HF 1780

as introduced - 91st Legislature (2019 - 2020) Posted on 02/27/2019 10:43am

A bill for an act
relating to taxation; creating the Stronger Community Aid program; amending the
dates of the truth in taxation process; appropriating money; amending Minnesota
Statutes 2018, section 275.065, subdivisions 1, 1a, 1c, 3; proposing coding for
new law in Minnesota Statutes, chapter 477A; repealing Minnesota Statutes 2018,
section 6.91.

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

Section 1.

Minnesota Statutes 2018, section 275.065, subdivision 1, is amended to read:

Subdivision 1.

Proposed levy.

(a) Notwithstanding any law or charter to the contrary,
on or before September deleted text begin 30 deleted text end new text begin 1 new text end , each county, home rule charter or statutory city, town, and
special taxing district, excluding the Metropolitan Council and the Metropolitan Mosquito
Control Commission, shall certify to the county auditor the proposed property tax levy for
taxes payable in the following year. For towns, the final certified levy shall also be considered
the proposed levy.

(b) Notwithstanding any law or charter to the contrary, on or before September deleted text begin 15 deleted text end new text begin 1 new text end ,
the Metropolitan Council and the Metropolitan Mosquito Control Commission shall adopt
and certify to the county auditor a proposed property tax levy for taxes payable in the
following year.

(c) On or before September deleted text begin 30 deleted text end new text begin 1 new text end , each school district that has not mutually agreed with
its home county to extend this date shall certify to the county auditor the proposed property
tax levy for taxes payable in the following year. Each school district that has agreed with
its home county to delay the certification of its proposed property tax levy must certify its
proposed property tax levy for the following year no later than deleted text begin October 7 deleted text end new text begin September 8 new text end . The
school district shall certify the proposed levy as:

(1) a specific dollar amount by school district fund, broken down between voter-approved
and non-voter-approved levies and between referendum market value and tax capacity
levies; or

(2) the maximum levy limitation certified by the commissioner of education according
to section 126C.48, subdivision 1.

(d) If the board of estimate and taxation or any similar board that establishes maximum
tax levies for taxing jurisdictions within a first class city certifies the maximum property
tax levies for funds under its jurisdiction by charter to the county auditor by the date specified
in paragraph (a), the city shall be deemed to have certified its levies for those taxing
jurisdictions.

(e) For purposes of this section, "special taxing district" means a special taxing district
as defined in section 275.066. Intermediate school districts that levy a tax under chapter
124 or 136D, joint powers boards established under sections 123A.44 to 123A.445, and
Common School Districts No. 323, Franconia, and No. 815, Prinsburg, are also special
taxing districts for purposes of this section.

(f) At the meeting at which a taxing authority, other than a town, adopts its proposed
tax levy under this subdivision, the taxing authority shall announce the time and place of
any subsequent regularly scheduled meetings at which the budget and levy will be discussed
and at which the public will be allowed to speak. The time and place of those meetings must
be included in the proceedings or summary of proceedings published in the official newspaper
of the taxing authority under section 123B.09, 375.12, or 412.191.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2020 and thereafter.
new text end

Sec. 2.

Minnesota Statutes 2018, section 275.065, subdivision 1a, is amended to read:

Subd. 1a.

Overlapping jurisdictions.

In the case of a taxing authority lying in two or
more counties, the home county auditor shall certify the proposed levy and the proposed
local tax rate to the other county auditor by deleted text begin October 5 deleted text end new text begin September 6 new text end , unless the home county
has agreed to delay the certification of its proposed property tax levy, in which case the
home county auditor shall certify the proposed levy and the proposed local tax rate to the
other county auditor by deleted text begin October 10 deleted text end new text begin September 11 new text end . The home county auditor must estimate
the levy or rate in preparing the notices required in subdivision 3, if the other county has
not certified the appropriate information. If requested by the home county auditor, the other
county auditor must furnish an estimate to the home county auditor.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2020 and thereafter.
new text end

Sec. 3.

Minnesota Statutes 2018, section 275.065, subdivision 1c, is amended to read:

Subd. 1c.

Levy; shared, merged, consolidated services.

If two or more taxing authorities
are in the process of negotiating an agreement for sharing, merging, or consolidating services
between those taxing authorities at the time the proposed levy is to be certified under
subdivision 1, each taxing authority involved in the negotiation shall certify its total proposed
levy as provided in that subdivision, including a notification to the county auditor of the
specific service involved in the agreement which is not yet finalized. The affected taxing
authorities may amend their proposed levies under subdivision 1 until deleted text begin October 10 deleted text end new text begin September
11 new text end for levy amounts relating only to the specific service involved.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2020 and thereafter.
new text end

Sec. 4.

