Minnesota Legislature
SF 5286
as introduced - 93rd Legislature (2023 - 2024) Posted on 04/03/2024 11:41am
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A bill for an act
relating to taxation; property; modifying provisions related to exemptions for
institutions of public charity; amending Minnesota Statutes 2022, section 272.02,
subdivision 7, by adding a subdivision.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2022, section 272.02, subdivision 7, is amended to read:
Subd. 7.
Institutions of public charity.
(a) Institutions of purely public charity that are
exempt from federal income taxation under section 501(c)(3) of the Internal Revenue Code
are exempt if they meet the requirements of this subdivision. In determining whether deleted text begin real
property is exemptdeleted text end new text begin a charity is eligible for exemptionnew text end under this subdivision, the following
factors must be considered:
(1) whether the stated purpose of the undertaking is to be helpful to others without
immediate expectation of material reward;
(2) whether the institution of public charity is supported by material donations, gifts, or
government grants for services to the public in whole or in part;
(3) whether a material number of the recipients of the charity receive benefits or services
at reduced or no cost, or whether the organization provides services to the public that alleviate
burdens or responsibilities that would otherwise be borne by the government;
(4) whether the income received, including material gifts and donations, produces a
profit to the charitable institution that is not distributed to private interests;
(5) whether the beneficiaries of the charity are restricted or unrestricted, and, if restricted,
whether the class of persons to whom the charity is made available is one having a reasonable
relationship to the charitable objectives; and
(6) whether dividends, in form or substance, or assets upon dissolution, are not available
to private interests.
A charitable organization must satisfy the factors in clauses (1) to (6) deleted text begin for its property to
be exemptdeleted text end new text begin to be eligible for exemptionnew text end under this subdivision, unless there is a reasonable
justification for failing to meet the factors in clause (2), (3), or (5), and the organization
provides to the assessor the factual basis for that justification. If there is reasonable
justification for failing to meet the factors in clause (2), (3), or (5), an organization is a
purely public charity under this subdivision without meeting those factors. After an exemption
is properly granted under this subdivision, it will remain in effect unless there is a material
change in facts.
(b) For purposes of this subdivision, a grant is a written instrument or electronic document
defining a legal relationship between a granting agency and a grantee when the principal
purpose of the relationship is to transfer cash or something of value to the grantee to support
a public purpose authorized by law in a general manner instead of acquiring by professional
or technical contract, purchase, lease, or barter property or services for the direct benefit or
use of the granting agency.
(c) In determining whethernew text begin an operator ofnew text end rental housing property deleted text begin qualifies fordeleted text end new text begin is eligible
for annew text end exemption under this subdivision, the following are not gifts or donations to the owner
of the rental housing:
(1) rent assistance provided by the government to or on behalf of tenants; and
(2) financing assistance or tax credits provided by the government to the owner on
condition that specific units or a specific quantity of units be set aside for persons or families
with certain income characteristics.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxes payable in 2025 and thereafter.
new text end
Sec. 2.
Minnesota Statutes 2022, section 272.02, is amended by adding a subdivision to
read:
new text begin Subd. 7a. new text end
new text begin Eligible charities. new text end
new text begin
Property owned by an eligible charity is exempt if a
substantial part of the property is actually occupied by personnel of the charity in furtherance
of the charitable purpose.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxes payable in 2025 and thereafter.
new text end