1.1                          A bill for an act 
  1.2             relating to property tax refunds; modifying the 
  1.3             schedule for homeowners and renters; changing 
  1.4             definitions; amending Minnesota Statutes 2002, 
  1.5             sections 290A.03, subdivisions 11, 13; 290A.04, 
  1.6             subdivisions 2, 2a, 4. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2002, section 290A.03, 
  1.9   subdivision 11, is amended to read: 
  1.10     Subd. 11.  [RENT CONSTITUTING PROPERTY TAXES.] "Rent 
  1.11  constituting property taxes" means ~~19~~ 15 percent of the gross 
  1.12  rent actually paid in cash, or its equivalent, or the portion of 
  1.13  rent paid in lieu of property taxes, in any calendar year by a 
  1.14  claimant for the right of occupancy of the claimant's Minnesota 
  1.15  homestead in the calendar year, and which rent constitutes the 
  1.16  basis, in the succeeding calendar year of a claim for relief 
  1.17  under this chapter by the claimant.  
  1.18     <b>[EFFECTIVE DATE.]</b> This section is effective for claims 
  1.19  based on rent paid in 2003 and thereafter. 
  1.20     Sec. 2.  Minnesota Statutes 2002, section 290A.03, 
  1.21  subdivision 13, is amended to read: 
  1.22     Subd. 13.  [PROPERTY TAXES PAYABLE.] "Property taxes 
  1.23  payable" means the property tax exclusive of special 
  1.24  assessments, penalties, and interest payable on a claimant's 
  1.25  homestead after deductions made under sections 273.135, 
  1.26  273.1384, 273.1391, 273.42, subdivision 2, and any other state 
  2.1   paid property tax credits in any calendar year, and after any 
  2.2   refund claimed and allowable under section 290A.04, subdivision 
  2.3   2h, that is first payable in the year that the property tax is 
  2.4   payable.  In the case of a claimant who makes ground lease 
  2.5   payments, "property taxes payable" includes the amount of the 
  2.6   payments directly attributable to the property taxes assessed 
  2.7   against the parcel on which the house is located.  No 
  2.8   apportionment or reduction of the "property taxes payable" shall 
  2.9   be required for the use of a portion of the claimant's homestead 
  2.10  for a business purpose if the claimant does not deduct any 
  2.11  business depreciation expenses for the use of a portion of the 
  2.12  homestead in the determination of federal adjusted gross 
  2.13  income.  For homesteads which are manufactured homes as defined 
  2.14  in section 273.125, subdivision 8, and for homesteads which are 
  2.15  park trailers taxed as manufactured homes under section 168.012, 
  2.16  subdivision 9, "property taxes payable" shall also include ~~19~~ 15 
  2.17  percent of the gross rent paid in the preceding year for the 
  2.18  site on which the homestead is located.  When a homestead is 
  2.19  owned by two or more persons as joint tenants or tenants in 
  2.20  common, such tenants shall determine between them which tenant 
  2.21  may claim the property taxes payable on the homestead.  If they 
  2.22  are unable to agree, the matter shall be referred to the 
  2.23  commissioner of revenue whose decision shall be final.  Property 
  2.24  taxes are considered payable in the year prescribed by law for 
  2.25  payment of the taxes. 
  2.26     In the case of a claim relating to "property taxes 
  2.27  payable," the claimant must have owned and occupied the 
  2.28  homestead on January 2 of the year in which the tax is payable 
  2.29  and (i) the property must have been classified as homestead 
  2.30  property pursuant to section 273.124, on or before December 15 
  2.31  of the assessment year to which the "property taxes payable" 
  2.32  relate; or (ii) the claimant must provide documentation from the 
  2.33  local assessor that application for homestead classification has 
  2.34  been made on or before December 15 of the year in which the 
  2.35  "property taxes payable" were payable and that the assessor has 
  2.36  approved the application. 
  3.1      <b>[EFFECTIVE DATE.]</b> This section is effective beginning with 
  3.2   refunds based on property taxes payable in 2004 and thereafter, 
  3.3   and for claims based on rent paid in 2003 and thereafter. 
  3.4      Sec. 3.  Minnesota Statutes 2002, section 290A.04, 
  3.5   subdivision 2, is amended to read: 
  3.6      Subd. 2.  [HOMEOWNERS.] A claimant whose property taxes 
  3.7   payable are in excess of the percentage of the household income 
  3.8   stated below shall pay an amount equal to the percent of income 
  3.9   shown for the appropriate household income level along with the 
  3.10  percent to be paid by the claimant of the remaining amount of 
  3.11  property taxes payable.  The state refund equals the amount of 
  3.12  property taxes payable that remain, up to the state refund 
  3.13  amount shown below.  
