1.1 	A bill for an act
1.2 	relating to levy limits; imposing levy limits on
1.3 	counties and certain cities; amending Minnesota
1.4 	Statutes 2004, sections 275.70, subdivision 5; 275.71,
1.5 	subdivisions 2, 4, 5; repealing Minnesota Statutes
1.6 	2004, section 275.71, subdivision 3.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. Minnesota Statutes 2004, section 275.70,
1.9 	subdivision 5, is amended to read:
1.10 		Subd. 5.Special levies.  "Special levies" means those
1.11 	portions of ad valorem taxes levied by a local governmental unit
1.12 	for the following purposes or in the following manner:
1.13 	(1) to pay the costs of the principal and interest on
1.14 	bonded indebtedness ~~or to reimburse for the amount of liquor~~
1.15 	~~store revenues used to pay the principal and interest due on~~
1.16 	~~municipal liquor store bonds in the year preceding the year for~~
1.17 	~~which the levy limit is calculated~~;
1.18 	(2) to pay the costs of principal and interest on
1.19 	certificates of indebtedness issued for any corporate purpose
1.20 	except for the following:
1.21 	(i) tax anticipation or aid anticipation certificates of
1.22 	indebtedness;
1.23 	(ii) certificates of indebtedness issued under sections
1.24 	298.28 and 298.282;
1.25 	(iii) certificates of indebtedness used to fund current
1.26 	expenses or to pay the costs of extraordinary expenditures that
2.1 	result from a public emergency; or
2.2 	(iv) certificates of indebtedness used to fund an
2.3 	insufficiency in tax receipts or an insufficiency in other
2.4 	revenue sources;
2.5 	(3) to provide for the bonded indebtedness portion of
2.6 	payments made to another political subdivision of the state of
2.7 	Minnesota;
2.8 	(4) to fund payments made to the Minnesota State Armory
2.9 	Building Commission under section 193.145, subdivision 2, to
2.10 	retire the principal and interest on armory construction
2.11 	bonds; and 
2.12 	(5) property taxes approved by voters which are levied
2.13 	against the referendum market value as provided under section
2.14 	275.61~~;~~.
2.15 	~~(6) to fund matching requirements needed to qualify for~~
2.16 	~~federal or state grants or programs to the extent that either~~
2.17 	~~(i) the matching requirement exceeds the matching requirement in~~
2.18 	~~calendar year 2001, or (ii) it is a new matching requirement~~
2.19 	~~that did not exist prior to 2002;~~
2.20 	~~(7) to pay the expenses reasonably and necessarily incurred~~
2.21 	~~in preparing for or repairing the effects of natural disaster~~
2.22 	~~including the occurrence or threat of widespread or severe~~
2.23 	~~damage, injury, or loss of life or property resulting from~~
2.24 	~~natural causes, in accordance with standards formulated by the~~
2.25 	~~Emergency Services Division of the state Department of Public~~
2.26 	~~Safety, as allowed by the commissioner of revenue under section~~
2.27 	~~275.74, subdivision 2;~~
2.28 	~~(8) pay amounts required to correct an error in the levy~~
2.29 	~~certified to the county auditor by a city or county in a levy~~
2.30 	~~year, but only to the extent that when added to the preceding~~
2.31 	~~year's levy it is not in excess of an applicable statutory,~~
2.32 	~~special law or charter limitation, or the limitation imposed on~~
2.33 	~~the governmental subdivision by sections 275.70 to 275.74 in the~~
2.34 	~~preceding levy year;~~
2.35 	~~(9) to pay an abatement under section 469.1815;~~
2.36 	~~(10) to pay any costs attributable to increases in the~~
3.1 	~~employer contribution rates under chapter 353 that are effective~~
3.2 	~~after June 30, 2001;~~
3.3 	~~(11) to pay the operating or maintenance costs of a county~~
3.4 	~~jail as authorized in section 641.01 or 641.262, or of a~~
3.5 	~~correctional facility as defined in section 241.021, subdivision~~
3.6 	~~1, paragraph (f), to the extent that the county can demonstrate~~
3.7 	~~to the commissioner of revenue that the amount has been included~~
3.8 	~~in the county budget as a direct result of a rule, minimum~~
3.9 	~~requirement, minimum standard, or directive of the Department of~~
3.10 	~~Corrections, or to pay the operating or maintenance costs of a~~
3.11 	~~regional jail as authorized in section 641.262.  For purposes of~~
3.12 	~~this clause, a district court order is not a rule, minimum~~
3.13 	~~requirement, minimum standard, or directive of the Department of~~
3.14 	~~Corrections.  If the county utilizes this special levy, except~~
3.15 	~~to pay operating or maintenance costs of a new regional jail~~
3.16 	~~facility under sections 641.262 to 641.264 which will not~~
3.17 	~~replace an existing jail facility, any amount levied by the~~
3.18 	~~county in the previous levy year for the purposes specified~~
3.19 	~~under this clause and included in the county's previous year's~~
3.20 	~~levy limitation computed under section 275.71, shall be deducted~~
3.21 	~~from the levy limit base under section 275.71, subdivision 2,~~
3.22 	~~when determining the county's current year levy limitation.  The~~
3.23 	~~county shall provide the necessary information to the~~
3.24 	~~commissioner of revenue for making this determination;~~
3.25 	~~(12) to pay for operation of a lake improvement district,~~
3.26 	~~as authorized under section 103B.555.  If the county utilizes~~
3.27 	~~this special levy, any amount levied by the county in the~~
3.28 	~~previous levy year for the purposes specified under this clause~~
3.29 	~~and included in the county's previous year's levy limitation~~
3.30 	~~computed under section 275.71 shall be deducted from the levy~~
3.31 	~~limit base under section 275.71, subdivision 2, when determining~~
3.32 	~~the county's current year levy limitation.  The county shall~~
3.33 	~~provide the necessary information to the commissioner of revenue~~
3.34 	~~for making this determination;~~
3.35 	~~(13) to repay a state or federal loan used to fund the~~
3.36 	~~direct or indirect required spending by the local government due~~
4.1 	~~to a state or federal transportation project or other state or~~
4.2 	~~federal capital project.  This authority may only be used if the~~
4.3 	~~project is not a local government initiative;~~
4.4 	~~(14) to pay for court administration costs as required~~
4.5 	~~under section 273.1398, subdivision 4b, less the (i) county's~~
4.6 	~~share of transferred fines and fees collected by the district~~
4.7 	~~courts in the county for calendar year 2001 and (ii) the aid~~
4.8 	~~amount certified to be paid to the county in 2004 under section~~
4.9 	~~273.1398, subdivision 4c; however, for taxes levied to pay for~~
4.10 	~~these costs in the year in which the court financing is~~
4.11 	~~transferred to the state, the amount under this clause is~~
4.12 	~~limited to the amount of aid the county is certified to receive~~
4.13 	~~under section 273.1398, subdivision 4a; and~~ 
4.14 	~~(15) to fund a police or firefighters relief association as~~
4.15 	~~required under section 69.77 to the extent that the required~~
4.16 	~~amount exceeds the amount levied for this purpose in 2001.~~
4.17 	
EFFECTIVE DATE. This section is effective for taxes
4.18 	levied in 2005, payable in 2006 and thereafter.

