Minnesota Legislature
HF 2914
as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am
Bill Text Versions
| Engrossments | ||
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| Introduction | Posted on 02/16/2006 |
Current Version - as introduced
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A bill for an act
relating to taxes; modifying the local government aid formula for cities;
amending Minnesota Statutes 2004, section 477A.013, subdivision 9; Minnesota
Statutes 2005 Supplement, sections 477A.011, subdivisions 34, 36; 477A.013,
subdivision 8; 477A.03, subdivision 2a.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2005 Supplement, 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) For a city with a population of 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.
(d) The city revenue need cannot be less than zero.
(e) For calendar year deleted text begin 2005deleted text end new text begin 2007new text end and subsequent years, the city revenue need for a
city, as determined in paragraphs (a) to (d), 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 tonew text begin :
new text end
new text begin (i) new text end the deleted text begin 2003deleted text end new text begin 2002 new text end implicit price deflator for state and local government purchasesnew text begin
for aids payable in 2007;
new text end
new text begin (ii) the 2000 implicit price deflator for state and local government purchases for aids
payable in 2008 and thereafternew text end new text begin new text end .
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective beginning with aids payable in 2007.
new text end
Sec. 2.
Minnesota Statutes 2005 Supplement, 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) 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.
(g) 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.
(h) 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.
(i) 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.
(j) 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.
(k) 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.
(l) 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 in 2002 and thereafter, and
the maximum amount of total aid it may receive under section 477A.013, subdivision
9, paragraph (b) or (c), is also increased in new text begin the new text end calendar yeardeleted text begin 2002deleted text end new text begin in which a city first
receives funds under this paragraphnew text end only, 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.
(m) 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.
(n) 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.
(o) 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.
(p) 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.
(q) 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.
(r) The city aid base for a city is increased by $25,000 in 2006 only and the
maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
by $25,000 in calendar year 2006 only if the city had a population in 2003 of at least 1,000
and has a state park for which the city provides rescue services and which comprised at
least 14 percent of the total geographic area included within the city boundaries in 2000.
(s) The city aid base for a city with a population less than 5,000 is increased in
2006 and thereafter and the minimum and maximum amount of total aid it may receive
under this section is also increased in calendar year 2006 only by an amount equal to
$6 multiplied by its population.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective beginning with aids payable in 2007.
new text end
Sec. 3.
Minnesota Statutes 2005 Supplement, 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 ofdeleted text end the
city's net tax capacity multiplied by the tax effort ratedeleted text begin ; the taconite aids under sections
298.28 and 298.282 to any city except a city directly impacted by a taconite mine or plant,
multiplied by the following percentages:deleted text end new text begin .
new 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
deleted text begin
For purposes of this subdivision, "a city directly impacted by a taconite mine or
plant" means: (1) Babbit, (2) Eveleth, (3) Hibbing, (4) Keewatin, (5) Mountain Iron, (6)
Silver Bay, or (7) Virginia.
deleted text end
deleted text begin
No city may have a formula aid amount less than zero. The need increase percentage
must be the same for all cities.
deleted text end
new text begin For aids payable in 2007, new text end 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 For aids payable in 2008, the applicable need increase
percentage is 90 percent. For aids payable in 2009 and thereafter, the applicable need
increase percentage is 100 percent.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective beginning with aids payable in 2007.
new text end
Sec. 4.
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 new text begin For aids payable in 2007, the total aid for any city shall not exceed the sum of (1)
30 percent of the city's net levy in the previous year plus (2) its total aid in the previous
year. For aids payable in 2008 and 2009, the total aid for any city shall not exceed the sum
of (1) 50 percent of the city's net levy for the year prior to the aid distribution plus (2)
its total aid in the previous year.
new text end
(c) For aids payable in deleted text begin 2005deleted text end new text begin 2010new text end 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. deleted text begin 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
(d) deleted text begin 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 2005deleted text end new text begin
2007new text end and thereafter, the total aid for a city deleted text begin with a population less than 2,500deleted 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 beginning with aids payable in 2007.
new text end
Sec. 5.
Minnesota Statutes 2005 Supplement, section 477A.03, subdivision 2a, is
amended to read:
Subd. 2a.
Cities.
For aids payable in 2004, the total aids paid under section
477A.013, subdivision 9, are limited to $429,000,000. For aids payable in 2005, the total
aids paid under section 477A.013, subdivision 9, are limited to $437,052,000. For aids
payable in 2006deleted text begin and thereafterdeleted text end , the total aids paid under section 477A.013, subdivision
9, is limited to $485,052,000.new text begin For aids payable in 2007, the total aids paid under section
477A.013, subdivision 9, are limited to $525,052,000.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective beginning with aids payable in 2007.
new text end