Purpose

• Establish a property tax task force to study and propose ways to reduce property taxes on homestead properties and to present legislative options for property tax relief, including at least one option that would have minimal impact on the general fund.

Key definitions

• Homestead property: a residential homestead classified as 1a under Minnesota Statutes section 273.13 subdivision 22, plus the portion of class 2 property under 273.13 subdivision 23 that includes the house, garage, and immediately surrounding one acre of land.

Scope and goals

• The task force will investigate how to lower homestead property taxes and will consider options for legislation to provide relief to homestead properties.
• It must assess options with attention to potential minimal general fund impact.

Main provisions and topics the task force will review

• Effectiveness of the homestead market value exclusion in lowering homestead property taxes, both relative to nonhomestead residential property and over time (comparing 2025 to 2011 results).
• Whether changing property tax classification rates would be a better tool for reducing homestead property taxes than the market value exclusion.
• How property tax classification rates compare across property types and whether some classifications could be consolidated to reduce homestead taxes.
• Trends in how much of the property tax burden is paid by homestead properties from 2015 to 2025.
• Trends in the share of state vs local property taxes paid by commercial, industrial, or public utility property from 2015 to 2025.
• How tax burdens for noncommercial seasonal residential, recreational, nonhomestead residential, and homestead properties compare in different areas of the state, and how they were taxed in 2015 vs. 2025.

Membership and composition

• The task force will include 11 members:
  • Two state representatives (one appointed by each of the cochairs of the House Taxes Committee).
  • Two state senators (one appointed by the chair of the Senate Taxes Committee and one by the ranking minority member).
  • The commissioner of revenue or a designee.
  • Two people appointed by the Association of Minnesota Counties.
  • Two people appointed by the League of Minnesota Cities.
  • One person appointed by the Minnesota Association of Townships.
  • One person appointed by the Minnesota Association of Assessing Officers.

Duties and operating rules

• The task force must provide advisory recommendations to the legislature based on its work.
• The commissioner of revenue or a designee will chair the initial meeting; the task force will elect a chair at that meeting.
• Meetings are to be held as needed (at the chair’s call) and must be open to the public with at least seven days’ notice.
• Members serve without compensation; the commissioner of revenue provides administrative support.
• Certain statutory meeting rules (13D) do not apply to this task force.

Reporting and expiration

• The task force must submit a final report with its advisory recommendations and any other relevant information to the chairs and ranking minority members of the property tax committees by February 1, 2027.
• The task force expires when it submits its report.

Significance

• This bill creates a new, time-limited body to study and propose changes to homestead property tax relief and related policies. It does not immediately change tax law but lays out a path for potential legislation, including options that could have minimal impact on the general fund.

Timeline

• Report due by February 1, 2027.
• Expiration occurs upon submission of the report.

Administrative and transparency elements

• Meetings must be open to the public; notice requirements apply.
• Administrative support provided by the Commissioner of Revenue.

Relevant Terms - property tax task force - homestead - homestead market value exclusion - classification rates - Class 1a (homestead) and Class 2 property - house and garage and one acre - Commissioner of Revenue - Association of Minnesota Counties - League of Minnesota Cities - Minnesota Association of Townships - Minnesota Association of Assessing Officers - open meetings - report due February 1, 2027 - minimal general fund impact - tax relief options for homesteads