HF 2887

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

  1.1                          A bill for an act 
  1.2             relating to property taxes and aids; modifying the 
  1.3             city local government aid program; making certain cuts 
  1.4             to the market value homestead credit permanent; 
  1.5             reinstating a metropolitan transit levy and 
  1.6             establishing a metropolitan transit aid program; 
  1.7             appropriating money; amending Minnesota Statutes 2002, 
  1.8             sections 16A.88, subdivision 2; 297B.09, by adding a 
  1.9             subdivision; 473.388, subdivision 4; 473.446, 
  1.10            subdivision 1; Minnesota Statutes 2003 Supplement, 
  1.11            sections 174.24, subdivision 3b; 273.1384, subdivision 
  1.12            4; 477A.013, subdivision 9; 477A.03, subdivision 2a; 
  1.13            proposing coding for new law in Minnesota Statutes, 
  1.14            chapters 473; 477A. 
  1.15  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.16     Section 1.  Minnesota Statutes 2002, section 16A.88, 
  1.17  subdivision 2, is amended to read: 
  1.18     Subd. 2.  [METROPOLITAN AREA TRANSIT FUND.] The 
  1.19  metropolitan area transit fund is established within the state 
  1.20  treasury.  All money in the fund is annually appropriated to the 
  1.21  Metropolitan Council for dedicated to the funding of 
  1.22  metropolitan transit systems within the metropolitan area under 
  1.23  sections 473.384, 473.387, 473.388, and 473.405 to 473.449 aid 
  1.24  under section 473.4462. 
  1.25     [EFFECTIVE DATE.] This section is effective July 1, 2005. 
  1.26     Sec. 2.  Minnesota Statutes 2003 Supplement, section 
  1.27  174.24, subdivision 3b, is amended to read: 
  1.28     Subd. 3b.  [OPERATING ASSISTANCE; RECIPIENT 
  1.29  CLASSIFICATIONS.] (a) The commissioner shall determine the total 
  1.30  operating cost of any public transit system receiving or 
  2.1   applying for assistance in accordance with generally accepted 
  2.2   accounting principles.  To be eligible for financial assistance, 
  2.3   an applicant or recipient shall provide to the commissioner all 
  2.4   financial records and other information and shall permit any 
  2.5   inspection reasonably necessary to determine total operating 
  2.6   cost and correspondingly the amount of assistance that may be 
  2.7   paid to the applicant or recipient.  Where more than one county 
  2.8   or municipality contributes assistance to the operation of a 
  2.9   public transit system, the commissioner shall identify one as 
  2.10  lead agency for the purpose of receiving money under this 
  2.11  section.  
  2.12     (b) Prior to distributing operating assistance to eligible 
  2.13  recipients for any contract period, the commissioner shall place 
  2.14  all recipients into one of the following classifications:  
  2.15  urbanized area service, small urban area service, rural area 
  2.16  service, and elderly and handicapped service.  The commissioner 
  2.17  shall distribute funds under this section so that the percentage 
  2.18  of total operating cost paid by any recipient from local sources 
  2.19  will not exceed the percentage for that recipient's 
  2.20  classification, except as provided in an undue hardship case.  
  2.21  The percentages must be:  for urbanized area service and small 
  2.22  urban area service, 20 percent; for rural area service, 15 
  2.23  percent; and for elderly and handicapped service, 15 percent. 
  2.24  The remainder of the total operating cost will be paid from 
  2.25  state funds less any assistance received by the recipient from 
  2.26  any federal source, except as provided in paragraph (d).  For 
  2.27  purposes of this subdivision, "local sources" means all local 
  2.28  sources of funds and includes all operating revenue, tax levies, 
  2.29  and contributions from public funds, except that the 
  2.30  commissioner may exclude from the total assistance contract 
  2.31  revenues derived from operations the cost of which is excluded 
  2.32  from the computation of total operating cost.  Total operating 
  2.33  costs of the Duluth Transit Authority or a successor agency does 
  2.34  not include costs related to the Superior, Wisconsin service 
  2.35  contract and the Independent School District No. 709 service 
  2.36  contract.  For calendar years 2004 and 2005, to enable public 
  3.1   transit systems to meet the provisions of this section, the 
  3.2   commissioner may adjust payments of financial assistance to 
  3.3   recipients that were under a contract with the department on 
  3.4   January 1, 2003.  Payments to such a recipient in calendar years 
  3.5   2004 and 2005 from the greater Minnesota transit fund may not be 
  3.6   less than the payment to the recipient from that fund in 
  3.7   calendar year 2003, except for reductions made necessary by 
  3.8   reductions in base funding for those years. 
