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HF 2498

1st Unofficial Engrossment - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am
KEY: ~~stricken~~ = removed, old language.
underscored = added, new language.
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Engrossments
Introduction		Posted on 04/30/2001
1st Engrossment		Posted on 05/03/2001
2nd Engrossment		Posted on 05/03/2001
3rd Engrossment		Posted on 05/07/2001
4th Engrossment		Posted on 05/16/2002
Unofficial Engrossments
1st Unofficial Engrossment		Posted on 12/05/2002
2nd Unofficial Engrossment		Posted on 12/05/2002
Conference Committee Reports
CCR-HF2498		Posted on 01/27/2003
  1.1                          A bill for an act
  1.2             relating to the financing and operation of government 
  1.3             in this state; providing a sales tax rebate; providing 
  1.4             property tax reform; making changes to income, 
  1.5             franchise, sales and use, property, motor vehicle 
  1.6             sales, mortgage registry, deed, motor fuels, cigarette 
  1.7             and tobacco, liquor, insurance premiums, minerals, 
  1.8             estate, solid waste management, and special taxes; 
  1.9             changing and allowing tax credits, subtractions, and 
  1.10            exemptions; conforming with changes in federal income 
  1.11            tax provisions; providing a property tax homestead and 
  1.12            agricultural credit; changing property tax valuation, 
  1.13            class rate, assessment, levy, classification, 
  1.14            homestead, credit, aid, exemption, deferral, notice, 
  1.15            hearing, equalization, review, appeal, abatement, and 
  1.16            distribution provisions; changing certain tax court 
  1.17            jurisdiction; providing and modifying certain aids to 
  1.18            local units of government; providing for certain 
  1.19            payments in lieu of taxes; changing levy authority; 
  1.20            modifying eligibility for renewable energy project 
  1.21            funding; requiring biodiesel fuel contents and 
  1.22            providing for its taxation; indexing motor fuel tax 
  1.23            rates; providing for deposit of motor vehicle sales 
  1.24            tax proceeds; freezing the taconite production tax for 
  1.25            certain years; changing the taconite tax relief area 
  1.26            for certain purposes and providing for aids and 
  1.27            taconite production tax distribution; providing 
  1.28            priorities for disposition of production tax proceeds 
  1.29            by the iron range resources and rehabilitation board; 
  1.30            providing for state takeover of certain costs of 
  1.31            district court administration, out-of-home placement 
  1.32            and day services; providing for uniform sales and use 
  1.33            tax administration; providing for taxation and 
  1.34            incentive payments on forest lands; providing for 
  1.35            metropolitan area financing and governance; providing 
  1.36            for electronic filing and payment of taxes; changing 
  1.37            procedures for disposition of seized contraband; 
  1.38            changing tax increment financing provisions and 
  1.39            authorizing certain grants, establishment of 
  1.40            districts, duration extensions, and tax increment 
  1.41            expenditures; authorizing establishment of housing 
  1.42            replacement tax increment districts; depositing 
  1.43            certain rental motor vehicle taxes in a fund providing 
  1.44            revenues for airport impact mitigation; changing 
  1.45            property tax refunds and calculation of rent 
  1.46            constituting property taxes for purposes of property 
  2.1             tax refunds; changing and authorizing certain local 
  2.2             taxes; providing special authority to certain 
  2.3             political subdivisions; authorizing special taxing 
  2.4             districts; changing and clarifying tax administration, 
  2.5             collection, enforcement, interest, refund, and penalty 
  2.6             provisions; imposing a use tax on certain waste 
  2.7             generators and haulers; changing revenue recapture and 
  2.8             debt collection provisions; changing and imposing 
  2.9             fees; providing certain duties and powers to the 
  2.10            commissioner of revenue and to county assessors; 
  2.11            changing border city tax provisions; changing 
  2.12            provisions relating to tax-forfeited lands and 
  2.13            providing for tax-forfeited lands transfers; defining 
  2.14            terms; classifying data; authorizing bonding; 
  2.15            requiring studies and reports; imposing a criminal 
  2.16            penalty; appropriating money; amending Minnesota 
  2.17            Statutes 2000, sections 10A.01, subdivision 10; 
  2.18            10A.09, subdivision 6a; 10A.27, subdivision 1; 10A.31, 
  2.19            subdivision 3; 15.0597, subdivision 1; 16D.08, 
  2.20            subdivision 2; 84.922, by adding a subdivision; 88.49, 
  2.21            subdivisions 5, 9a; 88.491, subdivision 2; 97A.065, 
  2.22            subdivision 2; 103D.905, subdivision 3; 115B.24, 
  2.23            subdivision 2; 116C.779; 116J.424; 123A.45, 
  2.24            subdivisions 2, 6; 123B.75, by adding a subdivision; 
  2.25            126C.13, subdivision 1, by adding a subdivision; 
  2.26            126C.17, subdivision 2, by adding a subdivision; 
  2.27            126C.48, subdivision 8; 144.3831, subdivision 2; 
  2.28            161.20, subdivision 3; 179A.101, subdivision 1; 
  2.29            179A.102, subdivision 6; 179A.103, subdivision 1; 
  2.30            204B.06, subdivision 4; 204B.09, subdivisions 1, 1a; 
  2.31            204B.11; 204B.135, subdivision 2; 204B.32, subdivision 
  2.32            2; 204D.02, subdivision 1; 204D.08, subdivision 6; 
  2.33            204D.27, by adding a subdivision; 209.02, subdivision 
  2.34            1; 211A.01, subdivision 3; 211B.01, subdivision 3; 
  2.35            239.101, subdivision 3; 252.43; 256B.092, subdivision 
  2.36            5; 256B.19, subdivision 1c; 260.765, by adding a 
  2.37            subdivision; 260.771, by adding a subdivision; 270.06; 
  2.38            270.271, subdivisions 1, 3; 270.60, by adding a 
  2.39            subdivision; 270.70, subdivision 13; 270.73, 
  2.40            subdivision 1; 270.771; 270.78; 270A.03, subdivisions 
  2.41            5, 7; 270A.11; 270B.02, subdivisions 2, 3; 270B.03, 
  2.42            subdivision 6; 271.01, subdivision 5; 271.21, 
  2.43            subdivision 2; 272.02, subdivisions 7, 10, by adding 
  2.44            subdivisions; 273.061, subdivisions 1, 2, 8; 273.072, 
  2.45            subdivision 1; 273.11, subdivisions 1a, 14, by adding 
  2.46            a subdivision; 273.1104, subdivision 2; 273.111, 
  2.47            subdivision 4; 273.121; 273.124, subdivisions 1, 13, 
  2.48            14; 273.13, subdivisions 22, 23, 24, 25, 31; 273.134; 
  2.49            273.135, subdivisions 1, 2; 273.136, subdivision 2; 
  2.50            273.1391, subdivisions 2, 3; 273.1392; 273.1393; 
  2.51            273.1398, subdivisions 4, 4a, by adding subdivisions; 
  2.52            273.1399, subdivision 6, by adding a subdivision; 
  2.53            274.01, subdivision 1; 274.13, subdivision 1; 275.065, 
  2.54            subdivisions 3, 5a, 6; 275.066; 275.07, subdivision 1; 
  2.55            276A.01, subdivisions 2, 3; 281.17; 282.01, 
  2.56            subdivision 1; 282.04, subdivision 2; 282.241; 
  2.57            287.035; 287.04; 287.08; 287.12; 287.20, subdivisions 
  2.58            2, 9; 287.21, subdivision 1; 287.28; 289A.02, 
  2.59            subdivision 7, by adding a subdivision; 289A.08, 
  2.60            subdivision 11; 289A.12, subdivision 3; 289A.18, 
  2.61            subdivision 4; 289A.20, subdivisions 1, 2, 4; 289A.26, 
  2.62            subdivision 2a; 289A.31, subdivision 7; 289A.50, 
  2.63            subdivisions 2, 2a; 289A.55, subdivision 9; 289A.60, 
  2.64            subdivisions 1, 2, 7, 21, by adding a subdivision; 
  2.65            290.01, subdivisions 6b, 19, 19b, 19c, 19d, 31; 
  2.66            290.06, subdivision 23, by adding subdivisions; 
  2.67            290.067, subdivisions 2, 2b; 290.0671, subdivisions 1, 
  2.68            7; 290.0674, subdivision 1, by adding a subdivision; 
  2.69            290.0675, subdivision 3; 290.068, by adding 
  2.70            subdivisions; 290.0921, subdivision 3; 290.191, 
  2.71            subdivision 5; 290.35, subdivision 2; 290.92, 
  3.1             subdivision 23; 290.9725; 290A.03, subdivisions 11, 
  3.2             12, 13, 15; 290A.04, subdivisions 2, 4; 290A.15; 
  3.3             291.005, subdivision 1; 295.50, subdivisions 3, 4, 15; 
  3.4             295.52, subdivision 4; 295.53, subdivision 4a; 295.55, 
  3.5             subdivision 4; 295.57, subdivision 1; 296A.07, 
  3.6             subdivision 4, by adding a subdivision; 296A.08, 
  3.7             subdivisions 1, 3, by adding a subdivision; 296A.15, 
  3.8             subdivisions 1, 7; 296A.16, subdivision 2; 296A.21, 
  3.9             subdivisions 1, 4; 296A.24, subdivisions 1, 2; 
  3.10            297A.01, subdivisions 3, 5; 297A.07, subdivision 3; 
  3.11            297A.25, subdivisions 3, 11, 28; 297A.61, subdivisions 
  3.12            2, 3, 4, 6, 7, 9, 10, 12, 14, 16, 17, 19, 22, 23, by 
  3.13            adding subdivisions; 297A.64, subdivisions 3, 4, by 
  3.14            adding a subdivision; 297A.66, subdivisions 1, 3; 
  3.15            297A.67, subdivisions 2, 8, 23, 24, 25, by adding 
  3.16            subdivisions; 297A.68, subdivisions 2, 3, 5, 11, 13, 
  3.17            14, 18, 19, 25, by adding subdivisions; 297A.69, 
  3.18            subdivision 2; 297A.70, subdivisions 1, 2, 4, 7, 8, 
  3.19            10, 13, 14; 297A.71, subdivision 6, by adding 
  3.20            subdivisions; 297A.72, subdivision 1; 297A.75; 
  3.21            297A.77, subdivision 1; 297A.80; 297A.82, subdivisions 
  3.22            1, 3; 297A.86, subdivision 1; 297A.89, subdivision 1; 
  3.23            297A.90, subdivision 1; 297A.91; 297A.92, subdivision 
  3.24            2; 297A.94; 297A.99, subdivisions 7, 9; 297B.03; 
  3.25            297B.09, subdivision 1; 297E.02, subdivision 4; 
  3.26            297E.16, subdivisions 1, 2; 297F.09, subdivision 7; 
  3.27            297F.16, subdivision 4; 297F.20, subdivision 3; 
  3.28            297F.21, subdivisions 1, 2, 3; 297G.09, subdivision 6; 
  3.29            297G.15, subdivision 4; 297G.16, subdivisions 5, 7; 
  3.30            297G.20, subdivisions 3, 4; 297H.04, by adding a 
  3.31            subdivision; 297I.35, subdivision 2; 297I.40, 
  3.32            subdivisions 1, 2, 7; 297I.85, subdivision 7; 298.018, 
  3.33            subdivisions 1, 2; 298.17; 298.22, subdivision 2, by 
  3.34            adding a subdivision; 298.2211, subdivision 2; 
  3.35            298.2213, subdivision 3; 298.2214, subdivision 1; 
  3.36            298.223, subdivision 1; 298.225, subdivision 1; 
  3.37            298.24, subdivision 1; 298.27; 298.28, subdivisions 1, 
  3.38            3, 4, 6, 7, 9, 9a, 9b, 10, 11, 15; 298.282, 
  3.39            subdivision 1; 298.292, subdivision 2; 298.293; 
  3.40            298.296, subdivision 2; 298.2961; 298.298; 298.75, 
  3.41            subdivisions 1, 2, 7; 299D.03, subdivision 5; 353D.01, 
  3.42            subdivision 2; 357.021, subdivision 1a; 383B.79, by 
  3.43            adding a subdivision; 461.12, by adding a subdivision; 
  3.44            469.040, subdivision 5; 469.169, by adding a 
  3.45            subdivision; 469.174, subdivisions 10, 10a, 12; 
  3.46            469.175, subdivisions 1, 5, 6, 6b, by adding a 
  3.47            subdivision; 469.176, subdivisions 1b, 1e, 3, 4g, by 
  3.48            adding a subdivision; 469.1763, subdivisions 3, 6, by 
  3.49            adding subdivisions; 469.177, subdivision 1; 469.1771, 
  3.50            subdivisions 1, 2a; 469.178, by adding a subdivision; 
  3.51            469.1812, subdivision 2; 469.1813, subdivision 6; 
  3.52            469.202, subdivision 2; 471.58; 473.123, subdivisions 
  3.53            1, 4, 7; 473.146, subdivision 4; 473.39, by adding a 
  3.54            subdivision; 473.446, subdivision 1; 473.625; 473.843, 
  3.55            subdivision 3; 475.58, subdivision 1; 477A.011, 
  3.56            subdivisions 27, 34, 36, by adding subdivisions; 
  3.57            477A.013, subdivisions 8, 9; 477A.03, subdivision 2; 
  3.58            477A.11, subdivisions 3, 4; 477A.12; 477A.14; 
  3.59            477A.145; 480.181, subdivision 1; 487.33, subdivision 
  3.60            5; 488A.03, by adding a subdivision; 488A.20, by 
  3.61            adding a subdivision; 574.34, subdivision 1; 609.75, 
  3.62            subdivision 1; Laws 1986, chapter 396, section 5; Laws 
  3.63            1992, chapter 499, article 7, section 31, as amended; 
  3.64            Laws 1996, chapter 471, article 2, section 29; Laws 
  3.65            1999, chapter 243, article 4, section 19; Laws 2000, 
  3.66            chapter 490, article 1, section 2; Laws 2000, chapter 
  3.67            490, article 2, section 1; Laws 2000, chapter 490, 
  3.68            article 7, section 3; Laws 2000, chapter 490, article 
  3.69            8, section 17; Laws 2000, chapter 490, article 11, 
  3.70            section 26; proposing coding for new law in Minnesota 
  3.71            Statutes, chapters 103B; 204D; 239; 245; 273; 290; 
  4.1             290A; 295; 296A; 297A; 297F; 297H; 299G; 375; 383A; 
  4.2             469; 473; 480; 484; proposing coding for new law as 
  4.3             Minnesota Statutes, chapters 144F; 290C; repealing 
  4.4             Minnesota Statutes 2000, sections 126C.30; 126C.31; 
  4.5             126C.32; 126C.33; 126C.34; 126C.35; 126C.36; 256.9657, 
  4.6             subdivision 2; 256B.19, subdivision 1b; 270.31; 
  4.7             270.32; 270.33; 270.34; 270.35; 270.36; 270.37; 
  4.8             270.38; 270.39; 272.02, subdivision 22; 273.1382; 
  4.9             273.37, subdivision 3; 289A.60, subdivision 3; 290.06, 
  4.10            subdivisions 25, 26; 290.0673; 290.068, subdivision 3; 
  4.11            290.095, subdivision 7; 290.23; 290.25; 290.31, 
  4.12            subdivisions 2, 2a, 3, 4, 5, 19; 290.9726, subdivision 
  4.13            7; 290A.04, subdivision 2j; 296A.16, subdivision 6; 
  4.14            296A.24, subdivision 3; 297A.61, subdivision 16; 
  4.15            297A.68, subdivision 21; 297A.71, subdivision 21; 
  4.16            297B.032; 297E.16, subdivision 3; 297F.21, subdivision 
  4.17            4; 297G.20, subdivision 5; 373.40, subdivision 7; 
  4.18            469.177, subdivisions 1a, 11; 469.1771, subdivision 
  4.19            2b; 473.123, subdivisions 2a, 3, 3a, 3c; 477A.011, 
  4.20            subdivisions 35, 36, 37; 477A.03, subdivision 4; 
  4.21            Minnesota Rules, parts 8120.0200; 8120.0500; 
  4.22            8120.0700; 8120.0900; 8120.1300; 8120.1600; 8120.2000; 
  4.23            8120.2100; 8120.2200; 8120.2300; 8120.2500; 8120.2700; 
  4.24            8120.2800; 8120.3000; 8120.3200; 8120.4300; 8120.4400; 
  4.25            8120.4500; 8120.4600; 8120.4900; 8120.5000; 8120.5100; 
  4.26            8120.5300. 
  4.27  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  4.28                             ARTICLE 1
  4.29                               REBATE
  4.30     Section 1.  Laws 2000, chapter 490, article 1, section 2, 
  4.31  is amended to read: 
  4.32     Sec. 2.  [SALES TAX REBATE.] 
  4.33     (a) An individual who: 
  4.34     (1) was eligible for a credit under Laws 1998, chapter 389, 
  4.35  article 1, section 1, and who filed for or received that credit 
  4.36  on or before November 30, 2000; or 
  4.37     (2) was a resident of Minnesota for any part of 1998, and 
  4.38  filed a 1998 Minnesota income tax return on or before November 
  4.39  30, 2000, and had a tax liability before refundable credits on 
  4.40  that return of at least $1 but did not file the claim for credit 
  4.41  authorized under Laws 1998, chapter 389, article 1, section 1, 
  4.42  as amended, and who was not allowed to be claimed as a dependent 
  4.43  on a 1998 federal income tax return filed by another person; or 
  4.44     (3) had the property taxes payable on his or her homestead 
  4.45  abated to zero under Laws 1998, chapter 383, section 20, shall 
  4.46  receive a sales tax rebate. 
  4.47     (b) The sales tax rebate for taxpayers who qualify under 
  4.48  paragraph (a) as married filing joint or head of household must 
  5.1   be computed according to the following schedule: 
  5.2        Income                                Sales Tax Rebate
  5.3    less than $2,500                                $168
  5.4    at least $2,500 but less than $5,000            $217
  5.5    at least $5,000 but less than $10,000           $231
  5.6    at least $10,000 but less than $15,000          $253
  5.7    at least $15,000 but less than $20,000          $275
  5.8    at least $20,000 but less than $25,000          $299
  5.9    at least $25,000 but less than $30,000          $312
  5.10   at least $30,000 but less than $35,000          $338
  5.11   at least $35,000 but less than $40,000          $369
  5.12   at least $40,000 but less than $45,000          $396
  5.13   at least $45,000 but less than $50,000          $417
  5.14   at least $50,000 but less than $60,000          $444
  5.15   at least $60,000 but less than $70,000          $476
  5.16   at least $70,000 but less than $80,000          $523
  5.17   at least $80,000 but less than $90,000          $562
  5.18   at least $90,000 but less than $100,000         $620
  5.19   at least $100,000 but less than $120,000        $671
  5.20   at least $120,000 but less than $140,000        $735
  5.21   at least $140,000 but less than $160,000        $795
  5.22   at least $160,000 but less than $180,000        $851
  5.23   at least $180,000 but less than $200,000        $904
  5.24   at least $200,000 but less than $400,000      $1,157
  5.25   at least $400,000 but less than $600,000      $1,522
  5.26   at least $600,000 but less than $800,000      $1,826
  5.27   at least $800,000 but less than $1,000,000    $2,093
  5.28   $1,000,000 and over                           $2,400
  5.29     (c) The sales tax rebate for individuals who qualify under 
  5.30  paragraph (a) as single or married filing separately must be 
  5.31  computed according to the following schedule: 
  5.32   Income                                    Sales Tax Rebate
  5.33   less than $2,500                                $95
  5.34   at least $2,500 but less than $5,000           $116
  5.35   at least $5,000 but less than $10,000          $137
  5.36   at least $10,000 but less than $15,000         $184
  6.1    at least $15,000 but less than $20,000         $210
  6.2    at least $20,000 but less than $25,000         $228
  6.3    at least $25,000 but less than $30,000         $238
  6.4    at least $30,000 but less than $40,000         $259
  6.5    at least $40,000 but less than $50,000         $290
  6.6    at least $50,000 but less than $70,000         $342
  6.7    at least $70,000 but less than $100,000        $435
  6.8    at least $100,000 but less than $140,000       $524
  6.9    at least $140,000 but less than $200,000       $632
  6.10   at least $200,000 but less than $400,000       $857
  6.11   at least $400,000 but less than $600,000     $1,128
  6.12   $600,000 and over                            $1,200
  6.13     (d) Individuals who were not residents of Minnesota for any 
  6.14  part of 1998 and who paid more than $10 in Minnesota sales tax 
  6.15  on nonbusiness consumer purchases in that year qualify for a 
  6.16  rebate under this paragraph only.  Qualifying nonresidents must 
  6.17  file a claim for rebate on a form prescribed by the commissioner 
  6.18  by November 30, 2000.  The claim must include receipts showing 
  6.19  the Minnesota sales tax paid and the date of the sale.  Taxes 
  6.20  paid on purchases allowed in the computation of federal taxable 
  6.21  income or reimbursed by an employer are not eligible for the 
  6.22  rebate.  The commissioner shall determine the qualifying taxes 
  6.23  paid and rebate the lesser of: 
  6.24     (1) 29.7 percent of that amount; or 
  6.25     (2) the maximum amount for which the claimant would have 
  6.26  been eligible as determined under paragraph (b) if the taxpayer 
  6.27  filed the 1998 federal income tax return as a married taxpayer 
  6.28  filing jointly or head of household, or as determined under 
  6.29  paragraph (c) for other taxpayers. 
  6.30     (e) "Income," for purposes of this section other than 
  6.31  paragraph (d), is taxable income as defined in section 63 of the 
  6.32  Internal Revenue Code of 1986, as amended through December 31, 
  6.33  1997, plus the sum of any additions to federal taxable income 
  6.34  for the taxpayer under Minnesota Statutes, section 290.01, 
  6.35  subdivision 19a, and reported on the original 1998 income tax 
  6.36  return, including subsequent adjustments to that return made 
  7.1   within the time limits specified in paragraph (l).  For an 
  7.2   individual who was a resident of Minnesota for less than the 
  7.3   entire year, the sales tax rebate equals the sales tax rebate 
  7.4   calculated under paragraph (b) or (c) multiplied by the 
  7.5   percentage determined pursuant to Minnesota Statutes, section 
  7.6   290.06, subdivision 2c, paragraph (e), as calculated on the 
  7.7   original 1998 income tax return, including subsequent 
  7.8   adjustments to that return made within the time limits specified 
  7.9   in paragraph (l).  For purposes of paragraph (d), "income" is 
  7.10  taxable income as defined in section 63 of the Internal Revenue 
  7.11  Code of 1986, as amended through December 31, 1997, and reported 
  7.12  on the taxpayer's original federal tax return for the first 
  7.13  taxable year beginning after December 31, 1997. 
  7.14     (f) Individuals who were residents of Minnesota for all of 
  7.15  1998, were not eligible for a rebate under paragraph (a), 
  7.16  attained the age of 18 on or before December 31, 1998, and 
  7.17  received in 1998 social security benefits as defined in section 
  7.18  86(d)(1) of the Internal Revenue Code of 1986, as amended 
  7.19  through December 31, 1999, are entitled to a rebate of $95.  If 
  7.20  the Social Security Administration or Railroad Retirement Board 
  7.21  is paying benefits to a recipient by electronic funds transfers 
  7.22  in 2000, the rebate under this paragraph must be paid by the 
  7.23  commissioner through electronic funds transfer to the same 
  7.24  financial institution and into the same account into which the 
  7.25  Social Security Administration or Railroad Retirement Board 
  7.26  transfers social security benefits in calendar year 2000. 
  7.27     (g) An individual who: 
  7.28     (1) was allowed to be claimed as a dependent on a 1998 
  7.29  federal income tax return filed by another person; 
  7.30     (2) would have otherwise been eligible for a rebate under 
  7.31  clause (a)(2); and 
  7.32     (3) reported earned income as defined in section 
  7.33  32(c)(2)(A)(i) of the Internal Revenue Code, 
  7.34  is eligible for a rebate under this paragraph only.  The rebate 
  7.35  under this paragraph equals 35 percent of the amount allowed 
  7.36  under the schedule in paragraph (c) based on the individual's 
  8.1   income.  For an individual who was a resident of Minnesota for 
  8.2   less than the entire year, the sales tax rebate equals the 
  8.3   rebate calculated under this paragraph multiplied by the 
  8.4   percentage determined pursuant to Minnesota Statutes, section 
  8.5   290.06, subdivision 2c, paragraph (e), as calculated on the 
  8.6   original 1998 income tax return. 
  8.7      (h) An individual who 
  8.8      (1) was a resident of Minnesota for any part of 1998; 
  8.9      (2) was not eligible for a rebate under paragraph (a) or 
  8.10  (f); 
  8.11     (3) was not allowed to be claimed as a dependent on a 1998 
  8.12  federal income tax return by another person; and 
  8.13     (4) filed a 1998 Minnesota income tax return before 
  8.14  November 30, 2000, in order to 
  8.15     (i) claim a credit under section 290.067, 290.0671, or 
  8.16  290.0674; 
  8.17     (ii) claim a refund of withheld taxes; or 
  8.18     (iii) claim a refund of estimated taxes, 
  8.19  is eligible for a rebate under this paragraph only.  For married 
  8.20  couples filing joint returns and heads of households, the rebate 
  8.21  equals the minimum amount in paragraph (b).  For single filers 
  8.22  and married individuals filing separate returns, the rebate 
  8.23  equals the minimum amount in paragraph (c).  For an individual 
  8.24  who was a resident of Minnesota for less than the entire year, 
  8.25  the sales tax rebate equals the rebate calculated under this 
  8.26  paragraph multiplied by the percentage determined pursuant to 
  8.27  Minnesota Statutes, section 290.06, subdivision 2c, paragraph 
  8.28  (e), as calculated on the original 1998 income tax return. 
  8.29     (i) For a fiscal year taxpayer, the dates in paragraphs (a) 
  8.30  through (d) are extended one month for each month in calendar 
  8.31  year 1998 that occurred prior to the start of the individual's 
  8.32  1998 fiscal tax year. 
  8.33     (j) Before payment, the commissioner of revenue shall 
  8.34  adjust the rebate as follows:  the rebates calculated in 
  8.35  paragraphs (b), (c), (d), (f), (g), and (h) must be 
  8.36  proportionately reduced to account for (i) rebates under 
  9.1   paragraphs (g) and (h), and (ii) 1998 income tax returns that 
  9.2   are filed on or after January 1, 2000, but before June 1, 2000, 
  9.3   so that the estimated amount of sales tax rebates payable under 
  9.4   paragraphs (b), (c), (d), (f), (g), and (h) on the date the 
  9.5   rebate is processed does not exceed $635,600,000.  The 
  9.6   adjustment under this paragraph is not a rule subject to 
  9.7   Minnesota Statutes, chapter 14. 
  9.8      (k) The commissioner of revenue may begin making sales tax 
  9.9   rebates by July 1, 2000.  Sales tax rebates not paid by January 
  9.10  1, 2001, bear interest at the rate specified in Minnesota 
  9.11  Statutes, section 270.75.  Sales tax rebates paid to individuals 
  9.12  qualifying under paragraph (x) bear interest at the rate 
  9.13  specified in Minnesota Statutes, section 270.75, beginning April 
  9.14  1, 2002. 
  9.15     (l) A sales tax rebate shall not be adjusted based on 
  9.16  changes to a 1998 income tax return that are made by order of 
  9.17  assessment after the date the rebate is processed, or made by 
  9.18  the taxpayer that are filed with the commissioner of revenue 
  9.19  after that date. 
  9.20     (m) Individuals who filed a joint income tax return for 
  9.21  1998 shall receive a joint sales tax rebate.  After the sales 
  9.22  tax rebate has been issued, but before the check has been 
  9.23  cashed, either joint claimant may request a separate check for 
  9.24  one-half of the joint sales tax rebate.  Notwithstanding 
  9.25  anything in this section to the contrary, if prior to payment, 
  9.26  the commissioner has been notified that persons who filed a 
  9.27  joint 1998 income tax return are living at separate addresses, 
  9.28  as indicated on their 1999 income tax return or otherwise, the 
  9.29  commissioner may issue separate checks to each person.  The 
  9.30  amount payable to each person is one-half of the total joint 
  9.31  rebate. 
  9.32     (n) If a rebate is received by the estate of a deceased 
  9.33  individual after the probate estate has been closed, and if the 
  9.34  original rebate check is returned to the commissioner with a 
  9.35  copy of the decree of descent or final account of the estate, 
  9.36  social security numbers, and addresses of the beneficiaries, the 
 10.1   commissioner may issue separate checks in proportion to their 
 10.2   share in the residuary estate in the names of the residuary 
 10.3   beneficiaries of the estate. 
 10.4      (o) The sales tax rebate is a "Minnesota tax law" for 
 10.5   purposes of Minnesota Statutes, section 270B.01, subdivision 8. 
 10.6      (p) The sales tax rebate is "an overpayment of any tax 
 10.7   collected by the commissioner" for purposes of Minnesota 
 10.8   Statutes, section 270.07, subdivision 5.  For purposes of this 
 10.9   paragraph, a joint sales tax rebate is payable to each spouse 
 10.10  equally. 
 10.11     (q) If the commissioner of revenue cannot locate an 
 10.12  individual entitled to a sales tax rebate by July 1, 2002, or if 
 10.13  an individual to whom a sales tax rebate was issued has not 
 10.14  cashed the check by July 1, 2002, the right to the sales tax 
 10.15  rebate lapses and the check must be deposited in the general 
 10.16  fund. 
 10.17     (r) Individuals entitled to a sales tax rebate pursuant to 
 10.18  paragraph (a), (f), (g), or (h) but who did not receive one, and 
 10.19  individuals who receive a sales tax rebate that was not 
 10.20  correctly computed, must file a claim with the commissioner 
 10.21  before July 1, 2001, in a form prescribed by the commissioner.  
 10.22  These claims must be treated as if they are a claim for refund 
 10.23  under Minnesota Statutes, section 289A.50, subdivisions 4 and 7. 
 10.24     (s) The sales tax rebate is a refund subject to revenue 
 10.25  recapture under Minnesota Statutes, chapter 270A.  The 
 10.26  commissioner of revenue shall remit the entire refund to the 
 10.27  claimant agency, which shall, upon the request of the spouse who 
 10.28  does not owe the debt, refund one-half of the joint sales tax 
 10.29  rebate to the spouse who does not owe the debt. 
 10.30     (t) The rebate is a reduction of fiscal year 2000 sales tax 
 10.31  revenues.  The amount necessary to make the sales tax rebates 
 10.32  and interest provided in this section is appropriated from the 
 10.33  general fund to the commissioner of revenue in fiscal year 2000 
 10.34  and is available until June 30, 2002. 
 10.35     (u) If a sales tax rebate check is cashed by someone other 
 10.36  than the payee or payees of the check, and the commissioner of 
 11.1   revenue determines that the check has been forged or improperly 
 11.2   endorsed or the commissioner determines that a rebate was 
 11.3   overstated or erroneously issued, the commissioner may issue an 
 11.4   order of assessment for the amount of the check or the amount 
 11.5   the check is overstated against the person or persons cashing 
 11.6   it.  The assessment must be made within two years after the 
 11.7   check is cashed, but if cashing the check constitutes theft 
 11.8   under Minnesota Statutes, section 609.52, or forgery under 
 11.9   Minnesota Statutes, section 609.631, the assessment can be made 
 11.10  at any time.  The assessment may be appealed administratively 
 11.11  and judicially.  The commissioner may take action to collect the 
 11.12  assessment in the same manner as provided by Minnesota Statutes, 
 11.13  chapter 289A, for any other order of the commissioner assessing 
 11.14  tax. 
 11.15     (v) Notwithstanding Minnesota Statutes, sections 9.031, 
 11.16  16A.40, 16B.49, 16B.50, and any other law to the contrary, the 
 11.17  commissioner of revenue may take whatever actions the 
 11.18  commissioner deems necessary to pay the rebates required by this 
 11.19  section, and may, in consultation with the commissioner of 
 11.20  finance and the state treasurer, contract with a private vendor 
 11.21  or vendors to process, print, and mail the rebate checks or 
 11.22  warrants required under this section and receive and disburse 
 11.23  state funds to pay those checks or warrants. 
 11.24     (w) The commissioner may pay rebates required by this 
 11.25  section by electronic funds transfer to individuals who 
 11.26  requested that their 1999 individual income tax refund be paid 
 11.27  through electronic funds transfer.  The commissioner may make 
 11.28  the electronic funds transfer payments to the same financial 
 11.29  institution and into the same account as the 1999 individual 
 11.30  income tax refund. 
 11.31     (x) An individual who: 
 11.32     (1) was a resident of Minnesota for any part of 1998; 
 11.33     (2) filed a 1998 federal income tax return on or before 
 11.34  November 30, 2000; 
 11.35     (3) had a federal tax liability before refundable credits 
 11.36  on that return of at least $1; and 
 12.1      (4) does not qualify for a rebate under paragraph (a), (f), 
 12.2   (g), or (h), 
 12.3   is eligible for a rebate under this paragraph only. 
 12.4   Qualifying individuals must file a claim for rebate on a form 
 12.5   prescribed by the commissioner by December 31, 2001.  The claim 
 12.6   must include a copy of the individual's 1998 federal income tax 
 12.7   return and a copy of the individual's 1998 Minnesota income tax 
 12.8   return.  An individual who was allowed to be claimed as a 
 12.9   dependent on a 1998 federal income tax return filed by another 
 12.10  person is eligible for a rebate under this paragraph only if the 
 12.11  individual had in 1998 earned income as defined in section 
 12.12  32(c)(2)(A)(i) of the Internal Revenue Code; the rebate of a 
 12.13  dependent eligible for a rebate under this paragraph equals 35 
 12.14  percent of the amount allowed under the schedule in paragraph 
 12.15  (c) based on the individual's income.  For all other individuals 
 12.16  who qualify under this paragraph, the rebate equals the amount 
 12.17  allowed based on the individual's income under the schedule in 
 12.18  paragraph (b) for married couples filing joint returns and heads 
 12.19  of household and the amount allowed based on the individual's 
 12.20  income under the schedule in paragraph (c) for single filers and 
 12.21  heads of household, provided, however, that any rebate payable 
 12.22  under this paragraph to an individual who was a part-year 
 12.23  resident of Minnesota in 1998 must be prorated according to the 
 12.24  formula applicable to part-year residents in paragraph (e). 
 12.25     The limitation on the total amount of rebates in Laws 2000, 
 12.26  chapter 490, article 1, section 2, paragraph (j), does not apply 
 12.27  to rebates issued under this paragraph.  To the extent 
 12.28  applicable, all other provisions of Laws 2000, chapter 490, 
 12.29  article 1, section 2, apply to the rebates paid under this 
 12.30  paragraph, including the adjustments made under section 2, 
 12.31  paragraph (j). 
 12.32     [EFFECTIVE DATE.] This section is effective the day 
 12.33  following final enactment. 
 12.34     Sec. 2.  [STATEMENT OF PURPOSE.] 
 12.35     (a) The state of Minnesota derives revenues from a variety 
 12.36  of taxes, fees, and other sources, including the state sales tax.
 13.1      (b) It is fair and reasonable to refund the existing state 
 13.2   budget surplus in the form of a rebate of nonbusiness consumer 
 13.3   sales taxes paid by individuals in calendar year 1999. 
 13.4      (c) Information concerning the amount of sales tax paid at 
 13.5   various income levels is contained in the Minnesota tax 
 13.6   incidence report, which is written by the commissioner of 
 13.7   revenue and presented to the legislature according to Minnesota 
 13.8   Statutes, section 270.0682. 
 13.9      (d) It is fair and reasonable to use information contained 
 13.10  in the Minnesota tax incidence report to determine the 
 13.11  proportionate share of the sales tax rebate due each eligible 
 13.12  taxpayer since no effective or practical mechanism exists for 
 13.13  determining the amount of actual sales tax paid by each eligible 
 13.14  individual. 
 13.15     Sec. 3.  [SALES TAX REBATE.] 
 13.16     Subdivision 1.  [ELIGIBILITY; REBATE BASED ON INCOME.] An 
 13.17  individual who was a resident of Minnesota for any part of 1999, 
 13.18  and filed a 1999 Minnesota income tax return on or before 
 13.19  November 30, 2001, and had a tax liability before refundable 
 13.20  credits on that return of at least $1 and who was not allowed to 
 13.21  be claimed as a dependent on a 1999 federal income tax return 
 13.22  filed by another person is eligible for a sales tax rebate based 
 13.23  on income under either subdivision 2 or 3. 
 13.24     Subd. 2.  [MARRIED JOINT AND HEAD OF HOUSEHOLD FILERS.] The 
 13.25  sales tax rebate for taxpayers who qualify under subdivision 1 
 13.26  and are married filing joint or head of household filers is 
 13.27  computed according to the following schedule: 
 13.28       Income                                Sales Tax Rebate
 13.29   less than $2,500                                $116
 13.30   at least $2,500 but less than $5,000            $145
 13.31   at least $5,000 but less than $10,000           $152
 13.32   at least $10,000 but less than $15,000          $167
 13.33   at least $15,000 but less than $20,000          $189
 13.34   at least $20,000 but less than $25,000          $205
 13.35   at least $25,000 but less than $30,000          $218
 13.36   at least $30,000 but less than $35,000          $237
 14.1    at least $35,000 but less than $40,000          $258
 14.2    at least $40,000 but less than $45,000          $280
 14.3    at least $45,000 but less than $50,000          $298
 14.4    at least $50,000 but less than $60,000          $305
 14.5    at least $60,000 but less than $70,000          $318
 14.6    at least $70,000 but less than $80,000          $346
 14.7    at least $80,000 but less than $90,000          $374
 14.8    at least $90,000 but less than $100,000         $405
 14.9    at least $100,000 but less than $120,000        $439
 14.10   at least $120,000 but less than $140,000        $480
 14.11   at least $140,000 but less than $160,000        $519
 14.12   at least $160,000 but less than $180,000        $556
 14.13   at least $180,000 but less than $200,000        $591
 14.14   at least $200,000 but less than $400,000        $756
 14.15   at least $400,000 but less than $600,000        $994
 14.16   at least $600,000 but less than $800,000      $1,193
 14.17   at least $800,000 but less than $1,000,000    $1,368
 14.18   $1,000,000 and over                           $1,600
 14.19     Subd. 3.  [SINGLE AND MARRIED SEPARATE FILERS.] The sales 
 14.20  tax rebate for individuals who qualify under subdivision 1 as 
 14.21  single or married filing separately must be computed according 
 14.22  to the following schedule: 
 14.23       Income                                Sales Tax Rebate
 14.24   less than $2,500                                $59
 14.25   at least $2,500 but less than $5,000            $62
 14.26   at least $5,000 but less than $10,000           $82
 14.27   at least $10,000 but less than $15,000          $98
 14.28   at least $15,000 but less than $20,000         $113
 14.29   at least $20,000 but less than $25,000         $127
 14.30   at least $25,000 but less than $30,000         $152
 14.31   at least $30,000 but less than $40,000         $165
 14.32   at least $40,000 but less than $50,000         $182
 14.33   at least $50,000 but less than $70,000         $233
 14.34   at least $70,000 but less than $100,000        $322
 14.35   at least $100,000 but less than $140,000       $388
 14.36   at least $140,000 but less than $200,000       $469
 15.1    at least $200,000 but less than $400,000       $636
 15.2    $400,000 and over                              $800
 15.3      Subd. 4.  [NONRESIDENTS.] Individuals who were not 
 15.4   residents of Minnesota for any part of 1999 and who paid more 
 15.5   than $10 in Minnesota sales tax under Minnesota Statutes, 
 15.6   chapter 297A, on nonbusiness consumer purchases in that year 
 15.7   qualify for a rebate under this subdivision only.  Qualifying 
 15.8   nonresidents must file a claim for rebate on a form prescribed 
 15.9   by the commissioner by November 30, 2001.  The claim must 
 15.10  include receipts showing the Minnesota sales tax paid and the 
 15.11  date of the sale.  Taxes paid on purchases allowed in the 
 15.12  computation of federal taxable income or reimbursed by an 
 15.13  employer are not eligible for the rebate.  The commissioner 
 15.14  shall determine the qualifying taxes paid and rebate the lesser 
 15.15  of: 
 15.16     (1) 20.24 percent of that amount; or 
 15.17     (2) the maximum amount for which the claimant would have 
 15.18  been eligible as determined under subdivision 2 if the taxpayer 
 15.19  filed the 1999 federal income tax return as a married taxpayer 
 15.20  filing jointly or head of household, or as determined under 
 15.21  subdivision 3 for other taxpayers. 
 15.22     Subd. 5.  [DEFINITION OF INCOME.] "Income," for purposes of 
 15.23  this section other than subdivision 4, is taxable income as 
 15.24  defined in section 63 of the Internal Revenue Code of 1986, as 
 15.25  amended through December 31, 1998, plus the sum of any additions 
 15.26  to federal taxable income for the taxpayer under Minnesota 
 15.27  Statutes, section 290.01, subdivision 19a, and reported on the 
 15.28  original 1999 income tax return, including subsequent 
 15.29  adjustments to that return made within the time limits specified 
 15.30  in subdivision 12.  For an individual who was a resident of 
 15.31  Minnesota for less than the entire year, the sales tax rebate 
 15.32  equals the sales tax rebate calculated under subdivision 2 or 3 
 15.33  multiplied by the percentage determined pursuant to Minnesota 
 15.34  Statutes, section 290.06, subdivision 2c, paragraph (e), as 
 15.35  calculated on the original 1999 income tax return, including 
 15.36  subsequent adjustments to that return made within the time 
 16.1   limits specified in subdivision 12.  For purposes of subdivision 
 16.2   4, "income" is taxable income as defined in section 63 of the 
 16.3   Internal Revenue Code of 1986, as amended through December 31, 
 16.4   1998, and reported on the taxpayer's original federal tax return 
 16.5   for the first taxable year beginning after December 31, 1998. 
 16.6      Subd. 6. [SOCIAL SECURITY AND PUBLIC PENSION 
 16.7   RECIPIENTS.] (a) An individual qualifies for a rebate of $59 
 16.8   under this subdivision if the individual: 
 16.9      (1) was a resident of Minnesota for all of calendar year 
 16.10  1999; 
 16.11     (2) is not eligible for a rebate under subdivision 7; 
 16.12     (3) attained the age of 18 on or before December 31, 1999; 
 16.13  and 
 16.14     (4)(i) received social security benefits as defined in 
 16.15  section 86(d)(1) of the Internal Revenue Code of 1986, as 
 16.16  amended through December 31, 2000, in calendar year 1999; or 
 16.17     (ii) received federal, state or local public pension or 
 16.18  disability benefits in calendar year 1999. 
 16.19     (b) An individual or married couple who qualifies for a 
 16.20  rebate under both this subdivision and subdivision 1 is eligible 
 16.21  for the rebate under whichever subdivision provides a larger 
 16.22  amount. 
 16.23     (c) If the Social Security Administration, Railroad 
 16.24  Retirement Board, or the administrator of a public pension is 
 16.25  paying benefits to a recipient by electronic funds transfers in 
 16.26  calendar year 2001, the commissioner may pay the rebate under 
 16.27  this subdivision through electronic funds transfer to the same 
 16.28  financial institution and into the same account into which those 
 16.29  benefits are transferred in calendar year 2001. 
 16.30     (d) For purposes of this subdivision, "public pension plan 
 16.31  administrator" means (1) a state and local public pension 
 16.32  administrator, (2) the federal Civil Service Retirement System, 
 16.33  (3) the United States Department of Defense for the military 
 16.34  retirement and survivors benefit programs, and (4) the Federal 
 16.35  Employees Retirement System. 
 16.36     (e) A state and local public pension administrator is an 
 17.1   entity paying benefits under a pension plan enumerated in 
 17.2   Minnesota Statutes, section 356.20, subdivision 2.  Each state 
 17.3   and local pension administrator shall provide to the 
 17.4   commissioner of revenue, in a form the commissioner prescribes, 
 17.5   a list of individuals to whom it pays benefits that meet the 
 17.6   requirements of paragraph (a), clauses (1) and (3). 
 17.7      Subd. 7.  [DEPENDENTS.] An individual who: 
 17.8      (1) was allowed to be claimed as a dependent on a 1999 
 17.9   federal income tax return filed by another person; 
 17.10     (2) would have otherwise been eligible for a rebate under 
 17.11  subdivision 1; and 
 17.12     (3) reported earned income as defined in section 
 17.13  32(c)(2)(A)(i) of the Internal Revenue Code, 
 17.14  is eligible for a rebate under this subdivision only.  The 
 17.15  rebate under this subdivision equals 35 percent of the amount 
 17.16  allowed under the schedule in subdivision 3 based on the 
 17.17  individual's income.  For an individual who was a resident of 
 17.18  Minnesota for less than the entire year, the sales tax rebate 
 17.19  equals the rebate calculated under this subdivision multiplied 
 17.20  by the percentage determined pursuant to Minnesota Statutes, 
 17.21  section 290.06, subdivision 2c, paragraph (e), as calculated on 
 17.22  the original 1999 income tax return. 
 17.23     Subd. 8.  [CREDIT RECIPIENTS.] An individual who 
 17.24     (1) was a resident of Minnesota for any part of 1999; 
 17.25     (2) was not eligible for a rebate under subdivision 1, 6, 
 17.26  or 7; 
 17.27     (3) was not allowed to be claimed as a dependent on a 1999 
 17.28  federal income tax return by another person; and 
 17.29     (4)(i) claimed a refund under Minnesota Statutes, chapter 
 17.30  290A, for property taxes paid in 2000 or rent constituting 
 17.31  property taxes paid in 1999; or 
 17.32     (ii) filed a 1999 Minnesota income tax return before 
 17.33  November 30, 2001, in order to 
 17.34     (A) claim a credit under section 290.067, 290.0671, or 
 17.35  290.0674; 
 17.36     (B) claim a refund of withheld taxes; or 
 18.1      (C) claim a refund of estimated taxes, 
 18.2   is eligible for a rebate under this subdivision only.  For 
 18.3   married couples filing joint returns and heads of households, 
 18.4   the rebate equals the minimum amount in subdivision 2.  For 
 18.5   single filers and married individuals filing separate returns 
 18.6   and for rebates based on refunds under Minnesota Statutes, 
 18.7   chapter 290A, the rebate equals the minimum amount in 
 18.8   subdivision 3.  For an individual who was a resident of 
 18.9   Minnesota for less than the entire year, the sales tax rebate 
 18.10  equals the rebate calculated under this subdivision multiplied 
 18.11  by the percentage determined under Minnesota Statutes, section 
 18.12  290.06, subdivision 2c, paragraph (e), as calculated on the 
 18.13  original 1999 income tax return. 
 18.14     Subd. 9.  [CLAIMS BASED ON FEDERAL LIABILITIES.] An 
 18.15  individual who: 
 18.16     (1) was a resident of Minnesota for any part of 1999; 
 18.17     (2) filed a 1999 federal income tax return on or before 
 18.18  November 30, 2001; 
 18.19     (3) had a federal tax liability before refundable credits 
 18.20  on that return of at least $1; and 
 18.21     (4) does not qualify for a rebate under subdivision 1, 6, 
 18.22  7, or 8, 
 18.23  is eligible for a rebate under this paragraph only. 
 18.24  Qualifying individuals must file a claim for rebate on a form 
 18.25  prescribed by the commissioner by December 31, 2001.  The claim 
 18.26  must include a copy of the individual's 1999 federal income tax 
 18.27  return and a copy of the individual's 1999 Minnesota income tax 
 18.28  return.  An individual who was allowed to be claimed as a 
 18.29  dependent on a 1999 federal income tax return filed by another 
 18.30  person is eligible for a rebate under this paragraph only if the 
 18.31  individual had in 1999 earned income as defined in section 
 18.32  32(c)(2)(A)(i) of the Internal Revenue Code; the rebate of a 
 18.33  dependent eligible for a rebate under this paragraph equals 35 
 18.34  percent of the amount allowed under the schedule in subdivision 
 18.35  3 based on the individual's income.  For all other individuals 
 18.36  who qualify under this paragraph, the rebate equals the amount 
 19.1   allowed based on the individual's income under the schedule in 
 19.2   subdivision 2 for married couples filing joint returns and heads 
 19.3   of household and the amount allowed based on the individual's 
 19.4   income under the schedule in subdivision 3 for single filers and 
 19.5   heads of household, provided, however, that any rebate payable 
 19.6   under this paragraph to an individual who was a part-year 
 19.7   resident of Minnesota in 1998 must be prorated according to the 
 19.8   formula applicable to part-year residents in subdivision 5. 
 19.9      Subd. 10.  [FISCAL YEAR TAXPAYERS.] For a fiscal year 
 19.10  taxpayer, the dates in subdivisions 1 through 4 are extended one 
 19.11  month for each month in calendar year 1999 that occurred prior 
 19.12  to the start of the individual's 1999 fiscal tax year. 
 19.13     Subd. 11.  [PAYMENT DATES; INTEREST.] The commissioner of 
 19.14  revenue may begin paying sales tax rebates by July 1, 2001. 
 19.15  Sales tax rebates not paid by January 1, 2002, bear interest at 
 19.16  the rate specified in Minnesota Statutes, section 270.75. 
 19.17     Subd. 12.  [NO ADJUSTMENTS AFTER PROCESSING.] A sales tax 
 19.18  rebate may not be adjusted based on changes to a 1999 income tax 
 19.19  return that are made by order of assessment after the date the 
 19.20  rebate is processed, or made by the taxpayer that are filed with 
 19.21  the commissioner of revenue after that date. 
 19.22     Subd. 13.  [JOINT REBATE RULES.] Individuals who filed a 
 19.23  joint income tax return for 1999 must receive a joint sales tax 
 19.24  rebate.  After the sales tax rebate has been issued, but before 
 19.25  the check has been cashed, either joint claimant may request a 
 19.26  separate check for one-half of the joint sales tax rebate.  
 19.27  Notwithstanding anything in this section to the contrary, if 
 19.28  prior to payment, the commissioner has been notified that 
 19.29  persons who filed a joint 1999 income tax return are living at 
 19.30  separate addresses, as indicated on their 2000 income tax return 
 19.31  or otherwise, the commissioner may issue separate checks to each 
 19.32  person.  The amount payable to each person is one-half of the 
 19.33  total joint rebate. 
 19.34     Subd. 14.  [DECEASED INDIVIDUALS.] If a rebate is received 
 19.35  by the estate of a deceased individual after the probate estate 
 19.36  has been closed, and if the original rebate check is returned to 
 20.1   the commissioner with a copy of the decree of descent or final 
 20.2   account of the estate, social security numbers, and addresses of 
 20.3   the beneficiaries, the commissioner may issue separate checks in 
 20.4   proportion to their share in the residuary estate in the names 
 20.5   of the residuary beneficiaries of the estate. 
 20.6      Subd. 15.  [APPLICATION OF OTHER LAW.] (a) The sales tax 
 20.7   rebate is a "Minnesota tax law" for purposes of Minnesota 
 20.8   Statutes, section 270B.01, subdivision 8. 
 20.9      (b) The sales tax rebate is "an overpayment of any tax 
 20.10  collected by the commissioner" for purposes of Minnesota 
 20.11  Statutes, section 270.07, subdivision 5.  For purposes of this 
 20.12  subdivision, a joint sales tax rebate is payable to each spouse 
 20.13  equally. 
 20.14     (c) The sales tax rebate is a refund subject to revenue 
 20.15  recapture under Minnesota Statutes, chapter 270A.  The 
 20.16  commissioner of revenue shall remit the entire refund to the 
 20.17  claimant agency, which shall, upon the request of the spouse who 
 20.18  does not owe the debt, refund one-half of the joint sales tax 
 20.19  rebate to the spouse who does not owe the debt. 
 20.20     Subd. 16.  [LAPSE OF ENTITLEMENT.] If the commissioner of 
 20.21  revenue cannot locate an individual entitled to a sales tax 
 20.22  rebate by July 1, 2003, or if an individual to whom a sales tax 
 20.23  rebate was issued has not cashed the check by July 1, 2003, the 
 20.24  right to the sales tax rebate lapses and the check must be 
 20.25  deposited in the general fund. 
 20.26     Subd. 17.  [CLAIMS FOR UNPAID REBATES.] Individuals 
 20.27  entitled to a sales tax rebate pursuant to subdivision 1, 6, 7, 
 20.28  8, or 9 but who did not receive one, and individuals who receive 
 20.29  a sales tax rebate that was not correctly computed, must file a 
 20.30  claim with the commissioner before July 1, 2002, in a form 
 20.31  prescribed by the commissioner.  These claims must be treated as 
 20.32  if they are a claim for refund under Minnesota Statutes, section 
 20.33  289A.50, subdivisions 4 and 7. 
 20.34     Subd. 18.  [APPROPRIATION.] The rebate is a reduction of 
 20.35  fiscal year 2001 sales tax revenues.  The amount necessary to 
 20.36  make the sales tax rebates and interest provided in this section 
 21.1   is appropriated from the general fund to the commissioner of 
 21.2   revenue in fiscal year 2001 and is available until June 30, 2003.
 21.3      Subd. 19.  [ILLEGALLY CASHED CHECKS.] If a sales tax rebate 
 21.4   check is cashed by someone other than the payee or payees of the 
 21.5   check, and the commissioner of revenue determines that the check 
 21.6   has been forged or improperly endorsed or the commissioner 
 21.7   determines that a rebate was overstated or erroneously issued, 
 21.8   the commissioner may issue an order of assessment for the amount 
 21.9   of the check or the amount the check is overstated against the 
 21.10  person or persons cashing it.  The assessment must be made 
 21.11  within two years after the check is cashed, but if cashing the 
 21.12  check constitutes theft under Minnesota Statutes, section 
 21.13  609.52, or forgery under Minnesota Statutes, section 609.631, 
 21.14  the assessment can be made at any time.  The assessment may be 
 21.15  appealed administratively and judicially.  The commissioner may 
 21.16  take action to collect the assessment in the same manner as 
 21.17  provided by Minnesota Statutes, chapter 289A, for any other 
 21.18  order of the commissioner assessing tax. 
 21.19     Subd. 20.  [AUTHORITY TO CONTRACT WITH VENDOR.] 
 21.20  Notwithstanding Minnesota Statutes, sections 9.031, 16A.40, 
 21.21  16B.49, 16B.50, and any other law to the contrary, the 
 21.22  commissioner of revenue may take whatever actions the 
 21.23  commissioner deems necessary to pay the rebates required by this 
 21.24  section, and may, in consultation with the commissioner of 
 21.25  finance and the state treasurer, contract with a private vendor 
 21.26  or vendors to process, print, and mail the rebate checks or 
 21.27  warrants required under this section and receive and disburse 
 21.28  state funds to pay those checks or warrants. 
 21.29     Subd. 21.  [ELECTRONIC PAYMENT.] The commissioner may pay 
 21.30  rebates required by this section by electronic funds transfer to 
 21.31  individuals who requested that their 2000 individual income tax 
 21.32  refund be paid through electronic funds transfer.  The 
 21.33  commissioner may make the electronic funds transfer payments to 
 21.34  the same financial institution and into the same account as the 
 21.35  2000 individual income tax refund. 
 21.36     Subd. 22.  [ADJUSTMENTS.] Before payment, the commissioner 
 22.1   of revenue shall adjust the rebate as follows: 
 22.2      the rebates calculated in subdivisions 2, 3, 4, 6, 7, and 8 
 22.3   must be proportionately reduced to account for (i) rebates under 
 22.4   subdivisions 7 and 8, and (ii) 1999 income tax returns that are 
 22.5   filed on or after January 1, 2001, but before April 1, 2001, so 
 22.6   that the estimated amount of sales tax rebates payable under 
 22.7   subdivisions 2, 3, 4, 6, 7, 8, and 9 on the date the rebate is 
 22.8   processed does not exceed $425,000,000.  The adjustment under 
 22.9   this subdivision is not a rule subject to Minnesota Statutes, 
 22.10  chapter 14. 
 22.11     Sec. 4.  [APPROPRIATIONS.] 
 22.12     (a) $500,000 in fiscal year 2001 and $1,231,600 in fiscal 
 22.13  year 2002 are appropriated from the general fund to the 
 22.14  commissioner of revenue to administer the sales tax rebates in 
 22.15  section 3.  Any unencumbered balance remaining on June 30, 2001, 
 22.16  does not cancel but is available for expenditure by the 
 22.17  commissioner of revenue until June 30, 2002.  Notwithstanding 
 22.18  Minnesota Statutes, section 16A.285, the commissioner of revenue 
 22.19  may not use this appropriation for any purpose other than 
 22.20  administering the sales tax rebates.  This is a one-time 
 22.21  appropriation and may not be added to the agency's budget base. 
 22.22     (b) $410,000 is appropriated from the general fund to the 
 22.23  state treasurer to pay the cost of clearing sales tax rebate 
 22.24  checks through commercial banks. 
 22.25     (c) The amount necessary to pay the rebates under section 1 
 22.26  is appropriated from the general fund to the commissioner of 
 22.27  revenue for fiscal years 2001 and 2002. 
 22.28     [EFFECTIVE DATE.] This section is effective the day 
 22.29  following final enactment. 
 22.30                             ARTICLE 2
 22.31                        PROPERTY TAX REFORM
 22.32     Section 1.  Minnesota Statutes 2000, section 126C.13, 
 22.33  subdivision 1, is amended to read: 
 22.34     Subdivision 1.  [GENERAL EDUCATION TAX RATE.] The 
 22.35  commissioner must establish the general education tax rate by 
 22.36  July 1 of each year for levies payable in the following year.  
 23.1   The general education tax capacity rate must be a rate, rounded 
 23.2   up to the nearest hundredth of a percent, that, when applied to 
 23.3   the adjusted net tax capacity for all districts, raises the 
 23.4   amount specified in this subdivision.  The general education tax 
 23.5   rate must be the rate that raises $1,330,000,000 $1,230,000,000 
 23.6   for fiscal year 2001 2003, and later fiscal years.  The general 
 23.7   education tax rate may not be changed due to changes or 
 23.8   corrections made to a district's adjusted net tax capacity after 
 23.9   the tax rate has been established. 
 23.10     Sec. 2.  Minnesota Statutes 2000, section 126C.17, 
 23.11  subdivision 2, is amended to read: 
 23.12     Subd. 2.  [REFERENDUM ALLOWANCE LIMIT.] Notwithstanding 
 23.13  subdivision 1, a district's referendum allowance must not exceed 
 23.14  the greater of:  
 23.15     (1) the district's referendum allowance for fiscal year 
 23.16  1994 times 1.056; 
 23.17     (2) 25 percent of the formula allowance; or 
 23.18     (3) for a newly reorganized district created after July 1, 
 23.19  1994, the sum of the referendum revenue authority for the 
 23.20  reorganizing districts for the fiscal year preceding the 
 23.21  reorganization, divided by the sum of the resident marginal cost 
 23.22  pupil units of the reorganizing districts for the fiscal year 
 23.23  preceding the reorganization. 
 23.24     [EFFECTIVE DATE.] This section is effective for revenue for 
 23.25  fiscal year 2003. 
 23.26     Sec. 3.  Minnesota Statutes 2000, section 126C.17, is 
 23.27  amended by adding a subdivision to read: 
 23.28     Subd. 7a.  [REFERENDUM TAX BASE REPLACEMENT AID.] For 
 23.29  fiscal year 2003 and thereafter, each school district that has a 
 23.30  referendum allowance under subdivision 1 in excess of $150 is 
 23.31  eligible for referendum tax base replacement aid.  The aid for 
 23.32  each eligible district is equal to the rate determined by 
 23.33  dividing the amount of the referendum levy which exceeds $150 
 23.34  times the district's resident marginal cost pupil units by the 
 23.35  district's referendum market value multiplied by the district's 
 23.36  market value of class 3 property.  The referendum tax base 
 24.1   replacement aid for each eligible district must be used to 
 24.2   reduce the district's referendum levy and must be paid to the 
 24.3   district each year that the referendum authority remains in 
 24.4   effect. 
 24.5      The commissioner of revenue, in consultation with the 
 24.6   commissioner of children, families, and learning, shall certify 
 24.7   the tax rate determined under this subdivision to the county 
 24.8   auditor of each county in which a school district has a rate 
 24.9   determined to be greater than zero. 
 24.10     Sec. 4.  Minnesota Statutes 2000, section 273.11, 
 24.11  subdivision 1a, is amended to read: 
 24.12     Subd. 1a.  [LIMITED MARKET VALUE.] In the case of all 
 24.13  property classified as agricultural homestead or nonhomestead, 
 24.14  residential homestead or nonhomestead, or noncommercial seasonal 
 24.15  recreational residential, the assessor shall compare the value 
 24.16  with that the taxable portion of the value determined in the 
 24.17  preceding assessment.  The amount of the increase entered in the 
 24.18  current assessment shall not exceed the greater of (1) 8.5 
 24.19  percent of the value in the preceding assessment, or (2) 15 
 24.20  percent of the difference between the current assessment and the 
 24.21  preceding assessment. 
 24.22     For assessment year 2002, the amount of the increase shall 
 24.23  not exceed the greater of (1) 12 percent of the value in the 
 24.24  preceding assessment, or (2) 20 percent of the difference 
 24.25  between the current assessment and the preceding assessment. 
 24.26     For assessment year 2003, the amount of the increase shall 
 24.27  not exceed the greater of (1) 12 percent of the value in the 
 24.28  preceding assessment, or (2) 25 percent of the difference 
 24.29  between the current assessment and the preceding assessment. 
 24.30     For assessment year 2004, the amount of the increase shall 
 24.31  not exceed the greater of (1) 12 percent of the value in the 
 24.32  preceding assessment, or (2) 33 percent of the difference 
 24.33  between the current assessment and the preceding assessment. 
 24.34     For assessment year 2005, the amount of the increase shall 
 24.35  not exceed the greater of (1) 12 percent of the value in the 
 24.36  preceding assessment, or (2) 50 percent of the difference 
 25.1   between the current assessment and the preceding assessment.  
 25.2      This limitation shall not apply to increases in value due 
 25.3   to improvements.  For purposes of this subdivision, the term 
 25.4   "assessment" means the value prior to any exclusion under 
 25.5   subdivision 16. 
 25.6      The provisions of this subdivision shall be in effect only 
 25.7   through assessment year 2001 2005 as provided in this 
 25.8   subdivision. 
 25.9      For purposes of the assessment/sales ratio study conducted 
 25.10  under section 127A.48, and the computation of state aids paid 
 25.11  under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and 
 25.12  477A, market values and net tax capacities determined under this 
 25.13  subdivision and subdivision 16, shall be used. 
 25.14     [EFFECTIVE DATE.] This section is effective the day 
 25.15  following final enactment. 
 25.16     Sec. 5.  Minnesota Statutes 2000, section 273.13, 
 25.17  subdivision 22, is amended to read: 
 25.18     Subd. 22.  [CLASS 1.] (a) Except as provided in subdivision 
 25.19  23, real estate which is residential and used for homestead 
 25.20  purposes is class 1.  The market value of class 1a property must 
 25.21  be determined based upon the value of the house, garage, and 
 25.22  land.  
 25.23     The first $76,000 $200,000 of market value of class 1a 
 25.24  property has a net class rate of one percent of its market 
 25.25  value; and the market value of class 1a property that 
 25.26  exceeds $76,000 $200,000 has a class rate of 1.65 1.5 percent of 
 25.27  its market value.  
 25.28     (b) Class 1b property includes homestead real estate or 
 25.29  homestead manufactured homes used for the purposes of a 
 25.30  homestead by 
 25.31     (1) any blind person, or the blind person and the blind 
 25.32  person's spouse; or 
 25.33     (2) any person, hereinafter referred to as "veteran," who: 
 25.34     (i) served in the active military or naval service of the 
 25.35  United States; and 
 25.36     (ii) is entitled to compensation under the laws and 
 26.1   regulations of the United States for permanent and total 
 26.2   service-connected disability due to the loss, or loss of use, by 
 26.3   reason of amputation, ankylosis, progressive muscular 
 26.4   dystrophies, or paralysis, of both lower extremities, such as to 
 26.5   preclude motion without the aid of braces, crutches, canes, or a 
 26.6   wheelchair; and 
 26.7      (iii) has acquired a special housing unit with special 
 26.8   fixtures or movable facilities made necessary by the nature of 
 26.9   the veteran's disability, or the surviving spouse of the 
 26.10  deceased veteran for as long as the surviving spouse retains the 
 26.11  special housing unit as a homestead; or 
 26.12     (3) any person who: 
 26.13     (i) is permanently and totally disabled and 
 26.14     (ii) receives 90 percent or more of total household income, 
 26.15  as defined in section 290A.03, subdivision 5, from 
 26.16     (A) aid from any state as a result of that disability; or 
 26.17     (B) supplemental security income for the disabled; or 
 26.18     (C) workers' compensation based on a finding of total and 
 26.19  permanent disability; or 
 26.20     (D) social security disability, including the amount of a 
 26.21  disability insurance benefit which is converted to an old age 
 26.22  insurance benefit and any subsequent cost of living increases; 
 26.23  or 
 26.24     (E) aid under the federal Railroad Retirement Act of 1937, 
 26.25  United States Code Annotated, title 45, section 228b(a)5; or 
 26.26     (F) a pension from any local government retirement fund 
 26.27  located in the state of Minnesota as a result of that 
 26.28  disability; or 
 26.29     (G) pension, annuity, or other income paid as a result of 
 26.30  that disability from a private pension or disability plan, 
 26.31  including employer, employee, union, and insurance plans and 
 26.32     (iii) has household income as defined in section 290A.03, 
 26.33  subdivision 5, of $50,000 or less; or 
 26.34     (4) any person who is permanently and totally disabled and 
 26.35  whose household income as defined in section 290A.03, 
 26.36  subdivision 5, is 275 percent or less of the federal poverty 
 27.1   level. 
 27.2      Property is classified and assessed under clause (4) only 
 27.3   if the government agency or income-providing source certifies, 
 27.4   upon the request of the homestead occupant, that the homestead 
 27.5   occupant satisfies the disability requirements of this paragraph.
 27.6      Property is classified and assessed pursuant to clause (1) 
 27.7   only if the commissioner of economic security certifies to the 
 27.8   assessor that the homestead occupant satisfies the requirements 
 27.9   of this paragraph.  
 27.10     Permanently and totally disabled for the purpose of this 
 27.11  subdivision means a condition which is permanent in nature and 
 27.12  totally incapacitates the person from working at an occupation 
 27.13  which brings the person an income.  The first $32,000 market 
 27.14  value of class 1b property has a net class rate of .45 percent 
 27.15  of its market value.  The remaining market value of class 1b 
 27.16  property has a net class rate using the rates for class 1 or 
 27.17  class 2a property, whichever is appropriate, of similar market 
 27.18  value.  
 27.19     (c) Class 1c property is commercial use real property that 
 27.20  abuts a lakeshore line and is devoted to temporary and seasonal 
 27.21  residential occupancy for recreational purposes but not devoted 
 27.22  to commercial purposes for more than 250 days in the year 
 27.23  preceding the year of assessment, and that includes a portion 
 27.24  used as a homestead by the owner, which includes a dwelling 
 27.25  occupied as a homestead by a shareholder of a corporation that 
 27.26  owns the resort or a partner in a partnership that owns the 
 27.27  resort, even if the title to the homestead is held by the 
 27.28  corporation or partnership.  For purposes of this clause, 
 27.29  property is devoted to a commercial purpose on a specific day if 
 27.30  any portion of the property, excluding the portion used 
 27.31  exclusively as a homestead, is used for residential occupancy 
 27.32  and a fee is charged for residential occupancy.  Class 1c 
 27.33  property has a class rate of one 0.8 percent of total market 
 27.34  value with the following limitation:  the area of the property 
 27.35  must not exceed 100 feet of lakeshore footage for each cabin or 
 27.36  campsite located on the property up to a total of 800 feet and 
 28.1   500 feet in depth, measured away from the lakeshore.  If any 
 28.2   portion of the class 1c resort property is classified as class 
 28.3   4c under subdivision 25, the entire property must meet the 
 28.4   requirements of subdivision 25, paragraph (d), clause (1), to 
 28.5   qualify for class 1c treatment under this paragraph. 
 28.6      (d) Class 1d property includes structures that meet all of 
 28.7   the following criteria: 
 28.8      (1) the structure is located on property that is classified 
 28.9   as agricultural property under section 273.13, subdivision 23; 
 28.10     (2) the structure is occupied exclusively by seasonal farm 
 28.11  workers during the time when they work on that farm, and the 
 28.12  occupants are not charged rent for the privilege of occupying 
 28.13  the property, provided that use of the structure for storage of 
 28.14  farm equipment and produce does not disqualify the property from 
 28.15  classification under this paragraph; 
 28.16     (3) the structure meets all applicable health and safety 
 28.17  requirements for the appropriate season; and 
 28.18     (4) the structure is not salable as residential property 
 28.19  because it does not comply with local ordinances relating to 
 28.20  location in relation to streets or roads. 
 28.21     The market value of class 1d property has the same class 
 28.22  rates as class 1a property under paragraph (a). 
 28.23     [EFFECTIVE DATE.] This section is effective for taxes 
 28.24  payable in 2002 and thereafter. 
 28.25     Sec. 6.  Minnesota Statutes 2000, section 273.13, 
 28.26  subdivision 23, is amended to read: 
 28.27     Subd. 23.  [CLASS 2.] (a) Class 2a property is agricultural 
 28.28  land including any improvements that is homesteaded.  The market 
 28.29  value of the house and garage and immediately surrounding one 
 28.30  acre of land has the same class rates as class 1a property under 
 28.31  subdivision 22.  The value of the remaining land including 
 28.32  improvements up to $115,000 has a net class rate of 0.35 percent 
 28.33  of market value.  The value of class 2a property over $115,000 
 28.34  of market value up to and including $600,000 market value has a 
 28.35  net class rate of 0.8 0.6 percent of market value.  The 
 28.36  remaining property over $600,000 market value has a class rate 
 29.1   of 1.20 one percent of market value. 
 29.2      (b) Class 2b property is (1) real estate, rural in 
 29.3   character and used exclusively for growing trees for timber, 
 29.4   lumber, and wood and wood products; (2) real estate that is not 
 29.5   improved with a structure and is used exclusively for growing 
 29.6   trees for timber, lumber, and wood and wood products, if the 
 29.7   owner has participated or is participating in a cost-sharing 
 29.8   program for afforestation, reforestation, or timber stand 
 29.9   improvement on that particular property, administered or 
 29.10  coordinated by the commissioner of natural resources; (3) real 
 29.11  estate that is nonhomestead agricultural land; or (4) a landing 
 29.12  area or public access area of a privately owned public use 
 29.13  airport.  Class 2b property has a net class rate of 1.20 one 
 29.14  percent of market value. 
 29.15     (c) Agricultural land as used in this section means 
 29.16  contiguous acreage of ten acres or more, used during the 
 29.17  preceding year for agricultural purposes.  "Agricultural 
 29.18  purposes" as used in this section means the raising or 
 29.19  cultivation of agricultural products or enrollment in the 
 29.20  Reinvest in Minnesota program under sections 103F.501 to 
 29.21  103F.535 or the federal Conservation Reserve Program as 
 29.22  contained in Public Law Number 99-198.  Contiguous acreage on 
 29.23  the same parcel, or contiguous acreage on an immediately 
 29.24  adjacent parcel under the same ownership, may also qualify as 
 29.25  agricultural land, but only if it is pasture, timber, waste, 
 29.26  unusable wild land, or land included in state or federal farm 
 29.27  programs.  Agricultural classification for property shall be 
 29.28  determined excluding the house, garage, and immediately 
 29.29  surrounding one acre of land, and shall not be based upon the 
 29.30  market value of any residential structures on the parcel or 
 29.31  contiguous parcels under the same ownership. 
 29.32     (d) Real estate, excluding the house, garage, and 
 29.33  immediately surrounding one acre of land, of less than ten acres 
 29.34  which is exclusively and intensively used for raising or 
 29.35  cultivating agricultural products, shall be considered as 
 29.36  agricultural land.  
 30.1      Land shall be classified as agricultural even if all or a 
 30.2   portion of the agricultural use of that property is the leasing 
 30.3   to, or use by another person for agricultural purposes. 
 30.4      Classification under this subdivision is not determinative 
 30.5   for qualifying under section 273.111. 
 30.6      The property classification under this section supersedes, 
 30.7   for property tax purposes only, any locally administered 
 30.8   agricultural policies or land use restrictions that define 
 30.9   minimum or maximum farm acreage. 
 30.10     (e) The term "agricultural products" as used in this 
 30.11  subdivision includes production for sale of:  
 30.12     (1) livestock, dairy animals, dairy products, poultry and 
 30.13  poultry products, fur-bearing animals, horticultural and nursery 
 30.14  stock described in sections 18.44 to 18.61, fruit of all kinds, 
 30.15  vegetables, forage, grains, bees, and apiary products by the 
 30.16  owner; 
 30.17     (2) fish bred for sale and consumption if the fish breeding 
 30.18  occurs on land zoned for agricultural use; 
 30.19     (3) the commercial boarding of horses if the boarding is 
 30.20  done in conjunction with raising or cultivating agricultural 
 30.21  products as defined in clause (1); 
 30.22     (4) property which is owned and operated by nonprofit 
 30.23  organizations used for equestrian activities, excluding racing; 
 30.24     (5) game birds and waterfowl bred and raised for use on a 
 30.25  shooting preserve licensed under section 97A.115; 
 30.26     (6) insects primarily bred to be used as food for animals; 
 30.27  and 
 30.28     (7) trees, grown for sale as a crop, and not sold for 
 30.29  timber, lumber, wood, or wood products. 
 30.30     (f) If a parcel used for agricultural purposes is also used 
 30.31  for commercial or industrial purposes, including but not limited 
 30.32  to:  
 30.33     (1) wholesale and retail sales; 
 30.34     (2) processing of raw agricultural products or other goods; 
 30.35     (3) warehousing or storage of processed goods; and 
 30.36     (4) office facilities for the support of the activities 
 31.1   enumerated in clauses (1), (2), and (3), 
 31.2   the assessor shall classify the part of the parcel used for 
 31.3   agricultural purposes as class 1b, 2a, or 2b, whichever is 
 31.4   appropriate, and the remainder in the class appropriate to its 
 31.5   use.  The grading, sorting, and packaging of raw agricultural 
 31.6   products for first sale is considered an agricultural purpose.  
 31.7   A greenhouse or other building where horticultural or nursery 
 31.8   products are grown that is also used for the conduct of retail 
 31.9   sales must be classified as agricultural if it is primarily used 
 31.10  for the growing of horticultural or nursery products from seed, 
 31.11  cuttings, or roots and occasionally as a showroom for the retail 
 31.12  sale of those products.  Use of a greenhouse or building only 
 31.13  for the display of already grown horticultural or nursery 
 31.14  products does not qualify as an agricultural purpose.  
 31.15     The assessor shall determine and list separately on the 
 31.16  records the market value of the homestead dwelling and the one 
 31.17  acre of land on which that dwelling is located.  If any farm 
 31.18  buildings or structures are located on this homesteaded acre of 
 31.19  land, their market value shall not be included in this separate 
 31.20  determination.  
 31.21     (g) To qualify for classification under paragraph (b), 
 31.22  clause (4), a privately owned public use airport must be 
 31.23  licensed as a public airport under section 360.018.  For 
 31.24  purposes of paragraph (b), clause (4), "landing area" means that 
 31.25  part of a privately owned public use airport properly cleared, 
 31.26  regularly maintained, and made available to the public for use 
 31.27  by aircraft and includes runways, taxiways, aprons, and sites 
 31.28  upon which are situated landing or navigational aids.  A landing 
 31.29  area also includes land underlying both the primary surface and 
 31.30  the approach surfaces that comply with all of the following:  
 31.31     (i) the land is properly cleared and regularly maintained 
 31.32  for the primary purposes of the landing, taking off, and taxiing 
 31.33  of aircraft; but that portion of the land that contains 
 31.34  facilities for servicing, repair, or maintenance of aircraft is 
 31.35  not included as a landing area; 
 31.36     (ii) the land is part of the airport property; and 
 32.1      (iii) the land is not used for commercial or residential 
 32.2   purposes. 
 32.3   The land contained in a landing area under paragraph (b), clause 
 32.4   (4), must be described and certified by the commissioner of 
 32.5   transportation.  The certification is effective until it is 
 32.6   modified, or until the airport or landing area no longer meets 
 32.7   the requirements of paragraph (b), clause (4).  For purposes of 
 32.8   paragraph (b), clause (4), "public access area" means property 
 32.9   used as an aircraft parking ramp, apron, or storage hangar, or 
 32.10  an arrival and departure building in connection with the airport.
 32.11     [EFFECTIVE DATE.] This section is effective for taxes 
 32.12  payable in 2002 and thereafter. 
 32.13     Sec. 7.  Minnesota Statutes 2000, section 273.13, 
 32.14  subdivision 24, is amended to read: 
 32.15     Subd. 24.  [CLASS 3.] (a) Commercial and industrial 
 32.16  property and utility real and personal property is class 3a.  
 32.17     (1) Except as otherwise provided, each parcel of 
 32.18  commercial, industrial, or utility real property has a class 
 32.19  rate of 2.4 two percent of the first tier of market value, and 
 32.20  3.4 three percent of the remaining market value.  In the case of 
 32.21  contiguous parcels of property owned by the same person or 
 32.22  entity, only the value equal to the first-tier value of the 
 32.23  contiguous parcels qualifies for the reduced class rate, except 
 32.24  that contiguous parcels owned by the same person or entity shall 
 32.25  be eligible for the first-tier value class rate on each separate 
 32.26  business operated by the owner of the property, provided the 
 32.27  business is housed in a separate structure.  For the purposes of 
 32.28  this subdivision, the first tier means the 
 32.29  first $150,000 $300,000 of market value.  Real property owned in 
 32.30  fee by a utility for transmission line right-of-way shall be 
 32.31  classified at the class rate for the higher tier.  
 32.32     For purposes of this subdivision, parcels are considered to 
 32.33  be contiguous even if they are separated from each other by a 
 32.34  road, street, waterway, or other similar intervening type of 
 32.35  property.  Connections between parcels that consist of power 
 32.36  lines or pipelines do not cause the parcels to be contiguous.  
 33.1   Property owners who have contiguous parcels of property that 
 33.2   constitute separate businesses that may qualify for the 
 33.3   first-tier class rate shall notify the assessor by July 1, for 
 33.4   treatment beginning in the following taxes payable year.  
 33.5      (2) Personal property that is:  (i) part of an electric 
 33.6   generation, transmission, or distribution system; or (ii) part 
 33.7   of a pipeline system transporting or distributing water, gas, 
 33.8   crude oil, or petroleum products; and (iii) not described in 
 33.9   clause (3), has a class rate as provided under clause (1) for 
 33.10  the first tier of market value and the remaining market value.  
 33.11  In the case of multiple parcels in one county that are owned by 
 33.12  one person or entity, only one first tier amount is eligible for 
 33.13  the reduced rate.  
 33.14     (3) The entire market value of personal property that is:  
 33.15  (i) tools, implements, and machinery of an electric generation, 
 33.16  transmission, or distribution system; (ii) tools, implements, 
 33.17  and machinery of a pipeline system transporting or distributing 
 33.18  water, gas, crude oil, or petroleum products; or (iii) the mains 
 33.19  and pipes used in the distribution of steam or hot or chilled 
 33.20  water for heating or cooling buildings, has a class rate as 
 33.21  provided under clause (1) for the remaining market value in 
 33.22  excess of the first tier. 
 33.23     (b) Employment property defined in section 469.166, during 
 33.24  the period provided in section 469.170, shall constitute class 
 33.25  3b.  The class rates for class 3b property are determined under 
 33.26  paragraph (a). 
 33.27     (c)(1) Subject to the limitations of clause (2), structures 
 33.28  which are (i) located on property classified as class 3a, (ii) 
 33.29  constructed under an initial building permit issued after 
 33.30  January 2, 1996, (iii) located in a transit zone as defined 
 33.31  under section 473.3915, subdivision 3, (iv) located within the 
 33.32  boundaries of a school district, and (v) not primarily used for 
 33.33  retail or transient lodging purposes, shall have a class rate 
 33.34  equal to the lesser of 2.975 percent or the class rate of the 
 33.35  second tier of the commercial property rate under paragraph (a) 
 33.36  on any portion of the market value that does not qualify for the 
 34.1   first tier class rate under paragraph (a).  As used in item (v), 
 34.2   a structure is primarily used for retail or transient lodging 
 34.3   purposes if over 50 percent of its square footage is used for 
 34.4   those purposes.  A class rate equal to the lesser of 2.975 
 34.5   percent or the class rate of the second tier of the commercial 
 34.6   property class rate under paragraph (a) shall also apply to 
 34.7   improvements to existing structures that meet the requirements 
 34.8   of items (i) to (v) if the improvements are constructed under an 
 34.9   initial building permit issued after January 2, 1996, even if 
 34.10  the remainder of the structure was constructed prior to January 
 34.11  2, 1996.  For the purposes of this paragraph, a structure shall 
 34.12  be considered to be located in a transit zone if any portion of 
 34.13  the structure lies within the zone.  If any property once 
 34.14  eligible for treatment under this paragraph ceases to remain 
 34.15  eligible due to revisions in transit zone boundaries, the 
 34.16  property shall continue to receive treatment under this 
 34.17  paragraph for a period of three years. 
 34.18     (2) This clause applies to any structure qualifying for the 
 34.19  transit zone reduced class rate under clause (1) on January 2, 
 34.20  1999, or any structure meeting any of the qualification criteria 
 34.21  in item (i) and otherwise qualifying for the transit zone 
 34.22  reduced class rate under clause (1).  Such a structure continues 
 34.23  to receive the transit zone reduced class rate until the 
 34.24  occurrence of one of the events in item (ii).  Property 
 34.25  qualifying under item (i)(D), that is located outside of a city 
 34.26  of the first class, qualifies for the transit zone reduced class 
 34.27  rate as provided in that item.  Property qualifying under item 
 34.28  (i)(E) qualifies for the transit zone reduced class rate as 
 34.29  provided in that item. 
 34.30     (i) A structure qualifies for the rate in this clause if it 
 34.31  is: 
 34.32     (A) property for which a building permit was issued before 
 34.33  December 31, 1998; or 
 34.34     (B) property for which a building permit was issued before 
 34.35  June 30, 2001, if: 
 34.36     (I) at least 50 percent of the land on which the structure 
 35.1   is to be built has been acquired or is the subject of signed 
 35.2   purchase agreements or signed options as of March 15, 1998, by 
 35.3   the entity that proposes construction of the project or an 
 35.4   affiliate of the entity; 
 35.5      (II) signed agreements have been entered into with one 
 35.6   entity or with affiliated entities to lease for the account of 
 35.7   the entity or affiliated entities at least 50 percent of the 
 35.8   square footage of the structure or the owner of the structure 
 35.9   will occupy at least 50 percent of the square footage of the 
 35.10  structure; and 
 35.11     (III) one of the following requirements is met: 
 35.12     the project proposer has submitted the completed data 
 35.13  portions of an environmental assessment worksheet by December 
 35.14  31, 1998; or 
 35.15     a notice of determination of adequacy of an environmental 
 35.16  impact statement has been published by April 1, 1999; or 
 35.17     an alternative urban areawide review has been completed by 
 35.18  April 1, 1999; or 
 35.19     (C) property for which a building permit is issued before 
 35.20  July 30, 1999, if: 
 35.21     (I) at least 50 percent of the land on which the structure 
 35.22  is to be built has been acquired or is the subject of signed 
 35.23  purchase agreements as of March 31, 1998, by the entity that 
 35.24  proposes construction of the project or an affiliate of the 
 35.25  entity; 
 35.26     (II) a signed agreement has been entered into between the 
 35.27  building developer and a tenant to lease for its own account at 
 35.28  least 200,000 square feet of space in the building; 
 35.29     (III) a signed letter of intent is entered into by July 1, 
 35.30  1998, between the building developer and the tenant to lease the 
 35.31  space for its own account; and 
 35.32     (IV) the environmental review process required by state law 
 35.33  was commenced by December 31, 1998; 
 35.34     (D) property for which an irrevocable letter of credit with 
 35.35  a housing and redevelopment authority was signed before December 
 35.36  31, 1998.  The structure shall receive the transit zone reduced 
 36.1   class rate during construction and for the duration of time that 
 36.2   the original tenants remain in the building.  Any unoccupied net 
 36.3   leasable square footage that is not leased within 36 months 
 36.4   after the certificate of occupancy has been issued for the 
 36.5   building shall not be eligible to receive the reduced class 
 36.6   rate.  This reduced class rate applies only if a qualifying 
 36.7   entity continues to own the property; 
 36.8      (E) property, located in a city of the first class, and for 
 36.9   which the building permits for the excavation, the parking ramp, 
 36.10  and the office tower were issued prior to April 1, 1999, shall 
 36.11  receive the reduced class rate during construction and for the 
 36.12  first five assessment years immediately following its initial 
 36.13  occupancy provided that, when completed, at least 25 percent of 
 36.14  the net leasable square footage must be occupied by a qualifying 
 36.15  entity each year during this time period.  In order to receive 
 36.16  the reduced class rate on the structure in any subsequent 
 36.17  assessment years, at least 50 percent of the rentable square 
 36.18  footage must be occupied by a qualifying entity.  This reduced 
 36.19  class rate applies only if a qualifying entity continues to own 
 36.20  the property. 
 36.21     (ii) A structure specified by this clause, other than a 
 36.22  structure qualifying under clause (i)(D) or (E), shall continue 
 36.23  to receive the transit zone reduced class rate until the 
 36.24  occurrence of one of the following events: 
 36.25     (A) if the structure upon initial occupancy will be owner 
 36.26  occupied by the entity initially constructing the structure or 
 36.27  an affiliated entity, the structure receives the reduced class 
 36.28  rate until the structure ceases to be at least 50 percent 
 36.29  occupied by the entity or an affiliated entity, provided, if the 
 36.30  portion of the structure occupied by that entity or an affiliate 
 36.31  of the entity is less than 85 percent, the transit zone class 
 36.32  rate reduction for the portion of structure not so occupied 
 36.33  terminates upon the leasing of such space to any nonaffiliated 
 36.34  entity; or 
 36.35     (B) if the structure is leased by a single entity or 
 36.36  affiliated entity at the time of initial occupancy, the 
 37.1   structure shall receive the reduced class rate until the 
 37.2   structure ceases to be at least 50 percent occupied by the 
 37.3   entity or an affiliated entity, provided, if the portion of the 
 37.4   structure occupied by that entity or an affiliate of the entity 
 37.5   is less than 85 percent, the transit zone class rate reduction 
 37.6   for the portion of structure not so occupied shall terminate 
 37.7   upon the leasing of such space to any nonaffiliated entity; or 
 37.8      (C) if the structure meets the criteria in item (i)(C), the 
 37.9   structure shall receive the reduced class rate until the 
 37.10  expiration of the initial lease term of the applicable tenants. 
 37.11     Percentages occupied or leased shall be determined based 
 37.12  upon net leasable square footage in the structure.  The assessor 
 37.13  shall allocate the value of the structure in the same fashion as 
 37.14  provided in the general law for portions of any structure 
 37.15  receiving and not receiving the transit tax class reduction as a 
 37.16  result of this clause. 
 37.17     (3) For purposes of paragraph (c), "qualifying entity" 
 37.18  means the entity owning the property on September 1, 2000, or an 
 37.19  affiliate of an entity that owned the property on September 1, 
 37.20  2000. 
 37.21     [EFFECTIVE DATE.] This section is effective for taxes 
 37.22  payable in 2002 and thereafter. 
 37.23     Sec. 8.  Minnesota Statutes 2000, section 273.13, 
 37.24  subdivision 25, is amended to read: 
 37.25     Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
 37.26  estate containing four or more units and used or held for use by 
 37.27  the owner or by the tenants or lessees of the owner as a 
 37.28  residence for rental periods of 30 days or more.  Class 4a also 
 37.29  includes hospitals licensed under sections 144.50 to 144.56, 
 37.30  other than hospitals exempt under section 272.02, and contiguous 
 37.31  property used for hospital purposes, without regard to whether 
 37.32  the property has been platted or subdivided.  Class 4a property 
 37.33  in a city with a population of 5,000 or less, that is (1) 
 37.34  located outside of the metropolitan area, as defined in section 
 37.35  473.121, subdivision 2, or outside any county contiguous to the 
 37.36  metropolitan area, and (2) whose city boundary is at least 15 
 38.1   miles from the boundary of any city with a population greater 
 38.2   than 5,000 has a class rate of 2.15 percent of market value.  
 38.3   All other Class 4a property has a class rate of 2.4 percent of 
 38.4   market value unless it is qualified class 4a property. 
 38.5      For purposes of this paragraph, population has the same 
 38.6   meaning given in section 477A.011, subdivision 3 "qualified 
 38.7   class 4a property" means class 4a property that either: 
 38.8      (1) is initially occupied as rental residential property 
 38.9   after January 1, 2002; or 
 38.10     (2) is certified by a municipal authority as being in 
 38.11  compliance with all applicable rental licensing requirements and 
 38.12  housing codes. 
 38.13     Qualified class 4a property has a class rate of 1.8 percent.
 38.14  Additionally, the market value of qualified class 4a property 
 38.15  has a class rate that is 0.3 percent less than the rate 
 38.16  otherwise applicable to qualified class 4a property for any 
 38.17  taxes payable year if the owner provides proof satisfactory to 
 38.18  the assessor, in a form required by the commissioner, that at 
 38.19  least 50 percent of the tax savings attributable to the 
 38.20  reduction in class rate from 1.8 to 1.5 percent, is used to 
 38.21  reduce the rent charged to tenants of the property.  This 
 38.22  reduction is available to qualified class 4a property only 
 38.23  beginning with assessments of the property in the second or 
 38.24  subsequent year of its occupancy as rental residential property. 
 38.25     (b) Class 4b includes: 
 38.26     (1) residential real estate containing less than four units 
 38.27  that does not qualify as class 4bb, other than seasonal 
 38.28  residential, and recreational; 
 38.29     (2) manufactured homes not classified under any other 
 38.30  provision; 
 38.31     (3) a dwelling, garage, and surrounding one acre of 
 38.32  property on a nonhomestead farm classified under subdivision 23, 
 38.33  paragraph (b) containing two or three units; 
 38.34     (4) unimproved property that is classified residential as 
 38.35  determined under subdivision 33.  
 38.36     Class 4b property has a class rate of 1.65 1.3 percent of 
 39.1   market value on the first $200,000 of market value and 1.5 
 39.2   percent on the remainder for taxes payable in 2002 only, and a 
 39.3   class rate of one percent on the first $200,000 of market value 
 39.4   and 1.5 percent on the remainder for taxes payable in 2003 and 
 39.5   thereafter.  
 39.6      (c) Class 4bb includes: 
 39.7      (1) nonhomestead residential real estate containing one 
 39.8   unit, other than seasonal residential, and recreational; and 
 39.9      (2) a single family dwelling, garage, and surrounding one 
 39.10  acre of property on a nonhomestead farm classified under 
 39.11  subdivision 23, paragraph (b). 
 39.12     Class 4bb has a class rate of 1.2 one percent on the first 
 39.13  $76,000 $200,000 of market value and a class rate of 1.65 1.5 
 39.14  percent of its market value that exceeds $76,000 $200,000. 
 39.15     Property that has been classified as seasonal recreational 
 39.16  residential property at any time during which it has been owned 
 39.17  by the current owner or spouse of the current owner does not 
 39.18  qualify for class 4bb. 
 39.19     (d) Class 4c property includes: 
 39.20     (1) except as provided in subdivision 22, paragraph (c), 
 39.21  real property devoted to temporary and seasonal residential 
 39.22  occupancy for recreation purposes, including real property 
 39.23  devoted to temporary and seasonal residential occupancy for 
 39.24  recreation purposes and not devoted to commercial purposes for 
 39.25  more than 250 days in the year preceding the year of 
 39.26  assessment.  For purposes of this clause, property is devoted to 
 39.27  a commercial purpose on a specific day if any portion of the 
 39.28  property is used for residential occupancy, and a fee is charged 
 39.29  for residential occupancy.  In order for a property to be 
 39.30  classified as class 4c, seasonal recreational residential for 
 39.31  commercial purposes, at least 40 percent of the annual gross 
 39.32  lodging receipts related to the property must be from business 
 39.33  conducted during 90 consecutive days and either (i) at least 60 
 39.34  percent of all paid bookings by lodging guests during the year 
 39.35  must be for periods of at least two consecutive nights; or (ii) 
 39.36  at least 20 percent of the annual gross receipts must be from 
 40.1   charges for rental of fish houses, boats and motors, 
 40.2   snowmobiles, downhill or cross-country ski equipment, or charges 
 40.3   for marina services, launch services, and guide services, or the 
 40.4   sale of bait and fishing tackle.  For purposes of this 
 40.5   determination, a paid booking of five or more nights shall be 
 40.6   counted as two bookings.  Class 4c also includes commercial use 
 40.7   real property used exclusively for recreational purposes in 
 40.8   conjunction with class 4c property devoted to temporary and 
 40.9   seasonal residential occupancy for recreational purposes, up to 
 40.10  a total of two acres, provided the property is not devoted to 
 40.11  commercial recreational use for more than 250 days in the year 
 40.12  preceding the year of assessment and is located within two miles 
 40.13  of the class 4c property with which it is used.  Class 4c 
 40.14  property classified in this clause also includes the remainder 
 40.15  of class 1c resorts provided that the entire property including 
 40.16  that portion of the property classified as class 1c also meets 
 40.17  the requirements for class 4c under this clause; otherwise the 
 40.18  entire property is classified as class 3.  Owners of real 
 40.19  property devoted to temporary and seasonal residential occupancy 
 40.20  for recreation purposes and all or a portion of which was 
 40.21  devoted to commercial purposes for not more than 250 days in the 
 40.22  year preceding the year of assessment desiring classification as 
 40.23  class 1c or 4c, must submit a declaration to the assessor 
 40.24  designating the cabins or units occupied for 250 days or less in 
 40.25  the year preceding the year of assessment by January 15 of the 
 40.26  assessment year.  Those cabins or units and a proportionate 
 40.27  share of the land on which they are located will be designated 
 40.28  class 1c or 4c as otherwise provided.  The remainder of the 
 40.29  cabins or units and a proportionate share of the land on which 
 40.30  they are located will be designated as class 3a.  The owner of 
 40.31  property desiring designation as class 1c or 4c property must 
 40.32  provide guest registers or other records demonstrating that the 
 40.33  units for which class 1c or 4c designation is sought were not 
 40.34  occupied for more than 250 days in the year preceding the 
 40.35  assessment if so requested.  The portion of a property operated 
 40.36  as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 
 41.1   nonresidential facility operated on a commercial basis not 
 41.2   directly related to temporary and seasonal residential occupancy 
 41.3   for recreation purposes shall not qualify for class 1c or 4c; 
 41.4      (2) qualified property used as a golf course if: 
 41.5      (i) it is open to the public on a daily fee basis.  It may 
 41.6   charge membership fees or dues, but a membership fee may not be 
 41.7   required in order to use the property for golfing, and its green 
 41.8   fees for golfing must be comparable to green fees typically 
 41.9   charged by municipal courses; and 
 41.10     (ii) it meets the requirements of section 273.112, 
 41.11  subdivision 3, paragraph (d). 
 41.12     A structure used as a clubhouse, restaurant, or place of 
 41.13  refreshment in conjunction with the golf course is classified as 
 41.14  class 3a property; 
 41.15     (3) real property up to a maximum of one acre of land owned 
 41.16  by a nonprofit community service oriented organization; provided 
 41.17  that the property is not used for a revenue-producing activity 
 41.18  for more than six days in the calendar year preceding the year 
 41.19  of assessment and the property is not used for residential 
 41.20  purposes on either a temporary or permanent basis.  For purposes 
 41.21  of this clause, a "nonprofit community service oriented 
 41.22  organization" means any corporation, society, association, 
 41.23  foundation, or institution organized and operated exclusively 
 41.24  for charitable, religious, fraternal, civic, or educational 
 41.25  purposes, and which is exempt from federal income taxation 
 41.26  pursuant to section 501(c)(3), (10), or (19) of the Internal 
 41.27  Revenue Code of 1986, as amended through December 31, 1990.  For 
 41.28  purposes of this clause, "revenue-producing activities" shall 
 41.29  include but not be limited to property or that portion of the 
 41.30  property that is used as an on-sale intoxicating liquor or 3.2 
 41.31  percent malt liquor establishment licensed under chapter 340A, a 
 41.32  restaurant open to the public, bowling alley, a retail store, 
 41.33  gambling conducted by organizations licensed under chapter 349, 
 41.34  an insurance business, or office or other space leased or rented 
 41.35  to a lessee who conducts a for-profit enterprise on the 
 41.36  premises.  Any portion of the property which is used for 
 42.1   revenue-producing activities for more than six days in the 
 42.2   calendar year preceding the year of assessment shall be assessed 
 42.3   as class 3a.  The use of the property for social events open 
 42.4   exclusively to members and their guests for periods of less than 
 42.5   24 hours, when an admission is not charged nor any revenues are 
 42.6   received by the organization shall not be considered a 
 42.7   revenue-producing activity; 
 42.8      (4) post-secondary student housing of not more than one 
 42.9   acre of land that is owned by a nonprofit corporation organized 
 42.10  under chapter 317A and is used exclusively by a student 
 42.11  cooperative, sorority, or fraternity for on-campus housing or 
 42.12  housing located within two miles of the border of a college 
 42.13  campus; 
 42.14     (5) manufactured home parks as defined in section 327.14, 
 42.15  subdivision 3; 
 42.16     (6) real property that is actively and exclusively devoted 
 42.17  to indoor fitness, health, social, recreational, and related 
 42.18  uses, is owned and operated by a not-for-profit corporation, and 
 42.19  is located within the metropolitan area as defined in section 
 42.20  473.121, subdivision 2; and 
 42.21     (7) a leased or privately owned noncommercial aircraft 
 42.22  storage hangar not exempt under section 272.01, subdivision 2, 
 42.23  and the land on which it is located, provided that: 
 42.24     (i) the land is on an airport owned or operated by a city, 
 42.25  town, county, metropolitan airports commission, or group 
 42.26  thereof; and 
 42.27     (ii) the land lease, or any ordinance or signed agreement 
 42.28  restricting the use of the leased premise, prohibits commercial 
 42.29  activity performed at the hangar. 
 42.30     If a hangar classified under this clause is sold after June 
 42.31  30, 2000, a bill of sale must be filed by the new owner with the 
 42.32  assessor of the county where the property is located within 60 
 42.33  days of the sale. 
 42.34     Class 4c property has a class rate of 1.65 1.4 percent of 
 42.35  market value, except that: 
 42.36     (i) each parcel of seasonal residential recreational 
 43.1   property not used for commercial purposes has the same class 
 43.2   rates as class 4bb property, a class rate of one percent on the 
 43.3   first $100,000 of market value for taxes payable in 2002, on the 
 43.4   first $150,000 of market value for taxes payable in 2003, and on 
 43.5   the first $200,000 of market value for taxes payable in 2004 and 
 43.6   thereafter, and a class rate of 1.5 percent on the remaining 
 43.7   value for taxes payable in 2002 and thereafter; 
 43.8      (ii) manufactured home parks assessed under clause (5) have 
 43.9   the same a class rate as class 4b property, of one percent; and 
 43.10     (iii) property described in paragraph (d), clause (4), has 
 43.11  the same class rate as the rate applicable to the first tier of 
 43.12  class 4bb nonhomestead residential real estate under paragraph 
 43.13  (c).  
 43.14     (e) Class 4d property is qualifying low-income rental 
 43.15  housing certified to the assessor by the housing finance agency 
 43.16  under sections 273.126 and 462A.071.  Class 4d includes land in 
 43.17  proportion to the total market value of the building that is 
 43.18  qualifying low-income rental housing.  For all properties 
 43.19  qualifying as class 4d, the market value determined by the 
 43.20  assessor must be based on the normal approach to value using 
 43.21  normal unrestricted rents. 
 43.22     Class 4d property has a class rate of one percent of market 
 43.23  value equal to 42 percent of the class rate applicable to class 
 43.24  4a property.  
 43.25     [EFFECTIVE DATE.] This section is effective for taxes 
 43.26  payable in 2002 and thereafter. 
 43.27     Sec. 9.  Minnesota Statutes 2000, section 273.13, 
 43.28  subdivision 31, is amended to read: 
 43.29     Subd. 31.  [CLASS 5.] Class 5 property includes:  
 43.30     (1) unmined iron ore and low-grade iron-bearing formations 
 43.31  as defined in section 273.14; and 
 43.32     (2) all other property not otherwise classified. 
 43.33     Class 5 property has a class rate of 3.4 three percent of 
 43.34  market value. 
 43.35     [EFFECTIVE DATE.] This section is effective for taxes 
 43.36  payable in 2002 and thereafter. 
 44.1      Sec. 10.  [273.1384] [HOMESTEAD AND AGRICULTURAL CREDITS.] 
 44.2      Subdivision 1.  [HOMESTEAD CREDIT.] Each county auditor 
 44.3   shall determine a homestead credit amount for each property 
 44.4   classified as class 1 residential homestead or class 2a 
 44.5   agricultural homestead within the county equal to 0.5 percent of 
 44.6   market value, to a maximum of $620 per homestead.  In the case 
 44.7   of an agricultural or resort homestead, only the net tax 
 44.8   capacity of the house, garage, and surrounding one acre of land 
 44.9   shall be used in determining the property's homestead credit 
 44.10  amount.  The credit may not exceed the net tax on the property 
 44.11  after subtraction of all other credits under section 273.1393.  
 44.12     Subd. 2.  [AGRICULTURAL CREDIT.] (a) Property classified as 
 44.13  class 2a agricultural homestead is eligible for an agricultural 
 44.14  credit equal to 0.15 percent of the market value of the 
 44.15  property, excluding the market value attributable to the house, 
 44.16  garage, and surrounding one acre of land. 
 44.17     (b) Property classified as class 2b is eligible for a 
 44.18  non-homestead agricultural and timberland credit equal to 0.28 
 44.19  percent of the market value of the property. 
 44.20     Subd. 3.  [CREDIT APPLICATION.] The credits under this 
 44.21  section must be used to proportionately reduce the net tax 
 44.22  capacity-based property tax payable to all taxing jurisdictions, 
 44.23  after subtraction of all other credits under section 273.1393. 
 44.24     Subd. 4.  [CREDIT REIMBURSEMENT.] The county auditor shall 
 44.25  certify the amount of tax reductions granted under this section 
 44.26  to the commissioner of revenue on the abstracts of tax lists 
 44.27  submitted under section 275.29.  The commissioner of revenue 
 44.28  shall verify the credit amounts reported, and shall make 
 44.29  payments directly to the affected taxing jurisdictions other 
 44.30  than school districts in two equal installments on September 15 
 44.31  and December 26 each year.  The commissioner of revenue shall 
 44.32  certify the total of the tax reductions granted under this 
 44.33  section for each school district to the commissioner of 
 44.34  children, families, and learning before September 1 of each 
 44.35  taxes payable year.  The commissioner of children, families, and 
 44.36  learning shall reimburse each affected school district for the 
 45.1   amount of the property tax reductions allowed under this section 
 45.2   as provided in section 273.1392. 
 45.3      Subd. 5.  [APPROPRIATION.] An amount sufficient to pay the 
 45.4   credit reimbursements provided under this section for school 
 45.5   districts, intermediate school districts, or any group of school 
 45.6   districts levying as a single taxing entity, is annually 
 45.7   appropriated from the general fund to the commissioner of 
 45.8   children, families, and learning.  An amount sufficient to pay 
 45.9   the credit reimbursements provided under this section for 
 45.10  counties, cities, towns, and special taxing districts is 
 45.11  annually appropriated from the general fund to the commissioner 
 45.12  of revenue.  A jurisdiction's aid amount may be increased or 
 45.13  decreased based on any prior year adjustments for homestead 
 45.14  credit or other property tax credit or aid programs. 
 45.15     [EFFECTIVE DATE.] This section is effective for taxes 
 45.16  payable in 2002 and subsequent years. 
 45.17     Sec. 11.  Minnesota Statutes 2000, section 273.1392, is 
 45.18  amended to read: 
 45.19     273.1392 [PAYMENT; SCHOOL DISTRICTS.] 
 45.20     The amounts of conservation tax credits under section 
 45.21  273.119; disaster or emergency reimbursement under section 
 45.22  273.123; attached machinery aid under section 273.138; homestead 
 45.23  credit under section 273.13 homestead and agricultural credits 
 45.24  under section 273.1384; aids and credits under section 273.1398; 
 45.25  wetlands reimbursement under section 275.295; enterprise zone 
 45.26  property credit payments under section 469.171; and metropolitan 
 45.27  agricultural preserve reduction under section 473H.10 for school 
 45.28  districts, shall be certified to the department of children, 
 45.29  families, and learning by the department of revenue.  The 
 45.30  amounts so certified shall be paid according to section 127A.45, 
 45.31  subdivisions 9 and 13. 
 45.32     [EFFECTIVE DATE.] This section is effective for aids and 
 45.33  credits payable in 2002 and thereafter. 
 45.34     Sec. 12.  Minnesota Statutes 2000, section 273.1393, is 
 45.35  amended to read: 
 45.36     273.1393 [COMPUTATION OF NET PROPERTY TAXES.] 
 46.1      Notwithstanding any other provisions to the contrary, "net" 
 46.2   property taxes are determined by subtracting the credits in the 
 46.3   order listed from the gross tax:  
 46.4      (1) disaster credit as provided in section 273.123; 
 46.5      (2) powerline credit as provided in section 273.42; 
 46.6      (3) agricultural preserves credit as provided in section 
 46.7   473H.10; 
 46.8      (4) enterprise zone credit as provided in section 469.171; 
 46.9      (5) disparity reduction credit; 
 46.10     (6) conservation tax credit as provided in section 273.119; 
 46.11     (7) education homestead credit and agricultural credits as 
 46.12  provided in section 273.1382 273.1384; 
 46.13     (8) taconite homestead credit as provided in section 
 46.14  273.135; and 
 46.15     (9) supplemental homestead credit as provided in section 
 46.16  273.1391.  
 46.17     The combination of all property tax credits must not exceed 
 46.18  the gross tax amount.  
 46.19     [EFFECTIVE DATE.] This section is effective for taxes 
 46.20  payable in 2002 and subsequent years. 
 46.21     Sec. 13.  Minnesota Statutes 2000, section 273.1398, 
 46.22  subdivision 4, is amended to read: 
 46.23     Subd. 4.  [DISPARITY REDUCTION CREDIT.] (a) Beginning with 
 46.24  taxes payable in 1989, Class 4a, class 3a, and class 3b property 
 46.25  qualifies for a disparity reduction credit if:  (1) the property 
 46.26  is located in a border city that has an enterprise zone 
 46.27  designated pursuant to section 469.168, subdivision 4; (2) the 
 46.28  property is located in a city with a population greater than 
 46.29  2,500 and less than 35,000 according to the 1980 decennial 
 46.30  census; (3) the city is adjacent to a city in another state or 
 46.31  immediately adjacent to a city adjacent to a city in another 
 46.32  state; and (4) the adjacent city in the other state has a 
 46.33  population of greater than 5,000 and less than 75,000.  
 46.34     (b) The credit is an amount sufficient to reduce (i) the 
 46.35  taxes levied on class 4a property to 2.3 1.7 percent of the 
 46.36  property's market value and (ii) the tax on class 3a and class 
 47.1   3b property to 2.3 1.9 percent of market value.  
 47.2      (c) The county auditor shall annually certify the costs of 
 47.3   the credits to the department of revenue.  The department shall 
 47.4   reimburse local governments for the property taxes foregone as 
 47.5   the result of the credits in proportion to their total levies. 
 47.6      Sec. 14.  Minnesota Statutes 2000, section 273.1398, is 
 47.7   amended by adding a subdivision to read: 
 47.8      Subd. 9.  [CLASS 3 REFERENDUM RATE REDUCTION.] The county 
 47.9   auditor of each county containing a school district for which a 
 47.10  referendum tax base replacement aid rate is calculated under 
 47.11  section 126C.17, subdivision 7a, shall reduce the referendum tax 
 47.12  rate for each parcel of class 3 property in the school district 
 47.13  by the referendum tax base replacement aid rate for that school 
 47.14  district. 
 47.15     Sec. 15.  [EDUCATION FACILITY ENERGY REIMBURSEMENT AND TAX 
 47.16  REBATE.] 
 47.17     For fiscal year 2003 only, $43,000,000 is appropriated to 
 47.18  the commissioner of children, families, and learning to be used 
 47.19  to pay to each school district an education facility energy 
 47.20  reimbursement and tax rebate equal to $50 times the adjusted 
 47.21  marginal cost pupil units for the school year.  This revenue is 
 47.22  paid entirely in fiscal year 2003 based on estimated data.  By 
 47.23  January 31, 2004, the department of children, families, and 
 47.24  learning shall recalculate the revenue for each district using 
 47.25  actual data and shall adjust the general education aid paid the 
 47.26  school districts for fiscal year 2004 by the amount of the 
 47.27  difference between the estimated revenue and the actual 
 47.28  revenue.  If the appropriation is insufficient, the aid must be 
 47.29  prorated. 
 47.30     Sec. 16.  [REPEALER.] 
 47.31     Minnesota Statutes 2000, section 273.1382, is repealed. 
 47.32     [EFFECTIVE DATE.] This section is effective for taxes 
 47.33  payable in 2002 and thereafter. 
 47.34                             ARTICLE 3
 47.35                   STATE TAKEOVER OF COUNTY COSTS
 47.36     Section 1.  Minnesota Statutes 2000, section 97A.065, 
 48.1   subdivision 2, is amended to read: 
 48.2      Subd. 2.  [FINES AND FORFEITED BAIL.] (a) Fines and 
 48.3   forfeited bail collected from prosecutions of violations of:  
 48.4   the game and fish laws; sections 84.091 to 84.15; sections 84.81 
 48.5   to 84.91; section 169A.20, when the violation involved an 
 48.6   off-road recreational vehicle as defined in section 169A.03, 
 48.7   subdivision 16; chapter 348; and any other law relating to wild 
 48.8   animals or aquatic vegetation, must be paid to the treasurer of 
 48.9   the county where the violation is prosecuted.  The county 
 48.10  treasurer shall submit one-half of the receipts to the 
 48.11  commissioner and credit the balance to the county general 
 48.12  revenue fund except as provided in paragraphs (b), (c), and 
 48.13  (d).  In a county in a judicial district under section 480.181, 
 48.14  subdivision 1, paragraph (b), as added in Laws 1999, chapter 
 48.15  216, article 7, section 26, the share that would otherwise go to 
 48.16  the county under this paragraph must be submitted to the state 
 48.17  treasurer for deposit in the state treasury and credited to the 
 48.18  general fund. 
 48.19     (b) The commissioner must reimburse a county, from the game 
 48.20  and fish fund, for the cost of keeping prisoners prosecuted for 
 48.21  violations under this section if the county board, by 
 48.22  resolution, directs:  (1) the county treasurer to submit all 
 48.23  fines and forfeited bail to the commissioner; and (2) the county 
 48.24  auditor to certify and submit monthly itemized statements to the 
 48.25  commissioner.  
 48.26     (c) The county treasurer shall submit one-half of the 
 48.27  receipts collected under paragraph (a) from prosecutions of 
 48.28  violations of sections 84.81 to 84.91, and 169A.20, except 
 48.29  receipts that are surcharges imposed under section 357.021, 
 48.30  subdivision 6, to the commissioner and credit the balance to the 
 48.31  county general fund.  The commissioner shall credit these 
 48.32  receipts to the snowmobile trails and enforcement account in the 
 48.33  natural resources fund. 
 48.34     (d) The county treasurer shall indicate the amount of the 
 48.35  receipts that are surcharges imposed under section 357.021, 
 48.36  subdivision 6, and shall submit all of those receipts to the 
 49.1   state treasurer. 
 49.2      [EFFECTIVE DATE.] This section is effective July 1, 2003, 
 49.3   in the second and fourth districts; July 1, 2004, in the first 
 49.4   and third districts; and July 1, 2005, in the sixth and tenth 
 49.5   districts. 
 49.6      Sec. 2.  Minnesota Statutes 2000, section 179A.101, 
 49.7   subdivision 1, is amended to read: 
 49.8      Subdivision 1.  [COURT EMPLOYEE UNITS.] (a) The state court 
 49.9   administrator shall meet and negotiate with the exclusive 
 49.10  representative of each of the units specified in this section.  
 49.11  The units provided in this section are the only appropriate 
 49.12  units for court employees.  Court employees, unless otherwise 
 49.13  excluded, are included within the units which include the 
 49.14  classifications to which they are assigned for purposes of 
 49.15  compensation.  Initial assignment of classifications to 
 49.16  bargaining units shall be made by the state court administrator 
 49.17  by August 15, 1999 of the year preceding the year in which the 
 49.18  state assumes the cost of court administration in the judicial 
 49.19  district in which the bargaining unit is located.  An exclusive 
 49.20  representative may appeal the initial assignment decision of the 
 49.21  state court administrator by filing a petition with the 
 49.22  commissioner within 45 days of being certified as the exclusive 
 49.23  representative for a judicial district.  The units in this 
 49.24  subdivision are the appropriate units of court employees. 
 49.25     (b) The judicial district unit consists of clerical, 
 49.26  administrative, and technical employees of a judicial district 
 49.27  under section 480.181, subdivision 1, paragraph (b), or of two 
 49.28  or more of these districts that are represented by the same 
 49.29  employee organization or one or more subordinate bodies of the 
 49.30  same employee organization.  The judicial district unit includes 
 49.31  individuals, not otherwise excluded, whose work is typically 
 49.32  clerical or secretarial in nature, including nontechnical data 
 49.33  recording and retrieval and general office work, and 
 49.34  individuals, not otherwise excluded, whose work is not typically 
 49.35  manual and which requires specialized knowledge or skills 
 49.36  acquired through two-year academic programs or equivalent 
 50.1   experience or on-the-job training. 
 50.2      (c) The appellate courts unit consists of clerical, 
 50.3   administrative, and technical employees of the court of appeals 
 50.4   and clerical, administrative, and technical employees of the 
 50.5   supreme court.  The appellate courts unit includes individuals, 
 50.6   not otherwise excluded, whose work is typically clerical or 
 50.7   secretarial in nature, including nontechnical data recording and 
 50.8   retrieval and general office work, and individuals, not 
 50.9   otherwise excluded, whose work is not typically manual and which 
 50.10  requires specialized knowledge or skills acquired through 
 50.11  two-year academic programs or equivalent experience or 
 50.12  on-the-job training. 
 50.13     (d) The court employees professional employee unit consists 
 50.14  of professional employees, not otherwise excluded, that are 
 50.15  employed by the supreme court, the court of appeals, or a 
 50.16  judicial district under section 480.181, subdivision 1, 
 50.17  paragraph (b). 
 50.18     (e) The court employees court reporter unit consists of 
 50.19  court reporters not otherwise excluded who are employed by a 
 50.20  judicial district under section 480.181, subdivision 1, 
 50.21  paragraph (a). 
 50.22     (f) Notwithstanding any provision of this chapter or any 
 50.23  other law to the contrary, judges may appoint and remove court 
 50.24  reporters at their pleasure. 
 50.25     (g) Copies of collective bargaining agreements entered into 
 50.26  under this section must be submitted to the legislative 
 50.27  coordinating commission for the commission's information. 
 50.28     [EFFECTIVE DATE.] This section is effective July 1, 2003, 
 50.29  in the second and fourth districts; July 1, 2004, in the first 
 50.30  and third districts; and July 1, 2005, in the sixth and tenth 
 50.31  districts. 
 50.32     Sec. 3.  Minnesota Statutes 2000, section 179A.102, 
 50.33  subdivision 6, is amended to read: 
 50.34     Subd. 6.  [CONTRACT AND REPRESENTATION RESPONSIBILITIES.] 
 50.35  (a) Notwithstanding the provisions of section 179A.101, the 
 50.36  exclusive representatives of units of court employees certified 
 51.1   prior to the effective date of the judicial district coming 
 51.2   under section 480.181, subdivision 1, paragraph (b), remain 
 51.3   responsible for administration of their contracts and for other 
 51.4   contractual duties and have the right to dues and fair share fee 
 51.5   deduction and other contractual privileges and rights until a 
 51.6   contract is agreed upon with the state court administrator for a 
 51.7   new unit established under section 179A.101 or until June 30, 
 51.8   2001, whichever is earlier.  Exclusive representatives of court 
 51.9   employees certified after the effective date of this section in 
 51.10  the judicial district are immediately upon certification 
 51.11  responsible for bargaining on behalf of employees within the 
 51.12  unit.  They are also responsible for administering grievances 
 51.13  arising under previous contracts covering employees included 
 51.14  within the unit which remain unresolved on June 30, 2001, or 
 51.15  upon agreement with the state court administrator on a contract 
 51.16  for a new unit established under section 179A.101, whichever is 
 51.17  earlier.  Where the employer does not object, these 
 51.18  responsibilities may be varied by agreement between the outgoing 
 51.19  and incoming exclusive representatives.  All other rights and 
 51.20  duties of representation begin on July 1, 2001 of the year in 
 51.21  which the state assumes the funding of court administration in 
 51.22  the judicial district, except that exclusive representatives 
 51.23  certified after the effective date of this section shall 
 51.24  immediately, upon certification, have the right to all employer 
 51.25  information and all forms of access to employees within the 
 51.26  bargaining unit which would be permitted to the current contract 
 51.27  holder, including the rights in section 179A.07, subdivision 6.  
 51.28  This section does not affect an existing collective bargaining 
 51.29  contract.  Incoming exclusive representatives of court employees 
 51.30  from judicial districts that come under section 480.181, 
 51.31  subdivision 1, paragraph (b), are immediately, upon 
 51.32  certification, responsible for bargaining on behalf of all 
 51.33  previously unrepresented employees assigned to their units.  All 
 51.34  other rights and duties of exclusive representatives begin on 
 51.35  July 1, 2001 of the year in which the state assumes the funding 
 51.36  of court administration in the judicial district. 
 52.1      (b) Nothing in this act or Laws 1999, chapter 216, article 
 52.2   7, sections 3 to 15, prevents an exclusive representative 
 52.3   certified after the effective date of sections 3 to 15 dates of 
 52.4   those provisions from assessing fair share or dues deductions 
 52.5   immediately upon certification for employees in a unit 
 52.6   established under section 179A.101 if the employees were 
 52.7   unrepresented for collective bargaining purposes before that 
 52.8   certification. 
 52.9      [EFFECTIVE DATE.] This section is effective July 1, 2003, 
 52.10  in the second and fourth districts; July 1, 2004, in the first 
 52.11  and third districts; and July 1, 2005, in the sixth and tenth 
 52.12  districts. 
 52.13     Sec. 4.  Minnesota Statutes 2000, section 179A.103, 
 52.14  subdivision 1, is amended to read: 
 52.15     Subdivision 1.  [CONTRACTS.] Contracts for the period 
 52.16  commencing July 1, 2000, of the year in which the state assumes 
 52.17  the cost of court administration in the judicial district for 
 52.18  the judicial district court employees of judicial districts that 
 52.19  are under section 480.181, subdivision 1, paragraph (b), must be 
 52.20  negotiated with the state court administrator.  Negotiations for 
 52.21  those contracts may begin any time after July 1, 1999 of the 
 52.22  year before the state assumes the cost, and may be initiated by 
 52.23  either party notifying the other of the desire to begin the 
 52.24  negotiating process.  Negotiations are subject to this chapter. 
 52.25     [EFFECTIVE DATE.] This section is effective July 1, 2003, 
 52.26  in the second and fourth districts; July 1, 2004, in the first 
 52.27  and third districts; and July 1, 2005, in the sixth and tenth 
 52.28  districts. 
 52.29     Sec. 5.  [245.775] [REIMBURSEMENT OF COUNTY FOR CERTAIN 
 52.30  OUT-OF-HOME PLACEMENTS.] 
 52.31     (a) The commissioner of human services shall reimburse each 
 52.32  county for a portion of the nonfederal share of the cost of 
 52.33  out-of-home placement.  The amount of the reimbursement is 30 
 52.34  percent of the county's average nonfederal share of the cost for 
 52.35  out-of-home placement for the most recent three years.  For 
 52.36  purposes of this section, "out-of-home placement" means the 
 53.1   placement of a child in a child caring institution or shelter 
 53.2   licensed under Minnesota Rules, parts 9545.0905 to 9545.1125, in 
 53.3   a group home licensed under Minnesota Rules, parts 9545.1400 to 
 53.4   9545.1480, in family foster care or group family foster care 
 53.5   licensed under Minnesota Rules, parts 9545.0010 to 9545.0260, or 
 53.6   a correctional facility pursuant to a court order under which a 
 53.7   county social services agency has been assigned financial 
 53.8   responsibility for the placement.  For purposes of this section, 
 53.9   "out-of-home placement" includes voluntary and tribal 
 53.10  court-ordered placement of an Indian child under sections 
 53.11  260.765 and 260.771. 
 53.12     (b) In July and December of 2002 and each subsequent year, 
 53.13  the commissioner will make a payment to each county equal to 
 53.14  one-half of the amount of the county's reimbursement determined 
 53.15  under paragraph (a) for that calendar year. 
 53.16     Sec. 6.  [245.776] [ANNUAL APPROPRIATION.] 
 53.17     (a) A sum sufficient to discharge the duties imposed by 
 53.18  sections 245.775; 260.765, subdivision 2a; and 260.771, 
 53.19  subdivision 4a, is annually appropriated from the general fund 
 53.20  to the commissioner of human services. 
 53.21     (b) The payments under these sections in fiscal year 2004 
 53.22  and thereafter are limited to an amount equal to the maximum 
 53.23  allowed appropriation under this section in the previous 
 53.24  calendar year, multiplied by 106 percent. 
 53.25     Sec. 7.  [245.7765] [INVESTMENT IN EARLY INTERVENTION 
 53.26  SERVICES.] 
 53.27     Subdivision 1.  [EARLY INTERVENTION SERVICES.] For purposes 
 53.28  of this section, "early intervention services" means the 
 53.29  delivery of services to children under section 626.5551. 
 53.30     Subd. 2.  [REQUIRED COUNTY INVESTMENT IN EARLY INTERVENTION 
 53.31  SERVICES.] Counties must spend 50 percent of the amount provided 
 53.32  under section 245.776, paragraph (b), on early intervention 
 53.33  services as defined in subdivision 1.  Funds must be used to 
 53.34  expand existing services or create new services.  The county 
 53.35  shall include in the plan filed under section 256E.09, a 
 53.36  detailed explanation of how the funds were used to expand or 
 54.1   create early intervention services. 
 54.2      Subd. 3.  [REPORTING.] The commissioner of human services 
 54.3   shall develop reporting requirements related to expenditures 
 54.4   under subdivision 2, or use existing systems, in order to 
 54.5   determine county accountability and compliance.  The 
 54.6   commissioner shall annually report county compliance data to the 
 54.7   chairs of the policy committees in the house and senate that 
 54.8   have jurisdiction over out-of-home placement issues.  
 54.9      Sec. 8.  Minnesota Statutes 2000, section 252.43, is 
 54.10  amended to read: 
 54.11     252.43 [COMMISSIONER'S DUTIES.] 
 54.12     The commissioner shall supervise county boards' provision 
 54.13  of day training and habilitation services to adults with mental 
 54.14  retardation and related conditions.  The commissioner shall: 
 54.15     (1) determine the need for day training and habilitation 
 54.16  services under section 252.28; 
 54.17     (2) approve payment rates established by a county under 
 54.18  section 252.46, subdivision 1; 
 54.19     (3) adopt rules for the administration and provision of day 
 54.20  training and habilitation services under sections 252.40 to 
 54.21  252.46 and sections 245A.01 to 245A.16 and 252.28, subdivision 
 54.22  2; 
 54.23     (4) enter into interagency agreements necessary to ensure 
 54.24  effective coordination and provision of day training and 
 54.25  habilitation services; 
 54.26     (5) monitor and evaluate the costs and effectiveness of day 
 54.27  training and habilitation services; and 
 54.28     (6) provide information and technical help to county boards 
 54.29  and vendors in their administration and provision of day 
 54.30  training and habilitation services; and 
 54.31     (7) authorize payment with state funds and any available 
 54.32  federal Medicaid funds for services provided to individuals 
 54.33  eligible for home and community-based waiver services.  This 
 54.34  clause shall take effect only upon approval of the federal 
 54.35  waiver to be requested under section 27. 
 54.36     Sec. 9.  Minnesota Statutes 2000, section 256B.092, 
 55.1   subdivision 5, is amended to read: 
 55.2      Subd. 5.  [FEDERAL WAIVERS.] (a) The commissioner shall 
 55.3   apply for any federal waivers necessary to secure, to the extent 
 55.4   allowed by law, federal financial participation under United 
 55.5   States Code, title 42, sections 1396 et seq., as amended, for 
 55.6   the provision of services to persons who, in the absence of the 
 55.7   services, would need the level of care provided in a regional 
 55.8   treatment center or a community intermediate care facility for 
 55.9   persons with mental retardation or related conditions.  The 
 55.10  commissioner may seek amendments to the waivers or apply for 
 55.11  additional waivers under United States Code, title 42, sections 
 55.12  1396 et seq., as amended, to contain costs.  The commissioner 
 55.13  shall ensure that payment for the cost of providing home and 
 55.14  community-based alternative services under the federal waiver 
 55.15  plan shall not exceed the cost of intermediate care services 
 55.16  including day training and habilitation services that would have 
 55.17  been provided without the waivered services.  
 55.18     (b) The commissioner, in administering home and 
 55.19  community-based waivers for persons with mental retardation and 
 55.20  related conditions, shall ensure that day services for eligible 
 55.21  persons are not provided by the person's residential service 
 55.22  provider, unless the person or the person's legal representative 
 55.23  is offered a choice of providers and agrees in writing to 
 55.24  provision of day services by the residential service provider.  
 55.25  The individual service plan for individuals who choose to have 
 55.26  their residential service provider provide their day services 
 55.27  must describe how health, safety, and protection needs will be 
 55.28  met by frequent and regular contact with persons other than the 
 55.29  residential service provider. 
 55.30     Sec. 10.  Minnesota Statutes 2000, section 260.765, is 
 55.31  amended by adding a subdivision to read: 
 55.32     Subd. 2a.  [REIMBURSEMENT FOR A PORTION OF COSTS.] When an 
 55.33  Indian child is voluntarily placed in out-of-home care as 
 55.34  defined in section 245.775 by a tribal social services agency, 
 55.35  the commissioner shall reimburse 30 percent of the nonfederal 
 55.36  share of the costs of the placement.  The mechanism for 
 56.1   reimbursement must be the same used for county reimbursement of 
 56.2   out-of-home placement costs under section 245.775. 
 56.3      [EFFECTIVE DATE.] This section is effective beginning with 
 56.4   out-of-home placement costs incurred on or after January 1, 2002.
 56.5      Sec. 11.  Minnesota Statutes 2000, section 260.771, is 
 56.6   amended by adding a subdivision to read: 
 56.7      Subd. 4a.  [REIMBURSEMENT FOR A PORTION OF COSTS.] When an 
 56.8   Indian child is placed in out-of-home care as defined in section 
 56.9   245.775 by a tribal social services agency according to tribal 
 56.10  court order, the commissioner shall reimburse 30 percent of the 
 56.11  nonfederal share of the costs of the placement.  The mechanism 
 56.12  for reimbursement must be the same used for county reimbursement 
 56.13  of out-of-home placement costs under section 245.775. 
 56.14     [EFFECTIVE DATE.] This section is effective beginning with 
 56.15  out-of-home placement costs incurred on or after January 1, 2002.
 56.16     Sec. 12.  Minnesota Statutes 2000, section 273.1398, 
 56.17  subdivision 4a, is amended to read: 
 56.18     Subd. 4a.  [AID OFFSET FOR COURT COSTS.] (a) By July 15, 
 56.19  1999 of the year preceding the year in which the state assumes 
 56.20  the cost of court administration in the judicial district as 
 56.21  specified under section 480.183, the supreme court shall 
 56.22  determine and certify to the commissioner of revenue for each 
 56.23  county, other than counties located in the eighth judicial 
 56.24  district, the county's share of the costs assumed in the 
 56.25  judicial districts specified under Laws 1999, chapter 216, 
 56.26  article 7, section 480.183, subdivision 1, during the succeeding 
 56.27  fiscal year beginning July 1, 2000,. 
 56.28     (b) The amount certified in paragraph (a) shall be equal to 
 56.29  the following: 
 56.30     (i) 103 percent of the required court administration 
 56.31  expenditures as defined under section 480.183, subdivision 3, 
 56.32  for calendar year 2003, as determined under subdivision 4b, 
 56.33  paragraph (a); plus 
 56.34     (ii) an adjustment for any cumulative percentage increase 
 56.35  in salary expenditures as defined under section 480.183, 
 56.36  subdivision 2, in excess of six percent; less 
 57.1      (iii) an amount equal to the county's share of transferred 
 57.2   fines collected by the district courts in the county during the 
 57.3   calendar year 1998 preceding certification.  
 57.4      The court and the county may, if both parties agree, 
 57.5   negotiate and certify an amount higher than the amount 
 57.6   calculated under this paragraph. 
 57.7      (c) For purposes of this subdivision, the adjustment in 
 57.8   paragraph (b), clause (ii), shall be equal to: 
 57.9      (1) the sum of the court administration expenditures as 
 57.10  defined under section 480.183, subdivision 3, required under 
 57.11  subdivision 4b, paragraph (a), plus the temporary aid payment 
 57.12  under subdivision 4c; multiplied by 
 57.13     (2) the difference between (i) the cumulative percentage 
 57.14  increase in actual and anticipated salary settlements for court 
 57.15  employees from July 1, 2001, until the date of the court 
 57.16  transfer and (ii) the percentage specified in subdivision 4b, 
 57.17  paragraph (a). 
 57.18     (b) (d) Payments to a county under subdivision 2 or section 
 57.19  273.166 for the calendar year 2000 in which the state assumes 
 57.20  the cost of court administration as defined under section 
 57.21  480.183, subdivision 3, in the judicial district must be 
 57.22  permanently reduced by an amount equal to 75 percent of the net 
 57.23  cost to the state for assumption of district court costs as 
 57.24  certified in paragraph (a). 
 57.25     (c) (e) Payments to a county under subdivision 2 or section 
 57.26  273.166 for the calendar year 2001 after the calendar year in 
 57.27  which the state assumes the cost of court administration as 
 57.28  defined under section 480.183, subdivision 3, in the judicial 
 57.29  district must be permanently reduced by an amount equal to 25 
 57.30  percent of the net cost to the state for assumption of district 
 57.31  court costs as certified in paragraph (a). 
 57.32     (d) (f) Payments to a county under subdivision 2 for 
 57.33  calendar year 2001 are permanently increased by an amount equal 
 57.34  to 7.5 percent of the county's share of transferred fines 
 57.35  collected by the district courts in the county during calendar 
 57.36  year 1998, as determined under paragraph (a).  If the amount 
 58.1   determined in paragraph (a) exceeds the amount of aid a county 
 58.2   is scheduled to be paid under subdivision 2 in 2000, then the 
 58.3   county shall not receive an aid increase under this paragraph. 
 58.4      (g) Payments to a county under subdivision 2 or section 
 58.5   273.166, for mandated services as defined in section 480.183, 
 58.6   subdivision 4, in the judicial district must be permanently 
 58.7   reduced in 2002 by an amount equal to the cost to the state for 
 58.8   assumption of mandated court services as defined in section 
 58.9   480.183, subdivision 4.  The supreme court shall determine the 
 58.10  amount for each county and certify it to the commissioner of 
 58.11  revenue by June 20, 2001. 
 58.12     [EFFECTIVE DATE.] This section is effective the day 
 58.13  following final enactment. 
 58.14     Sec. 13.  Minnesota Statutes 2000, section 273.1398, is 
 58.15  amended by adding a subdivision to read: 
 58.16     Subd. 4b.  [COURT EXPENDITURES; MAINTENANCE OF EFFORT.] (a) 
 58.17  Until the costs of court administration as defined under section 
 58.18  480.183, subdivision 3, in a county have been transferred to the 
 58.19  state, each county in a judicial district transferring court 
 58.20  administration costs to state funding after July 1, 2001, shall 
 58.21  budget for the funding of these costs an amount at least equal 
 58.22  to the certified budget amount for calendar year 2001 multiplied 
 58.23  by six percent for 2001 to 2003 and by eight percent from 2004 
 58.24  to the year of the transfer.  The county shall budget, fund, and 
 58.25  authorize expenditures not less than the amount calculated under 
 58.26  this paragraph, including the temporary aid amount under 
 58.27  subdivision 4c for maintenance of effort of administrative costs.
 58.28     (b) By July 1, 2001, the court shall certify to each county 
 58.29  in the judicial district its cost of court administration as 
 58.30  defined under section 480.183, subdivision 3, based on 2001 
 58.31  certified budgets.  In making that determination, the court 
 58.32  shall exclude the budget costs of the county for the following 
 58.33  categories: 
 58.34     (1) rent; 
 58.35     (2) examiner of titles; 
 58.36     (3) civil court appointed attorneys for civil matters; and 
 59.1      (4) hospitalization costs. 
 59.2      [EFFECTIVE DATE.] This section is effective the day 
 59.3   following final enactment. 
 59.4      Sec. 14.  Minnesota Statutes 2000, section 273.1398, is 
 59.5   amended by adding a subdivision to read: 
 59.6      Subd. 4c.  [TEMPORARY AID; COURT ADMINISTRATION COSTS.] For 
 59.7   calendar years 2004 and 2005, each county in a judicial district 
 59.8   that has not been transferred to the state by January 1 of that 
 59.9   year shall receive additional homestead and agricultural credit 
 59.10  aid.  This amount is in addition to the amount calculated under 
 59.11  subdivision 2 and must not be included in the definition of 
 59.12  homestead and agricultural credit base under subdivision 1, 
 59.13  paragraph (j).  The amount of additional aid is equal to the 
 59.14  difference between (1) the amount budgeted for court 
 59.15  administration costs in 2001 as determined under subdivision 4b, 
 59.16  paragraph (b), multiplied by the maintenance of effort percent 
 59.17  for the calendar year as determined under subdivision 4b, 
 59.18  paragraph (a), and (2) the amount calculated under subdivision 
 59.19  4b, paragraph (a), for calendar year 2003.  This additional aid 
 59.20  must be used only to fund court administration expenditures as 
 59.21  defined in section 480.183, subdivision 3.  This amount must be 
 59.22  added to the state court's base budget in the year when the 
 59.23  court in that judicial district in which the county is located 
 59.24  is transferred to the state. 
 59.25     [EFFECTIVE DATE.] This section is effective the day 
 59.26  following final enactment.  
 59.27     Sec. 15.  Minnesota Statutes 2000, section 273.1398, is 
 59.28  amended by adding a subdivision to read: 
 59.29     Subd. 4f.  [AID OFFSET FOR OUT-OF-HOME PLACEMENT 
 59.30  COSTS.] For aid payable in 2002, each county's aid under 
 59.31  subdivision 2 must be permanently reduced by an amount equal to 
 59.32  the county's 2002 reimbursement for nonfederal expenditures for 
 59.33  out-of-home placements, as provided in section 245.775.  The 
 59.34  counties shall provide all information requested by the 
 59.35  commissioner of human services necessary to allow the 
 59.36  commissioner to certify the previous three years' average 
 60.1   nonfederal costs to the commissioner of revenue by July 15, 
 60.2   2001.  The aid reduction under this subdivision must be made 
 60.3   prior to any aid reductions for the state takeover of courts 
 60.4   contained in this article. 
 60.5      [EFFECTIVE DATE.] This section is effective the day after 
 60.6   final enactment, for aids payable beginning in 2002. 
 60.7      Sec. 16.  Minnesota Statutes 2000, section 273.1398, is 
 60.8   amended by adding a subdivision to read: 
 60.9      Subd. 4g.  [AID OFFSET FOR DAY SERVICES.] (a) On or before 
 60.10  the later of July 1, 2002, or July 1 following the date when the 
 60.11  federal Health Care Financing Administration grants the waiver 
 60.12  request under section 27, the commissioner of human services 
 60.13  shall certify each county's projected costs for the nonfederal 
 60.14  share of medical assistance payments for day services for 
 60.15  developmentally disabled persons under the waiver authorized by 
 60.16  section 27.  Cost estimates shall be based on the information 
 60.17  available in the most recent calendar year. 
 60.18     (b) Payments to a county under subdivision 2 or sections 
 60.19  273.166 or 477A.0122 for the calendar year following the 
 60.20  certification in paragraph (a) must be permanently reduced by an 
 60.21  amount equal to 75 percent of the costs certified in paragraph 
 60.22  (a). 
 60.23     (c) Payments to a county under subdivision 2 or sections 
 60.24  273.166 or 477A.0122 for the second calendar year following the 
 60.25  certification in paragraph (a) must be permanently reduced by an 
 60.26  amount equal to 25 percent of the costs certified in paragraph 
 60.27  (a). 
 60.28     Sec. 17.  Minnesota Statutes 2000, section 299D.03, 
 60.29  subdivision 5, is amended to read: 
 60.30     Subd. 5.  [FINES AND FORFEITED BAIL MONEY.] (a) All fines 
 60.31  and forfeited bail money, from traffic and motor vehicle law 
 60.32  violations, collected from persons apprehended or arrested by 
 60.33  officers of the state patrol, shall be paid by the person or 
 60.34  officer collecting the fines, forfeited bail money or 
 60.35  installments thereof, on or before the tenth day after the last 
 60.36  day of the month in which these moneys were collected, to the 
 61.1   county treasurer of the county where the violation occurred.  
 61.2   Three-eighths of these receipts shall be credited to the general 
 61.3   revenue fund of the county, except that in a county in a 
 61.4   judicial district under section 480.181, subdivision 1, 
 61.5   paragraph (b), as added in Laws 1999, chapter 216, article 7, 
 61.6   section 26, this three-eighths share must be transmitted to the 
 61.7   state treasurer for deposit in the state treasury and credited 
 61.8   to the general fund.  The other five-eighths of these receipts 
 61.9   shall be transmitted by that officer to the state treasurer 
 61.10  and shall be credited as follows: 
 61.11     (1) In the fiscal year ending June 30, 1991, the first 
 61.12  $275,000 in money received by the state treasurer after June 4, 
 61.13  1991, must be credited to the transportation services fund, and 
 61.14  the remainder in the fiscal year credited to the trunk highway 
 61.15  fund. 
 61.16     (2) In fiscal year 1992, the first $215,000 in money 
 61.17  received by the state treasurer in the fiscal year must be 
 61.18  credited to the transportation services fund, and the remainder 
 61.19  credited to the trunk highway fund. 
 61.20     (3) In fiscal year 1993 and subsequent years, the entire 
 61.21  amount received by the state treasurer must be credited to the 
 61.22  trunk highway fund.  If, however, the violation occurs within a 
 61.23  municipality and the city attorney prosecutes the offense, and a 
 61.24  plea of not guilty is entered, one-third of the receipts shall 
 61.25  be credited to the general revenue fund of the county, one-third 
 61.26  of the receipts shall be paid to the municipality prosecuting 
 61.27  the offense, and one-third shall be transmitted to the state 
 61.28  treasurer as provided in this subdivision.  All costs of 
 61.29  participation in a nationwide police communication system 
 61.30  chargeable to the state of Minnesota shall be paid from 
 61.31  appropriations for that purpose. 
 61.32     (b) Notwithstanding any other provisions of law, all fines 
 61.33  and forfeited bail money from violations of statutes governing 
 61.34  the maximum weight of motor vehicles, collected from persons 
 61.35  apprehended or arrested by employees of the state of Minnesota, 
 61.36  by means of stationary or portable scales operated by these 
 62.1   employees, shall be paid by the person or officer collecting the 
 62.2   fines or forfeited bail money, on or before the tenth day after 
 62.3   the last day of the month in which the collections were made, to 
 62.4   the county treasurer of the county where the violation 
 62.5   occurred.  Five-eighths of these receipts shall be transmitted 
 62.6   by that officer to the state treasurer and shall be credited to 
 62.7   the highway user tax distribution fund.  Three-eighths of these 
 62.8   receipts shall be credited to the general revenue fund of the 
 62.9   county, except that in a county in a judicial district under 
 62.10  section 480.181, subdivision 1, paragraph (b), as added in Laws 
 62.11  1999, chapter 216, article 7, section 26, this three-eighths 
 62.12  share must be transmitted to the state treasurer for deposit in 
 62.13  the state treasury and credited to the general fund. 
 62.14     [EFFECTIVE DATE.] This section is effective July 1, 2003, 
 62.15  in the second and fourth districts; July 1, 2004, in the first 
 62.16  and third districts; and July 1, 2005, in the sixth and tenth 
 62.17  districts. 
 62.18     Sec. 18.  Minnesota Statutes 2000, section 357.021, 
 62.19  subdivision 1a, is amended to read: 
 62.20     Subd. 1a.  [TRANSMITTAL OF FEES TO STATE TREASURER.] (a) 
 62.21  Every person, including the state of Minnesota and all bodies 
 62.22  politic and corporate, who shall transact any business in the 
 62.23  district court, shall pay to the court administrator of said 
 62.24  court the sundry fees prescribed in subdivision 2.  Except as 
 62.25  provided in paragraph (d), the court administrator shall 
 62.26  transmit the fees monthly to the state treasurer for deposit in 
 62.27  the state treasury and credit to the general fund.  
 62.28     (b) In a county which has a screener-collector position, 
 62.29  fees paid by a county pursuant to this subdivision shall be 
 62.30  transmitted monthly to the county treasurer, who shall apply the 
 62.31  fees first to reimburse the county for the amount of the salary 
 62.32  paid for the screener-collector position.  The balance of the 
 62.33  fees collected shall then be forwarded to the state treasurer 
 62.34  for deposit in the state treasury and credited to the general 
 62.35  fund.  In a county in a judicial district under section 480.181, 
 62.36  subdivision 1, paragraph (b), as added in Laws 1999, chapter 
 63.1   216, article 7, section 26, which has a screener-collector 
 63.2   position, the fees paid by a county shall be transmitted monthly 
 63.3   to the state treasurer for deposit in the state treasury and 
 63.4   credited to the general fund.  A screener-collector position for 
 63.5   purposes of this paragraph is an employee whose function is to 
 63.6   increase the collection of fines and to review the incomes of 
 63.7   potential clients of the public defender, in order to verify 
 63.8   eligibility for that service. 
 63.9      (c) No fee is required under this section from the public 
 63.10  authority or the party the public authority represents in an 
 63.11  action for: 
 63.12     (1) child support enforcement or modification, medical 
 63.13  assistance enforcement, or establishment of parentage in the 
 63.14  district court, or in a proceeding under section 484.702; 
 63.15     (2) civil commitment under chapter 253B; 
 63.16     (3) the appointment of a public conservator or public 
 63.17  guardian or any other action under chapters 252A and 525; 
 63.18     (4) wrongfully obtaining public assistance under section 
 63.19  256.98 or 256D.07, or recovery of overpayments of public 
 63.20  assistance; 
 63.21     (5) court relief under chapter 260; 
 63.22     (6) forfeiture of property under sections 169A.63 and 
 63.23  609.531 to 609.5317; 
 63.24     (7) recovery of amounts issued by political subdivisions or 
 63.25  public institutions under sections 246.52, 252.27, 256.045, 
 63.26  256.25, 256.87, 256B.042, 256B.14, 256B.15, 256B.37, 260B.331, 
 63.27  and 260C.331, or other sections referring to other forms of 
 63.28  public assistance; 
 63.29     (8) restitution under section 611A.04; or 
 63.30     (9) actions seeking monetary relief in favor of the state 
 63.31  pursuant to section 16D.14, subdivision 5. 
 63.32     (d) The fees collected for child support modifications 
 63.33  under subdivision 2, clause (13), must be transmitted to the 
 63.34  county treasurer for deposit in the county general fund.  The 
 63.35  fees must be used by the county to pay for child support 
 63.36  enforcement efforts by county attorneys. 
