Minnesota Legislature
SF 1505
2nd Engrossment - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am
KEY: stricken = removed, old language.
underscored = added, new language.
1.1 A bill for an act 1.2 relating to taxation; making changes to income, 1.3 estate, franchise, sales and use, property, motor 1.4 vehicle sales tax and registration, cigarette and 1.5 tobacco, liquor, aggregate and minerals taxes; 1.6 creating and modifying certain sales tax exemptions; 1.7 extending sunset dates for certain sales and property 1.8 tax exemptions; providing for the disposition of local 1.9 sales taxes for the cities of Duluth, St. Paul, 1.10 Hermantown, Rochester, Mankato, and Proctor; 1.11 authorizing local sales taxes in the cities of Beaver 1.12 Bay, Bemidji, Clearwater, Cloquet, Hopkins, Medford, 1.13 and Park Rapids; authorizing lodging taxes in the city 1.14 of Newport and Itasca county; providing property tax 1.15 exemptions and exclusions from property valuations; 1.16 modifying truth-in-taxation provisions; providing for 1.17 the creation of housing districts; authorizing or 1.18 modifying the authority of tax increment financing 1.19 districts in Detroit Lakes, Duluth, Monticello, New 1.20 Hope, Richfield, Roseville, and St. Michael; extending 1.21 sunset date for a tax levy in the city of Moorhead; 1.22 authorizing the creation of and modifying the 1.23 authority of local districts and economic development 1.24 authorities; granting bonding authority to the state 1.25 agricultural society and other political subdivisions; 1.26 allowing bonding for computer systems and other 1.27 purposes; authorizing cities to establish a program 1.28 for issuance of capital improvement bonds; limiting 1.29 challenges to tax increment financing actions; 1.30 establishing the corporate status of an entity; 1.31 updating to federal provisions; modifying payment, 1.32 penalty, interest, and enforcement provisions; 1.33 distributing payments to counties; changing 1.34 requirements for purchases of recycled materials; 1.35 regulating tax preparers; making technical changes; 1.36 imposing penalties; amending Minnesota Statutes 2002, 1.37 sections 16B.121; 115B.24, subdivision 8; 168.012, 1.38 subdivision 1; 168A.03; 216B.2424, subdivision 5; 1.39 270.06; 270.10, subdivision 1a; 270.60, subdivision 4; 1.40 270.69, by adding a subdivision; 270.701, subdivision 1.41 2, by adding a subdivision; 270.72, subdivision 2; 1.42 270A.03, subdivision 2; 270B.12, by adding a 1.43 subdivision; 272.02, subdivisions 26, 31, 47, 53, by 1.44 adding subdivisions; 272.12; 273.01; 273.05, 1.45 subdivision 1; 273.061, by adding subdivisions; 1.46 273.08; 273.11, subdivision 1a, by adding 2.1 subdivisions; 273.124, subdivision 1; 273.13, 2.2 subdivisions 22, 25; 273.1315; 273.1398, subdivisions 2.3 4b, 4d; 273.372; 273.42, subdivision 2; 274.01, 2.4 subdivision 1; 274.13, subdivision 1; 275.025, 2.5 subdivisions 1, 3, 4; 275.065, subdivisions 1, 1a, 3; 2.6 276.04, subdivision 2; 276.10; 276.11, subdivision 1; 2.7 277.20, subdivision 2; 278.03, subdivision 1; 278.05, 2.8 subdivision 6; 279.01, subdivision 1, by adding a 2.9 subdivision; 279.06, subdivision 1; 281.17; 282.01, 2.10 subdivisions 1b, 7a; 282.08; 287.12; 287.29, 2.11 subdivision 1; 287.31, by adding a subdivision; 2.12 289A.02, subdivision 7; 289A.10, subdivision 1; 2.13 289A.19, subdivision 4; 289A.31, subdivisions 3, 4, by 2.14 adding a subdivision; 289A.36, subdivision 7, by 2.15 adding subdivisions; 289A.50, subdivision 2a; 289A.56, 2.16 subdivision 3; 289A.60, subdivision 7, by adding a 2.17 subdivision; 290.01, subdivisions 19, 19b, 19d, 31; 2.18 290.05, subdivision 1; 290.06, subdivision 2c; 2.19 290.0671, subdivision 1; 290.0675, subdivisions 2, 3; 2.20 290.0679, subdivision 2; 290.0802, subdivision 1; 2.21 290.17, subdivision 4; 290.191, subdivision 1; 2.22 290A.03, subdivisions 8, 15; 290C.02, subdivisions 3, 2.23 7; 290C.03; 290C.07; 290C.09; 290C.10; 290C.11; 2.24 291.005, subdivision 1; 291.03, subdivision 1; 295.50, 2.25 subdivision 9b; 295.53, subdivision 1; 297A.61, 2.26 subdivisions 3, 12, 34, by adding subdivisions; 2.27 297A.62, subdivision 3; 297A.665; 297A.67, 2.28 subdivisions 2, 18, by adding subdivisions; 297A.68, 2.29 subdivisions 4, 5, 36, by adding a subdivision; 2.30 297A.69, subdivisions 2, 3, 4; 297A.70, subdivisions 2.31 8, 16; 297A.71, subdivision 10, by adding 2.32 subdivisions; 297A.85; 297B.025, subdivisions 1, 2; 2.33 297B.03; 297B.035, subdivision 1, by adding a 2.34 subdivision; 297F.01, subdivisions 21a, 23; 297F.06, 2.35 subdivision 4; 297F.08, by adding a subdivision; 2.36 297F.20, subdivisions 1, 2, 3, 6, 9; 297G.01, by 2.37 adding a subdivision; 297G.03, subdivision 1; 297I.01, 2.38 subdivision 9; 297I.20; 298.001, by adding a 2.39 subdivision; 298.01, subdivisions 3, 3a; 298.015; 2.40 298.016, subdivisions 1, 2, 4; 298.018; 352.15, 2.41 subdivision 1; 353.15, subdivision 1; 354.10, 2.42 subdivision 1; 354B.30; 354C.165; 373.01, subdivision 2.43 3; 373.45, subdivision 1; 373.47, subdivision 1; 2.44 376.009; 376.55, subdivision 3, by adding a 2.45 subdivision; 376.56, subdivision 3; 383B.77, 2.46 subdivisions 1, 2; 410.32; 412.301; 469.169, by adding 2.47 a subdivision; 469.1731, subdivision 3; 469.174, 2.48 subdivision 10, by adding subdivisions; 469.175, 2.49 subdivision 3, by adding a subdivision; 469.176, 2.50 subdivision 7; 469.1761, by adding a subdivision; 2.51 469.1763, subdivision 2; 469.177, subdivision 1; 2.52 469.1792; 473.39, by adding a subdivision; 473F.07, 2.53 subdivision 4; 473F.08, by adding a subdivision; 2.54 475.58, subdivision 3b; 477A.011, subdivision 30; 2.55 515B.1-116; Laws 1967, chapter 558, section 1, 2.56 subdivision 5, as amended; Laws 1980, chapter 511, 2.57 section 1, subdivision 2, as amended; Laws 1980, 2.58 chapter 511, section 2, as amended; Laws 1989, chapter 2.59 211, section 8, subdivision 2, as amended; Laws 1989, 2.60 chapter 211, section 8, subdivision 4, as amended; 2.61 Laws 1991, chapter 291, article 8, section 27, 2.62 subdivision 3, as amended; Laws 1991, chapter 291, 2.63 article 8, section 27, subdivision 4; Laws 1993, 2.64 chapter 375, article 9, section 46, subdivision 2, as 2.65 amended; Laws 1996, chapter 471, article 2, section 2.66 29; Laws 1998, chapter 389, article 8, section 43, 2.67 subdivision 3; Laws 1998, chapter 389, article 8, 2.68 section 43, subdivision 4; Laws 1999, chapter 243, 2.69 article 4, section 18, subdivision 1; Laws 1999, 2.70 chapter 243, article 4, section 18, subdivision 3; 2.71 Laws 1999, chapter 243, article 4, section 18, 3.1 subdivision 4; Laws 1999, chapter 243, article 4, 3.2 section 19, as amended; Laws 2001, First Special 3.3 Session chapter 5, article 3, section 61, the 3.4 effective date; Laws 2001 First Special Session 3.5 chapter 5, article 3, section 63, the effective date; 3.6 Laws 2001, First Special Session chapter 5, article 3, 3.7 section 96; Laws 2001, First Special Session chapter 3.8 5, article 9, section 12, the effective date; Laws 3.9 2001, First Special Session chapter 5, article 12, 3.10 section 67, the effective date; Laws 2002, chapter 3.11 377, article 3, section 15, the effective date; Laws 3.12 2002 chapter 377, article 6, section 4, the effective 3.13 date; Laws 2002, chapter 377, article 11, section 1; 3.14 proposing coding for new law in Minnesota Statutes, 3.15 chapters 37; 270; 273; 275; 276; 290C; 298; 410; 3.16 repealing Minnesota Statutes 2002, sections 270.691, 3.17 subdivision 8; 274.04; 290.0671, subdivision 3; 3.18 290.0675, subdivision 5; 294.01; 294.02; 294.021; 3.19 294.03; 294.06; 294.07; 294.08; 294.09; 294.10; 3.20 294.11; 294.12; 297A.72, subdivision 1; 297A.97; 3.21 298.01, subdivisions 3c, 3d; 298.017; 477A.065; Laws 3.22 1984, chapter 652, section 2; Laws 2002, chapter 377, 3.23 article 9, section 12, the effective date; Minnesota 3.24 Rules, parts 8007.0300, subpart 3; 8009.7100; 3.25 8009.7200; 8009.7300; 8009.7400; 8092.1000; 8106.0100, 3.26 subparts 11, 15, 16; 8106.0200; 8125.1000; 8125.1300, 3.27 subpart 1; 8125.1400; 8130.0800, subparts 5, 12; 3.28 8130.1300; 8130.1600, subpart 5; 8130.1700, subparts 3.29 3, 4; 8130.4800, subpart 2; 8130.7500, subpart 5; 3.30 8130.8000; 8130.8300. 3.31 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 3.32 ARTICLE 1 3.33 SALES TAX 3.34 Section 1. Minnesota Statutes 2002, section 16B.121, is 3.35 amended to read: 3.36 16B.121 [PURCHASE OF RECYCLED, REPAIRABLE, AND DURABLE 3.37 MATERIALS.] 3.38 The commissioner shall take the recycled content and 3.39 recyclability of commodities to be purchased into consideration 3.40 in bid specifications.When feasible and when the price of3.41recycled materials does not exceed the price of nonrecycled3.42materials by more than ten percent,The commissioner, and state 3.43 agencies when purchasing under delegated authority, shall 3.44 purchase recycled materials, unless the commissioner determines 3.45 that the price of the recycled materials exceeds the price of 3.46 nonrecycled materials by more than ten percent or that use of 3.47 the recycled materials would be impracticable. In order to 3.48 maximize the quantity and quality of recycled materials 3.49 purchased, the commissioner, and state agencies when purchasing 3.50 under delegated authority, may also use other appropriate 4.1 procedures to acquire recycled materials at the most economical 4.2 cost to the state. 4.3 When purchasing commodities and services, the commissioner, 4.4 and state agencies when purchasing under delegated authority, 4.5 shall apply and promote the preferred waste management practices 4.6 listed in section 115A.02, with special emphasis on reduction of 4.7 the quantity and toxicity of materials in waste. The 4.8 commissioner, and state agencies when purchasing under delegated 4.9 authority, in developing bid specifications, shall consider the 4.10 extent to which a commodity or product is durable, reusable, or 4.11 recyclable and marketable through the state resource recovery 4.12 program and the extent to which the commodity or product 4.13 contains postconsumer material. 4.14 Sec. 2. Minnesota Statutes 2002, section 168.012, 4.15 subdivision 1, is amended to read: 4.16 Subdivision 1. [VEHICLES EXEMPT FROM TAX, FEES, OR PLATE 4.17 DISPLAY.] (a) The following vehicles are exempt from the 4.18 provisions of this chapter requiring payment of tax and 4.19 registration fees, except as provided in subdivision 1c: 4.20 (1) vehicles owned and used solely in the transaction of 4.21 official business by the federal government, the state, or any 4.22 political subdivision; 4.23 (2) vehicles owned and used exclusively by educational 4.24 institutions and used solely in the transportation of pupils to 4.25 and from those institutions; 4.26 (3) vehicles used solely in driver education programs at 4.27 nonpublic high schools; 4.28 (4) vehicles owned by nonprofit charities and used 4.29 exclusively to transport disabled persons for educational 4.30 purposes; 4.31 (5) ambulances owned by ambulance services licensed under 4.32 section 144E.10, the general appearance of which is 4.33 unmistakable;and4.34 (6) vehicles used to provide emergency medical services, 4.35 except as provided in paragraph (b), and owned by the state, a 4.36 political subdivision, or an ambulance service licensed under 5.1 section 144E.10; and 5.2 (7) vehicles owned by a commercial driving school licensed 5.3 under section 171.34, or an employee of a commercial driving 5.4 school licensed under section 171.34, and the vehicle is used 5.5 exclusively for driver education and training. 5.6 (b) Vehicles owned by the federal government, municipal 5.7 fire apparatuses including fire-suppression support vehicles, 5.8 police patrols, and ambulances, the general appearance of which 5.9 is unmistakable, are not required to register or display number 5.10 plates. 5.11 (c) Unmarked vehicles used in general police work, liquor 5.12 investigations, or arson investigations, and passenger 5.13 automobiles, pickup trucks, and buses owned or operated by the 5.14 department of corrections, must be registered and must display 5.15 appropriate license number plates, furnished by the registrar at 5.16 cost. Original and renewal applications for these license 5.17 plates authorized for use in general police work and for use by 5.18 the department of corrections must be accompanied by a 5.19 certification signed by the appropriate chief of police if 5.20 issued to a police vehicle, the appropriate sheriff if issued to 5.21 a sheriff's vehicle, the commissioner of corrections if issued 5.22 to a department of corrections vehicle, or the appropriate 5.23 officer in charge if issued to a vehicle of any other law 5.24 enforcement agency. The certification must be on a form 5.25 prescribed by the commissioner and state that the vehicle will 5.26 be used exclusively for a purpose authorized by this section. 5.27 (d) Unmarked vehicles used by the departments of revenue 5.28 and labor and industry, fraud unit, in conducting seizures or 5.29 criminal investigations must be registered and must display 5.30 passenger vehicle classification license number plates, 5.31 furnished at cost by the registrar. Original and renewal 5.32 applications for these passenger vehicle license plates must be 5.33 accompanied by a certification signed by the commissioner of 5.34 revenue or the commissioner of labor and industry. The 5.35 certification must be on a form prescribed by the commissioner 5.36 and state that the vehicles will be used exclusively for the 6.1 purposes authorized by this section. 6.2 (e) Unmarked vehicles used by the division of disease 6.3 prevention and control of the department of health must be 6.4 registered and must display passenger vehicle classification 6.5 license number plates. These plates must be furnished at cost 6.6 by the registrar. Original and renewal applications for these 6.7 passenger vehicle license plates must be accompanied by a 6.8 certification signed by the commissioner of health. The 6.9 certification must be on a form prescribed by the commissioner 6.10 and state that the vehicles will be used exclusively for the 6.11 official duties of the division of disease prevention and 6.12 control. 6.13 (f) Unmarked vehicles used by staff of the gambling control 6.14 board in gambling investigations and reviews must be registered 6.15 and must display passenger vehicle classification license number 6.16 plates. These plates must be furnished at cost by the 6.17 registrar. Original and renewal applications for these 6.18 passenger vehicle license plates must be accompanied by a 6.19 certification signed by the board chair. The certification must 6.20 be on a form prescribed by the commissioner and state that the 6.21 vehicles will be used exclusively for the official duties of the 6.22 gambling control board. 6.23 (g) All other motor vehicles must be registered and display 6.24 tax-exempt number plates, furnished by the registrar at cost, 6.25 except as provided in subdivision 1c. All vehicles required to 6.26 display tax-exempt number plates must have the name of the state 6.27 department or political subdivision, nonpublic high school 6.28 operating a driver education program, or licensed commercial 6.29 driving school, plainly displayed on both sides of the vehicle; 6.30 except that each state hospital and institution for the mentally 6.31 ill and mentally retarded may have one vehicle without the 6.32 required identification on the sides of the vehicle, and county 6.33 social service agencies may have vehicles used for child and 6.34 vulnerable adult protective services without the required 6.35 identification on the sides of the vehicle. This identification 6.36 must be in a color giving contrast with that of the part of the 7.1 vehicle on which it is placed and must endure throughout the 7.2 term of the registration. The identification must not be on a 7.3 removable plate or placard and must be kept clean and visible at 7.4 all times; except that a removable plate or placard may be 7.5 utilized on vehicles leased or loaned to a political subdivision 7.6 or to a nonpublic high school driver education program. 7.7 [EFFECTIVE DATE.] This section is effective July 1, 2003. 7.8 Sec. 3. Minnesota Statutes 2002, section 168A.03, is 7.9 amended to read: 7.10 168A.03 [EXEMPT VEHICLES.] 7.11 Subdivision 1. The registrar shall not issue a certificate 7.12 of title for: 7.13 (1) a vehicle owned by the United States; 7.14 (2)a vehicle owned by a manufacturer or dealer and held7.15for sale, even though incidentally moved on the highway or used7.16pursuant to section 168.27 or 168.28, or a vehicle used by a7.17manufacturer solely for testing;7.18(3)a vehicle owned by a nonresident and not required by 7.19 law to be registered in this state; 7.20(4)(3) a vehicle owned by a nonresident and regularly 7.21 engaged in the interstate transportation of persons or property 7.22 for which a currently effective certificate of title has been 7.23 issued in another state; 7.24(5)(4) a vehicle moved solely by animal power; 7.25(6)(5) an implement of husbandry; 7.26(7)(6) special mobile equipment; 7.27(8)(7) a self-propelled wheelchair or invalid tricycle; 7.28(9)(8) a trailer (i) having a gross weight of 4,000 pounds 7.29 or less unless a secured party holds an interest in the trailer 7.30 or a certificate of title was previously issued by this state or 7.31 any other state or (ii) designed primarily for agricultural 7.32 purposes except recreational equipment or a manufactured home, 7.33 both as defined in section 168.011, subdivisions 8 and 25; 7.34(10)(9) a snowmobile. 7.35 Subd. 2. [DEALERS.] No certificate of title need be 7.36 obtained for a vehicle owned by a manufacturer or dealer and 8.1 held for sale, even though incidentally moved on the highway or 8.2 used pursuant to section 168.27 or 168.28, or a vehicle used by 8.3 a manufacturer solely for testing. 8.4 [EFFECTIVE DATE.] This section is effective July 1, 2003. 8.5 Sec. 4. Minnesota Statutes 2002, section 297A.61, 8.6 subdivision 3, is amended to read: 8.7 Subd. 3. [SALE AND PURCHASE.] (a) "Sale" and "purchase" 8.8 include, but are not limited to, each of the transactions listed 8.9 in this subdivision. 8.10 (b) Sale and purchase include: 8.11 (1) any transfer of title or possession, or both, of 8.12 tangible personal property, whether absolutely or conditionally, 8.13 for a consideration in money or by exchange or barter; and 8.14 (2) the leasing of or the granting of a license to use or 8.15 consume, for a consideration in money or by exchange or barter, 8.16 tangible personal property, other than a manufactured home used 8.17 for residential purposes for a continuous period of 30 days or 8.18 more. 8.19 (c) Sale and purchase include the production, fabrication, 8.20 printing, or processing of tangible personal property for a 8.21 consideration for consumers who furnish either directly or 8.22 indirectly the materials used in the production, fabrication, 8.23 printing, or processing. 8.24 (d) Sale and purchase include the preparing for a 8.25 consideration of food. Notwithstanding section 297A.67, 8.26 subdivision 2, taxable food includes, but is not limited to, the 8.27 following: 8.28 (1) prepared food sold by the retailer; 8.29 (2) soft drinks; 8.30 (3) candy; and 8.31 (4) all food sold through vending machines. 8.32 (e) A sale and a purchase includes the furnishing for a 8.33 consideration of electricity, gas, water, or steam for use or 8.34 consumption within this state. 8.35 (f) A sale and a purchase includes the transfer for a 8.36 consideration of computer software. 9.1 (g) A sale and a purchase includes the furnishing for a 9.2 consideration of the following services: 9.3 (1) the privilege of admission to places of amusement, 9.4 recreational areas, or athletic events, and the making available 9.5 of amusement devices, tanning facilities, reducing salons, steam 9.6 baths, turkish baths, health clubs, and spas or athletic 9.7 facilities; 9.8 (2) lodging and related services by a hotel, rooming house, 9.9 resort, campground, motel, or trailer camp and the granting of 9.10 any similar license to use real property other than the renting 9.11 or leasing of it for a continuous period of 30 days or more; 9.12 (3) parking services, whether on a contractual, hourly, or 9.13 other periodic basis, except for parking at a meter; 9.14 (4) the granting of membership in a club, association, or 9.15 other organization if: 9.16 (i) the club, association, or other organization makes 9.17 available for the use of its members sports and athletic 9.18 facilities, without regard to whether a separate charge is 9.19 assessed for use of the facilities; and 9.20 (ii) use of the sports and athletic facility is not made 9.21 available to the general public on the same basis as it is made 9.22 available to members. 9.23 Granting of membership means both onetime initiation fees and 9.24 periodic membership dues. Sports and athletic facilities 9.25 include golf courses; tennis, racquetball, handball, and squash 9.26 courts; basketball and volleyball facilities; running tracks; 9.27 exercise equipment; swimming pools; and other similar athletic 9.28 or sports facilities; 9.29 (5) delivery of aggregate materials and concrete block by a 9.30 third party if the delivery would be subject to the sales tax if 9.31 provided by the seller of the aggregate material or concrete 9.32 block; and 9.33 (6) services as provided in this clause: 9.34 (i) laundry and dry cleaning services including cleaning, 9.35 pressing, repairing, altering, and storing clothes, linen 9.36 services and supply, cleaning and blocking hats, and carpet, 10.1 drapery, upholstery, and industrial cleaning. Laundry and dry 10.2 cleaning services do not include services provided by coin 10.3 operated facilities operated by the customer; 10.4 (ii) motor vehicle washing, waxing, and cleaning services, 10.5 including services provided by coin operated facilities operated 10.6 by the customer, and rustproofing, undercoating, and towing of 10.7 motor vehicles; 10.8 (iii) building and residential cleaning, maintenance, and 10.9 disinfecting and exterminating services; 10.10 (iv) detective, security, burglar, fire alarm, and armored 10.11 car services; but not including services performed within the 10.12 jurisdiction they serve by off-duty licensed peace officers as 10.13 defined in section 626.84, subdivision 1, or services provided 10.14 by a nonprofit organization for monitoring and electronic 10.15 surveillance of persons placed on in-home detention pursuant to 10.16 court order or under the direction of the Minnesota department 10.17 of corrections; 10.18 (v) pet grooming services; 10.19 (vi) lawn care, fertilizing, mowing, spraying and sprigging 10.20 services; garden planting and maintenance; tree, bush, and shrub 10.21 pruning, bracing, spraying, and surgery; indoor plant care; 10.22 tree, bush, shrub, and stump removal; and tree trimming for 10.23 public utility lines. Services performed under a construction 10.24 contract for the installation of shrubbery, plants, sod, trees, 10.25 bushes, and similar items are not taxable; 10.26 (vii) massages, except when provided by a licensed health 10.27 care facility or professional or upon written referral from a 10.28 licensed health care facility or professional for treatment of 10.29 illness, injury, or disease; and 10.30 (viii) the furnishing of lodging, board, and care services 10.31 for animals in kennels and other similar arrangements, but 10.32 excluding veterinary and horse boarding services. 10.33 In applying the provisions of this chapter, the terms 10.34 "tangible personal property" and "sales at retail" include 10.35 taxable services and the provision of taxable services, unless 10.36 specifically provided otherwise. Services performed by an 11.1 employee for an employer are not taxable. Services performed by 11.2 a partnership or association for another partnership or 11.3 association are not taxable if one of the entities owns or 11.4 controls more than 80 percent of the voting power of the equity 11.5 interest in the other entity. Services performed between 11.6 members of an affiliated group of corporations are not taxable. 11.7 For purposes of this section, "affiliated group of corporations" 11.8 includes those entities that would be classified as members of 11.9 an affiliated group under United States Code, title 26, section 11.10 1504, and that are eligible to file a consolidated tax return 11.11 for federal income tax purposes. 11.12 (h) A sale and a purchase includes the furnishing for a 11.13 consideration of tangible personal property or taxable services 11.14 by the United States or any of its agencies or 11.15 instrumentalities, or the state of Minnesota, its agencies, 11.16 instrumentalities, or political subdivisions. 11.17 (i) A sale and a purchase includes the furnishing for a 11.18 consideration of telecommunications services, including cable 11.19 television services and direct satellite services. 11.20 Telecommunications services are taxed to the extent allowed 11.21 under federal law if those services: 11.22 (1) either (i) originate and terminate in this state; or 11.23 (ii) originate in this state and terminate outside the state and 11.24 the service is charged to a telephone number customer located in 11.25 this state or to the account of any transmission instrument in 11.26 this state; or (iii) originate outside this state and terminate 11.27 in this state and the service is charged to a telephone number 11.28 customer located in this state or to the account of any 11.29 transmission instrument in this state; or 11.30 (2) are rendered by providing a private communications 11.31 service for which the customer has one or more locations within 11.32 Minnesota connected to the service and the service is charged to 11.33 a telephone number customer located in this state or to the 11.34 account of any transmission instrument in this state. 11.35 All charges for mobile telecommunications services, as 11.36 defined in United States Code, title 4, section 124, are deemed 12.1 to be provided by the customer's home service provider and 12.2 sourced to the customer's place of primary use and are subject 12.3 to tax based upon the customer's place of primary use in 12.4 accordance with the Mobile Telecommunications Sourcing Act, 12.5 United States Code, title 4, sections 116 to 126. All other 12.6 definitions and provisions of the Mobile Telecommunications 12.7 Sourcing Act as provided in United States Code, title 4, are 12.8 hereby adopted. 12.9 (j) A sale and a purchase includes the furnishing for a 12.10 consideration of installation if the installation charges would 12.11 be subject to the sales tax if the installation were provided by 12.12 the seller of the item being installed. 12.13 (k) A sale and a purchase includes the rental of a vehicle 12.14 by a motor vehicle dealer to a customer when (1) the vehicle is 12.15 rented by the customer for a consideration, or (2) the motor 12.16 vehicle dealer is reimbursed pursuant to a service contract as 12.17 defined in section 65B.29, subdivision 1, clause (1). 12.18 [EFFECTIVE DATE.] This section is effective for sales and 12.19 purchases made on or after July 1, 2003. 12.20 Sec. 5. Minnesota Statutes 2002, section 297A.61, is 12.21 amended by adding a subdivision to read: 12.22 Subd. 35. [DIRECT MAIL.] "Direct mail" means printed 12.23 material delivered or distributed by United States Mail or other 12.24 delivery service to a mass audience or to addressees on a 12.25 mailing list provided by the purchaser or at the direction of 12.26 the purchaser when the cost of the items is not billed directly 12.27 to the recipients. "Direct mail" includes tangible personal 12.28 property supplied directly or indirectly by the purchaser to the 12.29 direct mail seller for inclusion in the package containing the 12.30 printed material. "Direct mail" does not include multiple 12.31 identical items of printed material delivered to a single 12.32 address. 12.33 [EFFECTIVE DATE.] This section is effective retroactively 12.34 for delivery or distribution charges on sales and purchases made 12.35 after December 31, 2001. 12.36 Sec. 6. Minnesota Statutes 2002, section 297A.62, 13.1 subdivision 3, is amended to read: 13.2 Subd. 3. [MANUFACTURED HOUSING AND PARK TRAILERS.] For 13.3 retail sales of manufactured homes as defined in section 327.31, 13.4 subdivision 6, for residential uses, the sales tax under 13.5 subdivision 1 is imposed on 65 percent of the dealer's cost of 13.6 the manufactured home. For retail sales of new or used park 13.7 trailers, as defined in section 168.011, subdivision 8, 13.8 paragraph (b), the sales tax under subdivision 1 is imposed on 13.9 65 percent of the sales price of the park trailer. For retail 13.10 sales of prefabricated homes subject to regulation under 13.11 Minnesota Rules, chapter 1360 or 1361, for residential use, the 13.12 sales tax under subdivision 1 is imposed on 65 percent of the 13.13 manufacturer's wholesale list price of the prefabricated home. 13.14 [EFFECTIVE DATE.] This section is effective for sales and 13.15 purchases occurring on or after July 1, 2003. 13.16 Sec. 7. Minnesota Statutes 2002, section 297A.67, 13.17 subdivision 18, is amended to read: 13.18 Subd. 18. [USED AND REREFINED MOTOR OILS.] Used motor oils 13.19 are exempt. Rerefined motor oils that meet American Petroleum 13.20 Institute specifications for gasoline or diesel engines are 13.21 exempt. The exemption for rerefined motor oils expires July 1, 13.22 2007. 13.23 [EFFECTIVE DATE.] This section is effective for sales and 13.24 purchases made after June 30, 2003, and before July 1, 2007. 13.25 Sec. 8. Minnesota Statutes 2002, section 297A.67, is 13.26 amended by adding a subdivision to read: 13.27 Subd. 31. [RECYCLED COPIER AND PRINTING PAPER.] Copier 13.28 paper with a minimum postconsumer recycled content of 30 percent 13.29 by weight is exempt. Uncoated printing paper with a minimum of 13.30 30 percent postconsumer recycled content by weight is exempt. 13.31 Coated printing paper with a minimum of ten percent postconsumer 13.32 recycled content by weight is exempt. These exemptions expire 13.33 July 1, 2007. 13.34 [EFFECTIVE DATE.] This section is effective for sales and 13.35 purchases made after June 30, 2003, and before July 1, 2007. 13.36 Sec. 9. Minnesota Statutes 2002, section 297A.67, is 14.1 amended by adding a subdivision to read: 14.2 Subd. 32. [SERVICE LOANER VEHICLE COVERED BY 14.3 WARRANTY.] The loan of a vehicle by a motor vehicle dealer to a 14.4 customer as a replacement for a vehicle being serviced or 14.5 repaired is exempt if the vehicle is loaned pursuant to a 14.6 warranty included in the original purchase price of the vehicle 14.7 being serviced or repaired. 14.8 [EFFECTIVE DATE.] This section is effective the day 14.9 following final enactment. 14.10 Sec. 10. Minnesota Statutes 2002, section 297A.68, 14.11 subdivision 36, is amended to read: 14.12 Subd. 36. [DELIVERY OR DISTRIBUTION CHARGES;PRINTED14.13MATERIALSDIRECT MAIL.] Charges for the delivery or distribution 14.14 ofprinted materials, including individual account14.15information,direct mail are exempt if(1)the charges are 14.16 separately stated, (2) the delivery or distribution is to a mass14.17audience or to a mailing list provided at the direction of the14.18customer, and (3) the cost of the materials is not billed14.19directly to the recipientson an invoice or similar billing 14.20 document given to the purchaser. 14.21 [EFFECTIVE DATE.] This section is effective retroactively 14.22 for delivery or distribution charges on sales and purchases made 14.23 after December 31, 2001. 14.24 Sec. 11. Minnesota Statutes 2002, section 297A.70, 14.25 subdivision 8, is amended to read: 14.26 Subd. 8. [REGIONWIDE PUBLIC SAFETY RADIO COMMUNICATION 14.27 SYSTEM; PRODUCTS AND SERVICES.] Products and services including, 14.28 but not limited to, end user equipment used for construction, 14.29 ownership, operation, maintenance, and enhancement of the 14.30 backbone system of the regionwide public safety radio 14.31 communication system established under sections 473.891 to 14.32 473.905, are exempt. For purposes of this subdivision, backbone 14.33 system is defined in section 473.891, subdivision 9. This 14.34 subdivision is effective for purchases, sales, storage, use, or 14.35 consumption occurring before August 1,20032005, in the 14.36 counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and 15.1 Washington. 15.2 [EFFECTIVE DATE.] This section is effective the day 15.3 following final enactment. 15.4 Sec. 12. Minnesota Statutes 2002, section 297A.70, 15.5 subdivision 16, is amended to read: 15.6 Subd. 16. [CAMP FEES.] Camp fees to camps or other 15.7 recreation facilities owned and operated by an exempt 15.8 organization under section 501(c)(3) of the Internal Revenue 15.9 Code are exempt if the camps or facilities provide educational 15.10 and social activitiesfor young people primarily age 18 and15.11underprimarily for children and adults accompanying children, 15.12 or persons with disabilities. 15.13 [EFFECTIVE DATE.] This section is effective for sales and 15.14 purchases made on or after June 30, 2003. 15.15 Sec. 13. Minnesota Statutes 2002, section 297A.71, 15.16 subdivision 10, is amended to read: 15.17 Subd. 10. [AIRCRAFT HEAVY MAINTENANCE FACILITY.] 15.18 Materials, equipment, and supplies used or consumed in 15.19 constructing a heavy maintenance facility for aircraft that is 15.20 to be owned by the state of Minnesota or one of its political 15.21 subdivisions and leased by an airline company, an aircraft 15.22 repair company, or an aircraft engine repair facility described 15.23 in section 116R.02, subdivision 6, are exempt.Except for15.24equipment owned or leased by a contractor, all machinery,15.25equipment, and tools necessary to the construction and equipping15.26of that facility in order to provide those services are also15.27exempt.15.28 [EFFECTIVE DATE.] This section is effective for sales and 15.29 purchases made on or after July 1, 2003. 15.30 Sec. 14. Minnesota Statutes 2002, section 297A.71, is 15.31 amended by adding a subdivision to read: 15.32 Subd. 32. [CONSTRUCTION MATERIALS; MINNEAPOLIS 15.33 PLANETARIUM.] Materials and supplies used or consumed in the 15.34 construction of a Minneapolis planetarium are exempt. 15.35 [EFFECTIVE DATE.] This section is effective for purchases 15.36 made on or after January 1, 2002, and before July 1, 2006. 16.1 Sec. 15. Minnesota Statutes 2002, section 297A.71, is 16.2 amended by adding a subdivision to read: 16.3 Subd. 33. [GUTHRIE THEATER.] Materials, equipment, and 16.4 supplies used or consumed in construction of the Guthrie Theater 16.5 and the related parking garage are exempt. 16.6 [EFFECTIVE DATE.] This section is effective the day 16.7 following final enactment. 16.8 Sec. 16. Minnesota Statutes 2002, section 297A.71, is 16.9 amended by adding a subdivision to read: 16.10 Subd. 34. [CHILDREN'S THEATRE.] Materials, equipment, and 16.11 supplies used or consumed in construction of the Children's 16.12 Theatre in the city of Minneapolis are exempt. 16.13 [EFFECTIVE DATE.] This section is effective for sales and 16.14 purchases made on or after July 1, 2003. 16.15 Sec. 17. Minnesota Statutes 2002, section 297A.71, is 16.16 amended by adding a subdivision to read: 16.17 Subd. 35. [WALKER ART CENTER.] Materials, equipment, and 16.18 supplies used or consumed in construction of the Walker Art 16.19 Center are exempt if more than $70,000,000 is raised from 16.20 private sources to pay for a portion of the costs of the project. 16.21 [EFFECTIVE DATE.] This section is effective for purchases 16.22 made on or after June 1, 2003. 16.23 Sec. 18. Minnesota Statutes 2002, section 297B.03, is 16.24 amended to read: 16.25 297B.03 [EXEMPTIONS.] 16.26 There is specifically exempted from the provisions of this 16.27 chapter and from computation of the amount of tax imposed by it 16.28 the following: 16.29 (1) purchase or use, including use under a lease purchase 16.30 agreement or installment sales contract made pursuant to section 16.31 465.71, of any motor vehicle by the United States and its 16.32 agencies and instrumentalities and by any person described in 16.33 and subject to the conditions provided in section 297A.67, 16.34 subdivision 11; 16.35 (2) purchase or use of any motor vehicle by any person who 16.36 was a resident of another state or country at the time of the 17.1 purchase and who subsequently becomes a resident of Minnesota, 17.2 provided the purchase occurred more than 60 days prior to the 17.3 date such person began residing in the state of Minnesota and 17.4 the motor vehicle was registered in the person's name in the 17.5 other state or country; 17.6 (3) purchase or use of any motor vehicle by any person 17.7 making a valid election to be taxed under the provisions of 17.8 section 297A.90; 17.9 (4) purchase or use of any motor vehicle previously 17.10 registered in the state of Minnesota when such transfer 17.11 constitutes a transfer within the meaning of section 118, 331, 17.12 332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 17.13 1563(a) of the Internal Revenue Code of 1986, as amended through 17.14 December 31, 1999; 17.15 (5) purchase or use of any vehicle owned by a resident of 17.16 another state and leased to a Minnesota based private or for 17.17 hire carrier for regular use in the transportation of persons or 17.18 property in interstate commerce provided the vehicle is titled 17.19 in the state of the owner or secured party, and that state does 17.20 not impose a sales tax or sales tax on motor vehicles used in 17.21 interstate commerce; 17.22 (6) purchase or use of a motor vehicle by a private 17.23 nonprofit or public educational institution for use as an 17.24 instructional aid in automotive training programs operated by 17.25 the institution. "Automotive training programs" includes motor 17.26 vehicle body and mechanical repair courses but does not include 17.27 driver education programs; 17.28 (7) purchase of a motor vehicle for use as an ambulance or 17.29 to provide emergency medical services by an ambulance service 17.30 licensed under section 144E.10; 17.31 (8) purchase of a motor vehicle by or for a public library, 17.32 as defined in section 134.001, subdivision 2, as a bookmobile or 17.33 library delivery vehicle; 17.34 (9) purchase of a ready-mixed concrete truck; 17.35 (10) purchase or use of a motor vehicle by a town for use 17.36 exclusively for road maintenance, including snowplows and dump 18.1 trucks, but not including automobiles, vans, or pickup trucks; 18.2 (11) purchase or use of a motor vehicle by a corporation, 18.3 society, association, foundation, or institution organized and 18.4 operated exclusively for charitable, religious, or educational 18.5 purposes, except a public school, university, or library, but 18.6 only if the vehicle is: 18.7 (i) a truck, as defined in section 168.011, a bus, as 18.8 defined in section 168.011, or a passenger automobile, as 18.9 defined in section 168.011, if the automobile is designed and 18.10 used for carrying more than nine persons including the driver; 18.11 and 18.12 (ii) intended to be used primarily to transport tangible 18.13 personal property or individuals, other than employees, to whom 18.14 the organization provides service in performing its charitable, 18.15 religious, or educational purpose; 18.16 (12) purchase of a motor vehicle for use by a transit 18.17 provider exclusively to provide transit service is exempt if the 18.18 transit provider is either (i) receiving financial assistance or 18.19 reimbursement under section 174.24 or 473.384, or (ii) operating 18.20 under section 174.29, 473.388, or 473.405. 18.21 [EFFECTIVE DATE.] This section is effective for sales and 18.22 purchases made on or after July 1, 2003. 18.23 Sec. 19. Minnesota Statutes 2002, section 297B.035, is 18.24 amended by adding a subdivision to read: 18.25 Subd. 5. [USE BY DEALER.] If a motor vehicle dealer uses a 18.26 vehicle, purchased for resale in the ordinary course of 18.27 business, other than for demonstration purposes, the dealer may 18.28 elect to pay the motor vehicle sales tax under this chapter or 18.29 the use tax under chapter 297A based on the reasonable rental 18.30 value of the vehicle. If the motor vehicle dealer fails to 18.31 report the use tax under chapter 297A, it is presumed that the 18.32 dealer elected to pay the motor vehicle sales tax under this 18.33 chapter. 18.34 [EFFECTIVE DATE.] This section is effective for purchases 18.35 made on or after July 1, 2003. 18.36 Sec. 20. Laws 1999, chapter 243, article 4, section 19, as 19.1 amended by Laws 2001, First Special Session chapter 5, article 19.2 12, section 88, is amended to read: 19.3 Sec. 19. [EFFECTIVE DATES.] 19.4 Sections 1, 2, 5, 7, 9, and 11 are effective for sales and 19.5 purchases made after June 30, 1999. 19.6 Section 3 is effective for amended returns and refund 19.7 claims filed on or after July 1, 1999. 19.8 Section 4 is effective the day following final enactment 19.9 and applies retroactively to all open tax years and to 19.10 assessments and appeals under Minnesota Statutes, sections 19.11 289A.38 and 289A.65, for which the time limits have not expired 19.12 on the date of final enactment of this act. The provisions of 19.13 Minnesota Statutes, section 289A.50, apply to refunds claimed 19.14 under section 4. Refunds claimed under section 4 must be filed 19.15 by the later of December 31, 1999, or the time limit under 19.16 Minnesota Statutes, section 289A.40, subdivision 1. 19.17 Section 6 is effective retroactively for sales and 19.18 purchases made after June 30, 1998. 19.19 Section 8 is effective for purchases and sales made after 19.20 the date of final enactment. 19.21 Section 10 is effective for purchases made after the date 19.22 of final enactment and before July 1,20032005. 19.23 Section 12 is effective the day after final enactment. 19.24 Section 12, paragraphs (a) to (c), apply to all local sales 19.25 taxes enacted after July 1, 1999. Section 12, paragraph (d), 19.26 applies to all local sales taxes in effect at the time of, or 19.27 imposed after the day of, the enactment of this section. 19.28 Section 13 is effective the day following final enactment. 19.29 [EFFECTIVE DATE.] This section is effective the day 19.30 following final enactment. 19.31 Sec. 21. Laws 2001, First Special Session chapter 5, 19.32 article 12, section 67, the effective date, is amended to read: 19.33 [EFFECTIVE DATE.] This section is effective for purchases 19.34 and sales made after June 30, 2001, and beforeJanuary 1, 200319.35 July 1, 2005. 19.36 [EFFECTIVE DATE.] This section is effective the day 20.1 following final enactment. 20.2 Sec. 22. [STATE CONVENTION CENTER.] 20.3 (a) Building materials, supplies, or equipment used or 20.4 consumed in constructing or equipping improvements to a state 20.5 convention center located in a city outside the metropolitan 20.6 area as defined in Minnesota Statutes, section 473.121, 20.7 subdivision 2, and governed by an 11-person board of which four 20.8 are appointed by the governor are exempt if the improvements are 20.9 financed in whole or in part by nonstate resources including, 20.10 but not limited to, revenue or general obligations issued by the 20.11 state convention center board of the city in which the center is 20.12 located. This exemption applies regardless of whether the items 20.13 are purchased by the owner or by a contractor, subcontractor, or 20.14 builder. 20.15 (b) This section is intended to clarify the original intent 20.16 of Minnesota Statutes, section 297A.71, subdivision 2. 20.17 [EFFECTIVE DATE.] This section is effective the day 20.18 following final enactment and applies retroactively to sales and 20.19 purchases made after June 30, 1995, and before July 1, 2001. 20.20 Sec. 23. [REPEALER.] 20.21 Laws 2002, chapter 377, article 9, section 12, the 20.22 effective date, is repealed effective the day following final 20.23 enactment. 20.24 ARTICLE 2 20.25 LOCAL LODGING AND SALES TAX ARTICLE 20.26 Section 1. Laws 1980, chapter 511, section 1, subdivision 20.27 2, as amended by Laws 1991, chapter 291, article 8, section 22, 20.28 and Laws 1998, chapter 389, article 8, section 25, is amended to 20.29 read: 20.30 Subd. 2. Notwithstanding Minnesota Statutes, Section 20.31 477A.016, or any other law, ordinance, or city charter provision 20.32 to the contrary, the city of Duluth may, by ordinance, impose an 20.33 additional sales tax of up to one and one-half percent on sales 20.34 transactions which are described in Minnesota Statutes 2000, 20.35 Section 297A.01, Subdivision 3, Clause (c). When the city 20.36 council determines that the taxes imposed under this subdivision 21.1 and under section 26 at a rate of one-half of one percent have 21.2 produced revenue sufficient to pay (1) the debt service on bonds 21.3 in a principal amount of $8,000,000 issued for capital 21.4 improvements to the Duluth Entertainment and Convention Center, 21.5 and (2) debt service on outstanding bonds originally issued in 21.6 the principal amount of $4,970,000 to finance capital 21.7 improvements to the Great Lakes Aquarium since the imposition of 21.8 the taxes at the rate of one and one-half percent, the rate of 21.9 the tax under this subdivision is reduced to one percent. The 21.10 imposition of this tax shall not be subject to voter referendum 21.11 under either state law or city charter provisions. 21.12 [EFFECTIVE DATE.] This section is effective the day after 21.13 the governing body of the city of Duluth and its chief clerical 21.14 officer comply with Minnesota Statutes, section 645.021, 21.15 subdivisions 2 and 3. 21.16 Sec. 2. Laws 1980, chapter 511, section 2, as amended by 21.17 Laws 1998, chapter 389, article 8, section 26, is amended to 21.18 read: 21.19 Sec. 2. [CITY OF DULUTH; TAX ON RECEIPTS BY HOTELS AND 21.20 MOTELS.] 21.21 Notwithstanding Minnesota Statutes, Section 477A.016, or 21.22 any other law, or ordinance, or city charter provision to the 21.23 contrary, the city of Duluth may, by ordinance, impose an 21.24 additional tax of one and one-half percent upon the gross 21.25 receipts from the sale of lodging for periods of less than 30 21.26 days in hotels and motels located in the city. When the city 21.27 council determines that the taxes imposed under this section and 21.28 section 25 at a rate of one-half of one percent have produced 21.29 revenue sufficient to pay (1) the debt service on bonds in a 21.30 principal amount of $8,000,000 issued for capital improvements 21.31 for the Duluth Entertainment and Convention Center, and (2) the 21.32 debt service on outstanding bonds originally issued in the 21.33 principal amount of $4,970,000 to finance capital improvements 21.34 to the Great Lakes Aquarium since the imposition of the taxes at 21.35 the rate of one and one-half percent, the rate of the tax under 21.36 this section is reduced to one percent. The tax shall be 22.1 collected in the same manner as the tax set forth in the Duluth 22.2 city charter, section 54(d), paragraph one. The imposition of 22.3 this tax shall not be subject to voter referendum under either 22.4 state law or city charter provisions. 22.5 [EFFECTIVE DATE.] This section is effective the day after 22.6 the governing body of the city of Duluth and its chief clerical 22.7 officer comply with Minnesota Statutes, section 645.021, 22.8 subdivisions 2 and 3. 22.9 Sec. 3. Laws 1991, chapter 291, article 8, section 27, 22.10 subdivision 3, as amended by Laws 1998, chapter 389, article 8, 22.11 section 28, is amended to read: 22.12 Subd. 3. [USE OF REVENUES.] Revenues received from taxes 22.13 authorized by subdivisions 1 and 2 shall be used by the city to 22.14 pay the cost of collecting the tax and to pay all or a portion 22.15 of the expenses of constructing and operating facilities as part 22.16 of an urban revitalization project in downtown Mankato known as 22.17 Riverfront 2000. Authorized expenses include, but are not 22.18 limited to, acquiring property and paying relocation expenses 22.19 related to the development of Riverfront 2000 and related 22.20 facilities, and securing or paying debt service on bonds or 22.21 other obligations issued to finance the construction of 22.22 Riverfront 2000 and related facilities. For purposes of this 22.23 section, "Riverfront 2000 and related facilities" means a 22.24 civic-convention center, an arena, a riverfront park, a 22.25 technology center and related educational facilities, and all 22.26 publicly owned real or personal property that the governing body 22.27 of the city determines will be necessary to facilitate the use 22.28 of these facilities, including but not limited to parking, 22.29 skyways, pedestrian bridges, lighting, and landscaping. 22.30 Revenues collected each year shall be used to pay 22.31 authorized expenses in the following order of priority: 22.32 (1) cost of collecting the tax; 22.33 (2) annual debt service on principal and interest; 22.34 (3) a reserve balance equal to 105 percent of the debt 22.35 service principal and interest payments for the following year; 22.36 and 23.1 (4) any remaining balance for capital, administrative, and 23.2 operating expenses of the Riverfront 2000 district. 23.3 [EFFECTIVE DATE.] This section is effective the day 23.4 following final enactment. 23.5 Sec. 4. Laws 1991, chapter 291, article 8, section 27, 23.6 subdivision 4, is amended to read: 23.7 Subd. 4. [EXPIRATION OF TAXING AUTHORITY AND EXPENDITURE 23.8 LIMITATION.] The authority granted by subdivisions 1 and 2 to 23.9 the city to impose a sales tax and an excise tax shall expire 23.10 when the principal and interest on any bonds or obligations 23.11 issued to financeconstruction ofRiverfront 2000 and related 23.12 facilities have been paid or at an earlier time as the city 23.13 shall, by ordinance, determine.The total capital,23.14administrative, and operating expenditures payable from bond23.15proceeds and revenues received from the taxes authorized by23.16subdivisions 1 and 2, excluding investment earnings on bond23.17proceeds and revenues, shall not exceed $25,000,000 for23.18Riverfront 2000 and related facilities.23.19 [EFFECTIVE DATE.] This section is effective the day 23.20 following final enactment. 23.21 Sec. 5. Laws 1993, chapter 375, article 9, section 46, 23.22 subdivision 2, as amended by Laws 1997, chapter 231, article 7, 23.23 section 40, and Laws 1998, chapter 389, article 8, section 30, 23.24 is amended to read: 23.25 Subd. 2. [USE OF REVENUES.] Revenues received from the tax 23.26 authorized by subdivision 1 may only be used by the city to pay 23.27 the cost of collecting the tax, and to pay for the following 23.28 projects or to secure or pay any principal, premium, or interest 23.29 on bonds issued in accordance with subdivision 3 for the 23.30 following projects. 23.31 (a) To pay all or a portion of the capital expenses of 23.32 construction, equipment and acquisition costs for the expansion 23.33 and remodeling of the St. Paul Civic Center complex, including 23.34 the demolition of the existing arena and the construction and 23.35 equipping of a new arena. 23.36 (b) The remainder of the funds must be spent for: 24.1 (1) capital projects to further residential, cultural, 24.2 commercial, and economic development in both downtown St. Paul 24.3 and St. Paul neighborhoods. The amount apportioned under this24.4paragraph shall be no less than 60 percent of the revenues24.5derived from the tax each year, except to the extent that a24.6portion of that amount is required to pay debt service on (1)24.7bonds issued for the purposes of paragraph (a) prior to March 1,24.81998; or (2) bonds issued for the purposes of paragraph (a)24.9after March 1, 1998, but only if the city council determines24.10that 40 percent of the revenues derived from the tax together24.11with other revenues pledged to the payment of the bonds,24.12including the proceeds of definitive bonds, is expected to24.13exceed the annual debt service on the bonds; and 24.14 (2) the operating expenses of cultural organizations in the 24.15 city, provided that the amount spent under this clausemay not24.16exceedmust equal ten percent of the total amount spent under 24.17 this paragraph in any year. 24.18 (c) The amount apportioned under paragraph (b) shall be no 24.19 less than 60 percent of the revenues derived from the tax each 24.20 year, except to the extent that a portion of that amount is 24.21 required to pay debt service on (1) bonds issued for the 24.22 purposes of paragraph (a) prior to March 1, 1998; or (2) bonds 24.23 issued for the purposes of paragraph (a) after March 1, 1998, 24.24 but only if the city council determines that 40 percent of the 24.25 revenues derived from the tax together with other revenues 24.26 pledged to the payment of the bonds, including the proceeds of 24.27 definitive bonds, is expected to exceed the annual debt service 24.28 on the bonds. 24.29 (d) If in any year more than 40 percent of the revenue 24.30 derived from the tax authorized by subdivision 1 is used to pay 24.31 debt service on the bonds issued for the purposes of paragraph 24.32 (a) and to fund a reserve for the bonds, the amount of the debt 24.33 service payment that exceeds 40 percent of the revenue must be 24.34 determined for that year. In any year when 40 percent of the 24.35 revenue produced by the sales tax exceeds the amount required to 24.36 pay debt service on the bonds and to fund a reserve for the 25.1 bonds under paragraph (a), the amount of the excess must be made 25.2 available for capital projects to further residential, cultural, 25.3 commercial, and economic development in the neighborhoods and 25.4 downtown until the cumulative amounts determined for all years 25.5 under the preceding sentence have been made available under this 25.6 sentence. The amount made available as reimbursement in the 25.7 preceding sentence is not included in the 60 percent determined 25.8 under paragraph(b)(c). 25.9(d)(e) By January 15 of each odd-numbered year, the mayor 25.10 and the city council must report to the legislature on the use 25.11 of sales tax revenues during the preceding two-year period. 25.12 [EFFECTIVE DATE.] This section is effective for 25.13 distributions after April 30, 2003. 25.14 Sec. 6. Laws 1996, chapter 471, article 2, section 29, is 25.15 amended to read: 25.16 Sec. 29. [CITY OF HERMANTOWN; SALES AND USE TAX.] 25.17 Subdivision 1. [SALES AND USE TAX AUTHORIZED.] (a) 25.18 Notwithstanding Minnesota Statutes, section 477A.016, or any 25.19 other contrary provision of law, ordinance, or city charter, the 25.20 city of Hermantown may, by ordinance, impose an additional sales 25.21 and use tax of up to one percent on salestransactions, storage, 25.22 and use taxable pursuant to Minnesota Statutes, chapter 297A, 25.23 that occur within the city. 25.24 (b) The proceeds of the first one-half of one percent of 25.25 tax imposed under this section must be usedto meet the costs of25.26 by the city for the following projects: 25.27 (1) extending a sewer interceptor line; 25.28 (2) construction of a booster pump station, reservoirs, and 25.29 related improvements to the water system; and 25.30 (3) construction of a police and fire station. 25.31 (c) Revenues received from the remaining one-half of one 25.32 percent of the tax authorized under this section must be used by 25.33 the city to pay all or part of the capital and administrative 25.34 costs of developing, acquiring, constructing, and initially 25.35 furnishing and equipping for the following projects: 25.36 (1) construction of a community recreation center; 26.1 (2) completion of a civic center services complex; 26.2 (3) construction and relocation of a new public works 26.3 facility; 26.4 (4) construction of roads, street improvements, and other 26.5 traffic control measures within the city; and 26.6 (5) acquisition, construction, and improvement of parks and 26.7 trails within the city. 26.8 (d) Authorized expenses include, but are not limited to, 26.9 acquiring property, paying construction, administrative, and 26.10 operating expenses related to the development of the projects 26.11 listed in paragraph (c), paying debt service on bonds or other 26.12 obligations, including lease obligations, issued to finance 26.13 construction, expansion, or improvement of the projects listed 26.14 in paragraph (c), and other compatible uses, including but not 26.15 limited to, parking, lighting, and landscaping. 26.16 Subd. 2. [REFERENDUM.] (a) If the Hermantown city council 26.17 proposes to impose the sales tax authorized by this section, it 26.18 shall conduct a referendum on the issue. 26.19 (b) If the Hermantown city council initially imposes the 26.20 tax at a rate less than one percent and proposes increasing it 26.21 at a later date up to the authorized rate in subdivision 1, it 26.22 shall conduct a referendum on the increase. 26.23 (c) The question of imposing or increasing the tax must be 26.24 submitted to the voters at a special or general election. The 26.25 tax may not be imposed unless a majority of votes cast on the 26.26 question of imposing the tax are in the affirmative. The 26.27 commissioner of revenue shall prepare a suggested form of 26.28 question to be presented at the election. This subdivision 26.29 applies notwithstanding any city charter provision to the 26.30 contrary. 26.31 Subd. 3. [ENFORCEMENT; COLLECTION; AND ADMINISTRATION OF 26.32 TAXES.] A sales tax imposed under this section must be reported 26.33 and paid to the commissioner of revenue with the state sales 26.34 taxes, and be subject to the same penalties, interest, and 26.35 enforcement provisions. The proceeds of the tax, less refunds 26.36 and a proportionate share of the cost of collection, shall be 27.1 remitted at least quarterly to the city. The commissioner shall 27.2 deduct from the proceeds remitted an amount that equals the 27.3 indirect statewide cost as well as the direct and indirect 27.4 department costs necessary to administer, audit, and collect the 27.5 tax. The amount deducted shall be deposited in the state 27.6 general fund. 27.7 Subd. 3a. [BONDING AUTHORITY.] (a) The city may issue 27.8 general obligation bonds under Minnesota Statutes, chapter 475, 27.9 to finance the costs in subdivision 1, paragraph (c). The total 27.10 amount of bonds issued for the projects under subdivision 1, 27.11 paragraph (c), may not exceed $12,900,000 in the aggregate. An 27.12 election to approve the bonds is not required. 27.13 (b) The bonds are not included in computing any debt 27.14 limitation applicable to the city and the levy of taxes under 27.15 Minnesota Statutes, section 475.61, to pay principal of and 27.16 interest on the bonds is not subject to any levy limitation. 27.17 (c) The taxes authorized under this section may be pledged 27.18 to and used for the payment of the bonds and any bonds issued to 27.19 refund them. 27.20 Subd. 4. [TERMINATION.] The portion of the tax authorized 27.21under this sectionto finance the improvements described in 27.22 subdivision 1, paragraph (b), terminates at the later of (1) ten 27.23 years after the date of initial imposition of the tax, or (2) on 27.24 the first day of the second month next succeeding a 27.25 determination by the city council that sufficient funds have 27.26 been received from that portion of the tax dedicated to finance 27.27thethose improvementsdescribed in subdivision 1, clauses (1)27.28to (3),and to prepay or retire at maturity the principal, 27.29 interest, and premium due on any bonds issued for the 27.30 improvements. The portion of the tax authorized to finance the 27.31 improvements described in subdivision 1, paragraph (c), 27.32 terminates when the revenues raised are sufficient to finance 27.33 those improvements, up to an amount equal to $12,900,000 plus 27.34 any interest, premium, and other costs associated with the bonds 27.35 issued under subdivision 3a. The city council may terminate 27.36 this portion of the tax earlier. Any funds remaining after 28.1 completion of the improvements and retirement or redemption of 28.2 the bonds may be placed in the general fund of the city. 28.3 Subd. 5. [LOCAL APPROVAL; EFFECTIVE DATE.] This section is 28.4 effective the day after final enactment, upon compliance with 28.5 Minnesota Statutes, section 645.021, subdivision 3, by the city 28.6 of Hermantown. 28.7 [EFFECTIVE DATE.] This section is effective the day after 28.8 the governing body of the city of Hermantown and its chief 28.9 clerical officer comply with Minnesota Statutes, section 28.10 645.021, subdivisions 2 and 3. 28.11 Sec. 7. Laws 1998, chapter 389, article 8, section 43, 28.12 subdivision 3, is amended to read: 28.13 Subd. 3. [USE OF REVENUES.] Revenues received from the 28.14 taxes authorized by subdivisions 1 and 2 must be used by the 28.15 city to pay for the cost of collecting and administering the 28.16 taxes and to pay for the following projects: 28.17 (1) transportation infrastructure improvements including 28.18bothregional highway and airport improvements; 28.19 (2) improvements to the civic center complex; 28.20 (3) a municipal water, sewer, and storm sewer project 28.21 necessary to improve regional ground water quality; and 28.22 (4) construction of a regional recreation and sports center 28.23 andassociatedother facilities available for both community and 28.24 student use,that are located on state-owned land at or adjacent 28.25 to the Rochester center. 28.26 The total amount of capital expenditures or bonds for these 28.27 projects that may be paid from the revenues raised from the 28.28 taxes authorized in this section may not exceed 28.29$71,500,000$111,500,000. The total amount of capital 28.30 expenditures or bonds for the project in clause (4) that may be 28.31 paid from the revenues raised from the taxes authorized in this 28.32 section may not exceed$20,000,000$28,000,000. 28.33 [EFFECTIVE DATE.] This section is effective the day after 28.34 the governing body of Rochester and its chief clerical officer 28.35 timely complete their compliance with Minnesota Statutes, 28.36 section 645.021, subdivisions 2 and 3. 29.1 Sec. 8. Laws 1998, chapter 389, article 8, section 43, 29.2 subdivision 4, is amended to read: 29.3 Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds 29.4 under Minnesota Statutes, chapter 475, to finance the capital 29.5 expenditure and improvement projects. An election to approve 29.6 the bonds under Minnesota Statutes, section 475.58, may be held 29.7 in combination with the election to authorize imposition of the 29.8 tax under subdivision 1. Whether to permit imposition of the 29.9 tax and issuance of bonds may be posed to the voters as a single 29.10 question. The question must state that the sales tax revenues 29.11 are pledged to pay the bonds, but that the bonds are general 29.12 obligations and will be guaranteed by the city's property taxes. 29.13 (b) The issuance of bonds under this subdivision is not 29.14 subject to Minnesota Statutes, section 275.60. 29.15 (c) The bonds are not included in computing any debt 29.16 limitation applicable to the city, and the levy of taxes under 29.17 Minnesota Statutes, section 475.61, to pay principal of and 29.18 interest on the bonds is not subject to any levy limitation. 29.19 The aggregate principal amount of bonds, plus the aggregate of 29.20 the taxes used directly to pay eligible capital expenditures and 29.21 improvements may not exceed$71,500,000$111,500,000, plus an 29.22 amount equal to the costs related to issuance of the bonds. 29.23 (d) The taxes may be pledged to and used for the payment of 29.24 the bonds and any bonds issued to refund them, only if the bonds 29.25 and any refunding bonds are general obligations of the city. 29.26 [EFFECTIVE DATE.] This section is effective the day after 29.27 the governing body of Rochester and its chief clerical officer 29.28 timely complete their compliance with Minnesota Statutes, 29.29 section 645.021, subdivisions 2 and 3. 29.30 Sec. 9. Laws 1999, chapter 243, article 4, section 18, 29.31 subdivision 1, is amended to read: 29.32 Subdivision 1. [SALES AND USE TAX.] (a) Notwithstanding 29.33 Minnesota Statutes, section297A.48, subdivision 1a,477A.016, 29.34 or any other provision of law, ordinance, or city charter, if 29.35 approved by the city voters at the first municipal general 29.36 election held after the date of final enactment of this act or 30.1 at a special election held November 2, 1999, the city of Proctor 30.2 may impose by ordinance a sales and use tax of up to one-half of 30.3 one percent for the purposes specified in subdivision 3, 30.4 paragraph (a). The provisions of Minnesota Statutes, 30.5 section297A.48297A.99, govern the imposition, administration, 30.6 collection, and enforcement of the tax authorized under this 30.7 subdivision. 30.8 (b) The city of Proctor may impose by ordinance an 30.9 additional sales and use tax of up to one-half of one percent if 30.10 approved by the city voters at a general election or at a 30.11 special election held for this purpose. The revenues received 30.12 from this additional tax must be used for the purposes specified 30.13 in subdivision 3, paragraph (b). 30.14 [EFFECTIVE DATE.] This section is effective the day 30.15 following final enactment, upon compliance by the city of 30.16 Proctor with Minnesota Statutes, section 645.021, subdivision 3. 30.17 Sec. 10. Laws 1999, chapter 243, article 4, section 18, 30.18 subdivision 3, is amended to read: 30.19 Subd. 3. [USE OF REVENUES.] (a) Revenues received from 30.20 taxes authorized by subdivisions 1, paragraph (a), and 2 must be 30.21 used by the city to pay the cost of collecting the taxes and to 30.22 pay for construction and improvement of the following city 30.23 facilities: 30.24 (1) streets; and 30.25 (2) constructing and equipping the Proctor community 30.26 activity center. 30.27 Authorized expenses include, but are not limited to, 30.28 acquiring property, paying construction and operating expenses 30.29 related to the development of an authorized facility, and paying 30.30 debt service on bonds or other obligations, including lease 30.31 obligations, issued to finance the construction, expansion, or 30.32 improvement of an authorized facility. The capital expenses for 30.33 all projects authorized under this paragraph that may be paid 30.34 with these taxes is limited to $3,600,000, plus an amount equal 30.35 to the costs related to issuance of the bonds. 30.36 (b) Revenues received from taxes authorized by subdivision 31.1 1, paragraph (b), must be used by the city to pay the cost of 31.2 collecting the taxes and for construction and improvements of 31.3 city streets, public utilities, sidewalks, bikeways, and trails. 31.4 [EFFECTIVE DATE.] This section is effective the day 31.5 following final enactment, upon compliance by the city of 31.6 Proctor with Minnesota Statutes, section 645.021, subdivision 3. 31.7 Sec. 11. Laws 1999, chapter 243, article 4, section 18, 31.8 subdivision 4, is amended to read: 31.9 Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds 31.10 under Minnesota Statutes, chapter 475, to finance the capital 31.11 expenditure and improvement projects described in subdivision 31.12 3. An election to approve the bonds under Minnesota Statutes, 31.13 section 475.58, is not required. 31.14 (b) The issuance of bonds under this subdivision is not 31.15 subject to Minnesota Statutes, sections 275.60 and279.61275.61. 31.16 (c) The bonds are not included in computing any debt 31.17 limitation applicable to the city, and the levy of taxes under 31.18 Minnesota Statutes, section 475.61, to pay principal of and 31.19 interest on the bonds is not subject to any levy limitation. 31.20 (d) For projects described in subdivision 3, paragraph (a), 31.21 the aggregate principal amount of bonds, plus the aggregate of 31.22 the taxes used directly to pay eligible capital expenditures and 31.23 improvements, may not exceed $3,600,000, plus an amount equal to 31.24 the costs related to issuance of the bonds, including interest 31.25 on the bonds. For projects described in subdivision 3, 31.26 paragraph (b), the aggregate principal amount of bonds may not 31.27 exceed $7,200,000, plus an amount equal to the costs related to 31.28 issuance of the bonds, including interest on the bonds. 31.29 (e) The sales and use and excise taxes authorized in this 31.30 section may be pledged to and used for the payment of the bonds 31.31 and any bonds issued to refund them only if the bonds and any 31.32 refunding bonds are general obligations of the city. 31.33 [EFFECTIVE DATE.] This section is effective the day 31.34 following final enactment, upon compliance by the city of 31.35 Proctor with Minnesota Statutes, section 645.021, subdivision 3. 31.36 Sec. 12. [CITY OF BEAVER BAY; TAXES AUTHORIZED.] 32.1 Subdivision 1. [SALES AND USE TAXES.] Notwithstanding 32.2 Minnesota Statutes, section 477A.016, or any other provision of 32.3 law or ordinance, if approved by the voters of the city at the 32.4 next general election held after the date of final enactment of 32.5 this act, the city of Beaver Bay may impose by ordinance a sales 32.6 and use tax at a rate of up to one percent for the purposes 32.7 specified in subdivision 2. The provisions of Minnesota 32.8 Statutes, section 297A.99, govern the imposition, 32.9 administration, collection, and enforcement of the tax 32.10 authorized under this subdivision. 32.11 Subd. 2. [USE OF REVENUES.] The revenues received from 32.12 taxes authorized by subdivision 1 must be used to pay the bonded 32.13 indebtedness on the city community building and to provide 32.14 funding for recreational facilities, the upgrading of the water 32.15 and sewer system, upgrading and replacement of fire equipment, 32.16 and improvement of streets. 32.17 Subd. 3. [TERMINATION OF TAXES.] The authority granted 32.18 under subdivision 1 to the city of Beaver Bay to impose sales 32.19 and use taxes expires when the city council determines that the 32.20 amount of revenue received to pay the costs of the projects 32.21 described in subdivision 2 shall meet or exceed $1,500,000. Any 32.22 funds remaining after completion of the projects may be placed 32.23 in the general fund of the city. The tax imposed under 32.24 subdivision 1 may expire at an earlier time if the city so 32.25 determines by ordinance. 32.26 [EFFECTIVE DATE.] This section is effective the day after 32.27 the governing body of the city of Beaver Bay and its chief 32.28 clerical officer timely comply with Minnesota Statutes, section 32.29 645.021, subdivisions 2 and 3. 32.30 Sec. 13. [CITY OF BEMIDJI.] 32.31 Subdivision 1. [SALES AND USE TAX AUTHORIZED.] 32.32 Notwithstanding Minnesota Statutes, section 477A.016, or any 32.33 other provision of law, ordinance, or city charter, pursuant to 32.34 the approval of the city voters at the general election held on 32.35 November 5, 2002, the city of Bemidji may impose by ordinance a 32.36 sales and use tax of one-half of one percent for the purposes 33.1 specified in subdivision 2. The provisions of Minnesota 33.2 Statutes, section 297A.99, govern the imposition, 33.3 administration, collection, and enforcement of the tax 33.4 authorized under this subdivision. 33.5 Subd. 2. [USE OF REVENUES.] Revenues received from the tax 33.6 authorized by subdivision 1 must be used for the cost of 33.7 collecting and administering the tax and to pay all or part of 33.8 the capital or administrative costs of the acquisition, 33.9 construction, and improvement of parks and trails within the 33.10 city, as provided for in the city of Bemidji's parks, open space 33.11 and trail system plan, adopted by the Bemidji city council on 33.12 November 21, 2001. Authorized expenses include, but are not 33.13 limited to, acquiring property, paying construction expenses 33.14 related to the development of these facilities and improvements, 33.15 and securing and paying debt service on bonds or other 33.16 obligations issued to finance acquisition, construction, 33.17 improvement, or development of parks and trails within the city 33.18 of Bemidji. 33.19 Subd. 3. [BONDS.] Pursuant to the approval of the city 33.20 voters at the general election held on November 5, 2002, the 33.21 city of Bemidji may issue without additional election general 33.22 obligation bonds of the city in an amount not to exceed 33.23 $9,826,000 to pay capital and administrative expenses for the 33.24 acquisition, construction, improvement, and development of parks 33.25 and trails as specified in subdivision 2. The debt represented 33.26 by the bonds must not be included in computing any debt 33.27 limitations applicable to the city, and the levy of taxes 33.28 required by Minnesota Statutes, section 475.61, to pay the 33.29 principal of any interest on the bonds must not be subject to 33.30 any levy limitations or be included in computing or applying any 33.31 levy limitation applicable to the city. 33.32 Subd. 4. [TERMINATION OF TAX.] The tax imposed under 33.33 subdivision 1 expires when the Bemidji city council determines 33.34 that the amount described in subdivision 3 has been received 33.35 from the tax to finance the capital and administrative costs for 33.36 acquisition, construction, improvement, and development of parks 34.1 and trails and to repay or retire at maturity the principal, 34.2 interest, and premium due on any bonds issued for the park and 34.3 trail improvements under subdivision 3. Any funds remaining 34.4 after completion of the park and trail improvements and 34.5 retirement or redemption of the bonds may be placed in the 34.6 general fund of the city. The tax imposed under subdivision 1 34.7 may expire at an earlier time if the city so determines by 34.8 ordinance. 34.9 Subd. 5. [EXEMPTION.] Products and services used for 34.10 repair or maintenance of aircraft are exempt from the taxes 34.11 imposed under this section. 34.12 [EFFECTIVE DATE.] This section is effective the day after 34.13 compliance by the governing body of the city of Bemidji with 34.14 Minnesota Statutes, section 645.021, subdivision 3. 34.15 Sec. 14. [CITY OF CLOQUET; TAXES AUTHORIZED.] 34.16 Subdivision 1. [SALES AND USE TAX.] Notwithstanding 34.17 Minnesota Statutes, section 477A.016, or any other provision of 34.18 law, ordinance, or city charter, if approved by the voters 34.19 pursuant to Minnesota Statutes, section 297A.99, the city of 34.20 Cloquet may impose by ordinance a sales and use tax of up to 34.21 one-half of one percent for the purpose specified in subdivision 34.22 3. The provisions of Minnesota Statutes, section 297A.99, 34.23 govern the imposition, administration, collection, and 34.24 enforcement of the tax authorized under this subdivision. 34.25 Subd. 2. [EXCISE TAX AUTHORIZED.] Notwithstanding 34.26 Minnesota Statutes, section 477A.016, or any other provision of 34.27 law, ordinance, or city charter, the city of Cloquet may impose 34.28 by ordinance, for the purposes specified in subdivision 3, an 34.29 excise tax of up to $20 per motor vehicle, as defined by 34.30 ordinance, purchased or acquired from any person engaged within 34.31 the city in the business of selling motor vehicles at retail. 34.32 Subd. 3. [USE OF REVENUES.] Revenues received from taxes 34.33 authorized by subdivisions 1 and 2 must be used by the city to 34.34 pay the cost of collecting the taxes and to pay for the 34.35 following projects: 34.36 (1) construction and implementation of riverfront task 35.1 force park improvements including Veteran's Park; and 35.2 (2) extension of water and sewer lines and other 35.3 improvements to city infrastructure necessary for construction 35.4 of a city industrial park. 35.5 Authorized expenses include, but are not limited to, 35.6 acquiring property and paying construction expenses related to 35.7 these improvements, and paying debt service on bonds or other 35.8 obligations issued to finance acquisition and construction of 35.9 these improvements. 35.10 Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds 35.11 under Minnesota Statutes, chapter 475, to pay capital and 35.12 administrative expenses for the improvements described in 35.13 subdivision 3 in an amount that does not exceed $6,000,000. An 35.14 election to approve the bonds under Minnesota Statutes, section 35.15 475.58, is not required. 35.16 (b) The issuance of bonds under this subdivision is not 35.17 subject to Minnesota Statutes, sections 275.60 and 275.61. 35.18 (c) The debt represented by the bonds is not included in 35.19 computing any debt limitation applicable to the city, and any 35.20 levy of taxes under Minnesota Statutes, section 475.61, to pay 35.21 principal of and interest on the bonds is not subject to any 35.22 levy limitation. 35.23 Subd. 5. [TERMINATION OF TAXES.] The taxes imposed under 35.24 subdivisions 1 and 2 expire at the earlier of (1) 12 years, or 35.25 (2) when the city council determines that sufficient funds have 35.26 been received from the taxes to finance the capital and 35.27 administrative costs of the improvements described in 35.28 subdivision 3, plus the additional amount needed to pay the 35.29 costs related to issuance of bonds under subdivision 4, 35.30 including interest on the bonds. Any funds remaining after 35.31 completion of the project and retirement or redemption of the 35.32 bonds may be placed in the general fund of the city. The taxes 35.33 imposed under subdivisions 1 and 2 may expire at an earlier time 35.34 if the city so determines by ordinance. 35.35 [EFFECTIVE DATE.] This section is effective the day after 35.36 the governing body of the city of Cloquet and its chief clerical 36.1 officer timely comply with Minnesota Statutes, section 645.021, 36.2 subdivisions 2 and 3. 36.3 Sec. 15. [CITY OF HOPKINS; FOOD AND BEVERAGE TAX.] 36.4 Subdivision 1. [SALES AND USE TAX.] Notwithstanding 36.5 Minnesota Statutes, section 477A.016, or any ordinance, city 36.6 charter, or other provision of law, the city of Hopkins may, by 36.7 ordinance, impose a sales tax of up to one percent on the gross 36.8 receipts of all food and beverages, including on-sale 36.9 intoxicating beverages and fermented malt beverages, sold at 36.10 licensed on-sale liquor establishments, restaurants, or other 36.11 places of refreshment located within the geographic boundaries 36.12 of the city. The imposition of this tax is subject to the 36.13 referendum requirement in subdivision 3. 36.14 Subd. 2. [USE OF PROCEEDS FROM FOOD AND BEVERAGE TAX.] The 36.15 proceeds of any tax imposed under subdivision 1 shall be used by 36.16 the city to fund public arts purposes. Authorized expenses 36.17 include, but are not limited to, expenses related to public art 36.18 facilities, community or public arts projects, or purchase or 36.19 acquisition of art for public purposes. 36.20 Subd. 3. [REFERENDUM.] The tax must not be imposed until 36.21 it has been submitted to the voters at a general or special 36.22 election and a majority of votes cast on the question of 36.23 approving the imposition of the tax is in the affirmative. 36.24 Subd. 4. [ENFORCEMENT, COLLECTION, AND ADMINISTRATION OF 36.25 THE TAX.] The tax shall be collected and administered in the 36.26 same manner as general local sales taxes under Minnesota 36.27 Statutes, section 297A.99, subdivision 9. 36.28 Subd. 5. [EXPIRATION.] The tax imposed under this section 36.29 expires five years after it first becomes effective. 36.30 [EFFECTIVE DATE.] This section is effective upon approval 36.31 by the city of Hopkins city council and compliance with 36.32 Minnesota Statutes, section 645.021, subdivision 3. 36.33 Sec. 16. [LODGING TAX; ITASCA COUNTY AUTHORITY.] 36.34 Notwithstanding Minnesota Statutes, section 469.190, 36.35 subdivisions 1 and 4, no town located in Itasca county may 36.36 impose the local lodging tax authorized in Minnesota Statutes, 37.1 section 469.190, but the county of Itasca may impose the local 37.2 lodging tax authorized in that section in all towns and 37.3 unorganized territories within the county. Any existing taxes 37.4 imposed by a town in that county will expire the day that a 37.5 county tax is imposed under this section. 37.6 If the county board exercises the authority under this 37.7 section, it must determine by resolution that imposition of the 37.8 tax is in the county's interest. The resolution is subject to 37.9 the same notice and reverse referendum requirements that would 37.10 apply under Minnesota Statutes, section 469.190, subdivision 5, 37.11 if the county was only imposing the tax in an unorganized 37.12 territory. The provisions of Minnesota Statutes, section 37.13 469.190, subdivisions 2, 3, 6, and 7, also apply to a tax 37.14 imposed under this section. 37.15 [EFFECTIVE DATE.] This section is effective the day after 37.16 the governing body of Itasca county and its chief clerical 37.17 officer comply with Minnesota Statutes, section 645.021, 37.18 subdivisions 2 and 3. 37.19 Sec. 17. [CITY OF MEDFORD; SALES AND USE TAX.] 37.20 Subdivision 1. [SALES AND USE TAX AUTHORIZED.] 37.21 Notwithstanding Minnesota Statutes, section 477A.016, or any 37.22 other provision of law, ordinance, or city charter, the city of 37.23 Medford may, by ordinance, impose a sales and use tax of 37.24 one-half of one percent for the purposes specified in 37.25 subdivision 2. Except as otherwise specifically provided, the 37.26 provisions of Minnesota Statutes, section 297A.99, govern the 37.27 imposition, administration, collection, and enforcement of the 37.28 tax authorized under this subdivision. 37.29 Subd. 2. [USE OF REVENUES.] The proceeds of the tax 37.30 imposed under this section must be used to pay up to $5,000,000 37.31 in costs related to improving the city's wastewater system and 37.32 wastewater treatment plant. 