SF 2100

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

  1.1                          A bill for an act 
  1.2             relating to taxation; modifying the local government 
  1.3             aid formula; eliminating taconite aids from the 
  1.4             computation of city formula aid in the local 
  1.5             government aid formula; increasing the appropriation 
  1.6             for local government aid and providing the funding 
  1.7             sources for the increased appropriation; delaying 
  1.8             restoration of reductions in market value homestead 
  1.9             credit reimbursements; reducing the amount of motor 
  1.10            vehicle sales tax proceeds appropriated for transit; 
  1.11            authorizing levies for transit; amending Minnesota 
  1.12            Statutes 2002, sections 473.388, subdivision 7; 
  1.13            473.446, subdivision 1, by adding subdivisions; 
  1.14            Minnesota Statutes 2003 Supplement, sections 297B.09, 
  1.15            subdivision 1; 477A.011, subdivision 36; 477A.013, 
  1.16            subdivisions 8, 9; 477A.03, subdivision 2a. 
  1.17  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA. 
  1.18     Section 1.  Minnesota Statutes 2003 Supplement, section 
  1.19  297B.09, subdivision 1, is amended to read: 
  1.20     Subdivision 1.  [DEPOSIT OF REVENUES.] (a) Money collected 
  1.21  and received under this chapter must be deposited as provided in 
  1.22  this subdivision.  
  1.23     (b) From July 1, 2002, to June 30, 2003, 32 percent of the 
  1.24  money collected and received must be deposited in the highway 
  1.25  user tax distribution fund, 20.5 percent must be deposited in 
  1.26  the metropolitan area transit fund under section 16A.88, and 
  1.27  1.25 percent must be deposited in the greater Minnesota transit 
  1.28  fund under section 16A.88.  The remaining money must be 
  1.29  deposited in the general fund. 
  1.30     (c) From July 1, 2003, to June 30, 2007 2005, 30 percent of 
  1.31  the money collected and received must be deposited in the 
  2.1   highway user tax distribution fund, 21.5 percent must be 
  2.2   deposited in the metropolitan area transit fund under section 
  2.3   16A.88, 1.43 percent must be deposited in the greater Minnesota 
  2.4   transit fund under section 16A.88, 0.65 percent must be 
  2.5   deposited in the county state-aid highway fund, and 0.17 percent 
  2.6   must be deposited in the municipal state-aid street fund.  The 
  2.7   remaining money must be deposited in the general fund. 
  2.8      (d) From July 1, 2005, to June 30, 2007, 30 percent of the 
  2.9   money collected and received must be deposited in the highway 
  2.10  user tax distribution fund, 18.49 percent must be deposited in 
  2.11  the metropolitan area transit fund under section 16A.88, 1.23 
  2.12  percent must be deposited in the greater Minnesota transit fund 
  2.13  under section 16A.88, 0.65 percent must be deposited in the 
  2.14  county state-aid highway fund, and 0.17 percent must be 
  2.15  deposited in the municipal state-aid street fund.  The remaining 
  2.16  money must be deposited in the general fund. 
  2.17     (e) On and after July 1, 2007, 32 percent of the money 
  2.18  collected and received must be deposited in the highway user tax 
  2.19  distribution fund, 20.5 17.47 percent must be deposited in the 
  2.20  metropolitan area transit fund under section 16A.88, and 1.25 
  2.21  1.07 percent must be deposited in the greater Minnesota transit 
  2.22  fund under section 16A.88.  The remaining money must be 
  2.23  deposited in the general fund. 
  2.24     Sec. 2.  Minnesota Statutes 2002, section 473.388, 
  2.25  subdivision 7, is amended to read: 
  2.26     Subd. 7.  [LOCAL LEVY OPTION.] (a) A statutory or home rule 
  2.27  charter city or town that is eligible for assistance under this 
  2.28  section may levy a tax for payment of the operating and capital 
  2.29  expenditures for transit and other related activities and to 
  2.30  provide for payment of obligations issued by the municipality 
  2.31  for capital expenditures for transit and other related 
  2.32  activities, provided that property taxes were pledged to satisfy 
  2.33  the obligations, and provided that legislative appropriations 
  2.34  are insufficient to satisfy the obligations such purposes, 
  2.35  provided that the tax must be sufficient to maintain the level 
  2.36  of transit service provided in the municipality in the previous 
  3.1   year. 
