Subd. 1. Education credit tax rate.

Each year, the respective county auditors shall determine the initial tax rate for each school district for the general education levy certified under section 126C.13, subdivision 2 or 3. That rate plus the school district's education homestead credit tax rate adjustment under section 275.08, subdivision 1e, shall be the general education credit tax rate for the district.

Subd. 1a. Education homestead credit.

Each county auditor shall determine a general education homestead credit for each homestead within the county equal to 66.2 percent for taxes payable in 1999 and 83 percent for taxes payable in 2000 and thereafter of the education credit tax rate times the net tax capacity of the homestead for the taxes payable year. The amount of general education homestead credit for a homestead may not exceed $320 for taxes payable in 1999 and $390 for taxes payable in 2000 and thereafter. In the case of an agricultural homestead, only the net tax capacity of the house, garage, and surrounding one acre of land shall be used in determining the property's education homestead credit.

Subd. 1b. Education agricultural credit.

Property classified as class 2a agricultural homestead or class 2b agricultural nonhomestead or timberland is eligible for education agricultural credit. The credit is equal to 70 percent, in the case of agricultural homestead property up to $600,000 in market value, or 63 percent, in the case of all other agricultural property or timberland, of the property's net tax capacity times the education credit tax rate determined in subdivision 1. The portion of class 2a property consisting of the house, garage, and surrounding one acre of land is not eligible for the credit under this subdivision, nor does its market value count towards the valuation threshold contained in this subdivision.

Subd. 2. Credit reimbursements.

1. (a) The commissioner of revenue shall determine the tax reductions allowed under this section for each taxes payable year, and for each school district based upon a review of the abstracts of tax lists submitted by the county auditors under section 275.29, and from any other information which the commissioner deems relevant. The commissioner of revenue shall generally compute the tax reductions at the unique taxing jurisdiction level, however the commissioner may compute the tax reductions at a higher geographic level if that would have a negligible impact, or if changes in the composition of unique taxing jurisdictions do not permit computation at the unique taxing jurisdiction level. The commissioner's determinations under this paragraph are not rules.
2. (b) The commissioner of revenue shall certify the total of the tax reductions granted under this section for each taxes payable year within each school district to the commissioner of children, families, and learning after July 1 and on or before August 1 of the taxes payable year. The commissioner of children, families, and learning shall reimburse each affected school district for the amount of the property tax reductions allowed under this section as provided in section 273.1392. The commissioner of children, families, and learning shall treat the reimbursement payments as entitlements for the same state fiscal year as certified, including with each district's initial payment all amounts that would have been paid up to that date, computed as if 90 percent of the annual reimbursement amount for the district were being paid one-twelfth in each month of the fiscal year.

Subd. 3. Appropriation.

An amount sufficient to make the payments required by this section is annually appropriated from the general fund to the commissioner of children, families, and learning.