Bill Text: MN HF877 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Valuation exclusion authorized for certain improvements to homestead and commercial-industrial property.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2011-04-04 - Author added Greene [HF877 Detail]
Download: Minnesota-2011-HF877-Introduced.html
1.2relating to taxation; authorizing valuation exclusion for certain improvements to
1.3homestead and commercial-industrial property;amending Minnesota Statutes
1.42010, section 273.11, subdivision 16, by adding a subdivision.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2010, section 273.11, subdivision 16, is amended to read:
1.7 Subd. 16. Valuation exclusion for certain improvements. (a) Improvements to
1.8homestead propertymade before January 2, 2003, shall be fully or partially excluded from
1.9the value of the property for assessment purposes provided that (1) the house is at least 45
1.10years old at the time of the improvement and (2) the assessor's estimated market value of
1.11the house on January 2 of the current year is equal to or less than $400,000.
1.12(b) For purposes of determining this eligibility, "house" means land and buildings.
1.13(c) The age of a residence is the number of years since the original year of its
1.14construction. In the case of a residence that is relocated, the relocation must be from a
1.15location within the state and the only improvements eligible for exclusion under this
1.16subdivision are (1) those for which building permits were issued to the homeowner after
1.17the residence was relocated to its present site, and (2) those undertaken during or after the
1.18year the residence is initially occupied by the homeowner, excluding any market value
1.19increase relating to basic improvements that are necessary to install the residence on its
1.20foundation and connect it to utilities at its present site. In the case of an owner-occupied
1.21duplex or triplex, the improvement is eligible regardless of which portion of the property
1.22was improved.
1.23(d) If the property lies in a jurisdiction which is subject to a building permit process,
1.24a building permit must have been issued prior to commencement of the improvement. The
2.1improvements for a single project or in any one year must add at least $5,000 to the value
2.2of the property to be eligible for exclusion under this subdivision. Only improvements to
2.3the structure which is the residence of the qualifying homesteader or construction of or
2.4improvements to no more than one two-car garage per residence qualify for the provisions
2.5of this subdivision.If an improvement was begun between January 2, 1992, and January
2.62, 1993, any value added from that improvement for the January 1994 and subsequent
2.7assessments shall qualify for exclusion under this subdivision provided that a building
2.8permit was obtained for the improvement between January 2, 1992, and January 2, 1993.
2.9Whenever a building permit is issued for property currently classified as homestead, the
2.10issuing jurisdiction shall notify the property owner of the possibility of valuation exclusion
2.11under this subdivision. The assessor shall require an application, including documentation
2.12of the age of the house from the owner, if unknown by the assessor. The application may
2.13be filed subsequent to the date of the building permit provided that the application must be
2.14filed within three years of the date the building permit was issued for the improvement. If
2.15the property lies in a jurisdiction which is not subject to a building permit process, the
2.16application must be filed within three years of the date the improvement was made. The
2.17assessor may require proof from the taxpayer of the date the improvement was made.
2.18Applications must be received prior to July 1 of any year in order to be effective for
2.19taxes payable in the following year.
2.20No exclusion for an improvement may be granted by a local board of review or
2.21county board of equalization, and no abatement of the taxes for qualifying improvements
2.22may be granted by the county board unless (1) a building permit was issued prior to the
2.23commencement of the improvement if the jurisdiction requires a building permit, and
2.24(2) an application was completed.
2.25(e) The assessor shall note the qualifying value of each improvement on the
2.26property's record, and the sum of those amounts shall be subtracted from the value of the
2.27property in each year for ten years after the improvement has been made. After ten years
2.28the amount of the qualifying value shall be added back as follows:
2.29(1) 50 percent in the two subsequent assessment years if the qualifying value is equal
2.30to or less than $10,000 market value; or
2.31(2) 20 percent in the five subsequent assessment years if the qualifying value is
2.32greater than $10,000 market value.
2.33(f) If an application is filed after the first assessment date at which an improvement
2.34could have been subject to the valuation exclusion under this subdivision, the ten-year
2.35period during which the value is subject to exclusion is reduced by the number of years
2.36that have elapsed since the property would have qualified initially. The valuation exclusion
3.1shall terminate whenever (1) the property is sold, or (2) the property is reclassified to a
3.2class which does not qualify for treatment under this subdivision. Improvements made by
3.3an occupant who is the purchaser of the property under a conditional purchase contract
3.4do not qualify under this subdivision unless the seller of the property is a governmental
3.5entity. The qualifying value of the property shall be computed based upon the increase
3.6from that structure's market value as of January 2 preceding the acquisition of the property
3.7by the governmental entity.
