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S.F. No. 2247 - Joint Powers Cooperative Secondary Facility; School Construction and Improvement Trust Account
 
Author: Senator David J. Tomassoni
 
Prepared By: Eric S. Silvia, Senate Counsel (651/296-1771)
Bjorn E. Arneson, Senate Analyst (651/296-3812)
 
Date: March 12, 2014



 

Section 1. Cooperatively operated secondary facilities. Provides that a district or cooperative entity operating a cooperative secondary program is eligible for a cooperative facilities grant.

Section 2. Joint Powers Cooperative Facility.

Subdivision 1. Schools may be jointly operated. Authorizes districts to jointly operate a secondary school facility.

Subdivision 2. Expanded program offerings. Requires that a jointly operated secondary program provide enhanced learning opportunities and broader curriculum.

Subdivision 3. Revenue. Provides that a joint program under this section is eligible for consolidation aid and cooperative facilities grants.

Subdivision 4. Duty to maintain elementary and secondary schools met. Provides that a district operating a joint program satisfies its duty to maintain a secondary school.

Subdivision 5. Estimated market value limit exclusion. Provides that bonds issued by a school district for a cooperative facility are not subject to the net debt limit.

Subdivision 6. Allocation of levy authority for joint facility. Provides that the debt for a cooperative facility may be assigned to member districts according to the joint powers agreement.

Subdivision 7. Effect of consolidation. Provides that the joint powers agreement may specify how districts certify levies in the event that they consolidate.

Subdivision 8. Bonds. Provides for the issuance of bonds either jointly or individually.  Member districts must only issue bonds and certify a property tax levy upon passage of a voter referendum and a resolution adopted by the district board.

Subdivision 9. Election. Provides a district the option to conduct a referendum on a joint facility separately or at the same time as the bond election.  If the facility referendum does not pass, the district may not proceed with the bond sale.

Section 3. Consolidation transition aid.

Subdivision 1. Eligibility and use. Provides that a district operating a cooperative facility is eligible for consolidation transition aid.

Subdivision 2. Aid. Increases the per-pupil allowance for consolidation transition aid and eliminates the upper threshold for the number of pupil units that may generate aid.  Provides that a district may receive aid for up to five years.

Subdivision 3. Levy. No change.

Subdivision 4. New districts. Conforming changes.

Section 4. Duty to maintain elementary and secondary schools. Provides that a district operating a joint program satisfies its duty to maintain a secondary school.

Section 5. Debt service revenue definitions. Clarifies that the portion of taconite payments from the school construction and improvement trust account are excluded from eligible debt service revenue for school districts.

Section 6. Taconite payment and other reductions. Provides that payments from the Iron Range School Construction and Improvement Trust Account may reduce a district’s debt service levy by more than 50 percent.

Section 7. Royalty. Defines "royalty" as the amount in money or value of property received by any person having right, title, or interest in a tract of land in Minnesota for permission to explore, mine, take out, and remove minerals or ore, but excluding aggregate material.

Section 8. Credit; royalty excise tax. Provides a credit equal to the amount of the royalty excise tax established in Section 9.

Section 9. Excise tax; mineral royalties. Imposes an excise tax equal to 5.5 percent of the gross amount of royalties received or accrued during the taxable year on individuals, trusts, estates, and corporations subject to the corporate franchise tax.

Section 10. Expenses, interest, and taxes. Updates a cross-reference relating to the new excise tax established in Section 9.

Section 11. Distribution of revenues. Provides that all revenue derived from the excise tax established in Section 9, less the amount of credits due under the credit established in Section 8, must be deposited in and credited to the Iron Range school construction and improvement trust account.

Section 12. Royalty excise tax. Provides for a royalty excise tax for those persons paying royalties under the excise tax established in Section 9.  The commissioner of revenue is directed to provide appropriate tables and forms for the withholdings.

Section 13. School construction and improvement trust account. Provides for various allocations to the Iron Range Resources and Rehabilitation Board to be then deposited into the Iron Range school construction and improvement trust established in Section 16.

Section 14. Remainder; production tax. Provides that $2,500,000 of any remaining proceeds from the production tax, after statutorily obligated distributions, must be deposited into the Iron Range school construction and improvement trust account.

Section 15. Use of money; Douglas J. Johnson economic protection trust. Expands the allowable use of proceeds from the trust to include payments to school districts or to pay bonds or to allocate money to the Iron Range school construction and improvement trust if that trust has insufficient funds.

Section 16. Iron Range school construction and improvement trust account. Establishes the Iron Range school construction and improvement trust account and provides for distributions from the account for reduction of the district’s net debt service levy for a period specified.  Funds from the account must be used to finance school buildings and construction/improvements to school districts location in the taconite relief area.  Authorizes the Commissioner of the Iron Range Resources and Rehabilitation Board to adjust payments to districts under certain conditions and enter into additional agreements to distribute excess funds.

Section 17. Consolidation transition aid appropriation. Amends fiscal year 2015 appropriations for consolidation transition aid.

Section 18. State bond authorization. Appropriates money for cooperative facilities grants and authorizes the Commissioner of Management and Budget to sell and issue bonds to provide the money appropriated within this section.

Section 19. Repealer. Repeals an existing definition of ‘royalty’. A new definition of royalty is provided in Section 7.

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