HF 3585

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to taxation; property; modifying the senior 
  1.3             citizens' property tax deferral program; amending 
  1.4             Minnesota Statutes 1997 Supplement, sections 290B.03, 
  1.5             subdivision 1; 290B.04, subdivisions 1, 3, and by 
  1.6             adding a subdivision; 290B.05, subdivisions 1, 2, and 
  1.7             4; 290B.06; 290B.07; 290B.08, subdivision 2; and 
  1.8             290B.09, subdivision 1. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1997 Supplement, section 
  1.11  290B.03, subdivision 1, is amended to read: 
  1.12     Subdivision 1.  [PROGRAM QUALIFICATIONS.] The 
  1.13  qualifications for the senior citizens' property tax deferral 
  1.14  program are as follows: 
  1.15     (1) the property must be owned and occupied as a homestead 
  1.16  by a person 65 years of age or older.  In the case of a married 
  1.17  couple, both of the spouses must be at least 65 years old at the 
  1.18  time the first property tax deferral is granted, regardless of 
  1.19  whether the property is titled in the name of one spouse or both 
  1.20  spouses, or titled in another way that permits the property to 
  1.21  have homestead status; 
  1.22     (2) the total household income of the qualifying 
  1.23  homeowners, as defined in section 290A.03, subdivision 5, for 
  1.24  the calendar year preceding the year of the initial application 
  1.25  may not exceed $30,000 $40,000; 
  1.26     (3) the homestead must have been owned and occupied as the 
  1.27  homestead of at least one of the qualifying homeowners for at 
  2.1   least 15 years prior to the year the initial application is 
  2.2   filed; 
  2.3      (4) there are no delinquent property taxes, penalties, or 
  2.4   interest on the homesteaded property; 
  2.5      (5) there are no delinquent special assessments on the 
  2.6   homesteaded property; 
  2.7      (6) there are no state or federal tax liens or judgment 
  2.8   liens on the homesteaded property; 
  2.9      (7) there are no mortgages or other liens on the property 
  2.10  that secure future advances, except for those subject to credit 
  2.11  limits that result in compliance with clause (8); and 
  2.12     (8) the total unpaid balances of debts secured by mortgages 
  2.13  and other liens on the property, including unpaid special 
  2.14  assessments, but not including property taxes payable during the 
  2.15  year, does not exceed 30 percent of the assessor's estimated 
  2.16  market value for the year. 
  2.17     Sec. 2.  Minnesota Statutes 1997 Supplement, section 
  2.18  290B.04, subdivision 1, is amended to read: 
  2.19     Subdivision 1.  [INITIAL APPLICATION.] A taxpayer meeting 
  2.20  the program qualifications under section 290B.03 may apply to 
  2.21  the commissioner of revenue for the deferral of taxes.  
  2.22  Applications are due on or before July 1 for deferral 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 deferral 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) the name, address, and social security number of the 
  2.31  owner or owners; 
  2.32     (2) a copy of the property tax statement for the current 
  2.33  payable year for the homesteaded property; 
  2.34     (3) the initial year of ownership and occupancy as a 
  2.35  homestead; 
  2.36     (4) the owner's household income for the previous calendar 
  3.1   year; and 
  3.2      (5) information on any mortgage loans or other amounts 
  3.3   secured by mortgages or other liens against the property, for 
  3.4   which purpose the commissioner may require the applicant to 
  3.5   provide a copy of the mortgage note, the mortgage, or a 
  3.6   statement of the balance owing on the mortgage loan provided by 
  3.7   the mortgage holder.  The commissioner may require the 
  3.8   appropriate documents in connection with obtaining and 
  3.9   confirming information on unpaid amounts secured by other liens. 
  3.10     The application must state that program participation is 
  3.11  voluntary.  The application must also state that the deferred 
  3.12  amount depends directly on the applicant's household income, and 
  3.13  that program participation includes authorization for the 
  3.14  deferred amount for each year and the cumulative deferral, 
  3.15  penalty, and interest to appear on each year's property tax 
  3.16  statement as public data. 
  3.17     As a part of the initial application, the commissioner may 
  3.18  require the county recorder or the registrar of titles, 
  3.19  whichever is appropriate, of the county where the property is 
  3.20  located to certify that no mortgages and no lien notices are on 
  3.21  record against the property or the applicant as of 30 days prior 
  3.22  to the date of such certification; or, in the case where 
  3.23  mortgages or lien notices are on the record, the commissioner 
  3.24  may require the recorder or registrar to provide the date and 
  3.25  county document number of such mortgages or lien notices as a 
  3.26  part of the certification.  The commissioner may require other 
  3.27  related information from the recorder or registrar in order to 
  3.28  administer the provisions of chapter 290B. 
