1.1                          A bill for an act 
  1.2             relating to the financing and operation of state and 
  1.3             local government; providing for property tax reform; 
  1.4             providing for education financing; limiting education 
  1.5             revenue referenda for 1997; changing property tax 
  1.6             refunds for homeowners and renters; changing 
  1.7             truth-in-taxation requirements; providing for joint 
  1.8             truth-in-taxation hearings; imposing levy limits on 
  1.9             cities and counties and providing for reverse 
  1.10            referenda; changing fiscal note requirements for state 
  1.11            mandates; providing for reimbursement for costs of 
  1.12            state mandates; providing for certain property tax 
  1.13            exemptions; establishing a property tax reform 
  1.14            account; providing a refundable credit for 1997 
  1.15            property taxes; making miscellaneous property tax 
  1.16            changes; providing a senior citizens property tax 
  1.17            deferral program; changing aids to local governments; 
  1.18            changing tax increment financing provisions; 
  1.19            authorizing certain tax increment districts; exempting 
  1.20            certain tax increment districts from certain 
  1.21            requirements; authorizing local taxes, levies, and 
  1.22            abatements; conforming certain income tax laws with 
  1.23            changes in federal law; providing income tax credits; 
  1.24            modifying the application of sales and excise taxes; 
  1.25            exempting certain purchases from the sales tax; 
  1.26            modifying waste management tax and taconite tax 
  1.27            provisions; increasing the budget reserve; revising 
  1.28            the law governing regional development commissions; 
  1.29            making miscellaneous technical changes and 
  1.30            corrections; requiring studies; appropriating money; 
  1.31            amending Minnesota Statutes 1996, sections 6.76; 
  1.32            16A.152, subdivision 2; 69.021, subdivision 7; 93.41; 
  1.33            103D.905, subdivisions 4, 5, and by adding a 
  1.34            subdivision; 115A.554; 116.07, subdivision 10; 
  1.35            117.155; 121.15, by adding a subdivision; 122.247, 
  1.36            subdivision 3; 122.45, subdivision 3a; 122.531, 
  1.37            subdivisions 4a and 9; 122.533; 122.535, subdivision 
  1.38            6; 124.2131, subdivision 1; 124.239, subdivision 5, 
  1.39            and by adding subdivisions; 124.2601, subdivisions 2 
  1.40            and 3; 124.2711, subdivisions 1 and 5; 124.2713, 
  1.41            subdivision 1; 124.2714; 124.2715, subdivision 1; 
  1.42            124.2716, subdivision 2; 124.2725, subdivisions 2, 6, 
  1.43            13, and 14; 124.2726, subdivisions 1 and 3; 124.2727, 
  1.44            subdivision 6a; 124.312, subdivision 5; 124.313; 
  1.45            124.4945; 124.83, subdivision 3; 124.91, subdivisions 
  1.46            1, 2, 5, and 7; 124.912, subdivisions 1, 3, 6, and 7; 
  2.1             124.914, subdivisions 1, 2, 3, and 4; 124.916, 
  2.2             subdivisions 1, 3, and 4; 124.918, subdivision 8; 
  2.3             124.95, subdivision 1; 124A.03, subdivision 1g; 
  2.4             124A.23, subdivision 1; 124A.292, subdivision 2; 
  2.5             161.45, by adding a subdivision; 216B.16, by adding 
  2.6             subdivisions; 270B.02, by adding a subdivision; 
  2.7             270B.12, by adding a subdivision; 271.01, subdivision 
  2.8             5; 271.19; 272.02, subdivision 1, and by adding a 
  2.9             subdivision; 272.115; 273.11, subdivisions 1a and 16; 
  2.10            273.111, subdivisions 3 and 6; 273.112, by adding a 
  2.11            subdivision; 273.121; 273.124, subdivisions 1, 14, and 
  2.12            by adding a subdivision; 273.13, subdivisions 1, 22, 
  2.13            23, 24, 25, 31, and by adding subdivisions; 273.135, 
  2.14            subdivision 2; 273.1391, subdivision 2; 273.1398, 
  2.15            subdivisions 1, 1a, 6, 8, and by adding subdivisions; 
  2.16            273.18; 274.01; 274.13, by adding subdivisions; 
  2.17            275.065, subdivisions 1, 3, 5a, 6, 8, and by adding 
  2.18            subdivisions; 275.07, subdivisions 1 and 4; 275.08, 
  2.19            subdivision 1b; 276.04, subdivision 2; 276A.04; 
  2.20            276A.05, subdivisions 1 and 5; 276A.06, subdivisions 
  2.21            2, 3, 5, and 9; 278.07; 281.13; 281.23, subdivision 6; 
  2.22            281.273; 281.276; 282.01, subdivision 8; 282.04, 
  2.23            subdivision 1; 287.22; 289A.02, subdivision 7; 
  2.24            289A.26, subdivisions 2, 3, 6, and 7; 289A.56, 
  2.25            subdivision 4; 290.01, subdivisions 19, 19a, 19b, 19c, 
  2.26            19d, 19g, and 31; 290.014, subdivisions 2 and 3; 
  2.27            290.015, subdivision 5; 290.06, subdivision 22, and by 
  2.28            adding subdivisions; 290.067, subdivision 1; 290.068, 
  2.29            subdivision 1; 290.0922, subdivision 1; 290.17, 
  2.30            subdivision 1; 290.371, subdivision 2; 290.92, by 
  2.31            adding a subdivision; 290.9725; 290.9727, subdivision 
  2.32            1; 290.9728, subdivision 1; 290A.03, subdivisions 6, 
  2.33            7, 11, and 13; 290A.04, subdivisions 1, 2, and 6; 
  2.34            290A.19; 291.005, subdivision 1; 296.141, subdivision 
  2.35            4; 296.18, subdivision 1; 297A.01, subdivisions 3, 4, 
  2.36            7, 11, 15, and 16; 297A.02, subdivision 2; 297A.14, 
  2.37            subdivision 4; 297A.211, subdivision 1; 297A.25, 
  2.38            subdivisions 2, 3, 7, 11, 56, 59, and by adding 
  2.39            subdivisions; 297A.45; 297B.01, subdivisions 7 and 8; 
  2.40            297E.02, subdivisions 3 and 6; 297E.04, subdivision 3; 
  2.41            298.24, subdivision 1; 298.28, subdivisions 2, 3, 4, 
  2.42            5, 9a, and by adding subdivisions; 298.2961, 
  2.43            subdivision 1; 298.75, subdivisions 1, 4, and by 
  2.44            adding a subdivision; 325D.33, subdivision 3; 349.12, 
  2.45            subdivision 26a; 349.154, subdivision 2; 349.163, 
  2.46            subdivision 8; 349.19, subdivision 2a; 349.191, 
  2.47            subdivision 1b; 373.40, subdivision 7; 398A.04, 
  2.48            subdivision 1; 462.381; 462.383; 462.384, subdivision 
  2.49            5; 462.385; 462.386, subdivision 1; 462.387; 462.388; 
  2.50            462.389, subdivisions 1, 3, and 4; 462.39, 
  2.51            subdivisions 2 and 3; 462.391, subdivision 5, and by 
  2.52            adding subdivisions; 462.393; 462.394; 462.396; 
  2.53            462.398; 469.012, subdivision 1; 469.033, subdivision 
  2.54            6; 469.040, subdivision 3, and by adding a 
  2.55            subdivision; 469.174, subdivisions 10, 19, and by 
  2.56            adding subdivisions; 469.175, subdivision 3, and by 
  2.57            adding subdivisions; 469.176, subdivisions 1b, 2, 4c, 
  2.58            4g, 4j, and 6; 469.177, subdivisions 1, 3, and 4; 
  2.59            473F.06; 473F.07, subdivisions 1 and 5; 473F.08, 
  2.60            subdivisions 2, 3, 5, and 8a; 477A.011, subdivisions 
  2.61            20, 34, 35, 36, 37, and by adding subdivisions; 
  2.62            477A.013, subdivisions 1 and 9; 477A.03, subdivision 
  2.63            2; and 477A.05; Laws 1992, chapter 511, article 2, 
  2.64            section 52; Laws 1993, chapter 375, article 9, section 
  2.65            45, subdivisions 2, 3, 4, and by adding a subdivision; 
  2.66            Laws 1995, chapter 264, article 5, sections 44, 
  2.67            subdivision 4, as amended; and 45, subdivision 1, as 
  2.68            amended; Laws 1997, chapter 34, section 2; proposing 
  2.69            coding for new law in Minnesota Statutes, chapters 3; 
  2.70            14; 16A; 124; 124A; 270; 273; 275; 290; 297A; 383A; 
  2.71            383B; 458D; 462A; 469; 477A; proposing coding for new 
  3.1             law as Minnesota Statutes, chapter 290B; repealing 
  3.2             Minnesota Statutes 1996, sections 3.982; 124.2131, 
  3.3             subdivision 3a; 124.2134; 124.225, subdivisions 1, 3a, 
  3.4             7a, 7b, 7d, 7e, 7f, 8a, 8k, 8l, 8m, 9, 10, 13, 14, 15, 
  3.5             16, and 17; 124.226; 124.2442; 124.2601, subdivisions 
  3.6             4, 5, and 6; 124.2711, subdivisions 2a and 3; 
  3.7             124.2713, subdivisions 6, 6a, 6b, and 7; 124.2715, 
  3.8             subdivisions 2 and 3; 124.2716, subdivisions 3 and 4; 
  3.9             124.2725, subdivisions 3, 4, 5, and 7; 124.2727, 
  3.10            subdivisions 6b, 6c, and 9; 124.314, subdivision 2; 
  3.11            124.321; 124.91, subdivisions 2, 4, and 7; 124.912, 
  3.12            subdivision 2; 124A.029; 124A.03, subdivisions 2a and 
  3.13            3b; 124A.0311; 124A.22, subdivisions 4a, 4b, 8a, 8b, 
  3.14            13d, and 13e; 124A.23, subdivisions 1, 2, 3, and 4; 
  3.15            124A.26, subdivisions 2 and 3; 124A.292, subdivisions 
  3.16            3 and 4; 270B.12, subdivision 11; 273.13, subdivisions 
  3.17            21a and 32; 273.1315; 273.1317; 273.1318; 273.1398, 
  3.18            subdivisions 2, 2c, 2d, 3, and 3a; 273.1399; 273.166; 
  3.19            275.08, subdivisions 1c and 1d; 275.61; 276.012; 
  3.20            276A.06, subdivision 9; 290A.03, subdivisions 12a and 
  3.21            14; 290A.055; 290A.26; 297A.01, subdivisions 20 and 
  3.22            21; 297A.02, subdivision 5; 297A.25, subdivision 29; 
  3.23            462.384, subdivision 7; 462.385, subdivision 2; 
  3.24            462.389, subdivision 5; 462.391, subdivisions 1, 2, 3, 
  3.25            4, 6, 7, 8, and 9; 462.392; 469.176, subdivisions 1a 
  3.26            and 5; 469.1782, subdivision 1; 469.181; 473F.08, 
  3.27            subdivision 8a; and 645.34; Laws 1995, chapter 264, 
  3.28            article 4, as amended. 
  3.29  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  3.30                             ARTICLE 1 
  3.31                        PROPERTY TAX REFORM 
  3.32     Section 1.  Minnesota Statutes 1996, section 273.124, is 
  3.33  amended by adding a subdivision to read: 
  3.34     Subd. 19.  [LEASE-PURCHASE PROGRAM.] Qualifying buildings 
  3.35  and appurtenances, together with the land on which they are 
  3.36  located, are classified as homesteads, if the following 
  3.37  qualifications are met: 
  3.38     (1) the property is leased for up to a five-year period by 
  3.39  the occupant under a lease-purchase program administered by the 
  3.40  Minnesota housing finance agency or a housing and redevelopment 
  3.41  authority under sections 469.001 to 469.047; 
  3.42     (2) the occupant's income is no greater than 80 percent of 
  3.43  the county or area median income, adjusted for family size; 
  3.44     (3) the building consists of one or two dwelling units; 
  3.45     (4) the lease agreement provides that part of the lease 
  3.46  payment is escrowed as a nonrefundable down payment on the 
  3.47  housing; 
  3.48     (5) the administering agency verifies the occupant's income 
  3.49  eligibility and certifies to the county assessor that the 
  4.1   occupant meets the income standards; and 
  4.2      (6) the property owner applies to the county assessor by 
  4.3   May 30 of each year. 
  4.4      For purposes of this subdivision, "qualifying buildings and 
  4.5   appurtenances" means a one- or two-unit residential building 
  4.6   which was unoccupied, abandoned, and boarded for at least six 
  4.7   months.  
  4.8      Sec. 2.  [273.126] [QUALIFYING LOW-INCOME RENTAL HOUSING.] 
  4.9      Subdivision 1.  [QUALIFYING RULES.] The market value of a 
  4.10  rental housing unit qualifies for assessment under class 4d if: 
  4.11     (1) it is occupied by individuals meeting the income limits 
  4.12  under subdivision 2; 
  4.13     (2) a rent restriction agreement under subdivision 3 
  4.14  applies; 
  4.15     (3) the unit meets the minimum housing quality standards 
  4.16  under subdivision 4; and 
  4.17     (4) the Minnesota housing finance agency certifies to the 
  4.18  local assessor that the unit qualifies. 
  4.19     Subd. 2.  [INCOME LIMITS.] (a) In order to qualify under 
  4.20  class 4d, a unit must be occupied by an individual or 
  4.21  individuals whose income is at or below 60 percent of the median 
  4.22  area gross income.  If the resident's income met the requirement 
  4.23  when the resident first occupied the unit, the income of the 
  4.24  resident continues to qualify.  If an individual first occupied 
  4.25  a unit before January 1, 1998, the individual's income for 
  4.26  purposes of the preceding sentence is the income for calendar 
  4.27  year 1996. 
  4.28     (b) For purposes of this section, "median area gross income"
  4.29  means the greater of (1) the median gross income for the area 
  4.30  determined under section 42 of the Internal Revenue Code of 
  4.31  1986, as amended through December 31, 1996, or (2) the median 
  4.32  gross income for the state. 
  4.33     (c) The median gross income must be adjusted for family 
  4.34  size. 
  4.35     (d) Vacant units qualify as meeting the requirements of 
  4.36  this subdivision in the same proportion that total units in the 
  5.1   building are subject to rent restriction agreements under 
  5.2   subdivision 3 and meet minimum housing standards under 
  5.3   subdivision 4.  This paragraph applies only to the extent that 
  5.4   units subject to a rent restriction agreement and meeting the 
  5.5   minimum housing quality standards are vacant. 
  5.6      (e) The owner or manager of the property may comply with 
  5.7   this subdivision by obtaining written statements from the 
  5.8   residents that their incomes are at or below the limit.  
  5.9      Subd. 3.  [RENT RESTRICTIONS.] (a) In order to qualify 
  5.10  under class 4d, a unit must be subject to a rent restriction 
  5.11  agreement with the housing finance agency for a period of at 
  5.12  least five years.  The agreement must be in effect and apply to 
  5.13  the rents to be charged for the year in which the property taxes 
  5.14  are payable.  The agreement must provide that the restrictions 
  5.15  apply to each year of the period, regardless of whether the unit 
  5.16  is occupied by an individual with qualifying income or whether 
  5.17  class 4d applies.  The rent restriction agreement must provide 
  5.18  for rents for the unit to be no higher than 30 percent of 60 
  5.19  percent of the median gross income.  The definition of median 
  5.20  gross income specified in this section applies.  "Rent" means 
  5.21  "gross rent" as defined in section 42(g)(2)(B) of the Internal 
  5.22  Revenue Code of 1986, as amended through December 31, 1996.  
  5.23     (b) Notwithstanding maximum rent levels permitted, an owner 
  5.24  or manager must make available to families with section 8 
  5.25  certificates on property located in the metropolitan area as 
  5.26  defined in section 473.121, subdivision 2, the greater of (i) 
  5.27  one unit, or (ii) ten percent of all units qualifying under 
  5.28  class 4d; or in the case of property located in the remaining 80 
  5.29  nonmetropolitan counties, the greater of (i) one unit, or (ii) 
  5.30  five percent of all units qualifying under class 4d. 