3.8(g) The total qualifying value for a homestead may not exceed $50,000. The total
3.9qualifying value for a homestead with a house that is less than 70 years old may not
3.10exceed $25,000. The term "qualifying value" means the increase in estimated market
3.11value resulting from the improvement if the improvement occurs when the house is at
3.12least 70 years old, or one-half of the increase in estimated market value resulting from the
3.13improvement otherwise. The $25,000 and $50,000 maximum qualifying value under this
3.14subdivision may result from multiple improvements to the homestead.
3.15(h) If 50 percent or more of the square footage of a structure is voluntarily razed
3.16or removed, the valuation increase attributable to any subsequent improvements to the
3.17remaining structure does not qualify for the exclusion under this subdivision. If a structure
3.18is unintentionally or accidentally destroyed by a natural disaster, the property is eligible
3.19for an exclusion under this subdivision provided that the structure was not completely
3.20destroyed. The qualifying value on property destroyed by a natural disaster shall be
3.21computed based upon the increase from that structure's market value as determined on
3.22January 2 of the year in which the disaster occurred. A property receiving benefits under
3.23the homestead disaster provisions under sections273.1231 to
273.1235 is not disqualified
3.24from receiving an exclusion under this subdivision. If any combination of improvements
3.25made to a structure after January 1,1993 2010, increases the size of the structure by 100
3.26percent or more, the valuation increase attributable to the portion of the improvement that
3.27causes the structure's size to exceed 100 percent does not qualify for exclusion under
3.28this subdivision.
3.29EFFECTIVE DATE.This section is effective for improvements initially subject to
3.30assessment on January 2, 2012, and thereafter.
3.31 Sec. 2. Minnesota Statutes 2010, section 273.11, is amended by adding a subdivision to
3.32read:
3.33 Subd. 24. Value exclusion for certain improvements. (a) Improvements to
3.34commercial or industrial property, not including utility property, shall be fully or partially
3.35excluded from the value of the property for assessment purposes provided that (1) the
4.1building is at least 45 years old at the time of the improvement and (2) the assessor's
4.2estimated market value of the property on January 2 of the current year is equal to or
4.3less than $2,000,000.
4.4(b) For purposes of determining this eligibility, "property" means land and buildings.
4.5(c) The age of a building is the number of years since the original year of its
4.6construction. In the case of a building that is relocated, the relocation must be from a
4.7location within the state and the only improvements eligible for exclusion under this
4.8subdivision are (1) those for which building permits were issued to the property owner
4.9after the building was relocated to its present site, and (2) those undertaken during or after
4.10the year the building is initially occupied by the property owner, excluding any market
4.11value increase relating to basic improvements that are necessary to install the building on
4.12its foundation and connect it to utilities at its present site.
4.13(d) If the property is located in a jurisdiction that is subject to a building permit
4.14process, a building permit must have been issued prior to commencement of the
4.15improvement. The improvements for a single project or in any one year must add at
4.16least 12 percent to the market value of the property to be eligible for exclusion under
4.17this subdivision. Whenever a building permit is issued for property currently classified
4.18as commercial-industrial, the issuing jurisdiction shall notify the property owner of the
4.19possibility of valuation exclusion under this subdivision. The assessor shall require an
4.20application and may require proof from the taxpayer of the date the improvement was
4.21made and the age of the building. The application may be filed after the date of the
4.22building permit, provided that the application must be filed within three years of the
4.23date the building permit was issued for the improvement. If the property is located in a
4.24jurisdiction that is not subject to a building permit process, the application must be filed
4.25within three years of the date the improvement was made. Applications must be received
4.26before July 1 of any year in order to be effective for taxes payable in the following year.
4.27No exclusion for an improvement may be granted by a local board of review or
4.28county board of equalization, and no abatement of the taxes for qualifying improvements
4.29may be granted by the county board unless (1) a building permit was issued before the
4.30commencement of the improvement if the jurisdiction requires a building permit, and
4.31(2) an application was completed.
4.32(e) The assessor shall note the qualifying value of each improvement on the
4.33property's record, and the sum of those amounts shall be subtracted from the value of the
4.34property in each year for ten years after the improvement has been made. After ten years
4.35the amount of the qualifying value shall be added back as follows:
5.1(1) 50 percent in the two subsequent assessment years if the qualifying value is equal
5.2to or less than $40,000 market value; or
5.3(2) 20 percent in the five subsequent assessment years if the qualifying value is
5.4greater than $40,000 market value.
