HF 2698

as introduced - 88th Legislature (2013 - 2014) Posted on 03/04/2014 09:36am

A bill for an act
relating to education finance; providing debt service equalization for debt
incurred as the result of a natural disaster; amending Minnesota Statutes 2012,
section 127A.49, subdivisions 2, 3; Minnesota Statutes 2013 Supplement,
sections 123B.53, subdivision 1; 123B.54; proposing coding for new law in
Minnesota Statutes, chapter 123B.

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

Section 1.

Minnesota Statutes 2013 Supplement, section 123B.53, subdivision 1, is
amended to read:

Subdivision 1.

Definitions.

(a) For purposes of this section, the eligible debt service
revenue of a district is defined as follows:

(1) the amount needed to produce between five and six percent in excess of the
amount needed to meet when due the principal and interest payments on the obligations
of the district for eligible projects according to subdivision 2, including the amounts
necessary for repayment of energy loans according to section 216C.37 or sections 298.292
to 298.298, debt service loans and capital loans, lease purchase payments under section
126C.40, subdivision 2, alternative facilities levies under section 123B.59, subdivision
5, paragraph (a), minus

(2) the amount of debt service excess levy reduction for that school year calculated
according to the procedure established by the commissioner.

(b) The obligations in this paragraph are excluded from eligible debt service revenue:

(1) obligations under section 123B.61;

(2) the part of debt service principal and interest paid from the taconite environmental
protection fund or Douglas J. Johnson economic protection trust;

(3) obligations issued under Laws 1991, chapter 265, article 5, section 18, as
amended by Laws 1992, chapter 499, article 5, section 24; deleted text begin and
deleted text end

(4) obligations under section 123B.62 deleted text begin . deleted text end new text begin ; and
new text end

new text begin (5) obligations equalized under section 123B.535.
new text end

(c) For purposes of this section, if a preexisting school district reorganized under
sections 123A.35 to 123A.43, 123A.46, and 123A.48 is solely responsible for retirement
of the preexisting district's bonded indebtedness, capital loans or debt service loans, debt
service equalization aid must be computed separately for each of the preexisting districts.

(d) For purposes of this section, the adjusted net tax capacity determined according
to sections 127A.48 and 273.1325 shall be adjusted to include the tax capacity of property
generally exempted from ad valorem taxes under section 272.02, subdivision 64.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2016
and later.
new text end

Sec. 2.

new text begin [123B.535] NATURAL DISASTER DEBT SERVICE EQUALIZATION.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the eligible natural
disaster debt service revenue of a district is defined as the amount needed to produce
between five and six percent in excess of the amount needed to meet when due the
principal and interest payments on the obligations of the district repayment of repair and
replacement costs under the following conditions:
new text end

new text begin (1) the district was impacted by a natural disaster event or area occurring January
1, 2005, or later, as declared by the President of the United States of America, which is
eligible for Federal Emergency Management Agency payments;
new text end

new text begin (2) the natural disaster caused $500,000 or more in damages to school district
buildings; and
new text end

new text begin (3) the repair and replacement costs are not covered by insurance payments or
Federal Emergency Management Agency payments.
new text end

new text begin (b) For purposes of this section, the adjusted net tax capacity equalizing factor
equals the quotient derived by dividing the total adjusted net tax capacity of all school
districts in the state for the year before the year the levy is certified by the total number of
adjusted pupil units in the state for the current school year.
new text end

new text begin (c) For purposes of this section, the adjusted net tax capacity determined according
to sections 127A.48 and 273.1325 shall be adjusted to include the tax capacity of property
generally exempted from ad valorem taxes under section 272.02, subdivision 64.
new text end

new text begin Subd. 2. new text end

new text begin Notification. new text end

new text begin A district eligible for natural disaster debt service
equalization revenue under subdivision 1 must notify the commissioner of the amount of
its intended natural disaster debt service revenue calculated under subdivision 1 for all
bonds sold prior to the notification by July 1 of the calendar year the levy is certified.
new text end

