Engrossments
Introduction		Posted on 05/01/2018

ARTICLE 1

RESIDENTIAL CLASSIFICATION REFORM

Section 1.

Minnesota Statutes 2016, section 273.124, subdivision 1, is amended to read:

Subdivision 1.

General rule.

(a) new text begin Class 1 new text end residential real estate new text begin under section 273.13,
subdivision 22, new text end that is occupied and used for the purposes of a homestead by its owner, who
must be a Minnesota resident, is a residential homestead.new text begin 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.
new text end

Agricultural land, as defined in section 273.13, subdivision 23, that is occupied and used
as a homestead by its owner, who must be a Minnesota resident, is an agricultural homestead.

Dates for establishment of a homestead and homestead treatment provided to particular
types of property are as provided in this section.

Property held by a trustee under a trust is eligible for homestead classification if the
requirements under this chapter are satisfied.

The assessor shall require proof, as provided in subdivision 13, of the facts upon which
classification as a homestead may be determined. Notwithstanding any other law, the assessor
may at any time require a homestead application to be filed in order to verify that any
property classified as a homestead continues to be eligible for homestead status.
Notwithstanding any other law to the contrary, the Department of Revenue may, upon
request from an assessor, verify whether an individual who is requesting or receiving
homestead classification has filed a Minnesota income tax return as a resident for the most
recent taxable year for which the information is available.

When there is a name change or a transfer of homestead property, the assessor may
reclassify the property in the next assessment unless a homestead application is filed to
verify that the property continues to qualify for homestead classification.

(b) For purposes of this section, homestead property shall include property which is used
for purposes of the homestead but is separated from the homestead by a road, street, lot,
waterway, or other similar intervening property. The term "used for purposes of the
homestead" shall include but not be limited to uses for gardens, garages, or other outbuildings
commonly associated with a homestead, but shall not include vacant land held primarily
for future development. In order to receive homestead treatment for the noncontiguous
property, the owner must use the property for the purposes of the homestead, and must apply
to the assessor, both by the deadlines given in subdivision 9. After initial qualification for
the homestead treatment, additional applications for subsequent years are not required.

(c) Residential real estate that is occupied and used for purposes of a homestead by a
relative of the owner is a homestead but only to the extent of the homestead treatment that
would be provided if the related owner occupied the property. For purposes of this paragraph
and paragraph (g), "relative" means a parent, stepparent, child, stepchild, grandparent,
grandchild, brother, sister, uncle, aunt, nephew, or niece. This relationship may be by blood
or marriage. Property that has been classified as seasonal residential recreational property
at any time during which it has been owned by the current owner or spouse of the current
owner will not be reclassified as a homestead unless it is occupied as a homestead by the
owner; this prohibition also applies to property that, in the absence of this paragraph, would
have been classified as seasonal residential recreational property at the time when the
residence was constructed. Neither the related occupant nor the owner of the property may
claim a property tax refund under chapter 290A for a homestead occupied by a relative. In
the case of a residence located on agricultural land, only the house, garage, and immediately
surrounding one acre of land shall be classified as a homestead under this paragraph, except
as provided in paragraph (d).

(d) Agricultural property that is occupied and used for purposes of a homestead by a
relative of the owner, is a homestead, only to the extent of the homestead treatment that
would be provided if the related owner occupied the property, and only if all of the following
criteria are met:

(1) the relative who is occupying the agricultural property is a grandchild, child, sibling,
or parent of the owner of the agricultural property or of the spouse of the owner;

(2) the owner of the agricultural property must be a Minnesota resident;

(3) the owner of the agricultural property must not receive homestead treatment on any
other agricultural property in Minnesota; and

(4) the owner of the agricultural property is limited to only one agricultural homestead
per family under this paragraph.

Neither the related occupant nor the owner of the property may claim a property tax
refund under chapter 290A for a homestead occupied by a relative qualifying under this
paragraph. For purposes of this paragraph, "agricultural property" means the house, garage,
other farm buildings and structures, and agricultural land.

Application must be made to the assessor by the owner of the agricultural property to
receive homestead benefits under this paragraph. The assessor may require the necessary
proof that the requirements under this paragraph have been met.

(e) In the case of property owned by a property owner who is married, the assessor must
not deny homestead treatment in whole or in part if only one of the spouses occupies the
property and the other spouse is absent due to: (1) marriage dissolution proceedings, (2)
legal separation, (3) employment or self-employment in another location, or (4) other
personal circumstances causing the spouses to live separately, not including an intent to
obtain two homestead classifications for property tax purposes. To qualify under clause (3),
the spouse's place of employment or self-employment must be at least 50 miles distant from
the other spouse's place of employment, and the homesteads must be at least 50 miles distant
from each other.

(f) The assessor must not deny homestead treatment in whole or in part if:

(1) in the case of a property owner who is not married, the owner is absent due to
residence in a nursing home, boarding care facility, or an elderly assisted living facility
property as defined in section 273.13, subdivision 25a, and the property is not otherwise
occupied; or

(2) in the case of a property owner who is married, the owner or the owner's spouse or
both are absent due to residence in a nursing home, boarding care facility, or an elderly
assisted living facility property as defined in section 273.13, subdivision 25a, and the property
is not occupied or is occupied only by the owner's spouse.

(g) If an individual is purchasing property with the intent of claiming it as a homestead
and is required by the terms of the financing agreement to have a relative shown on the deed
as a co-owner, the assessor shall allow a full homestead classification. This provision only
applies to first-time purchasers, whether married or single, or to a person who had previously
been married and is purchasing as a single individual for the first time. The application for
homestead benefits must be on a form prescribed by the commissioner and must contain
the data necessary for the assessor to determine if full homestead benefits are warranted.

(h) If residential or agricultural real estate is occupied and used for purposes of a
homestead by a child of a deceased owner and the property is subject to jurisdiction of
probate court, the child shall receive relative homestead classification under paragraph (c)
or (d) to the same extent they would be entitled to it if the owner was still living, until the
probate is completed. For purposes of this paragraph, "child" includes a relationship by
blood or by marriage.

(i) If a single-family home, duplex, or triplex classified as either residential homestead
or agricultural homestead is also used to provide licensed child care, the portion of the
property used for licensed child care must be classified as a part of the homestead property.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2019.
new text end

Sec. 2.

Minnesota Statutes 2016, section 273.124, subdivision 3a, is amended to read:

Subd. 3a.

Manufactured home park cooperative.

(a) When a manufactured home park
is owned by a corporation or association organized under chapter 308A or 308B, and each
person who owns a share or shares in the corporation or association is entitled to occupy a
lot within the park, the corporation or association may claim homestead treatment for the
park. Each lot must be designated by legal description or number, and each lot is limited to
not more than one-half acre of land.

(b) The manufactured home park shall be entitled to homestead treatment if all of the
following criteria are met:

(1) the occupant or the cooperative corporation or association is paying the ad valorem
property taxes and any special assessments levied against the land and structure either
directly, or indirectly through dues to the corporation or association; and

(2) the corporation or association organized under chapter 308A or 308B is wholly
owned by persons having a right to occupy a lot owned by the corporation or association.

(c) A charitable corporation, organized under the laws of Minnesota with no outstanding
stock, and granted a ruling by the Internal Revenue Service for 501(c)(3) tax-exempt status,
qualifies for homestead treatment with respect to a manufactured home park if its members
hold residential participation warrants entitling them to occupy a lot in the manufactured
home park.

(d) "Homestead treatment" under this subdivision means the classification rate provided
for class deleted text begin 4cdeleted text end new text begin 1new text end property deleted text begin classifieddeleted text end under section deleted text begin 273.13, subdivision 25, paragraph (d), clause
(5), item (ii).deleted text end new text begin 273.13, subdivision 22, andnew text end the homestead market value exclusion under
section 273.13, subdivision 35, does not apply deleted text begin and the property taxes assessed against the
park shall not be included in the determination of taxes payable for rent paid under section
290A.03deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2019.
new text end

Sec. 3.

Minnesota Statutes 2017 Supplement, section 273.13, subdivision 22, is amended
to read:

Subd. 22.

