HF 3103

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/23/2023 01:31pm

A bill for an act
relating to taxation; property; eliminating commercial and industrial property from
the state general levy; amending Minnesota Statutes 2022, section 275.025,
subdivisions 1, 4; repealing Minnesota Statutes 2022, section 275.025, subdivisions
2, 5, 6.

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

Section 1.

Minnesota Statutes 2022, section 275.025, subdivision 1, is amended to read:

Subdivision 1.

Levy amount.

The state general levy is levied against
deleted text begin commercial-industrial property and deleted text end seasonal residential recreational property, as defined
in this section. deleted text begin The state general levy for commercial-industrial property is $716,990,000
for taxes payable in 2023 and thereafter. deleted text end The state general levy for seasonal-recreational
property is $41,690,000 for taxes payable in 2020 and thereafter. The tax under this section
is not treated as a local tax rate under section 469.177 and is not the levy of a governmental
unit under chapters 276A and 473F.

The commissioner shall increase or decrease the preliminary or final rate for a year as
necessary to account for errors and tax base changes that affected a preliminary or final rate
for either of the two preceding years. Adjustments are allowed to the extent that the necessary
information is available to the commissioner at the time the rates for a year must be certified,
and for the following reasons:

(1) an erroneous report of taxable value by a local official;

(2) an erroneous calculation by the commissioner; and

(3) an increase or decrease in taxable value for deleted text begin commercial-industrial or deleted text end seasonal
residential recreational property reported to the commissioner under section 270C.85,
subdivision 2, clause (4), for the same year.

The commissioner may, but need not, make adjustments if the total difference in the tax
levied for the year would be less than $100,000.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2024.
new text end

Sec. 2.

Minnesota Statutes 2022, section 275.025, subdivision 4, is amended to read:

Subd. 4.

Apportionment and levy of state general tax.

The state general tax must be
levied by applying a uniform rate to all deleted text begin commercial-industrial tax capacity and a uniform
rate to all deleted text end seasonal residential recreational tax capacity. On or before October 1 each year,
the commissioner of revenue shall certify the preliminary state general levy rates to each
county auditor that must be used to prepare the notices of proposed property taxes for taxes
payable in the following year. By January 1 of each year, the commissioner shall certify
the final state general levy rates to each county auditor that shall be used in spreading taxes.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2024.
new text end

Sec. 3. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2022, section 275.025, subdivisions 2, 5, and 6, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2024.
new text end

APPENDIX

Repealed Minnesota Statutes: 23-01988

275.025 STATE GENERAL TAX.

Subd. 2.

Commercial-industrial tax capacity.

For the purposes of this section, "commercial-industrial tax capacity" means the tax capacity of all taxable property classified as class 3 or class 5(1) under section 273.13, excluding:

(1) the tax capacity attributable to the first $150,000 of market value of each parcel of commercial-industrial property as defined under section 273.13, subdivision 24, clauses (1) and (2);

(2) electric generation attached machinery under class 3; and

(3) property described in section 473.625.

County commercial-industrial tax capacity amounts are not adjusted for the captured net tax capacity of a tax increment financing district under section 469.177, subdivision 2, the net tax capacity of transmission lines deducted from a local government's total net tax capacity under section 273.425, or fiscal disparities contribution and distribution net tax capacities under chapter 276A or 473F. For purposes of this subdivision, the procedures for determining eligibility for tier 1 under section 273.13, subdivision 24, clauses (1) and (2), shall apply in determining the portion of a property eligible to be considered within the first $150,000 of market value.

Subd. 5.

Underserved municipalities distribution.

(a) Any municipality that:

(1) lies wholly or partially within the metropolitan area as defined under section 473.121, subdivision 2, but outside the transit taxing district as defined under section 473.446, subdivision 2; and

(2) has a net fiscal disparities contribution equal to or greater than eight percent of its total taxable net tax capacity,

is eligible for a distribution from the proceeds of the state general levy imposed on taxpayers within the municipality.

(b) The distribution is equal to (1) the municipality's net tax capacity tax rate, times (2) the municipality's net fiscal disparities contribution in excess of eight percent of its total taxable net tax capacity; provided, however, that the distribution may not exceed the tax under this section imposed on taxpayers within the municipality. The amount of the distribution to each municipality must be determined by the commissioner of revenue and certified to each affected municipality and county by September 1 of the year in which taxes are payable.

(c) The distribution under this subdivision must be paid to the qualifying municipality by the treasurer of the home county of the municipality by December 1 of the year the taxes are payable. The amounts distributed under this subdivision must be deducted from the settlement of the state general levy for the taxes payable year under section 276.112.

(d) For purposes of this subdivision, the following terms have the meanings given.

(1) "Municipality" means a home rule or statutory city, or a town, except that in the case of a city that lies only partially within the metropolitan area, municipality means the portion of the city lying within the metropolitan area.

(2) "Net fiscal disparities contribution" means a municipality's fiscal disparities contribution tax capacity minus its distribution net tax capacity.

(3) "Total taxable net tax capacity" means the total net tax capacity of all properties in the municipality under section 273.13 minus (i) the net fiscal disparities contribution, and (ii) the municipality's tax increment captured net tax capacity.

Subd. 6.

Natural gas pipeline.

(a) The county must abate the state general levy on personal property that is part of an intrastate natural gas transportation or distribution pipeline system if:

(1) construction of the pipeline system commenced after January 1, 2018; and

(2) the pipeline system provides service to an area:

(i) outside the seven-county metropolitan area, as defined in section 473.121, subdivision 4; and

(ii) in which more than half of the households or businesses lacked access to natural gas distribution systems as of January 1, 2018.

(b) In the first year that a taxpayer seeks an abatement under this subdivision, the taxpayer must file an application with the commissioner of revenue by March 1 of the assessment year on a form prescribed by the commissioner.

(c) The commissioner of revenue must notify any affected county in the first year that a pipeline system becomes eligible for an abatement under this subdivision.

(d) The abatement under this subdivision applies for a period not to exceed 12 taxable years, provided that once a property no longer qualifies, it may not subsequently qualify for an abatement under this subdivision.