  5.31     (c) The rent restriction agreement runs with the land and 
  5.32  binds any successor to title to the property, without regard to 
  5.33  whether the successor had actual notice or knowledge of the 
  5.34  agreement.  The owner must promptly record the agreement in the 
  5.35  office of the county recorder or must file it in the office of 
  5.36  the registrar of titles, in the county where the property is 
  6.1   located.  If the agreement is not recorded, class 4d does not 
  6.2   apply to the property. 
  6.3      Subd. 4.  [MINIMUM HOUSING STANDARDS.] In order to qualify 
  6.4   under class 4d, a unit must be certified by the housing finance 
  6.5   agency to meet the minimum housing standards established under 
  6.6   section 462A.071. 
  6.7      Subd. 5.  [MONITORING RENT LEVELS.] The housing finance 
  6.8   agency is directed to monitor changes in rent levels and the use 
  6.9   of section 8 certificates in units qualifying under class 4d. 
  6.10     Subd. 6.  [ADDITIONAL TAXES.] (a) Notwithstanding the 
  6.11  provisions of section 273.01, 274.01, or any other law, if the 
  6.12  Minnesota housing finance agency notifies the assessor that the 
  6.13  provisions of this section have not been met for any period 
  6.14  during which a unit was classified under class 4d, an additional 
  6.15  tax is imposed.  The additional tax equals, as certified by the 
  6.16  housing finance agency, either (1) a dollar amount, or (2) the 
  6.17  increased tax which would have been imposed if the property had 
  6.18  not been classified under class 4d, and the tax actually 
  6.19  imposed, during the period of noncompliance. 
  6.20     (b) The additional tax must be extended against the 
  6.21  property on the tax list for the current year.  No interest or 
  6.22  penalties may be levied on additional taxes if timely paid.  The 
  6.23  tax imposed by this subdivision is a lien upon the property 
  6.24  assessed to the same extent and for the same duration as other 
  6.25  taxes imposed on the property. 
  6.26     Sec. 3. [273.127] [TRANSITION CLASS RATES.] 
  6.27     Subdivision 1.  [APPLICATION.] (a) The class rates under 
  6.28  this section apply for property taxes payable in 1999 for the 
  6.29  market value of properties: 
  6.30     (1)(i) which were classified as class 4c or class 4d for 
  6.31  taxes payable in 1998; or 
  6.32     (ii) which are constructed or substantially rehabilitated 
  6.33  during calendar year 1997 and would qualify as class 4c or class 
  6.34  4d for taxes payable in 1999; and 
  6.35     (2) which do not qualify as class 4d property as a result 
  6.36  of the eligibility criteria specified in section 273.126.  
  7.1      (b) To qualify for the class rates under this section, the 
  7.2   building's owner must annually certify to the assessor in 
  7.3   writing that the property, building, or unit continues to 
  7.4   qualify under the laws in effect and applicable to its 
  7.5   classification for taxes payable in 1998. 
  7.6      (c) A property no longer qualifies under this section: 
  7.7      (1) if it is transferred or sold; or 
  7.8      (2) if loans, that have a principal amount equal to more 
  7.9   than 25 percent of the property's market value and that are 
  7.10  secured by the property, are refinanced. 
  7.11     Subd. 2.  [CLASS 4C PROPERTIES.] For the market value of 
  7.12  properties that were classified as class 4c for taxes payable in 
  7.13  1998 and which no longer qualify as a result of the eligibility 
  7.14  criteria specified in section 273.126, a class rate of 2.4 
  7.15  percent applies for taxes payable in 1999. 
  7.16     Subd. 3.  [CLASS 4D PROPERTIES.] For the market value of 
  7.17  properties that were classified as class 4d for taxes payable in 
  7.18  1998 and which no longer qualify as a result of the eligibility 
  7.19  criteria specified in section 273.126, a class rate of 2.2 
  7.20  percent applies for taxes payable in 1999. 
  7.21     Sec. 4.  Minnesota Statutes 1996, section 273.13, 
  7.22  subdivision 22, is amended to read: 
  7.23     Subd. 22.  [CLASS 1.] (a) Except as provided in subdivision 
  7.24  23, real estate which is (i) residential and used for homestead 
  7.25  purposes; and (ii) other residential real estate containing one 
  7.26  unit, other than seasonal residential recreational; and (iii) a 
  7.27  dwelling, garage, and surrounding one acre of property on a 
  7.28  nonhomestead farm classified under subdivision 23, paragraph 
  7.29  (b), is class 1 1a.  The market value of class 1a property must 
  7.30  be determined based upon the value of the house, garage, and 
  7.31  land.  
  7.32     For taxes payable in 1998 and thereafter, the first 
  7.33  $72,000 $80,000 of market value of class 1a property has a net 
  7.34  class rate of one percent of its market value and a gross class 
  7.35  rate of 2.17 percent of its market value.  For taxes payable in 
  7.36  1992,; and the market value of class 1a property that 
  8.1   exceeds $72,000 but does not exceed $115,000 $80,000 has a class 
  8.2   rate of two percent of its market value; and the market value of 
  8.3   class 1a property that exceeds $115,000 has a class rate of 2.5 
  8.4   percent of its market value.  For taxes payable in 1993 and 
  8.5   thereafter, the market value of class 1a property that exceeds 
  8.6   $72,000 has a class rate of two percent. 
  8.7      (b) Class 1b property includes homestead real estate or 
  8.8   homestead manufactured homes used for the purposes of a 
  8.9   homestead by 
  8.10     (1) any blind person, or the blind person and the blind 
  8.11  person's spouse; or 
  8.12     (2) any person, hereinafter referred to as "veteran," who: 
  8.13     (i) served in the active military or naval service of the 
  8.14  United States; and 
  8.15     (ii) is entitled to compensation under the laws and 
  8.16  regulations of the United States for permanent and total 
  8.17  service-connected disability due to the loss, or loss of use, by 
  8.18  reason of amputation, ankylosis, progressive muscular 
  8.19  dystrophies, or paralysis, of both lower extremities, such as to 
  8.20  preclude motion without the aid of braces, crutches, canes, or a 
  8.21  wheelchair; and 
  8.22     (iii) has acquired a special housing unit with special 
  8.23  fixtures or movable facilities made necessary by the nature of 
  8.24  the veteran's disability, or the surviving spouse of the 
  8.25  deceased veteran for as long as the surviving spouse retains the 
  8.26  special housing unit as a homestead; or 
  8.27     (3) any person who: 
  8.28     (i) is permanently and totally disabled and 
  8.29     (ii) receives 90 percent or more of total income from 
  8.30     (A) aid from any state as a result of that disability; or 
  8.31     (B) supplemental security income for the disabled; or 
  8.32     (C) workers' compensation based on a finding of total and 
  8.33  permanent disability; or 
  8.34     (D) social security disability, including the amount of a 
  8.35  disability insurance benefit which is converted to an old age 
  8.36  insurance benefit and any subsequent cost of living increases; 
  9.1   or 
  9.2      (E) aid under the federal Railroad Retirement Act of 1937, 
  9.3   United States Code Annotated, title 45, section 228b(a)5; or 
  9.4      (F) a pension from any local government retirement fund 
  9.5   located in the state of Minnesota as a result of that 
  9.6   disability; or 
  9.7      (G) pension, annuity, or other income paid as a result of 
  9.8   that disability from a private pension or disability plan, 
  9.9   including employer, employee, union, and insurance plans and 
  9.10     (iii) has household income as defined in section 290A.03, 
  9.11  subdivision 5, of $50,000 or less; or 
  9.12     (4) any person who is permanently and totally disabled and 
  9.13  whose household income as defined in section 290A.03, 
  9.14  subdivision 5, is 150 percent or less of the federal poverty 
  9.15  level. 
  9.16     Property is classified and assessed under clause (4) only 
  9.17  if the government agency or income-providing source certifies, 
  9.18  upon the request of the homestead occupant, that the homestead 
  9.19  occupant satisfies the disability requirements of this paragraph.
  9.20     Property is classified and assessed pursuant to clause (1) 
  9.21  only if the commissioner of economic security certifies to the 
  9.22  assessor that the homestead occupant satisfies the requirements 
  9.23  of this paragraph.  
  9.24     Permanently and totally disabled for the purpose of this 
  9.25  subdivision means a condition which is permanent in nature and 
  9.26  totally incapacitates the person from working at an occupation 
  9.27  which brings the person an income.  The first $32,000 market 
  9.28  value of class 1b property has a net class rate of .45 percent 
  9.29  of its market value and a gross class rate of .87 percent of its 
  9.30  market value.  The remaining market value of class 1b property 
  9.31  has a gross or net class rate using the rates for class 1 or 
  9.32  class 2a property, whichever is appropriate, of similar market 
  9.33  value.  
  9.34     (c) Class 1c property is commercial use real property that 
  9.35  abuts a lakeshore line and is devoted to temporary and seasonal 
  9.36  residential occupancy for recreational purposes but not devoted 
 10.1   to commercial purposes for more than 250 days in the year 
 10.2   preceding the year of assessment, and that includes a portion 
 10.3   used as a homestead by the owner, which includes a dwelling 
 10.4   occupied as a homestead by a shareholder of a corporation that 
 10.5   owns the resort or a partner in a partnership that owns the 
 10.6   resort, even if the title to the homestead is held by the 
 10.7   corporation or partnership.  For purposes of this clause, 
 10.8   property is devoted to a commercial purpose on a specific day if 
 10.9   any portion of the property, excluding the portion used 
 10.10  exclusively as a homestead, is used for residential occupancy 
 10.11  and a fee is charged for residential occupancy.  Class 1c 
 10.12  property has a class rate of one percent of total market value 
 10.13  for taxes payable in 1993 and thereafter with the following 
 10.14  limitation:  the area of the property must not exceed 100 feet 
 10.15  of lakeshore footage for each cabin or campsite located on the 
 10.16  property up to a total of 800 feet and 500 feet in depth, 
 10.17  measured away from the lakeshore.  
 10.18     Sec. 5.  Minnesota Statutes 1996, section 273.13, 
 10.19  subdivision 24, is amended to read: 
 10.20     Subd. 24.  [CLASS 3.] (a) Commercial and industrial 
 10.21  property and utility real and personal property, except class 5 
 10.22  property as identified in subdivision 31, clause (1), is class 
 10.23  3a.  It Each parcel has a class rate of three 2.8 percent of the 
 10.24  first $100,000 tier of market value for taxes payable in 1993 
 10.25  1998 and thereafter, and 5.06.  Commercial and industrial 
 10.26  property has a class rate of 4.3 percent of the remaining market 
 10.27  value over $100,000, except that in the case of contiguous 
 10.28  parcels of commercial and industrial property owned by the same 
 10.29  person or entity, only the value equal to the first-tier value 
 10.30  of the contiguous parcels qualifies for the reduced class rate.  
 10.31  Utility real and personal property has a class rate of 4.5 
 10.32  percent of the remaining market value.  For the purposes of this 
 10.33  subdivision, the first tier means the first $150,000 of market 
 10.34  value.  In the case of state-assessed commercial, industrial, 
 10.35  and utility property owned by one person or entity, only one 
 10.36  parcel has a reduced class rate on the first $100,000 of market 
 11.1   value.  In the case of other commercial, industrial, and utility 
 11.2   property owned by one person or entity, only one parcel in each 
 11.3   county has a reduced class rate on the first $100,000 tier of 
 11.4   market value, except that:. 
 11.5      (1) if the market value of the parcel is less than 
 11.6   $100,000, and additional parcels are owned by the same person or 
 11.7   entity in the same city or town within that county, the reduced 
 11.8   class rate shall be applied up to a combined total market value 
 11.9   of $100,000 for all parcels owned by the same person or entity 
 11.10  in the same city or town within the county; 
 11.11     (2) in the case of grain, fertilizer, and feed elevator 
 11.12  facilities, as defined in section 18C.305, subdivision 1, or 
 11.13  232.21, subdivision 8, the limitation to one parcel per owner 
 11.14  per county for the reduced class rate shall not apply, but there 
 11.15  shall be a limit of $100,000 of preferential value per site of 
 11.16  contiguous parcels owned by the same person or entity.  Only the 
 11.17  value of the elevator portion of each parcel shall qualify for 
 11.18  treatment under this clause.  For purposes of this subdivision, 
 11.19  contiguous parcels include parcels separated only by a railroad 
 11.20  or public road right-of-way; and 
 11.21     (3) in the case of property owned by a nonprofit charitable 
 11.22  organization that qualifies for tax exemption under section 
 11.23  501(c)(3) of the Internal Revenue Code of 1986, as amended 
 11.24  through December 31, 1993, if the property is used as a business 
 11.25  incubator, the limitation to one parcel per owner per county for 
 11.26  the reduced class rate shall not apply, provided that the 
 11.27  reduced rate applies only to the first $100,000 of value per 
 11.28  parcel owned by the organization.  As used in this clause, a 
 11.29  "business incubator" is a facility used for the development of 
 11.30  nonretail businesses, offering access to equipment, space, 
 11.31  services, and advice to the tenant businesses, for the purpose 
 11.32  of encouraging economic development, diversification, and job 
 11.33  creation in the area served by the organization. 
 11.34     To receive the reduced class rate on additional parcels 
 11.35  under clause (1), (2), or (3), the taxpayer must notify the 
 11.36  county assessor that the taxpayer owns more than one parcel that 
 12.1   qualifies under clause (1), (2), or (3). 
 12.2      For purposes of this paragraph, parcels are considered to 
 12.3   be contiguous even if they are separated from each other by a 
 12.4   road, street, vacant lot, waterway, or other similar intervening 
 12.5   type of property. 
 12.6      (b) Employment property defined in section 469.166, during 
 12.7   the period provided in section 469.170, shall constitute class 
 12.8   3b and has a class rate of 2.3 percent of the first $50,000 of 
 12.9   market value and 3.6 percent of the remainder, except that for 
 12.10  employment property located in a border city enterprise zone 
 12.11  designated pursuant to section 469.168, subdivision 4, paragraph 
 12.12  (c), the class rate of the first $100,000 tier of market value 
 12.13  and the class rate of the remainder is determined under 
 12.14  paragraph (a), unless the governing body of the city designated 
 12.15  as an enterprise zone determines that a specific parcel shall be 
 12.16  assessed pursuant to the first clause of this sentence.  The 
 12.17  governing body may provide for assessment under the first clause 
 12.18  of the preceding sentence only for property which is located in 
 12.19  an area which has been designated by the governing body for the 
 12.20  receipt of tax reductions authorized by section 469.171, 
 12.21  subdivision 1. 
