Bill Text: MN SF2610 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Class 1c property requirements modification
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2012-04-24 - Referred to Taxes [SF2610 Detail]
Download: Minnesota-2011-SF2610-Introduced.html
1.2relating to property tax; modifying the requirements for class 1c property;
1.3amending Minnesota Statutes 2011 Supplement, section 273.13, subdivision 22.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. Minnesota Statutes 2011 Supplement, section 273.13, subdivision 22,
1.6is amended to read:
1.7 Subd. 22. Class 1. (a) Except as provided in subdivision 23 and in paragraphs (b)
1.8and (c), real estate which is residential and used for homestead purposes is class 1a. In the
1.9case of a duplex or triplex in which one of the units is used for homestead purposes, the
1.10entire property is deemed to be used for homestead purposes. The market value of class 1a
1.11property must be determined based upon the value of the house, garage, and land.
1.12 The first $500,000 of market value of class 1a property has a net class rate of
1.13one percent of its market value; and the market value of class 1a property that exceeds
1.14$500,000 has a class rate of 1.25 percent of its market value.
1.15 (b) Class 1b property includes homestead real estate or homestead manufactured
1.16homes used for the purposes of a homestead by:
1.17 (1) any person who is blind as defined in section256D.35 , or the blind person and
1.18the blind person's spouse;
1.19 (2) any person who is permanently and totally disabled or by the disabled person and
1.20the disabled person's spouse; or
1.21 (3) the surviving spouse of a permanently and totally disabled veteran homesteading
1.22a property classified under this paragraph for taxes payable in 2008.
1.23 Property is classified and assessed under clause (2) only if the government agency or
1.24income-providing source certifies, upon the request of the homestead occupant, that the
2.1homestead occupant satisfies the disability requirements of this paragraph, and that the
2.2property is not eligible for the valuation exclusion under subdivision 34.
2.3 Property is classified and assessed under paragraph (b) only if the commissioner
2.4of revenue or the county assessor certifies that the homestead occupant satisfies the
2.5requirements of this paragraph.
2.6 Permanently and totally disabled for the purpose of this subdivision means a
2.7condition which is permanent in nature and totally incapacitates the person from working
2.8at an occupation which brings the person an income. The first $50,000 market value of
2.9class 1b property has a net class rate of .45 percent of its market value. The remaining
2.10market value of class 1b property has a class rate using the rates for class 1a or class 2a
2.11property, whichever is appropriate, of similar market value.
2.12 (c) Class 1c property is commercial use real and personal property that abuts public
2.13water as defined in section103G.005, subdivision 15 , and is devoted to temporary and
2.14seasonal residential occupancy for recreational purposes but not devoted to commercial
2.15purposes for more than 250 days in the year preceding the year of assessment, and that
2.16includes a portion used as a homestead by the owner, which includes a dwelling occupied
2.17as a homestead by a shareholder of a corporation that owns the resort, a partner in a
2.18partnership that owns the resort, or a member of a limited liability company that owns the
2.19resorteven if, whether the title to the homestead is held by the corporation, partnership,
2.20or limited liability company, or by a shareholder of a corporation who owns the resort, a
2.21partner in a partnership who owns the resort, or a member of a limited liability company
2.22who owns the resort. For purposes of this paragraph, property is devoted to a commercial
2.23purpose on a specific day if any portion of the property, excluding the portion used
2.24exclusively as a homestead, is used for residential occupancy and a fee is charged for
2.25residential occupancy. Class 1c property must contain three or more rental units. A
2.26"rental unit" is defined as a cabin, condominium, townhouse, sleeping room, or individual
2.27camping site equipped with water and electrical hookups for recreational vehicles. Class
2.281c property must provide recreational activities such as the rental of ice fishing houses,
2.29boats and motors, snowmobiles, downhill or cross-country ski equipment; provide marina
2.30services, launch services, or guide services; or sell bait and fishing tackle. Any unit in
2.31which the right to use the property is transferred to an individual or entity by deeded
2.32interest, or the sale of shares or stock, no longer qualifies for class 1c even though it may
2.33remain available for rent. A camping pad offered for rent by a property that otherwise
2.34qualifies for class 1c is also class 1c, regardless of the term of the rental agreement, as
2.35long as the use of the camping pad does not exceed 250 days. If the same owner owns
2.36two separate parcels that are located in the same township, and one of those properties is
3.1classified as a class 1c property and the other would be eligible to be classified as a class 1c
3.2property if it was used as the homestead of the owner, both properties will be assessed as a
3.3single class 1c property; for purposes of this sentence, properties are deemed to be owned
