Skip to main content Skip to office menu Skip to footer
Minnesota Legislature

Office of the Revisor of Statutes

475.61 TAX LEVIES.
    Subdivision 1. Debt service resolution. The governing body of any municipality issuing
general obligations shall, prior to delivery of the obligations, levy by resolution a direct general
ad valorem tax upon all taxable property in the municipality to be spread upon the tax rolls for
each year of the term of the obligations. The tax levies for all years for municipalities other than
school districts shall be specified and such that if collected in full they, together with estimated
collections of special assessments and other revenues pledged for the payment of said obligations,
will produce at least five percent in excess of the amount needed to meet when due the principal
and interest payments on the obligations. The tax levies for school districts shall be specified and
such that if collected in full they, together with estimated collection of other revenues pledged for
the payment of the obligations, will produce five percent in excess of the amount needed to meet
when due the principal and interest payments on the obligations, rounded up to the nearest dollar;
except that, with the permission of the commissioner of education, a school board may specify
a tax levy in a higher amount if necessary either to meet an anticipated tax delinquency or for
cash flow needs to meet the required payments from the debt redemption fund. Such resolution
shall irrevocably appropriate the taxes so levied and any special assessments or other revenues so
pledged to the municipality's debt service fund or a special debt service fund or account created
for the payment of one or more issues of obligations. The governing body may, in its discretion, at
any time after the obligations have been authorized, adopt a resolution levying only a portion of
such taxes, to be filed, assessed, extended, collected, and remitted as hereinafter provided, and
the amount or amounts therein levied shall be credited against the tax required to be levied
prior to delivery of the obligations.
    Subd. 2. Filing; certification; assessment; extension. The recording officer of the
municipality shall file in the office of the county auditor of each county in which any part of the
municipality is located a certified copy of the resolution, together with full information regarding
the obligations for which the tax is levied. No further action by the municipality is required to
authorize the extension, assessment and collection of the tax, but the municipality's liability on
the obligations is not limited thereto and its governing body shall levy and cause to be extended,
assessed and collected any additional taxes found necessary for full payment of the principal and
interest. The county auditor shall forthwith certify to the municipality that the obligations have
been entered in the register required by sections 475.51 to 475.74 and that the tax levy required by
sections 475.51 to 475.74 has been made. The auditor shall annually assess and extend upon the
tax rolls the amount specified for such year in the resolution, unless the amount has been reduced
as authorized below or, if the municipality is located in more than one county, the portion thereof
which bears the same ratio to the whole amount as the net tax capacity of taxable property in
that part of the municipality located in the auditor's county bears to the net tax capacity of all
taxable property in the municipality.
    Subd. 3. Irrevocability. (a) Tax levies so made and filed shall be irrevocable, except as
provided in this subdivision.
(b) For purposes of this subdivision, "excess debt redemption fund balance" means the
greater of zero or the balance in the district's debt redemption fund as of June 30 of the fiscal year
ending in the year before the year the levy is certified, minus any debt redemption fund balance
attributable to refunding of existing bonds, minus the amount of the levy reduction for the current
year and the prior year under paragraphs (e) and (f), minus five percent of the district's required
debt service levy for the next year.
(c) By July 15 each year, a district shall report to the commissioner of education the amount
of the districts' debt redemption fund balance as of June 30 of the prior year attributable to
refunding of existing bonds.
(d) By August 15 each year, the commissioner shall determine the excess debt redemption
fund balance for each school district, and shall certify the amount of the excess balance to the
school district superintendent.
(e) In each year when a district has an excess debt redemption fund balance, the commissioner
shall reduce the tax levy otherwise to be included in the rolls next prepared by the amount certified.
(f) The school board may, with the approval of the commissioner, retain all or part of the
excess balance if it is necessary to ensure the prompt and full payment of its obligations and any
call premium on its obligations, will be used for redemption of its obligations in accordance with
their terms, or to level out the debt service tax rate, excluding the debt excess adjustment, for
its obligations over the next two years. A school district requesting authority to retain all or part
of the excess balance shall provide written documentation to the commissioner describing the
rationale for its request by September 15 including the issuance of new obligations within the
next year or the refunding of existing obligations. A school district that retains an excess may
request to transfer the excess to its operating capital account in the general fund under section
123B.80. The school board may, with the approval of the commissioner, specify a tax levy in
a higher amount if necessary because of anticipated tax delinquency or for cash flow needs to
meet the required payments from the debt redemption fund.
(g) If the governing body, including the governing body of a school district, in any year
makes an irrevocable appropriation to the debt service fund of money actually on hand or if there
is on hand any excess amount in the debt service fund, the recording officer may certify to the
county auditor the fact and amount thereof and the auditor shall reduce by the amount so certified
the amount otherwise to be included in the rolls next thereafter prepared.
    Subd. 4. Surplus funds. (a) All such taxes shall be collected and remitted to the municipality
by the county treasurer as other taxes are collected and remitted, and shall be used only for
payment of the obligations on account of which levied or to repay advances from other funds
used for such payments, except that any surplus remaining in the debt service fund when the
obligations and interest thereon are paid may be appropriated to any other general purpose by the
municipality. However, for obligations authorized before July 1, 2005, the amount of any surplus
remaining in the debt service fund of a school district when the obligations and interest thereon
are paid shall be used to reduce the general fund levies authorized pursuant to chapters 122A,
123A, 123B, 124D, and 126C and the state aids authorized pursuant to chapters 122A, 123A,
123B, 124D, 125A, 126C, and 127A. For obligations authorized on July 1, 2005, or thereafter, the
amount of any surplus remaining in the debt service fund of a school district when the obligations
and interest thereon are paid in full may be appropriated to any other general purpose by the
school district without any reduction in state aid or levies or may be used to reduce the general
fund levies authorized under chapters 122A, 123A, 123B, 124D, and 126C, and the state aids
authorized under chapters 122A, 123A, 123B, 124D, 125A, 126C, and 127A.
