Committee considers bill to address tax consequences of Alliance v. Hennepin decision for low-income rental housing

House File 2257, introduced by Chair Gomez, responds to the Minnesota Supreme Court decision in Alliance Housing v. Hennepin County (2024) by clarifying how property-tax exemption applies to residential properties owned and operated by organizations of purely public charity.

Proponents — including county assessors — urged action to avoid shifting property-tax liability onto low-income tenants. Deputy Assessor Ben Thomas (St. Louis County) said the decision already led to the exemption of a $5.2 million apartment building in Duluth and additional petitions that could reach $200 million of property value in his county alone; he said assessors could not create individual personal-property accounts for tenants because exempt property owners refused to provide leases and tenant information. Hennepin County Assessor Josh Hoagland, speaking for the Minnesota Association of Assessing Officers, said the law as interpreted by the Department of Revenue’s memorandum would require personal-property accounts for tenants in exempt buildings, creating logistical and fairness problems. Hoagland said those personal-property accounts could lead to tax notices being sent to low-income tenants in units that had been managed by nonprofit housing providers.

The bill as drafted would preserve taxation of low-income rental housing property rather than treating the property as fully exempt when owned by charitable entities; it aims to codify a consistent statewide approach to prevent the unintended consequence of tenants receiving tax bills for their apartments. Committee members supported the sponsor’s effort to address the court decision and laid the bill over for possible inclusion in the 2025 omnibus tax bill.