2000 Minnesota Statutes

     273.1398 Homestead and agricultural credit and disparity 
  reduction aid. 

    Subdivision 1.    Definitions.  (a) In this section, the 
 terms defined in this subdivision have the meanings given them. 

    (b) "Unique taxing jurisdiction" means the geographic area 
 subject to the same set of local tax rates. 

    (c) "Previous net tax capacity" means the product of the 
 appropriate net class rates for the year previous to the year in 
 which the aid is payable, and estimated market values for the 
 assessment two years prior to that in which aid is payable.  
 "Total previous net tax capacity" means the previous net tax 
 capacities for all property within the unique taxing 
 jurisdiction.  The total previous net tax capacity shall be 
 reduced by the sum of (1) the unique taxing jurisdiction's 
 previous net tax capacity of commercial-industrial property as 
 defined in section 473F.02, subdivision 3, or 276A.01, 
 subdivision 3, multiplied by the ratio determined pursuant to 
 section 473F.08, subdivision 6, or 276A.06, subdivision 7, for 
 the municipality, as defined in section 473F.02, subdivision 8, 
 or 276A.01, subdivision 8, in which the unique taxing 
 jurisdiction is located, (2) the previous net tax capacity of 
 the captured value of tax increment financing districts as 
 defined in section 469.177, subdivision 2, and (3) the previous 
 net tax capacity of transmission lines deducted from a local 
 government's total net tax capacity under section 273.425.  
 Previous net tax capacity cannot be less than zero. 

    (d) "Equalized market values" are market values that have 
 been equalized by dividing the assessor's estimated market value 
 for the second year prior to that in which the aid is payable by 
 the assessment sales ratios determined by class in the 
 assessment sales ratio study conducted by the department of 
 revenue pursuant to section 127A.48 in the second year prior to 
 that in which the aid is payable.  The equalized market values 
 shall equal the unequalized market values divided by the 
 assessment sales ratio. 

    (e) "Equalized school levies" means the amounts levied for: 

    (1) general education under section 126C.13, subdivision 2; 

    (2) supplemental revenue under section 126C.10, subdivision 
 10; 

    (3) transition revenue under section 126C.10, subdivision 
 20; and 

    (4) referendum revenue under section 126C.17. 

    (f) "Current local tax rate" means the quotient derived by 
 dividing the taxes levied within a unique taxing jurisdiction 
 for taxes payable in the year prior to that for which aids are 
 being calculated by the total previous net tax capacity of the 
 unique taxing jurisdiction.  

    (g) For purposes of calculating and allocating homestead 
 and agricultural credit aid authorized pursuant to subdivision 2 
 and the disparity reduction aid authorized in subdivision 3, 
 "gross taxes levied on all properties," "gross taxes," or "taxes 
 levied" means the total net tax capacity based taxes levied on 
 all properties except that levied on the captured value of tax 
 increment districts as defined in section 469.177, subdivision 
 2, and that levied on the portion of commercial industrial 
 properties' assessed value or gross tax capacity, as defined in 
 section 473F.02, subdivision 3, subject to the areawide tax as 
 provided in section 473F.08, subdivision 6, in a unique taxing 
 jurisdiction.  "Gross taxes" are before any reduction for 
 disparity reduction aid but "taxes levied" are after any 
 reduction for disparity reduction aid.  Gross taxes levied or 
 taxes levied cannot be less than zero.  

    "Taxes levied" excludes equalized school levies. 

    (h) "Household adjustment factor" means the number of 
 households, for the year most recently determined as of July 1 
 in the aid calculation year, divided by the number of households 
 for the year immediately preceding the year for which the number 
 of households has most recently been determined as of July 1.  
 The household adjustment factor cannot be less than one.  

    (i) "Growth adjustment factor" means the household 
 adjustment factor in the case of counties.  In the case of 
 cities, towns, school districts, and special taxing districts, 
 the growth adjustment factor equals one.  The growth adjustment 
 factor cannot be less than one.  

