SF 1290

as introduced - 87th Legislature (2011 - 2012) Posted on 02/23/2012 09:46am

A bill for an act
relating to local government aids; providing alternative sales tax sharing to
certain cities in lieu of local government aid; amending Minnesota Statutes
2010, sections 477A.013, subdivision 9; 477A.03, subdivision 2a, by adding a
subdivision; proposing coding for new law in Minnesota Statutes, chapter 477A.

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

Section 1.

Minnesota Statutes 2010, 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 2011 only, the total aid in the previous year for any city shall
mean the amount of aid it was certified to receive for aids payable in 2010 under this
section minus the amount of its aid reduction under section 477A.0134. For aids payable
in 2012 and thereafter, the total aid in the previous year for any city means the amount of
aid it was certified to receive under this section in the previous payable year.

(c) For aids payable in 2010 and thereafter, the total aid for any city shall not exceed
the sum of (1) ten percent of the city's net levy for the year prior to the aid distribution
plus (2) its total aid in the previous year. For aids payable in 2009 and thereafter, the total
aid for any city with a population of 2,500 or more may not be less than its total aid under
this section in the previous year minus the lesser of $10 multiplied by its population, or ten
percent of its net levy in the year prior to the aid distribution.

(d) 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 (g) Notwithstanding paragraphs (a) to (f), the amount of aid paid to any city
participating in sales tax revenue sharing under section 477A.0135 is zero.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2012 and thereafter.
new text end

Sec. 2.

new text begin [477A.0135] ALTERNATIVE SALES TAX REVENUE SHARING IN
LIEU OF AIDS.
new text end

new text begin Subdivision 1. new text end

new text begin Qualifying cities. new text end

new text begin A city with a population of 10,000 or more that is
located outside the metropolitan area may choose to forego aid under section 477A.013,
subdivision 9, and instead receive a portion of state sales tax revenues. In order to qualify,
the city must file notice with the commissioner of revenue by July 1 of the year prior to
the year in which the aid payment would be first foregone.
new text end

new text begin Subd. 2. new text end

new text begin Sales tax revenue sharing. new text end

new text begin A city participating in revenue sharing under
this section shall receive payments of state sales tax revenue equal to the amount raised
by a rate of 1.5 percent imposed on transactions that are sourced to the city and subject
to sales and use taxes under chapter 297A. The proceeds of the tax, less a proportionate
share of the state refunds, shall be paid quarterly to the city with the first payment made
April 1 of the year in which an aid payment is first foregone.
new text end

new text begin Subd. 3. new text end

new text begin Duration of revenue sharing; resumption of aid payments. new text end

new text begin A city may
not terminate the election to participate in sales tax revenue sharing and again receive aid
under section 477A.013, subdivision 9, until it has participated in revenue sharing for at
least five years. If a city chooses to terminate its participation under this section and
resume receiving aid payments, it must notify the commissioner of revenue by July 1 of
the year prior to the year in which the aid payment would again be paid.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2012 and thereafter.
new text end

Sec. 3.

Minnesota Statutes 2010, section 477A.03, subdivision 2a, is amended to read:

Subd. 2a.

Cities.

For aids payable in 2011 and thereafter, the total aid paid under
section 477A.013, subdivision 9, is $527,100,646 new text begin less the reductions required under
subdivision 6 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2012 and thereafter.
new text end

Sec. 4.

Minnesota Statutes 2010, section 477A.03, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Adjustment for alternative sales tax revenue sharing. new text end

new text begin For each city that
chooses to participate in sales tax revenue sharing under section 477A.0135, the total aid
paid under subdivision 2a is reduced by the amount of aid that city was certified to get
under section 477A.013, subdivision 9, in the year prior to the calendar year in which sales
tax revenue sharing with that city begins. This reduction is made for aids payable in every
year in which the city receives sales tax revenue sharing.
new text end