HF 2502

as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to education finance; enhancing the debt 
  1.3             service equalization aid program; modifying the 
  1.4             maximum effort capital loan program; amending 
  1.5             Minnesota Statutes 2000, sections 123B.53, 
  1.6             subdivisions 1, 2, 4, 5; 123B.54; 126C.63, subdivision 
  1.7             8; 126C.69, subdivisions 2, 3, 9, 12, 15; 475.53, 
  1.8             subdivision 4. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 2000, section 123B.53, 
  1.11  subdivision 1, is amended to read: 
  1.12     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
  1.13  section, the eligible debt service revenue of a district is 
  1.14  defined as follows: 
  1.15     (1) the amount needed to produce between five and six 
  1.16  percent in excess of the amount needed to meet when due the 
  1.17  principal and interest payments on the obligations of the 
  1.18  district for eligible projects according to subdivision 2, 
  1.19  including the amounts necessary for repayment of energy loans 
  1.20  according to section 216C.37 or sections 298.292 to 298.298, 
  1.21  debt service loans and capital loans, lease purchase payments 
  1.22  under section 126C.40, subdivision 2, alternative facilities 
  1.23  levies under section 123B.59, subdivision 5, minus 
  1.24     (2) the amount of debt service excess levy reduction for 
  1.25  that school year calculated according to the procedure 
  1.26  established by the commissioner. 
  1.27     (b) The obligations in this paragraph are excluded from 
  2.1   eligible debt service revenue: 
  2.2      (1) obligations under section 123B.61; 
  2.3      (2) the part of debt service principal and interest paid 
  2.4   from the taconite environmental protection fund or northeast 
  2.5   Minnesota economic protection trust; 
  2.6      (3) obligations issued under Laws 1991, chapter 265, 
  2.7   article 5, section 18, as amended by Laws 1992, chapter 499, 
  2.8   article 5, section 24; and 
  2.9      (4) obligations under section 123B.62. 
  2.10     (c) For purposes of this section, if a preexisting school 
  2.11  district reorganized under sections 123A.35 to 123A.43, 123A.46, 
  2.12  and 123A.48 is solely responsible for retirement of the 
  2.13  preexisting district's bonded indebtedness, capital loans or 
  2.14  debt service loans, debt service equalization aid must be 
  2.15  computed separately for each of the preexisting districts. 
  2.16     (d) For purposes of this section, "revenue eligible for 
  2.17  second tier debt equalization" means the eligible debt service 
  2.18  revenue according to paragraphs (a) to (c) for projects 
  2.19  receiving a positive review and comment according to section 
  2.20  123B.70 and receiving voter approval or school district approval 
  2.21  after January 1, 2000, or for projects not requiring a review 
  2.22  and comment, that are approved by the commissioner after January 
  2.23  1, 2000. 
  2.24     Sec. 2.  Minnesota Statutes 2000, section 123B.53, 
  2.25  subdivision 2, is amended to read: 
  2.26     Subd. 2.  [ELIGIBILITY.] (a) The following portions of a 
  2.27  district's debt service levy qualify for debt service 
  2.28  equalization: 
  2.29     (1) debt service for repayment of principal and interest on 
  2.30  bonds issued before July 2, 1992; 
  2.31     (2) debt service for bonds refinanced after July 1, 1992, 
  2.32  if the bond schedule has been approved by the commissioner and, 
  2.33  if necessary, adjusted to reflect a 20-year maturity schedule; 
  2.34  and 
  2.35     (3) debt service for bonds issued after July 1, 1992, for 
  2.36  construction projects that have received a positive review and 
  3.1   comment according to section 123B.71, if the commissioner has 
  3.2   determined that the district has met the criteria under section 
  3.3   126C.69, subdivision 3, except section 126C.69, subdivision 3, 
  3.4   paragraph (a), clause (2), and if the bond schedule has been 
  3.5   approved by the commissioner and, if necessary, adjusted to 
  3.6   reflect a 20-year maturity schedule. 
  3.7      (b) The criterion described in section 126C.69, subdivision 
  3.8   3, paragraph (a), clause (9), does not apply to bonds authorized 
  3.9   by elections held before July 1, 1992. 
  3.10     (c) For the purpose of this subdivision the department 
  3.11  shall determine the eligibility for sparsity at the location of 
  3.12  the new facility, or the site of the new facility closest to the 
  3.13  nearest operating school if there is more than one new facility. 
