SF 802

as introduced - 90th Legislature (2017 - 2018) Posted on 03/03/2017 09:29am

A bill for an act
relating to taxation; providing a school building bond agricultural property tax
credit; appropriating money; amending Minnesota Statutes 2016, sections 127A.45,
subdivisions 10, 13; 273.1392; 273.1393; 275.065, subdivision 3; 275.07,
subdivision 2; 275.08, subdivision 1b; 276.04, subdivision 2; proposing coding
for new law in Minnesota Statutes, chapter 273.

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

Section 1.

Minnesota Statutes 2016, section 127A.45, subdivision 10, is amended to read:

Subd. 10.

Payments to school nonoperating funds.

Each fiscal year state general fund
payments for a district nonoperating fund must be made at the current year aid payment
percentage of the estimated entitlement during the fiscal year of the entitlement. This amount
shall be paid in deleted text begin 12 deleted text end new text begin six new text end equal monthly installments new text begin beginning in July new text end . The amount of the
actual entitlement, after adjustment for actual data, minus the payments made during the
fiscal year of the entitlement must be paid prior to October 31 of the following school year.
The commissioner may make advance payments of debt service equalization aid and
state-paid tax credits for a district's debt service fund earlier than would occur under the
preceding schedule if the district submits evidence showing a serious cash flow problem in
the fund. The commissioner may make earlier payments during the year and, if necessary,
increase the percent of the entitlement paid to reduce the cash flow problem.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with fiscal year 2019.
new text end

Sec. 2.

Minnesota Statutes 2016, section 127A.45, subdivision 13, is amended to read:

Subd. 13.

Aid payment percentage.

Except as provided in subdivisions new text begin 10, new text end 11, 12, 12a,
and 14, each fiscal year, all education aids and credits in this chapter and chapters 120A,
120B, 121A, 122A, 123A, 123B, 124D, 124E, 125A, 125B, 126C, 134, and section 273.1392,
shall be paid at the current year aid payment percentage of the estimated entitlement during
the fiscal year of the entitlement. For the purposes of this subdivision, a district's estimated
entitlement for special education aid under section 125A.76 for fiscal year 2014 and later
equals 97.4 percent of the district's entitlement for the current fiscal year. The final adjustment
payment, according to subdivision 9, must be the amount of the actual entitlement, after
adjustment for actual data, minus the payments made during the fiscal year of the entitlement.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with fiscal year 2019.
new text end

Sec. 3.

new text begin [273.1387] SCHOOL BUILDING BOND AGRICULTURAL CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Eligibility. new text end

new text begin All class 2a, 2b, and 2c property under section 273.13,
subdivision 23, other than property consisting of the house, garage, and immediately
surrounding one acre of land of an agricultural homestead, is eligible to receive the credit
under this section.
new text end

new text begin Subd. 2. new text end

new text begin Credit amount. new text end

new text begin For each qualifying property, the school building bond
agricultural credit is equal to 50 percent of the property's eligible net tax capacity multiplied
by the school debt tax rate determined under section 275.08, subdivision 1b.
new text end

new text begin Subd. 3. new text end

new text begin Credit reimbursements. new text end

new text begin The county auditor shall determine the tax reductions
allowed under this section within the county for each taxes payable year and shall certify
that amount to the commissioner of revenue as a part of the abstracts of tax lists submitted
under section 275.29. Any prior year adjustments shall also be certified on the abstracts of
tax lists. The commissioner shall review the certifications for accuracy, and may make such
changes as are deemed necessary, or return the certification to the county auditor for
correction. The credit under this section must be used to reduce the school district net tax
capacity-based property tax as provided in section 273.1393.
new text end

new text begin Subd. 4. new text end

new text begin Payment. new text end

new text begin The commissioner of revenue shall certify the total of the tax
reductions granted under this section for each taxes payable year within each school district
to the commissioner of education, who shall pay the reimbursement amounts to each school
district as provided in section 273.1392.
new text end

new text begin Subd. 5. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to make the payments required by this
section is annually appropriated from the general fund to the commissioner of education.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2016, section 273.1392, is amended to read:

273.1392 PAYMENT; SCHOOL DISTRICTS.

The amounts of bovine tuberculosis credit reimbursements under section 273.113;
conservation tax credits under section 273.119; disaster or emergency reimbursement under
sections 273.1231 to 273.1235; deleted text begin homestead and deleted text end agricultural credits under deleted text begin section deleted text end new text begin sections new text end
273.1384 new text begin and 273.1387 new text end ; aids and credits under section 273.1398; enterprise zone property
credit payments under section 469.171; and metropolitan agricultural preserve reduction
under section 473H.10 for school districts, shall be certified to the Department of Education
by the Department of Revenue. The amounts so certified shall be paid according to section
127A.45, subdivisions 9 new text begin , 10, new text end and 13.

