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HF 535

Natural disaster debt service equalization aid program broadened to assist school districts with a high percentage of property excluded from tax rolls.

2025-2026 Regular Session Introduced by Matt Bliss

Minnesota bill expands disaster debt aid to school districts with high percentages of tax-exempt properties to address chronic revenue shortfalls.

Introduction and first reading, referred to Education Finance
#disasters #education-k-12
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Bill Summary · HF 535

Legislative bill overview

HF 535 expands Minnesota's Natural Disaster Debt Service Equalization Aid program to include school districts that have a high percentage of property exempt from tax rolls (such as government, religious, or non-profit properties). Previously, the program only addressed debt service challenges from natural disasters; this bill extends eligibility to districts facing structural revenue challenges from tax-exempt properties in their jurisdictions.

Why is this important

School districts with significant tax-exempt property face chronic revenue shortfalls because they cannot tax these properties while still providing services to them. This bill recognizes that some districts face similar fiscal pressures to disaster-affected districts and could help equalize funding disparities across Minnesota schools.

Potential points of contention

  • Cost to state budget: Expanding aid programs increases state spending; legislators may debate whether Minnesota can afford this expansion or whether it should prioritize other education funding needs
  • Definition and eligibility: The bill's criteria for "high percentage" of exempt property needs clear definition; districts may dispute whether thresholds are fair or whether they qualify
  • Alternative solutions: Some may argue the state should address this through property tax reform, municipal aid changes, or other structural mechanisms rather than new aid programs

Compiled from official sources — confirm details with the bill’s official record.

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