  3.14     (d) Notwithstanding paragraphs (a) to (c), debt service for 
  3.15  repayment of principal and interest on bonds issued after July 
  3.16  1, 1997, does not qualify for debt service equalization aid 
  3.17  unless the primary purpose of the facility is to serve students 
  3.18  in kindergarten through grade 12. 
  3.19     Sec. 3.  Minnesota Statutes 2000, section 123B.53, 
  3.20  subdivision 4, is amended to read: 
  3.21     Subd. 4.  [DEBT SERVICE EQUALIZATION REVENUE.] (a) The debt 
  3.22  service equalization revenue of a district equals the sum of the 
  3.23  first tier debt service equalization revenue and the second tier 
  3.24  debt service equalization revenue. 
  3.25     (b) The first tier debt service equalization revenue of a 
  3.26  district equals the greater of zero or the eligible debt service 
  3.27  revenue minus the amount raised by a levy of 12 percent times 
  3.28  the adjusted net tax capacity of the district minus the second 
  3.29  tier debt service equalization revenue of the district. 
  3.30     (c) The second tier debt service equalization revenue of a 
  3.31  district equals the greater of zero or the lesser of the 
  3.32  eligible debt service revenue minus the amount raised by a levy 
  3.33  of 20 percent times the adjusted net tax capacity of the 
  3.34  district or the district's revenue eligible for second tier debt 
  3.35  equalization. 
  3.36     Sec. 4.  Minnesota Statutes 2000, section 123B.53, 
  4.1   subdivision 5, is amended to read: 
  4.2      Subd. 5.  [EQUALIZED DEBT SERVICE LEVY.] To obtain debt 
  4.3   service equalization revenue, a district must levy an amount not 
  4.4   to exceed the district's debt service equalization revenue (a) 
  4.5   The equalized debt service levy of a district equals the sum of 
  4.6   the first tier equalized debt service levy and the second tier 
  4.7   equalized debt service levy. 
  4.8      (b) A district's first tier equalized debt service levy 
  4.9   equals the district's first tier debt service equalization 
  4.10  revenue times the lesser of one or the ratio of: 
  4.11     (1) the quotient derived by dividing the adjusted net tax 
  4.12  capacity of the district for the year before the year the levy 
  4.13  is certified by the adjusted pupil units in the district for the 
  4.14  school year ending in the year prior to the year the levy is 
  4.15  certified; to 
  4.16     (2) $4,000. 
  4.17     (c) A district's second tier equalized debt service levy 
  4.18  equals the district's second tier debt service equalization 
  4.19  revenue times the lesser of one or the ratio of: 
  4.20     (1) the quotient derived by dividing the adjusted net tax 
  4.21  capacity of the district for the year before the year the levy 
  4.22  is certified by the adjusted pupil units in the district for the 
  4.23  school year ending in the year prior to the year the levy is 
  4.24  certified; to 
  4.25     (2) $10,000. 
  4.26     Sec. 5.  Minnesota Statutes 2000, section 123B.54, is 
  4.27  amended to read: 
  4.28     123B.54 [DEBT SERVICE APPROPRIATION.] 
  4.29     (a) $33,141,000 in fiscal year 2000, $29,400,000 in fiscal 
  4.30  year 2001, $26,934,000 in fiscal year 2002, and $24,540,000 in 
  4.31  fiscal year 2003 and each year thereafter is There is annually 
  4.32  appropriated from the general fund to the commissioner of 
  4.33  children, families, and learning for payment of debt service 
  4.34  equalization aid under section 123B.53.  
  4.35     (b) The appropriations in paragraph (a) must be reduced by 
  4.36  the amount of any money specifically appropriated for the same 
  5.1   purpose in any year from any state fund. 
