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Minnesota Legislature

Office of the Revisor of Statutes

SF 1005

as introduced - 90th Legislature (2017 - 2018) Posted on 02/23/2017 09:53am

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to state lands; establishing funds to make annual payments for certain
state-purchased land using dedicated revenues; modifying payment in lieu of taxes
requirements; appropriating money; amending Minnesota Statutes 2016, sections
97A.056, subdivision 1a, by adding subdivisions; 116P.02, subdivision 1, by adding
subdivisions; 477A.10; 477A.11, by adding subdivisions; proposing coding for
new law in Minnesota Statutes, chapters 11A; 116P; 477A.

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

Section 1.

new text begin [11A.237] ACCOUNT FOR COUNTY JOINT TRUST FUND PAYMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The State Board of Investment, when requested by a
county as required under sections 97A.056, subdivision 1b, and 116P.045, subdivision 2,
shall invest the funds deposited by the commissioner of revenue, acting as an agent on the
board's behalf, under section 97A.056, subdivision 1b, or 116P.045, subdivision 2, in a
special account for that purpose in the combined investment funds established in section
11A.14, subject to the policy and procedures of the State Board of Investment. Use of the
funds is restricted to payments to the commissioner of revenue, acting as an agent on behalf
of the counties, for distributions to counties under sections 97A.056, subdivision 1b, and
116P.045, subdivision 2.
new text end

new text begin Subd. 2. new text end

new text begin Account maintenance and investment. new text end

new text begin The commissioner of revenue may
deposit money into the account on behalf of the counties and may withdraw money from
the account to make distributions to the counties under sections 97A.056, subdivision 1b,
and 116P.045, subdivision 2, only. The commissioner of revenue shall make one payment
under each section each year for all counties eligible for a payment in that year. The
commissioner shall make one withdrawal annually at a time negotiated with the executive
director of the State Board of Investment, but no later than November 15, to cover
distributions to counties under section 477A.30, up to the limit allowed under that section.
The transactions must be in the manner required by the executive director of the State Board
of Investment. Investment earnings must be credited to the account.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
new text end

Sec. 2.

Minnesota Statutes 2016, section 97A.056, subdivision 1a, is amended to read:


Subd. 1a.

Definitions.

deleted text beginFor the purpose ofdeleted text end new text begin(a) The definitions in this subdivision apply
to this section and
new text endappropriations from the outdoor heritage funddeleted text begin,deleted text endnew text begin.
new text end

new text begin (b) "Land acquisition costs" means acquisition coordination costs, costs of engineering
services, appraisal fees, attorney fees, taxes, assessments required at the time of purchase,
onetime trust fund payments under subdivision 1b, and recording fees.
new text end

new text begin (c) "Land-related property taxes" means property taxes collected on behalf of local
governments providing land-related services.
new text end

new text begin (d) "Local governments providing land-related services" means counties, townships,
home rule charter and statutory cities, watershed districts under chapter 103D, sanitary
districts under sections 442A.01 to 442A.29, and regional sanitary sewer districts under
sections 115.61 to 115.67.
new text end

new text begin (e)new text end "Recipient" means the entity responsible for deliverables financed by the outdoor
heritage fund.

new text begin (f) "Total payment for the land" means the total price paid for the land including land
acquisition costs, but excluding any in-kind services provided by nongovernmental entities
at no cost to the state.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, section 97A.056, is amended by adding a subdivision to
read:


new text begin Subd. 1b. new text end

new text begin Outdoor heritage trust fund payment account; trust fund payments. new text end

new text begin (a)
An outdoor heritage trust fund account is created in the special revenue fund. The State
Board of Investment must ensure the account is invested under section 11A.24. The
commissioner of management and budget must credit to the account all money appropriated
to the account and all money earned by the account. The principal of the account and any
unexpended earnings must be invested and reinvested by the State Board of Investment.
Nothing in this section limits the source of contributions to the account. Money in the
account must be used only for the purposes of this subdivision.
new text end

