HF 2399

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

  1.1                          A bill for an act 
  1.2             relating to taxation; providing a reduced class rate 
  1.3             for certain property bordering certain public waters; 
  1.4             amending Minnesota Statutes 1998, section 273.13, 
  1.5             subdivision 25. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1998, section 273.13, 
  1.8   subdivision 25, is amended to read: 
  1.9      Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
  1.10  estate containing four or more units and used or held for use by 
  1.11  the owner or by the tenants or lessees of the owner as a 
  1.12  residence for rental periods of 30 days or more.  Class 4a also 
  1.13  includes hospitals licensed under sections 144.50 to 144.56, 
  1.14  other than hospitals exempt under section 272.02, and contiguous 
  1.15  property used for hospital purposes, without regard to whether 
  1.16  the property has been platted or subdivided.  Class 4a property 
  1.17  in a city with a population of 5,000 or less, that is (1) 
  1.18  located outside of the metropolitan area, as defined in section 
  1.19  473.121, subdivision 2, or outside any county contiguous to the 
  1.20  metropolitan area, and (2) whose city boundary is at least 15 
  1.21  miles from the boundary of any city with a population greater 
  1.22  than 5,000 has a class rate of 2.15 percent of market value.  
  1.23  All other class 4a property has a class rate of 2.5 percent of 
  1.24  market value.  For purposes of this paragraph, population has 
  1.25  the same meaning given in section 477A.011, subdivision 3. 
  2.1      (b) Class 4b includes: 
  2.2      (1) residential real estate containing less than four units 
  2.3   that does not qualify as class 4bb, other than seasonal 
  2.4   residential, and recreational; 
  2.5      (2) manufactured homes not classified under any other 
  2.6   provision; 
  2.7      (3) a dwelling, garage, and surrounding one acre of 
  2.8   property on a nonhomestead farm classified under subdivision 23, 
  2.9   paragraph (b) containing two or three units; 
  2.10     (4) unimproved property that is classified residential as 
  2.11  determined under subdivision 33.  
  2.12     Class 4b property has a class rate of 1.7 percent of market 
  2.13  value.  
  2.14     (c) Class 4bb includes: 
  2.15     (1) nonhomestead residential real estate containing one 
  2.16  unit, other than seasonal residential, and recreational; and 
  2.17     (2) a single family dwelling, garage, and surrounding one 
  2.18  acre of property on a nonhomestead farm classified under 
  2.19  subdivision 23, paragraph (b). 
  2.20     Class 4bb has a class rate of 1.25 percent on the first 
  2.21  $75,000 of market value and a class rate of 1.7 percent of its 
  2.22  market value that exceeds $75,000. 
  2.23     Property that has been classified as seasonal recreational 
  2.24  residential property at any time during which it has been owned 
  2.25  by the current owner or spouse of the current owner does not 
  2.26  qualify for class 4bb. 
  2.27     (d) Class 4c property includes: 
  2.28     (1) except as provided in subdivision 22, paragraph (c), 
  2.29  real property devoted to temporary and seasonal residential 
  2.30  occupancy for recreation purposes, including real property 
  2.31  devoted to temporary and seasonal residential occupancy for 
  2.32  recreation purposes and not devoted to commercial purposes for 
  2.33  more than 250 days in the year preceding the year of 
  2.34  assessment.  For purposes of this clause, property is devoted to 
  2.35  a commercial purpose on a specific day if any portion of the 
  2.36  property is used for residential occupancy, and a fee is charged 
  3.1   for residential occupancy.  In order for a property to be 
  3.2   classified as class 4c, seasonal recreational residential for 
  3.3   commercial purposes, at least 40 percent of the annual gross 
  3.4   lodging receipts related to the property must be from business 
  3.5   conducted during 90 consecutive days and either (i) at least 60 
  3.6   percent of all paid bookings by lodging guests during the year 
  3.7   must be for periods of at least two consecutive nights; or (ii) 
  3.8   at least 20 percent of the annual gross receipts must be from 
  3.9   charges for rental of fish houses, boats and motors, 
  3.10  snowmobiles, downhill or cross-country ski equipment, or charges 
  3.11  for marina services, launch services, and guide services, or the 
  3.12  sale of bait and fishing tackle.  For purposes of this 
  3.13  determination, a paid booking of five or more nights shall be 
  3.14  counted as two bookings.  Class 4c also includes commercial use 
  3.15  real property used exclusively for recreational purposes in 
  3.16  conjunction with class 4c property devoted to temporary and 
  3.17  seasonal residential occupancy for recreational purposes, up to 
  3.18  a total of two acres, provided the property is not devoted to 
  3.19  commercial recreational use for more than 250 days in the year 
  3.20  preceding the year of assessment and is located within two miles 
  3.21  of the class 4c property with which it is used.  Class 4c 
