HF 492

as introduced - 87th Legislature (2011 - 2012) Posted on 02/14/2011 10:55am

A bill for an act
relating to taxation; property; providing property valuation freeze and an
exclusion for improvements made to purchased foreclosed properties; amending
Minnesota Statutes 2010, sections 273.11, subdivision 5, by adding a subdivision;
273.121, subdivision 1; 276.04, subdivision 2.

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

Section 1.

Minnesota Statutes 2010, section 273.11, subdivision 5, is amended to read:

Subd. 5.

Boards of review and equalization.

Notwithstanding any other provision
of law to the contrary, the limitation contained in subdivisions 1 deleted text begin and deleted text end new text begin , new text end 1a new text begin , and 24 new text end shall
also apply to the authority of the local board of review as provided in section 274.01,
the county board of equalization as provided in section 274.13, the State Board of
Equalization and the commissioner of revenue as provided in sections 270.11, subdivision
1, 270.12, 270C.92, and 270C.94.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for property taxes payable in 2012
and thereafter.
new text end

Sec. 2.

Minnesota Statutes 2010, section 273.11, is amended by adding a subdivision to
read:

new text begin Subd. 24. new text end

new text begin Purchase of foreclosed property; valuation freeze and exclusion. new text end

new text begin (a)
The taxable market value used for taxes levied in the current year on class 1 property as
defined in section 273.13, subdivision 22, and that portion of class 2a property as defined
in section 273.13, subdivision 23, consisting of the house, garage, and surrounding one
acre of land, may not exceed the property's taxable market value used for taxes levied in
the year the property was purchased, provided that all of the following conditions are
met. The property must:
new text end

new text begin (1) have been a foreclosed property at the time the property was purchased;
new text end

new text begin (2) be homesteaded;
new text end

new text begin (3) have an estimated market value at the time of the purchase that is equal to or
less than $300,000; and
new text end

new text begin (4) be in compliance with all local ordinances and codes within two years of the
date of purchase.
new text end

new text begin (b) The owner or owners must apply to the county assessor where the property is
located by August 1 of the levy year for which the valuation freeze under paragraph (a) is
first requested. The applicants must submit further information the county assessor deems
necessary to determine continued homestead status and eligibility under this subdivision.
new text end

new text begin (c) The valuation freeze allowed under this subdivision expires at the occurrence
of one of the activities listed in clause (1) or as determined in clause (2), whichever one
comes first:
new text end

new text begin (1) when the property loses its homestead status, is sold or transferred, or is not
in compliance with all local ordinances and codes within two years from the date of
the purchase of the property; or
new text end

new text begin (2) after ten assessment years from the date of the purchase of the property. Upon
expiration of the valuation freeze, the property must be assessed for the current assessment
year as otherwise provided by law.
new text end

new text begin (d) Improvements made to property qualifying under paragraph (a) are fully
excludable from the value of the property for assessment purposes.
new text end

new text begin (1) If the property lies in a jurisdiction which is subject to a building permit process,
a building permit must have been issued prior to commencement of the improvement. The
improvements for a single project or in any one year must add at least $5,000 to the value
of the property to be eligible for exclusion under this subdivision. Only improvements to
the structure which is the residence of the qualifying homesteader or construction of or
improvements to no more than one two-car garage per residence qualify for the provisions
of this subdivision. The assessor shall require an application. The application may be filed
subsequent to the date of the building permit provided that the application must be filed
within three years of the date the building permit was issued for the improvement. If
the property lies in a jurisdiction which is not subject to a building permit process, the
application must be filed within three years of the date the improvement was made. The
assessor may require proof from the taxpayer of the date the improvement was made.
Applications must be received prior to July 1 of any year in order to be effective for
taxes payable in the following year.
new text end

new text begin (2) No exclusion for an improvement may be granted by a local board of review or
county board of equalization, and no abatement of the taxes for qualifying improvements
may be granted by the county board unless (i) a building permit was issued prior to the
commencement of the improvement if the jurisdiction requires a building permit, and
(ii) an application was completed.
new text end

new text begin (3) The assessor shall note the qualifying value of each improvement on the
property's record, and the sum of those amounts shall be subtracted from the value of the
property in each year for ten years after the improvement has been made. After ten years,
the amount of the qualifying value shall be added back as follows:
new text end

new text begin (i) 50 percent in the two subsequent assessment years if the qualifying value is equal
to or less than $10,000 market value; or
new text end

new text begin (ii) 20 percent in the five subsequent assessment years if the qualifying value is
greater than $10,000 market value.
new text end

new text begin (4) If an application is filed after the first assessment date at which an improvement
could have been subject to the valuation exclusion under this subdivision, the ten-year
period during which the value is subject to exclusion is reduced by the number of years
that have elapsed since the property would have qualified initially. The valuation exclusion
shall terminate whenever the property loses its homestead status, is sold or transferred, or
if the property is not in compliance with all local ordinances and codes within two years
from the date of the purchase of the property.
new text end

new text begin (5) The total qualifying value for a homestead may not exceed $50,000. The term
"qualifying value" means the increase in estimated market value resulting from the
improvement. The $50,000 maximum qualifying value under this subdivision may result
from multiple improvements to the homestead.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for property taxes payable in 2012
and thereafter.
new text end

Sec. 3.

Minnesota Statutes 2010, section 273.121, subdivision 1, is amended to read:

Subdivision 1.

Notice.

