2000 Minnesota Statutes

     273.13 Classification of property. 

    Subdivision 1.    How classified.  All real and personal 
 property subject to a general property tax and not subject to 
 any gross earnings or other in-lieu tax is hereby classified for 
 purposes of taxation as provided by this section. 

    Subd. 2. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 2a. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 3. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 4. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 5.  Repealed, Ex1971 c 31 art 22 s 5 

    Subd. 5a. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 6. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 6a. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 7. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 7a. Repealed, 1988 c 719 art 5 s 81 

    Subd. 7b. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 7c. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 7d. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 8.  Repealed, Ex1967 c 32 art 4 s 3 

    Subd. 8a. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 9. Repealed, 1988 c 719 art 5 s 81 

    Subd. 10. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 11. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 12. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 13.  Repealed, 1974 c 313 s 1 

    Subd. 14. Repealed, 1984 c 593 s 46 

    Subd. 14a. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 15.  Repealed, Ex1971 c 31 art 36 s 2 

    Subd. 15a. Repealed, 1988 c 719 art 5 s 81 

    Subd. 15b. Repealed, 1983 c 342 art 2 s 30 

    Subd. 16. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 17. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 17a. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 17b. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 17c. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 17d. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 18. Repealed, 1983 c 222 s 45 

    Subd. 19. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 20. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 21. Repealed, 1Sp1985 c 14 art 4 s 98 

    Subd. 21a.    Class rate.  In this section, wherever the 
 "class rate" of a class of property is specified without 
 qualification as to whether it is the property's "net class 
 rate" or its "gross class rate," the "net class rate" and "gross 
 class rate" of that property are the same as its "class rate." 

    Subd. 21b.    Tax capacity.  (a) Gross tax capacity 
 means the product of the appropriate gross class rates in this 
 section and market values. 

    (b) Net tax capacity means the product of the appropriate 
 net class rates in this section and market values. 

    Subd. 22.    Class 1.  (a) Except as provided in 
 subdivision 23, real estate which is residential and used for 
 homestead purposes is class 1.  The market value of class 1a 
 property must be determined based upon the value of the house, 
 garage, and land.  

    The first $76,000 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 $76,000 has a 
 class rate of 1.65 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 blind person, or the blind person and the blind 
 person's spouse; or 

    (2) any person, hereinafter referred to as "veteran," who: 

    (i) served in the active military or naval service of the 
 United States; and 

    (ii) is entitled to compensation under the laws and 
 regulations of the United States for permanent and total 
 service-connected disability due to the loss, or loss of use, by 
 reason of amputation, ankylosis, progressive muscular 
 dystrophies, or paralysis, of both lower extremities, such as to 
 preclude motion without the aid of braces, crutches, canes, or a 
 wheelchair; and 

    (iii) has acquired a special housing unit with special 
 fixtures or movable facilities made necessary by the nature of 
 the veteran's disability, or the surviving spouse of the 
 deceased veteran for as long as the surviving spouse retains the 
 special housing unit as a homestead; or 

    (3) any person who: 

    (i) is permanently and totally disabled and 

    (ii) receives 90 percent or more of total household income, 
 as defined in section 290A.03, subdivision 5, from 

    (A) aid from any state as a result of that disability; or 

    (B) supplemental security income for the disabled; or 

    (C) workers' compensation based on a finding of total and 
 permanent disability; or 

    (D) social security disability, including the amount of a 
 disability insurance benefit which is converted to an old age 
 insurance benefit and any subsequent cost of living increases; 
 or 

    (E) aid under the federal Railroad Retirement Act of 1937, 
 United States Code Annotated, title 45, section 228b(a)5; or 

    (F) a pension from any local government retirement fund 
 located in the state of Minnesota as a result of that 
 disability; or 

    (G) pension, annuity, or other income paid as a result of 
 that disability from a private pension or disability plan, 
 including employer, employee, union, and insurance plans and 

    (iii) has household income as defined in section 290A.03, 
 subdivision 5, of $50,000 or less; or 

    (4) any person who is permanently and totally disabled and 
 whose household income as defined in section 290A.03, 
 subdivision 5, is 275 percent or less of the federal poverty 
 level. 

