1.1                          A bill for an act 
  1.2             relating to taxation; authorizing the board of 
  1.3             government innovation and cooperation to conduct a 
  1.4             pilot project for establishment of aid distribution 
  1.5             councils; appropriating money; amending Minnesota 
  1.6             Statutes 1994, section 465.795, subdivision 7; 
  1.7             proposing coding for new law in Minnesota Statutes, 
  1.8             chapter 465. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1994, section 465.795, 
  1.11  subdivision 7, is amended to read: 
  1.12     Subd. 7.  [SCOPE.] As used in sections 465.795 to 465.799 
  1.13  and sections 465.801 to 465.87 465.88, the terms defined in this 
  1.14  section have the meanings given them. 
  1.15     Sec. 2.  [465.88] [AID DISTRIBUTION COUNCILS; PILOT 
  1.16  PROJECT.] 
  1.17     Subdivision 1.  [AUTHORIZATION.] The board shall provide 
  1.18  special grants to local government applicants for establishment 
  1.19  of aid distribution councils.  The councils or "grantees" shall 
  1.20  determine the allocation of state funds provided to local 
  1.21  government units other than school districts.  For purposes of 
  1.22  aids to be distributed during calendar years 1997 and 1998, the 
  1.23  board may designate at least two and up to four grantees.  At 
  1.24  least one grantee must be located within a metropolitan county 
  1.25  as defined in section 473.121, subdivision 4, and at least one 
  1.26  must be located in a nonmetropolitan county.  Applications for 
  1.27  grants must be made to the board by September 1, 1995.  To be 
  2.1   considered by the board, an application must be submitted 
  2.2   jointly by the governing body of a county and the governing 
  2.3   bodies of cities located within the counties that, in the 
  2.4   aggregate, either: 
  2.5      (1) receive over 75 percent of the amount of the aids 
  2.6   described in subdivision 4 that are distributed to all cities 
  2.7   within the county; or 
  2.8      (2) have over 75 percent of the population of the county.  
  2.9   The governing body of towns, special taxing districts, and 
  2.10  school districts located in whole or in part within the county 
  2.11  may join in the application by designating their proposed 
  2.12  cooperation with or contribution to the county or cities. 
  2.13     Subd. 2.  [REVIEW PROCESS.] Upon receipt of an application 
  2.14  from a county, cities, and other local government units, if any, 
  2.15  the board shall review the application for designation as a 
  2.16  site.  The application must contain the applicants' description 
  2.17  of their proposed process and criteria for allocation of aids 
  2.18  within the county.  In deciding whether to designate a grantee 
  2.19  as a site for an aid distribution council, the board shall use a 
  2.20  scoring system that provides points for the following elements: 
  2.21     (1) plans for innovative service delivery changes relating 
  2.22  to the basic needs of the community; the changes should be 
  2.23  reasonably likely to result in long-term savings or improved 
  2.24  service delivery with no cost increases; 
  2.25     (2) a plan for the reinvestment of savings realized from 
  2.26  the service delivery changes into property tax relief; 
  2.27     (3) a plan for use of the aid money to finance innovative 
  2.28  programs of focused property tax relief; 
  2.29     (4) a plan for establishment of priority boards within each 
  2.30  local unit of government that joins in the application.  As used 
  2.31  in this clause, "priority board" means an organization designed 
  2.32  to foster citizen participation in the actions of and decisions 
  2.33  made by a local unit of government.  A priority board system is 
  2.34  established by action of the governing body of a local unit of 
  2.35  government, which divides the geographic area of its 
  2.36  jurisdiction into a number of districts determined by the 
  3.1   governing body to be sufficient to provide representation to 
  3.2   communities of interest.  Residents of each district must elect 
  3.3   board members, with representation either at large or based on 
  3.4   neighborhoods or voting precincts.  Each board shall elect 
  3.5   officers and appoint committees as needed.  The governing body 
  3.6   must provide the boards with the resources necessary to 
  3.7   operate.  Employees of the local unit of government must provide 
  3.8   a mechanism for receiving and responding to the board's input 
  3.9   and involvement in the decision-making process on decisions 
  3.10  relating to the board's interests; 
  3.11     (5) plans for consolidation or cooperative provision of 
  3.12  services, functions, or facilities; and 
  3.13     (6) plans for cooperation with or contributions by any 
  3.14  school districts, towns, and special taxing districts that join 
  3.15  in the application. 
