HF 2142

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to taxation; providing property tax 
  1.3             classification reform; increasing local government 
  1.4             aid; providing for education funding; increasing 
  1.5             property tax refunds; establishing a property tax 
  1.6             deferral program for senior citizens; appropriating 
  1.7             money; amending Minnesota Statutes 1996, sections 
  1.8             270B.12, by adding a subdivision; 273.13, subdivisions 
  1.9             22, 23, 24, and 25; 273.1398, subdivisions 1a, 8, and 
  1.10            by adding a subdivision; 275.065, subdivision 3; 
  1.11            276.04, subdivision 2; 290A.04, subdivisions 2 and 6; 
  1.12            and 477A.03, subdivision 2; proposing coding for new 
  1.13            law as Minnesota Statutes, chapter 290B; repealing 
  1.14            Minnesota Statutes 1996, section 273.13, subdivision 
  1.15            32. 
  1.16  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.17                             ARTICLE 1
  1.18                        PROPERTY TAX REFORM
  1.19     Section 1.  Minnesota Statutes 1996, section 273.13, 
  1.20  subdivision 22, is amended to read: 
  1.21     Subd. 22.  [CLASS 1.] (a) Except as provided in subdivision 
  1.22  23, real estate which is residential and used for homestead 
  1.23  purposes is class 1.  The market value of class 1a property must 
  1.24  be determined based upon the value of the house, garage, and 
  1.25  land.  
  1.26     The first $72,000 of market value of class 1a property has 
  1.27  a net class rate of one percent of its market value and a gross 
  1.28  class rate of 2.17 percent of its market value.  For taxes 
  1.29  payable in 1992, the market value of class 1a property that 
  1.30  exceeds $72,000 but does not exceed $115,000 has a class rate of 
  2.1   two percent of its market value; and the market value of class 
  2.2   1a property that exceeds $115,000 has a class rate of 2.5 
  2.3   percent of its market value.  For taxes payable in 1993 and 
  2.4   thereafter, The market value of class 1a property that exceeds 
  2.5   $72,000 has a class rate of two 1.75 percent. 
  2.6      (b) Class 1b property includes homestead real estate or 
  2.7   homestead manufactured homes used for the purposes of a 
  2.8   homestead by 
  2.9      (1) any blind person, or the blind person and the blind 
  2.10  person's spouse; or 
  2.11     (2) any person, hereinafter referred to as "veteran," who: 
  2.12     (i) served in the active military or naval service of the 
  2.13  United States; and 
  2.14     (ii) is entitled to compensation under the laws and 
  2.15  regulations of the United States for permanent and total 
  2.16  service-connected disability due to the loss, or loss of use, by 
  2.17  reason of amputation, ankylosis, progressive muscular 
  2.18  dystrophies, or paralysis, of both lower extremities, such as to 
  2.19  preclude motion without the aid of braces, crutches, canes, or a 
  2.20  wheelchair; and 
  2.21     (iii) has acquired a special housing unit with special 
  2.22  fixtures or movable facilities made necessary by the nature of 
  2.23  the veteran's disability, or the surviving spouse of the 
  2.24  deceased veteran for as long as the surviving spouse retains the 
  2.25  special housing unit as a homestead; or 
  2.26     (3) any person who: 
  2.27     (i) is permanently and totally disabled and 
  2.28     (ii) receives 90 percent or more of total income from 
  2.29     (A) aid from any state as a result of that disability; or 
  2.30     (B) supplemental security income for the disabled; or 
  2.31     (C) workers' compensation based on a finding of total and 
  2.32  permanent disability; or 
  2.33     (D) social security disability, including the amount of a 
  2.34  disability insurance benefit which is converted to an old age 
  2.35  insurance benefit and any subsequent cost of living increases; 
  2.36  or 
  3.1      (E) aid under the federal Railroad Retirement Act of 1937, 
  3.2   United States Code Annotated, title 45, section 228b(a)5; or 
  3.3      (F) a pension from any local government retirement fund 
  3.4   located in the state of Minnesota as a result of that 
  3.5   disability; or 
  3.6      (G) pension, annuity, or other income paid as a result of 
  3.7   that disability from a private pension or disability plan, 
  3.8   including employer, employee, union, and insurance plans and 
  3.9      (iii) has household income as defined in section 290A.03, 
  3.10  subdivision 5, of $50,000 or less; or 
  3.11     (4) any person who is permanently and totally disabled and 
  3.12  whose household income as defined in section 290A.03, 
  3.13  subdivision 5, is 150 percent or less of the federal poverty 
  3.14  level. 
  3.15     Property is classified and assessed under clause (4) only 
  3.16  if the government agency or income-providing source certifies, 
  3.17  upon the request of the homestead occupant, that the homestead 
  3.18  occupant satisfies the disability requirements of this paragraph.
  3.19     Property is classified and assessed pursuant to clause (1) 
  3.20  only if the commissioner of economic security certifies to the 
  3.21  assessor that the homestead occupant satisfies the requirements 
  3.22  of this paragraph.  
  3.23     Permanently and totally disabled for the purpose of this 
  3.24  subdivision means a condition which is permanent in nature and 
  3.25  totally incapacitates the person from working at an occupation 
  3.26  which brings the person an income.  The first $32,000 market 
  3.27  value of class 1b property has a net class rate of .45 percent 
  3.28  of its market value and a gross class rate of .87 percent of its 
  3.29  market value.  The remaining market value of class 1b property 
  3.30  has a gross or net class rate using the rates for class 1 or 
  3.31  class 2a property, whichever is appropriate, of similar market 
  3.32  value.  
  3.33     (c) Class 1c property is commercial use real property that 
  3.34  abuts a lakeshore line and is devoted to temporary and seasonal 
  3.35  residential occupancy for recreational purposes but not devoted 
  3.36  to commercial purposes for more than 250 days in the year 
  4.1   preceding the year of assessment, and that includes a portion 
  4.2   used as a homestead by the owner, which includes a dwelling 
  4.3   occupied as a homestead by a shareholder of a corporation that 
  4.4   owns the resort or a partner in a partnership that owns the 
  4.5   resort, even if the title to the homestead is held by the 
  4.6   corporation or partnership.  For purposes of this clause, 
  4.7   property is devoted to a commercial purpose on a specific day if 
  4.8   any portion of the property, excluding the portion used 
  4.9   exclusively as a homestead, is used for residential occupancy 
  4.10  and a fee is charged for residential occupancy.  Class 1c 
  4.11  property has a class rate of one percent of total market value 
  4.12  for taxes payable in 1993 and thereafter with the following 
  4.13  limitation:  the area of the property must not exceed 100 feet 
  4.14  of lakeshore footage for each cabin or campsite located on the 
  4.15  property up to a total of 800 feet and 500 feet in depth, 
  4.16  measured away from the lakeshore.  
  4.17     Sec. 2.  Minnesota Statutes 1996, section 273.13, 
  4.18  subdivision 23, is amended to read: 
  4.19     Subd. 23.  [CLASS 2.] (a) Class 2a property is agricultural 
  4.20  land including any improvements that is homesteaded.  The market 
  4.21  value of the house and garage and immediately surrounding one 
  4.22  acre of land has the same class rates as class 1a property under 
  4.23  subdivision 22.  The value of the remaining land including 
  4.24  improvements up to $115,000 has a net class rate of .45 percent 
  4.25  of market value and a gross class rate of 1.75 percent of market 
  4.26  value.  The remaining value of class 2a property over $115,000 
  4.27  of market value that does not exceed 320 acres has a net class 
  4.28  rate of one 0.9 percent of market value, and a gross class rate 
  4.29  of 2.25 percent of market value.  The remaining property over 
  4.30  the $115,000 market value in excess of 320 acres has a class 
  4.31  rate of 1.5 1.4 percent of market value, and a gross class rate 
  4.32  of 2.25 percent of market value.  
  4.33     (b) Class 2b property is (1) real estate, rural in 
  4.34  character and used exclusively for growing trees for timber, 
  4.35  lumber, and wood and wood products; (2) real estate that is not 
  4.36  improved with a structure and is used exclusively for growing 
  5.1   trees for timber, lumber, and wood and wood products, if the 
  5.2   owner has participated or is participating in a cost-sharing 
  5.3   program for afforestation, reforestation, or timber stand 
  5.4   improvement on that particular property, administered or 
  5.5   coordinated by the commissioner of natural resources; (3) real 
  5.6   estate that is nonhomestead agricultural land; or (4) a landing 
  5.7   area or public access area of a privately owned public use 
  5.8   airport.  Class 2b property has a net class rate of 1.5 1.4 
  5.9   percent of market value, and a gross class rate of 2.25 percent 
  5.10  of market value.  
  5.11     (c) Agricultural land as used in this section means 
  5.12  contiguous acreage of ten acres or more, primarily used during 
  5.13  the preceding year for agricultural purposes.  Agricultural use 
  5.14  may include pasture, timber, waste, unusable wild land, and land 
  5.15  included in state or federal farm or conservation programs.  
  5.16  "Agricultural purposes" as used in this section means the 
  5.17  raising or cultivation of agricultural products.  Land enrolled 
  5.18  in the Reinvest in Minnesota program under sections 103F.505 to 
  5.19  103F.531 or the federal Conservation Reserve Program as 
  5.20  contained in Public Law Number 99-198, and consisting of a 
  5.21  minimum of ten contiguous acres, shall be classified as 
  5.22  agricultural.  Agricultural classification for property shall be 
  5.23  determined with respect to the use of the whole parcel, and not 
  5.24  based upon the market value of any residential structures on the 
  5.25  parcel or contiguous parcels under the same ownership. 
  5.26     (d) Real estate of less than ten acres used principally for 
  5.27  raising or cultivating agricultural products, shall be 
  5.28  considered as agricultural land, if it is not used primarily for 
  5.29  residential purposes.  
  5.30     (e) The term "agricultural products" as used in this 
  5.31  subdivision includes:  
  5.32     (1) livestock, dairy animals, dairy products, poultry and 
  5.33  poultry products, fur-bearing animals, horticultural and nursery 
  5.34  stock described in sections 18.44 to 18.61, fruit of all kinds, 
  5.35  vegetables, forage, grains, bees, and apiary products by the 
  5.36  owner; 
  6.1      (2) fish bred for sale and consumption if the fish breeding 
  6.2   occurs on land zoned for agricultural use; 
  6.3      (3) the commercial boarding of horses if the boarding is 
  6.4   done in conjunction with raising or cultivating agricultural 
  6.5   products as defined in clause (1); 
  6.6      (4) property which is owned and operated by nonprofit 
  6.7   organizations used for equestrian activities, excluding racing; 
  6.8   and 
  6.9      (5) game birds and waterfowl bred and raised for use on a 
  6.10  shooting preserve licensed under section 97A.115.  
