SF 517

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:13am

A bill for an act
relating to taxation; property; providing a property tax cap for long-term
homeowners age 65 or older; proposing coding for new law as Minnesota
Statutes, chapter 290D.

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

Section 1.

new text begin [290D.01] MAXIMUM HOMESTEAD PROPERTY TAX PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Maximum homestead property tax. new text end

new text begin The property taxes payable
by a qualified taxpayer on a qualified homestead must not exceed the lesser of (1) the
maximum tax amount determined under subdivision 2, or (2) the amount otherwise
provided by law without regard to the provisions of this chapter.
new text end

new text begin Subd. 2. new text end

new text begin Determination of maximum tax amount. new text end

new text begin The maximum tax amount is
the amount of property taxes payable in the base year, but increased by any tax amounts
attributable to (1) an increase after the base year in the square footage of the dwelling,
(2) the market value of any other improvements made after the base year exceeding 15
percent of the estimated market value of the homestead for the assessment year prior to
the year the improvements are initially assessed, or (3) voter-approved levies exceeding
the amount attributable to voter-approved levies in the base year.
new text end

Sec. 2.

new text begin [290D.02] DEFINITIONS.
new text end

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

new text begin (b) "Base year" means the taxes payable year in which the taxpayer is qualified
and in which the taxpayer has applied to the commissioner of revenue and been initially
approved for the program for taxes payable in the following year by the commissioner
under section 290D.04.
new text end

new text begin (c) "Property taxes payable" means the net property taxes payable on the qualified
homestead excluding special assessments, interest, and penalties, and before any refund
under chapter 290A.
new text end

new text begin (d) "Qualified homestead" means the dwelling occupied as the taxpayer's principal
residence and so much of the land surrounding it as is reasonably necessary for use of
the dwelling as a home and any other property used for purposes of a homestead as
defined in section 273.13, subdivisions 22 and 23, but not to exceed the immediately
surrounding one acre of land in the case of homestead property classified under section
273.13, subdivision 23. The homestead may be part of a multidwelling building and the
land on which it is built.
new text end

new text begin (e) "Qualified taxpayer" means a person who meets the program participation
requirements in section 290D.03.
new text end

Sec. 3.

new text begin [290D.03] PROGRAM PARTICIPATION REQUIREMENTS;
QUALIFIED TAXPAYER.
new text end

new text begin The qualifications for participation in the maximum homestead property tax program
are as follows:
new text end

new text begin (1) the property must be owned and occupied as a homestead in a county that has
approved the program by a person 65 years of age or older. In the case of a married
couple, both the spouses must be at least 65 years old regardless of whether the property is
titled in the name of one spouse or both spouses, or titled in another way that permits the
property to have homestead status;
new text end

new text begin (2) the taxpayer's total household income, as defined in section 290A.03, subdivision
5, for the calendar year preceding the year of the initial application may not exceed
$60,000; and
new text end

new text begin (3) the homestead must have been owned and occupied as the homestead of at least
one of the taxpayers for at least 25 years prior to the year the initial application is filed,
regardless of whether the property is titled in the name of one spouse or both spouses, or a
surviving spouse, or titled in any other way that permits the property to have homestead
classification.
new text end

Sec. 4.

new text begin [290D.04] APPLICATION.
new text end

new text begin Subdivision 1. new text end

new text begin Initial application. new text end

new text begin A qualified taxpayer may apply to the
commissioner of revenue for participation in the program. Applications are due on
or before June 1 for taxes payable the following year. A taxpayer may apply in the
year in which the taxpayer becomes 65 years old. The application, prescribed by the
commissioner of revenue, must include:
new text end

new text begin (1) the name, address, and Social Security number of the owner or owners;
new text end

new text begin (2) a copy of the property tax statement for the current payable year for the
homestead property;
new text end

new text begin (3) the initial year of ownership and occupancy as a homestead;
new text end

new text begin (4) the owner's household income for the previous calendar year; and
new text end

new text begin (5) any other information the commissioner deems necessary.
new text end

new text begin Subd. 2. new text end

new text begin Approval; notification. new text end

new text begin The commissioner shall approve an initial
application that qualifies under this chapter and shall notify the taxpayer on or before
September 1. The commissioner may investigate the facts or require confirmation in
regard to an application.
new text end

