Bill > HF161

This bill authorizes Minnesota cities to establish land-value taxation districts, which is a novel approach to property taxation that differentiates between land value and improvements. Under this legislation, a city can create a district through a formal ordinance process that requires public hearings and detailed notification to property owners. The bill defines a land-value taxation district as an area where property taxes are reallocated using specific methods, such as calculating taxes based on land value alone, excluding the value of buildings or improvements. Cities must evaluate the economic impacts of such a district over at least 15 years and can choose from several tax calculation methods, including using net tax capacity, referendum market value, or a tax base that excludes improvement values. Property owners within these districts will have the right to separately appeal land valuations, and cities must carefully report and distribute tax amounts to various taxing jurisdictions. The goal appears to be encouraging urban development by potentially reducing tax burdens on building improvements while maintaining consistent overall tax revenue. The provisions of this bill would become effective for property taxes payable in 2026, giving cities time to prepare and implement these new taxation districts.

Budget and Finance

https://www.revisor.mn.gov/bills/bill.php?b=House&f=HF0161&ssn=0&y=2025