Any county assessor or city assessor having the powers of
a county assessor, valuing or classifying taxable real property shall in each year notify
those persons whose property is to be included on the assessment roll that year if the
person's address is known to the assessor, otherwise the occupant of the property. The
notice shall be in writing and shall be sent by ordinary mail at least ten days before the
meeting of the local board of appeal and equalization under section 274.01 or the review
process established under section 274.13, subdivision 1c. Upon written request by the
owner of the property, the assessor may send the notice in electronic form or by electronic
mail instead of on paper or by ordinary mail. It shall contain: (1) the market value for
the current and prior assessment, (2) the limited market value under section 273.11,
subdivision 1a, for the current and prior assessment, (3) the qualifying amount of any
improvements under section 273.11, subdivision 16 new text begin or 24 new text end , for the current assessment, (4)
new text begin the amount of any market value increase prohibited under section 273.11, subdivision 24,
(5) new text end the market value subject to taxation after subtracting the amount of any qualifying
improvements new text begin under clause (3) or any valuation freeze amount under clause (4) new text end for the
current assessment, deleted text begin (5) deleted text end new text begin (6) new text end the classification of the property for the current and prior
assessment, deleted text begin (6) deleted text end new text begin (7) new text end a note that if the property is homestead and at least 45 years old,
improvements made to the property may be eligible for a valuation exclusion under
section 273.11, subdivision 16, deleted text begin (7) deleted text end new text begin (8) new text end the assessor's office address, and deleted text begin (8) deleted text end new text begin (9) new text end the dates,
places, and times set for the meetings of the local board of appeal and equalization, the
review process established under section 274.13, subdivision 1c, and the county board
of appeal and equalization. The commissioner of revenue shall specify the form of
the notice. The assessor shall attach to the assessment roll a statement that the notices
required by this section have been mailed. Any assessor who is not provided sufficient
funds from the assessor's governing body to provide such notices, may make application
to the commissioner of revenue to finance such notices. The commissioner of revenue
shall conduct an investigation and, if satisfied that the assessor does not have the necessary
funds, issue a certification to the commissioner of management and budget of the amount
necessary to provide such notices. The commissioner of management and budget shall
issue a warrant for such amount and shall deduct such amount from any state payment
to such county or municipality. The necessary funds to make such payments are hereby
appropriated. Failure to receive the notice shall in no way affect the validity of the
assessment, the resulting tax, the procedures of any board of review or equalization, or
the enforcement of delinquent taxes by statutory means.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for property taxes payable in 2012
and thereafter.
new text end

Sec. 4.

Minnesota Statutes 2010, section 276.04, subdivision 2, is amended to read:

Subd. 2.

Contents of tax statements.

(a) The treasurer shall provide for the
printing of the tax statements. The commissioner of revenue shall prescribe the form of
the property tax statement and its contents. The tax statement must not state or imply
that property tax credits are paid by the state of Minnesota. The statement must contain
a tabulated statement of the dollar amount due to each taxing authority and the amount
of the state tax from the parcel of real property for which a particular tax statement is
prepared. The dollar amounts attributable to the county, the state tax, the voter approved
school tax, the other local school tax, the township or municipality, and the total of
the metropolitan special taxing districts as defined in section 275.065, subdivision 3,
paragraph (i), must be separately stated. The amounts due all other special taxing districts,
if any, may be aggregated except that any levies made by the regional rail authorities in the
county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
398A shall be listed on a separate line directly under the appropriate county's levy. If the
county levy under this paragraph includes an amount for a lake improvement district as
defined under sections 103B.501 to 103B.581, the amount attributable for that purpose
must be separately stated from the remaining county levy amount. In the case of Ramsey
County, if the county levy under this paragraph includes an amount for public library
service under section 134.07, the amount attributable for that purpose may be separated
from the remaining county levy amount. The amount of the tax on homesteads qualifying
under the senior citizens' property tax deferral program under chapter 290B is the total
amount of property tax before subtraction of the deferred property tax amount. The
amount of the tax on contamination value imposed under sections 270.91 to 270.98, if any,
must also be separately stated. The dollar amounts, including the dollar amount of any
special assessments, may be rounded to the nearest even whole dollar. For purposes of this
section whole odd-numbered dollars may be adjusted to the next higher even-numbered
dollar. The amount of market value excluded under section 273.11, subdivision 16, if any,
must also be listed on the tax statement.

(b) The property tax statements for manufactured homes and sectional structures
taxed as personal property shall contain the same information that is required on the
tax statements for real property.

(c) Real and personal property tax statements must contain the following information
in the order given in this paragraph. The information must contain the current year tax
information in the right column with the corresponding information for the previous year
in a column on the left:

(1) the property's estimated market value under section 273.11, subdivision 1;

(2) the property's taxable market value after reductions under section 273.11,
subdivisions 1a deleted text begin and deleted text end new text begin , new text end 16 new text begin , and 24 new text end ;

(3) the property's gross tax, before credits;

(4) for homestead residential and agricultural properties, the credits under section
273.1384;

(5) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135;
273.1391; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of
credit received under section 273.135 must be separately stated and identified as "taconite
tax relief"; and

(6) the net tax payable in the manner required in paragraph (a).

(d) If the county uses envelopes for mailing property tax statements and if the county
agrees, a taxing district may include a notice with the property tax statement notifying
taxpayers when the taxing district will begin its budget deliberations for the current
year, and encouraging taxpayers to attend the hearings. If the county allows notices to
be included in the envelope containing the property tax statement, and if more than
one taxing district relative to a given property decides to include a notice with the tax
statement, the county treasurer or auditor must coordinate the process and may combine
the information on a single announcement.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for property taxes payable in 2012
and thereafter.
new text end