HF 4331

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/17/2022 02:20pm

A bill for an act
relating to taxation; property; requiring the state to pay the costs of property tax
judgments against state-assessed property; requiring reports; amending Minnesota
Statutes 2020, sections 273.372, by adding subdivisions; 278.12; 290.06, by adding
a subdivision.

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

Section 1.

Minnesota Statutes 2020, section 273.372, is amended by adding a subdivision
to read:

new text begin Subd. 7. new text end

new text begin Report on large judgments and settlements. new text end

new text begin The commissioner must produce
a report on any large judgment and court-stipulated settlement totaling $50,000 or more
concerning utility and railroad property for which the commissioner provided or
recommended values for assessment. The commissioner must provide a copy of the report
to the chairs and ranking minority members of the legislative committees with jurisdiction
over property taxation within 90 days of a final judgment or court-stipulated settlement.
The report must comply with the requirements of sections 3.195 and 3.197. The report must
include the following:
new text end

new text begin (1) a listing of the professional qualifications of the Department of Revenue staff who
assess utility and railroad property, including the licensing and certification qualifications
of those that made the initial valuation that resulted in the petition for relief and those
classified as supervisory staff who reviewed and approved the initial valuation;
new text end

new text begin (2) corrective actions taken by the commissioner to accurately assess and value utility
and railroad property, including but not limited to additional staff training, adjustments to
the internal review process for reaching final valuation assessment decisions, and, where
applicable, a comparison of the initial valuation assessment made by the commissioner and
valuation assessments made by state authorities on similar infrastructure in other states; and
new text end

new text begin (3) a full cost accounting of all staff time involved in defense of the initial assessment,
including but not limited to all department internal and external costs of legal counsel that
accrued during the actions related to reported judgments and court-stipulated settlements.
new text end

Sec. 2.

Minnesota Statutes 2020, section 273.372, is amended by adding a subdivision to
read:

new text begin Subd. 8. new text end

new text begin Annual report. new text end

new text begin The commissioner must produce an annual report on the tax
appeals it is a party to under this chapter and chapters 271 and 278. The commissioner must
provide a copy of the report to the chairs and ranking minority members of the legislative
committees with jurisdiction over property taxation no later than January 20 each year. The
report must comply with the requirements of sections 3.195 and 3.197. The report must
include the following:
new text end

new text begin (1) a list of cases resulting in judgments or court-stipulated settlements during the prior
calendar year;
new text end

new text begin (2) a list of active cases that remain unresolved;
new text end

new text begin (3) the cause of action for each appeal and the specific amounts in dispute for each case;
and
new text end

new text begin (4) the staff costs associated with each resolved tax court case, whether resolved by
judgment or court-stipulated settlement, including the legal counsel costs from other
departments and outside legal counsel, if applicable.
new text end

Sec. 3.

Minnesota Statutes 2020, section 278.12, is amended to read:

278.12 REFUNDS OF OVERPAYMENT.

new text begin (a) new text end If upon final determination the petitioner has paid more than the amount so determined
to be due, judgment shall be entered in favor of the petitioner for such excess deleted text begin , and deleted text end new text begin . new text end Upon
filing a copy thereof with the county auditor the auditor shall forthwith draw a warrant upon
the county treasurer for the payment thereof; provided that, with the consent of the petitioner,
the county auditor may, in lieu of drawing such warrant, issue to the petitioner a certificate
stating the amount of such judgment, which amount may be used to apply upon any taxes
due or to become due for the taxing district or districts whose taxes or assessments are
reduced, or their successors in the event of a reorganization or reincorporation of any such
taxing district. In the event the auditor shall issue a warrant for refund or certificates, the
amount thereof shall be charged to the state and other taxing districts in proportion to the
amount of their respective taxes included in the levy and deduct the same in the subsequent
distribution of any tax proceeds to the state or such taxing districts, and upon receiving any
such certificate in payment of other taxes, the amount thereof shall be distributed to the
state and other taxing districts in proportion to the amount of their respective taxes included
in the levy; provided that if in the judgment the levy of one or more of the districts be found
to be illegal, to the extent that the tax so levied is reduced on account of the illegal levies,
the amount to be charged back shall be charged to the districts and the amount thereof
deducted from any distributions thereafter made to them.

new text begin (b) In the case of a petition under section 273.372 if a petitioner receives a judgment
determining the petitioner has overpaid tax liabilities relative to property value determined
by the commissioner of revenue, the petitioner may file a copy of the judgment with the
commissioner and the commissioner must issue a warrant for the payment of the judgment.
At the time of filing the judgment, the petitioner must elect a method for payment. A
petitioner may elect for the payment to be either:
new text end

new text begin (1) applied to the petitioner's estimated tax liability under section 290.06, subdivision
41, in the following year; or
new text end

new text begin (2) refunded within 30 days of the petitioner's election. The commissioner of revenue
shall deduct the amount necessary to pay judgments under this clause from the total
appropriation to the Department of Revenue in the fiscal year after the judgments are paid.
new text end

Sec. 4.

Minnesota Statutes 2020, section 290.06, is amended by adding a subdivision to
read:

new text begin Subd. 41. new text end

new text begin State-assessed property judgment credit. new text end

new text begin (a) A taxpayer may take a credit
against the tax due under this chapter, including the tax imposed by sections 290.0921 and
290.0922, equal to the amount of warrant for the payment of the judgment under section
278.12.
new text end

new text begin (b) If the amount of credit the taxpayer is eligible to receive under this subdivision
exceeds the taxpayer's tax liability under this chapter, the commissioner must refund the
excess to the taxpayer. The commissioner of revenue shall deduct the amount necessary to
pay claims for refunds under this paragraph from the total appropriation to the Department
of Revenue in the fiscal year after the claims are paid.
new text end

Sec. 5. new text begin LOCAL GOVERNMENT GRANTS; REFUNDS.
new text end

new text begin (a) The commissioner of revenue shall issue grants to counties and other taxing districts
to cover the costs of refunds of overpayments by a taxpayer under Minnesota Statutes,
chapter 271 or section 278.12, if under the following conditions:
new text end

new text begin (1) between January 1, 2018, and December 31, 2021, a taxpayer petitioning under
Minnesota Statutes, section 273.372, received a judgment, or a court-stipulated settlement
determining the taxpayer had overpaid tax liabilities relative to property value determined
by the commissioner of revenue; and
new text end

new text begin (2) the commissioner did not previously issue a grant to cover a portion of the refund.
new text end

new text begin (b) An amount necessary to issue grants under this section is deducted from the total
amount appropriated to the Department of Revenue in fiscal year 2023 pursuant to Laws
2021, First Special Session chapter 12, article 1, section 14, subdivision 1.
new text end

new text begin (c) The grants are exempt from the requirements of Minnesota Statutes, section 16B.98,
and must be paid by August 15, 2022.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end