HF 3821

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; reducing individual income tax 
  1.3             rates; reducing the general education levy; reducing 
  1.4             property tax class rates; providing a property tax 
  1.5             rebate; appropriating money; amending Minnesota 
  1.6             Statutes 1996, sections 290.06, subdivisions 2c and 
  1.7             2d; and 290.091, subdivisions 1 and 2; Minnesota 
  1.8             Statutes 1997 Supplement, sections 273.127, 
  1.9             subdivision 3; 273.13, subdivisions 22, 23, 24, 25, as 
  1.10            amended, and 31; 273.1382, subdivision 1; and 290.091, 
  1.11            subdivision 6. 
  1.12  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.13     Section 1.  Minnesota Statutes 1997 Supplement, section 
  1.14  273.127, subdivision 3, is amended to read: 
  1.15     Subd. 3.  [CLASS 4C PROPERTIES.] For the market value of 
  1.16  properties that meet the criteria of subdivision 2, paragraph 
  1.17  (a), and which no longer qualify as a result of the eligibility 
  1.18  criteria specified in section 273.126, a class rate of 2.4 
  1.19  percent applies for taxes payable in 1999 and a class rate of 
  1.20  2.6 2.5 percent applies for taxes payable in 2000. 
  1.21     Sec. 2.  Minnesota Statutes 1997 Supplement, section 
  1.22  273.13, subdivision 22, is amended to read: 
  1.23     Subd. 22.  [CLASS 1.] (a) Except as provided in subdivision 
  1.24  23, real estate which is residential and used for homestead 
  1.25  purposes is class 1.  The market value of class 1a property must 
  1.26  be determined based upon the value of the house, garage, and 
  1.27  land.  
  1.28     For taxes payable in 1998 and thereafter, The first $75,000 
  2.1   of market value of class 1a property has a net class rate of one 
  2.2   percent of its market value; and the market value of class 1a 
  2.3   property that exceeds $75,000 has a class rate of 1.85 1.70 
  2.4   percent of its market value.  
  2.5      (b) Class 1b property includes homestead real estate or 
  2.6   homestead manufactured homes used for the purposes of a 
  2.7   homestead by 
  2.8      (1) any blind person, or the blind person and the blind 
  2.9   person's spouse; or 
  2.10     (2) any person, hereinafter referred to as "veteran," who: 
  2.11     (i) served in the active military or naval service of the 
  2.12  United States; and 
  2.13     (ii) is entitled to compensation under the laws and 
  2.14  regulations of the United States for permanent and total 
  2.15  service-connected disability due to the loss, or loss of use, by 
  2.16  reason of amputation, ankylosis, progressive muscular 
  2.17  dystrophies, or paralysis, of both lower extremities, such as to 
  2.18  preclude motion without the aid of braces, crutches, canes, or a 
  2.19  wheelchair; and 
  2.20     (iii) has acquired a special housing unit with special 
  2.21  fixtures or movable facilities made necessary by the nature of 
  2.22  the veteran's disability, or the surviving spouse of the 
  2.23  deceased veteran for as long as the surviving spouse retains the 
  2.24  special housing unit as a homestead; or 
  2.25     (3) any person who: 
  2.26     (i) is permanently and totally disabled and 
  2.27     (ii) receives 90 percent or more of total income from 
  2.28     (A) aid from any state as a result of that disability; or 
  2.29     (B) supplemental security income for the disabled; or 
  2.30     (C) workers' compensation based on a finding of total and 
  2.31  permanent disability; or 
  2.32     (D) social security disability, including the amount of a 
  2.33  disability insurance benefit which is converted to an old age 
  2.34  insurance benefit and any subsequent cost of living increases; 
  2.35  or 
  2.36     (E) aid under the federal Railroad Retirement Act of 1937, 
  3.1   United States Code Annotated, title 45, section 228b(a)5; or 
  3.2      (F) a pension from any local government retirement fund 
  3.3   located in the state of Minnesota as a result of that 
  3.4   disability; or 
  3.5      (G) pension, annuity, or other income paid as a result of 
  3.6   that disability from a private pension or disability plan, 
  3.7   including employer, employee, union, and insurance plans and 
  3.8      (iii) has household income as defined in section 290A.03, 
  3.9   subdivision 5, of $50,000 or less; or 
  3.10     (4) any person who is permanently and totally disabled and 
  3.11  whose household income as defined in section 290A.03, 
  3.12  subdivision 5, is 275 percent or less of the federal poverty 
  3.13  level. 
  3.14     Property is classified and assessed under clause (4) only 
  3.15  if the government agency or income-providing source certifies, 
  3.16  upon the request of the homestead occupant, that the homestead 
  3.17  occupant satisfies the disability requirements of this paragraph.
  3.18     Property is classified and assessed pursuant to clause (1) 
  3.19  only if the commissioner of economic security certifies to the 
  3.20  assessor that the homestead occupant satisfies the requirements 
  3.21  of this paragraph.  
  3.22     Permanently and totally disabled for the purpose of this 
  3.23  subdivision means a condition which is permanent in nature and 
  3.24  totally incapacitates the person from working at an occupation 
  3.25  which brings the person an income.  The first $32,000 market 
  3.26  value of class 1b property has a net class rate of .45 percent 
  3.27  of its market value.  The remaining market value of class 1b 
  3.28  property has a net class rate using the rates for class 1 or 
  3.29  class 2a property, whichever is appropriate, of similar market 
  3.30  value.  