  3.2      (b) The transit tax levied by a municipality under this 
  3.3   section for taxes payable in 2005 may not exceed the reduction 
  3.4   in the amount of the assistance received under subdivision 4 
  3.5   since fiscal year 2004, multiplied by an index for market 
  3.6   valuation changes equal to the total market valuation of all 
  3.7   taxable property located within the municipality for the current 
  3.8   taxes payable year divided by the total market valuation of all 
  3.9   taxable property located within the municipality for the 
  3.10  previous taxes payable year. 
  3.11     For taxes payable in 2006 and subsequent years, the product 
  3.12  of (i) the municipality's property tax levy limitation for the 
  3.13  previous year determined under this subdivision, multiplied by 
  3.14  (ii) an index for market valuation changes equal to the total 
  3.15  market valuation of all taxable property located within the 
  3.16  municipality for the current taxes payable year divided by the 
  3.17  total market valuation of all taxable property located within 
  3.18  the municipality for the previous taxes payable year. 
  3.19     The commissioner of revenue shall certify the 
  3.20  municipality's levy limitation under this subdivision to the 
  3.21  municipality by June 1 of the levy year.  The tax must be 
  3.22  accumulated and kept in a separate fund to be known as the 
  3.23  "replacement transit fund." 
  3.24     (c) This subdivision is consistent with the transit 
  3.25  redesign plan.  Eligible municipalities opting to operate under 
  3.26  this subdivision shall continue to meet the regional performance 
  3.27  standards established by the council. 
  3.28     (c) (d) Within the designated Americans with Disabilities 
  3.29  Act area, metro mobility remains the obligation of the state. 
  3.30     [EFFECTIVE DATE.] This section is effective for taxes 
  3.31  levied in 2004, payable in 2005, and subsequent years. 
  3.32     Sec. 3.  Minnesota Statutes 2002, section 473.446, 
  3.33  subdivision 1, is amended to read: 
  3.34     Subdivision 1.  [METROPOLITAN AREA TRANSIT TAX.] (a) For 
  3.35  the purposes of sections 473.405 to 473.449 and the metropolitan 
  3.36  transit system, except as otherwise provided in this 
  4.1   subdivision, the council shall levy each year upon all taxable 
  4.2   property within the metropolitan area, defined in section 
  4.3   473.121, subdivision 2, a transit tax consisting of: 
