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Minnesota Legislature

Office of the Revisor of Statutes

CHAPTER 477A. Local government aid

Table of Sections
SectionHeadnote
477A.01
477A.011Definitions.
477A.012
477A.0121County criminal justice aid.
477A.0122Family preservation aid.
477A.013Municipal government distributions.
477A.0131Repealed, 1Sp1985 c 14 art 6 s 10
477A.0132Aid reductions to local governments.
477A.014Commissioner's responsibilities.
477A.015Payment dates.
477A.016New taxes prohibited.
477A.017Uniform financial accounting and reporting system.
477A.018Repealed, 1989 c 277 art 1 s 35
477A.019Repealed, 1989 c 277 art 1 s 35
477A.02Expired
477A.03Appropriation.
477A.04Repealed, 1985 c 300 s 30
477A.05Local performance aid.
477A.06Existing low-income housing aid.
477A.065New construction low-income housing aid.
477A.11Natural resources lands, payments in lieu; definitions.
477A.12Annual appropriations; lands eligible; certification of acreage.
477A.13Time of payment, deductions.
477A.14Use of funds.
477A.15Taconite aid reimbursement.

477A.01 Subdivision 1. Repealed, 1Sp1981 c 1 art 6 s 9

Subd. 2. Repealed, 1Sp1981 c 1 art 6 s 9

Subd. 3. Repealed, 1979 c 303 art 6 s 11; 1Sp1981 c 1 art 6 s 9

Subd. 4. Repealed, 1Sp1981 c 1 art 6 s 9

Subd. 4a. Repealed, 1979 c 303 art 6 s 11; 1Sp1981 c 1 art 6 s 9

Subd. 4b. Repealed, 1Sp1981 c 1 art 6 s 9

Subd. 4c. Repealed, 1Sp1981 c 1 art 6 s 9

Subd. 4d. Repealed, 1Sp1981 c 1 art 6 s 9

Subd. 4e. Repealed, 1Sp1981 c 1 art 6 s 9

Subd. 5. Repealed, 1975 c 437 art 3 s 8; 1Sp1981 c 1 art 6 s 9

Subd. 6. Repealed, 1975 c 437 art 3 s 8; 1Sp1981 c 1 art 6 s 9

Subd. 7. Repealed, 1975 c 437 art 3 s 8; 1Sp1981 c 1 art 6 s 9

Subd. 8. Repealed, 1975 c 437 art 3 s 8; 1Sp1981 c 1 art 6 s 9

Subd. 9. Repealed, 1975 c 437 art 3 s 8; 1Sp1981 c 1 art 6 s 9

Subd. 10. Repealed, 1975 c 437 art 3 s 8; 1Sp1981 c 1 art 6 s 9

Subd. 11. Repealed, 1975 c 437 art 3 s 8; 1Sp1981 c 1 art 6 s 9

Subd. 12. Repealed, 1973 c 650 art 17 s 17; 1Sp 1981 c 1 art 6 s 9

Subd. 13. Repealed, 1975 c 437 art 3 s 8; 1Sp1981 c 1 art 6 s 9

Subd. 14. Repealed, 1975 c 437 art 3 s 8; 1Sp1981 c 1 art 6 s 9

Subd. 15. Repealed, 1973 c 650 art 17 s 17; 1Sp 1981 c 1 art 6 s 9

Subd. 16. Repealed, 1975 c 437 art 3 s 8; 1Sp1981 c 1 art 6 s 9

Subd. 17. Repealed, 1975 c 437 art 3 s 8; 1Sp1981 c 1 art 6 s 9

Subd. 18. Repealed, 1Sp1981 c 1 art 6 s 9

477A.011 Definitions.

Subdivision 1. Application. For the purposes of sections 477A.011 to 477A.014 the following terms shall have these meanings, unless otherwise provided to the contrary.

Subd. 1a. City. "City" means a statutory or home rule charter city.

Subd. 1b. Town. "Town" means a township.

Subd. 2. Repealed, 1996 c 310 s 1

Subd. 2a. Special taxing district. "Special taxing district" means a political subdivision with the authority to levy property taxes, other than a city, county, town, or school district.

Subd. 3. Population. "Population" means the population established as of July 1 in an aid calculation year by the most recent federal census, by a special census conducted under contract with the United States Bureau of the Census, by a population estimate made by the metropolitan council, or by a population estimate of the state demographer made pursuant to section 4A.02, whichever is the most recent as to the stated date of the count or estimate for the preceding calendar year. The term "per capita" refers to population as defined by this subdivision.

Subd. 3a. Repealed, 1993 c 375 art 4 s 21

Subd. 4. Repealed, 1988 c 719 art 5 s 81

Subd. 5. Repealed, 1988 c 719 art 5 s 81

Subd. 6. Repealed, 1988 c 719 art 5 s 81

Subd. 7. Repealed, 1988 c 719 art 5 s 81

Subd. 7a. Repealed, 1988 c 719 art 5 s 81

Subd. 8. Repealed, 1983 c 342 art 5 s 16

Subd. 9. Repealed, 1983 c 342 art 5 s 16

Subd. 10. Repealed, 1988 c 719 art 5 s 81

Subd. 11. Repealed, 1988 c 719 art 5 s 81

Subd. 12. Repealed, 1988 c 719 art 5 s 81

Subd. 13. Repealed, 1988 c 719 art 5 s 81

Subd. 14. Repealed, 1988 c 719 art 5 s 81

Subd. 15. Repealed, 1993 c 375 art 4 s 21

Subd. 16. Repealed, 1993 c 375 art 4 s 21

Subd. 17. Repealed, 1993 c 375 art 4 s 21

Subd. 18. Repealed, 1993 c 375 art 4 s 21

Subd. 19. Metropolitan area. "Metropolitan area" is the metropolitan area as defined in section 473.121, subdivision 2.

