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Minnesota Legislature

Office of the Revisor of Statutes

HF 1442

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 04/02/2003

Current Version - as introduced

  1.1                          A bill for an act 
  1.2             relating to local government aids; reducing aids to 
  1.3             certain cities; amending Minnesota Statutes 2002, 
  1.4             sections 477A.011, subdivision 36, by adding 
  1.5             subdivisions; 477A.0132; 477A.03, subdivision 2. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 2002, section 477A.011, 
  1.8   subdivision 36, is amended to read: 
  1.9      Subd. 36.  [CITY AID BASE.] (a) Except as otherwise 
  1.10  provided in this subdivision, "city aid base" means, for each 
  1.11  city, the sum of the local government aid and equalization aid 
  1.12  it was originally certified to receive in calendar year 1993 
  1.13  under Minnesota Statutes 1992, section 477A.013, subdivisions 3 
  1.14  and 5, and the amount of disparity reduction aid it received in 
  1.15  calendar year 1993 under Minnesota Statutes 1992, section 
  1.16  273.1398, subdivision 3. 
  1.17     (b) For aids payable in 1996 and thereafter, a city that in 
  1.18  1992 or 1993 transferred an amount from governmental funds to 
  1.19  its sewer and water fund, which amount exceeded its net levy for 
  1.20  taxes payable in the year in which the transfer occurred, has a 
  1.21  "city aid base" equal to the sum of (i) its city aid base, as 
  1.22  calculated under paragraph (a), and (ii) one-half of the 
  1.23  difference between its city aid distribution under section 
  1.24  477A.013, subdivision 9, for aids payable in 1995 and its city 
  1.25  aid base for aids payable in 1995. 
  2.1      (c) The city aid base for any city with a population less 
  2.2   than 500 is increased by $40,000 for aids payable in calendar 
  2.3   year 1995 and thereafter, and the maximum amount of total aid it 
  2.4   may receive under section 477A.013, subdivision 9, paragraph 
  2.5   (c), is also increased by $40,000 for aids payable in calendar 
  2.6   year 1995 only, provided that: 
  2.7      (i) the average total tax capacity rate for taxes payable 
  2.8   in 1995 exceeds 200 percent; 
  2.9      (ii) the city portion of the tax capacity rate exceeds 100 
  2.10  percent; and 
  2.11     (iii) its city aid base is less than $60 per capita. 
  2.12     (d) The city aid base for a city is increased by $20,000 in 
  2.13  1998 and thereafter and the maximum amount of total aid it may 
  2.14  receive under section 477A.013, subdivision 9, paragraph (c), is 
  2.15  also increased by $20,000 in calendar year 1998 only, provided 
  2.16  that: 
  2.17     (i) the city has a population in 1994 of 2,500 or more; 
  2.18     (ii) the city is located in a county, outside of the 
  2.19  metropolitan area, which contains a city of the first class; 
  2.20     (iii) the city's net tax capacity used in calculating its 
  2.21  1996 aid under section 477A.013 is less than $400 per capita; 
  2.22  and 
  2.23     (iv) at least four percent of the total net tax capacity, 
  2.24  for taxes payable in 1996, of property located in the city is 
  2.25  classified as railroad property. 
  2.26     (e) The city aid base for a city is increased by $200,000 
  2.27  in 1999 and thereafter and the maximum amount of total aid it 
  2.28  may receive under section 477A.013, subdivision 9, paragraph 
  2.29  (c), is also increased by $200,000 in calendar year 1999 only, 
  2.30  provided that: 
  2.31     (i) the city was incorporated as a statutory city after 
  2.32  December 1, 1993; 
  2.33     (ii) its city aid base does not exceed $5,600; and 
  2.34     (iii) the city had a population in 1996 of 5,000 or more. 
  2.35     (f) The city aid base for a city is increased by $450,000 
  2.36  in 1999 to 2008 and the maximum amount of total aid it may 
  3.1   receive under section 477A.013, subdivision 9, paragraph (c), is 
  3.2   also increased by $450,000 in calendar year 1999 only, provided 
  3.3   that: 
  3.4      (i) the city had a population in 1996 of at least 50,000; 
  3.5      (ii) its population had increased by at least 40 percent in 
  3.6   the ten-year period ending in 1996; and 
  3.7      (iii) its city's net tax capacity for aids payable in 1998 
  3.8   is less than $700 per capita. 
