SF 3954

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/15/2022 08:56am

A bill for an act
relating to taxation; property; creating the Small Schools and Cooperative Facilities
Grant Act; authorizing facility grants to isolated small school districts; establishing
an account in the special revenue fund for certain grants; modifying school district
property tax bases; providing that school district bonded debt authorizations
approved after June 30, 2025, be levied against referendum market value; enhancing
the debt service equalization aid program; appropriating money; amending
Minnesota Statutes 2020, sections 123A.44; 123A.441; 123A.442; 123A.443;
123B.53, subdivisions 1, 4, 5, 6, by adding subdivisions; 123B.55; 126C.01,
subdivision 3; 275.61; proposing coding for new law in Minnesota Statutes, chapter
123A.

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

Section 1.

Minnesota Statutes 2020, section 123A.44, is amended to read:

123A.44 CITATION.

Sections 123A.441 to deleted text begin 123A.445 deleted text end new text begin 123A.447 new text end may be cited as the " new text begin Small Schools and
new text end Cooperative Facilities Grant Act."

Sec. 2.

Minnesota Statutes 2020, section 123A.441, is amended to read:

123A.441 POLICY AND PURPOSE.

deleted text begin Because of the rates of decline in school-aged population, population shifts and economic
changes that the state has experienced in recent years and anticipates in future years, and
because in some instances local districts have not, and will deleted text end new text begin (a) The purpose of the Small
Schools and Cooperative Facilities Grant Act is to encourage and reward efficient use of
school facilities and provide state assistance to school districts that may new text end not be able to
provide the required construction funds through local property taxes deleted text begin , the purpose of the
cooperative facilities deleted text end new text begin . This new text end grant program deleted text begin is to provide an incentive to encourage cooperation
in making available to all students those educational programs, services and facilities that
are most efficiently and effectively provided by a deleted text end new text begin supports facility needs for isolated small
school districts and new text end cooperative deleted text begin effort deleted text end new text begin facility needs new text end of school districts.

new text begin (b) new text end The policy and purpose of sections 123A.442 to deleted text begin 123A.445 deleted text end new text begin 123A.447 new text end is to use new text begin state
appropriations and new text end the credit of the state, to a limited degree, to provide grants to cooperating
groups of districts new text begin and isolated small school districts new text end to improve and expand the educational
opportunities and facilities available to their students.

Sec. 3.

Minnesota Statutes 2020, section 123A.442, is amended to read:

123A.442 APPROVAL AUTHORITY; APPLICATION FORMS.

Subdivision 1.

Approval by commissioner.

To the extent money is available, the
commissioner may approve projects from applications submitted under section 123A.443.
The grant money must be used only to acquire, construct, remodel or improve the building
or site of a cooperative facility new text begin or isolated small school district new text end under contracts to be entered
into within 15 months after the date on which each grant is awarded.

Subd. 2.

Cooperation and consolidation.

deleted text begin Districts that have deleted text end new text begin A cooperating district that
has new text end not already consolidated and deleted text begin receive deleted text end new text begin receives new text end a cooperative facilities grant shall:

(1) submit a consolidation plan under section 123A.48 for approval by the Department
of Education; and

(2) hold a referendum on the question of consolidation no later than four years after a
grant is awarded under subdivision 1.

The districts are eligible for consolidation revenue under section 123A.485.

new text begin Subd. 2a. new text end

new text begin Isolated small school districts. new text end

new text begin (a) "Isolated small school district" means a
district:
new text end

new text begin (1) that qualifies for operating sparsity revenue under section 126C.10;
new text end

new text begin (2) that serves fewer than 500 pupils in average daily membership; and
new text end

new text begin (3) where at least 50 percent of the estimated market value of all taxable property for
the second prior year is classified as class 2 under section 273.13, subdivision 23.
new text end

new text begin (b) An isolated small school district may submit an application to the commissioner for
a facilities grant. The application must:
new text end

new text begin (1) demonstrate to the commissioner's satisfaction that the small school has facility
needs; and
new text end

new text begin (2) document the characteristics that prevent the district from funding the total proposed
building costs through the debt service equalization aid program.
new text end

Subd. 3.

