HF 4002

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to property taxes; limiting levies imposed by cities and counties;
amending Minnesota Statutes 2004, sections 275.70, subdivision 3; 275.71,
subdivisions 2, 4, 5; Minnesota Statutes 2005 Supplement, section 275.70,
subdivision 5; repealing Minnesota Statutes 2004, sections 275.71, subdivision
3; 275.74, subdivision 2.

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

Section 1.

Minnesota Statutes 2004, section 275.70, subdivision 3, is amended to read:

Subd. 3.

Local governmental unit.

"Local governmental unit" means a county, or a
statutory or home rule charter city deleted text begin with a population greater than 2,500 deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes levied in 2006,
payable in 2007.
new text end

Sec. 2.

Minnesota Statutes 2005 Supplement, section 275.70, subdivision 5, is
amended to read:

Subd. 5.

Special levies.

"Special levies" means those portions of ad valorem taxes
levied by a local governmental unit for the following purposes or in the following manner:

(1) to pay the costs of the principal and interest on bonded indebtedness or to
reimburse for the amount of liquor store revenues used to pay the principal and interest
due on municipal liquor store bonds in the year preceding the year for which the levy
limit is calculated;

(2) to pay the costs of principal and interest on certificates of indebtedness issued for
any corporate purpose except for the following:

(i) tax anticipation or aid anticipation certificates of indebtedness;

(ii) certificates of indebtedness issued under sections 298.28 and 298.282;

(iii) certificates of indebtedness used to fund current expenses or to pay the costs of
extraordinary expenditures that result from a public emergency; or

(iv) certificates of indebtedness used to fund an insufficiency in tax receipts or
an insufficiency in other revenue sources;

(3) to provide for the bonded indebtedness portion of payments made to another
political subdivision of the state of Minnesota;

(4) to fund payments made to the Minnesota State Armory Building Commission
under section 193.145, subdivision 2, to retire the principal and interest on armory
construction bonds; new text begin and
new text end

(5) property taxes approved by voters which are levied against the referendum
market value as provided under section 275.61 deleted text begin ; deleted text end new text begin .
new text end

deleted text begin (6) to fund matching requirements needed to qualify for federal or state grants or
programs to the extent that either (i) the matching requirement exceeds the matching
requirement in calendar year 2001, or (ii) it is a new matching requirement that did not
exist prior to 2002;
deleted text end

deleted text begin (7) to pay the expenses reasonably and necessarily incurred in preparing for or
repairing the effects of natural disaster including the occurrence or threat of widespread
or severe damage, injury, or loss of life or property resulting from natural causes, in
accordance with standards formulated by the Emergency Services Division of the state
Department of Public Safety, as allowed by the commissioner of revenue under section
275.74, subdivision 2;
deleted text end

deleted text begin (8) pay amounts required to correct an error in the levy certified to the county
auditor by a city or county in a levy year, but only to the extent that when added to the
preceding year's levy it is not in excess of an applicable statutory, special law or charter
limitation, or the limitation imposed on the governmental subdivision by sections 275.70
to 275.74 in the preceding levy year;
deleted text end

deleted text begin (9) to pay an abatement under section 469.1815;
deleted text end

deleted text begin (10) to pay any costs attributable to increases in the employer contribution rates
under chapter 353 that are effective after June 30, 2001;
deleted text end

deleted text begin (11) to pay the operating or maintenance costs of a county jail as authorized in
section 641.01 or 641.262, or of a correctional facility as defined in section 241.021,
subdivision 1, paragraph (f), to the extent that the county can demonstrate to the
commissioner of revenue that the amount has been included in the county budget as
a direct result of a rule, minimum requirement, minimum standard, or directive of the
Department of Corrections, or to pay the operating or maintenance costs of a regional jail
as authorized in section 641.262. For purposes of this clause, a district court order is
not a rule, minimum requirement, minimum standard, or directive of the Department of
Corrections. If the county utilizes this special levy, except to pay operating or maintenance
costs of a new regional jail facility under sections 641.262 to 641.264 which will not
replace an existing jail facility, any amount levied by the county in the previous levy
year for the purposes specified under this clause and included in the county's previous
year's levy limitation computed under section 275.71, shall be deducted from the levy
limit base under section 275.71, subdivision 2, when determining the county's current year
levy limitation. The county shall provide the necessary information to the commissioner
of revenue for making this determination;
deleted text end

deleted text begin (12) to pay for operation of a lake improvement district, as authorized under section
103B.555. If the county utilizes this special levy, any amount levied by the county in the
previous levy year for the purposes specified under this clause and included in the county's
previous year's levy limitation computed under section 275.71 shall be deducted from
the levy limit base under section 275.71, subdivision 2, when determining the county's
current year levy limitation. The county shall provide the necessary information to the
commissioner of revenue for making this determination;
deleted text end

deleted text begin (13) to repay a state or federal loan used to fund the direct or indirect required
spending by the local government due to a state or federal transportation project or other
state or federal capital project. This authority may only be used if the project is not a
local government initiative;
deleted text end