  6.11     (f) If a parcel used for agricultural purposes is also used 
  6.12  for commercial or industrial purposes, including but not limited 
  6.13  to:  
  6.14     (1) wholesale and retail sales; 
  6.15     (2) processing of raw agricultural products or other goods; 
  6.16     (3) warehousing or storage of processed goods; and 
  6.17     (4) office facilities for the support of the activities 
  6.18  enumerated in clauses (1), (2), and (3), 
  6.19  the assessor shall classify the part of the parcel used for 
  6.20  agricultural purposes as class 1b, 2a, or 2b, whichever is 
  6.21  appropriate, and the remainder in the class appropriate to its 
  6.22  use.  The grading, sorting, and packaging of raw agricultural 
  6.23  products for first sale is considered an agricultural purpose.  
  6.24  A greenhouse or other building where horticultural or nursery 
  6.25  products are grown that is also used for the conduct of retail 
  6.26  sales must be classified as agricultural if it is primarily used 
  6.27  for the growing of horticultural or nursery products from seed, 
  6.28  cuttings, or roots and occasionally as a showroom for the retail 
  6.29  sale of those products.  Use of a greenhouse or building only 
  6.30  for the display of already grown horticultural or nursery 
  6.31  products does not qualify as an agricultural purpose.  
  6.32     The assessor shall determine and list separately on the 
  6.33  records the market value of the homestead dwelling and the one 
  6.34  acre of land on which that dwelling is located.  If any farm 
  6.35  buildings or structures are located on this homesteaded acre of 
  6.36  land, their market value shall not be included in this separate 
  7.1   determination.  
  7.2      (g) To qualify for classification under paragraph (b), 
  7.3   clause (4), a privately owned public use airport must be 
  7.4   licensed as a public airport under section 360.018.  For 
  7.5   purposes of paragraph (b), clause (4), "landing area" means that 
  7.6   part of a privately owned public use airport properly cleared, 
  7.7   regularly maintained, and made available to the public for use 
  7.8   by aircraft and includes runways, taxiways, aprons, and sites 
  7.9   upon which are situated landing or navigational aids.  A landing 
  7.10  area also includes land underlying both the primary surface and 
  7.11  the approach surfaces that comply with all of the following:  
  7.12     (i) the land is properly cleared and regularly maintained 
  7.13  for the primary purposes of the landing, taking off, and taxiing 
  7.14  of aircraft; but that portion of the land that contains 
  7.15  facilities for servicing, repair, or maintenance of aircraft is 
  7.16  not included as a landing area; 
  7.17     (ii) the land is part of the airport property; and 
  7.18     (iii) the land is not used for commercial or residential 
  7.19  purposes. 
  7.20  The land contained in a landing area under paragraph (b), clause 
  7.21  (4), must be described and certified by the commissioner of 
  7.22  transportation.  The certification is effective until it is 
  7.23  modified, or until the airport or landing area no longer meets 
  7.24  the requirements of paragraph (b), clause (4).  For purposes of 
  7.25  paragraph (b), clause (4), "public access area" means property 
  7.26  used as an aircraft parking ramp, apron, or storage hangar, or 
  7.27  an arrival and departure building in connection with the airport.
  7.28     Sec. 3.  Minnesota Statutes 1996, section 273.13, 
  7.29  subdivision 24, is amended to read: 
  7.30     Subd. 24.  [CLASS 3.] (a) Commercial and industrial 
  7.31  property and utility real and personal property, except class 5 
  7.32  property as identified in subdivision 31, clause (1), is class 
  7.33  3a.  It has a class rate of three 2.5 percent of the first 
  7.34  $100,000 of market value for taxes payable in 1993 and 
  7.35  thereafter, and 5.06 4.5 percent of the market value over 
  7.36  $100,000.  In the case of state-assessed commercial, industrial, 
  8.1   and utility property owned by one person or entity, only one 
  8.2   parcel has a reduced class rate on the first $100,000 of market 
  8.3   value.  In the case of other commercial, industrial, and utility 
  8.4   property owned by one person or entity, only one parcel in each 
  8.5   county has a reduced class rate on the first $100,000 of market 
  8.6   value, except that: 
  8.7      (1) if the market value of the parcel is less than 
  8.8   $100,000, and additional parcels are owned by the same person or 
  8.9   entity in the same city or town within that county, the reduced 
  8.10  class rate shall be applied up to a combined total market value 
  8.11  of $100,000 for all parcels owned by the same person or entity 
  8.12  in the same city or town within the county; 
  8.13     (2) in the case of grain, fertilizer, and feed elevator 
  8.14  facilities, as defined in section 18C.305, subdivision 1, or 
  8.15  232.21, subdivision 8, the limitation to one parcel per owner 
  8.16  per county for the reduced class rate shall not apply, but there 
  8.17  shall be a limit of $100,000 of preferential value per site of 
  8.18  contiguous parcels owned by the same person or entity.  Only the 
  8.19  value of the elevator portion of each parcel shall qualify for 
  8.20  treatment under this clause.  For purposes of this subdivision, 
  8.21  contiguous parcels include parcels separated only by a railroad 
  8.22  or public road right-of-way; and 
  8.23     (3) in the case of property owned by a nonprofit charitable 
  8.24  organization that qualifies for tax exemption under section 
  8.25  501(c)(3) of the Internal Revenue Code of 1986, as amended 
  8.26  through December 31, 1993, if the property is used as a business 
  8.27  incubator, the limitation to one parcel per owner per county for 
  8.28  the reduced class rate shall not apply, provided that the 
  8.29  reduced rate applies only to the first $100,000 of value per 
  8.30  parcel owned by the organization.  As used in this clause, a 
  8.31  "business incubator" is a facility used for the development of 
  8.32  nonretail businesses, offering access to equipment, space, 
  8.33  services, and advice to the tenant businesses, for the purpose 
  8.34  of encouraging economic development, diversification, and job 
  8.35  creation in the area served by the organization. 
  8.36     To receive the reduced class rate on additional parcels 
  9.1   under clause (1), (2), or (3), the taxpayer must notify the 
  9.2   county assessor that the taxpayer owns more than one parcel that 
  9.3   qualifies under clause (1), (2), or (3). 
  9.4      (b) Employment property defined in section 469.166, during 
  9.5   the period provided in section 469.170, shall constitute class 
  9.6   3b and has a class rate of 2.3 percent of the 
  9.7   first $50,000 $100,000 of market value and 3.6 percent of the 
  9.8   remainder, except that for employment property located in a 
  9.9   border city enterprise zone designated pursuant to section 
  9.10  469.168, subdivision 4, paragraph (c), the class rate of the 
  9.11  first $100,000 of market value and the class rate of the 
  9.12  remainder is determined under paragraph (a), unless the 
  9.13  governing body of the city designated as an enterprise zone 
  9.14  determines that a specific parcel shall be assessed pursuant to 
  9.15  the first clause of this sentence.  The governing body may 
  9.16  provide for assessment under the first clause of the preceding 
  9.17  sentence only for property which is located in an area which has 
  9.18  been designated by the governing body for the receipt of tax 
  9.19  reductions authorized by section 469.171, subdivision 1. 
  9.20     (c) Structures which are (i) located on property classified 
  9.21  as class 3a, (ii) constructed under an initial building permit 
  9.22  issued after January 2, 1996, (iii) located in a transit zone as 
  9.23  defined under section 473.3915, subdivision 3, (iv) located 
  9.24  within the boundaries of a school district, and (v) not 
  9.25  primarily used for retail or transient lodging purposes, shall 
  9.26  have a class rate of four percent on that portion of the market 
  9.27  value in excess of $100,000 and any market value under $100,000 
  9.28  that does not qualify for the three percent class rate under 
  9.29  paragraph (a).  As used in item (v), a structure is primarily 
  9.30  used for retail or transient lodging purposes if over 50 percent 
  9.31  of its square footage is used for those purposes.  The four 
  9.32  percent rate shall also apply to improvements to existing 
  9.33  structures that meet the requirements of items (i) to (v) if the 
  9.34  improvements are constructed under an initial building permit 
  9.35  issued after January 2, 1996, even if the remainder of the 
  9.36  structure was constructed prior to January 2, 1996.  For the 
 10.1   purposes of this paragraph, a structure shall be considered to 
 10.2   be located in a transit zone if any portion of the structure 
 10.3   lies within the zone.  If any property once eligible for 
 10.4   treatment under this paragraph ceases to remain eligible due to 
 10.5   revisions in transit zone boundaries, the property shall 
 10.6   continue to receive treatment under this paragraph for a period 
 10.7   of three years. 
 10.8      Sec. 4.  Minnesota Statutes 1996, section 273.13, 
 10.9   subdivision 25, is amended to read: 
 10.10     Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
 10.11  estate containing four or more units and used or held for use by 
 10.12  the owner or by the tenants or lessees of the owner as a 
 10.13  residence for rental periods of 30 days or more.  Class 4a also 
 10.14  includes hospitals licensed under sections 144.50 to 144.56, 
 10.15  other than hospitals exempt under section 272.02, and contiguous 
 10.16  property used for hospital purposes, without regard to whether 
 10.17  the property has been platted or subdivided.  Class 4a property 
 10.18  in a city with a population of 5,000 or less, that is (1) 
 10.19  located outside of the metropolitan area, as defined in section 
 10.20  473.121, subdivision 2, or outside any county contiguous to the 
 10.21  metropolitan area, and (2) whose city boundary is at least 15 
 10.22  miles from the boundary of any city with a population greater 
 10.23  than 5,000 has a class rate of 2.3 percent of market value for 
 10.24  taxes payable in 1996 and thereafter.  All other class 4a 
 10.25  property has a class rate of 3.4 percent of market value for 
 10.26  taxes payable in 1996 and thereafter.  For purposes of this 
 10.27  paragraph, population has the same meaning given in section 
 10.28  477A.011, subdivision 3. 
 10.29     (b) Class 4b includes: 
 10.30     (1) residential real estate containing less than four 
 10.31  units, other than seasonal residential, and recreational; 
 10.32     (2) manufactured homes not classified under any other 
 10.33  provision; 
 10.34     (3) a dwelling, garage, and surrounding one acre of 
 10.35  property on a nonhomestead farm classified under subdivision 23, 
 10.36  paragraph (b).  
