SF 3200

as introduced - 92nd Legislature (2021 - 2022) Posted on 02/22/2022 08:47am

A bill for an act
relating to taxation; property; establishing an affordable housing market value
exclusion; amending Minnesota Statutes 2020, sections 273.032; 273.13, by adding
a subdivision; 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.

Minnesota Statutes 2020, section 273.032, is amended to read:

273.032 MARKET VALUE DEFINITION.

(a) Unless otherwise provided, for the purpose of determining any property tax levy
limitation based on market value or any limit on net debt, the issuance of bonds, certificates
of indebtedness, or capital notes based on market value, any qualification to receive state
aid based on market value, or any state aid amount based on market value, the terms "market
value," "estimated market value," and "market valuation," whether equalized or unequalized,
mean the estimated market value of taxable property within the local unit of government
before any of the following or similar adjustments for:

(1) the market value exclusions under:

(i) section 273.11, subdivisions 14a and 14c (vacant platted land);

(ii) section 273.11, subdivision 16 (certain improvements to homestead property);

(iii) section 273.11, subdivisions 19 and 20 (certain improvements to business properties);

(iv) section 273.11, subdivision 21 (homestead property damaged by mold);

(v) section 273.13, subdivision 34 (homestead of a veteran with a disability or family
caregiver); deleted text begin or
deleted text end

(vi) section 273.13, subdivision 35 (homestead market value exclusion); or

new text begin (vii) section 273.13, subdivision 36 (affordable housing market value exclusion); or
new text end

(2) the deferment of value under:

(i) the Minnesota Agricultural Property Tax Law, section 273.111;

(ii) the Aggregate Resource Preservation Law, section 273.1115;

(iii) the Minnesota Open Space Property Tax Law, section 273.112;

(iv) the rural preserves property tax program, section 273.114; or

(v) the Metropolitan Agricultural Preserves Act, section 473H.10; or

(3) the adjustments to tax capacity for:

(i) tax increment financing under sections 469.174 to 469.1794;

(ii) fiscal disparities under chapter 276A or 473F; or

(iii) powerline credit under section 273.425.

(b) Estimated market value under paragraph (a) also includes the market value of
tax-exempt property if the applicable law specifically provides that the limitation,
qualification, or aid calculation includes tax-exempt property.

(c) Unless otherwise provided, "market value," "estimated market value," and "market
valuation" for purposes of property tax levy limitations and calculation of state aid, refer
to the estimated market value for the previous assessment year and for purposes of limits
on net debt, the issuance of bonds, certificates of indebtedness, or capital notes refer to the
estimated market value as last finally equalized.

(d) For purposes of a provision of a home rule charter or of any special law that is not
codified in the statutes and that imposes a levy limitation based on market value or any limit
on debt, the issuance of bonds, certificates of indebtedness, or capital notes based on market
value, the terms "market value," "taxable market value," and "market valuation," whether
equalized or unequalized, mean "estimated market value" as defined in paragraph (a).

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

new text begin [273.129] AFFORDABLE HOUSING MARKET VALUE EXCLUSION
PROGRAM; ESTABLISHMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given, unless otherwise indicated.
new text end

new text begin (b) "City" means a statutory or home rule charter city.
new text end

new text begin (c) "Governing body" means the governing body of a statutory or home rule charter city.
new text end

new text begin (d) "Market value" has the meaning given in section 272.03, subdivision 8.
new text end

new text begin (e) "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.
new text end

new text begin Subd. 2. new text end

new text begin Establishment. new text end

new text begin An affordable housing value exclusion program is established
to promote the development and redevelopment of affordable rental properties in the state.
Eligible properties located in participating cities are eligible to receive a market value
exclusion of 50 percent.
new text end

new text begin Subd. 3. new text end

new text begin Approval. new text end

new text begin (a) The governing body of a city may, upon approval by a majority
vote of its members, adopt a resolution agreeing to participate in the affordable housing
market value exclusion 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 at least twice, not 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.
new text end

new text begin (b) After a city has adopted a resolution agreeing to participate in the program, the city
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 valuation exclusion. The resolution must state the valuation exclusion
percentage of 50 percent which the property shall receive, and which shall remain the same
each year, subject to the duration limit under subdivision 5.
new text end

new text begin Subd. 4. new text end

new text begin Eligibility. new text end

new text begin (a) A property located in a participating city is eligible for the
affordable housing value exclusion applied under section 273.13, subdivision 36, if:
new text end

new text begin (1) the property is not classified in whole or in part as class 4d under section 273.13,
subdivision 25;
new text end

new text begin (2) construction of the property began on or after January 1, 2022; and
new text end

new text begin (3) the Minnesota Housing Finance Agency certifies to the county or local assessor that:
new text end

new text begin (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 the greater
of area or state median income, adjusted for family size, as determined by the United States
Department of Housing and Urban Development; and
new text end

new text begin (ii) at least 80 percent of the available units in the property are occupied by residents
meeting the income requirement.
new text end

new text begin (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), 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.
new text end

new text begin (c) By March 1 each assessment year, the Minnesota Housing Finance Agency must
certify to the appropriate county or city assessor:
new text end

new text begin (1) the specific properties, identified by parcel identification numbers, that are eligible
under this section to receive the exclusion for the current assessment year; and
new text end

new text begin (2) the specific properties, identified by parcel identification numbers, that received the
exclusion in the previous assessment year but no longer meet the requirements under this
section.
new text end

new text begin 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.
new text end

new text begin Subd. 5. new text end

new text begin Duration. new text end

new text begin The governing body of a participating city shall determine the
duration of the affordable housing value exclusion for each eligible property, provided that
the exclusion 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 exclusion shall be
removed at the beginning of the next assessment year.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2020, section 273.13, is amended by adding a subdivision to
read:

new text begin Subd. 36. new text end

new text begin Affordable housing value exclusion. new text end

new text begin (a) Prior to determining a property's
net tax capacity under this section, property classified as class 4a under subdivision 25,
paragraph (a), shall be eligible for an affordable housing market value exclusion as
determined under paragraph (b).
new text end

new text begin (b) For a property that meets the requirements under section 273.129, the exclusion is
50 percent of the market value. The valuation shall be rounded to the nearest whole dollar,
and may not be less than zero.
new text end

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2020, 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
35 new text begin , or the affordable housing market value exclusion under section 273.13, subdivision 36 new 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

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