HF 2059

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; increasing education funding;
modifying the local government aid formula and
increasing the program's appropriation; eliminating
the dedication of a portion of motor vehicle sales tax
proceeds to transit; authorizing either a local sales
tax or a property tax levy for transit; appropriating
money; amending Minnesota Statutes 2004, sections
126C.10, by adding a subdivision; 174.24, subdivision
3b; 297B.09, subdivision 1; 473.388, subdivisions 4,
7, by adding a subdivision; 473.446, subdivision 1, by
adding subdivisions; 477A.011, subdivisions 34, 36;
477A.013, subdivisions 8, 9; 477A.03, subdivision 2a;
proposing coding for new law in Minnesota Statutes,
chapter 473.

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

Section 1.

Minnesota Statutes 2004, section 126C.10, is
amended by adding a subdivision to read:

new text begin Subd. 2b. new text end

new text begin Additional basic revenue. new text end

new text begin For fiscal year 2007
and subsequent years, the formula allowance in subdivision 2 is
increased by $84.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue
beginning in fiscal year 2007.
new text end

Sec. 2.

Minnesota Statutes 2004, section 174.24,
subdivision 3b, is amended to read:

Subd. 3b.

Operating assistance; recipient
classifications.

(a) The commissioner shall determine the total
operating cost of any public transit system receiving or
applying for assistance in accordance with generally accepted
accounting principles. To be eligible for financial assistance,
an applicant or recipient shall provide to the commissioner all
financial records and other information and shall permit any
inspection reasonably necessary to determine total operating
cost and correspondingly the amount of assistance that may be
paid to the applicant or recipient. Where more than one county
or municipality contributes assistance to the operation of a
public transit system, the commissioner shall identify one as
lead agency for the purpose of receiving money under this
section.

(b) Prior to distributing operating assistance to eligible
recipients for any contract period, the commissioner shall place
all recipients into one of the following classifications:
urbanized area service, small urban area service, rural area
service, and elderly and handicapped service. The commissioner
shall distribute funds under this section so that the percentage
of total operating cost paid by any recipient from local sources
will not exceed the percentage for that recipient's
classification, except as provided in an undue hardship case.
The percentages must be: for urbanized area service deleted text begin and deleted text end new text begin , 44
percent; for new text end small urban area service, deleted text begin 20 deleted text end new text begin 65 new text end percent; for rural
area service, deleted text begin 15 deleted text end new text begin 33 new text end percent; and for elderly and handicapped
service, deleted text begin 15 deleted text end new text begin 19 new text end percent. The remainder of the total operating
cost will be paid from state funds less any assistance received
by the recipient from any federal source. For purposes of this
subdivision, "local sources" means all local sources of funds
and includes all operating revenue, tax levies, and
contributions from public funds, except that the commissioner
may exclude from the total assistance contract revenues derived
from operations the cost of which is excluded from the
computation of total operating cost. Total operating costs of
the Duluth Transit Authority or a successor agency does not
include costs related to the Superior, Wisconsin service
contract and the Independent School District No. 709 service
contract. For calendar years 2004 and 2005, to enable public
transit systems to meet the provisions of this section, the
commissioner may adjust payments of financial assistance to
recipients that were under a contract with the department on
January 1, 2003. Payments to such a recipient in calendar years
2004 and 2005 from the greater Minnesota transit fund may not be
less than the payment to the recipient from that fund in
calendar year 2003, except for reductions made necessary by
reductions in base funding for those years.

(c) If a recipient informs the commissioner in writing
after the establishment of these percentages but prior to the
distribution of financial assistance for any year that paying
its designated percentage of total operating cost from local
sources will cause undue hardship, the commissioner may reduce
the percentage to be paid from local sources by the recipient
and increase the percentage to be paid from local sources by one
or more other recipients inside or outside the classification.
However, the commissioner may not reduce or increase any
recipient's percentage under this paragraph for more than two
years successively. If for any year the funds appropriated to
the commissioner to carry out the purposes of this section are
insufficient to allow the commissioner to pay the state share of
total operating cost as provided in this paragraph, the
commissioner shall reduce the state share in each classification
to the extent necessary.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for grants in
2006 and thereafter.
new text end

Sec. 3.

