Subd. 1. Definitions.

1. (a) For purposes of this section, the eligible natural disaster debt service revenue of a district is defined as the amount needed to produce between five and six percent in excess of the amount needed to meet when due the principal and interest payments on the obligations of the district that would otherwise qualify under section 123B.53 under the following conditions:

   1. (1) the district was impacted by a natural disaster event or area occurring January 1, 2005, or later, as declared by the President of the United States of America, which is eligible for Federal Emergency Management Agency payments;
   2. (2) the natural disaster caused $500,000 or more in damages to school district buildings; and
   3. (3) the repair and replacement costs are not covered by insurance payments or Federal Emergency Management Agency payments.
2. (b) For purposes of this section, the adjusted net tax capacity equalizing factor equals the quotient derived by dividing the total adjusted net tax capacity of all school districts in the state for the year before the year the levy is certified by the total number of adjusted pupil units in the state for the year prior to the year the levy is certified.
3. (c) For purposes of this section, the adjusted net tax capacity determined according to sections 127A.48 and 273.1325 shall be adjusted to include the tax capacity of property generally exempted from ad valorem taxes under section 272.02, subdivision 64.

Subd. 2. Notification.

A district eligible for natural disaster debt service equalization revenue under subdivision 1 must notify the commissioner of the amount of its intended natural disaster debt service revenue calculated under subdivision 1 for all bonds sold prior to the notification by July 1 of the calendar year the levy is certified.

Subd. 3. Natural disaster debt service equalization revenue.

The debt service equalization revenue of a district equals the greater of zero or the eligible debt service revenue, minus the greater of zero or the difference between:

1. (1) the amount raised by a levy of ten percent times the adjusted net tax capacity of the district; and
2. (2) the district's eligible debt service revenue under section 123B.53.

Subd. 4. Equalized natural disaster debt service levy.

A district's equalized natural disaster debt service levy equals the district's natural disaster debt service equalization revenue times the lesser of one or the ratio of:

1. (1) the quotient derived by dividing the adjusted net tax capacity of the district for the year before the year the levy is certified by the adjusted pupil units in the district for the school year ending in the year prior to the year the levy is certified; to
2. (2) 300 percent of the statewide adjusted net tax capacity equalizing factor.

Subd. 5. Natural disaster debt service equalization aid.

A district's natural disaster debt service equalization aid equals the difference between the district's natural disaster debt service equalization revenue and the district's equalized natural disaster debt service levy.

Subd. 6. Natural disaster debt service equalization aid payment schedule.

Debt service equalization aid must be paid according to section 127A.45, subdivision 10.