HF 1636

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; property; providing for 
  1.3             deferment of taxes of senior citizens who meet certain 
  1.4             income requirements; appropriating money; amending 
  1.5             Minnesota Statutes 1994, sections 275.065, subdivision 
  1.6             3; and 276.04, subdivision 2; proposing coding for new 
  1.7             law in Minnesota Statutes, chapter 273. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  [273.113] [DEFERMENT OF PROPERTY TAXES; AGE AND 
  1.10  INCOME REQUIREMENTS.] 
  1.11     Subdivision 1.  [PURPOSE.] Minnesota's system of ad valorem 
  1.12  property taxation does not adequately recognize the unique 
  1.13  financial circumstances of homestead property owned and occupied 
  1.14  by low-income senior citizens.  It is therefore declared to be 
  1.15  in the public interest of this state to stabilize tax burdens on 
  1.16  homestead property owned by qualifying low-income senior 
  1.17  citizens through a deferment of certain property taxes. 
  1.18     Subd. 2.  [CITATION.] This program shall be named the 
  1.19  "Senior Citizen's Property Tax Deferral Program." 
  1.20     Subd. 3.  [PROGRAM QUALIFICATIONS.] The qualifications for 
  1.21  the senior citizen's property tax deferral program are as 
  1.22  follows: 
  1.23     (1) the property must be owned and occupied by a person 65 
  1.24  years of age or older.  In the case of property owned by a 
  1.25  married couple in joint tenancy or tenancy in common, both of 
  1.26  the spouses must be at least 65 years old at the time the first 
  2.1   property tax deferral is granted; 
  2.2      (2) the total household income of the qualifying 
  2.3   homeowners, as defined in section 290A.03, subdivision 5, for 
  2.4   the calendar year preceding the year of the initial application 
  2.5   may not exceed $40,000; 
  2.6      (3) the homestead must have been owned and occupied as the 
  2.7   homestead of the qualifying homeowners for at least 15 years 
  2.8   prior to the year the initial application is filed; and 
  2.9      (4) there are no delinquent property taxes, penalties, or 
  2.10  interest on the homesteaded property. 
  2.11     Qualifying homestead property is defined as the dwelling 
  2.12  occupied as the taxpayer's principal residence and so much of 
  2.13  the land surrounding it, not exceeding one acre, as is 
  2.14  reasonably necessary for use of the dwelling as a home and any 
  2.15  other property used for purposes of a homestead as defined in 
  2.16  section 273.13, subdivisions 22 and 23.  The homestead may be 
  2.17  part of a multidwelling building and the land on which it is 
  2.18  built. 
  2.19     Subd. 4.  [INITIAL APPLICATION FOR DEFERMENT.] Taxpayers 
  2.20  meeting the program qualifications under subdivision 3 may apply 
  2.21  to the commissioner of revenue for the deferment of taxes.  
  2.22  Applications are due on or before July 1 for deferment of any of 
  2.23  the following year's property taxes.  A taxpayer may apply in 
  2.24  the year in which the taxpayer becomes 65 years old, provided 
  2.25  that no deferment of property taxes will be made until the 
  2.26  calendar year after the taxpayer becomes 65 years old.  The 
  2.27  application, which shall be prescribed by the commissioner of 
  2.28  revenue, shall include the following items and any other 
  2.29  information which the commissioner deems necessary: 
  2.30     (1) a certified copy of the birth certificate or other 
  2.31  acceptable proof of age of the owner or owners; 
  2.32     (2) the name, address, and social security number of the 
  2.33  owner or owners; 
  2.34     (3) a copy of the property tax statement for the current 
  2.35  payable year for the homesteaded property; 
  2.36     (4) the initial year of ownership and occupancy as their 
  3.1   homestead; 
  3.2      (5) the owner's household income for the previous calendar 
  3.3   year; and 
  3.4      (6) information on any mortgage loans secured by mortgages 
  3.5   on the property, including the current balance on the mortgage 
  3.6   loans and the number of years remaining on the mortgage loans. 