 12.22     (c) Structures which are (i) located on property classified 
 12.23  as class 3a, (ii) constructed under an initial building permit 
 12.24  issued after January 2, 1996, (iii) located in a transit zone as 
 12.25  defined under section 473.3915, subdivision 3, (iv) located 
 12.26  within the boundaries of a school district, and (v) not 
 12.27  primarily used for retail or transient lodging purposes, shall 
 12.28  have a class rate of four percent on that any portion of the 
 12.29  market value in excess of $100,000 and any market value under 
 12.30  $100,000 that does not qualify for the three percent first tier 
 12.31  class rate under paragraph (a).  As used in item (v), a 
 12.32  structure is primarily used for retail or transient lodging 
 12.33  purposes if over 50 percent of its square footage is used for 
 12.34  those purposes.  The four percent rate shall also apply to 
 12.35  improvements to existing structures that meet the requirements 
 12.36  of items (i) to (v) if the improvements are constructed under an 
 13.1   initial building permit issued after January 2, 1996, even if 
 13.2   the remainder of the structure was constructed prior to January 
 13.3   2, 1996.  For the purposes of this paragraph, a structure shall 
 13.4   be considered to be located in a transit zone if any portion of 
 13.5   the structure lies within the zone.  If any property once 
 13.6   eligible for treatment under this paragraph ceases to remain 
 13.7   eligible due to revisions in transit zone boundaries, the 
 13.8   property shall continue to receive treatment under this 
 13.9   paragraph for a period of three years. 
 13.10     Sec. 6.  Minnesota Statutes 1996, section 273.13, 
 13.11  subdivision 25, is amended to read: 
 13.12     Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
 13.13  estate containing four or more units and used or held for use by 
 13.14  the owner or by the tenants or lessees of the owner as a 
 13.15  residence for rental periods of 30 days or more.  Class 4a also 
 13.16  includes hospitals licensed under sections 144.50 to 144.56, 
 13.17  other than hospitals exempt under section 272.02, and contiguous 
 13.18  property used for hospital purposes, without regard to whether 
 13.19  the property has been platted or subdivided.  Class 4a property 
 13.20  in a city with a population of 5,000 or less, that is (1) 
 13.21  located outside of the metropolitan area, as defined in section 
 13.22  473.121, subdivision 2, or outside any county contiguous to the 
 13.23  metropolitan area, and (2) whose city boundary is at least 15 
 13.24  miles from the boundary of any city with a population greater 
 13.25  than 5,000 has a class rate of 2.3 percent of market value for 
 13.26  taxes payable in 1996 and thereafter.  All other class 4a 
 13.27  property has a class rate of 3.4 2.8 percent of market value for 
 13.28  taxes payable in 1996 1998 and thereafter.  For purposes of this 
 13.29  paragraph, population has the same meaning given in section 
 13.30  477A.011, subdivision 3. 
 13.31     (b) Class 4b includes: 
 13.32     (1) residential real estate containing less than four two 
 13.33  or three units, other than seasonal residential, and 
 13.34  recreational; 
 13.35     (2) manufactured homes not classified under any other 
 13.36  provision; 
 14.1      (3) a dwelling, garage, and surrounding one acre of 
 14.2   property on a nonhomestead farm classified under subdivision 23, 
 14.3   paragraph (b) unimproved property that is classified residential 
 14.4   as determined under section 273.13, subdivision 33.  
 14.5      Class 4b property has a class rate of 2.8 percent of market 
 14.6   value for taxes payable in 1992, 2.5 percent of market value for 
 14.7   taxes payable in 1993, and 2.3 percent of market value for taxes 
 14.8   payable in 1994 1998, and thereafter. 
 14.9      (c) Class 4c property includes: 
 14.10     (1) a structure that is:  
 14.11     (i) situated on real property that is used for housing for 
 14.12  the elderly or for low- and moderate-income families as defined 
 14.13  in Title II, as amended through December 31, 1990, of the 
 14.14  National Housing Act or the Minnesota housing finance agency law 
 14.15  of 1971, as amended, or rules promulgated by the agency and 
 14.16  financed by a direct federal loan or federally insured loan made 
 14.17  pursuant to Title II of the Act; or 
 14.18     (ii) situated on real property that is used for housing the 
 14.19  elderly or for low- and moderate-income families as defined by 
 14.20  the Minnesota housing finance agency law of 1971, as amended, or 
 14.21  rules adopted by the agency pursuant thereto and financed by a 
 14.22  loan made by the Minnesota housing finance agency pursuant to 
 14.23  the provisions of the act.  
 14.24     This clause applies only to property of a nonprofit or 
 14.25  limited dividend entity.  Property is classified as class 4c 
 14.26  under this clause for 15 years from the date of the completion 
 14.27  of the original construction or substantial rehabilitation, or 
 14.28  for the original term of the loan.  
 14.29     (2) a structure that is: 
 14.30     (i) situated upon real property that is used for housing 
 14.31  lower income families or elderly or handicapped persons, as 
 14.32  defined in section 8 of the United States Housing Act of 1937, 
 14.33  as amended; and 
 14.34     (ii) owned by an entity which has entered into a housing 
 14.35  assistance payments contract under section 8 which provides 
 14.36  assistance for 100 percent of the dwelling units in the 
 15.1   structure, other than dwelling units intended for management or 
 15.2   maintenance personnel.  Property is classified as class 4c under 
 15.3   this clause for the term of the housing assistance payments 
 15.4   contract, including all renewals, or for the term of its 
 15.5   permanent financing, whichever is shorter; and 
 15.6      (3) a qualified low-income building as defined in section 
 15.7   42(c)(2) of the Internal Revenue Code of 1986, as amended 
 15.8   through December 31, 1990, that (i) receives a low-income 
 15.9   housing credit under section 42 of the Internal Revenue Code of 
 15.10  1986, as amended through December 31, 1990; or (ii) meets the 
 15.11  requirements of that section and receives public financing, 
 15.12  except financing provided under sections 469.174 to 469.179, 
 15.13  which contains terms restricting the rents; or (iii) meets the 
 15.14  requirements of section 273.1317.  Classification pursuant to 
 15.15  this clause is limited to a term of 15 years.  The public 
 15.16  financing received must be from at least one of the following 
 15.17  sources:  government issued bonds exempt from taxes under 
 15.18  section 103 of the Internal Revenue Code of 1986, as amended 
 15.19  through December 31, 1993, the proceeds of which are used for 
 15.20  the acquisition or rehabilitation of the building; programs 
 15.21  under section 221(d)(3), 202, or 236, of Title II of the 
 15.22  National Housing Act; rental housing program funds under Section 
 15.23  8 of the United States Housing Act of 1937 or the market rate 
 15.24  family graduated payment mortgage program funds administered by 
 15.25  the Minnesota housing finance agency that are used for the 
 15.26  acquisition or rehabilitation of the building; public financing 
 15.27  provided by a local government used for the acquisition or 
 15.28  rehabilitation of the building, including grants or loans from 
 15.29  federal community development block grants, HOME block grants, 
 15.30  or residential rental bonds issued under chapter 474A; or other 
 15.31  rental housing program funds provided by the Minnesota housing 
 15.32  finance agency for the acquisition or rehabilitation of the 
 15.33  building. 
 15.34     For all properties described in clauses (1), (2), and (3) 
 15.35  and in paragraph (d), the market value determined by the 
 15.36  assessor must be based on the normal approach to value using 
 16.1   normal unrestricted rents unless the owner of the property 
 16.2   elects to have the property assessed under Laws 1991, chapter 
 16.3   291, article 1, section 55.  If the owner of the property elects 
 16.4   to have the market value determined on the basis of the actual 
 16.5   restricted rents, as provided in Laws 1991, chapter 291, article 
 16.6   1, section 55, the property will be assessed at the rate 
 16.7   provided for class 4a or class 4b property, as appropriate.  
 16.8   Properties described in clauses (1)(ii), (3), and (4) may apply 
 16.9   to the assessor for valuation under Laws 1991, chapter 291, 
 16.10  article 1, section 55.  The land on which these structures are 
 16.11  situated has the class rate given in paragraph (b) if the 
 16.12  structure contains fewer than four units, and the class rate 
 16.13  given in paragraph (a) if the structure contains four or more 
 16.14  units.  This clause applies only to the property of a nonprofit 
 16.15  or limited dividend entity.  
 16.16     (4) a parcel of land, not to exceed one acre, and its 
 16.17  improvements or a parcel of unimproved land, not to exceed one 
 16.18  acre, if it is owned by a neighborhood real estate trust and at 
 16.19  least 60 percent of the dwelling units, if any, on all land 
 16.20  owned by the trust are leased to or occupied by lower income 
 16.21  families or individuals.  This clause does not apply to any 
 16.22  portion of the land or improvements used for nonresidential 
 16.23  purposes.  For purposes of this clause, a lower income family is 
 16.24  a family with an income that does not exceed 65 percent of the 
 16.25  median family income for the area, and a lower income individual 
 16.26  is an individual whose income does not exceed 65 percent of the 
 16.27  median individual income for the area, as determined by the 
 16.28  United States Secretary of Housing and Urban Development.  For 
 16.29  purposes of this clause, "neighborhood real estate trust" means 
 16.30  an entity which is certified by the governing body of the 
 16.31  municipality in which it is located to have the following 
 16.32  characteristics: 
 16.33     (a) it is a nonprofit corporation organized under chapter 
 16.34  317A; 
 16.35     (b) it has as its principal purpose providing housing for 
 16.36  lower income families in a specific geographic community 
 17.1   designated in its articles or bylaws; 
 17.2      (c) it limits membership with voting rights to residents of 
 17.3   the designated community; and 
 17.4      (d) it has a board of directors consisting of at least 
 17.5   seven directors, 60 percent of whom are members with voting 
 17.6   rights and, to the extent feasible, 25 percent of whom are 
 17.7   elected by resident members of buildings owned by the trust; and 
 17.8      (5) except as provided in subdivision 22, paragraph (c), 
 17.9   real property devoted to temporary and seasonal residential 
 17.10  occupancy for recreation purposes, including real property 
 17.11  devoted to temporary and seasonal residential occupancy for 
 17.12  recreation purposes and not devoted to commercial purposes for 
 17.13  more than 250 days in the year preceding the year of 
 17.14  assessment.  For purposes of this clause, property is devoted to 
 17.15  a commercial purpose on a specific day if any portion of the 
 17.16  property is used for residential occupancy, and a fee is charged 
 17.17  for residential occupancy.  Class 4c also includes commercial 
 17.18  use real property used exclusively for recreational purposes in 
 17.19  conjunction with class 4c property devoted to temporary and 
 17.20  seasonal residential occupancy for recreational purposes, up to 
 17.21  a total of two acres, provided the property is not devoted to 
 17.22  commercial recreational use for more than 250 days in the year 
 17.23  preceding the year of assessment and is located within two miles 
 17.24  of the class 4c property with which it is used.  Class 4c 
 17.25  property classified in this clause also includes the remainder 
 17.26  of class 1c resorts.  Owners of real property devoted to 
 17.27  temporary and seasonal residential occupancy for recreation 
 17.28  purposes and all or a portion of which was devoted to commercial 
 17.29  purposes for not more than 250 days in the year preceding the 
 17.30  year of assessment desiring classification as class 1c or 4c, 
 17.31  must submit a declaration to the assessor designating the cabins 
 17.32  or units occupied for 250 days or less in the year preceding the 
 17.33  year of assessment by January 15 of the assessment year.  Those 
 17.34  cabins or units and a proportionate share of the land on which 
 17.35  they are located will be designated class 1c or 4c as otherwise 
 17.36  provided.  The remainder of the cabins or units and a 
 18.1   proportionate share of the land on which they are located will 
 18.2   be designated classified as class 3a.  The first $100,000 of the 
 18.3   market value of the remainder of the cabins or units and a 
 18.4   proportionate share of the land on which they are located shall 
 18.5   have a class rate of three percent.  The owner of property 
 18.6   desiring designation as class 1c or 4c property must provide 
 18.7   guest registers or other records demonstrating that the units 
 18.8   for which class 1c or 4c designation is sought were not occupied 
 18.9   for more than 250 days in the year preceding the assessment if 
 18.10  so requested.  The portion of a property operated as a (1) 
 18.11  restaurant, (2) bar, (3) gift shop, and (4) other nonresidential 
 18.12  facility operated on a commercial basis not directly related to 
 18.13  temporary and seasonal residential occupancy for recreation 
 18.14  purposes shall not qualify for class 1c or 4c; 
 18.15     (6) (2) real property up to a maximum of one acre of land 
 18.16  owned by a nonprofit community service oriented organization; 
 18.17  provided that the property is not used for a revenue-producing 
 18.18  activity for more than six days in the calendar year preceding 
 18.19  the year of assessment and the property is not used for 
 18.20  residential purposes on either a temporary or permanent basis.  
 18.21  For purposes of this clause, a "nonprofit community service 
 18.22  oriented organization" means any corporation, society, 
 18.23  association, foundation, or institution organized and operated 
 18.24  exclusively for charitable, religious, fraternal, civic, or 
 18.25  educational purposes, and which is exempt from federal income 
 18.26  taxation pursuant to section 501(c)(3), (10), or (19) of the 
 18.27  Internal Revenue Code of 1986, as amended through December 31, 
 18.28  1990.  For purposes of this clause, "revenue-producing 
 18.29  activities" shall include but not be limited to property or that 
 18.30  portion of the property that is used as an on-sale intoxicating 
 18.31  liquor or 3.2 percent malt liquor establishment licensed under 
 18.32  chapter 340A, a restaurant open to the public, bowling alley, a 
 18.33  retail store, gambling conducted by organizations licensed under 
 18.34  chapter 349, an insurance business, or office or other space 
 18.35  leased or rented to a lessee who conducts a for-profit 
 18.36  enterprise on the premises.  Any portion of the property which 
 19.1   is used for revenue-producing activities for more than six days 
 19.2   in the calendar year preceding the year of assessment shall be 
 19.3   assessed as class 3a.  The use of the property for social events 
 19.4   open exclusively to members and their guests for periods of less 
 19.5   than 24 hours, when an admission is not charged nor any revenues 
 19.6   are received by the organization shall not be considered a 
 19.7   revenue-producing activity; 
 19.8      (7) (3) post-secondary student housing of not more than one 
 19.9   acre of land that is owned by a nonprofit corporation organized 
 19.10  under chapter 317A and is used exclusively by a student 
 19.11  cooperative, sorority, or fraternity for on-campus housing or 
 19.12  housing located within two miles of the border of a college 
 19.13  campus; and 
 19.14     (8) (4) manufactured home parks as defined in section 
 19.15  327.14, subdivision 3; and 
 19.16     (5) real property devoted to a seasonal golf operation, 
 19.17  which is privately owned and open to the public on a daily fee 
 19.18  basis.  Any portion of the real estate used for commercial 
 19.19  purposes beyond the length of the golf season in the year 
 19.20  preceding the year of assessment shall be classified as class 3a 
 19.21  property under subdivision 24, paragraph (a).  In order to 
 19.22  qualify for class 4c under this paragraph, the golf course must 
 19.23  be open to the public and can charge membership fees or dues, 
 19.24  but a membership is not required in order to use the property 
 19.25  for golfing.  To qualify under this paragraph, the property must 
 19.26  meet the requirements of section 273.112, subdivision 3, 
 19.27  paragraph (d).  
 19.28     Class 4c property has a class rate of 2.3 percent of market 
 19.29  value, except that (i) for each parcel of seasonal residential 
 19.30  recreational property not used for commercial purposes under 
 19.31  clause (5) (1) the first $72,000 $80,000 of market value on each 
 19.32  parcel has a class rate of 1.75 percent for taxes payable in 
 19.33  1997 and 1.5 percent for taxes payable in 1998 and thereafter, 
 19.34  and the market value of each parcel that exceeds $72,000 $80,000 
 19.35  has a class rate of 2.5 percent for taxes payable in 1997, 2.25 
 19.36  percent for taxes payable in 1998, and two percent for taxes 
 20.1   payable in 1999 and thereafter, and (ii) manufactured home parks 
 20.2   assessed under clause (8) (4) have a class rate of two 
 20.3   percent for taxes payable in 1996, and thereafter.  