  4.4      (1) an amount which shall be used for payment of the 
  4.5   expenses of operating transit and paratransit services; and 
  4.6      (2) an amount necessary to provide full and timely payment 
  4.7   of certificates of indebtedness, bonds, including refunding 
  4.8   bonds or other obligations issued or to be issued under section 
  4.9   473.39 by the council for purposes of acquisition and betterment 
  4.10  of property and other improvements of a capital nature and to 
  4.11  which the council has specifically pledged tax levies under this 
  4.12  clause; and 
  4.13     (2) an additional amount necessary to provide full and 
  4.14  timely payment of certificates of indebtedness issued by the 
  4.15  council, after consultation with the commissioner of finance, if 
  4.16  revenues to the metropolitan area transit fund in the fiscal 
  4.17  year in which the indebtedness is issued increase over those 
  4.18  revenues in the previous fiscal year by a percentage less than 
  4.19  the percentage increase for the same period in the revised 
  4.20  Consumer Price Index for all urban consumers for the St. 
  4.21  Paul-Minneapolis metropolitan area prepared by the United States 
  4.22  Department of Labor. 
  4.23     (b) Indebtedness to which property taxes have been pledged 
  4.24  under paragraph (a), clause (2), that is incurred in any fiscal 
  4.25  year may not exceed the amount necessary to make up the 
  4.26  difference between (1) the amount that the council received or 
  4.27  expects to receive in that fiscal year from the metropolitan 
  4.28  area transit fund and (2) the amount the council received from 
  4.29  that fund in the previous fiscal year multiplied by the 
  4.30  percentage increase for the same period in the revised Consumer 
  4.31  Price Index for all urban consumers for the St. Paul-Minneapolis 
  4.32  metropolitan area prepared by the United States Department of 
  4.33  Labor.  The property tax levied by the council for general 
  4.34  purposes under paragraph (a), clause (1), must not exceed the 
  4.35  following amount for the years specified: 
  4.36     (1) for taxes payable in 2005, the amount received by the 
  5.1   council and municipalities for that purpose from the 
  5.2   metropolitan area transit fund under section 16A.88, subdivision 
  5.3   2, in fiscal year 2004, multiplied by an index for market 
  5.4   valuation changes equal to the total market valuation of all 
  5.5   taxable property located within the metropolitan transit taxing 
  5.6   district for the current taxes payable year divided by the total 
  5.7   market valuation of all taxable property located within the 
  5.8   metropolitan transit taxing district for the previous taxes 
  5.9   payable year minus the amount levied by any municipality in the 
  5.10  current levy year under section 473.388, subdivision 7; and 
  5.11     (2) for taxes payable in 2006 and subsequent years, the 
  5.12  product of (i) the council's property tax levy limitation for 
  5.13  the previous year determined under this subdivision before 
  5.14  reduction by the amount levied by any municipality in the 
  5.15  previous year under section 473.388, subdivision 7, multiplied 
  5.16  by (ii) an index for market valuation changes equal to the total 
  5.17  market valuation of all taxable property located within the 
  5.18  metropolitan transit taxing district for the current taxes 
  5.19  payable year divided by the total market valuation of all 
  5.20  taxable property located within the metropolitan transit taxing 
  5.21  district for the previous taxes payable year minus the amount 
  5.22  levied by any municipality in the current levy year under 
  5.23  section 473.388, subdivision 7. 
  5.24     Sec. 4.  Minnesota Statutes 2002, section 473.446, is 
  5.25  amended by adding a subdivision to read: 
  5.26     Subd. 1c.  [TAXATION WITHIN TRANSIT AREA.] For the purposes 
  5.27  of sections 473.405 to 473.449, and the metropolitan transit 
  5.28  system, the Metropolitan Council shall levy upon all taxable 
  5.29  property within the metropolitan transit area but outside of the 
  5.30  metropolitan transit taxing district, defined in subdivision 2, 
  5.31  a transit tax, which shall be equal to ten percent of the sum of 
  5.32  the levies provided in subdivision 1, paragraph (a), clauses (1) 
  5.33  to (3).  The proceeds of this tax shall be used only for 
  5.34  paratransit services or ride sharing programs designed to serve 
  5.35  persons located within the transit area but outside of the 
  5.36  transit taxing district. 
  6.1      [EFFECTIVE DATE.] This section is effective for taxes 
  6.2   levied in 2004, payable in 2005, and subsequent years. 
  6.3      Sec. 5.  Minnesota Statutes 2002, section 473.446, is 
  6.4   amended by adding a subdivision to read: 
  6.5      Subd. 1d.  [DEDUCTION OF LEVY FOR ELIGIBLE 
  6.6   MUNICIPALITIES.] (a) The maximum the council may levy for 
  6.7   general purposes under subdivision 1, paragraph (a), upon 
  6.8   taxable property within a municipality levying taxes under 
  6.9   section 473.388, subdivision 7, is the combined transit tax 
  6.10  levied within the municipality in the previous year under 
  6.11  subdivision 1 and section 473.388, subdivision 7, multiplied by 
  6.12  the municipality's market value adjustment ratio, minus the 
  6.13  amount to be levied by the municipality under section 473.388, 
  6.14  subdivision 7, for the current levy year. 
  6.15     (b) For purposes of this subdivision: 
  6.16     (1) "municipality" means a municipality levying taxes under 
  6.17  section 473.388, subdivision 7, for replacement transit service; 
  6.18     (2) "market value adjustment ratio" means the index for 
  6.19  market valuation changes described in this section, as applied 
  6.20  to individual municipalities; and 
  6.21     (3) "tax revenues" has the meaning given in section 
  6.22  473.388, subdivision 4. 
  6.23     [EFFECTIVE DATE.] This section is effective for taxes 
  6.24  levied in 2004, payable in 2005, and subsequent years. 
  6.25     Sec. 6.  Minnesota Statutes 2003 Supplement, section 
  6.26  477A.011, subdivision 36, is amended to read: 
  6.27     Subd. 36.  [CITY AID BASE.] (a) Except as otherwise 
  6.28  provided in this subdivision, "city aid base" is zero. 
