HF 3082

as introduced - 86th Legislature (2009 - 2010) Posted on 02/22/2010 11:07am

A bill for an act
relating to the state budget; reducing appropriations to balance the state
budget; modifying calculation of state aids and credits payable to cities,
counties, school districts, and other local governments; appropriating money;
amending Minnesota Statutes 2008, sections 126C.10, subdivision 2; 273.1384,
subdivisions 1, 2; 477A.013, subdivision 9; 477A.03, subdivisions 2a, 2b;
repealing Minnesota Statutes 2008, section 477A.03, subdivision 5.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2008, section 126C.10, subdivision 2, is amended to read:

Subd. 2.

Basic revenue.

The basic revenue for each district equals the formula
allowance times the adjusted marginal cost pupil units for the school year. The formula
allowance for fiscal year deleted text begin 2007 is $4,974. The formula allowance for fiscal year 2008 is
$5,074 and deleted text end new text begin 2010 is $5,124, new text end the formula allowance for fiscal year deleted text begin 2009 deleted text end new text begin 2011 is $4,659 and
the formula allowance for fiscal year 2012 new text end and subsequent years is deleted text begin $5,124 deleted text end new text begin $4,785 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for fiscal year 2011 and later.
new text end

Sec. 2.

Minnesota Statutes 2008, section 273.1384, subdivision 1, is amended to read:

Subdivision 1.

Residential homestead market value credit.

Each county auditor
shall determine a homestead credit for each class 1a, 1b, and 2a homestead property within
the county equal to deleted text begin 0.4 deleted text end new text begin 0.35 new text end percent of the first $76,000 of market value of the property
minus deleted text begin .09 deleted text end new text begin 0.121 new text end percent of the market value in excess of $76,000. The credit amount may
not be less than zero. In the case of an agricultural or resort homestead, only the market
value of the house, garage, and immediately surrounding one acre of land is eligible in
determining the property's homestead credit. In the case of a property that is classified as
part homestead and part nonhomestead, (i) the credit shall apply only to the homestead
portion of the property, but (ii) if a portion of a property is classified as nonhomestead
solely because not all the owners occupy the property, not all the owners have qualifying
relatives occupying the property, or solely because not all the spouses of owners occupy
the property, the credit amount shall be initially computed as if that nonhomestead portion
were also in the homestead class and then prorated to the owner-occupant's percentage
of ownership. For the purpose of this section, when an owner-occupant's spouse does
not occupy the property, the percentage of ownership for the owner-occupant spouse is
one-half of the couple's ownership percentage.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2011 and
thereafter.
new text end

Sec. 3.

Minnesota Statutes 2008, section 273.1384, subdivision 2, is amended to read:

Subd. 2.

Agricultural homestead market value credit.

Property classified as
agricultural homestead under section 273.13, subdivision 23, paragraph (a), is eligible
for an agricultural credit. The credit is computed using the property's agricultural credit
market value, defined for this purpose as the property's market value excluding the market
value of the house, garage, and immediately surrounding one acre of land. The credit is
equal to deleted text begin 0.3 deleted text end new text begin 0.24 new text end percent of the first $115,000 of the property's agricultural credit market
value minus deleted text begin .05 deleted text end new text begin .04 new text end percent of the property's agricultural credit market value in excess
of $115,000, subject to a maximum reduction of deleted text begin $115 deleted text end new text begin $92 new text end . In the case of property that
is classified as part homestead and part nonhomestead solely because not all the owners
occupy or farm the property, not all the owners have qualifying relatives occupying or
farming the property, or solely because not all the spouses of owners occupy the property,
the credit must be initially computed as if that nonhomestead agricultural land was also
classified as agricultural homestead and then prorated to the owner-occupant's percentage
of ownership.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2011 and
thereafter.
new text end

Sec. 4.

Minnesota Statutes 2008, section 477A.013, subdivision 9, is amended to read:

Subd. 9.

City aid distribution.

