SF 456

2nd Engrossment - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; making policy changes to 
  1.3             property taxes; amending Minnesota Statutes 1996, 
  1.4             sections 275.075; 287.08; 287.28; 287.37; 290A.04, 
  1.5             subdivision 2h; 477A.05, subdivisions 1, 2, and 5; 
  1.6             515B.1-105; and 515B.1-116; Laws 1996, chapter 471, 
  1.7             article 3, section 49. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 1996, section 275.075, is 
  1.10  amended to read: 
  1.11     275.075 [OMISSION BY INADVERTENCE; CORRECTION.] 
  1.12     Whenever the amount of taxes as levied and certified by the 
  1.13  tax levying body of any county, city, town, special taxing 
  1.14  district, or school district has not been, as the result of 
  1.15  error, inadvertence, or from the estimates as provided in 
  1.16  section 275.08, by the county auditor extended and spread in 
  1.17  conformity therewith, such tax levying body may include in its 
  1.18  tax levy for the year following, the whole or any part of the 
  1.19  amount so omitted through error, inadvertence, or from the 
  1.20  estimates as provided in section 275.08, in addition to its 
  1.21  current levy and in addition to and notwithstanding any 
  1.22  limitations to the contrary. 
  1.23     Sec. 2.  Minnesota Statutes 1996, section 287.08, is 
  1.24  amended to read: 
  1.25     287.08 [TAX, HOW PAYABLE; RECEIPTS.] 
  1.26     (a) The tax imposed by sections 287.01 to 287.12 shall be 
  2.1   paid to the treasurer of the county in which the mortgaged land 
  2.2   or some part thereof is situated at or before the time of filing 
  2.3   the mortgage for record or registration.  The treasurer shall 
  2.4   endorse receipt on the mortgage, countersigned by the county 
  2.5   auditor, who shall charge the amount to the treasurer and such 
  2.6   receipt shall be recorded with the mortgage, and such receipt of 
  2.7   the record thereof shall be conclusive proof that the tax has 
  2.8   been paid to the amount therein stated and authorize any county 
  2.9   recorder to record the mortgage.  Its form, in substance, shall 
  2.10  be "registration tax hereon of ..................... dollars 
  2.11  paid."  If the mortgages be exempt from taxation the endorsement 
  2.12  shall be "exempt from registration tax," to be signed in either 
  2.13  case by the treasurer as such, and in case of payment to be 
  2.14  countersigned by the auditor.  In case the treasurer shall be 
  2.15  unable to determine whether a claim of exemption should be 
  2.16  allowed, the tax shall be paid to the court administrator of as 
  2.17  in the case of a taxable mortgage.  
  2.18     (b) Upon written application of the taxpayer, the county 
  2.19  treasurer may refund in whole or in part any tax which has been 
  2.20  erroneously paid, or a person having paid a mortgage registry 
  2.21  tax amount may seek a refund of such tax, or other appropriate 
  2.22  relief, by bringing an action in the district tax court of in 
  2.23  the county to abide the order of such court made upon motion of 
  2.24  the county attorney, or of the claimant upon notice as required 
  2.25  by the court. in which the tax was paid, within 60 days of the 
  2.26  payment.  The action is commenced by the serving of a petition 
  2.27  for relief on the county treasurer, and by filing a copy with 
  2.28  the court.  The county attorney shall defend the action.  The 
  2.29  county treasurer shall notify the treasurer of each county that 
  2.30  has or would receive a portion of the tax as paid.  
  2.31     (c) If the county treasurer determines a refund should be 
  2.32  paid, or if a refund is ordered, the county treasurer of each 
  2.33  county that actually received a portion of the tax shall 
  2.34  immediately pay a proportionate share of three percent of the 
  2.35  refund using any available county funds.  The county treasurer 
  2.36  of each county which received, or would have received, a portion 
  3.1   of the tax shall also pay their county's proportionate share of 
  3.2   the remaining 97 percent of the court-ordered refund on or 
  3.3   before the tenth day of the following month using solely the 
  3.4   mortgage registry tax funds that would be paid to the 
  3.5   commissioner of revenue on that date under section 287.12.  If 
  3.6   the funds on hand under this procedure are insufficient to fully 
  3.7   fund 97 percent of the court ordered refund, the county 
  3.8   treasurer of the county in which the action was brought shall 
  3.9   file a claim with the commissioner of revenue under section 
  3.10  16A.48 for the remaining portion of 97 percent of the refund, 
  3.11  and shall pay over the remaining portion upon receipt of a 
  3.12  warrant from the state issued pursuant to the claim.  
