SF 277

1st Engrossment - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to property taxation; including certain 
  1.3             homestead property value in the areawide tax base; 
  1.4             subjecting certain homestead property value to the 
  1.5             areawide tax rate; amending Minnesota Statutes 1994, 
  1.6             sections 473F.02, subdivision 8, and by adding 
  1.7             subdivisions; 473F.05; 473F.07, subdivision 1; and 
  1.8             473F.08, subdivisions 2, 6, 8a, and by adding a 
  1.9             subdivision. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  Minnesota Statutes 1994, section 473F.02, 
  1.12  subdivision 8, is amended to read: 
  1.13     Subd. 8.  [MUNICIPALITY.] "Municipality" means a city, 
  1.14  town, or township located in whole or part within the area, but 
  1.15  not the cities of New Prague or Northfield.  If a municipality 
  1.16  is located partly within and partly without the area, the 
  1.17  references in sections 473F.01 to 473F.13 to property or any 
  1.18  portion thereof subject to taxation or taxing jurisdiction 
  1.19  within the municipality are to such property or portion thereof 
  1.20  as is located in that portion of the municipality within the 
  1.21  area, except that the fiscal capacity of such a municipality 
  1.22  shall be computed upon the basis of the valuation and population 
  1.23  of the entire municipality. 
  1.24     A municipality shall be excluded from the area if its 
  1.25  municipal comprehensive zoning and planning policies 
  1.26  conscientiously exclude most commercial-industrial development, 
  1.27  for reasons other than preserving an agricultural use.  The 
  2.1   metropolitan council and the commissioner of revenue shall 
  2.2   jointly make this determination annually and shall notify those 
  2.3   municipalities that are ineligible to participate in the tax 
  2.4   base sharing program provided in this chapter for the following 
  2.5   year. 
  2.6      Sec. 2.  Minnesota Statutes 1994, section 473F.02, is 
  2.7   amended by adding a subdivision to read: 
  2.8      Subd. 25.  [EXCESS HOMESTEAD NET TAX CAPACITY.] "Excess 
  2.9   homestead net tax capacity" is the net tax capacity on that 
  2.10  portion of class 1 or class 2a property over $200,000 market 
  2.11  value.  In the case of class 2a property, only the net tax 
  2.12  capacity of the house, garage, and one acre of land over 
  2.13  $200,000 market value is considered excess homestead net tax 
  2.14  capacity. 
  2.15     Sec. 3.  Minnesota Statutes 1994, section 473F.02, is 
  2.16  amended by adding a subdivision to read: 
  2.17     Subd. 26.  [CONTRIBUTION NET TAX CAPACITY.] Each 
  2.18  municipality's "contribution net tax capacity" is equal to 40 
  2.19  percent of the increase in net capacity as certified under 
  2.20  section 473F.06, plus the amount of excess homestead growth net 
  2.21  tax capacity certified under section 473F.05. 
  2.22     Sec. 4.  Minnesota Statutes 1994, section 473F.02, is 
  2.23  amended by adding a subdivision to read: 
  2.24     Subd. 27.  [CONTRIBUTION PERCENTAGE.] Each municipality's 
  2.25  "contribution percentage" is that portion of its contribution 
  2.26  net tax capacity attributable to commercial-industrial property 
  2.27  divided by the municipality's total preceding year's net tax 
  2.28  capacity of commercial-industrial property, determined without 
  2.29  regard to section 469.177, subdivision 3. 
  2.30     Sec. 5.  Minnesota Statutes 1994, section 473F.02, is 
  2.31  amended by adding a subdivision to read: 
  2.32     Subd. 28.  [EXCESS HOMESTEAD GROWTH NET TAX 
  2.33  CAPACITY.] "Excess homestead growth net tax capacity" for a 
  2.34  municipality is its excess homestead net tax capacity for the 
  2.35  current year minus its excess homestead net tax capacity for 
  2.36  taxes assessed in 1994, payable in 1995.  A municipality's 
  3.1   excess homestead growth net tax capacity cannot be less than 
  3.2   zero. 
  3.3      Sec. 6.  Minnesota Statutes 1994, section 473F.05, is 
  3.4   amended to read: 
  3.5      473F.05 [NET TAX CAPACITY.] 
  3.6      On or before August 5 of each year, the assessors within 
  3.7   each county in the area shall determine and certify to the 
  3.8   county auditor the excess homestead net tax capacity, the excess 
  3.9   homestead growth net tax capacity, and the net tax capacity in 
  3.10  that year of commercial-industrial property subject to taxation 
  3.11  within each municipality in the county, determined without 
  3.12  regard to section 469.177, subdivision 3.  