 64.1      [EFFECTIVE DATE.] This section is effective July 1, 2003, 
 64.2   in the second and fourth districts; July 1, 2004, in the first 
 64.3   and third districts; and July 1, 2005, in the sixth and tenth 
 64.4   districts. 
 64.5      Sec. 19.  Minnesota Statutes 2000, section 480.181, 
 64.6   subdivision 1, is amended to read: 
 64.7      Subdivision 1.  [STATE EMPLOYEES; COMPENSATION.] (a) 
 64.8   District court referees, judicial officers, court reporters, law 
 64.9   clerks, district administration staff, other than district 
 64.10  administration staff in the second and fourth judicial 
 64.11  districts, guardian ad litem program coordinators and 
 64.12  staff, staff court interpreters in the second judicial district, 
 64.13  and other court employees under paragraph (b), are state 
 64.14  employees and are governed by the judicial branch personnel 
 64.15  rules adopted by the supreme court.  The supreme court, in 
 64.16  consultation with the conference of chief judges, shall 
 64.17  establish the salary range of these employees under the judicial 
 64.18  branch personnel rules.  In establishing the salary ranges, the 
 64.19  supreme court shall consider differences in the cost of living 
 64.20  in different areas of the state. 
 64.21     (b) The court administrator and employees of the court 
 64.22  administrator who are in the fifth, seventh, eighth, or ninth 
 64.23  judicial district are state employees.  The court administrator 
 64.24  and employees of the court administrator in the remaining 
 64.25  judicial districts become state employees as follows: 
 64.26     (1) effective July 1, 2003, for the second and fourth 
 64.27  judicial districts; 
 64.28     (2) effective July 1, 2004, for the first and third 
 64.29  judicial districts; and 
 64.30     (3) effective July 1, 2005, for the sixth and tenth 
 64.31  judicial districts. 
 64.32     [EFFECTIVE DATE.] The amendment to paragraph (a) is 
 64.33  effective July 1, 2001. 
 64.34     Sec. 20.  [480.1811] [POSTRETIREMENT BENEFIT COSTS.] 
 64.35     Where court administration, guardian ad litem, or 
 64.36  interpreter employees elect to retain county insurance benefits 
 65.1   under section 480.181 after July 1, 2001, and the county 
 65.2   provides those employees postretirement insurance benefits prior 
 65.3   to July 1, 2001, the county shall pay the postretirement cost of 
 65.4   those benefits. 
 65.5      [EFFECTIVE DATE.] This section is effective the day 
 65.6   following final enactment. 
 65.7      Sec. 21.  [480.183] [JUDICIAL DISTRICTS; SCHEDULED DATES OF 
 65.8   STATE TRANSFER; DEFINITION OF SERVICES.] 
 65.9      Subdivision 1.  [DATE OF STATE TRANSFER.] (a) Court 
 65.10  administration expenditures as defined in this section for the 
 65.11  remaining judicial districts shall be transferred to the state 
 65.12  according to the following schedule: 
 65.13     (1) effective July 1, 2003, the second and fourth judicial 
 65.14  districts; 
 65.15     (2) effective July 1, 2004, the first and third judicial 
 65.16  districts; and 
 65.17     (3) effective July 1, 2005, the sixth and tenth judicial 
 65.18  districts. 
 65.19     (b) Mandated court services as defined in this section for 
 65.20  the remaining judicial districts shall be transferred to the 
 65.21  state effective July 1, 2001. 
 65.22     Subd. 2.  [DEFINITION; SALARY EXPENDITURES.] "Salary 
 65.23  expenditures" means the salary of court administration 
 65.24  employees, including salaries, related fringe benefits, and 
 65.25  insurance, granted to court and other county employees in 
 65.26  collective bargaining or county pay plans. 
 65.27     Subd. 3.  [DEFINITION; COURT ADMINISTRATION 
 65.28  EXPENDITURES.] "Court administration expenditures" means the 
 65.29  total expenditures of (1) salary expenditures as defined under 
 65.30  subdivision 2 and (2) other related administrative operating 
 65.31  expenditures. 
 65.32     Subd. 4.  [DEFINITION; MANDATED COURT SERVICES.] "Mandated 
 65.33  court services" means services for: 
 65.34     (1) guardian ad litem; 
 65.35     (2) interpreter; 
 65.36     (3) Minnesota Rules, parts 9525.0900 to 9525.1020 (rule 
 66.1   20); 
 66.2      (4) civil commitment examination, not including 
 66.3   hospitalization or treatment costs, for mental commitments and 
 66.4   related proceedings under chapter 253B; and 
 66.5      (5) in forma pauperis costs. 
 66.6      [EFFECTIVE DATE.] This section is effective the day 
 66.7   following final enactment. 
 66.8      Sec. 22.  [484.77] [FACILITIES.] 
 66.9      The county board in each county shall provide suitable 
 66.10  facilities for court purposes at the county seat, or at other 
 66.11  locations agreed upon by the district court and the county.  The 
 66.12  county shall also be responsible for the costs of renting, 
 66.13  maintaining, operating, remodeling, insuring, and renovating 
 66.14  those facilities occupied by the court. 
 66.15     [EFFECTIVE DATE.] This section is effective the day 
 66.16  following final enactment. 
 66.17     Sec. 23.  Minnesota Statutes 2000, section 487.33, 
 66.18  subdivision 5, is amended to read: 
 66.19     Subd. 5.  [ALLOCATION.] The court administrator shall 
 66.20  provide the county treasurer with the name of the municipality 
 66.21  or other subdivision of government where the offense was 
 66.22  committed which employed or provided by contract the arresting 
 66.23  or apprehending officer and the name of the municipality or 
 66.24  other subdivision of government which employed the prosecuting 
 66.25  attorney or otherwise provided for prosecution of the offense 
 66.26  for each fine or penalty and the total amount of fines or 
 66.27  penalties collected for each municipality or other subdivision 
 66.28  of government.  On or before the last day of each month, the 
 66.29  county treasurer shall pay over to the treasurer of each 
 66.30  municipality or subdivision of government within the county all 
 66.31  fines or penalties for parking violations for which complaints 
 66.32  and warrants have not been issued and one-third of all fines or 
 66.33  penalties collected during the previous month for offenses 
 66.34  committed within the municipality or subdivision of government 
 66.35  from persons arrested or issued citations by officers employed 
 66.36  by the municipality or subdivision or provided by the 
 67.1   municipality or subdivision by contract.  An additional 
 67.2   one-third of all fines or penalties shall be paid to the 
 67.3   municipality or subdivision of government providing prosecution 
 67.4   of offenses of the type for which the fine or penalty is 
 67.5   collected occurring within the municipality or subdivision, 
 67.6   imposed for violations of state statute or of an ordinance, 
 67.7   charter provision, rule or regulation of a city whether or not a 
 67.8   guilty plea is entered or bail is forfeited.  Except as provided 
 67.9   in section 299D.03, subdivision 5, or as otherwise provided by 
 67.10  law, all other fines and forfeitures and all fees and statutory 
 67.11  court costs collected by the court administrator shall be paid 
 67.12  to the county treasurer of the county in which the funds were 
 67.13  collected who shall dispense them as provided by law.  In a 
 67.14  county in a judicial district under section 480.181, subdivision 
 67.15  1, paragraph (b), as added in Laws 1999, chapter 216, article 7, 
 67.16  section 26, all other fines, forfeitures, fees, and statutory 
 67.17  court costs must be paid to the state treasurer for deposit in 
 67.18  the state treasury and credited to the general fund. 
 67.19     [EFFECTIVE DATE.] This section is effective July 1, 2003, 
 67.20  in the second and fourth districts; July 1, 2004, in the first 
 67.21  and third districts; and July 1, 2005, in the sixth and tenth 
 67.22  districts. 
 67.23     Sec. 24.  Minnesota Statutes 2000, section 488A.03, is 
 67.24  amended by adding a subdivision to read: 
 67.25     Subd. 14.  [REVENUES TO GENERAL FUND.] In a judicial 
 67.26  district under section 480.181, subdivision 1, paragraph (b), 
 67.27  the county's share of all fines, forfeitures, fees, and 
 67.28  statutory court costs must be paid to the state treasurer for 
 67.29  deposit in the state treasury and credited to the general fund. 
 67.30     Sec. 25.  Minnesota Statutes 2000, section 488A.20, is 
 67.31  amended by adding a subdivision to read: 
 67.32     Subd. 8.  [REVENUES TO GENERAL FUND.] In a judicial 
 67.33  district under section 480.181, subdivision 1, paragraph (b), 
 67.34  the county's share of all fines, forfeitures, fees, and 
 67.35  statutory court costs must be paid to the state treasurer for 
 67.36  deposit in the state treasury and credited to the general fund. 
 68.1      Sec. 26.  Minnesota Statutes 2000, section 574.34, 
 68.2   subdivision 1, is amended to read: 
 68.3      Subdivision 1.  [GENERAL.] Fines and forfeitures not 
 68.4   specially granted or appropriated by law shall be paid into the 
 68.5   treasury of the county where they are incurred, except in a 
 68.6   county in a judicial district under section 480.181, subdivision 
 68.7   1, paragraph (b), as added in Laws 1999, chapter 216, article 7, 
 68.8   section 26, the fines and forfeitures must be deposited in the 
 68.9   state treasury and credited to the general fund. 
 68.10     [EFFECTIVE DATE.] This section is effective July 1, 2003, 
 68.11  in the second and fourth districts; July 1, 2004, in the first 
 68.12  and third districts; and July 1, 2005, in the sixth and tenth 
 68.13  districts. 
 68.14     Sec. 27.  [FUNDING FOR DAY SERVICES PROGRAMS.] 
 68.15     Subdivision 1.  [FEDERAL WAIVER REQUESTS.] The commissioner 
 68.16  of human services shall submit to the federal Health Care 
 68.17  Financing Administration by September 1, 2001, a request for a 
 68.18  home and community-based services waiver for day services, 
 68.19  including:  community inclusion, supported employment, and day 
 68.20  training and habilitation services defined in Minnesota 
 68.21  Statutes, section 252.41, subdivision 3, clause (1), for persons 
 68.22  eligible for the waiver under Minnesota Statutes, section 
 68.23  256B.092. 
 68.24     Subd. 2.  [STATE FUNDING OF NONFEDERAL SHARE.] On the later 
 68.25  of July 1, 2003, or July 1 of the second calendar year after the 
 68.26  date when the federal Health Care Financing Administration 
 68.27  grants the waiver request under subdivision 1, the state must 
 68.28  assume the nonfederal share of medical assistance costs for day 
 68.29  training for persons receiving services under the day services 
 68.30  waiver under subdivision 1.  The county shall be reimbursed 
 68.31  using the procedures set out in Minnesota Statutes, section 
 68.32  256.025, subdivision 3. 
 68.33     Subd. 3.  [APPROPRIATION.] An amount sufficient to pay the 
 68.34  costs under this section is annually appropriated from the 
 68.35  general fund to the commissioner of human services. 
 68.36     Sec. 28.  [TRANSITIONAL PROVISIONS.] 
 69.1      Subdivision 1.  [TRANSFER OF PROPERTY.] The title to 
 69.2   personal property that is used by employees being transferred to 
 69.3   state employment under this article in the scope of their 
 69.4   employment is transferred to the state when they become state 
 69.5   employees.  
 69.6      Subd. 2.  [RULES.] The supreme court, in consultation with 
 69.7   the conference of chief judges, may adopt rules to implement 
 69.8   this article.  
 69.9      Subd. 3.  [BUDGETS.] Notwithstanding any law to the 
 69.10  contrary, the fiscal year budgets for the year in which the 
 69.11  state assumes the cost of court administration in the judicial 
 69.12  district for the court administrators' offices being transferred 
 69.13  to state employment under this article, including the number of 
 69.14  complement positions and salaries, must be submitted by the 
 69.15  court administrators to the supreme court.  The budgets must 
 69.16  include the current levels of funding and positions at the time 
 69.17  of submission as well as any requests for increases in funding 
 69.18  and positions. 
 69.19     [EFFECTIVE DATE.] This section is effective July 1, 2003, 
 69.20  in the second and fourth districts; July 1, 2004, in the first 
 69.21  and third districts; and July 1, 2005, in the sixth and tenth 
 69.22  districts. 
 69.23     Sec. 29.  [APPROPRIATIONS FOR COURT COSTS.] 
 69.24     (a) The supreme court general fund appropriation base is 
 69.25  increased by $8,878,000 in fiscal year 2002 to be used to pay 
 69.26  the costs of mandated court services assumed by the state under 
 69.27  Minnesota Statutes, section 480.183, subdivision 1, paragraph 
 69.28  (b). 
 69.29     (b) For each of calendar years 2003 and 2004, $1,500,000 is 
 69.30  appropriated from the general fund to the supreme court to fund 
 69.31  court takeover equity adjustments.  This amount must be added to 
 69.32  the court base budget in subsequent fiscal years. 
 69.33                             ARTICLE 4
 69.34                       INDIVIDUAL INCOME TAX
 69.35     Section 1.  Minnesota Statutes 2000, section 10A.31, 
 69.36  subdivision 3, is amended to read: 
 70.1      Subd. 3.  [FORM.] The commissioner of revenue must provide 
 70.2   on the first page of the income tax form and the renter and 
 70.3   homeowner property tax refund return a space for the individual 
 70.4   to indicate a wish to pay $5 ($10 if filing a joint return) from 
 70.5   the general fund of the state to finance election campaigns.  
 70.6   The front page of the form must also contain language prepared 
 70.7   by the commissioner that permits all instructions and 
 70.8   information necessary to enable the individual to direct the 
 70.9   state to pay the $5 (or $10 if filing a joint return) to:  (1) 
 70.10  one of the major political parties; (2) any minor political 
 70.11  party that qualifies under subdivision 3a; or (3) all qualifying 
 70.12  candidates as provided by subdivision 7.  The renter and 
 70.13  homeowner property tax refund return must include instructions 
 70.14  that the individual filing the return may designate $5 on the 
 70.15  return only if the individual has not designated $5 on the 
 70.16  income tax return.  The information required under this 
 70.17  subdivision must be printed in a type size no smaller than that 
 70.18  which is used for tax computation steps on the form. 
 70.19     Sec. 2.  Minnesota Statutes 2000, section 289A.08, 
 70.20  subdivision 11, is amended to read: 
 70.21     Subd. 11.  [INFORMATION INCLUDED IN INCOME TAX RETURN.] The 
 70.22  return must state the name of the taxpayer, or taxpayers, if the 
 70.23  return is a joint return, and the address of the taxpayer in the 
 70.24  same name or names and same address as the taxpayer has used in 
 70.25  making the taxpayer's income tax return to the United States, 
 70.26  and must state the social security number of the taxpayer, or 
 70.27  taxpayers, if a social security number has been issued by the 
 70.28  United States with respect to the taxpayers, and must state the 
 70.29  amount of the taxable income of the taxpayer as it appears on 
 70.30  the federal return for the taxable year to which the Minnesota 
 70.31  state return applies.  The return must also include the address 
 70.32  of the principal residence of the taxpayer as of the last day of 
 70.33  the taxable year, which may be used by the commissioner of 
 70.34  revenue to provide aggregate data but not to provide information 
 70.35  that would identify an individual taxpayer.  The taxpayer must 
 70.36  attach to the taxpayer's Minnesota state income tax return a 
 71.1   copy of the federal income tax return that the taxpayer has 
 71.2   filed or is about to file for the period, unless the taxpayer is 
 71.3   eligible to telefile the federal return and does file the 
 71.4   Minnesota return by telefiling. 
 71.5      Sec. 3.  Minnesota Statutes 2000, section 290.01, 
 71.6   subdivision 19b, is amended to read: 
 71.7      Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
 71.8   individuals, estates, and trusts, there shall be subtracted from 
 71.9   federal taxable income: 
 71.10     (1) interest income on obligations of any authority, 
 71.11  commission, or instrumentality of the United States to the 
 71.12  extent includable in taxable income for federal income tax 
 71.13  purposes but exempt from state income tax under the laws of the 
 71.14  United States; 
 71.15     (2) if included in federal taxable income, the amount of 
 71.16  any overpayment of income tax to Minnesota or to any other 
 71.17  state, for any previous taxable year, whether the amount is 
 71.18  received as a refund or as a credit to another taxable year's 
 71.19  income tax liability; 
 71.20     (3) the amount paid to others, less the credit allowed 
 71.21  under section 290.0674, not to exceed $1,625 for each qualifying 
 71.22  child in a prekindergarten educational program or in grades 
 71.23  kindergarten to 6, and $2,500 for each qualifying child in 
 71.24  grades 7 to 12, for tuition, textbooks, and transportation of 
 71.25  each qualifying child in attending an elementary or secondary 
 71.26  school situated in Minnesota, North Dakota, South Dakota, Iowa, 
 71.27  or Wisconsin, wherein a resident of this state may legally 
 71.28  fulfill the state's compulsory attendance laws, which is not 
 71.29  operated for profit, and which adheres to the provisions of the 
 71.30  Civil Rights Act of 1964 and chapter 363, or for fees charged 
 71.31  for enrollment in a prekindergarten educational program for 
 71.32  which the taxpayer does not receive any other tax deduction or 
 71.33  credit or any reimbursement.  For the purposes of this clause, 
 71.34  "tuition" includes fees or tuition as defined in section 
 71.35  290.0674, subdivision 1, clause (1).  As used in this clause, 
 71.36  "prekindergarten educational program" means: 
 72.1      (i) prekindergarten programs established by a school 
 72.2   district under chapter 124D; 
 72.3      (ii) preschools, nursery schools, and early childhood 
 72.4   development programs licensed by the department of human 
 72.5   services and accredited by the National Association for the 
 72.6   Education of Young Children or National Early Childhood Program 
 72.7   Accreditation; 
 72.8      (iii) Montessori programs affiliated with or accredited by 
 72.9   the American Montessori Society or American Montessori 
 72.10  International; and 
 72.11     (iv) child care programs provided by family day care 
 72.12  providers holding a current early childhood development 
 72.13  credential approved by the commissioner of children, families, 
 72.14  and learning.  As used in this clause, "textbooks" includes 
 72.15  books and other instructional materials and equipment used in 
 72.16  elementary and secondary schools in teaching only those subjects 
 72.17  legally and commonly taught in public elementary and secondary 
 72.18  schools in this state.  Equipment expenses qualifying for 
 72.19  deduction includes expenses as defined and limited in section 
 72.20  290.0674, subdivision 1, clause clauses (3) and (5).  "Textbooks"
 72.21  does not include instructional books and materials used in the 
 72.22  teaching of religious tenets, doctrines, or worship, the purpose 
 72.23  of which is to instill such tenets, doctrines, or worship, nor 
 72.24  does it include books or materials for, or transportation to, 
 72.25  extracurricular activities including sporting events, musical or 
 72.26  dramatic events, speech activities, driver's education, or 
 72.27  similar programs.  For purposes of the subtraction provided by 
 72.28  this clause, "qualifying child" has the meaning given in section 
 72.29  32(c)(3) of the Internal Revenue Code; 
 72.30     (4) contributions made in taxable years beginning after 
 72.31  December 31, 1981, and before January 1, 1985, to a qualified 
 72.32  governmental pension plan, an individual retirement account, 
 72.33  simplified employee pension, or qualified plan covering a 
 72.34  self-employed person that were included in Minnesota gross 
 72.35  income in the taxable year for which the contributions were made 
 72.36  but were deducted or were not included in the computation of 
 73.1   federal adjusted gross income, less any amount allowed to be 
 73.2   subtracted as a distribution under this subdivision or a 
 73.3   predecessor provision in taxable years that began before January 
 73.4   1, 2000.  This subtraction applies only for taxable years 
 73.5   beginning after December 31, 1999, and before January 1, 2001.  
 73.6   If an individual's subtraction under this clause exceeds the 
 73.7   individual's taxable income, the excess may be carried forward 
 73.8   to taxable years beginning after December 31, 2000, and before 
 73.9   January 1, 2002; 
 73.10     (5) income as provided under section 290.0802; 
 73.11     (6) the amount of unrecovered accelerated cost recovery 
 73.12  system deductions allowed under subdivision 19g; 
 73.13     (7) to the extent included in federal adjusted gross 
 73.14  income, income realized on disposition of property exempt from 
 73.15  tax under section 290.491; 
 73.16     (8) to the extent not deducted in determining federal 
 73.17  taxable income or used to claim the long-term care insurance 
 73.18  credit under section 290.0672, the amount paid for health 
 73.19  insurance of self-employed individuals as determined under 
 73.20  section 162(l) of the Internal Revenue Code, except that the 
 73.21  percent limit does not apply.  If the individual deducted 
 73.22  insurance payments under section 213 of the Internal Revenue 
 73.23  Code of 1986, the subtraction under this clause must be reduced 
 73.24  by the lesser of: 
 73.25     (i) the total itemized deductions allowed under section 
 73.26  63(d) of the Internal Revenue Code, less state, local, and 
 73.27  foreign income taxes deductible under section 164 of the 
 73.28  Internal Revenue Code and the standard deduction under section 
 73.29  63(c) of the Internal Revenue Code; or 
 73.30     (ii) the lesser of (A) the amount of insurance qualifying 
 73.31  as "medical care" under section 213(d) of the Internal Revenue 
 73.32  Code to the extent not deducted under section 162(1) of the 
 73.33  Internal Revenue Code or excluded from income or (B) the total 
 73.34  amount deductible for medical care under section 213(a); 
 73.35     (9) the exemption amount allowed under Laws 1995, chapter 
 73.36  255, article 3, section 2, subdivision 3; 
 74.1      (10) to the extent included in federal taxable income, 
 74.2   postservice benefits for youth community service under section 
 74.3   124D.42 for volunteer service under United States Code, title 
 74.4   42, sections 12601 to 12604; 
 74.5      (11) to the extent not deducted in determining federal 
 74.6   taxable income by an individual who does not itemize deductions 
 74.7   for federal income tax purposes for the taxable year, an amount 
 74.8   equal to 50 percent of the excess of charitable contributions 
 74.9   allowable as a deduction for the taxable year under section 
 74.10  170(a) of the Internal Revenue Code over $500; 
 74.11     (12) to the extent included in federal taxable income, 
 74.12  holocaust victims' settlement payments for any injury incurred 
 74.13  as a result of the holocaust, if received by an individual who 
 74.14  was persecuted for racial or religious reasons by Nazi Germany 
 74.15  or any other Axis regime or an heir of such a person; and 
 74.16     (13) for taxable years beginning before January 1, 2008, 
 74.17  the amount of the federal small ethanol producer credit allowed 
 74.18  under section 40(a)(3) of the Internal Revenue Code which is 
 74.19  included in gross income under section 87 of the Internal 
 74.20  Revenue Code. 
 74.21     [EFFECTIVE DATE.] This section is effective for taxable 
 74.22  years beginning after December 31, 2000. 
 74.23     Sec. 4.  Minnesota Statutes 2000, section 290.06, is 
 74.24  amended by adding a subdivision to read: 
 74.25     Subd. 29.  [CREDIT FOR ADOPTION EXPENSES.] (a) A taxpayer 
 74.26  may take a credit against the tax due under this chapter equal 
 74.27  to 80 percent of the amount of qualified adoption expenses paid 
 74.28  or incurred by the taxpayer as provided in this subdivision. 
 74.29     (b) "Qualified adoption expenses" means the following 
 74.30  expenses to the extent they are directly related to the process 
 74.31  of adopting a child who is, at the time of the adoption, under 
 74.32  the age of 18 or is physically or mentally incapable of 
 74.33  self-care and who is not the stepchild of the adoptive parent: 
 74.34     (1) fees for required services of the department of human 
 74.35  services or through a licensed adoption agency or fees imposed 
 74.36  by any other governmental agency in connection with the 
 75.1   adoption; 
 75.2      (2) travel-related expenses for the adoptive family and 
 75.3   child; and 
 75.4      (3) medical fees and expenses that are not reimbursed by 
 75.5   insurance, including medical expenses of the child and birth 
 75.6   mother during the pregnancy and birth. 
 75.7      (c) The credit must be taken in the taxable year during 
 75.8   which the adoption becomes final. 
 75.9      (d) The maximum amount of the credit that may be taken for 
 75.10  all taxable years for the adoption of one child is $5,000 or, in 
 75.11  the case of the adoption of a special needs child, $8,000.  For 
 75.12  purposes of this subdivision, a "special needs child" is a child 
 75.13  who meets the requirements described in section 259.67, 
 75.14  subdivision 1 or 4. 
 75.15     (e) If the amount of the credit for which a taxpayer is 
 75.16  eligible under this subdivision exceeds the taxpayer's liability 
 75.17  for tax for the taxable year, the excess may be carried over to 
 75.18  each of the five taxable years succeeding the taxable year.  The 
 75.19  entire amount of the excess unused credit for the taxable year 
 75.20  shall be carried first to the earliest of the taxable years to 
 75.21  which the credit may be carried and then to each successive year 
 75.22  to which the credit may be carried.  The amount of the unused 
 75.23  credit which may be added under this paragraph must not exceed 
 75.24  the taxpayer's liability for tax less the credit for the taxable 
 75.25  year. 
 75.26     (f) No credit may be taken under this subdivision for any 
 75.27  expense for which a deduction or credit is allowed under any 
 75.28  other provision of this chapter or section 23 of the Internal 
 75.29  Revenue Code of 1986, as amended through December 31, 2000.  No 
 75.30  credit may be taken under this subdivision for any expense to 
 75.31  the extent that funds for the expense are received under any 
 75.32  federal, state, or local government program or an employer 
 75.33  reimbursement program. 
 75.34     [EFFECTIVE DATE.] This section is effective for taxable 
 75.35  years beginning after December 31, 2000. 
 75.36     Sec. 5.  Minnesota Statutes 2000, section 290.06, is 
 76.1   amended by adding a subdivision to read: 
 76.2      Subd. 30.  [CREDIT FOR CONVENIENCE STORE SECURITY 
 76.3   CAMERAS.] (a) A taxpayer may take a credit against the tax due 
 76.4   under this chapter in an amount equal to 25 percent of the cost 
 76.5   incurred by the taxpayer to purchase and install video security 
 76.6   equipment that meet or exceed the minimum requirements in 
 76.7   section 299G.19, subdivision 2, in a convenience store as 
 76.8   defined in section 299G.19, subdivision 1.  The amount of the 
 76.9   credit may not exceed $5,000 per convenience store, and the 
 76.10  credit may be taken in only one taxable year by a taxpayer.  
 76.11     (b) If the credit provided under this subdivision exceeds 
 76.12  the tax liability of the taxpayer for the taxable year, the 
 76.13  excess amount of the credit may be carried over to each of the 
 76.14  five taxable years succeeding the taxable year.  The entire 
 76.15  amount of the credit must be carried to the earliest taxable 
 76.16  year to which the amount may be carried.  The unused portion of 
 76.17  the credit must be carried to the following taxable year.  No 
 76.18  credit may be carried to a taxable year more than five years 
 76.19  after the taxable year in which the credit was earned.  
 76.20     (c) The credit provided in this subdivision is available 
 76.21  for taxable years beginning after December 31, 2000, and before 
 76.22  January 1, 2006. 
 76.23     Sec. 6.  Minnesota Statutes 2000, section 290.0674, 
 76.24  subdivision 1, is amended to read: 
 76.25     Subdivision 1.  [CREDIT ALLOWED.] An individual is allowed 
 76.26  a credit against the tax imposed by this chapter in an amount 
 76.27  equal to 80 percent of the amount paid for education-related 
 76.28  expenses for a qualifying child in a prekindergarten educational 
 76.29  program or in kindergarten through grade 12.  For purposes of 
 76.30  this section, "education-related expenses" means: 
 76.31     (1) fees or tuition for instruction by an instructor under 
 76.32  who meets one of the requirements of section 120A.22, 
 76.33  subdivision 10, clause (1), (2), (3), (4), or (5), or by who is 
 76.34  a member of the Minnesota music teachers association, and is not 
 76.35  a lineal ancestor or sibling of the dependent for instruction 
 76.36  outside the regular school day or school year, including 
 77.1   tutoring, driver's education offered as part of school 
 77.2   curriculum, regardless of whether it is taken from a public or 
 77.3   private entity or summer camps, in grade or age appropriate 
 77.4   curricula that supplement curricula and instruction available 
 77.5   during the regular school year, that assists a dependent to 
 77.6   improve knowledge of core curriculum areas or to expand 
 77.7   knowledge and skills under the graduation rule under section 
 77.8   120B.02 and that do not include the teaching of religious 
 77.9   tenets, doctrines, or worship, the purpose of which is to 
 77.10  instill such tenets, doctrines, or worship, and fees for 
 77.11  enrollment in a prekindergarten educational program as defined 
 77.12  in section 290.01, subdivision 19b; 
 77.13     (2) expenses for textbooks, including books and other 
 77.14  instructional materials and equipment used in elementary and 
 77.15  secondary schools in teaching only those subjects legally and 
 77.16  commonly taught in public elementary and secondary schools in 
 77.17  this state.  "Textbooks" does not include instructional books 
 77.18  and materials used in the teaching of religious tenets, 
 77.19  doctrines, or worship, the purpose of which is to instill such 
 77.20  tenets, doctrines, or worship, nor does it include books or 
 77.21  materials for extracurricular activities including sporting 
 77.22  events, musical or dramatic events, speech activities, driver's 
 77.23  education, or similar programs; 
 77.24     (3) a maximum expense of $200 per family for personal 
 77.25  computer hardware, excluding single purpose processors, and 
 77.26  educational software that assists a dependent to improve 
 77.27  knowledge of core curriculum areas or to expand knowledge and 
 77.28  skills under the graduation rule under section 120B.02 purchased 
 77.29  for use in the taxpayer's home and not used in a trade or 
 77.30  business regardless of whether the computer is required by the 
 77.31  dependent's school; and 
 77.32     (4) the amount paid to others for transportation of a 
 77.33  qualifying child attending an elementary or secondary school 
 77.34  situated in Minnesota, North Dakota, South Dakota, Iowa, or 
 77.35  Wisconsin, wherein a resident of this state may legally fulfill 
 77.36  the state's compulsory attendance laws, which is not operated 
 78.1   for profit, and which adheres to the provisions of the Civil 
 78.2   Rights Act of 1964 and chapter 363; and 
 78.3      (5) expenses for the purchase or lease of musical 
 78.4   instruments used in classes offered as part of the school 
 78.5   curriculum, provided that expenses for purchases qualify only if 
 78.6   purchased for a child in kindergarten through grade 8. 
 78.7      For purposes of this section, "qualifying child" has the 
 78.8   meaning given in section 32(c)(3) of the Internal Revenue Code. 
 78.9      [EFFECTIVE DATE.] This section is effective for taxable 
 78.10  years beginning after December 31, 2000, except that the 
 78.11  reduction of the rate of the credit is effective for taxable 
 78.12  years beginning after December 31, 2001. 
 78.13     Sec. 7.  Minnesota Statutes 2000, section 290.0674, is 
 78.14  amended by adding a subdivision to read: 
 78.15     Subd. 2a.  [ASSIGNMENT OF CREDIT.] A taxpayer who receives 
 78.16  a credit under this section may assign all or a part of the 
 78.17  refundable portion of the credit to a state or federally 
 78.18  chartered bank, savings bank, savings association, or credit 
 78.19  union, if the taxpayer provides proof of an expenditure that 
 78.20  qualifies for the credit under this section from a vendor that 
 78.21  has been certified for this purpose by the commissioner of 
 78.22  children, families, and learning. 
 78.23     [EFFECTIVE DATE.] This section is effective for taxable 
 78.24  years beginning after December 31, 2001, and before January 1, 
 78.25  2004. 
 78.26     Sec. 8.  Minnesota Statutes 2000, section 290.0675, 
 78.27  subdivision 3, is amended to read: 
 78.28     Subd. 3.  [CREDIT AMOUNT.] The credit amount is as shown in 
 78.29  the table in this subdivision, based on the couple's taxable 
 78.30  income for the tax year and on the earned income of the 
 78.31  lesser-earning spouse the difference between the tax on the 
 78.32  couple's joint Minnesota taxable income under the rates in 
 78.33  section 290.06, subdivision 2c, paragraph (a), and the sum of 
 78.34  the tax under the rates of section 290.06, subdivision 2c, 
 78.35  paragraph (b), on the earned income of the lesser-earning 
 78.36  spouse, and the tax under the rates of section 290.06, 
 79.1   subdivision 2c, paragraph (b), on the couple's joint Minnesota 
 79.2   taxable income, minus the earned income of the lesser-earning 
 79.3   spouse. 
 79.4                                Credit For          Credit For
 79.5     Earned Income of           Taxable Income      Taxable Income
 79.6     Lesser Earning Spouse      $25,680-$102,029    $102,030-over
 79.7     $14,250 - $15,249          $7                  $0    
 79.8     $15,250 - $16,249          $24                 $0    
 79.9     $16,250 - $17,249          $41                 $0    
 79.10    $17,250 - $18,249          $58                 $0    
 79.11    $18,250 - $19,249          $75                 $0    
 79.12    $19,250 - $20,249          $92                 $0  
 79.13    $20,250 - $21,249          $109                $0  
 79.14    $21,250 - $22,249          $126                $0 
 79.15    $22,250 - $23,249          $143                $0
 79.16    $23,250 - $24,249          $160                $0 
 79.17    $24,250 - $25,249          $161                $0   
 79.18    $25,250 - $26,249          $161                $0  
 79.19    $26,250 - $27,249          $161                $0   
 79.20    $27,250 - $28,249          $161                $0
 79.21    $28,250 - $29,249          $161                $0
 79.22    $29,250 - $30,249          $161                $0
 79.23    $30,250 - $31,249          $161                $0
 79.24    $31,250 - $32,249          $161                $6
 79.25    $32,250 - $33,249          $161                $14
 79.26    $33,250 - $34,249          $161                $22
 79.27    $34,250 - $35,249          $161                $30
 79.28    $35,250 - $36,249          $161                $38
 79.29    $36,250 - $37,249          $161                $46
 79.30    $37,250 - $38,249          $161                $54
 79.31    $38,250 - $39,249          $161                $62
 79.32    $39,250 - $40,249          $161                $70
 79.33    $40,250 - $41,249          $161                $78
 79.34    $41,250 - $42,249          $161                $86
 79.35    $42,250 - $43,249          $161                $94
 79.36    $43,250 - $44,249          $161                $102
 80.1     $44,250 - $45,249          $161                $110
 80.2     $45,250 - $46,249          $161                $118
 80.3     $46,250 - $47,249          $161                $126
 80.4     $47,250 - $48,249          $161                $134
 80.5     $48,250 - $49,249          $161                $142
 80.6     $49,250 - $50,249          $161                $150
 80.7     $50,250 - $51,249          $161                $158
 80.8     $51,250 - $52,249          $161                $166
 80.9     $52,250 - $53,249          $161                $174
 80.10    $53,250 - $54,249          $161                $182
 80.11    $54,250 - $55,249          $161                $190
 80.12    $55,250 - $56,249          $161                $198
 80.13    $56,250 - $57,249          $161                $206
 80.14    $57,250 - $58,249          $161                $214
 80.15    $58,250 - $59,249          $161                $222
 80.16    $59,250 - $60,249          $161                $230
 80.17    $60,250 - $61,249          $161                $238
 80.18    $61,250 - $62,249          $161                $246
 80.19    $62,250 - $63,249          $161                $254
 80.20    $63,250 - $64,249          $161                $262
 80.21    $64,250 and over           $161                $268
 80.22     For taxable years beginning after December 31, 2001, the 
 80.23  commissioner of revenue shall construct and make available to 
 80.24  taxpayers a comprehensive table showing the credit under this 
 80.25  section at brackets of earnings of the lesser-earning spouse and 
 80.26  joint taxable income.  The brackets of earnings shall not be 
 80.27  more than $2,000. 
 80.28     For taxable years beginning after December 31, 2000 2002, 
 80.29  the commissioner shall update the table as necessary to provide 
 80.30  a credit that reflects the relationship between the marginal tax 
 80.31  rates imposed under section 290.06, subdivision 2c. 
 80.32     [EFFECTIVE DATE.] This section is effective for tax years 
 80.33  beginning after December 31, 2000. 
 80.34     Sec. 9.  [290.0676] [CREDIT FOR LAND DONATED FOR 
 80.35  CONSERVATION PURPOSES.] 
 80.36     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
 81.1   section, the following terms have the meaning given. 
 81.2      (b) "Interest in real property" means fee title or 
 81.3   qualified real property interest as defined in section 170(h) of 
 81.4   the Internal Revenue Code and the United States Treasury 
 81.5   Regulations promulgated thereunder. 
 81.6      (c) "Fair market value" of an interest in real property 
 81.7   means the value as determined by a "qualified appraisal" 
 81.8   prepared by a "qualified appraiser" as those terms are defined 
 81.9   in United States Treasury Regulations, section 1.170A-13, as 
 81.10  amended through December 31, 2000.  If the taxpayer does not 
 81.11  obtain an appraisal, "fair market value" means the estimated 
 81.12  market value of the property as determined by the assessor for 
 81.13  property tax purposes. 
 81.14     (d) "Discount of the sale price" means the difference 
 81.15  between the fair market value of an interest in real property at 
 81.16  the time of sale and the sale price, if the price the property 
 81.17  is sold for is lower. 
 81.18     (e) "Conservation purposes" means the conservation purposes 
 81.19  as defined in section 170(h)(4)(A)(i), (ii), and (iii) of the 
 81.20  Internal Revenue Code. 
 81.21     Subd. 2.  [CREDIT ALLOWED.] A taxpayer who donates an 
 81.22  interest in real property in this state for conservation 
 81.23  purposes to a qualified organization described in subdivision 3, 
 81.24  paragraph (a), may take a credit against the tax imposed by this 
 81.25  chapter in an amount equal to 50 percent of the fair market 
 81.26  value of the interest in real property.  A taxpayer who sells an 
 81.27  interest in real property at a discount for conservation 
 81.28  purposes may take a credit against the tax imposed by this 
 81.29  chapter in an amount equal to 50 percent of the value of the 
 81.30  discount of the sale price in the interest in real property. 
 81.31     Subd. 3.  [QUALIFICATION.] (a) To qualify for a credit 
 81.32  under this section, the taxpayer must convey the interest in 
 81.33  real property to (1) the state of Minnesota, a local government 
 81.34  conservation agency, or a special purpose unit of government, or 
 81.35  (2) a private organization as provided in section 501(c) of the 
 81.36  Internal Revenue Code that: 
 82.1      (i) meets the requirements of section 170(h)(3) of the 
 82.2   Internal Revenue Code; and 
 82.3      (ii) is organized and operated for one of the conservation 
 82.4   purposes specified in section 170(h)(4)(A)(i), (ii), and (iii) 
 82.5   of the Internal Revenue Code.  
 82.6      (b) A taxpayer claiming the credit under this section shall 
 82.7   attach the following to the tax returns on which the credit is 
 82.8   claimed:  
 82.9      (1) a certificate of acceptance from an organization 
 82.10  described in paragraph (a) verifying that the organization has 
 82.11  accepted the contribution; and 
 82.12     (2) a copy of a qualified appraisal by a qualified 
 82.13  appraiser as those terms are defined in United States Treasury 
 82.14  Regulations, section 1.170A-13, as amended through December 31, 
 82.15  2000, or a copy of the most recent notice of estimated market 
 82.16  value provided by the assessor. 
 82.17     (c) Conveyances of real property for open space for the 
 82.18  purpose of fulfilling density requirements or other requirements 
 82.19  to obtain subdivision or building permits shall not be eligible 
 82.20  for a credit under this section. 
 82.21     Subd. 4.  [LIMITATION; CARRYOVER.] (a) The credit for the 
 82.22  taxable year shall not exceed the taxpayer's liability for tax 
 82.23  before the credit under this section or $100,000, whichever is 
 82.24  less. 
 82.25     (b) If the amount of the credit determined under this 
 82.26  section for any taxable year exceeds the limitation in paragraph 
 82.27  (a), the excess shall be a carryover to each of the five 
 82.28  succeeding taxable years.  All of the excess unused credit for 
 82.29  the taxable year must be carried first to the earliest of the 
 82.30  taxable years to which the credit may be carried and then to 
 82.31  each successive year to which the credit may be carried.  The 
 82.32  unused credit that may be added under this paragraph in any year 
 82.33  may not exceed the lesser of the taxpayer's liability for tax 
 82.34  less the land donation credit for the taxable year or $100,000. 
 82.35     Subd. 5.  [TRANSFERABILITY OF CREDIT.] (a) A taxpayer may 
 82.36  transfer to another taxpayer all or part of the credit allowed 
 83.1   under this section.  A taxpayer who receives a credit 
 83.2   transferred under this section may use the transferred credit 
 83.3   subject to the same limitations and conditions as if that 
 83.4   taxpayer had made the original qualified donation.  
 83.5      (b) A taxpayer may transfer only the portion of the unused 
 83.6   credit that the taxpayer has not applied against the tax imposed 
 83.7   by this chapter.  For any taxable year in which a credit is 
 83.8   transferred under this section, the taxpayer transferring the 
 83.9   credit and the taxpayer receiving the credit shall both file 
 83.10  written statements with their income tax returns specifying the 
 83.11  amount of the credit that has been transferred.  A taxpayer may 
 83.12  not claim a credit transferred under this section unless the 
 83.13  written statement of the taxpayer transferring the credit 
 83.14  verifies the amount of the tax credit claimed. 
 83.15     [EFFECTIVE DATE.] This section is effective for taxable 
 83.16  years beginning after December 31, 2000. 
 83.17     Sec. 10.  [290.0679] [CREDIT FOR HISTORIC STRUCTURE 
 83.18  REHABILITATION.] 
 83.19     Subdivision 1.  [DEFINITIONS.] (a) As used in this section, 
 83.20  the terms defined in this subdivision have the meanings given. 
 83.21     (b) "Certified historic structure" means a property located 
 83.22  in Minnesota and listed individually on the National Register of 
 83.23  Historic Places or a historic property designated by either a 
 83.24  certified local government or a heritage preservation commission 
 83.25  created under the National Historic Preservation Act of 1966 and 
 83.26  whose designation is approved by the state historic preservation 
 83.27  officer. 
 83.28     (c) "Eligible property" means a certified historic 
 83.29  structure or a structure in a certified historic district that 
 83.30  is offered or used for residential or business purposes. 
 83.31     (d) "Structure in a certified historic district" means a 
 83.32  structure located in Minnesota which is certified by the state 
 83.33  historic preservation office as contributing to the historic 
 83.34  significance of a certified historic district listed on the 
 83.35  National Register of Historic Places or a local district that 
 83.36  has been certified by the United States Department of the 
 84.1   Interior. 
 84.2      Subd. 2.  [CREDIT ALLOWED.] A taxpayer who incurs costs for 
 84.3   the rehabilitation of eligible property in a taxable year may 
 84.4   take a credit against the tax imposed under this chapter in an 
 84.5   amount equal to 25 percent of the total costs of 
 84.6   rehabilitation.  Costs of rehabilitation include, but are not 
 84.7   limited to, qualified rehabilitation expenditures as defined 
 84.8   under section 47 of the Internal Revenue Code, provided that the 
 84.9   costs of rehabilitation must exceed 50 percent of the adjusted 
 84.10  basis of the building at the time the rehabilitation activity 
 84.11  begins, and the rehabilitation must meet standards consistent 
 84.12  with the standards of the Secretary of the Interior for 
 84.13  rehabilitation as determined by the state historic preservation 
 84.14  office of the Minnesota historical society. 
 84.15     Subd. 3.  [CREDIT TO BE REFUNDABLE; APPROPRIATION.] If the 
 84.16  amount of the credit under subdivision 2 exceeds the tax 
 84.17  liability under chapter 290 for the year in which the cost is 
 84.18  incurred, the commissioner shall refund the excess to the 
 84.19  taxpayer.  The amount necessary to pay the refunds is annually 
 84.20  appropriated from the general fund to the commissioner of 
 84.21  revenue. 
 84.22     Subd. 4.  [PARTNERSHIPS; MULTIPLE OWNERS.] Credits granted 
 84.23  to a partnership, a limited liability company taxed as a 
 84.24  partnership, or multiple owners of property shall be passed 
 84.25  through to the partners, members, or owners, respectively, pro 
 84.26  rata or pursuant to an executed agreement among the partners, 
 84.27  members, or owners documenting an alternate distribution method. 
 84.28     Subd. 5.  [PROCESS.] To claim the credit, the taxpayer must 
 84.29  apply to the state historic preservation office of the Minnesota 
 84.30  historical society for verification of eligibility before a 
 84.31  historic rehabilitation project begins.  The state historic 
 84.32  preservation office shall determine the amount of eligible 
 84.33  rehabilitation costs and whether the rehabilitation meets the 
 84.34  standards of the United States Department of the Interior.  The 
 84.35  state historic preservation office shall issue certificates 
 84.36  verifying eligibility for and the amount of credit.  The 
 85.1   taxpayer shall attach the certificate to any income tax return 
 85.2   on which the credit is claimed.  The state historic preservation 
 85.3   office of the Minnesota historical society may collect fees for 
 85.4   applications for the historic preservation tax credit.  Fees 
 85.5   shall be set at an amount that does not exceed the costs of 
 85.6   administering the tax credit program. 
 85.7      Subd. 6.  [DETERMINATION OF ECONOMIC IMPACT.] The Minnesota 
 85.8   historical society shall annually determine the economic impact 
 85.9   to the state from the rehabilitation of eligible property for 
 85.10  which credits are provided under this section and report on the 
 85.11  impact to the committees with jurisdiction over taxes of the 
 85.12  senate and house of representatives. 
 85.13     [EFFECTIVE DATE.] This section is effective for taxable 
 85.14  years beginning after December 31, 2000, provided that a 
 85.15  historic preservation project that was approved for federal 
 85.16  historic preservation tax credits in 2000 is eligible for state 
 85.17  tax credits for work performed in 2001 or thereafter.  For 
 85.18  qualified expenditures during calendar year 2001, the 
 85.19  requirement that eligibility must be verified by the Minnesota 
 85.20  historical society is considered to be met if the verification 
 85.21  is completed before the end of the year. 
 85.22     Sec. 11.  [299G.19] [CONVENIENCE STORE SECURITY.] 
 85.23     Subdivision 1.  [DEFINITION; CONVENIENCE STORE.] As used in 
 85.24  this section, "convenience store" means a place of business 
 85.25  primarily engaged in the retail sale of groceries, or both 
 85.26  groceries and gasoline.  Convenience store does not include a 
 85.27  business that always has at least five employees on the premises 
 85.28  or has at least 10,000 square feet of retail floor space. 
 85.29     Subd. 2.  [SECURITY CAMERA SYSTEM MINIMUM REQUIREMENTS.] (a)
 85.30  A convenience store must install security cameras with auto-iris 
 85.31  lenses.  Recording devices must be capable of retrieving an 
 85.32  image of sufficient quality to assist in offender 
 85.33  identification.  Cameras must be placed to record the cash 
 85.34  register area and all entry and exit doors to the convenience 
 85.35  store that are not normally locked and connected to a working 
 85.36  alarm system.  Cameras installed to observe the entrances and 
 86.1   exits must be placed and lenses fixed so that the entrances or 
 86.2   exits are completely visible in the field of view.  Cameras 
 86.3   installed to observe the cash register area must be placed to 
 86.4   provide an optimum view of the customer, clerk, and transaction 
 86.5   area.  Cameras and other video recording equipment must be in 
 86.6   good working order and any breakdowns of the equipment must be 
 86.7   repaired expeditiously.  Cameras and other video security 
 86.8   devices such as sequencers and multiplexers must be compatible 
 86.9   with the recording device. 
 86.10     (b) If a convenience store uses a VHS recorder, then the 
 86.11  recorder must be a commercial grade VHS deck.  Camera activity 
 86.12  must be recorded continuously.  Recording times must not exceed 
 86.13  24 hours.  The recorder must have a minimum of 240 lines of 
 86.14  resolution and four heads.  All recordings must have time and 
 86.15  date stamp.  The store must use a commercial grade VHS tape.  An 
 86.16  individual tape must not be reused more than 20 times.  The 
 86.17  recording device tapes or other recording media must be 
 86.18  maintained in a secure environment.  Tapes or other recorded 
 86.19  media must be available to law enforcement for a minimum period 
 86.20  of seven days. 
 86.21     (c) The technical specifications provided in this 
 86.22  subdivision are minimum standards and do not preclude a 
 86.23  convenience store from installing equipment that exceeds the 
 86.24  standard.  A convenience store must post a conspicuous sign 
 86.25  stating that the property is under camera surveillance. 
 86.26     Subd. 3.  [OTHER MEASURES.] Every convenience store shall 
 86.27  be equipped with the following security devices and standards: 
 86.28     (1) height markers at the entrance of the store which 
 86.29  display height measures; and 
 86.30     (2) a silent alarm to law enforcement or a private security 
 86.31  agency. 
 86.32     Subd. 4.  [TRAINING PROGRAMS.] The owner or principal 
 86.33  operator of a convenience store shall provide robbery deterrence 
 86.34  and safety training by an approved curriculum to its retail 
 86.35  employees within 60 days of employment.  The commissioner of 
 86.36  public safety shall approve, after consultation with interested 
 87.1   parties, training curriculum for purposes of this subdivision. 
 87.2      Subd. 5.  [PENALTIES.] Violations of this section are 
 87.3   subject to the penalties and remedies provided in section 8.31, 
 87.4   except subdivision 3a. 
 87.5      [EFFECTIVE DATE.] This section is effective January 1, 
 87.6   2002, for all convenience stores constructed or placed into 
 87.7   service on or after that date, or convenience stores with no 
 87.8   current security camera surveillance.  This section is effective 
 87.9   January 1, 2004, for all other convenience stores. 
 87.10     Sec. 12.  [STUDY OF ENERGY EFFICIENCY TAX INCENTIVES.] 
 87.11     The department of revenue shall study the feasibility, 
 87.12  cost, and effectiveness of providing tax incentives to encourage 
 87.13  purchase and use of energy efficient systems and products, and 
 87.14  report the findings of the study by January 15, 2002, to the 
 87.15  legislative committees that have jurisdiction over tax issues. 
 87.16     Sec. 13.  [APPROPRIATION.] 
 87.17     (a) $200,000 is appropriated from the general fund to the 
 87.18  commissioner of revenue to make grants to nonprofit 
 87.19  organizations, qualifying under section 501(c)(3) of the 
 87.20  Internal Revenue Code of 1986, to coordinate, facilitate, 
 87.21  encourage, and aid in the provision of taxpayer assistance 
 87.22  services.  This appropriation is available for fiscal years 2002 
 87.23  and 2003 and does not become a part of the base. 
 87.24     (b) "Taxpayer assistance services" mean accounting and tax 
 87.25  preparation services provided by volunteers to low-income and 
 87.26  disadvantaged Minnesota residents to help them file federal and 
 87.27  state income tax returns and Minnesota property tax refund 
 87.28  claims. 
 87.29     Sec. 14.  [REPEALER.] 
 87.30     Minnesota Statutes 2000, section 290.06, subdivision 25, is 
 87.31  repealed. 
 87.32                             ARTICLE 5
 87.33                           FEDERAL UPDATE
 87.34     Section 1.  Minnesota Statutes 2000, section 289A.02, 
 87.35  subdivision 7, is amended to read: 
 87.36     Subd. 7.  [INTERNAL REVENUE CODE.] Unless specifically 
 88.1   defined otherwise, "Internal Revenue Code" means the Internal 
 88.2   Revenue Code of 1986, as amended through December 31, 1999 2000. 
 88.3      [EFFECTIVE DATE.] This section is effective the day 
 88.4   following final enactment. 
 88.5      Sec. 2.  Minnesota Statutes 2000, section 290.01, 
 88.6   subdivision 6b, is amended to read: 
 88.7      Subd. 6b.  [FOREIGN OPERATING CORPORATION.] The term 
 88.8   "foreign operating corporation," when applied to a corporation, 
 88.9   means a domestic corporation with the following characteristics: 
 88.10     (1) it is part of a unitary business at least one member of 
 88.11  which is taxable in this state; 
 88.12     (2) it is not a foreign sales corporation under section 922 
 88.13  of the Internal Revenue Code, as amended through December 31, 
 88.14  1999, for the taxable year; and 
 88.15     (3) either (i) the average of the percentages of its 
 88.16  property and payrolls assigned to locations inside the United 
 88.17  States and the District of Columbia, excluding the commonwealth 
 88.18  of Puerto Rico and possessions of the United States, as 
 88.19  determined under section 290.191 or 290.20, is 20 percent or 
 88.20  less; or (ii) it has in effect a valid election under section 
 88.21  936 of the Internal Revenue Code. 
 88.22     [EFFECTIVE DATE.] This section is effective for taxable 
 88.23  years beginning after December 31, 2000. 
 88.24     Sec. 3.  Minnesota Statutes 2000, section 290.01, 
 88.25  subdivision 19, is amended to read: 
 88.26     Subd. 19.  [NET INCOME.] The term "net income" means the 
 88.27  federal taxable income, as defined in section 63 of the Internal 
 88.28  Revenue Code of 1986, as amended through the date named in this 
 88.29  subdivision, incorporating any elections made by the taxpayer in 
 88.30  accordance with the Internal Revenue Code in determining federal 
 88.31  taxable income for federal income tax purposes, and with the 
 88.32  modifications provided in subdivisions 19a to 19f. 
 88.33     In the case of a regulated investment company or a fund 
 88.34  thereof, as defined in section 851(a) or 851(g) of the Internal 
 88.35  Revenue Code, federal taxable income means investment company 
 88.36  taxable income as defined in section 852(b)(2) of the Internal 
 89.1   Revenue Code, except that:  
 89.2      (1) the exclusion of net capital gain provided in section 
 89.3   852(b)(2)(A) of the Internal Revenue Code does not apply; 
 89.4      (2) the deduction for dividends paid under section 
 89.5   852(b)(2)(D) of the Internal Revenue Code must be applied by 
 89.6   allowing a deduction for capital gain dividends and 
 89.7   exempt-interest dividends as defined in sections 852(b)(3)(C) 
 89.8   and 852(b)(5) of the Internal Revenue Code; and 
 89.9      (3) the deduction for dividends paid must also be applied 
 89.10  in the amount of any undistributed capital gains which the 
 89.11  regulated investment company elects to have treated as provided 
 89.12  in section 852(b)(3)(D) of the Internal Revenue Code.  
 89.13     The net income of a real estate investment trust as defined 
 89.14  and limited by section 856(a), (b), and (c) of the Internal 
 89.15  Revenue Code means the real estate investment trust taxable 
 89.16  income as defined in section 857(b)(2) of the Internal Revenue 
 89.17  Code.  
 89.18     The net income of a designated settlement fund as defined 
 89.19  in section 468B(d) of the Internal Revenue Code means the gross 
 89.20  income as defined in section 468B(b) of the Internal Revenue 
 89.21  Code. 
 89.22     The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 
 89.23  1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 
 89.24  1616, 1617, 1704(l), and 1704(m) of the Small Business Job 
 89.25  Protection Act, Public Law Number 104-188, the provisions of 
 89.26  Public Law Number 104-117, the provisions of sections 313(a) and 
 89.27  (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 1002, 
 89.28  1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 1087, 
 89.29  1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 1601(f)(5) 
 89.30  and (h), and 1604(d)(1) of the Taxpayer Relief Act of 1997, 
 89.31  Public Law Number 105-34, the provisions of section 6010 of the 
 89.32  Internal Revenue Service Restructuring and Reform Act of 1998, 
 89.33  Public Law Number 105-206, and the provisions of section 4003 of 
 89.34  the Omnibus Consolidated and Emergency Supplemental 
 89.35  Appropriations Act, 1999, Public Law Number 105-277, and the 
 89.36  provisions of section 318 of the Consolidated Appropriation Act 
 90.1   of 2001, Public Law Number 106-554, shall become effective at 
 90.2   the time they become effective for federal purposes. 
 90.3      The Internal Revenue Code of 1986, as amended through 
 90.4   December 31, 1996, shall be in effect for taxable years 
 90.5   beginning after December 31, 1996. 
 90.6      The provisions of sections 202(a) and (b), 221(a), 225, 
 90.7   312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 
 90.8   (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 
 90.9   1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 
 90.10  1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 
 90.11  of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 
 90.12  the provisions of sections 6004, 6005, 6012, 6013, 6015, 6016, 
 90.13  7002, and 7003 of the Internal Revenue Service Restructuring and 
 90.14  Reform Act of 1998, Public Law Number 105-206, the provisions of 
 90.15  section 3001 of the Omnibus Consolidated and Emergency 
 90.16  Supplemental Appropriations Act, 1999, Public Law Number 
 90.17  105-277, and the provisions of section 3001 of the Miscellaneous 
 90.18  Trade and Technical Corrections Act of 1999, Public Law Number 
 90.19  106-36, and the provisions of section 316 of the Consolidated 
 90.20  Appropriation Act of 2001, Public Law Number 106-554, shall 
 90.21  become effective at the time they become effective for federal 
 90.22  purposes. 
 90.23     The Internal Revenue Code of 1986, as amended through 
 90.24  December 31, 1997, shall be in effect for taxable years 
 90.25  beginning after December 31, 1997. 
 90.26     The provisions of sections 5002, 6009, 6011, and 7001 of 
 90.27  the Internal Revenue Service Restructuring and Reform Act of 
 90.28  1998, Public Law Number 105-206, the provisions of section 9010 
 90.29  of the Transportation Equity Act for the 21st Century, Public 
 90.30  Law Number 105-178, the provisions of sections 1004, 4002, and 
 90.31  5301 of the Omnibus Consolidation and Emergency Supplemental 
 90.32  Appropriations Act, 1999, Public Law Number 105-277, the 
 90.33  provision of section 303 of the Ricky Ray Hemophilia Relief Fund 
 90.34  Act of 1998, Public Law Number 105-369, and the provisions of 
 90.35  sections 532, 534, 536, 537, and 538 of the Ticket to Work and 
 90.36  Work Incentives Improvement Act of 1999, Public Law Number 
 91.1   106-170, the provisions of the Installment Tax Correction Act of 
 91.2   2000, Public Law Number 106-573, and the provisions of section 
 91.3   309 of the Consolidated Appropriation Act of 2001, Public Law 
 91.4   Number 106-554, shall become effective at the time they become 
 91.5   effective for federal purposes. 
 91.6      The Internal Revenue Code of 1986, as amended through 
 91.7   December 31, 1998, shall be in effect for taxable years 
 91.8   beginning after December 31, 1998.  
 91.9      The provisions of the FSC Repeal and Extraterritorial 
 91.10  Income Exclusion Act of 2000, Public Law Number 106-519, shall 
 91.11  become effective at the time it became effective for federal 
 91.12  purposes. 
 91.13     The Internal Revenue Code of 1986, as amended through 
 91.14  December 31, 1999, shall be in effect for taxable years 
 91.15  beginning after December 31, 1999.  The provisions of sections 
 91.16  306 and 401 of the Consolidated Appropriation Act of 2001, 
 91.17  Public Law Number 106-554, shall become effective at the same 
 91.18  time it became effective for federal purposes. 
 91.19     The Internal Revenue Code of 1986, as amended through 
 91.20  December 31, 2000, shall be in effect for taxable years 
 91.21  beginning after December 31, 2000. 
 91.22     Except as otherwise provided, references to the Internal 
 91.23  Revenue Code in subdivisions 19a to 19g mean the code in effect 
 91.24  for purposes of determining net income for the applicable year. 
 91.25     [EFFECTIVE DATE.] This section is effective the day 
 91.26  following final enactment. 
 91.27     Sec. 4.  Minnesota Statutes 2000, section 290.01, 
 91.28  subdivision 19c, is amended to read: 
 91.29     Subd. 19c.  [CORPORATIONS; ADDITIONS TO FEDERAL TAXABLE 
 91.30  INCOME.] For corporations, there shall be added to federal 
 91.31  taxable income: 
 91.32     (1) the amount of any deduction taken for federal income 
 91.33  tax purposes for income, excise, or franchise taxes based on net 
 91.34  income or related minimum taxes, including but not limited to 
 91.35  the tax imposed under section 290.0922, paid by the corporation 
 91.36  to Minnesota, another state, a political subdivision of another 
 92.1   state, the District of Columbia, or any foreign country or 
 92.2   possession of the United States; 
 92.3      (2) interest not subject to federal tax upon obligations 
 92.4   of:  the United States, its possessions, its agencies, or its 
 92.5   instrumentalities; the state of Minnesota or any other state, 
 92.6   any of its political or governmental subdivisions, any of its 
 92.7   municipalities, or any of its governmental agencies or 
 92.8   instrumentalities; the District of Columbia; or Indian tribal 
 92.9   governments; 
 92.10     (3) exempt-interest dividends received as defined in 
 92.11  section 852(b)(5) of the Internal Revenue Code; 
 92.12     (4) the amount of any net operating loss deduction taken 
 92.13  for federal income tax purposes under section 172 or 832(c)(10) 
 92.14  of the Internal Revenue Code or operations loss deduction under 
 92.15  section 810 of the Internal Revenue Code; 
 92.16     (5) the amount of any special deductions taken for federal 
 92.17  income tax purposes under sections 241 to 247 of the Internal 
 92.18  Revenue Code; 
 92.19     (6) losses from the business of mining, as defined in 
 92.20  section 290.05, subdivision 1, clause (a), that are not subject 
 92.21  to Minnesota income tax; 
 92.22     (7) the amount of any capital losses deducted for federal 
 92.23  income tax purposes under sections 1211 and 1212 of the Internal 
 92.24  Revenue Code; 
 92.25     (8) the amount of any charitable contributions deducted for 
 92.26  federal income tax purposes under section 170 of the Internal 
 92.27  Revenue Code; 
 92.28     (9) the exempt foreign trade income of a foreign sales 
 92.29  corporation under sections 921(a) and 291 of the Internal 
 92.30  Revenue Code; 
 92.31     (10) the amount of percentage depletion deducted under 
 92.32  sections 611 through 614 and 291 of the Internal Revenue Code; 
 92.33     (11) for certified pollution control facilities placed in 
 92.34  service in a taxable year beginning before December 31, 1986, 
 92.35  and for which amortization deductions were elected under section 
 92.36  169 of the Internal Revenue Code of 1954, as amended through 
 93.1   December 31, 1985, the amount of the amortization deduction 
 93.2   allowed in computing federal taxable income for those 
 93.3   facilities; 
 93.4      (12) the amount of any deemed dividend from a foreign 
 93.5   operating corporation determined pursuant to section 290.17, 
 93.6   subdivision 4, paragraph (g); 
 93.7      (13) the amount of any environmental tax paid under section 
 93.8   59(a) of the Internal Revenue Code; and 
 93.9      (14) the amount of a partner's pro rata share of net income 
 93.10  which does not flow through to the partner because the 
 93.11  partnership elected to pay the tax on the income under section 
 93.12  6242(a)(2) of the Internal Revenue Code; and 
 93.13     (15) the amount of net income excluded under section 114 of 
 93.14  the Internal Revenue Code. 
 93.15     [EFFECTIVE DATE.] This section is effective for taxable 
 93.16  years beginning after December 31, 2000. 
 93.17     Sec. 5.  Minnesota Statutes 2000, section 290.01, 
 93.18  subdivision 19d, is amended to read: 
 93.19     Subd. 19d.  [CORPORATIONS; MODIFICATIONS DECREASING FEDERAL 
 93.20  TAXABLE INCOME.] For corporations, there shall be subtracted 
 93.21  from federal taxable income after the increases provided in 
 93.22  subdivision 19c:  
 93.23     (1) the amount of foreign dividend gross-up added to gross 
 93.24  income for federal income tax purposes under section 78 of the 
 93.25  Internal Revenue Code; 
 93.26     (2) the amount of salary expense not allowed for federal 
 93.27  income tax purposes due to claiming the federal jobs credit 
 93.28  under section 51 of the Internal Revenue Code; 
 93.29     (3) any dividend (not including any distribution in 
 93.30  liquidation) paid within the taxable year by a national or state 
 93.31  bank to the United States, or to any instrumentality of the 
 93.32  United States exempt from federal income taxes, on the preferred 
 93.33  stock of the bank owned by the United States or the 
 93.34  instrumentality; 
 93.35     (4) amounts disallowed for intangible drilling costs due to 
 93.36  differences between this chapter and the Internal Revenue Code 
 94.1   in taxable years beginning before January 1, 1987, as follows: 
 94.2      (i) to the extent the disallowed costs are represented by 
 94.3   physical property, an amount equal to the allowance for 
 94.4   depreciation under Minnesota Statutes 1986, section 290.09, 
 94.5   subdivision 7, subject to the modifications contained in 
 94.6   subdivision 19e; and 
 94.7      (ii) to the extent the disallowed costs are not represented 
 94.8   by physical property, an amount equal to the allowance for cost 
 94.9   depletion under Minnesota Statutes 1986, section 290.09, 
 94.10  subdivision 8; 
 94.11     (5) the deduction for capital losses pursuant to sections 
 94.12  1211 and 1212 of the Internal Revenue Code, except that: 
 94.13     (i) for capital losses incurred in taxable years beginning 
 94.14  after December 31, 1986, capital loss carrybacks shall not be 
 94.15  allowed; 
 94.16     (ii) for capital losses incurred in taxable years beginning 
 94.17  after December 31, 1986, a capital loss carryover to each of the 
 94.18  15 taxable years succeeding the loss year shall be allowed; 
 94.19     (iii) for capital losses incurred in taxable years 
 94.20  beginning before January 1, 1987, a capital loss carryback to 
 94.21  each of the three taxable years preceding the loss year, subject 
 94.22  to the provisions of Minnesota Statutes 1986, section 290.16, 
 94.23  shall be allowed; and 
 94.24     (iv) for capital losses incurred in taxable years beginning 
 94.25  before January 1, 1987, a capital loss carryover to each of the 
 94.26  five taxable years succeeding the loss year to the extent such 
 94.27  loss was not used in a prior taxable year and subject to the 
 94.28  provisions of Minnesota Statutes 1986, section 290.16, shall be 
 94.29  allowed; 
 94.30     (6) an amount for interest and expenses relating to income 
 94.31  not taxable for federal income tax purposes, if (i) the income 
 94.32  is taxable under this chapter and (ii) the interest and expenses 
 94.33  were disallowed as deductions under the provisions of section 
 94.34  171(a)(2), 265 or 291 of the Internal Revenue Code in computing 
 94.35  federal taxable income; 
 94.36     (7) in the case of mines, oil and gas wells, other natural 
 95.1   deposits, and timber for which percentage depletion was 
 95.2   disallowed pursuant to subdivision 19c, clause (11), a 
 95.3   reasonable allowance for depletion based on actual cost.  In the 
 95.4   case of leases the deduction must be apportioned between the 
 95.5   lessor and lessee in accordance with rules prescribed by the 
 95.6   commissioner.  In the case of property held in trust, the 
 95.7   allowable deduction must be apportioned between the income 
 95.8   beneficiaries and the trustee in accordance with the pertinent 
 95.9   provisions of the trust, or if there is no provision in the 
 95.10  instrument, on the basis of the trust's income allocable to 
 95.11  each; 
 95.12     (8) for certified pollution control facilities placed in 
 95.13  service in a taxable year beginning before December 31, 1986, 
 95.14  and for which amortization deductions were elected under section 
 95.15  169 of the Internal Revenue Code of 1954, as amended through 
 95.16  December 31, 1985, an amount equal to the allowance for 
 95.17  depreciation under Minnesota Statutes 1986, section 290.09, 
 95.18  subdivision 7; 
 95.19     (9) the amount included in federal taxable income 
 95.20  attributable to the credits provided in Minnesota Statutes 1986, 
 95.21  section 273.1314, subdivision 9, or Minnesota Statutes, section 
 95.22  469.171, subdivision 6; 
 95.23     (10) amounts included in federal taxable income that are 
 95.24  due to refunds of income, excise, or franchise taxes based on 
 95.25  net income or related minimum taxes paid by the corporation to 
 95.26  Minnesota, another state, a political subdivision of another 
 95.27  state, the District of Columbia, or a foreign country or 
 95.28  possession of the United States to the extent that the taxes 
 95.29  were added to federal taxable income under section 290.01, 
 95.30  subdivision 19c, clause (1), in a prior taxable year; 
 95.31     (11) 80 percent of royalties, fees, or other like income 
 95.32  accrued or received from a foreign operating corporation or a 
 95.33  foreign corporation which is part of the same unitary business 
 95.34  as the receiving corporation; 
 95.35     (12) income or gains from the business of mining as defined 
 95.36  in section 290.05, subdivision 1, clause (a), that are not 
 96.1   subject to Minnesota franchise tax; 
 96.2      (13) the amount of handicap access expenditures in the 
 96.3   taxable year which are not allowed to be deducted or capitalized 
 96.4   under section 44(d)(7) of the Internal Revenue Code; 
 96.5      (14) the amount of qualified research expenses not allowed 
 96.6   for federal income tax purposes under section 280C(c) of the 
 96.7   Internal Revenue Code, but only to the extent that the amount 
 96.8   exceeds the amount of the credit allowed under section 290.068; 
 96.9      (15) the amount of salary expenses not allowed for federal 
 96.10  income tax purposes due to claiming the Indian employment credit 
 96.11  under section 45A(a) of the Internal Revenue Code; 
 96.12     (16) the amount of any refund of environmental taxes paid 
 96.13  under section 59A of the Internal Revenue Code; and 
 96.14     (17) for taxable years beginning before January 1, 2008, 
 96.15  the amount of the federal small ethanol producer credit allowed 
 96.16  under section 40(a)(3) of the Internal Revenue Code which is 
 96.17  included in gross income under section 87 of the Internal 
 96.18  Revenue Code; and 
 96.19     (18) for a corporation whose foreign sales corporation, as 
 96.20  defined in section 922 of the Internal Revenue Code, constituted 
 96.21  a foreign operation company during the taxable years ending 
 96.22  during calendar year 2000, an amount equal to 1.23 multiplied by 
 96.23  the amount of income excluded under section 114 of the Internal 
 96.24  Revenue Code, provided the income is not income of a foreign 
 96.25  operating company. 
 96.26     [EFFECTIVE DATE.] This section is effective for taxable 
 96.27  years beginning after December 31, 2000. 
 96.28     Sec. 6.  Minnesota Statutes 2000, section 290.01, 
 96.29  subdivision 31, is amended to read: 
 96.30     Subd. 31.  [INTERNAL REVENUE CODE.] Unless specifically 
 96.31  defined otherwise, "Internal Revenue Code" means the Internal 
 96.32  Revenue Code of 1986, as amended through December 31, 1999 2000. 
 96.33     [EFFECTIVE DATE.] This section is effective at the same 
 96.34  time and in the same manner as the federal changes made by the 
 96.35  FSC Repeal and Extraterritorial Income Exclusion Act of 2000, 
 96.36  Public Law Number 106-519, and the Consolidated Appropriation 
 97.1   Act of 2001, Public Law Number 106-554, becomes effective. 
 97.2      Sec. 7.  Minnesota Statutes 2000, section 290.191, 
 97.3   subdivision 5, is amended to read: 
 97.4      Subd. 5.  [DETERMINATION OF SALES FACTOR.] For purposes of 
 97.5   this section, the following rules apply in determining the sales 
 97.6   factor.  
 97.7      (a) The sales factor includes all sales, gross earnings, or 
 97.8   receipts received in the ordinary course of the business, except 
 97.9   that the following types of income are not included in the sales 
 97.10  factor: 
 97.11     (1) interest; 
 97.12     (2) dividends; 
 97.13     (3) sales of capital assets as defined in section 1221 of 
 97.14  the Internal Revenue Code; 
 97.15     (4) sales of property used in the trade or business, except 
 97.16  sales of leased property of a type which is regularly sold as 
 97.17  well as leased; 
 97.18     (5) sales of debt instruments as defined in section 
 97.19  1275(a)(1) of the Internal Revenue Code or sales of stock; and 
 97.20     (6) royalties, fees, or other like income of a type which 
 97.21  qualify for a subtraction from federal taxable income under 
 97.22  section 290.01, subdivision 19(d)(11) all sales, gross earnings, 
 97.23  or receipts used to generate income excluded under section 114 
 97.24  of the Internal Revenue Code. 
 97.25     (b) Sales of tangible personal property are made within 
 97.26  this state if the property is received by a purchaser at a point 
 97.27  within this state, and the taxpayer is taxable in this state, 
 97.28  regardless of the f.o.b. point, other conditions of the sale, or 
 97.29  the ultimate destination of the property. 
 97.30     (c) Tangible personal property delivered to a common or 
 97.31  contract carrier or foreign vessel for delivery to a purchaser 
 97.32  in another state or nation is a sale in that state or nation, 
 97.33  regardless of f.o.b. point or other conditions of the sale.  
 97.34     (d) Notwithstanding paragraphs (b) and (c), when 
 97.35  intoxicating liquor, wine, fermented malt beverages, cigarettes, 
 97.36  or tobacco products are sold to a purchaser who is licensed by a 
 98.1   state or political subdivision to resell this property only 
 98.2   within the state of ultimate destination, the sale is made in 
 98.3   that state.  
 98.4      (e) Sales made by or through a corporation that is 
 98.5   qualified as a domestic international sales corporation under 
 98.6   section 992 of the Internal Revenue Code are not considered to 
 98.7   have been made within this state.  
 98.8      (f) Sales, rents, royalties, and other income in connection 
 98.9   with real property is attributed to the state in which the 
 98.10  property is located.  
 98.11     (g) Receipts from the lease or rental of tangible personal 
 98.12  property, including finance leases and true leases, must be 
 98.13  attributed to this state if the property is located in this 
 98.14  state and to other states if the property is not located in this 
 98.15  state.  Receipts from the lease or rental of moving property 
 98.16  including, but not limited to, motor vehicles, rolling stock, 
 98.17  aircraft, vessels, or mobile equipment are included in the 
 98.18  numerator of the receipts factor to the extent that the property 
 98.19  is used in this state.  The extent of the use of moving property 
 98.20  is determined as follows: 
 98.21     (1) A motor vehicle is used wholly in the state in which it 
 98.22  is registered.  
 98.23     (2) The extent that rolling stock is used in this state is 
 98.24  determined by multiplying the receipts from the lease or rental 
 98.25  of the rolling stock by a fraction, the numerator of which is 
 98.26  the miles traveled within this state by the leased or rented 
 98.27  rolling stock and the denominator of which is the total miles 
 98.28  traveled by the leased or rented rolling stock. 
 98.29     (3) The extent that an aircraft is used in this state is 
 98.30  determined by multiplying the receipts from the lease or rental 
 98.31  of the aircraft by a fraction, the numerator of which is the 
 98.32  number of landings of the aircraft in this state and the 
 98.33  denominator of which is the total number of landings of the 
 98.34  aircraft. 
 98.35     (4) The extent that a vessel, mobile equipment, or other 
 98.36  mobile property is used in the state is determined by 
 99.1   multiplying the receipts from the lease or rental of the 
 99.2   property by a fraction, the numerator of which is the number of 
 99.3   days during the taxable year the property was in this state and 
 99.4   the denominator of which is the total days in the taxable year.  
 99.5      (h) Royalties and other income not described in paragraph 
 99.6   (a), clause (6), received for the use of or for the privilege of 
 99.7   using intangible property, including patents, know-how, 
 99.8   formulas, designs, processes, patterns, copyrights, trade names, 
 99.9   service names, franchises, licenses, contracts, customer lists, 
 99.10  or similar items, must be attributed to the state in which the 
 99.11  property is used by the purchaser.  If the property is used in 
 99.12  more than one state, the royalties or other income must be 
 99.13  apportioned to this state pro rata according to the portion of 
 99.14  use in this state.  If the portion of use in this state cannot 
 99.15  be determined, the royalties or other income must be excluded 
 99.16  from both the numerator and the denominator.  Intangible 
 99.17  property is used in this state if the purchaser uses the 
 99.18  intangible property or the rights therein in the regular course 
 99.19  of its business operations in this state, regardless of the 
 99.20  location of the purchaser's customers. 
 99.21     (i) Sales of intangible property are made within the state 
 99.22  in which the property is used by the purchaser.  If the property 
 99.23  is used in more than one state, the sales must be apportioned to 
 99.24  this state pro rata according to the portion of use in this 
 99.25  state.  If the portion of use in this state cannot be 
 99.26  determined, the sale must be excluded from both the numerator 
 99.27  and the denominator of the sales factor.  Intangible property is 
 99.28  used in this state if the purchaser used the intangible property 
 99.29  in the regular course of its business operations in this state. 
 99.30     (j) Receipts from the performance of services must be 
 99.31  attributed to the state where the services are received.  For 
 99.32  the purposes of this section, receipts from the performance of 
 99.33  services provided to a corporation, partnership, or trust may 
 99.34  only be attributed to a state where it has a fixed place of 
 99.35  doing business.  If the state where the services are received is 
 99.36  not readily determinable or is a state where the corporation, 
100.1   partnership, or trust receiving the service does not have a 
100.2   fixed place of doing business, the services shall be deemed to 
100.3   be received at the location of the office of the customer from 
100.4   which the services were ordered in the regular course of the 
100.5   customer's trade or business.  If the ordering office cannot be 
100.6   determined, the services shall be deemed to be received at the 
100.7   office of the customer to which the services are billed. 
100.8      [EFFECTIVE DATE.] This section is effective for 
100.9   transactions after September 30, 2000. 
100.10     Sec. 8.  Minnesota Statutes 2000, section 290A.03, 
100.11  subdivision 15, is amended to read: 
100.12     Subd. 15.  [INTERNAL REVENUE CODE.] "Internal Revenue Code" 
100.13  means the Internal Revenue Code of 1986, as amended through 
100.14  December 31, 1999 2000. 
100.15     [EFFECTIVE DATE.] This section is effective the day 
100.16  following final enactment. 
100.17     Sec. 9.  Minnesota Statutes 2000, section 291.005, 
100.18  subdivision 1, is amended to read: 
100.19     Subdivision 1.  Unless the context otherwise clearly 
100.20  requires, the following terms used in this chapter shall have 
100.21  the following meanings: 
100.22     (1) "Federal gross estate" means the gross estate of a 
100.23  decedent as valued and otherwise determined for federal estate 
100.24  tax purposes by federal taxing authorities pursuant to the 
100.25  provisions of the Internal Revenue Code. 
100.26     (2) "Minnesota gross estate" means the federal gross estate 
100.27  of a decedent after (a) excluding therefrom any property 
100.28  included therein which has its situs outside Minnesota and (b) 
100.29  including therein any property omitted from the federal gross 
100.30  estate which is includable therein, has its situs in Minnesota, 
100.31  and was not disclosed to federal taxing authorities.  
100.32     (3) "Personal representative" means the executor, 
100.33  administrator or other person appointed by the court to 
100.34  administer and dispose of the property of the decedent.  If 
100.35  there is no executor, administrator or other person appointed, 
100.36  qualified, and acting within this state, then any person in 
101.1   actual or constructive possession of any property having a situs 
101.2   in this state which is included in the federal gross estate of 
101.3   the decedent shall be deemed to be a personal representative to 
101.4   the extent of the property and the Minnesota estate tax due with 
101.5   respect to the property. 
101.6      (4) "Resident decedent" means an individual whose domicile 
101.7   at the time of death was in Minnesota. 
101.8      (5) "Nonresident decedent" means an individual whose 
101.9   domicile at the time of death was not in Minnesota. 
101.10     (6) "Situs of property" means, with respect to real 
101.11  property, the state or country in which it is located; with 
101.12  respect to tangible personal property, the state or country in 
101.13  which it was normally kept or located at the time of the 
101.14  decedent's death; and with respect to intangible personal 
101.15  property, the state or country in which the decedent was 
101.16  domiciled at death. 
101.17     (7) "Commissioner" means the commissioner of revenue or any 
101.18  person to whom the commissioner has delegated functions under 
101.19  this chapter. 
101.20     (8) "Internal Revenue Code" means the United States 
101.21  Internal Revenue Code of 1986, as amended through December 31, 
101.22  1999 2000. 
101.23     [EFFECTIVE DATE.] This section is effective the day 
101.24  following final enactment. 
101.25                             ARTICLE 6
101.26                         CORPORATE TAXATION
101.27     Section 1.  Minnesota Statutes 2000, section 290.068, is 
101.28  amended by adding a subdivision to read: 
101.29     Subd. 7.  [CREDIT REFUNDABLE.] If the amount of credit that 
101.30  a corporation is eligible to receive under this section exceeds 
101.31  the corporation's tax liability under this chapter, the 
101.32  commissioner shall refund the excess to the corporation. 
101.33     [EFFECTIVE DATE.] This section is effective for taxable 
101.34  years beginning after December 31, 2000. 
101.35     Sec. 2.  Minnesota Statutes 2000, section 290.068, is 
101.36  amended by adding a subdivision to read: 
102.1      Subd. 8.  [APPROPRIATION.] An amount sufficient to pay the 
102.2   refunds required by this section is annually appropriated to the 
102.3   commissioner of revenue from the general fund. 
102.4      [EFFECTIVE DATE.] This section is effective for taxable 
102.5   years beginning after December 31, 2000. 
102.6      Sec. 3.  Minnesota Statutes 2000, section 290.9725, is 
102.7   amended to read: 
102.8      290.9725 [S CORPORATION.] 
102.9      For purposes of this chapter, the term "S corporation" 
102.10  means any corporation having a valid election in effect for the 
102.11  taxable year under section 1362 of the Internal Revenue Code.  
102.12  An S corporation shall not be subject to the taxes imposed by 
102.13  this chapter, except: 
102.14     (1) the taxes imposed under sections 290.0922, 290.92, 
102.15  290.9727, 290.9728, and 290.9729; and 
102.16     (2) the tax under sections 290.06, subdivision 1, and 
102.17  290.0921 apply to a financial institution to which either 
102.18  section 585 or 593 of the Internal Revenue Code applies or that 
102.19  has a wholly owned subsidiary as described in section 
102.20  1361(b)(3)(B) of the Internal Revenue Code which is a financial 
102.21  institution under section 585 or 593 of the Internal Revenue 
102.22  Code.  
102.23     [EFFECTIVE DATE.] This section is effective for taxable 
102.24  years beginning after December 31, 2000. 
102.25     Sec. 4.  [REPEALER.] 
102.26     Minnesota Statutes 2000, sections 290.06, subdivision 26; 
102.27  290.0673; 290.068, subdivision 3; and 290.9726, subdivision 7, 
102.28  are repealed.  
102.29     [EFFECTIVE DATE.] This section is effective for taxable 
102.30  years beginning after December 31, 2000.  
102.31                             ARTICLE 7
102.32                        SALES AND USE TAXES
102.33     Section 1.  Minnesota Statutes 2000, section 84.922, is 
102.34  amended by adding a subdivision to read: 
102.35     Subd. 11.  [PROOF OF SALES TAX PAYMENT.] A person applying 
102.36  for initial registration in Minnesota of an all-terrain vehicle 
103.1   shall provide a purchaser's certificate showing a complete 
103.2   description of the all-terrain vehicle, the seller's name and 
103.3   address, the full purchase price of the all-terrain vehicle, and 
103.4   the trade-in allowance, if any.  The certificate also must 
103.5   include information showing either that (1) the sales and use 
103.6   tax under chapter 297A was paid, or (2) the purchase was exempt 
103.7   from tax under chapter 297A.  The certificate is not required if 
103.8   the applicant provides a receipt, invoice, or other document 
103.9   that shows the all-terrain vehicle was purchased from a retailer 
103.10  maintaining a place of business in this state as defined in 
103.11  section 297A.66, subdivision 1. 
103.12     [EFFECTIVE DATE.] This section is effective for 
103.13  registrations occurring on or after July 1, 2001. 
103.14     Sec. 2.  Minnesota Statutes 2000, section 161.20, 
103.15  subdivision 3, is amended to read: 
103.16     Subd. 3.  [TRUNK HIGHWAY FUND APPROPRIATIONS.] The 
103.17  commissioner may expend trunk highway funds only for trunk 
103.18  highway purposes.  Payment of expenses related to sales tax, 
103.19  bureau of criminal apprehension laboratory, office of tourism 
103.20  kiosks, Minnesota safety council, tort claims, driver education 
103.21  programs, emergency medical services board, and Mississippi 
103.22  River parkway commission do not further a highway purpose and do 
103.23  not aid in the construction, improvement, or maintenance of the 
103.24  highway system. 
103.25     Sec. 3.  Minnesota Statutes 2000, section 297A.25, 
103.26  subdivision 28, is amended to read: 
103.27     Subd. 28.  [WASTE PROCESSING EQUIPMENT.] The gross receipts 
103.28  from the sale of and storage, use, or consumption of equipment 
103.29  used for processing solid or hazardous waste at a resource 
103.30  recovery facility, as defined in section 115A.03, subdivision 
103.31  28, are exempt, including pollution control equipment at a 
103.32  resource recovery facility that burns refuse-derived fuel or 
103.33  mixed municipal solid waste as its primary fuel.  An electric 
103.34  generation facility that processes and utilizes waste tires as 
103.35  its primary fuel is a resource recovery facility for the 
103.36  purposes of this section.  
104.1      [EFFECTIVE DATE; INSTRUCTION TO REVISOR.] This section is 
104.2   effective for purchases and sales made after the date of final 
104.3   enactment.  In the next edition of Minnesota Statutes, the 
104.4   revisor of statutes shall codify the amendment to this section 
104.5   in section 297A.68, subdivision 24. 
104.6      Sec. 4.  Minnesota Statutes 2000, section 297A.61, 
104.7   subdivision 3, is amended to read: 
104.8      Subd. 3.  [SALE AND PURCHASE.] (a) "Sale" and "purchase" 
104.9   include, but are not limited to, each of the transactions listed 
104.10  in this subdivision. 
104.11     (b) Sale and purchase include any transfer of title or 
104.12  possession, or both, of tangible personal property, whether 
104.13  absolutely or conditionally, and the leasing of or the granting 
104.14  of a license to use or consume, for a consideration, tangible 
104.15  personal property, other than a manufactured home used for 
104.16  residential purposes for a continuous period of 30 days or more. 
104.17     (c) Sale and purchase include the production, fabrication, 
104.18  printing, or processing of tangible personal property for a 
104.19  consideration for consumers who furnish either directly or 
104.20  indirectly the materials used in the production, fabrication, 
104.21  printing, or processing. 
104.22     (d) Sale and purchase include the furnishing, preparing, or 
104.23  serving for a consideration of food or drinks.  Notwithstanding 
104.24  section 297A.67, subdivision 2, taxable food or drinks include, 
104.25  but are not limited to, the following: 
104.26     (1) food or drinks sold by the retailer for immediate 
104.27  consumption on the retailer's premises.  Food and drinks sold 
104.28  within a building or grounds that require an admission charge 
104.29  for entrance are presumed to be sold for consumption on the 
104.30  premises; 
104.31     (2) food or drinks prepared by the retailer for immediate 
104.32  consumption either on or off the retailer's premises.  For 
104.33  purposes of this subdivision, "food or drinks prepared for 
104.34  immediate consumption" means any food product upon which an act 
104.35  of preparation including, but not limited to, cooking, mixing, 
104.36  sandwich making, blending, heating, or pouring has been 
105.1   performed by the retailer so the food product may be immediately 
105.2   consumed by the purchaser; 
105.3      (3) ice cream, ice milk, frozen yogurt products, or frozen 
105.4   novelties sold in single or individual servings including, but 
105.5   not limited to, cones, sundaes, and snow cones; 
105.6      (4) soft drinks and other beverages, including all 
105.7   carbonated and noncarbonated beverages or drinks sold in liquid 
105.8   form, but not including beverages or drinks which contain milk 
105.9   or milk products, beverages or drinks containing 15 or more 
105.10  percent fruit juice, and noncarbonated and noneffervescent 
105.11  bottled water sold in individual containers of one-half gallon 
105.12  or more in size; 
105.13     (5) gum, candy, and candy products; 
105.14     (6) ice; 
105.15     (7) all food sold from vending machines; 
105.16     (8) all food for immediate consumption sold from concession 
105.17  stands and vehicles; 
105.18     (9) party trays; 
105.19     (10) all meals and single servings of packaged snack food 
105.20  sold in restaurants and bars; and 
105.21     (11) bakery products that are: 
105.22     (i) prepared by the retailer for consumption on the 
105.23  retailer's premises; 
105.24     (ii) sold at a place that charges admission; 
105.25     (iii) sold from vending machines; or 
105.26     (iv) sold in single or individual servings from concession 
105.27  stands, vehicles, bars, and restaurants.  
105.28     For purposes of this paragraph, "single or individual 
105.29  servings" does not include products when sold in bulk containers 
105.30  or bulk packaging.  
105.31     For purposes of this paragraph, "premises" means the total 
105.32  space and facilities, including buildings, grounds, and parking 
105.33  lots that are made available or that are available for use by 
105.34  the retailer or customer for the purpose of sale or consumption 
105.35  of prepared food and drinks.  The premises of a caterer is the 
105.36  place where the catered food or drinks are served. 
106.1      (e) A sale and a purchase includes the furnishing for a 
106.2   consideration of electricity, gas, water, or steam for use or 
106.3   consumption within this state or local exchange telephone 
106.4   service, intrastate toll service, and interstate toll service, 
106.5   if that service originates from and is charged to a telephone 
106.6   located in this state.  Telephone service includes (1) paging 
106.7   services, and (2) private communication service, as defined in 
106.8   United States Code, title 26, section 4252(d), except for 
106.9   private communication service purchased by an agent acting on 
106.10  behalf of the state lottery.  Telephone service does not include 
106.11  services purchased with a prepaid telephone calling card.  The 
106.12  furnishing for a consideration of access to telephone services 
106.13  by a hotel to its guests is a sale.  The furnishing for a 
106.14  consideration of items listed in this paragraph by a municipal 
106.15  corporation is a sale. 
106.16     (f) A sale and a purchase includes the transfer for a 
106.17  consideration of computer software.  
106.18     (g) A sale and a purchase includes the furnishing for a 
106.19  consideration of taxable services as defined in subdivision 16. 
106.20     (h) A sale and a purchase includes the furnishing for a 
106.21  consideration of tangible personal property or taxable services 
106.22  by the United States or any of its agencies or 
106.23  instrumentalities, or the state of Minnesota, its agencies, 
106.24  instrumentalities, or political subdivisions. 
106.25     (i) A sale and a purchase includes the furnishing for a 
106.26  consideration of telecommunications services, including cable 
106.27  television services and direct satellite services.  
106.28  Telecommunications services are taxed to the extent allowed 
106.29  under federal law if those services: 
106.30     (1) either (i) originate and terminate in this state; or 
106.31  (ii) originate in this state and terminate outside the state and 
106.32  the service is charged to a telephone number customer located in 
106.33  this state or to the account of any transmission instrument in 
106.34  this state; or (iii) originate outside this state and terminate 
106.35  in this state and the service is charged to a telephone number 
106.36  customer located in this state or to the account of any 
107.1   transmission instrument in this state; or 
107.2      (2) are rendered by providing a private communications 
107.3   service for which the customer has one or more locations within 
107.4   Minnesota connected to the service and the service is charged to 
107.5   a telephone number customer located in this state or to the 
107.6   account of any transmission instrument in this state. 
107.7      All charges for mobile telecommunications services, as 
107.8   defined in United States Code, title 4, section 124, are deemed 
107.9   to be provided by the customer's home service provider and 
107.10  sourced to the customer's place of primary use and are subject 
107.11  to tax based upon the customer's place of primary use in 
107.12  accordance with the Mobile Telecommunications Sourcing Act, 
107.13  United States Code, title 4, sections 116 to 126. 
107.14     [EFFECTIVE DATE.] This section is effective for sales and 
107.15  purchases made after June 30, 2001. 
107.16     Sec. 5.  Minnesota Statutes 2000, section 297A.61, 
107.17  subdivision 12, is amended to read: 
107.18     Subd. 12.  [FARM MACHINERY.] (a) "Farm machinery" means new 
107.19  or used machinery, equipment, implements, accessories, and 
107.20  contrivances used directly and principally in the production for 
107.21  sale, but not including the processing, of livestock, dairy 
107.22  animals, dairy products, poultry and poultry products, fruits, 
107.23  vegetables, trees and shrubs, plants, forage, grains, and bees 
107.24  and apiary products.  
107.25     (b) Farm machinery includes: 
107.26     (1) machinery for the preparation, seeding, or cultivation 
107.27  of soil for growing agricultural crops and sod, for the 
107.28  harvesting and threshing of agricultural products, or for the 
107.29  harvesting or mowing of sod; 
107.30     (2) barn cleaners, milking systems, grain dryers, automatic 
107.31  feeding systems including stationary feed bunks, and similar 
107.32  installations, whether or not the equipment is installed by the 
107.33  seller and becomes part of the real property; 
107.34     (3) irrigation equipment sold for exclusively agricultural 
107.35  use, including pumps, pipe fittings, valves, sprinklers, and 
107.36  other equipment necessary to the operation of an irrigation 
108.1   system when sold as part of an irrigation system, whether or not 
108.2   the equipment is installed by the seller and becomes part of the 
108.3   real property; 
108.4      (4) logging equipment, including chain saws used for 
108.5   commercial logging; 
108.6      (5) fencing used for the containment of farmed cervidae, as 
108.7   defined in section 17.451, subdivision 2; 
108.8      (6) primary and backup generator units used to generate 
108.9   electricity for the purpose of operating farm machinery, as 
108.10  defined in this subdivision, or providing light or space heating 
108.11  necessary for the production of livestock, dairy animals, dairy 
108.12  products, or poultry and poultry products; 
108.13     (7) aquaculture production equipment as defined in 
108.14  subdivision 13; and 
108.15     (8) equipment used for maple syrup harvesting.  
108.16     (c) Farm machinery does not include: 
108.17     (1) repair or replacement parts; 
108.18     (2) tools, shop equipment, grain bins, feed bunks, fencing 
108.19  material except fencing material covered by paragraph (b), 
108.20  clause (5), communication equipment, and other farm supplies; 
108.21     (3) motor vehicles taxed under chapter 297B; 
108.22     (4) snowmobiles or snow blowers; or 
108.23     (5) lawn mowers except those used in the production of sod 
108.24  for sale, or garden-type tractors or garden tillers. 
108.25     [EFFECTIVE DATE.] This section is effective for sales and 
108.26  purchases made after June 30, 2001. 
108.27     Sec. 6.  Minnesota Statutes 2000, section 297A.61, 
108.28  subdivision 16, is amended to read: 
108.29     Subd. 16.  [TAXABLE SERVICES.] (a) "Taxable services" means 
108.30  the services listed in this subdivision and other services 
108.31  listed in subdivision 3. 
108.32     (b) Taxable services includes the granting of the privilege 
108.33  of admission to places of amusement, recreational areas, or 
108.34  athletic events, and the making available of amusement devices, 
108.35  tanning facilities, reducing salons, steam baths, turkish baths, 
108.36  health clubs, and spas or athletic facilities. 
109.1      (c) Taxable services includes the furnishing of lodging and 
109.2   related services by a hotel, rooming house, resort, campground, 
109.3   motel, or trailer camp and the granting of any similar license 
109.4   to use real property other than the renting or leasing thereof 
109.5   for a continuous period of 30 days or more. 
109.6      (d) Taxable services includes the furnishing of cable 
109.7   television services or similar television services, including, 
109.8   but not limited to, charges for basic, premium, pay-per-view, 
109.9   and any other similar service. 
109.10     (e) Taxable services includes the furnishing of parking 
109.11  services, whether on a contractual, hourly, or other periodic 
109.12  basis, except for parking at a meter. 
109.13     (f) (e) Taxable services includes the granting of 
109.14  membership in a club, association, or other organization if: 
109.15     (1) the club, association, or other organization makes 
109.16  available for the use of its members sports and athletic 
109.17  facilities, without regard to whether a separate charge is 
109.18  assessed for use of the facilities; and 
109.19     (2) use of the sports and athletic facility is not made 
109.20  available to the general public on the same basis as it is made 
109.21  available to members.  
109.22  Granting of membership means both one-time initiation fees and 
109.23  periodic membership dues.  Sports and athletic facilities 
109.24  include golf courses; tennis, racquetball, handball, and squash 
109.25  courts; basketball and volleyball facilities; running tracks; 
109.26  exercise equipment; swimming pools; and other similar athletic 
109.27  or sports facilities. 
109.28     (g) (f) Taxable services includes the furnishing of the 
109.29  following services as provided in this paragraph: 
109.30     (1) laundry and dry cleaning services including cleaning, 
109.31  pressing, repairing, altering, and storing clothes, linen 
109.32  services and supply, cleaning and blocking hats, and carpet, 
109.33  drapery, upholstery, and industrial cleaning.  Laundry and dry 
109.34  cleaning services do not include services provided by coin 
109.35  operated facilities operated by the customer; 
109.36     (2) motor vehicle washing, waxing, and cleaning services, 
110.1   including services provided by coin operated facilities operated 
110.2   by the customer, and rustproofing, undercoating, and towing of 
110.3   motor vehicles; 
110.4      (3) building and residential cleaning, maintenance, and 
110.5   disinfecting and exterminating services; 
110.6      (4) detective, security, burglar, fire alarm, and armored 
110.7   car services; but not including services performed within the 
110.8   jurisdiction they serve by off-duty licensed peace officers as 
110.9   defined in section 626.84, subdivision 1, or services provided 
110.10  by a nonprofit organization for monitoring and electronic 
110.11  surveillance of persons placed on in-home detention pursuant to 
110.12  court order or under the direction of the Minnesota department 
110.13  of corrections; 
110.14     (5) pet grooming services; 
110.15     (6) lawn care, fertilizing, mowing, spraying and sprigging 
110.16  services; garden planting and maintenance; tree, bush, and shrub 
110.17  pruning, bracing, spraying, and surgery; indoor plant care; 
110.18  tree, bush, shrub, and stump removal; and tree trimming for 
110.19  public utility lines.  Services performed under a construction 
110.20  contract for the installation of shrubbery, plants, sod, trees, 
110.21  bushes, and similar items are not taxable; 
110.22     (7) massages, except when provided by a licensed health 
110.23  care facility or professional or upon written referral from a 
110.24  licensed health care facility or professional for treatment of 
110.25  illness, injury, or disease; and 
110.26     (8) the furnishing of lodging, board, and care services for 
110.27  animals in kennels and other similar arrangements, but excluding 
110.28  veterinary and horse boarding services. 
110.29     The services listed in this paragraph are taxable under 
110.30  section 297A.62 if the service is performed wholly within 
110.31  Minnesota or if the service is performed partly within and 
110.32  partly outside Minnesota and the greater proportion of the 
110.33  service is performed in Minnesota, based on the cost of 
110.34  performance.  In applying the provisions of this chapter, the 
110.35  terms "tangible personal property" and "sales at retail" include 
110.36  taxable services and the provision of taxable services, unless 
111.1   specifically provided otherwise.  Services performed by an 
111.2   employee for an employer are not taxable.  Services performed by 
111.3   a partnership or association for another partnership or 
111.4   association are not taxable if one of the entities owns or 
111.5   controls more than 80 percent of the voting power of the equity 
111.6   interest in the other entity.  Services performed between 
111.7   members of an affiliated group of corporations are not taxable.  
111.8   For purposes of this section, "affiliated group of corporations" 
111.9   includes those entities that would be classified as members of 
111.10  an affiliated group under United States Code, title 26, section 
111.11  1504, and that are eligible to file a consolidated tax return 
111.12  for federal income tax purposes. 
111.13     [EFFECTIVE DATE.] This section is effective for sales and 
111.14  purchases made after June 30, 2001. 
111.15     Sec. 7.  Minnesota Statutes 2000, section 297A.61, is 
111.16  amended by adding a subdivision to read: 
111.17     Subd. 24.  [TELECOMMUNICATIONS SERVICES.] (a) 
111.18  "Telecommunications services" means the transmission, 
111.19  conveyance, or routing of voice, data, audio, video, or any 
111.20  other information or signals to a point, or between or among 
111.21  points, by or through any electronic, satellite, optical, 
111.22  microwave, or other medium or method now in existence or 
111.23  hereafter devised, regardless of the protocol used for such 
111.24  transmission, conveyance, or routing.  
111.25     (b) Telecommunications services include the furnishing for 
111.26  consideration of access to telephone services by a hotel to its 
111.27  guests.  
111.28     (c) Telecommunications services do not include: 
111.29     (1) services purchased with a prepaid telephone calling 
111.30  card; 
111.31     (2) private communication service purchased by an agent 
111.32  acting on behalf of the state lottery; 
111.33     (3) information services; and 
111.34     (4) purchases of telecommunications when the purchaser uses 
111.35  the purchased services as a component part of or integrates such 
111.36  service into another telecommunications service that is sold by 
112.1   the purchaser in the normal course of business.  
112.2      (d) For purposes of this subdivision, "information 
112.3   services" means the offering of the capability for generating, 
112.4   acquiring, storing, transforming, processing, retrieving, 
112.5   utilizing, or making available information. 
112.6      [EFFECTIVE DATE.] This section is effective for sales and 
112.7   purchases occurring after June 30, 2001. 
112.8      Sec. 8.  Minnesota Statutes 2000, section 297A.61, is 
112.9   amended by adding a subdivision to read: 
112.10     Subd. 25.  [CABLE TELEVISION SERVICE.] "Cable television 
112.11  service" means the transmission of video, audio, or other 
112.12  programming service to purchasers, and the subscriber 
112.13  interaction, if any, required for the selection or use of the 
112.14  programming service, regardless of whether the programming is 
112.15  transmitted over facilities owned or operated by the cable 
112.16  service provider or over facilities owned or operated by one or 
112.17  more dealers of communications services.  The term includes 
112.18  point-to-multipoint distribution services by which programming 
112.19  is transmitted or broadcast by microwave or other equipment 
112.20  directly to the subscriber's premises.  The term includes basic, 
112.21  extended, premium, pay-per-view, digital, and music services. 
112.22     [EFFECTIVE DATE.] This section is effective for sales and 
112.23  purchases occurring after June 30, 2001. 
112.24     Sec. 9.  Minnesota Statutes 2000, section 297A.61, is 
112.25  amended by adding a subdivision to read: 
112.26     Subd. 26.  [PRIVATE COMMUNICATION SERVICE.] "Private 
112.27  communication service" means a communication service furnished 
112.28  to a subscriber which entitles the subscriber to:  
112.29     (1) exclusive or priority use of any communication channel 
112.30  or group of channels; 
112.31     (2) the use of an intercommunication system for the 
112.32  subscriber's stations, or regardless of whether the channel, 
112.33  group of channels, or intercommunication system may be connected 
112.34  through switching; 
112.35     (3) the switching capacity, extension lines and stations, 
112.36  or other associated services that are provided in connection 
113.1   with, and are necessary or unique to the use of, channels or 
113.2   systems described in clause (1); or 
113.3      (4) any combination of tunneling, encryption, 
113.4   authentication, and access control technologies and services 
113.5   used to carry traffic over the Internet, a managed Internet 
113.6   provider network or provider's backbone. 
113.7      [EFFECTIVE DATE.] This section is effective for sales and 
113.8   purchases occurring after June 30, 2001. 
113.9      Sec. 10.  Minnesota Statutes 2000, section 297A.61, is 
113.10  amended by adding a subdivision to read: 
113.11     Subd. 27.  [DIRECT SATELLITE SERVICE.] "Direct satellite 
113.12  service" means programming transmitted or broadcast by satellite 
113.13  directly to the subscriber's premises without the use of ground 
113.14  receiving or distribution equipment, except at the subscriber's 
113.15  premises or in the uplink process to the satellite. 
113.16     [EFFECTIVE DATE.] This section is effective for sales and 
113.17  purchases occurring after June 30, 2001. 
113.18     Sec. 11.  Minnesota Statutes 2000, section 297A.67, is 
113.19  amended by adding a subdivision to read: 
113.20     Subd. 13a.  [INSTRUCTIONAL MATERIALS.] Instructional 
113.21  materials, other than textbooks, that are prescribed for use in 
113.22  conjunction with a course of study in a post-secondary school, 
113.23  college, university, or private career school to students who 
113.24  are regularly enrolled at such institutions are exempt.  For 
113.25  purposes of this subdivision, "instructional materials" means 
113.26  materials required to be used directly in the completion of the 
113.27  course of study, including, but not limited to, interactive CDs, 
113.28  tapes, and computer software. 
113.29     Instructional materials do not include general reference 
113.30  works or other items incidental to the instructional process 
113.31  such as pens, pencils, paper, folders, or computers.  For 
113.32  purposes of this subdivision, "school" and "private career 
113.33  school" have the meanings given in subdivision 13. 
113.34     [EFFECTIVE DATE.] This section is effective for sales after 
113.35  June 30, 2001. 
113.36     Sec. 12.  Minnesota Statutes 2000, section 297A.67, is 
114.1   amended by adding a subdivision to read: 
114.2      Subd. 26.  [ENERGY EFFICIENT PRODUCTS.] (a) The following 
114.3   products are exempt if they have an energy star label: 
114.4      (1) any door or window that qualifies for the energy star 
114.5   label for the northern climate; 
114.6      (2) a residential lighting fixture or a compact fluorescent 
114.7   bulb; 
114.8      (3) insulation; and 
114.9      (4) a ground source closed loop or air source heat pump.  
114.10     (b) The following products are exempt if they have an 
114.11  energyguide label that indicates that the product meets or 
114.12  exceeds the standards listed below: 
114.13     (1) an electric heat pump hot water heater with an energy 
114.14  factor of at least 1.9; 
114.15     (2) a natural gas water heater with an energy factor of at 
114.16  least 0.62; 
114.17     (3) a natural gas heat pump that has a coefficient of 
114.18  performance of at least 1.25 for heating and at least 0.70 for 
114.19  cooling; 
114.20     (4) a refrigerator with a capacity of at least ten cubic 
114.21  feet that uses less than 500 kilowatt-hours per year; 
114.22     (5) a window air conditioner with an energy efficiency 
114.23  rating greater than 11.0; 
114.24     (6) a dishwasher that uses less than 425 kilowatt-hours per 
114.25  year; 
114.26     (7) a clothes washer that uses less than 250 kilowatt-hours 
114.27  per year or any horizontal axis washer; 
114.28     (8) a central air conditioner with a seasonal energy 
114.29  efficiency rating greater than 14.0; 
114.30     (9) a furnace with an annual fuel efficiency rating greater 
114.31  than 93 percent; and 
114.32     (10) a boiler with an annual fuel efficiency rating greater 
114.33  than 88 percent.  
114.34     (c) For purposes of this subdivision, "energy star label" 
114.35  means the label granted to certain products that meet United 
114.36  States Environmental Protection Agency and United States 
115.1   Department of Energy criteria for energy efficiency.  For 
115.2   purposes of this subdivision, "energyguide label" means the 
115.3   label that the United State Federal Trade Commissioner requires 
115.4   manufacturers to apply to certain appliances under United States 
115.5   Code, title 16, part 305. 
115.6      [EFFECTIVE DATE.] This section is effective for sales and 
115.7   purchases made after June 30, 2001, and before January 1, 2007. 
115.8      Sec. 13.  Minnesota Statutes 2000, section 297A.67, is 
115.9   amended by adding a subdivision to read: 
115.10     Subd. 27.  [PHOTOVOLTAIC EQUIPMENT.] A photovoltaic device 
115.11  is exempt.  For purposes of this section, "photovoltaic device" 
115.12  means a solid-state electrical device, such as a solar module, 
115.13  that converts light directly into direct current electricity of 
115.14  voltage-current characteristics that are a function of the 
115.15  characteristics of the light source and the materials in and 
115.16  design of the device.  A "solar module" is a photovoltaic device 
115.17  that produces a specified power output under defined test 
115.18  conditions, usually composed of groups of solar cells connected 
115.19  in series, in parallel, or in series-parallel combinations. 
115.20     [EFFECTIVE DATE.] This section is effective for sales and 
115.21  purchases made after June 30, 2001, and before January 1, 2007.  
115.22     Sec. 14.  Minnesota Statutes 2000, section 297A.68, 
115.23  subdivision 3, is amended to read: 
115.24     Subd. 3.  [MATERIALS USED IN PROVIDING CERTAIN TAXABLE 
115.25  SERVICES.] (a) Materials stored, used, or consumed in providing 
115.26  a taxable service listed in section 297A.61, subdivision 16, 
115.27  paragraph (g) (f), intended to be sold ultimately at retail are 
115.28  exempt. 
115.29     (b) This exemption includes, but is not limited to: 
115.30     (1) chemicals, lubricants, packaging materials, seeds, 
115.31  trees, fertilizers, and herbicides, if these items are used or 
115.32  consumed in providing the taxable service; 
115.33     (2) chemicals used to treat waste generated as a result of 
115.34  providing the taxable service; 
115.35     (3) accessory tools, equipment, and other items that are 
115.36  separate detachable units used in providing the service and that 
116.1   have an ordinary useful life of less than 12 months; and 
116.2      (4) fuel, electricity, gas, and steam used or consumed in 
116.3   the production process, except that electricity, gas, or steam 
116.4   used for space heating or lighting is exempt only if it is 
116.5   necessary to produce that particular taxable service. 
116.6      (c) This exemption does not include machinery, equipment, 
116.7   implements, tools, accessories, appliances, contrivances, 
116.8   furniture, and fixtures used in providing the taxable service. 
116.9      [EFFECTIVE DATE.] This section is effective for sales and 
116.10  purchases made after June 30, 2001. 
116.11     Sec. 15.  Minnesota Statutes 2000, section 297A.68, 
116.12  subdivision 19, is amended to read: 
116.13     Subd. 19.  [PETROLEUM PRODUCTS.] The following petroleum 
116.14  products are exempt: 
116.15     (1) products upon which a tax has been imposed and paid 
116.16  under chapter 296A, and for which no refund has been or will be 
116.17  allowed because the buyer used the fuel for nonhighway use; 
116.18     (2) products that are used in the improvement of 
116.19  agricultural land by constructing, maintaining, and repairing 
116.20  drainage ditches, tile drainage systems, grass waterways, water 
116.21  impoundment, and other erosion control structures; 
116.22     (3) products purchased by a transit system receiving 
116.23  financial assistance under section 174.24, 256B.0625, 
116.24  subdivision 17, or 473.384; 
116.25     (4) products purchased by an ambulance service licensed 
116.26  under chapter 144E; 
116.27     (5) products used in a passenger snowmobile, as defined in 
116.28  section 296A.01, subdivision 39, for off-highway business use as 
116.29  part of the operations of a resort as provided under section 
116.30  296A.16, subdivision 2, clause (2); or 
116.31     (5) (6) products purchased by a state or a political 
116.32  subdivision of a state for use in motor vehicles exempt from 
116.33  registration under section 168.012, subdivision 1, paragraph (b).
116.34     Sec. 16.  Minnesota Statutes 2000, section 297A.68, is 
116.35  amended by adding a subdivision to read: 
116.36     Subd. 35.  [GEOTHERMAL EQUIPMENT.] Equipment used in a 
117.1   geothermal heating and cooling system, and materials used for 
117.2   installation of the system, are exempt. 
117.3      [EFFECTIVE DATE.] This section is effective for sales after 
117.4   June 30, 2001. 
117.5      Sec. 17.  Minnesota Statutes 2000, section 297A.68, is 
117.6   amended by adding a subdivision to read: 
117.7      Subd. 36.  [TELECOMMUNICATIONS EQUIPMENT.] (a) 
117.8   Telecommunications machinery and equipment purchased or leased 
117.9   for use directly by a telecommunications service provider 
117.10  primarily in the provision of telecommunications services that 
117.11  are ultimately to be sold at retail are exempt, regardless of 
117.12  whether purchased by the owner, a contractor, or a subcontractor.
117.13     (b) For purposes of this subdivision, "telecommunications 
117.14  machinery and equipment" includes, but is not limited to: 
117.15     (1) machinery, equipment, and fixtures utilized in 
117.16  receiving, initiating, amplifying, processing, transmitting, 
117.17  retransmitting, recording, switching, or monitoring 
117.18  telecommunications services, such as computers, transformers, 
117.19  amplifiers, routers, bridges, repeaters, multiplexers, and other 
117.20  items performing comparable functions; 
117.21     (2) machinery, equipment, and fixtures used in the 
117.22  transportation of telecommunications services, radio 
117.23  transmitters and receivers, satellite equipment, microwave 
117.24  equipment, and other transporting media, but not wire, cable, 
117.25  fiber, poles, or conduit; 
117.26     (3) ancillary machinery, equipment, and fixtures that 
117.27  regulate, control, protect, or enable the machinery in clauses 
117.28  (1) and (2) to accomplish its intended function, such as 
117.29  auxiliary power supply, test equipment, towers, heating, 
117.30  ventilating and air conditioning equipment necessary to the 
117.31  operation of the telecommunications equipment; and software 
117.32  necessary to the operation of the telecommunications equipment; 
117.33  and 
117.34     (4) repair and replacement parts, including accessories, 
117.35  whether purchased as spare parts, repair parts, or as upgrades 
117.36  or modifications to qualified machinery or equipment. 
118.1      (c) For purposes of this subdivision, "telecommunications 
118.2   services" means telecommunications services as defined in 
118.3   section 297A.61, subdivision 24, paragraph (a), only. 
118.4      [EFFECTIVE DATE.] This section is effective for purchases 
118.5   and lease payments, including payments made on existing leases, 
118.6   made after June 30, 2001. 
118.7      Sec. 18.  Minnesota Statutes 2000, section 297A.70, 
118.8   subdivision 2, is amended to read: 
118.9      Subd. 2.  [SALES TO GOVERNMENT.] (a) All sales, except 
118.10  those listed in paragraph (b), to the following governments and 
118.11  political subdivisions, or to the listed agencies or 
118.12  instrumentalities of governments and political subdivisions, are 
118.13  exempt: 
118.14     (1) the United States and its agencies and 
118.15  instrumentalities; 
118.16     (2) school districts, the University of Minnesota, state 
118.17  universities, community colleges, technical colleges, state 
118.18  academies, the Perpich Minnesota center for arts education, and 
118.19  an instrumentality of a political subdivision that is accredited 
118.20  as an optional/special function school by the North Central 
118.21  Association of Colleges and Schools; 
118.22     (3) hospitals and nursing homes owned and operated by 
118.23  political subdivisions of the state; 
118.24     (4) the state department of transportation; 
118.25     (5) the metropolitan council, for its purchases of 
118.26  materials, supplies, and equipment used or consumed for 
118.27  operations under section 473.384; 
118.28     (6) other states or political subdivisions of other states, 
118.29  if the sale would be exempt from taxation if it occurred in that 
118.30  state; and 
118.31     (5) (7) sales to public libraries, public library systems, 
118.32  multicounty, multitype library systems as defined in section 
118.33  134.001, county law libraries under chapter 134A, state agency 
118.34  libraries, the state library under section 480.09, and the 
118.35  legislative reference library.  
118.36     (b) This exemption does not apply to the sales of the 
119.1   following products and services: 
119.2      (1) building, construction, or reconstruction materials 
119.3   purchased by a contractor or a subcontractor as a part of a 
119.4   lump-sum contract or similar type of contract with a guaranteed 
119.5   maximum price covering both labor and materials for use in the 
119.6   construction, alteration, or repair of a building or facility; 
119.7      (2) construction materials purchased by tax exempt entities 
119.8   or their contractors to be used in constructing buildings or 
119.9   facilities which will not be used principally by the tax exempt 
119.10  entities; 
119.11     (3) the leasing of a motor vehicle as defined in section 
119.12  297B.01, subdivision 5, except for leases entered into by the 
119.13  United States or its agencies or instrumentalities; or 
119.14     (4) meals and lodging as defined under section 297A.61, 
119.15  subdivisions 3, paragraph (d), and 16, paragraph (c), except for 
119.16  meals and lodging purchased directly by the United States or its 
119.17  agencies or instrumentalities. 
119.18     (c) As used in this subdivision, "school districts" means 
119.19  public school entities and districts of every kind and nature 
119.20  organized under the laws of the state of Minnesota, and any 
119.21  instrumentality of a school district, as defined in section 
119.22  471.59. 
119.23     Sec. 19.  Minnesota Statutes 2000, section 297A.70, 
119.24  subdivision 4, is amended to read: 
119.25     Subd. 4.  [SALES TO NONPROFIT GROUPS.] (a) All sales, 
119.26  except those listed in paragraph (b), to the following 
119.27  "nonprofit organizations" are exempt: 
119.28     (1) an entity organized and operated exclusively for 
119.29  charitable, religious, or educational purposes if the item 
119.30  purchased is used in the performance of charitable, religious, 
119.31  or educational functions; 
119.32     (2) any senior citizen group or association of groups that: 
119.33     (i) in general limits membership to persons who are either 
119.34  age 55 or older, or physically disabled; and 
119.35     (ii) is organized and operated exclusively for pleasure, 
119.36  recreation, and other nonprofit purposes, no part of the net 
120.1   earnings of which inures to the benefit of any private 
120.2   shareholders; and 
120.3      (3) an entity organized and operated exclusively to 
120.4   maintain a cemetery owned by a religious organization. 
120.5      (b) This exemption does not apply to the following sales: 
120.6      (1) building, construction, or reconstruction materials 
120.7   purchased by a contractor or a subcontractor as a part of a 
120.8   lump-sum contract or similar type of contract with a guaranteed 
120.9   maximum price covering both labor and materials for use in the 
120.10  construction, alteration, or repair of a building or facility; 
120.11     (2) construction materials purchased by tax-exempt entities 
120.12  or their contractors to be used in constructing buildings or 
120.13  facilities that will not be used principally by the tax-exempt 
120.14  entities; and 
120.15     (3) meals and lodging as defined under section 297A.61, 
120.16  subdivisions 3, paragraph (d), and 16, paragraph (c); and 
120.17     (4) leasing of a motor vehicle as defined in section 
120.18  297B.01, subdivision 5, except as provided in paragraph (c). 
120.19     (c) This exemption applies to the leasing of a motor 
120.20  vehicle as defined in section 297B.01, subdivision 5, only if 
120.21  the vehicle is: 
120.22     (1) a truck, as defined in section 168.011, a bus, as 
120.23  defined in section 168.011, or a passenger automobile, as 
120.24  defined in section 168.011, if the automobile is designed and 
120.25  used for carrying more than nine persons including the driver; 
120.26  and 
120.27     (2) intended to be used primarily to transport tangible 
120.28  personal property or individuals, other than employees, to whom 
120.29  the organization provides service in performing its charitable, 
120.30  religious, or educational purpose. 
120.31     (d) A limited liability company also qualifies for 
120.32  exemption under this subdivision if (1) it consists of a sole 
120.33  member that would qualify for the exemption, and (2) the items 
120.34  purchased qualify for the exemption. 
120.35     Sec. 20.  Minnesota Statutes 2000, section 297A.70, 
120.36  subdivision 7, is amended to read: 
121.1      Subd. 7.  [HOSPITALS AND OUTPATIENT SURGICAL CENTERS.] (a) 
121.2   Sales, except for those listed in paragraph (c), to a hospital 
121.3   are exempt, if the items purchased are used in providing 
121.4   hospital services.  For purposes of this subdivision, "hospital" 
121.5   means a hospital organized and operated for charitable purposes 
121.6   within the meaning of section 501(c)(3) of the Internal Revenue 
121.7   Code, and licensed under chapter 144 or by any other 
121.8   jurisdiction, and "hospital services" are services authorized or 
121.9   required to be performed by a "hospital" under chapter 144. 
121.10     (b) Sales, except for those listed in paragraph (c), to an 
121.11  outpatient surgical center are exempt, if the items purchased 
121.12  are used in providing outpatient surgical services.  For 
121.13  purposes of this subdivision, "outpatient surgical center" means 
121.14  an outpatient surgical center organized and operated for 
121.15  charitable purposes within the meaning of section 501(c)(3) of 
121.16  the Internal Revenue Code, and licensed under chapter 144 or by 
121.17  any other jurisdiction.  For the purposes of this subdivision, 
121.18  "outpatient surgical services" means:  (1) services authorized 
121.19  or required to be performed by an outpatient surgical center 
121.20  under chapter 144 or under the applicable licensure law of any 
121.21  other jurisdiction; and (2) urgent care.  For purposes of this 
121.22  subdivision, "urgent care" means health services furnished to a 
121.23  person whose medical condition is sufficiently acute to require 
121.24  treatment unavailable through, or inappropriate to be provided 
121.25  by, a clinic or physician's office, but not so acute as to 
121.26  require treatment in a hospital emergency room.  
121.27     (c) This exemption does not apply to the following products 
121.28  and services: 
121.29     (1) purchases made by a clinic, physician's office, or any 
121.30  other medical facility not operating as a hospital or outpatient 
121.31  surgical center, even though the clinic, office, or facility may 
121.32  be owned and operated by a hospital or outpatient surgical 
121.33  center; 
121.34     (2) sales under section 297A.61, subdivisions 3, paragraph 
121.35  (d), and 16, paragraph (c); 
121.36     (3) building and construction materials used in 
122.1   constructing buildings or facilities that will not be used 
122.2   principally by the hospital or outpatient surgical center; 
122.3      (4) building, construction, or reconstruction materials 
122.4   purchased by a contractor or a subcontractor as a part of a 
122.5   lump-sum contract or similar type of contract with a guaranteed 
122.6   maximum price covering both labor and materials for use in the 
122.7   construction, alteration, or repair of a hospital or outpatient 
122.8   surgical center; or 
122.9      (5) the leasing of a motor vehicle as defined in section 
122.10  297B.01, subdivision 5. 
122.11     (d) A limited liability company also qualifies for 
122.12  exemption under this subdivision if (1) it consists of a sole 
122.13  member that would qualify for the exemption, and (2) the items 
122.14  purchased qualify for the exemption. 
122.15     Sec. 21.  Minnesota Statutes 2000, section 297A.70, 
122.16  subdivision 10, is amended to read: 
122.17     Subd. 10.  [NONPROFIT TICKETS OR ADMISSIONS.] (a) Tickets 
122.18  or admissions to the premises of or events sponsored by an 
122.19  organization that provides an opportunity for citizens of the 
122.20  state to participate in the creation, performance, or 
122.21  appreciation of the arts are exempt if the organization is 
122.22  either (1) a tax-exempt organization within the meaning of 
122.23  Minnesota Statutes 1980, section 290.05, subdivision 1, clause 
122.24  (i), or (2) a municipal board that promotes cultural and arts 
122.25  activities.  The exemption provided with respect to a municipal 
122.26  board applies only to tickets and admissions to events sponsored 
122.27  by the board.  For purposes of this exemption, an event is 
122.28  sponsored by an organization if (i) the organization actively 
122.29  participates in planning and conducting the event, (ii) the 
122.30  organization assumes the risk of any financial losses as a 
122.31  result of the event, and (iii) the entire net proceeds from the 
122.32  event go to the organization. 
122.33     (b) Tickets or admissions to the premises of the Minnesota 
122.34  zoological garden are exempt, provided that the exemption under 
122.35  this paragraph does not apply to tickets or admissions to 
122.36  performances or events held on the premises unless the 
123.1   performance or event is sponsored and conducted exclusively by 
123.2   the Minnesota zoological board or employees of the Minnesota 
123.3   zoological garden. 
123.4      [EFFECTIVE DATE.] This section, paragraph (a), is effective 
123.5   for sales and purchases occurring after December 31, 2001.  This 
123.6   section, paragraph (b), is effective for sales after June 30, 
123.7   2001.  
123.8      Sec. 22.  Minnesota Statutes 2000, section 297A.70, 
123.9   subdivision 13, is amended to read: 
123.10     Subd. 13.  [FUNDRAISING SALES BY OR FOR NONPROFIT GROUPS.] 
123.11  (a) The following sales by the specified organizations for 
123.12  fundraising purposes are exempt, subject to the limitations 
123.13  listed in paragraph (b): 
123.14     (1) all sales made by an organization that exists solely 
123.15  for the purpose of providing educational or social activities 
123.16  for young people primarily age 18 and under; 
123.17     (2) all sales made by an organization that is a senior 
123.18  citizen group or association of groups if (i) in general it 
123.19  limits membership to persons age 55 or older; (ii) it is 
123.20  organized and operated exclusively for pleasure, recreation, and 
123.21  other nonprofit purposes; and (iii) no part of its net earnings 
123.22  inures to the benefit of any private shareholders; 
123.23     (3) the sale or use of tickets or admissions to a golf 
123.24  tournament held in Minnesota if the beneficiary of the 
123.25  tournament's net proceeds qualifies as a tax-exempt organization 
123.26  under section 501(c)(3) of the Internal Revenue Code; and 
123.27     (4) sales of gum, candy, and candy products sold for 
123.28  fundraising purposes by a nonprofit organization that provides 
123.29  educational and social activities primarily for young people 18 
123.30  years of age and under. 
123.31     (b) The exemptions listed in paragraph (a) are limited in 
123.32  the following manner: 
123.33     (1) the exemption under paragraph (a), clauses (1) and (2), 
123.34  applies only if the gross annual receipts of the organization 
123.35  from fundraising do not exceed $10,000; and 
123.36     (2) the exemption under paragraph (a), clause (1), does not 
124.1   apply if the sales are derived from admission charges or from 
124.2   activities for which the money must be deposited with the school 
124.3   district treasurer under section 123B.49, subdivision 2, or be 
124.4   recorded in the same manner as other revenues or expenditures of 
124.5   the school district under section 123B.49, subdivision 4. 
124.6      (c) Sales of tangible personal property are exempt if the 
124.7   entire proceeds, less the necessary expenses for obtaining the 
124.8   property, will be contributed to a registered combined 
124.9   charitable organization described in section 309.501, to be used 
124.10  exclusively for charitable, religious, or educational purposes, 
124.11  and the registered combined charitable organization has given 
124.12  its written permission for the sale.  Sales that occur over a 
124.13  period of more than 24 days per year are not exempt under this 
124.14  paragraph. 
124.15     (d) For purposes of this subdivision, a club, association, 
124.16  or other organization of elementary or secondary school students 
124.17  organized for the purpose of carrying on sports, educational, or 
124.18  other extracurricular activities is a separate organization from 
124.19  the school district or school for purposes of applying the 
124.20  $10,000 limit. 
124.21     [EFFECTIVE DATE.] This section is effective for sales and 
124.22  purchases made after June 30, 2001. 
124.23     Sec. 23.  Minnesota Statutes 2000, section 297A.71, 
124.24  subdivision 6, is amended to read: 
124.25     Subd. 6.  [BUSINESS INCUBATOR AND INDUSTRIAL PARK.] 
124.26  Building materials and supplies for construction of a facility 
124.27  that includes a business incubator and industrial park are 
124.28  exempt if the facility: 
124.29     (1) is owned and operated by a nonprofit charitable 
124.30  organization that qualifies for tax exemption under section 
124.31  501(c)(3) of the Internal Revenue Code; 
124.32     (2) is used for the development of nonretail businesses, 
124.33  offering access to equipment, space, services, and advice to the 
124.34  tenant businesses, for the purpose of encouraging economic 
124.35  development and job creation in the area served by the 
124.36  organization, and emphasizes development of businesses that 
125.1   manufacture products from materials found in the waste stream, 
125.2   or manufacture alternative energy and conservation systems, or 
125.3   make use of emerging environmental technologies; 
125.4      (3) includes in its structure systems of material and 
125.5   energy exchanges that use waste products from one industrial 
125.6   process as sources of energy and material for other processes; 
125.7   and 
125.8      (4) makes use of solar and wind energy technology and 
125.9   incorporates salvaged materials in its construction. 
125.10     A limited liability company also qualifies for exemption 
125.11  under this subdivision if (i) it consists of a sole member that 
125.12  would qualify for the exemption, and (ii) the items purchased 
125.13  qualify for the exemption. 
125.14     Sec. 24.  Minnesota Statutes 2000, section 297A.71, is 
125.15  amended by adding a subdivision to read: 
125.16     Subd. 23.  [CONSTRUCTION MATERIALS AND EQUIPMENT; WASTE 
125.17  TIRES COGENERATION ELECTRIC GENERATING FACILITY.] Materials and 
125.18  supplies used or consumed in, and equipment incorporated into, 
125.19  the construction, improvement, or expansion of a facility using 
125.20  waste tires to generate electricity are exempt if: 
125.21     (1) the facility utilizes waste tires as a primary fuel in 
125.22  generating electricity; 
125.23     (2) the facility is a cogeneration facility; 
125.24     (3) the installed capacity of the facility is one to 25 
125.25  megawatts; and 
125.26     (4) construction of the facility meets the requirements of 
125.27  section 177.43. 
125.28     [EFFECTIVE DATE.] This section is effective for purchases 
125.29  and sales made after the date of final enactment. 
125.30     Sec. 25.  Minnesota Statutes 2000, section 297A.71, is 
125.31  amended by adding a subdivision to read: 
125.32     Subd. 24.  [POULTRY LITTER AND OTHER BIOMASS GENERATION 
125.33  FACILITY CONSTRUCTION MATERIALS AND EQUIPMENT.] Materials and 
125.34  supplies used or consumed in, and equipment incorporated into, 
125.35  the construction, improvement, or expansion of a facility using 
125.36  biomass to generate electricity are exempt if: 
126.1      (1) the facility is designed to utilize poultry litter 
126.2   biomass or other biomass as established in section 216B.2424, as 
126.3   a primary fuel source; 
126.4      (2) the facility generates power that will be sold under a 
126.5   contract approved by the public utilities commission in 
126.6   accordance with the biomass mandate imposed under section 
126.7   216B.2424; and 
126.8      (3) construction of the facility meets the requirements of 
126.9   section 177.43. 
126.10     [EFFECTIVE DATE.] This section is effective for purchases 
126.11  and sales after June 30, 2001, and before January 1, 2003. 
126.12     Sec. 26.  Minnesota Statutes 2000, section 297A.71, is 
126.13  amended by adding a subdivision to read: 
126.14     Subd. 25.  [CONSTRUCTION MATERIALS FOR QUALIFIED LOW-INCOME 
126.15  HOUSING PROJECTS.] (a) Purchases of materials and supplies used 
126.16  or consumed in and equipment incorporated into the construction, 
126.17  improvement, or expansion of qualified low-income housing 
126.18  projects are exempt from the tax imposed under this chapter if 
126.19  the owner of the qualified low-income housing project is: 
126.20     (1) the public housing agency or housing and redevelopment 
126.21  authority of a political subdivision; 
126.22     (2) an entity exercising the powers of a housing and 
126.23  redevelopment authority within a political subdivision; or 
126.24     (3) a limited partnership in which the sole general partner 
126.25  is an authority under clause (1) or an entity under clause (2). 
126.26     This exemption applies regardless of whether the purchases 
126.27  are made by the owner of the facility or a contractor.  
126.28     (b) For purposes of this exemption, "qualified low-income 
126.29  housing project" means: 
126.30     (1) a housing or mixed use project in which at least 20 
126.31  percent of the residential units are qualifying low-income 
126.32  rental housing units as defined in section 273.126; 
126.33     (2) a federally assisted low-income housing project 
126.34  financed by a mortgage insured or held by the United States 
126.35  Department of Housing and Urban Development under United States 
126.36  Code, title 12, section 1701s, 1715l(d)(3), 1715l(d)(4), or 
127.1   1715z-1; United States Code, title 42, section 1437f; the Native 
127.2   American Housing Assistance and Self-Determination Act, United 
127.3   States Code, title 25, section 4101 et seq.; or any similar 
127.4   successor federal low-income housing program; 
127.5      (3) a qualified low-income housing project as defined in 
127.6   United States Code, title 26, section 42(g), meeting all of the 
127.7   requirements for a low-income housing credit under section 42 of 
127.8   the Internal Revenue Code regardless of whether the project 
127.9   actually applies for or receives a low-income housing credit; or 
127.10     (4) a project that will be operated in compliance with 
127.11  Internal Revenue Service revenue procedure 96-32. 
127.12     [EFFECTIVE DATE.] This section is effective for sales and 
127.13  purchases occurring after June 30, 2001. 
127.14     Sec. 27.  Minnesota Statutes 2000, section 297A.71, is 
127.15  amended by adding a subdivision to read: 
127.16     Subd. 26.  [CONSTRUCTION MATERIALS AND EQUIPMENT; 
127.17  AGRICULTURAL PROCESSING MATERIALS.] Materials and supplies used 
127.18  or consumed in, and machinery and equipment incorporated into 
127.19  the construction, improvement, or expansion of a soybean oilseed 
127.20  processing facility are exempt if: 
127.21     (1) the facility is owned and operated by a cooperative 
127.22  organized under chapter 308A; and 
127.23     (2) the facility is located in a county that has a 
127.24  population of less than 21,000 according to the most recent 
127.25  decennial census. 
127.26     Sec. 28.  Minnesota Statutes 2000, section 297A.80, is 
127.27  amended to read: 
127.28     297A.80 [TAXES IN OTHER STATES; OFFSET AGAINST USE TAX.] 
127.29     If an article of tangible personal property or an item 
127.30  listed in section 297A.63 has already been taxed by another 
127.31  state and any subdivision thereof for its sale, storage, use, or 
127.32  other consumption in an amount less than the tax imposed by this 
127.33  chapter, then as to the person who paid the tax in the other 
127.34  state or any subdivision thereof, section 297A.63 applies only 
127.35  at a rate measured by the difference between the rate imposed 
127.36  under section 297A.62 and the rate by which the previous tax was 
128.1   computed.  If the tax imposed in the other state or any 
128.2   subdivision thereof is equal to or greater than the tax imposed 
128.3   in this state, then no tax is due from that person under section 
128.4   297A.63.  The credit shall be applied first against the amount 
128.5   of any use tax due the state, and any unused portion of the 
128.6   credit shall then be applied against any use tax due a 
128.7   subdivision. 
128.8      [EFFECTIVE DATE.] This section is effective for sales and 
128.9   purchases occurring after December 31, 2001. 
128.10     Sec. 29.  Minnesota Statutes 2000, section 297A.82, 
128.11  subdivision 1, is amended to read: 
128.12     Subdivision 1.  [REQUIREMENTS FOR REGISTRATION.] An 
128.13  aircraft must not be registered or licensed in this state unless 
128.14  the applicant presents proof that the sales or use tax imposed 
128.15  by this chapter has been paid or that the transaction is exempt 
128.16  from the sales and use tax.  The exemption for an occasional 
128.17  sale under section 297A.67, subdivision 23, or 297A.68, 
128.18  subdivision 25, does not apply to the sale or purchase of an 
128.19  aircraft. 
128.20     [EFFECTIVE DATE.] This section is effective for sales and 
128.21  purchases occurring after December 31, 2001. 
128.22     Sec. 30.  Minnesota Statutes 2000, section 609.75, 
128.23  subdivision 1, is amended to read: 
128.24     Subdivision 1.  [LOTTERY.] (a) A lottery is a plan which 
128.25  provides for the distribution of money, property or other reward 
128.26  or benefit to persons selected by chance from among participants 
128.27  some or all of whom have given a consideration for the chance of 
128.28  being selected.  A participant's payment for use of a 900 
128.29  telephone number or another means of communication that results 
128.30  in payment to the sponsor of the plan constitutes consideration 
128.31  under this paragraph. 
128.32     (b) An in-package chance promotion is not a lottery if all 
128.33  of the following are met:  
128.34     (1) participation is available, free and without purchase 
128.35  of the package, from the retailer or by mail or toll-free 
128.36  telephone request to the sponsor for entry or for a game piece; 
129.1      (2) the label of the promotional package and any related 
129.2   advertising clearly states any method of participation and the 
129.3   scheduled termination date of the promotion; 
129.4      (3) the sponsor on request provides a retailer with a 
129.5   supply of entry forms or game pieces adequate to permit free 
129.6   participation in the promotion by the retailer's customers; 
129.7      (4) the sponsor does not misrepresent a participant's 
129.8   chances of winning any prize; 
129.9      (5) the sponsor randomly distributes all game pieces and 
129.10  maintains records of random distribution for at least one year 
129.11  after the termination date of the promotion; 
129.12     (6) all prizes are randomly awarded if game pieces are not 
129.13  used in the promotion; and 
129.14     (7) the sponsor provides on request of a state agency a 
129.15  record of the names and addresses of all winners of prizes 
129.16  valued at $100 or more, if the request is made within one year 
129.17  after the termination date of the promotion.  
129.18     (c) Except as provided by section 349.40, acts in this 
129.19  state in furtherance of a lottery conducted outside of this 
129.20  state are included notwithstanding its validity where conducted. 
129.21     (d) The distribution of property, or other reward or 
129.22  benefit by an employer to persons selected by chance from among 
129.23  participants who have made a contribution through a payroll or 
129.24  pension deduction campaign to a registered combined charitable 
129.25  organization, within the meaning of section 309.501, as a 
129.26  precondition to the chance of being selected, is not a lottery 
129.27  if: 
129.28     (1) all of the persons eligible to be selected are employed 
129.29  by or retirees of the employer; and 
129.30     (2) the cost of the property or other reward or benefit 
129.31  distributed and all costs associated with the distribution are 
129.32  borne by the employer; and 
129.33     (3) the total amount actually expended by the employer to 
129.34  obtain the property or other rewards or benefits distributed by 
129.35  the employer during the calendar year does not exceed $500. 
129.36     Sec. 31.  Laws 1986, chapter 396, section 5, is amended to 
130.1   read: 
130.2      Sec. 5.  [LIQUOR, LODGING, AND RESTAURANT TAXES.] 
130.3      The city may, by resolution, levy in addition to taxes 
130.4   authorized by other law: 
130.5      (1) a sales tax of not more than three percent on the gross 
130.6   receipts on retail on-sales of intoxicating liquor and fermented 
130.7   malt beverages described in section 473.592 occurring in the 
130.8   downtown taxing area, provided that this tax may not be imposed 
130.9   if sales of intoxicating liquor and fermented malt beverages are 
130.10  exempt from taxation under chapter 297A; 
130.11     (2) a sales tax of not more than three percent on the gross 
130.12  receipts from the furnishing for consideration of lodging 
130.13  described in section 473.592 by a hotel or motel which has more 
130.14  than 50 rooms available for lodging; the tax imposed under this 
130.15  clause shall be at a rate that, when added to the sum of the 
130.16  rate of the sales tax imposed under Minnesota Statutes, chapter 
130.17  297A, the rate of the sales tax imposed under section 4, and the 
130.18  rate of any other taxes on lodging in the city of Minneapolis, 
130.19  equals 12 13 percent; and 
130.20     (3) a sales tax of not more than three percent on the gross 
130.21  receipts on all sales of food primarily for consumption on or 
130.22  off the premises by restaurants and places of refreshment as 
130.23  defined by resolution of the city that occur within the downtown 
130.24  taxing area. 
130.25  These taxes shall be applied solely to pay costs of collection 
130.26  and to pay or secure the payment of any principal of, premium 
130.27  and interest on any bonds or any costs referred to in section 4, 
130.28  subdivision 3.  The commissioner of revenue may enter into 
130.29  appropriate agreements with the city to provide for the 
130.30  collection of these taxes by the state on behalf of the city.  
130.31  The commissioner may charge the city a reasonable fee for its 
130.32  collection from the proceeds of any taxes.  These taxes shall be 
130.33  subject to the same interest penalties and enforcement 
130.34  provisions as the taxes imposed under section 473.592. 
130.35     Sec. 32.  Laws 1996, chapter 471, article 2, section 29, is 
130.36  amended to read: 
131.1      Sec. 29.  [CITY OF HERMANTOWN; SALES AND USE TAX.] 
131.2      Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] (a) 
131.3   Notwithstanding Minnesota Statutes, section 477A.016, or any 
131.4   other contrary provision of law, ordinance, or city charter, the 
131.5   city of Hermantown may, by ordinance, impose an additional sales 
131.6   and use tax of up to one percent on sales transactions, storage, 
131.7   and use taxable pursuant to Minnesota Statutes, chapter 297A, 
131.8   that occur within the city. 
131.9      (b) The proceeds of the first one-half of one percent of 
131.10  tax imposed under this section must be used to meet the costs of 
131.11  by the city for the following projects: 
131.12     (1) extending a sewer interceptor line; 
131.13     (2) construction of a booster pump station, reservoirs, and 
131.14  related improvements to the water system; and 
131.15     (3) construction of a police and fire station. 
131.16     (c) Revenues received from the remaining one-half of one 
131.17  percent of the tax authorized under this section must be used by 
131.18  the city to pay all or part of the capital and administrative 
131.19  costs of developing, acquiring, constructing, and initially 
131.20  furnishing and equipping for the following projects: 
131.21     (1) construction of a community education and recreation 
131.22  center that includes a senior citizens center, fitness center, 
131.23  swimming pool, community meeting and education room, community 
131.24  technology library, and indoor track; 
131.25     (2) renovation or construction of an addition to the 
131.26  school's existing ice facility; 
131.27     (3) construction of a new city hall; 
131.28     (4) construction of a new public works garage; 
131.29     (5) construction of frontage roads and other traffic 
131.30  control measures along Highway 53 within the city of Hermantown; 
131.31  and 
131.32     (6) construction of bleachers, and outdoor soccer, 
131.33  football, and track facilities at the school. 
131.34     (d) Authorized expenses include, but are not limited to, 
131.35  acquiring property, paying construction, administrative, and 
131.36  operating expenses related to the development of the projects 
132.1   listed in paragraph (c), paying debt service on bonds or other 
132.2   obligations, including lease obligations, issued to finance 
132.3   construction, expansion, or improvement of the projects listed 
132.4   in paragraph (c), and other compatible uses, including but not 
132.5   limited to, parking, lighting, and landscaping. 
132.6      Subd. 2.  [REFERENDUM.] (a) If the Hermantown city council 
132.7   proposes to impose the sales tax authorized by this section, it 
132.8   shall conduct a referendum on the issue. 
132.9      (b) If the Hermantown city council initially imposes the 
132.10  tax at a rate less than one percent and proposes increasing it 
132.11  at a later date up to the authorized rate in subdivision 1, it 
132.12  shall conduct a referendum on the increase. 
132.13     (c) The question of imposing or increasing the tax must be 
132.14  submitted to the voters at a special or general election.  The 
132.15  tax may not be imposed unless a majority of votes cast on the 
132.16  question of imposing the tax are in the affirmative.  The 
132.17  commissioner of revenue shall prepare a suggested form of 
132.18  question to be presented at the election.  This subdivision 
132.19  applies notwithstanding any city charter provision to the 
132.20  contrary. 
132.21     Subd. 3.  [ENFORCEMENT; COLLECTION; AND ADMINISTRATION OF 
132.22  TAXES.] A sales tax imposed under this section must be reported 
132.23  and paid to the commissioner of revenue with the state sales 
132.24  taxes, and be subject to the same penalties, interest, and 
132.25  enforcement provisions.  The proceeds of the tax, less refunds 
132.26  and a proportionate share of the cost of collection, shall be 
132.27  remitted at least quarterly to the city.  The commissioner shall 
132.28  deduct from the proceeds remitted an amount that equals the 
132.29  indirect statewide cost as well as the direct and indirect 
132.30  department costs necessary to administer, audit, and collect the 
132.31  tax.  The amount deducted shall be deposited in the state 
132.32  general fund. 
132.33     Subd. 3a.  [BONDING AUTHORITY.] (a) The city may issue 
132.34  general obligation bonds under Minnesota Statutes, chapter 475, 
132.35  to finance the costs in subdivision 1, paragraph (c).  The total 
132.36  amount of bonds issued for the projects under subdivision 1, 
133.1   paragraph (c), may not exceed $12,900,000 in the aggregate.  An 
133.2   election to approve the bonds is not required. 
133.3      (b) The bonds are not included in computing any debt 
133.4   limitation applicable to the city and the levy of taxes under 
133.5   Minnesota Statutes, section 475.61, to pay principal of and 
133.6   interest on the bonds is not subject to any levy limitation. 
133.7      (c) The taxes authorized under this section may be pledged 
133.8   to and used for the payment of the bonds and any bonds issued to 
133.9   refund them. 
