HF 1656

Introduction - 79th Legislature (1995 - 1996)

Posted on 12/15/2009 12:00 a.m.

  1.1                          A bill for an act 
  1.2             relating to taxation; restructuring certain aids paid 
  1.3             to cities and counties; creating a property tax reform 
  1.4             commission; amending Minnesota Statutes 1994, sections 
  1.5             273.1398, subdivision 2; 477A.011, by adding 
  1.6             subdivisions; 477A.012, by adding a subdivision; 
  1.7             477A.0121, subdivision 4; 477A.013, by adding 
  1.8             subdivisions; and 477A.03, subdivision 1; repealing 
  1.9             Minnesota Statutes 1994, sections 477A.013, 
  1.10            subdivisions 8 and 9; and 477A.03, subdivision 2. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  Minnesota Statutes 1994, section 273.1398, 
  1.13  subdivision 2, is amended to read: 
  1.14     Subd. 2.  [HOMESTEAD AND AGRICULTURAL CREDIT AID.] 
  1.15  Homestead and agricultural credit aid for each unique taxing 
  1.16  jurisdiction equals the product of (1) the homestead and 
  1.17  agricultural credit aid base, and (2) the growth adjustment 
  1.18  factor, plus the net tax capacity adjustment and the fiscal 
  1.19  disparity adjustment; provided that the amount of homestead and 
  1.20  agricultural credit aid for a home rule charter or statutory 
  1.21  city for 1996 and thereafter is zero.  
  1.22     Sec. 2.  Minnesota Statutes 1994, section 477A.011, is 
  1.23  amended by adding a subdivision to read: 
  1.24     Subd. 38.  [HOUSEHOLDS.] "Households" means the number of 
  1.25  households established by the most recent federal census, by a 
  1.26  special census conducted under contract with the United States 
  1.27  Bureau of the Census, by a population estimate made by the 
  1.28  metropolitan council, or by a population estimate of the state 
  2.1   demographer made pursuant to section 4A.02, whichever is the 
  2.2   most recent as to the stated date of the count or estimate for 
  2.3   the preceding calendar year.  The term "per household" refers to 
  2.4   households as defined by this subdivision. 
  2.5      Sec. 3.  Minnesota Statutes 1994, section 477A.011, is 
  2.6   amended by adding a subdivision to read: 
  2.7      Subd. 39.  [1996 CITY AID TOTAL.] The "1996 city aid total" 
  2.8   for a city means the amount of homestead and agricultural credit 
  2.9   aid the city would have received in calendar year 1996 under 
  2.10  Minnesota Statutes 1994, section 273.1398, plus the amount of 
  2.11  local government aid the city would have received in calendar 
  2.12  year 1996 under Minnesota Statutes 1994, section 477A.013, 
  2.13  calculated without regard to the provisions of this act. 
  2.14     Sec. 4.  Minnesota Statutes 1994, section 477A.011, is 
  2.15  amended by adding a subdivision to read: 
  2.16     Subd. 40.  [EQUALIZED CITY REVENUE.] For aid payable in 
  2.17  1996, the "equalized city revenue" means $....... per household.
  2.18  For aid payable in 1997 and thereafter, "equalized city revenue" 
  2.19  means the prior year equalized city revenue amount adjusted for 
  2.20  inflation as provided under section 477A.03, subdivision 3. 
  2.21     Sec. 5.  Minnesota Statutes 1994, section 477A.012, is 
  2.22  amended by adding a subdivision to read: 
  2.23     Subd. 9.  [CRIMINAL JUSTICE AID OFFSET.] There shall be 
  2.24  deducted from the aid payable in 1996 to each county under 
  2.25  section 273.1398, subdivision 2, an amount equal to .7528 times 
  2.26  the county criminal justice aid payable to that county in 1996 
  2.27  under section 477A.0121, except that the total aid payable to 
  2.28  any county under section 273.1398, subdivision 2, may not be 
  2.29  less than zero.  The aid reduction under this section is a 
  2.30  permanent aid reduction. 
  2.31     Sec. 6.  Minnesota Statutes 1994, section 477A.0121, 
  2.32  subdivision 4, is amended to read: 
  2.33     Subd. 4.  [PUBLIC DEFENDER COSTS.] Each calendar year For 
  2.34  aid payable in 1995, four percent of the total appropriation for 
  2.35  this section, and for 1996 and each calendar year thereafter, 
  2.36  one percent of the total appropriation for this section shall be 
  3.1   retained by the commissioner of revenue to make reimbursements 
  3.2   to the commissioner of finance for payments made under section 
  3.3   611.27.  The reimbursements shall be to defray the additional 
  3.4   costs associated with court-ordered counsel under section 
  3.5   611.27.  Any retained amounts not used for reimbursement in a 
  3.6   year shall be included in the next distribution of county 
  3.7   criminal justice aid that is certified to the county auditors 
  3.8   for the purpose of property tax reduction for the next taxes 
  3.9   payable year.  
