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SF 1491

as introduced - 88th Legislature (2013 - 2014) Posted on 03/21/2013 09:37am

KEY: stricken = removed, old language. underscored = added, new language.

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Current Version - as introduced

1.1A bill for an act
1.2relating to taxation; local government aid; modifying the formula and changing
1.3the appropriation;amending Minnesota Statutes 2012, sections 477A.011,
1.4subdivisions 30, 34, 42, by adding subdivisions; 477A.013, subdivisions 8, 9, by
1.5adding a subdivision; 477A.03, subdivision 2a, by adding a subdivision; repealing
1.6Minnesota Statutes 2012, sections 477A.011, subdivisions 2a, 19, 29, 31, 32, 33,
1.736, 39, 40, 41, 42; 477A.013, subdivisions 11, 12; 477A.0133; 477A.0134.
1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.9    Section 1. Minnesota Statutes 2012, section 477A.011, subdivision 30, is amended to
1.10read:
1.11    Subd. 30. Pre-1940 housing percentage. (a) Except as provided in paragraph (b),
1.12"pre-1940 housing percentage" for a city is 100 times the most recent federal census
1.13count of all housing units in the city built before 1940, divided by the total number of all
1.14housing units in the city. Housing units includes both occupied and vacant housing units
1.15as defined by the federal census.
1.16(b) For the city of East Grand Forks only, "pre-1940 housing percentage" is equal to
1.17100 times the 1990 federal census count of all housing units in the city built before 1940,
1.18divided by the most recent federal census counts of all housing units in the city. Housing
1.19units includes both occupied and vacant housing units as defined by the federal census.
1.20EFFECTIVE DATE.This section is effective for aids payable in calendar year
1.212014 and thereafter.

1.22    Sec. 2. Minnesota Statutes 2012, section 477A.011, is amended by adding a
1.23subdivision to read:
2.1    Subd. 30a. Percent of housing built between 1940 and 1970. "Percent of housing
2.2built between 1940 and 1970" is equal to 100 times the most recent federal census count of
2.3all housing units in the city built after 1939 but before 1970, divided by the total number
2.4of all housing units in the city. Housing units includes both occupied and vacant housing
2.5units as defined by the federal census.
2.6EFFECTIVE DATE.This section is effective for aids payable in calendar year
2.72014 and thereafter.

2.8    Sec. 3. Minnesota Statutes 2012, section 477A.011, subdivision 34, is amended to read:
2.9    Subd. 34. City revenue need. (a) For a city with a population equal to or greater
2.10than 2,500 10,000, "city revenue need" is the greater of 285 or 1.15 times the sum of (1)
2.115.0734098 4.59 times the pre-1940 housing percentage; plus (2) 19.141678 times the
2.12population decline percentage 0.622 times the percent of housing built between 1940 and
2.131970; plus (3) 2504.06334 times the road accidents factor 169.415 times the jobs per
2.14capita; plus (4) 355.0547; minus (5) the metropolitan area factor; minus (6) 49.10638
2.15times the household size 307.664.
2.16    (b) For a city with a population equal to or greater than 2,500 and less than 10,000,
2.17"city revenue need" is 1.15 times the sum of (1) 572.62; plus (2) 5.026 times the pre-1940
2.18housing percentage; plus (3) 53.768 times household size; plus (4) 14.022 times peak
2.19population decline.
2.20    (b) (c) For a city with a population less than 2,500, "city revenue need" is the sum of
2.21(1) 2.387 times the pre-1940 housing percentage; plus (2) 2.67591 times the commercial
2.22industrial percentage; plus (3) 3.16042 times the population decline percentage; plus (4)
2.231.206 times the transformed population; minus (5) 62.772 410 plus 0.367 times the city's
2.24population over 100. The city revenue need under this paragraph shall not exceed 630.
2.25    (c) (d) For a city with a population of at least 2,500 or more and a population in one
2.26of the most recently available five years that was less than 2,500, "city revenue need"
2.27is the sum of (1) its city revenue need calculated under paragraph (a) multiplied by its
2.28transition factor; plus (2) its city revenue need calculated under the formula in paragraph
2.29(b) multiplied by the difference between one and its transition factor. For purposes of this
2.30paragraph, a city's "transition factor" is equal to 0.2 multiplied by the number of years that
2.31the city's population estimate has been 2,500 or more. This provision only applies for aids
2.32payable in calendar years 2006 to 2008 to cities with a 2002 population of less than 2,500.
2.33It applies to any city for aids payable in 2009 and thereafter but less than 3,000, the "city
2.34revenue need" equals (1) the transition factor times the city's revenue need calculated in
2.35paragraph (b) plus (2) 630 times the difference between one and the transition factor. For
3.1a city with a population of at least 10,000 but less than 10,500, the "city revenue need"
3.2equals (1) the transition factor times the city's revenue need calculated in paragraph (a)
3.3plus (2) the city's revenue need calculated under the formula in paragraph (b) times the
3.4difference between one and the transition factor. For purposes of this paragraph "transition
3.5factor" is 0.2 percent times the amount that the city's population exceeds the minimum
3.6threshold in either of the first two sentences.
3.7    (d) (e) The city revenue need cannot be less than zero.
3.8    (e) (f) For calendar year 2005 2015 and subsequent years, the city revenue need for
3.9a city, as determined in paragraphs (a) to (d) (e), is multiplied by the ratio of the annual
3.10implicit price deflator for government consumption expenditures and gross investment for
3.11state and local governments as prepared by the United States Department of Commerce,
3.12for the most recently available year to the 2003 2013 implicit price deflator for state
3.13and local government purchases.
3.14EFFECTIVE DATE.This section is effective for aids payable in calendar year
3.152014 and thereafter.