  3.31     (c) Class 1c property is commercial use real property that 
  3.32  abuts a lakeshore line and is devoted to temporary and seasonal 
  3.33  residential occupancy for recreational purposes but not devoted 
  3.34  to commercial purposes for more than 250 days in the year 
  3.35  preceding the year of assessment, and that includes a portion 
  3.36  used as a homestead by the owner, which includes a dwelling 
  4.1   occupied as a homestead by a shareholder of a corporation that 
  4.2   owns the resort or a partner in a partnership that owns the 
  4.3   resort, even if the title to the homestead is held by the 
  4.4   corporation or partnership.  For purposes of this clause, 
  4.5   property is devoted to a commercial purpose on a specific day if 
  4.6   any portion of the property, excluding the portion used 
  4.7   exclusively as a homestead, is used for residential occupancy 
  4.8   and a fee is charged for residential occupancy.  In order for a 
  4.9   property to be classified as class 1c, at least 40 percent of 
  4.10  the annual gross lodging receipts related to the property must 
  4.11  be from business conducted between Memorial Day weekend and 
  4.12  Labor Day weekend, and at least 60 percent of all bookings by 
  4.13  lodging guests during the year must be for periods of at least 
  4.14  two consecutive nights.  Class 1c property has a class rate of 
  4.15  one percent of total market value with the following 
  4.16  limitation:  the area of the property must not exceed 100 feet 
  4.17  of lakeshore footage for each cabin or campsite located on the 
  4.18  property up to a total of 800 feet and 500 feet in depth, 
  4.19  measured away from the lakeshore.  
  4.20     (d) Class 1d property includes structures that meet all of 
  4.21  the following criteria: 
  4.22     (1) the structure is located on property that is classified 
  4.23  as agricultural property under section 273.13, subdivision 23; 
  4.24     (2) the structure is occupied exclusively by seasonal farm 
  4.25  workers during the time when they work on that farm, and the 
  4.26  occupants are not charged rent for the privilege of occupying 
  4.27  the property, provided that use of the structure for storage of 
  4.28  farm equipment and produce does not disqualify the property from 
  4.29  classification under this paragraph; 
  4.30     (3) the structure meets all applicable health and safety 
  4.31  requirements for the appropriate season; and 
  4.32     (4) the structure is not saleable as residential property 
  4.33  because it does not comply with local ordinances relating to 
  4.34  location in relation to streets or roads. 
  4.35     The market value of class 1d property has the same class 
  4.36  rates as class 1a property under paragraph (a). 
  5.1      Sec. 3.  Minnesota Statutes 1997 Supplement, section 
  5.2   273.13, subdivision 23, is amended to read: 
  5.3      Subd. 23.  [CLASS 2.] (a) Class 2a property is agricultural 
  5.4   land including any improvements that is homesteaded.  The market 
  5.5   value of the house and garage and immediately surrounding one 
  5.6   acre of land has the same class rates as class 1a property under 
  5.7   subdivision 22.  The value of the remaining land including 
  5.8   improvements up to $115,000 has a net class rate of 0.4 .35 
  5.9   percent of market value.  The remaining value of class 2a 
  5.10  property over $115,000 of market value that does not exceed 320 
  5.11  acres has a net class rate of 0.9 .8 percent of market value.  
  5.12  The remaining property over the $115,000 market value in excess 
  5.13  of 320 acres has a class rate of 1.4 1.3 percent of market value.
  5.14     (b) Class 2b property is (1) real estate, rural in 
  5.15  character and used exclusively for growing trees for timber, 
  5.16  lumber, and wood and wood products; (2) real estate that is not 
  5.17  improved with a structure and is used exclusively for growing 
  5.18  trees for timber, lumber, and wood and wood products, if the 
  5.19  owner has participated or is participating in a cost-sharing 
  5.20  program for afforestation, reforestation, or timber stand 
  5.21  improvement on that particular property, administered or 
  5.22  coordinated by the commissioner of natural resources; (3) real 
  5.23  estate that is nonhomestead agricultural land; or (4) a landing 
  5.24  area or public access area of a privately owned public use 
  5.25  airport.  Class 2b property has a net class rate of 1.4 1.3 
  5.26  percent of market value. 
  5.27     (c) Agricultural land as used in this section means 
  5.28  contiguous acreage of ten acres or more, used during the 
  5.29  preceding year for agricultural purposes.  "Agricultural 
  5.30  purposes" as used in this section means the raising or 
  5.31  cultivation of agricultural products or enrollment in the 
  5.32  Reinvest in Minnesota program under sections 103F.501 to 
  5.33  103F.535 or the federal Conservation Reserve Program as 
  5.34  contained in Public Law Number 99-198.  Contiguous acreage on 
  5.35  the same parcel, or contiguous acreage on an immediately 
  5.36  adjacent parcel under the same ownership, may also qualify as 
  6.1   agricultural land, but only if it is pasture, timber, waste, 
  6.2   unusable wild land, or land included in state or federal farm 
  6.3   programs.  Agricultural classification for property shall be 
  6.4   determined excluding the house, garage, and immediately 
  6.5   surrounding one acre of land, and shall not be based upon the 
  6.6   market value of any residential structures on the parcel or 
  6.7   contiguous parcels under the same ownership. 
  6.8      (d) Real estate, excluding the house, garage, and 
  6.9   immediately surrounding one acre of land, of less than ten acres 
  6.10  which is exclusively and intensively used for raising or 
  6.11  cultivating agricultural products, shall be considered as 
  6.12  agricultural land.  
  6.13     Land shall be classified as agricultural even if all or a 
  6.14  portion of the agricultural use of that property is the leasing 
  6.15  to, or use by another person for agricultural purposes. 
  6.16     Classification under this subdivision is not determinative 
  6.17  for qualifying under section 273.111. 
  6.18     The property classification under this section supersedes, 
  6.19  for property tax purposes only, any locally administered 
  6.20  agricultural policies or land use restrictions that define 
  6.21  minimum or maximum farm acreage. 
  6.22     (e) The term "agricultural products" as used in this 
  6.23  subdivision includes production for sale of:  
  6.24     (1) livestock, dairy animals, dairy products, poultry and 
  6.25  poultry products, fur-bearing animals, horticultural and nursery 
  6.26  stock described in sections 18.44 to 18.61, fruit of all kinds, 
  6.27  vegetables, forage, grains, bees, and apiary products by the 
  6.28  owner; 
  6.29     (2) fish bred for sale and consumption if the fish breeding 
  6.30  occurs on land zoned for agricultural use; 
  6.31     (3) the commercial boarding of horses if the boarding is 
  6.32  done in conjunction with raising or cultivating agricultural 
  6.33  products as defined in clause (1); 
  6.34     (4) property which is owned and operated by nonprofit 
  6.35  organizations used for equestrian activities, excluding racing; 
  6.36  and 
  7.1      (5) game birds and waterfowl bred and raised for use on a 
  7.2   shooting preserve licensed under section 97A.115.  