Class 1.

deleted text begin (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.
deleted text end

new text begin (a) Class 1 property is residential real estate containing fewer than four dwelling units.
new text end The first $500,000 of new text begin taxable new text end market value of class deleted text begin 1adeleted text end new text begin 1new text end property has a deleted text begin netdeleted text end classification
rate of one percent deleted text begin of its market value;deleted text end new text begin ,new text end and the new text begin taxable new text end market value of class deleted text begin 1adeleted text end new text begin 1new text end property
that exceeds $500,000 has a classification rate of 1.25 percent deleted text begin of its market valuedeleted text end .

deleted text begin (b) Class 1b property includes homestead real estate or homestead manufactured homes
used for the purposes of a homestead by:
deleted text end

deleted text begin (1) any person who is blind as defined in section 256D.35, or the blind person and the
blind person's spouse;
deleted text end

deleted text begin (2) any person who is permanently and totally disabled or by the disabled person and
the disabled person's spouse; or
deleted text end

deleted text begin (3) the surviving spouse of a permanently and totally disabled veteran homesteading a
property classified under this paragraph for taxes payable in 2008.
deleted text end

deleted text begin 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.
deleted text end

deleted text begin 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.
deleted text end

deleted text begin 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 is classified as class 1a or class 2a property, whichever is
appropriate.
deleted text end

deleted text begin (c)deleted text end new text begin (b)new text end Class 1c property is commercial use real and personal property that abuts public
water as defined in section 103G.005, subdivision 15, or abuts a state trail administered by
the Department of Natural Resources, 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 even if the title to
the homestead is held by the corporation, partnership, or limited liability company. 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 deleted text begin 1adeleted text end new text begin 1new text end 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.

deleted text begin (d) Class 1d property includes structures that meet all of the following criteria:
deleted text end

deleted text begin (1) the structure is located on property that is classified as agricultural property under
section 273.13, subdivision 23;
deleted text end

deleted text begin (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;
deleted text end

deleted text begin (3) the structure meets all applicable health and safety requirements for the appropriate
season; and
deleted text end

deleted text begin (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.
deleted text end

deleted text begin The market value of class 1d property has the same classification rates as class 1a property
under paragraph (a).
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2019.
new text end

Sec. 4.

Minnesota Statutes 2017 Supplement, section 273.13, subdivision 23, is amended
to read:

Subd. 23.

Class 2.

(a) An agricultural homestead consists of class 2a agricultural land
new text begin and buildings new text end that deleted text begin isdeleted text end new text begin arenew text end homesteaded, along with any class 2b rural vacant land that is
contiguous to the class 2a land under the same ownership. deleted text begin The market value of the house
and garage and immediately surrounding one acre of land has the same classification rates
as class 1a or 1b property under subdivision 22.deleted text end The value of the deleted text begin remainingdeleted text end land including
improvements up to the first tier valuation limit of agricultural homestead property has a
classification rate of 0.5 percent of market value. The remaining property over the first tier
has a classification rate of one percent of market value. For purposes of this subdivision,
the "first tier valuation limit of agricultural homestead property" and "first tier" means the
limit certified under section 273.11, subdivision 23.

(b) Class 2a agricultural land consists of parcels of property, or portions thereof, that
are agricultural land and buildings. Class 2a property has a classification rate of one percent
of market value, unless it is part of an agricultural homestead under paragraph (a). Class 2a
property must also include any property that would otherwise be classified as 2b, but is
interspersed with class 2a property, including but not limited to sloughs, wooded wind
shelters, acreage abutting ditches, ravines, rock piles, land subject to a setback requirement,
and other similar land that is impractical for the assessor to value separately from the rest
of the property or that is unlikely to be able to be sold separately from the rest of the property.

An assessor may classify the part of a parcel described in this subdivision that is used
for agricultural purposes as class 2a and the remainder in the class appropriate to its use.

(c) Class 2b rural vacant land consists of parcels of property, or portions thereof, that
are unplatted real estate, rural in character and not used for agricultural purposes, including
land used for growing trees for timber, lumber, and wood and wood products, that is not
improved with a structure. The presence of a minor, ancillary nonresidential structure as
defined by the commissioner of revenue does not disqualify the property from classification
under this paragraph. Any parcel of 20 acres or more improved with a structure that is not
a minor, ancillary nonresidential structure must be split-classified, and ten acres must be
assigned to the split parcel containing the structure. Class 2b property has a classification
rate of one percent of market value unless it is part of an agricultural homestead under
paragraph (a), or qualifies as class 2c under paragraph (d).

(d) Class 2c managed forest land consists of no less than 20 and no more than 1,920
acres statewide per taxpayer that is being managed under a forest management plan that
meets the requirements of chapter 290C, but is not enrolled in the sustainable forest resource
management incentive program. It has a classification rate of .65 percent, provided that the
owner of the property must apply to the assessor in order for the property to initially qualify
for the reduced rate and provide the information required by the assessor to verify that the
property qualifies for the reduced rate. If the assessor receives the application and information
before May 1 in an assessment year, the property qualifies beginning with that assessment
year. If the assessor receives the application and information after April 30 in an assessment
year, the property may not qualify until the next assessment year. The commissioner of
natural resources must concur that the land is qualified. The commissioner of natural
resources shall annually provide county assessors verification information on a timely basis.
The presence of a minor, ancillary nonresidential structure as defined by the commissioner
of revenue does not disqualify the property from classification under this paragraph.

(e) Agricultural land as used in this section means:

(1) contiguous acreage of ten acres or more, used during the preceding year for
agricultural purposes; or

(2) contiguous acreage used during the preceding year for an intensive livestock or
poultry confinement operation, provided that land used only for pasturing or grazing does
not qualify under this clause.

"Agricultural purposes" as used in this section means the raising, cultivation, drying, or
storage of agricultural products for sale, or the storage of machinery or equipment used in
support of agricultural production by the same farm entity. For a property to be classified
as agricultural based only on the drying or storage of agricultural products, the products
being dried or stored must have been produced by the same farm entity as the entity operating
the drying or storage facility. "Agricultural purposes" also includes enrollment in a local
conservation program or the Reinvest in Minnesota program under sections 103F.501 to
103F.535 or the federal Conservation Reserve Program as contained in Public Law 99-198
or a similar state or federal conservation program if the property was classified as agricultural
(i) under this subdivision for taxes payable in 2003 because of its enrollment in a qualifying
program and the land remains enrolled or (ii) in the year prior to its enrollment. For purposes
of this section, a "local conservation program" means a program administered by a town,
statutory or home rule charter city, or county, including a watershed district, water
management organization, or soil and water conservation district, in which landowners
voluntarily enroll land and receive incentive payments equal to at least $50 per acre in
exchange for use or other restrictions placed on the land. In order for property to qualify
under the local conservation program provision, a taxpayer must apply to the assessor by
February 1 of the assessment year and must submit the information required by the assessor,
including but not limited to a copy of the program requirements, the specific agreement
between the land owner and the local agency, if applicable, and a map of the conservation
area. Agricultural classification shall not be based upon the market value of any residential
structures on the parcel or contiguous parcels under the same ownership.

"Contiguous acreage," for purposes of this paragraph, means all of, or a contiguous
portion of, a tax parcel as described in section 272.193, or all of, or a contiguous portion
of, a set of contiguous tax parcels under that section that are owned by the same person.

(f) Agricultural land under this section also includes:

(1) contiguous acreage that is less than ten acres in size and exclusively used in the
preceding year for raising or cultivating agricultural products; or

(2) contiguous acreage that contains a residence and is less than 11 acres in size, if the
contiguous acreage exclusive of the house, garage, and surrounding one acre of land was
used in the preceding year for one or more of the following three uses:

(i) for an intensive grain drying or storage operation, or for intensive machinery or
equipment storage activities used to support agricultural activities on other parcels of property
operated by the same farming entity;

(ii) as a nursery, provided that only those acres used intensively to produce nursery stock
are considered agricultural land; or

(iii) for intensive market farming; for purposes of this paragraph, "market farming"
means the cultivation of one or more fruits or vegetables or production of animal or other
agricultural products for sale to local markets by the farmer or an organization with which
the farmer is affiliated.

"Contiguous acreage," for purposes of this paragraph, means all of a tax parcel as
described in section 272.193, or all of a set of contiguous tax parcels under that section that
are owned by the same person.

(g) Land shall be classified as agricultural even if all or a portion of the agricultural use
of that property is the leasing to, or use by another person for agricultural purposes.

Classification under this subdivision is not determinative for qualifying under section
273.111.

(h) The property classification under this section supersedes, for property tax purposes
only, any locally administered agricultural policies or land use restrictions that define
minimum or maximum farm acreage.

