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HF 2495

as introduced - 90th Legislature (2017 - 2018) Posted on 02/20/2018 01:52pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to property taxation; providing a school building bond agricultural property
tax credit; providing that school district bonded debt authorizations approved after
June 30, 2021, be levied against referendum market value; modifying the debt
service equalization aid program; appropriating money; amending Minnesota
Statutes 2016, sections 123A.44; 123A.441; 123A.442; 123A.443; 123A.446;
123B.53, subdivisions 1, 4, 5, 6, by adding subdivisions; 123B.55; 126C.01,
subdivision 3; 127A.45, subdivisions 10, 13; 273.1392; 273.1393; 275.065,
subdivision 3; 275.07, subdivision 2; 275.08, subdivision 1b; 275.61; 276.04,
subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 273.

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

ARTICLE 1

SCHOOL BUILDING BOND AGRICULTURAL CREDIT

Section 1.

Minnesota Statutes 2016, section 127A.45, subdivision 10, is amended to read:


Subd. 10.

Payments to school nonoperating funds.

Each fiscal year state general fund
payments for a district nonoperating fund must be made at the current year aid payment
percentage of the estimated entitlement during the fiscal year of the entitlement. This amount
shall be paid in deleted text begin12deleted text endnew text begin sixnew text end equal monthly installmentsnew text begin beginning in Julynew text end. The amount of the
actual entitlement, after adjustment for actual data, minus the payments made during the
fiscal year of the entitlement must be paid prior to October 31 of the following school year.
The commissioner may make advance payments of debt service equalization aid and
state-paid tax credits for a district's debt service fund earlier than would occur under the
preceding schedule if the district submits evidence showing a serious cash flow problem in
the fund. The commissioner may make earlier payments during the year and, if necessary,
increase the percent of the entitlement paid to reduce the cash flow problem.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with fiscal year 2019.
new text end

Sec. 2.

Minnesota Statutes 2016, section 127A.45, subdivision 13, is amended to read:


Subd. 13.

Aid payment percentage.

Except as provided in subdivisions new text begin10, new text end11, 12, 12a,
and 14, each fiscal year, all education aids and credits in this chapter and chapters 120A,
120B, 121A, 122A, 123A, 123B, 124D, 124E, 125A, 125B, 126C, 134, and section 273.1392,
shall be paid at the current year aid payment percentage of the estimated entitlement during
the fiscal year of the entitlement. For the purposes of this subdivision, a district's estimated
entitlement for special education aid under section 125A.76 for fiscal year 2014 and later
equals 97.4 percent of the district's entitlement for the current fiscal year. The final adjustment
payment, according to subdivision 9, must be the amount of the actual entitlement, after
adjustment for actual data, minus the payments made during the fiscal year of the entitlement.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with fiscal year 2019.
new text end

Sec. 3.

new text begin [273.1387] SCHOOL BUILDING BOND AGRICULTURAL CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Eligibility. new text end

new text begin All class 2a, 2b, and 2c property under section 273.13,
subdivision 23, other than property consisting of the house, garage, and immediately
surrounding one acre of land of an agricultural homestead, is eligible to receive the credit
under this section.
new text end

new text begin Subd. 2. new text end

new text begin Credit amount. new text end

new text begin For each qualifying property, the school building bond
agricultural credit is equal to 50 percent of the property's eligible net tax capacity multiplied
by the school debt tax rate determined under section 275.08, subdivision 1b.
new text end

new text begin Subd. 3. new text end

new text begin Credit reimbursements. new text end

new text begin The county auditor shall determine the tax reductions
allowed under this section within the county for each taxes payable year and shall certify
that amount to the commissioner of revenue as a part of the abstracts of tax lists submitted
under section 275.29. Any prior year adjustments shall also be certified on the abstracts of
tax lists. The commissioner shall review the certifications for accuracy and may make such
changes as are deemed necessary or return the certification to the county auditor for
correction. The credit under this section must be used to reduce the school district net tax
capacity-based property tax as provided in section 273.1393.
new text end

new text begin Subd. 4. new text end

new text begin Payment. new text end

new text begin The commissioner of revenue shall certify the total of the tax
reductions granted under this section for each taxes payable year within each school district
to the commissioner of education, who shall pay the reimbursement amounts to each school
district as provided in section 273.1392.
new text end

new text begin Subd. 5. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to make the payments required by this
section is annually appropriated from the general fund to the commissioner of education.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2018.
new text end

Sec. 4.

Minnesota Statutes 2016, section 273.1392, is amended to read:


273.1392 PAYMENT; SCHOOL DISTRICTS.

The amounts of bovine tuberculosis credit reimbursements under section 273.113;
conservation tax credits under section 273.119; disaster or emergency reimbursement under
sections 273.1231 to 273.1235; deleted text beginhomestead anddeleted text end agricultural credits under deleted text beginsectiondeleted text endnew text begin sectionsnew text end
273.1384new text begin and 273.1387new text end; aids and credits under section 273.1398; enterprise zone property
credit payments under section 469.171; and metropolitan agricultural preserve reduction
under section 473H.10 for school districts, shall be certified to the Department of Education
by the Department of Revenue. The amounts so certified shall be paid according to section
127A.45, subdivisions 9new text begin, 10,new text end and 13.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2018.
new text end

Sec. 5.

