HF 1262

as introduced - 87th Legislature (2011 - 2012) Posted on 03/22/2011 09:04am

A bill for an act
relating to local government aids; reducing city and county general purpose aids
and establishing new grant and loan programs for local governments; amending
Minnesota Statutes 2010, sections 477A.013, by adding a subdivision; 477A.03,
subdivisions 2a, 2b; proposing coding for new law in Minnesota Statutes, chapter
477A.

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

Section 1.

Minnesota Statutes 2010, section 477A.013, is amended by adding a
subdivision to read:

new text begin Subd. 11. new text end

new text begin Use of aid. new text end

new text begin Beginning with aids payable in 2012, aids paid under
subdivision 9 must be used to pay the capital and operating costs of public safety, water,
and wastewater collection and treatment.
new text end

Sec. 2.

Minnesota Statutes 2010, section 477A.03, subdivision 2a, is amended to read:

Subd. 2a.

Cities.

For aids payable in 2011 deleted text begin and thereafter deleted text end , the total aid paid under
section 477A.013, subdivision 9, is $527,100,646. new text begin In each calendar year thereafter,
beginning with 2012, $263,550,000 shall be retained by the commissioner of revenue to
transfer to the commissioner of management and budget for grants made under section
477A.09 and to the commissioner of administration for loans under section 477A.091.
This amount must be deducted from the appropriation under this paragraph and used to
fund special capital and operating grants under section 477A.09, and a shared service
delivery initiative revolving loan program under section 477A.091.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2012 and thereafter.
new text end

Sec. 3.

Minnesota Statutes 2010, section 477A.03, subdivision 2b, is amended to read:

Subd. 2b.

Counties.

(a) For aids payable in 2011 and thereafter, the total aid
payable under section 477A.0124, subdivision 3, is $96,395,000. 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. new text begin In
each calendar year thereafter, beginning with 2012, $48,145,000 shall be retained by the
commissioner of revenue to transfer to the commissioner of management and budget for
grants made under section 477A.09 and to the commissioner of administration for loans
under section 477A.091. This amount must be deducted from the appropriation under this
paragraph and used to fund special capital and operating grants under section 477A.09,
and a shared service delivery initiative revolving loan program under section 477A.091.
new text end

(b) For aids payable in 2011 and thereafter, the total aid under section 477A.0124,
subdivision 4, is $101,309,575. 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. new text begin In
each calendar year thereafter, beginning with 2012, $50,650,000 shall be retained by the
commissioner of revenue to transfer to the commissioner of management and budget for
grants made under section 477A.09 and to the commissioner of administration for loans
under section 477A.091. This amount must be deducted from the appropriation under this
paragraph and used to fund special capital and operating grants under section 477A.09,
and a shared service delivery initiative revolving loan program under section 477A.091.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2012 and thereafter.
new text end

Sec. 4.

new text begin [477A.09] SPECIAL CAPITAL AND OPERATING GRANTS.
new text end

new text begin Subdivision 1. new text end

new text begin Established; definitions. new text end

new text begin A special capital and operating grant
program is established to help local governments fund capital projects and pay for special
operating costs associated with providing drinking water, wastewater collection and
treatment, and public safety. For purposes of this section "eligible local government"
means any county, home rule charter or statutory city, township, or special taxing district.
"Public safety services" means police, corrections, fire, and ambulance services. "Project"
means the capital project or special operating costs.
new text end

new text begin Subd. 2. new text end

new text begin Applications; review; grants by legislative appropriation. new text end

new text begin (a) The
commissioner of management and budget shall administer the grant program. An
eligible local government may apply to the commissioner of management and budget
for a grant under this section, in the form and manner determined by the commissioner.
At a minimum, the commissioner shall require an applicant to provide the following
information:
new text end

new text begin (1) the applicant's name and the name of the entity that will own or operate the
project, if other than the applicant;
new text end

new text begin (2) a description of the eligible activities that the project encompasses;
new text end

new text begin (3) the public purpose of the project;
new text end

new text begin (4) the extent to which the applicant has, or expects to provide, nonstate funding
for the project;
new text end

new text begin (5) whether the project will require other new or additional operating subsidies;
new text end

new text begin (6) whether the governing body of the applicant has passed a resolution in support of
the project and has established priorities for all projects within its jurisdiction for which
funding under this section are requested when submitting multiple requests; and
new text end

new text begin (7) if the applicant has applied or will apply for other funding for the project, and
if so, the status of the request, whether it complements the request under this section
or replaces it.
new text end

new text begin (b) If the application is for capital improvements for a water treatment or wastewater
collection and treatment system, the applicant must apply for funding through programs
administered by the Public Facilities Authority and be included in the appropriate project
priority list before applying for a grant under this section.
new text end

new text begin (c) The recommendations of the commissioner of management and budget must be
presented to the legislative committees with jurisdiction over public safety or water and
wastewater infrastructure, as appropriate, and capital investment.
new text end

new text begin (d) A grant may only be made if the money for the grant is appropriated in law.
new text end

new text begin Subd. 3. new text end

new text begin Return on investment analysis required. new text end

new text begin The commissioner of
management and budget and the state economist, with the approval of the governor, in
conjunction with the committees of the legislature responsible for capital investment, shall
develop before January 1, 2012, a return on investment analysis format to be required of
all requests for appropriations for grants for capital projects made under this section
after January 1, 2012. The return on investment analysis format must require at least
the following elements for each request:
new text end

new text begin (1) a comprehensive description of the value of the project, including:
new text end

new text begin (i) both subjective and objective benefits;
new text end

new text begin (ii) measurable outcomes over a ten-year period; and
new text end

new text begin (iii) the process by which the planned and actual benefits and measurable
outcomes will be reported annually to the state and the public for ten years following
the appropriation;
new text end

