioner of natural resources; (3) real 
  4.30  estate that is nonhomestead agricultural land; or (4) a landing 
  4.31  area or public access area of a privately owned public use 
  4.32  airport.  Class 2b property has a net class rate of 1.5 1.19 
  4.33  percent of market value, and a gross class rate of 2.25 percent 
  4.34  of market value.  
  4.35     (c) Agricultural land as used in this section means 
  4.36  contiguous acreage of ten acres or more, primarily used during 
  5.1   the preceding year for agricultural purposes.  Agricultural use 
  5.2   may include pasture, timber, waste, unusable wild land, and land 
  5.3   included in state or federal farm programs.  "Agricultural 
  5.4   purposes" as used in this section means the raising or 
  5.5   cultivation of agricultural products.  
  5.6      (d) Real estate of less than ten acres used principally for 
  5.7   raising or cultivating agricultural products, shall be 
  5.8   considered as agricultural land, if it is not used primarily for 
  5.9   residential purposes.  
  5.10     (e) The term "agricultural products" as used in this 
  5.11  subdivision includes:  
  5.12     (1) livestock, dairy animals, dairy products, poultry and 
  5.13  poultry products, fur-bearing animals, horticultural and nursery 
  5.14  stock described in sections 18.44 to 18.61, fruit of all kinds, 
  5.15  vegetables, forage, grains, bees, and apiary products by the 
  5.16  owner; 
  5.17     (2) fish bred for sale and consumption if the fish breeding 
  5.18  occurs on land zoned for agricultural use; 
  5.19     (3) the commercial boarding of horses if the boarding is 
  5.20  done in conjunction with raising or cultivating agricultural 
  5.21  products as defined in clause (1); 
  5.22     (4) property which is owned and operated by nonprofit 
  5.23  organizations used for equestrian activities, excluding racing; 
  5.24  and 
  5.25     (5) game birds and waterfowl bred and raised for use on a 
  5.26  shooting preserve licensed under section 97A.115.  
  5.27     (f) If a parcel used for agricultural purposes is also used 
  5.28  for commercial or industrial purposes, including but not limited 
  5.29  to:  
  5.30     (1) wholesale and retail sales; 
  5.31     (2) processing of raw agricultural products or other goods; 
  5.32     (3) warehousing or storage of processed goods; and 
  5.33     (4) office facilities for the support of the activities 
  5.34  enumerated in clauses (1), (2), and (3), 
  5.35  the assessor shall classify the part of the parcel used for 
  5.36  agricultural purposes as class 1b, 2a, or 2b, whichever is 
  6.1   appropriate, and the remainder in the class appropriate to its 
  6.2   use.  The grading, sorting, and packaging of raw agricultural 
  6.3   products for first sale is considered an agricultural purpose.  
  6.4   A greenhouse or other building where horticultural or nursery 
  6.5   products are grown that is also used for the conduct of retail 
  6.6   sales must be classified as agricultural if it is primarily used 
  6.7   for the growing of horticultural or nursery products from seed, 
  6.8   cuttings, or roots and occasionally as a showroom for the retail 
  6.9   sale of those products.  Use of a greenhouse or building only 
  6.10  for the display of already grown horticultural or nursery 
  6.11  products does not qualify as an agricultural purpose.  
  6.12     The assessor shall determine and list separately on the 
  6.13  records the market value of the homestead dwelling and the one 
  6.14  acre of land on which that dwelling is located.  If any farm 
  6.15  buildings or structures are located on this homesteaded acre of 
  6.16  land, their market value shall not be included in this separate 
  6.17  determination.  
  6.18     (g) To qualify for classification under paragraph (b), 
  6.19  clause (4), a privately owned public use airport must be 
  6.20  licensed as a public airport under section 360.018.  For 
  6.21  purposes of paragraph (b), clause (4), "landing area" means that 
  6.22  part of a privately owned public use airport properly cleared, 
  6.23  regularly maintained, and made available to the public for use 
  6.24  by aircraft and includes runways, taxiways, aprons, and sites 
  6.25  upon which are situated landing or navigational aids.  A landing 
  6.26  area also includes land underlying both the primary surface and 
  6.27  the approach surfaces that comply with all of the following:  
  6.28     (i) the land is properly cleared and regularly maintained 
  6.29  for the primary purposes of the landing, taking off, and taxiing 
  6.30  of aircraft; but that portion of the land that contains 
  6.31  facilities for servicing, repair, or maintenance of aircraft is 
  6.32  not included as a landing area; 
  6.33     (ii) the land is part of the airport property; and 
  6.34     (iii) the land is not used for commercial or residential 
  6.35  purposes. 
