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Minnesota Legislature

Office of the Revisor of Statutes

Chapter 273

Section 273.11

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273.11 VALUATION OF PROPERTY.
    Subdivision 1. Generally. Except as provided in this section or section 273.17, subdivision
1
, all property shall be valued at its market value. The market value as determined pursuant to this
section shall be stated such that any amount under $100 is rounded up to $100 and any amount
exceeding $100 shall be rounded to the nearest $100. In estimating and determining such value,
the assessor shall not adopt a lower or different standard of value because the same is to serve
as a basis of taxation, nor shall the assessor adopt as a criterion of value the price for which
such property would sell at a forced sale, or in the aggregate with all the property in the town
or district; but the assessor shall value each article or description of property by itself, and at
such sum or price as the assessor believes the same to be fairly worth in money. The assessor
shall take into account the effect on the market value of property of environmental factors in
the vicinity of the property. In assessing any tract or lot of real property, the value of the land,
exclusive of structures and improvements, shall be determined, and also the value of all structures
and improvements thereon, and the aggregate value of the property, including all structures
and improvements, excluding the value of crops growing upon cultivated land. In valuing real
property upon which there is a mine or quarry, it shall be valued at such price as such property,
including the mine or quarry, would sell for at a fair, voluntary sale, for cash, if the material being
mined or quarried is not subject to taxation under section 298.015 and the mine or quarry is
not exempt from the general property tax under section 298.25. In valuing real property which
is vacant, platted property shall be assessed as provided in subdivision 14. All property, or the
use thereof, which is taxable under section 272.01, subdivision 2, or 273.19, shall be valued at
the market value of such property and not at the value of a leasehold estate in such property,
or at some lesser value than its market value.
    Subd. 1a. Limited market value. In the case of all property classified as agricultural
homestead or nonhomestead, residential homestead or nonhomestead, timber, or noncommercial
seasonal residential recreational, the assessor shall compare the value with the taxable portion of
the value determined in the preceding assessment.
For assessment years 2004, 2005, and 2006, the amount of the increase shall not exceed
the greater of (1) 15 percent of the value in the preceding assessment, or (2) 25 percent of the
difference between the current assessment and the preceding assessment.
For assessment year 2007, the amount of the increase shall not exceed the greater of (1) 15
percent of the value in the preceding assessment, or (2) 33 percent of the difference between the
current assessment and the preceding assessment.
For assessment year 2008, the amount of the increase shall not exceed the greater of (1) 15
percent of the value in the preceding assessment, or (2) 50 percent of the difference between the
current assessment and the preceding assessment.
This limitation shall not apply to increases in value due to improvements. For purposes of this
subdivision, the term "assessment" means the value prior to any exclusion under subdivision 16.
The provisions of this subdivision shall be in effect through assessment year 2008 as
provided in this subdivision.
For purposes of the assessment/sales ratio study conducted under section 127A.48, and the
computation of state aids paid under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and
477A, market values and net tax capacities determined under this subdivision and subdivision
16, shall be used.
    Subd. 2.[Repealed, 1979 c 303 art 2 s 38]
    Subd. 3.[Repealed, 1975 c 437 art 8 s 10]
    Subd. 4.[Repealed, 1976 c 345 s 3]
    Subd. 5. Boards of review and equalization. Notwithstanding any other provision of law to
the contrary, the limitation contained in subdivisions 1 and 1a 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.
    Subd. 6. Solar, wind, methane gas systems. For purposes of property taxation, the market
value of real and personal property installed prior to January 1, 1984, which is a solar, wind, or
agriculturally derived methane gas system used as a heating, cooling, or electric power source of a
building or structure shall be excluded from the market value of that building or structure if the
property is not used to provide energy for sale.
    Subd. 6a. Fire-safety sprinkler systems. For purposes of property taxation, the market
value of automatic fire-safety sprinkler systems installed in existing buildings after January 1,
1992, meeting the standards of the Minnesota Fire Code shall be excluded from the market
value of (1) existing multifamily 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 and (2)
existing real estate containing four or more contiguous residential units for use by customers of
the owner, such as hotels, motels, and lodging houses and (3) existing office buildings or mixed
use commercial-residential buildings, in which at least one story capable of occupancy is at
least 75 feet above the ground. The market value exclusion under this section shall expire if
the property is sold.