    Property is classified and assessed under clause (4) 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.

    Property is classified and assessed pursuant to clause (1) 
 only if the commissioner of economic security certifies to the 
 assessor 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 $32,000 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 net class rate using the rates for class 1 or 
 class 2a property, whichever is appropriate, of similar market 
 value.  

    (c) Class 1c property is commercial use real property that 
 abuts a lakeshore line 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 or a partner in a partnership that owns the 
 resort, even if the title to the homestead is held by the 
 corporation or partnership.  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 has a class rate of one percent of total market value 
 with the following limitation:  the area of the property must 
 not exceed 100 feet of lakeshore footage for each cabin or 
 campsite located on the property up to a total of 800 feet and 
 500 feet in depth, measured away from the lakeshore.  If any 
 portion of the class 1c resort property is classified as class 
 4c under subdivision 25, the entire property must meet the 
 requirements of subdivision 25, paragraph (d), clause (1), to 
 qualify for class 1c treatment under this paragraph. 

    (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). 

    Subd. 23.    Class 2.  (a) Class 2a property is 
 agricultural land including any improvements that is 
 homesteaded.  The market value of the house and garage and 
 immediately surrounding one acre of land has the same class 
 rates as class 1a property under subdivision 22.  The value of 
 the remaining land including improvements up to $115,000 has a 
 net class rate of 0.35 percent of market value.  The value of 
 class 2a property over $115,000 of market value up to and 
 including $600,000 market value has a net class rate of 0.8 
 percent of market value.  The remaining property over $600,000 
 market value has a class rate of 1.20 percent of market value. 

    (b) Class 2b property is (1) real estate, rural in 
 character and used exclusively for growing trees for timber, 
 lumber, and wood and wood products; (2) real estate that is not 
 improved with a structure and is used exclusively for growing 
 trees for timber, lumber, and wood and wood products, if the 
 owner has participated or is participating in a cost-sharing 
 program for afforestation, reforestation, or timber stand 
 improvement on that particular property, administered or 
 coordinated by the commissioner of natural resources; (3) real 
 estate that is nonhomestead agricultural land; or (4) a landing 
 area or public access area of a privately owned public use 
 airport.  Class 2b property has a net class rate of 1.20 percent 
 of market value. 

    (c) Agricultural land as used in this section means 
 contiguous acreage of ten acres or more, used during the 
 preceding year for agricultural purposes.  "Agricultural 
 purposes" as used in this section means the raising or 
 cultivation of agricultural products or enrollment in the 
 Reinvest in Minnesota program under sections 103F.501 to 
 103F.535 or the federal Conservation Reserve Program as 
 contained in Public Law Number 99-198.  Contiguous acreage on 
 the same parcel, or contiguous acreage on an immediately 
 adjacent parcel under the same ownership, may also qualify as 
 agricultural land, but only if it is pasture, timber, waste, 
 unusable wild land, or land included in state or federal farm 
 programs.  Agricultural classification for property shall be 
 determined excluding the house, garage, and immediately 
 surrounding one acre of land, and shall not be based upon the 
 market value of any residential structures on the parcel or 
 contiguous parcels under the same ownership. 

    (d) Real estate, excluding the house, garage, and 
 immediately surrounding one acre of land, of less than ten acres 
 which is exclusively and intensively used for raising or 
 cultivating agricultural products, shall be considered as 
 agricultural land.  

    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. 

    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. 

    (e) 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 described in sections 18.44 to 18.61, fruit of all kinds, 
 vegetables, forage, grains, bees, and apiary products by the 
 owner; 

    (2) fish bred for sale and consumption if the fish breeding 
 occurs on land zoned for agricultural use; 

    (3) the commercial boarding of horses if the boarding is 
 done in conjunction with raising or cultivating 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 for use on a 
 shooting preserve licensed under section 97A.115; 

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

    (7) trees, grown for sale as a crop, and not sold for 
 timber, lumber, wood, or wood products. 