Minnesota Statutes 2016, section 273.1393, is amended to read:


273.1393 COMPUTATION OF NET PROPERTY TAXES.

Notwithstanding any other provisions to the contrary, "net" property taxes are determined
by subtracting the credits in the order listed from the gross tax:

(1) disaster credit as provided in sections 273.1231 to 273.1235;

(2) powerline credit as provided in section 273.42;

(3) agricultural preserves credit as provided in section 473H.10;

(4) enterprise zone credit as provided in section 469.171;

(5) disparity reduction credit;

(6) conservation tax credit as provided in section 273.119;

new text begin (7) the school bond credit as provided in section 273.1387;
new text end

deleted text begin (7)deleted text endnew text begin (8)new text end agricultural credit as provided in section 273.1384;

deleted text begin (8)deleted text endnew text begin (9)new text end taconite homestead credit as provided in section 273.135;

deleted text begin (9)deleted text endnew text begin (10)new text end supplemental homestead credit as provided in section 273.1391; and

deleted text begin (10)deleted text endnew text begin (11)new text end the bovine tuberculosis zone credit, as provided in section 273.113.

The combination of all property tax credits must not exceed the gross tax amount.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2018.
new text end

Sec. 6.

Minnesota Statutes 2016, section 275.065, subdivision 3, is amended to read:


Subd. 3.

Notice of proposed property taxes.

(a) The county auditor shall prepare and
the county treasurer shall deliver after November 10 and on or before November 24 each
year, by first class mail to each taxpayer at the address listed on the county's current year's
assessment roll, a notice of proposed property taxes. Upon written request by the taxpayer,
the treasurer may send the notice in electronic form or by electronic mail instead of on paper
or by ordinary mail.

(b) The commissioner of revenue shall prescribe the form of the notice.

(c) The notice must inform taxpayers that it contains the amount of property taxes each
taxing authority proposes to collect for taxes payable the following year. In the case of a
town, or in the case of the state general tax, the final tax amount will be its proposed tax.
The notice must clearly state for each city that has a population over 500, county, school
district, regional library authority established under section 134.201, and metropolitan taxing
districts as defined in paragraph (i), the time and place of a meeting for each taxing authority
in which the budget and levy will be discussed and public input allowed, prior to the final
budget and levy determination. The taxing authorities must provide the county auditor with
the information to be included in the notice on or before the time it certifies its proposed
levy under subdivision 1. The public must be allowed to speak at that meeting, which must
occur after November 24 and must not be held before 6:00 p.m. It must provide a telephone
number for the taxing authority that taxpayers may call if they have questions related to the
notice and an address where comments will be received by mail, except that no notice
required under this section shall be interpreted as requiring the printing of a personal
telephone number or address as the contact information for a taxing authority. If a taxing
authority does not maintain public offices where telephone calls can be received by the
authority, the authority may inform the county of the lack of a public telephone number and
the county shall not list a telephone number for that taxing authority.

(d) The notice must state for each parcel:

(1) the market value of the property as determined under section 273.11, and used for
computing property taxes payable in the following year and for taxes payable in the current
year as each appears in the records of the county assessor on November 1 of the current
year; and, in the case of residential property, whether the property is classified as homestead
or nonhomestead. The notice must clearly inform taxpayers of the years to which the market
values apply and that the values are final values;

(2) the items listed below, shown separately by county, city or town, and state general
tax, agricultural homestead credit under section 273.1384, new text beginschool building bond agricultural
credit under section 273.1387,
new text endvoter approved school levy, other local school levy, and the
sum of the special taxing districts, and as a total of all taxing authorities:

(i) the actual tax for taxes payable in the current year; and

(ii) the proposed tax amount.

If the county levy under clause (2) includes an amount for a lake improvement district
as defined under sections 103B.501 to 103B.581, the amount attributable for that purpose
must be separately stated from the remaining county levy amount.

In the case of a town or the state general tax, the final tax shall also be its proposed tax
unless the town changes its levy at a special town meeting under section 365.52. If a school
district has certified under section 126C.17, subdivision 9, that a referendum will be held
in the school district at the November general election, the county auditor must note next
to the school district's proposed amount that a referendum is pending and that, if approved
by the voters, the tax amount may be higher than shown on the notice. In the case of the
city of Minneapolis, the levy for Minneapolis Park and Recreation shall be listed separately
from the remaining amount of the city's levy. In the case of the city of St. Paul, the levy for
the St. Paul Library Agency must be listed separately from the remaining amount of the
city's levy. In the case of Ramsey County, any amount levied under section 134.07 may be
listed separately from the remaining amount of the county's levy. In the case of a parcel
where tax increment or the fiscal disparities areawide tax under chapter 276A or 473F
applies, the proposed tax levy on the captured value or the proposed tax levy on the tax
capacity subject to the areawide tax must each be stated separately and not included in the
sum of the special taxing districts; and

(3) the increase or decrease between the total taxes payable in the current year and the
total proposed taxes, expressed as a percentage.

For purposes of this section, the amount of the tax on homesteads qualifying under the
senior citizens' property tax deferral program under chapter 290B is the total amount of
property tax before subtraction of the deferred property tax amount.

