SF 1238

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/26/2021 01:49pm

A bill for an act
relating to taxation; property; modifying local government aid program calculation;
amending Minnesota Statutes 2020, sections 477A.013, subdivisions 8, 9, by
adding subdivisions; 477A.03, subdivision 2a.

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

Section 1.

Minnesota Statutes 2020, section 477A.013, subdivision 8, is amended to read:

Subd. 8.

City formula aid.

(a) For aids payable in 2018 2022 and thereafter, the formula
aid for a city is equal to the product of (1) the difference between its unmet need and its
certified aid in the previous year and before any aid adjustment under subdivision 13, and
(2) the aid gap percentage.

(b) The applicable aid gap percentage must be calculated by the Department of Revenue
so that the total of the aid under subdivision 9 16 equals the total amount available for aid
under section 477A.03. The aid gap percentage must be the same for all cities subject to
paragraph (a). Data used in calculating aids to cities under sections 477A.011 to 477A.013
shall be the most recently available data as of January 1 in the year in which the aid is
calculated.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year 2022
and thereafter.

Sec. 2.

Minnesota Statutes 2020, section 477A.013, subdivision 9, is amended to read:

Subd. 9.

Preliminary city aid distribution.

(a) In calendar year 2018 2021 and thereafter,
if a city's certified aid before any aid adjustment under subdivision 13 for the previous year
is less than its current unmet need, the city shall receive an aid distribution equal to the sum
of (1) its certified aid in the previous year before any aid adjustment under subdivision 13,
(2) the city formula aid under subdivision 8, and (3) its aid adjustment under subdivision
13.

(b) For aids payable in 2020 only, no city's aid amount before any adjustment under
subdivision 13 may be less than its pay 2019 certified aid amount, less any aid adjustment
under subdivision 13 for that year. For aids payable in 2020 and thereafter, if a city's certified
aid before any aid adjustment under subdivision 13 for the previous year is equal to or
greater than its current unmet need, the total aid for a city is equal to the greater of (1) its
unmet need plus any aid adjustment under subdivision 13, or (2) the amount it was certified
to receive in the previous year minus the sum of (i) any adjustment under subdivision 13
that was paid in the previous year but has expired, and (ii) the lesser of $10 multiplied by
its population, or five percent of its net levy in the year prior to the aid distribution. No city
may have a total aid amount less than $0 under this paragraph.

(c) If a city's aid distribution under paragraph (b) is equal to $0, the city is eligible for
an alternative aid distribution under subdivision 15.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year 2022
and thereafter.

Sec. 3.

Minnesota Statutes 2020, section 477A.013, is amended by adding a subdivision
to read:

Subd. 15.

Alternative per capita aid.

(a) Beginning in calendar year 2021 and thereafter,
if a city's certified aid under subdivision 9 is $0 it shall receive an aid payment under this
subdivision equal to the sum of the following:

(1) a base amount equal to the lesser of $40 multiplied by its population, or $60,000;
and

(2) a formula amount equal to its population multiplied by a per capita amount, where
the per capita amount is set so that the total aid paid under this subdivision is the amount
allocated for alternative aid under section 477A.03, subdivision 2a.

(b) The maximum aid for any city under this subdivision is $200,000.

(c) Beginning with aids payable in 2022 and thereafter, the amounts of $40 and $60,000
in paragraph (a), clause (1), and $200,000 in paragraph (b) shall be increased by a percent
equal to the percent increase in the total limit on city aid under section 477A.03, subdivision
2a, for the payable year that is being calculated compared to the appropriation for aids
payable in 2021.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year 2022
and thereafter.

Sec. 4.

Minnesota Statutes 2020, section 477A.013, is amended by adding a subdivision
to read:

Subd. 16.

Final city aid distribution.

For aids payable in 2022 and thereafter, the aid
distribution for a city receiving aid under subdivision 9 is equal to the greater of the amount
it would receive under subdivision 9 or the amount it would receive if it qualified for
alternative aid under subdivision 15. For aids payable in 2022 and thereafter, the aid
distribution for a city that receives zero aid under subdivision 9 is the alternative aid
calculated under subdivision 15.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year 2022
and thereafter.

Sec. 5.

Minnesota Statutes 2020, section 477A.03, subdivision 2a, is amended to read:

Subd. 2a.

Cities.

For aids payable in 2016 and 2017, the total aid paid under section
477A.013, subdivision 9, is $519,398,012. For aids payable in 2018 and 2019, the total aid
paid under section 477A.013, subdivision 9, is $534,398,012. For aids payable in 2020, the
total aid paid under section 477A.013, subdivision 9, is $560,398,012. For aids payable in
2021 and thereafter, the total aid payable under section 477A.013, subdivision 9, is
$564,398,012. For aids payable in 2022 and thereafter, the total aid paid to cities under
section 477A.013, subdivision 16, is $564,990,952. Beginning with aids payable in 2022
and thereafter, two percent of this amount will be paid as alternative aid to cities under
section 477A.03, subdivision 15.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year 2022
and thereafter.