SF 1332

as introduced - 89th Legislature (2015 - 2016) Posted on 03/05/2015 08:46am

A bill for an act
relating to taxation; property; modifying the requirements for class 1c property;
modifying the treatment of leased seasonal-recreational land; amending
Minnesota Statutes 2014, sections 272.0213; 273.13, subdivision 22.

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

Section 1.

Minnesota Statutes 2014, section 272.0213, is amended to read:

272.0213 LEASED SEASONAL-RECREATIONAL LAND.

(a) deleted text begin A county board may elect, by resolution, to deleted text end new text begin Qualified lands, as defined in this
section, are new text end exempt from taxation, including the tax under section 273.19 deleted text begin , qualified lands deleted text end .
"Qualified lands" for purposes of this section means property that:

(1) is owned by a county, city, town, or the state; new text begin and
new text end

(2) is rented by the entity for noncommercial seasonal-recreational deleted text begin or deleted text end new text begin , new text end
noncommercial seasonal-recreational residential use deleted text begin ; and deleted text end new text begin , or class 1c commercial
seasonal-recreational residential use.
new text end

deleted text begin (3) was rented for the purposes specified in clause (2) and was exempt from taxation
for property taxes payable in 2008.
deleted text end

(b) Lands owned by the federal government and rented for noncommercial
seasonal-recreational deleted text begin or deleted text end new text begin , new text end noncommercial seasonal-recreational residential new text begin , or class 1c
commercial seasonal-recreational residential new text end use are exempt from taxation, including the
tax under section 273.19.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2016.
new text end

Sec. 2.

Minnesota Statutes 2014, 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 classification rate
of one percent of its market value; and the market value of class 1a property that exceeds
$500,000 has a classification 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 classification rate of .45 percent of its market value. The
remaining market value of class 1b property has a classification 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 deleted text begin even
if deleted text end new text begin , whether new text end the title to the homestead is held by the corporation, partnership, or limited
liability company new text begin , or by a shareholder of a corporation who owns the resort, a partner in a
partnership who owns the resort, or a member of a limited liability company who owns
the resort new text end . 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 classification 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 classification rates as class
1a property under paragraph (a).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2016.
new text end