(i) The term "agricultural products" as used in this subdivision includes production for
sale of:

(1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing
animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains, bees,
and apiary products by the owner;

(2) aquacultural products for sale and consumption, as defined under section 17.47, if
the aquaculture occurs on land zoned for agricultural use;

(3) the commercial boarding of horses, which may include related horse training and
riding instruction, if the boarding is done on property that is also used for raising pasture
to graze horses or raising or cultivating other agricultural products as defined in clause (1);

(4) property which is owned and operated by nonprofit organizations used for equestrian
activities, excluding racing;

(5) game birds and waterfowl bred and raised (i) on a game farm licensed under section
97A.105, provided that the annual licensing report to the Department of Natural Resources,
which must be submitted annually by March 30 to the assessor, indicates that at least 500
birds were raised or used for breeding stock on the property during the preceding year and
that the owner provides a copy of the owner's most recent schedule F; or (ii) for use on a
shooting preserve licensed under section 97A.115;

(6) insects primarily bred to be used as food for animals;

(7) trees, grown for sale as a crop, including short rotation woody crops, and not sold
for timber, lumber, wood, or wood products; and

(8) maple syrup taken from trees grown by a person licensed by the Minnesota
Department of Agriculture under chapter 28A as a food processor.

(j) If a parcel used for agricultural purposes is also used for commercial or industrial
purposes, including but not limited to:

(1) wholesale and retail sales;

(2) processing of raw agricultural products or other goods;

(3) warehousing or storage of processed goods; and

(4) office facilities for the support of the activities enumerated in clauses (1), (2), and
(3),

the assessor shall classify the part of the parcel used for agricultural purposes as class 1b,
2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its use.
The grading, sorting, and packaging of raw agricultural products for first sale is considered
an agricultural purpose. A greenhouse or other building where horticultural or nursery
products are grown that is also used for the conduct of retail sales must be classified as
agricultural if it is primarily used for the growing of horticultural or nursery products from
seed, cuttings, or roots and occasionally as a showroom for the retail sale of those products.
Use of a greenhouse or building only for the display of already grown horticultural or nursery
products does not qualify as an agricultural purpose.

deleted text begin (k) The assessor shall determine and list separately on the records the market value of
the homestead dwelling and the one acre of land on which that dwelling is located. If any
farm buildings or structures are located on this homesteaded acre of land, their market value
shall not be included in this separate determination.
deleted text end

deleted text begin (l)deleted text end new text begin (k)new text end Class 2d airport landing area consists of a landing area or public access area of a
privately owned public use airport. It has a classification rate of one percent of market value.
To qualify for classification under this paragraph, a privately owned public use airport must
be licensed as a public airport under section 360.018. For purposes of this paragraph, "landing
area" means that part of a privately owned public use airport properly cleared, regularly
maintained, and made available to the public for use by aircraft and includes runways,
taxiways, aprons, and sites upon which are situated landing or navigational aids. A landing
area also includes land underlying both the primary surface and the approach surfaces that
comply with all of the following:

(i) the land is properly cleared and regularly maintained for the primary purposes of the
landing, taking off, and taxiing of aircraft; but that portion of the land that contains facilities
for servicing, repair, or maintenance of aircraft is not included as a landing area;

(ii) the land is part of the airport property; and

(iii) the land is not used for commercial or residential purposes.

The land contained in a landing area under this paragraph must be described and certified
by the commissioner of transportation. The certification is effective until it is modified, or
until the airport or landing area no longer meets the requirements of this paragraph. For
purposes of this paragraph, "public access area" means property used as an aircraft parking
ramp, apron, or storage hangar, or an arrival and departure building in connection with the
airport.

deleted text begin (m)deleted text end new text begin (l)new text end Class 2e consists of land with a commercial aggregate deposit that is not actively
being mined and is not otherwise classified as class 2a or 2b, provided that the land is not
located in a county that has elected to opt-out of the aggregate preservation program as
provided in section 273.1115, subdivision 6. It has a classification rate of one percent of
market value. To qualify for classification under this paragraph, the property must be at
least ten contiguous acres in size and the owner of the property must record with the county
recorder of the county in which the property is located an affidavit containing:

(1) a legal description of the property;

(2) a disclosure that the property contains a commercial aggregate deposit that is not
actively being mined but is present on the entire parcel enrolled;

(3) documentation that the conditional use under the county or local zoning ordinance
of this property is for mining; and

(4) documentation that a permit has been issued by the local unit of government or the
mining activity is allowed under local ordinance. The disclosure must include a statement
from a registered professional geologist, engineer, or soil scientist delineating the deposit
and certifying that it is a commercial aggregate deposit.

For purposes of this section and section 273.1115, "commercial aggregate deposit"
means a deposit that will yield crushed stone or sand and gravel that is suitable for use as
a construction aggregate; and "actively mined" means the removal of top soil and overburden
in preparation for excavation or excavation of a commercial deposit.

deleted text begin (n)deleted text end new text begin (m)new text end When any portion of the property under this subdivision or subdivision 22 begins
to be actively mined, the owner must file a supplemental affidavit within 60 days from the
day any aggregate is removed stating the number of acres of the property that is actively
being mined. The acres actively being mined must be (1) valued and classified under
subdivision 24 in the next subsequent assessment year, and (2) removed from the aggregate
resource preservation property tax program under section 273.1115, if the land was enrolled
in that program. Copies of the original affidavit and all supplemental affidavits must be
filed with the county assessor, the local zoning administrator, and the Department of Natural
Resources, Division of Land and Minerals. A supplemental affidavit must be filed each
time a subsequent portion of the property is actively mined, provided that the minimum
acreage change is five acres, even if the actual mining activity constitutes less than five
acres.

deleted text begin (o)deleted text end new text begin (n)new text end The definitions prescribed by the commissioner under paragraphs (c) and (d) are
not rules and are exempt from the rulemaking provisions of chapter 14, and the provisions
in section 14.386 concerning exempt rules do not apply.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2019.
new text end

Sec. 5.

Minnesota Statutes 2017 Supplement, section 273.13, subdivision 25, is amended
to read:

Subd. 25.

Class 4.

(a) Class 4a is residential real estate containing four or more units
and used or held for use by the owner or by the tenants or lessees of the owner as a residence
for rental periods of 30 days or more, excluding property qualifying for class 4d. Class 4a
also includes hospitals licensed under sections 144.50 to 144.56, other than hospitals exempt
under section 272.02, and contiguous property used for hospital purposes, without regard
to whether the property has been platted or subdivided. The market value of class 4a property
has a classification rate of 1.25 percent.

deleted text begin (b) Class 4b includes:
deleted text end

deleted text begin (1) residential real estate containing less than four units that does not qualify as class
4bb, other than seasonal residential recreational property;
deleted text end

deleted text begin (2) manufactured homes not classified under any other provision;
deleted text end

deleted text begin (3) a dwelling, garage, and surrounding one acre of property on a nonhomestead farm
classified under subdivision 23, paragraph (b) containing two or three units; and
deleted text end

deleted text begin (4) unimproved property that is classified residential as determined under subdivision
33.
deleted text end

deleted text begin The market value of class 4b property has a classification rate of 1.25 percent.
deleted text end

deleted text begin (c) Class 4bb includes:
deleted text end

deleted text begin (1) nonhomestead residential real estate containing one unit, other than seasonal
residential recreational property;
deleted text end

deleted text begin (2) a single family dwelling, garage, and surrounding one acre of property on a
nonhomestead farm classified under subdivision 23, paragraph (b); and
deleted text end

deleted text begin (3) a condominium-type storage unit having an individual property identification number
that is not used for a commercial purpose.
deleted text end

deleted text begin Class 4bb property has the same classification rates as class 1a property under subdivision
22.
deleted text end

deleted text begin Property that has been classified as seasonal residential recreational property at any time
during which it has been owned by the current owner or spouse of the current owner does
not qualify for class 4bb.
deleted text end

