Minnesota Legislature
SF 2080
as introduced - 93rd Legislature (2023 - 2024) Posted on 03/07/2023 10:27am
Current Version - as introduced
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6.1
A bill for an act
relating to taxation; property; establishing the affordable housing tax capacity
reduction program; amending Minnesota Statutes 2022, section 276.04, subdivision
2; proposing coding for new law in Minnesota Statutes, chapter 273.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
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[273.129] AFFORDABLE HOUSING TAX CAPACITY REDUCTION
PROGRAM; ESTABLISHMENT.
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new text begin Subdivision 1. new text end
new text begin Definitions. new text end
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(a) For purposes of this section, the following terms have
the meanings given, unless otherwise indicated.
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(b) "Governing body" means, with respect to a city, a city council, with respect to a
town, a town board, and with respect to an unorganized territory, a county board acting on
behalf of the unorganized territory.
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(c) "Municipality" means a statutory or home rule charter city, a township, or an
unorganized territory.
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(d) "Property" means a residential rental housing property classified as class 4a under
section 273.13, subdivision 25, a portion of which is occupied by residents meeting the
income requirement under subdivision 4.
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new text begin Subd. 2. new text end
new text begin Establishment. new text end
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An affordable housing tax capacity reduction program is
established to promote the development of affordable rental properties in the state. Eligible
properties located in participating municipalities are eligible to receive a tax capacity
reduction of 50 percent.
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new text begin Subd. 3. new text end
new text begin Approval. new text end
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(a) A governing body may, upon approval by a majority vote of its
members, adopt a resolution agreeing to participate in the tax capacity reduction program.
Prior to approval, the governing body must publish notice of its intent to discuss the
resolution at a regularly scheduled meeting, in a newspaper with general circulation in the
city or on the municipality's website, no less than 30 days prior to the meeting. The notice
must include the date, time, and location of the meeting at which the program will be
discussed and public input allowed.
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(b) After a governing body has adopted a resolution agreeing to participate in the program,
the governing body must adopt a separate resolution, subject to the same voting, notice, and
public hearing requirements under paragraph (a), for each property the governing body
approves to receive the affordable housing tax capacity reduction. The resolution must state
the property qualifies for a tax capacity reduction of 50 percent, and the reduction must
remain the same each year, subject to the duration limit under subdivision 6.
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(c) Before adoption of the resolution as required under paragraph (b), the municipality
must make a finding that:
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(1) construction of the rental property would not reasonably be expected to occur solely
through private investment within the reasonably foreseeable future; and
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(2) the property's net tax capacity, even after application of the tax capacity reduction
under this section, is reasonably expected to be greater than the net tax capacity of the
property had the property not been developed.
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(d) After a governing body has adopted the property-specific resolution as required under
paragraph (b), the governing body, other than the county board acting on behalf of an
unorganized territory, must provide the county board with a copy of the resolution for each
property the local government approved to receive the affordable housing tax capacity
reduction, along with information relating to the fiscal implications resulting from the
approved reduction. The county board may request additional information from the local
government that the board deems necessary. The county board must approve, by a majority
vote of its members, the affordable housing tax capacity reduction for each property within
60 days of receipt. If a county board fails to approve the reduction within 60 days of receipt,
or if the county board affirmatively denies approval of the reduction, the property shall not
receive the affordable housing tax capacity reduction.
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new text begin Subd. 4. new text end
new text begin Eligibility. new text end
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(a) A property located in a participating municipality is eligible for
the affordable housing tax capacity reduction if:
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(1) the property is not classified in whole or in part as class 4d under section 273.13,
subdivision 25;
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(2) construction of the property began on or after January 1, 2024; and
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(3) the Minnesota Housing Finance Agency certifies to the county or local assessor that:
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(i) at least 20 percent of the units in the property are available for residents whose
household income at the time of initial occupancy does not exceed 60 percent of area median
income, adjusted for family size, as determined by the United States Department of Housing
and Urban Development;
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(ii) at least 80 percent of the units in clause (i) are occupied by residents meeting the
income requirement; and
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(iii) any unoccupied available units are being actively marketed toward persons meeting
the income requirements, as attested by the property owner.
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(b) By February 1 each assessment year, an application for certification under this
subdivision must be filed by the property owner to the Minnesota Housing Finance Agency.
The property owner must provide a copy of the application to the county or city assessor.
The application must be filed on a form prescribed by the agency and must contain the
property tax identification number, evidence that the property meets the requirements of
paragraph (a), a copy of the property-specific approval by the county board if required, and
any other information necessary for the Minnesota Housing Finance Agency to determine
eligibility. The Minnesota Housing Finance Agency may charge an application fee
approximately equal to the costs of processing and reviewing the applications. If imposed,
the applicant must pay the application fee to the Minnesota Housing Finance Agency and
the fee must be deposited in the housing development fund.
