1.1 	A bill for an act
1.2 	relating to taxation; property; imposing back taxes on certain transfers of exempt 
1.3 	property;proposing coding for new law in Minnesota Statutes, chapter 273.
1.4 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.5 	Section 1. [273.167] TAX; TRANSFERS OF EXEMPT PROPERTY.
1.6 		Subdivision 1.Scope. This section applies to transfers of property that meet the 
1.7 	following conditions: 
1.8 	(1) the property was exempt from taxation under section 272.02, subdivision 4 or 7, 
1.9 	for at least one year during the three-year period before the transfer;
1.10 	(2) the transferring entity, or a predecessor to the entity, received the property under 
1.11 	a gift or a transfer for less than full consideration, and the entity that received the gift is 
1.12 	principally engaged in operating a hospital or other health care facility or both; and
1.13 	(3) the owner sells or transfers property for valuable consideration to a buyer for a 
1.14 	use or with the reasonable expectation that the property will be used for a purpose other 
1.15 	than as a hospital or other health care facility.
1.16 		Subd. 2.Imposition of tax. (a) Prior to a transfer of property subject to this section, 
1.17 	the transferor shall pay to the county treasurer the tax as determined under this section.
1.18 	(b) If the property will remain exempt from taxation after the transfer, a tax is 
1.19 	imposed equal to:
1.20 	(1) one percent of the lesser of (i) the most recent assessment of the property's value 
1.21 	under section 273.18 or (ii) the property's sale price; multiplied by
1.22 	(2) the lesser of (i) three or (ii) the number of the immediately preceding property 
1.23 	tax payable years the property was exempt from taxation.
2.1 	(c) If the property will become taxable after the transfer, a tax is imposed in an 
2.2 	amount determined by multiplying the most recent assessment of the property's market 
2.3 	value under section 273.18 by:
2.4 	(1) a class rate of 1.5 percent;
2.5 	(2) the current year tax rates for the city or town, county, school district, and each 
2.6 	special taxing district in which the property is located; and
2.7 	(3) the lesser of (i) three or (ii) the number of the immediately preceding property 
2.8 	tax payable years the property was exempt from taxation.
2.9 	(d) If a deed or other instrument conveys a parcel of land that is subject to tax under 
2.10 	this section, the county auditor shall not transfer the land in the auditor's official records, 
2.11 	and the county recorder shall not file and record the instrument, unless the instrument of 
2.12 	conveyance contains a certification by the county treasurer that the taxes due under this 
2.13 	section have been paid.
2.14 		Subd. 3.Distribution of proceeds. The county treasurer shall distribute the 
2.15 	proceeds of the tax under this section to each taxing district in proportion to its respective 
2.16 	tax rates. The treasurer shall include the payment with the next settlement payment under 
2.17 	section 276.09 or 276.111.

2.18 	EFFECTIVE DATE. This section is effective for transfers of property made after 
2.19 	March 1, 2006.