deleted text begin (d)deleted text end new text begin (b)new text end Class deleted text begin 4cdeleted text end new text begin 4c(1)new text end property includesdeleted text begin : (1)deleted text end new text begin ,new text end except as provided in subdivision 22,
paragraph (c), real and personal property devoted to commercial temporary and seasonal
residential occupancy for recreation purposes, for not more than 250 days in the year
preceding the year of assessment. For purposes of this deleted text begin clausedeleted text end new text begin paragraphnew text end , property is devoted
to a commercial purpose on a specific day if any portion of the property is used for residential
occupancy, and a fee is charged for residential occupancy. Class deleted text begin 4cdeleted text end new text begin 4c(1)new text end property under
this deleted text begin clausedeleted text end new text begin paragraphnew text end 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. A camping pad offered for rent deleted text begin by
a property that otherwisedeleted text end qualifies for class deleted text begin 4c under this clause is also class 4c under this
clausedeleted text end new text begin 4c(1)new text end regardless of the term of the rental agreement, as long as the use of the camping
pad does not exceed 250 days. In order for a property to be classified under this deleted text begin clausedeleted text end new text begin
paragraphnew text end , either (i) the business located on the property must provide recreational activities,
at least 40 percent of the annual gross lodging receipts related to the property must be from
business conducted during 90 consecutive days, and either (A) at least 60 percent of all paid
bookings by lodging guests during the year must be for periods of at least two consecutive
nights; or (B) at least 20 percent of the annual gross receipts must be from charges for
providing recreational activities, or (ii) the business must contain 20 or fewer rental units,
and must be located in a township or a city with a population of 2,500 or less located outside
the metropolitan area, as defined under section 473.121, subdivision 2, that contains a portion
of a state trail administered by the Department of Natural Resources. For purposes of item
(i)(A), a paid booking of five or more nights shall be counted as two bookings. Class deleted text begin 4cdeleted text end new text begin
4c(1)new text end property also includes commercial use real property used exclusively for recreational
purposes in conjunction with other class deleted text begin 4cdeleted text end new text begin 4c(1)new text end property classified under this deleted text begin clausedeleted text end new text begin
paragraphnew text end and devoted to temporary and seasonal residential occupancy for recreational
purposes, up to a total of two acres, provided the property is not devoted to commercial
recreational use for more than 250 days in the year preceding the year of assessment and is
located within two miles of the class deleted text begin 4cdeleted text end new text begin 4c(1)new text end property with which it is used. In order for a
property to qualify for classification under this deleted text begin clausedeleted text end new text begin paragraphnew text end , the owner 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 class deleted text begin 4cdeleted text end new text begin 4c(1)new text end under this deleted text begin clausedeleted text end new text begin paragraphnew text end as otherwise provided. The remainder
of the cabins or units and a proportionate share of the land on which they are located will
be designated as class 3a. The owner of property desiring designation as class deleted text begin 4cdeleted text end new text begin 4c(1)new text end
property under this deleted text begin clausedeleted text end new text begin paragraphnew text end must provide guest registers or other records
demonstrating that the units for which class deleted text begin 4cdeleted text end new text begin 4c(1)new text end 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 deleted text begin 4cdeleted text end new text begin 4c(1)new text end . For the purposes of this paragraph, "recreational activities"
means renting ice fishing houses, boats and motors, snowmobiles, downhill or cross-country
ski equipment; providing marina services, launch services, or guide services; or selling bait
and fishing tackledeleted text begin ;deleted text end new text begin . Class 4c(1) property has a class rate of one percent on the first $500,000
of market value and 1.25 percent on the portion over $500,000.
new text end

deleted text begin (2)deleted text end new text begin (c) Class 4c(2) property is (1) real property that is actively and exclusively devoted
to indoor fitness, health, social, recreational, and related uses, is owned and operated by a
not-for-profit corporation, and is located within the metropolitan area as defined in section
473.121, subdivision 2; or (2)new text end qualified property used as a golf course if:

(i) it is open to the public on a daily fee basis. It may charge membership fees or dues,
but a membership fee may not be required in order to use the property for golfing, and its
green fees for golfing must be comparable to green fees typically charged by municipal
courses; and

(ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).

A structure used as a clubhouse, restaurant, or place of refreshment in conjunction with
the golf course is classified as class 3a propertydeleted text begin ;deleted text end new text begin .
new text end

new text begin Class 4c(2) property has a class rate of 1.25 percent.
new text end

deleted text begin (3)deleted text end new text begin (d) Class 4c(3) property is new text end real property up to a maximum of three acres of land
owned and used by a nonprofit community service oriented organization and not used for
residential purposes on either a temporary or permanent basis, provided that:

deleted text begin (i)deleted text end new text begin (1)new text end the property is not used for a revenue-producing activity for more than six days
in the calendar year preceding the year of assessment; or

deleted text begin (ii)deleted text end new text begin (2)new text end the organization makes annual charitable contributions and donations at least
equal to the property's previous year's property taxes and the property is allowed to be used
for public and community meetings or events for no charge, as appropriate to the size of
the facility.

For purposes of this deleted text begin clausedeleted text end new text begin paragraphnew text end :

deleted text begin (A)deleted text end new text begin (i)new text end "charitable contributions and donations" has the same meaning as lawful gambling
purposes under section 349.12, subdivision 25, excluding those purposes relating to the
payment of taxes, assessments, fees, auditing costs, and utility payments;

deleted text begin (B)deleted text end new text begin (ii)new text end "property taxes" excludes the state general tax;

deleted text begin (C)deleted text end new text begin (iii)new text end a "nonprofit community service oriented organization" means any corporation,
society, association, foundation, or institution organized and operated exclusively for
charitable, religious, fraternal, civic, or educational purposes, and which is exempt from
federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal
Revenue Code; and

deleted text begin (D)deleted text end new text begin (iv)new text end "revenue-producing activities" shall include but not be limited to property or
that portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt
liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling
alley, a retail store, gambling conducted by organizations licensed under chapter 349, an
insurance business, or office or other space leased or rented to a lessee who conducts a
for-profit enterprise on the premises.

Any portion of the property not qualifying under either deleted text begin item (i)deleted text end new text begin clause (1) new text end or deleted text begin (ii)deleted text end new text begin (2) new text end is
class 3a. The use of the property for social events open exclusively to members and their
guests for periods of less than 24 hours, when an admission is not charged nor any revenues
are received by the organization shall not be considered a revenue-producing activity.

The organization shall maintain records of its charitable contributions and donations
and of public meetings and events held on the property and make them available upon
request any time to the assessor to ensure eligibility. An organization meeting the requirement
under deleted text begin item (ii)deleted text end new text begin clause (2)new text end must file an application by May 1 with the assessor for eligibility
for the current year's assessment. The commissioner shall prescribe a uniform application
form and instructionsdeleted text begin ;deleted text end new text begin .
new text end

new text begin Class 4c(3) property has a class rate of 1.5 percent, except that class 4c(3) property
owned or operated by a congressionally chartered veterans organization has a classification
rate of one percent. The commissioner of veterans affairs must provide a list of
congressionally chartered veterans organizations to the commissioner of revenue by January
1, 2018, and each year thereafter.
new text end

deleted text begin (4) postsecondary student housing of not more than one acre of land that is owned by a
nonprofit corporation organized under chapter 317A and is used exclusively by a student
cooperative, sorority, or fraternity for on-campus housing or housing located within two
miles of the border of a college campus;
deleted text end

deleted text begin (5)(i) manufactured home parks as defined in section 327.14, subdivision 3, excluding
manufactured home parks described in items (ii) and (iii), (ii) manufactured home parks as
defined in section 327.14, subdivision 3, that are described in section 273.124, subdivision
3a, and (iii) class I manufactured home parks as defined in section 327C.01, subdivision
13;
deleted text end

deleted text begin (6) real property that is actively and exclusively devoted to indoor fitness, health, social,
recreational, and related uses, is owned and operated by a not-for-profit corporation, and is
located within the metropolitan area as defined in section 473.121, subdivision 2;
deleted text end

deleted text begin (7) adeleted text end new text begin (e) Class 4c(4) property is (1) new text end leased or privately owned noncommercial aircraft
storage hangar not exempt under section 272.01, subdivision 2, and the land on which it is
located, provided that:

(i) the land is on an airport owned or operated by a city, town, county, Metropolitan
Airports Commission, or group thereof; and

(ii) the land lease, or any ordinance or signed agreement restricting the use of the leased
premise, prohibits commercial activity performed at the hangardeleted text begin .deleted text end new text begin ; or
new text end

deleted text begin If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must be
filed by the new owner with the assessor of the county where the property is located within
60 days of the sale;
deleted text end

deleted text begin (8)deleted text end new text begin (2) new text end a privately owned noncommercial aircraft storage hangar not exempt under section
272.01, subdivision 2, and the land on which it is located, provided that:

