HF4777

Purpose

• This bill changes how disparity reduction aid is paid to jurisdictions in Fillmore County for 2027, by requiring that the 2027 payments include the disparity reduction amounts from 2024 and 2025 that were not paid in those years.

Main Provisions

• For jurisdictions located in Fillmore County, the 2027 disparity reduction aid must include the 2024 and 2025 amounts that were previously unpaid.
• These 2024/2025 amounts are in addition to any 2027 disparity reduction aid, but they cannot reduce a jurisdiction’s 2027 levy to below a very small floor (0.1).
• The commissioner of revenue must include the 2024/2025 disparity reduction payments with the 2027 payments, per the applicable statute (273.1398, subdivision 6), and apply these amounts to all affected local governments other than school districts.
• The commissioner of education must include the 2024/2025 amounts in the 2027 payments to school districts.
• Any unspent funds appropriated under this section must be deposited into the general fund by June 30, 2027.
• The appropriations for disparity reduction aid payable in 2025 are canceled and returned to the general fund.
• In fiscal year 2028, funds are appropriated from the general fund to:
  • The commissioner of revenue for payments under this section to counties, cities, towns, and other special taxing districts.
  • The commissioner of education for payments under this section to school districts, intermediate districts, or groups of school districts that levy as a single entity.

Financial / Fiscal Impact

• One-time catch-up payments for 2024 and 2025 disparity reduction aid are added to 2027 payments in Fillmore County.
• Any 2025 disparity reduction appropriations are canceled and returned to the general fund.
• Unspent funds from these appropriations must be returned to the general fund by a specified date (June 30, 2027).
• Starting in 2028, ongoing payments under this section are funded from the general fund to eligible local governments and school districts.

Affected Entities

• Local governments in Fillmore County (counties, cities, towns, and special taxing districts) and school districts, including intermediate districts or groups of school districts that levy together.

Timeline / Effective Date

• The above changes pertain to 2027 payments, with 2028 funding for ongoing payments to be provided from the general fund.
• Specific effective date is tied to these payment years and subsequent fiscal year funding.

Significance

• Provides a mechanism to address past gaps where disparity reduction aid for 2024 and 2025 was not paid in Fillmore County.
• Ensures past-due aid is added to the 2027 distribution, while protecting levy levels from being reduced below a minimal threshold.
• Establishes a process to retire unused funds and to fund future payments in 2028 and beyond.

Relevant Terms - Fillmore County - disparity reduction aid - 2024 disparity reduction aid - 2025 disparity reduction aid - 2027 payments - 2028 appropriations - commissioner of revenue - commissioner of education - school districts - counties, cities, towns - special taxing districts - local governments - general fund - uncaptured / unspent funds - Minnesota Statutes 273.1398, subdivision 6 - levy floor (0.1)