    (f) 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.  

    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.  

    (g) To qualify for classification under paragraph (b), 
 clause (4), a privately owned public use airport must be 
 licensed as a public airport under section 360.018.  For 
 purposes of paragraph (b), clause (4), "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 paragraph (b), clause 
 (4), 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 paragraph (b), clause (4).  For purposes of 
 paragraph (b), clause (4), "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.

    Subd. 24.    Class 3.  (a) Commercial and industrial 
 property and utility real and personal property is class 3a.  

    (1) Except as otherwise provided, each parcel of 
 commercial, industrial, or utility real property has a class 
 rate of 2.4 percent of the first tier of market value, and 3.4 
 percent of the remaining market value.  In the case of 
 contiguous parcels of property owned by the same person or 
 entity, only the value equal to the first-tier value of the 
 contiguous parcels qualifies for the reduced class rate, except 
 that contiguous parcels owned by the same person or entity shall 
 be eligible for the first-tier value class rate on each separate 
 business operated by the owner of the property, provided the 
 business is housed in a separate structure.  For the purposes of 
 this subdivision, the first tier means the first $150,000 of 
 market value.  Real property owned in fee by a utility for 
 transmission line right-of-way shall be classified at the class 
 rate for the higher tier.  

    For purposes of this subdivision, parcels are considered to 
 be contiguous even if they are separated from each other by a 
 road, street, waterway, or other similar intervening type of 
 property.  Connections between parcels that consist of power 
 lines or pipelines do not cause the parcels to be contiguous.  
 Property owners who have contiguous parcels of property that 
 constitute separate businesses that may qualify for the 
 first-tier class rate shall notify the assessor by July 1, for 
 treatment beginning in the following taxes payable year.  

    (2) Personal property that is:  (i) part of an electric 
 generation, transmission, or distribution system; or (ii) part 
 of a pipeline system transporting or distributing water, gas, 
 crude oil, or petroleum products; and (iii) not described in 
 clause (3), has a class rate as provided under clause (1) for 
 the first tier of market value and the remaining market value.  
 In the case of multiple parcels in one county that are owned by 
 one person or entity, only one first tier amount is eligible for 
 the reduced rate.  

    (3) The entire market value of personal property that is:  
 (i) tools, implements, and machinery of an electric generation, 
 transmission, or distribution system; (ii) tools, implements, 
 and machinery of a pipeline system transporting or distributing 
 water, gas, crude oil, or petroleum products; or (iii) the mains 
 and pipes used in the distribution of steam or hot or chilled 
 water for heating or cooling buildings, has a class rate as 
 provided under clause (1) for the remaining market value in 
 excess of the first tier. 

    (b) Employment property defined in section 469.166, during 
 the period provided in section 469.170, shall constitute class 
 3b.  The class rates for class 3b property are determined under 
 paragraph (a). 

    (c)(1) Subject to the limitations of clause (2), structures 
 which are (i) located on property classified as class 3a, (ii) 
 constructed under an initial building permit issued after 
 January 2, 1996, (iii) located in a transit zone as defined 
 under section 473.3915, subdivision 3, (iv) located within the 
 boundaries of a school district, and (v) not primarily used for 
 retail or transient lodging purposes, shall have a class rate 
 equal to the lesser of 2.975 percent or the class rate of the 
 second tier of the commercial property rate under paragraph (a) 
 on any portion of the market value that does not qualify for the 
 first tier class rate under paragraph (a).  As used in item (v), 
 a structure is primarily used for retail or transient lodging 
 purposes if over 50 percent of its square footage is used for 
 those purposes.  A class rate equal to the lesser of 2.975 
 percent or the class rate of the second tier of the commercial 
 property class rate under paragraph (a) shall also apply to 
 improvements to existing structures that meet the requirements 
 of items (i) to (v) if the improvements are constructed under an 
 initial building permit issued after January 2, 1996, even if 
 the remainder of the structure was constructed prior to January 
 2, 1996.  For the purposes of this paragraph, a structure shall 
 be considered to be located in a transit zone if any portion of 
 the structure lies within the zone.  If any property once 
 eligible for treatment under this paragraph ceases to remain 
 eligible due to revisions in transit zone boundaries, the 
 property shall continue to receive treatment under this 
 paragraph for a period of three years. 

