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Minnesota Legislature

Office of the Revisor of Statutes

475.53 LIMIT ON NET DEBT.
    Subdivision 1. Generally. Except as otherwise provided in sections 475.51 to 475.74, no
municipality, except a school district or a city of the first class, shall incur or be subject to a net
debt in excess of two percent of the market value of taxable property in the municipality.
    Subd. 2.[Repealed, 1Sp1981 c 4 art 1 s 193]
    Subd. 3. Cities first class. Unless its charter permits a greater net debt a city of the first class
may not incur a net debt in excess of two percent of the market value of all taxable property
therein. If the charter of the city permits a net debt of the city in excess of two percent of its
valuation, it may not incur a net debt in excess of 3-2/3 percent of the market value of the taxable
property therein.
The county auditor, at the time of preparing the tax list of the city, shall compile a statement
setting forth the total net tax capacity and the total market value of each class of taxable property
in such city for such year.
    Subd. 4. School districts. Except as otherwise provided by law, no school district shall be
subject to a net debt in excess of 15 percent of the actual market value of all taxable property
situated within its corporate limits, as computed in accordance with this subdivision. The county
auditor of each county containing taxable real or personal property situated within any school
district shall certify to the district upon request the market value of all such property. Whenever
the commissioner of revenue, in accordance with section 127A.48, subdivisions 1 to 6, has
determined that the net tax capacity of any district furnished by county auditors is not based upon
the market value of taxable property in the district, the commissioner of revenue shall certify to
the district upon request the ratio most recently ascertained to exist between such value and the
actual market value of property within the district. The actual market value of property within a
district, on which its debt limit under this subdivision is based, is (a) the value certified by the
county auditors, or (b) this value divided by the ratio certified by the commissioner of revenue,
whichever results in a higher value.
    Subd. 5. Certain independent school districts. No independent school district located
wholly or partly within a city of the first class shall issue obligations with a term of more than two
years, whenever the aggregate of the outstanding obligations of the district equals or exceeds 0.7
percent of the market value of the taxable property within the school district.
    Subd. 6. Portion of expenditure for technical college. Only that proportion of the principal
amount of obligations issued by a school district or districts for the acquisition or betterment of a
technical college equal to the percentage of the total principal amount of the obligations which is
or would be currently borne by the district, shall be included in calculating the district's net debt.
The commissioner of education shall certify to each district upon request the current percentage
of the total principal amount of the obligations which is or would be borne by the district, which
certification shall be conclusive in favor of the holders of the obligations as against the district.
    Subd. 7. Adjustment of debt limits. If the amount of debt a municipality may incur is
limited by special law or city charter to a stated percentage or proportion of assessed value,
the limit must be calculated as a percentage or proportion of tax capacity. The percentage or
proportion provided in the special law or charter provision must be multiplied by 8.2 to determine
the applicable percentage or proportion of gross tax capacity and must be multiplied by 10.2 to
determine the applicable percentage or proportion of net tax capacity.
    Subd. 8. Debt limit reservation. A municipality may, by ordinance, reserve a portion of its
unencumbered debt limit for the purpose of providing proof of financial responsibility for the
contingency action portion of the response costs at a solid waste disposal facility, subject to the
rules adopted by the Pollution Control Agency under section 116.07, subdivision 4h. Reservation
of a portion of a municipality's debt limit under this subdivision may not be revoked by the
municipality until the expiration of the required time period for maintaining proof of financial
responsibility or the municipality adopts and adequately funds, as of the date of implementation,
an alternate method of financial responsibility under the rules of the agency, whichever occurs
earlier. If the municipality reserves its debt limit under this subdivision, the debt limit is computed
as if the municipality had issued obligations, subject to the limit, in the amount of the reservation
specified in the ordinance. Notwithstanding the amount of market value in the municipality,
the reserved amount of the limit is available for issuance of bonds to pay the municipality's
response costs.
History: (1938-4) 1927 c 131 s 2; 1935 c 256; 1937 c 285 s 1; 1943 c 480 s 1; 1945 c 549 s
1; 1947 c 296 s 5; 1949 c 682 s 3; 1955 c 304 s 1; 1955 c 356 s 1; 1955 c 656 s 1; 1957 c 879 s 1;
1961 c 560 s 37; 1965 c 875 s 11; 1969 c 6 s 46; 1969 c 1056 s 10; 1971 c 480 s 1; 1973 c 582 s
3; 1974 c 380 s 2-6; 1979 c 303 art 7 s 14; 1981 c 358 art 1 s 48; 1984 c 593 s 42-44; 1987 c 258
s 12; 1987 c 268 art 7 s 54; 1988 c 719 art 5 s 65,84; 1989 c 1 s 7-9; 1989 c 246 s 2; 1989 c 277
art 2 s 65; 1989 c 329 art 15 s 20; 1990 c 604 art 10 s 21; 1994 c 614 s 16; 1Sp1995 c 3 art 16 s
13; 1997 c 7 art 1 s 159; 1998 c 397 art 11 s 3; 1Sp2001 c 5 art 2 s 26; 2003 c 130 s 12