(e) The notice must clearly state that the proposed or final taxes do not include the
following:

(1) special assessments;

(2) levies approved by the voters after the date the proposed taxes are certified, including
bond referenda and school district levy referenda;

(3) a levy limit increase approved by the voters by the first Tuesday after the first Monday
in November of the levy year as provided under section 275.73;

(4) amounts necessary to pay cleanup or other costs due to a natural disaster occurring
after the date the proposed taxes are certified;

(5) amounts necessary to pay tort judgments against the taxing authority that become
final after the date the proposed taxes are certified; and

(6) the contamination tax imposed on properties which received market value reductions
for contamination.

(f) Except as provided in subdivision 7, failure of the county auditor to prepare or the
county treasurer to deliver the notice as required in this section does not invalidate the
proposed or final tax levy or the taxes payable pursuant to the tax levy.

(g) If the notice the taxpayer receives under this section lists the property as
nonhomestead, and satisfactory documentation is provided to the county assessor by the
applicable deadline, and the property qualifies for the homestead classification in that
assessment year, the assessor shall reclassify the property to homestead for taxes payable
in the following year.

(h) In the case of class 4 residential property used as a residence for lease or rental
periods of 30 days or more, the taxpayer must either:

(1) mail or deliver a copy of the notice of proposed property taxes to each tenant, renter,
or lessee; or

(2) post a copy of the notice in a conspicuous place on the premises of the property.

The notice must be mailed or posted by the taxpayer by November 27 or within three
days of receipt of the notice, whichever is later. A taxpayer may notify the county treasurer
of the address of the taxpayer, agent, caretaker, or manager of the premises to which the
notice must be mailed in order to fulfill the requirements of this paragraph.

(i) For purposes of this subdivision and subdivision 6, "metropolitan special taxing
districts" means the following taxing districts in the seven-county metropolitan area that
levy a property tax for any of the specified purposes listed below:

(1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325, 473.446,
473.521, 473.547, or 473.834;

(2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672; and

(3) Metropolitan Mosquito Control Commission under section 473.711.

For purposes of this section, any levies made by the regional rail authorities in the county
of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 398A
shall be included with the appropriate county's levy.

(j) The governing body of a county, city, or school district may, with the consent of the
county board, include supplemental information with the statement of proposed property
taxes about the impact of state aid increases or decreases on property tax increases or
decreases and on the level of services provided in the affected jurisdiction. This supplemental
information may include information for the following year, the current year, and for as
many consecutive preceding years as deemed appropriate by the governing body of the
county, city, or school district. It may include only information regarding:

(1) the impact of inflation as measured by the implicit price deflator for state and local
government purchases;

(2) population growth and decline;

(3) state or federal government action; and

(4) other financial factors that affect the level of property taxation and local services
that the governing body of the county, city, or school district may deem appropriate to
include.

The information may be presented using tables, written narrative, and graphic
representations and may contain instruction toward further sources of information or
opportunity for comment.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2018.
new text end

Sec. 7.

Minnesota Statutes 2016, section 275.07, subdivision 2, is amended to read:


Subd. 2.

School district deleted text beginin more than one countydeleted text endnew text begin levies; special requirementsnew text end.

new text begin(a) new text endIn
school districts lying in more than one county, the clerk shall certify the tax levied to the
auditor of the county in which the administrative offices of the school district are located.

new text begin (b) The district must identify the portion of the school district levy that is levied for debt
service at the time the levy is certified under this section. For the purposes of this paragraph,
"levied for debt service" means levies authorized under sections 123B.53, 123B.535, and
123B.55, as adjusted by sections 126C.46 and 126C.48, net of any debt excess levy reductions
under section 475.61, subdivision 4, excluding debt service amounts necessary for repayment
of other postemployment benefits under section 475.52, subdivision 6.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2018.
new text end

Sec. 8.

Minnesota Statutes 2016, section 275.08, subdivision 1b, is amended to read:


Subd. 1b.

Computation of tax rates.

new text begin(a) new text endThe amounts certified to be levied against net
tax capacity under section 275.07 by an individual local government unit shall be divided
by the total net tax capacity of all taxable properties within the local government unit's
taxing jurisdiction. The resulting ratio, the local government's local tax rate, multiplied by
each property's net tax capacity shall be each property's net tax capacity tax for that local
government unit before reduction by any credits.

new text begin (b) The auditor must also determine the school debt tax rate for each school district equal
to (1) the school debt service levy certified under section 275.07, subdivision 2, divided by
(2) the total net tax capacity of all taxable property within the district.
new text end

new text begin (c) new text endAny amount certified to the county auditor to be levied against market value shall
be divided by the total referendum market value of all taxable properties within the taxing
district. The resulting ratio, the taxing district's new referendum tax rate, multiplied by each
property's referendum market value shall be each property's new referendum tax before
reduction by any credits. For the purposes of this subdivision, "referendum market value"
means the market value as defined in section 126C.01, subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2018.
new text end

Sec. 9.

Minnesota Statutes 2016, section 276.04, subdivision 2, is amended to read:


Subd. 2.

Contents of tax statements.