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2016, section 273.1393, is amended to read:

273.1393 COMPUTATION OF NET PROPERTY TAXES.

Notwithstanding any other provisions to the contrary, "net" property taxes are determined
by subtracting the credits in the order listed from the gross tax:

(1) disaster credit as provided in sections 273.1231 to 273.1235;

(2) powerline credit as provided in section 273.42;

(3) agricultural preserves credit as provided in section 473H.10;

(4) enterprise zone credit as provided in section 469.171;

(5) disparity reduction credit;

(6) conservation tax credit as provided in section 273.119;

(7) new text begin the school bond credit as provided in section 273.1387;
new text end

new text begin (8) new text end agricultural credit as provided in section 273.1384;

deleted text begin (8) deleted text end new text begin (9) new text end taconite homestead credit as provided in section 273.135;

deleted text begin (9) deleted text end new text begin (10) new text end supplemental homestead credit as provided in section 273.1391; and

deleted text begin (10) deleted text end new text begin (11) new text end the bovine tuberculosis zone credit, as provided in section 273.113.

The combination of all property tax credits must not exceed the gross tax amount.

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2016, section 275.065, subdivision 3, is amended to read:

Subd. 3.

Notice of proposed property taxes.

(a) The county auditor shall prepare and
the county treasurer shall deliver after November 10 and on or before November 24 each
year, by first class mail to each taxpayer at the address listed on the county's current year's
assessment roll, a notice of proposed property taxes. Upon written request by the taxpayer,
the treasurer may send the notice in electronic form or by electronic mail instead of on paper
or by ordinary mail.

(b) The commissioner of revenue shall prescribe the form of the notice.

(c) The notice must inform taxpayers that it contains the amount of property taxes each
taxing authority proposes to collect for taxes payable the following year. In the case of a
town, or in the case of the state general tax, the final tax amount will be its proposed tax.
The notice must clearly state for each city that has a population over 500, county, school
district, regional library authority established under section 134.201, and metropolitan taxing
districts as defined in paragraph (i), the time and place of a meeting for each taxing authority
in which the budget and levy will be discussed and public input allowed, prior to the final
budget and levy determination. The taxing authorities must provide the county auditor with
the information to be included in the notice on or before the time it certifies its proposed
levy under subdivision 1. The public must be allowed to speak at that meeting, which must
occur after November 24 and must not be held before 6:00 p.m. It must provide a telephone
number for the taxing authority that taxpayers may call if they have questions related to the
notice and an address where comments will be received by mail, except that no notice
required under this section shall be interpreted as requiring the printing of a personal
telephone number or address as the contact information for a taxing authority. If a taxing
authority does not maintain public offices where telephone calls can be received by the
authority, the authority may inform the county of the lack of a public telephone number and
the county shall not list a telephone number for that taxing authority.

(d) The notice must state for each parcel:

(1) the market value of the property as determined under section 273.11, and used for
computing property taxes payable in the following year and for taxes payable in the current
year as each appears in the records of the county assessor on November 1 of the current
year; and, in the case of residential property, whether the property is classified as homestead
or nonhomestead. The notice must clearly inform taxpayers of the years to which the market
values apply and that the values are final values;

(2) the items listed below, shown separately by county, city or town, and state general
tax, agricultural homestead credit under section 273.1384, new text begin school building bond agricultural
credit under section 273.1387, new text end voter approved school levy, other local school levy, and the
sum of the special taxing districts, and as a total of all taxing authorities:

(i) the actual tax for taxes payable in the current year; and

(ii) the proposed tax amount.

If the county levy under clause (2) includes an amount for a lake improvement district
as defined under sections 103B.501 to 103B.581, the amount attributable for that purpose
must be separately stated from the remaining county levy amount.

