Bill Text: MN HF2698 | 2013-2014 | 88th Legislature | Introduced
Bill Title: School district debt service equalization provided for debt incurred as the result of a natural disaster.
Spectrum: Slight Partisan Bill (Democrat 2-1)
Status: (Introduced - Dead) 2014-03-04 - Introduction and first reading, referred to Education Finance [HF2698 Detail]
Download: Minnesota-2013-HF2698-Introduced.html
1.2relating to education finance; providing debt service equalization for debt
1.3incurred as the result of a natural disaster;amending Minnesota Statutes 2012,
1.4section 127A.49, subdivisions 2, 3; Minnesota Statutes 2013 Supplement,
1.5sections 123B.53, subdivision 1; 123B.54; proposing coding for new law in
1.6Minnesota Statutes, chapter 123B.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2013 Supplement, section 123B.53, subdivision 1, is
1.9amended to read:
1.10 Subdivision 1. Definitions. (a) For purposes of this section, the eligible debt service
1.11revenue of a district is defined as follows:
1.12 (1) the amount needed to produce between five and six percent in excess of the
1.13amount needed to meet when due the principal and interest payments on the obligations
1.14of the district for eligible projects according to subdivision 2, including the amounts
1.15necessary for repayment of energy loans according to section216C.37 or sections
298.292
1.16to298.298 , debt service loans and capital loans, lease purchase payments under section
1.17126C.40, subdivision 2
, alternative facilities levies under section
123B.59, subdivision
1.185 , paragraph (a), minus
1.19 (2) the amount of debt service excess levy reduction for that school year calculated
1.20according to the procedure established by the commissioner.
1.21 (b) The obligations in this paragraph are excluded from eligible debt service revenue:
1.22 (1) obligations under section123B.61 ;
1.23 (2) the part of debt service principal and interest paid from the taconite environmental
1.24protection fund or Douglas J. Johnson economic protection trust;
2.1 (3) obligations issued under Laws 1991, chapter 265, article 5, section 18, as
2.2amended by Laws 1992, chapter 499, article 5, section 24;and
2.3 (4) obligations under section123B.62 .; and
2.4(5) obligations equalized under section 123B.535.
2.5 (c) For purposes of this section, if a preexisting school district reorganized under
2.6sections123A.35 to
123A.43 ,
123A.46 , and
123A.48 is solely responsible for retirement
2.7of the preexisting district's bonded indebtedness, capital loans or debt service loans, debt
2.8service equalization aid must be computed separately for each of the preexisting districts.
2.9 (d) For purposes of this section, the adjusted net tax capacity determined according
2.10to sections127A.48 and
273.1325 shall be adjusted to include the tax capacity of property
2.11generally exempted from ad valorem taxes under section272.02 , subdivision 64.
2.12EFFECTIVE DATE.This section is effective for revenue for fiscal year 2016
2.13and later.
2.14 Sec. 2. [123B.535] NATURAL DISASTER DEBT SERVICE EQUALIZATION.
2.15 Subdivision 1. Definitions. (a) For purposes of this section, the eligible natural
2.16disaster debt service revenue of a district is defined as the amount needed to produce
2.17between five and six percent in excess of the amount needed to meet when due the
2.18principal and interest payments on the obligations of the district repayment of repair and
2.19replacement costs under the following conditions:
2.20(1) the district was impacted by a natural disaster event or area occurring January
2.211, 2005, or later, as declared by the President of the United States of America, which is
2.22eligible for Federal Emergency Management Agency payments;
2.23(2) the natural disaster caused $500,000 or more in damages to school district
2.24buildings; and
2.25(3) the repair and replacement costs are not covered by insurance payments or
2.26Federal Emergency Management Agency payments.
2.27(b) For purposes of this section, the adjusted net tax capacity equalizing factor
2.28equals the quotient derived by dividing the total adjusted net tax capacity of all school
2.29districts in the state for the year before the year the levy is certified by the total number of
2.30adjusted pupil units in the state for the current school year.
2.31 (c) For purposes of this section, the adjusted net tax capacity determined according
2.32to sections 127A.48 and 273.1325 shall be adjusted to include the tax capacity of property
2.33generally exempted from ad valorem taxes under section 272.02, subdivision 64.
2.34 Subd. 2. Notification. A district eligible for natural disaster debt service
2.35equalization revenue under subdivision 1 must notify the commissioner of the amount of
3.1its intended natural disaster debt service revenue calculated under subdivision 1 for all
3.2bonds sold prior to the notification by July 1 of the calendar year the levy is certified.
