This bill proposes amendments to Minnesota Statutes 2024, section 272.02, subdivision 7, which governs property tax exemptions for institutions of purely public charity.

Key Changes & Amendments:

1. Criteria for Exemption:

   • Institutions must meet the following factors to qualify for property tax exemption:
     
     1. Their purpose is to assist others without expecting immediate material gain.
        
     2. They receive material donations, gifts, or government grants.
        
     3. They serve a significant number of people at low or no cost, or they alleviate government burdens.
        
     4. They do not generate profits for private interests.
        
     5. They serve an unrestricted group, or if restricted, the group must reasonably align with the charity's objective.
        
     6. They do not distribute dividends or assets to private interests upon dissolution.
        

2. Justified Exceptions:

   • An institution may still qualify for exemption even if it does not meet the requirements related to receiving donations and grants (Clause 2), providing services for free or reduced cost (Clause 3), or serving an unrestricted class of people (Clause 5), as long as it provides a reasonable justification for not meeting them.

3. Exempt Status Continuity:

   • Once an institution is granted tax-exempt status, it remains exempt unless there is a material change in facts affecting its qualifications.

4. Definition of a Grant:

   • The bill defines a grant as a written or electronic agreement transferring funds from a government agency to a grantee to support a public purpose.

5. Rental Housing Property Exemption Restrictions:

   • Rental housing does not qualify for tax exemption unless:
     
     1. It serves the tax-exempt charitable purpose of the institution.
        
     2. It does more than just provide housing based on income criteria.
        

6. Exclusions for Rental Housing Assistance:

   • Government rental assistance or tax credits given to the owner of the rental property to provide low-income housing are not considered donations or gifts that would qualify the property for exemption.

Impact of the Bill:

• It clarifies and expands criteria for institutions seeking property tax exemptions.
  
• It allows certain exceptions where institutions can still qualify for tax exemption even if they fail to meet some of the criteria, provided they justify their circumstances.
  
• It tightens restrictions around rental housing tax exemptions, ensuring that providing housing solely based on income does not qualify for exemption.
  

Conclusion:

This bill refines Minnesota's property tax exemption rules for charities by making criteria more flexible in some cases while restricting exemptions for certain rental properties.