HF 1643

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; providing that increases in 
  1.3             property tax levies over those payable in 1997 be 
  1.4             levied against referendum market value; providing for 
  1.5             targeted property tax refunds for residential and farm 
  1.6             homesteads; providing for local government aids; 
  1.7             abolishing limited market value; amending Minnesota 
  1.8             Statutes 1996, sections 124.2131, subdivision 1; 
  1.9             124A.03, subdivision 1g; 124A.0311, subdivision 1; 
  1.10            124A.23, subdivisions 1 and 2; 273.032; 273.11, 
  1.11            subdivision 5; 273.121; 276.04, subdivision 2; 
  1.12            290A.04, subdivision 2h; 477A.011, subdivision 34, and 
  1.13            by adding subdivisions; 477A.013, subdivisions 8 and 
  1.14            9; and 477A.03, subdivision 2; proposing coding for 
  1.15            new law in Minnesota Statutes, chapters 124; and 275; 
  1.16            repealing Minnesota Statutes 1996, sections 124A.0311, 
  1.17            subdivisions 2, 3, and 4; 273.11, subdivision 1a; and 
  1.18            477A.011, subdivisions 35, 36, and 37. 
  1.19  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.20     Section 1.  Minnesota Statutes 1996, section 124.2131, 
  1.21  subdivision 1, is amended to read: 
  1.22     Subdivision 1.  [ADJUSTED NET TAX CAPACITY.] (a) 
  1.23  [COMPUTATION.] The department of revenue shall annually conduct 
  1.24  an assessment/sales ratio study of the taxable property in each 
  1.25  school district in accordance with the procedures in paragraphs 
  1.26  (b) and (c).  Based upon the results of this assessment/sales 
  1.27  ratio study, the department of revenue shall determine an 
  1.28  aggregate equalized net tax capacity for the various classes of 
  1.29  taxable property in each school district, which tax capacity 
  1.30  shall be designated as the adjusted net tax capacity.  The 
  1.31  department shall also, based upon the results of the 
  1.32  assessment/sales ratio study, determine the equalized referendum 
  2.1   market value for each school district which shall be designated 
  2.2   as the adjusted referendum market value.  The adjusted net tax 
  2.3   capacities shall be determined using the net tax capacity 
  2.4   percentages in effect for the assessment year following the 
  2.5   assessment year of the study.  The department of revenue shall 
  2.6   make whatever estimates are necessary to account for changes in 
  2.7   the classification system.  The department of revenue may incur 
  2.8   the expense necessary to make the determinations.  The 
  2.9   commissioner of revenue may reimburse any county or governmental 
  2.10  official for requested services performed in ascertaining the 
  2.11  adjusted net tax capacity.  On or before March 15 annually, the 
  2.12  department of revenue shall file with the chair of the tax 
  2.13  committee of the house of representatives and the chair of the 
  2.14  committee on taxes and tax laws of the senate a report of 
  2.15  adjusted net tax capacities.  On or before June 15 annually, the 
  2.16  department of revenue shall file its final report on the 
  2.17  adjusted net tax capacities established by the previous year's 
  2.18  assessments and the current year's net tax capacity percentages 
  2.19  with the commissioner of children, families, and learning and 
  2.20  each county auditor for those school districts for which the 
  2.21  auditor has the responsibility for determination of local tax 
  2.22  rates.  A copy of the report so filed shall be mailed to the 
  2.23  clerk of each district involved and to the county assessor or 
  2.24  supervisor of assessments of the county or counties in which 
  2.25  each district is located. 
  2.26     (b)  [METHODOLOGY.] In making its annual assessment/sales 
  2.27  ratio studies, the department of revenue shall use a methodology 
  2.28  consistent with the most recent Standard on Assessment Ratio 
  2.29  Studies published by the assessment standards committee of the 
  2.30  International Association of Assessing Officers.  The 
  2.31  commissioner of revenue shall supplement this general 
  2.32  methodology with specific procedures necessary for execution of 
  2.33  the study in accordance with other Minnesota laws impacting the 
  2.34  assessment/sales ratio study.  The commissioner shall document 
  2.35  these specific procedures in writing and shall publish the 
  2.36  procedures in the State Register, but these procedures will not 
  3.1   be considered "rules" pursuant to the Minnesota administrative 
  3.2   procedure act.  For purposes of this section, sections 270.12, 
  3.3   subdivision 2, clause (8), and 278.05, subdivision 4, the 
  3.4   commissioner of revenue shall exclude from the assessment/sales 
  3.5   ratio study the sale of any nonagricultural property which does 
  3.6   not contain an improvement, if (1) the statutory basis on which 
  3.7   the property's taxable value as most recently assessed is less 
  3.8   than market value as defined in section 273.11, or (2) the 
  3.9   property has undergone significant physical change or a change 
  3.10  of use since the most recent assessment.  