3.3 Subd. 3. Natural disaster debt service equalization revenue. The debt service
3.4equalization revenue of a district equals the greater of zero or the eligible debt service
3.5revenue, minus the greater of zero or the difference between:
3.6(1) the amount raised by a levy of ten percent times the adjusted net tax capacity
3.7of the district; and
3.8(2) the district's eligible debt service revenue under section 123B.53.
3.9 Subd. 4. Equalized natural disaster debt service levy. A district's equalized
3.10natural disaster debt service levy equals the district's natural disaster debt service
3.11equalization revenue times the lesser of one or the ratio of:
3.12(1) the quotient derived by dividing the adjusted net tax capacity of the district for
3.13the year before the year the levy is certified by the adjusted pupil units in the district for
3.14the school year ending in the year prior to the year the levy is certified; to
3.15(2) 300 percent of the statewide adjusted net tax capacity equalizing factor.
3.16 Subd. 5. Natural disaster debt service equalization aid. A district's natural
3.17disaster debt service equalization aid equals the difference between the district's natural
3.18disaster debt service equalization revenue and the district's equalized natural disaster
3.19debt service levy.
3.20 Subd. 6. Natural disaster debt service equalization aid payment schedule. Debt
3.21service equalization aid must be paid according to section 127A.45, subdivision 10.
3.22EFFECTIVE DATE.This section is effective for levies certified for taxable year
3.232015 and revenue for fiscal year 2016 and later.
3.24 Sec. 3. Minnesota Statutes 2013 Supplement, section 123B.54, is amended to read:
3.25123B.54 DEBT SERVICE APPROPRIATION.
3.26 (a) The amount necessary to make debt service equalization aid payments under
3.27section sections
123B.53 and 123B.535 is annually appropriated from the general fund to
3.28the commissioner of education.
3.29 (b) The appropriations in paragraph (a) must be reduced by the amount of any
3.30money specifically appropriated for the same purpose in any year from any state fund.
3.31EFFECTIVE DATE.This section is effective for revenue for fiscal year 2016
3.32and later.
3.33 Sec. 4. Minnesota Statutes 2012, section 127A.49, subdivision 2, is amended to read:
4.1 Subd. 2. Abatements. Whenever by virtue of chapter 278, sections270C.86 ,
4.2375.192
, or otherwise, the net tax capacity or referendum market value of any district for
4.3any taxable year is changed after the taxes for that year have been spread by the county
4.4auditor and the local tax rate as determined by the county auditor based upon the original
4.5net tax capacity is applied upon the changed net tax capacities, the county auditor shall,
4.6prior to February 1 of each year, certify to the commissioner of education the amount of
4.7any resulting net revenue loss that accrued to the district during the preceding year. Each
4.8year, the commissioner shall pay an abatement adjustment to the district in an amount
4.9calculated according to the provisions of this subdivision. This amount shall be deducted
4.10from the amount of the levy authorized by section126C.46 . The amount of the abatement
4.11adjustment must be the product of:
4.12 (1) the net revenue loss as certified by the county auditor, times
4.13 (2) the ratio of:
4.14 (i) the sum of the amounts of the district's certified levy in the third preceding year
4.15according to the following:
4.16 (A) section123B.57 , if the district received health and safety aid according to that
4.17section for the second preceding year;
4.18 (B) section124D.20 , if the district received aid for community education programs
4.19according to that section for the second preceding year;
4.20 (C) section124D.135, subdivision 3 , if the district received early childhood family
4.21education aid according to section124D.135 for the second preceding year;
4.22 (D) section126C.17, subdivision 6 , if the district received referendum equalization
4.23aid according to that section for the second preceding year;
4.24 (E) section126C.10, subdivision 13a , if the district received operating capital aid
4.25according to section126C.10, subdivision 13b , in the second preceding year;
4.26 (F) section126C.10, subdivision 29 , if the district received equity aid according to
4.27section126C.10, subdivision 30 , in the second preceding year;
4.28 (G) section126C.10, subdivision 32 , if the district received transition aid according
4.29to section126C.10, subdivision 33 , in the second preceding year;
4.30 (H) section123B.53, subdivision 5 , if the district received debt service equalization
4.31aid according to section123B.53, subdivision 6 , in the second preceding year;
4.32 (I) section 123B.535, subdivision 4, if the district received natural disaster debt
4.33service equalization aid according to section 123B.535, subdivision 5, in the second
4.34preceding year;
4.35(I) (J) section
124D.22, subdivision 3 , if the district received school-age care aid
4.36according to section124D.22, subdivision 4 , in the second preceding year;
5.1(J) (K) section
123B.591, subdivision 3 , if the district received deferred maintenance
5.2aid according to section123B.591, subdivision 4 , in the second preceding year; and
5.3(K) (L) section
126C.10, subdivision 35 , if the district received alternative teacher
5.4compensation equalization aid according to section126C.10, subdivision 36 , paragraph
5.5(a), in the second preceding year; to
5.6 (ii) the total amount of the district's certified levy in the third preceding December,
5.7plus or minus auditor's adjustments.