  3.13     (d) When any such mortgage covers real property situate in 
  3.14  more than one county in this state the whole of such tax shall 
  3.15  be paid to the treasurer of the county where the mortgage is 
  3.16  first presented for record or registration, and the payment 
  3.17  shall be receipted and countersigned as above provided.  The tax 
  3.18  shall be divided and paid over by the county treasurer receiving 
  3.19  the same, on or before the tenth day of each month after receipt 
  3.20  thereof, to the county or counties entitled thereto in the ratio 
  3.21  which the market value of the real property covered by the 
  3.22  mortgage in each county bears to the market value of all the 
  3.23  property described in the mortgage.  In making such division and 
  3.24  payment the county treasurer shall send therewith a statement 
  3.25  giving the description of the property described in the mortgage 
  3.26  and the market value of the part thereof situate in each 
  3.27  county.  For the purpose aforesaid, the treasurer of any county 
  3.28  may require the treasurer of any other county to certify to the 
  3.29  former the market valuation of any tract of land in any such 
  3.30  mortgage. 
  3.31     Sec. 3.  Minnesota Statutes 1996, section 287.28, is 
  3.32  amended to read: 
  3.33     287.28 [REFUNDMENTS REFUNDS OR REDEMPTION.] 
  3.34     (a) The county treasurer may order the refundment refund in 
  3.35  whole or in part of any tax which has been erroneously or 
  3.36  unjustly paid and may allow for or redeem such of the stamps, 
  4.1   issued under the authority of sections 287.21 to 287.36 as may 
  4.2   have been spoiled, destroyed, or rendered useless or unfit for 
  4.3   the purpose intended or for which the owner may have no use or 
  4.4   which through mistake may have been improperly or unnecessarily 
  4.5   used.  Such order shall be made only upon written application of 
  4.6   the taxpayer and upon approval of the county board.  Refunds 
  4.7   therefor shall be paid out of the general fund of the county.  
  4.8      (b) A person having paid a deed tax amount may seek a 
  4.9   refund of the tax, or other appropriate relief, by commencing an 
  4.10  action in tax court in the county where the tax was paid, within 
  4.11  60 days of the payment.  The action is commenced by serving a 
  4.12  petition for relief on the county treasurer, and filing a copy 
  4.13  with the court.  The county attorney shall defend the action.  
  4.14  The county treasurer shall notify the treasurer of each county 
  4.15  that has, or would receive a portion of the tax as paid.  Any 
  4.16  refund of deed tax which the county treasurer determines should 
  4.17  be made, and any court ordered refund of deed tax, shall be 
  4.18  accomplished using the refund procedures in section 287.08. 
  4.19     Sec. 4.  Minnesota Statutes 1996, section 287.37, is 
  4.20  amended to read: 
  4.21     287.37 [INVESTIGATIONS AND ASSESSMENTS.] 
  4.22     The commissioner of revenue may investigate and examine 
  4.23  persons and transactions that are subject to this chapter using 
  4.24  the powers and authorities granted in chapters 270 and 289A.  
  4.25  The commissioner may issue orders of assessment under chapter 
  4.26  289A, and enforce collection of unpaid tax or penalty amounts, 
  4.27  including interest, under the authority of chapter 270.  All tax 
  4.28  amounts collected by the commissioner must be apportioned under 
  4.29  section 287.12.  The commissioner's expenses under this section 
  4.30  are not expenses of administration under section 287.33.  All 
  4.31  data and information made available to the commissioner under 
  4.32  this section is public except for investigative data covered by 
  4.33  section 270B.03, subdivision 6. 
  4.34     Notwithstanding the provisions of chapter 289A, the 
  4.35  commissioner may issue orders of assessment for unpaid taxes and 
  4.36  assess the applicable civil penalties in the case of mortgage 
  5.1   registry and deed taxes imposed under this chapter within 3-1/2 
  5.2   years of the date an incorrect tax amount was paid, and may 
  5.3   assess the applicable criminal penalties in the case of mortgage 
  5.4   registry and deed taxes within six years of when an incorrect 
  5.5   tax payment is made.  Taxes and penalties may be imposed at any 
  5.6   time if, because of a knowing and willful actual or attempted 
  5.7   evasion of the tax, no tax, or the statutory minimum tax only 
  5.8   was paid with respect to a deed, mortgage, or other document, 
  5.9   and additional tax amounts were due under this chapter at the 
  5.10  time of execution and delivery or recording.  The only civil or 
  5.11  criminal penalties that may be assessed with respect to a tax 
  5.12  imposed under this chapter are those contained in this chapter. 
