Bill Text: MN HF2771 | 2013-2014 | 88th Legislature | Introduced
Bill Title: Iron Range fiscal disparities program repealed, and cross-reference corrected.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2014-03-11 - Referred by Chair to Property and Local Tax Division [HF2771 Detail]
Download: Minnesota-2013-HF2771-Introduced.html
1.2relating to taxation; repealing the Iron Range fiscal disparities program;
1.3correcting cross-references;amending Minnesota Statutes 2012, sections
1.4270C.89, subdivision 2; 275.025, subdivisions 1, 2; 275.065, subdivision 3;
1.5278.14, subdivision 1; 428A.05; 465.82, subdivision 2; 469.175, subdivision 6;
1.6469.177, subdivision 3; 469.1813, subdivision 2; 477A.011, subdivisions 27, 35;
1.7Minnesota Statutes 2013 Supplement, section 134.34, subdivision 4; repealing
1.8Minnesota Statutes 2012, sections 276A.01, subdivisions 1, 2, 3, 4, 5, 6, 7, 8, 9,
1.914, 16; 276A.02; 276A.03; 276A.04; 276A.05; 276A.06, subdivisions 1, 2, 3, 4,
1.105, 6, 7, 8, 9; 276A.07; 276A.08; 276A.09; Minnesota Statutes 2013 Supplement,
1.11sections 276A.01, subdivisions 10, 12, 13, 15; 276A.06, subdivision 10.
1.12BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.13 Section 1. Minnesota Statutes 2013 Supplement, section 134.34, subdivision 4, is
1.14amended to read:
1.15 Subd. 4. Limitation. (a) For calendar year 2010 and later, regional library
1.16basic system support aid shall not be provided to a regional public library system for a
1.17participating city or county which decreases the dollar amount provided for support for
1.18operating purposes of public library service below the amount provided by it for the
1.19second, or third preceding year, whichever is less. For purposes of this subdivision and
1.20subdivision 1, any funds provided under section473.757, subdivision 2 , for extending
1.21library hours of operation shall not be considered amounts provided by a city or county for
1.22support for operating purposes of public library service. This subdivision shall not apply
1.23to participating cities or counties where the adjusted net tax capacity of that city or county
1.24has decreased, if the dollar amount of the reduction in support is not greater than the dollar
1.25amount by which support would be decreased if the reduction in support were made in
1.26direct proportion to the decrease in adjusted net tax capacity.
2.1(b) For calendar year 2009 and later, in any calendar year in which a city's or
2.2county's aid under sections477A.011 to
477A.014 or credit reimbursement under section
2.3273.1384
is reduced after the city or county has certified its levy payable in that year, it
2.4may reduce its local support by the lesser of:
2.5(1) ten percent; or
2.6(2) a percent equal to the ratio of the aid and credit reimbursement reductions to the
2.7city's or county's revenue base, based on aids certified for the current calendar year. For
2.8calendar year 2009 only, the reduction under this paragraph shall be based on 2008 aid and
2.9credit reimbursement reductions under the December 2008 unallotment, as well as any
2.10aid and credit reimbursement reductions in calendar year 2009. For pay 2009 only, the
2.11commissioner of revenue will calculate the reductions under this paragraph and certify
2.12them to the commissioner of education within 15 days of May 17, 2009.
2.13(c) For taxes payable in 2010 and later, in any payable year in which the total
2.14amounts certified for city or county aids under sections477A.011 to
477A.014 are less
2.15than the total amounts paid under those sections in the previous calendar year, a city or
2.16county may reduce its local support by the lesser of:
2.17(1) ten percent; or
2.18(2) a percent equal to the ratio of:
2.19(i) the difference between (A) the sum of the aid it was paid under sections
2.20477A.011
to
477A.014 and the credit reimbursement it received under section
273.1384
2.21in the previous calendar year and (B) the sum of the aid it is certified to be paid in the
2.22current calendar year under sections477A.011 to
477A.014 and the credit reimbursement
2.23estimated to be paid under section273.1384 ; to
2.24(ii) its revenue base for the previous year, based on aids actually paid in the previous
2.25calendar year. The commissioner of revenue shall calculate the percent aid cut for each
2.26county and city under this paragraph and certify the percentage cuts to the commissioner
2.27of education by August 1 of the year prior to the year in which the reduced aids and
2.28credit reimbursements are to be paid. The percentage of reduction related to reductions
2.29to credit reimbursements under section273.1384 shall be based on the best estimation
2.30available as of July 30.
2.31(d) Notwithstanding paragraph (a), (b), or (c), no city or county shall reduce its
2.32support for public libraries below the minimum level specified in subdivision 1.
2.33(e) For purposes of this subdivision, "revenue base" means the sum of:
2.34(1) its levy for taxes payable in the current calendar year, including the levy on
2.35the fiscal disparities distribution under section276A.06, subdivision 3, paragraph (a),
2.36or
473F.08, subdivision 3 , paragraph (a);
3.1(2) its aid under sections477A.011 to
477A.014 in the current calendar year; and
3.2(3) its taconite aid in the current calendar year under sections298.28 and
298.282 .
3.3 Sec. 2. Minnesota Statutes 2012, section 270C.89, subdivision 2, is amended to read:
3.4 Subd. 2. Final report. The final abstract of assessments after adjustments by the
3.5State Board of Equalization and inclusion of any omitted property shall be submitted to
3.6the commissioner on or before September 1 of each calendar year. The final abstract
3.7must separately report the captured tax capacity of tax increment financing districts
3.8under section469.177, subdivision 2 , the areawide net tax capacity contribution values
3.9determined undersections
276A.05, subdivision 1, and section
473F.07, subdivision 1 ,
3.10and the value subject to the power line credit under section273.42 .
3.11 Sec. 3. Minnesota Statutes 2012, section 275.025, subdivision 1, is amended to read:
3.12 Subdivision 1. Levy amount. The state general levy is levied against
3.13commercial-industrial property and seasonal residential recreational property, as defined
3.14in this section. The state general levy base amount is $592,000,000 for taxes payable in
3.152002. For taxes payable in subsequent years, the levy base amount is increased each year
3.16by multiplying the levy base amount for the prior year by the sum of one plus the rate of
3.17increase, if any, in the implicit price deflator for government consumption expenditures
3.18and gross investment for state and local governments prepared by the Bureau of Economic
3.19Analysts of the United States Department of Commerce for the 12-month period ending
3.20March 31 of the year prior to the year the taxes are payable. The tax under this section is
3.21not treated as a local tax rate under section469.177 and is not the levy of a governmental
3.22unit underchapters 276A and chapter 473F.
3.23The commissioner shall increase or decrease the preliminary or final rate for a year
3.24as necessary to account for errors and tax base changes that affected a preliminary or final
3.25rate for either of the two preceding years. Adjustments are allowed to the extent that the
3.26necessary information is available to the commissioner at the time the rates for a year must
3.27be certified, and for the following reasons:
3.28(1) an erroneous report of taxable value by a local official;
3.29(2) an erroneous calculation by the commissioner; and
3.30(3) an increase or decrease in taxable value for commercial-industrial or seasonal
3.31residential recreational property reported on the abstracts of tax lists submitted under
3.32section275.29 that was not reported on the abstracts of assessment submitted under
3.33section270C.89 for the same year.
4.1The commissioner may, but need not, make adjustments if the total difference in the tax
4.2levied for the year would be less than $100,000.
4.3 Sec. 4. Minnesota Statutes 2012, section 275.025, subdivision 2, is amended to read:
4.4 Subd. 2. Commercial-industrial tax capacity. For the purposes of this section,
4.5"commercial-industrial tax capacity" means the tax capacity of all taxable property
4.6classified as class 3 or class 5(1) under section273.13 , except for electric generation
4.7attached machinery under class 3 and property described in section473.625 . County
4.8commercial-industrial tax capacity amounts are not adjusted for the captured net tax
4.9capacity of a tax increment financing district under section469.177, subdivision 2 , the
4.10net tax capacity of transmission lines deducted from a local government's total net tax
4.11capacity under section273.425 , or fiscal disparities contribution and distribution net
4.12tax capacities under chapter276A or 473F.
