Redevelopment area homestead credit establishment

A bill for an act

relating to taxation; property; establishing the redevelopment area homestead

credit; appropriating money; amending Minnesota Statutes 2024, sections 273.1392;

273.1393; 275.065, subdivision 3; 275.07, by adding a subdivision; 275.08,

subdivision 1b; 276.04, subdivision 2; proposing coding for new law in Minnesota

Statutes, chapter 273.

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

Section 1.

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[273.1388] REDEVELOPMENT AREA HOMESTEAD CREDIT.

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Subdivision 1.

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Eligibility.

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Property is eligible to receive the credit under this section if

it is classified as 1a or 1b under section 273.13, subdivision 22, and is located in a city of

the second class that was designated as a redevelopment area by the United States Department

of Commerce under the Public Works and Economic Development Act of 1965, Public

Law 89-136, title IV, section 401(a)(4).

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Subd. 2.

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Credit amount.

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For each qualifying property, the credit under this section is

equal to 70 percent of the property's net tax capacity multiplied by the city capital debt tax

rate determined under section 275.08, subdivision 1b, paragraph (d).

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Subd. 3.

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Credit reimbursements.

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The county auditor shall determine the tax reductions

allowed under this section within the county for each taxes payable year and shall certify

that amount to the commissioner of revenue under section 270C.85, subdivision 2, clause

(4). The county auditor shall also certify any prior year adjustments. The commissioner

shall review the certifications for accuracy, and may make such changes as are deemed

necessary, or return the certification to the county auditor for correction. The credit under

this section must be used to reduce the city net tax capacity-based property tax as provided

in section 273.1393.

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Subd. 4.

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Payment.

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The commissioner of revenue shall reimburse each local taxing

jurisdiction for the tax reductions granted under this section in two equal installments on

October 31 and December 26 of the taxes payable year for which the reductions are granted,

including in each payment the prior year adjustments certified under section 270C.85,

subdivision 2, for that taxes payable year.

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Subd. 5.

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Appropriation.

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An amount sufficient to make payments required by this section

is annually appropriated from the general fund to the commissioner of revenue.

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EFFECTIVE DATE.

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This section is effective beginning with taxes payable in 2027.

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Sec. 2.

Minnesota Statutes 2024, section 273.1392, is amended to read:

273.1392 PAYMENT; SCHOOL DISTRICTS.

The amounts of bovine tuberculosis credit reimbursements under section
273.113
;

conservation tax credits under section
273.119
; disaster or emergency reimbursement under

sections
273.1231
to
273.1235
; agricultural credits under sections
273.1384
and
273.1387
;
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the redevelopment area homestead credit under section 273.1388;
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aids and credits under

section
273.1398
; enterprise zone property credit payments under section
469.171
;

metropolitan agricultural preserve reduction under section
473H.10
; and electric generation

transition aid under section
477A.24
for school districts, shall be certified to the Department

of Education by the Department of Revenue. The amounts so certified shall be paid according

to section
127A.45, subdivisions 9
, 10, and 13.

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EFFECTIVE DATE.

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This section is effective beginning with fiscal year 2028.

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Sec. 3.

Minnesota Statutes 2024, section 273.1393, is amended to read:

273.1393 COMPUTATION OF NET PROPERTY TAXES.

Notwithstanding any other provisions to the contrary, "net" property taxes are determined

by subtracting the credits in the order listed from the gross tax:

(1) disaster credit as provided in sections
273.1231
to
273.1235
;

(2) powerline credit as provided in section
273.42
;

(3) agricultural preserves credit as provided in section
473H.10
;

(4) enterprise zone credit as provided in section
469.171
;

(5) disparity reduction credit;

(6) conservation tax credit as provided in section
273.119
;

(7) the school bond credit as provided in section
273.1387
;

(8) agricultural credit as provided in section
273.1384
;

(9) taconite homestead credit as provided in section
273.135
;

(10) supplemental homestead credit as provided in section
273.1391
;
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and
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(11) the bovine tuberculosis zone credit, as provided in section
273.113
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.
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; and
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(12) the redevelopment area homestead credit, as provided in section 273.1388.

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The combination of all property tax credits must not exceed the gross tax amount.

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EFFECTIVE DATE.

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This section is effective beginning with taxes payable in 2027.