new text begin Subd. 3. new text end

new text begin Natural disaster debt service equalization revenue. new text end

new text begin The debt service
equalization revenue of a district equals the greater of zero or the eligible debt service
revenue, minus the greater of zero or the difference between:
new text end

new text begin (1) the amount raised by a levy of ten percent times the adjusted net tax capacity
of the district; and
new text end

new text begin (2) the district's eligible debt service revenue under section 123B.53.
new text end

new text begin Subd. 4. new text end

new text begin Equalized natural disaster debt service levy. new text end

new text begin A district's equalized
natural disaster debt service levy equals the district's natural disaster debt service
equalization revenue times the lesser of one or the ratio of:
new text end

new text begin (1) the quotient derived by dividing the adjusted net tax capacity of the district for
the year before the year the levy is certified by the adjusted pupil units in the district for
the school year ending in the year prior to the year the levy is certified; to
new text end

new text begin (2) 300 percent of the statewide adjusted net tax capacity equalizing factor.
new text end

new text begin Subd. 5. new text end

new text begin Natural disaster debt service equalization aid. new text end

new text begin A district's natural
disaster debt service equalization aid equals the difference between the district's natural
disaster debt service equalization revenue and the district's equalized natural disaster
debt service levy.
new text end

new text begin Subd. 6. new text end

new text begin Natural disaster debt service equalization aid payment schedule. new text end

new text begin Debt
service equalization aid must be paid according to section 127A.45, subdivision 10.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for levies certified for taxable year
2015 and revenue for fiscal year 2016 and later.
new text end

Sec. 3.

Minnesota Statutes 2013 Supplement, section 123B.54, is amended to read:

123B.54 DEBT SERVICE APPROPRIATION.

(a) The amount necessary to make debt service equalization aid payments under
deleted text begin section deleted text end new text begin sections new text end 123B.53 new text begin and 123B.535 new text end is annually appropriated from the general fund to
the commissioner of education.

(b) The appropriations in paragraph (a) must be reduced by the amount of any
money specifically appropriated for the same purpose in any year from any state fund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2016
and later.
new text end

Sec. 4.

Minnesota Statutes 2012, section 127A.49, subdivision 2, is amended to read:

Subd. 2.

Abatements.

Whenever by virtue of chapter 278, sections 270C.86,
375.192, or otherwise, the net tax capacity or referendum market value of any district for
any taxable year is changed after the taxes for that year have been spread by the county
auditor and the local tax rate as determined by the county auditor based upon the original
net tax capacity is applied upon the changed net tax capacities, the county auditor shall,
prior to February 1 of each year, certify to the commissioner of education the amount of
any resulting net revenue loss that accrued to the district during the preceding year. Each
year, the commissioner shall pay an abatement adjustment to the district in an amount
calculated according to the provisions of this subdivision. This amount shall be deducted
from the amount of the levy authorized by section 126C.46. The amount of the abatement
adjustment must be the product of:

(1) the net revenue loss as certified by the county auditor, times

(2) the ratio of:

(i) the sum of the amounts of the district's certified levy in the third preceding year
according to the following:

(A) section 123B.57, if the district received health and safety aid according to that
section for the second preceding year;

(B) section 124D.20, if the district received aid for community education programs
according to that section for the second preceding year;

(C) section 124D.135, subdivision 3, if the district received early childhood family
education aid according to section 124D.135 for the second preceding year;

(D) section 126C.17, subdivision 6, if the district received referendum equalization
aid according to that section for the second preceding year;

(E) section 126C.10, subdivision 13a, if the district received operating capital aid
according to section 126C.10, subdivision 13b, in the second preceding year;

(F) section 126C.10, subdivision 29, if the district received equity aid according to
section 126C.10, subdivision 30, in the second preceding year;

(G) section 126C.10, subdivision 32, if the district received transition aid according
to section 126C.10, subdivision 33, in the second preceding year;