4.19 	Sec. 2. Minnesota Statutes 2004, section 275.71,
4.20 	subdivision 2, is amended to read:
4.21 		Subd. 2.Levy limit base. (a) The levy limit base for a
4.22 	local governmental unit for taxes levied in ~~2003~~ 2005 is equal
4.23 	to the sum of (1) its levy in 2004, minus any amounts levied for
4.24 	the purposes listed in section 275.70, subdivision 5, plus (2)
4.25 	the local government aid and county program aid that it is
4.26 	certified to receive in calendar year 2005 under sections
4.27 	477A.011 to 477A.014, (3) the taconite aids it receives in
4.28 	calendar year 2005 under sections 298.28 and 298.282 including
4.29 	any aid which was required to be placed in a special fund for
4.30 	expenditure in the next succeeding year, and (4) any wind energy
4.31 	production tax for calendar year 2005 under section 272.029,
4.32 	adjusted for any error in estimation in the preceding year.
4.33 	This amount is subject to any adjustments under section 275.72.
4.34 	(b) The levy limit base for a local governmental unit for
4.35 	taxes levied in 2006 and thereafter is equal to its adjusted
4.36 	levy limit base in the previous year, subject to any adjustments
5.1 	under section 275.72~~, plus any aid amounts received in 2003~~
5.2 	~~under section 273.138 or 273.166, minus the difference between~~
5.3 	~~its levy limit under subdivision 5 for taxes levied in 2002 and~~
5.4 	~~the amount it actually levied under that subdivision in that~~
5.5 	~~year, and certified property tax replacement aid payable in 2003~~
5.6 	~~under section 174.242~~.
5.7 	
EFFECTIVE DATE. This section is effective for taxes
5.8 	levied in 2005, payable in 2006 and thereafter.