 11.1      Class 4b property has a class rate of 2.8 percent of market 
 11.2   value for taxes payable in 1992, 2.5 percent of market value for 
 11.3   taxes payable in 1993, and 2.3 two percent of market value for 
 11.4   taxes payable in 1994 and thereafter. 
 11.5      (c) Class 4c property includes: 
 11.6      (1) a structure that is:  
 11.7      (i) situated on real property that is used for housing for 
 11.8   the elderly or for low- and moderate-income families as defined 
 11.9   in Title II, as amended through December 31, 1990, of the 
 11.10  National Housing Act or the Minnesota housing finance agency law 
 11.11  of 1971, as amended, or rules promulgated by the agency and 
 11.12  financed by a direct federal loan or federally insured loan made 
 11.13  pursuant to Title II of the Act; or 
 11.14     (ii) situated on real property that is used for housing the 
 11.15  elderly or for low- and moderate-income families as defined by 
 11.16  the Minnesota housing finance agency law of 1971, as amended, or 
 11.17  rules adopted by the agency pursuant thereto and financed by a 
 11.18  loan made by the Minnesota housing finance agency pursuant to 
 11.19  the provisions of the act.  
 11.20     This clause applies only to property of a nonprofit or 
 11.21  limited dividend entity.  Property is classified as class 4c 
 11.22  under this clause for 15 years from the date of the completion 
 11.23  of the original construction or substantial rehabilitation, or 
 11.24  for the original term of the loan.  
 11.25     (2) a structure that is: 
 11.26     (i) situated upon real property that is used for housing 
 11.27  lower income families or elderly or handicapped persons, as 
 11.28  defined in section 8 of the United States Housing Act of 1937, 
 11.29  as amended; and 
 11.30     (ii) owned by an entity which has entered into a housing 
 11.31  assistance payments contract under section 8 which provides 
 11.32  assistance for 100 percent of the dwelling units in the 
 11.33  structure, other than dwelling units intended for management or 
 11.34  maintenance personnel.  Property is classified as class 4c under 
 11.35  this clause for the term of the housing assistance payments 
 11.36  contract, including all renewals, or for the term of its 
 12.1   permanent financing, whichever is shorter; and 
 12.2      (3) a qualified low-income building as defined in section 
 12.3   42(c)(2) of the Internal Revenue Code of 1986, as amended 
 12.4   through December 31, 1990, that (i) receives a low-income 
 12.5   housing credit under section 42 of the Internal Revenue Code of 
 12.6   1986, as amended through December 31, 1990; or (ii) meets the 
 12.7   requirements of that section and receives public financing, 
 12.8   except financing provided under sections 469.174 to 469.179, 
 12.9   which contains terms restricting the rents; or (iii) meets the 
 12.10  requirements of section 273.1317.  Classification pursuant to 
 12.11  this clause is limited to a term of 15 years.  The public 
 12.12  financing received must be from at least one of the following 
 12.13  sources:  government issued bonds exempt from taxes under 
 12.14  section 103 of the Internal Revenue Code of 1986, as amended 
 12.15  through December 31, 1993, the proceeds of which are used for 
 12.16  the acquisition or rehabilitation of the building; programs 
 12.17  under section 221(d)(3), 202, or 236, of Title II of the 
 12.18  National Housing Act; rental housing program funds under Section 
 12.19  8 of the United States Housing Act of 1937 or the market rate 
 12.20  family graduated payment mortgage program funds administered by 
 12.21  the Minnesota housing finance agency that are used for the 
 12.22  acquisition or rehabilitation of the building; public financing 
 12.23  provided by a local government used for the acquisition or 
 12.24  rehabilitation of the building, including grants or loans from 
 12.25  federal community development block grants, HOME block grants, 
 12.26  or residential rental bonds issued under chapter 474A; or other 
 12.27  rental housing program funds provided by the Minnesota housing 
 12.28  finance agency for the acquisition or rehabilitation of the 
 12.29  building. 
 12.30     For all properties described in clauses (1), (2), and (3) 
 12.31  and in paragraph (d), the market value determined by the 
 12.32  assessor must be based on the normal approach to value using 
 12.33  normal unrestricted rents unless the owner of the property 
 12.34  elects to have the property assessed under Laws 1991, chapter 
 12.35  291, article 1, section 55.  If the owner of the property elects 
 12.36  to have the market value determined on the basis of the actual 
 13.1   restricted rents, as provided in Laws 1991, chapter 291, article 
 13.2   1, section 55, the property will be assessed at the rate 
 13.3   provided for class 4a or class 4b property, as appropriate.  
 13.4   Properties described in clauses (1)(ii), (3), and (4) may apply 
 13.5   to the assessor for valuation under Laws 1991, chapter 291, 
 13.6   article 1, section 55.  The land on which these structures are 
 13.7   situated has the class rate given in paragraph (b) if the 
 13.8   structure contains fewer than four units, and the class rate 
 13.9   given in paragraph (a) if the structure contains four or more 
 13.10  units.  This clause applies only to the property of a nonprofit 
 13.11  or limited dividend entity.  
 13.12     (4) a parcel of land, not to exceed one acre, and its 
 13.13  improvements or a parcel of unimproved land, not to exceed one 
 13.14  acre, if it is owned by a neighborhood real estate trust and at 
 13.15  least 60 percent of the dwelling units, if any, on all land 
 13.16  owned by the trust are leased to or occupied by lower income 
 13.17  families or individuals.  This clause does not apply to any 
 13.18  portion of the land or improvements used for nonresidential 
 13.19  purposes.  For purposes of this clause, a lower income family is 
 13.20  a family with an income that does not exceed 65 percent of the 
 13.21  median family income for the area, and a lower income individual 
 13.22  is an individual whose income does not exceed 65 percent of the 
 13.23  median individual income for the area, as determined by the 
 13.24  United States Secretary of Housing and Urban Development.  For 
 13.25  purposes of this clause, "neighborhood real estate trust" means 
 13.26  an entity which is certified by the governing body of the 
 13.27  municipality in which it is located to have the following 
 13.28  characteristics: 
 13.29     (a) it is a nonprofit corporation organized under chapter 
 13.30  317A; 
 13.31     (b) it has as its principal purpose providing housing for 
 13.32  lower income families in a specific geographic community 
 13.33  designated in its articles or bylaws; 
 13.34     (c) it limits membership with voting rights to residents of 
 13.35  the designated community; and 
 13.36     (d) it has a board of directors consisting of at least 
 14.1   seven directors, 60 percent of whom are members with voting 
 14.2   rights and, to the extent feasible, 25 percent of whom are 
 14.3   elected by resident members of buildings owned by the trust; and 
 14.4      (5) except as provided in subdivision 22, paragraph (c), 
 14.5   real property devoted to temporary and seasonal residential 
 14.6   occupancy for recreation purposes, including real property 
 14.7   devoted to temporary and seasonal residential occupancy for 
 14.8   recreation purposes and not devoted to commercial purposes for 
 14.9   more than 250 days in the year preceding the year of 
 14.10  assessment.  For purposes of this clause, property is devoted to 
 14.11  a commercial purpose on a specific day if any portion of the 
 14.12  property is used for residential occupancy, and a fee is charged 
 14.13  for residential occupancy.  Class 4c also includes commercial 
 14.14  use real property used exclusively for recreational purposes in 
 14.15  conjunction with class 4c property devoted to temporary and 
 14.16  seasonal residential occupancy for recreational purposes, up to 
 14.17  a total of two acres, provided the property is not devoted to 
 14.18  commercial recreational use for more than 250 days in the year 
 14.19  preceding the year of assessment and is located within two miles 
 14.20  of the class 4c property with which it is used.  Class 4c 
 14.21  property classified in this clause also includes the remainder 
 14.22  of class 1c resorts.  Owners of real property devoted to 
 14.23  temporary and seasonal residential occupancy for recreation 
 14.24  purposes and all or a portion of which was devoted to commercial 
 14.25  purposes for not more than 250 days in the year preceding the 
 14.26  year of assessment desiring classification as class 1c or 4c, 
 14.27  must submit a declaration to the assessor designating the cabins 
 14.28  or units occupied for 250 days or less in the year preceding the 
 14.29  year of assessment by January 15 of the assessment year.  Those 
 14.30  cabins or units and a proportionate share of the land on which 
 14.31  they are located will be designated class 1c or 4c as otherwise 
 14.32  provided.  The remainder of the cabins or units and a 
 14.33  proportionate share of the land on which they are located will 
 14.34  be designated as class 3a.  The first $100,000 of the market 
 14.35  value of the remainder of the cabins or units and a 
 14.36  proportionate share of the land on which they are located shall 
 15.1   have a class rate of three percent.  The owner of property 
 15.2   desiring designation as class 1c or 4c property must provide 
 15.3   guest registers or other records demonstrating that the units 
 15.4   for which class 1c or 4c designation is sought were not occupied 
 15.5   for more than 250 days in the year preceding the assessment if 
 15.6   so requested.  The portion of a property operated as a (1) 
 15.7   restaurant, (2) bar, (3) gift shop, and (4) other nonresidential 
 15.8   facility operated on a commercial basis not directly related to 
 15.9   temporary and seasonal residential occupancy for recreation 
 15.10  purposes shall not qualify for class 1c or 4c; 
 15.11     (6) real property up to a maximum of one acre of land owned 
 15.12  by a nonprofit community service oriented organization; provided 
 15.13  that the property is not used for a revenue-producing activity 
 15.14  for more than six days in the calendar year preceding the year 
 15.15  of assessment and the property is not used for residential 
 15.16  purposes on either a temporary or permanent basis.  For purposes 
 15.17  of this clause, a "nonprofit community service oriented 
 15.18  organization" means any corporation, society, association, 
 15.19  foundation, or institution organized and operated exclusively 
 15.20  for charitable, religious, fraternal, civic, or educational 
 15.21  purposes, and which is exempt from federal income taxation 
 15.22  pursuant to section 501(c)(3), (10), or (19) of the Internal 
 15.23  Revenue Code of 1986, as amended through December 31, 1990.  For 
 15.24  purposes of this clause, "revenue-producing activities" shall 
 15.25  include but not be limited to property or that portion of the 
 15.26  property that is used as an on-sale intoxicating liquor or 3.2 
 15.27  percent malt liquor establishment licensed under chapter 340A, a 
 15.28  restaurant open to the public, bowling alley, a retail store, 
 15.29  gambling conducted by organizations licensed under chapter 349, 
 15.30  an insurance business, or office or other space leased or rented 
 15.31  to a lessee who conducts a for-profit enterprise on the 
 15.32  premises.  Any portion of the property which is used for 
 15.33  revenue-producing activities for more than six days in the 
 15.34  calendar year preceding the year of assessment shall be assessed 
 15.35  as class 3a.  The use of the property for social events open 
 15.36  exclusively to members and their guests for periods of less than 
 16.1   24 hours, when an admission is not charged nor any revenues are 
 16.2   received by the organization shall not be considered a 
 16.3   revenue-producing activity; 
 16.4      (7) post-secondary student housing of not more than one 
 16.5   acre of land that is owned by a nonprofit corporation organized 
 16.6   under chapter 317A and is used exclusively by a student 
 16.7   cooperative, sorority, or fraternity for on-campus housing or 
 16.8   housing located within two miles of the border of a college 
 16.9   campus; and 
 16.10     (8) manufactured home parks as defined in section 327.14, 
 16.11  subdivision 3. 