  3.10     Sec. 7.  Minnesota Statutes 1994, section 477A.013, is 
  3.11  amended by adding a subdivision to read: 
  3.12     Subd. 10.  [CITY EQUALIZATION AID.] For aid payable in 1996 
  3.13  and thereafter, equalization aid for a city is equal to the 
  3.14  product of (1) the number of households in the city multiplied 
  3.15  by (2) the larger of zero or the difference obtained by 
  3.16  subtracting 15 percent multiplied by the city net tax capacity 
  3.17  per household from the equalized city revenue per household.  
  3.18  For aid payable in 1996 and thereafter, a city's equalization 
  3.19  aid may not be larger than its 1996 city aid total, adjusted for 
  3.20  inflation as provided under section 477A.03, subdivision 3. 
  3.21     Sec. 8.  Minnesota Statutes 1994, section 477A.013, is 
  3.22  amended by adding a subdivision to read: 
  3.23     Subd. 11.  [NEED-BASED CITY AID.] For aid payable in 1996 
  3.24  and thereafter, the need-based aid for each city shall be equal 
  3.25  to its 1996 city aid total minus its city equalization aid 
  3.26  amount for aid payable in 1996.  For aid payable in 1997 and 
  3.27  thereafter, any city with a population over 2,500 must submit a 
  3.28  report as provided under subdivision 13 to be eligible for 
  3.29  need-based aid. 
  3.30     Sec. 9.  Minnesota Statutes 1994, section 477A.013, is 
  3.31  amended by adding a subdivision to read: 
  3.32     Subd. 12.  [CITY AID DISTRIBUTION.] In calendar year 1996 
  3.33  and thereafter, each city shall receive an aid distribution 
  3.34  equal to the sum of the city equalization aid under subdivision 
  3.35  10, plus the need-based aid under subdivision 11.  If the total 
  3.36  aid amount to be distributed to all cities under subdivisions 10 
  4.1   and 11 does not equal the amount appropriated for city aid under 
  4.2   section 477A.03, subdivision 2, the need-based city aid amounts 
  4.3   shall be proportionately increased or decreased so that the 
  4.4   total aid distributed equals the total amount appropriated. 
  4.5      Sec. 10.  Minnesota Statutes 1994, section 477A.013, is 
  4.6   amended by adding a subdivision to read: 
  4.7      Subd. 13.  [REPORTING.] By December 31, 1995, each city 
  4.8   with a population greater than 1,000 may submit a report to the 
  4.9   commissioner of revenue regarding its 1996 need-based aid 
  4.10  distribution.  The commissioner shall notify cities of this 
  4.11  reporting option at the time cities are notified of their 1996 
  4.12  aid amounts under section 477A.014, subdivision 1.  The report 
  4.13  shall be submitted on forms prescribed by the commissioner and 
  4.14  shall include at least the following: 
  4.15     (1) total budgeted city spending per household for 1996, 
  4.16  the estimated city tax rate for taxes payable in 1996, and 
  4.17  reasons for any spending in excess of the equalized city 
  4.18  revenue; 
  4.19     (2) the budgeted allocation of the 1996 equalized city 
  4.20  revenue and the 1996 need-based aid amount among the programs 
  4.21  and services provided by the city; 
  4.22     (3) a narrative description of the services to be funded in 
  4.23  1996 by the need-based aid amount; 
  4.24     (4) a description of the services in clause (3) that would 
  4.25  be cut if the need-based aid amount were reduced or eliminated, 
  4.26  and an estimate of the tax rate increase that would result if 
  4.27  services were not cut; and 
  4.28     (5) a request for need-based aid for calendar year 1997, 
  4.29  including a rationale for any increase or decrease in aid 
  4.30  compared to 1996. 
  4.31     The commissioner shall compile these reports, and summarize 
  4.32  the financial data provided under clauses (1), (2), (4), and (5).