(H) section 123B.53, subdivision 5, if the district received debt service equalization
aid according to section 123B.53, subdivision 6, in the second preceding year;

new text begin (I) section 123B.535, subdivision 4, if the district received natural disaster debt
service equalization aid according to section 123B.535, subdivision 5, in the second
preceding year;
new text end

deleted text begin (I) deleted text end new text begin (J) new text end section 124D.22, subdivision 3, if the district received school-age care aid
according to section 124D.22, subdivision 4, in the second preceding year;

deleted text begin (J) deleted text end new text begin (K) new text end section 123B.591, subdivision 3, if the district received deferred maintenance
aid according to section 123B.591, subdivision 4, in the second preceding year; and

deleted text begin (K) deleted text end new text begin (L) new text end section 126C.10, subdivision 35, if the district received alternative teacher
compensation equalization aid according to section 126C.10, subdivision 36, paragraph
(a), in the second preceding year; to

(ii) the total amount of the district's certified levy in the third preceding December,
plus or minus auditor's adjustments.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2016
and later.
new text end

Sec. 5.

Minnesota Statutes 2012, section 127A.49, subdivision 3, is amended to read:

Subd. 3.

Excess tax increment.

(a) If a return of excess tax increment is made to a
district pursuant to sections 469.176, subdivision 2, and 469.177, subdivision 9, or upon
decertification of a tax increment district, the school district's aid and levy limitations
must be adjusted for the fiscal year in which the excess tax increment is paid under the
provisions of this subdivision.

(b) An amount must be subtracted from the district's aid for the current fiscal year
equal to the product of:

(1) the amount of the payment of excess tax increment to the district, times

(2) the ratio of:

(i) the sum of the amounts of the district's certified levy for the fiscal year in which
the excess tax increment is paid according to the following:

(A) section 123B.57, if the district received health and safety aid according to that
section for the second preceding year;

(B) section 124D.20, if the district received aid for community education programs
according to that section for the second preceding year;

(C) section 124D.135, subdivision 3, if the district received early childhood family
education aid according to section 124D.135 for the second preceding year;

(D) section 126C.17, subdivision 6, if the district received referendum equalization
aid according to that section for the second preceding year;

(E) section 126C.10, subdivision 13a, if the district received operating capital aid
according to section 126C.10, subdivision 13b, in the second preceding year;

(F) section 126C.10, subdivision 29, if the district received equity aid according to
section 126C.10, subdivision 30, in the second preceding year;

(G) section 126C.10, subdivision 32, if the district received transition aid according
to section 126C.10, subdivision 33, in the second preceding year;

(H) section 123B.53, subdivision 5, if the district received debt service equalization
aid according to section 123B.53, subdivision 6, in the second preceding year;

new text begin (I) section 123B.535, subdivision 4, if the district received natural disaster debt
service equalization aid according to section 123B.535, subdivision 5, in the second
preceding year;
new text end

deleted text begin (I) deleted text end new text begin (J) new text end section 124D.22, subdivision 3, if the district received school-age care aid
according to section 124D.22, subdivision 4, in the second preceding year;

deleted text begin (J) deleted text end new text begin (K) new text end section 123B.591, subdivision 3, if the district received deferred maintenance
aid according to section 123B.591, subdivision 4, in the second preceding year; and

deleted text begin (K) deleted text end new text begin (L) new text end section 126C.10, subdivision 35, if the district received alternative teacher
compensation equalization aid according to section 126C.10, subdivision 36, paragraph
(a), in the second preceding year; to

(ii) the total amount of the district's certified levy for the fiscal year, plus or minus
auditor's adjustments.

(c) An amount must be subtracted from the school district's levy limitation for the
next levy certified equal to the difference between:

(1) the amount of the distribution of excess increment; and

(2) the amount subtracted from aid pursuant to clause (a).

If the aid and levy reductions required by this subdivision cannot be made to the aid
for the fiscal year specified or to the levy specified, the reductions must be made from
aid for subsequent fiscal years, and from subsequent levies. The school district must use
the payment of excess tax increment to replace the aid and levy revenue reduced under
this subdivision.

(d) This subdivision applies only to the total amount of excess increments received
by a district for a calendar year that exceeds $25,000.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2016
and later.
new text end