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Final Version of 2011 Law Summaries Now Available

The new document contains regular session and special session outcomes.

View the LMC 2011 Final Law Summaries (pdf)

2011 Session ends with no state budget
The 2011 Law Summaries document has been updated to reflect the legislative actions that took place during the July 19 special session that ended the longest state government shutdown in Minnesota’s history and temporarily balanced the state’s budget.

After the regular session adjourned on May 23, the League released a preliminary law summary document that reflected relatively unproductive regular session. The new document contains regular session and special session outcomes.

Why the delay?
On May 24, just hours after the 2011 regular session adjourned sine die, Gov. Mark Dayton (DFL) issued vetoes of eight major state appropriation bills and the omnibus tax bill, leaving the vast majority of state agencies without a budget for the 2012-2013 biennium, which began July 1, 2011. During the regular session, a total of 117 chapters of law were sent to the governor, and he vetoed 23 of those chapters of new law.

Shutdown ends with passage of 12 budget bills
On July 19, Gov. Dayton and leaders of the Republican majorities in the House and Senate announced they had reached agreements on major funding bills, a bonding bill, and a tax bill. To end the state government shutdown that began July 1, Gov. Dayton called for a special session to convene at 3 p.m. that afternoon. The Legislature finished its work at about 4 a.m. the next day, and Gov. Dayton and Secretary of State Mark Ritchie signed all the bills into law at 9 a.m. Within the week, most state agencies were fully operational.

The bills authorize a combined total of $34 billion in spending from the state’s general fund—$35.7 billion counting the K-12 aid payment shift, tobacco revenue bonds, and cash flow account transfer that were part of the final agreement. The bills will fund state government for the 2012-2013 fiscal biennium, which began July 1. Most of the appropriations made in the bills are effective retroactively to that date.

The 2011 Final Law Summaries
The League of Minnesota Cities annually prepares a summary of new laws that impact city operations. The document is intended to highlight relevant new laws, but is not intended to be comprehensive legal advice. The 2011 Law Summaries should help city officials digest the outcomes of very difficult regular and special sessions.

Although 2011 outcomes were largely disappointing for cities, most outcomes were not as dire as some had predicted. Local government aid (LGA) in 2011 will be cut by roughly $102 million, leaving a total appropriation of $425.3 million for the program.

The agreement on LGA is essentially identical to the cuts in HF 130, the early session tax bill that was vetoed by Gov. Dayton on Feb. 10. Under the agreement, each city will receive the lesser of their final 2010 LGA after the cuts imposed by the governor and Legislature or their 2011 certified LGA amount. The 2011 Law Summaries include a spreadsheet containing the certified LGA and MVHC amounts for each city.

LGA in 2012 for each city will again receive the lesser of actual 2010 or 2011 original certified amount. In other words, the 2010 cuts will be extended for at least two years. Beyond the 2012 distribution, the LGA appropriation will be set at $426.4 million and the formula will again be used to distribute the appropriated amount.

The July 20 first half payment to cities was delayed to July 27 to allow the Department of Revenue to re-compute the 2011 LGA amounts for each city. The reduced LGA amount re-computed for each city will then be paid in two equal installments on July 27 and Dec. 26. The one-week delay in the July distribution is not a permanent change in the payment dates, but instead is only occurring in 2011 due to the timing of the resolution to the shutdown.

The tax agreement includes an extension of the 2010 market value homestead credit (MVHC) reimbursement reductions to each city for 2011. These reductions total approximately $48 million. Beginning in 2012, the MVHC program and the associated reimbursement to local units of government for the reduction in homeowner property taxes will be eliminated under the agreement. In place of the MVHC, homeowners will receive an exclusion of a portion of the market value of their house from property taxes.

Although the homestead exclusion is computed in a mathematically similar manner to the repealed MVHC, the new system will provide homeowner relief by shifting taxes to all other property rather than covering the property tax credit reduction with a state paid credit reimbursement. Levy limits were not included in the final tax bill.

Other outcomes
In addition to the budget bills, dozens of smaller but significant bills also made it to the finish line. The following is a sampling of bills the governor has signed into law:

  • Local authority to issue variances restored.
  • Civil immunity provided for donated public safety equipment.
  • Sale and possession of synthetic drugs such as synthetic marijuana banned.
  • “Buy American” requirement for uniforms and public safety equipment repealed.
  • Youth concussion education required.

View the LMC 2011 Final Law Summaries (pdf)

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