    (2) This clause applies to any structure qualifying for the 
 transit zone reduced class rate under clause (1) on January 2, 
 1999, or any structure meeting any of the qualification criteria 
 in item (i) and otherwise qualifying for the transit zone 
 reduced class rate under clause (1).  Such a structure continues 
 to receive the transit zone reduced class rate until the 
 occurrence of one of the events in item (ii).  Property 
 qualifying under item (i)(D), that is located outside of a city 
 of the first class, qualifies for the transit zone reduced class 
 rate as provided in that item.  Property qualifying under item 
 (i)(E) qualifies for the transit zone reduced class rate as 
 provided in that item. 

    (i) A structure qualifies for the rate in this clause if it 
 is: 

    (A) property for which a building permit was issued before 
 December 31, 1998; or 

    (B) property for which a building permit was issued before 
 June 30, 2001, if: 

    (I) at least 50 percent of the land on which the structure 
 is to be built has been acquired or is the subject of signed 
 purchase agreements or signed options as of March 15, 1998, by 
 the entity that proposes construction of the project or an 
 affiliate of the entity; 

    (II) signed agreements have been entered into with one 
 entity or with affiliated entities to lease for the account of 
 the entity or affiliated entities at least 50 percent of the 
 square footage of the structure or the owner of the structure 
 will occupy at least 50 percent of the square footage of the 
 structure; and 

    (III) one of the following requirements is met: 

    the project proposer has submitted the completed data 
 portions of an environmental assessment worksheet by December 
 31, 1998; or 

    a notice of determination of adequacy of an environmental 
 impact statement has been published by April 1, 1999; or 

    an alternative urban areawide review has been completed by 
 April 1, 1999; or 

    (C) property for which a building permit is issued before 
 July 30, 1999, if: 

    (I) at least 50 percent of the land on which the structure 
 is to be built has been acquired or is the subject of signed 
 purchase agreements as of March 31, 1998, by the entity that 
 proposes construction of the project or an affiliate of the 
 entity; 

    (II) a signed agreement has been entered into between the 
 building developer and a tenant to lease for its own account at 
 least 200,000 square feet of space in the building; 

    (III) a signed letter of intent is entered into by July 1, 
 1998, between the building developer and the tenant to lease the 
 space for its own account; and 

    (IV) the environmental review process required by state law 
 was commenced by December 31, 1998; 

    (D) property for which an irrevocable letter of credit with 
 a housing and redevelopment authority was signed before December 
 31, 1998.  The structure shall receive the transit zone reduced 
 class rate during construction and for the duration of time that 
 the original tenants remain in the building.  Any unoccupied net 
 leasable square footage that is not leased within 36 months 
 after the certificate of occupancy has been issued for the 
 building shall not be eligible to receive the reduced class 
 rate.  This reduced class rate applies only if a qualifying 
 entity continues to own the property; 

    (E) property, located in a city of the first class, and for 
 which the building permits for the excavation, the parking ramp, 
 and the office tower were issued prior to April 1, 1999, shall 
 receive the reduced class rate during construction and for the 
 first five assessment years immediately following its initial 
 occupancy provided that, when completed, at least 25 percent of 
 the net leasable square footage must be occupied by a qualifying 
 entity each year during this time period.  In order to receive 
 the reduced class rate on the structure in any subsequent 
 assessment years, at least 50 percent of the rentable square 
 footage must be occupied by a qualifying entity.  This reduced 
 class rate applies only if a qualifying entity continues to own 
 the property. 