  3.9      (c) If a recipient informs the commissioner in writing 
  3.10  after the establishment of these percentages but prior to the 
  3.11  distribution of financial assistance for any year that paying 
  3.12  its designated percentage of total operating cost from local 
  3.13  sources will cause undue hardship, the commissioner may reduce 
  3.14  the percentage to be paid from local sources by the recipient 
  3.15  and increase the percentage to be paid from local sources by one 
  3.16  or more other recipients inside or outside the classification.  
  3.17  However, the commissioner may not reduce or increase any 
  3.18  recipient's percentage under this paragraph for more than two 
  3.19  years successively.  If for any year the funds appropriated to 
  3.20  the commissioner to carry out the purposes of this section are 
  3.21  insufficient to allow the commissioner to pay the state share of 
  3.22  total operating cost as provided in this paragraph, the 
  3.23  commissioner shall reduce the state share in each classification 
  3.24  to the extent necessary. 
  3.25     (d) Each year, the operating assistance under this 
  3.26  subdivision for any city will be reduced by the amount of 
  3.27  supplemental aid reduction determined under section 477A.133.  
  3.28  The base amount of the appropriation for this program shall be 
  3.29  permanently reduced by the amount of total reductions under this 
  3.30  paragraph, beginning with the biennium beginning in fiscal year 
  3.31  2006. 
  3.32     [EFFECTIVE DATE.] This section is effective for fiscal year 
  3.33  2006 and thereafter. 
  3.34     Sec. 3.  Minnesota Statutes 2003 Supplement, section 
  3.35  273.1384, subdivision 4, is amended to read: 
  3.36     Subd. 4.  [PAYMENT.] (a) The commissioner of revenue shall 
  4.1   reimburse each local taxing jurisdiction, other than school 
  4.2   districts, for the tax reductions granted under this section in 
  4.3   two equal installments on October 31 and December 26 of the 
  4.4   taxes payable year for which the reductions are granted, 
  4.5   including in each payment the prior year adjustments certified 
  4.6   on the abstracts for that taxes payable year.  The 
  4.7   reimbursements related to tax increments shall be issued in one 
  4.8   installment each year on December 26. 
  4.9      (b) The commissioner of revenue shall certify the total of 
  4.10  the tax reductions granted under this section for each taxes 
  4.11  payable year within each school district to the commissioner of 
  4.12  the Department of Education and the commissioner of education 
  4.13  shall pay the reimbursement amounts to each school district as 
  4.14  provided in section 273.1392. 
  4.15     (c) For cities only, the amount of reimbursement to a city 
  4.16  under paragraph (a) shall be reduced each year by an amount 
  4.17  equal to the amount that its payment under this section was 
  4.18  reduced in calendar year 2003 under Laws 2003, First Special 
  4.19  Session chapter 21, article 5, section 12, if: 
  4.20     (1) the city has a population in calendar year 2002 of 
  4.21  1,500 or more; 
  4.22     (2) it receives no aid under section 477A.03 in calendar 
  4.23  year 2003; and 
  4.24     (3) the city's aid reduction under Laws 2003, First Special 
  4.25  Session chapter 21, article 5, section 12, was less than four 
  4.26  percent of its city net tax capacity for taxes payable in 2003.  
  4.27  No city's reimbursement may be less than zero. 
  4.28     [EFFECTIVE DATE.] This section is effective for credits 
  4.29  payable in 2005 and thereafter. 