37.33 Subd. 3. [REFERENDUM.] If the Medford city council 37.34 proposes to impose the tax authorized by this section, the 37.35 question of imposing the tax must be submitted to the voters at 37.36 the next general election. The tax may not be imposed unless 38.1 the majority of votes cast on the question of imposing the tax 38.2 are in the affirmative. The commissioner of revenue shall 38.3 prepare a suggested form of the question to be presented at the 38.4 election. The question must state that the sales tax revenues 38.5 would be pledged to pay any bonds issued under subdivision 4 and 38.6 that these bonds are guaranteed by the city's property taxes. 38.7 Subd. 4. [BONDING AUTHORITY.] (a) The city may issue bonds 38.8 under Minnesota Statutes, chapter 475, to finance the capital 38.9 expenditure and improvement projects authorized under 38.10 subdivision 2. The total amount of bonds issued for the 38.11 projects listed in subdivision 2 may not exceed $5,000,000 in 38.12 aggregate. An election to approve the bonds, as required under 38.13 Minnesota Statutes, section 475.58, is not required. 38.14 (b) The issuance of the bonds under this subdivision is not 38.15 subject to Minnesota Statutes, sections 275.60 and 275.61. 38.16 (c) The bonds are not included in computing any debt 38.17 limitation applicable to the city, and the levy of taxes under 38.18 Minnesota Statutes, section 475.61, to pay the principal of and 38.19 interest on the bonds is not subject to any levy limitation. 38.20 (d) The taxes authorized under this section may be pledged 38.21 to and used for the payment of the bonds and any bonds issued to 38.22 refund them only if the bonds and any refunding bonds are 38.23 general obligations of the city. 38.24 Subd. 5. [TERMINATION OF TAXES.] The taxes imposed under 38.25 this section expire at the earlier of (1) 20 years after the 38.26 taxes are first imposed, or (2) when the city council first 38.27 determines that the amount of revenues raised to pay for the 38.28 projects under subdivision 2 shall meet or exceed the sum of 38.29 $5,000,000, plus an amount equal to the costs related to the 38.30 issuance of bonds under subdivision 4. Any funds remaining 38.31 after completion of the projects and retirement or redemption of 38.32 the bonds may be placed in the general funds of the city. 38.33 [EFFECTIVE DATE.] This section is effective the day after 38.34 compliance with the governing body of the city of Medford with 38.35 Minnesota Statutes, section 645.021, subdivision 3. 38.36 Sec. 18. [CITY OF NEWPORT; LODGING TAX.] 39.1 Subdivision 1. [LODGING TAX.] Notwithstanding Minnesota 39.2 Statutes, section 477A.016, or any ordinance, city charter, or 39.3 other provision of law, the city of Newport may, by ordinance, 39.4 impose a tax of up to four percent upon the gross receipts from 39.5 the sale of lodging for periods of less than 30 days in hotels 39.6 and motels located in the city. The tax does not apply to the 39.7 furnishing of lodging by a business having less than 25 lodging 39.8 rooms. The total amount of taxes imposed under this section and 39.9 under Minnesota Statutes, section 469.190, shall not exceed 39.10 three percent. 39.11 Subd. 2. [USE OF PROCEEDS.] The proceeds of any tax 39.12 imposed in subdivision 1 shall be used by the city to fund 39.13 economic development and redevelopment of the city. Authorized 39.14 expenses include, but are not limited to, acquisition and 39.15 development costs of open space, parks, and trails. 39.16 Subd. 3. [ENFORCEMENT, COLLECTION, AND 39.17 ADMINISTRATION.] The tax shall be collected and administered in 39.18 the same manner as local lodging taxes under Minnesota Statutes, 39.19 section 469.190. 39.20 [EFFECTIVE DATE.] This section is effective upon approval 39.21 by the Newport city council and compliance with Minnesota 39.22 Statutes, section 645.021, subdivision 3. 39.23 Sec. 19. [CITY OF PARK RAPIDS.] 39.24 Subdivision 1. [SALES AND USE TAX AUTHORIZED.] 39.25 Notwithstanding Minnesota Statutes, section 477A.016, or any 39.26 other provision of law, ordinance, or city charter, pursuant to 39.27 the approval of the city voters at the next general election or 39.28 at a special election held for this purpose, the city of Park 39.29 Rapids may impose by ordinance a sales and use tax of one 39.30 percent for the purposes specified in subdivision 2. The 39.31 provisions of Minnesota Statutes, section 297A.99, govern the 39.32 imposition, administration, collection, and enforcement of the 39.33 tax authorized under this subdivision. 39.34 Subd. 2. [USE OF REVENUES.] Revenues received from the tax 39.35 authorized by subdivision 1 must be used for the cost of 39.36 collecting and administering the tax and to pay all or part of 40.1 the capital or administrative costs of the development, 40.2 acquisition, construction, and improvement of the following 40.3 projects: 40.4 (1) two-thirds of the cost of construction and operation of 40.5 a community center that may include a senior citizen center, 40.6 fitness center, swimming pool, meeting rooms, indoor track, and 40.7 racquetball, basketball, and tennis courts, provided that an 40.8 amount equal to one-third of the cost of construction is 40.9 received from private sources; 40.10 (2) capital improvement projects including, but not limited 40.11 to, installation of water, sewer, storm sewer, street 40.12 improvements, new city water tower and well, costs related to 40.13 improvements to marked trunk highway 34; and 40.14 (3) park improvements. 40.15 Authorized expenses include, but are not limited to, 40.16 acquiring property, paying construction expenses related to the 40.17 development of these facilities and improvements, and securing 40.18 and paying debt service on bonds or other obligations issued to 40.19 finance acquisition, construction, improvement, or development. 40.20 Subd. 3. [BONDS.] Pursuant to the approval of the city 40.21 voters to impose the tax authorized in subdivision 1, the city 40.22 of Park Rapids may issue without an additional election general 40.23 obligation bonds of the city to pay capital and administrative 40.24 expenses for the acquisition, construction, improvement, and 40.25 development of the projects specified in subdivision 2. The 40.26 debt represented by the bonds must not be included in computing 40.27 any debt limitations applicable to the city, and the levy of 40.28 taxes required by Minnesota Statutes, section 475.61, to pay the 40.29 principal or any interest on the bonds must not be subject to 40.30 any levy limitations or be included in computing or applying any 40.31 levy limitation applicable to the city. 40.32 Subd. 4. [TERMINATION OF TAX.] The tax imposed under 40.33 subdivision 1 expires the earlier of July 1, 2023, or when the 40.34 city council determines that sufficient revenues have been 40.35 received to retire the bonds in subdivision 3. Any funds 40.36 remaining after completion of the projects specified in 41.1 subdivision 2 and retirement or redemption of the bonds may be 41.2 placed in the general fund of the city. The tax imposed under 41.3 subdivision 1 may expire at an earlier time if the city so 41.4 determines by ordinance. 41.5 [EFFECTIVE DATE.] This section is effective the day after 41.6 compliance by the governing body of the city of Park Rapids with 41.7 Minnesota Statutes, section 645.021, subdivision 3. 41.8 Sec. 20. [CITY OF CLEARWATER.] 41.9 Subdivision 1. [SALES AND USE TAX AUTHORIZED.] 41.10 Notwithstanding Minnesota Statutes, section 477A.016, or any 41.11 other provision of law, ordinance, or city charter, pursuant to 41.12 the approval of the city voters at the next general election or 41.13 at a special election held for this purpose, the city of 41.14 Clearwater may impose by ordinance a sales and use tax of 41.15 one-half of one percent for the purposes specified in 41.16 subdivision 2. The provisions of Minnesota Statutes, section 41.17 297A.99, govern the imposition, administration, collection, and 41.18 enforcement of the tax authorized under this subdivision. 41.19 Subd. 2. [USE OF REVENUES.] Revenues received from the tax 41.20 authorized by subdivision 1 must be used for the cost of 41.21 collecting and administering the tax and to pay all or part of 41.22 the capital or administrative costs of the development, 41.23 acquisition, construction, and improvement of parks, trails, 41.24 parkland, open space, and land and buildings for a regional 41.25 community and recreation center. Authorized expenses include, 41.26 but are not limited to, acquiring property, paying construction 41.27 expenses related to the development of these facilities and 41.28 improvements, and securing and paying debt service on bonds or 41.29 other obligations issued to finance acquisition, construction, 41.30 improvement, or development. 41.31 Subd. 3. [BONDS.] Pursuant to the approval of the city 41.32 voters to impose the tax authorized in subdivision 1, the city 41.33 of Clearwater may issue without an additional election general 41.34 obligation bonds of the city in an amount not to exceed 41.35 $3,000,000 to pay capital and administrative expenses for the 41.36 acquisition, construction, improvement, and development of the 42.1 projects specified in subdivision 2. The debt represented by 42.2 the bonds must not be included in computing any debt limitations 42.3 applicable to the city, and the levy of taxes required by 42.4 Minnesota Statutes, section 475.61, to pay the principal or any 42.5 interest on the bonds must not be subject to any levy 42.6 limitations or be included in computing or applying any levy 42.7 limitation applicable to the city. 42.8 Subd. 4. [TERMINATION OF TAX.] The tax imposed under 42.9 subdivision 1 expires when the Clearwater city council 42.10 determines that the amount described in subdivision 3 has been 42.11 received from the tax to finance the capital and administrative 42.12 costs for acquisition, construction, improvement, and 42.13 development of the projects specified in subdivision 2 and to 42.14 repay or retire at maturity the principal, interest, and premium 42.15 due on any bonds issued for the projects under subdivision 3. 42.16 Any funds remaining after completion of the projects specified 42.17 in subdivision 2 and retirement or redemption of the bonds may 42.18 be placed in the general fund of the city. The tax imposed 42.19 under subdivision 1 may expire at an earlier time if the city so 42.20 determines by ordinance. 42.21 [EFFECTIVE DATE.] This section is effective the day after 42.22 compliance by the governing body of the city of Clearwater with 42.23 Minnesota Statutes, section 645.021, subdivision 3. 42.24 ARTICLE 3 42.25 PROPERTY TAX 42.26 Section 1. Minnesota Statutes 2002, section 216B.2424, 42.27 subdivision 5, is amended to read: 42.28 Subd. 5. [MANDATE.] (a) A public utility, as defined in 42.29 section 216B.02, subdivision 4, that operates a nuclear-powered 42.30 electric generating plant within this state must construct and 42.31 operate, purchase, or contract to construct and operate (1) by 42.32 December 31, 1998, 50 megawatts of electric energy installed 42.33 capacity generated by farm-grown closed-loop biomass scheduled 42.34 to be operational by December 31, 2001; and (2) by December 31, 42.35 1998, an additional 75 megawatts of installed capacity so 42.36 generated scheduled to be operational by December 31, 2002. 43.1 (b) Of the 125 megawatts of biomass electricity installed 43.2 capacity required under this subdivision, no more than 50 43.3 megawatts of this capacity may be provided by a facility that 43.4 uses poultry litter as its primary fuel source and any such 43.5 facility: 43.6 (1) need not use biomass that complies with the definition 43.7 in subdivision 1; 43.8 (2) must enter into a contract with the public utility for 43.9 such capacity, that has an average purchase price per megawatt 43.10 hour over the life of the contract that is equal to or less than 43.11 the average purchase price per megawatt hour over the life of 43.12 the contract in contracts approved by the public utilities 43.13 commission before April 1, 2000, to satisfy the mandate of this 43.14 section, and file that contract with the public utilities 43.15 commission prior to September 1, 2000; and 43.16 (3) must schedule such capacity to be operational by 43.17 December 31, 2002. 43.18 (c) Of the total 125 megawatts of biomass electric energy 43.19 installed capacity required under this section, no more than 75 43.20 megawatts may be provided by a single project. 43.21 (d) Of the 75 megawatts of biomass electric energy 43.22 installed capacity required under paragraph (a), clause (2), no 43.23 more than 25 megawatts of this capacity may be provided by a St. 43.24 Paul district heating and cooling system cogeneration facility 43.25 utilizing waste wood as a primary fuel source. The St. Paul 43.26 district heating and cooling system cogeneration facility need 43.27 not use biomass that complies with the definition in subdivision 43.28 1. 43.29 (e) The public utility must accept and consider on an equal 43.30 basis with other biomass proposals: 43.31 (1) a proposal to satisfy the requirements of this section 43.32 that includes a project that exceeds the megawatt capacity 43.33 requirements of either paragraph (a), clause (1) or (2), and 43.34 that proposes to sell the excess capacity to the public utility 43.35 or to other purchasers; and 43.36 (2) a proposal for a new facility to satisfy more than ten 44.1 but not more than 20 megawatts of the electrical generation 44.2 requirements by a small business-sponsored independent power 44.3 producer facility to be located within the northern quarter of 44.4 the state, which means the area located north of Constitutional 44.5 Route No. 8 as described in section 161.114, subdivision 2, and 44.6 that utilizes biomass residue wood, sawdust, bark, chipped wood, 44.7 or brush to generate electricity. A facility described in this 44.8 clause is not required to utilize biomass complying with the 44.9 definition in subdivision 1, but must have the capacity required 44.10 by this clause operational by December 31,20022005. 44.11 (f) If a public utility files a contract with the 44.12 commission for electric energy installed capacity that uses 44.13 poultry litter as its primary fuel source, the commission must 44.14 do a preliminary review of the contract to determine if it meets 44.15 the purchase price criteria provided in paragraph (b), clause 44.16 (2), of this subdivision. The commission shall perform its 44.17 review and advise the parties of its determination within 30 44.18 days of filing of such a contract by a public utility. A public 44.19 utility may submit by September 1, 2000, a revised contract to 44.20 address the commission's preliminary determination. 44.21 (g) The commission shall finally approve, modify, or 44.22 disapprove no later than July 1, 2001, all contracts submitted 44.23 by a public utility as of September 1, 2000, to meet the mandate 44.24 set forth in this subdivision. 44.25 (h) If a public utility subject to this section exercises 44.26 an option to increase the generating capacity of a project in a 44.27 contract approved by the commission prior to April 25, 2000, to 44.28 satisfy the mandate in this subdivision, the public utility must 44.29 notify the commission by September 1, 2000, that it has 44.30 exercised the option and include in the notice the amount of 44.31 additional megawatts to be generated under the option 44.32 exercised. Any review by the commission of the project after 44.33 exercise of such an option shall be based on the same criteria 44.34 used to review the existing contract. 44.35 (i) A facility specified in this subdivision qualifies for 44.36 exemption from property taxation under section 272.02, 45.1 subdivision 43. 45.2 [EFFECTIVE DATE.] This section is effective the day 45.3 following final enactment. 45.4 Sec. 2. Minnesota Statutes 2002, section 270B.12, is 45.5 amended by adding a subdivision to read: 45.6 Subd. 13. [COUNTY ASSESSORS; CLASS 1B HOMESTEADS.] The 45.7 commissioner may disclose to a county assessor, and to the 45.8 assessor's designated agents or employees, a listing of parcels 45.9 of property qualifying for the class 1b property tax 45.10 classification under section 273.13, subdivision 22. 45.11 [EFFECTIVE DATE.] This section is effective the day 45.12 following final enactment. 45.13 Sec. 3. Minnesota Statutes 2002, section 272.02, 45.14 subdivision 26, is amended to read: 45.15 Subd. 26. [LOW-INCOME HOUSING.] A structure that is 45.16 situated on real property is exempt if it is used for: 45.17 (i) housing for the elderly or for low- and moderate-income 45.18 families as defined in Title II of the National Housing Act, as 45.19 amended through December 31, 1990, and funded by a direct 45.20 federal loan or federally insured loan made pursuant to Title II 45.21 of the act; or 45.22 (ii) housing lower income families or elderly or 45.23 handicapped persons, as defined in Section 8 of the United 45.24 States Housing Act of 1937, as amended. 45.25 In order for a structure to be exempt under item (i) or 45.26 (ii), it must also meet each of the following criteria: 45.27 (A) is owned by an entity which is operated as a nonprofit 45.28 corporation organized under chapter 317A; 45.29 (B) is owned by an entity which has not entered into a 45.30 housing assistance payments contract under Section 8 of the 45.31 United States Housing Act of 1937, or, if the entity which owns 45.32 the structure has entered into a housing assistance payments 45.33 contract under Section 8 of the United States Housing Act of 45.34 1937, the contract provides assistance for less than 90 percent 45.35 of the dwelling units in the structure, excluding dwelling units 45.36 intended for management or maintenance personnel; 46.1 (C) operates an on-site congregate dining program in which 46.2 participation by residents is mandatory, and provides assisted 46.3 living or similar social and physical support services for 46.4 residents; and 46.5 (D)(1) was not assessed and did not pay tax under chapter 46.6 273 prior to the 1991 levy, while meeting the other conditions 46.7 of this subdivision; or 46.8 (2) is physically attached to a church exempt from taxation 46.9 under subdivision 6, and not less than 30 percent of the units 46.10 therein are occupied by individuals or families whose annual 46.11 income does not exceed 50 percent of the median family income, 46.12 as most recently established by the United States Department of 46.13 Housing and Urban Development for the applicable standard 46.14 metropolitan statistical area, adjusted for family size. 46.15 An exemption under this subdivision remains in effect for 46.16 taxes levied in each year or partial year of the term of its 46.17 permanent financing. 46.18 [EFFECTIVE DATE.] This section is effective the day 46.19 following final enactment. 46.20 Sec. 4. Minnesota Statutes 2002, section 272.02, 46.21 subdivision 31, is amended to read: 46.22 Subd. 31. [BUSINESS INCUBATOR PROPERTY.] Property owned by 46.23 a nonprofit charitable organization that qualifies for tax 46.24 exemption under section 501(c)(3) of the Internal Revenue Code 46.25 of 1986, as amended through December 31, 1997, that is intended 46.26 to be used as a business incubator in a high-unemployment 46.27 county, is exempt. As used in this subdivision, a "business 46.28 incubator" is a facility used for the development of nonretail 46.29 businesses, offering access to equipment, space, services, and 46.30 advice to the tenant businesses, for the purpose of encouraging 46.31 economic development, diversification, and job creation in the 46.32 area served by the organization, and "high-unemployment county" 46.33 is a county that had an average annual unemployment rate of 7.9 46.34 percent or greater in 1997. Property that qualifies for the 46.35 exemption under this subdivision is limited to no more than two 46.36 contiguous parcels and structures that do not exceed in the 47.1 aggregate 40,000 square feet. This exemption expires after 47.2 taxes payable in20052011. 47.3 Sec. 5. Minnesota Statutes 2002, section 272.02, 47.4 subdivision 47, is amended to read: 47.5 Subd. 47. [POULTRY LITTER BIOMASS GENERATION FACILITY; 47.6 PERSONAL PROPERTY.] Notwithstanding subdivision 9, clause (a), 47.7 attached machinery and other personal property which is part of 47.8 an electrical generating facility that meets the requirements of 47.9 this subdivision is exempt. At the time of construction, the 47.10 facility must: 47.11 (1) be designed to utilize poultry litter as a primary fuel 47.12 source; and 47.13 (2) be constructed for the purpose of generating power at 47.14 the facility that will be sold pursuant to a contract approved 47.15 by the public utilities commission in accordance with the 47.16 biomass mandate imposed under section 216B.2424. 47.17 Construction of the facility must be commenced after 47.18 January 1,20002003, and before December 31,20022003. 47.19 Property eligible for this exemption does not include electric 47.20 transmission lines and interconnections or gas pipelines and 47.21 interconnections appurtenant to the property or the facility. 47.22 [EFFECTIVE DATE.] This section is effective for taxes 47.23 levied in 2004, payable in 2005, and thereafter. 47.24 Sec. 6. Minnesota Statutes 2002, section 272.02, 47.25 subdivision 53, is amended to read: 47.26 Subd. 53. [ELECTRIC GENERATION FACILITY; PERSONAL 47.27 PROPERTY.] Notwithstanding subdivision 9, clause (a), attached 47.28 machinery and other personal property which is part of a 3.2 47.29 megawatt run-of-the-river hydroelectric generation facility and 47.30 that meets the requirements of this subdivision is exempt. At 47.31 the time of construction, the facility must: 47.32 (1) utilize two turbine generators at a dam site existing 47.33 on March 31, 1994; 47.34 (2) be located on publicly owned land and within 1,500 feet 47.35 of a 13.8 kilovolt distribution substation; and 47.36 (3) be eligible to receive a renewable energy production 48.1 incentive payment under section 216C.41. 48.2 Construction of the facility must be commenced after 48.3 January 1, 2002, and before January 1,20042005. Property 48.4 eligible for this exemption does not include electric 48.5 transmission lines and interconnections or gas pipelines and 48.6 interconnections appurtenant to the property or the facility. 48.7 Sec. 7. Minnesota Statutes 2002, section 272.02, is 48.8 amended by adding a subdivision to read: 48.9 Subd. 56. [ELECTRIC GENERATION FACILITY PERSONAL 48.10 PROPERTY.] (a) Notwithstanding subdivision 9, clause (a), 48.11 attached machinery and other personal property which is part of 48.12 a combined-cycle combustion-turbine electric generation facility 48.13 that exceeds 150 megawatts of installed capacity and that meets 48.14 the requirements of this subdivision is exempt. At the time of 48.15 construction, the facility must: 48.16 (1) utilize natural gas as a primary fuel; 48.17 (2) be owned by an electric generation and transmission 48.18 cooperative; 48.19 (3) be located within ten miles of parallel existing 48.20 24-inch and 30-inch natural gas pipelines and a 345-kilovolt 48.21 high-voltage electric transmission line; and 48.22 (4) be designed to provide intermediate energy and 48.23 ancillary services, and have received a certificate of need 48.24 under section 216B.243, demonstrating demand for its capacity. 48.25 (b) Construction of the facility must be commenced after 48.26 January 1, 2004, and before January 1, 2009. Property eligible 48.27 for this exemption does not include electric transmission lines 48.28 and interconnections or gas pipelines and interconnections 48.29 appurtenant to the property or the facility. 48.30 (c) The exemption under this section will take effect only 48.31 if the owner of the facility enters into agreements with the 48.32 governing bodies of the county and the city or town in which the 48.33 facility is located. The agreements may include a requirement 48.34 that the facility must pay a host fee to compensate the county 48.35 and city or town for hosting the facility. 48.36 [EFFECTIVE DATE.] This section is effective for taxes 49.1 levied in 2005, payable in 2006, and thereafter. 49.2 Sec. 8. Minnesota Statutes 2002, section 272.02, is 49.3 amended by adding a subdivision to read: 49.4 Subd. 57. [ELECTRIC GENERATION FACILITY PERSONAL 49.5 PROPERTY.] (a) Notwithstanding subdivision 9, clause (a), 49.6 attached machinery and other personal property which is part of 49.7 a combined-cycle combustion-turbine electric generation facility 49.8 that exceeds 550 megawatts of installed capacity and that meets 49.9 the requirements of this subdivision is exempt. At the time of 49.10 construction, the facility must: 49.11 (1) be designed to utilize natural gas as a primary fuel; 49.12 (2) not be owned by a public utility as defined in section 49.13 216B.02, subdivision 4; 49.14 (3) be located within five miles of an existing natural gas 49.15 pipeline and within four miles of an existing electrical 49.16 transmission substation; and 49.17 (4) be designed to provide energy and ancillary services 49.18 and have received a certificate of need under section 216B.243. 49.19 (b) Construction of the facility must be commenced after 49.20 January 1, 2004, and before January 1, 2007. Property eligible 49.21 for this exemption does not include electric transmission lines 49.22 and interconnections or gas pipelines and interconnections 49.23 appurtenant to the property or the facility. 49.24 [EFFECTIVE DATE.] This section is effective for assessment 49.25 year 2005, taxes payable in 2006, and thereafter. 49.26 Sec. 9. Minnesota Statutes 2002, section 273.01, is 49.27 amended to read: 49.28 273.01 [LISTING AND ASSESSMENT, TIME.] 49.29 All real property subject to taxation shall be listed and 49.30 at leastone-fourthone-fifth of the parcels listed shall be 49.31 appraised each year with reference to their value on January 2 49.32 preceding the assessment so that each parcel shall be 49.33 reappraised at maximum intervals offourfive years. All real 49.34 property becoming taxable in any year shall be listed with 49.35 reference to its value on January 2 of that year. Except as 49.36 provided in this section and section 274.01, subdivision 1, all 50.1 real property assessments shall be completed two weeks prior to 50.2 the date scheduled for the local board of review or 50.3 equalization. No changes in valuation or classification which 50.4 are intended to correct errors in judgment by the county 50.5 assessor may be made by the county assessor after the board of 50.6 review or the county board of equalization has adjourned; 50.7 however, corrections of errors that are merely clerical in 50.8 nature or changes that extend homestead treatment to property 50.9 are permitted after adjournment until the tax extension date for 50.10 that assessment year. Any changes made by the assessor after 50.11 adjournment must be fully documented and maintained in a file in 50.12 the assessor's office and shall be available for review by any 50.13 person. A copy of any changes made during this period shall be 50.14 sent to the county board no later than December 31 of the 50.15 assessment year. In the event a valuation and classification is 50.16 not placed on any real property by the dates scheduled for the 50.17 local board of review or equalization the valuation and 50.18 classification determined in the preceding assessment shall be 50.19 continued in effect and the provisions of section 273.13 shall, 50.20 in such case, not be applicable, except with respect to real 50.21 estate which has been constructed since the previous 50.22 assessment. Real property containing iron ore, the fee to which 50.23 is owned by the state of Minnesota, shall, if leased by the 50.24 state after January 2 in any year, be subject to assessment for 50.25 that year on the value of any iron ore removed under said lease 50.26 prior to January 2 of the following year. Personal property 50.27 subject to taxation shall be listed and assessed annually with 50.28 reference to its value on January 2; and, if acquired on that 50.29 day, shall be listed by or for the person acquiring it. 50.30 [EFFECTIVE DATE.] This section is effective for assessments 50.31 on or after January 2, 2004. 50.32 Sec. 10. Minnesota Statutes 2002, section 273.08, is 50.33 amended to read: 50.34 273.08 [ASSESSOR'S DUTIES.] 50.35 The assessor shall actually view, and determine the market 50.36 value of each tract or lot of real property listed for taxation, 51.1 including the value of all improvements and structures thereon, 51.2 at maximum intervals offourfive years and shall enter the 51.3 value opposite each description. 51.4 [EFFECTIVE DATE.] This section is effective for assessments 51.5 on or after January 2, 2004. 51.6 Sec. 11. Minnesota Statutes 2002, section 273.11, is 51.7 amended by adding a subdivision to read: 51.8 Subd. 21. [VALUATION EXCLUSION FOR LEAD PAINT 51.9 REMOVAL.] Owners of property classified as class 1a, 1b, 1c, 2a, 51.10 4b, or 4bb under section 273.13 may apply for a valuation 51.11 exclusion under this subdivision, provided that the property is 51.12 located in a city which has authorized valuation exclusions 51.13 under this subdivision. A city which authorizes valuation 51.14 exclusions under this subdivision must establish guidelines for 51.15 qualifying lead paint removal projects and must designate an 51.16 agency within the city to issue certificates of completion of 51.17 qualifying projects. 51.18 The property owner must obtain a certificate from the city 51.19 stating that the project has been completed and the cost 51.20 incurred by the owner in completing the project. Only projects 51.21 originating after April 1, 2003, may qualify for exclusion under 51.22 this subdivision. The property owner shall apply for a 51.23 valuation exclusion to the assessor on a form prescribed by the 51.24 assessor. 51.25 A qualifying property is eligible for a valuation exclusion 51.26 equal to 50 percent of the actual costs incurred, to a maximum 51.27 exclusion of $10,000, for a period of five years. The valuation 51.28 exclusion shall terminate upon the sale of the property. If a 51.29 property owner applies for exclusion under this subdivision 51.30 between January 1 and June 30 of any year, the exclusion shall 51.31 first apply for taxes payable in the following year. If a 51.32 property owner applies for exclusion under this subdivision 51.33 between July 1 and December 31 of any year, the exclusion shall 51.34 first apply for taxes payable in the second following year. 51.35 [EFFECTIVE DATE.] This section is effective for taxes 51.36 payable in 2004 and subsequent years. 52.1 Sec. 12. Minnesota Statutes 2002, section 273.11, is 52.2 amended by adding a subdivision to read: 52.3 Subd. 22. [VALUATION OF CLASS 4D CERTIFIED PROPERTY.] In 52.4 determining the market value of class 4d rental property 52.5 certified under section 462A.071, the assessor shall reduce the 52.6 value of the property by its restricted use value. "Restricted 52.7 use value" is the amount of market value reduction that results 52.8 from the restrictions on uses that qualify the property for 52.9 certification as class 4d under section 273.13, subdivision 25, 52.10 paragraph (e). The assessor shall determine the restricted use 52.11 value of the property using guidelines set by the commissioner 52.12 of revenue. 52.13 [EFFECTIVE DATE.] This section is effective for taxes 52.14 levied in 2003, payable in 2004, and thereafter. 52.15 Sec. 13. Minnesota Statutes 2002, section 273.11, is 52.16 amended by adding a subdivision to read: 52.17 Subd. 23. [VALUATION EXCLUSION FOR SEWAGE TREATMENT SYSTEM 52.18 IMPROVEMENTS.] Owners of property classified as class 1a, 1b, 52.19 1c, 2a, 4b, 4bb, or noncommercial 4c under section 273.13 may 52.20 apply for a valuation exclusion under this subdivision, provided 52.21 that the following conditions are met: 52.22 (1) a notice of noncompliance has been issued by a licensed 52.23 compliance inspector with regard to the individual sewage 52.24 treatment system serving the property under section 115.55, 52.25 subdivision 5b; 52.26 (2) the owner of the property furnishes documentation to 52.27 the satisfaction of the assessor that the property's individual 52.28 sewage treatment system has been replaced or refurbished between 52.29 January 1, 2003, and December 31, 2007; and 52.30 (3) a certificate of compliance has been issued for the new 52.31 or refurbished system under section 115.55, subdivision 5. 52.32 Application shall be made to the assessor on a form 52.33 prescribed by the assessor. Property meeting the requirements 52.34 above shall be eligible for a valuation exclusion equal to 50 52.35 percent of the actual costs incurred, to a maximum exclusion of 52.36 $7,500, for a period of five years. The valuation exclusion 53.1 shall terminate upon the sale of the property. If a property 53.2 owner applies for exclusion under this subdivision between 53.3 January 1 and June 30 of any year, the exclusion shall first 53.4 apply for taxes payable in the following year. If a property 53.5 owner applies for exclusion under this subdivision between July 53.6 1 and December 31 of any year, the exclusion shall first apply 53.7 for taxes payable in the second following year. 53.8 [EFFECTIVE DATE.] This section is effective for taxes 53.9 payable in 2004 and subsequent years. 53.10 Sec. 14. [273.1115] [HOMESTEAD RESORTS; VALUATION AND 53.11 DEFERMENT.] 53.12 Subdivision 1. [REQUIREMENTS.] Real property qualifying 53.13 for classification as class 1c under section 273.13, subdivision 53.14 22, paragraph (c), is entitled to valuation and tax deferment 53.15 under this section, provided that if part of a resort is not 53.16 classified as class 1c, only that portion of the value of the 53.17 property that is classified as class 1c property qualifies under 53.18 this section. 53.19 Subd. 2. [DETERMINATION OF VALUE.] Upon timely application 53.20 by the owner, as provided in subdivision 4, the value of real 53.21 property described in subdivision 1 must be determined by the 53.22 assessor solely with reference to its classification value as 53.23 class 1c property, notwithstanding sections 272.03, subdivision 53.24 8, and 273.11. The owner must furnish information on the income 53.25 generated by the property and other information required by the 53.26 assessor to determine the value of the property. The assessor 53.27 shall not consider any added values resulting from other factors. 53.28 Subd. 3. [SEPARATE DETERMINATION OF MARKET VALUE AND TAX.] 53.29 The assessor shall, however, make a separate determination of 53.30 the market value of the real estate. The assessor shall record 53.31 on the property assessment records the tax based upon the 53.32 appropriate local tax rate applicable to the property in the 53.33 taxing district. 53.34 Subd. 4. [APPLICATION.] Application for deferment of taxes 53.35 and assessment under this section must be filed by May 1 of the 53.36 year prior to the year in which the taxes are payable. The 54.1 application must be filed with the assessor of the taxing 54.2 district in which the real property is located on a form 54.3 prescribed by the commissioner of revenue. The assessor may 54.4 require proof by affidavit or otherwise that the property 54.5 qualifies under subdivision 1. An application approved by the 54.6 assessor continues in effect for subsequent years until the 54.7 property no longer qualifies under subdivision 1. 54.8 Subd. 5. [ADDITIONAL TAXES.] When real property valued and 54.9 assessed under this section no longer qualifies under 54.10 subdivision 1, the portion no longer qualifying is subject to 54.11 additional taxes, in the amount equal to the difference between 54.12 the taxes determined in accordance with subdivision 2, and the 54.13 amount determined under subdivision 3, provided, however, that 54.14 the amount determined under subdivision 3 must not be greater 54.15 than it would have been had the actual bona fide sale price of 54.16 the real property at an arms length transaction been used in 54.17 lieu of the market value determined under subdivision 3. The 54.18 additional taxes must be extended against the property on the 54.19 tax list for the current year, except that no interest or 54.20 penalties may be levied on the additional taxes if timely paid, 54.21 and except that the additional taxes must only be levied with 54.22 respect to the last seven years that the property has been 54.23 valued and assessed under this section. 54.24 Subd. 6. [LIEN.] The tax imposed by this section is a lien 54.25 on the property assessed to the same extent and for the same 54.26 duration as other taxes imposed on property within this state. 54.27 The tax must be annually extended by the county auditor and when 54.28 payable must be collected and distributed in the manner provided 54.29 by law for the collection and distribution of other property 54.30 taxes. 54.31 Subd. 7. [SPECIAL LOCAL ASSESSMENTS.] The payment of 54.32 special local assessments levied after June 30, 2003, for 54.33 improvements made to any real property described in subdivision 54.34 2, together with the interest thereon must, on timely 54.35 application under subdivision 4, be deferred as long as the 54.36 property qualifies under subdivision 1. If special assessments 55.1 against the property have been deferred under this subdivision, 55.2 the governmental unit shall file with the county recorder in the 55.3 county in which the property is located a certificate containing 55.4 the legal description of the affected property and of the amount 55.5 deferred. When the property no longer qualifies under 55.6 subdivision 1, all deferred special assessments plus interest 55.7 are payable in equal installments spread over the time remaining 55.8 until the last maturity date of the bonds issued to finance the 55.9 improvement for which the assessments were levied. If the bonds 55.10 have matured, the deferred special assessments plus interest are 55.11 payable within 90 days. The provisions of section 429.061, 55.12 subdivision 2, apply to the collection of these installments. 55.13 Penalty must not be levied on the special assessments if timely 55.14 paid. 55.15 Subd. 8. [CONTINUATION OF TAX TREATMENT UPON SALE.] When 55.16 real property qualifying under subdivision 1 is sold, no 55.17 additional taxes or deferred special assessments plus interest 55.18 may be extended against the property if: 55.19 (1) the property continues to qualify pursuant to 55.20 subdivision 1; and 55.21 (2) the new owner files an application for continued 55.22 deferment within 30 days after the sale. 55.23 Subd. 9. [APPLICABILITY OF SPECIAL ASSESSMENT PROVISIONS.] 55.24 This section applies to special local assessments levied after 55.25 June 30, 2003, and payable in the years thereafter, but shall 55.26 not apply to any special assessments levied at any time by a 55.27 county or district court under the provisions of chapter 116A. 55.28 [EFFECTIVE DATE.] This section is effective for taxes 55.29 levied in 2003, payable in 2004, and thereafter. For 55.30 applications for taxes payable in 2004 only, the application 55.31 deadline in subdivision 4 is extended to August 1, 2003. 55.32 Sec. 15. Minnesota Statutes 2002, section 273.13, 55.33 subdivision 22, is amended to read: 55.34 Subd. 22. [CLASS 1.] (a) Except as provided in subdivision 55.35 23 and in paragraphs (b) and (c), real estate which is 55.36 residential and used for homestead purposes is class 1a. In the 56.1 case of a duplex or triplex in which one of the units is used 56.2 for homestead purposes, the entire property is deemed to be used 56.3 for homestead purposes. The market value of class 1a property 56.4 must be determined based upon the value of the house, garage, 56.5 and land. 56.6 The first $500,000 of market value of class 1a property has 56.7 a net class rate of one percent of its market value; and the 56.8 market value of class 1a property that exceeds $500,000 has a 56.9 class rate of 1.25 percent of its market value. 56.10 (b) Class 1b property includes homestead real estate or 56.11 homestead manufactured homes used for the purposes of a 56.12 homestead by 56.13 (1) anyblindperson who is blind as defined in section 56.14 256D.35, or the blind person and the blind person's spouse; or 56.15 (2) any person, hereinafter referred to as "veteran," who: 56.16 (i) served in the active military or naval service of the 56.17 United States; and 56.18 (ii) is entitled to compensation under the laws and 56.19 regulations of the United States for permanent and total 56.20 service-connected disability due to the loss, or loss of use, by 56.21 reason of amputation, ankylosis, progressive muscular 56.22 dystrophies, or paralysis, of both lower extremities, such as to 56.23 preclude motion without the aid of braces, crutches, canes, or a 56.24 wheelchair; and 56.25 (iii) has acquired a special housing unit with special 56.26 fixtures or movable facilities made necessary by the nature of 56.27 the veteran's disability, or the surviving spouse of the 56.28 deceased veteran for as long as the surviving spouse retains the 56.29 special housing unit as a homestead; or 56.30 (3) any person who:56.31(i)is permanently and totally disabledand56.32(ii) receives 90 percent or more of total household income,56.33as defined in section 290A.03, subdivision 5, from56.34(A) aid from any state as a result of that disability; or56.35(B) supplemental security income for the disabled; or56.36(C) workers' compensation based on a finding of total and57.1permanent disability; or57.2(D) social security disability, including the amount of a57.3disability insurance benefit which is converted to an old age57.4insurance benefit and any subsequent cost of living increases;57.5or57.6(E) aid under the federal Railroad Retirement Act of 1937,57.7United States Code Annotated, title 45, section 228b(a)5; or57.8(F) a pension from any local government retirement fund57.9located in the state of Minnesota as a result of that57.10disability; or57.11(G) pension, annuity, or other income paid as a result of57.12that disability from a private pension or disability plan,57.13including employer, employee, union, and insurance plans and57.14(iii) has household income as defined in section 290A.03,57.15subdivision 5, of $50,000 or less; or57.16(4) any person who is permanently and totally disabled and57.17whose household income as defined in section 290A.03,57.18subdivision 5, is 275 percent or less of the federal poverty57.19level. 57.20 Property is classified and assessed under clause(4)(3) 57.21 only if the government agency or income-providing source 57.22 certifies, upon the request of the homestead occupant, that the 57.23 homestead occupant satisfies the disability requirements of this 57.24 paragraph. 57.25 Property is classified and assessed pursuant to clause (1) 57.26 only if the commissioner ofeconomic securityrevenue certifies 57.27 to the assessor that the homestead occupant satisfies the 57.28 requirements of this paragraph. 57.29 Permanently and totally disabled for the purpose of this 57.30 subdivision means a condition which is permanent in nature and 57.31 totally incapacitates the person from working at an occupation 57.32 which brings the person an income. The first $32,000 market 57.33 value of class 1b property has a net class rate of .45 percent 57.34 of its market value. The remaining market value of class 1b 57.35 property has a class rate using the rates for class 1a or class 57.36 2a property, whichever is appropriate, of similar market value. 58.1 (c) Class 1c property is commercial use real property that 58.2 abuts a lakeshore line and is devoted to temporary and seasonal 58.3 residential occupancy for recreational purposes but not devoted 58.4 to commercial purposes for more than 250 days in the year 58.5 preceding the year of assessment, and that includes a portion 58.6 used as a homestead by the owner, which includes a dwelling 58.7 occupied as a homestead by a shareholder of a corporation that 58.8 owns the resortor, a partner in a partnership that owns the 58.9 resort, or a member of a limited liability company that owns the 58.10 resort even if the title to the homestead is held by the 58.11 corporationor, partnership, or limited liability company. For 58.12 purposes of this clause, property is devoted to a commercial 58.13 purpose on a specific day if any portion of the property, 58.14 excluding the portion used exclusively as a homestead, is used 58.15 for residential occupancy and a fee is charged for residential 58.16 occupancy. The first $500,000 of market value of class 1c 58.17 property has a class rate of one percent, and the remaining 58.18 market value of class 1c property has a class rate of one 58.19 percent, with the following limitation: the area of the 58.20 property must not exceed 100 feet of lakeshore footage for each 58.21 cabin or campsite located on the property up to a total of 800 58.22 feet and 500 feet in depth, measured away from the lakeshore. 58.23 If any portion of the class 1c resort property is classified as 58.24 class 4c under subdivision 25, the entire property must meet the 58.25 requirements of subdivision 25, paragraph (d), clause (1), to 58.26 qualify for class 1c treatment under this paragraph. 58.27 (d) Class 1d property includes structures that meet all of 58.28 the following criteria: 58.29 (1) the structure is located on property that is classified 58.30 as agricultural property under section 273.13, subdivision 23; 58.31 (2) the structure is occupied exclusively by seasonal farm 58.32 workers during the time when they work on that farm, and the 58.33 occupants are not charged rent for the privilege of occupying 58.34 the property, provided that use of the structure for storage of 58.35 farm equipment and produce does not disqualify the property from 58.36 classification under this paragraph; 59.1 (3) the structure meets all applicable health and safety 59.2 requirements for the appropriate season; and 59.3 (4) the structure is not salable as residential property 59.4 because it does not comply with local ordinances relating to 59.5 location in relation to streets or roads. 59.6 The market value of class 1d property has the same class 59.7 rates as class 1a property under paragraph (a). 59.8 [EFFECTIVE DATE.] This section is effective for property 59.9 taxes levied in 2003, payable in 2004, and thereafter, except 59.10 that the amendments to paragraph (b) are effective for taxes 59.11 payable in 2005 and thereafter. 59.12 Sec. 16. Minnesota Statutes 2002, section 273.1315, is 59.13 amended to read: 59.14 273.1315 [CERTIFICATION OF 1B PROPERTY.] 59.15 Any property owner seeking classification and assessment of 59.16 the owner's homestead as class 1b property pursuant to section 59.17 273.13, subdivision 22, paragraph (b),clause (2) or (3),shall 59.18 file with the commissioner of revenuefor each assessment yeara 59.19 1b homestead declaration, on a form prescribed by the 59.20 commissioner. The declaration shall contain the following 59.21 information: 59.22 (a) the information necessary to verify that the property 59.23 owner or the owner's spouse satisfies the requirements of 59.24 section 273.13, subdivision 22, paragraph (b),clause (2) or59.25(3),for 1b classification; and 59.26 (b)the property owner's household income, as defined in59.27section 290A.03, for the previous calendar year; and59.28(c)any additional information prescribed by the 59.29 commissioner. 59.30 The declarationshallmust be filed on or beforeMarch59.31 October 1of each yearto be effective for property taxes 59.32 payable during the succeeding calendar year. The declaration 59.33 and any supplementary information received from the property 59.34 owner pursuant to this section shall be subject to chapter 59.35 270B. If approved by the commissioner, the declaration remains 59.36 in effect until the property no longer qualifies under section 60.1 273.13, subdivision 22, paragraph (b). Failure to notify the 60.2 commissioner within 30 days that the property no longer 60.3 qualifies under that paragraph because of a sale, change in 60.4 occupancy, or change in the status or condition of an occupant 60.5 shall result in the penalty provided in section 273.124, 60.6 subdivision 13, computed on the basis of the class 1b benefits 60.7 for the property, and the property shall lose its current class 60.8 1b classification. 60.9 The commissioner shall provide to the assessor on or before 60.10AprilNovember 1 a listing of the parcels of property qualifying 60.11 for 1b classification. 60.12 [EFFECTIVE DATE.] This section is effective for taxes 60.13 payable in 2005 and thereafter. 60.14 Sec. 17. Minnesota Statutes 2002, section 275.025, 60.15 subdivision 4, is amended to read: 60.16 Subd. 4. [APPORTIONMENT AND LEVY OF STATE GENERAL TAX.] 60.17 The state general tax must be distributed among the counties by 60.18 applying a uniform rate to each county's commercial-industrial 60.19 tax capacity and its seasonal recreational tax capacity. Within 60.20 each county, the tax must be levied by applying a uniform rate 60.21 against commercial-industrial tax capacity and seasonal 60.22 recreational tax capacity. ByNovember 1October 1 each year, 60.23 the commissioner of revenue shall certify the state general levy 60.24 rate to each county auditor. 60.25 Sec. 18. Minnesota Statutes 2002, section 275.065, 60.26 subdivision 1, is amended to read: 60.27 Subdivision 1. [PROPOSED LEVY.] (a) Notwithstanding any 60.28 law or charter to the contrary, on or before September155, 60.29 each taxing authority, other than a school district, shall adopt 60.30 a proposed budget and shall certify to the county auditor the 60.31 proposed or, in the case of a town, the final property tax levy 60.32 for taxes payable in the following year. 60.33 (b) On or before September3020, each school district 60.34 shall certify to the county auditor the proposed property tax 60.35 levy for taxes payable in the following year. The school 60.36 district shall certify the proposed levy as: 61.1 (1) the state determined school levy amount as prescribed 61.2 under section 126C.13, subdivision 2; 61.3 (2) voter approved referendum and debt levies; and 61.4 (3) the sum of the remaining school levies, or the maximum 61.5 levy limitation certified by the commissioner of children, 61.6 families, and learning according to section 126C.48, subdivision 61.7 1, less the amounts levied under clauses (1) and (2). 61.8 (c) If the board of estimate and taxation or any similar 61.9 board that establishes maximum tax levies for taxing 61.10 jurisdictions within a first class city certifies the maximum 61.11 property tax levies for funds under its jurisdiction by charter 61.12 to the county auditor by September155, the city shall be 61.13 deemed to have certified its levies for those taxing 61.14 jurisdictions. 61.15 (d) For purposes of this section, "taxing authority" 61.16 includes all home rule and statutory cities, towns, counties, 61.17 school districts, and special taxing districts as defined in 61.18 section 275.066. Intermediate school districts that levy a tax 61.19 under chapter 124 or 136D, joint powers boards established under 61.20 sections 123A.44 to 123A.446, and common school districts No. 61.21 323, Franconia, and No. 815, Prinsburg, are also special taxing 61.22 districts for purposes of this section. 61.23 Sec. 19. Minnesota Statutes 2002, section 275.065, 61.24 subdivision 1a, is amended to read: 61.25 Subd. 1a. [OVERLAPPING JURISDICTIONS.] In the case of a 61.26 taxing authority lying in two or more counties, the home county 61.27 auditor shall certify the proposed levy and the proposed local 61.28 tax rate to the other county auditor by September2010. The 61.29 home county auditor must estimate the levy or rate in preparing 61.30 the notices required in subdivision 3, if the other county has 61.31 not certified the appropriate information. If requested by the 61.32 home county auditor, the other county auditor must furnish an 61.33 estimate to the home county auditor. 61.34 Sec. 20. Minnesota Statutes 2002, section 275.065, 61.35 subdivision 3, is amended to read: 61.36 Subd. 3. [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 62.1 county auditor shall prepare and the county treasurer shall 62.2 deliver afterNovember 10October 17 and on or beforeNovember62.324October 31 each year, by first class mail to each taxpayer at 62.4 the address listed on the county's current year's assessment 62.5 roll, a notice of proposed property taxes. If the information 62.6 necessary to provide these notices is not available by the time 62.7 required to mail the notice by October 31, they must be mailed 62.8 no later than November 24. 62.9 If the county provides access to parcel-specific property 62.10 tax information on its Web site, it may elect to provide the 62.11 information required under this subdivision by that means 62.12 instead of mailing the notices to taxpayers. If the county 62.13 elects to provide the information through the Web site, it must 62.14 provide a notice in its newsletter or by publication in a 62.15 newspaper described in subdivision 5a that any taxpayer may 62.16 contact the county and request a mailed notice, which must be 62.17 mailed within ten days of the receipt of the request. Beginning 62.18 in 2004, information regarding the taxpayer's option to request 62.19 a mailed notice must be included with the property tax statement. 62.20 (b) The commissioner of revenue shall prescribe the form of 62.21 the notice. 62.22 (c) The notice must inform taxpayers that it contains the 62.23 amount of property taxes each taxing authority proposes to 62.24 collect for taxes payable the following year. In the case of a 62.25 town, or in the case of the state general tax, the final tax 62.26 amount will be its proposed tax. In the case of taxing 62.27 authorities required to hold a public meeting under subdivision 62.28 6, the notice must clearly state that each taxing authority, 62.29 including regional library districts established under section 62.30 134.201, and including the metropolitan taxing districts as 62.31 defined in paragraph (i), but excluding all other special taxing 62.32 districts and towns, will hold a public meeting to receive 62.33 public testimony on the proposed budget and proposed or final 62.34 property tax levy, or, in case of a school district, on the 62.35 current budget and proposed property tax levy. It must clearly 62.36 state the time and place of each taxing authority's meeting, a 63.1 telephone number for the taxing authority that taxpayers may 63.2 call if they have questions related to the notice, and an 63.3 address where comments will be received by mail. 63.4 (d) The notice must state for each parcel: 63.5 (1) the market value of the property as determined under 63.6 section 273.11, and used for computing property taxes payable in 63.7 the following year and for taxes payable in the current year as 63.8 each appears in the records of the county assessor onNovember 163.9 October 10 of the current year; and, in the case of residential 63.10 property, whether the property is classified as homestead or 63.11 nonhomestead. The notice must clearly inform taxpayers of the 63.12 years to which the market values apply and that the values are 63.13 final values; 63.14 (2) the items listed below, shown separately by county, 63.15 city or town, and state general tax, net of the residential and 63.16 agricultural homestead credit under section 273.1384, voter 63.17 approved school levy, other local school levy, and the sum of 63.18 the special taxing districts, and as a total of all taxing 63.19 authorities: 63.20 (i) the actual tax for taxes payable in the current year; 63.21(ii) the tax change due to spending factors, defined as the63.22proposed tax minus the constant spending tax amount;63.23(iii) the tax change due to other factors, defined as the63.24constant spending tax amount minus the actual current year tax;63.25 and 63.26(iv)(ii) the proposed tax amount. 63.27 If the county levy under clause (2) includes an amount for 63.28 a lake improvement district as defined under sections 103B.501 63.29 to 103B.581, the amount attributable for that purpose must be 63.30 separately stated from the remaining county levy amount. 63.31 In the case of a town or the state general tax, the final 63.32 tax shall also be its proposed tax unless the town changes its 63.33 levy at a special town meeting under section 365.52. If a 63.34 school district has certified under section 126C.17, subdivision 63.35 9, that a referendum will be held in the school district at the 63.36 November general election, the county auditor must note next to 64.1 the school district's proposed amount that a referendum is 64.2 pending and that, if approved by the voters, the tax amount may 64.3 be higher than shown on the notice. In the case of the city of 64.4 Minneapolis, the levy for the Minneapolis library board and the 64.5 levy for Minneapolis park and recreation shall be listed 64.6 separately from the remaining amount of the city's levy. In the 64.7 case of the city of St. Paul, the levy for the St. Paul library 64.8 agency must be listed separately from the remaining amount of 64.9 the city's levy. In the case of Ramsey county, any amount 64.10 levied under section 134.07 must be listed separately from the 64.11 remaining amount of the county's levy. In the case of a parcel 64.12 where tax increment or the fiscal disparities areawide tax under 64.13 chapter 276A or 473F applies, the proposed tax levy on the 64.14 captured value or the proposed tax levy on the tax capacity 64.15 subject to the areawide tax must each be stated separately and 64.16 not included in the sum of the special taxing districts; and 64.17 (3) the increase or decrease between the total taxes 64.18 payable in the current year and the total proposed taxes, 64.19 expressed as a percentage. 64.20 For purposes of this section, the amount of the tax on 64.21 homesteads qualifying under the senior citizens' property tax 64.22 deferral program under chapter 290B is the total amount of 64.23 property tax before subtraction of the deferred property tax 64.24 amount. 64.25 (e) The notice must clearly state that the proposed or 64.26 final taxes do not include the following: 64.27 (1) special assessments; 64.28 (2) levies approved by the voters after the date the 64.29 proposed taxes are certified, including bond referenda, school 64.30 district levy referenda, and levy limit increase referenda; 64.31 (3) amounts necessary to pay cleanup or other costs due to 64.32 a natural disaster occurring after the date the proposed taxes 64.33 are certified; 64.34 (4) amounts necessary to pay tort judgments against the 64.35 taxing authority that become final after the date the proposed 64.36 taxes are certified; and 65.1 (5) the contamination tax imposed on properties which 65.2 received market value reductions for contamination. 65.3 (f) Except as provided in subdivision 7, failure of the 65.4 county auditor to prepare or the county treasurer to deliver the 65.5 notice as required in this section does not invalidate the 65.6 proposed or final tax levy or the taxes payable pursuant to the 65.7 tax levy. 65.8 (g) If the notice the taxpayer receives under this section 65.9 lists the property as nonhomestead, and satisfactory 65.10 documentation is provided to the county assessor by the 65.11 applicable deadline, and the property qualifies for the 65.12 homestead classification in that assessment year, the assessor 65.13 shall reclassify the property to homestead for taxes payable in 65.14 the following year. 65.15 (h) In the case of class 4 residential property used as a 65.16 residence for lease or rental periods of 30 days or more, the 65.17 taxpayer must either: 65.18 (1) mail or deliver a copy of the notice of proposed 65.19 property taxes to each tenant, renter, or lessee; or 65.20 (2) post a copy of the notice in a conspicuous place on the 65.21 premises of the property. 65.22 The notice must be mailed or posted by the taxpayer by 65.23 November273 or within three days of receipt of the notice, 65.24 whichever is later. A taxpayer may notify the county treasurer 65.25 of the address of the taxpayer, agent, caretaker, or manager of 65.26 the premises to which the notice must be mailed in order to 65.27 fulfill the requirements of this paragraph. 65.28 (i) For purposes of this subdivision, subdivisions 5a and 65.29 6, "metropolitan special taxing districts" means the following 65.30 taxing districts in the seven-county metropolitan area that levy 65.31 a property tax for any of the specified purposes listed below: 65.32 (1) metropolitan council under section 473.132, 473.167, 65.33 473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 65.34 (2) metropolitan airports commission under section 473.667, 65.35 473.671, or 473.672; and 65.36 (3) metropolitan mosquito control commission under section 66.1 473.711. 66.2 For purposes of this section, any levies made by the 66.3 regional rail authorities in the county of Anoka, Carver, 66.4 Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 66.5 398A shall be included with the appropriate county's levy and 66.6 shall be discussed at that county's public hearing. 66.7 (j) If a statutory or home rule charter city or a town has 66.8 exercised the local levy option provided by section 473.388, 66.9 subdivision 7, it may include in the notice of its proposed 66.10 taxes the amount of its proposed taxes attributable to its 66.11 exercise of the option. In the first year of the city or town's 66.12 exercise of this option, the statement shall include an estimate 66.13 of the reduction of the metropolitan council's tax on the parcel 66.14 due to exercise of that option. The metropolitan council's levy 66.15 shall be adjusted accordingly. 66.16 Sec. 21. [275.75] [CHARTER EXEMPTION FOR AID LOSS.] 66.17 Notwithstanding any other provision of a municipal charter 66.18 that limits ad valorem taxes to a lesser amount, or that would 66.19 require voter approval for any increase, the governing body of a 66.20 municipality may by resolution increase its levy for taxes 66.21 payable in 2004 and 2005 only by an amount equal to the 66.22 reduction in the amount of aid it is certified to receive under 66.23 sections 477A.011 to 477A.03 for that same payable year compared 66.24 to the amount certified in 2003. 66.25 Sec. 22. Minnesota Statutes 2002, section 276.04, 66.26 subdivision 2, is amended to read: 66.27 Subd. 2. [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 66.28 shall provide for the printing of the tax statements. The 66.29 commissioner of revenue shall prescribe the form of the property 66.30 tax statement and its contents. The statement must contain a 66.31 tabulated statement of the dollar amount due to each taxing 66.32 authority and the amount of the state tax from the parcel of 66.33 real property for which a particular tax statement is prepared. 66.34 The dollar amounts attributable to the county, the state tax, 66.35 the voter approved school tax, the other local school tax, the 66.36 township or municipality, and the total of the metropolitan 67.1 special taxing districts as defined in section 275.065, 67.2 subdivision 3, paragraph (i), must be separately stated. The 67.3 amounts due all other special taxing districts, if any, may be 67.4 aggregated. If the county levy under this paragraph includes an 67.5 amount for a lake improvement district as defined under sections 67.6 103B.501 to 103B.581, the amount attributable for that purpose 67.7 must be separately stated from the remaining county levy 67.8 amount. In the case of Ramsey county, if the county levy under 67.9 this paragraph includes an amount for public library service 67.10 under section 134.07, the amount attributable for that purpose 67.11 must be separately stated from the remaining county levy 67.12 amount. The amount of the tax on homesteads qualifying under 67.13 the senior citizens' property tax deferral program under chapter 67.14 290B is the total amount of property tax before subtraction of 67.15 the deferred property tax amount. The amount of the tax on 67.16 contamination value imposed under sections 270.91 to 270.98, if 67.17 any, must also be separately stated. The dollar amounts, 67.18 including the dollar amount of any special assessments, may be 67.19 rounded to the nearest even whole dollar. For purposes of this 67.20 section whole odd-numbered dollars may be adjusted to the next 67.21 higher even-numbered dollar. The amount of market value 67.22 excluded under section 273.11, subdivision 16, if any, must also 67.23 be listed on the tax statement. 67.24 (b) The property tax statements for manufactured homes and 67.25 sectional structures taxed as personal property shall contain 67.26 the same information that is required on the tax statements for 67.27 real property. 67.28 (c) Real and personal property tax statements must contain 67.29 the following information in the order given in this paragraph. 67.30 The information must contain the current year tax information in 67.31 the right column with the corresponding information for the 67.32 previous year in a column on the left: 67.33 (1) the property's estimated market value under section 67.34 273.11, subdivision 1; 67.35 (2) the property's taxable market value after reductions 67.36 under section 273.11, subdivisions 1a and 16; 68.1 (3) the property's gross tax, calculated by adding the 68.2 property's total property tax to the sum of the aids enumerated 68.3 in clause (4); 68.4 (4) a total of the following aids: 68.5 (i) education aids payable under chapters 122A, 123A, 123B, 68.6 124D, 125A, 126C, and 127A; 68.7 (ii) local government aids for cities, towns, and counties 68.8 under chapter 477A; 68.9 (iii) disparity reduction aid under section 273.1398; and 68.10 (iv) homestead and agricultural credit aid under section 68.11 273.1398; 68.12 (5) for homestead residential and agricultural properties, 68.13 the credits under section 273.1384; 68.14 (6) any credits received under sections 273.119; 273.123; 68.15 273.135; 273.1391; 273.1398, subdivision 4; 469.171; and 68.16 473H.10, except that the amount of credit received under section 68.17 273.135 must be separately stated and identified as "taconite 68.18 tax relief"; and 68.19 (7) the net tax payable in the manner required in paragraph 68.20 (a). 68.21 (d) If the county uses envelopes for mailing property tax 68.22 statements and if the county agrees, a taxing district may 68.23 include a notice with the property tax statement notifying 68.24 taxpayers when the taxing district will begin its budget 68.25 deliberations for the current year, and encouraging taxpayers to 68.26 attend the hearings. If the county allows notices to be 68.27 included in the envelope containing the property tax statement, 68.28 and if more than one taxing district relative to a given 68.29 property decides to include a notice with the tax statement, the 68.30 county treasurer or auditor must coordinate the process and may 68.31 combine the information on a single announcement. 68.32 The commissioner of revenue shall certify to the county 68.33 auditor the actual or estimated aids enumerated in clause (4) 68.34 that local governments will receive in the following year. The 68.35 commissioner must certify this amount by January 1 of each year. 68.36 Sec. 23. Minnesota Statutes 2002, section 278.03, 69.1 subdivision 1, is amended to read: 69.2 Subdivision 1. [REAL PROPERTY.]In the case of real69.3property,If the proceedings instituted by the filing of the 69.4 petition have not been completed before the 16th day of May next 69.5 following the filing or, in the case of class 1c property or 69.6 class 4c resort property before the 16th day of July for taxes 69.7 payable in 2004 and 2005 only, the petitioner shall pay to the 69.8 county treasurer 50 percent of the tax levied for such year 69.9 against the property involved, unless permission to continue 69.10 prosecution of the petition without such payment is obtained as 69.11 herein provided. If the proceedings instituted by the filing of 69.12 the petition have not been completed by the next October 16, or, 69.13 in the case of class 1b agricultural homestead, class 2a 69.14 agricultural homestead, and class 2b(2) agricultural 69.15 nonhomestead property, November 16, the petitioner shall pay to 69.16 the county treasurer 50 percent of the unpaid balance of the 69.17 taxes levied for the year against the property involved if the 69.18 unpaid balance is $2,000 or less and 80 percent of the unpaid 69.19 balance if the unpaid balance is over $2,000, unless permission 69.20 to continue prosecution of the petition without payment is 69.21 obtained as herein provided. The petitioner, upon ten days' 69.22 notice to the county attorney and to the county auditor, given 69.23 at least ten days prior to the 16th day of May or, in the case 69.24 of class 1c or class 4c resort property, the 16th day of July 69.25 for taxes payable in 2004 and 2005 only, or the 16th day of 69.26 October, or, in the case of class 1b agricultural homestead, 69.27 class 2a agricultural homestead, and class 2b(2) agricultural 69.28 nonhomestead property, the 16th day of November, may apply to 69.29 the court for permission to continue prosecution of the petition 69.30 without payment; and, if it is made to appear 69.31 (1) that the proposed review is to be taken in good faith; 69.32 (2) that there is probable cause to believe that the 69.33 property may be held exempt from the tax levied or that the tax 69.34 may be determined to be less than 50 percent of the amount 69.35 levied; and 69.36 (3) that it would work a hardship upon petitioner to pay 70.1 the taxes due, 70.2 the court may permit the petitioner to continue prosecution 70.3 of the petition without payment, or may fix a lesser amount to 70.4 be paid as a condition of continuing the prosecution of the 70.5 petition. 70.6 Failure to make payment of the amount required when due 70.7 shall operate automatically to dismiss the petition and all 70.8 proceedings thereunder unless the payment is waived by an order 70.9 of the court permitting the petitioner to continue prosecution 70.10 of the petition without payment. The petition shall be 70.11 automatically reinstated upon payment of the entire tax plus 70.12 interest and penalty if the payment is made within one year of 70.13 the dismissal. The county treasurer shall, upon request of the 70.14 petitioner, issue duplicate receipts for the tax payment, one of 70.15 which shall be filed by the petitioner in the proceeding. 70.16 Sec. 24. Minnesota Statutes 2002, section 278.05, 70.17 subdivision 6, is amended to read: 70.18 Subd. 6. [DISMISSAL OF PETITION; EXCLUSION OF CERTAIN 70.19 EVIDENCE.] (a) Information, including income and expense 70.20 figures, verified net rentable areas, and anticipated income and 70.21 expenses, for income-producing property must be provided to the 70.22 county assessorwithin 60 days after the petition has been filed70.23under this chapterno later than 60 days after the applicable 70.24 filing deadline contained in section 278.01, subdivision 1 or 70.25 4. Failure to provide the information required in this 70.26 paragraph shall result in the dismissal of the petition, 70.27 unless (1) the failure to provide it was due to the 70.28 unavailability of the evidence atthatthe time that the 70.29 information was due, or (2) the petitioner was not informed in 70.30 writing by the assessor of the requirement to provide the 70.31 information. 70.32 If the petitioner proves that the assessor did not provide the 70.33 written information, the petitioner has an additional 30 days to 70.34 provide the information from the time the petitioner was 70.35 informed of the requirement to provide the information, 70.36 otherwise the petition shall be dismissed. 71.1 (b) Provided that the information as contained in paragraph 71.2 (a) is timely submitted to the county assessor, the county 71.3 assessor shall furnish the petitioner at least five days before 71.4 the hearing under this chapter with the property's appraisal, if 71.5 any, which will be presented to the court at the hearing. The 71.6 petitioner shall furnish to the county assessor at least five 71.7 days before the hearing under this chapter with the property's 71.8 appraisal, if any, which will be presented to the court at the 71.9 hearing. An appraisal of the petitioner's property done by or 71.10 for the county shall not be admissible as evidence if the county 71.11 assessor does not comply with the provisions in this paragraph. 71.12 The petition shall be dismissed if the petitioner does not 71.13 comply with the provisions in this paragraph. 71.14 [EFFECTIVE DATE.] This section is effective for petitions 71.15 filed on or after July 1, 2003. 71.16 Sec. 25. Minnesota Statutes 2002, section 279.01, 71.17 subdivision 1, is amended to read: 71.18 Subdivision 1. [DUE DATES; PENALTIES.] Except as provided 71.19 insubdivision 3 or 4this section, on May 16 or 21 days after 71.20 the postmark date on the envelope containing the property tax 71.21 statement, whichever is later, a penalty shall accrue and 71.22 thereafter be charged upon all unpaid taxes on real estate on 71.23 the current lists in the hands of the county treasurer. The 71.24 penalty shall be at a rate of two percent on homestead property 71.25 until May 31 and four percent on June 1. The penalty on 71.26 nonhomestead property shall be at a rate of four percent until 71.27 May 31 and eight percent on June 1. This penalty shall not 71.28 accrue until June 1 of each year, or 21 days after the postmark 71.29 date on the envelope containing the property tax statements, 71.30 whichever is later, on commercial use real property used for 71.31 seasonal residential recreational purposes and classified as 71.32 class 1c or 4c, and on other commercial use real property 71.33 classified as class 3a, provided that over 60 percent of the 71.34 gross income earned by the enterprise on the class 3a property 71.35 is earned during the months of May, June, July, and August. Any 71.36 property owner of such class 3a property who pays the first half 72.1 of the tax due on the property after May 15 and before June 1, 72.2 or 21 days after the postmark date on the envelope containing 72.3 the property tax statement, whichever is later, shall attach an 72.4 affidavit to the payment attesting to compliance with the income 72.5 provision of this subdivision. Thereafter, for both homestead 72.6 and nonhomestead property, on the first day of each month 72.7 beginning July 1, up to and including October 1 following, an 72.8 additional penalty of one percent for each month shall accrue 72.9 and be charged on all such unpaid taxes provided that if the due 72.10 date was extended beyond May 15 as the result of any delay in 72.11 mailing property tax statements no additional penalty shall 72.12 accrue if the tax is paid by the extended due date. If the tax 72.13 is not paid by the extended due date, then all penalties that 72.14 would have accrued if the due date had been May 15 shall be 72.15 charged. When the taxes against any tract or lot exceed $50, 72.16 one-half thereof may be paid prior to May 16 or 21 days after 72.17 the postmark date on the envelope containing the property tax 72.18 statement, whichever is later; and, if so paid, no penalty shall 72.19 attach; the remaining one-half shall be paid at any time prior 72.20 to October 16 following, without penalty; but, if not so paid, 72.21 then a penalty of two percent shall accrue thereon for homestead 72.22 property and a penalty of four percent on nonhomestead 72.23 property. Thereafter, for homestead property, on the first day 72.24 of November an additional penalty of four percent shall accrue 72.25 and on the first day of December following, an additional 72.26 penalty of two percent shall accrue and be charged on all such 72.27 unpaid taxes. Thereafter, for nonhomestead property, on the 72.28 first day of November and December following, an additional 72.29 penalty of four percent for each month shall accrue and be 72.30 charged on all such unpaid taxes. If one-half of such taxes 72.31 shall not be paid prior to May 16 or 21 days after the postmark 72.32 date on the envelope containing the property tax statement, 72.33 whichever is later, the same may be paid at any time prior to 72.34 October 16, with accrued penalties to the date of payment added, 72.35 and thereupon no penalty shall attach to the remaining one-half 72.36 until October 16 following. 73.1 This section applies to payment of personal property taxes 73.2 assessed against improvements to leased property, except as 73.3 provided by section 277.01, subdivision 3. 73.4 A county may provide by resolution that in the case of a 73.5 property owner that has multiple tracts or parcels with 73.6 aggregate taxes exceeding $50, payments may be made in 73.7 installments as provided in this subdivision. 73.8 The county treasurer may accept payments of more or less 73.9 than the exact amount of a tax installment due. If the accepted 73.10 payment is less than the amount due, payments must be applied 73.11 first to the penalty accrued for the year the payment is made. 73.12 Acceptance of partial payment of tax does not constitute a 73.13 waiver of the minimum payment required as a condition for filing 73.14 an appeal under section 278.03 or any other law, nor does it 73.15 affect the order of payment of delinquent taxes under section 73.16 280.39. 73.17 Sec. 26. Minnesota Statutes 2002, section 279.01, is 73.18 amended by adding a subdivision to read: 73.19 Subd. 5. [SEASONAL RESIDENTIAL RECREATIONAL PROPERTY USED 73.20 FOR COMMERCIAL PURPOSES.] For taxes payable in 2004 and 2005 73.21 only, in the case of class 1c property and class 4c seasonal 73.22 residential recreational property used for commercial purposes, 73.23 no penalties shall accrue to the first one-half property tax 73.24 payment as provided in this section if paid by July 15. On July 73.25 16, a penalty shall accrue and thereafter be charged upon all 73.26 unpaid taxes. On class 1c property the penalty is at a rate of 73.27 two percent until July 31, and four percent on August 1. On 73.28 class 4c seasonal residential recreational property used for 73.29 commercial purposes, the penalty is four percent until July 31 73.30 and eight percent on August 1. Thereafter, for both class 1c 73.31 and class 4c seasonal residential recreational property used for 73.32 commercial purposes, on the first day of September and on the 73.33 first day of October, an additional penalty of one percent shall 73.34 accrue and be charged on unpaid taxes. The remaining one-half 73.35 property taxes must be paid and penalties accrue as provided in 73.36 subdivision 1. 74.1 Sec. 27. Minnesota Statutes 2002, section 290A.03, 74.2 subdivision 8, is amended to read: 74.3 Subd. 8. [CLAIMANT.] (a) "Claimant" means a person, other 74.4 than a dependent, as defined under sections 151 and 152 of the 74.5 Internal Revenue Code disregarding section 152(b)(3) of the 74.6 Internal Revenue Code, who filed a claim authorized by this 74.7 chapter and who was a resident of this state as provided in 74.8 chapter 290 during the calendar year for which the claim for 74.9 relief was filed. 74.10 (b) In the case of a claim relating to rent constituting 74.11 property taxes, the claimant shall have resided in a rented or 74.12 leased unit on which ad valorem taxes or payments made in lieu 74.13 of ad valorem taxes, including payments of special assessments 74.14 imposed in lieu of ad valorem taxes, are payable at some time 74.15 during the calendar year covered by the claim. 74.16 (c) "Claimant" shall not include a resident of a nursing 74.17 home, intermediate care facility,orlong-term residential 74.18 facility, or a facility that accepts group residential housing 74.19 payments whose rent constituting property taxes is paid pursuant 74.20 to the supplemental security income program under title XVI of 74.21 the Social Security Act, the Minnesota supplemental aid program 74.22 under sections 256D.35 to 256D.54, the medical assistance 74.23 program pursuant to title XIX of the Social Security Act,orthe 74.24 general assistance medical care program pursuant to section 74.25 256D.03, subdivision 3, or the group residential housing program 74.26 under chapter 256I. 74.27 If only a portion of the rent constituting property taxes is 74.28 paid by these programs, the resident shall be a claimant for 74.29 purposes of this chapter, but the refund calculated pursuant to 74.30 section 290A.04 shall be multiplied by a fraction, the numerator 74.31 of which is income as defined in subdivision 3, paragraphs (1) 74.32 and (2), reduced by the total amount of income from the above 74.33 sources other than vendor payments under the medical assistance 74.34 program or the general assistance medical care program and the 74.35 denominator of which is income as defined in subdivision 3, 74.36 paragraphs (1) and (2), plus vendor payments under the medical 75.1 assistance program or the general assistance medical care 75.2 program, to determine the allowable refund pursuant to this 75.3 chapter. 75.4 (d) Notwithstanding paragraph (c), if the claimant was a 75.5 resident of the nursing home, intermediate care facilityor, 75.6 long-term residential facility, or facility for which the rent 75.7 was paid for the claimant by the group residential housing 75.8 program for only a portion of the calendar year covered by the 75.9 claim, the claimant may compute rent constituting property taxes 75.10 by disregarding the rent constituting property taxes from the 75.11 nursing home, intermediate care facility,orlong-term75.12residentialfacility and use only that amount of rent 75.13 constituting property taxes or property taxes payable relating 75.14 to that portion of the year when the claimant was not in the 75.15 facility. The claimant's household income is the income for the 75.16 entire calendar year covered by the claim. 