(a) In calendar year deleted text begin 2009 deleted text end new text begin 2011 new text end and thereafter, each
city shall receive an aid distribution equal to the sum of (1) the city formula aid under
subdivision 8, and (2) its city aid base.

(b) For aids payable in deleted text begin 2009 deleted text end new text begin 2011 new text end only, the total aid deleted text begin for any city shall not exceed the
sum of (1) 35 percent of the city's net levy for the year prior to the aid distribution, plus
(2) its total aid in the previous year. deleted text end new text begin for the previous year means the total amount paid in
calendar year 2010, after accounting for unallotments and reductions made after the aid
amounts were certified. For aids payable in 2012 and thereafter the total aid paid in the
previous year means the amount of aid certified to be paid in the previous year.
new text end

(c) new text begin (1) For aids payable in 2011 only, the total aid for any city shall not exceed the
sum of (i) 75 percent of its aid loss in 2010 due to unallotments and reductions made after
amounts were certified, plus (ii) its total aid in the previous year. new text end

new text begin (2) new text end For aids payable in deleted text begin 2010 deleted text end new text begin 2012 new text end and thereafter, the total aid for any city shall not
exceed the sum of deleted text begin (1) deleted text end new text begin (i) new text end ten percent of the city's net levy for the year prior to the aid
distribution plus deleted text begin (2) deleted text end new text begin (ii) new text end its total aid in the previous year.

new text begin (3) new text end For aids payable in deleted text begin 2009 deleted text end new text begin 2011 new text end and thereafter, the total aid for any city with a
population of 2,500 or more may not be less than its total aid under this section in the
previous year minus the lesser of $10 multiplied by its population, or ten percent of its net
levy in the year prior to the aid distribution.

(d) For aids payable in deleted text begin 2010 deleted text end new text begin 2011 new text end and thereafter, the total aid for a city with a
population less than 2,500 must not be less than the amount it was certified to receive in
the previous year minus the lesser of $10 multiplied by its population, or five percent of its
2003 certified aid amount. deleted text begin For aids payable in 2009 only, the total aid for a city with a
population less than 2,500 must not be less than what it received under this section in the
previous year unless its total aid in calendar year 2008 was aid under section 477A.011,
subdivision 36, paragraph (s), in which case its minimum aid is zero.
deleted text end

(e) A city's aid loss under this section may not exceed $300,000 in any year in
which the total city aid appropriation under section 477A.03, subdivision 2a, is equal or
greater than the appropriation under that subdivision in the previous year, unless the
city has an adjustment in its city net tax capacity under the process described in section
469.174, subdivision 28.

(f) If a city's net tax capacity used in calculating aid under this section has decreased
in any year by more than 25 percent from its net tax capacity in the previous year due to
property becoming tax-exempt Indian land, the city's maximum allowed aid increase
under paragraph (c) shall be increased by an amount equal to (1) the city's tax rate in the
year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease
resulting from the property becoming tax exempt.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2011 and thereafter.
new text end

Sec. 5.

Minnesota Statutes 2008, section 477A.03, subdivision 2a, is amended to read:

Subd. 2a.

Cities.

For aids payable in deleted text begin 2009 deleted text end new text begin 2011 new text end and thereafter, the total aid
paid under section 477A.013, subdivision 9, is deleted text begin $526,148,487, subject to adjustment in
subdivision 5 deleted text end new text begin $380,749,182 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2011 and thereafter.
new text end

Sec. 6.

Minnesota Statutes 2008, section 477A.03, subdivision 2b, is amended to read:

Subd. 2b.

Counties.

