HF 805

as introduced - 94th Legislature (2025 - 2026) Posted on 02/17/2025 02:48pm

A bill for an act
relating to taxation; property tax refunds; establishing a property tax refund program
for child care providers that rent a child care facility; requiring a report;
appropriating money; amending Minnesota Statutes 2024, sections 290A.03,
subdivision 12, by adding subdivisions; 290A.04, by adding a subdivision; 290A.19;
290A.23, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2024, section 290A.03, subdivision 12, is amended to read:

Subd. 12.

Gross rent.

(a) "Gross rent" means rent paid for the right of occupancy, at
arm's length, of new text begin :
new text end

new text begin (1) new text end a site on which a homestead which is a manufactured home is located new text begin ; or
new text end

new text begin (2) eligible child care property new text end .

(b) If the landlord and tenant have not dealt with each other at arm's length and the
commissioner determines that the gross rent charged was excessive, the commissioner may
adjust the gross rent to a reasonable amount for purposes of this chapter.

(c) Any amount paid by a claimant residing in property assessed pursuant to section
273.124, subdivision 3, 4, 5, or 6 for occupancy in that property shall be included within
the term "property taxes payable" as defined in subdivision 13, to the extent allowed,
notwithstanding the fact that ownership is not in the name of the claimant.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for refunds based on rent paid in 2024
and thereafter.
new text end

Sec. 2.

Minnesota Statutes 2024, section 290A.03, is amended by adding a subdivision to
read:

new text begin Subd. 17. new text end

new text begin Eligible child care facility. new text end

new text begin "Eligible child care facility" means a licensed
child care facility that accepts families participating in the child care assistance program
under chapter 142E, and that is operated by a nonprofit charitable organization that qualifies
for tax exemption under section 501(c)(3) of the Internal Revenue Code. For the purposes
of this subdivision, "licensed child care facility" means a child care center licensed under
Minnesota Rules, chapter 9503, or a facility used to provide licensed family day care or
group family day care as defined under Minnesota Rules, chapter 9502.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for refunds based on rent paid in 2024
and thereafter.
new text end

Sec. 3.

Minnesota Statutes 2024, section 290A.03, is amended by adding a subdivision to
read:

new text begin Subd. 18. new text end

new text begin Eligible child care property. new text end

new text begin "Eligible child care property" means the portion
of a property used to operate an eligible child care facility for which the facility paid gross
rent.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for refunds based on rent paid in 2024
and thereafter.
new text end

Sec. 4.

Minnesota Statutes 2024, section 290A.04, is amended by adding a subdivision to
read:

new text begin Subd. 7. new text end

new text begin Refund for child care facilities. new text end

new text begin (a) An eligible child care facility is allowed
a refund equal to ten percent of gross rent paid in a calendar year for the use of eligible child
care property. The refund is limited to payments of gross rent in cash or cash equivalent.
new text end

new text begin (b) To claim the refund under this subdivision, an eligible child care facility must apply
to the commissioner in the calendar year following the year in which the facility paid rent.
The application must be in the form and manner specified by the commissioner.
new text end

new text begin (c) The commissioner must pay refunds under this section in accordance with the schedule
in section 290A.07, subdivision 3.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for refunds based on rent paid in 2024
and thereafter.
new text end

Sec. 5.

Minnesota Statutes 2024, section 290A.19, is amended to read:

290A.19 deleted text begin PARK deleted text end OWNER TO FURNISH RENT CERTIFICATE.

(a) The park owner of a property for which rent is paid for occupancy as a homestead
must furnish a certificate of rent paid to a person who is a renter on December 31, in the
form prescribed by the commissioner. If the renter moves before December 31, the park
owner may give the certificate to the renter at the time of moving, or mail the certificate to
the forwarding address if an address has been provided by the renter. The certificate must
be made available to the renter before February 1 of the year following the year in which
the rent was paid. The park owner must retain a duplicate of each certificate or an equivalent
record showing the same information for a period of three years. The duplicate or other
record must be made available to the commissioner upon request.

(b) The commissioner may require the park owner, through a simple process, to furnish
to the commissioner on or before March 1 a copy of each certificate of rent paid furnished
to a renter for rent paid in the prior year. The commissioner shall prescribe the content,
format, and manner of the form pursuant to section 270C.30. The commissioner may require
the Social Security number, individual taxpayer identification number, federal employer
identification number, or Minnesota taxpayer identification number of the park owner who
is required to furnish a certificate of rent paid under this paragraph. Prior to implementation,
the commissioner, after consulting with representatives of park owners, shall develop an
implementation and administration plan for the requirements of this paragraph that attempts
to minimize financial burdens, administration and compliance costs, and takes into
consideration existing systems of park owners.

(c) For the purposes of this section, "park owner" means a park owner as defined under
section 327C.015, subdivision 9, and "property" includes a lot as defined under section
327C.015, subdivision 6.

new text begin (d) No later than December 31, the owner of eligible child care property for which an
eligible child care facility paid gross rent must furnish a certificate of rent paid to the eligible
child care facility, in the form prescribed by the commissioner. If the facility vacates the
property before December 31, the owner may give the certificate to the facility at the time
of moving, or mail the certificate to the forwarding address if an address has been provided
by the facility. The certificate must be made available to the facility before February 1 of
the year following the year in which the rent was paid. The property owner must retain a
duplicate of each certificate or an equivalent record showing the same information for a
period of three years. The duplicate or other record must be made available to the
commissioner upon request.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for refunds based on rent paid in 2024
and thereafter.
new text end

Sec. 6.

Minnesota Statutes 2024, section 290A.23, is amended by adding a subdivision to
read:

new text begin Subd. 4. new text end

new text begin Refund for child care facilities; appropriation. new text end

new text begin The amount necessary to pay
refunds under section 290A.04, subdivision 7, is appropriated to the commissioner from
the general fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for refunds based on rent paid in 2024
and thereafter.
new text end

Sec. 7. new text begin SPECIAL RULE FOR CERTIFICATES OF RENT PAID FOR ELIGIBLE
CHILD CARE FACILITIES BASED ON RENT PAID IN 2024.
new text end

new text begin For property tax refunds to an eligible child care facility under Minnesota Statutes,
chapter 290A, based on rent paid in 2024, the property owner of an eligible child care facility
must furnish a certificate of rent paid as provided in Minnesota Statutes, section 290A.19,
paragraph (d), except the owner must furnish the certificate no later than July 31, 2025.
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. 8. new text begin REPORT; RENT CONSTITUTING PROPERTY TAXES FOR CHILD
CARE FACILITIES.
new text end

new text begin No later than March 1, 2026, the commissioner of revenue must submit a report to the
chairs and ranking minority members of the legislative committees and divisions with
jurisdiction over taxes and property taxes. The report must estimate the share of rent
constituting property taxes for child care facilities eligible for a refund under Minnesota
Statutes, section 290A.04, subdivision 7. To the extent feasible, the report must provide
separate estimates for the share of rent constituting property taxes for child care facilities
in Minneapolis, St. Paul, the seven-county metropolitan area, and counties outside of the
metropolitan area. The report may include any other information the commissioner deems
relevant to determining the appropriate percentage under Minnesota Statutes, section
290A.04, subdivision 7, paragraph (a), and recommendations for modifications to the
property tax refund for child care facilities. The report must comply with Minnesota Statutes,
sections 3.195 and 3.197.
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