Subd. 20. City net tax capacity. "City net tax capacity" means (1) the net tax capacity computed using the net tax capacity rates in section 273.13, and the market values for taxes payable in the year prior to the aid distribution plus (2) a city's fiscal disparities distribution tax capacity under section 276A.06, subdivision 2, paragraph (b), or 473F.08, subdivision 2, paragraph (b), for taxes payable in the year prior to that for which aids are being calculated. The market value utilized in computing city net tax capacity shall be reduced by the sum of (1) a city's market value of commercial industrial property as defined in section 276A.01, subdivision 3, or 473F.02, subdivision 3, multiplied by the ratio determined pursuant to section 276A.06, subdivision 2, paragraph (a), or 473F.08, subdivision 2, paragraph (a), (2) the market value of the captured value of tax increment financing districts as defined in section 469.177, subdivision 2, and (3) the market value of transmission lines deducted from a city's total net tax capacity under section 273.425. The city net tax capacity will be computed using equalized market values.

Subd. 21. Equalized market values. "Equalized market values" are equalized market values as defined in section 273.1398, subdivision 1.

Subd. 22. Repealed, 1993 c 375 art 4 s 21

Subd. 23. Repealed, 1993 c 375 art 4 s 21

Subd. 24. Repealed, 1Sp1989 c 1 art 4 s 15

Subd. 25. Repealed, 1993 c 375 art 4 s 21

Subd. 26. Repealed, 1993 c 375 art 4 s 21

Subd. 27. Revenue base. "Revenue base" means the amount levied for taxes payable in the previous year, including the levy on the fiscal disparity distribution under section 276A.06, subdivision 3, paragraph (a), or 473F.08, subdivision 3, paragraph (a), and before reduction for the homestead and agricultural credit aid under section 273.1398, subdivision 2, equalization aid under section 477A.013, subdivision 5, and disparity reduction aid under section 273.1398, subdivision 3; plus the originally certified local government aid in the previous year under sections 477A.011 and 477A.013; and the taconite aids received in the previous year under sections 298.28 and 298.282.

Subd. 28. Reduction percentage. "Reduction percentage" means the equal percentage reduction in each affected local government's reduction base that is estimated to be necessary to reduce the aid payments to those local governments by the amounts specified under section 477A.0132.

Subd. 29. Adjusted revenue base. "Adjusted revenue base" means revenue base as defined in subdivision 27 less the levy reported under section 275.62, subdivision 1, clause (2).

Subd. 30. Pre-1940 housing percentage. "Pre-1940 housing percentage" for a city is 100 times the most recent federal census count of all housing units in the city built before 1940, divided by the total number of all housing units in the city. Housing units includes both occupied and vacant housing units as defined by the federal census.

Subd. 31. Population decline percentage. "Population decline percentage" for a city is the percent decline in a city's population for the last ten years, based on the most recently available population estimate from the state demographer or a federal census. A city's population decline percentage cannot be less than zero.

Subd. 32. Commercial industrial percentage. "Commercial industrial percentage" for a city is 100 times the sum of the estimated market values of all real property in the city classified as class 3 under section 273.13, subdivision 24, excluding public utility property, to the total market value of all taxable real and personal property in the city. The market values are the amounts computed before any adjustments for fiscal disparities under section 276A.06 or 473F.08. The market values used for this subdivision are not equalized.

Subd. 33. Transformed population. "Transformed population" for a city is the city population raised to the .3308 power, times 30.5485.

Subd. 34. City revenue need. (a) For a city with a population equal to or greater than 2,500, "city revenue need" is the sum of (1) 3.462312 times the pre-1940 housing percentage; plus (2) 2.093826 times the commercial industrial percentage; plus (3) 6.862552 times the population decline percentage; plus (4) .00026 times the city population; plus (5) 152.0141.

(b) For a city with a population less than 2,500, "city revenue need" is the sum of (1) 1.795919 times the pre-1940 housing percentage; plus (2) 1.562138 times the commercial industrial percentage; plus (3) 4.177568 times the population decline percentage; plus (4) 1.04013 times the transformed population; minus (5) 107.475.

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

(d) For calendar year 1998 and subsequent years, the city revenue need for a city, as determined in paragraphs (a) to (c), 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 1993 implicit price deflator for state and local government purchases.

Subd. 35. Tax effort rate. "Tax effort rate" means the sum of the net levy for all cities divided by the sum of the city net tax capacity for all cities. For purposes of this section, "net levy" means the city levy, after all adjustments, used for calculating the local tax rate under section 275.08 for taxes payable in the year prior to the aid distribution. The fiscal disparity distribution levy under chapter 276A or 473F is included in net levy.

Subd. 36. City aid base. (a) Except as provided in paragraphs (b), (c), and (d), "city aid base" means, for each city, the sum of the local government aid and equalization aid it was originally certified to receive in calendar year 1993 under Minnesota Statutes 1992, section 477A.013, subdivisions 3 and 5, and the amount of disparity reduction aid it received in calendar year 1993 under Minnesota Statutes 1992, section 273.1398, subdivision 3.

(b) For aids payable in 1996 and thereafter, a city that in 1992 or 1993 transferred an amount from governmental funds to its sewer and water fund, which amount exceeded its net levy for taxes payable in the year in which the transfer occurred, has a "city aid base" equal to the sum of (i) its city aid base, as calculated under paragraph (a), and (ii) one-half of the difference between its city aid distribution under section 477A.013, subdivision 9, for aids payable in 1995 and its city aid base for aids payable in 1995.

(c) The city aid base for any city with a population less than 500 is increased by $40,000 for aids payable in calendar year 1995 and thereafter, and the maximum amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also increased by $40,000 for aids payable in calendar year 1995 only, provided that:

(i) the average total tax capacity rate for taxes payable in 1995 exceeds 200 percent;

(ii) the city portion of the tax capacity rate exceeds 100 percent; and

(iii) its city aid base is less than $60 per capita.

