HF 2077

1st Engrossment - 86th Legislature (2009 - 2010) Posted on 03/17/2010 12:47pm

A bill for an act
relating to the state budget; local government aid; credits; modifying calculation
of state aids and credits; amending Minnesota Statutes 2008, sections 273.1384,
by adding a subdivision; 477A.013, subdivision 9; 477A.03, subdivisions 2a, 2b;
Minnesota Statutes 2009 Supplement, section 275.70, subdivision 5; proposing
coding for new law in Minnesota Statutes, chapter 477A; repealing Minnesota
Statutes 2008, section 477A.03, subdivision 5.

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

Section 1.

Minnesota Statutes 2008, section 273.1384, is amended by adding a
subdivision to read:

new text begin Subd. 6. new text end

new text begin Credit reduction. new text end

new text begin In 2011 and each year thereafter, the market value
credit reimbursement amount for each taxing jurisdiction determined under this section
is reduced by the dollar amount of the reduction in market value credit reimbursements
for that taxing jurisdiction in 2010 due to unallotment reductions announced prior to
February 28, 2010, under section 16A.152. No taxing jurisdiction's market value credit
reimbursements are reduced to less than zero under this subdivision. The commissioner of
revenue shall pay the annual market value credit reimbursement amounts, after reduction
under this subdivision, to the affected taxing jurisdictions as provided in this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2011 and
thereafter.
new text end

Sec. 2.

Minnesota Statutes 2009 Supplement, section 275.70, subdivision 5, is
amended to read:

Subd. 5.

Special levies.

"Special levies" means those portions of ad valorem taxes
levied by a local governmental unit for the following purposes or in the following manner:

(1) to pay the costs of the principal and interest on bonded indebtedness or to
reimburse for the amount of liquor store revenues used to pay the principal and interest
due on municipal liquor store bonds in the year preceding the year for which the levy
limit is calculated;

(2) to pay the costs of principal and interest on certificates of indebtedness issued for
any corporate purpose except for the following:

(i) tax anticipation or aid anticipation certificates of indebtedness;

(ii) certificates of indebtedness issued under sections 298.28 and 298.282;

(iii) certificates of indebtedness used to fund current expenses or to pay the costs of
extraordinary expenditures that result from a public emergency; or

(iv) certificates of indebtedness used to fund an insufficiency in tax receipts or
an insufficiency in other revenue sources;

(3) to provide for the bonded indebtedness portion of payments made to another
political subdivision of the state of Minnesota;

(4) to fund payments made to the Minnesota State Armory Building Commission
under section 193.145, subdivision 2, to retire the principal and interest on armory
construction bonds;

(5) property taxes approved by voters which are levied against the referendum
market value as provided under section 275.61;

(6) to fund matching requirements needed to qualify for federal or state grants or
programs to the extent that either (i) the matching requirement exceeds the matching
requirement in calendar year 2001, or (ii) it is a new matching requirement that did not
exist prior to 2002;

(7) to pay the expenses reasonably and necessarily incurred in preparing for or
repairing the effects of natural disaster including the occurrence or threat of widespread
or severe damage, injury, or loss of life or property resulting from natural causes, in
accordance with standards formulated by the Emergency Services Division of the state
Department of Public Safety, as allowed by the commissioner of revenue under section
275.74, subdivision 2;

(8) pay amounts required to correct an error in the levy certified to the county
auditor by a city or county in a levy year, but only to the extent that when added to the
preceding year's levy it is not in excess of an applicable statutory, special law or charter
limitation, or the limitation imposed on the governmental subdivision by sections 275.70
to 275.74 in the preceding levy year;

(9) to pay an abatement under section 469.1815;

(10) to pay any costs attributable to increases in the employer contribution rates
under chapter 353, or locally administered pension plans, that are effective after June
30, 2001;

(11) to pay the operating or maintenance costs of a county jail as authorized in
section 641.01 or 641.262, or of a correctional facility as defined in section 241.021,
subdivision 1, paragraph (f), to the extent that the county can demonstrate to the
commissioner of revenue that the amount has been included in the county budget as
a direct result of a rule, minimum requirement, minimum standard, or directive of the
Department of Corrections, or to pay the operating or maintenance costs of a regional jail
as authorized in section 641.262. For purposes of this clause, a district court order is
not a rule, minimum requirement, minimum standard, or directive of the Department of
Corrections. If the county utilizes this special levy, except to pay operating or maintenance
costs of a new regional jail facility under sections 641.262 to 641.264 which will not
replace an existing jail facility, any amount levied by the county in the previous levy year
for the purposes specified under this clause and included in the county's previous year's
levy limitation computed under section 275.71, shall be deducted from the levy limit
base under section 275.71, subdivision 2, when determining the county's current year
levy limitation. The county shall provide the necessary information to the commissioner
of revenue for making this determination;