(a) For aids payable in deleted text begin 2009 deleted text end new text begin 2011 new text end and thereafter, the total aid
payable under section 477A.0124, subdivision 3, is deleted text begin $111,500,000 deleted text end new text begin $72,279,200 new text end minus
one-half of the total aid amount determined under section 477A.0124, subdivision 5,
paragraph (b) deleted text begin , subject to adjustment in subdivision 5 deleted text end . Each calendar year, $500,000 shall
be retained by the commissioner of revenue to make reimbursements to the commissioner
of management and budget for payments made under section 611.27. For calendar
year 2004, the amount shall be in addition to the payments authorized under section
477A.0124, subdivision 1. For calendar year 2005 and subsequent years, the amount shall
be deducted from the appropriation under this paragraph. The reimbursements shall be to
defray the additional costs associated with court-ordered counsel under section 611.27.
Any retained amounts not used for reimbursement in a year shall be included in the next
distribution of county need aid that is certified to the county auditors for the purpose of
property tax reduction for the next taxes payable year.

(b) For aids payable in deleted text begin 2009 deleted text end new text begin 2011 new text end and thereafter, the total aid under section
477A.0124, subdivision 4, is deleted text begin $116,132,923 deleted text end new text begin $77,193,804 new text end minus one-half of the total aid
amount determined under section 477A.0124, subdivision 5, paragraph (b) deleted text begin , subject to
adjustment in subdivision 5 deleted text end . The commissioner of management and budget shall bill the
commissioner of revenue for the cost of preparation of local impact notes as required by
section 3.987, not to exceed $207,000 in fiscal year 2004 and thereafter. The commissioner
of education shall bill the commissioner of revenue for the cost of preparation of local
impact notes for school districts as required by section 3.987, not to exceed $7,000 in fiscal
year 2004 and thereafter. The commissioner of revenue shall deduct the amounts billed
under this paragraph from the appropriation under this paragraph. The amounts deducted
are appropriated to the commissioner of management and budget and the commissioner of
education for the preparation of local impact notes.

Sec. 7. new text begin 2010 AID AND CREDIT REDUCTIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, the 2010 levy plus aid
revenue base for a city, town, or county equals the sum of the following:
new text end

new text begin (1) its certified property tax levy for taxes payable in 2010;
new text end

new text begin (2) the local government aid or county program aid it was certified to receive in
calendar year 2010 under Minnesota Statutes, sections 477A.011 to 477A.03; and
new text end

new text begin (3) the taconite aids it was certified to receive in calendar year 2010 under Minnesota
Statutes, sections 298.28 and 298.282, including any aid which was required to be placed
in a special fund for expenditure in the next succeeding year.
new text end

new text begin Subd. 2. new text end

new text begin 2010 city aid and credit reductions. new text end

new text begin (a) The commissioner of revenue
shall compute an aid reduction amount for each city for 2010 equal to the amount in
paragraph (b). The total reduction to a city under this subdivision is limited to the sum of
the city's payable 2010 distributions pursuant to Minnesota Statutes, section 477A.013,
and related sections, and the city's payable 2010 reimbursements pursuant to Minnesota
Statutes, section 273.1384. The reduction is applied first to the aid payments under
Minnesota Statutes section 477A.013 and, then, if necessary to the reimbursements under
Minnesota Statutes, section 273.1384.
new text end

new text begin (b) The commissioner shall compute an aid reduction amount for each city equal to
7.4525 percent of the city's 2010 levy plus aid revenue base.
new text end

new text begin Subd. 3. new text end

new text begin 2010 county aid and credit reductions. new text end

new text begin (a) The commissioner of revenue
shall compute an aid reduction amount for each county for 2010 equal to the amount
in paragraph (b). The total reduction to a county under this subdivision is limited to
the sum of the county's payable 2010 distributions pursuant to Minnesota Statutes,
section 477A.0124, and related sections, and the county's payable 2010 reimbursements
pursuant to Minnesota Statutes, section 273.1384. The reduction is applied first to the aid
payments under Minnesota Statutes, section 477A.0124 and, then, if necessary to the
reimbursements under Minnesota Statutes, section 273.1384.
new text end

new text begin (b) The commissioner shall compute an aid reduction amount for each county equal
to 2.452 percent of the county's 2010 levy plus aid revenue base. If a county has a 2007
population less than 5,100, its reduction amount under this paragraph is zero.
new text end