  3.11     (c)  [AGRICULTURAL LANDS.] For purposes of determining the 
  3.12  adjusted net tax capacity of agricultural lands for the 
  3.13  calculation of adjusted net tax capacities, the market value of 
  3.14  agricultural lands shall be the price for which the property 
  3.15  would sell in an arms length transaction. 
  3.16     (d)  [FORCED SALES.] The commissioner may include forced 
  3.17  sales in the assessment/sales ratio studies if it is determined 
  3.18  by the commissioner that these forced sales indicate true market 
  3.19  value. 
  3.20     (e)  [STIPULATED VALUES AND ABATEMENTS.] The estimated 
  3.21  market value to be used in calculating sales ratios shall be the 
  3.22  value established by the assessor before any stipulations 
  3.23  resulting from appeals by property owners and before any 
  3.24  abatement unless the abatement was granted for the purpose of 
  3.25  correcting mere clerical errors. 
  3.26     (f)  [SALES OF INDUSTRIAL PROPERTY.] Separate sales ratios 
  3.27  shall be calculated for commercial property and for industrial 
  3.28  property.  These two classes shall be combined only in 
  3.29  jurisdictions in which there is not an adequate sample of sales 
  3.30  in each class. 
  3.31     Sec. 2.  [124.917] [SCHOOL DISTRICT LEVIES.] 
  3.32     Subdivision 1.  [CATEGORICAL PROGRAM LEVY.] "Categorical 
  3.33  program levy" means a district's total levy less the sum of the 
  3.34  district's basic general education program levy under section 
  3.35  124A.23, subdivision 2, debt service levy under section 124.97, 
  3.36  and operating referendum levy under section 124A.03. 
  4.1      Subd. 2.  [CATEGORICAL NET TAX CAPACITY LEVY.] For taxes 
  4.2   payable in 1998 and later, each school district's categorical 
  4.3   net tax capacity levy is equal to the lesser of its categorical 
  4.4   program levy for taxes payable in 1997, or its categorical 
  4.5   program levy for that year. 
  4.6      Subd. 3.  [CATEGORICAL MARKET VALUE LEVY.] For taxes 
  4.7   payable in 1998 and later, a district's categorical market value 
  4.8   levy is equal to the difference between its categorical program 
  4.9   levy under subdivision 1 and its categorical tax capacity levy 
  4.10  under subdivision 2. 
  4.11     Sec. 3.  [124.975] [DEBT LEVY; MARKET VALUE.] 
  4.12     Except as otherwise provided in sections 124A.03 and 
  4.13  124A.0311, a school district levy imposed to pay obligations 
  4.14  approved by the electors under section 475.58 after November 1, 
  4.15  1997, for taxes payable in 1998 or thereafter, must be levied 
  4.16  against the referendum market value of all taxable property as 
  4.17  defined in section 124A.02, subdivision 3b.  A levy subject to 
  4.18  the requirements of this section must be separately certified to 
  4.19  the county auditor under section 275.07. 
  4.20     Sec. 4.  Minnesota Statutes 1996, section 124A.03, 
  4.21  subdivision 1g, is amended to read: 
  4.22     Subd. 1g.  [REFERENDUM EQUALIZATION LEVY.] (a) For fiscal 
  4.23  year 1996, a district's referendum equalization levy equals the 
  4.24  district's referendum equalization revenue times the lesser of 
  4.25  one or the ratio of the district's adjusted net tax capacity per 
  4.26  actual pupil unit to 100 percent of the equalizing factor as 
  4.27  defined in section 124A.02, subdivision 8. 
  4.28     (b) For fiscal year 1997 and thereafter, a district's 
  4.29  referendum equalization levy for a referendum levied against the 
  4.30  referendum market value of all taxable property as defined in 
  4.31  section 124A.02, subdivision 3b, equals the district's 
  4.32  referendum equalization revenue times the lesser of one or the 
  4.33  ratio of the district's adjusted referendum market value per 
  4.34  actual pupil unit to $476,000. 
  4.35     (c) (b) For fiscal year 1997 and thereafter, a district's 
  4.36  referendum equalization levy for a referendum levied against the 
  5.1   net tax capacity of all taxable property equals the district's 
  5.2   referendum equalization revenue times the lesser of one or the 
  5.3   ratio of the district's adjusted net tax capacity per actual 
  5.4   pupil unit to 100 percent of the equalizing factor for that year.
  5.5      Sec. 5.  Minnesota Statutes 1996, section 124A.0311, 
  5.6   subdivision 1, is amended to read: 
  5.7      Subdivision 1.  [EXPIRATION.] Unless scheduled to expire 
  5.8   sooner, a referendum levy authorized under section 124A.03 
  5.9   expires July 1, 2000.  This subdivision does not apply to a 
  5.10  referendum levy that is authorized for ten or fewer years and 
  5.11  that is levied against the referendum market value of all 
  5.12  taxable property located within the school district.  A school 
  5.13  board may, by resolution of its board, convert any portion of 
  5.14  its referendum authority under section 124A.03, subdivision 2, 
  5.15  that is authorized to be levied against net tax capacity to 
  5.16  referendum authority that is authorized to be levied against the 
  5.17  referendum market value of the school district.  For 1997 taxes 
  5.18  payable in 1998 and thereafter, a school district must levy its 
  5.19  referendum levy against the referendum market value of the 
  5.20  school district. 