133.10     Subd. 4.  [TERMINATION.] The portion of the tax authorized 
133.11  under this section to finance the improvements described in 
133.12  subdivision 1, paragraph (b), terminates at the later of (1) ten 
133.13  years after the date of initial imposition of the tax, or (2) on 
133.14  the first day of the second month next succeeding a 
133.15  determination by the city council that sufficient funds have 
133.16  been received from that portion of the tax dedicated to finance 
133.17  the those improvements described in subdivision 1, clauses (1) 
133.18  to (3), and to prepay or retire at maturity the principal, 
133.19  interest, and premium due on any bonds issued for the 
133.20  improvements.  The portion of the tax authorized under this 
133.21  section to finance the improvements described in subdivision 1, 
133.22  paragraph (c), terminates when the revenues raised are 
133.23  sufficient to finance those improvements, up to an amount equal 
133.24  to $12,900,000 plus any interest, premium, and other costs 
133.25  associated with the bonds issued under subdivision 3a.  The city 
133.26  council may terminate this portion of the tax earlier.  Any 
133.27  funds remaining after completion of the improvements and 
133.28  retirement or redemption of the bonds may be placed in the 
133.29  general fund of the city. 
133.30     Subd. 5.  [LOCAL APPROVAL; EFFECTIVE DATE.] This section is 
133.31  effective the day after final enactment, upon compliance with 
133.32  Minnesota Statutes, section 645.021, subdivision 3, by the city 
133.33  of Hermantown. 
133.34     [EFFECTIVE DATE.] This section is effective the day after 
133.35  final enactment, upon compliance with Minnesota Statutes, 
133.36  section 645.021, subdivision 3, by the city of Hermantown. 
134.1      Sec. 33.  Laws 1999, chapter 243, article 4, section 19, is 
134.2   amended to read: 
134.3      Sec. 19.  [EFFECTIVE DATES.] 
134.4      Sections 1, 2, 5, 7, 9, and 11 are effective for sales and 
134.5   purchases made after June 30, 1999.  
134.6      Section 3 is effective for amended returns and refund 
134.7   claims filed on or after July 1, 1999. 
134.8      Section 4 is effective the day following final enactment 
134.9   and applies retroactively to all open tax years and to 
134.10  assessments and appeals under Minnesota Statutes, sections 
134.11  289A.38 and 289A.65, for which the time limits have not expired 
134.12  on the date of final enactment of this act.  The provisions of 
134.13  Minnesota Statutes, section 289A.50, apply to refunds claimed 
134.14  under section 4.  Refunds claimed under section 4 must be filed 
134.15  by the later of December 31, 1999, or the time limit under 
134.16  Minnesota Statutes, section 289A.40, subdivision 1. 
134.17     Section 6 is effective retroactively for sales and 
134.18  purchases made after June 30, 1998. 
134.19     Section 8 is effective for purchases and sales made after 
134.20  the date of final enactment.  
134.21     Section 10 is effective for purchases made after the date 
134.22  of final enactment and before July 1, 2001 2003. 
134.23     Section 12 is effective the day after final enactment.  
134.24  Section 12, paragraphs (a) to (c), apply to all local sales 
134.25  taxes enacted after July 1, 1999.  Section 12, paragraph (d), 
134.26  applies to all local sales taxes in effect at the time of, or 
134.27  imposed after the day of, the enactment of this section. 
134.28     Section 13 is effective the day following final enactment. 
134.29     [EFFECTIVE DATE.] This section is effective the day after 
134.30  final enactment. 
134.31     Sec. 34.  Laws 2000, chapter 490, article 2, section 1, is 
134.32  amended to read: 
134.33     Section 1.  [PROHIBITION AGAINST APPROPRIATIONS FROM TRUNK 
134.34  HIGHWAY FUND.] 
134.35     To ensure compliance with the Minnesota Constitution, 
134.36  article XIV, sections 2, 5, and 6, the commissioner of finance, 
135.1   agency directors, and legislative commission personnel may not 
135.2   include in the biennial budget for fiscal years 2002 and 2003, 
135.3   or in any budget thereafter, expenditures from the trunk highway 
135.4   fund for a nonhighway purpose as jointly determined by the 
135.5   commissioner of finance and the attorney general.  For purposes 
135.6   of this section, an expenditure for a nonhighway purpose is any 
135.7   expenditure not for construction, improvement, or maintenance of 
135.8   highways, but does not include expenditures for payment of taxes 
135.9   imposed under Minnesota Statutes, chapter 297A.  At the time of 
135.10  submission of the biennial budget proposal to the legislature, 
135.11  the commissioner of finance and the attorney general shall 
135.12  report to the senate and house of representatives transportation 
135.13  committees concerning any expenditure that is proposed to be 
135.14  appropriated from the trunk highway fund, if that expenditure is 
135.15  similar to those reduced or eliminated in sections 5 to 20.  The 
135.16  report must explain the highway purpose of the proposed 
135.17  expenditure.  
135.18     Sec. 35.  Laws 2000, chapter 490, article 8, section 17, 
135.19  the effective date, is amended to read: 
135.20     EFFECTIVE DATE: This section is effective for sales and 
135.21  purchases made after January 1, 2000, and before December 
135.22  31, 2000 2001. 
135.23     [EFFECTIVE DATE.] This section is effective the day 
135.24  following final enactment and applies retroactively to sales and 
135.25  purchases made on or after December 31, 2000. 
135.26     Sec. 36.  [CITY OF BEAVER BAY; TAXES AUTHORIZED.] 
135.27     Subdivision 1.  [SALES AND USE TAXES.] Notwithstanding 
135.28  Minnesota Statutes, section 477A.016, or any other provision of 
135.29  law or ordinance, if approved by the voters of the city at the 
135.30  next general election held after the date of final enactment of 
135.31  this act, the city of Beaver Bay may impose by ordinance a sales 
135.32  and use tax at a rate of up to one percent for the purposes 
135.33  specified in subdivision 2.  Minnesota Statutes, section 
135.34  297A.99, governs the imposition, administration, collection, and 
135.35  enforcement of the tax authorized under this subdivision. 
135.36     Subd. 2.  [USE OF REVENUES.] The revenues received from 
136.1   taxes authorized by subdivision 1 must be used to pay the bonded 
136.2   indebtedness on the city community building and to provide 
136.3   funding for recreational facilities, the upgrading of the water 
136.4   and sewer system, a fire hall and equipment, and improvement of 
136.5   streets. 
136.6      Subd. 3.  [TERMINATION OF TAXES.] The authority granted 
136.7   under subdivision 1 to the city of Beaver Bay to impose sales 
136.8   and use taxes expires when the city council determines that 
136.9   sufficient funds have been received to pay the costs of the 
136.10  projects described in subdivision 2. 
136.11     [EFFECTIVE DATE.] This section is effective the day after 
136.12  approval by the governing body of the city of Beaver Bay and 
136.13  compliance with Minnesota Statutes, section 645.021, subdivision 
136.14  3. 
136.15     Sec. 37.  [CITY OF CLOQUET; TAXES AUTHORIZED.] 
136.16     Subdivision 1.  [SALES AND USE TAX.] Notwithstanding 
136.17  Minnesota Statutes, section 477A.016, or any other provision of 
136.18  law, ordinance, or city charter, the city of Cloquet may impose 
136.19  by ordinance a sales and use tax of up to one-half of one 
136.20  percent for the purpose specified in subdivision 3.  Except as 
136.21  otherwise specifically provided in this section, Minnesota 
136.22  Statutes, section 297A.99, governs the imposition, 
136.23  administration, collection, and enforcement of the tax 
136.24  authorized under this subdivision. 
136.25     Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
136.26  Minnesota Statutes, section 477A.016, or any other provision of 
136.27  law, ordinance, or city charter, the city of Cloquet may impose 
136.28  by ordinance, for the purposes specified in subdivision 3, an 
136.29  excise tax of up to $20 per motor vehicle, as defined by 
136.30  ordinance, purchased or acquired from any person engaged within 
136.31  the city in the business of selling motor vehicles at retail. 
136.32     Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
136.33  authorized by subdivisions 1 and 2 must be used by the city to 
136.34  pay the cost of collecting the taxes and to pay for the 
136.35  following projects: 
136.36     (1) construction and equipment of a senior and community 
137.1   center; 
137.2      (2) construction and improvements to park land along the St.
137.3   Louis river; and 
137.4      (3) extension of water and sewer lines and other 
137.5   improvements to city infrastructure for expansion of a city 
137.6   industrial park. 
137.7      Authorized expenses include, but are not limited to, 
137.8   acquiring property, paying construction, and operating expenses 
137.9   related to the development of the facility, and paying debt 
137.10  service on bonds or other obligations, including lease 
137.11  obligations, issued to finance the construction, expansion, or 
137.12  improvement of the facility. 
137.13     Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
137.14  under Minnesota Statutes, chapter 475, to finance the capital 
137.15  expenditure and improvement projects described in subdivision 3. 
137.16  An election to approve the bonds under Minnesota Statutes, 
137.17  section 475.58, is not required. 
137.18     (b) The issuance of bonds under this subdivision is not 
137.19  subject to Minnesota Statutes, sections 275.60 and 275.61. 
137.20     (c) The bonds are not included in computing any debt 
137.21  limitation applicable to the city, and the levy of taxes under 
137.22  Minnesota Statutes, section 475.61, to pay principal of and 
137.23  interest on the bonds is not subject to any levy limitation.  
137.24     (d) The sales and use and excise taxes authorized in this 
137.25  section may be pledged to and used for the payment of the bonds 
137.26  and any bonds issued to refund them only if the bonds and any 
137.27  refunding bonds are general obligations of the city. 
137.28     Subd. 5.  [TERMINATION OF TAXES.] The taxes imposed under 
137.29  subdivisions 1 and 2 expire at the earlier of (1) 20 years, or 
137.30  (2) when the city council determines that sufficient funds have 
137.31  been received from the taxes to finance the capital and 
137.32  administrative costs for the acquisition, construction, 
137.33  expansion, and improvement of the facility described in 
137.34  subdivision 3, plus the additional amount needed to pay the 
137.35  costs related to issuance of bonds under subdivision 4, 
137.36  including interest on the bonds.  Any funds remaining after 
138.1   completion of the project and retirement or redemption of the 
138.2   bonds may be placed in the general fund of the city.  The taxes 
138.3   imposed under subdivisions 1 and 2 may expire at an earlier time 
138.4   if the city so determines by ordinance. 
138.5      [EFFECTIVE DATE.] This section is effective the day after 
138.6   compliance by the governing body of the city of Cloquet with 
138.7   Minnesota Statutes, section 645.021, subdivision 3. 
138.8      Sec. 38.  [CITY OF FAIRMONT; TAXES AUTHORIZED.] 
138.9      Subdivision 1.  [SALES AND USE TAX.] Notwithstanding 
138.10  Minnesota Statutes, sections 297A.99, subdivision 3, 477A.016, 
138.11  or any other provision of law, ordinance, or city charter, if 
138.12  approved by the city voters at the next municipal general 
138.13  election held after the date of final enactment of this act, the 
138.14  city of Fairmont may impose by ordinance a sales and use tax of 
138.15  up to one-half of one percent for the purposes specified in 
138.16  subdivision 3.  Minnesota Statutes, section 297A.99, governs the 
138.17  imposition, administration, collection, and enforcement of the 
138.18  tax authorized under this subdivision. 
138.19     Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
138.20  Minnesota Statutes, section 477A.016, or any other provision of 
138.21  law, ordinance, or city charter, the city of Fairmont may impose 
138.22  by ordinance, for the purposes specified in subdivision 3, an 
138.23  excise tax of up to $20 per motor vehicle, as defined by 
138.24  ordinance, purchased or acquired from any person engaged within 
138.25  the city in the business of selling motor vehicles at retail. 
138.26     Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
138.27  authorized by subdivisions 1 and 2 must be used by the city to 
138.28  pay the cost of collecting the taxes and to pay for construction 
138.29  and improvement of streets, sewers, and water mains. 
138.30     Subd. 4.  [TERMINATION OF TAXES.] The authority to impose 
138.31  the taxes under this section expires at the earlier of (1) ten 
138.32  years after initial imposition of the taxes or (2) when the city 
138.33  council determines that sufficient funds have been received from 
138.34  the taxes to finance the cost of the projects described in 
138.35  subdivision 3. 
138.36     [EFFECTIVE DATE.] This section is effective the day after 
139.1   compliance by the governing body of the city of Fairmont with 
139.2   Minnesota Statutes, section 645.021, subdivision 3. 
139.3      Sec. 39.  [ST. CLOUD AREA CITIES; TAXES AUTHORIZED.] 
139.4      Subdivision 1.  [SALES AND USE TAX.] Notwithstanding 
139.5   Minnesota Statutes, section 477A.016, or any other provision of 
139.6   law, ordinance, or city charter, the following cities may, by 
139.7   ordinance, impose a sales and use tax of one-half of one percent 
139.8   for the purposes specified in subdivision 2: 
139.9      (1) the city of St. Cloud, pursuant to the approval of the 
139.10  city voters at the general election held on November 7, 2000; 
139.11     (2) the city of Sartell, pursuant to the approval of the 
139.12  city voters at an election held in November 1999; and 
139.13     (3) each of the cities of Sauk Rapids, Waite Park, St. 
139.14  Joseph, and St. Augusta, pursuant to the approval of the voters 
139.15  of that city at the next general election following the date of 
139.16  final enactment of this act, as provided for in subdivision 3. 
139.17     Minnesota Statutes, section 297A.99, governs the 
139.18  imposition, administration, collection, and enforcement of the 
139.19  taxes authorized under this subdivision, except as specifically 
139.20  provided otherwise in this section. 
139.21     Subd. 2.  [USE OF REVENUES.] (a) Revenues received from the 
139.22  taxes authorized under subdivision 1, with the exception of 
139.23  revenues collected from a tax imposed in the city of Waite Park, 
139.24  must be used for the cost of collecting and administering the 
139.25  taxes and to pay all or part of the capital or administrative 
139.26  costs of the acquisition, construction, and improvement of (1) 
139.27  the main runway improvements to the St. Cloud Regional Airport; 
139.28  and (2) remodeling, expansion, or construction of the St. 
139.29  Cloud/Great River Regional Library at its current location as 
139.30  provided for in the city of St. Cloud capital improvement 
139.31  program 2000 to 2005, adopted by the St. Cloud planning 
139.32  commission on July 14, 1999.  Revenues from a tax imposed by the 
139.33  city of Waite Park must be used to pay the cost of collecting 
139.34  and administering the tax and to fund the St. Cloud Regional 
139.35  Airport and the Waite Park branch of the St. Cloud/Great River 
139.36  Regional Library but not the main facility of the St. 
140.1   Cloud/Great River Regional Library.  Authorized expenses 
140.2   include, but are not limited to, acquiring property, paying 
140.3   construction expenses related to the development of these 
140.4   facilities, and securing and paying debt service on bonds or 
140.5   other obligations issued to finance construction or improvement 
140.6   of the authorized facility. 
140.7      (b) If revenues collected from the taxes imposed under 
140.8   subdivision 1 are greater than the amount needed to meet 
140.9   obligations under paragraph (a) in any year, the surplus may be 
140.10  returned to the cities in a manner agreed upon by the 
140.11  participating cities under this section, to be used by the 
140.12  cities for projects of regional significance, limited to:  the 
140.13  acquisition and improvement of park land and open space; the 
140.14  purchase, renovation, and construction of public buildings and 
140.15  land primarily used for the arts, libraries, and community 
140.16  centers; major roadway improvements; and for debt service on 
140.17  bonds issued for these purposes.  Authorized expenses include, 
140.18  but are not limited to, acquiring property, paying construction 
140.19  expenses related to the development of these facilities, and 
140.20  securing and paying debt service on bonds or other obligations 
140.21  issued to finance construction or improvement of the authorized 
140.22  facility.  The distribution of surplus revenues raised by the 
140.23  tax shall be determined by an applicable joint powers agreement. 
140.24  The revenues returned to each city may only be used to fund 
140.25  projects that have been approved by voters at the referendum 
140.26  authorizing the tax. 
140.27     (c) Pursuant to the approval of the city of St. Cloud 
140.28  voters at the general election held on November 7, 2000, the 
140.29  surplus returned to the city of St. Cloud under paragraph (b) 
140.30  shall be used for the following projects: 
140.31     (1) intersection improvements to the 25th Avenue and trunk 
140.32  highway No. 23, I-94 interchange at county road 75, 10th Street 
140.33  South improvements, the West Metro corridor improvements, and 
140.34  other regionally significant road projects; and 
140.35     (2) park and nature land purchase, trail development, and 
140.36  improvements and expansions of existing regional park 
141.1   facilities, as provided for in the city of St. Cloud capital 
141.2   improvement program 2000 to 2005, adopted by the St. Cloud 
141.3   planning commission on July 14, 1999.  Revenues from the tax 
141.4   imposed in the city of Sartell must be used for the purposes 
141.5   listed in this subdivision, notwithstanding other purposes 
141.6   listed in the authorizing referendum, and are not subject to the 
141.7   requirements of Minnesota Statutes, section 297A.99, subdivision 
141.8   3. 
141.9      (d) Pursuant to the approval of the city of Sartell voters 
141.10  at the election held in November 1999, the surplus returned to 
141.11  the city of Sartell under paragraph (b) shall be used to fund 
141.12  construction, expansion, and improvements to a community center 
141.13  and for park land acquisition and improvement. 
141.14     Subd. 3.  [SEPARATE REFERENDA REQUIRED.] Notwithstanding 
141.15  Minnesota Statutes, section 297A.99, subdivision 3, each city 
141.16  listed in subdivision 1, clause (3), must have a separate vote 
141.17  on each project that it proposes to fund with the surplus tax 
141.18  revenues it receives under subdivision 2, paragraph (b).  For 
141.19  these cities, the cost of each project to be funded by the taxes 
141.20  authorized in subdivision 1 must be listed.  The referendum must 
141.21  state that approval of using the tax authorized in subdivision 1 
141.22  for any project shall also indicate approval to share the 
141.23  revenues collected from the tax with the other cities in the 
141.24  area which have also passed a sales tax.  The sharing shall be 
141.25  done in a manner agreed upon by all affected cities under a 
141.26  joint powers agreement. 
141.27     Subd. 4.  [BONDING AUTHORITY.] The cities named in 
141.28  subdivision 1 may issue bonds under Minnesota Statutes, chapter 
141.29  475, to finance the acquisition, construction, and improvements 
141.30  of the projects authorized under subdivision 2.  The election to 
141.31  approve the bonds, as required under Minnesota Statutes, section 
141.32  475.58, may be held in combination with the election to 
141.33  authorize imposition of the tax under subdivision 1.  Whether to 
141.34  permit imposition of the tax and issuance of the bonds may be 
141.35  posed to the voters as a single question.  The question must 
141.36  state that the sales tax revenues would be pledged to pay the 
142.1   bonds and that the bonds are guaranteed by the city's property 
142.2   taxes. 
142.3      (b) The issuance of bonds under this subdivision is not 
142.4   subject to Minnesota Statutes, section 275.60. 
142.5      (c) The bonds shall not be included in computing any debt 
142.6   limitation applicable to the city, and the levy of taxes under 
142.7   Minnesota Statutes, section 475.61, to pay the principal of and 
142.8   interest on the bonds is not subject to any levy limitation. 
142.9      (d) The principal amount of bonds issued by the city of St. 
142.10  Cloud for the projects authorized in subdivision 2, paragraph 
142.11  (a), plus the tax used directly to pay eligible capital 
142.12  expenditures and improvements for those projects may not exceed 
142.13  $2,700,000 for the airport improvements and $20,000,000 for the 
142.14  library improvements, plus an amount equal to the cost related 
142.15  to the issuance of the bonds.  The principal amount of bonds 
142.16  issued by the city of St. Cloud for the projects listed in 
142.17  subdivision 2, paragraph (c), plus the taxes used directly to 
142.18  pay eligible capital expenditures and improvements for those 
142.19  projects may not exceed $5,300,000 for the road improvements and 
142.20  $12,000,000 for the park improvements, plus an amount equal to 
142.21  the cost related to the issuance of the bonds. 
142.22     (e) The principal amount of bonds issued by the other 
142.23  cities named in subdivision 1 for the projects authorized in 
142.24  subdivision 2, paragraph (b), plus the tax used directly to pay 
142.25  eligible capital expenditures and improvements for those 
142.26  projects may not exceed the amount approved by the voters at the 
142.27  election required in subdivision 1, plus an amount equal to the 
142.28  cost related to the issuance of the bonds. 
142.29     (f) The taxes may be pledged to and used for the payment of 
142.30  the bonds and any bonds issued to refund them only if the full 
142.31  faith and credit of the city backs the bonds and any refunding 
142.32  bonds. 
142.33     Subd. 5.  [TERMINATION OF TAX.] The tax imposed by each 
142.34  city under subdivision 1 shall expire at the earlier of: 
142.35     (1) ten years after the date that the tax is first imposed 
142.36  in any of the cities listed in subdivision 1; or 
143.1      (2) the date that the amount of revenues received by the 
143.2   city of St. Cloud to pay for the projects under subdivision 2, 
143.3   paragraphs (a) and (c), shall meet or exceed the sum of 
143.4   $40,000,000 plus an amount equal to the costs related to the 
143.5   issuance of bonds under subdivision 4, paragraphs (b) and (c). 
143.6   Any funds remaining after completion of the projects and 
143.7   retirement or redemption of the bonds may be placed in the 
143.8   general funds of the cities imposing the taxes.  If the cities 
143.9   that pass a referendum required under subdivision 1 determine 
143.10  that the revenues raised from the authorized taxes will not be 
143.11  sufficient to fund the projects in subdivision 2, other local 
143.12  revenues must be committed. 
143.13     [EFFECTIVE DATE.] This section is effective August 1, 2001, 
143.14  with respect to any city listed in subdivision 1, upon 
143.15  compliance of the governing body of that city with Minnesota 
143.16  Statutes, section 645.021, subdivision 3.  
143.17     Sec. 40.  [CITY OF HOPKINS; FOOD AND BEVERAGE TAX.] 
143.18     Subdivision 1.  [SALES AND USE TAX.] Notwithstanding 
143.19  Minnesota Statutes, section 477A.016, or any ordinance, city 
143.20  charter, or other provision of law, the city of Hopkins may, by 
143.21  ordinance, impose a sales tax of up to one percent on the gross 
143.22  receipts of all food and beverages, including on-sale 
143.23  intoxicating beverages and fermented malt beverages, sold at 
143.24  licensed on-sale liquor establishments, restaurants, or other 
143.25  places of refreshment located within the geographic boundaries 
143.26  of the city.  The imposition of this tax is subject to the 
143.27  reverse referendum requirement in subdivision 3. 
143.28     Subd. 2.  [USE OF PROCEEDS FROM FOOD AND BEVERAGE TAX.] The 
143.29  proceeds of any tax imposed under subdivision 1 must be used by 
143.30  the city to fund public arts purposes.  Authorized expenses 
143.31  include, but are not limited to, expenses related to public art 
143.32  facilities, community or public arts projects, or purchase or 
143.33  acquisition of art for public purposes. 
143.34     Subd. 3.  [REVERSE REFERENDUM.] If the Hopkins city council 
143.35  intends to impose the tax authorized under this section, it must 
143.36  first pass a resolution stating the intention to impose the 
144.1   tax.  The city must then publish the resolution together with a 
144.2   notice of public hearing on the resolution for two successive 
144.3   weeks in its official newspaper or, if none exists, in a 
144.4   newspaper of general circulation in the city.  The hearing must 
144.5   be held two to four weeks after the first publication.  After 
144.6   the hearing, the city council may decide to take no action or 
144.7   may adopt a resolution authorizing the imposition of the tax.  A 
144.8   resolution authorizing the tax must be published in the city's 
144.9   official newspaper or, if none exists, in a newspaper of general 
144.10  circulation in the city.  The resolution is not effective if a 
144.11  petition requesting a referendum on the resolution is filed with 
144.12  the city clerk within 30 days of publication of the resolution.  
144.13  The petition must be signed by voters equal to at least five 
144.14  percent of the votes cast in the city in the last general 
144.15  election.  The resolution is effective if approved by a majority 
144.16  of those voting on the question.  The commissioner of revenue 
144.17  shall prepare a suggested form of referendum question.  The 
144.18  referendum must be held at a special or general election. 
144.19     Subd. 4.  [ENFORCEMENT, COLLECTION, AND ADMINISTRATION OF 
144.20  THE TAX.] Unless the city of Hopkins and the commissioner of 
144.21  revenue otherwise agree, the tax must be collected and 
144.22  administered in the same manner as general local sales taxes 
144.23  under Minnesota Statutes, section 297A.99, subdivision 9.  
144.24     [EFFECTIVE DATE.] This section is effective upon approval 
144.25  by the Hopkins city council and compliance with Minnesota 
144.26  Statutes, section 645.021, subdivision 3. 
144.27     Sec. 41.  [APPROPRIATION.] 
144.28     $4,730,000 is appropriated in fiscal year 2002, and 
144.29  $5,320,000 is appropriated in fiscal year 2003 from the highway 
144.30  user trust distribution fund to the general fund. 
144.31                             ARTICLE 8
144.32                        PROPERTY TAX POLICY
144.33     Section 1.  [103B.253] [COUNTY LEVY AUTHORITY.] 
144.34     Notwithstanding any other law to the contrary, a county 
144.35  levying a tax under section 103B.241, 103B.245, or 103B.251 
144.36  shall not include any taxes levied under those authorities in 
145.1   the levy certified under section 275.07, subdivision 1, 
145.2   paragraph (a).  A county levying under section 103B.241, 
145.3   103B.245, or 103B.251 shall separately certify that amount and 
145.4   the auditor shall extend that levy as a special taxing district 
145.5   levy under sections 275.066 and 275.07, subdivision 1, paragraph 
145.6   (b). 
145.7      [EFFECTIVE DATE.] This section is effective for taxes 
145.8   levied in 2001, payable in 2002, and thereafter. 
145.9      Sec. 2.  Minnesota Statutes 2000, section 103D.905, 
145.10  subdivision 3, is amended to read: 
145.11     Subd. 3.  [ADMINISTRATIVE GENERAL FUND.] An administrative 
145.12  A general fund, consisting of an ad valorem tax levy, may not 
145.13  exceed 0.02418 0.048 percent of taxable market value, or 
145.14  $125,000 $250,000, whichever is less.  The money in the fund 
145.15  shall be used for general administrative expenses and for the 
145.16  construction or implementation and maintenance of projects of 
145.17  common benefit to the watershed district.  The managers may make 
145.18  an annual levy for the administrative general fund as provided 
145.19  in section 103D.911.  In addition to the annual administrative 
145.20  general levy, the managers may annually levy a tax not to exceed 
145.21  0.00798 percent of taxable market value for a period not to 
145.22  exceed 15 consecutive years to pay the cost attributable to the 
145.23  basic water management features of projects initiated by 
145.24  petition of a municipality of political subdivision within the 
145.25  watershed district or by petition of at least 50 resident owners 
145.26  whose property is within the watershed district.  
145.27     [EFFECTIVE DATE.] This section is effective for taxes 
145.28  levied in 2001, payable in 2002, and thereafter. 
145.29     Sec. 3.  Minnesota Statutes 2000, section 116C.779, is 
145.30  amended to read: 
145.31     116C.779 [FUNDING FOR RENEWABLE DEVELOPMENT.] 
145.32     (a) The public utility that operates the Prairie Island 
145.33  nuclear generating plant must transfer to a renewable 
145.34  development account $500,000 each year for each dry cask 
145.35  containing spent fuel that is located at the independent spent 
145.36  fuel storage installation at Prairie Island after January 1, 
146.1   1999.  The fund transfer must be made if waste is stored in a 
146.2   cask for any part of a year.  Funds in the account may be 
146.3   expended only for development of renewable energy sources.  
146.4   Preference must be given to development of renewable energy 
146.5   source projects located within the state. 
146.6      (b) Expenditures from the account may only be made after 
146.7   approval by order of the public utilities commission upon a 
146.8   petition by the public utility. 
146.9      (c) Proposed renewable energy projects, which would sell or 
146.10  otherwise assign the electric output of an otherwise qualifying 
146.11  hydroelectric project to a party other than the public utility 
146.12  that operates the Prairie Island nuclear generating plant, shall 
146.13  be eligible for funds under this section, and no such renewable 
146.14  energy project shall be rejected for funding on the basis that 
146.15  the public utility that operates the Prairie Island nuclear 
146.16  generating plant would not be the purchaser of the electric 
146.17  output.  Any such sale or assignment of output shall not be 
146.18  subject to any right of first refusal claimed by the utility 
146.19  that operates Prairie Island nuclear generating plant, 
146.20  notwithstanding any order of the public utilities commission. 
146.21     Sec. 4.  Minnesota Statutes 2000, section 123A.45, 
146.22  subdivision 2, is amended to read: 
146.23     Subd. 2.  [PETITION.] The petition must contain: 
146.24     (a) A correct description of the area proposed for 
146.25  detachment and annexation, including supporting data regarding 
146.26  location and title to land to establish that the land is 
146.27  adjoining a district. 
146.28     (b) The reasons for the proposed change with facts showing 
146.29  that the granting of the petition will not reduce the size of 
146.30  any district to less than four sections, unless the district is 
146.31  not operating a school within the district. 
146.32     (c) Consent to the petition, if, at the time of the filing 
146.33  of the petition, any part of the area proposed for detachment is 
146.34  part of a district which maintains and operates a secondary 
146.35  school within the district.  Before the hearing, the consent of 
146.36  the board of the district in which the area proposed for 
147.1   detachment lies must be endorsed on the petition. 
147.2      (d) An identification of the district to which annexation 
147.3   is sought. 
147.4      (e) Other information the petitioners may desire to affix. 
147.5      (f) An acknowledgment by the petitioner. 
147.6      (g) A description of whether bonded indebtedness will be 
147.7   allocated according to subdivision 6, paragraph (b) or (c). 
147.8      [EFFECTIVE DATE.] This section is effective the day 
147.9   following final enactment for detachment and annexations 
147.10  requests approved by a county board on or after that date. 
147.11     Sec. 5.  Minnesota Statutes 2000, section 123A.45, 
147.12  subdivision 6, is amended to read: 
147.13     Subd. 6.  [TAXABLE PROPERTY.] (a) Upon the effective date 
147.14  of the order, the detachment and annexation is effected.  The 
147.15  bonded indebtedness must be assigned to the detached and annexed 
147.16  land under either paragraph (b) or (c). 
147.17     (b) Unless specified separately under paragraph (c), all 
147.18  taxable property in the area so detached and annexed remains 
147.19  taxable for payment of any school purpose obligations already 
147.20  authorized by or outstanding on the effective date of the order 
147.21  against the district from which detached.  The order does not 
147.22  relieve such property from the obligation of any bonded debt 
147.23  already incurred to which it was subject prior to the order.  
147.24  All taxable property in the area so detached and annexed is 
147.25  taxable for payment of any district obligations authorized on or 
147.26  subsequent to the effective date of the order by the district to 
147.27  which annexation is made. 
147.28     (c) Alternatively, if the school board of the district in 
147.29  which the area is proposed for detachment and the school board 
147.30  of the district in which the area is proposed for annexation 
147.31  agree, all taxable property in the area detached and annexed 
147.32  shall be taxable by the school district to which the property is 
147.33  annexed.  Detached and annexed property is relieved from the 
147.34  obligation of any bonded debt already incurred by the district 
147.35  in which the area is detached and is obligated for any bonded 
147.36  debt already incurred by the district to which the area is 
148.1   annexed. 
148.2      [EFFECTIVE DATE.] This sections is effective the day 
148.3   following final enactment for detachment and annexations 
148.4   requests approved by a county board on or after that date. 
148.5      Sec. 6.  Minnesota Statutes 2000, section 126C.13, is 
148.6   amended by adding a subdivision to read: 
148.7      Subd. 1a.  [TAX BASE CERTIFICATIONS.] (a) The tax rate 
148.8   under subdivision 1 must be determined excluding the school 
148.9   district tax base resulting from sections 46 and 49. 
148.10     (b) The commissioner of revenue shall include the 
148.11  additional tax base resulting from sections 46 and 49 in 
148.12  certifying school district adjusted net tax capacities and 
148.13  referendum market values to the commissioner of children, 
148.14  families, and learning for determining levy amounts. 
148.15     [EFFECTIVE DATE.] This section is effective for taxes 
148.16  payable in 2002 and thereafter. 
148.17     Sec. 7.  [144F.01] [EMERGENCY MEDICAL SERVICES SPECIAL 
148.18  TAXING DISTRICTS.] 
148.19     Subdivision 1.  [POLITICAL SUBDIVISION DEFINED.] In this 
148.20  section, "political subdivision" means a county, a statutory or 
148.21  home rule charter city, or a township organized to provide town 
148.22  government. 
148.23     Subd. 2.  [WHO MAY ESTABLISH.] Two or more political 
148.24  subdivisions, or parts of them, may establish by resolution of 
148.25  their governing bodies a special taxing district for emergency 
148.26  medical services.  The participating territory of a 
148.27  participating political subdivision need not abut any other 
148.28  participating territory to be in the special taxing district. 
148.29     Subd. 3.  [BOARD.] The special taxing district under this 
148.30  section is governed by a board made up initially of 
148.31  representatives of each participating political subdivision in 
148.32  the proportions set out in the establishing resolution, subject 
148.33  to change as provided in the district's charter, if any, or in 
148.34  the district's bylaws.  Each participant's representative serves 
148.35  at the pleasure of that participant's governing body. 
148.36     Subd. 4.  [PROPERTY TAX LEVY AUTHORITY.] The district's 
149.1   board may levy a tax on the taxable real and personal property 
149.2   in the district.  The ad valorem tax levy may not exceed 0.048 
149.3   percent of the taxable market value of the district or $250,000, 
149.4   whichever is less.  The proceeds of the levy must be used as 
149.5   provided in subdivision 5.  The board shall certify the levy at 
149.6   the times as provided under section 275.07.  The board shall 
149.7   provide the county with whatever information is necessary to 
149.8   identify the property that is located within the district.  If 
149.9   the boundaries include a part of a parcel, the entire parcel 
149.10  shall be included in the district.  The county auditors must 
149.11  spread, collect, and distribute the proceeds of the tax at the 
149.12  same time and in the same manner as provided by law for all 
149.13  other property taxes. 
149.14     Subd. 5.  [USE OF LEVY PROCEEDS.] The proceeds of property 
149.15  taxes levied under this section must be used to support the 
149.16  providing of out-of-hospital emergency medical services 
149.17  including, but not limited to, first responder or rescue squads 
149.18  recognized by the district, ambulance services licensed under 
149.19  chapter 144E and recognized by the district, medical control 
149.20  functions set out in chapter 144E, communications equipment and 
149.21  systems, and programs of regional emergency medical services 
149.22  authorized by regional boards described in section 144E.52. 
149.23     Subd. 6.  [ADVISORY COMMITTEE.] A special taxing district 
149.24  board under this section must have an advisory committee to 
149.25  advise the board on issues involving emergency medical services 
149.26  and EMS communications.  The committee's membership must be 
149.27  comprised of representatives of first responders, ambulance 
149.28  services, ambulance medical directors, and EMS communication 
149.29  experts.  The advisory committee members serve at the pleasure 
149.30  of the appointing board. 
149.31     Subd. 7.  [POWERS.] (a) In addition to authority expressly 
149.32  granted in this section, a special taxing district under this 
149.33  section may exercise any power that may be exercised by any of 
149.34  its participating political subdivisions, except that the board 
149.35  may not incur debt.  The special taxing district may only use 
149.36  the power to do what is necessary or reasonable to support the 
150.1   services set out in subdivision 5. 
150.2      (b) Notwithstanding paragraph (a), the district may only 
150.3   levy the taxes authorized in this section. 
150.4      Subd. 8.  [ADDITIONS AND WITHDRAWALS.] (a) Additional 
150.5   eligible political subdivisions may be added to a special taxing 
150.6   district under this section as provided by the board of the 
150.7   district and agreed to in a resolution of the governing body of 
150.8   the political subdivision proposed to be added. 
150.9      (b) A political subdivision may withdraw from a special 
150.10  taxing district under this section by resolution of its 
150.11  governing body.  The political subdivision must notify the board 
150.12  of the special taxing district of the withdrawal by providing a 
150.13  copy of the resolution at least one year in advance of the 
150.14  proposed withdrawal.  The taxable property of the withdrawing 
150.15  member is subject to the property tax levy under subdivision 4 
150.16  for the taxes payable year following the notice of the 
150.17  withdrawal, unless the board and the withdrawing member agree 
150.18  otherwise by action of their governing bodies. 
150.19     (c) Notwithstanding subdivision 2, if the district is 
150.20  comprised of only two political subdivisions and one of the 
150.21  political subdivisions withdraws, the district can continue to 
150.22  exist. 
150.23     Subd. 9.  [DISSOLUTION.] If the special taxing district is 
150.24  dissolved, the assets and liabilities may be assigned to a 
150.25  successor entity, if any, or otherwise disposed of for public 
150.26  purposes as provided by law.  
150.27     [EFFECTIVE DATE.] This section is effective for taxes 
150.28  levied in 2002, payable in 2003, through taxes levied in 2007, 
150.29  payable in 2008. 
150.30     Sec. 8.  Minnesota Statutes 2000, section 271.01, 
150.31  subdivision 5, is amended to read: 
150.32     Subd. 5.  [JURISDICTION.] The tax court shall have 
150.33  statewide jurisdiction.  Except for an appeal to the supreme 
150.34  court or any other appeal allowed under this subdivision, the 
150.35  tax court shall be the sole, exclusive, and final authority for 
150.36  the hearing and determination of all questions of law and fact 
151.1   arising under the tax laws of the state, as defined in this 
151.2   subdivision, in those cases that have been appealed to the tax 
151.3   court and in any case that has been transferred by the district 
151.4   court to the tax court.  The tax court shall have no 
151.5   jurisdiction in any case that does not arise under the tax laws 
151.6   of the state or in any criminal case or in any case determining 
151.7   or granting title to real property or in any case that is under 
151.8   the probate jurisdiction of the district court.  The small 
151.9   claims division of the tax court shall have no jurisdiction in 
151.10  any case dealing with property valuation or assessment for 
151.11  property tax purposes until the taxpayer has appealed the 
151.12  valuation or assessment to the county board of equalization, and 
151.13  in those towns and cities which have not transferred their 
151.14  duties to the county, the town or city board of equalization, 
151.15  except for:  (i) those taxpayers whose original assessments are 
151.16  determined by the commissioner of revenue; and (ii) those 
151.17  taxpayers appealing a denial of a current year application for 
151.18  the homestead classification for their property and the denial 
151.19  was not reflected on a valuation notice issued in the year; and 
151.20  (iii) any case dealing with property valuation, assessment, or 
151.21  taxation for property tax purposes and meeting the 
151.22  jurisdictional requirements of section 271.21, subdivision 2, 
151.23  paragraph (c).  The tax court shall have no jurisdiction in any 
151.24  case involving an order of the state board of equalization 
151.25  unless a taxpayer contests the valuation of property.  Laws 
151.26  governing taxes, aids, and related matters administered by the 
151.27  commissioner of revenue, laws dealing with property valuation, 
151.28  assessment or taxation of property for property tax purposes, 
151.29  and any other laws that contain provisions authorizing review of 
151.30  taxes, aids, and related matters by the tax court shall be 
151.31  considered tax laws of this state subject to the jurisdiction of 
151.32  the tax court.  This subdivision shall not be construed to 
151.33  prevent an appeal, as provided by law, to an administrative 
151.34  agency, board of equalization, review under section 274.13, 
151.35  subdivision 1c, or to the commissioner of revenue.  Wherever 
151.36  used in this chapter, the term commissioner shall mean the 
152.1   commissioner of revenue, unless otherwise specified. 
152.2      Sec. 9.  Minnesota Statutes 2000, section 271.21, 
152.3   subdivision 2, is amended to read: 
152.4      Subd. 2.  [JURISDICTION.] At the election of the taxpayer, 
152.5   the small claims division shall have jurisdiction only in the 
152.6   following matters: 
152.7      (a) cases involving valuation, assessment, or taxation of 
152.8   real or personal property, if the taxpayer has satisfied the 
152.9   requirements of section 271.01, subdivision 5, and:  (i) the 
152.10  issue is a denial of a current year application for the 
152.11  homestead classification for the taxpayer's property and the 
152.12  denial was not reflected on a valuation notice issued in the 
152.13  year; or (ii) in the case of nonhomestead property, the 
152.14  assessor's estimated market value is less than $100,000; or 
152.15     (b) any other case concerning the tax laws as defined in 
152.16  section 271.01, subdivision 5, in which the amount in 
152.17  controversy does not exceed $5,000, including penalty and 
152.18  interest; or 
152.19     (c) cases involving valuation, assessment, or taxation of 
152.20  real or personal property if: 
152.21     (i) the issue is a denial of a current year application for 
152.22  the homestead classification for the taxpayer's property; 
152.23     (ii) only one parcel is included in the petition, the 
152.24  entire parcel is classified as homestead 1a or 1b pursuant to 
152.25  section 273.13, and the parcel contains no more than one 
152.26  dwelling unit; or 
152.27     (iii) the assessor's estimated market value of the property 
152.28  included in the petition is less than $300,000. 
152.29     Sec. 10.  Minnesota Statutes 2000, section 272.02, 
152.30  subdivision 7, is amended to read: 
152.31     Subd. 7.  [INSTITUTIONS OF PUBLIC CHARITY.] 
152.32  Institutions Property of an institution of purely public charity 
152.33  are, or property that would be listed for taxation in the name 
152.34  of an institution of purely public charity under section 272.01, 
152.35  subdivision 2, or 273.19, and that is used for the charitable 
152.36  purposes of such institution, is exempt except parcels of 
153.1   property containing structures and the.  However, land and 
153.2   structures described in section that qualify, or that could 
153.3   qualify under sections 273.13, subdivision 25, paragraph 
153.4   (e), and 462A.071, other than those that qualify for exemption 
153.5   under subdivision 26, are not exempt. 
153.6      [EFFECTIVE DATE.] This section is effective for taxes 
153.7   payable in 2002 and thereafter. 
153.8      Sec. 11.  Minnesota Statutes 2000, section 272.02, 
153.9   subdivision 10, is amended to read: 
153.10     Subd. 10.  [PERSONAL PROPERTY USED FOR POLLUTION CONTROL.] 
153.11  Personal property used primarily for the abatement and control 
153.12  of air, water, or land pollution is exempt to the extent that it 
153.13  is so used, and real property is exempt if it is used primarily 
153.14  for abatement and control of air, water, or land pollution as 
153.15  part of an agricultural operation, as a part of a centralized 
153.16  treatment and recovery facility operating under a permit issued 
153.17  by the Minnesota pollution control agency pursuant to chapters 
153.18  115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 
153.19  and 7045.0020 to 7045.1260, as a wastewater treatment facility 
153.20  and for the treatment, recovery, and stabilization of metals, 
153.21  oils, chemicals, water, sludges, or inorganic materials from 
153.22  hazardous industrial wastes, or as part of an electric 
153.23  generation system.  For purposes of this subdivision, personal 
153.24  property includes ponderous machinery and equipment used in a 
153.25  business or production activity that at common law is considered 
153.26  real property. 
153.27     Any taxpayer requesting exemption of all or a portion of 
153.28  any real property or any equipment or device, or part thereof, 
153.29  operated primarily for the control or abatement of air or, 
153.30  water, or land pollution shall file an application with the 
153.31  commissioner of revenue.  The equipment or device shall meet 
153.32  standards, rules, or criteria prescribed by the Minnesota 
153.33  pollution control agency, and must be installed or operated in 
153.34  accordance with a permit or order issued by that agency.  The 
153.35  Minnesota pollution control agency shall upon request of the 
153.36  commissioner furnish information or and advice to the 
154.1   commissioner.  
154.2      The information and advice furnished by the Minnesota 
154.3   pollution control agency must include statements as to whether 
154.4   the equipment, device, or real property meets a standard, rule, 
154.5   criteria, guideline, policy, or order of the Minnesota pollution 
154.6   control agency, and whether the equipment, device, or real 
154.7   property is installed or operated in accordance with it.  On 
154.8   determining that property qualifies for exemption, the 
154.9   commissioner shall issue an order exempting the property from 
154.10  taxation.  The equipment or, device, or real property shall 
154.11  continue to be exempt from taxation as long as the permit order 
154.12  issued by the Minnesota pollution control agency commissioner 
154.13  remains in effect. 
154.14     [EFFECTIVE DATE.] This section is effective for exemption 
154.15  applications received on or after July 1, 2001.  
154.16     Sec. 12.  Minnesota Statutes 2000, section 272.02, is 
154.17  amended by adding a subdivision to read: 
154.18     Subd. 45.  [RESIDENTIAL BUILDINGS ON TEMPORARY SITES.] A 
154.19  newly constructed building that is situated on real property is 
154.20  exempt if it is: 
154.21     (1) intended for future residential occupancy; 
154.22     (2) on a temporary foundation and intended to be moved; 
154.23     (3) not used as a model or for any other business purposes; 
154.24     (4) not connected to any utilities; and 
154.25     (5) located on land that will not be sold with the building.
154.26     The exemption under this subdivision is allowable for only 
154.27  one assessment year after the date of the initial construction 
154.28  of the building. 
154.29     [EFFECTIVE DATE.] This section is effective beginning with 
154.30  the 2001 assessment and thereafter. 
154.31     Sec. 13.  Minnesota Statutes 2000, section 272.02, is 
154.32  amended by adding a subdivision to read: 
154.33     Subd. 46.  [PUBLICLY OWNED PARKING FACILITIES.] Parking 
154.34  lots, ramps, structures, garages, and other facilities for 
154.35  vehicle parking owned by a municipality or authority established 
154.36  under chapter 469 or any affiliate nonprofit corporate entity 
155.1   organized by a municipality or authority are exempt, including 
155.2   those parking lots, ramps, structures, garages, and other 
155.3   facilities that are in whole or in part operated by, used by, 
155.4   leased, or subleased to an individual or nonprofit or for-profit 
155.5   entity, notwithstanding section 272.01, subdivision 2, or 273.19.
155.6      [EFFECTIVE DATE.] This section is effective the day after 
155.7   final enactment. 
155.8      Sec. 14.  Minnesota Statutes 2000, section 272.02, is 
155.9   amended by adding a subdivision to read: 
155.10     Subd. 47.  [POULTRY LITTER BIOMASS GENERATION FACILITY 
155.11  PERSONAL PROPERTY.] Notwithstanding subdivision 9, clause (a), 
155.12  attached machinery and other personal property which is part of 
155.13  an electrical generating facility that meets the requirements of 
155.14  this subdivision is exempt.  At the time of construction, the 
155.15  facility must: 
155.16     (1) be designed to utilize poultry litter as a primary fuel 
155.17  source; 
155.18     (2) be constructed for the purpose of generating power at 
155.19  the facility that will be sold pursuant to a contract approved 
155.20  by the public utilities commission in accordance with the 
155.21  biomass mandate imposed under section 216B.2424; and 
155.22     (3) comply with the requirements of section 177.43. 
155.23     Construction of the facility must be commenced after 
155.24  January 1, 2000, and before December 31, 2002.  Property 
155.25  eligible for this exemption does not include electric 
155.26  transmission lines and interconnections or gas pipelines and 
155.27  interconnections appurtenant to the property or the facility. 
155.28     [EFFECTIVE DATE.] This section is effective for taxes 
155.29  levied in 2001, payable in 2002, and thereafter. 
155.30     Sec. 15.  Minnesota Statutes 2000, section 272.02, is 
155.31  amended by adding a subdivision to read: 
155.32     Subd. 48.  [BIOMASS ELECTRICAL GENERATION FACILITY; 
155.33  PERSONAL PROPERTY.] Notwithstanding subdivision 9, clause (a), 
155.34  attached machinery and other personal property which is part of 
155.35  an electrical generating facility that meets the requirements of 
155.36  this subdivision is exempt.  At the time of construction, the 
156.1   facility must: 
156.2      (1) be designed to utilize biomass as established in 
156.3   section 216B.2424 as a primary fuel source; 
156.4      (2) be constructed for the purpose of generating power at 
156.5   the facility that will be sold pursuant to a contract approved 
156.6   by the public utilities commission in accordance with the 
156.7   biomass mandate imposed under section 216B.2424; and 
156.8      (3) comply with the requirements of section 177.43.  
156.9      Construction of the facility must be commenced after 
156.10  January 1, 2000, and before December 31, 2002.  Property 
156.11  eligible for this exemption does not include electric 
156.12  transmission lines and interconnections or gas pipelines and 
156.13  interconnections appurtenant to the property or facility.  
156.14     [EFFECTIVE DATE.] This section is effective for taxes 
156.15  levied in 2001, payable in 2002, and thereafter. 
156.16     Sec. 16.  Minnesota Statutes 2000, section 272.02, is 
156.17  amended by adding a subdivision to read: 
156.18     Subd. 49.  [WASTE TIRE COGENERATION FACILITY; PERSONAL 
156.19  PROPERTY.] Notwithstanding subdivision 9, clause (a), attached 
156.20  machinery and other personal property which is part of an 
156.21  electric generating facility that meets the requirements of this 
156.22  subdivision is exempt.  At the time of construction, the 
156.23  facility must: 
156.24     (1) be designed to utilize waste tires as a primary fuel 
156.25  source; 
156.26     (2) be a cogeneration electric generating facility of one 
156.27  to 25 megawatts of installed capacity; and 
156.28     (3) comply with the requirements of section 177.43. 
156.29     Construction of the facility must be commenced after 
156.30  January 1, 2000, and before January 1, 2004.  Property eligible 
156.31  for this exemption does not include electric transmission lines 
156.32  and interconnections or gas pipelines and interconnections 
156.33  appurtenant to the property or the facility. 
156.34     [EFFECTIVE DATE.] This section is effective for taxes 
156.35  levied in 2001, payable in 2002, and thereafter. 
156.36     Sec. 17.  Minnesota Statutes 2000, section 272.02, is 
157.1   amended by adding a subdivision to read: 
157.2      Subd. 50.  [EXEMPTION FOR PERSONAL PROPERTY USED TO 
157.3   GENERATE ELECTRICITY.] For a generation facility using natural 
157.4   gas or similar clean fuel or a natural gas peaking facility that 
157.5   is constructed and placed into service after January 1, 2001, 
157.6   and the construction of which complies with the requirements of 
157.7   section 177.43, personal property used to generate electricity 
157.8   or to store natural gas or similar fuel is exempt from property 
157.9   taxation.  This exemption does not apply to transformers, 
157.10  transmission lines, distribution lines, or any other tools, 
157.11  implements, and machinery that is part of an electric 
157.12  substation, wherever located. 
157.13     Sec. 18.  Minnesota Statutes 2000, section 272.02, is 
157.14  amended by adding a subdivision to read: 
157.15     Subd. 51.  [PROPERTY USED FOR AGRICULTURAL EDUCATION.] 
157.16  Property owned and operated by a private, nonprofit charitable 
157.17  corporation that qualifies for tax exemption under section 
157.18  501(c)(3) of the Internal Revenue Code, is exempt from property 
157.19  tax, if the property is primarily used for educational 
157.20  interpretation of the past, present, and future of agriculture 
157.21  in Minnesota, including, but not limited to, visitor and 
157.22  conference centers, storage and demonstration structures, and 
157.23  buildings for machinery, artifacts, crops, and livestock. 
157.24     [EFFECTIVE DATE.] This section is effective for the 2001 
157.25  assessment, taxes payable in 2002, and thereafter. 
157.26     Sec. 19.  Minnesota Statutes 2000, section 273.061, 
157.27  subdivision 1, is amended to read: 
157.28     Subdivision 1.  [OFFICE CREATED; APPOINTMENT, 
157.29  QUALIFICATIONS.] Every county in this state shall have a county 
157.30  assessor.  The county assessor shall be appointed by the board 
157.31  of county commissioners.  The assessor shall be selected and 
157.32  appointed because of knowledge and training in the field of 
157.33  property taxation and appointment shall be approved by the 
157.34  commissioner of revenue before the same shall become effective.  
157.35  Upon receipt by the county commissioners of the commissioner of 
157.36  revenue's refusal to approve an appointment, the term of the 
158.1   appointee shall terminate at the end of that day.  
158.2      The commissioner of revenue may grant approval on a 
158.3   probationary basis for a period of two years.  The commissioner 
158.4   must base the decision to impose a probationary period on 
158.5   objective and consistent criteria.  At the end of the two-year 
158.6   probationary period, the commissioner may either refuse to 
158.7   approve the person's appointment for the remainder of the 
158.8   person's four-year term, approve the person's appointment but 
158.9   only for another two-year probationary period, or 
158.10  unconditionally approve the person's appointment for the 
158.11  remainder of the four-year term for which the person was 
158.12  originally appointed by the county board.  The criteria shall 
158.13  not be considered rules and are not subject to the 
158.14  Administrative Procedure Act. 
158.15     Notwithstanding any law to the contrary, a county assessor 
158.16  must have senior accreditation from the state board of assessors 
158.17  by January 1, 1992, or within two years of the assessor's first 
158.18  appointment under this section, whichever is later. 
158.19     [EFFECTIVE DATE.] This section is effective the day 
158.20  following final enactment. 
158.21     Sec. 20.  Minnesota Statutes 2000, section 273.061, 
158.22  subdivision 2, is amended to read: 
158.23     Subd. 2.  [TERM; VACANCY.] (a) The terms of county 
158.24  assessors appointed under this section shall be four years.  A 
158.25  new term shall begin on January 1 of every fourth year after 
158.26  1973.  When any vacancy in the office occurs, the board of 
158.27  county commissioners, within 30 90 days thereafter, shall fill 
158.28  the same by appointment for the remainder of the term, following 
158.29  the procedure prescribed in subdivision 1.  The term of the 
158.30  county assessor may be terminated by the board of county 
158.31  commissioners at any time, on charges of inefficiency or neglect 
158.32  of duty malfeasance, misfeasance, or nonfeasance by the 
158.33  commissioner of revenue.  If the board of county commissioners 
158.34  does not intend to reappoint a county assessor who has been 
158.35  certified by the state board of assessors, the board shall 
158.36  present written notice to the county assessor not later than 90 
159.1   days prior to the termination of the assessor's term, that it 
159.2   does not intend to reappoint the assessor.  If written notice is 
159.3   not timely made, the county assessor will automatically be 
159.4   reappointed by the board of county commissioners. 
159.5      The commissioner of revenue may recommend to the state 
159.6   board of assessors the nonrenewal, suspension, or revocation of 
159.7   an assessor's license as provided in sections 270.41 to 270.53.  
159.8      (b) In the event of a vacancy in the office of county 
159.9   assessor, through death, resignation or other reasons, the 
159.10  deputy (or chief deputy, if more than one) shall perform the 
159.11  functions of the office.  If there is no deputy, the county 
159.12  auditor shall designate a person to perform the duties of the 
159.13  office until an appointment is made as provided in clause (a).  
159.14  Such person shall perform the duties of the office for a period 
159.15  not exceeding 30 90 days during which the county board must 
159.16  appoint a county assessor.  Such 30-day 90-day period may, 
159.17  however, be extended by written approval of the commissioner of 
159.18  revenue. 
159.19     (c) In the case of the first appointment under paragraph 
159.20  (a) of a county assessor who is accredited but who does not have 
159.21  senior accreditation, an approval of the appointment by the 
159.22  commissioner shall be provisional, provided that a county 
159.23  assessor appointed to a provisional term under this paragraph 
159.24  must reapply to the commissioner at the end of the provisional 
159.25  term.  A provisional term may not exceed two years.  The 
159.26  commissioner shall not approve the appointment for the remainder 
159.27  of the four-year term unless the assessor has obtained senior 
159.28  accreditation. 
159.29     [EFFECTIVE DATE.] This section is effective the day 
159.30  following final enactment. 
159.31     Sec. 21.  Minnesota Statutes 2000, section 273.061, 
159.32  subdivision 8, is amended to read: 
159.33     Subd. 8.  [POWERS AND DUTIES.] The county assessor shall 
159.34  have the following powers and duties: 
159.35     (1) To call upon and confer with the township and city 
159.36  assessors in the county, and advise and give them the necessary 
160.1   instructions and directions as to their duties under the laws of 
160.2   this state, to the end that a uniform assessment of all real 
160.3   property in the county will be attained. 
160.4      (2) To assist and instruct the local assessors in the 
160.5   preparation and proper use of land maps and record cards, in the 
160.6   property classification of real and personal property, and in 
160.7   the determination of proper standards of value. 
160.8      (3) To keep the local assessors in the county advised of 
160.9   all changes in assessment laws and all instructions which the 
160.10  assessor receives from the commissioner of revenue relating to 
160.11  their duties. 
160.12     (4) To have authority to require the attendance of groups 
160.13  of local assessors at sectional meetings called by the assessor 
160.14  for the purpose of giving them further assistance and 
160.15  instruction as to their duties. 
160.16     (5) To require the attendance of all licensed assessors 
160.17  working in that county at annual instructional meetings 
160.18  presented in part by the department of revenue regional 
160.19  representative to provide assistance and instruction as to their 
160.20  duties under the law and the proper implementation of assessment 
160.21  procedures. 
160.22     (6) To immediately commence the preparation of a large 
160.23  scale topographical land map of the county, in such form as may 
160.24  be prescribed by the commissioner of revenue, showing thereon 
160.25  the location of all railroads, highways and roads, bridges, 
160.26  rivers and lakes, swamp areas, wooded tracts, stony ridges and 
160.27  other features which might affect the value of the land.  
160.28  Appropriate symbols shall be used to indicate the best, the 
160.29  fair, and the poor land of the county.  For use in connection 
160.30  with the topographical land map, the assessor shall prepare and 
160.31  keep available in the assessor's office tables showing fair 
160.32  average minimum and maximum market values per acre of 
160.33  cultivated, meadow, pasture, cutover, timber and waste lands of 
160.34  each township.  The assessor shall keep the map and tables 
160.35  available in the office for the guidance of town assessors, 
160.36  boards of review, and the county board of equalization. 
161.1      (6) (7) To also prepare and keep available in the office 
161.2   for the guidance of town assessors, boards of review and the 
161.3   county board of equalization, a land valuation map of the 
161.4   county, in such form as may be prescribed by the commissioner of 
161.5   revenue.  This map, which shall include the bordering tier of 
161.6   townships of each county adjoining, shall show the average 
161.7   market value per acre, both with and without improvements, as 
161.8   finally equalized in the last assessment of real estate, of all 
161.9   land in each town or unorganized township which lies outside the 
161.10  corporate limits of cities.  
161.11     (7) (8) To regularly examine all conveyances of land 
161.12  outside the corporate limits of cities of the first and second 
161.13  class, filed with the county recorder of the county, and keep a 
161.14  file, by descriptions, of the considerations shown thereon.  
161.15  From the information obtained by comparing the considerations 
161.16  shown with the market values assessed, the assessor shall make 
161.17  recommendations to the county board of equalization of necessary 
161.18  changes in individual assessments or aggregate valuations. 
161.19     (8) (9) To become familiar with the values of the different 
161.20  items of personal property so as to be in a position when called 
161.21  upon to advise the boards of review and the county board of 
161.22  equalization concerning property, market values thereof. 
161.23     (9) (10) While the county board of equalization is in 
161.24  session, to give it every possible assistance to enable it to 
161.25  perform its duties.  The assessor shall furnish the board with 
161.26  all necessary charts, tables, comparisons, and data which it 
161.27  requires in its deliberations, and shall make whatever 
161.28  investigations the board may desire. 
161.29     (10) (11) At the request of either the board of county 
161.30  commissioners or the commissioner of revenue, to investigate 
161.31  applications for reductions of valuation and abatements and 
161.32  settlements of taxes, examine the real or personal property 
161.33  involved, and submit written reports and recommendations with 
161.34  respect to the applications, in such form as may be prescribed 
161.35  by the board of county commissioners and commissioner of revenue.
161.36     (11) (12) To make diligent search each year for real and 
162.1   personal property which has been omitted from assessment in the 
162.2   county, and report all such omissions to the county auditor. 
162.3      (12) (13) To regularly confer with county assessors in all 
162.4   adjacent counties about the assessment of property in order to 
162.5   uniformly assess and equalize the value of similar properties 
162.6   and classes of property located in adjacent counties.  The 
162.7   conference shall emphasize the assessment of agricultural and 
162.8   commercial and industrial property or other properties that may 
162.9   have an inadequate number of sales in a single county. 
162.10     (13) (14) To render such other services pertaining to the 
162.11  assessment of real and personal property in the county as are 
162.12  not inconsistent with the duties set forth in this section, and 
162.13  as may be required by the board of county commissioners or by 
162.14  the commissioner of revenue. 
162.15     (14) (15) To maintain a record, in conjunction with other 
162.16  county offices, of all transfers of property to assist in 
162.17  determining the proper classification of property, including but 
162.18  not limited to, transferring homestead property and name changes 
162.19  on homestead property. 
162.20     (15) (16) To determine if a homestead application is 
162.21  required due to the transfer of homestead property or an owner's 
162.22  name change on homestead property. 
162.23     [EFFECTIVE DATE.] This section is effective July 1, 2001, 
162.24  and thereafter. 
162.25     Sec. 22.  [273.0755] [TRAINING AND EDUCATION OF PROPERTY 
162.26  TAX PERSONNEL.] 
162.27     (a) Beginning with the four-year period starting on July 1, 
162.28  2000, every person licensed by the state board of assessors at 
162.29  the Accredited Minnesota Assessor level or higher, shall 
162.30  successfully complete at least once in every four-year period a 
162.31  week-long Minnesota laws course sponsored by the department of 
162.32  revenue.  An assessor need not attend the course if they 
162.33  successfully pass the test for the course. 
162.34     (b) The commissioner of revenue may require that each 
162.35  county, and each city for which the city assessor performs the 
162.36  duties of county assessor, have (i) a person on the assessor's 
163.1   staff who is certified by the department of revenue in sales 
163.2   ratio calculations, (ii) an officer or employee who is certified 
163.3   by the department of revenue in tax calculations, and (iii) an 
163.4   officer or employee who is certified by the department of 
163.5   revenue in the proper preparation of abstracts of assessment.  
163.6   The commissioner of revenue may require that each county have an 
163.7   officer or employee who is certified by the department of 
163.8   revenue in the proper preparation of abstracts of tax lists. 
163.9      [EFFECTIVE DATE.] This section is effective July 1, 2001, 
163.10  and thereafter. 
163.11     Sec. 23.  Minnesota Statutes 2000, section 273.11, 
163.12  subdivision 14, is amended to read: 
163.13     Subd. 14.  [VACANT LAND METROPOLITAN AREA PLATTED ON OR 
163.14  AFTER AUGUST 1, 1991 VACANT LAND.] (a) All land platted on or 
163.15  after August 1, 1991, and located in the metropolitan area that 
163.16  is not improved with a permanent structure, shall be assessed as 
163.17  provided in this subdivision when platted.  For purposes of this 
163.18  subdivision, and subdivision 14a, the "metropolitan area" 
163.19  includes the counties of Anoka, Carver, Chisago, Dakota, 
163.20  Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington, and 
163.21  Wright.  The assessor shall determine the market value of each 
163.22  individual lot based upon the highest and best use of the 
163.23  property as unplatted land.  In establishing the market value of 
163.24  the property, the assessor shall consider the sale price of the 
163.25  unplatted land or comparable sales of unplatted land of similar 
163.26  use and similar availability of public utilities. 
163.27     (b) The market value determined in paragraph (a) shall be 
163.28  increased as follows for each of the three assessment years 
163.29  immediately following the final approval of the plat:  one-third 
163.30  of the difference between the property's unplatted market value 
163.31  as determined under paragraph (a) and the market value based 
163.32  upon the highest and best use of the land as platted property 
163.33  shall be added in each of the three subsequent assessment years. 
163.34     (c) Any increase in market value after the first assessment 
163.35  year following the plat's final approval shall be added to the 
163.36  property's market value in the next assessment year.  
164.1   Notwithstanding paragraph (b), if construction begins before the 
164.2   expiration of the three years in paragraph (b), that lot shall 
164.3   be eligible for revaluation in the next assessment year.  The 
164.4   market value of a platted lot determined under this subdivision 
164.5   shall not exceed the value of that lot based upon the highest 
164.6   and best use of the property as platted land. 
164.7      [EFFECTIVE DATE.] This section is effective for land 
164.8   platted after July 31, 2001. 
164.9      Sec. 24.  Minnesota Statutes 2000, section 273.11, is 
164.10  amended by adding a subdivision to read: 
164.11     Subd. 14a.  [VACANT NONMETROPOLITAN AREA PLATTED LAND.] (a) 
164.12  All land that is located outside the metropolitan area defined 
164.13  in subdivision 14, and not improved with a permanent structure, 
164.14  shall be assessed as provided in this subdivision when platted.  
164.15  The assessor shall determine the market value of each individual 
164.16  lot based upon the highest and best use of the property as 
164.17  unplatted land.  In establishing the market value of the 
164.18  property, the assessor shall consider the sale price of the 
164.19  unplatted land or comparable sales of unplatted land of similar 
164.20  use and similar availability of public utilities. 
164.21     (b) The market value determined in paragraph (a) shall be 
164.22  increased as follows for each of the ten assessment years 
164.23  immediately following the final approval of the plat:  one-tenth 
164.24  of the difference between the property's unplatted market value 
164.25  as determined under paragraph (a) and the market value based 
164.26  upon the highest and best use of the land as platted property 
164.27  shall be added in each of the ten subsequent assessment years. 
164.28     (c) Any increase in market value after the first assessment 
164.29  year following the plat's final approval shall be added to the 
164.30  property's market value in the next assessment year.  
164.31  Notwithstanding paragraph (b), if construction begins before the 
164.32  expiration of the ten years in paragraph (b), that lot shall be 
164.33  eligible for revaluation in the next assessment year.  The 
164.34  market value of a platted lot determined under this subdivision 
164.35  shall not exceed the value of that lot based upon the highest 
164.36  and best use of the property as platted land.  
165.1      [EFFECTIVE DATE.] This section is effective for land 
165.2   platted after July 31, 2001. 
165.3      Sec. 25.  [273.1115] [HOMESTEAD RESORTS; VALUATION AND 
165.4   DEFERMENT.] 
165.5      Subdivision 1.  [REQUIREMENTS.] Real property qualifying 
165.6   for classification as class 1c under section 273.13, subdivision 
165.7   22, paragraph (c), is entitled to valuation and tax deferment 
165.8   under this section, provided that if part of a resort is not 
165.9   classified as class 1c, only that portion of the value of the 
165.10  property that is classified as class 1c property qualifies under 
165.11  this section. 
165.12     Subd. 2.  [DETERMINATION OF VALUE.] Upon timely application 
165.13  by the owner, as provided in subdivision 4, the value of real 
165.14  property described in subdivision 1 must be determined by the 
165.15  assessor solely with reference to its classification value as 
165.16  class 1c property, notwithstanding sections 272.03, subdivision 
165.17  8, and 273.11.  The assessor shall not consider any added values 
165.18  resulting from other factors. 
165.19     Subd. 3.  [SEPARATE DETERMINATION OF MARKET VALUE AND TAX.] 
165.20  The assessor shall, however, make a separate determination of 
165.21  the market value of the real estate.  The assessor shall record 
165.22  on the property assessment records the tax based upon the 
165.23  appropriate local tax rate applicable to the property in the 
165.24  taxing district. 
165.25     Subd. 4.  [APPLICATION.] Application for deferment of taxes 
165.26  and assessment under this section must be filed by May 1 of the 
165.27  year prior to the year in which the taxes are payable.  The 
165.28  application must be filed with the assessor of the taxing 
165.29  district in which the real property is located on a form 
165.30  prescribed by the commissioner of revenue.  The assessor may 
165.31  require proof by affidavit or otherwise that the property 
165.32  qualifies under subdivision 1.  An application approved by the 
165.33  assessor continues in effect for subsequent years until the 
165.34  property no longer qualifies under subdivision 1. 
165.35     Subd. 5.  [ADDITIONAL TAXES.] When real property valued and 
165.36  assessed under this section no longer qualifies under 
166.1   subdivision 1, the portion no longer qualifying is subject to 
166.2   additional taxes, in the amount equal to the difference between 
166.3   the taxes determined in accordance with subdivision 2, and the 
166.4   amount determined under subdivision 3, provided, however, that 
166.5   the amount determined under subdivision 3 must not be greater 
166.6   than it would have been had the actual bona fide sale price of 
166.7   the real property at an arms length transaction been used in 
166.8   lieu of the market value determined under subdivision 3.  The 
166.9   additional taxes must be extended against the property on the 
166.10  tax list for the current year, except that no interest or 
166.11  penalties may be levied on the additional taxes if timely paid, 
166.12  and except that the additional taxes must only be levied with 
166.13  respect to the last three years that the property has been 
166.14  valued and assessed under this section. 
166.15     Subd. 6.  [LIEN.] The tax imposed by this section is a lien 
166.16  on the property assessed to the same extent and for the same 
166.17  duration as other taxes imposed on property within this state.  
166.18  The tax must be annually extended by the county auditor and when 
166.19  payable must be collected and distributed in the manner provided 
166.20  by law for the collection and distribution of other property 
166.21  taxes. 
166.22     Subd. 7.  [SPECIAL LOCAL ASSESSMENTS.] The payment of 
166.23  special local assessments levied after June 30, 2001, for 
166.24  improvements made to any real property described in subdivision 
166.25  2, together with the interest thereon must, on timely 
166.26  application under subdivision 4, be deferred as long as the 
166.27  property qualifies under subdivision 1.  If special assessments 
166.28  against the property have been deferred under this subdivision, 
166.29  the governmental unit shall file with the county recorder in the 
166.30  county in which the property is located a certificate containing 
166.31  the legal description of the affected property and of the amount 
166.32  deferred.  When the property no longer qualifies under 
166.33  subdivision 1, all deferred special assessments plus interest 
166.34  are payable in equal installments spread over the time remaining 
166.35  until the last maturity date of the bonds issued to finance the 
166.36  improvement for which the assessments were levied.  If the bonds 
167.1   have matured, the deferred special assessments plus interest are 
167.2   payable within 90 days.  The provisions of section 429.061, 
167.3   subdivision 2, apply to the collection of these installments.  
167.4   Penalty must not be levied on the special assessments if timely 
167.5   paid. 
167.6      Subd. 8.  [CONTINUATION OF TAX TREATMENT UPON SALE.] When 
167.7   real property qualifying under subdivision 1 is sold, no 
167.8   additional taxes or deferred special assessments plus interest 
167.9   may be extended against the property if: 
167.10     (1) the property continues to qualify pursuant to 
167.11  subdivision 1; and 
167.12     (2) the new owner files an application for continued 
167.13  deferment within 30 days after the sale. 
167.14     Subd. 9.  [APPLICABILITY OF SPECIAL ASSESSMENT PROVISIONS.] 
167.15  This section applies to special local assessments levied after 
167.16  June 30, 2001, and payable in the years thereafter, but shall 
167.17  not apply to any special assessments levied at any time by a 
167.18  county or district court under the provisions of chapter 116A. 
167.19     [EFFECTIVE DATE.] This section is effective for taxes 
167.20  levied in 2001, payable in 2002, and thereafter.  For 
167.21  applications for taxes payable in 2002 only, the application 
167.22  deadline in subdivision 4 is extended to August 1, 2001. 
167.23     Sec. 26.  Minnesota Statutes 2000, section 273.121, is 
167.24  amended to read: 
167.25     273.121 [VALUATION OF REAL PROPERTY, NOTICE.] 
167.26     Any county assessor or city assessor having the powers of a 
167.27  county assessor, valuing or classifying taxable real property 
167.28  shall in each year notify those persons whose property is to be 
167.29  assessed or reclassified included on the assessment roll that 
167.30  year if the person's address is known to the assessor, otherwise 
167.31  the occupant of the property.  The notice shall be in writing 
167.32  and shall be sent by ordinary mail at least ten days before the 
167.33  meeting of the local board of review or equalization under 
167.34  section 274.01 or the review process established under section 
167.35  274.13, subdivision 1c.  It shall contain:  (1) the market value 
167.36  for the current and the prior assessment, (2) the limited market 
168.1   value under section 273.11, subdivision 1a for the current and 
168.2   the prior assessment, (3) the qualifying amount of any 
168.3   improvements under section 273.11, subdivision 16 for the 
168.4   current assessment, (4) the market value subject to taxation 
168.5   after subtracting the amount of any qualifying improvements for 
168.6   the current assessment, (5) the new classification of the 
168.7   property for the current and prior assessment, (6) a note that 
168.8   if the property is homestead and at least 35 years old, 
168.9   improvements made to the property may be eligible for a 
168.10  valuation exclusion under section 273.11, subdivision 16, (7) 
168.11  the assessor's office address, and (8) the dates, places, and 
168.12  times set for the meetings of the local board of review or 
168.13  equalization, the review process established under section 
168.14  274.13, subdivision 1c, and the county board of appeal and 
168.15  equalization.  If the assessment roll is not complete, the 
168.16  notice shall be sent by ordinary mail at least ten days prior to 
168.17  the date on which the board of review has adjourned The 
168.18  commissioner of revenue shall specify the form of the notice.  
168.19  The assessor shall attach to the assessment roll a statement 
168.20  that the notices required by this section have been mailed.  Any 
168.21  assessor who is not provided sufficient funds from the 
168.22  assessor's governing body to provide such notices, may make 
168.23  application to the commissioner of revenue to finance such 
168.24  notices.  The commissioner of revenue shall conduct an 
168.25  investigation and, if satisfied that the assessor does not have 
168.26  the necessary funds, issue a certification to the commissioner 
168.27  of finance of the amount necessary to provide such notices.  The 
168.28  commissioner of finance shall issue a warrant for such amount 
168.29  and shall deduct such amount from any state payment to such 
168.30  county or municipality.  The necessary funds to make such 
168.31  payments are hereby appropriated.  Failure to receive the notice 
168.32  shall in no way affect the validity of the assessment, the 
168.33  resulting tax, the procedures of any board of review or 
168.34  equalization, or the enforcement of delinquent taxes by 
168.35  statutory means. 
168.36     [EFFECTIVE DATE.] This section is effective for notices 
169.1   required to be mailed in 2002 and thereafter. 
169.2      Sec. 27.  Minnesota Statutes 2000, section 273.124, 
169.3   subdivision 1, is amended to read: 
169.4      Subdivision 1.  [GENERAL RULE.] (a) Residential real estate 
169.5   that is occupied and used for the purposes of a homestead by its 
169.6   owner, who must be a Minnesota resident, is a residential 
169.7   homestead.  
169.8      Agricultural land, as defined in section 273.13, 
169.9   subdivision 23, that is occupied and used as a homestead by its 
169.10  owner, who must be a Minnesota resident, is an agricultural 
169.11  homestead. 
169.12     Dates for establishment of a homestead and homestead 
169.13  treatment provided to particular types of property are as 
169.14  provided in this section.  
169.15     Property held by a trustee under a trust is eligible for 
169.16  homestead classification if the requirements under this chapter 
169.17  are satisfied. 
169.18     The assessor shall require proof, as provided in 
169.19  subdivision 13, of the facts upon which classification as a 
169.20  homestead may be determined.  Notwithstanding any other law, the 
169.21  assessor may at any time require a homestead application to be 
169.22  filed in order to verify that any property classified as a 
169.23  homestead continues to be eligible for homestead status.  
169.24  Notwithstanding any other law to the contrary, the department of 
169.25  revenue may, upon request from an assessor, verify whether an 
169.26  individual who is requesting or receiving homestead 
169.27  classification has filed a Minnesota income tax return as a 
169.28  resident for the most recent taxable year for which the 
169.29  information is available. 
169.30     When there is a name change or a transfer of homestead 
169.31  property, the assessor may reclassify the property in the next 
169.32  assessment unless a homestead application is filed to verify 
169.33  that the property continues to qualify for homestead 
169.34  classification. 
169.35     (b) For purposes of this section, homestead property shall 
169.36  include property which is used for purposes of the homestead but 
170.1   is separated from the homestead by a road, street, lot, 
170.2   waterway, or other similar intervening property.  The term "used 
170.3   for purposes of the homestead" shall include but not be limited 
170.4   to uses for gardens, garages, or other outbuildings commonly 
170.5   associated with a homestead, but shall not include vacant land 
170.6   held primarily for future development.  In order to receive 
170.7   homestead treatment for the noncontiguous property, the owner 
170.8   must use the property for the purposes of the homestead, and 
170.9   must apply to the assessor, both by the deadlines given in 
170.10  subdivision 9.  After initial qualification for the homestead 
170.11  treatment, additional applications for subsequent years are not 
170.12  required. 
170.13     (c) Residential real estate that is occupied and used for 
170.14  purposes of a homestead by a relative of the owner is a 
170.15  homestead but only to the extent of the homestead treatment that 
170.16  would be provided if the related owner occupied the property.  
170.17  For purposes of this paragraph and paragraph (g), "relative" 
170.18  means a parent, stepparent, child, stepchild, grandparent, 
170.19  grandchild, brother, sister, uncle, aunt, nephew, or niece.  
170.20  This relationship may be by blood or marriage.  Property that 
170.21  has been classified as seasonal recreational residential 
170.22  property at any time during which it has been owned by the 
170.23  current owner or spouse of the current owner will not be 
170.24  reclassified as a homestead unless it is occupied as a homestead 
170.25  by the owner; this prohibition also applies to property that, in 
170.26  the absence of this paragraph, would have been classified as 
170.27  seasonal recreational residential property at the time when the 
170.28  residence was constructed.  Neither the related occupant nor the 
170.29  owner of the property may claim a property tax refund under 
170.30  chapter 290A for a homestead occupied by a relative.  In the 
170.31  case of a residence located on agricultural land, only the 
170.32  house, garage, and immediately surrounding one acre of land 
170.33  shall be classified as a homestead under this paragraph, except 
170.34  as provided in paragraph (d). 
170.35     (d) Agricultural property that is occupied and used for 
170.36  purposes of a homestead by a relative of the owner, is a 
171.1   homestead, only to the extent of the homestead treatment that 
171.2   would be provided if the related owner occupied the property, 
171.3   and only if all of the following criteria are met: 
171.4      (1) the relative who is occupying the agricultural property 
171.5   is a son, daughter, grandson, granddaughter, father, or mother 
171.6   of the owner of the agricultural property or a son, daughter, 
171.7   grandson, or granddaughter of the spouse of the owner of the 
171.8   agricultural property; 
171.9      (2) the owner of the agricultural property must be a 
171.10  Minnesota resident; 
171.11     (3) the owner of the agricultural property must not receive 
171.12  homestead treatment on any other agricultural property in 
171.13  Minnesota; and 
171.14     (4) the owner of the agricultural property is limited to 
171.15  only one agricultural homestead per family under this paragraph. 
171.16     Neither the related occupant nor the owner of the property 
171.17  may claim a property tax refund under chapter 290A for a 
171.18  homestead occupied by a relative qualifying under this 
171.19  paragraph.  For purposes of this paragraph, "agricultural 
171.20  property" means the house, garage, other farm buildings and 
171.21  structures, and agricultural land. 
171.22     Application must be made to the assessor by the owner of 
171.23  the agricultural property to receive homestead benefits under 
171.24  this paragraph.  The assessor may require the necessary proof 
171.25  that the requirements under this paragraph have been met. 
171.26     (e) In the case of property owned by a property owner who 
171.27  is married, the assessor must not deny homestead treatment in 
171.28  whole or in part if only one of the spouses occupies the 
171.29  property and the other spouse is absent due to:  (1) marriage 
171.30  dissolution proceedings, (2) legal separation, (3) employment or 
171.31  self-employment in another location, or (4) other personal 
171.32  circumstances causing the spouses to live separately, not 
171.33  including an intent to obtain two homestead classifications for 
171.34  property tax purposes.  To qualify under clause (3), the 
171.35  spouse's place of employment or self-employment must be at least 
171.36  50 miles distant from the other spouse's place of employment, 
172.1   and the homesteads must be at least 50 miles distant from each 
172.2   other.  Homestead treatment, in whole or in part, shall not be 
172.3   denied to the owner's spouse who previously occupied the 
172.4   residence with the owner if the absence of the owner is due to 
172.5   one of the exceptions provided in this paragraph. 
172.6      (f) The assessor must not deny homestead treatment in whole 
172.7   or in part if: 
172.8      (1) in the case of a property owner who is not married, the 
172.9   owner is absent due to residence in a nursing home or, boarding 
172.10  care facility, or an elderly assisted living facility property 
172.11  as defined in section 273.13, subdivision 25a, and the property 
172.12  is not otherwise occupied; or 
172.13     (2) in the case of a property owner who is married, the 
172.14  owner or the owner's spouse or both are absent due to residence 
172.15  in a nursing home or, boarding care facility, or an elderly 
172.16  assisted living facility property as defined in section 273.13, 
172.17  subdivision 25a, and the property is not occupied or is occupied 
172.18  only by the owner's spouse. 
172.19     (g) If an individual is purchasing property with the intent 
172.20  of claiming it as a homestead and is required by the terms of 
172.21  the financing agreement to have a relative shown on the deed as 
172.22  a coowner, the assessor shall allow a full homestead 
172.23  classification.  This provision only applies to first-time 
172.24  purchasers, whether married or single, or to a person who had 
172.25  previously been married and is purchasing as a single individual 
172.26  for the first time.  The application for homestead benefits must 
172.27  be on a form prescribed by the commissioner and must contain the 
172.28  data necessary for the assessor to determine if full homestead 
172.29  benefits are warranted. 
172.30     (h) If residential or agricultural real estate is occupied 
172.31  and used for purposes of a homestead by a child of a deceased 
172.32  owner and the property is subject to jurisdiction of probate 
172.33  court, the child shall receive relative homestead classification 
172.34  under paragraph (c) or (d) to the same extent they would be 
172.35  entitled to it if the owner was still living, until the probate 
172.36  is completed.  For purposes of this paragraph, "child" includes 
173.1   a relationship by blood or by marriage. 
173.2      [EFFECTIVE DATE.] This section is effective for taxes 
173.3   levied in 2001, payable in 2002, and thereafter. 
173.4      Sec. 28.  Minnesota Statutes 2000, section 273.124, 
173.5   subdivision 14, is amended to read: 
173.6      Subd. 14.  [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.] 
173.7   (a) Real estate of less than ten acres that is the homestead of 
173.8   its owner must be classified as class 2a under section 273.13, 
173.9   subdivision 23, paragraph (a), if:  
173.10     (1) the parcel on which the house is located is contiguous 
173.11  on at least two sides to (i) agricultural land, (ii) land owned 
173.12  or administered by the United States Fish and Wildlife Service, 
173.13  or (iii) land administered by the department of natural 
173.14  resources on which in lieu taxes are paid under sections 477A.11 
173.15  to 477A.14; 
173.16     (2) its owner also owns a noncontiguous parcel of 
173.17  agricultural land that is at least 20 acres; 
173.18     (3) the noncontiguous land is located not farther than four 
173.19  townships or cities, or a combination of townships or cities 
173.20  from the homestead; and 
173.21     (4) the agricultural use value of the noncontiguous land 
173.22  and farm buildings is equal to at least 50 percent of the market 
173.23  value of the house, garage, and one acre of land. 
173.24     Homesteads initially classified as class 2a under the 
173.25  provisions of this paragraph shall remain classified as class 
173.26  2a, irrespective of subsequent changes in the use of adjoining 
173.27  properties, as long as the homestead remains under the same 
173.28  ownership, the owner owns a noncontiguous parcel of agricultural 
173.29  land that is at least 20 acres, and the agricultural use value 
173.30  qualifies under clause (4).  Homestead classification under this 
173.31  paragraph is limited to property that qualified under this 
173.32  paragraph for the 1998 assessment. 
173.33     (b)(i) Agricultural property consisting of at least 40 
173.34  acres shall be classified as the owner's homestead, to the same 
173.35  extent as other agricultural homestead property, if all of the 
173.36  following criteria are met: 
174.1      (1) the owner, or the owner's son or daughter, is actively 
174.2   farming the agricultural property; 
174.3      (2) the owner of the agricultural property is a Minnesota 
174.4   resident, and if the owner's son or daughter is actively farming 
174.5   the agricultural property under clause (1), that person must 
174.6   also be a Minnesota resident; 
174.7      (3) neither the owner nor the spouse of the owner claims 
174.8   another agricultural homestead in Minnesota; and 
174.9      (4) neither the owner does not live nor the person actively 
174.10  farming the property lives farther than four townships or 
174.11  cities, or a combination of four townships or cities, from the 
174.12  agricultural property, and except that if the owner's son or 
174.13  daughter is actively farming the agricultural property under 
174.14  clause (1), that person must also live within the owner or the 
174.15  owner's spouse is required to live in employer-provided housing, 
174.16  the owner or owner's spouse, whichever is actively farming the 
174.17  agricultural property, may live more than four townships or 
174.18  cities, or combination of four townships or cities from the 
174.19  agricultural property. 
174.20     The relationship under this paragraph may be either by 
174.21  blood or marriage. 
174.22     (ii) Property containing the residence of an owner who owns 
174.23  qualified property under clause (i) shall be classified as part 
174.24  of the owner's agricultural homestead, if that property is also 
174.25  used for noncommercial storage or drying of agricultural crops. 
174.26     (c) Except as provided in paragraph (e), noncontiguous land 
174.27  shall be included as part of a homestead under section 273.13, 
174.28  subdivision 23, paragraph (a), only if the homestead is 
174.29  classified as class 2a and the detached land is located in the 
174.30  same township or city, or not farther than four townships or 
174.31  cities or combination thereof from the homestead.  Any taxpayer 
174.32  of these noncontiguous lands must notify the county assessor 
174.33  that the noncontiguous land is part of the taxpayer's homestead, 
174.34  and, if the homestead is located in another county, the taxpayer 
174.35  must also notify the assessor of the other county. 
174.36     (d) Agricultural land used for purposes of a homestead and 
175.1   actively farmed by a person holding a vested remainder interest 
175.2   in it must be classified as a homestead under section 273.13, 
175.3   subdivision 23, paragraph (a).  If agricultural land is 
175.4   classified class 2a, any other dwellings on the land used for 
175.5   purposes of a homestead by persons holding vested remainder 
175.6   interests who are actively engaged in farming the property, and 
175.7   up to one acre of the land surrounding each homestead and 
175.8   reasonably necessary for the use of the dwelling as a home, must 
175.9   also be assessed class 2a. 
175.10     (e) Agricultural land and buildings that were class 2a 
175.11  homestead property under section 273.13, subdivision 23, 
175.12  paragraph (a), for the 1997 assessment shall remain classified 
175.13  as agricultural homesteads for subsequent assessments if:  
175.14     (1) the property owner abandoned the homestead dwelling 
175.15  located on the agricultural homestead as a result of the April 
175.16  1997 floods; 
175.17     (2) the property is located in the county of Polk, Clay, 
175.18  Kittson, Marshall, Norman, or Wilkin; 
175.19     (3) the agricultural land and buildings remain under the 
175.20  same ownership for the current assessment year as existed for 
175.21  the 1997 assessment year and continue to be used for 
175.22  agricultural purposes; 
175.23     (4) the dwelling occupied by the owner is located in 
175.24  Minnesota and is within 30 miles of one of the parcels of 
175.25  agricultural land that is owned by the taxpayer; and 
175.26     (5) the owner notifies the county assessor that the 
175.27  relocation was due to the 1997 floods, and the owner furnishes 
175.28  the assessor any information deemed necessary by the assessor in 
175.29  verifying the change in dwelling.  Further notifications to the 
175.30  assessor are not required if the property continues to meet all 
175.31  the requirements in this paragraph and any dwellings on the 
175.32  agricultural land remain uninhabited. 
175.33     (f) Agricultural land and buildings that were class 2a 
175.34  homestead property under section 273.13, subdivision 23, 
175.35  paragraph (a), for the 1998 assessment shall remain classified 
175.36  agricultural homesteads for subsequent assessments if: 
176.1      (1) the property owner abandoned the homestead dwelling 
176.2   located on the agricultural homestead as a result of damage 
176.3   caused by a March 29, 1998, tornado; 
176.4      (2) the property is located in the county of Blue Earth, 
176.5   Brown, Cottonwood, LeSueur, Nicollet, Nobles, or Rice; 
176.6      (3) the agricultural land and buildings remain under the 
176.7   same ownership for the current assessment year as existed for 
176.8   the 1998 assessment year; 
176.9      (4) the dwelling occupied by the owner is located in this 
176.10  state and is within 50 miles of one of the parcels of 
176.11  agricultural land that is owned by the taxpayer; and 
176.12     (5) the owner notifies the county assessor that the 
176.13  relocation was due to a March 29, 1998, tornado, and the owner 
176.14  furnishes the assessor any information deemed necessary by the 
176.15  assessor in verifying the change in homestead dwelling.  For 
176.16  taxes payable in 1999, the owner must notify the assessor by 
176.17  December 1, 1998.  Further notifications to the assessor are not 
176.18  required if the property continues to meet all the requirements 
176.19  in this paragraph and any dwellings on the agricultural land 
176.20  remain uninhabited. 
176.21     (g) Agricultural property consisting of at least 40 acres 
176.22  of a family farm corporation, joint farm venture, limited 
176.23  liability company, or partnership as described under subdivision 
176.24  8 shall be classified homestead, to the same extent as other 
176.25  agricultural homestead property, if all of the following 
176.26  criteria are met: 
176.27     (1) the shareholder, member, or partner is actively farming 
176.28  the agricultural property; 
176.29     (2) the shareholder, member, or partner of the agricultural 
176.30  property is a Minnesota resident; 
176.31     (3) neither the shareholder, member, or partner, nor the 
176.32  spouse of the shareholder, member, or partner claims another 
176.33  agricultural homestead in Minnesota; and 
176.34     (4) the shareholder, member, or partner does not live 
176.35  farther than four townships or cities, or a combination of four 
176.36  townships or cities, from the agricultural property. 
177.1      [EFFECTIVE DATE.] This section is effective for the 2001 
177.2   assessment for taxes payable in 2002 and thereafter. 
177.3      Sec. 29.  Minnesota Statutes 2000, section 273.13, 
177.4   subdivision 23, is amended to read: 
177.5      Subd. 23.  [CLASS 2.] (a) Class 2a property is agricultural 
177.6   land including any improvements that is homesteaded.  The market 
177.7   value of the house and garage and immediately surrounding one 
177.8   acre of land has the same class rates as class 1a property under 
177.9   subdivision 22.  The value of the remaining land including 
177.10  improvements up to $115,000 has a net class rate of 0.35 percent 
177.11  of market value.  The value of class 2a property over $115,000 
177.12  of market value up to and including $600,000 market value has a 
177.13  net class rate of 0.8 percent of market value.  The remaining 
177.14  property over $600,000 market value has a class rate of 1.20 
177.15  percent of market value. 
177.16     (b) Class 2b property is (1) real estate, rural in 
177.17  character and used exclusively for growing trees for timber, 
177.18  lumber, and wood and wood products; (2) real estate that is not 
177.19  improved with a structure and is used exclusively for growing 
177.20  trees for timber, lumber, and wood and wood products, if the 
177.21  owner has participated or is participating in a cost-sharing 
177.22  program for afforestation, reforestation, or timber stand 
177.23  improvement on that particular property, administered or 
177.24  coordinated by the commissioner of natural resources; (3) real 
177.25  estate that is nonhomestead agricultural land; or (4) a landing 
177.26  area or public access area of a privately owned public use 
177.27  airport.  Class 2b property has a net class rate of 1.20 percent 
177.28  of market value. 
177.29     (c) Agricultural land as used in this section means 
177.30  contiguous acreage of ten acres or more, used during the 
177.31  preceding year for agricultural purposes.  "Agricultural 
177.32  purposes" as used in this section means the raising or 
177.33  cultivation of agricultural products or enrollment in the 
177.34  Reinvest in Minnesota program under sections 103F.501 to 
177.35  103F.535 or the federal Conservation Reserve Program as 
177.36  contained in Public Law Number 99-198.  Contiguous acreage on 
178.1   the same parcel, or contiguous acreage on an immediately 
178.2   adjacent parcel under the same ownership, may also qualify as 
178.3   agricultural land, but only if it is pasture, timber, waste, 
178.4   unusable wild land, or land included in state or federal farm 
178.5   programs.  Agricultural classification for property shall be 
178.6   determined excluding the house, garage, and immediately 
178.7   surrounding one acre of land, and shall not be based upon the 
178.8   market value of any residential structures on the parcel or 
178.9   contiguous parcels under the same ownership. 
178.10     (d) Real estate, excluding the house, garage, and 
178.11  immediately surrounding one acre of land, of less than ten acres 
178.12  which is exclusively and intensively used for raising or 
178.13  cultivating agricultural products, shall be considered as 
178.14  agricultural land.  
178.15     Land shall be classified as agricultural even if all or a 
178.16  portion of the agricultural use of that property is the leasing 
178.17  to, or use by another person for agricultural purposes. 
178.18     Classification under this subdivision is not determinative 
178.19  for qualifying under section 273.111. 
178.20     The property classification under this section supersedes, 
178.21  for property tax purposes only, any locally administered 
178.22  agricultural policies or land use restrictions that define 
178.23  minimum or maximum farm acreage. 
178.24     (e) The term "agricultural products" as used in this 
178.25  subdivision includes production for sale of:  
178.26     (1) livestock, dairy animals, dairy products, poultry and 
178.27  poultry products, fur-bearing animals, horticultural and nursery 
178.28  stock described in sections 18.44 to 18.61, fruit of all kinds, 
178.29  vegetables, forage, grains, bees, and apiary products by the 
178.30  owner; 
178.31     (2) fish bred for sale and consumption if the fish breeding 
178.32  occurs on land zoned for agricultural use; 
178.33     (3) the commercial boarding of horses if the boarding is 
178.34  done in conjunction with raising or cultivating agricultural 
178.35  products as defined in clause (1); 
178.36     (4) property which is owned and operated by nonprofit 
179.1   organizations used for equestrian activities, excluding racing; 
179.2      (5) game birds and waterfowl bred and raised for use on a 
179.3   shooting preserve licensed under section 97A.115; 
179.4      (6) insects primarily bred to be used as food for 
179.5   animals; and 
179.6      (7) trees, grown for sale as a crop, and not sold for 
179.7   timber, lumber, wood, or wood products; and 
179.8      (8) maple syrup taken from trees grown by a person licensed 
179.9   by the Minnesota department of agriculture under chapter 28A as 
179.10  a food processor. 
179.11     (f) If a parcel used for agricultural purposes is also used 
179.12  for commercial or industrial purposes, including but not limited 
179.13  to:  
179.14     (1) wholesale and retail sales; 
179.15     (2) processing of raw agricultural products or other goods; 
179.16     (3) warehousing or storage of processed goods; and 
179.17     (4) office facilities for the support of the activities 
179.18  enumerated in clauses (1), (2), and (3), 
179.19  the assessor shall classify the part of the parcel used for 
179.20  agricultural purposes as class 1b, 2a, or 2b, whichever is 
179.21  appropriate, and the remainder in the class appropriate to its 
179.22  use.  The grading, sorting, and packaging of raw agricultural 
179.23  products for first sale is considered an agricultural purpose.  
179.24  A greenhouse or other building where horticultural or nursery 
179.25  products are grown that is also used for the conduct of retail 
179.26  sales must be classified as agricultural if it is primarily used 
179.27  for the growing of horticultural or nursery products from seed, 
179.28  cuttings, or roots and occasionally as a showroom for the retail 
179.29  sale of those products.  Use of a greenhouse or building only 
179.30  for the display of already grown horticultural or nursery 
179.31  products does not qualify as an agricultural purpose.  
179.32     The assessor shall determine and list separately on the 
179.33  records the market value of the homestead dwelling and the one 
179.34  acre of land on which that dwelling is located.  If any farm 
179.35  buildings or structures are located on this homesteaded acre of 
179.36  land, their market value shall not be included in this separate 
180.1   determination.  
180.2      (g) To qualify for classification under paragraph (b), 
180.3   clause (4), a privately owned public use airport must be 
180.4   licensed as a public airport under section 360.018.  For 
180.5   purposes of paragraph (b), clause (4), "landing area" means that 
180.6   part of a privately owned public use airport properly cleared, 
180.7   regularly maintained, and made available to the public for use 
180.8   by aircraft and includes runways, taxiways, aprons, and sites 
180.9   upon which are situated landing or navigational aids.  A landing 
180.10  area also includes land underlying both the primary surface and 
180.11  the approach surfaces that comply with all of the following:  
180.12     (i) the land is properly cleared and regularly maintained 
180.13  for the primary purposes of the landing, taking off, and taxiing 
180.14  of aircraft; but that portion of the land that contains 
180.15  facilities for servicing, repair, or maintenance of aircraft is 
180.16  not included as a landing area; 
180.17     (ii) the land is part of the airport property; and 
180.18     (iii) the land is not used for commercial or residential 
180.19  purposes. 
180.20  The land contained in a landing area under paragraph (b), clause 
180.21  (4), must be described and certified by the commissioner of 
180.22  transportation.  The certification is effective until it is 
180.23  modified, or until the airport or landing area no longer meets 
180.24  the requirements of paragraph (b), clause (4).  For purposes of 
180.25  paragraph (b), clause (4), "public access area" means property 
180.26  used as an aircraft parking ramp, apron, or storage hangar, or 
180.27  an arrival and departure building in connection with the airport.
180.28     [EFFECTIVE DATE.] This section is effective for taxes 
180.29  levied in 2001, payable in 2002, and thereafter. 
180.30     Sec. 30.  Minnesota Statutes 2000, section 273.13, 
180.31  subdivision 25, is amended to read: 
180.32     Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
180.33  estate containing four or more units and used or held for use by 
180.34  the owner or by the tenants or lessees of the owner as a 
180.35  residence for rental periods of 30 days or more.  Class 4a also 
180.36  includes hospitals licensed under sections 144.50 to 144.56, 
181.1   other than hospitals exempt under section 272.02, and contiguous 
181.2   property used for hospital purposes, without regard to whether 
181.3   the property has been platted or subdivided.  Class 4a property 
181.4   in a city with a population of 5,000 or less, that is (1) 
181.5   located outside of the metropolitan area, as defined in section 
181.6   473.121, subdivision 2, or outside any county contiguous to the 
181.7   metropolitan area, and (2) whose city boundary is at least 15 
181.8   miles from the boundary of any city with a population greater 
181.9   than 5,000 has a class rate of 2.15 percent of market value.  
181.10  All other class 4a property has a class rate of 2.4 percent of 
181.11  market value.  For purposes of this paragraph, population has 
181.12  the same meaning given in section 477A.011, subdivision 3. 
181.13     (b) Class 4b includes: 
181.14     (1) residential real estate containing less than four units 
181.15  that does not qualify as class 4bb, other than seasonal 
181.16  residential, and recreational; 
181.17     (2) manufactured homes not classified under any other 
181.18  provision; 
181.19     (3) a dwelling, garage, and surrounding one acre of 
181.20  property on a nonhomestead farm classified under subdivision 23, 
181.21  paragraph (b) containing two or three units; 
181.22     (4) unimproved property that is classified residential as 
181.23  determined under subdivision 33.  
181.24     Class 4b property has a class rate of 1.65 percent of 
181.25  market value.  
181.26     (c) Class 4bb includes: 
181.27     (1) nonhomestead residential real estate containing one 
181.28  unit, other than seasonal residential, and recreational; and 
181.29     (2) a single family dwelling, garage, and surrounding one 
181.30  acre of property on a nonhomestead farm classified under 
181.31  subdivision 23, paragraph (b). 
181.32     Class 4bb has a class rate of 1.2 percent on the first 
181.33  $76,000 of market value and a class rate of 1.65 percent of its 
181.34  market value that exceeds $76,000. 
181.35     Property that has been classified as seasonal recreational 
181.36  residential property at any time during which it has been owned 
182.1   by the current owner or spouse of the current owner does not 
182.2   qualify for class 4bb. 
182.3      (d) Class 4c property includes: 
182.4      (1) except as provided in subdivision 22, paragraph (c), 
182.5   real property devoted to temporary and seasonal residential 
182.6   occupancy for recreation purposes, including real property 
182.7   devoted to temporary and seasonal residential occupancy for 
182.8   recreation purposes and not devoted to commercial purposes for 
182.9   more than 250 days in the year preceding the year of 
182.10  assessment.  For purposes of this clause, property is devoted to 
182.11  a commercial purpose on a specific day if any portion of the 
182.12  property is used for residential occupancy, and a fee is charged 
182.13  for residential occupancy.  In order for a property to be 
182.14  classified as class 4c, seasonal recreational residential for 
182.15  commercial purposes, at least 40 percent of the annual gross 
182.16  lodging receipts related to the property must be from business 
182.17  conducted during 90 consecutive days and either (i) at least 60 
182.18  percent of all paid bookings by lodging guests during the year 
182.19  must be for periods of at least two consecutive nights; or (ii) 
182.20  at least 20 percent of the annual gross receipts must be from 
182.21  charges for rental of fish houses, boats and motors, 
182.22  snowmobiles, downhill or cross-country ski equipment, or charges 
182.23  for marina services, launch services, and guide services, or the 
182.24  sale of bait and fishing tackle.  For purposes of this 
182.25  determination, a paid booking of five or more nights shall be 
182.26  counted as two bookings.  Class 4c also includes commercial use 
182.27  real property used exclusively for recreational purposes in 
182.28  conjunction with class 4c property devoted to temporary and 
182.29  seasonal residential occupancy for recreational purposes, up to 
182.30  a total of two acres, provided the property is not devoted to 
182.31  commercial recreational use for more than 250 days in the year 
182.32  preceding the year of assessment and is located within two miles 
182.33  of the class 4c property with which it is used.  Class 4c 
182.34  property classified in this clause also includes the remainder 
182.35  of class 1c resorts provided that the entire property including 
182.36  that portion of the property classified as class 1c also meets 
183.1   the requirements for class 4c under this clause; otherwise the 
183.2   entire property is classified as class 3.  Owners of real 
183.3   property devoted to temporary and seasonal residential occupancy 
183.4   for recreation purposes and all or a portion of which was 
183.5   devoted to commercial purposes for not more than 250 days in the 
183.6   year preceding the year of assessment desiring classification as 
183.7   class 1c or 4c, must submit a declaration to the assessor 
183.8   designating the cabins or units occupied for 250 days or less in 
183.9   the year preceding the year of assessment by January 15 of the 
183.10  assessment year.  Those cabins or units and a proportionate 
183.11  share of the land on which they are located will be designated 
183.12  class 1c or 4c as otherwise provided.  The remainder of the 
183.13  cabins or units and a proportionate share of the land on which 
183.14  they are located will be designated as class 3a.  The owner of 
183.15  property desiring designation as class 1c or 4c property must 
183.16  provide guest registers or other records demonstrating that the 
183.17  units for which class 1c or 4c designation is sought were not 
183.18  occupied for more than 250 days in the year preceding the 
183.19  assessment if so requested.  The portion of a property operated 
183.20  as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 
183.21  nonresidential facility operated on a commercial basis not 
183.22  directly related to temporary and seasonal residential occupancy 
183.23  for recreation purposes shall not qualify for class 1c or 4c; 
183.24     (2) qualified property used as a golf course if: 
183.25     (i) it is open to the public on a daily fee basis.  It may 
183.26  charge membership fees or dues, but a membership fee may not be 
183.27  required in order to use the property for golfing, and its green 
183.28  fees for golfing must be comparable to green fees typically 
183.29  charged by municipal courses; and 
183.30     (ii) it meets the requirements of section 273.112, 
183.31  subdivision 3, paragraph (d). 
183.32     A structure used as a clubhouse, restaurant, or place of 
183.33  refreshment in conjunction with the golf course is classified as 
183.34  class 3a property; 
183.35     (3) real property up to a maximum of one acre of land owned 
183.36  by a nonprofit community service oriented organization; provided 
184.1   that the property is not used for a revenue-producing activity 
184.2   for more than six days in the calendar year preceding the year 
184.3   of assessment and the property is not used for residential 
184.4   purposes on either a temporary or permanent basis.  For purposes 
184.5   of this clause, a "nonprofit community service oriented 
184.6   organization" means any corporation, society, association, 
184.7   foundation, or institution organized and operated exclusively 
184.8   for charitable, religious, fraternal, civic, or educational 
184.9   purposes, and which is exempt from federal income taxation 
184.10  pursuant to section 501(c)(3), (10), or (19) of the Internal 
184.11  Revenue Code of 1986, as amended through December 31, 1990.  For 
184.12  purposes of this clause, "revenue-producing activities" shall 
184.13  include but not be limited to property or that portion of the 
184.14  property that is used as an on-sale intoxicating liquor or 3.2 
184.15  percent malt liquor establishment licensed under chapter 340A, a 
184.16  restaurant open to the public, bowling alley, a retail store, 
184.17  gambling conducted by organizations licensed under chapter 349, 
184.18  an insurance business, or office or other space leased or rented 
184.19  to a lessee who conducts a for-profit enterprise on the 
184.20  premises.  Any portion of the property which is used for 
184.21  revenue-producing activities for more than six days in the 
184.22  calendar year preceding the year of assessment shall be assessed 
184.23  as class 3a.  The use of the property for social events open 
184.24  exclusively to members and their guests for periods of less than 
184.25  24 hours, when an admission is not charged nor any revenues are 
184.26  received by the organization shall not be considered a 
184.27  revenue-producing activity; 
184.28     (4) post-secondary student housing of not more than one 
184.29  acre of land that is owned by a nonprofit corporation organized 
184.30  under chapter 317A and is used exclusively by a student 
184.31  cooperative, sorority, or fraternity for on-campus housing or 
184.32  housing located within two miles of the border of a college 
184.33  campus; 
184.34     (5) manufactured home parks as defined in section 327.14, 
184.35  subdivision 3; 
184.36     (6) real property that is actively and exclusively devoted 
185.1   to indoor fitness, health, social, recreational, and related 
185.2   uses, is owned and operated by a not-for-profit corporation, and 
185.3   is located within the metropolitan area as defined in section 
185.4   473.121, subdivision 2; and 
185.5      (7) a leased or privately owned noncommercial aircraft 
185.6   storage hangar not exempt under section 272.01, subdivision 2, 
185.7   and the land on which it is located, provided that: 
185.8      (i) the land is on an airport owned or operated by a city, 
185.9   town, county, metropolitan airports commission, or group 
185.10  thereof; and 
185.11     (ii) the land lease, or any ordinance or signed agreement 
185.12  restricting the use of the leased premise, prohibits commercial 
185.13  activity performed at the hangar. 
185.14     If a hangar classified under this clause is sold after June 
185.15  30, 2000, a bill of sale must be filed by the new owner with the 
185.16  assessor of the county where the property is located within 60 
185.17  days of the sale; and 
185.18     (8) property or a portion of a property that is being used 
185.19  exclusively as a licensed child care provider facility under 
185.20  Minnesota Rules, parts 9503.0005 to 9503.0170 (Rule 3). 
185.21     Class 4c property has a class rate of 1.65 percent of 
185.22  market value, except that (i) each parcel of seasonal 
185.23  residential recreational property not used for commercial 
185.24  purposes has the same class rates as class 4bb property, (ii) 
185.25  manufactured home parks assessed under clause (5) have the same 
185.26  class rate as class 4b property, and (iii) property described in 
185.27  paragraph (d), clause (4), has the same class rate as the rate 
185.28  applicable to the first tier of class 4bb nonhomestead 
185.29  residential real estate under paragraph (c).  
185.30     (e) Class 4d property is qualifying low-income rental 
185.31  housing certified to the assessor by the housing finance agency 
185.32  under sections 273.126 and 462A.071.  Class 4d includes land in 
185.33  proportion to the total market value of the building that is 
185.34  qualifying low-income rental housing.  For all properties 
185.35  qualifying as class 4d, the market value determined by the 
185.36  assessor must be based on the normal approach to value using 
186.1   normal unrestricted rents. 
186.2      Class 4d property has a class rate of one percent of market 
186.3   value.  
186.4      [EFFECTIVE DATE.] This section is effective for taxes 
186.5   payable in 2002 and thereafter. 
186.6      Sec. 31.  [273.355] [WIND ENERGY CONVERSION SYSTEMS.] 
186.7      Subdivision 1.  [IN LIEU TAX.] A tax is imposed on 
186.8   production of electricity from a wind energy conversion system 
186.9   used as an electric power source that is installed after January 
186.10  1, 1991.  The tax is in lieu of ad valorem taxes on the wind 
186.11  energy conversion system.  The land on which the wind energy 
186.12  conversion system is located remains taxable. 
186.13     Subd. 2.  [DEFINITIONS.] (a) For the purposes of this 
186.14  section, the term: 
186.15     (1) "wind energy conversion system" has the meaning given 
186.16  that term in section 216C.06, subdivision 12; 
186.17     (2) "large scale wind energy conversion system" means a 
186.18  wind energy conversion system of more than 12 megawatts, as 
186.19  measured by the nameplate capacity of the system or as combined 
186.20  with other systems as provided in paragraph (b); 
186.21     (3) "medium scale wind energy conversion system" means a 
186.22  wind energy conversion system of between two and 12 megawatts, 
186.23  as measured by the nameplate capacity of the system or as 
186.24  combined with other systems as provided in paragraph (b); 
186.25     (4) "small scale wind energy conversion system" means a 
186.26  wind energy conversion system of two megawatts and under, as 
186.27  measured by the nameplate capacity of the system or as combined 
186.28  with other systems as provided in paragraph (b). 
186.29     (b) The total size of a wind energy conversion system under 
186.30  paragraph (a) shall be determined according to this paragraph.  
186.31  Unless the systems are interconnected with different 
186.32  distribution systems, the nameplate capacity of one wind energy 
186.33  conversion system shall be combined with the nameplate capacity 
186.34  of any other wind energy conversion system that is:  (i) located 
186.35  within five miles of the wind energy conversion system; (ii) 
186.36  constructed within the same calendar year as the wind energy 
187.1   conversion system; and (iii) under common ownership.  In the 
187.2   case of a dispute, the commissioner of commerce shall determine 
187.3   the total size of the system, and shall draw all reasonable 
187.4   inferences in favor of combining the systems. 
187.5      (c) In making a determination under paragraph (b), clause 
187.6   (iii), the commissioner of commerce may determine that two wind 
187.7   energy conversion systems are under common ownership when the 
187.8   underlying ownership structure contains similar persons or 
187.9   entities, even if the ownership shares differ between the two 
187.10  systems.  Wind energy conversion systems are not under common 
187.11  ownership solely because the same person or entity provided 
187.12  equity financing for the systems. 
187.13     Subd. 3. [RATE OF TAX.] The owner of a wind energy 
187.14  conversion system shall pay: 
187.15     (1) for a large scale wind energy conversion system, .22 
187.16  cents per kilowatt-hour of electricity produced by the system; 
187.17  and 
187.18     (2) for a medium scale wind energy conversion system, .065 
187.19  cents per kilowatt-hour of electricity produced by the system. 
187.20     Small scale wind energy conversion systems are exempt from 
187.21  taxation under this section. 
187.22     Subd. 4.  [REPORTS.] An owner of a wind energy conversion 
187.23  system subject to tax under this section shall file a report 
187.24  with the commissioner of revenue annually on or before March 1 
187.25  detailing the amount of electricity in kilowatt-hours that was 
187.26  produced by the wind energy conversion system.  The commissioner 
187.27  shall prescribe the form of the report.  The report must contain 
187.28  the information required by the commissioner to determine the 
187.29  tax due to each county under this section for the current year.  
187.30  If an owner of a wind energy conversion system subject to 
187.31  taxation under this section fails to file the report by the due 
187.32  date, the commissioner of revenue shall determine the tax based 
187.33  upon the nameplate capacity of the system multiplied by a 
187.34  capacity factor of 30 percent.  On or before March 31, the 
187.35  commissioner of revenue shall notify the owner of the wind 
187.36  energy conversion systems of the tax due to each county for the 
188.1   current year and shall certify to the county auditor of each 
188.2   county in which the systems are located the tax due from each 
188.3   owner for the current year. 
188.4      Subd. 5.  [PAYMENT OF TAX; COLLECTION.] The taxes as 
188.5   determined by the commissioner of revenue must be contained on 
188.6   the lists of taxes due delivered by the county auditor to the 
188.7   county treasurer.  The taxes must be paid to the county 
188.8   treasurer at the time and in the manner provided for payment of 
188.9   property taxes under section 277.01, subdivision 3, and, if 
188.10  unpaid, are subject to the same enforcement, collection, and 
188.11  interest and penalties as delinquent personal property taxes.  
188.12  Except to the extent inconsistent with this section, the 
188.13  provisions of sections 277.01 to 277.24 and 278.01 to 278.13 
188.14  apply to the taxes imposed under this section, and for purposes 
188.15  of those provisions the taxes imposed under this section are 
188.16  considered personal property taxes. 
188.17     Subd. 6.  [DISTRIBUTION OF REVENUES.] Revenues from the 
188.18  taxes imposed under this section must be part of the settlement 
188.19  between the county treasurer and the county auditor under 
188.20  section 276.09 and apportioned and distributed by the county 
188.21  auditor and the county treasurer to the county, school district, 
188.22  city or town, and special taxing districts in which the property 
188.23  is located, in the same manner and in the same proportion as the 
188.24  other property taxes are apportioned and distributed. 
188.25     [EFFECTIVE DATE.] This section is effective for energy 
188.26  produced by wind energy conversion systems subject to taxation 
188.27  under that section after January 1, 2002. 
188.28     Sec. 32.  Minnesota Statutes 2000, section 274.01, 
188.29  subdivision 1, is amended to read: 
188.30     Subdivision 1.  [ORDINARY BOARD; MEETINGS, DEADLINES, 
188.31  GRIEVANCES.] (a) The town board of a town, or the council or 
188.32  other governing body of a city, is the board of review appeal 
188.33  and equalization except (1) in cities whose charters provide for 
188.34  a board of equalization or (2) in any city or town that has 
188.35  transferred its local board of review power and duties to the 
188.36  county board as provided in subdivision 3.  The county assessor 
189.1   shall fix a day and time when the board or the board of 
189.2   equalization shall meet in the assessment districts of the 
189.3   county.  Notwithstanding any law or city charter to the 
189.4   contrary, a city board of equalization shall be referred to as a 
189.5   board of appeal and equalization.  On or before February 15 of 
189.6   each year the assessor shall give written notice of the time to 
189.7   the city or town clerk.  Notwithstanding the provisions of any 
189.8   charter to the contrary, the meetings must be held between April 
189.9   1 and May 31 each year.  The clerk shall give published and 
189.10  posted notice of the meeting at least ten days before the date 
189.11  of the meeting.  
189.12     If in any county, at least 25 percent of the total net tax 
189.13  capacity of a city or town is noncommercial seasonal residential 
189.14  recreational property classified under section 273.13, 
189.15  subdivision 25, the county must hold two countywide 
189.16  informational meetings on Saturdays.  The meetings will allow 
189.17  noncommercial seasonal residential recreational taxpayers to 
189.18  discuss their property valuation with the appropriate assessment 
189.19  staff.  These Saturday informational meetings must be scheduled 
189.20  to allow the owner of the noncommercial seasonal residential 
189.21  recreational property the opportunity to attend one of the 
189.22  meetings prior to the scheduled board of review for their city 
189.23  or town.  The Saturday meeting dates must be contained on the 
189.24  notice of valuation of real property under section 273.121.  
189.25     The board shall meet at the office of the clerk to review 
189.26  the assessment and classification of property in the town or 
189.27  city.  No changes in valuation or classification which are 
189.28  intended to correct errors in judgment by the county assessor 
189.29  may be made by the county assessor after the board of review has 
189.30  adjourned in those cities or towns that hold a local board of 
189.31  review; however, corrections of errors that are merely clerical 
189.32  in nature or changes that extend homestead treatment to property 
189.33  are permitted after adjournment until the tax extension date for 
189.34  that assessment year.  The changes must be fully documented and 
189.35  maintained in the assessor's office and must be available for 
189.36  review by any person.  A copy of the changes made during this 
190.1   period in those cities or towns that hold a local board of 
190.2   review must be sent to the county board no later than December 
190.3   31 of the assessment year.  
190.4      (b) The board shall determine whether the taxable property 
190.5   in the town or city has been properly placed on the list and 
190.6   properly valued by the assessor.  If real or personal property 
190.7   has been omitted, the board shall place it on the list with its 
190.8   market value, and correct the assessment so that each tract or 
190.9   lot of real property, and each article, parcel, or class of 
190.10  personal property, is entered on the assessment list at its 
190.11  market value.  No assessment of the property of any person may 
190.12  be raised unless the person has been duly notified of the intent 
190.13  of the board to do so.  On application of any person feeling 
190.14  aggrieved, the board shall review the assessment or 
190.15  classification, or both, and correct it as appears just.  The 
190.16  board may not make an individual market value adjustment or 
190.17  classification change that would benefit the property in cases 
190.18  where the owner or other person having control over the property 
190.19  will not permit the assessor to inspect the property and the 
190.20  interior of any buildings or structures.  
190.21     (c) A local board of review may reduce assessments upon 
190.22  petition of the taxpayer but the total reductions must not 
190.23  reduce the aggregate assessment made by the county assessor by 
190.24  more than one percent.  If the total reductions would lower the 
190.25  aggregate assessments made by the county assessor by more than 
190.26  one percent, none of the adjustments may be made.  The assessor 
190.27  shall correct any clerical errors or double assessments 
190.28  discovered by the board of review without regard to the one 
190.29  percent limitation.  
190.30     (d) A majority of the members may act at the meeting, and 
190.31  adjourn from day to day until they finish hearing the cases 
190.32  presented.  The assessor shall attend, with the assessment books 
190.33  and papers, and take part in the proceedings, but must not 
190.34  vote.  The county assessor, or an assistant delegated by the 
190.35  county assessor shall attend the meetings.  The board shall list 
190.36  separately, on a form appended to the assessment book, all 
191.1   omitted property added to the list by the board and all items of 
191.2   property increased or decreased, with the market value of each 
191.3   item of property, added or changed by the board, placed opposite 
191.4   the item.  The county assessor shall enter all changes made by 
191.5   the board in the assessment book.  
191.6      (e) Except as provided in subdivision 3, if a person fails 
191.7   to appear in person, by counsel, or by written communication 
191.8   before the board after being duly notified of the board's intent 
191.9   to raise the assessment of the property, or if a person feeling 
191.10  aggrieved by an assessment or classification fails to apply for 
191.11  a review of the assessment or classification, the person may not 
191.12  appear before the county board of appeal and equalization for a 
191.13  review of the assessment or classification.  This paragraph does 
191.14  not apply if an assessment was made after the local board 
191.15  meeting, as provided in section 273.01, or if the person can 
191.16  establish not having received notice of market value at least 
191.17  five days before the local board of review meeting.  
191.18     (f) The local board of review or the board of equalization 
191.19  must complete its work and adjourn within 20 days from the time 
191.20  of convening stated in the notice of the clerk, unless a longer 
191.21  period is approved by the commissioner of revenue.  No action 
191.22  taken after that date is valid.  All complaints about an 
191.23  assessment or classification made after the meeting of the board 
191.24  must be heard and determined by the county board of 
191.25  equalization.  A nonresident may, at any time, before the 
191.26  meeting of the board of review file written objections to an 
191.27  assessment or classification with the county assessor.  The 
191.28  objections must be presented to the board of review at its 
191.29  meeting by the county assessor for its consideration. 
191.30     [EFFECTIVE DATE.] This section is effective January 1, 
191.31  2002, and thereafter. 
191.32     Sec. 33.  Minnesota Statutes 2000, section 274.13, 
191.33  subdivision 1, is amended to read: 
191.34     Subdivision 1.  [MEMBERS; MEETINGS; RULES FOR EQUALIZING 
191.35  ASSESSMENTS.] The county commissioners, or a majority of them, 
191.36  with the county auditor, or, if the auditor cannot be present, 
192.1   the deputy county auditor, or, if there is no deputy, the court 
192.2   administrator of the district court, shall form a board for the 
192.3   equalization of the assessment of the property of the county, 
192.4   including the property of all cities whose charters provide for 
192.5   a board of equalization.  This board shall be referred to as the 
192.6   county board of appeal and equalization.  The board shall meet 
192.7   annually, on the date specified in section 274.14, at the office 
192.8   of the auditor.  Each member shall take an oath to fairly and 
192.9   impartially perform duties as a member.  The board shall examine 
192.10  and compare the returns of the assessment of property of the 
192.11  towns or districts, and equalize them so that each tract or lot 
192.12  of real property and each article or class of personal property 
192.13  is entered on the assessment list at its market value, subject 
192.14  to the following rules: 
192.15     (1) The board shall raise the valuation of each tract or 
192.16  lot of real property which in its opinion is returned below its 
192.17  market value to the sum believed to be its market value.  The 
192.18  board must first give notice of intention to raise the valuation 
192.19  to the person in whose name it is assessed, if the person is a 
192.20  resident of the county.  The notice must fix a time and place 
192.21  for a hearing.  
192.22     (2) The board shall reduce the valuation of each tract or 
192.23  lot which in its opinion is returned above its market value to 
192.24  the sum believed to be its market value. 
192.25     (3) The board shall raise the valuation of each class of 
192.26  personal property which in its opinion is returned below its 
192.27  market value to the sum believed to be its market value.  It 
192.28  shall raise the aggregate value of the personal property of 
192.29  individuals, firms, or corporations, when it believes that the 
192.30  aggregate valuation, as returned, is less than the market value 
192.31  of the taxable personal property possessed by the individuals, 
192.32  firms, or corporations, to the sum it believes to be the market 
192.33  value.  The board must first give notice to the persons of 
192.34  intention to do so.  The notice must set a time and place for a 
192.35  hearing. 
192.36     (4) The board shall reduce the valuation of each class of 
193.1   personal property that is returned above its market value to the 
193.2   sum it believes to be its market value.  Upon complaint of a 
193.3   party aggrieved, the board shall reduce the aggregate valuation 
193.4   of the individual's personal property, or of any class of 
193.5   personal property for which the individual is assessed, which in 
193.6   its opinion has been assessed at too large a sum, to the sum it 
193.7   believes was the market value of the individual's personal 
193.8   property of that class.  
193.9      (5) The board must not reduce the aggregate value of all 
193.10  the property of its county, as submitted to the county board of 
193.11  equalization, with the additions made by the auditor under this 
193.12  chapter, by more than one percent of its whole valuation.  The 
193.13  board may raise the aggregate valuation of real property, and of 
193.14  each class of personal property, of the county, or of any town 
193.15  or district of the county, when it believes it is below the 
193.16  market value of the property, or class of property, to the 
193.17  aggregate amount it believes to be its market value. 
193.18     (6) The board shall change the classification of any 
193.19  property which in its opinion is not properly classified. 
193.20     [EFFECTIVE DATE.] This section is effective January 1, 
193.21  2002, and thereafter. 
193.22     Sec. 34.  Minnesota Statutes 2000, section 275.065, 
193.23  subdivision 3, is amended to read: 
193.24     Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
193.25  county auditor shall prepare and the county treasurer shall 
193.26  deliver after November 10 and on or before November 24 each 
193.27  year, by first class mail to each taxpayer at the address listed 
193.28  on the county's current year's assessment roll, a notice of 
193.29  proposed property taxes.  
193.30     (b) The commissioner of revenue shall prescribe the form of 
193.31  the notice.  
193.32     (c) The notice must inform taxpayers that it contains the 
193.33  amount of property taxes each taxing authority proposes to 
193.34  collect for taxes payable the following year.  In the case of a 
193.35  town, or in the case of the state determined portion of the 
193.36  school district levy, the final tax amount will be its proposed 
194.1   tax.  In the case of taxing authorities required to hold a 
194.2   public meeting under subdivision 6, the notice must clearly 
194.3   state that each taxing authority, including regional library 
194.4   districts established under section 134.201, and including the 
194.5   metropolitan taxing districts as defined in paragraph (i), but 
194.6   excluding all other special taxing districts and towns, will 
194.7   hold a public meeting to receive public testimony on the 
194.8   proposed budget and proposed or final property tax levy, or, in 
194.9   case of a school district, on the current budget and proposed 
194.10  property tax levy.  It must clearly state the time and place of 
194.11  each taxing authority's meeting, a phone number for the taxing 
194.12  jurisdiction where taxpayers may call if they have questions 
194.13  related to the notice, and an address where comments will be 
194.14  received by mail.  
194.15     (d) The notice must state for each parcel: 
194.16     (1) the market value of the property as determined under 
194.17  section 273.11, and used for computing property taxes payable in 
194.18  the following year and for taxes payable in the current year as 
194.19  each appears in the records of the county assessor on November 1 
194.20  of the current year; and, in the case of residential property, 
194.21  whether the property is classified as homestead or 
194.22  nonhomestead.  The notice must clearly inform taxpayers of the 
194.23  years to which the market values apply and that the values are 
194.24  final values; 
194.25     (2) the items listed below, shown separately by county, 
194.26  city or town, state determined school tax net of the education 
194.27  homestead credit under section 273.1382 275.02, voter approved 
194.28  school levy, other local school levy, and the sum of the special 
194.29  taxing districts, and as a total of all taxing authorities:  
194.30     (i) the actual tax for taxes payable in the current 
194.31  year; and 
194.32     (ii) the tax change due to spending factors, defined as the 
194.33  proposed tax minus the constant spending tax amount; 
194.34     (iii) the tax change due to other factors, defined as the 
194.35  constant spending tax amount minus the actual current year tax; 
194.36  and 
195.1      (iv) the proposed tax amount net of credits. 
195.2      In the case of a town or the state determined school tax, 
195.3   the final tax shall also be its proposed tax unless the town 
195.4   changes its levy at a special town meeting under section 
195.5   365.52.  If a school district has certified under section 
195.6   126C.17, subdivision 9, that a referendum will be held in the 
195.7   school district at the November general election, the county 
195.8   auditor must note next to the school district's proposed amount 
195.9   that a referendum is pending and that, if approved by the 
195.10  voters, the tax amount may be higher than shown on the notice.  
195.11  In the case of the city of Minneapolis, the levy for the 
195.12  Minneapolis library board and the levy for Minneapolis park and 
195.13  recreation shall be listed separately from the remaining amount 
195.14  of the city's levy.  In the case of a parcel where tax increment 
195.15  or the fiscal disparities areawide tax under chapter 276A or 
195.16  473F applies, the proposed tax levy on the captured value or the 
195.17  proposed tax levy on the tax capacity subject to the areawide 
195.18  tax must each be stated separately and not included in the sum 
195.19  of the special taxing districts; and 
195.20     (3) the increase or decrease between the total taxes 
195.21  payable in the current year and the total proposed taxes, 
195.22  expressed as a percentage. 
195.23     For purposes of this section, the amount of the tax on 
195.24  homesteads qualifying under the senior citizens' property tax 
195.25  deferral program under chapter 290B is the total amount of 
195.26  property tax before subtraction of the deferred property tax 
195.27  amount. 
195.28     (e) The notice must clearly state that the proposed or 
195.29  final taxes do not include the following: 
195.30     (1) special assessments; 
195.31     (2) levies approved by the voters after the date the 
195.32  proposed taxes are certified, including bond referenda, school 
195.33  district levy referenda, and levy limit increase referenda; 
195.34     (3) amounts necessary to pay cleanup or other costs due to 
195.35  a natural disaster occurring after the date the proposed taxes 
195.36  are certified; 
196.1      (4) amounts necessary to pay tort judgments against the 
196.2   taxing authority that become final after the date the proposed 
196.3   taxes are certified; and 
196.4      (5) the contamination tax imposed on properties which 
196.5   received market value reductions for contamination. 
196.6      (f) Except as provided in subdivision 7, failure of the 
196.7   county auditor to prepare or the county treasurer to deliver the 
196.8   notice as required in this section does not invalidate the 
196.9   proposed or final tax levy or the taxes payable pursuant to the 
196.10  tax levy. 
196.11     (g) If the notice the taxpayer receives under this section 
196.12  lists the property as nonhomestead, and satisfactory 
196.13  documentation is provided to the county assessor by the 
196.14  applicable deadline, and the property qualifies for the 
196.15  homestead classification in that assessment year, the assessor 
196.16  shall reclassify the property to homestead for taxes payable in 
196.17  the following year. 
196.18     (h) In the case of class 4 residential property used as a 
196.19  residence for lease or rental periods of 30 days or more, the 
196.20  taxpayer must either: 
196.21     (1) mail or deliver a copy of the notice of proposed 
196.22  property taxes to each tenant, renter, or lessee; or 
196.23     (2) post a copy of the notice in a conspicuous place on the 
196.24  premises of the property.  
196.25     The notice must be mailed or posted by the taxpayer by 
196.26  November 27 or within three days of receipt of the notice, 
196.27  whichever is later.  A taxpayer may notify the county treasurer 
196.28  of the address of the taxpayer, agent, caretaker, or manager of 
196.29  the premises to which the notice must be mailed in order to 
196.30  fulfill the requirements of this paragraph. 
196.31     (i) For purposes of this subdivision, subdivisions 5a and 
196.32  6, "metropolitan special taxing districts" means the following 
196.33  taxing districts in the seven-county metropolitan area that levy 
196.34  a property tax for any of the specified purposes listed below: 
196.35     (1) metropolitan council under section 473.132, 473.167, 
196.36  473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 
197.1      (2) metropolitan airports commission under section 473.667, 
197.2   473.671, or 473.672; and 
197.3      (3) metropolitan mosquito control commission under section 
197.4   473.711. 
197.5      For purposes of this section, any levies made by the 
197.6   regional rail authorities in the county of Anoka, Carver, 
197.7   Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
197.8   398A shall be included with the appropriate county's levy and 
197.9   shall be discussed at that county's public hearing. 
197.10     (j) If a statutory or home rule charter city or a town has 
197.11  exercised the local levy option provided by section 473.388, 
197.12  subdivision 7, it may include in the notice of its proposed 
197.13  taxes the amount of its proposed taxes attributable to its 
197.14  exercise of the option.  In the first year of the city or town's 
197.15  exercise of this option, the statement shall include an estimate 
197.16  of the reduction of the metropolitan council's tax on the parcel 
197.17  due to exercise of that option.  The metropolitan council's levy 
197.18  shall be adjusted accordingly. 
197.19     [EFFECTIVE DATE.] This section is effective for notices of 
197.20  proposed property taxes required in 2001 for taxes payable in 
197.21  2002, and thereafter. 
197.22     Sec. 35.  Minnesota Statutes 2000, section 275.065, 
197.23  subdivision 5a, is amended to read: 
197.24     Subd. 5a.  [PUBLIC ADVERTISEMENT.] (a) A city that has a 
197.25  population of more than 2,500, county, a metropolitan special 
197.26  taxing district as defined in subdivision 3, paragraph (i), a 
197.27  regional library district established under section 134.201, or 
197.28  school district shall advertise in a newspaper a notice of its 
197.29  intent to adopt a budget and property tax levy or, in the case 
197.30  of a school district, to review its current budget and proposed 
197.31  property taxes payable in the following year, at a public 
197.32  hearing, if a public hearing is required under subdivision 6.  
197.33  The notice must be published not less than two business days nor 
197.34  more than six business days before the hearing. 
197.35     The advertisement must be at least one-eighth page in size 
197.36  of a standard-size or a tabloid-size newspaper.  The 
198.1   advertisement must not be placed in the part of the newspaper 
198.2   where legal notices and classified advertisements appear.  The 
198.3   advertisement must be published in an official newspaper of 
198.4   general circulation in the taxing authority.  The newspaper 
198.5   selected must be one of general interest and readership in the 
198.6   community, and not one of limited subject matter.  The 
198.7   advertisement must appear in a newspaper that is published at 
198.8   least once per week.  
198.9      For purposes of this section, the metropolitan special 
198.10  taxing district's advertisement must only be published in the 
198.11  Minneapolis Star and Tribune and the Saint Paul Pioneer Press. 
198.12     (b) The advertisement for school districts, metropolitan 
198.13  special taxing districts, and regional library districts must be 
198.14  in the following form, except that the notice for a school 
198.15  district may include references to the current budget in regard 
198.16  to proposed property taxes. 
198.17                             "NOTICE OF
198.18                      PROPOSED PROPERTY TAXES
198.19                   (School District/Metropolitan
198.20                  Special Taxing District/Regional
198.21                   Library District) of .........
198.22  The governing body of ........ will soon hold budget hearings 
198.23  and vote on the property taxes for (metropolitan special taxing 
198.24  district/regional library district services that will be 
198.25  provided in (year)/school district services that will be 
198.26  provided in (year) and (year)). 
198.27                     NOTICE OF PUBLIC HEARING:
198.28  All concerned citizens are invited to attend a public hearing 
198.29  and express their opinions on the proposed (school 
198.30  district/metropolitan special taxing district/regional library 
198.31  district) budget and property taxes, or in the case of a school 
198.32  district, its current budget and proposed property taxes, 
198.33  payable in the following year.  The hearing will be held on 
198.34  (Month/Day/Year) at (Time) at (Location, Address)." 
198.35     (c) The advertisement for cities and counties must be in 
198.36  the following form. 
199.1                         "NOTICE OF PROPOSED
199.2                   TOTAL BUDGET AND PROPERTY TAXES
199.3   The (city/county) governing body or board of commissioners will 
199.4   hold a public hearing to discuss the budget and to vote on the 
199.5   amount of property taxes to collect for services the 
199.6   (city/county) will provide in (year). 
199.7      
199.8   SPENDING:  The total budget amounts below compare 
199.9   (city's/county's) (year) total actual budget with the amount the 
199.10  (city/county) proposes to spend in (year). 
199.11     
199.12  (Year) Total          Proposed (Year)          Change from
199.13  Actual Budget             Budget               (Year)-(Year)
199.14     
199.15    $.......              $.......                ...%
199.16     
199.17  TAXES:  The property tax amounts below compare that portion of 
199.18  the current budget levied in property taxes in (city/county) for 
199.19  (year) with the property taxes the (city/county) proposes to 
199.20  collect in (year). 
199.21     
199.22  (Year) Property       Proposed (Year)          Change from
199.23      Taxes              Property Taxes         (Year)-(Year)
199.24     
199.25    $.......              $.......                ...% 
199.26     
199.27                     ATTEND THE PUBLIC HEARING
199.28  All (city/county) residents are invited to attend the public 
199.29  hearing of the (city/county) to express your opinions on the 
199.30  budget and the proposed amount of (year) property taxes.  The 
199.31  hearing will be held on: 
199.32                       (Month/Day/Year/Time)
199.33                         (Location/Address)
199.34  If the discussion of the budget cannot be completed, a time and 
199.35  place for continuing the discussion will be announced at the 
199.36  hearing.  You are also invited to send your written comments to: 
200.1                            (City/County)
200.2                         (Location/Address)"
200.3      (d) For purposes of this subdivision, the budget amounts 
200.4   listed on the advertisement mean: 
200.5      (1) for cities, the total government fund expenditures, as 
200.6   defined by the state auditor under section 471.6965, less any 
200.7   expenditures for improvements or services that are specially 
200.8   assessed or charged under chapter 429, 430, 435, or the 
200.9   provisions of any other law or charter; and 
200.10     (2) for counties, the total government fund expenditures, 
200.11  as defined by the state auditor under section 375.169, less any 
200.12  expenditures for direct payments to recipients or providers for 
200.13  the human service aids listed below: 
200.14     (i) Minnesota family investment program under chapters 256J 
200.15  and 256K; 
200.16     (ii) medical assistance under sections 256B.041, 
200.17  subdivision 5, and 256B.19, subdivision 1; 
200.18     (iii) general assistance medical care under section 
200.19  256D.03, subdivision 6; 
200.20     (iv) general assistance under section 256D.03, subdivision 
200.21  2; 
200.22     (v) emergency assistance under section 256J.48; 
200.23     (vi) Minnesota supplemental aid under section 256D.36, 
200.24  subdivision 1; 
200.25     (vii) preadmission screening under section 256B.0911, and 
200.26  alternative care grants under section 256B.0913; 
200.27     (viii) general assistance medical care claims processing, 
200.28  medical transportation and related costs under section 256D.03, 
200.29  subdivision 4; 
200.30     (ix) medical transportation and related costs under section 
200.31  256B.0625, subdivisions 17 to 18a; 
200.32     (x) group residential housing under section 256I.05, 
200.33  subdivision 8, transferred from programs in clauses (iv) and 
200.34  (vi); or 
200.35     (xi) any successor programs to those listed in clauses (i) 
200.36  to (x). 
201.1      (e) A city with a population of over 500 but not more than 
201.2   2,500 that is required to hold a public hearing under 
201.3   subdivision 6 must advertise by posted notice as defined in 
201.4   section 645.12, subdivision 1.  The advertisement must be posted 
201.5   at the time provided in paragraph (a).  It must be in the form 
201.6   required in paragraph (b). 
201.7      (f) For purposes of this subdivision, the population of a 
201.8   city is the most recent population as determined by the state 
201.9   demographer under section 4A.02. 
201.10     (g) The commissioner of revenue, subject to the approval of 
201.11  the chairs of the house and senate tax committees, shall 
201.12  prescribe the form and format of the advertisement 
201.13  advertisements required under this subdivision. 
201.14     [EFFECTIVE DATE.] This section is effective for public 
201.15  advertisements required in 2001 for taxes payable in 2002, and 
201.16  thereafter. 
201.17     Sec. 36.  Minnesota Statutes 2000, section 275.065, 
201.18  subdivision 6, is amended to read: 
201.19     Subd. 6.  [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 
201.20  (a) For purposes of this section, the following terms shall have 
201.21  the meanings given: 
201.22     (1) "Initial hearing" means the first and primary hearing 
201.23  held to discuss the taxing authority's proposed budget and 
201.24  proposed property tax levy for taxes payable in the following 
201.25  year, or, for school districts, the current budget and the 
201.26  proposed property tax levy for taxes payable in the following 
201.27  year. 
201.28     (2) "Continuation hearing" means a hearing held to complete 
201.29  the initial hearing, if the initial hearing is not completed on 
201.30  its scheduled date. 
201.31     (3) "Subsequent hearing" means the hearing held to adopt 
201.32  the taxing authority's final property tax levy, and, in the case 
201.33  of taxing authorities other than school districts, the final 
201.34  budget, for taxes payable in the following year. 
201.35     (b) Between November 29 and December 20, the governing 
201.36  bodies of a city that has a population over 500, county, 
202.1   metropolitan special taxing districts as defined in subdivision 
202.2   3, paragraph (i), and regional library districts shall each hold 
202.3   an initial public hearing to discuss and seek public comment on 
202.4   its final budget and property tax levy for taxes payable in the 
202.5   following year, and the governing body of the school district 
202.6   shall hold an initial public hearing to review its current 
202.7   budget and proposed property tax levy for taxes payable in the 
202.8   following year.  The metropolitan special taxing districts shall 
202.9   be required to hold only a single joint initial public hearing, 
202.10  the location of which will be determined by the affected 
202.11  metropolitan agencies.  A city, county, metropolitan special 
202.12  taxing district as defined in subdivision 3, paragraph (i), 
202.13  regional library district established under section 134.201, or 
202.14  school district is not required to hold a public hearing under 
202.15  this subdivision unless its proposed property tax levy for taxes 
202.16  payable in the following year, as certified under subdivision 1, 
202.17  has increased over its final property tax levy for taxes payable 
202.18  in the current year by a percentage that is greater than the 
202.19  percentage increase in the implicit price deflator for 
202.20  government consumption expenditures and gross investment for 
202.21  state and local governments prepared by the Bureau of Economic 
202.22  Analysts of the United States Department of Commerce for the 
202.23  12-month period ending March 31 of the current year. 
202.24     (c) The initial hearing must be held after 5:00 p.m. if 
202.25  scheduled on a day other than Saturday.  No initial hearing may 
202.26  be held on a Sunday.  
202.27     (d) At the initial hearing under this subdivision, the 
202.28  percentage increase in property taxes proposed by the taxing 
202.29  authority, if any, and the specific purposes for which property 
202.30  tax revenues are being increased must be discussed.  During the 
202.31  discussion, the governing body shall hear comments regarding a 
202.32  proposed increase and explain the reasons for the proposed 
202.33  increase.  The public shall be allowed to speak and to ask 
202.34  questions.  At the public hearing, the school district must also 
202.35  provide and discuss information on the distribution of its 
202.36  revenues by revenue source, and the distribution of its spending 
203.1   by program area.  
203.2      (e) If the initial hearing is not completed on its 
203.3   scheduled date, the taxing authority must announce, prior to 
203.4   adjournment of the hearing, the date, time, and place for the 
203.5   continuation of the hearing.  The continuation hearing must be 
203.6   held at least five business days but no more than 14 business 
203.7   days after the initial hearing.  A continuation hearing may not 
203.8   be held later than December 20 except as provided in paragraphs 
203.9   (f) and (g).  A continuation hearing must be held after 5:00 
203.10  p.m. if scheduled on a day other than Saturday.  No continuation 
203.11  hearing may be held on a Sunday. 
203.12     (f) The governing body of a county shall hold its initial 
203.13  hearing on the first Thursday in December each year, and may 
203.14  hold additional initial hearings on other dates before December 
203.15  20 if necessary for the convenience of county residents.  If the 
203.16  county needs a continuation of its hearing, the continuation 
203.17  hearing shall be held on the third Tuesday in December.  If the 
203.18  third Tuesday in December falls on December 21, the county's 
203.19  continuation hearing shall be held on Monday, December 20.  
203.20     (g) The metropolitan special taxing districts shall hold a 
203.21  joint initial public hearing on the first Wednesday of 
203.22  December.  A continuation hearing, if necessary, shall be held 
203.23  on the second Wednesday of December even if that second 
203.24  Wednesday is after December 10. 
203.25     (h) The county auditor shall provide for the coordination 
203.26  of initial and continuation hearing dates for all school 
203.27  districts and cities within the county to prevent conflicts 
203.28  under clauses (i) and (j). 
203.29     (i) By August 10, each school board and the board of the 
203.30  regional library district shall certify to the county auditors 
203.31  of the counties in which the school district or regional library 
203.32  district is located the dates on which it elects to hold its 
203.33  initial hearing and any continuation hearing.  If a school board 
203.34  or regional library district does not certify these dates by 
203.35  August 10, the auditor will assign the initial and continuation 
203.36  hearing dates.  The dates elected or assigned must not conflict 
204.1   with the initial and continuation hearing dates of the county or 
204.2   the metropolitan special taxing districts.  
204.3      (j) By August 20, the county auditor shall notify the 
204.4   clerks of the cities within the county of the dates on which 
204.5   school districts and regional library districts have elected to 
204.6   hold their initial and continuation hearings.  At the time a 
204.7   city certifies its proposed levy under subdivision 1 it shall 
204.8   certify the dates on which it elects to hold its initial hearing 
204.9   and any continuation hearing.  Until September 15, the first and 
204.10  second Mondays of December are reserved for the use of the 
204.11  cities.  If a city does not certify its hearing dates by 
204.12  September 15, the auditor shall assign the initial and 
204.13  continuation hearing dates.  The dates elected or assigned for 
204.14  the initial hearing must not conflict with the initial hearing 
204.15  dates of the county, metropolitan special taxing districts, 
204.16  regional library districts, or school districts within which the 
204.17  city is located.  To the extent possible, the dates of the 
204.18  city's continuation hearing should not conflict with the 
204.19  continuation hearing dates of the county, metropolitan special 
204.20  taxing districts, regional library districts, or school 
204.21  districts within which the city is located.  This paragraph does 
204.22  not apply to cities of 500 population or less. 
204.23     (k) The county initial hearing date and the city, 
204.24  metropolitan special taxing district, regional library district, 
204.25  and school district initial hearing dates must be designated on 
204.26  the notices required under subdivision 3.  The continuation 
204.27  hearing dates need not be stated on the notices.  
204.28     (l) At a subsequent hearing, each county, school district, 
204.29  city over 500 population, and metropolitan special taxing 
204.30  district may amend its proposed property tax levy and must adopt 
204.31  a final property tax levy.  Each county, city over 500 
204.32  population, and metropolitan special taxing district may also 
204.33  amend its proposed budget and must adopt a final budget at the 
204.34  subsequent hearing.  The final property tax levy must be adopted 
204.35  prior to adopting the final budget.  A school district is not 
204.36  required to adopt its final budget at the subsequent hearing.  
