HF 1608

as introduced - 88th Legislature (2013 - 2014) Posted on 03/18/2013 01:48pm

A bill for an act
relating to taxation; local government aid; modifying the formula and changing
the appropriation; amending Minnesota Statutes 2012, sections 477A.011,
subdivisions 30, 34, 42, by adding subdivisions; 477A.013, subdivisions 8, 9, by
adding a subdivision; 477A.03, subdivision 2a, by adding a subdivision; repealing
Minnesota Statutes 2012, sections 477A.011, subdivisions 2a, 19, 29, 31, 32, 33,
36, 39, 40, 41, 42; 477A.013, subdivisions 11, 12; 477A.0133; 477A.0134.

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

Section 1.

Minnesota Statutes 2012, section 477A.011, subdivision 30, is amended to
read:

Subd. 30.

Pre-1940 housing percentage.

(a) Except as provided in paragraph (b),
"pre-1940 housing percentage" for a city is 100 times the most recent federal census
count of all housing units in the city built before 1940, divided by the total number of all
housing units in the city. Housing units includes both occupied and vacant housing units
as defined by the federal census.

(b) For the city of East Grand Forks only, "pre-1940 housing percentage" is equal to
100 times the 1990 federal census count of all housing units in the city built before 1940,
divided by the most recent federal census counts of all housing units in the city. Housing
units includes both occupied and vacant housing units as defined by the federal census.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year
2014 and thereafter.

Sec. 2.

Minnesota Statutes 2012, section 477A.011, is amended by adding a
subdivision to read:

Subd. 30a.

Percent of housing built between 1940 and 1970.

"Percent of housing
built between 1940 and 1970" is equal to 100 times the most recent federal census count of
all housing units in the city built after 1939 but before 1970, divided by the total number
of all housing units in the city. Housing units includes both occupied and vacant housing
units as defined by the federal census.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year
2014 and thereafter.

Sec. 3.

Minnesota Statutes 2012, section 477A.011, subdivision 34, is amended to read:

Subd. 34.

City revenue need.

(a) For a city with a population equal to or greater
than 2,500 10,000, "city revenue need" is the greater of 285 or 1.15 times the sum of (1)
5.0734098 4.59 times the pre-1940 housing percentage; plus (2) 19.141678 times the
population decline percentage 0.622 times the percent of housing built between 1940 and
1970; plus (3) 2504.06334 times the road accidents factor 169.415 times the jobs per
capita; plus (4) 355.0547; minus (5) the metropolitan area factor; minus (6) 49.10638
times the household size 307.664.

(b) For a city with a population equal to or greater than 2,500 and less than 10,000,
"city revenue need" is 1.15 times the sum of (1) 572.62; plus (2) 5.026 times the pre-1940
housing percentage; plus (3) 53.768 times household size; plus (4) 14.022 times peak
population decline.

(b) (c) For a city with a population less than 2,500, "city revenue need" is the sum of
(1) 2.387 times the pre-1940 housing percentage; plus (2) 2.67591 times the commercial
industrial percentage; plus (3) 3.16042 times the population decline percentage; plus (4)
1.206 times the transformed population; minus (5) 62.772 410 plus 0.367 times the city's
population over 100. The city revenue need under this paragraph shall not exceed 630.

(c) (d) For a city with a population of at least 2,500 or more and a population in one
of the most recently available five years that was less than 2,500, "city revenue need"
is the sum of (1) its city revenue need calculated under paragraph (a) multiplied by its
transition factor; plus (2) its city revenue need calculated under the formula in paragraph
(b) multiplied by the difference between one and its transition factor. For purposes of this
paragraph, a city's "transition factor" is equal to 0.2 multiplied by the number of years that
the city's population estimate has been 2,500 or more. This provision only applies for aids
payable in calendar years 2006 to 2008 to cities with a 2002 population of less than 2,500.
It applies to any city for aids payable in 2009 and thereafter but less than 3,000, the "city
revenue need" equals (1) the transition factor times the city's revenue need calculated in
paragraph (b) plus (2) 630 times the difference between one and the transition factor. For
a city with a population of at least 10,000 but less than 10,500, the "city revenue need"
equals (1) the transition factor times the city's revenue need calculated in paragraph (a)
plus (2) the city's revenue need calculated under the formula in paragraph (b) times the
difference between one and the transition factor. For purposes of this paragraph "transition
factor" is 0.2 percent times the amount that the city's population exceeds the minimum
threshold in either of the first two sentences.

