HF 481

as introduced - 87th Legislature (2011 - 2012) Posted on 02/14/2011 10:43am

A bill for an act
relating to property taxes; freezing property taxes for certain local governments
at 2010 pay levels; prohibiting certain local government actions that would
increase property tax levies; providing exceptions.

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

Section 1. new text begin DEFINITION; LOCAL TAXING AUTHORITY.
new text end

new text begin For purposes of this act, "local taxing authority" means a county, home rule charter
or statutory city, or special taxing district under Minnesota Statutes, section 275.066, but
excludes school districts.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2012.
new text end

Sec. 2. new text begin LEVY LIMITATION FOR TAXES PAYABLE IN 2012.
new text end

new text begin Subdivision 1. new text end

new text begin Proposed levy. new text end

new text begin Notwithstanding any other law to the contrary, for
purposes of the certification required by Minnesota Statutes, section 275.065, subdivision
1, in 2011, no local taxing authority shall certify to the county auditor a proposed property
tax levy.
new text end

new text begin Subd. 2. new text end

new text begin Final levy. new text end

new text begin Notwithstanding any other law to the contrary, for purposes of
the certification required by Minnesota Statutes, section 275.07, subdivision 1, in 2011, no
local taxing authority shall certify to the county auditor a property tax levy greater than
the amount certified to the county auditor pursuant to Minnesota Statutes, section 275.07,
subdivision 1, in the prior year, except as provided in this section.
new text end

new text begin Subd. 3. new text end

new text begin Debt service exception. new text end

new text begin Notwithstanding the limitations in subdivisions 1
and 2, a local taxing authority may levy for taxes payable in 2012 an amount in excess of
the levy certified pursuant to Minnesota Statutes, section 275.07, subdivision 1, in 2010,
for debt service on obligations, certificates of indebtedness, capital notes, or other debt
instruments sold prior to June 1, 2010, or to make payments on installment purchase
contracts or lease purchase agreements entered into before June 1, 2006. The amount that
may be levied in excess of the limits set in subdivisions 1 and 2 may not exceed the
difference between what the taxing authority needs to levy for taxes payable in 2012 for
that purpose and the amount it levied for that purpose for taxes payable in 2011.
new text end

new text begin Subd. 4. new text end

new text begin Annexation exception. new text end

new text begin The city tax rate for taxes payable in 2012 on
any property annexed under Minnesota Statutes, chapter 414, may not be increased
over the city or township tax rate in effect on the property for taxes payable in 2011,
notwithstanding any law, municipal board order, or ordinance to the contrary. The limit on
the annexing city's levy under subdivisions 1 and 2 is increased by an amount equal to
the net tax capacity of the property annexed multiplied by the city or township tax rate in
effect for that property for taxes payable in 2011. The levy limit under subdivisions 1 and
2 for the city from which the property is annexed is reduced by the same amount.
new text end

new text begin Subd. 5. new text end

new text begin Election exception. new text end

new text begin Notwithstanding the limitations in subdivisions 1 and
2, a local taxing authority may levy an additional levy in any amount if approved by a
majority of the voters as provided in Minnesota Statutes, section 275.73.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes levied in 2011, payable
in 2012.
new text end

Sec. 3. new text begin PROHIBITION AGAINST INCURRING NEW DEBT.
new text end

new text begin Subdivision 1. new text end

new text begin Actions prohibited. new text end

new text begin (a) After May 30, 2010, no local taxing
authority may sell obligations, certificates of indebtedness, capital notes, or other debt
instruments under Minnesota Statutes, section 412.301, chapter 475, or any other law;
nor may it enter into installment purchase contracts or lease purchase agreements under
Minnesota Statutes, section 465.71, or any other law if issuing those debt instruments or
entering into those contracts would require a levy first becoming payable in 2012.
new text end

new text begin (b) For purposes of this section, "obligations" includes certificates of indebtedness,
capital notes, other debt instruments, installment purchase contracts, and lease purchase
agreements.
new text end