  5.21     Sec. 6.  Minnesota Statutes 1996, section 124A.23, 
  5.22  subdivision 1, is amended to read: 
  5.23     Subdivision 1.  [GENERAL EDUCATION TAX RATE.] (a) The 
  5.24  commissioner shall establish the general education tax rate 
  5.25  rates by July 1 of each year for levies payable in the following 
  5.26  year.  
  5.27     (b) The total dollar amount raised by the general education 
  5.28  levy is $1,159,000,000 for fiscal year 1999 and later.  The 
  5.29  general education net tax capacity rate shall be a rate, rounded 
  5.30  up to the nearest tenth of a percent, that, when applied to the 
  5.31  adjusted net tax capacity for all districts, raises the amount 
  5.32  specified in this subdivision.  The general education tax rate 
  5.33  shall be the rate that raises $1,054,000,000 for fiscal year 
  5.34  1996 and $1,359,000,000 $1,159,000,000 for fiscal year 1997 1999 
  5.35  and later fiscal years.  Any general education levy amount in 
  5.36  excess of $1,159,000,000 shall be separately specified and 
  6.1   levied against referendum market value. 
  6.2      (c) For fiscal year 1999 and later, the general education 
  6.3   referendum market value rate shall be a rate that, when applied 
  6.4   to the adjusted referendum market value for all districts, 
  6.5   raises a dollar amount equal to the difference between the total 
  6.6   general education levy and $1,159,000,000. 
  6.7      (d) The general education tax rate rates may not be changed 
  6.8   due to changes or corrections made to a district's adjusted net 
  6.9   tax capacity or adjusted referendum market value after the tax 
  6.10  rate has rates have been established.  
  6.11     Sec. 7.  Minnesota Statutes 1996, section 124A.23, 
  6.12  subdivision 2, is amended to read: 
  6.13     Subd. 2.  [GENERAL EDUCATION LEVY.] To obtain general 
  6.14  education revenue, excluding supplemental revenue, a district 
  6.15  may levy an amount not to exceed the sum of the general 
  6.16  education tax rate times the adjusted net tax capacity of the 
  6.17  district for the preceding year and the general education 
  6.18  referendum market value tax rate times the adjusted referendum 
  6.19  market value of the district for the preceding year.  If the 
  6.20  amount of the general education levy would exceed the general 
  6.21  education revenue, excluding supplemental revenue, the general 
  6.22  education levy shall be determined according to subdivision 3.  
  6.23     Sec. 8.  Minnesota Statutes 1996, section 273.032, is 
  6.24  amended to read: 
  6.25     273.032 [MARKET VALUE DEFINITION.] 
  6.26     For the purpose of determining any property tax levy 
  6.27  limitation based on market value, any net debt limit based on 
  6.28  market value, any limit on the issuance of bonds, certificates 
  6.29  of indebtedness, or capital notes based on market value, any 
  6.30  qualification to receive state aid based on market value, or any 
  6.31  state aid amount based on market value, the terms "market 
  6.32  value," "taxable market value," and "market valuation," whether 
  6.33  equalized or unequalized, mean the total taxable market value of 
  6.34  property within the local unit of government before any 
  6.35  adjustments for tax increment, fiscal disparity, or powerline 
  6.36  credit values, but after the limited market adjustments under 
  7.1   section 273.11, subdivision 1a, and after the market value 
  7.2   exclusions of certain improvements to homestead property under 
  7.3   section 273.11, subdivision 16.  Unless otherwise provided, 
  7.4   "market value," "taxable market value," and "market valuation" 
  7.5   refer to the taxable market value for the previous assessment 
  7.6   year. 
  7.7      Sec. 9.  Minnesota Statutes 1996, section 273.11, 
  7.8   subdivision 5, is amended to read: 
  7.9      Subd. 5.  Notwithstanding any other provision of law to the 
  7.10  contrary, the limitation contained in subdivisions subdivision 1 
  7.11  and 1a shall also apply to the authority of the local board of 
  7.12  review as provided in section 274.01, the county board of 
  7.13  equalization as provided in section 274.13, the state board of 
  7.14  equalization and the commissioner of revenue as provided in 
  7.15  sections 270.11, 270.12 and 270.16. 
  7.16     Sec. 10.  Minnesota Statutes 1996, section 273.121, is 
  7.17  amended to read: 
  7.18     273.121 [VALUATION OF REAL PROPERTY, NOTICE.] 