(i) the land abuts a public airport; and

(ii) the owner of the aircraft storage hangar provides the assessor with a signed agreement
restricting the use of the premises, prohibiting commercial use or activity performed at the
hangardeleted text begin ; anddeleted text end new text begin .
new text end

new text begin Class 4c(4) property has a class rate of 1.5 percent.
new text end

new text begin If a hangar classified under clause (1), item (i), is sold after June 30, 2000, a bill of sale
must be filed by the new owner with the assessor of the county where the property is located
within 60 days of the sale.
new text end

deleted text begin (9) residential real estate, a portion of which is used by the owner for homestead purposes,
and that is also a place of lodging, if all of the following criteria are met:
deleted text end

deleted text begin (i) rooms are provided for rent to transient guests that generally stay for periods of 14
or fewer days;
deleted text end

deleted text begin (ii) meals are provided to persons who rent rooms, the cost of which is incorporated in
the basic room rate;
deleted text end

deleted text begin (iii) meals are not provided to the general public except for special events on fewer than
seven days in the calendar year preceding the year of the assessment; and
deleted text end

deleted text begin (iv) the owner is the operator of the property.
deleted text end

deleted text begin The market value subject to the 4c classification under this clause is limited to five rental
units. Any rental units on the property in excess of five, must be valued and assessed as
class 3a. The portion of the property used for purposes of a homestead by the owner must
be classified as class 1a property under subdivision 22;
deleted text end

deleted text begin (10)deleted text end new text begin (f) Class 4c(5) property isnew text end real property up to a maximum of three acres and operated
as a restaurant as defined under section 157.15, subdivision 12, provided it: deleted text begin (i)deleted text end new text begin (1)new text end is located
on a lake as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and
deleted text begin (ii)deleted text end new text begin (2)new text end is either devoted to commercial purposes for not more than 250 consecutive days,
or receives at least 60 percent of its annual gross receipts from business conducted during
four consecutive months. Gross receipts from the sale of alcoholic beverages must be
included in determining the property's qualification under deleted text begin item (ii)deleted text end new text begin clause (2)new text end . The property's
primary business must be as a restaurant and not as a bar. Gross receipts from gift shop
sales located on the premises must be excluded. Owners of real property desiring deleted text begin 4cdeleted text end
classification under this deleted text begin clausedeleted text end new text begin paragraphnew text end must submit an annual declaration to the assessor
by February 1 of the current assessment year, based on the property's relevant information
for the preceding assessment yeardeleted text begin ;deleted text end new text begin . Class 4c(5) has a class rate of 1.25 percent.
new text end

deleted text begin (11)deleted text end new text begin (g) Class 4c(6) property isnew text end lakeshore and riparian property and adjacent land, not
to exceed six acres, used as a marina, as defined in section 86A.20, subdivision 5, which is
made accessible to the public and devoted to recreational use for marina services. The marina
owner must annually provide evidence to the assessor that it provides services, including
lake or river access to the public by means of an access ramp or other facility that is either
located on the property of the marina or at a publicly owned site that abuts the property of
the marina. No more than 800 feet of lakeshore may be included in this classification.
Buildings used in conjunction with a marina for marina services, including but not limited
to buildings used to provide food and beverage services, fuel, boat repairs, or the sale of
bait or fishing tackle, are classified as class 3a propertydeleted text begin ; anddeleted text end new text begin . Class 4c(6) property has a
class rate of one percent on the first $500,000 of market value and 1.25 percent on the
portion over $500,000.
new text end

deleted text begin (12) real and personal property devoted to noncommercial temporary and seasonal
residential occupancy for recreation purposes.
deleted text end

deleted text begin Class 4c property has a classification rate of 1.5 percent of market value, except that (i)
each parcel of noncommercial seasonal residential recreational property under clause (12)
has the same classification rates as class 4bb property, (ii) manufactured home parks assessed
under clause (5), item (i), have the same classification rate as class 4b property, the market
value of manufactured home parks assessed under clause (5), item (ii), have a classification
rate of 0.75 percent if more than 50 percent of the lots in the park are occupied by
shareholders in the cooperative corporation or association and a classification rate of one
percent if 50 percent or less of the lots are so occupied, and class I manufactured home
parks as defined in section 327C.01, subdivision 13, have a classification rate of 1.0 percent,
(iii) commercial-use seasonal residential recreational property and marina recreational land
as described in clause (11), has a classification rate of one percent for the first $500,000 of
market value, and 1.25 percent for the remaining market value, (iv) the market value of
property described in clause (4) has a classification rate of one percent, (v) the market value
of property described in clauses (2), (6), and (10) has a classification rate of 1.25 percent,
(vi) that portion of the market value of property in clause (9) qualifying for class 4c property
has a classification rate of 1.25 percent, and (vii) property qualifying for classification under
clause (3) that is owned or operated by a congressionally chartered veterans organization
has a classification rate of one percent. The commissioner of veterans affairs must provide
a list of congressionally chartered veterans organizations to the commissioner of revenue
by June 30, 2017, and by January 1, 2018, and each year thereafter.
deleted text end

deleted text begin (e)deleted text end new text begin (h)new text end Class 4d property is qualifying low-income rental housing certified to the assessor
by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion of
the units in the building qualify as low-income rental housing units as certified under section
273.128, subdivision 3, only the proportion of qualifying units to the total number of units
in the building qualify for class 4d. The remaining portion of the building shall be classified
by the assessor based upon its use. Class 4d also includes the same proportion of land as
the qualifying low-income rental housing units are to the total units in the building. For all
properties qualifying as class 4d, the market value determined by the assessor must be based
on the normal approach to value using normal unrestricted rents.

deleted text begin (f)deleted text end new text begin (i)new text end The first tier of market value of class 4d property has a classification rate of 0.75
percent. The remaining value of class 4d property has a classification rate of 0.25 percent.
For the purposes of this paragraph, the "first tier of market value of class 4d property" means
the market value of each housing unit up to the first tier limit. For the purposes of this
paragraph, all class 4d property value must be assigned to individual housing units. The
first tier limit is $100,000 for assessment year 2014. For subsequent years, the limit is
adjusted each year by the average statewide change in estimated market value of property
classified as class 4a and 4d under this section for the previous assessment year, excluding
valuation change due to new construction, rounded to the nearest $1,000, provided, however,
that the limit may never be less than $100,000. Beginning with assessment year 2015, the
commissioner of revenue must certify the limit for each assessment year by November 1
of the previous year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2019.
new text end

Sec. 6.

Minnesota Statutes 2016, section 273.13, is amended by adding a subdivision to
read:

new text begin Subd. 36. new text end

new text begin Clarification of residential classification. new text end

new text begin Class 1 property under subdivision
22 includes the following types of property, which are not required to be recorded separately
by the assessor:
new text end

new text begin (1) residential structures containing fewer than four dwelling units plus one acre of land
for each structure located on agricultural land, but excluding any farm buildings or structures
located on the acre of land;
new text end

new text begin (2) residential property devoted to noncommercial temporary and seasonal occupancy
for recreation purposes;
new text end

new text begin (3) unimproved property that is classified residential as determined under subdivision
33;
new text end

new text begin (4) manufactured home park land along with any ancillary structures;
new text end

new text begin (5) manufactured homes not classified under any other provision;
new text end

new text begin (6) postsecondary student housing of not more than one acre of land that is owned by a
nonprofit corporation organized under chapter 317A and is used exclusively by a student
cooperative, sorority, or fraternity for on-campus housing or housing located within two
miles of the border of a college campus;
new text end

new text begin (7) an owner-occupied dwelling unit within a property classified as class 4a under
subdivision 25;
new text end

new text begin (8) a condominium-type storage unit having an individual property identification number
that is not used for a commercial purpose;
new text end

new text begin (9) structures on property classified as agricultural under section 273.13, subdivision
23, that are occupied exclusively by seasonal farm workers during the time when they work
on the farm, provided that use of the structures for storage of farm equipment or produce
does not disqualify the structures from classification under this clause, and further provided
that:
new text end

new text begin (i) the occupants are not charged rent for the privilege of occupying the property;
new text end

new text begin (ii) the structures meet all applicable health and safety requirements for the appropriate
season; and
new text end

new text begin (iii) the structures are not salable as residential property because they do not comply
with local ordinances relating to location in relation to streets or roads; and
new text end

new text begin (10) residential real estate, a portion of which is occupied by the owner, plus up to two
additional lodging units, if all of the following criteria are met:
new text end

new text begin (i) the lodging units are provided for rent to transient guests that generally stay for periods
of 14 days or less;
new text end

new text begin (ii) meals are provided to persons who rent lodging units, the cost of which is incorporated
in the basic room rate;
new text end

new text begin (iii) meals are not provided to the general public except for special events on less than
seven days in the calendar year preceding the year of assessment; and
new text end

new text begin (iv) the owner is the operator of the property.
new text end

new text begin Any additional lodging units in a property described in clause (10) are class 3a.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2019.
new text end

Sec. 7.