5.5(f) If an application is filed after the first assessment date at which an improvement
5.6could have been subject to the valuation exclusion under this subdivision, the ten-year
5.7period during which the value is subject to exclusion is reduced by the number of years
5.8that have elapsed since the property would have qualified initially. The valuation
5.9exclusion terminates when (1) the property is sold, or (2) the property is reclassified to a
5.10class that does not qualify for treatment under this subdivision. Improvements made by
5.11an occupant who is the purchaser of the property under a conditional purchase contract
5.12do not qualify under this subdivision unless the seller of the property is a governmental
5.13entity. The qualifying value of the property shall be computed based upon the increase
5.14from that structure's market value as of January 2 preceding the acquisition of the property
5.15by the governmental entity.
5.16(g) The total qualifying value for a property under this subdivision may not exceed
5.17$250,000. The total qualifying value for a commercial or industrial property with a
5.18building that is less than 70 years old may not exceed $125,000. The term "qualifying
5.19value" means the increase in estimated market value resulting from the improvement if the
5.20improvement occurs when the building is at least 70 years old, or one-half of the increase
5.21in estimated market value resulting from the improvement otherwise. The $125,000 and
5.22$250,000 maximum qualifying value under this subdivision may result from multiple
5.23improvements to the building.
5.24(h) If 50 percent or more of the square footage of a structure is voluntarily razed
5.25or removed, the valuation increase attributable to any subsequent improvements to the
5.26remaining structure does not qualify for the exclusion under this subdivision. If a structure
5.27is unintentionally or accidentally destroyed by a natural disaster, the property is eligible
5.28for an exclusion under this subdivision provided that the structure was not completely
5.29destroyed. The qualifying value of a property destroyed by a natural disaster shall be
5.30computed based upon the increase from that structure's market value as determined on
5.31January 2 of the year in which the disaster occurred. A property receiving benefits under
5.32sections273.1231 to
273.1235 is not disqualified from receiving an exclusion under this
5.33subdivision. If any combination of improvements made to a structure after January 1,
5.342011, increases the size of the structure by 100 percent or more, the valuation increase
5.35attributable to the portion of the improvement that causes the structure's size to exceed
5.36100 percent does not qualify for exclusion under this subdivision.
6.1EFFECTIVE DATE.This section is effective for improvements initially subject to
6.2assessment on January 2, 2012, and thereafter.
1.3homestead and commercial-industrial property;amending Minnesota Statutes
1.42010, section 273.11, subdivision 16, by adding a subdivision.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2010, section 273.11, subdivision 16, is amended to read:
1.7 Subd. 16. Valuation exclusion for certain improvements. (a) Improvements to
1.8homestead property
1.9the value of the property for assessment purposes provided that (1) the house is at least 45
1.10years old at the time of the improvement and (2) the assessor's estimated market value of
1.11the house on January 2 of the current year is equal to or less than $400,000.
1.12(b) For purposes of determining this eligibility, "house" means land and buildings.
1.13(c) The age of a residence is the number of years since the original year of its
1.14construction. In the case of a residence that is relocated, the relocation must be from a
1.15location within the state and the only improvements eligible for exclusion under this
1.16subdivision are (1) those for which building permits were issued to the homeowner after
1.17the residence was relocated to its present site, and (2) those undertaken during or after the
1.18year the residence is initially occupied by the homeowner, excluding any market value
1.19increase relating to basic improvements that are necessary to install the residence on its
1.20foundation and connect it to utilities at its present site. In the case of an owner-occupied
1.21duplex or triplex, the improvement is eligible regardless of which portion of the property
1.22was improved.
1.23(d) If the property lies in a jurisdiction which is subject to a building permit process,
1.24a building permit must have been issued prior to commencement of the improvement. The
2.1improvements for a single project or in any one year must add at least $5,000 to the value
2.2of the property to be eligible for exclusion under this subdivision. Only improvements to
2.3the structure which is the residence of the qualifying homesteader or construction of or
2.4improvements to no more than one two-car garage per residence qualify for the provisions
2.5of this subdivision.