Consolidated districts.

A school district that has consolidated with another
school district since July 1, 1980, is eligible for a new text begin small schools and new text end cooperative facilities
grant.

Sec. 4.

Minnesota Statutes 2020, section 123A.443, is amended to read:

123A.443 GRANT APPLICATION PROCESS.

Subdivision 1.

Qualification.

Any group of districts or a consolidated district that meets
the criteria required under subdivision 2 new text begin or isolated small school under section 123A.442,
subdivision 2a, new text end may apply for an incentive grant for construction of a new facility or for
remodeling and improving an existing facility. A grant for new construction must not exceed
the lesser of $20,000,000, or 75 percent of the approved construction costs of deleted text begin a cooperative deleted text end new text begin
the new text end education facility. A grant for remodeling and improving an existing facility must not
exceed the lesser of $10,000,000, or 75 percent of the approved remodeling costs.

Subd. 2.

Review by commissioner.

(a) A deleted text begin group of districts or a consolidated deleted text end new text begin qualifying new text end
district new text begin or group of districts new text end that submits an application for a grant must submit a proposal
to the commissioner for review and comment under section 123B.71. The commissioner
shall prepare a review and comment on the proposed facility by July 1 of an odd-numbered
year, regardless of the amount of the capital expenditure required to acquire, construct,
remodel or improve the facility. The commissioner shall not approve an application for an
incentive grant for any facility unless the facility receives a favorable review and comment
under section 123B.71 and the following criteria are met:

(1) the applicant new text begin is an isolated small school or new text end is a consolidated district or a minimum
of two or more districts that have entered into a joint powers agreement;

(2) for a group of districts, a joint powers board representing all participating districts
is established under section 471.59 to govern the cooperative facility;

(3) for a group of districts, no more than one superintendent is employed by the joint
powers board as a result of the cooperative facility agreement;

(4) a statement of need is submitted, that may include reasons why the current facilities
are inadequate, unsafe, or inaccessible to persons with disabilities;

(5) an educational plan is prepared, that includes input from both community and
professional staff;

(6) for a group of districts, a combined seniority list for all participating districts is
developed by the joint powers board;

(7) for a group of districts, an education program is developed that provides for more
learning opportunities and course offerings, including the offering of advanced placement
courses, for students than is currently available in any single member district;

(8) a plan is developed for providing instruction of any resident students in other districts
when distance to the education facility makes attendance at the facility unreasonably difficult
or impractical; and

(9) for a secondary facility, the joint powers board established under clause (2) discusses
with technical colleges located in the area how vocational education space in the cooperative
facility could be jointly used for secondary and postsecondary purposes.

(b) To the extent possible, the joint powers board is encouraged to provide for severance
pay or for early retirement incentives under section 122A.48, for any teacher or administrator,
as defined under section 122A.40, subdivision 1, who is placed on unrequested leave as a
result of the cooperative facility agreement.

(c) For the purpose of paragraph (a), clause (6), each district must be considered to have
started school each year on the same date.

(d) The districts may develop a plan that provides for the location of social service,
health, and other programs serving pupils and community residents within the cooperative
facility. The commissioner shall consider this plan when preparing a review and comment
on the proposed facility.

(e) The districts must schedule and conduct a meeting on library services. The school
districts, in cooperation with the regional public library system and its appropriate member
libraries, must discuss the possibility of including jointly operated library services at the
cooperative facility.

(f) The board of a district that has reorganized under section 123A.37 or 123A.48 and
that is applying for a grant for remodeling or improving an existing facility may act in the
place of a joint powers board to meet the criteria of this subdivision.

Subd. 3.

Reorganizing districts.

A district that is a member of a joint powers board
established under subdivision 2 and that is planning to reorganize under section 123A.45,
123A.46, or 123A.48 must notify the joint powers board one year in advance of the effective
date of the reorganization. Notwithstanding section 471.59 or any other law to the contrary,
the board of a district that reorganizes under section 123A.45, 123A.46, or 123A.48 may
appoint representatives to the joint powers board who will serve on the joint powers board
for two years after the effective date of the reorganization if authorized in the agreement
establishing the joint powers board to govern the cooperative facility. These representatives
shall have the same powers as representatives of any other school district under the joint
powers agreement.

