HF 2930

as introduced - 87th Legislature (2011 - 2012) Posted on 03/19/2012 12:55pm

A bill for an act
relating to property taxation; allowing homestead resort classification for
property adjacent to a state trail; amending Minnesota Statutes 2011 Supplement,
section 273.13, subdivision 22.

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

Section 1.

Minnesota Statutes 2011 Supplement, section 273.13, subdivision 22,
is amended to read:

Subd. 22.

Class 1.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2013 and
thereafter.
new text end