  3.9      (g) Beginning in 2004, the city aid base for a city is 
  3.10  equal to the sum of its city aid base in 2003 and the amount of 
  3.11  additional aid it was certified to receive under section 477A.06 
  3.12  in 2003.  For 2004 only, the maximum amount of total aid a city 
  3.13  may receive under section 477A.013, subdivision 9, paragraph 
  3.14  (c), is also increased by the amount it was certified to receive 
  3.15  under section 477A.06 in 2003. 
  3.16     (h) The city aid base for a city is increased by $150,000 
  3.17  for aids payable in 2000 and thereafter, and the maximum amount 
  3.18  of total aid it may receive under section 477A.013, subdivision 
  3.19  9, paragraph (c), is also increased by $150,000 in calendar year 
  3.20  2000 only, provided that: 
  3.21     (1) the city has a population that is greater than 1,000 
  3.22  and less than 2,500; 
  3.23     (2) its commercial and industrial percentage for aids 
  3.24  payable in 1999 is greater than 45 percent; and 
  3.25     (3) the total market value of all commercial and industrial 
  3.26  property in the city for assessment year 1999 is at least 15 
  3.27  percent less than the total market value of all commercial and 
  3.28  industrial property in the city for assessment year 1998. 
  3.29     (i) The city aid base for a city is increased by $200,000 
  3.30  in 2000 and thereafter, and the maximum amount of total aid it 
  3.31  may receive under section 477A.013, subdivision 9, paragraph 
  3.32  (c), is also increased by $200,000 in calendar year 2000 only, 
  3.33  provided that: 
  3.34     (1) the city had a population in 1997 of 2,500 or more; 
  3.35     (2) the net tax capacity of the city used in calculating 
  3.36  its 1999 aid under section 477A.013 is less than $650 per 
  4.1   capita; 
  4.2      (3) the pre-1940 housing percentage of the city used in 
  4.3   calculating 1999 aid under section 477A.013 is greater than 12 
  4.4   percent; 
  4.5      (4) the 1999 local government aid of the city under section 
  4.6   477A.013 is less than 20 percent of the amount that the formula 
  4.7   aid of the city would have been if the need increase percentage 
  4.8   was 100 percent; and 
  4.9      (5) the city aid base of the city used in calculating aid 
  4.10  under section 477A.013 is less than $7 per capita. 
  4.11     (j) The city aid base for a city is increased by $225,000 
  4.12  in calendar years 2000 to 2002 and the maximum amount of total 
  4.13  aid it may receive under section 477A.013, subdivision 9, 
  4.14  paragraph (c), is also increased by $225,000 in calendar year 
  4.15  2000 only, provided that: 
  4.16     (1) the city had a population of at least 5,000; 
  4.17     (2) its population had increased by at least 50 percent in 
  4.18  the ten-year period ending in 1997; 
  4.19     (3) the city is located outside of the Minneapolis-St. Paul 
  4.20  metropolitan statistical area as defined by the United States 
  4.21  Bureau of the Census; and 
  4.22     (4) the city received less than $30 per capita in aid under 
  4.23  section 477A.013, subdivision 9, for aids payable in 1999. 
  4.24     (k) The city aid base for a city is increased by $102,000 
  4.25  in 2000 and thereafter, and the maximum amount of total aid it 
  4.26  may receive under section 477A.013, subdivision 9, paragraph 
  4.27  (c), is also increased by $102,000 in calendar year 2000 only, 
  4.28  provided that: 
  4.29     (1) the city has a population in 1997 of 2,000 or more; 
  4.30     (2) the net tax capacity of the city used in calculating 
  4.31  its 1999 aid under section 477A.013 is less than $455 per 
  4.32  capita; 
  4.33     (3) the net levy of the city used in calculating 1999 aid 
  4.34  under section 477A.013 is greater than $195 per capita; and 
  4.35     (4) the 1999 local government aid of the city under section 
  4.36  477A.013 is less than 38 percent of the amount that the formula 
  5.1   aid of the city would have been if the need increase percentage 
  5.2   was 100 percent. 