Minnesota Statutes 2004, section 297B.09,
subdivision 1, is amended to read:

Subdivision 1.

Deposit of revenues.

(a) Money collected
and received under this chapter must be deposited as provided in
this subdivision.

(b) From July 1, 2002, to June 30, 2003, 32 percent of the
money collected and received must be deposited in the highway
user tax distribution fund, 20.5 percent must be deposited in
the metropolitan area transit fund under section 16A.88, and
1.25 percent must be deposited in the greater Minnesota transit
fund under section 16A.88. The remaining money must be
deposited in the general fund.

(c) From July 1, 2003, to June 30, deleted text begin 2007 deleted text end new text begin 2006 new text end , 30 percent of
the money collected and received must be deposited in the
highway user tax distribution fund, 21.5 percent must be
deposited in the metropolitan area transit fund under section
16A.88, 1.43 percent must be deposited in the greater Minnesota
transit fund under section 16A.88, 0.65 percent must be
deposited in the county state-aid highway fund, and 0.17 percent
must be deposited in the municipal state-aid street fund. The
remaining money must be deposited in the general fund.

(d) new text begin From July 1, 2006, to June 30, 2007, 30 percent of the
money collected and received must be deposited in the highway
user tax distribution fund; 0.65 percent must be deposited in
the county state aid highway fund; and 0.17 percent must be
deposited in the municipal state aid street fund. The remaining
money must be deposited in the general fund.
new text end

new text begin (e) new text end On and after July 1, 2007, 32 percent of the money
collected and received must be deposited in the highway user tax
distribution fund deleted text begin , 20.5 percent must be deposited in the
metropolitan area transit fund under section 16A.88, and 1.25
percent must be deposited in the greater Minnesota transit fund
under section 16A.88 deleted text end . The remaining money must be deposited in
the general fund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for collections
after June 30, 2006.
new text end

Sec. 4.

Minnesota Statutes 2004, section 473.388,
subdivision 4, is amended to read:

Subd. 4.

Financial assistance new text begin ; sales tax option new text end .

(a) new text begin The
provisions of this subdivision only apply if the council elects
to impose a sales tax for transit operations under section
473.920.
new text end

new text begin (b) new text end The council must grant the requested financial
assistance if it determines that the proposed service is
intended to replace the service to the applying city or town or
combination thereof by the council and that the proposed service
will meet the needs of the applicant at least as efficiently and
effectively as the existing service.

deleted text begin (b) deleted text end new text begin (c) new text end The amount of assistance which the council must
provide to a system under this section may not be less than the
sum of the amounts determined for each municipality comprising
the system as follows:

(1) the transit operating assistance grants received under
this subdivision by the municipality in calendar year 2001 or
the tax revenues for transit services levied by the municipality
for taxes payable in 2001, including that portion of the levy
derived from the areawide pool under section 473F.08,
subdivision 3, clause (a), plus the portion of the
municipality's aid under section 273.1398, subdivision 2,
attributable to the transit levy; times

(2) the ratio of (i) the deleted text begin appropriation from the transit
fund to the council deleted text end new text begin revenues received or expected to be received
under section 473.920 new text end for nondebt transit operations for the
current fiscal year to (ii) the total levy certified by the
council under section 473.446 and the opt-out municipalities
under this section for taxes payable in 2001, including the
portion of homestead and agricultural credit aid under section
273.1398, subdivision 2, attributable to nondebt transit levies,
times

(3) the ratio of (i) the municipality's total taxable
market value for taxes payable in the most recent year for which
data is available divided by the municipality's total taxable
market value for taxes payable in 2001, to (ii) the total
taxable market value of all property in the metropolitan area
for taxes payable in the most recent year for which data is
available divided by the total taxable market value of all
property in the metropolitan area for taxes payable in 2001.

deleted text begin (c) deleted text end new text begin (d) new text end The council shall pay the amount to be provided to
the recipient from the funds the council would otherwise use to
fund its transit operations.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for 2006 and
thereafter.
new text end

Sec. 5.

