1.1 	A bill for an act
1.2 	relating to taxation; property; increasing the residential and the agricultural 
1.3 	market value homestead credit maximums; restoring certain market value 
1.4 	credit losses to cities;amending Minnesota Statutes 2004, section 273.1384, 
1.5 	subdivision 2; Minnesota Statutes 2005 Supplement, section 273.1384, 
1.6 	subdivision 1; Laws 2005, First Special Session chapter 3, article 2, section 5.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. Minnesota Statutes 2005 Supplement, section 273.1384, subdivision 1, 
1.9 	is amended to read:
1.10 		Subdivision 1.Residential homestead market value credit. Each county auditor 
1.11 	shall determine a homestead credit for each class 1a, 1b, 1c, and 2a homestead property 
1.12 	within the county equal to 0.40.5 percent of the first $76,000 of market value of the 
1.13 	property minus .090.10 percent of the market value in excess of $76,000. The credit 
1.14 	amount may not be less than zero. In the case of an agricultural or resort homestead, only 
1.15 	the market value of the house, garage, and immediately surrounding one acre of land is 
1.16 	eligible in determining the property's homestead credit. In the case of a property which 
1.17 	is classified as part homestead and part nonhomestead, (i) the credit shall apply only to 
1.18 	the homestead portion of the property, but (ii) if a portion of a property is classified as 
1.19 	nonhomestead solely because not all the owners occupy the property, or solely because 
1.20 	both spouses do not occupy the property, the credit amount shall be initially computed as 
1.21 	if that nonhomestead portion were also in the homestead class and then prorated to the 
1.22 	owner-occupant's percentage of ownership or prorated to one-half if both spouses do 
1.23 	not occupy the property.

1.24 	EFFECTIVE DATE. This section is effective for taxes payable in 2007 and 
1.25 	thereafter.

2.1 	Sec. 2. Minnesota Statutes 2004, section 273.1384, subdivision 2, is amended to read:
2.2 		Subd. 2.Agricultural homestead market value credit. Property classified as 
2.3 	class 2a agricultural homestead is eligible for an agricultural credit. The credit is equal 
2.4 	to 0.30.4 percent of the first $115,000 of the property's market value. The credit under 
2.5 	this subdivision is limited to $345$460 for each homestead. The credit is reduced by 
2.6 	.05 percent of the market value in excess of $115,000, subject to a maximum reduction 
2.7 	of $115.

2.8 	EFFECTIVE DATE. This section is effective for taxes payable in 2007 and 
2.9 	thereafter.

2.10 	Sec. 3. Laws 2005, First Special Session chapter 3, article 2, section 5, is amended to 
2.11 	read:
2.12 	Sec. 5.  2005 AND 2006 CITY AID PAYMENTS.
2.13 	
2.14 	In 2005 and 2006, market value credit reimbursements for  each city payable under 
2.15 	Minnesota Statutes, section 273.1384,  are reduced by the dollar amount of the 2003 
2.16 	reduction in market  value credit reimbursements for that city due to Laws 2003,  First 
2.17 	Special Session chapter 21, article 5, section 12.  No  city's 2005 or 2006 market value 
2.18 	credit reimbursements are  reduced to less than zero under this section.  To the extent  
2.19 	sufficient information is available on each payment date, the  commissioner shall pay the 
2.20 	annual 2005 and 2006 market value  credit reimbursement amounts, after reduction under 
2.21 	this  section, to cities in equal installments on the dates specified  in Minnesota Statutes, 
2.22 	section 273.1384.  
2.23 	

2.24 	EFFECTIVE DATE. This section is effective the day following final enactment.