  5.13     Sec. 5.  Minnesota Statutes 1996, section 290A.04, 
  5.14  subdivision 2h, is amended to read: 
  5.15     Subd. 2h.  (a) If the gross property taxes payable on a 
  5.16  homestead increase more than 12 percent over the net property 
  5.17  taxes payable in the prior year on the same property that is 
  5.18  owned and occupied by the same owner on January 2 of both years, 
  5.19  and the amount of that increase is $100 or more for taxes 
  5.20  payable in 1996 and 1997, a claimant who is a homeowner shall be 
  5.21  allowed an additional refund equal to 60 percent of the amount 
  5.22  of the increase over the greater of 12 percent of the prior 
  5.23  year's net property taxes payable or $100 for taxes payable in 
  5.24  1996 and 1997.  This subdivision shall not apply to any increase 
  5.25  in the gross property taxes payable attributable to improvements 
  5.26  made to the homestead after the assessment date for the prior 
  5.27  year's taxes.  This subdivision shall not apply to any increase 
  5.28  in the gross property taxes payable attributable to the 
  5.29  termination of valuation exclusions under section 273.11, 
  5.30  subdivision 16. 
  5.31     The maximum refund allowed under this subdivision is $1,000.
  5.32     (b) For purposes of this subdivision, the following terms 
  5.33  have the meanings given: 
  5.34     (1) "Net property taxes payable" means property taxes 
  5.35  payable minus refund amounts for which the claimant qualifies 
  5.36  pursuant to subdivision 2 and this subdivision.  
  6.1      (2) "Gross property taxes" means net property taxes payable 
  6.2   determined without regard to the refund allowed under this 
  6.3   subdivision. 
  6.4      (c) In addition to the other proofs required by this 
  6.5   chapter, each claimant under this subdivision shall file with 
  6.6   the property tax refund return a copy of the property tax 
  6.7   statement for taxes payable in the preceding year or other 
  6.8   documents required by the commissioner. 
  6.9      (d) On or before December 1, 1995, the commissioner shall 
  6.10  estimate the cost of making the payments provided by this 
  6.11  subdivision for taxes payable in 1996.  Notwithstanding the open 
  6.12  appropriation provision of section 290A.23, if the estimated 
  6.13  total refund claims for taxes payable in 1996 exceed $5,500,000, 
  6.14  the commissioner shall first reduce the 60 percent refund rate 
  6.15  enough, but to no lower a rate than 50 percent, so that the 
  6.16  estimated total refund claims do not exceed $5,500,000.  If the 
  6.17  commissioner estimates that total claims will exceed $5,500,000 
  6.18  at a 50 percent refund rate, the commissioner shall also reduce 
  6.19  the $1,000 maximum refund amount by enough so that total 
  6.20  estimated refund claims do not exceed $5,500,000. 
  6.21     The determinations of the revised thresholds by the 
  6.22  commissioner are not rules subject to chapter 14.  
  6.23     (e) Upon request, the appropriate county official shall 
  6.24  make available the names and addresses of the property taxpayers 
  6.25  who may be eligible for the additional property tax refund under 
  6.26  this section.  The information shall be provided on a magnetic 
  6.27  computer disk.  The county may recover its costs by charging the 
  6.28  person requesting the information the reasonable cost for 
  6.29  preparing the data.  The information may not be used for any 
  6.30  purpose other than for notifying the homeowner of potential 
  6.31  eligibility and assisting the homeowner, without charge, in 
  6.32  preparing a refund claim. 
  6.33     Sec. 6.  Minnesota Statutes 1996, section 477A.05, 
  6.34  subdivision 1, is amended to read: 
  6.35     Subdivision 1.  [QUALIFICATION.] By May 15, 1996, and March 
  6.36  31 of each year thereafter, the commissioner shall send a local 
  7.1   performance aid qualification form to each county, and each city 
  7.2   in the state with a calendar year 1995 population greater than 
  7.3   500 as determined on or before July 1, 1996, under section 
  7.4   477A.011, subdivision 3.  Jurisdictions that are eligible to 
  7.5   receive the aid must return the completed form by June 30 in 
  7.6   order to receive aid in the following calendar year.  For each 
  7.7   determinator specified in subdivision 2, the form shall have a 
  7.8   space for the jurisdiction to indicate that it has satisfied the 
  7.9   conditions of the determinator.  For counties, the form must be 
  7.10  signed by the chair of the county board.  For cities, the form 
  7.11  must be signed by the mayor and a member of the city council. 
