HF 168

01/21/25   REVISOR  EAP/CH  25-01443
This Document can be made available
in alternative formats upon request  State of Minnesota
  HOUSE OF REPRESENTATIVES
  NINETY-FOURTH SESSION
  H. F. No.   168
02/10/2025     Authored by Robbins, Harder, Davids, Warwas, Johnson, W., and others
  The bill was read for the first time and referred to the Committee on Taxes
1.1A bill for an act
1.2relating to taxation; property; property tax refund; establishing a process for seniors
1.3to receive an advance credit of the homestead credit refund; establishing the advance
1.4credit; amending Minnesota Statutes 2024, sections 273.1392; 273.1393; 275.065,
1.5subdivision 3; 276.04, subdivision 2; 290A.03, subdivision 13, by adding
1.6subdivisions; proposing coding for new law in Minnesota Statutes, chapters 273;
1.7290A.
1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.9Section 1. [273.1389] ADVANCE HOMESTEAD CREDIT FOR SENIORS.
1.10Subdivision 1. Eligibility. Homestead property is eligible to receive the advance
1.11homestead credit for seniors under this section if it is owned by an eligible senior claimant
1.12who received homestead treatment on the property in the prior taxes payable year. For the
1.13purposes of this section, "eligible senior claimant" means a claimant who has submitted an
1.14application and has been determined eligible under section 290A.071.
1.15Subd. 2. Credit amount. For each qualifying property, the amount of the advance
1.16homestead credit for seniors is equal to 50 percent of the amount of the homestead credit
1.17refund the property owner received in the previous year.
1.18Subd. 3. Certification. No later than January 2 of the year for which an eligible senior
1.19claimant elected to receive the advance homestead credit for seniors under this section, the
1.20commissioner of revenue must calculate and certify to each county auditor credit amounts
1.21under this section. The county auditor must apply the credit to each qualifying property's
1.22first half payment. If a property's credit amount under subdivision 2 exceeds the first half
1.23payment amount after all other applicable credits, the auditor must reduce the advance
1.24homestead credit for seniors so that the first half payment amount is $0. No later than July
Section 1.  1
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2.1  1 of the taxes payable year in which the credit is applied, the county auditor must certify
2.2  any reductions under this subdivision to the commissioner of revenue under section 270C.85,
2.3  subdivision 2. The commissioner shall review the certifications for accuracy and may make
2.4  any changes the commissioner deems necessary or return the certification to the county
2.5  auditor for correction.
2.6      Subd. 4. Payment. (a) The commissioner of revenue shall reimburse each local taxing
2.7  jurisdiction, other than school districts, for the tax reductions granted under this section in
2.8  one installment on October 31 of the taxes payable year for which the reductions are granted,
2.9  including in each payment any prior year adjustments. The reimbursements related to tax
2.10 increments shall be issued in one installment each year on December 26.
2.11     (b) The commissioner of revenue shall certify the total of the tax reductions granted
2.12 under this section for each taxes payable year within each school district to the commissioner
2.13 of education. The commissioner of education shall pay the reimbursement amounts to each
2.14 school district as provided in section 273.1392.
2.15     Subd. 5. Appropriation. An amount sufficient to make the payments required by this
2.16 section to taxing jurisdictions other than school districts is annually appropriated from the
2.17 general fund to the commissioner of revenue. An amount sufficient to make the payments
2.18 required by this section for school districts is annually appropriated from the general fund
2.19 to the commissioner of education.
2.20     EFFECTIVE DATE. This section is effective beginning with property taxes payable
2.21 in 2027.
2.22   Sec. 2. Minnesota Statutes 2024, section 273.1392, is amended to read:
2.23     273.1392 PAYMENT; SCHOOL DISTRICTS.