  7.19     Any county assessor or city assessor having the powers of a 
  7.20  county assessor, valuing or classifying taxable real property 
  7.21  shall in each year notify those persons whose property is to be 
  7.22  assessed or reclassified that year if the person's address is 
  7.23  known to the assessor, otherwise the occupant of the property.  
  7.24  The notice shall be in writing and shall be sent by ordinary 
  7.25  mail at least ten days before the meeting of the local board of 
  7.26  review or equalization.  It shall contain:  (1) the market 
  7.27  value, (2) the limited market value under section 273.11, 
  7.28  subdivision 1a, (3) the qualifying amount of any improvements 
  7.29  under section 273.11, subdivision 16, (4) (3) the market value 
  7.30  subject to taxation after subtracting the amount of any 
  7.31  qualifying improvements, (5) (4) the new classification, (6) (5) 
  7.32  a note that if the property is homestead and at least 35 years 
  7.33  old, improvements made to the property may be eligible for a 
  7.34  valuation exclusion under section 273.11, subdivision 16, (7) (6)
  7.35  the assessor's office address, and (8) (7) the dates, places, 
  7.36  and times set for the meetings of the local board of review or 
  8.1   equalization and the county board of equalization.  If the 
  8.2   assessment roll is not complete, the notice shall be sent by 
  8.3   ordinary mail at least ten days prior to the date on which the 
  8.4   board of review has adjourned.  The assessor shall attach to the 
  8.5   assessment roll a statement that the notices required by this 
  8.6   section have been mailed.  Any assessor who is not provided 
  8.7   sufficient funds from the assessor's governing body to provide 
  8.8   such notices, may make application to the commissioner of 
  8.9   revenue to finance such notices.  The commissioner of revenue 
  8.10  shall conduct an investigation and, if satisfied that the 
  8.11  assessor does not have the necessary funds, issue a 
  8.12  certification to the commissioner of finance of the amount 
  8.13  necessary to provide such notices.  The commissioner of finance 
  8.14  shall issue a warrant for such amount and shall deduct such 
  8.15  amount from any state payment to such county or municipality.  
  8.16  The necessary funds to make such payments are hereby 
  8.17  appropriated.  Failure to receive the notice shall in no way 
  8.18  affect the validity of the assessment, the resulting tax, the 
  8.19  procedures of any board of review or equalization, or the 
  8.20  enforcement of delinquent taxes by statutory means. 
  8.21     Sec. 11.  [275.071] [MARKET VALUE TAX.] 
  8.22     That portion of any county's, city's, town's, or special 
  8.23  taxing district's levy which exceeds the jurisdiction's levy for 
  8.24  taxes payable in 1997 shall be levied against the referendum 
  8.25  market value of the jurisdiction, as defined in section 124A.02, 
  8.26  subdivision 3b.  When the jurisdiction reports its levy to the 
  8.27  county auditor under section 275.07, it must separately identify 
  8.28  the portion to be levied against net tax capacity and the 
  8.29  portion to be levied against market value. 
  8.30     Sec. 12.  Minnesota Statutes 1996, section 276.04, 
  8.31  subdivision 2, is amended to read: 
  8.32     Subd. 2.  [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 
  8.33  shall provide for the printing of the tax statements.  The 
  8.34  commissioner of revenue shall prescribe the form of the property 
  8.35  tax statement and its contents.  The statement must contain a 
  8.36  tabulated statement of the dollar amount due to each taxing 
  9.1   authority from the parcel of real property for which a 
  9.2   particular tax statement is prepared.  The dollar amounts due 
  9.3   the county, township or municipality, the total of the 
  9.4   metropolitan special taxing districts as defined in section 
  9.5   275.065, subdivision 3, paragraph (i), school district excess 
  9.6   referenda levy, remaining school district levy, and the total of 
  9.7   other voter approved referenda levies based on market value 
  9.8   under section 275.61 must be separately stated.  The amounts due 
  9.9   all other special taxing districts, if any, may be aggregated.  
  9.10  For the purposes of this subdivision, "school district excess 
  9.11  referenda levy" means school district taxes for operating 
  9.12  purposes approved at referenda, including those taxes based on 
  9.13  net tax capacity as well as those based on market value.  
  9.14  "School district excess referenda levy" does not include school 
  9.15  district taxes for capital expenditures approved at referendums 
  9.16  or school district taxes to pay for the debt service on bonds 
  9.17  approved at referenda.  The amount of the tax on contamination 
  9.18  value imposed under sections 270.91 to 270.98, if any, must also 
  9.19  be separately stated.  The dollar amounts, including the dollar 
  9.20  amount of any special assessments, may be rounded to the nearest 
  9.21  even whole dollar.  For purposes of this section whole 
  9.22  odd-numbered dollars may be adjusted to the next higher 
  9.23  even-numbered dollar.  The amount of market value excluded under 
  9.24  section 273.11, subdivision 16, if any, must also be listed on 
  9.25  the tax statement.  The statement shall include the following 
  9.26  sentence, printed in upper case letters in boldface print:  "THE 
  9.27  STATE OF MINNESOTA DOES NOT RECEIVE ANY PROPERTY TAX REVENUES.  
  9.28  THE STATE OF MINNESOTA REDUCES YOUR PROPERTY TAX BY PAYING 
  9.29  CREDITS AND REIMBURSEMENTS TO LOCAL UNITS OF GOVERNMENT."  
  9.30     (b) The property tax statements for manufactured homes and 
  9.31  sectional structures taxed as personal property shall contain 
  9.32  the same information that is required on the tax statements for 
  9.33  real property.  