(a) The treasurer shall provide for the printing of
the tax statements. The commissioner of revenue shall prescribe the form of the property
tax statement and its contents. The tax statement must not state or imply that property tax
credits are paid by the state of Minnesota. The statement must contain a tabulated statement
of the dollar amount due to each taxing authority and the amount of the state tax from the
parcel of real property for which a particular tax statement is prepared. The dollar amounts
attributable to the county, the state tax, the voter approved school tax, the other local school
tax, the township or municipality, and the total of the metropolitan special taxing districts
as defined in section 275.065, subdivision 3, paragraph (i), must be separately stated. The
amounts due all other special taxing districts, if any, may be aggregated except that any
levies made by the regional rail authorities in the county of Anoka, Carver, Dakota, Hennepin,
Ramsey, Scott, or Washington under chapter 398A shall be listed on a separate line directly
under the appropriate county's levy. If the county levy under this paragraph includes an
amount for a lake improvement district as defined under sections 103B.501 to 103B.581,
the amount attributable for that purpose must be separately stated from the remaining county
levy amount. In the case of Ramsey County, if the county levy under this paragraph includes
an amount for public library service under section 134.07, the amount attributable for that
purpose may be separated from the remaining county levy amount. The amount of the tax
on homesteads qualifying under the senior citizens' property tax deferral program under
chapter 290B is the total amount of property tax before subtraction of the deferred property
tax amount. The amount of the tax on contamination value imposed under sections 270.91
to 270.98, if any, must also be separately stated. The dollar amounts, including the dollar
amount of any special assessments, may be rounded to the nearest even whole dollar. For
purposes of this section whole odd-numbered dollars may be adjusted to the next higher
even-numbered dollar. The amount of market value excluded under section 273.11,
subdivision 16
, if any, must also be listed on the tax statement.

(b) The property tax statements for manufactured homes and sectional structures taxed
as personal property shall contain the same information that is required on the tax statements
for real property.

(c) Real and personal property tax statements must contain the following information
in the order given in this paragraph. The information must contain the current year tax
information in the right column with the corresponding information for the previous year
in a column on the left:

(1) the property's estimated market value under section 273.11, subdivision 1;

(2) the property's homestead market value exclusion under section 273.13, subdivision
35;

(3) the property's taxable market value under section 272.03, subdivision 15;

(4) the property's gross tax, before credits;

(5) for deleted text beginhomesteaddeleted text end agricultural properties, the deleted text begincreditdeleted text endnew text begin creditsnew text end under deleted text beginsectiondeleted text endnew text begin sectionsnew text end
273.1384new text begin and 273.1387new text end;

(6) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135;
273.1391; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of credit
received under section 273.135 must be separately stated and identified as "taconite tax
relief"; and

(7) the net tax payable in the manner required in paragraph (a).

(d) If the county uses envelopes for mailing property tax statements and if the county
agrees, a taxing district may include a notice with the property tax statement notifying
taxpayers when the taxing district will begin its budget deliberations for the current year,
and encouraging taxpayers to attend the hearings. If the county allows notices to be included
in the envelope containing the property tax statement, and if more than one taxing district
relative to a given property decides to include a notice with the tax statement, the county
treasurer or auditor must coordinate the process and may combine the information on a
single announcement.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2018.
new text end

ARTICLE 2

SCHOOL DEBT LEVIES AFTER JUNE 30, 2021

Section 1.

Minnesota Statutes 2016, section 123A.44, is amended to read:


123A.44 CITATION.

Sections 123A.441 to 123A.446 may be cited as the "new text beginSmall Schools and new text endCooperative
Facilities Grant Act."

Sec. 2.

Minnesota Statutes 2016, section 123A.441, is amended to read:


123A.441 POLICY AND PURPOSE.

deleted text begin Because of the rates of decline in school-aged population, population shifts and economic
changes that the state has experienced in recent years and anticipates in future years, and
because in some instances local districts have not, and will
deleted text endnew text begin (a) The purpose of the Small
Schools and Cooperative Facilities Grant Act is to encourage and reward efficient use of
school facilities and provide state assistance to school districts that may
new text end not be able to
provide the required construction funds through local property taxesdeleted text begin, the purpose of the
cooperative facilities
deleted text endnew text begin. Thisnew text end grant program deleted text beginis to provide an incentive to encourage cooperation
in making available to all students those educational programs, services and facilities that
are most efficiently and effectively provided by a
deleted text endnew text begin supports facility needs for small isolated
school districts and
new text end cooperative deleted text begineffortdeleted text endnew text begin facility needsnew text end of school districts.

new text begin (b)new text end The policy and purpose of sections 123A.442 to 123A.446 is to usenew text begin state
appropriations and
new text end the credit of the state, to a limited degree, to provide grants to cooperating
groups of districtsnew text begin and isolated small school districtsnew text end to improve and expand the educational
opportunities and facilities available to their students.

Sec. 3.

Minnesota Statutes 2016, section 123A.442, is amended to read:


123A.442 APPROVAL AUTHORITY; APPLICATION FORMS.

Subdivision 1.

Approval by commissioner.

To the extent money is available, the
commissioner may approve projects from applications submitted under section 123A.443.
The grant money must be used only to acquire, construct, remodel or improve the building
or site of a cooperative facilitynew text begin or isolated small schoolnew text end under contracts to be entered into
within 15 months after the date on which each grant is awarded.