  6.29     (b) The city aid base for any city with a population less 
  6.30  than 500 is increased by $40,000 for aids payable in calendar 
  6.31  year 1995 and thereafter, and the maximum amount of total aid it 
  6.32  may receive under section 477A.013, subdivision 9, paragraph 
  6.33  (c), is also increased by $40,000 for aids payable in calendar 
  6.34  year 1995 only, provided that: 
  6.35     (i) the average total tax capacity rate for taxes payable 
  6.36  in 1995 exceeds 200 percent; 
  7.1      (ii) the city portion of the tax capacity rate exceeds 100 
  7.2   percent; and 
  7.3      (iii) its city aid base is less than $60 per capita. 
  7.4      (c) The city aid base for a city is increased by $20,000 in 
  7.5   1998 and thereafter and the maximum amount of total aid it may 
  7.6   receive under section 477A.013, subdivision 9, paragraph (c), is 
  7.7   also increased by $20,000 in calendar year 1998 only, provided 
  7.8   that: 
  7.9      (i) the city has a population in 1994 of 2,500 or more; 
  7.10     (ii) the city is located in a county, outside of the 
  7.11  metropolitan area, which contains a city of the first class; 
  7.12     (iii) the city's net tax capacity used in calculating its 
  7.13  1996 aid under section 477A.013 is less than $400 per capita; 
  7.14  and 
  7.15     (iv) at least four percent of the total net tax capacity, 
  7.16  for taxes payable in 1996, of property located in the city is 
  7.17  classified as railroad property. 
  7.18     (d) The city aid base for a city is increased by $200,000 
  7.19  in 1999 and thereafter and the maximum amount of total aid it 
  7.20  may receive under section 477A.013, subdivision 9, paragraph 
  7.21  (c), is also increased by $200,000 in calendar year 1999 only, 
  7.22  provided that: 
  7.23     (i) the city was incorporated as a statutory city after 
  7.24  December 1, 1993; 
  7.25     (ii) its city aid base does not exceed $5,600; and 
  7.26     (iii) the city had a population in 1996 of 5,000 or more. 
  7.27     (e) The city aid base for a city is increased by $450,000 
  7.28  in 1999 to 2008 and the maximum amount of total aid it may 
  7.29  receive under section 477A.013, subdivision 9, paragraph (c), is 
  7.30  also increased by $450,000 in calendar year 1999 only, provided 
  7.31  that: 
  7.32     (i) the city had a population in 1996 of at least 50,000; 
  7.33     (ii) its population had increased by at least 40 percent in 
  7.34  the ten-year period ending in 1996; and 
  7.35     (iii) its city's net tax capacity for aids payable in 1998 
  7.36  is less than $700 per capita. 
  8.1      (f) Beginning in 2004, the city aid base for a city is 
  8.2   equal to the sum of its city aid base in 2003 and the amount of 
  8.3   additional aid it was certified to receive under section 477A.06 
  8.4   in 2003.  For 2004 only, the maximum amount of total aid a city 
  8.5   may receive under section 477A.013, subdivision 9, paragraph 
  8.6   (c), is also increased by the amount it was certified to receive 
  8.7   under section 477A.06 in 2003. 
  8.8      (g) The city aid base for a city is increased by $150,000 
  8.9   for aids payable in 2000 and thereafter, and the maximum amount 
  8.10  of total aid it may receive under section 477A.013, subdivision 
  8.11  9, paragraph (c), is also increased by $150,000 in calendar year 
  8.12  2000 only, provided that: 
  8.13     (1) the city has a population that is greater than 1,000 
  8.14  and less than 2,500; 
  8.15     (2) its commercial and industrial percentage for aids 
  8.16  payable in 1999 is greater than 45 percent; and 
  8.17     (3) the total market value of all commercial and industrial 
  8.18  property in the city for assessment year 1999 is at least 15 
  8.19  percent less than the total market value of all commercial and 
  8.20  industrial property in the city for assessment year 1998. 
  8.21     (h) The city aid base for a city is increased by $200,000 
  8.22  in 2000 and thereafter, and the maximum amount of total aid it 
  8.23  may receive under section 477A.013, subdivision 9, paragraph 
  8.24  (c), is also increased by $200,000 in calendar year 2000 only, 
  8.25  provided that: 
  8.26     (1) the city had a population in 1997 of 2,500 or more; 
  8.27     (2) the net tax capacity of the city used in calculating 
  8.28  its 1999 aid under section 477A.013 is less than $650 per 
  8.29  capita; 
  8.30     (3) the pre-1940 housing percentage of the city used in 
  8.31  calculating 1999 aid under section 477A.013 is greater than 12 
  8.32  percent; 
  8.33     (4) the 1999 local government aid of the city under section 
  8.34  477A.013 is less than 20 percent of the amount that the formula 
  8.35  aid of the city would have been if the need increase percentage 
  8.36  was 100 percent; and 
  9.1      (5) the city aid base of the city used in calculating aid 
  9.2   under section 477A.013 is less than $7 per capita. 