2.24     The amounts of bovine tuberculosis credit reimbursements under section 273.113;
2.25 conservation tax credits under section 273.119; disaster or emergency reimbursement under
2.26 sections 273.1231 to 273.1235; agricultural credits under sections 273.1384 and 273.1387;
2.27 the advance homestead credit for seniors under section 273.1389; aids and credits under
2.28 section 273.1398; enterprise zone property credit payments under section 469.171;
2.29 metropolitan agricultural preserve reduction under section 473H.10; and electric generation
2.30 transition aid under section 477A.24 for school districts, shall be certified to the Department
2.31 of Education by the Department of Revenue. The amounts so certified shall be paid according
2.32 to section 127A.45, subdivisions 9, 10, and 13.
Sec. 2.  2
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3.1      EFFECTIVE DATE. This section is effective beginning with property taxes payable
3.2  in 2027.
3.3    Sec. 3. Minnesota Statutes 2024, section 273.1393, is amended to read:
3.4      273.1393 COMPUTATION OF NET PROPERTY TAXES.
3.5      Notwithstanding any other provisions to the contrary, "net" property taxes are determined
3.6  by subtracting the credits in the order listed from the gross tax:
3.7      (1) disaster credit as provided in sections 273.1231 to 273.1235;
3.8      (2) powerline credit as provided in section 273.42;
3.9      (3) agricultural preserves credit as provided in section 473H.10;
3.10     (4) enterprise zone credit as provided in section 469.171;
3.11     (5) disparity reduction credit;
3.12     (6) conservation tax credit as provided in section 273.119;
3.13     (7) the school bond credit as provided in section 273.1387;
3.14     (8) agricultural credit as provided in section 273.1384;
3.15     (9) taconite homestead credit as provided in section 273.135;
3.16     (10) supplemental homestead credit as provided in section 273.1391; and
3.17     (11) the bovine tuberculosis zone credit, as provided in section 273.113.; and
3.18     (12) the advance homestead credit for seniors under section 273.1389.
3.19     The combination of all property tax credits must not exceed the gross tax amount.
3.20     EFFECTIVE DATE. This section is effective beginning with property taxes payable
3.21 in 2027.
3.22   Sec. 4. Minnesota Statutes 2024, section 275.065, subdivision 3, is amended to read:
3.23     Subd. 3. Notice of proposed property taxes. (a) The county auditor shall prepare and
3.24 the county treasurer shall deliver after November 10 and on or before November 24 each
3.25 year, by first class mail to each taxpayer at the address listed on the county's current year's
3.26 assessment roll, a notice of proposed property taxes. Upon written request by the taxpayer,
3.27 the treasurer may send the notice in electronic form or by electronic mail instead of on paper
3.28 or by ordinary mail.
Sec. 4.  3
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4.1      (b) The commissioner of revenue shall prescribe the form of the notice.
4.2      (c) The notice must inform taxpayers that it contains the amount of property taxes each
4.3  taxing authority proposes to collect for taxes payable the following year. In the case of a
4.4  town, or in the case of the state general tax, the final tax amount will be its proposed tax.
4.5  The notice must clearly state for each city that has a population over 500, county, school
4.6  district, regional library authority established under section 134.201, metropolitan taxing
4.7  districts as defined in paragraph (i), and fire protection and emergency medical services
4.8  special taxing districts established under section 144F.01, the time and place of a meeting
4.9  for each taxing authority in which the budget and levy will be discussed and public input
4.10 allowed, prior to the final budget and levy determination. The taxing authorities must provide
4.11 the county auditor with the information to be included in the notice on or before the time it
4.12 certifies its proposed levy under subdivision 1. The public must be allowed to speak at that
4.13 meeting, which must occur after November 24 and must not be held before 6:00 p.m. It
4.14 must provide a website address and a telephone number for the taxing authority that taxpayers
4.15 may call if they have questions related to the notice and an address where comments will
4.16 be received by mail, except that no notice required under this section shall be interpreted
4.17 as requiring the printing of a personal telephone number or address as the contact information
4.18 for a taxing authority. If a taxing authority does not maintain a website or public offices
4.19 where telephone calls can be received by the authority, the authority may inform the county
4.20 of the lack of a public website or telephone number and the county shall not list a website
4.21 or telephone number for that taxing authority.