2.6
2.7
2.8
2.9Whenever a building permit is issued for property currently classified as homestead, the
2.10issuing jurisdiction shall notify the property owner of the possibility of valuation exclusion
2.11under this subdivision. The assessor shall require an application, including documentation
2.12of the age of the house from the owner, if unknown by the assessor. The application may
2.13be filed subsequent to the date of the building permit provided that the application must be
2.14filed within three years of the date the building permit was issued for the improvement. If
2.15the property lies in a jurisdiction which is not subject to a building permit process, the
2.16application must be filed within three years of the date the improvement was made. The
2.17assessor may require proof from the taxpayer of the date the improvement was made.
2.18Applications must be received prior to July 1 of any year in order to be effective for
2.19taxes payable in the following year.
2.20No exclusion for an improvement may be granted by a local board of review or
2.21county board of equalization, and no abatement of the taxes for qualifying improvements
2.22may be granted by the county board unless (1) a building permit was issued prior to the
2.23commencement of the improvement if the jurisdiction requires a building permit, and
2.24(2) an application was completed.
2.25(e) The assessor shall note the qualifying value of each improvement on the
2.26property's record, and the sum of those amounts shall be subtracted from the value of the
2.27property in each year for ten years after the improvement has been made. After ten years
2.28the amount of the qualifying value shall be added back as follows:
2.29(1) 50 percent in the two subsequent assessment years if the qualifying value is equal
2.30to or less than $10,000 market value; or
2.31(2) 20 percent in the five subsequent assessment years if the qualifying value is
2.32greater than $10,000 market value.
2.33(f) If an application is filed after the first assessment date at which an improvement
2.34could have been subject to the valuation exclusion under this subdivision, the ten-year
2.35period during which the value is subject to exclusion is reduced by the number of years
2.36that have elapsed since the property would have qualified initially. The valuation exclusion
3.1shall terminate whenever (1) the property is sold, or (2) the property is reclassified to a
3.2class which does not qualify for treatment under this subdivision. Improvements made by
3.3an occupant who is the purchaser of the property under a conditional purchase contract
3.4do not qualify under this subdivision unless the seller of the property is a governmental
3.5entity. The qualifying value of the property shall be computed based upon the increase
3.6from that structure's market value as of January 2 preceding the acquisition of the property
3.7by the governmental entity.
3.8(g) The total qualifying value for a homestead may not exceed $50,000. The total
3.9qualifying value for a homestead with a house that is less than 70 years old may not
3.10exceed $25,000. The term "qualifying value" means the increase in estimated market
3.11value resulting from the improvement if the improvement occurs when the house is at
3.12least 70 years old, or one-half of the increase in estimated market value resulting from the
3.13improvement otherwise. The $25,000 and $50,000 maximum qualifying value under this
3.14subdivision may result from multiple improvements to the homestead.
3.15(h) If 50 percent or more of the square footage of a structure is voluntarily razed
3.16or removed, the valuation increase attributable to any subsequent improvements to the
3.17remaining structure does not qualify for the exclusion under this subdivision. If a structure
3.18is unintentionally or accidentally destroyed by a natural disaster, the property is eligible
3.19for an exclusion under this subdivision provided that the structure was not completely
3.20destroyed. The qualifying value on property destroyed by a natural disaster shall be
3.21computed based upon the increase from that structure's market value as determined on
3.22January 2 of the year in which the disaster occurred. A property receiving benefits under
3.23the homestead disaster provisions under sections
3.24from receiving an exclusion under this subdivision. If any combination of improvements
3.25made to a structure after January 1,
3.26percent or more, the valuation increase attributable to the portion of the improvement that
3.27causes the structure's size to exceed 100 percent does not qualify for exclusion under
3.28this subdivision.
3.29EFFECTIVE DATE.This section is effective for improvements initially subject to
3.30assessment on January 2, 2012, and thereafter.
3.31 Sec. 2. Minnesota Statutes 2010, section 273.11, is amended by adding a subdivision to
3.32read:
3.33 Subd. 24. Value exclusion for certain improvements. (a) Improvements to
3.34commercial or industrial property, not including utility property, shall be fully or partially
3.35excluded from the value of the property for assessment purposes provided that (1) the
4.1building is at least 45 years old at the time of the improvement and (2) the assessor's
4.2estimated market value of the property on January 2 of the current year is equal to or
4.3less than $2,000,000.
4.4(b) For purposes of determining this eligibility, "property" means land and buildings.