  3.22  property classified in this clause also includes the remainder 
  3.23  of class 1c resorts provided that the entire property including 
  3.24  that portion of the property classified as class 1c also meets 
  3.25  the requirements for class 4c under this clause; otherwise the 
  3.26  entire property is classified as class 3.  Owners of real 
  3.27  property devoted to temporary and seasonal residential occupancy 
  3.28  for recreation purposes and all or a portion of which was 
  3.29  devoted to commercial purposes for not more than 250 days in the 
  3.30  year preceding the year of assessment desiring classification as 
  3.31  class 1c or 4c, must submit a declaration to the assessor 
  3.32  designating the cabins or units occupied for 250 days or less in 
  3.33  the year preceding the year of assessment by January 15 of the 
  3.34  assessment year.  Those cabins or units and a proportionate 
  3.35  share of the land on which they are located will be designated 
  3.36  class 1c or 4c as otherwise provided.  The remainder of the 
  4.1   cabins or units and a proportionate share of the land on which 
  4.2   they are located will be designated as class 3a.  The owner of 
  4.3   property desiring designation as class 1c or 4c property must 
  4.4   provide guest registers or other records demonstrating that the 
  4.5   units for which class 1c or 4c designation is sought were not 
  4.6   occupied for more than 250 days in the year preceding the 
  4.7   assessment if so requested.  The portion of a property operated 
  4.8   as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 
  4.9   nonresidential facility operated on a commercial basis not 
  4.10  directly related to temporary and seasonal residential occupancy 
  4.11  for recreation purposes shall not qualify for class 1c or 4c; 
  4.12     (2) qualified property used as a golf course if: 
  4.13     (i) it is open to the public on a daily fee basis.  It may 
  4.14  charge membership fees or dues, but a membership fee may not be 
  4.15  required in order to use the property for golfing, and its green 
  4.16  fees for golfing must be comparable to green fees typically 
  4.17  charged by municipal courses; and 
  4.18     (ii) it meets the requirements of section 273.112, 
  4.19  subdivision 3, paragraph (d). 
  4.20     A structure used as a clubhouse, restaurant, or place of 
  4.21  refreshment in conjunction with the golf course is classified as 
  4.22  class 3a property. 
  4.23     (3) real property up to a maximum of one acre of land owned 
  4.24  by a nonprofit community service oriented organization; provided 
  4.25  that the property is not used for a revenue-producing activity 
  4.26  for more than six days in the calendar year preceding the year 
  4.27  of assessment and the property is not used for residential 
  4.28  purposes on either a temporary or permanent basis.  For purposes 
  4.29  of this clause, a "nonprofit community service oriented 
  4.30  organization" means any corporation, society, association, 
  4.31  foundation, or institution organized and operated exclusively 
  4.32  for charitable, religious, fraternal, civic, or educational 
  4.33  purposes, and which is exempt from federal income taxation 
  4.34  pursuant to section 501(c)(3), (10), or (19) of the Internal 
  4.35  Revenue Code of 1986, as amended through December 31, 1990.  For 
  4.36  purposes of this clause, "revenue-producing activities" shall 
  5.1   include but not be limited to property or that portion of the 
  5.2   property that is used as an on-sale intoxicating liquor or 3.2 
  5.3   percent malt liquor establishment licensed under chapter 340A, a 
  5.4   restaurant open to the public, bowling alley, a retail store, 
  5.5   gambling conducted by organizations licensed under chapter 349, 
  5.6   an insurance business, or office or other space leased or rented 
  5.7   to a lessee who conducts a for-profit enterprise on the 
  5.8   premises.  Any portion of the property which is used for 
  5.9   revenue-producing activities for more than six days in the 
  5.10  calendar year preceding the year of assessment shall be assessed 
  5.11  as class 3a.  The use of the property for social events open 
  5.12  exclusively to members and their guests for periods of less than 
  5.13  24 hours, when an admission is not charged nor any revenues are 
  5.14  received by the organization shall not be considered a 
  5.15  revenue-producing activity; 
  5.16     (4) post-secondary student housing of not more than one 
  5.17  acre of land that is owned by a nonprofit corporation organized 
  5.18  under chapter 317A and is used exclusively by a student 
  5.19  cooperative, sorority, or fraternity for on-campus housing or 
  5.20  housing located within two miles of the border of a college 
  5.21  campus; 
  5.22     (5) manufactured home parks as defined in section 327.14, 
  5.23  subdivision 3; and 
  5.24     (6) real property that is actively and exclusively devoted 
  5.25  to indoor fitness, health, social, recreational, and related 
  5.26  uses, is owned and operated by a not-for-profit corporation, and 
  5.27  is located within the metropolitan area as defined in section 
  5.28  473.121, subdivision 2. 