4.22     (d) The notice must state for each parcel:
4.23     (1) the market value of the property as determined under section 273.11, and used for
4.24 computing property taxes payable in the following year and for taxes payable in the current
4.25 year as each appears in the records of the county assessor on November 1 of the current
4.26 year; and, in the case of residential property, whether the property is classified as homestead
4.27 or nonhomestead. The notice must clearly inform taxpayers of the years to which the market
4.28 values apply and that the values are final values;
4.29     (2) the items listed below, shown separately by county, city or town, and state general
4.30 tax, agricultural homestead credit under section 273.1384, school building bond agricultural
4.31 credit under section 273.1387, the advance homestead credit for seniors under section
4.32 273.1389, voter approved school levy, other local school levy, and the sum of the special
4.33 taxing districts, and as a total of all taxing authorities:
4.34     (i) the actual tax for taxes payable in the current year; and
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5.1      (ii) the proposed tax amount.
5.2      If the county levy under clause (2) includes an amount for a lake improvement district
5.3  as defined under sections 103B.501 to 103B.581, the amount attributable for that purpose
5.4  must be separately stated from the remaining county levy amount.
5.5      In the case of a town or the state general tax, the final tax shall also be its proposed tax
5.6  unless the town changes its levy at a special town meeting under section 365.52. If a school
5.7  district has certified under section 126C.17, subdivision 9, that a referendum will be held
5.8  in the school district at the November general election, the county auditor must note next
5.9  to the school district's proposed amount that a referendum is pending and that, if approved
5.10 by the voters, the tax amount may be higher than shown on the notice. In the case of the
5.11 city of Minneapolis, the levy for Minneapolis Park and Recreation shall be listed separately
5.12 from the remaining amount of the city's levy. In the case of the city of St. Paul, the levy for
5.13 the St. Paul Library Agency must be listed separately from the remaining amount of the
5.14 city's levy. In the case of Ramsey County, any amount levied under section 134.07 may be
5.15 listed separately from the remaining amount of the county's levy. In the case of a parcel
5.16 where tax increment or the fiscal disparities areawide tax under chapter 276A or 473F
5.17 applies, the proposed tax levy on the captured value or the proposed tax levy on the tax
5.18 capacity subject to the areawide tax must each be stated separately and not included in the
5.19 sum of the special taxing districts; and
5.20     (3) the increase or decrease between the total taxes payable in the current year and the
5.21 total proposed taxes, expressed as a percentage.
5.22     For purposes of this section, the amount of the tax on homesteads qualifying under the
5.23 senior citizens' property tax deferral program under chapter 290B is the total amount of
5.24 property tax before subtraction of the deferred property tax amount.
5.25     (e) The notice must clearly state that the proposed or final taxes do not include the
5.26 following:
5.27     (1) special assessments;
5.28     (2) levies approved by the voters after the date the proposed taxes are certified, including
5.29 bond referenda and school district levy referenda;
5.30     (3) a levy limit increase approved by the voters by the first Tuesday after the first Monday
5.31 in November of the levy year as provided under section 275.73;
5.32     (4) amounts necessary to pay cleanup or other costs due to a natural disaster occurring
5.33 after the date the proposed taxes are certified;
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6.1      (5) amounts necessary to pay tort judgments against the taxing authority that become
6.2  final after the date the proposed taxes are certified; and
6.3      (6) the contamination tax imposed on properties which received market value reductions
6.4  for contamination.
6.5      (f) Except as provided in subdivision 7, failure of the county auditor to prepare or the
6.6  county treasurer to deliver the notice as required in this section does not invalidate the
6.7  proposed or final tax levy or the taxes payable pursuant to the tax levy.