  9.3      (i) The city aid base for a city is increased by $102,000 
  9.4   in 2000 and thereafter, and the maximum amount of total aid it 
  9.5   may receive under section 477A.013, subdivision 9, paragraph 
  9.6   (c), is also increased by $102,000 in calendar year 2000 only, 
  9.7   provided that: 
  9.8      (1) the city has a population in 1997 of 2,000 or more; 
  9.9      (2) the net tax capacity of the city used in calculating 
  9.10  its 1999 aid under section 477A.013 is less than $455 per 
  9.11  capita; 
  9.12     (3) the net levy of the city used in calculating 1999 aid 
  9.13  under section 477A.013 is greater than $195 per capita; and 
  9.14     (4) the 1999 local government aid of the city under section 
  9.15  477A.013 is less than 38 percent of the amount that the formula 
  9.16  aid of the city would have been if the need increase percentage 
  9.17  was 100 percent. 
  9.18     (j) The city aid base for a city is increased by $32,000 in 
  9.19  2001 and thereafter, and the maximum amount of total aid it may 
  9.20  receive under section 477A.013, subdivision 9, paragraph (c), is 
  9.21  also increased by $32,000 in calendar year 2001 only, provided 
  9.22  that: 
  9.23     (1) the city has a population in 1998 that is greater than 
  9.24  200 but less than 500; 
  9.25     (2) the city's revenue need used in calculating aids 
  9.26  payable in 2000 was greater than $200 per capita; 
  9.27     (3) the city net tax capacity for the city used in 
  9.28  calculating aids available in 2000 was equal to or less than 
  9.29  $200 per capita; 
  9.30     (4) the city aid base of the city used in calculating aid 
  9.31  under section 477A.013 is less than $65 per capita; and 
  9.32     (5) the city's formula aid for aids payable in 2000 was 
  9.33  greater than zero. 
  9.34     (k) The city aid base for a city is increased by $7,200 in 
  9.35  2001 and thereafter, and the maximum amount of total aid it may 
  9.36  receive under section 477A.013, subdivision 9, paragraph (c), is 
 10.1   also increased by $7,200 in calendar year 2001 only, provided 
 10.2   that: 
 10.3      (1) the city had a population in 1998 that is greater than 
 10.4   200 but less than 500; 
 10.5      (2) the city's commercial industrial percentage used in 
 10.6   calculating aids payable in 2000 was less than ten percent; 
 10.7      (3) more than 25 percent of the city's population was 60 
 10.8   years old or older according to the 1990 census; 
 10.9      (4) the city aid base of the city used in calculating aid 
 10.10  under section 477A.013 is less than $15 per capita; and 
 10.11     (5) the city's formula aid for aids payable in 2000 was 
 10.12  greater than zero. 
 10.13     (l) The city aid base for a city is increased by $45,000 in 
 10.14  2001 and thereafter and by an additional $50,000 in calendar 
 10.15  years 2002 to 2011, and the maximum amount of total aid it may 
 10.16  receive under section 477A.013, subdivision 9, paragraph (c), is 
 10.17  also increased by $45,000 in calendar year 2001 only, and by 
 10.18  $50,000 in calendar year 2002 only, provided that: 
 10.19     (1) the net tax capacity of the city used in calculating 
 10.20  its 2000 aid under section 477A.013 is less than $810 per 
 10.21  capita; 
 10.22     (2) the population of the city declined more than two 
 10.23  percent between 1988 and 1998; 
 10.24     (3) the net levy of the city used in calculating 2000 aid 
 10.25  under section 477A.013 is greater than $240 per capita; and 
 10.26     (4) the city received less than $36 per capita in aid under 
 10.27  section 477A.013, subdivision 9, for aids payable in 2000. 
 10.28     (m) The city aid base for a city with a population of 
 10.29  10,000 or more which is located outside of the seven-county 
 10.30  metropolitan area is increased in 2002 and thereafter, and the 
 10.31  maximum amount of total aid it may receive under section 
 10.32  477A.013, subdivision 9, paragraph (b) or (c), is also increased 
 10.33  in calendar year 2002 only, by an amount equal to the lesser of: 
 10.34     (1)(i) the total population of the city, as determined by 
 10.35  the United States Bureau of the Census, in the 2000 census, (ii) 
 10.36  minus 5,000, (iii) times 60; or 
 11.1      (2) $2,500,000. 
