HF 921

as introduced - 94th Legislature (2025 - 2026) Posted on 03/13/2025 04:24pm

A bill for an act
relating to education finance; clarifying the aid and levy adjustments when a tax
increment finance excess is received by a school district; amending Minnesota
Statutes 2024, section 127A.49, subdivision 3.

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

Section 1.

Minnesota Statutes 2024, section 127A.49, subdivision 3, is amended to read:

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 in the preceding
year, 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:

(A) section deleted text begin 123B.57 deleted text end new text begin 123B.595 new text end , if the district received deleted text begin health and safety deleted text end new text begin long-term
facilities maintenance new text end aid according to that section for the second preceding year;

(B) section 124D.20, if the district received aid for community education programs
according to that section for the second preceding year;

(C) section 142D.11, subdivision 3, if the district received early childhood family
education aid according to section 142D.11 for the second preceding year;

(D) section 126C.17, subdivision 6, if the district received referendum equalization aid
according to that section for the second preceding year;

(E) section 126C.10, subdivision 13a, if the district received operating capital aid
according to section 126C.10, subdivision 13b, in the second preceding year;

(F) section 126C.10, subdivision 29, if the district received equity aid according to
section 126C.10, subdivision 30, in the second preceding year;

(G) section 126C.10, subdivision 32, if the district received transition aid according to
section 126C.10, subdivision 33, in the second preceding year;

(H) 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;

(I) section 123B.535, subdivision 4, if the district received natural disaster debt service
equalization aid according to section 123B.535, subdivision 5, in the second preceding year;

(J) 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; and

(K) 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 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.