5.9 	Sec. 3. Minnesota Statutes 2004, section 275.71,
5.10 	subdivision 4, is amended to read:
5.11 		Subd. 4.Adjusted levy limit base.  (a) For taxes levied
5.12 	in ~~2003~~ 2005 and thereafter, the adjusted levy limit base is
5.13 	equal to the levy limit base computed under ~~subdivisions~~ 
5.14 	subdivision 2 ~~and 3~~ or section 275.72, ~~reduced by 40 percent of~~
5.15 	~~the difference between (1) the sum of 2003 certified aid~~
5.16 	~~payments, under sections 273.138, 273.1398 except for amounts~~
5.17 	~~certified under subdivision 4a, paragraph (b), 273.166, 477A.011~~
5.18 	~~to 477A.03, 477A.06, and 477A.07, before any reduction under~~
5.19 	~~Laws 2003, First Special Session chapter 21, articles 5 and 6,~~
5.20 	~~and (2) the sum of the aids paid in 2004 under those same~~
5.21 	~~sections, after any reductions in 2004 under Laws 2003, First~~
5.22 	~~Special Session chapter 21, articles 5 and 6.~~
5.23 	~~(b) For taxes levied in 2003 only, the adjusted levy limit~~
5.24 	~~base is increased by 60 percent of the difference between a~~
5.25 	~~jurisdiction's market value credit in 2003 before any reductions~~
5.26 	~~under Laws 2003, First Special Session chapter 21, articles 5~~
5.27 	~~and 6, and its market value credit in 2004 after reductions in~~
5.28 	~~Laws 2003, First Special Session chapter 21, articles 5 and~~
5.29 	~~6~~ multiplied by one plus the percent change in the number of
5.30 	households in the political subdivision for the most recent
5.31 	12-month period for which data is available.
5.32 	
EFFECTIVE DATE. This section is effective for taxes
5.33 	levied in 2005, payable in 2006 and thereafter.

5.34 	Sec. 4. Minnesota Statutes 2004, section 275.71,
5.35 	subdivision 5, is amended to read:
5.36 		Subd. 5.Property tax levy limit.  For taxes levied
6.1 	in ~~2003~~ 2005 and thereafter, the property tax levy limit for a
6.2 	local governmental unit is equal to its adjusted levy limit base
6.3 	determined under subdivision 4 plus any additional levy
6.4 	authorized under section 275.73, which is levied against net tax
6.5 	capacity, reduced by the sum of (i) the total amount of aids and
6.6 	reimbursements that the local governmental unit is certified to
6.7 	receive under sections 477A.011 to 477A.014, ~~except for the~~
6.8 	~~increases in city aid bases in calendar year 2002 under section~~
6.9 	~~477A.011, subdivision 36, paragraphs (l), (n), and~~
6.10 	~~(o),~~(ii) ~~homestead and agricultural aids it is certified to~~
6.11 	~~receive under section 273.1398, (iii)~~ taconite aids under
6.12 	sections 298.28 and 298.282 including any aid which was required
6.13 	to be placed in a special fund for expenditure in the next
6.14 	succeeding year, ~~(iv) temporary court aid under section~~
6.15 	~~273.1398, subdivision 4a,~~and ~~(v)~~ (iii) estimated payments to
6.16 	the local governmental unit under section 272.029, adjusted for
6.17 	any error in estimation in the preceding year.
6.18 	
EFFECTIVE DATE. This section is effective for taxes
6.19 	levied in 2005, payable in 2006 and thereafter.

6.20 	Sec. 5. REPEALER.
 6.21 	Minnesota Statutes 2004, section 275.71, subdivision 3, is
6.22 	repealed.

6.23 	EFFECTIVE DATE. This section is effective for taxes
6.24 	levied in 2005, payable in 2006.