new text begin Subd. 4. new text end

new text begin 2010 town credit reductions. new text end

new text begin (a) The commissioner of revenue shall
compute a reduction amount for each town for 2010 equal to the amount in paragraph (b).
The total reduction to a town under this subdivision is limited to the town's payable 2010
reimbursements pursuant to Minnesota Statutes, section 273.1384.
new text end

new text begin (b) The commissioner shall compute a credit reduction amount for each town equal
to 4.15 percent of the town's 2010 levy plus aid revenue base.
new text end

new text begin Subd. 5. new text end

new text begin 2010 special taxing district credit reductions. new text end

new text begin The commissioner of
revenue shall compute a credit reduction amount for each special taxing district for 2010
equal to five percent of the district's levy for taxes payable in 2010. The total reduction
to a special taxing district under this subdivision is limited to the district's payable 2010
reimbursements pursuant to Minnesota Statutes, section 273.1384.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids and credit reimbursements
payable in calendar year 2010.
new text end

Sec. 8. new text begin APPROPRIATION REDUCTIONS; FISCAL YEAR 2011.
new text end

new text begin Subdivision 1. new text end

new text begin General directions. new text end

new text begin (a) This section is intended to reduce fiscal year
2011 general fund appropriations by an amount that is sufficient, when combined with
the other provisions of this act, to offset the projected reduction in revenues forecast by
the commissioner of the Department of Management and Budget in December 2009 by
over $1,100,000,000. In making these reductions, the legislature intends that the officials,
designed in this section, reduce state expenditures in such a manner that:
new text end

new text begin (1) minimizes, to the greatest extent possible, the effects on the delivery of essential
state and local government services;
new text end

new text begin (2) maintains or maximizes the receipt of federal grants-in-aid and other similar
sources of funding of state and local operations;
new text end

new text begin (3) maintains or increases the collection of state taxes and other revenues; and
new text end

new text begin (4) is consistent with the original legislative intent in enacting the state budget
to the maximum extent possible.
new text end

new text begin (b) For purposes of this section unless the context indicates otherwise,
"commissioner" means the commissioner of the Department of Management and Budget.
new text end

new text begin Subd. 2. new text end

new text begin Transportation; Laws 2009, chapter 36. new text end

new text begin The fiscal year 2011 general
fund appropriations in Laws 2009, chapter 36, are reduced by $7,165,000. After consulting
with the commissioner, other chief administrative officer, or governing body of each
affected agency, the commissioner shall allocate this reduction among the appropriations
in Laws 2009, chapter 36, in a manner that is consistent with the principles outlined in
subdivision 1.
new text end

new text begin Subd. 3. new text end

new text begin Energy and environment; Laws 2009, chapter 37. new text end

new text begin The fiscal year 2011
general fund appropriations in Laws 2009, chapter 37, are reduced by $13,575,000.
After consulting with the commissioner, other chief administrative officer, or governing
body of each affected agency, the commissioner shall allocate this reduction among the
appropriations in Laws 2009, chapter 37, in a manner that is consistent with the principles
outlined in subdivision 1.
new text end

new text begin Subd. 4. new text end

new text begin Economic development; Laws 2009, chapter 78. new text end

new text begin The fiscal year 2011
general fund appropriations in Laws 2009, chapter 78, are reduced by $10,015,000.
After consulting with the commissioner, other chief administrative officer, or governing
body of each affected agency, the commissioner shall allocate this reduction among the
appropriations in Laws 2009, chapter 78, in a manner that is consistent with the principles
outlined in subdivision 1.
new text end

new text begin Subd. 5. new text end

new text begin Health and human services; Laws 2009, chapter 79. new text end

new text begin The fiscal year
2011 general fund appropriations in Laws 2009, chapter 79, are reduced by $369,505,000.
After consulting with the commissioner, other chief administrative officer, or governing
body of each affected agency, the commissioner shall allocate this reduction among the
appropriations in Laws 2009, chapter 79, in a manner that is consistent with the principles
outlined in subdivision 1.
new text end