3.16    Sec. 4. Minnesota Statutes 2012, section 477A.011, subdivision 42, is amended to read:
3.17    Subd. 42. City jobs base Jobs per capita. (a) "City jobs base" for a city with a
3.18population of 5,000 or more is equal to the product of (1) $25.20, (2) the number of
3.19jobs per capita in the city, and (3) its population. For cities with a population less than
3.205,000, the city jobs base is equal to zero. For a city receiving aid under subdivision 36,
3.21paragraph (k), its city jobs base is reduced by the lesser of 36 percent of the amount of
3.22aid received under that paragraph or $1,000,000. No city's city jobs base may exceed
3.23$4,725,000 under this paragraph.
3.24    (b) For calendar year 2010 and subsequent years, the city jobs base for a city, as
3.25determined in paragraph (a), is multiplied by the ratio of the appropriation under section
3.26477A.03, subdivision 2a, for the year in which the aid is paid to the appropriation under
3.27that section for aids payable in 2009.
3.28    (c) For purposes of this subdivision, "Jobs per capita in the city" means (1) the average
3.29annual number of employees in the city based on the data from the Quarterly Census of
3.30Employment and Wages, as reported by the Department of Employment and Economic
3.31Development, for the most recent calendar year available as of May 1, 2008 November 1 of
3.32every odd-numbered year, divided by (2) the city's population for the same calendar year as
3.33the employment data. The commissioner of the Department of Employment and Economic
3.34Development shall certify to the city the average annual number of employees for each
3.35city by June 1, 2008 January 15, of every even-numbered year beginning with January 15,
4.12014. For aids payable in 2014 only, " jobs per capita" has the same meaning it had under
4.2this subdivision for aids payable in 2013. A city may challenge an estimate under this
4.3paragraph by filing its specific objection, including the names of employers that it feels
4.4may have misreported data, in writing with the commissioner by June 20, 2008 December
4.51 of every odd-numbered year. The commissioner shall make every reasonable effort to
4.6address the specific objection and adjust the data as necessary. The commissioner shall
4.7certify the estimates of the annual employment to the commissioner of revenue by July 15,
4.82008 January 15 of all even-numbered years, including any estimates still under objection.
4.9EFFECTIVE DATE.This section is effective for aids payable in calendar year
4.102014 and thereafter.

4.11    Sec. 5. Minnesota Statutes 2012, section 477A.011, is amended by adding a
4.12subdivision to read:
4.13    Subd. 44. Peak population decline. "Peak population decline" is equal to 100
4.14times the difference between one and the ratio of the city's current population, to the
4.15highest city population reported in a federal census from the 1970 census or later. "Peak
4.16population decline" shall not be less than zero.
4.17EFFECTIVE DATE.This section is effective for aids payable in calendar year
4.182014 and thereafter.

4.19    Sec. 6. Minnesota Statutes 2012, section 477A.013, subdivision 8, is amended to read:
4.20    Subd. 8. City formula aid. (a) For aids payable in 2014 only, the formula aid for a
4.21city is equal to the sum of (1) its 2013 certified aid and (2) the product of (i) the difference
4.22between its unmet need and its 2013 certified aid and (ii) the aid gap percentage.
4.23    (b) For aids payable in 2015 and thereafter, the formula aid for a city is equal to
4.24the sum of (1) its city jobs base, (2) its small city aid base, and (3) the need increase
4.25percentage multiplied by the average of its unmet need for the most recently available two
4.26years formula aid in the previous year and (2) the product of (i) the difference between
4.27its unmet need and its certified aid in the previous year under subdivision 9, and (ii)
4.28the aid gap percentage.
4.29No city may have a formula aid amount less than zero. The need increase aid gap
4.30 percentage must be the same for all cities.
4.31    The applicable need increase aid gap percentage must be calculated by the
4.32Department of Revenue so that the total of the aid under subdivision 9 equals the total
4.33amount available for aid under section 477A.03. Data used in calculating aids to cities
5.1under sections 477A.011 to 477A.013 shall be the most recently available data as of
5.2January 1 in the year in which the aid is calculated except that the data used to compute "net
5.3levy" in subdivision 9 is the data most recently available at the time of the aid computation.
5.4EFFECTIVE DATE.This section is effective for aids payable in calendar year
5.52014 and thereafter.

