1.1 A bill for an act
1.2 relating to taxation; property; modifying provisions related to exemptions for
1.3 institutions of public charity; amending Minnesota Statutes 2024, section 272.02,
1.4 subdivision 7.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2024, section 272.02, subdivision 7, is amended to read:
1.7 Subd. 7.Institutions of public charity.(a) Institutions of purely public charity that are
1.8exempt from federal income taxation under section 501(c)(3) of the Internal Revenue Code
1.9are exempt if they meet the requirements of this subdivision. In determining whether real
1.10property is exempt under this subdivision, the following factors must be considered:
1.11 (1) whether the stated purpose of the undertaking is to be helpful to others without
1.12immediate expectation of material reward;
1.13 (2) whether the institution of public charity is supported by material donations, gifts, or
1.14government grants for services to the public in whole or in part;
1.15 (3) whether a material number of the recipients of the charity receive benefits or services
1.16at reduced or no cost, or whether the organization provides services to the public that alleviate
1.17burdens or responsibilities that would otherwise be borne by the government;
1.18 (4) whether the income received, including material gifts and donations, produces a
1.19profit to the charitable institution that is not distributed to private interests;
1.20 (5) whether the beneficiaries of the charity are restricted or unrestricted, and, if restricted,
1.21whether the class of persons to whom the charity is made available is one having a reasonable
1.22relationship to the charitable objectives; and
1Section 1.
25-04003 as introduced02/20/25 REVISOR MS/NS
SENATE
STATE OF MINNESOTA
S.F. No. 2915NINETY-FOURTH SESSION
(SENATE AUTHORS: REST)
OFFICIAL STATUSD-PGDATE
Introduction and first reading03/24/2025
Referred to Taxes 2.1 (6) whether dividends, in form or substance, or assets upon dissolution, are not available
2.2to private interests.
2.3 A charitable organization must satisfy the factors in clauses (1) to (6) for its property to
2.4be exempt under this subdivision, unless there is a reasonable justification for failing to
2.5meet the factors in clause (2), (3), or (5), and the organization provides to the assessor the
2.6factual basis for that justification. If there is reasonable justification for failing to meet the
2.7factors in clause (2), (3), or (5), an organization is a purely public charity under this
2.8subdivision without meeting those factors. After an exemption is properly granted under
2.9this subdivision, it will remain in effect unless there is a material change in facts.
2.10 (b) For purposes of this subdivision, a grant is a written instrument or electronic document
2.11defining a legal relationship between a granting agency and a grantee when the principal
2.12purpose of the relationship is to transfer cash or something of value to the grantee to support
2.13a public purpose authorized by law in a general manner instead of acquiring by professional
2.14or technical contract, purchase, lease, or barter property or services for the direct benefit or
2.15use of the granting agency.
2.16 (c) Rental housing property does not qualify for an exemption under this subdivision
2.17unless: (1) the use of the rental property is in furtherance of the tax-exempt charitable
2.18purpose of the organization; and (2) the use of the rental property does not further the
2.19tax-exempt charitable purpose of the organization solely by providing rental housing to
2.20persons or families on the basis of the income characteristics of those persons or families.
2.21 (c) (d) In determining whether rental housing property qualifies for exemption under
2.22this subdivision, the following are not gifts or donations to the owner of the rental housing:
2.23 (1) rent assistance provided by the government to or on behalf of tenants; and
2.24 (2) financing assistance or tax credits provided by the government to the owner on
2.25condition that specific units or a specific quantity of units be set aside for persons or families
2.26with certain income characteristics.
2.27 EFFECTIVE DATE.This section is effective for property taxes payable in 2025 and
2.28thereafter.
2Section 1.
25-04003 as introduced02/20/25 REVISOR MS/NS