205.1   The subsequent hearing of a taxing authority must be held on a 
205.2   date subsequent to the date of the taxing authority's initial 
205.3   public hearing.  If a continuation hearing is held, the 
205.4   subsequent hearing must be held either immediately following the 
205.5   continuation hearing or on a date subsequent to the continuation 
205.6   hearing.  The subsequent hearing may be held at a regularly 
205.7   scheduled board or council meeting or at a special meeting 
205.8   scheduled for the purposes of the subsequent hearing.  The 
205.9   subsequent hearing of a taxing authority does not have to be 
205.10  coordinated by the county auditor to prevent a conflict with an 
205.11  initial hearing, a continuation hearing, or a subsequent hearing 
205.12  of any other taxing authority.  All subsequent hearings must be 
205.13  held prior to five working days after December 20 of the levy 
205.14  year.  The date, time, and place of the subsequent hearing must 
205.15  be announced at the initial public hearing or at the 
205.16  continuation hearing. 
205.17     (m) The property tax levy certified under section 275.07 by 
205.18  a city of any population, county, metropolitan special taxing 
205.19  district, regional library district, or school district must not 
205.20  exceed the proposed levy determined under subdivision 1, except 
205.21  by an amount up to the sum of the following amounts: 
205.22     (1) the amount of a school district levy whose voters 
205.23  approved a referendum to increase taxes under section 123B.63, 
205.24  subdivision 3, or 126C.17, subdivision 9, after the proposed 
205.25  levy was certified; 
205.26     (2) the amount of a city or county levy approved by the 
205.27  voters after the proposed levy was certified; 
205.28     (3) the amount of a levy to pay principal and interest on 
205.29  bonds approved by the voters under section 475.58 after the 
205.30  proposed levy was certified; 
205.31     (4) the amount of a levy to pay costs due to a natural 
205.32  disaster occurring after the proposed levy was certified, if 
205.33  that amount is approved by the commissioner of revenue under 
205.34  subdivision 6a; 
205.35     (5) the amount of a levy to pay tort judgments against a 
205.36  taxing authority that become final after the proposed levy was 
206.1   certified, if the amount is approved by the commissioner of 
206.2   revenue under subdivision 6a; 
206.3      (6) the amount of an increase in levy limits certified to 
206.4   the taxing authority by the commissioner of children, families, 
206.5   and learning or the commissioner of revenue after the proposed 
206.6   levy was certified; and 
206.7      (7) the amount required under section 126C.55. 
206.8      (n) This subdivision does not apply to towns and special 
206.9   taxing districts other than regional library districts and 
206.10  metropolitan special taxing districts. 
206.11     (o) Notwithstanding the requirements of this section, the 
206.12  employer is required to meet and negotiate over employee 
206.13  compensation as provided for in chapter 179A.  
206.14     [EFFECTIVE DATE.] This section is effective for hearings 
206.15  required in 2001 for taxes payable in 2002 and thereafter. 
206.16     Sec. 37.  Minnesota Statutes 2000, section 275.066, is 
206.17  amended to read: 
206.18     275.066 [SPECIAL TAXING DISTRICTS; DEFINITION.] 
206.19     For the purposes of property taxation and property tax 
206.20  state aids, the term "special taxing districts" includes the 
206.21  following entities: 
206.22     (1) watershed districts under chapter 103D; 
206.23     (2) sanitary districts under sections 115.18 to 115.37; 
206.24     (3) regional sanitary sewer districts under sections 115.61 
206.25  to 115.67; 
206.26     (4) regional public library districts under section 
206.27  134.201; 
206.28     (5) park districts under chapter 398; 
206.29     (6) regional railroad authorities under chapter 398A; 
206.30     (7) hospital districts under sections 447.31 to 447.38; 
206.31     (8) St. Cloud metropolitan transit commission under 
206.32  sections 458A.01 to 458A.15; 
206.33     (9) Duluth transit authority under sections 458A.21 to 
206.34  458A.37; 
206.35     (10) regional development commissions under sections 
206.36  462.381 to 462.398; 
207.1      (11) housing and redevelopment authorities under sections 
207.2   469.001 to 469.047; 
207.3      (12) port authorities under sections 469.048 to 469.068; 
207.4      (13) economic development authorities under sections 
207.5   469.090 to 469.1081; 
207.6      (14) metropolitan council under sections 473.123 to 
207.7   473.549; 
207.8      (15) metropolitan airports commission under sections 
207.9   473.601 to 473.680; 
207.10     (16) metropolitan mosquito control commission under 
207.11  sections 473.701 to 473.716; 
207.12     (17) Morrison county rural development financing authority 
207.13  under Laws 1982, chapter 437, section 1; 
207.14     (18) Croft Historical Park District under Laws 1984, 
207.15  chapter 502, article 13, section 6; 
207.16     (19) East Lake county medical clinic district under Laws 
207.17  1989, chapter 211, sections 1 to 6; 
207.18     (20) Floodwood area ambulance district under Laws 1993, 
207.19  chapter 375, article 5, section 39; 
207.20     (21) Middle Mississippi river watershed management 
207.21  organization under sections 103B.211 and 103B.241; and 
207.22     (22) a county levying under the authority of section 
207.23  103B.241, 103B.245, or 103B.251; and 
207.24     (23) any other political subdivision of the state of 
207.25  Minnesota, excluding counties, school districts, cities, and 
207.26  towns, that has the power to adopt and certify a property tax 
207.27  levy to the county auditor, as determined by the commissioner of 
207.28  revenue. 
207.29     [EFFECTIVE DATE.] This section is effective for taxes 
207.30  levied in 2001, payable in 2002, and thereafter. 
207.31     Sec. 38.  Minnesota Statutes 2000, section 275.07, 
207.32  subdivision 1, is amended to read: 
207.33     Subdivision 1.  [CERTIFICATION OF LEVY.] (a) Except as 
207.34  provided under paragraph (b), the taxes voted by cities, 
207.35  counties, school districts, and special districts shall be 
207.36  certified by the proper authorities to the county auditor on or 
208.1   before five working days after December 20 in each year.  A town 
208.2   must certify the levy adopted by the town board to the county 
208.3   auditor by September 15 each year.  If the town board modifies 
208.4   the levy at a special town meeting after September 15, the town 
208.5   board must recertify its levy to the county auditor on or before 
208.6   five working days after December 20.  The taxes certified shall 
208.7   not be reduced by the county auditor by the aid received under 
208.8   section 273.1398, subdivision 2, but shall be reduced by the 
208.9   county auditor by the aid received under section 273.1398, 
208.10  subdivision 3.  If a city, town, county, school district, or 
208.11  special district fails to certify its levy by that date, its 
208.12  levy shall be the amount levied by it for the preceding year. 
208.13     (b) The taxes voted by counties under section 103B.251 
208.14  shall be separately certified by the county to the county 
208.15  auditor on or before five working days after December 20 in each 
208.16  year.  The taxes certified shall not be reduced by the county 
208.17  auditor by the aid received under section 273.1398, subdivision 
208.18  2, but shall be reduced by the county auditor by the aid 
208.19  received under section 273.1398, subdivision 3.  If a county 
208.20  fails to certify its levy by that date, its levy shall be the 
208.21  amount levied by it for the preceding year.  
208.22     [EFFECTIVE DATE.] This section is effective for taxes 
208.23  levied in 2001, payable in 2002, and thereafter. 
208.24     Sec. 39.  Minnesota Statutes 2000, section 281.17, is 
208.25  amended to read: 
208.26     281.17 [PERIOD FOR REDEMPTION.] 
208.27     Except for properties for which the period of redemption 
208.28  has been limited under sections 281.173 and 281.174, the 
208.29  following periods for redemption apply. 
208.30     The period of redemption for all lands sold to the state at 
208.31  a tax judgment sale shall be three years from the date of sale 
208.32  to the state of Minnesota if the land is within an incorporated 
208.33  area unless it is:  (a) nonagricultural homesteaded land as 
208.34  defined in section 273.13, subdivision 22; (b) homesteaded 
208.35  agricultural land as defined in section 273.13, subdivision 23, 
208.36  paragraph (a); or (c) seasonal recreational land as defined in 
209.1   section 273.13, subdivision 22, paragraph (c), or 25, paragraph 
209.2   (c) (d), clause (5) (1), for which the period of redemption is 
209.3   five years from the date of sale to the state of Minnesota. 
209.4      The period of redemption for homesteaded lands as defined 
209.5   in section 273.13, subdivision 22, located in a targeted 
209.6   neighborhood as defined in Laws 1987, chapter 386, article 6, 
209.7   section 4, and sold to the state at a tax judgment sale is three 
209.8   years from the date of sale.  The period of redemption for all 
209.9   lands located in a targeted neighborhood as defined in Laws 
209.10  1987, chapter 386, article 6, section 4, except (1) homesteaded 
209.11  lands as defined in section 273.13, subdivision 22, and (2) for 
209.12  periods of redemption beginning after June 30, 1991, but before 
209.13  July 1, 1996, lands located in the Loring Park targeted 
209.14  neighborhood on which a notice of lis pendens has been served, 
209.15  and sold to the state at a tax judgment sale is one year from 
209.16  the date of sale. 
209.17     The period of redemption for all real property constituting 
209.18  a mixed municipal solid waste disposal facility that is a 
209.19  qualified facility under section 115B.39, subdivision 1, is one 
209.20  year from the date of the sale to the state of Minnesota. 
209.21     The period of redemption for all other lands sold to the 
209.22  state at a tax judgment sale shall be five years from the date 
209.23  of sale, except that the period of redemption for nonhomesteaded 
209.24  agricultural land as defined in section 273.13, subdivision 23, 
209.25  paragraph (b), shall be two years from the date of sale if at 
209.26  that time that property is owned by a person who owns one or 
209.27  more parcels of property on which taxes are delinquent, and the 
209.28  delinquent taxes are more than 25 percent of the prior year's 
209.29  school district levy. 
209.30     Sec. 40.  Minnesota Statutes 2000, section 282.01, 
209.31  subdivision 1, is amended to read: 
209.32     Subdivision 1.  [CLASSIFICATION AS CONSERVATION OR 
209.33  NONCONSERVATION.] It is the general policy of this state to 
209.34  encourage the best use of tax-forfeited lands, recognizing that 
209.35  some lands in public ownership should be retained and managed 
209.36  for public benefits while other lands should be returned to 
210.1   private ownership.  Parcels of land becoming the property of the 
210.2   state in trust under law declaring the forfeiture of lands to 
210.3   the state for taxes must be classified by the county board of 
210.4   the county in which the parcels lie as conservation or 
210.5   nonconservation.  In making the classification the board shall 
210.6   consider the present use of adjacent lands, the productivity of 
210.7   the soil, the character of forest or other growth, accessibility 
210.8   of lands to established roads, schools, and other public 
210.9   services, their peculiar suitability or desirability for 
210.10  particular uses and the suitability of the forest resources on 
210.11  the land for multiple use, sustained yield management.  The 
210.12  classification, furthermore, must encourage and foster a mode of 
210.13  land utilization that will facilitate the economical and 
210.14  adequate provision of transportation, roads, water supply, 
210.15  drainage, sanitation, education, and recreation; facilitate 
210.16  reduction of governmental expenditures; conserve and develop the 
210.17  natural resources; and foster and develop agriculture and other 
210.18  industries in the districts and places best suited to them. 
210.19     In making the classification the county board may use 
210.20  information made available by any office or department of the 
210.21  federal, state, or local governments, or by any other person or 
210.22  agency possessing pertinent information at the time the 
210.23  classification is made.  The lands may be reclassified from time 
210.24  to time as the county board considers necessary or desirable, 
210.25  except for conservation lands held by the state free from any 
210.26  trust in favor of any taxing district.  
210.27     If the lands are located within the boundaries of an 
210.28  organized town, with taxable valuation in excess of $20,000, or 
210.29  incorporated municipality, the classification or 
210.30  reclassification and sale must first be approved by the town 
210.31  board of the town or the governing body of the municipality in 
210.32  which the lands are located.  The town board of the town or the 
210.33  governing body of the municipality is considered to have 
210.34  approved the classification or reclassification and sale if the 
210.35  county board is not notified of the disapproval of the 
210.36  classification or reclassification and sale within 60 days of 
211.1   the date the request for approval was transmitted to the town 
211.2   board of the town or governing body of the municipality.  If the 
211.3   town board or governing body desires to acquire any parcel lying 
211.4   in the town or municipality by procedures authorized in this 
211.5   section, it must file a written application with the county 
211.6   board to withhold the parcel from public sale.  The application 
211.7   must be filed within 60 days of the request for classification 
211.8   or reclassification and sale.  The county board shall then 
211.9   withhold the parcel from public sale for six months.  A 
211.10  municipality or governmental subdivision shall pay maintenance 
211.11  costs incurred by the county during the six-month period while 
211.12  the property is withheld from public sale, provided the property 
211.13  is not offered for public sale after the six-month period.  A 
211.14  clerical error made by county officials does not serve to 
211.15  eliminate the request of the town board or governing body if the 
211.16  board or governing body has forwarded the application to the 
211.17  county auditor.  If the town board or governing body of the 
211.18  municipality fails to submit an application and a resolution of 
211.19  the board or governing body to acquire the property within the 
211.20  withholding period, the county may offer the property for sale 
211.21  upon the expiration of the withholding period.  
211.22     Sec. 41.  Minnesota Statutes 2000, section 282.241, is 
211.23  amended to read: 
211.24     282.241 [REPURCHASE AFTER FORFEITURE.] 
211.25     Subdivision 1.  [REPURCHASE REQUIREMENTS.] The owner at the 
211.26  time of forfeiture, or the owner's heirs, devisees, or 
211.27  representatives, or any person to whom the right to pay taxes 
211.28  was given by statute, mortgage, or other agreement, may 
211.29  repurchase any parcel of land claimed by the state to be 
211.30  forfeited to the state for taxes unless before the time 
211.31  repurchase is made the parcel is sold under installment 
211.32  payments, or otherwise, by the state as provided by law, or is 
211.33  under mineral prospecting permit or lease, or proceedings have 
211.34  been commenced by the state or any of its political subdivisions 
211.35  or by the United States to condemn the parcel of land.  The 
211.36  parcel of land may be repurchased for the sum of all delinquent 
212.1   taxes and assessments computed under section 282.251, together 
212.2   with penalties, interest, and costs, that accrued or would have 
212.3   accrued if the parcel of land had not forfeited to the state.  
212.4   Except for property which was homesteaded on the date of 
212.5   forfeiture, repurchase is permitted during one year only from 
212.6   the date of forfeiture, and in any case only after the adoption 
212.7   of a resolution by the board of county commissioners determining 
212.8   that by repurchase undue hardship or injustice resulting from 
212.9   the forfeiture will be corrected, or that permitting the 
212.10  repurchase will promote the use of the lands that will best 
212.11  serve the public interest.  If the county board has good cause 
212.12  to believe that a repurchase installment payment plan for a 
212.13  particular parcel is unnecessary and not in the public interest, 
212.14  the county board may require as a condition of repurchase that 
212.15  the entire repurchase price be paid at the time of repurchase.  
212.16  A repurchase is subject to any easement, lease, or other 
212.17  encumbrance granted by the state before the repurchase, and if 
212.18  the land is located within a restricted area established by any 
212.19  county under Laws 1939, chapter 340, the repurchase must not be 
212.20  permitted unless the resolution approving the repurchase is 
212.21  adopted by the unanimous vote of the board of county 
212.22  commissioners. 
212.23     The person seeking to repurchase under this section shall 
212.24  pay all maintenance costs incurred by the county auditor during 
212.25  the time the property was tax-forfeited.  
212.26     Subd. 2.  [ALTERNATIVE COMPUTATION OF REPURCHASE AMOUNT.] A 
212.27  county board may by resolution establish an alternative method 
212.28  of computing the repurchase amount under this subdivision for 
212.29  property homesteaded at the time of forfeiture that has been in 
212.30  forfeited status for more than ten years.  Equivalent taxes, 
212.31  penalties, interest, and costs for each year the property was in 
212.32  forfeiture status must be computed using the simple average of 
212.33  the assessor's estimated market value at forfeiture and the 
212.34  assessor's current estimated market value multiplied by the 
212.35  class rates under current law and applying the current tax, 
212.36  penalty, and interest rates.  Those amounts, plus any unpaid 
213.1   special assessments reinstated and included in the purchase 
213.2   price under section 282.251, including the penalties and 
213.3   interest that accrued or would have accrued on the special 
213.4   assessments, computed under current rates, are the repurchase 
213.5   price.  The county assessor shall determine the current market 
213.6   value and classification of the property. 
213.7      Sec. 42.  [383A.76] [TAX-FORFEITED LANDS.] 
213.8      Subdivision 1.  [SALE; VALUATION.] Notwithstanding any 
213.9   other law to the contrary, the Ramsey county board may sell 
213.10  tax-forfeited lands in the county to an organized or 
213.11  incorporated governmental subdivision of the state for any 
213.12  public purpose for which the subdivision is authorized to 
213.13  acquire property.  Tax-forfeited land in the county may be 
213.14  released from the trust in favor of the taxing districts on 
213.15  application of a state agency for an authorized use at a value, 
213.16  which may be less than its appraised value, as determined by the 
213.17  county board.  Factors that may be considered by the county 
213.18  board in determining value for lands to be held by a 
213.19  municipality for a permitted public purpose or redeveloped by an 
213.20  authority established under chapter 469 include the projected 
213.21  gap financing and public subsidy needed for a redevelopment 
213.22  project, expected increases in property taxes, before and after 
213.23  redevelopment appraised values, the potential use of the 
213.24  property for affordable housing, environmental contamination and 
213.25  pollution, site preparation and infrastructure costs, and any 
213.26  other relevant factors.  The commissioner of revenue may convey 
213.27  by deed in the name of the state a tract of tax-forfeited land 
213.28  held in trust in favor of the taxing districts to a governmental 
213.29  subdivision for an authorized public use, if an application is 
213.30  submitted to the commissioner.  The application must include a 
213.31  statement of facts as to the use to be made of the tract, the 
213.32  need for it, and the recommendation of the county board. 
213.33     Subd. 2.  [USE OF LAND.] For lands located within Ramsey 
213.34  county, the deed of conveyance of tax-forfeited land to an 
213.35  organized or incorporated governmental subdivision of the state 
213.36  for an authorized use must be on a form approved by the attorney 
214.1   general and must be conditioned on continued use for the purpose 
214.2   stated in the application.  If the governing body of the 
214.3   governmental subdivision determines by resolution after public 
214.4   hearing that some other public use should be made of the lands, 
214.5   the changed use may be made upon filing with the county recorder 
214.6   or registrar of titles a certified copy of the resolution and 
214.7   without conveying the lands back to the state and securing a new 
214.8   conveyance for the new public use.  Permitted public uses under 
214.9   this section for a municipality include street, storm water 
214.10  ponding, drainage, parks, watershed, wetlands, library, fire and 
214.11  police stations, utility easements, and public facilities.  
214.12  Permitted public uses under this section for an authority 
214.13  established under chapter 469 include commercial or housing 
214.14  redevelopment.  A municipality may, upon payment to the county 
214.15  of the value of the lands as determined by the county board in 
214.16  subdivision 1, convey lands directly to an authority for the use 
214.17  of the lands as a commercial or housing redevelopment project. 
214.18     [EFFECTIVE DATE.] This section is effective only after its 
214.19  approval by a majority of the governing body of Ramsey county 
214.20  and upon compliance with the provisions of Minnesota Statutes, 
214.21  section 645.021, subdivision 3. 
214.22     Sec. 43.  Minnesota Statutes 2000, section 383B.79, is 
214.23  amended by adding a subdivision to read: 
214.24     Subd. 5.  [FINANCING.] Hennepin county may appropriate 
214.25  funds for any of the activities described in subdivision 1, 
214.26  whether or not state funds are appropriated for the activity.  
214.27  Hennepin county may include any part of the costs of a project 
214.28  described in section 469.002, subdivision 12, in a capital 
214.29  improvement plan adopted under section 373.40, and may issue 
214.30  bonds for such purposes pursuant to and subject to the 
214.31  procedures and limitations set forth in section 373.40, whether 
214.32  or not the capital improvement to be financed is to be owned by 
214.33  the county or any other governmental entity.  Such purposes are 
214.34  in addition to the capital improvements described in section 
214.35  373.40, but shall not include light rail transit, commuter rail, 
214.36  or any activity related to either of those, or a sports facility 
215.1   building designed or used primarily for professional sports. 
215.2      Sec. 44.  Minnesota Statutes 2000, section 469.040, 
215.3   subdivision 5, is amended to read: 
215.4      Subd. 5.  [DESIGNATED HOUSING CORPORATION.] Property 
215.5   located within the exterior boundaries of the White Earth an 
215.6   Indian reservation in the state that is owned by the tribe's 
215.7   designated housing entity as defined in United States Code, 
215.8   title 25, section 4103(21), and that is a housing project or a 
215.9   housing development project, as defined in section 469.002, 
215.10  subdivisions 13 and 15, is exempt from all real and personal 
215.11  property taxes of the city, the county, the state, or any 
215.12  political subdivision thereof, but the property is subject to 
215.13  subdivision 3.  A copy of those portions of the annual reports 
215.14  submitted on behalf of the housing entity to the Secretary of 
215.15  the United States Department of Housing and Urban Development 
215.16  for the project that contain information sufficient to determine 
215.17  the amount due under subdivision 3 satisfies the reporting 
215.18  requirements of subdivision 3 for the project. 
215.19     [EFFECTIVE DATE.] This section is effective for taxes 
215.20  levied in 2001, payable in 2002, and thereafter. 
215.21     Sec. 45.  Minnesota Statutes 2000, section 469.202, 
215.22  subdivision 2, is amended to read: 
215.23     Subd. 2.  [ELIGIBILITY REQUIREMENTS FOR TARGETED 
215.24  NEIGHBORHOODS.] An area within a city is eligible for 
215.25  designation as a targeted neighborhood if the area meets two of 
215.26  the following three criteria: 
215.27     (a) The area had an unemployment rate that was twice the 
215.28  unemployment rate for the Minneapolis and Saint Paul standard 
215.29  metropolitan statistical area as determined by the 1980 most 
215.30  recent federal decennial census. 
215.31     (b) The median household income in the area was no more 
215.32  than half the median household income for the Minneapolis and 
215.33  Saint Paul standard metropolitan statistical area as determined 
215.34  by the 1980 most recent federal decennial census. 
215.35     (c) The area is characterized by residential dwelling units 
215.36  in need of substantial rehabilitation.  An area qualifies under 
216.1   this paragraph if 25 percent or more of the residential dwelling 
216.2   units are in substandard condition as determined by the city, or 
216.3   if 70 percent or more of the residential dwelling units in the 
216.4   area were built before 1940 as determined by the 1980 most 
216.5   recent federal decennial census. 
216.6      Sec. 46.  Minnesota Statutes 2000, section 473.625, is 
216.7   amended to read: 
216.8      473.625 [DETACHING MAJOR AIRPORT LAND FROM CITY, SCHOOL 
216.9   DISTRICT.] 
216.10     (a) Lands constituting any major airport or a part thereof 
216.11  now and which may hereafter be operated by any public 
216.12  corporation organized under sections 473.601 to 473.679, and 
216.13  embraced within any city or school district organized under the 
216.14  laws of the state, are hereby detached from such city or school 
216.15  district.  
216.16     (b)(i) Except as provided in clause (ii), real and personal 
216.17  property, including real and personal property otherwise taxable 
216.18  under section 272.01, constituting all or part of an 
216.19  intermediate airport operated by a public corporation organized 
216.20  under sections 473.601 to 473.679 and embraced within a home 
216.21  rule charter or statutory city or school district is exempt from 
216.22  taxation by the city or school district. 
216.23     (ii) The county assessor of the county where the property 
216.24  under this paragraph is located shall determine the total market 
216.25  value for all property at that site for assessment year 2001, 
216.26  compare it to the market value of the property existing on that 
216.27  site for the 1996 assessment, and report those market values to 
216.28  the commission.  If the total market value has not increased by 
216.29  at least 20 percent, the property tax exemption under clause (i) 
216.30  shall expire and the property shall be taxable beginning in 
216.31  assessment year 2001 and thereafter, for taxes payable in 2002 
216.32  and thereafter.  The provisions of section 473.629 apply to 
216.33  lands exempted from property tax under this paragraph. 
216.34     (c) For the purposes of this section, an intermediate 
216.35  airport is an airport that as of March 14, 1996, is a primary 
216.36  reliever airport, provides general aviation services, has a 
217.1   primary runway between 5,001 and 8,000 feet in length, and has 
217.2   precision instrument capability. 
217.3      [EFFECTIVE DATE.] This section is effective for taxes 
217.4   payable in 2002 and subsequent years. 
217.5      Sec. 47.  Laws 1992, chapter 499, article 7, section 31, as 
217.6   amended by Laws 1998, chapter 398, article 1, section 39, Laws 
217.7   1999, chapter 241, article 1, section 54, and Laws 2000, chapter 
217.8   489, article 2, section 28, is amended to read: 
217.9      Sec. 31.  [REPEALER.] 
217.10     Minnesota Statutes 1990, sections 124A.02, subdivision 24; 
217.11  124A.23, subdivisions 2 and 3; 124A.26, subdivisions 2 and 3; 
217.12  124A.27; 124A.28; and 124A.29, subdivision 2; and Minnesota 
217.13  Statutes 1991 Supplement, sections 124A.02, subdivisions 16 and 
217.14  23; 124A.03, subdivisions 1b, 1c, 1d, 1e, 1f, 1g, 1h, and 1i; 
217.15  124A.04; 124A.22, subdivisions 2, 3, 4, 4a, 4b, 8, and 9; 
217.16  124A.23, subdivisions 1, 4, and 5; 124A.24; 124A.26, subdivision 
217.17  1; and 124A.29, subdivision 1, are repealed effective June 30, 
217.18  2004; Laws 1991, chapter 265, article 7, section 35, is repealed.
217.19     [EFFECTIVE DATE.] This section is effective July 1, 2001. 
217.20     Sec. 48.  [CITY OF AFTON; EARLY TERMINATION OF AGRICULTURAL 
217.21  PRESERVE.] 
217.22     Subdivision 1.  [AUTHORIZATION.] Notwithstanding Minnesota 
217.23  Statutes, sections 473H.08 and 473H.09, providing for the 
217.24  duration and early termination of a metropolitan agricultural 
217.25  preserve, the city of Afton may initiate expiration of a parcel 
217.26  of land from an agricultural preserve for which the landowner on 
217.27  April 18, 2000, has initiated expiration under Minnesota 
217.28  Statutes, section 473H.08, subdivision 2, located in the city of 
217.29  Afton, Washington county, and described as:  
217.30     the Northeast Quarter of the Northeast Quarter of Section 
217.31  29, Township 28 North, Range 20 West of the Fourth Principal 
217.32  Meridian. 
217.33     The effective date of the expiration may be on any date 
217.34  after the effective date of this section as determined by the 
217.35  Afton city council, once the council has otherwise complied with 
217.36  the procedural requirements of Minnesota Statutes, sections 
218.1   473H.04 and 473H.08.  All benefits accruing to the parcel as an 
218.2   agricultural preserve, including benefits relating to the 
218.3   valuation and assessment of the parcel for ad valorem property 
218.4   taxes under Minnesota Statutes, chapter 273, and section 
218.5   473H.10, shall cease on the date of expiration.  
218.6      Subd. 2.  [ZONING CLASSIFICATION.] If the Afton city 
218.7   council elects to exercise the authority provided by subdivision 
218.8   1, it must continue the agriculture zoning classification for 
218.9   the parcel, adopted by the Afton city council on June 20, 2000, 
218.10  until April 18, 2008.  
218.11     [EFFECTIVE DATE.] This section is effective without local 
218.12  approval on the day following final enactment. 
218.13     Sec. 49.  [ATTACHMENT.] 
218.14     The territory comprising the Minneapolis-St. Paul 
218.15  International Airport is hereby attached to special school 
218.16  district No. 1, Minneapolis. 
218.17     [EFFECTIVE DATE.] This section is effective for taxes 
218.18  payable in 2002 and subsequent years. 
218.19     Sec. 50.  [AIRPORT IMPACT MITIGATION FUND; ANNUAL 
218.20  APPROPRIATION.] 
218.21     The commissioner of children, families and learning shall 
218.22  annually certify the state revenue impact resulting from (i) the 
218.23  application of the statewide general education tax rate to 
218.24  airport property under Minnesota Statutes, section 126C.13, 
218.25  subdivision 1a, and (ii) other reductions in state education 
218.26  aids resulting from the inclusion of airport property in school 
218.27  district tax bases under sections 46 and 49.  The amount 
218.28  certified by the commissioner of children, families and learning 
218.29  is annually appropriated from the general fund to the airport 
218.30  impact mitigation fund created in article 12, section 39, each 
218.31  fiscal year until termination of the fund beginning with fiscal 
218.32  year 2003.  Each year's appropriation is available until spent. 
218.33     Sec. 51.  [CHISAGO LAKES JOINT SEWAGE TREATMENT COMMISSION 
218.34  BONDING AUTHORITY.] 
218.35     Notwithstanding Minnesota Statutes, section 471.59, 
218.36  subdivision 11, the Chisago Lakes joint sewage treatment 
219.1   commission, a joint powers board established by the county of 
219.2   Chisago, and the cities of Lindstrom, Chisago City, and Center 
219.3   City, to own and operate wastewater treatment facilities for the 
219.4   member local governments, may issue and sell general obligation 
219.5   bonds pursuant to Minnesota Statutes, sections 115.46, 444.075, 
219.6   and chapter 475, to acquire land for, construct, expand, 
219.7   furnish, equip, and modify its wastewater treatment facilities, 
219.8   and pledge the full faith and credit and taxing power of the 
219.9   governmental units that are members of the joint powers board.  
219.10  The joint powers board is a municipality within the meaning of 
219.11  Minnesota Statutes, chapter 475.  Each government unit that is a 
219.12  member of the joint powers board must adopt a resolution 
219.13  authorizing the joint powers board to issue and sell the bonds 
219.14  before a referendum election on the issue can be held.  
219.15     [EFFECTIVE DATE.] This section is effective the day after 
219.16  final enactment. 
219.17     Sec. 52.  [LAKES REGION EMS SERVICE CHARGES.] 
219.18     Subdivision 1.  [AUTHORIZATION.] The Lakes Region emergency 
219.19  medical services district may charge and collect through the 
219.20  county with county property taxes, an annual service charge of 
219.21  $7 per unit for properties in the primary service area within 
219.22  Chisago county and $3.50 per unit for properties in the 
219.23  secondary service area within Chisago county according to the 
219.24  schedule in subdivision 2 for emergency medical services 
219.25  authorized as provided in subdivision 3. 
219.26     Subd. 2.  [EMS FEE SCHEDULE.] 
219.27     (a) RESIDENTIAL PROPERTIES          UNIT VALUE 
219.28     (1) Agricultural with Dwelling      1.0 
219.29     (2) Seasonal/Recreational           1.0 
219.30     (3) Residential Homestead           1.0 
219.31     (4) Residential Non-Homestead       1.0 for up to three 
219.32                                             living units 
219.33                                         1.0 for each additional 
219.34                                             living unit 
219.35                                             thereafter 
219.36     (5) Mobile Homes                    1.0 
220.1      (b) COMMERCIAL PROPERTIES 
220.2      (1) Up to $100,000 valuation        1.0 
220.3      (2) $100,001 to $150,000            2.0 
220.4      (3) $150,001 to $200,000            3.0 
220.5      (4) $200,001 to $250,000            4.0 
220.6      (5) $250,001 to $300,000            5.0 
220.7      (6) $300,001 to $350,000            6.0 
220.8      (7) $350,001 to $400,000            7.0 
220.9      (8) $400,001 to $450,000            8.0 
220.10     (9) $450,001 to $500,000            9.0 
220.11     (10) $500,001 to $550,000           10.0 
220.12     (11) $550,001 to $600,000           11.0 
220.13     (12) Over $600,000                  12.0 
220.14     Subd. 3.  [USE OF FEE PROCEEDS.] The proceeds of fees 
220.15  charged and collected under this section must be used to support 
220.16  the providing of out-of-hospital emergency medical services 
220.17  including, but not limited to, first responder or rescue squads 
220.18  recognized by the Lakes Region emergency medical services 
220.19  district, ambulance services licensed under Minnesota Statutes, 
220.20  chapter 144E, and recognized by the district, medical control 
220.21  functions set out in Minnesota Statutes, chapter 144E, and 
220.22  communications equipment and systems. 
220.23     Subd. 4.  [BOARD.] (a) The district is governed by a board 
220.24  made up of the members of the governing bodies including town 
220.25  boards of local governmental units in Chisago county, as follows:
220.26     (1) three members chosen by all of the cities in a manner 
220.27  convenient to them that reflects geographic balance; and 
220.28     (2) three members chosen by all of the town boards in a 
220.29  manner convenient to them that reflects geographic balance. 
220.30     (b) If the members are not selected as provided in 
220.31  paragraph (a), clause (1) or (2), by September 1, 2001, the 
220.32  county board must make the appointments from the governing 
220.33  bodies of cities under paragraph (a), clause (1), or from the 
220.34  governing bodies of town boards under paragraph (a), clause (2), 
220.35  respectively, and, in either case, reflecting geographic balance.
220.36     (c) A representative from the county board chosen by the 
221.1   county board must serve as the chair of the district board. 
221.2      (d) All members of the district board serve a three-year 
221.3   term. 
221.4      (e) A vacancy on the district board must be filled as 
221.5   provided for the initial appointment.  If the vacancy is not 
221.6   filled within 30 days by the initial appointing authority under 
221.7   paragraph (a), clause (1) or (2), the county board must make the 
221.8   appointment as provided in paragraph (b). 
221.9      Subd. 5.  [PROCEDURE.] The Chisago county board must charge 
221.10  and collect, and disburse the fees authorized in this section in 
221.11  the same manner authorized by ordinance for the charging, 
221.12  collection, and disbursing of solid waste management fees within 
221.13  the county.  The county may proceed to collect unpaid fees under 
221.14  this section in the same manner and extent, including interest 
221.15  charges, as provided by ordinance for collection of unpaid solid 
221.16  waste management fees. 
221.17     Subd. 6.  [ADMINISTRATIVE SHARE.] The county may retain up 
221.18  to one percent of the fees collected under this section each 
221.19  year for administration of the fee collection and disbursal. 
221.20     Subd. 7.  [SUNSET.] The fee authorized under this section 
221.21  may be imposed in 2001 through 2003 and collected with property 
221.22  taxes payable in 2002 through 2004 only.  
221.23     Sec. 53.  [CONVEYANCE OF TAX-FORFEITED LAND; DAKOTA 
221.24  COUNTY.] 
221.25     (a) If special school district No. 6 conveys the land 
221.26  described in paragraph (c) to the state according to Minnesota 
221.27  Statutes, section 282.01, subdivision 1d, then, notwithstanding 
221.28  any other provision of Minnesota Statutes, chapter 282, the 
221.29  commissioner of revenue shall reconvey the land described in 
221.30  paragraph (c) to special school district No. 6 for no 
221.31  consideration.  
221.32     (b) The conveyance must be in a form approved by the 
221.33  attorney general.  Notwithstanding Minnesota Statutes, chapter 
221.34  282, special school district No. 6 may use or sell the land for 
221.35  other than a public use.  Notwithstanding Minnesota Statutes, 
221.36  chapter 282, the state shall not retain a reversionary interest 
222.1   and shall convey the land free of the trust in favor of the 
222.2   taxing district. 
222.3      (c) The land to be conveyed is in the city of South St. 
222.4   Paul, Dakota county, and is described as:  
222.5      (1) Lots 4, 5, 6, and 7, Block 1, Lookout Park Addition; 
222.6      (2) Lots 25 and 26, Block 1, Lookout Park Addition; 
222.7      (3) Lots 11, 12, 13, 14, 15, 16, 17, 18, 19, and 20, Block 
222.8   2, Lookout Park Addition; 
222.9      (4) Lots 1, 2, 3, 4, and 5, Block 1, Bryants First Addition 
222.10  to the city of South St. Paul; and 
222.11     (5) Lot 21, Block 1, Bryants First Addition to the city of 
222.12  South St. Paul, together with that part of the vacated alley and 
222.13  vacated Stanley Place accruing thereto. 
222.14     [EFFECTIVE DATE.] This section is effective the day 
222.15  following final enactment. 
222.16     Sec. 54.  [RED RIVER WATERSHED MANAGEMENT BOARD; PAYMENT IN 
222.17  LIEU OF TAXES.] 
222.18     (a) The Red River watershed management board may spend 
222.19  money from its general fund to compensate counties and townships 
222.20  for lost tax revenue from land that becomes tax exempt after it 
222.21  is acquired by the board or a member watershed district for 
222.22  flood damage reduction project.  A member watershed district of 
222.23  the Red River management board may spend money from its 
222.24  construction fund for the purposes described in this section. 
222.25     (b) For the purposes of this section, "Red River watershed 
222.26  management board" refers to the board established by Laws 1976, 
222.27  chapter 162, section 1, as amended by Laws 1982, chapter 474, 
222.28  section 1, Laws 1983, chapter 338, section 1, Laws 1989 First 
222.29  Special Session chapter 1, article 5, section 45, Laws 1991, 
222.30  chapter 167, section 1, and Laws 1998, chapter 389, article 3, 
222.31  section 29. 
222.32     Sec. 55.  [REPORT ON ASSESSMENT PRACTICES AND MARKET 
222.33  VALUES.] 
222.34     The department of revenue must report to the legislature 
222.35  each year by March 1, the following information on values and 
222.36  assessment practices.  The information should be provided by 
223.1   major types of property on a statewide basis and at the most 
223.2   disaggregate jurisdictional level that is useful and 
223.3   appropriate.  The information must include: 
223.4      (1) recent market value trends and, to the extent possible, 
223.5   projections of market value trends for up to five years; 
223.6      (2) analysis of the effects of the limited market value 
223.7   law; 
223.8      (3) tax shift implications of market value trends and 
223.9   limited market value; 
223.10     (4) assessment quality indicators such as sales ratios and 
223.11  coefficients of dispersion; 
223.12     (5) to the extent possible, consideration should be given 
223.13  to quality factors such as: 
223.14     (i) number of sales; 
223.15     (ii) time period; 
223.16     (iii) geographical area; and 
223.17     (iv) other; 
223.18     (6) summary of state board orders; and 
223.19     (7) percentage of parcels that change in value per year. 
223.20     Sec. 56.  [STUDY OF RELATIONSHIP BETWEEN ELECTRIC UTILITY 
223.21  PERSONAL PROPERTY TAX EXEMPTION AND ENVIRONMENTAL IMPROVEMENTS.] 
223.22     The department of revenue and the public utilities 
223.23  commission shall jointly study the relationship between the 
223.24  granting of a property tax exemption to electric utility 
223.25  generating personal property and electric utilities' ability to 
223.26  use state-of-the-art equipment and practices that would enhance 
223.27  air quality and implement a program of placing powerlines 
223.28  located near major rivers underground in order to facilitate 
223.29  redevelopment and accommodate changing land use patterns.  In 
223.30  conducting the study, the department and the commission must 
223.31  seek input from local governments, environmental stakeholders, 
223.32  and users of major rivers, including those who use the river for 
223.33  recreational and agricultural purposes.  The results of the 
223.34  study must be presented by January 15, 2002, in a report to the 
223.35  committees of the legislature that have jurisdiction over taxes 
223.36  and utility issues. 
224.1      Sec. 57.  [WYOMING TOWNSHIP; CITY OF CHISAGO CITY; 
224.2   MUNICIPAL REIMBURSEMENT.] 
224.3      Notwithstanding the limitation on duration or equality of 
224.4   payment imposed under Minnesota Statutes, section 414.036, the 
224.5   city of Chisago City may provide reimbursement for orderly 
224.6   annexed property to the town of Wyoming for a period and in such 
224.7   amounts agreed to by the city and the town under a joint powers 
224.8   agreement entered into for the purposes of establishing a joint 
224.9   commercial and business park in the annexed area as described in 
224.10  section 2. 
224.11     [EFFECTIVE DATE.] This section is effective July 1, 2002. 
224.12     Sec. 58.  [FORGIVENESS OF PENALTY AND INTEREST.] 
224.13     If the owner of record of property located in St. Louis 
224.14  county that has parcel number 060-0030-03840 enters into an 
224.15  agreement with the county by May 31, 2001, to make installment 
224.16  payments over a ten-year period of the amount of taxes and 
224.17  special assessments due on the property for the 1997 payable 
224.18  year and the owner makes the payments required under the 
224.19  agreement when due, the amount of penalties, interest, and 
224.20  related fees due as of May 31, 2001, with respect to the 
224.21  delinquent taxes will not be required to be paid. 
224.22     Sec. 59.  [RENEWAL OF RULEMAKING AUTHORITY.] 
224.23     Notwithstanding Minnesota Statutes, section 14.125, the 
224.24  Minnesota housing finance agency may adopt administrative rules 
224.25  under Minnesota Statutes, chapter 14, to carry out the 
224.26  provisions of Minnesota Statutes, section 462A.071, and 
224.27  determinations made under Minnesota Statutes, section 462A.071, 
224.28  subdivision 11, paragraph (b), are valid until January 1, 2003. 
224.29     [EFFECTIVE DATE.] This section is effective the day 
224.30  following final enactment. 
224.31     Sec. 60.  [REPEALER.] 
224.32     (a) Minnesota Statutes 2000, sections 126C.30; 126C.31; 
224.33  126C.32; 126C.33; 126C.34; 126C.35; and 126C.36, are repealed.  
224.34     [EFFECTIVE DATE.] This paragraph is effective July 1, 2001. 
224.35     (b) Minnesota Statutes 2000, sections 272.02, subdivision 
224.36  22, and 273.37, subdivision 3, are repealed. 
225.1      [EFFECTIVE DATE.] This paragraph is effective for the 2001 
225.2   assessment for taxes payable in 2002 and thereafter. 
225.3      (c) Minnesota Statutes 2000, sections 270.31; 270.32; 
225.4   270.33; 270.34; 270.35; 270.36; 270.37; 270.38; and 270.39, are 
225.5   repealed. 
225.6      [EFFECTIVE DATE.] This paragraph is effective for taxes 
225.7   levied in 2002, payable in 2003, and thereafter. 
225.8      (d) Minnesota Statutes 2000, section 373.40, subdivision 7, 
225.9   is repealed. 
225.10                             ARTICLE 9
225.11                        PROPERTY TAX REFUND
225.12     Section 1.  Minnesota Statutes 2000, section 290A.03, 
225.13  subdivision 11, is amended to read: 
225.14     Subd. 11.  [RENT CONSTITUTING PROPERTY TAXES.] "Rent 
225.15  constituting property taxes" means 19 the percent of the gross 
225.16  rent, as provided under section 290A.046, actually paid in cash, 
225.17  or its equivalent, or the portion of rent paid in lieu of 
225.18  property taxes, in any calendar year by a claimant for the right 
225.19  of occupancy of the claimant's Minnesota homestead in the 
225.20  calendar year, and which rent constitutes the basis, in the 
225.21  succeeding calendar year of a claim for relief under this 
225.22  chapter by the claimant.  
225.23     Sec. 2.  Minnesota Statutes 2000, section 290A.03, 
225.24  subdivision 13, is amended to read: 
225.25     Subd. 13.  [PROPERTY TAXES PAYABLE.] "Property taxes 
225.26  payable" means the property tax exclusive of special 
225.27  assessments, penalties, and interest payable on a claimant's 
225.28  homestead after deductions made under sections 273.135, 
225.29  273.1382, 273.1391, 273.42, subdivision 2, and any other state 
225.30  paid property tax credits in any calendar year.  In the case of 
225.31  a claimant who makes ground lease payments, "property taxes 
225.32  payable" includes the amount of the payments directly 
225.33  attributable to the property taxes assessed against the parcel 
225.34  on which the house is located.  No apportionment or reduction of 
225.35  the "property taxes payable" shall be required for the use of a 
225.36  portion of the claimant's homestead for a business purpose if 
226.1   the claimant does not deduct any business depreciation expenses 
226.2   for the use of a portion of the homestead in the determination 
226.3   of federal adjusted gross income.  For homesteads which are 
226.4   manufactured homes as defined in section 273.125, subdivision 8, 
226.5   and for homesteads which are park trailers taxed as manufactured 
226.6   homes under section 168.012, subdivision 9, "property taxes 
226.7   payable" shall also include 19 percent the percentage applicable 
226.8   under subdivision 11 of the gross rent paid in the preceding 
226.9   year for the site on which the homestead is located.  When a 
226.10  homestead is owned by two or more persons as joint tenants or 
226.11  tenants in common, such tenants shall determine between them 
226.12  which tenant may claim the property taxes payable on the 
226.13  homestead.  If they are unable to agree, the matter shall be 
226.14  referred to the commissioner of revenue whose decision shall be 
226.15  final.  Property taxes are considered payable in the year 
226.16  prescribed by law for payment of the taxes. 
226.17     In the case of a claim relating to "property taxes 
226.18  payable," the claimant must have owned and occupied the 
226.19  homestead on January 2 of the year in which the tax is payable 
226.20  and (i) the property must have been classified as homestead 
226.21  property pursuant to section 273.124, on or before December 15 
226.22  of the assessment year to which the "property taxes payable" 
226.23  relate; or (ii) the claimant must provide documentation from the 
226.24  local assessor that application for homestead classification has 
226.25  been made on or before December 15 of the year in which the 
226.26  "property taxes payable" were payable and that the assessor has 
226.27  approved the application. 
226.28     [EFFECTIVE DATE.] This section is effective beginning with 
226.29  refunds based on rent paid in calendar year 2001. 
226.30     Sec. 3.  Minnesota Statutes 2000, section 290A.04, 
226.31  subdivision 2, is amended to read: 
226.32     Subd. 2.  [HOMEOWNERS.] A claimant whose property taxes 
226.33  payable are in excess of the percentage of the household income 
226.34  stated below shall pay an amount equal to the percent of income 
226.35  shown for the appropriate household income level along with the 
226.36  percent to be paid by the claimant of the remaining amount of 
227.1   property taxes payable.  The state refund equals the amount of 
227.2   property taxes payable that remain, up to the state refund 
227.3   amount shown below.  
227.4                         Percent         Percent    Maximum
227.5   Household Income     of Income        Paid by     State
227.6                                         Claimant    Refund
227.7       $0 to 1,029     1.2 percent      18 percent   $440  $800
227.8    1,030 to 2,059     1.3 percent      18 percent   $440  $800
227.9    2,060 to 3,099     1.4 percent      20 percent   $440  $800
227.10   3,100 to 4,129     1.6 percent      20 percent   $440  $800
227.11   4,130 to 5,159     1.7 percent      20 percent   $440  $800
227.12   5,160 to 7,229     1.9 percent      25 percent   $440  $800
227.13   7,230 to 8,259     2.1 percent      25 percent   $440  $800
227.14   8,260 to 9,289     2.2 percent      25 percent   $440  $800
227.15   9,290 to 10,319    2.3 percent      30 percent   $440  $800
227.16  10,320 to 11,349    2.4 percent      30 percent   $440  $800
227.17  11,350 to 12,389    2.5 percent      30 percent   $440  $800
227.18  12,390 to 14,449    2.6 percent      30 percent   $440  $800
227.19  14,450 to 15,479    2.8 percent      35 percent   $440  $800
227.20  15,480 to 16,509    3.0 percent      35 percent   $440  $800
227.21  16,510 to 17,549    3.2 percent      40 percent   $440  $800
227.22  17,550 to 21,669    3.3 percent      40 percent   $440  $800
227.23  21,670 to 24,769    3.4 percent      45 percent   $440  $800
227.24  24,770 to 30,959    3.5 percent      45 percent   $440  $720
227.25  30,960 to 36,119    3.5 percent      45 percent   $440  $640
227.26  36,120 to 41,279    3.7 percent      50 percent   $440  $553
227.27  41,280 to 58,829    4.0 percent      50 percent   $440  $480
227.28  58,830 to 59,859    4.0 percent      50 percent   $310  $400
227.29  59,860 to 60,889    4.0 percent      50 percent   $210  $240
227.30  60,890 to 61,929    4.0 percent      50 percent   $100   $80
227.31     The payment made to a claimant shall be the amount of the 
227.32  state refund calculated under this subdivision.  No payment is 
227.33  allowed if the claimant's household income is $61,930 or more. 
227.34     [EFFECTIVE DATE.] This section is effective for claims 
227.35  based on property taxes payable in 2002 and thereafter. 
227.36     Sec. 4.  [290A.046] [RENT CONSTITUTING PROPERTY TAXES.] 
227.37     (a)(1) For claims based on rent paid in calendar years 2001 
227.38  and 2002, the percentage of rent constituting property taxes is 
227.39  20 percent. 
227.40     (2) For claims based on rent paid in calendar year 2003 and 
227.41  later calendar years, the percentage is the greater of (i) the 
227.42  percentage determined under paragraph (c), rounded to the 
227.43  nearest whole percent or (ii) 20 percent. 
227.44     (b)(1) By September 30, 2002, the commissioner shall 
227.45  estimate the average percentage that property taxes consist of 
227.46  rent paid for occupancy of residential properties in Minnesota 
227.47  for taxes and rents payable in the immediately preceding 
227.48  calendar year and make the estimate available to the public.  In 
227.49  preparing the estimate, the commissioner shall separately 
228.1   estimate the percentage for, at least, the metropolitan area, as 
228.2   defined in section 473.121, and the rest of the state and 
228.3   provide this information to the chairs of the committees of the 
228.4   house and senate with jurisdiction over taxes and tax laws. This 
228.5   percentage must be used in making the determination under 
228.6   paragraph (c) for refunds based on rent paid in calendar years 
228.7   2003 through 2008. 
228.8      (2) Beginning in 2008 and each year after 2008 that is 
228.9   evenly divisible by four, the commissioner shall estimate the 
228.10  average percentage that property taxes consist of rent paid for 
228.11  occupancy of residential properties in Minnesota for taxes and 
228.12  rents payable in the immediately preceding calendar year.  The 
228.13  commissioner shall make the estimate available to the public by 
228.14  September 30 of the year in which it was prepared.  This 
228.15  estimate must be used in making the determination under 
228.16  paragraph (c) for refunds based on rent paid in the four 
228.17  calendar years immediately following the year in which the 
228.18  estimate is published. 
228.19     (c) For claims based on rent paid in calendar year 2003 and 
228.20  later years, the percentage of rent constituting property taxes 
228.21  is the greater of: 
228.22     (1) the percentage estimate determined under paragraph (b); 
228.23  or 
228.24     (2) the percentage used in the immediately previous year 
228.25  minus the greater of (i) one-third of the difference between the 
228.26  percentage determined under paragraph (b) and the percentage 
228.27  used in the year the estimate was prepared or (ii) one 
228.28  percentage point. 
228.29     (d) In preparing the estimates under this section, the 
228.30  commissioner may use surveys of landlords, information obtained 
228.31  from assessors, or any other information that the commissioner 
228.32  considers appropriate.  The estimates are not subject to chapter 
228.33  14. 
228.34     [EFFECTIVE DATE.] This section is effective beginning with 
228.35  refunds based on rent paid in calendar year 2001. 
228.36     Sec. 5.  [REPEALER.] 
229.1      Minnesota Statutes 2000, section 290A.04, subdivision 2j, 
229.2   is repealed. 
229.3                              ARTICLE 10
229.4           LOCAL GOVERNMENT AID; PAYMENTS IN LIEU OF TAXES
229.5      Section 1.  Minnesota Statutes 2000, section 273.1398, is 
229.6   amended by adding a subdivision to read: 
229.7      Subd. 4b.  [AID ADJUSTMENT FOR 2002 CITY LOCAL GOVERNMENT 
229.8   AID CHANGES.] Payments to a city under subdivision 2 or section 
229.9   273.166 for calendar year 2002 are equal to (1) payments under 
229.10  those sections in calendar year 2001 minus (2) the difference 
229.11  between the amount the city is certified to receive in aid under 
229.12  sections 477A.011 to 477A.014 in calendar year 2002 and what the 
229.13  city would have received in calendar year 2002 under the formula 
229.14  in Minnesota Statutes 2000, sections 477A.011 to 477A.014.  The 
229.15  amount of HACA remaining after the offset may not be less than 
229.16  zero. 
229.17     [EFFECTIVE DATE.] This section is effective for aids 
229.18  payable in calendar year 2002. 
229.19     Sec. 2.  Minnesota Statutes 2000, section 273.1398, is 
229.20  amended by adding a subdivision to read: 
229.21     Subd. 4c.  [ADJUSTMENT FOR LOW-INCOME HOUSING 
229.22  AID.] Payments to a city under subdivision 2 or section 273.166 
229.23  for calendar year 2004 are permanently increased by the amount 
229.24  certified to be paid to it in 2003 under section 477A.06. 
229.25     [EFFECTIVE DATE.] This section is effective for aids 
229.26  payable in calendar year 2004. 
229.27     Sec. 3.  Minnesota Statutes 2000, section 273.1398, is 
229.28  amended by adding a subdivision to read: 
229.29     Subd. 4d.  [ADJUSTMENT FOR SELECTED CITIES.] Payments to a 
229.30  city under subdivision 2 or section 273.166 shall be decreased 
229.31  by $450,000 in calendar year 2009 if the city had an increased 
229.32  city aid base for local government aid purposes in 2001 under 
229.33  section 477A.011, subdivision 36, paragraph (f). 
229.34     Sec. 4.  Minnesota Statutes 2000, section 477A.011, 
229.35  subdivision 27, is amended to read: 
229.36     Subd. 27.  [REVENUE BASE.] "Revenue base" means the amount 
230.1   levied for taxes payable in the previous year, including the 
230.2   levy on the fiscal disparity distribution under section 276A.06, 
230.3   subdivision 3, paragraph (a), or 473F.08, subdivision 3, 
230.4   paragraph (a), and before reduction for the homestead and 
230.5   agricultural credit aid under section 273.1398, subdivision 2, 
230.6   equalization aid under section 477A.013, subdivision 5, and 
230.7   disparity reduction aid under section 273.1398, subdivision 3; 
230.8   plus the originally certified local government aid in the 
230.9   previous year under sections 477A.011 and 477A.013; the 
230.10  homestead and agricultural credit aid in the previous year under 
230.11  section 273.1398, subdivision 2; and the taconite aids received 
230.12  in the previous year under sections 298.28 and 298.282. 
230.13     [EFFECTIVE DATE.] This section is effective for aids 
230.14  payable in calendar year 2002 and thereafter. 
230.15     Sec. 5.  Minnesota Statutes 2000, section 477A.011, is 
230.16  amended by adding a subdivision to read: 
230.17     Subd. 27a.  [REVENUE BASE PER CAPITA.] "Revenue base per 
230.18  capita" means a city's revenue base divided by the city's 
230.19  population for two calendar years prior to the payable year of 
230.20  the aids and levies used in calculating the revenue base. 
230.21     [EFFECTIVE DATE.] This section is effective for aids 
230.22  payable in calendar year 2002 and thereafter. 
230.23     Sec. 6.  Minnesota Statutes 2000, section 477A.011, is 
230.24  amending by adding a subdivision to read: 
230.25     Subd. 27b.  [AVERAGE SMALL CITY PER CAPITA REVENUE 
230.26  BASE.] "Average small city per capita revenue base" means the 
230.27  sum of the revenue base per capita for all cities with a 
230.28  population of less than 2,500 divided by the number of cities 
230.29  with a population less than 2,500. 
230.30     [EFFECTIVE DATE.] This section is effective for aids 
230.31  payable in calendar year 2002 and thereafter. 
230.32     Sec. 7.  Minnesota Statutes 2000, section 477A.011, 
230.33  subdivision 34, is amended to read: 
230.34     Subd. 34.  [PER CAPITA CITY REVENUE NEED.] (a) For a city 
230.35  with a population equal to or greater than 2,500, "per capita 
230.36  city revenue need" is the sum of (1) 3.462312 5.57535 times the 
231.1   pre-1940 housing percentage; plus (2) 2.093826 2.72775 times the 
231.2   commercial industrial percentage; plus (3) 6.862552 16.44686 
231.3   times the population decline percentage; plus (4) .00026 times 
231.4   the city population; plus (5) 152.0141 189.103. 
231.5      (b) For a city with a population less than 2,500, "city 
231.6   revenue need" is the sum of (1) 1.795919 times the pre-1940 
231.7   housing percentage; plus (2) 1.562138 times the commercial 
231.8   industrial percentage; plus (3) 4.177568 times the population 
231.9   decline percentage; plus (4) 1.04013 times the transformed 
231.10  population; minus (5) 107.475 "per capita city revenue need" is 
231.11  equal to the lesser of (1) the sum of the city's revenue base 
231.12  per capita for the four most recently available calendar years 
231.13  divided by four, or (2) the average small city per capita 
231.14  revenue base plus two-thirds of the amount of that city's 
231.15  average revenue base per capita for the last four years that 
231.16  exceeds the average small city per capita revenue base. 
231.17     (c) The city revenue need cannot be less than zero. 
231.18     (d) For calendar year 1998 and subsequent years, the city 
231.19  revenue need for a city, as determined in paragraphs (a) to (c), 
231.20  is multiplied by the ratio of the annual implicit price deflator 
231.21  for government consumption expenditures and gross investment for 
231.22  state and local governments as prepared by the United States 
231.23  Department of Commerce, for the most recently available year to 
231.24  the 1993 implicit price deflator for state and local government 
231.25  purchases. 
231.26     [EFFECTIVE DATE.] This section is effective for aids 
231.27  payable in calendar year 2002 and thereafter. 
231.28     Sec. 8.  Minnesota Statutes 2000, section 477A.013, 
231.29  subdivision 8, is amended to read: 
231.30     Subd. 8.  [CITY FORMULA AID.] In calendar year 1994 2002 
231.31  and subsequent years, the formula aid for a city is equal to the 
231.32  need increase percentage multiplied by the difference between 
231.33  (1) the per capita city's revenue need multiplied by its 
231.34  population, and (2) 25 percent of the city's net tax capacity 
231.35  multiplied by the tax effort rate.  No city may have a formula 
231.36  aid amount less than zero $25 per capita.  The need increase 
232.1   percentage must be the same for all cities.  
232.2      Notwithstanding the prior sentence, in 1995 only, the need 
232.3   increase percentage for a city shall be twice the need increase 
232.4   percentage applicable to other cities if:  
232.5      (1) the city, in 1992 or 1993, transferred an amount from 
232.6   governmental funds to their sewer and water fund, and 
232.7      (2) the amount transferred exceeded their net levy for 
232.8   taxes payable in the year in which the transfer occurred. 
232.9      The applicable need increase percentage or percentages must 
232.10  be calculated by the department of revenue so that the total of 
232.11  the aid under subdivision 9 equals the total amount available 
232.12  for aid under section 477A.03.  
232.13     [EFFECTIVE DATE.] This section is effective for aids 
232.14  payable in calendar year 2002 and thereafter. 
232.15     Sec. 9.  Minnesota Statutes 2000, section 477A.013, 
232.16  subdivision 9, is amended to read: 
232.17     Subd. 9.  [CITY AID DISTRIBUTION.] (a) In calendar year 
232.18  1994 and thereafter, each city shall receive an aid distribution 
232.19  equal to the sum of (1) the city formula aid under subdivision 
232.20  8, and (2) its city aid base 2002 and thereafter, each city 
232.21  shall receive an aid distribution equal to its formula aid under 
232.22  subdivision 8. 
232.23     (b) The percentage increase for a first class city in 
232.24  calendar year 1995 and thereafter shall not exceed the 
232.25  percentage increase in the sum of the aid to all cities under 
232.26  this section in the current calendar year compared to the sum of 
232.27  the aid to all cities in the previous year. 
232.28     (c) The total aid for any city, except a first class city, 
232.29  shall not exceed the sum of (1) ten percent of the city's net 
232.30  levy for the year prior to the aid distribution plus (2) its 
232.31  total aid in the previous year before any increases or decreases 
232.32  under sections 16A.711, subdivision 5, and 477A.0132. 
232.33     (d) Notwithstanding paragraph (c), in 1995 only, for cities 
232.34  which in 1992 or 1993 transferred an amount from governmental 
232.35  funds to their sewer and water fund in an amount greater than 
232.36  their net levy for taxes payable in the year in which the 
233.1   transfer occurred, the total aid shall not exceed the sum of (1) 
233.2   20 percent of the city's net levy for the year prior to the aid 
233.3   distribution plus (2) its total aid in the previous year before 
233.4   any increases or decreases under sections 16A.711, subdivision 
233.5   5, and 477A.0132. 
233.6      [EFFECTIVE DATE.] This section is effective for aids 
233.7   payable in calendar year 2002 and thereafter. 
233.8      Sec. 10.  Minnesota Statutes 2000, section 477A.03, 
233.9   subdivision 2, is amended to read: 
233.10     Subd. 2.  [ANNUAL APPROPRIATION.] (a) A sum sufficient to 
233.11  discharge the duties imposed by sections 477A.011 to 477A.014 is 
233.12  annually appropriated from the general fund to the commissioner 
233.13  of revenue.  
233.14     (b) Aid payments to counties under section 477A.0121 are 
233.15  limited to $20,265,000 in 1996.  Aid payments to counties under 
233.16  section 477A.0121 are limited to $27,571,625 in 1997.  For aid 
233.17  payable in 1998 and thereafter, the total aids paid under 
233.18  section 477A.0121 are the amounts certified to be paid in the 
233.19  previous year, adjusted for inflation as provided under 
233.20  subdivision 3. 
233.21     (c)(i) For aids payable in 1998 and thereafter, the total 
233.22  aids paid to counties under section 477A.0122 are the amounts 
233.23  certified to be paid in the previous year, adjusted for 
233.24  inflation as provided under subdivision 3. 
233.25     (ii) Aid payments to counties under section 477A.0122 in 
233.26  2000 are further increased by an additional $20,000,000 in 2000. 
233.27     (d) Aid payments to cities in 1999 under section 477A.013, 
233.28  subdivision 9, are limited to $380,565,489.  For aids payable in 
233.29  2000, the total aids paid under section 477A.013, subdivision 9, 
233.30  are the amounts certified to be paid in the previous year, 
233.31  adjusted for inflation as provided in subdivision 3, and 
233.32  increased by the amount necessary to effectuate Laws 1999, 
233.33  chapter 243, article 5, section 48, paragraph (b).  For aids 
233.34  payable in 2001 through 2003, the total aids paid under section 
233.35  477A.013, subdivision 9, are the amounts certified to be paid in 
233.36  the previous year, adjusted for inflation as provided under 
234.1   subdivision 3.  For aids payable in 2004 2002, the total aids 
234.2   paid under section 477A.013, subdivision 9, are the amounts 
234.3   certified to be paid in the previous year, adjusted for 
234.4   inflation as provided under subdivision 3, and increased by the 
234.5   amount certified to be paid in 2003 under section 
234.6   477A.06 limited to $590,000,000.  For aids payable in 2005 2003 
234.7   and thereafter, the total aids paid under section 477A.013, 
234.8   subdivision 9, are the amounts certified to be paid in the 
234.9   previous year, adjusted for inflation as provided under 
234.10  subdivision 3 and by the household adjustment factor for all 
234.11  cities in the state as defined in section 273.1398.  The 
234.12  additional amount authorized under subdivision 4 is not included 
234.13  when calculating the appropriation limits under this paragraph. 
234.14     [EFFECTIVE DATE.] This section is effective for aids 
234.15  payable in calendar year 2002 and thereafter. 
234.16     Sec. 11.  Minnesota Statutes 2000, section 477A.11, 
234.17  subdivision 3, is amended to read: 
234.18     Subd. 3.  [ACQUIRED NATURAL RESOURCES LAND.] "Acquired 
234.19  natural resources land" means: 
234.20     (1) any land presently administered by the commissioner in 
234.21  which the state acquired by purchase, condemnation, or gift, a 
234.22  fee title interest in lands which were previously privately 
234.23  owned; and 
234.24     (2) lands acquired by the state under chapter 84A that are 
234.25  designated as state parks, state recreation areas, scientific 
234.26  and natural areas, or wildlife management areas; and 
234.27     (3) land leased or acquired by the state from the United 
234.28  States of America through the United States Secretary of 
234.29  Agriculture pursuant to Title III of the Bankhead Jones Farm 
234.30  Tenant Act, which land is commonly referred to as land 
234.31  utilization project land that is administered by the 
234.32  commissioner.  
234.33     [EFFECTIVE DATE.] This section is effective for payments 
234.34  made in 2002 and thereafter. 
234.35     Sec. 12.  Minnesota Statutes 2000, section 477A.11, 
234.36  subdivision 4, is amended to read: 
235.1      Subd. 4.  [OTHER NATURAL RESOURCES LAND.] "Other natural 
235.2   resources land" means:  (1) any other land presently owned in 
235.3   fee title by the state and administered by the commissioner, or 
235.4   any tax-forfeited land, other than platted lots within a city or 
235.5   those lands described under subdivision 3, clause (2), which is 
235.6   owned by the state and administered by the commissioner or by 
235.7   the county in which it is located; and (2) land leased by the 
235.8   state from the United States of America through the United 
235.9   States Secretary of Agriculture pursuant to Title III of the 
235.10  Bankhead Jones Farm Tenant Act, which land is commonly referred 
235.11  to as land utilization project land that is administered by the 
235.12  commissioner. 
235.13     [EFFECTIVE DATE.] This section is effective for payments 
235.14  made in 2002 and thereafter. 
235.15     Sec. 13.  Minnesota Statutes 2000, section 477A.12, is 
235.16  amended to read: 
235.17     477A.12 [ANNUAL APPROPRIATIONS; LANDS ELIGIBLE; 
235.18  CERTIFICATION OF ACREAGE.] 
235.19     Subdivision 1.  [TYPES OF LAND; PAYMENTS.] (a) As an offset 
235.20  for expenses incurred by counties and towns in support of 
235.21  natural resources lands, the following amounts are annually 
235.22  appropriated to the commissioner of natural resources from the 
235.23  general fund for transfer to the commissioner of revenue.  The 
235.24  commissioner of revenue shall pay the transferred funds to 
235.25  counties as required by sections 477A.11 to 477A.145.  The 
235.26  amounts are: 
235.27     (1) for acquired natural resources land, $3, as adjusted 
235.28  for inflation under section 477A.145, multiplied by the total 
235.29  number of acres of acquired natural resources land or, at the 
235.30  county's option three-fourths of one percent of the appraised 
235.31  value of all acquired natural resources land in the county, 
235.32  whichever is greater; 
235.33     (2) 75 cents, as adjusted for inflation under section 
235.34  477A.145, multiplied by the number of acres of 
235.35  county-administered other natural resources land; and 
235.36     (3) 37.5 cents, as adjusted for inflation under section 
236.1   477A.145, multiplied by the number of acres of 
236.2   commissioner-administered other natural resources land located 
236.3   in each county as of July 1 of each year prior to the payment 
236.4   year. 
236.5      (b) The amount determined under paragraph (a), clause (1), 
236.6   is payable for land that is acquired from a private owner by the 
236.7   department of transportation for the purpose of replacing 
236.8   wetland losses caused by transportation projects, but only if 
236.9   the county contains more than 500 acres of such land at the time 
236.10  the certification is made under subdivision 2. 
236.11     Subd. 2.  [PROCEDURE.] Lands for which payments in lieu are 
236.12  made pursuant to section 97A.061, subdivision 3, and Laws 1973, 
236.13  chapter 567, shall not be eligible for payments under this 
236.14  section.  Each county auditor shall certify to the department of 
236.15  natural resources during July of each year prior to the payment 
236.16  year the number of acres of county-administered other natural 
236.17  resources land within the county.  The department of natural 
236.18  resources may, in addition to the certification of acreage, 
236.19  require descriptive lists of land so certified.  The 
236.20  commissioner of natural resources shall determine and certify to 
236.21  the commissioner of revenue by March 1 of the payment year:  
236.22     (1) the number of acres and most recent appraised value of 
236.23  acquired natural resources land within each county; 
236.24     (2) the number of acres of commissioner-administered 
236.25  natural resources land within each county; and 
236.26     (3) the number of acres of county-administered other 
236.27  natural resources land within each county, based on the reports 
236.28  filed by each county auditor with the commissioner of natural 
236.29  resources. 
236.30     The commissioner of transportation shall determine and 
236.31  certify to the commissioner of revenue by March 1 of the payment 
236.32  year the number of acres of land described in subdivision 1, 
236.33  paragraph (b), but only if it exceeds 500 acres. 
236.34     The commissioner of revenue shall determine the 
236.35  distributions provided for in this section using the number of 
236.36  acres and appraised values certified by the commissioner of 
237.1   natural resources and the commissioner of transportation by 
237.2   March 1 of the payment year. 
237.3      (c) Subd 3.  [DETERMINATION OF APPRAISED VALUE.] For the 
237.4   purposes of this section, the appraised value of acquired 
237.5   natural resources land is the purchase price for the first five 
237.6   years after acquisition.  The appraised value of acquired 
237.7   natural resources land received as a donation is the value 
237.8   determined for the commissioner of natural resources by a 
237.9   licensed appraiser, or the county assessor's estimated market 
237.10  value if no appraisal is done.  The appraised value must be 
237.11  determined by the county assessor every five years after the 
237.12  land is acquired. 
237.13     [EFFECTIVE DATE.] This section is effective for payments in 
237.14  2002 and thereafter. 
237.15     Sec. 14.  Minnesota Statutes 2000, section 477A.14, is 
237.16  amended to read: 
237.17     477A.14 [USE OF FUNDS.] 
237.18     Subdivision 1.  [GENERAL DISTRIBUTION.] Except as provided 
237.19  in section 97A.061, subdivision 5, or in subdivision 2, 40 
237.20  percent of the total payment to the county shall be deposited in 
237.21  the county general revenue fund to be used to provide property 
237.22  tax levy reduction.  The remainder shall be distributed by the 
237.23  county in the following priority:  
237.24     (a) 37.5 cents, as adjusted for inflation under section 
237.25  477A.145, for each acre of county-administered other natural 
237.26  resources land shall be deposited in a resource development fund 
237.27  to be created within the county treasury for use in resource 
237.28  development, forest management, game and fish habitat 
237.29  improvement, and recreational development and maintenance of 
237.30  county-administered other natural resources land.  Any county 
237.31  receiving less than $5,000 annually for the resource development 
237.32  fund may elect to deposit that amount in the county general 
237.33  revenue fund; 
237.34     (b) From the funds remaining, within 30 days of receipt of 
237.35  the payment to the county, the county treasurer shall pay each 
237.36  organized township 30 cents, as adjusted for inflation under 
238.1   section 477A.145, for each acre of acquired natural resources 
238.2   land and each acre of land described in section 477A.12, 
238.3   subdivision 1, paragraph (b), and 7.5 cents, as adjusted for 
238.4   inflation under section 477A.145, for each acre of other natural 
238.5   resources land located within its boundaries.  Payments for 
238.6   natural resources lands not located in an organized township 
238.7   shall be deposited in the county general revenue fund.  Payments 
238.8   to counties and townships pursuant to this paragraph shall be 
238.9   used to provide property tax levy reduction, except that of the 
238.10  payments for natural resources lands not located in an organized 
238.11  township, the county may allocate the amount determined to be 
238.12  necessary for maintenance of roads in unorganized townships.  
238.13  Provided that, if the total payment to the county pursuant to 
238.14  section 477A.12 is not sufficient to fully fund the distribution 
238.15  provided for in this clause, the amount available shall be 
238.16  distributed to each township and the county general revenue fund 
238.17  on a pro rata basis; and 
238.18     (c) Any remaining funds shall be deposited in the county 
238.19  general revenue fund.  Provided that, if the distribution to the 
238.20  county general revenue fund exceeds $35,000, the excess shall be 
238.21  used to provide property tax levy reduction. 
238.22     Subd. 2.  [DISTRIBUTION FOR CONSOLIDATED CONSERVATION 
238.23  LANDS.] In the case of payments for consolidated conservation 
238.24  land, 15 percent of the amount paid on account of that land 
238.25  under section 477A.12, must be distributed to the county for use 
238.26  as provided in section 84A.51, subdivision 4, clause (1).  The 
238.27  remainder of the payment under section 477A.12 will be 
238.28  distributed in proportion to the distributions described in 
238.29  subdivision 1. 
238.30     [EFFECTIVE DATE.] This section is effective for payments 
238.31  made in 2002 and thereafter. 
238.32     Sec. 15.  Minnesota Statutes 2000, section 477A.145, is 
238.33  amended to read: 
238.34     477A.145 [INFLATION ADJUSTMENT.] 
238.35     In 2001 2002 and each year thereafter, the amounts required 
238.36  to be adjusted for inflation in sections 477A.12 and 477A.14 
239.1   shall be increased to an amount equal to:  (1) the amount before 
239.2   the inflation adjustment multiplied by (2) one plus the 
239.3   percentage increase in the implicit price deflator for 
239.4   government consumption expenditures and gross investment for 
239.5   state and local governments prepared by the Bureau of Economic 
239.6   Analysis of the United States Department of Commerce for the 
239.7   period indicated below:  (i) the period starting with the first 
239.8   quarter of 1994 1980 and ending with the third quarter of the 
239.9   calendar year prior to the year in which aid is paid, provided 
239.10  that lands acquired by the state under chapter 84A that are 
239.11  designated as state parks, state recreation areas, scientific 
239.12  and natural areas, or wildlife management areas are included in 
239.13  the definition of acquired natural resource land under section 
239.14  477A.11 for calculating payments in calendar year 2001 and 
239.15  thereafter; (ii) otherwise the period starting with the first 
239.16  quarter of 1987 and ending with the third quarter of the 
239.17  calendar year prior to the year in which the aid is paid.  
239.18  These adjusted amounts must be rounded to the nearest one-tenth 
239.19  of a cent. 
239.20     [EFFECTIVE DATE.] This section is effective for payments 
239.21  made in 2002 and thereafter. 
239.22     Sec. 16.  [REPEALER.] 
239.23     Minnesota Statutes 2000, sections 477A.011, subdivisions 
239.24  35, 36, and 37; and 477A.03, subdivision 4, are repealed. 
239.25     [EFFECTIVE DATE.] This section is effective for aids 
239.26  payable in calendar year 2002 and thereafter. 
239.27                             ARTICLE 11
239.28                  SUSTAINABLE FOREST INCENTIVE ACT
239.29     Section 1.  Minnesota Statutes 2000, section 88.49, 
239.30  subdivision 5, is amended to read: 
239.31     Subd. 5.  [CANCELLATION.] Upon the failure of the owner 
239.32  faithfully to fulfill and perform such contract or any provision 
239.33  thereof, or any requirement of sections 88.47 to 88.53, or any 
239.34  rule adopted by the commissioner thereunder, the commissioner 
239.35  may cancel the contract in the manner herein provided.  The 
239.36  commissioner shall give to the owner, in the manner prescribed 
240.1   in section 88.48, subdivision 4, 60 days' notice of a hearing 
240.2   thereon at which the owner may appear and show cause, if any, 
240.3   why the contract should not be canceled.  The commissioner shall 
240.4   thereupon determine whether the contract should be canceled and 
240.5   make an order to that effect.  Notice of the commissioner's 
240.6   determination and the making of the order shall be given to the 
240.7   owner in the manner provided in section 88.48, subdivision 4.  
240.8   On determining that the contract should be canceled and no 
240.9   appeal therefrom be taken, the commissioner shall send notice 
240.10  thereof to the auditor of the county and to the town clerk of 
240.11  the town affected and file with the recorder a certified copy of 
240.12  the order, who shall forthwith note the cancellation upon the 
240.13  record thereof, and thereupon the land therein described shall 
240.14  cease to be an auxiliary forest and, together with the timber 
240.15  thereon, become liable to all taxes and assessments that 
240.16  otherwise would have been levied against it had it never been an 
240.17  auxiliary forest from the time of the making of the contract, 
240.18  any provisions of the statutes of limitation to the contrary 
240.19  notwithstanding, less the amount of taxes paid under the 
240.20  provisions of section 88.51, subdivision 1, together with 
240.21  interest on such taxes and assessments at six percent per annum, 
240.22  but without penalties. 
240.23     The commissioner may in like manner and with like effect 
240.24  cancel the contract upon written application of the owner. 
240.25     The commissioner shall cancel any contract if the owner has 
240.26  made successful application under sections 270.31 to 270.39 
240.27  inclusive 290C.01 to 290C.11, the Minnesota Tree Growth Tax Law 
240.28  Sustainable Forest Incentive Act, and has paid to the county 
240.29  treasurer the difference between the amount which would have 
240.30  been paid had the land under contract been subject to the 
240.31  Minnesota Tree Growth Tax Law and the Sustainable Forest 
240.32  Incentive Act from the date of the filing of the contract and 
240.33  the amount actually paid under section 88.51, subdivisions 1 and 
240.34  2.  This tax difference must be calculated based on the years 
240.35  the lands would have been taxed under the Tree Growth Tax Law 
240.36  and the Sustainable Forest Incentive Act.  The sustainable 
241.1   forest tax difference is net of the refund provision of section 
241.2   290C.07.  If the amount which would have been paid, had the land 
241.3   under contract been under the Minnesota Tree Growth Tax Law and 
241.4   the Sustainable Forest Incentive Act from the date of the filing 
241.5   of the contract, is less than the amount actually paid under the 
241.6   contract, the cancellation shall be made without further payment 
241.7   by the owner. 
241.8      When the execution of any contract creating an auxiliary 
241.9   forest shall have been procured through fraud or deception 
241.10  practiced upon the county board or the commissioner or any other 
241.11  person or body representing the state, it may be canceled upon 
241.12  suit brought by the attorney general at the direction of the 
241.13  commissioner.  This cancellation shall have the same effect as 
241.14  the cancellation of a contract by the commissioner. 
241.15     Sec. 2.  Minnesota Statutes 2000, section 88.49, 
241.16  subdivision 9a, is amended to read: 
241.17     Subd. 9a.  [LAND TRADES WITH GOVERNMENTAL UNITS.] 
241.18  Notwithstanding subdivisions 6 and 9, or section 88.491, 
241.19  subdivision 2, if an owner trades land under auxiliary forest 
241.20  contract for land owned by a governmental unit and the owner 
241.21  agrees to use the land received in trade from the governmental 
241.22  unit for the production of forest products, upon resolution of 
241.23  the county board, no taxes and assessments shall be levied 
241.24  against the land traded, except that any current or delinquent 
241.25  annual taxes or yield taxes due on that land while it was under 
241.26  the auxiliary forest provision must be paid prior to the land 
241.27  exchange.  The land received from the governmental unit in the 
241.28  land trade automatically qualifies for inclusion in the Tree 
241.29  Growth Tax Law Sustainable Forest Incentive Act. 
241.30     Sec. 3.  Minnesota Statutes 2000, section 88.491, 
241.31  subdivision 2, is amended to read: 
241.32     Subd. 2.  [EFFECT OF EXPIRED CONTRACT.] When auxiliary 
241.33  forest contracts expire, or prior to expiration by mutual 
241.34  agreement between the land owner and the appropriate county 
241.35  office, the lands previously covered by an auxiliary forest 
241.36  contract automatically qualify for inclusion in the Tree Growth 
242.1   Tax Law under the provisions of the Sustainable Forest Incentive 
242.2   Act; provided that when such lands are included in the Tree 
242.3   Growth Tax Law Sustainable Forest Incentive Act prior to 
242.4   expiration of the auxiliary forest contract they will be 
242.5   transferred and a tax paid as provided in accordance with the 
242.6   provisions of section 88.49, subdivision 5, upon application and 
242.7   inclusion in the sustainable forest incentive program.  The land 
242.8   owner shall pay taxes in an amount equal to the difference 
242.9   between: 
242.10     (1) the sum of: 
242.11     (i) the amount which would have been paid from the date of 
242.12  the filing of the contract had the land under contract been 
242.13  subject to the Minnesota Tree Growth Tax Law from the date of 
242.14  the filing of the contract and; plus 
242.15     (ii) beginning with taxes payable in 2003, the taxes that 
242.16  would have been paid if the land had been enrolled in the 
242.17  sustainable forest incentive program; and 
242.18     (2) the amount actually paid under section 88.51, 
242.19  subdivisions 1 and 2. 
242.20     Sec. 4.  Minnesota Statutes 2000, section 270A.03, 
242.21  subdivision 7, is amended to read: 
242.22     Subd. 7.  [REFUND.] "Refund" means an individual income tax 
242.23  refund or political contribution refund, pursuant to chapter 
242.24  290, or a property tax credit or refund, pursuant to chapter 
242.25  290A, or a sustainable forest tax payment to a claimant under 
242.26  chapter 290C.  
242.27     For purposes of this chapter, lottery prizes, as set forth 
242.28  in section 349A.08, subdivision 8, and amounts granted to 
242.29  persons by the legislature on the recommendation of the joint 
242.30  senate-house of representatives subcommittee on claims shall be 
242.31  treated as refunds. 
242.32     In the case of a joint property tax refund payable to 
242.33  spouses under chapter 290A, the refund shall be considered as 
242.34  belonging to each spouse in the proportion of the total refund 
242.35  that equals each spouse's proportion of the total income 
242.36  determined under section 290A.03, subdivision 3.  In the case of 
243.1   a joint income tax refund under chapter 289A, the refund shall 
243.2   be considered as belonging to each spouse in the proportion of 
243.3   the total refund that equals each spouse's proportion of the 
243.4   total taxable income determined under section 290.01, 
243.5   subdivision 29.  The commissioner shall remit the entire refund 
243.6   to the claimant agency, which shall, upon the request of the 
243.7   spouse who does not owe the debt, determine the amount of the 
243.8   refund belonging to that spouse and refund the amount to that 
243.9   spouse.  For court fines, fees, and surcharges and court-ordered 
243.10  restitution under section 611A.04, subdivision 2, the notice 
243.11  provided by the commissioner of revenue under section 270A.07, 
243.12  subdivision 2, paragraph (b), serves as the appropriate legal 
243.13  notice to the spouse who does not owe the debt. 
243.14     [EFFECTIVE DATE.] This section is effective for refunds in 
243.15  2003 and thereafter. 
243.16     Sec. 5.  [290C.01] [PURPOSE.] 
243.17     It is the policy of this state to promote sustainable 
243.18  forest resource management on the state's public and private 
243.19  lands.  Recognizing that private forests comprise approximately 
243.20  one-half of the state forest land resources, that healthy and 
243.21  robust forest land provides significant benefits to the state of 
243.22  Minnesota, and that ad valorem property taxes represent a 
243.23  significant annual cost that can discourage long-term forest 
243.24  management investments, this chapter, hereafter referred to as 
243.25  the "Sustainable Forest Incentive Act," is enacted to encourage 
243.26  the state's private forest landowners to make a long-term 
243.27  commitment to sustainable forest management. 
243.28     [EFFECTIVE DATE.] This section is effective for taxes 
243.29  levied in 2002, payable in 2003, and thereafter. 
243.30     Sec. 6.  [290C.02] [DEFINITIONS.] 
243.31     Subdivision 1.  [APPLICATION.] When used in sections 
243.32  290C.01 to 290C.11, the terms in this section have the meanings 
243.33  given them. 
243.34     Subd. 2.  [APPROVED PLAN WRITERS.] "Approved plan writers" 
243.35  are natural resource professionals who are self-employed, 
243.36  employed by private companies or individuals, nonprofit 
244.1   organizations, local units of government, or public agencies, 
244.2   and who are approved by the commissioner of natural resources.  
244.3   Persons determined to be certified foresters by the Society of 
244.4   American Foresters shall be deemed to meet the standards 
244.5   required under this subdivision.  The commissioner of natural 
244.6   resources shall issue a unique identification number to each 
244.7   approved planner. 
244.8      Subd. 3.  [CLAIMANT.] "Claimant" means a person, as that 
244.9   term is defined in section 290.01, subdivision 2, who owns 
244.10  forest land in Minnesota and files an application authorized by 
244.11  the Sustainable Forest Incentive Act.  No more than one claimant 
244.12  is entitled to a payment under this chapter with respect to any 
244.13  tract, parcel, or piece of land enrolled under this chapter.  
244.14  When enrolled forest land is owned by two or more persons, the 
244.15  owners must determine between them which person may claim the 
244.16  refunds provided under sections 290C.01 to 290C.11. 
244.17     Subd. 4.  [COMMISSIONER.] "Commissioner" means the 
244.18  commissioner of revenue. 
244.19     Subd. 5.  [CURRENT USE VALUE.] "Current use value" means 
244.20  the statewide average annual income per acre, multiplied by 90 
244.21  percent and divided by the capitalization rate determined under 
244.22  subdivision 9.  The statewide net annual income shall be a 
244.23  weighted average based on the most recent data as of July 1 of 
244.24  the computation year on stumpage prices and annual tree growth 
244.25  rates and acreage by cover type provided by the department of 
244.26  natural resources and the United States Forest Service. 
244.27     Subd. 6.  [FOREST LAND.] "Forest land" means land 
244.28  containing a minimum of 20 contiguous acres for which the owner 
244.29  has implemented a forest management plan that was prepared or 
244.30  updated within the past ten years by an approved plan writer.  
244.31  At least 50 percent of the contiguous acreage must meet the 
244.32  definition of forest land in section 88.01, subdivision 7.  For 
244.33  the purposes of sections 290C.01 to 209C.11, forest land does 
244.34  not include (i) land used for residential or agricultural 
244.35  purposes, (ii) land enrolled in the reinvest in Minnesota 
244.36  program, a state or federal conservation reserve or easement 
245.1   reserve program under sections 103F.501 to 103F.531, the 
245.2   Minnesota agricultural property tax law under section 273.111, 
245.3   or land subject to agricultural land preservation controls or 
245.4   restrictions as defined in section 40A.02 or under the 
245.5   Metropolitan Agricultural Preserves Act under chapter 473H, or 
245.6   (iii) land improved with a structure, pavement, sewer, campsite, 
245.7   or any road, other than a township road, used for purposes not 
245.8   prescribed in the forest management plan. 
245.9      Subd. 7.  [FOREST MANAGEMENT PLAN.] "Forest management plan"
245.10  means a written document providing a framework for site-specific 
245.11  healthy, productive, and sustainable forest resources.  A forest 
245.12  management plan must include at least the following:  (i) 
245.13  owner-specific forest management goals for the property 
245.14  including, when available, goals for individual cover types; 
245.15  (ii) a reliable field inventory of the individual forest cover 
245.16  types, their age, and density; (iii) a description of the soil 
245.17  type and quality; (iv) an aerial photo and/or map of the 
245.18  vegetation and other natural features of the property clearly 
245.19  indicating the boundaries of the property and of the forest 
245.20  land; (v) the proposed future conditions of the property; (vi) 
245.21  prescriptions to meet proposed future conditions of the 
245.22  property; (vii) a recommended timetable for implementing the 
245.23  prescribed activities; and (viii) a legal description of the 
245.24  parcels encompassing the parcels included in the plan.  All 
245.25  management activities prescribed in a plan must be in accordance 
245.26  with the recommended timber harvesting and forest management 
245.27  guidelines developed under section 89A.05.  The commissioner of 
245.28  natural resources shall provide a framework for plan content and 
245.29  updating and revising plans. 
245.30     Subd. 8.  [TIMBER HARVESTING AND FOREST MANAGEMENT 
245.31  GUIDELINES.] "Timber harvesting and forest management guidelines"
245.32  means guidelines developed under section 89A.05 and adopted by 
245.33  the Minnesota forest resources council in 1998. 
245.34     Subd. 9.  [CAPITALIZATION RATE.] By July 1 of each year, 
245.35  the commissioner shall determine a statewide capitalization rate 
245.36  for use under this chapter.  The rate shall be the average 
246.1   annual effective interest rate for St. Paul on new loans under 
246.2   the Farm Credit Bank system calculated under section 
246.3   2032A(e)(7)(A) of the Internal Revenue Code. 
246.4      [EFFECTIVE DATE.] This section is effective for taxes 
246.5   levied in 2002, payable in 2003, and thereafter. 
246.6      Sec. 7.  [290C.03] [ELIGIBILITY REQUIREMENTS.] 
246.7      (a) Property may be enrolled in the sustainable forest 
246.8   incentive program under this chapter if all of the following 
246.9   conditions are met: 
246.10     (1) property consists of at least 20 contiguous acres and 
246.11  at least 50 percent of the land must meet the definition of 
246.12  forest land in section 88.01, subdivision 7, during the 
246.13  enrollment; 
246.14     (2) a forest management plan for the property must be 
246.15  prepared by an approved plan writer and implemented during the 
246.16  period in which the land is enrolled; 
246.17     (3) timber harvesting and forest management guidelines must 
246.18  be used in conjunction with any timber harvesting or forest 
246.19  management activities conducted on the land during the period in 
246.20  which the land is enrolled; 
246.21     (4) the property must be enrolled for a minimum of eight 
246.22  years; 
246.23     (5) there are no delinquent property taxes on the property; 
246.24  and 
246.25     (6) claimants enrolling more than 2,500 acres in the 
246.26  sustainable forest incentive program must allow year-round, 
246.27  nonmotorized access to fish and wildlife resources on enrolled 
246.28  land except within one-fourth mile of a permanent dwelling or 
246.29  during periods of high fire hazard as determined by the 
246.30  commissioner of natural resources. 
246.31     (b) Claimants required to allow access under paragraph (a), 
246.32  clause (6), do not by that action: 
246.33     (1) extend any assurance that the land is safe for any 
246.34  purpose; 
246.35     (2) confer upon the person the legal status of an invitee 
246.36  or licensee to whom a duty of care is owed; or 
247.1      (3) assume responsibility for or incur liability for any 
247.2   injury to the person or property caused by an act or omission of 
247.3   the person. 
247.4      [EFFECTIVE DATE.] This section is effective for taxes 
247.5   levied in 2002, payable in 2003, and thereafter. 
247.6      Sec. 8.  [290C.04] [APPLICATIONS.] 
247.7      (a) A landowner may apply to enroll forest land for the 
247.8   sustainable forest incentive program under this chapter.  The 
247.9   claimant must complete, sign, and submit an application to the 
247.10  commissioner by September 30 in order for the land to become 
247.11  eligible beginning in the next year.  The application shall be 
247.12  on a form prescribed by the commissioner and must include the 
247.13  information the commissioner deems necessary.  At a minimum, the 
247.14  application must show the following information for the land and 
247.15  the claimant:  (i) the claimant's social security number or 
247.16  state or federal business tax registration number and date of 
247.17  birth, (ii) the claimant's address, (iii) the claimant's 
247.18  signature, (iv) the county's parcel identification numbers for 
247.19  the tax parcels that completely contain the claimant's forest 
247.20  land that is sought to be enrolled, (v) the number of acres 
247.21  eligible for enrollment in the program, (vi) the approved plan 
247.22  writer's signature and identification number, and (vii) proof, 
247.23  in a form specified by the commissioner, that the claimant has 
247.24  executed and acknowledged in the manner required by law for a 
247.25  deed, and recorded, a covenant that the land is not and shall 
247.26  not be developed in a manner inconsistent with the requirements 
247.27  and conditions of this chapter.  The covenant shall state in 
247.28  writing that the covenant is binding on the claimant and the 
247.29  claimant's successor or assignee, and that it runs with the land 
247.30  for a period of not less than eight years.  The commissioner 
247.31  shall specify the form of the covenant and provide copies upon 
247.32  request.  The covenant must include a legal description that 
247.33  encompasses all the forest land that the claimant wishes to 
247.34  enroll under this section or the certificate of title number for 
247.35  that land if it is registered land. 
247.36     (b) In all cases, the commissioner shall notify the 
248.1   claimant within 90 days after receipt of a completed application 
248.2   that either the land has or has not been approved for enrollment.
248.3   The claimant for which the application is denied may, within 60 
248.4   days of receipt of a notice of denial, appeal the denial to the 
248.5   commissioner. 
248.6      (c) Within 45 days after the denial of an application, or 
248.7   within 45 days after the denial of an appeal, the commissioner 
248.8   shall execute and acknowledge a document releasing the land from 
248.9   the covenant required under this chapter.  The document must be 
248.10  mailed to the claimant and is entitled to be recorded. 
248.11     (d) The social security numbers collected from individuals 
248.12  under this section are private data as provided in section 13.49.
248.13  The state or federal business tax registration number and date 
248.14  of birth data collected under this section are also private data 
248.15  but may be shared with county assessors for purposes of tax 
248.16  administration and with county treasurers for purposes of the 
248.17  revenue recapture under chapter 270A. 
248.18     [EFFECTIVE DATE.] This section is effective for taxes 
248.19  levied in 2002, payable in 2003, and thereafter. 
248.20     Sec. 9.  [290C.05] [ANNUAL CERTIFICATION.] 
248.21     On or before July 1 of each year, beginning with the year 
248.22  after the claimant has received an approved application, the 
248.23  commissioner shall send each claimant enrolled under the 
248.24  sustainable forest incentive program a certification form.  The 
248.25  claimant must sign the certification, attesting that the 
248.26  requirements and conditions for continued enrollment in the 
248.27  program are currently being met, and must return the signed 
248.28  certification form to the commissioner by August 15 of that same 
248.29  year.  Failure to return an annual certification form by the due 
248.30  date shall result in removal of the lands from the provisions of 
248.31  the sustainable forest incentive program, and the imposition of 
248.32  any applicable removal penalty.  The claimant may appeal the 
248.33  removal and any associated penalty according to the procedures 
248.34  and within the time allowed under this chapter. 
248.35     [EFFECTIVE DATE.] This section is effective for taxes 
248.36  levied in 2002, payable in 2003, and thereafter. 
249.1      Sec. 10.  [290C.06] [CALCULATION OF AVERAGE ESTIMATED 
249.2   MARKET VALUE; TIMBERLAND.] 
249.3      The commissioner shall annually calculate a statewide 
249.4   average estimated market value per acre for class 2b timberland 
249.5   under section 273.13, subdivision 23, paragraph (b). 
249.6      [EFFECTIVE DATE.] This section is effective for taxes 
249.7   levied in 2002, payable in 2003, and thereafter. 
249.8      Sec. 11.  [290C.07] [CALCULATION OF INCENTIVE PAYMENT.] 
249.9      An approved claimant under the sustainable forest incentive 
249.10  program is eligible to receive an annual payment.  The payment 
249.11  shall equal the greater of: 
249.12     (1) the difference between the property tax that would be 
249.13  paid on the property using the previous year's statewide average 
249.14  total township tax rate and the class rate for class 2b 
249.15  timberland under section 273.13, subdivision 23, paragraph (b), 
249.16  if the property were valued at (i) the average statewide 
249.17  timberland market value per acre calculated under section 
249.18  290C.06, and (ii) the average statewide timberland current use 
249.19  value per acre calculated under section 290C.02, subdivision 5; 
249.20     (2) two-thirds of the property tax amount determined by 
249.21  using the previous year's statewide average total township tax 
249.22  rate, the estimated market value per acre as calculated in 
249.23  section 290C.06, and the class rate for 2b timberland under 
249.24  section 273.13, subdivision 23, paragraph (b); or 
249.25     (3) $1.50 per acre for each acre enrolled in the 
249.26  sustainable forest incentive program. 
249.27     [EFFECTIVE DATE.] This section is effective for taxes 
249.28  levied in 2002, payable in 2003, and thereafter. 
249.29     Sec. 12.  [290C.08] [ANNUAL INCENTIVE PAYMENT; 
249.30  APPROPRIATION.] 
249.31     Subdivision 1.  [ANNUAL PAYMENT.] An incentive payment on 
249.32  enrolled land will be made annually to each claimant in the 
249.33  amount determined under section 290C.07.  The incentive payment 
249.34  shall be paid on or before October 1 each year based on the 
249.35  certifications due August 15 of that year.  Interest at the 
249.36  annual rate determined under section 270.75 shall be included 
250.1   with any incentive payment not paid by the later of October 1 of 
250.2   the year the certification was due, or 45 days after the 
250.3   completed certification was returned or filed if the 
250.4   commissioner accepts a certification filed after August 15 of 
250.5   the taxes payable year as the resolution of an appeal. 
250.6      Subd. 2.  [APPROPRIATION.] The amount necessary to make the 
250.7   payments under this section is annually appropriated to the 
250.8   commissioner from the general fund. 
250.9      [EFFECTIVE DATE.] This section is effective for taxes 
250.10  levied in 2002, payable in 2003, and thereafter. 
250.11     Sec. 13.  [290C.09] [REMOVAL FOR PROPERTY TAX DELINQUENCY.] 
250.12     The commissioner shall immediately remove any property 
250.13  enrolled in the sustainable forest incentive program for which 
250.14  taxes are determined to be delinquent as provided in chapter 279 
250.15  and shall notify the claimant of such action.  Lands terminated 
250.16  from the sustainable forest incentive program under this section 
250.17  are not entitled to any payments provided in this chapter and 
250.18  are subject to removal penalties prescribed in section 290C.11.  
250.19  The claimant has 90 days from the receipt of notice from the 
250.20  commissioner under this section to pay the delinquent taxes.  If 
250.21  the delinquent taxes are paid within this 90-day period, the 
250.22  lands shall be reinstated in the program as if they had not been 
250.23  withdrawn and without the payment of a penalty. 
250.24     [EFFECTIVE DATE.] This section is effective for taxes 
250.25  levied in 2002, payable in 2003, and thereafter. 
250.26     Sec. 14.  [290C.10] [WITHDRAWAL PROCEDURES.] 
250.27     An approved claimant under the sustainable forest incentive 
250.28  program for a minimum of four years may notify the commissioner 
250.29  of the intent to terminate enrollment.  Within 90 days of 
250.30  receipt of notice to terminate enrollment, the commissioner 
250.31  shall inform the claimant in writing, acknowledging receipt of 
250.32  this notice and indicating the effective date of termination 
250.33  from the sustainable forest incentive program.  Termination of 
250.34  enrollment in the sustainable forest incentive program occurs on 
250.35  January 1 of the fifth calendar year that begins after receipt 
250.36  by the commissioner of the termination notice.  After the 
251.1   commissioner issues an effective date of termination, a claimant 
251.2   wishing to continue the property's enrollment in the sustainable 
251.3   forest incentive program beyond the termination date must apply 
251.4   for enrollment as prescribed in section 290C.04.  A claimant who 
251.5   withdraws a parcel of land from this program may not reenroll 
251.6   the parcel for a period of three years.  Within 45 days after 
251.7   the termination date, the commissioner shall execute and 
251.8   acknowledge a document releasing the land from the covenant 
251.9   required under this chapter.  The document must be mailed to the 
251.10  claimant and is entitled to be recorded.  The commissioner may 
251.11  allow early withdrawal from the Sustainable Forest Incentive Act 
251.12  without penalty in cases of condemnation for a public purpose 
251.13  notwithstanding the provisions of this section. 
251.14     [EFFECTIVE DATE.] This section is effective for taxes 
251.15  levied in 2002, payable in 2003, and thereafter. 
251.16     Sec. 15.  [290C.11] [PENALTIES FOR REMOVAL.] 
251.17     (a) If the commissioner determines that property enrolled 
251.18  in the sustainable forest incentive program is in violation of 
251.19  the conditions for enrollment as specified in section 290C.03, 
251.20  the commissioner shall notify the claimant of the intent to 
251.21  remove all enrolled land from the sustainable forest incentive 
251.22  program.  The claimant has 90 days to appeal this determination. 
251.23  The appeal must be made in writing to the commissioner, who 
251.24  shall, within 60 days, notify the claimant as to the outcome of 
251.25  the appeal.  Within 60 days after the commissioner denies an 
251.26  appeal, or within 120 days after the commissioner received a 
251.27  written appeal if the commissioner has not made a determination 
251.28  in that time, the owner may appeal to tax court under chapter 
251.29  271 as if the appeal is from an order of the commissioner. 
251.30     (b) If the commissioner determines the property is to be 
251.31  removed from the sustainable forest incentive program, the 
251.32  claimant is liable for payment to the commissioner in the amount 
251.33  equal to the payments received under this chapter for the 
251.34  previous four-year period, plus interest.  The claimant has 90 
251.35  days to satisfy the payment for removal of land from the 
251.36  sustainable forest incentive program under this section.  If the 
252.1   penalty is not paid within the 90-day period under paragraph 
252.2   (a), the commissioner shall certify the amount to the county 
252.3   auditor for collection as a part of the general ad valorem real 
252.4   property taxes on the land in the following taxes payable year.  
252.5      [EFFECTIVE DATE.] This section is effective for taxes 
252.6   levied in 2002, payable in 2003, and thereafter. 
252.7      Sec. 16.  [REPEALER.] 
252.8      Minnesota Statutes 2000, sections 270.31; 270.32; 270.33; 
252.9   270.34; 270.35; 270.36; 270.37; 270.38; and 270.39, are repealed.
252.10     [EFFECTIVE DATE.] This section is effective for taxes 
252.11  levied in 2002, payable in 2003, and thereafter. 
252.12                             ARTICLE 12
252.13                         LOCAL DEVELOPMENT
252.14     Section 1.  Minnesota Statutes 2000, section 273.1399, 
252.15  subdivision 6, is amended to read: 
252.16     Subd. 6.  [EXEMPT DISTRICTS.] (a) The provisions of this 
252.17  section do not apply to exempt tax increment financing districts 
252.18  as specified by this subdivision. 
252.19     (b) A tax increment financing district for an ethanol 
252.20  production facility that satisfies all of the following 
252.21  requirements is exempt: 
252.22     (1) The district is an economic development district, that 
252.23  qualifies under section 469.176, subdivision 4c, paragraph (a), 
252.24  clause (1). 
252.25     (2) The facility is certified by the commissioner of 
252.26  agriculture to qualify for state payments for ethanol 
252.27  development under section 41A.09 to the extent funds are 
252.28  available. 
252.29     (3) Increments from the district are used only to finance 
252.30  the qualifying ethanol development project located in the 
252.31  district or to pay for administrative costs of the district. 
252.32     (4) The district is located outside of the seven-county 
252.33  metropolitan area, as defined in section 473.121. 
252.34     (5) The tax increment financing plan was approved by a 
252.35  resolution of the county board. 
252.36     (6) The exemption provided by this paragraph applies until 
253.1   the first year after the total amount of increment for the 
253.2   district exceeds $1,500,000.  The county auditor shall notify 
253.3   the commissioner of revenue of the expiration of the exemption 
253.4   by June 1 of the year in which the auditor projects the revenues 
253.5   from increments will exceed $1,500,000.  On or before the 
253.6   expiration of the exemption, the municipality may elect to make 
253.7   a qualifying local contribution under paragraph (d) in lieu of 
253.8   the state aid reduction. 
253.9      (c) A qualified housing district is exempt. 
253.10     (d)(1) A district is exempt if the municipality elects at 
253.11  the time of approving the tax increment financing plan for the 
253.12  district to make a qualifying local contribution.  To qualify 
253.13  for the exemption in each year, the authority or the 
253.14  municipality must make a qualifying local contribution equal to 
253.15  the listed percentages of increment from the district or 
253.16  subdistrict: 
253.17     (A) for an economic development district or a renewal and 
253.18  renovation district, ten percent; 
253.19     (B) for a redevelopment district, a housing district, a 
253.20  mined underground space district, a hazardous substance 
253.21  subdistrict, or a soils condition district, five percent. 
253.22     (2) If the municipality elects to make a qualifying 
253.23  contribution and fails to make the required contribution for a 
253.24  year, the state aid reduction applies for the year.  The state 
253.25  aid reduction equals the greater of (A) the required local 
253.26  contribution or (B) the amount of the aid reduction that applies 
253.27  under subdivision 3.  For a district exempt under paragraph (b), 
253.28  no qualifying local contribution is required for years in which 
253.29  the district is exempt. 
253.30     (3)(A) If the sum of required local contributions for all 
253.31  districts in the municipality exceeds two percent of city net 
253.32  tax capacity as defined in section 477A.011, subdivision 20, for 
253.33  a year, the municipality's total required local contribution for 
253.34  that year is limited to two percent of net tax capacity to 
253.35  qualify for the exemption under this subdivision.  The 
253.36  municipality may allocate the contribution among the districts 
254.1   on which it has made elections as it determines appropriate. 
254.2      (B) If a municipality makes an election under this 
254.3   subdivision for a district in a year in which item (A) applies, 
254.4   a minimum annual qualifying contribution must be made for the 
254.5   district equal to the lesser of 0.25 percent of city net tax 
254.6   capacity or three percent of increment revenues.  This minimum 
254.7   contribution applies for the life of the district for each year 
254.8   that the restriction in item (A) applies and is in addition to 
254.9   the contribution required by item (A). 
254.10     (4) The amount of the local contribution must be made out 
254.11  of unrestricted money of the authority or municipality, such as 
254.12  the general fund, a property tax levy, or a federal or a state 
254.13  grant-in-aid which may be spent for general government 
254.14  purposes.  The local contribution may not be made, directly or 
254.15  indirectly, with tax increments or developer payments as defined 
254.16  under section 469.1766.  The local contribution must be used to 
254.17  pay project costs and cannot be used for general government 
254.18  purposes or for improvements or costs that the authority or 
254.19  municipality planned to incur absent the project.  The authority 
254.20  or municipality may request contributions from other local 
254.21  government entities that will benefit from the district's 
254.22  activities.  These contributions reduce the local contribution 
254.23  required of the municipality or authority by this paragraph.  
254.24  Cities, counties, towns, and schools may contribute to paying 
254.25  these costs, notwithstanding any other law to the contrary. 
254.26     (5) The municipality may make a local contribution in 
254.27  excess of the required contribution for a year.  If it does so, 
254.28  the municipality may credit the excess to a local contribution 
254.29  account for the district.  The balance in the account may be 
254.30  used to meet the requirements for qualifying local contributions 
254.31  for later years.  No interest or investment earnings may be 
254.32  credited or imputed to the account, except those (A) actually 
254.33  paid by the municipality out of its unrestricted funds or by 
254.34  another person or entity, other than a developer as used in 
254.35  section 469.1766, and (B) used as required for a qualifying 
254.36  local contribution. 
255.1      (6) If the state contributes to the project costs through a 
255.2   direct grant or similar incentive, the required local 
255.3   contribution is reduced by one-half of the dollar amount of the 
255.4   state grant or other similar incentive. 
255.5      [EFFECTIVE DATE.] This section is effective the day 
255.6   following final enactment. 
255.7      Sec. 2.  Minnesota Statutes 2000, section 273.1399, is 
255.8   amended by adding a subdivision to read: 
255.9      Subd. 9.  [CONTRIBUTIONS TO AFFORDABLE HOUSING FUNDS.] In 
255.10  lieu of the state aid offset or local contribution under this 
255.11  section, a city may elect, in the tax increment financing plan, 
255.12  to make a contribution to an affordable housing fund.  To 
255.13  qualify under this paragraph, the city must: 
255.14     (1) make a contribution to the affordable housing fund at 
255.15  the times and in the amounts required for a local contribution 
255.16  under the provisions of subdivision 6 for the district; 
255.17     (2) make the contribution out of funds that would qualify 
255.18  as a local contribution under subdivision 6; and 
255.19     (3) spend the funds in the affordable housing account 
255.20  within five years after the amounts are contributed on a project 
255.21  that meets the requirements of a qualified housing district. 
255.22  Failure to make a contribution to an affordable housing fund as 
255.23  required by this paragraph has the same effect as the city 
255.24  failing to make an elected local contribution under subdivision 
255.25  6. 
255.26     [EFFECTIVE DATE.] This section is effective for tax 
255.27  increment financing districts (1) for which the request for 
255.28  certification is made after June 30, 2001, and (2) for which the 
255.29  request for certification was made after June 30, 1994, if the 
255.30  municipality elected to make a local contribution under 
255.31  Minnesota Statutes, section 273.1399, subdivision 6. 
255.32     Sec. 3.  Minnesota Statutes 2000, section 276A.01, 
255.33  subdivision 3, is amended to read: 
255.34     Subd. 3.  [COMMERCIAL-INDUSTRIAL PROPERTY.] 
255.35  "Commercial-industrial property" means the following categories 
255.36  of property, as defined in section 273.13, excluding that 
256.1   portion of the property (i) that may, by law, constitute the tax 
256.2   base for a tax increment pledged pursuant to section 469.042 or 
256.3   469.162 or sections 469.174 to 469.178, certification of which 
256.4   was requested prior to May 1, 1996, to the extent and while the 
256.5   tax increment is so pledged; or (ii) that is exempt from 
256.6   taxation under section 272.02:  
256.7      (1) that portion of class 5 property consisting of unmined 
256.8   iron ore and low-grade iron-bearing formations as defined in 
256.9   section 273.14, tools, implements, and machinery, except the 
256.10  portion of high voltage transmission lines, the value of which 
256.11  is deducted from net tax capacity under section 273.425; and 
256.12     (2) that portion of class 3 and class 5 property which is 
256.13  either used or zoned for use for any commercial or industrial 
256.14  purpose, except for such property which is, or, in the case of 
256.15  property under construction, will when completed be used 
256.16  exclusively for residential occupancy and the provision of 
256.17  services to residential occupants thereof.  Property must be 
256.18  considered as used exclusively for residential occupancy only if 
256.19  each of not less than 80 percent of its occupied residential 
256.20  units is, or, in the case of property under construction, will 
256.21  when completed be occupied under an oral or written agreement 
256.22  for occupancy over a continuous period of not less than 30 days. 
256.23     If the classification of property prescribed by section 
256.24  273.13 is modified by legislative amendment, the references in 
256.25  this subdivision are to the successor class or classes of 
256.26  property, or portions thereof, that include the kinds of 
256.27  property designated in this subdivision.  
256.28     [EFFECTIVE DATE.] This section is effective retroactive to 
256.29  July 1, 1997, for taxes levied in 1997, payable in 1998, and 
256.30  subsequent years. 
256.31     Sec. 4.  Minnesota Statutes 2000, section 297A.64, is 
256.32  amended by adding a subdivision to read: 
256.33     Subd. 2a.  [ADDITIONAL FEE IMPOSED.] An additional fee 
256.34  equal to three percent of the sales price is imposed on leases 
256.35  or rentals of vehicles subject to the tax under subdivision 1.  
256.36     Sec. 5.  Minnesota Statutes 2000, section 297A.64, 
257.1   subdivision 3, is amended to read: 
257.2      Subd. 3.  [ADMINISTRATION.] The retailer shall report and 
257.3   pay the tax imposed in subdivision 1 and the additional fee 
257.4   imposed under subdivision 2a to the commissioner of revenue with 
257.5   the taxes imposed in this chapter.  The tax imposed in 
257.6   subdivision 1 and the fee fees imposed in subdivision 2 
257.7   subdivisions 2 and 2a are subject to the same interest, penalty, 
257.8   and other provisions provided for sales and use taxes under 
257.9   chapter 289A and this chapter.  The commissioner has the same 
257.10  powers to assess and collect the tax and fee that are given the 
257.11  commissioner in chapters 270 and 289A and this chapter to assess 
257.12  and collect sales and use tax. 
257.13     Sec. 6.  Minnesota Statutes 2000, section 297A.64, 
257.14  subdivision 4, is amended to read: 
257.15     Subd. 4.  [EXEMPTIONS.] (a) The tax and the fee fees 
257.16  imposed by this section do not apply to a lease or rental of (1) 
257.17  a vehicle to be used by the lessee to provide a licensed taxi 
257.18  service; (2) a hearse or limousine used in connection with a 
257.19  burial or funeral service; or (3) a van designed or adapted 
257.20  primarily for transporting property rather than passengers. 
257.21     (b) The lessor may elect not to charge the fee imposed in 
257.22  subdivision 2 if in the previous calendar year the lessor had no 
257.23  more than 20 vehicles available for lease that would have been 
257.24  subject to tax under this section, or no more than $50,000 in 
257.25  gross receipts that would have been subject to tax under this 
257.26  section. 
257.27     Sec. 7.  Minnesota Statutes 2000, section 297A.94, is 
257.28  amended to read: 
257.29     297A.94 [DEPOSIT OF REVENUES.] 
257.30     (a) Except as provided in this section, the commissioner 
257.31  shall deposit the revenues, including interest and penalties, 
257.32  derived from the taxes imposed by this chapter in the state 
257.33  treasury and credit them to the general fund.  
257.34     (b) The commissioner shall deposit taxes in the Minnesota 
257.35  agricultural and economic account in the special revenue fund if:
257.36     (1) the taxes are derived from sales and use of property 
258.1   and services purchased for the construction and operation of an 
258.2   agricultural resource project; and 
258.3      (2) the purchase was made on or after the date on which a 
258.4   conditional commitment was made for a loan guaranty for the 
258.5   project under section 41A.04, subdivision 3. 
258.6   The commissioner of finance shall certify to the commissioner 
258.7   the date on which the project received the conditional 
258.8   commitment.  The amount deposited in the loan guaranty account 
258.9   must be reduced by any refunds and by the costs incurred by the 
258.10  department of revenue to administer and enforce the assessment 
258.11  and collection of the taxes.  
258.12     (c) The commissioner shall deposit the revenues, including 
258.13  interest and penalties, derived from the taxes imposed on sales 
258.14  and purchases included in section 297A.61, subdivision 16, 
258.15  paragraphs (b) and (f), in the state treasury, and credit them 
258.16  as follows: 
258.17     (1) first to the general obligation special tax bond debt 
258.18  service account in each fiscal year the amount required by 
258.19  section 16A.661, subdivision 3, paragraph (b); and 
258.20     (2) after the requirements of clause (1) have been met, the 
258.21  balance to the general fund. 
258.22     (d) The commissioner shall deposit the revenues, including 
258.23  interest and penalties, collected under section 297A.64, 
258.24  subdivision 5, in the state treasury and credit them to the 
258.25  general fund.  By July 15 of each year the commissioner shall 
258.26  transfer to the highway user tax distribution fund an amount 
258.27  equal to the excess fees collected under section 297A.64, 
258.28  subdivision 5, for the previous calendar year. 
258.29     (e) For fiscal year 2001, 97 percent, and for fiscal year 
258.30  2002 and thereafter, 87 percent of the revenues, including 
258.31  interest and penalties, transmitted to the commissioner under 
258.32  section 297A.65, must be deposited by the commissioner in the 
258.33  state treasury as follows: 
258.34     (1) 50 percent of the receipts must be deposited in the 
258.35  heritage enhancement account in the game and fish fund, and may 
258.36  be spent only on activities that improve, enhance, or protect 
259.1   fish and wildlife resources, including conservation, 
259.2   restoration, and enhancement of land, water, and other natural 
259.3   resources of the state; 
259.4      (2) 22.5 percent of the receipts must be deposited in the 
259.5   natural resources fund, and may be spent only for state parks 
259.6   and trails; 
259.7      (3) 22.5 percent of the receipts must be deposited in the 
259.8   natural resources fund, and may be spent only on metropolitan 
259.9   park and trail grants; 
259.10     (4) three percent of the receipts must be deposited in the 
259.11  natural resources fund, and may be spent only on local trail 
259.12  grants; and 
259.13     (5) two percent of the receipts must be deposited in the 
259.14  natural resources fund, and may be spent only for the Minnesota 
259.15  zoological garden, the Como park zoo and conservatory, and the 
259.16  Duluth zoo. 
259.17     (f) The revenue dedicated under paragraph (e) may not be 
259.18  used as a substitute for traditional sources of funding for the 
259.19  purposes specified, but the dedicated revenue shall supplement 
259.20  traditional sources of funding for those purposes.  Land 
259.21  acquired with money deposited in the game and fish fund under 
259.22  paragraph (e) must be open to public hunting and fishing during 
259.23  the open season.  At least 87 percent of the money deposited in 
259.24  the game and fish fund for improvement, enhancement, or 
259.25  protection of fish and wildlife resources under paragraph (e) 
259.26  must be allocated for field operations. 
259.27     (g) The commissioner shall deposit the revenues derived 
259.28  from the fee imposed under section 297A.64, subdivision 2a, as 
259.29  follows: 
259.30     (1) the revenue from the tax imposed after June 30, 2001, 
259.31  and before July 1, 2005, must be deposited in the general fund 
259.32  for appropriation as provided in section 39; 
259.33     (2) the revenue from the tax imposed after June 30, 2005, 
259.34  and before July 1, 2026, must be deposited in the airport impact 
259.35  mitigation fund created in section 39; and 
259.36     (3) the revenue from the tax imposed after June 30, 2026, 
260.1   must be deposited in the general fund. 
260.2      Sec. 8.  [469.1083] [TOWNSHIP ECONOMIC DEVELOPMENT 
260.3   AUTHORITY; ESTABLISHMENT AND POWERS.] 
260.4      Subdivision 1.  [ESTABLISHMENT.] The board of township 
260.5   supervisors of a township that is the only township in a county 
260.6   may establish an economic development authority in the manner 
260.7   provided in sections 469.090 to 469.1081, and may impose limits 
260.8   on the authority provided in section 469.092.  The economic 
260.9   development authority has all of the powers and duties granted 
260.10  to or imposed upon economic development authorities under 
260.11  sections 469.090 to 469.1081.  The township economic development 
260.12  authority may create and define the boundaries of economic 
260.13  development districts at any place or places within the 
260.14  township, provided that a project as recommended by the township 
260.15  authority that is to be located within the corporate limits of a 
260.16  city may not be commenced without the approval of the governing 
260.17  body of the city.  Section 469.174, subdivision 10, and the 
260.18  contiguity requirement specified under section 469.101, 
260.19  subdivision 1, do not apply to limit the areas that may be 
260.20  designated as township economic development districts. 
260.21     Subd. 2.  [POWERS.] If an economic development authority is 
260.22  established as provided in subdivision 1, the township may 
260.23  exercise all of the powers relating to an economic development 
260.24  authority granted to a city under sections 469.090 to 469.1081, 
260.25  or other law, including the power to levy a tax to support the 
260.26  activities of the authority. 
260.27     Sec. 9.  Minnesota Statutes 2000, section 469.169, is 
260.28  amended by adding a subdivision to read: 
260.29     Subd. 15.  [ADDITIONAL BORDER CITY ALLOCATIONS.] In 
260.30  addition to tax reductions authorized in subdivisions 7 to 14, 
260.31  the commissioner shall allocate $1,500,000 for tax reductions to 
260.32  border city enterprise zones in cities located on the western 
260.33  border of the state.  The commissioner shall make allocations to 
260.34  zones in cities on the western border on a per capita basis.  
260.35  Allocations made under this subdivision may be used for tax 
260.36  reductions as provided in section 469.171, or for other offsets 
261.1   of taxes imposed on or remitted by businesses located in the 
261.2   enterprise zone, but only if the municipality determines that 
261.3   the granting of the tax reduction or offset is necessary in 
261.4   order to retain a business within or attract a business to the 
261.5   zone.  Any portion of the allocation provided in this section 
261.6   may alternatively be used for tax reductions under section 
261.7   469.1732 or 469.1734.  If, at the end of the biennium, the total 
261.8   amount allowable under this section has not been expended, a 
261.9   city that has expended its allocation may submit a request for 
261.10  an additional allocation for qualifying reductions from the 
261.11  amount remaining.  If more than one city exceeds their 
261.12  allocation and the additional qualifying amounts exceed the 
261.13  balance remaining, the commissioner shall allocate the amount 
261.14  remaining to each qualifying city in proportion to its request 
261.15  for additional allocation.  Limitations on allocations under 
261.16  subdivision 7 do not apply to this allocation. 
261.17     [EFFECTIVE DATE.] This section is effective the day 
261.18  following final enactment. 
261.19     Sec. 10.  Minnesota Statutes 2000, section 469.174, 
261.20  subdivision 10, is amended to read: 
261.21     Subd. 10.  [REDEVELOPMENT DISTRICT.] (a) "Redevelopment 
261.22  district" means a type of tax increment financing district 
261.23  consisting of a project, or portions of a project, within which 
261.24  the authority finds by resolution that one or more of the 
261.25  following conditions, reasonably distributed throughout the 
261.26  district, exists: 
261.27     (1) parcels consisting of 70 percent of the area of the 
261.28  district are occupied by buildings, streets, utilities, paved or 
261.29  gravel parking lots, or other improvements similar structures 
261.30  and more than 50 percent of the buildings, not including 
261.31  outbuildings, are structurally substandard to a degree requiring 
261.32  substantial renovation or clearance; or 
261.33     (2) the property consists of vacant, unused, underused, 
261.34  inappropriately used, or infrequently used railyards, rail 
261.35  storage facilities, or excessive or vacated railroad 
261.36  rights-of-way; or 
262.1      (3) tank facilities, or property whose immediately previous 
262.2   use was for tank facilities, as defined in section 115C.02, 
262.3   subdivision 15, if the tank facilities: 
262.4      (i) have or had a capacity of more than 1,000,000 gallons; 
262.5      (ii) are located adjacent to rail facilities; and 
262.6      (iii) have been removed or are unused, underused, 
262.7   inappropriately used, or infrequently used. 
262.8      (b) For purposes of this subdivision, "structurally 
262.9   substandard" shall mean containing defects in structural 
262.10  elements or a combination of deficiencies in essential utilities 
262.11  and facilities, light and ventilation, fire protection including 
262.12  adequate egress, layout and condition of interior partitions, or 
262.13  similar factors, which defects or deficiencies are of sufficient 
262.14  total significance to justify substantial renovation or 
262.15  clearance.  
262.16     (c) A building is not structurally substandard if it is in 
262.17  compliance with the building code applicable to new buildings or 
262.18  could be modified to satisfy the building code at a cost of less 
262.19  than 15 percent of the cost of constructing a new structure of 
262.20  the same square footage and type on the site.  The municipality 
262.21  may find that a building is not disqualified as structurally 
262.22  substandard under the preceding sentence on the basis of 
262.23  reasonably available evidence, such as the size, type, and age 
262.24  of the building, the average cost of plumbing, electrical, or 
262.25  structural repairs, or other similar reliable evidence.  The 
262.26  municipality may not make such a determination without an 
262.27  interior inspection of the property, but need not have an 
262.28  independent, expert appraisal prepared of the cost of repair and 
262.29  rehabilitation of the building.  An interior inspection of the 
262.30  property is not required, if the municipality finds that (1) the 
262.31  municipality or authority is unable to gain access to the 
262.32  property after using its best efforts to obtain permission from 
262.33  the party that owns or controls the property; and (2) the 
262.34  evidence otherwise supports a reasonable conclusion that the 
262.35  building is structurally substandard.  Items of evidence that 
262.36  support such a conclusion include recent fire or police 
263.1   inspections, on-site property tax appraisals or housing 
263.2   inspections, exterior evidence of deterioration, or other 
263.3   similar reliable evidence.  Written documentation of the 
263.4   findings and reasons why an interior inspection was not 
263.5   conducted must be made and retained under section 469.175, 
263.6   subdivision 3, clause (1). 
263.7      (d) A parcel is deemed to be occupied by a structurally 
263.8   substandard building for purposes of the finding under paragraph 
263.9   (a) if all of the following conditions are met: 
263.10     (1) the parcel was occupied by a substandard building 
263.11  within three years of the filing of the request for 
263.12  certification of the parcel as part of the district with the 
263.13  county auditor; 
263.14     (2) the substandard building was demolished or removed by 
263.15  the authority or the demolition or removal was financed by the 
263.16  authority or was done by a developer under a development 
263.17  agreement with the authority; 
263.18     (3) the authority found by resolution before the demolition 
263.19  or removal that the parcel was occupied by a structurally 
263.20  substandard building and that after demolition and clearance the 
263.21  authority intended to include the parcel within a district; and 
263.22     (4) upon filing the request for certification of the tax 
263.23  capacity of the parcel as part of a district, the authority 
263.24  notifies the county auditor that the original tax capacity of 
263.25  the parcel must be adjusted as provided by section 469.177, 
263.26  subdivision 1, paragraph (h). 
263.27     (e) For purposes of this subdivision, a parcel is not 
263.28  occupied by buildings, streets, utilities, paved or gravel 
263.29  parking lots, or other improvements similar structures unless 15 
263.30  percent of the area of the parcel contains improvements 
263.31  buildings, streets, utilities, paved or gravel parking lots, or 
263.32  other similar structures. 
263.33     (f) For districts consisting of two or more noncontiguous 
263.34  areas, each area must qualify as a redevelopment district under 
263.35  paragraph (a) to be included in the district, and the entire 
263.36  area of the district must satisfy paragraph (a). 
264.1      [EFFECTIVE DATE.] This section is effective for districts 
264.2   for which the request for certification is made after June 30, 
264.3   2001. 
264.4      Sec. 11.  Minnesota Statutes 2000, section 469.174, 
264.5   subdivision 10a, is amended to read: 
264.6      Subd. 10a.  [RENEWAL AND RENOVATION DISTRICT.] (a) "Renewal 
264.7   and renovation district" means a type of tax increment financing 
264.8   district consisting of a project, or portions of a project, 
264.9   within which the authority finds by resolution that: 
264.10     (1)(i) parcels consisting of 70 percent of the area of the 
264.11  district are occupied by buildings, streets, utilities, paved or 
264.12  gravel parking lots, or other improvements similar structures; 
264.13  (ii) 20 percent of the buildings are structurally substandard; 
264.14  and (iii) 30 percent of the other buildings require substantial 
264.15  renovation or clearance to remove existing conditions such as:  
264.16  inadequate street layout, incompatible uses or land use 
264.17  relationships, overcrowding of buildings on the land, excessive 
264.18  dwelling unit density, obsolete buildings not suitable for 
264.19  improvement or conversion, or other identified hazards to the 
264.20  health, safety, and general well-being of the community; and 
264.21     (2) the conditions described in clause (1) are reasonably 
264.22  distributed throughout the geographic area of the district. 
264.23     (b) For purposes of determining whether a building is 
264.24  structurally substandard, whether parcels are occupied by 
264.25  buildings, streets, utilities, paved or gravel parking lots, or 
264.26  other improvements similar structures, or whether noncontiguous 
264.27  areas qualify, the provisions of subdivision 10, 
264.28  paragraphs (b), (c), (e), and (d) (f) apply.  
264.29     [EFFECTIVE DATE.] This section is effective for districts 
264.30  for which the requests for certification are made after June 30, 
264.31  1997, except the provision requiring parcels to be occupied by 
264.32  structures is effective for districts for which the request for 
264.33  certification is made after June 30, 2001. 
264.34     Sec. 12.  Minnesota Statutes 2000, section 469.174, 
264.35  subdivision 12, is amended to read: 
264.36     Subd. 12.  [ECONOMIC DEVELOPMENT DISTRICT.] "Economic 
265.1   development district" means a type of tax increment financing 
265.2   district which consists of any project, or portions of a 
265.3   project, not meeting the requirements found in the definition of 
265.4   redevelopment district, renewal and renovation district, soils 
265.5   condition district, or housing district, but which the authority 
265.6   finds to be in the public interest because: 
265.7      (1) it will discourage commerce, industry, or manufacturing 
265.8   from moving their operations to another state or municipality; 
265.9   or 
265.10     (2) it will result in increased employment in the state; or 
265.11     (3) it will result in preservation and enhancement of the 
265.12  tax base of the state. 
265.13     [EFFECTIVE DATE.] This section is effective for districts 
265.14  for which the request for certification is made after June 30, 
265.15  2001. 
265.16     Sec. 13.  Minnesota Statutes 2000, section 469.175, 
265.17  subdivision 1, is amended to read: 
265.18     Subdivision 1.  [TAX INCREMENT FINANCING PLAN.] (a) A tax 
265.19  increment financing plan shall contain:  
265.20     (1) a statement of objectives of an authority for the 
265.21  improvement of a project; 
265.22     (2) a statement as to the development program for the 
265.23  project, including the property within the project, if any, that 
265.24  the authority intends to acquire; 
265.25     (3) a list of any development activities that the plan 
265.26  proposes to take place within the project, for which contracts 
265.27  have been entered into at the time of the preparation of the 
265.28  plan, including the names of the parties to the contract, the 
265.29  activity governed by the contract, the cost stated in the 
265.30  contract, and the expected date of completion of that activity; 
265.31     (4) identification or description of the type of any other 
265.32  specific development reasonably expected to take place within 
265.33  the project, and the date when the development is likely to 
265.34  occur; 
265.35     (5) estimates of the following:  
265.36     (i) cost of the project, including administration expenses; 
266.1      (ii) amount of bonded indebtedness to be incurred; 
266.2      (iii) sources of revenue to finance or otherwise pay public 
266.3   costs; 
266.4      (iv) the most recent net tax capacity of taxable real 
266.5   property within the tax increment financing district and within 
266.6   any subdistrict; 
266.7      (v) the estimated captured net tax capacity of the tax 
266.8   increment financing district at completion; and 
266.9      (vi) the duration of the tax increment financing district's 
266.10  and any subdistrict's existence; 
266.11     (6) statements of the authority's alternate estimates of 
266.12  the impact of tax increment financing on the net tax capacities 
266.13  of all taxing jurisdictions in which the tax increment financing 
266.14  district is located in whole or in part.  For purposes of one 
266.15  statement, the authority shall assume that the estimated 
266.16  captured net tax capacity would be available to the taxing 
266.17  jurisdictions without creation of the district, and for purposes 
266.18  of the second statement, the authority shall assume that none of 
266.19  the estimated captured net tax capacity would be available to 
266.20  the taxing jurisdictions without creation of the district or 
266.21  subdistrict; 
266.22     (7) identification and description of studies and analyses 
266.23  used to make the determination set forth in subdivision 3, 
266.24  clause (2); and 
266.25     (8) identification of all parcels to be included in the 
266.26  district or any subdistrict. 
266.27     (b) For a housing district, redevelopment district, or a 
266.28  hazardous substance subdistrict, the authority may elect in the 
266.29  tax increment financing plan to provide for the identification 
266.30  of a minimum market value in the plan, development agreement, or 
266.31  assessment agreement, and provide that increment is first 
266.32  received by the authority when (1) the market value of the 
266.33  improvements as determined by the assessor reaches or exceeds 
266.34  the minimum market value, or (2) four years has elapsed from the 
266.35  date of certification of the original net tax capacity of the 
266.36  taxable real property in the district or subdistrict by the 
267.1   county auditor, whichever is earlier. 
267.2      [EFFECTIVE DATE.] This section is effective for requests 
267.3   for certification of tax increment financing districts received 
267.4   after June 30, 2001. 
267.5      Sec. 14.  Minnesota Statutes 2000, section 469.175, is 
267.6   amended by adding a subdivision to read: 
267.7      Subd. 4a.  [FILING PLAN WITH STATE.] (a) The authority must 
267.8   file a copy of the tax increment financing plan and amendments 
267.9   to the plan with the commissioner of revenue.  The authority 
267.10  must also file a copy of the development plan or the project 
267.11  plan for the project area with the commissioner of revenue.  The 
267.12  commissioner of revenue shall provide a copy of the plan to the 
267.13  state auditor upon request. 
267.14     (b) Filing under this subdivision must be made within 60 
267.15  days after the latest of: 
267.16     (1) the filing of the request for certification of the 
267.17  district; 
267.18     (2) approval of the plan by the municipality; or 
267.19     (3) adoption of the plan by the authority. 
267.20     [EFFECTIVE DATE.] This section is effective for plans and 
267.21  amendments approved after July 1, 2000. 
267.22     Sec. 15.  Minnesota Statutes 2000, section 469.175, 
267.23  subdivision 5, is amended to read: 
267.24     Subd. 5.  [ANNUAL DISCLOSURE.] An annual statement showing 
267.25  for each district the information required to be reported under 
267.26  subdivision 6, paragraph (c), clauses (1), (2), (3), (11), (12), 
267.27  (20), and (21); the amounts of tax increment received and 
267.28  expended in the reporting period; and any additional information 
267.29  the authority deems necessary must be published in a newspaper 
267.30  of general circulation in the municipality that approved the tax 
267.31  increment financing plan.  The annual statement must inform 
267.32  readers that additional information regarding each district may 
267.33  be obtained from the authority, and must explain how the 
267.34  additional information may be requested.  The authority must 
267.35  publish the annual statement for a year no later than August 15 
267.36  of the next year.  The authority must identify the newspaper of 
268.1   general circulation in the municipality to which the annual 
268.2   statement has been or will be submitted for publication and 
268.3   provide a copy of the annual statement to the county board, the 
268.4   county auditor, the school board, the state auditor commissioner 
268.5   of revenue, and, if the authority is other than the 
268.6   municipality, the governing body of the municipality on or 
268.7   before August 1 of the year in which the statement must be 
268.8   published.  
268.9      The disclosure requirements imposed by this subdivision 
268.10  apply to districts certified before, on, or after August 1, 1979.
268.11     Sec. 16.  Minnesota Statutes 2000, section 469.175, 
268.12  subdivision 6, is amended to read: 
268.13     Subd. 6.  [ANNUAL FINANCIAL REPORTING.] (a) The state 
268.14  auditor shall develop a uniform system of accounting and 
268.15  financial reporting for tax increment financing districts.  The 
268.16  system of accounting and financial reporting shall, as nearly as 
268.17  possible: 
268.18     (1) provide for full disclosure of the sources and uses of 
268.19  public funds in the district; 
268.20     (2) permit comparison and reconciliation with the affected 
268.21  local government's accounts and financial reports; 
268.22     (3) permit auditing of the funds expended on behalf of a 
268.23  district, including a single district that is part of a 
268.24  multidistrict project or that is funded in part or whole through 
268.25  the use of a development account funded with tax increments from 
268.26  other districts or with other public money; 
268.27     (4) be consistent with generally accepted accounting 
268.28  principles. 
268.29     (b) The authority must annually submit to the state auditor 
268.30  commissioner of revenue a financial report in compliance with 
268.31  paragraph (a) that has been audited by an independent auditor.  
268.32  Copies of the report must also be provided to the county auditor 
268.33  and to the governing body of the municipality, if the authority 
268.34  is not the municipality.  To the extent necessary to permit 
268.35  compliance with the requirement of financial reporting, the 
268.36  county and any other appropriate local government unit or 
269.1   private entity must provide the necessary records or information 
269.2   to the authority or the state auditor commissioner of revenue as 
269.3   provided by the system of accounting and financial reporting 
269.4   developed pursuant to paragraph (a).  The authority must submit 
269.5   the annual report for a year on or before August 1 of the next 
269.6   year. 
269.7      (c) The annual financial report must also include the 
269.8   following items: 
269.9      (1) the original net tax capacity of the district and any 
269.10  subdistrict under section 469.177, subdivision 1; 
269.11     (2) the net tax capacity for the reporting period of the 
269.12  district and any subdistrict; 
269.13     (3) the captured net tax capacity of the district; 
269.14     (4) any fiscal disparity deduction from the captured net 
269.15  tax capacity under section 469.177, subdivision 3; 
269.16     (5) the captured net tax capacity retained for tax 
269.17  increment financing under section 469.177, subdivision 2, 
269.18  paragraph (a), clause (1); 
269.19     (6) any captured net tax capacity distributed among 
269.20  affected taxing districts under section 469.177, subdivision 2, 
269.21  paragraph (a), clause (2); 
269.22     (7) the type of district; 
269.23     (8) the date the municipality approved the tax increment 
269.24  financing plan and the date of approval of any modification of 
269.25  the tax increment financing plan, the approval of which requires 
269.26  notice, discussion, a public hearing, and findings under 
269.27  subdivision 4, paragraph (a); 
269.28     (9) the date the authority first requested certification of 
269.29  the original net tax capacity of the district and the date of 
269.30  the request for certification regarding any parcel added to the 
269.31  district; 
269.32     (10) the date the county auditor first certified the 
269.33  original net tax capacity of the district and the date of 
269.34  certification of the original net tax capacity of any parcel 
269.35  added to the district; 
269.36     (11) the month and year in which the authority has received 
270.1   or anticipates it will receive the first increment from the 
270.2   district; 
270.3      (12) the date the district must be decertified; 
270.4      (13) for the reporting period and prior years of the 
270.5   district, the actual amount received from, at least, the 
270.6   following categories: 
270.7      (i) tax increments paid by the captured net tax capacity 
270.8   retained for tax increment financing under section 469.177, 
270.9   subdivision 2, paragraph (a), clause (1), but excluding any 
270.10  excess taxes; 
270.11     (ii) tax increments that are interest or other investment 
270.12  earnings on or from tax increments; 
270.13     (iii) tax increments that are proceeds from the sale or 
270.14  lease of property, tangible or intangible, purchased by the 
270.15  authority with tax increments; 
270.16     (iv) tax increments that are repayments of loans or other 
270.17  advances made by the authority with tax increments; 
270.18     (v) bond or loan proceeds; 
270.19     (vi) special assessments; 
270.20     (vii) grants; and 
270.21     (viii) transfers from funds not exclusively associated with 
270.22  the district; 
270.23     (14) for the reporting period and for the prior years of 
270.24  the district, the amount budgeted under the tax increment 
270.25  financing plan, and the actual amount expended for, at least, 
270.26  the following categories: 
270.27     (i) acquisition of land and buildings through condemnation 
270.28  or purchase; 
270.29     (ii)  site improvements or preparation costs; 
270.30     (iii) installation of public utilities, parking facilities, 
270.31  streets, roads, sidewalks, or other similar public improvements; 
270.32     (iv) administrative costs, including the allocated cost of 
270.33  the authority; 
270.34     (v) public park facilities, facilities for social, 
270.35  recreational, or conference purposes, or other similar public 
270.36  improvements; and 
271.1      (vi) transfers to funds not exclusively associated with the 
271.2   district; 
271.3      (15) for properties sold to developers, the total cost of 
271.4   the property to the authority and the price paid by the 
271.5   developer; 
271.6      (16) the amount of any payments and the value of any 
271.7   in-kind benefits, such as physical improvements and the use of 
271.8   building space, that are paid or financed with tax increments 
271.9   and are provided to another governmental unit other than the 
271.10  municipality during the reporting period; 
271.11     (17) the amount of any payments for activities and 
271.12  improvements located outside of the district that are paid for 
271.13  or financed with tax increments; 
271.14     (18) the amount of payments of principal and interest that 
271.15  are made during the reporting period on any nondefeased: 
271.16     (i) general obligation tax increment financing bonds; 
271.17     (ii) other tax increment financing bonds; and 
271.18     (iii) notes and pay-as-you-go contracts; 
271.19     (19) the principal amount, at the end of the reporting 
271.20  period, of any nondefeased: 
271.21     (i) general obligation tax increment financing bonds; 
271.22     (ii) other tax increment financing bonds; and 
271.23     (iii) notes and pay-as-you-go contracts; 
271.24     (20) the amount of principal and interest payments that are 
271.25  due for the current calendar year on any nondefeased: 
271.26     (i) general obligation tax increment financing bonds; 
271.27     (ii) other tax increment financing bonds; and 
271.28     (iii) notes and pay-as-you-go contracts; 
271.29     (21) if the fiscal disparities contribution under chapter 
271.30  276A or 473F for the district is computed under section 469.177, 
271.31  subdivision 3, paragraph (a), the amount of increased property 
271.32  taxes imposed on other properties in the municipality that 
271.33  approved the tax increment financing plan as a result of the 
271.34  fiscal disparities contribution; and 
271.35     (22) whether the tax increment financing plan or other 
271.36  governing document permits increment revenues to be expended: 
272.1      (i) to pay bonds, the proceeds of which were or may be 
272.2   expended on activities outside of the district; 
272.3      (ii) for deposit into a common bond fund from which money 
272.4   may be expended on activities located outside of the district; 
272.5   or 
272.6      (iii) to otherwise finance activities located outside of 
272.7   the tax increment financing district; and 
272.8      (23) any additional information the state auditor may 
272.9   require. 
272.10     (d) The commissioner of revenue shall prescribe the method 
272.11  of calculating the increased property taxes under paragraph (c), 
272.12  clause (21), and the form of the statement disclosing this 
272.13  information on the annual statement under subdivision 5. 
272.14     (e) The reporting requirements imposed by this subdivision 
272.15  apply to districts certified before, on, and after August 1, 
272.16  1979. 
272.17     Sec. 17.  Minnesota Statutes 2000, section 469.175, 
272.18  subdivision 6b, is amended to read: 
272.19     Subd. 6b.  [DURATION OF DISCLOSURE AND REPORTING 
272.20  REQUIREMENTS.] The disclosure and reporting requirements imposed 
272.21  by subdivisions 5, and 6, and 6a apply with respect to a tax 
272.22  increment financing district beginning with the annual 
272.23  disclosure and reports for the year in which the original net 
272.24  tax capacity of the district was certified and ending with the 
272.25  annual disclosure and reports for the year in which both of the 
272.26  following events have occurred: 
272.27     (1) decertification of the district; and 
272.28     (2) expenditure or return to the county auditor of all 
272.29  remaining revenues derived from tax increments paid by 
272.30  properties in the district. 
272.31     Sec. 18.  [469.1751] [MITIGATION RELATED TO LARGE RAILROAD 
272.32  PROJECTS.] 
272.33     Subdivision 1.  [AUTHORIZATION.] A city or county that 
272.34  contains qualifying railroad property may establish a railroad 
272.35  improvement tax increment financing district under this section 
272.36  to pay for mitigation measures. 
273.1      Subd. 2.  [DEFINITIONS.] (a) For purposes of this section, 
273.2   the following terms have the meanings given. 
273.3      (b) "City" means a statutory or home rule charter city. 
273.4      (c) "Qualifying railroad property" means the Minnesota 
273.5   railroad operating property of a railroad company that 
273.6   undertakes a series of improvements to its operating property if 
273.7   the following requirements are met: 
273.8      (1) the improvements consist of construction of new 
273.9   railroad track or a substantial rebuilding of existing track; 
273.10     (2) the improvements are approved by the federal Surface 
273.11  Transportation Board; and 
273.12     (3) the total expenditures on the improvements in Minnesota 
273.13  are projected to exceed $250,000,000 over a five-year period, 
273.14  based on the estimates submitted to the federal Surface 
273.15  Transportation Board. 
273.16     (d) "Railroad operating property" has the meaning given in 
273.17  section 270.80, subdivision 3. 
273.18     Subd. 3.  [BEGINNING APPLICATION OF AUTHORITY.] The 
273.19  authority to establish a tax increment financing district under 
273.20  this section applies beginning for the first assessment year 
273.21  after the commissioner of revenue determines that the railroad 
273.22  company's tax capacity has increased by five percent over the 
273.23  assessment year in which the federal Surface Transportation 
273.24  Board approves the improvement. 
273.25     Subd. 4.  [AREA OF DISTRICT.] (a) If a city exercises its 
273.26  authority to create a tax increment financing district under 
273.27  this section, the district consists of all of the parcels 
273.28  located in the city that constitute railroad operating property. 
273.29     (b) If a county exercises its authority to create a tax 
273.30  increment financing district under this section, the district 
273.31  consists of all of the parcels located in the county, but 
273.32  outside of the boundaries of a city, that constitute railroad 
273.33  operating property. 
273.34     Subd. 5.  [ORIGINAL NET TAX CAPACITY.] The original net tax 
273.35  capacity of a district established under this section is the net 
273.36  tax capacity of the district for the assessment year in which 
274.1   the federal Surface Transportation Board approves the 
274.2   improvement, regardless of the year in which the request for 
274.3   certification is made. 
274.4      Subd. 6.  [AUTHORITY AND PROJECT AREA.] (a) A city or 
274.5   county that creates a district under this section is an 
274.6   authority under section 469.174, subdivision 2, and may exercise 
274.7   the powers of an authority under sections 469.174 to 469.1791 
274.8   and any other related provision of law. 
274.9      (b) For purposes of section 469.176, subdivision 4, or any 
274.10  other provision of law, the project and project area for a 
274.11  district established under this section respectively consist of 
274.12  the planned railroad mitigation measures and the area in which 
274.13  increments may be spent under subdivision 8. 
274.14     Subd. 7.  [DURATION LIMIT.] No tax increment may be paid to 
274.15  the city or county after 15 years after receipt by the city or 
274.16  county of the first increment for a district established under 
274.17  this section. 
274.18     Subd. 8.  [PERMITTED USES OF INCREMENT.] (a) Increment from 
274.19  a district established under this section may only be used to 
274.20  pay for mitigation measures and administrative expenses. 
274.21     (b) Mitigation measures include only: 
274.22     (1) traffic crossing safety improvements; 
274.23     (2) traffic and train vehicle conflict reduction measures 
274.24  such as grade separations; 
274.25     (3) improvements to connecting streets to redirect traffic 
274.26  to other crossings; 
274.27     (4) pedestrian safety measures; 
274.28     (5) noise mitigation measures including only: 
274.29     (i) sound walls; 
274.30     (ii) construction of berms; 
274.31     (iii) acquisition or relocation of the most severely 
274.32  impacted properties; 
274.33     (iv) whistle-free crossing improvements; 
274.34     (v) directional horns for train crossings; and 
274.35     (vi) other measures to reduce noise impacts on adjacent 
274.36  properties. 
