SF 1438

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; providing a temporary partial 
  1.3             exemption for the value of certain newly constructed 
  1.4             commercial, industrial, or agricultural buildings; 
  1.5             proposing coding for new law in Minnesota Statutes, 
  1.6             chapter 272. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  [272.027] [COMMERCIAL, INDUSTRIAL, AGRICULTURAL 
  1.9   BUILDINGS; NEW CONSTRUCTION EXEMPTION.] 
  1.10     Subdivision 1.  [QUALIFIED PROPERTY.] (a) As used in this 
  1.11  section, "qualified property" means: 
  1.12     (1) buildings and structures that are classified as 
  1.13  commercial or industrial property under section 273.13, 
  1.14  subdivision 24, not including utility property; or 
  1.15     (2) buildings and structures that are classified as farm 
  1.16  buildings and structures under section 273.13, subdivision 23, 
  1.17  not including the farmhouse and garage, that constitute new 
  1.18  construction. 
  1.19     (b) "New construction" means new buildings and structures 
  1.20  and includes new buildings and structures that are constructed 
  1.21  as additions to existing buildings and structures.  New 
  1.22  construction does not include reconstruction of an existing 
  1.23  building or structure that does not constitute complete 
  1.24  replacement of an existing building or structure or refitting of 
  1.25  an existing building or structure, unless the reconstruction of 
  1.26  an existing building or structure is: 
  2.1      (1) required due to economic obsolescence; 
  2.2      (2) necessary to implement recognized industry standards 
  2.3   for the manufacturing and processing of specific products; and 
  2.4      (3) required for the owner of the building or structure to 
  2.5   continue to competitively manufacture or process those products. 
  2.6      Subd. 2.  [SCOPE OF EXEMPTION.] A portion of the market 
  2.7   value of qualified property is exempt from taxation for a period 
  2.8   of up to five years.  If property ceases to be qualified 
  2.9   property at any time during that period, the full amount of the 
  2.10  market value of the property will be subject to taxation 
  2.11  beginning with the first assessment year after the property 
  2.12  ceases to be qualified property.  The portion of the market 
  2.13  value that is exempt for each assessment year following 
  2.14  substantial completion of the new construction is as follows: 
  2.15     (1) for the first year, 75 percent; 
  2.16     (2) for the second year, 60 percent; 
  2.17     (3) for the third year, 45 percent; 
  2.18     (4) for the fourth year, 30 percent; and 
  2.19     (5) for the fifth year, 15 percent. 
  2.20     If the exemption under this section is for new construction 
  2.21  that constitutes complete replacement of an existing building or 
  2.22  structure, the exemption may not reduce the market value of the 
  2.23  property below its market value before commencement of the new 
  2.24  construction. 
  2.25     Subd. 3.  [APPLICATIONS.] The owner of property for which 
  2.26  an exemption is sought under this section shall file an 
  2.27  application with the assessor by January 2 of the assessment 
  2.28  year following substantial completion of the new construction.  
  2.29  The commissioner of revenue shall provide forms for the 
  2.30  application, which must require the information necessary to 
  2.31  determine whether property is eligible for the exemption. 
  2.32     If the application relates to reconstruction but not 
  2.33  complete replacement of an existing building or structure, it 
  2.34  must include verification by the commissioner of trade and 
  2.35  economic development that the project meets the criteria set 
  2.36  forth in clauses (1) to (3) of subdivision 1, paragraph (b). 
  3.1      Sec. 2.  [EFFECTIVE DATE.] 
  3.2      Section 1 is effective for taxes levied in 1996, payable in 
  3.3   1997, and thereafter.