Subd. 4.

District procedures.

A joint powers board of a district established under
subdivision 2 deleted text begin or deleted text end new text begin , new text end a school board of a reorganized district new text begin , or the school board of an isolated
small school district new text end that intends to apply for a grant must adopt a resolution stating the
proposed costs of the project, the purpose for which the costs are to be incurred, and an
estimate of the dates when the facilities for which the grant is requested will be contracted
for and completed. Applications for the state grants must be accompanied by deleted text begin (a) deleted text end new text begin (1) new text end a copy
of the resolution, deleted text begin (b) deleted text end new text begin (2) new text end a certificate by the clerk and treasurer of the joint powers board new text begin or
school board new text end showing the current outstanding indebtedness of each member district, and
deleted text begin (c) deleted text end new text begin (3) new text end a certificate by the county auditor of each county in which a portion of the joint
powers district lies showing the information in the auditor's official records that is required
to be used in computing the debt limit of the district under section 475.53, subdivision 4.
The clerk's and treasurer's certificate must show, as to each outstanding bond issue of each
member district new text begin or isolated small school district new text end , the amount originally issued, the purpose
for which issued, the date of issue, the amount remaining unpaid as of the date of the
resolution, and the interest rates and due dates and amounts of principal thereon. Applications
and necessary data must be in the form prescribed by the commissioner. Applications must
be received by the commissioner by September 1 of an odd-numbered year. When an
application is received, the commissioner shall obtain from the commissioner of revenue,
and from the Public Utilities Commission when required, the information in their official
records that is required to be used in computing the debt limit of the joint powers district
under section 475.53, subdivision 4.

Subd. 5.

Award of grants.

new text begin (a) new text end By November 1 of the odd-numbered year, the
commissioner shall examine and consider all applications for grants, and if any district is
found not qualified, the commissioner shall promptly notify that board.

new text begin (b) new text end A grant award is subject to verification by the district as specified in subdivision 8.
A grant award for a new facility must not be made until the site of the facility has been
determined. new text begin For a group of cooperating school districts, new text end a grant award to remodel or improve
an existing facility must not be made until the new text begin cooperating new text end districts have reorganized. If the
total amount of the approved applications exceeds the amount that is or can be made
available, the commissioner shall first award grants to new text begin cooperating or consolidating school new text end
districts that will close at least one existing school building, and then, to the extent funds
remain, allot the available amount equally between any other approved applicant districts.
The commissioner shall promptly certify to each qualified district the amount, if any, of the
grant awarded to it.

Subd. 6.

Collocation grant.

A group of districts that receives a grant for a new facility
under subdivision 4 is also eligible to receive an additional grant in the amount of $1,000,000.
To receive the additional grant, the group of districts must develop a plan under subdivision
2, paragraph (d), that provides for the location of a significant number of noneducational
student and community service programs within the cooperative facility.

Subd. 7.

Referendum; bond issue.

Within 180 days after being awarded a grant for a
new facility under subdivision 5, the joint powers board new text begin or board of the isolated small school
district new text end must submit the question of authorizing the borrowing of funds for the facility to
the voters of the joint powers district new text begin or isolated small school district new text end at a special election,
which may be held in conjunction with the general election of the school board members
of the member districts. The question submitted must state the total amount of funding
needed from all sources. A majority of those voting in the affirmative on the question is
sufficient to authorize the joint powers board new text begin or school board new text end to accept the grant and to
issue the bonds on public sale according to chapter 475. The clerk of the joint powers board
new text begin or school district new text end must certify the vote of the bond election to the commissioner. If the
question is approved by the voters, the commissioner shall notify the approved applicant
districts that the grant amount certified under subdivision 5 is available and appropriated
for payment under this subdivision. If a majority of those voting on the question do not vote
in the affirmative, the grant must be canceled.

Subd. 8.

Contract.

Each grant must be evidenced by a contract between the board and
the state acting through the commissioner. The contract obligates the state to pay to the
board an amount computed according to subdivision 5, and according to a schedule, and
terms and conditions acceptable to the commissioner of management and budget.

