§ 273.1398 — Disparity Reduction Aid and Credit
Plain-Language Summary
This section creates the disparity reduction aid and credit, two programs that lower property tax burdens in certain areas. The disparity reduction aid is certified to taxing districts at the prior year's amount, but the aid for cities has been zero for taxes payable in 1994 and later. The disparity reduction credit applies to class 4a and class 3a property in a border city eligible to have an enterprise zone, and reduces the tax on that property to 1.6 percent of its taxable market value. The commissioner certifies the aid before September 1 of the year before distribution, the state reimburses local governments for the forgone taxes, and the amounts are appropriated annually from the general fund.
273.1398 DISPARITY REDUCTION AID AND CREDIT.
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Subdivision 1.Definitions.
(a) In this section, the terms defined in this subdivision have the meanings given them.
(b) “Unique taxing jurisdiction” means the geographic area subject to the same set of local tax rates.
(c) For purposes of calculating and allocating disparity reduction aid authorized in subdivision 3, “gross taxes levied on all properties,” “gross taxes,” or “taxes levied” means the total net tax capacity based taxes levied on all properties except that levied on the captured value of tax increment districts as defined in section 469.177, subdivision 2, and that levied on the portion of commercial industrial properties’ assessed value or gross tax capacity, as defined in section 473F.02, subdivision 3, subject to the areawide tax as provided in section 473F.08, subdivision 6, in a unique taxing jurisdiction. “Gross taxes” are before any reduction for disparity reduction aid but “taxes levied” are after any reduction for disparity reduction aid. Gross taxes levied or taxes levied cannot be less than zero. §
Subd. 1a.
MS 2002 [Repealed, 2004 c 228 art 3 s 18] §
Subd. 2.
MS 2002 [Repealed, 1Sp2003 c 21 art 6 s 17] §
Subd. 2a.
MS 1993 Supp [Repealed, 1994 c 416 art 1 s 65] §
Subd. 2b.
MS 1990 [Repealed, 1990 c 604 art 4 s 21] §
Subd. 2c.
MS 2002 [Repealed, 1Sp2003 c 21 art 6 s 17] §
Subd. 2d.Aids determined as of June 30.
For aid amounts authorized under subdivision 3: (i) if the effective date for a municipal incorporation, consolidation, annexation, detachment, dissolution, or township organization is on or before June 30 of the year preceding the aid distribution year, the change in boundaries or form of government shall be recognized for aid determinations for the aid distribution year; (ii) if the effective date for a municipal incorporation, consolidation, annexation, detachment, dissolution, or township organization is after June 30 of the year preceding the aid distribution year, the change in boundaries or form of government shall not be recognized for aid determinations until the following year. §
Subd. 2e.
MS 2002 [Repealed, 2004 c 228 art 3 s 18] §
Subd. 3.Disparity reduction aid.
The amount of disparity aid certified for each taxing district within each unique taxing jurisdiction is the amount certified for taxes payable in the prior year. §
Subd. 3a.Disparity reduction aid to cities.
Notwithstanding the provisions of subdivision 3 or section 275.08, subdivision 1d, the amount of disparity reduction aid for a city for aid payable in calendar year 1994 and thereafter is zero, and the local tax rate for taxes payable in 1994 and thereafter for a city shall not be adjusted under section 275.08, subdivision 1d. For purposes of this subdivision, city means a statutory or home rule charter city. §
Subd. 4.Disparity reduction credit.
(a) Class 4a and class 3a property qualifies for a disparity reduction credit if the property is located in a border city that is eligible to have an enterprise zone, as defined in section 469.166.
(b) The credit is an amount sufficient to reduce (i) the taxes levied on class 4a property to 1.6 percent of the property’s taxable market value and (ii) the tax on class 3a property to 1.6 percent of taxable market value.
(c) The county auditor shall annually certify the costs of the credits to the Department of Revenue. The department shall reimburse local governments for the property taxes forgone as the result of the credits in proportion to their total levies. §
Subd. 4a.
MS 2006 [Repealed, 2007 c 13 art 2 s 11] §
Subd. 4b.
MS 2012 [Repealed, 2014 c 308 art 9 s 94] §
Subd. 4c.
MS 2006 [Repealed, 2007 c 13 art 2 s 11] §
Subd. 4d.
MS 2002 [Repealed, 1Sp2003 c 21 art 6 s 17] §
Subd. 5.
MS 1992 [Repealed, 1993 c 375 art 4 s 21] §
Subd. 5a.
MS 1992 [Repealed, 1Sp1993 c 1 art 2 s 7] §
Subd. 5b.
MS 1994 [Repealed, 1996 c 471 art 3 s 55] §
Subd. 5c.
MS 1992 [Repealed, 1Sp1993 c 1 art 2 s 7] §
Subd. 6.Payment.
The commissioner shall certify the aids provided in subdivision 3 before September 1 of the year preceding the distribution year to the county auditor of the affected local government. The aids provided in subdivision 3, must be paid to local governments other than school districts at the times provided in section 477A.015 for payment of local government aid to taxing jurisdictions, except that the first one-half payment of disparity reduction aid provided in subdivision 3 must be paid on or before August 31. The disparity reduction credit provided in subdivision 4 must be paid to taxing jurisdictions other than school districts at the time provided in section 473H.10, subdivision 3. Aids and credit reimbursements to school districts must be certified to the commissioner of education and paid under section 273.1392. Payment shall not be made to any taxing jurisdiction that has ceased to levy a property tax. §
Subd. 7.
