Minnesota Legislature
SF 3674
as introduced - 90th Legislature (2017 - 2018) Posted on 03/22/2018 09:52am
Current Version - as introduced
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A bill for an act
relating to education finance; broadening the natural disaster debt service
equalization aid program to assist school districts with a high percentage of property
excluded from the tax rolls; appropriating money; amending Minnesota Statutes
2016, sections 123B.535; 127A.49.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2016, section 123B.535, is amended to read:
123B.535 deleted text begin NATURAL DISASTERdeleted text end new text begin ENHANCEDnew text end DEBT SERVICE
EQUALIZATION.
Subdivision 1.
Definitions.
(a) For purposes of this section, the eligible deleted text begin natural disasterdeleted text end new text begin
enhancednew text end debt service revenue of a district is defined as the amount needed to produce
between five and six percent in excess of the amount needed to meet when due the principal
and interest payments on the obligations of the district that would otherwise qualify under
section 123B.53 under the deleted text begin followingdeleted text end conditionsdeleted text begin :deleted text end new text begin specified in paragraphs (b) and (c).
new text end
new text begin
(b) A school district qualifies for enhanced debt service equalization aid if:
new text end
(1) the district was impacted by a natural disaster event or area occurring January 1,
2005, or later, as declared by the President of the United States of America, which is eligible
for Federal Emergency Management Agency payments;
(2) the natural disaster caused $500,000 or more in damages to school district buildings;
and
(3) the repair and replacement costs are not covered by insurance payments or Federal
Emergency Management Agency payments.
new text begin
(c) A school district also qualifies for enhanced debt service equalization aid if at least
30 percent of a district's property value is excluded from the district's taxable value.
new text end
deleted text begin (b)deleted text end new text begin (d)new text end For purposes of this section, the adjusted net tax capacity equalizing factor equals
the quotient derived by dividing the total adjusted net tax capacity of all school districts in
the state for the year before the year the levy is certified by the total number of adjusted
pupil units in the state for the year prior to the year the levy is certified.
deleted text begin (c)deleted text end new text begin (e)new text end For purposes of this section, the adjusted net tax capacity determined according
to sections 127A.48 and 273.1325 shall be adjusted to include the tax capacity of property
generally exempted from ad valorem taxes under section 272.02, subdivision 64.
Subd. 2.
Notification.
A district eligible for deleted text begin natural disasterdeleted text end new text begin enhancednew text end debt service
equalization revenue under subdivision 1 must notify the commissioner of the amount of
its intended deleted text begin natural disasterdeleted text end new text begin enhancednew text end debt service revenue calculated under subdivision 1
for all bonds sold prior to the notification by July 1 of the calendar year the levy is certified.
Subd. 3.
deleted text begin Natural disasterdeleted text end new text begin Enhancednew text end debt service equalization revenue.
The debt
service equalization revenue of a district equals the greater of zero or the eligible debt service
revenue, minus the greater of zero or the difference between:
(1) the amount raised by a levy of ten percent times the adjusted net tax capacity of the
district; and
(2) the district's eligible debt service revenue under section 123B.53.
Subd. 4.
Equalized deleted text begin natural disasterdeleted text end new text begin enhancednew text end debt service levy.
A district's equalized
deleted text begin natural disasterdeleted text end new text begin enhancednew text end debt service levy equals the district's deleted text begin natural disasterdeleted text end new text begin enhancednew text end
debt service equalization revenue times the lesser of one or the ratio of:
(1) the quotient derived by dividing the adjusted net tax capacity of the district for the
year before the year the levy is certified by the adjusted pupil units in the district for the
school year ending in the year prior to the year the levy is certified; to
(2) 300 percent of the statewide adjusted net tax capacity equalizing factor.
Subd. 5.
deleted text begin Natural disasterdeleted text end new text begin Enhancednew text end debt service equalization aid.