(d) The city aid base for a city is increased by $20,000 in 1998 and thereafter and the maximum amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also increased by $20,000 in calendar year 1998 only, provided that:

(i) the city has a population in 1994 of 2,500 or more;

(ii) the city is located in a county, outside of the metropolitan area, which contains a city of the first class;

(iii) the city's net tax capacity used in calculating its 1996 aid under section 477A.013 is less than $400 per capita; and

(iv) at least four percent of the total net tax capacity, for taxes payable in 1996, of property located in the city is classified as railroad property.

(e) The city aid base for a city is increased by $200,000 in 1999 and thereafter and the maximum amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also increased by $200,000 in calendar year 1999 only, provided that:

(i) the city was incorporated as a statutory city after December 1, 1993;

(ii) its city aid base does not exceed $5,600; and

(iii) the city had a population in 1996 of 5,000 or more.

(f) The city aid base for a city is increased by $450,000 in 1999 to 2008 and the maximum amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also increased by $450,000 in calendar year 1999 only, provided that:

(i) the city had a population in 1996 of at least 50,000;

(ii) its population had increased by at least 40 percent in the ten-year period ending in 1996; and

(iii) its city's net tax capacity for aids payable in 1998 is less than $700 per capita.

(g) Beginning in 2002, the city aid base for a city is equal to the sum of its city aid base in 2001 and the amount of additional aid it was certified to receive under section 477A.06 in 2001. For 2002 only, the maximum amount of total aid a city may receive under section 477A.013, subdivision 9, paragraph (c), is also increased by the amount it was certified to receive under section 477A.06 in 2001.

Subd. 37. Base reduction percentage. "Base reduction percentage" is (1) the difference between the amount available for city aid under section 477A.03 for the year for which aid is being calculated and the amount available for city aid under section 477A.03 for calendar year 1994, (2) divided by the sum of the city aid base for all cities and (3) multiplied by 100. The reduction percentage for any year may not be less than the reduction percentage from the previous year. For aid paid in calendar year 1994, the reduction percentage is zero. The reduction percentage may not be more than 100 percent.

HIST: 1981 c 356 s 248; 1981 c 358 art 1 s 48; 1Sp1981 c 1 art 6 s 1; 1983 c 289 s 114 subd 2; 1983 c 342 art 5 s 5-9; 1984 c 558 art 4 s 10; 1Sp1985 c 14 art 6 s 1-6; 1Sp1986 c 1 art 6 s 1,2; 1987 c 291 s 240; 1988 c 719 art 5 s 66-75; 1989 c 277 art 2 s 66; 1Sp1989 c 1 art 4 s 3-6; art 9 s 79,80; 1990 c 480 art 7 s 28,29; 1990 c 604 art 4 s 6-9; 1991 c 2 art 8 s 1-3; 1991 c 291 art 3 s 5-7; 1991 c 345 art 2 s 64,65; 1992 c 511 art 5 s 16,17; 1993 c 375 art 4 s 8-17; 1994 c 416 art 1 s 57; 1995 c 264 art 8 s 13; 1996 c 471 art 3 s 44; art 11 s 16-19; 1997 c 231 art 2 s 49,69; 1998 c 254 art 1 s 94,95; 1998 c 389 art 4 s 7

477A.012 Subdivision 1. Repealed, 1996 c 310 s 1

Subd. 2. Repealed, 1996 c 310 s 1

Subd. 3. Repealed, 1996 c 310 s 1

Subd. 4. Repealed, 1996 c 310 s 1

Subd. 5. Repealed, 1991 c 291 art 3 s 15

Subd. 6. Repealed, 1994 c 587 art 3 s 21

Subd. 7. Repealed, 1996 c 310 s 1

Subd. 8. Repealed, 1996 c 310 s 1

477A.0121 County criminal justice aid.

Subdivision 1. Purpose. County criminal justice aid is intended to reduce the reliance of county criminal justice and corrections programs and associated costs on local property taxes.

County criminal justice aids must be used to pay expenses associated with criminal justice activities including law enforcement, criminal adjudication, and corrections.

Subd. 2. Definitions. For the purposes of this section, the following definitions apply:

(1) "population" means the population according to the most recent federal census, or according to the state demographer's most recent estimate if it has been issued subsequent to the most recent federal census; and

(2) "Part I crimes" means the total number of Part I crimes reported for each county by the department of public safety for the most recent year available. By July 1 of each year the commissioner of public safety shall certify to the commissioner of revenue the number of Part I crimes reported for each county.

Subd. 3. Formula. Each calendar year, the commissioner of revenue shall distribute county criminal justice aid to each county in an amount determined according to the following formula:

(1) one-half shall be distributed to each county in the same proportion that the county's population is to the population of all counties in the state; and

(2) one-half shall be distributed to each county in the same proportion that the county's Part I crimes are to the total Part I crimes for all counties in the state.

Subd. 4. Public defender costs. Each calendar year, 1.5 percent of the total appropriation for this section shall be retained by the commissioner of revenue to make reimbursements to the commissioner of finance for payments made under section 611.27. The reimbursements shall be to defray the additional costs associated with court-ordered counsel under section 611.27. Any retained amounts not used for reimbursement in a year shall be included in the next distribution of county criminal justice aid that is certified to the county auditors for the purpose of property tax reduction for the next taxes payable year.

Subd. 5. Payment dates. The aid amounts for each calendar year shall be paid as provided in section 477A.015.

Subd. 6. Report. By March 15 of each year following the year in which criminal justice aids are received, each county must file a report with the commissioner of revenue describing how criminal justice aids were spent, and demonstrating that they were used for criminal justice purposes.

HIST: 1992 c 511 art 1 s 14; 1994 c 416 art 1 s 58; 1995 c 264 art 8 s 14; 1996 c 471 art 3 s 45

477A.0122 Family preservation aid.

Subdivision 1. Purpose. The purpose of family preservation aid is to reduce the rate of increase in the costs of out-of-home placement of children and concomitant increases in county property taxes. Aids paid under this section must be used to fund family preservation programs.

Subd. 2. Definitions. For purposes of this section, the following definitions apply:

(a) "Children in out-of-home placement" means the total unduplicated number of children in out-of-home care as reported according to section 257.0725.