  5.3      (l) The city aid base for a city is increased by $32,000 in 
  5.4   2001 and thereafter, and the maximum amount of total aid it may 
  5.5   receive under section 477A.013, subdivision 9, paragraph (c), is 
  5.6   also increased by $32,000 in calendar year 2001 only, provided 
  5.7   that: 
  5.8      (1) the city has a population in 1998 that is greater than 
  5.9   200 but less than 500; 
  5.10     (2) the city's revenue need used in calculating aids 
  5.11  payable in 2000 was greater than $200 per capita; 
  5.12     (3) the city net tax capacity for the city used in 
  5.13  calculating aids available in 2000 was equal to or less than 
  5.14  $200 per capita; 
  5.15     (4) the city aid base of the city used in calculating aid 
  5.16  under section 477A.013 is less than $65 per capita; and 
  5.17     (5) the city's formula aid for aids payable in 2000 was 
  5.18  greater than zero. 
  5.19     (m) The city aid base for a city is increased by $7,200 in 
  5.20  2001 and thereafter, and the maximum amount of total aid it may 
  5.21  receive under section 477A.013, subdivision 9, paragraph (c), is 
  5.22  also increased by $7,200 in calendar year 2001 only, provided 
  5.23  that: 
  5.24     (1) the city had a population in 1998 that is greater than 
  5.25  200 but less than 500; 
  5.26     (2) the city's commercial industrial percentage used in 
  5.27  calculating aids payable in 2000 was less than ten percent; 
  5.28     (3) more than 25 percent of the city's population was 60 
  5.29  years old or older according to the 1990 census; 
  5.30     (4) the city aid base of the city used in calculating aid 
  5.31  under section 477A.013 is less than $15 per capita; and 
  5.32     (5) the city's formula aid for aids payable in 2000 was 
  5.33  greater than zero. 
  5.34     (n) The city aid base for a city is increased by $45,000 in 
  5.35  2001 and thereafter and by an additional $50,000 in calendar 
  5.36  years 2002 to 2011, and the maximum amount of total aid it may 
  6.1   receive under section 477A.013, subdivision 9, paragraph (c), is 
  6.2   also increased by $45,000 in calendar year 2001 only, and by 
  6.3   $50,000 in calendar year 2002 only, provided that: 
  6.4      (1) the net tax capacity of the city used in calculating 
  6.5   its 2000 aid under section 477A.013 is less than $810 per 
  6.6   capita; 
  6.7      (2) the population of the city declined more than two 
  6.8   percent between 1988 and 1998; 
  6.9      (3) the net levy of the city used in calculating 2000 aid 
  6.10  under section 477A.013 is greater than $240 per capita; and 
  6.11     (4) the city received less than $36 per capita in aid under 
  6.12  section 477A.013, subdivision 9, for aids payable in 2000. 
  6.13     (o) The city aid base for a city with a population of 
  6.14  10,000 or more which is located outside of the seven-county 
  6.15  metropolitan area is increased in 2002 and thereafter, and the 
  6.16  maximum amount of total aid it may receive under section 
  6.17  477A.013, subdivision 9, paragraph (b) or (c), is also increased 
  6.18  in calendar year 2002 only, by an amount equal to the lesser of: 
  6.19     (1)(i) the total population of the city, as determined by 
  6.20  the United States Bureau of the Census, in the 2000 census, (ii) 
  6.21  minus 5,000, (iii) times 60; or 
  6.22     (2) $2,500,000. 
  6.23     (p) The city aid base is increased by $50,000 in 2002 and 
  6.24  thereafter, and the maximum amount of total aid it may receive 
  6.25  under section 477A.013, subdivision 9, paragraph (c), is also 
  6.26  increased by $50,000 in calendar year 2002 only, provided that: 
  6.27     (1) the city is located in the seven-county metropolitan 
  6.28  area; 
  6.29     (2) its population in 2000 is between 10,000 and 20,000; 
  6.30  and 
  6.31     (3) its commercial industrial percentage, as calculated for 
  6.32  city aid payable in 2001, was greater than 25 percent. 
