| 1 | 1 | | 1.1 A bill for an act |
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| 2 | 2 | | 1.2 relating to taxation; local government aid; establishing a sparsity factor in the city |
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| 3 | 3 | | 1.3 aid formula; appropriating money; amending Minnesota Statutes 2024, sections |
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| 4 | 4 | | 1.4 477A.011, subdivision 34, by adding a subdivision; 477A.03, subdivision 2a. |
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| 5 | 5 | | 1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: |
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| 6 | 6 | | 1.6 Section 1. Minnesota Statutes 2024, section 477A.011, subdivision 34, is amended to |
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| 7 | 7 | | 1.7read: |
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| 8 | 8 | | 1.8 Subd. 34.City revenue need.(a) For a city with a population equal to or greater than |
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| 9 | 9 | | 1.910,000, "city revenue need" is 1.15 times the sum of (1) 8.572 times the pre-1940 housing |
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| 10 | 10 | | 1.10percentage; plus (2) 11.494 times the city age index; plus (3) 5.719 times the commercial |
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| 11 | 11 | | 1.11industrial utility percentage; plus (4) 9.484 times peak population decline; plus (5) 293.056; |
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| 12 | 12 | | 1.12plus (6) the sparsity adjustment. |
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| 13 | 13 | | 1.13 (b) For a city with a population equal to or greater than 2,500 and less than 10,000, "city |
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| 14 | 14 | | 1.14revenue need" is 1.15 times the sum of (1) 497.308; plus (2) 6.667 times the pre-1940 |
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| 15 | 15 | | 1.15housing percentage; plus (3) 9.215 times the commercial industrial utility percentage; plus |
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| 16 | 16 | | 1.16(4) 16.081 times peak population decline; plus (5) the sparsity adjustment. |
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| 17 | 17 | | 1.17 (c) For a city with a population less than 2,500, "city revenue need" is the sum of (1) |
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| 18 | 18 | | 1.18196.487; plus (2) 220.877 times the city's transformed population; plus (3) the sparsity |
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| 19 | 19 | | 1.19adjustment. |
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| 20 | 20 | | 1.20 (d) For a city with a population of at least 2,500 but less than 3,000, the "city revenue |
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| 21 | 21 | | 1.21need" equals (1) the transition factor times the city's revenue need calculated in paragraph |
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| 22 | 22 | | 1.22(b); plus (2) the city's revenue need calculated under the formula in paragraph (c) times the |
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| 23 | 23 | | 1.23difference between one and the transition factor. For a city with a population of at least |
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| 24 | 24 | | 1Section 1. |
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| 25 | 25 | | 25-00647 as introduced11/19/24 REVISOR MS/LN |
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| 26 | 26 | | SENATE |
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| 27 | 27 | | STATE OF MINNESOTA |
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| 28 | 28 | | S.F. No. 128NINETY-FOURTH SESSION |
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| 29 | 29 | | (SENATE AUTHORS: FARNSWORTH) |
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| 30 | 30 | | OFFICIAL STATUSD-PGDATE |
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| 31 | 31 | | Introduction and first reading01/16/2025 |
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| 32 | 32 | | Referred to Taxes 2.110,000 but less than 11,000, the "city revenue need" equals (1) the transition factor times |
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| 33 | 33 | | 2.2the city's revenue need calculated in paragraph (a); plus (2) the city's revenue need calculated |
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| 34 | 34 | | 2.3under the formula in paragraph (b) times the difference between one and the transition |
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| 35 | 35 | | 2.4factor. For purposes of the first sentence of this paragraph "transition factor" is 0.2 percent |
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| 36 | 36 | | 2.5times the amount that the city's population exceeds the minimum threshold. For purposes |
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| 37 | 37 | | 2.6of the second sentence of this paragraph, "transition factor" is 0.1 percent times the amount |
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| 38 | 38 | | 2.7that the city's population exceeds the minimum threshold. |
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| 39 | 39 | | 2.8 (e) The city revenue need cannot be less than zero. |
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| 40 | 40 | | 2.9 (f) For calendar year 2024 and subsequent years, the city revenue need for a city, as |
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| 41 | 41 | | 2.10determined in paragraphs (a) to (e), is multiplied by the ratio of the annual implicit price |
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| 42 | 42 | | 2.11deflator for government consumption expenditures and gross investment for state and local |
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| 43 | 43 | | 2.12governments as prepared by the United States Department of Commerce, for the most |
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| 44 | 44 | | 2.13recently available year to the 2022 implicit price deflator for state and local government |
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| 45 | 45 | | 2.14purchases. |
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| 46 | 46 | | 2.15 EFFECTIVE DATE.This section is effective for aids payable in calendar year 2026 |
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| 47 | 47 | | 2.16and thereafter. |
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| 48 | 48 | | 2.17 Sec. 2. Minnesota Statutes 2024, section 477A.011, is amended by adding a subdivision |
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| 49 | 49 | | 2.18to read: |
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| 50 | 50 | | 2.19 Subd. 48.Sparsity adjustment.The sparsity adjustment is 200 for: |
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| 51 | 51 | | 2.20 (1) a city with a population of 10,000 or more and an average population density of less |
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| 52 | 52 | | 2.21than 150 per square mile, according to the most recent federal census; and |
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| 53 | 53 | | 2.22 (2) a city with a population less than 10,000 and an average population density less than |
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| 54 | 54 | | 2.2330 per square mile, according to the most recent federal census. |
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| 55 | 55 | | 2.24The sparsity adjustment is zero for all other cities. |
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| 56 | 56 | | 2.25 EFFECTIVE DATE.This section is effective for aids payable in calendar year 2026 |
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| 57 | 57 | | 2.26and thereafter. |
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| 58 | 58 | | 2.27 Sec. 3. Minnesota Statutes 2024, section 477A.03, subdivision 2a, is amended to read: |
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| 59 | 59 | | 2.28 Subd. 2a.Cities.For aids payable in 2021 through 2023, the total aid payable under |
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| 60 | 60 | | 2.29section 477A.013, subdivision 9, is $564,398,012. For aids payable in 2024 and thereafter |
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| 61 | 61 | | 2.302025, the total aid payable under section 477A.013, subdivision 9, is $644,398,012. For |
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| 62 | 62 | | 2Sec. 3. |
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| 63 | 63 | | 25-00647 as introduced11/19/24 REVISOR MS/LN 3.1aids payable in 2026 and thereafter, the total aid payable under section 477A.013, subdivision |
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| 64 | 64 | | 3.29, is $........ |
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| 65 | 65 | | 3.3 EFFECTIVE DATE.This section is effective for aids payable in calendar year 2026 |
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| 66 | 66 | | 3.4and thereafter. |
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| 67 | 67 | | 3Sec. 3. |
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| 68 | 68 | | 25-00647 as introduced11/19/24 REVISOR MS/LN |
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