6.8      (g) If the notice the taxpayer receives under this section lists the property as
6.9  nonhomestead, and satisfactory documentation is provided to the county assessor by the
6.10 applicable deadline, and the property qualifies for the homestead classification in that
6.11 assessment year, the assessor shall reclassify the property to homestead for taxes payable
6.12 in the following year.
6.13     (h) In the case of class 4 residential property used as a residence for lease or rental
6.14 periods of 30 days or more, the taxpayer must either:
6.15     (1) mail or deliver a copy of the notice of proposed property taxes to each tenant, renter,
6.16 or lessee; or
6.17     (2) post a copy of the notice in a conspicuous place on the premises of the property.
6.18     The notice must be mailed or posted by the taxpayer by November 27 or within three
6.19 days of receipt of the notice, whichever is later. A taxpayer may notify the county treasurer
6.20 of the address of the taxpayer, agent, caretaker, or manager of the premises to which the
6.21 notice must be mailed in order to fulfill the requirements of this paragraph.
6.22     (i) For purposes of this subdivision and subdivision 6, "metropolitan special taxing
6.23 districts" means the following taxing districts in the seven-county metropolitan area that
6.24 levy a property tax for any of the specified purposes listed below:
6.25     (1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325, 473.446,
6.26 473.521, 473.547, or 473.834;
6.27     (2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672; and
6.28     (3) Metropolitan Mosquito Control Commission under section 473.711.
6.29     For purposes of this section, any levies made by the regional rail authorities in the county
6.30 of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 398A
6.31 shall be included with the appropriate county's levy.
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7.1      (j) The governing body of a county, city, or school district may, with the consent of the
7.2  county board, include supplemental information with the statement of proposed property
7.3  taxes about the impact of state aid increases or decreases on property tax increases or
7.4  decreases and on the level of services provided in the affected jurisdiction. This supplemental
7.5  information may include information for the following year, the current year, and for as
7.6  many consecutive preceding years as deemed appropriate by the governing body of the
7.7  county, city, or school district. It may include only information regarding:
7.8      (1) the impact of inflation as measured by the implicit price deflator for state and local
7.9  government purchases;
7.10     (2) population growth and decline;
7.11     (3) state or federal government action; and
7.12     (4) other financial factors that affect the level of property taxation and local services
7.13 that the governing body of the county, city, or school district may deem appropriate to
7.14 include.
7.15     The information may be presented using tables, written narrative, and graphic
7.16 representations and may contain instruction toward further sources of information or
7.17 opportunity for comment.
7.18     EFFECTIVE DATE. This section is effective beginning with property taxes payable
7.19 in 2027.
7.20   Sec. 5. Minnesota Statutes 2024, section 276.04, subdivision 2, is amended to read:
7.21     Subd. 2. Contents of tax statements. (a) The treasurer shall provide for the printing of
7.22 the tax statements. The commissioner of revenue shall prescribe the form of the property
7.23 tax statement and its contents. The tax statement must not state or imply that property tax
7.24 credits are paid by the state of Minnesota. The statement must contain a tabulated statement
7.25 of the dollar amount due to each taxing authority and the amount of the state tax from the
7.26 parcel of real property for which a particular tax statement is prepared. The dollar amounts
7.27 attributable to the county, the state tax, the voter approved school tax, the other local school
7.28 tax, the township or municipality, and the total of the metropolitan special taxing districts
7.29 as defined in section 275.065, subdivision 3, paragraph (i), must be separately stated. The
7.30 amounts due all other special taxing districts, if any, may be aggregated except that any
7.31 levies made by the regional rail authorities in the county of Anoka, Carver, Dakota, Hennepin,
7.32 Ramsey, Scott, or Washington under chapter 398A shall be listed on a separate line directly
7.33 under the appropriate county's levy. If the county levy under this paragraph includes an
Sec. 5.  7
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8.1  amount for a lake improvement district as defined under sections 103B.501 to 103B.581,
8.2  the amount attributable for that purpose must be separately stated from the remaining county
8.3  levy amount. In the case of Ramsey County, if the county levy under this paragraph includes
8.4  an amount for public library service under section 134.07, the amount attributable for that
8.5  purpose may be separated from the remaining county levy amount. The amount of the tax
8.6  on homesteads qualifying under the senior citizens' property tax deferral program under
8.7  chapter 290B is the total amount of property tax before subtraction of the deferred property
8.8  tax amount. The amount of the tax on contamination value imposed under sections 270.91
8.9  to 270.98, if any, must also be separately stated. The dollar amounts, including the dollar
8.10 amount of any special assessments, may be rounded to the nearest even whole dollar. For
8.11 purposes of this section whole odd-numbered dollars may be adjusted to the next higher
8.12 even-numbered dollar.