(b) "Family preservation programs" means family-based services as defined in section 256F.03, subdivision 5, families first services, parent and child education programs, and day treatment services provided in cooperation with a school district or other programs as defined by the commissioner of human services.

(c) "Income maintenance caseload" means average monthly number of AFDC or Minnesota family investment program-statewide cases for the calendar year.

By July 1, 1994, the commissioner of human services shall certify to the commissioner of revenue the number of children in out-of-home placement in 1991 and 1992 for each county and the income maintenance caseload for each county for the most recent year available. By July 1 of each subsequent year, the commissioner of human services shall certify to the commissioner of revenue the income maintenance caseload for each county for the most recent calendar year available.

Subd. 3. Aid distribution; calendar year 1995. For aid paid in calendar year 1995 only, one-half of the aid amount shall be paid to each county in the same proportion that the county's number of children in out-of-home placement is to the number of children in out-of-home placement for all counties within the state for 1991 and 1992, and one-half of the aid amount shall be paid to each county in the same proportion that the county's income maintenance caseload is to the income maintenance caseload for all counties within the state.

Subd. 4. Aid distribution; calendar year 1996 and thereafter. For aid paid in calendar year 1996 and thereafter, each county shall receive the same proportion of the total aid it received in the prior year, multiplied by one plus the percentage change in the county's share of the statewide income maintenance caseload. If the amount appropriated does not equal the aid amounts calculated under this subdivision, the commissioner of revenue shall proportionately reduce or increase the aid amounts so that their sum equals the amount appropriated.

Subd. 5. Payment. The commissioner of revenue shall pay the amounts determined under this section as provided in section 477A.015.

Subd. 6. Report. (a) On or before March 15 of the year following the year in which the distributions under this section are received, each county shall file with the commissioner of revenue and commissioner of human services a report on prior year expenditures for out-of-home placement and family preservation, including expenditures under this section. For the human services programs specified in this section, the commissioner of revenue and commissioner of human services, in consultation with representatives of county governments, shall make a recommendation to the 1999 legislature as to which current reporting requirements imposed on county governments, if any, may be eliminated, replaced, or consolidated on the report established by this section. For aid payable in calendar year 2000 and thereafter, each county shall provide information on the amount of state aid, local property tax revenue, and federal aid expended by that county on the programs specified in this section using the consolidated financial report recommended by the commissioner of revenue and commissioner of human services under this subdivision.

(b) The commissioner of revenue and the commissioner of human services, in consultation with representatives of county governments and children's advocacy representatives, shall study the current formula used in distributing aid under this section and factors related to out-of-home placement and family preservation expenditures and make a report to the house and senate tax committees by February 1, 1999. The report shall include a recommendation for a new formula to be used in distributing the aid under this section, beginning with aids payable in 2000.

HIST: 1994 c 587 art 3 s 13; 1995 c 186 s 119; 1997 c 85 art 4 s 36; 1998 c 389 art 2 s 20

477A.013 Municipal government distributions.

Subdivision 1. Towns. In 1994 each town that had levied for taxes payable in the prior year a local tax rate of at least .008 shall receive a distribution equal to the amount it received in 1993 under this section before any nonpermanent reductions made under section 477A.0132. In 1995 each town that had levied for taxes payable in 1993 a local tax rate of at least .008 shall receive a distribution equal to 102 percent of the amount it received in 1994 under this section before any increases or reductions under sections 16A.711, subdivision 5, and 477A.0132. In 1996 and subsequent years each town that had levied for taxes payable in 1993 a local tax rate of at least .008 shall receive a distribution equal to the amount it received in the previous year under this section, adjusted for inflation as provided under section 477A.03, subdivision 3.

Subd. 2. Repealed, 1993 c 375 art 4 s 21

Subd. 3. Repealed, 1993 c 375 art 4 s 21

Subd. 4. Repealed, 1Sp1989 c 1 art 4 s 15

Subd. 5. Repealed, 1993 c 375 art 4 s 21

Subd. 6. Repealed, 1996 c 310 s 1

Subd. 7. Repealed, 1991 c 291 art 3 s 15

Subd. 8. City formula aid. In calendar year 1994 and subsequent years, the formula aid for a city is equal to the need increase percentage multiplied by the difference between (1) the city's revenue need multiplied by its population, and (2) the city's net tax capacity multiplied by the tax effort rate. No city may have a formula aid amount less than zero. The need increase percentage must be the same for all cities.

Notwithstanding the prior sentence, in 1995 only, the need increase percentage for a city shall be twice the need increase percentage applicable to other cities if:

(1) the city, in 1992 or 1993, transferred an amount from governmental funds to their sewer and water fund, and

(2) the amount transferred exceeded their net levy for taxes payable in the year in which the transfer occurred.

The applicable need increase percentage or percentages must be calculated by the department of revenue so that the total of the aid under subdivision 9 equals the total amount available for aid under section 477A.03.

Subd. 9. City aid distribution. (a) In calendar year 1994 and thereafter, each city shall receive an aid distribution equal to the sum of (1) the city formula aid under subdivision 8, and (2) its city aid base.

(b) The percentage increase for a first class city in calendar year 1995 and thereafter shall not exceed the percentage increase in the sum of the aid to all cities under this section in the current calendar year compared to the sum of the aid to all cities in the previous year.

(c) The total aid for any city, except a first class city, shall not exceed the sum of (1) ten percent of the city's net levy for the year prior to the aid distribution plus (2) its total aid in the previous year before any increases or decreases under sections 16A.711, subdivision 5, and 477A.0132.

(d) Notwithstanding paragraph (c), in 1995 only, for cities which in 1992 or 1993 transferred an amount from governmental funds to their sewer and water fund in an amount greater than their net levy for taxes payable in the year in which the transfer occurred, the total aid shall not exceed the sum of (1) 20 percent of the city's net levy for the year prior to the aid distribution plus (2) its total aid in the previous year before any increases or decreases under sections 16A.711, subdivision 5, and 477A.0132.

