SF 1016

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to taxation; property; excluding the value of 
  1.3             improvements made to certain residential property; 
  1.4             amending Minnesota Statutes 1994, section 273.11, by 
  1.5             adding a subdivision. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1994, section 273.11, is 
  1.8   amended by adding a subdivision to read: 
  1.9      Subd. 19.  [VALUATION EXCLUSION FOR CERTAIN RESIDENTIAL 
  1.10  PROPERTY.] Improvements to qualifying property made after 
  1.11  January 2, 1995, shall be excluded from the value of the 
  1.12  property for assessment purposes.  "Qualifying property" means 
  1.13  property that: 
  1.14     (1) is classified under section 273.13, subdivision 22, 23, 
  1.15  or 25 at the time the improvement is made; 
  1.16     (2) was owned by the same person or persons for the five 
  1.17  preceding consecutive assessment years, including the current 
  1.18  assessment year; and 
  1.19     (3) received an improvement that added at least $3,000 to 
  1.20  the estimated value of the property, based upon the assessor's 
  1.21  determination. 
  1.22  In the case of property classified under section 273.13, 
  1.23  subdivision 23, only improvements made to the house and garage 
  1.24  are eligible for the exclusion under this section.  In the case 
  1.25  of a multi-unit residential building, the improvement is 
  2.1   eligible provided that it is made to the residential portion of 
  2.2   the property. 
  2.3      If the property lies in a jurisdiction which is subject to 
  2.4   a building permit process, a building permit must have been 
  2.5   issued prior to commencement of the improvement.  Whenever a 
  2.6   building permit is issued for property which may qualify for an 
  2.7   exclusion under this subdivision, the issuing jurisdiction shall 
  2.8   notify the property owner of the possibility of valuation 
  2.9   exclusion under this subdivision.  
  2.10     The assessor shall require an application.  The 
  2.11  commissioner of revenue shall prescribe a standardized 
  2.12  application form to be used by all counties.  The application 
  2.13  may be filed subsequent to the date of the building permit 
  2.14  provided that the application is filed prior to the next 
  2.15  assessment date. 
  2.16     No exclusion may be granted for an improvement by a local 
  2.17  board of review or county board of equalization unless (1) a 
  2.18  building permit was issued prior to the commencement of the 
  2.19  improvement if the jurisdiction requires a building permit, and 
  2.20  (2) an application was completed on a timely basis.  No 
  2.21  abatement of the taxes for qualifying improvements may be 
  2.22  granted by a county board unless (1) a building permit was 
  2.23  issued prior to commencement of the improvement if the 
  2.24  jurisdiction requires a building permit, and (2) an application 
  2.25  was completed on a timely basis. 
  2.26     The assessor shall note the qualifying value of each 
  2.27  improvement on the property's record, and the sum of those 
  2.28  amounts shall be subtracted from the value of the property in 
  2.29  each of the five years after the improvement has been made, at 
  2.30  which time an amount equal to 20 percent of the qualifying value 
  2.31  must be added back in each of the five subsequent assessment 
  2.32  years.  The valuation exclusion shall terminate whenever (1) the 
  2.33  property is sold, or (2) the property is reclassified to a class 
  2.34  which does not qualify for treatment under this subdivision. 
  2.35     The total qualifying value for a property may not exceed 
  2.36  $50,000.  The term "qualifying value" means the increase in 
  3.1   estimated market value resulting from qualifying improvements.  
  3.2   The $50,000 maximum qualifying value under this subdivision may 
  3.3   result from up to three separate improvements to the property.  
  3.4   The application shall state, in clear language, that if more 
  3.5   than three improvements are made to the qualifying property, a 
  3.6   taxpayer may choose which three improvements are eligible, 
  3.7   provided that after the taxpayer has made the choice and any 
  3.8   valuation attributable to those improvements has been excluded 
  3.9   from taxation, no further changes can be made by the taxpayer. 
  3.10     If 50 percent or more of the square footage of a structure 
  3.11  is voluntarily razed or removed, the valuation increase 
  3.12  attributable to any subsequent improvements to the remaining 
  3.13  structure does not qualify for the exclusion under this 
  3.14  subdivision.  If a structure is unintentionally or accidentally 
  3.15  destroyed by a natural disaster, the property is eligible for an 
  3.16  exclusion under this subdivision provided that the structure was 
  3.17  not completely destroyed.  The qualifying value on property 
  3.18  destroyed by a natural disaster must be computed based upon the 
  3.19  increase from that structure's market value as determined on 
  3.20  January 2 of the year in which the disaster occurred.  A 
  3.21  property receiving benefits under the homestead disaster 
  3.22  provisions under section 273.123 is not disqualified from 
  3.23  receiving an exclusion under this subdivision.  If any 
  3.24  combination of improvements made to a structure increases the 
  3.25  size of the structure by 100 percent or more, the valuation 
  3.26  increase attributable to the portion of the improvement that 
  3.27  causes the structure's size to exceed 100 percent does not 
  3.28  qualify for exclusion under this subdivision. 
  3.29     A property owner may not receive an exclusion under this 
  3.30  subdivision if the property is receiving an exclusion under the 
  3.31  provisions of subdivision 16. 
  3.32     Sec. 2.  [EFFECTIVE DATE.] 
  3.33     Section 1 is effective for improvements made to a 
  3.34  qualifying property after January 2, 1995.