 20.4      (d) Class 4d property includes: 
 20.5      (1) a structure that is: 
 20.6      (i) situated on real property that is used for housing for 
 20.7   the elderly or for low and moderate income families as defined 
 20.8   by the Farmers Home Administration; 
 20.9      (ii) located in a municipality of less than 10,000 
 20.10  population; and 
 20.11     (iii) financed by a direct loan or insured loan from the 
 20.12  Farmers Home Administration.  Property is classified under this 
 20.13  clause for 15 years from the date of the completion of the 
 20.14  original construction or for the original term of the loan.  
 20.15     The class rates in paragraph (c), clauses (1), (2), and (3) 
 20.16  and this clause apply to the properties described in them, only 
 20.17  in proportion to occupancy of the structure by elderly or 
 20.18  handicapped persons or low and moderate income families as 
 20.19  defined in the applicable laws unless construction of the 
 20.20  structure had been commenced prior to January 1, 1984; or the 
 20.21  project had been approved by the governing body of the 
 20.22  municipality in which it is located prior to June 30, 1983; or 
 20.23  financing of the project had been approved by a federal or state 
 20.24  agency prior to June 30, 1983.  For those properties, 4c or 4d 
 20.25  classification is available only for those units meeting the 
 20.26  requirements of section 273.1318. 
 20.27     Classification under this clause is only available to 
 20.28  property of a nonprofit or limited dividend entity. 
 20.29     In the case of a structure financed or refinanced under any 
 20.30  federal or state mortgage insurance or direct loan program 
 20.31  exclusively for housing for the elderly or for housing for the 
 20.32  handicapped, a unit shall be considered occupied so long as it 
 20.33  is actually occupied by an elderly or handicapped person or, if 
 20.34  vacant, is held for rental to an elderly or handicapped person. 
 20.35     (2) For taxes payable in 1992, 1993, and 1994, only, 
 20.36  buildings and appurtenances, together with the land upon which 
 21.1   they are located, leased by the occupant under the community 
 21.2   lending model lease-purchase mortgage loan program administered 
 21.3   by the Federal National Mortgage Association, provided the 
 21.4   occupant's income is no greater than 60 percent of the county or 
 21.5   area median income, adjusted for family size and the building 
 21.6   consists of existing single family or duplex housing.  The lease 
 21.7   agreement must provide for a portion of the lease payment to be 
 21.8   escrowed as a nonrefundable down payment on the housing.  To 
 21.9   qualify under this clause, the taxpayer must apply to the county 
 21.10  assessor by May 30 of each year.  The application must be 
 21.11  accompanied by an affidavit or other proof required by the 
 21.12  assessor to determine qualification under this clause. 
 21.13     (3) Qualifying buildings and appurtenances, together with 
 21.14  the land upon which they are located, leased for a period of up 
 21.15  to five years by the occupant under a lease-purchase program 
 21.16  administered by the Minnesota housing finance agency or a 
 21.17  housing and redevelopment authority authorized under sections 
 21.18  469.001 to 469.047, provided the occupant's income is no greater 
 21.19  than 80 percent of the county or area median income, adjusted 
 21.20  for family size, and the building consists of two or less 
 21.21  dwelling units.  The lease agreement must provide for a portion 
 21.22  of the lease payment to be escrowed as a nonrefundable down 
 21.23  payment on the housing.  The administering agency shall verify 
 21.24  the occupants income eligibility and certify to the county 
 21.25  assessor that the occupant meets the income criteria under this 
 21.26  paragraph.  To qualify under this clause, the taxpayer must 
 21.27  apply to the county assessor by May 30 of each year.  For 
 21.28  purposes of this section, "qualifying buildings and 
 21.29  appurtenances" shall be defined as one or two unit residential 
 21.30  buildings which are unoccupied and have been abandoned and 
 21.31  boarded for at least six months is qualifying low-income rental 
 21.32  housing certified to the assessor by the housing finance agency 
 21.33  under sections 273.126 and 462A.071.  Class 4d includes land in 
 21.34  proportion to the total market value of the building that is 
 21.35  qualifying low-income rental housing.  For all properties 
 21.36  qualifying as class 4d, the market value determined by the 
 22.1   assessor must be based on the normal approach to value using 
 22.2   normal unrestricted rents. 
 22.3      Class 4d property has a class rate of two 1.5 percent of 
 22.4   market value except that property classified under clause (3), 
 22.5   shall have the same class rate as class 1a property. 
 22.6      (e) Residential rental property that would otherwise be 
 22.7   assessed as class 4 property under paragraph (a); paragraph (b), 
 22.8   clauses (1) and (3); paragraph (c), clause (1), (2), (3), or 
 22.9   (4), is assessed at the class rate applicable to it under 
 22.10  Minnesota Statutes 1988, section 273.13, if it is found to be a 
 22.11  substandard building under section 273.1316.  Residential rental 
 22.12  property that would otherwise be assessed as class 4 property 
 22.13  under paragraph (d) is assessed at 2.3 percent of market value 
 22.14  if it is found to be a substandard building under section 
 22.15  273.1316. 
 22.16     (f) Class 4e property consists of the residential portion 
 22.17  of any structure located within a city that was converted from 
 22.18  nonresidential use to residential use, provided that: 
 22.19     (1) the structure had formerly been used as a warehouse; 
 22.20     (2) the structure was originally constructed prior to 1940; 
 22.21     (3) the conversion was done after December 31, 1995, but 
 22.22  before January 1, 2003; and 
 22.23     (4) the conversion involved an investment of at least 
 22.24  $25,000 per residential unit. 
 22.25     Class 4e property has a class rate of 2.3 percent, provided 
 22.26  that a structure is eligible for class 4e classification only in 
 22.27  the 12 assessment years immediately following the conversion. 
 22.28     Sec. 7.  Minnesota Statutes 1996, section 273.13, 
 22.29  subdivision 31, is amended to read: 
 22.30     Subd. 31.  [CLASS 5.] Class 5 property includes:  
 22.31     (1) tools, implements, and machinery of an electric 
 22.32  generating, transmission, or distribution system or a pipeline 
 22.33  system transporting or distributing water, gas, crude oil, or 
 22.34  petroleum products or mains and pipes used in the distribution 
 22.35  of steam or hot or chilled water for heating or cooling 
 22.36  buildings, which are fixtures; 
 23.1      (2) unmined iron ore and low-grade iron-bearing formations 
 23.2   as defined in section 273.14; and 
 23.3      (3) all other property not otherwise classified. 
 23.4      Class 5 property has a class rate of 5.06 4.5 percent of 
 23.5   market value for taxes payable in 1998 and thereafter. 
 23.6      Sec. 8.  Minnesota Statutes 1996, section 273.1398, 
 23.7   subdivision 1, is amended to read: 
 23.8      Subdivision 1.  [DEFINITIONS.] (a) In this section, the 
 23.9   terms defined in this subdivision have the meanings given them. 
 23.10     (b) "Unique taxing jurisdiction" means the geographic area 
 23.11  subject to the same set of local tax rates. 
 23.12     (c) "Previous net tax capacity" means the product of the 
 23.13  appropriate net class rates for the year previous to the year in 
 23.14  which the aid is payable, and estimated market values for the 
 23.15  assessment two years prior to that in which aid is payable.  
 23.16  "Total previous net tax capacity" means the previous net tax 
 23.17  capacities for all property within the unique taxing 
 23.18  jurisdiction.  The total previous net tax capacity shall be 
 23.19  reduced by the sum of (1) the unique taxing jurisdiction's 
 23.20  previous net tax capacity of commercial-industrial property as 
 23.21  defined in section 473F.02, subdivision 3, or 276A.02, 
 23.22  subdivision 3, multiplied by the ratio determined pursuant to 
 23.23  section 473F.08, subdivision 6, or 276A.06, subdivision 7, for 
 23.24  the municipality, as defined in section 473F.02, subdivision 8, 
 23.25  or 276A.06, subdivision 7, in which the unique taxing 
 23.26  jurisdiction is located, (2) the previous net tax capacity of 
 23.27  the captured value of tax increment financing districts as 
 23.28  defined in section 469.177, subdivision 2, and (3) the previous 
 23.29  net tax capacity of transmission lines deducted from a local 
 23.30  government's total net tax capacity under section 273.425.  
 23.31  Previous net tax capacity cannot be less than zero. 
 23.32     (d) "Equalized market values" are market values that have 
 23.33  been equalized by dividing the assessor's estimated market value 
 23.34  for the second year prior to that in which the aid is payable by 
 23.35  the assessment sales ratios determined by class in the 
 23.36  assessment sales ratio study conducted by the department of 
 24.1   revenue pursuant to section 124.2131 in the second year prior to 
 24.2   that in which the aid is payable.  The equalized market values 
 24.3   shall equal the unequalized market values divided by the 
 24.4   assessment sales ratio. 
 24.5      (e) "Equalized school levies" means the amounts levied for: 
 24.6      (1) general education under section 124A.23, subdivision 2; 
 24.7      (2) supplemental revenue under section 124A.22, subdivision 
 24.8   8a; 
 24.9      (3) transition revenue under section 124A.22, subdivision 
 24.10  13c; 
 24.11     (4) basic transportation under section 124.226, subdivision 
 24.12  1; and 
 24.13     (5) referendum revenue under section 124A.03. 
 24.14     (f) "Current local tax rate" means the quotient derived by 
 24.15  dividing the taxes levied within a unique taxing jurisdiction 
 24.16  for taxes payable in the year prior to that for which aids are 
 24.17  being calculated by the total previous net tax capacity of the 
 24.18  unique taxing jurisdiction.  
 24.19     (g) For purposes of calculating and allocating homestead 
 24.20  and agricultural credit aid authorized pursuant to subdivision 2 
 24.21  and the disparity reduction aid authorized in subdivision 3, 
 24.22  "gross taxes levied on all properties," "gross taxes," or "taxes 
 24.23  levied" means the total net tax capacity based taxes levied on 
 24.24  all properties except that levied on the captured value of tax 
 24.25  increment districts as defined in section 469.177, subdivision 
 24.26  2, and that levied on the portion of commercial industrial 
 24.27  properties' assessed value or gross tax capacity, as defined in 
 24.28  section 473F.02, subdivision 3, subject to the areawide tax as 
 24.29  provided in section 473F.08, subdivision 6, in a unique taxing 
 24.30  jurisdiction.  "Gross taxes" are before any reduction for 
 24.31  disparity reduction aid but "taxes levied" are after any 
 24.32  reduction for disparity reduction aid.  Gross taxes levied or 
 24.33  taxes levied cannot be less than zero.  
 24.34     "Taxes levied" excludes equalized school levies. 
 24.35     (h) "Household adjustment factor" means the number of 
 24.36  households for the second most recent year preceding that in 
 25.1   which the aids are payable divided by the number of households 
 25.2   for the third most recent year.  The household adjustment factor 
 25.3   cannot be less than one.  
 25.4      (i) "Growth adjustment factor" means the household 
 25.5   adjustment factor in the case of counties.  In the case of 
 25.6   cities, towns, school districts, and special taxing districts, 
 25.7   the growth adjustment factor equals one.  The growth adjustment 
 25.8   factor cannot be less than one.  
 25.9      (j) "Homestead and agricultural credit base" means the 
 25.10  previous year's certified homestead and agricultural credit aid 
 25.11  determined under subdivision 2 less any permanent aid reduction 
 25.12  in the previous year to homestead and agricultural credit aid.  
 25.13     (k) "Net tax capacity adjustment" means (1) the tax base 
 25.14  differential defined in subdivision 1a, multiplied by (2) the 
 25.15  unique taxing jurisdiction's current local tax rate.  The net 
 25.16  tax capacity adjustment cannot be less than zero. 
 25.17     (l) "Fiscal disparity adjustment" means a taxing 
 25.18  jurisdiction's fiscal disparity distribution levy under section 
 25.19  473F.08, subdivision 3, clause (a), or 276A.06, subdivision 3, 
 25.20  clause (a), for taxes payable in the year prior to that for 
 25.21  which aids are being calculated, multiplied by the ratio of the 
 25.22  tax base differential percent referenced in subdivision 1a for 
 25.23  the highest class rate for class 3 property for taxes payable in 
 25.24  the year prior to that for which aids are being calculated to 
 25.25  the highest class rate for class 3 property for taxes payable in 
 25.26  the second prior year prior to that for which aids are being 
 25.27  calculated.  In the case of school districts, the fiscal 
 25.28  disparity distribution levy shall exclude that part of the levy 
 25.29  attributable to equalized school levies. 
 25.30     Sec. 9.  Minnesota Statutes 1996, section 273.1398, 
 25.31  subdivision 1a, is amended to read: 
 25.32     Subd. 1a.  [TAX BASE DIFFERENTIAL.] (a) For aids payable in 
 25.33  1997, the tax base differential is 0.25 percent of the 
 25.34  assessment year 1995 taxable market value of class 4c 
 25.35  noncommercial seasonal recreational residential property up to 
 25.36  $72,000.  
 26.1      (b) For aids payable in 1998, the tax base differential is 
 26.2   0.25 percent the sum of the following percentages of the 
 26.3   assessment year 1996 taxable market value of the following 
 26.4   classes of property, excluding that portion of any property's 
 26.5   value which is captured value of a tax increment financing 
 26.6   district as defined in section 469.177, subdivision 2: 
 26.7      (i) 0.25 percent of class 4c noncommercial seasonal 
 26.8   recreational residential property up to $72,000.; 
 26.9      (ii) 0.2 percent of all class 3a and class 5 
 26.10  commercial/industrial/public utility property which has a class 
 26.11  rate of three percent for taxes payable in 1997; 
 26.12     (iii) 0.3 percent of all class 3a commercial/industrial 
 26.13  property which has a class rate of 4.6 percent for taxes payable 
 26.14  in 1997; 
 26.15     (iv) 0.1 percent of all class 3a public utility property 
 26.16  and all class 5 property which has a class rate of 4.6 percent 
 26.17  for taxes payable in 1997; 
 26.18     (v) 0.1 percent of all class 2 property which has a class 
 26.19  rate of 1.5 percent for taxes payable in 1997; 
 26.20     (vi) 0.25 percent of class 4c noncommercial seasonal 
 26.21  recreational residential property over $72,000; and 
 26.22     (vii) 0.6 percent of all class 4a apartment property which 
 26.23  has a class rate of 3.4 percent for taxes payable in 1997. 
 26.24     For properties lying within the area defined in section 
 26.25  473F.02, subdivision 2, the value of properties in clauses (ii) 
 26.26  through (iv) must be reduced by the ratio determined under 
 26.27  section 473F.08, subdivision 6.  
 26.28     For properties lying within the area defined in section 
 26.29  276A.01, subdivision 2, the value of properties in clauses (ii) 
 26.30  through (iv) must be reduced by the ratio determined under 
 26.31  section 276A.06, subdivision 7. 
 26.32     (c) For aids payable in 1999, the tax base differential is 
 26.33  0.25 percent of the assessment year 1997 taxable market value of 
 26.34  class 4c noncommercial seasonal recreational residential 
 26.35  property over $80,000. 
