HF 3046

as introduced - 87th Legislature (2011 - 2012) Posted on 05/03/2012 09:04am

A bill for an act
relating to property taxation; establishing a mandate relief credit; repealing the
homestead market value exclusion; providing a procedure for local governments
to opt out of state mandates; amending Minnesota Statutes 2011 Supplement,
sections 126C.01, subdivision 3; 273.13, subdivision 34; 273.1393; 276.04,
subdivision 2; 477A.011, subdivision 20; proposing coding for new law in
Minnesota Statutes, chapter 273; proposing coding for new law as Minnesota
Statutes, chapter 471B; repealing Minnesota Statutes 2011 Supplement, section
273.13, subdivision 35.

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

Section 1.

Minnesota Statutes 2011 Supplement, section 126C.01, subdivision 3, is
amended to read:

Subd. 3.

Referendum market value.

"Referendum market value" means the
market value of all taxable property, excluding property classified as class 2, 4c(4), or
4c(12) under section 273.13. The portion of class 2a property consisting of the house,
garage, and surrounding one acre of land of an agricultural homestead is included in
referendum market value. deleted text begin For the purposes of this subdivision, in the case of class 1a,
1b, or 2a property, "market value" means the value prior to the exclusion under section
273.13, subdivision 35. deleted text end Any class of property, or any portion of a class of property, that is
included in the definition of referendum market value and that has a class rate of less than
one percent under section 273.13 shall have a referendum market value equal to its market
value times its class rate, multiplied by 100.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2014 and
thereafter.
new text end

Sec. 2.

Minnesota Statutes 2011 Supplement, section 273.13, subdivision 34, is
amended to read:

Subd. 34.

Homestead of disabled veteran or family caregiver.

(a) All or a
portion of the market value of property owned by a veteran and serving as the veteran's
homestead under this section is excluded in determining the property's taxable market
value if the veteran has a service-connected disability of 70 percent or more as certified
by the United States Department of Veterans Affairs. To qualify for exclusion under this
subdivision, the veteran must have been honorably discharged from the United States
armed forces, as indicated by United States Government Form DD214 or other official
military discharge papers.

(b)(1) For a disability rating of 70 percent or more, $150,000 of market value is
excluded, except as provided in clause (2); and

(2) for a total (100 percent) and permanent disability, $300,000 of market value is
excluded.

(c) If a disabled veteran qualifying for a valuation exclusion under paragraph (b),
clause (2), predeceases the veteran's spouse, and if upon the death of the veteran the
spouse holds the legal or beneficial title to the homestead and permanently resides there,
the exclusion shall carry over to the benefit of the veteran's spouse for the current taxes
payable year and for five additional taxes payable years or until such time as the spouse
remarries, or sells, transfers, or otherwise disposes of the property, whichever comes first.
Qualification under this paragraph requires an annual application under paragraph (h).

(d) If the spouse of a member of any branch or unit of the United States armed
forces who dies due to a service-connected cause while serving honorably in active
service, as indicated on United States Government Form DD1300 or DD2064, holds
the legal or beneficial title to a homestead and permanently resides there, the spouse is
entitled to the benefit described in paragraph (b), clause (2), for five taxes payable years,
or until such time as the spouse remarries or sells, transfers, or otherwise disposes of the
property, whichever comes first.

(e) If a veteran meets the disability criteria of paragraph (a) but does not own
property classified as homestead in the state of Minnesota, then the homestead of the
veteran's primary family caregiver, if any, is eligible for the exclusion that the veteran
would otherwise qualify for under paragraph (b).

(f) In the case of an agricultural homestead, only the portion of the property
consisting of the house and garage and immediately surrounding one acre of land qualifies
for the valuation exclusion under this subdivision.

(g) A property qualifying for a valuation exclusion under this subdivision is not
eligible for the deleted text begin market value exclusion under subdivision 35 deleted text end new text begin mandate relief credit under
section 273.1387 new text end , or classification under subdivision 22, paragraph (b).

