HF 161

as introduced - 94th Legislature (2025 - 2026) Posted on 02/26/2025 01:27pm

A bill for an act
relating to taxation; property; authorizing cities to create land-value taxation
districts; proposing coding for new law in Minnesota Statutes, chapter 428A.

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

Section 1.

new text begin [428A.30] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For purposes of sections 428A.30 to 428A.34, the terms defined
in this section have the meanings given them, unless the context indicates otherwise.
new text end

new text begin Subd. 2. new text end

new text begin City. new text end

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

new text begin Subd. 3. new text end

new text begin District. new text end

new text begin "District" means a land-value taxation district established under section
428A.31.
new text end

new text begin Subd. 4. new text end

new text begin Ordinance. new text end

new text begin "Ordinance" means the ordinance establishing a land-value taxation
district under section 428A.31.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with property taxes payable
in 2026.
new text end

Sec. 2.

new text begin [428A.31] ESTABLISHMENT OF LAND-VALUE TAXATION DISTRICT.
new text end

new text begin Subdivision 1. new text end

new text begin Ordinance. new text end

new text begin (a) The governing body of a city may adopt an ordinance
establishing a land-value taxation district. The ordinance must describe:
new text end

new text begin (1) the parcels of property constituting the district, either by specific identification of
each parcel, or by defining a geographic area or areas within the city, and then within that
area or those areas, identifying the specific types of property, as defined under section
273.13, to be included in the district; and
new text end

new text begin (2) the procedure for reallocating the collective property tax of all parcels within the
district.
new text end

new text begin (b) In addition, the ordinance must provide an evaluation of the economic effects of the
district, including the impact on redevelopment of and investment in the district, within a
specified period of time, but not less than 15 years after the date the district becomes
effective.
new text end

new text begin Subd. 2. new text end

new text begin Hearing; notice. new text end

new text begin Before adopting an ordinance, the governing body of the city
must hold a public hearing on the question. Notice of the hearing must include the time and
place of the hearing, a description of the parcels to be included in the district, a description
of the procedure for reallocating the tax burden among the parcels, and the duration of the
district. Each person owning property in the proposed district must be given the opportunity
to be heard at the hearing. The governing body must publish notice of the hearing on the
city's website and in at least two issues of the official newspaper of the city. The two
publications must be two weeks apart and the hearing must be held at least three days after
the last publication. Not less than ten days before the hearing, the governing body must mail
notice to the owner of each parcel proposed to be included in the district. For the purpose
of the mailed notice, owners are those shown on the records of the county auditor. Other
records may be used to supply the necessary information. At the public hearing, a person
affected by the proposed district may testify on any issues relevant to the proposed district.
The governing body may adjourn the hearing from time to time and may adopt the ordinance
establishing the district at any time within six months after the date of the conclusion of the
hearing by a vote of the majority of the governing body of the city. Within 30 days after
adoption of the ordinance, the governing body shall send a copy of the ordinance to the
commissioner of revenue.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with property taxes payable
in 2026.
new text end

Sec. 3.

new text begin [428A.32] RESTRICTIONS ON TAX REALLOCATION PROCEDURE.
new text end

new text begin A tax reallocation procedure under section 428A.31, subdivision 1, paragraph (a), clause
(2), must distribute taxes on taxable properties in the district by applying uniform rates to
one or more of the following tax bases:
new text end

new text begin (1) the net tax capacity, as defined under section 273.13, subdivision 21b;
new text end

new text begin (2) the referendum market value, as defined under section 126C.01, subdivision 3;
new text end

new text begin (3) a tax base consisting of each property's estimated market value excluding the market
value attributable to improvements; or
new text end

new text begin (4) a tax base consisting of each property's estimated market value excluding the market
value attributable to improvements made after a date specified in the ordinance.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with property taxes payable
in 2026.
new text end

Sec. 4.

new text begin [428A.33] TAXATION WITHIN DISTRICT.
new text end

new text begin Subdivision 1. new text end

new text begin Initial taxation within district. new text end

new text begin For each property taxes payable year, a
city must compile the total property taxes imposed upon all properties within the district
for each taxing jurisdiction after final property tax statements are issued under section
276.04. For the purposes of this section, the areawide taxes under chapters 276A and 473F,
and the state general levy under section 275.025, are considered to be taxing jurisdictions.
new text end

new text begin Subd. 2. new text end

new text begin Final taxation within district. new text end

new text begin A city must allocate the tax, as determined
under subdivision 1, among all properties in the district according to the terms of the
ordinance so the entire amount of tax payable to each taxing jurisdiction under subdivision
1 is allocated among the properties constituting the district. The city must report the revised
property tax amounts for each parcel of property to the county treasurer by April 30 of the
year the tax is payable. The city must mail revised property tax statements to all properties
within the district by April 30 of the year the tax is payable. Taxpayers must make payments
according to the dates specified in section 279.01 as if the property tax statements were
mailed 21 days prior to May 15 of the year the taxes are payable.
new text end

new text begin Subd. 3. new text end

new text begin Report to commissioner of revenue. new text end

new text begin By September 1 of each year, the county
treasurer must report the initial and final distribution of the net tax for each parcel of property
in the district to the commissioner of revenue on a form prescribed by the commissioner of
revenue.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with property taxes payable
in 2026.
new text end

Sec. 5.

new text begin [428A.34] APPEAL OF LAND VALUE.
new text end

new text begin The owner of any property included in a land-value taxation district under section
428A.31 may appeal the valuation attributable to land separately from the valuation
attributable to improvements upon the land under sections 274.01 and 274.13 or chapter
271.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with property taxes payable
in 2026.
new text end