  9.34     (c) Real and personal property tax statements must contain 
  9.35  the following information in the order given in this paragraph.  
  9.36  The information must contain the current year tax information in 
 10.1   the right column with the corresponding information for the 
 10.2   previous year in a column on the left: 
 10.3      (1) the property's estimated market value under section 
 10.4   273.11, subdivision 1; 
 10.5      (2) the property's taxable market value after reductions 
 10.6   under section 273.11, subdivisions 1a and subdivision 16; 
 10.7      (3) the property's gross tax, calculated by multiplying the 
 10.8   property's gross tax capacity times the total local tax rate and 
 10.9   adding to the result the sum of the aids enumerated in clause 
 10.10  (4); 
 10.11     (4) a total of the following aids: 
 10.12     (i) education aids payable under chapters 124 and 124A; 
 10.13     (ii) local government aids for cities, towns, and counties 
 10.14  under chapter 477A; and 
 10.15     (iii) disparity reduction aid under section 273.1398; 
 10.16     (5) for homestead residential and agricultural properties, 
 10.17  the homestead and agricultural credit aid apportioned to the 
 10.18  property.  This amount is obtained by multiplying the total 
 10.19  local tax rate by the difference between the property's gross 
 10.20  and net tax capacities under section 273.13.  This amount must 
 10.21  be separately stated and identified as "homestead and 
 10.22  agricultural credit."  For purposes of comparison with the 
 10.23  previous year's amount for the statement for taxes payable in 
 10.24  1990, the statement must show the homestead credit for taxes 
 10.25  payable in 1989 under section 273.13, and the agricultural 
 10.26  credit under section 273.132 for taxes payable in 1989; 
 10.27     (6) any credits received under sections 273.119; 273.123; 
 10.28  273.135; 273.1391; 273.1398, subdivision 4; 469.171; and 
 10.29  473H.10, except that the amount of credit received under section 
 10.30  273.135 must be separately stated and identified as "taconite 
 10.31  tax relief"; and 
 10.32     (7) the net tax payable in the manner required in paragraph 
 10.33  (a). 
 10.34     (d) If the county uses envelopes for mailing property tax 
 10.35  statements and if the county agrees, a taxing district may 
 10.36  include a notice with the property tax statement notifying 
 11.1   taxpayers when the taxing district will begin its budget 
 11.2   deliberations for the current year, and encouraging taxpayers to 
 11.3   attend the hearings.  If the county allows notices to be 
 11.4   included in the envelope containing the property tax statement, 
 11.5   and if more than one taxing district relative to a given 
 11.6   property decides to include a notice with the tax statement, the 
 11.7   county treasurer or auditor must coordinate the process and may 
 11.8   combine the information on a single announcement.  
 11.9      The commissioner of revenue shall certify to the county 
 11.10  auditor the actual or estimated aids enumerated in clauses (3) 
 11.11  and (4) that local governments will receive in the following 
 11.12  year.  In the case of a county containing a city of the first 
 11.13  class, for taxes levied in 1991, and for all counties for taxes 
 11.14  levied in 1992 and thereafter, the commissioner must certify 
 11.15  this amount by September 1.  
 11.16     Sec. 13.  Minnesota Statutes 1996, section 290A.04, 
 11.17  subdivision 2h, is amended to read: 
 11.18     Subd. 2h.  (a) If the gross property taxes payable on a 
 11.19  homestead increase more than 12 ten percent over the net 
 11.20  property taxes payable in the prior year on the same property 
 11.21  that is owned and occupied by the same owner on January 2 of 
 11.22  both years, and the amount of that increase is $100 or more for 
 11.23  taxes payable in 1996 and 1997 1998 and thereafter, a claimant 
 11.24  who is a homeowner shall be allowed an additional refund equal 
 11.25  to 60 percent of the amount of the increase over the greater 
 11.26  of 12 ten percent of the prior year's net property taxes payable 
 11.27  or $100 for taxes payable in 1996 and 1997 1998 and thereafter.  
 11.28  This subdivision shall not apply to any increase in the gross 
 11.29  property taxes payable attributable to improvements made to the 
 11.30  homestead after the assessment date for the prior year's taxes.  