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(c) By April 1 each assessment year, the Minnesota Housing Finance Agency must
certify to the appropriate county or city assessor:
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(1) the specific properties, identified by parcel identification numbers, that are eligible
under this section to receive the tax capacity reduction for the current assessment year; and
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(2) the specific properties, identified by parcel identification numbers, that received the
tax capacity reduction in the previous assessment year but no longer meet the requirements
under this section.
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In making the certification, the Minnesota Housing Finance Agency must rely on the property
owner's application and any other supporting information that the agency deems necessary.
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new text begin Subd. 5. new text end
new text begin Tax capacity reduction. new text end
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A city or county assessor that receives certification
by the Minnesota Housing Finance Agency under subdivision 4 shall reduce the net tax
capacity for each certified property by 50 percent, subject to the duration limit as determined
under subdivision 6.
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new text begin Subd. 6. new text end
new text begin Duration. new text end
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The governing body of a participating municipality shall determine
the duration of the affordable housing tax capacity reduction for each eligible property,
provided that the reduction applies for at least ten but not more than 20 assessment years,
except that when a property no longer meets the requirements of subdivision 4, the reduction
shall be removed for the current assessment year.
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new text begin Subd. 7. new text end
new text begin Expiration. new text end
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This section expires on December 31, 2030. A property that has
not received the required approval under subdivision 3 by December 31, 2030, shall not
receive the tax capacity reduction.
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new text begin EFFECTIVE DATE. new text end
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This section is effective beginning with assessment year 2024.
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Sec. 2.
Minnesota Statutes 2022, section 276.04, subdivision 2, is amended to read:
Subd. 2.
Contents of tax statements.
(a) The treasurer shall provide for the printing of
the tax statements. The commissioner of revenue shall prescribe the form of the property
tax statement and its contents. The tax statement must not state or imply that property tax
credits are paid by the state of Minnesota. The statement must contain a tabulated statement
of the dollar amount due to each taxing authority and the amount of the state tax from the
parcel of real property for which a particular tax statement is prepared. The dollar amounts
attributable to the county, the state tax, the voter approved school tax, the other local school
tax, the township or municipality, and the total of the metropolitan special taxing districts
as defined in section 275.065, subdivision 3, paragraph (i), must be separately stated. The
amounts due all other special taxing districts, if any, may be aggregated except that any
levies made by the regional rail authorities in the county of Anoka, Carver, Dakota, Hennepin,
Ramsey, Scott, or Washington under chapter 398A shall be listed on a separate line directly
under the appropriate county's levy. If the county levy under this paragraph includes an
amount for a lake improvement district as defined under sections 103B.501 to 103B.581,
the amount attributable for that purpose must be separately stated from the remaining county
levy amount. In the case of Ramsey County, if the county levy under this paragraph includes
an amount for public library service under section 134.07, the amount attributable for that
purpose may be separated from the remaining county levy amount. The amount of the tax
on homesteads qualifying under the senior citizens' property tax deferral program under
chapter 290B is the total amount of property tax before subtraction of the deferred property
tax amount. The amount of the tax on contamination value imposed under sections 270.91
to 270.98, if any, must also be separately stated. The dollar amounts, including the dollar
amount of any special assessments, may be rounded to the nearest even whole dollar. For
purposes of this section whole odd-numbered dollars may be adjusted to the next higher
even-numbered dollar. The amount of market value excluded under section 273.11,
subdivision 16, if any, must also be listed on the tax statement.
(b) The property tax statements for manufactured homes and sectional structures taxed
as personal property shall contain the same information that is required on the tax statements
for real property.
(c) Real and personal property tax statements must contain the following information
in the order given in this paragraph. The information must contain the current year tax
information in the right column with the corresponding information for the previous year
in a column on the left:
(1) the property's estimated market value under section 273.11, subdivision 1;
(2) the property's homestead market value exclusion under section 273.13, subdivision
35new text begin , or the affordable housing tax capacity reduction under section 273.129new text end ;
(3) the property's taxable market value under section 272.03, subdivision 15;
(4) the property's gross tax, before credits;
(5) for agricultural properties, the credits under sections 273.1384 and 273.1387;
(6) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135;
273.1391; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of credit
received under section 273.135 must be separately stated and identified as "taconite tax
relief"; and
(7) the net tax payable in the manner required in paragraph (a).
(d) If the county uses envelopes for mailing property tax statements and if the county
agrees, a taxing district may include a notice with the property tax statement notifying
taxpayers when the taxing district will begin its budget deliberations for the current year,
and encouraging taxpayers to attend the hearings. If the county allows notices to be included
in the envelope containing the property tax statement, and if more than one taxing district
relative to a given property decides to include a notice with the tax statement, the county
treasurer or auditor must coordinate the process and may combine the information on a
single announcement.
new text begin EFFECTIVE DATE. new text end
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This section is effective beginning with assessment year 2024.
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