  6.36  The land contained in a landing area under paragraph (b), clause 
  7.1   (4), must be described and certified by the commissioner of 
  7.2   transportation.  The certification is effective until it is 
  7.3   modified, or until the airport or landing area no longer meets 
  7.4   the requirements of paragraph (b), clause (4).  For purposes of 
  7.5   paragraph (b), clause (4), "public access area" means property 
  7.6   used as an aircraft parking ramp, apron, or storage hangar, or 
  7.7   an arrival and departure building in connection with the airport.
  7.8      Sec. 3.  Minnesota Statutes 1994, section 273.13, 
  7.9   subdivision 24, is amended to read: 
  7.10     Subd. 24.  [CLASS 3.] (a) Commercial and industrial 
  7.11  property and utility real and personal property, except class 5 
  7.12  property as identified in subdivision 31, clause (1), is class 
  7.13  3a.  It has a class rate of three 2.37 percent of the first 
  7.14  $100,000 of market value for taxes payable in 1993 and 
  7.15  thereafter, and 5.06 3.63 percent of the market value over 
  7.16  $100,000.  In the case of state-assessed commercial, industrial, 
  7.17  and utility property owned by one person or entity, only one 
  7.18  parcel has a reduced class rate on the first $100,000 of market 
  7.19  value.  In the case of other commercial, industrial, and utility 
  7.20  property owned by one person or entity, only one parcel in each 
  7.21  county has a reduced class rate on the first $100,000 of market 
  7.22  value, except that: 
  7.23     (1) if the market value of the parcel is less than 
  7.24  $100,000, and additional parcels are owned by the same person or 
  7.25  entity in the same city or town within that county, the reduced 
  7.26  class rate shall be applied up to a combined total market value 
  7.27  of $100,000 for all parcels owned by the same person or entity 
  7.28  in the same city or town within the county; 
  7.29     (2) in the case of grain, fertilizer, and feed elevator 
  7.30  facilities, as defined in section 18C.305, subdivision 1, or 
  7.31  232.21, subdivision 8, the limitation to one parcel per owner 
  7.32  per county for the reduced class rate shall not apply, but there 
  7.33  shall be a limit of $100,000 of preferential value per site of 
  7.34  contiguous parcels owned by the same person or entity.  Only the 
  7.35  value of the elevator portion of each parcel shall qualify for 
  7.36  treatment under this clause.  For purposes of this subdivision, 
  8.1   contiguous parcels include parcels separated only by a railroad 
  8.2   or public road right-of-way; and 
  8.3      (3) in the case of property owned by a nonprofit charitable 
  8.4   organization that qualifies for tax exemption under section 
  8.5   501(c)(3) of the Internal Revenue Code of 1986, as amended 
  8.6   through December 31, 1993, if the property is used as a business 
  8.7   incubator, the limitation to one parcel per owner per county for 
  8.8   the reduced class rate shall not apply, provided that the 
  8.9   reduced rate applies only to the first $100,000 of value per 
  8.10  parcel owned by the organization.  As used in this clause, a 
  8.11  "business incubator" is a facility used for the development of 
  8.12  nonretail businesses, offering access to equipment, space, 
  8.13  services, and advice to the tenant businesses, for the purpose 
  8.14  of encouraging economic development, diversification, and job 
  8.15  creation in the area served by the organization. 
  8.16     To receive the reduced class rate on additional parcels 
  8.17  under clause (1), (2), or (3), the taxpayer must notify the 
  8.18  county assessor that the taxpayer owns more than one parcel that 
  8.19  qualifies under clause (1), (2), or (3). 
  8.20     (b) Employment property defined in section 469.166, during 
  8.21  the period provided in section 469.170, shall constitute class 
  8.22  3b and has a class rate of 2.3 1.82 percent of the first $50,000 
  8.23  of market value and 3.6 2.84 percent of the remainder, except 
  8.24  that for employment property located in a border city enterprise 
  8.25  zone designated pursuant to section 469.168, subdivision 4, 
  8.26  paragraph (c), the class rate of the first $100,000 of market 
  8.27  value and the class rate of the remainder is determined under 
  8.28  paragraph (a), unless the governing body of the city designated 
  8.29  as an enterprise zone determines that a specific parcel shall be 
  8.30  assessed pursuant to the first clause of this sentence.  The 
  8.31  governing body may provide for assessment under the first clause 
  8.32  of the preceding sentence only for property which is located in 
  8.33  an area which has been designated by the governing body for the 
  8.34  receipt of tax reductions authorized by section 469.171, 
  8.35  subdivision 1. 
  8.36     Sec. 4.  Minnesota Statutes 1994, section 273.13, 
  9.1   subdivision 25, is amended to read: 
  9.2      Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
  9.3   estate containing four or more units and used or held for use by 
  9.4   the owner or by the tenants or lessees of the owner as a 
  9.5   residence for rental periods of 30 days or more.  Class 4a also 
  9.6   includes hospitals licensed under sections 144.50 to 144.56, 
  9.7   other than hospitals exempt under section 272.02, and contiguous 
  9.8   property used for hospital purposes, without regard to whether 
  9.9   the property has been platted or subdivided.  Class 4a property 
  9.10  has a class rate of 3.5 percent of market value for taxes 
  9.11  payable in 1992, and 3.4 2.69 percent of market value for taxes 
  9.12  payable in 1993 and thereafter. 