new text begin (b) State land acquired in fee simple in whole or in part with money appropriated from
the outdoor heritage fund is eligible for a onetime trust fund payment as provided under
this subdivision. The percentage of the total acres acquired in any purchase that is eligible
for a trust fund payment under this subdivision is equal to the percentage of the total payment
for the land funded from outdoor heritage fund revenues. If the percentage of the total
payment for the land from the outdoor heritage fund is ten percent or less, the parcel is
ineligible for a payment under this subdivision; if the percentage is 90 percent or more, the
entire parcel is eligible for the payment under this subdivision. The commissioner of natural
resources must certify to the commissioner of revenue and the county in which land eligible
for a payment under this section is purchased the total number of acres purchased, the total
payment for the land, and the amount of outdoor heritage fund revenues used for the purchase.
The trust fund payment is equal to 30 times the land-related property taxes assessed on the
eligible portion of the land in the year prior to the year in which the land is acquired. If the
land was acquired from a private party that was exempt from paying property taxes, the
payments must be based on 30 times the property taxes assessed on comparable land in the
year prior to the year in which the land is acquired. By September 1 each year, the county
in which the land is acquired must provide the commissioner of revenue with information
necessary in a form determined by the commissioner of revenue to make this determination
for all lands acquired for the 12-month period ending on June 30 of that year. The
commissioner of revenue must make a trust fund payment on behalf of each county on the
same date as the first payment under section 273.1384, subdivision 4, each year for all land
acquired in that county in the 12-month period ending on June 30 of that year to the State
Board of Investment as required under this paragraph. The money so deposited is money
paid to the counties and may only be withdrawn for the purposes allowed under section
477A.30. The commissioner of revenue must inform each county by October 15 each year
of the amount deposited on the county's behalf with the State Board of Investment under
this subdivision.
new text end

new text begin (c) The amount necessary to make the payments required under this subdivision is
annually appropriated from the outdoor heritage trust fund payment account to the
commissioner of revenue.
new text end

new text begin (d) To receive a trust fund payment under this subdivision, a county board must enter
into an agreement with the State Board of Investment to allow the commissioner of revenue
to make deposits and withdrawals on behalf of the county into and out of the county joint
trust fund account under section 11A.237.
new text end

new text begin (e) The portion of land receiving a trust fund payment under this subdivision is not
eligible for payments under sections 477A.11 to 477A.14, but is eligible for distribution of
withdrawals from the county joint trust fund account under section 477A.30.
new text end

new text begin (f) If the land for which a payment under this subdivision is made is subsequently sold
to another entity and is no longer available for the use for which it was purchased, the
original amount of the payment for that land under paragraph (b) must be withdrawn by the
commissioner of revenue from the account established under section 11A.237 and returned
to the outdoor heritage fund. If only a portion of the land is sold and no longer available for
the use for which it was purchased, the amount of the original trust fund payment returned
is reduced proportionately based on the portion of the original purchase that is sold. The
holder of the land must inform the commissioner of revenue and the county in which the
land is sold of the sale and provide them with any information necessary to calculate the
required withdrawal from the account. The withdrawal is made along with withdrawals
under section 477A.30 in the calendar year after the year in which the land is sold.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017, and applies to land acquired
with money appropriated on or after that date.
new text end

Sec. 4.

Minnesota Statutes 2016, section 97A.056, is amended by adding a subdivision to
read:


new text begin Subd. 15a. new text end

new text begin State acquisition of land; restrictions. new text end

new text begin The state may not use money from
the outdoor heritage fund to acquire in fee simple in whole or in part any land subject to
property taxes or any land owned by a nonprofit organization that was subject to property
taxes before the land's acquisition by the nonprofit organization if (1) subdivision 1b is void,
or (2) sufficient funds to cover the onetime trust fund payment required under subdivision
1b have not been appropriated or are not available.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017, and applies to land acquired
with money appropriated on or after that date.
new text end

Sec. 5.