75.17 (e) In the case of a claim for rent constituting property 75.18 taxes of a part-year Minnesota resident, the income and rental 75.19 reflected in this computation shall be for the period of 75.20 Minnesota residency only. Any rental expenses paid which may be 75.21 reflected in arriving at federal adjusted gross income cannot be 75.22 utilized for this computation. When two individuals of a 75.23 household are able to meet the qualifications for a claimant, 75.24 they may determine among them as to who the claimant shall be. 75.25 If they are unable to agree, the matter shall be referred to the 75.26 commissioner of revenue whose decision shall be final. If a 75.27 homestead property owner was a part-year Minnesota resident, the 75.28 income reflected in the computation made pursuant to section 75.29 290A.04 shall be for the entire calendar year, including income 75.30 not assignable to Minnesota. 75.31 (f) If a homestead is occupied by two or more renters, who 75.32 are not husband and wife, the rent shall be deemed to be paid 75.33 equally by each, and separate claims shall be filed by each. 75.34 The income of each shall be each renter's household income for 75.35 purposes of computing the amount of credit to be allowed. 75.36 [EFFECTIVE DATE.] This section is effective for claims 76.1 based on rent paid in 2003 and thereafter. 76.2 Sec. 28. Laws 1989, chapter 211, section 8, subdivision 2, 76.3 as amended by Laws 2002, chapter 390, section 24, is amended to 76.4 read: 76.5 Subd. 2. [OPERATION OF DISTRICT.] (a) A hospital district 76.6 created under this section shall be subject to Minnesota 76.7 Statutes, sections 447.32, except subdivision 1, to 447.41, and 76.8 except as provided otherwise in this act. 76.9 (b) A hospital district created under this section is a 76.10 municipal corporation and a political subdivision of the state. 76.11 [EFFECTIVE DATE.] This section is effective upon compliance 76.12 with Minnesota Statutes, section 645.021, subdivision 3, by the 76.13 governing body of the Cook county hospital district. 76.14 Sec. 29. Laws 1989, chapter 211, section 8, subdivision 4, 76.15 as amended by Laws 2002, chapter 390, section 24, is amended to 76.16 read: 76.17 Subd. 4. [TAX LEVY.] The tax levied under Minnesota 76.18 Statutes, section 447.34, shall not exceed $300,000in any year,76.19and itsfor taxes levied in 2002. For taxes levied in 2003 and 76.20 subsequent years, the tax must not exceed the lesser of: 76.21 (1) the product of the hospital district's property tax 76.22 levy limitation for the previous year determined under this 76.23 subdivision, multiplied by 103 percent; or 76.24 (2) the product of the hospital district's property tax 76.25 levy limitation for the previous year determined under this 76.26 subdivision multiplied by the ratio of the most recent available 76.27 annual medical care expenditure category of the revised Consumer 76.28 Price Index, U.S. citywide average, for all urban consumers 76.29 prepared by the United States Department of Labor to the same 76.30 annual index for the previous year. 76.31 The proceeds of the tax may be used for all purposes of the 76.32 hospital district. 76.33 [EFFECTIVE DATE.] This section is effective upon compliance 76.34 with Minnesota Statutes, section 645.021, subdivision 3, by the 76.35 governing body of the Cook county hospital district. 76.36 Sec. 30. Laws 2001, First Special Session chapter 5, 77.1 article 3, section 96, is amended to read: 77.2 Sec. 96. [REPEALER.] 77.3 (a) Minnesota Statutes 2000, sections 273.13, subdivision 77.4 24a; 273.1382; 273.1399; 275.078; 275.08, subdivision 1e; 77.5 473.446, subdivisions 1a and 1b; and 473.3915, are repealed 77.6 effective for taxes levied in 2001, payable in 2002, and 77.7 thereafter and aids or credits payable in 2002 and thereafter. 77.8 (b) Laws 1988, chapter 426, section 1; Laws 1988, chapter 77.9 702, section 16; Laws 1992, chapter 511, article 2, section 52, 77.10 as amended by Laws 1997, chapter 231, article 2, section 50, and 77.11 Laws 1998, chapter 389, article 3, section 32; Laws 1996, 77.12 chapter 471, article 8, section 45; Laws 1999, chapter 243, 77.13 article 6, section 14; Laws 1999, chapter 243, article 6, 77.14 section 15; and Laws 2000, chapter 490, article 6, section 17, 77.15 are repealed effective for taxes levied in 2001, payable in 2002 77.16 and thereafter. 77.17 (c) Minnesota Statutes 2000, sections 126C.30; 126C.31; 77.18 126C.32; 126C.33; 126C.34; 126C.35; and 126C.36, are repealed 77.19 effective July 1, 2001. 77.20(d) Minnesota Statutes 2000, section 273.126 and 462A.071,77.21are repealed effective for property taxes payable in 2004, and77.22any agreement entered into pursuant to the provisions of those77.23sections expires, effective January 1, 2004, regardless of the77.24term of the agreement.77.25 Sec. 31. Laws 2002, chapter 377, article 3, section 15, 77.26 the effective date, is amended to read: 77.27 [EFFECTIVE DATE.] This section is effective for sales made 77.28 after August 31, 2002, and on or before December 31,20032004. 77.29 Sec. 32. [PROPERTY TAX ASSESSMENT OF LOW-INCOME HOUSING, 77.30 RULES.] 77.31 The commissioner of revenue shall develop guidelines for 77.32 use by assessors in calculating the restricted use value of 77.33 class 4d property under Minnesota Statutes, section 273.11, 77.34 subdivision 22. 77.35 [EFFECTIVE DATE.] This section is effective the day 77.36 following final enactment. 78.1 Sec. 33. [COMMERCIAL-INDUSTRIAL LAND VALUE TAXATION; LOCAL 78.2 OPTION.] 78.3 The governing body of any municipality that has a 78.4 population in excess of 70,000, or any municipality located in 78.5 the taconite tax relief area defined in Minnesota Statutes, 78.6 section 273.134, may by resolution adopt a system of valuing 78.7 commercial-industrial property in its jurisdiction that is based 78.8 on the value of the land, not including improvements. The 78.9 governing body may make the election under this section if it 78.10 finds that implementation of the land value system will enhance 78.11 economic development in the city. An election under this 78.12 section must be made by December 31, 2003. If any municipality 78.13 makes the election, it must notify the commissioner of revenue 78.14 of the election and the legislature must enact during the 2004 78.15 legislative session the legislation necessary to implement the 78.16 system for taxes levied in 2004, payable in 2005, and thereafter. 78.17 Sec. 34. [LEGISLATIVE APPROVAL OF CONSUMPTIVE USE OF 78.18 WATER.] 78.19 Pursuant to Minnesota Statutes, section 103G.265, 78.20 subdivision 3, the legislature approves the consumptive use 78.21 under a permit of more than 2,000,000 gallons per day average in 78.22 a 30-day period in Rosemount, in connection with a gas fueled 78.23 combined-cycle electric generating facility, subject to the 78.24 commissioner of natural resources making a determination that 78.25 the water remaining in the basin of origin will be adequate to 78.26 meet the basin's need for water and approval by the commissioner 78.27 of natural resources of all applicable permits. 78.28 [EFFECTIVE DATE.] This section is effective the day 78.29 following final enactment. 78.30 Sec. 35. [LEGISLATIVE APPROVAL OF CONSUMPTIVE USE OF 78.31 WATER.] 78.32 Pursuant to Minnesota Statutes, section 103G.265, 78.33 subdivision 3, the legislature approves the consumptive use 78.34 under a permit of more than 2,000,000 gallons per day average in 78.35 a 30-day period in Mankato, in connection with a gas fueled 78.36 combined-cycle electric generating facility, subject to the 79.1 commissioner of natural resources making a determination that 79.2 the water remaining in the basin of origin will be adequate to 79.3 meet the basin's need for water and approval by the commissioner 79.4 of natural resources of all applicable permits. 79.5 [EFFECTIVE DATE.] This section is effective the day 79.6 following final enactment. 79.7 ARTICLE 4 79.8 LOCAL DEVELOPMENT 79.9 Section 1. Minnesota Statutes 2002, section 469.169, is 79.10 amended by adding a subdivision to read: 79.11 Subd. 16. [ADDITIONAL BORDER CITY ALLOCATIONS.] (a) In 79.12 addition to tax reductions authorized in subdivisions 7 to 15, 79.13 the commissioner shall allocate $750,000 for tax reductions to 79.14 border city enterprise zones in cities located on the western 79.15 border of the state. The commissioner shall make allocations to 79.16 zones in cities on the western border on a per capita basis. 79.17 Allocations made under this subdivision may be used for tax 79.18 reductions as provided in section 469.171, or for other offsets 79.19 of taxes imposed on or remitted by businesses located in the 79.20 enterprise zone, but only if the municipality determines that 79.21 the granting of the tax reduction or offset is necessary in 79.22 order to retain a business within or attract a business to the 79.23 zone. Any portion of the allocation provided in this paragraph 79.24 may alternatively be used for tax reductions under section 79.25 469.1732 or 469.1734. 79.26 (b) The commissioner shall allocate $750,000 for tax 79.27 reductions under section 469.1732 or 469.1734 to cities with 79.28 border city enterprise zones located on the western border of 79.29 the state. The commissioner shall allocate this amount among 79.30 the cities on a per capita basis. Any portion of the allocation 79.31 provided in this paragraph may alternatively be used for tax 79.32 reductions as provided in section 469.171. 79.33 [EFFECTIVE DATE.] This section is effective the day 79.34 following final enactment. 79.35 Sec. 2. Minnesota Statutes 2002, section 469.1731, 79.36 subdivision 3, is amended to read: 80.1 Subd. 3. [FILING.] The city must file a copy of the 80.2 resolution and development plan with the commissioner of trade 80.3 and economic development. The designation takes effectfor the80.4first calendar year that begins more than 9030 days after the 80.5 filing. 80.6 [EFFECTIVE DATE.] This section is effective the day 80.7 following final enactment. 80.8 Sec. 3. Minnesota Statutes 2002, section 469.174, 80.9 subdivision 10, is amended to read: 80.10 Subd. 10. [REDEVELOPMENT DISTRICT.] (a) "Redevelopment 80.11 district" means a type of tax increment financing district 80.12 consisting of a project, or portions of a project, within which 80.13 the authority finds by resolution that one or more of the 80.14 following conditions, reasonably distributed throughout the 80.15 district, exists: 80.16 (1) parcels consisting of 70 percent of the area of the 80.17 district are occupied by buildings, streets, utilities, paved or 80.18 gravel parking lots, or other similar structures and more than 80.19 50 percent of the buildings, not including outbuildings, are 80.20 structurally substandard to a degree requiring substantial 80.21 renovation or clearance;or80.22 (2) the property consists of vacant, unused, underused, 80.23 inappropriately used, or infrequently used railyards, rail 80.24 storage facilities, or excessive or vacated railroad 80.25 rights-of-way;or80.26 (3) tank facilities, or property whose immediately previous 80.27 use was for tank facilities, as defined in section 115C.02, 80.28 subdivision 15, if the tank facilities: 80.29 (i) have or had a capacity of more than 1,000,000 gallons; 80.30 (ii) are located adjacent to rail facilities; and 80.31 (iii) have been removed or are unused, underused, 80.32 inappropriately used, or infrequently used; or 80.33 (4) a qualifying disaster area, as defined in subdivision 80.34 10b. 80.35 (b) For purposes of this subdivision, "structurally 80.36 substandard" shall mean containing defects in structural 81.1 elements or a combination of deficiencies in essential utilities 81.2 and facilities, light and ventilation, fire protection including 81.3 adequate egress, layout and condition of interior partitions, or 81.4 similar factors, which defects or deficiencies are of sufficient 81.5 total significance to justify substantial renovation or 81.6 clearance. 81.7 (c) A building is not structurally substandard if it is in 81.8 compliance with the building code applicable to new buildings or 81.9 could be modified to satisfy the building code at a cost of less 81.10 than 15 percent of the cost of constructing a new structure of 81.11 the same square footage and type on the site. The municipality 81.12 may find that a building is not disqualified as structurally 81.13 substandard under the preceding sentence on the basis of 81.14 reasonably available evidence, such as the size, type, and age 81.15 of the building, the average cost of plumbing, electrical, or 81.16 structural repairs, or other similar reliable evidence. The 81.17 municipality may not make such a determination without an 81.18 interior inspection of the property, but need not have an 81.19 independent, expert appraisal prepared of the cost of repair and 81.20 rehabilitation of the building. An interior inspection of the 81.21 property is not required, if the municipality finds that (1) the 81.22 municipality or authority is unable to gain access to the 81.23 property after using its best efforts to obtain permission from 81.24 the party that owns or controls the property; and (2) the 81.25 evidence otherwise supports a reasonable conclusion that the 81.26 building is structurally substandard. Items of evidence that 81.27 support such a conclusion include recent fire or police 81.28 inspections, on-site property tax appraisals or housing 81.29 inspections, exterior evidence of deterioration, or other 81.30 similar reliable evidence. Written documentation of the 81.31 findings and reasons why an interior inspection was not 81.32 conducted must be made and retained under section 469.175, 81.33 subdivision 3, clause (1). 81.34 (d) A parcel is deemed to be occupied by a structurally 81.35 substandard building for purposes of the finding under paragraph 81.36 (a) if all of the following conditions are met: 82.1 (1) the parcel was occupied by a substandard building 82.2 within three years of the filing of the request for 82.3 certification of the parcel as part of the district with the 82.4 county auditor; 82.5 (2) the substandard building was demolished or removed by 82.6 the authority or the demolition or removal was financed by the 82.7 authority or was done by a developer under a development 82.8 agreement with the authority; 82.9 (3) the authority found by resolution before the demolition 82.10 or removal that the parcel was occupied by a structurally 82.11 substandard building and that after demolition and clearance the 82.12 authority intended to include the parcel within a district; and 82.13 (4) upon filing the request for certification of the tax 82.14 capacity of the parcel as part of a district, the authority 82.15 notifies the county auditor that the original tax capacity of 82.16 the parcel must be adjusted as provided by section 469.177, 82.17 subdivision 1, paragraph (h). 82.18 (e) For purposes of this subdivision, a parcel is not 82.19 occupied by buildings, streets, utilities, paved or gravel 82.20 parking lots, or other similar structures unless 15 percent of 82.21 the area of the parcel contains buildings, streets, utilities, 82.22 paved or gravel parking lots, or other similar structures. 82.23 (f) For districts consisting of two or more noncontiguous 82.24 areas, each area must qualify as a redevelopment district under 82.25 paragraph (a) to be included in the district, and the entire 82.26 area of the district must satisfy paragraph (a). 82.27 [EFFECTIVE DATE.] This section is effective for districts 82.28 for which the request for certification is made after the day 82.29 following final enactment. 82.30 Sec. 4. Minnesota Statutes 2002, section 469.174, is 82.31 amended by adding a subdivision to read: 82.32 Subd. 10b. [QUALIFIED DISASTER AREA.] A "qualified 82.33 disaster area" is an area that meets the following requirements: 82.34 (1) parcels consisting of 70 percent of the area of the 82.35 district were occupied by buildings, streets, utilities, paved 82.36 or gravel parking lots, or other similar structures immediately 83.1 before the disaster or emergency; 83.2 (2) the area of the district was subject to a disaster or 83.3 emergency, as defined in section 273.123, subdivision 1, within 83.4 the 18-month period ending on the day the request for 83.5 certification of the district is made; and 83.6 (3) 50 percent or more of the buildings in the area have 83.7 suffered substantial damage as a result of the disaster or 83.8 emergency. 83.9 [EFFECTIVE DATE.] This section is effective for districts 83.10 for which the request for certification is made after the day 83.11 following final enactment. 83.12 Sec. 5. Minnesota Statutes 2002, section 469.174, is 83.13 amended by adding a subdivision to read: 83.14 Subd. 29. [QUALIFIED HOUSING DISTRICT.] "Qualified housing 83.15 district" means: 83.16 (1) a housing district for a residential rental project or 83.17 projects in which the only properties receiving assistance from 83.18 revenues derived from tax increments from the district meet all 83.19 of the requirements for a low-income housing credit under 83.20 section 42 of the Internal Revenue Code of 1986, as amended 83.21 through December 31, 1992, regardless of whether the project 83.22 actually receives a low-income housing credit; or 83.23 (2) a housing district for a single-family homeownership 83.24 project or projects, if 95 percent or more of the homes 83.25 receiving assistance from tax increments from the district are 83.26 purchased by qualified purchasers. A qualified purchaser means 83.27 the first purchaser of a home after the tax increment assistance 83.28 is provided whose income is at or below 100 percent of the 83.29 median gross income for a family of the same size as the 83.30 purchaser. Median gross income is the greater of (i) area 83.31 median gross income, or (ii) the statewide median gross income, 83.32 as determined by the secretary of housing and urban development. 83.33 Sec. 6. Minnesota Statutes 2002, section 469.176, 83.34 subdivision 7, is amended to read: 83.35 Subd. 7. [PARCELS NOT INCLUDABLE IN DISTRICTS.] (a) The 83.36 authority may request inclusion in a tax increment financing 84.1 district and the county auditor may certify the original tax 84.2 capacity of a parcel or a part of a parcel that qualified under 84.3 the provisions of section 273.111 or 273.112 or chapter 473H for 84.4 taxes payable in any of the five calendar years before the 84.5 filing of the request for certification only for: 84.6 (1) a district in which 85 percent or more of the planned 84.7 buildings and facilities (determined on the basis of square 84.8 footage) are a qualified manufacturing facility or a qualified 84.9 distribution facility or a combination of both; or 84.10 (2) a qualified housing districtas defined in section84.11273.1399, subdivision 1. 84.12 (b)(1) A distribution facility means buildings and other 84.13 improvements to real property that are used to conduct 84.14 activities in at least each of the following categories: 84.15 (i) to store or warehouse tangible personal property; 84.16 (ii) to take orders for shipment, mailing, or delivery; 84.17 (iii) to prepare personal property for shipment, mailing, 84.18 or delivery; and 84.19 (iv) to ship, mail, or deliver property. 84.20 (2) A manufacturing facility includes space used for 84.21 manufacturing or producing tangible personal property, including 84.22 processing resulting in the change in condition of the property, 84.23 and space necessary for and related to the manufacturing 84.24 activities. 84.25 (3) To be a qualified facility, the owner or operator of a 84.26 manufacturing or distribution facility must agree to pay and pay 84.27 90 percent or more of the employees of the facility at a rate 84.28 equal to or greater than 160 percent of the federal minimum wage 84.29 for individuals over the age of 20. 84.30 Sec. 7. Minnesota Statutes 2002, section 469.1761, is 84.31 amended by adding a subdivision to read: 84.32 Subd. 3a. [MIXED-INCOME OCCUPANCY PROJECTS.] (a) 84.33 Notwithstanding the income requirements in section 469.174, 84.34 subdivision 11, or subdivisions 2 and 3, an authority may create 84.35 housing districts for developments that contain both 84.36 owner-occupied and residential rental units for mixed-income 85.1 occupancy. Such a district consists of a project, or a portion 85.2 of a project, intended for occupancy, in part, by persons of low 85.3 and moderate income as defined in chapter 462A, Title II, of the 85.4 National Housing Act of 1934; the National Housing Act of 1959; 85.5 the United States Housing Act of 1937, as amended; Title V of 85.6 the Housing Act of 1949, as amended; any other similar present 85.7 or future federal, state, or municipal legislation, or the 85.8 regulations promulgated under any of those acts, as further set 85.9 forth in this section. Twenty percent of the units in the 85.10 development in the housing district must be occupied by 85.11 individuals whose family income is equal to or less than 50 85.12 percent of area median gross income and an additional 60 percent 85.13 of the units in the development in the housing district must be 85.14 occupied by individuals whose family income is equal to or less 85.15 than 115 percent of area median gross income. Twenty percent of 85.16 the units in the development in the housing district shall not 85.17 be subject to any income limitations. 85.18 (b) For purposes of this subdivision, "family income" means 85.19 the median gross income for the area as determined under section 85.20 42 of the Internal Revenue Code of 1986, as amended. The income 85.21 requirements of this subdivision shall be deemed to be satisfied 85.22 if the sum of qualified owner-occupied units and qualified 85.23 residential rental units equals the required total number of 85.24 qualified units. Owner-occupied units must be initially 85.25 purchased and occupied by individuals whose family income 85.26 satisfies the income requirements of this subdivision. For 85.27 residential rental property, the income requirements of this 85.28 subdivision apply for the duration of the tax increment district. 85.29 (c) The development in the housing district, but not the 85.30 project, does not qualify under this subdivision if the fair 85.31 market value of the improvements that are constructed for 85.32 commercial uses or for uses other than owner-occupied and rental 85.33 mixed-income housing consists of more than 20 percent of the 85.34 total fair market value of the planned improvements in the 85.35 development plan or agreement. The fair market value of the 85.36 improvements may be determined using the cost of construction, 86.1 capitalized income, or other appropriate method of estimating 86.2 market value. 86.3 [EFFECTIVE DATE.] This section is effective for districts 86.4 for which certification is requested after July 31, 2003. 86.5 Sec. 8. Minnesota Statutes 2002, section 469.1763, 86.6 subdivision 2, is amended to read: 86.7 Subd. 2. [EXPENDITURES OUTSIDE DISTRICT.] (a) For each tax 86.8 increment financing district, an amount equal to at least 75 86.9 percent of the revenue derived from tax increments paid by 86.10 properties in the district must be expended on activities in the 86.11 district or to pay bonds, to the extent that the proceeds of the 86.12 bonds were used to finance activities in the district or to pay, 86.13 or secure payment of, debt service on credit enhanced bonds. 86.14 For districts, other than redevelopment districts for which the 86.15 request for certification was made after June 30, 1995, the 86.16 in-district percentage for purposes of the preceding sentence is 86.17 80 percent. Not more than 25 percent of the revenue derived 86.18 from tax increments paid by properties in the district may be 86.19 expended, through a development fund or otherwise, on activities 86.20 outside of the district but within the defined geographic area 86.21 of the project except to pay, or secure payment of, debt service 86.22 on credit enhanced bonds. For districts, other than 86.23 redevelopment districts for which the request for certification 86.24 was made after June 30, 1995, the pooling percentage for 86.25 purposes of the preceding sentence is 20 percent. The revenue 86.26 derived from tax increments for the district that are expended 86.27 on costs under section 469.176, subdivision 4h, paragraph (b), 86.28 may be deducted first before calculating the percentages that 86.29 must be expended within and without the district. 86.30 (b) In the case of a housing district, a housing project, 86.31 as defined in section 469.174, subdivision 11, is an activity in 86.32 the district. 86.33 (c) All administrative expenses are for activities outside 86.34 of the district, except that if the only expenses for activities 86.35 outside of the district under this subdivision are for the 86.36 purposes described in paragraph (d), administrative expenses 87.1 will be considered as expenditures for activities in the 87.2 district. 87.3 (d) The authority may elect, in the tax increment financing 87.4 plan for the district, to increase by up to ten percentage 87.5 points the permitted amount of expenditures for activities 87.6 located outside the geographic area of the district under 87.7 paragraph (a). As permitted by section 469.176, subdivision 4k, 87.8 the expenditures, including the permitted expenditures under 87.9 paragraph (a), need not be made within the geographic area of 87.10 the project. To qualify for the increase under this paragraph, 87.11 the expenditures must: 87.12 (1) be used exclusively to assist housing that meets the 87.13 requirement for a qualified low-income building, as that term is 87.14 used in section 42 of the Internal Revenue Code; 87.15 (2) not exceed the qualified basis of the housing, as 87.16 defined under section 42(c) of the Internal Revenue Code, less 87.17 the amount of any credit allowed under section 42 of the 87.18 Internal Revenue Code; and 87.19 (3) be used to: 87.20 (i) acquire and prepare the site of the housing; 87.21 (ii) acquire, construct, or rehabilitate the housing; or 87.22 (iii) make public improvements directly related to the 87.23 housing. 87.24 Sec. 9. Minnesota Statutes 2002, section 469.177, 87.25 subdivision 1, is amended to read: 87.26 Subdivision 1. [ORIGINAL NET TAX CAPACITY.] (a) Upon or 87.27 after adoption of a tax increment financing plan, the auditor of 87.28 any county in which the district is situated shall, upon request 87.29 of the authority, certify the original net tax capacity of the 87.30 tax increment financing district and that portion of the 87.31 district overlying any subdistrict as described in the tax 87.32 increment financing plan and shall certify in each year 87.33 thereafter the amount by which the original net tax capacity has 87.34 increased or decreased as a result of a change in tax exempt 87.35 status of property within the district and any subdistrict, 87.36 reduction or enlargement of the district or changes pursuant to 88.1 subdivision 4. 88.2 (b) For districts approved under section 469.175, 88.3 subdivision 3, or parcels added to existing districts after May 88.4 1, 1988, if the classification under section 273.13 of property 88.5 located in a district changes to a classification that has a 88.6 different assessment ratio, the original net tax capacity of 88.7 that property must be redetermined at the time when its use is 88.8 changed as if the property had originally been classified in the 88.9 same class in which it is classified after its use is changed. 88.10 (c) The amount to be added to the original net tax capacity 88.11 of the district as a result of previously tax exempt real 88.12 property within the district becoming taxable equals the net tax 88.13 capacity of the real property as most recently assessed pursuant 88.14 to section 273.18 or, if that assessment was made more than one 88.15 year prior to the date of title transfer rendering the property 88.16 taxable, the net tax capacity assessed by the assessor at the 88.17 time of the transfer. If improvements are made to tax exempt 88.18 property after certification of the district and before the 88.19 parcel becomes taxable, the assessor shall, at the request of 88.20 the authority, separately assess the estimated market value of 88.21 the improvements. If the property becomes taxable, the county 88.22 auditor shall add to original net tax capacity, the net tax 88.23 capacity of the parcel, excluding the separately assessed 88.24 improvements. If substantial taxable improvements were made to 88.25 a parcel after certification of the district and if the property 88.26 later becomes tax exempt, in whole or part, as a result of the 88.27 authority acquiring the property through foreclosure or exercise 88.28 of remedies under a lease or other revenue agreement or as a 88.29 result of tax forfeiture, the amount to be added to the original 88.30 net tax capacity of the district as a result of the property 88.31 again becoming taxable is the amount of the parcel's value that 88.32 was included in original net tax capacity when the parcel was 88.33 first certified. The amount to be added to the original net tax 88.34 capacity of the district as a result of enlargements equals the 88.35 net tax capacity of the added real property as most recently 88.36 certified by the commissioner of revenue as of the date of 89.1 modification of the tax increment financing plan pursuant to 89.2 section 469.175, subdivision 4. 89.3 (d) For districts approved under section 469.175, 89.4 subdivision 3, or parcels added to existing districts after May 89.5 1, 1988, if the net tax capacity of a property increases because 89.6 the property no longer qualifies under the Minnesota 89.7 Agricultural Property Tax Law, section 273.111; the Minnesota 89.8 Open Space Property Tax Law, section 273.112; or the 89.9 Metropolitan Agricultural Preserves Act, chapter 473H, or 89.10 because platted, unimproved property is improved or three years 89.11 pass after approval of the plat under section 273.11, 89.12 subdivision 1, the increase in net tax capacity must be added to 89.13 the original net tax capacity. 89.14 (e) The amount to be subtracted from the original net tax 89.15 capacity of the district as a result of previously taxable real 89.16 property within the district becoming tax exempt, or a reduction 89.17 in the geographic area of the district, shall be the amount of 89.18 original net tax capacity initially attributed to the property 89.19 becoming tax exempt or being removed from the district. If the 89.20 net tax capacity of property located within the tax increment 89.21 financing district is reduced by reason of a court-ordered 89.22 abatement, stipulation agreement, voluntary abatement made by 89.23 the assessor or auditor or by order of the commissioner of 89.24 revenue, the reduction shall be applied to the original net tax 89.25 capacity of the district when the property upon which the 89.26 abatement is made has not been improved since the date of 89.27 certification of the district and to the captured net tax 89.28 capacity of the district in each year thereafter when the 89.29 abatement relates to improvements made after the date of 89.30 certification. The county auditor may specify reasonable form 89.31 and content of the request for certification of the authority 89.32 and any modification thereof pursuant to section 469.175, 89.33 subdivision 4. 89.34 (f) If a parcel of property contained a substandard 89.35 building that was demolished or removed and if the authority 89.36 elects to treat the parcel as occupied by a substandard building 90.1 under section 469.174, subdivision 10, paragraph (b), the 90.2 auditor shall certify the original net tax capacity of the 90.3 parcel using the greater of (1) the current net tax capacity of 90.4 the parcel, or (2) the estimated market value of the parcel for 90.5 the year in which the building was demolished or removed, but 90.6 applying the class rates for the current year. 90.7 (g) For a redevelopment district qualifying under section 90.8 469.174, subdivision 10, paragraph (a), clause (4), as a 90.9 qualified disaster area, the auditor shall certify the value of 90.10 the land as the original tax capacity for any parcel in the 90.11 district that contains a building that suffered substantial 90.12 damage as a result of the disaster or emergency. 90.13 [EFFECTIVE DATE.] This section is effective for districts 90.14 for which the request for certification is made after the day 90.15 following final enactment. 90.16 Sec. 10. Minnesota Statutes 2002, section 469.1792, is 90.17 amended to read: 90.18 469.1792 [SPECIALDEFICITAUTHORITY.] 90.19 Subdivision 1. [SCOPE.] This section applies only to an 90.20 authority with a preexisting district for which: 90.21 (1) the increments from the district were insufficient to 90.22 pay preexisting obligations as a result of the class rate 90.23 changes or the elimination of the state-determined general 90.24 education property tax levy under this act, or both; or 90.25 (2)(i) the development authority has a binding contract 90.26 with a person requiring the authority to pay to the person an 90.27 amount that may not exceed the increment from the district or a 90.28 specific development within the district; and 90.29 (ii) the authority is unable to pay the full amount under 90.30 the contract from the pledged increments or other increments 90.31 from the district that would have been due if the class rate 90.32 changes or elimination of the state-determined general education 90.33 property tax levy or both had not been made under Laws 2001, 90.34 First Special Session chapter 5; 90.35 (3) the authority amends its tax increment financing plan 90.36 to establish an affordable housing account to which increments 91.1 are pledged; or 91.2 (4) the authority amends its tax increment financing plan 91.3 to establish a hazardous substance, pollutant, or contaminant 91.4 remediation account to which increments are pledged. 91.5 Subd. 2. [DEFINITIONS.] (a) For purposes of this section, 91.6 the following terms have the meanings given. 91.7 (b) "Affordable housing account" means an account in which 91.8 increment is deposited solely for affordable housing activities 91.9 as defined in section 469.174, subdivision 11. 91.10 (c) "Hazardous substance, pollutant, or contaminant 91.11 remediation account" means an account in which increment is 91.12 deposited solely for removal or remediation activities described 91.13 in section 469.174, subdivisions 16 to 19. 91.14 (d) "Preexisting district" means a tax increment financing 91.15 district for which the request for certification was made before 91.16 August 1, 2001. 91.17(c)(e) "Preexisting obligation" means a bond or binding 91.18 contract that: 91.19 (1) was issued or approved before August 1, 2001, or was 91.20 issued pursuant to a binding contract entered into before August 91.21 1, 2001; 91.22 (2) is secured by increments from a preexisting district. 91.23 Subd. 3. [ACTIONS AUTHORIZED.] (a) An authority with a 91.24 district qualifying under this section may takeeither or both91.25 any or all of the following actions for any or all of its 91.26 preexisting districts: 91.27 (1) the authority may elect that the original local tax 91.28 rate under section 469.177, subdivision 1a, does not apply to 91.29 the district;and91.30 (2) the authority may elect the fiscal disparities 91.31 contribution will be computed under section 469.177, subdivision 91.32 3, paragraph (a), regardless of the election that was made for 91.33 the district; or 91.34 (3) the authority may elect to extend the duration of the 91.35 district by up to eight additional years beyond the duration 91.36 limit on the collection of increment under section 469.176, 92.1 subdivision 1b or 1e, or a special law applicable to the 92.2 district. 92.3 (b) The authority may take action under this subdivision 92.4 only after the municipality approves the action, by resolution, 92.5 after notice and public hearing in the manner provided under 92.6 section 469.175, subdivision 2. 92.7 (c) The additional increment that may be collected as a 92.8 result of actions taken under this section and any increments 92.9 transferred to the district under section 469.1763, subdivision 92.10 6, is limited to the lesser of: 92.11 (1) the amount the authority is obligated to pay under 92.12 preexisting obligations out of the increments from the district 92.13 that result in application of this section under subdivision 1; 92.14 or 92.15 (2) an amount estimated to represent the difference between 92.16 the increment that would have been collected if the class rate 92.17 changes and elimination of the state-determined general 92.18 education property tax levy had not been made under Laws 2001, 92.19 First Special Session chapter 5, for the term of the district 92.20 under general law, and the actual increments collected for the 92.21 term of the district. 92.22 Subd. 4. [EXPENDITURES FROM AFFORDABLE HOUSING 92.23 ACCOUNTS.] Increment from an affordable housing account may be 92.24 spent by an authority anywhere within its area of operation. 92.25 Notwithstanding the definition of a project under section 92.26 469.174, increments may be spent to assist housing that meets 92.27 the requirements under section 469.1761. The limitation imposed 92.28 by section 469.1763, subdivision 2, does not apply to any 92.29 transfers of increment to the affordable housing account to the 92.30 extent that the amount transferred to the account under this 92.31 subdivision does not exceed ten percent of the revenue derived 92.32 from tax increments paid by properties in the district in the 92.33 year. 92.34 Subd. 5. [EXPENDITURES FROM HAZARDOUS SUBSTANCE, 92.35 POLLUTANT, OR CONTAMINANT REMEDIATION ACCOUNT.] Increment from a 92.36 hazardous substance, pollutant, or contaminant remediation 93.1 account may be spent by an authority anywhere within its area of 93.2 operation. Notwithstanding the definition of a project under 93.3 section 469.174, increments may be expended to remediation and 93.4 removal activities that meet the requirements of section 93.5 469.176, subdivision 4b or 4e. The limitation imposed by 93.6 section 469.1763, subdivision 2, does not apply to any transfers 93.7 of increment to the hazardous substance, pollutant, or 93.8 contaminant remediation account to the extent that the amount 93.9 transferred to the account under this subdivision does not 93.10 exceed ten percent of the revenue derived from tax increments 93.11 paid by properties in the district in the year. 93.12 [EFFECTIVE DATE.] This section is effective for actions 93.13 taken and resolutions approved after June 30, 2003. 93.14 Sec. 11. Laws 1967, chapter 558, section 1, subdivision 5, 93.15 as amended by Laws 1979, chapter 135, section 1, and Laws 1985, 93.16 chapter 98, section 2, is amended to read: 93.17 Subd. 5. Promotion of tourist, agricultural and industrial 93.18 developments. The amount to be spent annually for the purposes 93.19 of this subdivision shall not exceedone dollarfive dollars per 93.20 capita of the county's population. 93.21 [EFFECTIVE DATE.] This section is effective the day after 93.22 the governing body of Beltrami county and its chief clerical 93.23 officer timely complete their compliance with Minnesota 93.24 Statutes, section 645.021, subdivisions 2 and 3. 93.25 Sec. 12. Laws 2002, chapter 377, article 11, section 1, is 93.26 amended to read: 93.27 Section 1. [CITY OF MOORHEAD; TAX LEVY AUTHORIZED.] 93.28(a)Each year the city of Moorhead may impose a tax on all 93.29 class 3a and class 3b property located in the city in an amount 93.30 which the city determines is equal to the reduction in revenues 93.31 from increment from all tax increment financing districts in the 93.32 city resulting from the class rate changes and the elimination 93.33 of the state-determined general education property levy under 93.34 Laws 2001, First Special Session chapter 5. The proceeds of 93.35 this tax may only be used to pay preexisting obligations as 93.36 defined in Minnesota Statutes, section 469.1763, subdivision 6, 94.1 whether general obligations or payable wholly from tax 94.2 increments. The tax must be levied and collected in the same 94.3 manner and as part of the property tax levied by the city and is 94.4 subject to the same administrative, penalty, and enforcement 94.5 provisions. A tax imposed under this section is a special levy 94.6 and is not subject to levy limitations under Minnesota Statutes, 94.7 section 275.71. 94.8(b) This section expires December 31, 2005.94.9 [EFFECTIVE DATE.] This section is effective upon approval 94.10 by and compliance with Minnesota Statutes, section 645.021, 94.11 subdivision 3, by the governing body of the city of Moorhead." 94.12 Sec. 13. [DEFINITIONS.] 94.13 Subdivision 1. [DEFINITIONS.] For the purposes of sections 94.14 13 to 19, the terms defined in this section have the following 94.15 meanings. 94.16 Subd. 2. [LAKES AREA ECONOMIC DEVELOPMENT 94.17 AUTHORITY.] "Lakes area economic development authority" or 94.18 "authority" means the lakes area economic authority established 94.19 as provided in section 14. 94.20 Subd. 3. [PERSON.] "Person" means an individual, 94.21 partnership, corporation, cooperative, or other organization or 94.22 entity, public or private. 94.23 Subd. 4. [MEMBER.] "Member" means the city of Alexandria 94.24 or Garfield or the township of Alexandria or La Grand, or any 94.25 other municipality, the geographic area of which is included 94.26 within the jurisdiction of the authority. 94.27 Subd. 5. [MUNICIPALITY.] "Municipality" means a statutory 94.28 or home rule charter city or town located in Douglas county. 94.29 Sec. 14. [LAKES AREA ECONOMIC DEVELOPMENT AUTHORITY.] 94.30 Subdivision 1. [ESTABLISHMENT.] A lakes area economic 94.31 development authority with jurisdiction over the geographic area 94.32 of its members is established as a public corporation and 94.33 political subdivision of the state with perpetual succession and 94.34 all the rights, powers, privileges, immunities, and duties that 94.35 may be validly granted to or imposed upon a municipal 94.36 corporation, as provided in sections 13 to 19. 95.1 Subd. 2. [BOARD OF COMMISSIONERS.] The authority is 95.2 governed by a board of commissioners to be selected as follows: 95.3 the mayor of each member city, and the chair of the town board 95.4 of each member town shall appoint one commissioner, subject to 95.5 the approval of the respective city council or town board. The 95.6 terms of the commissioner are as provided in subdivision 5. 95.7 Subd. 3. [TIME LIMITS FOR SELECTION, ALTERNATIVE 95.8 APPOINTMENT BY DISTRICT JUDGE.] The initial appointment of 95.9 commissioners must be made no later than 60 days after sections 95.10 13 to 19 become effective. Subsequent appointments must be made 95.11 within 60 days before the expiration of a term in the same 95.12 manner as the predecessor was selected. A vacancy on the board 95.13 must be filled within 60 days after it occurs. If a selection 95.14 is not made within the prescribed time, the chief judge of the 95.15 seventh judicial district of the Minnesota district court on 95.16 application by an interested person shall appoint an eligible 95.17 person to the board. 95.18 Subd. 4. [VACANCIES.] If a vacancy occurs in the office of 95.19 commissioner, the vacancy must be filled for the unexpired term 95.20 in a like manner as provided for selection of the commissioner 95.21 who vacated the office. The office must be considered vacant 95.22 under the conditions specified in Minnesota Statutes, section 95.23 351.02. 95.24 Subd. 5. [TERMS OF OFFICE.] The terms of the initial 95.25 appointees to the board of commissioners are for three, four, 95.26 five, and six years and must be established by lot among the 95.27 initial four commissioners. The mayor or town board chair of 95.28 any new member added under section 17 shall designate the term, 95.29 not to exceed six years, of the first commissioner selected to 95.30 represent the member. Succeeding terms of all commissioners are 95.31 six years, except that each commissioner serves until a 95.32 successor has been duly selected and qualified. 95.33 Subd. 6. [REMOVAL.] A commissioner may be removed by the 95.34 unanimous vote of the appointing governing body, with or without 95.35 cause. 95.36 Subd. 7. [QUALIFICATIONS.] A commissioner may, but need 96.1 not, be a resident of the territory of the member appointing 96.2 that commissioner. 96.3 Subd. 8. [COMPENSATION.] A commissioner must be paid a per 96.4 diem compensation for attending a regular or special meeting in 96.5 an amount determined by the board. A commissioner must be 96.6 reimbursed for all reasonable expenses incurred in the 96.7 performance of the commissioner's duties as determined by the 96.8 board. 96.9 Sec. 15. [POWERS; APPLICATION OF EDA LAW.] 96.10 Subdivision 1. [USE OF EDA POWERS.] Except as otherwise 96.11 provided in sections 13 to 19, the authority may exercise any of 96.12 the powers of an economic development authority (EDA) provided 96.13 by Minnesota Statutes, sections 469.090 to 469.1082, and for 96.14 this purpose the term "city" means a member. Minnesota 96.15 Statutes, sections 469.096 to 469.101, 469.103 to 469.106, and 96.16 469.108 to 469.1081, apply to the authority, except that the 96.17 authority's fiscal year is the calendar year. 96.18 Subd. 2. [LAW THAT IS NOT APPLICABLE.] The provisions in: 96.19 (1) Minnesota Statutes, section 469.091, subdivision 1, 96.20 expressly relating to: 96.21 (i) the adoption of an enabling resolution; 96.22 (ii) Minnesota Statutes, section 469.092; or 96.23 (iii) housing and redevelopment authorities; and 96.24 (2) Minnesota Statutes, sections 469.093, 469.095, 469.102, 96.25 and 469.107; 96.26 do not apply to the authority. 96.27 Sec. 16. [MEMBERS MUST LEVY TAXES FOR AUTHORITY.] 96.28 (a) A member shall, at the request of the authority, levy a 96.29 tax in any year for the benefit of the authority. The tax is, 96.30 for each member, a pro rata portion of the total amount of tax 96.31 requested by the authority based on the taxable market value 96.32 within a member's jurisdiction, but in no event may the tax in 96.33 any year exceed 0.01813 percent of taxable market value. For 96.34 purposes of this section, "taxable market value" has the meaning 96.35 as given in Minnesota Statutes, section 273.032. 96.36 (b) The treasurer of each member city or town shall, within 97.1 15 days after receiving the property tax settlements from the 97.2 county treasurer, pay to the treasurer of the authority the 97.3 amount collected for this purpose. The money must be used by 97.4 the authority for the purposes provided by sections 13 to 19. 97.5 Sec. 17. [ADDITION AND WITHDRAWAL OF MEMBERS.] 97.6 Subdivision 1. [ADDITIONS.] A municipality upon a 97.7 resolution adopted by a four-fifths vote of all of its governing 97.8 body may petition the authority to be included within the 97.9 jurisdiction of the authority and, if approved by the authority, 97.10 the geographic area of the municipality must be included within 97.11 the jurisdiction of the authority and subject to the 97.12 jurisdiction of the authority under sections 13 to 19. 97.13 Subd. 2. [WITHDRAWALS.] A municipality may withdraw from 97.14 the authority by resolution of its governing body. The 97.15 municipality must notify the board of commissioners of the 97.16 authority of the withdrawal by providing a copy of the 97.17 resolution at least two years in advance of the proposed 97.18 withdrawal. Unless the authority and the withdrawing member 97.19 agree otherwise by action of their governing bodies, the taxable 97.20 property of the withdrawing member is subject to the property 97.21 tax levy under section 16 for two taxes payable years following 97.22 the notification of the withdrawal and the withdrawing member 97.23 retains any rights, obligations, and liabilities obtained or 97.24 incurred during its participation. 97.25 Sec. 18. [CONTRACTS WITH NONPROFIT CORPORATIONS.] 97.26 The authority may enter into contracts with one or more 97.27 nonprofit corporations to make, from funds of and under 97.28 guidelines set by the authority, loans or grants for projects 97.29 the authority may undertake under sections 13 to 19. Minnesota 97.30 Statutes, section 465.719, does not apply so long as the 97.31 nonprofit corporation is not described in Minnesota Statutes, 97.32 section 465.719, subdivision 1, paragraph (b), item (i), or (b), 97.33 item (ii). 97.34 Sec. 19. [RELATION TO EXISTING LAWS.] 97.35 Sections 13 to 19 must be given full effect notwithstanding 97.36 any law or charter that is inconsistent with them. 98.1 Sec. 20. [LOCAL APPROVAL; EFFECTIVE DATE.] 98.2 Sections 13 to 19 are only effective as to all affected 98.3 governing bodies on the day after the last of the governing 98.4 bodies or town boards of the cities of Alexandria and Garfield 98.5 and the towns of Alexandria and La Grand in Douglas county and 98.6 the chief clerical officer of each of them timely complete their 98.7 compliance with Minnesota Statutes, section 645.021, 98.8 subdivisions 2 and 3. 98.9 Sec. 21. [MULTICITY HOUSING AND REDEVELOPMENT AUTHORITY.] 98.10 Subdivision 1. [ESTABLISHED.] A multicity authority is 98.11 established that includes the cities of Arden Hills, Blaine, 98.12 Circle Pines, Mounds View, New Brighton, Roseville, and 98.13 Shoreview, to be known as the housing and redevelopment 98.14 authority in and for the "I-35W Corridor Coalition." 98.15 Subd. 2. [PURPOSES.] In addition to the purposes set forth 98.16 in Minnesota Statutes, sections 469.001 to 469.047, the purposes 98.17 of the authority are: 98.18 (1) to assist homeowners with flexible financing tools to 98.19 complete home improvement projects; 98.20 (2) to assist owners through the complex construction 98.21 process when renovating their homes; 98.22 (3) to assist individuals and families to become new 98.23 homeowners; 98.24 (4) to reduce the number of substandard housing units; and 98.25 (5) to keep the community's housing stock usable for future 98.26 generations. 98.27 Subd. 3. [DEFINITIONS.] (a) For the purposes of this 98.28 section, the terms defined in Minnesota Statutes, sections 98.29 469.001 to 469.047, have the meanings given to them. The terms 98.30 defined in this subdivision apply to this section unless the 98.31 context indicates a different meaning. 98.32 (b) "Area of operation" means the area within the 98.33 territorial boundaries of the seven cities. 98.34 (c) "Authority" means the housing and redevelopment 98.35 authority in and for the I-35W Corridor Coalition. 98.36 (d) "Multicounty authority" means the authority. 99.1 (e) "State public body" means the authority. 99.2 Subd. 4. [COMMISSIONERS.] The authority consists of 14 99.3 commissioners who shall be the mayor or acting mayor and the 99.4 city manager, acting city manager, city administrator, or acting 99.5 city administrator of each city in the authority. The term of 99.6 the mayor or acting mayor is coterminous with the mayoral term 99.7 of office. In the case of the city manager, acting city 99.8 manager, city administrator, or acting city administrator, the 99.9 term is five years from the date of appointment. Each 99.10 commissioner has one vote. 99.11 Subd. 5. [LEVY AUTHORITY.] Subject to the consent by 99.12 resolution of the cities in and for which a levy is created, the 99.13 authority may levy a tax upon all taxable property within its 99.14 area of operation in accordance with Minnesota Statutes, section 99.15 469.033, subdivision 6. Any tax levied under this section by 99.16 the authority is not considered to be in addition to any tax 99.17 previously levied or to be levied under Minnesota Statutes, 99.18 section 469.033, subdivision 6. A levy by the authority under 99.19 this section and a levy by any city under Minnesota Statutes, 99.20 section 469.033, subdivision 6, may not together exceed the levy 99.21 limits in that section. The levy is effective after the 99.22 resolutions of consent have been adopted by all the cities in 99.23 the area of operation. 99.24 Subd. 6. [APPROVAL OF EXISTING AUTHORITIES.] All projects, 99.25 redevelopment plans, or levies must be approved by the cities in 99.26 which they will be located, implemented, or levied. Approval of 99.27 projects, redevelopment plans, or levies is not required by the 99.28 county in which the affected city is located or by an existing 99.29 housing and redevelopment authority or economic development 99.30 authority of the affected city. 99.31 Subd. 7. [APPLICATION OF OTHER LAWS.] Provisions in 99.32 Minnesota Statutes, sections 469.001 to 469.047, applicable to 99.33 housing and redevelopment authorities also apply to the housing 99.34 and redevelopment authority in and for the 1-35W Corridor 99.35 Coalition subject to this section. 99.36 Subd. 8. [SUNSET.] This section expires on December 31, 100.1 2013. 100.2 Subd. 9. [EFFECTIVE DATE.] This section is effective for 100.3 the cities of Arden Hills, Blaine, Circle Pines, Mounds View, 100.4 New Brighton, Roseville, and Shoreview after the governing body 100.5 and its chief clerical officer of the last of those seven cities 100.6 timely complete their compliance with Minnesota Statutes, 100.7 section 645.021, subdivisions 2 and 3. 100.8 Sec. 22. [CITY OF DETROIT LAKES.] 100.9 Notwithstanding limitations on the amount of increment that 100.10 may be pooled to eliminate a deficit under Minnesota Statutes, 100.11 section 469.1763, subdivision 6, the city of Detroit Lakes may 100.12 transfer available increments from any of its tax increment 100.13 financing districts to TIF District 21-1 to be used to eliminate 100.14 a deficit in the increment generated by TIF District 21-1 that 100.15 is required to pay debt service on obligations issued for the 100.16 district. The authority under this section applies to deficits 100.17 occurring in 2000 and subsequent years. 100.18 [EFFECTIVE DATE.] This section is effective upon approval 100.19 by the governing body of Detroit Lakes and compliance with 100.20 Minnesota Statutes, section 645.021. 100.21 Sec. 23. [CITY OF DULUTH; EXPENDITURE OF TAX INCREMENTS.] 100.22 Subdivision 1. [EXPENDITURES AUTHORIZED.] Notwithstanding 100.23 Minnesota Statutes, section 469.1764, the Duluth economic 100.24 development authority may expend up to $3,000,000 of tax 100.25 increments collected from development district No. 3 on 100.26 activities located outside the geographic boundaries of the 100.27 district, subject to the conditions in this section. 100.28 Subd. 2. [LOCATION OF EXPENDITURES.] Tax increments must 100.29 be spent within the area bounded by the following described 100.30 lines: 100.31 (1) to the north by a line described as follows: beginning 100.32 at the intersection of the centerline of 29th Avenue West and 100.33 the southerly line of West Michigan Street, thence southwesterly 100.34 along the southerly line of West Michigan Street to the east 100.35 limit of the DM&IR railway right-of-way; thence northwesterly 100.36 along the easterly limit of the DM&IR railway right-of-way to 101.1 the centerline of West Superior Street to its intersection with 101.2 the centerline of Jenswold Street; thence southwesterly along 101.3 the centerline of Jenswold Street to its intersection with the 101.4 centerline of the Northern Pacific Railway Company's main line 101.5 to St. Paul; thence southwesterly along the centerline of the 101.6 Northern Pacific Railway Company's main line to St. Paul to its 101.7 intersection with the extended centerline of 37th Avenue West; 101.8 (2) to the west by a line described as follows: beginning 101.9 at the intersection of the centerline of the Northern Pacific 101.10 Railway Company's main line to St. Paul and the extended 101.11 centerline of 37th Avenue West; then southeasterly along said 101.12 extended centerline of 37th Avenue West to its intersection with 101.13 the centerline of Interstate highway 35; 101.14 (3) to the south by the centerline of Interstate highway 101.15 35; and 101.16 (4) to the east by the centerline of 29th Avenue West. 101.17 Subd. 3. [LIMITATIONS ON USE.] All expenditures of tax 101.18 increments permitted by this section must meet the requirements 101.19 of Minnesota Statutes, section 469.176, subdivision 4j. 101.20 [EFFECTIVE DATE.] This section is effective June 1, 2003. 101.21 Sec. 24. [CITY OF DULUTH; TAX INCREMENT FINANCING 101.22 DISTRICT.] 101.23 Subdivision 1. [AUTHORIZATION.] Upon approval of the 101.24 governing body of the city of Duluth, the Duluth economic 101.25 development authority may create an economic development tax 101.26 increment financing district for aircraft related facilities. 101.27 Except as otherwise provided in this section, the provisions of 101.28 Minnesota Statutes, sections 469.174 to 469.179, apply to the 101.29 district. 101.30 Subd. 2. [SPECIAL RULES.] (a) Notwithstanding the 101.31 provisions of Minnesota Statutes, section 469.176, subdivision 101.32 1b, paragraph (a), clause (3), no tax increment shall be paid to 101.33 the authority after 25 years after receipt by the authority of 101.34 the first tax increment for the district authorized by this 101.35 section. 101.36 (b) The development in the district authorized by this 102.1 section shall be deemed to be a purpose authorized under 102.2 Minnesota Statutes, section 469.176, subdivision 4c, paragraph 102.3 (a). 102.4 (c) For purposes of Minnesota Statutes, section 469.177, 102.5 subdivision 12, the applicable maximum duration limit of the 102.6 district authorized by this section shall be as set forth in 102.7 paragraph (a). 102.8 [EFFECTIVE DATE.] This section is effective upon compliance 102.9 with the requirements of Minnesota Statutes, sections 469.1782 102.10 and 645.021. 102.11 Sec. 25. [CITY OF MONTICELLO; EXTENSION OF TIME FOR 102.12 ACTIVITY IN A TAX INCREMENT FINANCING DISTRICT.] 102.13 The requirements of Minnesota Statutes, section 469.1763, 102.14 subdivision 3, that activities must be undertaken within a 102.15 five-year period from the date of certification of a tax 102.16 increment financing district, must be considered to be met for 102.17 the city of Monticello tax increment financing district no. 1-22 102.18 if the activities are undertaken within ten years from the date 102.19 of certification of the district. 102.20 [EFFECTIVE DATE.] This section is effective upon compliance 102.21 by the governing body of the city of Monticello with the 102.22 requirements of Minnesota Statutes, section 645.021. 102.23 Sec. 26. [CITY OF NEW HOPE; TAX INCREMENT FINANCING 102.24 DISTRICT.] 102.25 Subdivision 1. [SPECIAL RULES.] (a) At the election of the 102.26 city, upon adoption of the tax increment financing plan for a 102.27 district or districts described in this section, the rules 102.28 provided under this section apply to each such district. 102.29 For purposes of this section, "district" means a 102.30 redevelopment or soils condition tax increment financing 102.31 district established by the city of New Hope or the economic 102.32 development authority of the city within the following area: 102.33 beginning at the intersection of Winnetka Avenue N. and the 102.34 westerly extension of 58th Avenue N., east on the westerly 102.35 extension of 58th Avenue N. to Sumter Avenue N., south on Sumter 102.36 Avenue N. to Bass Lake Road, east on Bass Lake Road to the city 103.1 boundaries of New Hope and Crystal, MN, south along that city 103.2 boundary to St. Raphael Drive, west on St. Raphael Drive to 103.3 Sumter Avenue N., south on Sumter Avenue N. to 53rd Avenue N., 103.4 west on 53rd Avenue N. to Winnetka Avenue N., north on Winnetka 103.5 Avenue N. to 55th Avenue N., west on 55th Avenue N. to Zealand 103.6 Avenue N., north on Zealand Avenue N. to Bass Lake Road, east on 103.7 Bass Lake Road to Yukon Avenue N., north on Yukon Avenue N. to 103.8 Meadow Lake Road E., east on Meadow Lake Road E. to the 103.9 intersection with the west property line of New Hope golf 103.10 course, south along the west property line of New Hope golf 103.11 course to Bass Lake Road, east on Bass Lake Road to Winnetka 103.12 Avenue N., north on Winnetka Avenue N. to the point of 103.13 beginning. The total number of parcels that may be included 103.14 within all such redevelopment or soils condition tax increment 103.15 financing districts must not exceed 131 and the total acreage, 103.16 including roads, easements, and rights-of-way, must not exceed 103.17 130 acres. 103.18 (b) The five-year rule under Minnesota Statutes, section 103.19 469.1763, subdivision 3, applies as if the limit is nine years. 103.20 (c) The limitations on expenditure of increment outside of 103.21 the district under Minnesota Statutes, section 469.1763, 103.22 subdivision 2, do not apply, provided that increments may only 103.23 be expended on improvements or activities within the area 103.24 identified in paragraph (a). 103.25 (d) The requirement relating to the original local tax rate 103.26 for the district under Minnesota Statutes, section 469.177, 103.27 subdivision 1a, does not apply. 103.28 (e) The requirements for qualifying a redevelopment 103.29 district under Minnesota Statutes, section 469.174, subdivision 103.30 10, do not apply to the parcels identified as 08-118-21-22-0001, 103.31 08-118-21-33-0008, 08-118-21-33-0009, 08-118-21-33-0010, 103.32 08-118-21-33-0011, 08-118-21-33-0013, 08-118-21-33-0018, 103.33 08-118-21-33-0019, 08-118-21-33-0025, 08-118-21-33-0027, 103.34 08-118-21-33-0029, 08-118-21-33-0082, and 08-118-21-33-0087, 103.35 which are deemed substandard for the purpose of qualifying the 103.36 district as a redevelopment district. 104.1 Subd. 2. [EXPIRATION.] (a) The exception under subdivision 104.2 1, paragraph (c), from the limitations of Minnesota Statutes, 104.3 section 469.1763, subdivision 2, expires 20 years after the 104.4 receipt of the first increment from a district for which the 104.5 city has elected that this section applies. 104.6 (b) The authority to approve tax increment financing plans 104.7 to establish a tax increment financing district subject to this 104.8 section expires on December 31, 2013. 104.9 Subd. 3. [EFFECTIVE DATE.] This section is effective upon 104.10 approval by the governing bodies of the city of New Hope and 104.11 Hennepin county and upon compliance by the city with Minnesota 104.12 Statutes, section 645.021, subdivision 3. 104.13 Sec. 27. [CITY OF RICHFIELD; TAX INCREMENT FINANCING 104.14 DISTRICT.] 104.15 Subdivision 1. [AUTHORIZATION.] The city of Richfield may 104.16 create a tax increment financing district consisting of an area 104.17 bordered by crosstown highway 62 on the north, 66th street on 104.18 the south, trunk highway 77 on the east, and the east side of 104.19 16th avenue to the west. The city or its housing and 104.20 redevelopment authority may be the authority for the purposes of 104.21 Minnesota Statutes, sections 469.174 to 469.179. 104.22 Subd. 2. [DISTRICT IS REDEVELOPMENT DISTRICT.] The 104.23 redevelopment tax increment district created pursuant to 104.24 subdivision 1 is deemed to be a redevelopment district and is 104.25 subject to Minnesota Statutes, sections 469.174 to 469.179, 104.26 except that expenditures for activities as defined in Minnesota 104.27 Statutes, section 469.1763, subdivision 1, paragraph (b), 104.28 anywhere in the district are deemed to be the costs of 104.29 correcting conditions that allow the designation of 104.30 redevelopment districts pursuant to Minnesota Statutes, section 104.31 469.174, subdivision 10. 104.32 [EFFECTIVE DATE.] This section is effective upon local 104.33 approval by the city of Richfield in compliance with Minnesota 104.34 Statutes, section 645.021. 104.35 Sec. 28. [CITY OF ROSEVILLE; TAX INCREMENT FINANCING 104.36 DISTRICT.] 105.1 Subdivision 1. [SPECIAL RULES.] (a) At the election of the 105.2 city, upon adoption of the tax increment financing plan for a 105.3 district or districts described in this section, the rules 105.4 provided under this section apply to each such district. 105.5 For purposes of this section, "district" means a 105.6 redevelopment or soils condition tax increment financing 105.7 district established by the city of Roseville or the economic 105.8 development authority of the city within an area generally 105.9 described as follows: from the Northwest corner of Section 4, 105.10 Township 29, Range 23, Ramsey County, Minnesota, south 1,265 105.11 feet along the centerline of Cleveland Avenue to the point of 105.12 beginning, then easterly a distance of approximately 902 feet, 105.13 then southerly 315 feet, then easterly 416 feet to the west 105.14 right-of-way line of the 33 foot wide Prior Avenue, then 105.15 southerly along that line approximately 602 feet to the 105.16 intersection with a line running southwesterly approximately 790 105.17 feet to a point along the centerline of County Road C-2 which is 105.18 approximately 980 feet east of its intersection with the 105.19 centerline of Cleveland Avenue, then southerly approximately 650 105.20 feet, then easterly 35 feet, then southerly approximately 300 105.21 feet, then easterly 240 feet, then southerly 270 feet, then 105.22 easterly 580 feet, then north and easterly along an irregular 105.23 line on the eastern boundary of Langton Lake a distance of 835 105.24 feet, then easterly 2,346 feet along the south edge of platted 105.25 and Oasis Park property, then southerly a distance of 2,101 feet 105.26 to the south right-of-way of County Road C, then westerly along 105.27 the south right-of-way a distance of approximately 4,210 feet to 105.28 the intersection with the centerline of Cleveland Avenue, then 105.29 northerly along the Cleveland Avenue centerline a distance of 105.30 approximately 4,371 feet to the point of beginning. Also 105.31 included are the additional connected public rights-of-way and 105.32 public lands as follows: the Terrace Drive right-of-way from 105.33 the eastern boundary of the Business Park boundary, easterly 105.34 approximately 1,000 feet to the intersection with the western 105.35 right-of-way of Snelling Avenue; the County Road C right-of-way 105.36 from the eastern boundary of the Business Park boundary, 106.1 easterly approximately 1,080 feet to the intersection with the 106.2 centerline of Snelling Avenue; and the area generally west of 106.3 Cleveland Avenue between Cleveland Avenue and marked Interstate 106.4 Highway 35W, from County Road C approximately 3,000 feet north, 106.5 encompassing entry ramps, wetlands, and regional storm water 106.6 storage ponds. 106.7 (b) The five-year rule under Minnesota Statutes, section 106.8 469.1763, subdivision 3, applies as if the limit is nine years. 106.9 (c) The limitations on expenditure of increment outside of 106.10 the district under Minnesota Statutes, section 469.1763, 106.11 subdivision 2, do not apply, provided that increments may only 106.12 be expended on improvements or activities within the areas 106.13 identified in paragraph (a). 106.14 (d) The requirement relating to the original local tax rate 106.15 for the district under Minnesota Statutes, section 469.177, 106.16 subdivision 1a, does not apply. 106.17 Subd. 2. [APPLICATION OF OTHER LAWS.] All references in 106.18 Minnesota Statutes to tax increment financing districts created 106.19 and tax increments generated under Minnesota Statutes, sections 106.20 469.174 to 469.1799, apply subject to this section, provided 106.21 that Minnesota Statutes, sections 469.174 to 469.1799, apply 106.22 only to the extent specified in this section. 106.23 Subd. 3. [EXPIRATION.] (a) The exception under subdivision 106.24 1, paragraph (c), from the limitations of Minnesota Statutes, 106.25 section 469.1763, subdivision 2, expires 20 years after the 106.26 receipt of the first increment from a district for which the 106.27 city has elected that this section applies. 106.28 (b) The authority to approve tax increment financing plans 106.29 to establish a tax increment financing district subject to this 106.30 section expires on December 31, 2013. 106.31 [EFFECTIVE DATE.] This section is effective upon approval 106.32 by the governing bodies of the city of Roseville and Ramsey 106.33 county and upon compliance by the the city with Minnesota 106.34 Statutes, section 645.021, subdivision 3. 106.35 Sec. 29. [CITY OF ST. MICHAEL; TAX INCREMENT FINANCING 106.36 DISTRICT.] 107.1 Subdivision 1. [ESTABLISHMENT OF DISTRICT.] The city of St. 107.2 Michael may establish a redevelopment tax increment financing 107.3 district subject to Minnesota Statutes, sections 469.174 to 107.4 469.179, except as provided in this section. The district must 107.5 be established within an area that includes the downtown and 107.6 town center areas as designated by the city as well as all 107.7 parcels adjacent to marked trunk highway 241 within the city. 107.8 Subd. 2. [SPECIAL RULES.] (a) Notwithstanding the 107.9 requirements of Minnesota Statutes, section 469.174, subdivision 107.10 10, the district may be established and operated as a 107.11 redevelopment district. 107.12 (b) Notwithstanding the restrictions of Minnesota Statutes, 107.13 sections 469.176, subdivisions 4 and 4j, and 469.1763, 107.14 subdivision 2, revenues derived from tax increments from the 107.15 district created under this section may be used to meet the cost 107.16 of land acquisition, removal of buildings in the right-of-way 107.17 acquisition area, and other costs incurred by the city of St. 107.18 Michael in the expansion and improvement of marked trunk highway 107.19 241 within the city. 107.20 (c) Minnesota Statutes, section 469.176, subdivision 5, 107.21 does not apply to the district. 107.22 [EFFECTIVE DATE.] This section is effective the day after 107.23 the governing body of the city of St. Michael complies with 107.24 Minnesota Statutes, section 645.021, subdivision 3. 107.25 Sec. 30. [KANDIYOHI COUNTY AND CITY OF WILLMAR.] 107.26 Subdivision 1. [POWERS.] Notwithstanding Minnesota 107.27 Statutes, sections 469.090 and 469.1082, Kandiyohi county may 107.28 exercise the powers of a city under Minnesota Statutes, sections 107.29 469.090 to 469.107. Kandiyohi county and the city of Willmar 107.30 may enter into a joint powers agreement under Minnesota 107.31 Statutes, section 471.59, to jointly or cooperatively exercise 107.32 any of the powers common to both the county and the city under 107.33 Minnesota Statutes, sections 469.090 to 469.107, in a manner to 107.34 be determined by a majority of the Kandiyohi county board and 107.35 the Willmar city council. 107.36 Subd. 2. [SPECIAL TAXING DISTRICT.] A joint powers entity 108.1 created under this section is a political subdivision of the 108.2 state and a special taxing district as defined by Minnesota 108.3 Statutes, section 275.066, clause (24), with the power to adopt 108.4 and certify a property tax levy to the county auditor. 108.5 Subd. 3. [EFFECTIVE DATE; NO LOCAL APPROVAL 108.6 REQUIRED.] Under Minnesota Statutes, section 645.023, 108.7 subdivision 1, paragraph (a), no local approval of this section 108.8 is required. 108.9 [EFFECTIVE DATE.] This sections is effective the day after 108.10 final enactment. 108.11 Sec. 31. �CITY OF HOPKINS; TAX INCREMENT FINANCING 108.12 DISTRICT; EXTENSION OF FIVE-YEAR RULE.] 108.13 The requirements of Minnesota Statutes, section 469.1763, 108.14 subdivision 3, that activities must be undertaken within a 108.15 five-year period from the date of certification of tax increment 108.16 financing district must be considered to be met for the city of 108.17 Hopkins redevelopment tax increment district 2-11, if the 108.18 activities are undertaken within ten years from the date of 108.19 certification of the district. 108.20 [EFFECTIVE DATE.] This section is effective upon compliance 108.21 by the governing body of the city of Hopkins with the provisions 108.22 of Minnesota Statutes, section 645.021. 108.23 Sec. 32. [CITIES OF ELGIN, EYOTA, BYRON, AND ORONOCO; TAX 108.24 INCREMENT FINANCING DISTRICTS.] 108.25 Subdivision 1. [AUTHORIZATION.] Notwithstanding the 108.26 mileage limitation in Minnesota Statutes, section 469.174, 108.27 subdivision 27, the cities of Elgin, Eyota, Byron, and Oronoco 108.28 are deemed to be small cities for purposes of Minnesota 108.29 Statutes, sections 469.174 to 469.1799, as long as they do not 108.30 exceed the population limit in that section. 108.31 Subd. 2. [LOCAL APPROVAL.] This section is available for 108.32 each of the cities of Elgin, Eyota, Byron, and Oronoco upon 108.33 approval of that city's governing body and compliance with 108.34 Minnesota Statutes, section 645.021, subdivisions 2 and 3. 108.35 ARTICLE 5 108.36 PUBLIC FINANCE 109.1 Section 1. [37.31] [ISSUANCE OF BONDS.] 109.2 Subdivision 1. [BONDING AUTHORITY.] The society may issue 109.3 negotiable bonds in a principal amount that the society 109.4 determines necessary to provide sufficient money for achieving 109.5 its purposes, including the payment of interest on bonds of the 109.6 society, the establishment of reserves to secure its bonds, the 109.7 payment of fees to a third party providing credit enhancement, 109.8 and the payment of all other expenditures of the society 109.9 incident to and necessary or convenient to carry out its 109.10 corporate purposes and powers. Bonds of the society may be 109.11 issued as bonds or notes or in any other form authorized by 109.12 law. The principal amount of bonds issued and outstanding under 109.13 this section at any time may not exceed $20,000,000, excluding 109.14 bonds for which refunding bonds or crossover refunding bonds 109.15 have been issued. 109.16 Subd. 2. [REFUNDING OF BONDS.] The society may issue bonds 109.17 to refund outstanding bonds of the society, to pay any 109.18 redemption premiums on those bonds, and to pay interest accrued 109.19 or to accrue to the redemption date next succeeding the date of 109.20 delivery of the refunding bonds. The society may apply the 109.21 proceeds of any refunding bonds to the purchase or payment at 109.22 maturity of the bonds to be refunded, or to the redemption of 109.23 outstanding bonds on the redemption date next succeeding the 109.24 date of delivery of the refunding bonds and may, pending the 109.25 application, place the proceeds in escrow to be applied to the 109.26 purchase, retirement, or redemption of the bonds. Pending use, 109.27 escrowed proceeds may be invested and reinvested in obligations 109.28 issued or guaranteed by the state or the United States or by any 109.29 agency or instrumentality of the state or the United States, or 109.30 in certificates of deposit or time deposits secured in a manner 109.31 determined by the society, maturing at a time appropriate to 109.32 assure the prompt payment of the principal and interest and 109.33 redemption premiums, if any, on the bonds to be refunded. The 109.34 income realized on any investment may also be applied to the 109.35 payment of the bonds to be refunded. After the terms of the 109.36 escrow have been fully satisfied, any balance of the proceeds 110.1 and any investment income may be returned to the society for use 110.2 by it in any lawful manner. All refunding bonds issued under 110.3 this subdivision must be issued and secured in the manner 110.4 provided by resolution of the society. 110.5 Subd. 3. [KIND OF BONDS.] Bonds issued under this section 110.6 must be negotiable investment securities within the meaning and 110.7 for all purposes of the Uniform Commercial Code, subject only to 110.8 the provisions of the bonds for registration. The bonds issued 110.9 must be limited obligations of the society not secured by its 110.10 full faith and credit and payable solely from specified sources 110.11 or assets. 110.12 Subd. 4. [RESOLUTION AND TERMS OF SALE.] The bonds of the 110.13 society must be authorized by a resolution or resolutions 110.14 adopted by the society. The bonds must bear the date or dates, 110.15 mature at the time or times, bear interest at a fixed or 110.16 variable rate, including a rate varying periodically at the time 110.17 or times and on the terms determined by the society, or any 110.18 combination of fixed and variable rates, be in the 110.19 denominations, be in the form, carry the registration 110.20 privileges, be executed in the manner, be payable in lawful 110.21 money of the United States, at the place or places within or 110.22 without the state, and be subject to the terms of redemption or 110.23 purchase before maturity as the resolutions or certificates 110.24 provide. If, for any reason existing at the date of issue of 110.25 the bonds or existing at the date of making or purchasing any 110.26 loan or securities from the proceeds or after that date, the 110.27 interest on the bonds is or becomes subject to federal income 110.28 taxation, this fact does not affect the validity or the 110.29 provisions made for the security of the bonds. The society may 110.30 make covenants and take or have taken actions that are in its 110.31 judgment necessary or desirable to comply with conditions 110.32 established by federal law or regulations for the exemption of 110.33 interest on its obligations. The society may refrain from 110.34 compliance with those conditions if in its judgment this would 110.35 serve the purposes and policies set forth in this chapter with 110.36 respect to any particular issue of bonds, unless this would 111.1 violate covenants made by the society. The maximum maturity of 111.2 a bond, whether or not issued for the purpose of refunding, must 111.3 be 30 years from its date. The bonds of the society may be sold 111.4 at public or private sale, at a price or prices determined by 111.5 the society; provided that: 111.6 (1) the aggregate price at which an issue of bonds is 111.7 initially offered by underwriters to investors, as stated in the 111.8 authority's official statement with respect to the offering, 111.9 must not exceed by more than three percent the aggregate price 111.10 paid by the underwriters to the society at the time of delivery; 111.11 (2) the commission paid by the society to an underwriter 111.12 for placing an issue of bonds with investors must not exceed 111.13 three percent of the aggregate price at which the issue is 111.14 offered to investors as stated in the society's offering 111.15 statement; and 111.16 (3) the spread or commission must be an amount determined 111.17 by the society to be reasonable in light of the risk assumed and 111.18 the expenses of issuance, if any, required to be paid by the 111.19 underwriters. 111.20 Subd. 5. [EXEMPTION.] The notes and bonds of the society 111.21 are not subject to sections 16C.03, subdivision 4, and 16C.05. 111.22 Subd. 6. [RESERVES; FUNDS; ACCOUNTS.] The society may 111.23 establish reserves, funds, or accounts necessary to carry out 111.24 the purposes of the society or to comply with any agreement made 111.25 by or any resolution passed by the society. 111.26 Sec. 2. [37.32] [TENDER OPTION.] 111.27 An obligation may be issued giving its owner the right to 111.28 tender or the society to demand tender of the obligation to the 111.29 society or another person designated by it, for purchase at a 111.30 specified time or times, if the society has first entered into 111.31 an agreement with a suitable financial institution obligating 111.32 the financial institution to provide funds on a timely basis for 111.33 purchase of bonds tendered. The obligation is not considered to 111.34 mature on any tender date and the purchase of a tendered 111.35 obligation is not considered a payment or discharge of the 111.36 obligation by the society. Obligations tendered for purchase 112.1 may be remarketed by or on behalf of the society or another 112.2 purchaser. The society may enter into agreements it considers 112.3 appropriate to provide for the purchase and remarketing of 112.4 tendered obligations, including: 112.5 (1) provisions under which undelivered obligations may be 112.6 considered tendered for purchase and new obligations may be 112.7 substituted for them; 112.8 (2) provisions for the payment of charges of tender agents, 112.9 remarketing agents, and financial institutions extending lines 112.10 of credit or letters of credit assuring repurchase; and 112.11 (3) provisions for reimbursement of advances under letters 112.12 of credit that may be paid from the proceeds of the obligations 112.13 or from tax and other revenues appropriated for the payment and 112.14 security of the obligations and similar or related provisions. 112.15 Sec. 3. [37.33] [BOND FUND.] 112.16 Subdivision 1. [CREATION AND CONTENTS.] The society may 112.17 establish a special fund or funds for the security of one or 112.18 more or all series of its bonds. The funds must be known as 112.19 debt service reserve funds. The society may pay into each debt 112.20 service reserve fund: 112.21 (1) the proceeds of sale of bonds to the extent provided in 112.22 the resolution or indenture authorizing the issuance of them; 112.23 (2) money directed to be transferred by the society to the 112.24 debt service reserve fund; and 112.25 (3) other money made available to the society from any 112.26 other source only for the purpose of the fund. 112.27 Subd. 2. [USE OF FUNDS.] Except as provided in this 112.28 section, the money credited to each debt service reserve fund 112.29 must be used only for the payment of the principal of bonds of 112.30 the society as they mature, the purchase of the bonds, the 112.31 payment of interest on them, or the payment of any premium 112.32 required when the bonds are redeemed before maturity. Money in 112.33 a debt service reserve fund must not be withdrawn at a time and 112.34 in an amount that reduces the amount of the fund to less than 112.35 the amount the society determines to be reasonably necessary for 112.36 the purposes of the fund. However, money may be withdrawn to 113.1 pay principal or interest due on bonds secured by the fund if 113.2 other money of the society is not available. 