 11.31  This subdivision shall not apply to any increase in the gross 
 11.32  property taxes payable attributable to the termination of 
 11.33  valuation exclusions under section 273.11, subdivision 16. 
 11.34     The maximum refund allowed under this subdivision is $1,000.
 11.35     (b) For purposes of this subdivision, the following terms 
 11.36  have the meanings given: 
 12.1      (1) "Net property taxes payable" means property taxes 
 12.2   payable minus refund amounts for which the claimant qualifies 
 12.3   pursuant to subdivision 2 and this subdivision.  
 12.4      (2) "Gross property taxes" means net property taxes payable 
 12.5   determined without regard to the refund allowed under this 
 12.6   subdivision. 
 12.7      (c) In addition to the other proofs required by this 
 12.8   chapter, each claimant under this subdivision shall file with 
 12.9   the property tax refund return a copy of the property tax 
 12.10  statement for taxes payable in the preceding year or other 
 12.11  documents required by the commissioner. 
 12.12     (d) On or before December 1, 1995, the commissioner shall 
 12.13  estimate the cost of making the payments provided by this 
 12.14  subdivision for taxes payable in 1996.  Notwithstanding the open 
 12.15  appropriation provision of section 290A.23, if the estimated 
 12.16  total refund claims for taxes payable in 1996 exceed $5,500,000, 
 12.17  the commissioner shall first reduce the 60 percent refund rate 
 12.18  enough, but to no lower a rate than 50 percent, so that the 
 12.19  estimated total refund claims do not exceed $5,500,000.  If the 
 12.20  commissioner estimates that total claims will exceed $5,500,000 
 12.21  at a 50 percent refund rate, the commissioner shall also reduce 
 12.22  the $1,000 maximum refund amount by enough so that total 
 12.23  estimated refund claims do not exceed $5,500,000. 
 12.24     The determinations of the revised thresholds by the 
 12.25  commissioner are not rules subject to chapter 14.  
 12.26     (e) Upon request, the appropriate county official shall 
 12.27  make available the names and addresses of the property taxpayers 
 12.28  who may be eligible for the additional property tax refund under 
 12.29  this section.  The information shall be provided on a magnetic 
 12.30  computer disk.  The county may recover its costs by charging the 
 12.31  person requesting the information the reasonable cost for 
 12.32  preparing the data.  The information may not be used for any 
 12.33  purpose other than for notifying the homeowner of potential 
 12.34  eligibility and assisting the homeowner, without charge, in 
 12.35  preparing a refund claim. 
 12.36     Sec. 14.  Minnesota Statutes 1996, section 477A.011, is 
 13.1   amended by adding a subdivision to read: 
 13.2      Subd. 32a.  [POVERTY PERCENTAGE.] "Poverty percentage" for 
 13.3   a city is 100 times the ratio of the number of households below 
 13.4   the poverty line to the total number of households in the city 
 13.5   according to the most recent federal census. 
 13.6      Sec. 15.  Minnesota Statutes 1996, section 477A.011, is 
 13.7   amended by adding a subdivision to read: 
 13.8      Subd. 33a.  [SPRAWL AREA.] "Sprawl area" is the area of a 
 13.9   circle centered around a city's geographic center.  The radius 
 13.10  of the circle, in miles, is equal to the sum of (1) 3.5 and (2) 
 13.11  0.00004 times the city's 1990 population. 
 13.12     Sec. 16.  Minnesota Statutes 1996, section 477A.011, is 
 13.13  amended by adding a subdivision to read: 
 13.14     Subd. 33b.  [ADJUSTED POPULATION.] For a city with a 
 13.15  population of 5,000 or more, which is located outside of the 
 13.16  metropolitan area, the "adjusted population" is equal to the 
 13.17  city's population plus the sum of the 1990 population, outside 
 13.18  of any city boundary, that is located within the sprawl area for 
 13.19  that city.  If two or more cities have overlapping sprawl areas, 
 13.20  the population in the overlapping area that is outside of any 
 13.21  city limits shall be divided between the cities based on each 
 13.22  city's 1990 population compared to the total population of the 
 13.23  affected cities.  For a city with a population less than 5,000 
 13.24  or a city located in the metropolitan area, adjusted population 
 13.25  is equal to the city's population. 
 13.26     Sec. 17.  Minnesota Statutes 1996, section 477A.011, is 
 13.27  amended by adding a subdivision to read: 
 13.28     Subd. 33c.  [CITY DECLINE FACTOR.] "City decline factor" 
 13.29  for a city is the product of the city's (1) pre-1940 housing 
 13.30  percentage, (2) commercial industrial percentage, and (3) 
 13.31  population decline percentage. 