Minnesota Statutes 2004, section 473.388, is
amended by adding a subdivision to read:

new text begin Subd. 4a. new text end

new text begin Financial assistance; property tax option. new text end

new text begin (a)
The provisions of this subdivision will apply only if the
council elects to impose a property tax for transit operations
under section 473.446, subdivision 1, paragraph (a), clause (2).
new text end

new text begin (b) The council may grant the requested financial
assistance if it determines that the proposed service is
intended to replace the service to the applying city or town or
combination thereof by the council and that the proposed service
will meet the needs of the applicant at least as efficiently and
effectively as the existing service.
new text end

new text begin (c) The amount of assistance which the council may provide
to a system under this section may not exceed the sum of:
new text end

new text begin (1) the portion of the available local transit funds which
the applicant proposes to use to subsidize the proposed service;
and
new text end

new text begin (2) an amount of financial assistance bearing an identical
proportional relationship to the amount under clause (1) as the
total amount of funds used by the council to fund its transit
operations bears to the total amount of taxes collected by the
council under section 473.446, subdivision 1, paragraph (a),
clause (2).
new text end

new text begin (d) The council shall pay the amount to be provided to the
recipient from the funds the council would otherwise use to fund
its transit operations.
new text end

new text begin (e) For purposes of this section, "available local transit
funds" means 90 percent of the tax revenues which would accrue
to the council from the tax it levies under section 473.446,
subdivision 1, paragraph (a), clause (2), in the applicant city
or town or combination thereof.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes
payable in 2006 and thereafter.
new text end

Sec. 6.

Minnesota Statutes 2004, section 473.388,
subdivision 7, is amended to read:

Subd. 7.

Local levy option.

(a) new text begin If the council elects to
levy a property tax for transit operations under section
473.446, subdivision 1, paragraph (a), clause (2), new text end a statutory
or home rule charter city or town that is eligible for
assistance under this section may levy a tax new text begin for payment of the
operating and capital expenditures for transit and other related
activities and to provide new text end for payment of obligations issued by
the municipality for deleted text begin capital expenditures for transit and other
related activities, provided that property taxes were pledged to
satisfy the obligations, and provided that legislative
appropriations are insufficient to satisfy the obligations deleted text end new text begin such
purposes, provided that the tax must be sufficient to maintain
the level of transit service provided in the municipality in the
previous year new text end .

(b) new text begin The transit tax revenues derived by the municipality
may not exceed 88 percent of the tax revenues that would be
raised by the council's levy under section 473.446, subdivision
1, paragraph (a), clause (2), within the municipality, including
the areawise portion of the levy under chapter 473F, if the
municipality were not eligible for treatment under this section.
new text end

new text begin The commissioner of revenue shall certify the
municipality's levy limitation under this subdivision to the
municipality by August 1 of the levy year. The tax must be
accumulated and kept in a separate fund to be known as the
"replacement transit fund."
new text end

new text begin (c) new text end This subdivision is consistent with the transit
redesign plan. Eligible municipalities opting to operate under
this subdivision shall continue to meet the regional performance
standards established by the council.

deleted text begin (c) deleted text end new text begin (d) new text end Within the designated Americans with Disabilities
Act area, metro mobility remains the obligation of the state.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes
payable in 2006 and thereafter.
new text end

Sec. 7.

Minnesota Statutes 2004, section 473.446,
subdivision 1, is amended to read:

Subdivision 1.

Metropolitan area transit tax.