 16.12     Class 4c property has a class rate of 2.3 percent of market 
 16.13  value, except that (i) for each parcel of seasonal residential 
 16.14  recreational property not used for commercial purposes under 
 16.15  clause (5) the first $72,000 of market value on each parcel has 
 16.16  a class rate of 1.75 percent for taxes payable in 1997 and 1.5 
 16.17  1.25 percent for taxes payable in 1998 and thereafter, and the 
 16.18  market value of each parcel that exceeds $72,000 has a class 
 16.19  rate of 2.5 percent, and (ii) manufactured home parks assessed 
 16.20  under clause (8) have a class rate of two percent for taxes 
 16.21  payable in 1996, and thereafter.  
 16.22     (d) Class 4d property includes: 
 16.23     (1) a structure that is: 
 16.24     (i) situated on real property that is used for housing for 
 16.25  the elderly or for low and moderate income families as defined 
 16.26  by the Farmers Home Administration; 
 16.27     (ii) located in a municipality of less than 10,000 
 16.28  population; and 
 16.29     (iii) financed by a direct loan or insured loan from the 
 16.30  Farmers Home Administration.  Property is classified under this 
 16.31  clause for 15 years from the date of the completion of the 
 16.32  original construction or for the original term of the loan.  
 16.33     The class rates in paragraph (c), clauses (1), (2), and (3) 
 16.34  and this clause apply to the properties described in them, only 
 16.35  in proportion to occupancy of the structure by elderly or 
 16.36  handicapped persons or low and moderate income families as 
 17.1   defined in the applicable laws unless construction of the 
 17.2   structure had been commenced prior to January 1, 1984; or the 
 17.3   project had been approved by the governing body of the 
 17.4   municipality in which it is located prior to June 30, 1983; or 
 17.5   financing of the project had been approved by a federal or state 
 17.6   agency prior to June 30, 1983.  For those properties, 4c or 4d 
 17.7   classification is available only for those units meeting the 
 17.8   requirements of section 273.1318. 
 17.9      Classification under this clause is only available to 
 17.10  property of a nonprofit or limited dividend entity. 
 17.11     In the case of a structure financed or refinanced under any 
 17.12  federal or state mortgage insurance or direct loan program 
 17.13  exclusively for housing for the elderly or for housing for the 
 17.14  handicapped, a unit shall be considered occupied so long as it 
 17.15  is actually occupied by an elderly or handicapped person or, if 
 17.16  vacant, is held for rental to an elderly or handicapped person. 
 17.17     (2) For taxes payable in 1992, 1993, and 1994, only, 
 17.18  buildings and appurtenances, together with the land upon which 
 17.19  they are located, leased by the occupant under the community 
 17.20  lending model lease-purchase mortgage loan program administered 
 17.21  by the Federal National Mortgage Association, provided the 
 17.22  occupant's income is no greater than 60 percent of the county or 
 17.23  area median income, adjusted for family size and the building 
 17.24  consists of existing single family or duplex housing.  The lease 
 17.25  agreement must provide for a portion of the lease payment to be 
 17.26  escrowed as a nonrefundable down payment on the housing.  To 
 17.27  qualify under this clause, the taxpayer must apply to the county 
 17.28  assessor by May 30 of each year.  The application must be 
 17.29  accompanied by an affidavit or other proof required by the 
 17.30  assessor to determine qualification under this clause. 
 17.31     (3) Qualifying buildings and appurtenances, together with 
 17.32  the land upon which they are located, leased for a period of up 
 17.33  to five years by the occupant under a lease-purchase program 
 17.34  administered by the Minnesota housing finance agency or a 
 17.35  housing and redevelopment authority authorized under sections 
 17.36  469.001 to 469.047, provided the occupant's income is no greater 
 18.1   than 80 percent of the county or area median income, adjusted 
 18.2   for family size, and the building consists of two or less 
 18.3   dwelling units.  The lease agreement must provide for a portion 
 18.4   of the lease payment to be escrowed as a nonrefundable down 
 18.5   payment on the housing.  The administering agency shall verify 
 18.6   the occupants income eligibility and certify to the county 
 18.7   assessor that the occupant meets the income criteria under this 
 18.8   paragraph.  To qualify under this clause, the taxpayer must 
 18.9   apply to the county assessor by May 30 of each year.  For 
 18.10  purposes of this section, "qualifying buildings and 
 18.11  appurtenances" shall be defined as one or two unit residential 
 18.12  buildings which are unoccupied and have been abandoned and 
 18.13  boarded for at least six months. 
 18.14     Class 4d property has a class rate of two percent of market 
 18.15  value except that property classified under clause (3), shall 
 18.16  have the same class rate as class 1a property. 
 18.17     (e) Residential rental property that would otherwise be 
 18.18  assessed as class 4 property under paragraph (a); paragraph (b), 
 18.19  clauses (1) and (3); paragraph (c), clause (1), (2), (3), or 
 18.20  (4), is assessed at the class rate applicable to it under 
 18.21  Minnesota Statutes 1988, section 273.13, if it is found to be a 
 18.22  substandard building under section 273.1316.  Residential rental 
 18.23  property that would otherwise be assessed as class 4 property 
 18.24  under paragraph (d) is assessed at 2.3 percent of market value 
 18.25  if it is found to be a substandard building under section 
 18.26  273.1316. 
 18.27     (f) Class 4e property consists of the residential portion 
 18.28  of any structure located within a city that was converted from 
 18.29  nonresidential use to residential use, provided that: 
 18.30     (1) the structure had formerly been used as a warehouse; 
 18.31     (2) the structure was originally constructed prior to 1940; 
 18.32     (3) the conversion was done after December 31, 1995, but 
 18.33  before January 1, 2003; and 
 18.34     (4) the conversion involved an investment of at least 
 18.35  $25,000 per residential unit. 
 18.36     Class 4e property has a class rate of 2.3 percent, provided 
 19.1   that a structure is eligible for class 4e classification only in 
 19.2   the 12 assessment years immediately following the conversion. 
 19.3      Sec. 5.  Minnesota Statutes 1996, section 273.1398, 
 19.4   subdivision 1a, is amended to read: 
 19.5      Subd. 1a.  [TAX BASE DIFFERENTIAL.] (a) For aids payable in 
 19.6   1997, the tax base differential is 0.25 percent of the 
 19.7   assessment year 1995 taxable market value of class 4c 
 19.8   noncommercial seasonal recreational residential property up to 
 19.9   $72,000.  
 19.10     (b) For aids payable in 1998, the tax base differential is 
 19.11  0.25 percent the sum of the following percentages of the 
 19.12  assessment year 1996 taxable market value of the following 
 19.13  classes of property, excluding that portion of any property's 
 19.14  value which is captured value of a tax increment financing 
 19.15  district as defined in section 469.177, subdivision 2: 
 19.16     (i) 0.5 percent of class 4c 1d noncommercial seasonal 
 19.17  recreational residential property up to $72,000., 
 19.18     (ii) 0.25 percent of class 1a residential homestead 
 19.19  property over $72,000 in value, 
 19.20     (iii) 0.25 percent of the house, garage, and surrounding 
 19.21  acre of land of class 2a agricultural homestead property over 
 19.22  $72,000 in value, 
 19.23     (iv) 0.3 percent of class 1d residential nonhomestead 
 19.24  property, 
 19.25     (v) 0.1 percent of class 2a and 2b agricultural property 
 19.26  which has a class rate of one percent or 1.5 percent for taxes 
 19.27  payable in 1997, 
 19.28     (vi) 0.5 percent of all class 3a 
 19.29  commercial/industrial/public utility property up to $100,000 
 19.30  value which has a class rate of three percent for taxes payable 
 19.31  in 1997, 
 19.32     (vii) 0.1 percent of all class 3a 
 19.33  commercial/industrial/public utility property which has a class 
 19.34  rate of 4.6 percent for taxes payable in 1997, and 
 19.35     (viii) 1.1 percent of all class 3b enterprise zone property 
 19.36  between $50,000 and $100,000 in value. 
 20.1      For properties lying within the area defined in section 
 20.2   473F.02, subdivision 2, the value of properties in clauses (vi) 
 20.3   to (viii) must be reduced by the ratio determined under section 
 20.4   473F.08, subdivision 6.  
 20.5      For properties lying within the area defined in section 
 20.6   276A.01, subdivision 2, the value of properties in clauses (vi) 
 20.7   to (viii) must be reduced by the ratio determined under section 
 20.8   276A.06, subdivision 7. 
 20.9      Sec. 6.  Minnesota Statutes 1996, section 273.1398, is 
 20.10  amended by adding a subdivision to read: 
 20.11     Subd. 2e.  [STATE GENERAL EDUCATION HOMESTEAD AND 
 20.12  AGRICULTURAL CREDIT AID.] Each year, a state general education 
 20.13  homestead and agricultural credit aid adjustment shall be 
 20.14  computed within each school district in the state equal to the 
 20.15  district's current local tax rate for equalized school levies 
 20.16  multiplied by the tax rate differential defined in subdivision 
 20.17  1a.  The sum of the amounts determined for each district shall 
 20.18  be the state general education homestead and agricultural credit 
 20.19  aid adjustment.  The state general education homestead and 
 20.20  agricultural credit aid adjustment for the current year shall be 
 20.21  added to the sum of the adjustment amounts from previous years 
 20.22  to derive total state general education homestead and 
 20.23  agricultural credit aid.  By June 25 of each year, the 
 20.24  commissioner of revenue shall certify to the commissioner of 
 20.25  children, families, and learning the amount of total state 
 20.26  general education homestead and agricultural credit aid for 
 20.27  taxes payable in the following year.  The amount certified shall 
 20.28  be subtracted from the general education levy amount stated in 
 20.29  section 124A.23, subdivision 1, in determining the general 
 20.30  education tax rate. 
