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A bill for an act
relating to taxation; local government aid reduction for denial of projects that
would expand tax base; proposing coding for new law in Minnesota Statutes,
chapter 477A.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
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[477A.0178] AID REDUCTIONS FOR TAX BASE REDUCTIONS.
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Subdivision 1.
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Penalty for failure to approve tax base expansions.
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Notwithstanding
any other law to the contrary, a county or a city that denies approval for a local development
project that would have increased the jurisdiction's property tax base must have its aid under
sections 477A.011 to 477A.03 reduced by the amount determined under subdivision 2. The
commissioner of revenue must reduce county program aid paid to a county or local
government aid paid to a city by the amount determined under subdivision 2 in the aids
payable year following certification of the amount under subdivision 3. Reductions under
this section continue until certification under subdivision 4. No aid payment may be less
than zero as a result of reductions under this section, but the amount of the reduction that
cannot be made out of a payment shall be applied to future payments until the total amount
has been deducted.
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Subd. 2.
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Reduction amount.
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Aid reductions under this section are equal to the amount
certified under subdivision 3, paragraph (a), clause (2), multiplied by the amount certified
under subdivision 3, paragraph (a), clause (3).
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Subd. 3.
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Certification of reduction.
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(a) On July 1 of each year, the governing body of
any county or city that, within the past year, has denied approval for a local development
that would have increased the property tax base within the jurisdiction must notify the
commissioner of revenue of the following:
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(1) the jurisdiction's taxable net tax capacity in the current taxes payable year;
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(2) the jurisdiction's net tax capacity tax rate for the current taxes payable year; and
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(3) the amount of growth in net tax capacity the jurisdiction would have experienced
had the local development not been denied.
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(b) The commissioner of revenue must certify the aid reductions under this section for
any jurisdiction that provides notification under paragraph (a).
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Subd. 4.
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Reinstatement of aid.
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The governing body of a county or city subject to aid
reductions under this section must notify the commissioner of revenue once the jurisdiction's
taxable net tax capacity exceeds the sum of the amount under subdivision 3, paragraph (a),
clause (1), plus the amount under subdivision 3, paragraph (a), clause (3). Upon receipt of
the notification, the commissioner of revenue must verify the information and certify to the
jurisdiction that they are no longer subject to aid reductions under this section. Beginning
with aids payable in the year following notification under this subdivision, the commissioner
of revenue must no longer make aid reductions under this section, unless the jurisdiction
provides a new notice under subdivision 3, paragraph (a).
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EFFECTIVE DATE.
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This section is effective beginning June 30, 2027.
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