(a) For
the purposes of sections 473.405 to 473.449 and the metropolitan
transit system, except as otherwise provided in this
subdivision, the council shall levy each year upon all taxable
property within the metropolitan area, defined in section
473.121, subdivision 2, a transit tax consisting of:

(1) an amount necessary to provide full and timely payment
of certificates of indebtedness, bonds, including refunding
bonds or other obligations issued or to be issued under section
473.39 by the council for purposes of acquisition and betterment
of property and other improvements of a capital nature and to
which the council has specifically pledged tax levies under this
clause; and

(2) deleted text begin an additional amount necessary to provide full and
timely payment of certificates of indebtedness issued by the
council, after consultation with the commissioner of finance, if
revenues to the metropolitan area transit fund in the fiscal
year in which the indebtedness is issued increase over those
revenues in the previous fiscal year by a percentage less than
the percentage increase for the same period in the revised
Consumer Price Index for all urban consumers for the St.
Paul-Minneapolis metropolitan area prepared by the United States
Department of Labor deleted text end new text begin an amount which shall be used for payment of
the expenses of operating transit and paratransit services,
provided that the council has not elected to impose a sales tax
under section 473.920 new text end .

(b) deleted text begin Indebtedness to which property taxes have been pledged
under paragraph (a), clause (2), that is incurred in any fiscal
year may not exceed the amount necessary to make up the
difference between (1) the amount that the council received or
expects to receive in that fiscal year from the metropolitan
area transit fund and (2) the amount the council received from
that fund in the previous fiscal year multiplied by the
percentage increase for the same period in the revised Consumer
Price Index for all urban consumers for the St. Paul-Minneapolis
metropolitan area prepared by the United States Department of
Labor. deleted text end new text begin The property tax levied by the council under paragraph
(a), clause (2), must not exceed the following amount for the
years specified:
new text end

new text begin (1) for taxes payable in 2006, one-half of the amount
received by the council and municipalities for that purpose from
the metropolitan area transit fund under section 16A.88,
subdivision 2, in fiscal year 2005, adjusted for inflation,
minus (i) any amounts to be levied for taxes payable in 2006
under section 473.388, subdivision 7, and (ii) any amounts to be
levied for taxes payable in 2006 under subdivision 1c;
new text end

new text begin (2) for taxes payable in 2007, the council's property tax
levy limitation for taxes payable in 2006 determined under this
subdivision before reduction by any amounts levied in the
previous year under section 473.388, subdivision 7, and under
subdivision 1c, multiplied by a factor of two and adjusted for
inflation, minus (i) any amounts to be levied for taxes payable
in 2007 under section 473.388, subdivision 7, and (ii) any
amounts to be levied for taxes payable in 2007 under subdivision
1c; and
new text end

new text begin (3) for taxes payable in 2008 and subsequent years, the
council's property tax levy limitation for the previous year
determined under this subdivision before reductions by any
amounts levied in the previous year under section 473.388,
subdivision 7, and subdivision 1c, adjusted for inflation, minus
any amounts to be levied in the current levy year under section
473.388, subdivision 7, and subdivision 1c.
new text end

new text begin (c) For the purposes of this subdivision, "adjusted for
inflation" means multiplied by the percentage increase in the
revised Consumer Price Index for all urban consumers in the St.
Paul-Minneapolis metropolitan area prepared by the United States
Department of Labor for the most recent 12-month period
available compared to the previous 12-month period.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes
payable in 2006 and thereafter.
new text end

Sec. 8.

Minnesota Statutes 2004, section 473.446, is
amended by adding a subdivision to read:

new text begin Subd. 1c. new text end

new text begin Taxation within transit area. new text end

new text begin For the purposes
of sections 473.405 to 473.449, if the Metropolitan Council
elects to levy a tax under subdivision 1, paragraph (a), clause
(2), the council shall levy a transit tax upon all taxable
property within the metropolitan transit area but outside of the
metropolitan transit taxing district, as defined in subdivision
2, at a rate equal to ten percent of the rate within the transit
district. The proceeds of this tax shall be used only for
paratransit services or ride sharing programs designed to serve
persons located within the transit area but outside of the
transit taxing district.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes
payable in 2006 and thereafter.
new text end

Sec. 9.