 20.31     Sec. 7.  Minnesota Statutes 1996, section 273.1398, 
 20.32  subdivision 8, is amended to read: 
 20.33     Subd. 8.  [APPROPRIATION.] An amount sufficient to pay the 
 20.34  aids and credits provided under this section for the state, 
 20.35  school districts, intermediate school districts, or any group of 
 20.36  school districts levying as a single taxing entity, is annually 
 21.1   appropriated from the general fund to the commissioner of 
 21.2   children, families, and learning.  An amount sufficient to pay 
 21.3   the aids and credits provided under this section for counties, 
 21.4   cities, towns, and special taxing districts is annually 
 21.5   appropriated from the general fund to the commissioner of 
 21.6   revenue.  A jurisdiction's aid amount may be increased or 
 21.7   decreased based on any prior year adjustments for homestead 
 21.8   credit or other property tax credit or aid programs. 
 21.9      Sec. 8.  Minnesota Statutes 1996, section 290A.04, 
 21.10  subdivision 2, is amended to read: 
 21.11     Subd. 2.  [HOMEOWNERS.] A claimant whose property taxes 
 21.12  payable are in excess of the percentage of the household income 
 21.13  stated below shall pay an amount equal to the percent of income 
 21.14  shown for the appropriate household income level along with the 
 21.15  percent to be paid by the claimant of the remaining amount of 
 21.16  property taxes payable.  The state refund equals the amount of 
 21.17  property taxes payable that remain, up to the state refund 
 21.18  amount shown below except that in the case of an agricultural 
 21.19  homestead the state refund shall not exceed $500.  
 21.20                        Percent           Percent    Maximum
 21.21  Household Income     of Income          Paid by     State
 21.22                                          Claimant    Refund
 21.23      $0 to 1,029     1.2 percent        18 percent   $440
 21.24   1,030 to 2,059     1.3 percent        18 percent   $440
 21.25   2,060 to 3,099     1.4 percent        20 percent   $440
 21.26   3,100 to 4,129     1.6 percent        20 percent   $440
 21.27   4,130 to 5,159     1.7 percent        20 percent   $440
 21.28   5,160 to 7,229     1.9 percent        25 percent   $440
 21.29   7,230 to 8,259     2.1 percent        25 percent   $440
 21.30   8,260 to 9,289     2.2 percent        25 percent   $440
 21.31   9,290 to 10,319    2.3 percent        30 percent   $440
 21.32  10,320 to 11,349    2.4 percent        30 percent   $440
 21.33  11,350 to 12,389    2.5 percent        30 percent   $440
 21.34  12,390 to 14,449    2.6 percent        30 percent   $440
 21.35  14,450 to 15,479    2.8 percent        35 percent   $440
 21.36  15,480 to 16,509    3.0 percent        35 percent   $440
 21.37  16,510 to 17,549    3.2 percent        40 percent   $440
 21.38  17,550 to 21,669    3.3 percent        40 percent   $440
 21.39  21,670 to 24,769    3.4 percent        45 percent   $440
 21.40  24,770 to 30,959    3.5 percent        45 percent   $440
 21.41  30,960 to 36,119    3.5 percent        45 percent   $440
 21.42  36,120 to 41,279    3.7 percent        50 percent   $440
 21.43  41,280 to 58,829    4.0 percent        50 percent   $440
 21.44  58,830 to 59,859    4.0 percent        50 percent   $310
 21.45  59,860 to 60,889    4.0 percent        50 percent   $210
 21.46  60,890 to 61,929    4.0 percent        50 percent   $100 
 21.47                        Percent           Percent    Maximum
 21.48  Household Income     of Income          Paid by     State
 21.49                                          Claimant    Refund
 21.50      $0 to 5,619     1.2 percent        18 percent   $1,000
 21.51   5,620 to 7,879     1.5 percent        18 percent   $1,000
 22.1    7,880 to 8,999     1.6 percent        18 percent   $1,000
 22.2    9,000 to 10,119    1.6 percent        18 percent   $1,000
 22.3   10,120 to 11,239    1.8 percent        20 percent   $1,000
 22.4   11,240 to 12,359    1.8 percent        20 percent   $1,000
 22.5   12,360 to 13,499    2.0 percent        20 percent   $1,000
 22.6   13,500 to 15,739    2.0 percent        20 percent   $1,000
 22.7   15,740 to 16,859    2.2 percent        25 percent   $1,000
 22.8   16,860 to 17,979    2.2 percent        25 percent   $1,000
 22.9   17,980 to 19,119    2.4 percent        31 percent   $1,000
 22.10  19,120 to 23,599    2.6 percent        31 percent   $1,000
 22.11  23,600 to 27,624    2.7 percent        37 percent   $1,000
 22.12  27,625 to 31,749    2.8 percent        37 percent   $1,000
 22.13  31,750 to 35,874    2.9 percent        37 percent   $1,000
 22.14  35,875 to 39,999    3.0 percent        37 percent   $1,000
 22.15  40,000 to 44,999    3.1 percent        43 percent   $1,000
 22.16  45,000 to 49,999    3.2 percent        43 percent   $1,000
 22.17  50,000 to 54,999    3.3 percent        46 percent   $1,000
 22.18  55,000 to 59,999    3.4 percent        50 percent   $1,000
 22.19  60,000 to 64,999    3.6 percent        50 percent   $1,000
 22.20  65,000 to 69,999    3.8 percent        50 percent   $1,000
 22.21  70,000 to 76,999    4.0 percent        50 percent   $1,000
 22.22  77,000 to 77,999    4.0 percent        50 percent   $1,000
 22.23  78,000 to 78,999    4.0 percent        50 percent   $  500
 22.24  79,000 to 79,999    4.0 percent        50 percent   $  250 
 22.25     The payment made to a claimant shall be the amount of the 
 22.26  state refund calculated under this subdivision.  No payment is 
 22.27  allowed if the claimant's household income is $61,930 $80,000 or 
 22.28  more. 
 22.29     Sec. 9.  Minnesota Statutes 1996, section 290A.04, 
 22.30  subdivision 6, is amended to read: 
 22.31     Subd. 6.  [INFLATION ADJUSTMENT.] Beginning for property 
 22.32  tax refunds payable in calendar year 1996 1998, the commissioner 
 22.33  shall annually adjust the dollar amounts of the income 
 22.34  thresholds and the maximum refunds under subdivisions 2 and 2a 
 22.35  for inflation.  The commissioner shall make the inflation 
 22.36  adjustments in accordance with section 290.06, subdivision 2d, 
 22.37  except that for purposes of this subdivision the percentage 
 22.38  increase shall be determined from the year ending on August 31, 
 22.39  1994, to the year ending on August 31 of the year preceding that 
 22.40  in which the refund is payable.  The commissioner shall not 
 22.41  adjust the dollar amounts under subdivision 2 for refunds that 
 22.42  are payable in calendar year 1998.  Beginning for refunds 
 22.43  payable in 1999, the base year for adjustments of the dollar 
 22.44  amounts in subdivision 2 is the year ending August 31, 1997.  
 22.45  The commissioner shall use the appropriate percentage increase 
 22.46  to annually adjust the income thresholds and maximum refunds 
 22.47  under subdivisions 2 and 2a for inflation without regard to 
 23.1   whether or not the income tax brackets are adjusted for 
 23.2   inflation in that year.  The commissioner shall round the 
 23.3   thresholds and the maximum amounts, as adjusted to the nearest 
 23.4   $10 amount.  If the amount ends in $5, the commissioner shall 
 23.5   round it up to the next $10 amount.  
 23.6      The commissioner shall annually announce the adjusted 
 23.7   refund schedule at the same time provided under section 290.06.  
 23.8   The determination of the commissioner under this subdivision is 
 23.9   not a rule under the administrative procedure act. 
 23.10     Sec. 10.  Minnesota Statutes 1996, section 477A.03, 
 23.11  subdivision 2, is amended to read: 
 23.12     Subd. 2.  [ANNUAL APPROPRIATION.] A sum sufficient to 
 23.13  discharge the duties imposed by sections 477A.011 to 477A.014 is 
 23.14  annually appropriated from the general fund to the commissioner 
 23.15  of revenue.  For aids payable in 1996 1998 and thereafter, the 
 23.16  total aids paid under sections 477A.013, subdivision 
 23.17  9, 477A.0121 and 477A.0122 are the amounts certified to be paid 
 23.18  in the previous year, adjusted for inflation as provided under 
 23.19  subdivision 3.  Aid payments to counties under section 477A.0121 
 23.20  are limited to $20,265,000 in 1996.  Aid payments to counties 
 23.21  under section 477A.0121 are limited to $27,571,625 in 1997.  For 
 23.22  aid payable in 1998, the total aids paid to cities under section 
 23.23  477A.013, subdivision 9, are limited to the amounts certified to 
 23.24  be paid in 1997, adjusted for inflation as provided in 
 23.25  subdivision 3, plus $25,000,000.  For aid payable in 1998 1999 
 23.26  and thereafter, the total aids paid under section 
 23.27  477A.0121 477A.013, subdivision 9, are the amounts certified to 
 23.28  be paid in the previous year, adjusted for inflation as provided 
 23.29  under subdivision 3. 
 23.30     Sec. 11.  [REPEALER.] 
 23.31     Minnesota Statutes 1996, section 273.13, subdivision 32, is 
 23.32  repealed. 
 23.33     Sec. 12.  [EFFECTIVE DATE.] 
 23.34     Sections 1 to 6 and 11 are effective for taxes payable in 
 23.35  1998 and subsequent years.  Sections 7 and 10 are effective for 
 23.36  aid payable in 1998 and subsequent years.  Sections 8 and 9 are 
 24.1   effective for refund claims filed in 1999 and subsequent years 
 24.2   based on property taxes payable in 1998 and subsequent years. 
 24.3                              ARTICLE 2
 24.4                     SENIOR PROPERTY TAX DEFERRAL
 24.5      Section 1.  Minnesota Statutes 1996, section 270B.12, is 
 24.6   amended by adding a subdivision to read: 
 24.7      Subd. 12.  [PROPERTY TAX DEFERRAL.] The commissioner may 
 24.8   disclose to a county auditor and treasurer, and to their 
 24.9   designated agents or employees, the annual deferral amounts and 
 24.10  the cumulative deferral and interest as determined by the 
 24.11  commissioner under chapter 290B for each parcel of homestead 
 24.12  property in the county that is enrolled in the senior citizens' 
 24.13  property tax deferral program under chapter 290B. 