113.3 Subd. 3. [INVESTMENT.] Money in a debt service reserve 113.4 fund not required for immediate use may be invested in 113.5 accordance with section 37.07. 113.6 Subd. 4. [MINIMUM AMOUNT OF RESERVE AT ISSUANCE.] If the 113.7 society establishes a debt service reserve fund for the security 113.8 of any series of bonds, it shall not issue additional bonds that 113.9 are similarly secured if the amount of any of the debt service 113.10 reserve funds at the time of issuance does not equal or exceed 113.11 the minimum amount required by the resolution creating the fund, 113.12 unless the society deposits in each fund at the time of 113.13 issuance, from the proceeds of the bonds, or otherwise, an 113.14 amount that when added together with the amount then in the fund 113.15 will be at least the minimum amount required. 113.16 Subd. 5. [TRANSFER OF EXCESS.] To the extent consistent 113.17 with the resolutions and indentures securing outstanding bonds, 113.18 the society may at the close of a fiscal year transfer to any 113.19 other fund or account from any debt service reserve fund any 113.20 excess in that reserve fund over the amount determined by the 113.21 society to be reasonably necessary for the purpose of the 113.22 reserve fund. 113.23 Sec. 4. [37.34] [MONEY OF THE SOCIETY.] 113.24 The society may contract with the holders of any of its 113.25 bonds as to the custody, collection, securing, investment, and 113.26 payment of money of the society or money held in trust or 113.27 otherwise for the payment of bonds, and to carry out the 113.28 contract. Money held in trust or otherwise for the payment of 113.29 bonds or in any way to secure bonds and deposits of the money 113.30 may be secured in the same manner as money of the society, and 113.31 all banks and trust companies are authorized to give security 113.32 for the deposits. 113.33 Sec. 5. [37.35] [NONLIABILITY.] 113.34 Subdivision 1. [NONLIABILITY OF INDIVIDUALS.] No member of 113.35 the society or other person executing the bonds is liable 113.36 personally on the bonds or is subject to any personal liability 114.1 or accountability by reason of their issuance. 114.2 Subd. 2. [NONLIABILITY OF STATE.] The state is not liable 114.3 on bonds of the society issued under section 37.31 and those 114.4 bonds are not a debt of the state. The bonds must contain on 114.5 their face a statement to that effect. 114.6 Sec. 6. [37.36] [PURCHASE AND CANCELLATION BY SOCIETY.] 114.7 Subject to agreements with bondholders that may then exist, 114.8 the society may purchase out of money available for the purpose, 114.9 bonds of the society which shall then be canceled, at a price 114.10 not exceeding the following amounts: 114.11 (1) if the bonds are then redeemable, the redemption price 114.12 then applicable plus accrued interest to the next interest 114.13 payment date of the bonds; or 114.14 (2) if the bonds are not redeemable, the redemption price 114.15 applicable on the first date after the purchase upon which the 114.16 bonds become subject to redemption plus accrued interest to that 114.17 date. 114.18 Sec. 7. [37.37] [STATE PLEDGE AGAINST IMPAIRMENT OF 114.19 CONTRACTS.] 114.20 The state pledges and agrees with the holders of bonds 114.21 issued under section 37.31 that the state will not limit or 114.22 alter the rights vested in the society to fulfill the terms of 114.23 any agreements made with the bondholders or in any way impair 114.24 the rights and remedies of the holders until the bonds, together 114.25 with interest on them, with interest on any unpaid installments 114.26 of interest, and all costs and expenses in connection with any 114.27 action or proceeding by or on behalf of the bondholders, are 114.28 fully met and discharged. The society may include this pledge 114.29 and agreement of the state in any agreement with the holders of 114.30 bonds issued under section 37.31. 114.31 Sec. 8. Minnesota Statutes 2002, section 373.01, 114.32 subdivision 3, is amended to read: 114.33 Subd. 3. [CAPITAL NOTES.] A county board may, by 114.34 resolution and without referendum, issue capital notes subject 114.35 to the county debt limit to purchase capital equipment useful 114.36 for county purposes that has an expected useful life at least 115.1 equal to the term of the notes. The notes shall be payable in 115.2 not more than five years and shall be issued on terms and in a 115.3 manner the board determines. A tax levy shall be made for 115.4 payment of the principal and interest on the notes, in 115.5 accordance with section 475.61, as in the case of bonds. For 115.6 purposes of this subdivision, "capital equipment" means public 115.7 safety, ambulance, road construction or maintenance, and medical 115.8, and data processingequipment, and computer hardware and 115.9 original operating system software. 115.10 Sec. 9. Minnesota Statutes 2002, section 373.45, 115.11 subdivision 1, is amended to read: 115.12 Subdivision 1. [DEFINITIONS.] (a) As used in this section, 115.13 the following terms have the meanings given. 115.14 (b) "Authority" means the Minnesota public facilities 115.15 authority. 115.16 (c) "Commissioner" means the commissioner of finance. 115.17 (d) "Debt obligation" means a general obligation bond 115.18 issued by a county, or a bond payable from a county lease 115.19 obligation under section 641.24, to provide funds for the 115.20 construction of: 115.21 (1) jails; 115.22 (2) correctional facilities; 115.23 (3) law enforcement facilities; 115.24 (4) social services and human services facilities; or 115.25 (5) solid waste facilities. 115.26 Sec. 10. Minnesota Statutes 2002, section 373.47, 115.27 subdivision 1, is amended to read: 115.28 Subdivision 1. [AUTHORITY TO INCUR DEBT.](a)Subject to 115.29 prior approval by the public safety radio system planning 115.30 committee under section 473.907, the governing body of a county 115.31 may finance the cost of designing, constructing, and acquiring 115.32 public safety communication system infrastructure and equipment 115.33 for use on the statewide, shared public safety radio system by 115.34 issuing: 115.35 (1) capital improvement bonds under section 373.40, as if 115.36 the infrastructure and equipment qualified as a "capital 116.1 improvement" within the meaning of section 373.40, subdivision 116.2 1, paragraph (b); and 116.3 (2) capital notes under the provisions of section 373.01, 116.4 subdivision 3, as if the equipment qualified as "capital 116.5 equipment" within the meaning of section 373.01, subdivision 3. 116.6(b) For purposes of this section, "county" means the116.7following counties: Anoka, Benton, Carver, Chisago, Dakota,116.8Dodge, Fillmore, Freeborn, Goodhue, Hennepin, Houston, Isanti,116.9Mower, Olmsted, Ramsey, Rice, Scott, Sherburne, Steele, Wabasha,116.10Washington, Wright, and Winona.116.11(c) The authority to incur debt under this section is not116.12effective until July 1, 2003, for the following counties:116.13Benton, Dodge, Fillmore, Freeborn, Goodhue, Houston, Mower,116.14Olmsted, Rice, Sherburne, Steele, Wabasha, Wright, and Winona.116.15 Sec. 11. Minnesota Statutes 2002, section 376.009, is 116.16 amended to read: 116.17 376.009 [COUNTY HOSPITAL DEFINED; MAY HAVE MANY BUILDINGS, 116.18 SITES.] 116.19 For the purposes of sections 376.01 to 376.06, "county 116.20 hospital" means any hospital owned or operated by a county which 116.21 may consist of any number of buildings at one location or any 116.22 number of buildings at different locations within the 116.23 county. The county board of any county that has not established 116.24 a county hospital may by resolution authorize a statutory or 116.25 home rule charter city in the county and its city council to 116.26 exercise the powers of a county and the county board under 116.27 sections 376.01 to 376.07, in which case references in sections 116.28 376.01 to 376.07 to "county" and "county board" refer to the 116.29 city so designated and its governing body, respectively. 116.30 Sec. 12. Minnesota Statutes 2002, section 376.55, 116.31 subdivision 3, is amended to read: 116.32 Subd. 3. [FINANCING.] The county board may transfer 116.33 surplus funds from any fund except the road and bridge, sinking 116.34 or drainage ditch funds for the purpose of 116.35 establishing, acquiring, maintaining, enlarging, or adding to a 116.36 county nursing home. When surplus funds are not available for 117.1 transfer, a county board may issue bonds to pay the cost of 117.2 establishing, acquiring, equipping, furnishing, enlarging, or 117.3 adding to a county nursing home, subject to section 376.56. 117.4 Sec. 13. Minnesota Statutes 2002, section 376.55, is 117.5 amended by adding a subdivision to read: 117.6 Subd. 7. [CITY POWERS.] The county board of any county 117.7 that has not established a nursing home may by resolution 117.8 authorize a statutory or home rule charter city within the 117.9 county to exercise the powers of a county under sections 376.55 117.10 to 376.60. A city so designated may exercise within its 117.11 boundaries all the powers of a county under sections 376.55 to 117.12 376.60. 117.13 Sec. 14. Minnesota Statutes 2002, section 376.56, 117.14 subdivision 3, is amended to read: 117.15 Subd. 3. [CHAPTER 475 BONDS.] Bonds issued under section 117.16 376.55, subdivision 3, may be general obligations of the county 117.17 and may be issued and sold, and taxes levied for their payment 117.18 as provided under chapter 475. No election shall be required to 117.19 authorize the bond issue for acquiring, improving, remodeling, 117.20 or replacing an existing nursing home without increasing the 117.21 total number of accommodations for residents in all nursing 117.22 homes in the county. The revenues of the nursing home shall 117.23 also be pledged for the payment of the bonds and for any 117.24 interest and premium. Part of the proceeds may be deposited in 117.25 the debt service fund for the issue, to capitalize interest and 117.26 create a reserve to reduce or eliminate the tax otherwise 117.27 required by section 475.61 to be levied before issuing the 117.28 bonds. The remaining proceeds from the sale of the bonds and 117.29 any surplus funds transferred under section 376.55, subdivision 117.30 3 must be credited to and deposited in the county nursing home 117.31 building fund of the county in which the nursing home is located. 117.32 Sec. 15. Minnesota Statutes 2002, section 383B.77, 117.33 subdivision 1, is amended to read: 117.34 Subdivision 1. [CREATION.] The Hennepin county housing and 117.35 redevelopment authority is created in the county of Hennepin. 117.36 It shall have all of the powers and duties of a housing and 118.1 redevelopment authority under sections 469.001 to 469.047. For 118.2 the purposes of applying the municipal housing and redevelopment 118.3 act to Hennepin county, the county has all of the powers and 118.4 duties of a city, the county board has all the powers and duties 118.5 of a governing body, the chair of the county board has all of 118.6 the powers and duties of a mayor, and, notwithstanding section 118.7 469.008, the area of operation includes the area within the 118.8 territorial boundaries of the county. 118.9 Sec. 16. Minnesota Statutes 2002, section 383B.77, 118.10 subdivision 2, is amended to read: 118.11 Subd. 2. [LIMITATION.] This section does not limit or 118.12 restrict any existing housing and redevelopment authority or 118.13 prevent a municipality from creating an authority. For purposes 118.14 of this subdivision, "housing and redevelopment authority" 118.15 includes any municipal department, agency, or authority of the 118.16 city of Minneapolis which exercises the powers of a housing and 118.17 redevelopment authority pursuant to section 469.003 or other 118.18 law. The county authority shall notify a municipal authority by 118.19 January 31 of each year as to the activities the county 118.20 authority plans to participate in within the municipality. The 118.21 municipal authority shall notify the county authority within 45 118.22 days of the date of the notice from the county authority, if the 118.23 municipal authority does not consent to the activities of the 118.24 county authority.The county authority shall not exercise its118.25powers in a municipality where a housing and redevelopment118.26authority was created under Minnesota Statutes 1969, chapter118.27462, before June 8, 1971, except as provided in this118.28subdivision.If a city housing and redevelopment authority 118.29 requests the county housing and redevelopment authority to 118.30 exercise any power or perform any function of the municipal 118.31 authority, the county authority may do so. 118.32 Sec. 17. Minnesota Statutes 2002, section 410.32, is 118.33 amended to read: 118.34 410.32 [CITIES MAY ISSUE CAPITAL NOTES TO BUY CAPITAL 118.35 EQUIPMENT.] 118.36 Notwithstanding any contrary provision of other law or 119.1 charter, a home rule charter city may, by resolution and without 119.2 public referendum, issue capital notes subject to the city debt 119.3 limit to purchase public safety equipment, ambulance and other 119.4 medical equipment, road construction and maintenance equipment, 119.5 and other capital equipmenthavingand computer hardware and 119.6 original operating system software, provided the equipment or 119.7 software has an expected useful life at least as long as the 119.8 term of the notes. The notes shall be payable in not more than 119.9 five years and be issued on terms and in the manner the city 119.10 determines. The total principal amount of the capital notes 119.11 issued in a fiscal year shall not exceed 0.03 percent of the 119.12 market value of taxable property in the city for that year. A 119.13 tax levy shall be made for the payment of the principal and 119.14 interest on the notes, in accordance with section 475.61, as in 119.15 the case of bonds. Notes issued under this section shall 119.16 require an affirmative vote of two-thirds of the governing body 119.17 of the city. Notwithstanding a contrary provision of other law 119.18 or charter, a home rule charter city may also issue capital 119.19 notes subject to its debt limit in the manner and subject to the 119.20 limitations applicable to statutory cities pursuant to section 119.21 412.301. 119.22 Sec. 18. [410.326] [CAPITAL IMPROVEMENT BONDS.] 119.23 Subdivision 1. [DEFINITIONS.] For purposes of this 119.24 section, the following terms have the meanings given. 119.25 (a) "Bonds" mean an obligation defined under section 475.51. 119.26 (b) "Capital improvement" means acquisition or betterment 119.27 of public lands, development rights in the form of conservation 119.28 easements under chapter 84C, buildings or other improvements for 119.29 the purpose of a city hall, administrative building, public 119.30 safety, public works facility, parks, library, and roads and 119.31 bridges. An improvement must have an expected useful life of 119.32 five years or more to qualify. Capital improvement does not 119.33 include light rail transit or any activity related to it or to a 119.34 recreational or sports facility building, including, but not 119.35 limited to, a gymnasium, ice arena, racquet sports facility, 119.36 swimming pool, exercise room, or health spa, unless the building 120.1 is part of an outdoor park and is incidental to the primary 120.2 purpose of outdoor recreation. 120.3 (c) "City" means a home rule charter or statutory city. 120.4 Subd. 2. [ELECTION REQUIREMENT.] (a) Bonds issued by a 120.5 city to finance capital improvements under an approved capital 120.6 improvements plan are not subject to the election requirements 120.7 of section 475.58. The bonds are subject to the net debt limits 120.8 under section 475.53. The bonds must be approved by an 120.9 affirmative vote of three-fifths of the members of a five-member 120.10 city council. In the case of a city council having more than 120.11 five members, the bonds must be approved by a vote of at least 120.12 two-thirds of the city council. 120.13 (b) Before the issuance of bonds qualifying under this 120.14 section, the city must publish a notice of its intention to 120.15 issue the bonds and the date and time of the hearing to obtain 120.16 public comment on the matter. The notice must be published in 120.17 the official newspaper of the city or in a newspaper of general 120.18 circulation in the city. Additionally, the notice may be posted 120.19 on the official Web site, if any, of the city. The notice must 120.20 be published at least 14 but not more than 28 days before the 120.21 date of the hearing. 120.22 (c) A city may issue the bonds only after obtaining the 120.23 approval of a majority of the voters voting on the question of 120.24 issuing the obligations, if a petition requesting a vote on the 120.25 issuance is signed by voters equal to five percent of the votes 120.26 cast in the city in the last general election and is filed with 120.27 the city clerk within 30 days after the public hearing. The 120.28 commissioner of revenue shall prepare a suggested form of the 120.29 question to be presented at the election. 120.30 Subd. 3. [CAPITAL IMPROVEMENT PLAN.] (a) A city may adopt 120.31 a capital improvement plan. The plan must cover at least a 120.32 five-year period beginning with the date of its adoption. The 120.33 plan must set forth the estimated schedule, timing, and details 120.34 of specific capital improvements by year, together with the 120.35 estimated cost, the need for the improvement, and sources of 120.36 revenue to pay for the improvement. In preparing the capital 121.1 improvement plan, the city council must consider for each 121.2 project and for the overall plan: 121.3 (1) the condition of the city's existing infrastructure, 121.4 including the projected need for repair or replacement; 121.5 (2) the likely demand for the improvement; 121.6 (3) the estimated cost of the improvement; 121.7 (4) the available public resources; 121.8 (5) the level of overlapping debt in the city; 121.9 (6) the relative benefits and costs of alternative uses of 121.10 the funds; 121.11 (7) operating costs of the proposed improvements; and 121.12 (8) alternatives for providing services most efficiently 121.13 through shared facilities with other cities or local government 121.14 units. 121.15 (b) The capital improvement plan and annual amendments to 121.16 it must be approved by the city council after public hearing. 121.17 Subd. 4. [LIMITATIONS ON AMOUNT.] A city may not issue 121.18 bonds under this section if the maximum amount of principal and 121.19 interest to become due in any year on all the outstanding bonds 121.20 issued under this section, including the bonds to be issued, 121.21 will equal or exceed 0.05367 percent of taxable market value of 121.22 property in the county. Calculation of the limit must be made 121.23 using the taxable market value for the taxes payable year in 121.24 which the obligations are issued and sold. This section does 121.25 not limit the authority to issue bonds under any other special 121.26 or general law. 121.27 Subd. 5. [APPLICATION OF CHAPTER 475.] Bonds to finance 121.28 capital improvements qualifying under this section must be 121.29 issued under the issuance authority in chapter 475 and the 121.30 provisions of chapter 475 apply, except as otherwise 121.31 specifically provided in this section. 121.32 Sec. 19. Minnesota Statutes 2002, section 412.301, is 121.33 amended to read: 121.34 412.301 [FINANCING PURCHASE OF CERTAIN EQUIPMENT.] 121.35 The council may issue certificates of indebtedness or 121.36 capital notes subject to the city debt limits to purchase public 122.1 safety equipment, ambulance equipment, road construction or 122.2 maintenance equipment, and other capital equipmenthavingand 122.3 computer hardware and original operating system software, 122.4 provided the equipment or software has an expected useful life 122.5 at least as long as the terms of the certificates or notes. 122.6 Such certificates or notes shall be payable in not more than 122.7 five yearsandexcept that certificates or notes issued after 122.8 June 30, 2003, and before July 1, 2008, shall be payable in not 122.9 more than ten years. The certificates or notes shall be issued 122.10 on such terms and in such manner as the council may determine. 122.11 If the amount of the certificates or notes to be issued to 122.12 finance any such purchase exceeds 0.25 percent of the market 122.13 value of taxable property in the city, they shall not be issued 122.14 for at least ten days after publication in the official 122.15 newspaper of a council resolution determining to issue them; and 122.16 if before the end of that time, a petition asking for an 122.17 election on the proposition signed by voters equal to ten 122.18 percent of the number of voters at the last regular municipal 122.19 election is filed with the clerk, such certificates or notes 122.20 shall not be issued until the proposition of their issuance has 122.21 been approved by a majority of the votes cast on the question at 122.22 a regular or special election. A tax levy shall be made for the 122.23 payment of the principal and interest on such certificates or 122.24 notes, in accordance with section 475.61, as in the case of 122.25 bonds. 122.26 Sec. 20. Minnesota Statutes 2002, section 469.175, 122.27 subdivision 3, is amended to read: 122.28 Subd. 3. [MUNICIPALITY APPROVAL.] A county auditor shall 122.29 not certify the original net tax capacity of a tax increment 122.30 financing district until the tax increment financing plan 122.31 proposed for that district has been approved by the municipality 122.32 in which the district is located. If an authority that proposes 122.33 to establish a tax increment financing district and the 122.34 municipality are not the same, the authority shall apply to the 122.35 municipality in which the district is proposed to be located and 122.36 shall obtain the approval of its tax increment financing plan by 123.1 the municipality before the authority may use tax increment 123.2 financing. The municipality shall approve the tax increment 123.3 financing plan only after a public hearing thereon after 123.4 published notice in a newspaper of general circulation in the 123.5 municipality at least once not less than ten days nor more than 123.6 30 days prior to the date of the hearing. The published notice 123.7 must include a map of the area of the district from which 123.8 increments may be collected and, if the project area includes 123.9 additional area, a map of the project area in which the 123.10 increments may be expended. The hearing may be held before or 123.11 after the approval or creation of the project or it may be held 123.12 in conjunction with a hearing to approve the project. Before or 123.13 at the time of approval of the tax increment financing plan, the 123.14 municipality shall make the following findings, and shall set 123.15 forth in writing the reasons and supporting facts for each 123.16 determination: 123.17 (1) that the proposed tax increment financing district is a 123.18 redevelopment district, a renewal or renovation district, a 123.19 housing district, a soils condition district, or an economic 123.20 development district; if the proposed district is a 123.21 redevelopment district or a renewal or renovation district, the 123.22 reasons and supporting facts for the determination that the 123.23 district meets the criteria of section 469.174, subdivision 10, 123.24 paragraph (a), clauses (1) and (2), or subdivision 10a, must be 123.25 documented in writing and retained and made available to the 123.26 public by the authority until the district has been terminated; 123.27 (2) that the proposed development or redevelopment, in the 123.28 opinion of the municipality, would not reasonably be expected to 123.29 occur solely through private investment within the reasonably 123.30 foreseeable future and that the increased market value of the 123.31 site that could reasonably be expected to occur without the use 123.32 of tax increment financing would be less than the increase in 123.33 the market value estimated to result from the proposed 123.34 development after subtracting the present value of the projected 123.35 tax increments for the maximum duration of the district 123.36 permitted by the plan. The requirements of this clause do not 124.1 apply if the district is a qualified housing district, as 124.2 defined in section 273.1399, subdivision 1; 124.3 (3) that the tax increment financing plan conforms to the 124.4 general plan for the development or redevelopment of the 124.5 municipality as a whole; 124.6 (4) that the tax increment financing plan will afford 124.7 maximum opportunity, consistent with the sound needs of the 124.8 municipality as a whole, for the development or redevelopment of 124.9 the project by private enterprise; 124.10 (5) that the municipality elects the method of tax 124.11 increment computation set forth in section 469.177, subdivision 124.12 3, clause (b), if applicable. 124.13 When the municipality and the authority are not the same, 124.14 the municipality shall approve or disapprove the tax increment 124.15 financing plan within 60 days of submission by the authority. 124.16 When the municipality and the authority are not the same, the 124.17 municipality may not amend or modify a tax increment financing 124.18 plan except as proposed by the authority pursuant to subdivision 124.19 4. Once approved, the determination of the authority to 124.20 undertake the project through the use of tax increment financing 124.21 and the resolution of the governing body shall, except as 124.22 provided in subdivision 9, be conclusive of the findings therein 124.23 and of the public need for the financing. 124.24 Sec. 21. Minnesota Statutes 2002, section 469.175, is 124.25 amended by adding a subdivision to read: 124.26 Subd. 9. [LIMITS ON ACTIONS.] (a) A taxpayer in the county 124.27 where the district is located or another person in interest may 124.28 contest an action as provided in this subdivision. The 124.29 procedure set out in this subdivision is the exclusive means to 124.30 contest: 124.31 (1) the formation and approval or the legality of a 124.32 district, or a tax financing plan or its modification; 124.33 (2) the inclusion of a parcel in a district; or 124.34 (3) the legality of the collection or retention of a tax 124.35 increment from the district, or the legality of the bonds issued 124.36 under a tax increment financing plan based on a defect in the 125.1 formation of the district or the adoption or approval of the 125.2 plan or its modification. 125.3 This restriction applies to proceedings under section 469.1771. 125.4 (b) The contestant must object in writing to the authority 125.5 within 90 days after the adoption of a resolution approving a 125.6 tax increment financing plan under subdivision 3 or modification 125.7 of the plan under subdivision 4. 125.8 (c) After the 90-day period has expired, no government unit 125.9 or state agency may contest the matters described in paragraph 125.10 (a). 125.11 (d) The state auditor retains all rights and powers granted 125.12 to the state auditor under section 469.1771, except to the 125.13 extent otherwise provided in this subdivision. 125.14 (e) If the state auditor files a notice of noncompliance 125.15 with the county attorney regarding a matter limited by this 125.16 subdivision, and the notice is filed after 30 days from the 125.17 adoption of the approving resolution, then in any action begun 125.18 later by the county attorney under section 469.1771, subdivision 125.19 1, paragraph (b), the remedy in district court is limited to the 125.20 remedies that would apply under section 469.1771, subdivision 125.21 2b, paragraphs (c) and (d), for petitions filed by the attorney 125.22 general in tax court under section 469.1771, subdivision 2b, 125.23 paragraph (a). 125.24 Sec. 22. Minnesota Statutes 2002, section 473.39, is 125.25 amended by adding a subdivision to read: 125.26 Subd. 1j. [OBLIGATIONS.] After July 1, 2003, in addition 125.27 to the authority in subdivisions 1a, 1b, 1c, 1d, 1e, 1g, 1h, and 125.28 1i, the council may issue certificates of indebtedness, bonds, 125.29 or other obligations under this section in an amount not 125.30 exceeding $45,000,000 for capital expenditures as prescribed in 125.31 the council's regional transit master plan and transit capital 125.32 improvement program and for related costs, including the costs 125.33 of issuance and sale of the obligations. 125.34 [APPLICATION.] This section applies to the counties of 125.35 Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. 125.36 Sec. 23. Minnesota Statutes 2002, section 475.58, 126.1 subdivision 3b, is amended to read: 126.2 Subd. 3b. [STREET RECONSTRUCTION.] (a) A municipality may, 126.3 without regard to the election requirement under subdivision 1, 126.4 issue and sell obligations for street reconstruction, if the 126.5 following conditions are met: 126.6 (1) the streets are reconstructed under a street 126.7 reconstruction plan that describes the streets to be 126.8 reconstructed, the estimated costs, and any planned 126.9 reconstruction of other streets in the municipality over the 126.10 next five years, and the plan and issuance of the obligations 126.11 has been approved by a vote of all of the members of the 126.12 governing body following a public hearing for which notice has 126.13 been published in the official newspaper at least ten days but 126.14 not more than 28 days prior to the hearing; and 126.15 (2) if a petition requesting a vote on the issuance is 126.16 signed by voters equal to five percent of the votes cast in the 126.17 last municipal general election and is filed with the municipal 126.18 clerk within 30 days of the public hearing, the municipality may 126.19 issue the bonds only after obtaining the approval of a majority 126.20 of the voters voting on the question of the issuance of the 126.21 obligations. 126.22 (b) Obligations issued under this subdivision are subject 126.23 to the debt limit of the municipality and are not excluded from 126.24 net debt under section 475.51, subdivision 4. 126.25 For purposes of this subdivision, street reconstruction includes 126.26 utility replacement and relocation and other activities 126.27 incidental to the street reconstruction, but does not include 126.28 the portion of project cost allocable to widening a street or 126.29 adding curbs and gutters where none previously existed. 126.30 Sec. 24. [BONDS ISSUANCE VALIDATED.] 126.31 The provisions of Minnesota Statutes, sections 373.47, 126.32 subdivision 1, and 473.907, subdivision 3, requiring prior 126.33 review and approval by the public radio safety committee do not 126.34 apply to the general obligation bonds issued by Anoka county in 126.35 a principal amount of $10,500,000 on November 20, 2002. 126.36 [EFFECTIVE DATE.] This section is effective upon compliance 127.1 by the governing body of Anoka county with the provisions of 127.2 Minnesota Statutes, section 645.021. 127.3 Sec. 25. [BUFFALO; CITY BONDS FOR HIGHWAY 55.] 127.4 The city of Buffalo may issue up to $1,300,000 of its 127.5 general obligation bonds to pay for the city's share of costs of 127.6 reconstruction and upgrading of that part of Minnesota trunk 127.7 highway marked 55 that lies within the city of Buffalo. 127.8 The bonds must be issued and sold in accordance with 127.9 Minnesota Statutes, chapter 475, except that the debt need not 127.10 be included within any limit on net debt imposed by Minnesota 127.11 Statutes, chapter 475, and no election is required to authorize 127.12 the bond issue. 127.13 Notwithstanding any other law, including any law enacted 127.14 during the 2003 legislative session whether enacted before or 127.15 after the enactment of this act, the debt or debt service on 127.16 bonds issued under this section is excluded from any levy or 127.17 other taxing limits and is not spending or revenue for purposes 127.18 of calculating local government aids or local government aids 127.19 reductions. 127.20 [EFFECTIVE DATE.] This section is effective the day after 127.21 the governing body of Buffalo and its chief clerical officer 127.22 timely complete their compliance with Minnesota Statutes, 127.23 section 645.021, subdivisions 2 and 3. 127.24 Sec. 26. [CORPORATE STATUS FOR CERTAIN FEDERAL TAX LAW.] 127.25 For purposes of section 1.103-1 of the federal income tax 127.26 regulations, Lewis and Clark Rural Water System, Inc. is hereby 127.27 recognized as a corporation authorized to act on behalf of its 127.28 members, including its Minnesota member governmental units, to 127.29 provide drinking water to their communities and to issue debt 127.30 obligations in its own name on behalf of some or all of its 127.31 members, provided that Minnesota member governmental units are 127.32 not liable for the payment of principal of or interest on such 127.33 obligations. 127.34 Sec. 27. [NURSING HOME BONDS AUTHORIZED.] 127.35 Itasca county may issue bonds under Minnesota Statutes, 127.36 sections 376.55 and 376.56, to finance the construction of a 128.1 35-bed nursing home facility to replace an existing 35-bed 128.2 private facility located in the county. For the purposes of 128.3 Minnesota Statutes, section 376.56, subdivision 3, the 128.4 construction constitutes replacement of an existing nursing home 128.5 without increasing the number of accommodations for residents. 128.6 [EFFECTIVE DATE.] This section is effective the day after 128.7 the governing body of Itasca county and its chief clerical 128.8 officer timely complete their compliance with Minnesota 128.9 Statutes, section 645.021, subdivisions 2 and 3. 128.10 Sec. 28. [VALIDATION OF APPROVAL.] 128.11 Notwithstanding Minnesota Statutes, section 645.021, 128.12 subdivision 3, Laws 1980, chapter 569, sections 2 through 8, 128.13 approved by the board of directors of local government 128.14 information systems by resolution adopted on July 30, 1980, are 128.15 effective as of July 1, 1980, and apply to obligations issued by 128.16 local government information systems after April 1, 2003. 128.17 Sec. 29. [EFFECTIVE DATES.] 128.18 This article is effective the day following final enactment. 128.19 Sections 20 and 21 apply to all districts, regardless of when 128.20 created, and are effective the day following final enactment and 128.21 for all actions commenced after November 13, 2001. 128.22 ARTICLE 6 128.23 DEPARTMENT INCOME, CORPORATE FRANCHISE, AND 128.24 ESTATE TAX INITIATIVES 128.25 Section 1. Minnesota Statutes 2002, section 289A.10, 128.26 subdivision 1, is amended to read: 128.27 Subdivision 1. [RETURN REQUIRED.] In the case of a 128.28 decedent who has an interest in property with a situs in 128.29 Minnesota, the personal representative must submit a Minnesota 128.30 estate tax return to the commissioner, on a form prescribed by 128.31 the commissioner, if: 128.32 (1) a federal estate tax return is required to be filed; or 128.33 (2) the federal gross estate exceeds $700,000 for estates 128.34 of decedents dying after December 31, 2001, and before January 128.35 1, 2004; $850,000 for estates of decedents dying after December 128.36 31, 2003, and before January 1, 2005; $950,000 for estates of 129.1 decedents dying after December 31, 2004, and before January 1, 129.2 2006; and $1,000,000 for estates of decedents dying after 129.3 December 31, 2005. 129.4 The return must contain a computation of the Minnesota 129.5 estate tax due. The return must be signed by the personal 129.6 representative. 129.7 [EFFECTIVE DATE.] This section is effective for estates of 129.8 decedents dying after December 31, 2002. 129.9 Sec. 2. Minnesota Statutes 2002, section 289A.19, 129.10 subdivision 4, is amended to read: 129.11 Subd. 4. [ESTATE TAX RETURNS.] When in the commissioner's 129.12 judgment good cause exists, the commissioner may extend the time 129.13 for filing an estate tax return for not more than six months. 129.14 When an extension to file the federal estate tax return has been 129.15 granted under section 6081 of the Internal Revenue Code, the 129.16 time for filing the estate tax return is extended for that 129.17 period. 129.18 [EFFECTIVE DATE.] This section is effective for estates of 129.19 decedents dying after December 31, 2001. 129.20 Sec. 3. Minnesota Statutes 2002, section 289A.31, is 129.21 amended by adding a subdivision to read: 129.22 Subd. 8. [LIABILITY OF VENDOR FOR REPAYMENT OF REFUND.] If 129.23 an individual income tax refund resulting from claiming an 129.24 education credit under section 290.0674 is paid by means of 129.25 directly depositing the proceeds of the refund into a bank 129.26 account controlled by the vendor of the product or service upon 129.27 which the education credit is based, and the commissioner 129.28 subsequently disallows the credit, the commissioner may seek 129.29 repayment of the refund from the vendor. The amount of the 129.30 repayment must be assessed and collected in the same time and 129.31 manner as an erroneous refund under section 289A.37, subdivision 129.32 2. 129.33 [EFFECTIVE DATE.] This section is effective for refunds 129.34 paid to accounts controlled by a vendor on or after the day 129.35 following final enactment. 129.36 Sec. 4. Minnesota Statutes 2002, section 289A.56, 130.1 subdivision 3, is amended to read: 130.2 Subd. 3. [WITHHOLDING TAX, ENTERTAINER WITHHOLDING TAX, 130.3 WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, ESTATE 130.4 TAX, AND SALES TAX OVERPAYMENTS.] When a refund is due for 130.5 overpayments of withholding tax, entertainer withholding tax, or 130.6 withholding from payments to out-of-state contractors,or estate130.7tax,interest is computed from the date of payment to the date 130.8 the refund is paid or credited. For purposes of this 130.9 subdivision, the date of payment is the later of the date the 130.10 tax was finally due or was paid. 130.11 For the purposes of computing interest on estate tax 130.12 refunds, interest is paid from the later of the date of 130.13 overpayment, the date the estate tax return is due, or the date 130.14 the original estate tax return is filed to the date the refund 130.15 is paid. 130.16 For purposes of computing interest on sales and use tax 130.17 refunds, interest is paid from the date of payment to the date 130.18 the refund is paid or credited, if the refund claim includes a 130.19 detailed schedule reflecting the tax periods covered in the 130.20 claim. If the refund claim submitted does not include a 130.21 detailed schedule reflecting the tax periods covered in the 130.22 claim, interest is computed from the date the claim was filed. 130.23 [EFFECTIVE DATE.] This section is effective for estates of 130.24 decedents dying after December 31, 2003. 130.25 Sec. 5. Minnesota Statutes 2002, section 289A.60, 130.26 subdivision 7, is amended to read: 130.27 Subd. 7. [PENALTY FOR FRIVOLOUS RETURN.] If a taxpayer 130.28 files what purports to be a tax return or a claim for refund but 130.29 which does not contain information on which the substantial 130.30 correctness of the purported return or claim for refund may be 130.31 judged or contains information that on its face shows that the 130.32 purported return or claim for refund is substantially incorrect 130.33 and the conduct is due to a position that is frivolous or a 130.34 desire that appears on the purported return or claim for refund 130.35 to delay or impede the administration of Minnesota tax laws, 130.36 then the individual shall pay a penalty of$500the greater of 131.1 $1,000 or 25 percent of the amount of tax required to be shown 131.2 on the return. In a proceeding involving the issue of whether 131.3 or not a person is liable for this penalty, the burden of proof 131.4 is on the commissioner. 131.5 [EFFECTIVE DATE.] This section is effective for returns 131.6 filed after December 31, 2003. 131.7 Sec. 6. Minnesota Statutes 2002, section 290.01, 131.8 subdivision 19b, is amended to read: 131.9 Subd. 19b. [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 131.10 individuals, estates, and trusts, there shall be subtracted from 131.11 federal taxable income: 131.12 (1) interest income on obligations of any authority, 131.13 commission, or instrumentality of the United States to the 131.14 extent includable in taxable income for federal income tax 131.15 purposes but exempt from state income tax under the laws of the 131.16 United States; 131.17 (2) if included in federal taxable income, the amount of 131.18 any overpayment of income tax to Minnesota or to any other 131.19 state, for any previous taxable year, whether the amount is 131.20 received as a refund or as a credit to another taxable year's 131.21 income tax liability; 131.22 (3) the amount paid to others, less the amount used to 131.23 claim the credit allowed under section 290.0674, not to exceed 131.24 $1,625 for each qualifying child in grades kindergarten to 6 and 131.25 $2,500 for each qualifying child in grades 7 to 12, for tuition, 131.26 textbooks, and transportation of each qualifying child in 131.27 attending an elementary or secondary school situated in 131.28 Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, 131.29 wherein a resident of this state may legally fulfill the state's 131.30 compulsory attendance laws, which is not operated for profit, 131.31 and which adheres to the provisions of the Civil Rights Act of 131.32 1964 and chapter 363. For the purposes of this clause, 131.33 "tuition" includes fees or tuition as defined in section 131.34 290.0674, subdivision 1, clause (1). As used in this clause, 131.35 "textbooks" includes books and other instructional materials and 131.36 equipment purchased or leased for use in elementary and 132.1 secondary schools in teaching only those subjects legally and 132.2 commonly taught in public elementary and secondary schools in 132.3 this state. Equipment expenses qualifying for deduction 132.4 includes expenses as defined and limited in section 290.0674, 132.5 subdivision 1, clause (3). "Textbooks" does not include 132.6 instructional books and materials used in the teaching of 132.7 religious tenets, doctrines, or worship, the purpose of which is 132.8 to instill such tenets, doctrines, or worship, nor does it 132.9 include books or materials for, or transportation to, 132.10 extracurricular activities including sporting events, musical or 132.11 dramatic events, speech activities, driver's education, or 132.12 similar programs. For purposes of the subtraction provided by 132.13 this clause, "qualifying child" has the meaning given in section 132.14 32(c)(3) of the Internal Revenue Code; 132.15 (4) income as provided under section 290.0802; 132.16 (5) to the extent included in federal adjusted gross 132.17 income, income realized on disposition of property exempt from 132.18 tax under section 290.491; 132.19 (6)to the extent not deducted in determining federal132.20taxable income or used to claim the long-term care insurance132.21credit under section 290.0672, the amount paid for health132.22insurance of self-employed individuals as determined under132.23section 162(l) of the Internal Revenue Code, except that the132.24percent limit does not apply. If the individual deducted132.25insurance payments under section 213 of the Internal Revenue132.26Code of 1986, the subtraction under this clause must be reduced132.27by the lesser of:132.28(i) the total itemized deductions allowed under section132.2963(d) of the Internal Revenue Code, less state, local, and132.30foreign income taxes deductible under section 164 of the132.31Internal Revenue Code and the standard deduction under section132.3263(c) of the Internal Revenue Code; or132.33(ii) the lesser of (A) the amount of insurance qualifying132.34as "medical care" under section 213(d) of the Internal Revenue132.35Code to the extent not deducted under section 162(1) of the132.36Internal Revenue Code or excluded from income or (B) the total133.1amount deductible for medical care under section 213(a);133.2(7) the exemption amount allowed under Laws 1995, chapter133.3255, article 3, section 2, subdivision 3;133.4(8)to the extent included in federal taxable income, 133.5 postservice benefits for youth community service under section 133.6 124D.42 for volunteer service under United States Code, title 133.7 42, sections 12601 to 12604; 133.8(9)(7) to the extent not deducted in determining federal 133.9 taxable income by an individual who does not itemize deductions 133.10 for federal income tax purposes for the taxable year, an amount 133.11 equal to 50 percent of the excess of charitable contributions 133.12 allowable as a deduction for the taxable year under section 133.13 170(a) of the Internal Revenue Code over $500; 133.14(10)(8) for taxable years beginning before January 1, 133.15 2008, the amount of the federal small ethanol producer credit 133.16 allowed under section 40(a)(3) of the Internal Revenue Code 133.17 which is included in gross income under section 87 of the 133.18 Internal Revenue Code; 133.19(11)(9) for individuals who are allowed a federal foreign 133.20 tax credit for taxes that do not qualify for a credit under 133.21 section 290.06, subdivision 22, an amount equal to the carryover 133.22 of subnational foreign taxes for the taxable year, but not to 133.23 exceed the total subnational foreign taxes reported in claiming 133.24 the foreign tax credit. For purposes of this clause, "federal 133.25 foreign tax credit" means the credit allowed under section 27 of 133.26 the Internal Revenue Code, and "carryover of subnational foreign 133.27 taxes" equals the carryover allowed under section 904(c) of the 133.28 Internal Revenue Code minus national level foreign taxes to the 133.29 extent they exceed the federal foreign tax credit; and 133.30(12)(10) in each of the five tax years immediately 133.31 following the tax year in which an addition is required under 133.32 subdivision 19a, clause (7), an amount equal to one-fifth of the 133.33 delayed depreciation. For purposes of this clause, "delayed 133.34 depreciation" means the amount of the addition made by the 133.35 taxpayer under subdivision 19a, clause (7), minus the positive 133.36 value of any net operating loss under section 172 of the 134.1 Internal Revenue Code generated for the tax year of the 134.2 addition. The resulting delayed depreciation cannot be less 134.3 than zero. 134.4 [EFFECTIVE DATE.] This section is effective for tax years 134.5 beginning after December 31, 2003. 134.6 Sec. 7. Minnesota Statutes 2002, section 290.01, 134.7 subdivision 19d, is amended to read: 134.8 Subd. 19d. [CORPORATIONS; MODIFICATIONS DECREASING FEDERAL 134.9 TAXABLE INCOME.] For corporations, there shall be subtracted 134.10 from federal taxable income after the increases provided in 134.11 subdivision 19c: 134.12 (1) the amount of foreign dividend gross-up added to gross 134.13 income for federal income tax purposes under section 78 of the 134.14 Internal Revenue Code; 134.15 (2) the amount of salary expense not allowed for federal 134.16 income tax purposes due to claiming the federal jobs credit 134.17 under section 51 of the Internal Revenue Code; 134.18 (3) any dividend (not including any distribution in 134.19 liquidation) paid within the taxable year by a national or state 134.20 bank to the United States, or to any instrumentality of the 134.21 United States exempt from federal income taxes, on the preferred 134.22 stock of the bank owned by the United States or the 134.23 instrumentality; 134.24 (4) amounts disallowed for intangible drilling costs due to 134.25 differences between this chapter and the Internal Revenue Code 134.26 in taxable years beginning before January 1, 1987, as follows: 134.27 (i) to the extent the disallowed costs are represented by 134.28 physical property, an amount equal to the allowance for 134.29 depreciation under Minnesota Statutes 1986, section 290.09, 134.30 subdivision 7, subject to the modifications contained in 134.31 subdivision 19e; and 134.32 (ii) to the extent the disallowed costs are not represented 134.33 by physical property, an amount equal to the allowance for cost 134.34 depletion under Minnesota Statutes 1986, section 290.09, 134.35 subdivision 8; 134.36 (5) the deduction for capital losses pursuant to sections 135.1 1211 and 1212 of the Internal Revenue Code, except that: 135.2 (i) for capital losses incurred in taxable years beginning 135.3 after December 31, 1986, capital loss carrybacks shall not be 135.4 allowed; 135.5 (ii) for capital losses incurred in taxable years beginning 135.6 after December 31, 1986, a capital loss carryover to each of the 135.7 15 taxable years succeeding the loss year shall be allowed; 135.8 (iii) for capital losses incurred in taxable years 135.9 beginning before January 1, 1987, a capital loss carryback to 135.10 each of the three taxable years preceding the loss year, subject 135.11 to the provisions of Minnesota Statutes 1986, section 290.16, 135.12 shall be allowed; and 135.13 (iv) for capital losses incurred in taxable years beginning 135.14 before January 1, 1987, a capital loss carryover to each of the 135.15 five taxable years succeeding the loss year to the extent such 135.16 loss was not used in a prior taxable year and subject to the 135.17 provisions of Minnesota Statutes 1986, section 290.16, shall be 135.18 allowed; 135.19 (6) an amount for interest and expenses relating to income 135.20 not taxable for federal income tax purposes, if (i) the income 135.21 is taxable under this chapter and (ii) the interest and expenses 135.22 were disallowed as deductions under the provisions of section 135.23 171(a)(2), 265 or 291 of the Internal Revenue Code in computing 135.24 federal taxable income; 135.25 (7) in the case of mines, oil and gas wells, other natural 135.26 deposits, and timber for which percentage depletion was 135.27 disallowed pursuant to subdivision 19c, clause (11), a 135.28 reasonable allowance for depletion based on actual cost. In the 135.29 case of leases the deduction must be apportioned between the 135.30 lessor and lessee in accordance with rules prescribed by the 135.31 commissioner. In the case of property held in trust, the 135.32 allowable deduction must be apportioned between the income 135.33 beneficiaries and the trustee in accordance with the pertinent 135.34 provisions of the trust, or if there is no provision in the 135.35 instrument, on the basis of the trust's income allocable to 135.36 each; 136.1 (8) for certified pollution control facilities placed in 136.2 service in a taxable year beginning before December 31, 1986, 136.3 and for which amortization deductions were elected under section 136.4 169 of the Internal Revenue Code of 1954, as amended through 136.5 December 31, 1985, an amount equal to the allowance for 136.6 depreciation under Minnesota Statutes 1986, section 290.09, 136.7 subdivision 7; 136.8 (9) amounts included in federal taxable income that are due 136.9 to refunds of income, excise, or franchise taxes based on net 136.10 income or related minimum taxes paid by the corporation to 136.11 Minnesota, another state, a political subdivision of another 136.12 state, the District of Columbia, or a foreign country or 136.13 possession of the United States to the extent that the taxes 136.14 were added to federal taxable income under section 290.01, 136.15 subdivision 19c, clause (1), in a prior taxable year; 136.16 (10) 80 percent of royalties, fees, or other like income 136.17 accrued or received from a foreign operating corporation or a 136.18 foreign corporation which is part of the same unitary business 136.19 as the receiving corporation; 136.20 (11) income or gains from the business of mining as defined 136.21 in section 290.05, subdivision 1, clause (a), that are not 136.22 subject to Minnesota franchise tax; 136.23 (12) the amount of handicap access expenditures in the 136.24 taxable year which are not allowed to be deducted or capitalized 136.25 under section 44(d)(7) of the Internal Revenue Code; 136.26 (13) the amount of qualified research expenses not allowed 136.27 for federal income tax purposes under section 280C(c) of the 136.28 Internal Revenue Code, but only to the extent that the amount 136.29 exceeds the amount of the credit allowed under section 290.068; 136.30 (14) the amount of salary expenses not allowed for federal 136.31 income tax purposes due to claiming the Indian employment credit 136.32 under section 45A(a) of the Internal Revenue Code; 136.33 (15) the amount of any refund of environmental taxes paid 136.34 under section 59A of the Internal Revenue Code; 136.35 (16) for taxable years beginning before January 1, 2008, 136.36 the amount of the federal small ethanol producer credit allowed 137.1 under section 40(a)(3) of the Internal Revenue Code which is 137.2 included in gross income under section 87 of the Internal 137.3 Revenue Code; 137.4 (17) for a corporation whose foreign sales corporation, as 137.5 defined in section 922 of the Internal Revenue Code, constituted 137.6 a foreign operating corporation during any taxable year ending 137.7 before January 1, 1995, and a return was filed by August 15, 137.8 1996, claiming the deduction underthissection 290.21, 137.9 subdivision 4, for income received from the foreign operating 137.10 corporation, an amount equal to 1.23 multiplied by the amount of 137.11 income excluded under section 114 of the Internal Revenue Code, 137.12 provided the income is not income of a foreign operating 137.13 company; 137.14 (18) any decrease in subpart F income, as defined in 137.15 section 952(a) of the Internal Revenue Code, for the taxable 137.16 year when subpart F income is calculated without regard to the 137.17 provisions of section 614 of Public Law Number 107-147; and 137.18 (19) in each of the five tax years immediately following 137.19 the tax year in which an addition is required under subdivision 137.20 19c, clause (16), an amount equal to one-fifth of the delayed 137.21 depreciation. For purposes of this clause, "delayed 137.22 depreciation" means the amount of the addition made by the 137.23 taxpayer under subdivision 19c, clause (16). The resulting 137.24 delayed depreciation cannot be less than zero. 137.25 [EFFECTIVE DATE.] This section is effective the day 137.26 following final enactment. 137.27 Sec. 8. Minnesota Statutes 2002, section 290.06, 137.28 subdivision 2c, is amended to read: 137.29 Subd. 2c. [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 137.30 AND TRUSTS.] (a) The income taxes imposed by this chapter upon 137.31 married individuals filing joint returns and surviving spouses 137.32 as defined in section 2(a) of the Internal Revenue Code must be 137.33 computed by applying to their taxable net income the following 137.34 schedule of rates: 137.35 (1) On the first $25,680, 5.35 percent; 137.36 (2) On all over $25,680, but not over $102,030, 7.05 138.1 percent; 138.2 (3) On all over $102,030, 7.85 percent. 138.3 Married individuals filing separate returns, estates, and 138.4 trusts must compute their income tax by applying the above rates 138.5 to their taxable income, except that the income brackets will be 138.6 one-half of the above amounts. 138.7 (b) The income taxes imposed by this chapter upon unmarried 138.8 individuals must be computed by applying to taxable net income 138.9 the following schedule of rates: 138.10 (1) On the first $17,570, 5.35 percent; 138.11 (2) On all over $17,570, but not over $57,710, 7.05 138.12 percent; 138.13 (3) On all over $57,710, 7.85 percent. 138.14 (c) The income taxes imposed by this chapter upon unmarried 138.15 individuals qualifying as a head of household as defined in 138.16 section 2(b) of the Internal Revenue Code must be computed by 138.17 applying to taxable net income the following schedule of rates: 138.18 (1) On the first $21,630, 5.35 percent; 138.19 (2) On all over $21,630, but not over $86,910, 7.05 138.20 percent; 138.21 (3) On all over $86,910, 7.85 percent. 138.22 (d) In lieu of a tax computed according to the rates set 138.23 forth in this subdivision, the tax of any individual taxpayer 138.24 whose taxable net income for the taxable year is less than an 138.25 amount determined by the commissioner must be computed in 138.26 accordance with tables prepared and issued by the commissioner 138.27 of revenue based on income brackets of not more than $100. The 138.28 amount of tax for each bracket shall be computed at the rates 138.29 set forth in this subdivision, provided that the commissioner 138.30 may disregard a fractional part of a dollar unless it amounts to 138.31 50 cents or more, in which case it may be increased to $1. 138.32 (e) An individual who is not a Minnesota resident for the 138.33 entire year must compute the individual's Minnesota income tax 138.34 as provided in this subdivision. After the application of the 138.35 nonrefundable credits provided in this chapter, the tax 138.36 liability must then be multiplied by a fraction in which: 139.1 (1) the numerator is the individual's Minnesota source 139.2 federal adjusted gross income as defined in section 62 of the 139.3 Internal Revenue Code and increased by the additions required 139.4 under section 290.01, subdivision 19a, clauses (1), (5), and 139.5 (6), and reduced by the Minnesota assignable portion of the 139.6 subtraction for United States government interest under section 139.7 290.01, subdivision 19b, clause (1), after applying the 139.8 allocation and assignability provisions of section 290.081, 139.9 clause (a), or 290.17; and 139.10 (2) the denominator is the individual's federal adjusted 139.11 gross income as defined in section 62 of the Internal Revenue 139.12 Code of 1986, increased by the amounts specified in section 139.13 290.01, subdivision 19a, clauses (1), (5), and (6), and reduced 139.14 by the amounts specified in section 290.01, subdivision 19b, 139.15 clause (1). 139.16 [EFFECTIVE DATE.] This section is effective for tax years 139.17 beginning after December 31, 2002. 139.18 Sec. 9. Minnesota Statutes 2002, section 290.0671, 139.19 subdivision 1, is amended to read: 139.20 Subdivision 1. [CREDIT ALLOWED.] (a) An individual is 139.21 allowed a credit against the tax imposed by this chapter equal 139.22 to a percentage of earned income. To receive a credit, a 139.23 taxpayer must be eligible for a credit under section 32 of the 139.24 Internal Revenue Code. 139.25 (b) For individuals with no qualifying children, the credit 139.26 equals 1.9125 percent of the first $4,620 of earned income. The 139.27 credit is reduced by 1.9125 percent of earned income or modified 139.28 adjusted gross income, whichever is greater, in excess of 139.29 $5,770, but in no case is the credit less than zero. 139.30 (c) For individuals with one qualifying child, the credit 139.31 equals 8.5 percent of the first $6,920 of earned income and 8.5 139.32 percent of earned income over $12,080 but less than $13,450. 139.33 The credit is reduced by 5.73 percent of earned income or 139.34 modified adjusted gross income, whichever is greater, in excess 139.35 of $15,080, but in no case is the credit less than zero. 139.36 (d) For individuals with two or more qualifying children, 140.1 the credit equals ten percent of the first $9,720 of earned 140.2 income and 20 percent of earned income over $14,860 but less 140.3 than $16,800. The credit is reduced by 10.3 percent of earned 140.4 income or modified adjusted gross income, whichever is greater, 140.5 in excess of $17,890, but in no case is the credit less than 140.6 zero. 140.7 (e) For a nonresident or part-year resident, the credit 140.8 must be allocated based on the percentage calculated under 140.9 section 290.06, subdivision 2c, paragraph (e). 140.10 (f) For a person who was a resident for the entire tax year 140.11 and has earned income not subject to tax under this chapter, the 140.12 credit must be allocated based on the ratio of federal adjusted 140.13 gross income reduced by the earned income not subject to tax 140.14 under this chapter over federal adjusted gross income. 140.15 (g) For tax years beginning after December 31, 2001, and 140.16 before December 31, 2004, the $5,770 in paragraph (b)is140.17increased to $6,770, the $15,080 in paragraph (c)is increased140.18to $16,080, and the $17,890 in paragraph (d)is increased to140.19$18,890, after being adjusted for inflation under subdivision 7, 140.20 are each increased by $1,000 for married taxpayers filing joint 140.21 returns. 140.22 (h) For tax years beginning after December 31, 2004, and 140.23 before December 31, 2007, the $5,770 in paragraph (b)is140.24increased to $7,770, the $15,080 in paragraph (c)is increased140.25to $17,080, and the $17,890 in paragraph (d)is increased to140.26$19,890, after being adjusted for inflation under subdivision 7, 140.27 are each increased by $2,000 for married taxpayers filing joint 140.28 returns. 140.29 (i) For tax years beginning after December 31, 2007, and 140.30 before December 31, 2010, the $5,770 in paragraph (b)is140.31increased to $8,770, the $15,080 in paragraph (c)is increased140.32to $18,080, and the $17,890 in paragraph (d)is increased to140.33$20,890, after being adjusted for inflation under subdivision 7, 140.34 are each increased by $3,000 for married taxpayers filing joint 140.35 returns. For tax years beginning after December 31, 2008, the 140.36 $3,000 is adjusted annually for inflation under subdivision 7. 141.1 (j) The commissioner shall construct tables showing the 141.2 amount of the credit at various income levels and make them 141.3 available to taxpayers. The tables shall follow the schedule 141.4 contained in this subdivision, except that the commissioner may 141.5 graduate the transition between income brackets. 141.6 [EFFECTIVE DATE.] This section is effective for tax years 141.7 beginning after December 31, 2002. 141.8 Sec. 10. Minnesota Statutes 2002, section 290.0675, 141.9 subdivision 2, is amended to read: 141.10 Subd. 2. [CREDIT ALLOWED.] A married couple filing a joint 141.11 return is allowed a credit against the tax imposed under section 141.12 290.06. 141.13The minimum taxable income for the married couple to be141.14eligible for the credit is $25,680, and the minimum earned141.15income in order for the couple to be eligible for the credit is141.16$14,250 for each spouse.141.17 [EFFECTIVE DATE.] This section is effective for tax years 141.18 beginning after December 31, 2002. 141.19 Sec. 11. Minnesota Statutes 2002, section 290.0675, 141.20 subdivision 3, is amended to read: 141.21 Subd. 3. [CREDIT AMOUNT.] The credit amount is the 141.22 difference between the tax on the couple's joint Minnesota 141.23 taxable income under the rates and income levels in section 141.24 290.06, subdivision 2c, paragraph (a), as adjusted for the 141.25 taxable year by section 290.06, subdivision 2d, and the sum of 141.26 the tax under the rates and income levels of section 290.06, 141.27 subdivision 2c, paragraph (b), as adjusted for the taxable year 141.28 by section 290.06, subdivision 2d, on the earned income of the 141.29 lesser-earning spouse, and the tax under the rates and income 141.30 levels of section 290.06, subdivision 2c, paragraph (b), as 141.31 adjusted for the taxable year by section 290.06, subdivision 2d, 141.32 on the couple's joint Minnesota taxable income, minus the earned 141.33 income of the lesser-earning spouse. 141.34 The commissioner of revenue shall prepare and make 141.35 available to taxpayers a comprehensive table showing the credit 141.36 under this section at brackets of earnings of the lesser-earning 142.1 spouse and joint taxable income. The brackets of earnings shall 142.2 not be more than $2,000. 142.3 [EFFECTIVE DATE.] This section is effective for tax years 142.4 beginning after December 31, 2002. 142.5 Sec. 12. Minnesota Statutes 2002, section 290.0679, 142.6 subdivision 2, is amended to read: 142.7 Subd. 2. [CONDITIONS FOR ASSIGNMENT.] A qualifying 142.8 taxpayer may assign all or part of an anticipated refund for the 142.9 current and future taxable years to a financial institution or a 142.10 qualifying organization. A financial institution or qualifying 142.11 organization accepting assignment must pay the amount secured by 142.12 the assignment to a third-party vendor. The commissioner of 142.13 children, families, and learning shallprovide a list of142.14categories of, upon request from a third-party vendor, certify 142.15 that the vendor's products and servicesthatqualify for the 142.16 education creditto financial institutions and qualifying142.17organizations. A denial of a certification is subject to the 142.18 contested case procedure under chapter 14. A financial 142.19 institution or qualifying organization that accepts assignments 142.20 under this section must verify as part of the assignment 142.21 documentation that the product or service to be provided by the 142.22 third-party vendorqualifieshas been certified by the 142.23 commissioner of children, families, and learning as qualifying 142.24 for the education credit. The amount assigned for the current 142.25 and future taxable years may not exceed the maximum allowable 142.26 education credit for the current taxable year. Both the 142.27 taxpayer and spouse must consent to the assignment of a refund 142.28 from a joint return. 142.29 [EFFECTIVE DATE.] This section is effective for assignments 142.30 made on or after the day following final enactment. 142.31 Sec. 13. Minnesota Statutes 2002, section 290.0802, 142.32 subdivision 1, is amended to read: 142.33 Subdivision 1. [DEFINITIONS.] For purposes of this 142.34 section, the following terms have the meanings given. 142.35 (a) "Adjusted gross income" means federal adjusted gross 142.36 income as used in section 22(d) of the Internal Revenue Code for 143.1 the taxable year, plus a lump sum distribution as defined in 143.2 section 402(e)(3) of the Internal Revenue Code, and less any 143.3 pension, annuity, or disability benefits included in federal 143.4 gross income but not subject to state taxation other than the 143.5 subtraction allowed under section 290.01, subdivision 19b, 143.6 clause (4). 143.7 (b) "Disability income" means disability income as defined 143.8 in section 22(c)(2)(B)(iii) of the Internal Revenue Code. 143.9 (c) "Nontaxable retirement and disability benefits" means 143.10 the amount of pension, annuity, or disability benefits that 143.11 would be included in the reduction under section 22(c)(3) of the 143.12 Internal Revenue Code and pension, annuity, or disability 143.13 benefits included in federal gross income but not subject to 143.14 state taxationother than the subtraction allowed under section143.15290.01, subdivision 19b, clause (4). 143.16 (d) "Qualified individual" means a qualified individual as 143.17 defined in section 22(b) of the Internal Revenue Code. 143.18(e) "Social security benefits above the second federal143.19threshold" means the amount of social security benefits included143.20in federal taxable income due to the provisions of section 13215143.21of the Omnibus Budget Reconciliation Act of 1993, Public Law143.22Number 103-66.143.23 [EFFECTIVE DATE.] This section is effective for tax years 143.24 beginning after December 31, 2002. 143.25 Sec. 14. Minnesota Statutes 2002, section 291.005, 143.26 subdivision 1, is amended to read: 143.27 Subdivision 1. Unless the context otherwise clearly 143.28 requires, the following terms used in this chapter shall have 143.29 the following meanings: 143.30 (1) "Federal gross estate" means the gross estate of a 143.31 decedent as valued and otherwise determined for federal estate 143.32 tax purposes by federal taxing authorities pursuant to the 143.33 provisions of the Internal Revenue Code. 143.34 (2) "Minnesota gross estate" means the federal gross estate 143.35 of a decedent after (a) excluding therefrom any property 143.36 included therein which has its situs outside Minnesotaand144.1pensions exempt from tax under this chapter pursuant to section144.2352.15, subdivision 1; 353.15, subdivision 1; 354.10,144.3subdivision 1; 354B.30; or 354C.165, and (b) including therein 144.4 any property omitted from the federal gross estate which is 144.5 includable therein, has its situs in Minnesota, and was not 144.6 disclosed to federal taxing authorities. 144.7 (3) "Personal representative" means the executor, 144.8 administrator or other person appointed by the court to 144.9 administer and dispose of the property of the decedent. If 144.10 there is no executor, administrator or other person appointed, 144.11 qualified, and acting within this state, then any person in 144.12 actual or constructive possession of any property having a situs 144.13 in this state which is included in the federal gross estate of 144.14 the decedent shall be deemed to be a personal representative to 144.15 the extent of the property and the Minnesota estate tax due with 144.16 respect to the property. 144.17 (4) "Resident decedent" means an individual whose domicile 144.18 at the time of death was in Minnesota. 144.19 (5) "Nonresident decedent" means an individual whose 144.20 domicile at the time of death was not in Minnesota. 144.21 (6) "Situs of property" means, with respect to real 144.22 property, the state or country in which it is located; with 144.23 respect to tangible personal property, the state or country in 144.24 which it was normally kept or located at the time of the 144.25 decedent's death; and with respect to intangible personal 144.26 property, the state or country in which the decedent was 144.27 domiciled at death. 144.28 (7) "Commissioner" means the commissioner of revenue or any 144.29 person to whom the commissioner has delegated functions under 144.30 this chapter. 144.31 (8) "Internal Revenue Code" means the United States 144.32 Internal Revenue Code of 1986, as amended through December 31, 144.3320002002. 144.34 [EFFECTIVE DATE.] This section is effective for estates of 144.35 decedents dying after December 31, 2002. 144.36 Sec. 15. Minnesota Statutes 2002, section 291.03, 145.1 subdivision 1, is amended to read: 145.2 Subdivision 1. [TAX AMOUNT.] The tax imposed shall be an 145.3 amount equal to the proportion of the maximum credit computed 145.4 under section 2011 of the Internal Revenue Code, as amended 145.5 through December 31, 2000, for state death taxes as the 145.6 Minnesota gross estate bears to the value of the federal gross 145.7 estate.For a resident decedent, the tax shall be the maximum145.8credit computed under section 2011 of the Internal Revenue Code145.9reduced by the amount of the death tax paid the other state and145.10credited against the federal estate tax if this results in a145.11larger amount of tax than the proportionate amount of the145.12credit.The tax determined under this paragraph shall not be 145.13 greater than the federal estate tax computed under section 2001 145.14 of the Internal Revenue Code after the allowance of the federal 145.15 credits allowed under section 2010 of the Internal Revenue Code 145.16 of 1986, as amended through December 31, 2000. For the purposes 145.17 of this section, expenses which are deducted for federal income 145.18 tax purposes under section 642(g) of the Internal Revenue Code 145.19 as amended through December 31, 2002, are not allowable in 145.20 computing the tax under this chapter. 145.21 [EFFECTIVE DATE.] This section is effective for estates of 145.22 decedents dying after December 31, 2002. 145.23 Sec. 16. Minnesota Statutes 2002, section 352.15, 145.24 subdivision 1, is amended to read: 145.25 Subdivision 1. [EXEMPTION; EXCEPTIONS.] None of the money, 145.26 annuities, or other benefits mentioned in this chapter is 145.27 assignable either in law or in equity or subject tostate estate145.28tax, or toexecution, levy, attachment, garnishment, or other 145.29 legal process, except as provided in subdivision 1a or section 145.30 518.58, 518.581, or 518.6111. 145.31 [EFFECTIVE DATE.] This section is effective for estates of 145.32 decedents dying after December 31, 2002. 145.33 Sec. 17. Minnesota Statutes 2002, section 353.15, 145.34 subdivision 1, is amended to read: 145.35 Subdivision 1. [EXEMPTION; EXCEPTIONS.] No money, annuity, 145.36 or benefit provided for in this chapter is assignable or subject 146.1to any state estate tax, orto execution, levy, attachment, 146.2 garnishment, or legal process, except as provided in subdivision 146.3 2 or section 518.58, 518.581, or 518.6111. 146.4 [EFFECTIVE DATE.] This section is effective for estates of 146.5 decedents dying after December 31, 2002. 146.6 Sec. 18. Minnesota Statutes 2002, section 354.10, 146.7 subdivision 1, is amended to read: 146.8 Subdivision 1. [EXEMPTION; EXCEPTIONS.] The right of a 146.9 teacher to take advantage of the benefits provided by this 146.10 chapter, is a personal right only and is not assignable. All 146.11 money to the credit of a teacher's account in the fund or any 146.12 money payable to the teacher from the fund belongs to the state 146.13 of Minnesota until actually paid to the teacher or a beneficiary 146.14 under this chapter. The association may acknowledge a properly 146.15 completed power of attorney form. An assignment or attempted 146.16 assignment of a teacher's interest in the fund, or of the 146.17 beneficiary's interest in the fund, by a teacher or a 146.18 beneficiary is void and exemptfrom taxation under chapter 291146.19andfrom garnishment or levy under attachment or execution, 146.20 except as provided in subdivision 2 or 3, or section 518.58, 146.21 518.581, or 518.6111. 146.22 [EFFECTIVE DATE.] This section is effective for estates of 146.23 decedents dying after December 31, 2002. 146.24 Sec. 19. Minnesota Statutes 2002, section 354B.30, is 146.25 amended to read: 146.26 354B.30 [PROHIBITION ON LOANS OR PRETERMINATION 146.27 DISTRIBUTIONS.] 146.28 (a) No participant may obtain a loan from the plan or 146.29 obtain any distribution from the plan at a time before the 146.30 participant terminates the employment that gave rise to plan 146.31 coverage. 146.32 (b) No amounts to the credit of the plan are assignable 146.33 either in law or in equity,are subject to state estate tax,or 146.34 are subject to execution, levy, attachment, garnishment, or 146.35 other legal process, except as provided in section 518.58, 146.36 518.581, or 518.6111. 147.1 [EFFECTIVE DATE.] This section is effective for estates of 147.2 decedents dying after December 31, 2002. 147.3 Sec. 20. Minnesota Statutes 2002, section 354C.165, is 147.4 amended to read: 147.5 354C.165 [PROHIBITION ON LOANS OR PRETERMINATION 147.6 DISTRIBUTIONS.] 147.7 (a) Except as provided in paragraph (c), no participant may 147.8 obtain a loan or any distribution from the plan before the 147.9 participant terminates the employment that gave rise to plan 147.10 coverage. 147.11 (b) No amounts to the credit of the plan are assignable 147.12 either in law or in equity,are subject to state estate tax,or 147.13 are subject to execution, levy, attachment, garnishment, or 147.14 other legal process, except as provided in section 518.58, 147.15 518.581, or 518.6111. 147.16 (c) Unless prohibited by or subject to a penalty under 147.17 federal law, a teacher who is a participant in the supplemental 147.18 retirement plan may request, in writing, a transfer of all or a 147.19 portion of the funds accumulated in the person's supplemental 147.20 plan account to the teachers retirement association to purchase 147.21 service credit under sections 354.53, 354.533, 354.534, 354.535, 147.22 354.536, 354.537, and 354.538 or to the teachers retirement fund 147.23 association to purchase service credit under sections 354A.097, 147.24 354A.098, 354A.099, 354A.101, 354A.102, 354A.103, and 354A.104. 147.25 Upon receipt of a valid request, the board shall execute the 147.26 transfer. The transfer must be a fund-to-fund transfer, and in 147.27 no event shall the participant directly receive any of the funds 147.28 while still employed by the board. In no event may the board 147.29 transfer more than the participant's account balance. The 147.30 board, in cooperation with the executive director of the 147.31 teachers retirement association, shall develop the forms for 147.32 requesting a transfer and the procedures for executing the 147.33 requested transfers. 147.34 [EFFECTIVE DATE.] This section is effective for estates of 147.35 decedents dying after December 31, 2002. 147.36 Sec. 21. Laws 2001, First Special Session chapter 5, 148.1 article 9, section 12, the effective date, is amended to read: 148.2 [EFFECTIVE DATE.] This section is effective for assignment 148.3 of refunds filed with the commissioner after December 31, 2001. 148.4The time period for filing assignments expires December 31,148.52003, but assignments filed on or before that date remain in148.6effect until satisfied or canceled.148.7 Sec. 22. [REPEALER.] 148.8 (a) Minnesota Statutes 2002, sections 290.0671, subdivision 148.9 3; and 290.0675, subdivision 5, are repealed effective for tax 148.10 years beginning after December 31, 2002. 148.11 (b) Minnesota Rules, parts 8007.0300, subpart 3; 8009.7100; 148.12 8009.7200; 8009.7300; 8009.7400; and 8092.1000, are repealed 148.13 effective the day following final enactment. 148.14 ARTICLE 7 148.15 FEDERAL UPDATE 148.16 Section 1. Minnesota Statutes 2002, section 289A.02, 148.17 subdivision 7, is amended to read: 148.18 Subd. 7. [INTERNAL REVENUE CODE.] Unless specifically 148.19 defined otherwise, "Internal Revenue Code" means the Internal 148.20 Revenue Code of 1986, as amended throughMarch 15December 31, 148.21 2002. 148.22 [EFFECTIVE DATE.] This section is effective the day 148.23 following final enactment. 148.24 Sec. 2. Minnesota Statutes 2002, section 290.01, 148.25 subdivision 19, is amended to read: 148.26 Subd. 19. [NET INCOME.] The term "net income" means the 148.27 federal taxable income, as defined in section 63 of the Internal 148.28 Revenue Code of 1986, as amended through the date named in this 148.29 subdivision, incorporating any elections made by the taxpayer in 148.30 accordance with the Internal Revenue Code in determining federal 148.31 taxable income for federal income tax purposes, and with the 148.32 modifications provided in subdivisions 19a to 19f. 148.33 In the case of a regulated investment company or a fund 148.34 thereof, as defined in section 851(a) or 851(g) of the Internal 148.35 Revenue Code, federal taxable income means investment company 148.36 taxable income as defined in section 852(b)(2) of the Internal 149.1 Revenue Code, except that: 149.2 (1) the exclusion of net capital gain provided in section 149.3 852(b)(2)(A) of the Internal Revenue Code does not apply; 149.4 (2) the deduction for dividends paid under section 149.5 852(b)(2)(D) of the Internal Revenue Code must be applied by 149.6 allowing a deduction for capital gain dividends and 149.7 exempt-interest dividends as defined in sections 852(b)(3)(C) 149.8 and 852(b)(5) of the Internal Revenue Code; and 149.9 (3) the deduction for dividends paid must also be applied 149.10 in the amount of any undistributed capital gains which the 149.11 regulated investment company elects to have treated as provided 149.12 in section 852(b)(3)(D) of the Internal Revenue Code. 149.13 The net income of a real estate investment trust as defined 149.14 and limited by section 856(a), (b), and (c) of the Internal 149.15 Revenue Code means the real estate investment trust taxable 149.16 income as defined in section 857(b)(2) of the Internal Revenue 149.17 Code. 149.18 The net income of a designated settlement fund as defined 149.19 in section 468B(d) of the Internal Revenue Code means the gross 149.20 income as defined in section 468B(b) of the Internal Revenue 149.21 Code. 149.22 The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 149.23 1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 149.24 1616, 1617, 1704(l), and 1704(m) of the Small Business Job 149.25 Protection Act, Public Law Number 104-188, the provisions of 149.26 Public Law Number 104-117, the provisions of sections 313(a) and 149.27 (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 1002, 149.28 1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 1087, 149.29 1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 1601(f)(5) 149.30 and (h), and 1604(d)(1) of the Taxpayer Relief Act of 1997, 149.31 Public Law Number 105-34, the provisions of section 6010 of the 149.32 Internal Revenue Service Restructuring and Reform Act of 1998, 149.33 Public Law Number 105-206, the provisions of section 4003 of the 149.34 Omnibus Consolidated and Emergency Supplemental Appropriations 149.35 Act, 1999, Public Law Number 105-277, and the provisions of 149.36 section 318 of the Consolidated Appropriation Act of 2001, 150.1 Public Law Number 106-554, shall become effective at the time 150.2 they become effective for federal purposes. 150.3 The Internal Revenue Code of 1986, as amended through 150.4 December 31, 1996, shall be in effect for taxable years 150.5 beginning after December 31, 1996. 