(b) If the district qualified for second tier debt service equalization aid in the last year that
it qualified for debt service equalization aid, the reduction to state aids equals the lesser of (1)
the amount of the surplus times the ratio of the district's second tier debt service equalization aid
to the district's second tier debt service equalization revenue for the last year that the district
qualified for debt service equalization aid; or (2) the district's cumulative amount of debt service
equalization aid.
(c) If the district did not qualify for second tier debt service equalization aid in the last year
that it qualified for debt service equalization aid, the reduction to state aids equals the lesser of
(1) the amount of the surplus times the ratio of the district's debt service equalization aid to the
district's debt service equalization revenue for the last year that the district qualified for debt
service equalization aid; or (2) the district's cumulative amount of debt service equalization aid.
(d) The reduction to the general fund levies equals the total amount of the surplus minus
the reduction to state aids.
    Subd. 5. Temporary obligations anticipating grant or loan. When all conditions exist
precedent to the offering for sale of obligations of any municipality in any amount for any purpose
authorized by law, and the municipality has applied for a grant or loan of state or federal funds to
aid in payment of cost incurred for the authorized purpose, its governing body may by resolution
issue and sell temporary obligations not exceeding the total amount authorized, maturing within
not more than three years from the date such obligations are issued. In this event so much of the
proceeds of the grant or loan when received shall be credited to the debt service fund for the
temporary obligations as may be needed for the payment thereof, with interest, when due, and
the tax which would otherwise be required by subdivision 1 need not be levied. Any amount of
the temporary obligations which cannot be paid at maturity, from the proceeds of the grant or
loan or from any other funds appropriated by the governing body for the purpose, shall be paid
from the proceeds of definitive obligations to be issued and sold before the maturity date; or if
sufficient funds are not available for payment in full of the temporary obligations at maturity,
the holders thereof shall have the right to require the issuance in exchange therefor of definitive
obligations secured in the manner provided in subdivision 1 and bearing interest at the maximum
rate permitted by law.
    Subd. 6. Other temporary obligations. When all conditions exist precedent to the offering
for sale of obligations of any municipality in any amount for any purpose authorized by law,
the governing body may issue and sell temporary obligations not exceeding the total amount
authorized, maturing in not more than three years from the date the obligations are issued, in
anticipation of the issuance of the permanent obligations. To the extent that the principal of
and interest on the temporary obligations cannot be paid when due from other sources pledged
or appropriated for the purpose, they shall be paid from the proceeds of permanent bonds or
additional temporary bonds which the governing body shall offer for sale in advance of their
maturity but the indebtedness funded by an issue of temporary bonds shall not be extended by the
issue of additional temporary bonds for more than six years from the date of the first issue. The
holders of any temporary bonds shall have and may enforce, by mandamus or other appropriate
proceedings, all rights respecting the levy and collection of taxes that are granted by law to holders
of permanent bonds, except the right to require the levies to be collected prior to the maturity of
the temporary bonds. If any temporary bonds are not paid in full at maturity, the holders may
require the issuance in exchange for them, at par, of new temporary bonds maturing within one
year from their date of issue but not subject to any other maturity limitation, and bearing interest
at the maximum rate permitted by law. The governing body may by resolution adopted prior to the
sale of any temporary bonds pledge the full faith, credit, and taxing power of the municipality for
the payment of the principal and interest, in addition to all provisions made for their security in the
authorizing resolution. If it does so, the bonds will be designated as general obligation temporary
bonds, and the governing body shall levy taxes for their payment in accordance with this section.
Proceeds of permanent bonds or temporary bonds not yet sold may be treated as pledged
revenues, in reduction of the tax otherwise required by this section to be levied prior to delivery of
the obligations. Funds of a municipality may be invested in its temporary bonds in accordance
with section 118A.04, and may be purchased upon their initial issue, but shall be purchased only
from funds which the municipality determines will not be required for other purposes before the
maturity date, and shall be resold before maturity only in the case of an emergency.
History: 1949 c 682 s 11; 1951 c 422 s 5; 1955 c 811 s 8; 1957 c 187 s 1; 1961 c 673 s 1;
1974 c 380 s 10; 1976 c 324 s 11,26; 1977 c 447 art 7 s 27; 1982 c 548 art 4 s 16-18; 1982 c 642
s 2; 1983 c 314 art 1 s 22; art 7 s 36; 1984 c 463 art 9 s 7,8; 1986 c 444; 1987 c 268 art 6 s 52;
1988 c 486 s 93; 1988 c 719 art 5 s 84; art 6 s 17; 1989 c 329 art 13 s 20; 1991 c 265 art 8 s 13;
1993 c 224 art 5 s 40; art 8 s 12; 1994 c 647 art 5 s 16; 1995 c 256 s 29; 1Sp1995 c 3 art 16 s 13;
1996 c 399 art 2 s 12; 1997 c 7 art 1 s 161; 1998 c 397 art 11 s 3; 1Sp2001 c 6 art 5 s 9; 1Sp2003
c 9 art 4 s 22,23; 1Sp2003 c 9 art 5 s 31; 2004 c 294 art 4 s 2; 1Sp2005 c 5 art 4 s 19