  3.16     Subd. 3.  [COMPOSITION OF AID DISTRIBUTION 
  3.17  COUNCILS.] Membership of an aid distribution council established 
  3.18  under this section shall consist of city council members or 
  3.19  mayors, county commissioners, and, to the extent they are 
  3.20  designated as members of the council, school board members, 
  3.21  township officials, and representatives of other special taxing 
  3.22  districts.  The application submitted to the board shall specify 
  3.23  the number of members from each category of representatives. 
  3.24     Subd. 4.  [BLOCK GRANTS.] The block grant provided to each 
  3.25  aid distribution council shall be an amount equal to the sum of: 
  3.26     (1) the attached machinery aid paid to the county under 
  3.27  section 273.138; 
  3.28     (2) the regular and manufactured home homestead and 
  3.29  agricultural credit aid paid to the county and to the townships, 
  3.30  cities, and special taxing districts within the county under 
  3.31  sections 273.1398, subdivision 2, and 273.166; 
  3.32     (3) the local government aid paid to cities and townships 
  3.33  within the county under sections 477A.011 to 477A.014; 
  3.34     (4) the disparity reduction aid paid to townships and the 
  3.35  county under section 273.1398, subdivision 3, as paid to the 
  3.36  local government units within the county in calendar year 1995; 
  4.1   and 
  4.2      (5) an additional amount determined by the board. 
  4.3      In the case of a city, township, or other special taxing 
  4.4   district which is located only partially within the county, the 
  4.5   aid amount subject to allocation by the aid distribution council 
  4.6   must be prorated based on the proportion of the population of 
  4.7   that local government unit that resides within the county.  
  4.8      The amount of the aids described in clauses (1) to (4) 
  4.9   shall be paid by the commissioner of revenue to the local 
  4.10  governments in the manner provided in the applicable statute, 
  4.11  except that the amount of the distribution to each local 
  4.12  government unit shall be the amount determined by the aid 
  4.13  distribution council. 
  4.14     The board shall certify the total amount of the grant for 
  4.15  distribution each year to the aid distribution council by 
  4.16  November 15, 1995.  
  4.17     Subd. 5.  [COUNCIL PROCESS.] The aid distribution council 
  4.18  shall conduct public hearings in at least three locations in 
  4.19  various parts of the county between January 1 and May 31 of the 
  4.20  year preceding the aid distribution.  By July 15 of the year 
  4.21  preceding the aid distribution, the aid distribution council 
  4.22  shall make its final determination on the allocation of the 
  4.23  grant to local governments within the county.  Up to one-half of 
  4.24  the portion of the block grant provided under subdivision 4 that 
  4.25  is based on 1995 aids may be distributed to each local unit of 
  4.26  government within the county in proportion to its 1995 aid 
  4.27  distribution.  The remainder must be distributed according to 
  4.28  the determination of the aid distribution council, based on the 
  4.29  elements described in subdivision 2.  These amounts shall be 
  4.30  certified to the county treasurer.  The chair of the board shall 
  4.31  pay the amount of the grants described in subdivision 4, clause 
  4.32  (5), to the county treasurer on the dates provided in section 
  4.33  477A.015 for aid distributions. 
  4.34     Subd. 6.  [APPROPRIATION.] $500,000 is appropriated from 
  4.35  the general fund to the board of government innovation and 
  4.36  cooperation, to be used to provide grants to aid distribution 
  5.1   councils as described in subdivision 4, clause (5). 
  5.2      Subd. 7.  [REPORT TO LEGISLATURE.] The board shall report 
  5.3   by January 1 of 1996 and 1997 to the chairs of the senate 
  5.4   committee on taxes and tax laws and the house tax committee on 
  5.5   the implementation of this section.