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Sec. 4.

Minnesota Statutes 2024, section 275.065, subdivision 3, is amended to read:

Subd. 3.

Notice of proposed property taxes.

(a) The county auditor shall prepare and

the county treasurer shall deliver after November 10 and on or before November 24 each

year, by first class mail to each taxpayer at the address listed on the county's current year's

assessment roll, a notice of proposed property taxes. Upon written request by the taxpayer,

the treasurer may send the notice in electronic form or by electronic mail instead of on paper

or by ordinary mail.

(b) The commissioner of revenue shall prescribe the form of the notice.

(c) The notice must inform taxpayers that it contains the amount of property taxes each

taxing authority proposes to collect for taxes payable the following year. In the case of a

town, or in the case of the state general tax, the final tax amount will be its proposed tax.

The notice must clearly state for each city that has a population over 500, county, school

district, regional library authority established under section
134.201
, metropolitan taxing

districts as defined in paragraph (i), and fire protection and emergency medical services

special taxing districts established under section
144F.01
, the time and place of a meeting

for each taxing authority in which the budget and levy will be discussed and public input

allowed, prior to the final budget and levy determination. The taxing authorities must provide

the county auditor with the information to be included in the notice on or before the time it

certifies its proposed levy under subdivision 1. The public must be allowed to speak at that

meeting, which must occur after November 24 and must not be held before 6:00 p.m. It

must provide a website address and a telephone number for the taxing authority that taxpayers

may call if they have questions related to the notice and an address where comments will

be received by mail, except that no notice required under this section shall be interpreted

as requiring the printing of a personal telephone number or address as the contact information

for a taxing authority. If a taxing authority does not maintain a website or public offices

where telephone calls can be received by the authority, the authority may inform the county

of the lack of a public website or telephone number and the county shall not list a website

or telephone number for that taxing authority.

(d) The notice must state for each parcel:

(1) the market value of the property as determined under section
273.11
, and used for

computing property taxes payable in the following year and for taxes payable in the current

year as each appears in the records of the county assessor on November 1 of the current

year; and, in the case of residential property, whether the property is classified as homestead

or nonhomestead. The notice must clearly inform taxpayers of the years to which the market

values apply and that the values are final values;

(2) the items listed below, shown separately by county, city or town, and state general

tax, agricultural homestead credit under section
273.1384
, school building bond agricultural

credit under section
273.1387
,
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the redevelopment area homestead credit under section

273.1388,
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voter approved school levy, other local school levy, and the sum of the special

taxing districts, and as a total of all taxing authorities:

(i) the actual tax for taxes payable in the current year; and

(ii) the proposed tax amount.

If the county levy under clause (2) includes an amount for a lake improvement district

as defined under sections
103B.501
to
103B.581
, the amount attributable for that purpose

must be separately stated from the remaining county levy amount.

In the case of a town or the state general tax, the final tax shall also be its proposed tax

unless the town changes its levy at a special town meeting under section
365.52
. If a school

district has certified under section
126C.17, subdivision 9
, that a referendum will be held

in the school district at the November general election, the county auditor must note next

to the school district's proposed amount that a referendum is pending and that, if approved

by the voters, the tax amount may be higher than shown on the notice. In the case of the

city of Minneapolis, the levy for Minneapolis Park and Recreation shall be listed separately

from the remaining amount of the city's levy. In the case of the city of St. Paul, the levy for

the St. Paul Library Agency must be listed separately from the remaining amount of the

city's levy. In the case of Ramsey County, any amount levied under section
134.07
may be

listed separately from the remaining amount of the county's levy. In the case of a parcel

where tax increment or the fiscal disparities areawide tax under chapter 276A or 473F

applies, the proposed tax levy on the captured value or the proposed tax levy on the tax

capacity subject to the areawide tax must each be stated separately and not included in the

sum of the special taxing districts; and

(3) the increase or decrease between the total taxes payable in the current year and the

total proposed taxes, expressed as a percentage.

For purposes of this section, the amount of the tax on homesteads qualifying under the

senior citizens' property tax deferral program under chapter 290B is the total amount of

property tax before subtraction of the deferred property tax amount.