    Subd. 7.[Repealed, 1984 c 502 art 3 s 36]
    Subd. 8. Limited equity cooperative apartments. For the purposes of this subdivision, the
terms defined in this subdivision have the meanings given them.
A "limited equity cooperative" is a corporation organized under chapter 308A or 308B,
which has as its primary purpose the provision of housing and related services to its members
which meets one of the following criteria with respect to the income of its members: (1) a
minimum of 75 percent of members must have incomes at or less than 90 percent of area median
income, (2) a minimum of 40 percent of members must have incomes at or less than 60 percent
of area median income, or (3) a minimum of 20 percent of members must have incomes at or
less than 50 percent of area median income. For purposes of this clause, "member income" shall
mean the income of a member existing at the time the member acquires cooperative membership,
and median income shall mean the St. Paul-Minneapolis metropolitan area median income as
determined by the United States Department of Housing and Urban Development. It must also
meet the following requirements:
(a) The articles of incorporation set the sale price of occupancy entitling cooperative shares
or memberships at no more than a transfer value determined as provided in the articles. That
value may not exceed the sum of the following:
(1) the consideration paid for the membership or shares by the first occupant of the unit,
as shown in the records of the corporation;
(2) the fair market value, as shown in the records of the corporation, of any improvements to
the real property that were installed at the sole expense of the member with the prior approval
of the board of directors;
(3) accumulated interest, or an inflation allowance not to exceed the greater of a ten percent
annual noncompounded increase on the consideration paid for the membership or share by the
first occupant of the unit, or the amount that would have been paid on that consideration if interest
had been paid on it at the rate of the percentage increase in the revised Consumer Price Index
for All Urban Consumers for the Minneapolis-St. Paul metropolitan area prepared by the United
States Department of Labor, provided that the amount determined pursuant to this clause may not
exceed $500 for each year or fraction of a year the membership or share was owned; plus
(4) real property capital contributions shown in the records of the corporation to have been
paid by the transferor member and previous holders of the same membership, or of separate
memberships that had entitled occupancy to the unit of the member involved. These contributions
include contributions to a corporate reserve account the use of which is restricted to real property
improvements or acquisitions, contributions to the corporation which are used for real property
improvements or acquisitions, and the amount of principal amortized by the corporation on its
indebtedness due to the financing of real property acquisition or improvement or the averaging of
principal paid by the corporation over the term of its real property-related indebtedness.
(b) The articles of incorporation require that the board of directors limit the purchase price of
stock or membership interests for new member-occupants or resident shareholders to an amount
which does not exceed the transfer value for the membership or stock as defined in clause (a).
(c) The articles of incorporation require that the total distribution out of capital to a member
shall not exceed that transfer value.
(d) The articles of incorporation require that upon liquidation of the corporation any assets
remaining after retirement of corporate debts and distribution to members will be conveyed to
a charitable organization described in section 501(c)(3) of the Internal Revenue Code of 1986,
as amended through December 31, 1992, or a public agency.
A "limited equity cooperative apartment" is a dwelling unit owned by a limited equity
cooperative.
"Occupancy entitling cooperative share or membership" is the ownership interest in a
cooperative organization which entitles the holder to an exclusive right to occupy a dwelling unit
owned or leased by the cooperative.
For purposes of taxation, the assessor shall value a unit owned by a limited equity cooperative
at the lesser of its market value or the value determined by capitalizing the net operating income
of a comparable apartment operated on a rental basis at the capitalization rate used in valuing
comparable buildings that are not limited equity cooperatives. If a cooperative fails to operate in
accordance with the provisions of clauses (a) to (d), the property shall be subject to additional
property taxes in the amount of the difference between the taxes determined in accordance
with this subdivision for the last ten years that the property had been assessed pursuant to this
subdivision and the amount that would have been paid if the provisions of this subdivision had
not applied to it. The additional taxes, plus interest at the rate specified in section 549.09, shall be
extended against the property on the tax list for the current year.
    Subd. 9. Condominium property. Notwithstanding any other provision of law to the
contrary, for purposes of property taxation, condominium property shall be valued in accordance
with this subdivision.
(a) A structure or building that is initially constructed as condominiums shall be identified as
separate units after the filing of a declaration. The market value of the residential units in that
structure or building and included in the declaration shall be valued as condominiums.