Subd. 9.

Consolidation.

A group of districts that operates a cooperative facility that was
acquired, constructed, remodeled, or improved under this section and implements
consolidation proceedings according to section 123A.48, may propose a temporary school
board structure in the petition or resolution required under section 123A.48, subdivision 2.
The districts may propose the number of existing school board members of each district to
become members of the board of the consolidated district and a method to gradually reduce
the membership to six or seven. The proposal must be approved, disapproved, or modified
by the commissioner. The election requirements of section 123A.48, subdivision 20, do not
apply to a proposal approved by the state board. Elections conducted after the effective date
of the consolidation are subject to the Minnesota Election Law.

Sec. 5.

new text begin [123A.447] SMALL SCHOOLS AND COOPERATING FACILITIES GRANT
FUNDS; ACCOUNT CREATED.
new text end

new text begin Subdivision 1. new text end

new text begin Fund created. new text end

new text begin A small schools and cooperating school district facilities
account is created in the special revenue fund. The state aid received under subdivision 2
and any state bond proceeds received under subdivision 3 must be deposited in this account.
new text end

new text begin Subd. 2. new text end

new text begin Annual replacement aid. new text end

new text begin Beginning in fiscal year 2024, $2,000,000 is annually
appropriated from the general fund to the small schools and cooperating school district
facilities account in the special revenue fund.
new text end

new text begin Subd. 3. new text end

new text begin State bond authorization. new text end

new text begin To provide money for the grant program, the
commissioner of management and budget shall deposit in the small schools and cooperating
school district facilities account the proceeds of any bonds issued and sold by the state
specifically designated for that purpose.
new text end

new text begin Subd. 4. new text end

new text begin Grants made; appropriation. new text end

new text begin On July 1 of each year, the balance in the small
schools and cooperating facilities grant account in the special revenue fund is appropriated
to the commissioner of education for small schools and cooperating school district facilities
grants. On June 30 of each year, any money appropriated under this section but not yet
distributed to a school district cancels to the small schools and cooperating facilities grant
account in the special revenue fund.
new text end

Sec. 6.

Minnesota Statutes 2020, section 123B.53, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For purposes of this section, the new text begin total new text end eligible debt service
revenue of a district is defined as follows:

(1) 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
for eligible projects according to subdivision 2, excluding the amounts listed in paragraph
(b), minus

(2) the amount of debt service excess levy reduction for that school year calculated
according to the procedure established by the commissioner.

(b) The obligations in this paragraph are excluded from eligible debt service revenue:

(1) obligations under section 123B.61;

(2) the part of debt service principal and interest paid from the taconite environmental
protection fund or Douglas J. Johnson economic protection trust, excluding the portion of
taconite payments from the Iron Range school consolidation and cooperatively operated
school account under section 298.28, subdivision 7a;

(3) obligations for long-term facilities maintenance under section 123B.595;

(4) obligations under section 123B.62; and

(5) obligations equalized under section 123B.535.

(c) For purposes of this section, if a preexisting school district reorganized under sections
123A.35 to 123A.43, 123A.46, and 123A.48 is solely responsible for retirement of the
preexisting district's bonded indebtedness or capital loans, debt service equalization aid
must be computed separately for each of the preexisting districts.

(d) 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.

new text begin (e) For purposes of this section, the "net tax capacity eligible debt service revenue" of
a district means the total eligible debt service revenue of a district excluding any amount
needed to meet the principal and interest payment obligations of the district for projects
approved after June 30, 2025.
new text end

new text begin (f) For purposes of this section, "referendum market value eligible debt service revenue"
equals the difference between total eligible debt service revenue and net tax capacity eligible
debt service revenue.
new text end

new text begin (g) For purposes of this section, "referendum market value debt service levy" equals the
district's total eligible debt service revenue less the sum of its:
new text end

new text begin (1) net tax capacity debt service levy under section 123B.55, paragraph (b);
new text end

new text begin (2) net tax capacity debt service equalization aid; and
new text end

new text begin (3) actual referendum market value debt service equalization aid.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2026.
new text end

Sec. 7.