(e) The notice must clearly state that the proposed or final taxes do not include the

following:

(1) special assessments;

(2) levies approved by the voters after the date the proposed taxes are certified, including

bond referenda and school district levy referenda;

(3) a levy limit increase approved by the voters by the first Tuesday after the first Monday

in November of the levy year as provided under section
275.73
;

(4) amounts necessary to pay cleanup or other costs due to a natural disaster occurring

after the date the proposed taxes are certified;

(5) amounts necessary to pay tort judgments against the taxing authority that become

final after the date the proposed taxes are certified; and

(6) the contamination tax imposed on properties which received market value reductions

for contamination.

(f) Except as provided in subdivision 7, failure of the county auditor to prepare or the

county treasurer to deliver the notice as required in this section does not invalidate the

proposed or final tax levy or the taxes payable pursuant to the tax levy.

(g) If the notice the taxpayer receives under this section lists the property as

nonhomestead, and satisfactory documentation is provided to the county assessor by the

applicable deadline, and the property qualifies for the homestead classification in that

assessment year, the assessor shall reclassify the property to homestead for taxes payable

in the following year.

(h) In the case of class 4 residential property used as a residence for lease or rental

periods of 30 days or more, the taxpayer must either:

(1) mail or deliver a copy of the notice of proposed property taxes to each tenant, renter,

or lessee; or

(2) post a copy of the notice in a conspicuous place on the premises of the property.

The notice must be mailed or posted by the taxpayer by November 27 or within three

days of receipt of the notice, whichever is later. A taxpayer may notify the county treasurer

of the address of the taxpayer, agent, caretaker, or manager of the premises to which the

notice must be mailed in order to fulfill the requirements of this paragraph.

(i) For purposes of this subdivision and subdivision 6, "metropolitan special taxing

districts" means the following taxing districts in the seven-county metropolitan area that

levy a property tax for any of the specified purposes listed below:

(1) Metropolitan Council under section
473.132
,
473.167
,
473.249
,
473.325
,
473.446
,

473.521
,
473.547
, or
473.834
;

(2) Metropolitan Airports Commission under section
473.667
,
473.671
, or
473.672
; and

(3) Metropolitan Mosquito Control Commission under section
473.711
.

For purposes of this section, any levies made by the regional rail authorities in the county

of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 398A

shall be included with the appropriate county's levy.

(j) The governing body of a county, city, or school district may, with the consent of the

county board, include supplemental information with the statement of proposed property

taxes about the impact of state aid increases or decreases on property tax increases or

decreases and on the level of services provided in the affected jurisdiction. This supplemental

information may include information for the following year, the current year, and for as

many consecutive preceding years as deemed appropriate by the governing body of the

county, city, or school district. It may include only information regarding:

(1) the impact of inflation as measured by the implicit price deflator for state and local

government purchases;

(2) population growth and decline;

(3) state or federal government action; and

(4) other financial factors that affect the level of property taxation and local services

that the governing body of the county, city, or school district may deem appropriate to

include.

The information may be presented using tables, written narrative, and graphic

representations and may contain instruction toward further sources of information or

opportunity for comment.

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EFFECTIVE DATE.

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This section is effective beginning with taxes payable in 2027.

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Sec. 5.

Minnesota Statutes 2024, section 275.07, is amended by adding a subdivision to

read:

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Subd. 2a.

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City capital projects levies.

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Each city containing property eligible for the

redevelopment area homestead credit under section 273.1388 must certify to the county

auditor the portion of the city levy that is levied for repayment of capital improvement bonds

issued under section 475.521.

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EFFECTIVE DATE.

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This section is effective beginning with taxes payable in 2027.

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Sec. 6.

Minnesota Statutes 2024, section 275.08, subdivision 1b, is amended to read:

Subd. 1b.

Computation of tax rates.

(a) The amounts certified to be levied against net

tax capacity under section
275.07
by an individual local government unit shall be divided

by the total net tax capacity of all taxable properties within the local government unit's

taxing jurisdiction. The resulting ratio, the local government's local tax rate, multiplied by

each property's net tax capacity shall be each property's net tax capacity tax for that local

government unit before reduction by any credits.

(b) The auditor must also determine the school debt tax rate for each school district equal

to (1) the school debt service levy certified under section
275.07, subdivision 2
, divided by

(2) the total net tax capacity of all taxable property within the district.

