A bill for an act
relating to taxation; property; modifying the market value exclusion for veterans
with a disability; amending Minnesota Statutes 2022, section 273.13, subdivision
34.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2022, section 273.13, subdivision 34, is amended to read:


Subd. 34.

Homestead of veteran with a disability or family caregiver.

(a) All or a
portion of the market value of property owned by a veteran and serving as the veteran's
homestead under this section is excluded in determining the property's taxable market value
if the veteran has a service-connected disability of deleted text begin70deleted text endnew text begin 50new text end percent or more as certified by the
United States Department of Veterans Affairs. To qualify for exclusion under this subdivision,
the veteran must have been honorably discharged from the United States armed forces, as
indicated by United States Government Form DD214 or other official military discharge
papers.

(b)(1) For a disability rating of 70 percent or more, deleted text begin$150,000deleted text endnew text begin the amountnew text end of market value
deleted text begin isdeleted text end excludednew text begin is 1.4 times the exclusion base amountnew text end, except as provided in deleted text beginclausedeleted text endnew text begin clausesnew text end (2)new text begin
and (3)
new text end; deleted text beginand
deleted text end

(2) for a total (100 percent) and permanent disability, deleted text begin$300,000deleted text endnew text begin the amountnew text end of market
value deleted text beginisdeleted text end excludednew text begin is two times the exclusion base amount; and
new text end

new text begin (3) for a disability rating of at least 50 percent and less than 70 percent, the amount of
market value excluded is the base amount
new text end.

new text begin For the purposes of this paragraph, the exclusion base amount for assessment year 2023 is
$200,000. For assessment year 2024 and thereafter, the exclusion base amount is adjusted
annually by multiplying the exclusion base amount for the prior year by the sum of one plus
the rate of increase, if any, in the implicit price deflator for government consumption
expenditures and gross investment for state and local governments prepared by the Bureau
of Economic Analysts of the United States Department of Commerce for the 12-month
period ending March 31 of the prior assessment year.
new text end

(c) If a veteran with a disability qualifying for a valuation exclusion under paragraph
(b), clause (2), predeceases the veteran's spouse, and if upon the death of the veteran the
spouse holds the legal or beneficial title to the homestead and permanently resides there,
the exclusion shall carry over to the benefit of the veteran's spouse until such time as the
spouse remarries, or sells, transfers, or otherwise disposes of the property, except as otherwise
provided in paragraph (n). Qualification under this paragraph requires an application under
paragraph (h), and a spouse must notify the assessor if there is a change in the spouse's
marital status, ownership of the property, or use of the property as a permanent residence.

(d) If the spouse of a member of any branch or unit of the United States armed forces
who dies due to a service-connected cause while serving honorably in active service, as
indicated on United States Government Form DD1300 or DD2064, holds the legal or
beneficial title to a homestead and permanently resides there, the spouse is entitled to the
benefit described in paragraph (b), clause (2), until such time as the spouse remarries or
sells, transfers, or otherwise disposes of the property, except as otherwise provided in
paragraph (n).

(e) If a veteran meets the disability criteria of paragraph (a) but does not own property
classified as homestead in the state of Minnesota, then the homestead of the veteran's primary
family caregiver, if any, is eligible for the exclusion that the veteran would otherwise qualify
for under paragraph (b).

(f) In the case of an agricultural homestead, only the portion of the property consisting
of the house and garage and immediately surrounding one acre of land qualifies for the
valuation exclusion under this subdivision.

(g) A property qualifying for a valuation exclusion under this subdivision is not eligible
for the market value exclusion under subdivision 35, or classification under subdivision 22,
paragraph (b).

(h) To qualify for a valuation exclusion under this subdivision a property owner must
apply to the assessor by December 31 of the first assessment year for which the exclusion
is sought. Except as provided in paragraph (c), the owner of a property that has been accepted
for a valuation exclusion must notify the assessor if there is a change in ownership of the
property or in the use of the property as a homestead.

(i) A first-time application by a qualifying spouse for the market value exclusion under
paragraph (d) must be made any time within two years of the death of the service member.

(j) For purposes of this subdivision:

(1) "active service" has the meaning given in section 190.05;

(2) "own" means that the person's name is present as an owner on the property deed;

(3) "primary family caregiver" means a person who is approved by the secretary of the
United States Department of Veterans Affairs for assistance as the primary provider of
personal care services for an eligible veteran under the Program of Comprehensive Assistance
for Family Caregivers, codified as United States Code, title 38, section 1720G; and

(4) "veteran" has the meaning given the term in section 197.447.

(k) If a veteran dying after December 31, 2011, did not apply for or receive the exclusion
under paragraph (b), clause (2), before dying, the veteran's spouse is entitled to the benefit
under paragraph (b), clause (2), until the spouse remarries or sells, transfers, or otherwise
disposes of the property, except as otherwise provided in paragraph (n), if:

(1) the spouse files a first-time application within two years of the death of the service
member or by June 1, 2019, whichever is later;

(2) upon the death of the veteran, the spouse holds the legal or beneficial title to the
homestead and permanently resides there;

(3) the veteran met the honorable discharge requirements of paragraph (a); and

(4) the United States Department of Veterans Affairs certifies that:

(i) the veteran met the total (100 percent) and permanent disability requirement under
paragraph (b), clause (2); or

(ii) the spouse has been awarded dependency and indemnity compensation.

(l) The purpose of this provision of law providing a level of homestead property tax
relief for veterans with a disability, their primary family caregivers, and their surviving
spouses is to help ease the burdens of war for those among our state's citizens who bear
those burdens most heavily.

(m) By July 1, the county veterans service officer must certify the disability rating and
permanent address of each veteran receiving the benefit under paragraph (b) to the assessor.

(n) A spouse who received the benefit in paragraph (c), (d), or (k) but no longer holds
the legal or beneficial title to the property may continue to receive the exclusion for a
property other than the property for which the exclusion was initially granted until the spouse
remarries or sells, transfers, or otherwise disposes of the property, provided that:

(1) the spouse applies under paragraph (h) for the continuation of the exclusion allowed
under this paragraph;

(2) the spouse holds the legal or beneficial title to the property for which the continuation
of the exclusion is sought under this paragraph, and permanently resides there;

(3) the estimated market value of the property for which the exclusion is sought under
this paragraph is less than or equal to the estimated market value of the property that first
received the exclusion, based on the value of each property on the date of the sale of the
property that first received the exclusion; and

(4) the spouse has not previously received the benefit under this paragraph for a property
other than the property for which the exclusion is sought.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2023 and thereafter.
new text end

Statutes affected:
Introduction: 273.13