(h) To qualify for a valuation exclusion under this subdivision a property owner
must apply to the assessor by July 1 of each assessment year, except that an annual
reapplication is not required once a property has been accepted for a valuation exclusion
under paragraph (a) and qualifies for the benefit described in paragraph (b), clause (2), and
the property continues to qualify until there is a change in ownership. For an application
received after July 1 of any calendar year, the exclusion shall become effective for the
following assessment year.

(i) A first-time application by a qualifying spouse for the market value exclusion
under paragraph (d) must be made any time within two years of the death of the service
member.

(j) For purposes of this subdivision:

(1) "active service" has the meaning given in section 190.05;

(2) "own" means that the person's name is present as an owner on the property deed;

(3) "primary family caregiver" means a person who is approved by the secretary of
the United States Department of Veterans Affairs for assistance as the primary provider
of personal care services for an eligible veteran under the Program of Comprehensive
Assistance for Family Caregivers, codified as United States Code, title 38, section 1720G;
and

(4) "veteran" has the meaning given the term in section 197.447.

(k) The purpose of this provision of law providing a level of homestead property tax
relief for gravely disabled veterans, their primary family caregivers, and their surviving
spouses is to help ease the burdens of war for those among our state's citizens who bear
those burdens most heavily.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2014 and
thereafter.
new text end

Sec. 3.

new text begin [273.1387] MANDATE RELIEF CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Eligibility; credit amount. new text end

new text begin Each county auditor shall determine a
mandate relief credit for each class 1a, 1b, and 2a homestead property within the county
equal to 0.4 percent of the first $75,000 of market value of the property minus 0.15 percent
of the market value in excess of $75,000. The credit amount may not be less than zero. In
the case of an agricultural or resort homestead, only the market value of the house, garage,
and immediately surrounding one acre of land is eligible in determining the property's
mandate relief credit. In the case of a property that is classified as part homestead and
part nonhomestead, the credit shall apply only to the homestead portion of the property;
however, if a portion of a property is classified as nonhomestead solely because not all
the owners occupy the property, not all the owners have qualifying relatives occupying
the property, or not all the spouses of owners occupy the property, then the credit amount
shall be initially computed as if that nonhomestead portion were also in the homestead
class, and then prorated to the owner-occupant's percentage of ownership. For the
purpose of this section, when an owner-occupant's spouse does not occupy the property,
the percentage of ownership for the owner-occupant's spouse is one-half of the couple's
ownership percentage.
new text end

new text begin Subd. 2. new text end

new text begin Credit reimbursement. new text end

new text begin The county auditor shall determine the tax
reduction allowed under this section within the county for each taxes payable year and
shall certify that amount to the commissioner of revenue as a part of the abstracts of tax
lists submitted by the county auditors under section 275.29. Any prior year adjustments
shall also be certified on the abstracts of tax lists. The commissioner shall review the
certifications for accuracy, and may make such changes as are deemed necessary, or return
the certification to the county auditor for correction. The credit under this section must be
used to proportionately reduce the net tax capacity-based property tax payable to each
local taxing jurisdiction as provided in section 273.1393.
new text end

new text begin Subd. 3. new text end

new text begin Payment. new text end

new text begin (a) The commissioner of revenue shall reimburse each local
taxing jurisdiction, other than school districts, for the tax reductions granted under this
section in two equal installments on October 31 and December 26 of the taxes payable
year for which the reductions are granted, including in each payment the prior year
adjustments certified on the abstracts for that taxes payable year. The reimbursements
related to tax increments shall be issued in one installment each year on December 26.
new text end

new text begin (b) The commissioner of revenue shall certify the total of the tax reductions
granted under this section for each taxes payable year within each school district
to the commissioner of education, and the commissioner of education shall pay the
reimbursement amounts to each school district as provided in section 273.1392.
new text end

new text begin Subd. 4. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to make the payments required by
this section to taxing jurisdictions other than school districts is annually appropriated
from the general fund to the commissioner of revenue. An amount sufficient to make the
payments required by this section for school districts is annually appropriated from the
general fund to the commissioner of education.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2014 and
thereafter.
new text end

Sec. 4.