new text begin Subd. 6. new text end

new text begin Public safety; Laws 2009, chapter 83. new text end

new text begin The fiscal year 2011 general fund
appropriations in Laws 2009, chapter 83, are reduced by $70,455,000. These reductions
must be allocated among the appropriations in Laws 2009, chapter 83, in equal proportions.
new text end

new text begin Subd. 7. new text end

new text begin Agriculture and veterans affairs; Laws 2009, chapter 94. new text end

new text begin The fiscal year
2011 general fund appropriations in Laws 2009, chapter 94, are reduced by $9,345,000.
After consulting with the commissioner, other chief administrative officer, or governing
body of each affected agency, the commissioner shall allocate this reduction among the
appropriations in Laws 2009, chapter 94, in a manner that is consistent with the principles
outlined in subdivision 1.
new text end

new text begin Subd. 8. new text end

new text begin Higher education; Laws 2009, chapter 95. new text end

new text begin The fiscal year 2011 general
fund appropriations in Laws 2009, chapter 95, to the Board of Regents of the University
of Minnesota is reduced by $36,000,000 and to the Board of Trustees of the Minnesota
State Colleges and Universities is reduced by $10,000,000.
new text end

new text begin Subd. 9. new text end

new text begin State government; Laws 2009, chapter 101. new text end

new text begin (a) The fiscal year 2011
general fund appropriations in Laws 2009, chapter 101, to the legislature are reduced
as follows:
new text end

new text begin (1) senate, $1,887,000;
new text end

new text begin (2) house of representatives, $2,538,000; and
new text end

new text begin (3) Legislative Coordinating Commission, $1,305,000.
new text end

new text begin (b) The fiscal year 2011 general fund appropriations in Laws 2009, chapter 101, to
constitutional officers are reduced as follows:
new text end

new text begin (1) governor and lieutenant governor, $297,000;
new text end

new text begin (2) state auditor, $778,000;
new text end

new text begin (3) attorney general, $1,963,000; new text end new text begin and
new text end

new text begin (4) secretary of state, $501,000;
new text end

new text begin (c) The fiscal year 2011 general fund appropriations in Laws 2009, chapter 101, to
state agencies or entities not covered by paragraph (a) or (b), are reduced by $14,844,000.
After consulting with the commissioner, other chief administrative officer, or governing
body of each affected agency, the commissioner shall allocate this reduction among
the appropriations in Laws 2009, chapter 101, in a manner that is consistent with the
principles outlined in subdivision 1.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 9. new text begin APPROPRIATION; REVENUE; TAX COMPLIANCE.
new text end

new text begin (a) $6,727,000 is appropriated to the commissioner of revenue from the general fund
for fiscal year 2011. This appropriation is for additional activities of the Department of
Revenue to identify and collect tax liabilities from individuals and businesses that do not
pay all of the taxes they owe. This initiative is expected to result in new general fund
revenues of $26,865,000 for the biennium ending June 30, 2011.
new text end

new text begin (b) The department must report to the chairs of the house of representatives Ways
and Means and senate Finance Committees by January 15, 2011, on the following
performance indicators:
new text end

new text begin (1) the number of corporations noncompliant with the corporate tax system each
year and the percentage and dollar amounts of valid tax liabilities collected;
new text end

new text begin (2) the number of businesses noncompliant with the sales and use tax system and the
percentage and dollar amount of the valid tax liabilities collected; and
new text end

new text begin (3) the number of individual noncompliant cases resolved and the percentage and
dollar amounts of valid tax liabilities collected.
new text end

new text begin This report may be included in the second report required under Laws 2009, chapter
101, article 1, section 15, subdivision 2, paragraph (b).
new text end

Sec. 10. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2008, section 477A.03, subdivision 5, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin The repeal of Minnesota Statutes, section 477A.03,
subdivision 5, is effective for aids payable in calendar year 2011 and thereafter.
new text end