1.1 A bill for an act
1.2 relating to taxation; property; authorizing cities to create land-value taxation
1.3 districts; proposing coding for new law in Minnesota Statutes, chapter 428A.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. [428A.30] DEFINITIONS.
1.6 Subdivision 1.Scope.For purposes of sections 428A.30 to 428A.34, the terms defined
1.7in this section have the meanings given them, unless the context indicates otherwise.
1.8 Subd. 2.City."City" means a statutory or home rule charter city.
1.9 Subd. 3.District."District" means a land-value taxation district established under section
1.10428A.31.
1.11 Subd. 4.Ordinance."Ordinance" means the ordinance establishing a land-value taxation
1.12district under section 428A.31.
1.13 EFFECTIVE DATE.This section is effective beginning with property taxes payable
1.14in 2026.
1.15 Sec. 2. [428A.31] ESTABLISHMENT OF LAND-VALUE TAXATION DISTRICT.
1.16 Subdivision 1.Ordinance.(a) The governing body of a city may adopt an ordinance
1.17establishing a land-value taxation district. The ordinance must describe:
1.18 (1) the parcels of property constituting the district, either by specific identification of
1.19each parcel, or by defining a geographic area or areas within the city, and then within that
1Sec. 2.
REVISOR MS/VJ 25-0171401/13/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 161
NINETY-FOURTH SESSION
Authored by Elkins, Gomez and Jones02/10/2025
The bill was read for the first time and referred to the Committee on Taxes 2.1area or those areas, identifying the specific types of property, as defined under section
2.2273.13, to be included in the district; and
2.3 (2) the procedure for reallocating the collective property tax of all parcels within the
2.4district.
2.5 (b) In addition, the ordinance must provide an evaluation of the economic effects of the
2.6district, including the impact on redevelopment of and investment in the district, within a
2.7specified period of time, but not less than 15 years after the date the district becomes
2.8effective.
2.9 Subd. 2.Hearing; notice.Before adopting an ordinance, the governing body of the city
2.10must hold a public hearing on the question. Notice of the hearing must include the time and
2.11place of the hearing, a description of the parcels to be included in the district, a description
2.12of the procedure for reallocating the tax burden among the parcels, and the duration of the
2.13district. Each person owning property in the proposed district must be given the opportunity
2.14to be heard at the hearing. The governing body must publish notice of the hearing on the
2.15city's website and in at least two issues of the official newspaper of the city. The two
2.16publications must be two weeks apart and the hearing must be held at least three days after
2.17the last publication. Not less than ten days before the hearing, the governing body must mail
2.18notice to the owner of each parcel proposed to be included in the district. For the purpose
2.19of the mailed notice, owners are those shown on the records of the county auditor. Other
2.20records may be used to supply the necessary information. At the public hearing, a person
2.21affected by the proposed district may testify on any issues relevant to the proposed district.
2.22The governing body may adjourn the hearing from time to time and may adopt the ordinance
2.23establishing the district at any time within six months after the date of the conclusion of the
2.24hearing by a vote of the majority of the governing body of the city. Within 30 days after
2.25adoption of the ordinance, the governing body shall send a copy of the ordinance to the
2.26commissioner of revenue.
2.27 EFFECTIVE DATE.This section is effective beginning with property taxes payable
2.28in 2026.
2.29 Sec. 3. [428A.32] RESTRICTIONS ON TAX REALLOCATION PROCEDURE.
2.30 A tax reallocation procedure under section 428A.31, subdivision 1, paragraph (a), clause
2.31(2), must distribute taxes on taxable properties in the district by applying uniform rates to
2.32one or more of the following tax bases:
2.33 (1) the net tax capacity, as defined under section 273.13, subdivision 21b;
2Sec. 3.
REVISOR MS/VJ 25-0171401/13/25 3.1 (2) the referendum market value, as defined under section 126C.01, subdivision 3;
3.2 (3) a tax base consisting of each property's estimated market value excluding the market
3.3value attributable to improvements; or
3.4 (4) a tax base consisting of each property's estimated market value excluding the market
3.5value attributable to improvements made after a date specified in the ordinance.
3.6 EFFECTIVE DATE.This section is effective beginning with property taxes payable
3.7in 2026.
3.8 Sec. 4. [428A.33] TAXATION WITHIN DISTRICT.
3.9 Subdivision 1.Initial taxation within district.For each property taxes payable year, a
3.10city must compile the total property taxes imposed upon all properties within the district
3.11for each taxing jurisdiction after final property tax statements are issued under section
3.12276.04. For the purposes of this section, the areawide taxes under chapters 276A and 473F,
3.13and the state general levy under section 275.025, are considered to be taxing jurisdictions.
3.14 Subd. 2.Final taxation within district.A city must allocate the tax, as determined
3.15under subdivision 1, among all properties in the district according to the terms of the
3.16ordinance so the entire amount of tax payable to each taxing jurisdiction under subdivision
3.171 is allocated among the properties constituting the district. The city must report the revised
3.18property tax amounts for each parcel of property to the county treasurer by April 30 of the
3.19year the tax is payable. The city must mail revised property tax statements to all properties
3.20within the district by April 30 of the year the tax is payable. Taxpayers must make payments
3.21according to the dates specified in section 279.01 as if the property tax statements were
3.22mailed 21 days prior to May 15 of the year the taxes are payable.
3.23 Subd. 3.Report to commissioner of revenue.By September 1 of each year, the county
3.24treasurer must report the initial and final distribution of the net tax for each parcel of property
3.25in the district to the commissioner of revenue on a form prescribed by the commissioner of
3.26revenue.
3.27 EFFECTIVE DATE.This section is effective beginning with property taxes payable
3.28in 2026.
3.29 Sec. 5. [428A.34] APPEAL OF LAND VALUE.
3.30 The owner of any property included in a land-value taxation district under section
3.31428A.31 may appeal the valuation attributable to land separately from the valuation
3Sec. 5.
REVISOR MS/VJ 25-0171401/13/25 4.1attributable to improvements upon the land under sections 274.01 and 274.13 or chapter
4.2271.
4.3 EFFECTIVE DATE.This section is effective beginning with property taxes payable
4.4in 2026.
4Sec. 5.
REVISOR MS/VJ 25-0171401/13/25