  7.3      (f) If a parcel used for agricultural purposes is also used 
  7.4   for commercial or industrial purposes, including but not limited 
  7.5   to:  
  7.6      (1) wholesale and retail sales; 
  7.7      (2) processing of raw agricultural products or other goods; 
  7.8      (3) warehousing or storage of processed goods; and 
  7.9      (4) office facilities for the support of the activities 
  7.10  enumerated in clauses (1), (2), and (3), 
  7.11  the assessor shall classify the part of the parcel used for 
  7.12  agricultural purposes as class 1b, 2a, or 2b, whichever is 
  7.13  appropriate, and the remainder in the class appropriate to its 
  7.14  use.  The grading, sorting, and packaging of raw agricultural 
  7.15  products for first sale is considered an agricultural purpose.  
  7.16  A greenhouse or other building where horticultural or nursery 
  7.17  products are grown that is also used for the conduct of retail 
  7.18  sales must be classified as agricultural if it is primarily used 
  7.19  for the growing of horticultural or nursery products from seed, 
  7.20  cuttings, or roots and occasionally as a showroom for the retail 
  7.21  sale of those products.  Use of a greenhouse or building only 
  7.22  for the display of already grown horticultural or nursery 
  7.23  products does not qualify as an agricultural purpose.  
  7.24     The assessor shall determine and list separately on the 
  7.25  records the market value of the homestead dwelling and the one 
  7.26  acre of land on which that dwelling is located.  If any farm 
  7.27  buildings or structures are located on this homesteaded acre of 
  7.28  land, their market value shall not be included in this separate 
  7.29  determination.  
  7.30     (g) To qualify for classification under paragraph (b), 
  7.31  clause (4), a privately owned public use airport must be 
  7.32  licensed as a public airport under section 360.018.  For 
  7.33  purposes of paragraph (b), clause (4), "landing area" means that 
  7.34  part of a privately owned public use airport properly cleared, 
  7.35  regularly maintained, and made available to the public for use 
  7.36  by aircraft and includes runways, taxiways, aprons, and sites 
  8.1   upon which are situated landing or navigational aids.  A landing 
  8.2   area also includes land underlying both the primary surface and 
  8.3   the approach surfaces that comply with all of the following:  
  8.4      (i) the land is properly cleared and regularly maintained 
  8.5   for the primary purposes of the landing, taking off, and taxiing 
  8.6   of aircraft; but that portion of the land that contains 
  8.7   facilities for servicing, repair, or maintenance of aircraft is 
  8.8   not included as a landing area; 
  8.9      (ii) the land is part of the airport property; and 
  8.10     (iii) the land is not used for commercial or residential 
  8.11  purposes. 
  8.12  The land contained in a landing area under paragraph (b), clause 
  8.13  (4), must be described and certified by the commissioner of 
  8.14  transportation.  The certification is effective until it is 
  8.15  modified, or until the airport or landing area no longer meets 
  8.16  the requirements of paragraph (b), clause (4).  For purposes of 
  8.17  paragraph (b), clause (4), "public access area" means property 
  8.18  used as an aircraft parking ramp, apron, or storage hangar, or 
  8.19  an arrival and departure building in connection with the airport.
  8.20     Sec. 4.  Minnesota Statutes 1997 Supplement, section 
  8.21  273.13, subdivision 24, is amended to read: 
  8.22     Subd. 24.  [CLASS 3.] (a) Commercial and industrial 
  8.23  property and utility real and personal property, except class 5 
  8.24  property as identified in subdivision 31, clause (1), is class 
  8.25  3a.  Each parcel has a class rate of 2.7 2.5 percent of the 
  8.26  first tier of market value, and 4.0 3.5 percent of the remaining 
  8.27  market value, except that in the case of contiguous parcels of 
  8.28  commercial and industrial property owned by the same person or 
  8.29  entity, only the value equal to the first-tier value of the 
  8.30  contiguous parcels qualifies for the reduced class rate.  For 
  8.31  the purposes of this subdivision, the first tier means the first 
  8.32  $150,000 of market value.  In the case of utility property owned 
  8.33  by one person or entity, only one parcel in each county has a 
  8.34  reduced class rate on the first tier of market value. 
  8.35     For purposes of this paragraph, parcels are considered to 
  8.36  be contiguous even if they are separated from each other by a 
  9.1   road, street, vacant lot, waterway, or other similar intervening 
  9.2   type of property. 
  9.3      (b) Employment property defined in section 469.166, during 
  9.4   the period provided in section 469.170, shall constitute class 
  9.5   3b and has a class rate of 2.3 percent of the first $50,000 of 
  9.6   market value and 3.6 3.5 percent of the remainder, except that 
  9.7   for employment property located in a border city enterprise zone 
  9.8   designated pursuant to section 469.168, subdivision 4, paragraph 
  9.9   (c), the class rate of the first tier of market value and the 
  9.10  class rate of the remainder is determined under paragraph (a), 
  9.11  unless the governing body of the city designated as an 
  9.12  enterprise zone determines that a specific parcel shall be 
  9.13  assessed pursuant to the first clause of this sentence.  The 
  9.14  governing body may provide for assessment under the first clause 
  9.15  of the preceding sentence only for property which is located in 
  9.16  an area which has been designated by the governing body for the 
  9.17  receipt of tax reductions authorized by section 469.171, 
  9.18  subdivision 1. 