  4.33  The compilation of city reports and any recommendations from the 
  4.34  commissioner for changes in the need-based aid distributions 
  4.35  based on information in the reports from cities shall be 
  4.36  forwarded to the chairs of the senate committee on taxes and tax 
  5.1   laws and the house of representatives committee on taxes by 
  5.2   February 1, 1996. 
  5.3      Sec. 11.  Minnesota Statutes 1994, section 477A.03, 
  5.4   subdivision 1, is amended to read: 
  5.5      Subdivision 1.  [ANNUAL APPROPRIATION.] A sum sufficient to 
  5.6   discharge the duties imposed by sections 477A.011 to 477A.014 is 
  5.7   annually appropriated from the local government trust fund to 
  5.8   the commissioner of revenue.  For aid payable in 1994, the total 
  5.9   aid paid to cities under section 477A.013, subdivision 9, is 
  5.10  limited to $330,636,900.  For aid payable in 1995, the total aid 
  5.11  paid to cities under section 477A.013, subdivision 9, is limited 
  5.12  to $337,249,600.  For aid payable in 1996 and thereafter, the 
  5.13  total aid paid to cities under section 477A.013, subdivision 9, 
  5.14  is limited to the amount paid in the previous year, adjusted for 
  5.15  inflation as provided under subdivision 3.  Aid payments to 
  5.16  cities under section 477A.013, subdivision 12, are limited to 
  5.17  the sum of the 1996 city aid totals, as defined in section 
  5.18  477A.011, for all cities.  For aids payable in 1997 and 
  5.19  thereafter under section 477A.013, subdivision 12, the total aid 
  5.20  paid shall be the amount certified to be paid in the previous 
  5.21  year, adjusted for inflation as provided under subdivision 3. 
  5.22     Aid payments to counties under section 477A.0121 are 
  5.23  limited to $8,400,000 in 1994 and $10,000,000 in 1995 and 
  5.24  $40,265,000 in 1996.  For aid payable in 1996 1997 and 
  5.25  thereafter, payments to counties under section 477A.0121 are 
  5.26  limited to the amount paid in the previous year, adjusted for 
  5.27  inflation as provided under subdivision 3. 
  5.28     For aid payable in 1995, payments to counties under section 
  5.29  477A.0122 are limited to $1,500,000.  For aids payable in 1996 
  5.30  and thereafter, payments to counties under section 477A.0122 are 
  5.31  limited to the amount paid in the previous year, adjusted for 
  5.32  inflation as provided under subdivision 3. 
  5.33     Sec. 12.  [LOCAL GOVERNMENT FINANCE REFORM COMMISSION.] 
  5.34     Subdivision 1.  [CREATION; MEMBERSHIP.] A commission on 
  5.35  local government finance is created.  The commission shall have 
  5.36  12 members as follows: 
  6.1      (1) five members of the senate, appointed by the 
  6.2   subcommittee on committees of the committee on rules and 
  6.3   administration.  At least two of the members must represent 
  6.4   districts located outside of the metropolitan area defined in 
  6.5   Minnesota Statutes, section 473.121, and at least two must be 
  6.6   members of the minority caucus; 
  6.7      (2) five members of the house of representatives, appointed 
  6.8   by the speaker.  At least two of the members must represent 
  6.9   districts located outside of the metropolitan area defined in 
  6.10  Minnesota Statutes, section 473.121, and at least two must be 
  6.11  members of the minority caucus; 
  6.12     (3) the commissioner of revenue or the commissioner's 
  6.13  designee; and 
  6.14     (4) the commissioner of finance or the commissioner's 
  6.15  designee. 
  6.16     Subd. 2.  [STUDY.] The commission shall study and evaluate 
  6.17  proposals for reform of the state and local fiscal system 
  6.18  including changes in the property tax system.  The commission 
  6.19  shall seek advice and proposals from representatives of local 
  6.20  governments, the business community, and other taxpayer groups. 
  6.21     Subd. 3.  [REPORT.] By February 15, 1996, the commission 
  6.22  shall report to the speaker of the house of representatives and 
  6.23  the majority leader of the senate on the conclusions of its 
  6.24  study.  The report must either make specific recommendations for 
  6.25  property tax reform or other changes in the state and local 
  6.26  fiscal system in bill form, or conclude that no change is needed.
  6.27     Subd. 4.  [COMPENSATION.] Legislative members of the 
  6.28  commission are compensated as provided in Minnesota Statutes, 
  6.29  section 3.101.  Nonlegislative members are compensated as 
  6.30  provided under Minnesota Statutes, section 15.059. 
  6.31     Subd. 5.  [STAFF.] In carrying out its duties, the 
  6.32  commission may request information and assistance from the 
  6.33  department of revenue and other state agencies. 
  6.34     Sec. 13.  [REPEALER.] 
  6.35     Minnesota Statutes 1994, sections 477A.013, subdivisions 8 
  6.36  and 9; and 477A.03, subdivision 2, are repealed. 
  7.1      Sec. 14.  [EFFECTIVE DATE.] 
  7.2      Sections 1 to 11 and 13 are effective for aid payable in 
  7.3   1996 and thereafter.  Section 12 is effective the day following 
  7.4   final enactment.