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Minnesota Legislature

Office of the Revisor of Statutes

HF 2096

as introduced - 91st Legislature (2019 - 2020) Posted on 03/11/2019 05:19pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to taxation; property; modifying family-owned resorts provisions; amending
Minnesota Statutes 2018, section 273.13, subdivision 22.

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

Section 1.

Minnesota Statutes 2018, section 273.13, subdivision 22, is amended to read:


Subd. 22.

Class 1.

(a) Except as provided in subdivision 23 and in paragraphs (b) and
(c), real estate which is residential and used for homestead purposes is class 1a. In the case
of a duplex or triplex in which one of the units is used for homestead purposes, the entire
property is deemed to be used for homestead purposes. The market value of class 1a property
must be determined based upon the value of the house, garage, and land.

The first $500,000 of market value of class 1a property has a net classification rate of
one percent of its market value; and the market value of class 1a property that exceeds
$500,000 has a classification rate of 1.25 percent of its market value.

(b) Class 1b property includes homestead real estate or homestead manufactured homes
used for the purposes of a homestead by:

(1) any person who is blind as defined in section 256D.35, or the blind person and the
blind person's spouse;

(2) any person who is permanently and totally disabled or by the disabled person and
the disabled person's spouse; or

(3) the surviving spouse of a permanently and totally disabled veteran homesteading a
property classified under this paragraph for taxes payable in 2008.

Property is classified and assessed under clause (2) only if the government agency or
income-providing source certifies, upon the request of the homestead occupant, that the
homestead occupant satisfies the disability requirements of this paragraph, and that the
property is not eligible for the valuation exclusion under subdivision 34.

Property is classified and assessed under paragraph (b) only if the commissioner of
revenue or the county assessor certifies that the homestead occupant satisfies the requirements
of this paragraph.

Permanently and totally disabled for the purpose of this subdivision means a condition
which is permanent in nature and totally incapacitates the person from working at an
occupation which brings the person an income. The first $50,000 market value of class 1b
property has a net classification rate of .45 percent of its market value. The remaining market
value of class 1b property is classified as class 1a or class 2a property, whichever is
appropriate.

(c) Class 1c property is commercial use real and personal property that abuts public
water as defined in section 103G.005, subdivision 15, or abuts a state trail administered by
the Department of Natural Resources, and is devoted to temporary and seasonal residential
occupancy for recreational purposes but not devoted to commercial purposes for more than
250 days in the year preceding the year of assessment, and that includes a portion used as
a homestead by the owner, which includes a dwelling occupied as a homestead by a
shareholder of a corporation that owns the resort, a partner in a partnership that owns the
resort, or a member of a limited liability company that owns the resort deleted text begineven ifdeleted text endnew text begin, whethernew text end the
title to the homestead is held by the corporation, partnership, or limited liability companynew text begin,
or by a shareholder of a corporation that owns the resort, a partner in a partnership that owns
the resort, or a member of a limited liability company that owns the resort
new text end. For purposes of
this paragraph, property is devoted to a commercial purpose on a specific day if any portion
of the property, excluding the portion used exclusively as a homestead, is used for residential
occupancy and a fee is charged for residential occupancynew text begin, except that residential occupancy
on a temporary basis for workforce housing, including but not limited to housing of
construction staff during short-term construction projects, is not a commercial purpose
new text end.
Class 1c property must contain three or more rental units. A "rental unit" is defined as a
cabin, condominium, townhouse, sleeping room, or individual camping site equipped with
water and electrical hookups for recreational vehicles. Class 1c property must provide
recreational activities such as the rental of ice fishing houses, boats and motors, snowmobiles,
downhill or cross-country ski equipment; provide marina services, launch services, or guide
services; or sell bait and fishing tackle. Any unit in which the right to use the property is
transferred to an individual or entity by deeded interest, or the sale of shares or stock, no
longer qualifies for class 1c even though it may remain available for rent. A camping pad
offered for rent by a property that otherwise qualifies for class 1c is also class 1c, regardless
of the term of the rental agreementdeleted text begin, as long as the use of the camping pad does not exceed
250 days
deleted text end. If the same owner owns two separate parcels that are located in the same township,
and one of those properties is classified as a class 1c property and the other would be eligible
to be classified as a class 1c property if it was used as the homestead of the owner, both
properties will be assessed as a single class 1c property; for purposes of this sentence,
properties are deemed to be owned by the same owner if each of them is owned by a limited
liability company, and both limited liability companies have the same membership. The
portion of the property used as a homestead is class 1a property under paragraph (a). The
remainder of the property is classified as follows: the first deleted text begin$600,000deleted text endnew text begin $750,000new text end of market
value is tier I, the next deleted text begin$1,700,000deleted text endnew text begin $2,000,000new text end of market value is tier II, and any remaining
market value is tier III. The classification rates for class 1c are: tier I, 0.50 percent; tier II,
1.0 percent; and tier III, 1.25 percent. Owners of real and personal property devoted to
temporary and seasonal residential occupancy for recreation purposes in which all or a
portion of the property was devoted to commercial purposes for not more than 250 days in
the year preceding the year of assessment desiring classification as class 1c, must submit a
declaration to the assessor designating the cabins or units occupied for 250 days or less in
the year preceding the year of assessment by January 15 of the assessment year. Those
cabins or units and a proportionate share of the land on which they are located must be
designated as class 1c as otherwise provided. The remainder of the cabins or units and a
proportionate share of the land on which they are located must be designated as class 3a
commercial. The owner of property desiring designation as class 1c property must provide
guest registers or other records demonstrating that the units for which class 1c designation
is sought were not occupied for more than 250 days in the year preceding the assessment
if so requested. The portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop,
(4) conference center or meeting room, and (5) other nonresidential facility operated on a
commercial basis not directly related to temporary and seasonal residential occupancy for
recreation purposes does not qualify for class 1c.

(d) Class 1d property includes structures that meet all of the following criteria:

(1) the structure is located on property that is classified as agricultural property under
section 273.13, subdivision 23;

(2) the structure is occupied exclusively by seasonal farm workers during the time when
they work on that farm, and the occupants are not charged rent for the privilege of occupying
the property, provided that use of the structure for storage of farm equipment and produce
does not disqualify the property from classification under this paragraph;

(3) the structure meets all applicable health and safety requirements for the appropriate
season; and

(4) the structure is not salable as residential property because it does not comply with
local ordinances relating to location in relation to streets or roads.

The market value of class 1d property has the same classification rates as class 1a property
under paragraph (a).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2020 and thereafter.
new text end