In the case of a town or the state general tax, the final tax shall also be its proposed tax
unless the town changes its levy at a special town meeting under section 365.52. If a school
district has certified under section 126C.17, subdivision 9, that a referendum will be held
in the school district at the November general election, the county auditor must note next
to the school district's proposed amount that a referendum is pending and that, if approved
by the voters, the tax amount may be higher than shown on the notice. In the case of the
city of Minneapolis, the levy for Minneapolis Park and Recreation shall be listed separately
from the remaining amount of the city's levy. In the case of the city of St. Paul, the levy for
the St. Paul Library Agency must be listed separately from the remaining amount of the
city's levy. In the case of Ramsey County, any amount levied under section 134.07 may be
listed separately from the remaining amount of the county's levy. In the case of a parcel
where tax increment or the fiscal disparities areawide tax under chapter 276A or 473F
applies, the proposed tax levy on the captured value or the proposed tax levy on the tax
capacity subject to the areawide tax must each be stated separately and not included in the
sum of the special taxing districts; and

(3) the increase or decrease between the total taxes payable in the current year and the
total proposed taxes, expressed as a percentage.

For purposes of this section, the amount of the tax on homesteads qualifying under the
senior citizens' property tax deferral program under chapter 290B is the total amount of
property tax before subtraction of the deferred property tax amount.

(e) The notice must clearly state that the proposed or final taxes do not include the
following:

(1) special assessments;

(2) levies approved by the voters after the date the proposed taxes are certified, including
bond referenda and school district levy referenda;

(3) a levy limit increase approved by the voters by the first Tuesday after the first Monday
in November of the levy year as provided under section 275.73;

(4) amounts necessary to pay cleanup or other costs due to a natural disaster occurring
after the date the proposed taxes are certified;

(5) amounts necessary to pay tort judgments against the taxing authority that become
final after the date the proposed taxes are certified; and

(6) the contamination tax imposed on properties which received market value reductions
for contamination.

(f) Except as provided in subdivision 7, failure of the county auditor to prepare or the
county treasurer to deliver the notice as required in this section does not invalidate the
proposed or final tax levy or the taxes payable pursuant to the tax levy.

(g) If the notice the taxpayer receives under this section lists the property as
nonhomestead, and satisfactory documentation is provided to the county assessor by the
applicable deadline, and the property qualifies for the homestead classification in that
assessment year, the assessor shall reclassify the property to homestead for taxes payable
in the following year.

(h) In the case of class 4 residential property used as a residence for lease or rental
periods of 30 days or more, the taxpayer must either:

(1) mail or deliver a copy of the notice of proposed property taxes to each tenant, renter,
or lessee; or

(2) post a copy of the notice in a conspicuous place on the premises of the property.

The notice must be mailed or posted by the taxpayer by November 27 or within three
days of receipt of the notice, whichever is later. A taxpayer may notify the county treasurer
of the address of the taxpayer, agent, caretaker, or manager of the premises to which the
notice must be mailed in order to fulfill the requirements of this paragraph.

(i) For purposes of this subdivision and subdivision 6, "metropolitan special taxing
districts" means the following taxing districts in the seven-county metropolitan area that
levy a property tax for any of the specified purposes listed below:

(1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325, 473.446,
473.521, 473.547, or 473.834;

(2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672; and

(3) Metropolitan Mosquito Control Commission under section 473.711.

For purposes of this section, any levies made by the regional rail authorities in the county
of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 398A
shall be included with the appropriate county's levy.

(j) The governing body of a county, city, or school district may, with the consent of the
county board, include supplemental information with the statement of proposed property
taxes about the impact of state aid increases or decreases on property tax increases or
decreases and on the level of services provided in the affected jurisdiction. This supplemental
information may include information for the following year, the current year, and for as
many consecutive preceding years as deemed appropriate by the governing body of the
county, city, or school district. It may include only information regarding:

(1) the impact of inflation as measured by the implicit price deflator for state and local
government purchases;

(2) population growth and decline;

(3) state or federal government action; and

(4) other financial factors that affect the level of property taxation and local services
that the governing body of the county, city, or school district may deem appropriate to
include.

The information may be presented using tables, written narrative, and graphic
representations and may contain instruction toward further sources of information or
opportunity for comment.

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2016, section 275.07, subdivision 2, is amended to read:

Subd. 2.

School district deleted text begin in more than one county deleted text end new text begin levies; special requirements new text end .

new text begin (a) new text end In
school districts lying in more than one county, the clerk shall certify the tax levied to the
auditor of the county in which the administrative offices of the school district are located.

new text begin (b) The district must identify the portion of the school district levy that is levied for debt
service at the time the levy is certified under this section. For the purposes of this paragraph,
"levied for debt service" means levies authorized under sections 123B.53, 123B.535, and
123B.55, as adjusted by sections 126C.46 and 126C.48, net of any debt excess levy reductions
under section 475.61, subdivision 4, excluding debt service amounts necessary for repayment
of other postemployment benefits under section 475.52, subdivision 6.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2016, section 275.08, subdivision 1b, is amended to read:

Subd. 1b.