Minnesota Statutes 2016, section 116P.02, subdivision 1, is amended to read:


Subdivision 1.

Applicability.

The definitions in this section apply to this chapternew text begin, except
that the definition in subdivision 6 does not apply to section 116P.045
new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 6.

Minnesota Statutes 2016, section 116P.02, is amended by adding a subdivision to
read:


new text begin Subd. 4a. new text end

new text begin Land acquisition costs. new text end

new text begin "Land acquisition costs" means acquisition
coordination costs, costs of engineering services, appraisal fees, attorney fees, taxes,
assessments required at the time of purchase, payments under section 116P.045, and recording
fees.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 7.

Minnesota Statutes 2016, section 116P.02, is amended by adding a subdivision to
read:


new text begin Subd. 4b. new text end

new text begin Land-related property taxes. new text end

new text begin "Land-related property taxes" means property
taxes collected on behalf of local governments providing land-related services.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 8.

Minnesota Statutes 2016, section 116P.02, is amended by adding a subdivision to
read:


new text begin Subd. 4c. new text end

new text begin Local governments providing land-related services. new text end

new text begin "Local governments
providing land-related services" means counties, townships, home rule charter and statutory
cities, watershed districts under chapter 103D, sanitary districts under sections 442A.01 to
442A.29, and regional sanitary sewer districts under sections 115.61 to 115.67.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 9.

Minnesota Statutes 2016, section 116P.02, is amended by adding a subdivision to
read:


new text begin Subd. 4d. new text end

new text begin Total payment for the land. new text end

new text begin "Total payment for the land" means the total
price paid for the land including land acquisition costs, but excluding any in-kind services
provided by nongovernmental entities at no cost to the state.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 10.

new text begin [116P.045] ENVIRONMENT AND NATURAL RESOURCES TRUST FUND
PAYMENT ACCOUNT.
new text end

new text begin Subdivision 1. new text end

new text begin Account created. new text end

new text begin An environment and natural resources trust fund
payment account is created in the special revenue fund. The State Board of Investment must
ensure the account is invested under section 11A.24. The commissioner of management
and budget must credit to the account all money appropriated to the account and all money
earned by the account. The principal of the account and any unexpended earnings must be
invested and reinvested by the State Board of Investment. Nothing in this section limits the
source of contributions to the account. Money in the account must be used only for the
purposes of this section.
new text end

new text begin Subd. 2. new text end

new text begin Trust fund payment; appropriation. new text end

new text begin (a) State land acquired in fee simple in
whole or in part with money appropriated from the environment and natural resources trust
fund is eligible for a onetime trust fund payment as provided under this subdivision. The
percentage of the total acres acquired in any purchase that is eligible for a trust fund payment
under this section is equal to the percentage of the total payment for the land funded from
environment and natural resources trust fund revenues. If the percentage of the total payment
for the land from the environment and natural resources trust fund is ten percent or less, the
parcel is ineligible for a payment under this section; if the percentage is 90 percent or more,
the entire parcel is eligible for the payment under this section. The commissioner of natural
resources must certify to the commissioner of revenue and the county in which land eligible
for a payment under this section is purchased the total number of acres purchased, the total
payment for the land, and the amount of environmental and natural resources trust fund
revenues used for the purchase. The trust fund payment is equal to 30 times the land-related
property taxes assessed on the eligible portion of the land in the year prior to the year in
which the land is acquired. If the land was acquired from a private party that was exempt
from paying property taxes, the payments must be based on 30 times the property taxes
assessed on comparable land in the year prior to the year in which the land is acquired. By
September 1 each year, the county in which the land is acquired must provide the
commissioner of revenue with information necessary in a form determined by the
commissioner of revenue to make this determination for all lands acquired for the 12-month
period ending on June 30 of that year. The commissioner of revenue must make a trust fund
payment on behalf of each county on the same date as the first payment under section
273.1384, subdivision 4, each year for all land acquired in that county in the 12-month
period ending on June 30 of that year to the State Board of Investment as required under
this section. The money so deposited is money paid to the counties and may only be
withdrawn for the purposes allowed under section 477A.30. The commissioner of revenue
must inform each county by October 15 each year of the amount deposited on the county's
behalf with the State Board of Investment under this subdivision.
new text end

