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HF1279 (Legislative Session 94 (2025-2026))

Property tax; distribution of the state general levy provided to certain municipalities.

Related bill: SF1757

AI Generated Summary

This bill, H.F. No. 1279, introduced in the Minnesota House of Representatives, proposes an amendment to Minnesota Statutes 2024, section 275.025, by adding a new subdivision that provides for certain municipalities to receive a portion of the state general levy.

Key Provisions:

  1. Creation of a Distribution Program for "Low-Aid Municipalities":

    • A “low-aid municipality” is defined as a municipality that:
      • Is located wholly or partially within the area defined by section 473F.02, subdivision 2.
      • Does not receive funding from the Municipal State-Aid Street Fund.
      • Does not receive Local Government Aid (LGA) under sections 477A.011 to 477A.03.
      • Has a higher fiscal disparities contribution tax capacity than its fiscal disparities distribution tax capacity.
      • Has a population of fewer than 5,000 residents.
      • Is located in Anoka County.

  2. Calculation of the Distribution:

    • The distribution amount is determined by multiplying:
      1. The municipality’s net tax capacity tax rate, by
      2. The municipality’s net fiscal disparities contribution.
    • The distribution cannot exceed the total state general levy imposed on taxpayers within the municipality.

  3. Distribution Process:

    • The Commissioner of Revenue will determine and certify the distribution amount to each eligible municipality and its county by September 1 of the tax year.
    • The home county treasurer will distribute the funds to the municipality by December 1.
    • Distributed funds will be deducted from the state general levy settlement for that tax year.

  4. Definitions:

    • "Municipality" refers to a home rule or statutory city, or a town.
    • "Net fiscal disparities contribution" is defined as the municipality's fiscal disparities contribution net tax capacity minus its distribution net tax capacity.

Purpose:

This bill is intended to provide financial relief to small municipalities in Anoka County that do not qualify for other state aid programs but still contribute disproportionately to the fiscal disparities system. The distribution provides these municipalities with a share of the state general levy revenues collected within their jurisdiction to balance their tax burdens.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 19, 2025HouseFloorActionIntroduction and first reading, referred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "A lowaid municipality is defined to include those within the area specified in 473F.02."
      ],
      "removed": [],
      "summary": "Defines the area in which the lowaid municipality must be located to be eligible for distribution.",
      "modified": []
    },
    "citation": "473F.02"
  },
  {
    "analysis": {
      "added": [],
      "removed": [
        "Excludes municipalities receiving municipal state-aid street fund from eligible for new distribution."
      ],
      "summary": "Specifies that no municipal state-aid street fund distribution eligibility for lowaid municipalities.",
      "modified": []
    },
    "citation": "162.13"
  },
  {
    "analysis": {
      "added": [],
      "removed": [
        "Municipalities receiving local government aid are ineligible for the distribution."
      ],
      "summary": "Excludes municipalities receiving local government aid from being classified as a lowaid municipality.",
      "modified": []
    },
    "citation": "477A.011 to 477A.03"
  },
  {
    "analysis": {
      "added": [],
      "removed": [
        "Adjustments must be made to settlements under the state general levy."
      ],
      "summary": "The provision ensures alignment with fiscal management by addressing taxpayer settlements.",
      "modified": []
    },
    "citation": "276.112"
  }
]

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