  3.7      Subd. 5.  [APPROVAL; RECORDING.] Upon approval of the 
  3.8   initial application under subdivision 4, the commissioner shall 
  3.9   notify the homeowner.  The commissioner shall record or file a 
  3.10  notice of the approved application in the office of the county 
  3.11  recorder, or county registrar of titles, whichever is 
  3.12  applicable, in the county where the qualifying property is 
  3.13  located.  The homeowner shall pay the recording or filing fees. 
  3.14     Subd. 6.  [ANNUAL CERTIFICATION BY TAXPAYER.] Annually on 
  3.15  or before June 1, a taxpayer whose initial application has been 
  3.16  approved under subdivision 5, shall complete the certification 
  3.17  form and return it to the commissioner of revenue.  The 
  3.18  certification must state whether or not the taxpayer wishes to 
  3.19  have property taxes deferred for the following year provided the 
  3.20  taxes exceed the maximum property tax amount under subdivision 
  3.21  7.  If the taxpayer does wish to have property taxes deferred, 
  3.22  the certification must state the homeowner's total household 
  3.23  income for the previous calendar year and any other information 
  3.24  which the commissioner deems necessary.  
  3.25     Subd. 7.  [DETERMINATION OF APPLICANT'S MAXIMUM PROPERTY 
  3.26  TAX AMOUNT AND DEFERRED PROPERTY TAX AMOUNT.] The commissioner 
  3.27  shall annually determine the qualifying homeowner's "maximum 
  3.28  property tax amount."  The amount calculated for taxes payable 
  3.29  in the following year is equal to four percent of the 
  3.30  homeowner's total household income for the previous calendar 
  3.31  year.  No tax may be deferred for any homeowner whose total 
  3.32  household income for the previous year exceeds $40,000.  On or 
  3.33  before August 1 the commissioner shall certify the maximum 
  3.34  property tax amount to the county auditor of the county in which 
  3.35  the qualifying homestead is located.  The difference between the 
  3.36  maximum property tax amount and the total amount of property 
  4.1   taxes levied upon the qualifying homestead by all taxing 
  4.2   jurisdictions is the "deferred property tax amount."  The 
  4.3   deferred tax amount must not include any special assessments 
  4.4   levied by any local unit of government.  Any tax attributable to 
  4.5   new improvements made to the property after the initial 
  4.6   application has been approved under subdivision 5 must be 
  4.7   excluded when determining any subsequent deferred property tax 
  4.8   amount. 
  4.9      Subd. 8.  [LIMITATION ON TOTAL AMOUNT OF DEFERRED 
  4.10  TAXES.] On or before July 1 of each year, the commissioner shall 
  4.11  request, and each county assessor shall provide, the current 
  4.12  year's estimated market value of all properties eligible for 
  4.13  deferral under this section for taxes payable in the following 
  4.14  year.  The total amount of deferred taxes on a property, when 
  4.15  added to the balance owing on any mortgages on the property at 
  4.16  the time of the initial application, may not exceed 90 percent 
  4.17  of the assessor's estimated market value of the property. 
  4.18     Subd. 9.  [PROPERTY TAX REFUNDS.] For purposes of 
  4.19  qualifying for the regular property tax refund or the special 
  4.20  refund for homeowners under chapter 290A, the qualifying tax is 
  4.21  the full amount of taxes, including the deferred portion of the 
  4.22  tax.  In any year in which a program participant chooses to have 
  4.23  property taxes deferred under this section, any regular or 
  4.24  special property tax refund awarded based upon those property 
  4.25  taxes must be taken as a deduction from the amount of the 
  4.26  deferred tax, rather than as a cash payment to the homeowner.  
  4.27  If the total of the regular and the special property tax refund 
  4.28  amounts exceeds the amount of the deferred tax, the commissioner 
  4.29  shall remit the amount that exceeds the deferred tax to the 
  4.30  homeowner and the deferred tax for that year will be canceled. 
  4.31     Subd. 10.  [LIEN; DEFERRED PORTION.] Payment by the state 
  4.32  to the county treasurer of taxes deferred under this section is 
  4.33  deemed a loan without interest from the state to the political 
  4.34  subdivisions that assessed the tax.  The lien created under 
  4.35  section 272.31 continues to secure payment by the taxpayer, or 
  4.36  by the taxpayer's successors or assigns, of the amount deferred, 
  5.1   without interest.  The lien for deferred taxes has the same 
  5.2   priority as any other lien under section 272.31, except that 
  5.3   mortgages or a vendor's interest in contracts for deed recorded 
  5.4   or filed prior to the recording or filing of the notice under 
  5.5   subdivision 5 have priority over the lien for deferred taxes.  