  9.13     (b) Class 4b includes: 
  9.14     (1) residential real estate containing less than four 
  9.15  units, other than seasonal residential, and recreational; 
  9.16     (2) manufactured homes not classified under any other 
  9.17  provision; 
  9.18     (3) a dwelling, garage, and surrounding one acre of 
  9.19  property on a nonhomestead farm classified under subdivision 23, 
  9.20  paragraph (b).  
  9.21     Class 4b property has a class rate of 2.8 percent of market 
  9.22  value for taxes payable in 1992, 2.5 percent of market value for 
  9.23  taxes payable in 1993, and 2.3 1.82 percent of market value for 
  9.24  taxes payable in 1994 and thereafter. 
  9.25     (c) Class 4c property includes: 
  9.26     (1) a structure that is:  
  9.27     (i) situated on real property that is used for housing for 
  9.28  the elderly or for low- and moderate-income families as defined 
  9.29  in Title II, as amended through December 31, 1990, of the 
  9.30  National Housing Act or the Minnesota housing finance agency law 
  9.31  of 1971, as amended, or rules promulgated by the agency and 
  9.32  financed by a direct federal loan or federally insured loan made 
  9.33  pursuant to Title II of the Act; or 
  9.34     (ii) situated on real property that is used for housing the 
  9.35  elderly or for low- and moderate-income families as defined by 
  9.36  the Minnesota housing finance agency law of 1971, as amended, or 
 10.1   rules adopted by the agency pursuant thereto and financed by a 
 10.2   loan made by the Minnesota housing finance agency pursuant to 
 10.3   the provisions of the act.  
 10.4      This clause applies only to property of a nonprofit or 
 10.5   limited dividend entity.  Property is classified as class 4c 
 10.6   under this clause for 15 years from the date of the completion 
 10.7   of the original construction or substantial rehabilitation, or 
 10.8   for the original term of the loan.  
 10.9      (2) a structure that is: 
 10.10     (i) situated upon real property that is used for housing 
 10.11  lower income families or elderly or handicapped persons, as 
 10.12  defined in section 8 of the United States Housing Act of 1937, 
 10.13  as amended; and 
 10.14     (ii) owned by an entity which has entered into a housing 
 10.15  assistance payments contract under section 8 which provides 
 10.16  assistance for 100 percent of the dwelling units in the 
 10.17  structure, other than dwelling units intended for management or 
 10.18  maintenance personnel.  Property is classified as class 4c under 
 10.19  this clause for the term of the housing assistance payments 
 10.20  contract, including all renewals, or for the term of its 
 10.21  permanent financing, whichever is shorter; and 
 10.22     (3) a qualified low-income building as defined in section 
 10.23  42(c)(2) of the Internal Revenue Code of 1986, as amended 
 10.24  through December 31, 1990, that (i) receives a low-income 
 10.25  housing credit under section 42 of the Internal Revenue Code of 
 10.26  1986, as amended through December 31, 1990; or (ii) meets the 
 10.27  requirements of that section and receives public financing, 
 10.28  except financing provided under sections 469.174 to 469.179, 
 10.29  which contains terms restricting the rents; or (iii) meets the 
 10.30  requirements of section 273.1317.  Classification pursuant to 
 10.31  this clause is limited to a term of 15 years.  The public 
 10.32  financing received must be from at least one of the following 
 10.33  sources:  government issued bonds exempt from taxes under 
 10.34  section 103 of the Internal Revenue Code of 1986, as amended 
 10.35  through December 31, 1993, the proceeds of which are used for 
 10.36  the acquisition or rehabilitation of the building; programs 
 11.1   under section 221(d)(3), 202, or 236, of Title II of the 
 11.2   National Housing Act; rental housing program funds under Section 
 11.3   8 of the United States Housing Act of 1937 or the market rate 
 11.4   family graduated payment mortgage program funds administered by 
 11.5   the Minnesota housing finance agency that are used for the 
 11.6   acquisition or rehabilitation of the building; public financing 
 11.7   provided by a local government used for the acquisition or 
 11.8   rehabilitation of the building, including grants or loans from 
 11.9   federal community development block grants, HOME block grants, 
 11.10  or residential rental bonds issued under chapter 474A; or other 
 11.11  rental housing program funds provided by the Minnesota housing 
 11.12  finance agency for the acquisition or rehabilitation of the 
 11.13  building. 