 13.32     Sec. 18.  Minnesota Statutes 1996, section 477A.011, 
 13.33  subdivision 34, is amended to read: 
 13.34     Subd. 34.  [CITY REVENUE NEED.] (a) For a city with a 
 13.35  population equal to or greater than 2,500, "city revenue need" 
 13.36  is the sum of (1) 3.462312 6.110762 times the pre-1940 housing 
 14.1   percentage; plus (2) 2.093826 5.744915 times the commercial 
 14.2   industrial percentage; plus (3) 6.862552 0.024686 times the 
 14.3   population city decline percentage factor; plus 
 14.4   (4) .00026 9.784552 times the city population; plus (5)  
 14.5   152.0141 poverty percentage. 
 14.6      (b) For a city with a population less than 2,500, "city 
 14.7   revenue need" is the sum of (1) 1.795919 times the pre-1940 
 14.8   housing percentage; plus (2) 1.562138 times the commercial 
 14.9   industrial percentage; plus (3) 4.177568 times the population 
 14.10  decline percentage; plus (4) 1.04013 times the transformed 
 14.11  population; minus (5) 107.475. 
 14.12     (c) The city revenue need cannot be less than zero. 
 14.13     (d) For calendar year 1995 and subsequent years, the city 
 14.14  revenue need for a city with a population less than 2,500, as 
 14.15  determined in paragraphs (a) to (b) and (c), is multiplied by 
 14.16  the ratio of the annual implicit price deflator for state and 
 14.17  local government purchases, as prepared by the United States 
 14.18  Department of Commerce, for the most recently available year to 
 14.19  the 1993 implicit price deflator for state and local government 
 14.20  purchases. 
 14.21     (e) For calendar year 1999 and subsequent years, the city 
 14.22  revenue need for a city with a population of 2,500 or more, as 
 14.23  determined in paragraphs (a) and (c), is multiplied by the ratio 
 14.24  of the annual implicit price deflator for state and local 
 14.25  government purchases, as prepared by the United States 
 14.26  Department of Commerce, for the most recent available year to 
 14.27  the 1997 implicit price deflator for state and local government 
 14.28  purchases. 
 14.29     Sec. 19.  Minnesota Statutes 1996, section 477A.013, 
 14.30  subdivision 8, is amended to read: 
 14.31     Subd. 8.  [CITY FORMULA AID.] In calendar year 1994 1998 
 14.32  and subsequent years, the formula aid for a city is equal to the 
 14.33  product of (1) the need increase percentage multiplied by the 
 14.34  difference between (1) (2) the city's revenue need multiplied by 
 14.35  its adjusted population, and (2) the city's net tax capacity 
 14.36  multiplied by the tax effort rate (3) the square root of the 
 15.1   difference between (i) 4.14 and (ii) the ratio of the city's net 
 15.2   tax capacity to 215.06.  No city may have a formula aid amount 
 15.3   less than zero.  The need increase percentage must be the same 
 15.4   for all cities.  
 15.5      Notwithstanding the prior sentence, in 1995 only, the need 
 15.6   increase percentage for a city shall be twice the need increase 
 15.7   percentage applicable to other cities if:  
 15.8      (1) the city, in 1992 or 1993, transferred an amount from 
 15.9   governmental funds to their sewer and water fund, and 
 15.10     (2) the amount transferred exceeded their net levy for 
 15.11  taxes payable in the year in which the transfer occurred. 
 15.12     The applicable need increase percentage or percentages must 
 15.13  be calculated by the department of revenue so that the total of 
 15.14  the aid under subdivision 9 equals the total amount available 
 15.15  for aid under section 477A.03.  
 15.16     Sec. 20.  Minnesota Statutes 1996, section 477A.013, 
 15.17  subdivision 9, is amended to read: 
 15.18     Subd. 9.  [CITY AID DISTRIBUTION.] (a) In calendar year 
 15.19  1994 1998 and thereafter, each city shall receive an aid 
 15.20  distribution equal to the sum of (1) the city formula aid under 
 15.21  subdivision 8, and (2) its city aid base its city formula aid, 
 15.22  subject to the limits in paragraphs (b), (c), (d), and (e). 
 15.23     (b) The percentage increase for a first class city in 
 15.24  calendar year 1995 and thereafter shall not exceed the 
 15.25  percentage increase in the sum of the aid to all cities under 
 15.26  this section in the current calendar year compared to the sum of 
 15.27  the aid to all cities in the previous year. 
 15.28     (c) The total aid for any city, except a first class city, 
 15.29  shall not exceed the sum of (1) ten percent of the city's net 
 15.30  levy for the year prior to the aid distribution plus (2) its 
 15.31  total aid in the previous year before any increases or decreases 
 15.32  under sections 16A.711, subdivision 5, and section 477A.0132. 
 15.33     (d) Notwithstanding paragraph (c), in 1995 1998 only, for 
 15.34  cities which in 1992 or 1993 transferred an amount from 
 15.35  governmental funds to their sewer and water fund in an amount 
 15.36  greater than their net levy for taxes payable in the year in 
 16.1   which the transfer occurred, the total aid shall not exceed the 
 16.2   sum of (1) 20 percent of the city's net levy for the year prior 
 16.3   to the aid distribution plus (2) its total aid in the previous 
 16.4   year before any increases or decreases under sections 16A.711, 
 16.5   subdivision 5, and 477A.0132. 
