SF4998

Purpose

This bill would adjust disparity reduction aid for jurisdictions located in Fillmore County by retroactively adding unpaid prior-year amounts to the 2027 disparity reduction aid payments. It aims to ensure 2024 and 2025 disparity reduction aid that were not paid in those years are included in 2027 payments, while protecting levy levels in 2027 and providing funding for these payments through 2028.

Main Provisions

• Catch-up payments for Fillmore County: The 2027 disparity reduction aid payments must include the 2024 and 2025 disparity reduction aid amounts that were not paid to the jurisdictions in those years (these amounts are in addition to the normal 2027 aid).
• Levy floor: The added 2024 and 2025 amounts may not reduce any jurisdiction’s levy in 2027 to less than 0.1.
• Certification and payment changes: The commissioner of revenue must include the 2024 and 2025 disparity reduction aid payments with the 2027 disparity reduction aid certification under Minnesota Statutes section 273.1398, subdivision 6.
• Distribution of the catch-up amounts: The additional 2024 and 2025 amounts must be included in 2027 payments to all affected local governments other than school districts, and the commissioner of education must include the additional amounts in 2027 payments to school districts.
• Unspent funds: Any funds appropriated under this section that are not spent by June 30, 2027 must be deposited into the general fund.
• Cancellation of 2025 appropriations: The appropriations for disparity reduction aid payable in 2025 are canceled and returned to the general fund.
• Future funding: For fiscal year 2028, specific general fund appropriations are made to the commissioner of revenue (for payments to counties, cities, towns, and special taxing districts) and to the commissioner of education (for payments to school districts, intermediate districts, or groups of districts that levy as a single entity) to continue these payments.

Significant Changes to Existing Law

• Overrides or supplements existing statutory rules under Minnesota Statutes section 273.1398 to require inclusion of unpaid 2024 and 2025 disparity reduction aid in 2027 for the Fillmore County jurisdictions.
• Establishes a levy floor in 2027 (not allowing reductions below 0.1) in the context of incorporating back unpaid aid.
• Requires reallocation of 2027 payments between the revenue and education departments to cover the added amounts for both non-school-district local governments and school districts.
• Provides for cancellation of 2025 appropriations and a plan to revert unspent funds to the general fund.
• Creates a new 2028 funding structure to support these payments.

Implementation & Timing

• 2027: The catch-up 2024 and 2025 disparity reduction aid amounts are added to the 2027 payments; levy floor applies; departments certify and distribute funds accordingly.
• By June 30, 2027: Any unspent funds must be deposited to the general fund.
• 2025 appropriations: Cancelled and returned to the general fund.
• 2028: New general fund appropriations are provided to fund these payments going forward for eligible local governments and school districts.

Relevant Terms - disparity reduction aid - Fillmore County - local governments (counties, cities, towns, special taxing districts) - school districts - commissioner of revenue - commissioner of education - Minnesota Statutes section 273.1398 - aid payable in 2027 - 2024 disparity reduction aid - 2025 disparity reduction aid - certification for disparity reduction aid - levy / levy floor (0.1) - general fund - unspent funds / appropriations canceled - fiscal year 2028 - payments to counties, cities, towns, special taxing districts - payments to school districts - intermediate school districts / groups of districts acting as a single entity