(b) When 60 percent or more of the residential units in a structure or building being
converted to condominiums have been sold as condominiums including those units that the
converters retain for their own investment, the market value of the remaining residential units in
that structure or building which are included in the declaration shall be valued as condominiums.
If not all of the residential units in the structure or building are included in the declaration, the 60
percent factor shall apply to those in the declaration. A separate description shall be recognized
when a declaration is filed. For purposes of this clause, "retain" shall mean units that are rented
and completed units that are not available for sale.
(c) For purposes of this subdivision, a "sale" is defined as the date when the first written
document for the purchase or conveyance of the property is signed, unless that document is
revoked.
    Subd. 10.[Repealed, 1999 c 243 art 5 s 54]
    Subd. 11. Valuation of restored or preserved wetland. Wetlands restored by the federal,
state, or local government, or by a nonprofit organization, or preserved under the terms of a
temporary or perpetual easement by the federal or state government, must be valued by assessors
at their wetland value. "Wetland value" in this subdivision means the market value of wetlands in
any potential use in which the wetland character is not permanently altered. Wetland value shall
not reflect potential uses of the wetland that would violate the terms of any existing conservation
easement, or any one-time payment received by the wetland owner under the terms of a state or
federal conservation easement. Wetland value shall reflect any potential income consistent with
a property's wetland character, including but not limited to lease payments for hunting or other
recreational uses. The commissioner of revenue shall issue a bulletin advising assessors of the
provisions of this section by October 1, 1991.
For purposes of this subdivision, "wetlands" means lands transitional between terrestrial and
aquatic systems where the water table is usually at or near the surface or the land is covered by
shallow water. For purposes of this definition, wetlands must have the following three attributes:
(1) have a predominance of hydric soils;
(2) are inundated or saturated by surface or ground water at a frequency and duration
sufficient to support a prevalence of hydrophytic vegetation typically adapted for life in saturated
soil conditions; and
(3) under normal circumstances support a prevalence of such vegetation.
    Subd. 12. Neighborhood land trusts. (a) A neighborhood 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 neighborhood land trust program. The Minnesota Housing Finance Agency
shall set the criteria for neighborhood land trusts.
(b) All occupants of a neighborhood 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 neighborhood land trust can rent or sell a unit to an applicant, the neighborhood 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 neighborhood 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 1a 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 4b property, under
section 273.13, subdivision 25, 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 neighborhood land trust. The land upon
which the building is located shall be assessed at the same class rate as the units within the
building, provided that if the building contains some units assessed as class 1a and some units
assessed as class 4a or 4b, the market value of the land will be assessed in the same proportions as
the value of the building.
    Subd. 13. Valuation of income-producing property. Beginning with the 1995 assessment,
only accredited assessors or senior accredited assessors or other licensed assessors who have
successfully completed at least two income-producing property appraisal courses may value
income-producing property for ad valorem tax purposes. "Income-producing property" as used in
this subdivision means the taxable property in class 3a and 3b in section 273.13, subdivision 24;
class 4a and 4c, except for seasonal recreational property not used for commercial purposes; and
class 5 in section 273.13, subdivision 31. "Income-producing property" includes any property in
class 4e in section 273.13, subdivision 25, that would be income-producing property under the
definition in this subdivision if it were not substandard. "Income-producing property appraisal
course" as used in this subdivision means a course of study of approximately 30 instructional
hours, with a final comprehensive test. An assessor must successfully complete the final
examination for each of the two required courses. The course must be approved by the board of
assessors.
    Subd. 14. Vacant land platted before August 1, 2001. (a) All land platted before August
1, 2001, and not improved with a permanent structure, shall be assessed as provided in this
subdivision. The assessor shall determine the market value of each individual lot based upon the
highest and best use of the property as unplatted land. In establishing the market value of the
property, the assessor shall consider the sale price of the unplatted land or comparable sales of
unplatted land of similar use and similar availability of public utilities.
(b) The market value determined in paragraph (a) shall be increased as follows for each of
the three assessment years immediately following the final approval of the plat: one-third of the
difference between the property's unplatted market value as determined under paragraph (a) and
the market value based upon the highest and best use of the land as platted property shall be added
in each of the three subsequent assessment years.
(c) Any increase in market value after the first assessment year following the plat's
final approval shall be added to the property's market value in the next assessment year.
Notwithstanding paragraph (b), if construction begins before the expiration of the three years in
paragraph (b), that lot shall be eligible for revaluation in the next assessment year. The market
value of a platted lot determined under this subdivision shall not exceed the value of that lot based
upon the highest and best use of the property as platted land.