  3.29     The commissioner may use any information available to 
  3.30  determine or verify eligibility under this section. 
  3.31     Sec. 3.  Minnesota Statutes 1997 Supplement, section 
  3.32  290B.04, subdivision 3, is amended to read: 
  3.33     Subd. 3.  [ANNUAL EXCESS-INCOME CERTIFICATION BY TAXPAYER.] 
  3.34  Annually on or before July 1, A taxpayer whose initial 
  3.35  application has been approved under subdivision 2, 
  3.36  shall complete the certification form and return it to notify 
  4.1   the commissioner of revenue in writing by July 1 of any year in 
  4.2   which the taxpayer's household income for the preceding calendar 
  4.3   year exceeded $40,000.  The certification must state whether or 
  4.4   not the taxpayer wishes to have property taxes deferred for the 
  4.5   following year provided the taxes exceed the maximum property 
  4.6   tax amount under section 290B.05.  If the taxpayer does wish to 
  4.7   have property taxes deferred, the certification must state the 
  4.8   homeowner's total household income for the previous calendar 
  4.9   year and any other information which the commissioner deems 
  4.10  necessary.  No property taxes may be deferred under chapter 290B 
  4.11  in the year following the year in which a program participant 
  4.12  filed or should have filed an excess-income certification under 
  4.13  this subdivision.  The commissioner of revenue may use any 
  4.14  information available to the commissioner to determine or verify 
  4.15  ineligibility under this subdivision. 
  4.16     Sec. 4.  Minnesota Statutes 1997 Supplement, section 
  4.17  290B.04, is amended by adding a subdivision to read: 
  4.18     Subd. 4.  [PENALTY FOR FAILURE TO FILE EXCESS-INCOME 
  4.19  CERTIFICATION.] A participant who fails to file an excess-income 
  4.20  certification as required in subdivision 3 is subject to a 
  4.21  penalty equal to ten percent of the amount deferred in the year 
  4.22  following the year in which the participant failed to file the 
  4.23  form.  The penalty is added to the cumulative deferral and is 
  4.24  subject to interest at the same rate. 
  4.25     Sec. 5.  Minnesota Statutes 1997 Supplement, section 
  4.26  290B.05, subdivision 1, is amended to read: 
  4.27     Subdivision 1.  [DETERMINATION BY COMMISSIONER.] The 
  4.28  commissioner shall determine each qualifying homeowner's "annual 
  4.29  maximum property tax amount" following approval of the 
  4.30  homeowner's initial application.  The "annual maximum property 
  4.31  tax amount" equals five percent of the homeowner's total 
  4.32  household income for the year preceding the initial 
  4.33  application.  The commissioner shall annually determine the 
  4.34  qualifying homeowner's "maximum property tax amount" 
  4.35  and "maximum allowable deferral."  The maximum property tax 
  4.36  amount calculated for taxes payable in the following year is 
  5.1   equal to five percent of the homeowner's total household income 
  5.2   for the previous calendar year.  No tax may be deferred for any 
  5.3   homeowner whose total household income for the previous year 
  5.4   exceeds $30,000 $40,000.  No tax shall be deferred in any year 
  5.5   in which the homeowner does not meet the program qualifications 
  5.6   in section 290B.03.  The maximum allowable total deferral is 
  5.7   equal to 75 percent of the assessor's estimated market value for 
  5.8   the year, less (1) the balance of any mortgage loans and other 
  5.9   amounts secured by liens against the property at the time of 
  5.10  application, including any unpaid special assessments but not 
  5.11  including property taxes payable during the year; and (2) any 
  5.12  outstanding deferral, penalty, and interest.  
  5.13     Sec. 6.  Minnesota Statutes 1997 Supplement, section 
  5.14  290B.05, subdivision 2, is amended to read: 
  5.15     Subd. 2.  [CERTIFICATION BY COMMISSIONER.] On or before 
  5.16  December 1, the commissioner shall certify to the county auditor 
  5.17  of the county in which the qualifying homestead is located (1) 
  5.18  the maximum property tax amount; (2) the maximum allowable 
  5.19  deferral for the year; and (3) the cumulative deferral, penalty, 
  5.20  and interest for all years preceding the next taxes payable year.