 26.36     Sec. 10.  Minnesota Statutes 1996, section 273.1398, is 
 27.1   amended by adding a subdivision to read: 
 27.2      Subd. 2e.  [STATE GENERAL EDUCATION HOMESTEAD AND 
 27.3   AGRICULTURAL CREDIT AID.] (a) Each year, a state general 
 27.4   education homestead and agricultural credit aid adjustment shall 
 27.5   be computed for each school district in the state equal to (1) 
 27.6   the district's current local tax rate for equalized school 
 27.7   levies multiplied by the tax rate differential defined in 
 27.8   subdivision 1a, plus (2) an amount computed analogously to the 
 27.9   fiscal disparity adjustment, utilizing the portion of the levy 
 27.10  attributable to equalized school levies.  The sum of the amounts 
 27.11  determined for each district shall be the state general 
 27.12  education homestead and agricultural credit aid adjustment. 
 27.13     (b) Each county's calendar year 1998 homestead and 
 27.14  agricultural credit aid under subdivision 2 shall be permanently 
 27.15  reduced by an amount equal to three percent of the county's 1996 
 27.16  adjusted net tax capacity.  Each city's and town's calendar year 
 27.17  1998 homestead and agricultural credit aid under subdivision 2 
 27.18  shall be permanently reduced by an amount equal to two percent 
 27.19  of the jurisdiction's 1996 adjusted net tax capacity.  The 
 27.20  reductions shall be made after all other computations, except 
 27.21  for the reduction in subdivision 2f, for calendar year 1998 
 27.22  homestead and agricultural credit aid have been made.  State 
 27.23  general education homestead and agricultural credit aid shall be 
 27.24  permanently increased by an amount equal to the reductions in 
 27.25  county, city, and town homestead and agricultural credit aid.  
 27.26  For the purposes of this paragraph, adjusted net tax capacity 
 27.27  for a county, city, or town is computed in the same way as it is 
 27.28  computed for school districts under section 124.2131.  
 27.29     (c) The state general education homestead and agricultural 
 27.30  credit aid adjustment for the current year shall be added to the 
 27.31  sum of the adjustment amounts from previous years to derive 
 27.32  total state general education homestead and agricultural credit 
 27.33  aid.  By June 25 of each year, the commissioner of revenue shall 
 27.34  certify to the commissioner of children, families, and learning 
 27.35  the amount of total state general education homestead and 
 27.36  agricultural credit aid for taxes payable in the following 
 28.1   year.  The amount certified shall be subtracted from the general 
 28.2   education levy amount stated in section 124A.23, subdivision 1, 
 28.3   in determining the general education tax rate. 
 28.4      Sec. 11.  Minnesota Statutes 1996, section 273.1398, is 
 28.5   amended by adding a subdivision to read: 
 28.6      Subd. 2f.  [REDUCTION FOR INCREASED CITY LOCAL GOVERNMENT 
 28.7   AID FUNDING.] In 1998, each city's homestead and agricultural 
 28.8   credit aid shall be permanently reduced by an amount equal to 
 28.9   (a) the product of its calendar year 1998 homestead and 
 28.10  agricultural credit aid after all other computations for 
 28.11  calendar year 1998 homestead and agricultural credit aid have 
 28.12  been made and (b) the ratio of 17967225 to the total calendar 
 28.13  year 1998 homestead and agricultural credit aid for all cities 
 28.14  after all other computations. 
 28.15     Sec. 12.  Minnesota Statutes 1996, section 273.1398, 
 28.16  subdivision 8, is amended to read: 
 28.17     Subd. 8.  [APPROPRIATION.] An amount sufficient to pay the 
 28.18  aids and credits provided under this section for the state, 
 28.19  school districts, intermediate school districts, or any group of 
 28.20  school districts levying as a single taxing entity, is annually 
 28.21  appropriated from the general fund to the commissioner of 
 28.22  children, families, and learning.  An amount sufficient to pay 
 28.23  the aids and credits provided under this section for counties, 
 28.24  cities, towns, and special taxing districts is annually 
 28.25  appropriated from the general fund to the commissioner of 
 28.26  revenue.  A jurisdiction's aid amount may be increased or 
 28.27  decreased based on any prior year adjustments for homestead 
 28.28  credit or other property tax credit or aid programs. 
 28.29     Sec. 13.  Minnesota Statutes 1996, section 276A.06, 
 28.30  subdivision 9, is amended to read: 
 28.31     Subd. 9.  [FISCAL DISPARITIES ADJUSTMENT.] In any year in 
 28.32  which the highest class rate for class 3a property changes from 
 28.33  the rate in the previous year, the following adjustments shall 
 28.34  be made to the procedures described in sections 276A.04 to 
 28.35  276A.06: 
 28.36     (1) An initial contribution tax capacity shall be 
 29.1   determined for each municipality based on the previous year's 
 29.2   class rates. 
 29.3      (2) Each jurisdiction's distribution tax capacity shall be 
 29.4   determined based upon the areawide tax base determined by 
 29.5   summing the tax capacities computed under clause (1) for all 
 29.6   municipalities and apportioning the resulting sum pursuant to 
 29.7   section 276A.05, subdivision 5. 
 29.8      (3) Each jurisdiction's distribution levy shall be 
 29.9   determined by applying the procedures described in subdivision 
 29.10  3, clause (a), to the distribution tax capacity determined 
 29.11  pursuant to clause (2). 
 29.12     (4) Each municipality's final contribution tax capacity 
 29.13  shall be determined equal to its initial contribution tax 
 29.14  capacity multiplied by the ratio of the new highest class rate 
 29.15  for class 3a property for the forthcoming tax year to the 
 29.16  previous year's highest class rate for class 3a property in the 
 29.17  current year. 
 29.18     (5) For the purposes of computing education aids and any 
 29.19  other state aids requiring the addition of the fiscal 
 29.20  disparities distribution tax capacity to the local tax capacity, 
 29.21  each municipality's final distribution tax capacity shall be 
 29.22  determined equal to its initial distribution tax capacity 
 29.23  multiplied by the ratio of the new highest class rate for class 
 29.24  3a property to the previous year's highest class rate for class 
 29.25  3a property. 
 29.26     (6) The areawide tax rate shall be determined by dividing 
 29.27  the sum of the amounts determined in clause (3) by the sum of 
 29.28  the values determined in clause (4). 
 29.29     (7) The final contribution tax capacity determined in 
 29.30  clause (4) shall also be used to determine the portion of each 
 29.31  commercial-industrial property's tax capacity subject to the 
 29.32  areawide tax rate pursuant to subdivision 7. 
 29.33     (3) All other computations shall be made as described in 
 29.34  sections 276A.04 to 276A.06, using the final contribution tax 
 29.35  capacity amounts determined in paragraph (2). 
 29.36     Sec. 14.  Minnesota Statutes 1996, section 290.06, is 
 30.1   amended by adding a subdivision to read: 
 30.2      Subd. 25.  [PROPERTY TAX CREDIT.] (a) A credit is allowed 
 30.3   against the tax imposed on an individual under this chapter 
 30.4   equal to 8.5 percent of the qualified property tax paid in 
 30.5   calendar year 1997. 
 30.6      (b) For property owned and occupied by the taxpayer, 
 30.7   qualified tax means property taxes payable as defined in section 
 30.8   290A.03, subdivision 11, assessed in 1996 and payable in 1997.  
 30.9   In the case of property classified as class 2a under section 
 30.10  273.13, the qualified tax is limited to the tax on the house, 
 30.11  garage, and immediately surrounding one acre of land. 
 30.12     (c) For a renter, the qualified property tax means the 
 30.13  amount of rent constituting property taxes under section 
 30.14  290A.03, subdivision 11, based on rent paid in 1997. 
 30.15     (d) For an individual who both owned and rented principal 
 30.16  residences in calendar year 1997, qualified taxes are sum of the 
 30.17  amounts under paragraphs (a) and (b). 
 30.18     (e) If the amount of the credit under this subdivision 
 30.19  exceeds the taxpayer's tax liability under this chapter, the 
 30.20  commissioner shall refund the excess. 
 30.21     (f) To claim a credit under this subdivision, the taxpayer 
 30.22  must attach a copy of the property tax statement and certificate 
 30.23  of rent paid, as applicable, and provide any additional 
 30.24  information the commissioner requires. 
 30.25     (g) An amount sufficient to pay refunds under this 
 30.26  subdivision is appropriated to the commissioner from the 
 30.27  property tax reform account. 
 30.28     (h) This credit applies to taxable years beginning after 
 30.29  December 31, 1996, and before January 1, 1998. 
 30.30     Sec. 15.  Minnesota Statutes 1996, section 290.067, 
 30.31  subdivision 1, is amended to read: 
 30.32     Subdivision 1.  [AMOUNT OF CREDIT.] (a) A taxpayer may take 
 30.33  as a credit against the tax due from the taxpayer and a spouse, 
 30.34  if any, under this chapter an amount equal to the dependent care 
 30.35  credit for which the taxpayer is eligible pursuant to the 
 30.36  provisions of section 21 of the Internal Revenue Code subject to 
 31.1   the limitations provided in subdivision 2 except that in 
 31.2   determining whether the child qualified as a dependent, income 
 31.3   received as an aid to families with dependent children grant or 
 31.4   allowance to or on behalf of the child, or as a grant or 
 31.5   allowance to or on behalf of the child under the successor 
 31.6   program pursuant to Public Law 104-193, must not be taken into 
 31.7   account in determining whether the child received more than half 
 31.8   of the child's support from the taxpayer, and the provisions of 
 31.9   section 32(b)(1)(D) of the Internal Revenue Code do not apply. 
 31.10     (b) If a child who has not attained the age of six years at 
 31.11  the close of the taxable year is cared for at a licensed family 
 31.12  day care home operated by the child's parent, the taxpayer is 
 31.13  deemed to have paid employment-related expenses.  If the child 
 31.14  is 16 months old or younger at the close of the taxable year, 
 31.15  the amount of expenses deemed to have been paid equals the 
 31.16  maximum limit for one qualified individual under section 21(c) 
 31.17  and (d) of the Internal Revenue Code.  If the child is older 
 31.18  than 16 months of age but has not attained the age of six years 
 31.19  at the close of the taxable year, the amount of expenses deemed 
 31.20  to have been paid equals the amount the licensee would charge 
 31.21  for the care of a child of the same age for the same number of 
 31.22  hours of care.  
 31.23     (c) If a married couple: 
 31.24     (1) has a child who has not attained the age of one year at 
 31.25  the close of the taxable year; 
 31.26     (2) files a joint tax return for the taxable year; and 
 31.27     (3) does not participate in a dependent care assistance 
 31.28  program as defined in section 129 of the Internal Revenue Code, 
 31.29  in lieu of the actual employment related expenses paid for that 
 31.30  child under paragraph (a) or the deemed amount under paragraph 
 31.31  (b), the lesser of (i) the combined earned income of the couple 
 31.32  or (ii) $2,400 will be deemed to be the employment related 
 31.33  expense paid for that child.  The earned income limitation of 
 31.34  section 21(d) of the Internal Revenue Code shall not apply to 
 31.35  this deemed amount.  These deemed amounts apply regardless of 
 31.36  whether any employment-related expenses have been paid.  
 32.1      (d) If the taxpayer is not required and does not file a 
 32.2   federal individual income tax return for the tax year, no credit 
 32.3   is allowed for any amount paid to any person unless: 
 32.4      (1) the name, address, and taxpayer identification number 
 32.5   of the person are included on the return claiming the credit; or 
 32.6      (2) if the person is an organization described in section 
 32.7   501(c)(3) of the Internal Revenue Code and exempt from tax under 
 32.8   section 501(a) of the Internal Revenue Code, the name and 
 32.9   address of the person are included on the return claiming the 
 32.10  credit.  
 32.11  In the case of a failure to provide the information required 
 32.12  under the preceding sentence, the preceding sentence does not 
 32.13  apply if it is shown that the taxpayer exercised due diligence 
 32.14  in attempting to provide the information required. 
 32.15     In the case of a nonresident, part-year resident, or a 
 32.16  person who has earned income not subject to tax under this 
 32.17  chapter, the credit determined under section 21 of the Internal 
 32.18  Revenue Code must be allocated based on the ratio by which the 
 32.19  earned income of the claimant and the claimant's spouse from 
 32.20  Minnesota sources bears to the total earned income of the 
 32.21  claimant and the claimant's spouse. 
 32.22     Sec. 16.  Minnesota Statutes 1996, section 290A.03, 
 32.23  subdivision 7, is amended to read: 
 32.24     Subd. 7.  [DEPENDENT.] "Dependent" means any person who is 
 32.25  considered a dependent under sections 151 and 152 of the 
 32.26  Internal Revenue Code.  In the case of a son, stepson, daughter, 
 32.27  or stepdaughter of the claimant, amounts received as an aid to 
 32.28  families with dependent children grant, allowance to or on 
 32.29  behalf of the child, or as a grant or allowance to or on behalf 
 32.30  of the child under the successor program pursuant to Public Law 
 32.31  Number 104-193, surplus food, or other relief in kind supplied 
 32.32  by a governmental agency must not be taken into account in 
 32.33  determining whether the child received more than half of the 
 32.34  child's support from the claimant.  
 32.35     Sec. 17.  Minnesota Statutes 1996, section 290A.03, 
 32.36  subdivision 11, is amended to read: 
 33.1      Subd. 11.  [RENT CONSTITUTING PROPERTY TAXES.] "Rent 
 33.2   constituting property taxes" means the amount of gross rent 
 33.3   actually paid in cash, or its equivalent, which is attributable 
 33.4   (a) to the property tax paid on the unit or (b) to the 
 33.5   amount for claims based on rent paid in calendar years 1997 and 
 33.6   1998, 17 percent and 20 percent thereafter of the gross rent 
 33.7   actually paid in cash, or its equivalent, or the portion of rent 
 33.8   paid in lieu of property taxes, in any calendar year by a 
 33.9   claimant for the right of occupancy of the claimant's Minnesota 
 33.10  homestead in the calendar year, and which rent constitutes the 
 33.11  basis, in the succeeding calendar year of a claim for relief 
 33.12  under this chapter by the claimant.  The amount of rent 
 33.13  attributable to property taxes paid or payments in lieu made on 
 33.14  the unit shall be determined by multiplying the gross rent paid 
 33.15  by the claimant for the calendar year for the unit by a 
 33.16  fraction, the numerator of which is the net tax on the property 
 33.17  where the unit is located and the denominator of which is the 
 33.18  total scheduled rent.  In no case may the rent constituting 
 33.19  property taxes exceed 50 percent of the gross rent paid by the 
 33.20  claimant during that calendar year.  In the case of a claimant 
 33.21  who resides in a unit for which (1) a rent subsidy is paid to, 
 33.22  or for, the claimant based on the income of the claimant or the 
 33.23  claimant's family, or (2) a subsidy is paid to a public housing 
 33.24  authority that owns or operates the claimant's rental unit, 
 33.25  pursuant to United States Code, title 42, section 1437c, 20 
 33.26  percent of gross rent actually paid in cash or its equivalent 
 33.27  shall be the claimant's "rent constituting property taxes 
 33.28  paid."  For purposes of this subdivision, "rent subsidy" does 
 33.29  not include any housing assistance received under aid to 
 33.30  families with dependent children, general assistance, Minnesota 
 33.31  supplemental assistance, supplemental security income, or 
 33.32  similar income maintenance programs. 