  4.30     Sec. 4.  Minnesota Statutes 2002, section 297B.09, is 
  4.31  amended by adding a subdivision to read: 
  4.32     Subd. 4.  [TRANSFER TO GENERAL FUND.] Each year, the sum of 
  4.33  the amounts determined under section 473.4462, subdivision 1, 
  4.34  clause (ii), is transferred from the metropolitan area transit 
  4.35  fund to the general fund.  Each year, the sum of the amounts 
  4.36  determined under section 174.24, subdivision 3b, paragraph (d), 
  5.1   is transferred from the greater Minnesota transit fund to the 
  5.2   general fund. 
  5.3      [EFFECTIVE DATE.] This section is effective for fiscal year 
  5.4   2006 and thereafter. 
  5.5      Sec. 5.  Minnesota Statutes 2002, section 473.388, 
  5.6   subdivision 4, is amended to read: 
  5.7      Subd. 4.  [FINANCIAL ASSISTANCE.] (a) The council must 
  5.8   grant the requested financial assistance if it determines that 
  5.9   the proposed service is intended to replace the service to the 
  5.10  applying city or town or combination thereof by the council and 
  5.11  that the proposed service will meet the needs of the applicant 
  5.12  at least as efficiently and effectively as the existing service. 
  5.13     (b) The amount of assistance which the council must provide 
  5.14  to a system under this section may not be less than the sum of 
  5.15  the amounts determined for each municipality comprising the 
  5.16  system as follows:  
  5.17     (1) the transit operating assistance grants received under 
  5.18  this subdivision by the municipality in calendar year 2001 or 
  5.19  the tax revenues for transit services levied by the municipality 
  5.20  for taxes payable in 2001, including that portion of the levy 
  5.21  derived from the areawide pool under section 473F.08, 
  5.22  subdivision 3, clause (a), plus the portion of the 
  5.23  municipality's aid under section 273.1398, subdivision 2, 
  5.24  attributable to the transit levy; times 
  5.25     (2) the ratio of (i) the appropriation from the transit 
  5.26  fund to the council council's levy for nondebt transit 
  5.27  operations for the current fiscal year to (ii) the total levy 
  5.28  certified by the council under section 473.446 and the opt-out 
  5.29  municipalities under this section for taxes payable in 2001, 
  5.30  including the portion of homestead and agricultural credit aid 
  5.31  under section 273.1398, subdivision 2, attributable to nondebt 
  5.32  transit levies, times 
  5.33     (3) the ratio of (i) the municipality's total taxable 
  5.34  market value for taxes payable in the most recent year for which 
  5.35  data is available divided by the municipality's total taxable 
  5.36  market value for taxes payable in 2001, to (ii) the total 
  6.1   taxable market value of all property in the metropolitan area 
  6.2   for taxes payable in the most recent year for which data is 
  6.3   available divided by the total taxable market value of all 
  6.4   property in the metropolitan area for taxes payable in 2001.  
  6.5      (c) The council shall pay the amount to be provided to the 
  6.6   recipient from the funds the council would otherwise use to fund 
  6.7   its transit operations.  
  6.8      [EFFECTIVE DATE.] This section is effective for assistance 
  6.9   in fiscal year 2006 and thereafter. 