 11.2      (n) The city aid base is increased by $50,000 in 2002 and 
 11.3   thereafter, and the maximum amount of total aid it may receive 
 11.4   under section 477A.013, subdivision 9, paragraph (c), is also 
 11.5   increased by $50,000 in calendar year 2002 only, provided that: 
 11.6      (1) the city is located in the seven-county metropolitan 
 11.7   area; 
 11.8      (2) its population in 2000 is between 10,000 and 20,000; 
 11.9   and 
 11.10     (3) its commercial industrial percentage, as calculated for 
 11.11  city aid payable in 2001, was greater than 25 percent. 
 11.12     (o) The city aid base for a city is increased by $150,000 
 11.13  in calendar years 2002 to 2011 and the maximum amount of total 
 11.14  aid it may receive under section 477A.013, subdivision 9, 
 11.15  paragraph (c), is also increased by $150,000 in calendar year 
 11.16  2002 only, provided that: 
 11.17     (1) the city had a population of at least 3,000 but no more 
 11.18  than 4,000 in 1999; 
 11.19     (2) its home county is located within the seven-county 
 11.20  metropolitan area; 
 11.21     (3) its pre-1940 housing percentage is less than 15 
 11.22  percent; and 
 11.23     (4) its city net tax capacity per capita for taxes payable 
 11.24  in 2000 is less than $900 per capita. 
 11.25     (p) The city aid base for a city is increased by $200,000 
 11.26  beginning in calendar year 2003 and the maximum amount of total 
 11.27  aid it may receive under section 477A.013, subdivision 9, 
 11.28  paragraph (c), is also increased by $200,000 in calendar year 
 11.29  2003 only, provided that the city qualified for an increase in 
 11.30  homestead and agricultural credit aid under Laws 1995, chapter 
 11.31  264, article 8, section 18. 
 11.32     (q) The city aid base for a city is increased by $200,000 
 11.33  in 2004 only and the maximum amount of total aid it may receive 
 11.34  under section 477A.013, subdivision 9, is also increased by 
 11.35  $200,000 in calendar year 2004 only, if the city is the site of 
 11.36  a nuclear dry cask storage facility. 
 12.1      (r) The city aid base for a city is increased by $10,000 in 
 12.2   2004 and thereafter and the maximum total aid it may receive 
 12.3   under section 477A.013, subdivision 9, is also increased by 
 12.4   $10,000 in calendar year 2004 only, if the city was included in 
 12.5   a federal major disaster designation issued on April 1, 1998, 
 12.6   and its pre-1940 housing stock was decreased by more than 40 
 12.7   percent between 1990 and 2000. 
 12.8      [EFFECTIVE DATE.] This section is effective for aids paid 
 12.9   in 2005 and thereafter. 
 12.10     Sec. 7.  Minnesota Statutes 2003 Supplement, section 
 12.11  477A.013, subdivision 8, is amended to read: 
 12.12     Subd. 8.  [CITY FORMULA AID.] In calendar year 2004 and 
 12.13  subsequent years, the formula aid for a city is equal to the 
 12.14  need increase percentage multiplied by the difference between 
 12.15  (1) the city's revenue need multiplied by its population, and 
 12.16  (2) the sum of the city's net tax capacity multiplied by the tax 
 12.17  effort rate, and the taconite aids under sections 298.28 and 
 12.18  298.282, multiplied by the following percentages:  
 12.19     (i) zero percent for aids payable in 2004; 
 12.20     (ii) 25 percent for aids payable in 2005; 
 12.21     (iii) 50 percent for aids payable in 2006; 
 12.22     (iv) 75 percent for aids payable in 2007; and 
 12.23     (v) 100 percent for aids payable in 2008 and thereafter.  
 12.24  No city may have a formula aid amount less than zero.  The need 
 12.25  increase percentage must be the same for all cities.  
 12.26     The applicable need increase percentage must be calculated 
 12.27  by the Department of Revenue so that the total of the aid under 
 12.28  subdivision 9 equals the total amount available for aid under 
 12.29  section 477A.03 after the subtraction under section 477A.014, 
 12.30  subdivisions 4 and 5.  