    (j) "Homestead and agricultural credit base" means the 
 previous year's certified homestead and agricultural credit aid 
 determined under subdivision 2 less any permanent aid reduction 
 in the previous year to homestead and agricultural credit aid.  

    (k) "Net tax capacity adjustment" means (1) the tax base 
 differential defined in subdivision 1a, multiplied by (2) the 
 unique taxing jurisdiction's current local tax rate.  The net 
 tax capacity adjustment cannot be less than zero. 

    (l) "Fiscal disparity adjustment" means a taxing 
 jurisdiction's fiscal disparity distribution levy under section 
 473F.08, subdivision 3, clause (a), or 276A.06, subdivision 3, 
 clause (a), for taxes payable in the year prior to that for 
 which aids are being calculated, multiplied by the ratio of the 
 tax base differential percent referenced in subdivision 1a for 
 the highest class rate for class 3 property for taxes payable in 
 the year prior to that for which aids are being calculated to 
 the highest class rate for class 3 property for taxes payable in 
 the second prior year to that for which aids are being 
 calculated.  In the case of school districts, the fiscal 
 disparity distribution levy shall exclude that part of the levy 
 attributable to equalized school levies. 

    Subd. 1a.    Tax base differential.  (a) For aids 
 payable in 2000, the tax base differential is: 

    (1) 0.45 percent of the assessment year 1998 taxable market 
 value of class 2a agricultural homestead property, excluding the 
 house, garage, and surrounding one acre of land, between 
 $115,000 and $600,000 and over 320 acres, minus the value over 
 $600,000 that is less than 320 acres; plus 

    (2) 0.5 percent of the assessment year 1998 taxable market 
 value of noncommercial seasonal recreational residential 
 property over $75,000 in value; plus 

    (3) for purposes of computing the fiscal disparity 
 adjustment only, 0.2 percent of the assessment year 1998 taxable 
 market value of class 3 commercial-industrial property over 
 $150,000. 

    (b) For the purposes of the distribution of homestead and 
 agricultural credit aid for aids payable in 2000, the 
 commissioner of revenue shall use the best information available 
 as of June 30, 1999, to make an estimate of the value described 
 in paragraph (a), clause (1).  The commissioner shall adjust the 
 distribution of homestead and agricultural credit aid for aids 
 payable in 2001 and subsequent years if new information 
 regarding the value described in paragraph (a), clause (1), 
 becomes available after June 30, 1999. 

    Subd. 2.    Homestead and agricultural credit aid.  
 Homestead and agricultural credit aid for each unique taxing 
 jurisdiction equals the product of (1) the homestead and 
 agricultural credit aid base, and (2) the growth adjustment 
 factor, plus the net tax capacity adjustment and the fiscal 
 disparity adjustment.  

    Subd. 2a. Repealed, 1994 c 416 art 1 s 65 

    Subd. 2b.  Repealed, 1990 c 604 art 4 s 21 

    Subd. 2c.    Computation by commissioner.  
 Notwithstanding the provisions of subdivisions 1 and 2 requiring 
 the computation of homestead and agricultural credit aid at the 
 unique taxing jurisdiction level, the commissioner may, upon 
 consultation with the chairs of the house tax committee and 
 senate committee on taxes and tax laws, compute homestead and 
 agricultural credit aid at a higher level if it would have a 
 negligible impact or if changes in the composition of unique 
 taxing jurisdictions do not permit computation at the unique 
 taxing jurisdiction level.  

    Subd. 2d.    Aids determined as of June 30.  For aid 
 amounts authorized under subdivisions 2 and 3, and section 
 273.166:  (i) if the effective date for a municipal 
 incorporation, consolidation, annexation, detachment, 
 dissolution, or township organization is on or before June 30 of 
 the year preceding the aid distribution year, the change in 
 boundaries or form of government shall be recognized for aid 
 determinations for the aid distribution year; (ii) if the 
 effective date for a municipal incorporation, consolidation, 
 annexation, detachment, dissolution, or township organization is 
 after June 30 of the year preceding the aid distribution year, 
 the change in boundaries or form of government shall not be 
 recognized for aid determinations until the following year. 

