SF5116

Purpose

• Establish a state general levy on certain types of property to fund state-level property funding and to modify how city aid is calculated for some cities.
• Update Minnesota statutes to create new subdivisions and repeal an existing subdivision, affecting how the levy is calculated and administered.

Key Levy Structure

• The state general levy is applied to:
  • Commercial/industrial property
  • Seasonal residential recreational property
  • Residential homestead property (the rate for this category is to be determined under a separate subdivision)
• Specific levy amounts stated:
  • Commercial/industrial property: 716,990,000 dollars (taxes payable in 2023 and thereafter)
  • Seasonal recreational property: 41,690,000 dollars (taxes payable in 2020 and thereafter)
  • Residential homestead property: amount determined under subdivision 3a (not specified in this excerpt)
• The levy is a state-level levy, not treated as a local tax rate under section 469.177 and not the levy of a governmental unit under chapters 276A and 473F.

Main Provisions

• Amends Minnesota Statutes 2024 section 275.025 subdivision 1 to implement the state general levy rules and rates.
• Adds new subdivisions:
  • 477A.013 subdivision 9
  • 477A.03 subdivision 2a
• Repeals Minnesota Statutes 2024 section 477A.013 subdivision 8.
• The bill also modifies the city aid formula for certain cities (details not in this excerpt).

Adjustments and Administration

• The Commissioner must adjust the preliminary or final levy rate for a year as needed to account for errors and tax base changes that affected rates in the prior two years.
• Eligible adjustments include:
  • Erroneous report of taxable value by a local official
  • Erroneous calculation by the Commissioner
  • Changes in taxable value for commercial/industrial or seasonal residential recreational property reported under section 270C.85 subdivision 2 clause 4 for the same year
• Adjustments may be made, but the Commissioner is not required to adjust if the total difference in the tax levied for the year would be less than $100,000.

Changes to Law and Repeals

• Adds new statutory subdivisions (477A.013 subdivision 9 and 477A.03 subdivision 2a) and repeals an existing subdivision (477A.013 subdivision 8).
• Partial changes to how city aid formulas operate for certain cities.

Financial Impact and Timing

• The listed levy amounts apply to specified tax payable years:
  • Commercial/industrial property: taxes payable in 2023 and later
  • Seasonal recreational property: taxes payable in 2020 and later
  • Residential homestead property: rate determined under subdivision 3a (not yet specified)
• The plan separates state levy decisions from local tax rates and local government levies.

Taxpayer Effects

• Property owners in the affected categories will see changes in how their property taxes are calculated, driven by a new state general levy and new administrative rules for rate adjustments.
• The residential homestead portion will be set by a separate rule (subdivision 3a), and the levy is distinct from local tax rates.

Implementation Notes

• The bill modifies statutes related to property tax levies and city aid formulas, and it introduces new administrative rules for rate adjustments tied to tax base changes and errors.
• Some details (such as the exact residential homestead rate and specific city aid formula changes) are not included in the excerpt provided.

Relevant Terms - state general levy - commercial/industrial property - seasonal residential recreational property - residential homestead property - taxable value - the Commissioner (of revenue) - rates (preliminary and final) - adjustments - erroneous report of taxable value - erroneous calculation - section 270C.85 subdivision 2 clause 4 - tax payable year - not treated as a local tax rate - not the levy of a governmental unit - subdivision 3a - subdivision 9 (477A.013) - subdivision 2a (477A.03) - repeal (477A.013 subdivision 8) - city aid formula - Minnesota Statutes 2024 (as amended)