HF5069

Purpose

• Create a property tax exemption for the United Way of Bemidji Area’s property acquired on August 1, 2025, so it is exempt from property taxes payable in 2026. The measure also outlines how the state will reimburse local governments for the foregone taxes and how refunds for taxes already paid would be handled.

Main Provisions

• Exemption from property taxes: The property acquired by the United Way of Bemidji Area on August 1, 2025 is exempt from property taxes payable in 2026, despite existing law to the contrary.
• Exemption application process: The county assessor must provide the United Way of Bemidji Area with an exemption application for assessment year 2025, and the United Way must file the application with the county assessor by August 1, 2026 to qualify for the exemption.
• State funding for the exemption: An amount necessary to make a payment to the county for the property taxes attributable to the exemption is appropriated from the general fund to the commissioner of revenue in fiscal year 2027.
• Payment timing and certification: By August 1, 2026, the Beltrami County auditor must certify to the commissioner of revenue the amount to be paid to the county under the exemption. The commissioner of revenue must make this payment by August 15, 2026.
• Handling of unpaid tax portions: For any unpaid portion of the 2026 tax, the county auditor must distribute the payment to local jurisdictions in proportion to the amount of tax levied on the property in 2026.
• Tax refunds: The county auditor must also provide a refund of any taxes paid by the United Way of Bemidji Area for property taxes payable in 2026 on the property.

Administrative and Financial Details

• Overrides/clarifications: The exemption is provided “notwithstanding” Minnesota Statutes section 272.02 subdivision 38 paragraph b and any other law to the contrary, indicating it bypasses standard rules for this case.
• Funding source and timeline: The exemption payments are funded from the general fund to the commissioner of revenue in fiscal year 2027; state payment to counties is scheduled for August 2026.
• Deadlines: August 1, 2026 is the filing deadline for the exemption application; August 15, 2026 is the deadline for the state to make the payment.

Affected Parties

• United Way of Bemidji Area (property owner eligible for the exemption)
• Beltrami County (county assessor and county auditor, responsible for processing the exemption and payments)
• Commissioner of Revenue (receives funding and makes payments to counties)
• Local jurisdictions that levy property taxes in 2026 (receive distributions if taxes remain unpaid)

Effects and Changes to Law

• Adds a targeted property tax exemption for a specific property owned by a local United Way organization.
• Establishes a state reimbursement mechanism to compensate counties for the foregone tax revenue, funded from the general fund in a future fiscal year.
• Creates a process for refunds of taxes already paid by the nonprofit for the year of the exemption and outlines how any remaining unpaid taxes are distributed to or across local jurisdictions.
• Introduces specific filing and payment deadlines tied to assessment year 2025 and tax year 2026.

Effective Scope and Dates

• Applies to property acquired on August 1, 2025.
• Exemption applies to property taxes payable in 2026.
• Administrative actions and payments occur in 2026 and the related funding is appropriated in fiscal year 2027.

What This Change Means for People

• The United Way of Bemidji Area will not owe property taxes on the specified property for 2026.
• Local governments will be reimbursed by the state for the foregone taxes, with a process to share any remaining unpaid amounts with jurisdictions based on their 2026 tax levies.
• If the United Way had already paid taxes for 2026 on the property, they would receive a refund for those payments.

Relevant Terms - United Way of Bemidji Area - property tax exemption - property taxes payable in 2026 - assessment year 2025 - exemption application - county assessor - Beltrami County - county auditor - commissioner of revenue - general fund - fiscal year 2027 - August 1, 2026 - August 15, 2026 - refund of taxes paid - local jurisdictions - tax levy - notwithstanding Minnesota Statutes section 272.02 subdivision 38 paragraph b - exemption for property acquired on August 1, 2025