Minnesota Statutes 2017 Supplement, section 275.025, subdivision 1, is amended
to read:

Subdivision 1.

Levy amount.

The state general levy is levied against
commercial-industrial property deleted text begin and seasonal residential recreational property,deleted text end as defined
in this section. The state general levy deleted text begin for commercial-industrial propertydeleted text end is $784,590,000
for taxes payable in 2018 new text begin and $785,640,000 for taxes payable in 2019 new text end and thereafter. deleted text begin The
state general levy for seasonal-recreational property is $44,190,000 for taxes payable in
2018 and thereafter.deleted text end The tax under this section is not treated as a local tax rate under section
469.177 and is not the levy of a governmental unit under chapters 276A and 473F.

The commissioner shall increase or decrease the preliminary or final rate for a year as
necessary to account for errors and tax base changes that affected a preliminary or final rate
for either of the two preceding years. Adjustments are allowed to the extent that the necessary
information is available to the commissioner at the time the rates for a year must be certified,
and for the following reasons:

(1) an erroneous report of taxable value by a local official;

(2) an erroneous calculation by the commissioner; and

(3) an increase or decrease in taxable value for commercial-industrial or seasonal
residential recreational property reported on the abstracts of tax lists submitted under section
275.29 that was not reported on the abstracts of assessment submitted under section 270C.89
for the same year.

The commissioner may, but need not, make adjustments if the total difference in the tax
levied for the year would be less than $100,000.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2019.
new text end

Sec. 8.

Minnesota Statutes 2017 Supplement, section 275.025, subdivision 2, is amended
to read:

Subd. 2.

Commercial-industrial tax capacity.

new text begin (a) new text end For the purposes of this section,
"commercial-industrial tax capacity" means the tax capacity of all taxable property classified
as class 3 or class 5(1) under section 273.13, excluding:

(1) the tax capacity attributable to the first $100,000 of market value of each parcel of
commercial-industrial property as defined under section 273.13, subdivision 24, clauses (1)
and (2);

(2) electric generation attached machinery under class 3; and

(3) property described in section 473.625.

deleted text begin County deleted text end new text begin (b) For purposes of this section, commercial-industrial tax capacity also includes
one-half of the net tax capacity of: tier III of class 1c, class 4c(1), and class 4c(3), clause
(2), property under section 273.13.
new text end

new text begin (c)new text end Commercial-industrial tax capacity amounts are not adjusted for the captured net tax
capacity of a tax increment financing district under section 469.177, subdivision 2, the net
tax capacity of transmission lines deducted from a local government's total net tax capacity
under section 273.425, or fiscal disparities contribution and distribution net tax capacities
under chapter 276A or 473F. For purposes of this subdivision, the procedures for determining
eligibility for tier 1 under section 273.13, subdivision 24, clauses (1) and (2), shall apply in
determining the portion of a property eligible to be considered within the first $100,000 of
market value.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2019.
new text end

Sec. 9.

Minnesota Statutes 2017 Supplement, section 275.025, subdivision 4, is amended
to read:

Subd. 4.

Apportionment and levy of state general tax.

The state general tax must be
levied by applying a uniform rate to all commercial-industrial tax capacity deleted text begin and a uniform
rate to all seasonal residential recreational tax capacitydeleted text end . On or before October 1 each year,
the commissioner of revenue shall certify the preliminary state general levy deleted text begin ratesdeleted text end new text begin ratenew text end to
each county auditor that must be used to prepare the notices of proposed property taxes for
taxes payable in the following year. By January 1 of each year, the commissioner shall
certify the final state general levy deleted text begin ratesdeleted text end new text begin ratenew text end to each county auditor that shall be used in
spreading taxes.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2019.
new text end

Sec. 10.

Minnesota Statutes 2017 Supplement, section 290A.03, subdivision 13, is amended
to read:

Subd. 13.

Property taxes payable.

"Property taxes payable" means the property tax
exclusive of special assessments, penalties, and interest payable on a claimant's homestead
after deductions made under sections 273.135, 273.1384, 273.1391, 273.42, subdivision 2,
and any other state paid property tax credits in any calendar year, and after any refund
claimed and allowable under section 290A.04, subdivision 2hnew text begin or 2knew text end , that is first payable in
the year that the property tax is payable. In the case of a claimant who makes ground lease
payments, "property taxes payable" includes the amount of the payments directly attributable
to the property taxes assessed against the parcel on which the house is located. Regardless
of the limitations in section 280A(c)(5) of the Internal Revenue Code, "property taxes
payable" must be apportioned or reduced for the use of a portion of the claimant's homestead
for a business purpose if the claimant deducts any business depreciation expenses for the
use of a portion of the homestead or deducts expenses under section 280A of the Internal
Revenue Code for a business operated in the claimant's homestead. For homesteads which
are manufactured homes as defined in section 273.125, subdivision 8, deleted text begin and for homesteads
which aredeleted text end new text begin including manufactured homes located in a manufactured home community owned
by a cooperative organized under chapter 308A or 308B, andnew text end park trailers taxed as
manufactured homes under section 168.012, subdivision 9, "property taxes payable" shall
also include 17 percent of the gross rent paid in the preceding year for the site on which the
homestead is located. When a homestead is owned by two or more persons as joint tenants
or tenants in common, such tenants shall determine between them which tenant may claim
the property taxes payable on the homestead. If they are unable to agree, the matter shall
be referred to the commissioner of revenue whose decision shall be final. Property taxes
are considered payable in the year prescribed by law for payment of the taxes.

In the case of a claim relating to "property taxes payable," the claimant must have owned
and occupied the homestead on January 2 of the year in which the tax is payable and (i) the
property must have been classified as homestead property pursuant to section 273.124, on
or before December 15 of the assessment year to which the "property taxes payable" relate;
or (ii) the claimant must provide documentation from the local assessor that application for
homestead classification has been made on or before December 15 of the year in which the
"property taxes payable" were payable and that the assessor has approved the application.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with claims based on taxes
payable in 2019.
new text end

Sec. 11.

Minnesota Statutes 2016, section 290A.04, subdivision 2h, is amended to read:

Subd. 2h.

Additional refund.

(a) If the gross property taxes payable on a homesteadnew text begin ,
net of any refund under subdivision 2k,new text end increase more than 12 percent over the property
taxes payable in the prior year on the same property that is owned and occupied by the same
owner on January 2 of both years, and the amount of that increase is $100 or more, a claimant
who is a homeowner shall be allowed an additional refund equal to 60 percent of the amount
of the increase over the greater of 12 percent of the prior year's property taxes payable or
$100. This subdivision shall not apply to any increase in the gross property taxes payable
attributable to improvements made to the homestead after the assessment date for the prior
year's taxes. This subdivision shall not apply to any increase in the gross property taxes
payable attributable to the termination of valuation exclusions under section 273.11,
subdivision 16.

The maximum refund allowed under this subdivision is $1,000.

(b) For purposes of this subdivision "gross property taxes payable" means property taxes
payable determined without regard to the refund allowed under this subdivision.

(c) In addition to the other proofs required by this chapter, each claimant under this
subdivision shall file with the property tax refund return a copy of the property tax statement
for taxes payable in the preceding year or other documents required by the commissioner.

(d) Upon request, the appropriate county official shall make available the names and
addresses of the property taxpayers who may be eligible for the additional property tax
refund under this section. The information shall be provided on a magnetic computer disk.
The county may recover its costs by charging the person requesting the information the
reasonable cost for preparing the data. The information may not be used for any purpose
other than for notifying the homeowner of potential eligibility and assisting the homeowner,
without charge, in preparing a refund claim.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with claims based on taxes
payable in 2019.
new text end

Sec. 12.