  5.6   The lien for deferred taxes for future years has the same 
  5.7   priority as the lien for deferred taxes for the first year, 
  5.8   which is always higher in priority than any mortgages or other 
  5.9   liens filed or recorded after the notice recorded or filed under 
  5.10  subdivision 5.  The county treasurer or auditor shall maintain 
  5.11  records of the deferred portion and shall list the total amount 
  5.12  of outstanding deferred taxes on each property tax statement.  
  5.13  In any certification of unpaid taxes for a tax parcel, the 
  5.14  county auditor shall clearly distinguish between taxes payable 
  5.15  in the current year, deferred taxes, and delinquent taxes.  
  5.16  Payment of the deferred portion becomes due and owing at the 
  5.17  time specified in subdivision 11.  Upon receipt of the payment, 
  5.18  the county treasurer shall issue a receipt for it to the person 
  5.19  making the payment upon request and shall forward the payment to 
  5.20  the commissioner of revenue, within ten days, identifying the 
  5.21  parcel to which the payment applies.  Upon receipt by the 
  5.22  commissioner of revenue of collected funds in the amount of the 
  5.23  deferral, the state's loan to the political subdivisions that 
  5.24  assessed the tax is deemed paid in full. 
  5.25     Subd. 11.  [LENGTH AND TERMINATION OF DEFERMENT; 
  5.26  RESTORATION OF DEFERRED TAXES.] (a) The deferment of taxes 
  5.27  granted under this section terminates when one of the following 
  5.28  occurs: 
  5.29     (1) the property is sold or transferred; 
  5.30     (2) the death of the qualifying applicant(s); 
  5.31     (3) the applicant desires to discontinue the deferment; or 
  5.32     (4) the property no longer qualifies as a homestead. 
  5.33     A property is not terminated from the program because no 
  5.34  deferred property tax amount is determined on the homestead for 
  5.35  any given year after the homestead's initial enrollment into the 
  5.36  program. 
  6.1      Subd. 12.  [PAYMENT UPON TERMINATION.] Upon the termination 
  6.2   of the deferment under subdivision 11, the amount of deferred 
  6.3   taxes becomes due and payable to the state within 90 days of 
  6.4   termination of the deferment.  No interest is due on the 
  6.5   deferment if timely paid.  A notice of termination of deferment 
  6.6   shall be recorded by the county auditor. 
  6.7      Subd. 13.  [STATE REIMBURSEMENT.] The commissioner of 
  6.8   revenue shall determine, not later than April 1 of each year, 
  6.9   the deferred amount of property tax in each county, basing 
  6.10  determinations on a review of abstracts of tax lists submitted 
  6.11  by the county auditors under section 275.29.  The commissioner 
  6.12  may make changes in the abstracts of tax lists as deemed 
  6.13  necessary.  The commissioner of revenue, after such review, 
  6.14  shall submit to each county auditor, on or before April 15, the 
  6.15  amount of the first half payment payable hereunder and on or 
  6.16  before September 15 the amount of the second half payment. 
  6.17     The county treasurer shall distribute as part of the May 
  6.18  and October settlements the funds received as if they had been 
  6.19  collected as a part of the property tax. 
  6.20     Subd. 14.  [APPROPRIATION.] An amount sufficient to pay the 
  6.21  total amount of property tax under this section is annually 
  6.22  appropriated from the general fund to the commissioner of 
  6.23  revenue. 
  6.24     Sec. 2.  Minnesota Statutes 1994, section 275.065, 
  6.25  subdivision 3, is amended to read: 
  6.26     Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
  6.27  county auditor shall prepare and the county treasurer shall 
  6.28  deliver after November 10 and on or before November 24 each 
  6.29  year, by first class mail to each taxpayer at the address listed 
  6.30  on the county's current year's assessment roll, a notice of 
  6.31  proposed property taxes and, in the case of a town, final 
  6.32  property taxes.  