  7.12     Sec. 7.  Minnesota Statutes 1996, section 477A.05, 
  7.13  subdivision 2, is amended to read: 
  7.14     Subd. 2.  [ELIGIBILITY DETERMINATOR.] For calendar year 
  7.15  1997 and subsequent calendar years, a jurisdiction is eligible 
  7.16  to receive local performance aid if the jurisdiction has a 
  7.17  calendar year 1995 population over 500 as determined on or 
  7.18  before July 1, 1996, under section 477A.011, subdivision 3, and 
  7.19  affirms that it has developed a system of performance measures 
  7.20  for the services provided by the jurisdiction, and that these 
  7.21  measures are regularly compiled and presented to the county 
  7.22  board or the city council at least once a year.  A jurisdiction 
  7.23  is also eligible for aid under this determinator if it affirms 
  7.24  that it is in the process of developing and implementing a 
  7.25  system of performance measures; however, eligibility based upon 
  7.26  being in the process of development may not be used for more 
  7.27  than two consecutive years. 
  7.28     Sec. 8.  Minnesota Statutes 1996, section 477A.05, 
  7.29  subdivision 5, is amended to read: 
  7.30     Subd. 5.  [APPROPRIATION.] For payments to counties under 
  7.31  this section, there is annually appropriated from the general 
  7.32  fund to the commissioner of revenue an amount equal to the sum 
  7.33  of $558,625 plus the amount by which county aids were reduced 
  7.34  under Laws 1996, chapter 471, article 3, section 49, adjusted 
  7.35  for inflation as provided under section 477A.03, subdivision 3.  
  7.36  For payments to cities under this section, there is annually 
  8.1   appropriated from the general fund to the commissioner of 
  8.2   revenue an amount equal to the sum of $441,735 plus the amount 
  8.3   by which city aids were reduced for the cities eligible under 
  8.4   subdivision 2 under Laws 1996, chapter 471, article 3, section 
  8.5   49, adjusted for inflation as provided under section 477A.03, 
  8.6   subdivision 3. 
  8.7      Sec. 9.  Minnesota Statutes 1996, section 515B.1-105, is 
  8.8   amended to read: 
  8.9      515B.1-105 [SEPARATE TITLES AND TAXATION.] 
  8.10     (a) In a cooperative: 
  8.11     (1) The unit owners' interests in units and their allocated 
  8.12  interests are wholly personal property, unless the declaration 
  8.13  provides that the interests are wholly real estate.  The 
  8.14  characterization of these interests as real or personal property 
  8.15  shall not affect whether homestead exemptions or classifications 
  8.16  apply. 
  8.17     (2) The ownership interest in a unit which may be sold, 
  8.18  conveyed, voluntarily or involuntarily encumbered, or otherwise 
  8.19  transferred by a unit owner, is the right to possession of that 
  8.20  unit under a proprietary lease coupled with the allocated 
  8.21  interests of that unit, and the association's interest in that 
  8.22  unit is not affected by the transaction. 
  8.23     (b) In a condominium or planned community: 
  8.24     (1) Each unit, and its allocated interest in the common 
  8.25  elements, constitutes a separate parcel of real estate. 
  8.26     (2) If there is any unit owner other than a declarant, each 
  8.27  unit shall be separately taxed and assessed, and no separate tax 
  8.28  or assessment may be rendered against any common elements. 
  8.29     (c) If a declaration is recorded prior to 30 days before 
  8.30  any installment of real estate taxes becomes payable, the local 
  8.31  taxing authority shall split the taxes so payable on the common 
  8.32  interest community among the units.  Interest and penalties 
  8.33  which would otherwise accrue shall not begin to accrue until at 
  8.34  least 30 days after the split is accomplished. 
  8.35     (d) A unit used for residential purposes together with not 
  8.36  more than three units used for vehicular parking, and their 
  9.1   common element interests, shall be treated as one parcel of real 
  9.2   estate in determining whether homestead exemptions or 
  9.3   classifications apply. 
  9.4      Sec. 10.  Minnesota Statutes 1996, section 515B.1-116, is 
  9.5   amended to read: 
  9.6      515B.1-116 [RECORDING.] 
  9.7      (a) A declaration, bylaws, any amendment to a declaration 
  9.8   or bylaws, and any other instrument affecting a common interest 
  9.9   community shall be entitled to be recorded.  In those counties 
  9.10  which have a tract index, the county recorder shall enter the 
  9.11  declaration in the tract index for each unit affected.  The 
  9.12  registrar of titles shall file the declaration on the 
  9.13  certificate of title for each unit affected. 
