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. - _... GLOSSARY OF TERMS . CIIlCUlT BIlEAKEIl - A state-paid property tax refund MAIlKET VALUE - An assessor's estimate of what prop- program for homeowners who have property taxes erty would be worth if sold on the open market. out of proportion with their income. A similar The market value is set on January 2 of the year program is also available to renters. before taxes are payable. , , CLASS IlATES - The percent of market value set by state MAIlKET VALUE LEVIES - Voter approved levies applied law that establishes the property's tax capacity to a parcel's market value rather than tax capacity. subject to the property tax. (See Table A for a , sample list of class rates) PIl0PEIlTY CLASS - The classification assigned to each parcel of property based on the use of the propeny. FISCAL DISPAIlI,.IES PIlOGIlAMS - Local units of govern- For example, owner-occupied residential property ment in the Twin Cities metropolitan area and on is classified as homestead. the Iron Range participate in property tax base sharing programs. Under these two programs. a PIlOPEIlTY TAX LEVY - The tax imposed by a local unit of portion of the growth in commercial and industrial government. The tax is established on or around property value of each city and township is contrib- December 28 of the year preceding the year that the uted to a tax base sharing pool. Each city and levy will be paid by taxpayers. township then receives a distribution of property value from the pool based on market value and T AIlGEl'ING IlEFUND - A state paid property tax refund population in each city. for homeowners whose property taxes have in- creased by more than 12 percent. A similar pro- HOMESl'EAD AND AGIlICULTUIlAL CIlEDlT AID (HAC A) - A gram is available to cabin owners. . property tax relief program that replaced the former homestead credit program and the agricultural ' TAX CAPACITY - The valuation of property based on credit program. HACA is tied to class rate reduc- market value and statutory class rates, The prop. tions for certain classes of property. erty tax for each parcel is based on its tax capacity. LOCAL GOVEIlNMENT AID (LGA) - A state government TAKABLE ,.AX CAPACITY - The sum oCthe tax capacities revenue sharing program for cities and townships of all parcels in the taxing jurisdiction after adjust- that is intended to provide an alternative to the ments for fIScal disparities. tax increment and other property tax. LOA is distributed through a formula property not available for general tax purposes. based on tax base, population, population decline. age of housing, and the percent of market value TOTAL TA.'< CAPACITY - The amount'computed by fllSt classified as commercial or industrial. No city can totaling the tax capacities-ofall parcels of property receive less LOA than it did in 1993. within a city. LOCAL PERFOIlMANCE AID (LPA) - A state program for TOTAL TA.'< IlATE - the sum of the local tax rates for all cities and counties that is intended to provide an taxing authorities that levy against a parcel of incentive for local governments to develop penor- property (county. school. city or town, and special , mance measurement systems. taxing districts). The total tax rate times the parcel's tax capacity equals the amount of taxes the Loc.u TA.X !lATE - The rate used to compute most taxes property pays (not counting any voter-approved for each parcel of property. Local tax rate is market value levies). computed by dividing the certified levy (after reduction for fiscal disparities distribution levy. if TIlUTH IN TAXATION - The taxation and notification law, applicable, and county disparity reduction aid) by which requires local govemments to set estimated . the taxable tax capacity. levies, inform taxpayers about the impacts. and hold a separate hearing 10 take taxpayer input. Slide No.- 14