HF 1252

as introduced - 87th Legislature (2011 - 2012) Posted on 03/21/2011 10:12am

A bill for an act
relating to taxation; imposing an in-lieu tax on nonprofit hospitals; providing a
credit for charity care; proposing coding for new law in Minnesota Statutes,
chapter 272.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [272.0295] IN-LIEU TAX ON HOSPITALS.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin Notwithstanding sections 272.02, subdivisions 4 and
7, hospitals are required to pay the tax under this section.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section, the term:
new text end

new text begin (1) "hospital" means a hospital, as defined in section 144.50, subdivision 2, that is
exempt from property taxation under section 272.02, subdivision 4 or 7, but excludes a
hospital that is owned and operated by, or on behalf of, the federal or state government
or any unit of local government;
new text end

new text begin (2) "estimated market value" means the value determined by the assessor under
section 273.11, provided that the assessor's valuation is subject to the same appeals
procedures as properties classified under section 273.13;
new text end

new text begin (3) "tax capacity" means the tax capacity that would be determined if the property
were classified as class 3a commercial-industrial under section 273.13, subdivision 24; and
new text end

new text begin (4) "tax rate" for a taxing jurisdiction means the tax rate determined under section
275.08 and the state commercial-industrial tax rate under section 275.025, subdivision 4;
new text end

new text begin Subd. 3. new text end

new text begin Gross tax. new text end

new text begin The county auditor must compute a gross tax amount for each
property subject to taxation under this section equal to the sum of the amounts determined
by multiplying the tax capacity by the tax rate for each jurisdiction with authority to levy a
tax upon the property. For properties located in areas subject to chapter 276A or 473F, the
areawide tax rate determined under those chapters shall not apply in the calculation of
the gross tax.
new text end

new text begin Subd. 4. new text end

new text begin Charity care credit. new text end

new text begin (a) A hospital subject to taxation under this section
may apply for a credit against the tax imposed under this section, based on the amount
of charity care provided by the hospital in the year the property was assessed. Care or
other services the hospital is required to provide for a patient under the federal Emergency
Medical Treatment and Active Labor Act (EMTALA), United States Code, title 42, section
1395dd, is not eligible for the credit. The credit is equal to the hospital's choice of either
the amount: (1) that meets the requirements of Minnesota Rules, part 4650.0115, subparts
1 and 2, or (2) determined and calculated under the requirements of the federal Hill-Burton
Act, title XVI of the Public Health Services Act, as specified in Code of Federal
Regulations, title 42, sections 124.501 to 124.507; provided, however, that the credit may
not exceed the property's gross tax amount. A hospital must apply to the commissioner of
revenue for the credit prior to February 28 of the year that the tax is payable, on a form
prescribed by the commissioner and with the supporting documentation required by the
commissioner. By March 31 of each year, the commissioner of revenue must notify the
county auditor of the amount of charity care credit for each qualifying property.
new text end

new text begin (b) For purposes of this subdivision, a hospital may claim credit for charity care it
provided on or after July 1, 2011, on the same basis as charity care provided in 2012.
new text end

new text begin Subd. 5. new text end

new text begin Tax. new text end

new text begin The county auditor shall determine the property's net tax equal to the
gross tax minus the amount of approved charity care credit. The credit shall be applied as
a uniform reduction in each jurisdiction's gross tax amount. By April 15 of each year, each
property subject to the tax under this section must be notified of the amount of tax due by
a statement similar to the statement described in section 276.04.
new text end

new text begin Subd. 6. new text end

new text begin Payment of tax; collection. new text end

new text begin The tax determined under subdivision 5 must
be paid to the county treasurer at the time and in the manner provided for payment of
property taxes under section 279.01, subdivision 1, and, if unpaid, is subject to the same
enforcement, collection, and interest and penalties as delinquent real estate taxes. Except
to the extent inconsistent with this section, the provisions of sections 278.01 to 278.13 and
279.01 to 279.37 apply to the taxes imposed under this section, and for purposes of those
provisions, the taxes imposed under this section are considered real estate taxes.
new text end

new text begin Subd. 7. new text end

new text begin Distribution of revenues. new text end

new text begin Revenues from the taxes imposed under
subdivision 5 must be part of the settlement between the county treasurer and the county
auditor under section 276.09. The revenues attributable to the state general levy are
subject to the settlement requirements of section 276.112.
new text end

new text begin Subd. 8. new text end

new text begin Proposed property taxes. new text end

new text begin For the purposes of the notices required under
section 275.065, the gross tax rather than the net tax must be provided.
new text end

new text begin Subd. 9. new text end

new text begin Report. new text end

new text begin Information related to the tax imposed under this section must
be reported each year to the commissioner of revenue as part of the abstracts of tax lists
under section 275.29.
new text end

new text begin Subd. 10. new text end

new text begin Valuation; assessment year 2012. new text end

new text begin For assessment year 2012, the
assessor must review and recertify the valuation of each property subject to the tax
imposed under this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2013 and
thereafter.
new text end