275.1      (c) A city may spend increments from the district on 
275.2   mitigation measures anywhere in the city that is located within 
275.3   2,230 feet of the centerline of the main railroad line.  A 
275.4   county may spend increments from the district on mitigation 
275.5   measures anywhere within the county that is located within 2,230 
275.6   feet of the centerline of the main railroad line, but outside of 
275.7   the boundaries of a city, or within the boundaries of a city, if 
275.8   the governing body of the city approves the plan for the 
275.9   spending in writing before it is undertaken. 
275.10     Subd. 9.  [EXEMPTIONS.] The following provisions of law 
275.11  applicable to tax increment financing districts established 
275.12  under sections 469.174 to 469.178 do not apply to districts 
275.13  established under this section: 
275.14     (1) increments from the district may be spent within or 
275.15  outside the tax increment district or project area as provided 
275.16  under subdivision 8, paragraph (c); 
275.17     (2) section 273.1399 is satisfied if the municipality 
275.18  spends an amount of its general or other unrestricted funds on 
275.19  mitigation measures equal to five percent of the increment from 
275.20  the district; 
275.21     (3) the findings required under section 469.175, 
275.22  subdivision 3, clauses (1) to (5), do not apply; 
275.23     (4) the map required under section 469.175, subdivision 3, 
275.24  need not be published; 
275.25     (5) section 469.176, subdivision 1a, does not apply; 
275.26     (6) section 469.176, subdivision 4g, does not apply; 
275.27     (7) section 469.176, subdivision 6, does not apply; 
275.28     (8) section 469.1763 does not apply; 
275.29     (9) section 469.177, subdivision 1a, does not apply and 
275.30  increment calculations must be made using the full tax rates for 
275.31  the current year. 
275.32     [EFFECTIVE DATE.] This section is effective the day 
275.33  following final enactment. 
275.34     Sec. 19.  Minnesota Statutes 2000, section 469.176, 
275.35  subdivision 1b, is amended to read: 
275.36     Subd. 1b.  [DURATION LIMITS; TERMS.] (a) No tax increment 
276.1   shall in any event be paid to the authority 
276.2      (1) after 15 years after receipt by the authority of the 
276.3   first increment for a renewal and renovation district, 
276.4      (2) after 20 years after receipt by the authority of the 
276.5   first increment for a soils condition district, 
276.6      (3) after eight years after receipt by the authority of the 
276.7   first increment for an economic development district, 
276.8      (4) for a housing district or a redevelopment district, 
276.9   after 20 years from the date of receipt by the authority of the 
276.10  first tax increment by the authority pursuant to section 
276.11  469.175, subdivision 1, paragraph (b); or, if no provision is 
276.12  made under section 469.175, subdivision 1, paragraph (b), after 
276.13  25 years from the date of receipt by the authority of the first 
276.14  increment. 
276.15     (b) For purposes of determining a duration limit under this 
276.16  subdivision or subdivision 1e that is based on the receipt of an 
276.17  increment, any increments from taxes payable in the year in 
276.18  which the district terminates shall be paid to the authority.  
276.19  This paragraph does not affect a duration limit calculated from 
276.20  the date of approval of the tax increment financing plan or 
276.21  based on the recovery of costs or to a duration limit under 
276.22  subdivision 1c.  This paragraph does not supersede the 
276.23  restrictions on payment of delinquent taxes in subdivision 1f. 
276.24     (c) Except as authorized by section 469.175, subdivision 1, 
276.25  paragraph (b), An action by the authority to waive or decline to 
276.26  accept an increment has no effect for purposes of computing a 
276.27  duration limit based on the receipt of increment under this 
276.28  subdivision or any other provision of law.  The authority is 
276.29  deemed to have received an increment for any year in which it 
276.30  waived or declined to accept an increment, regardless of whether 
276.31  the increment was paid to the authority. 
276.32     (d) Receipt by a hazardous substance subdistrict of an 
276.33  increment as a result of a reduction in original net tax 
276.34  capacity under section 469.174, subdivision 7, paragraph (b), 
276.35  does not constitute receipt of increment by the overlying 
276.36  district for purpose of calculating the duration limit under 
277.1   this section. 
277.2      [EFFECTIVE DATE.] This section is effective for districts 
277.3   for which the request for certification is made after June 30, 
277.4   2001. 
277.5      Sec. 20.  Minnesota Statutes 2000, section 469.176, 
277.6   subdivision 1e, is amended to read: 
277.7      Subd. 1e.  [DURATION LIMITS; HAZARDOUS SUBSTANCE 
277.8   SUBDISTRICTS.] If a parcel of a district is part of a designated 
277.9   hazardous substance site or a hazardous substance subdistrict, 
277.10  tax increment may be paid to the authority from the parcel for 
277.11  longer than the period otherwise provided by subdivisions 1 to 
277.12  1f for the overlying district.  The extended period for 
277.13  collection of tax increment begins on the date of receipt of the 
277.14  first tax increment from the parcel that is more than any tax 
277.15  increment received from the parcel before the date of the 
277.16  certification under section 469.174, subdivision 7, paragraph 
277.17  (b), and received after the date of certification to the county 
277.18  auditor described in section 469.174, subdivision 7, paragraph 
277.19  (b).  The extended period for collection of tax increment is the 
277.20  lesser of:  (1) 25 years from the date of commencement of the 
277.21  extended period or 20 years if the authority elects under 
277.22  section 469.175, subdivision 1, paragraph (b), to defer receipt 
277.23  of the first increment; or (2) the period necessary to recover 
277.24  the costs of removal actions or remedial actions specified in a 
277.25  development response action plan. 
277.26     [EFFECTIVE DATE.] This section is effective for requests 
277.27  for certification of subdistricts made after June 30, 2001. 
277.28     Sec. 21.  Minnesota Statutes 2000, section 469.176, 
277.29  subdivision 3, is amended to read: 
277.30     Subd. 3.  [LIMITATION ON ADMINISTRATIVE EXPENSES.] (a) For 
277.31  districts for which certification was requested before August 1, 
277.32  1979, or after June 30, 1982, no tax increment shall be used to 
277.33  pay any administrative expenses for a project which exceed ten 
277.34  percent of the total tax increment expenditures authorized by 
277.35  the tax increment financing plan or the total tax increment 
277.36  expenditures for the project, whichever is less.  
278.1      (b) For districts for which certification was requested 
278.2   after July 31, 1979, and before July 1, 1982, no tax increment 
278.3   shall be used to pay administrative expenses, as defined in 
278.4   Minnesota Statutes 1980, section 273.73, for a project district 
278.5   which exceeds five percent of the total tax increment 
278.6   expenditures authorized by the tax increment financing plan or 
278.7   the total tax increment expenditures for the project district, 
278.8   whichever is less. 
278.9      (c) For districts for which certification was requested 
278.10  after June 30, 2001, no tax increment may be used to pay any 
278.11  administrative expenses for a project which exceed ten percent 
278.12  of total tax increment expenditures authorized by the tax 
278.13  increment financing plan or the total tax increments from the 
278.14  district, whichever is less. 
278.15     [EFFECTIVE DATE.] This section is effective for districts 
278.16  for which the request for certification is received after June 
278.17  30, 2001. 
278.18     Sec. 22.  Minnesota Statutes 2000, section 469.176, 
278.19  subdivision 4g, is amended to read: 
278.20     Subd. 4g.  [GENERAL GOVERNMENT USE PROHIBITED.] (a) These 
278.21  revenues shall Tax increments may not be used to circumvent 
278.22  existing levy limit law.  
278.23     (b) No revenues derived from tax increment from any 
278.24  district, whether certified before or after August 1, 1979, 
278.25  shall may be used for the acquisition, construction, renovation, 
278.26  operation, or maintenance of a building to be used primarily and 
278.27  regularly for conducting the business of a municipality, county, 
278.28  school district, or any other local unit of government or the 
278.29  state or federal government or for a commons area used as a 
278.30  public park, or a facility used for social, recreational, or 
278.31  conference purposes.  This provision shall does not prohibit the 
278.32  use of revenues derived from tax increments for the construction 
278.33  or renovation of a parking structure or of a privately owned 
278.34  facility for conference purposes.  
278.35     (b) If any publicly owned facility used for social, 
278.36  recreational, or conference purposes and financed in whole or in 
279.1   part from revenues derived from a district is operated or 
279.2   managed by an entity other than the authority, the operating and 
279.3   management policies of the facility must be approved by the 
279.4   governing body of the authority. 
279.5      (c)(1) Tax increments may not be used to pay for the cost 
279.6   of public improvements, equipment, or other items, if: 
279.7      (i) the improvements, equipment, or other items are located 
279.8   outside of the area of the tax increment financing district from 
279.9   which the increments were collected; and 
279.10     (ii) the improvements, equipment, or items that (A) 
279.11  primarily serve a decorative or aesthetic purpose, or (B) serve 
279.12  a functional purpose, but their cost is increased by more than 
279.13  100 percent as a result of the selection of materials, design, 
279.14  or type as compared with more commonly used materials, designs, 
279.15  or types for similar improvements, equipment, or items. 
279.16     (2) The provisions of this paragraph do not apply to 
279.17  expenditures related to the rehabilitation of historic 
279.18  structures that are: 
279.19     (i) individually listed on the National Register of 
279.20  Historic Places; or 
279.21     (ii) a contributing element to a historic district listed 
279.22  on the National Register of Historic Places. 
279.23     [EFFECTIVE DATE.] This section is effective for 
279.24  expenditures of increment made after June 30, 2001. 
279.25     Sec. 23.  Minnesota Statutes 2000, section 469.176, is 
279.26  amended by adding a subdivision to read: 
279.27     Subd. 41.  [PROHIBITED FACILITIES.] (a) No tax increment 
279.28  from any district may be used for: 
279.29     (1) a commons area used as a public park; or 
279.30     (2) a facility used for social, recreational, or conference 
279.31  purposes. 
279.32     (b) This subdivision does not apply to a privately owned 
279.33  facility for conference purposes or a parking structure. 
279.34     [EFFECTIVE DATE.] This section is effective for 
279.35  expenditures of increment made after June 30, 2001, but does not 
279.36  apply to (1) expenditures made before January 1, 2000; (2) 
280.1   expenditures made under a binding contract entered before 
280.2   January 1, 2000; or (3) expenditures made under a binding 
280.3   contract entered pursuant to a letter of intent with the 
280.4   developer or contractor if the letter of intent was entered 
280.5   before January 1, 2000. 
280.6      Sec. 24.  Minnesota Statutes 2000, section 469.1763, 
280.7   subdivision 3, is amended to read: 
280.8      Subd. 3.  [FIVE-YEAR RULE.] (a) Except for districts 
280.9   subject to subdivision 7, revenues derived from tax increments 
280.10  are considered to have been expended on an activity within the 
280.11  district under subdivision 2 only if one of the following occurs:
280.12     (1) before or within five years after certification of the 
280.13  district, the revenues are actually paid to a third party with 
280.14  respect to the activity; 
280.15     (2) bonds, the proceeds of which must be used to finance 
280.16  the activity, are issued and sold to a third party before or 
280.17  within five years after certification, the revenues are spent to 
280.18  repay the bonds, and the proceeds of the bonds either are, on 
280.19  the date of issuance, reasonably expected to be spent before the 
280.20  end of the later of (i) the five-year period, or (ii) a 
280.21  reasonable temporary period within the meaning of the use of 
280.22  that term under section 148(c)(1) of the Internal Revenue Code, 
280.23  or are deposited in a reasonably required reserve or replacement 
280.24  fund; 
280.25     (3) binding contracts with a third party are entered into 
280.26  for performance of the activity before or within five years 
280.27  after certification of the district and the revenues are spent 
280.28  under the contractual obligation; or 
280.29     (4) costs with respect to the activity are paid before or 
280.30  within five years after certification of the district and the 
280.31  revenues are spent to reimburse a party for payment of the 
280.32  costs, including interest on unreimbursed costs. 
280.33     (b) For purposes of this subdivision, bonds include 
280.34  subsequent refunding bonds if the original refunded bonds meet 
280.35  the requirements of paragraph (a), clause (2). 
280.36     Sec. 25.  Minnesota Statutes 2000, section 469.1763, 
281.1   subdivision 6, is amended to read: 
281.2      Subd. 6.  [POOLING PERMITTED FOR DEFICITS.] (a) This 
281.3   subdivision applies only to districts for which the request for 
281.4   certification was made before June 2, 1997. 
281.5      (b) The municipality for the district may transfer 
281.6   available increments from another tax increment financing 
281.7   district located in the municipality, if the transfer is 
281.8   necessary to eliminate a deficit in the district to which the 
281.9   increments are transferred.  A deficit in the district for 
281.10  purposes of this subdivision means the lesser of the following 
281.11  two amounts: 
281.12     (1)(i) the amount due during the calendar year to pay 
281.13  preexisting obligations of the district; minus the sum of: 
281.14     (ii) (1) the total increments to be collected from 
281.15  properties located within the district that are available for 
281.16  the calendar year; plus 
281.17     (iii) (2) total increments from properties located in other 
281.18  districts in the municipality that are available to be used to 
281.19  meet the district's obligations under this section, excluding 
281.20  this subdivision, or other provisions of law (but excluding a 
281.21  special tax under section 469.1791 and the grant program under 
281.22  Laws 1997, chapter 231, article 1, section 19); or 
281.23     (2) the reduction in increments collected from properties 
281.24  located in the district for the calendar year as a result of the 
281.25  changes in class rates in Laws 1997, chapter 231, article 1; 
281.26  Laws 1998, chapter 389, article 2; and Laws 1999, chapter 243. 
281.27     (c) A preexisting obligation means bonds issued and sold 
281.28  before June 2, 1997, and bonds issued to refund such bonds or to 
281.29  reimburse expenditures made in conjunction with a signed 
281.30  contractual agreement entered into before June 2, 1997, to the 
281.31  extent that the bonds are secured by a pledge of increments from 
281.32  the tax increment financing district.  Bonds are considered to 
281.33  be preexisting obligations under this paragraph only if: 
281.34     (1) the proceeds of the bonds were spent on or before 
281.35  December 31, 2000, or were deposited into a reasonably required 
281.36  reserve or replacement fund; or 
282.1      (2) the deficit in the district for the purposes of 
282.2   paragraph (b) is determined as the lesser of the amount 
282.3   determined under paragraph (b), or the amount of the reduction 
282.4   in increments collected from properties located in the district 
282.5   for the calendar year as a result of the changes in class rates 
282.6   in Laws 1997, chapter 231, article 1; Laws 1998, chapter 389, 
282.7   article 2, and Laws 1999, chapter 243.  For purposes of this 
282.8   subdivision, bonds exclude an obligation to reimburse or pay a 
282.9   developer or owner of property located in the district for 
282.10  amounts incurred or paid by the developer or owner. 
282.11     (d) The municipality may require a development authority, 
282.12  other than a seaway port authority, to transfer available 
282.13  increments for any of its tax increment financing districts in 
282.14  the municipality to make up an insufficiency in another district 
282.15  in the municipality, regardless of whether the district was 
282.16  established by the development authority or another development 
282.17  authority.  This authority applies notwithstanding any law to 
282.18  the contrary, but applies only to a development authority that: 
282.19     (1) was established by the municipality; or 
282.20     (2) the governing body of which is appointed, in whole or 
282.21  part, by the municipality or an officer of the municipality or 
282.22  which consists, in whole or part, of members of the governing 
282.23  body of the municipality. 
282.24     (e) The authority under this subdivision to spend tax 
282.25  increments outside of the area of the district from which the 
282.26  tax increments were collected: 
282.27     (1) in the case of expenditures for districts for which 
282.28  bonds are considered to be preexisting obligations under 
282.29  paragraph (c), clause (2), may only be exercised after obtaining 
282.30  approval of the use of the increments, in writing, by the 
282.31  commissioner of revenue; 
282.32     (2) is an exception to the restrictions under section 
282.33  469.176, subdivision 4i, and the other provisions of this 
282.34  section, and the percentage restrictions under subdivision 2 
282.35  must be calculated after deducting increments spent under this 
282.36  subdivision from the total increments for the district; and 
283.1      (3) applies notwithstanding the provisions of the Tax 
283.2   Increment Financing Act in effect for districts for which the 
283.3   request for certification was made before June 30, 1982, or any 
283.4   other law to the contrary. 
283.5      [EFFECTIVE DATE.] This section is effective for increments 
283.6   collected in 2002 and thereafter. 
283.7      Sec. 26.  Minnesota Statutes 2000, section 469.1763, is 
283.8   amended by adding a subdivision to read: 
283.9      Subd. 7.  [TEN-YEAR RULE.] (a) Revenue derived from tax 
283.10  increments are considered to have been expended on an activity 
283.11  within the district under subdivision 2 only if one of the 
283.12  following occurs: 
283.13     (1) before or within ten years after certification of the 
283.14  district, the revenues are actually paid to a third party within 
283.15  respect to the activity; 
283.16     (2) bonds, the proceeds of which must be used to finance 
283.17  the activity, are issued and sold to a third party before or 
283.18  within ten years after certification, the revenues are spent to 
283.19  repay the bonds, and the proceeds of the bonds either are, on 
283.20  the date of issuance, reasonably expected to be spent before the 
283.21  end of the later of (i) the ten-year period, or (ii) a 
283.22  reasonable temporary period within the meaning of the use of 
283.23  that term under section 148(c)(1) of the Internal Revenue Code, 
283.24  or are deposited in a reasonably required reserve or replacement 
283.25  fund; 
283.26     (3) binding contracts with a third party are entered into 
283.27  for performance of the activity before or within ten years after 
283.28  certification of the district and the revenues are spent under 
283.29  the contractual obligation; or 
283.30     (4) costs with respect to the activity are paid before or 
283.31  within ten years after certification of the district and the 
283.32  revenues are spent to reimburse a party for payment of the 
283.33  costs, including interest on unreimbursed costs. 
283.34     (b) For purposes of this subdivision, bonds include 
283.35  subsequent refunding bonds if the original refunded bonds meet 
283.36  the requirements of paragraph (a), clause (2). 
284.1      (c) This subdivision applies only to a soils condition 
284.2   district or a redevelopment district, and only if the county 
284.3   board approves, by resolution, a request by the authority within 
284.4   five years from the date of request of certification for the 
284.5   district. 
284.6      [EFFECTIVE DATE.] This section is effective for districts 
284.7   for which certification is requested after April 30, 1996. 
284.8      Sec. 27.  Minnesota Statutes 2000, section 469.1763, is 
284.9   amended by adding a subdivision to read: 
284.10     Subd. 8.  [USE OF REVENUES FOR DECERTIFICATION WITH 
284.11  TEN-YEAR RULE.] (a) Beginning with the 11th year following 
284.12  certification of the district, the applicable in-district 
284.13  percent of the revenues derived from tax increments paid by 
284.14  properties in the district that remain after the expenditures 
284.15  permitted under subdivision 7 must be used only to pay: 
284.16     (1) outstanding bonds, as defined in subdivision 7, 
284.17  paragraphs (a), clause (2), and (b); 
284.18     (2) contracts, as defined in subdivision 7, paragraph (a), 
284.19  clauses (3) and (4); or 
284.20     (3) credit enhanced bonds to which the revenues derived 
284.21  from tax increments are pledged, but only to the extent that 
284.22  revenues of the district for which the credit enhanced bonds 
284.23  were issued are insufficient to pay the bonds and to the extent 
284.24  that the increments from the applicable pooling percent share 
284.25  for the district are insufficient. 
284.26     (b) When the outstanding bonds have been defeased and when 
284.27  sufficient money has been set aside to pay contractual 
284.28  obligations as defined in subdivision 7, paragraph (a), clauses 
284.29  (3) and (4), the district must be decertified and the pledge of 
284.30  tax increment discharged. 
284.31     (c) This subdivision only applies to a soils condition 
284.32  district or a redevelopment district if the county board 
284.33  approves, by resolution, a request by the authority within five 
284.34  years from the date of request of certification for the district.
284.35     [EFFECTIVE DATE.] This section is effective for districts 
284.36  for which certification is requested after April 30, 1996. 
285.1      Sec. 28.  Minnesota Statutes 2000, section 469.177, 
285.2   subdivision 1, is amended to read: 
285.3      Subdivision 1.  [ORIGINAL NET TAX CAPACITY.] (a) Upon or 
285.4   after adoption of a tax increment financing plan, the auditor of 
285.5   any county in which the district is situated shall, upon request 
285.6   of the authority, certify the original net tax capacity of the 
285.7   tax increment financing district and that portion of the 
285.8   district overlying any subdistrict as described in the tax 
285.9   increment financing plan and shall certify in each year 
285.10  thereafter the amount by which the original net tax capacity has 
285.11  increased or decreased as a result of a change in tax exempt 
285.12  status of property within the district and any subdistrict, 
285.13  reduction or enlargement of the district or changes pursuant to 
285.14  subdivision 4.  
285.15     (b) For districts approved under section 469.175, 
285.16  subdivision 3, or parcels added to existing districts after May 
285.17  1, 1988, if the classification under section 273.13 of property 
285.18  located in a district changes to a classification that has a 
285.19  different assessment ratio, the original net tax capacity of 
285.20  that property must be redetermined at the time when its use is 
285.21  changed as if the property had originally been classified in the 
285.22  same class in which it is classified after its use is changed. 
285.23     (c) The amount to be added to the original net tax capacity 
285.24  of the district as a result of previously tax exempt real 
285.25  property within the district becoming taxable equals the net tax 
285.26  capacity of the real property as most recently assessed pursuant 
285.27  to section 273.18 or, if that assessment was made more than one 
285.28  year prior to the date of title transfer rendering the property 
285.29  taxable, the net tax capacity assessed by the assessor at the 
285.30  time of the transfer.  If improvements are made to tax exempt 
285.31  property after certification of the district and before the 
285.32  parcel becomes taxable, the assessor shall, at the request of 
285.33  the authority, separately assess the estimated market value of 
285.34  the improvements.  If the property becomes taxable, the county 
285.35  auditor shall add to original net tax capacity, the net tax 
285.36  capacity of the parcel, excluding the separately assessed 
286.1   improvements.  If substantial taxable improvements were made to 
286.2   a parcel after certification of the district and if the property 
286.3   later becomes tax exempt, in whole or part, as a result of the 
286.4   authority acquiring the property through foreclosure or exercise 
286.5   of remedies under a lease or other revenue agreement or as a 
286.6   result of tax forfeiture, the amount to be added to the original 
286.7   net tax capacity of the district as a result of the property 
286.8   again becoming taxable is the amount of the parcel's value that 
286.9   was included in original net tax capacity when the parcel was 
286.10  first certified.  The amount to be added to the original net tax 
286.11  capacity of the district as a result of enlargements equals the 
286.12  net tax capacity of the added real property as most recently 
286.13  certified by the commissioner of revenue as of the date of 
286.14  modification of the tax increment financing plan pursuant to 
286.15  section 469.175, subdivision 4. 
286.16     (d) For districts approved under section 469.175, 
286.17  subdivision 3, or parcels added to existing districts after May 
286.18  1, 1988, if the net tax capacity of a property increases because 
286.19  the property no longer qualifies under the Minnesota 
286.20  Agricultural Property Tax Law, section 273.111; the Minnesota 
286.21  Open Space Property Tax Law, section 273.112; or the 
286.22  Metropolitan Agricultural Preserves Act, chapter 473H, or 
286.23  because platted, unimproved property is improved or three years 
286.24  pass after approval of the plat under section 273.11, 
286.25  subdivision 1, the increase in net tax capacity must be added to 
286.26  the original net tax capacity.  
286.27     (e) The amount to be subtracted from the original net tax 
286.28  capacity of the district as a result of previously taxable real 
286.29  property within the district becoming tax exempt, or a reduction 
286.30  in the geographic area of the district, shall be the amount of 
286.31  original net tax capacity initially attributed to the property 
286.32  becoming tax exempt or being removed from the district.  If the 
286.33  net tax capacity of property located within the tax increment 
286.34  financing district is reduced by reason of a court-ordered 
286.35  abatement, stipulation agreement, voluntary abatement made by 
286.36  the assessor or auditor or by order of the commissioner of 
287.1   revenue, the reduction shall be applied to the original net tax 
287.2   capacity of the district when the property upon which the 
287.3   abatement is made has not been improved since the date of 
287.4   certification of the district and to the captured net tax 
287.5   capacity of the district in each year thereafter when the 
287.6   abatement relates to improvements made after the date of 
287.7   certification.  The county auditor may specify reasonable form 
287.8   and content of the request for certification of the authority 
287.9   and any modification thereof pursuant to section 469.175, 
287.10  subdivision 4.  
287.11     (f) If a parcel of property contained a substandard 
287.12  building that was demolished or removed and if the authority 
287.13  elects to treat the parcel as occupied by a substandard building 
287.14  under section 469.174, subdivision 10, paragraph (b), the 
287.15  auditor shall certify the original net tax capacity of the 
287.16  parcel using the greater of (1) the current net tax capacity of 
287.17  the parcel, or (2) the estimated market value of the parcel for 
287.18  the year in which the building was demolished or removed, but 
287.19  applying the class rates for the current year. 
287.20     [EFFECTIVE DATE.] This section is effective for parcels 
287.21  that become taxable after June 30, 2001, and applies to tax 
287.22  increment financing districts, regardless of when the request 
287.23  for certification was made. 
287.24     Sec. 29.  Minnesota Statutes 2000, section 469.1771, 
287.25  subdivision 1, is amended to read: 
287.26     Subdivision 1.  [ENFORCEMENT.] (a) The owner of taxable 
287.27  property located in the city, town, school district, or county 
287.28  in which the tax increment financing district is located may 
287.29  bring suit for equitable relief or for damages, as provided in 
287.30  subdivisions 2, 3, and 4, arising out of a failure of a 
287.31  municipality or authority to comply with the provisions of 
287.32  sections 469.174 to 469.179 469.1791, or related provisions of 
287.33  this chapter.  The prevailing party in a suit filed under the 
287.34  preceding sentence is entitled to costs, including reasonable 
287.35  attorney fees. 
287.36     (b) The state auditor may examine and audit political 
288.1   subdivisions' use of tax increment financing.  Without previous 
288.2   notice, the state auditor may examine or audit accounts and 
288.3   records on a random basis as the auditor deems to be in the 
288.4   public interest.  If the state auditor finds evidence that an 
288.5   authority or municipality has violated a provision of the law 
288.6   for which a remedy is provided under this section, the state 
288.7   auditor shall forward the relevant information to the county 
288.8   attorney.  The county attorney may bring an action to enforce 
288.9   the provisions of sections 469.174 to 469.179 469.1791 or 
288.10  related provisions of this chapter, for matters referred by the 
288.11  state auditor or on behalf of the county.  If the county 
288.12  attorney determines not to bring an action or if the county 
288.13  attorney has not brought an action within 12 months after 
288.14  receipt of the initial notification by the state auditor of the 
288.15  violation, the county attorney shall notify the state auditor in 
288.16  writing. 
288.17     (c) If the state auditor finds an authority is not in 
288.18  compliance with sections 469.174 to 469.179 or related 
288.19  provisions of law, the auditor shall notify the governing body 
288.20  of the municipality that approved the tax increment financing 
288.21  district of its findings.  The governing body of the 
288.22  municipality must respond in writing to the state auditor within 
288.23  60 days after receiving the notification.  Its written response 
288.24  must state whether the municipality accepts, in whole or part, 
288.25  the auditor's findings.  If the municipality does not accept the 
288.26  findings, the statement must indicate the basis for its 
288.27  disagreement.  The state auditor shall annually summarize the 
288.28  responses it receives under this section and send the summary 
288.29  and copies of the responses to the chairs of the committees of 
288.30  the legislature with jurisdiction over tax increment financing. 
288.31     (d) The state auditor shall notify the attorney general in 
288.32  writing and provide supporting materials for a violation found 
288.33  by the auditor, if the: 
288.34     (1) auditor receives notification from the county attorney 
288.35  under paragraph (b) or receives no notification for a 12-month 
288.36  period after initially notifying the county attorney and the 
289.1   state auditor confirms with the county attorney or the 
289.2   municipality that no action has been brought regarding the 
289.3   matter; and 
289.4      (2) municipality or development authority have not 
289.5   eliminated or resolved the violation to the satisfaction of the 
289.6   state auditor. 
289.7   The auditor shall provide the municipality and development 
289.8   authority a copy of the notification sent to the attorney 
289.9   general. 
289.10     [EFFECTIVE DATE.] This section applies to violations 
289.11  occurring after June 30, 2001. 
289.12     Sec. 30.  Minnesota Statutes 2000, section 469.1771, 
289.13  subdivision 2a, is amended to read: 
289.14     Subd. 2a.  [SUSPENSION OF DISTRIBUTION OF TAX INCREMENT.] 
289.15  (a) If an authority fails to make a disclosure or to submit a 
289.16  report containing the information required by section 469.175, 
289.17  subdivisions 5 and 6, regarding a tax increment financing 
289.18  district within the time provided in section 469.175, 
289.19  subdivisions 5 and 6, the state auditor commissioner of revenue 
289.20  shall mail to the authority a written notice that it or the 
289.21  municipality has failed to make the required disclosure or to 
289.22  submit a required report with respect to a particular district.  
289.23  The state auditor commissioner of revenue shall mail the notice 
289.24  on or before the third Tuesday of August of the year in which 
289.25  the disclosure or report was required to be made or submitted.  
289.26  The notice must describe the consequences of failing to disclose 
289.27  or submit a report as provided in paragraph (b).  If the state 
289.28  auditor commissioner of revenue has not received a copy of a 
289.29  disclosure or a report described in this paragraph on or before 
289.30  the third Tuesday of November of the year in which the 
289.31  disclosure or report was required to be made or submitted, the 
289.32  state auditor shall mail a written notice to the county auditor 
289.33  to hold the distribution of tax increment from a particular 
289.34  district.  
289.35     (b) Upon receiving written notice from the state auditor 
289.36  commissioner of revenue to hold the distribution of tax 
290.1   increment, the county auditor shall hold: 
290.2      (1) 25 percent of the amount of tax increment that 
290.3   otherwise would be distributed, if the distribution is made 
290.4   after the third Friday in November but during the year in which 
290.5   the disclosure or report was required to be made or submitted; 
290.6   or 
290.7      (2) 100 percent of the amount of tax increment that 
290.8   otherwise would be distributed, if the distribution is made 
290.9   after December 31 of the year in which the disclosure or report 
290.10  was required to be made or submitted. 
290.11     (c) Upon receiving the copy of the disclosure and all of 
290.12  the reports described in paragraph (a) with respect to a 
290.13  district regarding which the state auditor commissioner of 
290.14  revenue has mailed to the county auditor a written notice to 
290.15  hold distribution of tax increment, the state auditor 
290.16  commissioner of revenue shall mail to the county auditor a 
290.17  written notice lifting the hold and authorizing the county 
290.18  auditor to distribute to the authority or municipality any tax 
290.19  increment that the county auditor had held pursuant to paragraph 
290.20  (b).  The state auditor commissioner of revenue shall mail the 
290.21  written notice required by this paragraph within five working 
290.22  days after receiving the last outstanding item.  The county 
290.23  auditor shall distribute the tax increment to the authority or 
290.24  municipality within 15 working days after receiving the written 
290.25  notice required by this paragraph. 
290.26     (d) Notwithstanding any law to the contrary, any interest 
290.27  that accrues on tax increment while it is being held by the 
290.28  county auditor pursuant to paragraph (b) is not tax increment 
290.29  and may be retained by the county. 
290.30     (e) For purposes of sections 469.176, subdivisions 1a to 
290.31  1g, and 469.177, subdivision 11, tax increment being held by the 
290.32  county auditor pursuant to paragraph (b) is considered 
290.33  distributed to or received by the authority or municipality as 
290.34  of the time that it would have been distributed or received but 
290.35  for paragraph (b). 
290.36     Sec. 31.  Minnesota Statutes 2000, section 469.178, is 
291.1   amended by adding a subdivision to read: 
291.2      Subd. 7.  [INTERFUND LOANS.] The authority or municipality 
291.3   may advance or loan money to finance expenditures under section 
291.4   469.176, subdivision 4, from its general fund or any other fund 
291.5   under which it has legal authority to do so.  The loan or 
291.6   advance must be approved, by resolution of the governing body, 
291.7   before money is transferred, advanced, or spent.  The terms and 
291.8   conditions for repayment of the loan must be provided in writing 
291.9   and include, at a minimum, the principal amount, the interest 
291.10  rate, maturity, and repayment schedule.  The maximum rate of 
291.11  interest permitted to be charged is limited to the greater of 
291.12  the rates specified under section 270.75 or 549.09. 
291.13     [EFFECTIVE DATE.] This section is effective for loans and 
291.14  advances made after June 30, 2001.  Interfund loans and advances 
291.15  made before July 1, 2001, are ratified and approved, subject to 
291.16  the requirement that interest accrued or paid after July 1, 
291.17  2001, may not exceed the limit in this section. 
291.18     Sec. 32.  [469.1792] [HOUSING REPLACEMENT DISTRICTS.] 
291.19     Subdivision 1.  [DEFINITIONS.] As used in this section, the 
291.20  terms defined in this subdivision have the meanings given. 
291.21     (a) "Captured net tax capacity" means the amount by which 
291.22  the current net tax capacity in a housing replacement district 
291.23  exceeds the original net tax capacity, including the value of 
291.24  property normally taxable as personal property by reason of its 
291.25  location on or over property owned by a tax-exempt entity.  
291.26     (b) "Original net tax capacity" means the net tax capacity 
291.27  of all taxable real property within a housing replacement 
291.28  district as certified by the commissioner of revenue for the 
291.29  previous assessment year less the net tax capacity attributable 
291.30  to existing improvements, provided that the request by the 
291.31  authority for certification of a new housing replacement 
291.32  district has been made to the county auditor by June 30.  The 
291.33  original net tax capacity of housing replacement districts for 
291.34  which requests are filed after June 30 has an original net tax 
291.35  capacity based on the current assessment year.  In any case, the 
291.36  original net tax capacity must be determined together with 
292.1   subsequent adjustments as set forth in section 469.177, 
292.2   subdivision 1, paragraph (c).  In determining the original net 
292.3   tax capacity, the net tax capacity of real property exempt from 
292.4   taxation at the time of the request is zero, except for real 
292.5   property which is tax exempt by reason of public ownership by 
292.6   the requesting authority and which has been publicly owned for 
292.7   less than one year prior to the date of the request for 
292.8   certification, in which event the net tax capacity of the 
292.9   property is the net tax capacity as most recently determined by 
292.10  the commissioner of revenue. 
292.11     (c) "Parcel" means a tract or plat of land established 
292.12  prior to the certification of the housing replacement district 
292.13  as a single unit for purposes of assessment. 
292.14     (d) For housing replacement projects in the cities of 
292.15  Crystal, Fridley, Minneapolis, and St. Paul "authority" means 
292.16  the entity provided under Laws 1995, chapter 264, article 5, 
292.17  section 44, subdivision 4, as amended by Laws 1996, chapter 471, 
292.18  article 7, section 21; and Laws 1997, chapter 231, article 10, 
292.19  section 12.  For housing replacement projects in any other city, 
292.20  "authority" means the authority as defined in section 469.174, 
292.21  subdivision 2, that is designated by the governing body of the 
292.22  municipality to be the authority for purposes of this section. 
292.23     Subd. 2.  [ESTABLISHMENT OF HOUSING REPLACEMENT DISTRICTS.] 
292.24  (a) An authority may create a housing replacement project as 
292.25  provided in this section. 
292.26     (b) For cities of the first class, the authority may 
292.27  designate up to 200 parcels in the city to be included in a 
292.28  housing replacement district.  For other cities, each authority 
292.29  may designate up to 50 parcels in the city to be included in a 
292.30  housing replacement district over the life of the district.  The 
292.31  only parcels that may be included in a district are (1) vacant 
292.32  sites, (2) parcels containing vacant houses, or (3) parcels 
292.33  containing houses that are structurally substandard, as defined 
292.34  in section 469.174, subdivision 10.  
292.35     (c) The city in which the authority is located must pay at 
292.36  least 25 percent of the housing replacement project costs from 
293.1   its general fund, a property tax levy, or other unrestricted 
293.2   money, not including tax increments. 
293.3      (d) The housing replacement district plan must have as its 
293.4   sole object the acquisition of parcels for the purpose of 
293.5   preparing the site to be sold for market rate housing.  As used 
293.6   in this section, "market rate housing" means housing that has a 
293.7   market value that does not exceed 150 percent of the average 
293.8   market value of single-family housing in that municipality. 
293.9      Subd. 3.  [HOUSING REPLACEMENT DISTRICT PLAN.] To establish 
293.10  a housing replacement district under this section, an authority 
293.11  shall adopt a housing replacement district plan that contains: 
293.12     (1) a statement of the objectives and a description of the 
293.13  housing replacement projects proposed by the authority for the 
293.14  housing replacement district; 
293.15     (2) a statement of the housing replacement district plan, 
293.16  demonstrating the coordination of that plan with the city's 
293.17  comprehensive plan; 
293.18     (3) estimates of the following: 
293.19     (i) cost of the program, including administrative expenses; 
293.20     (ii) sources of revenue to finance or otherwise pay public 
293.21  costs; 
293.22     (iii) the most recent net tax capacity of taxable real 
293.23  property within the housing replacement district; and 
293.24     (iv) the estimated captured net tax capacity of the housing 
293.25  replacement district at completion; 
293.26     (4) statements of the authority's alternate estimates of 
293.27  the impact of the housing replacement district on the net tax 
293.28  capacities of all taxing jurisdictions in which the housing 
293.29  replacement district is located in whole or in part.  For 
293.30  purposes of one statement, the municipality shall assume that 
293.31  the estimated captured net tax capacity would be available to 
293.32  the taxing jurisdictions without creation of the housing 
293.33  replacement district, and for purposes of the second statement, 
293.34  the county shall assume that none of the estimated captured net 
293.35  tax capacity would be available to the taxing jurisdictions 
293.36  without creation of the housing replacement district; and 
294.1      (5) identification of all parcels to be included in the 
294.2   district, to the extent known at the time the original housing 
294.3   replacement district plan is prepared.  At a minimum, the 
294.4   parcels that will be included in the housing replacement 
294.5   district during its first year must be identified in the 
294.6   original housing replacement district plan.  If parcels for 
294.7   subsequent years are not specifically identified, the original 
294.8   housing replacement district plan must include the criteria that 
294.9   will be used by the authority to select parcels to be included 
294.10  in the later years. 
294.11     Subd. 4.  [PROCEDURE.] The provisions of section 469.175, 
294.12  subdivisions 3, 4, 5, and 6, apply to the establishment and 
294.13  operation of the housing replacement districts created under 
294.14  this section, except as follows: 
294.15     (1) the determination specified in section 469.175, 
294.16  subdivision 3, clause (1), is not required; and 
294.17     (2) addition of parcels not identified in the original 
294.18  housing replacement district plan is not treated as a 
294.19  modification of that plan requiring an approval process provided 
294.20  that the parcels added are consistent with the criteria 
294.21  described in subdivision 3, clause (5). 
294.22     Subd. 5.  [DURATION LIMITS.] No tax increment may be paid 
294.23  to the authority on each parcel in a housing replacement 
294.24  district after 15 years from date of receipt by the county of 
294.25  the first tax increment from that parcel. 
294.26     Subd. 6.  [LIMITATION ON USE OF TAX INCREMENTS.] All 
294.27  revenues derived from tax increments must be used in accordance 
294.28  with the housing replacement district plan.  The revenues must 
294.29  be used solely to pay the costs of site acquisition, relocation, 
294.30  demolition of existing structures, site preparation, and 
294.31  pollution abatement on parcels identified in the housing 
294.32  replacement district plan, as well as public improvements and 
294.33  administrative costs directly related to those parcels. 
294.34     Subd. 7.  [APPLICATION OF OTHER LAWS.] (a) The provisions 
294.35  of section 469.177, subdivisions 1a, and 5 to 10, apply to the 
294.36  computation of tax increment for the housing replacement 
295.1   districts created under this section. The original local tax 
295.2   rate is the rate for the year a parcel is certified for 
295.3   inclusion in a housing replacement district.  
295.4      (b) References in Minnesota Statutes to tax increment 
295.5   financing districts created and tax increments generated under 
295.6   sections 469.174 to 469.179, other than references in section 
295.7   273.1399, include housing replacement districts and tax 
295.8   increments subject to this section, provided that sections 
295.9   469.174 to 469.179 apply only to the extent specified in this 
295.10  section. 
295.11     (c) Laws 1980, chapter 595, section 2, subdivision 2, does 
295.12  not apply to a district created under this section. 
295.13     Sec. 33.  Minnesota Statutes 2000, section 469.1812, 
295.14  subdivision 2, is amended to read: 
295.15     Subd. 2.  [GOVERNING BODY.] "Governing body" means, for a 
295.16  city, the city council; for a school district, the school board; 
295.17  for a county, the county board; and for a town, the annual 
295.18  meeting of the town board of supervisors. 
295.19     [EFFECTIVE DATE.] This section is effective retroactive to 
295.20  May 26, 1999. 
295.21     Sec. 34.  Minnesota Statutes 2000, section 469.1813, 
295.22  subdivision 6, is amended to read: 
295.23     Subd. 6.  [DURATION LIMIT.] (a) A political subdivision may 
295.24  grant an abatement for a period no longer than ten years, except 
295.25  as provided under paragraph (b).  The subdivision may specify in 
295.26  the abatement resolution a shorter duration.  If the resolution 
295.27  does not specify a period of time, the abatement is for eight 
295.28  years.  If an abatement has been granted to a parcel of property 
295.29  and the period of the abatement has expired, the political 
295.30  subdivision that granted the abatement may not grant another 
295.31  abatement for eight years after the expiration of the first 
295.32  abatement.  This prohibition does not apply to improvements 
295.33  added after and not subject to the first abatement. 
295.34     (b) A political subdivision proposing to abate taxes for a 
295.35  parcel may request, in writing, that the other political 
295.36  subdivisions in which the parcel is located grant an abatement 
296.1   for the property.  If one of the other political subdivisions 
296.2   declines, in writing, to grant an abatement or if 90 days pass 
296.3   after receipt of the request to grant an abatement without a 
296.4   written response from one of the political subdivisions, the 
296.5   duration limit for an abatement for the parcel by the requesting 
296.6   political subdivision and any other participating political 
296.7   subdivision is increased to 15 years.  If the political 
296.8   subdivision which declined to grant an abatement later grants an 
296.9   abatement for the parcel, the 15-year duration limit is reduced 
296.10  by one year for each year that the declining political 
296.11  subdivision grants an abatement for the parcel during the period 
296.12  of the abatement granted by the requesting political 
296.13  subdivision.  The duration limit may not be reduced below the 
296.14  limit under paragraph (a).  
296.15     [EFFECTIVE DATE.] This section is effective for abatements 
296.16  approved after the day following final enactment. 
296.17     Sec. 35.  Minnesota Statutes 2000, section 475.58, 
296.18  subdivision 1, is amended to read: 
296.19     Subdivision 1.  [APPROVAL BY ELECTORS; EXCEPTIONS.] 
296.20  Obligations authorized by law or charter may be issued by any 
296.21  municipality upon obtaining the approval of a majority of the 
296.22  electors voting on the question of issuing the obligations, but 
296.23  an election shall not be required to authorize obligations 
296.24  issued: 
296.25     (1) to pay any unpaid judgment against the municipality; 
296.26     (2) for refunding obligations; 
296.27     (3) for an improvement or improvement program, which 
296.28  obligation is payable wholly or partly from the proceeds of 
296.29  special assessments levied upon property specially benefited by 
296.30  the improvement or by an improvement within the improvement 
296.31  program, or of taxes levied upon the increased value of property 
296.32  within a district for the development of which the improvement 
296.33  is undertaken, including obligations which are the general 
296.34  obligations of the municipality, if the municipality is entitled 
296.35  to reimbursement in whole or in part from the proceeds of such 
296.36  special assessments or taxes and not less than 20 percent of the 
297.1   cost of the improvement or the improvement program is to be 
297.2   assessed against benefited property or is to be paid from the 
297.3   proceeds of federal grant funds or a combination thereof, or is 
297.4   estimated to be received from such taxes within the district; 
297.5      (4) payable wholly from the income of revenue producing 
297.6   conveniences; 
297.7      (5) under the provisions of a home rule charter which 
297.8   permits the issuance of obligations of the municipality without 
297.9   election; 
297.10     (6) under the provisions of a law which permits the 
297.11  issuance of obligations of a municipality without an election; 
297.12     (7) to fund pension or retirement fund liabilities pursuant 
297.13  to section 475.52, subdivision 6; 
297.14     (8) under a capital improvement plan under section 373.40; 
297.15     (9) to fund facilities as provided in subdivision 3; and 
297.16     (10) under sections 469.1813 to 469.1815 (property tax 
297.17  abatement authority bonds), if the proceeds of the bonds are not 
297.18  used for a purpose prohibited under section 469.176, subdivision 
297.19  4g, paragraph (b). 
297.20     [EFFECTIVE DATE.] This section is effective for bonds 
297.21  issued or sold after the day following final enactment. 
297.22     Sec. 36.  Laws 2000, chapter 490, article 11, section 26, 
297.23  the effective date, is amended to read: 
297.24     EFFECTIVE DATE:  This section is effective for increments 
297.25  spent after July 1, 2000, from districts for which certification 
297.26  was requested after May 1, 1990 June 30, 1982. 
297.27     [EFFECTIVE DATE.] This section is effective the day 
297.28  following final enactment. 
297.29     Sec. 37.  [AIRPORT IMPACT MITIGATION; DEFINITIONS.] 
297.30     Subdivision 1.  [APPLICATION.] For the purposes of this 
297.31  article, the terms defined in this section have the meanings 
297.32  given them. 
297.33     Subd. 2.  [AIRPORT IMPACT ZONE.] "Airport impact zone" 
297.34  means a contiguous or noncontiguous geographic area designated 
297.35  by a city and approved by the commissioner as part of a 
297.36  mitigation plan under section 38. 
298.1      Subd. 3.  [CITY.] "City" means the cities of Bloomington, 
298.2   Burnsville, Eagan, Inver Grove Heights, Mendota Heights, 
298.3   Minneapolis, Richfield, and St. Paul, or any of them. 
298.4      Subd. 4.  [COMMISSIONER.] "Commissioner" means the 
298.5   commissioner of trade and economic development. 
298.6      Subd. 5.  [COUNCIL.] "Council" means the metropolitan 
298.7   council. 
298.8      Subd. 6.  [DEPARTMENT.] "Department" means the department 
298.9   of trade and economic development. 
298.10     Subd. 7.  [GOVERNING BODY.] "Governing body" means the city 
298.11  council of a city. 
298.12     Subd. 8.  [HOUSING REPLACEMENT ACTIVITIES.] "Housing 
298.13  replacement activities" means rehabilitation, acquisition, 
298.14  relocation assistance, relocation of existing dwelling units, 
298.15  and construction of new dwelling units, for the purpose of 
298.16  replacing dwelling units eliminated by airport mitigation 
298.17  activities. 
298.18     Subd. 9.  [IMPACT REPORT.] "Impact report" means a written 
298.19  report identifying airport impacts adopted by a city under 
298.20  section 38. 
298.21     Subd. 10.  [MITIGATION FUND.] "Mitigation fund" means the 
298.22  airport impact mitigation fund established under section 39. 
298.23     Subd. 11.  [MITIGATION PLAN.] "Mitigation plan" means a 
298.24  plan for airport impact mitigation developed by a city and 
298.25  approved by the commissioner under section 38. 
298.26     Subd. 12.  [OBLIGATION.] "Obligation" has the meaning given 
298.27  in Minnesota Statutes, section 475.51, subdivision 3.  The term 
298.28  includes obligations issued to refund prior obligations issued 
298.29  under this article. 
298.30     Subd. 13.  [SCHOOL DISTRICT.] "School district" means a 
298.31  school district whose jurisdiction includes all or any portion 
298.32  of a city. 
298.33     Sec. 38.  [AIRPORT IMPACT MITIGATION PLANNING.] 
298.34     Subdivision 1.  [IMPACT REPORT.] A city may study and 
298.35  identify airport impacts and the scope of those impacts on the 
298.36  city.  At the conclusion of an impact study, a city must adopt a 
299.1   report of the impacts on the city.  In studying airport impacts 
299.2   and preparing a report, a city must take into account airport 
299.3   noise impacts and additional environmental, transportation, and 
299.4   economic impacts associated with expansion of the 
299.5   Minneapolis-St. Paul International Airport.  A city must also 
299.6   consider and incorporate the overhead noise guidelines 
299.7   established by the Federal Aviation Administration and 
299.8   recommendations of the Low Frequency Noise Policy Committee 
299.9   concerning noise impacts. 
299.10     Subd. 2.  [MITIGATION PLAN.] (a) After adopting an airport 
299.11  impact report, a city must develop an airport mitigation plan 
299.12  for an airport impact zone in the city.  In developing the 
299.13  mitigation plan, a city must seek to determine the most 
299.14  effective measures for mitigating the impacts identified in the 
299.15  impact report.  A city may consider any measures for mitigating 
299.16  airport impacts including, but not limited to, noise insulation 
299.17  of residential and commercial buildings, land use conversion, 
299.18  development of housing to replace units lost through mitigation 
299.19  activities, and property value assurance programs.  The 
299.20  mitigation plan must include: 
299.21     (1) designated boundaries of the airport impact zone; 
299.22     (2) a description of recommended impact mitigation 
299.23  measures; 
299.24     (3) whether the plan provides for conversion of residential 
299.25  land use or a description of proposed housing replacement 
299.26  activities; 
299.27     (4) estimates of costs of the recommended mitigation 
299.28  measures and possible financing sources; 
299.29     (5) an analysis of the feasibility of property tax 
299.30  abatement under Minnesota Statutes, sections 469.1813 to 
299.31  469.1815 as a financing source; and 
299.32     (6) the estimated amount of obligations, if any, to be 
299.33  issued under this article, including a description of the 
299.34  proposed security for the obligations and whether the city 
299.35  requests credit enhancement by the council as provided in 
299.36  section 40, subdivision 2. 
300.1      (b) Before initial approval of a mitigation plan, a city 
300.2   must conduct a public hearing after publishing at least ten days 
300.3   before the hearing a notice in a newspaper of general 
300.4   circulation in the city.  The hearing notice must state that the 
300.5   mitigation plan and the mitigation report are available for 
300.6   review in the administrative offices of the city.  After initial 
300.7   approval of the mitigation plan by the governing body, the city 
300.8   must submit the mitigation plan and the mitigation report to the 
300.9   commissioner for approval and must also submit copies to the 
300.10  council and the metropolitan airports commission for review and 
300.11  comment.  Not more than 60 days after receipt of the city's 
300.12  submission, the commissioner must approve, disapprove, or 
300.13  otherwise comment on the mitigation plan.  Failure by the 
300.14  commissioner to approve or comment within 60 days is considered 
300.15  approval of the mitigation plan.  An action described in a 
300.16  mitigation plan must not be financed by the mitigation fund or 
300.17  an airport impact district until the mitigation plan has been 
300.18  approved by the commissioner and then approved by the governing 
300.19  body. 
300.20     (c) Before approving any mitigation plan, the commissioner 
300.21  must establish criteria for evaluating proposed airport impact 
300.22  zones, airport impact districts, and mitigation measures.  The 
300.23  commissioner must consult with the cities, the council, and the 
300.24  metropolitan airports commission in developing the criteria.  
300.25  The commissioner must approve final criteria by December 31, 
300.26  2001.  Any mitigation plan approved under this article must be 
300.27  consistent with the criteria established under this paragraph. 
300.28     (d) If the mitigation plan, or any amendment under 
300.29  paragraph (e), clause (3), includes credit enhancement by the 
300.30  council as provided in section 40, subdivision 2, the mitigation 
300.31  plan must also be approved by the council before issuance of 
300.32  bonds secured under section 40, subdivision 2. 
300.33     (e) A mitigation plan may be changed after the notice, 
300.34  hearing, and approvals required of the original mitigation 
300.35  plan.  A change is permitted only to: 
300.36     (1) increase the total estimated cost of mitigation 
301.1   activities; 
301.2      (2) increase the total estimated amount of obligations to 
301.3   be issued; 
301.4      (3) secure any obligations by the pledge described in 
301.5   section 40, subdivision 2, if the pledge was not included in the 
301.6   original plan; 
301.7      (4) expand the boundaries of an airport impact zone; 
301.8      (5) create or expand the boundaries of an airport impact 
301.9   district; or 
301.10     (6) add mitigation activities beyond the scope of 
301.11  activities described in the original plan. 
301.12     (f) Expenditures to implement a mitigation plan are not 
301.13  considered a business subsidy under Minnesota Statutes, sections 
301.14  116J.993 to 116J.995. 
301.15     Sec. 39.  [AIRPORT IMPACT MITIGATION FUND.] 
301.16     Subdivision 1.  [FUND CREATED; SOURCES.] The airport impact 
301.17  mitigation fund is established in the state treasury.  The 
301.18  mitigation fund is administered by the commissioner for the 
301.19  purposes described in this section. 
301.20     Subd. 2.  [RENTAL MOTOR VEHICLE TAX PROCEEDS.] The revenue 
301.21  derived from the fee imposed under Minnesota Statutes, section 
301.22  297A.64, subdivision 2a, is appropriated annually to the 
301.23  mitigation fund beginning in the fiscal year ending in 2006 and 
301.24  ending in the fiscal year ending in 2026. 
301.25     Subd. 3.  [USE OF REVENUES.] Amounts in the mitigation fund 
301.26  may be spent only for the following purposes: 
301.27     (1) to pay principal of, interest on, and redemption 
301.28  premium, if any, on obligations issued by a city under this 
301.29  article; 
301.30     (2) to pay or reimburse a city for costs incurred to 
301.31  implement a mitigation plan, including, without limit, costs of 
301.32  preparing the impact report and mitigation plan; 
301.33     (3) to pay a school district to mitigate decreases in 
301.34  student population created by mitigation activities of a city 
301.35  under the city's mitigation plan; and 
301.36     (4) by the department to pay the costs of administering the 
302.1   mitigation fund and related activities of the department under 
302.2   this article. 
302.3      Subd. 4.  [PAYMENT PROVISIONS.] (a) Before disbursing any 
302.4   amounts from the mitigation fund, the commissioner must 
302.5   establish criteria for selecting activities identified in 
302.6   subdivision 3 to be financed from the fund.  The commissioner 
302.7   must consult with the cities, the school districts, the council 
302.8   and the metropolitan airports commission in developing the 
302.9   criteria.  The commissioner must approve final criteria by 
302.10  December 31, 2001.  The criteria must give priority to plans 
302.11  which propose assisting the metropolitan airports commission in 
302.12  meeting a goal of extending the soundproofing program from the 
302.13  current 65 DNL to the 60 DNL by 2010 and shall take into account:
302.14     (1) the severity of airport impacts among the cities and 
302.15  school districts; 
302.16     (2) the type of mitigation measures required in order to 
302.17  address the impacts; 
302.18     (3) the cost of impact mitigation activities identified in 
302.19  the mitigation plans; 
302.20     (4) the amount of obligations to be issued under this act 
302.21  as identified in the mitigation plans; and 
302.22     (5) the amount of other revenues available to pay the costs 
302.23  identified in subdivision 3. 
302.24     (b) The commissioner may establish procedures for 
302.25  administration of the mitigation fund as necessary, including 
302.26  without limitation a process for applications, disbursement, and 
302.27  reporting of expenditures. 
302.28     Subd. 5.  [TERMINATION OF MITIGATION FUND.] The mitigation 
302.29  fund ends on the earlier of: 
302.30     (1) the date by which all cities and school districts have 
302.31  notified the commissioner that all costs payable from the 
302.32  mitigation fund under this article have been paid; or 
302.33     (2) the end of the fiscal year ending in 2030.  
302.34  The balance of amounts in the mitigation fund on its termination 
302.35  are credited to the state general fund. 
302.36     Sec. 40.  [AIRPORT IMPACT MITIGATION BONDS; SECURITY.] 
303.1      Subdivision 1.  [TERMS.] (a) A city may issue obligations 
303.2   secured by: 
303.3      (1) abatements; 
303.4      (2) amounts disbursed from the airport mitigation fund; 
303.5      (3) any other revenues available to the city under law; or 
303.6      (4) any combination of revenue described in clauses (1) to 
303.7   (3).  
303.8      (b) The proceeds of obligations must be used to pay or 
303.9   reimburse any costs to implement a mitigation plan, including, 
303.10  without limit, costs of preparing the impact report and the 
303.11  mitigation plan.  The governing body may provide by resolution 
303.12  that the obligations are additionally secured by the full faith 
303.13  and credit of the city.  Notwithstanding any other law or 
303.14  charter provision, voter approval is not required and net debt 
303.15  limits do not apply to obligations issued under this section.  
303.16     Subd. 2.  [METROPOLITAN AREA CREDIT ENHANCEMENT 
303.17  PROGRAM.] (a) The council may establish an airport impact 
303.18  mitigation bond credit enhancement program as provided in this 
303.19  section.  The council may pledge its full faith and credit and 
303.20  taxing powers to obligations issued under this article if: 
303.21     (1) the city so requests and the commissioner and the 
303.22  council approves that pledge as part of the city's mitigation 
303.23  plan; and 
303.24     (2) the council finds that revenues pledged for payment of 
303.25  the obligations will produce, as estimated at the time of the 
303.26  pledge, at least 125 percent of the principal and interest due 
303.27  on the obligations. 
303.28     (b) The pledge must be made by resolution of the council.  
303.29  Voter approval of obligations secured by the pledge described in 
303.30  this subdivision is not required and net debt limits do not 
303.31  apply. 
303.32     (c) Before pledging its full faith and credit, the council 
303.33  must establish criteria for approving requests for credit 
303.34  enhancement under this section.  The council must establish 
303.35  criteria in consultation with the cities, the commissioner, and 
303.36  the metropolitan airports commission.  The criteria must set 
304.1   forth priorities for credit enhancement that are consistent with 
304.2   the priorities established by the commissioner for disbursement 
304.3   from the mitigation fund under section 39 and may contain limits 
304.4   on the total amount of obligations that may be credit enhanced 
304.5   under this subdivision. 
304.6      (d) If there is a deficiency in revenues pledged to 
304.7   obligations credit enhanced under this subdivision, the council 
304.8   must levy a tax against all taxable property in the metropolitan 
304.9   area and advance the proceeds of the levy to the city for 
304.10  deposit in the debt service fund for the obligations.  The city 
304.11  must reimburse the council for the advance to the extent the 
304.12  deficient revenues are later collected. 
304.13     (e) Taxes levied by the council because of credit 
304.14  enhancement under this subdivision do not affect the amount or 
304.15  rate of taxes that may be levied by the council for other 
304.16  purposes and are not subject to limit as to rate or amount. 
304.17     (f) The council and each city that participates in the 
304.18  credit enhancement program may enter into agreements they 
304.19  determine to be necessary to implement the credit enhancement 
304.20  program.  The agreements may extend over any period, 
304.21  notwithstanding any law to the contrary. 
304.22     Subd. 3.  [APPLICABILITY.] This section applies in the 
304.23  counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and 
304.24  Washington. 
304.25     Sec. 41.  [AURORA; TAX INCREMENT DISTRICT EXTENSION.] 
304.26     Subdivision 1.  [DISTRICT EXTENSION.] Notwithstanding the 
304.27  provisions of Minnesota Statutes, section 469.176, subdivision 
304.28  1c, upon approval of the governing body of the city of Aurora by 
304.29  resolution, the housing and redevelopment authority in and for 
304.30  the city of Aurora may extend to December 31, 2009, the duration 
304.31  of its downtown tax increment financing district originally 
304.32  certified in 1978.  
304.33     Subd. 2.  [SPECIAL RULES.] Increments permitted to be paid 
304.34  to and retained by the authority by subdivision 1 may only be 
304.35  used to: 
304.36     (1) pay or defease bonds or other contractual obligations; 
305.1      (2) fund public redevelopment costs within the 
305.2   redevelopment project or costs provided for in the tax increment 
305.3   financing plan; or 
305.4      (3) pay or defease bonds issued to refund the bonds.  
305.5      [EFFECTIVE DATE.] This section is effective the day after 
305.6   compliance with Minnesota Statutes, sections 469.1782, 
305.7   subdivision 2, and 645.021, subdivision 2. 
305.8      Sec. 42.  [CITY OF BROOKLYN PARK REDEVELOPMENT; 
305.9   DEFINITIONS.] 
305.10     Subdivision 1.  [AUTHORITY.] "Authority" means the Brooklyn 
305.11  Park economic development authority. 
305.12     Subd. 2.  [CITY.] "City" means the city of Brooklyn Park, 
305.13  Minnesota. 
305.14     Subd. 3.  [CITY COUNCIL.] "City council" means the 
305.15  governing body of the city of Brooklyn Park. 
305.16     Subd. 4.  [ENHANCEMENT DISTRICT.] "Enhancement district" 
305.17  means either of the authority tax increment districts numbered 
305.18  15 and 18. 
305.19     Subd. 5.  [CREEK.] "Creek" means a stream that flows 
305.20  through the boundaries of the city and, as of the effective date 
305.21  of sections 42 and 43, is regulated by a joint powers 
305.22  organization of cities, subject to the jurisdiction of the 
305.23  department of natural resources, and contained on Federal 
305.24  Emergency Management Association mapping. 
305.25     Subd. 6.  [CREEK IMPROVEMENT COSTS.] "Creek improvement 
305.26  costs" means all costs related to the planning, financing, and 
305.27  implementation of creek improvements as follows:  
305.28     (1) water quality enhancement, including but not limited to 
305.29  the construction of storm water runoff and retention facilities, 
305.30  box culverts, nonpoint source water quality treatment ponds, and 
305.31  aeration facilities; 
305.32     (2) creek bank stabilization; 
305.33     (3) wetland creation and restoration; 
305.34     (4) aquatic habitat creation and restoration; 
305.35     (5) creation and restoration of upland habitat for 
305.36  terrestrial species, including but not limited to tree and other 
306.1   plantings; 
306.2      (6) the provision of side channel ponds, shallow well 
306.3   structures, and drop structures; 
306.4      (7) alteration and modification of channels and channel 
306.5   beds; 
306.6      (8) dam reconstruction; and 
306.7      (9) low water crossings.  
306.8   Costs described in clauses (1), (3), (4), (6), and (9) 
306.9   constitute creek improvement costs only if the improvements are 
306.10  contained within a qualified redevelopment district.  Costs 
306.11  described in clauses (2), (5), (7), and (8) constitute creek 
306.12  improvement costs even if incurred outside a qualified 
306.13  redevelopment district, if the costs are within the project area 
306.14  and made with respect to improvements upstream from the 
306.15  qualified redevelopment district.  Creek improvement costs 
306.16  include the cost of acquiring interests in real property 
306.17  reasonably necessary to carry out the activities described in 
306.18  this subdivision. 
306.19     Subd. 7.  [PROJECT AREA.] "Project area" means the 
306.20  geographic area established pursuant to Minnesota Statutes, 
306.21  section 469.028, to which the project plan applies and within 
306.22  which the qualified redevelopment district is located. 
306.23     Subd. 8.  [PROJECT PLAN.] "Project plan" means the village 
306.24  master plan/Shingle Creek corridor plan. 
306.25     Subd. 9.  [QUALIFIED COSTS.] "Qualified costs" means creek 
306.26  improvement costs and other costs of a qualified redevelopment 
306.27  district authorized by Minnesota Statutes, section 469.176, 
306.28  subdivision 4.  Notwithstanding the provisions of Minnesota 
306.29  Statutes, section 469.176, subdivision 4g, qualified costs 
306.30  include assistance for a recreation facility to be owned by a 
306.31  private, nonprofit entity and located within the district. 
306.32     Subd. 10.  [QUALIFIED REDEVELOPMENT DISTRICT.] "Qualified 
306.33  redevelopment district" means a tax increment financing 
306.34  redevelopment district, as defined in Minnesota Statutes, 
306.35  section 469.174, subdivision 10, paragraph (a), clause (1), the 
306.36  boundaries of which are as established on May 22, 2000, and that 
307.1   is located within a project area which, as of May 22, 2000, 
307.2   contained the following: 
307.3      (1) at least 100 acres; 
307.4      (2) a creek; 
307.5      (3) at least 100,000 square feet of unoccupied commercial 
307.6   space; 
307.7      (4) commercial property, at least 25 percent of which, by 
307.8   acreage, is proposed by the project plan to be down-zoned 
307.9   through conversion to housing, open space, and tax-exempt uses; 
307.10  and 
307.11     (5) at least 700 multifamily rental housing units, all of 
307.12  which have rent structures that are affordable to persons and 
307.13  families of annual income at or below 60 percent of the 
307.14  Minneapolis-St. Paul median income, as determined by the United 
307.15  States Department of Housing and Urban Development. 
307.16     [EFFECTIVE DATE.] This section is effective the day 
307.17  following final enactment. 
307.18     Sec. 43.  [BROOKLYN PARK; REDEVELOPMENT DISTRICT.] 
307.19     Subdivision 1.  [AUTHORITY GRANTED.] Notwithstanding 
307.20  anything to the contrary in Minnesota Statutes, sections 469.174 
307.21  to 469.178, the authority may (1) expend tax increment derived 
307.22  from a qualified redevelopment district for qualified costs, and 
307.23  (2) pledge or expend tax increment derived from enhancement 
307.24  districts, to the extent not otherwise obligated to the 
307.25  enhancement districts, for the qualified costs of a qualified 
307.26  redevelopment district.  
307.27     Subd. 2.  [LIMITATIONS.] (a) At least 30 percent of the tax 
307.28  increment pledged or transferred to a qualified redevelopment 
307.29  district from the enhancement districts must be utilized for 
307.30  creek improvement costs. 
307.31     (b) Except as otherwise described in section 42, 
307.32  subdivision 6, tax increment derived from a qualified 
307.33  redevelopment district, or derived from an enhancement district 
307.34  and pledged or transferred to a qualified redevelopment 
307.35  district, must not be expended outside of the qualified 
307.36  redevelopment district boundaries. 
308.1      (c) Tax increment derived from the enhancement districts 
308.2   and pledged or transferred to a qualified redevelopment district 
308.3   must be used exclusively for qualified costs of the qualified 
308.4   redevelopment district or must be returned to the county auditor 
308.5   for distribution to the municipality, county, and school 
308.6   district in direct proportion to their respective local tax 
308.7   rates. 
308.8      (d) The boundaries of a qualified redevelopment district or 
308.9   of the enhancement districts must not be modified following the 
308.10  effective date of this section. 
308.11     Subd. 3.  [LOCAL CONTRIBUTION.] With respect to any 
308.12  enhancement district to which Minnesota Statutes, section 
308.13  273.1399, applies, and notwithstanding anything to the contrary 
308.14  in Minnesota Statutes, section 273.1399, in determining a local 
308.15  contribution for a qualified redevelopment district and the 
308.16  enhancement district under Minnesota Statutes, section 273.1399, 
308.17  subdivision 6, paragraph (d), tax increment derived from the 
308.18  enhancement district that is pledged or transferred to a 
308.19  qualified redevelopment district must be (1) subtracted from the 
308.20  tax increment derived from the enhancement district, and deemed 
308.21  as not derived therefrom, and added to the tax increment derived 
308.22  from the qualified redevelopment district, and deemed as derived 
308.23  therefrom, and (2) treated as tax increment derived from the 
308.24  qualified redevelopment district for all purposes including the 
308.25  listed percentage of qualifying local contribution.  Any 
308.26  qualifying local contributions related to a qualified 
308.27  redevelopment district must be counted toward satisfaction of 
308.28  the local contribution requirement for the qualified 
308.29  redevelopment district, including tax increment deemed derived 
308.30  from the qualified redevelopment district by operation of this 
308.31  section.  A local contribution is not required with respect to 
308.32  the enhancement district tax increment returned to the county 
308.33  auditor as provided in subdivision 2, paragraph (c). 
308.34     [EFFECTIVE DATE.] This section is effective the day 
308.35  following final enactment. 
308.36     Sec. 44.  [CITY OF DULUTH; EXPENDITURE OF TAX INCREMENTS.] 
309.1      Subdivision 1.  [EXPENDITURES AUTHORIZED.] Notwithstanding 
309.2   Minnesota Statutes, section 469.1764, the Duluth economic 
309.3   development authority may expend up to $3,000,000 of tax 
309.4   increments collected from development district No. 3 on 
309.5   activities located outside the geographic boundaries of the 
309.6   district, subject to the conditions in this section. 
309.7      Subd. 2.  [LOCATION OF EXPENDITURES.] Tax increments must 
309.8   be spent within the area bounded by the following described 
309.9   lines: 
309.10     (1) to the north by a line described as follows:  beginning 
309.11  at the intersection of the center line of 29th Avenue West and 
309.12  the southerly line of West Michigan Street, thence southwesterly 
309.13  along the southerly line of West Michigan Street to the east 
309.14  limit of the DM&IR railway right-of-way; thence northwesterly 
309.15  along the easterly limit of the DM&IR railway right-of-way to 
309.16  the centerline of West Superior Street to its intersection with 
309.17  the centerline of Jenswold Street; thence southwesterly along 
309.18  the centerline of Jenswold Street to its intersection with the 
309.19  centerline of the Northern Pacific Railway Company's main line 
309.20  to St. Paul; thence southwesterly along the centerline of the 
309.21  Northern Pacific Railway Company's main line to St. Paul to its 
309.22  intersection with the extended centerline of 37th Avenue West; 
309.23     (2) to the west by a line described as follows:  beginning 
309.24  at the intersection of the centerline of the Northern Pacific 
309.25  Railway Company's main line to St. Paul and the extended 
309.26  centerline of 37th Avenue West; then southeasterly along said 
309.27  extended centerline of 37th Avenue West to its intersection with 
309.28  the centerline of Interstate highway 35; 
309.29     (3) to the south by the centerline of Interstate highway 
309.30  35; and 
309.31     (4) to the east by the centerline of 29th Avenue West. 
309.32     Subd. 3.  [LIMITATIONS ON USE.] All expenditures of tax 
309.33  increments permitted by this section must meet the requirements 
309.34  of Minnesota Statutes, section 469.176, subdivision 4j. 
309.35     Subd. 4.  [LOCAL CONTRIBUTION.] The authority must by 
309.36  resolution irrevocably elect to make local contributions with 
310.1   respect to the district under Minnesota Statutes, section 
310.2   273.1399, subdivision 6, paragraph (d), clause (1)(B), except 
310.3   that the required percentage applies to the total annual 
310.4   expenditures made by the authority in the area described in 
310.5   subdivision 2.  The authority must make the election under this 
310.6   paragraph by August 1, 2001, and must notify the commissioner of 
310.7   revenue of the election by September 1, 2001.  If the authority 
310.8   fails to make the required local contribution in any year, the 
310.9   state aid reduction under Minnesota Statutes, section 273.1399, 
310.10  applies to the district, except that the "qualifying net tax 
310.11  capacity" is the net tax capacity attributable to the total 
310.12  annual tax increment expenditures made by the authority in the 
310.13  area described in subdivision 2. 
310.14     [EFFECTIVE DATE.] This section is effective June 1, 2001. 
310.15     Sec. 45.  [MINNEAPOLIS COMMUNITY DEVELOPMENT AGENCY.] 
310.16     Subdivision 1.  [TIME LIMIT FOR TAX INCREMENT EXPENDITURE 
310.17  EXTENDED.] Notwithstanding Minnesota Statutes, section 469.176, 
310.18  subdivision 1c, revenue derived from tax increments from tax 
310.19  increment financing districts created prior to August 1, 1979, 
310.20  may be expended for neighborhood revitalization purposes after 
310.21  April 1, 2001, under the authority in Minnesota Statutes, 
310.22  section 469.1831, and Laws 1990, chapter 604, article 7, section 
310.23  29, as amended by Laws 1991, chapter 291, article 10, section 
310.24  2.  This section applies only to revenues derived from tax 
310.25  increments received on or before April 1, 2001. 
310.26     [EFFECTIVE DATE.] This section is effective as of April 1, 
310.27  2001, after compliance with Minnesota Statutes, section 645.021, 
310.28  subdivision 3. 
310.29     Sec. 46.  [GAYLORD; TAX INCREMENT FINANCING DISTRICT 
310.30  EXTENSION.] 
310.31     Notwithstanding the provisions of Minnesota Statutes, 
310.32  section 469.176, subdivision 1c, or any other law, the city of 
310.33  Gaylord may, by resolution, extend the duration of a tax 
310.34  increment financing district originally certified in 1978.  If 
310.35  the city extends the district, the district is deemed to 
310.36  continue to be in effect, beginning for taxes payable in 2002, 
311.1   and notwithstanding the decertification of the district for 
311.2   taxes payable in 2001.  The city may not extend the duration 
311.3   beyond December 31, 2009.  Notwithstanding the provisions of 
311.4   Minnesota Statutes, section 469.176, subdivision 1c, the city 
311.5   may spend increments from the district on project costs other 
311.6   than bonds issued before April 1, 1990. 
311.7      [EFFECTIVE DATE.] This section is effective upon completion 
311.8   with the requirements of Minnesota Statutes, sections 469.1782 
311.9   and 645.021.  
311.10     Sec. 47.  [HOLMAN DECREE HOUSING.] 
311.11     To implement a federal court order or decree relating to 
311.12  the provision of low-rent public housing finance, in whole or in 
311.13  part, with federal financial assistance under section 5 of the 
311.14  United States Housing Act, or any successor legislation, the 
311.15  Minneapolis public housing authority or the metropolitan 
311.16  council, acting under the powers of Minnesota Statutes, sections 
311.17  469.001 to 469.047, may enter a cooperation agreement with the 
311.18  governing body of any municipality or county within the 
311.19  metropolitan area, as defined in Minnesota Statutes, section 
311.20  473.121, subdivision 2, to provide exemption from all real and 
311.21  personal taxes levied or imposed by the state, city, county, or 
311.22  other political subdivision, for which the Minneapolis public 
311.23  housing authority or the metropolitan council shall make, or 
311.24  cause to be made, payments in lieu of taxes as provided under 
311.25  Minnesota Statutes, section 469.040.  This exemption and 
311.26  obligation to make payments in lieu of taxes continues until the 
311.27  housing is no longer subject to the provisions of section 5 of 
311.28  the United States Housing Act, or any successor legislation. 
311.29     [EFFECTIVE DATE.] This section is effective with respect to 
311.30  any cooperation agreement entered into on or after November 1, 
311.31  1997.  Any owner of low-rent public housing acquired and 
311.32  renovated or constructed under a cooperation agreement under 
311.33  this section may apply for abatement of the real or personal 
311.34  property taxes under Minnesota Statutes, section 375.192, 
311.35  notwithstanding the time limitation for filing application under 
311.36  section 375.192.  This section applies in the counties of Anoka, 
312.1   Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. 
312.2      Sec. 48.  [CITY OF HIBBING; TAX INCREMENT FINANCING 
312.3   DISTRICT.] 
312.4      Subdivision 1.  [AUTHORIZATION.] The governing body of the 
312.5   city of Hibbing may create a soils condition tax increment 
312.6   financing district as provided in this section.  The city or its 
312.7   economic development authority may be the "authority" for the 
312.8   purposes of Minnesota Statutes, sections 469.174 to 469.179. 
312.9      Subd. 2.  [SPECIAL RULES.] (a) The district established 
312.10  under subdivision 1 is subject to the provisions of Minnesota 
312.11  Statutes, sections 469.174 to 469.179, except as provided in 
312.12  this subdivision.  
312.13     (b) The district may consist of all or any portion of the 
312.14  area bounded on the north by Ironworld and the extension of 
312.15  county truck highway No. 5; on the west by the eastern right-of- 
312.16  way of state highway No. 169; on the south by Grace Road; and on 
312.17  the east by a line 1,000 yards east of the eastern right-of-way 
312.18  of state highway No. 169. 
312.19     (c) Minnesota Statutes, sections 469.174, subdivision 19; 
312.20  469.176, subdivision 4b; and 469.1782, subdivision 1; do not 
312.21  apply to this district. 
312.22     (d) Upon approval of the tax increment financing plan, the 
312.23  governing body of the city of Hibbing must find that the present 
312.24  value of the projected cost to level or remove mining overburden 
312.25  on property within the district equals or exceeds the present 
312.26  value of the projected tax increments for the maximum duration 
312.27  of the district permitted by the plan.  
312.28     (e) Notwithstanding the provisions of Minnesota Statutes, 
312.29  section 469.1763, increments from the district established under 
312.30  this section may only be expended to finance the cost of (1) 
312.31  grading, excavation, and related site preparation activities 
312.32  within the district and (2) administrative expenses. 
312.33     (f) Notwithstanding the provisions of Minnesota Statutes, 
312.34  section 469.176, subdivision 1b, no tax increment may be paid to 
312.35  the authority after 25 years after receipt by the authority of 
312.36  the first increment for the district. 
313.1      (g) The improvements to be constructed in the district may 
313.2   include a privately-owned racetrack, notwithstanding the 
313.3   provisions of section 469.176, subdivision 4g, clause (a). 
313.4      [EFFECTIVE DATE.] This section is effective upon compliance 
313.5   with Minnesota Statutes, sections 469.1782, subdivision 2, and 
313.6   645.021, subdivision 3. 
313.7      Sec. 49.  [MUNICIPAL PLEDGES OF TAX AND TAX INCREMENT.] 
313.8      Subdivision 1.  [CITY OF HIBBING.] The city of Hibbing may 
313.9   pledge proceeds of the tax received by the city under Minnesota 
313.10  Statutes, section 298.28, subdivision 2, and any tax increments 
313.11  received from the district created under section 48, to pay debt 
313.12  service on any obligations issued by the city or by the 
313.13  commissioner of iron range resources and rehabilitation.  The 
313.14  proceeds of bonds that are allocable to pledged tax proceeds 
313.15  must be used to pay costs that are authorized expenditures of 
313.16  tax proceeds under Minnesota Statutes, section 298.28, 
313.17  subdivision 2, and the proceeds of bonds that are allocable to 
313.18  tax increments from the district created under section 48 must 
313.19  be used to pay costs that are authorized expenditures of tax 
313.20  increment under section 48.  Voter approval of obligations 
313.21  secured by any pledge described in this section is not required 
313.22  and net debt limits do not apply.  This section supplements any 
313.23  other authority of the city under law to expend or pledge the 
313.24  tax and tax increments described in this section. 
313.25     Subd. 2.  [CITY OF CHISHOLM AND BALKAN TOWNSHIP.] The city 
313.26  of Chisholm and the township of Balkan, county of St. Louis, may 
313.27  each pledge proceeds of the tax received by the city or the 
313.28  township under Minnesota Statutes, section 298.28, subdivision 
313.29  2, to pay debt service on any obligations issued by the city of 
313.30  Hibbing or by the commissioner of iron range resources and 
313.31  rehabilitation, as described in subdivision 1.  The proceeds of 
313.32  bonds that are allocable to pledged tax proceeds of the city of 
313.33  Chisholm or the township of Balkan must be used to pay costs 
313.34  that are authorized expenditures of tax proceeds under Minnesota 
313.35  Statutes, section 298.28, subdivision 2.  Voter approval of the 
313.36  pledge or of obligations secured by any pledge described in this 
314.1   section is not required and net debt limits do not apply.  This 
314.2   section supplements any other authority of the city or the 
314.3   township under law to expend or pledge the tax described in this 
314.4   section.  
314.5      [EFFECTIVE DATE.] This section is effective for the city of 
314.6   Chisholm and Balkan township upon compliance by each with 
314.7   Minnesota Statutes, section 645.021, subdivision 3.  
314.8      Sec. 50. [CITY OF INVER GROVE HEIGHTS; LOCAL CONTRIBUTION 
314.9   ELECTION.] 
314.10     Notwithstanding the provisions of Minnesota Statutes, 
314.11  section 273.1399, or any other law, the city of Inver Grove 
314.12  Heights, by resolution approved by its city council, may at any 
314.13  time elect to make a qualifying local contribution in accordance 
314.14  with Minnesota Statutes, section 273.1399, subdivision 6, 
314.15  paragraph (d), with respect to designated parcels within tax 
314.16  increment financing district No. 4-1 of the city.  The election 
314.17  must be filed in the offices of the county auditor and the 
314.18  commissioner of revenue.  If the city elects to make a 
314.19  qualifying local contribution under this section, (i) the 
314.20  required qualifying contribution under Minnesota Statutes, 
314.21  section 273.1399, subdivision 6, paragraph (d), must be 
314.22  determined by reference to the tax increment derived from the 
314.23  designated parcels in the district from and after the date of 
314.24  the election; and (ii) the qualifying captured net tax capacity 
314.25  of the district for purposes of Minnesota Statutes, section 
314.26  273.1399, must exclude the captured net tax capacity 
314.27  attributable to the designated parcels.  Once an election is 
314.28  made under this section it must not be revoked. 
314.29     [EFFECTIVE DATE.] This section is effective the day after 
314.30  approval by the governing body of the city of Inver Grove 
314.31  Heights and compliance with Minnesota Statutes, section 645.021, 
314.32  subdivision 3. 
314.33     Sec. 51.  [CITY OF MEDFORD; ECONOMIC DEVELOPMENT 
314.34  DISTRICTS.] 
314.35     For the purposes of Minnesota Statutes, section 469.174, 
314.36  subdivision 27, the city of Medford is deemed to be a small city 
315.1   notwithstanding its location within ten miles of a city with a 
315.2   population of 10,000 or more. 
315.3      [EFFECTIVE DATE.] This section is effective upon approval 
315.4   by the governing body of the city of Medford and compliance with 
315.5   the requirements of Minnesota Statutes, section 645.021, 
315.6   subdivision 3, and applies to requests for certification of tax 
315.7   increment financing districts or additions of new area to tax 
315.8   increment financing districts after the day of final enactment. 
315.9      Sec. 52.  [CITY OF NORTH ST. PAUL; TAX INCREMENT FINANCING 
315.10  GRANT.] 
315.11     Notwithstanding Laws 1997, chapter 231, article 1, sections 
315.12  19 and 22, as amended by Laws 1997, First Special Session 
315.13  chapter 5, section 36, Laws 1999, chapter 243, article 10, 
315.14  sections 16, 17, 27, and 28, and Laws 2000, chapter 490, article 
315.15  11, section 36, the commissioner of revenue shall pay to the 
315.16  city of North St. Paul the amount of $12,800 as a tax increment 
315.17  financing grant provided for under those laws.  This amount 
315.18  compensates the city for the aggregate amount of the calendar 
315.19  year 1999 deficits in the tax increment financing districts 
315.20  within the city, as determined under the laws cited in this 
315.21  section using the accrual method of accounting.  The amount 
315.22  authorized to be paid under this section for the calendar year 
315.23  1999 tax increment financing deficits may not also be paid under 
315.24  any other provision of law.  The commissioner shall pay the 
315.25  amount authorized under this section to the city by warrant 
315.26  issued on or before 60 days after the enactment of this 
315.27  section.  The warrant must be drawn on the state treasury from 
315.28  the appropriations made in Laws 1997, chapter 231, article 1, 
315.29  section 19, and Laws 1999, chapter 243, article 10, section 27. 
315.30     [EFFECTIVE DATE.] This section is effective the day 
315.31  following final enactment without local approval. 
315.32     Sec. 53.  [CITY OF PARK RAPIDS; EXTENSION OF TIME FOR 
315.33  ACTIVITY IN A TAX INCREMENT FINANCING DISTRICT.] 
315.34     The requirement in Minnesota Statutes, section 469.1763, 
315.35  subdivision 3, that activities must be undertaken within a 
315.36  five-year period from the date of certification of a tax 
316.1   increment financing district must be considered to be met in the 
316.2   case of redevelopment district No. 4 in the city of Park Rapids 
316.3   if the activities are undertaken within six years from the date 
316.4   of certification of the district. 
316.5      [EFFECTIVE DATE.] This section is effective upon approval 
316.6   by the governing body of the city of Park Rapids and compliance 
316.7   with Minnesota Statutes, section 645.021, subdivision 3. 
316.8      Sec. 54.  [ST. LOUIS PARK; TAX INCREMENT FINANCING 
316.9   DISTRICTS LOCAL CONTRIBUTIONS.] 
316.10     Subdivision 1.  [LOCAL CONTRIBUTIONS AUTHORIZED.] 
316.11  Notwithstanding the provisions of Laws 1995, chapter 264, 
316.12  article 5, section 36; Laws 1996, chapter 464, article 1, 
316.13  section 11; and Minnesota Statutes, section 469.1782, 
316.14  subdivision 1, the city of St. Louis Park may elect to make 
316.15  local contributions with respect to the Excelsior Boulevard 
316.16  redevelopment project and the Oak Park Village tax increment 
316.17  financing districts under Minnesota Statutes, section 273.1399, 
316.18  subdivision 6, paragraph (d), clause (1), item (B), in lieu of 
316.19  the state aid reductions, if the following conditions are 
316.20  satisfied: 
316.21     (1) the city makes an irrevocable election to make local 
316.22  contributions with respect to the identified districts by August 
316.23  1, 2001; and 
316.24     (2) the city notifies the commissioner of revenue of the 
316.25  election by September 1, 2001.  
316.26     Subd. 2.  [QUALIFYING CONTRIBUTIONS.] If the city makes the 
316.27  election described in subdivision 1, contributions made by the 
316.28  city or its economic development authority at any time after 
316.29  January 1, 2001, and that otherwise qualify as local 
316.30  contributions under Minnesota Statutes, section 273.1399, 
316.31  subdivision 6, paragraph (d), qualify as local contributions for 
316.32  the purposes of this section.  
316.33     [EFFECTIVE DATE.] This section is effective upon local 
316.34  approval in compliance with the requirements of Minnesota 
316.35  Statutes, section 645.021. 
316.36     Sec. 55.  [CITY OF ST. PAUL; HOUSING TAX INCREMENT 
317.1   FINANCING DISTRICT.] 
317.2      The governing body of the housing and redevelopment 
317.3   authority of the city of St. Paul may create a tax increment 
317.4   financing district as provided in this section for a development 
317.5   containing owner-occupied residential units. 
317.6      Notwithstanding the income requirements in Minnesota 
317.7   Statutes, section 469.1761, subdivision 2, a tax increment 
317.8   financing district located at Osceola-St. Clair connector, 300 
317.9   Osceola Avenue in the city of St. Paul, is considered a housing 
317.10  district under Minnesota Statutes, sections 469.174 to 469.179, 
317.11  if at least 20 percent of the residential units in the project 
317.12  are initially purchased and occupied by persons at or below 80 
317.13  percent of the area median gross income, and the remaining units 
317.14  in the project are initially purchased and occupied by persons 
317.15  at or below 125 percent of the area median gross income. 
317.16     [EFFECTIVE DATE.] This section is effective upon approval 
317.17  by the governing body of the city of St. Paul, and compliance 
317.18  with Minnesota Statutes, section 645.021, subdivision 3. 
317.19     Sec. 56.  [ST. PAUL; TAX INCREMENT FINANCING.] 
317.20     Subdivision 1.  [AUTHORIZATION.] The governing body of the 
317.21  housing and redevelopment authority of the city of St. Paul may 
317.22  create a housing district in the area of St. Paul known as 
317.23  Capitol Heights, Lot V. 
317.24     Subd. 2.  [INCOME REQUIREMENTS.] (a) The district 
317.25  established under this section is subject to all the 
317.26  requirements under Minnesota Statutes, sections 469.174 through 
317.27  469.179, except the authority may elect to apply the income 
317.28  limits under paragraph (b) in lieu of the limits under Minnesota 
317.29  Statutes, section 469.1761, subdivision 2. 
317.30     (b) To the extent the project financed with increments from 
317.31  the district consists of owner occupied residential property, 
317.32  the following income limits apply: 
317.33     (1) at least ten percent of the units must initially be 
317.34  purchased and occupied by persons at or below 60 percent of the 
317.35  area median gross income; 
317.36     (2) an additional ten percent of the units must initially 
318.1   be purchased and occupied by persons at or below 80 percent of 
318.2   the area median gross income; and 
318.3      (3) the rest of the units must initially be purchased and 
318.4   occupied by persons at or below 115 percent of the area median 
318.5   gross income. 
318.6      [EFFECTIVE DATE.] This section is effective upon local 
318.7   approval by the governing body of the city of St. Paul and 
318.8   compliance with Minnesota Statutes, section 645.021, subdivision 
318.9   3. 
318.10     Sec. 57.  [SOUTH ST. PAUL; SINGLE-FAMILY HOUSING.] 
318.11     Due to the shortage of single-family housing in the city of 
318.12  South St. Paul, the legislature finds and declares that it is a 
318.13  public purpose for the city to facilitate the construction of 
318.14  single-family homes to the greatest extent possible.  The city 
318.15  of South St. Paul may convey to a private person, firm, 
318.16  partnership, corporation, or other entity a parcel of real 
318.17  estate acquired from the Minnesota department of transportation 
318.18  by quit claim deed, that parcel described as:  "That part of the 
318.19  Southwest Quarter of the Northwest Quarter of Section 28, 
318.20  Township 28 North, Range 22 West, Dakota County, Minnesota, 
318.21  described as follows: 
318.22     Beginning at the West Quarter corner of said Section 28; 
318.23  thence East on the East and West Quarter line of said Section 28 
318.24  a distance of 570 feet; thence run Northwesterly to a point on 
318.25  the East line of the West 221.5 feet of said Southwest Quarter 
318.26  of the Northwest Quarter, distant 280 feet North of its 
318.27  intersection with the East and West Quarter line of said Section 
318.28  28; thence run Northwesterly to a point on the West line of said 
318.29  Section 28, distant 375 feet North of the West Quarter corner 
318.30  thereof; thence run South on said West section line 375 feet to 
318.31  the point of beginning."  
318.32     The legislature declares that the conveyance to a private 
318.33  person, firm, partnership, corporation, or other entity for the 
318.34  construction of single-family residential dwellings is a public 
318.35  purpose.  
318.36     [EFFECTIVE DATE.] This section is effective without local 
319.1   approval on the day following final enactment. 
319.2      Sec. 58.  [WASECA ECONOMIC DEVELOPMENT AUTHORITY; 
319.3   EXPENDITURE OF TAX INCREMENT REVENUE.] 
319.4      Notwithstanding Minnesota Statutes, sections 469.176, 
319.5   subdivision 4j; and 469.1763, subdivision 2, for tax increment 
319.6   financing district No. 23, established by the economic 
319.7   development authority of Waseca on November 6, 2000, the city 
319.8   and the authority may expend revenue derived from tax increments 
319.9   from the district to pay or reimburse the cost of planning, 
319.10  engineering, construction, reconstruction, repair and 
319.11  improvement of exterior walls, exterior windows and doors, and 
319.12  roofs of existing structures that were built before 1950 or of 
319.13  properties that are owned by the city or the authority within 
319.14  the original central business district, blocks 4, 5, 6, 7, 8, 
319.15  and 9, of the Original Plat of Waseca, and blocks 1 and 2 of 
319.16  Barneys Addition to the city of Waseca.  Those costs are deemed 
319.17  to be public redevelopment costs and qualified costs for 
319.18  purposes of Minnesota Statutes, section 469.176, subdivisions 4 
319.19  and 4j. 
319.20     [EFFECTIVE DATE.] This section is effective the day after 
319.21  approval by the governing body of the city of Waseca and 
319.22  compliance with Minnesota Statutes, section 645.021, subdivision 
319.23  3. 
319.24     Sec. 59.  [WAYZATA HOUSING AND REDEVELOPMENT AUTHORITY; USE 
319.25  OF TAX INCREMENTS FOR CONSTRUCTION OF A PUBLIC LIBRARY.] 
319.26     The contract dated December 7, 1999, entered into by the 
319.27  city of Wayzata with respect to the construction of a public 
319.28  library and any other contracts entered into by the city of 
319.29  Wayzata for the acquisition and construction of a public 
319.30  library, constitute binding contracts within the meaning of 
319.31  clause (2) of the second paragraph of Laws 1999, chapter 243, 
319.32  article 10, section 29.  Notwithstanding any other law to the 
319.33  contrary, the housing and redevelopment authority in and for the 
319.34  city of Wayzata may use tax increments from redevelopment tax 
319.35  increment financing district No. 2 established by the housing 
319.36  and redevelopment authority in and for the city of Wayzata in 
320.1   1986 for the acquisition and construction of a public library. 
320.2      [EFFECTIVE DATE.] This section is effective the day after 
320.3   approval by the governing body of the city of Wayzata and 
320.4   compliance with Minnesota Statutes, section 645.021, subdivision 
320.5   3. 
320.6      Sec. 60.  [YELLOW MEDICINE COUNTY.] 
320.7      The governing body of Yellow Medicine county may elect to 
320.8   extend the duration of redevelopment tax increment financing 
320.9   district No. 1-1 in development district 1 by up to ten 
320.10  additional years. 
320.11     [EFFECTIVE DATE.] This section is effective upon compliance 
320.12  with the requirements of Minnesota Statutes, sections 469.1782, 
320.13  subdivision 2, and 645.021. 
320.14     Sec. 61.  [APPROPRIATIONS.] 
320.15     (a) An amount equal to the proceeds of the fee imposed 
320.16  under section 4 after June 30, 2001, and before July 1, 2005, is 
320.17  appropriated from the general fund to the commissioner of trade 
320.18  and economic development for a redevelopment grant or grants to 
320.19  the city of Richfield under Minnesota Statutes, sections 
320.20  116J.561 to 116J.566.  
320.21     (b) Grants made under this authority may only be used for 
320.22  acquisition and site preparation of residential property in the 
320.23  city of Richfield, located within the 87 decibel low frequency 
320.24  sound contour as established by the metropolitan airports 
320.25  commission and the city of Richfield's noise policy committee.  
320.26  A property qualifies as a residential property only if the land 
320.27  is improved with a building and at least 75 percent of the 
320.28  square footage of the building is for single family or multiunit 
320.29  residential uses.  
320.30     (c) For purposes of this grant, the local match requirement 
320.31  under Minnesota Statutes, section 116J.566, and the requirements 
320.32  to repay sales proceeds under section 116J.567, do not apply. 
320.33     Sec. 62.  [REPEALER.] 
320.34     Minnesota Statutes 2000, sections 469.177, subdivisions 1a 
320.35  and 11; and 469.1771, subdivision 2b, are repealed. 
320.36                             ARTICLE 13
321.1                          MINERALS TAXATION
321.2      Section 1.  Minnesota Statutes 2000, section 116J.424, is 
321.3   amended to read: 
321.4      116J.424 [IRRRB CONTRIBUTION.] 
321.5      The commissioner of the iron range resources and 
321.6   rehabilitation board with approval of the board shall provide an 
321.7   equal match for any loan or equity investment made for a 
321.8   facility located in the tax relief area defined in section 
321.9   273.134, paragraph (b), by the Minnesota minerals 21st century 
321.10  fund created by section 116J.423.  The match may be in the form 
321.11  of a loan or equity investment, notwithstanding whether the fund 
321.12  makes a loan or equity investment.  The state shall not acquire 
321.13  an equity interest because of an equity investment or loan by 
321.14  the board and the board at its sole discretion shall decide what 
321.15  interest it acquires in a project.  The commissioner of trade 
321.16  and economic development may require a commitment from the board 
321.17  to make the match prior to disbursing money from the fund. 
321.18     Sec. 2.  Minnesota Statutes 2000, section 123B.75, is 
321.19  amended by adding a subdivision to read: 
321.20     Subd. 6b.  [TACONITE PRODUCTION TAX AID.] Taconite 
321.21  production tax aid received under section 298.28 must be 
321.22  recognized as revenue in the fiscal year preceding its 
321.23  distribution. 
321.24     [EFFECTIVE DATE.] This section is effective for 
321.25  distributions in 2002 and thereafter. 
321.26     Sec. 3.  Minnesota Statutes 2000, section 126C.48, 
321.27  subdivision 8, is amended to read: 
321.28     Subd. 8.  [TACONITE PAYMENT AND OTHER REDUCTIONS.] (1) 
321.29  Reductions in levies pursuant to sections 126C.48, subdivision 
321.30  1, and 273.138, must be made prior to the reductions in clause 
321.31  (2). 
321.32     (2) Notwithstanding any other law to the contrary, 
321.33  districts which received payments pursuant to sections 298.018; 
321.34  298.24 to 298.28, except an amount distributed under section 
321.35  298.28, subdivision 4, paragraph (c), clause (ii); 298.34 to 
321.36  298.39; 298.391 to 298.396; 298.405; and any law imposing a tax 
322.1   upon severed mineral values, or recognized revenue pursuant to 
322.2   section 477A.15 or section 44; must not include a portion of 
322.3   these aids in their permissible levies pursuant to those 
322.4   sections, but instead must reduce the permissible levies 
322.5   authorized by this chapter and chapters 120B, 122A, 123A, 123B, 
322.6   124A, 124D, 125A, and 127A by the greater of the following: 
322.7      (a) an amount equal to 50 percent of the total dollar 
322.8   amount of the payments received pursuant to those sections or 
322.9   revenue recognized pursuant to section 477A.15 or section 44 in 
322.10  the previous fiscal year; or 
322.11     (b) an amount equal to the total dollar amount of the 
322.12  payments received pursuant to those sections or revenue 
322.13  recognized pursuant to section 477A.15 in the previous fiscal 
322.14  year less the product of the same dollar amount of payments or 
322.15  revenue times five percent. 
322.16     (3) No reduction pursuant to this subdivision shall reduce 
322.17  the levy made by the district pursuant to section 126C.13, to an 
322.18  amount less than the amount raised by a levy of a net tax rate 
322.19  of 6.82 percent times the adjusted net tax capacity for taxes 
322.20  payable in 1990 and thereafter of that district for the 
322.21  preceding year as determined by the commissioner.  The amount of 
322.22  any increased levy authorized by referendum pursuant to section 
322.23  126C.17, subdivision 9, shall not be reduced pursuant to this 
322.24  subdivision.  The amount of any levy authorized by section 
322.25  126C.43, to make payments for bonds issued and for interest 
322.26  thereon, shall not be reduced pursuant to this subdivision.  
322.27     (4) Before computing the reduction pursuant to this 
322.28  subdivision of the health and safety levy authorized by sections 
322.29  123B.57 and 126C.40, subdivision 5, the commissioner shall 
322.30  ascertain from each affected school district the amount it 
322.31  proposes to levy under each section or subdivision.  The 
322.32  reduction shall be computed on the basis of the amount so 
322.33  ascertained. 
322.34     (5) Notwithstanding any law to the contrary, any amounts 
322.35  received by districts in any fiscal year pursuant to sections 
322.36  298.018; 298.24 to 298.28; 298.34 to 298.39; 298.391 to 298.396; 
323.1   298.405; or any law imposing a tax on severed mineral values; 
323.2   and not deducted from general education aid pursuant to section 
323.3   126C.21, subdivision 4, clause (2), and not applied to reduce 
323.4   levies pursuant to this subdivision shall be paid by the 
323.5   district to the St. Louis county auditor in the following amount 
323.6   by March 15 of each year, the amount required to be subtracted 
323.7   from the previous fiscal year's general education aid pursuant 
323.8   to section 126C.21, subdivision 4, which is in excess of the 
323.9   general education aid earned for that fiscal year.  The county 
323.10  auditor shall deposit any amounts received pursuant to this 
323.11  clause in the St. Louis county treasury for purposes of paying 
323.12  the taconite homestead credit as provided in section 273.135. 
323.13     Sec. 4.  Minnesota Statutes 2000, section 273.134, is 
323.14  amended to read: 
323.15     273.134 [TACONITE AND IRON ORE AREAS; TAX RELIEF AREA; 
323.16  DEFINITIONS.] 
323.17     (a) For purposes of this section and section 273.135, 
323.18  "municipality" means any city, however organized, or town, and 
323.19  the applicable assessment date is the date as of which property 
323.20  is listed and assessed for the tax in question. 
323.21     For the purposes of section 273.135, "tax relief area" 
323.22  means the geographic area contained, within the boundaries of a 
323.23  school district on January 2, 2000, which contains a 
323.24  municipality which meets the following qualifications: 
323.25     (1) it is a municipality in which the assessed valuation of 
323.26  unmined iron ore on May 1, 1941, was not less than 40 percent of 
323.27  the assessed valuation of all real property; or 
323.28     (2) it is a municipality in which, on January 1, 1977 or 
323.29  the applicable assessment date, there is a taconite 
323.30  concentrating plant or where taconite is mined or quarried or 
323.31  where there is located an electric generating plant which 
323.32  qualifies as a taconite facility. 
323.33     For purposes of this paragraph, a "tax relief area" does 
323.34  not include a school district whose boundaries are more than 20 
323.35  miles from a taconite mine or plant or in which the assessed 
323.36  valuation of unmined iron ore on May 1, 1941, was less than 40 
324.1   percent of the assessed valuation of all real property. 
324.2      (b) For purposes of section 273.1391, subdivision 2, 
324.3   paragraph (c), and chapter 298, "tax relief area" means the 
324.4   geographic area contained within the boundaries of a school 
324.5   district which contains a municipality that meets the following 
324.6   qualifications: 
324.7      (1) it is a municipality in which the assessed valuation of 
324.8   unmined iron ore on May 1, 1941, was not less than 40 percent of 
324.9   the assessed valuation of all real property; or 
324.10     (2) it is a municipality in which, on January 1, 1977, or 
324.11  the applicable assessment date, there is a taconite 
324.12  concentrating plant or where taconite is mined or quarried or 
324.13  where there is located an electric generating plant which 
324.14  qualifies as a taconite facility. 
324.15     [EFFECTIVE DATE.] This section is effective for taxes and 
324.16  aids payable and expenditures authorized in 2002 and thereafter. 
324.17     Sec. 5.  Minnesota Statutes 2000, section 273.135, 
324.18  subdivision 1, is amended to read: 
324.19     Subdivision 1.  The property tax to be paid in respect to 
324.20  property taxable within a tax relief area as defined in section 
324.21  273.134, paragraph (a), on homestead property, as otherwise 
324.22  determined by law and regardless of the market value of the 
324.23  property, for all purposes shall be reduced in the amount 
324.24  prescribed by subdivision 2, subject to the limitations 
324.25  contained therein. 
324.26     [EFFECTIVE DATE.] This section is effective for taxes 
324.27  payable in 2002 and thereafter. 
324.28     Sec. 6.  Minnesota Statutes 2000, section 273.135, 
324.29  subdivision 2, is amended to read: 
324.30     Subd. 2.  The amount of the reduction authorized by 
324.31  subdivision 1 shall be: 
324.32     (a) In the case of property located within a tax relief 
324.33  area as defined under section 273.134, paragraph (a), that is 
324.34  within the boundaries of a municipality which meets the 
324.35  qualifications prescribed in section 273.134, paragraph (a), 66 
324.36  percent of the tax, provided that the reduction shall not exceed 
325.1   the maximum amounts specified in clause paragraph (c).  
325.2      (b) In the case of property located within the boundaries 
325.3   of a school district which qualifies as a tax relief area under 
325.4   section 273.134, paragraph (a), but which is outside the 
325.5   boundaries of a municipality which meets the qualifications 
325.6   prescribed in section 273.134, paragraph (a), 57 percent of the 
325.7   tax, provided that the reduction shall not exceed the maximum 
325.8   amounts specified in clause paragraph (c).  
325.9      (c) The maximum reduction of the tax is $315.10 on property 
325.10  described in clause paragraph (a) and $289.80 on property 
325.11  described in clause paragraph (b). 
325.12     [EFFECTIVE DATE.] This section is effective for taxes 
325.13  payable in 2002 and thereafter. 
325.14     Sec. 7.  Minnesota Statutes 2000, section 273.136, 
325.15  subdivision 2, is amended to read: 
325.16     Subd. 2.  The commissioner of revenue shall determine, not 
325.17  later than April 1 of each year, the amount of reduction 
325.18  resulting from section 273.135 in each county containing a tax 
325.19  relief area as defined by section 273.134, paragraph (b), basing 
325.20  determinations on a review of abstracts of tax lists submitted 
325.21  by the county auditors pursuant to section 275.29.  The 
325.22  commissioner may make changes in the abstracts of tax lists as 
325.23  deemed necessary.  The commissioner of revenue, after such 
325.24  review, shall submit to the St. Louis county auditor, on or 
325.25  before April 15, the amount of the first half payment payable 
325.26  hereunder and on or before September 15 the amount of the second 
325.27  half payment.  
325.28     [EFFECTIVE DATE.] This section is effective for taxes 
325.29  payable in 2002 and thereafter. 
325.30     Sec. 8.  Minnesota Statutes 2000, section 273.1391, 
325.31  subdivision 2, is amended to read: 
325.32     Subd. 2.  The amount of the reduction authorized by 
325.33  subdivision 1 shall be: 
325.34     (a) In the case of property located within a school 
325.35  district which does not meet the qualifications of section 
325.36  273.134 as a tax relief area, but which is located in a county 
326.1   with a population of less than 100,000 in which taconite is 
326.2   mined or quarried and wherein a school district is located which 
326.3   does meet the qualifications of a tax relief area, and provided 
326.4   that at least 90 percent of the area of the school district 
326.5   which does not meet the qualifications of section 273.134 lies 
326.6   within such county, 57 percent of the tax on qualified property 
326.7   located in the school district that does not meet the 
326.8   qualifications of section 273.134, provided that the amount of 
326.9   said reduction shall not exceed the maximum amounts specified in 
326.10  clause (c) paragraph (d).  The reduction provided by this clause 
326.11  shall only be applicable to property located within the 
326.12  boundaries of the county described therein.  
326.13     (b) In the case of property located within a school 
326.14  district which does not meet the qualifications of section 
326.15  273.134 as a tax relief area, but which is located in a school 
326.16  district in a county containing a city of the first class and a 
326.17  qualifying municipality, but not in a school district containing 
326.18  a city of the first class or adjacent to a school district 
326.19  containing a city of the first class unless the school district 
326.20  so adjacent contains a qualifying municipality, 57 percent of 
326.21  the tax, but not to exceed the maximums specified in clause 
326.22  (c) paragraph (d). 
326.23     (c) In the case of property located within the boundaries 
326.24  of a municipality that meets the qualifications in section 
326.25  273.134, paragraph (b), but not the qualifications in section 
326.26  273.134, paragraph (a), 66 percent of the tax, provided that the 
326.27  reduction shall not exceed $315.10.  In the case of property 
326.28  located within the boundaries of a school district which 
326.29  qualifies as a tax relief area under section 273.134, paragraph 
326.30  (b), but does not qualify as a tax relief area under section 
326.31  273.134, paragraph (a), but which is outside the boundaries of a 
326.32  municipality which meets the qualifications of the preceding 
326.33  sentence, 57 percent of the tax, provided that the reduction 
326.34  shall not exceed the maximum amounts specified in paragraph (d). 
326.35     (d) Except as otherwise provided in this section, the 
326.36  maximum reduction of the tax is $289.80.  
327.1      [EFFECTIVE DATE.] This section is effective for taxes 
327.2   payable in 2002 and thereafter. 
327.3      Sec. 9.  Minnesota Statutes 2000, section 273.1391, 
327.4   subdivision 3, is amended to read: 
327.5      Subd. 3.  Not later than December 1, each county auditor 
327.6   having jurisdiction over one or more tax relief areas defined in 
327.7   subdivision 2 shall certify to the commissioner of revenue an 
327.8   estimate of the total amount of the reduction, determined under 
327.9   subdivision 2, in taxes payable the next succeeding year with 
327.10  respect to all tax relief areas in the auditor's county.  The 
327.11  commissioner shall make payments to the county by May 15 and 
327.12  October 15 annually at the times provided in section 477A.015.  
327.13  The county treasurer shall distribute as part of the May and 
327.14  October settlements the funds received from the commissioner. 
327.15     [EFFECTIVE DATE.] This section is effective for payments in 
327.16  2002 and thereafter. 
327.17     Sec. 10.  Minnesota Statutes 2000, section 276A.01, 
327.18  subdivision 2, is amended to read: 
327.19     Subd. 2.  [AREA.] "Area" means the territory included 
327.20  within all tax relief areas defined in section 273.134, 
327.21  paragraph (b). 
327.22     [EFFECTIVE DATE.] This section is effective for taxes 
327.23  payable in 2002 and thereafter. 
327.24     Sec. 11.  Minnesota Statutes 2000, section 298.018, 
327.25  subdivision 1, is amended to read: 
327.26     Subdivision 1.  [WITHIN TACONITE TAX RELIEF AREA.] The 
327.27  proceeds of the tax paid under sections 298.015 to 298.017 on 
327.28  minerals and energy resources mined or extracted within the 
327.29  taconite tax relief area defined in section 273.134, paragraph 
327.30  (b), shall be allocated as follows: 
327.31     (1) five percent to the city or town within which the 
327.32  minerals or energy resources are mined or extracted; 
327.33     (2) ten percent to the taconite municipal aid account to be 
327.34  distributed as provided in section 298.282; 
327.35     (3) ten percent to the school district within which the 
327.36  minerals or energy resources are mined or extracted; 
328.1      (4) 20 percent to a group of school districts comprised of 
328.2   those school districts wherein the mineral or energy resource 
328.3   was mined or extracted or in which there is a qualifying 
328.4   municipality as defined by section 273.134, paragraph (b), in 
328.5   direct proportion to school district indexes as follows:  for 
328.6   each school district, its pupil units determined under section 
328.7   126C.05 for the prior school year shall be multiplied by the 
328.8   ratio of the average adjusted net tax capacity per pupil unit 
328.9   for school districts receiving aid under this clause as 
328.10  calculated pursuant to chapters 122A, 126C, and 127A for the 
328.11  school year ending prior to distribution to the adjusted net tax 
328.12  capacity per pupil unit of the district.  Each district shall 
328.13  receive that portion of the distribution which its index bears 
328.14  to the sum of the indices for all school districts that receive 
328.15  the distributions; 
328.16     (5) 20 percent to the county within which the minerals or 
328.17  energy resources are mined or extracted; 
328.18     (6) 20 percent to St. Louis county acting as the counties' 
328.19  fiscal agent to be distributed as provided in sections 273.134 
328.20  to 273.136; 
328.21     (7) five percent to the iron range resources and 
328.22  rehabilitation board for the purposes of section 298.22; 
328.23     (8) five percent to the northeast Minnesota economic 
328.24  protection trust fund; and 
328.25     (9) five percent to the taconite environmental protection 
328.26  fund. 
328.27     The proceeds of the tax shall be distributed on July 15 
328.28  each year.  
328.29     Sec. 12.  Minnesota Statutes 2000, section 298.018, 
328.30  subdivision 2, is amended to read: 
328.31     Subd. 2.  [OUTSIDE TACONITE TAX RELIEF AREA.] The proceeds 
328.32  of the tax paid under sections 298.015 to 298.017 on minerals 
328.33  and energy resources mined or extracted outside of the taconite 
328.34  tax relief area defined in section 273.134, paragraph (b), shall 
328.35  be deposited in the general fund. 
328.36     Sec. 13.  Minnesota Statutes 2000, section 298.17, is 
329.1   amended to read: 
329.2      298.17 [OCCUPATION TAXES TO BE APPORTIONED.] 
329.3      All occupation taxes paid by persons, copartnerships, 
329.4   companies, joint stock companies, corporations, and 
329.5   associations, however or for whatever purpose organized, engaged 
329.6   in the business of mining or producing iron ore or other ores, 
329.7   when collected shall be apportioned and distributed in 
329.8   accordance with the Constitution of the state of Minnesota, 
329.9   article X, section 3, in the manner following:  90 percent shall 
329.10  be deposited in the state treasury and credited to the general 
329.11  fund of which four-ninths shall be used for the support of 
329.12  elementary and secondary schools; and ten percent of the 
329.13  proceeds of the tax imposed by this section shall be deposited 
329.14  in the state treasury and credited to the general fund for the 
329.15  general support of the university.  Of the moneys apportioned to 
329.16  the general fund by this section there is annually appropriated 
329.17  and credited to the iron range resources and rehabilitation 
329.18  board account in the special revenue fund an amount equal to 
329.19  that which would have been generated by a 1.5 cent tax imposed 
329.20  by section 298.24 on each taxable ton produced in the preceding 
329.21  calendar year, to be expended for the purposes of section 
329.22  298.22.  The money appropriated pursuant to this section shall 
329.23  be used (1) to provide environmental development grants to local 
329.24  governments located within any county in region 3 as defined in 
329.25  governor's executive order number 60, issued on June 12, 1970, 
329.26  which does not contain a municipality qualifying pursuant to 
329.27  section 273.134, paragraph (b), or (2) to provide economic 
329.28  development loans or grants to businesses located within any 
329.29  such county, provided that the county board or an advisory group 
329.30  appointed by the county board to provide recommendations on 
329.31  economic development shall make recommendations to the iron 
329.32  range resources and rehabilitation board regarding the loans.  
329.33  Payment to the iron range resources and rehabilitation board 
329.34  account shall be made by May 15 annually. 
329.35     Of the money allocated to Koochiching county, one-third 
329.36  must be paid to the Koochiching county economic development 
330.1   commission. 
330.2      Sec. 14.  Minnesota Statutes 2000, section 298.22, 
330.3   subdivision 2, is amended to read: 
330.4      Subd. 2.  [IRON RANGE RESOURCES AND REHABILITATION BOARD.] 
330.5   There is hereby created the iron range resources and 
330.6   rehabilitation board, consisting of 13 members, five of whom are 
330.7   state senators appointed by the subcommittee on committees of 
330.8   the rules committee of the senate, and five of whom are 
330.9   representatives, appointed by the speaker of the house of 
330.10  representatives.  The remaining members shall be appointed one 
330.11  each by the senate majority leader, the speaker of the house of 
330.12  representatives, and the governor and must be nonlegislators who 
330.13  reside in a tax relief area as defined in section 273.134, 
330.14  paragraph (b).  The members shall be appointed in January of 
330.15  every odd-numbered year, except that the initial nonlegislator 
330.16  members shall be appointed by July 1, 1999, and shall serve 
330.17  until January of the next odd-numbered year.  Vacancies on the 
330.18  board shall be filled in the same manner as the original members 
330.19  were chosen.  At least a majority of the legislative members of 
330.20  the board shall be elected from state senatorial or legislative 
330.21  districts in which over 50 percent of the residents reside 
330.22  within a tax relief area as defined in section 273.134, 
330.23  paragraph (b).  All expenditures and projects made by the 
330.24  commissioner of iron range resources and rehabilitation shall be 
330.25  consistent with the priorities established in subdivision 8 and 
330.26  shall first be submitted to the iron range resources and 
330.27  rehabilitation board for approval by a majority of the board of 
330.28  expenditures and projects for rehabilitation purposes as 
330.29  provided by this section, and the method, manner, and time of 
330.30  payment of all funds proposed to be disbursed shall be first 
330.31  approved or disapproved by the board.  The board shall 
330.32  biennially make its report to the governor and the legislature 
330.33  on or before November 15 of each even-numbered year.  The 
330.34  expenses of the board shall be paid by the state from the funds 
330.35  raised pursuant to this section. 
330.36     Sec. 15.  Minnesota Statutes 2000, section 298.22, is 
331.1   amended by adding a subdivision to read: 
331.2      Subd. 8.  [SPENDING PRIORITY.] In making or approving any 
331.3   expenditures on programs or projects, the commissioner and the 
331.4   board shall give the highest priority to programs and projects 
331.5   that target relief to those areas of the taconite tax relief 
331.6   area as defined in section 273.134, paragraph (b), that have the 
331.7   largest percentages of job losses and population losses directly 
331.8   attributable to the economic downturn in the taconite industry 
331.9   since the 1980's.  The commissioner and the board shall compare 
331.10  the 1980 population and employment figures with the 2000 
331.11  population and employment figures, and shall specifically 
331.12  consider the job losses in 2000 and 2001 resulting from the 
331.13  closure of LTV Steel Mining Company, in making or approving 
331.14  expenditures consistent with this subdivision, as well as the 
331.15  areas of residence of persons who suffered job loss for which 
331.16  relief is to be targeted under this subdivision.  This 
331.17  subdivision supersedes any other conflicting provisions of law, 
331.18  and does not preclude the commissioner and the board from making 
331.19  expenditures for programs and projects in other areas. 
331.20     Sec. 16.  Minnesota Statutes 2000, section 298.2211, 
331.21  subdivision 2, is amended to read: 
331.22     Subd. 2.  [AREA OF OPERATION.] Projects undertaken, 
331.23  developed, or financed pursuant to this section shall be located 
331.24  within the tax relief area defined in section 273.134, paragraph 
331.25  (b). 
331.26     Sec. 17.  Minnesota Statutes 2000, section 298.2213, 
331.27  subdivision 3, is amended to read: 
331.28     Subd. 3.  [USE OF MONEY.] The money appropriated under this 
331.29  section may be used to provide loans, loan guarantees, interest 
331.30  buy-downs, and other forms of participation with private sources 
331.31  of financing, provided that a loan to a private enterprise must 
331.32  be for a principal amount not to exceed one-half of the cost of 
331.33  the project for which financing is sought, and the rate of 
331.34  interest on a loan must be no less than the lesser of eight 
331.35  percent or the rate of interest that is three percentage points 
331.36  less than a full faith and credit obligation of the United 
332.1   States government of comparable maturity, at the time that the 
332.2   loan is approved.  
332.3      Money appropriated in this section must be expended only in 
332.4   or for the benefit of the tax relief area defined in section 
332.5   273.134, paragraph (b), and as otherwise provided in this 
332.6   section. 
332.7      Sec. 18.  Minnesota Statutes 2000, section 298.2214, 
332.8   subdivision 1, is amended to read: 
332.9      Subdivision 1.  [CREATION OF COMMITTEE; PURPOSE.] A 
332.10  committee is created to advise the commissioner of iron range 
332.11  resources and rehabilitation on providing higher education 
332.12  programs in the taconite tax relief area defined in section 
332.13  273.134, paragraph (b).  The committee is subject to section 
332.14  15.059. 
332.15     Sec. 19.  Minnesota Statutes 2000, section 298.223, 
332.16  subdivision 1, is amended to read: 
332.17     Subdivision 1.  [CREATION; PURPOSES.] A fund called the 
332.18  taconite environmental protection fund is created for the 
332.19  purpose of reclaiming, restoring and enhancing those areas of 
332.20  northeast Minnesota located within a tax relief area defined in 
332.21  section 273.134, paragraph (b), that are adversely affected by 
332.22  the environmentally damaging operations involved in mining 
332.23  taconite and iron ore and producing iron ore concentrate and for 
332.24  the purpose of promoting the economic development of northeast 
332.25  Minnesota.  The taconite environmental protection fund shall be 
332.26  used for the following purposes: 
332.27     (a) to initiate investigations into matters the iron range 
332.28  resources and rehabilitation board determines are in need of 
332.29  study and which will determine the environmental problems 
332.30  requiring remedial action; 
332.31     (b) reclamation, restoration, or reforestation of minelands 
332.32  not otherwise provided for by state law; 
332.33     (c) local economic development projects including 
332.34  construction of sewer and water systems, and other public works 
332.35  located within a tax relief area defined in section 273.134, 
332.36  paragraph (b); 
333.1      (d) monitoring of mineral industry related health problems 
333.2   among mining employees. 
333.3      Sec. 20.  Minnesota Statutes 2000, section 298.225, 
333.4   subdivision 1, is amended to read: 
333.5      Subdivision 1.  (a) The distribution of the taconite 
333.6   production tax as provided in section 298.28, subdivisions 2 3 
333.7   to 5, 6, paragraph (b), 7, and 8, shall equal the lesser of the 
333.8   following amounts:  
333.9      (1) the amount distributed pursuant to this section and 
333.10  section 298.28, with respect to 1983 production if the 
333.11  production for the year prior to the distribution year is no 
333.12  less than 42,000,000 35,000,000 taxable tons.  If the production 
333.13  is less than 42,000,000 35,000,000 taxable tons, the amount of 
333.14  the distributions shall be reduced proportionately at the rate 
333.15  of two 2.4 percent for each 1,000,000 tons, or part of 1,000,000 
333.16  tons by which the production is less than 42,000,000 35,000,000 
333.17  tons; or 
333.18     (2)(i) for the distributions made pursuant to section 
333.19  298.28, subdivisions 4, paragraphs (b) and (c), and 6, paragraph 
333.20  (c), 40.5 percent of the amount distributed pursuant to this 
333.21  section and section 298.28, with respect to 1983 production; 
333.22     (ii) for the distributions made pursuant to section 298.28, 
333.23  subdivision 5, paragraphs (b) and (d), 75 percent of the amount 
333.24  distributed pursuant to this section and section 298.28, with 
333.25  respect to 1983 production.  
333.26     (b) The distribution of the taconite production tax as 
333.27  provided in section 298.28, subdivision 2, shall equal the 
333.28  following amount: 
333.29     (1) if the production for the year prior to the 
333.30  distribution year is at least 35,000,000 taxable tons, the 
333.31  amount distributed pursuant to this section and section 298.28, 
333.32  with respect to 1999 production; or 
333.33     (2) if the production for the year prior to the 
333.34  distribution year is less than 35,000,000 taxable tons, the 
333.35  amount distributed pursuant to this section and section 298.28 
333.36  with respect to 1999 production, reduced proportionately at the 
334.1   rate of 2.4 percent for each 1,000,000 tons or part of 1,000,000 
334.2   tons by which the production is less than 35,000,000 tons. 
334.3      [EFFECTIVE DATE; RETROACTIVE APPLICATION.] This section is 
334.4   effective for distributions in 2001 and thereafter.  For the 
334.5   distribution paid in February 2001 only, as soon as practicable 
334.6   after the date of final enactment of this act, the commissioner 
334.7   of iron range resources and rehabilitation shall pay two-thirds 
334.8   of any additional amounts required under this section from the 
334.9   taconite environmental protection fund and one-third of any 
334.10  additional amounts required under this section from the 
334.11  northeast Minnesota economic protection trust fund, as directed 
334.12  by the commissioner of revenue. 
334.13     Sec. 21.  Minnesota Statutes 2000, section 298.24, 
334.14  subdivision 1, is amended to read: 
334.15     Subdivision 1.  (a) For concentrate produced in 1999 2001, 
334.16  2002, and 2003, there is imposed upon taconite and iron 
334.17  sulphides, and upon the mining and quarrying thereof, and upon 
334.18  the production of iron ore concentrate therefrom, and upon the 
334.19  concentrate so produced, a tax of $2.141 $2.173 per gross ton of 
334.20  merchantable iron ore concentrate produced therefrom.  
334.21     (b) For concentrates produced in 2000 2004 and subsequent 
334.22  years, the tax rate shall be equal to the preceding year's tax 
334.23  rate plus an amount equal to the preceding year's tax rate 
334.24  multiplied by the percentage increase in the implicit price 
334.25  deflator from the fourth quarter of the second preceding year to 
334.26  the fourth quarter of the preceding year.  "Implicit price 
334.27  deflator" means the implicit price deflator for the gross 
334.28  domestic product prepared by the bureau of economic analysis of 
334.29  the United States Department of Commerce.  
334.30     (c) On concentrates produced in 1997 and thereafter, an 
334.31  additional tax is imposed equal to three cents per gross ton of 
334.32  merchantable iron ore concentrate for each one percent that the 
334.33  iron content of the product exceeds 72 percent, when dried at 
334.34  212 degrees Fahrenheit. 
334.35     (d) The tax shall be imposed on the average of the 
334.36  production for the current year and the previous two years.  The 
335.1   rate of the tax imposed will be the current year's tax rate.  
335.2   This clause shall not apply in the case of the closing of a 
335.3   taconite facility if the property taxes on the facility would be 
335.4   higher if this clause and section 298.25 were not applicable.  
335.5      (e) If the tax or any part of the tax imposed by this 
335.6   subdivision is held to be unconstitutional, a tax 
335.7   of $2.141 $2.173 per gross ton of merchantable iron ore 
335.8   concentrate produced shall be imposed.  
335.9      (f) Consistent with the intent of this subdivision to 
335.10  impose a tax based upon the weight of merchantable iron ore 
335.11  concentrate, the commissioner of revenue may indirectly 
335.12  determine the weight of merchantable iron ore concentrate 
335.13  included in fluxed pellets by subtracting the weight of the 
335.14  limestone, dolomite, or olivine derivatives or other basic flux 
335.15  additives included in the pellets from the weight of the 
335.16  pellets.  For purposes of this paragraph, "fluxed pellets" are 
335.17  pellets produced in a process in which limestone, dolomite, 
335.18  olivine, or other basic flux additives are combined with 
335.19  merchantable iron ore concentrate.  No subtraction from the 
335.20  weight of the pellets shall be allowed for binders, mineral and 
335.21  chemical additives other than basic flux additives, or moisture. 
335.22     (g)(1) Notwithstanding any other provision of this 
335.23  subdivision, for the first two years of a plant's production of 
335.24  direct reduced ore, no tax is imposed under this section.  As 
335.25  used in this paragraph, "direct reduced ore" is ore that results 
335.26  in a product that has an iron content of at least 75 percent.  
335.27  For the third year of a plant's production of direct reduced 
335.28  ore, the rate to be applied to direct reduced ore is 25 percent 
335.29  of the rate otherwise determined under this subdivision.  For 
335.30  the fourth such production year, the rate is 50 percent of the 
335.31  rate otherwise determined under this subdivision; for the fifth 
335.32  such production year, the rate is 75 percent of the rate 
335.33  otherwise determined under this subdivision; and for all 
335.34  subsequent production years, the full rate is imposed. 
335.35     (2) Subject to clause (1), production of direct reduced ore 
335.36  in this state is subject to the tax imposed by this section, but 
336.1   if that production is not produced by a producer of taconite or 
336.2   iron sulfides, the production of taconite or iron sulfides 
336.3   consumed in the production of direct reduced iron in this state 
336.4   is not subject to the tax imposed by this section on taconite or 
336.5   iron sulfides. 
336.6      Sec. 22.  Minnesota Statutes 2000, section 298.27, is 
336.7   amended to read: 
336.8      298.27 [COLLECTION AND PAYMENT OF TAX.] 
336.9      The taxes provided by section 298.24 shall be paid directly 
336.10  to each eligible county and the iron range resources and 
336.11  rehabilitation board.  The commissioner of revenue shall notify 
336.12  each producer of the amount to be paid each recipient prior to 
336.13  February 15.  Every person subject to taxes imposed by section 
336.14  298.24 shall file a correct report covering the preceding year.  
336.15  The report must contain the information required by the 
336.16  commissioner.  The report shall be filed on or before February 
336.17  1.  A remittance equal to 100 percent of the total tax required 
336.18  to be paid hereunder shall be paid on or before February 24.  On 
336.19  or before February 25, except as otherwise provided in section 
336.20  298.28, the county auditor shall make distribution of the 
336.21  payment received by the county in the manner provided by section 
336.22  298.28.  Reports shall be made and hearings held upon the 
336.23  determination of the tax in accordance with procedures 
336.24  established by the commissioner of revenue.  The commissioner of 
336.25  revenue shall have authority to make reasonable rules as to the 
336.26  form and manner of filing reports necessary for the 
336.27  determination of the tax hereunder, and by such rules may 
336.28  require the production of such information as may be reasonably 
336.29  necessary or convenient for the determination and apportionment 
336.30  of the tax.  All the provisions of the occupation tax law with 
336.31  reference to the assessment and determination of the occupation 
336.32  tax, including all provisions for appeals from or review of the 
336.33  orders of the commissioner of revenue relative thereto, but not 
336.34  including provisions for refunds, are applicable to the taxes 
336.35  imposed by section 298.24 except in so far as inconsistent 
336.36  herewith.  If any person subject to section 298.24 shall fail to 
337.1   make the report provided for in this section at the time and in 
337.2   the manner herein provided, the commissioner of revenue shall in 
337.3   such case, upon information possessed or obtained, ascertain the 
337.4   kind and amount of ore mined or produced and thereon find and 
337.5   determine the amount of the tax due from such person.  There 
337.6   shall be added to the amount of tax due a penalty for failure to 
337.7   report on or before February 1, which penalty shall equal ten 
337.8   percent of the tax imposed and be treated as a part thereof. 
337.9      If any person responsible for making a tax payment at the 
337.10  time and in the manner herein provided fails to do so, there 
337.11  shall be imposed a penalty equal to ten percent of the amount so 
337.12  due, which penalty shall be treated as part of the tax due. 
337.13     In the case of any underpayment of the tax payment required 
337.14  herein, there may be added and be treated as part of the tax due 
337.15  a penalty equal to ten percent of the amount so underpaid. 
337.16     A person having a liability of $120,000 or more during a 
337.17  calendar year must remit all liabilities by means of a funds 
337.18  transfer as defined in section 336.4A-104, paragraph (a).  The 
337.19  funds transfer payment date, as defined in section 336.4A-401, 
337.20  must be on or before the date the tax is due.  If the date the 
337.21  tax is due is not a funds transfer business day, as defined in 
337.22  section 336.4A-105, paragraph (a), clause (4), the payment date 
337.23  must be on or before the funds transfer business day next 
337.24  following the date the tax is due. 
337.25     Sec. 23.  Minnesota Statutes 2000, section 298.28, 
337.26  subdivision 1, is amended to read: 
337.27     Subdivision 1.  [DISTRIBUTION.] The proceeds of the taxes 
337.28  collected under section 298.24, except the tax collected under 
337.29  section 298.24, subdivision 2, shall, upon certification of the 
337.30  commissioner of revenue, be allocated under subdivisions 2 to 
337.31  12, except as otherwise provided in subdivision 4, paragraph 
337.32  (f), subdivision 6, paragraph (e), and subdivision 11, paragraph 
337.33  (d). 
337.34     Sec. 24.  Minnesota Statutes 2000, section 298.28, 
337.35  subdivision 3, is amended to read: 
337.36     Subd. 3.  [CITIES; TOWNS.] (a) 12.5 cents per taxable ton, 
338.1   less any amount distributed under subdivision 8, and paragraph 
338.2   (b), must be allocated to the taconite municipal aid account to 
338.3   be distributed as provided in section 298.282. 
338.4      (b) An amount must be allocated to towns or cities that is 
338.5   annually certified by the county auditor of a county containing 
338.6   a taconite tax relief area as defined in section 273.134, 
338.7   paragraph (b), within which there is (1) an organized township 
338.8   if, as of January 2, 1982, more than 75 percent of the assessed 
338.9   valuation of the township consists of iron ore or (2) a city if, 
338.10  as of January 2, 1980, more than 75 percent of the assessed 
338.11  valuation of the city consists of iron ore.  
338.12     (c) The amount allocated under paragraph (b) will be the 
338.13  portion of a township's or city's certified levy equal to the 
338.14  proportion of (1) the difference between 50 percent of January 
338.15  2, 1982, assessed value in the case of a township and 50 percent 
338.16  of the January 2, 1980, assessed value in the case of a city and 
338.17  its current assessed value to (2) the sum of its current 
338.18  assessed value plus the difference determined in (1), provided 
338.19  that the amount distributed shall not exceed $55 per capita in 
338.20  the case of a township or $75 per capita in the case of a city.  
338.21  For purposes of this limitation, population will be determined 
338.22  according to the 1980 decennial census conducted by the United 
338.23  States Bureau of the Census.  If the current assessed value of 
338.24  the township exceeds 50 percent of the township's January 2, 
338.25  1982, assessed value, or if the current assessed value of the 
338.26  city exceeds 50 percent of the city's January 2, 1980, assessed 
338.27  value, this paragraph shall not apply.  For purposes of this 
338.28  paragraph, "assessed value," when used in reference to years 
338.29  other than 1980 or 1982, means the appropriate net tax 
338.30  capacities multiplied by 10.2. 
338.31     Sec. 25.  Minnesota Statutes 2000, section 298.28, 
338.32  subdivision 4, is amended to read: 
338.33     Subd. 4.  [SCHOOL DISTRICTS.] (a) 22.28 cents per taxable 
338.34  ton plus the increase provided in paragraph (d) must be 
338.35  allocated to qualifying school districts to be distributed, 
338.36  based upon the certification of the commissioner of revenue, 
339.1   under paragraphs (b) and (c), except as otherwise provided in 
339.2   paragraph (f). 
339.3      (b) 4.46 cents per taxable ton must be distributed to the 
339.4   school districts in which the lands from which taconite was 
339.5   mined or quarried were located or within which the concentrate 
339.6   was produced.  The distribution must be based on the 
339.7   apportionment formula prescribed in subdivision 2. 
339.8      (c)(i) 17.82 cents per taxable ton, less any amount 
339.9   distributed under paragraph (e), shall be distributed to a group 
339.10  of school districts comprised of those school districts in which 
339.11  the taconite was mined or quarried or the concentrate produced 
339.12  or in which there is a qualifying municipality as defined by 
339.13  section 273.134, paragraph (b), in direct proportion to school 
339.14  district indexes as follows:  for each school district, its 
339.15  pupil units determined under section 126C.05 for the prior 
339.16  school year shall be multiplied by the ratio of the average 
339.17  adjusted net tax capacity per pupil unit for school districts 
339.18  receiving aid under this clause as calculated pursuant to 
339.19  chapters 122A, 126C, and 127A for the school year ending prior 
339.20  to distribution to the adjusted net tax capacity per pupil unit 
339.21  of the district.  Each district shall receive that portion of 
339.22  the distribution which its index bears to the sum of the indices 
339.23  for all school districts that receive the distributions.  
339.24     (ii) Notwithstanding clause (i), each school district that 
339.25  receives a distribution under sections 298.018; 298.23 to 
339.26  298.28, exclusive of any amount received under this clause; 
339.27  298.34 to 298.39; 298.391 to 298.396; 298.405; or any law 
339.28  imposing a tax on severed mineral values that is less than the 
339.29  amount of its levy reduction under section 126C.48, subdivision 
339.30  8, for the second year prior to the year of the distribution 
339.31  shall receive a distribution equal to the difference; the amount 
339.32  necessary to make this payment shall be derived from 
339.33  proportionate reductions in the initial distribution to other 
339.34  school districts under clause (i).  
339.35     (d) Any school district described in paragraph (c) where a 
339.36  levy increase pursuant to section 126C.17, subdivision 9, is 
340.1   authorized by referendum, shall receive a distribution from a 
340.2   fund that receives a distribution in 1998 of 21.3 cents per 
340.3   ton.  On July 15 of 1999, and each year thereafter, the increase 
340.4   over the amount established for the prior year shall be 
340.5   determined according to the increase in the implicit price 
340.6   deflator as provided in section 298.24, subdivision 1.  Each 
340.7   district shall receive the product of: 
340.8      (i) $175 times the pupil units identified in section 
340.9   126C.05, subdivision 1, enrolled in the second previous year or 
340.10  the 1983-1984 school year, whichever is greater, less the 
340.11  product of 1.8 percent times the district's taxable net tax 
340.12  capacity in the second previous year; times 
340.13     (ii) the lesser of: 
340.14     (A) one, or 
340.15     (B) the ratio of the sum of the amount certified pursuant 
340.16  to section 126C.17, subdivision 6, in the previous year, plus 
340.17  the amount certified pursuant to section 126C.17, subdivision 8, 
340.18  in the previous year, plus the referendum aid according to 
340.19  section 126C.17, subdivision 7, for the current year, plus an 
340.20  amount equal to the reduction under section 126C.17, subdivision 
340.21  12, to the product of 1.8 percent times the district's taxable 
340.22  net tax capacity in the second previous year. 
340.23     If the total amount provided by paragraph (d) is 
340.24  insufficient to make the payments herein required then the 
340.25  entitlement of $175 per pupil unit shall be reduced uniformly so 
340.26  as not to exceed the funds available.  Any amounts received by a 
340.27  qualifying school district in any fiscal year pursuant to 
340.28  paragraph (d) shall not be applied to reduce general education 
340.29  aid which the district receives pursuant to section 126C.13 or 
340.30  the permissible levies of the district.  Any amount remaining 
340.31  after the payments provided in this paragraph shall be paid to 
340.32  the commissioner of iron range resources and rehabilitation who 
340.33  shall deposit the same in the taconite environmental protection 
340.34  fund and the northeast Minnesota economic protection trust fund 
340.35  as provided in subdivision 11. 
340.36     Each district receiving money according to this paragraph 
341.1   shall reserve $25 times the number of pupil units in the 
341.2   district.  It may use the money for early childhood programs or 
341.3   for outcome-based learning programs that enhance the academic 
341.4   quality of the district's curriculum.  The outcome-based 
341.5   learning programs must be approved by the commissioner of 
341.6   children, families, and learning. 
341.7      (e) There shall be distributed to any school district the 
341.8   amount which the school district was entitled to receive under 
341.9   section 298.32 in 1975. 
341.10     (f) Notwithstanding anything to the contrary in this 
341.11  subdivision, beginning with the year 2002 distribution, the 
341.12  amount necessary for distributions to school districts under 
341.13  paragraphs (b), (c), and (e) and section 298.225 is annually 
341.14  appropriated, upon certification by the commissioner of revenue, 
341.15  to the commissioner of children, families, and learning from the 
341.16  general fund.  On July 1, the commissioner of children, 
341.17  families, and learning shall distribute the appropriation in the 
341.18  manner provided by section 298.27. 
341.19     Sec. 26.  Minnesota Statutes 2000, section 298.28, 
341.20  subdivision 6, is amended to read: 
341.21     Subd. 6.  [PROPERTY TAX RELIEF.] (a) In 1999, 38.81 2002, 
341.22  35.9 cents per taxable ton, less any amount required to be 
341.23  distributed under paragraphs (b) and (c), and less any amount 
341.24  required to be deducted under paragraph (d), must be allocated 
341.25  to St. Louis county acting as the counties' fiscal agent, to be 
341.26  distributed as provided in sections 273.134 to 273.136. 
341.27     (b) If an electric power plant owned by and providing the 
341.28  primary source of power for a taxpayer mining and concentrating 
341.29  taconite is located in a county other than the county in which 
341.30  the mining and the concentrating processes are conducted, .1875 
341.31  cent per taxable ton of the tax imposed and collected from such 
341.32  taxpayer shall be paid to the county. 
341.33     (c) If an electric power plant owned by and providing the 
341.34  primary source of power for a taxpayer mining and concentrating 
341.35  taconite is located in a school district other than a school 
341.36  district in which the mining and concentrating processes are 
342.1   conducted, .7282 cent per taxable ton of the tax imposed and 
342.2   collected from the taxpayer shall be paid to the school district.
342.3      (d) Two cents per taxable ton must be deducted from the 
342.4   amount allocated to the St. Louis county auditor under paragraph 
342.5   (a). 
342.6      (e) Notwithstanding anything to the contrary in this 
342.7   subdivision, beginning with the year 2002 distribution, the 
342.8   amount necessary for distributions to school districts under 
342.9   paragraph (c) is annually appropriated, upon certification by 
342.10  the commissioner of revenue, to the commissioner of children, 
342.11  families, and learning from the general fund.  On July 1, the 
342.12  commissioner of children, families, and learning shall 
342.13  distribute the appropriation in the manner provided by section 
342.14  298.27. 
342.15     [EFFECTIVE DATE.] This section is effective for 
342.16  distributions in 2002 and thereafter. 
342.17     Sec. 27.  Minnesota Statutes 2000, section 298.28, 
342.18  subdivision 7, is amended to read: 
342.19     Subd. 7.  [IRON RANGE RESOURCES AND REHABILITATION BOARD.] 
342.20  For the 1998 distribution, 6.5 cents per taxable ton shall be 
342.21  paid to the iron range resources and rehabilitation board for 
342.22  the purposes of section 298.22.  That amount shall be increased 
342.23  in 1999 and subsequent years in the same proportion as the 
342.24  increase in the implicit price deflator as provided in section 
342.25  298.24, subdivision 1.  The amount distributed pursuant to this 
342.26  subdivision shall be expended within or for the benefit of a tax 
342.27  relief area defined in section 273.134, paragraph (b).  No part 
342.28  of the fund provided in this subdivision may be used to provide 
342.29  loans for the operation of private business unless the loan is 
342.30  approved by the governor. 
342.31     Sec. 28.  Minnesota Statutes 2000, section 298.28, 
342.32  subdivision 9, is amended to read: 
342.33     Subd. 9.  [MINNESOTA ECONOMIC PROTECTION TRUST FUND.] In 
342.34  1999 and subsequent years, 3.35 cents per taxable ton shall be 
342.35  paid to the northeast Minnesota economic protection trust fund.  
342.36     Sec. 29.  Minnesota Statutes 2000, section 298.28, 
343.1   subdivision 9a, is amended to read: 
343.2      Subd. 9a.  [TACONITE ECONOMIC DEVELOPMENT FUND.] (a) 15.4 
343.3   cents per ton for distributions in 1999, 2000, 2001, and 2002 
343.4   through 2004 must be paid to the taconite economic development 
343.5   fund.  No distribution shall be made under this paragraph in any 
343.6   year in which total industry production falls below 30 million 
343.7   tons. 
343.8      (b) An amount equal to 50 percent of the tax under section 
343.9   298.24 for concentrate sold in the form of pellet chips and 
343.10  fines not exceeding 5/16 inch in size and not including crushed 
343.11  pellets shall be paid to the taconite economic development 
343.12  fund.  The amount paid shall not exceed $700,000 annually for 
343.13  all companies.  If the initial amount to be paid to the fund 
343.14  exceeds this amount, each company's payment shall be prorated so 
343.15  the total does not exceed $700,000. 
343.16     Sec. 30.  Minnesota Statutes 2000, section 298.28, 
343.17  subdivision 9b, is amended to read: 
343.18     Subd. 9b.  [TACONITE ENVIRONMENTAL FUND.] Five Fifteen 
343.19  cents per ton for distributions in 1999, 2000, 2001, and 2002 
343.20  through 2004 must be paid to the taconite environmental fund for 
343.21  use under section 298.2961.  No distribution may be made under 
343.22  this paragraph in any year in which total industry production 
343.23  falls below 30,000,000 tons. 
343.24     Sec. 31.  Minnesota Statutes 2000, section 298.28, 
343.25  subdivision 10, is amended to read: 
343.26     Subd. 10.  [INCREASE.] Beginning with distributions in 
343.27  2000, the amounts amount determined under subdivisions 6, 
343.28  paragraph (a), and subdivision 9 shall be increased in the same 
343.29  proportion as the increase in the implicit price deflator as 
343.30  provided in section 298.24, subdivision 1.  Beginning with 
343.31  distributions in 2003, the amount determined under subdivision 
343.32  6, paragraph (a), shall be increased in the same proportion as 
343.33  the increase in the implicit price deflator as provided in 
343.34  section 298.24, subdivision 1.  
343.35     The distributions per ton determined under subdivisions 5, 
343.36  paragraphs (b) and (d), and 6, paragraph (b), for distribution 
344.1   in 1988 and subsequent years shall be the distribution per ton 
344.2   determined for distribution in 1987.  The distribution per ton 
344.3   under subdivision 6, paragraph (c), for distribution in 2000 and 
344.4   subsequent years shall be 81 percent of the distribution per ton 
344.5   determined for distribution in 1987. 
344.6      [EFFECTIVE DATE.] This section is effective for 
344.7   distributions in 2002 and thereafter. 
344.8      Sec. 32.  Minnesota Statutes 2000, section 298.28, 
344.9   subdivision 11, is amended to read: 
344.10     Subd. 11.  [REMAINDER.] (a) The proceeds of the tax imposed 
344.11  by section 298.24 which remain after the distributions and 
344.12  payments in subdivisions 2 to 10a, as certified by the 
344.13  commissioner of revenue, and paragraphs (b), (c), and (d) have 
344.14  been made, together with interest earned on all money 
344.15  distributed under this section prior to distribution, shall be 
344.16  divided between the taconite environmental protection fund 
344.17  created in section 298.223 and the northeast Minnesota economic 
344.18  protection trust fund created in section 298.292 as follows:  
344.19  Two-thirds to the taconite environmental protection fund and 
344.20  one-third to the northeast Minnesota economic protection trust 
344.21  fund.  The proceeds shall be placed in the respective special 
344.22  accounts.  In this paragraph, the terms "distributions and 
344.23  payments" and "all money distributed under this section" do not 
344.24  mean distributions from general fund appropriations. 
