SF 962

as introduced - 87th Legislature (2011 - 2012) Posted on 03/20/2012 09:10am

A bill for an act
relating to taxation; property; modifying pollution control exemption and class
3 rate; amending Minnesota Statutes 2010, sections 272.02, subdivision 10;
273.13, subdivision 24.

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

Section 1.

Minnesota Statutes 2010, section 272.02, subdivision 10, is amended to read:

Subd. 10.

Personal property used for pollution control.

new text begin (a) new text end Personal property
used primarily for the abatement and control of air, water, or land pollution is exempt to
the extent that it is so used, and real property is exempt if it is used primarily for abatement
and control of air, water, or land pollution as part of an agricultural operation, as a part
of a centralized treatment and recovery facility operating under a permit issued by the
Minnesota Pollution Control Agency pursuant to chapters 115 and 116 and Minnesota
Rules, parts 7001.0500 to 7001.0730, and 7045.0020 to 7045.1260, as a wastewater
treatment facility and for the treatment, recovery, and stabilization of metals, oils,
chemicals, water, sludges, or inorganic materials from hazardous industrial wastes, or as
part of an electric generation system. For purposes of this subdivision, personal property
includes ponderous machinery and equipment used in a business or production activity
that at common law is considered real property.

new text begin (b) new text end Any taxpayer requesting exemption of all or a portion of any real property or any
equipment or device, or part thereof, operated primarily for the control or abatement of
air, water, or land pollution shall file an application with the commissioner of revenue.
The Minnesota Pollution Control Agency shall upon request of the commissioner furnish
information and advice to the commissioner.

new text begin (c) new text end The information and advice furnished by the Minnesota Pollution Control
Agency must include statements as to whether the equipment, device, or real property
meets a standard, rule, criteria, guideline, policy, or order of the Minnesota Pollution
Control Agency, and whether the equipment, device, or real property is installed or
operated in accordance with it. On determining that property qualifies for exemption, the
commissioner shall issue an order exempting the property from taxation. The equipment,
device, or real property shall continue to be exempt from taxation as long as the order
issued by the commissioner remains in effect new text begin , except that the exemption for attached
machinery and other personal property of an electric generation facility is applied as
provided in paragraphs (d) and (e) new text end .

new text begin (d) Beginning in assessment year 2011 and thereafter, an exemption granted for
attached machinery and other personal property of an electric generation facility under
this subdivision applies as follows:
new text end

new text begin (1) for taxes payable in the first year of the exemption, the exemption applies to the
full value of the personal property;
new text end

new text begin (2) for taxes payable in the second year of the exemption, the exemption applies to
two-thirds of the value of the personal property; and
new text end

new text begin (3) for taxes payable in the third year of the exemption, the exemption applies to
one-third of the value of the personal property.
new text end

new text begin (e) After the exemption is applied as provided in paragraph (d), the exemption order
issued by the commissioner for attached machinery and other personal property under
this subdivision expires.
new text end

new text begin (f) Exemptions granted by the commissioner for attached machinery and other
personal property issued prior to the 2011 assessment year are phased out, beginning in
taxable year 2012, as provided in paragraph (d).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2012 and
thereafter.
new text end

Sec. 2.

Minnesota Statutes 2010, section 273.13, subdivision 24, is amended to read:

Subd. 24.

Class 3.

(a) Commercial and industrial property and utility real and
personal property is class 3a.

(1) Except as otherwise provided, each parcel of commercial, industrial, or utility
real property has a class rate of 1.5 percent of the first tier of market value, and 2.0 percent
of the remaining market value. In the case of contiguous parcels of property owned by the
same person or entity, only the value equal to the first-tier value of the contiguous parcels
qualifies for the reduced class rate, except that contiguous parcels owned by the same
person or entity shall be eligible for the first-tier value class rate on each separate business
operated by the owner of the property, provided the business is housed in a separate
structure. For the purposes of this subdivision, the first tier means the first $150,000 of
market value. Real property owned in fee by a utility for transmission line right-of-way
shall be classified at the class rate for the higher tier.

For purposes of this subdivision, parcels are considered to be contiguous even if
they are separated from each other by a road, street, waterway, or other similar intervening
type of property. Connections between parcels that consist of power lines or pipelines do
not cause the parcels to be contiguous. Property owners who have contiguous parcels of
property that constitute separate businesses that may qualify for the first-tier class rate shall
notify the assessor by July 1, for treatment beginning in the following taxes payable year.

(2) All personal property that is: (i) part of an electric generation, transmission, or
distribution system; or (ii) part of a pipeline system transporting or distributing water, gas,
crude oil, or petroleum products; and (iii) not described in clause (3) new text begin or (4) new text end , deleted text begin and all deleted text end new text begin has a
class rate of 3.0 percent. new text end

new text begin (3) new text end Railroad operating property has a class rate as provided under clause (1) for
the first tier of market value and the remaining market value. In the case of multiple
parcels in one county that are owned by one person or entity, only one first tier amount
is eligible for the reduced rate.

deleted text begin (3) The entire market value of personal property that is: (i) tools, implements, and
machinery of an electric generation, transmission, or distribution system; (ii) tools,
implements, and machinery of a pipeline system transporting or distributing water, gas,
crude oil, or petroleum products; or (iii) the deleted text end new text begin (4) Personal property consisting of new text end mains
and pipes used in the distribution of steam or hot or chilled water for heating or cooling
buildings, has a class rate as provided under clause (1) for the remaining market value
in excess of the first tier.

(b) Employment property defined in section 469.166, during the period provided
in section 469.170, shall constitute class 3b. The class rates for class 3b property are
determined under paragraph (a).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2012 and
thereafter.
new text end