HF 4841

as introduced - 92nd Legislature (2021 - 2022) Posted on 04/29/2022 11:21pm

A bill for an act
relating to taxation; property; modifying the valuation limits for the homestead
market value exclusion; establishing levy limits; amending Minnesota Statutes
2020, section 273.13, subdivision 35.

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

Section 1.

Minnesota Statutes 2020, section 273.13, subdivision 35, is amended to read:

Subd. 35.

Homestead market value exclusion.

(a) Prior to determining a property's
net tax capacity under this section, property classified as class 1a or 1b under subdivision
22, and the portion of property classified as class 2a under subdivision 23 consisting of the
house, garage, and surrounding one acre of land, shall be eligible for a market value exclusion
as determined under paragraph (b) new text begin or (c) new text end .

(b) new text begin For assessment year 2022 and assessment year 2025 and thereafter, the exclusion
under this subdivision shall be determined under this paragraph. new text end For a homestead valued at
$76,000 or less, the exclusion is 40 percent of market value. For a homestead valued between
$76,000 and $413,800, the exclusion is $30,400 minus nine percent of the valuation over
$76,000. For a homestead valued at $413,800 or more, there is no valuation exclusion. The
valuation exclusion shall be rounded to the nearest whole dollar, and may not be less than
zero.

(c) new text begin For assessment years 2023 and 2024, the exclusion under this subdivision shall be
determined under this paragraph. For a homestead valued at $107,450 or less, the exclusion
is 40 percent of market value. For a homestead valued between $107,450 and $585,000,
the exclusion is $42,980 minus nine percent of the valuation over $107,450. For a homestead
valued at $585,000 or more, there is no valuation exclusion. The valuation exclusion shall
be rounded to the nearest whole dollar and may not be less than zero.
new text end

new text begin (d) new text end Any valuation exclusions or adjustments under section 273.11 shall be applied prior
to determining the amount of the valuation exclusion under this subdivision.

deleted text begin (d) deleted text end new text begin (e) new text end In the case of a property that is classified as part homestead and part nonhomestead,
(i) the exclusion shall apply only to the homestead portion of the property, but (ii) 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 solely
because not all the spouses of owners occupy the property, the exclusion 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 spouse is one-half of the couple's ownership percentage.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with assessment year 2023
and thereafter.
new text end

Sec. 2. new text begin PROPERTY TAX REFUNDS; TEMPORARY INCREASE.
new text end

new text begin Subdivision 1. new text end

new text begin Temporary increase in refund amounts. new text end

new text begin Notwithstanding any law to
the contrary, for refunds based on property taxes payable in 2023 and 2024, the amount of
a claimant's property tax refund under Minnesota Statutes, section 290A.04, subdivisions
2 and 2h, is increased as provided in this section.
new text end

new text begin Subd. 2. new text end

new text begin Homestead credit state refund. new text end

new text begin (a) The amount of a taxpayer's homestead
credit state refund under Minnesota Statutes, section 290A.04, subdivision 2, must be
calculated with the following modifications to the credit formula:
new text end

new text begin (1) the maximum state refund amount, after the adjustment for inflation under Minnesota
Statutes, section 290A.04, subdivision 4, is increased by $500; and
new text end

new text begin (2) the percent paid by a claimant is reduced by five percentage points.
new text end

new text begin (b) A claimant with household income in excess of $126,290, but not more than $155,000,
is eligible for a refund. The parameters used to calculate the refund are as follows:
new text end

new text begin (1) for a claimant with household income in excess of $126,290, but not more than
$135,000, the following parameters apply:
new text end

new text begin (i) the percent of income is 2.6 percent;
new text end

new text begin (ii) the percent paid by a claimant is 50 percent; and
new text end

new text begin (iii) the maximum state refund is $850;
new text end

new text begin (2) for a claimant with household income in excess of $135,000, but not more than
$145,000, the following parameters apply:
new text end

new text begin (i) the percent of income is 2.7 percent;
new text end

new text begin (ii) the percent paid by a claimant is 50 percent; and
new text end

new text begin (iii) the maximum state refund is $600; and
new text end

new text begin (3) for a claimant with household income in excess of $145,000 but not more than
$155,000, the following parameters apply:
new text end

new text begin (i) the percent of income is 2.8 percent;
new text end

new text begin (ii) the percent paid by a claimant is 50 percent; and
new text end

new text begin (iii) the maximum state refund is $350.
new text end

new text begin Subd. 3. new text end

new text begin Additional refund. new text end

new text begin The amount of a taxpayer's additional refund under
Minnesota Statutes, section 290A.04, subdivision 2h, must be calculated by:
new text end

new text begin (1) substituting "ten percent" for "12 percent" in the credit formula; and
new text end

new text begin (2) substituting "$2,000" for "$1,000" for the maximum refund allowed.
new text end

new text begin Subd. 4. new text end

new text begin Sunset. new text end

new text begin This section expires for refunds based on property taxes payable in
2025 and later.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for refunds based on property taxes
payable in 2023 and 2024.
new text end