SF 1224

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; providing a property tax 
  1.3             deferral for senior citizens who meet income 
  1.4             requirements; appropriating money; amending Minnesota 
  1.5             Statutes 1996, sections 270B.12, by adding a 
  1.6             subdivision; 275.065, subdivision 3; and 276.04, 
  1.7             subdivision 2; proposing coding for new law as 
  1.8             Minnesota Statutes, chapter 290B. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1996, section 270B.12, is 
  1.11  amended by adding a subdivision to read: 
  1.12     Subd. 12.  [PROPERTY TAX DEFERRAL.] The commissioner may 
  1.13  disclose to a county auditor and treasurer, and to their 
  1.14  designated agents or employees, the annual deferral amounts and 
  1.15  the cumulative deferral and interest as determined by the 
  1.16  commissioner under chapter 290B for each parcel of homestead 
  1.17  property in the county that is enrolled in the senior citizen 
  1.18  property tax deferral program under chapter 290B. 
  1.19     Sec. 2.  Minnesota Statutes 1996, section 275.065, 
  1.20  subdivision 3, is amended to read: 
  1.21     Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
  1.22  county auditor shall prepare and the county treasurer shall 
  1.23  deliver after November 10 and on or before November 24 each 
  1.24  year, by first class mail to each taxpayer at the address listed 
  1.25  on the county's current year's assessment roll, a notice of 
  1.26  proposed property taxes and, in the case of a town, final 
  1.27  property taxes.  
  2.1      (b) The commissioner of revenue shall prescribe the form of 
  2.2   the notice. 
  2.3      (c) The notice must inform taxpayers that it contains the 
  2.4   amount of property taxes each taxing authority other than a town 
  2.5   proposes to collect for taxes payable the following year and, 
  2.6   for a town, the amount of its final levy.  It must clearly state 
  2.7   that each taxing authority, including regional library districts 
  2.8   established under section 134.201, and including the 
  2.9   metropolitan taxing districts as defined in paragraph (i), but 
  2.10  excluding all other special taxing districts and towns, will 
  2.11  hold a public meeting to receive public testimony on the 
  2.12  proposed budget and proposed or final property tax levy, or, in 
  2.13  case of a school district, on the current budget and proposed 
  2.14  property tax levy.  It must clearly state the time and place of 
  2.15  each taxing authority's meeting and an address where comments 
  2.16  will be received by mail.  
  2.17     (d) The notice must state for each parcel: 
  2.18     (1) the market value of the property as determined under 
  2.19  section 273.11, and used for computing property taxes payable in 
  2.20  the following year and for taxes payable in the current year; 
  2.21  and, in the case of residential property, whether the property 
  2.22  is classified as homestead or nonhomestead.  The notice must 
  2.23  clearly inform taxpayers of the years to which the market values 
  2.24  apply and that the values are final values; 
  2.25     (2) by county, city or town, school district excess 
  2.26  referenda levy, remaining school district levy, regional library 
  2.27  district, if in existence, the total of the metropolitan special 
  2.28  taxing districts as defined in paragraph (i) and the sum of the 
  2.29  remaining special taxing districts, and as a total of the taxing 
  2.30  authorities, including all special taxing districts, the 
  2.31  proposed or, for a town, final net tax on the property for taxes 
  2.32  payable the following year and the actual tax for taxes payable 
  2.33  the current year.  If a school district has certified under 
  2.34  section 124A.03, subdivision 2, that a referendum will be held 
  2.35  in the school district at the November general election, the 
  2.36  county auditor must note next to the school district's proposed 
  3.1   amount that a referendum is pending and that, if approved by the 
  3.2   voters, the tax amount may be higher than shown on the notice.  
  3.3   For the purposes of this subdivision, "school district excess 
  3.4   referenda levy" means school district taxes for operating 
  3.5   purposes approved at referendums, including those taxes based on 
  3.6   net tax capacity as well as those based on market value.  
