House Finance and Taxation committee advances bill to create legacy property-tax relief fund, amend homestead and income-tax credits

During a House Finance and Taxation Committee meeting, members voted to advance House Bill 11-76 as amended and refer it to the Appropriations Committee.

The bill, as amended, creates a legacy property tax relief fund, moves $225,000,000 into that fund, adjusts the homestead tax credit and the primary residence (PRC) credit, adds new rules for levy caps and opt-outs for cities and counties, and includes a small income-tax change that shifts the bottom bracket upward (from about $45,000 to roughly $53,000). Committee members also approved a later amendment that restored certain homestead-credit thresholds that had been struck in the amendment package.

Representative Steiner offered an initial amendment to substitute a 60% homestead tax credit (derived from Representative Koppelman’s 70% concept but reduced to match available funds). Steiner said she had reduced 70% to 60% “to get closer to the actual money that we have in November,” and that she preferred 70% but had chosen 60% because of fiscal uncertainty. Chairman Hedlund opposed that insertion, saying the committee had not yet voted on Representative Koppelman’s underlying bill and that leadership and the governor’s office had worked on a collaborative alternative. The committee defeated Steiner’s amendment on a roll-call vote, 2-12 (yes: Representative Nehring, Representative Steiner; no: Chairman Hedlund, Vice Chair Haggart, Representative Anderson, Representative Doctor, Representative Dressler, Representative Greenheck, Representative Machtenbacher, Representative Olson, Representative Porter, Representative Toman, Representative Foss, Representative Ista).

After rejecting that proposal, the committee considered an amendment package labeled 004 that the chair walked through. Key elements of amendment 004 described in committee discussion included: - Moving $225,000,000 into a newly established Legacy Property Tax Relief Fund (identified in the amendment as section 6) to provide tax relief now and as a potential ongoing program. - Removing the bill’s prior “intent” language so future legislatures would not be automatically bound without available funds. - Reducing the primary residence credit in the bill from $1,550 to $1,450 (section 10) and removing a subsection addressing voter-approved levies so that voter-approved levy amounts would not be penalized. - Setting an August 31 deadline for a required budget-hearing notice. - Modifying the levy-cap language to allow voter approval for opt-outs only at statewide, primary or general elections (or by special election with a 60% threshold) and to permit a 10-year opt-out for cities and counties that choose it; exempting emergency levies from the cap; and allowing townships below their statutory 18-mill authority to be treated differently under the cap. - Allowing a one-year transition for certain levies (such as animal-shelter levies referenced as 57-15-42 and some fire department capital levies) to be folded into general funds before the cap applies. - Adding a small income-tax reduction by raising the bottom bracket from roughly $45,000 to about $53,000.

The amendment packet also updated fiscal estimates and appropriations in the bill’s language. Committee discussion described the updated numbers as: $74,000,000 of new appropriation from the general fund, $473,000,000 to be provided from the property tax relief fund (from legacy fund earnings), and a separate roughly $5,000,000 adjustment to cover an increase in the homestead tax-credit line that is outside the tax commissioner’s current budget. Representative Porter moved amendment 004; Representative Olsen seconded. The committee approved the amendment on a roll-call vote (motion carried; roll-call recorded a majority yes vote with two no votes reported).

Representative Hager later moved a further amendment to restore certain homestead-credit overstrikes and threshold amounts (reverting specific dollar amounts and expanding eligibility ranges). Representative Anderson seconded that motion; the committee approved the restoration amendment on a roll-call vote.

Finally, Representative Porter moved that House Bill 11-76 be given a do-pass recommendation as amended and referred to the Appropriations Committee; Representative Olson seconded. The committee recorded a roll-call vote and approved the do-pass recommendation as amended by a 12-2 margin.

Committee members’ discussion emphasized different priorities: Representative Steiner favored a larger homestead credit (she said she preferred 70%), while other members and leadership sought a package that paired property-tax relief with a modest income-tax adjustment and structural changes to levy caps. Several members raised practical implementation concerns, including the application process for credits (Representative Steiner asked whether an application requirement remained; the committee confirmed an application process would continue) and election costs tied to allowing opt-outs by vote.

Votes at a glance - Motion to amend with 60% homestead credit (Representative Steiner): moved by Representative Steiner; seconded by Representative Toman; defeated, 2-12 (yes: Nehring, Steiner). - Amendment 004 (legacy fund, PRC change to $1,450, levy-cap/opt-out rules, income-tax bracket adjustment, updated appropriations): moved by Representative Porter; seconded by Representative Olsen; motion carried (roll call recorded; two no votes noted). - Hager amendment (restore homestead-credit thresholds and amounts): moved by Representative Hager; seconded by Representative Anderson; motion carried (roll call recorded). - Final motion: do pass as amended to Appropriations (House Bill 11-76): moved by Representative Porter; seconded by Representative Olson; carried by roll call, 12-2.

The committee asked who would carry the bill; Representative Haggart volunteered. Chairman Hedlund adjourned the meeting.