 11.14     For all properties described in clauses (1), (2), and (3) 
 11.15  and in paragraph (d), the market value determined by the 
 11.16  assessor must be based on the normal approach to value using 
 11.17  normal unrestricted rents unless the owner of the property 
 11.18  elects to have the property assessed under Laws 1991, chapter 
 11.19  291, article 1, section 55.  If the owner of the property elects 
 11.20  to have the market value determined on the basis of the actual 
 11.21  restricted rents, as provided in Laws 1991, chapter 291, article 
 11.22  1, section 55, the property will be assessed at the rate 
 11.23  provided for class 4a or class 4b property, as appropriate.  
 11.24  Properties described in clauses (1)(ii), (3), and (4) may apply 
 11.25  to the assessor for valuation under Laws 1991, chapter 291, 
 11.26  article 1, section 55.  The land on which these structures are 
 11.27  situated has the class rate given in paragraph (b) if the 
 11.28  structure contains fewer than four units, and the class rate 
 11.29  given in paragraph (a) if the structure contains four or more 
 11.30  units.  This clause applies only to the property of a nonprofit 
 11.31  or limited dividend entity.  
 11.32     (4) a parcel of land, not to exceed one acre, and its 
 11.33  improvements or a parcel of unimproved land, not to exceed one 
 11.34  acre, if it is owned by a neighborhood real estate trust and at 
 11.35  least 60 percent of the dwelling units, if any, on all land 
 11.36  owned by the trust are leased to or occupied by lower income 
 12.1   families or individuals.  This clause does not apply to any 
 12.2   portion of the land or improvements used for nonresidential 
 12.3   purposes.  For purposes of this clause, a lower income family is 
 12.4   a family with an income that does not exceed 65 percent of the 
 12.5   median family income for the area, and a lower income individual 
 12.6   is an individual whose income does not exceed 65 percent of the 
 12.7   median individual income for the area, as determined by the 
 12.8   United States Secretary of Housing and Urban Development.  For 
 12.9   purposes of this clause, "neighborhood real estate trust" means 
 12.10  an entity which is certified by the governing body of the 
 12.11  municipality in which it is located to have the following 
 12.12  characteristics: 
 12.13     (a) it is a nonprofit corporation organized under chapter 
 12.14  317A; 
 12.15     (b) it has as its principal purpose providing housing for 
 12.16  lower income families in a specific geographic community 
 12.17  designated in its articles or bylaws; 
 12.18     (c) it limits membership with voting rights to residents of 
 12.19  the designated community; and 
 12.20     (d) it has a board of directors consisting of at least 
 12.21  seven directors, 60 percent of whom are members with voting 
 12.22  rights and, to the extent feasible, 25 percent of whom are 
 12.23  elected by resident members of buildings owned by the trust; and 
 12.24     (5) except as provided in subdivision 22, paragraph (c), 
 12.25  real property devoted to temporary and seasonal residential 
 12.26  occupancy for recreation purposes, including real property 
 12.27  devoted to temporary and seasonal residential occupancy for 
 12.28  recreation purposes and not devoted to commercial purposes for 
 12.29  more than 250 days in the year preceding the year of 
 12.30  assessment.  For purposes of this clause, property is devoted to 
 12.31  a commercial purpose on a specific day if any portion of the 
 12.32  property is used for residential occupancy, and a fee is charged 
 12.33  for residential occupancy.  Class 4c also includes commercial 
 12.34  use real property used exclusively for recreational purposes in 
 12.35  conjunction with class 4c property devoted to temporary and 
 12.36  seasonal residential occupancy for recreational purposes, up to 
 13.1   a total of two acres, provided the property is not devoted to 
 13.2   commercial recreational use for more than 250 days in the year 
 13.3   preceding the year of assessment and is located within two miles 
 13.4   of the class 4c property with which it is used.  Class 4c 
 13.5   property classified in this clause also includes the remainder 
 13.6   of class 1c resorts.  Owners of real property devoted to 
 13.7   temporary and seasonal residential occupancy for recreation 
 13.8   purposes and all or a portion of which was devoted to commercial 
 13.9   purposes for not more than 250 days in the year preceding the 
 13.10  year of assessment desiring classification as class 1c or 4c, 
 13.11  must submit a declaration to the assessor designating the cabins 
 13.12  or units occupied for 250 days or less in the year preceding the 
 13.13  year of assessment by January 15 of the assessment year.  Those 
 13.14  cabins or units and a proportionate share of the land on which 
 13.15  they are located will be designated class 1c or 4c as otherwise 
 13.16  provided.  The remainder of the cabins or units and a 
 13.17  proportionate share of the land on which they are located will 
 13.18  be designated as class 3a.  The first $100,000 of the market 
 13.19  value of the remainder of the cabins or units and a 
 13.20  proportionate share of the land on which they are located shall 