  6.10     Sec. 6.  Minnesota Statutes 2002, section 473.446, 
  6.11  subdivision 1, is amended to read: 
  6.12     Subdivision 1.  [METROPOLITAN AREA TRANSIT TAX.] (a) For 
  6.13  the purposes of sections 473.405 to 473.449 and the metropolitan 
  6.14  transit system, except as otherwise provided in this 
  6.15  subdivision, the council shall levy each year upon all taxable 
  6.16  property within the metropolitan area, defined in section 
  6.17  473.121, subdivision 2, a transit tax consisting of: 
  6.18     (1) an amount necessary to provide full and timely payment 
  6.19  of certificates of indebtedness, bonds, including refunding 
  6.20  bonds or other obligations issued or to be issued under section 
  6.21  473.39 by the council for purposes of acquisition and betterment 
  6.22  of property and other improvements of a capital nature and to 
  6.23  which the council has specifically pledged tax levies under this 
  6.24  clause; and 
  6.25     (2) an amount necessary to pay the expenses of operating 
  6.26  transit and paratransit service, not to exceed the amount 
  6.27  dedicated to the metropolitan area transit fund under section 
  6.28  297B.09, subdivision 1.  The maximum amount of the levy under 
  6.29  this clause shall be certified by the commissioner of finance on 
  6.30  or before August 1 of each levy year based on an estimate of 
  6.31  revenues to be dedicated to the metropolitan area transit fund 
  6.32  for the fiscal year beginning in the year following the levy 
  6.33  year; and 
  6.34     (3) an additional amount necessary to provide full and 
  6.35  timely payment of certificates of indebtedness issued by the 
  6.36  council, after consultation with the commissioner of finance, if 
  7.1   revenues to the maximum allowable metropolitan area transit fund 
  7.2   levy under clause (2) in the fiscal year in which the 
  7.3   indebtedness is issued increase increases over those 
  7.4   revenues the corresponding levy in the previous fiscal year by a 
  7.5   percentage less than the percentage increase for the same period 
  7.6   in the revised Consumer Price Index for all urban consumers for 
  7.7   the St. Paul-Minneapolis metropolitan area prepared by the 
  7.8   United States Department of Labor. 
  7.9      (b) Indebtedness to which property taxes have been pledged 
  7.10  under paragraph (a), clause (2) (3), that is incurred in any 
  7.11  fiscal year may not exceed the amount necessary to make up the 
  7.12  difference between (1) the amount that the council received or 
  7.13  expects to receive in that fiscal year from the metropolitan 
  7.14  area transit fund levy and (2) the amount the council received 
  7.15  from that fund levy in the previous fiscal year multiplied by 
  7.16  the percentage increase for the same period in the revised 
  7.17  Consumer Price Index for all urban consumers for the St. 
  7.18  Paul-Minneapolis metropolitan area prepared by the United States 
  7.19  Department of Labor. 
  7.20     (c) The levy determined under paragraph (a), clause (2), 
  7.21  shall initially be distributed in such a way that the resulting 
  7.22  tax rate shall be greater by a factor of ten in the area 
  7.23  comprising the metropolitan transit taxing district than in the 
  7.24  remaining portion of the metropolitan transit taxing area.  The 
  7.25  initial nondebt transit tax rate within each municipality will 
  7.26  be reduced by the nondebt portion of the metropolitan transit 
  7.27  fiscal disparities distribution levy attributable to the area 
  7.28  comprising the municipality, divided by the municipality's 
  7.29  taxable tax capacity.  The commissioner of revenue shall make 
  7.30  the calculations necessary to determine the tax rates prescribed 
  7.31  by this paragraph by September 30 of the levy year.  
  7.32     [EFFECTIVE DATE.] This section is effective for taxes 
  7.33  payable in 2005 and thereafter. 
  7.34     Sec. 7.  [473.4462] [METROPOLITAN TRANSIT AID.] 
  7.35     Subdivision 1.  [AID AMOUNT.] Each year, the Metropolitan 
  7.36  Council is eligible to receive transit aid for each municipality 
  8.1   in the transit area equal to 
  8.2      (i) the municipality's taxable net tax capacity multiplied 
  8.3   by the tax rate for the municipality determined under section 
  8.4   473.446, subdivision 1, paragraph (a), clause (2), minus 
  8.5      (ii) the amount, if any, of the municipality's supplemental 
  8.6   aid reduction under section 477A.133.  
  8.7   The amount determined under clause (ii) may not exceed the 
  8.8   amount determined under clause (i). 
  8.9      Subd. 2.  [TAX RATE REDUCTION.] The metropolitan transit 
  8.10  tax rate will be reduced within the area comprising each 
  8.11  municipality by the amount of aid determined under subdivision 1.
  8.12  The commissioner of revenue shall make the calculations 
  8.13  necessary to determine the tax rates prescribed by this 
  8.14  subdivision by September 30 of the levy year.  