 16.6      (c) Notwithstanding paragraphs (a), (b), (d), and (e), if a 
 16.7   city with a population of 2,500 or more has a reduction in its 
 16.8   net tax capacity of 20 percent or more in an assessment year 
 16.9   compared to the previous year, the following limits and minimums 
 16.10  shall apply: 
 16.11     (1) for aid distributed in the year immediately following 
 16.12  the assessment year of the net tax capacity loss, the aid may 
 16.13  not increase by more than an amount equal to the product of (i) 
 16.14  ten percent plus a percent equal to the percent loss in net tax 
 16.15  capacity and (ii) the city's net levy for the year prior to the 
 16.16  aid distribution; 
 16.17     (2) for aid distributed in the five years following the 
 16.18  assessment year of the net tax capacity loss, the aid may not be 
 16.19  less than an amount equal to the following: 
 16.20     (i) for the first year, the amount of the net tax capacity 
 16.21  loss multiplied by the city tax rate from the previous year; 
 16.22     (ii) for the second year, 80 percent of the minimum amount 
 16.23  guaranteed in the first year; 
 16.24     (iii) for the third year, 60 percent of the minimum amount 
 16.25  guaranteed in the first year; 
 16.26     (iv) for the fourth year, 40 percent of the minimum amount 
 16.27  guaranteed in the first year; 
 16.28     (v) for the fifth year, 20 percent of the minimum amount 
 16.29  guaranteed in the first year. 
 16.30     A city must notify the commissioner of revenue by July 1 of 
 16.31  the year prior to the first year it would qualify for provisions 
 16.32  under this paragraph in order to be eligible for aid adjustments 
 16.33  under this paragraph.  The city must also furnish the 
 16.34  commissioner with any information needed to administer the 
 16.35  provisions of this paragraph. 
 16.36     (d) No city shall receive total aid in any calendar year 
 17.1   that exceeds the amount of aid it received in 1997. 
 17.2      (e) No city shall receive total aid in any calendar year 
 17.3   that is less than its aid in 1997.  If its city formula aid is 
 17.4   less than the amount received in 1997, the difference shall be 
 17.5   paid by the city to the city's taxpayers in proportion to each 
 17.6   taxpayer's share of the property tax levy. 
 17.7      Sec. 21.  Minnesota Statutes 1996, section 477A.03, 
 17.8   subdivision 2, is amended to read: 
 17.9      Subd. 2.  [ANNUAL APPROPRIATION.] A sum sufficient to 
 17.10  discharge the duties imposed by sections 477A.011 to 477A.014 is 
 17.11  annually appropriated from the general fund to the commissioner 
 17.12  of revenue.  For aids payable in 1996 1998 and thereafter, the 
 17.13  total aids paid under sections 477A.013, subdivision 9, 
 17.14  477A.0121 and 477A.0122 are the amounts certified to be paid in 
 17.15  the previous year, adjusted for inflation as provided under 
 17.16  subdivision 3.  Aid payments to counties under section 477A.0121 
 17.17  are limited to $20,265,000 in 1996.  Aid payments to counties 
 17.18  under section 477A.0121 are limited to $27,571,625 in 1997.  Aid 
 17.19  payments to cities under section 477A.013, subdivision 9, are 
 17.20  limited to $359,344,394 in 1997.  For aid payable in 1998 and 
 17.21  thereafter, the total aids paid under section 477A.0121 
 17.22  477A.013, subdivision 9, are the amounts certified to be paid in 
 17.23  the previous year, adjusted for inflation as provided under 
 17.24  subdivision 3 1997. 
 17.25     Sec. 22.  [REPEALER.] 
 17.26     (a) Minnesota Statutes 1996, section 273.11, subdivision 
 17.27  1a, is repealed. 
 17.28     (b) Minnesota Statutes 1996, section 477A.011, subdivisions 
 17.29  35, 36, and 37, are repealed. 
 17.30     (c) Minnesota Statutes 1996, section 124A.0311, 
 17.31  subdivisions 2, 3, and 4, are repealed. 
 17.32     Sec. 23.  [EFFECTIVE DATE.] 
 17.33     Sections 1 to 12 and 22, paragraph (a), are effective for 
 17.34  the 1997 assessment, for taxes payable in 1998, and thereafter.  
 17.35  Section 13 is effective for property tax refunds based on 
 17.36  property taxes payable in 1998, and thereafter.  Sections 14 to 
 18.1   20 and 22, paragraph (b), are effective for aids payable in 
 18.2   1998, and thereafter.  Section 21 is effective for aids payable 
 18.3   in 1997, and thereafter.  Section 22, paragraph (c), is 
 18.4   effective July 1, 1997.