    (ii) A structure specified by this clause, other than a 
 structure qualifying under clause (i)(D) or (E), shall continue 
 to receive the transit zone reduced class rate until the 
 occurrence of one of the following events: 

    (A) if the structure upon initial occupancy will be owner 
 occupied by the entity initially constructing the structure or 
 an affiliated entity, the structure receives the reduced class 
 rate until the structure ceases to be at least 50 percent 
 occupied by the entity or an affiliated entity, provided, if the 
 portion of the structure occupied by that entity or an affiliate 
 of the entity is less than 85 percent, the transit zone class 
 rate reduction for the portion of structure not so occupied 
 terminates upon the leasing of such space to any nonaffiliated 
 entity; or 

    (B) if the structure is leased by a single entity or 
 affiliated entity at the time of initial occupancy, the 
 structure shall receive the reduced class rate until the 
 structure ceases to be at least 50 percent occupied by the 
 entity or an affiliated entity, provided, if the portion of the 
 structure occupied by that entity or an affiliate of the entity 
 is less than 85 percent, the transit zone class rate reduction 
 for the portion of structure not so occupied shall terminate 
 upon the leasing of such space to any nonaffiliated entity; or 

    (C) if the structure meets the criteria in item (i)(C), the 
 structure shall receive the reduced class rate until the 
 expiration of the initial lease term of the applicable tenants. 

    Percentages occupied or leased shall be determined based 
 upon net leasable square footage in the structure.  The assessor 
 shall allocate the value of the structure in the same fashion as 
 provided in the general law for portions of any structure 
 receiving and not receiving the transit tax class reduction as a 
 result of this clause. 

    (3) For purposes of paragraph (c), "qualifying entity" 
 means the entity owning the property on September 1, 2000, or an 
 affiliate of an entity that owned the property on September 1, 
 2000. 

    Subd. 24a.    Transit zone properties; personal property 
 tax.  (a) Notwithstanding the provisions of section 272.02 or 
 any other law to the contrary, a personal property tax is 
 imposed on the leasehold of a tenant of a structure described in 
 subdivision 24, paragraph (c), clause (2), item (i)(A) or (i)(C).

    This subdivision does not apply to a structure if either of 
 the following occur: 

    (1) the structure upon initial occupancy is owner-occupied 
 by the entity initially constructing the structure or an 
 affiliated entity; or 

    (2) the structure is leased by a single entity or 
 affiliated entity at the time of initial occupancy. 

    (b) The tax equals the amount obtained by multiplying the 
 sum of the local tax rates by: 

    (1) the estimated market value of the structure multiplied 
 by 

    (2) the square footage of the structure under lease that 
 qualifies under subdivision 24, paragraph (c), clause (1), 
 divided by 

    (3) the total square footage of the structure that 
 qualifies under subdivision 24, paragraph (c), clause (1), 
 multiplied by 

    (4) the difference between the class rate under subdivision 
 24, paragraph (a), for the second tier and the class rate under 
 subdivision 24, paragraph (c), for the second tier for the 
 qualifying parts of a structure. 

    (c) The tax under this subdivision does not apply to a 
 lease that: 

    (1) was executed before May 1, 1999; 

    (2) was entered according to a binding written agreement 
 executed before May 1, 1999; or 

    (3) is a lease entered under an expansion option contained 
 in a lease or binding written agreement qualifying under clause 
 (1) or (2). 

    (d) The tax imposed under this subdivision is a personal 
 property tax and is imposed on the lessee or tenant and not on 
 the structure or the real property.  The tax is an obligation of 
 the lessee or tenant and must be collected in the manner 
 provided for personal property taxes. 

    (e) The personal property tax applies only to a year in 
 which the leased structure qualifies for the transit zone class 
 rate. 

    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.  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.  Class 4a property 
 in a city with a population of 5,000 or less, that is (1) 
 located outside of the metropolitan area, as defined in section 
 473.121, subdivision 2, or outside any county contiguous to the 
 metropolitan area, and (2) whose city boundary is at least 15 
 miles from the boundary of any city with a population greater 
 than 5,000 has a class rate of 2.15 percent of market value.  
 All other class 4a property has a class rate of 2.4 percent of 
 market value.  For purposes of this paragraph, population has 
 the same meaning given in section 477A.011, subdivision 3. 