4.13 Sec. 5. Minnesota Statutes 2012, section 275.065, subdivision 3, is amended to read:
4.14 Subd. 3. Notice of proposed property taxes. (a) The county auditor shall prepare
4.15and the county treasurer shall deliver after November 10 and on or before November 24
4.16each year, by first class mail to each taxpayer at the address listed on the county's current
4.17year's assessment roll, a notice of proposed property taxes. Upon written request by
4.18the taxpayer, the treasurer may send the notice in electronic form or by electronic mail
4.19instead of on paper or by ordinary mail.
4.20 (b) The commissioner of revenue shall prescribe the form of the notice.
4.21 (c) The notice must inform taxpayers that it contains the amount of property taxes
4.22each taxing authority proposes to collect for taxes payable the following year. In the case of
4.23a town, or in the case of the state general tax, the final tax amount will be its proposed tax.
4.24The notice must clearly state for each city that has a population over 500, county, school
4.25district, regional library authority established under section134.201 , and metropolitan
4.26taxing districts as defined in paragraph (i), the time and place of a meeting for each taxing
4.27authority in which the budget and levy will be discussed and public input allowed, prior to
4.28the final budget and levy determination. The taxing authorities must provide the county
4.29auditor with the information to be included in the notice on or before the time it certifies
4.30its proposed levy under subdivision 1. The public must be allowed to speak at that
4.31meeting, which must occur after November 24 and must not be held before 6:00 p.m. It
4.32must provide a telephone number for the taxing authority that taxpayers may call if they
4.33have questions related to the notice and an address where comments will be received by
4.34mail, except that no notice required under this section shall be interpreted as requiring the
5.1printing of a personal telephone number or address as the contact information for a taxing
5.2authority. If a taxing authority does not maintain public offices where telephone calls can
5.3be received by the authority, the authority may inform the county of the lack of a public
5.4telephone number and the county shall not list a telephone number for that taxing authority.
5.5 (d) The notice must state for each parcel:
5.6 (1) the market value of the property as determined under section273.11 , and used
5.7for computing property taxes payable in the following year and for taxes payable in the
5.8current year as each appears in the records of the county assessor on November 1 of the
5.9current year; and, in the case of residential property, whether the property is classified as
5.10homestead or nonhomestead. The notice must clearly inform taxpayers of the years to
5.11which the market values apply and that the values are final values;
5.12 (2) the items listed below, shown separately by county, city or town, and state general
5.13tax, net of the residential and agricultural homestead credit under section273.1384 , voter
5.14approved school levy, other local school levy, and the sum of the special taxing districts,
5.15and as a total of all taxing authorities:
5.16 (i) the actual tax for taxes payable in the current year; and
5.17 (ii) the proposed tax amount.
5.18 If the county levy under clause (2) includes an amount for a lake improvement
5.19district as defined under sections103B.501 to
103B.581 , the amount attributable for that
5.20purpose must be separately stated from the remaining county levy amount.
5.21 In the case of a town or the state general tax, the final tax shall also be its proposed
5.22tax unless the town changes its levy at a special town meeting under section365.52 . If a
5.23school district has certified under section126C.17, subdivision 9 , that a referendum will
5.24be held in the school district at the November general election, the county auditor must
5.25note next to the school district's proposed amount that a referendum is pending and that, if
5.26approved by the voters, the tax amount may be higher than shown on the notice. In the
5.27case of the city of Minneapolis, the levy for Minneapolis Park and Recreation shall be
5.28listed separately from the remaining amount of the city's levy. In the case of the city of
5.29St. Paul, the levy for the St. Paul Library Agency must be listed separately from the
5.30remaining amount of the city's levy. In the case of Ramsey County, any amount levied
5.31under section134.07 may be listed separately from the remaining amount of the county's
5.32levy. In the case of a parcel where tax increment or the fiscal disparities areawide tax
5.33under chapter276A or 473F applies, the proposed tax levy on the captured value or the
5.34proposed tax levy on the tax capacity subject to the areawide tax must each be stated
5.35separately and not included in the sum of the special taxing districts; and
6.1 (3) the increase or decrease between the total taxes payable in the current year and
6.2the total proposed taxes, expressed as a percentage.
6.3 For purposes of this section, the amount of the tax on homesteads qualifying under
6.4the senior citizens' property tax deferral program under chapter 290B is the total amount
6.5of property tax before subtraction of the deferred property tax amount.
6.6 (e) The notice must clearly state that the proposed or final taxes do not include
6.7the following:
6.8 (1) special assessments;
6.9 (2) levies approved by the voters after the date the proposed taxes are certified,
6.10including bond referenda and school district levy referenda;
6.11 (3) a levy limit increase approved by the voters by the first Tuesday after the first
6.12Monday in November of the levy year as provided under section275.73 ;
6.13 (4) amounts necessary to pay cleanup or other costs due to a natural disaster
6.14occurring after the date the proposed taxes are certified;
6.15 (5) amounts necessary to pay tort judgments against the taxing authority that become
6.16final after the date the proposed taxes are certified; and
6.17 (6) the contamination tax imposed on properties which received market value
6.18reductions for contamination.
6.19 (f) Except as provided in subdivision 7, failure of the county auditor to prepare or
6.20the county treasurer to deliver the notice as required in this section does not invalidate the
6.21proposed or final tax levy or the taxes payable pursuant to the tax levy.
6.22 (g) If the notice the taxpayer receives under this section lists the property as
6.23nonhomestead, and satisfactory documentation is provided to the county assessor by the
6.24applicable deadline, and the property qualifies for the homestead classification in that
6.25assessment year, the assessor shall reclassify the property to homestead for taxes payable
6.26in the following year.
6.27 (h) In the case of class 4 residential property used as a residence for lease or rental
6.28periods of 30 days or more, the taxpayer must either:
6.29 (1) mail or deliver a copy of the notice of proposed property taxes to each tenant,
6.30renter, or lessee; or
6.31 (2) post a copy of the notice in a conspicuous place on the premises of the property.
6.32 The notice must be mailed or posted by the taxpayer by November 27 or within
6.33three days of receipt of the notice, whichever is later. A taxpayer may notify the county
6.34treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises to
6.35which the notice must be mailed in order to fulfill the requirements of this paragraph.
7.1 (i) For purposes of this subdivision and subdivision 6, "metropolitan special taxing
7.2districts" means the following taxing districts in the seven-county metropolitan area that
7.3levy a property tax for any of the specified purposes listed below:
7.4 (1) Metropolitan Council under section473.132 ,
473.167 ,
473.249 ,
473.325 ,
7.5473.446
,
473.521 ,
473.547 , or
473.834 ;
7.6 (2) Metropolitan Airports Commission under section473.667 ,
473.671 , or
473.672 ;
7.7and
7.8 (3) Metropolitan Mosquito Control Commission under section473.711 .
7.9 For purposes of this section, any levies made by the regional rail authorities in the
7.10county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
7.11398A shall be included with the appropriate county's levy.
7.12 (j) The governing body of a county, city, or school district may, with the consent
7.13of the county board, include supplemental information with the statement of proposed
7.14property taxes about the impact of state aid increases or decreases on property tax
7.15increases or decreases and on the level of services provided in the affected jurisdiction.