(d) (e) The city revenue need cannot be less than zero.

(e) (f) For calendar year 2005 2015 and subsequent years, the city revenue need for
a city, as determined in paragraphs (a) to (d) (e), is multiplied by the ratio of the annual
implicit price deflator for government consumption expenditures and gross investment for
state and local governments as prepared by the United States Department of Commerce,
for the most recently available year to the 2003 2013 implicit price deflator for state
and local government purchases.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year
2014 and thereafter.

Sec. 4.

Minnesota Statutes 2012, section 477A.011, subdivision 42, is amended to read:

Subd. 42.

City jobs base Jobs per capita.

(a) "City jobs base" for a city with a
population of 5,000 or more is equal to the product of (1) $25.20, (2) the number of
jobs per capita in the city, and (3) its population. For cities with a population less than
5,000, the city jobs base is equal to zero. For a city receiving aid under subdivision 36,
paragraph (k), its city jobs base is reduced by the lesser of 36 percent of the amount of
aid received under that paragraph or $1,000,000. No city's city jobs base may exceed
$4,725,000 under this paragraph.

(b) For calendar year 2010 and subsequent years, the city jobs base for a city, as
determined in paragraph (a), is multiplied by the ratio of the appropriation under section
477A.03, subdivision 2a, for the year in which the aid is paid to the appropriation under
that section for aids payable in 2009.

(c) For purposes of this subdivision, "Jobs per capita in the city" means (1) the average
annual number of employees in the city based on the data from the Quarterly Census of
Employment and Wages, as reported by the Department of Employment and Economic
Development, for the most recent calendar year available as of May 1, 2008 November 1 of
every odd-numbered year, divided by (2) the city's population for the same calendar year as
the employment data. The commissioner of the Department of Employment and Economic
Development shall certify to the city the average annual number of employees for each
city by June 1, 2008 January 15, of every even-numbered year beginning with January 15,
2014. For aids payable in 2014 only, " jobs per capita" has the same meaning it had under
this subdivision for aids payable in 2013. A city may challenge an estimate under this
paragraph by filing its specific objection, including the names of employers that it feels
may have misreported data, in writing with the commissioner by June 20, 2008 December
1 of every odd-numbered year. The commissioner shall make every reasonable effort to
address the specific objection and adjust the data as necessary. The commissioner shall
certify the estimates of the annual employment to the commissioner of revenue by July 15,
2008 January 15 of all even-numbered years, including any estimates still under objection.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year
2014 and thereafter.

Sec. 5.

Minnesota Statutes 2012, section 477A.011, is amended by adding a
subdivision to read:

Subd. 44.

Peak population decline.

"Peak population decline" is equal to 100
times the difference between one and the ratio of the city's current population, to the
highest city population reported in a federal census from the 1970 census or later. "Peak
population decline" shall not be less than zero.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year
2014 and thereafter.

Sec. 6.

Minnesota Statutes 2012, section 477A.013, subdivision 8, is amended to read:

Subd. 8.

City formula aid.

(a) For aids payable in 2014 only, the formula aid for a
city is equal to the sum of (1) its 2013 certified aid and (2) the product of (i) the difference
between its unmet need and its 2013 certified aid and (ii) the aid gap percentage.