  3.14                        Percent           Percent    Maximum
  3.15  Household Income     of Income          Paid by     State
  3.16                                          Claimant    Refund
  3.17  ~~$~~     ~~0 to  1,189~~    ~~1.0 percent~~        ~~15 percent~~   ~~$1,450~~
  3.18    ~~1,190 to  2,379~~    ~~1.1 percent~~        ~~15 percent~~   ~~$1,450~~
  3.19    ~~2,380 to  3,589~~    ~~1.2 percent~~        ~~15 percent~~   ~~$1,410~~
  3.20    ~~3,590 to  4,789~~    ~~1.3 percent~~        ~~20 percent~~   ~~$1,410~~
  3.21    ~~4,790 to  5,979~~    ~~1.4 percent~~        ~~20 percent~~   ~~$1,360~~
  3.22    ~~5,980 to  8,369~~    ~~1.5 percent~~        ~~20 percent~~   ~~$1,360~~
  3.23    ~~8,370 to  9,559~~    ~~1.6 percent~~        ~~25 percent~~   ~~$1,310~~
  3.24    ~~9,560 to 10,759~~    ~~1.7 percent~~        ~~25 percent~~   ~~$1,310~~
  3.25   ~~10,760 to 11,949~~    ~~1.8 percent~~        ~~25 percent~~   ~~$1,260~~
  3.26   ~~11,950 to 13,139~~    ~~1.9 percent~~        ~~30 percent~~   ~~$1,260~~
  3.27   ~~13,140 to 14,349~~    ~~2.0 percent~~        ~~30 percent~~   ~~$1,210~~
  3.28   ~~14,350 to 16,739~~    ~~2.1 percent~~        ~~30 percent~~   ~~$1,210~~
  3.29   ~~16,740 to 17,929~~    ~~2.2 percent~~        ~~35 percent~~   ~~$1,160~~
  3.30   ~~17,930 to 19,119~~    ~~2.3 percent~~        ~~35 percent~~   ~~$1,160~~
  3.31   ~~19,120 to 20,319~~    ~~2.4 percent~~        ~~35 percent~~   ~~$1,110~~
  3.32   ~~20,320 to 25,099~~    ~~2.5 percent~~        ~~40 percent~~   ~~$1,110~~
  3.33   ~~25,100 to 28,679~~    ~~2.6 percent~~        ~~40 percent~~   ~~$1,070~~
  3.34   ~~28,680 to 35,849~~    ~~2.7 percent~~        ~~40 percent~~   ~~$1,070~~
  3.35   ~~35,850 to 41,819~~    ~~2.8 percent~~        ~~45 percent~~   ~~$  970~~
  3.36   ~~41,820 to 47,799~~    ~~3.0 percent~~        ~~45 percent~~   ~~$  970~~
  3.37   ~~47,800 to 53,779~~    ~~3.2 percent~~        ~~45 percent~~   ~~$  870~~
  3.38   ~~53,780 to 59,749~~    ~~3.5 percent~~        ~~50 percent~~   ~~$  780~~
  3.39   ~~59,750 to 65,729~~    ~~4.0 percent~~        ~~50 percent~~   ~~$  680~~
  3.40   ~~65,730 to 69,319~~    ~~4.0 percent~~        ~~50 percent~~   ~~$  580~~
  3.41   ~~69,320 to 71,719~~    ~~4.0 percent~~        ~~50 percent~~   ~~$  480~~
  3.42   ~~71,720 to 74,619~~    ~~4.0 percent~~        ~~50 percent~~   ~~$  390~~
  3.43   ~~74,620 to 77,519~~    ~~4.0 percent~~        ~~50 percent~~   ~~$  290~~
  3.44  $     0 to  1,279    1.0 percent        15 percent   $1,560
  3.45    1,280 to  2,559    1.1 percent        15 percent   $1,560
  3.46    2,560 to  3,859    1.2 percent        15 percent   $1,510
  3.47    3,860 to  5,149    1.3 percent        20 percent   $1,510
  3.48    5,150 to  6,419    1.4 percent        20 percent   $1,460
  3.49    6,420 to  8,989    1.5 percent        20 percent   $1,460
  3.50    8,990 to 10,269    1.6 percent        25 percent   $1,410
  3.51   10,270 to 11,559    1.7 percent        25 percent   $1,350
  3.52   11,560 to 12,839    1.8 percent        25 percent   $1,350
  3.53   12,840 to 14,119    1.9 percent        30 percent   $1,350
  3.54   14,120 to 15,419    2.0 percent        30 percent   $1,300
  3.55   15,420 to 17,979    2.1 percent        30 percent   $1,300
  3.56   17,980 to 19,249    2.2 percent        35 percent   $1,250
  3.57   19,250 to 20,539    2.3 percent        35 percent   $1,250
  3.58   20,540 to 21,829    2.4 percent        40 percent   $1,150
  4.1    21,830 to 26,949    2.5 percent        45 percent   $  930
  4.2    26,950 to 30,809    2.6 percent        45 percent   $  730
  4.3    30,810 to 38,509    2.7 percent        45 percent   $  620
  4.4    38,510 to 44,919    2.8 percent        50 percent   $  520
  4.5    44,920 to 51,349    3.0 percent        50 percent   $  310
  4.6      The payment made to a claimant shall be the amount of the 
  4.7   state refund calculated under this subdivision.  No payment is 
  4.8   allowed if the claimant's household income is ~~$77,520~~ $51,350 or 
  4.9   more. 