Minnesota Statutes 2004, section 473.446, is
amended by adding a subdivision to read:

new text begin Subd. 1d. new text end

new text begin Levy within eligible municipalities. new text end

new text begin If the
council chooses to levy a tax under subdivision 1, paragraph
(a), clause (2), the council's levy upon taxable property within
a municipality levying taxes under section 473.388, subdivision
7, is the tax that would be levied within the municipality if it
were not levying under section 473.388, subdivision 7, minus the
amount to be levied by the municipality under section 473.388,
subdivision 7, for the current levy year.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes
payable in 2006 and thereafter.
new text end

Sec. 10.

new text begin [473.920] METROPOLITAN AREA TRANSIT SERVICES.
new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax
authorized. new text end

new text begin Notwithstanding section 477A.016 or any other
provision of law, ordinance, or city charter, the council may
impose by resolution a sales and use tax of up to one-half of
one percent on sales in the metropolitan area for the purposes
specified in subdivision 3. This tax may be imposed only if the
council does not elect to levy for transit operations under
section 473.446, subdivision 1, paragraph (a), clause (2).
Except as otherwise provided in this section, the provisions of
section 297A.99, subdivisions 4 to 12, govern the application,
administration, collection, and enforcement of the tax
authorized under this subdivision.
new text end

new text begin Subd. 2. new text end

new text begin Use of revenues. new text end

new text begin Revenues received from taxes
authorized by subdivisions 1 and 2, minus the costs of
collection, must be used by the council to fund metropolitan
area transit services and to pay for acquisition of buses,
highway shoulder improvements for buses, and other capital and
operating expenses related to metropolitan area transit
systems. The amount expended on metropolitan transit systems in
each calendar year must be at least equal to (1) the amount of
motor vehicle sales tax revenues deposited in fiscal year 2006,
multiplied by (2) 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 2004 implicit price deflator for
government consumption expenditures and gross investment for
state and governments. The council may use any funds in excess
of that amount to fund congestion relief projects related to
transportation in the metropolitan area.
new text end

new text begin Subd. 3. new text end

new text begin Application. new text end

new text begin This section applies in the
counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and
Washington.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales made
after June 30, 2006.
new text end

Sec. 11.

Minnesota Statutes 2004, 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, "city revenue need"
is the sum of (1) 5.0734098 times the pre-1940 housing
percentage; plus (2) 19.141678 times the population decline
percentage; plus (3) 2504.06334 times the road accidents factor;
plus (4) 355.0547; minus (5) the metropolitan area factor; minus
(6) 49.10638 times the household size.

(b) 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.

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

(d) For calendar year 2005 and subsequent years, the city
revenue need for a city, as determined in paragraphs (a) to (c),
is multiplied by the ratio of the deleted text begin annual deleted text end new text begin most recently available
first quarter new text end implicit price deflator for government consumption
expenditures and gross investment for state and local
governments as prepared by the United States Department of
Commerce, deleted text begin for the most recently available year deleted text end to the deleted text begin 2003 deleted text end new text begin first
quarter 2000 new text end implicit price deflator for state and local
government purchases.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids
payable in 2006 and thereafter.
new text end

Sec. 12.

Minnesota Statutes 2004, section 477A.011,
subdivision 36, is amended to read:

Subd. 36.

City aid base.

(a) Except as otherwise
provided in this subdivision, "city aid base" is zero.

(b) The city aid base for any city with a population less
than 500 is increased by $40,000 for aids payable in calendar
year 1995 and thereafter, and the maximum amount of total aid it
may receive under section 477A.013, subdivision 9, paragraph
(c), is also increased by $40,000 for aids payable in calendar
year 1995 only, provided that:

(i) the average total tax capacity rate for taxes payable
in 1995 exceeds 200 percent;

(ii) the city portion of the tax capacity rate exceeds 100
percent; and

(iii) its city aid base is less than $60 per capita.

(c) The city aid base for a city is increased by $20,000 in
1998 and thereafter and the maximum amount of total aid it may
receive under section 477A.013, subdivision 9, paragraph (c), is
also increased by $20,000 in calendar year 1998 only, provided
that:

(i) the city has a population in 1994 of 2,500 or more;

(ii) the city is located in a county, outside of the
metropolitan area, which contains a city of the first class;

(iii) the city's net tax capacity used in calculating its
1996 aid under section 477A.013 is less than $400 per capita;
and

(iv) at least four percent of the total net tax capacity,
for taxes payable in 1996, of property located in the city is
classified as railroad property.