5.8EFFECTIVE DATE.This section is effective for revenue for fiscal year 2016
5.9and later.
5.10 Sec. 5. Minnesota Statutes 2012, section 127A.49, subdivision 3, is amended to read:
5.11 Subd. 3. Excess tax increment. (a) If a return of excess tax increment is made to a
5.12district pursuant to sections469.176, subdivision 2 , and
469.177, subdivision 9 , or upon
5.13decertification of a tax increment district, the school district's aid and levy limitations
5.14must be adjusted for the fiscal year in which the excess tax increment is paid under the
5.15provisions of this subdivision.
5.16 (b) An amount must be subtracted from the district's aid for the current fiscal year
5.17equal to the product of:
5.18 (1) the amount of the payment of excess tax increment to the district, times
5.19 (2) the ratio of:
5.20 (i) the sum of the amounts of the district's certified levy for the fiscal year in which
5.21the excess tax increment is paid according to the following:
5.22 (A) section123B.57 , if the district received health and safety aid according to that
5.23section for the second preceding year;
5.24 (B) section124D.20 , if the district received aid for community education programs
5.25according to that section for the second preceding year;
5.26 (C) section124D.135, subdivision 3 , if the district received early childhood family
5.27education aid according to section124D.135 for the second preceding year;
5.28 (D) section126C.17, subdivision 6 , if the district received referendum equalization
5.29aid according to that section for the second preceding year;
5.30 (E) section126C.10, subdivision 13a , if the district received operating capital aid
5.31according to section126C.10, subdivision 13b , in the second preceding year;
5.32 (F) section126C.10, subdivision 29 , if the district received equity aid according to
5.33section126C.10, subdivision 30 , in the second preceding year;
5.34 (G) section126C.10, subdivision 32 , if the district received transition aid according
5.35to section126C.10, subdivision 33 , in the second preceding year;
6.1 (H) section123B.53, subdivision 5 , if the district received debt service equalization
6.2aid according to section123B.53, subdivision 6 , in the second preceding year;
6.3 (I) section 123B.535, subdivision 4, if the district received natural disaster debt
6.4service equalization aid according to section 123B.535, subdivision 5, in the second
6.5preceding year;
6.6(I) (J) section
124D.22, subdivision 3 , if the district received school-age care aid
6.7according to section124D.22, subdivision 4 , in the second preceding year;
6.8(J) (K) section
123B.591, subdivision 3 , if the district received deferred maintenance
6.9aid according to section123B.591, subdivision 4 , in the second preceding year; and
6.10(K) (L) section
126C.10, subdivision 35 , if the district received alternative teacher
6.11compensation equalization aid according to section126C.10, subdivision 36 , paragraph
6.12(a), in the second preceding year; to
6.13 (ii) the total amount of the district's certified levy for the fiscal year, plus or minus
6.14auditor's adjustments.
6.15 (c) An amount must be subtracted from the school district's levy limitation for the
6.16next levy certified equal to the difference between:
6.17 (1) the amount of the distribution of excess increment; and
6.18 (2) the amount subtracted from aid pursuant to clause (a).
6.19 If the aid and levy reductions required by this subdivision cannot be made to the aid
6.20for the fiscal year specified or to the levy specified, the reductions must be made from
6.21aid for subsequent fiscal years, and from subsequent levies. The school district must use
6.22the payment of excess tax increment to replace the aid and levy revenue reduced under
6.23this subdivision.
6.24 (d) This subdivision applies only to the total amount of excess increments received
6.25by a district for a calendar year that exceeds $25,000.
6.26EFFECTIVE DATE.This section is effective for revenue for fiscal year 2016
6.27and later.
1.3incurred as the result of a natural disaster;amending Minnesota Statutes 2012,
1.4section 127A.49, subdivisions 2, 3; Minnesota Statutes 2013 Supplement,
1.5sections 123B.53, subdivision 1; 123B.54; proposing coding for new law in
1.6Minnesota Statutes, chapter 123B.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2013 Supplement, section 123B.53, subdivision 1, is
1.9amended to read:
1.10 Subdivision 1. Definitions. (a) For purposes of this section, the eligible debt service
1.11revenue of a district is defined as follows:
1.12 (1) the amount needed to produce between five and six percent in excess of the
1.13amount needed to meet when due the principal and interest payments on the obligations
1.14of the district for eligible projects according to subdivision 2, including the amounts
1.15necessary for repayment of energy loans according to section
1.16to
1.185
1.19 (2) the amount of debt service excess levy reduction for that school year calculated
1.20according to the procedure established by the commissioner.