Minnesota Statutes 2011 Supplement, section 273.1393, is amended to read:

273.1393 COMPUTATION OF NET PROPERTY TAXES.

Notwithstanding any other provisions to the contrary, "net" property taxes are
determined by subtracting the credits in the order listed from the gross tax:

(1) disaster credit as provided in sections 273.1231 to 273.1235;

(2) powerline credit as provided in section 273.42;

(3) agricultural preserves credit as provided in section 473H.10;

(4) enterprise zone credit as provided in section 469.171;

(5) disparity reduction credit;

(6) conservation tax credit as provided in section 273.119;

(7) agricultural credit as provided in section 273.1384;

new text begin (8) mandate relief credit as provided in section 273.1387;
new text end

deleted text begin (8) deleted text end new text begin (9) new text end taconite homestead credit as provided in section 273.135;

deleted text begin (9) deleted text end new text begin (10) new text end supplemental homestead credit as provided in section 273.1391; and

deleted text begin (10) deleted text end new text begin (11) new text end the bovine tuberculosis zone credit, as provided in section 273.113.

The combination of all property tax credits must not exceed the gross tax amount.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2014 and
thereafter.
new text end

Sec. 5.

Minnesota Statutes 2011 Supplement, section 276.04, subdivision 2, is
amended to read:

Subd. 2.

Contents of tax statements.

(a) The treasurer shall provide for the
printing of the tax statements. The commissioner of revenue shall prescribe the form of
the property tax statement and its contents. The tax statement must not state or imply
that property tax credits are paid by the state of Minnesota. The statement must contain
a tabulated statement of the dollar amount due to each taxing authority and the amount
of the state tax from the parcel of real property for which a particular tax statement is
prepared. The dollar amounts attributable to the county, the state tax, the voter approved
school tax, the other local school tax, the township or municipality, and the total of
the metropolitan special taxing districts as defined in section 275.065, subdivision 3,
paragraph (i), must be separately stated. The amounts due all other special taxing districts,
if any, may be aggregated except that any levies made by the regional rail authorities in the
county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
398A shall be listed on a separate line directly under the appropriate county's levy. If the
county levy under this paragraph includes an amount for a lake improvement district as
defined under sections 103B.501 to 103B.581, the amount attributable for that purpose
must be separately stated from the remaining county levy amount. In the case of Ramsey
County, if the county levy under this paragraph includes an amount for public library
service under section 134.07, the amount attributable for that purpose may be separated
from the remaining county levy amount. The amount of the tax on homesteads qualifying
under the senior citizens' property tax deferral program under chapter 290B is the total
amount of property tax before subtraction of the deferred property tax amount. The
amount of the tax on contamination value imposed under sections 270.91 to 270.98, if any,
must also be separately stated. The dollar amounts, including the dollar amount of any
special assessments, may be rounded to the nearest even whole dollar. For purposes of this
section whole odd-numbered dollars may be adjusted to the next higher even-numbered
dollar. The amount of market value excluded under section 273.11, subdivision 16, if any,
must also be listed on the tax statement.

(b) The property tax statements for manufactured homes and sectional structures
taxed as personal property shall contain the same information that is required on the
tax statements for real property.

(c) Real and personal property tax statements must contain the following information
in the order given in this paragraph. The information must contain the current year tax
information in the right column with the corresponding information for the previous year
in a column on the left:

(1) the property's estimated market value under section 273.11, subdivision 1;

deleted text begin (2) the property's homestead market value exclusion under section 273.13,
subdivision 35;
deleted text end

deleted text begin (3) deleted text end new text begin (2) new text end the property's taxable market value after reductions under deleted text begin sections deleted text end new text begin section new text end
273.11, subdivisions 1a and 16 deleted text begin , and 273.13, subdivision 35 deleted text end ;

deleted text begin (4) deleted text end new text begin (3) new text end the property's gross tax, before credits;

new text begin (4) the mandate relief credit under section 273.1387;
new text end

(5) for homestead agricultural properties, the credit under section 273.1384;

(6) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135;
273.1391; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of
credit received under section 273.135 must be separately stated and identified as "taconite
tax relief"; and

(7) the net tax payable in the manner required in paragraph (a).