  5.2      Sec. 6.  Minnesota Statutes 2000, section 126C.63, 
  5.3   subdivision 8, is amended to read: 
  5.4      Subd. 8.  [MAXIMUM EFFORT DEBT SERVICE LEVY.] "Maximum 
  5.5   effort debt service levy" means the lesser of: 
  5.6      (1) a levy in whichever of the following amounts is 
  5.7   applicable: 
  5.8      (a) in any district receiving a debt service loan for a 
  5.9   debt service levy payable in 2002 and thereafter, or granted a 
  5.10  capital loan after January 1, 2001, a levy in total dollar 
  5.11  amount computed at a rate of 30 percent of adjusted net tax 
  5.12  capacity for taxes payable in 2002 and thereafter; 
  5.13     (b) in any district receiving a debt service loan for a 
  5.14  debt service levy payable in 1991 and thereafter, or granted a 
  5.15  capital loan after January 1, 1990, a levy in a total dollar 
  5.16  amount computed at a rate of 24 percent of adjusted net tax 
  5.17  capacity for taxes payable in 1991 and thereafter; 
  5.18     (b) (c) in any district granted a debt service loan after 
  5.19  July 31, 1981, or granted a capital loan which is approved after 
  5.20  July 31, 1981, a levy in a total dollar amount computed as a tax 
  5.21  rate of 21.92 percent on the adjusted net tax capacity for taxes 
  5.22  payable in 1991 and thereafter; or 
  5.23     (2) a levy in any district for which a capital loan was 
  5.24  approved prior to August 1, 1981, a levy in a total dollar 
  5.25  amount equal to the sum of the amount of the required debt 
  5.26  service levy and an amount which when levied annually will in 
  5.27  the opinion of the commissioner be sufficient to retire the 
  5.28  remaining interest and principal on any outstanding loans from 
  5.29  the state within 30 years of the original date when the capital 
  5.30  loan was granted.  
  5.31     The board in any district affected by the provisions of 
  5.32  clause (2) may elect instead to determine the amount of its levy 
  5.33  according to the provisions of clause (1).  If a district's 
  5.34  capital loan is not paid within 30 years because it elects to 
  5.35  determine the amount of its levy according to the provisions of 
  5.36  clause (2), the liability of the district for the amount of the 
  6.1   difference between the amount it levied under clause (2) and the 
  6.2   amount it would have levied under clause (1), and for interest 
  6.3   on the amount of that difference, must not be satisfied and 
  6.4   discharged pursuant to Minnesota Statutes 1988, or an earlier 
  6.5   edition of Minnesota Statutes if applicable, section 124.43, 
  6.6   subdivision 4. 
  6.7      Sec. 7.  Minnesota Statutes 2000, section 126C.69, 
  6.8   subdivision 2, is amended to read: 
  6.9      Subd. 2.  [CAPITAL LOANS ELIGIBILITY.] Beginning July 1, 
  6.10  1999, a district is not eligible for a capital loan unless the 
  6.11  district's estimated net debt tax rate as computed by the 
  6.12  commissioner after debt service equalization aid would be more 
  6.13  than 24 30 percent of adjusted net tax capacity.  The estimate 
  6.14  must assume a 20-year maturity schedule for new debt. 
  6.15     Sec. 8.  Minnesota Statutes 2000, section 126C.69, 
  6.16  subdivision 3, is amended to read: 
  6.17     Subd. 3.  [DISTRICT REQUEST FOR REVIEW AND COMMENT.] A 
  6.18  district or a joint powers district that intends to apply for a 
  6.19  capital loan must submit a proposal to the commissioner for 
  6.20  review and comment according to section 123B.71 by July 1 of an 
  6.21  odd-numbered year.  The commissioner shall prepare a review and 
  6.22  comment on the proposed facility, regardless of the amount of 
  6.23  the capital expenditure required to construct the facility.  In 
  6.24  addition to the information provided under section 123B.71, 
  6.25  subdivision 9, the commissioner shall require that predesign 
  6.26  packages comparable to those required under section 16B.335 be 
  6.27  prepared by the applicant school district.  The predesign 
  6.28  packages must be sufficient to define the scope, cost, and 
  6.29  schedule of the project and must demonstrate that the project 
  6.30  has been analyzed according to appropriate space needs standards 
  6.31  and also consider the following criteria in determining whether 
  6.32  to make a positive review and comment.  