Minnesota Statutes 2018, 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 deleted text begin November 10 deleted text end new text begin October 15 new text end and on or before deleted text begin November deleted text end new text begin
October new text end 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 deleted text begin November deleted text end new text begin October new text end 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 deleted text begin November deleted text end new text begin October new text end 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, school building bond agricultural
credit under section 273.1387, voter 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 deleted text begin November deleted text end new text begin October new text end 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 for taxes payable in 2020 and thereafter.
new text end

Sec. 5.

new text begin [477A.0135] STRONGER COMMUNITY AID.
new text end

new text begin Subdivision 1. new text end

new text begin Purpose. new text end

new text begin The purpose of this section is to enhance the local performance
measurement program administered by the Office of the State Auditor by implementing a
permanent aid program set to compensate participating local governments for their dedication
to enhancing the public hearing process of determining final local government levies and
for implementing a performance measurement program. Participation in this program is
voluntary. For purposes of this section "local governments" is limited to all counties and
all statutory and home rule charter cities.
new text end

new text begin Subd. 2. new text end

new text begin Duties of the Office of the State Auditor. new text end

new text begin (a) To assist participating local
governments, the Office of the State Auditor must provide on its website guidance for
compliance with the requirements of this section, including but not limited to:
new text end

new text begin (1) performance measures for counties;
new text end

new text begin (2) performance measures for cities;
new text end

new text begin (3) sample resolution for counties and cities; and
new text end

new text begin (4) reporting requirements.
new text end

new text begin (b) Under subdivision 7, the state auditor must prescribe the form in which participating
local governments report their compliance with the requirements of this section.
new text end

new text begin (c) Under subdivision 9, the state auditor must certify to the commissioner of revenue
by April 1 of each year the list of participating local governments that are eligible to receive
aid under this section.
new text end

new text begin Subd. 3. new text end

new text begin Program performance measures. new text end

new text begin (a) Each year, a local government that elects
to participate in this section must adopt and implement a set of performance measures
prescribed by the Office of the State Auditor.
new text end

new text begin (b) A local government that elects to participate in this section must adopt its performance
measures by June 1 each year.
new text end

new text begin Subd. 4. new text end

new text begin Citizen budget workshop meetings. new text end

new text begin (a) A local government that elects to
participate in this section must hold a citizen budget workshop meeting to discuss
performance measures selected for the upcoming year, review and report the results of the
performance measures and compare to previous years, if applicable, discuss the budget
process and budget priorities, and receive public input.
new text end

new text begin (b) The meeting described in this subdivision must be held between June 15 and August
15 of each year, not before 6:00 p.m., with notice to the public provided at least 15 days
before the meeting is held by posting on the local government's official website or direct
mail.
new text end

new text begin Subd. 5. new text end

new text begin Preliminary budget meeting. new text end

new text begin At the meeting at which a local government
participating in this section sets its preliminary budget and levy, under section 275.065,
subdivision 1, the participating local government must identify at least one performance
measure area needing improvement and determine a strategy and plan for its improvement.
new text end

new text begin Subd. 6. new text end

new text begin Final budget meeting; resolution. new text end

new text begin At the meeting at which a local government
participating in this section sets its final budget and levy, under section 275.07, the
participating local government must approve a resolution declaring that:
new text end

new text begin (1) a participating local government adopted and implemented the appropriate number
of performance measures from each applicable service category prescribed by the state
auditor;
new text end

new text begin (2) a participating local government held a citizen budget workshop meeting, before the
meeting at which it set its preliminary levy, during which it discussed the budget process
and reported the results of the performance measures to the public and allowed for public
input;
new text end

new text begin (3) performance measure results from the previous year, if applicable, were made public
through the local government's official website or direct mail; and
new text end

new text begin (4) a participating local government identified for improvement at least one performance
measure and developed a plan for its improvement.
new text end

new text begin Subd. 7. new text end

new text begin Certification to the Office of the State Auditor. new text end

new text begin A participating local
government must certify to the Office of the State Auditor, in a form prescribed by the
auditor, that it has met the requirements of subdivisions 3 to 6 by February 1 of the aid
distribution year.
new text end

new text begin Subd. 8. new text end

new text begin Aid calculation. new text end

new text begin (a) Beginning in calendar year 2019 and thereafter, each local
jurisdiction that has satisfied the requirements under this section is eligible for an aid
payment.
new text end

new text begin (b) For eligible counties, the aid is calculated as follows:
new text end

new text begin (1) for a county with a population up to 10,000, the aid is equal to $4 per capita to a
maximum of $20,000;
new text end

new text begin (2) for a county with a population between 10,001 and 30,000, the aid is equal to $2 per
capita to a maximum of $30,000; and
new text end

new text begin (3) for a county with a population of 30,001 or over, the aid is equal to $1 per capita to
a maximum of $150,000.
new text end