 24.14     Sec. 2.  Minnesota Statutes 1996, section 275.065, 
 24.15  subdivision 3, is amended to read: 
 24.16     Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
 24.17  county auditor shall prepare and the county treasurer shall 
 24.18  deliver after November 10 and on or before November 24 each 
 24.19  year, by first class mail to each taxpayer at the address listed 
 24.20  on the county's current year's assessment roll, a notice of 
 24.21  proposed property taxes and, in the case of a town, final 
 24.22  property taxes.  
 24.23     (b) The commissioner of revenue shall prescribe the form of 
 24.24  the notice. 
 24.25     (c) The notice must inform taxpayers that it contains the 
 24.26  amount of property taxes each taxing authority other than a town 
 24.27  proposes to collect for taxes payable the following year and, 
 24.28  for a town, the amount of its final levy.  It must clearly state 
 24.29  that each taxing authority, including regional library districts 
 24.30  established under section 134.201, and including the 
 24.31  metropolitan taxing districts as defined in paragraph (i), but 
 24.32  excluding all other special taxing districts and towns, will 
 24.33  hold a public meeting to receive public testimony on the 
 24.34  proposed budget and proposed or final property tax levy, or, in 
 24.35  case of a school district, on the current budget and proposed 
 24.36  property tax levy.  It must clearly state the time and place of 
 25.1   each taxing authority's meeting and an address where comments 
 25.2   will be received by mail.  
 25.3      (d) The notice must state for each parcel: 
 25.4      (1) the market value of the property as determined under 
 25.5   section 273.11, and used for computing property taxes payable in 
 25.6   the following year and for taxes payable in the current year; 
 25.7   and, in the case of residential property, whether the property 
 25.8   is classified as homestead or nonhomestead.  The notice must 
 25.9   clearly inform taxpayers of the years to which the market values 
 25.10  apply and that the values are final values; 
 25.11     (2) by county, city or town, school district excess 
 25.12  referenda levy, remaining school district levy, regional library 
 25.13  district, if in existence, the total of the metropolitan special 
 25.14  taxing districts as defined in paragraph (i) and the sum of the 
 25.15  remaining special taxing districts, and as a total of the taxing 
 25.16  authorities, including all special taxing districts, the 
 25.17  proposed or, for a town, final net tax on the property for taxes 
 25.18  payable the following year and the actual tax for taxes payable 
 25.19  the current year.  If a school district has certified under 
 25.20  section 124A.03, subdivision 2, that a referendum will be held 
 25.21  in the school district at the November general election, the 
 25.22  county auditor must note next to the school district's proposed 
 25.23  amount that a referendum is pending and that, if approved by the 
 25.24  voters, the tax amount may be higher than shown on the notice.  
 25.25  For the purposes of this subdivision, "school district excess 
 25.26  referenda levy" means school district taxes for operating 
 25.27  purposes approved at referendums, including those taxes based on 
 25.28  net tax capacity as well as those based on market value.  
 25.29  "School district excess referenda levy" does not include school 
 25.30  district taxes for capital expenditures approved at referendums 
 25.31  or school district taxes to pay for the debt service on bonds 
 25.32  approved at referenda.  In the case of the city of Minneapolis, 
 25.33  the levy for the Minneapolis library board and the levy for 
 25.34  Minneapolis park and recreation shall be listed separately from 
 25.35  the remaining amount of the city's levy.  In the case of a 
 25.36  parcel where tax increment or the fiscal disparities areawide 
 26.1   tax under chapter 276A or 473F applies, the proposed tax levy on 
 26.2   the captured value or the proposed tax levy on the tax capacity 
 26.3   subject to the areawide tax must each be stated separately and 
 26.4   not included in the sum of the special taxing districts; and 
 26.5      (3) the increase or decrease in the amounts in clause (2) 
 26.6   from taxes payable in the current year to proposed or, for a 
 26.7   town, final taxes payable the following year, expressed as a 
 26.8   dollar amount and as a percentage. 
 26.9      For purposes of this section, the amount of the tax on 
 26.10  homesteads qualifying under the senior citizens' property tax 
 26.11  deferral program under chapter 290B is the total amount of 
 26.12  property tax before subtraction of the deferred property tax 
 26.13  amount. 
 26.14     (e) The notice must clearly state that the proposed or 
 26.15  final taxes do not include the following: 
 26.16     (1) special assessments; 
 26.17     (2) levies approved by the voters after the date the 
 26.18  proposed taxes are certified, including bond referenda, school 
 26.19  district levy referenda, and levy limit increase referenda; 
 26.20     (3) amounts necessary to pay cleanup or other costs due to 
 26.21  a natural disaster occurring after the date the proposed taxes 
 26.22  are certified; 
 26.23     (4) amounts necessary to pay tort judgments against the 
 26.24  taxing authority that become final after the date the proposed 
 26.25  taxes are certified; and 
 26.26     (5) the contamination tax imposed on properties which 
 26.27  received market value reductions for contamination. 
 26.28     (f) Except as provided in subdivision 7, failure of the 
 26.29  county auditor to prepare or the county treasurer to deliver the 
 26.30  notice as required in this section does not invalidate the 
 26.31  proposed or final tax levy or the taxes payable pursuant to the 
 26.32  tax levy. 
 26.33     (g) If the notice the taxpayer receives under this section 
 26.34  lists the property as nonhomestead and the homeowner provides 
 26.35  satisfactory documentation to the county assessor that the 
 26.36  property is owned and used as the owner's homestead, the 
 27.1   assessor shall reclassify the property to homestead for taxes 
 27.2   payable in the following year. 
 27.3      (h) In the case of class 4 residential property used as a 
 27.4   residence for lease or rental periods of 30 days or more, the 
 27.5   taxpayer must either: 
 27.6      (1) mail or deliver a copy of the notice of proposed 
 27.7   property taxes to each tenant, renter, or lessee; or 
 27.8      (2) post a copy of the notice in a conspicuous place on the 
 27.9   premises of the property.  
 27.10     The notice must be mailed or posted by the taxpayer by 
 27.11  November 27 or within three days of receipt of the notice, 
 27.12  whichever is later.  A taxpayer may notify the county treasurer 
 27.13  of the address of the taxpayer, agent, caretaker, or manager of 
 27.14  the premises to which the notice must be mailed in order to 
 27.15  fulfill the requirements of this paragraph. 
 27.16     (i) For purposes of this subdivision, subdivisions 5a and 
 27.17  6, "metropolitan special taxing districts" means the following 
 27.18  taxing districts in the seven-county metropolitan area that levy 
 27.19  a property tax for any of the specified purposes listed below: 
 27.20     (1) metropolitan council under section 473.132, 473.167, 
 27.21  473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 
 27.22     (2) metropolitan airports commission under section 473.667, 
 27.23  473.671, or 473.672; and 
 27.24     (3) metropolitan mosquito control commission under section 
 27.25  473.711. 
 27.26     For purposes of this section, any levies made by the 
 27.27  regional rail authorities in the county of Anoka, Carver, 
 27.28  Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
 27.29  398A shall be included with the appropriate county's levy and 
 27.30  shall be discussed at that county's public hearing. 
 27.31     (j) For taxes levied in 1996, payable in 1997 only, in the 
 27.32  case of a statutory or home rule charter city or town that 
 27.33  exercises the local levy option provided in section 473.388, 
 27.34  subdivision 7, the notice of its proposed taxes may include a 
 27.35  statement of the amount by which its proposed tax increase for 
 27.36  taxes payable in 1997 is attributable to its exercise of that 
 28.1   option, together with a statement that the levy of the 
 28.2   metropolitan council was decreased by a similar amount because 
 28.3   of the exercise of that option. 
 28.4      Sec. 3.  Minnesota Statutes 1996, section 276.04, 
 28.5   subdivision 2, is amended to read: 
 28.6      Subd. 2.  [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 
 28.7   shall provide for the printing of the tax statements.  The 
 28.8   commissioner of revenue shall prescribe the form of the property 
 28.9   tax statement and its contents.  The statement must contain a 
 28.10  tabulated statement of the dollar amount due to each taxing 
 28.11  authority from the parcel of real property for which a 
 28.12  particular tax statement is prepared.  The dollar amounts due 
 28.13  the county, township or municipality, the total of the 
 28.14  metropolitan special taxing districts as defined in section 
 28.15  275.065, subdivision 3, paragraph (i), school district excess 
 28.16  referenda levy, remaining school district levy, and the total of 
 28.17  other voter approved referenda levies based on market value 
 28.18  under section 275.61 must be separately stated.  The amounts due 
 28.19  all other special taxing districts, if any, may be aggregated.  
 28.20  The amount of the tax on homesteads qualifying under the senior 
 28.21  citizens' property tax deferral program under chapter 290B is 
 28.22  the total amount of property tax before subtraction of the 
 28.23  deferred property tax amount.  For the purposes of this 
 28.24  subdivision, "school district excess referenda levy" means 
 28.25  school district taxes for operating purposes approved at 
 28.26  referenda, including those taxes based on net tax capacity as 
 28.27  well as those based on market value.  "School district excess 
 28.28  referenda levy" does not include school district taxes for 
 28.29  capital expenditures approved at referendums or school district 
 28.30  taxes to pay for the debt service on bonds approved at 
 28.31  referenda.  The amount of the tax on contamination value imposed 
 28.32  under sections 270.91 to 270.98, if any, must also be separately 
 28.33  stated.  The dollar amounts, including the dollar amount of any 
 28.34  special assessments, may be rounded to the nearest even whole 
 28.35  dollar.  For purposes of this section whole odd-numbered dollars 
 28.36  may be adjusted to the next higher even-numbered dollar.  The 
 29.1   amount of market value excluded under section 273.11, 
 29.2   subdivision 16, if any, must also be listed on the tax 
 29.3   statement.  The statement shall include the following sentence, 
 29.4   printed in upper case letters in boldface print:  "THE STATE OF 
 29.5   MINNESOTA DOES NOT RECEIVE ANY PROPERTY TAX REVENUES.  THE STATE 
 29.6   OF MINNESOTA REDUCES YOUR PROPERTY TAX BY PAYING CREDITS AND 
 29.7   REIMBURSEMENTS TO LOCAL UNITS OF GOVERNMENT."  
 29.8      (b) The property tax statements for manufactured homes and 
 29.9   sectional structures taxed as personal property shall contain 
 29.10  the same information that is required on the tax statements for 
 29.11  real property.  
 29.12     (c) Real and personal property tax statements must contain 
 29.13  the following information in the order given in this paragraph.  