new text begin Subd. 2. new text end

new text begin Exceptions. new text end

new text begin This prohibition does not apply to:
new text end

new text begin (1) refunding bonds sold to refund bonds originally sold before June 1, 2011;
new text end

new text begin (2) obligations for which the amount of the levy payable in 2012 would not exceed
the difference between (i) the local taxing authority's total debt service levy for taxes
payable in 2011 and (ii) its total debt service levy for taxes payable in 2012 prior to
issuance of these obligations; and
new text end

new text begin (3) obligations with respect to which the local taxing authority makes a finding at
the time of the issuance of the obligation that no levy is required to meet the obligation
for taxes payable in 2012, or that sufficient funds are available from a nonproperty tax
source to fund the obligation.
new text end

new text begin Subd. 3. new text end

new text begin Date when bonds are deemed sold. new text end

new text begin For purposes of this section, bonds
are deemed to have been sold before June 30, 2011, if:
new text end

new text begin (1) an agreement has been entered into between the local taxing authority and a
purchaser or underwriter for the sale of the bonds by that date;
new text end

new text begin (2) the issuing local taxing authority is a party to a contract or letter of understanding
entered into before June 1, 2011, with the federal government or the state government that
requires the local taxing authority to pay for a project and the project is funded with the
proceeds of the bonds; or
new text end

new text begin (3) the proceeds of the bonds are used to fund a project or acquisition with respect
to which the local taxing authority has entered into a contract with a builder or supplier
before June 1, 2011.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2012.
new text end

Sec. 4. new text begin BENEFIT RATIO FOR RURAL SERVICE DISTRICTS.
new text end

new text begin Notwithstanding Minnesota Statutes, section 272.67, subdivision 6, the benefit ratio
used for apportioning levies to a rural service district for taxes payable in 2012 must not
be greater than that in effect for taxes payable in 2011.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2012.
new text end

Sec. 5. new text begin FREEZE ON LOCAL MATCH REQUIREMENTS.
new text end

new text begin Notwithstanding any other law to the contrary, the local funding or local match
required from any local taxing authority for any state grant or program shall not be
increased for calendar year 2012 above the dollar amount for the local funding or local
match for the same grant or program in 2011, regardless of the level of state funding
provided. Any local match or local funding requirement that first becomes effective after
December 31, 2011, for new or changed state grants or programs is not effective for a
local taxing authority until after December 31, 2012. Nothing in this section affects the
eligibility of, or reduces the funding level to, a local taxing authority subject to the levy
limits in section 1 if the local match requirements of the program were met in 2011.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2012.
new text end

Sec. 6. new text begin SUSPENSION OF SALARY AND BUDGET APPEAL
AUTHORIZATION.
new text end

new text begin After March 1, 2011, no county sheriff may exercise the authority granted under
Minnesota Statutes, section 387.20, subdivision 7, and no county attorney may exercise
the authority granted under Minnesota Statutes, section 388.18, subdivision 6, to the
extent that the salary or budget increase sought in the appeal would result in an increase
in county expenditures in calendar year 2012 above the level in calendar year 2011 for
the same purpose.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2012.
new text end

Sec. 7. new text begin PENSION LIABILITIES.
new text end

new text begin Notwithstanding any other law or charter provision to the contrary, no levy for taxes
payable in 2012 for a local police or fire relief association for the purpose of amortizing the
unfunded pension liability may exceed the levy for that purpose for taxes payable in 2011.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2012.
new text end

Sec. 8. new text begin SAVINGS CLAUSE.
new text end

new text begin Notwithstanding any provision in this act, the provisions of this act neither constitute
an impairment of any obligation, certificate of indebtedness, capital note, or other debt
instrument sold prior to June 1, 2011, nor does it constitute an impairment on the ability
of a local taxing authority to make payments on installment purchase contracts or lease
purchase agreements entered into by a local taxing authority, other than a school district,
before June 1, 2011.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2012.
new text end