    (b) Class 4b includes: 

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

    (2) manufactured homes not classified under any other 
 provision; 

    (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; 

    (4) unimproved property that is classified residential as 
 determined under subdivision 33.  

    Class 4b property has a class rate of 1.65 percent of 
 market value.  

    (c) Class 4bb includes: 

    (1) nonhomestead residential real estate containing one 
 unit, other than seasonal residential, and recreational; and 

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

    Class 4bb has a class rate of 1.2 percent on the first 
 $76,000 of market value and a class rate of 1.65 percent of its 
 market value that exceeds $76,000. 

    Property that has been classified as seasonal recreational 
 residential 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. 

    (d) Class 4c property includes: 

    (1) except as provided in subdivision 22, paragraph (c), 
 real property devoted to temporary and seasonal residential 
 occupancy for recreation purposes, including real property 
 devoted to temporary and seasonal residential occupancy for 
 recreation purposes and not devoted to commercial purposes for 
 more than 250 days in the year preceding the year of 
 assessment.  For purposes of this clause, 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.  In order for a property to be 
 classified as class 4c, seasonal recreational residential for 
 commercial purposes, 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 (i) 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 (ii) 
 at least 20 percent of the annual gross receipts must be from 
 charges for rental of fish houses, boats and motors, 
 snowmobiles, downhill or cross-country ski equipment, or charges 
 for marina services, launch services, and guide services, or the 
 sale of bait and fishing tackle.  For purposes of this 
 determination, a paid booking of five or more nights shall be 
 counted as two bookings.  Class 4c also includes commercial use 
 real property used exclusively for recreational purposes in 
 conjunction with class 4c property 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 4c property with which it is used.  Class 4c 
 property classified in this clause also includes the remainder 
 of class 1c resorts provided that the entire property including 
 that portion of the property classified as class 1c also meets 
 the requirements for class 4c under this clause; otherwise the 
 entire property is classified as class 3.  Owners of real 
 property devoted to temporary and seasonal residential occupancy 
 for recreation purposes and all or a portion of which was 
 devoted to commercial purposes for not more than 250 days in the 
 year preceding the year of assessment desiring classification as 
 class 1c or 4c, 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 will be designated 
 class 1c or 4c 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 1c or 4c property must 
 provide guest registers or other records demonstrating that the 
 units for which class 1c or 4c 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, and (4) other 
 nonresidential facility operated on a commercial basis not 
 directly related to temporary and seasonal residential occupancy 
 for recreation purposes shall not qualify for class 1c or 4c; 

    (2) 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 property; 

    (3) real property up to a maximum of one acre of land owned 
 by a nonprofit community service oriented organization; provided 
 that the property is not used for a revenue-producing activity 
 for more than six days in the calendar year preceding the year 
 of assessment and the property is not used for residential 
 purposes on either a temporary or permanent basis.  For purposes 
 of this clause, 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), (10), or (19) of the Internal 
 Revenue Code of 1986, as amended through December 31, 1990.  For 
 purposes of this clause, "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 which is used for 
 revenue-producing activities for more than six days in the 
 calendar year preceding the year of assessment shall be assessed 
 as 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; 

    (4) post-secondary 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; 

    (5) manufactured home parks as defined in section 327.14, 
 subdivision 3; 

    (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; and 

    (7) a 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 hangar. 

    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. 

    Class 4c property has a class rate of 1.65 percent of 
 market value, except that (i) each parcel of seasonal 
 residential recreational property not used for commercial 
 purposes has the same class rates as class 4bb property, (ii) 
 manufactured home parks assessed under clause (5) have the same 
 class rate as class 4b property, and (iii) property described in 
 paragraph (d), clause (4), has the same class rate as the rate 
 applicable to the first tier of class 4bb nonhomestead 
 residential real estate under paragraph (c).  

    (e) Class 4d property is qualifying low-income rental 
 housing certified to the assessor by the housing finance agency 
 under sections 273.126 and 462A.071.  Class 4d includes land in 
 proportion to the total market value of the building that is 
 qualifying low-income rental housing.  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. 