  9.19     (c) Structures which are (i) located on property classified 
  9.20  as class 3a, (ii) constructed under an initial building permit 
  9.21  issued after January 2, 1996, (iii) located in a transit zone as 
  9.22  defined under section 473.3915, subdivision 3, (iv) located 
  9.23  within the boundaries of a school district, and (v) not 
  9.24  primarily used for retail or transient lodging purposes, shall 
  9.25  have a class rate equal to 85 percent of the class rate of the 
  9.26  second tier of the commercial property rate under paragraph (a) 
  9.27  on any portion of the market value that does not qualify for the 
  9.28  first tier class rate under paragraph (a).  As used in item (v), 
  9.29  a structure is primarily used for retail or transient lodging 
  9.30  purposes if over 50 percent of its square footage is used for 
  9.31  those purposes.  The four percent rate A class rate equal to 85 
  9.32  percent of the class rate of the second tier of the commercial 
  9.33  property tax rate under paragraph (a) shall also apply to 
  9.34  improvements to existing structures that meet the requirements 
  9.35  of items (i) to (v) if the improvements are constructed under an 
  9.36  initial building permit issued after January 2, 1996, even if 
 10.1   the remainder of the structure was constructed prior to January 
 10.2   2, 1996.  For the purposes of this paragraph, a structure shall 
 10.3   be considered to be located in a transit zone if any portion of 
 10.4   the structure lies within the zone.  If any property once 
 10.5   eligible for treatment under this paragraph ceases to remain 
 10.6   eligible due to revisions in transit zone boundaries, the 
 10.7   property shall continue to receive treatment under this 
 10.8   paragraph for a period of three years. 
 10.9      Sec. 5.  Minnesota Statutes 1997 Supplement, section 
 10.10  273.13, subdivision 25, as amended by Laws 1997, Third Special 
 10.11  Session chapter 3, section 28, is amended to read: 
 10.12     Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
 10.13  estate containing four or more units and used or held for use by 
 10.14  the owner or by the tenants or lessees of the owner as a 
 10.15  residence for rental periods of 30 days or more.  Class 4a also 
 10.16  includes hospitals licensed under sections 144.50 to 144.56, 
 10.17  other than hospitals exempt under section 272.02, and contiguous 
 10.18  property used for hospital purposes, without regard to whether 
 10.19  the property has been platted or subdivided.  Class 4a property 
 10.20  in a city with a population of 5,000 or less, that is (1) 
 10.21  located outside of the metropolitan area, as defined in section 
 10.22  473.121, subdivision 2, or outside any county contiguous to the 
 10.23  metropolitan area, and (2) whose city boundary is at least 15 
 10.24  miles from the boundary of any city with a population greater 
 10.25  than 5,000 has a class rate of 2.3 2.15 percent of market value. 
 10.26  All other class 4a property has a class rate of 2.9 2.5 percent 
 10.27  of market value.  For purposes of this paragraph, population has 
 10.28  the same meaning given in section 477A.011, subdivision 3. 
 10.29     (b) Class 4b includes: 
 10.30     (1) residential real estate containing less than four units 
 10.31  that does not qualify as class 4bb, other than seasonal 
 10.32  residential, and recreational; 
 10.33     (2) manufactured homes not classified under any other 
 10.34  provision; 
 10.35     (3) a dwelling, garage, and surrounding one acre of 
 10.36  property on a nonhomestead farm classified under subdivision 23, 
 11.1   paragraph (b) containing two or three units; 
 11.2      (4) unimproved property that is classified residential as 
 11.3   determined under section 273.13, subdivision 33.  
 11.4      Class 4b property has a class rate of 2.1 1.7 percent of 
 11.5   market value.  
 11.6      (c) Class 4bb includes: 
 11.7      (1) nonhomestead residential real estate containing one 
 11.8   unit, other than seasonal residential, and recreational; and 
 11.9      (2) a single family dwelling, garage, and surrounding one 
 11.10  acre of property on a nonhomestead farm classified under 
 11.11  subdivision 23, paragraph (b). 
 11.12     Class 4bb has a class rate of 1.9 1.25 percent on the first 
 11.13  $75,000 of market value and a class rate of 2.1 1.7 percent of 
 11.14  its market value that exceeds $75,000. 
 11.15     Property that has been classified as seasonal recreational 
 11.16  residential property at any time during which it has been owned 
 11.17  by the current owner or spouse of the current owner does not 
 11.18  qualify for class 4bb. 
 11.19     (d) Class 4c property includes: 
 11.20     (1) except as provided in subdivision 22, paragraph (c), 
 11.21  real property devoted to temporary and seasonal residential 
 11.22  occupancy for recreation purposes, including real property 
 11.23  devoted to temporary and seasonal residential occupancy for 
 11.24  recreation purposes and not devoted to commercial purposes for 
 11.25  more than 250 days in the year preceding the year of 
 11.26  assessment.  For purposes of this clause, property is devoted to 
 11.27  a commercial purpose on a specific day if any portion of the 
 11.28  property is used for residential occupancy, and a fee is charged 
 11.29  for residential occupancy.  In order for a property to be 
 11.30  classified as class 4c, seasonal recreational residential for 
 11.31  commercial purposes, at least 40 percent of the annual gross 
 11.32  lodging receipts related to the property must be from business 
 11.33  conducted between Memorial Day weekend and Labor Day weekend and 
 11.34  at least 60 percent of all bookings by lodging guests during the 
 11.35  year must be for periods of at least two consecutive nights.  
 11.36  Class 4c also includes commercial use real property used 
 12.1   exclusively for recreational purposes in conjunction with class 
 12.2   4c property devoted to temporary and seasonal residential 
 12.3   occupancy for recreational purposes, up to a total of two acres, 
 12.4   provided the property is not devoted to commercial recreational 
 12.5   use for more than 250 days in the year preceding the year of 
 12.6   assessment and is located within two miles of the class 4c 
 12.7   property with which it is used.  Class 4c property classified in 
 12.8   this clause also includes the remainder of class 1c resorts.  