Minnesota Statutes 2020, section 123B.53, subdivision 4, is amended to read:

Subd. 4.

new text begin Net tax capacity new text end debt service equalization revenue.

(a) The new text begin net tax capacity
new text end debt service equalization revenue of a district equals the sum of the first tier new text begin net tax capacity
new text end debt service equalization revenue and the second tier new text begin net tax capacity new text end debt service
equalization revenue.

(b) The first tier new text begin net tax capacity new text end debt service equalization revenue of a district equals
the greater of zero or the eligible new text begin net tax capacity new text end debt service revenue minus the amount
raised by a levy of 15.74 percent times the adjusted net tax capacity of the district minus
the second tier new text begin net tax capacity new text end debt service equalization revenue of the district.

(c) The second tier new text begin net tax capacity new text end debt service equalization revenue of a district equals
the greater of zero or the eligible new text begin net tax capacity new text end debt service revenue, minus the amount
raised by a levy of 26.24 percent times the adjusted net tax capacity of the district.

(d) Notwithstanding paragraphs (b) and (c), for a district with a capital loan under sections
126C.60 to 126C.72, the first tier new text begin net tax capacity new text end debt equalization revenue equals zero,
and the second tier new text begin net tax capacity new text end debt equalization revenue equals the portion of the
district's eligible debt service levy under subdivision 2 in excess of the district's maximum
effort debt service levy under section 126C.63, subdivision 8.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2026.
new text end

Sec. 8.

Minnesota Statutes 2020, section 123B.53, subdivision 5, is amended to read:

Subd. 5.

Equalized new text begin net tax capacity new text end debt service levy.

(a) The equalized new text begin net tax capacity
new text end debt service levy of a district equals the sum of the first tier equalized new text begin net tax capacity new text end debt
service levy and the second tier equalized new text begin net tax capacity new text end debt service levy.

(b) A district's first tier equalized new text begin net tax capacity new text end debt service levy equals the district's
first tier new text begin net tax capacity new 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) deleted text begin $3,400 in fiscal year 2016, $4,430 in fiscal year 2017, and deleted text end the greater of $4,430 or
55.33 percent of the initial equalizing factor in fiscal year 2018 and later.

(c) A district's second tier equalized new text begin net tax capacity new text end debt service levy equals the district's
second tier new text begin net tax capacity new 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) deleted text begin $8,000 in fiscal years 2016 and 2017, and deleted text end the greater of $8,000 or 100 percent of
the initial equalizing factor in fiscal year 2018 and later.

(d) For the purposes of this subdivision, the initial 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
all school districts in the state in the year before the year the levy is certified.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2026.
new text end

Sec. 9.

Minnesota Statutes 2020, section 123B.53, subdivision 6, is amended to read:

Subd. 6.

new text begin Net tax capacity new text end debt service equalization aid.

(a) A district's new text begin net tax capacity
new text end debt service equalization aid is the sum of the district's first tier new text begin net tax capacity new text end debt service
equalization aid and the district's second tier new text begin net tax capacity new text end debt service equalization aid.

(b) A district's first tier new text begin net tax capacity new text end debt service equalization aid equals the difference
between the district's first tier new text begin net tax capacity new text end debt service equalization revenue and the
district's first tier equalized new text begin net tax capacity new text end debt service levy.

(c) A district's second tier new text begin net tax capacity new text end debt service equalization aid equals the
difference between the district's second tier new text begin net tax capacity new text end debt service equalization revenue
and the district's second tier equalized new text begin net tax capacity new text end debt service levy.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2026.
new text end

Sec. 10.

Minnesota Statutes 2020, section 123B.53, is amended by adding a subdivision
to read:

new text begin Subd. 8. new text end

new text begin Initial referendum market value debt service equalization revenue. new text end

new text begin The
initial referendum market value debt service equalization revenue of a district equals the
greater of zero or the total eligible debt service revenue minus the amount raised by a levy
of 0.1574 percent times the referendum market value of the district.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2026.
new text end

Sec. 11.