    Class 4d property has a class rate of one percent of market 
 value.  

    Subd. 25a.    Elderly assisted living facility property. 
  "Elderly assisted living facility property" means residential 
 real estate containing more than one unit held for use by the 
 tenants or lessees as a residence for periods of 30 days or 
 more, along with community rooms, lounges, activity rooms, and 
 related facilities, designed to meet the housing, health, and 
 financial security needs of the elderly.  The real estate may be 
 owned by an individual, partnership, limited partnership, 
 for-profit corporation or nonprofit corporation exempt from 
 federal income taxation under United States Code, title 26, 
 section 501(c)(3) or related sections.  

    An admission or initiation fee may be required of tenants.  
 Monthly charges may include charges for the residential unit, 
 meals, housekeeping, utilities, social programs, a health care 
 alert system, or any combination of them.  On-site health care 
 may be provided by in-house staff or an outside health care 
 provider. 

    The assessor shall classify elderly assisted living 
 facility property, depending upon the property's ownership, 
 occupancy, and use.  The applicable class rates shall apply 
 based on its classification, if taxable. 

    Subd. 26. Repealed, 1987 c 268 art 6 s 53 

    Subd. 27. Repealed, 1987 c 268 art 6 s 53 

    Subd. 28. Repealed, 1987 c 268 art 6 s 53 

    Subd. 29. Repealed, 1987 c 268 art 6 s 53 

    Subd. 30. Repealed, 1988 c 719 art 5 s 81 

    Subd. 31.    Class 5.  Class 5 property includes:  

    (1) unmined iron ore and low-grade iron-bearing formations 
 as defined in section 273.14; and 

    (2) all other property not otherwise classified. 

    Class 5 property has a class rate of 3.4 percent of market 
 value. 

    Subd. 32. Repealed, 1998 c 389 art 2 s 21 

    Subd. 33.    Classification of unimproved property.  (a) 
 All real property that is not improved with a structure must be 
 classified according to its current use. 

    (b) Real property that is not improved with a structure and 
 for which there is no identifiable current use must be 
 classified according to its highest and best use permitted under 
 the local zoning ordinance.  If the ordinance permits more than 
 one use, the land must be classified according to the highest 
 and best use permitted under the ordinance.  If no such 
 ordinance exists, the assessor shall consider the most likely 
 potential use of the unimproved land based upon the use made of 
 surrounding land or land in proximity to the unimproved land. 