 29.14  The information must contain the current year tax information in 
 29.15  the right column with the corresponding information for the 
 29.16  previous year in a column on the left: 
 29.17     (1) the property's estimated market value under section 
 29.18  273.11, subdivision 1; 
 29.19     (2) the property's taxable market value after reductions 
 29.20  under section 273.11, subdivisions 1a and 16; 
 29.21     (3) the property's gross tax, calculated by multiplying the 
 29.22  property's gross tax capacity times the total local tax rate and 
 29.23  adding to the result the sum of the aids enumerated in clause 
 29.24  (4); 
 29.25     (4) a total of the following aids: 
 29.26     (i) education aids payable under chapters 124 and 124A; 
 29.27     (ii) local government aids for cities, towns, and counties 
 29.28  under chapter 477A; and 
 29.29     (iii) disparity reduction aid under section 273.1398; 
 29.30     (5) for homestead residential and agricultural properties, 
 29.31  the homestead and agricultural credit aid apportioned to the 
 29.32  property.  This amount is obtained by multiplying the total 
 29.33  local tax rate by the difference between the property's gross 
 29.34  and net tax capacities under section 273.13.  This amount must 
 29.35  be separately stated and identified as "homestead and 
 29.36  agricultural credit."  For purposes of comparison with the 
 30.1   previous year's amount for the statement for taxes payable in 
 30.2   1990, the statement must show the homestead credit for taxes 
 30.3   payable in 1989 under section 273.13, and the agricultural 
 30.4   credit under section 273.132 for taxes payable in 1989; 
 30.5      (6) any credits received under sections 273.119; 273.123; 
 30.6   273.135; 273.1391; 273.1398, subdivision 4; 469.171; and 
 30.7   473H.10, except that the amount of credit received under section 
 30.8   273.135 must be separately stated and identified as "taconite 
 30.9   tax relief"; and 
 30.10     (7) any deferred property tax amount under the senior 
 30.11  citizens' property tax deferral program under chapter 290B, as 
 30.12  well as the total deferred amount plus accrued interest; and 
 30.13     (8) the net tax payable in the manner required in paragraph 
 30.14  (a). 
 30.15     (d) If the county uses envelopes for mailing property tax 
 30.16  statements and if the county agrees, a taxing district may 
 30.17  include a notice with the property tax statement notifying 
 30.18  taxpayers when the taxing district will begin its budget 
 30.19  deliberations for the current year, and encouraging taxpayers to 
 30.20  attend the hearings.  If the county allows notices to be 
 30.21  included in the envelope containing the property tax statement, 
 30.22  and if more than one taxing district relative to a given 
 30.23  property decides to include a notice with the tax statement, the 
 30.24  county treasurer or auditor must coordinate the process and may 
 30.25  combine the information on a single announcement.  
 30.26     The commissioner of revenue shall certify to the county 
 30.27  auditor the actual or estimated aids enumerated in clauses (3) 
 30.28  and (4) that local governments will receive in the following 
 30.29  year.  In the case of a county containing a city of the first 
 30.30  class, for taxes levied in 1991, and for all counties for taxes 
 30.31  levied in 1992 and thereafter, the commissioner must certify 
 30.32  this amount by September 1.  
 30.33     Sec. 4.  [290B.01] [PURPOSE.] 
 30.34     Minnesota's system of ad valorem property taxation does not 
 30.35  adequately recognize the unique financial circumstances of 
 30.36  homestead property owned and occupied by low-income senior 
 31.1   citizens.  It is therefore declared to be in the public interest 
 31.2   of this state to stabilize tax burdens on homestead property 
 31.3   owned by qualifying low-income senior citizens through a 
 31.4   deferral of certain property taxes. 
 31.5      Sec. 5.  [290B.02] [CITATION.] 
 31.6      This program shall be named the "senior citizens' property 
 31.7   tax deferral program." 
 31.8      Sec. 6.  [290B.03] [DEFERRAL OF PROPERTY TAXES.] 
 31.9      Subdivision 1.  [PROGRAM QUALIFICATIONS.] The 
 31.10  qualifications for the senior citizens' property tax deferral 
 31.11  program are as follows: 
 31.12     (1) the property must be owned and occupied as a homestead 
 31.13  by a person 65 years of age or older.  In the case of a married 
 31.14  couple, both of the spouses must be at least 65 years old at the 
 31.15  time the first property tax deferral is granted, regardless of 
 31.16  whether the property is titled in the name of one spouse or both 
 31.17  spouses, or titled in another way that permits the property to 
 31.18  have homestead status; 
 31.19     (2) the total household income of the qualifying 
 31.20  homeowners, as defined in section 290A.03, subdivision 5, for 
 31.21  the calendar year preceding the year of the initial application 
 31.22  may not exceed $30,000; 
 31.23     (3) the homestead must have been owned and occupied as the 
 31.24  homestead of at least one of the qualifying homeowners for at 
 31.25  least 15 years prior to the year the initial application is 
 31.26  filed; 
 31.27     (4) there are no delinquent property taxes, penalties, or 
 31.28  interest on the homesteaded property; 
 31.29     (5) there are no delinquent special assessments on the 
 31.30  homesteaded property; 
 31.31     (6) there are no state or federal tax liens or judgment 
 31.32  liens on the homesteaded property; 
 31.33     (7) there are no mortgages or other liens on the property 
 31.34  that secure future advances, except for those subject to credit 
 31.35  limits that result in compliance with clause (8); and 
 31.36     (8) the total unpaid balances of debts secured by mortgages 
 32.1   and other liens on the property, including unpaid special 
 32.2   assessments, but not including property taxes payable during the 
 32.3   year, does not exceed 30 percent of the assessor's estimated 
 32.4   market value for the year. 
 32.5      Subd. 2.  [QUALIFYING HOMESTEAD; DEFINED.] Qualifying 
 32.6   homestead property is defined as the dwelling occupied as the 
 32.7   homeowner's principal residence and so much of the land 
 32.8   surrounding it, not exceeding one acre, as is reasonably 
 32.9   necessary for use of the dwelling as a home and any other 
 32.10  property used for purposes of a homestead as defined in section 
 32.11  273.13, subdivisions 22 and 23.  The homestead may be part of a 
 32.12  multidwelling building and the land on which it is built. 
 32.13     Sec. 7.  [290B.04] [APPLICATION FOR DEFERRAL.] 
 32.14     Subdivision 1.  [INITIAL APPLICATION.] A taxpayer meeting 
 32.15  the program qualifications under section 290B.03 may apply to 
 32.16  the commissioner of revenue for the deferral of taxes.  
 32.17  Applications are due on or before July 1 for deferral of any of 
 32.18  the following year's property taxes.  A taxpayer may apply in 
 32.19  the year in which the taxpayer becomes 65 years old, provided 
 32.20  that no deferral of property taxes will be made until the 
 32.21  calendar year after the taxpayer becomes 65 years old.  The 
 32.22  application, which shall be prescribed by the commissioner of 
 32.23  revenue, shall include the following items and any other 
 32.24  information which the commissioner deems necessary: 
 32.25     (1) the name, address, and social security number of the 
 32.26  owner or owners; 
 32.27     (2) a copy of the property tax statement for the current 
 32.28  payable year for the homesteaded property; 
 32.29     (3) the initial year of ownership and occupancy as a 
 32.30  homestead; 
 32.31     (4) the owner's household income for the previous calendar 
 32.32  year; and 
 32.33     (5) information on any mortgage loans or other amounts 
 32.34  secured by mortgages or other liens against the property, for 
 32.35  which purpose the commissioner may require the applicant to 
 32.36  provide a copy of the mortgage note, the mortgage, or a 
 33.1   statement of the balance owing on the mortgage loan provided by 
 33.2   the mortgage holder.  The commissioner may require the 
 33.3   appropriate documents in connection with obtaining and 
 33.4   confirming information on unpaid amounts secured by other liens. 
 33.5      The application must state that program participation is 
 33.6   voluntary.  The application must also state that the deferred 
 33.7   amount depends directly on the applicant's household income, and 
 33.8   that program participation includes authorization for the 
 33.9   deferred amount for each year and the cumulative deferral and 
 33.10  interest to appear on each year's property tax statement as 
 33.11  public data. 
 33.12     Subd. 2.  [APPROVAL; RECORDING.] The commissioner shall 
 33.13  approve all initial applications that qualify under this chapter 
 33.14  and shall notify qualifying homeowners on or before December 1.  
 33.15  The commissioner may investigate the facts or require 
 33.16  confirmation in regard to an application.  The commissioner 
 33.17  shall record or file a notice of qualification for deferral, 
 33.18  including the names of the qualifying homeowners and a legal 
 33.19  description of the property, in the office of the county 
 33.20  recorder, or registrar of titles, whichever is applicable, in 
 33.21  the county where the qualifying property is located.  The notice 
 33.22  must state that it serves as a notice of lien and that it 
 33.23  includes deferrals under this section for future years.  The 
 33.24  homeowner shall pay the recording or filing fees. 
 33.25     Subd. 3.  [ANNUAL CERTIFICATION BY TAXPAYER.] Annually on 
 33.26  or before July 1, a taxpayer whose initial application has been 
 33.27  approved under subdivision 2, shall complete the certification 
 33.28  form and return it to the commissioner of revenue.  The 
 33.29  certification must state whether or not the taxpayer wishes to 
 33.30  have property taxes deferred for the following year provided the 
 33.31  taxes exceed the maximum property tax amount under section 
 33.32  290B.05.  If the taxpayer does wish to have property taxes 
 33.33  deferred, the certification must state the homeowner's total 
 33.34  household income for the previous calendar year and any other 
 33.35  information that the commissioner deems necessary.  
 33.36     Sec. 8.  [290B.05] [MAXIMUM PROPERTY TAX AMOUNT AND 
 34.1   DEFERRED PROPERTY TAX AMOUNT.] 
 34.2      Subdivision 1.  [DETERMINATION BY COMMISSIONER.] The 
 34.3   commissioner shall annually determine the qualifying homeowner's 
 34.4   "maximum property tax amount" and "maximum allowable deferral."  
 34.5   The maximum property tax amount calculated for taxes payable in 
 34.6   the following year is equal to five percent of the homeowner's 
 34.7   total household income for the previous calendar year.  No tax 
 34.8   may be deferred for any homeowner whose total household income 
 34.9   for the previous year exceeds $30,000.  No tax shall be deferred 
 34.10  in any year in which the homeowner does not meet the program 
 34.11  qualifications in section 290B.03.  The maximum allowable total 
 34.12  deferral is equal to 75 percent of the assessor's estimated 
 34.13  market value for the year, less (1) the balance of any mortgage 
 34.14  loans and other amounts secured by liens against the property at 
 34.15  the time of application, including any unpaid special 
 34.16  assessments but not including property taxes payable during the 
 34.17  year; and (2) any outstanding deferral and interest.  
