1.1 	A bill for an act
1.2 	relating to education finance; including seasonal
1.3 	recreational property in the definition of referendum
1.4 	tax base; adjusting operating referendum equalization
1.5 	factors; excluding seasonal recreational property from
1.6 	the state general levy tax base; amending Minnesota
1.7 	Statutes 2004, sections 126C.01, subdivision 3;
1.8 	126C.17, subdivision 6, by adding a subdivision;
1.9 	275.025, subdivisions 1, 4; repealing Minnesota
1.10 	Statutes 2004, section 275.025, subdivision 3.
1.11 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.12 	Section 1. Minnesota Statutes 2004, section 126C.01,
1.13 	subdivision 3, is amended to read:
1.14 		Subd. 3.Referendum market value.  "Referendum market
1.15 	value" means the market value of all taxable property, excluding
1.16 	property classified as class 2, noncommercial 4c(1), or 4c(4) 
1.17 	under section 273.13.  The portion of class 2a property
1.18 	consisting of the house, garage, and surrounding one acre of
1.19 	land of an agricultural homestead is included in referendum
1.20 	market value.  Any class of property, or any portion of a class
1.21 	of property, that is included in the definition of referendum
1.22 	market value and that has a class rate of less than one percent
1.23 	under section 273.13 shall have a referendum market value equal
1.24 	to its net tax capacity multiplied by 100.
1.25 	
EFFECTIVE DATE. This section is effective for taxes
1.26 	payable in 2006 and thereafter.

1.27 	Sec. 2. Minnesota Statutes 2004, section 126C.17,
1.28 	subdivision 6, is amended to read:
2.1 		Subd. 6.Referendum equalization levy.  (a) For fiscal
2.2 	year 2003 and later, a district's referendum equalization levy
2.3 	equals the sum of the first tier referendum equalization levy
2.4 	and the second tier referendum equalization levy.
2.5 	(b) For fiscal years 2005 and 2006,a district's first tier
2.6 	referendum equalization levy equals the district's first tier
2.7 	referendum equalization revenue times the lesser of one or the
2.8 	ratio of the district's referendum market value per resident
2.9 	marginal cost pupil unit to $476,000. For fiscal year 2007 and
2.10 	later, a district's first tier referendum equalization levy
2.11 	equals the district's first tier referendum equalization revenue
2.12 	times the lesser of one or the ratio of the district's
2.13 	referendum market value per resident marginal cost pupil unit to
2.14 	$483,530.
2.15 	(c) For fiscal years 2005 and 2006,a district's second
2.16 	tier referendum equalization levy equals the district's second
2.17 	tier referendum equalization revenue times the lesser of one or
2.18 	the ratio of the district's referendum market value per resident
2.19 	marginal cost pupil unit to $270,000. For fiscal year 2007 and
2.20 	later, a district's second tier referendum equalization levy
2.21 	equals the district's second tier referendum equalization
2.22 	revenue times the lesser of one or the ratio of the district's
2.23 	referendum market value per resident marginal cost pupil unit to
2.24 	$279,770.
2.25 	
EFFECTIVE DATE. This section is effective for taxes
2.26 	payable in 2006 and thereafter.

2.27 	Sec. 3. Minnesota Statutes 2004, section 126C.17, is
2.28 	amended by adding a subdivision to read:
2.29 		Subd. 7b.Referendum seasonal property aid
2.30 	adjustment. (a) A district's seasonal aid allowance equals the
2.31 	difference between referendum equalization levy in taxes payable
2.32 	in 2006 that the district would have levied based on the
2.33 	referendum market value that the district would have used
2.34 	according to section 126C.01, subdivision 3, and the
2.35 	equalization factors according to section 126C.17, subdivision
2.36 	6, subtracted from the district's referendum equalization levy
3.1 	in taxes payable in 2006 divided by its resident marginal cost
3.2 	pupil units for fiscal year 2007.  A district's seasonal aid
3.3 	allowance shall not be less than zero.
3.4 	(b) For fiscal year 2007 and later, a district's referendum
3.5 	seasonal property aid adjustment equals the district's seasonal
3.6 	aid allowance times its resident marginal cost pupil units.
3.7 	
EFFECTIVE DATE. This section is effective for taxes
3.8 	payable in 2006 and thereafter.

3.9 	Sec. 4. Minnesota Statutes 2004, section 275.025,
3.10 	subdivision 1, is amended to read:
3.11 		Subdivision 1.Levy amount.  The state general levy is
3.12 	levied against commercial-industrial property and seasonal
3.13 	residential recreational property,as defined in this section.
3.14 	The state general levy base amount is $592,000,000 for taxes
3.15 	payable in 2002.  For taxes payable in subsequent years, the
3.16 	levy base amount is increased each year by multiplying the levy
3.17 	base amount for the prior year by the sum of one plus the rate
3.18 	of increase, if any, in the implicit price deflator for
3.19 	government consumption expenditures and gross investment for
3.20 	state and local governments prepared by the Bureau of Economic
3.21 	Analysts of the United States Department of Commerce for the
3.22 	12-month period ending March 31 of the year prior to the year
3.23 	the taxes are payable.  The tax under this section is not
3.24 	treated as a local tax rate under section 469.177 and is not the
3.25 	levy of a governmental unit under chapters 276A and 473F.
3.26 	The commissioner shall increase or decrease the preliminary
3.27 	or final rate for a year as necessary to account for errors and
3.28 	tax base changes that affected a preliminary or final rate for
3.29 	either of the two preceding years.  Adjustments are allowed to
3.30 	the extent that the necessary information is available to the
3.31 	commissioner at the time the rates for a year must be certified,
3.32 	and for the following reasons:
3.33 	(1) an erroneous report of taxable value by a local
3.34 	official;
3.35 	(2) an erroneous calculation by the commissioner; and
3.36 	(3) an increase or decrease in taxable value for
4.1 	commercial-industrial or seasonal residential recreational 
4.2 	property reported on the abstracts of tax lists submitted under
4.3 	section 275.29 that was not reported on the abstracts of
4.4 	assessment submitted under section 270.11, subdivision 2, for
4.5 	the same year.
4.6 	The commissioner may, but need not, make adjustments if the
4.7 	total difference in the tax levied for the year would be less
4.8 	than $100,000.
4.9 	
EFFECTIVE DATE. This section is effective for taxes
4.10 	payable in 2006 and thereafter.

4.11 	Sec. 5. Minnesota Statutes 2004, section 275.025,
4.12 	subdivision 4, is amended to read:
4.13 		Subd. 4.Apportionment and levy of state general tax.
 4.14 	The state general tax must be distributed among the counties by
4.15 	applying a uniform rate to each county's commercial-industrial
4.16 	tax capacity and its seasonal residential recreational tax
4.17 	capacity.  Within each county, the tax must be levied by
4.18 	applying a uniform rate against commercial-industrial tax
4.19 	capacity and seasonal residential recreational tax capacity.  On
4.20 	or before October 1 each year, the commissioner of revenue shall
4.21 	certify a preliminary state general levy rate to each county
4.22 	auditor that must be used to prepare the notices of proposed
4.23 	property taxes for taxes payable in the following year.  By
4.24 	January 1 of each year, the commissioner shall certify the final
4.25 	state general levy rate to each county auditor that shall be
4.26 	used in spreading taxes.
4.27 	
EFFECTIVE DATE. This section is effective for taxes
4.28 	payable in 2006 and thereafter.

4.29 	Sec. 6. REPEALER.
 4.30 	Minnesota Statutes 2004, section 275.025, subdivision 3, is
4.31 	repealed effective for taxes payable in 2006 and thereafter.