  3.13     Sec. 7.  Minnesota Statutes 1994, section 473F.07, 
  3.14  subdivision 1, is amended to read: 
  3.15     Subdivision 1.  [AREAWIDE NET TAX CAPACITY.] Each county 
  3.16  auditor shall certify the determinations under sections 473F.05 
  3.17  and 473F.06 to the administrative auditor on or before August 1 
  3.18  of each year.  
  3.19     The administrative auditor shall determine an amount equal 
  3.20  to 40 percent of the sum of the amounts certified under section 
  3.21  473F.06 contribution net tax capacities for all municipalities 
  3.22  in the area.  The resulting amount shall be known as the 
  3.23  "areawide net tax capacity for ........(year)." 
  3.24     Sec. 8.  Minnesota Statutes 1994, section 473F.08, 
  3.25  subdivision 2, is amended to read: 
  3.26     Subd. 2.  [COMPUTATION OF NET TAX CAPACITY.] The net tax 
  3.27  capacity of a governmental unit is its net tax capacity, as 
  3.28  determined in accordance with other provisions of law including 
  3.29  section 469.177, subdivision 3, subject to the following 
  3.30  adjustments:  
  3.31     (a) There shall be subtracted from its net tax capacity its 
  3.32  excess homestead growth net tax capacity, plus, in each 
  3.33  municipality in which the governmental unit exercises ad valorem 
  3.34  taxing jurisdiction, an amount which bears the same proportion 
  3.35  to 40 percent of the amount certified in that year under 
  3.36  sections 473F.06 and 473F.07 for the municipality as the total 
  4.1   preceding year's net tax capacity of commercial-industrial 
  4.2   property which is subject to the taxing jurisdiction of the 
  4.3   governmental unit within the municipality, determined without 
  4.4   regard to section 469.177, subdivision 3, bears to equal to the 
  4.5   municipality's contribution percentage times the total preceding 
  4.6   year's net tax capacity of commercial-industrial property within 
  4.7   the jurisdiction and within the municipality, determined without 
  4.8   regard to section 469.177, subdivision 3; 
  4.9      (b) There shall be added to its net tax capacity, in each 
  4.10  municipality in which the governmental unit exercises ad valorem 
  4.11  taxing jurisdiction, an amount which bears the same proportion 
  4.12  to the areawide net tax capacity for the year attributable to 
  4.13  that municipality as the total preceding year's net tax capacity 
  4.14  of residential property which is subject to the taxing 
  4.15  jurisdiction of the governmental unit within the municipality 
  4.16  bears to the total preceding year's net tax capacity of 
  4.17  residential property of the municipality.  
  4.18     Sec. 9.  Minnesota Statutes 1994, section 473F.08, 
  4.19  subdivision 6, is amended to read: 
  4.20     Subd. 6.  [APPLICATION TO COMMERCIAL-INDUSTRIAL PROPERTY.] 
  4.21  The areawide tax rate determined in accordance with subdivision 
  4.22  5 shall apply to that portion of the net tax capacity of each 
  4.23  commercial-industrial property subject to taxation within a 
  4.24  municipality, including property located within any tax 
  4.25  increment financing district, as defined in section 469.174, 
  4.26  subdivision 9, to that portion of the net tax capacity of the 
  4.27  item which bears the same proportion to its total net tax 
  4.28  capacity as 40 percent of the amount determined under sections 
  4.29  473F.06 and 473F.07 is to the amount determined under section 
  4.30  473F.05 equal to the municipality's contribution percentage.  
  4.31  The tax rate determined in accordance with subdivision 4 shall 
  4.32  apply in the taxation of the remainder of the net tax capacity 
  4.33  of the item property.  
  4.34     Sec. 10.  Minnesota Statutes 1994, section 473F.08, is 
  4.35  amended by adding a subdivision to read: 
  4.36     Subd. 6a.  [APPLICATION TO HOMESTEAD PROPERTY.] Each county 
  5.1   assessor shall determine each municipality's "excess homestead 
  5.2   areawide ratio" as the excess homestead growth net tax capacity 
  5.3   reported under section 473F.05 divided by the excess homestead 
  5.4   net tax capacity for the current year.  The areawide tax rate 
  5.5   determined under subdivision 5 shall apply to that portion of 
  5.6   the excess homestead net tax capacity of each homestead property 
  5.7   in the municipality equal to the excess homestead areawide 
  5.8   ratio.  The tax rate determined in accordance with subdivision 4 
  5.9   shall apply in the taxation of the remainder of the net tax 
  5.10  capacity of the property. 