(d) The city aid base for a city is increased by $200,000
in 1999 and thereafter and the maximum amount of total aid it
may receive under section 477A.013, subdivision 9, paragraph
(c), is also increased by $200,000 in calendar year 1999 only,
provided that:

(i) the city was incorporated as a statutory city after
December 1, 1993;

(ii) its city aid base does not exceed $5,600; and

(iii) the city had a population in 1996 of 5,000 or more.

(e) The city aid base for a city is increased by $450,000
in 1999 to 2008 and the maximum amount of total aid it may
receive under section 477A.013, subdivision 9, paragraph (c), is
also increased by $450,000 in calendar year 1999 only, provided
that:

(i) the city had a population in 1996 of at least 50,000;

(ii) its population had increased by at least 40 percent in
the ten-year period ending in 1996; and

(iii) its city's net tax capacity for aids payable in 1998
is less than $700 per capita.

(f) deleted text begin Beginning in 2004, the city aid base for a city is
equal to the sum of its city aid base in 2003 and the amount of
additional aid it was certified to receive under section 477A.06
in 2003. For 2004 only, the maximum amount of total aid a city
may receive under section 477A.013, subdivision 9, paragraph
(c), is also increased by the amount it was certified to receive
under section 477A.06 in 2003.
deleted text end

deleted text begin (g) deleted text end The city aid base for a city is increased by $150,000
for aids payable in 2000 and thereafter, and the maximum amount
of total aid it may receive under section 477A.013, subdivision
9, paragraph (c), is also increased by $150,000 in calendar year
2000 only, provided that:

(1) the city has a population that is greater than 1,000
and less than 2,500;

(2) its commercial and industrial percentage for aids
payable in 1999 is greater than 45 percent; and

(3) the total market value of all commercial and industrial
property in the city for assessment year 1999 is at least 15
percent less than the total market value of all commercial and
industrial property in the city for assessment year 1998.

deleted text begin (h) deleted text end new text begin (g) new text end The city aid base for a city is increased by
$200,000 in 2000 and thereafter, and the maximum amount of total
aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $200,000 in calendar year
2000 only, provided that:

(1) the city had a population in 1997 of 2,500 or more;

(2) the net tax capacity of the city used in calculating
its 1999 aid under section 477A.013 is less than $650 per
capita;

(3) the pre-1940 housing percentage of the city used in
calculating 1999 aid under section 477A.013 is greater than 12
percent;

(4) the 1999 local government aid of the city under section
477A.013 is less than 20 percent of the amount that the formula
aid of the city would have been if the need increase percentage
was 100 percent; and

(5) the city aid base of the city used in calculating aid
under section 477A.013 is less than $7 per capita.

deleted text begin (i) deleted text end new text begin (h) new text end The city aid base for a city is increased by
$102,000 in 2000 and thereafter, and the maximum amount of total
aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $102,000 in calendar year
2000 only, provided that:

(1) the city has a population in 1997 of 2,000 or more;

(2) the net tax capacity of the city used in calculating
its 1999 aid under section 477A.013 is less than $455 per
capita;

(3) the net levy of the city used in calculating 1999 aid
under section 477A.013 is greater than $195 per capita; and

(4) the 1999 local government aid of the city under section
477A.013 is less than 38 percent of the amount that the formula
aid of the city would have been if the need increase percentage
was 100 percent.

deleted text begin (j) deleted text end new text begin (i) new text end The city aid base for a city is increased by
$32,000 in 2001 and thereafter, and the maximum amount of total
aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $32,000 in calendar year
2001 only, provided that:

(1) the city has a population in 1998 that is greater than
200 but less than 500;

(2) the city's revenue need used in calculating aids
payable in 2000 was greater than $200 per capita;

(3) the city net tax capacity for the city used in
calculating aids available in 2000 was equal to or less than
$200 per capita;

(4) the city aid base of the city used in calculating aid
under section 477A.013 is less than $65 per capita; and

