HF 2374

as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxes; increasing the market value 
  1.3             eligibility and age requirement of certain houses for 
  1.4             the "this old house" program; increasing the minimum 
  1.5             improvement eligible for exclusion; making other 
  1.6             miscellaneous changes; amending Minnesota Statutes 
  1.7             1998, section 273.11, subdivision 16. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 1998, section 273.11, 
  1.10  subdivision 16, is amended to read: 
  1.11     Subd. 16.  [VALUATION EXCLUSION FOR CERTAIN IMPROVEMENTS.] 
  1.12  Improvements to homestead property made before January 2, 2003, 
  1.13  shall be fully or partially excluded from the value of the 
  1.14  property for assessment purposes provided that (1) the house is 
  1.15  at least 35 50 years old at the time of the improvement and (2) 
  1.16  either 
  1.17     (a) the assessor's estimated market value of the house on 
  1.18  January 2 of the current year is equal to or less than $150,000, 
  1.19  or $300,000. 
  1.20     (b) if the estimated market value of the house is over 
  1.21  $150,000 market value but is less than $300,000 on January 2 of 
  1.22  the current year, the property qualifies if 
  1.23     (i) it is located in a city or town in which 50 percent or 
  1.24  more of the owner-occupied housing units were constructed before 
  1.25  1960 based upon the 1990 federal census, and 
  1.26     (ii) the city or town's median family income based upon the 
  2.1   1990 federal census is less than the statewide median family 
  2.2   income based upon the 1990 federal census, or 
  2.3      (c) if the estimated market value of the house is $300,000 
  2.4   or more on January 2 of the current year, the property qualifies 
  2.5   if 
  2.6      (i) it is located in a city or town in which 45 percent or 
  2.7   more of the homes were constructed before 1940 based upon the 
  2.8   1990 federal census, and 
  2.9      (ii) it is located in a city or town in which 45 percent or 
  2.10  more of the housing units were rental based upon the 1990 
  2.11  federal census, and 
  2.12     (iii) the city or town's median value of owner-occupied 
  2.13  housing units based upon the 1990 federal census is less than 
  2.14  the statewide median value of owner-occupied housing units based 
  2.15  upon the 1990 federal census. 
  2.16     For purposes of determining this eligibility, "house" means 
  2.17  land and buildings.  
  2.18     The age of a residence is the number of years since the 
  2.19  original year of its construction.  In the case of a residence 
  2.20  that is relocated, the relocation must be from a location within 
  2.21  the state and the only improvements eligible for exclusion under 
  2.22  this subdivision are (1) those for which building permits were 
  2.23  issued to the homeowner after the residence was relocated to its 
  2.24  present site, and (2) those undertaken during or after the year 
  2.25  the residence is initially occupied by the homeowner, excluding 
  2.26  any market value increase relating to basic improvements that 
  2.27  are necessary to install the residence on its foundation and 
  2.28  connect it to utilities at its present site.  In the case of an 
  2.29  owner-occupied duplex or triplex, the improvement is eligible 
  2.30  regardless of which portion of the property was improved. 
  2.31     If the property lies in a jurisdiction which is subject to 
  2.32  a building permit process, a building permit must have been 
  2.33  issued prior to commencement of the improvement.  Any 
  2.34  improvement The improvements for a single project or in any one 
  2.35  year must add at least $1,000 $5,000 to the value of the 
  2.36  property to be eligible for exclusion under this subdivision.  
  3.1   Only improvements to the structure which is the residence of the 
  3.2   qualifying homesteader or construction of or improvements to no 
  3.3   more than one two-car garage per residence qualify for the 
  3.4   provisions of this subdivision.  If an improvement was begun 
  3.5   between January 2, 1992, and January 2, 1993, any value added 
  3.6   from that improvement for the January 1994 and subsequent 
  3.7   assessments shall qualify for exclusion under this subdivision 
  3.8   provided that a building permit was obtained for the improvement 
  3.9   between January 2, 1992, and January 2, 1993.  Whenever a 
  3.10  building permit is issued for property currently classified as 
  3.11  homestead, the issuing jurisdiction shall notify the property 
  3.12  owner of the possibility of valuation exclusion under this 
  3.13  subdivision.  The assessor shall require an application, 
  3.14  including documentation of the age of the house from the owner, 
  3.15  if unknown by the assessor.  The application may be filed 
  3.16  subsequent to the date of the building permit provided that the 
  3.17  application must be filed within three years of the date the 
  3.18  building permit was issued for the improvement.  If the property 
  3.19  lies in a jurisdiction which is not subject to a building permit 
  3.20  process, the application must be filed within three years of the 
  3.21  date the improvement was made.  The assessor may require proof 
  3.22  from the taxpayer of the date the improvement was made.  
