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Minnesota Legislature

Office of the Revisor of Statutes

SF 2156

as introduced - 90th Legislature (2017 - 2018) Posted on 03/17/2017 08:32am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to taxation; property; establishing the Legislative Property Tax Reform
Task Force; requiring a report.

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

Section 1. new text beginLEGISLATIVE PROPERTY TAX REFORM TASK FORCE.
new text end

new text begin Subdivision 1. new text end

new text begin Membership. new text end

new text begin (a) The Legislative Property Tax Reform Task Force is
created and consists of the following members:
new text end

new text begin (1) two representatives appointed by the chair of the tax committee of the house of
representatives;
new text end

new text begin (2) two representatives appointed by the minority lead of the tax committee of the house
of representatives;
new text end

new text begin (3) two senators appointed by the chair of the senate tax committee; and
new text end

new text begin (4) two senators appointed by the minority lead of the senate tax committee.
new text end

new text begin (b) Any vacancy shall be filled by appointment of the appointing authority for the vacating
member.
new text end

new text begin (c) Members shall be appointed by July 1, 2017.
new text end

new text begin Subd. 2. new text end

new text begin Duties. new text end

new text begin The task force must perform the duties described in section 2.
new text end

new text begin Subd. 3. new text end

new text begin First meeting; chair. new text end

new text begin The first appointee of the chair of the house tax committee
must convene the initial meeting of the task force by July 21, 2017. The members of the
task force must elect a chair and vice-chair from the members of the task force at the first
meeting.
new text end

new text begin Subd. 4. new text end

new text begin Staff. new text end

new text begin Legislative staff of the house of representatives and senate shall provide
staff support, with the assistance of staff from the Departments of Revenue and Education,
to facilitate the task force's work.
new text end

new text begin Subd. 5. new text end

new text begin Report. new text end

new text begin The task force must submit a report by February 15, 2018, to the chairs
and ranking minority members of the committees in the senate and house of representatives
with primary jurisdiction over taxes, presenting two or more alternatives for reform of
Minnesota's property tax system.
new text end

new text begin Subd. 6. new text end

new text begin Sunset. new text end

new text begin The task force shall sunset the day following the submission of the
report under subdivision 5.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2. new text beginPROPOSALS FOR REFORM OF MINNESOTA'S PROPERTY TAX
SYSTEM.
new text end

new text begin (a) The Legislative Property Tax Reform Task Force must develop proposals to
restructure Minnesota's property tax system for legislative consideration. The proposals
shall provide for a system that is easier and less costly to administer and more transparent
and easier for taxpayers to understand, while minimizing the number of properties that
experience severe tax changes. The proposals may include a transition period of up to five
years before the final system elements are fully operational. At least one proposal must be
developed where the highest estimated net state cost does not exceed $250,000,000 in the
first year that the proposal is fully phased in. At least one proposal must be developed where
the highest estimated net state cost does not exceed $500,000,000 in the first year that the
proposal is fully phased in. Each proposal should estimate the administrative cost savings
to county governments and to the state government.
new text end

new text begin (b) The proposals must include the following elements:
new text end

new text begin (1) reduce the number of classifications to four or fewer, with a uniform assessment
ratio for each classification;
new text end

new text begin (2) eliminate any distinction between homestead and nonhomestead agricultural land;
and
new text end

new text begin (3) use terminology of assessed value and mill rates.
new text end

new text begin (c) The proposals must incorporate as many of the following elements as possible:
new text end

new text begin (1) preserve preferential treatment for homestead property by means other than the
homestead market value exclusion;
new text end

new text begin (2) preserve preferential treatment for disabled veterans' homestead property by means
other than the disabled veterans market value exclusion without shifting the tax burden to
other local taxpayers;
new text end

new text begin (3) eliminate disparity reduction aid;
new text end

new text begin (4) combine the net tax capacity levy and the referendum market value levy to a single
levy on assessed value; and
new text end

new text begin (5) reduce or eliminate the state general levy.
new text end

new text begin (d) The proposals may modify or eliminate the following system elements:
new text end

new text begin (1) homestead credit state refund;
new text end

new text begin (2) renters property tax refund;
new text end

new text begin (3) targeting refund;
new text end

new text begin (4) local government aid;
new text end

new text begin (5) county program aid;
new text end

new text begin (6) disparity reduction credit;
new text end

new text begin (7) any elements of the E-12 financing system; and
new text end

new text begin (8) any other elements of the system.
new text end

new text begin (e) The proposals may add the following elements to the system, or any other elements
the task force deems necessary:
new text end

new text begin (1) permanent state-paid credits based on a property's classification, market value, gross
tax, or a portion of the tax;
new text end

new text begin (2) permanent state-paid refunds based on income and gross tax;
new text end

new text begin (3) temporary state-paid credits or refunds based on a property's classification, market
value, gross tax, or change in tax burden under the new system;
new text end

new text begin (4) a credit for agricultural properties based on market value, gross tax, or a specific
category of tax such as school debt levies; and
new text end

new text begin (5) a valuation system for agricultural properties based on production value rather than
market value.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end