(5) the city's formula aid for aids payable in 2000 was
greater than zero.

deleted text begin (k) deleted text end new text begin (j) new text end The city aid base for a city is increased by $7,200
in 2001 and thereafter, and the maximum amount of total aid it
may receive under section 477A.013, subdivision 9, paragraph
(c), is also increased by $7,200 in calendar year 2001 only,
provided that:

(1) the city had a population in 1998 that is greater than
200 but less than 500;

(2) the city's commercial industrial percentage used in
calculating aids payable in 2000 was less than ten percent;

(3) more than 25 percent of the city's population was 60
years old or older according to the 1990 census;

(4) the city aid base of the city used in calculating aid
under section 477A.013 is less than $15 per capita; and

(5) the city's formula aid for aids payable in 2000 was
greater than zero.

deleted text begin (l) deleted text end new text begin (k) new text end The city aid base for a city is increased by
$45,000 in 2001 and thereafter and by an additional $50,000 in
calendar years 2002 to 2011, and the maximum amount of total aid
it may receive under section 477A.013, subdivision 9, paragraph
(c), is also increased by $45,000 in calendar year 2001 only,
and by $50,000 in calendar year 2002 only, provided that:

(1) the net tax capacity of the city used in calculating
its 2000 aid under section 477A.013 is less than $810 per
capita;

(2) the population of the city declined more than two
percent between 1988 and 1998;

(3) the net levy of the city used in calculating 2000 aid
under section 477A.013 is greater than $240 per capita; and

(4) the city received less than $36 per capita in aid under
section 477A.013, subdivision 9, for aids payable in 2000.

deleted text begin (m) deleted text end new text begin (l) Beginning with aids payable in 2002, new text end the city aid
base for a city with a population of 10,000 or more which is
located outside of the seven-county metropolitan area is
increased deleted text begin in 2002 and thereafter deleted text end , and the maximum amount of
total aid it may receive under section 477A.013, subdivision 9,
paragraph (b) or (c), is also increased in deleted text begin calendar year 2002
only deleted text end new text begin the first year in which it receives aid under this
paragraph new text end , by an amount equal to the lesser of:

(1)(i) the total population of the city, deleted text begin as determined by
the United States Bureau of the Census, in the 2000 census, deleted text end (ii)
minus 5,000, (iii) times 60; or

(2) $2,500,000.

deleted text begin (n) deleted text end new text begin (m) new text end The city aid base is increased by $50,000 in 2002
and thereafter, and the maximum amount of total aid it may
receive under section 477A.013, subdivision 9, paragraph (c), is
also increased by $50,000 in calendar year 2002 only, provided
that:

(1) the city is located in the seven-county metropolitan
area;

(2) its population in 2000 is between 10,000 and 20,000;
and

(3) its commercial industrial percentage, as calculated for
city aid payable in 2001, was greater than 25 percent.

deleted text begin (o) deleted text end new text begin (n) new text end The city aid base for a city is increased by
$150,000 in calendar years 2002 to 2011 and the maximum amount
of total aid it may receive under section 477A.013, subdivision
9, paragraph (c), is also increased by $150,000 in calendar year
2002 only, provided that:

(1) the city had a population of at least 3,000 but no more
than 4,000 in 1999;

(2) its home county is located within the seven-county
metropolitan area;

(3) its pre-1940 housing percentage is less than 15
percent; and

(4) its city net tax capacity per capita for taxes payable
in 2000 is less than $900 per capita.

deleted text begin (p) deleted text end new text begin (o) new text end The city aid base for a city is increased by
$200,000 beginning in calendar year 2003 and the maximum amount
of total aid it may receive under section 477A.013, subdivision
9, paragraph (c), is also increased by $200,000 in calendar year
2003 only, provided that the city qualified for an increase in
homestead and agricultural credit aid under Laws 1995, chapter
264, article 8, section 18.

deleted text begin (q) deleted text end new text begin (p) new text end The city aid base for a city is increased by
$200,000 in 2004 only and the maximum amount of total aid it may
receive under section 477A.013, subdivision 9, is also increased
by $200,000 in calendar year 2004 only, if the city is the site
of a nuclear dry cask storage facility.