  5.21     Sec. 7.  Minnesota Statutes 1997 Supplement, section 
  5.22  290B.05, subdivision 4, is amended to read: 
  5.23     Subd. 4.  [LIMITATION ON TOTAL AMOUNT OF DEFERRED TAXES.] 
  5.24  On or before September 1 of each year, the commissioner shall 
  5.25  request, and each county or city assessor shall provide, the 
  5.26  current year's estimated market value of each property on the 
  5.27  list supplied by the commissioner that may be eligible for 
  5.28  deferral under this section for taxes payable in the following 
  5.29  year.  The total amount of deferred taxes, penalty, and interest 
  5.30  on a property, when added to (1) the balance owing on any 
  5.31  mortgages on the property at the time of initial application; 
  5.32  and (2) other amounts secured by liens on the property at the 
  5.33  time of the initial application, may not exceed 75 percent of 
  5.34  the assessor's current estimated market value of the property. 
  5.35     Sec. 8.  Minnesota Statutes 1997 Supplement, section 
  5.36  290B.06, is amended to read: 
  6.1      290B.06 [PROPERTY TAX REFUNDS.] 
  6.2      For purposes of qualifying for the regular property tax 
  6.3   refund or the special refund for homeowners under chapter 290A, 
  6.4   the qualifying tax is the full amount of taxes, including the 
  6.5   deferred portion of the tax.  In any year in which a program 
  6.6   participant chooses to have property taxes are deferred under 
  6.7   this section, any regular or special property tax refund awarded 
  6.8   based upon those property taxes must be taken first as a 
  6.9   deduction from the amount of the deferred tax for that year, and 
  6.10  second as a deduction against any outstanding deferral from 
  6.11  previous years, rather than as a cash payment to the homeowner.  
  6.12  The commissioner shall cancel any current year's deferral or 
  6.13  previous years' deferral, penalty, and interest that is offset 
  6.14  by the property tax refunds.  If the total of the regular and 
  6.15  the special property tax refund amounts exceeds the sum of the 
  6.16  deferred tax for the current year and cumulative deferred tax, 
  6.17  penalty, and interest for previous years, the commissioner shall 
  6.18  then remit the excess amount to the homeowner.  On or before the 
  6.19  date on which the commissioner issues property tax refunds, the 
  6.20  commissioner shall notify program participants of any reduction 
  6.21  in the deferred amount for the current and previous years 
  6.22  resulting from property tax refunds. 
  6.23     Sec. 9.  Minnesota Statutes 1997 Supplement, section 
  6.24  290B.07, is amended to read: 
  6.25     290B.07 [LIEN; DEFERRED PORTION.] 
  6.26     Payment by the state to the county treasurer of taxes 
  6.27  deferred under this section is deemed a loan from the state to 
  6.28  the program participant.  The commissioner must compute the 
  6.29  interest as provided in section 270.75, subdivision 5 based on 
  6.30  the annual change in the consumer price index for urban 
  6.31  consumers, as prepared by the United States Bureau of Labor 
  6.32  Statistics, but not to exceed five percent, and maintain records 
  6.33  of the total deferred amount, penalty, and interest for each 
  6.34  participant.  Interest shall accrue beginning September 1 of the 
  6.35  payable year for which the taxes are deferred.  Any deferral 
  6.36  made under this chapter shall not be construed as delinquent 
  7.1   property taxes. 
  7.2      The lien created under section 272.31 continues to secure 
  7.3   payment by the taxpayer, or by the taxpayer's successors or 
  7.4   assigns, of the amount deferred, including penalty and interest, 
  7.5   with respect to all years for which amounts are deferred.  The 
  7.6   lien for deferred taxes, penalty, and interest has the same 
  7.7   priority as any other lien under section 272.31, except that 
  7.8   liens, including mortgages, recorded or filed prior to the 
  7.9   recording or filing of the notice under section 290B.04, 
  7.10  subdivision 2, have priority over the lien for deferred taxes, 
  7.11  penalty, and interest.  A seller's interest in a contract for 
  7.12  deed, in which a qualifying homeowner is the purchaser or an 
  7.13  assignee of the purchaser, has priority over deferred taxes, 
  7.14  penalty, and interest on deferred taxes, regardless of whether 
  7.15  the contract for deed is recorded or filed.  The lien for 
  7.16  deferred taxes, penalty, and interest for future years has the 
  7.17  same priority as the lien for deferred taxes, penalty, and 
  7.18  interest for the first year, which is always higher in priority 
  7.19  than any mortgages or other liens filed, recorded, or created 
  7.20  after the notice recorded or filed under section 290B.04, 
  7.21  subdivision 2.  The county treasurer or auditor shall maintain 
  7.22  records of the deferred portion and shall list the amount of 
  7.23  deferred taxes for the year and the cumulative deferral, 
  7.24  penalty, and interest for all previous years as a lien against 
  7.25  the property on the property tax statement.  In any 
  7.26  certification of unpaid taxes for a tax parcel, the county 
  7.27  auditor shall clearly distinguish between taxes payable in the 
  7.28  current year, deferred taxes, penalty, and interest, and 
  7.29  delinquent taxes.  Payment of the deferred portion becomes due 
  7.30  and owing at the time specified in section 290B.08.  Upon 
  7.31  receipt of the payment, the commissioner shall issue a receipt 
  7.32  for it to the person making the payment upon request and shall 
  7.33  notify the auditor of the county in which the parcel is located, 
  7.34  within ten days, identifying the parcel to which the payment 
  7.35  applies.  Upon receipt by the commissioner of revenue of 
  7.36  collected funds in the amount of the deferral, the state's loan 
  8.1   to the program participant is deemed paid in full. 