3.4by the same owner if each of them is owned by a limited liability company, and both
3.5limited liability companies have the same membership. The portion of the property used
3.6as a homestead is class 1a property under paragraph (a). The remainder of the property is
3.7classified as follows: the first $600,000 of market value is tier I, the next $1,700,000 of
3.8market value is tier II, and any remaining market value is tier III. The class rates for class
3.91c are: tier I, 0.50 percent; tier II, 1.0 percent; and tier III, 1.25 percent. Owners of real and
3.10personal property devoted to temporary and seasonal residential occupancy for recreation
3.11purposes in which all or a portion of the property was devoted to commercial purposes for
3.12not more than 250 days in the year preceding the year of assessment desiring classification
3.13as class 1c, must submit a declaration to the assessor designating the cabins or units
3.14occupied for 250 days or less in the year preceding the year of assessment by January 15 of
3.15the assessment year. Those cabins or units and a proportionate share of the land on which
3.16they are located must be designated as class 1c as otherwise provided. The remainder of
3.17the cabins or units and a proportionate share of the land on which they are located must be
3.18designated as class 3a commercial. The owner of property desiring designation as class
3.191c property must provide guest registers or other records demonstrating that the units for
3.20which class 1c designation is sought were not occupied for more than 250 days in the
3.21year preceding the assessment if so requested. The portion of a property operated as a
3.22(1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other
3.23nonresidential facility operated on a commercial basis not directly related to temporary
3.24and seasonal residential occupancy for recreation purposes does not qualify for class 1c.
3.25 (d) Class 1d property includes structures that meet all of the following criteria:
3.26 (1) the structure is located on property that is classified as agricultural property under
3.27section273.13, subdivision 23 ;
3.28 (2) the structure is occupied exclusively by seasonal farm workers during the time
3.29when they work on that farm, and the occupants are not charged rent for the privilege of
3.30occupying the property, provided that use of the structure for storage of farm equipment
3.31and produce does not disqualify the property from classification under this paragraph;
3.32 (3) the structure meets all applicable health and safety requirements for the
3.33appropriate season; and
3.34 (4) the structure is not salable as residential property because it does not comply
3.35with local ordinances relating to location in relation to streets or roads.
4.1 The market value of class 1d property has the same class rates as class 1a property
4.2under paragraph (a).
4.3EFFECTIVE DATE.This section is effective for taxes payable in 2013 and
4.4thereafter.
1.3amending Minnesota Statutes 2011 Supplement, section 273.13, subdivision 22.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. Minnesota Statutes 2011 Supplement, section 273.13, subdivision 22,
1.6is amended to read:
1.7 Subd. 22. Class 1. (a) Except as provided in subdivision 23 and in paragraphs (b)
1.8and (c), real estate which is residential and used for homestead purposes is class 1a. In the
1.9case of a duplex or triplex in which one of the units is used for homestead purposes, the
1.10entire property is deemed to be used for homestead purposes. The market value of class 1a
1.11property must be determined based upon the value of the house, garage, and land.
1.12 The first $500,000 of market value of class 1a property has a net class rate of
1.13one percent of its market value; and the market value of class 1a property that exceeds
1.14$500,000 has a class rate of 1.25 percent of its market value.
1.15 (b) Class 1b property includes homestead real estate or homestead manufactured
1.16homes used for the purposes of a homestead by:
1.17 (1) any person who is blind as defined in section
1.18the blind person's spouse;
1.19 (2) any person who is permanently and totally disabled or by the disabled person and
1.20the disabled person's spouse; or
1.21 (3) the surviving spouse of a permanently and totally disabled veteran homesteading
1.22a property classified under this paragraph for taxes payable in 2008.
1.23 Property is classified and assessed under clause (2) only if the government agency or
1.24income-providing source certifies, upon the request of the homestead occupant, that the
2.1homestead occupant satisfies the disability requirements of this paragraph, and that the
2.2property is not eligible for the valuation exclusion under subdivision 34.
2.3 Property is classified and assessed under paragraph (b) only if the commissioner
2.4of revenue or the county assessor certifies that the homestead occupant satisfies the
2.5requirements of this paragraph.
2.6 Permanently and totally disabled for the purpose of this subdivision means a
2.7condition which is permanent in nature and totally incapacitates the person from working
2.8at an occupation which brings the person an income. The first $50,000 market value of
2.9class 1b property has a net class rate of .45 percent of its market value. The remaining
2.10market value of class 1b property has a class rate using the rates for class 1a or class 2a
2.11property, whichever is appropriate, of similar market value.