Subd. 2.

Cooperation and consolidation.

deleted text beginDistricts that havedeleted text endnew text begin A cooperating district that
has
new text end not already consolidated and deleted text beginreceivedeleted text endnew text begin receivesnew text end a cooperative facilities grant shall:

(1) submit a consolidation plan under section 123A.48 for approval by the Department
of Education; and

(2) hold a referendum on the question of consolidation no later than four years after a
grant is awarded under subdivision 1.

The districts are eligible for consolidation revenue under section 123A.485.

new text begin Subd. 2a. new text end

new text begin Isolated small school districts. new text end

new text begin An isolated small school district may submit
an application to the commissioner for a facilities grant. The application must:
new text end

new text begin (1) demonstrate to the commissioner's satisfaction that the small school is isolated; and
new text end

new text begin (2) document the tax base characteristics that prevent the district from funding the total
building costs through the debt service equalization aid program.
new text end

Subd. 3.

Consolidated districts.

A school district that has consolidated with another
school district since July 1, 1980, is eligible for a new text beginsmall schools and new text endcooperative facilities
grant.

Sec. 4.

Minnesota Statutes 2016, section 123A.443, is amended to read:


123A.443 GRANT APPLICATION PROCESS.

Subdivision 1.

Qualification.

Any group of districts or a consolidated district that meets
the criteria required under subdivision 2 new text beginor isolated small school under section 123A.442,
subdivision 2a,
new text endmay apply for an incentive grant for construction of a new facility or for
remodeling and improving an existing facility. A grant for new construction must not exceed
the lesser of $20,000,000, or 75 percent of the approved construction costs of deleted text begina cooperativedeleted text endnew text begin
the
new text end education facility. A grant for remodeling and improving an existing facility must not
exceed the lesser of $10,000,000, or 75 percent of the approved remodeling costs.

Subd. 2.

Review by commissioner.

(a) A deleted text begingroup of districts or a consolidateddeleted text endnew text begin qualifyingnew text end
districtnew text begin or group of districtsnew text end that submits an application for a grant must submit a proposal
to the commissioner for review and comment under section 123B.71. The commissioner
shall prepare a review and comment on the proposed facility by July 1 of an odd-numbered
year, regardless of the amount of the capital expenditure required to acquire, construct,
remodel or improve the facility. The commissioner shall not approve an application for an
incentive grant for any facility unless the facility receives a favorable review and comment
under section 123B.71 and the following criteria are met:

(1) the applicantnew text begin is an isolated small school ornew text end is a consolidated district or a minimum
of two or more districts that have entered into a joint powers agreement;

(2) for a group of districts, a joint powers board representing all participating districts
is established under section 471.59 to govern the cooperative facility;

(3) for a group of districts, no more than one superintendent is employed by the joint
powers board as a result of the cooperative facility agreement;

(4) a statement of need is submitted, that may include reasons why the current facilities
are inadequate, unsafe, or inaccessible to persons with disabilities;

(5) an educational plan is prepared, that includes input from both community and
professional staff;

(6) for a group of districts, a combined seniority list for all participating districts is
developed by the joint powers board;

(7) for a group of districts, an education program is developed that provides for more
learning opportunities and course offerings, including the offering of advanced placement
courses, for students than is currently available in any single member district;

(8) a plan is developed for providing instruction of any resident students in other districts
when distance to the education facility makes attendance at the facility unreasonably difficult
or impractical; and

(9) for a secondary facility, the joint powers board established under clause (2) discusses
with technical colleges located in the area how vocational education space in the cooperative
facility could be jointly used for secondary and postsecondary purposes.

(b) To the extent possible, the joint powers board is encouraged to provide for severance
pay or for early retirement incentives under section 122A.48, for any teacher or administrator,
as defined under section 122A.40, subdivision 1, who is placed on unrequested leave as a
result of the cooperative facility agreement.

(c) For the purpose of paragraph (a), clause (6), each district must be considered to have
started school each year on the same date.

(d) The districts may develop a plan that provides for the location of social service,
health, and other programs serving pupils and community residents within the cooperative
facility. The commissioner shall consider this plan when preparing a review and comment
on the proposed facility.

(e) The districts must schedule and conduct a meeting on library services. The school
districts, in cooperation with the regional public library system and its appropriate member
libraries, must discuss the possibility of including jointly operated library services at the
cooperative facility.

(f) The board of a district that has reorganized under section 123A.37 or 123A.48 and
that is applying for a grant for remodeling or improving an existing facility may act in the
place of a joint powers board to meet the criteria of this subdivision.

Subd. 3.

Reorganizing districts.

A district that is a member of a joint powers board
established under subdivision 2 and that is planning to reorganize under section 123A.45,
123A.46, or 123A.48 must notify the joint powers board one year in advance of the effective
date of the reorganization. Notwithstanding section 471.59 or any other law to the contrary,
the board of a district that reorganizes under section 123A.45, 123A.46, or 123A.48 may
appoint representatives to the joint powers board who will serve on the joint powers board
for two years after the effective date of the reorganization if authorized in the agreement
establishing the joint powers board to govern the cooperative facility. These representatives
shall have the same powers as representatives of any other school district under the joint
powers agreement.