new text begin (c) For eligible cities, the aid is calculated as follows:
new text end

new text begin (1) for a city with a population up to 500, the aid is equal to $8 per capita to a maximum
of $2,000;
new text end

new text begin (2) for a city with a population between 501 and 2,500, the aid is equal to $5 per capita
to a maximum of $5,000; and
new text end

new text begin (3) for a city with a population over 2,500, the aid is equal to $2 per capita to a maximum
of $50,000.
new text end

new text begin (d) For purposes of this section, the population data used for the calculation of this aid
is the population of each eligible county and city as of January 1 of the aid distribution year.
new text end

new text begin Subd. 9. new text end

new text begin Aid certification and payment. new text end

new text begin (a) By April 1 of the aid distribution year, the
Office of the State Auditor must certify to the commissioner of revenue a list of the local
governments that have certified, pursuant to subdivision 7, that they have met the
requirements of this section and are eligible to receive aid.
new text end

new text begin (b) The commissioner of revenue shall make all necessary calculations and make
payments directly to the affected taxing authorities annually. In addition, the commissioner
shall notify the authorities of their aid amounts and those statewide total figures before
August 1 of the aid distribution year.
new text end

new text begin (c) The commissioner of revenue shall make the payments to qualifying local jurisdictions
on December 26 annually.
new text end

new text begin Subd. 10. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to make the payments required by the
commissioner of revenue under subdivision 9 is annually appropriated from the general
fund to the commissioner of revenue.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in 2020 and thereafter.
new text end

Sec. 6. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2018, section 6.91, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon final enactment.
new text end

APPENDIX

Repealed Minnesota Statutes: 19-3946

6.91 LOCAL PERFORMANCE MEASUREMENT AND REPORTING.

Subdivision 1.

Reports of local performance measures.

(a) A county or city that elects to participate in the standard measures program must report its results to its citizens annually through publication, direct mailing, posting on the jurisdiction's website, or through a public hearing at which the budget and levy will be discussed and public input allowed.

(b) Each year, jurisdictions participating in the local performance measurement and improvement program must file a report with the state auditor by July 1, in a form prescribed by the auditor. All reports must include a declaration that the jurisdiction has complied with, or will have complied with by the end of the year, the requirement in paragraph (a). For jurisdictions participating in the standard measures program, the report shall consist of the jurisdiction's results for the standard set of performance measures under section 6.90, subdivision 2, paragraph (a). In 2012, jurisdictions participating in the comprehensive performance measurement program must submit a resolution approved by its local governing body indicating that it either has implemented or is in the process of implementing a local performance measurement system that meets the minimum standards specified by the council under section 6.90, subdivision 2, paragraph (b). In 2013 and thereafter, jurisdictions participating in the comprehensive performance measurement program must submit a statement approved by its local governing body affirming that it has implemented a local performance measurement system that meets the minimum standards specified by the council under section 6.90, subdivision 2, paragraph (b).

Subd. 2.

Benefits of participation.

(a) A county or city that elects to participate in the standard measures program for 2011 is: (1) eligible for per capita reimbursement of $0.14 per capita, but not to exceed $25,000 for any government entity; and (2) exempt from levy limits under sections 275.70 to 275.74 for taxes payable in 2012, if levy limits are in effect.

(b) Any county or city that elects to participate in the standard measures program for 2012 is eligible for per capita reimbursement of $0.14 per capita, but not to exceed $25,000 for any government entity. Any jurisdiction participating in the comprehensive performance measurement program is exempt from levy limits under sections 275.70 to 275.74 for taxes payable in 2013 if levy limits are in effect.

(c) Any county or city that elects to participate in the standard measures program for 2013 or any year thereafter is eligible for per capita reimbursement of $0.14 per capita, but not to exceed $25,000 for any government entity. Any jurisdiction participating in the comprehensive performance measurement program for 2013 or any year thereafter is exempt from levy limits under sections 275.70 to 275.74 for taxes payable in the following year, if levy limits are in effect.

Subd. 3.

Certification of participation.

(a) The state auditor shall certify to the commissioner of revenue by August 1 of each year the counties and cities that are participating in the standard measures program and the comprehensive performance measurement program.

(b) The commissioner of revenue shall make per capita aid payments under this section on the second payment date specified in section 477A.015, in the same year that the measurements were reported.

(c) The commissioner of revenue shall notify each county and city that is entitled to exemption from levy limits by August 10 of each levy year.

Subd. 4.

Appropriation.

(a) The amount necessary to fund obligations under subdivision 2 is annually appropriated from the general fund to the commissioner of revenue.

(b) The sum of $6,000 in fiscal year 2011 and $2,000 in each fiscal year thereafter is annually appropriated from the general fund to the state auditor to carry out the auditor's responsibilities under sections 6.90 to 6.91.