    Subd. 14a. Vacant land platted on or after August 1, 2001; located in metropolitan
counties. (a) All land platted on or after August 1, 2001, located in a metropolitan county, and
not improved with a permanent structure, shall be assessed as provided in this subdivision. The
assessor shall determine the market value of each individual lot based upon the highest and best
use of the property as unplatted land. In establishing the market value of the property, the assessor
shall consider the sale price of the unplatted land or comparable sales of unplatted land of similar
use and similar availability of public utilities.
(b) The market value determined in paragraph (a) shall be increased as follows for each of
the three assessment years immediately following the final approval of the plat: one-third of the
difference between the property's unplatted market value as determined under paragraph (a) and
the market value based upon the highest and best use of the land as platted property shall be added
in each of the three subsequent assessment years.
(c) Any increase in market value after the first assessment year following the plat's
final approval shall be added to the property's market value in the next assessment year.
Notwithstanding paragraph (b), if construction begins before the expiration of the three years in
paragraph (b), that lot shall be eligible for revaluation in the next assessment year. The market
value of a platted lot determined under this subdivision shall not exceed the value of that lot based
upon the highest and best use of the property as platted land.
(d) For purposes of this section, "metropolitan county" means the counties of Anoka, Carver,
Dakota, Hennepin, Ramsey, Scott, and Washington.
    Subd. 14b. Vacant land platted on or after August 1, 2001; located in nonmetropolitan
counties. (a) All land platted on or after August 1, 2001, located in a nonmetropolitan county, and
not improved with a permanent structure, shall be assessed as provided in this subdivision. The
assessor shall determine the market value of each individual lot based upon the highest and best
use of the property as unplatted land. In establishing the market value of the property, the assessor
shall consider the sale price of the unplatted land or comparable sales of unplatted land of similar
use and similar availability of public utilities.
(b) The market value determined in paragraph (a) shall be increased as follows for each of
the seven assessment years immediately following the final approval of the plat: one-seventh of
the difference between the property's unplatted market value as determined under paragraph (a)
and the market value based upon the highest and best use of the land as platted property shall be
added in each of the seven subsequent assessment years.
(c) Any increase in market value after the first assessment year following the plat's
final approval shall be added to the property's market value in the next assessment year.
Notwithstanding paragraph (b), if construction begins before the expiration of the seven years in
paragraph (b), that lot shall be eligible for revaluation in the next assessment year. The market
value of a platted lot determined under this subdivision shall not exceed the value of that lot based
upon the highest and best use of the property as platted land.
    Subd. 15. Vacant hospitals. In valuing a hospital, as defined in section 144.50, subdivision
2
, that is located outside of a metropolitan county, as defined in section 473.121, subdivision 4,
and that on the date of sale is vacant and not used for hospital purposes or for any other purpose,
the assessor's estimated market value for taxes levied in the year of the sale shall be no greater
than the sales price of the property, including both the land and the buildings, as adjusted for terms
of financing. If the sale is made later than December 15, the market value as determined under
this subdivision shall be used for taxes levied in the following year. This subdivision applies only
if the sales price of the property was determined under an arm's-length transaction.
    Subd. 16. Valuation exclusion for certain improvements. Improvements to homestead
property made before January 2, 2003, shall be fully or partially excluded from the value of the
property for assessment purposes provided that (1) the house is at least 45 years old at the time of
the improvement and (2) the assessor's estimated market value of the house on January 2 of the
current year is equal to or less than $400,000.
For purposes of determining this eligibility, "house" means land and buildings.
The age of a residence is the number of years since the original year of its construction.
In the case of a residence that is relocated, the relocation must be from a location within the
state and the only improvements eligible for exclusion under this subdivision are (1) those for
which building permits were issued to the homeowner after the residence was relocated to its
present site, and (2) those undertaken during or after the year the residence is initially occupied
by the homeowner, excluding any market value increase relating to basic improvements that are
necessary to install the residence on its foundation and connect it to utilities at its present site.
In the case of an owner-occupied duplex or triplex, the improvement is eligible regardless of
which portion of the property was improved.