150.6 The provisions of sections 202(a) and (b), 221(a), 225, 150.7 312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 150.8 (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 150.9 1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 150.10 1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 150.11 of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 150.12 the provisions of sections 6004, 6005, 6012, 6013, 6015, 6016, 150.13 7002, and 7003 of the Internal Revenue Service Restructuring and 150.14 Reform Act of 1998, Public Law Number 105-206, the provisions of 150.15 section 3001 of the Omnibus Consolidated and Emergency 150.16 Supplemental Appropriations Act, 1999, Public Law Number 150.17 105-277, the provisions of section 3001 of the Miscellaneous 150.18 Trade and Technical Corrections Act of 1999, Public Law Number 150.19 106-36, and the provisions of section 316 of the Consolidated 150.20 Appropriation Act of 2001, Public Law Number 106-554, shall 150.21 become effective at the time they become effective for federal 150.22 purposes. 150.23 The Internal Revenue Code of 1986, as amended through 150.24 December 31, 1997, shall be in effect for taxable years 150.25 beginning after December 31, 1997. 150.26 The provisions of sections 5002, 6009, 6011, and 7001 of 150.27 the Internal Revenue Service Restructuring and Reform Act of 150.28 1998, Public Law Number 105-206, the provisions of section 9010 150.29 of the Transportation Equity Act for the 21st Century, Public 150.30 Law Number 105-178, the provisions of sections 1004, 4002, and 150.31 5301 of the Omnibus Consolidation and Emergency Supplemental 150.32 Appropriations Act, 1999, Public Law Number 105-277, the 150.33 provision of section 303 of the Ricky Ray Hemophilia Relief Fund 150.34 Act of 1998, Public Law Number 105-369, the provisions of 150.35 sections 532, 534, 536, 537, and 538 of the Ticket to Work and 150.36 Work Incentives Improvement Act of 1999, Public Law Number 151.1 106-170, the provisions of the Installment Tax Correction Act of 151.2 2000, Public Law Number 106-573, and the provisions of section 151.3 309 of the Consolidated Appropriation Act of 2001, Public Law 151.4 Number 106-554, shall become effective at the time they become 151.5 effective for federal purposes. 151.6 The Internal Revenue Code of 1986, as amended through 151.7 December 31, 1998, shall be in effect for taxable years 151.8 beginning after December 31, 1998. 151.9 The provisions of the FSC Repeal and Extraterritorial 151.10 Income Exclusion Act of 2000, Public Law Number 106-519, and the 151.11 provision of section 412 of the Job Creation and Worker 151.12 Assistance Act of 2002, Public Law Number 107-147, shall become 151.13 effective at the time it became effective for federal purposes. 151.14 The Internal Revenue Code of 1986, as amended through 151.15 December 31, 1999, shall be in effect for taxable years 151.16 beginning after December 31, 1999. The provisions of sections 151.17 306 and 401 of the Consolidated Appropriation Act of 2001, 151.18 Public Law Number 106-554, and the provision of section 151.19 632(b)(2)(A) of the Economic Growth and Tax Relief 151.20 Reconciliation Act of 2001, Public Law Number 107-16, and 151.21 provisions of sections 101 and 402 of the Job Creation and 151.22 Worker Assistance Act of 2002, Public Law Number 107-147, shall 151.23 become effective at the same time it became effective for 151.24 federal purposes. 151.25 The Internal Revenue Code of 1986, as amended through 151.26 December 31, 2000, shall be in effect for taxable years 151.27 beginning after December 31, 2000. The provisions of sections 151.28 659a and 671 of the Economic Growth and Tax Relief 151.29 Reconciliation Act of 2001, Public Law Number 107-16, the 151.30 provisions of sections 104, 105, and 111 of the Victims of 151.31 Terrorism Tax Relief Act of 2001, Public Law Number 107-134, and 151.32 the provisions of sections 201, 403, 413, and 606 of the Job 151.33 Creation and Worker Assistance Act of 2002, Public Law Number 151.34 107-147, shall become effective at the same time it became 151.35 effective for federal purposes. 151.36 The Internal Revenue Code of 1986, as amended through March 152.1 15, 2002, shall be in effect for taxable years beginning after 152.2 December 31, 2001. 152.3 The provisions of sections 101 and 102 of the Victims of 152.4 Terrorism Tax Relief Act of 2001, Public Law Number 107-134, 152.5 shall become effective at the same time it becomes effective for 152.6 federal purposes. 152.7 The Internal Revenue Code of 1986, as amended through 152.8 December 31, 2002, shall be in effect for taxable years 152.9 beginning after December 31, 2002. 152.10 Except as otherwise provided, references to the Internal 152.11 Revenue Code in subdivisions 19a to 19g mean the code in effect 152.12 for purposes of determining net income for the applicable year. 152.13 [EFFECTIVE DATE.] This section is effective the day 152.14 following final enactment. 152.15 Sec. 3. Minnesota Statutes 2002, section 290.01, 152.16 subdivision 31, is amended to read: 152.17 Subd. 31. [INTERNAL REVENUE CODE.] Unless specifically 152.18 defined otherwise, "Internal Revenue Code" means the Internal 152.19 Revenue Code of 1986, as amended throughMarch 15December 31, 152.20 2002. 152.21 [EFFECTIVE DATE.] This section is effective the day 152.22 following final enactment. 152.23 Sec. 4. Minnesota Statutes 2002, section 290A.03, 152.24 subdivision 15, is amended to read: 152.25 Subd. 15. [INTERNAL REVENUE CODE.] "Internal Revenue Code" 152.26 means the Internal Revenue Code of 1986, as amended 152.27 throughMarch 15December 31, 2002. 152.28 [EFFECTIVE DATE.] This section is effective for refunds 152.29 payable for rents paid in 2003 and thereafter and property taxes 152.30 payable in 2004 and thereafter. 152.31 ARTICLE 8 152.32 DEPARTMENT PROPERTY TAX INITIATIVES 152.33 Section 1. Minnesota Statutes 2002, section 270.06, is 152.34 amended to read: 152.35 270.06 [POWERS AND DUTIES.] 152.36 The commissioner of revenue shall: 153.1 (1) have and exercise general supervision over the 153.2 administration of the assessment and taxation laws of the state, 153.3 over assessors, town, county, and city boards of review and 153.4 equalization, and all other assessing officers in the 153.5 performance of their duties, to the end that all assessments of 153.6 property be made relatively just and equal in compliance with 153.7 the laws of the state; 153.8 (2) confer with, advise, and give the necessary 153.9 instructions and directions to local assessors and local boards 153.10 of review throughout the state as to their duties under the laws 153.11 of the state; 153.12 (3) direct proceedings, actions, and prosecutions to be 153.13 instituted to enforce the laws relating to the liability and 153.14 punishment of public officers and officers and agents of 153.15 corporations for failure or negligence to comply with the 153.16 provisions of the laws of this state governing returns of 153.17 assessment and taxation of property, and cause complaints to be 153.18 made against local assessors, members of boards of equalization, 153.19 members of boards of review, or any other assessing or taxing 153.20 officer, to the proper authority, for their removal from office 153.21 for misconduct or negligence of duty; 153.22 (4) require county attorneys to assist in the commencement 153.23 of prosecutions in actions or proceedings for removal, 153.24 forfeiture and punishment for violation of the laws of this 153.25 state in respect to the assessment and taxation of property in 153.26 their respective districts or counties; 153.27 (5) require town, city, county, and other public officers 153.28 to report information as to the assessment of property, 153.29 collection of taxes received from licenses and other sources, 153.30 and such other information as may be needful in the work of the 153.31 department of revenue, in such form and upon such blanks as the 153.32 commissioner may prescribe; 153.33 (6) require individuals, copartnerships, companies, 153.34 associations, and corporations to furnish information concerning 153.35 their capital, funded or other debt, current assets and 153.36 liabilities, earnings, operating expenses, taxes, as well as all 154.1 other statements now required by law for taxation purposes; 154.2 (7) subpoena witnesses, at a time and place reasonable 154.3 under the circumstances, to appear and give testimony, and to 154.4 produce books, records, papers and documents for inspection and 154.5 copying relating to any matter which the commissioner may have 154.6 authority to investigate or determine; 154.7 (8) issue a subpoena which does not identify the person or 154.8 persons with respect to whose liability the subpoena is issued, 154.9 but only if (a) the subpoena relates to the investigation of a 154.10 particular person or ascertainable group or class of persons, 154.11 (b) there is a reasonable basis for believing that such person 154.12 or group or class of persons may fail or may have failed to 154.13 comply with any law administered by the commissioner, (c) the 154.14 information sought to be obtained from the examination of the 154.15 records (and the identity of the person or persons with respect 154.16 to whose liability the subpoena is issued) is not readily 154.17 available from other sources, (d) the subpoena is clear and 154.18 specific as to the information sought to be obtained, and (e) 154.19 the information sought to be obtained is limited solely to the 154.20 scope of the investigation. Provided further that the party 154.21 served with a subpoena which does not identify the person or 154.22 persons with respect to whose tax liability the subpoena is 154.23 issued shall have the right, within 20 days after service of the 154.24 subpoena, to petition the district court for the judicial 154.25 district in which lies the county in which that party is located 154.26 for a determination as to whether the commissioner of revenue 154.27 has complied with all the requirements in (a) to (e), and thus, 154.28 whether the subpoena is enforceable. If no such petition is 154.29 made by the party served within the time prescribed, the 154.30 subpoena shall have the force and effect of a court order; 154.31 (9) cause the deposition of witnesses residing within or 154.32 without the state, or absent therefrom, to be taken, upon notice 154.33 to the interested party, if any, in like manner that depositions 154.34 of witnesses are taken in civil actions in the district court, 154.35 in any matter which the commissioner may have authority to 154.36 investigate or determine; 155.1 (10) investigate the tax laws of other states and countries 155.2 and to formulate and submit to the legislature such legislation 155.3 as the commissioner may deem expedient to prevent evasions of 155.4 assessment and taxing laws, and secure just and equal taxation 155.5 and improvement in the system of assessment and taxation in this 155.6 state; 155.7 (11) consult and confer with the governor upon the subject 155.8 of taxation, the administration of the laws in regard thereto, 155.9 and the progress of the work of the department of revenue, and 155.10 furnish the governor, from time to time, such assistance and 155.11 information as the governor may require relating to tax matters; 155.12 (12) transmit to the governor, on or before the third 155.13 Monday in December of each even-numbered year, and to each 155.14 member of the legislature, on or before November 15 of each 155.15 even-numbered year, the report of the department of revenue for 155.16 the preceding years, showing all the taxable property in the 155.17 state and the value of the same, in tabulated form; 155.18 (13) inquire into the methods of assessment and taxation 155.19 and ascertain whether the assessors faithfully discharge their 155.20 duties, particularly as to their compliance with the laws 155.21 requiring the assessment of all property not exempt from 155.22 taxation; 155.23 (14) administer and enforce the assessment and collection 155.24 of state taxes and fees, including the use of any remedy 155.25 available to nongovernmental creditors, and, from time to time, 155.26 make, publish, and distribute rules for the administration and 155.27 enforcement ofassessments and feeslaws administered by the 155.28 commissioner and state tax laws. The rules have the force of 155.29 law; 155.30 (15) prepare blank forms for the returns required by state 155.31 tax law and distribute them throughout the state, furnishing 155.32 them subject to charge on application; 155.33 (16) prescribe rules governing the qualification and 155.34 practice of agents, attorneys, or other persons representing 155.35 taxpayers before the commissioner. The rules may require that 155.36 those persons, agents, and attorneys show that they are of good 156.1 character and in good repute, have the necessary qualifications 156.2 to give taxpayers valuable services, and are otherwise competent 156.3 to advise and assist taxpayers in the presentation of their case 156.4 before being recognized as representatives of taxpayers. After 156.5 due notice and opportunity for hearing, the commissioner may 156.6 suspend and bar from further practice before the commissioner 156.7 any person, agent, or attorney who is shown to be incompetent or 156.8 disreputable, who refuses to comply with the rules, or who with 156.9 intent to defraud, willfully or knowingly deceives, misleads, or 156.10 threatens a taxpayer or prospective taxpayer, by words, 156.11 circular, letter, or by advertisement. This clause does not 156.12 curtail the rights of individuals to appear in their own behalf 156.13 or partners or corporations' officers to appear in behalf of 156.14 their respective partnerships or corporations; 156.15 (17) appoint agents as the commissioner considers necessary 156.16 to make examinations and determinations. The agents have the 156.17 rights and powers conferred on the commissioner to subpoena, 156.18 examine, and copy books, records, papers, or memoranda, subpoena 156.19 witnesses, administer oaths and affirmations, and take 156.20 testimony. In addition to administrative subpoenas of the 156.21 commissioner and the agents, upon demand of the commissioner or 156.22 an agent, the court administrator of any district court shall 156.23 issue a subpoena for the attendance of a witness or the 156.24 production of books, papers, records, or memoranda before the 156.25 agent for inspection and copying. Disobedience of a court 156.26 administrator's subpoena shall be punished by the district court 156.27 of the district in which the subpoena is issued, or in the case 156.28 of a subpoena issued by the commissioner or an agent, by the 156.29 district court of the district in which the party served with 156.30 the subpoena is located, in the same manner as contempt of the 156.31 district court; 156.32 (18) appoint and employ additional help, purchase supplies 156.33 or materials, or incur other expenditures in the enforcement of 156.34 state tax laws as considered necessary. The salaries of all 156.35 agents and employees provided for in this chapter shall be fixed 156.36 by the appointing authority, subject to the approval of the 157.1 commissioner of administration; 157.2 (19) execute and administer any agreement with the 157.3 secretary of the treasury of the United States or a 157.4 representative of another state regarding the exchange of 157.5 information and administration of the tax laws; 157.6 (20) authorize the use of unmarked motor vehicles to 157.7 conduct seizures or criminal investigations pursuant to the 157.8 commissioner's authority; and 157.9 (21) exercise other powers and perform other duties 157.10 required of or imposed upon the commissioner of revenue by law. 157.11 [EFFECTIVE DATE.] This section is effective the day 157.12 following final enactment. 157.13 Sec. 2. Minnesota Statutes 2002, section 270.10, 157.14 subdivision 1a, is amended to read: 157.15 Subd. 1a. [NOTIFICATION TO TAXPAYER.] At the same time 157.16 that notice of the assessment, determination, or order of the 157.17 commissioner is given to a taxpayer, the taxpayer must be 157.18 notified in writing of the right to appeal to the tax court, and 157.19 if applicable, to the small claims division. Except in the case 157.20 of mathematical or clerical errors, the notice must contain a 157.21 description of the basis for, including applicable law and other 157.22 factors considered in the determination, and a listing of the 157.23 amounts of tax due, interest, additions to tax, and penalties. 157.24 Failure to provide all the required information does not 157.25 invalidate the notice for purposes of satisfying statutory 157.26 notice requirements if the notice contains sufficient 157.27 information to advise the taxpayer that an assessment, order, or 157.28 other determination has been made. The taxpayer may request 157.29 further clarification within the time provided for appealing the 157.30 determination.In any notice of assessment, determination, or157.31order dealing with property valuation or assessment for property157.32tax purposes by the commissioner of revenue or a local unit of157.33government, the taxpayer must be notified in writing that a157.34taxpayer must appeal to the town or city board of equalization157.35and to the county board of equalization before appealing to the157.36small claims division of the tax court, except for those158.1taxpayers whose original assessments are determined by the158.2commissioner of revenue.158.3 [EFFECTIVE DATE.] This section is effective the day 158.4 following final enactment. 158.5 Sec. 3. Minnesota Statutes 2002, section 272.02, is 158.6 amended by adding a subdivision to read: 158.7 Subd. 56. [COMPREHENSIVE HEALTH ASSOCIATION.] All property 158.8 owned by the comprehensive health association is exempt to the 158.9 extent provided in section 62E.10, subdivision 1. 158.10 [EFFECTIVE DATE.] This section is effective the day 158.11 following final enactment. 158.12 Sec. 4. Minnesota Statutes 2002, section 272.02, is 158.13 amended by adding a subdivision to read: 158.14 Subd. 57. [PRIVATE CEMETERIES.] All property owned by 158.15 private cemeteries is exempt to the extent provided in section 158.16 307.09. 158.17 [EFFECTIVE DATE.] This section is effective the day 158.18 following final enactment. 158.19 Sec. 5. Minnesota Statutes 2002, section 272.02, is 158.20 amended by adding a subdivision to read: 158.21 Subd. 58. [WESTERN LAKE SUPERIOR SANITARY BOARD.] All 158.22 property owned, leased, controlled, used, or occupied for 158.23 public, governmental, and municipal purposes by the Western Lake 158.24 Superior Sanitary Board is exempt to the extent provided in 158.25 section 458D.23. 158.26 [EFFECTIVE DATE.] This section is effective the day 158.27 following final enactment. 158.28 Sec. 6. Minnesota Statutes 2002, section 272.02, is 158.29 amended by adding a subdivision to read: 158.30 Subd. 59. [UNFINISHED SALE OR RENTAL PROJECTS.] Unfinished 158.31 sale or rental projects are exempt to the extent provided in 158.32 section 469.155, subdivision 17. 158.33 [EFFECTIVE DATE.] This section is effective the day 158.34 following final enactment. 158.35 Sec. 7. Minnesota Statutes 2002, section 272.02, is 158.36 amended by adding a subdivision to read: 159.1 Subd. 60. [SKYWAYS.] The pedestrian skyway system, 159.2 underground pedestrian concourse, the people mover system, and 159.3 publicly owned parking structures are exempt to the extent 159.4 provided in section 469.127. 159.5 [EFFECTIVE DATE.] This section is effective the day 159.6 following final enactment. 159.7 Sec. 8. Minnesota Statutes 2002, section 272.02, is 159.8 amended by adding a subdivision to read: 159.9 Subd. 61. [MUNICIPAL RECREATION FACILITIES.] All property 159.10 acquired and used by a city is exempt to the extent provided in 159.11 section 471.191, subdivision 4. 159.12 [EFFECTIVE DATE.] This section is effective the day 159.13 following final enactment. 159.14 Sec. 9. Minnesota Statutes 2002, section 272.02, is 159.15 amended by adding a subdivision to read: 159.16 Subd. 62. [WATER AND WASTEWATER TREATMENT 159.17 FACILITIES.] Related facilities owned by water and wastewater 159.18 treatment providers who have contracted with a municipality to 159.19 provide capital intensive public services to the municipality 159.20 are exempt to the extent provided in section 471A.05. 159.21 [EFFECTIVE DATE.] This section is effective the day 159.22 following final enactment. 159.23 Sec. 10. Minnesota Statutes 2002, section 272.12, is 159.24 amended to read: 159.25 272.12 [CONVEYANCES, TAXES PAID BEFORE RECORDING.] 159.26 When: 159.27 (a) a deed or other instrument conveying land, 159.28 (b) a plat of any town site or addition thereto, 159.29 (c) a survey required pursuant to section 508.47, 159.30 (d) a condominium plat subject to chapter 515 or 515A or a 159.31 declaration that contains such a plat, or 159.32 (e) a common interest community plat subject to chapter 159.33 515B or a declaration that contains such a plat, 159.34 is presented to the county auditor for transfer, the auditor 159.35 shall ascertain from the records if there be taxes delinquent 159.36 upon the land described therein, or if it has been sold for 160.1 taxes. An assignment of a sheriff's or referee's certificate of 160.2 sale, when the certificate of sale describes real estate, and 160.3 certificates of redemption from mortgage or lien foreclosure 160.4 sales, when the certificate of redemption encompasses real 160.5 estate and is issued to a junior creditor, are considered 160.6 instruments conveying land for the purposes of this section and 160.7 section 272.121. If there are taxes delinquent, the auditor 160.8 shall certify to the same; and upon payment of such taxes, or in 160.9 case no taxes are delinquent, shall transfer the land upon the 160.10 books of the auditor's office, and note upon the instrument, 160.11 over official signature, the words, "no delinquent taxes and 160.12 transfer entered," or, if the land described has been sold or 160.13 assigned to an actual purchaser for taxes, the words "paid by 160.14 sale of land described within;" and, unless such statement is 160.15 made upon such instrument, the county recorder or the registrar 160.16 of titles shall refuse to receive or record the same; provided, 160.17 that sheriff's or referees' certificates of sale on execution or 160.18 foreclosure of a lien or mortgage, certificates of redemption 160.19 from mortgage or lien foreclosure sales issued to the redeeming 160.20 mortgagor or lienee, deeds of distribution made by a personal 160.21 representative in probate proceedings, decrees and judgments, 160.22 receivers receipts, patents, and copies of town or statutory 160.23 city plats, in case the original plat filed in the office of the 160.24 county recorder has been lost or destroyed, and the instruments 160.25 releasing, removing and discharging reversionary and forfeiture 160.26 provisions affecting title to land and instruments releasing, 160.27 removing or discharging easement rights in land or building or 160.28 other restrictions, may be recorded without such certificate; 160.29 and, provided that instruments conveying land and, as 160.30 appurtenant thereto an easement over adjacent tract or tracts of 160.31 land, may be recorded without such certificate as to the land 160.32 covered by such easement; and provided further, that any 160.33 instrument granting an easement made in favor of any public 160.34 utility or pipe line for conveying gas, liquids or solids in 160.35 suspension, in the nature of a right-of-way over, along, across 160.36 or under a tract of land may be recorded without such 161.1 certificate as to the land covered by such easement.Any161.2instrument amending or restating the declarations, bylaws,161.3plats, or other enablingDocuments governing homeowners 161.4 associations of condominiums, townhouses, common interest 161.5 ownership communities, and other planned unit developments may 161.6 be recorded without the auditor's certificate to the extent 161.7 provided in section 515B.1-116(f). 161.8 A deed of distribution made by a personal representative in 161.9 a probate proceeding, a decree, or a judgment that conveys land 161.10 shall be presented to the county auditor, who shall transfer the 161.11 land upon the books of the auditor's office and note upon the 161.12 instrument, over official signature, the words, "transfer 161.13 entered", and the instrument may then be recorded. A decree or 161.14 judgment that affects title to land but does not convey land may 161.15 be recorded without presentation to the auditor. 161.16 A violation of this section by the county recorder or the 161.17 registrar of titles shall be a gross misdemeanor, and, in 161.18 addition to the punishment therefor, the recorder or registrar 161.19 shall be liable to the grantee of any instrument so recorded for 161.20 the amount of any damages sustained. 161.21 When, as a condition to permitting the recording of deed or 161.22 other instrument affecting the title to real estate previously 161.23 forfeited to the state under the provisions of sections 281.16 161.24 to 281.25, county officials, after such real estate has been 161.25 purchased or repurchased, have required the payment of taxes 161.26 erroneously assumed to have accrued against such real estate 161.27 after forfeiture and before the date of purchase or repurchase, 161.28 the sum required to be so paid shall be refunded to the persons 161.29 entitled thereto out of moneys in the funds in which the sum so 161.30 paid was placed. Delinquent taxes are those taxes deemed 161.31 delinquent under section 279.02. 161.32 [EFFECTIVE DATE.] This section is effective for deeds or 161.33 instruments accepted for recording or registration on or after 161.34 July 1, 2003. 161.35 Sec. 11. Minnesota Statutes 2002, section 273.05, 161.36 subdivision 1, is amended to read: 162.1 Subdivision 1. [APPOINTMENT OF TOWN AND CITY ASSESSORS.] 162.2 Notwithstanding any other provision of law all town assessors 162.3 shall be appointed by the town board, and notwithstanding any 162.4 charter provisions to the contrary, all city assessors shall be 162.5 appointed by the city council or other appointing authority as 162.6 provided by law or charter.Such assessors shall be residents162.7of the state but need not be a resident of the town or city for162.8which they are appointed.They shall be selected and appointed 162.9 because of their knowledge and training in the field of property 162.10 taxation. All town and statutory city assessors shall be 162.11 appointed for indefinite terms. A town or statutory city 162.12 assessor who is an employee may be dismissed by the appointing 162.13 authority for cause. The term of the town or city assessors may 162.14 be terminated at any time by the town board or city council on 162.15 charges by the commissioner of revenue of inefficiency or 162.16 neglect of duty. Vacancies in the office of town or city 162.17 assessor shall be filled within 90 days by appointment of the 162.18 respective appointing authority indicated above. If the vacancy 162.19 is not filled within 90 days, the office shall be terminated. 162.20 When a vacancy in the office of town or city assessor is not 162.21 filled by appointment, and it is imperative that the office of 162.22 assessor be filled, the county auditor shall appoint some 162.23 resident of the county as assessor for such town or city. The 162.24 county auditor may appoint the county assessor as assessor for 162.25 such town or city, in which case the town or city shall pay to 162.26 the county treasurer the amount determined by the county auditor 162.27 to be due for the services performed and expenses incurred by 162.28 the county assessor in acting as assessor for such town or 162.29 city. The term of any town or statutory city assessor in a 162.30 county electing in accordance with section 273.052 shall be 162.31 terminated as provided in section 273.055. 162.32 The commissioner of revenue may recommend to the state 162.33 board of assessors the nonrenewal, suspension, or revocation of 162.34 an assessor's license as provided in sections 270.41 to 270.53. 162.35 [EFFECTIVE DATE.] This section is effective the day 162.36 following final enactment and applies to every town or city 163.1 assessor whether that assessor was appointed before, on, or 163.2 after the effective date. 163.3 Sec. 12. Minnesota Statutes 2002, section 273.061, is 163.4 amended by adding a subdivision to read: 163.5 Subd. 1a. [COMPATIBLE OFFICES.] A person appointed as the 163.6 county assessor also may serve as the county auditor, county 163.7 treasurer, or county auditor-treasurer if those offices are 163.8 appointive, provided that the person in the combined appointed 163.9 office must not serve on the county board of appeal and 163.10 equalization under section 274.13. In a county in which the 163.11 functions of the county assessor are combined with those of the 163.12 county auditor or county auditor-treasurer, the county board may 163.13 not delegate any authority, power, or responsibility under 163.14 section 375.192, subdivision 4. 163.15 Sec. 13. Minnesota Statutes 2002, section 273.061, is 163.16 amended by adding a subdivision to read: 163.17 Subd. 1b. [COMPATIBLE OFFICES IN COUNTIES CHANGING TO 163.18 APPOINTED AUDITOR.] In a county in which the office of auditor, 163.19 treasurer, or auditor-treasurer is an elective position, a 163.20 person appointed as the county assessor also may serve as the 163.21 county auditor, county treasurer, or county auditor-treasurer if 163.22 a proposal to make the affected office appointive has been 163.23 approved as required by other law and will be effective within 163.24 five years. 163.25 Sec. 14. Minnesota Statutes 2002, section 273.061, is 163.26 amended by adding a subdivision to read: 163.27 Subd. 1c. [INCOMPATIBLE OFFICES.] The person appointed as 163.28 the county assessor must not also be the county attorney, a 163.29 county board member, an elected county auditor, an elected 163.30 county treasurer, an elected county auditor-treasurer, a town 163.31 board supervisor for a town in the same county, or a city mayor 163.32 or council member for a city in the same county. The person 163.33 appointed as the city assessor must not also be a city council 163.34 member or mayor for the same city. A person appointed as the 163.35 town assessor must not also be a town board supervisor for the 163.36 same town. Except as provided in subdivision 1b, an assessor 164.1 who accepts a position that is incompatible with the office of 164.2 assessor is deemed to have resigned from the assessor position. 164.3 Sec. 15. Minnesota Statutes 2002, section 273.11, 164.4 subdivision 1a, is amended to read: 164.5 Subd. 1a. [LIMITED MARKET VALUE.] In the case of all 164.6 property classified as agricultural homestead or nonhomestead, 164.7 residential homestead or nonhomestead, timber, or noncommercial 164.8 seasonal residential recreationalresidential, the assessor 164.9 shall compare the value with the taxable portion of the value 164.10 determined in the preceding assessment. 164.11 For assessment year 2002, the amount of the increase shall 164.12 not exceed the greater of (1) ten percent of the value in the 164.13 preceding assessment, or (2) 15 percent of the difference 164.14 between the current assessment and the preceding assessment. 164.15 For assessment year 2003, the amount of the increase shall 164.16 not exceed the greater of (1) 12 percent of the value in the 164.17 preceding assessment, or (2) 20 percent of the difference 164.18 between the current assessment and the preceding assessment. 164.19 For assessment year 2004, the amount of the increase shall 164.20 not exceed the greater of (1) 15 percent of the value in the 164.21 preceding assessment, or (2) 25 percent of the difference 164.22 between the current assessment and the preceding assessment. 164.23 For assessment year 2005, the amount of the increase shall 164.24 not exceed the greater of (1) 15 percent of the value in the 164.25 preceding assessment, or (2) 33 percent of the difference 164.26 between the current assessment and the preceding assessment. 164.27 For assessment year 2006, the amount of the increase shall 164.28 not exceed the greater of (1) 15 percent of the value in the 164.29 preceding assessment, or (2) 50 percent of the difference 164.30 between the current assessment and the preceding assessment. 164.31 This limitation shall not apply to increases in value due 164.32 to improvements. For purposes of this subdivision, the term 164.33 "assessment" means the value prior to any exclusion under 164.34 subdivision 16. 164.35 The provisions of this subdivision shall be in effect 164.36 through assessment year 2006 as provided in this subdivision. 165.1 For purposes of the assessment/sales ratio study conducted 165.2 under section 127A.48, and the computation of state aids paid 165.3 under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and 165.4 477A, market values and net tax capacities determined under this 165.5 subdivision and subdivision 16, shall be used. 165.6 [EFFECTIVE DATE.] This section is effective the day 165.7 following final enactment. 165.8 Sec. 16. Minnesota Statutes 2002, section 273.124, 165.9 subdivision 1, is amended to read: 165.10 Subdivision 1. [GENERAL RULE.] (a) Residential real estate 165.11 that is occupied and used for the purposes of a homestead by its 165.12 owner, who must be a Minnesota resident, is a residential 165.13 homestead. 165.14 Agricultural land, as defined in section 273.13, 165.15 subdivision 23, that is occupied and used as a homestead by its 165.16 owner, who must be a Minnesota resident, is an agricultural 165.17 homestead. 165.18 Dates for establishment of a homestead and homestead 165.19 treatment provided to particular types of property are as 165.20 provided in this section. 165.21 Property held by a trustee under a trust is eligible for 165.22 homestead classification if the requirements under this chapter 165.23 are satisfied. 165.24 The assessor shall require proof, as provided in 165.25 subdivision 13, of the facts upon which classification as a 165.26 homestead may be determined. Notwithstanding any other law, the 165.27 assessor may at any time require a homestead application to be 165.28 filed in order to verify that any property classified as a 165.29 homestead continues to be eligible for homestead status. 165.30 Notwithstanding any other law to the contrary, the department of 165.31 revenue may, upon request from an assessor, verify whether an 165.32 individual who is requesting or receiving homestead 165.33 classification has filed a Minnesota income tax return as a 165.34 resident for the most recent taxable year for which the 165.35 information is available. 165.36 When there is a name change or a transfer of homestead 166.1 property, the assessor may reclassify the property in the next 166.2 assessment unless a homestead application is filed to verify 166.3 that the property continues to qualify for homestead 166.4 classification. 166.5 (b) For purposes of this section, homestead property shall 166.6 include property which is used for purposes of the homestead but 166.7 is separated from the homestead by a road, street, lot, 166.8 waterway, or other similar intervening property. The term "used 166.9 for purposes of the homestead" shall include but not be limited 166.10 to uses for gardens, garages, or other outbuildings commonly 166.11 associated with a homestead, but shall not include vacant land 166.12 held primarily for future development. In order to receive 166.13 homestead treatment for the noncontiguous property, the owner 166.14 must use the property for the purposes of the homestead, and 166.15 must apply to the assessor, both by the deadlines given in 166.16 subdivision 9. After initial qualification for the homestead 166.17 treatment, additional applications for subsequent years are not 166.18 required. 166.19 (c) Residential real estate that is occupied and used for 166.20 purposes of a homestead by a relative of the owner is a 166.21 homestead but only to the extent of the homestead treatment that 166.22 would be provided if the related owner occupied the property. 166.23 For purposes of this paragraph and paragraph (g), "relative" 166.24 means a parent, stepparent, child, stepchild, grandparent, 166.25 grandchild, brother, sister, uncle, aunt, nephew, or niece. 166.26 This relationship may be by blood or marriage. Property that 166.27 has been classified as seasonal residential recreational 166.28residentialproperty at any time during which it has been owned 166.29 by the current owner or spouse of the current owner will not be 166.30 reclassified as a homestead unless it is occupied as a homestead 166.31 by the owner; this prohibition also applies to property that, in 166.32 the absence of this paragraph, would have been classified as 166.33 seasonal residential recreationalresidentialproperty at the 166.34 time when the residence was constructed. Neither the related 166.35 occupant nor the owner of the property may claim a property tax 166.36 refund under chapter 290A for a homestead occupied by a 167.1 relative. In the case of a residence located on agricultural 167.2 land, only the house, garage, and immediately surrounding one 167.3 acre of land shall be classified as a homestead under this 167.4 paragraph, except as provided in paragraph (d). 167.5 (d) Agricultural property that is occupied and used for 167.6 purposes of a homestead by a relative of the owner, is a 167.7 homestead, only to the extent of the homestead treatment that 167.8 would be provided if the related owner occupied the property, 167.9 and only if all of the following criteria are met: 167.10 (1) the relative who is occupying the agricultural property 167.11 is a son, daughter, grandson, granddaughter, father, or mother 167.12 of the owner of the agricultural property or a son, daughter, 167.13 grandson, or granddaughter of the spouse of the owner of the 167.14 agricultural property; 167.15 (2) the owner of the agricultural property must be a 167.16 Minnesota resident; 167.17 (3) the owner of the agricultural property must not receive 167.18 homestead treatment on any other agricultural property in 167.19 Minnesota; and 167.20 (4) the owner of the agricultural property is limited to 167.21 only one agricultural homestead per family under this paragraph. 167.22 Neither the related occupant nor the owner of the property 167.23 may claim a property tax refund under chapter 290A for a 167.24 homestead occupied by a relative qualifying under this 167.25 paragraph. For purposes of this paragraph, "agricultural 167.26 property" means the house, garage, other farm buildings and 167.27 structures, and agricultural land. 167.28 Application must be made to the assessor by the owner of 167.29 the agricultural property to receive homestead benefits under 167.30 this paragraph. The assessor may require the necessary proof 167.31 that the requirements under this paragraph have been met. 167.32 (e) In the case of property owned by a property owner who 167.33 is married, the assessor must not deny homestead treatment in 167.34 whole or in part if only one of the spouses occupies the 167.35 property and the other spouse is absent due to: (1) marriage 167.36 dissolution proceedings, (2) legal separation, (3) employment or 168.1 self-employment in another location, or (4) other personal 168.2 circumstances causing the spouses to live separately, not 168.3 including an intent to obtain two homestead classifications for 168.4 property tax purposes. To qualify under clause (3), the 168.5 spouse's place of employment or self-employment must be at least 168.6 50 miles distant from the other spouse's place of employment, 168.7 and the homesteads must be at least 50 miles distant from each 168.8 other. Homestead treatment, in whole or in part, shall not be 168.9 denied to the owner's spouse who previously occupied the 168.10 residence with the owner if the absence of the owner is due to 168.11 one of the exceptions provided in this paragraph. 168.12 (f) The assessor must not deny homestead treatment in whole 168.13 or in part if: 168.14 (1) in the case of a property owner who is not married, the 168.15 owner is absent due to residence in a nursing home, boarding 168.16 care facility, or an elderly assisted living facility property 168.17 as defined in section 273.13, subdivision 25a, and the property 168.18 is not otherwise occupied; or 168.19 (2) in the case of a property owner who is married, the 168.20 owner or the owner's spouse or both are absent due to residence 168.21 in a nursing home, boarding care facility, or an elderly 168.22 assisted living facility property as defined in section 273.13, 168.23 subdivision 25a, and the property is not occupied or is occupied 168.24 only by the owner's spouse. 168.25 (g) If an individual is purchasing property with the intent 168.26 of claiming it as a homestead and is required by the terms of 168.27 the financing agreement to have a relative shown on the deed as 168.28 a coowner, the assessor shall allow a full homestead 168.29 classification. This provision only applies to first-time 168.30 purchasers, whether married or single, or to a person who had 168.31 previously been married and is purchasing as a single individual 168.32 for the first time. The application for homestead benefits must 168.33 be on a form prescribed by the commissioner and must contain the 168.34 data necessary for the assessor to determine if full homestead 168.35 benefits are warranted. 168.36 (h) If residential or agricultural real estate is occupied 169.1 and used for purposes of a homestead by a child of a deceased 169.2 owner and the property is subject to jurisdiction of probate 169.3 court, the child shall receive relative homestead classification 169.4 under paragraph (c) or (d) to the same extent they would be 169.5 entitled to it if the owner was still living, until the probate 169.6 is completed. For purposes of this paragraph, "child" includes 169.7 a relationship by blood or by marriage. 169.8 [EFFECTIVE DATE.] This section is effective the day 169.9 following final enactment. 169.10 Sec. 17. Minnesota Statutes 2002, section 273.13, 169.11 subdivision 25, is amended to read: 169.12 Subd. 25. [CLASS 4.] (a) Class 4a is residential real 169.13 estate containing four or more units and used or held for use by 169.14 the owner or by the tenants or lessees of the owner as a 169.15 residence for rental periods of 30 days or more. Class 4a also 169.16 includes hospitals licensed under sections 144.50 to 144.56, 169.17 other than hospitals exempt under section 272.02, and contiguous 169.18 property used for hospital purposes, without regard to whether 169.19 the property has been platted or subdivided. The market value 169.20 of class 4a property has a class rate of 1.8 percent for taxes 169.21 payable in 2002, 1.5 percent for taxes payable in 2003, and 1.25 169.22 percent for taxes payable in 2004 and thereafter, except that 169.23 class 4a property consisting of a structure for which 169.24 construction commenced after June 30, 2001, has a class rate of 169.25 1.25 percent of market value for taxes payable in 2003 and 169.26 subsequent years. 169.27 (b) Class 4b includes: 169.28 (1) residential real estate containing less than four units 169.29 that does not qualify as class 4bb, other than seasonal 169.30 residential, andrecreational property; 169.31 (2) manufactured homes not classified under any other 169.32 provision; 169.33 (3) a dwelling, garage, and surrounding one acre of 169.34 property on a nonhomestead farm classified under subdivision 23, 169.35 paragraph (b) containing two or three units; and 169.36 (4) unimproved property that is classified residential as 170.1 determined under subdivision 33. 170.2 The market value of class 4b property has a class rate of 170.3 1.5 percent for taxes payable in 2002, and 1.25 percent for 170.4 taxes payable in 2003 and thereafter. 170.5 (c) Class 4bb includes: 170.6 (1) nonhomestead residential real estate containing one 170.7 unit, other than seasonal residential, andrecreational 170.8 property; and 170.9 (2) a single family dwelling, garage, and surrounding one 170.10 acre of property on a nonhomestead farm classified under 170.11 subdivision 23, paragraph (b). 170.12 Class 4bb property has the same class rates as class 1a 170.13 property under subdivision 22. 170.14 Property that has been classified as seasonalrecreational170.15 residential recreational property at any time during which it 170.16 has been owned by the current owner or spouse of the current 170.17 owner does not qualify for class 4bb. 170.18 (d) Class 4c property includes: 170.19 (1) except as provided in subdivision 22, paragraph (c), 170.20 real property devoted to temporary and seasonal residential 170.21 occupancy for recreation purposes, including real property 170.22 devoted to temporary and seasonal residential occupancy for 170.23 recreation purposes and not devoted to commercial purposes for 170.24 more than 250 days in the year preceding the year of 170.25 assessment. For purposes of this clause, property is devoted to 170.26 a commercial purpose on a specific day if any portion of the 170.27 property is used for residential occupancy, and a fee is charged 170.28 for residential occupancy. In order for a property to be 170.29 classified as class 4c, seasonal residential recreational 170.30residentialfor commercial purposes, at least 40 percent of the 170.31 annual gross lodging receipts related to the property must be 170.32 from business conducted during 90 consecutive days and either 170.33 (i) at least 60 percent of all paid bookings by lodging guests 170.34 during the year must be for periods of at least two consecutive 170.35 nights; or (ii) at least 20 percent of the annual gross receipts 170.36 must be from charges for rental of fish houses, boats and 171.1 motors, snowmobiles, downhill or cross-country ski equipment, or 171.2 charges for marina services, launch services, and guide 171.3 services, or the sale of bait and fishing tackle. For purposes 171.4 of this determination, a paid booking of five or more nights 171.5 shall be counted as two bookings. Class 4c also includes 171.6 commercial use real property used exclusively for recreational 171.7 purposes in conjunction with class 4c property devoted to 171.8 temporary and seasonal residential occupancy for recreational 171.9 purposes, up to a total of two acres, provided the property is 171.10 not devoted to commercial recreational use for more than 250 171.11 days in the year preceding the year of assessment and is located 171.12 within two miles of the class 4c property with which it is 171.13 used. Class 4c property classified in this clause also includes 171.14 the remainder of class 1c resorts provided that the entire 171.15 property including that portion of the property classified as 171.16 class 1c also meets the requirements for class 4c under this 171.17 clause; otherwise the entire property is classified as class 3. 171.18 Owners of real property devoted to temporary and seasonal 171.19 residential occupancy for recreation purposes and all or a 171.20 portion of which was devoted to commercial purposes for not more 171.21 than 250 days in the year preceding the year of assessment 171.22 desiring classification as class 1c or 4c, must submit a 171.23 declaration to the assessor designating the cabins or units 171.24 occupied for 250 days or less in the year preceding the year of 171.25 assessment by January 15 of the assessment year. Those cabins 171.26 or units and a proportionate share of the land on which they are 171.27 located will be designated class 1c or 4c as otherwise 171.28 provided. The remainder of the cabins or units and a 171.29 proportionate share of the land on which they are located will 171.30 be designated as class 3a. The owner of property desiring 171.31 designation as class 1c or 4c property must provide guest 171.32 registers or other records demonstrating that the units for 171.33 which class 1c or 4c designation is sought were not occupied for 171.34 more than 250 days in the year preceding the assessment if so 171.35 requested. The portion of a property operated as a (1) 171.36 restaurant, (2) bar, (3) gift shop, and (4) other nonresidential 172.1 facility operated on a commercial basis not directly related to 172.2 temporary and seasonal residential occupancy for recreation 172.3 purposes shall not qualify for class 1c or 4c; 172.4 (2) qualified property used as a golf course if: 172.5 (i) it is open to the public on a daily fee basis. It may 172.6 charge membership fees or dues, but a membership fee may not be 172.7 required in order to use the property for golfing, and its green 172.8 fees for golfing must be comparable to green fees typically 172.9 charged by municipal courses; and 172.10 (ii) it meets the requirements of section 273.112, 172.11 subdivision 3, paragraph (d). 172.12 A structure used as a clubhouse, restaurant, or place of 172.13 refreshment in conjunction with the golf course is classified as 172.14 class 3a property; 172.15 (3) real property up to a maximum of one acre of land owned 172.16 by a nonprofit community service oriented organization; provided 172.17 that the property is not used for a revenue-producing activity 172.18 for more than six days in the calendar year preceding the year 172.19 of assessment and the property is not used for residential 172.20 purposes on either a temporary or permanent basis. For purposes 172.21 of this clause, a "nonprofit community service oriented 172.22 organization" means any corporation, society, association, 172.23 foundation, or institution organized and operated exclusively 172.24 for charitable, religious, fraternal, civic, or educational 172.25 purposes, and which is exempt from federal income taxation 172.26 pursuant to section 501(c)(3), (10), or (19) of the Internal 172.27 Revenue Code of 1986, as amended through December 31, 1990. For 172.28 purposes of this clause, "revenue-producing activities" shall 172.29 include but not be limited to property or that portion of the 172.30 property that is used as an on-sale intoxicating liquor or 3.2 172.31 percent malt liquor establishment licensed under chapter 340A, a 172.32 restaurant open to the public, bowling alley, a retail store, 172.33 gambling conducted by organizations licensed under chapter 349, 172.34 an insurance business, or office or other space leased or rented 172.35 to a lessee who conducts a for-profit enterprise on the 172.36 premises. Any portion of the property which is used for 173.1 revenue-producing activities for more than six days in the 173.2 calendar year preceding the year of assessment shall be assessed 173.3 as class 3a. The use of the property for social events open 173.4 exclusively to members and their guests for periods of less than 173.5 24 hours, when an admission is not charged nor any revenues are 173.6 received by the organization shall not be considered a 173.7 revenue-producing activity; 173.8 (4) post-secondary student housing of not more than one 173.9 acre of land that is owned by a nonprofit corporation organized 173.10 under chapter 317A and is used exclusively by a student 173.11 cooperative, sorority, or fraternity for on-campus housing or 173.12 housing located within two miles of the border of a college 173.13 campus; 173.14 (5) manufactured home parks as defined in section 327.14, 173.15 subdivision 3; 173.16 (6) real property that is actively and exclusively devoted 173.17 to indoor fitness, health, social, recreational, and related 173.18 uses, is owned and operated by a not-for-profit corporation, and 173.19 is located within the metropolitan area as defined in section 173.20 473.121, subdivision 2; 173.21 (7) a leased or privately owned noncommercial aircraft 173.22 storage hangar not exempt under section 272.01, subdivision 2, 173.23 and the land on which it is located, provided that: 173.24 (i) the land is on an airport owned or operated by a city, 173.25 town, county, metropolitan airports commission, or group 173.26 thereof; and 173.27 (ii) the land lease, or any ordinance or signed agreement 173.28 restricting the use of the leased premise, prohibits commercial 173.29 activity performed at the hangar. 173.30 If a hangar classified under this clause is sold after June 173.31 30, 2000, a bill of sale must be filed by the new owner with the 173.32 assessor of the county where the property is located within 60 173.33 days of the sale; and 173.34 (8) residential real estate, a portion of which is used by 173.35 the owner for homestead purposes, and that is also a place of 173.36 lodging, if all of the following criteria are met: 174.1 (i) rooms are provided for rent to transient guests that 174.2 generally stay for periods of 14 or fewer days; 174.3 (ii) meals are provided to persons who rent rooms, the cost 174.4 of which is incorporated in the basic room rate; 174.5 (iii) meals are not provided to the general public except 174.6 for special events on fewer than seven days in the calendar year 174.7 preceding the year of the assessment; and 174.8 (iv) the owner is the operator of the property. 174.9 The market value subject to the 4c classification under this 174.10 clause is limited to five rental units. Any rental units on the 174.11 property in excess of five, must be valued and assessed as class 174.12 3a. The portion of the property used for purposes of a 174.13 homestead by the owner must be classified as class 1a property 174.14 under subdivision 22. 174.15 Class 4c property has a class rate of 1.5 percent of market 174.16 value, except that (i) each parcel of seasonal residential 174.17 recreational property not used for commercial purposes has the 174.18 same class rates as class 4bb property, (ii) manufactured home 174.19 parks assessed under clause (5) have the same class rate as 174.20 class 4b property, (iii) commercial-use seasonal residential 174.21 recreational property has a class rate of one percent for the 174.22 first $500,000 of market value, which includes any market value 174.23 receiving the one percent rate under subdivision 22, and 1.25 174.24 percent for the remaining market value, (iv) the market value of 174.25 property described in clause (4) has a class rate of one 174.26 percent, (v) the market value of property described in clauses 174.27 (2) and (6) has a class rate of 1.25 percent, and (vi) that 174.28 portion of the market value of property in clause (8) qualifying 174.29 for class 4c property has a class rate of 1.25 percent. 174.30 (e) Class 4d property is qualifying low-income rental 174.31 housing certified to the assessor by the housing finance agency 174.32 under sections 273.126 and 462A.071. Class 4d includes land in 174.33 proportion to the total market value of the building that is 174.34 qualifying low-income rental housing. For all properties 174.35 qualifying as class 4d, the market value determined by the 174.36 assessor must be based on the normal approach to value using 175.1 normal unrestricted rents. 175.2 Class 4d property has a class rate of 0.9 percent for taxes 175.3 payable in 2002, and one percent for taxes payable in 2003 and 175.4 1.25 percent for taxes payable in 2004 and thereafter. 175.5 [EFFECTIVE DATE.] This section is effective the day 175.6 following final enactment. 175.7 Sec. 18. Minnesota Statutes 2002, section 273.1398, 175.8 subdivision 4b, is amended to read: 175.9 Subd. 4b. [COURT EXPENDITURES; MAINTENANCE OF EFFORT.] (a) 175.10 Until the costs of court administration as defined under section 175.11 480.183, subdivision 3, in a county have been transferred to the 175.12 state, each county in a judicial district transferring court 175.13 administration costs to state funding after July 1, 2001, shall 175.14 budget for the funding of these costs an amount at least equal 175.15 to the certified budget amount for calendar year 2001, increased 175.16 by six percent for each year from 2001 to 2003 and by eight 175.17 percent from 2004 to the year of the transfer. The county shall 175.18 budget, fund, and authorize expenditures not less than the 175.19 amount calculated under this paragraphplus the temporary aid175.20amount under subdivision 4c for maintenance of effort of175.21administrative costs. 175.22 (b) By July 15, 2001, the court shall certify to each 175.23 county in the judicial district its cost of court administration 175.24 as defined under section 480.183, subdivision 3, based on 2001 175.25 budgets. In making that determination, the court shall exclude 175.26 the budget costs of the county for the following categories: 175.27 (1) rent; 175.28 (2) examiner of titles; 175.29 (3) civil court appointed attorneys for civil matters; 175.30 (4) hospitalization costs; and 175.31 (5) cost of maintaining vital statistics. 175.32 The amount of funding provided by a county for courts that 175.33 is increased by the maintenance of effort requirement may not be 175.34 used by a county to pay the costs described in clauses (1) to 175.35 (5). 175.36 [EFFECTIVE DATE.] This section is effective the day 176.1 following final enactment. 176.2 Sec. 19. Minnesota Statutes 2002, section 273.1398, 176.3 subdivision 4d, is amended to read: 176.4 Subd. 4d. [AID OFFSET FOR OUT-OF-HOME PLACEMENT COSTS.] 176.5 For aid payable in 2004, each county's aid under subdivision 2 176.6 shall be permanently reduced by an amount equal to the county's 176.7 2004 reimbursement for nonfederal expenditures for out-of-home 176.8 placements, as provided in section 245.775, provided that 176.9 payments will be made under section 477A.0123 in calendar year 176.10 2004. The counties shall provide all information requested by 176.11 the commissioner of human services necessary to allow the 176.12 commissioner to certify the previous three years' average 176.13 nonfederal costs to the commissioner of revenue by July15, 2004176.14 1, 2003. The aid reduction under this subdivision must not 176.15 exceed the difference between (1) the amount of aid calculated 176.16 for the county for calendar year 2004 under subdivision 2, 176.17 including any addition under section 477A.07, and (2) the amount 176.18 of any aid reductions for the state takeover of courts contained 176.19 in Laws 2001, First Special Session chapter 5, article 5. 176.20 [EFFECTIVE DATE.] This section is effective for aids 176.21 payable in 2004 and thereafter. 176.22 Sec. 20. Minnesota Statutes 2002, section 273.372, is 176.23 amended to read: 176.24 273.372 [PROCEEDINGS AND APPEALS; UTILITY OR RAILROAD 176.25 VALUATIONS.] 176.26 An appeal by a utility or railroad company concerning the 176.27 exemption, valuation, or classificationonof property for which 176.28 the commissioner of revenue has provided the city or county 176.29 assessor withcommissioner's ordersvaluations by order, or for 176.30 which the commissioner has recommended values to the city or 176.31 county assessor, must be brought against the commissioner in tax 176.32 court or in district court of the county where the property is 176.33 located, and not against the county or taxing district where the 176.34 property is located. If the appeal toacourt isoffrom an 176.35 order of the commissioner, it must be brought under chapter 176.36 271. If the appeal is from the exemption, valuation, 177.1 classification, or tax that results from implementation of the 177.2 commissioner's order or recommendation, it must be brought under 177.3 chapter 278, and theproceduresprovisions in that chapter 177.4 apply, except that service shall be on the commissioner only and 177.5 not on the county officials specified in section 278.01, 177.6 subdivision 1. This provision applies to the propertycontained177.7underdescribed in sections 273.33, 273.35, 273.36, and 273.37, 177.8 but only if the appealed values have remained unchanged from 177.9 those provided to the city or county by the commissioner. If 177.10 the exemption, valuation, or classification being appealed has 177.11 been changed by the city or county, then the action must be 177.12 brought under chapter 278 in the county where the property is 177.13 located and proper service must be made upon the county 177.14 officials as specified in section 278.01, subdivision 1. 177.15 Upon filing of any appeal by a utility company or railroad 177.16 against the commissioner, the commissioner shall give notice by 177.17 first class mail to each county which would be affected by the 177.18 appeal. 177.19 Companies that submit the reports under section 270.82 or 177.20 273.371 by the date specified in that section, or by the date 177.21 specified by the commissioner in an extension, may appeal 177.22 administratively to the commissioner under the procedures in 177.23 section 270.11, subdivision 6, prior to bringing an action in 177.24 tax court or in district court, however, instituting an 177.25 administrative appeal with the commissioner does not change or 177.26 modify the deadline in section 271.06 for appealing an order of 177.27 the commissioner in tax court or the deadline in section 278.01 177.28 forbringing an actionfiling a property tax claim or objection 177.29 in tax court or district court. 177.30 [EFFECTIVE DATE.] This section is effective the day 177.31 following final enactment. 177.32 Sec. 21. Minnesota Statutes 2002, section 273.42, 177.33 subdivision 2, is amended to read: 177.34 Subd. 2. Owners of land that is an agricultural or 177.35 nonagricultural homestead, nonhomestead agricultural land, 177.36 rental residential property, and both commercial and 178.1 noncommercial seasonal residential recreational property, as 178.2 those terms are defined in section 273.13 listed on records of 178.3 the county auditor or county treasurer over which runs a high 178.4 voltage transmission lineas defined in section 116C.52,178.5subdivision 3with a capacity of 200 kilovolts or more, except a 178.6 high voltage transmission line the construction of which was 178.7 commenced prior to July 1, 1974, shall receive a property tax 178.8 credit in an amount determined by multiplying a fraction, the 178.9 numerator of which is the length of high voltage transmission 178.10 line which runs over that parcel and the denominator of which is 178.11 the total length of that particular line running over all 178.12 property within the city or township by ten percent of the 178.13 transmission line tax revenue derived from the tax on that 178.14 portion of the line within the city or township pursuant to 178.15 section 273.36. In the case of property owners in unorganized 178.16 townships, the property tax credit shall be determined by 178.17 multiplying a fraction, the numerator of which is the length of 178.18 the qualifying high voltage transmission line which runs over 178.19 the parcel and the denominator of which is the total length of 178.20 the qualifying high voltage transmission line running over all 178.21 property within all the unorganized townships within the county, 178.22 by the total utility property tax credit fund amount available 178.23 within the county for that year pursuant to subdivision 1. 178.24 Where a right-of-way width is shared by more than one property 178.25 owner, the numerator shall be adjusted by multiplying the length 178.26 of line on the parcel by the proportion of the total width on 178.27 the parcel owned by that property owner. The amount of credit 178.28 for which the property qualifies shall not exceed 20 percent of 178.29 the total gross tax on the parcel prior to deduction of the 178.30 state paid agricultural credit and the state paid homestead 178.31 credit, provided that, if the property containing the 178.32 right-of-way is included in a parcel which exceeds 40 acres, the 178.33 total gross tax on the parcel shall be multiplied by a fraction, 178.34 the numerator of which is the sum of the number of acres in each 178.35 quarter-quarter section or portion thereof which contains a 178.36 right-of-way and the denominator of which is the total number of 179.1 acres in the parcel set forth on the tax statement, and the 179.2 maximum credit shall be 20 percent of the product of that 179.3 computation, prior to deduction of those credits. The auditor 179.4 of the county in which the affected parcel is located shall 179.5 calculate the amount of the credit due for each parcel and 179.6 transmit that information to the county treasurer. The county 179.7 auditor, in computing the credit received pursuant to section 179.8 273.135, shall reduce the gross tax by the amount of the credit 179.9 received pursuant to this section, unless the amount of the 179.10 credit would be less than $10. 179.11 If, after the county auditor has computed the credit to 179.12 those qualifying property owners in unorganized townships, there 179.13 is money remaining in the utility property tax credit fund, then 179.14 that excess amount in the fund shall be returned to the general 179.15 school fund of the county. 179.16 [EFFECTIVE DATE.] This section is effective the day 179.17 following final enactment. 179.18 Sec. 22. Minnesota Statutes 2002, section 274.01, 179.19 subdivision 1, is amended to read: 179.20 Subdivision 1. [ORDINARY BOARD; MEETINGS, DEADLINES, 179.21 GRIEVANCES.] (a) The town board of a town, or the council or 179.22 other governing body of a city, is the board of appeal and 179.23 equalization except (1) in cities whose charters provide for a 179.24 board of equalization or (2) in any city or town that has 179.25 transferred its local board of review power and duties to the 179.26 county board as provided in subdivision 3. The county assessor 179.27 shall fix a day and time when the board or the board of 179.28 equalization shall meet in the assessment districts of the 179.29 county. Notwithstanding any law or city charter to the 179.30 contrary, a city board of equalization shall be referred to as a 179.31 board of appeal and equalization. On or before February 15 of 179.32 each year the assessor shall give written notice of the time to 179.33 the city or town clerk. Notwithstanding the provisions of any 179.34 charter to the contrary, the meetings must be held between April 179.35 1 and May 31 each year. The clerk shall give published and 179.36 posted notice of the meeting at least ten days before the date 180.1 of the meeting. 180.2 The board shall meet at the office of the clerk to review 180.3 the assessment and classification of property in the town or 180.4 city. No changes in valuation or classification which are 180.5 intended to correct errors in judgment by the county assessor 180.6 may be made by the county assessor after the board has adjourned 180.7 in those cities or towns that hold a local board of review; 180.8 however, corrections of errors that are merely clerical in 180.9 nature or changes that extend homestead treatment to property 180.10 are permitted after adjournment until the tax extension date for 180.11 that assessment year. The changes must be fully documented and 180.12 maintained in the assessor's office and must be available for 180.13 review by any person. A copy of the changes made during this 180.14 period in those cities or towns that hold a local board of 180.15 review must be sent to the county board no later than December 180.16 31 of the assessment year. 180.17 (b) The board shall determine whether the taxable property 180.18 in the town or city has been properly placed on the list and 180.19 properly valued by the assessor. If real or personal property 180.20 has been omitted, the board shall place it on the list with its 180.21 market value, and correct the assessment so that each tract or 180.22 lot of real property, and each article, parcel, or class of 180.23 personal property, is entered on the assessment list at its 180.24 market value. No assessment of the property of any person may 180.25 be raised unless the person has been duly notified of the intent 180.26 of the board to do so. On application of any person feeling 180.27 aggrieved, the board shall review the assessment or 180.28 classification, or both, and correct it as appears just. The 180.29 board may not make an individual market value adjustment or 180.30 classification change that would benefit the property in cases 180.31 where the owner or other person having control over the property 180.32 will not permit the assessor to inspect the property and the 180.33 interior of any buildings or structures. 180.34 (c) A local board may reduce assessments upon petition of 180.35 the taxpayer but the total reductions must not reduce the 180.36 aggregate assessment made by the county assessor by more than 181.1 one percent. If the total reductions would lower the aggregate 181.2 assessments made by the county assessor by more than one 181.3 percent, none of the adjustments may be made. The assessor 181.4 shall correct any clerical errors or double assessments 181.5 discovered by the board without regard to the one percent 181.6 limitation. 181.7 (d) A local board does not have authority to grant an 181.8 exemption or to order property removed from the tax rolls. 181.9 (e) A majority of the members may act at the meeting, and 181.10 adjourn from day to day until they finish hearing the cases 181.11 presented. The assessor shall attend, with the assessment books 181.12 and papers, and take part in the proceedings, but must not 181.13 vote. The county assessor, or an assistant delegated by the 181.14 county assessor shall attend the meetings. The board shall list 181.15 separately, on a form appended to the assessment book, all 181.16 omitted property added to the list by the board and all items of 181.17 property increased or decreased, with the market value of each 181.18 item of property, added or changed by the board, placed opposite 181.19 the item. The county assessor shall enter all changes made by 181.20 the board in the assessment book. 181.21(e)(f) Except as provided in subdivision 3, if a person 181.22 fails to appear in person, by counsel, or by written 181.23 communication before the board after being duly notified of the 181.24 board's intent to raise the assessment of the property, or if a 181.25 person feeling aggrieved by an assessment or classification 181.26 fails to apply for a review of the assessment or classification, 181.27 the person may not appear before the county board of appeal and 181.28 equalization for a review of the assessment or classification. 181.29 This paragraph does not apply if an assessment was made after 181.30 the local board meeting, as provided in section 273.01, or if 181.31 the person can establish not having received notice of market 181.32 value at least five days before the local board meeting. 181.33(f)(g) The local board must complete its work and adjourn 181.34 within 20 days from the time of convening stated in the notice 181.35 of the clerk, unless a longer period is approved by the 181.36 commissioner of revenue. No action taken after that date is 182.1 valid. All complaints about an assessment or classification 182.2 made after the meeting of the board must be heard and determined 182.3 by the county board of equalization. A nonresident may, at any 182.4 time, before the meeting of the board file written objections to 182.5 an assessment or classification with the county assessor. The 182.6 objections must be presented to the board at its meeting by the 182.7 county assessor for its consideration. 182.8 [EFFECTIVE DATE.] This section is effective the day 182.9 following final enactment. 182.10 Sec. 23. Minnesota Statutes 2002, section 274.13, 182.11 subdivision 1, is amended to read: 182.12 Subdivision 1. [MEMBERS; MEETINGS; RULES FOR EQUALIZING 182.13 ASSESSMENTS.] The county commissioners, or a majority of them, 182.14 with the county auditor, or, if the auditor cannot be present, 182.15 the deputy county auditor, or, if there is no deputy, the court 182.16 administrator of the district court, shall form a board for the 182.17 equalization of the assessment of the property of the county, 182.18 including the property of all cities whose charters provide for 182.19 a board of equalization. This board shall be referred to as the 182.20 county board of appeal and equalization. The board shall meet 182.21 annually, on the date specified in section 274.14, at the office 182.22 of the auditor. Each member shall take an oath to fairly and 182.23 impartially perform duties as a member. The board shall examine 182.24 and compare the returns of the assessment of property of the 182.25 towns or districts, and equalize them so that each tract or lot 182.26 of real property and each article or class of personal property 182.27 is entered on the assessment list at its market value, subject 182.28 to the following rules: 182.29 (1) The board shall raise the valuation of each tract or 182.30 lot of real property which in its opinion is returned below its 182.31 market value to the sum believed to be its market value. The 182.32 board must first give notice of intention to raise the valuation 182.33 to the person in whose name it is assessed, if the person is a 182.34 resident of the county. The notice must fix a time and place 182.35 for a hearing. 182.36 (2) The board shall reduce the valuation of each tract or 183.1 lot which in its opinion is returned above its market value to 183.2 the sum believed to be its market value. 183.3 (3) The board shall raise the valuation of each class of 183.4 personal property which in its opinion is returned below its 183.5 market value to the sum believed to be its market value. It 183.6 shall raise the aggregate value of the personal property of 183.7 individuals, firms, or corporations, when it believes that the 183.8 aggregate valuation, as returned, is less than the market value 183.9 of the taxable personal property possessed by the individuals, 183.10 firms, or corporations, to the sum it believes to be the market 183.11 value. The board must first give notice to the persons of 183.12 intention to do so. The notice must set a time and place for a 183.13 hearing. 183.14 (4) The board shall reduce the valuation of each class of 183.15 personal property that is returned above its market value to the 183.16 sum it believes to be its market value. Upon complaint of a 183.17 party aggrieved, the board shall reduce the aggregate valuation 183.18 of the individual's personal property, or of any class of 183.19 personal property for which the individual is assessed, which in 183.20 its opinion has been assessed at too large a sum, to the sum it 183.21 believes was the market value of the individual's personal 183.22 property of that class. 183.23 (5) The board must not reduce the aggregate value of all 183.24 the property of its county, as submitted to the county board of 183.25 equalization, with the additions made by the auditor under this 183.26 chapter, by more than one percent of its whole valuation. The 183.27 board may raise the aggregate valuation of real property, and of 183.28 each class of personal property, of the county, or of any town 183.29 or district of the county, when it believes it is below the 183.30 market value of the property, or class of property, to the 183.31 aggregate amount it believes to be its market value. 183.32 (6) The board shall change the classification of any 183.33 property which in its opinion is not properly classified. 183.34 (7) The board does not have the authority to grant an 183.35 exemption or to order property removed from the tax rolls. 183.36 [EFFECTIVE DATE.] This section is effective the day 184.1 following final enactment. 184.2 Sec. 24. Minnesota Statutes 2002, section 275.025, 184.3 subdivision 1, is amended to read: 184.4 Subdivision 1. [LEVY AMOUNT.] The state general levy is 184.5 levied against commercial-industrial property and 184.6 seasonal residential recreational property, as defined in this 184.7 section. The state general levy base amount is $592,000,000 for 184.8 taxes payable in 2002. For taxes payable in subsequent years, 184.9 the levy base amount is increased each year by multiplying the 184.10 levy base amount for the prior year by the sum of one plus the 184.11 rate of increase, if any, in the implicit price deflator for 184.12 government consumption expenditures and gross investment for 184.13 state and local governments prepared by the Bureau of Economic 184.14 Analysts of the United States Department of Commerce for the 184.15 12-month period ending March 31 of the year prior to the year 184.16 the taxes are payable. The tax under this section is not 184.17 treated as a local tax rate under section 469.177 and is not the 184.18 levy of a governmental unit under chapters 276A and 473F. 184.19 Beginning in fiscal year 2004, and in each year thereafter, the 184.20 commissioner of finance shall deposit in an education reserve 184.21 account, which account is hereby established, the increased 184.22 amount of the state general levy received for deposit in the 184.23 general fund for that year over the amount of the state general 184.24 levy received for deposit in the general fund in fiscal year 184.25 2003. The amounts in the education reserve account do not lapse 184.26 or cancel each year, but remain until appropriated by law for 184.27 education aid or higher education funding. 184.28 [EFFECTIVE DATE.] This section is effective for taxes 184.29 payable in 2004 and thereafter, except that the change from 184.30 "seasonal recreational property" to "seasonal residential 184.31 recreational property" is effective the day following final 184.32 enactment. 184.33 Sec. 25. Minnesota Statutes 2002, section 275.025, 184.34 subdivision 3, is amended to read: 184.35 Subd. 3. [SEASONAL RESIDENTIAL RECREATIONAL TAX CAPACITY.] 184.36 For the purposes of this section, "seasonal residential 185.1 recreational tax capacity" means the tax capacity of all class 185.2 4c(1) property under section 273.13, subdivision 25, except that 185.3 the first $76,000 of market value of each noncommercial class 185.4 4c(1) property has a tax capacity for this purpose equal to 40 185.5 percent of its tax capacity under section 273.13. 185.6 [EFFECTIVE DATE.] This section is effective the day 185.7 following final enactment. 185.8 Sec. 26. Minnesota Statutes 2002, section 275.025, 185.9 subdivision 4, is amended to read: 185.10 Subd. 4. [APPORTIONMENT AND LEVY OF STATE GENERAL TAX.] 185.11 The state general tax must be distributed among the counties by 185.12 applying a uniform rate to each county's commercial-industrial 185.13 tax capacity and its seasonal residential recreational tax 185.14 capacity. Within each county, the tax must be levied by 185.15 applying a uniform rate against commercial-industrial tax 185.16 capacity and seasonal residential recreational tax capacity.By185.17 On or before November 1 each year, the commissioner of revenue 185.18 shall certifythea preliminary state general levy rate to each 185.19 county auditor that must be used to prepare the notices of 185.20 proposed property taxes for taxes payable in the following 185.21 year. By January 1 of each year, the commissioner shall certify 185.22 the final state general levy rate to each county auditor that 185.23 shall be used in spreading taxes. 185.24 [EFFECTIVE DATE.] This section is effective for taxes 185.25 payable in 2004 and thereafter, except that the change from 185.26 "seasonal recreational tax capacity" to "seasonal residential 185.27 recreational tax capacity" is effective the day following final 185.28 enactment. 185.29 Sec. 27. Minnesota Statutes 2002, section 276.10, is 185.30 amended to read: 185.31 276.10 [APPORTIONMENT AND DISTRIBUTION OF FUNDS.] 185.32 On the settlement day determined in section 276.09 for each 185.33 year, the county auditor and county treasurer shall distribute 185.34 all undistributed funds in the treasury. The funds must be 185.35 apportioned as provided by law, and credited to thestate,town, 185.36 city, school district, special district and each county fund. 186.1 Within 20 days after the distribution is completed, the county 186.2 auditor shall report to the state auditor in the form prescribed 186.3 by the state auditor. The county auditor shall issue a warrant 186.4 for the payment of money in the county treasury to the credit of 186.5 thestate,town, city, school district, or special districts on 186.6 application of the persons entitled to receive the payment. The 186.7 county auditor may apply the local tax rate from the year before 186.8 the year of distribution when apportioning and distributing 186.9 delinquent tax proceeds, if the composition of the previous 186.10 year's local tax rate between taxing districts is not 186.11 significantly different from the local tax rate that existed for 186.12 the year of the delinquency. 186.13 [EFFECTIVE DATE.] This section is effective for taxes 186.14 payable in 2004 and thereafter. 