deleted text begin (r) deleted text end new text begin (q) new text end The city aid base for a city is increased by
$10,000 in 2004 and thereafter and the maximum total aid it may
receive under section 477A.013, subdivision 9, is also increased
by $10,000 in calendar year 2004 only, if the city was included
in a federal major disaster designation issued on April 1, 1998,
and its pre-1940 housing stock was decreased by more than 40
percent between 1990 and 2000.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids
payable in 2006 and thereafter, except that the stricken
language in paragraph (f) is effective beginning with aids
payable in 2004.
new text end

Sec. 13.

Minnesota Statutes 2004, section 477A.013,
subdivision 8, is amended to read:

Subd. 8.

City formula aid.

In calendar year 2004 and
subsequent years, the formula aid for a city is equal to the
need increase percentage multiplied by the difference between
(1) the city's revenue need multiplied by its population, and
(2) deleted text begin the sum of deleted text end the city's net tax capacity multiplied by the tax
effort rate deleted text begin , and the taconite aids under sections 298.28 and
298.282, multiplied by the following percentages:
deleted text end

deleted text begin (i) zero percent for aids payable in 2004;
deleted text end

deleted text begin (ii) 25 percent for aids payable in 2005;
deleted text end

deleted text begin (iii) 50 percent for aids payable in 2006;
deleted text end

deleted text begin (iv) 75 percent for aids payable in 2007; and
deleted text end

deleted text begin (v) 100 percent for aids payable in 2008 and thereafter deleted text end .

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

The applicable need increase 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 after the subtraction under section 477A.014,
subdivisions 4 and 5.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids
payable in 2006 and thereafter.
new text end

Sec. 14.

Minnesota Statutes 2004, section 477A.013,
subdivision 9, is amended to read:

Subd. 9.

City aid distribution.

(a) In calendar year
2002 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) deleted text begin The aid for a city in calendar year 2004 shall not
exceed the amount of its aid in calendar year 2003 after the
reductions under Laws 2003, First Special Session chapter 21,
article 5.
deleted text end

deleted text begin (c) For aids payable in 2005 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
2005 and thereafter, the total aid for any city with a
population of 2,500 or more may not decrease from its total aid
under this section in the previous year by an amount greater
than ten percent of its net levy in the year prior to the aid
distribution.
deleted text end

deleted text begin (d) For aids payable in 2004 only, the total aid for a city
with a population less than 2,500 may not be less than the
amount it was certified to receive in 2003 minus the greater of
(1) the reduction to this aid payment in 2003 under Laws 2003,
First Special Session chapter 21, article 5, or (2) five percent
of its 2003 aid amount. deleted text end For aids payable in deleted text begin 2005 deleted text end new text begin 2006 new text end and
thereafter, the total aid for a city deleted text begin with a population less than
2,500 deleted text end must not be less than the amount it was certified to
receive in the previous year minus five percent of its 2003
certified aid amount.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids
payable in 2006 and thereafter.
new text end

Sec. 15.

Minnesota Statutes 2004, section 477A.03,
subdivision 2a, is amended to read:

Subd. 2a.

Cities.

deleted text begin For aids payable in 2004, the total
aids paid under section 477A.013, subdivision 9, are limited to
$429,000,000. deleted text end For aids payable in deleted text begin 2005 and thereafter deleted text end new text begin 2006 new text end , the
total aids paid under section 477A.013, subdivision 9,
are deleted text begin increased to $437,052,000 deleted text end new text begin limited to $497,052,000. For aids
payable in 2007 and thereafter, the total aids payable under
section 477A.013, subdivision 9, are limited to the amount
certified to be paid in the previous year, multiplied by the
lesser of (1) one plus the percentage increase in the implicit
price deflator for consumption expenditures and gross investment
for state and local governments prepared by the Bureau of
Economic Analysis of the United States Department of Commerce
for the 12-month period ending March 31 of the previous year, or
(2) 1.05 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids
payable in 2006 and thereafter.
new text end