 13.21  have a class rate of three 2.37 percent.  The owner of property 
 13.22  desiring designation as class 1c or 4c property must provide 
 13.23  guest registers or other records demonstrating that the units 
 13.24  for which class 1c or 4c designation is sought were not occupied 
 13.25  for more than 250 days in the year preceding the assessment if 
 13.26  so requested.  The portion of a property operated as a (1) 
 13.27  restaurant, (2) bar, (3) gift shop, and (4) other nonresidential 
 13.28  facility operated on a commercial basis not directly related to 
 13.29  temporary and seasonal residential occupancy for recreation 
 13.30  purposes shall not qualify for class 1c or 4c; 
 13.31     (6) real property up to a maximum of one acre of land owned 
 13.32  by a nonprofit community service oriented organization; provided 
 13.33  that the property is not used for a revenue-producing activity 
 13.34  for more than six days in the calendar year preceding the year 
 13.35  of assessment and the property is not used for residential 
 13.36  purposes on either a temporary or permanent basis.  For purposes 
 14.1   of this clause, a "nonprofit community service oriented 
 14.2   organization" means any corporation, society, association, 
 14.3   foundation, or institution organized and operated exclusively 
 14.4   for charitable, religious, fraternal, civic, or educational 
 14.5   purposes, and which is exempt from federal income taxation 
 14.6   pursuant to section 501(c)(3), (10), or (19) of the Internal 
 14.7   Revenue Code of 1986, as amended through December 31, 1990.  For 
 14.8   purposes of this clause, "revenue-producing activities" shall 
 14.9   include but not be limited to property or that portion of the 
 14.10  property that is used as an on-sale intoxicating liquor or 3.2 
 14.11  percent malt liquor establishment licensed under chapter 340A, a 
 14.12  restaurant open to the public, bowling alley, a retail store, 
 14.13  gambling conducted by organizations licensed under chapter 349, 
 14.14  an insurance business, or office or other space leased or rented 
 14.15  to a lessee who conducts a for-profit enterprise on the 
 14.16  premises.  Any portion of the property which is used for 
 14.17  revenue-producing activities for more than six days in the 
 14.18  calendar year preceding the year of assessment shall be assessed 
 14.19  as class 3a.  The use of the property for social events open 
 14.20  exclusively to members and their guests for periods of less than 
 14.21  24 hours, when an admission is not charged nor any revenues are 
 14.22  received by the organization shall not be considered a 
 14.23  revenue-producing activity; 
 14.24     (7) post-secondary student housing of not more than one 
 14.25  acre of land that is owned by a nonprofit corporation organized 
 14.26  under chapter 317A and is used exclusively by a student 
 14.27  cooperative, sorority, or fraternity for on-campus housing or 
 14.28  housing located within two miles of the border of a college 
 14.29  campus; and 
 14.30     (8) manufactured home parks as defined in section 327.14, 
 14.31  subdivision 3. 
 14.32     Class 4c property has a class rate of 2.3 1.82 percent of 
 14.33  market value, except that (i) each parcel of seasonal 
 14.34  residential recreational property not used for commercial 
 14.35  purposes under clause (5) has a class rate of 2.2 1.58 percent 
 14.36  of market value for taxes payable in 1992, and for taxes payable 
 15.1   in 1993 and thereafter, on the first $72,000 of market value on 
 15.2   each parcel has a class rate of two percent and 1.98 percent on 
 15.3   the market value of each parcel that exceeds $72,000 has a class 
 15.4   rate of 2.5 percent, and (ii) manufactured home parks assessed 
 15.5   under clause (8) have a class rate of two percent for taxes 
 15.6   payable in 1993, 1994, and 1995 only.  
 15.7      (d) Class 4d property includes: 
 15.8      (1) a structure that is: 
 15.9      (i) situated on real property that is used for housing for 
 15.10  the elderly or for low and moderate income families as defined 
 15.11  by the Farmers Home Administration; 
 15.12     (ii) located in a municipality of less than 10,000 
 15.13  population; and 
 15.14     (iii) financed by a direct loan or insured loan from the 
 15.15  Farmers Home Administration.  Property is classified under this 
 15.16  clause for 15 years from the date of the completion of the 
 15.17  original construction or for the original term of the loan.  
 15.18     The class rates in paragraph (c), clauses (1), (2), and (3) 
 15.19  and this clause apply to the properties described in them, only 
 15.20  in proportion to occupancy of the structure by elderly or 
 15.21  handicapped persons or low and moderate income families as 
 15.22  defined in the applicable laws unless construction of the 
 15.23  structure had been commenced prior to January 1, 1984; or the 
 15.24  project had been approved by the governing body of the 
 15.25  municipality in which it is located prior to June 30, 1983; or 
 15.26  financing of the project had been approved by a federal or state 
 15.27  agency prior to June 30, 1983.  For those properties, 4c or 4d 
 15.28  classification is available only for those units meeting the 
 15.29  requirements of section 273.1318. 