  3.7   "School district excess referenda levy" does not include school 
  3.8   district taxes for capital expenditures approved at referendums 
  3.9   or school district taxes to pay for the debt service on bonds 
  3.10  approved at referenda.  In the case of the city of Minneapolis, 
  3.11  the levy for the Minneapolis library board and the levy for 
  3.12  Minneapolis park and recreation shall be listed separately from 
  3.13  the remaining amount of the city's levy.  In the case of a 
  3.14  parcel where tax increment or the fiscal disparities areawide 
  3.15  tax under chapter 276A or 473F applies, the proposed tax levy on 
  3.16  the captured value or the proposed tax levy on the tax capacity 
  3.17  subject to the areawide tax must each be stated separately and 
  3.18  not included in the sum of the special taxing districts; and 
  3.19     (3) the increase or decrease in the amounts in clause (2) 
  3.20  from taxes payable in the current year to proposed or, for a 
  3.21  town, final taxes payable the following year, expressed as a 
  3.22  dollar amount and as a percentage. 
  3.23     For purposes of this section, the amount of the tax on 
  3.24  homesteads qualifying under the senior citizens' property tax 
  3.25  deferral program under chapter 290B is the total amount of 
  3.26  property tax before subtraction of the deferred property tax 
  3.27  amount. 
  3.28     (e) The notice must clearly state that the proposed or 
  3.29  final taxes do not include the following: 
  3.30     (1) special assessments; 
  3.31     (2) levies approved by the voters after the date the 
  3.32  proposed taxes are certified, including bond referenda, school 
  3.33  district levy referenda, and levy limit increase referenda; 
  3.34     (3) amounts necessary to pay cleanup or other costs due to 
  3.35  a natural disaster occurring after the date the proposed taxes 
  3.36  are certified; 
  4.1      (4) amounts necessary to pay tort judgments against the 
  4.2   taxing authority that become final after the date the proposed 
  4.3   taxes are certified; and 
  4.4      (5) the contamination tax imposed on properties which 
  4.5   received market value reductions for contamination. 
  4.6      (f) Except as provided in subdivision 7, failure of the 
  4.7   county auditor to prepare or the county treasurer to deliver the 
  4.8   notice as required in this section does not invalidate the 
  4.9   proposed or final tax levy or the taxes payable pursuant to the 
  4.10  tax levy. 
  4.11     (g) If the notice the taxpayer receives under this section 
  4.12  lists the property as nonhomestead and the homeowner provides 
  4.13  satisfactory documentation to the county assessor that the 
  4.14  property is owned and used as the owner's homestead, the 
  4.15  assessor shall reclassify the property to homestead for taxes 
  4.16  payable in the following year. 
  4.17     (h) In the case of class 4 residential property used as a 
  4.18  residence for lease or rental periods of 30 days or more, the 
  4.19  taxpayer must either: 
  4.20     (1) mail or deliver a copy of the notice of proposed 
  4.21  property taxes to each tenant, renter, or lessee; or 
  4.22     (2) post a copy of the notice in a conspicuous place on the 
  4.23  premises of the property.  
  4.24     The notice must be mailed or posted by the taxpayer by 
  4.25  November 27 or within three days of receipt of the notice, 
  4.26  whichever is later.  A taxpayer may notify the county treasurer 
  4.27  of the address of the taxpayer, agent, caretaker, or manager of 
  4.28  the premises to which the notice must be mailed in order to 
  4.29  fulfill the requirements of this paragraph. 
  4.30     (i) For purposes of this subdivision, subdivisions 5a and 
  4.31  6, "metropolitan special taxing districts" means the following 
  4.32  taxing districts in the seven-county metropolitan area that levy 
  4.33  a property tax for any of the specified purposes listed below: 
  4.34     (1) metropolitan council under section 473.132, 473.167, 
  4.35  473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 
  4.36     (2) metropolitan airports commission under section 473.667, 
  5.1   473.671, or 473.672; and 
  5.2      (3) metropolitan mosquito control commission under section 
  5.3   473.711. 
  5.4      For purposes of this section, any levies made by the 
  5.5   regional rail authorities in the county of Anoka, Carver, 
  5.6   Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
  5.7   398A shall be included with the appropriate county's levy and 
  5.8   shall be discussed at that county's public hearing. 