  8.15     Subd. 3.  [APPROPRIATION; AID PAYMENTS.] An amount 
  8.16  sufficient to pay the aid amounts determined under subdivision 1 
  8.17  is annually appropriated from the metropolitan transit fund to 
  8.18  the Metropolitan Council. 
  8.19     [EFFECTIVE DATE.] This section is effective for taxes 
  8.20  payable in 2005 and thereafter. 
  8.21     Sec. 8.  Minnesota Statutes 2003 Supplement, section 
  8.22  477A.013, subdivision 9, is amended to read: 
  8.23     Subd. 9.  [CITY AID DISTRIBUTION.] (a) In calendar year 
  8.24  2002 and thereafter, each city shall receive an aid distribution 
  8.25  equal to the sum of (1) the city formula aid under subdivision 
  8.26  8, and (2) its city aid base. 
  8.27     (b) The aid for a city in calendar year 2004 shall not 
  8.28  exceed the amount of its aid in calendar year 2003 after the 
  8.29  reductions under Laws 2003, First Special Session chapter 21, 
  8.30  article 5.  
  8.31     (c) For aids payable in 2005 and thereafter, the total aid 
  8.32  for any city shall not exceed the sum of (1) ten percent of the 
  8.33  city's net levy for the year prior to the aid distribution plus 
  8.34  (2) its total aid in the previous year.  For aids payable in 
  8.35  2005 and thereafter, the total aid for any city with a 
  8.36  population of 2,500 or more may not decrease from its total aid 
  9.1   under this section in the previous year by an amount greater 
  9.2   than ten percent of its net levy in the year prior to the aid 
  9.3   distribution. 
  9.4      (d) For aids payable in 2004 only, the total aid for a city 
  9.5   with a population less than 2,500 may not be less than the 
  9.6   amount it was certified to receive in 2003 minus the greater of 
  9.7   (1) the reduction to this aid payment in 2003 under Laws 2003, 
  9.8   First Special Session chapter 21, article 5, or (2) five percent 
  9.9   of its 2003 aid amount.  For aids payable in 2005 and 
  9.10  thereafter, the total aid for a city with a population less than 
  9.11  2,500 must not be less than the amount it was certified to 
  9.12  receive in the previous year minus five percent of its 2003 
  9.13  certified aid amount. 
  9.14     [EFFECTIVE DATE.] This section is effective beginning with 
  9.15  aids payable in 2005 and thereafter.  
  9.16     Sec. 9.  [477A.133] [SUPPLEMENTAL AID REDUCTIONS.] 
  9.17     A city which had a population of 1,500 or more in calendar 
  9.18  year 2002 is subject to an annual supplemental aid reduction if: 
  9.19     (1) it receives no aid under section 477A.013; and 
  9.20     (2) the total aid and credit reduction to the city under 
  9.21  Laws 2003, First Special Session chapter 21, article 5, section 
  9.22  12, was less than four percent of its city net tax capacity for 
  9.23  taxes payable in 2003.  
  9.24     The amount of the reduction is the difference between four 
  9.25  percent of its city net tax capacity for taxes payable in 2003, 
  9.26  and its aid and credit reductions under Laws 2003, First Special 
  9.27  Session chapter 21, article 5, section 12.  The reductions shall 
  9.28  be taken from the city's operating aid under section 174.24, 
  9.29  subdivision 3b, or from the transit aid for the area comprising 
  9.30  the municipality under section 473.4462. 
  9.31     [EFFECTIVE DATE.] This section is effective for aids 
  9.32  payable in 2005 and thereafter. 
  9.33     Sec. 10.  Minnesota Statutes 2003 Supplement, section 
  9.34  477A.03, subdivision 2a, is amended to read: 
  9.35     Subd. 2a.  [CITIES.] For aids payable in 2004, the total 
  9.36  aids paid under section 477A.013, subdivision 9, are limited to 
 10.1   $429,000,000.  For aids payable in 2005 and thereafter, the 
 10.2   total aids paid under section 477A.013, subdivision 9, 
 10.3   are increased to $437,052,000 limited to $482,447,310. 
 10.4      [EFFECTIVE DATE.] This section is effective for aids 
 10.5   payable in 2005 and thereafter.