A district's deleted text begin natural
disasterdeleted text end new text begin enhancednew text end debt service equalization aid equals the difference between the district's
deleted text begin natural disasterdeleted text end new text begin enhancednew text end debt service equalization revenue and the district's equalized
deleted text begin natural disasterdeleted text end new text begin enhancednew text end debt service levy.
Subd. 6.
deleted text begin Natural disasterdeleted text end new text begin Enhancednew text end debt service equalization aid payment schedule.
Debt service equalization aid must be paid according to section 127A.45, subdivision 10.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for bond issues approved on or after July
1, 2018, whichever comes first.
new text end
Sec. 2.
Minnesota Statutes 2016, section 127A.49, is amended to read:
127A.49 AID ADJUSTMENTS.
Subdivision 1.
Omissions.
No adjustments to any aid payments made pursuant to this
chapter or chapters 120B, 122A, 123A, 123B, 124D, 124E, 125A, and 126C resulting from
omissions in district reports, except those adjustments determined by the legislative auditor,
shall be made for any school year after December 15 of the next school year, unless otherwise
specifically provided by law.
Subd. 2.
Abatements.
Whenever by virtue of chapter 278, sections 270C.86, 375.192,
or otherwise, the net tax capacity or referendum market value of any district for any taxable
year is changed after the taxes for that year have been spread by the county auditor and the
local tax rate as determined by the county auditor based upon the original net tax capacity
is applied upon the changed net tax capacities, the county auditor shall, prior to February
1 of each year, certify to the commissioner of education the amount of any resulting net
revenue loss that accrued to the district during the preceding year. Each year, the
commissioner shall pay an abatement adjustment to the district in an amount calculated
according to the provisions of this subdivision. This amount shall be deducted from the
amount of the levy authorized by section 126C.46. The amount of the abatement adjustment
must be the product of:
(1) the net revenue loss as certified by the county auditor, times
(2) the ratio of:
(i) the sum of the amounts of the district's certified levy in the third preceding year
according to the following:
deleted text begin
(A) section 123B.57, if the district received health and safety aid according to that section
for the second preceding year;
deleted text end
deleted text begin (B)deleted text end new text begin (A)new text end section 124D.20, if the district received aid for community education programs
according to that section for the second preceding year;
deleted text begin (C)deleted text end new text begin (B)new text end section 124D.135, subdivision 3, if the district received early childhood family
education aid according to section 124D.135 for the second preceding year;
deleted text begin (D)deleted text end new text begin (C)new text end section 126C.17, subdivision 6, if the district received referendum equalization
aid according to that section for the second preceding year;
deleted text begin (E)deleted text end new text begin (D)new text end section 126C.10, subdivision 13a, if the district received operating capital aid
according to section 126C.10, subdivision 13b, in the second preceding year;
deleted text begin (F)deleted text end new text begin (E)new text end section 126C.10, subdivision 29, if the district received equity aid according to
section 126C.10, subdivision 30, in the second preceding year;
deleted text begin (G)deleted text end new text begin (F)new text end section 126C.10, subdivision 32, if the district received transition aid according
to section 126C.10, subdivision 33, in the second preceding year;
deleted text begin (H)deleted text end new text begin (G)new text end section 123B.53, subdivision 5, if the district received debt service equalization
aid according to section 123B.53, subdivision 6, in the second preceding year;
deleted text begin (I)deleted text end new text begin (H)new text end section 123B.535, subdivision 4, if the district received deleted text begin natural disasterdeleted text end new text begin enhancednew text end
debt service equalization aid according to section 123B.535, subdivision 5, in the second
preceding year;
deleted text begin (J)deleted text end new text begin (I)new text end section 124D.22, subdivision 3, if the district received school-age care aid
according to section 124D.22, subdivision 4, in the second preceding year;new text begin and
new text end
deleted text begin
(K) section 123B.591, subdivision 3, if the district received deferred maintenance aid
according to section 123B.591, subdivision 4, in the second preceding year; and
deleted text end
deleted text begin (L)deleted text end new text begin (J)new text end section 122A.415, subdivision 5, if the district received alternative teacher
compensation equalization aid according to section 122A.415, subdivision 6, paragraph (a),
in the second preceding year; to
(ii) the total amount of the district's certified levy in the third preceding December, plus
or minus auditor's adjustments.