4.5(c) The age of a building is the number of years since the original year of its
4.6construction. In the case of a building that is relocated, the relocation must be from a
4.7location within the state and the only improvements eligible for exclusion under this
4.8subdivision are (1) those for which building permits were issued to the property owner
4.9after the building was relocated to its present site, and (2) those undertaken during or after
4.10the year the building is initially occupied by the property owner, excluding any market
4.11value increase relating to basic improvements that are necessary to install the building on
4.12its foundation and connect it to utilities at its present site.
4.13(d) If the property is located in a jurisdiction that is subject to a building permit
4.14process, a building permit must have been issued prior to commencement of the
4.15improvement. The improvements for a single project or in any one year must add at
4.16least 12 percent to the market value of the property to be eligible for exclusion under
4.17this subdivision. Whenever a building permit is issued for property currently classified
4.18as commercial-industrial, the issuing jurisdiction shall notify the property owner of the
4.19possibility of valuation exclusion under this subdivision. The assessor shall require an
4.20application and may require proof from the taxpayer of the date the improvement was
4.21made and the age of the building. The application may be filed after the date of the
4.22building permit, provided that the application must be filed within three years of the
4.23date the building permit was issued for the improvement. If the property is located in a
4.24jurisdiction that is not subject to a building permit process, the application must be filed
4.25within three years of the date the improvement was made. Applications must be received
4.26before July 1 of any year in order to be effective for taxes payable in the following year.
4.27No exclusion for an improvement may be granted by a local board of review or
4.28county board of equalization, and no abatement of the taxes for qualifying improvements
4.29may be granted by the county board unless (1) a building permit was issued before the
4.30commencement of the improvement if the jurisdiction requires a building permit, and
4.31(2) an application was completed.
4.32(e) The assessor shall note the qualifying value of each improvement on the
4.33property's record, and the sum of those amounts shall be subtracted from the value of the
4.34property in each year for ten years after the improvement has been made. After ten years
4.35the amount of the qualifying value shall be added back as follows:
5.1(1) 50 percent in the two subsequent assessment years if the qualifying value is equal
5.2to or less than $40,000 market value; or
5.3(2) 20 percent in the five subsequent assessment years if the qualifying value is
5.4greater than $40,000 market value.
5.5(f) If an application is filed after the first assessment date at which an improvement
5.6could have been subject to the valuation exclusion under this subdivision, the ten-year
5.7period during which the value is subject to exclusion is reduced by the number of years
5.8that have elapsed since the property would have qualified initially. The valuation
5.9exclusion terminates when (1) the property is sold, or (2) the property is reclassified to a
5.10class that does not qualify for treatment under this subdivision. Improvements made by
5.11an occupant who is the purchaser of the property under a conditional purchase contract
5.12do not qualify under this subdivision unless the seller of the property is a governmental
5.13entity. The qualifying value of the property shall be computed based upon the increase
5.14from that structure's market value as of January 2 preceding the acquisition of the property
5.15by the governmental entity.
5.16(g) The total qualifying value for a property under this subdivision may not exceed
5.17$250,000. The total qualifying value for a commercial or industrial property with a
5.18building that is less than 70 years old may not exceed $125,000. The term "qualifying
5.19value" means the increase in estimated market value resulting from the improvement if the
5.20improvement occurs when the building is at least 70 years old, or one-half of the increase
5.21in estimated market value resulting from the improvement otherwise. The $125,000 and
5.22$250,000 maximum qualifying value under this subdivision may result from multiple
5.23improvements to the building.
5.24(h) If 50 percent or more of the square footage of a structure is voluntarily razed
5.25or removed, the valuation increase attributable to any subsequent improvements to the
5.26remaining structure does not qualify for the exclusion under this subdivision. If a structure
5.27is unintentionally or accidentally destroyed by a natural disaster, the property is eligible
5.28for an exclusion under this subdivision provided that the structure was not completely
5.29destroyed. The qualifying value of a property destroyed by a natural disaster shall be
5.30computed based upon the increase from that structure's market value as determined on
5.31January 2 of the year in which the disaster occurred. A property receiving benefits under
5.32sections
5.33subdivision. If any combination of improvements made to a structure after January 1,
5.342011, increases the size of the structure by 100 percent or more, the valuation increase
5.35attributable to the portion of the improvement that causes the structure's size to exceed
5.36100 percent does not qualify for exclusion under this subdivision.
6.1EFFECTIVE DATE.This section is effective for improvements initially subject to
6.2assessment on January 2, 2012, and thereafter.