Subd. 4.

District procedures.

A joint powers board of a district established under
subdivision 2 deleted text beginordeleted text endnew text begin,new text end a school board of a reorganized districtnew text begin, or the school board of an isolated
small school district
new text end that intends to apply for a grant must adopt a resolution stating the
proposed costs of the project, the purpose for which the costs are to be incurred, and an
estimate of the dates when the facilities for which the grant is requested will be contracted
for and completed. Applications for the state grants must be accompanied by deleted text begin(a)deleted text endnew text begin (1)new text end a copy
of the resolution, deleted text begin(b)deleted text endnew text begin (2)new text end a certificate by the clerk and treasurer of the joint powers board new text beginor
school board
new text endshowing the current outstanding indebtedness of each member district, and
deleted text begin (c)deleted text endnew text begin (3)new text end a certificate by the county auditor of each county in which a portion of the joint
powers district lies showing the information in the auditor's official records that is required
to be used in computing the debt limit of the district under section 475.53, subdivision 4.
The clerk's and treasurer's certificate must show, as to each outstanding bond issue of each
member districtnew text begin or isolated small school districtnew text end, the amount originally issued, the purpose
for which issued, the date of issue, the amount remaining unpaid as of the date of the
resolution, and the interest rates and due dates and amounts of principal thereon. Applications
and necessary data must be in the form prescribed by the commissioner. Applications must
be received by the commissioner by September 1 of an odd-numbered year. When an
application is received, the commissioner shall obtain from the commissioner of revenue,
and from the Public Utilities Commission when required, the information in their official
records that is required to be used in computing the debt limit of the joint powers district
under section 475.53, subdivision 4.

Subd. 5.

Award of grants.

new text begin(a) new text endBy November 1 of the odd-numbered year, the
commissioner shall examine and consider all applications for grants, and if any district is
found not qualified, the commissioner shall promptly notify that board.

new text begin (b) new text endA grant award is subject to verification by the district as specified in subdivision 8.
A grant award for a new facility must not be made until the site of the facility has been
determined. new text beginFor a group of cooperating school districts, new text enda grant award to remodel or improve
an existing facility must not be made until the new text begincooperating new text enddistricts have reorganized. If the
total amount of the approved applications exceeds the amount that is or can be made
available, the commissioner shall first award grants tonew text begin cooperating or consolidating schoolnew text end
districts that will close at least one existing school building, and then, to the extent funds
remain, allot the available amount equally between any other approved applicant districts.
The commissioner shall promptly certify to each qualified district the amount, if any, of the
grant awarded to it.

Subd. 6.

Collocation grant.

A group of districts that receives a grant for a new facility
under subdivision 4 is also eligible to receive an additional grant in the amount of $1,000,000.
To receive the additional grant, the group of districts must develop a plan under subdivision
2, paragraph (d), that provides for the location of a significant number of noneducational
student and community service programs within the cooperative facility.

Subd. 7.

Referendum; bond issue.

Within 180 days after being awarded a grant for a
new facility under subdivision 5, the joint powers boardnew text begin or board of the isolated small school
district
new text end must submit the question of authorizing the borrowing of funds for the facility to
the voters of the joint powers district new text beginor isolated small school district new text endat a special election,
which may be held in conjunction with the general election of the school board members
of the member districts. The question submitted must state the total amount of funding
needed from all sources. A majority of those voting in the affirmative on the question is
sufficient to authorize the joint powers boardnew text begin or school boardnew text end to accept the grant and to
issue the bonds on public sale according to chapter 475. The clerk of the joint powers board
new text begin or school district new text endmust certify the vote of the bond election to the commissioner. If the
question is approved by the voters, the commissioner shall notify the approved applicant
districts that the grant amount certified under subdivision 5 is available and appropriated
for payment under this subdivision. If a majority of those voting on the question do not vote
in the affirmative, the grant must be canceled.

Subd. 8.

Contract.

Each grant must be evidenced by a contract between the board and
the state acting through the commissioner. The contract obligates the state to pay to the
board an amount computed according to subdivision 5, and according to a schedule, and
terms and conditions acceptable to the commissioner of management and budget.

Subd. 9.

Consolidation.

A group of districts that operates a cooperative facility that was
acquired, constructed, remodeled, or improved under this section and implements
consolidation proceedings according to section 123A.48, may propose a temporary school
board structure in the petition or resolution required under section 123A.48, subdivision 2.
The districts may propose the number of existing school board members of each district to
become members of the board of the consolidated district and a method to gradually reduce
the membership to six or seven. The proposal must be approved, disapproved, or modified
by the commissioner. The election requirements of section 123A.48, subdivision 20, do not
apply to a proposal approved by the state board. Elections conducted after the effective date
of the consolidation are subject to the Minnesota Election Law.

Sec. 5.