 15.30     Classification under this clause is only available to 
 15.31  property of a nonprofit or limited dividend entity. 
 15.32     In the case of a structure financed or refinanced under any 
 15.33  federal or state mortgage insurance or direct loan program 
 15.34  exclusively for housing for the elderly or for housing for the 
 15.35  handicapped, a unit shall be considered occupied so long as it 
 15.36  is actually occupied by an elderly or handicapped person or, if 
 16.1   vacant, is held for rental to an elderly or handicapped person. 
 16.2      (2) For taxes payable in 1992, 1993, and 1994, only, 
 16.3   buildings and appurtenances, together with the land upon which 
 16.4   they are located, leased by the occupant under the community 
 16.5   lending model lease-purchase mortgage loan program administered 
 16.6   by the Federal National Mortgage Association, provided the 
 16.7   occupant's income is no greater than 60 percent of the county or 
 16.8   area median income, adjusted for family size and the building 
 16.9   consists of existing single family or duplex housing.  The lease 
 16.10  agreement must provide for a portion of the lease payment to be 
 16.11  escrowed as a nonrefundable down payment on the housing.  To 
 16.12  qualify under this clause, the taxpayer must apply to the county 
 16.13  assessor by May 30 of each year.  The application must be 
 16.14  accompanied by an affidavit or other proof required by the 
 16.15  assessor to determine qualification under this clause. 
 16.16     (3) Qualifying buildings and appurtenances, together with 
 16.17  the land upon which they are located, leased for a period of up 
 16.18  to five years by the occupant under a lease-purchase program 
 16.19  administered by the Minnesota housing finance agency or a 
 16.20  housing and redevelopment authority authorized under sections 
 16.21  469.001 to 469.047, provided the occupant's income is no greater 
 16.22  than 80 percent of the county or area median income, adjusted 
 16.23  for family size, and the building consists of two or less 
 16.24  dwelling units.  The lease agreement must provide for a portion 
 16.25  of the lease payment to be escrowed as a nonrefundable down 
 16.26  payment on the housing.  The administering agency shall verify 
 16.27  the occupants income eligibility and certify to the county 
 16.28  assessor that the occupant meets the income criteria under this 
 16.29  paragraph.  To qualify under this clause, the taxpayer must 
 16.30  apply to the county assessor by May 30 of each year.  For 
 16.31  purposes of this section, "qualifying buildings and 
 16.32  appurtenances" shall be defined as one or two unit residential 
 16.33  buildings which are unoccupied and have been abandoned and 
 16.34  boarded for at least six months. 
 16.35     Class 4d property has a class rate of two 1.58 percent of 
 16.36  market value except that property classified under clause (3), 
 17.1   shall have the same class rate as class 1a property. 
 17.2      (e) Residential rental property that would otherwise be 
 17.3   assessed as class 4 property under paragraph (a); paragraph (b), 
 17.4   clauses (1) and (3); paragraph (c), clause (1), (2), (3), or 
 17.5   (4), is assessed at the class rate applicable to it under 
 17.6   Minnesota Statutes 1988, section 273.13, if it is found to be a 
 17.7   substandard building under section 273.1316.  Residential rental 
 17.8   property that would otherwise be assessed as class 4 property 
 17.9   under paragraph (d) is assessed at 2.3 1.82 percent of market 
 17.10  value if it is found to be a substandard building under section 
 17.11  273.1316. 
 17.12     Sec. 5.  Minnesota Statutes 1994, section 273.13, 
 17.13  subdivision 31, is amended to read: 
 17.14     Subd. 31.  [CLASS 5.] Class 5 property includes:  
 17.15     (1) tools, implements, and machinery of an electric 
 17.16  generating, transmission, or distribution system or a pipeline 
 17.17  system transporting or distributing water, gas, crude oil, or 
 17.18  petroleum products or mains and pipes used in the distribution 
 17.19  of steam or hot or chilled water for heating or cooling 
 17.20  buildings, which are fixtures; 
 17.21     (2) unmined iron ore and low-grade iron-bearing formations 
 17.22  as defined in section 273.14; and 
 17.23     (3) all other property not otherwise classified. 
 17.24     Class 5 property has a class rate of 5.06 3.63 percent of 
 17.25  market value. 
 17.26     Sec. 6.  Minnesota Statutes 1994, section 273.1398, 
 17.27  subdivision 1, is amended to read: 
 17.28     Subdivision 1.  [DEFINITIONS.] (a) In this section, the 
 17.29  terms defined in this subdivision have the meanings given them. 
 17.30     (b) "Unique taxing jurisdiction" means the geographic area 
 17.31  subject to the same set of local tax rates. 