344.25     (b) There shall be distributed to each city, town, and 
344.26  county the amount that it received under section 294.26 in 
344.27  calendar year 1977; provided, however, that the amount 
344.28  distributed in 1981 to the unorganized territory number 2 of 
344.29  Lake county and the town of Beaver Bay based on the 
344.30  between-terminal trackage of Erie Mining Company will be 
344.31  distributed in 1982 and subsequent years to the unorganized 
344.32  territory number 2 of Lake county and the towns of Beaver Bay 
344.33  and Stony River based on the miles of track of Erie Mining 
344.34  Company in each taxing district. 
344.35     (c) There shall be distributed to the iron range resources 
344.36  and rehabilitation board the amounts it received in 1977 under 
345.1   section 298.22.  The amount distributed under this paragraph 
345.2   shall be expended within or for the benefit of the tax relief 
345.3   area defined in section 273.134, paragraph (b). 
345.4      (d) There shall be distributed to each school district 81 
345.5   percent of the amount that it received under section 294.26 in 
345.6   calendar year 1977, except that, beginning with the year 2002 
345.7   distribution, the amount necessary for distributions to school 
345.8   districts is annually appropriated, upon certification by the 
345.9   commissioner of revenue, to the commissioner of children, 
345.10  families, and learning from the general fund.  On July 1, the 
345.11  commissioner of children, families, and learning shall 
345.12  distribute the appropriation as provided in this paragraph. 
345.13     Sec. 33.  Minnesota Statutes 2000, section 298.28, 
345.14  subdivision 15, is amended to read: 
345.15     Subd. 15.  [DISTRIBUTION OF DELAYED PAYMENTS.] 
345.16  Notwithstanding any other provision of this section or any other 
345.17  law, if payment of taxes collected under section 298.24 is 
345.18  delayed past the due date because the taxpayer is a debtor in a 
345.19  pending bankruptcy proceeding, the amount paid shall be 
345.20  distributed as follows when received:  
345.21     (1) 50 percent to St. Louis county acting as the counties' 
345.22  fiscal agent, to be distributed as provided in sections 273.134 
345.23  to 273.136; 
345.24     (2) 25 percent to the northeast Minnesota economic 
345.25  protection trust fund; and 
345.26     (3) 25 percent to the taconite environmental protection 
345.27  fund; 
345.28  except that for payments of taxes relating to production year 
345.29  2000 only, the amount paid shall be deposited in the general 
345.30  fund.  
345.31     Sec. 34.  Minnesota Statutes 2000, section 298.282, 
345.32  subdivision 1, is amended to read: 
345.33     Subdivision 1.  The amount deposited with the county as 
345.34  provided in section 298.28, subdivision 3, shall must be 
345.35  distributed as provided by this section, among the 
345.36  municipalities comprising a tax relief area under section 
346.1   273.134, paragraph (b), as amended hereby, each being herein 
346.2   referred to in this section as a qualifying municipality. 
346.3      Sec. 35.  Minnesota Statutes 2000, section 298.292, 
346.4   subdivision 2, is amended to read: 
346.5      Subd. 2.  [USE OF MONEY.] Money in the northeast Minnesota 
346.6   economic protection trust fund may be used for the following 
346.7   purposes:  
346.8      (1) to provide loans, loan guarantees, interest buy-downs 
346.9   and other forms of participation with private sources of 
346.10  financing, but a loan to a private enterprise shall be for a 
346.11  principal amount not to exceed one-half of the cost of the 
346.12  project for which financing is sought, and the rate of interest 
346.13  on a loan shall be no less than the lesser of eight percent or 
346.14  an interest rate three percentage points less than a full faith 
346.15  and credit obligation of the United States government of 
346.16  comparable maturity, at the time that the loan is approved; 
346.17     (2) to fund reserve accounts established to secure the 
346.18  payment when due of the principal of and interest on bonds 
346.19  issued pursuant to section 298.2211; 
346.20     (3) to pay in periodic payments or in a lump sum payment 
346.21  any or all of the interest on bonds issued pursuant to chapter 
346.22  474 for the purpose of constructing, converting, or retrofitting 
346.23  heating facilities in connection with district heating systems 
346.24  or systems utilizing alternative energy sources; and 
346.25     (4) to invest in a venture capital fund or enterprise that 
346.26  will provide capital to other entities that are engaging in, or 
346.27  that will engage in, projects or programs that have the purposes 
346.28  set forth in subdivision 1.  No investments may be made in a 
346.29  venture capital fund or enterprise unless at least two other 
346.30  unrelated investors make investments of at least $500,000 in the 
346.31  venture capital fund or enterprise, and the investment by the 
346.32  northeast Minnesota economic protection trust fund may not 
346.33  exceed the amount of the largest investment by an unrelated 
346.34  investor in the venture capital fund or enterprise.  For 
346.35  purposes of this subdivision, an "unrelated investor" is a 
346.36  person or entity that is not related to the entity in which the 
347.1   investment is made or to any individual who owns more than 40 
347.2   percent of the value of the entity, in any of the following 
347.3   relationships:  spouse, parent, child, sibling, employee, or 
347.4   owner of an interest in the entity that exceeds ten percent of 
347.5   the value of all interests in it.  For purposes of determining 
347.6   the limitations under this clause, the amount of investments 
347.7   made by an investor other than the northeast Minnesota economic 
347.8   protection trust fund is the sum of all investments made in the 
347.9   venture capital fund or enterprise during the period beginning 
347.10  one year before the date of the investment by the northeast 
347.11  Minnesota economic protection trust fund.  
347.12     Money from the trust fund shall be expended only in or for 
347.13  the benefit of the tax relief area defined in section 273.134, 
347.14  paragraph (b). 
347.15     Sec. 36.  Minnesota Statutes 2000, section 298.293, is 
347.16  amended to read: 
347.17     298.293 [EXPENDING FUNDS.] 
347.18     The funds provided by section 298.28, subdivision 11, 
347.19  relating to the northeast Minnesota economic protection trust 
347.20  fund, except money expended pursuant to Laws 1982, Second 
347.21  Special Session, chapter 2, sections 8 to 14, shall be expended 
347.22  only in an amount that does not exceed the sum of the net 
347.23  interest, dividends, and earnings arising from the investment of 
347.24  the trust for the preceding 12 calendar months from the date of 
347.25  the authorization plus, for fiscal year 1983, $10,000,000 from 
347.26  the corpus of the fund.  The funds may be spent only in or for 
347.27  the benefit of those areas that are tax relief areas as defined 
347.28  in section 273.134, paragraph (b).  If during any year the 
347.29  taconite property tax account under sections 273.134 to 273.136 
347.30  does not contain sufficient funds to pay the property tax relief 
347.31  specified in Laws 1977, chapter 423, article X, section 4, there 
347.32  is appropriated from this trust fund to the relief account 
347.33  sufficient funds to pay the relief specified in Laws 1977, 
347.34  chapter 423, article X, section 4. 
347.35     Sec. 37.  Minnesota Statutes 2000, section 298.296, 
347.36  subdivision 2, is amended to read: 
348.1      Subd. 2.  [EXPENDITURE OF FUNDS.] Before January 1, 
348.2   2002 2020, funds may be expended on projects and for 
348.3   administration of the trust fund only from the net interest, 
348.4   earnings, and dividends arising from the investment of the trust 
348.5   at any time, including net interest, earnings, and dividends 
348.6   that have arisen prior to July 13, 1982, plus $10,000,000 made 
348.7   available for use in fiscal year 1983, except that any amount 
348.8   required to be paid out of the trust fund to provide the 
348.9   property tax relief specified in Laws 1977, chapter 423, article 
348.10  X, section 4, and to make school bond payments and payments to 
348.11  recipients of taconite production tax proceeds pursuant to 
348.12  section 298.225, may be taken from the corpus of the trust.  
348.13  Additionally, upon recommendation by the board, up to 
348.14  $13,000,000 from the corpus of the trust may be made available 
348.15  for use as provided in subdivision 4, and up to $10,000,000 from 
348.16  the corpus of the trust may be made available for use as 
348.17  provided in section 298.2961.  On and after January 1, 2002 
348.18  2020, funds may be expended on projects and for administration 
348.19  from any assets of the trust.  Annual administrative costs, not 
348.20  including detailed engineering expenses for the projects, shall 
348.21  not exceed five percent of the net interest, dividends, and 
348.22  earnings arising from the trust in the preceding fiscal year.  
348.23     Principal and interest received in repayment of loans made 
348.24  pursuant to this section, and earnings on other investments made 
348.25  under section 298.292, subdivision 2, clause (4), shall be 
348.26  deposited in the state treasury and credited to the trust.  
348.27  These receipts are appropriated to the board for the purposes of 
348.28  sections 298.291 to 298.298. 
348.29     Sec. 38.  Minnesota Statutes 2000, section 298.2961, is 
348.30  amended to read: 
348.31     298.2961 [PRODUCER GRANTS.] 
348.32     Subdivision 1.  [APPROPRIATION.] (a) $10,000,000 is 
348.33  appropriated from the northeast Minnesota economic protection 
348.34  trust fund to a special account in the taconite area 
348.35  environmental protection fund for grants or loans to producers 
348.36  on a project-by-project basis as provided in this section. 
349.1      (b) The proceeds of the tax designated under section 
349.2   298.28, subdivision 9b, are appropriated for grants and loans to 
349.3   producers on a project-by-project basis as provided in this 
349.4   section. 
349.5      Subd. 2.  [PROJECTS; APPROVAL.] (a) Projects funded must be 
349.6   for: 
349.7      (1) environmentally unique reclamation projects; or 
349.8      (2) pit or plant maintenance, repairs, expansions, or 
349.9   modernizations other than for a value added iron products 
349.10  plant that extend the life of the plant. 
349.11     (b) To be proposed by the board, a project must be approved 
349.12  by at least eight iron range resources and rehabilitation board 
349.13  members.  The money for a project may be spent only upon 
349.14  approval of the project by the governor.  The board may submit 
349.15  supplemental projects for approval at any time. 
349.16     (c) The board may require that it receive an equity 
349.17  percentage in any project to which it contributes under this 
349.18  section.  
349.19     Sec. 39.  Minnesota Statutes 2000, section 298.298, is 
349.20  amended to read: 
349.21     298.298 [LONG-RANGE PLAN.] 
349.22     Consistent with the policy established in sections 298.291 
349.23  to 298.298, the iron range resources and rehabilitation board 
349.24  shall prepare and present to the governor and the legislature by 
349.25  January 1, 1984 a long-range plan for the use of the northeast 
349.26  Minnesota economic protection trust fund for the economic 
349.27  development and diversification of the tax relief area defined 
349.28  in section 273.134, paragraph (b).  The iron range resources and 
349.29  rehabilitation board shall, before November 15 of each even 
349.30  numbered year, prepare a report to the governor and legislature 
349.31  updating and revising this long-range plan and reporting on the 
349.32  iron range resources and rehabilitation board's progress on 
349.33  those matters assigned to it by law.  After January 1, 1984, no 
349.34  project shall be approved by the iron range resources and 
349.35  rehabilitation board which is not consistent with the goals and 
349.36  objectives established in the long-range plan. 
350.1      Sec. 40.  Minnesota Statutes 2000, section 298.75, 
350.2   subdivision 1, is amended to read: 
350.3      Subdivision 1.  [DEFINITIONS.] Except as may otherwise be 
350.4   provided, the following words, when used in this section, shall 
350.5   have the meanings herein ascribed to them.  
350.6      (1) "Aggregate material" shall mean nonmetallic natural 
350.7   mineral aggregate including, but not limited to sand, silica 
350.8   sand, gravel, building stone, crushed rock, limestone, and 
350.9   granite, and borrow, but only if the borrow is transported on a 
350.10  public road, street, or highway.  Aggregate material shall not 
350.11  include dimension stone and dimension granite.  Aggregate 
350.12  material must be measured or weighed after it has been extracted 
350.13  from the pit, quarry, or deposit.  
350.14     (2) "Person" shall mean any individual, firm, partnership, 
350.15  corporation, organization, trustee, association, or other entity.
350.16     (3) "Operator" shall mean any person engaged in the 
350.17  business of removing aggregate material from the surface or 
350.18  subsurface of the soil, for the purpose of sale, either directly 
350.19  or indirectly, through the use of the aggregate material in a 
350.20  marketable product or service.  
350.21     (4) "Extraction site" shall mean a pit, quarry, or deposit 
350.22  containing aggregate material and any contiguous property to the 
350.23  pit, quarry, or deposit which is used by the operator for 
350.24  stockpiling the aggregate material.  
350.25     (5) "Importer" shall mean any person who buys aggregate 
350.26  material produced from a county not listed in paragraph (6) or 
350.27  another state and causes the aggregate material to be imported 
350.28  into a county in this state which imposes a tax on aggregate 
350.29  material.  
350.30     (6) "County" shall mean the counties of Pope, Stearns, 
350.31  Benton, Sherburne, Carver, Scott, Dakota, Le Sueur, Kittson, 
350.32  Marshall, Pennington, Red Lake, Polk, Norman, Mahnomen, Clay, 
350.33  Becker, Carlton, St. Louis, Rock, Murray, Wilkin, Big Stone, 
350.34  Sibley, Hennepin, Washington, Chisago, and Ramsey.  County also 
350.35  means any other county whose board has voted after public 
350.36  hearing to impose the tax required under this section and has 
351.1   registered with the commissioner to impose the tax. 
351.2      [EFFECTIVE DATE.] This section is effective the day 
351.3   following final enactment. 
351.4      Sec. 41.  Minnesota Statutes 2000, section 298.75, 
351.5   subdivision 2, is amended to read: 
351.6      Subd. 2.  A county shall impose upon every importer and 
351.7   operator a production tax equal to ten 21 cents per cubic yard 
351.8   or seven 15 cents per ton of aggregate material removed except 
351.9   that the county board may decide not to impose this tax if it 
351.10  determines that in the previous year operators removed less than 
351.11  20,000 tons or 14,000 cubic yards of aggregate material from 
351.12  that county.  The tax shall be imposed on aggregate material 
351.13  produced in the county when the aggregate material is 
351.14  transported from the extraction site or sold.  When aggregate 
351.15  material is stored in a stockpile within the state of Minnesota 
351.16  and a public highway, road or street is not used for 
351.17  transporting the aggregate material, the tax shall be imposed 
351.18  either when the aggregate material is sold, or when it is 
351.19  transported from the stockpile site, or when it is used from the 
351.20  stockpile, whichever occurs first.  The tax shall be imposed on 
351.21  an importer when the aggregate material is imported into the 
351.22  county that imposes the tax.  
351.23     If the aggregate material is transported directly from the 
351.24  extraction site to a waterway, railway, or another mode of 
351.25  transportation other than a highway, road or street, the tax 
351.26  imposed by this section shall be apportioned equally between the 
351.27  county where the aggregate material is extracted and the county 
351.28  to which the aggregate material is originally transported.  If 
351.29  that destination is not located in Minnesota, then the county 
351.30  where the aggregate material was extracted shall receive all of 
351.31  the proceeds of the tax.  
351.32     [EFFECTIVE DATE.] This section is effective for aggregate 
351.33  material sold, imported, transported, or used from a stockpile 
351.34  after June 30, 2002. 
351.35     Sec. 42.  Minnesota Statutes 2000, section 298.75, 
351.36  subdivision 7, is amended to read: 
352.1      Subd. 7.  (a) All money collected as taxes under this 
352.2   section shall be deposited in the county treasury and 
352.3   credited as follows, for expenditure by the county 
352.4   board: according to this subdivision. 
352.5      (b) The county auditor may retain an annual administrative 
352.6   fee of up to five percent of the total taxes collected in any 
352.7   year. 
352.8      (c) The balance of the taxes, after any deduction under 
352.9   paragraph (b), shall be credited as follows: 
352.10     (a) Sixty (1) 42.5 percent to the county road and bridge 
352.11  fund for expenditure for the maintenance, construction and 
352.12  reconstruction of roads, highways and bridges; 
352.13     (b) Thirty (2) 42.5 percent to the road and bridge fund of 
352.14  those towns as determined by the county board and to the general 
352.15  fund or other designated fund of those cities as determined by 
352.16  the county board city or town in which the mine is located, or 
352.17  to the county if unorganized, to be expended for maintenance, 
352.18  construction and reconstruction of roads, highways and bridges; 
352.19  and 
352.20     (c) Ten (3) 15 percent to a special reserve fund which is 
352.21  hereby established, for expenditure for the restoration of 
352.22  abandoned pits, quarries, or deposits located upon public and 
352.23  tax forfeited lands within the county. 
352.24     If there are no abandoned pits, quarries, or deposits 
352.25  located upon public or tax forfeited lands within the county, 
352.26  this portion of the tax shall may be deposited in the county 
352.27  road and bridge fund for expenditure for the maintenance, 
352.28  construction, and reconstruction of roads, highways, and bridges 
352.29  or may be used for any other unmet reclamation need.  
352.30  Reclamation shall be prioritized as follows:  reclamation of 
352.31  pits and quarries on public or tax-forfeited land, reclamation 
352.32  of abandoned pits or quarries on private land, and reclamation 
352.33  of active pits and quarries on private land. 
352.34     [EFFECTIVE DATE.] This section is effective July 1, 2002. 
352.35     Sec. 43.  Minnesota Statutes 2000, section 471.58, is 
352.36  amended to read: 
353.1      471.58 [RANGE ASSOCIATION OF MUNICIPALITIES AND SCHOOLS; 
353.2   MEMBERSHIP.] 
353.3      For the purpose of providing an areawide approach to 
353.4   problems which demand coordinated and cooperative actions and 
353.5   which are common to those areas of northeast Minnesota affected 
353.6   by operations involved in mining iron ore and taconite and 
353.7   producing concentrate therefrom, and for the purpose of 
353.8   promoting the general welfare and economic development of the 
353.9   cities, towns and school districts within the iron ranges area 
353.10  of northeast Minnesota, any city, town or school district in 
353.11  which the net tax capacity consists in part of iron ore, or 
353.12  lands containing taconite or semitaconite or which is located in 
353.13  whole or part in the tax relief area defined by section 273.134, 
353.14  paragraph (b), may pay annual dues in the range association of 
353.15  municipalities and schools.  The association may sue, be sued, 
353.16  intervene and act in a civil action in which the outcome of the 
353.17  action will have an effect upon the interest of any of its 
353.18  members. 
353.19     Sec. 44.  [STATE AID.] 
353.20     Notwithstanding Minnesota Statutes, chapter 298, or any 
353.21  other law to the contrary, a city, township, county, school 
353.22  district, the taconite property tax relief fund, the iron range 
353.23  resources and rehabilitation board, the range association of 
353.24  municipalities and schools, the taconite environmental 
353.25  protection fund, and the northeast Minnesota economic protection 
353.26  trust receiving distributions under Minnesota Statutes, sections 
353.27  298.225, 298.28, and 298.282, shall each receive aid in 2001 
353.28  equal to the difference between the distributions it receives 
353.29  under Minnesota Statutes, sections 298.225, 298.28, and 298.282, 
353.30  and the distributions it would have received in 2001 under 
353.31  Minnesota Statutes 2000, sections 298.225, 298.28, and 298.282, 
353.32  if those distributions had been based on the average of the 
353.33  production for 1998, 1999, and 2000 and disregarded the 
353.34  bankruptcy of one of the taxpayers.  A sum sufficient to make 
353.35  distributions of aid under this section is appropriated from the 
353.36  general fund to the commissioner of revenue, who must make the 
354.1   distributions of this aid on or before July 1, 2001. 
354.2                              ARTICLE 14
354.3              METROPOLITAN AREA FINANCING AND GOVERNANCE
354.4      Section 1.  Minnesota Statutes 2000, section 10A.01, 
354.5   subdivision 10, is amended to read: 
354.6      Subd. 10.  [CANDIDATE.] "Candidate" means an individual who 
354.7   seeks nomination or election as a state constitutional officer, 
354.8   legislator, or judge.  "Candidate" also means an individual who 
354.9   seeks nomination or election to the metropolitan council.  An 
354.10  individual is deemed to seek nomination or election if the 
354.11  individual has taken the action necessary under the law of this 
354.12  state to qualify for nomination or election, has received 
354.13  contributions or made expenditures in excess of $100, or has 
354.14  given implicit or explicit consent for any other person to 
354.15  receive contributions or make expenditures in excess of $100, 
354.16  for the purpose of bringing about the individual's nomination or 
354.17  election.  A candidate remains a candidate until the candidate's 
354.18  principal campaign committee is dissolved as provided in section 
354.19  10A.24. 
354.20     Sec. 2.  Minnesota Statutes 2000, section 10A.09, 
354.21  subdivision 6a, is amended to read: 
354.22     Subd. 6a.  [LOCAL OFFICIALS.] A local official required to 
354.23  file a statement under this section must file it with the 
354.24  governing body of the official's political subdivision, except 
354.25  that a candidate for or member of the metropolitan council shall 
354.26  file the statement with the board.  The governing body must 
354.27  maintain statements filed with it under this subdivision as 
354.28  public data. 
354.29     Sec. 3.  Minnesota Statutes 2000, section 10A.27, 
354.30  subdivision 1, is amended to read: 
354.31     Subdivision 1.  [CONTRIBUTION LIMITS.] (a) Except as 
354.32  provided in subdivision 2, a candidate must not permit the 
354.33  candidate's principal campaign committee to accept aggregate 
354.34  contributions made or delivered by any individual, political 
354.35  committee, or political fund in excess of the following: 
354.36     (1) to candidates for governor and lieutenant governor 
355.1   running together, $2,000 in an election year for the office 
355.2   sought and $500 in other years; 
355.3      (2) to a candidate for attorney general, $1,000 in an 
355.4   election year for the office sought and $200 in other years; 
355.5      (3) to a candidate for the office of secretary of state or 
355.6   state auditor, $500 in an election year for the office sought 
355.7   and $100 in other years; 
355.8      (4) to a candidate for state senator, $500 in an election 
355.9   year for the office sought and $100 in other years; and 
355.10     (5) to a candidate for state representative or metropolitan 
355.11  council member, $500 in an election year for the office sought 
355.12  and $100 in the other a nonelection year. 
355.13     (b) The following deliveries are not subject to the 
355.14  bundling limitation in this subdivision: 
355.15     (1) delivery of contributions collected by a member of the 
355.16  candidate's principal campaign committee, such as a block worker 
355.17  or a volunteer who hosts a fund raising event, to the 
355.18  committee's treasurer; and 
355.19     (2) a delivery made by an individual on behalf of the 
355.20  individual's spouse.  
355.21     Sec. 4.  Minnesota Statutes 2000, section 15.0597, 
355.22  subdivision 1, is amended to read: 
355.23     Subdivision 1.  [DEFINITIONS.] As used in this section, the 
355.24  following terms shall have the meanings given them. 
355.25     (a) "Agency" means (1) a state board, commission, council, 
355.26  committee, authority, task force, including an advisory task 
355.27  force created under section 15.014 or 15.0593, a group created 
355.28  by executive order of the governor, or other similar multimember 
355.29  agency created by law and having statewide jurisdiction; and (2) 
355.30  the metropolitan council, a metropolitan agency, capitol area 
355.31  architectural and planning board, and any agency with a regional 
355.32  jurisdiction created in this state pursuant to an interstate 
355.33  compact. 
355.34     (b) "Vacancy" or "vacant agency position" means (1) a 
355.35  vacancy in an existing agency, or (2) a new, unfilled agency 
355.36  position.  Vacancy includes a position that is to be filled 
356.1   through appointment of a nonlegislator by a legislator or group 
356.2   of legislators; vacancy does not mean (1) a vacant position on 
356.3   an agency composed exclusively of persons employed by a 
356.4   political subdivision or another agency, or (2) a vacancy to be 
356.5   filled by a person required to have a specific title or position.
356.6      (c) "Secretary" means the secretary of state. 
356.7      Sec. 5.  Minnesota Statutes 2000, section 204B.06, 
356.8   subdivision 4, is amended to read: 
356.9      Subd. 4.  [PARTICULAR OFFICES.] Candidates who seek 
356.10  nomination for the following offices shall state the following 
356.11  additional information on the affidavit:  
356.12     (a) for United States senator, that the candidate will be 
356.13  30 years of age or older and a citizen of the United States for 
356.14  not less than nine years on the next January 3 or, in the case 
356.15  of an election to fill a vacancy, within 21 days after the 
356.16  special election; 
356.17     (b) for United States representative, that the candidate 
356.18  will be 25 years of age or older and a citizen of the United 
356.19  States for not less than seven years on the next January 3 or, 
356.20  in the case of an election to fill a vacancy, within 21 days 
356.21  after the special election; 
356.22     (c) for governor or lieutenant governor, that on the first 
356.23  Monday of the next January the candidate will be 25 years of age 
356.24  or older and, on the day of the state general election, a 
356.25  resident of Minnesota for not less than one year; 
356.26     (d) for supreme court justice, court of appeals judge, or 
356.27  district court judge, that the candidate is learned in the law; 
356.28     (e) for metropolitan council, county, municipal, school 
356.29  district, or special district office, that the candidate meets 
356.30  any other qualifications for that office prescribed by law; 
356.31     (f) for senator or representative in the legislature, that 
356.32  on the day of the general or special election to fill the office 
356.33  the candidate will have resided not less than one year in the 
356.34  state and not less than six months in the legislative district 
356.35  from which the candidate seeks election.  
356.36     Sec. 6.  Minnesota Statutes 2000, section 204B.09, 
357.1   subdivision 1, is amended to read: 
357.2      Subdivision 1.  [CANDIDATES IN STATE AND COUNTY GENERAL 
357.3   ELECTIONS.] Except as otherwise provided by this subdivision, 
357.4   affidavits of candidacy and nominating petitions for county, 
357.5   metropolitan council, state and federal offices filled at the 
357.6   state general election shall be filed not more than 70 days nor 
357.7   less than 56 days before the state primary.  The affidavit may 
357.8   be prepared and signed at any time between 60 days before the 
357.9   filing period opens and the last day of the filing period.  
357.10  Notwithstanding other law to the contrary, the affidavit of 
357.11  candidacy must be signed in the presence of a notarial officer.  
357.12  Candidates for presidential electors may file petitions on or 
357.13  before the state primary day.  Nominating petitions to fill 
357.14  vacancies in nominations shall be filed as provided in section 
357.15  204B.13.  No affidavit or petition shall be accepted later than 
357.16  5:00 p.m. on the last day for filing.  Affidavits and petitions 
357.17  for offices to be voted on in only one county shall be filed 
357.18  with the county auditor of that county.  Affidavits and 
357.19  petitions for offices to be voted on in more than one county 
357.20  shall be filed with the secretary of state. 
357.21     Sec. 7.  Minnesota Statutes 2000, section 204B.09, 
357.22  subdivision 1a, is amended to read: 
357.23     Subd. 1a.  [ABSENT CANDIDATES.] A candidate for special 
357.24  district, county, metropolitan council, state, or federal office 
357.25  who will be absent from the state during the filing period may 
357.26  submit a properly executed affidavit of candidacy, the 
357.27  appropriate filing fee, and any necessary petitions in person to 
357.28  the filing officer.  The candidate shall state in writing the 
357.29  reason for being unable to submit the affidavit during the 
357.30  filing period.  The affidavit, filing fee, and petitions must be 
357.31  submitted to the filing officer during the seven days 
357.32  immediately preceding the candidate's absence from the state.  
357.33  Nominating petitions may be signed during the 14 days 
357.34  immediately preceding the date when the affidavit of candidacy 
357.35  is filed. 
357.36     Sec. 8.  Minnesota Statutes 2000, section 204B.11, is 
358.1   amended to read: 
358.2      204B.11 [CANDIDATES; FILING FEES; PETITION IN PLACE OF 
358.3   FILING FEE.] 
358.4      Subdivision 1.  [AMOUNT; DISHONORED CHECKS; CONSEQUENCES.] 
358.5   Except as provided by subdivision 2, a filing fee shall be paid 
358.6   by each candidate who files an affidavit of candidacy.  The fee 
358.7   shall be paid at the time the affidavit is filed.  The amount of 
358.8   the filing fee shall vary with the office sought as follows: 
358.9      (a) for the office of governor, lieutenant governor, 
358.10  attorney general, state auditor, state treasurer, secretary of 
358.11  state, representative in Congress, judge of the supreme court, 
358.12  judge of the court of appeals, or judge of the district court, 
358.13  $300; 
358.14     (b) for the office of senator in Congress, $400; 
358.15     (c) for office of senator or representative in the 
358.16  legislature, $100; 
358.17     (d) for a metropolitan council or county office, $50; and 
358.18     (e) for the office of soil and water conservation district 
358.19  supervisor, $20. 
358.20     For the office of presidential elector, and for those 
358.21  offices for which no compensation is provided, no filing fee is 
358.22  required. 
358.23     The filing fees received by the county auditor shall 
358.24  immediately be paid to the county treasurer.  The filing fees 
358.25  received by the secretary of state shall immediately be paid to 
358.26  the state treasurer. 
358.27     When an affidavit of candidacy has been filed with the 
358.28  appropriate filing officer and the requisite filing fee has been 
358.29  paid, the filing fee shall not be refunded.  If a candidate's 
358.30  filing fee is paid with a check, draft, or similar negotiable 
358.31  instrument for which sufficient funds are not available or that 
358.32  is dishonored, notice to the candidate of the worthless 
358.33  instrument must be sent by the filing officer via registered 
358.34  mail no later than immediately upon the closing of the filing 
358.35  deadline with return receipt requested.  The candidate will have 
358.36  five days from the time the filing officer receives proof of 
359.1   receipt to issue a check or other instrument for which 
359.2   sufficient funds are available.  The candidate issuing the 
359.3   worthless instrument is liable for a service charge pursuant to 
359.4   section 332.50.  If adequate payment is not made, the name of 
359.5   the candidate must not appear on any official ballot and the 
359.6   candidate is liable for all costs incurred by election officials 
359.7   in removing the name from the ballot. 
359.8      Subd. 2.  [PETITION IN PLACE OF FILING FEE.] At the time of 
359.9   filing an affidavit of candidacy, a candidate may present a 
359.10  petition in place of the filing fee.  The petition may be signed 
359.11  by any individual eligible to vote for the candidate.  A 
359.12  nominating petition filed pursuant to section 204B.07 or 
359.13  204B.13, subdivision 4, is effective as a petition in place of a 
359.14  filing fee if the nominating petition includes a prominent 
359.15  statement informing the signers of the petition that it will be 
359.16  used for that purpose.  
359.17     The number of signatures on a petition in place of a filing 
359.18  fee shall be as follows:  
359.19     (a) for a state office voted on statewide, or for president 
359.20  of the United States, or United States senator, 2,000; 
359.21     (b) for a congressional office, 1,000; 
359.22     (c) for a county, or metropolitan council, or legislative 
359.23  office, or for the office of district judge, 500; and 
359.24     (d) for any other office which requires a filing fee as 
359.25  prescribed by law, municipal charter, or ordinance, the lesser 
359.26  of 500 signatures or five percent of the total number of votes 
359.27  cast in the municipality, ward, or other election district at 
359.28  the preceding general election at which that office was on the 
359.29  ballot.  
359.30     An official with whom petitions are filed shall make sample 
359.31  forms for petitions in place of filing fees available upon 
359.32  request.  
359.33     Sec. 9.  Minnesota Statutes 2000, section 204B.135, 
359.34  subdivision 2, is amended to read: 
359.35     Subd. 2.  [OTHER ELECTION DISTRICTS.] For purposes of this 
359.36  subdivision, "local government election district" means a county 
360.1   district, park and recreation district, school district, 
360.2   metropolitan council district, or soil and water conservation 
360.3   district.  Local government election districts, other than city 
360.4   wards covered by subdivision 1, may not be redistricted until 
360.5   precinct boundaries are reestablished under section 204B.14, 
360.6   subdivision 3, paragraph (c).  Election districts covered by 
360.7   this subdivision must be redistricted within 80 days of the time 
360.8   when the legislature has been redistricted or at least 15 weeks 
360.9   before the state primary election in the year ending in two, 
360.10  whichever comes first. 
360.11     Sec. 10.  Minnesota Statutes 2000, section 204B.32, 
360.12  subdivision 2, is amended to read: 
360.13     Subd. 2.  [ALLOCATION OF ELECTION EXPENSES.] The secretary 
360.14  of state shall develop procedures for the allocation of election 
360.15  expenses among counties, municipalities, and school districts, 
360.16  and the metropolitan council for elections that are held 
360.17  concurrently.  The following expenses must be included in the 
360.18  procedures:  salaries of election judges; postage for absentee 
360.19  ballots and applications; preparation of polling places; 
360.20  preparation and testing of electronic voting systems; ballot 
360.21  preparation; publication of election notices and sample ballots; 
360.22  transportation of ballots and election supplies; and 
360.23  compensation for administrative expenses of the county auditor, 
360.24  municipal clerk, or school district clerk. 
360.25     Sec. 11.  Minnesota Statutes 2000, section 204D.02, 
360.26  subdivision 1, is amended to read: 
360.27     Subdivision 1.  [OFFICERS.] All elective state, 
360.28  metropolitan council, and county officers, justices of the 
360.29  supreme court, judges of the court of appeals and district 
360.30  court, state senators and state representatives, and senators 
360.31  and representatives in Congress shall be elected at the state 
360.32  general election held in the year before their terms of office 
360.33  expire.  Presidential electors shall be chosen at the state 
360.34  general election held in the year before the expiration of a 
360.35  term of a president of the United States.  
360.36     Sec. 12.  Minnesota Statutes 2000, section 204D.08, 
361.1   subdivision 6, is amended to read: 
361.2      Subd. 6.  [STATE AND COUNTY NONPARTISAN PRIMARY BALLOT.] 
361.3   The state and county nonpartisan primary ballot shall be headed 
361.4   "State and County Nonpartisan Primary Ballot."  It shall be 
361.5   printed on canary paper.  The names of candidates for nomination 
361.6   to the supreme court, court of appeals, district court, and 
361.7   all metropolitan council and county offices shall be placed on 
361.8   this ballot.  
361.9      No candidate whose name is placed on the state and county 
361.10  nonpartisan primary ballot shall be designated or identified as 
361.11  the candidate of any political party or in any other manner 
361.12  except as expressly provided by law.  
361.13     Sec. 13.  [204D.265] [VACANCY IN OFFICE OF METROPOLITAN 
361.14  COUNCIL MEMBERS.] 
361.15     Subdivision 1.  [ELECTION IN 30 TO 60 DAYS.] Except as 
361.16  provided in subdivision 3, a vacancy in the office of 
361.17  metropolitan council member must be filled at a special election 
361.18  scheduled by the metropolitan council on a date not less than 30 
361.19  nor more than 60 days after the vacancy occurs.  The special 
361.20  primary or special election may be held on the same day as a 
361.21  regular primary or regular election but the special election 
361.22  must be held not less than 14 days after the special primary.  
361.23  The person elected at the special election takes office 
361.24  immediately after receiving the certificate of election and 
361.25  taking the oath of office and serves the remainder of the 
361.26  unexpired term.  If the metropolitan council districts have been 
361.27  redrawn since the commencement of the term of the vacant office, 
361.28  the election must be based on the district as redrawn. 
361.29     Subd. 2.  [WHEN VICTOR SEATED IMMEDIATELY.] If a vacancy 
361.30  for which a special election is required occurs less than 60 
361.31  days before the general election preceding the end of the term, 
361.32  the vacancy must be filled by the person elected at that 
361.33  election for the ensuing term, who takes office immediately 
361.34  after receiving the certificate of election and taking the oath 
361.35  of office. 
361.36     Subd. 3.  [INABILITY OR REFUSAL TO SERVE.] In addition to 
362.1   when the events specified in section 351.02 happen, a vacancy in 
362.2   the office of metropolitan council member may be declared by the 
362.3   metropolitan council when a member is unable to serve in the 
362.4   office or attend council meetings for a 90-day period because of 
362.5   illness or because of absence from, or refusal to, attend 
362.6   council meetings for a 90-day period.  If any of the conditions 
362.7   described or referred to in this subdivision occur, the council 
362.8   may, after the council by resolution has declared a vacancy to 
362.9   exist, make an appointment to fill the vacancy at a regular or 
362.10  special meeting for the remainder of the unexpired term or until 
362.11  the ill or absent member is again able to resume duties and 
362.12  attend council meetings, whichever is earlier.  If the council 
362.13  determines that the original member is again able to resume 
362.14  duties and attend council meetings, the council must say so in a 
362.15  resolution and remove the appointed officeholder and restore the 
362.16  original member to office.  
362.17     Sec. 14.  Minnesota Statutes 2000, section 204D.27, is 
362.18  amended by adding a subdivision to read: 
362.19     Subd. 12.  [SPECIAL METROPOLITAN COUNCIL ELECTION.] (a) 
362.20  [STATE CANVASSING BOARD.] Except as provided in subdivision 4, 
362.21  the state canvassing board shall complete its canvass of a 
362.22  special election for metropolitan council member and declare the 
362.23  results within four days, excluding Sundays and legal holidays, 
362.24  after the returns of the county canvassing boards are certified 
362.25  to the secretary of the state. 
362.26     (b) [ELECTION CONTEST.] In case of a contest of a special 
362.27  election for metropolitan council member, the notice of contest 
362.28  must be filed within two days after the canvass is completed, 
362.29  excluding Sundays and legal holidays.  Otherwise the contest 
362.30  must proceed in the manner provided by law for contesting 
362.31  elections. 
362.32     (c) [CERTIFICATE OF ELECTION.] A certificate of election in 
362.33  a special election for metropolitan council member must be 
362.34  issued by the county auditor or the secretary of state to the 
362.35  individual declared elected by the county or state canvassing 
362.36  board two days after the appropriate canvassing board finishes 
363.1   canvassing the returns for the election, excluding Sundays and 
363.2   legal holidays.  In case of a contest, the certificate must not 
363.3   be issued until the district court decides the contest. 
363.4      Sec. 15.  Minnesota Statutes 2000, section 209.02, 
363.5   subdivision 1, is amended to read: 
363.6      Subdivision 1.  Any eligible voter, including a candidate, 
363.7   may contest in the manner provided in this chapter:  (1) the 
363.8   nomination or election of any person for whom the voter had the 
363.9   right to vote if that person is declared nominated or elected to 
363.10  the senate or the house of representatives of the United States, 
363.11  or to a statewide, metropolitan council, county, legislative, 
363.12  municipal, school, or district court office; or (2) the declared 
363.13  result of a constitutional amendment or other question voted 
363.14  upon at an election.  The contest may be brought over an 
363.15  irregularity in the conduct of an election or canvass of votes, 
363.16  over the question of who received the largest number of votes 
363.17  legally cast, over the number of votes legally cast in favor of 
363.18  or against a question, or on the grounds of deliberate, serious, 
363.19  and material violations of the Minnesota Election Law. 
363.20     Sec. 16.  Minnesota Statutes 2000, section 211A.01, 
363.21  subdivision 3, is amended to read: 
363.22     Subd. 3.  [CANDIDATE.] "Candidate" means an individual who 
363.23  seeks nomination or election to a county, municipal, school 
363.24  district, or other political subdivision office.  This 
363.25  definition does not include an individual seeking a judicial 
363.26  office or a seat on the metropolitan council.  For purposes of 
363.27  sections 211A.01 to 211A.05 and 211A.07, "candidate" also 
363.28  includes a candidate for the United States Senate or House of 
363.29  Representatives. 
363.30     Sec. 17.  Minnesota Statutes 2000, section 211B.01, 
363.31  subdivision 3, is amended to read: 
363.32     Subd. 3.  [CANDIDATE.] "Candidate" means an individual who 
363.33  seeks nomination or election to a federal, 
363.34  statewide, metropolitan council, legislative, judicial, or local 
363.35  office including special districts, school districts, towns, 
363.36  home rule charter and statutory cities, and counties, except 
364.1   candidates for president and vice-president of the United States.
364.2      Sec. 18.  Minnesota Statutes 2000, section 353D.01, 
364.3   subdivision 2, is amended to read: 
364.4      Subd. 2.  [ELIGIBILITY.] (a) Eligibility to participate in 
364.5   the defined contribution plan is available to: 
364.6      (1) elected local government officials of a governmental 
364.7   subdivision who elect to participate in the plan under section 
364.8   353D.02, subdivision 1, and who, for the elected service 
364.9   rendered to a governmental subdivision, are not members of the 
364.10  public employees retirement association within the meaning of 
364.11  section 353.01, subdivision 7; 
364.12     (2) physicians who, if they did not elect to participate in 
364.13  the plan under section 353D.02, subdivision 2, would meet the 
364.14  definition of member under section 353.01, subdivision 7; 
364.15     (3) basic and advanced life support emergency medical 
364.16  service personnel employed by or providing services for any 
364.17  public ambulance service or privately operated ambulance service 
364.18  that receives an operating subsidy from a governmental entity 
364.19  that elects to participate under section 353D.02, subdivision 3; 
364.20  and 
364.21     (4) members of a municipal rescue squad associated with 
364.22  Litchfield in Meeker county, or of a county rescue squad 
364.23  associated with Kandiyohi county, if an independent nonprofit 
364.24  rescue squad corporation, incorporated under chapter 317A, 
364.25  performing emergency management services, and if not affiliated 
364.26  with a fire department or ambulance service and if its members 
364.27  are not eligible for membership in that fire department's or 
364.28  ambulance service's relief association or comparable pension 
364.29  plan. 
364.30     (b) For purposes of this chapter, an elected local 
364.31  government official includes a person appointed to fill a 
364.32  vacancy in an elective office and a member of the metropolitan 
364.33  council.  Service as an elected local government official only 
364.34  includes service for the governmental subdivision for which the 
364.35  official was elected by the public-at-large.  Service as an 
364.36  elected local government official ceases and eligibility to 
365.1   participate terminates when the person ceases to be an elected 
365.2   official.  An elected local government official does not include 
365.3   an elected county sheriff.  
365.4      (c) Elected local government officials, physicians, first 
365.5   response personnel and emergency medical service personnel, and 
365.6   rescue squad personnel who are currently covered by a public or 
365.7   private pension plan because of their employment or provision of 
365.8   services are not eligible to participate in the public employees 
365.9   defined contribution plan.  
365.10     (d) A former participant is a person who has terminated 
365.11  eligible employment or service and has not withdrawn the value 
365.12  of the person's individual account. 
365.13     Sec. 19.  [375.027] [METROPOLITAN COUNTY COMMISSION 
365.14  MEMBERS; REDISTRICTING.] 
365.15     Notwithstanding section 375.01, 375.025, 375.056, or any 
365.16  other law to the contrary, after 2000, metropolitan counties, as 
365.17  defined in section 473.121, subdivision 4, have the number of 
365.18  county commission members, and must be redistricted, as provided 
365.19  in section 473.124. 
365.20     Sec. 20.  Minnesota Statutes 2000, section 473.123, 
365.21  subdivision 1, is amended to read: 
365.22     Subdivision 1.  [CREATION.] A metropolitan council with 
365.23  jurisdiction in the metropolitan area is established as a public 
365.24  corporation and political subdivision of the state.  It shall be 
365.25  under the supervision and control of 17 members, all of whom 
365.26  shall be residents of the metropolitan area elected from 
365.27  districts as provided in section 473.124. 
365.28     Sec. 21.  Minnesota Statutes 2000, section 473.123, 
365.29  subdivision 4, is amended to read: 
365.30     Subd. 4.  [CHAIR; APPOINTMENT, OFFICERS, SELECTION; DUTIES 
365.31  AND COMPENSATION.] (a) The chair of the metropolitan council 
365.32  shall be appointed by the governor as the 17th voting member 
365.33  thereof by and with the advice and consent of the senate to 
365.34  serve at the pleasure of the governor to represent the 
365.35  metropolitan area at large.  Senate confirmation shall be as 
365.36  provided by section 15.066 is elected by and from among the 
366.1   members of the council to serve a one-year term.  
366.2      The chair of the metropolitan council shall, if present, 
366.3   preside at meetings of the council, have the primary 
366.4   responsibility for meeting with local elected officials, serve 
366.5   as the principal legislative liaison, present to the governor 
366.6   and the legislature, after council approval, the council's plans 
366.7   for regional governance and operations, serve as the principal 
366.8   spokesperson of the council, and perform other duties assigned 
366.9   by the council or by law. 
366.10     (b) The metropolitan council shall elect other officers as 
366.11  it deems necessary for the conduct of its affairs for a one-year 
366.12  term.  A secretary and treasurer need not be members of the 
366.13  metropolitan council.  Meeting times and places shall be fixed 
366.14  by the metropolitan council and special meetings may be called 
366.15  by a majority of the members of the metropolitan council or by 
366.16  the chair.  The chair and each metropolitan council member shall 
366.17  be reimbursed for actual and necessary expenses.  The annual 
366.18  budget of the council shall provide as a separate account 
366.19  anticipated expenditures for compensation, travel, and 
366.20  associated expenses for the chair and members, and compensation 
366.21  or reimbursement shall be made to the chair and members only 
366.22  when budgeted. 
366.23     (c) Each member of the council shall attend and participate 
366.24  in council meetings and meet regularly with local elected 
366.25  officials and legislative members from the council member's 
366.26  district.  Each council member shall serve on at least one 
366.27  division committee for transportation, environment, or community 
366.28  development. 
366.29     (d) In the performance of its duties the metropolitan 
366.30  council may adopt policies and procedures governing its 
366.31  operation, establish committees, and, when specifically 
366.32  authorized by law, make appointments to other governmental 
366.33  agencies and districts.  
366.34     Sec. 22.  Minnesota Statutes 2000, section 473.123, 
366.35  subdivision 7, is amended to read: 
366.36     Subd. 7.  [PERFORMANCE AND BUDGET ANALYST.] The council, 
367.1   other than the chair, may hire a performance and budget analyst 
367.2   to assist the 16 council members with policy and budget analysis 
367.3   and evaluation of the council's performance.  The analyst may 
367.4   recommend and the council may hire up to two additional analysts 
367.5   to assist the council with performance evaluation and budget 
367.6   analysis.  The analyst and any additional analysts hired shall 
367.7   serve at the pleasure of the council members.  The 16 members of 
367.8   the council may prescribe all terms and conditions for the 
367.9   employment of the analyst and any additional analysts hired, 
367.10  including, but not limited to, the fixing of compensation, 
367.11  benefits, and insurance.  The analyst shall prepare the budget 
367.12  for the provisions of this section subdivision and submit the 
367.13  budget for council approval and inclusion in the council's 
367.14  overall budget. 
367.15     Sec. 23.  [473.124] [METROPOLITAN COUNCIL ELECTION; MEMBERS 
367.16  ELECTED AS COUNTY COMMISSIONERS.] 
367.17     Subdivision 1.  [NUMBER OF MEMBERS.] The metropolitan 
367.18  council consists of 25 members, except that the legislature may 
367.19  by law increase or decrease the number of members by up to eight 
367.20  in order to increase the number of county commissioners who are 
367.21  elected from metropolitan council districts as provided in this 
367.22  section. 
367.23     Subd. 2.  [DISTRICTS.] The legislature shall redraw the 
367.24  boundaries of metropolitan council districts after each federal 
367.25  decennial census.  The districts must be bounded by town, 
367.26  municipal, ward, or precinct lines.  The districts must be 
367.27  composed of compact, convenient, contiguous territory and must 
367.28  be substantially equal in population.  The population of the 
367.29  largest district must not exceed the population of the smallest 
367.30  district by more than ten percent, unless the result would force 
367.31  a voting precinct to be split.  A metropolitan council district 
367.32  may not include territory in more than one county unless 
367.33  necessary to meet equal population requirements.  If all the 
367.34  redrawn metropolitan council districts in a county lie wholly 
367.35  within the county, the metropolitan council districts also serve 
367.36  as county commissioner districts.  If the number of metropolitan 
368.1   council districts that also serve as county commissioner 
368.2   districts in a county is less than the number of members of the 
368.3   county board as provided under section 375.01, the remaining 
368.4   members of the county board must be elected from the county at 
368.5   large, except that, if a county has no redrawn metropolitan 
368.6   council districts that lie wholly within it, the county must be 
368.7   divided into as many county commissioner districts as there are 
368.8   members of the county board. 
368.9      Subd. 3.  [ELECTION.] In a county whose metropolitan 
368.10  council districts all lie wholly within the county, each 
368.11  candidate for the metropolitan council is also a candidate for 
368.12  the county board and, if elected, holds both offices at the same 
368.13  time.  In a county whose metropolitan council districts do not 
368.14  all lie wholly within the county, a candidate may separately 
368.15  file for, be elected to, and hold both the offices of 
368.16  metropolitan council member and county commissioner at the same 
368.17  time.  
368.18     Subd. 4.  [TERMS.] Metropolitan council members serve terms 
368.19  as provided in section 375.03. 
368.20     Sec. 24.  Minnesota Statutes 2000, section 473.146, 
368.21  subdivision 4, is amended to read: 
368.22     Subd. 4.  [TRANSPORTATION PLANNING.] The metropolitan 
368.23  council is the designated planning agency for any long-range 
368.24  comprehensive transportation planning required by section 134 of 
368.25  the Federal Highway Act of 1962, Section 4 of Urban Mass 
368.26  Transportation Act of 1964 and Section 112 of Federal Aid 
368.27  Highway Act of 1973 and other federal transportation laws.  The 
368.28  council shall assure administration and coordination of 
368.29  transportation planning with appropriate state, regional and 
368.30  other agencies, counties, and municipalities, and shall 
368.31  establish an a transportation advisory body board consisting of 
368.32  citizens, representatives of municipalities, counties, and state 
368.33  agencies in fulfillment of the planning responsibilities of the 
368.34  council 36 members appointed as follows: 
368.35     (1) 16 municipal elected officials, representing each of 
368.36  the metropolitan council districts, nominated by the association 
369.1   of metropolitan municipalities and appointed by the council; 
369.2      (2) 12 elected officials, one member appointed by each of 
369.3   the county boards of Carver, Scott, and Washington counties, two 
369.4   members appointed by each of the county boards of Anoka, Dakota, 
369.5   and Ramsey counties, and three members appointed by the Hennepin 
369.6   county board; 
369.7      (3) four modal representatives appointed by the council, of 
369.8   which two must represent public transit, one must represent the 
369.9   freight transportation industry, and one must represent 
369.10  nonmotorized transportation; 
369.11     (4) one member appointed by the commissioner of 
369.12  transportation; 
369.13     (5) one member appointed by the commissioner of the 
369.14  pollution control agency; 
369.15     (6) one member appointed by the metropolitan airports 
369.16  commission; and 
369.17     (7) one member appointed by the council who shall serve as 
369.18  the chair of the advisory board. 
369.19  The transportation board established under this section succeeds 
369.20  any transportation advisory board appointed and functioning 
369.21  before the effective date of this section.  
369.22     Sec. 25.  Minnesota Statutes 2000, section 473.39, is 
369.23  amended by adding a subdivision to read: 
369.24     Subd. 1h.  [OBLIGATIONS.] After July 1, 2001, in addition 
369.25  to the authority in subdivisions 1a, 1b, 1c, 1d, 1e, and 1g, the 
369.26  council may issue certificates of indebtedness, bonds, or other 
369.27  obligations under this section for capital expenditures as 
369.28  prescribed in the council's regional transit master plan and 
369.29  transit capital improvement program and for related costs, 
369.30  including the costs of issuance and sale of the obligations.  
369.31  The amount of the obligations issued under this subdivision in 
369.32  any year must not exceed an amount equal to the following 
369.33  limitations, except as provided in this subdivision: 
369.34     (1) for 2002, the limitation is $45,000,000; and 
369.35     (2) for each subsequent year, the limitation is equal to 
369.36  the last year's limitation calculated under this subdivision 
370.1   adjusted for inflation using the United States Department of 
370.2   Labor's Bureau of Labor Statistics Minneapolis-St. Paul Consumer 
370.3   Price Index for All Urban Consumers (CPI-U) for the last 
370.4   taxes-payable-year.  For any year in which the council does not 
370.5   issue obligations totaling the limitation calculated under this 
370.6   subdivision, the remaining available limitation amount may be 
370.7   carried forward to later years.  The council may issue 
370.8   obligations in a carry-forward year in an amount exceeding the 
370.9   annual limitation amount carried forward, but the limitation 
370.10  amount carried forward is not a permanent increase in the annual 
370.11  limitation calculated under this subdivision. 
370.12     Sec. 26.  Minnesota Statutes 2000, section 473.446, 
370.13  subdivision 1, is amended to read: 
370.14     Subdivision 1.  [WITHIN TRANSIT TAXING DISTRICT.] For the 
370.15  purposes of sections 473.405 to 473.449 and the metropolitan 
370.16  transit system, except as otherwise provided in this subdivision 
370.17  and subdivision 1b, the council shall levy each year upon all 
370.18  taxable property within the metropolitan transit taxing 
370.19  district, defined in subdivision 2, a transit tax consisting of: 
370.20     (a) an amount which shall be used for payment of the 
370.21  expenses of operating transit and paratransit service and to 
370.22  provide for payment of obligations issued by the council under 
370.23  section 473.436, subdivision 6; 
370.24     (b) an additional amount, if any, the council determines to 
370.25  be necessary to provide for the full and timely payment of its 
370.26  certificates of indebtedness and other obligations outstanding 
370.27  on July 1, 1985, to which property taxes under this section have 
370.28  been pledged; and 
370.29     (c) an additional amount necessary to provide full and 
370.30  timely payment of certificates of indebtedness, bonds, including 
370.31  refunding bonds or other obligations issued or to be issued 
370.32  under section 473.39 by the council for purposes of acquisition 
370.33  and betterment of property and other improvements of a capital 
370.34  nature and to which the council has specifically pledged tax 
370.35  levies under this clause. 
370.36     The property tax levied by the council for general purposes 
371.1   under paragraph (a) must not exceed the following amount for the 
371.2   years specified: 
371.3      (1) for taxes payable in 1995, the council's property tax 
371.4   levy limitation for general transit purposes is equal to the 
371.5   former regional transit board's property tax levy limitation for 
371.6   general transit purposes under this subdivision, for taxes 
371.7   payable in 1994, multiplied by an index for market valuation 
371.8   changes equal to the total market valuation of all taxable 
371.9   property located within the metropolitan transit taxing district 
371.10  for the current taxes payable year divided by the total market 
371.11  valuation of all taxable property located within the 
371.12  metropolitan transit taxing district for the previous taxes 
371.13  payable year; and 
371.14     (2) for taxes payable in 1996 and subsequent years through 
371.15  2001, the product of (i) the council's property tax levy 
371.16  limitation for general transit purposes for the previous year 
371.17  determined under this subdivision before reduction by the amount 
371.18  levied by any municipality in the previous year under section 
371.19  473.388, subdivision 7, multiplied by (ii) an index for market 
371.20  valuation changes equal to the total market valuation of all 
371.21  taxable property located within the metropolitan transit taxing 
371.22  district for the current taxes payable year divided by the total 
371.23  market valuation of all taxable property located within the 
371.24  metropolitan transit taxing district for the previous taxes 
371.25  payable year, minus the amount levied by any municipality in the 
371.26  current levy year under section 473.388, subdivision 7; 
371.27     (3) for taxes payable in 2003, the council's property tax 
371.28  levy limitation for general transit purposes is equal to (i) the 
371.29  council's property tax levy limitation for general transit 
371.30  purposes for the previous year, determined under this 
371.31  subdivision before reduction by the amount levied by any 
371.32  municipality for the previous year under section 473.388, 
371.33  subdivision 7, multiplied by (ii) an index for market valuation 
371.34  changes equal to the total market valuation of all taxable 
371.35  property located within the metropolitan transit taxing district 
371.36  for the current taxes payable year divided by the total market 
372.1   valuation of all taxable property located within the 
372.2   metropolitan transit taxing district for the previous taxes 
372.3   payable year, minus (iii) the amount levied by a municipality 
372.4   under section 473.388, subdivision 7, for the same taxes payable 
372.5   year as the council's limitation, plus (iv) $17,400,000.  The 
372.6   council must distribute 13.8 percent of any amount levied 
372.7   pursuant to item (iv) as additional financial assistance under 
372.8   section 473.388; 
372.9      (4) for taxes payable in 2004, the council's property tax 
372.10  levy limitation for general transit purposes is equal to (i) the 
372.11  council's property tax levy limitation for general transit 
372.12  purposes for the previous year, determined under this 
372.13  subdivision before reduction by the amount levied by any 
372.14  municipality for the previous year under section 473.388, 
372.15  subdivision 7, minus (ii) $17,400,000, multiplied by (iii) the 
372.16  index for market valuation changes as described in clause (3), 
372.17  minus (iv) the amount levied by a municipality under section 
372.18  473.388, subdivision 7, for the same taxes payable year as the 
372.19  council's limitation, plus (v) $11,500,000.  The council must 
372.20  distribute 13.8 percent of any amount levied pursuant to item 
372.21  (iv) as additional financial assistance under section 473.388; 
372.22  and 
372.23     (5) for taxes payable in 2005 and thereafter, the council's 
372.24  property tax levy limitation for general transit purposes is 
372.25  equal to (i) the council's property tax levy limitation for 
372.26  general transit purposes for the previous year, determined under 
372.27  this subdivision before reduction by the amount levied by any 
372.28  municipality for the previous year under section 473.388, 
372.29  subdivision 7, but excluding the amount in clause (4), item 
372.30  (iv), multiplied by (ii) the index for market valuation changes 
372.31  as described in clause (3), minus (iii) the amount levied by a 
372.32  municipality under section 473.388, subdivision 7, for the same 
372.33  taxes payable year as the council's limitation, plus (iv) 
372.34  $11,500,000 times an index for market valuation changes equal to 
372.35  the total market valuation of all taxable property located 
372.36  within the transit district for the current taxes payable year 
373.1   divided by the total market valuation of all taxable property 
373.2   located in the district for the taxes payable year 2003.  In 
373.3   2005, and each year thereafter, the council must distribute 13.8 
373.4   percent of any amount levied pursuant to item (iv) as additional 
373.5   financial assistance under section 473.388, subdivision 7. 
373.6      The portion of the property tax levy for transit district 
373.7   operating purposes attributable to a municipality that has 
373.8   exercised a local levy option under section 473.388, subdivision 
373.9   7, is the amount as determined under subdivision 1b.  The 
373.10  portion of the property tax levy for transit district operating 
373.11  purposes attributable to the remaining municipalities within the 
373.12  transit district is found by subtracting the portions 
373.13  attributable to the municipalities that have exercised a local 
373.14  levy option under section 473.388, subdivision 7. 
373.15     For the taxes payable year 1995, the index for market 
373.16  valuation changes shall be multiplied by an amount equal to the 
373.17  sum of the regional transit board's property tax levy limitation 
373.18  for the taxes payable year 1994 and $160,665.  The $160,665 
373.19  increase shall be a permanent adjustment to the levy limit base 
373.20  used in determining the regional transit board's property tax 
373.21  levy limitation for general purposes for subsequent taxes 
373.22  payable years. 
373.23     For the purpose of determining the council's property tax 
373.24  levy limitation for general transit purposes under this 
373.25  subdivision, "total market valuation" means the total market 
373.26  valuation of all taxable property within the metropolitan 
373.27  transit taxing district without valuation adjustments for fiscal 
373.28  disparities (chapter 473F), tax increment financing (sections 
373.29  469.174 to 469.179), and high voltage transmission lines 
373.30  (section 273.425). 
373.31     The county auditor shall reduce the tax levied pursuant to 
373.32  this section and section 473.388 on all property within 
373.33  statutory and home rule charter cities and towns that receive 
373.34  full-peak service and limited off-peak service by an amount 
373.35  equal to the tax levy that would be produced by applying a rate 
373.36  of 0.510 percent of net tax capacity on the property.  The 
374.1   county auditor shall reduce the tax levied pursuant to this 
374.2   section and section 473.388 on all property within statutory and 
374.3   home rule charter cities and towns that receive limited peak 
374.4   service by an amount equal to the tax levy that would be 
374.5   produced by applying a rate of 0.765 percent of net tax capacity 
374.6   on the property.  The amounts so computed by the county auditor 
374.7   shall be submitted to the commissioner of revenue as part of the 
374.8   abstracts of tax lists required to be filed with the 
374.9   commissioner under section 275.29.  Any prior year adjustments 
374.10  shall also be certified in the abstracts of tax lists.  The 
374.11  commissioner shall review the certifications to determine their 
374.12  accuracy and may make changes in the certification as necessary 
374.13  or return a certification to the county auditor for 
374.14  corrections.  The commissioner shall pay to the council and to 
374.15  the municipalities levying under section 473.388, subdivision 7, 
374.16  the amounts certified by the county auditors on the dates 
374.17  provided in section 273.1398, apportioned between the council 
374.18  and the municipality in the same proportion as the total transit 
374.19  levy is apportioned within the municipality.  There is annually 
374.20  appropriated from the general fund in the state treasury to the 
374.21  department of revenue the amounts necessary to make these 
374.22  payments.  
374.23     For the purposes of this subdivision, "full-peak and 
374.24  limited off-peak service" means peak period regular route 
374.25  service, plus weekday midday regular route service at intervals 
374.26  longer than 60 minutes on the route with the greatest frequency; 
374.27  and "limited peak period service" means peak period regular 
374.28  route service only.  
374.29     For the purposes of property taxes payable in the following 
374.30  year, the council shall annually determine which cities and 
374.31  towns qualify for the 0.510 percent or 0.765 percent tax 
374.32  capacity rate reduction and shall certify this list to the 
374.33  county auditor of the county wherein such cities and towns are 
374.34  located on or before September 15.  No changes may be made to 
374.35  the annual list after September 15. 
374.36     [EFFECTIVE DATE.] This section is effective for taxes 
375.1   payable in 2002 and thereafter.  
375.2      Sec. 27.  [STUDY; REPORT.] 
375.3      The metropolitan council shall study the feasibility of 
375.4   transferring functions or services from metropolitan counties to 
375.5   the metropolitan council established in this act in order to 
375.6   take advantage of economies of scale without sacrificing equity 
375.7   or effectiveness.  In addition to any other function or service, 
375.8   the study must include an analysis of the feasibility and 
375.9   benefits of transferring county correctional facilities and 
375.10  county highways to the council.  The council shall report to the 
375.11  legislature the results of the study by January 15, 2003. 
375.12     Sec. 28.  [TRANSITION.] 
375.13     The appointed chair and appointed metropolitan council 
375.14  members holding office on the effective date of this section, 
375.15  and any successor appointed to serve as the council chair or as 
375.16  a member, shall continue in office until the first Monday in 
375.17  January 2003. 
375.18     Sec. 29.  [APPLICATION.] 
375.19     This article applies in the counties of Anoka, Carver, 
375.20  Dakota, Hennepin, Ramsey, Scott, and Washington. 
375.21     Sec. 30.  [REPEALER.] 
375.22     Minnesota Statutes 2000, section 473.123, subdivisions 2a, 
375.23  3, 3a, and 3c, are repealed. 
375.24                             ARTICLE 15
375.25                       STREAMLINED SALES TAX
375.26     Section 1.  [295.60] [SPECIAL FUR CLOTHING TAX.] 
375.27     Subdivision 1.  [IMPOSITION.] If clothing made of fur is 
375.28  not subject to the sales tax under chapter 297A, a tax is 
375.29  imposed on each furrier equal to 6.5 percent of gross revenues 
375.30  from the sale of clothing made from fur made in Minnesota during 
375.31  the calendar year. 
375.32     Subd. 2.  [DEFINITIONS.] (a) For purposes of this section, 
375.33  the following terms have the meanings given. 
375.34     (b) "Commissioner" means the commissioner of revenue. 
375.35     (c) "Furrier" means a retailer that sells clothing made of 
375.36  fur. 
376.1      (d) "Clothing made of fur" means articles of clothing made 
376.2   of fur on the hide or pelt, and articles of clothing of which 
376.3   such fur is the component material of chief value, but only if 
376.4   such value is more than three times the value of the next most 
376.5   valuable material.  
376.6      Subd. 3.  [PAYMENT.] (a) Each furrier shall make estimated 
376.7   payments of the taxes for the calendar year in quarterly 
376.8   installments to the commissioner by April 15, July 15, October 
376.9   15, and January 15 of the following calendar year. 
376.10     (b) Estimated tax payments are not required if: 
376.11     (1) the tax for the current calendar year is less than 
376.12  $500; or 
376.13     (2) the tax for the previous calendar year is less than 
376.14  $500, if the taxpayer had a tax liability and was doing business 
376.15  the entire year. 
376.16     (c) Underpayment of estimated installments bear interest at 
376.17  the rate specified in section 270.75, from the due date of the 
376.18  payment until paid or until the due date of the annual return, 
376.19  whichever comes first.  An underpayment of an estimated 
376.20  installment is the difference between the amount paid and the 
376.21  lesser of (1) 90 percent of one-quarter of the tax for the 
376.22  calendar year or (2) one-quarter of the total tax for the 
376.23  previous calendar year if the taxpayer had a tax liability and 
376.24  was doing business the entire year. 
376.25     Subd. 4.  [ELECTRONIC FUNDS TRANSFER PAYMENTS.] A taxpayer 
376.26  with an aggregate tax liability of $120,000 or more during a 
376.27  fiscal year ending June 30 must remit all liabilities by means 
376.28  of a funds transfer as defined in section 336.4A-104, paragraph 
376.29  (a), in the subsequent calendar year.  The funds transfer 
376.30  payment date, as defined in section 336.4A-401, is on or before 
376.31  the date the tax is due.  If the date the tax is due is not a 
376.32  funds-transfer business day, as defined in section 336.4A-105, 
376.33  paragraph (a), clause (4), the payment date is on or before the 
376.34  first funds-transfer business day after the date the tax is due. 
376.35     Subd. 5.  [ANNUAL RETURN.] The taxpayer must file an annual 
376.36  return reconciling the estimated payments by March 15 of the 
377.1   following calendar year. 
377.2      Subd. 6.  [FORM OF RETURNS.] The estimated payments and 
377.3   annual return must contain the information and be in the form 
377.4   prescribed by the commissioner. 
377.5      Subd. 7.  [APPLICATION OF OTHER CHAPTERS.] Unless 
377.6   specifically provided otherwise by this section, the 
377.7   enforcement, interest, and penalty provisions under chapter 294, 
377.8   appeal provisions in sections 289A.43 and 289A.65, criminal 
377.9   penalties in section 289A.63, refunds provisions in section 
377.10  289A.50, and collection and rulemaking provisions under chapter 
377.11  270, apply to a liability for the taxes imposed under this 
377.12  section. 
377.13     Subd. 8.  [INTEREST ON OVERPAYMENTS.] Interest must be paid 
377.14  on an overpayment refunded or credited to the taxpayer from the 
377.15  date of payment of the tax until the date the refund is paid or 
377.16  credited.  For purposes of this subdivision, the date of payment 
377.17  is the due date of the return or the date of actual payment of 
377.18  the tax, whichever is later. 
377.19     Subd. 9.  [DEPOSIT OF REVENUES.] The commissioner shall 
377.20  deposit all revenues, including penalties and interest, derived 
377.21  from the tax imposed by this section in the general fund. 
377.22     [EFFECTIVE DATE.] This section is effective for sales made 
377.23  after December 31, 2001. 
377.24     Sec. 2.  Minnesota Statutes 2000, section 297A.61, 
377.25  subdivision 3, is amended to read: 
377.26     Subd. 3.  [SALE AND PURCHASE.] (a) "Sale" and "purchase" 
377.27  include, but are not limited to, each of the transactions listed 
377.28  in this subdivision. 
377.29     (b) Sale and purchase include any transfer of title or 
377.30  possession, or both, of tangible personal property, whether 
377.31  absolutely or conditionally, and the leasing of or the granting 
377.32  of a license to use or consume, for a consideration, tangible 
377.33  personal property, other than a manufactured home used for 
377.34  residential purposes for a continuous period of 30 days or more. 
377.35     (c) Sale and purchase include the production, fabrication, 
377.36  printing, or processing of tangible personal property for a 
378.1   consideration for consumers who furnish either directly or 
378.2   indirectly the materials used in the production, fabrication, 
378.3   printing, or processing. 
378.4      (d) Sale and purchase include the furnishing, preparing, or 
378.5   serving for a consideration of food or drinks.  Notwithstanding 
378.6   section 297A.67, subdivision 2, taxable food or drinks 
378.7   include includes, but are is not limited to, the following: 
378.8      (1) prepared food or drinks sold by the retailer for 
378.9   immediate consumption on the retailer's premises.  Food and 
378.10  drinks sold within a building or grounds that require an 
378.11  admission charge for entrance are presumed to be sold for 
378.12  consumption on the premises; 
378.13     (2) food or drinks prepared by the retailer for immediate 
378.14  consumption either on or off the retailer's premises.  For 
378.15  purposes of this subdivision, "food or drinks prepared for 
378.16  immediate consumption" means any food product upon which an act 
378.17  of preparation including, but not limited to, cooking, mixing, 
378.18  sandwich making, blending, heating, or pouring has been 
378.19  performed by the retailer so the food product may be immediately 
378.20  consumed by the purchaser; 
378.21     (3) ice cream, ice milk, frozen yogurt products, or frozen 
378.22  novelties sold in single or individual servings including, but 
378.23  not limited to, cones, sundaes, and snow cones; 
378.24     (4) (2) soft drinks and other beverages, including all 
378.25  carbonated and noncarbonated beverages or drinks sold in liquid 
378.26  form, but not including beverages or drinks which contain milk 
378.27  or milk products, beverages or drinks containing 15 or more 
378.28  percent fruit juice, and noncarbonated and noneffervescent 
378.29  bottled water sold in individual containers of one-half gallon 
378.30  or more in size; 
378.31     (5) gum, (3) candy, and candy products; and 
378.32     (6) ice; 
378.33     (7) (4) all food sold from through vending machines;. 
378.34     (8) all food for immediate consumption sold from concession 
378.35  stands and vehicles; 
378.36     (9) party trays; 
379.1      (10) all meals and single servings of packaged snack food 
379.2   sold in restaurants and bars; and 
379.3      (11) bakery products that are: 
379.4      (i) prepared by the retailer for consumption on the 
379.5   retailer's premises; 
379.6      (ii) sold at a place that charges admission; 
379.7      (iii) sold from vending machines; or 
379.8      (iv) sold in single or individual servings from concession 
379.9   stands, vehicles, bars, and restaurants.  
379.10     For purposes of this paragraph, "single or individual 
379.11  servings" does not include products when sold in bulk containers 
379.12  or bulk packaging.  
379.13     For purposes of this paragraph, "premises" means the total 
379.14  space and facilities, including buildings, grounds, and parking 
379.15  lots that are made available or that are available for use by 
379.16  the retailer or customer for the purpose of sale or consumption 
379.17  of prepared food and drinks.  The premises of a caterer is the 
379.18  place where the catered food or drinks are served. 
379.19     (e) A sale and a purchase includes the furnishing for a 
379.20  consideration of electricity, gas, water, or steam for use or 
379.21  consumption within this state or local exchange telephone 
379.22  service, intrastate toll service, and interstate toll service, 
379.23  if that service originates from and is charged to a telephone 
379.24  located in this state.  Telephone service includes (1) paging 
379.25  services, and (2) private communication service, as defined in 
379.26  United States Code, title 26, section 4252(d), except for 
379.27  private communication service purchased by an agent acting on 
379.28  behalf of the state lottery.  Telephone service does not include 
379.29  services purchased with a prepaid telephone calling card.  The 
379.30  furnishing for a consideration of access to telephone services 
379.31  by a hotel to its guests is a sale.  The furnishing for a 
379.32  consideration of items listed in this paragraph by a municipal 
379.33  corporation is a sale. 
379.34     (f) A sale and a purchase includes the transfer for a 
379.35  consideration of computer software.  
379.36     (g) A sale and a purchase includes the furnishing for a 
380.1   consideration of taxable services as defined in subdivision 16. 
380.2      (h) A sale and a purchase includes the furnishing for a 
380.3   consideration of tangible personal property or taxable services 
380.4   by the United States or any of its agencies or 
380.5   instrumentalities, or the state of Minnesota, its agencies, 
380.6   instrumentalities, or political subdivisions. 
380.7      [EFFECTIVE DATE.] This section is effective for sales and 
380.8   purchases occurring after December 31, 2001. 
380.9      Sec. 3.  Minnesota Statutes 2000, section 297A.61, 
380.10  subdivision 4, is amended to read: 
380.11     Subd. 4.  [RETAIL SALE.] (a) A "retail sale" means a any 
380.12  sale, lease, or rental for any purpose other than resale in the 
380.13  regular course of business, sublease, or subrent.  
380.14     (b) A sale of property used by the owner only by leasing it 
380.15  to others or by holding it in an effort to lease it, and put to 
380.16  no use by the owner other than resale after the lease or effort 
380.17  to lease, is a sale of property for resale.  
380.18     (c) A sale of master computer software that is purchased 
380.19  and used to make copies for sale or lease is a sale of property 
380.20  for resale.  
380.21     (d) A sale of building materials, supplies, and equipment 
380.22  to owners, contractors, subcontractors, or builders for the 
380.23  erection of buildings or the alteration, repair, or improvement 
380.24  of real property is a retail sale in whatever quantity sold, 
380.25  whether the sale is for purposes of resale in the form of real 
380.26  property or otherwise.  
380.27     (e) A sale of carpeting, linoleum, or similar floor 
380.28  covering to a person who provides for installation of the floor 
380.29  covering is a retail sale and not a sale for resale since a sale 
380.30  of floor covering which includes installation is a contract for 
380.31  the improvement of real property. 
380.32     (f) A sale of shrubbery, plants, sod, trees, and similar 
380.33  items to a person who provides for installation of the items is 
380.34  a retail sale and not a sale for resale since a sale of 
380.35  shrubbery, plants, sod, trees, and similar items that includes 
380.36  installation is a contract for the improvement of real property. 
381.1      (g) A sale of tangible personal property that is awarded as 
381.2   prizes is a retail sale and is not considered a sale of property 
381.3   for resale. 
381.4      (h) A sale of tangible personal property utilized or 
381.5   employed in the furnishing or providing of services under 
381.6   subdivision 16, paragraph (b), including, but not limited to, 
381.7   property given as promotional items, is a retail sale and is not 
381.8   considered a sale of property for resale. 
381.9      (i) A sale of tangible personal property used in conducting 
381.10  lawful gambling under chapter 349 or the state lottery under 
381.11  chapter 349A, including, but not limited to, property given as 
381.12  promotional items, is a retail sale and is not considered a sale 
381.13  of property for resale. 
381.14     (j) A sale of machines, equipment, or devices that are used 
381.15  to furnish, provide, or dispense goods or services, including, 
381.16  but not limited to, coin-operated devices, is a retail sale and 
381.17  is not considered a sale of property for resale. 
381.18     (k) In the case of a lease, a retail sale occurs when an 
381.19  obligation to make a lease payment becomes due under the terms 
381.20  of the agreement or the trade practices of the lessor. 
381.21     (l) In the case of a conditional sales contract, a retail 
381.22  sale occurs upon the transfer of title or possession of the 
381.23  tangible personal property. 
381.24     [EFFECTIVE DATE.] This section is effective January 1, 2002.
381.25     Sec. 4.  Minnesota Statutes 2000, section 297A.61, 
381.26  subdivision 7, is amended to read: 
381.27     Subd. 7.  [SALES PRICE.] (a) "Sales price" means the total 
381.28  consideration for a retail sale, valued in money, whether paid 
381.29  in money or by barter or exchange. the measure subject to sales 
381.30  tax, and means the total amount of consideration, including 
381.31  cash, credit, property, and services, for which personal 
381.32  property or services are sold, leased, or rented, valued in 
381.33  money, whether received in money or otherwise, without any 
381.34  deduction for the following: 
381.35     (1) the seller's cost of the property sold; 
381.36     (2) the cost of materials used, labor or service cost, 
382.1   interest, losses, all costs of transportation to the seller, all 
382.2   taxes imposed on the seller, and any other expenses of the 
382.3   seller; 
382.4      (3) charges by the seller for any services necessary to 
382.5   complete the sale, other than delivery and installation charges; 
382.6      (4) delivery charges; 
382.7      (5) installation charges; and 
382.8      (6) the value of exempt property given to the purchaser 
382.9   when taxable and exempt personal property have been bundled 
382.10  together and sold by the seller as a single product or piece of 
382.11  merchandise. 
382.12     (b) Sales price includes: 
382.13     (1) the cost of the property sold, cost of materials used, 
382.14  labor or service cost, interest, or discount allowed after the 
382.15  sale is consummated; 
382.16     (2) the cost of transportation incurred prior to the time 
382.17  of sale; 
382.18     (3) any amount for which credit is given by the seller to 
382.19  the purchaser; 
382.20     (4) charges for services that are part of a sale; or 
382.21     (5) any other expense whatsoever. 
382.22     (c) (b) Sales price does not include the following: 
382.23     (1) an amount allowed as credit for tangible personal 
382.24  property taken in trade for resale discounts, including cash, 
382.25  terms, or coupons that are not reimbursed by a third party and 
382.26  that are allowed by the seller and taken by a purchaser on a 
382.27  sale; 
382.28     (2) charges of up to 15 percent in lieu of tips if the 
382.29  charges are separately stated interest, financing, and carrying 
382.30  charges from credit extended on the sale of personal property or 
382.31  services, if the amount is separately stated on the invoice, 
382.32  bill of sale, or similar document given to the purchaser; and 
382.33     (3) interest, financing, or carrying charges if the charges 
382.34  are separately stated; any taxes legally imposed directly on the 
382.35  consumer that are separately stated on the invoice, bill of 
382.36  sale, or similar document given to the purchaser. 
383.1      (4) charges for labor or services used in installing or 
383.2   applying the property sold if the charges are separately stated; 
383.3      (5) transportation charges if the transportation occurs 
383.4   after the retail sale of the property if the charges are 
383.5   separately stated; 
383.6      (6) cash discounts allowed and taken on sales or the amount 
383.7   refunded either in cash or in credit for property returned by 
383.8   purchasers; 
383.9      (7) the rental motor vehicle tax imposed under section 
383.10  297A.64; or 
383.11     (8) the amount of any tax imposed by the United States on 
383.12  communications services under United States Code, title 26, 
383.13  section 4251(a). 
383.14     (d) Notwithstanding paragraph (c), "sales price," for 
383.15  purposes of sales of ready-mixed concrete sold from a 
383.16  ready-mixed concrete truck, includes any transportation, 
383.17  delivery, or other service charges, and no deduction is allowed 
383.18  for those charges, whether or not the charges are separately 
383.19  stated.  
383.20     [EFFECTIVE DATE.] This section is effective January 1, 2002.
383.21     Sec. 5.  Minnesota Statutes 2000, section 297A.61, 
383.22  subdivision 9, is amended to read: 
383.23     Subd. 9.  [RETAILER AND SELLER.] "Retailer" and "seller" 
383.24  means every any person engaged in making retail sales, leases, 
383.25  or rentals of personal property or services. 
383.26     [EFFECTIVE DATE.] This section is effective January 1, 2002.
383.27     Sec. 6.  Minnesota Statutes 2000, section 297A.61, is 
383.28  amended by adding a subdivision to read: 
383.29     Subd. 24.  [PURCHASE PRICE.] "Purchase price" means the 
383.30  measure subject to the use tax and has the same meaning as 
383.31  "sales price." 
383.32     [EFFECTIVE DATE.] This section is effective January 1, 2002.
383.33     Sec. 7.  Minnesota Statutes 2000, section 297A.61, is 
383.34  amended by adding a subdivision to read: 
383.35     Subd. 25.  [STATE.] Unless specifically provided otherwise, 
383.36  "state" means any state of the United States and the District of 
384.1   Columbia. 
384.2      [EFFECTIVE DATE.] This section is effective January 1, 2002.
384.3      Sec. 8.  Minnesota Statutes 2000, section 297A.61, is 
384.4   amended by adding a subdivision to read: 
384.5      Subd. 26.  [DELIVERY CHARGES.] "Delivery charges" means 
384.6   charges by the seller for preparation and delivery to a location 
384.7   designated by the purchaser of personal property or services 
384.8   including, but not limited to, transportation, shipping, 
384.9   postage, handling, crating, and packing. 
384.10     [EFFECTIVE DATE.] This section is effective January 1, 2002.
384.11     Sec. 9.  Minnesota Statutes 2000, section 297A.61, is 
384.12  amended by adding a subdivision to read: 
384.13     Subd. 27.  [PREPARED FOOD.] "Prepared food" means (i) food 
384.14  sold in a heated state or heated by the seller; (ii) two or more 
384.15  food ingredients mixed or combined by the seller for sale as a 
384.16  single item; or (iii) food sold with eating utensils provided by 
384.17  the seller, including plates, knives, forks, spoons, glasses, 
384.18  cups, napkins, or straws.  Prepared food does not include food 
384.19  that is sliced, repackaged, or pasteurized by the seller. 
384.20     [EFFECTIVE DATE.] This section is effective January 1, 2002.
384.21     Sec. 10.  Minnesota Statutes 2000, section 297A.61, is 
384.22  amended by adding a subdivision to read: 
384.23     Subd. 28.  [SOFT DRINKS.] "Soft drinks" means nonalcoholic 
384.24  beverages that contain natural or artificial sweeteners.  Soft 
384.25  drinks do not include beverages that contain milk or milk 
384.26  products; soy, rice, or similar milk substitutes; or greater 
384.27  than 50 percent vegetable or fruit juice by volume. 
384.28     [EFFECTIVE DATE.] This section is effective January 1, 2002.
384.29     Sec. 11.  Minnesota Statutes 2000, section 297A.61, is 
384.30  amended by adding a subdivision to read:  
384.31     Subd. 29.  [CANDY.] "Candy" means a preparation of sugar, 
384.32  honey, or other natural or artificial sweeteners in combination 
384.33  with chocolate, fruits, nuts, or other ingredients or flavorings 
384.34  in the form of bars, drops, or pieces.  Candy does not include 
384.35  any preparation containing flour and must require no 
384.36  refrigeration. 
385.1      [EFFECTIVE DATE.] This section is effective January 1, 2002.
385.2      Sec. 12.  Minnesota Statutes 2000, section 297A.61, is 
385.3   amended by adding a subdivision to read: 
385.4      Subd. 30.  [FOOD SOLD THROUGH VENDING MACHINES.] "Food sold 
385.5   through vending machines" means food dispensed from a machine or 
385.6   other mechanical device that accepts payment. 
385.7      [EFFECTIVE DATE.] This section is effective January 1, 2002.
385.8      Sec. 13.  [297A.668] [SOURCING OF SALE; SITUS IN THIS 
385.9   STATE.] 
385.10     Subdivision 1.  [SOURCING RULES.] (a) The following 
385.11  provisions apply regardless of the characterization of a product 
385.12  as tangible personal property, a digital good, or a service; but 
385.13  do not apply to telecommunications services, or the sales of 
385.14  motor vehicles, watercraft, aircraft, modular homes, 
385.15  manufactured homes, or mobile homes.  These provisions only 
385.16  apply to determine a seller's obligation to pay or collect and 
385.17  remit a sales or use tax with respect to the seller's sale of a 
385.18  product.  These provisions do not affect the obligation of a 
385.19  seller as purchaser to remit tax on the use of the product. 
385.20     (b) When the product is received by the purchaser at a 
385.21  business location of the seller, the sale is sourced to that 
385.22  business location. 
385.23     (c) When the product is not received by the purchaser at a 
385.24  business location of the seller, the sale is sourced to the 
385.25  location where receipt by the purchaser or the donee designated 
385.26  by the purchaser occurs, including the location indicated by 
385.27  instructions for delivery to the purchasers or the purchaser's 
385.28  donee, known to the seller. 
385.29     (d) When paragraphs (b) and (c) do not apply, the sale is 
385.30  sourced to the location indicated by an address for the 
385.31  purchaser that is available from the business records of the 
385.32  seller that are maintained in the ordinary course of the 
385.33  seller's business, when use of this address does not constitute 
385.34  bad faith. 
385.35     (e) When paragraphs (b), (c), and (d) do not apply, the 
385.36  sale is sourced to the location indicated by an address for the 
386.1   purchaser obtained during the consummation of the sale, 
386.2   including the address of a purchaser's payment instrument if no 
386.3   other address is available, when use of this address does not 
386.4   constitute bad faith. 
386.5      (f) When paragraphs (b), (c), (d), and (e) do not apply, 
386.6   including the circumstance where the seller is without 
386.7   sufficient information to apply the previous paragraphs, then 
386.8   the location is determined by the address from which tangible 
386.9   personal property was shipped, from which the digital good was 
386.10  first available for transmission by the seller, or from which 
386.11  the service was provided. 
386.12     Subd. 2.  [MULTIPLE POINTS OF USE.] (a) Notwithstanding the 
386.13  provisions of subdivision 1, a business purchaser that is not a 
386.14  holder of a direct pay permit that knows at the time of its 
386.15  purchase of a digital good or service that the digital good or 
386.16  service will be concurrently available for use in more than one 
386.17  taxing jurisdiction shall deliver to the seller in conjunction 
386.18  with its purchase a multiple points of use exemption certificate 
386.19  disclosing this fact. 
386.20     (b) Upon receipt of the multiple points of use exemption 
386.21  certificate, the seller is relieved of the obligation to 
386.22  collect, pay, or remit the applicable tax and the purchaser is 
386.23  obligated to collect, pay, or remit the applicable tax on a 
386.24  direct pay basis. 
386.25     (c) A purchaser delivering the multiple points of use 
386.26  exemption certificate may use any reasonable, but consistent and 
386.27  uniform, method of apportionment that is supported by the 
386.28  purchaser's business records as they exist at the time of the 
386.29  consummation of the sale. 
386.30     (d) The multiple points of use exemption certificate 
386.31  remains in effect for all future sales by the seller to the 
386.32  purchaser until it is revoked in writing. 
386.33     (e) A holder of a direct pay permit is not required to 
386.34  deliver a multiple points or use exemption certificate to the 
386.35  seller.  A direct pay permit holder shall follow the provisions 
386.36  of paragraph (c) in apportioning the tax due on a digital good 
387.1   or a service that will be concurrently available for use in more 
387.2   than one taxing jurisdiction. 
387.3      Subd. 3.  [DEFINITION OF TERMS.] For purposes of this 
387.4   section, the terms "receive" and "receipt" mean taking 
387.5   possession of tangible personal property, making first use of 
387.6   services, or taking possession of making first use of digital 
387.7   goods, whichever occurs first.  The terms receive and receipt do 
387.8   not include possession by a carrier for hire on behalf of the 
387.9   purchaser. 
387.10     [EFFECTIVE DATE.] This section is effective for sales and 
387.11  purchases occurring after December 31, 2001. 
387.12     Sec. 14.  Minnesota Statutes 2000, section 297A.67, 
387.13  subdivision 2, is amended to read: 
387.14     Subd. 2.  [FOOD PRODUCTS AND FOOD INGREDIENTS.] 
387.15  Food products including, but not limited to, cereal and cereal 
387.16  products, butter, cheese, milk and milk products, oleomargarine, 
387.17  meat and meat products, fish and fish products, eggs and egg 
387.18  products, vegetables and vegetable products, fruit and fruit 
387.19  products, spices and salt, sugar and sugar products, coffee and 
387.20  coffee substitutes, tea, and cocoa and cocoa products and food 
387.21  ingredients are exempt.  For purposes of this subdivision, 
387.22  "food" and "food ingredients" mean substances, whether in 
387.23  liquid, concentrated, solid, frozen, dried, or dehydrated form, 
387.24  that are sold for ingestion or chewing by humans and are 
387.25  consumed for their taste or nutritional value.  Food and food 
387.26  ingredients do not include candy, soft drinks, food sold through 
387.27  vending machines, and prepared foods.  Food and food ingredients 
387.28  do not include alcoholic beverages, dietary supplements, and 
387.29  tobacco.  For purposes of this subdivision, "alcoholic 
387.30  beverages" means beverages that are suitable for human 
387.31  consumption and contain one-half of one percent or more of 
387.32  alcohol by volume.  For purposes of this subdivision, "tobacco" 
387.33  means cigarettes, cigars, chewing or pipe tobacco, or any other 
387.34  item that contains tobacco.  For purposes of this subdivision, 
387.35  "dietary supplements" means any product, other than tobacco, 
387.36  intended to supplement the diet that: 
388.1      (1) contains one or more of the following dietary 
388.2   ingredients: 
388.3      (i) a vitamin; 
388.4      (ii) a mineral; 
388.5      (iii) an herb or other botanical; 
388.6      (iv) an amino acid; 
388.7      (v) a dietary substance for use by humans to supplement the 
388.8   diet by increasing the total dietary intake; and 
388.9      (vi) a concentrate, metabolite, constituent, extract, or 
388.10  combination of any ingredient described in items (i) to (v); 
388.11     (2) is intended for ingestion in tablet, capsule, powder, 
388.12  softgel, gelcap, or liquid form, or if not intended for 
388.13  ingestion in such form, is not represented as conventional food 
388.14  and is not represented for use as a sole item of a meal or of 
388.15  the diet; and 
388.16     (3) is required to be labeled as a dietary supplement, 
388.17  identifiable by the supplement facts box found on the label and 
388.18  as required pursuant to Code of Federal Regulations, title 21, 
388.19  section 101.36. 
388.20     [EFFECTIVE DATE.] This section is effective for sales and 
388.21  purchases occurring after December 31, 2001. 
388.22     Sec. 15.  Minnesota Statutes 2000, section 297A.67, 
388.23  subdivision 8, is amended to read: 
388.24     Subd. 8.  [CLOTHING.] (a) Clothing and wearing apparel, 
388.25  including sewing materials to be directly incorporated into 
388.26  wearing apparel, are is exempt.  For purposes of this 
388.27  subdivision, clothing and wearing apparel do not include the 
388.28  following: 
388.29     (1) articles designed primarily for use while engaging in a 
388.30  specific sport or recreational activity that are not also worn 
388.31  for general use; 
388.32     (2) articles designed primarily to provide safety or 
388.33  protection against injury while the user is engaged in 
388.34  industrial or general job activities; 
388.35     (3) all articles commonly or commercially known as jewelry 
388.36  including, but not limited to, watches; 
389.1      (4) nonprescription optical glasses of any sort; 
389.2      (5) articles made entirely of fur on the hide or pelt, or 
389.3   partially of such fur if the value of the fur is more than three 
389.4   times the value of the next most valuable component material; 
389.5      (6) perfume, lotions, creams, dyes, or other substances 
389.6   that are applied to the skin or the hair; and 
389.7      (7) luggage, bags, purses, wallets, or cases of any 
389.8   sort. "clothing" means all human wearing apparel suitable for 
389.9   general use. 
389.10     (b) Clothing includes, but is not limited to, aprons, 
389.11  household and shop; athletic supporters; baby receiving 
389.12  blankets; bathing suits and caps; beach capes and coats; belts 
389.13  and suspenders; boots; coats and jackets; costumes; children and 
389.14  adult diapers, including disposable; ear muffs; footlets; formal 
389.15  wear; garters and garter belts; girdles; gloves and mittens for 
389.16  general use; hats and caps; hosiery; insoles for shoes; lab 
389.17  coats; neckties; overshoes; pantyhose; rainwear; rubber pants; 
389.18  sandals; scarves; shoes and shoe laces; slippers; sneakers; 
389.19  socks and stockings; steel-toed boots; underwear; uniforms, 
389.20  athletic and nonathletic; and wedding apparel. 
389.21     (c) Clothing does not include the following: 
389.22     (1) belt buckles sold separately; 
389.23     (2) costume masks sold separately; 
389.24     (3) patches and emblems sold separately; 
389.25     (4) sewing equipment and supplies, including but not 
389.26  limited to, knitting needles, patterns, pins, scissors, sewing 
389.27  machines, sewing needles, tape measures, and thimbles; 
389.28     (5) sewing materials that become part of clothing, 
389.29  including but not limited to, buttons, fabric, lace, thread, 
389.30  yarn, and zippers; 
389.31     (6) clothing accessories or equipment; 
389.32     (7) sports or recreational equipment; and 
389.33     (8) protective equipment. 
389.34     For purposes of this subdivision, "clothing accessories or 
389.35  equipment" means incidental items worn on the person or in 
389.36  conjunction with clothing.  Clothing accessories include, but 
390.1   are not limited to, briefcases; cosmetics; hair notions, 
390.2   including barrettes, hair bows, and hairnets; handbags; 
390.3   handkerchiefs; jewelry; nonprescription sunglasses; umbrellas; 
390.4   wallets; watches; and wigs and hairpieces.  "Sports or 
390.5   recreational equipment" means items designed for human use and 
390.6   worn in conjunction with an athletic or recreational activity 
390.7   that are not suitable for general use.  Sports and recreational 
390.8   equipment, includes but is not limited to, ballet and tap shoes; 
390.9   cleated or spiked athletic shoes; baseball, bowling, boxing, 
390.10  hockey, and golf gloves; goggles; hand and elbow guards; life 
390.11  preservers and vests; mouth guards; roller and ice skates; shin 
390.12  guards; shoulder pads; ski boots; waders; and wetsuits and 
390.13  fins.  "Protective equipment" means items for human wear and 
390.14  designed as protection of the wearer against injury or disease 
390.15  or as protection against damage or injury of other persons or 
390.16  property but not suitable for general use.  Protective 
390.17  equipment, includes but is not limited to, breathing masks; 
390.18  clean room apparel and equipment; ear and hearing protectors; 
390.19  face shields; finger guards; hard hats; helmets; paint or dust 
390.20  respirators; protective gloves; safety glasses and goggles; 
390.21  safety belts; tool belts; and welders gloves and masks. 
390.22     [EFFECTIVE DATE.] This section is effective for sales and 
390.23  purchases occurring after December 31, 2001. 
390.24     Sec. 16.  Minnesota Statutes 2000, section 297A.67, is 
390.25  amended by adding a subdivision to read: 
390.26     Subd. 26.  [TRADE ALLOWANCE.] The amount allowed as a 
390.27  credit against the sales price for tangible personal property 
390.28  taken in trade for resale is exempt. 
390.29     [EFFECTIVE DATE.] This section is effective for sales and 
390.30  purchases occurring after December 31, 2001. 
390.31     Sec. 17.  Minnesota Statutes 2000, section 297A.72, 
390.32  subdivision 1, is amended to read: 
390.33     Subdivision 1.  [DUTY OF RETAILER.] An A fully completed 
390.34  exemption certificate conclusively relieves the retailer from 
390.35  collecting and remitting the tax only if taken in good faith 
390.36  from the purchaser at the time of sale. 
391.1      [EFFECTIVE DATE.] This section is effective for sales and 
391.2   purchases occurring after December 31, 2001. 
391.3      Sec. 18.  Minnesota Statutes 2000, section 297A.99, 
391.4   subdivision 9, is amended to read: 
391.5      Subd. 9.  [ENFORCEMENT; COLLECTION; AND ADMINISTRATION.] 
391.6   (a) The commissioner of revenue shall collect the taxes subject 
391.7   to this section.  The commissioner may collect the tax with the 
391.8   state sales and use tax.  All taxes under this section are 
391.9   subject to the same penalties, interest, and enforcement 
391.10  provisions as apply to the state sales and use tax. 
391.11     (b) A request for a refund of state sales tax paid in 
391.12  excess of the amount of tax legally due includes a request for a 
391.13  refund of the political subdivision taxes paid on the goods or 
391.14  services.  The commissioner shall refund to the taxpayer the 
391.15  full amount of the political subdivision taxes paid on exempt 
391.16  sales or use. 
391.17     (c) A political subdivision that is collecting and 
391.18  administering its own sales and use tax before January 1, 1998, 
391.19  may elect to be exempt from this subdivision and subdivision 11. 
391.20     [EFFECTIVE DATE.] This section is effective January 1, 2002.
391.21     Sec. 19.  [297A.995] [UNIFORM SALES AND USE TAX 
391.22  ADMINISTRATION ACT.] 
391.23     Subdivision 1.  [TITLE.] This section may be cited as the 
391.24  Uniform Sales and Use Tax Administration Act. 
391.25     Subd. 2.  [DEFINITIONS.] As used in this section: 
391.26     (a) "Agreement" means the Streamlined Sales and Use Tax 
391.27  Agreement. 
391.28     (b) "Certified automated system" means software certified 
391.29  jointly by the states that are signatories to the agreement to 
391.30  calculate the tax imposed by each jurisdiction on a transaction, 
391.31  determine the amount of tax to remit to the appropriate state, 
391.32  and maintain a record of the transaction. 
391.33     (c) "Certified service provider" means an agent certified 
391.34  jointly by the states that are signatories to the agreement to 
391.35  perform all of the seller's sales tax functions. 
391.36     Subd. 3.  [LEGISLATIVE FINDING.] The legislature finds that 
392.1   this state should enter into an agreement with one or more 
392.2   states to simplify and modernize sales and use tax 
392.3   administration in order to substantially reduce the burden of 
392.4   tax compliance for all sellers and for all types of commerce. 
392.5      Subd. 4.  [AUTHORITY TO ENTER AGREEMENT.] The commissioner 
392.6   of revenue is authorized and directed to enter into the 
392.7   agreement with one or more states to simplify and modernize 
392.8   sales and use tax administration in order to substantially 
392.9   reduce the burden of tax compliance for all sellers and for all 
392.10  types of commerce.  In furtherance of the agreement, the 
392.11  commissioner is authorized to act jointly with other states that 
392.12  are members of the agreement to establish standards for 
392.13  certification of a certified service provider and certified 
392.14  automated system and establish performance standards for 
392.15  multistate sellers. 
392.16     The commissioner is further authorized to take other 
392.17  actions reasonably required to implement the provisions set 
392.18  forth in this article.  Other actions authorized by this section 
392.19  include, but are not limited to, the adoption of rules and 
392.20  regulations and the joint procurement, with other member states, 
392.21  of goods and services in furtherance of the cooperative 
392.22  agreement. 
392.23     The commissioner or the commissioner's designee is 
392.24  authorized to represent this state before the other states that 
392.25  are signatories to the agreement. 
392.26     Subd. 5.  [RELATIONSHIP TO STATE LAW.] No provision of the 
392.27  agreement authorized by this article in whole or part 
392.28  invalidates or amends any provision of the law of this state.  
392.29  Adoption of the agreement by this state does not amend or modify 
392.30  any law of this state.  Implementation of any condition of the 
392.31  agreement in this state, whether adopted before, at, or after 
392.32  membership of this state in the agreement, must be by the action 
392.33  of this state. 
392.34     Subd. 6.  [AGREEMENT REQUIREMENTS.] The commissioner of 
392.35  revenue shall not enter into the agreement unless the agreement 
392.36  requires each state to abide by the following requirements: 
393.1      (a) [UNIFORM STATE RATE.] The agreement must set 
393.2   restrictions to achieve more uniform state rates through the 
393.3   following: 
393.4      (1) limiting the number of state rates; 
393.5      (2) eliminating maximums on the amount of state tax that is 
393.6   due on a transaction; and 
393.7      (3) eliminating thresholds on the application of state tax. 
393.8      (b) [UNIFORM STANDARDS.] The agreement must establish 
393.9   uniform standards for the following: 
393.10     (1) the sourcing of transactions to taxing jurisdictions; 
393.11     (2) the administration of exempt sales; 
393.12     (3) the allowances a seller can take for bad debts; and 
393.13     (4) sales and use tax returns and remittances. 
393.14     (c)  [UNIFORM DEFINITIONS.] The agreement must require 
393.15  states to develop and adopt uniform definitions of sales and use 
393.16  tax terms.  The definitions must enable a state to preserve its 
393.17  ability to make policy choices not inconsistent with the uniform 
393.18  definitions. 
393.19     (d) [CENTRAL REGISTRATION.] The agreement must provide a 
393.20  central, electronic registration system that allows a seller to 
393.21  register to collect and remit sales and use taxes for all 
393.22  signatory states. 
393.23     (e) [NO NEXUS ATTRIBUTION.] The agreement must provide that 
393.24  registration with the central registration system and the 
393.25  collection of sales and use taxes in the signatory states will 
393.26  not be used as a factor in determining whether the seller has 
393.27  nexus with a state for any tax. 
393.28     (f) [LOCAL SALES AND USE TAXES.] The agreement must provide 
393.29  for reduction of the burdens of complying with local sales and 
393.30  use taxes through the following: 
393.31     (1) restricting and eliminating variances between the state 
393.32  and local tax bases; 
393.33     (2) requiring states to administer any sales and use taxes 
393.34  levied by local jurisdictions within the state so that sellers 
393.35  collecting and remitting these taxes will not have to register 
393.36  or file returns with, remit funds to, or be subject to 
394.1   independent audits from local taxing jurisdictions; 
394.2      (3) restricting the frequency of changes in the local sales 
394.3   and use tax rates and setting effective dates for the 
394.4   application of local jurisdictional boundary changes to local 
394.5   sales and use taxes; and 
394.6      (4) providing notice of changes in local sales and use tax 
394.7   rates and of changes in the boundaries of local taxing 
394.8   jurisdictions. 
394.9      (g) [MONETARY ALLOWANCES.] The agreement must outline any 
394.10  monetary allowances that are to be provided by the states to 
394.11  sellers or certified service providers. 
394.12     (h) [STATE COMPLIANCE.] The agreement must require each 
394.13  state to certify compliance with the terms of the agreement 
394.14  prior to joining and to maintain compliance, under the laws of 
394.15  the member state, with all provisions of the agreement while a 
394.16  member. 
394.17     (i) [CONSUMER PRIVACY.] The agreement must require each 
394.18  state to adopt a uniform policy for certified service providers 
394.19  that protects the privacy of consumers and maintains the 
394.20  confidentiality of tax information. 
394.21     (j) [ADVISORY COUNCILS.] The agreement must provide for the 
394.22  appointment of an advisory council of private sector 
394.23  representatives and an advisory council of nonmember state 
394.24  representatives to consult with in the administration of the 
394.25  agreement. 
394.26     Subd. 7.  [COOPERATING SOVEREIGNS.] The agreement 
394.27  authorized by this article is an accord among individual 
394.28  cooperating sovereigns in furtherance of their governmental 
394.29  functions.  The agreement provides a mechanism among the member 
394.30  states to establish and maintain a cooperative, simplified 
394.31  system for the application and administration of sales and use 
394.32  taxes under the duly adopted law of each member state. 
394.33     Subd. 8.  [LIMITED BINDING AND BENEFICIAL EFFECT.] (a) The 
394.34  agreement authorized by this article binds and inures only to 
394.35  the benefit of this state and the other member states.  No 
394.36  person, other than a member state, is an intended beneficiary of 
395.1   the agreement.  Any benefit to a person other than a state is 
395.2   established by the law of this state and the other member states 
395.3   and not by the terms of the agreement. 
395.4      (b) Consistent with paragraph (a), no person shall have any 
395.5   cause of action or defense under the agreement or by virtue of 
395.6   this state's approval of the agreement.  No person may 
395.7   challenge, in any action brought under any provision of law, any 
395.8   action or inaction by any department, agency, or other 
395.9   instrumentality of this state, or any political subdivision of 
395.10  this state, on the ground that the action or inaction is 
395.11  inconsistent with the agreement. 
395.12     (c) No law of this state, or its application, may be 
395.13  declared invalid as to any person or circumstance on the ground 
395.14  that the provision or application is inconsistent with the 
395.15  agreement. 
395.16     Subd. 9.  [SELLER AND THIRD PARTY LIABILITY.] (a) A 
395.17  certified service provider is the agent of a seller, with whom 
395.18  the certified service provider has contracted, for the 
395.19  collection and remittance of sales and use taxes.  As the 
395.20  seller's agent, the certified service provider is liable for 
395.21  sales and use tax due each member state on all sales 
395.22  transactions it processes for the seller except as set out in 
395.23  this section. 
395.24     A seller that contracts with a certified service provider 
395.25  is not liable to the state for sales or use tax due on 
395.26  transactions processed by the certified service provider unless 
395.27  the seller misrepresented the type of items it sells or 
395.28  committed fraud.  In the absence of probable cause to believe 
395.29  that the seller has committed fraud or made a material 
395.30  misrepresentation, the seller is not subject to audit on the 
395.31  transactions processed by the certified service provider.  A 
395.32  seller is subject to audit for transactions not processed by the 
395.33  certified service provider.  The member states acting jointly 
395.34  may perform a system check of the seller and review the seller's 
395.35  procedures to determine if the certified service provider's 
395.36  system is functioning properly and the extent to which the 
396.1   seller's transactions are being processed by the certified 
396.2   service provider. 
396.3      (b) A person that provides a certified automated system is 
396.4   responsible for the proper functioning of that system and is 
396.5   liable to the state for underpayments of tax attributable to 
396.6   errors in the functioning of the certified automated system.  A 
396.7   seller that uses a certified automated system remains 
396.8   responsible and is liable to the state for reporting and 
396.9   remitting tax. 
396.10     (c) A seller that has a proprietary system for determining 
396.11  the amount of tax due on transactions and has signed an 
396.12  agreement establishing a performance standard for that system is 
396.13  liable for the failure of the system to meet the performance 
396.14  standard. 
396.15     [EFFECTIVE DATE.] This section is effective the day 
396.16  following final enactment. 
396.17                             ARTICLE 16
396.18                           SPECIAL TAXES 
396.19     Section 1.  Minnesota Statutes 2000, section 239.101, 
396.20  subdivision 3, is amended to read: 
396.21     Subd. 3.  [PETROLEUM INSPECTION FEE.] A person who owns 
396.22  petroleum products held in storage at a pipeline terminal, river 
396.23  terminal, or refinery shall pay a petroleum inspection fee of 85 
396.24  cents for every 1,000 gallons sold or withdrawn from the 
396.25  terminal or refinery storage An inspection fee is imposed on 
396.26  petroleum products when received by the first licensed 
396.27  distributor, and on petroleum products received and held for 
396.28  sale or use by any person when the petroleum products have not 
396.29  previously been received by a licensed distributor.  The 
396.30  petroleum inspection fee is 85 cents for every 1,000 gallons 
396.31  received.  The commissioner of revenue shall collect the fee.  
396.32  The revenue from the fee must first be applied to cover the 
396.33  amounts appropriated for petroleum product quality inspection 
396.34  expenses, for the inspection and testing of petroleum product 
396.35  measuring equipment, and for petroleum supply monitoring under 
396.36  chapter 216C.  
397.1      The commissioner of revenue shall credit a person for 
397.2   inspection fees previously paid in error or for any material 
397.3   exported or sold for export from the state upon filing of a 
397.4   report as prescribed by the commissioner of revenue.  The 
397.5   commissioner of revenue may collect the inspection fee along 
397.6   with any taxes due under chapter 296A.  
397.7      [EFFECTIVE DATE.] This section is effective for petroleum 
397.8   products received on or after July 1, 2001. 
397.9      Sec. 2.  [239.77] [BIODIESEL CONTENT MANDATE.] 
397.10     Subdivision 1.  [BIODIESEL FUEL OIL DESCRIBED.] "Biodiesel 
397.11  fuel oil" means a biodegradable, combustible liquid fuel derived 
397.12  from vegetable oils that meets ASTM specification PS 121-99 and 
397.13  is suitable for blending with diesel fuel oil for use in 
397.14  internal combustion diesel engines. 
397.15     Subd. 2.  [CONTENT REQUIREMENTS.] (a) From July 1, 2002, 
397.16  through June 30, 2006, all diesel fuel oil sold or offered for 
397.17  sale in Minnesota for use in internal combustion engines must 
397.18  contain at least 2.0 percent biodiesel fuel oil by volume. 
397.19     (b) On and after July 1, 2006, all diesel fuel oil sold or 
397.20  offered for sale in Minnesota for use in internal combustion 
397.21  engines must contain at least 5.0 percent biodiesel fuel oil by 
397.22  volume. 
397.23     Subd. 3.  [EXCEPTION; CERTAIN ELECTRIC GENERATING 
397.24  PLANTS.] The provisions of this section shall not apply to any 
397.25  diesel motor in the state of Minnesota located at an electric 
397.26  generating plant regulated by the nuclear regulatory commission 
397.27  until the use of biodiesel fuel has been approved by the nuclear 
397.28  regulatory commission. 
397.29     Sec. 3.  Minnesota Statutes 2000, section 287.035, is 
397.30  amended to read: 
397.31     287.035 [IMPOSITION OF TAX.] 
397.32     A tax of 23 cents is imposed upon each $100, or fraction 
397.33  thereof, of the debt or portion of a debt that is secured by any 
397.34  recorded mortgage of real property located in this state at the 
397.35  rate of .0023.  The person liable for the tax is the mortgagee.  
397.36  The tax is not imposed on the lawful interest amounts that may 
398.1   accrue with respect to a debt. 
398.2      [EFFECTIVE DATE.] This section is effective for documents 
398.3   executed, recorded, or registered after June 30, 2001. 
398.4      Sec. 4.  Minnesota Statutes 2000, section 287.04, is 
398.5   amended to read: 
398.6      287.04 [EXEMPTIONS.] 
398.7      The tax imposed by section 287.035 does not apply to:  
398.8      (a) A decree of marriage dissolution or an instrument made 
398.9   pursuant to it.  
398.10     (b) A mortgage given to correct a misdescription of the 
398.11  mortgaged property. 
398.12     (c) A mortgage or other instrument that adds additional 
398.13  security for the same debt for which mortgage registry tax has 
398.14  been paid.  
398.15     (d) A contract for the conveyance of any interest in real 
398.16  property, including a contract for deed. 
398.17     (e) A mortgage secured by real property subject to the 
398.18  minerals production tax of sections 298.24 to 298.28. 
398.19     (f) The principal amount of bonds or other obligations 
398.20  issued by the St. Paul port authority under its common revenue 
398.21  bond fund if each of the following conditions are met. 
398.22     (1) The bonds or other obligations are secured by a 
398.23  mortgage on property, title to which is held by the political 
398.24  subdivision. 
398.25     (2) The mortgage is recorded after May 19, 1993. 
398.26     (3) The bonds or other obligations are either (i)  
398.27  outstanding on May 19, 1993, or (ii) issued in exchange for or 
398.28  to otherwise refund bonds or other obligations the original 
398.29  series of which were issued before May 19, 1993. 
398.30     (g) Mortgages taken in good faith by persons or 
398.31  corporations whose property is expressly exempted from taxation 
398.32  by section 272.02, subdivisions 2 to 8, or mortgagees that are 
398.33  fraternal benefit societies subject to section 64B.24. 
398.34     (h) A mortgage amendment or extension, as defined in 
398.35  section 287.01. 
398.36     (i) An agricultural mortgage if the proceeds of the loan 
399.1   secured by the mortgage are used (1) to acquire or improve real 
399.2   property classified under section 273.13, subdivision 23, 
399.3   paragraph (a) or (b), clause (1), (2), or (3); or (2) in the 
399.4   production of agricultural products as defined in section 
399.5   273.13, subdivision 23, paragraph (e), and the mortgagor signs a 
399.6   statement provided by the county stating that the proceeds of 
399.7   the loan secured by the mortgage will be used for the purposes 
399.8   listed under this subdivision. 
399.9      [EFFECTIVE DATE.] This section is effective for documents 
399.10  recorded on or after July 1, 2001. 
399.11     Sec. 5.  Minnesota Statutes 2000, section 287.20, 
399.12  subdivision 2, is amended to read: 
399.13     Subd. 2.  [CONSIDERATION.] (a) "Consideration" means 
399.14  generally the total monetary value that is given in return for a 
399.15  conveyance of real property in this state and includes all 
399.16  lump-sum payments, all prior or future installment payments that 
399.17  are required under the agreement between the parties, and the 
399.18  fair market value of any property taken, or to be taken, in 
399.19  exchange. 
399.20     (b) Consideration does not include the reasonable and 
399.21  lawful amounts of interest paid for the privilege of paying the 
399.22  purchase price in installments and the fair market value of any 
399.23  items of intangible personal property that are conveyed by the 
399.24  taxable instrument. 
399.25     (c) Consideration does not include the amount paid for the 
399.26  personal property located on the real property being conveyed 
399.27  and transferred as a part of the total consideration, except 
399.28  that the amount paid for the personal property located on the 
399.29  real property being conveyed must be included if the real 
399.30  property being conveyed is a one-, two-, or three-unit 
399.31  residential structure. 
399.32     (d) When a conveyance of real property is made pursuant to 
399.33  a contract for deed, the consideration is the price for the real 
399.34  property reflected in the contract; except that, subject to the 
399.35  limitations under section 287.221, when the conveyance is made 
399.36  by a person engaged in the business of land sales or 
400.1   construction of buildings and other improvements, or by an 
400.2   affiliated person if the contract for deed, or other agreement 
400.3   entered into as a condition to the seller executing the 
400.4   contract, requires the property to be improved during the term 
400.5   of the contract and the price of the real property as reflected 
400.6   in the contract does not include the consideration for the 
400.7   required improvements, then the consideration is the amount paid 
400.8   for the land price for the real property as reflected in the 
400.9   contract and the consideration for the required improvements 
400.10  added during the term of the contract.  By January 1, 2001, the 
400.11  commissioner shall adopt rules that define the phrases "engaged 
400.12  in the business of land sales or construction of buildings and 
400.13  other improvements" and "affiliated person" as those phrases are 
400.14  used in this paragraph. 
400.15     (e) "Total consideration" has the same meaning as 
400.16  consideration. 
400.17     (f) "Consideration, exclusive of the value of any lien or 
400.18  encumbrance remaining at the time of sale" or "net 
400.19  consideration" means the amount of consideration as reduced by 
400.20  the amount outstanding under any lien that attached to the real 
400.21  property prior to the time of sale and that is not released or 
400.22  satisfied as a result of the sale. 
400.23     [EFFECTIVE DATE.] This section is effective for deeds 
400.24  recorded on or after July 1, 2001. 
400.25     Sec. 6.  Minnesota Statutes 2000, section 287.21, 
400.26  subdivision 1, is amended to read: 
400.27     Subdivision 1.  [DETERMINATION OF TAX.] (a) A tax is 
400.28  imposed on each deed or instrument by which any real property in 
400.29  this state is granted, assigned, transferred, or otherwise 
400.30  conveyed.  The tax applies against the net consideration. 
400.31     (b) The tax is determined in the following manner:  (1) 
400.32  when transfers are made by instruments pursuant to mergers, 
400.33  consolidations, sales, or transfers of substantially all of the 
400.34  assets of the entities as defined in section 287.20, subdivision 
400.35  9, pursuant to plans of reorganization, the tax is $1.65; (2) 
400.36  when there is no consideration or when the consideration, 
401.1   exclusive of the value of any lien or encumbrance remaining 
401.2   thereon at the time of sale, is $500 or less, the tax is $1.65; 
401.3   or (3) when the consideration, exclusive of the value of any 
401.4   lien or encumbrance remaining at the time of sale, exceeds $500, 
401.5   the tax is $1.65 plus $1.65 for each additional $500 or fraction 
401.6   of that amount .0033 of the net consideration. 
401.7      (c) The tax is due at the time a taxable deed or instrument 
401.8   is presented for recording. 
401.9      [EFFECTIVE DATE.] This section is effective for documents 
401.10  executed, recorded, or registered after June 30, 2001. 
401.11     Sec. 7.  Minnesota Statutes 2000, section 296A.07, 
401.12  subdivision 4, is amended to read: 
401.13     Subd. 4.  [TRANSIT SYSTEM EXEMPT EXEMPTIONS.] The 
401.14  provisions of subdivision 1 do not apply to gasoline purchased 
401.15  by: 
401.16     (1) a transit system or transit provider receiving 
401.17  financial assistance or reimbursement under section 174.24, 
401.18  256B.0625, subdivision 17, or 473.384; or 
401.19     (2) an ambulance service licensed under chapter 144E. 
401.20     Sec. 8.  Minnesota Statutes 2000, section 296A.07, is 
401.21  amended by adding a subdivision to read: 
401.22     Subd. 5.  [ANNUAL GASOLINE TAX RATE ADJUSTMENT.] (a) Before 
401.23  April 1 of each year, the commissioner of revenue shall 
401.24  recompute and publish the rate of the gasoline excise tax.  The 
401.25  new rate per gallon must be calculated by multiplying the rate 
401.26  in effect at the time of the calculation by an amount obtained 
401.27  under paragraph (b).  The new rate must be rounded to the 
401.28  nearest 0.1 cent and is effective on April 1 of each year. 
401.29     (b) Divide the annual average United States Consumer Price 
401.30  Index for all urban consumers, United States city average, as 
401.31  determined by the United States Department of Labor for the 
401.32  previous year by that annual average for the year before the 
401.33  previous year. 
401.34     [EFFECTIVE DATE.] This section is effective January 1, 2003.
401.35     Sec. 9.  Minnesota Statutes 2000, section 296A.08, 
401.36  subdivision 1, is amended to read: 
402.1      Subdivision 1.  [TAX IMPOSED.] There is imposed an excise 
402.2   tax on all special fuel at the rates specified in subdivision 
402.3   2.  For purposes of this section, "owner or operator" means the 
402.4   operation of licensed motor vehicles, whether loaded or empty, 
402.5   whether for compensation or not for compensation, and whether 
402.6   owned by or leased to the motor carrier who operates them or 
402.7   causes them to be operated. 
402.8      (a) For undyed diesel fuel, biodiesel fuel oil, and undyed 
402.9   kerosene, the tax is imposed on the first licensed distributor 
402.10  who received the product in Minnesota. 
402.11     (b) For dyed fuel being used illegally in a licensed motor 
402.12  vehicle, the tax is imposed on the owner or operator of the 
402.13  motor vehicle. 
402.14     (c) For dyed fuel used in a motor vehicle but subject to a 
402.15  federal exemption, although no federal tax may be imposed, the 
402.16  owner or operator of the vehicle is liable for the state tax. 
402.17     (d) For other fuels, including jet fuel, propane, and 
402.18  compressed natural gas, the tax is imposed on the distributor, 
402.19  special fuel dealer, or bulk purchaser. 
402.20     (e) Any person delivering special fuel on which the excise 
402.21  tax has not previously been paid, into the supply tank of an 
402.22  aircraft or a licensed motor vehicle shall report such delivery 
402.23  and shall pay, or collect and pay the excise tax on the special 
402.24  fuel so delivered to the commissioner. 
402.25     Sec. 10.  Minnesota Statutes 2000, section 296A.08, 
402.26  subdivision 3, is amended to read: 
402.27     Subd. 3.  [TRANSIT SYSTEM EXEMPT EXEMPTIONS.] The 
402.28  provisions of subdivisions 1 and 2 do not apply to special fuel 
402.29  or alternative fuels purchased by: 
402.30     (1) a transit system or transit provider receiving 
402.31  financial assistance or reimbursement under section 174.24, 
402.32  256B.0625, subdivision 17, or 473.384; or 
402.33     (2) an ambulance service licensed under chapter 144E.  
402.34     Sec. 11.  Minnesota Statutes 2000, section 296A.08, is 
402.35  amended by adding a subdivision to read: 
402.36     Subd. 7.  [ANNUAL SPECIAL FUEL TAX RATE ADJUSTMENT.] (a) 
403.1   Before April 1 of each year, the commissioner of revenue shall 
403.2   recompute and publish the rate of the special fuel tax.  The new 
403.3   rate must be calculated by multiplying the rate in effect at the 
403.4   time of the calculation by an amount obtained under paragraph 
403.5   (b).  The new rate must be rounded to the nearest 0.1 cent and 
403.6   is effective on April 1 of each year. 
403.7      (b) Divide the annual average United States Consumer Price 
403.8   Index for all urban consumers, United States city average, as 
403.9   determined by the United States Department of Labor for the 
403.10  previous year by that annual average for the year before the 
403.11  previous year. 
403.12     [EFFECTIVE DATE.] This section is effective January 1, 2003.
403.13     Sec. 12.  Minnesota Statutes 2000, section 296A.15, 
403.14  subdivision 1, is amended to read: 
403.15     Subdivision 1.  [MONTHLY GASOLINE REPORT; SHRINKAGE 
403.16  ALLOWANCE.] (a) Except as provided in paragraph (e), on or 
403.17  before the 23rd day of each month, every person who is required 
403.18  to pay a gasoline tax shall file with the commissioner a report, 
403.19  in the form and manner prescribed by the commissioner, showing 
403.20  the number of gallons of petroleum products received by the 
403.21  reporter during the preceding calendar month, and other 
403.22  information the commissioner may require.  A written report is 
403.23  deemed to have been filed as required in this subdivision if 
403.24  postmarked on or before the 23rd day of the month in which the 
403.25  tax is payable. 
403.26     (b) The number of gallons of gasoline must be reported in 
403.27  United States standard liquid gallons, 231 cubic inches, except 
403.28  that the commissioner may upon written application and for cause 
403.29  shown permit the distributor to report the number of gallons of 
403.30  gasoline as corrected to a temperature of 60-degrees 
403.31  Fahrenheit.  If the application is granted, all gasoline covered 
403.32  in the application and allowed by the commissioner must continue 
403.33  to be reported by the distributor on the adjusted basis for a 
403.34  period of one year from the date of the granting of the 
403.35  application.  The number of gallons of petroleum products other 
403.36  than gasoline must be reported as originally invoiced.  Each 
404.1   report must show separately the number of gallons of aviation 
404.2   gasoline received by the reporter during each calendar month. 
404.3      (c) Each report must also include the amount of gasoline 
404.4   tax on gasoline received by the reporter during the preceding 
404.5   month.  In computing the tax a deduction of three 2.5 percent of 
404.6   the quantity of gasoline received by a distributor shall be made 
404.7   for evaporation and loss.  At the time of reporting, the 
404.8   reporter shall submit satisfactory evidence that one-third of 
404.9   the three 2.5 percent deduction has been credited or paid to 
404.10  dealers on quantities sold to them. 
404.11     (d) Each report shall contain a confession of judgment for 
404.12  the amount of the tax shown due to the extent not timely paid. 
404.13     (e) Under certain circumstances and with the approval of 
404.14  the commissioner, taxpayers may be allowed to file reports 
404.15  annually. 
404.16     [EFFECTIVE DATE.] This section is effective for reports due 
404.17  on or after July 1, 2001. 
404.18     Sec. 13.  Minnesota Statutes 2000, section 297B.09, 
404.19  subdivision 1, is amended to read: 
404.20     Subdivision 1.  [GENERAL FUND SHARE.] Money collected and 
404.21  received under this chapter must be deposited as provided in 
404.22  this subdivision.  
404.23     Thirty-two percent of the money collected and received 
404.24  under this chapter after June 30, 2001, must be deposited in the 
404.25  highway user tax distribution fund, and the remaining 68 percent 
404.26  of the money must be deposited in the general fund.  
404.27     Sec. 14.  Minnesota Statutes 2000, section 297H.04, is 
404.28  amended by adding a subdivision to read: 
404.29     Subd. 4.  [DISPOSAL WITH MIXED WASTE; RATE.] Nonmixed 
404.30  municipal solid waste that is separately collected or processed, 
404.31  but is disposed of within the permitted boundaries of a land 
404.32  disposal facility that is also actively accepting and disposing 
404.33  of mixed municipal solid waste, shall be taxed at the rate for 
404.34  mixed municipal solid waste, unless the facility owner and 
404.35  operator can demonstrate a physical separation between the mixed 
404.36  municipal solid waste disposal area and nonmixed municipal solid 
405.1   waste disposal area, such that any air or liquid emissions being 
405.2   collected from the disposal areas are collected separately. 
405.3      [EFFECTIVE DATE.] This section is effective for waste 
405.4   disposed of after June 30, 2001. 
405.5      Sec. 15.  [297H.14] [MIXED MUNICIPAL SOLID WASTE PROCESSING 
405.6   TAX CREDIT.] 
405.7      Subdivision 1.  [DEFINITIONS.] (a) "Commissioner" means the 
405.8   commissioner of revenue.  
405.9      (b) "Processed" means mixed municipal solid waste that has 
405.10  been: 
405.11     (1) burned for energy recovery; or 
405.12     (2) processed into usable compost or refuse derived fuel. 
405.13     (c) "Resource recovery facility" has the meaning given it 
405.14  in section 115A.03, subdivision 28.  
405.15     Subd. 2.  [TAX CREDIT.] (a) The commissioner shall pay 
405.16  counties a processing tax credit for each ton of mixed municipal 
405.17  solid waste that is generated in the county and processed at a 
405.18  resource recovery facility located in Minnesota.  The processing 
405.19  tax credit shall be $10 for each ton of mixed municipal solid 
405.20  waste processed.  
405.21     (b) By the last day of October, January, April, and July, 
405.22  each county claiming the credit shall file a claim for payment 
405.23  with the commissioner for the three previous months certifying 
405.24  the number of tons of mixed municipal solid waste that were 
405.25  generated in the county and processed at a resource recovery 
405.26  facility.  The commissioner shall pay the processing tax credits 
405.27  by November 15, February 15, May 15, and August 15 each year.  
405.28     (c) If the total amount for which all counties are eligible 
405.29  in a quarter exceeds the amount available for payment, the 
405.30  commissioner shall make the payments on a pro rata basis.  
405.31     (d) All of the credit received by a county must be used to 
405.32  pay for resource recovery services.  At least 50 percent of the 
405.33  credit received by a county must be used to lower the tipping 
405.34  fee for waste to be processed at a resource recovery facility. 
405.35     Subd. 3.  [EXPIRATION DATE.] The tax credit in this section 
405.36  expires on July 1, 2005.  For waste delivered to a resource 
406.1   recovery facility from April 1, 2005, to June 30, 2005, a county 
406.2   must submit payment claims by July 31, 2005.  The commissioner 
406.3   shall make the final mixed municipal solid waste processing tax 
406.4   credit payments by August 15, 2005. 
406.5      Subd. 4.  [APPROPRIATION.] $12,000,000 in fiscal year 2002 
406.6   and $12,000,000 in fiscal year 2003 are appropriated from the 
406.7   environmental fund to the commissioner of revenue for mixed 
406.8   municipal solid waste processing tax credits under this section. 
406.9      [EFFECTIVE DATE.] This section is effective on July 1, 
406.10  2001, and applies to waste delivered to a resource recovery 
406.11  facility beginning July 1, 2001. 
406.12     Sec. 16.  Minnesota Statutes 2000, section 297I.40, 
406.13  subdivision 1, is amended to read: 
406.14     Subdivision 1.  [REQUIREMENT TO PAY.] On or before April 1 
406.15  March 15, June 1 15, September 15, and December 1 of each year 
406.16  15 of the current year, every taxpayer subject to tax under 
406.17  section 297I.05, subdivisions 1 to 6, and 12, paragraphs (a), 
406.18  clauses (1) to (5), (b), and (e), must pay to the commissioner 
406.19  an installment equal to one-third one-fourth of the insurer's 
406.20  total estimated tax for the current year. 
406.21     [EFFECTIVE DATE.] This section is effective for payments 
406.22  required to be made after December 31, 2001. 
406.23     Sec. 17.  Minnesota Statutes 2000, section 297I.40, 
406.24  subdivision 2, is amended to read: 
406.25     Subd. 2.  [AMOUNT OF REQUIRED INSTALLMENT.] The amount of 
406.26  any required installment is one-third one-fourth of the lesser 
406.27  of 
406.28     (1) 80 percent of the tax imposed for the current year, or 
406.29     (2) 100 percent of the tax paid for the previous year. 
406.30     [EFFECTIVE DATE.] This section is effective for payments 
406.31  required to be made after December 31, 2001. 
406.32     Sec. 18.  Minnesota Statutes 2000, section 297I.40, 
406.33  subdivision 7, is amended to read: 
406.34     Subd. 7.  [APRIL MARCH ESTIMATED PAYMENT.] A taxpayer who 
406.35  claims a refund of an overpayment on an original return may 
406.36  elect to have all or any portion of the overpayment applied as a 
407.1   credit to the April 1 March 15 estimated tax payment for the 
407.2   year following the year of the return.  The credit is considered 
407.3   applied on April 1 March 15.  Notwithstanding section 297I.80, 
407.4   the amount credited does not bear interest. 
407.5      [EFFECTIVE DATE.] This section is effective for payments 
407.6   required to be made after December 31, 2001. 
407.7      Sec. 19.  Laws 2000, chapter 490, article 7, section 3, is 
407.8   amended to read: 
407.9      Sec. 3.  [APPROPRIATION.] 
407.10     For fiscal year 2001, $149,804,000 is appropriated from the 
407.11  general fund to the highway user tax distribution fund.  For 
407.12  fiscal year 2002, $161,723,000 is appropriated from the general 
407.13  fund to the highway user tax distribution fund. 
407.14     Sec. 20.  [APPROPRIATION.] 
407.15     A one-time appropriation of $140,000 is appropriated for 
407.16  fiscal year 2002 from the highway user tax distribution fund to 
407.17  the commissioner of revenue for systems modifications associated 
407.18  with petroleum tax reform. 
407.19     Sec. 21.  [REPEALER.] 
407.20     Minnesota Statutes 2000, section 296A.16, subdivision 6, is 
407.21  repealed. 
407.22     [EFFECTIVE DATE.] This section is effective the day 
407.23  following final enactment. 
407.24                             ARTICLE 17
407.25               ELECTRONIC FILING AND PAYING OF TAXES 
407.26     Section 1.  Minnesota Statutes 2000, section 115B.24, 
407.27  subdivision 2, is amended to read: 
407.28     Subd. 2.  [DECLARATIONS OF ESTIMATED TAX.] For 1983, every 
407.29  generator of hazardous waste required to pay a tax pursuant to 
407.30  section 115B.22 shall make a declaration of estimated hazardous 
407.31  waste generated for the last six months of calendar year 1983 if 
407.32  the tax can reasonably be estimated to exceed $500.  The 
407.33  declaration of the estimated tax shall be filed by October 15, 
407.34  1983.  The amount of estimated tax with respect to which a 
407.35  declaration is required shall be paid in two equal installments 
407.36  by October 15, 1983 and January 15, 1984.  For 1984 and 
408.1   subsequent years, every generator of hazardous waste required to 
408.2   pay a tax pursuant to section 115B.22 shall make a declaration 
408.3   of estimated hazardous waste generated for the calendar year if 
408.4   the tax can reasonably be expected to be in excess of $1,000.  
408.5   The declaration of estimated tax shall be filed by March 15.  
408.6   The amount of estimated tax with respect to which a declaration 
408.7   is required shall be paid in four equal installments on or 
408.8   before the 15th day of March, June, September, and December.  
408.9      An amendment of a declaration may be filed in any interval 
408.10  between installment dates prescribed above but only one 
408.11  amendment may be filed in each interval.  If an amendment of a 
408.12  declaration is filed, the amount of each remaining installment 
408.13  shall be the amount which would have been payable if the new 
408.14  estimate had been made when the first estimate for the calendar 
408.15  year was made, increased or decreased, as the case may be, by 
408.16  the amount computed by dividing 
408.17     (1) the difference between (A) the amount of estimated tax 
408.18  required to be paid before the date on which the amendment was 
408.19  made, and (B) the amount of estimated tax which would have been 
408.20  required to be paid before that date if the new estimate had 
408.21  been made when the first estimate was made, by 
408.22     (2) the number of installments remaining to be paid on or 
408.23  after the date on which the amendment is made.  
408.24     The commissioner of revenue may grant a reasonable 
408.25  extension of time for filing any declaration but the extension 
408.26  shall not be for more than six months.  
408.27     If the aggregate amount of estimated tax payments made 
408.28  during a the fiscal year ending June 30, 2001, is equal to or 
408.29  exceeds $80,000, or $40,000 for the fiscal year ending June 30, 
408.30  2002, $20,000 for the fiscal year ending June 30, 2003, and 
408.31  $10,000 for the fiscal year ending June 30, 2004, and each 
408.32  fiscal year ending June 30 thereafter, all estimated tax 
408.33  payments in the subsequent calendar year must be paid 
408.34  by electronic means of a funds transfer as defined in section 
408.35  336.4A-104, paragraph (a).  The funds transfer payment date, as 
408.36  defined in section 336.4A-401, must be on or before the date the 
409.1   estimated tax payment is due.  If the date the estimated tax 
409.2   payment is due is not a funds transfer business day, as defined 
409.3   in section 336.4A-105, paragraph (a), clause (4), the payment 
409.4   date must be on or before the funds transfer business day next 
409.5   following the date the estimated tax payment is due. 
409.6      [EFFECTIVE DATE.] This section is effective for payments 
409.7   due on or after July 1, 2001. 
409.8      Sec. 2.  Minnesota Statutes 2000, section 270.271, 
409.9   subdivision 1, is amended to read: 
409.10     Subdivision 1.  [DATE OF DELIVERY.] When a document, 
409.11  including a return, claim, or statement, is required to be 
409.12  filed, or a payment is required to be made to the commissioner 
409.13  within a prescribed period, or on or before a prescribed date, 
409.14  and if the document or payment is delivered by electronic means 
409.15  or by United States mail after the period or the date to the 
409.16  place prescribed for filing or payment, then the date of 
409.17  delivery or of payment is the date of the confirmation 
409.18  time-and-date stamp of the transaction, if delivered by 
409.19  electronic means, or the date of the United States postmark 
409.20  stamped on the cover in which the document or payment is mailed, 
409.21  if delivered by United States mail shall be considered the date 
409.22  of delivery or of payment, as the case may be. 
409.23     [EFFECTIVE DATE.] This section is effective for returns and 
409.24  payments due on or after July 1, 2001. 
409.25     Sec. 3.  Minnesota Statutes 2000, section 270.271, 
409.26  subdivision 3, is amended to read: 
409.27     Subd. 3.  [CONFIRMATION OF ELECTRONIC FILING AND PAYMENT 
409.28  AND UNITED STATES POSTAL SERVICE POSTMARK.] The confirmation 
409.29  numbers and confirmation time-and-date stamps received by the 
409.30  taxpayer following electronic payment or filing is proof of the 
409.31  payment authorization and filing dates.  Only the postmark of 
409.32  the United States Postal Service, rather than those of private 
409.33  postage meters, qualifies as proof of timely mailing under this 
409.34  section.  If the document or payment is sent by United States 
409.35  registered mail, the date of registration shall be treated as 
409.36  the postmark date.  If the document or payment is sent by United 
410.1   States certified mail and the sender's receipt is postmarked by 
410.2   the postal employee to whom the envelope containing such 
410.3   document or payment is presented, the date of the United States 
410.4   postmark on the receipt shall be treated as the postmark date of 
410.5   the document or payment. 
410.6      [EFFECTIVE DATE.] This section is effective for returns and 
410.7   payments due on or after July 1, 2001. 
410.8      Sec. 4.  Minnesota Statutes 2000, section 270.771, is 
410.9   amended to read: 
410.10     270.771 [PAYMENTS REQUIRED TO BE MADE BY ELECTRONIC FUNDS 
410.11  TRANSFER ELECTRONICALLY.] 
410.12     (a) If a taxpayer is required to make payment of a tax to 
410.13  the commissioner by electronic means of electronic funds 
410.14  transfer as defined in section 336.4A-104, paragraph (a), the 
410.15  taxpayer shall make all payments of all taxes and fees paid to 
410.16  the commissioner by electronic means of electronic funds 
410.17  transfer. 
410.18     (b) Paragraph (a) does not apply to payments required to be 
410.19  made for individual income taxes under section 289A.20, 
410.20  subdivision 1, paragraph (a), or 289A.25.  
410.21     [EFFECTIVE DATE.] This section is effective the day 
410.22  following final enactment. 
410.23     Sec. 5.  Minnesota Statutes 2000, section 270.78, is 
410.24  amended to read: 
410.25     270.78 [PENALTY FOR FAILURE TO MAKE PAYMENT BY ELECTRONIC 
410.26  FUNDS TRANSFER PAY ELECTRONICALLY.] 
410.27     In addition to other applicable penalties imposed by law, 
410.28  after notification from the commissioner of revenue to the 
410.29  taxpayer that payments for a tax administered by the 
410.30  commissioner are required to be made by electronic means of 
410.31  electronic funds transfer, and the payments are remitted by some 
410.32  other means, there is a penalty in the amount of five percent of 
410.33  each payment that should have been remitted 
410.34  electronically.  After the commissioner's initial notification 
410.35  to the taxpayer that payments are required to be made by 
410.36  electronic means, the commissioner is not required to notify the 
411.1   taxpayer in subsequent periods if the initial notification 
411.2   specified the amount of tax liability at which a taxpayer is 
411.3   required to remit payments by electronic means.  The penalty can 
411.4   be abated under the abatement procedures prescribed in section 
411.5   270.07, subdivision 6, if the failure to remit the payment 
411.6   electronically is due to reasonable cause.  The penalty bears 
411.7   interest at the rate specified in section 270.75 from the due 
411.8   date of the payment of the tax to the date of payment of the 
411.9   penalty. 
411.10     [EFFECTIVE DATE.] This section is effective the day 
411.11  following final enactment. 
411.12     Sec. 6.  Minnesota Statutes 2000, section 287.12, is 
411.13  amended to read: 
411.14     287.12 [TAXES, HOW APPORTIONED.] 
411.15     (a) All taxes paid to the county treasurer under the 
411.16  provisions of sections 287.01 to 287.12 must be apportioned, 97 
411.17  percent to the general fund of the state, and three percent to 
411.18  the county revenue fund. 
411.19     (b) On or before the 20th day of each month the county 
411.20  treasurer shall determine and pay to the commissioner of revenue 
411.21  for deposit in the state treasury and credit to the general fund 
411.22  the state's portion of the receipts from the mortgage registry 
411.23  tax during the preceding month subject to the electronic funds 
411.24  transfer payment requirements of section 270.771.  The county 
411.25  treasurer shall provide any related reports requested by the 
411.26  commissioner of revenue. 
411.27     [EFFECTIVE DATE.] This section is effective the day 
411.28  following final enactment. 
411.29     Sec. 7.  Minnesota Statutes 2000, section 289A.02, is 
411.30  amended by adding a subdivision to read: 
411.31     Subd. 8.  [ELECTRONIC MEANS.] "Electronic means" refers to 
411.32  a method that is electronic, as defined in section 325L.02, 
411.33  paragraph (e), and that is prescribed by the commissioner. 
411.34     [EFFECTIVE DATE.] This section is effective the day 
411.35  following final enactment. 
411.36     Sec. 8.  Minnesota Statutes 2000, section 289A.18, 
412.1   subdivision 4, is amended to read: 
412.2      Subd. 4.  [SALES AND USE TAX RETURNS.] (a) Sales and use 
412.3   tax returns must be filed on or before the 20th day of the month 
412.4   following the close of the preceding reporting period, except 
412.5   that annual use tax returns provided for under section 289A.11, 
412.6   subdivision 1, must be filed by April 15 following the close of 
412.7   the calendar year, in the case of individuals.  Annual use tax 
412.8   returns of businesses, including sole proprietorships, and 
412.9   annual sales tax returns must be filed by February 5 following 
412.10  the close of the calendar year.  
412.11     (b) Except for the return for the June reporting period, 
412.12  which is due on the following August 25, Returns for the June 
412.13  reporting period filed by retailers required to remit 
412.14  liabilities by means of funds transfer their June liability 
412.15  under section 289A.20, subdivision 4, paragraph (d) (b), are due 
412.16  on or before the 25th day of the month following the close of 
412.17  the preceding reporting period August 20.  
412.18     (c) If a retailer has an average sales and use tax 
412.19  liability, including local sales and use taxes administered by 
412.20  the commissioner, equal to or less than $500 per month in any 
412.21  quarter of a calendar year, and has substantially complied with 
412.22  the tax laws during the preceding four calendar quarters, the 
412.23  retailer may request authorization to file and pay the taxes 
412.24  quarterly in subsequent calendar quarters.  The authorization 
412.25  remains in effect during the period in which the retailer's 
412.26  quarterly returns reflect sales and use tax liabilities of less 
412.27  than $1,500 and there is continued compliance with state tax 
412.28  laws. 
412.29     (d) If a retailer has an average sales and use tax 
412.30  liability, including local sales and use taxes administered by 
412.31  the commissioner, equal to or less than $100 per month during a 
412.32  calendar year, and has substantially complied with the tax laws 
412.33  during that period, the retailer may request authorization to 
412.34  file and pay the taxes annually in subsequent years.  The 
412.35  authorization remains in effect during the period in which the 
412.36  retailer's annual returns reflect sales and use tax liabilities 
413.1   of less than $1,200 and there is continued compliance with state 
413.2   tax laws. 
413.3      (e) The commissioner may also grant quarterly or annual 
413.4   filing and payment authorizations to retailers if the 
413.5   commissioner concludes that the retailers' future tax 
413.6   liabilities will be less than the monthly totals identified in 
413.7   paragraphs (c) and (d).  An authorization granted under this 
413.8   paragraph is subject to the same conditions as an authorization 
413.9   granted under paragraphs (c) and (d). 
413.10     (f) A taxpayer who is a materials supplier may report gross 
413.11  receipts either on: 
413.12     (1) the cash basis as the consideration is received; or 
413.13     (2) the accrual basis as sales are made.  
413.14  As used in this paragraph, "materials supplier" means a person 
413.15  who provides materials for the improvement of real property; who 
413.16  is primarily engaged in the sale of lumber and building 
413.17  materials-related products to owners, contractors, 
413.18  subcontractors, repairers, or consumers; who is authorized to 
413.19  file a mechanics lien upon real property and improvements under 
413.20  chapter 514; and who files with the commissioner an election to 
413.21  file sales and use tax returns on the basis of this paragraph. 
413.22     [EFFECTIVE DATE.] This section is effective for returns due 
413.23  on or after July 1, 2001. 
413.24     Sec. 9.  Minnesota Statutes 2000, section 289A.20, 
413.25  subdivision 1, is amended to read: 
413.26     Subdivision 1.  [INDIVIDUAL INCOME, FIDUCIARY INCOME, 
413.27  MINING COMPANY, CORPORATE FRANCHISE, AND ENTERTAINMENT TAXES.] 
413.28  (a) Individual income, fiduciary, mining company, and corporate 
413.29  franchise taxes must be paid to the commissioner on or before 
413.30  the date the return must be filed under section 289A.18, 
413.31  subdivision 1, or the extended due date as provided in section 
413.32  289A.19, unless an earlier date for payment is provided.  
413.33     Notwithstanding any other law, a taxpayer whose unpaid 
413.34  liability for income or corporate franchise taxes, as reflected 
413.35  upon the return, is $1 or less need not pay the tax.  
413.36     (b) Entertainment taxes must be paid on or before the date 
414.1   the return must be filed under section 289A.18, subdivision 1. 
414.2      (c) If a fiduciary administers 100 or more trusts, 
414.3   fiduciary income taxes for all trusts administered by the 
414.4   fiduciary must be paid by funds transfer as defined in section 
414.5   336.4A-104, paragraph (a).  The funds transfer payment date, as 
414.6   defined in section 336.4A-401, must be on or before the date the 
414.7   tax payment is due.  If the date the payment is due is not a 
414.8   funds transfer business day, as defined in section 336.4A-105, 
414.9   paragraph (a), clause (4), the payment date must be on or before 
414.10  the funds transfer business day next following the date the 
414.11  payment is due electronic means.  
414.12     [EFFECTIVE DATE.] This section is effective the day 
414.13  following final enactment. 
414.14     Sec. 10.  Minnesota Statutes 2000, section 289A.20, 
414.15  subdivision 2, is amended to read: 
414.16     Subd. 2.  [WITHHOLDING FROM WAGES, ENTERTAINER WITHHOLDING, 
414.17  WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, AND 
414.18  WITHHOLDING BY PARTNERSHIPS AND SMALL BUSINESS CORPORATIONS.] 
414.19  (a) A tax required to be deducted and withheld during the 
414.20  quarterly period must be paid on or before the last day of the 
414.21  month following the close of the quarterly period, unless an 
414.22  earlier time for payment is provided.  A tax required to be 
414.23  deducted and withheld from compensation of an entertainer and 
414.24  from a payment to an out-of-state contractor must be paid on or 
414.25  before the date the return for such tax must be filed under 
414.26  section 289A.18, subdivision 2.  Taxes required to be deducted 
414.27  and withheld by partnerships and S corporations must be paid on 
414.28  or before the date the return must be filed under section 
414.29  289A.18, subdivision 2. 