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. If an
improvement was begun between January 2, 1992, and January 2, 1993, any value added from
that improvement for the January 1994 and subsequent assessments shall qualify for exclusion
under this subdivision provided that a building permit was obtained for the improvement between
January 2, 1992, and January 2, 1993. Whenever a building permit is issued for property
currently classified as homestead, the issuing jurisdiction shall notify the property owner of the
possibility of valuation exclusion under this subdivision. The assessor shall require an application,
including documentation of the age of the house from the owner, if unknown by the assessor. 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.
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 (1) a building permit was issued prior to the commencement of the
improvement if the jurisdiction requires a building permit, and (2) an application was completed.
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:
(1) 50 percent in the two subsequent assessment years if the qualifying value is equal to or
less than $10,000 market value; or
(2) 20 percent in the five subsequent assessment years if the qualifying value is greater
than $10,000 market value.
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 (1) the
property is sold, or (2) the property is reclassified to a class which does not qualify for treatment
under this subdivision. Improvements made by an occupant who is the purchaser of the property
under a conditional purchase contract do not qualify under this subdivision unless the seller of the
property is a governmental entity. The qualifying value of the property shall be computed based
upon the increase from that structure's market value as of January 2 preceding the acquisition
of the property by the governmental entity.
The total qualifying value for a homestead may not exceed $50,000. The total qualifying
value for a homestead with a house that is less than 70 years old may not exceed $25,000.
The term "qualifying value" means the increase in estimated market value resulting from the
improvement if the improvement occurs when the house is at least 70 years old, or one-half
of the increase in estimated market value resulting from the improvement otherwise. The
$25,000 and $50,000 maximum qualifying value under this subdivision may result from multiple
improvements to the homestead.
If 50 percent or more of the square footage of a structure is voluntarily razed or removed,
the valuation increase attributable to any subsequent improvements to the remaining structure
does not qualify for the exclusion under this subdivision. If a structure is unintentionally or
accidentally destroyed by a natural disaster, the property is eligible for an exclusion under this
subdivision provided that the structure was not completely destroyed. The qualifying value on
property destroyed by a natural disaster shall be computed based upon the increase from that
structure's market value as determined on January 2 of the year in which the disaster occurred.
A property receiving benefits under the homestead disaster provisions under section 273.123
is not disqualified from receiving an exclusion under this subdivision. If any combination of
improvements made to a structure after January 1, 1993, increases the size of the structure by 100
percent or more, the valuation increase attributable to the portion of the improvement that causes
the structure's size to exceed 100 percent does not qualify for exclusion under this subdivision.
    Subd. 17. Valuation of contaminated properties. (a) In determining the market value of
property containing contaminants, the assessor shall reduce the market value of the property by
the contamination value of the property. The contamination value is the amount of the market
value reduction that results from the presence of the contaminants, but it may not exceed the
cost of a reasonable response action plan or asbestos abatement plan or management program
for the property.
(b) For purposes of this subdivision, "asbestos abatement plan," "contaminants," and
"response action plan" have the meanings as used in sections 270.91 and 270.92.
    Subd. 18. Disclosure of valuation exclusion. No seller of real property shall sell or offer for
sale property that, for purposes of property taxation, has an exclusion from market value for home
improvements under subdivision 16, without disclosing to the buyer the existence of the excluded
valuation and informing the buyer that the exclusion will end upon the sale of the property and
that the property's estimated market value for property tax purposes will increase accordingly.
    Subd. 19. Valuation exclusion for improvements to certain business property. Property
classified under Minnesota Statutes, section 273.13, subdivision 24, which is eligible for the
preferred class rate on the market value up to $150,000, shall qualify for a valuation exclusion for
assessment purposes, provided all of the following conditions are met:
(1) the building must be at least 50 years old at the time of the improvement or damaged
by the 1997 floods;
(2) the building must be located in a city or town with a population of 10,000 or less that is
located outside the seven-county metropolitan area, as defined in section 473.121, subdivision 2;
(3) the total estimated market value of the land and buildings must be $100,000 or less prior
to the improvement and prior to the damage caused by the 1997 floods;
(4) the current year's estimated market value of the property must be equal to or less than the
property's estimated market value in each of the two previous years' assessments;
(5) a building permit must have been issued prior to the commencement of the improvement,
or if the building is located in a city or town which does not have a building permit process, the
property owner must notify the assessor prior to the commencement of the improvement;
(6) the property, including its improvements, has received no public assistance, grants or
financing except, that in the case of property damaged by the 1997 floods, the property is eligible
to the extent that the flood losses are not reimbursed by insurance or any public assistance,
grants, or financing;
(7) the property is not receiving a property tax abatement under section 469.1813; and
(8) the improvements are made after the effective date of Laws 1997, chapter 231, and prior
to January 1, 1999.