 12.9   Owners of real property devoted to temporary and seasonal 
 12.10  residential occupancy for recreation purposes and all or a 
 12.11  portion of which was devoted to commercial purposes for not more 
 12.12  than 250 days in the year preceding the year of assessment 
 12.13  desiring classification as class 1c or 4c, must submit a 
 12.14  declaration to the assessor designating the cabins or units 
 12.15  occupied for 250 days or less in the year preceding the year of 
 12.16  assessment by January 15 of the assessment year.  Those cabins 
 12.17  or units and a proportionate share of the land on which they are 
 12.18  located will be designated class 1c or 4c as otherwise 
 12.19  provided.  The remainder of the cabins or units and a 
 12.20  proportionate share of the land on which they are located will 
 12.21  be designated as class 3a.  The owner of property desiring 
 12.22  designation as class 1c or 4c property must provide guest 
 12.23  registers or other records demonstrating that the units for 
 12.24  which class 1c or 4c designation is sought were not occupied for 
 12.25  more than 250 days in the year preceding the assessment if so 
 12.26  requested.  The portion of a property operated as a (1) 
 12.27  restaurant, (2) bar, (3) gift shop, and (4) other nonresidential 
 12.28  facility operated on a commercial basis not directly related to 
 12.29  temporary and seasonal residential occupancy for recreation 
 12.30  purposes shall not qualify for class 1c or 4c; 
 12.31     (2) qualified property used as a golf course if: 
 12.32     (i) any portion of the property is located within a county 
 12.33  that has a population of less than 50,000, or within a county 
 12.34  containing a golf course owned by a municipality, the county, or 
 12.35  a special taxing district; 
 12.36     (ii) it is open to the public on a daily fee basis.  It may 
 13.1   charge membership fees or dues, but a membership fee may not be 
 13.2   required in order to use the property for golfing, and its green 
 13.3   fees for golfing must be comparable to green fees typically 
 13.4   charged by municipal courses; and 
 13.5      (iii) it meets the requirements of section 273.112, 
 13.6   subdivision 3, paragraph (d). 
 13.7      A structure used as a clubhouse, restaurant, or place of 
 13.8   refreshment in conjunction with the golf course is classified as 
 13.9   class 3a property. 
 13.10     (3) real property up to a maximum of one acre of land owned 
 13.11  by a nonprofit community service oriented organization; provided 
 13.12  that the property is not used for a revenue-producing activity 
 13.13  for more than six days in the calendar year preceding the year 
 13.14  of assessment and the property is not used for residential 
 13.15  purposes on either a temporary or permanent basis.  For purposes 
 13.16  of this clause, a "nonprofit community service oriented 
 13.17  organization" means any corporation, society, association, 
 13.18  foundation, or institution organized and operated exclusively 
 13.19  for charitable, religious, fraternal, civic, or educational 
 13.20  purposes, and which is exempt from federal income taxation 
 13.21  pursuant to section 501(c)(3), (10), or (19) of the Internal 
 13.22  Revenue Code of 1986, as amended through December 31, 1990.  For 
 13.23  purposes of this clause, "revenue-producing activities" shall 
 13.24  include but not be limited to property or that portion of the 
 13.25  property that is used as an on-sale intoxicating liquor or 3.2 
 13.26  percent malt liquor establishment licensed under chapter 340A, a 
 13.27  restaurant open to the public, bowling alley, a retail store, 
 13.28  gambling conducted by organizations licensed under chapter 349, 
 13.29  an insurance business, or office or other space leased or rented 
 13.30  to a lessee who conducts a for-profit enterprise on the 
 13.31  premises.  Any portion of the property which is used for 
 13.32  revenue-producing activities for more than six days in the 
 13.33  calendar year preceding the year of assessment shall be assessed 
 13.34  as class 3a.  The use of the property for social events open 
 13.35  exclusively to members and their guests for periods of less than 
 13.36  24 hours, when an admission is not charged nor any revenues are 
 14.1   received by the organization shall not be considered a 
 14.2   revenue-producing activity; 
 14.3      (4) post-secondary student housing of not more than one 
 14.4   acre of land that is owned by a nonprofit corporation organized 
 14.5   under chapter 317A and is used exclusively by a student 
 14.6   cooperative, sorority, or fraternity for on-campus housing or 
 14.7   housing located within two miles of the border of a college 
 14.8   campus; and 
 14.9      (5) manufactured home parks as defined in section 327.14, 
 14.10  subdivision 3. 
 14.11     Class 4c property has a class rate of 2.1 percent of market 
 14.12  value, except that (i) for each parcel of seasonal residential 
 14.13  recreational property not used for commercial purposes the first 
 14.14  $75,000 of market value has a class rate of 1.4 1.3 percent, and 
 14.15  the market value that exceeds $75,000 has a class rate of 2.5 
 14.16  2.3 percent, and (ii) manufactured home parks assessed under 
 14.17  clause (5) have a class rate of two percent.  
 14.18     (e) Class 4d property is qualifying low-income rental 
 14.19  housing certified to the assessor by the housing finance agency 
 14.20  under sections 273.126 and 462A.071.  Class 4d includes land in 
 14.21  proportion to the total market value of the building that is 
 14.22  qualifying low-income rental housing.  For all properties 
 14.23  qualifying as class 4d, the market value determined by the 
 14.24  assessor must be based on the normal approach to value using 
 14.25  normal unrestricted rents. 
 14.26     Class 4d property has a class rate of one percent of market 
 14.27  value.  
 14.28     (f) Class 4e property consists of the residential portion 
 14.29  of any structure located within a city that was converted from 
 14.30  nonresidential use to residential use, provided that: 
 14.31     (1) the structure had formerly been used as a warehouse; 
 14.32     (2) the structure was originally constructed prior to 1940; 
 14.33     (3) the conversion was done after December 31, 1995, but 
 14.34  before January 1, 2003; and 
 14.35     (4) the conversion involved an investment of at least 
 14.36  $25,000 per residential unit. 
 15.1      Class 4e property has a class rate of 2.3 percent, provided 
 15.2   that a structure is eligible for class 4e classification only in 
 15.3   the 12 assessment years immediately following the conversion. 
 15.4      Sec. 6.  Minnesota Statutes 1997 Supplement, section 
 15.5   273.13, subdivision 31, is amended to read: 
 15.6      Subd. 31.  [CLASS 5.] Class 5 property includes:  
 15.7      (1) tools, implements, and machinery of an electric 
 15.8   generating, transmission, or distribution system or a pipeline 
 15.9   system transporting or distributing water, gas, crude oil, or 
 15.10  petroleum products or mains and pipes used in the distribution 
 15.11  of steam or hot or chilled water for heating or cooling 
 15.12  buildings, which are fixtures; 
 15.13     (2) unmined iron ore and low-grade iron-bearing formations 
 15.14  as defined in section 273.14; and 
 15.15     (3) all other property not otherwise classified. 