186.15 Sec. 28. Minnesota Statutes 2002, section 276.11, 186.16 subdivision 1, is amended to read: 186.17 Subdivision 1. [GENERALLY.] As soon as practical after the 186.18 settlement day determined in section 276.09, the county 186.19 treasurer shall pay tothe state treasurer orthe treasurer of a 186.20 town, city, school district, or special district, on the warrant 186.21 of the county auditor, all receipts of taxes levied by the 186.22 taxing district and deliver up all orders and other evidences of 186.23 indebtedness of the taxing district, taking triplicate receipts 186.24 for them. The treasurer shall file one of the receipts with the 186.25 county auditor, and shall return one by mail on the day of its 186.26 receipt to the clerk of the town, city, school district, or 186.27 special district to which payment was made. The clerk shall 186.28 keep the receipt in the clerk's office. Upon written request of 186.29 the taxing district, to the extent practicable, the county 186.30 treasurer shall make partial payments of amounts collected 186.31 periodically in advance of the next settlement and 186.32 distribution. A statement prepared by the county treasurer must 186.33 accompany each payment. It must state the years for which taxes 186.34 included in the payment were collected and, for each year, the 186.35 amount of the taxes and any penalties on the tax. Upon written 186.36 request of a taxing district, except school districts, the 187.1 county treasurer shall pay at least 70 percent of the estimated 187.2 collection within 30 days after the settlement date determined 187.3 in section 276.09. Within seven business days after the due 187.4 date, or 28 calendar days after the postmark date on the 187.5 envelopes containing real or personal property tax statements, 187.6 whichever is latest, the county treasurer shall pay to the 187.7 treasurer of the school districts 50 percent of the estimated 187.8 collections arising from taxes levied by and belonging to the 187.9 school district, unless the school district elects to receive 50 187.10 percent of the estimated collections arising from taxes levied 187.11 by and belonging to the school district after making a 187.12 proportionate reduction to reflect any loss in collections as 187.13 the result of any delay in mailing tax statements. In that 187.14 case, 50 percent of those adjusted, estimated collections shall 187.15 be paid by the county treasurer to the treasurer of the school 187.16 district within seven business days of the due date. The 187.17 remaining 50 percent of the estimated collections must be paid 187.18 to the treasurer of the school district within the next seven 187.19 business days of the later of the dates in the preceding 187.20 sentence, unless the school district elects to receive the 187.21 remainder of its estimated collections after a proportionate 187.22 reduction has been made to reflect any loss in collections as 187.23 the result of any delay in mailing tax statements. In that 187.24 case, the remaining 50 percent of those adjusted, estimated 187.25 collections shall be paid by the county treasurer to the 187.26 treasurer of the school district within 14 days of the due 187.27 date. The treasurer shall pay the balance of the amounts 187.28 collectedto the state before June 30, orto a municipal 187.29 corporation or other body within 60 days after the settlement 187.30 date determined in section 276.09. After 45 days interest at an 187.31 annual rate of eight percent accrues and must be paid to the 187.32 taxing district. Interest must be paid upon appropriation from 187.33 the general revenue fund of the county. If not paid, it may be 187.34 recovered by the taxing district, in a civil action. 187.35 [EFFECTIVE DATE.] This section is effective for taxes 187.36 payable in 2004 and thereafter. 188.1 Sec. 29. [276.112] [STATE PROPERTY TAXES; COUNTY 188.2 TREASURER.] 188.3 On or before January 25 each year, for the period ending 188.4 December 31 of the prior year, and on or before June 29 each 188.5 year, for the period ending on the most recent settlement day 188.6 determined in section 276.09, and on or before December 2 each 188.7 year, for the period ending ten business days after November 15, 188.8 the county treasurer must make full settlement with the county 188.9 auditor according to sections 276.09, 276.10, and 276.111 for 188.10 all receipts of state property taxes levied under section 188.11 275.025, and must transmit those receipts to the commissioner of 188.12 revenue by electronic means. 188.13 [EFFECTIVE DATE.] This section is effective the day 188.14 following final enactment. 188.15 Sec. 30. Minnesota Statutes 2002, section 277.20, 188.16 subdivision 2, is amended to read: 188.17 Subd. 2. [FILING OF LIEN FOR ENFORCEABILITY.] The lien 188.18 imposed by subdivision 1 is not enforceable against any 188.19 purchaser, mortgagee, pledgee, holder of a Uniform Commercial 188.20 Code security interest, mechanic's lienor, or judgment lien 188.21 creditor until a notice of lien has been filed by the county 188.22 treasurer in the office of the county recorder of the county in 188.23 which the property is situated, or, in the case of personal 188.24 propertybelonging to an individual who is not a resident of188.25this state, or that is a corporation, partnership, or other188.26organization, in the office of the secretary of state. Priority 188.27 of a lien created under Laws 1991, chapter 291, article 15, 188.28 shall be determined in accordance with the provisions of section 188.29 507.34. Liens filed in the office of the county recorder shall 188.30 be filed with the state tax liens filed pursuant to section 188.31 270.69, and the index shall indicate the name of the county for 188.32 which the lien was filed. If the land is registered, the notice 188.33 of lien shall be filed in the office of the registrar of titles 188.34 of the county in which the property is registered. 188.35 Notwithstanding any other law to the contrary, the county 188.36 treasurer is exempt from the payment of fees when the lien is 189.1 offered for filing or recording; the fee for filing or recording 189.2 the lien must be paid at the time the release of lien is offered 189.3 for filing or recording. Notwithstanding any law to the 189.4 contrary, the fee for filing or recording the lien or the 189.5 release of lien is $15. 189.6 [EFFECTIVE DATE.] This section is effective for liens filed 189.7 on or after the day following final enactment. 189.8 Sec. 31. Minnesota Statutes 2002, section 279.06, 189.9 subdivision 1, is amended to read: 189.10 Subdivision 1. [LIST AND NOTICE.] Within five days after 189.11 the filing of such list, the court administrator shall return a 189.12 copy thereof to the county auditor, with a notice prepared and 189.13 signed by the court administrator, and attached thereto, which 189.14 may be substantially in the following form: 189.15 State of Minnesota ) 189.16 ) ss. 189.17 County of ............... ) 189.18 District Court 189.19 .......... Judicial District. 189.20 The state of Minnesota, to all persons, companies, or 189.21 corporations who have or claim any estate, right, title, or 189.22 interest in, claim to, or lien upon, any of the several parcels 189.23 of land described in the list hereto attached: 189.24 The list of taxes and penalties on real property for the 189.25 county of ............................... remaining delinquent 189.26 on the first Monday in January, ......., has been filed in the 189.27 office of the court administrator of the district court of said 189.28 county, of which that hereto attached is a copy. Therefore, 189.29 you, and each of you, are hereby required to file in the office 189.30 of said court administrator, on or before the 20th day after the 189.31 publication of this notice and list, your answer, in writing, 189.32 setting forth any objection or defense you may have to the 189.33 taxes, or any part thereof, upon any parcel of land described in 189.34 the list, in, to, or on which you have or claim any estate, 189.35 right, title, interest, claim, or lien, and, in default thereof, 189.36 judgment will be entered against such parcel of land for the 190.1 taxes on such list appearing against it, and for all penalties, 190.2 interest, and costs. Based upon said judgment, the land shall 190.3 be sold to the state of Minnesota on the second Monday in May, 190.4 ....... The period of redemption for all lands sold to the 190.5 state at a tax judgment sale shall be three years from the date 190.6 of sale to the state of Minnesota if the land is within an 190.7 incorporated area unless it is: 190.8 (a) nonagricultural homesteaded land as defined in section 190.9 273.13, subdivision 22; 190.10 (b) homesteaded agricultural land as defined in section 190.11 273.13, subdivision 23, paragraph (a); 190.12 (c) seasonal residential recreational land as defined in 190.13 section 273.13, subdivisions 22, paragraph (c), and 25, 190.14 paragraph(c)(d), clause(5)(1), in which event the period of 190.15 redemption is five years from the date of sale to the state of 190.16 Minnesota; 190.17 (d) abandoned property and pursuant to section 281.173 a 190.18 court order has been entered shortening the redemption period to 190.19 five weeks; or 190.20 (e) vacant property as described under section 281.174, 190.21 subdivision 2, and for which a court order is entered shortening 190.22 the redemption period under section 281.174. 190.23 The period of redemption for all other lands sold to the 190.24 state at a tax judgment sale shall be five years from the date 190.25 of sale. 190.26 Inquiries as to the proceedings set forth above can be made 190.27 to the county auditor of ..... county whose address is ..... . 190.28 (Signed) ............................................., 190.29 Court Administrator of the District Court of the County 190.30 of .................................................... 190.31 (Here insert list.) 190.32 The list referred to in the notice shall be substantially 190.33 in the following form: 190.34 List of real property for the county of 190.35 ......................., on which taxes remain delinquent on the 190.36 first Monday in January, .......: 191.1 Town of (Fairfield), 191.2 Township (40), Range (20), 191.3 Names (and 191.4 Current Filed 191.5 Addresses) for 191.6 the Taxpayers 191.7 and Fee Owners 191.8 and in Addition 191.9 Those Parties 191.10 Who Have Filed 191.11 Their Addresses Tax 191.12 Pursuant to Subdivision of Parcel Total Tax 191.13 section 276.041 Section Section Number and Penalty 191.14 $ cts. 191.15 John Jones S.E. 1/4 of S.W. 1/4 10 23101 2.20 191.16 (825 Fremont 191.17 Fairfield, MN 191.18 55000) 191.19 Bruce Smith That part of N.E. 1/4 191.20 (2059 Hand of S.W. 1/4 desc. as 191.21 Fairfield, follows: Beg. at the 191.22 MN 55000) S.E. corner of said 191.23 and N.E. 1/4 of S.W. 1/4; 191.24 Fairfield thence N. along the E. 191.25 State Bank line of said N.E. 1/4 191.26 (100 Main of S.W. 1/4 a distance 191.27 Street of 600 ft.; thence W. 191.28 Fairfield, parallel with the S. 191.29 MN 55000) line of said N.E. 1/4 191.30 of S.W. 1/4 a distance 191.31 of 600 ft.; thence S. 191.32 parallel with said E. 191.33 line a distance of 600 191.34 ft. to S. line of said 191.35 N.E. 1/4 of S.W. 1/4; 191.36 thence E. along said S. 192.1 line a distance of 600 192.2 ft. to the point of 192.3 beg. ............... 21 33211 3.15 192.4 As to platted property, the form of heading shall conform 192.5 to circumstances and be substantially in the following form: 192.6 City of (Smithtown) 192.7 Brown's Addition, or Subdivision 192.8 Names (and 192.9 Current Filed 192.10 Addresses) for 192.11 the Taxpayers 192.12 and Fee Owners 192.13 and in Addition 192.14 Those Parties 192.15 Who have Filed 192.16 Their Addresses Tax 192.17 Pursuant to Parcel Total Tax 192.18 section 276.041 Lot Block Number and Penalty 192.19 $ cts. 192.20 John Jones 15 9 58243 2.20 192.21 (825 Fremont 192.22 Fairfield, 192.23 MN 55000) 192.24 Bruce Smith 16 9 58244 3.15 192.25 (2059 Hand 192.26 Fairfield, 192.27 MN 55000) 192.28 and 192.29 Fairfield 192.30 State Bank 192.31 (100 Main Street 192.32 Fairfield, 192.33 MN 55000) 192.34 The names, descriptions, and figures employed in 192.35 parentheses in the above forms are merely for purposes of 192.36 illustration. 193.1 The name of the town, township, range or city, and addition 193.2 or subdivision, as the case may be, shall be repeated at the 193.3 head of each column of the printed lists as brought forward from 193.4 the preceding column. 193.5 Errors in the list shall not be deemed to be a material 193.6 defect to affect the validity of the judgment and sale. 193.7 [EFFECTIVE DATE.] This section is effective the day 193.8 following final enactment. 193.9 Sec. 32. Minnesota Statutes 2002, section 281.17, is 193.10 amended to read: 193.11 281.17 [PERIOD FOR REDEMPTION.] 193.12 Except for properties for which the period of redemption 193.13 has been limited under sections 281.173 and 281.174, the 193.14 following periods for redemption apply. 193.15 The period of redemption for all lands sold to the state at 193.16 a tax judgment sale shall be three years from the date of sale 193.17 to the state of Minnesota if the land is within an incorporated 193.18 area unless it is: (a) nonagricultural homesteaded land as 193.19 defined in section 273.13, subdivision 22; (b) homesteaded 193.20 agricultural land as defined in section 273.13, subdivision 23, 193.21 paragraph (a); or (c) seasonal residential recreational land as 193.22 defined in section 273.13, subdivision 22, paragraph (c), or 25, 193.23 paragraph (d), clause (1), for which the period of redemption is 193.24 five years from the date of sale to the state of Minnesota. 193.25 The period of redemption for homesteaded lands as defined 193.26 in section 273.13, subdivision 22, located in a targeted 193.27 neighborhood as defined in Laws 1987, chapter 386, article 6, 193.28 section 4, and sold to the state at a tax judgment sale is three 193.29 years from the date of sale. The period of redemption for all 193.30 lands located in a targeted neighborhood as defined in Laws 193.31 1987, chapter 386, article 6, section 4, except (1) homesteaded 193.32 lands as defined in section 273.13, subdivision 22, and (2) for 193.33 periods of redemption beginning after June 30, 1991, but before 193.34 July 1, 1996, lands located in the Loring Park targeted 193.35 neighborhood on which a notice of lis pendens has been served, 193.36 and sold to the state at a tax judgment sale is one year from 194.1 the date of sale. 194.2 The period of redemption for all real property constituting 194.3 a mixed municipal solid waste disposal facility that is a 194.4 qualified facility under section 115B.39, subdivision 1, is one 194.5 year from the date of the sale to the state of Minnesota. 194.6 The period of redemption for all other lands sold to the 194.7 state at a tax judgment sale shall be five years from the date 194.8 of sale, except that the period of redemption for nonhomesteaded 194.9 agricultural land as defined in section 273.13, subdivision 23, 194.10 paragraph (b), shall be two years from the date of sale if at 194.11 that time that property is owned by a person who owns one or 194.12 more parcels of property on which taxes are delinquent, and the 194.13 delinquent taxes are more than 25 percent of the prior year's 194.14 school district levy. 194.15 [EFFECTIVE DATE.] This section is effective the day 194.16 following final enactment. 194.17 Sec. 33. Minnesota Statutes 2002, section 282.01, 194.18 subdivision 1b, is amended to read: 194.19 Subd. 1b. [CONVEYANCE; TARGETED NEIGHBORHOOD LANDS.] (a) 194.20 Notwithstanding subdivision 1a, in the case of tax-forfeited 194.21 lands located in a targeted neighborhood, as defined in section 194.22 469.201, subdivision 10, and section 473.121, subdivision 2, the 194.23 commissioner of revenue shall convey by deed in the name of the 194.24 state any tract of tax-forfeited land held in trust in favor of 194.25 the taxing districts, to a political subdivision that submits an 194.26 application to the commissioner of revenue and, in the case of 194.27 targeted neighborhoods located outside of the metropolitan area 194.28 as defined in section 473.121, the recommendation of the county 194.29 board. 194.30 (b) The application under paragraph (a) must include a 194.31 statement of facts as to the use to be made of the tract, the 194.32 need therefor, and a resolution, adopted by the governing body 194.33 of the political subdivision, finding that the conveyance of a 194.34 tract of tax-forfeited land to the political subdivision is 194.35 necessary to provide for the redevelopment of land as productive 194.36 taxable property. Deeds of conveyance issued under paragraph 195.1 (a) are not conditioned on continued use of the property for the 195.2 use stated in the application. 195.3 [EFFECTIVE DATE.] This section is effective for deeds 195.4 issued on or after July 1, 2003. 195.5 Sec. 34. Minnesota Statutes 2002, section 282.01, 195.6 subdivision 7a, is amended to read: 195.7 Subd. 7a. [CITY SALES; ALTERNATE PROCEDURES.] Land located 195.8 in a home rule charter or statutory city, or in a town which 195.9 cannot be improved because of noncompliance with local 195.10 ordinances regarding minimum area, shape, frontage or access may 195.11 be sold by the county auditor pursuant to this subdivision if 195.12 the auditor determines that a nonpublic sale will encourage the 195.13 approval of sale of the land by the city or town and promote its 195.14 return to the tax rolls. If the physical characteristics of the 195.15 land indicate that its highest and best use will be achieved by 195.16 combining it with an adjoining parcel and the city or town has 195.17 not adopted a local ordinance governing minimum area, shape, 195.18 frontage, or access, the land may also be sold pursuant to this 195.19 subdivision. If the property consists of an undivided interest 195.20 in land or land and improvements, the property may also be sold 195.21 to the other owners under this subdivision. The sale of land 195.22 pursuant to this subdivision shall be subject to any conditions 195.23 imposed by the county board pursuant to section 282.03. The 195.24 governing body of the city or town may recommend to the county 195.25 board conditions to be imposed on the sale. The county auditor 195.26 may restrict the sale to owners of lands adjoining the land to 195.27 be sold. The county auditor shall conduct the sale by sealed 195.28 bid or may select another means of sale. The land shall be sold 195.29 to the highest bidder but in no event shall the land be sold for 195.30 less than its appraised value. All owners of land adjoining the 195.31 land to be sold shall be given a written notice at least 30 days 195.32 prior to the sale. 195.33 This subdivision shall be liberally construed to encourage 195.34 the sale and utilization of tax-forfeited land, to eliminate 195.35 nuisances and dangerous conditions and to increase compliance 195.36 with land use ordinances. 196.1 [EFFECTIVE DATE.] This section is effective for sales 196.2 occurring on or after the day following final enactment. 196.3 Sec. 35. Minnesota Statutes 2002, section 282.08, is 196.4 amended to read: 196.5 282.08 [APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.] 196.6 The net proceeds from the sale or rental of any parcel of 196.7 forfeited land, or from the sale of products from the forfeited 196.8 land, must be apportioned by the county auditor to the taxing 196.9 districts interested in the land, as follows: 196.10 (1) the amounts necessary to pay the state general tax levy 196.11 against the parcel for taxes payable in the year for which the 196.12 tax judgment was entered, and for each subsequent payable year 196.13 up to and including the year of forfeiture, must be apportioned 196.14 to the state; 196.15 (2) the portion required to pay any amounts included in the 196.16 appraised value under section 282.01, subdivision 3, as 196.17 representing increased value due to any public improvement made 196.18 after forfeiture of the parcel to the state, but not exceeding 196.19 the amount certified by the clerk of the municipality must be 196.20 apportioned to the municipal subdivision entitled to it; 196.21(2)(3) the portion required to pay any amount included in 196.22 the appraised value under section 282.019, subdivision 5, 196.23 representing increased value due to response actions taken after 196.24 forfeiture of the parcel to the state, but not exceeding the 196.25 amount of expenses certified by the pollution control agency or 196.26 the commissioner of agriculture, must be apportioned to the 196.27 agency or the commissioner of agriculture and deposited in the 196.28 fund from which the expenses were paid; 196.29(3)(4) the portion of the remainder required to discharge 196.30 any special assessment chargeable against the parcel for 196.31 drainage or other purpose whether due or deferred at the time of 196.32 forfeiture, must be apportioned to the municipal subdivision 196.33 entitled to it; and 196.34(4)(5) any balance must be apportioned as follows: 196.35 (i) The county board may annually by resolution set aside 196.36 no more than 30 percent of the receipts remaining to be used for 197.1 timber development on tax-forfeited land and dedicated memorial 197.2 forests, to be expended under the supervision of the county 197.3 board. It must be expended only on projects approved by the 197.4 commissioner of natural resources. 197.5 (ii) The county board may annually by resolution set aside 197.6 no more than 20 percent of the receipts remaining to be used for 197.7 the acquisition and maintenance of county parks or recreational 197.8 areas as defined in sections 398.31 to 398.36, to be expended 197.9 under the supervision of the county board. 197.10 (iii) Any balance remaining must be apportioned as 197.11 follows: county, 40 percent; town or city, 20 percent; and 197.12 school district, 40 percent, provided, however, that in 197.13 unorganized territory that portion which would have accrued to 197.14 the township must be administered by the county board of 197.15 commissioners. 197.16 [EFFECTIVE DATE.] This section is effective for taxes 197.17 payable in 2004 and thereafter. 197.18 Sec. 36. Minnesota Statutes 2002, section 290C.02, 197.19 subdivision 3, is amended to read: 197.20 Subd. 3. [CLAIMANT.] "Claimant" means a person, as that 197.21 term is defined in section 290.01, subdivision 2, who owns 197.22 forest land in Minnesota and files an application authorized by 197.23 the Sustainable Forest Incentive Act. For purposes of section 197.24 290C.11, claimant also includes any person bound by the covenant 197.25 required in section 290C.04. No more than one claimant is 197.26 entitled to a payment under this chapter with respect to any 197.27 tract, parcel, or piece of land enrolled under this chapter that 197.28 has been assigned the same parcel identification number. When 197.29 enrolled forest land is owned by two or more persons, the owners 197.30 must determine between them which person may claim the payments 197.31 provided under sections 290C.01 to 290C.11. 197.32 [EFFECTIVE DATE.] This section is effective the day 197.33 following final enactment. 197.34 Sec. 37. Minnesota Statutes 2002, section 290C.02, 197.35 subdivision 7, is amended to read: 197.36 Subd. 7. [FOREST MANAGEMENT PLAN.] "Forest management 198.1 plan" means a written document providing a framework for 198.2 site-specific healthy, productive, and sustainable forest 198.3 resources. A forest management plan must include at least the 198.4 following: (i) owner-specific forest management goals for the 198.5propertyland; (ii) a reliable field inventory of the individual 198.6 forest cover types, their age, and density; (iii) a description 198.7 of the soil type and quality; (iv) an aerial photo and/or map of 198.8 the vegetation and other natural features of thepropertyland 198.9 clearly indicating the boundaries of thepropertyland and of 198.10 the forest land; (v) the proposed future conditions of the 198.11propertyland; (vi) prescriptions to meet proposed future 198.12 conditions of thepropertyland; (vii) a recommended timetable 198.13 for implementing the prescribed activities; and (viii) a legal 198.14 description of theparcelsland encompassing the parcels 198.15 included in the plan. All management activities prescribed in a 198.16 plan must be in accordance with the recommended timber 198.17 harvesting and forest management guidelines. The commissioner 198.18 of natural resources shall provide a framework for plan content 198.19 and updating and revising plans. 198.20 [EFFECTIVE DATE.] This section is effective the day 198.21 following final enactment. 198.22 Sec. 38. Minnesota Statutes 2002, section 290C.03, is 198.23 amended to read: 198.24 290C.03 [ELIGIBILITY REQUIREMENTS.] 198.25 (a)PropertyLand may be enrolled in the sustainable forest 198.26 incentive program under this chapter if all of the following 198.27 conditions are met: 198.28 (1)propertythe land consists of at least 20 contiguous 198.29 acres and at least 50 percent of the land must meet the 198.30 definition of forest land in section 88.01, subdivision 7, 198.31 during the enrollment; 198.32 (2) a forest management plan for thepropertyland must be 198.33 prepared by an approved plan writer and implemented during the 198.34 period in which the land is enrolled; 198.35 (3) timber harvesting and forest management guidelines must 198.36 be used in conjunction with any timber harvesting or forest 199.1 management activities conducted on the land during the period in 199.2 which the land is enrolled; 199.3 (4) thepropertyland must be enrolled for a minimum of 199.4 eight years; 199.5 (5) there are no delinquent property taxes on theproperty199.6 land; and 199.7 (6) claimants enrolling more than 1,920 acres in the 199.8 sustainable forest incentive program must allow year-round, 199.9 nonmotorized access to fish and wildlife resources on enrolled 199.10 land except within one-fourth mile of a permanent dwelling or 199.11 during periods of high fire hazard as determined by the 199.12 commissioner of natural resources. 199.13 (b) Claimants required to allow access under paragraph (a), 199.14 clause (6), do not by that action: 199.15 (1) extend any assurance that the land is safe for any 199.16 purpose; 199.17 (2) confer upon the person the legal status of an invitee 199.18 or licensee to whom a duty of care is owed; or 199.19 (3) assume responsibility for or incur liability for any 199.20 injury to the person or property caused by an act or omission of 199.21 the person. 199.22 [EFFECTIVE DATE.] This section is effective the day 199.23 following final enactment. 199.24 Sec. 39. Minnesota Statutes 2002, section 290C.07, is 199.25 amended to read: 199.26 290C.07 [CALCULATION OF INCENTIVE PAYMENT.] 199.27 An approved claimant under the sustainable forest incentive 199.28 program is eligible to receive an annual payment. The payment 199.29 shall equal the greater of: 199.30 (1) the difference between the property tax that would be 199.31 paid on thepropertyland using the previous year's statewide 199.32 average total township tax rate and the class rate for class 2b 199.33 timberland under section 273.13, subdivision 23, paragraph (b), 199.34 if thepropertyland were valued at (i) the average statewide 199.35 timberland market value per acre calculated under section 199.36 290C.06, and (ii) the average statewide timberland current use 200.1 value per acre calculated under section 290C.02, subdivision 5; 200.2 (2) two-thirds of the property tax amount determined by 200.3 using the previous year's statewide average total township tax 200.4 rate, the estimated market value per acre as calculated in 200.5 section 290C.06, and the class rate for 2b timberland under 200.6 section 273.13, subdivision 23, paragraph (b); or 200.7 (3) $1.50 per acre for each acre enrolled in the 200.8 sustainable forest incentive program. 200.9 [EFFECTIVE DATE.] This section is effective the day 200.10 following final enactment. 200.11 Sec. 40. Minnesota Statutes 2002, section 290C.09, is 200.12 amended to read: 200.13 290C.09 [REMOVAL FOR PROPERTY TAX DELINQUENCY.] 200.14 The commissioner shall immediately remove anypropertyland 200.15 enrolled in the sustainable forest incentive program for which 200.16 taxes are determined to be delinquent as provided in chapter 279 200.17 and shall notify the claimant of such action. Lands terminated 200.18 from the sustainable forest incentive program under this section 200.19 are not entitled to any payments provided in this chapter and 200.20 are subject to removal penalties prescribed in section 290C.11. 200.21 The claimant has 60 days from the receipt of notice from the 200.22 commissioner under this section to pay the delinquent taxes. If 200.23 the delinquent taxes are paid within this 60-day period, the 200.24 lands shall be reinstated in the program as if they had not been 200.25 withdrawn and without the payment of a penalty. 200.26 [EFFECTIVE DATE.] This section is effective the day 200.27 following final enactment. 200.28 Sec. 41. Minnesota Statutes 2002, section 290C.10, is 200.29 amended to read: 200.30 290C.10 [WITHDRAWAL PROCEDURES.] 200.31 An approved claimant under the sustainable forest incentive 200.32 program for a minimum of four years may notify the commissioner 200.33 of the intent to terminate enrollment. Within 90 days of 200.34 receipt of notice to terminate enrollment, the commissioner 200.35 shall inform the claimant in writing, acknowledging receipt of 200.36 this notice and indicating the effective date of termination 201.1 from the sustainable forest incentive program. Termination of 201.2 enrollment in the sustainable forest incentive program occurs on 201.3 January 1 of the fifth calendar year that begins after receipt 201.4 by the commissioner of the termination notice. After the 201.5 commissioner issues an effective date of termination, a claimant 201.6 wishing to continue theproperty'sland's enrollment in the 201.7 sustainable forest incentive program beyond the termination date 201.8 must apply for enrollment as prescribed in section 290C.04. A 201.9 claimant who withdraws a parcel of land from this program may 201.10 not reenroll the parcel for a period of three years. Within 90 201.11 days after the termination date, the commissioner shall execute 201.12 and acknowledge a document releasing the land from the covenant 201.13 required under this chapter. The document must be mailed to the 201.14 claimant and is entitled to be recorded. The commissioner may 201.15 allow early withdrawal from the Sustainable Forest Incentive Act 201.16 without penalty in cases of condemnation for a public purpose 201.17 notwithstanding the provisions of this section. 201.18 [EFFECTIVE DATE.] This section is effective the day 201.19 following final enactment. 201.20 Sec. 42. Minnesota Statutes 2002, section 290C.11, is 201.21 amended to read: 201.22 290C.11 [PENALTIES FOR REMOVAL.] 201.23 (a) If the commissioner determines thatpropertyland 201.24 enrolled in the sustainable forest incentive program is in 201.25 violation of the conditions for enrollment as specified in 201.26 section 290C.03, the commissioner shall notify the claimant of 201.27 the intent to remove all enrolled land from the sustainable 201.28 forest incentive program. The claimant has 60 days to appeal 201.29 this determination. The appeal must be made in writing to the 201.30 commissioner, who shall, within 60 days, notify the claimant as 201.31 to the outcome of the appeal. Within 60 days after the 201.32 commissioner denies an appeal, or within 120 days after the 201.33 commissioner received a written appeal if the commissioner has 201.34 not made a determination in that time, the owner may appeal to 201.35 tax court under chapter 271 as if the appeal is from an order of 201.36 the commissioner. 202.1 (b) If the commissioner determines thepropertyland is to 202.2 be removed from the sustainable forest incentive program, the 202.3 claimant is liable for payment to the commissioner in the amount 202.4 equal to the payments received under this chapter for the 202.5 previous four-year period, plus interest. The claimant has 90 202.6 days to satisfy the payment for removal of land from the 202.7 sustainable forest incentive program under this section. If the 202.8 penalty is not paid within the 90-day period under this 202.9 paragraph, the commissioner shall certify the amount to the 202.10 county auditor for collection as a part of the general ad 202.11 valorem real property taxes on the land in the following taxes 202.12 payable year. 202.13 [EFFECTIVE DATE.] This section is effective the day 202.14 following final enactment. 202.15 Sec. 43. [290C.12] [DEATH OF CLAIMANT.] 202.16 Within one year after the death of the claimant, the 202.17 claimant's heir, devisee, or estate must either: 202.18 (1) notify the commissioner of election to terminate 202.19 enrollment in the sustainable forest incentive program; or 202.20 (2) make an application under this chapter to continue 202.21 enrollment of the land in the program. 202.22 Upon notification under clause (1), the commissioner shall 202.23 terminate the enrollment and issue a document releasing the land 202.24 from the covenant as provided in section 290C.04, paragraph 202.25 (c). Penalties under section 290C.11 shall not apply. If the 202.26 application under clause (2) is approved, the land is enrolled 202.27 in the program without a break. If the commissioner does not 202.28 receive notification within one year after the date of death, 202.29 enrollment in the program shall be terminated and penalties 202.30 under section 290C.11 shall not apply. 202.31 [EFFECTIVE DATE.] This section is effective the day 202.32 following final enactment, except in the case of claimants dying 202.33 prior to the day following final enactment, heirs, devisees, or 202.34 estates may make the election either six months after the 202.35 effective date of this provision or one year after the death of 202.36 the claimant, whichever is later. 203.1 Sec. 44. Minnesota Statutes 2002, section 469.1792, 203.2 subdivision 3, is amended to read: 203.3 Subd. 3. [ACTIONS AUTHORIZED.] (a) An authority with a 203.4 district qualifying under this section may take either or both 203.5 of the following actions for any or all of its preexisting 203.6 districts: 203.7 (1) the authority may elect that the original local tax 203.8 rate under section 469.177, subdivision 1a, does not apply to 203.9 the district; and 203.10 (2) the authority may elect the fiscal disparities 203.11 contribution will be computed under section 469.177, subdivision 203.12 3, paragraph (a), regardless of the election that was made for 203.13 the district. 203.14 (b) The authority may take action under this subdivision 203.15 only after the municipality approves the action, by resolution, 203.16 after notice and public hearing in the manner provided under 203.17 section 469.175, subdivision 2. To be effective for taxes 203.18 payable in the following year, the resolution must be adopted 203.19 and the county auditor must be notified of the adoption on or 203.20 before July 1. 203.21 [EFFECTIVE DATE.] This section is effective for taxes 203.22 payable in 2004 and thereafter. 203.23 Sec. 45. Minnesota Statutes 2002, section 473F.07, 203.24 subdivision 4, is amended to read: 203.25 Subd. 4. [DISTRIBUTION NET TAX CAPACITY.] The 203.26 administrative auditor shall determine the proportion which the 203.27 index of each municipality bears to the sum of the indices of 203.28 all municipalities and shall then multiply this proportion in 203.29 the case of each municipality, by the areawide net tax capacity,203.30provided that if the distribution net tax capacity for a203.31municipality is less than 95 percent of the municipality's203.32previous year distribution net tax capacity, and more than ten203.33percent of the municipality's fiscal capacity consists of203.34manufactured home property, the municipality's distribution net203.35tax capacity will be increased to 95 percent of the previous203.36year net tax capacity and the distribution net tax capacity of204.1other municipalities in the area will be proportionately reduced. 204.2 [EFFECTIVE DATE.] This section is effective for taxes 204.3 payable in 2004 and subsequent years. 204.4 Sec. 46. Minnesota Statutes 2002, section 477A.011, 204.5 subdivision 30, is amended to read: 204.6 Subd. 30. [PRE-1940 HOUSING PERCENTAGE.] "Pre-1940 housing 204.7 percentage" for a city is 100 times themost recent1990 federal 204.8 census count of all housing units in the city built before 1940, 204.9 divided by the total number of all housing units in the city. 204.10 Housing units includes both occupied and vacant housing units as 204.11 defined by the federal census. 204.12 [EFFECTIVE DATE.] This section is effective for aids 204.13 payable in 2003 and thereafter. 204.14 Sec. 47. Minnesota Statutes 2002, section 515B.1-116, is 204.15 amended to read: 204.16 515B.1-116 [RECORDING.] 204.17 (a) A declaration, bylaws, any amendment to a declaration 204.18 or bylaws, and any other instrument affecting a common interest 204.19 community shall be entitled to be recorded. In those counties 204.20 which have a tract index, the county recorder shall enter the 204.21 declaration in the tract index for each unit affected. The 204.22 registrar of titles shall file the declaration in accordance 204.23 with section 508.351 or 508A.351. 204.24 (b) The recording officer shall upon request promptly 204.25 assign a number (CIC number) to a common interest community to 204.26 be formed or to a common interest community resulting from the 204.27 merger of two or more common interest communities. 204.28 (c) Documents recorded pursuant to this chapter shall in 204.29 the case of registered land be filed, and references to the 204.30 recording of documents shall mean filed in the case of 204.31 registered land. 204.32 (d) Subject to any specific requirements of this chapter, 204.33 if a recorded document relating to a common interest community 204.34 purports to require a certain vote or signatures approving any 204.35 restatement or amendment of the document by a certain number or 204.36 percentage of unit owners or secured parties, and if the 205.1 amendment or restatement is to be recorded pursuant to this 205.2 chapter, an affidavit of the president or secretary of the 205.3 association stating that the required vote or signatures have 205.4 been obtained shall be attached to the document to be recorded 205.5 and shall constitute prima facie evidence of the representations 205.6 contained therein. 205.7 (e) If a common interest community is located on registered 205.8 land, the recording fee for any document affecting two or more 205.9 units shall be the then-current fee for registering the document 205.10 on the certificates of title for the first ten affected 205.11 certificates and one-third of the then-current fee for each 205.12 additional affected certificate. This provision shall not apply 205.13 to recording fees for deeds of conveyance, with the exception of 205.14 deeds given pursuant to sections 515B.2-119 and 515B.3-112. 205.15 (f) Except as permitted under this subsection, a recording 205.16 officer shall not file or record a declaration creating a new 205.17 common interest community, unless the county treasurer has 205.18 certified that the property taxes payable in the current year 205.19 for the real estate included in the proposed common interest 205.20 community have been paid. This certification is in addition to 205.21 the certification for delinquent taxes required by section 205.22 272.12. In the case of preexisting common interest communities, 205.23 the recording officer shall accept, file, and record the 205.24 following instruments, without requiring a certification as to 205.25 the current or delinquent taxes on any of the units in the 205.26 common interest community: (i) a declaration subjecting the 205.27 common interest community to this chapter; (ii) a declaration 205.28 changing the form of a common interest community pursuant to 205.29 section 515B.2-123; or (iii) an amendment to or restatement of 205.30 the declaration, bylaws, or CIC plat. In order forthe205.31instrumentsan instrument to be accepted and recorded under the 205.32 preceding sentence, theassessor must certify or otherwise205.33inform the recording officer that, for taxes payable in the205.34current year, the assessor has allocated taxable values to each205.35unit or has separately assessed each unitinstrument must not 205.36 create or change unit or common area boundaries. 206.1 [EFFECTIVE DATE.] This section is effective for deeds or 206.2 instruments accepted for recording or registration on or after 206.3 July 1, 2003. 206.4 Sec. 48. Laws 2001, First Special Session chapter 5, 206.5 article 3, section 61, the effective date, is amended to read: 206.6 [EFFECTIVE DATE.] This section is effective August 1, 2001, 206.7 for deeds issued on or after August 1, 2001. This section is 206.8 effective August 1, 2006, for deeds issued before August 1, 2001. 206.9 Sec. 49. Laws 2001, First Special Session chapter 5, 206.10 article 3, section 63, the effective date, is amended to read: 206.11 [EFFECTIVE DATE.] This section is effective August 1, 2001, 206.12 for deeds issued on or after August 1, 2001. This section is 206.13 effective August 1, 2006, for deeds issued before August 1, 2001. 206.14 Sec. 50. Laws 2002, chapter 377, article 6, section 4, the 206.15 effective date, is amended to read: 206.16 [EFFECTIVE DATE.] This section is effectivefor aids206.17payable in 2004May 16, 2002, and thereafter. 206.18 Sec. 51. [REPEALER.] 206.19 (a) Minnesota Statutes 2002, section 274.04, is repealed. 206.20 (b) Minnesota Statutes 2002, section 477A.065, is repealed 206.21 effective for aid payable in 2004 and thereafter. 206.22 (c) Minnesota Rules, parts 8106.0100, subparts 11, 15, and 206.23 16; and 8106.0200, are repealed effective the day following 206.24 final enactment. 206.25 ARTICLE 9 206.26 DEPARTMENT SALES AND USE TAX INITIATIVES 206.27 Section 1. Minnesota Statutes 2002, section 289A.50, 206.28 subdivision 2a, is amended to read: 206.29 Subd. 2a. [REFUND OF SALES TAX TO PURCHASERS.] (a) If a 206.30 vendor has collected from a purchaser a tax on a transaction 206.31 that is not subject to the tax imposed by chapter 297A, the 206.32 purchaser may apply directly to the commissioner for a refund 206.33 under this section if: 206.34(a)(1) the purchaser is currently registered or was 206.35 registered during the period of the claim, to collect and remit 206.36 the sales tax or to remit the use tax; and 207.1 (2) either 207.2(b)(i) the amount of the refund to be applied for exceeds 207.3 $500, or 207.4 (ii) the amount of the refund to be applied for does not 207.5 exceed $500, but the purchaser also applies for a capital 207.6 equipment claim at the same time, and the total of the two 207.7 refunds exceeds $500. 207.8 (b) The purchaser may not file more than two applications 207.9 for refund under this subdivision in a calendar year. 207.10 [EFFECTIVE DATE.] This section is effective for claims 207.11 filed on or after the day following final enactment. 207.12 Sec. 2. Minnesota Statutes 2002, section 289A.60, is 207.13 amended by adding a subdivision to read: 207.14 Subd. 25. [PENALTY FOR FAILURE TO PROPERLY COMPLETE SALES 207.15 TAX RETURN.] A person who fails to report local sales tax on a 207.16 sales tax return or who fails to report local sales tax on 207.17 separate tax lines on the sales tax return is subject to a 207.18 penalty of five percent of the amount of tax not properly 207.19 reported on the return. A person who files a consolidated tax 207.20 return but fails to report location information is subject to a 207.21 $500 penalty for each return not containing location 207.22 information. In addition, the commissioner may revoke the 207.23 privilege for a taxpayer to file consolidated returns and may 207.24 require the taxpayer to separately register each location and to 207.25 file a tax return for each location. 207.26 [EFFECTIVE DATE.] This section is effective for returns 207.27 filed after June 30, 2003. 207.28 Sec. 3. Minnesota Statutes 2002, section 297A.61, 207.29 subdivision 3, is amended to read: 207.30 Subd. 3. [SALE AND PURCHASE.] (a) "Sale" and "purchase" 207.31 include, but are not limited to, each of the transactions listed 207.32 in this subdivision. 207.33 (b) Sale and purchase include: 207.34 (1) any transfer of title or possession, or both, of 207.35 tangible personal property, whether absolutely or conditionally, 207.36 for a consideration in money or by exchange or barter; and 208.1 (2) the leasing of or the granting of a license to use or 208.2 consume, for a consideration in money or by exchange or barter, 208.3 tangible personal property, other than a manufactured home used 208.4 for residential purposes for a continuous period of 30 days or 208.5 more. 208.6 (c) Sale and purchase include the production, fabrication, 208.7 printing, or processing of tangible personal property for a 208.8 consideration for consumers who furnish either directly or 208.9 indirectly the materials used in the production, fabrication, 208.10 printing, or processing. 208.11 (d) Sale and purchase include the preparing for a 208.12 consideration of food. Notwithstanding section 297A.67, 208.13 subdivision 2, taxable food includes, but is not limited to, the 208.14 following: 208.15 (1) prepared food sold by the retailer; 208.16 (2) soft drinks; 208.17 (3) candy; and 208.18 (4) all food sold through vending machines. 208.19 (e) A sale and a purchase includes the furnishing for a 208.20 consideration of electricity, gas, water, or steam for use or 208.21 consumption within this state. 208.22 (f) A sale and a purchase includes the transfer for a 208.23 consideration of computer software. 208.24 (g) A sale and a purchase includes the furnishing for a 208.25 consideration of the following services: 208.26 (1) the privilege of admission to places of amusement, 208.27 recreational areas, or athletic events, and the making available 208.28 of amusement devices, tanning facilities, reducing salons, steam 208.29 baths, turkish baths, health clubs, and spas or athletic 208.30 facilities; 208.31 (2) lodging and related services by a hotel, rooming house, 208.32 resort, campground, motel, or trailer camp and the granting of 208.33 any similar license to use real property other than the renting 208.34 or leasing of it for a continuous period of 30 days or more; 208.35 (3) nonresidential parking services, whether on a 208.36 contractual, hourly, or other periodic basis, except for parking 209.1 at a meter; 209.2 (4) the granting of membership in a club, association, or 209.3 other organization if: 209.4 (i) the club, association, or other organization makes 209.5 available for the use of its members sports and athletic 209.6 facilities, without regard to whether a separate charge is 209.7 assessed for use of the facilities; and 209.8 (ii) use of the sports and athletic facility is not made 209.9 available to the general public on the same basis as it is made 209.10 available to members. 209.11 Granting of membership means both onetime initiation fees and 209.12 periodic membership dues. Sports and athletic facilities 209.13 include golf courses; tennis, racquetball, handball, and squash 209.14 courts; basketball and volleyball facilities; running tracks; 209.15 exercise equipment; swimming pools; and other similar athletic 209.16 or sports facilities; 209.17 (5) delivery of aggregate materials and concrete block by a 209.18 third party if the delivery would be subject to the sales tax if 209.19 provided by the seller of the aggregate material or concrete 209.20 block; and 209.21 (6) services as provided in this clause: 209.22 (i) laundry and dry cleaning services including cleaning, 209.23 pressing, repairing, altering, and storing clothes, linen 209.24 services and supply, cleaning and blocking hats, and carpet, 209.25 drapery, upholstery, and industrial cleaning. Laundry and dry 209.26 cleaning services do not include services provided by coin 209.27 operated facilities operated by the customer; 209.28 (ii) motor vehicle washing, waxing, and cleaning services, 209.29 including services provided by coin operated facilities operated 209.30 by the customer, and rustproofing, undercoating, and towing of 209.31 motor vehicles; 209.32 (iii) building and residential cleaning, maintenance, and 209.33 disinfecting and exterminating services; 209.34 (iv) detective, security, burglar, fire alarm, and armored 209.35 car services; but not including services performed within the 209.36 jurisdiction they serve by off-duty licensed peace officers as 210.1 defined in section 626.84, subdivision 1, or services provided 210.2 by a nonprofit organization for monitoring and electronic 210.3 surveillance of persons placed on in-home detention pursuant to 210.4 court order or under the direction of the Minnesota department 210.5 of corrections; 210.6 (v) pet grooming services; 210.7 (vi) lawn care, fertilizing, mowing, spraying and sprigging 210.8 services; garden planting and maintenance; tree, bush, and shrub 210.9 pruning, bracing, spraying, and surgery; indoor plant care; 210.10 tree, bush, shrub, and stump removal; and tree trimming for 210.11 public utility lines. Services performed under a construction 210.12 contract for the installation of shrubbery, plants, sod, trees, 210.13 bushes, and similar items are not taxable; 210.14 (vii) massages, except when provided by a licensed health 210.15 care facility or professional or upon written referral from a 210.16 licensed health care facility or professional for treatment of 210.17 illness, injury, or disease; and 210.18 (viii) the furnishing of lodging, board, and care services 210.19 for animals in kennels and other similar arrangements, but 210.20 excluding veterinary and horse boarding services. 210.21 In applying the provisions of this chapter, the terms 210.22 "tangible personal property" and "sales at retail" include 210.23 taxable services listed in clause (6), items (i) to (vi) and 210.24 (viii) and the provision of these taxable services, unless 210.25 specifically provided otherwise. Services performed by an 210.26 employee for an employer are not taxable. Services performed by 210.27 a partnership or association for another partnership or 210.28 association are not taxable if one of the entities owns or 210.29 controls more than 80 percent of the voting power of the equity 210.30 interest in the other entity. Services performed between 210.31 members of an affiliated group of corporations are not taxable. 210.32 For purposes ofthis sectionthe preceding sentence, "affiliated 210.33 group of corporations" includes those entities that would be 210.34 classified as members of an affiliated group under United States 210.35 Code, title 26, section 1504, and that are eligible to file a 210.36 consolidated tax return for federal income tax purposes. 211.1 (h) A sale and a purchase includes the furnishing for a 211.2 consideration of tangible personal property or taxable services 211.3 by the United States or any of its agencies or 211.4 instrumentalities, or the state of Minnesota, its agencies, 211.5 instrumentalities, or political subdivisions. 211.6 (i) A sale and a purchase includes the furnishing for a 211.7 consideration of telecommunications services, including cable 211.8 television services and direct satellite services. 211.9 Telecommunications services are taxed to the extent allowed 211.10 under federal law if those services: 211.11 (1) either (i) originate and terminate in this state; or 211.12 (ii) originate in this state and terminate outside the state and 211.13 the service is charged to atelephone numbertelecommunications 211.14 customer located in this state or to the account of any 211.15 transmission instrument in this state; or (iii) originate 211.16 outside this state and terminate in this state and the service 211.17 is charged to atelephone numbertelecommunications customer 211.18 located in this state or to the account of any transmission 211.19 instrument in this state; or 211.20 (2) are rendered by providing a private communications 211.21 service for which the customer has one or more locations within 211.22 Minnesota connected to the service and the service is charged to 211.23 atelephone numbertelecommunications customer located in this 211.24 state or to the account of any transmission instrument in this 211.25 state. 211.26 All charges for mobile telecommunications services, as 211.27 defined in United States Code, title 4, section 124, are deemed 211.28 to be provided by the customer's home service provider and 211.29 sourced to the customer's place of primary use and are subject 211.30 to tax based upon the customer's place of primary use in 211.31 accordance with the Mobile Telecommunications Sourcing Act, 211.32 United States Code, title 4, sections 116 to 126. All other 211.33 definitions and provisions of the Mobile Telecommunications 211.34 Sourcing Act as provided in United States Code, title 4, are 211.35 hereby adopted. 211.36 (j) A sale and a purchase includes the furnishing for a 212.1 consideration of installation if the installation charges would 212.2 be subject to the sales tax if the installation were provided by 212.3 the seller of the item being installed. 212.4 [EFFECTIVE DATE.] This section is effective the day 212.5 following final enactment. 212.6 Sec. 4. Minnesota Statutes 2002, section 297A.61, 212.7 subdivision 12, is amended to read: 212.8 Subd. 12. [FARM MACHINERY.] (a) "Farm machinery" means new 212.9 or used machinery, equipment, implements, accessories, and 212.10 contrivances used directly and principally intheagricultural 212.11 productionfor sale, but not including the processing, of212.12livestock, dairy animals, dairy products, poultry and poultry212.13products, fruits, vegetables, trees and shrubs, plants, forage,212.14grains, and bees and apiary products.212.15(b) Farm machinery includesincluding, but not limited to: 212.16 (1) machinery for the preparation, seeding, or cultivation 212.17 of soil for growing agricultural cropsand sod, for the212.18harvesting and threshing of agricultural products, or for the212.19harvesting or mowing of sod; 212.20 (2) barn cleaners, milking systems, grain dryers, feeding 212.21 systems including stationary feed bunks, and similar 212.22 installations, whether or not the equipment is installed by the 212.23 seller and becomes part of the real property; and 212.24 (3) irrigation equipment sold for exclusively agricultural 212.25 use, including pumps, pipe fittings, valves, sprinklers, and 212.26 other equipment necessary to the operation of an irrigation 212.27 system when sold as part of an irrigation system, whether or not 212.28 the equipment is installed by the seller and becomes part of the 212.29 real property;. 212.30(4) logging equipment, including chain saws used for212.31commercial logging;212.32(5) fencing used for the containment of farmed cervidae, as212.33defined in section 17.451, subdivision 2;212.34(6) primary and backup generator units used to generate212.35electricity for the purpose of operating farm machinery, as212.36defined in this subdivision, or providing light or space heating213.1necessary for the production of livestock, dairy animals, dairy213.2products, or poultry and poultry products;213.3(7) aquaculture production equipment as defined in213.4subdivision 13; and213.5(8) equipment used for maple syrup harvesting.213.6(c)(b) Farm machinery does not include: 213.7 (1) repair or replacement parts; 213.8 (2) tools, shop equipment, grain bins, fencing material 213.9except fencing material covered by paragraph (b), clause (5), 213.10 communication equipment, and other farm supplies; 213.11 (3) motor vehicles taxed under chapter 297B; 213.12 (4) snowmobiles or snow blowers;or213.13 (5) lawn mowers except those used in the production of sod 213.14 for sale, or garden-type tractors or garden tillers; or 213.15 (6) machinery, equipment, implements, accessories, and 213.16 contrivances used directly in the production of horses not 213.17 raised for slaughter, fur-bearing animals, or research animals. 213.18 [EFFECTIVE DATE.] This section is effective for sales and 213.19 purchases made after June 30, 2003. 213.20 Sec. 5. Minnesota Statutes 2002, section 297A.61, 213.21 subdivision 34, is amended to read: 213.22 Subd. 34. [FOOD SOLD THROUGH VENDING MACHINES.] "Food sold 213.23 through vending machines" means food dispensed from a machine or 213.24 othermechanicaldevice that accepts payment including honor 213.25 payments. 213.26 [EFFECTIVE DATE.] This section is effective for sales and 213.27 purchases made on or after the day following final enactment. 213.28 Sec. 6. Minnesota Statutes 2002, section 297A.61, is 213.29 amended by adding a subdivision to read: 213.30 Subd. 35. [AGRICULTURAL PRODUCTION.] "Agricultural 213.31 production" includes, but is not limited to, horticulture, 213.32 floriculture, maple syrup harvesting, and the raising of pets, 213.33 livestock as defined in section 17A.03, subdivision 5, poultry, 213.34 dairy and poultry products, bees and apiary products, the 213.35 raising and harvesting of agricultural crops, sod, fur-bearing 213.36 animals, research animals, and horses. 214.1 [EFFECTIVE DATE.] This section is effective for sales and 214.2 purchases made after June 30, 2003. 214.3 Sec. 7. Minnesota Statutes 2002, section 297A.665, is 214.4 amended to read: 214.5 297A.665 [PRESUMPTION OF TAX; BURDEN OF PROOF.] 214.6 (a) For the purpose of the proper administration of this 214.7 chapter and to prevent evasion of the tax, until the contrary is 214.8 established, it is presumed that: 214.9 (1) all gross receipts are subject to the tax; and 214.10 (2) all retail sales for delivery in Minnesota are for 214.11 storage, use, or other consumption in Minnesota. 214.12 (b) The burden of proving that a sale is not a taxable 214.13 retail sale is on the seller. However, the seller may take from 214.14 the purchaser at the time of the saleana fully completed 214.15 exemption certificateclaiming that the property purchased is214.16for resale or that the sale is otherwise exempt from the tax214.17imposed by this chapterwhich conclusively relieves the seller 214.18 from collecting and remitting the tax. This relief from 214.19 liability does not apply to a seller who fraudulently fails to 214.20 collect the tax or solicits purchasers to participate in the 214.21 unlawful claim of an exemption. If a seller claiming that 214.22 certain sales are exempt, who doesis notpossessin possession 214.23 of the required exemption certificates, must acquire the214.24certificateswithin 60 days after receiving written notice from 214.25 the commissioner that the certificates are required, deductions 214.26 claimed by the seller that required delivery of the certificates 214.27 must be disallowed. If the certificates arenot214.28obtaineddelivered to the commissioner within the 60-day period, 214.29 thesales are considered taxable sales under this214.30chapter.commissioner may verify the reason or basis for the 214.31 exemption claimed in the certificates before allowing any 214.32 deductions. A deduction must not be granted on the basis of 214.33 certificates delivered to the commissioner after the 60-day 214.34 period. 214.35 (c) A purchaser of tangible personal property or any items 214.36 listed in section 297A.63 that are shipped or brought to 215.1 Minnesota by the purchaser has the burden of proving that the 215.2 property was not purchased from a retailer for storage, use, or 215.3 consumption in Minnesota. 215.4 [EFFECTIVE DATE.] This section is effective for exemption 215.5 certificates received for sales occurring after June 30, 2003. 215.6 Sec. 8. Minnesota Statutes 2002, section 297A.67, 215.7 subdivision 2, is amended to read: 215.8 Subd. 2. [FOOD AND FOOD INGREDIENTS.] Food and food 215.9 ingredients are exempt. For purposes of this subdivision, 215.10 "food" and "food ingredients" mean substances, whether in 215.11 liquid, concentrated, solid, frozen, dried, or dehydrated form, 215.12 that are sold for ingestion or chewing by humans and are 215.13 consumed for their taste or nutritional value. Food and food 215.14 ingredients exempt under this subdivision do not include candy, 215.15 soft drinks, food sold through vending machines, and prepared 215.16 foods. Food and food ingredients do not include alcoholic 215.17 beverages, dietary supplements, and tobacco. For purposes of 215.18 this subdivision, "alcoholic beverages" means beverages that are 215.19 suitable for human consumption and contain one-half of one 215.20 percent or more of alcohol by volume. For purposes of this 215.21 subdivision, "tobacco" means cigarettes, cigars, chewing or pipe 215.22 tobacco, or any other item that contains tobacco. For purposes 215.23 of this subdivision, "dietary supplements" means any product, 215.24 other than tobacco, intended to supplement the diet that: 215.25 (1) contains one or more of the following dietary 215.26 ingredients: 215.27 (i) a vitamin; 215.28 (ii) a mineral; 215.29 (iii) an herb or other botanical; 215.30 (iv) an amino acid; 215.31 (v) a dietary substance for use by humans to supplement the 215.32 diet by increasing the total dietary intake; and 215.33 (vi) a concentrate, metabolite, constituent, extract, or 215.34 combination of any ingredient described in items (i) to (v); 215.35 (2) is intended for ingestion in tablet, capsule, powder, 215.36 softgel, gelcap, or liquid form, or if not intended for 216.1 ingestion in such form, is not represented as conventional food 216.2 and is not represented for use as a sole item of a meal or of 216.3 the diet; and 216.4 (3) is required to be labeled as a dietary supplement, 216.5 identifiable by the supplement facts box found on the label and 216.6 as required pursuant to Code of Federal Regulations, title 21, 216.7 section 101.36. 216.8 [EFFECTIVE DATE.] This section is effective the day 216.9 following final enactment. 216.10 Sec. 9. Minnesota Statutes 2002, section 297A.68, 216.11 subdivision 5, is amended to read: 216.12 Subd. 5. [CAPITAL EQUIPMENT.] (a) Capital equipment is 216.13 exempt. The tax must be imposed and collected as if the rate 216.14 under section 297A.62, subdivision 1, applied, and then refunded 216.15 in the manner provided in section 297A.75. 216.16 "Capital equipment" means machinery and equipment purchased 216.17 or leased, and used in this state by the purchaser or lessee 216.18 primarily for manufacturing, fabricating, mining, or refining 216.19 tangible personal property to be sold ultimately at retail if 216.20 the machinery and equipment are essential to the integrated 216.21 production process of manufacturing, fabricating, mining, or 216.22 refining. Capital equipment also includes machinery and 216.23 equipment used to electronically transmit results retrieved by a 216.24 customer of an online computerized data retrieval system. 216.25 (b) Capital equipment includes, but is not limited to: 216.26 (1) machinery and equipment used to operate, control, or 216.27 regulate the production equipment; 216.28 (2) machinery and equipment used for research and 216.29 development, design, quality control, and testing activities; 216.30 (3) environmental control devices that are used to maintain 216.31 conditions such as temperature, humidity, light, or air pressure 216.32 when those conditions are essential to and are part of the 216.33 production process; 216.34 (4) materials and supplies used to construct and install 216.35 machinery or equipment; 216.36 (5) repair and replacement parts, including accessories, 217.1 whether purchased as spare parts, repair parts, or as upgrades 217.2 or modifications to machinery or equipment; 217.3 (6) materials used for foundations that support machinery 217.4 or equipment; 217.5 (7) materials used to construct and install special purpose 217.6 buildings used in the production process; and 217.7 (8) ready-mixed concretetrucksequipment in which the 217.8 ready-mixed concrete is mixed as part of the delivery 217.9 process regardless if mounted on a chassis and leases of 217.10 ready-mixed concrete trucks. 217.11 (c) Capital equipment does not include the following: 217.12 (1) motor vehicles taxed under chapter 297B; 217.13 (2) machinery or equipment used to receive or store raw 217.14 materials; 217.15 (3) building materials, except for materials included in 217.16 paragraph (b), clauses (6) and (7); 217.17 (4) machinery or equipment used for nonproduction purposes, 217.18 including, but not limited to, the following: plant security, 217.19 fire prevention, first aid, and hospital stations; support 217.20 operations or administration; pollution control; and plant 217.21 cleaning, disposal of scrap and waste, plant communications, 217.22 space heating, cooling, lighting, or safety; 217.23 (5) farm machinery and aquaculture production equipment as 217.24 defined by section 297A.61, subdivisions 12 and 13; 217.25 (6) machinery or equipment purchased and installed by a 217.26 contractor as part of an improvement to real property; or 217.27 (7) any other item that is not essential to the integrated 217.28 process of manufacturing, fabricating, mining, or refining. 217.29 (d) For purposes of this subdivision: 217.30 (1) "Equipment" means independent devices or tools separate 217.31 from machinery but essential to an integrated production 217.32 process, including computers and computer software, used in 217.33 operating, controlling, or regulating machinery and equipment; 217.34 and any subunit or assembly comprising a component of any 217.35 machinery or accessory or attachment parts of machinery, such as 217.36 tools, dies, jigs, patterns, and molds. 218.1 (2) "Fabricating" means to make, build, create, produce, or 218.2 assemble components or property to work in a new or different 218.3 manner. 218.4 (3) "Integrated production process" means a process or 218.5 series of operations through which tangible personal property is 218.6 manufactured, fabricated, mined, or refined. For purposes of 218.7 this clause, (i) manufacturing begins with the removal of raw 218.8 materials from inventory and ends when the last process prior to 218.9 loading for shipment has been completed; (ii) fabricating begins 218.10 with the removal from storage or inventory of the property to be 218.11 assembled, processed, altered, or modified and ends with the 218.12 creation or production of the new or changed product; (iii) 218.13 mining begins with the removal of overburden from the site of 218.14 the ores, minerals, stone, peat deposit, or surface materials 218.15 and ends when the last process before stockpiling is completed; 218.16 and (iv) refining begins with the removal from inventory or 218.17 storage of a natural resource and ends with the conversion of 218.18 the item to its completed form. 218.19 (4) "Machinery" means mechanical, electronic, or electrical 218.20 devices, including computers and computer software, that are 218.21 purchased or constructed to be used for the activities set forth 218.22 in paragraph (a), beginning with the removal of raw materials 218.23 from inventory through completion of the product, including 218.24 packaging of the product. 218.25(4)(5) "Machinery and equipment used for pollution control" 218.26 means machinery and equipment used solely to eliminate, prevent, 218.27 or reduce pollution resulting from an activity described in 218.28 paragraph (a). 218.29(5)(6) "Manufacturing" means an operation or series of 218.30 operations where raw materials are changed in form, composition, 218.31 or condition by machinery and equipment and which results in the 218.32 production of a new article of tangible personal property. For 218.33 purposes of this subdivision, "manufacturing" includes the 218.34 generation of electricity or steam to be sold at retail. 218.35(6)(7) "Mining" means the extraction of minerals, ores, 218.36 stone, or peat. 219.1(7)(8) "Online data retrieval system" means a system whose 219.2 cumulation of information is equally available and accessible to 219.3 all its customers. 219.4(8)(9) "Primarily" means machinery and equipment used 50 219.5 percent or more of the time in an activity described in 219.6 paragraph (a). 219.7(9)(10) "Refining" means the process of converting a 219.8 natural resource toaan intermediate or finished product, 219.9 including the treatment of water to be sold at retail. 219.10 [EFFECTIVE DATE.] This section is effective for sales and 219.11 purchases made after December 31, 2003. 219.12 Sec. 10. Minnesota Statutes 2002, section 297A.68, is 219.13 amended by adding a subdivision to read: 219.14 Subd. 39. [PREEXISTING BIDS OR CONTRACTS.] (a) The sale of 219.15 tangible personal property or services is exempt from tax for a 219.16 period of six months from the effective date of the law change 219.17 that results in the imposition of the tax under this chapter if: 219.18 (1) the act imposing the tax does not have transitional 219.19 effective date language for existing construction contracts and 219.20 construction bids; and 219.21 (2) the requirements of paragraph (b) are met. 219.22 (b) A sale is tax exempt under paragraph (a) if it meets 219.23 the requirements of either clause (1) or (2): 219.24 (1) For a construction contract: 219.25 (i) the goods or services sold must be used for the 219.26 performance of a bona fide written lump sum or fixed price 219.27 construction contract; 219.28 (ii) the contract must be entered into before the date the 219.29 goods or services become subject to the sales tax; 219.30 (iii) the contract must not provide for allocation of 219.31 future taxes; and 219.32 (iv) for each qualifying contract the contractor must give 219.33 the seller documentation of the contract on which an exemption 219.34 is to be claimed. 219.35 (2) For a bid: 219.36 (i) the goods or services sold must be used pursuant to an 220.1 obligation of a bid or bids; 220.2 (ii) the bid or bids must be submitted and accepted before 220.3 the date the goods or services became subject to the sales tax; 220.4 (iii) the bid or bids must not be able to be withdrawn, 220.5 modified, or changed without forfeiting a bond; and 220.6 (iv) for each qualifying bid, the contractor must give the 220.7 seller documentation of the bid on which an exemption is to be 220.8 claimed. 220.9 [EFFECTIVE DATE.] This section is effective the day 220.10 following final enactment. 220.11 Sec. 11. Minnesota Statutes 2002, section 297A.69, 220.12 subdivision 2, is amended to read: 220.13 Subd. 2. [MATERIALS CONSUMED IN AGRICULTURAL PRODUCTION.] 220.14(a)Materials stored, used, or consumed in agricultural 220.15 production of personal property intended to be sold ultimately 220.16 at retail are exempt, whether or not the item becomes an 220.17 ingredient or constituent part of the property produced. 220.18 Materials that qualify for this exemption include, but are not 220.19 limited to, the following: 220.20 (1) feeds, seeds, trees, fertilizers, and herbicides, 220.21 including when purchased for use by farmers in a federal or 220.22 state farm or conservation program; 220.23 (2) materials sold to a veterinarian to be used or consumed 220.24 in the care, medication, and treatment of agricultural 220.25 production animals and horses; 220.26 (3) chemicals, including chemicals used for cleaning food 220.27 processing machinery and equipment; 220.28 (4) materials, including chemicals, fuels, and electricity 220.29 purchased by persons engaged in agricultural production to treat 220.30 waste generated as a result of the production process; 220.31 (5) fuels, electricity, gas, and steam used or consumed in 220.32 the production process, except that electricity, gas, or steam 220.33 used for space heating, cooling, or lighting is exempt if (i) it 220.34 is in excess of the average climate control or lighting for the 220.35 production area, and (ii) it is necessary to produce that 220.36 particular product; 221.1 (6) petroleum products and lubricants; 221.2 (7) packaging materials, including returnable containers 221.3 used in packaging food and beverage products; and 221.4 (8) accessory tools and equipment that are separate 221.5 detachable units with an ordinary useful life of less than 12 221.6 months used in producing a direct effect upon the product. 221.7 Machinery, equipment, implements, tools, accessories, 221.8 appliances, contrivances, and furniture and fixtures, except 221.9 those listed in this clause are not included within this 221.10 exemption. 221.11(b) For purposes of this subdivision, "agricultural221.12production" includes, but is not limited to, horticulture,221.13floriculture, maple syrup harvesting, and the raising of pets,221.14fur-bearing animals, research animals, horses, farmed cervidae221.15as defined in section 17.451, subdivision 2, llamas as defined221.16in section 17.455, subdivision 2, and ratitae as defined in221.17section 17.453, subdivision 3.221.18 [EFFECTIVE DATE.] This section is effective for sales and 221.19 purchases made after December 31, 2003. 221.20 Sec. 12. Minnesota Statutes 2002, section 297A.69, 221.21 subdivision 3, is amended to read: 221.22 Subd. 3. [FARM MACHINERYREPAIR AND REPLACEMENT PARTS.] 221.23 Repair and replacement parts, except tires, used for maintenance 221.24 or repair of farm machinery, logging equipment, and aquaculture 221.25 production equipment are exempt, if the part replaces afarm221.26 machinery part assigned a specific or generic part number by the 221.27 manufacturer of thefarmmachinery. 221.28 [EFFECTIVE DATE.] This section is effective for sales and 221.29 purchases made after June 30, 2003. 221.30 Sec. 13. Minnesota Statutes 2002, section 297A.69, 221.31 subdivision 4, is amended to read: 221.32 Subd. 4. [FARMMACHINERY, EQUIPMENT, AND FENCING.] The 221.33 following machinery, equipment, and fencing is exempt: 221.34 (1) farm machineryis exempt.; 221.35 (2) logging equipment, including chain saws used for 221.36 commercial logging; 222.1 (3) fencing used for the containment of farmed cervidae, as 222.2 defined in section 17.451, subdivision 2; 222.3 (4) primary and backup generator units used to generate 222.4 electricity for the purpose of operating farm machinery, 222.5 aquacultural production equipment, or logging equipment, or 222.6 providing light or space heating necessary for the production of 222.7 livestock, dairy animals, dairy products, or poultry and poultry 222.8 products; and 222.9 (5) aquaculture production equipment. 222.10 [EFFECTIVE DATE.] This section is effective for sales and 222.11 purchases made after June 30, 2003. 222.12 Sec. 14. Minnesota Statutes 2002, section 297B.025, 222.13 subdivision 1, is amended to read: 222.14 Subdivision 1. [NONCOLLECTOR VEHICLE.] Purchase or use of 222.15 a passenger automobile as defined in section 168.011, 222.16 subdivision 7, shall be taxed pursuant to section 297B.02, 222.17 subdivision 2, if the passenger automobileis(1) is in the 222.18 tenth or subsequent year of vehicle life, and (2)is not an222.19above-market automobile as designated by the registrar of motor222.20vehiclesdoes not have a resale value of $3,000 or more, as 222.21 determined using nationally recognized sources of information on 222.22 automobile resale values, as designated by the registrar of 222.23 motor vehicles. 222.24The registrar of motor vehicles shall prepare, and222.25distribute to all deputy motor vehicle registrars by July 15,222.261985, a listing by make, model, and year of above-market222.27automobiles. Except as provided by subdivision 2, the registrar222.28must include in the list all automobiles with a resale value of222.29$3,000 or more, as determined using nationally recognized222.30sources of information on automobile resale values. The222.31registrar shall revise the list by February 1 of each year. The222.32initial list and all subsequent revisions must include only222.33those automobiles which are in the tenth or subsequent year of222.34vehicle life.222.35 [EFFECTIVE DATE.] This section is effective for vehicles 222.36 purchased after June 30, 2003. 223.1 Sec. 15. Minnesota Statutes 2002, section 297B.025, 223.2 subdivision 2, is amended to read: 223.3 Subd. 2. [COLLECTOR VEHICLE.] A passenger automobile that 223.4 is registered under section 168.10, subdivision 1a, 1b, 1c, 1d, 223.5 or 1h, or a fire truck registered under section 168.10, 223.6 subdivision 1c, shall be taxed under section 297B.02, 223.7 subdivision 3, and the registrar shall not designate as an223.8above-market automobile a passenger automobile or a fire truck223.9registered under those subdivisions. If the vehicle is 223.10 subsequently registered in another class not under section 223.11 168.10, subdivision 1a, 1b, 1c, 1d, or 1h, within one year of 223.12 the date of registration under those subdivisions, it shall be 223.13 subject to the full excise tax imposed under subdivision 1. 223.14 [EFFECTIVE DATE.] This section is effective for vehicles 223.15 purchased after December 31, 2003. 223.16 Sec. 16. Minnesota Statutes 2002, section 297B.035, 223.17 subdivision 1, is amended to read: 223.18 Subdivision 1. [ORDINARY COURSE OF BUSINESS.] Except as 223.19 provided in this section, motor vehicles purchased for resale in 223.20 the ordinary course of businessor usedby any motor vehicle 223.21 dealer, as defined in section 168.011, subdivision 21, who is 223.22 licensed under section 168.27, subdivision 2 or 3, which bear 223.23 dealer plates as authorized by section 168.27, subdivision 16, 223.24 shall be exempt from the provisions of this chapter. 223.25 [EFFECTIVE DATE.] This section is effective the day 223.26 following final enactment. 223.27 Sec. 17. [REPEALER.] 223.28 (a) Minnesota Statutes 2002, section 297A.72, subdivision 223.29 1, is repealed effective for exemption certificates received for 223.30 sales occurring after June 30, 2003. 223.31 (b) Minnesota Statutes 2002, section 297A.97, is repealed 223.32 effective for sales and purchases occurring after December 31, 223.33 2003. 223.34 (c) Minnesota Rules, parts 8130.0800, subparts 5 and 12; 223.35 8130.1300; 8130.1600, subpart 5; 8130.1700, subparts 3 and 4; 223.36 8130.4800, subpart 2; 8130.7500, subpart 5; 8130.8000; and 224.1 8130.8300, are repealed effective the day following final 224.2 enactment. 224.3 ARTICLE 10 224.4 DEPARTMENT SPECIAL TAXES INITIATIVES 224.5 Section 1. Minnesota Statutes 2002, section 115B.24, 224.6 subdivision 8, is amended to read: 224.7 Subd. 8. [PENALTIES; ENFORCEMENT.] The audit, penalty and 224.8 enforcement provisions applicable to corporate franchise taxes 224.9 imposed under chapter 290 apply to the taxes imposed under 224.10 section 115B.22 and those provisions shall be administered by 224.11 the commissioner. 224.12 [EFFECTIVE DATE.] This section is effective the day 224.13 following final enactment. 224.14 Sec. 2. Minnesota Statutes 2002, section 295.50, 224.15 subdivision 9b, is amended to read: 224.16 Subd. 9b. [PATIENT SERVICES.] (a) "Patient services" means 224.17 inpatient and outpatient services and other goods and services 224.18 provided by hospitals, surgical centers, or health care 224.19 providers. They include the following health care goods and 224.20 services provided to a patient or consumer: 224.21 (1) bed and board; 224.22 (2) nursing services and other related services; 224.23 (3) use of hospitals, surgical centers, or health care 224.24 provider facilities; 224.25 (4) medical social services; 224.26 (5) drugs, biologicals, supplies, appliances, and 224.27 equipment; 224.28 (6) other diagnostic or therapeutic items or services; 224.29 (7) medical or surgical services; 224.30 (8) items and services furnished to ambulatory patients not 224.31 requiring emergency care; 224.32 (9) emergency services; and 224.33 (10) covered services listed in section 256B.0625 and in 224.34 Minnesota Rules, parts 9505.0170 to 9505.0475. 224.35 (b) "Patient services" does not include: 224.36 (1) services provided to nursing homes licensed under 225.1 chapter 144A;and225.2 (2) examinations for purposes of utilization reviews, 225.3 insurance claims or eligibility, litigation, and employment, 225.4 including reviews of medical records for those purposes; 225.5 (3) services provided by community residential mental 225.6 health facilities licensed under Minnesota Rules, parts 225.7 9520.0500 to 9520.0690; 225.8 (4) services provided by community support programs and 225.9 family community support programs approved under Minnesota 225.10 Rules, parts 9535.1700 to 9535.1760; 225.11 (5) services provided by community mental health centers as 225.12 defined in section 245.62, subdivision 2; 225.13 (6) services provided by assisted living programs and 225.14 congregate housing programs; and 225.15 (7) hospice care services. 225.16 [EFFECTIVE DATE.] This section is effective for gross 225.17 revenues received after December 31, 2002. 