 33.33     Sec. 18.  Minnesota Statutes 1996, section 290A.03, 
 33.34  subdivision 13, is amended to read: 
 33.35     Subd. 13.  [PROPERTY TAXES PAYABLE.] "Property taxes 
 33.36  payable" means the property tax exclusive of special 
 34.1   assessments, penalties, and interest payable on a claimant's 
 34.2   homestead before reductions made under section 273.13 but after 
 34.3   deductions made under sections 273.135, 273.1391, 273.42, 
 34.4   subdivision 2, and any other state paid property tax credits in 
 34.5   any calendar year.  In the case of a claimant who makes ground 
 34.6   lease payments, "property taxes payable" includes the amount of 
 34.7   the payments directly attributable to the property taxes 
 34.8   assessed against the parcel on which the house is located.  No 
 34.9   apportionment or reduction of the "property taxes payable" shall 
 34.10  be required for the use of a portion of the claimant's homestead 
 34.11  for a business purpose if the claimant does not deduct any 
 34.12  business depreciation expenses for the use of a portion of the 
 34.13  homestead in the determination of federal adjusted gross 
 34.14  income.  For homesteads which are manufactured homes as defined 
 34.15  in section 273.125, subdivision 8, and for homesteads which are 
 34.16  park trailers taxed as manufactured homes under section 168.012, 
 34.17  subdivision 9, "property taxes payable" shall also include the 
 34.18  amount for claims based on rent paid in calendar years 1997 and 
 34.19  1998, 17 percent and 20 percent thereafter of the gross rent 
 34.20  paid in the preceding year for the site on which the homestead 
 34.21  is located, which is attributable to the net tax paid on the 
 34.22  site.  The amount attributable to property taxes shall be 
 34.23  determined by multiplying the net tax on the parcel by a 
 34.24  fraction, the numerator of which is the gross rent paid for the 
 34.25  calendar year for the site and the denominator of which is the 
 34.26  gross rent paid for the calendar year for the parcel.  When a 
 34.27  homestead is owned by two or more persons as joint tenants or 
 34.28  tenants in common, such tenants shall determine between them 
 34.29  which tenant may claim the property taxes payable on the 
 34.30  homestead.  If they are unable to agree, the matter shall be 
 34.31  referred to the commissioner of revenue whose decision shall be 
 34.32  final.  Property taxes are considered payable in the year 
 34.33  prescribed by law for payment of the taxes. 
 34.34     In the case of a claim relating to "property taxes 
 34.35  payable," the claimant must have owned and occupied the 
 34.36  homestead on January 2 of the year in which the tax is payable 
 35.1   and (i) the property must have been classified as homestead 
 35.2   property pursuant to section 273.13, subdivision 22 or 23 
 35.3   273.124, on or before December 15 of the assessment year to 
 35.4   which the "property taxes payable" relate; or (ii) the claimant 
 35.5   must provide documentation from the local assessor that 
 35.6   application for homestead classification has been made on or 
 35.7   before December 15 of the year in which the "property taxes 
 35.8   payable" were payable and that the assessor has approved the 
 35.9   application. 
 35.10     Sec. 19.  Minnesota Statutes 1996, section 290A.19, is 
 35.11  amended to read: 
 35.12     290A.19 [OWNER OR MANAGING AGENT TO FURNISH RENT 
 35.13  CERTIFICATE.] 
 35.14     (a) The owner or managing agent of any property for which 
 35.15  rent is paid for occupancy as a homestead must furnish a 
 35.16  certificate of rent constituting property tax paid to a person 
 35.17  who is a renter on December 31, in the form prescribed by the 
 35.18  commissioner.  If the renter moves before December 31, the owner 
 35.19  or managing agent may give the certificate to the renter at the 
 35.20  time of moving, or mail the certificate to the forwarding 
 35.21  address if an address has been provided by the renter.  The 
 35.22  certificate must be made available to the renter before February 
 35.23  1 of the year following the year in which the rent was paid.  
 35.24  The owner or managing agent must retain a duplicate of each 
 35.25  certificate or an equivalent record showing the same information 
 35.26  for a period of three years.  The duplicate or other record must 
 35.27  be made available to the commissioner upon request.  For the 
 35.28  purposes of this section, "owner" includes a park owner as 
 35.29  defined under section 327C.01, subdivision 6, and "property" 
 35.30  includes a lot as defined under section 327C.01, subdivision 3. 
 35.31     (b) The certificate of rent constituting property taxes 
 35.32  must include the address of the property, including the county, 
 35.33  and the property tax parcel identification number and any 
 35.34  additional information that the commissioner determines is 
 35.35  appropriate. 
 35.36     (c) If the owner or managing agent fails to provide the 
 36.1   renter with a certificate of rent constituting property taxes, 
 36.2   the commissioner shall allocate the net tax on the building to 
 36.3   the unit on a square footage basis or other appropriate basis as 
 36.4   the commissioner determines.  The renter shall supply the 
 36.5   commissioner with a statement from the county treasurer that 
 36.6   gives the amount of property tax on the parcel, the address and 
 36.7   property tax parcel identification number of the property, and 
 36.8   the number of units in the building. 
 36.9      (d) By January 31 of the year following the year in which 
 36.10  the rent was collected, each owner or managing agent shall 
 36.11  report to the commissioner on a form prescribed by the 
 36.12  commissioner the net tax pertaining to the rental residential 
 36.13  part of the property, the total scheduled rent, and the fraction 
 36.14  computed under section 290A.03, subdivision 11.  A copy of the 
 36.15  property tax statement for taxes payable in that year must be 
 36.16  attached. 
 36.17     Sec. 20.  [462A.071] [CERTIFICATION OF HOUSING QUALIFYING 
 36.18  FOR REDUCED PROPERTY TAX RATE.] 
 36.19     Subdivision 1.  [CERTIFICATION.] By June 30 of each year, 
 36.20  the agency must certify to local assessors the units of 
 36.21  low-income rental properties that qualify for class 4d under 
 36.22  sections 273.126 and 273.13.  In making these certifications, 
 36.23  the agency may rely on the application and supporting 
 36.24  information supplied by the property owner as to compliance with 
 36.25  the income limits under section 273.126, subdivision 2, and 
 36.26  satisfaction of the minimum housing quality standards under 
 36.27  subdivision 4. 
 36.28     Subd. 2.  [APPLICATION.] (a) In order to qualify for 
 36.29  certification under subdivision 1, the owner or manager of the 
 36.30  property must annually apply to the agency.  The application 
 36.31  must be in the form prescribed by the agency, contain the 
 36.32  information required by the agency, and be submitted by the date 
 36.33  and time specified by the agency. 
 36.34     (b) Each application must include: 
 36.35     (1) the property tax identification number; 
 36.36     (2) the number, type, and size of units the applicant seeks 
 37.1   to qualify as low-income housing under class 4d; 
 37.2      (3) the number, type, and size of units in the property for 
 37.3   which the applicant is not seeking qualification, if any; 
 37.4      (4) a certification that the property has been inspected by 
 37.5   a qualified inspector within the past three years and meets the 
 37.6   minimum housing quality standards or is exempt from the 
 37.7   inspection requirement under subdivision 4; 
 37.8      (5) a statement indicating the building is in compliance 
 37.9   with the income limits; 
 37.10     (6) an executed agreement to restrict rents meeting the 
 37.11  requirements specified by the agency or executed leases for the 
 37.12  units for which qualification as low-income housing as class 4d 
 37.13  under section 273.13 is sought and the rent schedule; and 
 37.14     (7) any additional information the agency deems appropriate 
 37.15  to require. 
 37.16     (c) The applicant must pay a per-unit application fee to be 
 37.17  set by the agency.  The application fee charged by the agency 
 37.18  must approximately equal the costs of processing and reviewing 
 37.19  the applications.  The fee must be deposited in the general fund.
 37.20     Subd. 3.  [AGREEMENT TO RESTRICT RENTS.] The agency may 
 37.21  prescribe one or more standard form agreements to restrict rents 
 37.22  that meet the requirements of section 273.126, subdivision 3.  
 37.23  The agreements must be in recordable form.  The agency may 
 37.24  require applicants to execute a rent restriction agreement in 
 37.25  this form as a condition of entering an agreement to restrict 
 37.26  rents. 
 37.27     Subd. 4.  [MINIMUM HOUSING QUALITY STANDARDS.] (a) To 
 37.28  qualify for taxation under class 4d under section 273.13, a unit 
 37.29  must meet both the housing maintenance code of the local unit of 
 37.30  government in which the unit is located, if such a code has been 
 37.31  adopted, and the housing quality standards adopted by the United 
 37.32  States Department of Housing and Urban Development. 
 37.33     (b) In order to meet the minimum housing quality standards, 
 37.34  a building must be inspected by an independent designated 
 37.35  inspector at least once every three years.  The inspector must 
 37.36  certify that the building complies with the minimum standards.  
 38.1   The property owner must pay the cost of the inspection. 
 38.2      (c) The agency may exempt from the inspection requirement 
 38.3   housing units that are financed by a governmental entity and 
 38.4   subject to regular inspection or other compliance checks with 
 38.5   regard to minimum housing quality.  Written certification must 
 38.6   be available, however, showing that these exempt units have been 
 38.7   inspected within the last three years and comply with the 
 38.8   requirements under the public financing or local requirements. 
 38.9      Subd. 5.  [HOUSING INSPECTORS.] (a) Housing inspections 
 38.10  required by this section may be conducted only by persons 
 38.11  designated by the agency.  The agency may designate one or more 
 38.12  persons to conduct inspections for all or part of the state.  A 
 38.13  designated inspector may charge a fee for an inspection up to a 
 38.14  maximum amount approved by the agency.  The inspector must be 
 38.15  independent of the owner or manager of the inspected property. 
 38.16     (b) The agency must maintain a list of persons eligible to 
 38.17  conduct housing inspections under this section. 
 38.18     Subd. 6.  [SECTION 8 AND TAX CREDIT UNITS.] (a) The agency 
 38.19  may deem units as meeting the requirements of section 273.126 
 38.20  and this section, if the units either: 
 38.21     (1) are subject to a housing assistance payments contract 
 38.22  under section 8 of the United States Housing Act of 1937, as 
 38.23  amended; or 
 38.24     (2) are rent and income restricted units of a qualified 
 38.25  low-income housing project receiving tax credits under section 
 38.26  42(g) of the Internal Revenue Code of 1986, as amended. 
 38.27     (b) The agency may certify these deemed units under 
 38.28  subdivision 1 based on a simplified application procedure that 
 38.29  verifies the unit's qualifications under paragraph (a). 
 38.30     Subd. 7.  [MONITORING COMPLIANCE.] (a) The agency must 
 38.31  monitor compliance by building owners with the requirements of 
 38.32  section 273.126 and this section.  The agency must annually 
 38.33  conduct on-site examinations of a sample of the buildings 
 38.34  receiving class 4d taxation to monitor compliance.  The agency 
 38.35  may contract with third parties to monitor compliance. 
 38.36     (b) An inspector, designated by the agency under 
 39.1   subdivision 5, shall notify the agency if, in conducting an 
 39.2   inspection under subdivision 4, the inspector finds that: 
 39.3      (1) a unit is receiving class 4d taxation; 
 39.4      (2) the unit is not in compliance with the requirements of 
 39.5   subdivision 4; and 
 39.6      (3) the owner or manager fails or refuses to cure the 
 39.7   violations within a reasonable time after receiving notification 
 39.8   of the violation. 
 39.9      Subd. 8.  [PENALTIES.] (a) The penalties provided by this 
 39.10  subdivision apply to each unit that received class 4d taxation 
 39.11  for a year and failed to meet the requirements of section 
 39.12  273.126 and this section. 
 39.13     (b) If the owner or manager does not comply with the rent 
 39.14  restriction agreement, a penalty applies equal to the lesser of: 
 39.15     (1) the increased taxes that would have been imposed, if 
 39.16  the property had not been classified under class 4d for any year 
 39.17  in which the agreement was violated; or 
 39.18     (2) 150 percent of the rent charged in excess of the rent 
 39.19  restriction agreement. 
 39.20     (c) If the owner or manager does not comply with the income 
 39.21  restrictions or minimum housing quality standards, a penalty 
 39.22  applies equal to the increased taxes that would have been 
 39.23  imposed, if the property had not been classified under class 4d 
 39.24  for any year in which restrictions were violated. 
 39.25     (d) If the agency finds that the violations were 
 39.26  inadvertent and insubstantial, a penalty of $....... per unit 
 39.27  per year applies in lieu of the penalties specified under 
 39.28  paragraphs (b) and (c).  In order to qualify under this 
 39.29  paragraph, violations of the minimum housing quality standards 
 39.30  must be corrected within a reasonable period of time and rent 
 39.31  charged in excess of the agreement must be rebated to the 
 39.32  tenants. 
 39.33     (e) The agency may abate the penalties under this 
 39.34  subdivision for reasonable cause. 
 39.35     (f) Penalties assessed under paragraph (d) are payable to 
 39.36  the agency and must be deposited in the general fund.  If an 
 40.1   owner or manager fails to timely pay a penalty imposed under 
 40.2   paragraph (d), the agency may choose to: 
 40.3      (1) impose the penalty under paragraph (b) or (c); or 
 40.4      (2) certify the penalty under paragraph (d) to the assessor 
 40.5   to be added to and collected under section 273.126. 
 40.6   The agency shall certify to the assessor and county auditor 
 40.7   penalties assessed under paragraphs (b) and (c) and clause (2).  
 40.8   The assessor or auditor shall impose and collect the certified 
 40.9   penalties as additional taxes under section 273.126.  Any 
 40.10  penalty collected under section 273.126 as additional taxes must 
 40.11  be distributed to taxing districts in the same manner as 
 40.12  property taxes on the property. 
 40.13     Subd. 9.  [TAX COURT REVIEW.] (a) An owner may appeal to 
 40.14  tax court as provided in section 271.06: 
 40.15     (1) a denial of a request for certification of a property 
 40.16  as qualifying for class 4d taxation; 
 40.17     (2) imposition of a penalty under this section; or 
 40.18     (3) denial of a request to abate a penalty. 
 40.19     (b) The county attorney shall represent the public in 
 40.20  opposing the appeal. 
 40.21     Subd. 10.  [RULEMAKING.] (a) The agency may adopt 
 40.22  administrative rules under chapter 14 to carry out the 
 40.23  provisions of this section, including establishing standards for 
 40.24  abating penalties, violations that are inadvertent and 
 40.25  insubstantial, selection of inspectors, selection of persons to 
 40.26  monitor compliance, establishing rent restriction agreement 
 40.27  terms, or any other purpose. 
 40.28     (b) The agency may adopt emergency rules under chapter 14.  
 40.29  Any emergency rules adopted under this authority expire on 
 40.30  January 1, 1999. 
 40.31     Sec. 21.  Minnesota Statutes 1996, section 469.040, is 
 40.32  amended by adding a subdivision to read: 
 40.33     Subd. 1a.  [LIMITS FOR EXEMPT HOUSING PROJECTS.] (a) The 
 40.34  provisions of this subdivision apply to housing projects and 
 40.35  housing development projects acquired, constructed, financed, or 
 40.36  refinanced after December 31, 1997. 
 41.1      (b) For a project to qualify for the property tax exemption 
 41.2   under this section, the authority must establish income 
 41.3   guidelines meeting the requirements of paragraph (c). 
 41.4      (c) The housing authority must establish and make good 
 41.5   faith efforts to abide by one of the following income limits for 
 41.6   the housing project: 
 41.7      (1) at least 20 percent of the housing units are occupied 
 41.8   by individuals whose incomes are 50 percent or less of the area 
 41.9   median gross income; or 
 41.10     (2) at least 40 percent of the housing units are occupied 
 41.11  by individuals whose incomes are 60 percent or less of the area 
 41.12  median gross income. 