  3.23  Applications must be received prior to July 1 of any year in 
  3.24  order to be effective for taxes payable in the following year. 
  3.25     No exclusion for an improvement may be granted for an 
  3.26  improvement by a local board of review or county board of 
  3.27  equalization, and no abatement of the taxes for qualifying 
  3.28  improvements may be granted by the county board unless (1) a 
  3.29  building permit was issued prior to the commencement of the 
  3.30  improvement if the jurisdiction requires a building permit, and 
  3.31  (2) an application was completed. 
  3.32     The assessor shall note the qualifying value of each 
  3.33  improvement on the property's record, and the sum of those 
  3.34  amounts shall be subtracted from the value of the property in 
  3.35  each year for ten years after the improvement has been made, at 
  3.36  which time an amount equal to 20 percent of the qualifying value 
  4.1   shall be added back in each of the five subsequent assessment 
  4.2   years.  After ten years the amount of the qualifying value shall 
  4.3   be added back as follows: 
  4.4      (1) 50 percent in the two subsequent years if the 
  4.5   qualifying value is equal to or less than $10,000 market value; 
  4.6   or 
  4.7      (2) 20 percent in the five subsequent assessment years if 
  4.8   the qualifying value is greater than $10,000 market value. 
  4.9   If an application is filed after the first assessment date at 
  4.10  which an improvement could have been subject to the valuation 
  4.11  exclusion under this subdivision, the ten-year period during 
  4.12  which the value is subject to exclusion is reduced by the number 
  4.13  of years that have elapsed since the property would have 
  4.14  qualified initially.  The valuation exclusion shall terminate 
  4.15  whenever (1) the property is sold, or (2) the property is 
  4.16  reclassified to a class which does not qualify for treatment 
  4.17  under this subdivision.  Improvements made by an occupant who is 
  4.18  the purchaser of the property under a conditional purchase 
  4.19  contract do not qualify under this subdivision unless the seller 
  4.20  of the property is a governmental entity.  The qualifying value 
  4.21  of the property shall be computed based upon the increase from 
  4.22  that structure's market value as of January 2 preceding the 
  4.23  acquisition of the property by the governmental entity. 
  4.24     The total qualifying value for a homestead may not exceed 
  4.25  $50,000.  The total qualifying value for a homestead with a 
  4.26  house that is less than 70 75 years old may not exceed $25,000.  
  4.27  The term "qualifying value" means the increase in estimated 
  4.28  market value resulting from the improvement if the improvement 
  4.29  occurs when the house is at least 70 75 years old, or one-half 
  4.30  of the increase in estimated market value resulting from the 
  4.31  improvement otherwise.  The $25,000 and $50,000 maximum 
  4.32  qualifying value under this subdivision may result from up to 
  4.33  three separate multiple improvements to the homestead.  The 
  4.34  application shall state, in clear language, that If more than 
  4.35  three improvements are made to the qualifying property, a 
  4.36  taxpayer may choose which three improvements are eligible, 
  5.1   provided that after the taxpayer has made the choice and any 
  5.2   valuation attributable to those improvements has been excluded 
  5.3   from taxation, no further changes can be made by the taxpayer. 
  5.4      If 50 percent or more of the square footage of a structure 
  5.5   is voluntarily razed or removed, the valuation increase 
  5.6   attributable to any subsequent improvements to the remaining 
  5.7   structure does not qualify for the exclusion under this 
  5.8   subdivision.  If a structure is unintentionally or accidentally 
  5.9   destroyed by a natural disaster, the property is eligible for an 
  5.10  exclusion under this subdivision provided that the structure was 
  5.11  not completely destroyed.  The qualifying value on property 
  5.12  destroyed by a natural disaster shall be computed based upon the 
  5.13  increase from that structure's market value as determined on 
  5.14  January 2 of the year in which the disaster occurred.  A 
  5.15  property receiving benefits under the homestead disaster 
  5.16  provisions under section 273.123 is not disqualified from 
  5.17  receiving an exclusion under this subdivision.  If any 
  5.18  combination of improvements made to a structure after January 1, 
  5.19  1993, increases the size of the structure by 100 percent or 
  5.20  more, the valuation increase attributable to the portion of the 
  5.21  improvement that causes the structure's size to exceed 100 
  5.22  percent does not qualify for exclusion under this subdivision. 
  5.23     Sec. 2.  [EFFECTIVE DATE.] 
  5.24     Section 1 is effective for improvements made on or after 
  5.25  January 1, 2000.