SF 3340

as introduced - 86th Legislature (2009 - 2010) Posted on 04/06/2010 03:36pm

A bill for an act
relating to taxation; extending the application of the homestead resort
classification; amending Minnesota Statutes 2008, section 273.13, subdivision
22.

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

Section 1.

Minnesota Statutes 2008, section 273.13, subdivision 22, is amended to read:

Subd. 22.

Class 1.

(a) Except as provided in subdivision 23 and in paragraphs (b)
and (c), real estate which is residential and used for homestead purposes is class 1a. In the
case of a duplex or triplex in which one of the units is used for homestead purposes, the
entire property is deemed to be used for homestead purposes. The market value of class 1a
property must be determined based upon the value of the house, garage, and land.

The first $500,000 of market value of class 1a property has a net class rate of
one percent of its market value; and the market value of class 1a property that exceeds
$500,000 has a class rate of 1.25 percent of its market value.

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

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

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

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

Property is classified and assessed under clause (2) only if the government agency or
income-providing source certifies, upon the request of the homestead occupant, that the
homestead occupant satisfies the disability requirements of this paragraph, and that the
property is not eligible for the valuation exclusion under subdivision 34.

Property is classified and assessed under paragraph (b) only if the commissioner
of revenue or the county assessor certifies that the homestead occupant satisfies the
requirements of this paragraph.

Permanently and totally disabled for the purpose of this subdivision means a
condition which is permanent in nature and totally incapacitates the person from working
at an occupation which brings the person an income. The first $50,000 market value of
class 1b property has a net class rate of .45 percent of its market value. The remaining
market value of class 1b property has a class rate using the rates for class 1a or class 2a
property, whichever is appropriate, of similar market value.

(c) Class 1c property is commercial use real and personal property that abuts public
water as defined in section 103G.005, subdivision 15, 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 clause, 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. new text begin If an owner of property that had been classified as
class 1c ceases to use that property as a homestead but retains ownership and operation of
the property as a resort, and begins to occupy a property located within five miles of, and
located in the same county as, the original class 1c property as a homestead resort, both
properties will be assessed as a single class 1c property. new text end The portion of the property used
as a homestead is class 1a property under paragraph (a). The remainder of the property is
classified as follows: the first $600,000 of market value is tier I, the next $1,700,000 of
market value is tier II, and any remaining market value is tier III. The class rates for class
1c are: tier I, 0.50 percent; tier II, 1.0 percent; and tier III, 1.25 percent. Owners of real and
personal property devoted to temporary and seasonal residential occupancy for recreation
purposes in which all or a portion of the property was devoted to commercial purposes for
not more than 250 days in the year preceding the year of assessment desiring classification
as class 1c, must submit a declaration to the assessor designating the cabins or units
occupied for 250 days or less in the year preceding the year of assessment by January 15 of
the assessment year. Those cabins or units and a proportionate share of the land on which
they are located must be designated as class 1c as otherwise provided. The remainder of
the cabins or units and a proportionate share of the land on which they are located must be
designated as class 3a commercial. The owner of property desiring designation as class
1c property must provide guest registers or other records demonstrating that the units for
which class 1c designation is sought were not occupied for more than 250 days in the
year preceding the assessment if so requested. The portion of a property operated as a
(1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other
nonresidential facility operated on a commercial basis not directly related to temporary
and seasonal residential occupancy for recreation purposes does not qualify for class 1c.

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

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

(2) the structure is occupied exclusively by seasonal farm workers during the time
when they work on that farm, and the occupants are not charged rent for the privilege of
occupying the property, provided that use of the structure for storage of farm equipment
and produce does not disqualify the property from classification under this paragraph;

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

(4) the structure is not salable as residential property because it does not comply
with local ordinances relating to location in relation to streets or roads.

The market value of class 1d property has the same class rates as class 1a property
under paragraph (a).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes levied in 2010, payable
in 2011, and thereafter.
new text end