  5.11     Sec. 11.  Minnesota Statutes 1994, section 473F.08, 
  5.12  subdivision 8a, is amended to read: 
  5.13     Subd. 8a.  [FISCAL DISPARITIES ADJUSTMENT.] In any year in 
  5.14  which the highest class rate for class 3a property changes from 
  5.15  the rate in the previous year, the following adjustments shall 
  5.16  be made to the procedures described in sections 473F.06 to 
  5.17  473F.08. 
  5.18     (1) An initial contribution tax capacity shall be 
  5.19  determined for each municipality based on the previous year's 
  5.20  class rates. 
  5.21     (2) Each jurisdiction's distribution tax capacity shall be 
  5.22  determined based upon the areawide tax base determined by 
  5.23  summing the tax capacities computed under clause (1) for all 
  5.24  municipalities and apportioning the resulting sum pursuant to 
  5.25  section 473F.07, subdivision 5. 
  5.26     (3) Each jurisdiction's distribution levy shall be 
  5.27  determined by applying the procedures described in subdivision 
  5.28  3, clause (a), to the distribution tax capacity determined 
  5.29  pursuant to clause (2). 
  5.30     (4) Each municipality's final contribution tax capacity 
  5.31  shall be determined equal to as its excess homestead growth net 
  5.32  tax capacity plus that portion of its initial contribution tax 
  5.33  capacity attributable to commercial-industrial property 
  5.34  multiplied by the ratio of the new highest class rate for class 
  5.35  3a property to the previous year's highest class rate for class 
  5.36  3a property. 
  6.1      (5) For the purposes of computing education aids and any 
  6.2   other state aids requiring the addition of the fiscal 
  6.3   disparities distribution tax capacity to the local tax capacity, 
  6.4   each municipality's final distribution tax capacity shall be 
  6.5   determined equal to its initial distribution tax capacity 
  6.6   multiplied by the ratio of the new highest class rate for class 
  6.7   3a property to the previous year's highest class rate for class 
  6.8   3a property areawide total final contribution tax capacity to 
  6.9   the areawide total initial contribution net tax capacity. 
  6.10     (6) The areawide tax rate shall be determined by dividing 
  6.11  the sum of the amounts determined in clause (3) by the sum of 
  6.12  the values determined in clause (4). 
  6.13     (7) The final contribution tax capacity determined in 
  6.14  clause (4) shall also be used to determined the portion of each 
  6.15  commercial/industrial property's tax capacity subject to the 
  6.16  areawide tax rate pursuant to subdivision 6. 
  6.17     Sec. 12.  [CONFLICTING PROVISIONS.] 
  6.18     If a bill designated as H.F. No. 1156 is enacted into law, 
  6.19  and if that bill dedicates a portion of a municipality's net tax 
  6.20  capacity to providing revenues for specific purposes, then 
  6.21  "excess homestead growth net tax capacity," as defined in 
  6.22  section 5, must exclude any net tax capacity dedicated to a 
  6.23  specific purpose by H.F. No. 1156. 
  6.24     Sec. 13.  [PROPERTY TAX RELIEF REQUIREMENT.] 
  6.25     Subdivision 1.  For the purposes of this section, "net 
  6.26  distribution net tax capacity" means a jurisdiction's 
  6.27  distribution net tax capacity minus its contribution net tax 
  6.28  capacity, determined under Minnesota Statutes, section 473F.07. 
  6.29     Subd. 2.  For purposes of this section, "tax rate reduction 
  6.30  percentage" means 50 percent of (a) the difference between its 
  6.31  net distribution net tax capacity for taxes payable in 1997 
  6.32  compared to taxes payable in 1996, (b) divided by its net tax 
  6.33  capacity for taxes payable in 1996, after adjustment for its 
  6.34  contribution and distribution net tax capacities under Minnesota 
  6.35  Statutes, section 473F.07, and for the captured value of tax 
  6.36  increment financing districts as defined in Minnesota Statutes, 
  7.1   section 469.177, subdivision 2. 
  7.2      Subd. 3.  For taxes payable in 1997 only, any county, city, 
  7.3   or town which has a net distribution net tax capacity which is 
  7.4   both greater than zero and greater than its net distribution net 
  7.5   tax capacity for taxes payable in 1996 may not certify a levy 
  7.6   for taxes payable in 1997 that causes its tax rate to exceed its 
  7.7   tax rate for taxes payable in 1996, reduced by its tax rate 
  7.8   reduction percentage. 
  7.9      Sec. 14.  [APPLICATION.] 
  7.10     Sections 1 to 11 apply in the counties of Anoka, Carver, 
  7.11  Dakota, Hennepin, Ramsey, Scott, and Washington. 
  7.12     Sec. 15.  [EFFECTIVE DATE.] 
  7.13     This act is effective for taxes payable in 1997 and 
  7.14  subsequent years.