2007 Minnesota Statutes

CHAPTER 290B. SENIOR CITIZENS' PROPERTY TAX DEFERRAL

290B.01 PURPOSE.
Minnesota's system of ad valorem property taxation does not adequately recognize the
unique financial circumstances of homestead property owned and occupied by low-income senior
citizens. It is therefore declared to be in the public interest of this state to stabilize tax burdens
on homestead property owned by qualifying low-income senior citizens through a deferral of
certain property taxes.
History: 1997 c 231 art 14 s 4

290B.02 CITATION.
This program shall be named the "senior citizens' property tax deferral program."
History: 1997 c 231 art 14 s 5

290B.03 DEFERRAL OF PROPERTY TAXES.
    Subdivision 1. Program qualifications. The qualifications for the senior citizens' property
tax deferral program are as follows:
(1) the property must be owned and occupied as a homestead by a person 65 years of age or
older. In the case of a married couple, both of the spouses must be at least 65 years old at the
time the first property tax deferral is granted, regardless of whether the property is titled in the
name of one spouse or both spouses, or titled in another way that permits the property to have
homestead status;
(2) the total household income of the qualifying homeowners, as defined in section 290A.03,
subdivision 5 , for the calendar year preceding the year of the initial application may not exceed
$60,000;
(3) the homestead must have been owned and occupied as the homestead of at least one of
the qualifying homeowners for at least 15 years prior to the year the initial application is filed;
(4) there are no state or federal tax liens or judgment liens on the homesteaded property;
(5) there are no mortgages or other liens on the property that secure future advances, except
for those subject to credit limits that result in compliance with clause (6); and
(6) the total unpaid balances of debts secured by mortgages and other liens on the property,
including unpaid and delinquent special assessments and interest and any delinquent property
taxes, penalties, and interest, but not including property taxes payable during the year, does not
exceed 75 percent of the assessor's estimated market value for the year.
    Subd. 2. Qualifying homestead; defined. Qualifying homestead property is defined as the
dwelling occupied as the homeowner's principal residence and so much of the land surrounding
it as is reasonably necessary for use of the dwelling as a home and any other property used for
purposes of a homestead as defined in section 273.13, subdivisions 22 and 23, but not to exceed
one acre. The homestead may be part of a multidwelling building and the land on which it is built.
History: 1997 c 231 art 14 s 6; 1998 c 389 art 5 s 3; 1999 c 243 art 5 s 28; 2000 c 490
art 5 s 20