  6.33     (q) The city aid base for a city is increased by $150,000 
  6.34  in calendar years 2002 to 2011 and the maximum amount of total 
  6.35  aid it may receive under section 477A.013, subdivision 9, 
  6.36  paragraph (c), is also increased by $150,000 in calendar year 
  7.1   2002 only, provided that: 
  7.2      (1) the city had a population of at least 3,000 but no more 
  7.3   than 4,000 in 1999; 
  7.4      (2) its home county is located within the seven-county 
  7.5   metropolitan area; 
  7.6      (3) its pre-1940 housing percentage is less than 15 
  7.7   percent; and 
  7.8      (4) its city net tax capacity per capita for taxes payable 
  7.9   in 2000 is less than $900 per capita. 
  7.10     (r) The city aid base for a city is increased by $200,000 
  7.11  beginning in calendar year 2003 and the maximum amount of total 
  7.12  aid it may receive under section 477A.013, subdivision 9, 
  7.13  paragraph (c), is also increased by $200,000 in calendar year 
  7.14  2003 only, provided that the city qualified for an increase in 
  7.15  homestead and agricultural credit aid under Laws 1995, chapter 
  7.16  264, article 8, section 18. 
  7.17     (s) Beginning in calendar year 2004, the city aid base for 
  7.18  a city is decreased by the amount of its city aid base decrease 
  7.19  under section 477A.0132, subdivision 3, paragraph (c).  The 
  7.20  maximum amount of total aid it may receive under section 
  7.21  477A.013, subdivision 9, paragraph (c), is also decreased in 
  7.22  calendar year 2004 only by its total aid reduction under section 
  7.23  477A.0132, subdivision 3, paragraph (c). 
  7.24     [EFFECTIVE DATE.] This section is effective beginning with 
  7.25  aids payable in calendar year 2004. 
  7.26     Sec. 2.  Minnesota Statutes 2002, section 477A.011, is 
  7.27  amended by adding a subdivision to read: 
  7.28     Subd. 38.  [ESSENTIAL SERVICE SPENDING.] "Essential service 
  7.29  spending" means the sum of the city's current expenditures 
  7.30  reduced by any related service charges reported in the 
  7.31  governmental funds table of the most recently available state 
  7.32  auditor's report on city revenues, expenditure, and debt for:  
  7.33  general government and administration; fire, police, ambulance, 
  7.34  and other public safety; streets and highways, including 
  7.35  maintenance, lighting, and engineering; and libraries. 
  7.36     [EFFECTIVE DATE.] This section is effective beginning with 
  8.1   aids payable in 2003. 
  8.2      Sec. 3.  Minnesota Statutes 2002, section 477A.011, is 
  8.3   amended by adding a subdivision to read: 
  8.4      Subd. 39.  [NONESSENTIAL SERVICE SPENDING.] "Nonessential 
  8.5   service spending" means the difference between (1) the city's 
  8.6   total current expenditures reduced by the sum of its service 
  8.7   charge revenue reported in the governmental funds table of the 
  8.8   most recently available state auditor's report on city revenues, 
  8.9   expenditure, and debt; and (2) its essential service spending. 
  8.10     [EFFECTIVE DATE.] This section is effective beginning with 
  8.11  aids payable in 2003. 
  8.12     Sec. 4.  Minnesota Statutes 2002, section 477A.011, is 
  8.13  amended by adding a subdivision to read: 
  8.14     Subd. 40.  [AVERAGE PER CAPITA NONESSENTIAL SERVICE 
  8.15  SPENDING.] "Average per capita nonessential service spending" 
  8.16  means the sum of all nonessential service spending for cities 
  8.17  with a population greater than 2,500, divided by the sum of the 
  8.18  total population for the cities with a population greater than 
  8.19  2,500. 
  8.20     [EFFECTIVE DATE.] This section is effective beginning with 
  8.21  aids payable in 2003. 
  8.22     Sec. 5.  Minnesota Statutes 2002, section 477A.0132, is 
  8.23  amended to read: 
  8.24     477A.0132 [AID REDUCTIONS TO LOCAL GOVERNMENTS.] 
