Purpose

This bill makes changes to how school districts in Minnesota propose and describe funding for projects and tax-related referenda on ballots. It updates ballot language, cost disclosures, and procedures for capital project levies, referendums for revenue increases, and the wording used on ballots for property tax questions.

Key Provisions

Capital Project Levy Referendum (Sec. 1)

• A school district may levy a local tax rate, approved by a majority of voters, to fund an approved capital project.
• The election must occur within five years before the project starts and on a date allowed by law.
• Districts must follow existing project review requirements; if the commissioner’s review is required and not positive, the referendum needs at least 60% approval.
• The referendum can be called by the school board and may occur separately before a separate bond election or together with a bond issuance under chapter 475 (or both in a conjunctive question allowing both actions).
• Obligations (borrowing) for the project may be issued within five years of the election.
• Ballot requirements include:
  • A general project description, total estimated cost, the review status (positive/negative), the levy rate as a percent of net tax capacity, the first-year levy amount, and the maximum number of years the levy would apply.
  • A textual portion and a question asking if the capital project levy should be approved.
  • If approved, the levy amount may be certified for up to ten years.
• If the district plans a new project to start when an existing levy expires and the rate stays the same, the ballot may say the levy is being renewed (not increased). Renewal elections can be held if otherwise authorized.
• If the referendum is tied to issuing bonds, appropriate language for that issuance must be included in the question.
• The district must notify the commissioner of the results.

Referendum Revenue (Sec. 2)

• The revenue authority under existing law can be increased by voters at a referendum.
• The board may call the referendum, which must be held one or two calendar years before the increased levy becomes payable; only one election per calendar year is allowed unless by mail.
• The ballot must state the maximum increased revenue per adjusted pupil unit and may set a year-to-year schedule or tie increases to the inflation rate.
• The ballot may compare the proposed increase to the expiring levy and show the increase as an amount over the expiring authority.
• The ballot must specify the number of years (up to ten) for which the increase would apply.
• Notices for these referenda must use revised language such as extending an existing property tax referendum that is expiring.
• A revocation or reduction option is allowed, requiring a 50% plus one vote to pass.
• The board must mail notices to taxpayers at least 15 days before the referendum (and up to 45 days prior) and must identify owners based on county records. Notices must project anticipated tax increases for common property types (homes, farms, apartments, commercial/industrial).
• After results are certified, the district must notify the commissioner.
• The text also requires specific notice language about extending or increasing revenue and how it will affect tax bills.

Ballot Notice Requirements (Sec. 3)

• Ballot notices for property tax levies or debt (including bond elections) must include a prominent notice: “BY VOTING YES ON THIS BALLOT QUESTION YOU ARE VOTING FOR A PROPERTY TAX INCREASE.”
• The section clarifies which entities are included as local governmental subdivisions and notes that the statement is in addition to other required ballot contents.
• This requirement does not apply to school district bond elections if debt service payments come entirely from transfers within the capital fund to the debt service fund.

Section 4

• The text for this section is not included in the provided excerpt, so no summary is available for this part.

Significant Changes to Law

• Explicit ballot language and disclosures for capital project levies and revenue increases, including required cost estimates, tax impact, and duration.
• New options for conjunctive referenda that allow voters to authorize both a capital levy and bond issuance in a single question.
• A higher approval threshold (60%) if a commissioner review is not positive for a capital project referendum.
• Requirements for renewal/extension language when replacing or renewing existing levies at the same rate.
• Inflation-indexed or adjustable revenue increases tied to the adjusted pupil unit, with clear notices to taxpayers and comparisons to expiring authority.
• Uniform ballot notice language emphasizing property tax Increases on certain tax questions, and clarifications for bond elections.

Practical Effects

• Voters will see more explicit cost information on ballots for school projects.
• Districts have clearer pathways to renew existing levies without raising tax rates if renewed.
• Some referenda will require a higher level of voter support if oversight reviews are not favorable.
• Ballot notices will uniformly include a warning about tax increases, affecting how taxpayers perceive school district funding questions.

Relevant Terms - capital project levy referendum - capital project levy - net tax capacity - adjusted pupil unit - inflation rate / inflationary increase - referendum revenue - issuance of obligations / debt obligations - chapter 475 - positive review / negative review - commissioner’s review and comment - conjunctive question - renewal / extend (renewal language) - revocation / reduction referendum - 205A.05 (date setting) - 123B.71 (project requirements) - 275.60 (ballot notice) - boldface notice language: "BY VOTING YES ON THIS BALLOT QUESTION YOU ARE VOTING FOR A PROPERTY TAX INCREASE" - tax impact notices (typical property types: residential, agricultural, apartments, commercial/industrial) - county auditor / county treasurer owner records - issuer “textual portion” on ballots - Section 126C.17 Subd. 9 (Referendum revenue) - Section 126C.10 Subd. 1 (referenced revenue authority) - Section 123B.63 Subd. 3 (capital project levy provisions) - Section 275.60 (ballot notice requirements) - Section 275.60 (bond referenda and notices)