5.6    Sec. 7. Minnesota Statutes 2012, section 477A.013, subdivision 9, is amended to read:
5.7    Subd. 9. City aid distribution. (a) In calendar year 2013 2014 and thereafter, each
5.8city shall receive an aid distribution equal to the sum of (1) the city formula aid under
5.9subdivision 8, and (2) its city aid base aid adjustment under subdivision 13.
5.10    (b) For aids payable in 2013 and 2014 only, the total aid in the previous year for
5.11any city shall mean the amount of aid it was certified to receive for aids payable in 2012
5.12under this section. For aids payable in 2015 and thereafter, the total aid in the previous
5.13year for any city means the amount of aid it was certified to receive under this section in
5.14the previous payable year.
5.15    (c) For aids payable in 2010 and thereafter, the total aid for any city shall not exceed
5.16the sum of (1) ten percent of the city's net levy for the year prior to the aid distribution
5.17plus (2) its total aid in the previous year. For aids payable in 2009 and thereafter, the total
5.18aid for any city with a population of 2,500 or more may not be less than its total aid under
5.19this section in the previous year minus the lesser of $10 multiplied by its population, or ten
5.20percent of its net levy in the year prior to the aid distribution.
5.21    (d) (b) For aids payable in 2014 only, the total aid for a city may not be less than the
5.22amount it was certified to receive in 2013. For aids payable in 2010 2015 and thereafter,
5.23the total aid for a city with a population less than 2,500 must not be less than the amount
5.24it was certified to receive in the previous year minus the lesser of $10 multiplied by its
5.25population, or five percent of its 2003 certified aid amount. For aids payable in 2009 only,
5.26the total aid for a city with a population less than 2,500 must not be less than what it
5.27received under this section in the previous year unless its total aid in calendar year 2008
5.28was aid under section 477A.011, subdivision 36, paragraph (s), in which case its minimum
5.29aid is zero its net levy in the year prior to the aid distribution.
5.30    (e) A city's aid loss under this section may not exceed $300,000 in any year in
5.31which the total city aid appropriation under section 477A.03, subdivision 2a, is equal or
5.32greater than the appropriation under that subdivision in the previous year, unless the
5.33city has an adjustment in its city net tax capacity under the process described in section
5.34469.174, subdivision 28.
6.1    (f) If a city's net tax capacity used in calculating aid under this section has decreased
6.2in any year by more than 25 percent from its net tax capacity in the previous year due to
6.3property becoming tax-exempt Indian land, the city's maximum allowed aid increase
6.4under paragraph (c) shall be increased by an amount equal to (1) the city's tax rate in the
6.5year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease
6.6resulting from the property becoming tax exempt.
6.7EFFECTIVE DATE.This section is effective for aids payable in calendar year
6.82014 and thereafter.

6.9    Sec. 8. Minnesota Statutes 2012, section 477A.013, is amended by adding a
6.10subdivision to read:
6.11    Subd. 13. Certified aid adjustments. (a) A city that received an aid base increase
6.12under Minnesota Statutes 2012, section 477A.011, subdivision 36, paragraph (e), shall
6.13have its total aid under subdivision 9 increased by an amount equal to $150,000 for aids
6.14payable in 2014 through 2018.
6.15(b) A city that received a temporary aid increase under Minnesota Statutes 2012,
6.16section 477A.011, subdivision 36, paragraph (m), (v), or (w), shall have its total aid under
6.17subdivision 9 decreased by the amount of its aid base increase under those paragraphs in
6.18calendar year 2013.

6.19    Sec. 9. Minnesota Statutes 2012, section 477A.03, subdivision 2a, is amended to read:
6.20    Subd. 2a. Cities. For aids payable in 2013 2014 and thereafter, the total aid paid
6.21under section 477A.013, subdivision 9, is $426,438,012 $......., multiplied by the inflation
6.22adjustment under subdivision 6.
6.23EFFECTIVE DATE.This section is effective for aids payable in calendar year
6.242014 and thereafter.

6.25    Sec. 10. Minnesota Statutes 2012, section 477A.03, is amended by adding a
6.26subdivision to read:
6.27    Subd. 6. Inflation adjustment. In 2015 and thereafter, the amount paid under
6.28subdivision 2a shall be increased by an amount equal to one plus the sum of (1) the
6.29percentage increase in the implicit price deflator for government expenditures and gross
6.30investment for state and local government purchases as prepared by the United States
6.31Department of Commerce, for the 12-month period ending March 31 of the previous
6.32calendar year, and (2) the percentage increase in total city population for the most recently
7.1available years as of January 15 of the current year. The percentage increase in this
7.2subdivision shall not be less than 2.5 percent or greater than five percent.
7.3EFFECTIVE DATE.This section is effective for aids payable in calendar year
7.42014 and thereafter.

7.5    Sec. 11. REPEALER.
7.6Minnesota Statutes 2012, sections 477A.011, subdivisions 2a, 19, 29, 31, 32, 33, 36,
7.739, 40, 41, and 42; 477A.013, subdivisions 11 and 12; 477A.0133; and 477A.0134, are
7.8repealed.
7.9EFFECTIVE DATE.This section is effective for aids payable in calendar year
7.102014 and thereafter.

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