  5.9      (j) For taxes levied in 1996, payable in 1997 only, in the 
  5.10  case of a statutory or home rule charter city or town that 
  5.11  exercises the local levy option provided in section 473.388, 
  5.12  subdivision 7, the notice of its proposed taxes may include a 
  5.13  statement of the amount by which its proposed tax increase for 
  5.14  taxes payable in 1997 is attributable to its exercise of that 
  5.15  option, together with a statement that the levy of the 
  5.16  metropolitan council was decreased by a similar amount because 
  5.17  of the exercise of that option. 
  5.18     Sec. 3.  Minnesota Statutes 1996, section 276.04, 
  5.19  subdivision 2, is amended to read: 
  5.20     Subd. 2.  [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 
  5.21  shall provide for the printing of the tax statements.  The 
  5.22  commissioner of revenue shall prescribe the form of the property 
  5.23  tax statement and its contents.  The statement must contain a 
  5.24  tabulated statement of the dollar amount due to each taxing 
  5.25  authority from the parcel of real property for which a 
  5.26  particular tax statement is prepared.  The dollar amounts due 
  5.27  the county, township or municipality, the total of the 
  5.28  metropolitan special taxing districts as defined in section 
  5.29  275.065, subdivision 3, paragraph (i), school district excess 
  5.30  referenda levy, remaining school district levy, and the total of 
  5.31  other voter approved referenda levies based on market value 
  5.32  under section 275.61 must be separately stated.  The amounts due 
  5.33  all other special taxing districts, if any, may be aggregated.  
  5.34  The amount of the tax on homesteads qualifying under the senior 
  5.35  citizens' property tax deferral program under chapter 290B is 
  5.36  the total amount of property tax before subtraction of the 
  6.1   deferred property tax amount.  For the purposes of this 
  6.2   subdivision, "school district excess referenda levy" means 
  6.3   school district taxes for operating purposes approved at 
  6.4   referenda, including those taxes based on net tax capacity as 
  6.5   well as those based on market value.  "School district excess 
  6.6   referenda levy" does not include school district taxes for 
  6.7   capital expenditures approved at referendums or school district 
  6.8   taxes to pay for the debt service on bonds approved at 
  6.9   referenda.  The amount of the tax on contamination value imposed 
  6.10  under sections 270.91 to 270.98, if any, must also be separately 
  6.11  stated.  The dollar amounts, including the dollar amount of any 
  6.12  special assessments, may be rounded to the nearest even whole 
  6.13  dollar.  For purposes of this section whole odd-numbered dollars 
  6.14  may be adjusted to the next higher even-numbered dollar.  The 
  6.15  amount of market value excluded under section 273.11, 
  6.16  subdivision 16, if any, must also be listed on the tax 
  6.17  statement.  The statement shall include the following sentence, 
  6.18  printed in upper case letters in boldface print:  "THE STATE OF 
  6.19  MINNESOTA DOES NOT RECEIVE ANY PROPERTY TAX REVENUES.  THE STATE 
  6.20  OF MINNESOTA REDUCES YOUR PROPERTY TAX BY PAYING CREDITS AND 
  6.21  REIMBURSEMENTS TO LOCAL UNITS OF GOVERNMENT."  
  6.22     (b) The property tax statements for manufactured homes and 
  6.23  sectional structures taxed as personal property shall contain 
  6.24  the same information that is required on the tax statements for 
  6.25  real property.  
  6.26     (c) Real and personal property tax statements must contain 
  6.27  the following information in the order given in this paragraph.  
