1.1                          A bill for an act
  1.2             relating to local government aids; modifying the 
  1.3             distribution of city aid; amending Minnesota Statutes 
  1.4             1994, sections 477A.011, subdivisions 1a and 34; 
  1.5             477A.013, subdivision 9; and 477A.03, subdivision 2, 
  1.6             and by adding a subdivision; proposing coding for new 
  1.7             law in Minnesota Statutes, chapter 477A. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 1994, section 477A.011, 
  1.10  subdivision 1a, is amended to read: 
  1.11     Subd. 1a.  [CITY.] "City" means a statutory or home rule 
  1.12  charter city.  "Small city" means a city with a population less 
  1.13  than 2,500.  "Large city" means a city with a population equal 
  1.14  to or greater than 2,500. 
  1.15     Sec. 2.  Minnesota Statutes 1994, section 477A.011, 
  1.16  subdivision 34, is amended to read: 
  1.17     Subd. 34.  [CITY REVENUE NEED.] (a) For a large city with a 
  1.18  population equal to or greater than 2,500, "city revenue need" 
  1.19  is the sum of (1) 3.462312 times the pre-1940 housing 
  1.20  percentage; plus (2) 2.093826 times the commercial industrial 
  1.21  percentage; plus (3) 6.862552 times the population decline 
  1.22  percentage; plus (4) .00026 times the city population; plus (5) 
  1.23  152.0141 (4) 157.8441. 
  1.24     (b) For a small city with a population less than 2,500, 
  1.25  "city revenue need" is the sum of (1) 1.795919 times the 
  1.26  pre-1940 housing percentage; plus (2) 1.562138 times the 
  2.1   commercial industrial percentage; plus (3) 4.177568 times the 
  2.2   population decline percentage; plus (4) 1.04013 times the 
  2.3   transformed population; minus (5) 107.475 (1) the sum of the 
  2.4   revenue base in the previous year for all cities, divided by (2) 
  2.5   the sum of the population for all cities. 
  2.6      (c) The city revenue need cannot be less than zero. 
  2.7      (d) For calendar year 1995 1997 and subsequent years, the 
  2.8   city revenue need for a large city, as determined in paragraphs 
  2.9   (a) to and (c), is multiplied by the ratio of the annual 
  2.10  implicit price deflator for state and local government 
  2.11  purchases, as prepared by the United States Department of 
  2.12  Commerce, for the most recently available year to the 1993 
  2.13  implicit price deflator for state and local government purchases.
  2.14     Sec. 3.  Minnesota Statutes 1994, section 477A.013, 
  2.15  subdivision 9, is amended to read: 
  2.16     Subd. 9.  [CITY AID DISTRIBUTION.] (a) In calendar year 
  2.17  1994 1997 and thereafter, each city shall receive an aid 
  2.18  distribution equal to the sum of (1) the city formula aid under 
  2.19  subdivision 8, and (2) the product of (i) its city aid base and 
  2.20  (ii) 100 percent minus the base reduction percentage. 
  2.21     (b) The percentage increase for a first class city in 
  2.22  calendar year 1995 and thereafter shall not exceed the 
  2.23  percentage increase in the sum of the aid to all cities under 
  2.24  this section in the current calendar year compared to the sum of 
  2.25  the aid to all cities in the previous year due to the inflation 
  2.26  adjustment under section 477A.03, subdivision 3. 
  2.27     (c) The total aid for any city, except a first class city, 
  2.28  shall not exceed the sum of (1) ten percent of the city's net 
  2.29  levy for the year prior to the aid distribution plus (2) its 
  2.30  total aid in the previous year before any increases or decreases 
  2.31  under sections 16A.711, subdivision 5, and section 477A.0132. 