Minnesota Statutes 2016, section 123A.446, is amended to read:


123A.446 deleted text beginSTATE BOND AUTHORIZATIONdeleted text endnew text begin SMALL SCHOOLS AND
COOPERATING FACILITIES GRANT FUNDS; ACCOUNT CREATED
new text end.

new text begin Subdivision 1. new text end

new text begin Fund created. new text end

new text begin A small schools and cooperating school district facilities
account is created in the special revenue fund. The state aid received under subdivision 2
and any state bond proceeds received under subdivision 3 must be deposited in this account.
new text end

new text begin Subd. 2. new text end

new text begin Annual replacement aid. new text end

new text begin Beginning in fiscal year 2020, $2,000,000 is annually
appropriated from the general fund to the small schools and cooperating school district
facilities account in the special revenue fund.
new text end

new text begin Subd. 3. new text end

new text begin State bond authorization. new text end

To provide money for the deleted text begincooperative secondary
facilities
deleted text end grant program, the commissioner of management and budgetdeleted text begin, upon the request of
the commissioner of education, shall issue and sell
deleted text endnew text begin shall deposit in the small schools and
cooperating school district facilities account the proceeds of any
new text end bonds deleted text beginofdeleted text endnew text begin issued and sold
by
new text end the state deleted text beginup to the amount of $14,000,000 in the manner, upon the terms and with the
effect prescribed by sections 16A.631 to 16A.675 and the Minnesota Constitution, article
XI, sections 4 to 7
deleted text endnew text begin specifically designated for that purposenew text end.

new text begin Subd. 4. new text end

new text begin Grants made; appropriation. new text end

new text begin On July 1 of each year, the balance in the small
schools and cooperating facilities grant account in the special revenue fund is appropriated
to the commissioner of education for small schools and cooperating school district facilities
grants. On June 30 of each year, any money appropriated under this section but not yet
distributed to a school district cancels to the small schools and cooperating facilities grant
account in the special revenue fund.
new text end

Sec. 6.

Minnesota Statutes 2016, section 123B.53, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

(a) For purposes of this section, the new text begintotal new text endeligible 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 debt service loans, capital loans, and lease purchase payments under section
126C.40, subdivision 2, excluding long-term facilities maintenance levies under section
123B.595, 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, excluding the portion of
taconite payments from the Iron Range school consolidation and cooperatively operated
school account under section 298.28, subdivision 7a;

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

(4) obligations under section 123B.62; and

(5) obligations equalized under section 123B.535.

(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 (e) For purposes of this section, the "net tax capacity eligible debt service revenue" of
a district is defined as the total eligible debt service revenue of a district excluding any
amount needed to meet the principal and interest payments obligations of the district for
projects approved after June 30, 2021.
new text end

new text begin (f) For purposes of this section, "referendum market value eligible debt service revenue"
is the difference between total eligible debt service revenue and net tax capacity eligible
debt service revenue.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2022.
new text end

Sec. 7.

Minnesota Statutes 2016, section 123B.53, subdivision 4, is amended to read:


Subd. 4.

new text beginNet tax capacity new text enddebt service equalization revenue.

(a) The new text beginnet tax capacity
new text end debt service equalization revenue of a district equals the sum of the first tier new text beginnet tax capacity
new text end debt service equalization revenue and the second tier new text beginnet tax capacity new text enddebt service
equalization revenue.

(b) The first tier new text beginnet tax capacity new text enddebt service equalization revenue of a district equals
the greater of zero or the eligible new text beginnet tax capacity new text enddebt service revenue minus the amount
raised by a levy of 15.74 percent times the adjusted net tax capacity of the district minus
the second tier new text beginnet tax capacity new text enddebt service equalization revenue of the district.

(c) The second tier new text beginnet tax capacity new text enddebt service equalization revenue of a district equals
the greater of zero or the eligible new text beginnet tax capacity new text enddebt service revenue, minus the amount
raised by a levy of 26.24 percent times the adjusted net tax capacity of the district.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2022.
new text end

Sec. 8.

Minnesota Statutes 2016, section 123B.53, subdivision 5, is amended to read:


Subd. 5.

Equalized new text beginnet tax capacity new text enddebt service levy.

(a) The equalized new text beginnet tax capacity
new text end debt service levy of a district equals the sum of the first tier equalized new text beginnet tax capacity new text enddebt
service levy and the second tier equalized new text beginnet tax capacity new text enddebt service levy.

(b) A district's first tier equalized new text beginnet tax capacity new text enddebt service levy equals the district's
first tier new text beginnet tax capacity new text enddebt service equalization revenue times the lesser of one or the
ratio of:

(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

(2) deleted text begin$3,400 in fiscal year 2016,deleted text end $4,430 in fiscal year 2017deleted text begin,deleted text end and the greater of $4,430 or
55.33 percent of the initial equalizing factor in fiscal year 2018 and later.

(c) A district's second tier equalized new text beginnet tax capacity new text enddebt service levy equals the district's
second tier new text beginnet tax capacity new text enddebt service equalization revenue times the lesser of one or the
ratio of:

(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

(2) $8,000 in fiscal years 2016 and 2017, and the greater of $8,000 or 100 percent of
the initial equalizing factor in fiscal year 2018 and later.

(d) For the purposes of this subdivision, the initial 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
all school districts in the state in the year before the year the levy is certified.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2022.
new text end

Sec. 9.

Minnesota Statutes 2016, section 123B.53, subdivision 6, is amended to read:


Subd. 6.

new text beginNet tax capacity new text enddebt service equalization aid.