(d) If the county uses envelopes for mailing property tax statements and if the county
agrees, a taxing district may include a notice with the property tax statement notifying
taxpayers when the taxing district will begin its budget deliberations for the current
year, and encouraging taxpayers to attend the hearings. If the county allows notices to
be included in the envelope containing the property tax statement, and if more than
one taxing district relative to a given property decides to include a notice with the tax
statement, the county treasurer or auditor must coordinate the process and may combine
the information on a single announcement.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2014 and
thereafter.
new text end

Sec. 6.

new text begin [471B.01] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For the purposes of this chapter, the terms defined in this
section have the meanings given them.
new text end

new text begin Subd. 2. new text end

new text begin Local government. new text end

new text begin "Local government" means a county, town, school
district, or statutory or home rule charter city.
new text end

new text begin Subd. 3. new text end

new text begin Local government of the same kind. new text end

new text begin "Local government of the same
kind" means any category of the following: cities, counties, school districts, or towns.
new text end

new text begin Subd. 4. new text end

new text begin Same class. new text end

new text begin "Same class" means cities of the same class.
new text end

new text begin Subd. 5. new text end

new text begin School district. new text end

new text begin "School district" means a common, independent, or
special school district and excludes charter schools.
new text end

new text begin Subd. 6. new text end

new text begin State mandate. new text end

new text begin "State mandate" means a state law or rule specifically
directed at or related to local government structure, operation, services, programs, or
financing that:
new text end

new text begin (1) imposes a cost on a local government, whether or not the state appropriates
money for the local government to cover the total costs of the mandate, or specifically
authorizes the local government to impose a tax or fee to cover the costs;
new text end

new text begin (2) decreases revenue available to a local government without a commensurate
decrease in services and programs required by the law or rule;
new text end

new text begin (3) makes a local government, or its officers or employees, civilly or criminally
liable for failure to follow or enforce the law or rule;
new text end

new text begin (4) restricts the ability of a local government to establish services, programs,
policies, plans, or goals, or restricts its ability to raise revenue or finance its services,
programs, policies, plans, or goals; or
new text end

new text begin (5) implements or interprets federal law and, by its implementation or interpretation,
increases or decreases programs, services, or funding levels.
new text end

Sec. 7.

new text begin [471B.02] REFORM OR OPT OUT RESOLUTION AND PROCEDURES.
new text end

new text begin Subdivision 1. new text end

new text begin Local procedure. new text end

new text begin (a) A local government may, by written resolution
of the governing body after public notice and hearing, propose that a state mandate
imposed on all local governments of the same kind or class, except a state mandate under
section 471B.03, should not apply to the local government. A local government also may
include in a resolution recommendations for reforming a mandate. A local government
must adopt a separate resolution for each mandate that the local government proposes
should not apply to the local government. The resolution must:
new text end

new text begin (1) specifically cite the state law or rule that imposes the mandate on the local
government;
new text end

new text begin (2) identify any costs of complying with the mandate and the total amount of federal
and state funds available for complying with the mandate;
new text end

new text begin (3) state the reasons the local government needs to opt out of the state mandate and
may recommend mandate reforms to achieve greater efficiencies; and
new text end

new text begin (4) indicate how the local government will otherwise meet the objectives of the
mandate or why the objectives do not apply to the local government.
new text end

new text begin (b) Before voting on the resolution, the governing body must give adequate public
notice of the proposed resolution, including information on whether state or federal
funding for the local government might be adversely affected. The governing body must
hold at least one public hearing on the proposed resolution and provide opportunity for
public comment. The governing body must encourage public participation in the hearing
to determine the extent of public support for the proposed resolution.
new text end

new text begin (c) The proponent of the proposed resolution must identify at the hearing:
new text end