225.18 Sec. 3. Minnesota Statutes 2002, section 295.53, 225.19 subdivision 1, is amended to read: 225.20 Subdivision 1. [EXEMPTIONS.] (a) The following payments 225.21 are excluded from the gross revenues subject to the hospital, 225.22 surgical center, or health care provider taxes under sections 225.23 295.50 to295.57295.59: 225.24 (1) payments received for services provided under the 225.25 Medicare program, including payments received from the 225.26 government, and organizations governed by sections 1833 and 1876 225.27 of title XVIII of the federal Social Security Act, United States 225.28 Code, title 42, section 1395, and enrollee deductibles, 225.29 coinsurance, and copayments, whether paid by the Medicare 225.30 enrollee or by a Medicare supplemental coverage as defined in 225.31 section 62A.011, subdivision 3, clause (10). Payments for 225.32 services not covered by Medicare are taxable; 225.33 (2) medical assistance payments including payments received 225.34 directly from the government or from a prepaid plan; 225.35 (3) payments received for home health care services; 225.36 (4) payments received from hospitals or surgical centers 226.1 for goods and services on which liability for tax is imposed 226.2 under section 295.52 or the source of funds for the payment is 226.3 exempt under clause (1), (2), (7), (8), (10), (13), 226.4 or(20)(17); 226.5 (5) payments received from health care providers for goods 226.6 and services on which liability for tax is imposed under this 226.7 chapter or the source of funds for the payment is exempt under 226.8 clause (1), (2), (7), (8), (10), (13), or(20)(17); 226.9 (6) amounts paid for legend drugs, other than nutritional 226.10 products, to a wholesale drug distributor who is subject to tax 226.11 under section 295.52, subdivision 3, reduced by reimbursements 226.12 received for legend drugs otherwise exempt under this chapter; 226.13 (7) payments received under the general assistance medical 226.14 care program including payments received directly from the 226.15 government or from a prepaid plan; 226.16 (8) payments received for providing services under the 226.17 MinnesotaCare program including payments received directly from 226.18 the government or from a prepaid plan and enrollee deductibles, 226.19 coinsurance, and copayments. For purposes of this clause, 226.20 coinsurance means the portion of payment that the enrollee is 226.21 required to pay for the covered service; 226.22 (9) payments received by a health care provider or the 226.23 wholly owned subsidiary of a health care provider for care 226.24 provided outside Minnesota; 226.25 (10) payments received from the chemical dependency fund 226.26 under chapter 254B; 226.27 (11) payments received in the nature of charitable 226.28 donations that are not designated for providing patient services 226.29 to a specific individual or group; 226.30 (12) payments received for providing patient services 226.31 incurred through a formal program of health care research 226.32 conducted in conformity with federal regulations governing 226.33 research on human subjects. Payments received from patients or 226.34 from other persons paying on behalf of the patients are subject 226.35 to tax; 226.36 (13) payments received from any governmental agency for 227.1 services benefiting the public, not including payments made by 227.2 the government in its capacity as an employer or insurer; 227.3(14) payments received for services provided by community227.4residential mental health facilities licensed under Minnesota227.5Rules, parts 9520.0500 to 9520.0690, community support programs227.6and family community support programs approved under Minnesota227.7Rules, parts 9535.1700 to 9535.1760, and community mental health227.8centers as defined in section 245.62, subdivision 2;227.9(15)(14) government payments received by a regional 227.10 treatment center; 227.11(16) payments received for hospice care services;227.12(17)(15) payments received by a health care provider for 227.13 hearing aids and related equipment or prescription eyewear 227.14 delivered outside of Minnesota; 227.15(18)(16) payments received by an educational institution 227.16 from student tuition, student activity fees, health care service 227.17 fees, government appropriations, donations, or grants. Fee for 227.18 service payments and payments for extended coverage are taxable; 227.19 and 227.20(19) payments received for services provided by: assisted227.21living programs and congregate housing programs; and227.22(20)(17) payments received under the federal Employees 227.23 Health Benefits Act, United States Code, title 5, section 227.24 8909(f), as amended by the Omnibus Reconciliation Act of 1990. 227.25 (b) Payments received by wholesale drug distributors for 227.26 legend drugs sold directly to veterinarians or veterinary bulk 227.27 purchasing organizations are excluded from the gross revenues 227.28 subject to the wholesale drug distributor tax under sections 227.29 295.50 to 295.59. 227.30 [EFFECTIVE DATE.] This section is effective for gross 227.31 revenues received after December 31, 2002. 227.32 Sec. 4. Minnesota Statutes 2002, section 297F.01, 227.33 subdivision 21a, is amended to read: 227.34 Subd. 21a. [UNLICENSED SELLER.] "Unlicensed seller" means 227.35 anyone who is not licensed under section 297F.03or 461.12to 227.36 sell the particular product to the purchaser or possessor of the 228.1 product. 228.2 [EFFECTIVE DATE.] This section is effective July 1, 2003. 228.3 Sec. 5. Minnesota Statutes 2002, section 297F.01, 228.4 subdivision 23, is amended to read: 228.5 Subd. 23. [WHOLESALE SALES PRICE.] "Wholesale sales price" 228.6 means theestablishedprice stated on the price list in effect 228.7 at the time of sale for which a manufacturer or person sells a 228.8 tobacco product to a distributor, exclusive of any discount, 228.9 promotional offer, or other reduction. For purposes of this 228.10 subdivision, "price list" means the manufacturer's price at 228.11 which tobacco products are made available for sale to all 228.12 distributors on an ongoing basis. 228.13 [EFFECTIVE DATE.] This section is effective July 1, 2003. 228.14 Sec. 6. Minnesota Statutes 2002, section 297F.06, 228.15 subdivision 4, is amended to read: 228.16 Subd. 4. [TOBACCO PRODUCTS USE TAX.] The tobacco products 228.17 use tax does not apply to the possession, use, or storage of 228.18 tobacco productsin quantities of:that have an aggregate cost 228.19 in any calendar month to the consumer of $100 or less. 228.20(1) not more than 50 cigars;228.21(2) not more than ten ounces snuff or snuff powder;228.22(3) not more than one pound smoking or chewing tobacco or228.23any other tobacco product in the possession of any one consumer.228.24 [EFFECTIVE DATE.] This section is effective July 1, 2003. 228.25 Sec. 7. Minnesota Statutes 2002, section 297F.20, 228.26 subdivision 1, is amended to read: 228.27 Subdivision 1. [PENALTIES FOR FAILURE TO FILE OR PAY.] (a) 228.28 A person or consumer required to file a return, report, or other 228.29 document with the commissioner who fails to do so is guilty of a 228.30 misdemeanor. 228.31 (b) A person or consumer required to pay or to collect and 228.32 remit a tax under this chapter, who fails to do so when 228.33 required, is guilty of a misdemeanor. 228.34 [EFFECTIVE DATE.] This section is effective for acts 228.35 committed on or after July 1, 2003. 228.36 Sec. 8. Minnesota Statutes 2002, section 297F.20, 229.1 subdivision 2, is amended to read: 229.2 Subd. 2. [PENALTIES FOR KNOWING FAILURE TO FILE OR PAY.] 229.3 (a) A person or consumer required to file a return, report, or 229.4 other document with the commissioner, who knowingly, rather than 229.5 accidentally, inadvertently, or negligently, fails to file it 229.6 when required, is guilty of a gross misdemeanor. 229.7 (b) A person or consumer required to pay or to collect and 229.8 remit a tax under this chapter, who knowingly, rather than 229.9 accidentally, inadvertently, or negligently, fails to file it 229.10 when required, is guilty of a gross misdemeanor. 229.11 [EFFECTIVE DATE.] This section is effective for acts 229.12 committed on or after July 1, 2003. 229.13 Sec. 9. Minnesota Statutes 2002, section 297F.20, 229.14 subdivision 3, is amended to read: 229.15 Subd. 3. [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A 229.16 person or consumer who files with the commissioner a return, 229.17 report, or other document, or who maintains or provides invoices 229.18 subject to review by the commissioner under this chapter, known 229.19 by the person or consumer to be fraudulent or false concerning a 229.20 material matter, is guilty of a felony. 229.21 (b) A person or consumer who knowingly aids or assists in, 229.22 or advises in the preparation or presentation of a return, 229.23 report, invoice, or other document that is fraudulent or false 229.24 concerning a material matter, whether or not the falsity or 229.25 fraud is committed with the knowledge or consent of the 229.26 person or consumer authorized or required to present the return, 229.27 report, invoice, or other document, is guilty of a felony. 229.28 [EFFECTIVE DATE.] This section is effective for acts 229.29 committed on or after July 1, 2003. 229.30 Sec. 10. Minnesota Statutes 2002, section 297F.20, 229.31 subdivision 6, is amended to read: 229.32 Subd. 6. [UNSTAMPED CIGARETTES; UNTAXED TOBACCO PRODUCTS.] 229.33 (a) A person, other than a licensed distributor or a consumer, 229.34 who possesses, receives, or transportsmore than 200 butfewer 229.35 than 5,000 unstamped cigarettes, or up to$100$350 worth of 229.36 untaxed tobacco products is guilty of a misdemeanor. 230.1 (b) A person, other than a licensed distributor or a 230.2 consumer, who possesses, receives, or transports 5,000 or more, 230.3 but fewer than 20,001 unstamped cigarettes, orup to $500more 230.4 than $350 but less than $1,400 worth of untaxed tobacco products 230.5 is guilty of a gross misdemeanor. 230.6 (c) A person, other than a licensed distributor or a 230.7 consumer, who possesses, receives, or transports more than 230.8 20,000 unstamped cigarettes, or$500$1,400 or more worth of 230.9 untaxed tobacco products is guilty of a felony. 230.10 (d) For purposes of this subdivision, an individual in 230.11 possession of more than 4,999 unstamped cigarettes, or more than 230.12 $350 worth of untaxed tobacco products, is presumed not to be a 230.13 consumer. 230.14 [EFFECTIVE DATE.] This section is effective for acts 230.15 committed on or after July 1, 2003. 230.16 Sec. 11. Minnesota Statutes 2002, section 297F.20, 230.17 subdivision 9, is amended to read: 230.18 Subd. 9. [PURCHASES FROM UNLICENSED SELLERS.] (a) No 230.19 retailer or subjobber shall purchase cigarettes or tobacco 230.20 products from any person who is not licensed under section 230.21 297F.03 as a licensed distributor or subjobber. 230.22 (b) A retailer,or subjobber, or consumerwho purchases 230.23 from an unlicensed sellermore than 200 butfewer than 5,000 230.24 cigarettes or up to$100$350 worth of tobacco products is 230.25 guilty of a misdemeanor. 230.26(b)(c) A retailer,or subjobber, or consumerwho 230.27 purchases from an unlicensed seller 5,000 or more, but fewer 230.28 than 20,001 cigarettes orup to $500more than $350 but less 230.29 than $1,400 worth ofuntaxedtobacco products is guilty of a 230.30 gross misdemeanor. 230.31(c)(d) A retailer,or subjobber, or consumerwho 230.32 purchases from an unlicensed seller more than 20,000 cigarettes 230.33 or$500$1,400 or more worth of tobacco products is guilty of a 230.34 felony. 230.35 [EFFECTIVE DATE.] This section is effective for acts 230.36 committed on or after July 1, 2003. 231.1 Sec. 12. Minnesota Statutes 2002, section 297I.01, 231.2 subdivision 9, is amended to read: 231.3 Subd. 9. [GROSS PREMIUMS.] "Gross premiums" means total 231.4 premiums paid by policyholders and applicants of policies, 231.5 whether received in the form of money or other valuable 231.6 consideration, on property, persons, lives, interests and other 231.7 risks located, resident, or to be performed in this state, but 231.8 excluding consideration and premiums for reinsurance assumed 231.9 from other insurance companies. The term "gross premiums" 231.10 includes the total consideration paid to bail bond agents for 231.11 bail bonds. For title insurance companies, "gross premiums" 231.12 means the charge for title insurance made by a title insurance 231.13 company or its agents according to the company's rate filing 231.14 approved by the commissioner of commerce without a deduction for 231.15 commissions paid to or retained by the agent. Gross premiums of 231.16 a title insurance company does not include any other charge or 231.17 fee for abstracting, searching, or examining the title, or 231.18 escrow, closing, or other related services. The term "gross 231.19 premiums" includes any workers' compensation special 231.20 compensation fund premium surcharge pursuant to section 176.129. 231.21 [EFFECTIVE DATE.] This section is effective the day 231.22 following final enactment. 231.23 Sec. 13. Minnesota Statutes 2002, section 297I.20, is 231.24 amended to read: 231.25 297I.20 [GUARANTY ASSOCIATION ASSESSMENT OFFSETOFFSETS 231.26 AGAINST PREMIUM TAXES.] 231.27 Subdivision 1. [GUARANTY ASSOCIATION ASSESSMENT OFFSETS.] 231.28 (a) An insurance company may offset against its premium tax 231.29 liability to this state any amount paid for assessments made for 231.30 insolvencies which occur after July 31, 1994, under sections 231.31 60C.01 to 60C.22; and any amount paid for assessments made after 231.32 July 31, 1994, under Minnesota Statutes 1992, sections 61B.01 to 231.33 61B.16, or under sections 61B.18 to 61B.32 as follows: 231.34 (1) Each such assessment shall give rise to an amount of 231.35 offset equal to 20 percent of the amount of the assessment for 231.36 each of the five calendar years following the year in which the 232.1 assessment was paid. 232.2 (2) The amount of offset initially determined for each 232.3 taxable year is the sum of the amounts determined under clause 232.4 (1) for that taxable year. 232.5 (b)(1) Each year the commissioner shall compare total 232.6 guaranty association assessments levied over the preceding five 232.7 calendar years to the sum of all premium tax and corporate 232.8 franchise tax revenues collected from insurance companies, 232.9 without reduction for any guaranty association assessment offset 232.10 in the preceding calendar year, referred to in this subdivision 232.11 as "preceding year insurance tax revenues." 232.12 (2) If total guaranty association assessments levied over 232.13 the preceding five years exceed the preceding year insurance tax 232.14 revenues, insurance companies must be allowed only a 232.15 proportionate part of the premium tax offset calculated under 232.16 paragraph (a) for the current calendar year. 232.17 (3) The proportionate part of the premium tax offset 232.18 allowed in the current calendar year is determined by 232.19 multiplying the amount calculated under paragraph (a) by a 232.20 fraction. The numerator of the fraction equals the preceding 232.21 year insurance tax revenues, and its denominator equals total 232.22 guaranty association assessments levied over the preceding 232.23 five-year period. 232.24 (4) The proportionate part of the premium tax offset that 232.25 is not allowed must be carried forward to subsequent tax years 232.26 and added to the amount of premium tax offset calculated under 232.27 paragraph (a) prior to application of the limitation imposed by 232.28 this paragraph. 232.29 (5) Any amount carried forward from prior years must be 232.30 allowed before allowance of the offset for the current year 232.31 calculated under paragraph (a). 232.32 (6) The premium tax offset limitation must be calculated 232.33 separately for (i) insurance companies subject to assessment 232.34 under sections 60C.01 to 60C.22, and (ii) insurance companies 232.35 subject to assessment under Minnesota Statutes 1992, sections 232.36 61B.01 to 61B.16, or 61B.18 to 61B.32. 233.1 (7) When the premium tax offset is limited by this 233.2 provision, the commissioner shall notify affected insurance 233.3 companies on a timely basis for purposes of completing premium 233.4 and corporate franchise tax returns. 233.5 (8) The guaranty associations created under sections 60C.01 233.6 to 60C.22, Minnesota Statutes 1992, sections 61B.01 to 61B.16, 233.7 and 61B.18 to 61B.32, shall provide the commissioner with the 233.8 necessary information on guaranty association assessments. 233.9 (c)(1) If the offset determined by the application of 233.10 paragraphs (a) and (b) exceeds the insurance company's premium 233.11 tax liability under this section prior to allowance of the 233.12 credit for premium taxes, then the insurance company may carry 233.13 forward the excess, referred to in this subdivision as the 233.14 "carryforward credit" to subsequent taxable years. 233.15 (2) The carryforward credit is allowed as an offset against 233.16 premium tax liability for the first succeeding year to the 233.17 extent that the premium tax liability for that year exceeds the 233.18 amount of the allowable offset for the year determined under 233.19 paragraphs (a) and (b). 233.20 (3) The carryforward credit must be reduced, but not below 233.21 zero, by the amount of the carryforward credit allowed as an 233.22 offset against the premium tax under this paragraph. The 233.23 remainder, if any, of the carryforward credit must be carried 233.24 forward to succeeding taxable years until the entire 233.25 carryforward credit has been credited against the insurance 233.26 company's liability for premium tax under this chapter if 233.27 applicable for that taxable year. 233.28 (d) When an insurer has offset against taxes its payment of 233.29 an assessment of the Minnesota life and health guaranty 233.30 association, and the association pays the insurer a refund with 233.31 respect to the assessment under Minnesota Statutes 1992, section 233.32 61B.07, subdivision 6, or 61B.24, subdivision 6, then the refund 233.33 reduces the insurer's carryforward credit under paragraph (c). 233.34 If the refund exceeds the amount of the carryforward credit, the 233.35 excess amount must be repaid to the state by the insurers to the 233.36 extent of the offset in the manner the commissioner requires. 234.1 Subd. 2. [JOINT UNDERWRITING ASSOCIATION OFFSET.] An 234.2 assessment made pursuant to section 62I.06, subdivision 6, shall 234.3 be deductible by the member from past or future premium taxes 234.4 due the state. 234.5 [EFFECTIVE DATE.] This section is effective the day 234.6 following final enactment. 234.7 Sec. 14. [REVISOR'S INSTRUCTION.] 234.8 In the next edition of Minnesota Rules, the revisor shall 234.9 delete any references to the sections repealed in section 15, 234.10 paragraph (a). 234.11 Sec. 15. [REPEALER.] 234.12 (a) Minnesota Statutes 2002, sections 294.01; 294.02; 234.13 294.021; 294.03; 294.06; 294.07; 294.08; 294.09; 294.10; 294.11; 234.14 and 294.12, are repealed effective the day following final 234.15 enactment. 234.16 (b) Minnesota Rules, parts 8125.1000; 8125.1300, subpart 1; 234.17 and 8125.1400, are repealed effective the day following final 234.18 enactment. 234.19 ARTICLE 11 234.20 DEPARTMENT COLLECTIONS AND COMPLIANCE INITIATIVES 234.21 Section 1. [270.278] [PENALTY FOR FILING CERTAIN DOCUMENTS 234.22 AGAINST DEPARTMENT OF REVENUE EMPLOYEES.] 234.23 Subdivision 1. [DEFINITIONS.] (a) "Recording office" means 234.24 a county recorder, registrar of titles, or secretary of state in 234.25 this state or another state. 234.26 (b) "Filing party" means the person or persons requesting 234.27 or causing another person to request that the recording office 234.28 accept documents or instruments for recording or filing. 234.29 Subd. 2. [INVALID DOCUMENTS NAMING THE COMMISSIONER OR 234.30 DEPARTMENT OF REVENUE EMPLOYEES.] Filing a document, including a 234.31 nonconsensual common law lien under section 514.99, that 234.32 purports to create a claim against the commissioner of revenue 234.33 or an employee of the department of revenue based on performance 234.34 or nonperformance of duties by the commissioner or employee is 234.35 invalid unless accompanied by a specific order from a court of 234.36 competent jurisdiction authorizing the filing of the document or 235.1 unless a specific statute authorizes the filing of the document. 235.2 Subd. 3. [CIVIL PENALTY.] If a filing party causes a 235.3 document described in subdivision 2 to be recorded in a 235.4 recording office, the commissioner may assess a penalty against 235.5 the filing party of $1,000 per document filed, payable to the 235.6 general fund. An order assessing a penalty under this section 235.7 is reviewable administratively under section 289A.65 and is 235.8 appealable to tax court under chapter 271. The penalty is 235.9 collected and paid in the same manner as income tax. The 235.10 penalty is in addition to any other remedy available to the 235.11 commissioner of revenue or to an employee of the department of 235.12 revenue against whom the document has been filed. 235.13 [EFFECTIVE DATE.] This section is effective for documents 235.14 filed on or after July 1, 2003. 235.15 Sec. 2. Minnesota Statutes 2002, section 270.69, is 235.16 amended by adding a subdivision to read: 235.17 Subd. 16. [ATTACHMENT TO PROCEEDS OF PROPERTY.] Any lien 235.18 imposed under this section attaches to the proceeds of property 235.19 with the same priority that the lien has with respect to the 235.20 property itself. "Proceeds of property" means proceeds from the 235.21 sale, lease, license, exchange, or other disposition of the 235.22 property, including insurance proceeds arising from the loss or 235.23 destruction of the property. 235.24 [EFFECTIVE DATE.] This section is effective for all liens, 235.25 whether imposed prior to, on, or after the day following final 235.26 enactment. 235.27 Sec. 3. Minnesota Statutes 2002, section 270.701, 235.28 subdivision 2, is amended to read: 235.29 Subd. 2. [NOTICE OF SALE.] The commissioner shall as soon 235.30 as practicable after the seizure of the property give notice of 235.31 sale of the property to the owner, in the manner of service 235.32 prescribed in subdivision 1. In the case of personal property, 235.33 the notice shall be served at least 10 days prior to the sale. 235.34 In the case of real property, the notice shall be served at 235.35 least four weeks prior to the sale. The commissioner shall also 235.36 cause public notice of each sale to be made. In the case of 236.1 personal property, notice shall be posted at least 10 days prior 236.2 to the sale at the county courthouse for the county where the 236.3 seizure is made, and in not less than two other public 236.4 places. For purposes of this requirement, the Internet is a 236.5 public place for posting the information. In the case of real 236.6 property, six weeks' published notice shall be given prior to 236.7 the sale, in a newspaper published or generally circulated in 236.8 the county. The notice of sale provided in this subdivision 236.9 shall specify the property to be sold, and the time, place, 236.10 manner and conditions of the sale. Whenever levy is made 236.11 without regard to the 30-day period provided in section 270.70, 236.12 subdivision 2, public notice of sale of the property seized 236.13 shall not be made within the 30-day period unless section 236.14 270.702 (relating to sale of perishable goods) is applicable. 236.15 [EFFECTIVE DATE.] This section is effective for notices of 236.16 sales posted on or after the day following final enactment. 236.17 Sec. 4. Minnesota Statutes 2002, section 270.701, is 236.18 amended by adding a subdivision to read: 236.19 Subd. 7. [SALE OF SEIZED SECURITIES.] (a) At the time of 236.20 levy on securities, the commissioner shall provide notice to the 236.21 taxpayer that the securities may be sold after ten days from the 236.22 date of seizure. 236.23 (b) If the commissioner levies upon nonexempt publicly 236.24 traded securities and the value of the securities is less than 236.25 or equal to the total obligation for which the levy is done, 236.26 after ten days the person who possesses or controls the 236.27 securities shall liquidate the securities in a commercially 236.28 reasonable manner. After liquidation, the person shall transfer 236.29 the proceeds to the commissioner, less any applicable 236.30 commissions or fees, or both, which are charged in the normal 236.31 course of business. 236.32 (c) If the commissioner levies upon nonexempt publicly 236.33 traded securities and the value of the securities exceeds the 236.34 total amount of the levy, the owner of the securities may, 236.35 within seven days after receipt of the department's notice of 236.36 levy given pursuant to subdivision 1, instruct the person who 237.1 possesses or controls the securities which securities are to be 237.2 sold to satisfy the obligation. If the owner does not provide 237.3 instructions for liquidation, the person who possesses or 237.4 controls the securities shall liquidate the securities in an 237.5 amount sufficient to pay the obligation, plus any applicable 237.6 commissions or fees, or both, which are charged in the normal 237.7 course of business, beginning with the nonexempt securities 237.8 purchased most recently. After liquidation, the person who 237.9 possesses or controls the securities shall transfer to the 237.10 commissioner the amount of money needed to satisfy the levy. 237.11 [EFFECTIVE DATE.] This section is effective for sales of 237.12 securities seized on or after the day following final enactment. 237.13 Sec. 5. Minnesota Statutes 2002, section 270.72, 237.14 subdivision 2, is amended to read: 237.15 Subd. 2. [DEFINITIONS.] For purposes of this section, the 237.16 following terms have the meanings given. 237.17 (a) "Taxes"aremean all taxes payable to the commissioner 237.18 including penalties and interest due on the taxes. 237.19 (b) "Delinquent taxes" do not include a tax liability if 237.20 (i) an administrative or court action which contests the amount 237.21 or validity of the liability has been filed or served, (ii) the 237.22 appeal period to contest the tax liability has not expired, or 237.23 (iii) the applicant has entered into a payment agreement and is 237.24 current with the payments. 237.25 (c) "Applicant" means an individual if the license is 237.26 issued to or in the name of an individual or the corporation or 237.27 partnership if the license is issued to or in the name of a 237.28 corporation or partnership. "Applicant" also means an officer 237.29 of a corporation, a member of a partnership, or an individual 237.30 who is liable for delinquent taxes, either for the entity for 237.31 which the license is at issue or for another entity for which 237.32 the liability was incurred, or personally as a licensee. In the 237.33 case of a license transfer, "applicant" also means both the 237.34 transferor and the transferee of the license. "Applicant" also 237.35 means any holder of a license. 237.36 (d) "License"includesmeans any permit, registration, 238.1 certification, or other form of approval authorized by statute 238.2 or rule to be issued by the state or a political subdivision of 238.3 the state as a condition of doing business or conducting a 238.4 trade, profession, or occupation in Minnesota, specifically 238.5 including, but not limited to, a contract for space rental at 238.6 the Minnesota state fair and authorization to operate 238.7 concessions or rides at county and local fairs, festivals, or 238.8 events. 238.9 (e) "Licensing authority" includes the Minnesota state fair 238.10 board and county and local boards or governing bodies. 238.11 [EFFECTIVE DATE.] This section is effective the day 238.12 following final enactment. 238.13 Sec. 6. Minnesota Statutes 2002, section 270A.03, 238.14 subdivision 2, is amended to read: 238.15 Subd. 2. [CLAIMANT AGENCY.] "Claimant agency" means any 238.16 state agency, as defined by section 14.02, subdivision 2, the 238.17 regents of the University of Minnesota, any district court of 238.18 the state, any county, any statutory or home rule charter city 238.19 presenting a claim for a municipal hospital or a public library 238.20 or a municipal ambulance service, a hospital district, a private 238.21 nonprofit hospital that leases its building from the county in 238.22 which it is located, any public agency responsible for child 238.23 support enforcement, any public agency responsible for the 238.24 collection of court-ordered restitution, and any public agency 238.25 established by general or special law that is responsible for 238.26 the administration of a low-income housing program, and the 238.27 Minnesota collection enterprise as defined in section 16D.02, 238.28 subdivision 8, for the purpose of collecting the costs imposed 238.29 under section 16D.11. 238.30 [EFFECTIVE DATE.] This section is effective the day 238.31 following final enactment. 238.32 Sec. 7. Minnesota Statutes 2002, section 289A.31, 238.33 subdivision 3, is amended to read: 238.34 Subd. 3. [TRANSFEREES AND FIDUCIARIES.] The amounts of the 238.35 following liabilities are, except as otherwise provided in 238.36 section 289A.38, subdivision 13, assessed, collected, and paid 239.1 in the same manner and subject to the same provisions and 239.2 limitations as a deficiency in a tax imposed by chapter 290, 239.3 including any provisions of law for the collection of taxes: 239.4 (1) the liability, at law or in equity, of a transferee of 239.5 property of a taxpayer for tax or overpayment of a refund, 239.6 including interest, additional amounts, and additions to the tax 239.7 or overpayment provided by law, imposed upon the taxpayer by 239.8 chapter 290 or provided for in chapter 290A; and 239.9 (2) the liability of a fiduciary under subdivision 4 for 239.10 the payment of tax from the estate of the taxpayer. The 239.11 liability may reflect the amount of tax shown on the return or 239.12 any deficiency in tax. 239.13 [EFFECTIVE DATE.] This section is effective for refunds 239.14 paid on or after the day following final enactment. 239.15 Sec. 8. Minnesota Statutes 2002, section 289A.31, 239.16 subdivision 4, is amended to read: 239.17 Subd. 4. [TAX AS A PERSONAL DEBT OF A FIDUCIARY.]TheA 239.18 tax imposed by chapter 290 and an overpayment of a refund 239.19 provided for in chapter 290A, and interest and penalties, is a 239.20 personal debt of the taxpayer from the time the liability 239.21 arises, regardless of when the time for discharging the 239.22 liability by payment occurs. The debt is, in the case of the 239.23 personal representative of the estate of a decedent and in the 239.24 case of any fiduciary, that of the individual in the 239.25 individual's official or fiduciary capacity only, unless the 239.26 individual has voluntarily distributed the assets held in that 239.27 capacity without reserving sufficient assets to pay the tax, 239.28 interest, and penalties, in which event the individual is 239.29 personally liable for the deficiency. 239.30 [EFFECTIVE DATE.] This section is effective for taxes 239.31 imposed and property tax refunds claimed on or after the day 239.32 following final enactment. 239.33 Sec. 9. Minnesota Statutes 2002, section 289A.36, 239.34 subdivision 7, is amended to read: 239.35 Subd. 7. [APPLICATION TO COURT FOR ENFORCEMENT OF 239.36 SUBPOENA.] (a) Disobedience of subpoenas issued under this 240.1 section shall be punished by the district court of the district 240.2 in which the party served with the subpoena is located, in the 240.3 same manner as contempt of the district court. 240.4 (b) Disobedience of a subpoena issued under subdivision 9 240.5 shall be punished by the district court for Ramsey county in the 240.6 same manner as contempt of the district court. In addition to 240.7 contempt remedies, the court may issue any order the court deems 240.8 reasonably necessary to enforce compliance with the subpoena. 240.9 [EFFECTIVE DATE.] This section is effective the day 240.10 following final enactment. 240.11 Sec. 10. Minnesota Statutes 2002, section 289A.36, is 240.12 amended by adding a subdivision to read: 240.13 Subd. 9. [ACCESS TO RECORDS IN CONNECTION WITH EXAMINATION 240.14 OF BUSINESSES LOCATED OUTSIDE THE STATE.] (a) In order to 240.15 determine whether a business located outside the state of 240.16 Minnesota is required to file a return under this chapter, the 240.17 commissioner may examine the relevant records and files of the 240.18 business. 240.19 (b) To the full extent permitted by the Minnesota and 240.20 United States constitutions, the commissioner may compel 240.21 production of those relevant records and files by subpoena. The 240.22 subpoena may be served on the secretary of state along with the 240.23 address to which service of the subpoena is to be sent and a fee 240.24 of $50. The secretary of state shall forward a copy of the 240.25 subpoena to the business using the procedures for service of 240.26 process in section 5.25, subdivision 6. 240.27 (c) The commissioner shall pay the reasonable cost of 240.28 producing records subject to subpoena under this subdivision if: 240.29 (1) the subpoenaed party cannot produce the records without 240.30 undue burden; and 240.31 (2) the examination made pursuant to paragraph (a) shows 240.32 that the subpoenaed party is not required to file a return under 240.33 this chapter. 240.34 [EFFECTIVE DATE.] This section is effective the day 240.35 following final enactment. 240.36 Sec. 11. Minnesota Statutes 2002, section 289A.36, is 241.1 amended by adding a subdivision to read: 241.2 Subd. 10. [PENALTY.] In addition to sanctions imposed 241.3 under subdivision 7, a penalty of $250 per day is imposed on any 241.4 business that is in violation of a court order to comply with a 241.5 subpoena that is seeking information necessary for the 241.6 commissioner to be able to determine whether the business is 241.7 required to file a return or pay a tax. The maximum penalty is 241.8 $25,000. Upon the request of the commissioner, the court shall 241.9 determine the amount of the penalty and enter it as a judgment 241.10 in favor of the commissioner. The penalty is not payable until 241.11 the judgment is entered. 241.12 [EFFECTIVE DATE.] This section is effective for violations 241.13 of court orders to enforce subpoenas issued on or after the day 241.14 following final enactment. 241.15 Sec. 12. Minnesota Statutes 2002, section 297A.85, is 241.16 amended to read: 241.17 297A.85 [CANCELLATION OF PERMITS.] 241.18 The commissioner may cancel a permit if one of the 241.19 following conditions occurs: 241.20 (1) the permit holder has not filed a sales or use tax 241.21 return for at least one year; 241.22 (2) the permit holder has not reported any sales or use tax 241.23 liability on the permit holder's returns for at least two years; 241.24or241.25 (3) the permit holder requests cancellation of the permit; 241.26 or 241.27 (4) the permit is subject to cancellation pursuant to 241.28 section 297A.86, subdivision 2, paragraph (a). 241.29 [EFFECTIVE DATE.] This section is effective for 241.30 cancellations of permits done on or after the day following 241.31 final enactment. 241.32 Sec. 13. [REPEALER.] 241.33 Minnesota Statutes 2002, section 270.691, subdivision 8, is 241.34 repealed effective the day following final enactment. 241.35 ARTICLE 12 241.36 CENTRAL LAKES REGION SANITARY DISTRICT 242.1 Section 1. [DEFINITIONS.] 242.2 Subdivision 1. [APPLICATION.] The terms defined in this 242.3 section shall have the meaning given them unless otherwise 242.4 provided or indicated by the context. 242.5 Subd. 2. [ACQUISITION AND BETTERMENT.] "Acquisition" and 242.6 "betterment" shall have the meanings given them in Minnesota 242.7 Statutes, section 475.51. 242.8 Subd. 3. [AGENCY.] "Agency" means the Minnesota pollution 242.9 control agency created and established by Minnesota Statutes, 242.10 chapter 116. 242.11 Subd. 4. [AGRICULTURAL PROPERTY.] "Agricultural property" 242.12 means land as is classified agricultural land within the meaning 242.13 of Minnesota Statutes, section 273.13, subdivision 23. 242.14 Subd. 5. [CURRENT COSTS OF ACQUISITION, BETTERMENT, AND 242.15 DEBT SERVICE.] "Current costs of acquisition, betterment, and 242.16 debt service" means interest and principal estimated to be due 242.17 during the budget year on bonds issued to finance the 242.18 acquisition and betterment and all other costs of acquisition 242.19 and betterment estimated to be paid during the budget year from 242.20 funds other than bond proceeds and federal or state grants. 242.21 Subd. 6. [DISTRICT DISPOSAL SYSTEM.] "District disposal 242.22 system" means any and all of the interceptors or treatment works 242.23 owned, constructed, or operated by the board unless designated 242.24 by the board as local sanitary sewer facilities. 242.25 Subd. 7. [CENTRAL LAKES REGION SANITARY DISTRICT AND 242.26 DISTRICT.] "Central Lakes Region Sanitary District" and 242.27 "district" mean the area over which the sanitary sewer board has 242.28 jurisdiction, including those parts of the Douglas county 242.29 townships of Carlos, Brandon, La Grand, Leaf Valley, Miltona, 242.30 and Moe, as more particularly described by metes and bounds in 242.31 the comprehensive plan adopted under section 4. 242.32 Subd. 8. [INTERCEPTOR.] "Interceptor" means any sewer and 242.33 necessary appurtenances to it, including but not limited to, 242.34 mains, pumping stations, and sewage flow regulating and 242.35 measuring stations, that is designed for or used to conduct 242.36 sewage originating in more than one local government unit, or 243.1 that is designed or used to conduct all or substantially all the 243.2 sewage originating in a single local government unit from a 243.3 point of collection in that unit to an interceptor or treatment 243.4 works outside that unit, or that is determined by the board to 243.5 be a major collector of sewage used or designed to serve a 243.6 substantial area in the district. 243.7 Subd. 9. [LOCAL GOVERNMENT UNIT OR GOVERNMENT 243.8 UNIT.] "Local government unit" or "government unit" means any 243.9 municipal or public corporation or governmental or political 243.10 subdivision or agency located in whole or in part in the 243.11 district, authorized by law to provide for the collection and 243.12 disposal of sewage. 243.13 Subd. 10. [LOCAL SANITARY SEWER FACILITIES.] "Local 243.14 sanitary sewer facilities" means all or any part of any disposal 243.15 system in the district other than the district disposal system. 243.16 Subd. 11. [MUNICIPALITY.] "Municipality" means any city or 243.17 town located in whole or in part in the district. 243.18 Subd. 12. [PERSON.] "Person" means any individual, 243.19 partnership, corporation, limited liability company, 243.20 cooperative, or other organization or entity, public or private. 243.21 Subd. 13. [POLLUTION AND SEWER SYSTEM.] "Pollution" and 243.22 "sewer system" have the meanings given them in Minnesota 243.23 Statutes, section 115.01. 243.24 Subd. 14. [SANITARY SEWER BOARD OR BOARD.] "Sanitary sewer 243.25 board" or "board" means the sanitary sewer board established for 243.26 the Central Lakes Region Sanitary District as provided in 243.27 section 2. 243.28 Subd. 15. [SEWAGE.] "Sewage" means all liquid or 243.29 water-carried waste products from whatever sources derived, 243.30 together with the groundwater infiltration and surface water 243.31 that may be present. 243.32 Subd. 16. [TOTAL COSTS OF ACQUISITION AND BETTERMENT AND 243.33 COSTS OF ACQUISITION AND BETTERMENT.] "Total costs of 243.34 acquisition and betterment" and "costs of acquisition and 243.35 betterment" mean all acquisition and betterment expenses that 243.36 are permitted to be financed out of bond proceeds issued in 244.1 accordance with section 12, subdivision 4, whether or not the 244.2 expenses are in fact financed out of the bond proceeds. 244.3 Subd. 17. [TREATMENT WORKS AND DISPOSAL 244.4 SYSTEM.] "Treatment works" and "disposal system" have the 244.5 meanings given them in Minnesota Statutes, section 115.01. 244.6 Sec. 2. [SANITARY SEWER BOARD.] 244.7 Subdivision 1. [ESTABLISHMENT.] A sanitary sewer board 244.8 with jurisdiction in the Central Lakes Region Sanitary District 244.9 is established as a public corporation and political subdivision 244.10 of the state with perpetual succession and all the rights, 244.11 powers, privileges, immunities, and duties that may be validly 244.12 granted to or imposed upon a municipal corporation, as provided 244.13 in this article. 244.14 Subd. 2. [MEMBERS AND SELECTION.] The number of board 244.15 members and method by which they are selected is as follows: 244.16 The elected chief executive officer of any municipality and the 244.17 town board chair of each township located in whole or part 244.18 within the district must each separately select one member. 244.19 Upon the board's ordering of a project to construct a sanitary 244.20 sewer, the elected chief executive officer or town board chair 244.21 respectively of any municipality or township must appoint one 244.22 additional member for each full 800 special assessments included 244.23 in the ordered project to be levied against property located in 244.24 the municipality or township. The term of each member is 244.25 subject to the approval of the voting members of the city 244.26 council or town board. 244.27 Subd. 3. [TIME LIMIT; ALTERNATIVE APPOINTMENT.] The 244.28 initial board members must be selected as provided in 244.29 subdivision 2 within 60 days after this article is effective. A 244.30 successor must be selected at any time within 60 days before the 244.31 expiration of the predecessor's term in the same manner as the 244.32 predecessor was selected. Any vacancy on the board must be 244.33 filled within 60 days after it occurs. If a selection is not 244.34 made as provided within the time prescribed, the chief judge of 244.35 the seventh judicial district of the Minnesota district court, 244.36 on application by any interested person, shall appoint an 245.1 eligible person to the board. 245.2 Subd. 4. [VACANCIES.] If the office of any board member 245.3 becomes vacant, the vacancy shall be filled for the unexpired 245.4 term in the manner as provided for selection of the member who 245.5 vacated the office. The office shall be deemed vacant under the 245.6 conditions specified in Minnesota Statutes, section 351.02. 245.7 Subd. 5. [TERMS OF OFFICE.] The terms of all board members 245.8 shall be for one, two, three, or four calendar years to be 245.9 determined in accordance with subdivision 2 by the governing 245.10 body selecting such member. Terms shall expire on January 1 of 245.11 a calendar year, except that each member shall serve until a 245.12 successor has been duly selected and qualified. 245.13 Subd. 6. [REMOVAL.] A board member may be removed by the 245.14 unanimous vote of the appointing governing body with or without 245.15 cause. 245.16 Subd. 7. [QUALIFICATIONS.] Each board member may, but need 245.17 not be a resident of the district and may, but need not be an 245.18 elected public official. 245.19 Subd. 8. [CERTIFICATES OF SELECTION; OATH OF OFFICE.] A 245.20 certificate of selection to a seat of every board member, 245.21 stating the seat's term, must be made by the respective 245.22 municipal or town clerk. The certificate, with the approval 245.23 attached by other authority, if required, must be filled with 245.24 the secretary of state. A copy must be furnished to the board 245.25 member and the secretary of the board. Each member must qualify 245.26 by taking and subscribing to the oath of office prescribed by 245.27 the Minnesota Constitution, article V, section 6. The oath, 245.28 duly certified by the official administering the same, must be 245.29 filed with the secretary of state and the secretary of the board. 245.30 Subd. 9. [COMPENSATION OF BOARD MEMBERS.] Each board 245.31 member may be paid a per diem compensation to attend meetings 245.32 and for other services in an amount as may be specifically 245.33 authorized by the board from time to time. Per diem 245.34 compensation may not exceed $4,000 for any member in any one 245.35 year. All members of the board must be reimbursed for all 245.36 reasonable expenses incurred in the performance of their duties 246.1 as determined by the board. 246.2 Sec. 3. [GENERAL PROVISION FOR ORGANIZATION AND OPERATION 246.3 OF BOARD.] 246.4 Subdivision 1. [OFFICERS MEETINGS; SEAL.] A majority of 246.5 the members is a quorum at all meetings of the board, but a 246.6 lesser number may meet and adjourn from time to time and compel 246.7 the attendance of absent members. The board must meet regularly 246.8 at the time and place as the board by resolution designates. 246.9 Special meetings may be held at any time upon call of the chair 246.10 or any two members, upon written notice sent by mail to each 246.11 member at least three days before the meeting, or upon the 246.12 notice as the board by resolution may provide, or without notice 246.13 if each member is present or files with the secretary a written 246.14 consent to the meeting either before or after the meeting. 246.15 Except as otherwise provided in this article, any action within 246.16 the authority of the board may be taken by the affirmative vote 246.17 of a majority of the board at a regular or adjourned regular 246.18 meeting or at a duly held special meeting, but in any case only 246.19 if a quorum is present. All meetings of the board must be open 246.20 to the public as provided in Minnesota Statutes, chapter 13D. 246.21 Subd. 2. [CHAIR.] The board must elect a chair from its 246.22 membership. The term of the chair expires on January 1 of each 246.23 year. The chair presides at all meetings of the board, if 246.24 present, and must perform all other duties and functions usually 246.25 incumbent upon the officer, and all administrative functions 246.26 assigned to the chair by the board. The board must elect a 246.27 vice-chair from its membership to act for the chair during a 246.28 temporary absence or disability. 246.29 Subd. 3. [SECRETARY AND TREASURER.] The board must select 246.30 one or more persons who may, but need not be a member of the 246.31 board, to act as its secretary and treasurer. The secretary and 246.32 treasurer hold office at the pleasure of the board, subject to 246.33 the terms of any contract of employment that the board may enter 246.34 into with the secretary or treasurer. The secretary must record 246.35 the minutes of all meetings of the board, and is custodian of 246.36 all books and records of the board except those the board 247.1 entrusts to the custody of a designated employee. The board may 247.2 appoint a deputy to perform any and all functions of either the 247.3 secretary or the treasurer. A secretary or treasurer or a 247.4 deputy of either who is not a member of the board shall not have 247.5 any right to vote. 247.6 Subd. 4. [GENERAL MANAGER.] The board may appoint a 247.7 general manager who shall be selected solely upon the basis of 247.8 training, experience, and other qualifications. The general 247.9 manager serves at the pleasure of the board and at a 247.10 compensation to be determined by the board. The general manager 247.11 need not be a resident of the district and may also be selected 247.12 by the board to serve as either secretary or treasurer, or both, 247.13 of the board. The general manager must attend all meetings of 247.14 the board but must not vote. The general manager must: 247.15 (1) see that all resolutions, rules, regulations, or orders 247.16 of the board are enforced; 247.17 (2) appoint and remove, upon the basis of merit and 247.18 fitness, all subordinate officers and regular employees of the 247.19 board except the secretary and the treasurer and their deputies; 247.20 (3) present to the board plans, studies, and other reports 247.21 prepared for board purposes and recommend to the board for 247.22 adoption such measures as the general manager considers 247.23 necessary to enforce or carry out the powers and duties of the 247.24 board, or for the efficient administration of the affairs of the 247.25 board; 247.26 (4) keep the board fully advised as to its financial 247.27 condition, and prepare and submit to the board, and to the 247.28 governing bodies of the local government units, the board's 247.29 annual budget and other financial information the board 247.30 requests; 247.31 (5) recommend to the board for adoption rules recommended 247.32 as necessary for the efficient operation of a district disposal 247.33 system and all local sanitary sewer facilities over which the 247.34 board may assume responsibility as provided in section 17; and 247.35 (6) perform other duties as may be prescribed by the board. 247.36 Subd. 5. [PUBLIC EMPLOYEES.] The general manager and all 248.1 persons employed by the general manager are public employees, 248.2 and have all the rights and duties conferred on public employees 248.3 under the Minnesota Public Employment Labor Relations Act. The 248.4 compensation and conditions of employment of the employees is 248.5 not governed by any rule applicable to state employees in the 248.6 classified service or by Minnesota Statutes, chapter 15A, except 248.7 as specifically authorized by law. 248.8 Subd. 6. [PROCEDURES.] The board must adopt resolutions or 248.9 bylaws establishing procedures for board action, personnel 248.10 administration, record keeping, investment policy, approving 248.11 claims, authorizing or making disbursements, safekeeping funds, 248.12 and audit of all financial operations of the board. 248.13 Subd. 7. [SURETY BONDS AND INSURANCE.] The board may 248.14 procure surety bonds for its officers and employees in such 248.15 amounts as are considered necessary to assure proper performance 248.16 of their duties and proper accounting for funds in their custody. 248.17 It may buy insurance against risks to property and liability of 248.18 the board and its officers, agents, and employees for personal 248.19 injuries or death and property damage and destruction in the 248.20 amounts as it considers necessary or desirable, with the force 248.21 and effect stated in Minnesota Statutes, chapter 466. 248.22 Sec. 4. [COMPREHENSIVE PLAN.] 248.23 Subdivision 1. [BOARD PLAN AND PROGRAM.] The board shall 248.24 adopt a comprehensive plan for the collection, treatment, and 248.25 disposal of sewage in the district for designated periods that 248.26 the board considers proper and reasonable. The board must 248.27 prepare and adopt subsequent comprehensive plans for the 248.28 collection, treatment, and disposal of sewage in the district 248.29 for each succeeding designated period as the board considers 248.30 proper and reasonable. The plan must take into account the 248.31 preservation and best and most economic use of water and other 248.32 natural resources in the area; the preservation, use, and 248.33 potential for use of lands adjoining waters of the state to be 248.34 used for the disposal of sewage; and the impact such a disposal 248.35 system will have on present and future land use in the affected 248.36 area. The plans shall include the following: 249.1 (1) the exact legal description of the boundaries of the 249.2 district; 249.3 (2) the general location of needed interceptors and 249.4 treatment works; 249.5 (3) a description of the area that is to be served by the 249.6 various interceptors and treatment works; 249.7 (4) a long-range capital improvements program; and 249.8 (5) such other details as the board deems appropriate. 249.9 In developing the plans, the board shall consult with persons 249.10 designated by the governing bodies of any municipal or public 249.11 corporation or governmental or political subdivision or agency 249.12 within or without the district to represent such entities and 249.13 shall consider the data, resources, and input offered to the 249.14 board by such entities and any planning agency acting on behalf 249.15 of one or more such entities. Each plan, when adopted, must be 249.16 followed in the district and may be revised as often as the 249.17 board considers necessary. 249.18 Subd. 2. [REPORT TO DOUGLAS COUNTY.] Upon adoption of any 249.19 comprehensive plan that establishes or reestablishes the 249.20 boundaries of the district, the board must supply the 249.21 appropriate Douglas county offices with the boundaries of the 249.22 district. 249.23 Subd. 3. [COMPREHENSIVE PLANS; HEARING.] Before adopting 249.24 any later comprehensive plan, the board must hold a public 249.25 hearing on the proposed plan at the time and place in the 249.26 district it determines. The hearing may be continued from time 249.27 to time. Not less than 45 days before the hearing, the board 249.28 must publish notice of it in a newspaper or newspapers having 249.29 general circulation in the district stating the date, time, and 249.30 place of the hearing, and the place where the proposed plan may 249.31 be examined by any interested person. At the hearing, all 249.32 interested persons must be permitted to present their views on 249.33 the plan. 249.34 Subd. 4. [MUNICIPAL PLANS AND PROGRAMS; COORDINATION WITH 249.35 BOARD'S RESPONSIBILITIES.] Before undertaking the construction 249.36 of new sewers or other disposal facilities or the substantial 250.1 alteration or improvement of any existing sewers or other 250.2 disposal facilities, each local government unit may, and must if 250.3 the construction or alteration of any sewage disposal facilities 250.4 is contemplated by the government unit, adopt a comprehensive 250.5 plan and program for the collection, treatment, and disposal of 250.6 sewage for which the local government unit is responsible, 250.7 coordinated with the board's comprehensive plan, and may revise 250.8 the plan as often as deemed necessary. Each local plan or 250.9 revision must be submitted to the board for review and is 250.10 subject to the approval of the board as to those features of the 250.11 plan affecting the board's responsibilities as determined by the 250.12 board. Any features disapproved by the board must be modified 250.13 in accordance with the board's recommendations. No construction 250.14 project involving those features may be undertaken by the local 250.15 government unit unless its governing body first finds the 250.16 project to be in accordance with the government unit's 250.17 comprehensive plan and program as approved by the board. Before 250.18 approval by the board of the comprehensive plan and program of 250.19 any local government unit in the district, no construction 250.20 project may be undertaken by the government unit unless approval 250.21 of the project is first gotten from the board as to those 250.22 features of the project affecting the board's responsibilities 250.23 as determined by the board. 250.24 Sec. 5. [SEWER SERVICE FUNCTION.] 250.25 Subdivision 1. [DUTY OF BOARD; ACQUISITION OF EXISTING 250.26 FACILITIES; NEW FACILITIES.] At any time after the board has 250.27 become organized, it must assume ownership of all existing 250.28 interceptors and treatment works that are needed to implement 250.29 the board's comprehensive plan for the collection, treatment, 250.30 and disposal of sewage in the district, in the manner and 250.31 subject to the conditions prescribed in subdivision 2, and must 250.32 design, acquire, construct, better, equip, operate, and maintain 250.33 all additional interceptors and treatment works that will be 250.34 needed for this purpose. The board must assume ownership of all 250.35 treatment works owned by a local government unit if any part of 250.36 those treatment works are so needed. 251.1 Subd. 2. [METHOD OF ACQUISITION; EXISTING DEBT.] The board 251.2 may require any local government unit to transfer to the board 251.3 all of its right, title, and interest in any interceptors or 251.4 treatment works and all necessary appurtenances to them owned by 251.5 the local government unit that will be needed for the purpose 251.6 stated in subdivision 1. Appropriate instruments of conveyance 251.7 for all the property must be executed and delivered to the board 251.8 by the proper officers of each local government unit concerned. 251.9 The board, upon assuming ownership of any of the interceptors or 251.10 treatment works, is obligated to pay to the local government 251.11 unit amounts sufficient to pay, when due, all remaining 251.12 principal of and interest on bonds issued by the local 251.13 government unit for the acquisition or betterment of the 251.14 interceptors or treatment works. The board must also assume the 251.15 same obligation with respect to any other existing disposal 251.16 system owned by a local government unit that the board 251.17 determines to have been replaced or rendered useless by the 251.18 district disposal system. The amounts to be paid under this 251.19 subdivision may be offset against any amount to be paid to the 251.20 board by the local government unit as provided in section 8. 251.21 The board is not obligated to pay the local government unit 251.22 anything in addition to the assumption of debt provided for in 251.23 this subdivision. 251.24 Subd. 3. [EXISTING JOINT POWERS BOARD.] Effective December 251.25 31, 2004, or an earlier date as determined by the board, the 251.26 corporate existence of the joint powers board created by 251.27 agreement among local government units under Minnesota Statutes, 251.28 section 471.59, to provide the financing, acquisition, 251.29 construction, improvement, extension, operation, and maintenance 251.30 of facilities for the collection, treatment, and disposal of 251.31 sewage is terminated. All persons regularly employed by the 251.32 joint powers board on that date become employees of the board, 251.33 and may at their option become members of the retirement system 251.34 applicable to persons employed directly by the board or may 251.35 continue as members of a public retirement association under any 251.36 other law, to which they belonged before that date, and retain 252.1 all pension rights that they may have under the other law and 252.2 all other rights to which they are entitled by contract or law. 252.3 The board must make the employer's contributions to pension 252.4 funds of its employees. The employees must perform duties as 252.5 may be prescribed by the board. On December 31, 2004, or the 252.6 earlier date, all funds of the joint powers board and all later 252.7 collections of taxes, special assessments, or service charges, 252.8 or any other sums due the joint powers board, or levied or 252.9 imposed by or for the joint powers board, must be transferred to 252.10 or made payable to the sanitary sewer board and the county 252.11 auditor must remit the sums to the board. The local government 252.12 units otherwise entitled to the cash, taxes, assessments, or 252.13 service charges must be credited with the amounts, and the 252.14 credits must be offset against any amounts to be paid by them to 252.15 the board as provided in section 8. On December 31, 2004, or 252.16 the earlier chosen date, the board shall succeed to and become 252.17 vested with all right, title, and interest in and to any 252.18 property, real or personal, owned or operated by the joint 252.19 powers board. Before that date, the proper officers of the 252.20 joint powers board must execute and deliver to the sanitary 252.21 sewer board all deeds, conveyances, bills of sale, and other 252.22 documents or instruments required to vest in the board good and 252.23 marketable title to all the real or personal property, but this 252.24 article operates as the transfer and conveyance to the board of 252.25 the real or personal property, if not transferred, as may be 252.26 required under the law or under the circumstances. On December 252.27 31, 2004, or the earlier chosen date, the board is obligated to 252.28 pay or assume all outstanding bonds or other debt and all 252.29 contracts or obligations incurred by the joint powers board, and 252.30 all bonds, obligations, or debts of the joint powers board 252.31 outstanding on the date this article is effective, are validated. 252.32 Subd. 4. [CONTRACTS BETWEEN LOCAL GOVERNMENT UNITS.] The 252.33 board may terminate, upon 60 days' mailed notice to the 252.34 contracting parties, any existing contract between or among 252.35 local government units requiring payments by a local government 252.36 unit to any other local government unit for the use of a 253.1 disposal system, or as reimbursement of capital costs of a 253.2 disposal system, all or part of which are needed to implement 253.3 the board's comprehensive plan. All contracts between or among 253.4 local government units for use of a disposal system entered into 253.5 after the date on which this article becomes effective must be 253.6 submitted to the board for approval as to those features 253.7 affecting the board's responsibilities as determined by the 253.8 board and are not effective until the approval is given. 253.9 Sec. 6. [SEWAGE COLLECTION AND DISPOSAL; POWERS.] 253.10 Subdivision 1. [POWERS.] In addition to all other powers 253.11 conferred upon the board in this article, the board has the 253.12 powers specified in this section. 253.13 Subd. 2. [DISCHARGE OF TREATED SEWAGE.] The board may 253.14 discharge the effluent from any treatment works operated by it 253.15 into any waters of the state, subject to approval of the agency 253.16 if required and in accordance with any effluent or water quality 253.17 standards lawfully adopted by the agency, any interstate agency, 253.18 or any federal agency having jurisdiction. 253.19 Subd. 3. [USE OF DISTRICT SYSTEM.] The board may require 253.20 any person or local government unit to provide for the discharge 253.21 of any sewage, directly or indirectly, into the district 253.22 disposal system, or to connect any disposal system or a part of 253.23 it with the district disposal system wherever reasonable 253.24 opportunity is provided; may regulate the manner in which the 253.25 connections are made; may require any person or local government 253.26 unit discharging sewage into the disposal system to provide 253.27 preliminary treatment for it; may prohibit the discharge into 253.28 the district disposal system of any substance it determines will 253.29 or may be harmful to the system or any persons operating it; may 253.30 prohibit any extraneous flow into the system; and may require 253.31 any local government unit to discontinue the acquisition, 253.32 betterment, or operation of any facility for the unit's disposal 253.33 system wherever and so far as adequate service is or will be 253.34 provided by the district disposal system. 253.35 Sec. 7. [BUDGET.] 253.36 Except as otherwise specifically provided in this article, 254.1 the board is subject to Minnesota Statutes, section 275.065, the 254.2 Truth in Taxation Act. The board shall prepare and adopt, on or 254.3 before September 15 of each year, a budget showing for the 254.4 following calendar year or other fiscal year determined by the 254.5 board, sometimes referred to in this article as the budget year, 254.6 estimated receipts of money from all sources, including but not 254.7 limited to, payments by each local government unit, federal or 254.8 state grants, taxes on property, and funds on hand at the 254.9 beginning of the year, and estimated expenditures for: 254.10 (1) costs of operation, administration, and maintenance of 254.11 the district disposal system; 254.12 (2) cost acquisition and betterment of the district 254.13 disposal system; and 254.14 (3) debt service, including principal and interest, on 254.15 general obligation bonds and certificates issued under section 254.16 12, obligations and debts assumed under section 5, subdivisions 254.17 2 and 3, and any money judgments entered by a court of competent 254.18 jurisdiction. Expenditures within these general categories, and 254.19 others that the board may from time to time determine, must be 254.20 itemized in the detail the board prescribes. The board and its 254.21 officers, agents, and employees must not spend money for any 254.22 purpose other than debt service without having set forth the 254.23 expense in the budget, nor may they spend in excess of the 254.24 amount in the budget, and an excess expenditure or one for an 254.25 unauthorized purpose is enforceable except as the obligation of 254.26 the person incurring it; but the board may amend the budget at 254.27 any time by transferring from one budgetary purpose to another 254.28 any sums, except money for debt service and bond proceeds, or by 254.29 increasing expenditures in any amount by which cash receipts 254.30 during the budget year actually exceed the total amounts 254.31 designated in the original budget. The creation of any 254.32 obligation pursuant to section 12 or the receipts of any federal 254.33 or state grant is a sufficient budget designation of the 254.34 proceeds for the purpose for which it is authorized, and of the 254.35 tax or other revenue pledged to pay the obligation and interest 254.36 on it, whether or not specifically included in any annual budget. 255.1 Sec. 8. [ALLOCATION OF COSTS.] 255.2 Subdivision 1. [DEFINITION OF CURRENT COSTS.] The 255.3 estimated cost of administration, operation, maintenance, and 255.4 debt service of the district disposal system to be paid by the 255.5 board in each fiscal year and the estimated costs of acquisition 255.6 and betterment of the system that are to be paid during the year 255.7 from funds other than state or federal grants and bond proceeds 255.8 and all other previously unallocated payments made by the board 255.9 under this article in the fiscal year are referred to as current 255.10 costs. 255.11 Subd. 2. [COLLECTION OF CURRENT COSTS.] Current costs 255.12 shall be collected as described in paragraphs (a) and (b). 255.13 (a) Current costs may be allocated to local government 255.14 units in the district on an equitable basis as the board may 255.15 from time to time determine by resolution to be fair and 255.16 reasonable and in the best interests of the district. In making 255.17 the allocation, the board may provide for the deferment of 255.18 payment of all or part of current costs, the reallocation of 255.19 deferred costs, and the reimbursement of reallocated deferred 255.20 costs on an equitable basis as the board may from time to time 255.21 determine by resolution to be fair and reasonable and in the 255.22 best interests of the district. The adoption or revision of a 255.23 method of allocation, deferment, reallocation, or reimbursement 255.24 used by the board shall be made by the affirmative vote of at 255.25 least two-thirds of the members of the board. 255.26 (b) Upon approval of at least two-thirds of the members of 255.27 the board, the board may provide for direct collection of 255.28 current costs by monthly or other periodic billing of sewer 255.29 users. 255.30 Sec. 9. [GOVERNMENT UNITS; PAYMENTS TO BOARD.] 255.31 Subdivision 1. [OBLIGATIONS OF GOVERNMENT UNITS TO THE 255.32 BOARD.] Each government unit must pay to the board all sums 255.33 charged to it as provided in section 8, at the times and in the 255.34 manner determined by the board. The governing body of each 255.35 government unit must take all action necessary to provide the 255.36 funds required for the payments and to make the payments when 256.1 due. 256.2 Subd. 2. [AMOUNTS DUE BOARD; WHEN PAYABLE.] Charges 256.3 payable to the board by local government units may be made 256.4 payable at the times during each year as the board determines, 256.5 after it has taken into account the dates on which taxes, 256.6 assessments, revenue collections, and other funds become 256.7 available to the government unit required to pay such charges. 256.8 Subd. 3. [GENERAL POWERS OF GOVERNMENT UNITS; LOCAL TAX 256.9 LEVIES.] To accomplish any duty imposed on it by the board, the 256.10 governing body of every government unit may, in addition to the 256.11 powers granted in this article and in any other law or charter, 256.12 exercise the powers granted any municipality by Minnesota 256.13 Statutes, chapters 117, 412, 429, and 475, and sections 115.46, 256.14 444.075, and 471.59, with respect to the area of the government 256.15 unit located in the district. In addition, the governing body 256.16 of every government unit located in whole or in part within the 256.17 district may levy taxes upon all taxable property in that part 256.18 of the government unit located in this district for all or a 256.19 part of the amount payable to the board. If the levy is for 256.20 only part of the amount payable to the board, the governing body 256.21 of the government unit may levy additional taxes on the entire 256.22 net tax capacity of all taxable property of the government unit 256.23 for all or a part of the balance remaining payable. The taxes 256.24 levied under this subdivision must be assessed and extended as a 256.25 tax upon the taxable property by the county auditor for the next 256.26 calendar year, free from any limit of rate or amount imposed by 256.27 law or charter. The tax must be collected and remitted in the 256.28 same manner as other general taxes of the government unit. 256.29 Subd. 4. [ALTERNATE LEVY.] In place of levying taxes on 256.30 all taxable property under subdivision 3, the governing body of 256.31 the government unit may elect to levy taxes upon the net tax 256.32 capacity of all taxable property, except agricultural property, 256.33 and upon only 25 percent of the net tax capacity of all 256.34 agricultural property, in that part of the government unit 256.35 located in the district for all or a part of the amount payable 256.36 to the board. If the levy is for only part of the amount 257.1 payable to the board, the governing body may levy additional 257.2 taxes on the entire net tax capacity of all the property, 257.3 including agricultural property, for all or a part of the 257.4 balance. The taxes must be assessed and extended as a tax upon 257.5 the taxable property by the county auditor for the next calendar 257.6 year, free from any limit of rate or amount imposed by law or 257.7 charter, and must be collected and remitted in the same manner 257.8 as other general taxes of the government unit. In computing the 257.9 tax capacity under this subdivision, the county auditor must 257.10 include only 25 percent of the net tax capacity of all taxable 257.11 agricultural property and 100 percent of the net tax capacity of 257.12 all other taxable property in that part of the government unit 257.13 located within the district and, in spreading the levy, the 257.14 auditor must apply the tax rate upon the same percentages of 257.15 agricultural and nonagricultural taxable property. If the 257.16 government unit elects to levy taxes under this subdivision and 257.17 any of the taxable agricultural property is reclassified so as 257.18 to no longer qualify as agricultural property, it is subject to 257.19 additional taxes. The additional taxes must be in an amount 257.20 which, together with any additional taxes previously levied and 257.21 the estimated collection of additional taxes subsequently levied 257.22 on any other reclassified property, is determined by the 257.23 governing body of the government unit to be at least sufficient 257.24 to reimburse each other government unit for any excess current 257.25 costs reallocated to it as a result of the board deferring any 257.26 current cost under section 8 on account of the difference 257.27 between the amount of the current costs initially allocated to 257.28 each government unit based on the total net tax capacity of all 257.29 taxable property in the district and the amount of the current 257.30 costs reallocated to each government unit based on 25 percent of 257.31 the net tax capacity of agricultural property and 100 percent of 257.32 the net tax capacity of all other taxable property in the 257.33 district. Any reimbursement must be made on terms which the 257.34 board determines to be just and reasonable. These additional 257.35 taxes may be levied in any greater amount as the governing body 257.36 of the government unit determines to be appropriate, but the 258.1 total amount of the additional taxes must not exceed the 258.2 difference between: 258.3 (1) the total amount of taxes that would have been levied 258.4 upon the reclassified property to help pay current costs charged 258.5 in each year to the government unit by the board if that part of 258.6 the costs, if any, initially allocated by the board solely on 258.7 the basis of 100 percent of the net tax capacity of all taxable 258.8 property in the district and then reallocated on the basis of 258.9 inclusion of only 25 percent of the net tax capacity of 258.10 agricultural property in the district was not reallocated and if 258.11 the amount of taxes levied by the government unit each year 258.12 under this subdivision to pay current costs had been based on 258.13 the initial allocation and had been imposed upon 100 percent of 258.14 the net tax capacity of all taxable property, including 258.15 agricultural property, in that part of the government unit 258.16 located in the district; and 258.17 (2) the amount of taxes levied each year under this 258.18 subdivision upon reclassified property, plus interest on the 258.19 cumulative amount of the difference accruing each year at the 258.20 approximate average annual rate borne by bonds issued by the 258.21 board and outstanding at the beginning of the year or, if no 258.22 bonds are then outstanding, at a rate of interest which may be 258.23 determined by the board, but not exceeding the maximum rate of 258.24 interest that may then be paid on bonds issued by the board. 258.25 The additional taxes are a lien upon the reclassified property 258.26 assessed in the same manner and for the same duration as all 258.27 other ad valorem taxes levied upon the property. The additional 258.28 taxes must be extended against the reclassified property on the 258.29 tax list for the current year and must be collected and remitted 258.30 in the same manner as other general taxes of the government 258.31 unit. No penalties or additional interest may be levied on the 258.32 additional taxes if timely paid. 258.33 Subd. 5. [DEBT LIMIT.] Any ad valorem taxes levied under 258.34 subdivision 3, by the governing body of a government unit to pay 258.35 any sums charged to it by the board pursuant to this article are 258.36 not subject to, or counted toward, any limit imposed by law on 259.1 the levy of taxes upon taxable property within any governmental 259.2 unit. 259.3 Subd. 6. [DEFICIENCY TAX LEVIES.] If the local government 259.4 unit fails to make a payment to the board when due, the board 259.5 may certify to the Douglas county auditor the amount required 259.6 for payment, with interest at not more than the maximum rate per 259.7 year authorized at that time on assessments under Minnesota 259.8 Statutes, section 429.061, subdivision 2. The auditor must levy 259.9 and extend the amount as a tax upon all taxable property in that 259.10 part of the government unit located in the district, for the 259.11 next calendar year, free from any limits imposed by law or 259.12 charter. The tax must be collected in the same manner as other 259.13 general taxes of the government unit, and the proceeds, when 259.14 collected, shall be paid by the county treasurer to the 259.15 treasurer of the board and credited to the government unit for 259.16 which the tax was levied. 259.17 Sec. 10. [PUBLIC HEARING AND SPECIAL ASSESSMENTS.] 259.18 Subdivision 1. [PUBLIC HEARING REQUIREMENT ON SPECIFIC 259.19 PROJECT.] Before the board orders any project involving the 259.20 acquisition or betterment of any interceptor or treatment works, 259.21 all or a part of the cost of which will be allocated to local 259.22 government units under section 8 as current costs, the board 259.23 must hold a public hearing on the proposed project following two 259.24 publications in a newspaper or newspapers having general 259.25 circulation in the district, stating the time and place of the 259.26 hearing, the general nature and location of the project, the 259.27 estimated total cost of acquisition and betterment, that portion 259.28 of costs estimated to be paid out of federal and state grants, 259.29 and that portion of costs estimated to be allocated to each 259.30 local government unit affected. The two publications must be a 259.31 week apart and the hearing must be at least three days after the 259.32 last publication. Not less than 45 days before the hearing, 259.33 notice must also be mailed to each clerk of all local government 259.34 units in the district, but failure to give mailed notice of any 259.35 defects in the notice does not invalidate the proceedings. The 259.36 project may include all or part of one or more interceptors or 260.1 treatment works. A hearing is not required with respect to a 260.2 project, no part of the costs of which are to be allocated to 260.3 local government units as the current cost of acquisition, 260.4 betterment, and debt service. 260.5 Subd. 2. [NOTICE TO BENEFITED PROPERTY OWNERS.] If the 260.6 governing body of a local government unit in the district 260.7 proposes to assess against benefited property within units, all 260.8 or any part of the allocable costs of the project as provided in 260.9 subdivision 5, the governing body must, not less than ten days 260.10 before the hearing provided for in subdivision 1 mail a notice 260.11 of the hearing to the owner of each parcel within the area 260.12 proposed to be specially assessed and must also give one week's 260.13 published notice of the hearing. The notice of hearing must 260.14 contain the same information provided in the notice published by 260.15 the board under subdivision 1, and in addition, a description of 260.16 the area proposed to be assessed by the local government unit. 260.17 To give mailed notice, owners must be those shown to be on the 260.18 records of the county auditor or, in a county where tax 260.19 statements are mailed by the county treasurer, on the records of 260.20 the county treasurer; but other appropriate records may be used 260.21 for this purpose. However, for properties that are tax exempt 260.22 or subject to taxation on a gross earnings basis and are not 260.23 listed on the records of the county auditor or the county 260.24 treasurer, the owners may be ascertained by any practicable 260.25 means and mailed notice must be given to them. Failure to give 260.26 mailed notice or any defects in the notice does not invalidate 260.27 the proceedings of the board or the local governing body. 260.28 Subd. 3. [BOARD PROCEEDINGS PERTAINING TO HEARING.] Before 260.29 adoption of the resolution calling for the hearing, the board 260.30 shall get from the district engineer, or other competent person 260.31 of the board's selection, a preliminary report advising whether 260.32 the proposed project is feasible, necessary, and cost-effective, 260.33 and whether it should best be made as proposed or in connection 260.34 with another project, and the estimated costs of the project as 260.35 recommended. No error or omission in the report invalidates the 260.36 proceeding. The board may also take steps before the hearing 261.1 that will, in its judgment, provide helpful information in 261.2 determining the desirability and feasibility of the project 261.3 including, but not limited to, preparation of plans and 261.4 specifications and advertisement for bids. The hearing may be 261.5 adjourned from time to time and a resolution ordering the 261.6 project may be adopted at any time within six months after the 261.7 date of hearing. In ordering the project, the board may reduce 261.8 but not increase the extent of the project as stated in the 261.9 notice of hearing, unless another hearing is held, and must find 261.10 that the project as ordered is in accordance with the 261.11 comprehensive plan and program adopted by the board under 261.12 section 4. 261.13 Subd. 4. [EMERGENCY ACTION.] If the board by resolution 261.14 adopted by the affirmative vote of not less than two-thirds of 261.15 its members determines that an emergency exists requiring the 261.16 immediate purchase of materials or supplies or the making of 261.17 emergency repairs, it may order the purchase of the supplies and 261.18 materials and the making of the repairs before any hearing 261.19 required under this section. But the board must set as early a 261.20 date as practicable for that hearing at the time it declares the 261.21 emergency. All other provisions of this section must be 261.22 followed in giving notice of and conducting a hearing. This 261.23 subdivision does not prevent the board or its agents from 261.24 purchasing maintenance supplies or incurring maintenance costs 261.25 without regard to the requirements of this section. 261.26 Subd. 5. [POWER OF GOVERNMENT UNIT TO SPECIALLY ASSESS.] A 261.27 local government unit may specially assess all or part of the 261.28 costs of acquisition and betterment of any project ordered by 261.29 the board under this section. A special assessment must be 261.30 levied in accordance with Minnesota Statutes, sections 429.051 261.31 to 429.081, except as otherwise provided in this subdivision. 261.32 No other provisions of Minnesota Statutes, chapter 429, apply. 261.33 For purposes of levying special assessments, the hearing on the 261.34 project required in subdivision 1 must serve as the hearing on 261.35 the making of the original improvement provided for by Minnesota 261.36 Statutes, section 429.051. The area assessed may be less than 262.1 but must not exceed the area proposed to be assessed as stated 262.2 in the notice of hearing on the project provided for in 262.3 subdivision 2. To determine the allocable cost of the project 262.4 to the local government units, the government unit may adopt one 262.5 of the procedures in paragraph (a) or (b). 262.6 (a) At any time after a contract is let for the project, 262.7 the local government unit may get from the board a current 262.8 written estimate, on the basis of historical and reasonably 262.9 projected data, of that part of the total cost of acquisition 262.10 and betterment of the project or of some part of the project 262.11 that will be allocated to the local government unit and the 262.12 number of years over which such costs will be allocated as 262.13 current costs of acquisition, betterment, and debt service under 262.14 section 8. The board is not bound by this estimate for 262.15 allocating the costs of the project to local government units. 262.16 (b) The governing body may get from the board a written 262.17 statement showing, for the prior period that the governing body 262.18 designates, that part of the costs previously allocated to the 262.19 local government unit as current costs of acquisition, 262.20 betterment, and debt service only, of all or any part of the 262.21 project designated by the governing body. In addition to the 262.22 allocable costs, the local government unit may include in the 262.23 total expense, as a basis for levying assessments, all other 262.24 expenses incurred directly by the local government unit in 262.25 connection with the project. Special assessments levied by the 262.26 government unit with respect to previously allocated costs 262.27 ascertained under this paragraph are payable in equal annual 262.28 installments extending over a period not exceeding by more than 262.29 one year the number of years that the costs have been allocated 262.30 to the local government unit or the estimated useful life of the 262.31 project, or part of the project, whichever number of years is 262.32 the lesser. No limit is placed on the number of times the 262.33 governing body of a local government unit may assess the 262.34 previously allocated costs not previously assessed by the 262.35 government unit. The power to specially assess provided for in 262.36 this section is in addition and supplemental to all other powers 263.1 of local government units to levy special assessments. 