  8.25     Subdivision 1.  [AFFECTED LOCAL GOVERNMENTS.] The following 
  8.26  reductions shall be made in aids paid to the following local 
  8.27  units of government: 
  8.28     (a) For aids payable in 1996, there shall be a nonpermanent 
  8.29  reduction in aids to counties, cities, towns, and special taxing 
  8.30  districts of $16,000,000, provided that Laws 1995, chapter 264, 
  8.31  article 8, section 25, subdivision 1, is enacted; otherwise the 
  8.32  reduction is $14,000,000. 
  8.33     (b) Aid reductions required under section 16A.711, 
  8.34  subdivision 5, shall be nonpermanent reductions in aids to 
  8.35  counties, cities, towns, and special taxing districts equal to 
  8.36  the difference between the aid amounts certified to be paid and 
  9.1   the amount of the appropriation to pay the aids.  
  9.2      (c) For aids payable in 1996 there shall be a permanent 
  9.3   reduction in aids to counties of $10,000,000, provided that Laws 
  9.4   1995, chapter 264, article 8, section 16, is enacted. 
  9.5      (d) For aids payable in 1997 there shall be a permanent 
  9.6   reduction in aids to county regional rail authorities and 
  9.7   counties of $6,800,000, provided that Laws 1996, chapter 471, 
  9.8   article 3, section 45, is enacted. 
  9.9      (e) For aids payable in 2003 there shall be a permanent 
  9.10  reduction in aids to cities with a population of 2,500 or more. 
  9.11     Subd. 2.  [CALCULATION OF AID REDUCTION.] The aid reduction 
  9.12  to each local government as provided under subdivision 1 will be 
  9.13  equal to the product of the reduction percentage and its 
  9.14  reduction base, except as provided in paragraph (e).  The 
  9.15  reduction base is defined as the following: 
  9.16     (a) For subdivision 1, paragraph (a), the reduction base is 
  9.17  equal to the adjusted revenue base for 1996. 
  9.18     (b) For subdivision 1, paragraph (b), the reduction base is 
  9.19  equal to the adjusted revenue base for the year in which the aid 
  9.20  payment is to be made. 
  9.21     (c) For subdivision 1, paragraph (c), the reduction base is 
  9.22  a county's aid in calendar year 1996 under section 477A.0121.  
  9.23     (d) For subdivision 1, paragraph (d), the reduction base is 
  9.24  a county's aid in calendar year 1997 under section 477A.0121. 
  9.25     Reductions under subdivisions 1, paragraph (a), and 2, 
  9.26  paragraph (a), to any individual county, city, or town are 
  9.27  limited to an amount equal to 0.45 percent of the unit's 1994 
  9.28  adjusted net tax capacity.  For this subdivision, "adjusted net 
  9.29  tax capacity" means the political subdivision's net tax capacity 
  9.30  calculated using the method for calculating city net tax 
  9.31  capacity under section 477A.011, subdivision 20. 
  9.32     (e) For subdivision 1, paragraph (e), the reduction in a 
  9.33  city's aid shall be equal to the product (1) the amount by which 
  9.34  its per capita nonessential service spending exceeds the average 
  9.35  per capita nonessential service spending and (2) the city's 
  9.36  population. 
 10.1      Subd. 3.  [ORDER OF AID REDUCTIONS.] (a) The aid reduction 
 10.2   to a local government calculated under subdivisions 1, 
 10.3   paragraphs (a) and (c), and 2, paragraphs (a) and (c), is 
 10.4   applied to homestead and agricultural credit aid under section 
 10.5   273.1398 only. 
 10.6      (b) The aid reduction to a local government calculated 
 10.7   under subdivisions 1, paragraph (d), and 2, paragraph (d), is 
 10.8   applied to homestead and agricultural credit aid paid under 
 10.9   section 273.1398 only; the amount is first subtracted from the 
 10.10  amount paid to a county's regional rail authority, if there is 
 10.11  one, and then from the county's general homestead and 
 10.12  agricultural credit aid. 