  9.14     (b) The recording officer shall upon request promptly 
  9.15  assign a number (CIC number) to a common interest community to 
  9.16  be formed or to a common interest community resulting from the 
  9.17  merger of two or more common interest communities. 
  9.18     (c) Documents recorded pursuant to this chapter shall in 
  9.19  the case of registered land be filed, and references to the 
  9.20  recording of documents shall mean filed in the case of 
  9.21  registered land. 
  9.22     (d) Subject to any specific requirements of this chapter, 
  9.23  if any document to be recorded pursuant to this chapter requires 
  9.24  approval by a certain vote or agreement of the unit owners or 
  9.25  secured parties, an affidavit of the secretary of the 
  9.26  association stating that the required vote or agreement has 
  9.27  occurred shall be attached to the document and shall constitute 
  9.28  prima facie evidence of the representations contained therein. 
  9.29     (e) If a common interest community is located on registered 
  9.30  land, the recording fee for any document affecting two or more 
  9.31  units shall be the then-current fee for registering the document 
  9.32  on the certificates of title for the first ten affected 
  9.33  certificates and one-third of the then-current fee for each 
  9.34  additional affected certificate.  This provision shall not apply 
  9.35  to recording fees for deeds of conveyance, with the exception of 
  9.36  deeds given pursuant to sections 515B.2-119 and 515B.3-112. 
 10.1      (f) Except as permitted under this subsection, a recording 
 10.2   officer shall not file or record a declaration creating a new 
 10.3   common interest community, unless the county treasurer has 
 10.4   certified that the property taxes payable in the current year 
 10.5   for the real estate included in the proposed common interest 
 10.6   community have been paid.  This certification is in addition to 
 10.7   the certification for delinquent taxes required by section 
 10.8   272.12.  In the case of preexisting common interest communities, 
 10.9   the recording officer shall accept, file, and record the 
 10.10  following instruments, without requiring a certification as to 
 10.11  the current or delinquent taxes on any of the units in the 
 10.12  common interest community:  (i) a declaration subjecting the 
 10.13  common interest community to this chapter; (ii) a declaration 
 10.14  changing the form of a common interest community pursuant to 
 10.15  section 515B.2-123; or (iii) an amendment to or restatement of a 
 10.16  the declaration or, bylaws, or an amended CIC plat, approved 
 10.17  by the required vote of unit owners of an association may be 
 10.18  recorded without the necessity of paying the current or 
 10.19  delinquent taxes on any of the units in the common interest 
 10.20  community.  In order for the instruments to be accepted and 
 10.21  recorded under the preceding sentence, the assessor must certify 
 10.22  or otherwise inform the recording officer that, for taxes 
 10.23  payable in the current year, the assessor has allocated taxable 
 10.24  values to each unit or has separately assessed each unit. 
 10.25     (g) The registrar of titles shall not require the filing on 
 10.26  certificates of title previously issued for units in a flexible 
 10.27  common interest community of an amendment to a declaration 
 10.28  pursuant to section 515B.2-111 made solely to add additional 
 10.29  real estate. 
 10.30     Sec. 11.  Laws 1996, chapter 471, article 3, section 49, is 
 10.31  amended to read:  
 10.32     Sec. 49.  [AID REDUCTION.] 
 10.33     Calendar year 1997 aids to counties and cities under 
 10.34  section 273.1398, subdivision 2, shall be permanently reduced by 
 10.35  an amount equal to $1 times the most recent population of the 
 10.36  jurisdiction, established under section 477A.011, subdivision 3 
 11.1   in the year in which the aid is determined.  For this purpose, 
 11.2   "cities" means statutory and home rule charter cities with a 
 11.3   calendar year 1995 population greater than 500 as determined on 
 11.4   or before July 1, 1996, under section 477A.011, subdivision 3. 
 11.5      Sec. 12.  [EFFECTIVE DATE.] 
 11.6      Section 1 is effective for taxes payable in 1998 and 
 11.7   thereafter.  Sections 2, 3, and 5 are effective the day 
 11.8   following final enactment.  Section 4 is effective for mortgages 
 11.9   submitted for recording and deeds executed and delivered on July 
 11.10  1, 1997, and thereafter.  Sections 6 to 8 and 11 are effective 
 11.11  for aid payable in 1998 and thereafter.  Section 10 is effective 
 11.12  for declarations submitted for recording on or after July 1, 
 11.13  1997.