The assessor shall estimate the market value of the building in the assessment year
immediately following the year that (1) the building permit was taken out, or (2) the taxpayer
notified the assessor that an improvement was to be made. If the estimated market value of
the building has increased over the prior year's assessment, the assessor shall note the amount
of the increase on the property's record, and that amount shall be subtracted from the value of
the property in each year for five years after the improvement has been made, at which time
an amount equal to 20 percent of the excluded value shall be added back in each of the five
subsequent assessment years.
For any property, there can be no more than two improvements qualifying for exclusion
under this subdivision. The maximum amount of value that can be excluded from any property
under this subdivision is $50,000.
The assessor shall require an application, including documentation of the age of the building
from the owner, if unknown by the assessor. Applications must be received prior to July 1 of any
year in order to be effective for taxes payable in the following year.
For purposes of this subdivision, "population" has the same meaning given in Minnesota
Statutes, section 477A.011, subdivision 3.
    Subd. 20. Valuation exclusion for improvements to certain business property. Property
classified under section 273.13, subdivision 24, qualifies for a valuation exclusion for assessment
purposes, provided all of the following conditions are met:
(1) the building must have been damaged by the 2002 floods;
(2) the building must be located in a city or town with a population of 10,000 or less that is
located in a county in the area included in DR-1419;
(3) the total estimated market value of the land and buildings must be $150,000 or less
for assessment year 2002;
(4) a building permit must have been issued prior to the commencement of the improvement,
or if the building is located in a city or town which does not have a building permit process, the
property owner must notify the assessor prior to the commencement of the improvement;
(5) the property is not receiving a property tax abatement under section 469.1813; and
(6) the improvements are made before January 1, 2004.
The assessor shall estimate the market value of the building in the assessment year
immediately following the year that (1) the building permit was taken out, or (2) the taxpayer
notified the assessor that an improvement was to be made. If the estimated market value of the
building has increased over the 2002 assessment before any reassessment due to flood damage,
the assessor shall note the amount of the increase on the property's record, and that amount shall
be subtracted from the value of the property in each year for five years after the improvement has
been made. In each of the next five subsequent assessment years, an amount equal to 20 percent
of the value excluded in the fifth year for that improvement shall be added back.
The maximum amount of value that can be excluded for all improvements to any property
under this subdivision is $50,000.
The assessor shall require an application. Applications must be received by December 31,
2002, or December 31, 2003, in order to be effective for taxes payable in the following year.
For purposes of this subdivision, "population" has the meaning given in section 477A.011,
subdivision 3
.
    Subd. 21. Valuation reduction for homestead property damaged by mold. (a) The owner
of homestead property may apply in writing to the assessor for a reduction in the market value of
the property that has been damaged by mold. The notification must include the estimated cost to
cure the mold condition provided by a licensed contractor. The estimated cost must be at least
$20,000. Upon completion of the work, the owner must file an application on a form prescribed
by the commissioner of revenue, accompanied by a copy of the contractor's estimate.
(b) If the conditions in paragraph (a) are met, the county board must grant a reduction in the
market value of the homestead dwelling equal to the estimated cost to cure the mold condition. If
a property owner applies for a reduction under this subdivision between January 1 and June 30
of any year, the reduction applies for taxes payable in the following year. If a property owner
applies for a reduction under this subdivision between July 1 and December 31 of any year, the
reduction applies for taxes payable in the second following year.
(c) A denial of a reduction under this section by the county board may be appealed to the tax
court. If the county board takes no action on the application within 90 days after its receipt, it
is considered an approval.
(d) For purposes of subdivision 1a, in the assessment year following the assessment year
when a valuation reduction has occurred under this section, any market value added by the
assessor to the property resulting from curing the mold condition must be considered an increase
in value due to new construction.
    Subd. 22. Lead hazard market value reduction. Owners of property classified as class 1a,
1b, 1c, 2a, 4b, 4bb, or 4d under section 273.13 may apply for a lead hazard valuation reduction,
provided that the property is located in a city which has authorized valuation reductions under this
subdivision. A city that authorizes reductions under this subdivision must establish guidelines for
qualifying lead hazard reduction projects and must designate an agency within the city to issue
certificates of completion of qualifying projects. For purposes of this subdivision, "lead hazard
reduction" has the same meaning as in section 144.9501, subdivision 17.