deleted text begin (14) to pay for court administration costs as required under section 273.1398,
subdivision 4b, less the (i) county's share of transferred fines and fees collected by the
district courts in the county for calendar year 2001 and (ii) the aid amount certified to be
paid to the county in 2004 under section 273.1398, subdivision 4c; however, for taxes
levied to pay for these costs in the year in which the court financing is transferred to the
state, the amount under this clause is limited to the amount of aid the county is certified to
receive under section 273.1398, subdivision 4a;
deleted text end

deleted text begin (15) to fund a police or firefighters relief association as required under section 69.77
to the extent that the required amount exceeds the amount levied for this purpose in 2001;
deleted text end

deleted text begin (16) for purposes of a storm sewer improvement district under section 444.20; and
deleted text end

deleted text begin (17) to pay for the maintenance and support of a city or county society for the
prevention of cruelty to animals under section 343.11. If the city or county uses this
special levy, any amount levied by the city or county in the previous levy year for the
purposes specified in this clause and included in the city's or county's previous year's levy
limit computed under section 275.71, must be deducted from the levy limit base under
section 275.71, subdivision 2, in determining the city's or county's current year levy limit.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes levied in 2006,
payable in 2007.
new text end

Sec. 3.

Minnesota Statutes 2004, section 275.71, subdivision 2, is amended to read:

Subd. 2.

Levy limit base.

The levy limit base for a local governmental unit for
taxes levied in deleted text begin 2003 is equal to its adjusted levy limit base in the previous year, subject
to any adjustments under section 275.72, plus any aid amounts received in 2003 under
section 273.138 or 273.166, minus the difference between its levy limit under subdivision
5 for taxes levied in 2002 and the amount it actually levied under that subdivision in that
year, and certified property tax replacement aid payable in 2003 under section 174.242. deleted text end
new text begin 2006 is equal to its certified amount for taxes levied in 2005, minus the amount reported
under section 275.62, subdivision 1, as levied for the purposes included in section 275.70,
subdivision 5, clauses (1) to (5), for taxes levied in 2005.
new text end

new text begin The levy limit base for a local governmental unit for taxes levied in 2007 is equal to
its adjusted levy limit base for taxes levied in 2006.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes levied in 2006,
payable in 2007.
new text end

Sec. 4.

Minnesota Statutes 2004, section 275.71, subdivision 4, is amended to read:

Subd. 4.

Adjusted levy limit base.

deleted text begin (a) deleted text end For taxes levied in deleted text begin 2003 deleted text end new text begin 2006 and 2007 new text end ,
the adjusted levy limit base is equal to the levy limit base computed under deleted text begin subdivisions deleted text end
new text begin subdivision new text end 2 deleted text begin and 3 deleted text end or section 275.72, deleted text begin reduced by 40 percent of the difference between
(1) the sum of 2003 certified aid payments, under sections 273.138, 273.1398 except for
amounts certified under subdivision 4a, paragraph (b), 273.166, 477A.011 to 477A.03,
477A.06, and 477A.07, before any reduction under Laws 2003, First Special Session
chapter 21, articles 5 and 6, and (2) the sum of the aids paid in 2004 under those same
sections, after any reductions in 2004 under Laws 2003, First Special Session chapter 21,
articles 5 and 6. deleted text end new text begin multiplied by one plus the percentage increase in the taxable market value
of the jurisdiction due to new construction of class 3 property, as defined in section 273.13,
subdivision 24, except for state-assessed utility and railroad operating property, for the
most recent year in which data is available.
new text end

deleted text begin (b) For taxes levied in 2003 only, the adjusted levy limit base is increased by 60
percent of the difference between a jurisdiction's market value credit in 2003 before any
reductions under Laws 2003, First Special Session chapter 21, articles 5 and 6, and its
market value credit in 2004 after reductions in Laws 2003, First Special Session chapter
21, articles 5 and 6.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes levied in 2006,
payable in 2007.
new text end

Sec. 5.

Minnesota Statutes 2004, section 275.71, subdivision 5, is amended to read:

Subd. 5.

Property tax levy limit.

For taxes levied in deleted text begin 2003 deleted text end new text begin 2006 and 2007 new text end , the
property tax levy limit for a local governmental unit is equal to its adjusted levy limit base
determined under subdivision 4 plus any additional levy authorized under section 275.73,
which is levied against net tax capacity deleted text begin , reduced by the sum of (i) the total amount of aids
and reimbursements that the local governmental unit is certified to receive under sections
477A.011 to 477A.014, except for the increases in city aid bases in calendar year 2002
under section 477A.011, subdivision 36, paragraphs (l), (n), and (o), (ii) homestead and
agricultural aids it is certified to receive under section 273.1398, (iii) taconite aids under
sections 298.28 and 298.282 including any aid which was required to be placed in a
special fund for expenditure in the next succeeding year, (iv) temporary court aid under
section 273.1398, subdivision 4a, and (v) estimated payments to the local governmental
unit under section 272.029, adjusted for any error in estimation in the preceding year deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes levied in 2006,
payable in 2007.
new text end

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

new text begin Minnesota Statutes 2004, sections 275.71, subdivision 3; and 275.74, subdivision
2, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes levied in 2006,
payable in 2007.
new text end