414.30     (b) An employer who, during the previous quarter, withheld 
414.31  more than $1,500 of tax under section 290.92, subdivision 2a or 
414.32  3, or 290.923, subdivision 2, must deposit tax withheld under 
414.33  those sections with the commissioner within the time allowed to 
414.34  deposit the employer's federal withheld employment taxes under 
414.35  Treasury Regulation, section 31.6302-1, without regard to the 
414.36  safe harbor or de minimis rules in subparagraph (f) or the 
415.1   one-day rule in subsection (c), clause (3).  Taxpayers must 
415.2   submit a copy of their federal notice of deposit status to the 
415.3   commissioner upon request by the commissioner. 
415.4      (c) The commissioner may prescribe by rule other return 
415.5   periods or deposit requirements.  In prescribing the reporting 
415.6   period, the commissioner may classify payors according to the 
415.7   amount of their tax liability and may adopt an appropriate 
415.8   reporting period for the class that the commissioner judges to 
415.9   be consistent with efficient tax collection.  In no event will 
415.10  the duration of the reporting period be more than one year. 
415.11     (d) If less than the correct amount of tax is paid to the 
415.12  commissioner, proper adjustments with respect to both the tax 
415.13  and the amount to be deducted must be made, without interest, in 
415.14  the manner and at the times the commissioner prescribes.  If the 
415.15  underpayment cannot be adjusted, the amount of the underpayment 
415.16  will be assessed and collected in the manner and at the times 
415.17  the commissioner prescribes. 
415.18     (e) If the aggregate amount of the tax withheld during a 
415.19  the fiscal year ending June 30, 2001, under section 290.92, 
415.20  subdivision 2a or 3, is equal to or exceeds the amounts 
415.21  established for remitting federal withheld taxes pursuant to the 
415.22  regulations promulgated under section 6302(h) of the Internal 
415.23  Revenue Code $25,000, or $10,000 for the fiscal year ending June 
415.24  30, 2002, and each fiscal year ending June 30 thereafter, the 
415.25  employer must remit each required deposit for wages paid in the 
415.26  subsequent calendar year by electronic means of a funds transfer 
415.27  as defined in section 336.4A-104, paragraph (a).  The funds 
415.28  transfer payment date, as defined in section 336.4A-401, must be 
415.29  on or before the date the deposit is due.  If the date the 
415.30  deposit is due is not a funds transfer business day, as defined 
415.31  in section 336.4A-105, paragraph (a), clause (4), the payment 
415.32  date must be on or before the funds transfer business day next 
415.33  following the date the deposit is due. 
415.34     (f) A third-party bulk filer as defined in section 290.92, 
415.35  subdivision 30, paragraph (a), clause (2), who remits 
415.36  withholding deposits must remit all deposits by electronic means 
416.1   of a funds transfer as provided in paragraph (e), regardless of 
416.2   the aggregate amount of tax withheld during a fiscal year for 
416.3   all of the employers.  
416.4      [EFFECTIVE DATE.] This section is effective for payments 
416.5   due on or after July 1, 2001. 
416.6      Sec. 11.  Minnesota Statutes 2000, section 289A.20, 
416.7   subdivision 4, is amended to read: 
416.8      Subd. 4.  [SALES AND USE TAX.] (a) The taxes imposed by 
416.9   chapter 297A are due and payable to the commissioner monthly on 
416.10  or before the 20th day of the month following the month in which 
416.11  the taxable event occurred, or following another reporting 
416.12  period as the commissioner prescribes or as allowed under 
416.13  section 289A.18, subdivision 4, paragraph (f), except that use 
416.14  taxes due on an annual use tax return as provided under section 
416.15  289A.11, subdivision 1, are payable by April 15 following the 
416.16  close of the calendar year. 
416.17     (b) A vendor having a liability of $120,000 or more during 
416.18  a fiscal year ending June 30 must remit the June liability for 
416.19  the next year in the following manner: 
416.20     (1) Two business days before June 30 of the year, the 
416.21  vendor must remit 62 percent of the estimated June liability to 
416.22  the commissioner.  
416.23     (2) On or before August 14 20 of the year, the vendor must 
416.24  pay any additional amount of tax not remitted in June. 
416.25     (c) A vendor having a liability of $120,000 $80,000 or more 
416.26  during a the fiscal year ending June 30, 2001, or at least 
416.27  $40,000 for the fiscal year ending June 30, 2002, $20,000 for 
416.28  the fiscal year ending June 30, 2003, and $10,000 for the fiscal 
416.29  year ending June 30, 2004, and each fiscal year ending June 30 
416.30  thereafter, must remit all liabilities on returns due for 
416.31  periods beginning in the subsequent calendar year by electronic 
416.32  means of a funds transfer as defined in section 336.4A-104, 
416.33  paragraph (a).  The funds transfer payment date, as defined in 
416.34  section 336.4A-401, must be on or before the 14th 20th day of 
416.35  the month following the month in which the taxable event 
416.36  occurred, or on or before the 14th 20th day of the month 
417.1   following the month in which the sale is reported under section 
417.2   289A.18, subdivision 4, except for 62 percent of the estimated 
417.3   June liability, which is due two business days before June 30.  
417.4   The remaining amount of the June liability is due on August 14 
417.5   20.  If the date the tax is due is not a funds transfer business 
417.6   day, as defined in section 336.4A-105, paragraph (a), clause 
417.7   (4), the payment date must be on or before the funds transfer 
417.8   business day next following the date the tax is due. 
417.9      (d) If the vendor required to remit by electronic funds 
417.10  transfer as provided in paragraph (c) is unable due to 
417.11  reasonable cause to determine the actual sales and use tax due 
417.12  on or before the due date for payment, the vendor may remit an 
417.13  estimate of the tax owed using one of the following options: 
417.14     (1) 100 percent of the tax reported on the previous month's 
417.15  sales and use tax return; 
417.16     (2) 100 percent of the tax reported on the sales and use 
417.17  tax return for the same month in the previous calendar year; or 
417.18     (3) 95 percent of the actual tax due. 
417.19     Any additional amount of tax that is not remitted on or 
417.20  before the due date for payment, must be remitted with the 
417.21  return.  If a vendor fails to remit the actual liability or does 
417.22  not remit using one of the estimate options by the due date for 
417.23  payment, the vendor must remit actual liability as provided in 
417.24  paragraph (c) in all subsequent periods.  This paragraph does 
417.25  not apply to the June sales and use tax liability. 
417.26     [EFFECTIVE DATE.] This section is effective for payments 
417.27  due on or after July 1, 2001. 
417.28     Sec. 12.  Minnesota Statutes 2000, section 289A.26, 
417.29  subdivision 2a, is amended to read: 
417.30     Subd. 2a.  [ELECTRONIC FUNDS TRANSFER PAYMENTS.] If the 
417.31  aggregate amount of estimated tax payments made during a 
417.32  calendar year is equal to or exceeds $20,000, or $10,000 for the 
417.33  calendar year 2004, and each calendar year thereafter, all 
417.34  estimated tax payments in the subsequent calendar year must be 
417.35  paid by electronic means of a funds transfer as defined in 
417.36  section 336.4A-104, paragraph (a).  The funds transfer payment 
418.1   date, as defined in section 336.4A-401, must be on or before the 
418.2   date the estimated tax payment is due.  If the date the 
418.3   estimated tax payment is due is not a funds transfer business 
418.4   day, as defined in section 336.4A-105, paragraph (a), clause 
418.5   (4), the payment date must be on or before the funds transfer 
418.6   business day next following the date the estimated tax payment 
418.7   is due. 
418.8      [EFFECTIVE DATE.] This section is effective for payments 
418.9   due on or after July 1, 2001. 
418.10     Sec. 13.  Minnesota Statutes 2000, section 289A.60, 
418.11  subdivision 21, is amended to read: 
418.12     Subd. 21.  [PENALTY FOR FAILURE TO MAKE PAYMENT BY 
418.13  ELECTRONIC FUNDS TRANSFER MEANS.] In addition to other 
418.14  applicable penalties imposed by this section, after notification 
418.15  from the commissioner to the taxpayer that payments are required 
418.16  to be made by electronic means of electronic funds transfer 
418.17  under section 289A.20, subdivision 2, paragraph (e), or 4, 
418.18  paragraph (d) (c), or 289A.26, subdivision 2a, and the payments 
418.19  are remitted by some other means, there is a penalty in the 
418.20  amount of five percent of each payment that should have been 
418.21  remitted electronically.  After the commissioner's initial 
418.22  notification to the taxpayer that payments are required to be 
418.23  made by electronic means, the commissioner is not required to 
418.24  notify the taxpayer in subsequent periods if the initial 
418.25  notification specified the amount of tax liability at which a 
418.26  taxpayer is required to remit payments by electronic means.  The 
418.27  penalty can be abated under the abatement procedures prescribed 
418.28  in section 270.07, subdivision 6, if the failure to remit the 
418.29  payment electronically is due to reasonable cause. 
418.30     [EFFECTIVE DATE.] This section is effective the day 
418.31  following final enactment. 
418.32     Sec. 14.  Minnesota Statutes 2000, section 295.55, 
418.33  subdivision 4, is amended to read: 
418.34     Subd. 4.  [ELECTRONIC FUNDS TRANSFER PAYMENTS.] A taxpayer 
418.35  with an aggregate tax liability of $120,000 $80,000 or more 
418.36  during a the fiscal year ending June 30, 2001, or at least 
419.1   $40,000 for the fiscal year ending June 30, 2002, $20,000 for 
419.2   the fiscal year ending June 30, 2003, and $10,000 for the fiscal 
419.3   year ending June 30, 2004, and each fiscal year ending June 30 
419.4   thereafter, must remit all liabilities by electronic means of a 
419.5   funds transfer as defined in section 336.4A-104, paragraph (a), 
419.6   in the subsequent calendar year.  The funds transfer payment 
419.7   date, as defined in section 336.4A-401, is on or before the date 
419.8   the tax is due.  If the date the tax is due is not a 
419.9   funds-transfer business day, as defined in section 336.4A-105, 
419.10  paragraph (a), clause (4), the payment date is on or before the 
419.11  first funds-transfer business day after the date the tax is due. 
419.12     [EFFECTIVE DATE.] This section is effective for payments 
419.13  due on or after July 1, 2001. 
419.14     Sec. 15.  Minnesota Statutes 2000, section 296A.15, 
419.15  subdivision 7, is amended to read: 
419.16     Subd. 7.  [ELECTRONIC FUNDS TRANSFER PAYMENT REQUIRED.] All 
419.17  remittances must be made by electronic means of electronic funds 
419.18  transfer as defined in section 336.4A-104, paragraph (a).  The 
419.19  funds transfer payment date, as defined in section 336.4A-401, 
419.20  must be on or before the date the remittance is due.  If the 
419.21  date the remittance is due is not a funds transfer business day, 
419.22  as defined in section 336.4A-105, paragraph (a), clause (4), the 
419.23  payment date must be on or before the funds transfer business 
419.24  day next following the date the remittance is due.  
419.25     [EFFECTIVE DATE.] This section is effective the day 
419.26  following final enactment. 
419.27     Sec. 16.  Minnesota Statutes 2000, section 297E.02, 
419.28  subdivision 4, is amended to read: 
419.29     Subd. 4.  [PULL-TAB AND TIPBOARD TAX.] (a) A tax is imposed 
419.30  on the sale of each deal of pull-tabs and tipboards sold by a 
419.31  distributor.  The rate of the tax is 1.7 percent of the ideal 
419.32  gross of the pull-tab or tipboard deal.  The sales tax imposed 
419.33  by chapter 297A on the sale of the pull-tabs and tipboards by 
419.34  the distributor is imposed on the retail sales price less the 
419.35  tax imposed by this subdivision.  The retail sale of pull-tabs 
419.36  or tipboards by the organization is exempt from taxes imposed by 
420.1   chapter 297A and is exempt from all local taxes and license fees 
420.2   except a fee authorized under section 349.16, subdivision 8.  
420.3      (b) The liability for the tax imposed by this section is 
420.4   incurred when the pull-tabs and tipboards are delivered by the 
420.5   distributor to the customer or to a common or contract carrier 
420.6   for delivery to the customer, or when received by the customer's 
420.7   authorized representative at the distributor's place of 
420.8   business, regardless of the distributor's method of accounting 
420.9   or the terms of the sale.  
420.10     The tax imposed by this subdivision is imposed on all sales 
420.11  of pull-tabs and tipboards, except the following:  
420.12     (1) sales to the governing body of an Indian tribal 
420.13  organization for use on an Indian reservation; 
420.14     (2) sales to distributors licensed under the laws of 
420.15  another state or of a province of Canada, as long as all 
420.16  statutory and regulatory requirements are met in the other state 
420.17  or province; 
420.18     (3) sales of promotional tickets as defined in section 
420.19  349.12; and 
420.20     (4) pull-tabs and tipboards sold to an organization that 
420.21  sells pull-tabs and tipboards under the exemption from licensing 
420.22  in section 349.166, subdivision 2.  A distributor shall require 
420.23  an organization conducting exempt gambling to show proof of its 
420.24  exempt status before making a tax-exempt sale of pull-tabs or 
420.25  tipboards to the organization.  A distributor shall identify, on 
420.26  all reports submitted to the commissioner, all sales of 
420.27  pull-tabs and tipboards that are exempt from tax under this 
420.28  subdivision.  
420.29     (c) A distributor having a liability of $120,000 $80,000 or 
420.30  more during a the fiscal year ending June 30, 2001, or at least 
420.31  $40,000 for the fiscal year ending June 30, 2002, $20,000 for 
420.32  the fiscal year ending June 30, 2003, and $10,000 for the fiscal 
420.33  year ending June 30, 2004, and each fiscal year ending June 30 
420.34  thereafter, must remit all liabilities in the subsequent 
420.35  calendar year by a funds transfer as defined in section 
420.36  336.4A-104, paragraph (a).  The funds transfer payment date, as 
421.1   defined in section 336.4A-401, must be on or before the date the 
421.2   tax is due.  If the date the tax is due is not a funds transfer 
421.3   business day, as defined in section 336.4A-105, paragraph (a), 
421.4   clause (4), the payment date must be on or before the funds 
421.5   transfer business day next following the date the tax is 
421.6   due electronic means. 
421.7      (d) Any customer who purchases deals of pull-tabs or 
421.8   tipboards from a distributor may file an annual claim for a 
421.9   refund or credit of taxes paid pursuant to this subdivision for 
421.10  unsold pull-tab and tipboard tickets.  The claim must be filed 
421.11  with the commissioner on a form prescribed by the commissioner 
421.12  by March 20 of the year following the calendar year for which 
421.13  the refund is claimed.  The refund must be filed as part of the 
421.14  customer's February monthly return.  The refund or credit is 
421.15  equal to 1.7 percent of the face value of the unsold pull-tab or 
421.16  tipboard tickets, provided that the refund or credit will be 
421.17  1.75 percent of the face value of the unsold pull-tab or 
421.18  tipboard tickets for claims for a refund or credit of taxes 
421.19  filed on the February 2001 monthly return.  The refund claimed 
421.20  will be applied as a credit against tax owing under this chapter 
421.21  on the February monthly return.  If the refund claimed exceeds 
421.22  the tax owing on the February monthly return, that amount will 
421.23  be refunded.  The amount refunded will bear interest pursuant to 
421.24  section 270.76 from 90 days after the claim is filed.  
421.25     [EFFECTIVE DATE.] This section is effective for payments 
421.26  due on or after July 1, 2001. 
421.27     Sec. 17.  Minnesota Statutes 2000, section 297F.09, 
421.28  subdivision 7, is amended to read: 
421.29     Subd. 7.  [ELECTRONIC FUNDS TRANSFER PAYMENT.] A cigarette 
421.30  or tobacco products distributor having a liability 
421.31  of $120,000 $80,000 or more during a the fiscal year ending June 
421.32  30, 2001, or at least $40,000 for the fiscal year ending June 
421.33  30, 2002, $20,000 for the fiscal year ending June 30, 2003, and 
421.34  $10,000 for the fiscal year ending June 30, 2004, and each 
421.35  fiscal year ending June 30 thereafter, must remit all 
421.36  liabilities in the subsequent calendar year by electronic means 
422.1   of a fund transfer as defined in section 336.4A-104, paragraph 
422.2   (a).  The funds transfer payment date, as defined in section 
422.3   336.4A-401, must be on or before the date the tax is due.  If 
422.4   the date the tax is due is not a funds transfer business day, as 
422.5   defined in section 336.4A-105, paragraph (a), clause (4), the 
422.6   payment date must be on or before the funds transfer day 
422.7   immediately following the date the tax is due. 
422.8      [EFFECTIVE DATE.] This section is effective for payments 
422.9   due on or after July 1, 2001. 
422.10     Sec. 18.  Minnesota Statutes 2000, section 297G.09, 
422.11  subdivision 6, is amended to read: 
422.12     Subd. 6.  [ELECTRONIC FUNDS TRANSFER PAYMENTS.] A licensed 
422.13  brewer, importer, or wholesaler having an excise tax liability 
422.14  of $120,000 $80,000 or more during a the fiscal year ending June 
422.15  30, 2001, or at least $40,000 for the fiscal year ending June 
422.16  30, 2002, $20,000 for the fiscal year ending June 30, 2003, and 
422.17  $10,000 for the fiscal year ending June 30, 2004, and each 
422.18  fiscal year ending June 30 thereafter, must remit all excise tax 
422.19  liabilities in the subsequent calendar year by electronic means 
422.20  of a funds transfer as defined in section 336.4A-104, paragraph 
422.21  (a).  The funds transfer payment date, as defined in section 
422.22  336.4A-401, must be on or before the date the excise tax is 
422.23  due.  If the date the excise tax is due is not a funds transfer 
422.24  business day, as defined in section 336.4A-105, paragraph (a), 
422.25  clause (4), the payment date must be on or before the funds 
422.26  transfer business day next following the date the excise tax is 
422.27  due. 
422.28     [EFFECTIVE DATE.] This section is effective for payments 
422.29  due on or after July 1, 2001. 
422.30     Sec. 19.  Minnesota Statutes 2000, section 297I.35, 
422.31  subdivision 2, is amended to read: 
422.32     Subd. 2.  [ELECTRONIC FUNDS TRANSFER PAYMENTS.] If the 
422.33  aggregate amount of tax and surcharges due under this chapter 
422.34  during a the calendar year ending December 31, 2001, is equal to 
422.35  or exceeds $120,000 $80,000, or $40,000 for the calendar year 
422.36  ending December 31, 2002, $20,000 for the calendar year ending 
423.1   December 31, 2003, and $10,000 for the calendar year ending 
423.2   December 31, 2004, and each calendar year thereafter, or if the 
423.3   taxpayer is required to make payment of any other tax to the 
423.4   commissioner by electronic means of electronic funds transfer as 
423.5   defined in section 336.4A-104, paragraph (a), then all tax and 
423.6   surcharge payments in the subsequent calendar year must be paid 
423.7   by electronic means of a funds transfer as defined in section 
423.8   336.4A-104, paragraph (a).  The funds transfer payment date, as 
423.9   defined in section 336.4A-104, must be on or before the date the 
423.10  payment is due.  If the date the payment is due is not a funds 
423.11  transfer business day, as defined in section 336.4A-105, 
423.12  paragraph (a), clause (4), the payment date must be on or before 
423.13  the funds transfer business day next following the date the 
423.14  payment is due. 
423.15     [EFFECTIVE DATE.] This section is effective for payments 
423.16  due on or after January 1, 2002. 
423.17     Sec. 20.  Minnesota Statutes 2000, section 297I.85, 
423.18  subdivision 7, is amended to read: 
423.19     Subd. 7.  [PENALTY FOR FAILURE TO MAKE PAYMENT BY 
423.20  ELECTRONIC FUNDS TRANSFER PAY ELECTRONICALLY.] In addition to 
423.21  other applicable penalties imposed by this section, if the 
423.22  commissioner notifies the taxpayer that payments are required to 
423.23  be made by electronic means of electronic funds transfer, and 
423.24  the payments are made by some other means, a penalty is 
423.25  imposed.  The amount of the penalty is equal to five percent of 
423.26  each payment that should have been paid electronically.  The 
423.27  penalty may be abated under the abatement procedures prescribed 
423.28  in section 270.07, subdivision 6, if the failure to pay 
423.29  electronically is due to reasonable cause. 
423.30     [EFFECTIVE DATE.] This section is effective the day 
423.31  following final enactment. 
423.32     Sec. 21.  Minnesota Statutes 2000, section 473.843, 
423.33  subdivision 3, is amended to read: 
423.34     Subd. 3.  [PAYMENT OF FEE.] On or before the 20th day of 
423.35  each month each operator shall pay the fee due under this 
423.36  section for the previous month, using a form provided by the 
424.1   commissioner of revenue.  
424.2      An operator having a fee of $120,000 $80,000 or more during 
424.3   a the fiscal year ending June 30, 2001, or at least $40,000 for 
424.4   the fiscal year ending June 30, 2002, $20,000 for the fiscal 
424.5   year ending June 30, 2003, and $10,000 for the fiscal year 
424.6   ending June 30, 2004, and each fiscal year ending June 30 
424.7   thereafter, must pay all fees in the subsequent calendar year by 
424.8   electronic means of a funds transfer as defined in section 
424.9   336.4A-104, paragraph (a).  The funds transfer payment date, as 
424.10  defined in section 336.4A-401, must be on or before the date the 
424.11  fee is due.  If the date the fee is due is not a funds transfer 
424.12  business day, as defined in section 336.4A-105, paragraph (a), 
424.13  clause (4), the payment date must be on or before the funds 
424.14  transfer business day next following the date the fee is due. 
424.15     [EFFECTIVE DATE.] This section is effective for payments 
424.16  due on or after July 1, 2001. 
424.17                             ARTICLE 18
424.18                SALES TAX RECODIFICATION CORRECTIONS
424.19     Section 1.  Minnesota Statutes 2000, section 289A.31, 
424.20  subdivision 7, is amended to read: 
424.21     Subd. 7.  [SALES AND USE TAX.] (a) The sales and use tax 
424.22  required to be collected by the retailer under chapter 297A 
424.23  constitutes a debt owed by the retailer to Minnesota, and the 
424.24  sums collected must be held as a special fund in trust for the 
424.25  state of Minnesota. 
424.26     A retailer who does not maintain a place of business within 
424.27  this state as defined by section 297A.21, subdivision 1, shall 
424.28  not be indebted to Minnesota for amounts of tax that it was 
424.29  required to collect but did not collect unless the retailer knew 
424.30  or had been advised by the commissioner of its obligation to 
424.31  collect the tax.  
424.32     (b) The use tax required to be paid by a purchaser is a 
424.33  debt owed by the purchaser to Minnesota. 
424.34     (c) The tax imposed by chapter 297A, and interest and 
424.35  penalties, is a personal debt of the individual required to file 
424.36  a return from the time the liability arises, irrespective of 
425.1   when the time for payment of that liability occurs.  The debt 
425.2   is, in the case of the executor or administrator of the estate 
425.3   of a decedent and in the case of a fiduciary, that of the 
425.4   individual in an official or fiduciary capacity unless the 
425.5   individual has voluntarily distributed the assets held in that 
425.6   capacity without reserving sufficient assets to pay the tax, 
425.7   interest, and penalties, in which case the individual is 
425.8   personally liable for the deficiency. 
425.9      (d) Liability for payment of sales and use taxes includes 
425.10  any responsible person or entity described in the personal 
425.11  liability provisions of section 270.101. 
425.12     (e) Any amounts collected, even if erroneously or illegally 
425.13  collected, from a purchaser under a representation that they are 
425.14  taxes imposed under chapter 297A are state funds from the time 
425.15  of collection and must be reported on a return filed with the 
425.16  commissioner.  The amounts collected are not subject to refund 
425.17  unless the seller submits written evidence to the commissioner 
425.18  that the tax and any interest earned on the tax has been or will 
425.19  be refunded or credited to the purchaser by the seller. 
425.20     (f) The tax imposed under chapter 297A on sales of tickets 
425.21  to the premises of or events sponsored by the state agricultural 
425.22  society and conducted on the state fairgrounds during the period 
425.23  of the annual state fair may be retained by the state 
425.24  agricultural society if the funds are used and matched as 
425.25  required under section 37.13, subdivision 2. 
425.26     Sec. 2.  Minnesota Statutes 2000, section 289A.50, 
425.27  subdivision 2, is amended to read: 
425.28     Subd. 2.  [REFUND OF SALES TAX TO VENDORS; LIMITATION.] If 
425.29  a vendor has collected from a purchaser and remitted to the 
425.30  state a tax on a transaction that is not subject to the tax 
425.31  imposed by chapter 297A, the tax is refundable to the vendor 
425.32  only if and to the extent that it the tax and any interest 
425.33  earned on the tax is credited to amounts due to the vendor by 
425.34  the purchaser or returned to the purchaser by the vendor.  In 
425.35  addition to the requirements of subdivision 1, a claim for 
425.36  refund under this subdivision must state in writing that the tax 
426.1   and interest earned on the tax has been or will be refunded or 
426.2   credited to the purchaser by the vendor. 
426.3      Sec. 3.  Minnesota Statutes 2000, section 297A.61, 
426.4   subdivision 2, is amended to read: 
426.5      Subd. 2.  [PERSON.] (a) "Person" includes any individual, 
426.6   and any or group or and any combination of individuals, 
426.7   groups, or individuals and groups acting as a unit, and the 
426.8   plural as well as the singular number.  
426.9      (b) Person includes a firm, partnership, joint venture, 
426.10  limited liability company, association, cooperative, social 
426.11  club, fraternal organization, municipal or private corporation 
426.12  whether or not organized for profit, estates, trusts, business 
426.13  trusts estate, trust, business trust, receiver, trustee, 
426.14  syndicate, the United States, and a state and its political 
426.15  subdivisions.  
426.16     (c) Person includes, but is not limited to, directors and 
426.17  officers of corporations, governors and managers of a limited 
426.18  liability company, or members of partnerships who, either 
426.19  individually or jointly with others, have the control, 
426.20  supervision, or responsibility of filing returns and making 
426.21  payment of the amount of tax imposed by this chapter. 
426.22     (d) Person also includes any agent or consignee of any 
426.23  individual or organization enumerated listed in this subdivision.
426.24     Sec. 4.  Minnesota Statutes 2000, section 297A.61, 
426.25  subdivision 3, is amended to read: 
426.26     Subd. 3.  [SALE AND PURCHASE.] (a) "Sale" and "purchase" 
426.27  include, but are not limited to, each of the transactions listed 
426.28  in this subdivision. 
426.29     (b) Sale and purchase include: 
426.30     (1) any transfer of title or possession, or both, of 
426.31  tangible personal property, whether absolutely or conditionally, 
426.32  for a consideration in money or by exchange or barter; and 
426.33     (2) the leasing of or the granting of a license to use or 
426.34  consume, for a consideration in money or by exchange or barter, 
426.35  tangible personal property, other than a manufactured home used 
426.36  for residential purposes for a continuous period of 30 days or 
427.1   more. 
427.2      (c) Sale and purchase include the production, fabrication, 
427.3   printing, or processing of tangible personal property for a 
427.4   consideration for consumers who furnish either directly or 
427.5   indirectly the materials used in the production, fabrication, 
427.6   printing, or processing. 
427.7      (d) Sale and purchase include the furnishing, preparing, or 
427.8   serving for a consideration of food or drinks.  Notwithstanding 
427.9   section 297A.67, subdivision 2, taxable food or drinks include, 
427.10  but are not limited to, the following: 
427.11     (1) food or drinks sold by the retailer for immediate 
427.12  consumption on the retailer's premises.  Food and drinks sold 
427.13  within a building or grounds that require an admission charge 
427.14  for entrance are presumed to be sold for consumption on the 
427.15  premises; 
427.16     (2) food or drinks prepared by the retailer for immediate 
427.17  consumption either on or off the retailer's premises.  For 
427.18  purposes of this subdivision, "food or drinks prepared for 
427.19  immediate consumption" means any food product upon which an act 
427.20  of preparation including, but not limited to, cooking, mixing, 
427.21  sandwich making, blending, heating, or pouring has been 
427.22  performed by the retailer so the food product may be immediately 
427.23  consumed by the purchaser; 
427.24     (3) ice cream, ice milk, frozen yogurt products, or frozen 
427.25  novelties sold in single or individual servings including, but 
427.26  not limited to, cones, sundaes, and snow cones; 
427.27     (4) soft drinks and other beverages, including all 
427.28  carbonated and noncarbonated beverages or drinks sold in liquid 
427.29  form, but not including beverages or drinks which contain milk 
427.30  or milk products, beverages or drinks containing 15 or more 
427.31  percent fruit juice, and noncarbonated and noneffervescent 
427.32  bottled water sold in individual containers of one-half gallon 
427.33  or more in size; 
427.34     (5) gum, candy, and candy products; 
427.35     (6) ice; 
427.36     (7) all food sold from vending machines; 
428.1      (8) all food for immediate consumption sold from concession 
428.2   stands and vehicles; 
428.3      (9) party trays; 
428.4      (10) all meals and single servings of packaged snack food 
428.5   sold in restaurants and bars; and 
428.6      (11) bakery products that are: 
428.7      (i) prepared by the retailer for consumption on the 
428.8   retailer's premises; 
428.9      (ii) sold at a place that charges admission; 
428.10     (iii) sold from vending machines; or 
428.11     (iv) sold in single or individual servings from concession 
428.12  stands, vehicles, bars, and restaurants.  
428.13     For purposes of this paragraph, "single or individual 
428.14  servings" does not include products when sold in bulk containers 
428.15  or bulk packaging.  
428.16     For purposes of this paragraph, "premises" means the total 
428.17  space and facilities, including buildings, grounds, and parking 
428.18  lots that are made available or that are available for use by 
428.19  the retailer or customer for the purpose of sale or consumption 
428.20  of prepared food and drinks.  The premises of a caterer is the 
428.21  place where the catered food or drinks are served. 
428.22     (e) A sale and a purchase includes the furnishing for a 
428.23  consideration of electricity, gas, water, or steam for use or 
428.24  consumption within this state or local exchange telephone 
428.25  service, intrastate toll service, and interstate toll service, 
428.26  if that service originates from and is charged to a telephone 
428.27  located in this state.  Telephone service includes (1) paging 
428.28  services, and (2) private communication service, as defined in 
428.29  United States Code, title 26, section 4252(d), except for 
428.30  private communication service purchased by an agent acting on 
428.31  behalf of the state lottery.  Telephone service does not include 
428.32  services purchased with a prepaid telephone calling card.  The 
428.33  furnishing for a consideration of access to telephone services 
428.34  by a hotel to its guests is a sale.  The furnishing for a 
428.35  consideration of items listed in this paragraph by a municipal 
428.36  corporation is a sale. 
429.1      (f) A sale and a purchase includes the transfer for a 
429.2   consideration of computer software.  
429.3      (g) A sale and a purchase includes the furnishing for a 
429.4   consideration of taxable services as defined in subdivision 
429.5   16. the following services: 
429.6      (1) the privilege of admission to places of amusement, 
429.7   recreational areas, or athletic events, and the making available 
429.8   of amusement devices, tanning facilities, reducing salons, steam 
429.9   baths, turkish baths, health clubs, and spas or athletic 
429.10  facilities; 
429.11     (2) lodging and related services by a hotel, rooming house, 
429.12  resort, campground, motel, or trailer camp and the granting of 
429.13  any similar license to use real property other than the renting 
429.14  or leasing of it for a continuous period of 30 days or more; 
429.15     (3) cable television services or similar television 
429.16  services, including, but not limited to, charges for basic, 
429.17  premium, pay-per-view, and any other similar service; 
429.18     (4) parking services, whether on a contractual, hourly, or 
429.19  other periodic basis, except for parking at a meter; 
429.20     (5) the granting of membership in a club, association, or 
429.21  other organization if: 
429.22     (i) the club, association, or other organization makes 
429.23  available for the use of its members sports and athletic 
429.24  facilities, without regard to whether a separate charge is 
429.25  assessed for use of the facilities; and 
429.26     (ii) use of the sports and athletic facility is not made 
429.27  available to the general public on the same basis as it is made 
429.28  available to members.  
429.29  Granting of membership means both one-time initiation fees and 
429.30  periodic membership dues.  Sports and athletic facilities 
429.31  include golf courses; tennis, racquetball, handball, and squash 
429.32  courts; basketball and volleyball facilities; running tracks; 
429.33  exercise equipment; swimming pools; and other similar athletic 
429.34  or sports facilities; and 
429.35     (6) services as provided in this clause: 
429.36     (i) laundry and dry cleaning services including cleaning, 
430.1   pressing, repairing, altering, and storing clothes, linen 
430.2   services and supply, cleaning and blocking hats, and carpet, 
430.3   drapery, upholstery, and industrial cleaning.  Laundry and dry 
430.4   cleaning services do not include services provided by coin 
430.5   operated facilities operated by the customer; 
430.6      (ii) motor vehicle washing, waxing, and cleaning services, 
430.7   including services provided by coin operated facilities operated 
430.8   by the customer, and rustproofing, undercoating, and towing of 
430.9   motor vehicles; 
430.10     (iii) building and residential cleaning, maintenance, and 
430.11  disinfecting and exterminating services; 
430.12     (iv) detective, security, burglar, fire alarm, and armored 
430.13  car services; but not including services performed within the 
430.14  jurisdiction they serve by off-duty licensed peace officers as 
430.15  defined in section 626.84, subdivision 1, or services provided 
430.16  by a nonprofit organization for monitoring and electronic 
430.17  surveillance of persons placed on in-home detention pursuant to 
430.18  court order or under the direction of the Minnesota department 
430.19  of corrections; 
430.20     (v) pet grooming services; 
430.21     (vi) lawn care, fertilizing, mowing, spraying and sprigging 
430.22  services; garden planting and maintenance; tree, bush, and shrub 
430.23  pruning, bracing, spraying, and surgery; indoor plant care; 
430.24  tree, bush, shrub, and stump removal; and tree trimming for 
430.25  public utility lines.  Services performed under a construction 
430.26  contract for the installation of shrubbery, plants, sod, trees, 
430.27  bushes, and similar items are not taxable; 
430.28     (vii) massages, except when provided by a licensed health 
430.29  care facility or professional or upon written referral from a 
430.30  licensed health care facility or professional for treatment of 
430.31  illness, injury, or disease; and 
430.32     (viii) the furnishing of lodging, board, and care services 
430.33  for animals in kennels and other similar arrangements, but 
430.34  excluding veterinary and horse boarding services. 
430.35     The services listed in this clause (6) are taxable under 
430.36  section 297A.62 if the service is performed wholly within 
431.1   Minnesota or if the service is performed partly within and 
431.2   partly outside Minnesota and the greater proportion of the 
431.3   service is performed in Minnesota, based on the cost of 
431.4   performance.  In applying the provisions of this chapter, the 
431.5   terms "tangible personal property" and "sales at retail" include 
431.6   taxable services and the provision of taxable services, unless 
431.7   specifically provided otherwise.  Services performed by an 
431.8   employee for an employer are not taxable.  Services performed by 
431.9   a partnership or association for another partnership or 
431.10  association are not taxable if one of the entities owns or 
431.11  controls more than 80 percent of the voting power of the equity 
431.12  interest in the other entity.  Services performed between 
431.13  members of an affiliated group of corporations are not taxable.  
431.14  For purposes of this section, "affiliated group of corporations" 
431.15  includes those entities that would be classified as members of 
431.16  an affiliated group under United States Code, title 26, section 
431.17  1504, and that are eligible to file a consolidated tax return 
431.18  for federal income tax purposes. 
431.19     (h) A sale and a purchase includes the furnishing for a 
431.20  consideration of tangible personal property or taxable services 
431.21  by the United States or any of its agencies or 
431.22  instrumentalities, or the state of Minnesota, its agencies, 
431.23  instrumentalities, or political subdivisions. 
431.24     Sec. 5.  Minnesota Statutes 2000, section 297A.61, 
431.25  subdivision 4, is amended to read: 
431.26     Subd. 4.  [RETAIL SALE.] (a) A "retail sale" means a sale 
431.27  for any purpose other than resale in the regular course of 
431.28  business.  
431.29     (b) A sale of property used by the owner only by leasing it 
431.30  to others or by holding it in an effort to lease it, and put to 
431.31  no use by the owner other than resale after the lease or effort 
431.32  to lease, is a sale of property for resale.  
431.33     (c) A sale of master computer software that is purchased 
431.34  and used to make copies for sale or lease is a sale of property 
431.35  for resale.  
431.36     (d) A sale of building materials, supplies, and equipment 
432.1   to owners, contractors, subcontractors, or builders for the 
432.2   erection of buildings or the alteration, repair, or improvement 
432.3   of real property is a retail sale in whatever quantity sold, 
432.4   whether the sale is for purposes of resale in the form of real 
432.5   property or otherwise.  
432.6      (e) A sale of carpeting, linoleum, or similar floor 
432.7   covering to a person who provides for installation of the floor 
432.8   covering is a retail sale and not a sale for resale since a sale 
432.9   of floor covering which includes installation is a contract for 
432.10  the improvement of real property. 
432.11     (f) A sale of shrubbery, plants, sod, trees, and similar 
432.12  items to a person who provides for installation of the items is 
432.13  a retail sale and not a sale for resale since a sale of 
432.14  shrubbery, plants, sod, trees, and similar items that includes 
432.15  installation is a contract for the improvement of real property. 
432.16     (g) A sale of tangible personal property that is awarded as 
432.17  prizes is a retail sale and is not considered a sale of property 
432.18  for resale. 
432.19     (h) A sale of tangible personal property utilized or 
432.20  employed in the furnishing or providing of services under 
432.21  subdivision 16 3, paragraph (b) (g), clause (1), including, but 
432.22  not limited to, property given as promotional items, is a retail 
432.23  sale and is not considered a sale of property for resale. 
432.24     (i) A sale of tangible personal property used in conducting 
432.25  lawful gambling under chapter 349 or the state lottery under 
432.26  chapter 349A, including, but not limited to, property given as 
432.27  promotional items, is a retail sale and is not considered a sale 
432.28  of property for resale. 
432.29     (j) A sale of machines, equipment, or devices that are used 
432.30  to furnish, provide, or dispense goods or services, including, 
432.31  but not limited to, coin-operated devices, is a retail sale and 
432.32  is not considered a sale of property for resale. 
432.33     (k) In the case of a lease, a retail sale occurs when an 
432.34  obligation to make a lease payment becomes due under the terms 
432.35  of the agreement or the trade practices of the lessor. 
432.36     (l) In the case of a conditional sales contract, a retail 
433.1   sale occurs upon the transfer of title or possession of the 
433.2   tangible personal property. 
433.3      Sec. 6.  Minnesota Statutes 2000, section 297A.61, 
433.4   subdivision 6, is amended to read: 
433.5      Subd. 6.  [USE.] (a) "Use" includes the exercise of a right 
433.6   or power incident to the ownership of any interest in tangible 
433.7   personal property, or taxable services, purchased from a 
433.8   retailer, other than the sale of that property in the regular 
433.9   course of business.  
433.10     (b) Use includes the consumption of printed materials in 
433.11  the creation of nontaxable advertising that is distributed, 
433.12  either directly or indirectly, within Minnesota. 
433.13     Sec. 7.  Minnesota Statutes 2000, section 297A.61, 
433.14  subdivision 10, is amended to read: 
433.15     Subd. 10.  [TANGIBLE PERSONAL PROPERTY.] (a) "Tangible 
433.16  personal property" means corporeal personal property of any 
433.17  kind, including property that is to become real property as a 
433.18  result of incorporation, attachment, or installation following 
433.19  its acquisition. 
433.20     (b) Tangible personal property includes, but is not limited 
433.21  to: 
433.22     (1) computer software, whether contained on tape, discs, 
433.23  cards, or other devices; and 
433.24     (2) prepaid telephone calling cards.  
433.25     (c) Tangible personal property does not include: 
433.26     (1) large ponderous machinery and equipment used in a 
433.27  business or production activity which at common law would be 
433.28  considered to be real property; 
433.29     (2) property which is subject to an ad valorem property 
433.30  tax; 
433.31     (3) property described in section 272.02, subdivision 9, 
433.32  clauses (a) to (d); and 
433.33     (4) property described in section 272.03, subdivision 2, 
433.34  clauses (3) and (5). 
433.35     Sec. 8.  Minnesota Statutes 2000, section 297A.61, 
433.36  subdivision 14, is amended to read: 
434.1      Subd. 14.  [LEASING; LEASE.] "Leasing" includes all 
434.2   transfers of possession or the use of tangible personal property 
434.3   by the lessee for a consideration, if title remains with the 
434.4   lessor at the end of the lease.  For purposes of this chapter, A 
434.5   lease of tangible personal property is a series of sales 
434.6   transactions that impose upon the lessee multiple payment 
434.7   obligations.  "Leasing" does not include a transaction defined 
434.8   under subdivision 15.  
434.9      Sec. 9.  Minnesota Statutes 2000, section 297A.61, 
434.10  subdivision 17, is amended to read: 
434.11     Subd. 17.  [COMPUTER SOFTWARE.] "Computer software" means a 
434.12  computer program, either in the form of written procedures or in 
434.13  the form of storage media on which, or in which, the program is 
434.14  recorded contained on tapes, discs, cards, or another device, or 
434.15  any required documentation or manuals designed to facilitate the 
434.16  use of the computer program.  For purposes of this subdivision: 
434.17     (1) "Storage media" includes punched cards, tapes, discs, 
434.18  diskettes, or drums on which computer programs may be embodied 
434.19  or stored; 
434.20     (2) "Computer" does not include tape-controlled automatic 
434.21  drilling, milling, or other manufacturing machinery or 
434.22  equipment; and 
434.23     (3) (2) "Computer program" means information and directions 
434.24  that dictate the function performed by data processing 
434.25  equipment.  It includes the complete plan for the solution of a 
434.26  problem, such as the complete sequence of automatic data 
434.27  processing equipment instructions necessary to solve a problem 
434.28  and includes both systems and application programs and 
434.29  subdivisions, such as assemblers, compilers, routines, 
434.30  generators, and utility programs.  Computer program includes a 
434.31  "canned" or prewritten computer program that is held or existing 
434.32  for general or repeated sale or lease, even if the prewritten or 
434.33  "canned" program was initially developed on a custom basis or 
434.34  for in-house use. 
434.35     Sec. 10.  Minnesota Statutes 2000, section 297A.61, 
434.36  subdivision 19, is amended to read: 
435.1      Subd. 19.  [COMMON FOR-HIRE CARRIER.] "Common For-hire 
435.2   carrier" means a person engaged in transportation for hire of 
435.3   tangible personal property by motor vehicle, if the person:. 
435.4      (1) has a certificate or permit or has completed a 
435.5   registration process that authorizes for-hire transportation of 
435.6   property from the United States Department of Transportation, 
435.7   the transportation regulation board, or the department of 
435.8   transportation; 
435.9      (2) is transporting commodities defined as "exempt" in 
435.10  for-hire transportation; or 
435.11     (3) transports tangible personal property pursuant to a 
435.12  contract with a person described in clause (1) or (2). 
435.13     Sec. 11.  Minnesota Statutes 2000, section 297A.61, 
435.14  subdivision 22, is amended to read: 
435.15     Subd. 22.  [INTERNAL REVENUE CODE.] Unless specifically 
435.16  provided otherwise, "Internal Revenue Code" means the Internal 
435.17  Revenue Code of 1986, as amended through December 31, 1999 2000. 
435.18     Sec. 12.  Minnesota Statutes 2000, section 297A.61, 
435.19  subdivision 23, is amended to read: 
435.20     Subd. 23.  [UNITED STATES CODE.] Unless specifically 
435.21  provided otherwise, "United States Code" means the United States 
435.22  Code as amended through December 31, 1999 2000. 
435.23     Sec. 13.  Minnesota Statutes 2000, section 297A.66, 
435.24  subdivision 1, is amended to read: 
435.25     Subdivision 1.  [DEFINITIONS.] (a) "Retailer maintaining a 
435.26  place of business in this state," or a similar term, means a 
435.27  retailer: 
435.28     (1) having or maintaining within this state, directly or by 
435.29  a subsidiary, an office, place of distribution, sales or sample 
435.30  room or place, warehouse, or other place of business; or 
435.31     (2) having a representative, agent, salesperson, canvasser, 
435.32  or solicitor operating in this state under the authority of the 
435.33  retailer or its subsidiary, for any purpose, including the 
435.34  repairing, selling, delivering, installing, or soliciting of 
435.35  orders for the retailer's goods or services, or the leasing of 
435.36  tangible personal property located in this state, whether the 
436.1   place of business or agent, representative, salesperson, 
436.2   canvasser, or solicitor is located in the state permanently or 
436.3   temporarily, or whether or not the retailer or subsidiary is 
436.4   authorized to do business in this state. 
436.5      (b) "Destination of a sale" means the location to which the 
436.6   retailer makes delivery of the property sold, or causes the 
436.7   property to be delivered, to the purchaser of the property, or 
436.8   to the agent or designee of the purchaser.  The delivery may be 
436.9   made by any means, including the United States Postal Service, a 
436.10  common carrier, or a contract for-hire carrier. 
436.11     Sec. 14.  Minnesota Statutes 2000, section 297A.66, 
436.12  subdivision 3, is amended to read: 
436.13     Subd. 3.  [RETAILER NOT MAINTAINING A PLACE OF BUSINESS IN 
436.14  THIS STATE.] (a) To the extent allowed by the United States 
436.15  Constitution and the laws of the United States, a retailer 
436.16  making retail sales from outside this state to a destination 
436.17  within this state and not maintaining a place of business in 
436.18  this state shall collect sales and use taxes and remit them to 
436.19  the commissioner under section 297A.77, if the retailer engages 
436.20  in the regular or systematic soliciting of sales from potential 
436.21  customers in this state by: 
436.22     (1) distribution, by mail or otherwise, of catalogs, 
436.23  periodicals, advertising flyers, or other written solicitations 
436.24  of business to customers in this state; 
436.25     (2) display of advertisements on billboards or other 
436.26  outdoor advertising in this state; 
436.27     (3) advertisements in newspapers published in this state; 
436.28     (4) advertisements in trade journals or other periodicals 
436.29  the circulation of which is primarily within this state; 
436.30     (5) advertisements in a Minnesota edition of a national or 
436.31  regional publication or a limited regional edition in which this 
436.32  state is included as part of a broader regional or national 
436.33  publication which are not placed in other geographically defined 
436.34  editions of the same issue of the same publication; 
436.35     (6) advertisements in regional or national publications in 
436.36  an edition which is not by its contents geographically targeted 
437.1   to Minnesota but which is sold over the counter in Minnesota or 
437.2   by subscription to Minnesota residents; 
437.3      (7) advertisements broadcast on a radio or television 
437.4   station located in Minnesota; or 
437.5      (8) any other solicitation by telegraphy, telephone, 
437.6   computer database, cable, optic, microwave, or other 
437.7   communication system. 
437.8      This paragraph (a) must be construed without regard to the 
437.9   state from which distribution of the materials originated or in 
437.10  which they were prepared.  
437.11     (b) The location within or without this state of 
437.12  independent vendors independent of the retailer that provide 
437.13  products or services to the retailer in connection with its 
437.14  solicitation of customers within this state, including such 
437.15  products and services as creation of copy, printing, 
437.16  distribution, and recording, is not considered in determining 
437.17  whether the retailer is required to collect tax.  
437.18     (c) A retailer not maintaining a place of business in this 
437.19  state is presumed, subject to rebuttal, to be engaged in regular 
437.20  solicitation within this state if it engages in any of the 
437.21  activities in paragraph (a) and: 
437.22     (1) makes 100 or more retail sales from outside this state 
437.23  to destinations in this state during a period of 12 consecutive 
437.24  months; or 
437.25     (2) makes ten or more retail sales totaling more than 
437.26  $100,000 from outside this state to destinations in this state 
437.27  during a period of 12 consecutive months. 
437.28     Sec. 15.  Minnesota Statutes 2000, section 297A.67, 
437.29  subdivision 8, is amended to read: 
437.30     Subd. 8.  [CLOTHING.] Clothing and wearing apparel, 
437.31  including sewing materials to be directly incorporated into 
437.32  wearing apparel, are exempt.  For purposes of this subdivision, 
437.33  clothing and wearing apparel do not include the following: 
437.34     (1) articles designed primarily for use while engaging in a 
437.35  specific sport or recreational activity that are not also worn 
437.36  for general use; 
438.1      (2) articles designed primarily to provide safety or 
438.2   protection against injury while the user is engaged in 
438.3   industrial or general job activities; 
438.4      (3) all articles commonly or commercially known as jewelry 
438.5   including, but not limited to, watches; 
438.6      (4) nonprescription optical glasses of any sort; 
438.7      (5) articles made entirely of fur on the hide or pelt, or 
438.8   partially of such fur if the value of the fur is more than three 
438.9   times the value of the next most valuable component material; 
438.10     (6) perfume, lotions, creams, dyes, or other substances 
438.11  that are applied to the skin, nails, or the hair; and 
438.12     (7) luggage, bags, purses, wallets, or cases of any sort. 
438.13     Sec. 16.  Minnesota Statutes 2000, section 297A.67, 
438.14  subdivision 23, is amended to read: 
438.15     Subd. 23.  [OCCASIONAL SALES.] Isolated and occasional 
438.16  sales in Minnesota not made in the normal course of business, 
438.17  and of selling that kind of property or service are exempt.  The 
438.18  storage, use, or consumption of property or services resulting 
438.19  from such sales, are acquired as a result of such a sale is 
438.20  exempt.  This exemption does not apply to sales of tangible 
438.21  personal property primarily used in a trade or business. 
438.22     Sec. 17.  Minnesota Statutes 2000, section 297A.67, 
438.23  subdivision 24, is amended to read: 
438.24     Subd. 24.  [CONSTITUTIONAL PROHIBITIONS.] The gross 
438.25  receipts from The sale of and the storage, use, or other 
438.26  consumption in Minnesota of tangible personal property, tickets, 
438.27  or admissions, electricity, gas, or local exchange telephone 
438.28  service or services, that the state of Minnesota is prohibited 
438.29  from taxing under the Constitution or laws of the United States 
438.30  or under the Constitution of Minnesota, are exempt. 
438.31     Sec. 18.  Minnesota Statutes 2000, section 297A.67, 
438.32  subdivision 25, is amended to read: 
438.33     Subd. 25.  [MAINTENANCE OF CEMETERY GROUNDS.] Lawn care and 
438.34  related services used in the maintenance of cemetery grounds are 
438.35  exempt.  For purposes of this subdivision, "lawn care and 
438.36  related services" means the services listed in section 297A.61, 
439.1   subdivision 16 3, paragraph (g), clause (6), item (vi), and 
439.2   "cemetery" means a cemetery for human burial. 
439.3      Sec. 19.  Minnesota Statutes 2000, section 297A.68, 
439.4   subdivision 2, is amended to read: 
439.5      Subd. 2.  [MATERIALS CONSUMED IN INDUSTRIAL PRODUCTION.] 
439.6   (a) Materials stored, used, or consumed in industrial production 
439.7   of personal property intended to be sold ultimately at retail 
439.8   are exempt, whether or not the item so used becomes an 
439.9   ingredient or constituent part of the property produced.  
439.10  Materials that qualify for this exemption include, but are not 
439.11  limited to, the following: 
439.12     (1) chemicals, including chemicals used for cleaning food 
439.13  processing machinery and equipment; 
439.14     (2) materials, including chemicals, fuels, and electricity 
439.15  purchased by persons engaged in industrial production to treat 
439.16  waste generated as a result of the production process; 
439.17     (3) fuels, electricity, gas, and steam used or consumed in 
439.18  the production process, except that electricity, gas, or steam 
439.19  used for space heating, cooling, or lighting is exempt only if 
439.20  (i) it is in excess of the average climate control or lighting 
439.21  for the production area, and (ii) it is necessary to produce 
439.22  that particular industrial product; 
439.23     (4) petroleum products and lubricants; 
439.24     (5) packaging materials, including returnable containers 
439.25  used in packaging food and beverage products; 
439.26     (6) accessory tools, equipment, and other items that are 
439.27  separate detachable units with an ordinary useful life of less 
439.28  than 12 months used in producing a direct effect upon the 
439.29  product; and 
439.30     (7) the following materials, tools, and equipment used in 
439.31  metalcasting:  crucibles, thermocouple protection sheaths and 
439.32  tubes, stalk tubes, refractory materials, molten metal filters 
439.33  and filter boxes, degassing lances, and base blocks. 
439.34     (b) This exemption does not include: 
439.35     (1) machinery, equipment, implements, tools, accessories, 
439.36  appliances, contrivances and furniture and fixtures, except 
440.1   those listed in paragraph (a), clause (6); and 
440.2      (2) petroleum and special fuels used in producing or 
440.3   generating power for propelling ready-mixed concrete trucks on 
440.4   the public highways of this state. 
440.5      (c) Industrial production includes, but is not limited to, 
440.6   research, development, design or production of any tangible 
440.7   personal property, manufacturing, processing (other than by 
440.8   restaurants and consumers) of agricultural products (whether 
440.9   vegetable or animal), commercial fishing, refining, smelting, 
440.10  reducing, brewing, distilling, printing, mining, quarrying, 
440.11  lumbering, generating electricity and the production of road 
440.12  building materials.  Industrial production does not include 
440.13  painting, cleaning, repairing or similar processing of property 
440.14  except as part of the original manufacturing process.  
440.15     Sec. 20.  Minnesota Statutes 2000, section 297A.68, 
440.16  subdivision 3, is amended to read: 
440.17     Subd. 3.  [MATERIALS USED IN PROVIDING CERTAIN TAXABLE 
440.18  SERVICES.] (a) Materials stored, used, or consumed in providing 
440.19  a taxable service listed in section 297A.61, subdivision 16 3, 
440.20  paragraph (g), clause (6), intended to be sold ultimately at 
440.21  retail are exempt. 
440.22     (b) This exemption includes, but is not limited to: 
440.23     (1) chemicals, lubricants, packaging materials, seeds, 
440.24  trees, fertilizers, and herbicides, if these items are used or 
440.25  consumed in providing the taxable service; 
440.26     (2) chemicals used to treat waste generated as a result of 
440.27  providing the taxable service; 
440.28     (3) accessory tools, equipment, and other items that are 
440.29  separate detachable units used in providing the service and that 
440.30  have an ordinary useful life of less than 12 months; and 
440.31     (4) fuel, electricity, gas, and steam used or consumed in 
440.32  the production process, except that electricity, gas, or steam 
440.33  used for space heating, cooling, or lighting is exempt only if 
440.34  (i) it is in excess of average climate control or lighting, and 
440.35  (ii) it is necessary to produce that particular taxable service. 
440.36     (c) This exemption does not include machinery, equipment, 
441.1   implements, tools, accessories, appliances, contrivances, 
441.2   furniture, and fixtures used in providing the taxable service. 
441.3      Sec. 21.  Minnesota Statutes 2000, section 297A.68, 
441.4   subdivision 5, is amended to read: 
441.5      Subd. 5.  [CAPITAL EQUIPMENT.] (a) Capital equipment is 
441.6   exempt.  The tax must be imposed and collected as if the rate 
441.7   under section 297A.62, subdivision 1, applied, and then refunded 
441.8   in the manner provided in section 297A.75. 
441.9      "Capital equipment" means machinery and equipment purchased 
441.10  or leased, and used in this state by the purchaser or lessee 
441.11  primarily for manufacturing, fabricating, mining, or refining 
441.12  tangible personal property to be sold ultimately at retail. 
441.13     Capital equipment means if the machinery and equipment is 
441.14  essential to the integrated production process of manufacturing, 
441.15  fabricating, mining, or refining.  Capital equipment also 
441.16  includes machinery and equipment used to electronically transmit 
441.17  results retrieved by a customer of an online computerized data 
441.18  retrieval system. 
441.19     (b) Capital equipment includes, but is not limited to: 
441.20     (1) machinery and equipment used to operate, control, or 
441.21  regulate the production equipment; 
441.22     (2) machinery and equipment used for research and 
441.23  development, design, quality control, and testing activities; 
441.24     (3) environmental control devices that are used to maintain 
441.25  conditions such as temperature, humidity, light, or air pressure 
441.26  when those conditions are essential to and are part of the 
441.27  production process; 
441.28     (4) materials and supplies used to construct and install 
441.29  machinery or equipment; 
441.30     (5) repair and replacement parts, including accessories, 
441.31  whether purchased as spare parts, repair parts, or as upgrades 
441.32  or modifications to machinery or equipment; 
441.33     (6) materials used for foundations that support machinery 
441.34  or equipment; 
441.35     (7) materials used to construct and install special purpose 
441.36  buildings used in the production process; and 
442.1      (8) ready-mixed concrete trucks in which the ready-mixed 
442.2   concrete is mixed as part of the delivery process.  
442.3      (c) Capital equipment does not include the following: 
442.4      (1) motor vehicles taxed under chapter 297B; 
442.5      (2) machinery or equipment used to receive or store raw 
442.6   materials; 
442.7      (3) building materials, except for materials included in 
442.8   paragraph (b), clauses (6) and (7); 
442.9      (4) machinery or equipment used for nonproduction purposes, 
442.10  including, but not limited to, the following:  plant security, 
442.11  fire prevention, first aid, and hospital stations; support 
442.12  operations or administration; pollution control; and plant 
442.13  cleaning, disposal of scrap and waste, plant communications, 
442.14  space heating, cooling, lighting, or safety; 
442.15     (5) farm machinery and aquaculture production equipment as 
442.16  defined by section 297A.61, subdivisions 12 and 13; 
442.17     (6) machinery or equipment purchased and installed by a 
442.18  contractor as part of an improvement to real property; or 
442.19     (7) any other item that is not essential to the integrated 
442.20  process of manufacturing, fabricating, mining, or refining. 
442.21     (d) For purposes of this subdivision: 
442.22     (1) "Machinery" means mechanical, electronic, or electrical 
442.23  devices, including computers and computer software, that are 
442.24  purchased or constructed to be used for the activities set forth 
442.25  in paragraph (a), beginning with the removal of raw materials 
442.26  from inventory through completion of the product, including 
442.27  packaging of the product. 
442.28     (2) "Equipment" means independent devices or tools separate 
442.29  from machinery but essential to an integrated production 
442.30  process, including computers and computer software, used in 
442.31  operating, controlling, or regulating machinery and equipment; 
442.32  and any subunit or assembly comprising a component of any 
442.33  machinery or accessory or attachment parts of machinery, such as 
442.34  tools, dies, jigs, patterns, and molds.  
442.35     (3) "Primarily" means machinery and equipment used 50 
442.36  percent or more of the time in an activity described in 
443.1   paragraph (a). 
443.2      (4) "Manufacturing" means an operation or series of 
443.3   operations where raw materials are changed in form, composition, 
443.4   or condition by machinery and equipment and which results in the 
443.5   production of a new article of tangible personal property.  For 
443.6   purposes of this subdivision, "manufacturing" includes the 
443.7   generation of electricity or steam to be sold at retail. 
443.8      (5) "Fabricating" means to make, build, create, produce, or 
443.9   assemble components or property to work in a new or different 
443.10  manner. 
443.11     (6) "Mining" means the extraction of minerals, ores, stone, 
443.12  or peat. 
443.13     (7) "Refining" means the process of converting a natural 
443.14  resource to a product, including the treatment of water to be 
443.15  sold at retail. 
443.16     (8) "Integrated production process" means a process 
443.17  beginning with the removal of raw materials from inventory 
443.18  through the completion of the product, including packaging of 
443.19  the product. 
443.20     (9) "Online data retrieval system" means a system whose 
443.21  cumulation of information is equally available and accessible to 
443.22  all its customers. 
443.23     (10) (9) "Machinery and equipment used for pollution 
443.24  control" means machinery and equipment used solely to eliminate, 
443.25  prevent, or reduce pollution resulting from an activity 
443.26  described in paragraph (a).  
443.27     Sec. 22.  Minnesota Statutes 2000, section 297A.68, 
443.28  subdivision 11, is amended to read: 
443.29     Subd. 11.  [ADVERTISING MATERIALS.] Material Materials 
443.30  designed to advertise and promote the sale of merchandise or 
443.31  services is are exempt if the material is purchased and stored 
443.32  for the purpose of subsequently shipping or otherwise 
443.33  transferring outside the state by the purchaser for later these 
443.34  materials are mailed or transferred to a person outside the 
443.35  state for use solely outside the state of Minnesota.  Mailing 
443.36  and reply envelopes and cards used exclusively in connection 
444.1   with these advertising and promotional materials are included in 
444.2   this exemption.  The exemption applies regardless of where the 
444.3   mailing occurs.  The storage of these materials in the state for 
444.4   the purpose of subsequently shipping or otherwise transferring 
444.5   the material out of state is also exempt if the other conditions 
444.6   in this subdivision are met. 
444.7      Sec. 23.  Minnesota Statutes 2000, section 297A.68, 
444.8   subdivision 13, is amended to read: 
444.9      Subd. 13.  [OUTSTATE TRANSPORT OR DELIVERY.] (a) Tangible 
444.10  personal property is exempt if the property, without 
444.11  intermediate use, is all of the following conditions are met:  
444.12     (1) the property, without intermediate use, is shipped or 
444.13  transported outside Minnesota by the purchaser or is stored, 
444.14  processed, fabricated or manufactured into, attached to or 
444.15  incorporated into other tangible personal property that is 
444.16  transported or shipped outside Minnesota; and 
444.17     (2) the property is used in a trade or business outside 
444.18  Minnesota after being shipped or transported outside of 
444.19  Minnesota, and is not returned to Minnesota, except in the 
444.20  course of interstate commerce; and 
444.21     (3) the property is either (i) not subject to tax in the 
444.22  state or country to which it is transported for storage or use, 
444.23  or (ii) to be used in other states or countries as part of a 
444.24  maintenance contract. 
444.25     (b) For purposes of this subdivision, storage or 
444.26  processing, fabricating, manufacturing, attaching to, or 
444.27  incorporating into other property is not intermediate use. 
444.28     Sec. 24.  Minnesota Statutes 2000, section 297A.68, 
444.29  subdivision 14, is amended to read: 
444.30     Subd. 14.  [TEMPORARY STORAGE PROPERTY IN TRANSIT.] 
444.31  Tangible personal property is exempt if all of the following 
444.32  conditions are met: 
444.33     (1) it is shipped or brought into Minnesota by a common 
444.34  for-hire carrier; 
444.35     (2) without intermediate use, it is kept in a public 
444.36  warehouse; 
445.1      (3) it is kept for the purpose of being later transported 
445.2   outside Minnesota; and 
445.3      (4) after storage, it is used solely outside Minnesota, 
445.4   except in the course of interstate commerce. 
445.5      Sec. 25.  Minnesota Statutes 2000, section 297A.68, 
445.6   subdivision 18, is amended to read: 
445.7      Subd. 18.  [CUSTOM COMPUTER SOFTWARE.] The design, 
445.8   development, writing, translation, fabrication, lease, or 
445.9   transfer for a consideration of title or possession of a custom 
445.10  computer program is exempt.  "Custom computer program" means a 
445.11  computer program prepared to the special order of the customer, 
445.12  either in the form of written procedures or in the form of 
445.13  storage media on which, or in which, the program is 
445.14  recorded contained on tapes, discs, cards, or another device, or 
445.15  any required documentation or manuals designed to facilitate the 
445.16  use of the custom computer program transferred.  It includes 
445.17  those services represented by separately stated charges for 
445.18  modifications to an existing prewritten program that are 
445.19  prepared to the special order of the customer.  It does not 
445.20  include a "canned" or prewritten computer program that is held 
445.21  or existing for general or repeated sale or lease, even if the 
445.22  prewritten or "canned" program was initially developed on a 
445.23  custom basis or for in-house use.  Modification to an existing 
445.24  prewritten program to meet the customer's needs is custom 
445.25  computer programming only to the extent of the modification.  
445.26     Sec. 26.  Minnesota Statutes 2000, section 297A.68, 
445.27  subdivision 25, is amended to read: 
445.28     Subd. 25.  [OCCASIONAL SALES SALE OF PROPERTY USED IN A 
445.29  TRADE OR BUSINESS.] (a) Isolated or occasional sales of The sale 
445.30  of tangible personal property in Minnesota primarily used in a 
445.31  trade or business is exempt if the sale is not made in the 
445.32  normal course of business of selling that kind of property are 
445.33  exempt.  The storage, use, or consumption of property acquired 
445.34  as a result of such a sale is exempt. 
445.35     (b) This exemption applies to a sale of tangible personal 
445.36  property primarily used in a trade or business only and if one 
446.1   of the following conditions is satisfied:  
446.2      (1) the sale occurs in a transaction subject to or 
446.3   described in section 118, 331, 332, 336, 337, 338, 351, 355, 
446.4   368, 721, 731, 1031, or 1033 of the Internal Revenue Code; 
446.5      (2) the sale is between members of a controlled group as 
446.6   defined in section 1563(a) of the Internal Revenue Code; 
446.7      (3) the sale is a sale of farm machinery; 
446.8      (4) the sale is a farm auction sale; 
446.9      (5) the sale is a sale of substantially all of the assets 
446.10  of a trade or business; or 
446.11     (6) the total amount of gross receipts from the sale of 
446.12  trade or business property made during the calendar month of the 
446.13  sale and the preceding 11 calendar months does not exceed $1,000.
446.14     The use, storage, distribution, or consumption of tangible 
446.15  personal property acquired as a result of a sale exempt under 
446.16  this subdivision is also exempt. 
446.17     (c) (b) For purposes of this subdivision, the following 
446.18  terms have the meanings given.  
446.19     (1) A "farm auction" is a public auction conducted by a 
446.20  licensed auctioneer if substantially all of the property sold 
446.21  consists of property used in the trade or business of farming 
446.22  and property not used primarily in a trade or business. 
446.23     (2) "Trade or business" includes the assets of a separate 
446.24  division, branch, or identifiable segment of a trade or business 
446.25  if, before the sale, the income and expenses attributable to the 
446.26  separate division, branch, or identifiable segment could be 
446.27  separately ascertained from the books of account or record (the 
446.28  lease or rental of an identifiable segment does not qualify for 
446.29  the exemption). 
446.30     (3) A "sale of substantially all of the assets of a trade 
446.31  or business" must occur as a single transaction or a series of 
446.32  related transactions within the 12-month period beginning on the 
446.33  date of the first sale of assets intended to qualify for the 
446.34  exemption provided in paragraph (b) (a), clause (5). 
446.35     Sec. 27.  Minnesota Statutes 2000, section 297A.69, 
446.36  subdivision 2, is amended to read: 
447.1      Subd. 2.  [MATERIALS CONSUMED IN AGRICULTURAL PRODUCTION.] 
447.2   (a) Materials stored, used, or consumed in agricultural 
447.3   production of personal property intended to be sold ultimately 
447.4   at retail are exempt, whether or not the item becomes an 
447.5   ingredient or constituent part of the property produced.  
447.6   Materials that qualify for this exemption include, but are not 
447.7   limited to, the following: 
447.8      (1) feeds, seeds, trees, fertilizers, and herbicides, 
447.9   including when purchased for use by farmers in a federal or 
447.10  state farm or conservation program; 
447.11     (2) materials sold to a veterinarian to be used or consumed 
447.12  in the care, medication, and treatment of agricultural 
447.13  production animals and horses; 
447.14     (3) chemicals, including chemicals used for cleaning food 
447.15  processing machinery and equipment; 
447.16     (4) materials, including chemicals, fuels, and electricity 
447.17  purchased by persons engaged in agricultural production to treat 
447.18  waste generated as a result of the production process; 
447.19     (5) fuels, electricity, gas, and steam used or consumed in 
447.20  the production process, except that electricity, gas, or steam 
447.21  used for space heating, cooling, or lighting is exempt only if 
447.22  (i) it is in excess of the average climate control or lighting 
447.23  for the production area, and (ii) it is necessary to produce 
447.24  that particular agricultural product; 
447.25     (6) petroleum products and lubricants; 
447.26     (7) packaging materials, including returnable containers 
447.27  used in packaging food and beverage products; and 
447.28     (8) accessory tools and equipment that are separate 
447.29  detachable units with an ordinary useful life of less than 12 
447.30  months used in producing a direct effect upon the product. 
447.31  Machinery, equipment, implements, tools, accessories, 
447.32  appliances, contrivances, and furniture and fixtures, except 
447.33  those listed in this clause are not included within this 
447.34  exemption. 
447.35     (b) For purposes of this subdivision, "agricultural 
447.36  production" includes, but is not limited to, horticulture, 
448.1   floriculture, maple syrup harvesting, and the raising of pets, 
448.2   fur-bearing animals, research animals, horses, farmed cervidae 
448.3   as defined in section 17.451, subdivision 2, llamas as defined 
448.4   in section 17.455, subdivision 2, and ratitae as defined in 
448.5   section 17.453, subdivision 3. 
448.6      Sec. 28.  Minnesota Statutes 2000, section 297A.70, 
448.7   subdivision 1, is amended to read: 
448.8      Subdivision 1.  [SCOPE.] (a) To the extent provided in this 
448.9   section, the gross receipts from sales of items to or by, and 
448.10  storage, distribution, use, or consumption of items by the 
448.11  organizations listed in this section are specifically exempted 
448.12  from the taxes imposed by this chapter. 
448.13     (b) Notwithstanding any law to the contrary enacted before 
448.14  1992, only sales to governments and political subdivisions 
448.15  listed in this section are exempt from the taxes imposed by this 
448.16  chapter.  
448.17     (c) "Sales" includes purchases under an installment 
448.18  contract or lease purchase agreement under section 465.71. 
448.19     Sec. 29.  Minnesota Statutes 2000, section 297A.70, 
448.20  subdivision 2, is amended to read: 
448.21     Subd. 2.  [SALES TO GOVERNMENT.] (a) All sales, except 
448.22  those listed in paragraph (b), to the following governments and 
448.23  political subdivisions, or to the listed agencies or 
448.24  instrumentalities of governments and political subdivisions, are 
448.25  exempt: 
448.26     (1) the United States and its agencies and 
448.27  instrumentalities; 
448.28     (2) school districts, the University of Minnesota, state 
448.29  universities, community colleges, technical colleges, state 
448.30  academies, the Perpich Minnesota center for arts education, and 
448.31  an instrumentality of a political subdivision that is accredited 
448.32  as an optional/special function school by the North Central 
448.33  Association of Colleges and Schools; 
448.34     (3) hospitals and nursing homes owned and operated by 
448.35  political subdivisions of the state; 
448.36     (4) other states or political subdivisions of other states, 
449.1   if the sale would be exempt from taxation if it occurred in that 
449.2   state; and 
449.3      (5) sales to public libraries, public library systems, 
449.4   multicounty, multitype library systems as defined in section 
449.5   134.001, county law libraries under chapter 134A, state agency 
449.6   libraries, the state library under section 480.09, and the 
449.7   legislative reference library.  
449.8      (b) This exemption does not apply to the sales of the 
449.9   following products and services: 
449.10     (1) building, construction, or reconstruction materials 
449.11  purchased by a contractor or a subcontractor as a part of a 
449.12  lump-sum contract or similar type of contract with a guaranteed 
449.13  maximum price covering both labor and materials for use in the 
449.14  construction, alteration, or repair of a building or facility; 
449.15     (2) construction materials purchased by tax exempt entities 
449.16  or their contractors to be used in constructing buildings or 
449.17  facilities which will not be used principally by the tax exempt 
449.18  entities; 
449.19     (3) the leasing of a motor vehicle as defined in section 
449.20  297B.01, subdivision 5, except for leases entered into by the 
449.21  United States or its agencies or instrumentalities; or 
449.22     (4) meals and lodging as defined under section 297A.61, 
449.23  subdivisions subdivision 3, paragraph paragraphs (d), and 16 
449.24  (g), paragraph (c) clause (2), except for meals and lodging 
449.25  purchased directly by the United States or its agencies or 
449.26  instrumentalities. 
449.27     (c) As used in this subdivision, "school districts" means 
449.28  public school entities and districts of every kind and nature 
449.29  organized under the laws of the state of Minnesota, and any 
449.30  instrumentality of a school district, as defined in section 
449.31  471.59. 
449.32     Sec. 30.  Minnesota Statutes 2000, section 297A.70, 
449.33  subdivision 4, is amended to read: 
449.34     Subd. 4.  [SALES TO NONPROFIT GROUPS.] (a) All sales, 
449.35  except those listed in paragraph (b), to the following 
449.36  "nonprofit organizations" are exempt: 
450.1      (1) an entity a corporation, society, association, 
450.2   foundation, or institution organized and operated exclusively 
450.3   for charitable, religious, or educational purposes if the item 
450.4   purchased is used in the performance of charitable, religious, 
450.5   or educational functions; and 
450.6      (2) any senior citizen group or association of groups that: 
450.7      (i) in general limits membership to persons who are either 
450.8   age 55 or older, or physically disabled; and 
450.9      (ii) is organized and operated exclusively for pleasure, 
450.10  recreation, and other nonprofit purposes, no part of the net 
450.11  earnings of which inures to the benefit of any private 
450.12  shareholders; and. 
450.13     (3) an entity organized and operated exclusively to 
450.14  maintain 
450.15  For purposes of this subdivision, charitable purpose includes 
450.16  the maintenance of a cemetery owned by a religious organization. 
450.17     (b) This exemption does not apply to the following sales: 
450.18     (1) building, construction, or reconstruction materials 
450.19  purchased by a contractor or a subcontractor as a part of a 
450.20  lump-sum contract or similar type of contract with a guaranteed 
450.21  maximum price covering both labor and materials for use in the 
450.22  construction, alteration, or repair of a building or facility; 
450.23     (2) construction materials purchased by tax-exempt entities 
450.24  or their contractors to be used in constructing buildings or 
450.25  facilities that will not be used principally by the tax-exempt 
450.26  entities; and 
450.27     (3) meals and lodging as defined under section 297A.61, 
450.28  subdivisions subdivision 3, paragraph paragraphs (d), and 
450.29  16 (g), paragraph (c) clause (2); and 
450.30     (4) leasing of a motor vehicle as defined in section 
450.31  297B.01, subdivision 5, except as provided in paragraph (c). 
450.32     (c) This exemption applies to the leasing of a motor 
450.33  vehicle as defined in section 297B.01, subdivision 5, only if 
450.34  the vehicle is: 
450.35     (1) a truck, as defined in section 168.011, a bus, as 
450.36  defined in section 168.011, or a passenger automobile, as 
451.1   defined in section 168.011, if the automobile is designed and 
451.2   used for carrying more than nine persons including the driver; 
451.3   and 
451.4      (2) intended to be used primarily to transport tangible 
451.5   personal property or individuals, other than employees, to whom 
451.6   the organization provides service in performing its charitable, 
451.7   religious, or educational purpose. 
451.8      Sec. 31.  Minnesota Statutes 2000, section 297A.70, 
451.9   subdivision 7, is amended to read: 
451.10     Subd. 7.  [HOSPITALS AND OUTPATIENT SURGICAL CENTERS.] (a) 
451.11  Sales, except for those listed in paragraph (c), to a hospital 
451.12  are exempt, if the items purchased are used in providing 
451.13  hospital services.  For purposes of this subdivision, "hospital" 
451.14  means a hospital organized and operated for charitable purposes 
451.15  within the meaning of section 501(c)(3) of the Internal Revenue 
451.16  Code, and licensed under chapter 144 or by any other 
451.17  jurisdiction, and "hospital services" are services authorized or 
451.18  required to be performed by a "hospital" under chapter 144. 
451.19     (b) Sales, except for those listed in paragraph (c), to an 
451.20  outpatient surgical center are exempt, if the items purchased 
451.21  are used in providing outpatient surgical services.  For 
451.22  purposes of this subdivision, "outpatient surgical center" means 
451.23  an outpatient surgical center organized and operated for 
451.24  charitable purposes within the meaning of section 501(c)(3) of 
451.25  the Internal Revenue Code, and licensed under chapter 144 or by 
451.26  any other jurisdiction.  For the purposes of this subdivision, 
451.27  "outpatient surgical services" means:  (1) services authorized 
451.28  or required to be performed by an outpatient surgical center 
451.29  under chapter 144 or under the applicable licensure law of any 
451.30  other jurisdiction; and (2) urgent care.  For purposes of this 
451.31  subdivision, "urgent care" means health services furnished to a 
451.32  person whose medical condition is sufficiently acute to require 
451.33  treatment unavailable through, or inappropriate to be provided 
451.34  by, a clinic or physician's office, but not so acute as to 
451.35  require treatment in a hospital emergency room.  
451.36     (c) This exemption does not apply to the following products 
452.1   and services: 
452.2      (1) purchases made by a clinic, physician's office, or any 
452.3   other medical facility not operating as a hospital or outpatient 
452.4   surgical center, even though the clinic, office, or facility may 
452.5   be owned and operated by a hospital or outpatient surgical 
452.6   center; 
452.7      (2) sales under section 297A.61, subdivisions 3, paragraph 
452.8   (d), and 16, paragraph (c); 
452.9      (3) building and construction materials used in 
452.10  constructing buildings or facilities that will not be used 
452.11  principally by the hospital or outpatient surgical center; 
452.12     (4) building, construction, or reconstruction materials 
452.13  purchased by a contractor or a subcontractor as a part of a 
452.14  lump-sum contract or similar type of contract with a guaranteed 
452.15  maximum price covering both labor and materials for use in the 
452.16  construction, alteration, or repair of a hospital or outpatient 
452.17  surgical center; or 
452.18     (5) the leasing of a motor vehicle as defined in section 
452.19  297B.01, subdivision 5. 
452.20     Sec. 32.  Minnesota Statutes 2000, section 297A.70, 
452.21  subdivision 8, is amended to read: 
452.22     Subd. 8.  [REGIONWIDE PUBLIC SAFETY RADIO COMMUNICATION 
452.23  SYSTEM; PRODUCTS AND SERVICES.] Products and services including, 
452.24  but not limited to, end user equipment used for construction, 
452.25  ownership, operation, maintenance, and enhancement of the 
452.26  backbone system of the regionwide public safety radio 
452.27  communication system established under sections 473.891 to 
452.28  473.905, are exempt.  For purposes of this subdivision, backbone 
452.29  system is defined in section 473.891, subdivision 9.  This 
452.30  subdivision is effective for purchases, sales, storage, use, or 
452.31  consumption occurring before August 1, 2003, in the counties of 
452.32  Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. 
452.33     Sec. 33.  Minnesota Statutes 2000, section 297A.70, 
452.34  subdivision 10, is amended to read: 
452.35     Subd. 10.  [NONPROFIT TICKETS OR ADMISSIONS.] Tickets or 
452.36  admissions to the premises of or events sponsored by an 
453.1   organization that provides an opportunity for citizens of the 
453.2   state to participate in the creation, performance, or 
453.3   appreciation of the arts are exempt if the organization is 
453.4   either: 
453.5      (1) a tax-exempt organization within the meaning of 
453.6   Minnesota Statutes 1980, section 290.05, subdivision 1, clause 
453.7   (i), a corporation, fund, foundation, trust, or association if 
453.8   (i) it is organized for exclusively scientific, literary, 
453.9   religious, charitable, educational, or artistic purposes, or for 
453.10  the purpose of making contributions to or for the use of the 
453.11  United States of America, the state of Minnesota or any of its 
453.12  political subdivisions for exclusively public purposes, or for 
453.13  any combination of the purposes listed in this clause, and (ii) 
453.14  no part of the net income of the corporation, fund, foundation, 
453.15  trust, or association inures to the benefit of any private 
453.16  member, stockholder, or individual; or 
453.17     (2) a municipal board that promotes cultural and arts 
453.18  activities. 
453.19  The exemption provided with respect to a municipal board applies 
453.20  only to tickets and admissions to events sponsored by the board. 
453.21     Sec. 34.  Minnesota Statutes 2000, section 297A.70, 
453.22  subdivision 13, is amended to read: 
453.23     Subd. 13.  [FUNDRAISING SALES BY OR FOR NONPROFIT GROUPS.] 
453.24  (a) The following sales by the specified organizations for 
453.25  fundraising purposes are exempt, subject to the limitations 
453.26  listed in paragraph (b): 
453.27     (1) all sales made by an organization that exists solely 
453.28  for the purpose of providing educational or social activities 
453.29  for young people primarily age 18 and under; 
453.30     (2) all sales made by an organization that is a senior 
453.31  citizen group or association of groups if (i) in general it 
453.32  limits membership to persons age 55 or older; (ii) it is 
453.33  organized and operated exclusively for pleasure, recreation, and 
453.34  other nonprofit purposes; and (iii) no part of its net earnings 
453.35  inures to the benefit of any private shareholders; 
453.36     (3) the sale or use of tickets or admissions to a golf 
454.1   tournament held in Minnesota if the beneficiary of the 
454.2   tournament's net proceeds qualifies as a tax-exempt organization 
454.3   under section 501(c)(3) of the Internal Revenue Code; and 
454.4      (4) sales of gum, candy, and candy products sold for 
454.5   fundraising purposes by a nonprofit organization that provides 
454.6   educational and social activities primarily for young people age 
454.7   18 years of age and under. 
454.8      (b) The exemptions listed in paragraph (a) are limited in 
454.9   the following manner: 
454.10     (1) the exemption under paragraph (a), clauses (1) and (2), 
454.11  applies only if the gross annual receipts of the organization 
454.12  from fundraising do not exceed $10,000; and 
454.13     (2) the exemption under paragraph (a), clause (1), does not 
454.14  apply if the sales are derived from admission charges or from 
454.15  activities for which the money must be deposited with the school 
454.16  district treasurer under section 123B.49, subdivision 2, or be 
454.17  recorded in the same manner as other revenues or expenditures of 
454.18  the school district under section 123B.49, subdivision 4. 
454.19     (c) For purposes of this subdivision, a club, association, 
454.20  or other organization of elementary or secondary school students 
454.21  organized for the purpose of carrying on sports, educational, or 
454.22  other extracurricular activities is a separate organization from 
454.23  the school district or school for purposes of applying the 
454.24  $10,000 limit. 
454.25     Sec. 35.  Minnesota Statutes 2000, section 297A.70, 
454.26  subdivision 14, is amended to read: 
454.27     Subd. 14.  [FUNDRAISING EVENTS SPONSORED BY NONPROFIT 
454.28  GROUPS.] (a) Sales of tangible personal property at, and 
454.29  admission charges for fundraising events sponsored by, a 
454.30  nonprofit organization are exempt if the entire proceeds, less 
454.31  the necessary expenses for the event, will be used solely and 
454.32  exclusively for charitable, religious, or educational purposes.  
454.33  Exempt sales include the sale of food, meals, and drinks, and 
454.34  taxable services at the fundraising event. 
454.35     (b) This exemption is limited in the following manner: 
454.36     (1) it does not apply to admission charges for events 
455.1   involving bingo or other gambling activities or to charges for 
455.2   use of amusement devices involving bingo or other gambling 
455.3   activities; 
455.4      (2) all gross receipts are taxable if the profits are not 
455.5   used solely and exclusively for charitable, religious, or 
455.6   educational purposes; 
455.7      (3) it does not apply unless the organization keeps a 
455.8   separate accounting record, including receipts and disbursements 
455.9   from each fundraising event that documents all deductions from 
455.10  gross receipts with receipts and other records; 
455.11     (4) it does not apply to any sale made by or in the name of 
455.12  a nonprofit corporation as the active or passive agent of a 
455.13  person that is not a nonprofit corporation; 
455.14     (5) all gross receipts are taxable if fundraising events 
455.15  exceed 24 days per year; and 
455.16     (6) it does not apply to fundraising events conducted on 
455.17  premises leased for more than five days but less than 30 days. 
455.18     (c) For purposes of this subdivision, a "nonprofit 
455.19  organization" means any unit of government, corporation, 
455.20  society, association, foundation, or institution organized and 
455.21  operated for charitable, religious, educational, civic, 
455.22  fraternal, and senior citizens' or veterans' purposes, no part 
455.23  of the net earnings of which inures to the benefit of a private 
455.24  individual. 
455.25     Sec. 36.  Minnesota Statutes 2000, section 297A.75, is 
455.26  amended to read: 
455.27     297A.75 [REFUND; APPROPRIATION.] 
455.28     Subdivision 1.  [TAX COLLECTED.] The tax on the gross 
455.29  receipts from the sale of the following exempt items must be 
455.30  imposed and collected as if the sale were taxable and the rate 
455.31  under section 297A.62, subdivision 1, applied.  The exempt items 
455.32  include: 
455.33     (1) capital equipment exempt under section 297A.68, 
455.34  subdivision 5; 
455.35     (2) building materials for an agricultural processing 
455.36  facility exempt under section 297A.71, subdivision 13; 
456.1      (3) building materials for mineral production facilities 
456.2   exempt under section 297A.71, subdivision 14; 
456.3      (4) building materials for correctional facilities under 
456.4   section 297A.71, subdivision 3; 
456.5      (5) building materials used in a residence for disabled 
456.6   veterans exempt under section 297A.71, subdivision 11; and 
456.7      (6) chair lifts, ramps, elevators, and associated building 
456.8   materials exempt under section 297A.71, subdivision 12; and 
456.9      (7) building materials for the Long Lake Conservation 
456.10  Center exempt under section 297A.71, subdivision 17. 
456.11     Subd. 2.  [REFUND; ELIGIBLE PERSONS.] Upon application on 
456.12  forms prescribed by the commissioner, a refund equal to the tax 
456.13  paid on the gross receipts of the exempt items must be paid to 
456.14  the applicant.  Only the following persons may apply for the 
456.15  refund: 
456.16     (1) for subdivision 1, clauses (1) to (3), the applicant 
456.17  must be the purchaser; 
456.18     (2) for subdivision 1, clause clauses (4) and (7), the 
456.19  applicant must be the governmental subdivision; 
456.20     (3) for subdivision 1, clause (5), the applicant must be 
456.21  the recipient of the benefits provided in United States Code, 
456.22  title 38, chapter 21; and 
456.23     (4) for subdivision 1, clause (6), the applicant must be 
456.24  the owner of the homestead property. 
456.25     Subd. 3.  [APPLICATION.] (a) The application must include 
456.26  sufficient information to permit the commissioner to verify the 
456.27  tax paid.  If the tax was paid by a contractor, subcontractor, 
456.28  or builder, under subdivision 1, clause (4), (5), or (6), or 
456.29  (7), the contractor, subcontractor, or builder must furnish to 
456.30  the refund applicant a statement including the cost of the 
456.31  exempt items and the taxes paid on the items unless otherwise 
456.32  specifically provided by this subdivision.  The provisions of 
456.33  sections 289A.40 and 289A.50 apply to refunds under this section.
456.34     (b) An applicant may not file more than two applications 
456.35  per calendar year for refunds for taxes paid on capital 
456.36  equipment exempt under section 297A.68, subdivision 5.  
457.1      Subd. 4.  [INTEREST.] Interest must be paid on the refund 
457.2   at the rate in section 270.76 from the date the refund claim is 
457.3   filed for taxes paid under subdivision 1, clauses (1) to (3), 
457.4   and (5), and from 60 days after the date the refund claim is 
457.5   filed with the commissioner for claims filed under subdivision 
457.6   1, clauses (4) and, (6), and (7). 
457.7      Subd. 5.  [APPROPRIATION.] The amount required to make the 
457.8   refunds is annually appropriated to the commissioner. 
457.9      Sec. 37.  Minnesota Statutes 2000, section 297A.77, 
457.10  subdivision 1, is amended to read: 
457.11     Subdivision 1.  [COLLECTION OF TAX AT TIME OF SALE.] The 
457.12  tax must be stated and charged separately from the sales 
457.13  price or charge for service insofar as practicable and must be 
457.14  collected by the seller from the purchaser.  
457.15     Sec. 38.  Minnesota Statutes 2000, section 297A.80, is 
457.16  amended to read: 
457.17     297A.80 [TAXES IN OTHER STATES; OFFSET AGAINST USE 
457.18  TAX CREDIT.] 
457.19     Subdivision 1.  [MULTISTATE TAX COMPACT STATES.] If an 
457.20  article of tangible personal property or an item listed in 
457.21  section 297A.63 has already been taxed for its sale, 
457.22  distribution, storage, use, or other consumption by another 
457.23  state, or a subdivision of another state, that is a member of 
457.24  the multistate tax compact, a tax credit is allowed to the 
457.25  person who paid the tax in the other state or subdivision of the 
457.26  other state under the provisions of section 290.171, article V. 
457.27     Subd. 2.  [OTHER STATES; GENERALLY.] If an article of 
457.28  tangible personal property or an item listed in section 297A.63 
457.29  has already been taxed by another state for its sale, 
457.30  distribution, storage, use, or other consumption in an amount 
457.31  less than the tax imposed by this chapter, then as to the person 
457.32  who paid the tax in the other state, section 297A.63 applies 
457.33  only at a rate measured by the difference between the rate 
457.34  imposed under section 297A.62 and the rate by which the previous 
457.35  tax was computed by another state not included in subdivision 1, 
457.36  a tax credit is allowed against the tax imposed in section 
458.1   297A.63 to the person who paid the tax in the amount of tax paid 
458.2   to the other state.  If the tax imposed in the other state is 
458.3   equal to or greater than The credit cannot exceed the tax 
458.4   imposed in this state, then no tax is due from that person under 
458.5   section 297A.63. 
458.6      Sec. 39.  Minnesota Statutes 2000, section 297A.82, 
458.7   subdivision 3, is amended to read: 
458.8      Subd. 3.  [PAYMENT OF TAX TO COMMISSIONER.] If the an 
458.9   aircraft is purchased from a person who is not the holder of a 
458.10  valid sales and use tax permit under this chapter, the purchaser 
458.11  shall pay the tax to the commissioner of revenue prior to 
458.12  registering or licensing the aircraft in this state.  The 
458.13  commissioner of revenue shall issue a certificate stating that 
458.14  the sales and use tax in respect to the transaction has been 
458.15  paid.  
458.16     Sec. 40.  Minnesota Statutes 2000, section 297A.89, 
458.17  subdivision 1, is amended to read: 
458.18     Subdivision 1.  [COMMISSIONER MAY PERMIT.] The commissioner 
458.19  may permit purchasers to pay taxes imposed by this chapter 
458.20  directly to the commissioner.  Any taxes paid by purchasers 
458.21  under this section are considered use taxes, except for local 
458.22  sales taxes when no corresponding local use tax is imposed.  
458.23     Sec. 41.  Minnesota Statutes 2000, section 297A.90, 
458.24  subdivision 1, is amended to read: 
458.25     Subdivision 1.  [REGISTRATION; RECORDS.] (a) A person who 
458.26  is engaged in interstate for-hire transportation of tangible 
458.27  personal property or passengers by motor vehicle may, under 
458.28  rules prescribed by the commissioner, register as a retailer and 
458.29  pay the taxes imposed by this chapter in accordance with this 
458.30  section.  Any taxes paid under this section are use taxes, 
458.31  except local sales taxes when no corresponding local use tax is 
458.32  imposed. 
458.33     (b) As used in this section, "person" means:  
458.34     (1) one who possesses a certificate or permit or has 
458.35  completed a registration process that authorizes for-hire 
458.36  transportation of property or passengers from the United States 
459.1   Department of Transportation, the transportation regulation 
459.2   board, or the department of transportation; 
459.3      (2) one who transports commodities defined as "exempt" in 
459.4   for-hire transportation in interstate commerce; or 
459.5      (3) one who transports tangible personal property in 
459.6   interstate commerce, pursuant to contracts with persons 
459.7   described in clause (1) or (2).  
459.8   Persons qualifying under clause (2) or (3) must maintain on a 
459.9   current basis the same type of mileage records that are required 
459.10  by persons specified in clause (1) by the United States 
459.11  Department of Transportation.  
459.12     (c) Persons who in the course of their business are 
459.13  transporting solely their own goods in interstate commerce may 
459.14  also register as retailers under rules prescribed by the 
459.15  commissioner and pay the taxes imposed by this chapter in 
459.16  accordance with this section.  
459.17     Sec. 42.  Minnesota Statutes 2000, section 297A.91, 
459.18  subdivision 1, is amended to read: 
459.19     Subdivision 1.  [SEIZURE OF PROPERTY USED IN ILLEGAL 
459.20  TRANSPORT.] (a) If the retailer does not have a sales or use tax 
459.21  permit and has been engaging in transporting personal property 
459.22  into the state without payment of the tax, the commissioner of 
459.23  revenue or the commissioner's agents may seize in the name of 
459.24  the state any truck, automobile, or means of transportation not 
459.25  owned or operated by a common for-hire carrier, used in the 
459.26  illegal importation and transportation of any tangible personal 
459.27  property by a retailer or the retailer's agent or employee.  The 
459.28  commissioner may demand the forfeiture and sale of the truck, 
459.29  automobile, or other means of transportation together with the 
459.30  property being transported illegally, unless the owner 
459.31  establishes to the satisfaction of the commissioner or the court 
459.32  that the owner had no notice or knowledge or reason to believe 
459.33  that the vehicle was used or intended to be used in any such 
459.34  violation. 
459.35     (b) Within two days after the seizure, the person making 
459.36  the seizure shall deliver an inventory of the vehicle and 
460.1   property seized to the person from whom the seizure was made, if 
460.2   known, and to any person known or believed to have any right, 
460.3   title, interest, or lien on the vehicle or property.  The person 
460.4   making the seizure shall also file a copy of the inventory with 
460.5   the commissioner.  
460.6      Sec. 43.  Minnesota Statutes 2000, section 297A.92, 
460.7   subdivision 2, is amended to read: 
460.8      Subd. 2.  [AUCTIONS OF SECURITY.] The commissioner may sell 
460.9   property deposited as security at public auction if necessary to 
460.10  recover the amount required to be collected, including any 
460.11  interest and penalties.  Notice of the sale must be served upon 
460.12  the person who deposited the security.  It must be served 
460.13  personally, or by mail as prescribed for the service of a notice 
460.14  of a deficiency an order of assessment under section 289A.37, 
460.15  subdivision 5.  After a sale any surplus above the amount due 
460.16  not required as security under this section must be returned to 
460.17  the person who deposited the security. 
460.18     Sec. 44.  Minnesota Statutes 2000, section 297A.94, is 
460.19  amended to read: 
460.20     297A.94 [DEPOSIT OF REVENUES.] 
460.21     (a) Except as provided in this section, the commissioner 
460.22  shall deposit the revenues, including interest and penalties, 
460.23  derived from the taxes imposed by this chapter in the state 
460.24  treasury and credit them to the general fund.  
460.25     (b) The commissioner shall deposit taxes in the Minnesota 
460.26  agricultural and economic account in the special revenue fund if:
460.27     (1) the taxes are derived from sales and use of property 
460.28  and services purchased for the construction and operation of an 
460.29  agricultural resource project; and 
460.30     (2) the purchase was made on or after the date on which a 
460.31  conditional commitment was made for a loan guaranty for the 
460.32  project under section 41A.04, subdivision 3. 
460.33  The commissioner of finance shall certify to the commissioner 
460.34  the date on which the project received the conditional 
460.35  commitment.  The amount deposited in the loan guaranty account 
460.36  must be reduced by any refunds and by the costs incurred by the 
461.1   department of revenue to administer and enforce the assessment 
461.2   and collection of the taxes.  
461.3      (c) The commissioner shall deposit the revenues, including 
461.4   interest and penalties, derived from the taxes imposed on sales 
461.5   and purchases included in section 297A.61, subdivision 16, 
461.6   paragraphs (b) and (f) 3, paragraph (g), clauses (1) and (5), in 
461.7   the state treasury, and credit them as follows: 
461.8      (1) first to the general obligation special tax bond debt 
461.9   service account in each fiscal year the amount required by 
461.10  section 16A.661, subdivision 3, paragraph (b); and 
461.11     (2) after the requirements of clause (1) have been met, the 
461.12  balance to the general fund. 
461.13     (d) The commissioner shall deposit the revenues, including 
461.14  interest and penalties, collected under section 297A.64, 
461.15  subdivision 5, in the state treasury and credit them to the 
461.16  general fund.  By July 15 of each year the commissioner shall 
461.17  transfer to the highway user tax distribution fund an amount 
461.18  equal to the excess fees collected under section 297A.64, 
461.19  subdivision 5, for the previous calendar year. 
461.20     (e) For fiscal year 2001, 97 percent, and for fiscal year 
461.21  2002 and thereafter, 87 percent of the revenues, including 
461.22  interest and penalties, transmitted to the commissioner under 
461.23  section 297A.65, must be deposited by the commissioner in the 
461.24  state treasury as follows: 
461.25     (1) 50 percent of the receipts must be deposited in the 
461.26  heritage enhancement account in the game and fish fund, and may 
461.27  be spent only on activities that improve, enhance, or protect 
461.28  fish and wildlife resources, including conservation, 
461.29  restoration, and enhancement of land, water, and other natural 
461.30  resources of the state; 
461.31     (2) 22.5 percent of the receipts must be deposited in the 
461.32  natural resources fund, and may be spent only for state parks 
461.33  and trails; 
461.34     (3) 22.5 percent of the receipts must be deposited in the 
461.35  natural resources fund, and may be spent only on metropolitan 
461.36  park and trail grants; 
462.1      (4) three percent of the receipts must be deposited in the 
462.2   natural resources fund, and may be spent only on local trail 
462.3   grants; and 
462.4      (5) two percent of the receipts must be deposited in the 
462.5   natural resources fund, and may be spent only for the Minnesota 
462.6   zoological garden, the Como park zoo and conservatory, and the 
462.7   Duluth zoo. 
462.8      (f) The revenue dedicated under paragraph (e) may not be 
462.9   used as a substitute for traditional sources of funding for the 
462.10  purposes specified, but the dedicated revenue shall supplement 
462.11  traditional sources of funding for those purposes.  Land 
462.12  acquired with money deposited in the game and fish fund under 
462.13  paragraph (e) must be open to public hunting and fishing during 
462.14  the open season.  At least 87 percent of the money deposited in 
462.15  the game and fish fund for improvement, enhancement, or 
462.16  protection of fish and wildlife resources under paragraph (e) 
462.17  must be allocated for field operations. 
462.18     Sec. 45.  Minnesota Statutes 2000, section 297A.99, 
462.19  subdivision 7, is amended to read: 
462.20     Subd. 7.  [EXEMPTIONS.] (a) All goods or services that are 
462.21  otherwise exempt from taxation under this chapter are exempt 
462.22  from a political subdivision's tax. 
462.23     (b) The gross receipts from the sale of tangible personal 
462.24  property that meets the requirement of section 297A.68, 
462.25  subdivision 13 or 14 15, are exempt, except the qualification 
462.26  test applies based on the boundaries of the political 
462.27  subdivision instead of the state of Minnesota. 
462.28     (c) All mobile transportation equipment, and parts and 
462.29  accessories attached to or to be attached to the equipment are 
462.30  exempt, if purchased by a holder of a motor carrier direct pay 
462.31  permit under section 297A.90.  
462.32     Sec. 46.  [INSTRUCTIONS TO REVISOR.] 
462.33     (a) In the next edition of Minnesota Statutes, the revisor 
462.34  of statutes shall put the definitions in section 297A.68, 
462.35  subdivision 5, paragraph (d), in alphabetical order and correct 
462.36  any references to the reordered definitions. 
463.1      (b) In the next edition of Minnesota Statutes, the revisor 
463.2   of statutes shall renumber section 297A.68, subdivision 27, as 
463.3   297A.67, subdivision 26, and correct any references to the 
463.4   renumbered section. 
463.5      Sec. 47.  [REPEALER.] 
463.6      Minnesota Statutes 2000, sections 297A.61, subdivision 16; 
463.7   297A.68, subdivision 21; and 297A.71, subdivision 21, are 
463.8   repealed. 
463.9      Sec. 48.  [EFFECTIVE DATE.] 
463.10     Each section of this act takes effect at the time the 
463.11  section it amends is effective under Laws 2000, chapter 418, 
463.12  article 1, section 46. 
463.13                             ARTICLE 19
463.14                         HEALTH CARE TAXES
463.15     Section 1.  Minnesota Statutes 2000, section 256B.19, 
463.16  subdivision 1c, is amended to read: 
463.17     Subd. 1c.  [ADDITIONAL PORTION OF NONFEDERAL SHARE.] In 
463.18  addition to any payment required under subdivision 1b, (a) 
463.19  Hennepin county shall be responsible for a monthly transfer 
463.20  payment of $1,500,000, due before noon on the 15th of each month 
463.21  and the University of Minnesota shall be responsible for a 
463.22  monthly transfer payment of $500,000 due before noon on the 15th 
463.23  of each month, beginning July 15, 1995.  These sums shall be 
463.24  part of the designated governmental unit's portion of the 
463.25  nonfederal share of medical assistance costs, but shall not be 
463.26  subject to payback provisions of section 256.025. 
463.27     (b) For the period from July 1, 2001, to June 30, 2003, the 
463.28  payment under paragraph (a) shall be $1,783,333 each month. 
463.29     Sec. 2.  Minnesota Statutes 2000, section 295.53, 
463.30  subdivision 4a, is amended to read: 
463.31     Subd. 4a.  [CREDIT FOR RESEARCH.] (a) In addition to the 
463.32  exemptions allowed under subdivision 1, a hospital or health 
463.33  care provider may claim an annual credit against the total 
463.34  amount of tax, if any, the hospital or health care provider owes 
463.35  for that calendar year under sections 295.50 to 295.57.  The 
463.36  credit shall equal 2.5 percent of revenues for patient services 
464.1   used to fund a percentage of expenditures for qualifying 
464.2   research conducted by an allowable research program as 
464.3   determined under paragraph (e).  The amount of the credit shall 
464.4   not exceed the tax liability of the hospital or health care 
464.5   provider under sections 295.50 to 295.57. 
464.6      (b) For purposes of this subdivision, the following 
464.7   requirements apply: 
464.8      (1) expenditures must be for program costs of qualifying 
464.9   research conducted by an allowable research program; 
464.10     (2) an allowable research program must be a formal program 
464.11  of medical and health care research conducted by an entity which 
464.12  is exempt under section 501(c)(3) of the Internal Revenue Code 
464.13  of 1986 or is owned and operated under authority of a 
464.14  governmental unit; 
464.15     (3) qualifying research must:  
464.16     (A) be approved in writing by the governing body of the 
464.17  hospital or health care provider which is taking the deduction 
464.18  credit under this subdivision; 
464.19     (B) have as its purpose the development of new knowledge in 
464.20  basic or applied science relating to the diagnosis and treatment 
464.21  of conditions affecting the human body; 
464.22     (C) be subject to review by individuals with expertise in 
464.23  the subject matter of the proposed study but who have no 
464.24  financial interest in the proposed study and are not involved in 
464.25  the conduct of the proposed study; and 
464.26     (D) be subject to review and supervision by an 
464.27  institutional review board operating in conformity with federal 
464.28  regulations if the research involves human subjects or an 
464.29  institutional animal care and use committee operating in 
464.30  conformity with federal regulations if the research involves 
464.31  animal subjects.  Research expenses are not exempt do not 
464.32  qualify for the credit if the study is a routine evaluation of 
464.33  health care methods or products used in a particular setting 
464.34  conducted for the purpose of making a management decision.  
464.35  Costs of clinical research activities paid directly for the 
464.36  benefit of an individual patient are excluded from 
465.1   this exemption credit.  Basic research in fields including 
465.2   biochemistry, molecular biology, and physiology are also 
465.3   included if such programs are subject to a peer review process. 
465.4      (c) No credit shall be allowed under this subdivision for 
465.5   any revenue received by the hospital or health care provider in 
465.6   the form of a grant, gift, or otherwise, whether from a 
465.7   government or nongovernment source, on which the tax liability 
465.8   under section 295.52 is not imposed to conduct research. 
465.9      (d) The taxpayer shall apply for the credit under this 
465.10  section on the annual return under section 295.55, subdivision 5.
465.11     (e) For research expenses paid in 2001, the credit is equal 
465.12  to 5.5 percent of the taxpayer's total expenditures for 
465.13  qualifying research.  Beginning September 1, 2001, if the actual 
465.14  or estimated amount paid under this section for the calendar 
465.15  year exceeds $2,500,000 $8,500,000, the commissioner of finance 
465.16  shall determine the rate of the research credit for the 
465.17  following calendar year to the nearest one-half percent so that 
465.18  refunds paid under this section will most closely equal 
465.19  $2,500,000 $8,500,000.  The commissioner of finance shall 
465.20  publish in the State Register by October 1 of each year the rate 
465.21  of the credit for the following calendar year.  A determination 
465.22  under this section is not subject to the rulemaking provisions 
465.23  of chapter 14. 
465.24     [EFFECTIVE DATE.] This section is effective for research 
465.25  expenses paid in 2001 and thereafter. 
465.26     Sec. 3.  [REPEALER.] 
465.27     Minnesota Statutes 2000, section 256.9657, subdivision 2, 
465.28  is repealed effective July 1, 2002, and Minnesota Statutes 2000, 
465.29  section 256B.19, subdivision 1b, is repealed effective July 1, 
465.30  2001. 
465.31                             ARTICLE 20
465.32               DEPARTMENT INCOME AND FRANCHISE TAXES 
465.33     Section 1.  Minnesota Statutes 2000, section 270A.03, 
465.34  subdivision 5, is amended to read: 
465.35     Subd. 5.  [DEBT.] "Debt" means a legal obligation of a 
465.36  natural person to pay a fixed and certain amount of money, which 
466.1   equals or exceeds $25 and which is due and payable to a claimant 
466.2   agency.  The term includes criminal fines imposed under section 
466.3   609.10 or 609.125 and restitution.  A debt may arise under a 
466.4   contractual or statutory obligation, a court order, or other 
466.5   legal obligation, but need not have been reduced to judgment.  
466.6      A debt includes any legal obligation of a current recipient 
466.7   of assistance which is based on overpayment of an assistance 
466.8   grant where that payment is based on a client waiver or an 
466.9   administrative or judicial finding of an intentional program 
466.10  violation; or where the debt is owed to a program wherein the 
466.11  debtor is not a client at the time notification is provided to 
466.12  initiate recovery under this chapter and the debtor is not a 
466.13  current recipient of food stamps, transitional child care, or 
466.14  transitional medical assistance. 
466.15     A debt does not include any legal obligation to pay a 
466.16  claimant agency for medical care, including hospitalization if 
466.17  the income of the debtor at the time when the medical care was 
466.18  rendered does not exceed the following amount: 
466.19     (1) for an unmarried debtor, an income of $6,400 $8,800 or 
466.20  less; 
466.21     (2) for a debtor with one dependent, an income 
466.22  of $8,200 $11,270 or less; 
466.23     (3) for a debtor with two dependents, an income 
466.24  of $9,700 $13,330 or less; 
466.25     (4) for a debtor with three dependents, an income of 
466.26  $11,000 $15,120 or less; 
466.27     (5) for a debtor with four dependents, an income 
466.28  of $11,600 $15,950 or less; and 
466.29     (6) for a debtor with five or more dependents, an income of 
466.30  $12,100 $16,630 or less.  
466.31     The income amounts in this subdivision shall be adjusted 
466.32  for inflation for debts incurred in calendar years 1991 2001 and 
466.33  thereafter.  The dollar amount of each income level that applied 
466.34  to debts incurred in the prior year shall be increased in the 
466.35  same manner as provided in section 290.06, subdivision 2d, for 
466.36  the expansion of the tax rate brackets 1f of the Internal 
467.1   Revenue Code of 1986, as amended through December 31, 2000, 
467.2   except that for the purposes of this subdivision the percentage 
467.3   increase shall be determined from the year starting September 1, 
467.4   1999, and ending August 31, 2000, as the base year for adjusting 
467.5   for inflation for debts incurred after December 31, 2000. 
467.6      Debt also includes an agreement to pay a MinnesotaCare 
467.7   premium, regardless of the dollar amount of the premium 
467.8   authorized under section 256L.15, subdivision 1a. 
467.9      [EFFECTIVE DATE.] This section is effective for debts 
467.10  incurred after December 31, 2000. 
467.11     Sec. 2.  Minnesota Statutes 2000, section 289A.12, 
467.12  subdivision 3, is amended to read: 
467.13     Subd. 3.  [RETURNS OR REPORTS BY PARTNERSHIPS, FIDUCIARIES, 
467.14  AND S CORPORATIONS.] (a) Partnerships must file a return with 
467.15  the commissioner for each taxable year.  The return must conform 
467.16  to the requirements of section 290.31 290.311, and must include 
467.17  the names and addresses of the partners entitled to a 
467.18  distributive share in their taxable net income, gain, loss, or 
467.19  credit, and the amount of the distributive share to which each 
467.20  is entitled.  A partnership required to file a return for a 
467.21  partnership taxable year must furnish a copy of the information 
467.22  required to be shown on the return to a person who is a partner 
467.23  at any time during the taxable year, on or before the day on 
467.24  which the return for the taxable year was filed. 
467.25     (b) The fiduciary of an estate or trust making the return 
467.26  required to be filed under section 289A.08, subdivision 2, for a 
467.27  taxable year must give a beneficiary who receives a distribution 
467.28  from the estate or trust with respect to the taxable year or to 
467.29  whom any item with respect to the taxable year is allocated, a 
467.30  statement containing the information required to be shown on the 
467.31  return, on or before the date on which the return was filed. 
467.32     (c) An S corporation must file a return with the 
467.33  commissioner for a taxable year during which an election under 
467.34  section 290.9725 is in effect, stating specifically the names 
467.35  and addresses of the persons owning stock in the corporation at 
467.36  any time during the taxable year, the number of shares of stock 
468.1   owned by a shareholder at all times during the taxable year, the 
468.2   shareholder's pro rata share of each item of the corporation for 
468.3   the taxable year, and other information the commissioner 
468.4   requires.  An S corporation required to file a return under this 
468.5   paragraph for any taxable year must furnish a copy of the 
468.6   information shown on the return to the person who is a 
468.7   shareholder at any time during the taxable year, on or before 
468.8   the day on which the return for the taxable year was filed. 
468.9      (d) The partnership or S corporation return must be signed 
468.10  by someone designated by the partnership or S corporation. 
468.11     [EFFECTIVE DATE.] This section is effective for tax years 
468.12  beginning after December 31, 2000. 
468.13     Sec. 3.  Minnesota Statutes 2000, section 290.06, 
468.14  subdivision 23, is amended to read: 
468.15     Subd. 23.  [REFUND OF CONTRIBUTIONS TO POLITICAL PARTIES 
468.16  AND CANDIDATES.] (a) A taxpayer may claim a refund equal to the 
468.17  amount of the taxpayer's contributions made in the calendar year 
468.18  to candidates and to a political party.  The maximum refund for 
468.19  an individual must not exceed $50 and for a married couple, 
468.20  filing jointly, must not exceed $100.  A refund of a 
468.21  contribution is allowed only if the taxpayer files a form 
468.22  required by the commissioner and attaches to the form a copy of 
468.23  an official refund receipt form issued by the candidate or party 
468.24  and signed by the candidate, the treasurer of the candidate's 
468.25  principal campaign committee, or the chair or treasurer of the 
468.26  party unit, after the contribution was received.  The receipt 
468.27  forms must be numbered, and the data on the receipt that are not 
468.28  public must be made available to the campaign finance and public 
468.29  disclosure board upon its request.  A claim must be filed with 
468.30  the commissioner no sooner than January 1 of the calendar year 
468.31  in which the contribution was made and no later than April 15 of 
468.32  the calendar year following the calendar year in which the 
468.33  contribution was made.  A taxpayer may file only one claim per 
468.34  calendar year.  Amounts paid by the commissioner after June 15 
468.35  of the calendar year following the calendar year in which the 
468.36  contribution was made must include interest at the rate 
469.1   specified in section 270.76. 
469.2      (b) No refund is allowed under this subdivision for a 
469.3   contribution to a candidate unless the candidate: 
469.4      (1) has signed an agreement to limit campaign expenditures 
469.5   as provided in section 10A.322; 
469.6      (2) is seeking an office for which voluntary spending 
469.7   limits are specified in section 10A.25; and 
469.8      (3) has designated a principal campaign committee.  
469.9      This subdivision does not limit the campaign expenditures 
469.10  of a candidate who does not sign an agreement but accepts a 
469.11  contribution for which the contributor improperly claims a 
469.12  refund.  
469.13     (c) For purposes of this subdivision, "political party" 
469.14  means a major political party as defined in section 200.02, 
469.15  subdivision 7, or a minor political party qualifying for 
469.16  inclusion on the income tax or property tax refund form under 
469.17  section 10A.31, subdivision 3a.  
469.18     A "major party" or "minor party" includes the aggregate of 
469.19  that party's organization within each house of the legislature, 
469.20  the state party organization, and the party organization within 
469.21  congressional districts, counties, legislative districts, 
469.22  municipalities, and precincts.  
469.23     "Candidate" means a candidate as defined in section 10A.01, 
469.24  subdivision 10, except a candidate for judicial office.  
469.25     "Contribution" means a gift of money. 
469.26     (d) The commissioner shall make copies of the form 
469.27  available to the public and candidates upon request. 
469.28     (e) The following data collected or maintained by the 
469.29  commissioner under this subdivision are private:  the identities 
469.30  of individuals claiming a refund, the identities of candidates 
469.31  to whom those individuals have made contributions, and the 
469.32  amount of each contribution.  
469.33     (f) The commissioner shall report to the campaign finance 
469.34  and public disclosure board by each August 1 a summary showing 
469.35  the total number and aggregate amount of political contribution 
469.36  refunds made on behalf of each candidate and each political 
470.1   party.  These data are public. 
470.2      (g) The amount necessary to pay claims for the refund 
470.3   provided in this section is appropriated from the general fund 
470.4   to the commissioner of revenue. 
470.5      (h) For a taxpayer who files a claim for refund via the 
470.6   Internet or other electronic means, the commissioner may accept 
470.7   the number on the official receipt as documentation that a 
470.8   contribution was made rather than the actual receipt as required 
470.9   by paragraph (a). 
470.10     [EFFECTIVE DATE.] This section is effective for refund 
470.11  claims based on contributions made after December 31, 2001. 
470.12     Sec. 4.  Minnesota Statutes 2000, section 290.067, 
470.13  subdivision 2, is amended to read: 
470.14     Subd. 2.  [LIMITATIONS.] The credit for expenses incurred 
470.15  for the care of each dependent shall not exceed $720 in any 
470.16  taxable year, and the total credit for all dependents of a 
470.17  claimant shall not exceed $1,440 in a taxable year.  The maximum 
470.18  total credit shall be reduced according to the amount of the 
470.19  income of the claimant and a spouse, if any, as follows:  
470.20     income up to $13,350 $18,040, $720 maximum for one 
470.21  dependent, $1,440 for all dependents; 
470.22     income over $13,350 $18,040, the maximum credit for one 
470.23  dependent shall be reduced by $18 for every $350 of additional 
470.24  income, $36 for all dependents. 
470.25     The commissioner shall construct and make available to 
470.26  taxpayers tables showing the amount of the credit at various 
470.27  levels of income and expenses.  The tables shall follow the 
470.28  schedule contained in this subdivision, except that the 
470.29  commissioner may graduate the transitions between expenses and 
470.30  income brackets.  
470.31     [EFFECTIVE DATE.] This section is effective for tax years 
470.32  beginning after December 31, 1999. 
470.33     Sec. 5.  Minnesota Statutes 2000, section 290.067, 
470.34  subdivision 2b, is amended to read: 
470.35     Subd. 2b.  [INFLATION ADJUSTMENT.] The dollar amount of the 
470.36  income threshold at which the maximum credit begins to be 
471.1   reduced under subdivision 2 must be adjusted for inflation.  The 
471.2   commissioner shall adjust the threshold amount by the percentage 
471.3   determined under section 290.06, subdivision 2d, for the taxable 
471.4   year. make the inflation adjustments in accordance with section 
471.5   1f of the Internal Revenue Code except that for the purposes of 
471.6   this subdivision the percentage increase must be determined from 
471.7   the year starting September 1, 1999, and ending August 31, 2000, 
471.8   as the base year for adjusting for inflation for the tax year 
471.9   beginning after December 31, 2000.  The determination of the 
471.10  commissioner under this subdivision is not a rule under the 
471.11  Administrative Procedures Act. 
471.12     [EFFECTIVE DATE.] This section is effective for tax years 
471.13  beginning after December 31, 2000. 
471.14     Sec. 6.  Minnesota Statutes 2000, section 290.0671, 
471.15  subdivision 1, is amended to read: 
471.16     Subdivision 1.  [CREDIT ALLOWED.] (a) An individual is 
471.17  allowed a credit against the tax imposed by this chapter equal 
471.18  to a percentage of earned income.  To receive a credit, a 
471.19  taxpayer must be eligible for a credit under section 32 of the 
471.20  Internal Revenue Code.  
471.21     (b) For individuals with no qualifying children, the credit 
471.22  equals 1.9125 percent of the first $4,460 $4,620 of earned 
471.23  income.  The credit is reduced by 1.9125 percent of earned 
471.24  income or modified adjusted gross income, whichever is greater, 
471.25  in excess of $5,570 $5,770, but in no case is the credit less 
471.26  than zero. 
471.27     (c) For individuals with one qualifying child, the credit 
471.28  equals 8.5 percent of the first $6,680 $6,920 of earned income 
471.29  and 8.5 percent of earned income over $11,650 $12,080 but less 
471.30  than $12,990 $13,450. The credit is reduced by 5.73 percent of 
471.31  earned income or modified adjusted gross income, whichever is 
471.32  greater, in excess of $14,560 $15,080, but in no case is the 
471.33  credit less than zero. 
471.34     (d) For individuals with two or more qualifying children, 
471.35  the credit equals ten percent of the first $9,390 $9,720 of 
471.36  earned income and 20 percent of earned income 
472.1   over $14,350 $14,860 but less than $16,230 $16,800.  The credit 
472.2   is reduced by 10.3 percent of earned income or modified adjusted 
472.3   gross income, whichever is greater, in excess 
472.4   of $17,280 $17,890, but in no case is the credit less than zero. 
472.5      (e) For a nonresident or part-year resident, the credit 
472.6   must be allocated based on the percentage calculated under 
472.7   section 290.06, subdivision 2c, paragraph (e). 
472.8      (f) For a person who was a resident for the entire tax year 
472.9   and has earned income not subject to tax under this chapter, the 
472.10  credit must be allocated based on the ratio of federal adjusted 
472.11  gross income reduced by the earned income not subject to tax 
472.12  under this chapter over federal adjusted gross income. 
472.13     (g) The commissioner shall construct tables showing the 
472.14  amount of the credit at various income levels and make them 
472.15  available to taxpayers.  The tables shall follow the schedule 
472.16  contained in this subdivision, except that the commissioner may 
472.17  graduate the transition between income brackets. 
472.18     [EFFECTIVE DATE.] This section is effective for taxable 
472.19  years beginning after December 31, 1999. 
472.20     Sec. 7.  Minnesota Statutes 2000, section 290.0671, 
472.21  subdivision 7, is amended to read: 
472.22     Subd. 7.  [INFLATION ADJUSTMENT.] The earned income amounts 
472.23  used to calculate the credit and the income thresholds at which 
472.24  the maximum credit begins to be reduced in subdivision 1 must be 
472.25  adjusted for inflation.  The commissioner shall adjust the 
472.26  earned income and threshold amounts by the percentage determined 
472.27  under section 290.06, subdivision 2d, for the taxable year. make 
472.28  the inflation adjustments in accordance with section 1f of the 
472.29  Internal Revenue Code except that for the purposes of this 
472.30  subdivision the percentage increase shall be determined from the 
472.31  year starting September 1, 1999, and ending August 31, 2000, as 
472.32  the base year for adjusting for inflation for the tax year 
472.33  beginning after December 31, 2000.  The determination of the 
472.34  commissioner under this subdivision is not a rule under the 
472.35  Administrative Procedures Act. 
472.36     [EFFECTIVE DATE.] This section is effective for tax years 
473.1   beginning after December 31, 2000. 
473.2      Sec. 8.  Minnesota Statutes 2000, section 290.0921, 
473.3   subdivision 3, is amended to read: 
473.4      Subd. 3.  [ALTERNATIVE MINIMUM TAXABLE INCOME.] 
473.5   "Alternative minimum taxable income" is Minnesota net income as 
473.6   defined in section 290.01, subdivision 19, and includes the 
473.7   adjustments and tax preference items in sections 56, 57, 58, and 
473.8   59(d), (e), (f), and (h) of the Internal Revenue Code.  If a 
473.9   corporation files a separate company Minnesota tax return, the 
473.10  minimum tax must be computed on a separate company basis.  If a 
473.11  corporation is part of a tax group filing a unitary return, the 
473.12  minimum tax must be computed on a unitary basis.  The following 
473.13  adjustments must be made. 
473.14     (1) For purposes of the depreciation adjustments under 
473.15  section 56(a)(1) and 56(g)(4)(A) of the Internal Revenue Code, 
473.16  the basis for depreciable property placed in service in a 
473.17  taxable year beginning before January 1, 1990, is the adjusted 
473.18  basis for federal income tax purposes, including any 
473.19  modification made in a taxable year under section 290.01, 
473.20  subdivision 19e, or Minnesota Statutes 1986, section 290.09, 
473.21  subdivision 7, paragraph (c). 
473.22     (2) For taxable years beginning after December 31, 2000, 
473.23  the amount of any remaining modification made under section 
473.24  290.01, subdivision 19e, or Minnesota Statutes 1986, section 
473.25  290.09, subdivision 7, paragraph (c), not previously deducted is 
473.26  a depreciation allowance in the first taxable year after 
473.27  December 31, 2000. 
473.28     (3) The alternative tax net operating loss deduction under 
473.29  sections 56(a)(4) and 56(d) of the Internal Revenue Code does 
473.30  not apply. 
473.31     (3) (4) The special rule for certain dividends under 
473.32  section 56(g)(4)(C)(ii) of the Internal Revenue Code does not 
473.33  apply. 
473.34     (4) (5) The special rule for dividends from section 936 
473.35  companies under section 56(g)(4)(C)(iii) does not apply. 
473.36     (5) (6) The tax preference for depletion under section 
474.1   57(a)(1) of the Internal Revenue Code does not apply. 
474.2      (6) (7) The tax preference for intangible drilling costs 
474.3   under section 57(a)(2) of the Internal Revenue Code must be 
474.4   calculated without regard to subparagraph (E) and the 
474.5   subtraction under section 290.01, subdivision 19d, clause (4). 
474.6      (7) (8) The tax preference for tax exempt interest under 
474.7   section 57(a)(5) of the Internal Revenue Code does not apply.  
474.8      (8) (9) The tax preference for charitable contributions of 
474.9   appreciated property under section 57(a)(6) of the Internal 
474.10  Revenue Code does not apply. 
474.11     (9) (10) For purposes of calculating the tax preference for 
474.12  accelerated depreciation or amortization on certain property 
474.13  placed in service before January 1, 1987, under section 57(a)(7) 
474.14  of the Internal Revenue Code, the deduction allowable for the 
474.15  taxable year is the deduction allowed under section 290.01, 
474.16  subdivision 19e. 
474.17     (11) For taxable years beginning after December 31, 2000, 
474.18  the amount of any remaining modification made under section 
474.19  290.01, subdivision 19e, not previously deducted is a 
474.20  depreciation or amortization allowance in the first taxable year 
474.21  after December 31, 2000. 
474.22     (10) (12) For purposes of calculating the adjustment for 
474.23  adjusted current earnings in section 56(g) of the Internal 
474.24  Revenue Code, the term "alternative minimum taxable income" as 
474.25  it is used in section 56(g) of the Internal Revenue Code, means 
474.26  alternative minimum taxable income as defined in this 
474.27  subdivision, determined without regard to the adjustment for 
474.28  adjusted current earnings in section 56(g) of the Internal 
474.29  Revenue Code. 
474.30     (11) (13) For purposes of determining the amount of 
474.31  adjusted current earnings under section 56(g)(3) of the Internal 
474.32  Revenue Code, no adjustment shall be made under section 56(g)(4) 
474.33  of the Internal Revenue Code with respect to (i) the amount of 
474.34  foreign dividend gross-up subtracted as provided in section 
474.35  290.01, subdivision 19d, clause (1), (ii) the amount of refunds 
474.36  of income, excise, or franchise taxes subtracted as provided in 
475.1   section 290.01, subdivision 19d, clause (10), or (iii) the 
475.2   amount of royalties, fees or other like income subtracted as 
475.3   provided in section 290.01, subdivision 19d, clause (11). 
475.4      Items of tax preference must not be reduced below zero as a 
475.5   result of the modifications in this subdivision. 
475.6      [EFFECTIVE DATE.] This section is effective the day 
475.7   following final enactment. 
475.8      Sec. 9.  Minnesota Statutes 2000, section 290.35, 
475.9   subdivision 2, is amended to read: 
475.10     Subd. 2.  [APPORTIONMENT OF TAXABLE NET INCOME.] The 
475.11  commissioner insurance company shall compute therefrom the its 
475.12  taxable net income of such companies by assigning to this state 
475.13  that proportion thereof of net income which the gross premiums 
475.14  collected by them during the taxable year from old and new 
475.15  business within this state bears to the total gross premiums 
475.16  collected by them during that year from their entire old and new 
475.17  business, including reinsurance premiums; provided, the 
475.18  commissioner insurance company shall add to the taxable net 
475.19  income so apportioned to this state the amount of any taxes on 
475.20  premiums paid by the company by virtue of any law of this state 
475.21  (other than the surcharge on premiums imposed by section 297I.10 
475.22  and the surcharge imposed by section 168A.40, subdivision 3) 
475.23  which shall have been deducted from gross income by the company 
475.24  in arriving at its total net income. 
475.25     (a) For purposes of determining the Minnesota apportionment 
475.26  percentage, premiums from reinsurance contracts in connection 
475.27  with property in or liability arising out of activity in, or in 
475.28  connection with the lives or health of Minnesota residents shall 
475.29  be assigned to Minnesota and premiums from reinsurance contracts 
475.30  in connection with property in or liability arising out of 
475.31  activity in, or in connection with the lives or health of 
475.32  non-Minnesota residents shall be assigned outside of Minnesota. 
475.33  Reinsurance premiums are presumed to be received for a Minnesota 
475.34  risk and are assigned to Minnesota, if:  
475.35     (1) the reinsurance contract is assumed for a company 
475.36  domiciled in Minnesota; and 
476.1      (2) the taxpayer, upon request of the commissioner, fails 
476.2   to provide reliable records indicating the reinsured contract 
476.3   covered non-Minnesota risks. 
476.4   For purposes of this paragraph, "Minnesota risk" means coverage 
476.5   in connection with property in or liability arising out of 
476.6   activity in Minnesota, or in connection with the lives or health 
476.7   of Minnesota residents. 
476.8      (b) The apportionment method prescribed by paragraph (a) 
476.9   shall be presumed to fairly and correctly determine the 
476.10  taxpayer's taxable net income.  If the method prescribed in 
476.11  paragraph (a) does not fairly reflect all or any part of taxable 
476.12  net income, the taxpayer may petition for or the commissioner 
476.13  may require the determination of taxable net income by use of 
476.14  another method if that method fairly reflects taxable net 
476.15  income.  A petition within the meaning of this section must be 
476.16  filed by the taxpayer on such form as the commissioner shall 
476.17  require. 
476.18     [EFFECTIVE DATE.] This section is effective the day 
476.19  following final enactment. 
476.20     Sec. 10.  Minnesota Statutes 2000, section 290.92, 
476.21  subdivision 23, is amended to read: 
476.22     Subd. 23.  [WITHHOLDING BY EMPLOYER OF DELINQUENT TAXES.] 
476.23  (1) The commissioner may, within five years after the date of 
476.24  assessment of the tax, or if a lien has been filed under section 
476.25  270.69, within the statutory period for enforcement of the lien, 
476.26  give notice to any employer deriving income which has a taxable 
476.27  situs in this state regardless of whether the income is exempt 
476.28  from taxation, that an employee of that employer is delinquent 
476.29  in a certain amount with respect to any state taxes, including 
476.30  penalties, interest, and costs.  The commissioner can proceed 
476.31  under this subdivision only if the tax is uncontested or if the 
476.32  time for appeal of the tax has expired.  The commissioner shall 
476.33  not proceed under this subdivision until the expiration of 30 
476.34  days after mailing to the taxpayer, at the taxpayer's last known 
476.35  address, a written notice of (a) the amount of taxes, interest, 
476.36  and penalties due from the taxpayer and demand for their 
477.1   payment, and (b) the commissioner's intention to require 
477.2   additional withholding by the taxpayer's employer pursuant to 
477.3   this subdivision.  The effect of the notice shall expire 180 
477.4   days one year after it has been mailed to the taxpayer provided 
477.5   that the notice may be renewed by mailing a new notice which is 
477.6   in accordance with this subdivision.  The renewed notice shall 
477.7   have the effect of reinstating the priority of the original 
477.8   claim.  The notice to the taxpayer shall be in substantially the 
477.9   same form as that provided in section 571.72.  The notice shall 
477.10  further inform the taxpayer of the wage exemptions contained in 
477.11  section 550.37, subdivision 14.  If no statement of exemption is 
477.12  received by the commissioner within 30 days from the mailing of 
477.13  the notice, the commissioner may proceed under this 
477.14  subdivision.  The notice to the taxpayer's employer may be 
477.15  served by mail or by delivery by an employee of the department 
477.16  of revenue and shall be in substantially the same form as 
477.17  provided in section 571.75.  Upon receipt of notice, the 
477.18  employer shall withhold from compensation due or to become due 
477.19  to the employee, the total amount shown by the notice, subject 
477.20  to the provisions of section 571.922.  The employer shall 
477.21  continue to withhold each pay period until the notice is 
477.22  released by the commissioner under section 270.709.  Upon 
477.23  receipt of notice by the employer, the claim of the state of 
477.24  Minnesota shall have priority over any subsequent garnishments 
477.25  or wage assignments.  The commissioner may arrange between the 
477.26  employer and the employee for withholding a portion of the total 
477.27  amount due the employee each pay period, until the total amount 
477.28  shown by the notice plus accrued interest has been withheld.  
477.29     The "compensation due" any employee is defined in 
477.30  accordance with the provisions of section 571.921.  The maximum 
477.31  withholding allowed under this subdivision for any one pay 
477.32  period shall be decreased by any amounts payable pursuant to a 
477.33  garnishment action with respect to which the employer was served 
477.34  prior to being served with the notice of delinquency and any 
477.35  amounts covered by any irrevocable and previously effective 
477.36  assignment of wages; the employer shall give notice to the 
478.1   department of the amounts and the facts relating to such 
478.2   assignments within ten days after the service of the notice of 
478.3   delinquency on the form provided by the department of revenue as 
478.4   noted in this subdivision.  
478.5      (2) If the employee ceases to be employed by the employer 
478.6   before the full amount set forth in a notice of delinquency plus 
478.7   accrued interest has been withheld, the employer shall 
478.8   immediately notify the commissioner in writing of the 
478.9   termination date of the employee and the total amount withheld.  
478.10  No employer may discharge any employee by reason of the fact 
478.11  that the commissioner has proceeded under this subdivision.  If 
478.12  an employer discharges an employee in violation of this 
478.13  provision, the employee shall have the same remedy as provided 
478.14  in section 571.927, subdivision 2.  
478.15     (3) Within ten days after the expiration of such pay 
478.16  period, the employer shall remit to the commissioner, on a form 
478.17  and in the manner prescribed by the commissioner, the amount 
478.18  withheld during each pay period under this subdivision.  
478.19     (4) Clauses (1), (2), and (3), except provisions imposing a 
478.20  liability on the employer for failure to withhold or remit, 
478.21  shall apply to cases in which the employer is the United States 
478.22  or any instrumentality thereof or this state or any municipality 
478.23  or other subordinate unit thereof.  
478.24     (5) The commissioner shall refund to the employee excess 
478.25  amounts withheld from the employee under this subdivision.  If 
478.26  any excess results from payments by the employer because of 
478.27  willful failure to withhold or remit as prescribed in clause 
478.28  (3), the excess attributable to the employer's payment shall be 
478.29  refunded to the employer.  
478.30     (6) Employers required to withhold delinquent taxes, 
478.31  penalties, interest, and costs under this subdivision shall not 
478.32  be required to compute any additional interest, costs or other 
478.33  charges to be withheld.  
478.34     (7) The collection remedy provided to the commissioner by 
478.35  this subdivision shall have the same legal effect as if it were 
478.36  a levy made pursuant to section 270.70.  
479.1      [EFFECTIVE DATE.] This section is effective for notices of 
479.2   intent mailed on or after the day following final enactment. 
479.3      Sec. 11.  Minnesota Statutes 2000, section 290A.04, 
479.4   subdivision 4, is amended to read: 
479.5      Subd. 4.  [INFLATION ADJUSTMENT.] Beginning for property 
479.6   tax refunds payable in calendar year 1996, the commissioner 
479.7   shall annually adjust the dollar amounts of the income 
479.8   thresholds and the maximum refunds under subdivisions 2 and 2a 
479.9   for inflation.  The commissioner shall make the inflation 
479.10  adjustments in accordance with section 290.06, subdivision 2d 1f 
479.11  of the Internal Revenue Code, except that for purposes of this 
479.12  subdivision the percentage increase shall be determined from the 
479.13  year ending on June 30, 1994, to the year ending on June 30 of 
479.14  the year preceding that in which the refund is payable.  The 
479.15  commissioner shall use the appropriate percentage increase to 
479.16  annually adjust the income thresholds and maximum refunds under 
479.17  subdivisions 2 and 2a for inflation without regard to whether or 
479.18  not the income tax brackets are adjusted for inflation in that 
479.19  year.  The commissioner shall round the thresholds and the 
479.20  maximum amounts, as adjusted to the nearest $10 amount.  If the 
479.21  amount ends in $5, the commissioner shall round it up to the 
479.22  next $10 amount.  
479.23     The commissioner shall annually announce the adjusted 
479.24  refund schedule at the same time provided under section 290.06.  
479.25  The determination of the commissioner under this subdivision is 
479.26  not a rule under the Administrative Procedure Act. 
479.27     Sec. 12.  [REPEALER.] 
479.28     Minnesota Statutes 2000, sections 290.095, subdivision 7; 
479.29  290.23; 290.25; and 290.31, subdivisions 2, 2a, 3, 4, 5, and 19, 
479.30  are repealed. 
479.31     [EFFECTIVE DATE.] This section is effective for tax years 
479.32  beginning after December 31, 2000. 
479.33                             ARTICLE 21
479.34                     DEPARTMENT PROPERTY TAXES 
479.35     Section 1.  Minnesota Statutes 2000, section 273.072, 
479.36  subdivision 1, is amended to read: 
480.1      Subdivision 1.  Any county and any city or town lying 
480.2   wholly or partially within the county and constituting a 
480.3   separate assessment district may, by agreement entered into 
480.4   under section 471.59 and approved by the commissioner of 
480.5   revenue, provide for the assessment of property in the 
480.6   municipality or town by the county assessor.  Any two or more 
480.7   cities or towns constituting separate assessment districts, 
480.8   whether their assessors are elective or appointive, may enter 
480.9   into an agreement under section 471.59 for the assessment of 
480.10  property in the contracting units by the assessor of one of the 
480.11  units or by an assessor who is jointly employed.  
480.12     [EFFECTIVE DATE.] This section is effective the day 
480.13  following final enactment. 
480.14     Sec. 2.  Minnesota Statutes 2000, section 273.1104, 
480.15  subdivision 2, is amended to read: 
480.16     Subd. 2.  [NOTICE OF MARKET VALUE.] On or before May 1 in 
480.17  each year, the commissioner shall send to each person subject to 
480.18  the tax on unmined iron ores and to each taxing district 
480.19  affected, a notice of the market value of the unmined ores as 
480.20  determined by the commissioner prior to adjustment under 
480.21  subdivision 1.  Said notice shall be sent by mail directed to 
480.22  such person at the address given in the report filed and the 
480.23  assessor of such taxing district, but the validity of the tax 
480.24  shall not be affected by the failure of the commissioner of 
480.25  revenue to mail such notice or the failure of the person subject 
480.26  to the tax to receive it. 
480.27     On the first secular day following May 20, the commissioner 
480.28  of revenue shall hold a hearing which may be adjourned from day 
480.29  to day.  All relevant and material evidence having probative 
480.30  value with respect to the issues shall be submitted at the 
480.31  hearing and such hearing shall not be a "contested case" within 
480.32  the meaning of section 14.02, subdivision 3.  Every person 
480.33  subject to such tax may at such hearing present evidence and 
480.34  argument on any matter bearing upon the validity or correctness 
480.35  of the tax determined to be due, and the commissioner of revenue 
480.36  shall review the determination of such tax. 
481.1      [EFFECTIVE DATE.] This section is effective the day 
481.2   following final enactment. 
481.3      Sec. 3.  Minnesota Statutes 2000, section 273.111, 
481.4   subdivision 4, is amended to read: 
481.5      Subd. 4.  [DETERMINATION OF VALUE.] The value of any real 
481.6   estate described in subdivision 3 shall upon timely application 
481.7   by the owner, in the manner provided in subdivision 8, be 
481.8   determined solely with reference to its appropriate agricultural 
481.9   classification and value notwithstanding sections 272.03, 
481.10  subdivision 8, and 273.11.  In determining the value for ad 
481.11  valorem tax purposes, the assessor shall use sales data obtained 
481.12  from for agricultural lands located outside the seven 
481.13  metropolitan counties but within the region used for computing 
481.14  the range of values under section 273.11, subdivision 10.  The 
481.15  sales shall have having similar soil types, number of degree 
481.16  days, and other similar agricultural characteristics as 
481.17  contained in section 273.11, subdivision 10.  Furthermore, the 
481.18  assessor shall not consider any added values resulting from 
481.19  nonagricultural factors. 
481.20     [EFFECTIVE DATE.] This section is effective the day 
481.21  following final enactment. 
481.22     Sec. 4.  Minnesota Statutes 2000, section 273.124, 
481.23  subdivision 13, is amended to read: 
481.24     Subd. 13.  [HOMESTEAD APPLICATION.] (a) A person who meets 
481.25  the homestead requirements under subdivision 1 must file a 
481.26  homestead application with the county assessor to initially 
481.27  obtain homestead classification. 
481.28     (b) On or before January 2, 1993, each county assessor 
481.29  shall mail a homestead application to the owner of each parcel 
481.30  of property within the county which was classified as homestead 
481.31  for the 1992 assessment year.  The format and contents of a 
481.32  uniform homestead application shall be prescribed by the 
481.33  commissioner of revenue.  The commissioner shall consult with 
481.34  the chairs of the house and senate tax committees on the 
481.35  contents of the homestead application form.  The application 
481.36  must clearly inform the taxpayer that this application must be 
482.1   signed by all owners who occupy the property or by the 
482.2   qualifying relative and returned to the county assessor in order 
482.3   for the property to continue receiving homestead treatment.  The 
482.4   envelope containing the homestead application shall clearly 
482.5   identify its contents and alert the taxpayer of its necessary 
482.6   immediate response. 
482.7      (c) Every property owner applying for homestead 
482.8   classification must furnish to the county assessor the social 
482.9   security number of each occupant who is listed as an owner of 
482.10  the property on the deed of record, the name and address of each 
482.11  owner who does not occupy the property, and the name and social 
482.12  security number of each owner's spouse who occupies the 
482.13  property.  The application must be signed by each owner who 
482.14  occupies the property and by each owner's spouse who occupies 
482.15  the property, or, in the case of property that qualifies as a 
482.16  homestead under subdivision 1, paragraph (c), by the qualifying 
482.17  relative. 
482.18     If a property owner occupies a homestead, the property 
482.19  owner's spouse may not claim another property as a homestead 
482.20  unless the property owner and the property owner's spouse file 
482.21  with the assessor an affidavit or other proof required by the 
482.22  assessor stating that the property qualifies as a homestead 
482.23  under subdivision 1, paragraph (e). 
482.24     Owners or spouses occupying residences owned by their 
482.25  spouses and previously occupied with the other spouse, either of 
482.26  whom fail to include the other spouse's name and social security 
482.27  number on the homestead application or provide the affidavits or 
482.28  other proof requested, will be deemed to have elected to receive 
482.29  only partial homestead treatment of their residence.  The 
482.30  remainder of the residence will be classified as nonhomestead 
482.31  residential.  When an owner or spouse's name and social security 
482.32  number appear on homestead applications for two separate 
482.33  residences and only one application is signed, the owner or 
482.34  spouse will be deemed to have elected to homestead the residence 
482.35  for which the application was signed. 
482.36     The social security numbers or affidavits or other proofs 
483.1   of the property owners and spouses are private data on 
483.2   individuals as defined by section 13.02, subdivision 12, but, 
483.3   notwithstanding that section, the private data may be disclosed 
483.4   to the commissioner of revenue, or, for purposes of proceeding 
483.5   under the Revenue Recapture Act to recover personal property 
483.6   taxes owing, to the county treasurer. 
483.7      (d) If residential real estate is occupied and used for 
483.8   purposes of a homestead by a relative of the owner and qualifies 
483.9   for a homestead under subdivision 1, paragraph (c), in order for 
483.10  the property to receive homestead status, a homestead 
483.11  application must be filed with the assessor.  The social 
483.12  security number of each relative occupying the property and the 
483.13  social security number of each owner who is related to an 
483.14  occupant of the property shall be required on the homestead 
483.15  application filed under this subdivision.  If a different 
483.16  relative of the owner subsequently occupies the property, the 
483.17  owner of the property must notify the assessor within 30 days of 
483.18  the change in occupancy.  The social security number of a 
483.19  relative occupying the property is private data on individuals 
483.20  as defined by section 13.02, subdivision 12, but may be 
483.21  disclosed to the commissioner of revenue.  
483.22     (e) The homestead application shall also notify the 
483.23  property owners that the application filed under this section 
483.24  will not be mailed annually and that if the property is granted 
483.25  homestead status for the 1993 assessment, or any assessment year 
483.26  thereafter, that same property shall remain classified as 
483.27  homestead until the property is sold or transferred to another 
483.28  person, or the owners, the spouse of the owner, or the relatives 
483.29  no longer use the property as their homestead.  Upon the sale or 
483.30  transfer of the homestead property, a certificate of value must 
483.31  be timely filed with the county auditor as provided under 
483.32  section 272.115.  Failure to notify the assessor within 30 days 
483.33  that the property has been sold, transferred, or that the owner, 
483.34  the spouse of the owner, or the relative is no longer occupying 
483.35  the property as a homestead, shall result in the penalty 
483.36  provided under this subdivision and the property will lose its 
484.1   current homestead status. 
484.2      (f) If the homestead application is not returned within 30 
484.3   days, the county will send a second application to the present 
484.4   owners of record.  The notice of proposed property taxes 
484.5   prepared under section 275.065, subdivision 3, shall reflect the 
484.6   property's classification.  Beginning with assessment year 1993 
484.7   for all properties, if a homestead application has not been 
484.8   filed with the county by December 15, the assessor shall 
484.9   classify the property as nonhomestead for the current assessment 
484.10  year for taxes payable in the following year, provided that the 
484.11  owner may be entitled to receive the homestead classification by 
484.12  proper application under section 375.192. 
484.13     (g) At the request of the commissioner, each county must 
484.14  give the commissioner a list that includes the name and social 
484.15  security number of each property owner and the property owner's 
484.16  spouse occupying the property, or relative of a property owner, 
484.17  applying for homestead classification under this subdivision.  
484.18  The commissioner shall use the information provided on the lists 
484.19  as appropriate under the law, including for the detection of 
484.20  improper claims by owners, or relatives of owners, under chapter 
484.21  290A.  
484.22     (h) If the commissioner finds that a property owner may be 
484.23  claiming a fraudulent homestead, the commissioner shall notify 
484.24  the appropriate counties.  Within 90 days of the notification, 
484.25  the county assessor shall investigate to determine if the 
484.26  homestead classification was properly claimed.  If the property 
484.27  owner does not qualify, the county assessor shall notify the 
484.28  county auditor who will determine the amount of homestead 
484.29  benefits that had been improperly allowed.  For the purpose of 
484.30  this section, "homestead benefits" means the tax reduction 
484.31  resulting from the classification as a homestead under section 
484.32  273.13, the taconite homestead credit under section 273.135, the 
484.33  education homestead and agricultural credits under section 
484.34  273.1382, and the supplemental homestead credit under section 
484.35  273.1391. 