  6.33     (a) To grant a positive review and comment the commissioner 
  6.34  shall determine that all of the following conditions are met: 
  6.35     (1) the facilities are needed for pupils for whom no 
  6.36  adequate facilities exist or will exist; 
  7.1      (2) the district will serve, on average, at least 80 pupils 
  7.2   per grade or is eligible for elementary or secondary sparsity 
  7.3   revenue there is evidence to indicate that the facilities will 
  7.4   have a useful public purpose for at least the term of the bonds; 
  7.5      (3) no form of cooperation with another district would 
  7.6   provide the necessary facilities; 
  7.7      (4) the facilities are comparable in size and quality to 
  7.8   facilities recently constructed in other districts that have 
  7.9   similar enrollments; 
  7.10     (5) the facilities are comparable in size and quality to 
  7.11  facilities recently constructed in other districts that are 
  7.12  financed without a capital loan; 
  7.13     (6) the district is projected to maintain or increase its 
  7.14  average daily membership over the next five years or is eligible 
  7.15  for elementary or secondary sparsity revenue have adequate funds 
  7.16  in its general operating budget to support a quality education 
  7.17  for its students for at least the next five years; 
  7.18     (7) the current facility poses a threat to the life, 
  7.19  health, and safety of pupils, and cannot reasonably be brought 
  7.20  into compliance with fire, health, or life safety codes; 
  7.21     (8) the district has made a good faith effort, as evidenced 
  7.22  by its maintenance expenditures, to adequately maintain the 
  7.23  existing facility during the previous ten years and to comply 
  7.24  with fire, health, and life safety codes and state and federal 
  7.25  requirements for handicapped accessibility; 
  7.26     (9) the district has made a good faith effort to encourage 
  7.27  integration of social service programs within the new facility; 
  7.28  and 
  7.29     (10) evaluations by boards of adjacent districts have been 
  7.30  received; and 
  7.31     (11) the proposal includes a comprehensive technology plan 
  7.32  that assures information access for the students, parents, and 
  7.33  community. 
  7.34     (b) The commissioner may grant a negative review and 
  7.35  comment if: 
  7.36     (1) the state demographer has examined the population of 
  8.1   the communities to be served by the facility and determined that 
  8.2   the communities have not grown during the previous five years; 
  8.3      (2) the state demographer determines that the economic and 
  8.4   population bases of the communities to be served by the facility 
  8.5   are not likely to grow or to remain at a level sufficient, 
  8.6   during the next ten years, to ensure use of the entire facility; 
  8.7      (3) the need for facilities could be met within the 
  8.8   district or adjacent districts at a comparable cost by leasing, 
  8.9   repairing, remodeling, or sharing existing facilities or by 
  8.10  using temporary facilities; 
  8.11     (4) the district plans do not include cooperation and 
  8.12  collaboration with health and human services agencies and other 
  8.13  political subdivisions; or 
  8.14     (5) if the application is for new construction, an existing 
  8.15  facility that would meet the district's needs could be purchased 
  8.16  at a comparable cost from any other source within the area. 
  8.17     Sec. 9.  Minnesota Statutes 2000, section 126C.69, 
  8.18  subdivision 9, is amended to read: 
  8.19     Subd. 9.  [LOAN AMOUNT LIMITS.] (a) A loan must not be 
  8.20  recommended for approval for a district exceeding an amount 
  8.21  computed as follows: 
  8.22     (1) the amount requested by the district under subdivision 
  8.23  6; 
  8.24     (2) plus the aggregate principal amount of general 
  8.25  obligation bonds of the district outstanding on June 30 of the 
  8.26  year following the year the application was received, not 
  8.27  exceeding the limitation on net debt of the district in section 
  8.28  475.53, subdivision 4, or 363 450 percent of its adjusted net 
  8.29  tax capacity as most recently determined, whichever is less; 
  8.30     (3) less the maximum net debt permissible for the district 
  8.31  on December 1 of the year the application is received, under the 
  8.32  limitation in section 475.53, subdivision 4, or 363 450 percent 
  8.33  of its adjusted net tax capacity as most recently determined, 
  8.34  whichever is less; 
  8.35     (4) less any amount by which the amount voted exceeds the 
  8.36  total cost of the facilities for which the loan is granted.  
  9.1      (b) The loan may be approved in an amount computed as 
  9.2   provided in paragraph (a), clauses (1) to (3), subject to later 
  9.3   reduction according to paragraph (a), clause (4). 
  9.4      Sec. 10.  Minnesota Statutes 2000, section 126C.69, 
  9.5   subdivision 12, is amended to read: 
  9.6      Subd. 12.  [CONTRACT.] (a) Each capital loan must be 
  9.7   evidenced by a contract between the district and the state 
  9.8   acting through the commissioner.  The contract must obligate the 
  9.9   state to reimburse the district, from the maximum effort school 
  9.10  loan fund, for eligible capital expenses for construction of the 
  9.11  facility for which the loan is granted, an amount computed as 
  9.12  provided in subdivision 9.  The commissioner must receive from 
  9.13  the district a certified resolution of the board estimating the 
  9.14  costs of construction and reciting that contracts for 
  9.15  construction of the facilities for which the loan is granted 
  9.16  have been awarded and, that bonds of the district have been 
  9.17  issued and sold in the amount necessary to pay all estimated 
  9.18  costs of construction in excess of the amount of the loan and 
  9.19  that all work, when completed, will meet or exceed standards 
  9.20  established in the state building code.  The contract must 
  9.21  obligate the district to repay the loan out of the excesses of 
  9.22  its maximum effort debt service levy over its required debt 
  9.23  service levy, including interest at a rate equal to the weighted 
  9.24  average annual rate payable on Minnesota state school loan bonds 
  9.25  issued or reissued for the project and disbursed to the 
  9.26  districts on a reimbursement basis, but in no event less than 
  9.27  3-1/2 percent per year on the principal amount from time to time 
  9.28  unpaid. 