 17.32     (c) "Net tax capacity" means the product of (i) the 
 17.33  appropriate net class rates for the year in which the aid is 
 17.34  payable, except that for aid payable in 1993 the class rate 
 17.35  applicable to class 4a shall be 3.5 percent; and the class rate 
 17.36  applicable to class 4b shall be 2.65 percent; and for aid 
 18.1   payable in 1994 the class rate applicable to class 4b shall be 
 18.2   2.4 percent and the class rate applicable to class 2a property 
 18.3   over $115,000 market value and less than 320 acres is 1.15 
 18.4   percent 1996, the class rates applicable to each class of 
 18.5   property shall be the rates applied to that class in section 
 18.6   273.13 for taxes payable in 1995, and (ii) estimated market 
 18.7   values for the assessment two years prior to that in which aid 
 18.8   is payable.  The exclusion of the value of the house, garage, 
 18.9   and one acre from the first tier of agricultural homestead 
 18.10  property must not be considered in determining net tax capacity 
 18.11  for purposes of this paragraph for aids payable in 1994.  "Total 
 18.12  net tax capacity" means the net tax capacities for all property 
 18.13  within the unique taxing jurisdiction.  The total net tax 
 18.14  capacity used shall be reduced by the sum of (1) the unique 
 18.15  taxing jurisdiction's net tax capacity of commercial industrial 
 18.16  property as defined in section 473F.02, subdivision 3, 
 18.17  multiplied by the ratio determined pursuant to section 473F.08, 
 18.18  subdivision 6, for the municipality, as defined in section 
 18.19  473F.02, subdivision 8, in which the unique taxing jurisdiction 
 18.20  is located, (2) the net tax capacity of the captured value of 
 18.21  tax increment financing districts as defined in section 469.177, 
 18.22  subdivision 2, and (3) the net tax capacity of transmission 
 18.23  lines deducted from a local government's total net tax capacity 
 18.24  under section 273.425.  For purposes of determining the net tax 
 18.25  capacity of property referred to in clauses (1), (2), and (3), 
 18.26  the net tax capacity shall be multiplied by the ratio of the 
 18.27  highest class rate for class 3a property for taxes payable in 
 18.28  the year in which the aid is payable to the highest class rate 
 18.29  for class 3a property in the prior year.  Net tax capacity 
 18.30  cannot be less than zero. 
 18.31     (d) "Previous net tax capacity" means the product of the 
 18.32  appropriate net class rates for the year previous to the year in 
 18.33  which the aid is payable, and estimated market values for the 
 18.34  assessment two years prior to that in which aid is payable.  
 18.35  "Total previous net tax capacity" means the previous net tax 
 18.36  capacities for all property within the unique taxing 
 19.1   jurisdiction.  The total previous net tax capacity shall be 
 19.2   reduced by the sum of (1) the unique taxing jurisdiction's 
 19.3   previous net tax capacity of commercial-industrial property as 
 19.4   defined in section 473F.02, subdivision 3, multiplied by the 
 19.5   ratio determined pursuant to section 473F.08, subdivision 6, for 
 19.6   the municipality, as defined in section 473F.02, subdivision 8, 
 19.7   in which the unique taxing jurisdiction is located, (2) the 
 19.8   previous net tax capacity of the captured value of tax increment 
 19.9   financing districts as defined in section 469.177, subdivision 
 19.10  2, and (3) the previous net tax capacity of transmission lines 
 19.11  deducted from a local government's total net tax capacity under 
 19.12  section 273.425.  Previous net tax capacity cannot be less than 
 19.13  zero. 
 19.14     (e) "Equalized market values" are market values that have 
 19.15  been equalized by dividing the assessor's estimated market value 
 19.16  for the second year prior to that in which the aid is payable by 
 19.17  the assessment sales ratios determined by class in the 
 19.18  assessment sales ratio study conducted by the department of 
 19.19  revenue pursuant to section 124.2131 in the second year prior to 
 19.20  that in which the aid is payable.  The equalized market values 
 19.21  shall equal the unequalized market values divided by the 
 19.22  assessment sales ratio. 
 19.23     (f) "Equalized school levies" means the amounts levied for: 
 19.24     (1) general education under section 124A.23, subdivision 2; 
 19.25     (2) supplemental revenue under section 124A.22, subdivision 
 19.26  8a; 
 19.27     (3) capital expenditure facilities revenue under section 
 19.28  124.243, subdivision 3; 
 19.29     (4) capital expenditure equipment revenue under section 
 19.30  124.244, subdivision 2; 
 19.31     (5) basic transportation under section 124.226, subdivision 
 19.32  1; and 
 19.33     (6) referendum revenue under section 124A.03. 
 19.34     (g) "Current local tax rate" means the quotient derived by 
 19.35  dividing the taxes levied within a unique taxing jurisdiction 
 19.36  for taxes payable in the year prior to that for which aids are 
 20.1   being calculated by the total previous net tax capacity of the 
 20.2   unique taxing jurisdiction.  