 12.31     [EFFECTIVE DATE.] This section is effective for aid payable 
 12.32  in 2004 and thereafter. 
 12.33     Sec. 8.  Minnesota Statutes 2003 Supplement, section 
 12.34  477A.013, subdivision 9, is amended to read: 
 12.35     Subd. 9.  [CITY AID DISTRIBUTION.] (a) In calendar year 
 12.36  2002 and thereafter, each city shall receive an aid distribution 
 13.1   equal to the sum of (1) the city formula aid under subdivision 
 13.2   8, and (2) its city aid base. 
 13.3      (b) The aid for a city in calendar year 2004 shall not 
 13.4   exceed the amount of its aid in calendar year 2003 after the 
 13.5   reductions under Laws 2003, First Special Session chapter 21, 
 13.6   article 5.  
 13.7      (c) For aids payable in 2005 and thereafter, the total aid 
 13.8   for any city shall not exceed the sum of (1) ten percent of the 
 13.9   city's net levy for the year prior to the aid distribution plus 
 13.10  (2) its total aid in the previous year.  For aids payable in 
 13.11  2005 and thereafter, the total aid for any city with a 
 13.12  population of 2,500 or more may not decrease from its total aid 
 13.13  under this section in the previous year by an amount greater 
 13.14  than ten percent of its net levy in the year prior to the aid 
 13.15  distribution. 
 13.16     (d) For aids payable in 2004 only, the total aid for a city 
 13.17  with a population less than 2,500 may not be less than the 
 13.18  amount it was certified to receive in 2003 minus the greater of 
 13.19  (1) the reduction to this aid payment in 2003 under Laws 2003, 
 13.20  First Special Session chapter 21, article 5, or (2) five percent 
 13.21  of its 2003 aid amount.  For aids payable in 2005 and 
 13.22  thereafter, the total aid for a city with a population less than 
 13.23  2,500 must not be less than the amount it was certified to 
 13.24  receive in the previous year minus five percent of its 2003 
 13.25  certified aid amount. 
 13.26     [EFFECTIVE DATE.] This section is effective for aids 
 13.27  payable in 2005 and thereafter. 
 13.28     Sec. 9.  Minnesota Statutes 2003 Supplement, section 
 13.29  477A.03, subdivision 2a, is amended to read: 
 13.30     Subd. 2a.  [CITIES.] For aids payable in 2004, the total 
 13.31  aids paid under section 477A.013, subdivision 9, are limited to 
 13.32  $429,000,000.  For aids payable in 2005 and thereafter, the 
 13.33  total aids paid under section 477A.013, subdivision 9, are 
 13.34  increased to $437,052,000 $497,052,000. 
 13.35     Sec. 10.  [CITY AID REDUCTION; DELAYED RESTORATION.] 
 13.36     Subdivision 1.  [2005 REDUCTIONS.] The amount of 
 14.1   reimbursement for market value homestead credits that would 
 14.2   otherwise be payable under Minnesota Statutes, section 273.1384, 
 14.3   to a city in 2005, must be reduced by the amount of the city's 
 14.4   2004 reimbursement reductions under Laws 2003, First Special 
 14.5   Session chapter 21, article 5, section 13. 
 14.6      Subd. 2.  [2006 AND SUBSEQUENT REDUCTIONS.] The amount of 
 14.7   reimbursement for market value homestead credits that would 
 14.8   otherwise be payable under Minnesota Statutes, section 273.1384, 
 14.9   to a city in 2006 and subsequent years, must be adjusted as 
 14.10  follows: 
 14.11     (1) first, it must be reduced by the amount of the city's 
 14.12  2004 reimbursement reduction under Laws 2003, First Special 
 14.13  Session chapter 21, article 5, section 13; and 
 14.14     (2) second, the amount determined after application of 
 14.15  clause (1) must be increased by the percentage increase in the 
 14.16  aids payable to cities that year under Minnesota Statutes, 
 14.17  section 477A.013, subdivision 9. 
 14.18     Sec. 11.  [FEDERAL FUNDS TO BE USED FOR AID INCREASES.] 
 14.19     Of the funds made available to the state under Public Law 
 14.20  108-27, the Jobs and Growth Tax Relief Reconciliation Act of 
 14.21  2003, $20,000,000 must be transferred from the budget reserve 
 14.22  account to the general fund to be used for the increased 
 14.23  appropriation under section 9.