Minnesota Statutes 2020, section 123B.53, is amended by adding a subdivision
to read:

new text begin Subd. 9. new text end

new text begin Equalized initial referendum market value debt service levy. new text end

new text begin The equalized
initial referendum market value debt service levy of a district equals the district's initial
referendum market value debt service equalization revenue times the lesser of one or the
ratio of:
new text end

new text begin (1) the quotient derived by dividing the referendum market value 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 before the year the levy is certified; to
new text end

new text begin (2) the quotient derived by dividing the total statewide referendum market value 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 all school districts in the state in the year before the year
the levy is certified.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2026.
new text end

Sec. 12.

Minnesota Statutes 2020, section 123B.53, is amended by adding a subdivision
to read:

new text begin Subd. 10. new text end

new text begin Initial referendum market value debt service equalization aid. new text end

new text begin A district's
initial referendum market value debt service equalization aid equals the difference between
the district's initial referendum market value debt service equalization revenue and the
district's equalized referendum market value debt service levy.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2026.
new text end

Sec. 13.

Minnesota Statutes 2020, section 123B.53, is amended by adding a subdivision
to read:

new text begin Subd. 11. new text end

new text begin Actual referendum market value aid. new text end

new text begin A district's actual referendum market
value debt service aid equals the district's initial referendum market value debt service
equalization aid less its net tax capacity debt service equalization aid, provided that the aid
may not be less than zero or greater than (1) one minus the ratio specified in subdivision 9,
times (2) the district's market value debt service revenue.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2026.
new text end

Sec. 14.

Minnesota Statutes 2020, section 123B.55, is amended to read:

123B.55 DEBT SERVICE LEVY.

new text begin (a) new text end A district may levy the amounts necessary to make payments for bonds issued and
for interest on them, including the bonds and interest on them, issued as authorized by
Minnesota Statutes 1974, section 275.125, subdivision 3, clause (7)(C); and the amounts
necessary for repayment of debt service loans and capital loans, minus the amount of debt
service equalization revenue of the district.

new text begin (b) Levies under this section for bonds authorized before July 1, 2025, must be levied
against the net tax capacity of the district, as defined under section 273.13, subdivision 21b.
new text end

new text begin (c) Levies under this section for bonds authorized after June 30, 2025, must be levied
against the referendum market value of the district, as defined under section 126C.01,
subdivision 3.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2026.
new text end

Sec. 15.

Minnesota Statutes 2020, section 126C.01, subdivision 3, is amended to read:

Subd. 3.

Referendum market value.

"Referendum market value" means the market
value of all taxable property, excluding property classified as class 2 deleted text begin , deleted text end new text begin or new text end 4c(4) deleted text begin , or 4c(12) deleted text end
under section 273.13. The portion of class 2a property consisting of the house, garage, and
surrounding one acre of land of an agricultural homestead is included in referendum market
value. For the purposes of this subdivision, in the case of class 1a, 1b, or 2a property, "market
value" means the value prior to the exclusion under section 273.13, subdivision 35. new text begin The
referendum market value of class 4c(12) property under section 273.13 is equal to 0.25
times taxable market value. The referendum market value of class 3a property under section
273.13 that is not in the first tier of market value as defined in section 273.13, subdivision
24, is 1.25 times taxable market value. new text end Any class of property, or any portion of a class of
property, that is included in the definition of referendum market value and that has a
classification rate of less than one percent under section 273.13 shall have a referendum
market value equal to its market value times its classification rate, multiplied by 100.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2026.
new text end

Sec. 16.

Minnesota Statutes 2020, section 275.61, is amended to read:

275.61 VOTER-APPROVED LEVY; MARKET VALUE.

Subdivision 1.

Market value.

(a) For local governmental subdivisions other than school
districts, any levy approved by the voters at a general or special election shall be levied
against the referendum market value of all taxable property within the governmental
subdivision, as defined in section 126C.01, subdivision 3. Any levy amount subject to the
requirements of this section shall be certified separately to the county auditor under section
275.07.

(b) The ballot shall state the maximum amount of the increased levy as a percentage of
market value and the amount that will be raised by the new referendum tax rate in the first
year it is to be levied.

(c) This subdivision does not apply to tax levies for the payment of debt obligations that
are approved by the voters after June 30, 2008 new text begin , and before July 1, 2025 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025.
new text end