 15.16     Class 5 property has a class rate of 4.0 3.5 percent of 
 15.17  market value for taxes payable in 1998 and thereafter. 
 15.18     Sec. 7.  Minnesota Statutes 1997 Supplement, section 
 15.19  273.1382, subdivision 1, is amended to read: 
 15.20     Subdivision 1.  [EDUCATION HOMESTEAD CREDIT.] Each year, 
 15.21  beginning with property taxes payable in 1998, the respective 
 15.22  county auditors shall determine the initial tax rate for each 
 15.23  school district for the general education levy certified under 
 15.24  section 124A.23, subdivision 2 or 3.  That rate plus the school 
 15.25  district's education homestead credit tax rate adjustment under 
 15.26  section 275.08, subdivision 1e, shall be the general education 
 15.27  homestead credit local tax rate for the district.  The auditor 
 15.28  shall then determine a general education homestead credit for 
 15.29  each homestead within the county equal to 32 48 percent of the 
 15.30  general education homestead credit local tax rate times the net 
 15.31  tax capacity of the homestead for the taxes payable year.  The 
 15.32  amount of general education homestead credit for a homestead may 
 15.33  not exceed $225 $400.  In the case of an agricultural homestead, 
 15.34  only the net tax capacity of the house, garage, and surrounding 
 15.35  one acre of land shall be used in determining the property's 
 15.36  education homestead credit. 
 16.1      Sec. 8.  Minnesota Statutes 1996, section 290.06, 
 16.2   subdivision 2c, is amended to read: 
 16.3      Subd. 2c.  [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 
 16.4   AND TRUSTS.] (a) The income taxes imposed by this chapter upon 
 16.5   married individuals filing joint returns and surviving spouses 
 16.6   as defined in section 2(a) of the Internal Revenue Code must be 
 16.7   computed by applying to their taxable net income the following 
 16.8   schedule of rates: 
 16.9      (1) On the first $19,910 $24,800, 6 5.5 percent; 
 16.10     (2) On all over $19,910 $24,800, but not 
 16.11  over $79,120 $98,540, 8 7.5 percent; 
 16.12     (3) On all over $79,120 $98,540, 8.5 8 percent. 
 16.13     Married individuals filing separate returns, estates, and 
 16.14  trusts must compute their income tax by applying the above rates 
 16.15  to their taxable income, except that the income brackets will be 
 16.16  one-half of the above amounts.  
 16.17     (b) The income taxes imposed by this chapter upon unmarried 
 16.18  individuals must be computed by applying to taxable net income 
 16.19  the following schedule of rates: 
 16.20     (1) On the first $13,620 $16,960, 6 5.5 percent; 
 16.21     (2) On all over $13,620 $16,960, but not 
 16.22  over $44,750 $55,730, 8 7.5 percent; 
 16.23     (3) On all over $44,750 $55,730, 8.5 8 percent. 
 16.24     (c) The income taxes imposed by this chapter upon unmarried 
 16.25  individuals qualifying as a head of household as defined in 
 16.26  section 2(b) of the Internal Revenue Code must be computed by 
 16.27  applying to taxable net income the following schedule of rates: 
 16.28     (1) On the first $16,770 $20,890, 6 5.5 percent; 
 16.29     (2) On all over $16,770 $20,890, but not 
 16.30  over $67,390 $83,930, 8 7.5 percent; 
 16.31     (3) On all over $67,390 $83,930, 8.5 8 percent. 
 16.32     (d) In lieu of a tax computed according to the rates set 
 16.33  forth in this subdivision, the tax of any individual taxpayer 
 16.34  whose taxable net income for the taxable year is less than an 
 16.35  amount determined by the commissioner must be computed in 
 16.36  accordance with tables prepared and issued by the commissioner 
 17.1   of revenue based on income brackets of not more than $100.  The 
 17.2   amount of tax for each bracket shall be computed at the rates 
 17.3   set forth in this subdivision, provided that the commissioner 
 17.4   may disregard a fractional part of a dollar unless it amounts to 
 17.5   50 cents or more, in which case it may be increased to $1. 
 17.6      (e) An individual who is not a Minnesota resident for the 
 17.7   entire year must compute the individual's Minnesota income tax 
 17.8   as provided in this subdivision.  After the application of the 
 17.9   nonrefundable credits provided in this chapter, the tax 
 17.10  liability must then be multiplied by a fraction in which:  
 17.11     (1) The numerator is the individual's Minnesota source 
 17.12  federal adjusted gross income as defined in section 62 of the 
 17.13  Internal Revenue Code increased by the addition required for 
 17.14  interest income from non-Minnesota state and municipal bonds 
 17.15  under section 290.01, subdivision 19a, clause (1), after 
 17.16  applying the allocation and assignability provisions of section 
 17.17  290.081, clause (a), or 290.17; and 
 17.18     (2) the denominator is the individual's federal adjusted 
 17.19  gross income as defined in section 62 of the Internal Revenue 
 17.20  Code of 1986, as amended through April 15, 1995, increased by 
 17.21  the addition required for interest income from non-Minnesota 
 17.22  state and municipal bonds under section 290.01, subdivision 19a, 
 17.23  clause (1). 
 17.24     Sec. 9.  Minnesota Statutes 1996, section 290.06, 
 17.25  subdivision 2d, is amended to read: 
 17.26     Subd. 2d.  [INFLATION ADJUSTMENT OF BRACKETS.] (a) For 
 17.27  taxable years beginning after December 31, 1991 1998, the 
 17.28  minimum and maximum dollar amounts for each rate bracket for 
 17.29  which a tax is imposed in subdivision 2c shall be adjusted for 
 17.30  inflation by the percentage determined under paragraph (b).  For 
 17.31  the purpose of making the adjustment as provided in this 
 17.32  subdivision all of the rate brackets provided in subdivision 2c 
 17.33  shall be the rate brackets as they existed for taxable years 
 17.34  beginning after December 31, 1990 1997, and before January 
 17.35  1, 1992 1999.  The rate applicable to any rate bracket must not 
 17.36  be changed.  The dollar amounts setting forth the tax shall be 
 18.1   adjusted to reflect the changes in the rate brackets.  The rate 
 18.2   brackets as adjusted must be rounded to the nearest $10 amount.  