The property owner must obtain a certificate from the agency stating (1) that the project has
been completed and (2) the total cost incurred by the owner, which must be at least $3,000.
Only projects originating after July 1, 2005, and completed before July 1, 2010, qualify for
a reduction under this subdivision. The property owner shall apply for the valuation reduction
to the assessor on a form prescribed by the assessor accompanied by a copy of the certificate of
completion from the agency.
A qualifying property is eligible for a one-year valuation reduction equal to the actual cost
incurred, to a maximum of $20,000. If a property owner applies to the assessor for the valuation
reduction under this subdivision between January 1 and June 30 of any year, the reduction
applies for taxes payable in the following year. If a property owner applies to the assessor for
the valuation reduction under this subdivision between July 1 and December 31, the reduction
applies for taxes payable in the second following year. For purposes of subdivision 1a, any
additional market value resulting from the lead hazard removal must be considered an increase
in value due to new construction.
    Subd. 23. First tier valuation limit; agricultural homestead property. (a) Beginning with
assessment year 2006, the commissioner of revenue shall annually certify the first tier limit for
agricultural homestead property as the product of (i) $600,000, and (ii) the ratio of the statewide
average taxable market value of agricultural property per acre of deeded farm land in the preceding
assessment year to the statewide average taxable market value of agricultural property per acre of
deeded farm land for assessment year 2004. The limit shall be rounded to the nearest $10,000.
(b) For the purposes of this subdivision, "agricultural property" means all class 2 property
under section 273.13, subdivision 23, except for (1) timberland, (2) a landing area or public access
area of a privately owned public use airport, and (3) property consisting of the house, garage, and
immediately surrounding one acre of land of an agricultural homestead.
(c) The commissioner shall certify the limit by January 2 of each assessment year, except
that for assessment year 2006 the commissioner shall certify the limit by June 1, 2006.
History: (1992) RL s 810; Ex1967 c 32 art 7 s 3; 1969 c 574 s 1; 1969 c 990 s 1; 1971 c 427
s 1; 1971 c 489 s 1; 1971 c 831 s 1; 1973 c 582 s 3; 1973 c 650 art 23 s 1-4; 1974 c 556 s 14;
1975 c 437 art 8 s 4-6; 1976 c 2 s 93; 1976 c 345 s 1; 1977 c 423 art 4 s 4; 1978 c 786 s 10,11;
1979 c 303 art 2 s 7; 1Sp1981 c 1 art 2 s 3,4; 1Sp1981 c 4 art 2 s 50; 1982 c 424 s 61,62; 1982 c
523 art 19 s 2; art 21 s 1; 1983 c 222 s 7; 1983 c 342 art 2 s 5-7; 1984 c 502 art 3 s 6; 1Sp1985 c
14 art 4 s 35; 1986 c 444; 1Sp1986 c 1 art 4 s 12; 1987 c 268 art 5 s 1; art 7 s 32; 1987 c 384 art
3 s 10; 1988 c 719 art 5 s 84; 1989 c 329 art 13 s 20; 1989 c 356 s 13; 1990 c 480 art 7 s 5; 1990
c 604 art 3 s 9; 1991 c 291 art 1 s 12; 1991 c 354 art 10 s 7,8; 1992 c 511 art 2 s 11,12; 1992 c
556 s 2,3; 1992 c 597 s 14; 1993 c 375 art 5 s 8-13; art 8 s 14; art 11 s 3; art 12 s 9; 1994 c 416
art 1 s 13; 1994 c 587 art 5 s 3-5; 1995 c 1 s 2; 1995 c 264 art 16 s 9; 1996 c 471 art 3 s 5; 1997 c
231 art 2 s 10,11,52; art 8 s 2; 1997 c 251 s 16; 1998 c 397 art 11 s 3; 1999 c 243 art 5 s 6,7;
1Sp2001 c 5 art 3 s 23-26; 1Sp2002 c 1 s 14; 2003 c 127 art 5 s 15; 1Sp2003 c 21 art 4 s 3; 2005
c 151 art 2 s 6; art 5 s 16; 1Sp2005 c 3 art 1 s 8-10; 2006 c 259 art 4 s 11