MS 1995 Supp [Repealed, 1994 c 587 art 3 s 21 para (b)] §
Subd. 8.Appropriation.
An amount sufficient to pay the aids and credits provided under this section for school districts, intermediate school districts, or any group of school districts levying as a single taxing entity, is annually appropriated from the general fund to the commissioner of education. An amount sufficient to pay the aids and credits provided under this section for counties, cities, towns, and special taxing districts is annually appropriated from the general fund to the commissioner of revenue. A jurisdiction’s aid amount may be increased or decreased based on any prior year adjustments for property tax credit or aid programs.
History:
1988 c 719 art 5 s 26,84; 1989 c 277 art 2 s 33-36; 1989 c 329 art 6 s 47; 1Sp1989 c 1; art 2 s 11; art 3 s 14-21,33; art 6 s 8; 1990 c 480 art 7 s 9-13; 1990 c 604 art 3 s 20; art 4 s 2-4; 1991 c 130 s 37; 1991 c 199 art 1 s 62; 1991 c 291 art 3 s 1-4; art 12 s 10; 1991 c 292 art 7 s 22; 1992 c 499 art 12 s 29; 1992 c 511 art 1 s 8,9; art 3 s 1; art 4 s 8,27; 1993 c 224 art 1 s 28,29; art 14 s 16; 1993 c 375 art 3 s 18-20; art 4 s 3-5; 1Sp1993 c 1 art 2 s 5; 1994 c 416 art 1 s 21,22; 1994 c 587 art 3 s 8; 1995 c 264 art 3 s 11; art 16 s 10; 1Sp1995 c 3 art 16 s 13; 1996 c 471 art 3 s 13-15; art 11 s 1; 1997 c 7 art 1 s 109,110; 1997 c 31 art 3 s 7; 1997 c 231 art 11 s 6; 1998 c 254 art 1 s 75; 1998 c 389 art 2 s 15-17; 1998 c 397 art 11 s 3; 1999 c 243 art 5 s 22,23; art 11 s 2,3; 2000 c 260 s 43; 2000 c 490 art 6 s 3; 1Sp2001 c 5 art 3 s 40; art 5 s 5-8; 2002 c 377 art 4 s 20,21; art 6 s 3,4; art 10 s 8; 2003 c 127 art 5 s 18,19; 2003 c 130 s 12; 1Sp2003 c 21 art 6 s 1-4; 2004 c 228 art 1 s 76 subd 7; art 3 s 6-9; 2006 c 259 art 5 s 5; 2008 c 154 art 13 s 30; 2008 c 277 art 1 s 58; 2012 c 294 art 2 s 7; 2013 c 143 art 2 s 1; art 14 s 30,31; 2014 c 275 art 1 s 89; 2014 c 308 art 1 s 3; art 9 s 30
History: History: 1988 c 719 art 5 s 26,84; 1989 c 277 art 2 s 33-36; 1989 c 329 art 6 s 47; 1Sp1989 c 1; art 2 s 11; art 3 s 14-21,33; art 6 s 8; 1990 c 480 art 7 s 9-13; 1990 c 604 art 3 s 20; art 4 s 2-4; 1991 c 130 s 37; 1991 c 199 art 1 s 62; 1991 c 291 art 3 s 1-4; art 12 s 10; 1991 c 292 art 7 s 22; 1992 c 499 art 12 s 29; 1992 c 511 art 1 s 8,9; art 3 s 1; art 4 s 8,27; 1993 c 224 art 1 s 28,29; art 14 s 16; 1993 c 375 art 3 s 18-20; art 4 s 3-5; 1Sp1993 c 1 art 2 s 5; 1994 c 416 art 1 s 21,22; 1994 c 587 art 3 s 8; 1995 c 264 art 3 s 11; art 16 s 10; 1Sp1995 c 3 art 16 s 13; 1996 c 471 art 3 s 13-15; art 11 s 1; 1997 c 7 art 1 s 109,110; 1997 c 31 art 3 s 7; 1997 c 231 art 11 s 6; 1998 c 254 art 1 s 75; 1998 c 389 art 2 s 15-17; 1998 c 397 art 11 s 3; 1999 c 243 art 5 s 22,23; art 11 s 2,3; 2000 c 260 s 43; 2000 c 490 art 6 s 3; 1Sp2001 c 5 art 3 s 40; art 5 s 5-8; 2002 c 377 art 4 s 20,21; art 6 s 3,4; art 10 s 8; 2003 c 127 art 5 s 18,19; 2003 c 130 s 12; 1Sp2003 c 21 art 6 s 1-4; 2004 c 228 art 1 s 76 subd 7; art 3 s 6-9; 2006 c 259 art 5 s 5; 2008 c 154 art 13 s 30; 2008 c 277 art 1 s 58; 2012 c 294 art 2 s 7; 2013 c 143 art 2 s 1; art 14 s 30,31; 2014 c 275 art 1 s 89; 2014 c 308 art 1 s 3; art 9 s 30