new text begin Subd. 3. new text end

new text begin Excess-income certification by taxpayer. new text end

new text begin The maximum tax amount does
not apply for any assessment year for a taxpayer whose total household income for the
previous year exceeds $60,000. A taxpayer whose initial application has been approved
under subdivision 2 shall notify the commissioner of revenue in writing by June 1 if the
taxpayer's household income for the preceding calendar year exceeded $60,000. The
certification must state the homeowner's total household income for the previous calendar
year. Participation in the program under this chapter is not allowed in any year following
the year in which a program participant filed or should have filed an excess-income
certification under this subdivision, unless the participant has filed a resumption of
eligibility certification as described in subdivision 4. On or before September 1 each year,
the commissioner shall notify the county auditor that the homestead no longer qualifies for
a maximum tax amount.
new text end

new text begin Subd. 4. new text end

new text begin Resumption of eligibility certification by taxpayer. new text end

new text begin A taxpayer who has
previously filed an excess-income certification under subdivision 3 may resume program
participation if the taxpayer's household income for a subsequent year is $60,000 or less.
If the taxpayer chooses to resume program participation, the taxpayer must notify the
commissioner of revenue in writing by June 1 of the year following a calendar year in
which the taxpayer's household income is $60,000 or less. The certification must state
the taxpayer's total household income for the previous calendar year. Once a taxpayer
resumes participation in the program under this subdivision, participation will continue
until the taxpayer files a subsequent excess-income certification under subdivision 3
or until participation is terminated under section 290D.06. On or before September 1,
the commissioner shall notify the county auditor that the homestead qualifies for the
maximum tax amount certified under section 290D.05, subdivision 1.
new text end

new text begin Subd. 5. new text end

new text begin Penalty for failure to file excess-income certification; investigations.
new text end

new text begin The commissioner shall assess a penalty equal to 20 percent of the reduction in taxes in the
case of a false application, a false certification, or in the case of a required excess-income
certification that was not filed as of the applicable due date. The commissioner shall assess
a penalty equal to 50 percent of the reduction in taxes if the taxpayer knowingly filed a
false application or certification, or knowingly failed to file a required excess-income
certification by the applicable due date. The commissioner shall assess penalties under this
section through the issuance of an order under the provisions of chapter 270C. Persons
affected by a commissioner's order issued under this section may appeal as provided in
chapter 270C.
new text end

new text begin (b) The commissioner may conduct investigations related to initial applications and
excess-income certifications required under this chapter within the period ending 3-1/2
years from the due date of the application or certification.
new text end

Sec. 5.

new text begin [290D.05] CERTIFICATION BY COMMISSIONER; CALCULATION
OF TAX, TAX RATE, AND LEVY BY COUNTY AUDITOR.
new text end

new text begin Subdivision 1. new text end

new text begin Commissioner certification. new text end

new text begin On or before September 1 of the year
of initial application, the commissioner of revenue shall certify to the county auditor of the
county in which the property is located (1) that the property qualifies for the maximum
tax amount, (2) the base year, and (3) the property taxes payable on the property in the
base year.
new text end

new text begin Subd. 2. new text end

new text begin County auditor calculations. new text end

new text begin Each year, the county auditor shall
determine the maximum homestead property tax amount for the property under section
290D.01. This is the amount that must be used for the notice of proposed property taxes
under section 275.065, subdivision 3.
new text end

new text begin Subd. 3. new text end

new text begin Adjustment of tax rate and levy. new text end

new text begin (a) If requested by the taxing
jurisdiction, the county auditor may estimate the total loss of revenue to the taxing
jurisdiction for taxes levied in the current year under this chapter and adjust the tax rate
accordingly. If the adjustment to the tax rate is made under this subdivision, in the
following levy year the county auditor must adjust the levy of the taxing district to
compensate for the amount of variance between the estimated and actual loss of revenues.
new text end

new text begin (b) If an adjustment is not made under paragraph (a), a taxing jurisdiction may
increase its levy in the following year by the amount of any revenue loss under provisions
of this chapter as certified by the county auditor.
new text end

new text begin (c) A levy adjustment under paragraph (a) or (b) is not subject to any levy limitations.
new text end

Sec. 6.

new text begin [290D.06] TERMINATION OF PROGRAM PARTICIPATION.
new text end

new text begin Participation in the maximum homestead property tax program under this chapter
terminates when one of the following occurs:
new text end

new text begin (1) the property is sold or transferred;
new text end

new text begin (2) all qualifying homeowners have died;
new text end

new text begin (3) the homeowner notifies the commissioner in writing that the homeowner cancels
participation in the program; or
new text end

new text begin (4) the property no longer qualifies as a homestead.
new text end

Sec. 7. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 6 are effective for taxes payable in 2010 and thereafter.
new text end