HIST: 1Sp1981 c 1 art 6 s 3; 1983 c 342 art 5 s 11; 1984 c 502 art 4 s 3,4; 1Sp1985 c 14 art 6 s 8; 1Sp1986 c 1 art 6 s 4; 1987 c 268 art 5 s 11; 1988 c 719 art 5 s 76-79,84; 1989 c 277 art 2 s 67; 1Sp1989 c 1 art 2 s 11; art 4 s 9-12; 1990 c 480 art 7 s 31; 1990 c 604 art 3 s 43; art 4 s 12-14; 1991 c 2 art 8 s 6,7; 1991 c 291 art 3 s 9,10; 1992 c 511 art 1 s 15-17; 1993 c 375 art 3 s 45; art 4 s 18,19; 1Sp1993 c 6 s 32; 1994 c 416 art 1 s 59; 1994 c 587 art 3 s 14-16

477A.0131 Repealed, 1Sp1985 c 14 art 6 s 10

477A.0132 Aid reductions to local governments.

Subdivision 1. Affected local governments. The following reductions shall be made in aids paid to the following local units of government:

(a) For aids payable in 1996, there shall be a nonpermanent reduction in aids to counties, cities, towns, and special taxing districts of $16,000,000, provided that Laws 1995, chapter 264, article 8, section 25, subdivision 1, is enacted; otherwise the reduction is $14,000,000.

(b) Aid reductions required under section 16A.711, subdivision 5, shall be nonpermanent reductions in aids to counties, cities, towns, and special taxing districts equal to the difference between the aid amounts certified to be paid and the amount of the appropriation to pay the aids.

(c) For aids payable in 1996 there shall be a permanent reduction in aids to counties of $10,000,000, provided that Laws 1995, chapter 264, article 8, section 16, is enacted.

(d) For aids payable in 1997 there shall be a permanent reduction in aids to county regional rail authorities and counties of $6,800,000, provided that Laws 1996, chapter 471, article 3, section 45, is enacted.

Subd. 2. Calculation of aid reduction. The aid reduction to each local government as provided under subdivision 1 will be equal to the product of the reduction percentage and its reduction base. The reduction base is defined as the following:

(a) For subdivision 1, paragraph (a), the reduction base is equal to the adjusted revenue base for 1996.

(b) For subdivision 1, paragraph (b), the reduction base is equal to the adjusted revenue base for the year in which the aid payment is to be made.

(c) For subdivision 1, paragraph (c), the reduction base is a county's aid in calendar year 1996 under section 477A.0121.

(d) For subdivision 1, paragraph (d), the reduction base is a county's aid in calendar year 1997 under section 477A.0121.

Reductions under subdivisions 1, paragraph (a), and 2, paragraph (a), to any individual county, city, or town are limited to an amount equal to 0.45 percent of the unit's 1994 adjusted net tax capacity. For this subdivision, "adjusted net tax capacity" means the political subdivision's net tax capacity calculated using the method for calculating city net tax capacity under section 477A.011, subdivision 20.

Subd. 3. Order of aid reductions. (a) The aid reduction to a local government calculated under subdivisions 1, paragraphs (a) and (c), and 2, paragraphs (a) and (c), is applied to homestead and agricultural credit aid under section 273.1398 only.

(b) The aid reduction to a local government calculated under subdivisions 1, paragraph (d), and 2, paragraph (d), is applied to homestead and agricultural credit aid paid under section 273.1398 only; the amount is first subtracted from the amount paid to a county's regional rail authority, if there is one, and then from the county's general homestead and agricultural credit aid.

(c) The aid reduction to a local government as calculated under other paragraphs of subdivisions 1 and 2, is first applied to its local government aid under section 477A.013; then if necessary, to its homestead and agricultural credit aid under section 273.1398, subdivision 2; and then, if necessary, to its disparity reduction aid under section 273.1398, subdivision 3. No aid payment may be less than $0. Aid reductions under this section in any given year shall be divided equally between the July and December aid payments unless specified otherwise.

HIST: 1991 c 291 art 3 s 11; 1992 c 511 art 1 s 18; 1994 c 416 art 1 s 60; 1994 c 587 art 3 s 21; 1995 c 264 art 8 s 15,17; 1996 c 471 art 3 s 46; 1998 c 254 art 1 s 96

477A.014 Commissioner's responsibilities.

Subdivision 1. Calculations and payments. The commissioner of revenue shall make all necessary calculations and make payments pursuant to sections 477A.013, 477A.0132, and 477A.03 directly to the affected taxing authorities annually. In addition, the commissioner shall notify the authorities of their aid amounts, as well as the computational factors used in making the calculations for their authority, and those statewide total figures that are pertinent, before August 1 of the year preceding the aid distribution year. For the purposes of this subdivision, aid is determined for a city or town based on its city or town status as of June 30 of the year preceding the aid distribution year. If the effective date for a municipal incorporation, consolidation, annexation, detachment, dissolution, or township organization is on or before June 30 of the year preceding the aid distribution year, such change in boundaries or form of government shall be recognized for aid determinations for the aid distribution year. If the effective date for a municipal incorporation, consolidation, annexation, detachment, dissolution, or township organization is after June 30 of the year preceding the aid distribution year, such change in boundaries or form of government shall not be recognized for aid determinations until the following year.

Subd. 1a. Repealed, 1996 c 310 s 1

Subd. 2. Errors. A taxing authority may object to the commissioner of revenue with respect to the amount of the distribution it has been certified to receive pursuant to subdivision 1. No objection shall be raised later than 60 days after the taxing authority has received notice from the commissioner of the amount which it has been certified to receive.

Subd. 3. Aid amount correction. If, due to an error in the factors used to calculate a taxing authority's aid pursuant to section 477A.013 the amount indicated in the certification of the commissioner to the taxing authority for a year is less than the amount to which it is entitled pursuant to this section, the commissioner of revenue shall additionally distribute the amount necessary to make the full correct distribution to the taxing authority. The additional distribution shall be paid from the general fund and shall not diminish the distributions made to other taxing authorities under this section.