 18.3   If the rate bracket ends in $5, it must be rounded up to the 
 18.4   nearest $10 amount.  
 18.5      (b) The commissioner shall adjust the rate brackets and by 
 18.6   the percentage determined pursuant to the provisions of section 
 18.7   1(f) of the Internal Revenue Code, except that in section 
 18.8   1(f)(3)(B) the word "1990 1997" shall be substituted for the 
 18.9   word "1987 1992."  For 1991 1998, the commissioner shall then 
 18.10  determine the percent change from the 12 months ending on August 
 18.11  31, 1990 1997, to the 12 months ending on August 31, 1991 1998, 
 18.12  and in each subsequent year, from the 12 months ending on August 
 18.13  31, 1990 1997, to the 12 months ending on August 31 of the year 
 18.14  preceding the taxable year.  The determination of the 
 18.15  commissioner pursuant to this subdivision shall not be 
 18.16  considered a "rule" and shall not be subject to the 
 18.17  administrative procedure act contained in chapter 14.  
 18.18     No later than December 15 of each year, the commissioner 
 18.19  shall announce the specific percentage that will be used to 
 18.20  adjust the tax rate brackets. 
 18.21     Sec. 10.  Minnesota Statutes 1996, section 290.091, 
 18.22  subdivision 1, is amended to read: 
 18.23     Subdivision 1.  [IMPOSITION OF TAX.] In addition to all 
 18.24  other taxes imposed by this chapter a tax is imposed on 
 18.25  individuals, estates, and trusts equal to the excess (if any) of 
 18.26     (a) an amount equal to seven 6.8 percent of alternative 
 18.27  minimum taxable income after subtracting the exemption amount, 
 18.28  over 
 18.29     (b) the regular tax for the taxable year. 
 18.30     Sec. 11.  Minnesota Statutes 1996, section 290.091, 
 18.31  subdivision 2, is amended to read: 
 18.32     Subd. 2.  [DEFINITIONS.] For purposes of the tax imposed by 
 18.33  this section, the following terms have the meanings given: 
 18.34     (a) "Alternative minimum taxable income" means the sum of 
 18.35  the following for the taxable year: 
 18.36     (1) the taxpayer's federal alternative minimum taxable 
 19.1   income as defined in section 55(b)(2) of the Internal Revenue 
 19.2   Code; 
 19.3      (2) the taxpayer's itemized deductions allowed in computing 
 19.4   federal alternative minimum taxable income, but excluding the 
 19.5   Minnesota charitable contribution deduction and the medical 
 19.6   expense deduction; 
 19.7      (3) for depletion allowances computed under section 613A(c) 
 19.8   of the Internal Revenue Code, with respect to each property (as 
 19.9   defined in section 614 of the Internal Revenue Code), to the 
 19.10  extent not included in federal alternative minimum taxable 
 19.11  income, the excess of the deduction for depletion allowable 
 19.12  under section 611 of the Internal Revenue Code for the taxable 
 19.13  year over the adjusted basis of the property at the end of the 
 19.14  taxable year (determined without regard to the depletion 
 19.15  deduction for the taxable year); 
 19.16     (4) to the extent not included in federal alternative 
 19.17  minimum taxable income, the amount of the tax preference for 
 19.18  intangible drilling cost under section 57(a)(2) of the Internal 
 19.19  Revenue Code determined without regard to subparagraph (E); 
 19.20     (5) to the extent not included in federal alternative 
 19.21  minimum taxable income, the amount of interest income as 
 19.22  provided by section 290.01, subdivision 19a, clause (1); 
 19.23     less the sum of the amounts determined under the following 
 19.24  clauses (1) to (3): 
 19.25     (1) interest income as defined in section 290.01, 
 19.26  subdivision 19b, clause (1); 
 19.27     (2) an overpayment of state income tax as provided by 
 19.28  section 290.01, subdivision 19b, clause (2), to the extent 
 19.29  included in federal alternative minimum taxable income; and 
 19.30     (3) the amount of investment interest paid or accrued 
 19.31  within the taxable year on indebtedness to the extent that the 
 19.32  amount does not exceed net investment income, as defined in 
 19.33  section 163(d)(4) of the Internal Revenue Code.  Interest does 
 19.34  not include amounts deducted in computing federal adjusted gross 
 19.35  income. 
 19.36     In the case of an estate or trust, alternative minimum 
 20.1   taxable income must be computed as provided in section 59(c) of 
 20.2   the Internal Revenue Code. 
 20.3      (b) "Investment interest" means investment interest as 
 20.4   defined in section 163(d)(3) of the Internal Revenue Code. 
 20.5      (c) "Tentative minimum tax" equals seven 6.8 percent of 
 20.6   alternative minimum taxable income after subtracting the 
 20.7   exemption amount determined under subdivision 3. 
 20.8      (d) "Regular tax" means the tax that would be imposed under 
 20.9   this chapter (without regard to this section and section 
 20.10  290.032), reduced by the sum of the nonrefundable credits 
 20.11  allowed under this chapter.  
 20.12     (e) "Net minimum tax" means the minimum tax imposed by this 
 20.13  section. 
 20.14     (f) "Minnesota charitable contribution deduction" means a 
 20.15  charitable contribution deduction under section 170 of the 
 20.16  Internal Revenue Code to or for the use of an entity described 
 20.17  in section 290.21, subdivision 3, clauses (a) to (e).  When the 
 20.18  federal deduction for charitable contributions is limited under 
 20.19  section 170(b) of the Internal Revenue Code, the allowable 
 20.20  contributions in the year of contribution are deemed to be first 
 20.21  contributions to entities described in section 290.21, 
 20.22  subdivision 3, clauses (a) to (e). 
