Editor’s note: Information provided by Minnesota House of Representatives Public Information Services.
For 15 years, Hennepin and Ramsey counties imposed a mortgage registry tax and deed tax with proceeds going to help reclaim contaminated sites. Their ability to collect the taxes expired last year, and the counties were before the House Taxes Committee Wednesday seeking to have it reinstated.
These taxes are paid by people as part of closing costs when they purchase or change property ownership.
The rate is .0001 percent of the value of the property transaction; this amounts to $30 on a $150,000 sale, Loeffler said.
The funds are used by the counties to clean up soil that was contaminated, most likely in the 1900s, and make it ready for redevelopment.
“We have provided 288 grants totaling over $41 million. We are trying to get some of these pieces of property back into production. … We think that’s a good investment in our community,” said Hennepin County Commissioner Peter McLaughlin. “It is a one-time tax, at the time of a transaction. It seems like a reasonable point to capture a small amount of revenue to help bolster the property values.”
Several committee members balked at the tax as a way of funding the cleanup. Rep. Jenifer Loon (R-Eden Prairie) thinks the cost shouldn’t be borne solely by those purchasing property. She suggested creation of a method to capture taxes from the added value created by the reclamation.
Rep. Sarah Anderson (R-Plymouth) represents several Hennepin County communities where, she says, most of the revenue most likely comes from, while Minneapolis uses most of the money.
“We invest the money where the dirt is dirty,” McLaughlin countered. He said the whole county benefits because the development that occurs reduces property taxes across the county.
The bill was amended to address its effective date and referred to the House Property and Local Tax Division. Its companion, SF13, is sponsored by Sen. Kari Dziedzic (DFL-Mpls). It awaits action by the Senate Taxes Committee.