1.21 (b) The obligations in this paragraph are excluded from eligible debt service revenue:
1.22 (1) obligations under section
1.23 (2) the part of debt service principal and interest paid from the taconite environmental
1.24protection fund or Douglas J. Johnson economic protection trust;
2.1 (3) obligations issued under Laws 1991, chapter 265, article 5, section 18, as
2.2amended by Laws 1992, chapter 499, article 5, section 24;
2.3 (4) obligations under section
2.4(5) obligations equalized under section 123B.535.
2.5 (c) For purposes of this section, if a preexisting school district reorganized under
2.6sections
2.7of the preexisting district's bonded indebtedness, capital loans or debt service loans, debt
2.8service equalization aid must be computed separately for each of the preexisting districts.
2.9 (d) For purposes of this section, the adjusted net tax capacity determined according
2.10to sections
2.11generally exempted from ad valorem taxes under section
2.12EFFECTIVE DATE.This section is effective for revenue for fiscal year 2016
2.13and later.
2.14 Sec. 2. [123B.535] NATURAL DISASTER DEBT SERVICE EQUALIZATION.
2.15 Subdivision 1. Definitions. (a) For purposes of this section, the eligible natural
2.16disaster debt service revenue of a district is defined as the amount needed to produce
2.17between five and six percent in excess of the amount needed to meet when due the
2.18principal and interest payments on the obligations of the district repayment of repair and
2.19replacement costs under the following conditions:
2.20(1) the district was impacted by a natural disaster event or area occurring January
2.211, 2005, or later, as declared by the President of the United States of America, which is
2.22eligible for Federal Emergency Management Agency payments;
2.23(2) the natural disaster caused $500,000 or more in damages to school district
2.24buildings; and
2.25(3) the repair and replacement costs are not covered by insurance payments or
2.26Federal Emergency Management Agency payments.
2.27(b) For purposes of this section, the adjusted net tax capacity equalizing factor
2.28equals the quotient derived by dividing the total adjusted net tax capacity of all school
2.29districts in the state for the year before the year the levy is certified by the total number of
2.30adjusted pupil units in the state for the current school year.
2.31 (c) For purposes of this section, the adjusted net tax capacity determined according
2.32to sections 127A.48 and 273.1325 shall be adjusted to include the tax capacity of property
2.33generally exempted from ad valorem taxes under section 272.02, subdivision 64.
2.34 Subd. 2. Notification. A district eligible for natural disaster debt service
2.35equalization revenue under subdivision 1 must notify the commissioner of the amount of
3.1its intended natural disaster debt service revenue calculated under subdivision 1 for all
3.2bonds sold prior to the notification by July 1 of the calendar year the levy is certified.
3.3 Subd. 3. Natural disaster debt service equalization revenue. The debt service
3.4equalization revenue of a district equals the greater of zero or the eligible debt service
3.5revenue, minus the greater of zero or the difference between:
3.6(1) the amount raised by a levy of ten percent times the adjusted net tax capacity
3.7of the district; and
3.8(2) the district's eligible debt service revenue under section 123B.53.
3.9 Subd. 4. Equalized natural disaster debt service levy. A district's equalized
3.10natural disaster debt service levy equals the district's natural disaster debt service
3.11equalization revenue times the lesser of one or the ratio of:
3.12(1) the quotient derived by dividing the adjusted net tax capacity of the district for
3.13the year before the year the levy is certified by the adjusted pupil units in the district for
3.14the school year ending in the year prior to the year the levy is certified; to
3.15(2) 300 percent of the statewide adjusted net tax capacity equalizing factor.
3.16 Subd. 5. Natural disaster debt service equalization aid. A district's natural
3.17disaster debt service equalization aid equals the difference between the district's natural
3.18disaster debt service equalization revenue and the district's equalized natural disaster
3.19debt service levy.
3.20 Subd. 6. Natural disaster debt service equalization aid payment schedule. Debt
3.21service equalization aid must be paid according to section 127A.45, subdivision 10.
3.22EFFECTIVE DATE.This section is effective for levies certified for taxable year
3.232015 and revenue for fiscal year 2016 and later.
3.24 Sec. 3. Minnesota Statutes 2013 Supplement, section 123B.54, is amended to read:
3.25123B.54 DEBT SERVICE APPROPRIATION.
3.26 (a) The amount necessary to make debt service equalization aid payments under
3.27
3.28the commissioner of education.