 20.23     Sec. 12.  Minnesota Statutes 1997 Supplement, section 
 20.24  290.091, subdivision 6, is amended to read: 
 20.25     Subd. 6.  [CREDIT FOR PRIOR YEARS' LIABILITY.] (a) A credit 
 20.26  is allowed against the tax imposed by this chapter on 
 20.27  individuals, trusts, and estates equal to the minimum tax credit 
 20.28  for the taxable year.  The minimum tax credit equals the 
 20.29  adjusted net minimum tax for taxable years beginning after 
 20.30  December 31, 1988, reduced by the minimum tax credits allowed in 
 20.31  a prior taxable year.  The credit may not exceed the excess (if 
 20.32  any) for the taxable year of 
 20.33     (1) the regular tax, over 
 20.34     (2) the greater of (i) the tentative alternative minimum 
 20.35  tax, or (ii) zero. 
 20.36     (b) The adjusted net minimum tax for a taxable year equals 
 21.1   the lesser of the net minimum tax or the excess (if any) of 
 21.2      (1) the tentative minimum tax, over 
 21.3      (2) seven 6.8 percent of the sum of 
 21.4      (i) adjusted gross income as defined in section 62 of the 
 21.5   Internal Revenue Code, 
 21.6      (ii) interest income as defined in section 290.01, 
 21.7   subdivision 19a, clause (1), 
 21.8      (iii) interest on specified private activity bonds, as 
 21.9   defined in section 57(a)(5) of the Internal Revenue Code, to the 
 21.10  extent not included under clause (ii), 
 21.11     (iv) depletion as defined in section 57(a)(1), determined 
 21.12  without regard to the last sentence of paragraph (1), of the 
 21.13  Internal Revenue Code, less 
 21.14     (v) the deductions provided in subdivision 2, paragraph 
 21.15  (a), clauses (1), (2), and (3) of the second series of clauses, 
 21.16  and 
 21.17     (vi) the exemption amount determined under subdivision 3. 
 21.18     In the case of an individual who is not a Minnesota 
 21.19  resident for the entire year, adjusted net minimum tax must be 
 21.20  multiplied by the fraction defined in section 290.06, 
 21.21  subdivision 2c, paragraph (e).  In the case of a trust or 
 21.22  estate, adjusted net minimum tax must be multiplied by the 
 21.23  fraction defined under subdivision 4, paragraph (b). 
 21.24     Sec. 13.  [EDUCATION LEVY REDUCTION APPROPRIATION.] 
 21.25     In addition to any amount appropriated by other law, 
 21.26  $100,000,000 is appropriated in fiscal year 2000, and thereafter 
 21.27  to fund a reduction in the statewide education property tax levy.
 21.28     Sec. 14.  [PROPERTY TAX REBATE.] 
 21.29     (a) A credit is allowed against the tax imposed under 
 21.30  Minnesota Statutes, chapter 290, to an individual, other than as 
 21.31  a dependent, as defined in sections 151 and 152 of the Internal 
 21.32  Revenue Code, disregarding section 152(b)(3) of the Internal 
 21.33  Revenue Code, equal to 30 percent of the qualified property tax 
 21.34  paid before January 1, 1998, for taxes assessed in 1996.  The 
 21.35  rebate is in addition to the property tax rebate under Laws 
 21.36  1997, chapter 231, article 1, section 16. 
 22.1      (b) For property owned and occupied by the taxpayer during 
 22.2   1997, qualified property tax means property taxes payable as 
 22.3   defined in Minnesota Statutes, section 290A.03, subdivision 13, 
 22.4   and deductible by the individual under section 164 of the 
 22.5   Internal Revenue Code of 1986, assessed in 1996 and payable in 
 22.6   1997, except the requirement that the taxpayer own and occupy 
 22.7   the property on January 2, 1997, does not apply. 
 22.8      (c) For a renter, the qualified property tax means the 
 22.9   amount of rent constituting property taxes under Minnesota 
 22.10  Statutes, section 290A.03, subdivision 11, based on rent paid in 
 22.11  1997.  If two or more renters could be claimants under Minnesota 
 22.12  Statutes, chapter 290A, with regard to the rent constituting 
 22.13  property taxes, the rules under Minnesota Statutes, section 
 22.14  290A.03, subdivision 8, paragraph (f), apply to determine the 
 22.15  amount of the credit for the individual. 
 22.16     (d) For an individual who both owned and rented principal 
 22.17  residences in calendar year 1997, qualified taxes are the sum of 
 22.18  the amounts under paragraphs (b) and (c). 
 22.19     (e) If the amount of the credit under this section exceeds 
 22.20  the taxpayer's tax liability under chapter 290, the commissioner 
 22.21  shall refund the excess. 
 22.22     (f) The commissioner of revenue shall pay the credit under 
 22.23  this section to individuals who claim and are allowed the credit 
 22.24  under Laws 1997, chapter 231, article 1, section 16.  Payment of 
 22.25  the credit under this section shall be made by the commissioner 
 22.26  on July 4, 1998, or 60 days after the individual claims the 
 22.27  credit under Laws 1997, chapter 231, article 1, section 16, 
 22.28  whichever is later.  
 22.29     (g) This credit applies to taxable years beginning after 
 22.30  December 31, 1996, and before January 1, 1998. 
 22.31     (h) Payment of the credit under this section is subject to 
 22.32  Minnesota Statutes, chapter 270A, and any other provision 
 22.33  applicable to refunds under Minnesota Statutes, chapter 290. 
 22.34     (i) An amount sufficient to pay refunds under this section 
 22.35  is appropriated to the commissioner of revenue from the general 
 22.36  fund. 
 23.1      Sec. 15.  [FUNDS TRANSFER.] 
 23.2      Notwithstanding the provisions of section 16A.1521, 
 23.3   paragraph (b), $500,000,000 from the property tax reform account 
 23.4   is available to the general fund beginning July 1, 1998, in an 
 23.5   amount equal to the rebates under section 14. 
 23.6      Sec. 16.  [EFFECTIVE DATE.] 
 23.7      Sections 1 to 7 are effective for taxes levied in 1998 and 
 23.8   thereafter, payable in 1999 and thereafter.  Sections 8 and 10 
 23.9   to 12 are effective for taxable years beginning after December 
 23.10  31, 1997.