  2.32     (d) Notwithstanding paragraph (c), in 1995 only, for cities 
  2.33  which in 1992 or 1993 transferred an amount from governmental 
  2.34  funds to their sewer and water fund in an amount greater than 
  2.35  their net levy for taxes payable in the year in which the 
  2.36  transfer occurred, the total aid shall not exceed the sum of (1) 
  3.1   20 percent of the city's net levy for the year prior to the aid 
  3.2   distribution plus (2) its total aid in the previous year before 
  3.3   any increases or decreases under sections 16A.711, subdivision 
  3.4   5, and 477A.0132 The total aid for any city shall not be less 
  3.5   than (1) its total aid in the previous year, before any 
  3.6   increases or decreases under section 477A.0132, minus (2) ten 
  3.7   percent of its net levy for the year prior to the aid 
  3.8   distribution. 
  3.9      Sec. 4.  [477A.0133] [RURAL CITY REVITALIZATION AID.] 
  3.10     Subdivision 1.  [PURPOSE.] The purpose of rural city 
  3.11  revitalization aid is to maintain the vitality of small, rural 
  3.12  communities.  Aid under this section is limited to cities with a 
  3.13  population of 5,000 or less located outside of the metropolitan 
  3.14  area, as defined in section 473.121, subdivision 2. 
  3.15     Subd. 2.  [DEFINITIONS.] For the purposes of this section, 
  3.16  the following definitions apply: 
  3.17     (a) "population" means the population according to the most 
  3.18  recent federal census or according to the state demographer's 
  3.19  most recent estimate if it has been issued subsequent to the 
  3.20  most recent federal census; 
  3.21     (b) "population growth factor" means the sum of one plus 
  3.22  the percentage growth in the city's population for the most 
  3.23  recent five-year period.  The population growth factor may not 
  3.24  be less than one; and 
  3.25     (c) "per capita aid amount" is an amount determined by the 
  3.26  commissioner of revenue such that the sum of the aids calculated 
  3.27  under subdivision 3 does not exceed the limit in the amount of 
  3.28  aids paid under this section, as determined in section 477A.03. 
  3.29     Subd. 3.  [FORMULA.] Each year, the commissioner of revenue 
  3.30  shall distribute city rural revitalization aid to each eligible 
  3.31  city in an amount equal to the product of (1) its population, 
  3.32  (2) its population growth factor, and (3) the per capita aid 
  3.33  amount. 
  3.34     Subd. 4.  [PAYMENT DATES.] The aid amounts for each 
  3.35  calendar year shall be paid as provided in section 477A.015. 
  3.36     Sec. 5.  Minnesota Statutes 1994, section 477A.03, 
  4.1   subdivision 2, is amended to read: 
  4.2      Subd. 2.  [ANNUAL APPROPRIATION.] A sum sufficient to 
  4.3   discharge the duties imposed by sections 477A.011 to 477A.014 is 
  4.4   annually appropriated from the general fund to the commissioner 
  4.5   of revenue.  For aids payable in 1996 and thereafter, the total 
  4.6   aids paid under sections 477A.013, subdivision 9, 477A.0121, and 
  4.7   477A.0122 are the amounts certified to be paid in the previous 
  4.8   year, adjusted for inflation as provided under subdivision 3 and 
  4.9   adjusted for additional payments under subdivision 4. 
  4.10     For aids payable in 1997, the total aids paid under section 
  4.11  477A.0133 are limited to $5,000,000.  For aids payable in 1998 
  4.12  and thereafter, the total aids paid under section 477A.0133 are 
  4.13  limited to the amounts certified to be paid in the previous 
  4.14  year, adjusted for inflation as provided under subdivision 3. 
  4.15     Sec. 6.  Minnesota Statutes 1994, section 477A.03, is 
  4.16  amended by adding a subdivision to read: 
  4.17     Subd. 4.  [ADJUSTMENT FOR CITY AID.] The limit on the 
  4.18  amount of aid paid under subdivision 2 to cities under section 
  4.19  477A.013, subdivision 9, is permanently increased by an 
  4.20  additional $10,000,000 for aids payable in 1997 and thereafter. 
  4.21     Sec. 7.  [EFFECTIVE DATE.] 
  4.22     Sections 1 to 6 are effective for aids payable in 1997 and 
  4.23  thereafter.