(b) For aids payable in 2015 and thereafter, the formula aid for a city is equal to
the sum of (1) its city jobs base, (2) its small city aid base, and (3) the need increase
percentage multiplied by the average of its unmet need for the most recently available two
years formula aid in the previous year and (2) the product of (i) the difference between
its unmet need and its certified aid in the previous year under subdivision 9, and (ii)
the aid gap percentage.

No city may have a formula aid amount less than zero. The need increase aid gap
percentage must be the same for all cities.

The applicable need increase aid gap percentage must be calculated by the
Department of Revenue so that the total of the aid under subdivision 9 equals the total
amount available for aid under section 477A.03. Data used in calculating aids to cities
under sections 477A.011 to 477A.013 shall be the most recently available data as of
January 1 in the year in which the aid is calculated except that the data used to compute "net
levy" in subdivision 9 is the data most recently available at the time of the aid computation.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year
2014 and thereafter.

Sec. 7.

Minnesota Statutes 2012, section 477A.013, subdivision 9, is amended to read:

Subd. 9.

City aid distribution.

(a) In calendar year 2013 2014 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 aid adjustment under subdivision 13.

(b) For aids payable in 2013 and 2014 only, the total aid in the previous year for
any city shall mean the amount of aid it was certified to receive for aids payable in 2012
under this section. For aids payable in 2015 and thereafter, the total aid in the previous
year for any city means the amount of aid it was certified to receive under this section in
the previous payable year.

(c) For aids payable in 2010 and thereafter, the total aid for any city shall not exceed
the sum of (1) ten percent of the city's net levy for the year prior to the aid distribution
plus (2) its total aid in the previous year. For aids payable in 2009 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) (b) For aids payable in 2014 only, the total aid for a city may not be less than the
amount it was certified to receive in 2013. For aids payable in 2010 2015 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. 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 its net levy in the year prior to the aid distribution.

(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.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year
2014 and thereafter.

Sec. 8.

Minnesota Statutes 2012, section 477A.013, is amended by adding a
subdivision to read:

Subd. 13.

Certified aid adjustments.

(a) A city that received an aid base increase
under Minnesota Statutes 2012, section 477A.011, subdivision 36, paragraph (e), shall
have its total aid under subdivision 9 increased by an amount equal to $150,000 for aids
payable in 2014 through 2018.

(b) A city that received a temporary aid increase under Minnesota Statutes 2012,
section 477A.011, subdivision 36, paragraph (m), (v), or (w), shall have its total aid under
subdivision 9 decreased by the amount of its aid base increase under those paragraphs in
calendar year 2013.

Sec. 9.

Minnesota Statutes 2012, section 477A.03, subdivision 2a, is amended to read:

Subd. 2a.

Cities.

For aids payable in 2013 2014 and thereafter, the total aid paid
under section 477A.013, subdivision 9, is $426,438,012 $......., multiplied by the inflation
adjustment under subdivision 6.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year
2014 and thereafter.

Sec. 10.

Minnesota Statutes 2012, section 477A.03, is amended by adding a
subdivision to read:

Subd. 6.

Inflation adjustment.

In 2015 and thereafter, the amount paid under
subdivision 2a shall be increased by an amount equal to one plus the sum of (1) the
percentage increase in the implicit price deflator for government expenditures and gross
investment for state and local government purchases as prepared by the United States
Department of Commerce, for the 12-month period ending March 31 of the previous
calendar year, and (2) the percentage increase in total city population for the most recently
available years as of January 15 of the current year. The percentage increase in this
subdivision shall not be less than 2.5 percent or greater than five percent.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year
2014 and thereafter.

Sec. 11. REPEALER.

Minnesota Statutes 2012, sections 477A.011, subdivisions 2a, 19, 29, 31, 32, 33, 36,
39, 40, 41, and 42; 477A.013, subdivisions 11 and 12; 477A.0133; and 477A.0134, are
repealed.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year
2014 and thereafter.