263.2 Sec. 11. [INITIAL COSTS.] 263.3 Subdivision 1. [CONTRIBUTIONS OR ADVANCES FROM LOCAL 263.4 GOVERNMENT UNITS.] The board may, at the time it considers 263.5 necessary and proper, request from a local government unit 263.6 necessary money to defray the costs of any obligations assumed 263.7 under section 5 and the costs of administration, operation, and 263.8 maintenance. Before making a request, the board must, by formal 263.9 resolution, determine the necessity for the money, setting forth 263.10 the purposes for which the money is needed and the estimated 263.11 amount for each purpose. Upon receiving a request, the 263.12 governing body of each local government unit may provide for 263.13 payment of the amount requested as it considers fair and 263.14 reasonable. The money may be paid out of general revenue funds 263.15 or any other available funds of any local government unit and 263.16 its governing body thereof may levy taxes to provide funds, free 263.17 from any existing limit imposed by law or charter. Money may be 263.18 provided by government units with or without interest, but if 263.19 interest is charged it must not exceed five percent per year. 263.20 The board must credit the local government unit for the payments 263.21 in allocating current costs under section 8, on the terms and at 263.22 the times as are agreed to with the local government unit. 263.23 Subd. 2. [LIMITED TAX LEVY.] The board may levy ad valorem 263.24 taxes on all taxable property in the district to defray any of 263.25 the costs described in subdivision 1, provided the costs have 263.26 not been defrayed by contribution under subdivision 1. Before 263.27 certifying a levy to the county auditor, the board must 263.28 determine the need for the money to be derived from the levy by 263.29 formal resolution setting forth the purposes for which the tax 263.30 money will be used and the amount proposed to be used for each 263.31 purpose. In allocating current costs under section 8, the board 263.32 must credit the government units for taxes collected under the 263.33 levy made under this subdivision on the terms and at the time 263.34 the board considers fair and reasonable and on terms consistent 263.35 with section 8, subdivision 2. 263.36 Sec. 12. [BONDS, CERTIFICATES, AND OTHER OBLIGATIONS.] 264.1 Subdivision 1. [BUDGET ANTICIPATION CERTIFICATES OF 264.2 INDEBTEDNESS.] (a) Before adopting its annual budget and in 264.3 anticipation of the collection of tax and other revenues 264.4 estimated and set forth by the board in the budget, the board 264.5 may by resolution, authorize the issuance, negotiation, and sale 264.6 in accordance with subdivision 5 in such form and manner and 264.7 upon such terms as it may determine of its negotiable general 264.8 obligation certificates of indebtedness in aggregate principal 264.9 amounts not exceeding 50 percent of the total amount of such tax 264.10 collections and other revenues and maturing not later than three 264.11 months after the close of the budget year in which issued. 264.12 Revenues listed in clauses (1) to (3) must not be anticipated 264.13 for this purpose: 264.14 (1) taxes already anticipated by the issuance of 264.15 certificates under subdivision 2; 264.16 (2) deficiency taxes levied pursuant to this subdivision; 264.17 and 264.18 (3) taxes levied for the payment of certificates issued 264.19 pursuant to subdivision 3. 264.20 (b) The proceeds of the sale of the certificates must be 264.21 used only for the purposes for which tax collections and other 264.22 revenues are to be expended under the budget. 264.23 (c) All tax collections and other revenues included in the 264.24 budget for the budget year, after the expenditures of tax 264.25 collections and other revenues in accordance with the budget, 264.26 must be irrevocably pledged and appropriated to a special fund 264.27 to pay the principal and interest on the certificates when due. 264.28 (d) If for any reason the tax collections and other 264.29 revenues are insufficient to pay the certificates and interest 264.30 when due, the board must levy a tax in the amount of the 264.31 deficiency on all taxable property in the district and must 264.32 appropriate this amount when received to the special fund. 264.33 Subd. 2. [TAX LEVY ANTICIPATION CERTIFICATES OF 264.34 INDEBTEDNESS.] After a tax is levied by the board under section 264.35 11, subdivision 2, and certified to the county auditors in 264.36 anticipation of the collection of the tax, if the tax has not 265.1 been anticipated by the issuance of certificates under 265.2 subdivision 1, the board may, by resolution, authorize the 265.3 issuance, negotiation, and sale in accordance with subdivision 5 265.4 in the form and manner and on the terms and conditions as it 265.5 determines its negotiable general obligation tax levy 265.6 anticipation certificates of indebtedness in aggregate principal 265.7 amounts not exceeding 50 percent of the uncollected tax for 265.8 which no penalty for nonpayment or delinquency has been 265.9 attached. The certificates must mature not later than April 1 265.10 in the year after the year in which the tax is collectible. The 265.11 proceeds of the tax in anticipation of which the certificates 265.12 were issued and other funds that may become available must be 265.13 applied to the extent necessary to repay the certificates. 265.14 Subd. 3. [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in 265.15 any budget year the receipts of tax and other revenues for some 265.16 unforeseen cause become insufficient to pay the board's current 265.17 expenses, or if any calamity or other public emergency subjects 265.18 it to the necessity of making extraordinary expenditures, the 265.19 board may by resolution authorize the issuance, negotiation, and 265.20 sale in accordance with subdivision 5 in the form and manner and 265.21 on the terms and conditions as it may determine of its 265.22 negotiable general obligation certificates of indebtedness in an 265.23 amount sufficient to meet the deficiency, and the board must 265.24 levy on all taxable property in the district a tax sufficient to 265.25 pay the certificates and interest and shall appropriate all 265.26 collections of the tax to a special fund created for the payment 265.27 of the certificates and interest. 265.28 Subd. 4. [GENERAL OBLIGATION BONDS.] The board may by 265.29 resolution authorize the issuance of general obligation bonds 265.30 maturing serially in one or more annual or semiannual 265.31 installments for the acquisition or betterment of any part of 265.32 the district disposal system, including but not limited to, the 265.33 payment of interest during construction and for a reasonable 265.34 period thereafter, or for the refunding of outstanding bonds, 265.35 certificates of indebtedness, or judgments. The board must 265.36 pledge its full faith and credit and taxing power for the 266.1 payment of the bonds and shall provide for the issuance and sale 266.2 and for the security of the bonds in the manner provided in 266.3 Minnesota Statutes, chapter 475, and must have the same powers 266.4 and duties as a municipality issuing bonds under that law. An 266.5 election is not required to authorize the issuance of bonds and 266.6 the debt limit of Minnesota Statutes, chapter 475, do not apply 266.7 to the bonds. The board may also pledge for the payment of the 266.8 bonds and deduct from the amount of any tax levy required under 266.9 Minnesota Statutes, section 475.61, subdivision 1, any sums 266.10 receivable under section 9 or any state and federal grants 266.11 anticipated by the board and may covenant to refund the bonds if 266.12 and when and to the extent that for any reason the revenues, 266.13 together with other funds properly available and appropriated 266.14 for the purpose, are not sufficient to pay all principal and 266.15 interest due or about to become due; if the revenues have not 266.16 been anticipated by the issuance of certificates under 266.17 subdivision 1. All bonds that have been or shall hereafter be 266.18 issued and sold in conformity with the provisions of this 266.19 subdivision, and otherwise in conformity with law, are hereby 266.20 authorized, legalized, and validated. 266.21 Subd. 5. [MANNER OF SALE AND ISSUANCE OF 266.22 CERTIFICATES.] Certificates issued under subdivisions 1, 2, and 266.23 3 may be issued and sold by negotiation, without public sale, 266.24 and may be sold at a price equal to the percentage of their par 266.25 value, plus accrued interest, and bearing interest at the rate 266.26 or rates as may be determined by the board. No election is 266.27 required to authorize the issuance of certificates. 266.28 Certificates must bear the same rate of interest after maturity 266.29 as before and the full faith and credit and taxing power of the 266.30 board must be pledged to the payment of the certificates. 266.31 Sec. 13. [TAX LEVIES.] 266.32 The board may levy taxes to pay the bonds or other 266.33 obligations assumed by the district under section 5 and for debt 266.34 service of the district disposal system authorized in section 12 266.35 upon all taxable property within the district without limit of 266.36 rate or amount and without affecting the amount or rate of taxes 267.1 that may be levied by the board for other purposes or by any 267.2 local government unit in the district. No other provision of 267.3 law relating to debt limit shall restrict or in any way limit 267.4 the power of the board to issue the bonds and certificates 267.5 authorized in section 12. The board may also levy taxes as 267.6 provided in sections 9 and 11. The county auditor must annually 267.7 assess and extend upon the tax rolls the part of the taxes 267.8 levied by the board in each year that is certified to the 267.9 auditor by the board. The county treasurer must collect and 267.10 make settlement of the taxes with the treasurer of the board. 267.11 Sec. 14. [DEPOSITORIES.] 267.12 The board must from time to time designate one or more 267.13 national or state banks or trust companies authorized to do a 267.14 banking business as official depositories for money of the 267.15 board, and must require the treasurer to deposit all or a part 267.16 of the money in those institutions. The designation must be in 267.17 writing and must set forth all the terms and conditions on which 267.18 the deposits are made, and must be signed by the chair and 267.19 treasurer, and made a part of the minutes of the board. A 267.20 designated bank or trust company must qualify as a depository by 267.21 furnishing a corporate surety bond or collateral in the amount 267.22 required by Minnesota Statutes, section 118A.03. But, no bond 267.23 or collateral is required to secure any deposit insofar as it is 267.24 insured under federal law. 267.25 Sec. 15. [MONEY; ACCOUNTS AND INVESTMENTS.] 267.26 Subdivision 1. [RECEIPT AND APPLICATION.] All money 267.27 received by the board must be deposited or invested by the 267.28 treasurer and disposed of as the board directs in accordance 267.29 with its budget. But any money that has been pledged or 267.30 dedicated by the board to the payment of obligations or interest 267.31 on them or expenses incident to them, or for any other specific 267.32 purpose authorized by law, must be paid by the treasurer into 267.33 the fund to which they have been pledged. 267.34 Subd. 2. [FUNDS AND ACCOUNTS.] The board's treasurer must 267.35 establish funds and accounts as necessary or convenient to 267.36 handle the receipts and disbursements of the board in an orderly 268.1 fashion. 268.2 Subd. 3. [DEPOSIT AND INVESTMENT.] The money on hand in 268.3 the board's funds and accounts may be deposited in the official 268.4 depositories of the board or invested as provided in this 268.5 subdivision. The amount not currently needed or required by law 268.6 to be kept in cash on deposit may be invested in obligations 268.7 authorized by law for the investment of municipal sinking 268.8 funds. The money may also be held under certificates of deposit 268.9 issued by any official depository of the board. All investments 268.10 by the board must conform to an investment policy adopted by the 268.11 board as amended from time to time. 268.12 Subd. 4. [BOND PROCEEDS.] The use of proceeds of all bonds 268.13 issued by the board for the acquisition and betterment of the 268.14 district disposal system, and the use, other than investment, of 268.15 all money on hand in any sinking fund or funds of the board must 268.16 be governed by Minnesota Statutes, chapter 475, this article, 268.17 and the resolutions authorizing the issuance of the bonds. The 268.18 bond proceeds, when received, must be transferred to the 268.19 treasurer of the board for safekeeping, investment, and payment 268.20 of the costs for which they were issued. 268.21 Subd. 5. [AUDIT.] The board must provide for and pay the 268.22 cost of an independent annual audit of its official books and 268.23 records by the state public examiner or a certified public 268.24 accountant. 268.25 Sec. 16. [GENERAL POWERS OF BOARD.] 268.26 Subdivision 1. [ALL NECESSARY OR CONVENIENT POWERS.] The 268.27 board has powers necessary or convenient to discharge the duties 268.28 imposed upon it by law. The powers include those specified in 268.29 this article, but the express grant or enumeration of powers 268.30 does not limit the generality or scope of the grant of power in 268.31 this subdivision. 268.32 Subd. 2. [LAWSUITS.] The board may sue or be sued. 268.33 Subd. 3. [CONTRACTS.] The board may enter into any 268.34 contract necessary or proper for the exercise of its powers or 268.35 the accomplishment of its purposes. 268.36 Subd. 4. [RULES.] The board may adopt rules relating to 269.1 the board's responsibilities and may provide penalties not 269.2 exceeding the maximum penalty specified for a misdemeanor, and 269.3 the cost of prosecution may be added to the penalties imposed. 269.4 Any rule prescribing a penalty for violation must be published 269.5 at least once in a newspaper having general circulation in the 269.6 district. A violation may be prosecuted before any court in the 269.7 district having jurisdiction of misdemeanor, and every court has 269.8 jurisdiction of violations. A constable or other peace officer 269.9 of any municipality in the district may make arrests for 269.10 violations committed anywhere in the district in the manner and 269.11 with the effect as for violations of local ordinances or for 269.12 statutory misdemeanors. All fines collected must be deposited 269.13 in the treasury of the board, or may be allocated between the 269.14 board and the municipality in which the prosecution occurs on 269.15 terms agreed to by the board and the municipality. 269.16 Subd. 5. [GIFTS; GRANTS.] The board may accept gifts, may 269.17 apply for and accept grants or loans of money or other property 269.18 from the United States, the state, or any person for any of its 269.19 purposes, may enter into any agreement required to get the gift, 269.20 grant, loan, or other property; and may hold, use, and dispose 269.21 of money or property in accordance with the terms of the gift, 269.22 grant, loan or agreement. With respect to any loans or grants 269.23 of funds or real or personal property or other assistance from 269.24 any state or federal government or any agency or instrumentality 269.25 of the government, the board may contract to do and perform all 269.26 acts and things required as a condition or consideration under 269.27 state or federal law or rule or regulation, whether or not 269.28 included among the powers expressly granted to the board in this 269.29 article. 269.30 Subd. 6. [JOINT POWERS.] The board may act under Minnesota 269.31 Statutes, section 471.59, or any other appropriate law providing 269.32 for joint or cooperative action between government units. 269.33 Subd. 7. [RESEARCH; HEARINGS; INVESTIGATIONS; ADVISE.] The 269.34 board may conduct research studies and programs, collect and 269.35 analyze data, prepare reports, maps, charts, and tables, and 269.36 conduct all necessary hearings and investigations in connection 270.1 with the design, construction, and operation of the district 270.2 disposal system, and may advise and assist other government 270.3 units on system planning matters within the scope of its powers, 270.4 duties, and objectives, and may provide at the request of any 270.5 governmental unit other technical and administrative assistance 270.6 as the board considers appropriate for the government unit to 270.7 carry out the powers and duties vested in the government unit 270.8 under this article or imposed on or by the board. 270.9 Subd. 8. [EMPLOYEES; CONTRACTORS; INSURANCE.] The board 270.10 may employ on the terms it considers advisable, persons or firms 270.11 performing engineering, legal, or other services of a 270.12 professional nature; require any employee to get and file with 270.13 it an individual bond or fidelity insurance policy; and procure 270.14 insurance in the amounts it considers necessary against 270.15 liability of the board or its officers or both, for personal 270.16 injury or death and property damage or destruction, with the 270.17 force and effect stated in Minnesota Statutes, chapter 466, and 270.18 against risks of damage to or destruction of any of its 270.19 facilities, equipment, or other property as it considers 270.20 necessary. 270.21 Subd. 9. [PROPERTY.] The board may acquire by purchase, 270.22 lease, condemnation, gift, or grant, real or personal property 270.23 including positive and negative easements and water and air 270.24 rights, and it may construct, enlarge, improve, replace, repair, 270.25 maintain, and operate any interceptor, treatment works, or water 270.26 facility determined to be necessary or convenient for the 270.27 collection and disposal of sewage in the district. Any local 270.28 government unit and the commissioners of transportation and 270.29 natural resources may convey to or permit the use of these 270.30 facilities owned or controlled by the board, subject to the 270.31 rights of the holders of any bonds issued with respect to them 270.32 with or without compensation and without an election or approval 270.33 by any other government unit or agency. All powers conferred by 270.34 this subdivision may be exercised both within or outside the 270.35 district as may be necessary for the exercise by the board of 270.36 its powers or the accomplishment of its purposes. The board may 271.1 hold, lease, convey, or otherwise dispose of such property for 271.2 its purposes, upon the terms and in the manner it deems 271.3 advisable. Unless otherwise provided, the right to acquire 271.4 lands and property rights by condemnation must be exercised in 271.5 accordance with Minnesota Statutes, chapter 117, and must apply 271.6 to any property or interest in property owned by any local 271.7 government unit, but property devoted to an actual public use at 271.8 the time, or held to be devoted to such use within a reasonable 271.9 time, must not be so acquired unless a court of competent 271.10 jurisdiction determines that the use proposed by the board is 271.11 paramount. In case of property in actual public use, the board 271.12 may take possession of any property of which condemnation 271.13 proceedings have begun at any time after the issuance of a court 271.14 order appointing commissioners for its condemnation. 271.15 Subd. 10. [RIGHTS-OF-WAY.] The board may construct or 271.16 maintain its systems or facilities in, along, on, under, over, 271.17 or through public waters, streets, bridges, viaducts, and other 271.18 public rights-of-way without first getting a franchise from any 271.19 county or local government unit having jurisdiction over them, 271.20 but the facilities must be constructed and maintained in 271.21 accordance with the ordinances and resolutions of the county or 271.22 government unit relating to construction, installation, and 271.23 maintenance of similar facilities on public properties and must 271.24 not unnecessarily obstruct the public use of the rights-of-way. 271.25 Subd. 11. [DISPOSAL OF PROPERTY.] The board may sell, 271.26 lease, or otherwise dispose of any real or personal property 271.27 acquired by it that is no longer required to accomplish its 271.28 purposes. The property may be sold in the manner provided by 271.29 Minnesota Statutes, section 469.065, insofar as practical. The 271.30 board may give notice of sale it considers appropriate. When 271.31 the board determines that any property or any part of the 271.32 district disposal system that has been acquired from a local 271.33 government unit without compensation is no longer required, but 271.34 is required as a local facility by the government unit from 271.35 which is was acquired, the board may by resolution transfer it 271.36 to the government unit. 272.1 Subd. 12. [JOINT OPERATIONS.] The board may contract with 272.2 the United States or an agency of it, any state or agency of it, 272.3 or any regional public planning body in the state with 272.4 jurisdiction over any part of the district, or any other 272.5 municipal or public corporation, or governmental subdivision in 272.6 any state, for the joint use of any facility owned by the board 272.7 or the entity, for the operation by the entity of any system or 272.8 facility of the board, or for the performance on the board's 272.9 behalf of any service including, but not limited to, planning, 272.10 on the terms that may be agreed to by the contracting parties. 272.11 Unless designated by the board as a local sanitary sewer 272.12 facility, any treatment works or interceptor jointly used, or 272.13 operated on behalf of the board, as provided in this 272.14 subdivision, must be considered to be operated by the board to 272.15 include the facilities in the district disposal system. 272.16 Sec. 17. [LOCAL FACILITIES.] 272.17 Subdivision 1. [SANITARY SEWER FACILITIES.] Except as 272.18 otherwise provided in this article, local government units must 272.19 retain responsibility for the planning, design, acquisition, 272.20 betterment, operation, administration, and maintenance of all 272.21 local sanitary sewer facilities as provided by law. 272.22 Subd. 2. [ASSUMPTION OF RESPONSIBILITY OVER LOCAL SANITARY 272.23 SEWER FACILITIES.] The board must upon request of any government 272.24 unit assume, either alone or jointly with the local government 272.25 unit, all or any part of the responsibility of the local 272.26 government unit described in subdivision 1. Except as provided 272.27 in subdivision 4 and to exercise the responsibility, the board 272.28 has all the powers and duties elsewhere conferred in this 272.29 article with the same force and effect as if the local sanitary 272.30 sewer facilities were a part of the district disposal system. 272.31 Subd. 3. [WATER AND STREET FACILITIES.] The board may, on 272.32 request of any governmental unit, enter into an agreement under 272.33 which the board may assume, either alone or jointly with such 272.34 unit, the responsibility to get and construct water and street 272.35 facilities in conjunction with any project for the acquisition 272.36 or betterment of the district disposal system or any project 273.1 undertaken by the board under subdivision 2. Except as provided 273.2 in subdivision 4, and to exercise any responsibilities under 273.3 this subdivision, the board has all the powers and duties 273.4 elsewhere conferred in this article with the same force and 273.5 effect as if the water or street facilities were a part of the 273.6 district disposal system. 273.7 Subd. 4. [ALLOCATION OF CURRENT COSTS.] All current costs 273.8 attributable to responsibilities assumed by the board over local 273.9 sanitary sewer facilities and water and street facilities as 273.10 provided in this section must be allocated solely to the local 273.11 unit for or with whom the responsibilities are assumed on the 273.12 terms and over a period as the board determines to be equitable 273.13 and in the best interest of the district. But if two or more 273.14 government units form a region in accordance with this section 273.15 all or part of the current costs attributable to the region 273.16 must, at the request of its joint board, be allocated to the 273.17 region and provided in the agreement establishing the region. 273.18 Subd. 5. [PART OF DISTRICT SYSTEM.] This section or any 273.19 other part of this article does not prevent the board from 273.20 including, where appropriate, treatment works or interceptors, 273.21 previously designated or treated as local sanitary sewer 273.22 facilities, as a part of the district disposal system. 273.23 Sec. 18. [SERVICE CONTRACTS WITH GOVERNMENTS OUTSIDE 273.24 DISTRICT.] 273.25 The board may contract with the United States or any agency 273.26 of it, any state or any agency of it, or any municipal or public 273.27 corporation, governmental subdivision or agency, or political 273.28 subdivision in any state, outside the jurisdiction of the board, 273.29 for furnishing to the entities any services which the board may 273.30 furnish to local government units in the district under this 273.31 article including, but not limited to, planning for and the 273.32 acquisition, betterment, operation, administration, and 273.33 maintenance of any or all interceptors, treatment works, and 273.34 local sanitary sewer facilities; if the board may further 273.35 include as one of the terms of the contract that the entity also 273.36 pay to the board an amount as may be agreed upon as a reasonable 274.1 estimate of the proportionate share properly allocable to the 274.2 entity of costs of acquisition, betterment, and debt service 274.3 previously allocated to local government units in the district. 274.4 When the payments are made by the entities to the board, they 274.5 must be applied in reduction of the total amount of costs 274.6 allocated after that to each local government unit in the 274.7 district, on the equitable basis the board considers to be in 274.8 the best interest of the district. Any municipality in the 274.9 state may enter into the contract and perform all acts and 274.10 things required as a condition or consideration for it 274.11 consistent with the purpose of this article, whether or not 274.12 included among the powers otherwise granted to the municipality 274.13 by law or charter, the powers to include those powers set out in 274.14 section 9, subdivisions 3, 3a, and 4. 274.15 Sec. 19. [CONSTRUCTION, MATERIALS, SUPPLIES, EQUIPMENT; 274.16 CONTRACTS.] 274.17 Subdivision 1. [PLANS AND SPECIFICATIONS.] When the board 274.18 orders a project involving the acquisition or betterment of a 274.19 part of the district disposal system, it must cause plans and 274.20 specifications of this project to be made, or if previously 274.21 made, to be modified, if necessary, and to be approved by the 274.22 agency if required, and after any required approval by the 274.23 agency, one or more contracts for work and materials called for 274.24 by the plans and specification may be awarded as provided in 274.25 this section. 274.26 Subd. 2. [UNIFORM MUNICIPAL CONTRACTING LAW.] Except as 274.27 otherwise provided in this section, all contracts for work to be 274.28 done or for purchases of materials, supplies, or equipment must 274.29 be done in accordance with Minnesota Statutes, section 471.345. 274.30 Subd. 3. [CONTRACTS OR PURCHASES.] The board may without 274.31 advertising for bids, enter into any contract or purchase any 274.32 materials, supplies, or equipment of the type referred to in 274.33 subdivision 2 in accordance with applicable state law. 274.34 Sec. 20. [ANNEXATION OF TERRITORY.] 274.35 Any municipality in Douglas county, upon resolution adopted 274.36 by a four-fifths vote of its governing body, may petition the 275.1 board for annexation to the district of the area then comprising 275.2 the municipality or any part of it and, if accepted by the 275.3 board, the area must be considered annexed to the district and 275.4 subject to the jurisdiction of the board under the terms and 275.5 provisions of this article. The territory so annexed is subject 275.6 to taxation and assessment under this article and is subject to 275.7 taxation by the board like other property in the district for 275.8 the payment of principal and interest thereafter becoming due on 275.9 general obligations of the board, whether authorized or issued 275.10 before or after the annexation. The board may condition 275.11 approval of the annexation upon the contribution, by or on 275.12 behalf of the municipality petitioning for annexation, to the 275.13 board of an amount as may be agreed upon as being a reasonable 275.14 estimate of the proportionate share, properly allocable to the 275.15 municipality, of cost or acquisition, betterment, and debt 275.16 service previously allocated to local government units in the 275.17 district, on the terms as may be agreed upon and in place of or 275.18 in addition to further conditions as the board deems in the best 275.19 interests of the district. Notwithstanding any other provisions 275.20 of this article to the contrary, the conditions established for 275.21 annexation may include the requirement that the annexed 275.22 municipality pay for, contract for, and oversee the construction 275.23 of local sanitary sewer facilities and interceptor sewers as 275.24 those terms are defined in section 1. To pay the contribution 275.25 or satisfy any other condition established by the board, the 275.26 municipality petitioning annexation may exercise the powers 275.27 conferred in section 9. When the contributions are made by the 275.28 municipality to the board, they must be applied to reduce the 275.29 total amount of costs thereafter allocated to each local 275.30 government unit in the district, on the equitable basis as the 275.31 board considers to be in the best interests of the district, 275.32 applying so far as practicable and appropriate the criteria set 275.33 forth in section 8, subdivision 2. On annexation of the 275.34 territory, the secretary of the board must certify to the 275.35 auditor and treasurer of the county in which the municipality is 275.36 located the fact of the annexation and a legal description of 276.1 the territory annexed. 276.2 Sec. 21. [PROPERTY EXEMPT FROM TAXATION.] 276.3 Any properties, real or personal, owned, leased, 276.4 controlled, used, or occupied by the sanitary sewer board for 276.5 any purpose under this article are declared to be acquired, 276.6 owned, leased, controlled, used, and occupied for public, 276.7 governmental, and municipal purposes, and are exempt from 276.8 taxation by the state or any political subdivision of the state; 276.9 but the properties are subject to special assessments levied by 276.10 a political subdivision for a local improvement in amounts 276.11 proportionate to and not exceeding the special benefit received 276.12 by the properties from the improvement. No possible use of any 276.13 of the properties in any manner different from their use as part 276.14 of the disposal system at the time may be considered in 276.15 determining the special benefit received by the properties. All 276.16 of the assessments are subject to final approval by the board, 276.17 whose determination of the benefits is conclusive upon the 276.18 political subdivision levying the assessment. 276.19 Sec. 22. [RELATION TO EXISTING LAWS.] 276.20 This article prevails over any law or charter inconsistent 276.21 with it. The powers conferred on the board under this article 276.22 do not diminish or supersede the powers conferred on the agency 276.23 by Minnesota Statutes, chapters 115 and 116. 276.24 Sec. 23. [APPLICATION.] 276.25 This article applies to the townships of Carlos, Brandon, 276.26 La Grand, Leaf Valley, Miltona, and Moe in Douglas county. 276.27 Sec. 24. [LOCAL APPROVAL.] 276.28 Sections 1 to 23 take effect for those townships that have 276.29 approved it the day after each of the governing bodies of at 276.30 least four of the local governmental units referred to in 276.31 section 23 have complied with Minnesota Statutes, section 276.32 645.021, subdivision 3. A township listed in section 23 that 276.33 has not complied with Minnesota Statutes, section 645.021, 276.34 subdivision 3, by the date when the first four townships have 276.35 done so may opt back in to the district at a later time by 276.36 annexation as provided in this article. 277.1 ARTICLE 13 277.2 MINERALS TAXATION 277.3 Section 1. Minnesota Statutes 2002, section 272.02, is 277.4 amended by adding a subdivision to read: 277.5 Subd. 56. [PROPERTY USED IN THE BUSINESS OF MINING SUBJECT 277.6 TO THE NET PROCEEDS TAX.] The following property used in the 277.7 business of mining subject to the net proceeds tax under section 277.8 298.015 is exempt: 277.9 (1) deposits of ores, metals, and minerals and the lands in 277.10 which they are contained; 277.11 (2) all real and personal property used in a process that 277.12 includes both mining and producing or refining ores, minerals, 277.13 or metals, including lands occupied by or used in connection 277.14 with the mining or production facilities; and 277.15 (3) concentrate or direct reduced ore. 277.16 This exemption applies for taxes payable in each year that a 277.17 person subject to the tax under section 298.015 uses the 277.18 property for mining and producing or refining ores, metals, or 277.19 minerals. 277.20 [EFFECTIVE DATE.] This section is effective for taxes 277.21 payable in 2004 and thereafter. 277.22 Sec. 2. Minnesota Statutes 2002, section 290.05, 277.23 subdivision 1, is amended to read: 277.24 Subdivision 1. [EXEMPT ENTITIES.] The following 277.25 corporations, individuals, estates, trusts, and organizations 277.26 shall be exempted from taxation under this chapter, provided 277.27 that every such person or corporation claiming exemption under 277.28 this chapter, in whole or in part, must establish to the 277.29 satisfaction of the commissioner the taxable status of any 277.30 income or activity: 277.31 (a) corporations, individuals, estates, and trusts engaged 277.32 in the business of mining or producing iron ore and mining, 277.33 producing, or refining other ores, metals, and minerals, the 277.34 miningor, production, or refining of which is subject to the 277.35 occupation tax imposed by section 298.01; but if any such 277.36 corporation, individual, estate, or trust engages in any other 278.1 business or activity or has income from any property not used in 278.2 such business it shall be subject to this tax computed on the 278.3 net income from such property or such other business or 278.4 activity. Royalty shall not be considered as income from the 278.5 business of mining or producing iron ore within the meaning of 278.6 this section; 278.7 (b) the United States of America, the state of Minnesota or 278.8 any political subdivision of either agencies or 278.9 instrumentalities, whether engaged in the discharge of 278.10 governmental or proprietary functions; and 278.11 (c) any insurance company. 278.12 [EFFECTIVE DATE.] This section is effective for taxable 278.13 years beginning after December 31, 2002. 278.14 Sec. 3. Minnesota Statutes 2002, section 290.17, 278.15 subdivision 4, is amended to read: 278.16 Subd. 4. [UNITARY BUSINESS PRINCIPLE.] (a) If a trade or 278.17 business conducted wholly within this state or partly within and 278.18 partly without this state is part of a unitary business, the 278.19 entire income of the unitary business is subject to 278.20 apportionment pursuant to section 290.191. Notwithstanding 278.21 subdivision 2, paragraph (c), none of the income of a unitary 278.22 business is considered to be derived from any particular source 278.23 and none may be allocated to a particular place except as 278.24 provided by the applicable apportionment formula. The 278.25 provisions of this subdivision do not apply to business income 278.26 subject to subdivision 5, income of an insurance company,or278.27 income of an investment company determined under section 290.36, 278.28 or income of a mine or mineral processing facility subject to 278.29 tax under section 298.01. 278.30 (b) The term "unitary business" means business activities 278.31 or operations which result in a flow of value between them. The 278.32 term may be applied within a single legal entity or between 278.33 multiple entities and without regard to whether each entity is a 278.34 sole proprietorship, a corporation, a partnership or a trust. 278.35 (c) Unity is presumed whenever there is unity of ownership, 278.36 operation, and use, evidenced by centralized management or 279.1 executive force, centralized purchasing, advertising, 279.2 accounting, or other controlled interaction, but the absence of 279.3 these centralized activities will not necessarily evidence a 279.4 nonunitary business. Unity is also presumed when business 279.5 activities or operations are of mutual benefit, dependent upon 279.6 or contributory to one another, either individually or as a 279.7 group. 279.8 (d) Where a business operation conducted in Minnesota is 279.9 owned by a business entity that carries on business activity 279.10 outside the state different in kind from that conducted within 279.11 this state, and the other business is conducted entirely outside 279.12 the state, it is presumed that the two business operations are 279.13 unitary in nature, interrelated, connected, and interdependent 279.14 unless it can be shown to the contrary. 279.15 (e) Unity of ownership is not deemed to exist when a 279.16 corporation is involved unless that corporation is a member of a 279.17 group of two or more business entities and more than 50 percent 279.18 of the voting stock of each member of the group is directly or 279.19 indirectly owned by a common owner or by common owners, either 279.20 corporate or noncorporate, or by one or more of the member 279.21 corporations of the group. For this purpose, the term "voting 279.22 stock" shall include membership interests of mutual insurance 279.23 holding companies formed under section 60A.077. 279.24 (f) The net income and apportionment factors under section 279.25 290.191 or 290.20 of foreign corporations and other foreign 279.26 entities which are part of a unitary business shall not be 279.27 included in the net income or the apportionment factors of the 279.28 unitary business. A foreign corporation or other foreign entity 279.29 which is required to file a return under this chapter shall file 279.30 on a separate return basis. The net income and apportionment 279.31 factors under section 290.191 or 290.20 of foreign operating 279.32 corporations shall not be included in the net income or the 279.33 apportionment factors of the unitary business except as provided 279.34 in paragraph (g). 279.35 (g) The adjusted net income of a foreign operating 279.36 corporation shall be deemed to be paid as a dividend on the last 280.1 day of its taxable year to each shareholder thereof, in 280.2 proportion to each shareholder's ownership, with which such 280.3 corporation is engaged in a unitary business. Such deemed 280.4 dividend shall be treated as a dividend under section 290.21, 280.5 subdivision 4. 280.6 Dividends actually paid by a foreign operating corporation 280.7 to a corporate shareholder which is a member of the same unitary 280.8 business as the foreign operating corporation shall be 280.9 eliminated from the net income of the unitary business in 280.10 preparing a combined report for the unitary business. The 280.11 adjusted net income of a foreign operating corporation shall be 280.12 its net income adjusted as follows: 280.13 (1) any taxes paid or accrued to a foreign country, the 280.14 commonwealth of Puerto Rico, or a United States possession or 280.15 political subdivision of any of the foregoing shall be a 280.16 deduction; and 280.17 (2) the subtraction from federal taxable income for 280.18 payments received from foreign corporations or foreign operating 280.19 corporations under section 290.01, subdivision 19d, clause (10), 280.20 shall not be allowed. 280.21 If a foreign operating corporation incurs a net loss, 280.22 neither income nor deduction from that corporation shall be 280.23 included in determining the net income of the unitary business. 280.24 (h) For purposes of determining the net income of a unitary 280.25 business and the factors to be used in the apportionment of net 280.26 income pursuant to section 290.191 or 290.20, there must be 280.27 included only the income and apportionment factors of domestic 280.28 corporations or other domestic entities other than foreign 280.29 operating corporations that are determined to be part of the 280.30 unitary business pursuant to this subdivision, notwithstanding 280.31 that foreign corporations or other foreign entities might be 280.32 included in the unitary business. 280.33 (i) Deductions for expenses, interest, or taxes otherwise 280.34 allowable under this chapter that are connected with or 280.35 allocable against dividends, deemed dividends described in 280.36 paragraph (g), or royalties, fees, or other like income 281.1 described in section 290.01, subdivision 19d, clause (10), shall 281.2 not be disallowed. 281.3 (j) Each corporation or other entity, except a sole 281.4 proprietorship, that is part of a unitary business must file 281.5 combined reports as the commissioner determines. On the 281.6 reports, all intercompany transactions between entities included 281.7 pursuant to paragraph (h) must be eliminated and the entire net 281.8 income of the unitary business determined in accordance with 281.9 this subdivision is apportioned among the entities by using each 281.10 entity's Minnesota factors for apportionment purposes in the 281.11 numerators of the apportionment formula and the total factors 281.12 for apportionment purposes of all entities included pursuant to 281.13 paragraph (h) in the denominators of the apportionment formula. 281.14 (k) If a corporation has been divested from a unitary 281.15 business and is included in a combined report for a fractional 281.16 part of the common accounting period of the combined report: 281.17 (1) its income includable in the combined report is its 281.18 income incurred for that part of the year determined by 281.19 proration or separate accounting; and 281.20 (2) its sales, property, and payroll included in the 281.21 apportionment formula must be prorated or accounted for 281.22 separately. 281.23 [EFFECTIVE DATE.] This section is effective for taxable 281.24 years beginning after December 31, 2002. 281.25 Sec. 4. Minnesota Statutes 2002, section 290.191, 281.26 subdivision 1, is amended to read: 281.27 Subdivision 1. [GENERAL RULE.] (a) Except as otherwise 281.28 provided in section 290.17, subdivision 5, the net income from a 281.29 trade or business carried on partly within and partly without 281.30 this state must be apportioned to this state as provided in this 281.31 section. To the extent that an entity is exempt from taxation 281.32 under this chapter as provided in section 290.05, the 281.33 apportionment factors associated with the entity's exempt 281.34 activities are excluded from the apportionment formula under 281.35 this section. 281.36 (b) For purposes of this section, "state" means a state of 282.1 the United States, the District of Columbia, the commonwealth of 282.2 Puerto Rico, or any territory or possession of the United States 282.3 or any foreign country. 282.4 [EFFECTIVE DATE.] This section is effective for taxable 282.5 years beginning after December 31, 2002. 282.6 Sec. 5. Minnesota Statutes 2002, section 297A.68, 282.7 subdivision 4, is amended to read: 282.8 Subd. 4. [TACONITE, OTHER ORES, METALS, OR MINERALS; 282.9 PRODUCTION MATERIALS.] Mill liners, grinding rods, and grinding 282.10 balls that are substantially consumed in the production of 282.11 taconite or other ores, metals, or minerals are exempt when sold 282.12 to or stored, used, or consumed by persons taxed under the 282.13 in-lieu provisions of chapter 298. 282.14 [EFFECTIVE DATE.] This section is effective for sales and 282.15 purchases made after June 30, 2005. 282.16 Sec. 6. Minnesota Statutes 2002, section 297A.71, is 282.17 amended by adding a subdivision to read: 282.18 Subd. 32. [CONSTRUCTION MATERIALS AND EQUIPMENT; 282.19 NONFERROUS METALS AND MINERALS FACILITY.] Materials and supplies 282.20 used or consumed in, and equipment incorporated into, the 282.21 improvement or construction of an existing taconite ore 282.22 processing facility to extract and refine nonferrous ores, 282.23 metals, and minerals, including the construction or improvement 282.24 of a hydrometallurgical processing facility, are exempt. This 282.25 exemption includes any delivery or installation charges relating 282.26 to materials, supplies, and equipment exempt under this section. 282.27 [EFFECTIVE DATE.] This section is effective for sales and 282.28 purchases made after June 30, 2005, and before July 1, 2012. 282.29 Sec. 7. Minnesota Statutes 2002, section 298.001, is 282.30 amended by adding a subdivision to read: 282.31 Subd. 9. [PRECIOUS MINERALS TAX RELIEF AREA.] The 282.32 "precious minerals tax relief area" means the area of the 282.33 following independent school districts: 282.34 (1) No. 166, Cook County; 282.35 (2) No. 316, Coleraine; 282.36 (3) No. 318, Grand Rapids; 283.1 (4) No. 319, Nashwauk-Keewatin; 283.2 (5) No. 381, Lake Superior; 283.3 (6) No. 695, Chisholm; 283.4 (7) No. 696, Ely; 283.5 (8) No. 701, Hibbing; 283.6 (9) No. 706, Virginia; 283.7 (10) No. 712, Mountain Iron-Buhl; 283.8 (11) No. 2711, Mesabi East; 283.9 (12) No. 2142, St. Louis County; and 283.10 (13) No. 2154, Eveleth-Gilbert. 283.11 Sec. 8. Minnesota Statutes 2002, section 298.01, 283.12 subdivision 3, is amended to read: 283.13 Subd. 3. [OCCUPATION TAX; OTHER ORES.] Every person 283.14 engaged in the business of mining, refining, or producing ores, 283.15 metals, or minerals in this state, except iron ore or taconite 283.16 concentrates, shall pay an occupation tax to the state of 283.17 Minnesota as provided in this subdivision. For purposes of this 283.18 subdivision, mining includes the application of 283.19 hydrometallurgical processes. The tax is determined in the same 283.20 manner as the tax imposed by section 290.02, except that 283.21 sections 290.05, subdivision 1, clause (a), 290.0921, and 283.22 290.17, subdivision 4, do not apply and the rate of taxation is 283.23 1.8 percent. Except as provided in section 290.05, subdivision 283.24 1, paragraph (a), the tax is in addition to all other taxes. 283.25 [EFFECTIVE DATE.] This section is effective for taxable 283.26 years beginning after December 31, 2002. 283.27 Sec. 9. Minnesota Statutes 2002, section 298.01, 283.28 subdivision 3a, is amended to read: 283.29 Subd. 3a. [GROSS INCOME.] (a) For purposes of determining 283.30 a person's taxable income under subdivision 3, gross income is 283.31 determined by the amount of gross proceeds from mining in this 283.32 state under section 298.016 and includes any gain or loss 283.33 recognized from the sale or disposition of assets used in the 283.34 business in this state. 283.35 (b) In applying section 290.191, subdivision 5, transfers 283.36 of ores, metals, or minerals that are subject to this chapter 284.1 are deemed to be sales outside this state if the ores, metals, 284.2 or minerals are transported out of this state after the ores 284.3 have been converted to a commercially marketable quality. 284.4 [EFFECTIVE DATE.] This section is effective for taxable 284.5 years beginning after December 31, 2002. 284.6 Sec. 10. Minnesota Statutes 2002, section 298.015, is 284.7 amended to read: 284.8 298.015 [NET PROCEEDS TAX ON MINING.] 284.9 Subdivision 1. [TAX IMPOSED.] A person engaged in the 284.10 business of mining shall pay to the state of Minnesota for 284.11 distribution as provided in section 298.018 a net proceeds tax 284.12 equal totwofour percent of the net proceeds from mining in 284.13 Minnesota. The tax applies to allmineral and energy resources284.14 ores, metals, and minerals minedor, extracted, or produced 284.15 within the state of Minnesota except for sand, silica sand, 284.16 gravel, building stone, crushed rock, limestone, granite, 284.17 dimension granite, dimension stone, horticultural peat, clay, 284.18 soil, iron ore, and taconite concentrates. The tax is in 284.19 addition to all other taxes provided for by law. 284.20 Subd. 2. [NET PROCEEDS.] For purposes of this section, the 284.21 term "net proceeds" means the gross proceeds from mining, as 284.22 defined in section 298.016, less the same deductions allowedin284.23section 298.017for purposes of determining taxable income under 284.24 section 298.01. No other credits or deductions shall apply to 284.25 this taxexcept for those provided in section 298.017. 284.26 [EFFECTIVE DATE.] This section is effective for taxes 284.27 payable in 2004 and thereafter. 284.28 Sec. 11. Minnesota Statutes 2002, section 298.016, 284.29 subdivision 1, is amended to read: 284.30 Subdivision 1. [COMPUTATION; ARM'S-LENGTH TRANSACTIONS.] 284.31 Whenaan ore, metal or mineral product is sold by the producer 284.32 in an arm's-length transaction, the gross proceeds are equal to 284.33 the proceeds from the sale of the product. This subdivision 284.34 applies to sales realized on allmetalores, metals, ormineral284.35productsminerals produced from mining, including reduction, 284.36 beneficiation, refining, or any treatment used by a producer to 285.1 obtain a metal or mineral product which is commercially 285.2 marketable. 285.3 Sec. 12. Minnesota Statutes 2002, section 298.016, 285.4 subdivision 2, is amended to read: 285.5 Subd. 2. [OTHER TRANSACTIONS.] Whenaan ore, metal, or 285.6 mineralproductis used by the producer or disposed of in a 285.7 non-arm's-length transaction, the gross proceeds must be 285.8 determined using the alternative computation in subdivision 3. 285.9 Transactions subject to this subdivision include, but are not 285.10 limited to, shipments to a wholly owned smelter, transactions 285.11 with associated or affiliated companies, and any other 285.12 transactions which are not at arm's length. 285.13 Sec. 13. Minnesota Statutes 2002, section 298.016, 285.14 subdivision 4, is amended to read: 285.15 Subd. 4. [DEFINITIONS.] For the purposes of sections 285.16 298.015 and 298.017, the terms defined in this subdivision have 285.17 the meaning given them unless the context clearly indicates 285.18 otherwise. 285.19 (a) "Ore, metal, or mineralproducts" means all 285.20 thosemineral and energy resourcesores, metals, and minerals 285.21 subject to the tax provided in section 298.015. 285.22 (b) "Exploration" means activities designed and engaged in 285.23 to ascertain the existence, location, extent, or quality of any 285.24 deposit of metal or mineral products prior to the development of 285.25 a mining site. 285.26 (c) "Development" means activities designed and engaged in 285.27 to prepare or develop a potential mining site for mining after 285.28 the existence of metal or mineral products in commercially 285.29 marketable quantities has been disclosed including, but not 285.30 limited to, the clearing of forestation, the building of roads, 285.31 removal of overburden, or the sinking of shafts. 285.32 (d) "Research" means activities designed and engaged in to 285.33 create new or improved methods of mining, producing, processing, 285.34 beneficiating, smelting, or refining metal or mineral products. 285.35 Sec. 14. Minnesota Statutes 2002, section 298.018, is 285.36 amended to read: 286.1 298.018 [DISTRIBUTION OF PROCEEDS.] 286.2 Subdivision 1. [WITHINTACONITEPRECIOUS MINERALS TAX 286.3 RELIEF AREA.] The proceeds of the tax paid under sections 286.4 298.015 to 298.017 on ores, metals, and mineralsand energy286.5resourcesmined or extracted within thetaconiteprecious 286.6 minerals tax relief areadefined in section 273.134, paragraph286.7(b),shall be allocated as follows: 286.8 (1) five percent to the city or town within which the ores, 286.9 metals, or mineralsor energy resourcesare mined or extracted; 286.10 (2) ten percent to the taconite municipal aid account to be 286.11 distributedas provided in section 298.282to qualifying 286.12 municipalities, as defined in section 298.282 and located in the 286.13 precious mineral tax relief area; 286.14 (3) ten percent to the school district within which the 286.15 ores, metals, or mineralsor energy resourcesare mined or 286.16 extracted; 286.17 (4)2030 percent toa group of school districts comprised286.18of those school districts wherein the mineral or energy resource286.19was mined or extracted or in which there is a qualifying286.20municipality as defined by section 273.134, paragraph (b), in286.21direct proportion to school district indexes as follows: for286.22each school district, its pupil units determined under section286.23126C.05 for the prior school year shall be multiplied by the286.24ratio of the average adjusted net tax capacity per pupil unit286.25for school districts receiving aid under this clause as286.26calculated pursuant to chapters 122A, 126C, and 127A for the286.27school year ending prior to distribution to the adjusted net tax286.28capacity per pupil unit of the district. Each district shall286.29receive that portion of the distribution which its index bears286.30to the sum of the indices for all school districts that receive286.31the distributionsthe state general fund to represent the 286.32 portion of the tax that is in lieu of the state general tax 286.33 under section 275.025; 286.34 (5) 20 percent to the county within which the ores, metals, 286.35 or mineralsor energy resourcesare mined or extracted; 286.36 (6)20 percent to St. Louis county acting as the counties'287.1fiscal agent to be distributed as provided in sections 273.134287.2to 273.136;287.3(7)five percent to the iron range resources and 287.4 rehabilitation board for the purposes of section 298.22; 287.5(8)(7)fiveten percent to thenortheast Minnesota287.6 Douglas J. Johnson economic protection trust fund; and 287.7(9)(8)fiveten percent to the taconite environmental 287.8 protection fund. 287.9 The proceeds of the tax shall be distributed on July 15 287.10 each year. 287.11 Subd. 2. [OUTSIDETACONITEPRECIOUS MINERALS TAX RELIEF 287.12 AREA.] The proceeds of the tax paid under sections 298.015 to 287.13 298.017 on ores, metals, or mineralsand energy resourcesmined 287.14 or extracted outside of thetaconiteprecious minerals tax 287.15 relief areadefined in section 273.134, paragraph (b),shall be 287.16 deposited in the general fund. 287.17 Subd. 3. [SEGREGATION OF FUNDS.] The proceeds of the tax 287.18 allocated under subdivision 1, clauses (2), (6), (7), and (8), 287.19 including any investment earnings on them, must be segregated 287.20 and separately accounted for in the respective funds or accounts 287.21 to which they are allocated. These amounts must only be 287.22 distributed to municipalities within the precious minerals tax 287.23 relief area or used for projects located in the precious 287.24 minerals tax relief area. 287.25 [EFFECTIVE DATE.] This section is effective for 287.26 distribution of net proceeds tax revenues made after July 1, 287.27 2003. 287.28 Sec. 15. [298.021] [ROYALTY TAX.] 287.29 In addition to any other taxes imposed by law, a tax is 287.30 imposed on a royalty, as defined in section 290.923, subdivision 287.31 1, paid on ore, other than iron ore, taconite, iron sulphides, 287.32 or semitaconite. The tax equals 12 percent of the amount of the 287.33 royalty paid. The person paying the royalty shall withhold the 287.34 tax from the payment and remit the payment to the commissioner 287.35 at the times and under the procedures provided under section 287.36 290.923. The commissioner shall deposit proceeds in the general 288.1 fund and allocate the proceeds as provided under section 288.2 298.018, subdivision 1. 288.3 [EFFECTIVE DATE.] This section is effective for royalties 288.4 paid after June 30, 2003. 288.5 Sec. 16. [REPEALER.] 288.6 (a) Minnesota Statutes 2002, section 298.01, subdivisions 288.7 3c and 3d, are repealed effective for taxable years beginning 288.8 after December 31, 2002. 288.9 (b) Minnesota Statutes 2002, section 298.017, is repealed 288.10 effective for taxes payable in 2004 and thereafter. 288.11 ARTICLE 14 288.12 MISCELLANEOUS 288.13 Section 1. [270.30] [DEFINITIONS.] 288.14 Subdivision 1. [SCOPE.] For the purposes of sections 288.15 270.30 to 270.303, the terms defined in this section have the 288.16 meanings given them. 288.17 Subd. 2. [CLIENT.] "Client" means an individual for whom a 288.18 tax preparer performs or agrees to perform tax preparation 288.19 services. 288.20 Subd. 3. [COMMISSIONER.] "Commissioner" means the 288.21 commissioner of revenue. 288.22 Subd. 4. [CONFIDENTIAL INFORMATION.] "Confidential 288.23 information" means information furnished to a tax preparer by a 288.24 client for, or in connection with, the preparation of a client's 288.25 individual income tax or business return. 288.26 Subd. 5. [DEPARTMENT.] "Department" means the department 288.27 of revenue. 288.28 Subd. 6. [FAMILY MEMBER.] "Family member" means spouse, 288.29 parent, grandparent, child, or sibling. 288.30 Subd. 7. [FINANCIAL INSTITUTION.] "Financial institution" 288.31 means a lending institution chartered by an agency of the 288.32 federal government or regulated by the commissioner of commerce. 288.33 Subd. 8. [NONPUBLIC PERSONAL INFORMATION.] "Nonpublic 288.34 personal information" means personally identifiable information 288.35 provided by a client to a tax preparer resulting from any 288.36 transaction or any service performed. 289.1 Subd. 9. [PERSON.] "Person" means an individual, 289.2 corporation, partnership, association, trustee, or other legal 289.3 entity. 289.4 Subd. 10. [TAX PREPARATION BUSINESS.] "Tax preparation 289.5 business" means a corporation, partnership, association, or 289.6 other entity that directly employs or otherwise has a business 289.7 arrangement with two or more tax preparers. 289.8 Subd. 11. [TAX PREPARATION SERVICES.] "Tax preparation 289.9 services" means the services provided by a tax preparer for a 289.10 fee or other consideration, which include, but are not limited 289.11 to, assisting with, preparing or filing individual income tax or 289.12 business returns for a client, assuming final responsibility for 289.13 completed work on an individual income tax or business return on 289.14 which preliminary work has been done by another, offering to 289.15 assist with, prepare or file an individual income tax or 289.16 business return, and offering or providing loans, on behalf of a 289.17 tax preparer or a financial institution, in anticipation of and 289.18 for which payment is intended to be a client's tax refund or 289.19 federal or state tax credit. 289.20 Subd. 12. [TAX PREPARER.] "Tax preparer" means a person 289.21 who provides tax preparation services for a fee or other 289.22 consideration. 289.23 Sec. 2. [270.301] [REQUIREMENTS OF TAX PREPARERS.] 289.24 Subdivision 1. [FEES.] No tax preparer or tax preparation 289.25 business shall: 289.26 (1) charge a fee that has no reasonable relation to the 289.27 services provided; 289.28 (2) charge a fee for a service where the service is not 289.29 actually provided; 289.30 (3) misrepresent the amount charged by or paid to a third 289.31 party for a service; 289.32 (4) charge, offer to accept, or accept a contingent fee for 289.33 tax preparation services; 289.34 (5) charge, offer to accept, or accept a fee for 289.35 electronically filing a client's individual income tax or 289.36 business return that is related to or calculated as a percentage 290.1 of a client's refund or a loan offered or provided to a client, 290.2 on behalf of the tax preparer or a financial institution, in 290.3 anticipation of and for which payment is intended to be a 290.4 client's refund or federal or state tax credit; or 290.5 (6) fail to completely itemize all charges for tax 290.6 preparation services. 290.7 Subd. 2. [STANDARDS OF CONDUCT.] No tax preparer or tax 290.8 preparation business shall: 290.9 (1) fail to promptly, diligently, and without unreasonable 290.10 delay complete a client's tax return; 290.11 (2) obtain the signature of a client to a tax return or 290.12 authorizing document that contains blank spaces to be filled in 290.13 after it has been signed; 290.14 (3) fail to sign a client's tax return when payment for 290.15 services rendered has been made; 290.16 (4) fail or refuse to give a client a copy of any document 290.17 requiring the client's signature within a reasonable time after 290.18 the client signs the document; 290.19 (5) fail to retain for at least four years a copy of 290.20 individual income tax returns and for at least seven years a 290.21 copy of business returns; 290.22 (6) fail to maintain a confidential relationship between 290.23 themselves and their clients or former clients; 290.24 (7) fail to safeguard a client's nonpublic personal 290.25 information; 290.26 (8) make, authorize, or cause to make, either directly or 290.27 indirectly, any false, deceptive, or misleading statement or 290.28 representation, whether oral, written, or recorded by any means, 290.29 in connection with the offering or provision of tax preparation 290.30 services; 290.31 (9) make, publish, disseminate, circulate, place before the 290.32 public, or cause to be made, directly or indirectly, any 290.33 advertisement or marketing materials of any type, or any 290.34 statement or representation relating to the offering or 290.35 provision of tax preparation services that is false, deceptive, 290.36 or misleading; 291.1 (10) include in a contract any provision that requires, or 291.2 requires in any other way, a client to assert any claim or 291.3 defense in a forum that is less convenient, more costly, or more 291.4 dilatory for the resolution of the dispute than a judicial forum 291.5 established in this state where the client may otherwise 291.6 properly bring a claim or defense, or limits in any way any 291.7 claim or defense the client may have; 291.8 (11) require a taxpayer to enter into a loan arrangement in 291.9 order to complete a tax return; 291.10 (12) claim credits or deductions on a client's tax return 291.11 for which the tax preparer knows or should know the taxpayer 291.12 does not qualify. 291.13 Subd. 3. [DISCLOSURES.] (a) Prior to entering into any 291.14 oral or written agreement to provide tax preparation services, a 291.15 tax preparer or tax preparation business offering to make or 291.16 making loans, on behalf of the tax preparer or a financial 291.17 institution, in anticipation of and for which payment is 291.18 intended to be a client's tax refund or federal or state tax 291.19 credit shall provide in writing, on a single sheet of paper, 291.20 separate from any other written document or oral statement, and 291.21 shall orally read to a prospective client the following 291.22 statement: "You may be eligible for FREE tax preparation 291.23 services. For information about free tax preparation services, 291.24 contact the Minnesota Department of Revenue at (insert the 291.25 current telephone number.)" It is the obligation of the tax 291.26 preparer to ensure that the telephone number provided for the 291.27 department is current. 291.28 (b) Prior to entering into any oral or written agreement to 291.29 provide a loan, on behalf of the tax preparer or a financial 291.30 institution, in anticipation of and for which payment is 291.31 intended to be a client's tax refund or federal or state tax 291.32 credit, a tax preparer or tax preparation business shall orally 291.33 read to and provide in writing, on a single sheet of paper, 291.34 separate from any other written document or oral statement, to a 291.35 prospective client, a notice containing: 291.36 (1) a legend, centered at the top of the single sheet of 292.1 paper, in bold, capital letters, and in 28-point type stating 292.2 "WARNING"; and 292.3 (2) the following verbatim statements in capital and small 292.4 type, in a minimum of 14-point type, with at least a double 292.5 space between each line in the statement and four spaces between 292.6 each statement: 292.7 (i) This is a loan. The annual percentage rate (APR) is 292.8 (fill in APR). 292.9 (ii) Your refund will be reduced by (fill in appropriate 292.10 number) percent or $(fill in appropriate number of dollars) due 292.11 to fees, interest, and other charges. 292.12 (iii) You can get your refund in about two weeks if you 292.13 file your return electronically and have the IRS send your 292.14 refund to your own bank account. You do not need to pay for a 292.15 loan to get your money quickly. 292.16 (iv) If you choose to take this loan and your refund is 292.17 delayed, you may have to pay additional interest. 292.18 (c) The notice must be signed and dated by the tax preparer 292.19 and the client or clients if a joint return. 292.20 Sec. 3. [270.302] [ENFORCEMENT.] 292.21 Subdivision 1. [CIVIL PENALTIES.] When a tax preparer or 292.22 tax preparation business has violated any of the provisions of 292.23 section 270.301, the commissioner may impose an administrative 292.24 penalty of not more than $10,000 for each violation. Imposition 292.25 of the penalty is subject to the contested case procedure under 292.26 chapter 14. Demonstration by the commissioner of a pattern and 292.27 practice of violation shall establish a rebuttable presumption 292.28 that the violation for which the commissioner is bringing an 292.29 action was not due to unintentional error. The penalty is 292.30 collected in the same manner as income tax. 292.31 Subd. 2. [CIVIL ACTIONS.] (a) Any violation of sections 292.32 270.30 to 270.303 constitutes an unfair, deceptive, and unlawful 292.33 trade practice within the meaning of section 8.31. 292.34 (b) A client may bring a civil action seeking redress for a 292.35 violation of sections 270.30 to 270.303 in the district court of 292.36 the county wherein the unlawful action or practice is alleged to 293.1 have been committed or where the respondent resides or has a 293.2 principal place of business. 293.3 (c) A court finding for the plaintiff shall award actual 293.4 damages, including incidental and consequential damages, 293.5 reasonable attorney fees, court costs, and any other equitable 293.6 relief as the court considers appropriate. 293.7 Subd. 3. [ASSIGNEE LIABILITY.] Any person who purchases or 293.8 is otherwise assigned rights granted under a contract entered 293.9 into in connection with tax preparation services is subject to 293.10 all affirmative claims and any defenses with respect to the loan 293.11 that the borrower could assert against the seller or assignor. 293.12 Subd. 4. [ACTION BY OTHER OVERSIGHT BODIES.] Nothing in 293.13 sections 270.30 to 270.303 should be construed to constrain 293.14 disciplinary or other action from being taken by the Minnesota 293.15 state board of accountancy, the Minnesota lawyers professional 293.16 responsibility board, or any other entity that has oversight 293.17 responsibility over persons providing tax preparation services. 293.18 Sec. 4. [270.303] [EXEMPTIONS.] 293.19 Sections 270.30 to 270.302, except for section 270.301, 293.20 subdivision 3, do not apply to: 293.21 (1) an attorney admitted to practice law in this state 293.22 pursuant to section 481.01; 293.23 (2) a certified public accountant holding a certificate 293.24 issued pursuant to section 326A.04 or a person issued a permit 293.25 to practice under section 326A.05; 293.26 (3) a person designated as a registered accounting 293.27 practitioner under Minnesota Rules, part 1105.6600, or a 293.28 registered accounting practitioner firm issued a permit under 293.29 Minnesota Rules, part 1105.7100; 293.30 (4) an enrolled agent who has passed the special enrollment 293.31 examination administered by the Internal Revenue Service; 293.32 (5) any person who, as part of the regular clerical duties 293.33 of employment, prepares income, sales, or payroll tax returns 293.34 for an employer; 293.35 (6) any person who provides, for a fee or valuable 293.36 consideration, tax preparation services for fewer than six 294.1 clients in a calendar year; 294.2 (7) any person who provides tax preparation services for a 294.3 family member; and 294.4 (8) while acting as such, any fiduciary, or the regular 294.5 employees of a fiduciary, acting on behalf of the fiduciary 294.6 estate, the testator, trustor, grantor, or beneficiaries thereof. 294.7 Sec. 5. Minnesota Statutes 2002, section 270.60, 294.8 subdivision 4, is amended to read: 294.9 Subd. 4. [PAYMENTS TO COUNTIES.] (a) The commissioner 294.10 shall pay to a county in which an Indian gaming casino is 294.11 located: 294.12 (1) ten percent of the state share of all taxes generated 294.13 from activities on reservations and collected under a tax 294.14 agreement under this section with the tribal government for the 294.15 reservation located in the county; or 294.16 (2) five percent of excise taxes collected by the state 294.17 that are determined by the department of revenue to have been 294.18 generated from activities on a reservation located in the 294.19 county, the tribal government of which has not entered into a 294.20 tax agreement under this section. 294.21 If the tribe has casinos located in more than one county, 294.22 the payment must be divided equally among the counties in which 294.23 the casinos are located. 294.24 (b) The commissioner shall make the payments required under 294.25 this subdivision by February 28 of the year following the year 294.26 the taxes are collected. 294.27 (c) An amount sufficient to make the payments authorized by 294.28 this subdivision is annually appropriated from the general fund 294.29 to the commissioner. 294.30 [EFFECTIVE DATE.] This section is effective for taxes 294.31 collected after June 30, 2003. 294.32 Sec. 6. Minnesota Statutes 2002, section 287.12, is 294.33 amended to read: 294.34 287.12 [TAXES, HOW APPORTIONED.] 294.35 (a) All taxes paid to the county treasurer under the 294.36 provisions of sections 287.01 to 287.12 must be apportioned, 97 295.1 percent to the general fund of the state, and three percent to 295.2 the county revenue fund. 295.3 (b) On or before the 20th day of each month the county 295.4 treasurer shall determine and pay to the commissioner of revenue 295.5 for deposit in the state treasury and credit to the general fund 295.6 the state's portion of the receipts from the mortgage registry 295.7 tax during the preceding month subject to the electronic payment 295.8 requirements of section 270.771. The county treasurer shall 295.9 provide any related reports requested by the commissioner of 295.10 revenue. 295.11 (c) Counties must remit 81 percent of the state's portion 295.12 of the June receipts collected through June 25 and the estimated 295.13 state's portion of the receipts to be collected during the 295.14 remainder of the month to the commissioner of revenue two 295.15 business days before June 30 of each year. The remaining amount 295.16 of the June receipts is due on August 20. 295.17 [EFFECTIVE DATE.] This section is effective January 1, 2004. 295.18 Sec. 7. Minnesota Statutes 2002, section 287.29, 295.19 subdivision 1, is amended to read: 295.20 Subdivision 1. [APPOINTMENT AND PAYMENT OF TAX PROCEEDS.] 295.21 (a) The proceeds of the taxes levied and collected under 295.22 sections 287.21 to 287.39 must be apportioned, 97 percent to the 295.23 general fund of the state, and three percent to the county 295.24 revenue fund. 295.25 (b) On or before the 20th day of each month, the county 295.26 treasurer shall determine and pay to the commissioner of revenue 295.27 for deposit in the state treasury and credit to the general fund 295.28 the state's portion of the receipts for deed tax from the 295.29 preceding month subject to the electronic transfer requirements 295.30 of section 270.771. The county treasurer shall provide any 295.31 related reports requested by the commissioner of revenue. 295.32 (c) Counties must remit 81 percent of the state's portion 295.33 of the June receipts collected through June 25 and the estimated 295.34 state's portion of the receipts to be collected during the 295.35 remainder of the month to the commissioner of revenue two 295.36 business days before June 30 of each year. The remaining amount 296.1 of the June receipts is due on August 20. 296.2 [EFFECTIVE DATE.] This section is effective January 1, 2004. 296.3 Sec. 8. Minnesota Statutes 2002, section 287.31, is 296.4 amended by adding a subdivision to read: 296.5 Subd. 3. [UNDERPAYMENTS OF ACCELERATED PAYMENT OF JUNE TAX 296.6 RECEIPTS.] If a county fails to timely remit the specified 296.7 percentage of the state portion of the actual June tax receipts 296.8 at the time required by section 287.12 or 287.29, the county 296.9 shall pay a penalty equal to ten percent of the state portion of 296.10 actual June receipts less the amount remitted to the 296.11 commissioner of revenue in June. The penalty must not be 296.12 imposed, however, if the amount remitted in June equals either: 296.13 (1) 75 percent of the state's portion of the preceding 296.14 May's receipts; or 296.15 (2) 75 percent of the average monthly amount of the state's 296.16 portion for the previous calendar year. 296.17 [EFFECTIVE DATE.] This section is effective January 1, 2004. 296.18 Sec. 9. Minnesota Statutes 2002, section 297F.08, is 296.19 amended by adding a subdivision to read: 296.20 Subd. 12. [CIGARETTES IN INTERSTATE COMMERCE.] (a) A 296.21 person may not transport or cause to be transported from this 296.22 state cigarettes for sale in another state without first 296.23 affixing to the cigarettes the stamp required by the state in 296.24 which the cigarettes are to be sold or paying any other excise 296.25 tax on the cigarettes imposed by the state in which the 296.26 cigarettes are to be sold. 296.27 (b) A person may not affix to cigarettes the stamp required 296.28 by another state or pay any other excise tax on the cigarettes 296.29 imposed by another state if the other state prohibits stamps 296.30 from being affixed to the cigarettes, prohibits the payment of 296.31 any other excise tax on the cigarettes, or prohibits the sale of 296.32 the cigarettes. 296.33 (c) Not later than 15 days after the end of each calendar 296.34 quarter, a person who transports or causes to be transported 296.35 from this state cigarettes for sale in another state shall 296.36 submit to the commissioner a report identifying the quantity and 297.1 style of each brand of the cigarettes transported or caused to 297.2 be transported in the preceding calendar quarter, and the name 297.3 and address of each recipient of the cigarettes. 297.4 (d) For purposes of this section, "person" has the meaning 297.5 given in section 297F.01, subdivision 12. Person does not 297.6 include any common or contract carrier, or public warehouse that 297.7 is not owned, in whole or in part, directly or indirectly by 297.8 such person. 297.9 [EFFECTIVE DATE.] This section is effective the day 297.10 following final enactment. 297.11 Sec. 10. Minnesota Statutes 2002, section 297G.01, is 297.12 amended by adding a subdivision to read: 297.13 Subd. 21. [LOW-ALCOHOL DAIRY COCKTAIL.] "Low-alcohol dairy 297.14 cocktail" means a premixed cocktail, or any other product except 297.15 liqueur-filled candy, that: 297.16 (1) consists primarily of milk products; 297.17 (2) contains distilled spirits; 297.18 (3) is drinkable as a beverage or is promoted as an 297.19 alcoholic product; and 297.20 (4) contains less than 3.2 percent alcohol by volume. 297.21 [EFFECTIVE DATE.] This section is effective for sales made 297.22 after June 30, 2003. 297.23 Sec. 11. Minnesota Statutes 2002, section 297G.03, 297.24 subdivision 1, is amended to read: 297.25 Subdivision 1. [GENERAL RATE; DISTILLED SPIRITS AND WINE.] 297.26 The following excise tax is imposed on all distilled spirits and 297.27 wine manufactured, imported, sold, or possessed in this state: 297.28 Standard Metric 297.29 (a) Distilled spirits, $5.03 per gallon $1.33 per liter 297.30 liqueurs, cordials, 297.31 and specialties regardless 297.32 of alcohol content 297.33 (excluding ethyl alcohol) 297.34 (b) Wine containing $ .30 per gallon $ .08 per liter 297.35 14 percent or less 297.36 alcohol by volume 298.1 (except cider as defined 298.2 in section 297G.01, 298.3 subdivision 3a) 298.4 (c) Wine containing $ .95 per gallon $ .25 per liter 298.5 more than 14 percent 298.6 but not more than 21 298.7 percent alcohol by volume 298.8 (d) Wine containing more $1.82 per gallon $ .48 per liter 298.9 than 21 percent but not 298.10 more than 24 percent 298.11 alcohol by volume 298.12 (e) Wine containing more $3.52 per gallon $ .93 per liter 298.13 than 24 percent alcohol 298.14 by volume 298.15 (f) Natural and $1.82 per gallon $ .48 per liter 298.16 artificial sparkling wines 298.17 containing alcohol 298.18 (g) Cider as defined in $ .15 per gallon $ .04 per liter 298.19 section 297G.01, 298.20 subdivision 3a 298.21 (h) Low alcohol dairy $ .08 per gallon $ .02 per liter 298.22 cocktails 298.23 In computing the tax on a package of distilled spirits or 298.24 wine, a proportional tax at a like rate on all fractional parts 298.25 of a gallon or liter must be paid, except that the tax on a 298.26 fractional part of a gallon less than 1/16 of a gallon is the 298.27 same as for 1/16 of a gallon. 298.28 [EFFECTIVE DATE.] This section is effective for sales made 298.29 after June 30, 2003. 298.30 Sec. 12. Minnesota Statutes 2002, section 473F.08, is 298.31 amended by adding a subdivision to read: 298.32 Subd. 3c. [CHARITY CARE REIMBURSEMENT.] (a) As used in 298.33 this subdivision, the following terms have the meanings given in 298.34 this paragraph. 298.35 (1) "Charity care" means the amount that would have been 298.36 charged by a facility for rendering free or discounted care to 299.1 persons who cannot afford to pay and for which the facility did 299.2 not expect payment. Charity care does not include any amount 299.3 for which a hospital received a payment from a county under 299.4 section 256.969, subdivision 9c. 299.5 (2) A "qualifying hospital" means a hospital in the area 299.6 that is owned or operated by a local unit of government, or 299.7 formerly owned by a university, has a licensed bed capacity 299.8 greater than 400, and provides uncompensated care valued at more 299.9 than 1.8 percent of its gross charges as stated in the 299.10 Healthcare cost information system database, maintained by the 299.11 Minnesota hospital association for the Minnesota department of 299.12 health. 299.13 (b) A county that contains a qualifying hospital that 299.14 provides charity care to residents of the area is eligible for 299.15 reimbursement of the charity care amount that is above the 299.16 statewide average for hospitals for charity care, adjusted to 299.17 cost. By July 15, 2004, and each subsequent year, the county 299.18 shall notify its county auditor, as well as the administrative 299.19 auditor, of the amount of qualifying charity care provided, 299.20 adjusted to cost using the hospital's cost-to-charge ratio, 299.21 during the 12-month period ending on June 30 of the current year. 299.22 (c) The areawide levy of each governmental unit calculated 299.23 in subdivision 3, paragraph (a), must be reduced in an amount 299.24 equal to the reimbursement multiplied by the proportion of the 299.25 areawide levy of each governmental unit to the total areawide 299.26 levy of all governmental units. 299.27 (d) The administrative auditor shall pay one-half of the 299.28 reimbursement to the county auditor of the county that contains 299.29 the qualifying hospital on or before June 15 and the remaining 299.30 one-half of the reimbursement on or before November 15. The 299.31 county auditor receiving the payment shall disburse the 299.32 reimbursement to the qualifying hospital within 15 days of 299.33 receipt of the reimbursement. 299.34 (e) Prior to the reporting specified in paragraph (b) 299.35 above, all qualifying hospitals that participate in this program 299.36 shall agree upon and implement a common standard for reporting 300.1 charity care, and a common standard for determining eligibility 300.2 for charity care for all participating hospitals. 300.3 [EFFECTIVE DATE.] This section is effective for fiscal 300.4 disparities contribution and distribution tax capacities for 300.5 taxes payable in 2005 and subsequent years. 300.6 Sec. 13. [REPEALER.] 300.7 Laws 1984, chapter 652, section 2, is repealed. 300.8 [EFFECTIVE DATE.] This section is effective for Benton 300.9 county the day after the governing body of Benton county and its 300.10 chief clerical officer timely complete their compliance with 300.11 Minnesota Statutes, section 645.021, subdivisions 2 and 3. 300.12 This section is effective for Stearns county the day after 300.13 the governing body of Stearns county and its chief clerical 300.14 officer timely complete their compliance with Minnesota 300.15 Statutes, section 645.021, subdivisions 2 and 3.