8.13(b) The property tax statements for manufactured homes and sectional structures taxed
8.14 as personal property shall contain the same information that is required on the tax statements
8.15 for real property.
8.16(c) Real and personal property tax statements must contain the following information
8.17 in the order given in this paragraph. The information must contain the current year tax
8.18 information in the right column with the corresponding information for the previous year
8.19 in a column on the left:
8.20(1) the property's estimated market value under section 273.11, subdivision 1;
8.21(2) the property's homestead market value exclusion under section 273.13, subdivision
8.22 35;
8.23(3) the property's taxable market value under section 272.03, subdivision 15;
8.24(4) the property's gross tax, before credits;
8.25(5) for agricultural properties, the credits under sections 273.1384 and 273.1387;
8.26(6) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135;
8.27 273.1389; 273.1391; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount
8.28 of credit received under section 273.135 must be separately stated and identified as "taconite
8.29 tax relief"; and
8.30(7) the net tax payable in the manner required in paragraph (a).
8.31(d) If the county uses envelopes for mailing property tax statements and if the county
8.32 agrees, a taxing district may include a notice with the property tax statement notifying
8.33 taxpayers when the taxing district will begin its budget deliberations for the current year,
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9.1  and encouraging taxpayers to attend the hearings. If the county allows notices to be included
9.2  in the envelope containing the property tax statement, and if more than one taxing district
9.3  relative to a given property decides to include a notice with the tax statement, the county
9.4  treasurer or auditor must coordinate the process and may combine the information on a
9.5  single announcement.
9.6      EFFECTIVE DATE. This section is effective beginning with property taxes payable
9.7  in 2027.
9.8    Sec. 6. Minnesota Statutes 2024, section 290A.03, subdivision 13, is amended to read:
9.9      Subd. 13. Property taxes payable. (a) "Property taxes payable" means the property tax
9.10 exclusive of:
9.11     (1) special assessments, penalties, and interest payable on a claimant's homestead after
9.12 deductions made under sections 273.135, 273.1384, 273.1391, 273.42, subdivision 2, and;
9.13     (2) any other state paid property tax credits in any calendar year, except the credit under
9.14 section 273.1389; and
9.15     (3) after any refund claimed and allowable under section 290A.04, subdivision 2h, that
9.16 is first payable in the year that the property tax is payable.
9.17     (b) In the case of a claimant who makes ground lease payments, "property taxes payable"
9.18 includes the amount of the payments directly attributable to the property taxes assessed
9.19 against the parcel on which the house is located.
9.20     (c) Regardless of the limitations in section 280A(c)(5) of the Internal Revenue Code,
9.21 "property taxes payable" must be apportioned or reduced for the use of a portion of the
9.22 claimant's homestead for a business purpose if the claimant deducts any business depreciation
9.23 expenses for the use of a portion of the homestead or deducts expenses under section 280A
9.24 of the Internal Revenue Code for a business operated in the claimant's homestead.
9.25     (d) For manufactured homes, "property taxes payable" shall also include 17 percent of
9.26 the gross rent paid in the preceding year for the site on which the homestead is located.
