SF 2807

as introduced - 91st Legislature (2019 - 2020) Posted on 04/08/2019 02:29pm

A bill for an act
relating to taxes; local government aids; modifying the city aid program; amending
Minnesota Statutes 2018, 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 2018, section 477A.013, subdivision 8, is amended to read:

Subd. 8.

City formula aid.

(a) For aids payable in 2018 2020 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 2020
and thereafter.

Sec. 2.

Minnesota Statutes 2018, section 477A.013, subdivision 9, is amended to read:

Subd. 9.

Preliminary city aid distribution.

(a) In calendar year 2018 2020 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 2018 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 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 2020
and thereafter.

Sec. 3.

Minnesota Statutes 2018, section 477A.013, is amended by adding a subdivision
to read:

Subd. 15.

Alternative per capita aid.

(a) Beginning in calendar year 2020 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 2021 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 2020.

EFFECTIVE DATE.

This section is effective for aids payable in calendar year 2020
and thereafter.

Sec. 4.

Minnesota Statutes 2018, section 477A.013, is amended by adding a subdivision
to read:

Subd. 16.

Final city aid distribution.

For aids payable in 2020 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 2020 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 2020
and thereafter.

Sec. 5.

Minnesota Statutes 2018, 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 thereafter 2019,
the total aid paid under section 477A.013, subdivision 9, is $534,398,012. For aids payable
in 2020 and thereafter, the total aid paid to cities under section 477A.013, subdivision 16,
is $564,990,952. Beginning with aids payable in 2020 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 2020
and thereafter.