new text begin (1) the costs of complying with the mandate that exceed the state and federal funds
allocated to the district for purposes of the mandate and recommend reforms for achieving
greater efficiencies;
new text end

new text begin (2) any potential loss of state or federal revenue that might result from opting out of
the state mandate;
new text end

new text begin (3) other policy issues or effects that might result;
new text end

new text begin (4) the purposes for which the mandate was imposed;
new text end

new text begin (5) any persons or categories of persons who will be adversely affected if the local
government does not comply with the mandate; and
new text end

new text begin (6) the costs and benefits of the mandate compared to the costs and benefits of
inaction.
new text end

new text begin (d) A local government that adopts a resolution must file the resolution with the
state auditor.
new text end

new text begin Subd. 2. new text end

new text begin State procedure. new text end

new text begin The state auditor must:
new text end

new text begin (1) list on the state auditor's Web site all state mandates cited in a resolution filed
with the state auditor, identifying for each mandate the local governments that adopted
and filed a resolution to opt out of a mandate, and whether the threshold under subdivision
3 for opting out is met;
new text end

new text begin (2) keep a running total of the number and percent of local governments of the same
kind and, if applicable, same class, that have filed a resolution to opt out; and
new text end

new text begin (3) notify the legislature when the threshold under subdivision 3 for opting out is met.
new text end

new text begin Subd. 3. new text end

new text begin Threshold and certification; legislative oversight. new text end

new text begin (a) The state auditor
must notify the legislature when the auditor certifies that the minimum number of local
governments of the same kind and, if applicable, same class file resolutions under the
requirements of this chapter. The minimum number is set in paragraph (b).
new text end

new text begin (b) The minimum number of local governments of the same kind or class are:
new text end

new text begin (1) six counties;
new text end

new text begin (2) 25 home rule charter cities;
new text end

new text begin (3) 50 statutory cities;
new text end

new text begin (4) two cities of the first class;
new text end

new text begin (5) 14 cities of the second class;
new text end

new text begin (6) 11 cities of the third class;
new text end

new text begin (7) 50 cities of the fourth class;
new text end

new text begin (8) 75 towns; and
new text end

new text begin (9) 24 school districts.
new text end

new text begin Subd. 4. new text end

new text begin Opt out of reform implementation and later opting out of reforms.
new text end

new text begin After initial opt-out resolutions are approved by the legislature and take effect, other local
governments of the same kind and, if applicable, same class may file resolutions to opt
out of the same mandate. The later-filed resolutions must be consistent with the law
enacted in response to the initial opt-out resolutions and later-filed resolutions are only
effective to the extent authorized by that law. Each of these takes effect 30 days after the
auditor accepts the filing.
new text end

Sec. 8.

Minnesota Statutes 2011 Supplement, section 477A.011, subdivision 20,
is amended to read:

Subd. 20.

City net tax capacity.

"City net tax capacity" means (1) the net tax
capacity computed using the net tax capacity rates in section 273.13 for taxes payable
in the year of the aid distribution, and the market values deleted text begin , after the exclusion in section
273.13, subdivision 35, deleted text end for taxes payable in the year prior to the aid distribution plus (2)
a city's fiscal disparities distribution tax capacity under section 276A.06, subdivision 2,
paragraph (b), or 473F.08, subdivision 2, paragraph (b), for taxes payable in the year prior
to that for which aids are being calculated. The market value utilized in computing city
net tax capacity shall be reduced by the sum of (1) a city's market value of commercial
industrial property as defined in section 276A.01, subdivision 3, or 473F.02, subdivision 3,
multiplied by the ratio determined pursuant to section 276A.06, subdivision 2, paragraph
(a), or 473F.08, subdivision 2, paragraph (a), (2) the market value of the captured value
of tax increment financing districts as defined in section 469.177, subdivision 2, and (3)
the market value of transmission lines deducted from a city's total net tax capacity under
section 273.425. The city net tax capacity will be computed using equalized market values.

Sec. 9. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2011 Supplement, section 273.13, subdivision 35, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2014 and
thereafter.
new text end