3.29 (b) The appropriations in paragraph (a) must be reduced by the amount of any
3.30money specifically appropriated for the same purpose in any year from any state fund.
3.31EFFECTIVE DATE.This section is effective for revenue for fiscal year 2016
3.32and later.
3.33 Sec. 4. Minnesota Statutes 2012, section 127A.49, subdivision 2, is amended to read:
4.1 Subd. 2. Abatements. Whenever by virtue of chapter 278, sections
4.3any taxable year is changed after the taxes for that year have been spread by the county
4.4auditor and the local tax rate as determined by the county auditor based upon the original
4.5net tax capacity is applied upon the changed net tax capacities, the county auditor shall,
4.6prior to February 1 of each year, certify to the commissioner of education the amount of
4.7any resulting net revenue loss that accrued to the district during the preceding year. Each
4.8year, the commissioner shall pay an abatement adjustment to the district in an amount
4.9calculated according to the provisions of this subdivision. This amount shall be deducted
4.10from the amount of the levy authorized by section
4.11adjustment must be the product of:
4.12 (1) the net revenue loss as certified by the county auditor, times
4.13 (2) the ratio of:
4.14 (i) the sum of the amounts of the district's certified levy in the third preceding year
4.15according to the following:
4.16 (A) section
4.17section for the second preceding year;
4.18 (B) section
4.19according to that section for the second preceding year;
4.20 (C) section
4.21education aid according to section
4.22 (D) section
4.23aid according to that section for the second preceding year;
4.24 (E) section
4.25according to section
4.26 (F) section
4.27section
4.28 (G) section
4.29to section
4.30 (H) section
4.31aid according to section
4.32 (I) section 123B.535, subdivision 4, if the district received natural disaster debt
4.33service equalization aid according to section 123B.535, subdivision 5, in the second
4.34preceding year;
4.35
4.36according to section
5.1
5.2aid according to section
5.3
5.4compensation equalization aid according to section
5.5(a), in the second preceding year; to
5.6 (ii) the total amount of the district's certified levy in the third preceding December,
5.7plus or minus auditor's adjustments.
5.8EFFECTIVE DATE.This section is effective for revenue for fiscal year 2016
5.9and later.
5.10 Sec. 5. Minnesota Statutes 2012, section 127A.49, subdivision 3, is amended to read:
5.11 Subd. 3. Excess tax increment. (a) If a return of excess tax increment is made to a
5.12district pursuant to sections
5.13decertification of a tax increment district, the school district's aid and levy limitations
5.14must be adjusted for the fiscal year in which the excess tax increment is paid under the
5.15provisions of this subdivision.
5.16 (b) An amount must be subtracted from the district's aid for the current fiscal year
5.17equal to the product of:
5.18 (1) the amount of the payment of excess tax increment to the district, times
5.19 (2) the ratio of:
5.20 (i) the sum of the amounts of the district's certified levy for the fiscal year in which
5.21the excess tax increment is paid according to the following:
5.22 (A) section
5.23section for the second preceding year;
5.24 (B) section
5.25according to that section for the second preceding year;
5.26 (C) section
5.27education aid according to section
5.28 (D) section
5.29aid according to that section for the second preceding year;
5.30 (E) section
5.31according to section
5.32 (F) section
5.33section
5.34 (G) section
5.35to section
6.1 (H) section
6.2aid according to section
6.3 (I) section 123B.535, subdivision 4, if the district received natural disaster debt
6.4service equalization aid according to section 123B.535, subdivision 5, in the second
6.5preceding year;
6.6
6.7according to section
6.8
6.9aid according to section
6.10
6.11compensation equalization aid according to section
6.12(a), in the second preceding year; to
6.13 (ii) the total amount of the district's certified levy for the fiscal year, plus or minus
6.14auditor's adjustments.
6.15 (c) An amount must be subtracted from the school district's levy limitation for the
6.16next levy certified equal to the difference between:
6.17 (1) the amount of the distribution of excess increment; and
6.18 (2) the amount subtracted from aid pursuant to clause (a).
6.19 If the aid and levy reductions required by this subdivision cannot be made to the aid
6.20for the fiscal year specified or to the levy specified, the reductions must be made from
6.21aid for subsequent fiscal years, and from subsequent levies. The school district must use
6.22the payment of excess tax increment to replace the aid and levy revenue reduced under
6.23this subdivision.
6.24 (d) This subdivision applies only to the total amount of excess increments received
6.25by a district for a calendar year that exceeds $25,000.
6.26EFFECTIVE DATE.This section is effective for revenue for fiscal year 2016
6.27and later.