(12) to pay for operation of a lake improvement district, as authorized under section
103B.555. If the county utilizes this special levy, any amount levied by the county in the
previous levy year for the purposes specified under this clause and included in the county's
previous year's levy limitation computed under section 275.71 shall be deducted from
the levy limit base under section 275.71, subdivision 2, when determining the county's
current year levy limitation. The county shall provide the necessary information to the
commissioner of revenue for making this determination;

(13) to repay a state or federal loan used to fund the direct or indirect required
spending by the local government due to a state or federal transportation project or other
state or federal capital project. This authority may only be used if the project is not a
local government initiative;

(14) to pay for court administration costs as required under section 273.1398,
subdivision 4b, less the (i) county's share of transferred fines and fees collected by the
district courts in the county for calendar year 2001 and (ii) the aid amount certified to be
paid to the county in 2004 under section 273.1398, subdivision 4c; however, for taxes
levied to pay for these costs in the year in which the court financing is transferred to the
state, the amount under this clause is limited to the amount of aid the county is certified to
receive under section 273.1398, subdivision 4a;

(15) to fund a police or firefighters relief association as required under section 69.77
to the extent that the required amount exceeds the amount levied for this purpose in 2001;

(16) for purposes of a storm sewer improvement district under section 444.20;

(17) to pay for the maintenance and support of a city or county society for the
prevention of cruelty to animals under section 343.11, but not to exceed in any year
$4,800 or the sum of $1 per capita based on the county's or city's population as of the most
recent federal census, whichever is greater. If the city or county uses this special levy, any
amount levied by the city or county in the previous levy year for the purposes specified
in this clause and included in the city's or county's previous year's levy limit computed
under section 275.71, must be deducted from the levy limit base under section 275.71,
subdivision 2, in determining the city's or county's current year levy limit;

(18) for counties, to pay for the increase in their share of health and human service
costs caused by reductions in federal health and human services grants effective after
September 30, 2007;

(19) for a city, for the costs reasonably and necessarily incurred for securing,
maintaining, or demolishing foreclosed or abandoned residential properties, as allowed by
the commissioner of revenue under section 275.74, subdivision 2. A city must have either
(i) a foreclosure rate of at least 1.4 percent in 2007, or (ii) a foreclosure rate in 2007 in
the city or in a zip code area of the city that is at least 50 percent higher than the average
foreclosure rate in the metropolitan area, as defined in section 473.121, subdivision 2,
to use this special levy. For purposes of this paragraph, "foreclosure rate" means the
number of foreclosures, as indicated by sheriff sales records, divided by the number of
households in the city in 2007;

(20) for a city, for the unreimbursed costs of redeployed traffic-control agents and
lost traffic citation revenue due to the collapse of the Interstate 35W bridge, as certified
to the Federal Highway Administration;

(21) to pay costs attributable to wages and benefits for sheriff, police, and fire
personnel. If a local governmental unit did not use this special levy in the previous year its
levy limit base under section 275.71 shall be reduced by the amount equal to the amount it
levied for the purposes specified in this clause in the previous year;

(22) an amount equal to any reductions in the certified aids or credits payable
under sections 477A.011 to 477A.014, and section 273.1384, due to unallotment under
section 16A.152 new text begin or reductions under another provision of law new text end . The amount of the levy
allowed under this clause is equal to the amount unallotted new text begin or reduced new text end in the calendar year
in which the tax is levied unless the unallotment new text begin or reduction new text end amount is not known by
September 1 of the levy year, and the local government has not adjusted its levy under
section 275.065, subdivision 6, or 275.07, subdivision 6, in which case the unallotment
new text begin or reduction new text end amount may be levied in the following year;

(23) to pay for the difference between one-half of the costs of confining sex offenders
undergoing the civil commitment process and any state payments for this purpose pursuant
to section 253B.185, subdivision 5;

(24) for a county to pay the costs of the first year of maintaining and operating a new
facility or new expansion, either of which contains courts, corrections, dispatch, criminal
investigation labs, or other public safety facilities and for which all or a portion of the
funding for the site acquisition, building design, site preparation, construction, and related
equipment was issued or authorized prior to the imposition of levy limits in 2008. The
levy limit base shall then be increased by an amount equal to the new facility's first full
year's operating costs as described in this clause; and

(25) for the estimated amount of reduction to deleted text begin credits deleted text end new text begin market value credit
reimbursements new text end under section 273.1384 for credits payable in the year in which the levy is
payable.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2011 and
thereafter.
new text end

Sec. 3.

