PROPERTY TAX School District Lease Purchase Agreements

							PROPERTY TAX School District Lease Purchase Agreements April 16, 2008 Yes Department of Revenue Analysis of H.F. 4127 (Jaros) / S.F. 3832 (Bakk) F.Y. 2008 General Fund Effective day following final enactment. EXPLANATION OF THE BILL The bill modifies the qualifications for certain lease purchase agreements. School districts with less than or equal to 50% protected students could no longer levy for lease purchase agreements relating to a comprehensive plan for elimination of segregation. School districts that no longer qualify may only levy amounts for which they are legally obligated to repay under a binding contract. The district may not levy for lease purchases for other purposes without authorization through an election. REVENUE ANALYSIS DETAIL • According to information from the Department of Education, this may affect the Duluth School district. The district issued $59 million of alternative facility bonds in January, and $95 million of 2008 lease obligations are pending. Additional planned lease levies in payable 2011 would be affected. • Net taxes would be affected by the levy change. A portion of those levies would be paid by homesteads. Property tax refunds would be proportionately affected by homestead net tax changes. However, it is assumed that the 2008 lease obligations will be contracted before this bill is enacted, so there would be no general fund impact in the forecast period. Number of Taxpayers: Property owners in the Duluth school district. Source: Minnesota Department of Revenue Property Tax Division – Research Unit http://www.taxes.state.mn.us/taxes/legal_policy
hf4127(sf3832)_pt_1 /lm
DOR Administrative Costs/Savings

No
X

$0

Fund Impact F.Y. 2009 F.Y. 2010 (000’s) $0 $0

F.Y. 2011 $0