Subd. 4. Costs. The director of the office of strategic and long-range planning shall annually bill the commissioner of revenue for one-half of the costs incurred by the state demographer in the preparation of materials required by section 4A.02. The state auditor shall bill the commissioner of revenue for the costs of the services provided by the government information division and the parts of the constitutional office that are related to the government information function, not to exceed $217,000 in fiscal year 1992 and $217,000 in fiscal year 1993 and thereafter. The commissioner of administration shall bill the commissioner of revenue for the costs of the local government records program and the intergovernmental information systems activity, not to exceed $201,100 in fiscal year 1992 and $205,800 in fiscal year 1993 and thereafter. The commissioner of employee relations shall bill the commissioner of revenue for the costs of administering the local government pay equity function, not to exceed $56,000 in fiscal year 1992 and $55,000 in fiscal year 1993 and thereafter.

Subd. 5. Deduction from aid payments. The commissioner of revenue shall deduct the amounts certified under subdivision 4 from the aid payments to be made to appropriate local units of government in the next aid payment year.

HIST: 1Sp1981 c 1 art 6 s 4; 1983 c 342 art 5 s 13; 1Sp1985 c 13 s 359; 1987 c 186 s 15; 1Sp1989 c 1 art 4 s 13; 1991 c 2 art 8 s 10; 1991 c 291 art 1 s 50,51; art 3 s 12,13; art 12 s 27; 1991 c 345 art 2 s 66; 1992 c 511 art 1 s 25; 1994 c 416 art 1 s 61; 1994 c 587 art 3 s 17; 1998 c 254 art 1 s 97,98

477A.015 Payment dates.

The commissioner of revenue shall make the payments of local government aid to affected taxing authorities in two installments on July 20 and December 26 annually.

The commissioner may pay all or part of the payment due on December 26 at any time after August 15 upon the request of a city that requests such payment as being necessary for meeting its cash flow needs.

HIST: 1Sp1981 c 3 s 11; 1Sp1986 c 1 art 6 s 5; 1988 c 719 art 6 s 18; 1992 c 603 s 15

477A.016 New taxes prohibited.

No county, city, town or other taxing authority shall increase a present tax or impose a new tax on sales or income.

HIST: 1Sp1981 c 1 art 6 s 5

477A.017 Uniform financial accounting and reporting system.

Subdivision 1. Purpose. Sections 477A.011 to 477A.03 are designed to provide property tax relief to local units of government. In order for the legislature to determine the amounts of relief necessary each year, the legislature must have uniform and current financial information from the governmental units which receive aid distributions. This section is intended to provide that information.

Subd. 2. State auditor's duties. The state auditor shall prescribe uniform financial accounting and reporting standards in conformity with national standards to be applicable to cities and towns of more than 2,500 population and uniform reporting standards to be applicable to cities of less than 2,500 population.

Subd. 3. Conformity. Other law to the contrary notwithstanding, in order to receive distributions under sections 477A.011 to 477A.03, counties and cities must conform to the standards set in subdivision 2 in making all financial reports required to be made to the state auditor after June 30, 1984.

HIST: 1983 c 342 art 5 s 14; 1992 c 592 s 15

477A.018 Repealed, 1989 c 277 art 1 s 35

477A.019 Repealed, 1989 c 277 art 1 s 35

477A.02 Expired

477A.03 Appropriation.

Subdivision 1. Repealed, 1994 c 587 art 3 s 21

Subd. 2. MS 1983 Supp Repealed, 1984 c 502 art 4 s 8

Subd. 2. Annual appropriation. (a) A sum sufficient to discharge the duties imposed by sections 477A.011 to 477A.014 is annually appropriated from the general fund to the commissioner of revenue.

(b) Aid payments to counties under section 477A.0121 are limited to $20,265,000 in 1996. Aid payments to counties under section 477A.0121 are limited to $27,571,625 in 1997. For aid payable in 1998 and thereafter, the total aids paid under section 477A.0121 are the amounts certified to be paid in the previous year, adjusted for inflation as provided under subdivision 3.

(c)(i) For aids payable in 1998 and thereafter, the total aids paid to counties under section 477A.0122 are the amounts certified to be paid in the previous year, adjusted for inflation as provided under subdivision 3.

(ii) Aid payments to counties under section 477A.0122 in 2000 are further increased by an additional $30,000,000 in 2000.

(d) Aid payments to cities in 1999 under section 477A.013, subdivision 9, are limited to $380,565,489. For aids payable in 2000 and 2001, the total aids paid under section 477A.013, subdivision 9, are the amounts certified to be paid in the previous year, adjusted for inflation as provided under subdivision 3. For aids payable in 2002, the total aids paid under section 477A.013, subdivision 9, are the amounts certified to be paid in the previous year, adjusted for inflation as provided under subdivision 3, and increased by the amount certified to be paid in 2001 under section 477A.06. For aids payable in 2003 and thereafter, the total aids paid under section 477A.013, subdivision 9, are the amounts certified to be paid in the previous year, adjusted for inflation as provided under subdivision 3. The additional amount authorized under subdivision 4 is not included when calculating the appropriation limits under this paragraph.

Subd. 3. Inflation adjustment. In 1996 and thereafter, the amount paid under each section to be adjusted for inflation shall be increased by an amount equal to:

(a) the amount certified to be paid under that section in the previous year multiplied by

(b) one plus the percentage increase in the implicit price deflator for government consumption expenditures and gross investment for state and local governments prepared by the Bureau of Economic Analysis of the United States Department of Commerce for the 12-month period ending March 31 of the previous year. The percentage increase used in this subdivision shall be no less than 2.5 percent and no greater than 5.0 percent.

Subd. 4. Additional money for city aid. For the calendar years 1999 to 2008, the limit on the annual appropriation for aids paid under section 477A.013, subdivision 9, as determined in subdivision 2, paragraph (d), is increased by $450,000.