7.16This supplemental information may include information for the following year, the current
7.17year, and for as many consecutive preceding years as deemed appropriate by the governing
7.18body of the county, city, or school district. It may include only information regarding:
7.19 (1) the impact of inflation as measured by the implicit price deflator for state and
7.20local government purchases;
7.21 (2) population growth and decline;
7.22 (3) state or federal government action; and
7.23 (4) other financial factors that affect the level of property taxation and local services
7.24that the governing body of the county, city, or school district may deem appropriate to
7.25include.
7.26 The information may be presented using tables, written narrative, and graphic
7.27representations and may contain instruction toward further sources of information or
7.28opportunity for comment.
7.29 Sec. 6. Minnesota Statutes 2012, section 278.14, subdivision 1, is amended to read:
7.30 Subdivision 1. Applicability. A county must pay a refund of a mistakenly billed
7.31tax as provided in this section. As used in this section, "mistakenly billed tax" means an
7.32amount of property tax that was billed, to the extent the amount billed exceeds the accurate
7.33tax amount due to a misclassification of the owner's property under section273.13 or a
7.34mathematical error in the calculation of the tax on the owner's property, together with
7.35any penalty or interest paid on that amount. This section applies only to taxes payable
8.1in the current year and the two prior years. As used in this section, "mathematical error"
8.2is limited to an error in:
8.3(1) converting the market value of a property to tax capacity or to a referendum
8.4market value;
8.5(2) application of the tax rate as computed by the auditor under sections275.08,
8.6subdivisions 1b, 1c, and 1d ;
276A.06, subdivisions 4 and 5; and
473F.07 , subdivisions 4
8.7and 5, to the property's tax capacity or referendum market value; or
8.8(3) calculation of or eligibility for a credit.
8.9The remedy provided under this section does not apply to a misclassification under
8.10section273.13 that is due to the failure of the property owner to apply for the correct
8.11classification as required by law.
8.12 Sec. 7. Minnesota Statutes 2012, section 428A.05, is amended to read:
8.13428A.05 COLLECTION OF SERVICE CHARGES.
8.14Service charges may be imposed on the basis of the net tax capacity of the property
8.15on which the service charge is imposed but must be spread only upon the net tax capacity
8.16of the taxable property located in the geographic area described in the ordinance. Service
8.17charges based on net tax capacity may be payable and collected at the same time and in
8.18the same manner as provided for payment and collection of ad valorem taxes. When made
8.19payable in the same manner as ad valorem taxes, service charges not paid on or before the
8.20applicable due date shall be subject to the same penalty and interest as in the case of ad
8.21valorem tax amounts not paid by the respective due date. The due date for a service charge
8.22payable in the same manner as ad valorem taxes is the due date given in law for the real or
8.23personal property tax for the property on which the service charge is imposed. Service
8.24charges imposed on net tax capacity which are to become payable in the following year
8.25must be certified to the county auditor by the date provided in section429.061, subdivision
8.263 , for the annual certification of special assessment installments. Other service charges
8.27imposed must be collected as provided by ordinance. Service charges based on net tax
8.28capacity collected under sections428A.01 to
428A.10 are not included in computations
8.29under section469.177 , chapter 276A or 473F, or any other law that applies to general ad
8.30valorem levies. For the purpose of this section, "net tax capacity" means the net tax capacity
8.31most recently determined at the time that tax rates are determined under section275.08 .
8.32 Sec. 8. Minnesota Statutes 2012, section 465.82, subdivision 2, is amended to read:
8.33 Subd. 2. Contents of plan. The plan must state:
9.1(1) the specific cooperative activities the units will engage in during the first two
9.2years of the venture;
9.3(2) the steps to be taken to effect the merger of the governmental units, with
9.4completion no later than four years after the process begins;
9.5(3) the steps by which a single governing body will be created or, when the entire
9.6territory of a unit will be apportioned between or among two or more units contiguous
9.7to the unit that is to be apportioned, the steps to be taken by the governing bodies of the
9.8remaining units to provide for representation of the residents of the apportioned unit;
9.9(4) changes in services provided, facilities used, and administrative operations and
9.10staffing required to effect the preliminary cooperative activities and the final merger, and
9.11a two-, five-, and ten-year projection of expenditures for each unit if it combined and
9.12if it remained separate;
9.13(5) treatment of employees of the merging governmental units, specifically including
9.14provisions for reassigning employees, dealing with exclusive representatives, and
9.15providing financial incentives to encourage early retirements;
9.16(6) financial arrangements for the merger, specifically including responsibility for
9.17debt service on outstanding obligations of the merging units;
9.18(7) one- and two-year impact analyses, prepared by the granting state agency at the
9.19request of the local government unit, of major state aid revenues received for each unit
9.20if it combined and if it remained separate, including an impact analysis, prepared by the
9.21Department of Revenue, of any property tax revenue implications associated with tax
9.22increment financing districts and fiscal disparities under chapter276A or 473F resulting
9.23from the merger;
9.24(8) procedures for a referendum to be held before the proposed combination to
9.25approve combining the local government units, specifically stating whether a majority of
9.26those voting in each district proposed for combination or a majority of those voting on the
9.27question in the entire area proposed for combination is needed to pass the referendum; and
9.28(9) a time schedule for implementation.
9.29Notwithstanding clause (3) or any other law to the contrary, all current members of
9.30the governing bodies of the local government units that propose to combine under sections
9.31465.81
to
465.86 may serve on the initial governing body of the combined unit until a
9.32gradual reduction in membership is achieved by foregoing election of new members when
9.33terms expire until the number permitted by other law is reached.
9.34 Sec. 9. Minnesota Statutes 2012, section 469.175, subdivision 6, is amended to read:
10.1 Subd. 6. Annual financial reporting. (a) The state auditor shall develop a uniform
10.2system of accounting and financial reporting for tax increment financing districts. The
10.3system of accounting and financial reporting shall, as nearly as possible:
10.4(1) provide for full disclosure of the sources and uses of tax increments of the district;
10.5(2) permit comparison and reconciliation with the affected local government's
10.6accounts and financial reports;
10.7(3) permit auditing of the funds expended on behalf of a district, including a single
10.8district that is part of a multidistrict project or that is funded in part or whole through
10.9the use of a development account funded with tax increments from other districts or
10.10with other public money;
10.11(4) be consistent with generally accepted accounting principles.
10.12(b) The authority must annually submit to the state auditor a financial report
10.13in compliance with paragraph (a). Copies of the report must also be provided to the
10.14county auditor and to the governing body of the municipality, if the authority is not
10.15the municipality. To the extent necessary to permit compliance with the requirement
10.16of financial reporting, the county and any other appropriate local government unit or
10.17private entity must provide the necessary records or information to the authority or the
10.18state auditor as provided by the system of accounting and financial reporting developed
10.19pursuant to paragraph (a). The authority must submit the annual report for a year on or
10.20before August 1 of the next year.