  9.29     (b) The district must each year, as long as it is indebted 
  9.30  to the state, levy for debt service (i) the amount of its 
  9.31  maximum effort debt service levy or (ii) the amount of its 
  9.32  required debt service levy, whichever is greater, except as the 
  9.33  required debt service levy may be reduced by a loan under 
  9.34  section 126C.68.  The district shall remit payments to the 
  9.35  commissioner according to section 126C.71. 
  9.36     (c) The commissioner shall supervise the collection of 
 10.1   outstanding accounts due the fund and may, by notice to the 
 10.2   proper county auditor, require the maximum levy to be made as 
 10.3   required in this subdivision.  Interest on capital loans must be 
 10.4   paid on December 15 of the year after the year the loan is 
 10.5   granted and annually in later years.  By September 30, the 
 10.6   commissioner shall notify the county auditor of each county 
 10.7   containing taxable property situated within the district of the 
 10.8   amount of the maximum effort debt service levy of the district 
 10.9   for that year.  The county auditor or auditors shall extend upon 
 10.10  the tax rolls an ad valorem tax upon all taxable property within 
 10.11  the district in the aggregate amount so certified. 
 10.12     Sec. 11.  Minnesota Statutes 2000, section 126C.69, 
 10.13  subdivision 15, is amended to read: 
 10.14     Subd. 15.  [BOND SALE LIMITATIONS.] A district having an 
 10.15  outstanding state loan must not issue and sell any bonds on the 
 10.16  public market, except to refund state loans, unless it agrees to 
 10.17  make the maximum effort debt service levy in each later year at 
 10.18  the higher rate provided in section 126C.63, subdivision 8, and 
 10.19  unless it schedules the maturities of the bonds according to 
 10.20  section 475.54, subdivision 2.  A district that refunds bonds at 
 10.21  a lower interest rate may continue to make the maximum effort 
 10.22  debt service levy in each later year at the current rate 
 10.23  provided in section 126C.63, subdivision 8, if the district can 
 10.24  demonstrate to the commissioner's satisfaction that the 
 10.25  district's repayments of the state loan will not be reduced 
 10.26  below the previous year's level.  The district must report each 
 10.27  sale to the commissioner. 
 10.28     For a capital loan issued prior to July 1, 2001, after a 
 10.29  the district's capital loan has been outstanding for 30 years, 
 10.30  the district must not issue bonds on the public market except to 
 10.31  refund the loan. 
 10.32     For a capital loan issued on or after July 1, 2001, after 
 10.33  the district's capital loan has been outstanding for 20 years, 
 10.34  the district must not issue bonds on the public market except to 
 10.35  refund the loan. 
 10.36     Sec. 12.  Minnesota Statutes 2000, section 475.53, 
 11.1   subdivision 4, is amended to read: 
 11.2      Subd. 4.  [SCHOOL DISTRICTS.] Except as otherwise provided 
 11.3   by law, no school district shall be subject to a net debt in 
 11.4   excess of ten 15 percent of the actual market value of all 
 11.5   taxable property situated within its corporate limits, as 
 11.6   computed in accordance with this subdivision.  The county 
 11.7   auditor of each county containing taxable real or personal 
 11.8   property situated within any school district shall certify to 
 11.9   the district upon request the market value of all such 
 11.10  property.  Whenever the commissioner of revenue, in accordance 
 11.11  with section 127A.48, subdivisions 1 to 6, has determined that 
 11.12  the net tax capacity of any district furnished by county 
 11.13  auditors is not based upon the market value of taxable property 
 11.14  in the district, the commissioner of revenue shall certify to 
 11.15  the district upon request the ratio most recently ascertained to 
 11.16  exist between such value and the actual market value of property 
 11.17  within the district.  The actual market value of property within 
 11.18  a district, on which its debt limit under this subdivision is 
 11.19  based, is (a) the value certified by the county auditors, or (b) 
 11.20  this value divided by the ratio certified by the commissioner of 
 11.21  revenue, whichever results in a higher value.