    Subd. 3.    Disparity reduction aid.  For taxes payable 
 in 1995, and subsequent years, the amount of disparity aid 
 certified for each taxing district within each unique taxing 
 jurisdiction for taxes payable in the prior year shall be 
 multiplied by the ratio of (1) the jurisdiction's tax capacity 
 using the class rates for taxes payable in the year for which 
 aid is being computed, to (2) its tax capacity using the class 
 rates for taxes payable in the year prior to that for which aid 
 is being computed, both based upon market values for taxes 
 payable in the year prior to that for which aid is being 
 computed.  For the purposes of this aid determination, disparity 
 reduction aid certified for taxes payable in the prior year for 
 a taxing entity other than a town or school district is deemed 
 to be county government disparity reduction aid.  For taxes 
 payable in 1992 and subsequent years, the amount of disparity 
 aid certified to each taxing jurisdiction shall be reduced by 
 any reductions required in the current year or permanent 
 reductions required in previous years under section 477A.0132. 

    Subd. 3a.    Disparity reduction aid to cities.  
 Notwithstanding the provisions of subdivision 3 or section 
 275.08, subdivision 1d, the amount of disparity reduction aid 
 for a city for aid payable in calendar year 1994 and thereafter 
 is zero, and the local tax rate for taxes payable in 1994 and 
 thereafter for a city shall not be adjusted under section 
 275.08, subdivision 1d.  For purposes of this subdivision, city 
 means a statutory or home rule charter city. 

    Subd. 4.    Disparity reduction credit.  (a) Beginning 
 with taxes payable in 1989, class 4a, class 3a, and class 3b 
 property qualifies for a disparity reduction credit if:  (1) the 
 property is located in a border city that has an enterprise zone 
 designated pursuant to section 469.168, subdivision 4; (2) the 
 property is located in a city with a population greater than 
 2,500 and less than 35,000 according to the 1980 decennial 
 census; (3) the city is adjacent to a city in another state or 
 immediately adjacent to a city adjacent to a city in another 
 state; and (4) the adjacent city in the other state has a 
 population of greater than 5,000 and less than 75,000.  

    (b) The credit is an amount sufficient to reduce (i) the 
 taxes levied on class 4a property to 2.3 percent of the 
 property's market value and (ii) the tax on class 3a and class 
 3b property to 2.3 percent of market value.  

    (c) The county auditor shall annually certify the costs of 
 the credits to the department of revenue.  The department shall 
 reimburse local governments for the property taxes foregone as 
 the result of the credits in proportion to their total levies. 

    Subd. 4a.    Aid offset for court costs.  (a) By July 
 15, 1999, the supreme court shall determine and certify to the 
 commissioner of revenue for each county, other than counties 
 located in the eighth judicial district, the county's share of 
 the costs assumed under Laws 1999, chapter 216, article 7, 
 during the fiscal year beginning July 1, 2000, less an amount 
 equal to the county's share of transferred fines collected by 
 the district courts in the county during calendar year 1998.  

    (b) Payments to a county under subdivision 2 or section 
 273.166 for calendar year 2000 must be permanently reduced by an 
 amount equal to 75 percent of the net cost to the state for 
 assumption of district court costs as certified in paragraph (a).

    (c) Payments to a county under subdivision 2 or section 
 273.166 for calendar year 2001 must be permanently reduced by an 
 amount equal to 25 percent of the net cost to the state for 
 assumption of district court costs as certified in paragraph (a).

    (d) Payments to a county under subdivision 2 for calendar 
 year 2001 are permanently increased by an amount equal to 7.5 
 percent of the county's share of transferred fines collected by 
 the district courts in the county during calendar year 1998, as 
 determined under paragraph (a).  If the amount determined in 
 paragraph (a) exceeds the amount of aid a county is scheduled to 
 be paid under subdivision 2 in 2000, then the county shall not 
 receive an aid increase under this paragraph. 