  6.28  The information must contain the current year tax information in 
  6.29  the right column with the corresponding information for the 
  6.30  previous year in a column on the left: 
  6.31     (1) the property's estimated market value under section 
  6.32  273.11, subdivision 1; 
  6.33     (2) the property's taxable market value after reductions 
  6.34  under section 273.11, subdivisions 1a and 16; 
  6.35     (3) the property's gross tax, calculated by multiplying the 
  6.36  property's gross tax capacity times the total local tax rate and 
  7.1   adding to the result the sum of the aids enumerated in clause 
  7.2   (4); 
  7.3      (4) a total of the following aids: 
  7.4      (i) education aids payable under chapters 124 and 124A; 
  7.5      (ii) local government aids for cities, towns, and counties 
  7.6   under chapter 477A; and 
  7.7      (iii) disparity reduction aid under section 273.1398; 
  7.8      (5) for homestead residential and agricultural properties, 
  7.9   the homestead and agricultural credit aid apportioned to the 
  7.10  property.  This amount is obtained by multiplying the total 
  7.11  local tax rate by the difference between the property's gross 
  7.12  and net tax capacities under section 273.13.  This amount must 
  7.13  be separately stated and identified as "homestead and 
  7.14  agricultural credit."  For purposes of comparison with the 
  7.15  previous year's amount for the statement for taxes payable in 
  7.16  1990, the statement must show the homestead credit for taxes 
  7.17  payable in 1989 under section 273.13, and the agricultural 
  7.18  credit under section 273.132 for taxes payable in 1989; 
  7.19     (6) any credits received under sections 273.119; 273.123; 
  7.20  273.135; 273.1391; 273.1398, subdivision 4; 469.171; and 
  7.21  473H.10, except that the amount of credit received under section 
  7.22  273.135 must be separately stated and identified as "taconite 
  7.23  tax relief"; and 
  7.24     (7) any deferred property tax amount under the senior 
  7.25  citizens' property tax deferral program under chapter 290B, as 
  7.26  well as the total deferred amount plus accrued interest; and 
  7.27     (8) the net tax payable in the manner required in paragraph 
  7.28  (a). 
  7.29     (d) If the county uses envelopes for mailing property tax 
  7.30  statements and if the county agrees, a taxing district may 
  7.31  include a notice with the property tax statement notifying 
  7.32  taxpayers when the taxing district will begin its budget 
  7.33  deliberations for the current year, and encouraging taxpayers to 
  7.34  attend the hearings.  If the county allows notices to be 
  7.35  included in the envelope containing the property tax statement, 
  7.36  and if more than one taxing district relative to a given 
  8.1   property decides to include a notice with the tax statement, the 
  8.2   county treasurer or auditor must coordinate the process and may 
  8.3   combine the information on a single announcement.  
  8.4      The commissioner of revenue shall certify to the county 
  8.5   auditor the actual or estimated aids enumerated in clauses (3) 
  8.6   and (4) that local governments will receive in the following 
  8.7   year.  In the case of a county containing a city of the first 
  8.8   class, for taxes levied in 1991, and for all counties for taxes 
  8.9   levied in 1992 and thereafter, the commissioner must certify 
  8.10  this amount by September 1.  
  8.11     Sec. 4.  [290B.01] [PURPOSE.] 
  8.12     Minnesota's system of ad valorem property taxation does not 
  8.13  adequately recognize the unique financial circumstances of 
  8.14  homestead property owned and occupied by low-income senior 
  8.15  citizens.  It is therefore declared to be in the public interest 
  8.16  of this state to stabilize tax burdens on homestead property 
  8.17  owned by qualifying low-income senior citizens through a 
  8.18  deferral of certain property taxes. 
  8.19     Sec. 5.  [290B.02] [CITATION.] 
  8.20     This program shall be named the "senior citizens' property 
  8.21  tax deferral program." 
  8.22     Sec. 6.  [290B.03] [DEFERRAL OF PROPERTY TAXES.] 
  8.23     Subdivision 1.  [PROGRAM QUALIFICATIONS.] The 
  8.24  qualifications for the senior citizens' property tax deferral 
  8.25  program are as follows: 
  8.26     (1) the property must be owned and occupied as a homestead 
  8.27  by a person 65 years of age or older.  In the case of a married 
  8.28  couple, both of the spouses must be at least 65 years old at the 
  8.29  time the first property tax deferral is granted, regardless of 
  8.30  whether the property is titled in the name of one spouse or both 
  8.31  spouses, or titled in another way that permits the property to 
  8.32  have homestead status; 
  8.33     (2) the total household income of the qualifying 
  8.34  homeowners, as defined in section 290A.03, subdivision 5, for 
  8.35  the calendar year preceding the year of the initial application 
  8.36  may not exceed $30,000; 
  9.1      (3) the homestead must have been owned and occupied as the 
  9.2   homestead of at least one of the qualifying homeowners for at 
  9.3   least 15 years prior to the year the initial application is 
  9.4   filed; 
  9.5      (4) there are no delinquent property taxes, penalties, or 
  9.6   interest on the homesteaded property; 
  9.7      (5) there are no delinquent special assessments on the 
  9.8   homesteaded property; 
  9.9      (6) there are no state or federal tax liens or judgment 
  9.10  liens on the homesteaded property; 
  9.11     (7) there are no mortgages or other liens on the property 
  9.12  that secure future advances, except for those subject to credit 
  9.13  limits that result in compliance with clause (8); and 
  9.14     (8) the total unpaid balances of debts secured by mortgages 
  9.15  and other liens on the property, including unpaid special 
  9.16  assessments, but not including property taxes payable during the 
  9.17  year does not exceed 30 percent of the assessor's estimated 
  9.18  market value for the year. 