10.21(c) The annual financial report must also include the following items:
10.22(1) the original net tax capacity of the district and any subdistrict under section
10.23469.177, subdivision 1
;
10.24(2) the net tax capacity for the reporting period of the district and any subdistrict;
10.25(3) the captured net tax capacity of the district;
10.26(4) any fiscal disparity deduction from the captured net tax capacity under section
10.27469.177, subdivision 3
;
10.28(5) the captured net tax capacity retained for tax increment financing under section
10.29469.177, subdivision 2
, paragraph (a), clause (1);
10.30(6) any captured net tax capacity distributed among affected taxing districts under
10.31section469.177, subdivision 2 , paragraph (a), clause (2);
10.32(7) the type of district;
10.33(8) the date the municipality approved the tax increment financing plan and the
10.34date of approval of any modification of the tax increment financing plan, the approval of
10.35which requires notice, discussion, a public hearing, and findings under subdivision 4,
10.36paragraph (a);
11.1(9) the date the authority first requested certification of the original net tax capacity
11.2of the district and the date of the request for certification regarding any parcel added
11.3to the district;
11.4(10) the date the county auditor first certified the original net tax capacity of the
11.5district and the date of certification of the original net tax capacity of any parcel added
11.6to the district;
11.7(11) the month and year in which the authority has received or anticipates it will
11.8receive the first increment from the district;
11.9(12) the date the district must be decertified;
11.10(13) for the reporting period and prior years of the district, the actual amount
11.11received from, at least, the following categories:
11.12(i) tax increments paid by the captured net tax capacity retained for tax increment
11.13financing under section469.177, subdivision 2 , paragraph (a), clause (1), but excluding
11.14any excess taxes;
11.15(ii) tax increments that are interest or other investment earnings on or from tax
11.16increments;
11.17(iii) tax increments that are proceeds from the sale or lease of property, tangible or
11.18intangible, purchased by the authority with tax increments;
11.19(iv) tax increments that are repayments of loans or other advances made by the
11.20authority with tax increments;
11.21(v) bond proceeds; and
11.22(vi) the market value homestead credit paid to the authority under section273.1384 ;
11.23(14) for the reporting period and for the prior years of the district, the actual amount
11.24expended for, at least, the following categories:
11.25(i) acquisition of land and buildings through condemnation or purchase;
11.26(ii) site improvements or preparation costs;
11.27(iii) installation of public utilities, parking facilities, streets, roads, sidewalks, or
11.28other similar public improvements;
11.29(iv) administrative costs, including the allocated cost of the authority; and
11.30(v) for housing districts, construction of affordable housing;
11.31(15) the amount of any payments for activities and improvements located outside of
11.32the district that are paid for or financed with tax increments;
11.33(16) the amount of payments of principal and interest that are made during the
11.34reporting period on any nondefeased:
11.35(i) general obligation tax increment financing bonds; and
11.36(ii) other tax increment financing bonds, including pay-as-you-go contracts and notes;
12.1(17) the principal amount, at the end of the reporting period, of any nondefeased:
12.2(i) general obligation tax increment financing bonds; and
12.3(ii) other tax increment financing bonds, including pay-as-you-go contracts and notes;
12.4(18) the amount of principal and interest payments that are due for the current
12.5calendar year on any nondefeased:
12.6(i) general obligation tax increment financing bonds; and
12.7(ii) other tax increment financing bonds, including pay-as-you-go contracts and notes;
12.8(19) if the fiscal disparities contribution under chapter276A or 473F for the district
12.9is computed under section469.177, subdivision 3 , paragraph (a), the amount of total
12.10increased property taxes to be paid from outside the tax increment financing district; and
12.11(20) any additional information the state auditor may require.
12.12(d) The reporting requirements imposed by this subdivision apply to districts
12.13certified before, on, and after August 1, 1979.
12.14 Sec. 10. Minnesota Statutes 2012, section 469.177, subdivision 3, is amended to read:
12.15 Subd. 3. Tax increment, relationship tochapters 276A and chapter 473F. (a)
12.16Unless the governing body elects pursuant to paragraph (b) the following method of
12.17computation shall apply to a district other than an economic development district for
12.18which the request for certification was made after June 30, 1997:
12.19(1) The original net tax capacity and the current net tax capacity shall be determined
12.20before the application of the fiscal disparity provisions of chapter276A or 473F. Where
12.21the original net tax capacity is equal to or greater than the current net tax capacity, there is
12.22no captured net tax capacity and no tax increment determination. Where the original net
12.23tax capacity is less than the current net tax capacity, the difference between the original
12.24net tax capacity and the current net tax capacity is the captured net tax capacity. This
12.25amount less any portion thereof which the authority has designated, in its tax increment
12.26financing plan, to share with the local taxing districts is the retained captured net tax
12.27capacity of the authority.
12.28(2) The county auditor shall exclude the retained captured net tax capacity of the
12.29authority from the net tax capacity of the local taxing districts in determining local taxing
12.30district tax rates. The local tax rates so determined are to be extended against the retained
12.31captured net tax capacity of the authority as well as the net tax capacity of the local taxing
12.32districts. The tax generated by the extension of the lesser of (A) the local taxing district
12.33tax rates or (B) the original local tax rate to the retained captured net tax capacity of the
12.34authority is the tax increment of the authority.
13.1(b) The following method of computation applies to any economic development
13.2district for which the request for certification was made after June 30, 1997, and to any
13.3other district for which the governing body, by resolution approving the tax increment
13.4financing plan pursuant to section469.175, subdivision 3 , elects:
13.5(1) The original net tax capacity shall be determined before the application of the
13.6fiscal disparity provisions of chapter276A or 473F. The current net tax capacity shall
13.7exclude any fiscal disparity commercial-industrial net tax capacity increase between
13.8the original year and the current year multiplied by the fiscal disparity ratio determined
13.9pursuant to section
276A.06, subdivision 7, or
473F.08, subdivision 6 . Where the original
13.10net tax capacity is equal to or greater than the current net tax capacity, there is no captured
13.11net tax capacity and no tax increment determination. Where the original net tax capacity is
13.12less than the current net tax capacity, the difference between the original net tax capacity
13.13and the current net tax capacity is the captured net tax capacity. This amount less any
13.14portion thereof which the authority has designated, in its tax increment financing plan, to
13.15share with the local taxing districts is the retained captured net tax capacity of the authority.
13.16(2) The county auditor shall exclude the retained captured net tax capacity of the
13.17authority from the net tax capacity of the local taxing districts in determining local taxing
13.18district tax rates. The local tax rates so determined are to be extended against the retained
13.19captured net tax capacity of the authority as well as the net tax capacity of the local taxing
13.20districts. The tax generated by the extension of the lesser of (A) the local taxing district
13.21tax rates or (B) the original local tax rate to the retained captured net tax capacity of the
13.22authority is the tax increment of the authority.
13.23(3) An election by the governing body pursuant to paragraph (b) shall be submitted
13.24to the county auditor by the authority at the time of the request for certification pursuant to
13.25subdivision 1.
13.26(c) The method of computation of tax increment applied to a district pursuant to
13.27paragraph (a) or (b) shall remain the same for the duration of the district, except that
13.28the governing body may elect to change its election from the method of computation in
13.29paragraph (a) to the method in paragraph (b).
13.30 Sec. 11. Minnesota Statutes 2012, section 469.1813, subdivision 2, is amended to read:
13.31 Subd. 2. Abatement resolution. (a) The governing body of a political subdivision
13.32may grant an abatement only by adopting an abatement resolution, specifying the terms
13.33of the abatement. In the case of a town, the board of supervisors may approve the
13.34abatement resolution. The resolution must also include a specific statement as to the
13.35nature and extent of the public benefits which the governing body expects to result from
14.1the agreement. The resolution may provide that the political subdivision will retain or
14.2transfer to another political subdivision the abatement to pay for all or part of the cost of
14.3acquisition or improvement of public infrastructure, whether or not located on or adjacent
14.4to the parcel for which the tax is abated. The abatement may reduce all or part of the
14.5property tax amount for the political subdivision on the parcel. A political subdivision's
14.6maximum annual amount for a parcel equals its total local tax rate multiplied by the
14.7total net tax capacity of the parcel.
14.8(b) The political subdivision may limit the abatement:
14.9(1) to a specific dollar amount per year or in total;
14.10(2) to the increase in property taxes resulting from improvement of the property;
14.11(3) to the increases in property taxes resulting from increases in the market value
14.12or tax capacity of the property;
14.13(4) in any other manner the governing body of the subdivision determines is
14.14appropriate; or
14.15(5) to the interest and penalty that would otherwise be due on taxes that are deferred.
14.16(c) The political subdivision may not abate tax attributable to the areawide tax under
14.17chapter276A or 473F, except as provided in this subdivision.