 41.13     For purposes of this paragraph, the terms defined in 
 41.14  section 42 of the Internal Revenue Code of 1986 apply, except 
 41.15  "median area gross income" means the greater of (1) the median 
 41.16  gross income for the area determined under section 42 of the 
 41.17  Internal Revenue Code of 1986, as amended, or (2) the median 
 41.18  gross income for the state. 
 41.19     (d) The provisions of this subdivision do not apply to all 
 41.20  or part of a housing project that is subject to the requirements 
 41.21  of section 5 of the United States Housing Act of 1937.  
 41.22     Sec. 22.  Minnesota Statutes 1996, section 469.040, 
 41.23  subdivision 3, is amended to read: 
 41.24     Subd. 3.  [STATEMENT FILED WITH ASSESSOR; PERCENTAGE TAX ON 
 41.25  RENTALS.] Notwithstanding the provisions of subdivision 1, after 
 41.26  a housing project or a housing development project carried on 
 41.27  under sections 469.016 to 469.026 has become occupied, in whole 
 41.28  or in part, an authority shall file with the assessor, on or 
 41.29  before April 15 of each year, a statement of the aggregate 
 41.30  shelter rentals of that project collected during the preceding 
 41.31  calendar year.  Unless a greater amount has been agreed upon 
 41.32  between the authority and the governing body or bodies for which 
 41.33  the authority was created, in whose jurisdiction the project is 
 41.34  located, five percent of the aggregate shelter rentals shall be 
 41.35  charged to the authority as a service charge for the services 
 41.36  and facilities to be furnished with respect to that project.  
 42.1   The service charge shall be collected from the authority in the 
 42.2   manner provided by law for the assessment and collection of 
 42.3   taxes.  The amount so collected shall be distributed to the 
 42.4   several taxing bodies in the same proportion as the tax rate of 
 42.5   each bears to the total tax rate of those taxing bodies.  The 
 42.6   governing body or bodies for which the authority has been 
 42.7   created, in whose jurisdiction the project is located, may agree 
 42.8   with the authority for the payment of a service charge for a 
 42.9   housing project or a housing development project in an amount 
 42.10  greater than five percent of the aggregate annual shelter 
 42.11  rentals of any project, upon the basis of shelter rentals or 
 42.12  upon another basis agreed upon.  The service charge may not 
 42.13  exceed the amount which would be payable in taxes were the 
 42.14  property not exempt.  If such an agreement is made, the service 
 42.15  charge so agreed upon shall be collected and distributed in the 
 42.16  manner above provided.  If the project has become occupied, or 
 42.17  if the land upon which the project is to be constructed has been 
 42.18  acquired, the agreement shall specify the location of the 
 42.19  project for which the agreement is made.  "Shelter rental" means 
 42.20  the total rentals of a housing project exclusive of any charge 
 42.21  for utilities and special services such as heat, water, 
 42.22  electricity, gas, sewage disposal, or garbage removal.  "Service 
 42.23  charge" means payment in lieu of taxes.  The records of each 
 42.24  housing project shall be open to inspection by the proper 
 42.25  assessing officer. 
 42.26     Sec. 23.  Minnesota Statutes 1996, section 473F.08, 
 42.27  subdivision 8a, is amended to read: 
 42.28     Subd. 8a.  [FISCAL DISPARITIES ADJUSTMENT.] In any year in 
 42.29  which the highest class rate for class 3a property changes from 
 42.30  the rate in the previous year, the following adjustments shall 
 42.31  be made to the procedures described in sections 473F.06 to 
 42.32  473F.08. 
 42.33     (1) An initial contribution tax capacity shall be 
 42.34  determined for each municipality based on the previous year's 
 42.35  class rates. 
 42.36     (2) Each jurisdiction's distribution tax capacity shall be 
 43.1   determined based upon the areawide tax base determined by 
 43.2   summing the tax capacities computed under clause (1) for all 
 43.3   municipalities and apportioning the resulting sum pursuant to 
 43.4   section 473F.07, subdivision 5. 
 43.5      (3) Each jurisdiction's distribution levy shall be 
 43.6   determined by applying the procedures described in subdivision 
 43.7   3, clause (a), to the distribution tax capacity determined 
 43.8   pursuant to clause (2). 
 43.9      (4) Each municipality's final contribution tax capacity 
 43.10  shall be determined equal to its initial contribution tax 
 43.11  capacity multiplied by the ratio of the new highest class rate 
 43.12  for class 3a property for the forthcoming tax year to the 
 43.13  previous year's highest class rate for class 3a property in the 
 43.14  current year. 
 43.15     (5) For the purposes of computing education aids and any 
 43.16  other state aids requiring the addition of the fiscal 
 43.17  disparities distribution tax capacity to the local tax capacity, 
 43.18  each municipality's final distribution tax capacity shall be 
 43.19  determined equal to its initial distribution tax capacity 
 43.20  multiplied by the ratio of the new highest class rate for class 
 43.21  3a property to the previous year's highest class rate for class 
 43.22  3a property. 
 43.23     (6) The areawide tax rate shall be determined by dividing 
 43.24  the sum of the amounts determined in clause (3) by the sum of 
 43.25  the values determined in clause (4). 
 43.26     (7) The final contribution tax capacity determined in 
 43.27  clause (4) shall also be used to determined the portion of each 
 43.28  commercial/industrial property's tax capacity subject to the 
 43.29  areawide tax rate pursuant to subdivision 6. 
 43.30     (3) All other computations shall be made as described in 
 43.31  sections 473.06 to 473F.08, using the final contribution tax 
 43.32  capacity amounts determined in paragraph (2). 
 43.33     Sec. 24.  Minnesota Statutes 1996, section 477A.011, 
 43.34  subdivision 34, is amended to read: 
 43.35     Subd. 34.  [CITY REVENUE NEED.] (a) For a city with a 
 43.36  population equal to or greater than 2,500, "city revenue need" 
 44.1   is the sum of (1) 3.462312 times the pre-1940 housing 
 44.2   percentage; plus (2) 2.093826 times the commercial industrial 
 44.3   percentage; plus (3) 6.862552 times the population decline 
 44.4   percentage; plus (4) .00026 times the city population; plus (5) 
 44.5   152.0141. 
 44.6      (b) For a city with a population less than 2,500, "city 
 44.7   revenue need" is the average of (a) the sum of (1) 1.795919 
 44.8   times the pre-1940 housing percentage; plus (2) 1.562138 times 
 44.9   the commercial industrial percentage; plus (3) 4.177568 times 
 44.10  the population decline percentage; plus (4) 1.04013 times the 
 44.11  transformed population; minus (5) 107.475, and (b) the sum of 
 44.12  the city's revenue base for 1996, 1997, and 1998 divided by 
 44.13  three, multiplied by 1.06 and divided by its population. 
 44.14     (c) The city revenue need cannot be less than zero. 
 44.15     (d) The city revenue need for a city under paragraphs (a) 
 44.16  and (b) is increased by 15 percent if the city is either (i) a 
 44.17  city in the metropolitan area that is contiguous to a city of 
 44.18  the first class or contiguous to a city that is contiguous to a 
 44.19  city of the first class and the city has a median income of 
 44.20  $50,000 or less as reported in the most recent federal census, 
 44.21  or (ii) a city outside the metropolitan area with a population 
 44.22  of 5,000 or more.  Cities of the first class do not qualify for 
 44.23  the adjustment under this clause.  
 44.24     (e) For calendar year 1995 1998 and subsequent years, the 
 44.25  city revenue need for a city, as determined in paragraphs (a) 
 44.26  to (c) (d), is multiplied by the ratio of the annual implicit 
 44.27  price deflator for state and local government purchases, as 
 44.28  prepared by the United States Department of Commerce, for the 
 44.29  most recently available year to the 1993 implicit price deflator 
 44.30  for state and local government purchases. 
 44.31     Sec. 25.  Minnesota Statutes 1996, section 477A.011, 
 44.32  subdivision 37, is amended to read: 
 44.33     Subd. 37.  [BASE REDUCTION PERCENTAGE.] "Base reduction 
 44.34  percentage" is (1) the difference between (a) the amount 
 44.35  available for city aid under section 477A.03 for the year for 
 44.36  which aid is being calculated and (b) the sum of the amount 
 45.1   available for city aid under section 477A.03 for calendar 
 45.2   year 1994 1997 and the total amount of the homestead and 
 45.3   agricultural credit aid reduction under section 273.1398, 
 45.4   subdivision 2f, (2) divided by the sum of the city aid base for 
 45.5   all cities and (3) multiplied by 100.  The reduction percentage 
 45.6   for any year may not be less than the reduction percentage from 
 45.7   the previous year.  For aid paid in calendar year 1994, the 
 45.8   reduction percentage is zero.  The reduction percentage may not 
 45.9   be more than 100 percent. 
 45.10     Sec. 26.  Minnesota Statutes 1996, section 477A.013, 
 45.11  subdivision 9, is amended to read: 
 45.12     Subd. 9.  [CITY AID DISTRIBUTION.] (a) In calendar year 
 45.13  1994 1998 and thereafter, each city shall receive an aid 
 45.14  distribution equal to the sum of (1) the city formula aid under 
 45.15  subdivision 8, and (2) its city aid base multiplied by a 
 45.16  percentage equal to 100 minus the base reduction percentage. 
 45.17     (b) The percentage increase for a first class city in 
 45.18  calendar year 1995 and thereafter shall not exceed the 
 45.19  percentage increase in the sum of the aid to all cities under 
 45.20  this section in the current calendar year compared to the sum of 
 45.21  the aid to all cities in the previous year. 
 45.22     (c) The total aid for any city, except a first class city, 
 45.23  shall not exceed the sum of (1) ten percent of the city's net 
 45.24  levy for the year prior to the aid distribution plus (2) its 
 45.25  total aid in the previous year before any increases or decreases 
 45.26  under sections 16A.711, subdivision 5, and 477A.0132. 
 45.27     (d) Notwithstanding paragraph (c), in 1995 only, for cities 
 45.28  which in 1992 or 1993 transferred an amount from governmental 
 45.29  funds to their sewer and water fund in an amount greater than 
 45.30  their net levy for taxes payable in the year in which the 
 45.31  transfer occurred, the total aid shall not exceed the sum of (1) 
 45.32  20 percent of the city's net levy for the year prior to the aid 
 45.33  distribution plus (2) its total aid in the previous year before 
 45.34  any increases or decreases under sections 16A.711, subdivision 
 45.35  5, and 477A.0132 No city may receive an aid distribution that is 
 45.36  less than $5 multiplied by the city's population. 
 46.1      Sec. 27.  Minnesota Statutes 1996, section 477A.03, 
 46.2   subdivision 2, is amended to read: 
 46.3      Subd. 2.  [ANNUAL APPROPRIATION.] A sum sufficient to 
 46.4   discharge the duties imposed by sections 477A.011 to 477A.014 is 
 46.5   annually appropriated from the general fund to the commissioner 
 46.6   of revenue.  For aids payable in 1996 1998 and thereafter, the 
 46.7   total aids paid under sections 477A.013, subdivision 9 
 46.8   477A.0121, and 477A.0122 are the amounts certified to be paid in 
 46.9   the previous year, adjusted for inflation as provided under 
 46.10  subdivision 3.  Aid payments to counties under section 477A.0121 
 46.11  are limited to $20,265,000 in 1996.  Aid payments to counties 
 46.12  under section 477A.0121 are limited to $27,571,625 in 
 46.13  1997 cities under section 477A.013, subdivision 9 are limited to 
 46.14  the sum of (a) the amount certified in the previous year 
 46.15  adjusted for twice the inflation provided for under subdivision 
 46.16  3 and (b) the total amount of the homestead and agricultural 
 46.17  credit aid reduction under section 273.1398, subdivision 2f for 
 46.18  aids payable in 1998.  For aid payable in 1998 1999 and 
 46.19  thereafter, the total aids paid under section 477A.0121 
 46.20  477A.013, subdivision 9, are the amounts certified to be paid in 
 46.21  the previous year, adjusted for inflation as provided under 
 46.22  subdivision 3. 
 46.23     Sec. 28.  [TEMPORARY EXEMPTIONS FROM INSPECTION 
 46.24  REQUIREMENTS.] 
 46.25     (a) The Minnesota housing finance agency may provide a 
 46.26  temporary exemption to the inspection requirement under 
 46.27  Minnesota Statutes, sections 273.126, subdivision 4, and 
 46.28  462A.071, if the agency finds that: 
 46.29     (1) the property owner made a good faith effort to obtain 
 46.30  an inspection; and 
 46.31     (2) the owner was unable to obtain an inspection in time to 
 46.32  apply because the designated inspectors were unable to conduct 
 46.33  all the requested inspections. 
 46.34     (b) If a unit that is exempted under this section does not 
 46.35  ultimately obtain a certification from a designated inspector 
 46.36  that it is in compliance with the minimum housing quality 
 47.1   standards, the additional taxes under Minnesota Statutes, 
 47.2   section 273.126, subdivision 5, apply. 
 47.3      (c) Procedures or rules for granting exemptions under this 
 47.4   section are not subject to the administrative rulemaking under 
 47.5   Minnesota Statutes, chapter 14. 
 47.6      (d) The authority under this section expires December 31, 
 47.7   2000. 
 47.8      Sec. 29.  [APPROPRIATION.] 
 47.9      (a) $500,000 is appropriated for fiscal years 1998 and 1999 
 47.10  from the general fund to the housing finance agency for purposes 
 47.11  of administering the certification of qualifying low-income 
 47.12  residential properties for property taxation under class 4d. 
 47.13     (b) $2,000,000 is appropriated for fiscal year 1998 to the 
 47.14  commissioner of revenue for distribution to the 87 counties for 
 47.15  implementing the various provisions of this act, including the 
 47.16  added expenses of the truth in taxation provisions.  The 
 47.17  commissioner shall develop a formula for distribution of the 
 47.18  total amount to the counties. 
 47.19     Sec. 30.  [REPEALER.] 
 47.20     (a) Minnesota Statutes 1996, section 124.2134, is repealed. 
 47.21     (b) Minnesota Statutes 1996, section 273.13, subdivision 
 47.22  32, is repealed. 
 47.23     (c) Minnesota Statutes 1996, sections 273.1317; and 
 47.24  273.1318, are repealed. 
 47.25     (d) Minnesota Statutes 1996, section 290A.03, subdivisions 
 47.26  12a and 14, are repealed. 
 47.27     Sec. 31.  [EFFECTIVE DATE.] 
 47.28     Sections 1, 2, and 30, paragraph (c), are effective for 
 47.29  property taxes payable in 1999.  Sections 4, 5 to 7, 13, and 30, 
 47.30  paragraph (b), are effective for taxes payable in 1998 and 
 47.31  thereafter, except the low-income housing provisions in class 4c 
 47.32  and 4d are effective for taxes payable in 1999 and thereafter.  
 47.33  Sections 8 to 12, 24 to 27, and 30, paragraph (a), are effective 
 47.34  for aids payable in 1998 and subsequent years.  
 47.35     Sections 17 to 19 and 30, paragraph (d) are effective 
 47.36  beginning for property tax refunds based on rent paid after 
 48.1   December 31, 1996.  Sections 20, 28, and 29 are effective the 
 48.2   day following final enactment.  Sections 21 and 22 are effective 
 48.3   August 1, 1997. 
 48.4                              ARTICLE 2 
 48.5                       EDUCATION FINANCE REFORM 
 48.6      Section 1.  Minnesota Statutes 1996, section 124.239, is 
 48.7   amended by adding a subdivision to read: 
 48.8      Subd. 4a.  [ALTERNATIVE FACILITIES REVENUE.] A district's 
 48.9   alternative facilities revenue for a fiscal year equals its 
 48.10  costs related to an approved facility plan as follows: 
 48.11     (1) if the district has indicated to the commissioner that 
 48.12  bonds will be issued, the principal and interest payments on 
 48.13  outstanding bonds issued according to subdivision 3; or 
 48.14     (2) if the district has indicated to the commissioner that 
 48.15  the plan will be funded on a pay-as-you-go basis, the district's 
 48.16  costs according to the schedule approved in the plan. 