2.12 (c) Class 1c property is commercial use real and personal property that abuts public
2.13water as defined in section
2.14seasonal residential occupancy for recreational purposes but not devoted to commercial
2.15purposes for more than 250 days in the year preceding the year of assessment, and that
2.16includes a portion used as a homestead by the owner, which includes a dwelling occupied
2.17as a homestead by a shareholder of a corporation that owns the resort, a partner in a
2.18partnership that owns the resort, or a member of a limited liability company that owns the
2.19resort
2.20
2.21partner in a partnership who owns the resort, or a member of a limited liability company
2.22who owns the resort. For purposes of this paragraph, property is devoted to a commercial
2.23purpose on a specific day if any portion of the property, excluding the portion used
2.24exclusively as a homestead, is used for residential occupancy and a fee is charged for
2.25residential occupancy. Class 1c property must contain three or more rental units. A
2.26"rental unit" is defined as a cabin, condominium, townhouse, sleeping room, or individual
2.27camping site equipped with water and electrical hookups for recreational vehicles. Class
2.281c property must provide recreational activities such as the rental of ice fishing houses,
2.29boats and motors, snowmobiles, downhill or cross-country ski equipment; provide marina
2.30services, launch services, or guide services; or sell bait and fishing tackle. Any unit in
2.31which the right to use the property is transferred to an individual or entity by deeded
2.32interest, or the sale of shares or stock, no longer qualifies for class 1c even though it may
2.33remain available for rent. A camping pad offered for rent by a property that otherwise
2.34qualifies for class 1c is also class 1c, regardless of the term of the rental agreement, as
2.35long as the use of the camping pad does not exceed 250 days. If the same owner owns
2.36two separate parcels that are located in the same township, and one of those properties is
3.1classified as a class 1c property and the other would be eligible to be classified as a class 1c
3.2property if it was used as the homestead of the owner, both properties will be assessed as a
3.3single class 1c property; for purposes of this sentence, properties are deemed to be owned
3.4by the same owner if each of them is owned by a limited liability company, and both
3.5limited liability companies have the same membership. The portion of the property used
3.6as a homestead is class 1a property under paragraph (a). The remainder of the property is
3.7classified as follows: the first $600,000 of market value is tier I, the next $1,700,000 of
3.8market value is tier II, and any remaining market value is tier III. The class rates for class
3.91c are: tier I, 0.50 percent; tier II, 1.0 percent; and tier III, 1.25 percent. Owners of real and
3.10personal property devoted to temporary and seasonal residential occupancy for recreation
3.11purposes in which all or a portion of the property was devoted to commercial purposes for
3.12not more than 250 days in the year preceding the year of assessment desiring classification
3.13as class 1c, must submit a declaration to the assessor designating the cabins or units
3.14occupied for 250 days or less in the year preceding the year of assessment by January 15 of
3.15the assessment year. Those cabins or units and a proportionate share of the land on which
3.16they are located must be designated as class 1c as otherwise provided. The remainder of
3.17the cabins or units and a proportionate share of the land on which they are located must be
3.18designated as class 3a commercial. The owner of property desiring designation as class
3.191c property must provide guest registers or other records demonstrating that the units for
3.20which class 1c designation is sought were not occupied for more than 250 days in the
3.21year preceding the assessment if so requested. The portion of a property operated as a
3.22(1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other
3.23nonresidential facility operated on a commercial basis not directly related to temporary
3.24and seasonal residential occupancy for recreation purposes does not qualify for class 1c.
3.25 (d) Class 1d property includes structures that meet all of the following criteria:
3.26 (1) the structure is located on property that is classified as agricultural property under
3.27section
3.28 (2) the structure is occupied exclusively by seasonal farm workers during the time
3.29when they work on that farm, and the occupants are not charged rent for the privilege of
3.30occupying the property, provided that use of the structure for storage of farm equipment
3.31and produce does not disqualify the property from classification under this paragraph;
3.32 (3) the structure meets all applicable health and safety requirements for the
3.33appropriate season; and
3.34 (4) the structure is not salable as residential property because it does not comply
3.35with local ordinances relating to location in relation to streets or roads.
4.1 The market value of class 1d property has the same class rates as class 1a property
4.2under paragraph (a).
4.3EFFECTIVE DATE.This section is effective for taxes payable in 2013 and
4.4thereafter.