(a) A district's new text beginnet tax capacity
new text end debt service equalization aid is the sum of the district's first tier new text beginnet tax capacity new text enddebt service
equalization aid and the district's second tier new text beginnet tax capacity new text enddebt service equalization aid.

(b) A district's first tier new text beginnet tax capacity new text enddebt service equalization aid equals the difference
between the district's first tier new text beginnet tax capacity new text enddebt service equalization revenue and the
district's first tier equalized new text beginnet tax capacity new text enddebt service levy.

(c) A district's second tier new text beginnet tax capacity new text enddebt service equalization aid equals the
difference between the district's second tier new text beginnet tax capacity new text enddebt service equalization revenue
and the district's second tier equalized new text beginnet tax capacity new text enddebt service levy.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2022.
new text end

Sec. 10.

Minnesota Statutes 2016, section 123B.53, is amended by adding a subdivision
to read:


new text begin Subd. 8. new text end

new text begin Initial referendum market value debt service equalization revenue. new text end

new text begin The
initial referendum market value debt service equalization revenue of a district equals the
greater of zero or the total eligible debt service revenue minus the amount raised by a levy
of 0.1574 percent times the referendum market value of the district.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2016.
new text end

Sec. 11.

Minnesota Statutes 2016, section 123B.53, is amended by adding a subdivision
to read:


new text begin Subd. 9. new text end

new text begin Equalized initial referendum market value debt service levy. new text end

new text begin The equalized
initial referendum market value debt service levy of a district equals the district's first tier
referendum market value 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 referendum market value 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 before the year the levy is certified; to
new text end

new text begin (2) $1,131,246.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2016.
new text end

Sec. 12.

Minnesota Statutes 2016, section 123B.53, is amended by adding a subdivision
to read:


new text begin Subd. 10. new text end

new text begin Initial referendum market value debt service equalization aid. new text end

new text begin A district's
initial referendum market value debt service equalization aid equals the difference between
the district's referendum market value debt service equalization revenue and the district's
equalized referendum market value debt service levy.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2022.
new text end

Sec. 13.

Minnesota Statutes 2016, section 123B.53, is amended by adding a subdivision
to read:


new text begin Subd. 11. new text end

new text begin Actual referendum market value aid. new text end

new text begin A district's actual referendum market
value debt service aid equals the district's initial referendum market value debt service aid
less its net tax capacity debt service equalization aid, provided that the aid may not be less
than zero or greater than (1) one minus the ratio specified in subdivision 9, times (2) the
district's market value debt service revenue.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2022.
new text end

Sec. 14.

Minnesota Statutes 2016, section 123B.55, is amended to read:


123B.55 DEBT SERVICE LEVY.

new text begin (a) new text endA district may levy the amounts necessary to make payments for bonds issued and
for interest on them, including the bonds and interest on them, issued as authorized by
Minnesota Statutes 1974, section 275.125, subdivision 3, clause (7)(C); and the amounts
necessary for repayment of debt service loans and capital loans, minus the amount of debt
service equalization revenue of the district.

new text begin (b) Levies under this section for bonds authorized before July 1, 2021, must be levied
against the net tax capacity of the district, as defined under section 273.13, subdivision 21b.
Levies under this section for bonds authorized after June 30, 2021, must be levied against
the referendum market value of the district, as defined under section 126C.01, subdivision
3.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2022.
new text end

Sec. 15.

Minnesota Statutes 2016, section 126C.01, subdivision 3, is amended to read:


Subd. 3.

Referendum market value.

"Referendum market value" means the market
value of all taxable property, excluding property classified as class 2deleted text begin,deleted text endnew text begin ornew text end 4c(4)deleted text begin, or 4c(12)deleted text end
under section 273.13. The portion of class 2a property consisting of the house, garage, and
surrounding one acre of land of an agricultural homestead is included in referendum market
value. For the purposes of this subdivision, in the case of class 1a, 1b, or 2a property, "market
value" means the value prior to the exclusion under section 273.13, subdivision 35. new text beginThe
referendum market value of class 4c(12) property under section 273.13 is equal to 0.25
times taxable market value. The referendum market value of class 3a property under section
273.13 that is not in the first tier of market value as defined in section 273.13, subdivision
24, is 1.25 times taxable market value.
new text endAny class of property, or any portion of a class of
property, that is included in the definition of referendum market value and that has a
classification rate of less than one percent under section 273.13 shall have a referendum
market value equal to its market value times its classification rate, multiplied by 100.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2022 and thereafter.
new text end

Sec. 16.

Minnesota Statutes 2016, section 275.61, is amended to read:


275.61 VOTER-APPROVED LEVY; MARKET VALUE.

Subdivision 1.

Market value.

(a) For local governmental subdivisions other than school
districts, any levy approved by the voters at a general or special election shall be levied
against the referendum market value of all taxable property within the governmental
subdivision, as defined in section 126C.01, subdivision 3. Any levy amount subject to the
requirements of this section shall be certified separately to the county auditor under section
275.07.

(b) The ballot shall state the maximum amount of the increased levy as a percentage of
market value and the amount that will be raised by the new referendum tax rate in the first
year it is to be levied.

(c) This subdivision does not apply to tax levies for the payment of debt obligations that
are approved by the voters after June 30, 2008new text begin, and before July 1, 2021new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021.
new text end