  9.19     Subd. 2.  [QUALIFYING HOMESTEAD; DEFINED.] Qualifying 
  9.20  homestead property is defined as the dwelling occupied as the 
  9.21  homeowner's principal residence and so much of the land 
  9.22  surrounding it, not exceeding one acre, as is reasonably 
  9.23  necessary for use of the dwelling as a home and any other 
  9.24  property used for purposes of a homestead as defined in section 
  9.25  273.13, subdivisions 22 and 23.  The homestead may be part of a 
  9.26  multidwelling building and the land on which it is built. 
  9.27     Sec. 7.  [290B.04] [APPLICATION FOR DEFERRAL.] 
  9.28     Subdivision 1.  [INITIAL APPLICATION.] A taxpayer meeting 
  9.29  the program qualifications under section 290B.03 may apply to 
  9.30  the commissioner of revenue for the deferral of taxes.  
  9.31  Applications are due on or before July 1 for deferral of any of 
  9.32  the following year's property taxes.  A taxpayer may apply in 
  9.33  the year in which the taxpayer becomes 65 years old, provided 
  9.34  that no deferral of property taxes will be made until the 
  9.35  calendar year after the taxpayer becomes 65 years old.  The 
  9.36  application, which shall be prescribed by the commissioner of 
 10.1   revenue, shall include the following items and any other 
 10.2   information which the commissioner deems necessary: 
 10.3      (1) the name, address, and social security number of the 
 10.4   owner or owners; 
 10.5      (2) a copy of the property tax statement for the current 
 10.6   payable year for the homesteaded property; 
 10.7      (3) the initial year of ownership and occupancy as a 
 10.8   homestead; 
 10.9      (4) the owner's household income for the previous calendar 
 10.10  year; and 
 10.11     (5) information on any mortgage loans or other amounts 
 10.12  secured by mortgages or other liens against the property, for 
 10.13  which purpose the commissioner may require the applicant to 
 10.14  provide a copy of the mortgage note, the mortgage, or a 
 10.15  statement of the balance owing on the mortgage loan provided by 
 10.16  the mortgage holder.  The commissioner may require the 
 10.17  appropriate documents in connection with obtaining and 
 10.18  confirming information on unpaid amounts secured by other liens. 
 10.19     The application must state that program participation is 
 10.20  voluntary.  The application must also state that the deferred 
 10.21  amount depends directly on the applicant's household income, and 
 10.22  that program participation includes authorization for the 
 10.23  deferred amount for each year and the cumulative deferral and 
 10.24  interest to appear on each year's property tax statement as 
 10.25  public data. 
 10.26     Subd. 2.  [APPROVAL; RECORDING.] The commissioner shall 
 10.27  approve all initial applications that qualify under this chapter 
 10.28  and shall notify qualifying homeowners on or before December 1.  
 10.29  The commissioner may investigate the facts or require 
 10.30  confirmation in regard to an application.  The commissioner 
 10.31  shall record or file a notice of qualification for deferral, 
 10.32  including the names of the qualifying homeowners and a legal 
 10.33  description of the property, in the office of the county 
 10.34  recorder, or registrar of titles, whichever is applicable, in 
 10.35  the county where the qualifying property is located.  The notice 
 10.36  must state that it serves as a notice of lien and that it 
 11.1   includes deferrals under this section for future years.  The 
 11.2   homeowner shall pay the recording or filing fees. 