  4.10     <b>[EFFECTIVE DATE.]</b> This section is effective beginning with 
  4.11  refunds based on property taxes payable in 2004 and thereafter. 
  4.12     Sec. 4.  Minnesota Statutes 2002, section 290A.04, 
  4.13  subdivision 2a, is amended to read: 
  4.14     Subd. 2a.  [RENTERS.] A claimant whose rent constituting 
  4.15  property taxes exceeds the percentage of the household income 
  4.16  stated below must pay an amount equal to the percent of income 
  4.17  shown for the appropriate household income level along with the 
  4.18  percent to be paid by the claimant of the remaining amount of 
  4.19  rent constituting property taxes.  The state refund equals the 
  4.20  amount of rent constituting property taxes that remain, up to 
  4.21  the maximum state refund amount shown below.  
  4.22                        Percent           Percent      Maximum
  4.23  Household Income     of Income          Paid by        State
  4.24                                          Claimant      Refund
  4.25  ~~$~~     ~~0 to  3,589~~    ~~1.0 percent~~       ~~5 percent~~      ~~$1,190~~
  4.26    ~~3,590 to  4,779~~    ~~1.0 percent~~      ~~10 percent~~      ~~$1,190~~
  4.27    ~~4,780 to  5,969~~    ~~1.1 percent~~      ~~10 percent~~      ~~$1,190~~
  4.28    ~~5,970 to  8,369~~    ~~1.2 percent~~      ~~10 percent~~      ~~$1,190~~
  4.29    ~~8,370 to 10,759~~    ~~1.3 percent~~      ~~15 percent~~      ~~$1,190~~
  4.30   ~~10,760 to 11,949~~    ~~1.4 percent~~      ~~15 percent~~      ~~$1,190~~
  4.31   ~~11,950 to 13,139~~    ~~1.4 percent~~      ~~20 percent~~      ~~$1,190~~
  4.32   ~~13,140 to 15,539~~    ~~1.5 percent~~      ~~20 percent~~      ~~$1,190~~
  4.33   ~~15,540 to 16,729~~    ~~1.6 percent~~      ~~20 percent~~      ~~$1,190~~
  4.34   ~~16,730 to 17,919~~    ~~1.7 percent~~      ~~25 percent~~      ~~$1,190~~
  4.35   ~~17,920 to 20,319~~    ~~1.8 percent~~      ~~25 percent~~      ~~$1,190~~
  4.36   ~~20,320 to 21,509~~    ~~1.9 percent~~      ~~30 percent~~      ~~$1,190~~
  4.37   ~~21,510 to 22,699~~    ~~2.0 percent~~      ~~30 percent~~      ~~$1,190~~
  4.38   ~~22,700 to 23,899~~    ~~2.2 percent~~      ~~30 percent~~      ~~$1,190~~
  4.39   ~~23,900 to 25,089~~    ~~2.4 percent~~      ~~30 percent~~      ~~$1,190~~
  4.40   ~~25,090 to 26,289~~    ~~2.6 percent~~      ~~35 percent~~      ~~$1,190~~
  4.41   ~~26,290 to 27,489~~    ~~2.7 percent~~      ~~35 percent~~      ~~$1,190~~
  4.42   ~~27,490 to 28,679~~    ~~2.8 percent~~      ~~35 percent~~      ~~$1,190~~
  4.43   ~~28,680 to 29,869~~    ~~2.9 percent~~      ~~40 percent~~      ~~$1,190~~
  4.44   ~~29,870 to 31,079~~    ~~3.0 percent~~      ~~40 percent~~      ~~$1,190~~
  4.45   ~~31,080 to 32,269~~    ~~3.1 percent~~      ~~40 percent~~      ~~$1,190~~
  4.46   ~~32,270 to 33,459~~    ~~3.2 percent~~      ~~40 percent~~      ~~$1,190~~
  4.47   ~~33,460 to 34,649~~    ~~3.3 percent~~      ~~45 percent~~      ~~$1,080~~
  4.48   ~~34,650 to 35,849~~    ~~3.4 percent~~      ~~45 percent~~      ~~$  960~~
  4.49   ~~35,850 to 37,049~~    ~~3.5 percent~~      ~~45 percent~~      ~~$  830~~
  4.50   ~~37,050 to 38,239~~    ~~3.5 percent~~      ~~50 percent~~      ~~$  720~~
  4.51   ~~38,240 to 39,439~~    ~~3.5 percent~~      ~~50 percent~~      ~~$  600~~
  4.52   ~~39,440 to 40,629~~    ~~3.5 percent~~      ~~50 percent~~      ~~$  360~~
  4.53   ~~40,630 to 41,819~~    ~~3.5 percent~~      ~~50 percent~~      ~~$  120~~
  4.54  $     0 to  3,859    1.0 percent       5 percent      $1,280
  5.1     3,860 to  5,129    1.0 percent      10 percent      $1,280
  5.2     5,130 to  6,409    1.1 percent      10 percent      $1,280