9.27     (e) When a homestead is owned by two or more persons as joint tenants or tenants in
9.28 common, such tenants shall determine between them which tenant may claim the property
9.29 taxes payable on the homestead. If they are unable to agree, the matter shall be referred to
9.30 the commissioner of revenue whose decision shall be final.
9.31     (f) Property taxes are considered payable in the year prescribed by law for payment of
9.32 the taxes.
Sec. 6.  9
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10.1      (g) In the case of a claim relating to "property taxes payable," the claimant must have
10.2  owned and occupied the homestead on January 2 of the year in which the tax is payable and
10.3  (i) the property must have been classified as homestead property pursuant to section 273.124,
10.4  on or before December 31 of the assessment year to which the "property taxes payable"
10.5  relate; or (ii) the claimant must provide documentation from the local assessor that application
10.6  for homestead classification has been made on or before December 31 of the year in which
10.7  the "property taxes payable" were payable and that the assessor has approved the application.
10.8      EFFECTIVE DATE. This section is effective for refunds based on property taxes
10.9  payable in 2027 and thereafter.
10.10   Sec. 7. Minnesota Statutes 2024, section 290A.03, is amended by adding a subdivision to
10.11 read:
10.12     Subd. 17. Eligible senior claimant. "Eligible senior claimant" means a claimant who
10.13 has attained at least the age of 65, or in the case of a married claimant filing a joint claim,
10.14 one spouse has attained at least the age of 65 and the other spouse has attained at least the
10.15 age of 62.
10.16     EFFECTIVE DATE. This section is effective for advance payment elections after
10.17 December 31, 2025, for credits applied to property taxes payable in 2027 and thereafter.
10.18   Sec. 8. Minnesota Statutes 2024, section 290A.03, is amended by adding a subdivision to
10.19 read:
10.20     Subd. 18. Homestead credit refund. "Homestead credit refund" means the refund under
10.21 section 290A.04, subdivision 2.
10.22     EFFECTIVE DATE. This section is effective for advance payment elections after
10.23 December 31, 2025, for credits applied to property taxes payable in 2027 and thereafter.
10.24   Sec. 9. [290A.071] ADVANCE CREDIT OF HOMESTEAD CREDIT REFUNDS.
10.25     Subdivision 1. Advance payment election established. The commissioner must establish
10.26 a process to allow an eligible senior claimant to elect to receive advance credit of the
10.27 homestead credit refund, as provided in this section.
10.28     Subd. 2. Election for senior claimants to receive advance payments. At the time of
10.29 filing a claim for the homestead credit refund, an eligible senior claimant may elect to
10.30 receive an advance credit of the claimant's homestead credit refund for property taxes payable
10.31 in the following year by applying for the advance homestead credit for seniors under section
 Sec. 9.  10
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11.1  273.1389. The application must be made in the form and manner specified by the
11.2  commissioner, but the claimant must attest that they intend to continue to occupy the same
11.3  homestead in the following year.
11.4      Subd. 3. Reconciliation. (a) A claimant's homestead credit refund is reduced by the
11.5  amount of any advance homestead credit for seniors under section 273.1389 received by
11.6  the claimant. If a claimant's credit exceeds the amount of the refund for which the claimant
11.7  was eligible, the claimant must repay to the commissioner the difference between the amount
11.8  of advance payments received and the credit amount for which the claimant is eligible.
11.9      (b) The commissioner must deposit repayments under this subdivision in the general
11.10 fund.
11.11     (c) A claimant that receives an advance credit under this section and section 273.1389
11.12 must file a claim for a homestead credit refund for the property taxes payable year for which
11.13 the advance credit was received.
11.14     EFFECTIVE DATE. This section is effective for advance payment elections after
11.15 December 31, 2025, for credits applied to property taxes payable in 2027 and thereafter.
 Sec. 9.  11