new text begin (b) The amount necessary to make the payments required under this subdivision is
annually appropriated from the environment and natural resources trust fund payment
account to the commissioner of revenue.
new text end

new text begin (c) If the land for which a payment under this subdivision is made is subsequently sold
to another entity and is no longer available for the use for which it was purchased, the
original amount of the payment for that land under paragraph (a) must be withdrawn by the
commissioner of revenue from the account established under section 11A.237 and returned
to the environment and natural resources trust fund. If only a portion of the land is sold and
no longer available for the use for which it was purchased, the amount of the original trust
fund payment returned is reduced proportionately based on the portion of the original
purchase that is sold. The holder of the land must inform the commissioner of revenue and
the county in which the land is sold of the sale and provide them with any information
necessary to calculate the required withdrawal from the account. The withdrawal is made
along with withdrawals under section 477A.30 in the calendar year after the year in which
the land is sold.
new text end

new text begin Subd. 3. new text end

new text begin County requirements. new text end

new text begin To receive a trust fund payment under this section, a
county board must enter into an agreement with the State Board of Investment to allow the
commissioner of revenue to make deposits and withdrawals on behalf of the county into
and out of the county joint trust fund account under section 11A.237.
new text end

new text begin Subd. 4. new text end

new text begin Ineligible for other payments. new text end

new text begin Land receiving a trust fund payment under this
section is not eligible for payments under sections 477A.11 to 477A.14, but is eligible for
distribution of withdrawals from the county joint trust fund account under section 477A.30.
new text end

new text begin Subd. 5. new text end

new text begin State acquisition of land; restrictions. new text end

new text begin The state may not use money from the
environment and natural resources trust fund to acquire in fee simple in whole or in part
any land subject to property taxes or any land owned by a nonprofit organization that was
subject to property taxes before the land's acquisition by the nonprofit organization if (1)
subdivision 2 is void, or (2) sufficient funds to cover the onetime trust fund payment required
under subdivision 2 have not been appropriated or are not available.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017, and applies to land acquired
with money appropriated on or after that date.
new text end

Sec. 11.

Minnesota Statutes 2016, section 477A.10, is amended to read:


477A.10 NATURAL RESOURCES LAND PAYMENTS IN LIEU; PURPOSE.

The purposes of sections 477A.11 to 477A.14 are:

(1) to compensate local units of government for the loss of tax base from state ownership
of landnew text begin, except land acquired on or after July 1, 2017, receiving trust fund payments from
the outdoor heritage trust fund payment account or the environment and natural resources
trust fund payment account,
new text end and the need to provide services for state land;

(2) to address the disproportionate impact of state land ownership on local units of
government with a large proportion of state land; and

(3) to address the need to manage state lands held in trust for the local taxing districts.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 12.

Minnesota Statutes 2016, section 477A.11, is amended by adding a subdivision
to read:


new text begin Subd. 9. new text end

new text begin Environment and natural resources trust fund lands. new text end

new text begin Notwithstanding any
other provision of law to the contrary, parcels or portions of parcels of land purchased after
July 1, 2017, and eligible for a trust fund payment under section 116P.045 are not included
in the definitions of the lands described in subdivisions 3 to 7 and are excluded from
payments under sections 477A.11 to 477A.14.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with aids payable in 2018.
new text end

Sec. 13.