  8.2      Sec. 10.  Minnesota Statutes 1997 Supplement, section 
  8.3   290B.08, subdivision 2, is amended to read: 
  8.4      Subd. 2.  [PAYMENT UPON TERMINATION.] Upon the termination 
  8.5   of the deferral under subdivision 1, the amount of deferred 
  8.6   taxes, penalty, and interest plus the recording or filing fees 
  8.7   under both section 290B.04, subdivision 2, and this subdivision 
  8.8   becomes due and payable to the commissioner within 90 days of 
  8.9   termination of the deferral for terminations under subdivision 
  8.10  1, paragraph (a), clauses (1) and (2), and within one year of 
  8.11  termination of the deferral for terminations under subdivision 
  8.12  1, paragraph (a), clauses (3) and (4).  No additional interest 
  8.13  is due on the deferral or penalty if timely paid.  On receipt of 
  8.14  payment, the commissioner shall within ten days notify the 
  8.15  auditor of the county in which the parcel is located, 
  8.16  identifying the parcel to which the payment applies and shall 
  8.17  remit the recording or filing fees under section 290B.04, 
  8.18  subdivision 2, and this subdivision to the auditor.  A notice of 
  8.19  termination of deferral, containing the legal description and 
  8.20  the recording or filing data for the notice of qualification for 
  8.21  deferral under section 290B.04, subdivision 2, shall be prepared 
  8.22  and recorded or filed by the county auditor in the same office 
  8.23  in which the notice of qualification for deferral under section 
  8.24  290B.04, subdivision 2, was recorded or filed, and the county 
  8.25  auditor shall mail a copy of the notice of termination to the 
  8.26  property owner.  The property owner shall pay the recording or 
  8.27  filing fees.  Upon recording or filing of the notice of 
  8.28  termination of deferral, the notice of qualification for 
  8.29  deferral under section 290B.04, subdivision 2, and the lien 
  8.30  created by it are discharged.  If the deferral is not timely 
  8.31  paid, the penalty, interest, lien, forfeiture, and other rules 
  8.32  for the collection of ad valorem property taxes apply. 
  8.33     Sec. 11.  Minnesota Statutes 1997 Supplement, section 
  8.34  290B.09, subdivision 1, is amended to read: 
  8.35     Subdivision 1.  [DETERMINATION; PAYMENT.] The commissioner 
  8.36  of revenue shall determine the deferred amount of property tax 
  9.1   in each county, basing determinations on a review of abstracts 
  9.2   of tax lists submitted by the county auditors under section 
  9.3   275.29.  The commissioner may make changes in the abstracts of 
  9.4   tax lists as deemed necessary.  The commissioner of revenue, 
  9.5   after such review, shall pay the deferred amount of property tax 
  9.6   to each county treasurer on or before August 31.  
  9.7      At least once each year, the commissioner shall report to 
  9.8   the county auditor the total cumulative amount of deferred 
  9.9   taxes, penalty, and interest that constitute a lien against the 
  9.10  property.  
  9.11     The county treasurer shall distribute as part of the 
  9.12  October settlement the funds received as if they had been 
  9.13  collected as a part of the property tax. 
  9.14     Sec. 12.  [EFFECTIVE DATE.] 
  9.15     Sections 1 to 11 are effective for deferrals of property 
  9.16  taxes payable in 1999 and thereafter.