HIST: 1975 c 437 art 3 s 7; 1977 c 423 art 6 s 12; 1979 c 303 art 6 s 4; 1Sp1981 c 1 art 6 s 6; 3Sp1981 c 2 art 4 s 12; 1983 c 342 art 5 s 15; 1990 c 604 art 4 s 15; 1991 c 291 art 3 s 14; 1992 c 511 art 1 s 19; 1993 c 375 art 4 s 20; 1994 c 587 art 3 s 18; 1995 c 264 art 8 s 16; 1996 c 471 art 3 s 47; 1997 c 231 art 2 s 69; 1998 c 389 art 4 s 8,9

477A.04 Repealed, 1985 c 300 s 30

477A.05 Local performance aid.

Subdivision 1. Qualification. By May 25 of each year, the commissioner shall send a local performance aid qualification form to each county and city in the state. Jurisdictions that are eligible to receive the aid must return the completed form by June 30 in order to receive aid in the following calendar year. For each determinator specified in subdivision 2, the form shall have a space for the jurisdiction to indicate that it has satisfied the conditions of the determinator. For counties, the form must be signed by the chair of the county board. For cities, the form must be signed by the mayor, if the city has a mayor, and the chair of the city council. Applications may be filed jointly by jurisdictions planning to spend the aid jointly.

Subd. 2. Eligibility determinator. For calendar year 1998 and subsequent calendar years, a jurisdiction is eligible to receive local performance aid if the jurisdiction affirms that (1) the aid will result in a reduction in property taxes at least equal to the amount of aid received, and (2) the jurisdiction will spend the aid on programs for which it has developed a system of performance measures and that these measures will allow for the measurement of continuous improvement and will be regularly compiled and presented to the county board or the city council at least once a year. The jurisdiction must identify the program or programs that are to be funded with the aid. A jurisdiction is eligible for aid if it affirms that it is in the process of developing and implementing a system of performance measures for the program or programs for which the aid is being sought; however, aid amounts under this section may not be spent on the program or programs until the performance measurement system has been instituted, unless the aid is being used to establish the performance measurement system.

Subd. 3. Determination of aid amount. The commissioner shall sum the populations of all jurisdictions that have met the conditions specified in subdivision 2. The commissioner shall determine a per capita aid amount by dividing the aggregate aid available under subdivision 5 by the sum of the populations for all qualifying jurisdictions, separately for counties and cities. Each jurisdiction shall then be eligible for aid equal to the jurisdictions's population times the per capita aid amount. For purposes of this subdivision, population means the most recent population established under section 477A.011, subdivision 3, in the year in which the aid is determined.

Subd. 4. Notification and payment. Jurisdictions shall be notified of their aid under this section at the same time as the notification for aid under section 477A.014, subdivision 1. Payments of aid under this section shall be made on the dates prescribed in section 477A.015.

Subd. 5. Appropriation. (a) For payments to counties under this section, there is annually appropriated from the general fund to the commissioner of revenue an amount equal to the sum of $558,625 plus the amount by which county aids were reduced under Laws 1996, chapter 471, article 3, section 49, adjusted for inflation as provided under section 477A.03, subdivision 3. For payments to cities under this section, there is annually appropriated from the general fund to the commissioner of revenue an amount equal to the sum of $441,735 plus the amount by which city aids were reduced under Laws 1996, chapter 471, article 3, section 49, adjusted for inflation as provided under section 477A.03, subdivision 3.

(b) For aids payable in 1998 under this section, an additional amount of $560,000 for counties and $440,000 for cities is appropriated from the general fund to the commissioner of revenue.

HIST: 1996 c 471 art 3 s 48; 1997 c 231 art 11 s 7

477A.06 Existing low-income housing aid.

Subdivision 1. Eligibility. (a) For assessment years 1998, 1999, and 2000, for all class 4d property on which construction was begun before January 1, 1999, the assessor shall determine the difference between the actual net tax capacity and the net tax capacity that would be determined for the property if the class rates for assessment year 1997 were in effect.

(b) In calendar years 1999, 2000, and 2001, each city shall be eligible for aid equal to (i) the amount by which the sum of the differences determined in clause (a) for the corresponding assessment year exceeds 2.5 percent of the city's total taxable net tax capacity for taxes payable in 1998, multiplied by (ii) the city government's average local tax rate for taxes payable in 1998.

Subd. 2. Certification. The county assessor shall notify the commissioner of revenue of the amount determined under subdivision 1, paragraph (b), clause (i), for any city which qualifies for aid under this section by June 30 of the assessment year, in a form prescribed by the commissioner. The commissioner shall notify each city of its qualifying aid amount by August 15 of the assessment year.

Subd. 3. Appropriation; payment. (a) The commissioner shall pay each city its qualifying aid amount on or before July 20 of each year. An amount sufficient to pay the aid authorized under this section is appropriated to the commissioner of revenue from the property tax reform account in fiscal years 2000 and 2001, and from the general fund in fiscal year 2002.

(b) For fiscal years 2001 and 2002, the amount of aid appropriated under this section may not exceed $1,500,000 each year.

(c) If the total amount of aid that would otherwise be payable under the formula in this section exceeds the maximum allowed under paragraph (b), the amount of aid for each city is reduced proportionately to equal the limit.

HIST: 1998 c 389 art 4 s 10

477A.065 New construction low-income housing aid.

Subdivision 1. Eligibility. Each taxes payable year, each city containing class 4d property on which initial construction was begun after January 1, 1999, shall be eligible for aid equal to (1) 1.5 times the net tax capacity of the property for the assessment year corresponding to the taxes payable year, multiplied by (2) the city government's average local tax rate for the previous taxes payable year.

Subd. 2. Certification. The county assessor shall notify the commissioner of revenue of the amount determined under subdivision 1, clause (1), for any city which qualifies for aid under this section by June 30 of each assessment year, in a form prescribed by the commissioner. The commissioner shall notify each city of its qualifying aid amount by August 15 of the assessment year.