 11.3      Subd. 3.  [ANNUAL CERTIFICATION BY TAXPAYER.] Annually on 
 11.4   or before July 1, a taxpayer whose initial application has been 
 11.5   approved under subdivision 2, shall complete the certification 
 11.6   form and return it to the commissioner of revenue.  The 
 11.7   certification must state whether or not the taxpayer wishes to 
 11.8   have property taxes deferred for the following year provided the 
 11.9   taxes exceed the maximum property tax amount under section 
 11.10  290B.05.  If the taxpayer does wish to have property taxes 
 11.11  deferred, the certification must state the homeowner's total 
 11.12  household income for the previous calendar year and any other 
 11.13  information which the commissioner deems necessary.  
 11.14     Sec. 8.  [290B.05] [MAXIMUM PROPERTY TAX AMOUNT AND 
 11.15  DEFERRED PROPERTY TAX AMOUNT.] 
 11.16     Subdivision 1.  [DETERMINATION BY COMMISSIONER.] The 
 11.17  commissioner shall annually determine the qualifying homeowner's 
 11.18  "maximum property tax amount" and "maximum allowable deferral."  
 11.19  The maximum property tax amount calculated for taxes payable in 
 11.20  the following year is equal to five percent of the homeowner's 
 11.21  total household income for the previous calendar year.  No tax 
 11.22  may be deferred for any homeowner whose total household income 
 11.23  for the previous year exceeds $30,000.  No tax shall be deferred 
 11.24  in any year in which the homeowner does not meet the program 
 11.25  qualifications in section 290B.03.  The maximum allowable total 
 11.26  deferral is equal to 75 percent of the assessor's estimated 
 11.27  market value for the year, less (1) the balance of any mortgage 
 11.28  loans and other amounts secured by liens against the property at 
 11.29  the time of application, including any unpaid special 
 11.30  assessments but not including property taxes payable during the 
 11.31  year; and (2) any outstanding deferral and interest.  
 11.32     Subd. 2.  [CERTIFICATION BY COMMISSIONER.] On or before 
 11.33  December 1, the commissioner shall certify to the county auditor 
 11.34  of the county in which the qualifying homestead is located (1) 
 11.35  the maximum property tax amount; (2) the maximum allowable 
 11.36  deferral for the year; and (3) the cumulative deferral and 
 12.1   interest for all years preceding the next taxes payable year. 
 12.2      Subd. 3.  [CALCULATION OF DEFERRED PROPERTY TAX AMOUNT.] 
 12.3   When final property tax amounts for the following year have been 
 12.4   determined, the county auditor shall calculate the "deferred 
 12.5   property tax amount."  The deferred property tax amount is equal 
 12.6   to the lesser of (1) the maximum allowable deferral for the 
 12.7   year; or (2) the difference between the total amount of property 
 12.8   taxes levied upon the qualifying homestead by all taxing 
 12.9   jurisdictions and the maximum property tax amount.  Any special 
 12.10  assessments levied by any local unit of government must not be 
 12.11  included in the total tax used to calculate the deferred tax 
 12.12  amount.  No deferral of the current year's property taxes is 
 12.13  allowed if there are any delinquent property taxes or delinquent 
 12.14  special assessments for any previous year.  Any tax attributable 
 12.15  to new improvements made to the property after the initial 
 12.16  application has been approved under section 290B.04, subdivision 
 12.17  2, must be excluded when determining any subsequent deferred 
 12.18  property tax amount.  The county auditor shall annually, on or 
 12.19  before April 15, certify to the commissioner of revenue the 
 12.20  property tax deferral amounts determined under this subdivision 
 12.21  by property and by owner.  
 12.22     Subd. 4.  [LIMITATION ON TOTAL AMOUNT OF DEFERRED TAXES.] 
 12.23  On or before September 1 of each year, the commissioner shall 
 12.24  request, and each county or city assessor shall provide, the 
 12.25  current year's estimated market value of each property on the 
 12.26  list supplied by the commissioner that may be eligible for 
 12.27  deferral under this section for taxes payable in the following 
 12.28  year.  The total amount of deferred taxes and interest on a 
 12.29  property, when added to (1) the balance owing on any mortgages 
 12.30  on the property at the time of initial application; and (2) 
 12.31  other amounts secured by liens on the property at the time of 
 12.32  the initial application, may not exceed 75 percent of the 
 12.33  assessor's current estimated market value of the property. 