  6.33     (b) The commissioner of revenue shall prescribe the form of 
  6.34  the notice. 
  6.35     (c) The notice must inform taxpayers that it contains the 
  6.36  amount of property taxes each taxing authority other than a town 
  7.1   proposes to collect for taxes payable the following year and, 
  7.2   for a town, the amount of its final levy.  It must clearly state 
  7.3   that each taxing authority, including regional library districts 
  7.4   established under section 134.201, and including the 
  7.5   metropolitan taxing districts as defined in paragraph (i), but 
  7.6   excluding all other special taxing districts and towns, will 
  7.7   hold a public meeting to receive public testimony on the 
  7.8   proposed budget and proposed or final property tax levy, or, in 
  7.9   case of a school district, on the current budget and proposed 
  7.10  property tax levy.  It must clearly state the time and place of 
  7.11  each taxing authority's meeting and an address where comments 
  7.12  will be received by mail.  The notice must include the estimated 
  7.13  percentage increase in Minnesota personal income, provided by 
  7.14  the commissioner of revenue under section 275.064, in a way to 
  7.15  facilitate comparison of the proposed budget and levy increases 
  7.16  with the increase in personal income.  For 1993, the notice must 
  7.17  clearly state that each taxing authority holding a public 
  7.18  meeting will describe the increases or decreases of the total 
  7.19  budget, including employee and independent contractor 
  7.20  compensation in the prior year, current year, and the proposed 
  7.21  budget year.  
  7.22     (d) The notice must state for each parcel: 
  7.23     (1) the market value of the property as determined under 
  7.24  section 273.11, and used for computing property taxes payable in 
  7.25  the following year and for taxes payable in the current year; 
  7.26  and, in the case of residential property, whether the property 
  7.27  is classified as homestead or nonhomestead.  The notice must 
  7.28  clearly inform taxpayers of the years to which the market values 
  7.29  apply and that the values are final values; 
  7.30     (2) by county, city or town, school district excess 
  7.31  referenda levy, remaining school district levy, regional library 
  7.32  district, if in existence, the total of the metropolitan special 
  7.33  taxing districts as defined in paragraph (i) and the sum of the 
  7.34  remaining special taxing districts, and as a total of the taxing 
  7.35  authorities, including all special taxing districts, the 
  7.36  proposed or, for a town, final net tax on the property for taxes 
  8.1   payable the following year and the actual tax for taxes payable 
  8.2   the current year.  For the purposes of this subdivision, "school 
  8.3   district excess referenda levy" means school district taxes for 
  8.4   operating purposes approved at referendums, including those 
  8.5   taxes based on net tax capacity as well as those based on market 
  8.6   value.  "School district excess referenda levy" does not include 
  8.7   school district taxes for capital expenditures approved at 
  8.8   referendums or school district taxes to pay for the debt service 
  8.9   on bonds approved at referenda.  In the case of the city of 
  8.10  Minneapolis, the levy for the Minneapolis library board and the 
  8.11  levy for Minneapolis park and recreation shall be listed 
  8.12  separately from the remaining amount of the city's levy.  In the 
  8.13  case of a parcel where tax increment or the fiscal disparities 
  8.14  areawide tax applies, the proposed tax levy on the captured 
  8.15  value or the proposed tax levy on the tax capacity subject to 
  8.16  the areawide tax must each be stated separately and not included 
  8.17  in the sum of the special taxing districts; and 
  8.18     (3) the increase or decrease in the amounts in clause (2) 
  8.19  from taxes payable in the current year to proposed or, for a 
  8.20  town, final taxes payable the following year, expressed as a 
  8.21  dollar amount and as a percentage. 
  8.22     (e) The notice must clearly state that the proposed or 
  8.23  final taxes do not include the following: 
  8.24     (1) special assessments; 
  8.25     (2) levies approved by the voters after the date the 
  8.26  proposed taxes are certified, including bond referenda, school 
  8.27  district levy referenda, and levy limit increase referenda; 
  8.28     (3) amounts necessary to pay cleanup or other costs due to 
  8.29  a natural disaster occurring after the date the proposed taxes 
  8.30  are certified; 
  8.31     (4) amounts necessary to pay tort judgments against the 
  8.32  taxing authority that become final after the date the proposed 
  8.33  taxes are certified; and 
  8.34     (5) the contamination tax imposed on properties which 
  8.35  received market value reductions for contamination. 