290B.04 APPLICATION FOR DEFERRAL.
    Subdivision 1. Initial application. (a) A taxpayer meeting the program qualifications under
section 290B.03 may apply to the commissioner of revenue for the deferral of taxes. Applications
are due on or before July 1 for deferral of any of the following year's property taxes. A taxpayer
may apply in the year in which the taxpayer becomes 65 years old, provided that no deferral of
property taxes will be made until the calendar year after the taxpayer becomes 65 years old. The
application, which shall be prescribed by the commissioner of revenue, shall include the following
items and any other information which the commissioner deems necessary:
(1) the name, address, and Social Security number of the owner or owners;
(2) a copy of the property tax statement for the current payable year for the homesteaded
property;
(3) the initial year of ownership and occupancy as a homestead;
(4) the owner's household income for the previous calendar year; and
(5) information on any mortgage loans or other amounts secured by mortgages or other liens
against the property, for which purpose the commissioner may require the applicant to provide a
copy of the mortgage note, the mortgage, or a statement of the balance owing on the mortgage loan
provided by the mortgage holder. The commissioner may require the appropriate documents in
connection with obtaining and confirming information on unpaid amounts secured by other liens.
The application must state that program participation is voluntary. The application must
also state that the deferred amount depends directly on the applicant's household income, and
that program participation includes authorization for the annual deferred amount, the cumulative
deferral and interest that appear on each year's notice prepared by the county under subdivision 6,
is public data.
The application must state that program participants may claim the property tax refund based
on the full amount of property taxes eligible for the refund, including any deferred amounts.
The application must also state that property tax refunds will be used to offset any deferral and
interest under this program, and that any other amounts subject to revenue recapture under section
270A.03, subdivision 7, will also be used to offset any deferral and interest under this program.
(b) As part of the initial application process, the commissioner may require the applicant to
obtain at the applicant's own cost and submit:
(1) if the property is registered property under chapter 508 or 508A, a copy of the original
certificate of title in the possession of the county registrar of titles (sometimes referred to as
"condition of register"); or
(2) if the property is abstract property, a report prepared by a licensed abstracter showing
the last deed and any unsatisfied mortgages, liens, judgments, and state and federal tax lien
notices which were recorded on or after the date of that last deed with respect to the property or
to the applicant.
The certificate or report under clauses (1) and (2) need not include references to any
documents filed or recorded more than 40 years prior to the date of the certification or report.
The certification or report must be as of a date not more than 30 days prior to submission of
the application.
The commissioner may also require the county recorder or county registrar of the county
where the property is located to provide copies of recorded documents related to the applicant or
the property, for which the recorder or registrar shall not charge a fee. The commissioner may use
any information available to determine or verify eligibility under this section.
    Subd. 2. Approval; recording. The commissioner shall approve all initial applications that
qualify under this chapter and shall notify qualifying homeowners on or before December 1. The
commissioner may investigate the facts or require confirmation in regard to an application. The
commissioner shall record or file a notice of qualification for deferral, including the names of
the qualifying homeowners and a legal description of the property, in the office of the county
recorder, or registrar of titles, whichever is applicable, in the county where the qualifying property
is located. The notice must state that it serves as a notice of lien and that it includes deferrals
under this section for future years. The homeowner shall pay the recording or filing fees for
the notice, which, notwithstanding section 357.18, shall be paid by the homeowner at the time
of satisfaction of the lien.
    Subd. 3. Excess-income certification by taxpayer. A taxpayer whose initial application
has been approved under subdivision 2 shall notify the commissioner of revenue in writing by
July 1 if the taxpayer's household income for the preceding calendar year exceeded $60,000.
The certification must state the homeowner's total household income for the previous calendar
year. No property taxes may be deferred under this chapter in any year following the year in
which a program participant filed or should have filed an excess-income certification under this
subdivision, unless the participant has filed a resumption of eligibility certification as described in
subdivision 4.
    Subd. 4. Resumption of eligibility certification by taxpayer. A taxpayer who has previously
filed an excess-income certification under subdivision 3 may resume program participation if the
taxpayer's household income for a subsequent year is $60,000 or less. If the taxpayer chooses to
resume program participation, the taxpayer must notify the commissioner of revenue in writing
by July 1 of the year following a calendar year in which the taxpayer's household income is
$60,000 or less. The certification must state the taxpayer's total household income for the previous
calendar year. Once a taxpayer resumes participation in the program under this subdivision,
participation will continue until the taxpayer files a subsequent excess-income certification under
subdivision 3 or until participation is terminated under section 290B.08, subdivision 1.
    Subd. 5. Penalty for failure to file excess-income certification; investigations. (a) The
commissioner shall assess a penalty equal to 20 percent of the property taxes improperly deferred
in the case of a false application, a false certification, or in the case of a required excess-income
certification which was not filed as of the applicable due date. The commissioner shall assess a
penalty equal to 50 percent of the property taxes improperly deferred if the taxpayer knowingly
filed a false application or certification, or knowingly failed to file a required excess-income
certification by the applicable due date. The commissioner shall assess penalties under this section
through the issuance of an order under the provisions of chapter 270C. Persons affected by a
commissioner's order issued under this section may appeal as provided in chapter 270C.
(b) The commissioner may conduct investigations related to initial applications and
excess-income certifications required under this chapter within the period ending 3-1/2 years from
the due date of the application or certification.
    Subd. 6. Annual notice to participant. Annually, on or before July 1, the county auditor
shall notify, in writing, each participant in the county who is in the senior citizen's deferral
program of the current year's deferred taxes and the total cumulative deferred taxes and accrued
interest on the participant's property as of that date.
    Subd. 7. Payment of delinquent taxes and special assessments. Upon approval of a senior
citizen's initial application, the commissioner of revenue shall pay to the treasurer of the county
where the property is located the amount of any delinquent property taxes, penalties, interest, and
delinquent special assessments and interest on the property which is the subject of the application.
History: 1997 c 231 art 14 s 7; 1998 c 389 art 5 s 4-8; 1999 c 243 art 5 s 29-31; 2000 c
490 art 5 s 21; 2005 c 151 art 2 s 17