 12.34     Sec. 9.  [290B.06] [PROPERTY TAX REFUNDS.] 
 12.35     For purposes of qualifying for the regular property tax 
 12.36  refund or the special refund for homeowners under chapter 290A, 
 13.1   the qualifying tax is the full amount of taxes, including the 
 13.2   deferred portion of the tax.  In any year in which a program 
 13.3   participant chooses to have property taxes deferred under this 
 13.4   section, any regular or special property tax refund awarded 
 13.5   based upon those property taxes must be taken first as a 
 13.6   deduction from the amount of the deferred tax for that year, and 
 13.7   second as a deduction against any outstanding deferral from 
 13.8   previous years, rather than as a cash payment to the homeowner.  
 13.9   The commissioner shall cancel any current year's deferral or 
 13.10  previous years' deferral and interest that is offset by the 
 13.11  property tax refunds. If the total of the regular and the 
 13.12  special property tax refund amounts exceeds the sum of the 
 13.13  deferred tax for the current year and cumulative deferred tax 
 13.14  and interest for previous years, the commissioner shall then 
 13.15  remit the excess amount to the homeowner.  On or before the date 
 13.16  on which the commissioner issues property tax refunds, the 
 13.17  commissioner shall notify program participants of any reduction 
 13.18  in the deferred amount for the current and previous years 
 13.19  resulting from property tax refunds. 
 13.20     Sec. 10.  [290B.07] [LIEN; DEFERRED PORTION.] 
 13.21     Payment by the state to the county treasurer of taxes 
 13.22  deferred under this section is deemed a loan from the state to 
 13.23  the program participant.  The commissioner must compute the 
 13.24  interest as provided in section 270.75, subdivision 5, and 
 13.25  maintain records of the total deferred amount and interest for 
 13.26  each participant.  Interest shall accrue beginning September 1 
 13.27  of the payable year for which the taxes are deferred.  The lien 
 13.28  created under section 272.31 continues to secure payment by the 
 13.29  taxpayer, or by the taxpayer's successors or assigns, of the 
 13.30  amount deferred, including interest, with respect to all years 
 13.31  for which amounts are deferred.  The lien for deferred taxes and 
 13.32  interest has the same priority as any other lien under section 
 13.33  272.31, except that liens, including mortgages, recorded or 
 13.34  filed prior to the recording or filing of the notice under 
 13.35  section 290B.04, subdivision 2, have priority over the lien for 
 13.36  deferred taxes and interest.  A seller's interest in a contract 
 14.1   for deed, in which a qualifying homeowner is the purchaser or an 
 14.2   assignee of the purchaser, has priority over deferred taxes and 
 14.3   interest on deferred taxes, regardless of whether the contract 
 14.4   for deed is recorded or filed.  The lien for deferred taxes and 
 14.5   interest for future years has the same priority as the lien for 
 14.6   deferred taxes and interest for the first year, which is always 
 14.7   higher in priority than any mortgages or other liens filed, 
 14.8   recorded, or created after the notice recorded or filed under 
 14.9   section 290B.04, subdivision 2.  The county treasurer or auditor 
 14.10  shall maintain records of the deferred portion and shall list 
 14.11  the amount of deferred taxes for the year and the cumulative 
 14.12  deferral and interest for all previous years as a lien against 
 14.13  the property on the property tax statement.  In any 
 14.14  certification of unpaid taxes for a tax parcel, the county 
 14.15  auditor shall clearly distinguish between taxes payable in the 
 14.16  current year, deferred taxes and interest, and delinquent 
 14.17  taxes.  Payment of the deferred portion becomes due and owing at 
 14.18  the time specified in section 290B.08.  Upon receipt of the 
 14.19  payment, the commissioner shall issue a receipt for it to the 
 14.20  person making the payment upon request and shall notify the 
 14.21  auditor of the county in which the parcel is located, within ten 
 14.22  days, identifying the parcel to which the payment applies.  Upon 
 14.23  receipt by the commissioner of revenue of collected funds in the 
 14.24  amount of the deferral, the state's loan to the program 
 14.25  participant is deemed paid in full. 