    HIST: (1993) 1913 c 483 s 1; 1923 c 140; 1933 c 132; 1933 c 
 359; 1937 c 365 s 1; Ex1937 c 86 s 1; 1939 c 48; 1941 c 436; 
 1941 c 437; 1941 c 438; 1943 c 172 s 1; 1943 c 648 s 1; 1945 c 
 274 s 1; 1945 c 527 s 1; 1947 c 537 s 1; 1949 c 723 s 1; 1951 c 
 510 s 1; 1951 c 585 s 1; 1953 c 358 s 1,2; 1953 c 400 s 1; 1953 
 c 747 s 1,2; 1955 c 751 s 1,2; 1957 c 866 s 1; 1957 c 959 s 1; 
 1959 c 40 s 1; 1959 c 338 s 1; 1959 c 541 s 1; 1959 c 562 s 3; 
 Ex1959 c 70 art 1 s 2; 1961 c 243 s 1; 1961 c 322 s 1; 1961 c 
 340 s 3; 1961 c 475 s 1; 1961 c 710 s 1; 1963 c 426 s 1; 1965 c 
 259 s 1; 1967 c 606 s 1; Ex1967 c 32 art 1 s 2-4, art 4 s 1, art 
 9 s 1,2; 1969 c 251 s 1; 1969 c 399 s 49; 1969 c 407 s 1; 1969 c 
 417 s 1; 1969 c 422 s 1,2; 1969 c 709 s 4,5; 1969 c 760 s 1; 
 1969 c 763 s 1; 1969 c 965 s 2; 1969 c 1126 s 2; 1969 c 1128 s 
 1,2; 1969 c 1132 s 1; 1969 c 1137 s 1; 1971 c 226 s 1; 1971 c 
 427 s 3-12,16,17; 1971 c 747 s 1; 1971 c 791 s 1; 1971 c 797 s 
 3,4; Ex1971 c 31 art 9 s 1; Ex1971 c 31 art 22 s 1,2,4,6,7,8; 
 Ex1971 c 31 art 36 s 1; 1973 c 355 s 1,2; 1973 c 456 s 1; 1973 c 
 492 s 14; 1973 c 582 s 3; 1973 c 590 s 1; 1973 c 650 art 14 s 
 1,2; 1973 c 650 art 20 s 3; 1973 c 650 art 24 s 3; 1973 c 774 s 
 1; 1974 c 545 s 3; 1974 c 556 s 16; 1975 c 46 s 3; 1975 c 339 s 
 9; 1975 c 359 s 23; 1975 c 376 s 1; 1975 c 395 s 1; 1975 c 437 
 art 1 s 25,27,28; 1976 c 2 s 96,159-161,170; 1976 c 181 s 2; 
 1976 c 245 s 1; 1977 c 319 s 1,2; 1977 c 347 s 43,44; 1977 c 423 
 art 3 s 5-8; 1978 c 767 s 7-11; 1979 c 303 art 2 s 11-17; art 10 
 s 5; 1979 c 334 art 1 s 25; 1980 c 437 s 5; 1980 c 562 s 1; 1980 
 c 607 art 2 s 7-15; art 4 s 4; 1981 c 188 s 1; 1981 c 356 s 248; 
 1981 c 365 s 9; 1Sp1981 c 1 art 2 s 7-11; art 5 s 2; 1Sp1981 c 3 
 s 1; 1Sp1981 c 4 art 2 s 27; 2Sp1981 c 1 s 6; 3Sp1981 c 1 art 1 
 s 2; 1982 c 523 art 6 s 1; art 14 s 1; art 23 s 2; 1982 c 642 s 
 9; 1983 c 216 art 1 s 43,44; 1983 c 222 s 11-13; 1983 c 342 art 
 2 s 9-18; art 8 s 1; 1984 c 502 art 3 s 9-14; art 7 s 1,2; 1984 
 c 522 s 2; 1984 c 593 s 22-28; 1984 c 654 art 5 s 58; 1985 c 248 
 s 70; 1985 c 300 s 6; 1Sp1985 c 14 art 3 s 5-12; art 4 s 45-56; 
 1986 c 444; 1Sp1986 c 1 art 4 s 18-21; 1987 c 268 art 5 s 4; art 
 6 s 18,20-23; 1987 c 291 s 208-209; 1987 c 384 art 1 s 25; 1988 
 c 719 art 5 s 13-19; 1989 c 277 art 2 s 28,29; 1989 c 304 s 137; 
 1Sp1989 c 1 art 2 s 1-8,11; 1990 c 480 art 7 s 7; 1990 c 604 art 
 3 s 16-19; 1991 c 249 s 31; 1991 c 291 art 1 s 20-25; 1992 c 363 
 art 1 s 12; 1992 c 511 art 2 s 17,18; art 4 s 4,5; 1993 c 224 
 art 1 s 27; 1993 c 375 art 3 s 16; art 5 s 23-26; 1994 c 416 art 
 1 s 18,19; 1994 c 483 s 1; 1994 c 587 art 5 s 10,11; 1995 c 264 
 art 3 s 9,10; 1996 c 471 art 3 s 10-12; 1997 c 231 art 1 s 6-10; 
 art 2 s 20,21; 3Sp1997 c 3 s 28; 1998 c 254 art 1 s 74; 1998 c 
 389 art 2 s 8-12; 1999 c 243 art 5 s 15-20; 1999 c 248 s 18; 
 1999 c 249 s 22; 2000 c 490 art 5 s 12,13