    Subd. 5. Repealed, 1993 c 375 art 4 s 21 

    Subd. 5a. Repealed, 1Sp1993 c 1 art 2 s 7 

    Subd. 5b. Repealed, 1996 c 471 art 3 s 55 

    Subd. 5c. Repealed, 1Sp1993 c 1 art 2 s 7 

    Subd. 6.    Payment.  The commissioner shall certify the 
 aids provided in subdivisions 2, 2b, 3, and 5 before September 1 
 of the year preceding the distribution year to the county 
 auditor of the affected local government.  The aids provided in 
 subdivisions 2, 2b, 3, and 5 must be paid to local governments 
 other than school districts at the times provided in section 
 477A.015 for payment of local government aid to taxing 
 jurisdictions, except that the first one-half payment of 
 disparity reduction aid provided in subdivision 3 must be paid 
 on or before August 31.  The disparity reduction credit provided 
 in subdivision 4 must be paid to taxing jurisdictions other than 
 school districts at the time provided in section 473H.10, 
 subdivision 3.  Aids and credit reimbursements to school 
 districts must be certified to the commissioner of children, 
 families, and learning and paid under section 273.1392.  Payment 
 shall not be made to any taxing jurisdiction that has ceased to 
 levy a property tax.  

    Subd. 7.  Repealed, 1994 c 587 art 3 s 21 para (b) 

    Subd. 8.    Appropriation.  (a) An amount sufficient to 
 pay the aids and credits provided under this section for school 
 districts, intermediate school districts, or any group of school 
 districts levying as a single taxing entity, is annually 
 appropriated from the general fund to the commissioner of 
 children, families, and learning.  An amount sufficient to pay 
 the aids and credits provided under this section for counties, 
 cities, towns, and special taxing districts is annually 
 appropriated from the general fund to the commissioner of 
 revenue.  A jurisdiction's aid amount may be increased or 
 decreased based on any prior year adjustments for homestead 
 credit or other property tax credit or aid programs. 

    (b) The commissioner of finance shall bill the commissioner 
 of revenue for the cost of preparation of local impact notes as 
 required by section 3.987 only to the extent to which those 
 costs exceed those costs incurred in fiscal year 1997 and for 
 any other new costs attributable to the local impact note 
 function required by section 3.987, not to exceed $100,000 in 
 fiscal years 1998 and 1999 and $200,000 in fiscal year 2000 and 
 thereafter. 

    The commissioner of revenue shall deduct the amount billed 
 under this paragraph from aid payments to be made to cities and 
 counties under subdivision 2 on a pro rata basis.  The amount 
 deducted under this paragraph is appropriated to the 
 commissioner of finance for the preparation of local impact 
 notes. 

    HIST: 1988 c 719 art 5 s 26,84; 1989 c 277 art 2 s 33-36; 1989 
 c 329 art 6 s 47; 1Sp1989 c 1; art 2 s 11; art 3 s 14-21,33; art 
 6 s 8; 1990 c 480 art 7 s 9-13; 1990 c 604 art 3 s 20; art 4 s 
 2-4; 1991 c 130 s 37; 1991 c 199 art 1 s 62; 1991 c 291 art 3 s 
 1-4; art 12 s 10; 1991 c 292 art 7 s 22; 1992 c 499 art 12 s 29; 
 1992 c 511 art 1 s 8,9; art 3 s 1; art 4 s 8,27; 1993 c 224 art 
 1 s 28,29; art 14 s 16; 1993 c 375 art 3 s 18-20; art 4 s 3-5; 
 1Sp1993 c 1 art 2 s 5; 1994 c 416 art 1 s 21,22; 1994 c 587 art 
 3 s 8; 1995 c 264 art 3 s 11; art 16 s 10; 1Sp1995 c 3 art 16 s 
 13; 1996 c 471 art 3 s 13-15; art 11 s 1; 1997 c 7 art 1 s 
 109,110; 1997 c 31 art 3 s 7; 1997 c 231 art 11 s 6; 1998 c 254 
 art 1 s 75; 1998 c 389 art 2 s 15-17; 1998 c 397 art 11 s 3; 
 1999 c 243 art 5 s 22,23; art 11 s 2,3; 2000 c 260 s 43; 2000 c 
 490 art 6 s 3