new text begin (2) a ten-year total cost of ownership for all costs related to acquisition, construction,
maintenance, and ongoing operations of a project including all related costs for staffing,
administration, promotion, support services, and outside funding sources;
new text end

new text begin (3) a ten-year total revenue projection including detailed models of usage, per-unit
revenues, and unit volumes by year, including a low, expected, and high projection of
revenue;
new text end

new text begin (4) the projected ten-year total net financial surplus or loss for the project;
new text end

new text begin (5) an optional schedule for payback of the cost to the state; and
new text end

new text begin (6) the net jobs impact to the state, including:
new text end

new text begin (i) a ten-year schedule of jobs created by the project; and
new text end

new text begin (ii) a ten-year schedule showing the opportunity cost of jobs not otherwise created in
the broader economy due to the capital consumed by the amount not being available in
other areas of the economy.
new text end

new text begin Subd. 4. new text end

new text begin Grant recipient reports required. new text end

new text begin Each grant recipient must report to
the commissioner of management and budget and to the chairs and ranking minority
members of the legislative committees with jurisdiction over taxes and local government
on the benefits and costs of a project funded under this section. The commissioner must
aggregate the information from the individual reports and report to the chairs and ranking
minority members of the legislative committees with jurisdiction over taxes and local
government on the benefits and costs of the project funded under this section. The report
by an individual grantee is due by February 1 of the second, fifth, and tenth full year
after the grant is made. The report by the commissioner is due by December 1 of each
even-numbered year.
new text end

new text begin Subd. 5. new text end

new text begin Transfer. new text end

new text begin For fiscal years 2013 and 2014, 75 percent of the funds set aside
under section 477A.03 to fund this section and section 477A.091 are transferred from the
commissioner of revenue to the commissioner of management and budget to fund grants
made under this section. In fiscal years 2015 and thereafter, 100 percent of the funds set
aside under section 477A.03 to fund this section and section 477A.091 are appropriated to
fund grants made under this section.
new text end

Sec. 5.

new text begin [477A.091] SHARED SERVICE DELIVERY INITIATIVE REVOLVING
LOAN PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section the following terms
have the meanings given them.
new text end

new text begin (b) "Eligible local government" means any county, home rule charter or statutory
city, township, special taxing district, or school district.
new text end

new text begin (c) "Shared service delivery initiative" means a project to consolidate or share the
delivery of a government service between two or more eligible local governments through
a joint powers agreement or other legal agreement in order to reduce total service delivery
costs in the participating jurisdictions.
new text end

new text begin (d) "Start-up costs" means capital investments and increased salary and benefits
costs, including incentives for early retirement, during the first two years of entering into
an agreement for a shared service delivery initiative.
new text end

new text begin Subd. 2. new text end

new text begin Shared service delivery initiative aid revolving loan fund. new text end

new text begin A revolving
loan fund account is established in the state treasury to provide no-interest loans to cover
start-up costs associated with shared service delivery initiatives. Loans made under this
subdivision must be made to the eligible local government designated as the fiscal agent
in the joint powers agreement or other legal agreement.
new text end

new text begin Subd. 3. new text end

new text begin Applications; review; loans made by legislation. new text end

new text begin (a) The commissioner
of administration shall administer the loan program. An eligible local government
that is the lead local government as designated in the joint powers agreement or other
legal agreement may apply to the commissioner of administration for a loan under this
section, in the form and manner determined by the commissioner. At a minimum, the
commissioner must require an applicant to provide the following information:
new text end

new text begin (1) the applicant's name and the name of the other participating eligible local
governments;
new text end

new text begin (2) a description of the eligible activities that the service delivery initiative
encompasses;
new text end

new text begin (3) the anticipated costs of the service delivery initiative; and
new text end

new text begin (4) the anticipated savings to each participating eligible local government over each
of the next ten years due to the service delivery initiative.
new text end

new text begin (b) The recommendations of the commissioner of administration must be presented
to the legislative committees with jurisdiction over local government and property taxes.
new text end

new text begin (c) A loan may only be made if the money for the loan is appropriated in law.
new text end

new text begin Subd. 4. new text end

new text begin Loan repayment required. new text end

new text begin Each local government involved in a shared
service delivery initiative project for which a loan is made under this section must pay to
the state each year, for up to ten years, an amount equal to 50 percent of the anticipated
savings to the local government in that year, based on the information contained in the
application in subdivision 1. The payments may be made by each local government
directly or jointly under the joint powers agreement. The payments required under this
subdivision cease at the earlier of:
new text end

new text begin (1) when total payments made by all local governments involved in the service
delivery initiative equal the total loan amount; or
new text end

new text begin (2) at the end of ten years.
new text end

new text begin Subd. 5. new text end

new text begin Loan recipient reports required. new text end

new text begin Each loan recipient must report to
the commissioner of administration and to the chairs and ranking minority members
of the legislative committees with jurisdiction over taxes and local government on the
benefits and costs of the shared services delivery initiative funded under this section. The
commissioner must aggregate the information from the individual reports and report to the
chairs and ranking minority members of the legislative committees with jurisdiction over
taxes and local government on the benefits and costs of the initiatives funded under this
section. The report by an individual loan recipient is due by February 1 of the second,
fifth, and tenth full year after the grant is made. The report by the commissioner is due by
December 1 of each even-numbered year.
new text end

new text begin Subd. 6. new text end

new text begin Appropriation. new text end

new text begin In fiscal years 2013 and 2014, only 25 percent of the
funds set aside under section 477A.03 to fund this section and section 477A.091 are
appropriated to the revolving loan fund account established to make loans under this
section. All repayments made under subdivision 4 are appropriated to the revolving loan
fund account established in subdivision 2.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with fiscal year 2012.
new text end