14.18 Sec. 12. Minnesota Statutes 2012, section 477A.011, subdivision 27, is amended to read:
14.19 Subd. 27. Revenue base. "Revenue base" means the amount levied for taxes
14.20payable in the previous year, including the levy on the fiscal disparity distribution under
14.21section276A.06, subdivision 3, paragraph (a), or
473F.08, subdivision 3 , paragraph (a);
14.22plus the originally certified local government aid in the previous year under sections
14.23477A.011
and
477A.013 ; and the taconite aids received in the previous year under sections
14.24298.28
and
298.282 .
14.25 Sec. 13. Minnesota Statutes 2012, section 477A.011, subdivision 35, is amended to read:
14.26 Subd. 35. Tax effort rate. "Tax effort rate" means the net levy for all cities divided
14.27by the sum of the city net tax capacity for all cities. For purposes of this section, "net
14.28levy" means the city levy, after all adjustments, used for calculating the local tax rate
14.29under section275.08 for taxes payable in the year prior to the aid distribution. The fiscal
14.30disparity distribution levy under chapter276A or 473F is included in net levy.
14.31 Sec. 14. REPEALER.
15.1(a) Minnesota Statutes 2012, sections 276A.01, subdivisions 1, 2, 3, 4, 5, 6, 7, 8, 9,
15.214, and 16; 276A.02; 276A.03; 276A.04; 276A.05; 276A.06, subdivisions 1, 2, 3, 4, 5, 6,
15.37, 8, and 9; 276A.07; 276A.08; and 276A.09, are repealed.
15.4(b) Minnesota Statutes 2013 Supplement, sections 276A.01, subdivisions 10, 12, 13,
15.5and 15; and 276A.06, subdivision 10, are repealed.
15.6 Sec. 15. EFFECTIVE DATE.
15.7Sections 1 to 14 are effective for taxes payable in 2015 and thereafter.
1.3correcting cross-references;amending Minnesota Statutes 2012, sections
1.4270C.89, subdivision 2; 275.025, subdivisions 1, 2; 275.065, subdivision 3;
1.5278.14, subdivision 1; 428A.05; 465.82, subdivision 2; 469.175, subdivision 6;
1.6469.177, subdivision 3; 469.1813, subdivision 2; 477A.011, subdivisions 27, 35;
1.7Minnesota Statutes 2013 Supplement, section 134.34, subdivision 4; repealing
1.8Minnesota Statutes 2012, sections 276A.01, subdivisions 1, 2, 3, 4, 5, 6, 7, 8, 9,
1.914, 16; 276A.02; 276A.03; 276A.04; 276A.05; 276A.06, subdivisions 1, 2, 3, 4,
1.105, 6, 7, 8, 9; 276A.07; 276A.08; 276A.09; Minnesota Statutes 2013 Supplement,
1.11sections 276A.01, subdivisions 10, 12, 13, 15; 276A.06, subdivision 10.
1.12BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.13 Section 1. Minnesota Statutes 2013 Supplement, section 134.34, subdivision 4, is
1.14amended to read:
1.15 Subd. 4. Limitation. (a) For calendar year 2010 and later, regional library
1.16basic system support aid shall not be provided to a regional public library system for a
1.17participating city or county which decreases the dollar amount provided for support for
1.18operating purposes of public library service below the amount provided by it for the
1.19second, or third preceding year, whichever is less. For purposes of this subdivision and
1.20subdivision 1, any funds provided under section
1.21library hours of operation shall not be considered amounts provided by a city or county for
1.22support for operating purposes of public library service. This subdivision shall not apply
1.23to participating cities or counties where the adjusted net tax capacity of that city or county
1.24has decreased, if the dollar amount of the reduction in support is not greater than the dollar
1.25amount by which support would be decreased if the reduction in support were made in
1.26direct proportion to the decrease in adjusted net tax capacity.
2.1(b) For calendar year 2009 and later, in any calendar year in which a city's or
2.2county's aid under sections
2.4may reduce its local support by the lesser of:
2.5(1) ten percent; or
2.6(2) a percent equal to the ratio of the aid and credit reimbursement reductions to the
2.7city's or county's revenue base, based on aids certified for the current calendar year. For
2.8calendar year 2009 only, the reduction under this paragraph shall be based on 2008 aid and
2.9credit reimbursement reductions under the December 2008 unallotment, as well as any
2.10aid and credit reimbursement reductions in calendar year 2009. For pay 2009 only, the
2.11commissioner of revenue will calculate the reductions under this paragraph and certify
2.12them to the commissioner of education within 15 days of May 17, 2009.
2.13(c) For taxes payable in 2010 and later, in any payable year in which the total
2.14amounts certified for city or county aids under sections
2.15than the total amounts paid under those sections in the previous calendar year, a city or
2.16county may reduce its local support by the lesser of:
2.17(1) ten percent; or
2.18(2) a percent equal to the ratio of:
2.19(i) the difference between (A) the sum of the aid it was paid under sections
2.22current calendar year under sections
2.23estimated to be paid under section
2.24(ii) its revenue base for the previous year, based on aids actually paid in the previous
2.25calendar year. The commissioner of revenue shall calculate the percent aid cut for each
2.26county and city under this paragraph and certify the percentage cuts to the commissioner
2.27of education by August 1 of the year prior to the year in which the reduced aids and
2.28credit reimbursements are to be paid. The percentage of reduction related to reductions
2.29to credit reimbursements under section
2.30available as of July 30.
2.31(d) Notwithstanding paragraph (a), (b), or (c), no city or county shall reduce its
2.32support for public libraries below the minimum level specified in subdivision 1.
2.33(e) For purposes of this subdivision, "revenue base" means the sum of:
2.34(1) its levy for taxes payable in the current calendar year, including the levy on
2.35the fiscal disparities distribution under section
2.36
3.1(2) its aid under sections
3.2(3) its taconite aid in the current calendar year under sections
3.3 Sec. 2. Minnesota Statutes 2012, section 270C.89, subdivision 2, is amended to read:
3.4 Subd. 2. Final report. The final abstract of assessments after adjustments by the
3.5State Board of Equalization and inclusion of any omitted property shall be submitted to
3.6the commissioner on or before September 1 of each calendar year. The final abstract
3.7must separately report the captured tax capacity of tax increment financing districts
3.8under section
3.9determined under
3.10and the value subject to the power line credit under section
3.11 Sec. 3. Minnesota Statutes 2012, section 275.025, subdivision 1, is amended to read:
3.12 Subdivision 1. Levy amount. The state general levy is levied against
3.13commercial-industrial property and seasonal residential recreational property, as defined
3.14in this section. The state general levy base amount is $592,000,000 for taxes payable in
3.152002. For taxes payable in subsequent years, the levy base amount is increased each year
3.16by multiplying the levy base amount for the prior year by the sum of one plus the rate of
3.17increase, if any, in the implicit price deflator for government consumption expenditures
3.18and gross investment for state and local governments prepared by the Bureau of Economic
3.19Analysts of the United States Department of Commerce for the 12-month period ending
3.20March 31 of the year prior to the year the taxes are payable. The tax under this section is
3.21not treated as a local tax rate under section
3.22unit under
3.23The commissioner shall increase or decrease the preliminary or final rate for a year
3.24as necessary to account for errors and tax base changes that affected a preliminary or final
3.25rate for either of the two preceding years. Adjustments are allowed to the extent that the
3.26necessary information is available to the commissioner at the time the rates for a year must
3.27be certified, and for the following reasons:
3.28(1) an erroneous report of taxable value by a local official;
3.29(2) an erroneous calculation by the commissioner; and
3.30(3) an increase or decrease in taxable value for commercial-industrial or seasonal
3.31residential recreational property reported on the abstracts of tax lists submitted under
3.32section
3.33section
4.1The commissioner may, but need not, make adjustments if the total difference in the tax
4.2levied for the year would be less than $100,000.