  8.36     (f) Except as provided in subdivision 7, failure of the 
  9.1   county auditor to prepare or the county treasurer to deliver the 
  9.2   notice as required in this section does not invalidate the 
  9.3   proposed or final tax levy or the taxes payable pursuant to the 
  9.4   tax levy. 
  9.5      (g) If the notice the taxpayer receives under this section 
  9.6   lists the property as nonhomestead and the homeowner provides 
  9.7   satisfactory documentation to the county assessor that the 
  9.8   property is owned and has been used as the owner's homestead 
  9.9   prior to June 1 of that year, the assessor shall reclassify the 
  9.10  property to homestead for taxes payable in the following year. 
  9.11     (h) In the case of class 4 residential property used as a 
  9.12  residence for lease or rental periods of 30 days or more, the 
  9.13  taxpayer must either: 
  9.14     (1) mail or deliver a copy of the notice of proposed 
  9.15  property taxes to each tenant, renter, or lessee; or 
  9.16     (2) post a copy of the notice in a conspicuous place on the 
  9.17  premises of the property.  
  9.18     (i) For purposes of this subdivision, subdivisions 5a and 
  9.19  6, "metropolitan special taxing districts" means the following 
  9.20  taxing districts in the seven-county metropolitan area that levy 
  9.21  a property tax for any of the specified purposes listed below: 
  9.22     (1) metropolitan council under section 473.132, 473.167, 
  9.23  473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 
  9.24     (2) metropolitan airports commission under section 473.667, 
  9.25  473.671, or 473.672; and 
  9.26     (3) metropolitan mosquito control commission under section 
  9.27  473.711. 
  9.28     For purposes of this section, any levies made by the 
  9.29  regional rail authorities in the county of Anoka, Carver, 
  9.30  Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
  9.31  398A shall be included with the appropriate county's levy and 
  9.32  shall be discussed at that county's public hearing. 
  9.33     For purposes of this section, the amount of the tax on 
  9.34  homesteads qualifying under the senior citizen's property tax 
  9.35  deferral program under section 273.113 is the total amount of 
  9.36  property tax before subtraction of the deferred property tax 
 10.1   amount. 
 10.2      The notice must be mailed or posted by the taxpayer by 
 10.3   November 27 or within three days of receipt of the notice, 
 10.4   whichever is later.  A taxpayer may notify the county treasurer 
 10.5   of the address of the taxpayer, agent, caretaker, or manager of 
 10.6   the premises to which the notice must be mailed in order to 
 10.7   fulfill the requirements of this paragraph. 
 10.8      Sec. 3.  Minnesota Statutes 1994, section 276.04, 
 10.9   subdivision 2, is amended to read: 
 10.10     Subd. 2.  [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 
 10.11  shall provide for the printing of the tax statements.  The 
 10.12  commissioner of revenue shall prescribe the form of the property 
 10.13  tax statement and its contents.  The statement must contain a 
 10.14  tabulated statement of the dollar amount due to each taxing 
 10.15  authority from the parcel of real property for which a 
 10.16  particular tax statement is prepared.  The dollar amounts due 
 10.17  the county, township or municipality, the total of the 
 10.18  metropolitan special taxing districts as defined in section 
 10.19  275.065, subdivision 3, paragraph (i), school district excess 
 10.20  referenda levy, remaining school district levy, and the total of 
 10.21  other voter approved referenda levies based on market value 
 10.22  under section 275.61 must be separately stated.  The amounts due 
 10.23  all other special taxing districts, if any, may be aggregated.  