Minnesota Statutes 2016, section 290A.04, is amended by adding a subdivision
to read:

new text begin Subd. 2k. new text end

new text begin Additional refund for homeowners who are blind or disabled. new text end

new text begin (a) A
homeowner who is blind or disabled or whose spouse is blind or disabled is eligible for an
additional refund equal to 0.8 percent of the property's taxable market value, but not to
exceed $400. For the purposes of this subdivision, "blind or disabled" means a person who
is:
new text end

new text begin (1) blind as defined in section 256D.35;
new text end

new text begin (2) permanently and totally disabled; or
new text end

new text begin (3) the surviving spouse of a veteran who was permanently and totally disabled and who
homesteaded a property classified 1b under Minnesota Statutes 2016, section 273.13,
subdivision 22, for taxes payable in 2008, provided that the surviving spouse continues to
homestead the same property as in 2008.
new text end

new text begin (b) A person qualifies under paragraph (a), clause (2), only if the government agency
or income-providing source certifies that the person satisfies the disability requirements of
paragraph (d).
new text end

new text begin (c) The commissioner of revenue may require an applicant who has not previously
received a refund under this subdivision to submit whatever documentation is required to
determine eligibility under this subdivision. The application and any supplementary
information received from the property owner pursuant to this subdivision shall be subject
to chapter 270B. An applicant who has previously received refunds under this subdivision
is not required to submit proof of eligibility, except that the applicant may be required to
affirmatively state that no change in eligibility status has occurred.
new text end

new text begin (d) "Permanently and totally disabled" for the purpose of this subdivision means a
condition that is permanent in nature and totally incapacitates the person from working at
an occupation that brings the person an income.
new text end

new text begin (e) An applicant whose homestead qualified for class 1b under Minnesota Statutes 2016,
section 273.13, subdivision 22, for assessment year 2017 due to the applicant's disability is
automatically eligible for a refund under this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with claims based on taxes
payable in 2019.
new text end

Sec. 13. new text begin ADDITIONAL REFUND; TAXES PAYABLE IN 2019 ONLY.
new text end

new text begin (a) If the gross property taxes payable on a property wholly or partially classified as
4c(9) under Minnesota Statutes, section 273.13, subdivision 25, for taxes payable in 2018
increase more than two percent and more than $50 from taxes payable in 2018 to taxes
payable in 2019, and if the property is owned and occupied by the same person and used
for the same purpose in both assessment year 2017 and 2018, the owner shall be allowed a
refund equal to the amount of the increase over the greater of two percent of the 2018
property taxes payable or $50. This refund shall not apply to any increase in the gross
property taxes payable attributable to improvements made to the property after January 2,
2017. Applications for refunds and refund payments shall be made in the manner specified
under Minnesota Statutes, section 290A.04, subdivision 2h.
new text end

new text begin (b) For purposes of this section "gross property taxes payable" includes property taxes
payable on the portions of the property classified as class 1a, class 4c, and class 3a for taxes
payable in 2018, and the portions of the property classified as class 1 and class 3a for taxes
payable in 2019, including the state general levy.
new text end

new text begin (c) Each claimant under this section shall file with the property tax refund return a copy
of the property tax statement for taxes payable in the preceding year or other documents
required by the commissioner.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims based on taxes payable in
2019.
new text end

Sec. 14. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2016, sections 273.1315; and 275.025, subdivision 3, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2019.
new text end

ARTICLE 2

CONFORMING TECHNICAL CHANGES

Section 1.

Minnesota Statutes 2016, section 123A.455, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

"Split residential property parcel" means a parcel of real
estate that is located within the boundaries of more than one school district and that is
classified as residential property underdeleted text begin :
deleted text end

deleted text begin (1)deleted text end section 273.13, subdivision 22deleted text begin , paragraph (a) or (b);
deleted text end

deleted text begin (2) section 273.13, subdivision 25, paragraph (b), clause (1); or
deleted text end

deleted text begin (3) section 273.13, subdivision 25, paragraph (c)deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2019.
new text end

Sec. 2.

Minnesota Statutes 2016, section 126C.01, subdivision 3, is amended to read:

Subd. 3.

Referendum market value.

"Referendum market value" means the market
value of all taxable property, excluding property classified as class 2deleted text begin , 4c(4), or 4c(12)deleted text end under
section 273.13. deleted text begin The portion of class 2a property consisting of the house, garage, and
surrounding one acre of land of an agricultural homestead is included in referendum market
value.deleted text end For the purposes of this subdivision, in the case of deleted text begin class 1a, 1b, or 2adeleted text end propertynew text begin
qualifying for the exclusion under section 273.13, subdivision 35new text end , "market value" means
the value prior to the exclusion deleted text begin under section 273.13, subdivision 35deleted text end . Any class of property,
or any portion of a class of property, that is included in the definition of referendum market
value and that has a classification rate of less than one percent under section 273.13 shall
have a referendum market value equal to its market value times its classification rate,
multiplied by 100.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2019.
new text end

Sec. 3.

Minnesota Statutes 2017 Supplement, section 271.21, subdivision 2, is amended
to read:

Subd. 2.

Jurisdiction.

At the election of the taxpayer, the Small Claims Division shall
have jurisdiction only in the following matters:

(a) cases involving valuation, assessment, or taxation of real or personal property, if:

(i) the issue is a denial of a current year application for the homestead classification for
the taxpayer's property;

(ii) only one parcel is included in the petition, the entire parcel is classified as homestead
class deleted text begin 1a or 1bdeleted text end new text begin 1new text end under section 273.13, and the parcel contains no more than one dwelling
unit;

(iii) the deleted text begin entiredeleted text end property is classified as agricultural homestead class 2a deleted text begin or 1bdeleted text end new text begin , a portion
of which may be classified as homestead class 1,new text end under section 273.13; or

(iv) the assessor's estimated market value of the property included in the petition is less
than $300,000; or

(b) any case not involving valuation, assessment, or taxation of real and personal property
in which the amount in controversy does not exceed $15,000, including penalty and interest.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2019.
new text end

Sec. 4.

Minnesota Statutes 2016, section 273.11, subdivision 12, is amended to read:

Subd. 12.

Community land trusts.

(a) A community land trust, as defined under chapter
462A, is (i) a community-based nonprofit corporation organized under chapter 317A, which
qualifies for tax exempt status under 501(c)(3), or (ii) a "city" as defined in section 462C.02,
subdivision 6, which has received funding from the Minnesota housing finance agency for
purposes of the community land trust program. The Minnesota Housing Finance Agency
shall set the criteria for community land trusts.

(b) All occupants of a community land trust building must have a family income of less
than 80 percent of the greater of (1) the state median income, or (2) the area or county
median income, as most recently determined by the Department of Housing and Urban
Development. Before the community land trust can rent or sell a unit to an applicant, the
community land trust shall verify to the satisfaction of the administering agency or the city
that the family income of each person or family applying for a unit in the community land
trust building is within the income criteria provided in this paragraph. The administering
agency or the city shall verify to the satisfaction of the county assessor that the occupant
meets the income criteria under this paragraph. The property tax benefits under paragraph
(c) shall be granted only to property owned or rented by persons or families within the
qualifying income limits. The family income criteria and verification is only necessary at
the time of initial occupancy in the property.

(c) A unit which is owned by the occupant and used as a homestead by the occupant
qualifies for homestead treatment as class deleted text begin 1adeleted text end new text begin 1new text end under section 273.13, subdivision 22. A unit
which is rented by the occupant and used as a homestead by the occupant shall be class 4a
or deleted text begin 4bdeleted text end new text begin nonhomestead class 1 new text end propertydeleted text begin ,deleted text end under section 273.13deleted text begin , subdivision 25deleted text end , whichever is
applicable. Any remaining portion of the property not used for residential purposes shall
be classified by the assessor in the appropriate class based upon the use of that portion of
the property owned by the community land trust. The land upon which the building is located
shall be assessed at the same classification rate as the units within the building, provided
that if the building contains some units assessed as new text begin homestead new text end class deleted text begin 1adeleted text end new text begin 1new text end and some units
assessed as class 4a or deleted text begin 4bdeleted text end new text begin nonhomestead class 1new text end , the market value of the land will be assessed
in the same proportions as the value of the building.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2019.
new text end

Sec. 5.

Minnesota Statutes 2016, section 273.1115, subdivision 2, is amended to read:

Subd. 2.