4.3 Sec. 4. Minnesota Statutes 2012, section 275.025, subdivision 2, is amended to read:
4.4 Subd. 2. Commercial-industrial tax capacity. For the purposes of this section,
4.5"commercial-industrial tax capacity" means the tax capacity of all taxable property
4.6classified as class 3 or class 5(1) under section
4.7attached machinery under class 3 and property described in section
4.8commercial-industrial tax capacity amounts are not adjusted for the captured net tax
4.9capacity of a tax increment financing district under section
4.10net tax capacity of transmission lines deducted from a local government's total net tax
4.11capacity under section
4.12tax capacities under chapter
4.13 Sec. 5. Minnesota Statutes 2012, section 275.065, subdivision 3, is amended to read:
4.14 Subd. 3. Notice of proposed property taxes. (a) The county auditor shall prepare
4.15and the county treasurer shall deliver after November 10 and on or before November 24
4.16each year, by first class mail to each taxpayer at the address listed on the county's current
4.17year's assessment roll, a notice of proposed property taxes. Upon written request by
4.18the taxpayer, the treasurer may send the notice in electronic form or by electronic mail
4.19instead of on paper or by ordinary mail.
4.20 (b) The commissioner of revenue shall prescribe the form of the notice.
4.21 (c) The notice must inform taxpayers that it contains the amount of property taxes
4.22each taxing authority proposes to collect for taxes payable the following year. In the case of
4.23a town, or in the case of the state general tax, the final tax amount will be its proposed tax.
4.24The notice must clearly state for each city that has a population over 500, county, school
4.25district, regional library authority established under section
4.26taxing districts as defined in paragraph (i), the time and place of a meeting for each taxing
4.27authority in which the budget and levy will be discussed and public input allowed, prior to
4.28the final budget and levy determination. The taxing authorities must provide the county
4.29auditor with the information to be included in the notice on or before the time it certifies
4.30its proposed levy under subdivision 1. The public must be allowed to speak at that
4.31meeting, which must occur after November 24 and must not be held before 6:00 p.m. It
4.32must provide a telephone number for the taxing authority that taxpayers may call if they
4.33have questions related to the notice and an address where comments will be received by
4.34mail, except that no notice required under this section shall be interpreted as requiring the
5.1printing of a personal telephone number or address as the contact information for a taxing
5.2authority. If a taxing authority does not maintain public offices where telephone calls can
5.3be received by the authority, the authority may inform the county of the lack of a public
5.4telephone number and the county shall not list a telephone number for that taxing authority.
5.5 (d) The notice must state for each parcel:
5.6 (1) the market value of the property as determined under section
5.7for computing property taxes payable in the following year and for taxes payable in the
5.8current year as each appears in the records of the county assessor on November 1 of the
5.9current year; and, in the case of residential property, whether the property is classified as
5.10homestead or nonhomestead. The notice must clearly inform taxpayers of the years to
5.11which the market values apply and that the values are final values;
5.12 (2) the items listed below, shown separately by county, city or town, and state general
5.13tax, net of the residential and agricultural homestead credit under section
5.14approved school levy, other local school levy, and the sum of the special taxing districts,
5.15and as a total of all taxing authorities:
5.16 (i) the actual tax for taxes payable in the current year; and
5.17 (ii) the proposed tax amount.
5.18 If the county levy under clause (2) includes an amount for a lake improvement
5.19district as defined under sections
5.20purpose must be separately stated from the remaining county levy amount.
5.21 In the case of a town or the state general tax, the final tax shall also be its proposed
5.22tax unless the town changes its levy at a special town meeting under section
5.23school district has certified under section
5.24be held in the school district at the November general election, the county auditor must
5.25note next to the school district's proposed amount that a referendum is pending and that, if
5.26approved by the voters, the tax amount may be higher than shown on the notice. In the
5.27case of the city of Minneapolis, the levy for Minneapolis Park and Recreation shall be
5.28listed separately from the remaining amount of the city's levy. In the case of the city of
5.29St. Paul, the levy for the St. Paul Library Agency must be listed separately from the
5.30remaining amount of the city's levy. In the case of Ramsey County, any amount levied
5.31under section
5.32levy. In the case of a parcel where tax increment or the fiscal disparities areawide tax
5.33under chapter
5.34proposed tax levy on the tax capacity subject to the areawide tax must each be stated
5.35separately and not included in the sum of the special taxing districts; and
6.1 (3) the increase or decrease between the total taxes payable in the current year and
6.2the total proposed taxes, expressed as a percentage.
6.3 For purposes of this section, the amount of the tax on homesteads qualifying under
6.4the senior citizens' property tax deferral program under chapter 290B is the total amount
6.5of property tax before subtraction of the deferred property tax amount.
6.6 (e) The notice must clearly state that the proposed or final taxes do not include
6.7the following:
6.8 (1) special assessments;
6.9 (2) levies approved by the voters after the date the proposed taxes are certified,
6.10including bond referenda and school district levy referenda;
6.11 (3) a levy limit increase approved by the voters by the first Tuesday after the first
6.12Monday in November of the levy year as provided under section
6.13 (4) amounts necessary to pay cleanup or other costs due to a natural disaster
6.14occurring after the date the proposed taxes are certified;
6.15 (5) amounts necessary to pay tort judgments against the taxing authority that become
6.16final after the date the proposed taxes are certified; and
6.17 (6) the contamination tax imposed on properties which received market value
6.18reductions for contamination.
6.19 (f) Except as provided in subdivision 7, failure of the county auditor to prepare or
6.20the county treasurer to deliver the notice as required in this section does not invalidate the
6.21proposed or final tax levy or the taxes payable pursuant to the tax levy.
6.22 (g) If the notice the taxpayer receives under this section lists the property as
6.23nonhomestead, and satisfactory documentation is provided to the county assessor by the
6.24applicable deadline, and the property qualifies for the homestead classification in that
6.25assessment year, the assessor shall reclassify the property to homestead for taxes payable
6.26in the following year.
6.27 (h) In the case of class 4 residential property used as a residence for lease or rental
6.28periods of 30 days or more, the taxpayer must either:
6.29 (1) mail or deliver a copy of the notice of proposed property taxes to each tenant,
6.30renter, or lessee; or
6.31 (2) post a copy of the notice in a conspicuous place on the premises of the property.
6.32 The notice must be mailed or posted by the taxpayer by November 27 or within
6.33three days of receipt of the notice, whichever is later. A taxpayer may notify the county
6.34treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises to
6.35which the notice must be mailed in order to fulfill the requirements of this paragraph.
7.1 (i) For purposes of this subdivision and subdivision 6, "metropolitan special taxing
7.2districts" means the following taxing districts in the seven-county metropolitan area that
7.3levy a property tax for any of the specified purposes listed below:
7.4 (1) Metropolitan Council under section
7.6 (2) Metropolitan Airports Commission under section
7.7and
7.8 (3) Metropolitan Mosquito Control Commission under section
7.9 For purposes of this section, any levies made by the regional rail authorities in the
7.10county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
7.11398A shall be included with the appropriate county's levy.
7.12 (j) The governing body of a county, city, or school district may, with the consent
7.13of the county board, include supplemental information with the statement of proposed
7.14property taxes about the impact of state aid increases or decreases on property tax
7.15increases or decreases and on the level of services provided in the affected jurisdiction.
7.16This supplemental information may include information for the following year, the current
7.17year, and for as many consecutive preceding years as deemed appropriate by the governing
7.18body of the county, city, or school district. It may include only information regarding:
7.19 (1) the impact of inflation as measured by the implicit price deflator for state and
7.20local government purchases;
7.21 (2) population growth and decline;
7.22 (3) state or federal government action; and
7.23 (4) other financial factors that affect the level of property taxation and local services
7.24that the governing body of the county, city, or school district may deem appropriate to
7.25include.