Subd. 3.
Excess tax increment.
(a) If a return of excess tax increment is made to a
district pursuant to sections 469.176, subdivision 2, and 469.177, subdivision 9, or upon
decertification of a tax increment district, the school district's aid and levy limitations must
be adjusted for the fiscal year in which the excess tax increment is paid under the provisions
of this subdivision.
(b) An amount must be subtracted from the district's aid for the current fiscal year equal
to the product of:
(1) the amount of the payment of excess tax increment to the district, times
(2) the ratio of:
(i) the sum of the amounts of the district's certified levy for the fiscal year in which the
excess tax increment is paid according to the following:
deleted text begin
(A) section 123B.57, if the district received health and safety aid according to that section
for the second preceding year;
deleted text end
deleted text begin (B)deleted text end new text begin (A)new text end section 124D.20, if the district received aid for community education programs
according to that section for the second preceding year;
deleted text begin (C)deleted text end new text begin (B)new text end section 124D.135, subdivision 3, if the district received early childhood family
education aid according to section 124D.135 for the second preceding year;
deleted text begin (D)deleted text end new text begin (C)new text end section 126C.17, subdivision 6, if the district received referendum equalization
aid according to that section for the second preceding year;
deleted text begin (E)deleted text end new text begin (D)new text end section 126C.10, subdivision 13a, if the district received operating capital aid
according to section 126C.10, subdivision 13b, in the second preceding year;
deleted text begin (F)deleted text end new text begin (E)new text end section 126C.10, subdivision 29, if the district received equity aid according to
section 126C.10, subdivision 30, in the second preceding year;
deleted text begin (G)deleted text end new text begin (F)new text end section 126C.10, subdivision 32, if the district received transition aid according
to section 126C.10, subdivision 33, in the second preceding year;
deleted text begin (H)deleted text end new text begin (G)new text end section 123B.53, subdivision 5, if the district received debt service equalization
aid according to section 123B.53, subdivision 6, in the second preceding year;
deleted text begin (I)deleted text end new text begin (H)new text end section 123B.535, subdivision 4, if the district received deleted text begin natural disasterdeleted text end new text begin enhancednew text end
debt service equalization aid according to section 123B.535, subdivision 5, in the second
preceding year;
deleted text begin (J)deleted text end new text begin (I)new text end section 124D.22, subdivision 3, if the district received school-age care aid
according to section 124D.22, subdivision 4, in the second preceding year;new text begin and
new text end
deleted text begin
(K) section 123B.591, subdivision 3, if the district received deferred maintenance aid
according to section 123B.591, subdivision 4, in the second preceding year; and
deleted text end
deleted text begin (L)deleted text end new text begin (J)new text end section 122A.415, subdivision 5, if the district received alternative teacher
compensation equalization aid according to section 122A.415, subdivision 6, paragraph (a),
in the second preceding year; to
(ii) the total amount of the district's certified levy for the fiscal year, plus or minus
auditor's adjustments.
(c) An amount must be subtracted from the school district's levy limitation for the next
levy certified equal to the difference between:
(1) the amount of the distribution of excess increment; and
(2) the amount subtracted from aid pursuant to clause (a).
If the aid and levy reductions required by this subdivision cannot be made to the aid for
the fiscal year specified or to the levy specified, the reductions must be made from aid for
subsequent fiscal years, and from subsequent levies. The school district must use the payment
of excess tax increment to replace the aid and levy revenue reduced under this subdivision.
(d) This subdivision applies only to the total amount of excess increments received by
a district for a calendar year that exceeds $25,000.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for adjustments for fiscal year 2020 and
later.
new text end