Minnesota Statutes 2008, section 477A.013, subdivision 9, is amended to read:

Subd. 9.

City aid distribution.

(a) In calendar year 2009 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) For aids payable in deleted text begin 2009 deleted text end new text begin 2010 new text end only, the total aid for any city shall deleted text begin not exceed the
sum of (1) 35 percent of the city's net levy for the year prior to the aid distribution, plus (2)
its total aid in the previous year deleted text end new text begin mean the amount of aid it was certified to receive for aids
payable in 2010 under this section minus the amount of its aid reduction under section
477A.0133. For aids payable in 2011 and thereafter, the total aid for any city means the
amount of aid it was certified to receive under this section in the previous payable year new text end .

(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) For aids payable in 2010 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.

(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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2011 and thereafter.
new text end

Sec. 4.

new text begin [477A.0133] ADDITIONAL 2010 AID AND CREDIT REDUCTIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

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

new text begin (b) The "2010 revenue base" for a county is the sum of the county's certified property
tax levy for taxes payable in 2010, plus the amount of county program aid under section
477A.0124 that the county was certified to receive in 2010, plus the amount of taconite
aids under sections 298.28 and 298.282 that the county was certified to receive in 2010
including any amounts required to be placed in a special fund for distribution in a later year.
new text end

new text begin (c) The "2010 revenue base" for a statutory or home rule charter city is the sum of
the city's certified property tax levy for taxes payable in 2010, plus the amount of local
government aid under section 477A.013, subdivision 9, that the city was certified to
receive in 2010, plus the amount of taconite aids under sections 298.28 and 298.282 that
the city was certified to receive in 2010 including any amounts required to be placed in a
special fund for distribution in a later year.
new text end

new text begin Subd. 2. new text end

new text begin 2010 reductions; counties, and cities. new text end

new text begin The commissioner of revenue
must compute additional 2010 aid and credit reimbursement reduction amounts for each
county and city under this section, after implementing any reduction of county program
aid under section 477A.0124, local government aid under section 477A.013, or market
value credit reimbursements under section 273.1384, to reflect the reduction of allotments
under section 16A.152.
new text end

new text begin The additional reduction amounts under this section are limited to the sum of the
amount of county program aid under section 477A.0124, local government aid under
section 477A.013, and market value credit reimbursements under section 273.1384
payable to the county or city in 2010 before the reductions in this section, but after the
reductions for unallotments.
new text end

new text begin The reduction amount under this section is applied first to reduce the amount
payable to the county or city in 2010 as market value credit reimbursements under section
273.1384, and then if necessary, to reduce the amount payable as either county program
aid under section 477A.0124 in the case of a county, or local government aid under section
477A.013 in the case of a city.
new text end

new text begin No aid or reimbursement amount is reduced to less than zero under this section.
new text end

new text begin The additional 2010 aid reduction amount for a county is equal to 1.82767 percent
of the county's 2010 revenue base. The additional 2010 aid reduction amount for a city
is equal to the lesser of (1) 3.4287 percent of the city's 2010 revenue base or (2) $28
multiplied by the city's 2008 population.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2008, section 477A.03, subdivision 2a, is amended to read:

Subd. 2a.

Cities.

For aids payable in deleted text begin 2009 deleted text end new text begin 2011 new text end and thereafter, the total aid
paid under section 477A.013, subdivision 9, is deleted text begin $526,148,487, subject to adjustment in
subdivision 5 deleted text end new text begin $520,725,315 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in 2011 and
thereafter.
new text end

Sec. 6.

Minnesota Statutes 2008, section 477A.03, subdivision 2b, is amended to read:

Subd. 2b.

Counties.

(a) For aids payable in deleted text begin 2009 deleted text end new text begin 2011 new text end and thereafter, the total aid
payable under section 477A.0124, subdivision 3, is deleted text begin $111,500,000 minus one-half of the
total aid amount determined under section 477A.0124, subdivision 5, paragraph (b),
subject to adjustment in subdivision 5 deleted text end new text begin $99,572,700 new text end . 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.

(b) For aids payable in deleted text begin 2009 deleted text end new text begin 2011 new text end and thereafter, the total aid under section
477A.0124, subdivision 4, is deleted text begin $116,132,923 minus one-half of the total aid amount
determined under section 477A.0124, subdivision 5, paragraph (b), subject to adjustment
in subdivision 5 deleted text end new text begin $104,487,304 new text end . 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 EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in 2011 and
thereafter.
new text end

Sec. 7. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2008, section 477A.03, subdivision 5, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in 2011 and
thereafter.
new text end