Requirement.

Real estate is entitled to valuation under this section only if all
of the following requirements are met:

(1) the property is classified as class deleted text begin 1a, 1bdeleted text end new text begin 1new text end , 2a, or 2b property under section 273.13,
subdivisions 22 and 23, or the property is classified as class 2e under section 273.13,
subdivision 23, and immediately before being classified as class 2e was classified as class
deleted text begin 1a or 1bdeleted text end new text begin 1new text end ;

(2) the property is at least ten contiguous acres, when the application is filed under
subdivision 3;

(3) the owner has filed a completed application for deferment as specified in subdivision
3 with the county assessor in the county in which the property is located;

(4) there are no delinquent taxes on the property; and

(5) a covenant on the land restricts its use as provided in subdivision 3, clause (4).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2019.
new text end

Sec. 6.

Minnesota Statutes 2016, section 273.1231, subdivision 4, is amended to read:

Subd. 4.

Homestead property.

"Homestead property" means a homestead dwelling that
is classified as class deleted text begin 1a, 1b, or 2adeleted text end new text begin 1new text end property or a manufactured home or sectional home
used as a homestead and taxed pursuant to section 273.125, subdivision 8, paragraph (b),
(c), or (d).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2019.
new text end

Sec. 7.

Minnesota Statutes 2016, section 273.124, subdivision 17, is amended to read:

Subd. 17.

Owner-occupied motel property.

For purposes of class deleted text begin 1adeleted text end new text begin 1new text end determinations,
a homestead includes that portion of property defined as a motel under chapter 157, provided
that the person residing in the motel property is using that property as a homestead, is part
owner, and is actively engaged in the operation of the motel business. Homestead treatment
applies even if legal title to the property is in the name of a corporation or partnership and
not in the name of the person residing in the motel. The homestead is limited to that portion
of the motel actually occupied by the person.

A taxpayer meeting the requirements of this subdivision must notify the county assessor,
or the assessor who has the powers of the county assessor under section 273.063, in writing,
in order to qualify under this subdivision for deleted text begin 1adeleted text end homestead new text begin class 1 new text end classification.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2019.
new text end

Sec. 8.

Minnesota Statutes 2016, section 273.13, subdivision 35, is amended to read:

Subd. 35.

Homestead market value exclusion.

(a) Prior to determining a property's
net tax capacity under this section, new text begin homestead new text end property classified as class deleted text begin 1a or 1bdeleted text end new text begin 1new text end under
subdivision 22, deleted text begin and the portion of property classified as class 2a under subdivision 23
consisting of the house, garage, and surrounding one acre of land,deleted text end shall be eligible for a
market value exclusion as determined under paragraph (b).

(b) For a homestead valued at $76,000 or less, the exclusion is 40 percent of market
value. For a homestead valued between $76,000 and $413,800, the exclusion is $30,400
minus nine percent of the valuation over $76,000. For a homestead valued at $413,800 or
more, there is no valuation exclusion. The valuation exclusion shall be rounded to the nearest
whole dollar, and may not be less than zero.

(c) Any valuation exclusions or adjustments under section 273.11 shall be applied prior
to determining the amount of the valuation exclusion under this subdivision.

(d) In the case of a property that is classified as part homestead and part nonhomestead,
(i) the exclusion shall apply only to the homestead portion of the property, but (ii) if a portion
of a property is classified as nonhomestead solely because not all the owners occupy the
property, not all the owners have qualifying relatives occupying the property, or solely
because not all the spouses of owners occupy the property, the exclusion amount shall be
initially computed as if that nonhomestead portion were also in the homestead class and
then prorated to the owner-occupant's percentage of ownership. For the purpose of this
section, when an owner-occupant's spouse does not occupy the property, the percentage of
ownership for the owner-occupant spouse is one-half of the couple's ownership percentage.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2019.
new text end

Sec. 9.

Minnesota Statutes 2016, section 276A.01, subdivision 4, is amended to read:

Subd. 4.

Residential property.

"Residential property" means the following categories
of property, as defined in section 273.13, excluding that portion of the property that is
exempt from taxation pursuant to section 272.02:

(1) class deleted text begin 1a, 1b, and 2adeleted text end new text begin 1new text end propertydeleted text begin , limited to the homestead dwelling, a garage, and the
one acre of land on which the dwelling is locateddeleted text end ;

(2) that portion of class 3 property used exclusively for residential occupancy; and

(3) property valued and assessed new text begin as class 4a or 4d new text end under section 273.13, subdivision 25,
except for hospitals deleted text begin and property valued and assessed under section 273.13, subdivision 25,
paragraph (d), clauses (1) and (3)deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2019.
new text end

Sec. 10.

Minnesota Statutes 2016, section 473F.02, subdivision 4, is amended to read:

Subd. 4.

Residential property.

"Residential property" means the following categories
of property, as defined in section 273.13, excluding that portion of such property exempt
from taxation pursuant to section 272.02:

(a) class 1, deleted text begin 1b, 2a,deleted text end 4a, deleted text begin 4b, 4c,deleted text end and 4d property deleted text begin except resorts and property classified
under section 273.13, subdivision 25, paragraph (d), clause (3)deleted text end ; and

(b) that portion of class 3a, 3b, and 5 property used exclusively for residential occupancy.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2019.
new text end

Sec. 11. new text begin REVISOR'S INSTRUCTION.
new text end

new text begin In Minnesota Statutes and Minnesota Rules, the revisor of statutes shall make
cross-reference changes that are needed as a result of the repealers in this act. The revisor
shall make any necessary technical and grammatical changes to preserve the meaning of
the text.
new text end

Sec. 12. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2017 Supplement, sections 327C.01, subdivision 13; and 327C.16, new text end new text begin
are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2019.
new text end

HF 3276

Bill Text Versions

Current Version - as introduced

ARTICLE 1

RESIDENTIAL CLASSIFICATION REFORM

Section 1.

Subdivision 1.

General rule.

new text begin EFFECTIVE DATE. new text end

Sec. 2.

Subd. 3a.

Manufactured home park cooperative.

new text begin EFFECTIVE DATE. new text end

Sec. 3.

Subd. 22.

Class 1.

new text begin EFFECTIVE DATE. new text end

Sec. 4.

Subd. 23.

Class 2.

new text begin EFFECTIVE DATE. new text end

Sec. 5.

Subd. 25.

Class 4.

new text begin EFFECTIVE DATE. new text end

Sec. 6.

new text begin Subd. 36. new text end

new text begin Clarification of residential classification. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 7.

Subdivision 1.

Levy amount.

new text begin EFFECTIVE DATE. new text end

Sec. 8.

Subd. 2.

Commercial-industrial tax capacity.

new text begin EFFECTIVE DATE. new text end

Sec. 9.

Subd. 4.

Apportionment and levy of state general tax.

new text begin EFFECTIVE DATE. new text end

Sec. 10.

Subd. 13.

Property taxes payable.

new text begin EFFECTIVE DATE. new text end

Sec. 11.

Subd. 2h.

Additional refund.

new text begin EFFECTIVE DATE. new text end

Sec. 12.

new text begin Subd. 2k. new text end

new text begin Additional refund for homeowners who are blind or disabled. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 13. new text begin ADDITIONAL REFUND; TAXES PAYABLE IN 2019 ONLY.new text end

new text begin EFFECTIVE DATE. new text end

Sec. 14. new text begin REPEALER.new text end

new text begin EFFECTIVE DATE. new text end

ARTICLE 2

CONFORMING TECHNICAL CHANGES

Section 1.

Subdivision 1.

Definitions.

new text begin EFFECTIVE DATE. new text end

Sec. 2.

Subd. 3.

Referendum market value.

new text begin EFFECTIVE DATE. new text end

Sec. 3.

Subd. 2.

Jurisdiction.

new text begin EFFECTIVE DATE. new text end

Sec. 4.

Subd. 12.

Community land trusts.

new text begin EFFECTIVE DATE. new text end

Sec. 5.

Subd. 2.

Requirement.

new text begin EFFECTIVE DATE. new text end

Sec. 6.

Sec. 13. new text begin ADDITIONAL REFUND; TAXES PAYABLE IN 2019 ONLY.
new text end

Sec. 14. new text begin REPEALER.
new text end

Sec. 11. new text begin REVISOR'S INSTRUCTION.
new text end

Sec. 12. new text begin REPEALER.
new text end