7.26 The information may be presented using tables, written narrative, and graphic
7.27representations and may contain instruction toward further sources of information or
7.28opportunity for comment.
7.29 Sec. 6. Minnesota Statutes 2012, section 278.14, subdivision 1, is amended to read:
7.30 Subdivision 1. Applicability. A county must pay a refund of a mistakenly billed
7.31tax as provided in this section. As used in this section, "mistakenly billed tax" means an
7.32amount of property tax that was billed, to the extent the amount billed exceeds the accurate
7.33tax amount due to a misclassification of the owner's property under section
7.34mathematical error in the calculation of the tax on the owner's property, together with
7.35any penalty or interest paid on that amount. This section applies only to taxes payable
8.1in the current year and the two prior years. As used in this section, "mathematical error"
8.2is limited to an error in:
8.3(1) converting the market value of a property to tax capacity or to a referendum
8.4market value;
8.5(2) application of the tax rate as computed by the auditor under sections
8.6subdivisions 1b, 1c, and 1d
8.7and 5, to the property's tax capacity or referendum market value; or
8.8(3) calculation of or eligibility for a credit.
8.9The remedy provided under this section does not apply to a misclassification under
8.10section
8.11classification as required by law.
8.12 Sec. 7. Minnesota Statutes 2012, section 428A.05, is amended to read:
8.13428A.05 COLLECTION OF SERVICE CHARGES.
8.14Service charges may be imposed on the basis of the net tax capacity of the property
8.15on which the service charge is imposed but must be spread only upon the net tax capacity
8.16of the taxable property located in the geographic area described in the ordinance. Service
8.17charges based on net tax capacity may be payable and collected at the same time and in
8.18the same manner as provided for payment and collection of ad valorem taxes. When made
8.19payable in the same manner as ad valorem taxes, service charges not paid on or before the
8.20applicable due date shall be subject to the same penalty and interest as in the case of ad
8.21valorem tax amounts not paid by the respective due date. The due date for a service charge
8.22payable in the same manner as ad valorem taxes is the due date given in law for the real or
8.23personal property tax for the property on which the service charge is imposed. Service
8.24charges imposed on net tax capacity which are to become payable in the following year
8.25must be certified to the county auditor by the date provided in section
8.263
8.27imposed must be collected as provided by ordinance. Service charges based on net tax
8.28capacity collected under sections
8.29under section
8.30valorem levies. For the purpose of this section, "net tax capacity" means the net tax capacity
8.31most recently determined at the time that tax rates are determined under section
8.32 Sec. 8. Minnesota Statutes 2012, section 465.82, subdivision 2, is amended to read:
8.33 Subd. 2. Contents of plan. The plan must state:
9.1(1) the specific cooperative activities the units will engage in during the first two
9.2years of the venture;
9.3(2) the steps to be taken to effect the merger of the governmental units, with
9.4completion no later than four years after the process begins;
9.5(3) the steps by which a single governing body will be created or, when the entire
9.6territory of a unit will be apportioned between or among two or more units contiguous
9.7to the unit that is to be apportioned, the steps to be taken by the governing bodies of the
9.8remaining units to provide for representation of the residents of the apportioned unit;
9.9(4) changes in services provided, facilities used, and administrative operations and
9.10staffing required to effect the preliminary cooperative activities and the final merger, and
9.11a two-, five-, and ten-year projection of expenditures for each unit if it combined and
9.12if it remained separate;
9.13(5) treatment of employees of the merging governmental units, specifically including
9.14provisions for reassigning employees, dealing with exclusive representatives, and
9.15providing financial incentives to encourage early retirements;
9.16(6) financial arrangements for the merger, specifically including responsibility for
9.17debt service on outstanding obligations of the merging units;
9.18(7) one- and two-year impact analyses, prepared by the granting state agency at the
9.19request of the local government unit, of major state aid revenues received for each unit
9.20if it combined and if it remained separate, including an impact analysis, prepared by the
9.21Department of Revenue, of any property tax revenue implications associated with tax
9.22increment financing districts and fiscal disparities under chapter
9.23from the merger;
9.24(8) procedures for a referendum to be held before the proposed combination to
9.25approve combining the local government units, specifically stating whether a majority of
9.26those voting in each district proposed for combination or a majority of those voting on the
9.27question in the entire area proposed for combination is needed to pass the referendum; and
9.28(9) a time schedule for implementation.
9.29Notwithstanding clause (3) or any other law to the contrary, all current members of
9.30the governing bodies of the local government units that propose to combine under sections
9.32gradual reduction in membership is achieved by foregoing election of new members when
9.33terms expire until the number permitted by other law is reached.
9.34 Sec. 9. Minnesota Statutes 2012, section 469.175, subdivision 6, is amended to read:
10.1 Subd. 6. Annual financial reporting. (a) The state auditor shall develop a uniform
10.2system of accounting and financial reporting for tax increment financing districts. The
10.3system of accounting and financial reporting shall, as nearly as possible:
10.4(1) provide for full disclosure of the sources and uses of tax increments of the district;
10.5(2) permit comparison and reconciliation with the affected local government's
10.6accounts and financial reports;
10.7(3) permit auditing of the funds expended on behalf of a district, including a single
10.8district that is part of a multidistrict project or that is funded in part or whole through
10.9the use of a development account funded with tax increments from other districts or
10.10with other public money;
10.11(4) be consistent with generally accepted accounting principles.
10.12(b) The authority must annually submit to the state auditor a financial report
10.13in compliance with paragraph (a). Copies of the report must also be provided to the
10.14county auditor and to the governing body of the municipality, if the authority is not
10.15the municipality. To the extent necessary to permit compliance with the requirement
10.16of financial reporting, the county and any other appropriate local government unit or
10.17private entity must provide the necessary records or information to the authority or the
10.18state auditor as provided by the system of accounting and financial reporting developed
10.19pursuant to paragraph (a). The authority must submit the annual report for a year on or
10.20before August 1 of the next year.
10.21(c) The annual financial report must also include the following items:
10.22(1) the original net tax capacity of the district and any subdistrict under section
10.24(2) the net tax capacity for the reporting period of the district and any subdistrict;
10.25(3) the captured net tax capacity of the district;
10.26(4) any fiscal disparity deduction from the captured net tax capacity under section
10.28(5) the captured net tax capacity retained for tax increment financing under section
10.30(6) any captured net tax capacity distributed among affected taxing districts under
10.31section
10.32(7) the type of district;
10.33(8) the date the municipality approved the tax increment financing plan and the
10.34date of approval of any modification of the tax increment financing plan, the approval of
10.35which requires notice, discussion, a public hearing, and findings under subdivision 4,
10.36paragraph (a);
11.1(9) the date the authority first requested certification of the original net tax capacity
11.2of the district and the date of the request for certification regarding any parcel added
11.3to the district;
11.4(10) the date the county auditor first certified the original net tax capacity of the
11.5district and the date of certification of the original net tax capacity of any parcel added
11.6to the district;
11.7(11) the month and year in which the authority has received or anticipates it will
11.8receive the first increment from the district;
11.9(12) the date the district must be decertified;
11.10(13) for the reporting period and prior years of the district, the actual amount
11.11received from, at least, the following categories:
11.12(i) tax increments paid by the captured net tax capacity retained for tax increment
11.13financing under section
11.14any excess taxes;
11.15(ii) tax increments that are interest or other investment earnings on or from tax
11.16increments;
11.17(iii) tax increments that are proceeds from the sale or lease of property, tangible or
11.18intangible, purchased by the authority with tax increments;
11.19(iv) tax increments that are repayments of loans or other advances made by the
11.20authority with tax increments;
11.21(v) bond proceeds; and
11.22(vi) the market value homestead credit paid to the authority under section
11.23(14) for the reporting period and for the prior years of the district, the actual amount
11.24expended for, at least, the following categories:
11.25(i) acquisition of land and buildings through condemnation or purchase;
11.26(ii) site improvements or preparation costs;
11.27(iii) installation of public utilities, parking facilities, streets, roads, sidewalks, or
11.28other similar public improvements;
11.29(iv) administrative costs, including the allocated cost of the authority; and
11.30(v) for housing districts, construction of affordable housing;
11.31(15) the amount of any payments for activities and improvements located outside of
11.32the district that are paid for or financed with tax increments;
11.33(16) the amount of payments of principal and interest that are made during the
11.34reporting period on any nondefeased:
11.35(i) general obligation tax increment financing bonds; and
11.36(ii) other tax increment financing bonds, including pay-as-you-go contracts and notes;
12.1(17) the principal amount, at the end of the reporting period, of any nondefeased:
12.2(i) general obligation tax increment financing bonds; and
12.3(ii) other tax increment financing bonds, including pay-as-you-go contracts and notes;
12.4(18) the amount of principal and interest payments that are due for the current
12.5calendar year on any nondefeased:
12.6(i) general obligation tax increment financing bonds; and
12.7(ii) other tax increment financing bonds, including pay-as-you-go contracts and notes;
12.8(19) if the fiscal disparities contribution under chapter
12.9is computed under section
12.10increased property taxes to be paid from outside the tax increment financing district; and
12.11(20) any additional information the state auditor may require.