Computation of tax rates.

new text begin (a) new text end The amounts certified to be levied against net
tax capacity under section 275.07 by an individual local government unit shall be divided
by the total net tax capacity of all taxable properties within the local government unit's
taxing jurisdiction. The resulting ratio, the local government's local tax rate, multiplied by
each property's net tax capacity shall be each property's net tax capacity tax for that local
government unit before reduction by any credits.

new text begin (b) The auditor must also determine the school debt tax rate for each school district equal
to (1) the school debt service levy certified under section 275.07, subdivision 2, divided by
(2) the total net tax capacity of all taxable property within the district.
new text end

new text begin (c) new text end Any amount certified to the county auditor to be levied against market value shall
be divided by the total referendum market value of all taxable properties within the taxing
district. The resulting ratio, the taxing district's new referendum tax rate, multiplied by each
property's referendum market value shall be each property's new referendum tax before
reduction by any credits. For the purposes of this subdivision, "referendum market value"
means the market value as defined in section 126C.01, subdivision 3.

new text begin EFFECTIVE DATE. new text end

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

Sec. 9.

Minnesota Statutes 2016, section 276.04, subdivision 2, is amended to read:

Subd. 2.

Contents of tax statements.

(a) The treasurer shall provide for the printing of
the tax statements. The commissioner of revenue shall prescribe the form of the property
tax statement and its contents. The tax statement must not state or imply that property tax
credits are paid by the state of Minnesota. The statement must contain a tabulated statement
of the dollar amount due to each taxing authority and the amount of the state tax from the
parcel of real property for which a particular tax statement is prepared. The dollar amounts
attributable to the county, the state tax, the voter approved school tax, the other local school
tax, the township or municipality, and the total of the metropolitan special taxing districts
as defined in section 275.065, subdivision 3, paragraph (i), must be separately stated. The
amounts due all other special taxing districts, if any, may be aggregated except that any
levies made by the regional rail authorities in the county of Anoka, Carver, Dakota, Hennepin,
Ramsey, Scott, or Washington under chapter 398A shall be listed on a separate line directly
under the appropriate county's levy. If the county levy under this paragraph includes an
amount for a lake improvement district as defined under sections 103B.501 to 103B.581,
the amount attributable for that purpose must be separately stated from the remaining county
levy amount. In the case of Ramsey County, if the county levy under this paragraph includes
an amount for public library service under section 134.07, the amount attributable for that
purpose may be separated from the remaining county levy amount. The amount of the tax
on homesteads qualifying under the senior citizens' property tax deferral program under
chapter 290B is the total amount of property tax before subtraction of the deferred property
tax amount. The amount of the tax on contamination value imposed under sections 270.91
to 270.98, if any, must also be separately stated. The dollar amounts, including the dollar
amount of any special assessments, may be rounded to the nearest even whole dollar. For
purposes of this section whole odd-numbered dollars may be adjusted to the next higher
even-numbered dollar. The amount of market value excluded under section 273.11,
subdivision 16, if any, must also be listed on the tax statement.

(b) The property tax statements for manufactured homes and sectional structures taxed
as personal property shall contain the same information that is required on the tax statements
for real property.

(c) Real and personal property tax statements must contain the following information
in the order given in this paragraph. The information must contain the current year tax
information in the right column with the corresponding information for the previous year
in a column on the left:

(1) the property's estimated market value under section 273.11, subdivision 1;

(2) the property's homestead market value exclusion under section 273.13, subdivision
35;

(3) the property's taxable market value under section 272.03, subdivision 15;

(4) the property's gross tax, before credits;

(5) for deleted text begin homestead deleted text end agricultural properties, the deleted text begin credit deleted text end new text begin credits new text end under deleted text begin section deleted text end new text begin sections new text end
273.1384 new text begin and 273.1387 new text end ;

(6) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135;
273.1391; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of credit
received under section 273.135 must be separately stated and identified as "taconite tax
relief"; and

(7) the net tax payable in the manner required in paragraph (a).

(d) If the county uses envelopes for mailing property tax statements and if the county
agrees, a taxing district may include a notice with the property tax statement notifying
taxpayers when the taxing district will begin its budget deliberations for the current year,
and encouraging taxpayers to attend the hearings. If the county allows notices to be included
in the envelope containing the property tax statement, and if more than one taxing district
relative to a given property decides to include a notice with the tax statement, the county
treasurer or auditor must coordinate the process and may combine the information on a
single announcement.

new text begin EFFECTIVE DATE. new text end

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