(c) Any amount certified to the county auditor to be levied against market value shall

be divided by the total referendum market value of all taxable properties within the taxing

district. The resulting ratio, the taxing district's new referendum tax rate, multiplied by each

property's referendum market value shall be each property's new referendum tax before

reduction by any credits. For the purposes of this subdivision, "referendum market value"

means the market value as defined in section
126C.01, subdivision 3
.

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(d) The auditor in a county that contains property eligible for the redevelopment area

homestead credit under section 273.1388 must also determine the city capital debt tax rate

for each city containing eligible properties. For the purposes of this paragraph, the city

capital debt tax rate is equal to (1) the city's levy amount certified under section 275.07,

subdivision 2a, divided by (2) the total net tax capacity of all taxable property within the

city.

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EFFECTIVE DATE.

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This section is effective beginning with taxes payable in 2027.

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Sec. 7.

Minnesota Statutes 2024, section 276.04, subdivision 2, is amended to read:

Subd. 2.

Contents of tax statements.

(a) The treasurer shall provide for the printing of

the tax statements. The commissioner of revenue shall prescribe the form of the property

tax statement and its contents. The tax statement must not state or imply that property tax

credits are paid by the state of Minnesota. The statement must contain a tabulated statement

of the dollar amount due to each taxing authority and the amount of the state tax from the

parcel of real property for which a particular tax statement is prepared. The dollar amounts

attributable to the county, the state tax, the voter approved school tax, the other local school

tax, the township or municipality, and the total of the metropolitan special taxing districts

as defined in section
275.065, subdivision 3
, paragraph (i), must be separately stated. The

amounts due all other special taxing districts, if any, may be aggregated except that any

levies made by the regional rail authorities in the county of Anoka, Carver, Dakota, Hennepin,

Ramsey, Scott, or Washington under chapter 398A shall be listed on a separate line directly

under the appropriate county's levy. If the county levy under this paragraph includes an

amount for a lake improvement district as defined under sections
103B.501
to
103B.581
,

the amount attributable for that purpose must be separately stated from the remaining county

levy amount. In the case of Ramsey County, if the county levy under this paragraph includes

an amount for public library service under section
134.07
, the amount attributable for that

purpose may be separated from the remaining county levy amount. The amount of the tax

on homesteads qualifying under the senior citizens' property tax deferral program under

chapter 290B is the total amount of property tax before subtraction of the deferred property

tax amount. The amount of the tax on contamination value imposed under sections
270.91

to
270.98
, if any, must also be separately stated. The dollar amounts, including the dollar

amount of any special assessments, may be rounded to the nearest even whole dollar. For

purposes of this section whole odd-numbered dollars may be adjusted to the next higher

even-numbered dollar.

(b) The property tax statements for manufactured homes and sectional structures taxed

as personal property shall contain the same information that is required on the tax statements

for real property.

(c) Real and personal property tax statements must contain the following information

in the order given in this paragraph. The information must contain the current year tax

information in the right column with the corresponding information for the previous year

in a column on the left:

(1) the property's estimated market value under section
273.11, subdivision 1
;

(2) the property's homestead market value exclusion under section
273.13
, subdivision

35;

(3) the property's taxable market value under section
272.03, subdivision 15
;

(4) the property's gross tax, before credits;

(5) for agricultural properties, the credits under sections
273.1384 and 273.1387
;

(6) any credits received under sections
273.119
;
273.1234
or
273.1235
;
273.135
;
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273.1388;
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273.1391
;
273.1398, subdivision 4
;
469.171
; and
473H.10
, except that the amount

of credit received under section
273.135
must be separately stated and identified as "taconite

tax relief"; and

(7) the net tax payable in the manner required in paragraph (a).

(d) If the county uses envelopes for mailing property tax statements and if the county

agrees, a taxing district may include a notice with the property tax statement notifying

taxpayers when the taxing district will begin its budget deliberations for the current year,

and encouraging taxpayers to attend the hearings. If the county allows notices to be included

in the envelope containing the property tax statement, and if more than one taxing district

relative to a given property decides to include a notice with the tax statement, the county

treasurer or auditor must coordinate the process and may combine the information on a

single announcement.

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EFFECTIVE DATE.

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This section is effective beginning with taxes payable in 2027.

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