12.12(d) The reporting requirements imposed by this subdivision apply to districts
12.13certified before, on, and after August 1, 1979.
12.14 Sec. 10. Minnesota Statutes 2012, section 469.177, subdivision 3, is amended to read:
12.15 Subd. 3. Tax increment, relationship to
12.16Unless the governing body elects pursuant to paragraph (b) the following method of
12.17computation shall apply to a district other than an economic development district for
12.18which the request for certification was made after June 30, 1997:
12.19(1) The original net tax capacity and the current net tax capacity shall be determined
12.20before the application of the fiscal disparity provisions of chapter
12.21the original net tax capacity is equal to or greater than the current net tax capacity, there is
12.22no captured net tax capacity and no tax increment determination. Where the original net
12.23tax capacity is less than the current net tax capacity, the difference between the original
12.24net tax capacity and the current net tax capacity is the captured net tax capacity. This
12.25amount less any portion thereof which the authority has designated, in its tax increment
12.26financing plan, to share with the local taxing districts is the retained captured net tax
12.27capacity of the authority.
12.28(2) The county auditor shall exclude the retained captured net tax capacity of the
12.29authority from the net tax capacity of the local taxing districts in determining local taxing
12.30district tax rates. The local tax rates so determined are to be extended against the retained
12.31captured net tax capacity of the authority as well as the net tax capacity of the local taxing
12.32districts. The tax generated by the extension of the lesser of (A) the local taxing district
12.33tax rates or (B) the original local tax rate to the retained captured net tax capacity of the
12.34authority is the tax increment of the authority.
13.1(b) The following method of computation applies to any economic development
13.2district for which the request for certification was made after June 30, 1997, and to any
13.3other district for which the governing body, by resolution approving the tax increment
13.4financing plan pursuant to section
13.5(1) The original net tax capacity shall be determined before the application of the
13.6fiscal disparity provisions of chapter
13.7exclude any fiscal disparity commercial-industrial net tax capacity increase between
13.8the original year and the current year multiplied by the fiscal disparity ratio determined
13.9pursuant to section
13.10net tax capacity is equal to or greater than the current net tax capacity, there is no captured
13.11net tax capacity and no tax increment determination. Where the original net tax capacity is
13.12less than the current net tax capacity, the difference between the original net tax capacity
13.13and the current net tax capacity is the captured net tax capacity. This amount less any
13.14portion thereof which the authority has designated, in its tax increment financing plan, to
13.15share with the local taxing districts is the retained captured net tax capacity of the authority.
13.16(2) The county auditor shall exclude the retained captured net tax capacity of the
13.17authority from the net tax capacity of the local taxing districts in determining local taxing
13.18district tax rates. The local tax rates so determined are to be extended against the retained
13.19captured net tax capacity of the authority as well as the net tax capacity of the local taxing
13.20districts. The tax generated by the extension of the lesser of (A) the local taxing district
13.21tax rates or (B) the original local tax rate to the retained captured net tax capacity of the
13.22authority is the tax increment of the authority.
13.23(3) An election by the governing body pursuant to paragraph (b) shall be submitted
13.24to the county auditor by the authority at the time of the request for certification pursuant to
13.25subdivision 1.
13.26(c) The method of computation of tax increment applied to a district pursuant to
13.27paragraph (a) or (b) shall remain the same for the duration of the district, except that
13.28the governing body may elect to change its election from the method of computation in
13.29paragraph (a) to the method in paragraph (b).
13.30 Sec. 11. Minnesota Statutes 2012, section 469.1813, subdivision 2, is amended to read:
13.31 Subd. 2. Abatement resolution. (a) The governing body of a political subdivision
13.32may grant an abatement only by adopting an abatement resolution, specifying the terms
13.33of the abatement. In the case of a town, the board of supervisors may approve the
13.34abatement resolution. The resolution must also include a specific statement as to the
13.35nature and extent of the public benefits which the governing body expects to result from
14.1the agreement. The resolution may provide that the political subdivision will retain or
14.2transfer to another political subdivision the abatement to pay for all or part of the cost of
14.3acquisition or improvement of public infrastructure, whether or not located on or adjacent
14.4to the parcel for which the tax is abated. The abatement may reduce all or part of the
14.5property tax amount for the political subdivision on the parcel. A political subdivision's
14.6maximum annual amount for a parcel equals its total local tax rate multiplied by the
14.7total net tax capacity of the parcel.
14.8(b) The political subdivision may limit the abatement:
14.9(1) to a specific dollar amount per year or in total;
14.10(2) to the increase in property taxes resulting from improvement of the property;
14.11(3) to the increases in property taxes resulting from increases in the market value
14.12or tax capacity of the property;
14.13(4) in any other manner the governing body of the subdivision determines is
14.14appropriate; or
14.15(5) to the interest and penalty that would otherwise be due on taxes that are deferred.
14.16(c) The political subdivision may not abate tax attributable to the areawide tax under
14.17chapter
14.18 Sec. 12. Minnesota Statutes 2012, section 477A.011, subdivision 27, is amended to read:
14.19 Subd. 27. Revenue base. "Revenue base" means the amount levied for taxes
14.20payable in the previous year, including the levy on the fiscal disparity distribution under
14.21section
14.22plus the originally certified local government aid in the previous year under sections
14.25 Sec. 13. Minnesota Statutes 2012, section 477A.011, subdivision 35, is amended to read:
14.26 Subd. 35. Tax effort rate. "Tax effort rate" means the net levy for all cities divided
14.27by the sum of the city net tax capacity for all cities. For purposes of this section, "net
14.28levy" means the city levy, after all adjustments, used for calculating the local tax rate
14.29under section
14.30disparity distribution levy under chapter
14.31 Sec. 14. REPEALER.
15.1(a) Minnesota Statutes 2012, sections 276A.01, subdivisions 1, 2, 3, 4, 5, 6, 7, 8, 9,
15.214, and 16; 276A.02; 276A.03; 276A.04; 276A.05; 276A.06, subdivisions 1, 2, 3, 4, 5, 6,
15.37, 8, and 9; 276A.07; 276A.08; and 276A.09, are repealed.
15.4(b) Minnesota Statutes 2013 Supplement, sections 276A.01, subdivisions 10, 12, 13,
15.5and 15; and 276A.06, subdivision 10, are repealed.
15.6 Sec. 15. EFFECTIVE DATE.
15.7Sections 1 to 14 are effective for taxes payable in 2015 and thereafter.