Subd. 3. Appropriation; payment. The commissioner shall pay each city its qualifying aid amount on or before July 20 of each year. An amount sufficient to pay the aid authorized under this section is appropriated to the commissioner of revenue from the general fund each year.

HIST: 1998 c 389 art 4 s 11

* NOTE: This section, as added by Laws 1998, chapter 389, *article 4, section 11, is effective for aids payable in 2001 and *thereafter. Laws 1998, chapter 389, article 4, section 18.

477A.11 Natural resources lands, payments in lieu; definitions.

Subdivision 1. Terms. For the purpose of Laws 1979, Chapter 303, Article 8, Sections 1 to 5, the terms defined in this section have the meanings given them.

Subd. 2. Commissioner. "Commissioner" means the commissioner of natural resources.

Subd. 3. Acquired natural resources land. "Acquired natural resources land" means any land presently administered by the commissioner in which the state acquired by purchase, condemnation, or gift, a fee title interest in lands which were previously privately owned.

Subd. 4. Other natural resources land. "Other natural resources land" means:

(1) any other land presently owned in fee title by the state and administered by the commissioner, or any tax-forfeited land, other than platted lots within a city, which is owned by the state and administered by the commissioner or by the county in which it is located; and

(2) land leased by the state from the United States of America through the United States Secretary of Agriculture pursuant to Title III of the Bankhead Jones Farm Tenant Act, which land is commonly referred to as land utilization project land that is administered by the commissioner.

HIST: 1979 c 303 art 8 s 1; 1990 c 604 art 4 s 16

477A.12 Annual appropriations; lands eligible; certification of acreage.

(a) There is annually appropriated to the commissioner of natural resources from the general fund for payment to counties within the state an amount equal to:

(1) for acquired natural resources land, $3 multiplied by the total number of acres of acquired natural resources land or, beginning July 1, 1996, at the county's option three-fourths of one percent of the appraised value of all acquired natural resources land in the county, whichever is greater;

(2) 75 cents multiplied by the number of acres of county-administered other natural resources land; and

(3) 37.5 cents multiplied by the number of acres of commissioner-administered other natural resources land located in each county as of July 1 of each year.

(b) Lands for which payments in lieu are made pursuant to section 97A.061, subdivision 3, and Laws 1973, chapter 567, shall not be eligible for payments under this section. Each county auditor shall certify to the department of natural resources during July of each year the number of acres of county-administered other natural resources land within the county. The department of natural resources may, in addition to the certification of acreage, require descriptive lists of land so certified. The commissioner of natural resources shall determine and certify the number of acres of acquired natural resources land and commissioner-administered natural resources land within each county.

(c) For the purposes of this section, the appraised value of acquired natural resources land is the purchase price for the first five years after acquisition. The appraised value of acquired natural resources land received as a donation is the value determined for the commissioner of natural resources by a licensed appraiser, or the county assessor's estimated market value if no appraisal is done. The appraised value must be determined by the county assessor every five years after the land is acquired.

HIST: 1979 c 303 art 8 s 2; 1986 c 386 art 4 s 29; 1986 c 444; 1994 c 632 art 2 s 54; 1995 c 220 s 125

477A.13 Time of payment, deductions.

Payments to the counties shall be made from the general fund during the month of July of the year next following certification. There shall be deducted from amounts paid any amounts paid to a county or township during the preceding year pursuant to sections 97A.061, subdivisions 1 and 2, and 272.68, subdivision 3, with respect to the lands certified pursuant to section 477A.12.

HIST: 1979 c 303 art 8 s 3; 1Sp1981 c 3 s 12; 1984 c 502 art 3 s 26; 1986 c 386 art 4 s 30; 1990 c 604 art 4 s 17; 1993 c 13 art 2 s 16

477A.14 Use of funds.

Forty percent of the total payment to the county shall be deposited in the county general revenue fund to be used to provide property tax levy reduction. The remainder shall be distributed by the county in the following priority:

(a) 37.5 cents for each acre of county-administered other natural resources land shall be deposited in a resource development fund to be created within the county treasury for use in resource development, forest management, game and fish habitat improvement, and recreational development and maintenance of county-administered other natural resources land. Any county receiving less than $5,000 annually for the resource development fund may elect to deposit that amount in the county general revenue fund;

(b) From the funds remaining, within 30 days of receipt of the payment to the county, the county treasurer shall pay each organized township 30 cents per acre of acquired natural resources land and 7.5 cents per acre of other natural resources land located within its boundaries. Payments for natural resources lands not located in an organized township shall be deposited in the county general revenue fund. Payments to counties and townships pursuant to this paragraph shall be used to provide property tax levy reduction, except that of the payments for natural resources lands not located in an organized township, the county may allocate the amount determined to be necessary for maintenance of roads in unorganized townships. Provided that, if the total payment to the county pursuant to section 477A.12 is not sufficient to fully fund the distribution provided for in this clause, the amount available shall be distributed to each township and the county general revenue fund on a pro rata basis; and

(c) Any remaining funds shall be deposited in the county general revenue fund. Provided that, if the distribution to the county general revenue fund exceeds $35,000, the excess shall be used to provide property tax levy reduction.

HIST: 1979 c 303 art 8 s 4; 1993 c 375 art 17 s 20; 1994 c 632 art 2 s 55; 1995 c 220 s 126; 1998 c 389 art 3 s 26

477A.15 Taconite aid reimbursement.

Any school district in which is located property which had been entitled to a reduction of tax pursuant to Minnesota Statutes 1978, section 273.135, subdivision 2, clause (c), shall receive in 1981 and subsequent years an amount equal to the amount it received in 1980 pursuant to Minnesota Statutes 1978, section 298.28, subdivision 1, clause (3)(b). Payments shall be made pursuant to this section by the commissioner of revenue to the taxing jurisdictions on the date in each calendar year when the first installment is paid under section 477A.015.

HIST: 1980 c 607 art 7 s 6; 1994 c 416 art 1 s 62