290B.05 MAXIMUM PROPERTY TAX AMOUNT AND DEFERRED PROPERTY TAX
AMOUNT.
    Subdivision 1. Determination by commissioner. The commissioner shall determine
each qualifying homeowner's "annual maximum property tax amount" following approval of
the homeowner's initial application and following the receipt of a resumption of eligibility
certification. The "annual maximum property tax amount" equals three percent of the homeowner's
total household income for the year preceding either the initial application or the resumption of
eligibility certification, whichever is applicable. Following approval of the initial application,
the commissioner shall determine the qualifying homeowner's "maximum allowable deferral."
No tax may be deferred relative to the appropriate assessment year for any homeowner whose
total household income for the previous year exceeds $60,000. No tax shall be deferred in any
year in which the homeowner does not meet the program qualifications in section 290B.03. The
maximum allowable total deferral is equal to 75 percent of the assessor's estimated market value
for the year, less the balance of any mortgage loans and other amounts secured by liens against
the property at the time of application, including any unpaid and delinquent special assessments
and interest and any delinquent property taxes, penalties, and interest, but not including property
taxes payable during the year.
    Subd. 2. Certification by commissioner. On or before December 1 of the year of initial
application, the commissioner shall certify to the county auditor of the county in which the
qualifying homestead is located (1) the annual maximum property tax amount; and (2) the
maximum allowable deferral. On or before December 1 of any year in which a homeowner files a
resumption of eligibility certification, the commissioner shall certify to the county auditor the new
annual maximum property tax amount to be used in calculating the deferral for subsequent years.
    Subd. 3. Calculation of deferred property tax amount. When final property tax amounts
for the following year have been determined, the county auditor shall calculate the "deferred
property tax amount." The deferred property tax amount is equal to the lesser of (1) the maximum
allowable deferral for the year; or (2) the difference between (i) the total amount of property
taxes and special assessments levied upon the qualifying homestead by all taxing jurisdictions
and (ii) the maximum property tax amount. For this purpose "special assessments" includes
any assessment, fee, or other charge that may by law, and which does, appear on the property
tax statement for the property for collection under the laws applicable to the enforcement of real
estate taxes. Any tax attributable to new improvements made to the property after the initial
application has been approved under section 290B.04, subdivision 2, must be excluded when
determining any subsequent deferred property tax amount. The county auditor shall annually,
on or before April 15, certify to the commissioner of revenue the property tax deferral amounts
determined under this subdivision by property and by owner.
    Subd. 4. Limitation on total amount of deferred taxes. The total amount of deferred taxes
and interest on a property, when added to (1) the balance owing on any mortgages on the property
at the time of initial application; and (2) other amounts secured by liens on the property at the
time of the initial application, may not exceed 75 percent of the assessor's current estimated
market value of the property.
History: 1997 c 231 art 14 s 8; 1998 c 389 art 5 s 9-11; 1999 c 243 art 5 s 32; 2000 c 490
art 5 s 22,23; 2005 c 151 art 5 s 37

290B.06 REFUNDS; OFFSET.
For purposes of qualifying for the regular property tax refund or the special refund for
homeowners under chapter 290A, the qualifying tax is the full amount of taxes, including the
deferred portion of the tax. In any year in which a program participant chooses to have property
taxes deferred under this section, any refund as defined in section 270A.03, subdivision 7, must
be taken first as a deduction from the amount of the deferred tax for that year, and second as a
deduction against any outstanding deferral from previous years, rather than as a cash payment.
The commissioner shall cancel any current year's deferral or previous years' deferral and interest
that is offset by the refunds. If the total of the refund amounts exceeds the sum of the deferred tax
for the current year and cumulative deferred tax and interest for previous years, the commissioner
shall then remit the excess amount to the homeowner. On or before the date on which the
commissioner issues property tax refunds, the commissioner shall notify program participants of
any reduction in the deferred amount for the current and previous years resulting from refunds.
History: 1997 c 231 art 14 s 9; 1998 c 389 art 5 s 12

290B.07 LIEN; DEFERRED PORTION.
(a) Payment by the state to the county treasurer of property taxes, penalties, interest, or
special assessments and interest deferred under this chapter is deemed a loan from the state to the
program participant. The commissioner must compute the interest as provided in section 270C.40,
subdivision 5 , but not to exceed five percent, and maintain records of the total deferred amount
and interest for each participant. Interest shall accrue beginning September 1 of the payable year
for which the taxes are deferred. Any deferral made under this chapter shall not be construed as
delinquent property taxes.
The lien created under section 272.31 continues to secure payment by the taxpayer, or by the
taxpayer's successors or assigns, of the amount deferred, including interest, with respect to all
years for which amounts are deferred. The lien for deferred taxes and interest has the same priority
as any other lien under section 272.31, except that liens, including mortgages, recorded or filed
prior to the recording or filing of the notice under section 290B.04, subdivision 2, have priority
over the lien for deferred taxes and interest. A seller's interest in a contract for deed, in which a
qualifying homeowner is the purchaser or an assignee of the purchaser, has priority over deferred
taxes and interest on deferred taxes, regardless of whether the contract for deed is recorded or
filed. The lien for deferred taxes and interest for future years has the same priority as the lien for
deferred taxes and interest for the first year, which is always higher in priority than any mortgages
or other liens filed, recorded, or created after the notice recorded or filed under section 290B.04,
subdivision 2 . The county treasurer or auditor shall maintain records of the deferred portion and
shall list the amount of deferred taxes for the year and the cumulative deferral and interest for all
previous years as a lien against the property. In any certification of unpaid taxes for a tax parcel,
the county auditor shall clearly distinguish between taxes payable in the current year, deferred
taxes and interest, and delinquent taxes. Payment of the deferred portion becomes due and owing
at the time specified in section 290B.08. Upon receipt of the payment, the commissioner shall
issue a receipt for it to the person making the payment upon request and shall notify the auditor
of the county in which the parcel is located, within ten days, identifying the parcel to which the
payment applies. Upon receipt by the commissioner of revenue of collected funds in the amount
of the deferral, the state's loan to the program participant is deemed paid in full.
(b) If property for which taxes have been deferred under this chapter forfeits under chapter
281 for nonpayment of a nondeferred property tax amount, or because of nonpayment of amounts
previously deferred following a termination under section 290B.08, the lien for the taxes deferred
under this chapter, plus interest and costs, shall be canceled by the county auditor as provided in
section 282.07. However, notwithstanding any other law to the contrary, any proceeds from a
subsequent sale of the property under chapter 282 or another law, must be used to first reimburse
the county's forfeited tax sale fund for any direct costs of selling the property or any costs directly
related to preparing the property for sale, and then to reimburse the state for the amount of the
canceled lien. Within 90 days of the receipt of any sale proceed to which the state is entitled under
these provisions, the county auditor must pay those funds to the commissioner of revenue by
warrant for deposit in the general fund. No other deposit, use, distribution, or release of gross sale
proceeds or receipts may be made by the county until payments sufficient to fully reimburse the
state for the canceled lien amount have been transmitted to the commissioner.
History: 1997 c 231 art 14 s 10; 1998 c 389 art 5 s 13; 2000 c 490 art 5 s 24; 2005 c
151 art 2 s 17