 14.26     Sec. 11.  [290B.08] [TERMINATION OF DEFERRAL; PAYMENT OF 
 14.27  DEFERRED TAXES.] 
 14.28     Subdivision 1.  [TERMINATION.] (a) The deferral of taxes 
 14.29  granted under this chapter terminates when one of the following 
 14.30  occurs: 
 14.31     (1) the property is sold or transferred; 
 14.32     (2) the death of the qualifying homeowner(s); 
 14.33     (3) the homeowner notifies the commissioner in writing that 
 14.34  the homeowner desires to discontinue the deferral; or 
 14.35     (4) the property no longer qualifies as a homestead. 
 14.36     (b) A property is not terminated from the program because 
 15.1   no deferred property tax amount is determined on the homestead 
 15.2   for any given year after the homestead's initial enrollment into 
 15.3   the program. 
 15.4      Subd. 2.  [PAYMENT UPON TERMINATION.] Upon the termination 
 15.5   of the deferral under subdivision 1, the amount of deferred 
 15.6   taxes and interest plus the recording or filing fees under both 
 15.7   section 290B.04, subdivision 2, and this subdivision becomes due 
 15.8   and payable to the commissioner within 90 days of termination of 
 15.9   the deferral.  No additional interest is due on the deferral if 
 15.10  timely paid.  On receipt of payment, the commissioner shall 
 15.11  within ten days notify the auditor of the county in which the 
 15.12  parcel is located, identifying the parcel to which the payment 
 15.13  applies and shall remit the recording or filing fees under 
 15.14  section 290B.04, subdivision 2, and this subdivision to the 
 15.15  auditor.  A notice of termination of deferral, containing the 
 15.16  legal description and the recording or filing data for the 
 15.17  notice of qualification for deferral under section 290B.04, 
 15.18  subdivision 2, shall be prepared and recorded or filed by the 
 15.19  county auditor in the same office in which the notice of 
 15.20  qualification for deferral under section 290B.04, subdivision 2, 
 15.21  was recorded or filed, and the county auditor shall mail a copy 
 15.22  of the notice of termination to the property owner.  The 
 15.23  property owner shall pay the recording or filing fees.  Upon 
 15.24  recording or filing of the notice of termination of deferral, 
 15.25  the notice of qualification for deferral under section 290B.04, 
 15.26  subdivision 2, and the lien created by it are discharged.  If 
 15.27  the deferral is not timely paid, the penalty, interest, lien, 
 15.28  forfeiture, and other rules for the collection of ad valorem 
 15.29  property taxes apply. 
 15.30     Sec. 12.  [290B.09] [STATE REIMBURSEMENT.] 
 15.31     Subdivision 1.  [DETERMINATION; PAYMENT.] The commissioner 
 15.32  of revenue shall determine the deferred amount of property tax 
 15.33  in each county, basing determinations on a review of abstracts 
 15.34  of tax lists submitted by the county auditors under section 
 15.35  275.29.  The commissioner may make changes in the abstracts of 
 15.36  tax lists as deemed necessary.  The commissioner of revenue, 
 16.1   after such review, shall pay the deferred amount of property tax 
 16.2   to each county treasurer on or before August 31.  
 16.3      At least once each year, the commissioner shall report to 
 16.4   the county auditor the total cumulative amount of deferred taxes 
 16.5   and interest that constitute a lien against the property.  
 16.6      The county treasurer shall distribute as part of the 
 16.7   October settlement the funds received as if they had been 
 16.8   collected as a part of the property tax. 
 16.9      Subd. 2.  [APPROPRIATION.] An amount sufficient to pay the 
 16.10  total amount of property tax determined under subdivision 1 is 
 16.11  annually appropriated from the general fund to the commissioner 
 16.12  of revenue. 
 16.13     Sec. 13.  [EFFECTIVE DATE.] 
 16.14     Sections 1 to 12 are effective the day following final 
 16.15  enactment for deferral of property taxes payable in 1998, and 
 16.16  thereafter.