  5.3     6,410 to  8,989    1.2 percent      10 percent      $1,280
  5.4     8,990 to 11,559    1.3 percent      15 percent      $1,280
  5.5    11,560 to 12,839    1.4 percent      15 percent      $1,280
  5.6    12,840 to 14,119    1.4 percent      20 percent      $1,280
  5.7    14,120 to 16,689    1.5 percent      20 percent      $1,280
  5.8    16,690 to 17,969    1.6 percent      20 percent      $1,280
  5.9    17,970 to 19,249    1.7 percent      25 percent      $1,280
  5.10   19,250 to 21,829    1.8 percent      25 percent      $1,280
  5.11   21,830 to 23,109    1.9 percent      35 percent      $1,280
  5.12   23,110 to 24,379    2.0 percent      35 percent      $1,280
  5.13   24,380 to 25,669    2.2 percent      35 percent      $1,280
  5.14   25,670 to 26,949    2.4 percent      35 percent      $1,280
  5.15   26,950 to 28,239    2.6 percent      40 percent      $1,280
  5.16   28,240 to 29,529    2.7 percent      40 percent      $1,280
  5.17   29,530 to 30,809    2.8 percent      40 percent      $1,280
  5.18   30,810 to 32,089    2.9 percent      45 percent      $1,160
  5.19   32,090 to 33,389    3.0 percent      45 percent      $1,030
  5.20   33,390 to 34,669    3.1 percent      45 percent      $  890
  5.21   34,670 to 35,939    3.2 percent      45 percent      $  770
  5.22   35,940 to 37,219    3.3 percent      50 percent      $  650
  5.23   37,220 to 38,509    3.4 percent      50 percent      $  390
  5.24   38,510 to 39,799    3.5 percent      50 percent      $  130
  5.25     The payment made to a claimant is the amount of the state 
  5.26  refund calculated under this subdivision.  No payment is allowed 
  5.27  if the claimant's household income is ~~$41,820~~ $39,800 or more. 
  5.28     <b>[EFFECTIVE DATE.]</b> This section is effective for claims 
  5.29  based on rent paid in 2003 and thereafter. 
  5.30     Sec. 5.  Minnesota Statutes 2002, section 290A.04, 
  5.31  subdivision 4, is amended to read: 
  5.32     Subd. 4.  [INFLATION ADJUSTMENT.] Beginning for property 
  5.33  tax refunds payable in calendar year ~~2002~~ 2005, the commissioner 
  5.34  shall annually adjust the dollar amounts of the income 
  5.35  thresholds and the maximum refunds under subdivisions 2 and 2a 
  5.36  for inflation.  The commissioner shall make the inflation 
  5.37  adjustments in accordance with section 1(f) of the Internal 
  5.38  Revenue Code, except that for purposes of this subdivision the 
  5.39  percentage increase shall be determined from the year ending on 
  5.40  June 30, ~~2000~~ 2003, to the year ending on June 30 of the year 
  5.41  preceding that in which the refund is payable.  The commissioner 
  5.42  shall use the appropriate percentage increase to annually adjust 
  5.43  the income thresholds and maximum refunds under subdivisions 2 
  5.44  and 2a for inflation without regard to whether or not the income 
  5.45  tax brackets are adjusted for inflation in that year.  The 
  5.46  commissioner shall round the thresholds and the maximum amounts, 
  5.47  as adjusted to the nearest $10 amount.  If the amount ends in 
  6.1   $5, the commissioner shall round it up to the next $10 amount.  
  6.2      The commissioner shall annually announce the adjusted 
  6.3   refund schedule at the same time provided under section 290.06.  
  6.4   The determination of the commissioner under this subdivision is 
  6.5   not a rule under the Administrative Procedure Act. 
  6.6      <b>[EFFECTIVE DATE.]</b> This section is effective for refunds 
  6.7   based on property taxes payable in 2005 and thereafter, and for 
  6.8   refunds based on rent paid in 2004 and thereafter.