290B.08 TERMINATION OF DEFERRAL; PAYMENT OF DEFERRED TAXES.
    Subdivision 1. Termination. (a) The deferral of taxes granted under this chapter terminates
when one of the following occurs:
(1) the property is sold or transferred;
(2) the death of all qualifying homeowners;
(3) the homeowner notifies the commissioner in writing that the homeowner desires to
discontinue the deferral; or
(4) the property no longer qualifies as a homestead.
(b) A property is not terminated from the program because no deferred property tax amount
is determined on the homestead for any given year after the homestead's initial enrollment into the
program.
    Subd. 2. Payment upon termination. Upon the termination of the deferral under subdivision
1, the amount of deferred taxes, penalties, interest, and special assessments and interest, plus the
recording or filing fees under both section 290B.04, subdivision 2, and this subdivision becomes
due and payable to the commissioner within 90 days of termination of the deferral for terminations
under subdivision 1, paragraph (a), clauses (1) and (2), and within one year of termination of the
deferral for terminations under subdivision 1, paragraph (a), clauses (3) and (4). No additional
interest is due on the deferral if timely paid. On receipt of payment, the commissioner shall within
ten days notify the auditor of the county in which the parcel is located, identifying the parcel to
which the payment applies and shall remit the recording or filing fees under section 290B.04,
subdivision 2 , and this subdivision to the auditor. A notice of termination of deferral, containing
the legal description and the recording or filing data for the notice of qualification for deferral
under section 290B.04, subdivision 2, shall be prepared and recorded or filed by the county
auditor in the same office in which the notice of qualification for deferral under section 290B.04,
subdivision 2 , was recorded or filed, and the county auditor shall mail a copy of the notice of
termination to the property owner. The property owner shall pay the recording or filing fees.
Upon recording or filing of the notice of termination of deferral, the notice of qualification for
deferral under section 290B.04, subdivision 2, and the lien created by it are discharged. If the
deferral is not timely paid, the penalty, interest, lien, forfeiture, and other rules for the collection
of ad valorem property taxes apply.
History: 1997 c 231 art 14 s 11; 1998 c 389 art 5 s 14; 2000 c 490 art 5 s 25,26

290B.09 STATE REIMBURSEMENT.
    Subdivision 1. Determination; payment. The county auditor shall determine the total
current year's deferred amount of property tax under this chapter in the county, and submit those
amounts as part of the abstracts of tax lists submitted by the county auditors under section 275.29.
The commissioner may make changes in the abstracts of tax lists as deemed necessary. The
commissioner of revenue, after such review, shall pay the deferred amount of property tax to
each county treasurer on or before August 31.
The county treasurer shall distribute as part of the October settlement the funds received as if
they had been collected as a part of the property tax.
    Subd. 2. Appropriation. An amount sufficient to pay the total amount of property tax
determined under subdivision 1, plus any amounts paid under section 290B.04, subdivision 7, is
annually appropriated from the general fund to the commissioner of revenue.
History: 1997 c 231 art 14 s 12; 1998 c 389 art 5 s 15; 2000 c 490 art 5 s 27

290B.10 SENIOR DEFERRAL PROGRAM; INFORMATION PROVIDED.
The commissioner of revenue shall provide information about the senior deferral program
and eligibility criteria for the program in the instruction booklet prepared for taxpayers to use in
applying for property tax refunds under chapter 290A.
History: 1998 c 389 art 5 s 16