484.36     The county auditor shall send a notice to the person who 
485.1   owned the affected property at the time the homestead 
485.2   application related to the improper homestead was filed, 
485.3   demanding reimbursement of the homestead benefits plus a penalty 
485.4   equal to 100 percent of the homestead benefits.  The person 
485.5   notified may appeal the county's determination by serving copies 
485.6   of a petition for review with county officials as provided in 
485.7   section 278.01 and filing proof of service as provided in 
485.8   section 278.01 with the Minnesota tax court within 60 days of 
485.9   the date of the notice from the county.  Procedurally, the 
485.10  appeal is governed by the provisions in chapter 271 which apply 
485.11  to the appeal of a property tax assessment or levy, but without 
485.12  requiring any prepayment of the amount in controversy.  If the 
485.13  amount of homestead benefits and penalty is not paid within 60 
485.14  days, and if no appeal has been filed, the county auditor shall 
485.15  certify the amount of taxes and penalty to the county 
485.16  treasurer.  The county treasurer will add interest to the unpaid 
485.17  homestead benefits and penalty amounts at the rate provided in 
485.18  section 279.03 for real property taxes becoming delinquent in 
485.19  the calendar year during which the amount remains unpaid.  
485.20  Interest may be assessed for the period beginning 60 days after 
485.21  demand for payment was made. 
485.22     If the person notified is the current owner of the 
485.23  property, the treasurer may add the total amount of homestead 
485.24  benefits, penalty, interest, and costs to the ad valorem taxes 
485.25  otherwise payable on the property by including the amounts on 
485.26  the property tax statements under section 276.04, subdivision 
485.27  3.  The amounts added under this paragraph to the ad valorem 
485.28  taxes shall include interest accrued through December 31 of the 
485.29  year preceding the taxes payable year for which the amounts are 
485.30  first added.  These amounts, when added to the property tax 
485.31  statement, become subject to all the laws for the enforcement of 
485.32  real or personal property taxes for that year, and for any 
485.33  subsequent year. 
485.34     If the person notified is not the current owner of the 
485.35  property, the treasurer may collect the amounts due under the 
485.36  Revenue Recapture Act in chapter 270A, or use any of the powers 
486.1   granted in sections 277.20 and 277.21 without exclusion, to 
486.2   enforce payment of the homestead benefits, penalty, interest, 
486.3   and costs, as if those amounts were delinquent tax obligations 
486.4   of the person who owned the property at the time the application 
486.5   related to the improperly allowed homestead was filed.  The 
486.6   treasurer may relieve a prior owner of personal liability for 
486.7   the homestead benefits, penalty, interest, and costs, and 
486.8   instead extend those amounts on the tax lists against the 
486.9   property as provided in this paragraph to the extent that the 
486.10  current owner agrees in writing.  On all demands, billings, 
486.11  property tax statements, and related correspondence, the county 
486.12  must list and state separately the amounts of homestead 
486.13  benefits, penalty, interest and costs being demanded, billed or 
486.14  assessed. 
486.15     (i) Any amount of homestead benefits recovered by the 
486.16  county from the property owner shall be distributed to the 
486.17  county, city or town, and school district where the property is 
486.18  located in the same proportion that each taxing district's levy 
486.19  was to the total of the three taxing districts' levy for the 
486.20  current year.  Any amount recovered attributable to taconite 
486.21  homestead credit shall be transmitted to the St. Louis county 
486.22  auditor to be deposited in the taconite property tax relief 
486.23  account.  Any amount recovered that is attributable to 
486.24  supplemental homestead credit is to be transmitted to the 
486.25  commissioner of revenue for deposit in the general fund of the 
486.26  state treasury.  The total amount of penalty collected must be 
486.27  deposited in the county general fund. 
486.28     (j) If a property owner has applied for more than one 
486.29  homestead and the county assessors cannot determine which 
486.30  property should be classified as homestead, the county assessors 
486.31  will refer the information to the commissioner.  The 
486.32  commissioner shall make the determination and notify the 
486.33  counties within 60 days. 
486.34     (k) In addition to lists of homestead properties, the 
486.35  commissioner may ask the counties to furnish lists of all 
486.36  properties and the record owners.  The social security numbers 
487.1   and federal identification numbers that are maintained by a 
487.2   county or city assessor for property tax administration 
487.3   purposes, and that may appear on the lists retain their 
487.4   classification as private or nonpublic data; but may be viewed, 
487.5   accessed, and used by the county auditor or treasurer of the 
487.6   same county for the limited purpose of assisting the 
487.7   commissioner in the preparation of microdata samples under 
487.8   section 270.0681. 
487.9      [EFFECTIVE DATE.] This section is effective for homestead 
487.10  applications submitted on or after the day following final 
487.11  enactment. 
487.12     Sec. 5.  Minnesota Statutes 2000, section 282.04, 
487.13  subdivision 2, is amended to read: 
487.14     Subd. 2.  [RIGHTS BEFORE SALE; IMPROVEMENTS, INSURANCE, 
487.15  DEMOLITION.] Before the sale of a parcel of forfeited land the 
487.16  county auditor may, with the approval of the county board of 
487.17  commissioners, provide for the repair and improvement of any 
487.18  building or structure located upon the parcel, and may provide 
487.19  for maintenance of tax-forfeited lands, if it is determined by 
487.20  the county board that such repairs, improvements, or maintenance 
487.21  are necessary for the operation, use, preservation and safety of 
487.22  the building or structure.  If so authorized by the county 
487.23  board, the county auditor may insure the building or structure 
487.24  against loss or damage resulting from fire or windstorm, may 
487.25  purchase workers' compensation insurance to insure the county 
487.26  against claims for injury to the persons employed in the 
487.27  building or structure by the county, and may insure the county, 
487.28  its officers and employees against claims for injuries to 
487.29  persons or property because of the management, use or operation 
487.30  of the building or structure.  The county auditor may, with the 
487.31  approval of the county board, provide for the demolition of the 
487.32  building or structure, which has been determined by the county 
487.33  board to be within the purview of section 299F.10, and for the 
487.34  sale of salvaged materials from the building or structure.  The 
487.35  county auditor, with the approval of the county board, may 
487.36  provide for the sale of abandoned personal property under either 
488.1   chapter 345 or 566, as appropriate.  The sale may be made by the 
488.2   sheriff using the procedures for the sale of abandoned property 
488.3   in section 345.15 or by the county auditor using the procedures 
488.4   for the sale of abandoned property in section 504B.271.  The net 
488.5   proceeds from any sale of the personal property, salvaged 
488.6   materials, timber or other products, or leases made under this 
488.7   law must be deposited in the forfeited tax sale fund and must be 
488.8   distributed in the same manner as if the parcel had been sold. 
488.9      The county auditor, with the approval of the county board, 
488.10  may provide for the demolition of any structure on tax-forfeited 
488.11  lands, if in the opinion of the county board, the county 
488.12  auditor, and the land commissioner, if there is one, the sale of 
488.13  the land with the structure on it, or the continued existence of 
488.14  the structure by reason of age, dilapidated condition or 
488.15  excessive size as compared with nearby structures, will result 
488.16  in a material lessening of net tax capacities of real estate in 
488.17  the vicinity of the tax-forfeited lands, or if the demolition of 
488.18  the structure or structures will aid in disposing of the 
488.19  tax-forfeited property. 
488.20     Before the sale of a parcel of forfeited land located in an 
488.21  urban area, the county auditor may with the approval of the 
488.22  county board provide for the grading of the land by filling or 
488.23  the removal of any surplus material from it.  If the physical 
488.24  condition of forfeited lands is such that a reasonable grading 
488.25  of the lands is necessary for the protection and preservation of 
488.26  the property of any adjoining owner, the adjoining property 
488.27  owner or owners may apply to the county board to have the 
488.28  grading done.  If, after considering the application, the county 
488.29  board believes that the grading will enhance the value of the 
488.30  forfeited lands commensurate with the cost involved, it may 
488.31  approve it, and the work must be performed under the supervision 
488.32  of the county or city engineer, as the case may be, and the 
488.33  expense paid from the forfeited tax sale fund. 
488.34     Sec. 6.  Minnesota Statutes 2000, section 290A.03, 
488.35  subdivision 12, is amended to read: 
488.36     Subd. 12.  [GROSS RENT.] (a) "Gross rent" means rental paid 
489.1   for the right of occupancy, at arms-length, of a homestead, 
489.2   exclusive of charges for any medical services furnished by the 
489.3   landlord as a part of the rental agreement, whether expressly 
489.4   set out in the rental agreement or not. 
489.5      (b) The gross rent of a resident of a nursing home or 
489.6   intermediate care facility is $350 per month.  The gross rent of 
489.7   a resident of an adult foster care home is $550 per month.  
489.8   Beginning for rent paid in 2002, the commissioner shall annually 
489.9   adjust for inflation the gross rent amounts stated in this 
489.10  paragraph.  The adjustment must be made in accordance with 
489.11  section 1f of the Internal Revenue Code, except that for 
489.12  purposes of this paragraph the percentage increase shall be 
489.13  determined from the year ending on June 30, 2001, to the year 
489.14  ending on June 30 of the year in which the rent is paid.  The 
489.15  commissioner shall round the gross rents to the nearest $10 
489.16  amount.  If the amount ends in $5, the commissioner shall round 
489.17  it up to the next $10 amount.  The determination of the 
489.18  commissioner under this paragraph is not a rule under the 
489.19  Administrative Procedure Act. 
489.20     (c) If the landlord and tenant have not dealt with each 
489.21  other at arms-length and the commissioner determines that the 
489.22  gross rent charged was excessive, the commissioner may adjust 
489.23  the gross rent to a reasonable amount for purposes of this 
489.24  chapter. 
489.25     (d) Any amount paid by a claimant residing in property 
489.26  assessed pursuant to section 273.124, subdivision 3, 4, 5, or 6 
489.27  for occupancy in that property shall be excluded from gross rent 
489.28  for purposes of this chapter.  However, property taxes imputed 
489.29  to the homestead of the claimant or the dwelling unit occupied 
489.30  by the claimant that qualifies for homestead treatment pursuant 
489.31  to section 273.124, subdivision 3, 4, 5, or 6 shall be included 
489.32  within the term "property taxes payable" as defined in 
489.33  subdivision 13, notwithstanding the fact that ownership is not 
489.34  in the name of the claimant. 
489.35     [EFFECTIVE DATE.] This section is effective for refunds 
489.36  based on rent paid after December 31, 2000. 
490.1      Sec. 7.  Minnesota Statutes 2000, section 290A.15, is 
490.2   amended to read: 
490.3      290A.15 [CLAIM APPLIED AGAINST OUTSTANDING LIABILITY.] 
490.4      The amount of any claim otherwise payable under this 
490.5   chapter may be applied by the commissioner against any 
490.6   delinquent tax liability of the claimant or spouse of the 
490.7   claimant payable to the department of revenue any member of the 
490.8   household.  If there are two members of the household, the 
490.9   commissioner may apply only one-half of a refund to the separate 
490.10  liability of either member of the household. 
490.11     [EFFECTIVE DATE.] This section is effective beginning with 
490.12  refunds paid on or after July 1, 2001. 
490.13     Sec. 8.  Minnesota Statutes 2000, section 477A.011, 
490.14  subdivision 36, is amended to read: 
490.15     Subd. 36.  [CITY AID BASE.] (a) Except as provided in 
490.16  paragraphs (b) to (n), "city aid base" means, for each city, the 
490.17  sum of the local government aid and equalization aid it was 
490.18  originally certified to receive in calendar year 1993 under 
490.19  Minnesota Statutes 1992, section 477A.013, subdivisions 3 and 5, 
490.20  and the amount of disparity reduction aid it received in 
490.21  calendar year 1993 under Minnesota Statutes 1992, section 
490.22  273.1398, subdivision 3. 
490.23     (b) For aids payable in 1996 and thereafter, a city that in 
490.24  1992 or 1993 transferred an amount from governmental funds to 
490.25  its sewer and water fund, which amount exceeded its net levy for 
490.26  taxes payable in the year in which the transfer occurred, has a 
490.27  "city aid base" equal to the sum of (i) its city aid base, as 
490.28  calculated under paragraph (a), and (ii) one-half of the 
490.29  difference between its city aid distribution under section 
490.30  477A.013, subdivision 9, for aids payable in 1995 and its city 
490.31  aid base for aids payable in 1995. 
490.32     (c) The city aid base for any city with a population less 
490.33  than 500 is increased by $40,000 for aids payable in calendar 
490.34  year 1995 and thereafter, and the maximum amount of total aid it 
490.35  may receive under section 477A.013, subdivision 9, paragraph 
490.36  (c), is also increased by $40,000 for aids payable in calendar 
491.1   year 1995 only, provided that: 
491.2      (i) the average total tax capacity rate for taxes payable 
491.3   in 1995 exceeds 200 percent; 
491.4      (ii) the city portion of the tax capacity rate exceeds 100 
491.5   percent; and 
491.6      (iii) its city aid base is less than $60 per capita. 
491.7      (d) The city aid base for a city is increased by $20,000 in 
491.8   1998 and thereafter and the maximum amount of total aid it may 
491.9   receive under section 477A.013, subdivision 9, paragraph (c), is 
491.10  also increased by $20,000 in calendar year 1998 only, provided 
491.11  that: 
491.12     (i) the city has a population in 1994 of 2,500 or more; 
491.13     (ii) the city is located in a county, outside of the 
491.14  metropolitan area, which contains a city of the first class; 
491.15     (iii) the city's net tax capacity used in calculating its 
491.16  1996 aid under section 477A.013 is less than $400 per capita; 
491.17  and 
491.18     (iv) at least four percent of the total net tax capacity, 
491.19  for taxes payable in 1996, of property located in the city is 
491.20  classified as railroad property. 
491.21     (e) The city aid base for a city is increased by $200,000 
491.22  in 1999 and thereafter and the maximum amount of total aid it 
491.23  may receive under section 477A.013, subdivision 9, paragraph 
491.24  (c), is also increased by $200,000 in calendar year 1999 only, 
491.25  provided that: 
491.26     (i) the city was incorporated as a statutory city after 
491.27  December 1, 1993; 
491.28     (ii) its city aid base does not exceed $5,600; and 
491.29     (iii) the city had a population in 1996 of 5,000 or more. 
491.30     (f) The city aid base for a city is increased by $450,000 
491.31  in 1999 to 2008 and the maximum amount of total aid it may 
491.32  receive under section 477A.013, subdivision 9, paragraph (c), is 
491.33  also increased by $450,000 in calendar year 1999 only, provided 
491.34  that: 
491.35     (i) the city had a population in 1996 of at least 50,000; 
491.36     (ii) its population had increased by at least 40 percent in 
492.1   the ten-year period ending in 1996; and 
492.2      (iii) its city's net tax capacity for aids payable in 1998 
492.3   is less than $700 per capita. 
492.4      (g) Beginning in 2002 2004, the city aid base for a city is 
492.5   equal to the sum of its city aid base in 2001 2003 and the 
492.6   amount of additional aid it was certified to receive under 
492.7   section 477A.06 in 2001 2003.  For 2002 2004 only, the maximum 
492.8   amount of total aid a city may receive under section 477A.013, 
492.9   subdivision 9, paragraph (c), is also increased by the amount it 
492.10  was certified to receive under section 477A.06 in 2001 2003. 
492.11     (h) The city aid base for a city is increased by $150,000 
492.12  for aids payable in 2000 and thereafter, and the maximum amount 
492.13  of total aid it may receive under section 477A.013, subdivision 
492.14  9, paragraph (c), is also increased by $150,000 in calendar year 
492.15  2000 only, provided that: 
492.16     (1) the city has a population that is greater than 1,000 
492.17  and less than 2,500; 
492.18     (2) its commercial and industrial percentage for aids 
492.19  payable in 1999 is greater than 45 percent; and 
492.20     (3) the total market value of all commercial and industrial 
492.21  property in the city for assessment year 1999 is at least 15 
492.22  percent less than the total market value of all commercial and 
492.23  industrial property in the city for assessment year 1998. 
492.24     (i) The city aid base for a city is increased by $200,000 
492.25  in 2000 and thereafter, and the maximum amount of total aid it 
492.26  may receive under section 477A.013, subdivision 9, paragraph 
492.27  (c), is also increased by $200,000 in calendar year 2000 only, 
492.28  provided that: 
492.29     (1) the city had a population in 1997 of 2,500 or more; 
492.30     (2) the net tax capacity of the city used in calculating 
492.31  its 1999 aid under section 477A.013 is less than $650 per 
492.32  capita; 
492.33     (3) the pre-1940 housing percentage of the city used in 
492.34  calculating 1999 aid under section 477A.013 is greater than 12 
492.35  percent; 
492.36     (4) the 1999 local government aid of the city under section 
493.1   477A.013 is less than 20 percent of the amount that the formula 
493.2   aid of the city would have been if the need increase percentage 
493.3   was 100 percent; and 
493.4      (5) the city aid base of the city used in calculating aid 
493.5   under section 477A.013 is less than $7 per capita. 
493.6      (j) The city aid base for a city is increased by $225,000 
493.7   in calendar years 2000 to 2002 and the maximum amount of total 
493.8   aid it may receive under section 477A.013, subdivision 9, 
493.9   paragraph (c), is also increased by $225,000 in calendar year 
493.10  2000 only, provided that: 
493.11     (1) the city had a population of at least 5,000; 
493.12     (2) its population had increased by at least 50 percent in 
493.13  the ten-year period ending in 1997; 
493.14     (3) the city is located outside of the Minneapolis-St. Paul 
493.15  metropolitan statistical area as defined by the United States 
493.16  Bureau of the Census; and 
493.17     (4) the city received less than $30 per capita in aid under 
493.18  section 477A.013, subdivision 9, for aids payable in 1999. 
493.19     (k) The city aid base for a city is increased by $102,000 
493.20  in 2000 and thereafter, and the maximum amount of total aid it 
493.21  may receive under section 477A.013, subdivision 9, paragraph 
493.22  (c), is also increased by $102,000 in calendar year 2000 only, 
493.23  provided that: 
493.24     (1) the city has a population in 1997 of 2,000 or more; 
493.25     (2) the net tax capacity of the city used in calculating 
493.26  its 1999 aid under section 477A.013 is less than $455 per 
493.27  capita; 
493.28     (3) the net levy of the city used in calculating 1999 aid 
493.29  under section 477A.013 is greater than $195 per capita; and 
493.30     (4) the 1999 local government aid of the city under section 
493.31  477A.013 is less than 38 percent of the amount that the formula 
493.32  aid of the city would have been if the need increase percentage 
493.33  was 100 percent. 
493.34     (l) The city aid base for a city is increased by $32,000 in 
493.35  2001 and thereafter, and the maximum amount of total aid it may 
493.36  receive under section 477A.013, subdivision 9, paragraph (c), is 
494.1   also increased by $32,000 in calendar year 2001 only, provided 
494.2   that: 
494.3      (1) the city has a population in 1998 that is greater than 
494.4   200 but less than 500; 
494.5      (2) the city's revenue need used in calculating aids 
494.6   payable in 2000 was greater than $200 per capita; 
494.7      (3) the city net tax capacity for the city used in 
494.8   calculating aids available in 2000 was equal to or less than 
494.9   $200 per capita; 
494.10     (4) the city aid base of the city used in calculating aid 
494.11  under section 477A.013 is less than $65 per capita; and 
494.12     (5) the city's formula aid for aids payable in 2000 was 
494.13  greater than zero. 
494.14     (m) The city aid base for a city is increased by $7,200 in 
494.15  2001 and thereafter, and the maximum amount of total aid it may 
494.16  receive under section 477A.013, subdivision 9, paragraph (c), is 
494.17  also increased by $7,200 in calendar year 2001 only, provided 
494.18  that: 
494.19     (1) the city had a population in 1998 that is greater than 
494.20  200 but less than 500; 
494.21     (2) the city's commercial industrial percentage used in 
494.22  calculating aids payable in 2000 was less than ten percent; 
494.23     (3) more than 25 percent of the city's population was 60 
494.24  years old or older according to the 1990 census; 
494.25     (4) the city aid base of the city used in calculating aid 
494.26  under section 477A.013 is less than $15 per capita; and 
494.27     (5) the city's formula aid for aids payable in 2000 was 
494.28  greater than zero. 
494.29     (n) The city aid base for a city is increased by $45,000 in 
494.30  2001 and thereafter, and the maximum amount of total aid it may 
494.31  receive under section 477A.013, subdivision 9, paragraph (c), is 
494.32  also increased by $45,000 in calendar year 2001 only, provided 
494.33  that: 
494.34     (1) the net tax capacity of the city used in calculating 
494.35  its 2000 aid under section 477A.013 is less than $810 per 
494.36  capita; 
495.1      (2) the population of the city declined more than two 
495.2   percent between 1988 and 1998; 
495.3      (3) the net levy of the city used in calculating 2000 aid 
495.4   under section 477A.013 is greater than $240 per capita; and 
495.5      (4) the city received less than $36 per capita in aid under 
495.6   section 477A.013, subdivision 9, for aids payable in 2000. 
495.7                              ARTICLE 22
495.8                    DEPARTMENT SALES AND USE TAXES 
495.9      Section 1.  Minnesota Statutes 2000, section 289A.50, 
495.10  subdivision 2a, is amended to read: 
495.11     Subd. 2a.  [REFUND OF SALES TAX TO PURCHASERS.] If a vendor 
495.12  has collected from a purchaser a tax on a transaction that is 
495.13  not subject to the tax imposed by chapter 297A, the purchaser 
495.14  may apply directly to the commissioner for a refund under this 
495.15  section if: 
495.16     (a) the purchaser is currently registered to collect and 
495.17  remit the sales and tax or to remit the use tax; and 
495.18     (b) the amount of the refund applied for exceeds $500. 
495.19     The purchaser may not file more than two applications for 
495.20  refund under this subdivision in a calendar year. 
495.21     [EFFECTIVE DATE.] This section is effective the day 
495.22  following final enactment. 
495.23     Sec. 2.  Minnesota Statutes 2000, section 297A.01, 
495.24  subdivision 3, is amended to read: 
495.25     Subd. 3.  A "sale" and a "purchase" includes, but is not 
495.26  limited to, each of the following transactions: 
495.27     (a) Any transfer of title or possession, or both, of 
495.28  tangible personal property, whether absolutely or conditionally, 
495.29  and the leasing of or the granting of a license to use or 
495.30  consume tangible personal property other than manufactured homes 
495.31  used for residential purposes for a continuous period of 30 days 
495.32  or more, for a consideration in money or by exchange or barter; 
495.33     (b) The production, fabrication, printing, or processing of 
495.34  tangible personal property for a consideration for consumers who 
495.35  furnish either directly or indirectly the materials used in the 
495.36  production, fabrication, printing, or processing; 
496.1      (c) The furnishing, preparing, or serving for a 
496.2   consideration of food, meals, or drinks.  "Sale" or "purchase" 
496.3   does not include: 
496.4      (1) meals or drinks served to patients, inmates, or persons 
496.5   residing at hospitals, sanitariums, nursing homes, senior 
496.6   citizens homes, and correctional, detention, and detoxification 
496.7   facilities; 
496.8      (2) meals or drinks purchased for and served exclusively to 
496.9   individuals who are 60 years of age or over and their spouses or 
496.10  to the handicapped and their spouses by governmental agencies, 
496.11  nonprofit organizations, agencies, or churches or pursuant to 
496.12  any program funded in whole or part through 42 USCA sections 
496.13  3001 through 3045, wherever delivered, prepared or served; or 
496.14     (3) meals and lunches served at public and private schools, 
496.15  universities, or colleges. 
496.16  Notwithstanding section 297A.25, subdivision 2, taxable food or 
496.17  meals include, but are not limited to, the following:  
496.18     (i) food or drinks sold by the retailer for immediate 
496.19  consumption on the retailer's premises.  Food and drinks sold 
496.20  within a building or grounds which require an admission charge 
496.21  for entrance are presumed to be sold for consumption on the 
496.22  premises; 
496.23     (ii) food or drinks prepared by the retailer for immediate 
496.24  consumption either on or off the retailer's premises.  For 
496.25  purposes of this subdivision, "food or drinks prepared for 
496.26  immediate consumption" includes any food product upon which an 
496.27  act of preparation including, but not limited to, cooking, 
496.28  mixing, sandwich making, blending, heating, or pouring has been 
496.29  performed by the retailer so the food product may be immediately 
496.30  consumed by the purchaser; 
496.31     (iii) ice cream, ice milk, frozen yogurt products, or 
496.32  frozen novelties sold in single or individual servings including 
496.33  cones, sundaes, and snow cones.  For purposes of this 
496.34  subdivision, "single or individual servings" does not include 
496.35  products when sold in bulk containers or bulk packaging; 
496.36     (iv) soft drinks and other beverages including all 
497.1   carbonated and noncarbonated beverages or drinks sold in liquid 
497.2   form except nonalcoholic beverages or drinks which contain milk 
497.3   or milk products, nonalcoholic beverages or drinks containing 15 
497.4   or more percent fruit juice, and noncarbonated and 
497.5   noneffervescent bottled water sold in individual containers of 
497.6   one-half gallon or more in size; 
497.7      (v) gum, candy, and candy products, except when sold for 
497.8   fundraising purposes by a nonprofit organization that provides 
497.9   educational and social activities primarily for young people 18 
497.10  years of age and under; 
497.11     (vi) ice; 
497.12     (vii) all food sold from vending machines; 
497.13     (viii) all food for immediate consumption sold from 
497.14  concession stands and vehicles; 
497.15     (ix) party trays; 
497.16     (x) all meals and single servings of packaged snack food 
497.17  sold in restaurants and bars; and 
497.18     (xi) bakery products: 
497.19     (A) prepared by the retailer for consumption on the 
497.20  retailer's premises; 
497.21     (B) sold at a place that charges admission; 
497.22     (C) sold from vending machines; or 
497.23     (D) sold in single or individual servings from concession 
497.24  stands, vehicles, bars, and restaurants.  For purposes of this 
497.25  subdivision, "single or individual servings" does not include 
497.26  products when sold in bulk containers or bulk packaging.  
497.27     For purposes of this subdivision, "premises" means the 
497.28  total space and facilities, including buildings, grounds, and 
497.29  parking lots that are made available or that are available for 
497.30  use by the retailer or customer for the purpose of sale or 
497.31  consumption of prepared food and drinks.  The premises of a 
497.32  caterer is the place where the catered food or drinks are 
497.33  served; 
497.34     (d) The granting of the privilege of admission to places of 
497.35  amusement, recreational areas, or athletic events, except a 
497.36  world championship football game sponsored by the national 
498.1   football league, and the privilege of having access to and the 
498.2   use of amusement devices, tanning facilities, reducing salons, 
498.3   steam baths, turkish baths, health clubs, and spas or athletic 
498.4   facilities; 
498.5      (e) The furnishing for a consideration of lodging and 
498.6   related services by a hotel, rooming house, tourist court, motel 
498.7   or trailer camp and of the granting of any similar license to 
498.8   use real property other than the renting or leasing thereof for 
498.9   a continuous period of 30 days or more; 
498.10     (f) The furnishing for a consideration of electricity, gas, 
498.11  water, or steam for use or consumption within this state, or 
498.12  local exchange telephone service, intrastate toll service, and 
498.13  interstate toll service, if that service originates from and is 
498.14  charged to a telephone located in this state.  Telephone service 
498.15  does not include services purchased with prepaid telephone 
498.16  calling cards.  Telephone service includes paging services and 
498.17  private communication service, as defined in United States Code, 
498.18  title 26, section 4252(d), as amended through December 31, 1991, 
498.19  except for private communication service purchased by an agent 
498.20  acting on behalf of the state lottery.  The furnishing for a 
498.21  consideration of access to telephone services by a hotel to its 
498.22  guests is a sale under this clause.  Sales by municipal 
498.23  corporations in a proprietary capacity are included in the 
498.24  provisions of this clause.  The furnishing of water and sewer 
498.25  services for residential use shall not be considered a sale.  
498.26  The sale of natural gas to be used as a fuel in vehicles 
498.27  propelled by natural gas shall not be considered a sale for the 
498.28  purposes of this section; 
498.29     (g) The furnishing for a consideration of cable television 
498.30  services, including charges for basic service, charges for 
498.31  premium service, and any other charges for any other 
498.32  pay-per-view, monthly, or similar television services; 
498.33     (h) The furnishing for a consideration of parking services, 
498.34  whether on a contractual, hourly, or other periodic basis, 
498.35  except for parking at a meter; 
498.36     (i) The furnishing for a consideration of services listed 
499.1   in this paragraph: 
499.2      (i) laundry and dry cleaning services including cleaning, 
499.3   pressing, repairing, altering, and storing clothes, linen 
499.4   services and supply, cleaning and blocking hats, and carpet, 
499.5   drapery, upholstery, and industrial cleaning.  Laundry and dry 
499.6   cleaning services do not include services provided by coin 
499.7   operated facilities operated by the customer; 
499.8      (ii) motor vehicle washing, waxing, and cleaning services, 
499.9   including services provided by coin-operated facilities operated 
499.10  by the customer, and rustproofing, undercoating, and towing of 
499.11  motor vehicles; 
499.12     (iii) building and residential cleaning, maintenance, and 
499.13  disinfecting and exterminating services; 
499.14     (iv) detective services, security services, burglar, fire 
499.15  alarm, and armored car services; but not including services 
499.16  performed within the jurisdiction they serve by off-duty 
499.17  licensed peace officers as defined in section 626.84, 
499.18  subdivision 1, or services provided by a nonprofit organization 
499.19  for monitoring and electronic surveillance of persons placed on 
499.20  in-home detention pursuant to court order or under the direction 
499.21  of the Minnesota department of corrections; 
499.22     (v) pet grooming services; 
499.23     (vi) lawn care, fertilizing, mowing, spraying and sprigging 
499.24  services; garden planting and maintenance; tree, bush, and shrub 
499.25  pruning, bracing, spraying, and surgery; indoor plant care; 
499.26  tree, bush, shrub and stump removal; and tree trimming for 
499.27  public utility lines.  Services performed under a construction 
499.28  contract for the installation of shrubbery, plants, sod, trees, 
499.29  bushes, and similar items are not taxable; 
499.30     (vii) massages, except when provided by a licensed health 
499.31  care facility or professional or upon written referral from a 
499.32  licensed health care facility or professional for treatment of 
499.33  illness, injury, or disease; and 
499.34     (viii) the furnishing for consideration of lodging, board 
499.35  and care services for animals in kennels and other similar 
499.36  arrangements, but excluding veterinary and horse boarding 
500.1   services. 
500.2   The services listed in this paragraph are taxable under section 
500.3   297A.02 if the service is performed wholly within Minnesota or 
500.4   if the service is performed partly within and partly without 
500.5   Minnesota and the greater proportion of the service is performed 
500.6   in Minnesota, based on the cost of performance.  In applying the 
500.7   provisions of this chapter, the terms "tangible personal 
500.8   property" and "sales at retail" include taxable services and the 
500.9   provision of taxable services, unless specifically provided 
500.10  otherwise.  Services performed by an employee for an employer 
500.11  are not taxable under this paragraph.  Services performed by a 
500.12  partnership or association for another partnership or 
500.13  association are not taxable under this paragraph if one of the 
500.14  entities owns or controls more than 80 percent of the voting 
500.15  power of the equity interest in the other entity.  Services 
500.16  performed between members of an affiliated group of corporations 
500.17  are not taxable.  For purposes of this section, "affiliated 
500.18  group of corporations" includes those entities that would be 
500.19  classified as a member of an affiliated group under United 
500.20  States Code, title 26, section 1504, as amended through December 
500.21  31, 1987, and who are eligible to file a consolidated tax return 
500.22  for federal income tax purposes; 
500.23     (j) A "sale" and a "purchase" includes the transfer of 
500.24  computer software, meaning information and directions that 
500.25  dictate the function performed by data processing equipment.  A 
500.26  "sale" and a "purchase" does not include the design, 
500.27  development, writing, translation, fabrication, lease, or 
500.28  transfer for a consideration of title or possession of a custom 
500.29  computer program; and 
500.30     (k) The granting of membership in a club, association, or 
500.31  other organization if: 
500.32     (1) the club, association, or other organization makes 
500.33  available for the use of its members sports and athletic 
500.34  facilities (without regard to whether a separate charge is 
500.35  assessed for use of the facilities); and 
500.36     (2) use of the sports and athletic facilities is not made 
501.1   available to the general public on the same basis as it is made 
501.2   available to members.  
501.3   Granting of membership includes both one-time initiation fees 
501.4   and periodic membership dues.  Sports and athletic facilities 
501.5   include golf courses, tennis, racquetball, handball and squash 
501.6   courts, basketball and volleyball facilities, running tracks, 
501.7   exercise equipment, swimming pools, and other similar athletic 
501.8   or sports facilities.  The provisions of this paragraph do not 
501.9   apply to camps or other recreation facilities owned and operated 
501.10  by an exempt organization under section 501(c)(3) of the 
501.11  Internal Revenue Code of 1986, as amended through December 31, 
501.12  1992, for educational and social activities for young people 
501.13  primarily age 18 and under.  
501.14     [EFFECTIVE DATE; INSTRUCTION TO REVISOR.] This section is 
501.15  effective the day following final enactment.  In the next 
501.16  edition of Minnesota Statutes, the revisor of statutes shall 
501.17  codify the amendment in this section in Minnesota Statutes, 
501.18  section 297A.61, subdivision 3. 
501.19     Sec. 3.  Minnesota Statutes 2000, section 297A.01, 
501.20  subdivision 5, is amended to read: 
501.21     Subd. 5.  "Storage" includes any keeping or retention in 
501.22  Minnesota for any purpose except sale in the regular course of 
501.23  business or subsequent use solely outside Minnesota of tangible 
501.24  personal property. 
501.25     [EFFECTIVE DATE; INSTRUCTION TO REVISOR.] (a) This section 
501.26  is effective for purchases, sales, storage, use, or consumption 
501.27  occurring after June 30, 1997. 
501.28     (b) In the next edition of Minnesota Statutes, the revisor 
501.29  shall codify the amendment to this section in Minnesota 
501.30  Statutes, section 297A.61, subdivision 5. 
501.31     Sec. 4.  Minnesota Statutes 2000, section 297A.07, 
501.32  subdivision 3, is amended to read: 
501.33     Subd. 3.  [NEW PERMITS AFTER REVOCATION.] The commissioner 
501.34  shall not issue a new permit or reinstate a revoked permit after 
501.35  revocation unless the taxpayer applies for a permit and provides 
501.36  reasonable evidence of intention to comply with the sales and 
502.1   use tax laws and rules.  The commissioner may require the 
502.2   applicant to supply security, in addition to that authorized by 
502.3   section 297A.28, as is reasonably necessary to insure compliance 
502.4   with the sales and use tax laws and rules.  If the commissioner 
502.5   issues or reinstates a permit not in conformance with the 
502.6   requirements of this subdivision or applicable rules, the 
502.7   commissioner may cancel the permit upon notice to the permit 
502.8   holder.  The notice must be served by first class and certified 
502.9   mail at the permit holder's last known address.  The 
502.10  cancellation shall be effective immediately, subject to the 
502.11  right of the permit holder to show that the permit was issued in 
502.12  conformance with the requirements of this subdivision and 
502.13  applicable rules.  Upon such showing, the permit must be 
502.14  reissued. 
502.15     If a taxpayer has had a permit or permits revoked three 
502.16  times in a five-year period, the commissioner shall not issue a 
502.17  new permit or reinstate the revoked permit until 24 months have 
502.18  elapsed after revocation and the taxpayer has satisfied the 
502.19  conditions for reinstatement of a revoked permit or issuance of 
502.20  a new permit imposed by this section and rules adopted hereunder.
502.21     For purposes of this subdivision, the term "taxpayer" means 
502.22  an individual, if a revoked permit was issued to or in the name 
502.23  of an individual, or a corporation or partnership, if a revoked 
502.24  permit was issued to or in the name of a corporation or 
502.25  partnership.  Taxpayer also means an officer of a corporation, a 
502.26  member of a partnership, or an individual who is liable for 
502.27  delinquent sales taxes, either for the entity for which the new 
502.28  or reinstated permit is at issue, or for another entity for 
502.29  which a permit was previously revoked, or personally as a permit 
502.30  holder. 
502.31     [EFFECTIVE DATE; INSTRUCTION TO REVISOR.] (a) This section 
502.32  is effective the day following final enactment.  
502.33     (b) In the next edition of Minnesota Statutes, the revisor 
502.34  shall codify the amendments to this section in Minnesota 
502.35  Statutes, section 297A.86, subdivision 2. 
502.36     Sec. 5.  Minnesota Statutes 2000, section 297A.25, 
503.1   subdivision 3, is amended to read: 
503.2      Subd. 3.  [MEDICINES; MEDICAL DEVICES.] The gross receipts 
503.3   from the sale of and storage, use, or consumption of prescribed 
503.4   drugs, prescribed medicine and insulin, intended for use, 
503.5   internal or external, in the cure, mitigation, treatment or 
503.6   prevention of illness or disease in human beings are exempt, 
503.7   together with prescription glasses, fever thermometers, 
503.8   therapeutic, and prosthetic devices.  "Prescribed drugs" or 
503.9   "prescribed medicine" includes over-the-counter drugs or 
503.10  medicine prescribed by a licensed physician health care 
503.11  professional.  "Therapeutic devices" includes reusable finger 
503.12  pricking devices for the extraction of blood, blood glucose 
503.13  monitoring machines, and other diagnostic agents used in 
503.14  diagnosing, monitoring, or treating diabetes.  Nonprescription 
503.15  analgesics consisting principally (determined by the weight of 
503.16  all ingredients) of acetaminophen, acetylsalicylic acid, 
503.17  ibuprofen, ketoprofen, naproxen, and other nonprescription 
503.18  analgesics that are approved by the United States Food and Drug 
503.19  Administration for internal use by human beings, or a 
503.20  combination thereof, are exempt. 
503.21     Medical supplies purchased by a licensed health care 
503.22  facility or licensed health care professional to provide medical 
503.23  treatment to residents or patients are exempt.  The exemption 
503.24  does not apply to medical equipment or components of medical 
503.25  equipment, laboratory supplies, radiological supplies, and other 
503.26  items used in providing medical services.  For purposes of this 
503.27  subdivision, "medical supplies" means adhesive and nonadhesive 
503.28  bandages, gauze pads and strips, cotton applicators, 
503.29  antiseptics, nonprescription drugs, eye solution, and other 
503.30  similar supplies used directly on the resident or patient in 
503.31  providing medical services. 
503.32     [EFFECTIVE DATE; INSTRUCTION TO REVISOR.] This section is 
503.33  effective the day following final enactment.  In the next 
503.34  edition of Minnesota Statutes, the revisor of statutes shall 
503.35  codify the amendment in this section in Minnesota Statutes, 
503.36  section 297A.67, subdivision 7. 
504.1      Sec. 6.  Minnesota Statutes 2000, section 297A.25, 
504.2   subdivision 11, is amended to read: 
504.3      Subd. 11.  [SALES TO GOVERNMENT.] The gross receipts from 
504.4   all sales, including sales in which title is retained by a 
504.5   seller or a vendor or is assigned to a third party under an 
504.6   installment sale or lease purchase agreement under section 
504.7   465.71, of tangible personal property to, and all storage, use 
504.8   or consumption of such property by, the United States and its 
504.9   agencies and instrumentalities, the University of Minnesota, 
504.10  state universities, community colleges, technical colleges, 
504.11  state academies, the Perpich center for arts education, an 
504.12  instrumentality of a political subdivision that is accredited as 
504.13  an optional/special function school by the North Central 
504.14  Association of Colleges and Schools, school districts, public 
504.15  libraries, public library systems, multicounty, multitype 
504.16  library systems as defined in section 134.001, county law 
504.17  libraries under chapter 134A, state agency libraries, the state 
504.18  library under section 480.09, and the legislative reference 
504.19  library are exempt. 
504.20     As used in this subdivision, "school districts" means 
504.21  public school entities and districts of every kind and nature 
504.22  organized under the laws of the state of Minnesota, including, 
504.23  without limitation, school districts, intermediate school 
504.24  districts, education districts, service cooperatives, secondary 
504.25  vocational cooperative centers, special education cooperatives, 
504.26  joint purchasing cooperatives, telecommunication cooperatives, 
504.27  regional management information centers, and any instrumentality 
504.28  of a school district, as defined in section 471.59. 
504.29     Sales exempted by this subdivision include sales under 
504.30  section 297A.01, subdivision 3, paragraph (f).  
504.31     Sales to hospitals and nursing homes owned and operated by 
504.32  political subdivisions of the state of tangible personal 
504.33  property and taxable services used at or by the hospitals and 
504.34  nursing homes are exempt under this subdivision.  
504.35     Sales of supplies and equipment used in the operation of an 
504.36  ambulance service owned and operated by a political subdivision 
505.1   of the state are exempt under this subdivision provided that the 
505.2   supplies and equipment are used in the course of providing 
505.3   medical care.  Sales to a political subdivision of repair and 
505.4   replacement parts for emergency rescue vehicles and fire trucks 
505.5   and apparatus are exempt under this subdivision.  
505.6      Sales to a political subdivision of machinery and 
505.7   equipment, except for motor vehicles, used directly for mixed 
505.8   municipal solid waste management services at a solid waste 
505.9   disposal facility as defined in section 115A.03, subdivision 10, 
505.10  are exempt under this subdivision.  
505.11     Sales to political subdivisions of chore and homemaking 
505.12  services to be provided to elderly or disabled individuals are 
505.13  exempt. 
505.14     Sales to a town of gravel and of machinery, equipment, and 
505.15  accessories, except motor vehicles, used exclusively for road 
505.16  and bridge maintenance, and leases of motor vehicles exempt from 
505.17  tax under section 297B.03, clause (10), are exempt. 
505.18     Sales of telephone services to the department of 
505.19  administration that are used to provide telecommunications 
505.20  services through the intertechnologies revolving fund are exempt 
505.21  under this subdivision. 
505.22     This exemption shall not apply to building, construction or 
505.23  reconstruction materials purchased by a contractor or a 
505.24  subcontractor as a part of a lump-sum contract or similar type 
505.25  of contract with a guaranteed maximum price covering both labor 
505.26  and materials for use in the construction, alteration, or repair 
505.27  of a building or facility.  This exemption does not apply to 
505.28  construction materials purchased by tax exempt entities or their 
505.29  contractors to be used in constructing buildings or facilities 
505.30  which will not be used principally by the tax exempt entities. 
505.31     This exemption does not apply to the leasing of a motor 
505.32  vehicle as defined in section 297B.01, subdivision 5, except for 
505.33  leases entered into by the United States or its agencies or 
505.34  instrumentalities. 
505.35     The tax imposed on sales to political subdivisions of the 
505.36  state under this section applies to all political subdivisions 
506.1   other than those explicitly exempted under this subdivision, 
506.2   notwithstanding section 115A.69, subdivision 6, 116A.25, 
506.3   360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2, 
506.4   469.127, 473.448, 473.545, or 473.608 or any other law to the 
506.5   contrary enacted before 1992. 
506.6      Sales exempted by this subdivision include sales made to 
506.7   other states or political subdivisions of other states, if the 
506.8   sale would be exempt from taxation if it occurred in that state, 
506.9   but do not include sales under section 297A.01, subdivision 3, 
506.10  paragraphs (c) and (e). 
506.11     [EFFECTIVE DATE; INSTRUCTION TO REVISOR.] This section is 
506.12  effective the day following final enactment.  In the next 
506.13  edition of Minnesota Statutes, the revisor of statutes shall 
506.14  codify the amendment in this section in Minnesota Statutes, 
506.15  section 297A.70, subdivision 2. 
506.16     Sec. 7.  Minnesota Statutes 2000, section 297A.86, 
506.17  subdivision 1, is amended to read: 
506.18     Subdivision 1.  [NOTICE OF REVOCATION; HEARINGS.] (a) If a 
506.19  person fails to comply with this chapter or the sales and use 
506.20  tax provisions of chapter 289A or the rules adopted under either 
506.21  chapter related to sales and use tax, or if any person fails to 
506.22  comply with chapter 297F or the rules related to cigarette and 
506.23  tobacco products, without reasonable cause, the commissioner may 
506.24  give the person 30 days' notice in writing, specifying the 
506.25  violations, and stating that based on the violations the 
506.26  commissioner intends to revoke the person's permit.  The notice 
506.27  must also advise the person of the right to contest the 
506.28  revocation under this subdivision.  It must also explain the 
506.29  general procedures for a contested case hearing under chapter 
506.30  14.  The notice may be served personally or by mail in the 
506.31  manner prescribed for service of an order of assessment. 
506.32     (b) If the person does not request a hearing within 30 days 
506.33  after the date of the notice of intent, the commissioner may 
506.34  serve a notice of revocation of permit upon the person, and the 
506.35  permit is revoked.  If a hearing is timely requested, and held, 
506.36  the permit is revoked after the commissioner serves an order of 
507.1   revocation of permit under section 14.62, subdivision 1. 
507.2      [EFFECTIVE DATE.] This section is effective for violations 
507.3   occurring on or after July 1, 2001. 
507.4      Sec. 8.  Minnesota Statutes 2000, section 297B.03, is 
507.5   amended to read: 
507.6      297B.03 [EXEMPTIONS.] 
507.7      There is specifically exempted from the provisions of this 
507.8   chapter and from computation of the amount of tax imposed by it 
507.9   the following:  
507.10     (1) purchase or use, including use under a lease purchase 
507.11  agreement or installment sales contract made pursuant to section 
507.12  465.71, of any motor vehicle by the United States and its 
507.13  agencies and instrumentalities and by any person described in 
507.14  and subject to the conditions provided in section 297A.25, 
507.15  subdivision 18; 
507.16     (2) purchase or use of any motor vehicle by any person who 
507.17  was a resident of another state or country at the time of the 
507.18  purchase and who subsequently becomes a resident of Minnesota, 
507.19  provided the purchase occurred more than 60 days prior to the 
507.20  date such person began residing in the state of Minnesota and 
507.21  the motor vehicle was registered in the person's name in the 
507.22  other state or country; 
507.23     (3) purchase or use of any motor vehicle by any person 
507.24  making a valid election to be taxed under the provisions of 
507.25  section 297A.211; 
507.26     (4) purchase or use of any motor vehicle previously 
507.27  registered in the state of Minnesota when such transfer 
507.28  constitutes a transfer within the meaning of section 118, 331, 
507.29  332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 
507.30  1563(a) of the Internal Revenue Code of 1986, as amended through 
507.31  December 31, 1999; 
507.32     (5) purchase or use of any vehicle owned by a resident of 
507.33  another state and leased to a Minnesota based private or for 
507.34  hire carrier for regular use in the transportation of persons or 
507.35  property in interstate commerce provided the vehicle is titled 
507.36  in the state of the owner or secured party, and that state does 
508.1   not impose a sales tax or sales tax on motor vehicles used in 
508.2   interstate commerce; 
508.3      (6) purchase or use of a motor vehicle by a private 
508.4   nonprofit or public educational institution for use as an 
508.5   instructional aid in automotive training programs operated by 
508.6   the institution.  "Automotive training programs" includes motor 
508.7   vehicle body and mechanical repair courses but does not include 
508.8   driver education programs; 
508.9      (7) purchase of a motor vehicle for use as an ambulance by 
508.10  an ambulance service licensed under section 144E.10; 
508.11     (8) purchase of a motor vehicle by or for a public library, 
508.12  as defined in section 134.001, subdivision 2, as a bookmobile or 
508.13  library delivery vehicle; 
508.14     (9) purchase of a ready-mixed concrete truck; 
508.15     (10) purchase or use of a motor vehicle by a town for use 
508.16  exclusively for road maintenance, including snowplows and dump 
508.17  trucks, but not including automobiles, vans, or pickup trucks; 
508.18     (11) purchase or use of a motor vehicle by a corporation, 
508.19  society, association, foundation, or institution organized and 
508.20  operated exclusively for charitable, religious, or educational 
508.21  purposes, except a public school, university, or library, but 
508.22  only if the vehicle is: 
508.23     (i) a truck, as defined in section 168.011, a bus, as 
508.24  defined in section 168.011, or a passenger automobile, as 
508.25  defined in section 168.011, if the automobile is designed and 
508.26  used for carrying more than nine persons including the driver; 
508.27  and 
508.28     (ii) intended to be used primarily to transport tangible 
508.29  personal property or individuals, other than employees, to whom 
508.30  the organization provides service in performing its charitable, 
508.31  religious, or educational purpose. 
508.32     [EFFECTIVE DATE.] This section is effective the day 
508.33  following final enactment, except that the change to paragraph 
508.34  (11) is effective for sales and purchases occurring after June 
508.35  30, 2000. 
508.36     Sec. 9.  [297F.185] [REVOCATION OF SALES AND USE TAX 
509.1   PERMITS.] 
509.2      If a person fails to comply with this chapter, or the rules 
509.3   related to cigarette and tobacco products, the commissioner may 
509.4   revoke the person's sales and use tax permit as provided in 
509.5   section 297A.86. 
509.6      [EFFECTIVE DATE.] This section is effective for violations 
509.7   occurring on or after July 1, 2001. 
509.8      Sec. 10.  [REPEALER.] 
509.9      Minnesota Statutes 2000, section 297B.032, is repealed. 
509.10     [EFFECTIVE DATE.] This section is effective the day 
509.11  following final enactment. 
509.12                             ARTICLE 23
509.13                      DEPARTMENT SPECIAL TAXES 
509.14     Section 1.  Minnesota Statutes 2000, section 287.08, is 
509.15  amended to read: 
509.16     287.08 [TAX, HOW PAYABLE; RECEIPTS.] 
509.17     (a) The tax imposed by sections 287.01 to 287.12 must be 
509.18  paid to the treasurer of any county in this state in which the 
509.19  real property or some part is located at or before the time of 
509.20  filing the mortgage for record.  The treasurer shall endorse 
509.21  receipt on the mortgage and the receipt is conclusive proof that 
509.22  the tax has been paid in the amount stated and authorizes any 
509.23  county recorder or registrar of titles to record the mortgage.  
509.24  Its form, in substance, shall be "registration tax hereon of 
509.25  ..................... dollars paid."  If the mortgage is exempt 
509.26  from taxation the endorsement shall, in substance, be "exempt 
509.27  from registration tax."  In either case the receipt must be 
509.28  signed by the treasurer.  In case the treasurer is unable to 
509.29  determine whether a claim of exemption should be allowed, the 
509.30  tax must be paid as in the case of a taxable mortgage.  
509.31     (b) Upon written application of the taxpayer, The county 
509.32  treasurer may refund in whole or in part any mortgage registry 
509.33  tax that has been erroneously paid, or a person having paid a 
509.34  mortgage registry tax amount may seek a refund of the tax, or 
509.35  other appropriate relief, overpayment if a written application 
509.36  by the taxpayer is submitted to the county treasurer within 
510.1   three and one-half years from the date of the overpayment.  If 
510.2   the county has not issued a denial of the application, the 
510.3   taxpayer may bring an action in tax court in the county in which 
510.4   the tax was paid at any time after the expiration of six months 
510.5   from the time that the application was submitted.  A denial of 
510.6   refund may be appealed within 60 days from the date of the 
510.7   denial by bringing an action in tax court in the county in which 
510.8   the tax was paid, within 60 days of the payment.  The action is 
510.9   commenced by the serving of a petition for relief on the county 
510.10  treasurer, and by filing a copy with the court.  The county 
510.11  attorney shall defend the action.  The county treasurer shall 
510.12  notify the treasurer of each county that has or would receive a 
510.13  portion of the tax as paid.  
510.14     (c) If the county treasurer determines a refund should be 
510.15  paid, or if a refund is ordered by the court, the county 
510.16  treasurer of each county that actually received a portion of the 
510.17  tax shall immediately pay a proportionate share of three percent 
510.18  of the refund using any available county funds.  The county 
510.19  treasurer of each county that received, or would have received, 
510.20  a portion of the tax shall also pay their county's proportionate 
510.21  share of the remaining 97 percent of the court-ordered refund on 
510.22  or before the 20th day of the following month using solely the 
510.23  mortgage registry tax funds that would be paid to the 
510.24  commissioner of revenue on that date under section 287.12.  If 
510.25  the funds on hand under this procedure are insufficient to fully 
510.26  fund 97 percent of the court-ordered refund, the county 
510.27  treasurer of the county in which the action was brought shall 
510.28  file a claim with the commissioner of revenue under section 
510.29  16A.48 for the remaining portion of 97 percent of the refund, 
510.30  and shall pay over the remaining portion upon receipt of a 
510.31  warrant from the state issued pursuant to the claim. 
510.32     (d) When any mortgage covers real property located in more 
510.33  than one county in this state the total tax must be paid to the 
510.34  treasurer of the county where the mortgage is first presented 
510.35  for recording, and the payment must be receipted as provided in 
510.36  paragraph (a).  If the principal debt or obligation secured by 
511.1   such a multiple county mortgage exceeds $1,000,000, the nonstate 
511.2   portion of the tax must be divided and paid over by the county 
511.3   treasurer receiving it, on or before the 20th day of each month 
511.4   after receipt, to the county or counties entitled in the ratio 
511.5   that the market value of the real property covered by the 
511.6   mortgage in each county bears to the market value of all the 
511.7   real property in this state described in the mortgage.  In 
511.8   making the division and payment the county treasurer shall send 
511.9   a statement giving the description of the real property 
511.10  described in the mortgage and the market value of the part 
511.11  located in each county.  For this purpose, the treasurer of any 
511.12  county may require the treasurer of any other county to certify 
511.13  to the former the market valuation of any tract of real property 
511.14  in any mortgage. 
511.15     [EFFECTIVE DATE.] This section is effective for 
511.16  overpayments made on or after July 1, 2001. 
511.17     Sec. 2.  Minnesota Statutes 2000, section 287.20, 
511.18  subdivision 9, is amended to read: 
511.19     Subd. 9.  [REORGANIZATION.] "Reorganization" means the 
511.20  transfer of substantially all of the assets of a corporation, a 
511.21  limited liability company, or a partnership not in the usual or 
511.22  regular course of business if at the time of the transfer the 
511.23  transfer qualifies as:  (i) a corporate reorganization under 
511.24  section 368(a) of the Internal Revenue Code of 1986, as amended 
511.25  through December 31, 2000; or (ii) a transfer pursuant to the 
511.26  continuation of an existing partnership under section 708 of the 
511.27  Internal Revenue Code of 1986, as amended through December 31, 
511.28  2000. 
511.29     [EFFECTIVE DATE.] This section is effective for taxable 
511.30  deeds recorded or registered on or after July 1, 2001. 
511.31     Sec. 3.  Minnesota Statutes 2000, section 287.28, is 
511.32  amended to read: 
511.33     287.28 [REFUNDS OR REDEMPTION.] 
511.34     (a) The county treasurer may refund in whole or in part any 
511.35  tax which has been erroneously paid and may allow for or redeem 
511.36  such of the stamps, issued under the authority of sections 
512.1   287.20 to 287.31 as may that have been spoiled, destroyed, or 
512.2   rendered useless or unfit for the purpose intended or for which 
512.3   the owner may have no use or which through mistake may have been 
512.4   improperly or unnecessarily used.  Such order Redemption shall 
512.5   be made only upon written application of the taxpayer.  
512.6      (b) A person having paid a deed tax amount may seek a 
512.7   refund of the tax, or other appropriate relief, The county 
512.8   treasurer may refund any deed tax overpayment if a written 
512.9   application by the taxpayer is submitted to the county treasurer 
512.10  within three and one-half years from the date of the 
512.11  overpayment.  If the county has not issued a denial of the 
512.12  application, the taxpayer may bring an action in tax court in 
512.13  the county in which the tax was paid at any time after the 
512.14  expiration of six months from the time that the application was 
512.15  submitted.  A denial of refund may be appealed within 60 days 
512.16  from the date of the denial by commencing an action in tax court 
512.17  in the county where the tax was paid, within 60 days of the 
512.18  payment.  The action is commenced by serving a petition for 
512.19  relief on the county treasurer, and filing a copy with the 
512.20  court.  The county attorney shall defend the action.  The county 
512.21  treasurer shall notify the treasurer of each county that has, or 
512.22  would receive a portion of the tax as paid.  Any refund of deed 
512.23  tax which the county treasurer determines should be made, and 
512.24  any court ordered refund of deed tax, shall be accomplished 
512.25  using the refund procedures in section 287.08. 
512.26     [EFFECTIVE DATE.] This section is effective for 
512.27  overpayments made on or after July 1, 2001. 
512.28     Sec. 4.  Minnesota Statutes 2000, section 295.50, 
512.29  subdivision 3, is amended to read: 
512.30     Subd. 3.  [GROSS REVENUES.] "Gross revenues" are total 
512.31  amounts received in money or otherwise by: 
512.32     (1) a hospital for patient services; 
512.33     (2) a surgical center for patient services; 
512.34     (3) a health care provider, other than a staff model health 
512.35  carrier, for patient services; 
512.36     (4) a wholesale drug distributor for sale or distribution 
513.1   of legend drugs that are delivered in Minnesota by the wholesale 
513.2   drug distributor, by common carrier, or by mail, unless the 
513.3   legend drugs are delivered to another wholesale drug distributor 
513.4   who sells legend drugs exclusively at wholesale.  Legend drugs 
513.5   do not include nutritional products as defined in Minnesota 
513.6   Rules, part 9505.0325; and 
513.7      (5) a staff model health plan company as gross premiums for 
513.8   enrollees, copayments, deductibles, coinsurance, and fees for 
513.9   patient services covered under its contracts with groups and 
513.10  enrollees. 
513.11     [EFFECTIVE DATE.] This section is effective the day 
513.12  following final enactment. 
513.13     Sec. 5.  Minnesota Statutes 2000, section 295.50, 
513.14  subdivision 4, is amended to read: 
513.15     Subd. 4.  [HEALTH CARE PROVIDER.] (a) "Health care 
513.16  provider" means: 
513.17     (1) a person whose health care occupation is regulated or 
513.18  required to be regulated by the state of Minnesota furnishing 
513.19  any or all of the following goods or services directly to a 
513.20  patient or consumer:  medical, surgical, optical, visual, 
513.21  dental, hearing, nursing services, drugs, laboratory, diagnostic 
513.22  or therapeutic services; 
513.23     (2) a person who provides goods and services not listed in 
513.24  clause (1) that qualify for reimbursement under the medical 
513.25  assistance program provided under chapter 256B; 
513.26     (3) a staff model health plan company; 
513.27     (4) an ambulance service required to be licensed; or 
513.28     (5) a person who sells or repairs hearing aids and related 
513.29  equipment or prescription eyewear. 
513.30     (b) Health care provider does not include: 
513.31     (1) hospitals; medical supplies distributors, except as 
513.32  specified under paragraph (a), clause (5); nursing homes 
513.33  licensed under chapter 144A or licensed in any other 
513.34  jurisdiction; pharmacies; surgical centers; bus and taxicab 
513.35  transportation, or any other providers of transportation 
513.36  services other than ambulance services required to be licensed; 
514.1   supervised living facilities for persons with mental retardation 
514.2   or related conditions, licensed under Minnesota Rules, parts 
514.3   4665.0100 to 4665.9900; residential care homes licensed under 
514.4   chapter 144B; board and lodging establishments providing only 
514.5   custodial services that are licensed under chapter 157 and 
514.6   registered under section 157.17 to provide supportive services 
514.7   or health supervision services; adult foster homes as defined in 
514.8   Minnesota Rules, part 9555.5105; day training and habilitation 
514.9   services for adults with mental retardation and related 
514.10  conditions as defined in section 252.41, subdivision 3; and 
514.11  boarding care homes, as defined in Minnesota Rules, part 
514.12  4655.0100; and adult day care centers as defined in Minnesota 
514.13  Rules, part 9555.9600; 
514.14     (2) home health agencies as defined in Minnesota Rules, 
514.15  part 9505.0175, subpart 15; a person providing personal care 
514.16  services and supervision of personal care services as defined in 
514.17  Minnesota Rules, part 9505.0335; a person providing private duty 
514.18  nursing services as defined in Minnesota Rules, part 9505.0360; 
514.19  and home care providers required to be licensed under chapter 
514.20  144A; 
514.21     (3) a person who employs health care providers solely for 
514.22  the purpose of providing patient services to its employees; and 
514.23     (4) an educational institution that employs health care 
514.24  providers solely for the purpose of providing patient services 
514.25  to its students if the institution does not receive fee for 
514.26  service payments or payments for extended coverage. 
514.27     [EFFECTIVE DATE.] This section is effective for gross 
514.28  revenues received on or after January 1, 2002. 
514.29     Sec. 6.  Minnesota Statutes 2000, section 295.50, 
514.30  subdivision 15, is amended to read: 
514.31     Subd. 15.  [LEGEND DRUG.] "Legend drug" means a legend drug 
514.32  as defined in section 151.01, subdivision 17 that is required by 
514.33  federal law to bear one of the following statements:  "Caution: 
514.34  Federal law prohibits dispensing without prescription" or "Rx 
514.35  only". 
514.36     [EFFECTIVE DATE.] This section is effective the day 
515.1   following final enactment. 
515.2      Sec. 7.  Minnesota Statutes 2000, section 295.52, 
515.3   subdivision 4, is amended to read: 
515.4      Subd. 4.  [USE TAX; PRESCRIPTION DRUGS.] (a) A person that 
515.5   receives prescription drugs for resale or use in Minnesota, 
515.6   other than from a wholesale drug distributor that paid the is 
515.7   subject to tax under subdivision 3, is subject to a tax equal to 
515.8   the price paid to the wholesale drug distributor multiplied by 
515.9   the tax percentage specified in this section.  Liability for the 
515.10  tax is incurred when prescription drugs are received or 
515.11  delivered in Minnesota by the person. 
515.12     (b) A person that receives prescription drugs for use in 
515.13  Minnesota from a nonresident pharmacy required to be registered 
515.14  under section 151.19 is subject to a tax equal to the price paid 
515.15  by the nonresident pharmacy to the wholesale drug distributor or 
515.16  the price received by the nonresident pharmacy, whichever is 
515.17  lower, multiplied by the tax percentage specified in this 
515.18  section.  Liability for the tax is incurred when prescription 
515.19  drugs are received in Minnesota by the person.  
515.20     [EFFECTIVE DATE.] This section is effective the day 
515.21  following final enactment. 
515.22     Sec. 8.  Minnesota Statutes 2000, section 295.57, 
515.23  subdivision 1, is amended to read: 
515.24     Subdivision 1.  [APPLICATION OF OTHER CHAPTERS.] Unless 
515.25  specifically provided otherwise by sections 295.50 to 295.59, 
515.26  the enforcement, interest, and penalty provisions under chapter 
515.27  294, appeal provisions in sections 289A.43 and 289A.65, criminal 
515.28  penalties in section 289A.63, and refunds provisions in section 
515.29  289A.50 chapter 289A, civil penalty provisions applicable to 
515.30  withholding and sales taxes under section 289A.60, and 
515.31  collection and rulemaking provisions under chapter 270, apply to 
515.32  a liability for the taxes imposed under sections 295.50 to 
515.33  295.59. 
515.34     [EFFECTIVE DATE.] This section is effective the day 
515.35  following final enactment. 
515.36     Sec. 9.  Minnesota Statutes 2000, section 296A.16, 
516.1   subdivision 2, is amended to read: 
516.2      Subd. 2.  [FUEL USED IN OTHER VEHICLE; CLAIM FOR REFUND.] 
516.3   Any person who shall buy buys and use uses gasoline for a 
516.4   qualifying purpose other than use in motor vehicles, snowmobiles 
516.5   except as provided in clause (2), or motorboats, or special fuel 
516.6   for a qualifying purpose other than use in licensed motor 
516.7   vehicles, and who shall have paid the tax directly or indirectly 
516.8   through the amount of the tax being included in the price of the 
516.9   gasoline or special fuel, or otherwise, shall be reimbursed and 
516.10  repaid the amount of the tax paid upon filing with the 
516.11  commissioner a claim for refund in the form and manner 
516.12  prescribed by the commissioner, and containing the information 
516.13  the commissioner shall require.  By signing any such claim which 
516.14  is false or fraudulent, the applicant shall be subject to the 
516.15  penalties provided in this chapter for knowingly making a false 
516.16  claim.  The claim shall set forth the total amount of the 
516.17  gasoline so purchased and used by the applicant other than in 
516.18  motor vehicles, or special fuel purchased and used by the 
516.19  applicant other than in licensed motor vehicles, and shall state 
516.20  when and for what purpose it was used.  When a claim contains an 
516.21  error in computation or preparation, the commissioner is 
516.22  authorized to adjust the claim in accordance with the evidence 
516.23  shown on the claim or other information available to the 
516.24  commissioner.  The commissioner, on being satisfied that the 
516.25  claimant is entitled to the payments, shall approve the claim 
516.26  and transmit it to the commissioner of finance.  The words 
516.27  "gasoline" or "special fuel" as used in this subdivision do not 
516.28  include aviation gasoline or special fuel for aircraft.  
516.29  Gasoline or special fuel bought and used for a "qualifying 
516.30  purpose" means: 
516.31     (1) Gasoline or special fuel used in carrying on a trade or 
516.32  business, used on a farm situated in Minnesota, and used for a 
516.33  farming purpose.  "Farm" and "farming purpose" have the meanings 
516.34  given them in section 6420(c)(2), (3), and (4) of the Internal 
516.35  Revenue Code of 1986, as amended through December 31, 1997. 
516.36     (2) Gasoline or special fuel used for off-highway business 
517.1   use.  "Off-highway business use" means any use off the public 
517.2   highway by a person in that person's trade, business, or 
517.3   activity for the production of income.  Off-highway business use 
517.4   includes: 
517.5      (i) use of a passenger snowmobile off the public highways 
517.6   as part of the operations of a resort as defined in section 
517.7   157.15, subdivision 11; and 
517.8      (ii) use of gasoline or special fuel to operate a power 
517.9   takeoff unit on a vehicle, but not including fuel consumed 
517.10  during idling time.  
517.11  Off-highway business use does not include: 
517.12     (i) use as a fuel in a motor vehicle which, at the time of 
517.13  use, is registered or is required to be registered for highway 
517.14  use under the laws of any state or foreign country; or 
517.15     (ii) use of a licensed motor vehicle fuel tank in lieu of a 
517.16  separate storage tank for storing fuel to be used for a 
517.17  qualifying purpose, as defined in this section.  Fuel purchased 
517.18  to be used for a qualifying purpose cannot be placed in the fuel 
517.19  tank of a licensed motor vehicle and must be stored in a 
517.20  separate supply tank. 
517.21     (3) Gasoline or special fuel placed in the fuel tanks of 
517.22  new motor vehicles, manufactured in Minnesota, and shipped by 
517.23  interstate carrier to destinations in other states or foreign 
517.24  countries.  
517.25     By July 1, 1998, the commissioner shall adopt rules that 
517.26  determine the rates and percentages necessary to develop 
517.27  formulas for calculating the refund under clause (2), item (ii). 
517.28     [EFFECTIVE DATE.] This section is effective the day 
517.29  following final enactment. 
517.30     Sec. 10.  [296A.201] [ASSESSMENTS.] 
517.31     Subdivision 1.  [GENERAL RULE.] The commissioner may make 
517.32  determinations, corrections, and assessments with respect to any 
517.33  tax or fee under this chapter, including interest, additions to 
517.34  taxes and fees, and assessable penalties. 
517.35     Subd. 2.  [COMMISSIONER FILED RETURNS.] If a taxpayer fails 
517.36  to file a required return, the commissioner, from information in 
518.1   the commissioner's possession or obtainable by the commissioner, 
518.2   may make a return for the taxpayer.  The return is prima facie 
518.3   correct and valid.  The commissioner may use statistical or 
518.4   other sampling techniques consistent with generally accepted 
518.5   auditing standards in examining returns or records and making 
518.6   assessments. 
518.7      Subd. 3.  [ORDER OF ASSESSMENT; NOTICE AND DEMAND TO 
518.8   TAXPAYER.] (a) If a return has been filed and the commissioner 
518.9   determines that the tax or fee disclosed by the return is 
518.10  different than the tax or fee determined by the examination, the 
518.11  commissioner shall send an order of assessment to the taxpayer.  
518.12  If no return has been filed, the commissioner may make a return 
518.13  for the taxpayer under subdivision 2 or may send an order of 
518.14  assessment under this subdivision.  The order must explain the 
518.15  basis for the assessment and must explain the taxpayer's appeal 
518.16  rights.  An order of assessment is final when made but may be 
518.17  reconsidered by the commissioner under section 296A.25. 
518.18     (b) Penalties under this chapter are not imposed and no 
518.19  collection action can be taken, including the filing of liens 
518.20  under section 270.69, if the amount shown on the order is paid 
518.21  to the commissioner: 
518.22     (1) within 60 days after notice of the amount and demand 
518.23  for its payment have been mailed to the taxpayer by the 
518.24  commissioner; or 
518.25     (2) if an administrative appeal is filed under this 
518.26  chapter, or a tax court appeal is filed under chapter 271, 
518.27  within 60 days following final determination of the appeal if 
518.28  the appeal is based upon a constitutional challenge to the tax 
518.29  or fee, and if not, when the decision of the tax court is made. 
518.30     Subd. 4.  [ERRONEOUS REFUNDS.] An erroneous refund is 
518.31  considered an underpayment of tax or fee on the date made.  An 
518.32  assessment of a deficiency arising out of an erroneous refund 
518.33  may be made at any time within two years from the making of the 
518.34  refund.  If part of the refund was induced by fraud or 
518.35  misrepresentation of a material fact, the assessment may be made 
518.36  at any time. 
519.1      Subd. 5.  [ASSESSMENT PRESUMED VALID.] A return or 
519.2   assessment of tax or fee made by the commissioner is prima facie 
519.3   correct and valid.  The taxpayer has the burden of establishing 
519.4   its incorrectness or invalidity in any related action or 
519.5   proceeding. 
519.6      Subd. 6.  [AGGREGATE REFUND OR ASSESSMENT.] The 
519.7   commissioner, on examining returns of a taxpayer for more than 
519.8   one year or period, may issue one order covering the period 
519.9   under examination that reflects the aggregate refund or 
519.10  additional tax or fee due. 
519.11     Subd. 7.  [SUFFICIENCY OF NOTICE.] An order of assessment, 
519.12  sent postage prepaid by United States mail to the taxpayer at 
519.13  the taxpayer's last known address, is sufficient even if the 
519.14  taxpayer is deceased or is under a legal disability, or, in the 
519.15  case of a corporation, even if the corporation has terminated 
519.16  its existence, unless the department has been provided with a 
519.17  new address by a party authorized to receive notices of 
519.18  assessment. 
519.19     [EFFECTIVE DATE.] This section is effective the day 
519.20  following final enactment. 
519.21     Sec. 11.  Minnesota Statutes 2000, section 296A.21, 
519.22  subdivision 1, is amended to read: 
519.23     Subdivision 1.  [GENERAL RULE RULES.] (a) The commissioner 
519.24  shall make determinations, corrections, and assessments, and 
519.25  refunds with respect to taxes and fees under this chapter, 
519.26  including interest, additions to taxes, and assessable 
519.27  penalties.  Except as otherwise provided in this section, the 
519.28  amount of taxes assessable must be assessed within 3-1/2 years 
519.29  after the date the return is filed. 
519.30     (b) A claim for a refund of an overpayment of state tax or 
519.31  fees must be filed within 3-1/2 years from the date prescribed 
519.32  for filing the return, plus any extension of time granted for 
519.33  filing the return, but only if filed within the extended time; 
519.34  or the claim must be filed within one year from the date of an 
519.35  order assessing tax or fees, or from the date of a return filed 
519.36  by the commissioner, upon payment in full of the tax, fees, 
520.1   penalties, and interest shown on the order or return, whichever 
520.2   period expires later. 
520.3      [EFFECTIVE DATE.] This section is effective the day 
520.4   following final enactment. 
520.5      Sec. 12.  Minnesota Statutes 2000, section 296A.21, 
520.6   subdivision 4, is amended to read: 
520.7      Subd. 4.  [TIME LIMIT FOR REPAYMENT CERTAIN REFUNDS.] No 
520.8   repayment Notwithstanding subdivision 1, paragraph (b), no 
520.9   refund under section 296A.16, subdivision 2, shall be made 
520.10  unless the claim for refund and invoice shall be are filed with 
520.11  the commissioner within one year from the date of purchase.  The 
520.12  postmark on the envelope in which a written claim is mailed 
520.13  shall determine its date of filing. 
520.14     [EFFECTIVE DATE.] This section is effective the day 
520.15  following final enactment. 
520.16     Sec. 13.  Minnesota Statutes 2000, section 297F.16, 
520.17  subdivision 4, is amended to read: 
520.18     Subd. 4.  [ERRONEOUS REFUNDS OR CREDITS.] An erroneous 
520.19  refund or credit is considered an underpayment of tax on the 
520.20  date made.  An assessment of a deficiency arising out of an 
520.21  erroneous refund or credit must be made within 3-1/2 years from 
520.22  the date prescribed for filing the return, plus any extension of 
520.23  time granted for filing the return, but only if filed within the 
520.24  extended time, or two years from the time the tax is paid in 
520.25  full, whichever period expires later two years from the making 
520.26  of the refund.  If part of the refund was induced by fraud or 
520.27  misrepresentation of a material fact, the assessment may be made 
520.28  at any time. 
520.29     [EFFECTIVE DATE.] This section is effective the day 
520.30  following final enactment. 
520.31     Sec. 14.  Minnesota Statutes 2000, section 297G.15, 
520.32  subdivision 4, is amended to read: 
520.33     Subd. 4.  [ERRONEOUS REFUNDS OR CREDITS.] An erroneous 
520.34  refund or credit is considered an underpayment of tax on the 
520.35  date made.  An assessment of a deficiency arising out of an 
520.36  erroneous refund or credit must be made within 3-1/2 years from 
521.1   the date prescribed for filing the return, plus any extension of 
521.2   time granted for filing the return, but only if filed within the 
521.3   extended time, or two years from the time the tax is paid in 
521.4   full, whichever period expires later two years from the making 
521.5   of the refund.  If part of the refund was induced by fraud or 
521.6   misrepresentation of a material fact, the assessment may be made 
521.7   at any time. 
521.8      [EFFECTIVE DATE.] This section is effective the day 
521.9   following final enactment. 
521.10     Sec. 15.  Minnesota Statutes 2000, section 297G.16, 
521.11  subdivision 5, is amended to read: 
521.12     Subd. 5.  [TIME LIMIT FOR REFUNDS.] Unless otherwise 
521.13  provided in this chapter, a claim for a refund of an overpayment 
521.14  of tax must be filed within 3-1/2 years from the date prescribed 
521.15  for filing the return, plus any extension of time granted for 
521.16  filing the return, but only if filed within the extended time, 
521.17  or two years from the time the tax is paid in full, whichever 
521.18  period expires later.  Claimants under this section are subject 
521.19  to the notice requirements of section 289A.38, subdivision 7 or 
521.20  within one year from the date of an order assessing tax or from 
521.21  the date of a return filed by the commissioner, upon payment in 
521.22  full of the tax, penalties, and interest shown on the order or 
521.23  return made by the commissioner, whichever period expires later. 
521.24     [EFFECTIVE DATE.] This section is effective for returns 
521.25  becoming due or orders assessing tax issued on or after the day 
521.26  following final enactment. 
521.27     Sec. 16.  Minnesota Statutes 2000, section 297G.16, 
521.28  subdivision 7, is amended to read: 
521.29     Subd. 7.  [TIME LIMIT FOR A BAD DEBT DEDUCTION.] Claims for 
521.30  refund must be filed with the commissioner within one year of 
521.31  the filing of the taxpayer's income tax return containing the 
521.32  bad debt deduction that is being claimed.  Claimants under this 
521.33  subdivision are subject to the notice requirements of section 
521.34  289A.38, subdivision 7. 
521.35     [EFFECTIVE DATE.] This section is effective the day 
521.36  following final enactment. 
522.1      Sec. 17.  [297H.115] [USE TAX.] 
522.2      Subdivision 1.  [IMPOSITION; LIABILITY OF GENERATORS AND 
522.3   SELF-HAULERS.] (a) A use tax is imposed on the sales price of 
522.4   mixed municipal solid waste management services received by a 
522.5   residential generator at the rate imposed under section 297H.02, 
522.6   unless the tax imposed under section 297H.02 was paid.  The 
522.7   residential generator is liable. 
522.8      (b) A use tax is imposed on the sales price of mixed 
522.9   municipal solid waste management services received by a 
522.10  commercial generator at the rate imposed under section 297H.03, 
522.11  unless the tax imposed under section 297H.03 was paid.  The 
522.12  commercial generator is liable. 
522.13     (c) A use tax is imposed on the volume of nonmixed 
522.14  municipal solid waste that is managed at the rate imposed under 
522.15  section 297H.04, unless the tax imposed under section 297H.04 
522.16  was paid.  The generator is liable. 
522.17     (d) A use tax is imposed on the sales price of mixed 
522.18  municipal solid waste management services received by a 
522.19  self-hauler at the rate imposed under section 297H.05, paragraph 
522.20  (a), unless the tax imposed under section 297H.05, paragraph 
522.21  (a), was paid.  The self-hauler is liable. 
522.22     (e) A use tax is imposed on the volume of nonmixed 
522.23  municipal solid waste managed at the rate imposed under section 
522.24  297H.05, paragraph (b), unless the tax imposed under section 
522.25  297H.05, paragraph (b), was paid.  The self-hauler is liable. 
522.26     Subd. 2.  [PAYMENT; REPORTING.] A generator or self-hauler 
522.27  that is liable under subdivision 1 shall report the use tax on a 
522.28  return prescribed by the commissioner of revenue, and shall 
522.29  remit the tax with the return.  The return and the tax must be 
522.30  filed using the filing cycle and due dates provided for taxes 
522.31  imposed under chapter 297A. 
522.32     Subd. 3.  [COMMISSIONER ASSESSMENT.] (a) The commissioner 
522.33  of revenue may not assess the generator or self-hauler a use tax 
522.34  on a transaction for which the waste management service provider 
522.35  has paid the solid waste management tax, except as provided in 
522.36  paragraph (b). 
523.1      (b) If the waste management service provider who is an 
523.2   accrual basis taxpayer remits a payment and thereafter offsets 
523.3   the amount as a bad debt under section 297H.09, the commissioner 
523.4   of revenue may assess the generator or self-hauler a use tax for 
523.5   the offset amount. 
523.6      [EFFECTIVE DATE.] This section is effective for services 
523.7   received on or after July 1, 2001. 
523.8      Sec. 18.  Minnesota Statutes 2000, section 461.12, is 
523.9   amended by adding a subdivision to read: 
523.10     Subd. 8.  [NOTICE TO COMMISSIONER.] The licensing authority 
523.11  under this section shall, within 30 days of the issuance of a 
523.12  license, inform the commissioner of revenue of the licensee's 
523.13  name, address, trade name, and the effective and expiration 
523.14  dates of the license.  The commissioner of revenue must also be 
523.15  informed of a license renewal, transfer, cancellation, 
523.16  suspension, or revocation during the license period. 
523.17     [EFFECTIVE DATE.] This section is effective for licenses 
523.18  issued, renewed, transferred, canceled, suspended, or revoked on 
523.19  or after January 1, 2002. 
523.20     Sec. 19.  [REPEALER.] 
523.21     Minnesota Statutes 2000, section 296A.16, subdivision 6, is 
523.22  repealed. 
523.23     [EFFECTIVE DATE.] This section is effective the day 
523.24  following final enactment. 
523.25                             ARTICLE 24 
523.26                    CIVIL AND CRIMINAL PENALTIES 
523.27     Section 1.  Minnesota Statutes 2000, section 289A.55, 
523.28  subdivision 9, is amended to read: 
523.29     Subd. 9.  [INTEREST ON PENALTIES.] (a) A penalty imposed 
523.30  under section 289A.60, subdivision 1, 2, 3, 2a, 4, 5, 6, or 21 
523.31  bears interest from the date the return or payment was required 
523.32  to be filed or paid, including any extensions, to the date of 
523.33  payment of the penalty. 
523.34     (b) A penalty not included in paragraph (a) bears interest 
523.35  only if it is not paid within 60 days from the date of notice.  
523.36  In that case interest is imposed from the date of notice to the 
524.1   date of payment. 
524.2      [EFFECTIVE DATE.] This section is effective for tax years 
524.3   beginning after December 31, 2000, and for estate tax returns 
524.4   due after January 1, 2002. 
524.5      Sec. 2.  Minnesota Statutes 2000, section 289A.60, 
524.6   subdivision 1, is amended to read: 
524.7      Subdivision 1.  [PENALTY FOR FAILURE TO PAY TAX.] (a) If a 
524.8   tax other than a withholding or sales or use tax is not paid 
524.9   within the time specified for payment, a penalty must be added 
524.10  to the amount required to be shown as tax.  The penalty is three 
524.11  percent of the tax not paid on or before the date specified for 
524.12  payment of the tax if the failure is for not more than 30 days, 
524.13  with an additional penalty of three percent of the amount of tax 
524.14  remaining unpaid during each additional 30 days or fraction of 
524.15  30 days during which the failure continues, not exceeding 24 
524.16  percent in the aggregate.  If a corporate franchise, fiduciary 
524.17  income, mining company, estate, partnership, S corporation, or 
524.18  nonresident entertainer tax is not paid within the time 
524.19  specified for payment, a penalty of six percent is added to the 
524.20  unpaid tax, except that if a corporation or mining company meets 
524.21  the requirements of section 289A.19, subdivision 2, the penalty 
524.22  is not imposed.  
524.23     (b) For the taxes listed in paragraph (a), in addition to 
524.24  the penalty in that paragraph, whether imposed or not, if a 
524.25  return or amended return is filed after the due date, without 
524.26  regard to extensions, and any tax reported as remaining due is 
524.27  not remitted with the return or amended return, a penalty of 
524.28  five percent of the tax not paid is added to the tax.  If the 
524.29  commissioner issues an order assessing additional tax for a tax 
524.30  listed in paragraph (a), and the tax is not paid within 60 days 
524.31  after the mailing of the order or, if appealed, within 60 days 
524.32  after final resolution of the appeal, a penalty of five percent 
524.33  of the tax is added to the tax. 
524.34     (c) If an individual files a state individual income tax 
524.35  return and pays all of the state individual income tax with the 
524.36  filing of a return within six months of the date the return is 
525.1   due and the amount paid by the due date of the return is at 
525.2   least 90 percent of the amount of tax due, as shown on the 
525.3   return, the individual is presumed to have reasonable cause for 
525.4   the late payment.  If an individual income tax is not paid 
525.5   within the time specified for payment, a penalty of four percent 
525.6   is added to the unpaid tax.  There is a presumption of 
525.7   reasonable cause for the late payment if the individual:  (i) 
525.8   pays by the due date of the return at least 90 percent of the 
525.9   amount of tax, after credits other than withholding and 
525.10  estimated payments, shown owing on the return; (ii) files the 
525.11  return within six months after the due date; and (iii) pays the 
525.12  remaining balance of the reported tax when the return is filed. 
525.13     (d) If the commissioner issues an order assessing 
525.14  additional individual income tax, and the tax is not paid within 
525.15  60 days after the mailing of the order or, if appealed, within 
525.16  60 days after final resolution of the appeal, a penalty of four 
525.17  percent of the unpaid tax is added to the tax.  
525.18     (b) (e) If a withholding or sales or use tax is not paid 
525.19  within the time specified for payment, a penalty must be added 
525.20  to the amount required to be shown as tax.  The penalty is five 
525.21  percent of the tax not paid on or before the date specified for 
525.22  payment of the tax if the failure is for not more than 30 days, 
525.23  with an additional penalty of five percent of the amount of tax 
525.24  remaining unpaid during each additional 30 days or fraction of 
525.25  30 days during which the failure continues, not exceeding 15 
525.26  percent in the aggregate. 
525.27     [EFFECTIVE DATE.] This section is effective for tax years 
525.28  beginning after December 31, 2000, and for estate tax returns 
525.29  due after January 1, 2002. 
525.30     Sec. 3.  Minnesota Statutes 2000, section 289A.60, 
525.31  subdivision 2, is amended to read: 
525.32     Subd. 2.  [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If 
525.33  a taxpayer fails to make and file a return other than an income 
525.34  tax return of an individual, a withholding return, or sales or 
525.35  use tax return, within the time prescribed or an extension, a 
525.36  penalty is added to the tax.  The penalty is three percent of 
526.1   the amount of tax not paid on or before the date prescribed for 
526.2   payment of the tax including any extensions if the failure is 
526.3   for not more than 30 days, with an additional five percent of 
526.4   the amount of tax remaining unpaid during each additional 30 
526.5   days or fraction of 30 days, during which the failure continues, 
526.6   not exceeding 23 percent in the aggregate. 
526.7      If a taxpayer fails to file an individual income tax return 
526.8   within six months after the date prescribed for filing of the 
526.9   return, a penalty of ten percent of the amount of tax not paid 
526.10  by the end of that six-month period is added to the tax.  
526.11     If a taxpayer fails to file a withholding or sales or use 
526.12  tax return within the time prescribed, including an extension, a 
526.13  penalty of five percent of the amount of tax not timely paid by 
526.14  the end of that period is added to the tax.  
526.15     [EFFECTIVE DATE.] This section is effective for tax years 
526.16  beginning after December 31, 2000, and for estate tax returns 
526.17  due after January 1, 2002. 
526.18     Sec. 4.  Minnesota Statutes 2000, section 289A.60, is 
526.19  amended by adding a subdivision to read: 
526.20     Subd. 2a.  [PENALTIES FOR EXTENDED DELINQUENCY.] (a) If an 
526.21  individual income tax is not paid within 180 days after the date 
526.22  of filing of a return or, in the case of taxes assessed by the 
526.23  commissioner, within 180 days after the assessment date or, if 
526.24  appealed, within 180 days after final resolution of the appeal, 
526.25  an extended delinquency penalty of five percent of the tax 
526.26  remaining unpaid is added to the amount due.  
526.27     (b) If a corporate franchise, fiduciary income, mining 
526.28  company, estate, partnership, S corporation, or nonresident 
526.29  entertainer tax return is not filed within 30 days after written 
526.30  demand for the filing of a delinquent return, an extended 
526.31  delinquency penalty of five percent of the tax not paid prior to 
526.32  the demand is added to the tax, or in the case of an individual 
526.33  income tax return, a minimum penalty of $100 or the five percent 
526.34  penalty is imposed, whichever amount is greater. 
526.35     [EFFECTIVE DATE.] This section is effective for tax years 
526.36  beginning after December 31, 2000, and for estate tax returns 
527.1   due after January 1, 2002. 
527.2      Sec. 5.  Minnesota Statutes 2000, section 289A.60, 
527.3   subdivision 7, is amended to read: 
527.4      Subd. 7.  [PENALTY FOR FRIVOLOUS RETURN.] If an individual 
527.5   a taxpayer files what purports to be a tax return required by 
527.6   chapter 290 or a claim for refund but which does not contain 
527.7   information on which the substantial correctness of 
527.8   the assessment purported return or claim for refund may be 
527.9   judged or contains information that on its face shows that the 
527.10  assessment purported return or claim for refund is substantially 
527.11  incorrect and the conduct is due to a position that is frivolous 
527.12  or a desire that appears on the purported return or claim for 
527.13  refund to delay or impede the administration of Minnesota tax 
527.14  laws, then the individual shall pay a penalty of $500.  In a 
527.15  proceeding involving the issue of whether or not a person is 
527.16  liable for this penalty, the burden of proof is on the 
527.17  commissioner.  
527.18     [EFFECTIVE DATE.] This section is effective for returns or 
527.19  claims for refunds filed on or after the day following final 
527.20  enactment. 
527.21     Sec. 6.  Minnesota Statutes 2000, section 297F.20, 
527.22  subdivision 3, is amended to read: 
527.23     Subd. 3.  [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A 
527.24  person who files with the commissioner a return, report, or 
527.25  other document, or who maintains or provides invoices subject to 
527.26  review by the commissioner under this chapter, known by the 
527.27  person to be fraudulent or false concerning a material matter, 
527.28  is guilty of a felony. 
527.29     (b) A person who knowingly aids or assists in, or advises 
527.30  in the preparation or presentation of a return, report, invoice, 
527.31  or other document that is fraudulent or false concerning a 
527.32  material matter, whether or not the falsity or fraud is 
527.33  committed with the knowledge or consent of the person authorized 
527.34  or required to present the return, report, invoice, or other 
527.35  document, is guilty of a felony. 
527.36     [EFFECTIVE DATE.] This section is effective for crimes 
528.1   occurring on or after July 1, 2001. 
528.2      Sec. 7.  [APPROPRIATION.] 
528.3      $545,000 in fiscal year 2002 and $25,000 in fiscal year 
528.4   2003 is appropriated from the general fund to the commissioner 
528.5   of revenue to implement sections 2 to 4.  $520,000 of the 
528.6   appropriation in fiscal year 2002 is for a one-time expenditure 
528.7   related to system programming costs.  This appropriation is 
528.8   available for expenditure until June 30, 2003. 
528.9      [EFFECTIVE DATE.] This section is effective July 1, 2001. 
528.10     Sec. 8.  [REPEALER.] 
528.11     Minnesota Statutes 2000, section 289A.60, subdivision 3, is 
528.12  repealed. 
528.13     [EFFECTIVE DATE.] This section is effective for tax years 
528.14  beginning after December 31, 2000, and for estate tax returns 
528.15  due after January 1, 2002. 
528.16                             ARTICLE 25 
528.17                       SEIZURES OF CONTRABAND 
528.18     Section 1.  Minnesota Statutes 2000, section 296A.24, 
528.19  subdivision 1, is amended to read: 
528.20     Subdivision 1.  [SEIZURE.] The commissioner or authorized 
528.21  agents may seize gasoline or special fuel being transported for 
528.22  delivery in violation of section 296A.03, subdivision 1, and any 
528.23  vehicle or other method of conveyance used for transporting the 
528.24  gasoline or special fuel.  Any untaxed motor vehicle fuel that 
528.25  is received by a person other than a licensee is subject to 
528.26  seizure along with the vehicle or other means of transportation 
528.27  used to transport the motor vehicle fuel.  Any motor vehicle 
528.28  fuel, along with the transporting vehicle, brought into the 
528.29  state of Minnesota by a transporter for use, distribution, 
528.30  storage, or sale that is not supported by a manifest, bill of 
528.31  lading, or invoice, reflecting the licensed distributor 
528.32  responsible for the tax and/or fees is subject to seizure by the 
528.33  Minnesota department of revenue.  Property seized under this 
528.34  subdivision is subject to forfeiture as provided in subdivisions 
528.35  subdivision 2 and 3. 
528.36     [EFFECTIVE DATE.] This section is effective for seizures 
529.1   made on or after July 1, 2001. 
529.2      Sec. 2.  Minnesota Statutes 2000, section 296A.24, 
529.3   subdivision 2, is amended to read: 
529.4      Subd. 2.  [DISPOSITION OF SEIZED PROPERTY.] (a) Within ten 
529.5   days after the seizure of gasoline or special fuel, the person 
529.6   making the seizure shall deliver serve by certified mail an 
529.7   inventory of the vehicle or property seized to on the person 
529.8   from whom the seizure was made, if known, and on any person 
529.9   known or believed to have any right, title, interest, or lien on 
529.10  the vehicle or property, at the last known address, and file a 
529.11  copy with the office of the commissioner.  The notice must 
529.12  include an explanation of the right to demand a judicial 
529.13  forfeiture determination. 
529.14     (b) Within ten 60 days after the date of service of the 
529.15  inventory, which is the date of mailing, the person from whom 
529.16  the vehicle or property was seized or any person claiming an 
529.17  interest in the property it may file with the commissioner a 
529.18  demand for a judicial determination of whether the vehicle or 
529.19  property was lawfully subject to seizure and forfeiture.  The 
529.20  commissioner, within 60 days of demand for a judicial 
529.21  determination, shall begin an action in the district court of 
529.22  the county where the seizure was made to determine the issue of 
529.23  forfeiture. 
529.24     (b) The action must be brought in the name of the state and 
529.25  prosecuted by the county attorney or by the attorney 
529.26  general.  The demand must be in the form of a civil complaint 
529.27  and must be filed with the court administrator in the county in 
529.28  which the seizure occurred, together with proof of service of a 
529.29  copy of the complaint on the commissioner of revenue, and the 
529.30  standard filing fee for civil actions unless the petitioner has 
529.31  the right to sue in forma pauperis under section 563.01.  If the 
529.32  value of the seized property or vehicle is $7,500 or less, the 
529.33  claimant may file an action in conciliation court for its 
529.34  recovery.  If the value of the seized property or vehicle is 
529.35  less than $500, the claimant does not have to pay the 
529.36  conciliation court filing fee. 
530.1      (c) The complaint must be captioned in the name of the 
530.2   claimant as plaintiff and the seized property or vehicle as 
530.3   defendant, and must state with specificity the grounds on which 
530.4   the claimant alleges the property or vehicle was improperly 
530.5   seized and the plaintiff's interest in the property or vehicle 
530.6   seized.  No responsive pleading is required of the commissioner 
530.7   and no court fees may be charged for the commissioner's 
530.8   appearance in the matter.  The proceedings are governed by the 
530.9   Rules of Civil Procedure.  Notwithstanding any law to the 
530.10  contrary, an action for the return of property or a vehicle 
530.11  seized under this section may not be maintained by or on behalf 
530.12  of any person who has been served with an inventory unless the 
530.13  person has complied with this subdivision.  The court shall hear 
530.14  the action without a jury and shall try and determine the issues 
530.15  of fact and law involved. 
530.16     (c) (d) When a judgment of forfeiture is entered, the 
530.17  commissioner may, unless the judgment is stayed pending an 
530.18  appeal, either: 
530.19     (1) cause the forfeited property gasoline or special fuel 
530.20  to be destroyed; or 
530.21     (2) cause it the forfeited property in clause (1) or 
530.22  vehicle to be sold at public auction as provided by 
530.23  law.  Proceeds of a sale, after deducting the expense of keeping 
530.24  the gasoline or special fuel and costs of the sale, must be paid 
530.25  into the state treasury.  The commissioner shall reimburse 
530.26  designees for costs incurred.  After deducting the expense of 
530.27  keeping the property and vehicle and the costs of the sale, the 
530.28  commissioner shall pay from the funds collected all liens 
530.29  according to their priority, which are established as being bona 
530.30  fide and as existing without the lienor having any notice or 
530.31  knowledge that the property or vehicle was being used or was 
530.32  intended to be used for or in connection with any violation, and 
530.33  shall pay the balance of the proceeds into the general fund.  
530.34     (d) If a demand for judicial determination is made and no 
530.35  action is commenced as provided in this subdivision, the 
530.36  property must be released by the commissioner and redelivered to 
531.1   the person entitled to it.  (e) If no demand for judicial 
531.2   determination is made, the property or vehicle seized must be 
531.3   considered forfeited to the state by operation of law and may be 
531.4   disposed of by the commissioner as provided where there has been 
531.5   a judgment of forfeiture.  When the commissioner is satisfied 
531.6   that a person from whom property is seized under this chapter 
531.7   was acting in good faith and without intent to evade the tax, 
531.8   the commissioner shall release the property seized, without 
531.9   further legal proceedings. 
531.10     [EFFECTIVE DATE.] This section is effective for seizures 
531.11  made on or after July 1, 2001. 
531.12     Sec. 3.  Minnesota Statutes 2000, section 297A.91, is 
531.13  amended to read: 
531.14     297A.91 [SEIZURE; COURT REVIEW.] 
531.15     Subdivision 1.  [SEIZURE OF PROPERTY USED IN ILLEGAL 
531.16  TRANSPORT.] (a) If the retailer does not have a sales or use tax 
531.17  permit and has been engaging in transporting personal property 
531.18  into the state without payment of the tax, the commissioner of 
531.19  revenue or the commissioner's agents may seize in the name of 
531.20  the state any truck, automobile, or means of transportation not 
531.21  owned or operated by a common carrier, used in the illegal 
531.22  importation and transportation of any tangible personal property 
531.23  by a retailer or the retailer's agent or employee.  The 
531.24  commissioner may demand the forfeiture and sale of the truck, 
531.25  automobile, or other means of transportation together with the 
531.26  property being transported illegally, unless the owner 
531.27  establishes to the satisfaction of the commissioner or the court 
531.28  that the owner had no notice or knowledge or reason to believe 
531.29  that the vehicle was used or intended to be used in any such 
531.30  violation. 
531.31     (b) Within two ten days after the seizure, the person 
531.32  making the seizure shall deliver serve by certified mail an 
531.33  inventory of the vehicle and property seized to on the person 
531.34  from whom the seizure was made, if known, and to on any person 
531.35  known or believed to have any right, title, interest, or lien on 
531.36  the vehicle or property, at the last known address.  The person 
532.1   making the seizure shall also file a copy of the inventory with 
532.2   the commissioner.  The notice must include an explanation of the 
532.3   right to demand a judicial forfeiture determination.  
532.4      Subd. 2.  [COURT REVIEW OF FORFEITURE.] (a) Within ten 60 
532.5   days after the date of service of the inventory, which is the 
532.6   date of mailing, the person from whom the vehicle and property 
532.7   were seized or any person claiming an interest in the vehicle or 
532.8   property may file with the commissioner a demand for a judicial 
532.9   determination of the question of whether the vehicle or property 
532.10  was lawfully subject to seizure and forfeiture.  The 
532.11  commissioner, within 30 days, shall institute an action in the 
532.12  district court of the county where the seizure was made to 
532.13  determine the issue of forfeiture. 
532.14     (b) The action must be brought in the name of the state and 
532.15  prosecuted by the county attorney or the attorney general.  The 
532.16  demand must be in the form of a civil complaint and must be 
532.17  filed with the court administrator in the county in which the 
532.18  seizure occurred, together with proof of service or a copy of 
532.19  the complaint on the commissioner of revenue, and the standard 
532.20  filing fee for civil actions unless the petitioner has the right 
532.21  to sue in forma pauperis under section 563.01.  If the value of 
532.22  the seized property or vehicle is $7,500 or less, the claimant 
532.23  may file an action in conciliation court for its recovery.  If 
532.24  the value of the seized property or vehicle is less than $500, 
532.25  the claimant does not have to pay the conciliation court filing 
532.26  fee.  
532.27     (c) The complaint must be captioned in the name of the 
532.28  claimant as plaintiff and the seized property or vehicle as 
532.29  defendant, and must state with specificity the grounds on which 
532.30  the claimant alleges the property or vehicle was improperly 
532.31  seized and the plaintiff's interest in the property or vehicle 
532.32  seized.  No responsive pleading is required of the commissioner, 
532.33  and no court fees may be charged for the commissioner's 
532.34  appearance in the matter.  The proceedings are governed by the 
532.35  Rules of Civil Procedure.  Notwithstanding any law to the 
532.36  contrary, an action for the return of property or a vehicle 
533.1   seized under this subdivision may not be maintained by or on 
533.2   behalf of any person who has been served with an inventory 
533.3   unless the person has complied with this subdivision.  The court 
533.4   shall hear the action without a jury and shall determine the 
533.5   issues of fact and law involved.  If a judgment of forfeiture is 
533.6   entered and is not stayed pending an appeal, the commissioner 
533.7   may have the forfeited vehicle and property sold at public 
533.8   auction as provided by law.  
533.9      Subd. 3.  [TREATMENT OF SEIZED PROPERTY.] If a demand for 
533.10  judicial determination is made and no action is commenced as 
533.11  provided in this subdivision, the vehicle and property must be 
533.12  released by the commissioner and redelivered to the person 
533.13  entitled to it.  If no demand for judicial determination is 
533.14  made, the vehicle and property seized are considered forfeited 
533.15  to the state by operation of law and may be disposed of by the 
533.16  commissioner as if there were a judgment of forfeiture.  The 
533.17  forfeiture and sale of the automobile, truck, or other means of 
533.18  transportation, and of the property being transported illegally 
533.19  in it, are a penalty for the violation of this chapter.  After 
533.20  deducting the expense of keeping the vehicle and property, the 
533.21  fee for seizure, and the costs of the sale, the commissioner 
533.22  shall pay liens from the funds collected.  The commissioner 
533.23  shall pay all liens, according to their priority, that are 
533.24  established at the hearing as being bona fide and as existing 
533.25  without the lienor having any notice or knowledge that the 
533.26  vehicle or property was being used or was intended to be used 
533.27  for or in connection with any such violation as specified in the 
533.28  order of the court.  The commissioner shall pay the balance of 
533.29  the proceeds into the state treasury to be credited to the 
533.30  general fund.  The state is not liable for any liens in excess 
533.31  of the proceeds from the sale after allowable deductions.  A 
533.32  sale under this section frees the vehicle and property sold from 
533.33  all liens.  The order of the district court may be appealed as 
533.34  in other civil cases.  
533.35     [EFFECTIVE DATE.] This section is effective for seizures 
533.36  made on or after July 1, 2001. 
534.1      Sec. 4.  Minnesota Statutes 2000, section 297E.16, 
534.2   subdivision 1, is amended to read: 
534.3      Subdivision 1.  [SEIZURE.] Contraband may be seized by the 
534.4   commissioner or by any sheriff or other police officer, 
534.5   hereinafter referred to as the "seizing authority," with or 
534.6   without process, and is subject to forfeiture as provided in 
534.7   subdivisions subdivision 2 and 3.  
534.8      [EFFECTIVE DATE.] This section is effective for seizures 
534.9   made on or after July 1, 2001. 
534.10     Sec. 5.  Minnesota Statutes 2000, section 297E.16, 
534.11  subdivision 2, is amended to read: 
534.12     Subd. 2.  [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 
534.13  DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the 
534.14  seizure of alleged contraband described in section 349.2125, 
534.15  subdivision 1, the person making the seizure shall make 
534.16  available serve by certified mail an inventory of the property 
534.17  seized to on the person from whom the property was seized, if 
534.18  known, and on any person known or believed to have any right, 
534.19  title, interest, or lien in the property, at the last known 
534.20  address, and file a copy with the commissioner or the director 
534.21  of alcohol and gambling enforcement.  The notice must include an 
534.22  explanation of the right to demand a judicial forfeiture 
534.23  determination. 
534.24     (b) Within ten 60 days after the date of service of the 
534.25  inventory, which is the date of mailing, the person from whom 
534.26  the property was seized or any person claiming an interest in 
534.27  the property may file with the seizing authority a demand for 
534.28  judicial determination of whether the property was lawfully 
534.29  subject to seizure and forfeiture.  Within 60 days after the 
534.30  date of filing of the demand, the seizing authority must bring 
534.31  an action in the district court of the county where seizure was 
534.32  made to determine the issue of forfeiture.  The action must be 
534.33  brought in the name of the state and be prosecuted by the county 
534.34  attorney or by the attorney general.  The demand must be in the 
534.35  form of a civil complaint and must be filed with the court 
534.36  administrator in the county in which the seizure occurred, 
535.1   together with proof of service of a copy of the complaint on the 
535.2   commissioner of revenue or the director of alcohol and gambling 
535.3   enforcement, and the standard filing fee for civil actions 
535.4   unless the petitioner has the right to sue in forma pauperis 
535.5   under section 563.01.  If the value of the seized property is 
535.6   $7,500 or less, the claimant may file an action in conciliation 
535.7   court for recovery of the property.  If the value of the seized 
535.8   property is less than $500, the claimant does not have to pay 
535.9   the conciliation court filing fee.  
535.10     (c) The complaint must be captioned in the name of the 
535.11  claimant as plaintiff and the seized property as defendant, and 
535.12  must state with specificity the grounds on which the claimant 
535.13  alleges the property was improperly seized and the plaintiff's 
535.14  interest in the property seized.  No responsive pleading is 
535.15  required of the commissioner or director, and no court fees may 
535.16  be charged for the commissioner's or director's appearance in 
535.17  the matter.  The proceedings are governed by the Rules of Civil 
535.18  Procedure.  Notwithstanding any law to the contrary, an action 
535.19  for the return of property seized under this section may not be 
535.20  maintained by or on behalf of any person who has been served 
535.21  with an inventory unless the person has complied with this 
535.22  subdivision.  The court shall hear the action without a jury and 
535.23  determine the issues of fact and law involved.  
535.24     (d) If a judgment of forfeiture is entered, the seizing 
535.25  authority may, unless the judgment is stayed pending an appeal, 
535.26  either (1) cause the forfeited property, other than a vehicle, 
535.27  to be destroyed; or (2) cause it to be sold at a public auction 
535.28  as provided by law.  The person making a sale, after deducting 
535.29  the expense of keeping the property, the fee for seizure, and 
535.30  the costs of the sale, shall pay all liens according to their 
535.31  priority, which are established as being bona fide and as 
535.32  existing without the lienor having any notice or knowledge that 
535.33  the property was being used or was intended to be used for or in 
535.34  connection with the violation.  The balance of the proceeds must 
535.35  be paid 70 percent to the seizing authority for deposit as a 
535.36  supplement to its operating fund or similar fund for official 
536.1   use, and 20 percent to the county attorney or other prosecuting 
536.2   agency that handled the court proceeding, if there is one, for 
536.3   deposit as a supplement to its operating fund or similar fund 
536.4   for prosecutorial purposes.  The remaining ten percent of the 
536.5   proceeds must be forwarded within 60 days after resolution of 
536.6   the forfeiture to the department of human services to fund 
536.7   programs for the treatment of compulsive gamblers.  If there is 
536.8   no prosecuting authority involved in the forfeiture, the 20 
536.9   percent of the proceeds otherwise designated for the prosecuting 
536.10  authority must be deposited into the general fund.  
536.11     If demand for judicial determination is made and no action 
536.12  is commenced by the seizing authority as provided in this 
536.13  subdivision, the property must be released by the seizing 
536.14  authority and delivered to the person entitled to it.  (e) If no 
536.15  demand for judicial determination is made, the property seized 
536.16  is considered forfeited to the seizing authority by operation of 
536.17  law and may be disposed of by the seizing authority as provided 
536.18  where there has been a judgment of forfeiture.  When the seizing 
536.19  authority is satisfied that a person from whom property is 
536.20  seized was acting in good faith and without intent to evade the 
536.21  tax imposed by section 297E.02, the seizing authority shall 
536.22  release the property seized without further legal proceedings. 
536.23     [EFFECTIVE DATE.] This section is effective for seizures 
536.24  made on or after July 1, 2001. 
536.25     Sec. 6.  Minnesota Statutes 2000, section 297F.21, 
536.26  subdivision 1, is amended to read: 
536.27     Subdivision 1.  [CONTRABAND DEFINED.] The following are 
536.28  declared to be contraband and therefore subject to civil and 
536.29  criminal penalties under this chapter: 
536.30     (a) Cigarette packages which do not have stamps affixed to 
536.31  them as provided in this chapter, including but not limited to 
536.32  (i) packages with illegible stamps and packages with stamps that 
536.33  are not complete or whole even if the stamps are legible, and 
536.34  (ii) all devices for the vending of cigarettes in which packages 
536.35  as defined in item (i) are found, including all contents 
536.36  contained within the devices. 
537.1      (b) A device for the vending of cigarettes and all packages 
537.2   of cigarettes, where the device does not afford at least partial 
537.3   visibility of contents.  Where any package exposed to view does 
537.4   not carry the stamp required by this chapter, it shall be 
537.5   presumed that all packages contained in the device are unstamped 
537.6   and contraband. 
537.7      (c) A device for the vending of cigarettes to which the 
537.8   commissioner or authorized agents have been denied access for 
537.9   the inspection of contents.  In lieu of seizure, the 
537.10  commissioner or an agent may seal the device to prevent its use 
537.11  until inspection of contents is permitted. 
537.12     (d) A device for the vending of cigarettes which does not 
537.13  carry the name and address of the owner, plainly marked and 
537.14  visible from the front of the machine. 
537.15     (e) A device including, but not limited to, motor vehicles, 
537.16  trailers, snowmobiles, airplanes, and boats used with the 
537.17  knowledge of the owner or of a person operating with the consent 
537.18  of the owner for the storage or transportation of more than 
537.19  5,000 cigarettes which are contraband under this subdivision.  
537.20  When cigarettes are being transported in the course of 
537.21  interstate commerce, or are in movement from either a public 
537.22  warehouse to a distributor upon orders from a manufacturer or 
537.23  distributor, or from one distributor to another, the cigarettes 
537.24  are not contraband, notwithstanding the provisions of clause (a).
537.25     (f) A device including, but not limited to, motor vehicles, 
537.26  trailers, snowmobiles, airplanes, and boats used with the 
537.27  knowledge of the owner, or of a person operating with the 
537.28  consent of the owner, for the storage or transportation of 
537.29  untaxed tobacco products intended for sale in Minnesota other 
537.30  than those in the possession of a licensed distributor on or 
537.31  before the due date for payment of the tax under section 
537.32  297F.09, subdivision 2. 
537.33     (g) Cigarette packages or tobacco products obtained from an 
537.34  unlicensed seller. 
537.35     (g) (h) Cigarette packages offered for sale or held as 
537.36  inventory in violation of section 297F.20, subdivision 7. 
538.1      (h) (i) Tobacco products on which the tax has not been paid 
538.2   by a licensed distributor. 
538.3      (i) (j) Any cigarette packages or tobacco products offered 
538.4   for sale or held as inventory for which there is not an invoice 
538.5   from a licensed seller as required under section 297F.13, 
538.6   subdivision 4.  
538.7      (j) (k) Cigarette packages which have been imported into 
538.8   the United States in violation of United States Code, title 26, 
538.9   section 5754.  All cigarettes held in violation of that section 
538.10  shall be presumed to have entered the United States after 
538.11  December 31, 1999, in the absence of proof to the contrary. 
538.12     [EFFECTIVE DATE.] This section is effective for seizures 
538.13  made on or after July 1, 2001. 
538.14     Sec. 7.  Minnesota Statutes 2000, section 297F.21, 
538.15  subdivision 2, is amended to read: 
538.16     Subd. 2.  [SEIZURE.] Cigarettes, tobacco products, or other 
538.17  property made contraband by subdivision 1 may be seized by the 
538.18  commissioner or authorized agents or by any sheriff or other 
538.19  police officer, with or without process, and are subject to 
538.20  forfeiture as provided in subdivisions subdivision 3 and 4. 
538.21     [EFFECTIVE DATE.] This section is effective for seizures 
538.22  made on or after July 1, 2001. 
538.23     Sec. 8.  Minnesota Statutes 2000, section 297F.21, 
538.24  subdivision 3, is amended to read: 
538.25     Subd. 3.  [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 
538.26  DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the 
538.27  seizure of any alleged contraband, the person making the seizure 
538.28  shall make available serve by certified mail an inventory of the 
538.29  property seized to on the person from whom the seizure was made, 
538.30  if known, and on any person known or believed to have any right, 
538.31  title, interest, or lien in the property, at the last known 
538.32  address, and file a copy with the commissioner.  The notice must 
538.33  include an explanation of the right to demand a judicial 
538.34  forfeiture determination. 
538.35     (b) Within ten 60 days after the date of service of the 
538.36  inventory, which is the date of mailing, the person from whom 
539.1   the property was seized or any person claiming an interest in 
539.2   the property may file with the commissioner a demand for a 
539.3   judicial determination of the question as to whether the 
539.4   property was lawfully subject to seizure and forfeiture.  The 
539.5   commissioner, within 60 days, shall institute an action in the 
539.6   district court of the county where the seizure was made to 
539.7   determine the issue of forfeiture.  The demand must be in the 
539.8   form of a civil complaint and must be filed with the court 
539.9   administrator in the county in which the seizure occurred, 
539.10  together with proof of service of a copy of the complaint on the 
539.11  commissioner of revenue, and the standard filing fee for civil 
539.12  actions unless the petitioner has the right to sue in forma 
539.13  pauperis under section 563.01.  If the value of the seized 
539.14  property is $7,500 or less, the claimant may file an action in 
539.15  conciliation court for recovery of the property.  If the value 
539.16  of the seized property is less than $500, the claimant does not 
539.17  have to pay the conciliation court filing fee. 
539.18     (c) The complaint must be captioned in the name of the 
539.19  claimant as plaintiff and the seized property as defendant, and 
539.20  must state with specificity the grounds on which the claimant 
539.21  alleges the property was improperly seized and the plaintiff's 
539.22  interest in the property seized.  No responsive pleading is 
539.23  required of the commissioner, and no court fees may be charged 
539.24  for the commissioner's appearance in the matter.  The 
539.25  proceedings are governed by the Rules of Civil Procedure.  
539.26  Notwithstanding any law to the contrary, an action for the 
539.27  return of property seized under this section may not be 
539.28  maintained by or on behalf of any person who has been served 
539.29  with an inventory unless the person has complied with this 
539.30  subdivision.  The court shall decide whether the alleged 
539.31  contraband is contraband, as defined in subdivision 1. 
539.32     (b) The action must be brought in the name of the state and 
539.33  must be prosecuted by the county attorney or by the attorney 
539.34  general.  The court shall hear the action without a jury and 
539.35  shall try and determine the issues of fact and law involved. 
539.36     (c) (d) When a judgment of forfeiture is entered, the 
540.1   commissioner may, unless the judgment is stayed pending an 
540.2   appeal, either: 
540.3      (1) deliver the forfeited property cigarette packages or 
540.4   tobacco products to the commissioner of human services for use 
540.5   by patients in state institutions; 
540.6      (2) cause it the property in clause (1) to be destroyed; or 
540.7      (3) cause it the forfeited property to be sold at public 
540.8   auction as provided by law.  
540.9   The person making a sale, after deducting the expense of keeping 
540.10  the property, the fee for seizure, and the costs of the sale, 
540.11  shall pay all liens according to their priority, which are 
540.12  established as being bona fide and as existing without the 
540.13  lienor having any notice or knowledge that the property was 
540.14  being used or was intended to be used for or in connection with 
540.15  the violation.  The balance of the proceeds must be paid 75 
540.16  percent to the department of revenue for deposit as a supplement 
540.17  to its operating fund or similar fund for official use, and 25 
540.18  percent to the county attorney or other prosecuting agency that 
540.19  handled the court proceeding, if there is one, for deposit as a 
540.20  supplement to its operating fund or similar fund for 
540.21  prosecutorial purposes.  If there is no prosecuting authority 
540.22  involved in the forfeiture, the 25 percent of the proceeds 
540.23  otherwise designated for the prosecuting authority must be 
540.24  deposited into the general fund.  
540.25     (d) If a demand for judicial determination is made and no 
540.26  action commenced as provided in this subdivision, the property 
540.27  must be released by the commissioner and returned to the person 
540.28  entitled to it.  (e) If no demand for judicial determination is 
540.29  made, the property seized is considered forfeited to the state 
540.30  by operation of law and may be disposed of by the commissioner 
540.31  as provided in the case of a judgment of forfeiture. 
540.32     [EFFECTIVE DATE.] This section is effective for seizures 
540.33  made on or after July 1, 2001. 
540.34     Sec. 9.  Minnesota Statutes 2000, section 297G.20, 
540.35  subdivision 3, is amended to read: 
540.36     Subd. 3.  [SEIZURE.] Distilled spirits, wine, fermented 
541.1   malt beverages, or other property made contraband by subdivision 
541.2   1 may be seized by the commissioner of revenue or public safety 
541.3   and their authorized agents or by any sheriff or other police 
541.4   officer, with or without process, and are subject to forfeiture 
541.5   as provided in subdivisions subdivision 4 and 5. 
541.6      [EFFECTIVE DATE.] This section is effective for seizures 
541.7   made on or after July 1, 2001. 
541.8      Sec. 10.  Minnesota Statutes 2000, section 297G.20, 
541.9   subdivision 4, is amended to read: 
541.10     Subd. 4.  [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 
541.11  DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the 
541.12  seizure of alleged contraband, the person making the seizure 
541.13  shall make available serve by certified mail an inventory of the 
541.14  property seized to on the person from whom the property was 
541.15  seized, if known, and on any person known or believed to have 
541.16  any right, title, interest, or lien in the property, at the last 
541.17  known address, and file a copy with both the commissioners of 
541.18  revenue and public safety.  The notice must include an 
541.19  explanation of the right to demand a judicial forfeiture 
541.20  determination. 
541.21     (b) Within ten 60 days after the date of service of the 
541.22  inventory, which is the date of mailing, the person from whom 
541.23  the property was seized or any person claiming an interest in 
541.24  the property may file with the seizing authority a demand for 
541.25  judicial determination of whether the property was lawfully 
541.26  subject to seizure and forfeiture.  Within 60 days after the 
541.27  date of the filing of the demand, the seizing authority must 
541.28  bring an action in the district court of the county where 
541.29  seizure was made to determine the issue of forfeiture.  The 
541.30  demand must be in the form of a civil complaint and must be 
541.31  filed with the court administrator in the county in which the 
541.32  seizure occurred, together with proof of service of a copy of 
541.33  the complaint on the commissioner of revenue or public safety, 
541.34  and the standard filing fee for civil actions unless the 
541.35  petitioner has the right to sue in forma pauperis under section 
541.36  563.01.  If the value of the seized property or vehicle is 
542.1   $7,500 or less, the claimant may file an action in conciliation 
542.2   court for recovery of the property.  If the value of the seized 
542.3   property is less than $500, the claimant does not have to pay 
542.4   the conciliation court filing fee.  
542.5      (c) The complaint must be captioned in the name of the 
542.6   claimant as plaintiff and the seized property as defendant, and 
542.7   must state with specificity the grounds on which the claimant 
542.8   alleges the property was improperly seized and the plaintiff's 
542.9   interest in the property seized.  No responsive pleading is 
542.10  required of the commissioner of revenue or public safety and no 
542.11  court fees may be charged for either commissioner's appearance 
542.12  in the matter.  The proceedings are governed by the Rules of 
542.13  Civil Procedure.  Notwithstanding any law to the contrary, an 
542.14  action for the return of property seized under this section may 
542.15  not be maintained by or on behalf of any person who has been 
542.16  served with an inventory unless the person has complied with 
542.17  this subdivision.  
542.18     (b) The action must be brought in the name of the state and 
542.19  must be prosecuted by the county attorney or by the attorney 
542.20  general.  The court shall hear the action without a jury and 
542.21  determine the issues of fact and law involved. 
542.22     (c) (d) If a judgment of forfeiture is entered, the seizing 
542.23  authority may, unless the judgment is stayed pending an appeal, 
542.24  either: 
542.25     (1) cause the forfeited property, other than a vehicle, to 
542.26  be destroyed; or 
542.27     (2) cause it to be sold at a public auction as provided by 
542.28  law.  
542.29     The person making a sale, after deducting the expense of 
542.30  keeping the property, the fee for seizure, and the costs of the 
542.31  sale, shall pay all liens according to their priority, which are 
542.32  established as being bona fide and as existing without the 
542.33  lienor having any notice or knowledge that the property was 
542.34  being used or was intended to be used for or in connection with 
542.35  the violation.  The balance of the proceeds must be paid 75 
542.36  percent to the seizing authority for deposit as a supplement to 
543.1   its operating fund or similar fund for official use, and 25 
543.2   percent to the county attorney or other prosecuting agency that 
543.3   handled the court proceeding, if there is one, for deposit as a 
543.4   supplement to its operating fund or similar fund for 
543.5   prosecutorial purposes.  If there is no prosecuting authority 
543.6   involved in the forfeiture, the 25 percent of the proceeds 
543.7   otherwise designated for the prosecuting authority must be 
543.8   deposited into the general fund.  
543.9      (d) If demand for judicial determination is made and no 
543.10  action is commenced by the seizing authority as provided in this 
543.11  subdivision, the property must be released by the seizing 
543.12  authority and delivered to the person entitled to it.  (e) If no 
543.13  demand is made, the property seized is considered forfeited to 
543.14  the seizing authority by operation of law and may be disposed of 
543.15  by the seizing authority as provided for a judgment of 
543.16  forfeiture.  When the seizing authority is satisfied that a 
543.17  person from whom property is seized was acting in good faith and 
543.18  without intent to evade the tax imposed by this chapter, the 
543.19  seizing authority shall release the property seized without 
543.20  further legal proceedings. 
543.21     [EFFECTIVE DATE.] This section is effective for seizures 
543.22  made on or after July 1, 2001. 
543.23     Sec. 11.  [REPEALER.] 
543.24     Minnesota Statutes 2000, sections 296A.24, subdivision 3; 
543.25  297E.16, subdivision 3; 297F.21, subdivision 4; and 297G.20, 
543.26  subdivision 5, are repealed. 
543.27     [EFFECTIVE DATE.] This section is effective for seizures 
543.28  made on or after July 1, 2001. 
543.29                             ARTICLE 26
543.30                            REVENUE DATA
543.31     Section 1.  Minnesota Statutes 2000, section 270A.11, is 
543.32  amended to read: 
543.33     270A.11 [DATA PRIVACY.] 
543.34     Private and confidential data on individuals may be 
543.35  exchanged among the department, the taxpayer's rights advocate, 
543.36  the attorney general, the claimant agency, and the debtor as 
544.1   necessary to accomplish and effectuate the intent of sections 
544.2   270A.01 to 270A.12, as provided by section 13.05, subdivision 4, 
544.3   clause (b).  The department may disclose to the claimant agency 
544.4   only the debtor's name, address, social security number and the 
544.5   amount of the refund, and in the case of a joint return, the 
544.6   name of the debtor's spouse.  Any person employed by, or 
544.7   formerly employed by, a claimant agency who discloses any such 
544.8   information for any other purpose, shall be subject to the civil 
544.9   and criminal penalties of section 270B.18.  Data collected by 
544.10  the department from claimant agencies relating to claims filed 
544.11  under this chapter are private data on individuals. 
544.12     [EFFECTIVE DATE.] This section is effective the day 
544.13  following final enactment. 
544.14     Sec. 2.  Minnesota Statutes 2000, section 270B.02, 
544.15  subdivision 2, is amended to read: 
544.16     Subd. 2.  [PROTECTED NONPUBLIC DATA.] The following are 
544.17  protected nonpublic data as defined in section 13.02, 
544.18  subdivision 13: 
544.19     (1) criteria for determining which computer processed 
544.20  returns are selected for audit; 
544.21     (2) criteria for determining which returns are selected for 
544.22  an in-depth audit; and 
544.23     (3) criteria for determining which accounts receivable 
544.24  balances below a stated amount are written off or canceled; and 
544.25     (4) criteria or information used in determining which 
544.26  alleged criminal violations of any law administered by the 
544.27  commissioner are selected for criminal investigation.  
544.28     [EFFECTIVE DATE.] This section is effective the day 
544.29  following final enactment. 
544.30     Sec. 3.  Minnesota Statutes 2000, section 270B.02, 
544.31  subdivision 3, is amended to read: 
544.32     Subd. 3.  [CONFIDENTIAL DATA ON INDIVIDUALS; PROTECTED 
544.33  NONPUBLIC DATA.] (a) Except as provided in paragraph (b), the 
544.34  name or existence of an informer, informer letters, and other 
544.35  unsolicited data, in whatever form, given to the department of 
544.36  revenue by a person, other than the data subject, who informs 
545.1   that a specific taxpayer is not or may not be in compliance with 
545.2   tax laws, or nontax laws administered by the department of 
545.3   revenue, including laws not listed in section 270B.01, 
545.4   subdivision 8, are confidential data on individuals or protected 
545.5   nonpublic data as defined in section 13.02, subdivisions 3 and 
545.6   13. 
545.7      (b) Data under paragraph (a) may be disclosed with the 
545.8   consent of the informer or upon a written finding by a court 
545.9   that the information provided by the informer was false and that 
545.10  there is evidence that the information was provided in bad 
545.11  faith.  This subdivision does not alter disclosure 
545.12  responsibilities or obligations under the rules of criminal 
545.13  procedure. 
545.14     [EFFECTIVE DATE.] This section is effective the day 
545.15  following final enactment. 
545.16     Sec. 4.  Minnesota Statutes 2000, section 270B.03, 
545.17  subdivision 6, is amended to read: 
545.18     Subd. 6.  [INVESTIGATIVE DATA.] For purposes of any law 
545.19  administered by the department of revenue, including laws not 
545.20  listed in section 270B.01, subdivision 8, investigative data 
545.21  collected or created by the department of revenue in order to 
545.22  prepare a case against a person, whether known or unknown, for 
545.23  the commission of a crime is confidential or protected nonpublic 
545.24  during an investigation.  When the investigation becomes 
545.25  inactive, as defined in section 13.82, subdivision 5, the 
545.26  classifications otherwise applicable under any other laws become 
545.27  effective data is private or nonpublic. 
545.28     [EFFECTIVE DATE.] This section is effective the day 
545.29  following final enactment. 
545.30                             ARTICLE 27
545.31                           MISCELLANEOUS 
545.32     Section 1.  Minnesota Statutes 2000, section 16D.08, 
545.33  subdivision 2, is amended to read: 
545.34     Subd. 2.  [POWERS.] (a) In addition to the collection 
545.35  remedies available to private collection agencies in this state, 
545.36  the commissioner, with legal assistance from the attorney 
546.1   general, may utilize any statutory authority granted to a 
546.2   referring agency for purposes of collecting debt owed to that 
546.3   referring agency.  The commissioner may also delegate to the 
546.4   enterprise the tax collection remedies in sections 270.06, 
546.5   clauses (7) and (17), excluding the power to subpoena witnesses; 
546.6   270.66; 270.69, excluding subdivisions 7 and 13; 270.70, 
546.7   excluding subdivision 14; 270.7001 to 270.72; and 290.92, 
546.8   subdivision 23, except that a continuous wage levy under section 
546.9   290.92, subdivision 23, is only effective for 70 days, unless no 
546.10  competing wage garnishments, executions, or levies are served 
546.11  within the 70-day period, in which case a wage levy is 
546.12  continuous until a competing garnishment, execution, or levy is 
546.13  served in the second or a succeeding 70-day period, in which 
546.14  case a continuous wage levy is effective for the remainder of 
546.15  that period.  A debtor who qualifies for cancellation of 
546.16  collection costs under section 16D.11, subdivision 3, clause 
546.17  (1), can apply to the commissioner for reduction or release of a 
546.18  continuous wage levy, if the debtor establishes that the debtor 
546.19  needs all or a portion of the wages being levied upon to pay for 
546.20  essential living expenses, such as food, clothing, shelter, 
546.21  medical care, or expenses necessary for maintaining employment.  
546.22  The commissioner's determination not to reduce or release a 
546.23  continuous wage levy is appealable to district court.  The word 
546.24  "tax" or "taxes" when used in the tax collection statutes listed 
546.25  in this subdivision also means debts referred under this chapter.
546.26     (b) For debts other than state taxes or, child support, or 
546.27  student loans, before any of the tax collection remedies listed 
546.28  in this subdivision can be used, except for the remedies in 
546.29  section 270.06, clauses (7) and (17), if the referring agency 
546.30  has not already obtained a judgment or filed a lien, the 
546.31  commissioner must first obtain a judgment against the debtor.  
546.32  For student loans when the referring agency has not obtained a 
546.33  judgment or filed a lien, before using the tax collection 
546.34  remedies listed in this subdivision, except for the remedies in 
546.35  section 270.06, clauses (7) and (17), the commissioner shall 
546.36  give the debtor 30 days' notice in writing, which may be served 
547.1   in any manner permitted in section 270.68 for service of a 
547.2   summons and complaint.  The notice must advise the debtor of the 
547.3   debtor's right to request that the commissioner commence a court 
547.4   action, and that if no such request is made within 30 days after 
547.5   service of the notice, the commissioner may use these tax 
547.6   collection remedies.  If a timely request is made, the 
547.7   commissioner shall obtain a judgment before using these tax 
547.8   collection remedies. 
547.9      [EFFECTIVE DATE.] This section is effective for student 
547.10  loans referred to the commissioner for collection on or after 
547.11  July 1, 2001. 
547.12     Sec. 2.  Minnesota Statutes 2000, section 144.3831, 
547.13  subdivision 2, is amended to read: 
547.14     Subd. 2.  [COLLECTION AND PAYMENT OF FEE.] The public water 
547.15  supply described in subdivision 1 shall: 
547.16     (1) collect the fees assessed on its service connections; 
547.17     (2) pay the department of revenue health an amount 
547.18  equivalent to the fees based on the total number of service 
547.19  connections.  The service connections for each public water 
547.20  supply described in subdivision 1 shall be verified every four 
547.21  years by the department of health; and 
547.22     (3) pay one-fourth of the total yearly fee to the 
547.23  department of revenue health each calendar quarter.  The first 
547.24  quarterly payment is due on or before September 30, 1992.  In 
547.25  lieu of quarterly payments, a public water supply described in 
547.26  subdivision 1 with fewer than 50 service connections may make a 
547.27  single annual payment by June 30 each year, starting in 1993.  
547.28  The fees payable to the department of revenue health shall be 
547.29  deposited in the state treasury as nondedicated state government 
547.30  special revenue fund revenues. 
547.31     [EFFECTIVE DATE.] This section is effective the day 
547.32  following final enactment. 
547.33     Sec. 3.  Minnesota Statutes 2000, section 270.06, is 
547.34  amended to read: 
547.35     270.06 [POWERS AND DUTIES.] 
547.36     The commissioner of revenue shall: 
548.1      (1) have and exercise general supervision over the 
548.2   administration of the assessment and taxation laws of the state, 
548.3   over assessors, town, county, and city boards of review and 
548.4   equalization, and all other assessing officers in the 
548.5   performance of their duties, to the end that all assessments of 
548.6   property be made relatively just and equal in compliance with 
548.7   the laws of the state; 
548.8      (2) confer with, advise, and give the necessary 
548.9   instructions and directions to local assessors and local boards 
548.10  of review throughout the state as to their duties under the laws 
548.11  of the state; 
548.12     (3) direct proceedings, actions, and prosecutions to be 
548.13  instituted to enforce the laws relating to the liability and 
548.14  punishment of public officers and officers and agents of 
548.15  corporations for failure or negligence to comply with the 
548.16  provisions of the laws of this state governing returns of 
548.17  assessment and taxation of property, and cause complaints to be 
548.18  made against local assessors, members of boards of equalization, 
548.19  members of boards of review, or any other assessing or taxing 
548.20  officer, to the proper authority, for their removal from office 
548.21  for misconduct or negligence of duty; 
548.22     (4) require county attorneys to assist in the commencement 
548.23  of prosecutions in actions or proceedings for removal, 
548.24  forfeiture and punishment for violation of the laws of this 
548.25  state in respect to the assessment and taxation of property in 
548.26  their respective districts or counties; 
548.27     (5) require town, city, county, and other public officers 
548.28  to report information as to the assessment of property, 
548.29  collection of taxes received from licenses and other sources, 
548.30  and such other information as may be needful in the work of the 
548.31  department of revenue, in such form and upon such blanks as the 
548.32  commissioner may prescribe; 
548.33     (6) require individuals, copartnerships, companies, 
548.34  associations, and corporations to furnish information concerning 
548.35  their capital, funded or other debt, current assets and 
548.36  liabilities, earnings, operating expenses, taxes, as well as all 
549.1   other statements now required by law for taxation purposes; 
549.2      (7) subpoena witnesses, at a time and place reasonable 
549.3   under the circumstances, to appear and give testimony, and to 
549.4   produce books, records, papers and documents for inspection and 
549.5   copying relating to any matter which the commissioner may have 
549.6   authority to investigate or determine; 
549.7      (8) issue a subpoena which does not identify the person or 
549.8   persons with respect to whose liability the subpoena is issued, 
549.9   but only if (a) the subpoena relates to the investigation of a 
549.10  particular person or ascertainable group or class of persons, 
549.11  (b) there is a reasonable basis for believing that such person 
549.12  or group or class of persons may fail or may have failed to 
549.13  comply with any law administered by the commissioner, (c) the 
549.14  information sought to be obtained from the examination of the 
549.15  records (and the identity of the person or persons with respect 
549.16  to whose liability the subpoena is issued) is not readily 
549.17  available from other sources, (d) the subpoena is clear and 
549.18  specific as to the information sought to be obtained, and (e) 
549.19  the information sought to be obtained is limited solely to the 
549.20  scope of the investigation.  Provided further that the party 
549.21  served with a subpoena which does not identify the person or 
549.22  persons with respect to whose tax liability the subpoena is 
549.23  issued shall have the right, within 20 days after service of the 
549.24  subpoena, to petition the district court for the judicial 
549.25  district in which lies the county in which that party is located 
549.26  for a determination as to whether the commissioner of revenue 
549.27  has complied with all the requirements in (a) to (e), and thus, 
549.28  whether the subpoena is enforceable.  If no such petition is 
549.29  made by the party served within the time prescribed, the 
549.30  subpoena shall have the force and effect of a court order; 
549.31     (9) cause the deposition of witnesses residing within or 
549.32  without the state, or absent therefrom, to be taken, upon notice 
549.33  to the interested party, if any, in like manner that depositions 
549.34  of witnesses are taken in civil actions in the district court, 
549.35  in any matter which the commissioner may have authority to 
549.36  investigate or determine; 
550.1      (10) investigate the tax laws of other states and countries 
550.2   and to formulate and submit to the legislature such legislation 
550.3   as the commissioner may deem expedient to prevent evasions of 
550.4   assessment and taxing laws, and secure just and equal taxation 
550.5   and improvement in the system of assessment and taxation in this 
550.6   state; 
550.7      (11) consult and confer with the governor upon the subject 
550.8   of taxation, the administration of the laws in regard thereto, 
550.9   and the progress of the work of the department of revenue, and 
550.10  furnish the governor, from time to time, such assistance and 
550.11  information as the governor may require relating to tax matters; 
550.12     (12) transmit to the governor, on or before the third 
550.13  Monday in December of each even-numbered year, and to each 
550.14  member of the legislature, on or before November 15 of each 
550.15  even-numbered year, the report of the department of revenue for 
550.16  the preceding years, showing all the taxable property in the 
550.17  state and the value of the same, in tabulated form; 
550.18     (13) inquire into the methods of assessment and taxation 
550.19  and ascertain whether the assessors faithfully discharge their 
550.20  duties, particularly as to their compliance with the laws 
550.21  requiring the assessment of all property not exempt from 
550.22  taxation; 
550.23     (14) administer and enforce the assessment and collection 
550.24  of state taxes and fees, including the use of any remedy 
550.25  available to nongovernmental creditors, and, from time to time, 
550.26  make, publish, and distribute rules for the administration and 
550.27  enforcement of assessments and fees administered by the 
550.28  commissioner and state tax laws.  The rules have the force of 
550.29  law; 
550.30     (15) prepare blank forms for the returns required by state 
550.31  tax law and distribute them throughout the state, furnishing 
550.32  them subject to charge on application; 
550.33     (16) prescribe rules governing the qualification and 
550.34  practice of agents, attorneys, or other persons representing 
550.35  taxpayers before the commissioner.  The rules may require that 
550.36  those persons, agents, and attorneys show that they are of good 
551.1   character and in good repute, have the necessary qualifications 
551.2   to give taxpayers valuable services, and are otherwise competent 
551.3   to advise and assist taxpayers in the presentation of their case 
551.4   before being recognized as representatives of taxpayers.  After 
551.5   due notice and opportunity for hearing, the commissioner may 
551.6   suspend and disbar bar from further practice before the 
551.7   commissioner any person, agent, or attorney who is shown to be 
551.8   incompetent or disreputable, who refuses to comply with the 
551.9   rules, or who with intent to defraud, willfully or knowingly 
551.10  deceives, misleads, or threatens a taxpayer or prospective 
551.11  taxpayer, by words, circular, letter, or by advertisement.  This 
551.12  clause does not curtail the rights of individuals to appear in 
551.13  their own behalf or partners or corporations' officers to appear 
551.14  in behalf of their respective partnerships or corporations; 
551.15     (17) appoint agents as the commissioner considers necessary 
551.16  to make examinations and determinations.  The agents have the 
551.17  rights and powers conferred on the commissioner to subpoena, 
551.18  examine, and copy books, records, papers, or memoranda, subpoena 
551.19  witnesses, administer oaths and affirmations, and take 
551.20  testimony.  In addition to administrative subpoenas of the 
551.21  commissioner and the agents, upon demand of the commissioner or 
551.22  an agent, the court administrator of any district court shall 
551.23  issue a subpoena for the attendance of a witness or the 
551.24  production of books, papers, records, or memoranda before the 
551.25  agent for inspection and copying.  Disobedience of a court 
551.26  administrator's subpoena shall be punished by the district court 
551.27  of the district in which the subpoena is issued, or in the case 
551.28  of a subpoena issued by the commissioner or an agent, by the 
551.29  district court of the district in which the party served with 
551.30  the subpoena is located, in the same manner as contempt of the 
551.31  district court; 
551.32     (18) appoint and employ additional help, purchase supplies 
551.33  or materials, or incur other expenditures in the enforcement of 
551.34  state tax laws as considered necessary.  The salaries of all 
551.35  agents and employees provided for in this chapter shall be fixed 
551.36  by the appointing authority, subject to the approval of the 
552.1   commissioner of administration; 
552.2      (19) execute and administer any agreement with the 
552.3   secretary of the treasury of the United States or a 
552.4   representative of another state regarding the exchange of 
552.5   information and administration of the tax laws; 
552.6      (20) administer and enforce the provisions of sections 
552.7   325D.30 to 325D.42, the Minnesota Unfair Cigarette Sales Act; 
552.8      (21) authorize the use of unmarked motor vehicles to 
552.9   conduct seizures or criminal investigations pursuant to the 
552.10  commissioner's authority; and 
552.11     (22) exercise other powers and perform other duties 
552.12  required of or imposed upon the commissioner of revenue by law.  
552.13     [EFFECTIVE DATE.] This section is effective the day 
552.14  following final enactment. 
552.15     Sec. 4.  Minnesota Statutes 2000, section 270.60, is 
552.16  amended by adding a subdivision to read: 
552.17     Subd. 5.  [FEES; APPROPRIATION.] (a) The commissioner may 
552.18  enter into an agreement with the governing body of any federally 
552.19  recognized Indian reservation in Minnesota concerning fees 
552.20  administered by the commissioner that are paid by the tribe, 
552.21  members of the tribe, or persons who conduct business with the 
552.22  tribe, or otherwise imposed on on-reservation activities.  The 
552.23  agreement may provide for the refund or sharing of the fee.  The 
552.24  commissioner may make any payments required by the agreement 
552.25  from the fees collected. 
552.26     (b) Each head of an agency, board, or other governmental 
552.27  entity that administers a program that is funded by fees 
552.28  administered by the commissioner may sign an agreement entered 
552.29  into by the commissioner under this subdivision.  An agreement 
552.30  is not valid until signed by the head of each agency, board, or 
552.31  other governmental entity that administers a program funded by 
552.32  the particular fee covered in an agreement and by the 
552.33  commissioner of revenue. 
552.34     (c) There is annually appropriated to the commissioner of 
552.35  revenue from the funds for which the fees are collected the 
552.36  amounts necessary to make payments as provided in this 
553.1   subdivision. 
553.2      [EFFECTIVE DATE.] This section is effective the day 
553.3   following final enactment and applies to all fees administered 
553.4   by the commissioner of revenue for which timely claims for 
553.5   refund have been, or can be, filed. 
553.6      Sec. 5.  Minnesota Statutes 2000, section 270.70, 
553.7   subdivision 13, is amended to read: 
553.8      Subd. 13.  [LEVY AND SALE BY SHERIFF.] If any tax payable 
553.9   to the commissioner of revenue or to the department of revenue 
553.10  is not paid as provided in subdivision 2, the commissioner may, 
553.11  within five years after the date of assessment of the 
553.12  tax, within the time periods provided in subdivision 1 for 
553.13  collection of taxes, delegate the authority granted by 
553.14  subdivision 1, by means of issuing a warrant to the sheriff of 
553.15  any county of the state commanding the sheriff, as agent for the 
553.16  commissioner, to levy upon and sell the real and personal 
553.17  property of the person liable for the payment or collection of 
553.18  the tax and to levy upon the rights to property of that person 
553.19  within the county, or to levy upon and seize any property within 
553.20  the county on which there is a lien provided in section 270.69, 
553.21  and to return the warrant to the commissioner and pay to the 
553.22  commissioner the money collected by virtue thereof by a time to 
553.23  be therein specified not less than 60 days from the date of the 
553.24  warrant.  The sheriff shall proceed thereunder to levy upon and 
553.25  seize any property of the person and to levy upon the rights to 
553.26  property of the person within the county (except the person's 
553.27  homestead or that property which is exempt from execution 
553.28  pursuant to section 550.37), or to levy upon and seize any 
553.29  property within the county on which there is a lien provided in 
553.30  section 270.69.  For purposes of the preceding sentence, the 
553.31  term "tax" shall include any penalty, interest and costs 
553.32  properly payable.  The sheriff shall then sell so much of the 
553.33  property levied upon as is required to satisfy the taxes, 
553.34  interest, and penalties, together with the sheriff's costs; but 
553.35  the sales, and the time and manner of redemption therefrom, 
553.36  shall, to the extent not provided in sections 270.701 to 
554.1   270.709, be governed by chapter 550.  The proceeds of the sales, 
554.2   less the sheriff's costs, shall be turned over to the 
554.3   commissioner, who shall then apply the proceeds as provided in 
554.4   section 270.708. 
554.5      [EFFECTIVE DATE.] This section is effective the day 
554.6   following final enactment for all taxes for which issuance of a 
554.7   warrant under this subdivision has not been barred as of that 
554.8   date. 
554.9      Sec. 6.  Minnesota Statutes 2000, section 270.73, 
554.10  subdivision 1, is amended to read: 
554.11     Subdivision 1.  [POSTING, NOTICE.] Pursuant to the 
554.12  authority to disclose under section 270B.12, subdivision 4, the 
554.13  commissioner shall, by the 15th of each month, submit to the 
554.14  commissioner of public safety a list of all taxpayers who are 
554.15  required to pay, withhold, or collect the tax imposed by section 
554.16  290.02, 290.0922, 290.92, 290.9727, 290.9728, 290.9729, or 
554.17  297A.02, or local sales and use tax payable to the commissioner 
554.18  of revenue, or a local option tax administered and collected by 
554.19  the commissioner of revenue, and who are ten days or more 
554.20  delinquent in either filing a tax return or paying the tax. 
554.21     The commissioner of revenue is under no obligation to list 
554.22  a taxpayer whose business is inactive.  At least ten days before 
554.23  notifying the commissioner of public safety, the commissioner of 
554.24  revenue shall notify the taxpayer of the intended action. 
554.25     The commissioner of public safety shall post the list in 
554.26  the same manner as provided in section 340A.318, subdivision 3.  
554.27  The list will prominently show the date of posting.  If a 
554.28  taxpayer previously listed files all returns and pays all taxes 
554.29  then due, the commissioner shall notify the commissioner of 
554.30  public safety within two business days. 
554.31     [EFFECTIVE DATE.] This section is effective for lists 
554.32  submitted to the commissioner of public safety on or after the 
554.33  day following final enactment. 
554.34     Sec. 7.  [APPROPRIATION.] 
554.35     The following amounts are appropriated to the commissioner 
554.36  of revenue from the general fund to administer this act:  
555.1      (1) $....... in fiscal year 2002; and 
555.2      (2) $....... in fiscal year 2003. 
555.3      These are one-time appropriations and are not added to the 
555.4   base, except $....... for each year for assessment training and 
555.5   education (regional representatives) is added to the budget base.
555.6      Sec. 8.  [REPEALER.] 
555.7      Minnesota Rules, parts 8120.0200; 8120.0500; 8120.0700; 
555.8   8120.0900; 8120.1300; 8120.1600; 8120.2000; 8120.2100; 
555.9   8120.2200; 8120.2300; 8120.2500; 8120.2700; 8120.2800; 
555.10  8120.3000; 8120.3200; 8120.4300; 8120.4400; 8120.4500; 
555.11  8120.4600; 8120.4900; 8120.5000; 8120.5100; and 8120.5300, are 
555.12  repealed. 
555.13     [EFFECTIVE DATE.] This section is effective the day 
555.14  following final enactment.
Minnesota House of Representatives · 100 Rev. Dr. Martin Luther King Jr. Blvd. Saint Paul, MN 55155 · Webmaster@house.mn
HF 2498

Bill Text Versions