Minnesota Statutes 2016, section 477A.11, is amended by adding a subdivision
to read:


new text begin Subd. 10. new text end

new text begin Outdoor heritage lands. new text end

new text begin Notwithstanding any other provision of law to the
contrary, parcels or portions of parcels of land purchased after July 1, 2017, and eligible
for a trust fund payment under section 97A.056, subdivision 1b, are not included in the
definitions of the lands described in subdivisions 3 to 7 and are excluded from payments
under sections 477A.11 to 477A.14.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with aids payable in 2018.
new text end

Sec. 14.

new text begin [477A.30] ANNUAL COUNTY JOINT TRUST FUND WITHDRAWALS
AND DISTRIBUTION FOR ENVIRONMENT AND NATURAL RESOURCES
TRUST FUND LANDS AND OUTDOOR HERITAGE LANDS.
new text end

new text begin Subdivision 1. new text end

new text begin Commissioner of revenue; withdrawals and payments. new text end

new text begin No later than
November 15 each year, the commissioner of revenue shall make a withdrawal on behalf
of all eligible counties from the county joint trust fund account established under section
11A.237 equal to the lesser of (1) the total amount of necessary withdrawals certified by
the counties under subdivision 2 for the year, or (2) 5-1/2 percent of the amount in that
account as of September 1 of that year as determined by the executive director of the State
Board of Investment. The commissioner shall distribute the certified withdrawal amounts
to each county by November 31. If the amount of the withdrawal is less than the total
certified withdrawal amounts under subdivision 2, the commissioner shall reduce the
distribution to each county proportionately.
new text end

new text begin Subd. 2. new text end

new text begin Certification of needed withdrawal; distribution of funds. new text end

new text begin (a) Beginning in
calendar year 2018, by September 1 each year, a county for whom a trust fund payment has
been made on its behalf under section 97A.056, subdivision 1b, or 116P.045, subdivision
2, shall calculate and certify to the commissioner of revenue the amount of trust fund
withdrawals needed under this section. The amount of the withdrawal for each parcel of
land for which a county received a trust fund payment under either provision is as follows:
new text end

new text begin (1) for the year in which a trust fund payment is made to a county for a parcel of land,
the withdrawal for that parcel is equal to:
new text end

new text begin (i) the remaining taxes owed to the local governments providing land-related services
for taxes spread that year for a parcel acquired between January 1 and June 30; or
new text end

new text begin (ii) the amount of taxes paid to the local governments providing land-related services
on the parcel in the previous year if the parcel was acquired before January 1 of the current
year. The county must distribute the amount by December 15 to all local governments
providing land-related services based on the location of the parcel and the local governments'
share of the total tax; and
new text end

new text begin (2) for all subsequent years, the withdrawal for a parcel is equal to the taxes that would
be owed based on the appraised value of the land and the taxes assessed by local governments
providing land-related services on comparable, privately owned adjacent land. For purposes
of this subdivision, "appraised value" is determined in the manner described in section
477A.12, subdivision 3. The county treasurer must allocate the withdrawn funds among the
local governments providing land-related services on the same basis as if the funds were
taxes on the land received in that year. The county treasurer must pay the allocation to all
eligible local governments by December 15 of the year in which the withdrawal is made.
The county's share of the payment must be deposited in the county general fund.
new text end

new text begin (b) If the distribution to a county under subdivision 1 is less than its total withdrawal
amounts certified under this subdivision, all distributions under paragraph (a) are reduced
proportionately.
new text end

new text begin (c) The local governments receiving a payment under this section must use the money
to fund land-related services. For purposes of this paragraph, "land-related services" means
services used to restore, enhance, and protect the land and its fish and wildlife habitat and
provide any other public services benefiting the land and users of the land, including access
and services to the public accessing and using the land and direct and indirect capital and
operating costs for (1) roads, bridges, and trails; (2) public safety and emergency response
services; (3) environmental, recreational, and resource development and management; and
(4) similar costs.
new text end

new text begin (d) For purposes of this subdivision, "local governments providing land-related services"
has the meaning given in section 116P.02, subdivision 4c.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018, and applies to land
acquired with money appropriated on or after July 1, 2017.
new text end