 10.13     (c) The aid reduction to a city calculated under 
 10.14  subdivisions 1, paragraph (e), and 2, paragraph (e), is applied 
 10.15  first to the city aid base as defined in section 477A.011, 
 10.16  subdivision 36, and then, if necessary, to the remainder of the 
 10.17  city's formula aid as calculated under section 477A.013, 
 10.18  subdivision 8.  The total aid a city receives under section 
 10.19  477A.013, subdivision 9, may not be less than zero. 
 10.20     (d) The aid reduction to a local government as calculated 
 10.21  under other paragraphs of subdivisions 1 and 2, is first applied 
 10.22  to its local government aid under section 477A.013; then if 
 10.23  necessary, to its homestead and agricultural credit aid under 
 10.24  section 273.1398, subdivision 2; and then, if necessary, to its 
 10.25  disparity reduction aid under section 273.1398, subdivision 3.  
 10.26  No aid payment may be less than $0.  Aid reductions under this 
 10.27  section in any given year shall be divided equally between the 
 10.28  July and December aid payments unless specified otherwise. 
 10.29     [EFFECTIVE DATE.] This section is effective for aids 
 10.30  payable in calendar year 2003. 
 10.31     Sec. 6.  Minnesota Statutes 2002, section 477A.03, 
 10.32  subdivision 2, is amended to read: 
 10.33     Subd. 2.  [ANNUAL APPROPRIATION.] (a) A sum sufficient to 
 10.34  discharge the duties imposed by sections 477A.011 to 477A.014 is 
 10.35  annually appropriated from the general fund to the commissioner 
 10.36  of revenue.  
 11.1      (b) Aid payments to counties under section 477A.0121 are 
 11.2   limited to $20,265,000 in 1996.  Aid payments to counties under 
 11.3   section 477A.0121 are limited to $27,571,625 in 1997.  For aid 
 11.4   payable in 1998 and thereafter, the total aids paid under 
 11.5   section 477A.0121 are the amounts certified to be paid in the 
 11.6   previous year, adjusted for inflation as provided under 
 11.7   subdivision 3. 
 11.8      (c)(i) For aids payable in 1998 and thereafter, the total 
 11.9   aids paid to counties under section 477A.0122 are the amounts 
 11.10  certified to be paid in the previous year, adjusted for 
 11.11  inflation as provided under subdivision 3. 
 11.12     (ii) Aid payments to counties under section 477A.0122 in 
 11.13  2000 are further increased by an additional $20,000,000 in 2000. 
 11.14     (d) Aid payments to cities in 2002 under section 477A.013, 
 11.15  subdivision 9, are limited to the amounts certified to be paid 
 11.16  in the previous year, adjusted for inflation as provided in 
 11.17  subdivision 3, and increased by $140,000,000.  For aids payable 
 11.18  in 2003, the total aids paid under section 477A.013, subdivision 
 11.19  9, are the amounts certified to be paid in the previous year, 
 11.20  adjusted for inflation as provided under subdivision 3.  For 
 11.21  aids payable in 2004, the total aids paid under section 
 11.22  477A.013, subdivision 9, are the amounts certified to be paid in 
 11.23  the previous year, adjusted for inflation as provided under 
 11.24  subdivision 3, and increased by the amount certified to be paid 
 11.25  in 2003 under section 477A.06, and reduced by the total aid 
 11.26  reduction to all cities in calendar year 2003 under section 
 11.27  477A.0132.  For aids payable in 2005 and thereafter, the total 
 11.28  aids paid under section 477A.013, subdivision 9, are the amounts 
 11.29  certified to be paid in the previous year, adjusted for 
 11.30  inflation as provided under subdivision 3.  The additional 
 11.31  amount authorized under subdivision 4 is not included when 
 11.32  calculating the appropriation limits under this paragraph. 
 11.33     (e) Reimbursements made to counties under section 477A.0123 
 11.34  in calendar year 2005 and thereafter are limited to an amount 
 11.35  equal to the maximum allowed appropriation under this section in 
 11.36  the previous year, multiplied by a percent to be established by 
 12.1   law.  If no percent is established by law, the appropriation is 
 12.2   limited to the total amount appropriated for this purpose in the 
 12.3   previous year. 
 12.4      [EFFECTIVE DATE.] This section is effective beginning with 
 12.5   aids payable in calendar year 2004.