 10.24  The amount of the tax on homesteads qualifying under the senior 
 10.25  citizen's property tax deferral program under section 273.113, 
 10.26  is the total amount of property tax before the subtraction of 
 10.27  the deferred property tax amount.  For the purposes of this 
 10.28  subdivision, "school district excess referenda levy" means 
 10.29  school district taxes for operating purposes approved at 
 10.30  referenda, including those taxes based on market value.  "School 
 10.31  district excess referenda levy" does not include school district 
 10.32  taxes for capital expenditures approved at referendums or school 
 10.33  district taxes to pay for the debt service on bonds approved at 
 10.34  referenda.  The amount of the tax on contamination value imposed 
 10.35  under sections 270.91 to 270.98, if any, must also be separately 
 10.36  stated.  The dollar amounts, including the dollar amount of any 
 11.1   special assessments, may be rounded to the nearest even whole 
 11.2   dollar.  For purposes of this section whole odd-numbered dollars 
 11.3   may be adjusted to the next higher even-numbered dollar.  The 
 11.4   amount of market value excluded under section 273.11, 
 11.5   subdivision 16, if any, must also be listed on the tax 
 11.6   statement.  The statement shall include the following sentence, 
 11.7   printed in upper case letters in boldface print:  "THE STATE OF 
 11.8   MINNESOTA DOES NOT RECEIVE ANY PROPERTY TAX REVENUES.  THE STATE 
 11.9   OF MINNESOTA REDUCES YOUR PROPERTY TAX BY PAYING CREDITS AND 
 11.10  REIMBURSEMENTS TO LOCAL UNITS OF GOVERNMENT."  
 11.11     (b) The property tax statements for manufactured homes and 
 11.12  sectional structures taxed as personal property shall contain 
 11.13  the same information that is required on the tax statements for 
 11.14  real property.  
 11.15     (c) Real and personal property tax statements must contain 
 11.16  the following information in the order given in this paragraph.  
 11.17  The information must contain the current year tax information in 
 11.18  the right column with the corresponding information for the 
 11.19  previous year in a column on the left: 
 11.20     (1) the property's estimated market value under section 
 11.21  273.11, subdivision 1; 
 11.22     (2) the property's taxable market value after reductions 
 11.23  under section 273.11, subdivisions 1a and 16; 
 11.24     (3) the property's gross tax, calculated by multiplying the 
 11.25  property's gross tax capacity times the total local tax rate and 
 11.26  adding to the result the sum of the aids enumerated in clause 
 11.27  (3); 
 11.28     (4) a total of the following aids: 
 11.29     (i) education aids payable under chapters 124 and 124A; 
 11.30     (ii) local government aids for cities, towns, and counties 
 11.31  under chapter 477A; and 
 11.32     (iii) disparity reduction aid under section 273.1398; 
 11.33     (5) for homestead residential and agricultural properties, 
 11.34  the homestead and agricultural credit aid apportioned to the 
 11.35  property.  This amount is obtained by multiplying the total 
 11.36  local tax rate by the difference between the property's gross 
 12.1   and net tax capacities under section 273.13.  This amount must 
 12.2   be separately stated and identified as "homestead and 
 12.3   agricultural credit."  For purposes of comparison with the 
 12.4   previous year's amount for the statement for taxes payable in 
 12.5   1990, the statement must show the homestead credit for taxes 
 12.6   payable in 1989 under section 273.13, and the agricultural 
 12.7   credit under section 273.132 for taxes payable in 1989; 
 12.8      (6) any credits received under sections 273.119; 273.123; 
 12.9   273.135; 273.1391; 273.1398, subdivision 4; 469.171; and 
 12.10  473H.10, except that the amount of credit received under section 
 12.11  273.135 must be separately stated and identified as "taconite 
 12.12  tax relief"; and 
 12.13     (7) any deferred property tax amount under the senior 
 12.14  citizen's property tax deferral program under section 273.113; 
 12.15  and 
 12.16     (8) the net tax payable in the manner required in paragraph 
 12.17  (a).  
 12.18     The commissioner of revenue shall certify to the county 
 12.19  auditor the actual or estimated aids enumerated in clauses (3) 
 12.20  and (4) that local governments will receive in the following 
 12.21  year.  In the case of a county containing a city of the first 
 12.22  class, for taxes levied in 1991, and for all counties for taxes 
 12.23  levied in 1992 and thereafter, the commissioner must certify 
 12.24  this amount by September 1. 
 12.25     Sec. 4.  [EFFECTIVE DATE.] 
 12.26     Sections 1 to 3 are effective the day following final 
 12.27  enactment for deferral of property taxes payable in 1996, and 
 12.28  thereafter.