HF 1129

as introduced - 94th Legislature (2025 - 2026) Posted on 02/19/2025 11:13am

A bill for an act
relating to taxation; local government aid; establishing a sparsity factor in the city
aid formula; appropriating money; amending Minnesota Statutes 2024, sections
477A.011, subdivision 34, by adding a subdivision; 477A.03, subdivision 2a.

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

Section 1.

Minnesota Statutes 2024, 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
10,000, "city revenue need" is 1.15 times the sum of (1) 8.572 times the pre-1940 housing
percentage; plus (2) 11.494 times the city age index; plus (3) 5.719 times the commercial
industrial utility percentage; plus (4) 9.484 times peak population decline; plus (5) 293.056 new text begin ;
plus (6) the sparsity adjustment new text end .

(b) For a city with a population equal to or greater than 2,500 and less than 10,000, "city
revenue need" is 1.15 times the sum of (1) 497.308; plus (2) 6.667 times the pre-1940
housing percentage; plus (3) 9.215 times the commercial industrial utility percentage; plus
(4) 16.081 times peak population decline new text begin ; plus (5) the sparsity adjustment new text end .

(c) For a city with a population less than 2,500, "city revenue need" is the sum of (1)
196.487; plus (2) 220.877 times the city's transformed population new text begin ; plus (3) the sparsity
adjustment new text end .

(d) For a city with a population of at least 2,500 but less than 3,000, the "city revenue
need" equals (1) the transition factor times the city's revenue need calculated in paragraph
(b); plus (2) the city's revenue need calculated under the formula in paragraph (c) times the
difference between one and the transition factor. For a city with a population of at least
10,000 but less than 11,000, the "city revenue need" equals (1) the transition factor times
the city's revenue need calculated in paragraph (a); plus (2) the city's revenue need calculated
under the formula in paragraph (b) times the difference between one and the transition
factor. For purposes of the first sentence of this paragraph "transition factor" is 0.2 percent
times the amount that the city's population exceeds the minimum threshold. For purposes
of the second sentence of this paragraph, "transition factor" is 0.1 percent times the amount
that the city's population exceeds the minimum threshold.

(e) The city revenue need cannot be less than zero.

(f) For calendar year 2024 and subsequent years, the city revenue need for a city, as
determined in paragraphs (a) to (e), 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 to the 2022 implicit price deflator for state and local government
purchases.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year 2026
and thereafter.
new text end

Sec. 2.

Minnesota Statutes 2024, section 477A.011, is amended by adding a subdivision
to read:

new text begin Subd. 48. new text end

new text begin Sparsity adjustment. new text end

new text begin The sparsity adjustment is 200 for:
new text end

new text begin (1) a city with a population of 10,000 or more and an average population density of less
than 150 per square mile, according to the most recent federal census; and
new text end

new text begin (2) a city with a population less than 10,000 and an average population density less than
30 per square mile, according to the most recent federal census.
new text end

new text begin The sparsity adjustment is zero for all other cities.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year 2026
and thereafter.
new text end

Sec. 3.

Minnesota Statutes 2024, section 477A.03, subdivision 2a, is amended to read:

Subd. 2a.

Cities.

For aids payable in 2021 through 2023, the total aid payable under
section 477A.013, subdivision 9, is $564,398,012. For aids payable in 2024 and deleted text begin thereafter deleted text end new text begin
2025 new text end , the total aid payable under section 477A.013, subdivision 9, is $644,398,012. new text begin For
aids payable in 2026 and thereafter, the total aid payable under section 477A.013, subdivision
9, is $........
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year 2026
and thereafter.
new text end