 20.3      (h) For purposes of calculating and allocating homestead 
 20.4   and agricultural credit aid authorized pursuant to subdivision 2 
 20.5   and the disparity reduction aid authorized in subdivision 3, 
 20.6   "gross taxes levied on all properties," "gross taxes," or "taxes 
 20.7   levied" means the total net tax capacity based taxes levied on 
 20.8   all properties except that levied on the captured value of tax 
 20.9   increment districts as defined in section 469.177, subdivision 
 20.10  2, and that levied on the portion of commercial industrial 
 20.11  properties' assessed value or gross tax capacity, as defined in 
 20.12  section 473F.02, subdivision 3, subject to the areawide tax as 
 20.13  provided in section 473F.08, subdivision 6, in a unique taxing 
 20.14  jurisdiction.  "Gross taxes" are before any reduction for 
 20.15  disparity reduction aid but "taxes levied" are after any 
 20.16  reduction for disparity reduction aid.  Gross taxes levied or 
 20.17  taxes levied cannot be less than zero.  
 20.18     "Taxes levied" excludes equalized school levies. 
 20.19     (i) "Human services aids" means: 
 20.20     (1) aid to families with dependent children under sections 
 20.21  256.82, subdivision 1, and 256.935, subdivision 1; 
 20.22     (2) medical assistance under sections 256B.041, subdivision 
 20.23  5, and 256B.19, subdivision 1; 
 20.24     (3) general assistance medical care under section 256D.03, 
 20.25  subdivision 6; 
 20.26     (4) general assistance under section 256D.03, subdivision 
 20.27  2; 
 20.28     (5) work readiness under section 256D.03, subdivision 2; 
 20.29     (6) emergency assistance under section 256.871, subdivision 
 20.30  6; 
 20.31     (7) Minnesota supplemental aid under section 256D.36, 
 20.32  subdivision 1; 
 20.33     (8) preadmission screening and alternative care grants; 
 20.34     (9) work readiness services under section 256D.051; 
 20.35     (10) case management services under section 256.736, 
 20.36  subdivision 13; 
 21.1      (11) general assistance claims processing, medical 
 21.2   transportation and related costs; and 
 21.3      (12) medical assistance, medical transportation and related 
 21.4   costs. 
 21.5      (j) "Household adjustment factor" means the number of 
 21.6   households for the second most recent year preceding that in 
 21.7   which the aids are payable divided by the number of households 
 21.8   for the third most recent year.  The household adjustment factor 
 21.9   cannot be less than one.  
 21.10     (k) "Growth adjustment factor" means the household 
 21.11  adjustment factor in the case of counties.  In the case of 
 21.12  cities, towns, school districts, and special taxing districts, 
 21.13  the growth adjustment factor equals one.  The growth adjustment 
 21.14  factor cannot be less than one.  
 21.15     (l) For aid payable in 1992 and subsequent years, 
 21.16  "homestead and agricultural credit base" means the previous 
 21.17  year's certified homestead and agricultural credit aid 
 21.18  determined under subdivision 2 less any permanent aid reduction 
 21.19  in the previous year to homestead and agricultural credit aid 
 21.20  under section 477A.0132, plus, for aid payable in 1992, fiscal 
 21.21  disparity homestead and agricultural credit aid under 
 21.22  subdivision 2b.  
 21.23     (m) "Net tax capacity adjustment" means (1) the total 
 21.24  previous net tax capacity minus the total net tax capacity, 
 21.25  multiplied by (2) the unique taxing jurisdiction's current local 
 21.26  tax rate.  The net tax capacity adjustment cannot be less than 
 21.27  zero. 
 21.28     (n) "Fiscal disparity adjustment" means the difference 
 21.29  between (1) a taxing jurisdiction's fiscal disparity 
 21.30  distribution levy under section 473F.08, subdivision 3, clause 
 21.31  (a), for taxes payable in the year prior to that for which aids 
 21.32  are being calculated, and (2) the same distribution levy 
 21.33  multiplied by the ratio of the highest class rate for class 3 
 21.34  property for taxes payable in the year prior to that for which 
 21.35  aids are being calculated to the highest class rate for class 3 
 21.36  property for taxes payable in the second prior year to that for 
 22.1   which aids are being calculated.  In the case of school 
 22.2   districts, the fiscal disparity distribution levy shall exclude 
 22.3   that part of the levy attributable to equalized school levies. 
 22.4      Sec. 7.  [REPEALER.] 
 22.5      Minnesota Statutes 1994, section 273.13, subdivision 32, is 
 22.6   repealed. 
 22.7      Sec. 8.  [EFFECTIVE DATE.] 
 22.8      Sections 1 to 7 are effective for taxes levied in 1995, 
 22.9   payable in 1996, and thereafter.