  5.29     Class 4c property has a class rate of 1.8 percent of market 
  5.30  value, except that (i) for each parcel of seasonal residential 
  5.31  recreational property not used for commercial purposes the first 
  5.32  $75,000 of market value has a class rate of 1.25 percent, and 
  5.33  the market value that exceeds $75,000 has a class rate of 2.2 
  5.34  percent, (ii) manufactured home parks assessed under clause (5) 
  5.35  have a class rate of two percent, and (iii) property described 
  5.36  in paragraph (d), clause (4), has the same class rate as the 
  6.1   rate applicable to the first tier of class 4bb nonhomestead 
  6.2   residential real estate under paragraph (c).  
  6.3      (e) Class 4d property is qualifying low-income rental 
  6.4   housing certified to the assessor by the housing finance agency 
  6.5   under sections 273.126 and 462A.071.  Class 4d includes land in 
  6.6   proportion to the total market value of the building that is 
  6.7   qualifying low-income rental housing.  For all properties 
  6.8   qualifying as class 4d, the market value determined by the 
  6.9   assessor must be based on the normal approach to value using 
  6.10  normal unrestricted rents. 
  6.11     Class 4d property has a class rate of one percent of market 
  6.12  value.  
  6.13     (f) Class 4e property consists of the residential portion 
  6.14  of any structure located within a city that was converted from 
  6.15  nonresidential use to residential use, provided that: 
  6.16     (1) the structure had formerly been used as a warehouse; 
  6.17     (2) the structure was originally constructed prior to 1940; 
  6.18     (3) the conversion was done after December 31, 1995, but 
  6.19  before January 1, 2003; and 
  6.20     (4) the conversion involved an investment of at least 
  6.21  $25,000 per residential unit. 
  6.22     Class 4e property has a class rate of 2.3 percent, provided 
  6.23  that a structure is eligible for class 4e classification only in 
  6.24  the 12 assessment years immediately following the conversion. 
  6.25     (g) Class 4f property consists of any parcel or contiguous 
  6.26  parcels of unimproved real estate, excluding agricultural land 
  6.27  classified under subdivision 23 that meets the requirements in 
  6.28  clauses (1) to (4): 
  6.29     (1) the property consists of at least 200 contiguous feet 
  6.30  of unimproved real estate that borders meandered lakes as 
  6.31  contained in section 103G.005, subdivision 15, clause (3); 
  6.32     (2) the unimproved real estate is located within 400 feet 
  6.33  from the ordinary high water elevation of the public waters; 
  6.34     (3) the owner files an application with the county assessor 
  6.35  by July 1 for classification under this paragraph for the 
  6.36  subsequent assessment year; and 
  7.1      (4) the owner of the property signs a covenant agreement 
  7.2   and files the covenant with the county assessor in the county 
  7.3   where the property is located.  The covenant agreement must 
  7.4   include all of the following: 
  7.5      (i) legal description of the area to which the covenant 
  7.6   applies; 
  7.7      (ii) name and address of the owner; 
  7.8      (iii) a statement that the land described in the covenant 
  7.9   must be kept as undeveloped land for the duration of the 
  7.10  covenant; 
  7.11     (iv) a statement that the landowner may initiate expiration 
  7.12  of the covenant agreement by notifying the county assessor, in 
  7.13  writing, with the date of expiration which must be at least ten 
  7.14  years from the date of the expiration notice; 
  7.15     (v) a statement that the covenant is binding on the owner 
  7.16  or owner's successor or assignee and runs with the land; and 
  7.17     (vi) a witnessed signature of the owner covenanting to keep 
  7.18  the land in its undeveloped state as it existed on the date the 
  7.19  covenant was signed. 
  7.20     Upon expiration of a covenant agreement in clause (4), the 
  7.21  property which is sold is subject to additional taxes.  The 
  7.22  amount of additional taxes due on the property equals the 
  7.23  difference between the taxes actually levied and the taxes that 
  7.24  would have been imposed if the property had been valued and 
  7.25  classified if class 4f did not apply.  The additional taxes must 
  7.26  be extended against the property on the tax list for the current 
  7.27  year.  No interest or penalties may be levied on the additional 
  7.28  taxes if timely paid, and the additional taxes must be levied 
  7.29  only with respect to the last ten years that the property was 
  7.30  valued and assessed as class 4f property. 
  7.31     The tax imposed under this paragraph is a lien on the 
  7.32  property assessed to the same extent and for the same duration 
  7.33  as other real property taxes.  The tax must be extended by the 
  7.34  county auditor and, when payable, be collected and distributed 
  7.35  in the same manner provided by law for the collection and 
  7.36  distribution of other property taxes. 
  8.1      Class 4f has a class rate of 1.0 percent of market value. 
  8.2      Sec. 2.  [EFFECTIVE DATE.] 
  8.3      Section 1 is effective for the 2000 assessment and 
  8.4   thereafter, for taxes payable in 2001 and thereafter.