 34.18     Subd. 2.  [CERTIFICATION BY COMMISSIONER.] On or before 
 34.19  December 1, the commissioner shall certify to the county auditor 
 34.20  of the county in which the qualifying homestead is located (1) 
 34.21  the maximum property tax amount; (2) the maximum allowable 
 34.22  deferral for the year; and (3) the cumulative deferral and 
 34.23  interest for all years preceding the next taxes payable year. 
 34.24     Subd. 3.  [CALCULATION OF DEFERRED PROPERTY TAX AMOUNT.] 
 34.25  When final property tax amounts for the following year have been 
 34.26  determined, the county auditor shall calculate the "deferred 
 34.27  property tax amount."  The deferred property tax amount is equal 
 34.28  to the lesser of (1) the maximum allowable deferral for the 
 34.29  year; or (2) the difference between the total amount of property 
 34.30  taxes levied upon the qualifying homestead by all taxing 
 34.31  jurisdictions and the maximum property tax amount.  Any special 
 34.32  assessments levied by any local unit of government must not be 
 34.33  included in the total tax used to calculate the deferred tax 
 34.34  amount.  No deferral of the current year's property taxes is 
 34.35  allowed if there are any delinquent property taxes or delinquent 
 34.36  special assessments for any previous year.  Any tax attributable 
 35.1   to new improvements made to the property after the initial 
 35.2   application has been approved under section 290B.04, subdivision 
 35.3   2, must be excluded when determining any subsequent deferred 
 35.4   property tax amount.  The county auditor shall annually, on or 
 35.5   before April 15, certify to the commissioner of revenue the 
 35.6   property tax deferral amounts determined under this subdivision 
 35.7   by property and by owner.  
 35.8      Subd. 4.  [LIMITATION ON TOTAL AMOUNT OF DEFERRED TAXES.] 
 35.9   On or before September 1 of each year, the commissioner shall 
 35.10  request, and each county or city assessor shall provide, the 
 35.11  current year's estimated market value of each property on the 
 35.12  list supplied by the commissioner that may be eligible for 
 35.13  deferral under this section for taxes payable in the following 
 35.14  year.  The total amount of deferred taxes and interest on a 
 35.15  property, when added to (1) the balance owing on any mortgages 
 35.16  on the property at the time of initial application; and (2) 
 35.17  other amounts secured by liens on the property at the time of 
 35.18  the initial application, may not exceed 75 percent of the 
 35.19  assessor's current estimated market value of the property. 
 35.20     Sec. 9.  [290B.06] [PROPERTY TAX REFUNDS.] 
 35.21     For purposes of qualifying for the regular property tax 
 35.22  refund or the special refund for homeowners under chapter 290A, 
 35.23  the qualifying tax is the full amount of taxes, including the 
 35.24  deferred portion of the tax.  In any year in which a program 
 35.25  participant chooses to have property taxes deferred under this 
 35.26  section, any regular or special property tax refund awarded 
 35.27  based upon those property taxes must be taken first as a 
 35.28  deduction from the amount of the deferred tax for that year, and 
 35.29  second, as a deduction against any outstanding deferral from 
 35.30  previous years, rather than as a cash payment to the homeowner.  
 35.31  The commissioner shall cancel any current year's deferral or 
 35.32  previous years' deferral and interest that is offset by the 
 35.33  property tax refunds.  If the total of the regular and the 
 35.34  special property tax refund amounts exceeds the sum of the 
 35.35  deferred tax for the current year and cumulative deferred tax 
 35.36  and interest for previous years, the commissioner shall then 
 36.1   remit the excess amount to the homeowner.  On or before the date 
 36.2   on which the commissioner issues property tax refunds, the 
 36.3   commissioner shall notify program participants of any reduction 
 36.4   in the deferred amount for the current and previous years 
 36.5   resulting from property tax refunds. 
 36.6      Sec. 10.  [290B.07] [LIEN; DEFERRED PORTION.] 
 36.7      Payment by the state to the county treasurer of taxes 
 36.8   deferred under this section is deemed a loan from the state to 
 36.9   the program participant.  The commissioner must compute the 
 36.10  interest as provided in section 270.75, subdivision 5, and 
 36.11  maintain records of the total deferred amount and interest for 
 36.12  each participant.  Interest shall accrue beginning September 1 
 36.13  of the payable year for which the taxes are deferred.  The lien 
 36.14  created under section 272.31 continues to secure payment by the 
 36.15  taxpayer, or by the taxpayer's successors or assigns, of the 
 36.16  amount deferred, including interest, with respect to all years 
 36.17  for which amounts are deferred.  The lien for deferred taxes and 
 36.18  interest has the same priority as any other lien under section 
 36.19  272.31, except that liens, including mortgages, recorded or 
 36.20  filed prior to the recording or filing of the notice under 
 36.21  section 290B.04, subdivision 2, have priority over the lien for 
 36.22  deferred taxes and interest.  A seller's interest in a contract 
 36.23  for deed, in which a qualifying homeowner is the purchaser or an 
 36.24  assignee of the purchaser, has priority over deferred taxes and 
 36.25  interest on deferred taxes, regardless of whether the contract 
 36.26  for deed is recorded or filed.  The lien for deferred taxes and 
 36.27  interest for future years has the same priority as the lien for 
 36.28  deferred taxes and interest for the first year, which is always 
 36.29  higher in priority than any mortgages or other liens filed, 
 36.30  recorded, or created after the notice recorded or filed under 
 36.31  section 290B.04, subdivision 2.  The county treasurer or auditor 
 36.32  shall maintain records of the deferred portion and shall list 
 36.33  the amount of deferred taxes for the year and the cumulative 
 36.34  deferral and interest for all previous years as a lien against 
 36.35  the property on the property tax statement.  In any 
 36.36  certification of unpaid taxes for a tax parcel, the county 
 37.1   auditor shall clearly distinguish between taxes payable in the 
 37.2   current year, deferred taxes and interest, and delinquent 
 37.3   taxes.  Payment of the deferred portion becomes due and owing at 
 37.4   the time specified in section 290B.08.  Upon receipt of the 
 37.5   payment, the commissioner shall issue a receipt for it to the 
 37.6   person making the payment upon request and shall notify the 
 37.7   auditor of the county in which the parcel is located, within ten 
 37.8   days, identifying the parcel to which the payment applies.  Upon 
 37.9   receipt by the commissioner of revenue of collected funds in the 
 37.10  amount of the deferral, the state's loan to the program 
 37.11  participant is deemed paid in full. 
 37.12     Sec. 11.  [290B.08] [TERMINATION OF DEFERRAL; PAYMENT OF 
 37.13  DEFERRED TAXES.] 
 37.14     Subdivision 1.  [TERMINATION.] (a) The deferral of taxes 
 37.15  granted under this chapter terminates when one of the following 
 37.16  occurs: 
 37.17     (1) the property is sold or transferred; 
 37.18     (2) the death of the qualifying homeowner(s); 
 37.19     (3) the homeowner notifies the commissioner in writing that 
 37.20  the homeowner desires to discontinue the deferral; or 
 37.21     (4) the property no longer qualifies as a homestead. 
 37.22     (b) A property is not terminated from the program because 
 37.23  no deferred property tax amount is determined on the homestead 
 37.24  for any given year after the homestead's initial enrollment into 
 37.25  the program. 
 37.26     Subd. 2.  [PAYMENT UPON TERMINATION.] Upon the termination 
 37.27  of the deferral under subdivision 1, the amount of deferred 
 37.28  taxes and interest plus the recording or filing fees under both 
 37.29  section 290B.04, subdivision 2, and this subdivision becomes due 
 37.30  and payable to the commissioner within 90 days of termination of 
 37.31  the deferral.  No additional interest is due on the deferral if 
 37.32  timely paid.  On receipt of payment, the commissioner shall 
 37.33  within ten days notify the auditor of the county in which the 
 37.34  parcel is located, identifying the parcel to which the payment 
 37.35  applies and shall remit the recording or filing fees under 
 37.36  section 290B.04, subdivision 2, and this subdivision to the 
 38.1   auditor.  A notice of termination of deferral, containing the 
 38.2   legal description and the recording or filing data for the 
 38.3   notice of qualification for deferral under section 290B.04, 
 38.4   subdivision 2, shall be prepared and recorded or filed by the 
 38.5   county auditor in the same office in which the notice of 
 38.6   qualification for deferral under section 290B.04, subdivision 2, 
 38.7   was recorded or filed, and the county auditor shall mail a copy 
 38.8   of the notice of termination to the property owner.  The 
 38.9   property owner shall pay the recording or filing fees.  Upon 
 38.10  recording or filing of the notice of termination of deferral, 
 38.11  the notice of qualification for deferral under section 290B.04, 
 38.12  subdivision 2, and the lien created by it are discharged.  If 
 38.13  the deferral is not timely paid, the penalty, interest, lien, 
 38.14  forfeiture, and other rules for the collection of ad valorem 
 38.15  property taxes apply. 
 38.16     Sec. 12.  [290B.09] [STATE REIMBURSEMENT.] 
 38.17     Subdivision 1.  [DETERMINATION; PAYMENT.] The commissioner 
 38.18  of revenue shall determine the deferred amount of property tax 
 38.19  in each county, basing determinations on a review of abstracts 
 38.20  of tax lists submitted by the county auditors under section 
 38.21  275.29.  The commissioner may make changes in the abstracts of 
 38.22  tax lists as deemed necessary.  The commissioner of revenue, 
 38.23  after such review, shall pay the deferred amount of property tax 
 38.24  to each county treasurer on or before August 31.  
 38.25     At least once each year, the commissioner shall report to 
 38.26  the county auditor the total cumulative amount of deferred taxes 
 38.27  and interest that constitute a lien against the property.  
 38.28     The county treasurer shall distribute as part of the 
 38.29  October settlement the funds received as if they had been 
 38.30  collected as a part of the property tax. 
 38.31     Subd. 2.  [APPROPRIATION.] An amount sufficient to pay the 
 38.32  total amount of property tax determined under subdivision 1 is 
 38.33  annually appropriated from the general fund to the commissioner 
 38.34  of revenue. 
 38.35     Sec. 13.  [EFFECTIVE DATE.] 
 38.36     Sections 1 to 12 are effective the day following final 
 39.1   enactment for deferral of property taxes payable in 1998, and 
 39.2   thereafter.