 48.17     Sec. 2.  Minnesota Statutes 1996, section 124.239, 
 48.18  subdivision 5, is amended to read: 
 48.19     Subd. 5.  [LEVY AUTHORIZED.] A district, after local board 
 48.20  approval, may levy for costs related to an approved facility 
 48.21  plan as follows:  
 48.22     (a) if the district has indicated to the commissioner that 
 48.23  bonds will be issued, the district may levy for the principal 
 48.24  and interest payments on outstanding bonds issued according to 
 48.25  subdivision 3; or 
 48.26     (b) if the district has indicated to the commissioner that 
 48.27  the plan will be funded through levy, the district may levy 
 48.28  according to the schedule approved in the plan To obtain 
 48.29  alternative facilities revenue, a school district may levy an 
 48.30  amount equal to the district's alternative facilities revenue as 
 48.31  defined in subdivision 4a, multiplied by the lesser of one, or 
 48.32  the ratio of the quotient derived by dividing the adjusted net 
 48.33  tax capacity of the district for the year before the year the 
 48.34  levy is certified by the actual pupil units in the district for 
 48.35  the school year to which the levy is attributable, to the 
 48.36  equalizing factor under section 124A.02. 
 49.1      Sec. 3.  Minnesota Statutes 1996, section 124.239, is 
 49.2   amended by adding a subdivision to read: 
 49.3      Subd. 5a.  [ALTERNATIVE FACILITIES AID.] A district's 
 49.4   alternative facilities aid is the difference between its 
 49.5   alternative facilities revenue and its alternative facilities 
 49.6   levy.  If a district does not levy the entire amount permitted, 
 49.7   alternative facilities aid must be reduced in proportion to the 
 49.8   actual amount levied. 
 49.9      Sec. 4.  Minnesota Statutes 1996, section 124.2601, 
 49.10  subdivision 2, is amended to read: 
 49.11     Subd. 2.  [PROGRAMS FUNDED.] Adult basic education programs 
 49.12  established under section 124.26 and approved by the 
 49.13  commissioner are eligible for revenue aid under this section. 
 49.14     Sec. 5.  Minnesota Statutes 1996, section 124.2601, 
 49.15  subdivision 3, is amended to read: 
 49.16     Subd. 3.  [AID.] Adult basic education aid for each 
 49.17  approved program equals the sum of 65 percent of the general 
 49.18  education formula allowance times the number of full-time 
 49.19  equivalent students in its adult basic education program and an 
 49.20  amount equal to .12 percent times the district's adjusted net 
 49.21  tax capacity for assessment year 1997. 
 49.22     Sec. 6.  Minnesota Statutes 1996, section 124.2711, 
 49.23  subdivision 1, is amended to read: 
 49.24     Subdivision 1.  [REVENUE AID.] The revenue State aid for 
 49.25  early childhood family education programs for a school district 
 49.26  equals $101.25 for 1993 and later fiscal years times the greater 
 49.27  of: 
 49.28     (1) 150; or 
 49.29     (2) the number of people under five years of age residing 
 49.30  in the school district on October 1 of the previous school year. 
 49.31     Sec. 7.  Minnesota Statutes 1996, section 124.2711, 
 49.32  subdivision 5, is amended to read: 
 49.33     Subd. 5.  [HOME VISITING LEVY AID.] A school district that 
 49.34  enters into a collaborative agreement to provide education 
 49.35  services and social services to families with young children may 
 49.36  levy an amount is eligible for state aid equal to $1.60 times 
 50.1   the number of people under five years of age residing in the 
 50.2   district on September 1 of the last school year.  Levy revenue 
 50.3   under this subdivision shall not be included as revenue under 
 50.4   subdivision 1.  The revenue shall be used for home visiting 
 50.5   programs under section 121.882, subdivision 2b. 
 50.6      Sec. 8.  Minnesota Statutes 1996, section 124.2713, 
 50.7   subdivision 1, is amended to read: 
 50.8      Subdivision 1.  [TOTAL COMMUNITY EDUCATION REVENUE.] 
 50.9   Community education revenue equals the sum of a district's 
 50.10  general community education revenue and youth service program 
 50.11  revenue.  Community education revenue is provided entirely 
 50.12  through state aid. 
 50.13     Sec. 9.  Minnesota Statutes 1996, section 124.2714, is 
 50.14  amended to read: 
 50.15     124.2714 [ADDITIONAL COMMUNITY EDUCATION REVENUE.] 
 50.16     (a) A district that is eligible under section 124.2713, 
 50.17  subdivision 2, may levy an amount up is eligible for aid equal 
 50.18  to the amount of revenue authorized by Minnesota Statutes 1986, 
 50.19  section 275.125, subdivision 8, clause (2).  
 50.20     (b) Beginning with levies revenue for fiscal year 1995, 
 50.21  this levy revenue must be reduced each year by the amount of any 
 50.22  increase in the levying district's general community education 
 50.23  revenue under section 124.2713, subdivision 3, for that fiscal 
 50.24  year over the amount received by the district under section 
 50.25  124.2713, subdivision 3, for fiscal year 1994. 
 50.26     (c) The proceeds of the levy revenue may be used for the 
 50.27  purposes set forth in section 124.2713, subdivision 8. 
 50.28     Sec. 10.  Minnesota Statutes 1996, section 124.2715, 
 50.29  subdivision 1, is amended to read: 
 50.30     Subdivision 1.  [REVENUE AMOUNT.] A district that is 
 50.31  eligible according to section 124.2713, subdivision 2, may 
 50.32  receive revenue for a program for adults with disabilities.  
 50.33  Revenue for the program for adults with disabilities for a 
 50.34  district or a group of districts equals the lesser of:  
 50.35     (1) the actual expenditures for approved programs and 
 50.36  budgets; or 
 51.1      (2) $60,000.  
 51.2      Revenue is provided through state aid. 
 51.3      Sec. 11.  Minnesota Statutes 1996, section 124.2716, 
 51.4   subdivision 2, is amended to read: 
 51.5      Subd. 2.  [EXTENDED DAY REVENUE.] The extended day revenue 
 51.6   for an eligible school district equals the approved additional 
 51.7   cost of providing services to children with disabilities or 
 51.8   children experiencing family or related problems of a temporary 
 51.9   nature who participate in the extended day program.  Extended 
 51.10  day revenue is provided through state aid. 
 51.11     Sec. 12.  [124.913] [LEASE PURCHASE; INSTALLMENT BUYS.] 
 51.12     Subdivision 1.  [LEASE PURCHASE; INSTALLMENT BUYS.] (a) 
 51.13  Upon application to, and approval by, the commissioner in 
 51.14  accordance with the procedures and limits in section 124.91, 
 51.15  subdivision 1, a district, as defined in this subdivision, may: 
 51.16     (1) purchase real or personal property under an installment 
 51.17  contract; or 
 51.18     (2) may lease real or personal property with an option to 
 51.19  purchase under a lease purchase agreement, by which installment 
 51.20  contract or lease purchase agreement title is kept by the seller 
 51.21  or vendor or assigned to a third party as security for the 
 51.22  purchase price, including interest, if any. 
 51.23     (b) The obligation created by the installment contract or 
 51.24  the lease purchase agreement must not be included in the 
 51.25  calculation of net debt for purposes of section 475.53, and does 
 51.26  not constitute debt under other law.  An election is not 
 51.27  required in connection with the execution of the installment 
 51.28  contract or the lease purchase agreement. 
 51.29     (c) The proceeds of the revenue authorized by this section 
 51.30  must not be used to acquire a facility to be primarily used for 
 51.31  athletic or school administration purposes. 
 51.32     (d) For purposes of this subdivision, "district" means: 
 51.33     (1) a school district required to have a comprehensive plan 
 51.34  for the elimination of segregation whose plan has been 
 51.35  determined by the commissioner to be in compliance with the 
 51.36  state board of education rules relating to equality of 
 52.1   educational opportunity and school desegregation; or 
 52.2      (2) a school district that participates in a joint program 
 52.3   for interdistrict desegregation with a district defined in 
 52.4   clause (1), if the facility acquired under this subdivision is 
 52.5   to be primarily used for the joint program. 
 52.6      (e) Notwithstanding section 124.91, subdivision 1, the 
 52.7   prohibition against a levy by a district to lease or rent a 
 52.8   district-owned building to itself does not apply to levies 
 52.9   otherwise authorized by this subdivision. 
 52.10     (f) For the purposes of this subdivision, any references in 
 52.11  section 124.91, subdivision 1, to building or land shall include 
 52.12  personal property. 
 52.13     Subd. 2.  [LEASE PURCHASE; INSTALLMENT BUYS REVENUE.] A 
 52.14  district's lease purchase and installment buys revenue for a 
 52.15  fiscal year equals the amount needed to make payments required 
 52.16  by a lease purchase agreement, installment purchase agreement, 
 52.17  or other deferred payment agreement: 
 52.18     (1) that was authorized by Minnesota Statutes 1989 
 52.19  Supplement, section 465.71, if: 
 52.20     (i) the agreement was approved by the commissioner before 
 52.21  July 1, 1990, according to Minnesota Statutes 1989 Supplement, 
 52.22  section 275.125, subdivision 11d; or 
 52.23     (ii) the district levied in 1989 for the payments; or 
 52.24     (2) authorized by subdivision 1, or Minnesota Statutes 
 52.25  1996, section 124.91, subdivision 7. 
 52.26     Subd. 3.  [LEASE PURCHASE AND INSTALLMENT BUYS LEVY.] To 
 52.27  receive lease purchase and installment buys revenue, a school 
 52.28  district may levy an amount equal to the district's lease 
 52.29  purchase and installment buys revenue as defined in subdivision 
 52.30  2, multiplied by the lesser of one, or the ratio of the quotient 
 52.31  derived by dividing the adjusted net tax capacity of the 
 52.32  district for the year before the year the levy is certified by 
 52.33  the actual pupil units in the district for the school year to 
 52.34  which the levy is attributable, to the equalizing factor under 
 52.35  section 124A.02. 
 52.36     Subd. 4.  [LEASE PURCHASE AND INSTALLMENT BUYS AID.] A 
 53.1   district's lease purchase and installment buys aid is the 
 53.2   difference between its lease purchase and installment buys 
 53.3   revenue and its lease purchase and installment buys levy.  If a 
 53.4   district does not levy the entire amount permitted, lease 
 53.5   purchase and installment buys aid must be reduced in proportion 
 53.6   to the actual amount levied. 
 53.7      Sec. 13.  Minnesota Statutes 1996, section 124.95, 
 53.8   subdivision 1, is amended to read: 
 53.9      Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
 53.10  section, the eligible debt service revenue of a district is 
 53.11  defined as follows: 
 53.12     (1) the amount needed to produce between five and six 
 53.13  percent in excess of the amount needed to meet when due the 
 53.14  principal and interest payments on the obligations of the 
 53.15  district for eligible projects according to subdivision 2, 
 53.16  including the amounts necessary for repayment of energy loans 
 53.17  according to section 216C.37 or sections 298.292 to 298.298, 
 53.18  debt service loans and capital loans, lease purchase payments 
 53.19  under section 124.91, subdivisions 2 and 3, alternative 
 53.20  facilities levies under section 124.239, subdivision 5, minus 
 53.21     (2) the amount of debt service excess levy reduction for 
 53.22  that school year calculated according to the procedure 
 53.23  established by the commissioner. 
 53.24     (b) The obligations in this paragraph are excluded from 
 53.25  eligible debt service revenue: 
 53.26     (1) obligations under section 124.2445; 
 53.27     (2) the part of debt service principal and interest paid 
 53.28  from the taconite environmental protection fund or northeast 
 53.29  Minnesota economic protection trust; 
 53.30     (3) obligations issued under Laws 1991, chapter 265, 
 53.31  article 5, section 18, as amended by Laws 1992, chapter 499, 
 53.32  article 5, section 24; and 
 53.33     (4) obligations under section 124.2455. 
 53.34     (c) For purposes of this section, if a preexisting school 
 53.35  district reorganized under section 122.22, 122.23, or 122.241 to 
 53.36  122.248 is solely responsible for retirement of the preexisting 
 54.1   district's bonded indebtedness, capital loans or debt service 
 54.2   loans, debt service equalization aid must be computed separately 
 54.3   for each of the preexisting school districts. 
 54.4      Sec. 14.  Minnesota Statutes 1996, section 124A.23, 
 54.5   subdivision 1, is amended to read: 
 54.6      Subdivision 1.  [GENERAL EDUCATION TAX RATE.] The 
 54.7   commissioner shall establish the general education tax rate by 
 54.8   July 1 of each year for levies payable in the following year.  
 54.9   The general education tax capacity rate shall be a rate, rounded 
 54.10  up to the nearest tenth of a percent, that, when applied to the 
 54.11  adjusted net tax capacity for all districts, raises the amount 
 54.12  specified in this subdivision.  The general education tax rate 
 54.13  shall be the rate that raises $1,054,000,000 for fiscal year 
 54.14  1996 and $1,359,000,000 for fiscal year 1997 1998 and 
 54.15  $1,368,000,000 for fiscal year 1999, and $1,482,300,000 for 
 54.16  fiscal year 2000 and later fiscal years.  The general education 
 54.17  tax rate may not be changed due to changes or corrections made 
 54.18  to a district's adjusted net tax capacity after the tax rate has 
 54.19  been established.  
 54.20     Sec. 15.  [GENERAL EDUCATION LEVY REDUCTION.] 
 54.21     Notwithstanding the provisions of Minnesota Statutes, 
 54.22  section 124A.23, subdivision 1, the general education levy shall 
 54.23  be reduced by $210,000,000 for taxes payable in 1998 and 
 54.24  $250,000,000 for taxes payable in 1999.  $82,500,000 in fiscal 
 54.25  year 1999 and $123,000,000 in fiscal year 2000 is appropriated 
 54.26  from the property tax reform account established in article 12, 
 54.27  section 2, to the commissioner of children, families, and 
 54.28  learning to offset a portion of the costs of the levy reductions 
 54.29  contained in this section.  $106,500,000 in fiscal year 1999 and 
 54.30  $102,000,000 in fiscal year 2000 is appropriated from the 
 54.31  general fund to the commissioner of children, families, and 
 54.32  learning to offset the remaining costs of the levy reductions 
 54.33  contained in this section. 
 54.34     Sec. 16.  [FISCAL YEAR 1998 SHIFT COST.] 
 54.35     $30,800,000 is appropriated in fiscal year 1998 from the 
 54.36  general fund to the commissioner of children, families, and 
 55.1   learning for additional general education aid as a result of the 
 55.2   property tax revenue recognition shift and the reduction of the 
 55.3   general education levy for property taxes payable in 1998. 
 55.4      Sec. 17.  [CALENDAR YEAR 1997 REFERENDUM REVENUE LIMIT.] 
 55.5      (a) Notwithstanding any law to the contrary, a school 
 55.6   district may not conduct a referendum under section 124A.03 from 
 55.7   the effective date of this act to December 31, 1997 unless the 
 55.8   commissioner of children, families and learning has authorized 
 55.9   the election. 
 55.10     (b) Elections to renew existing referendum revenue 
 55.11  authority in amounts not to exceed the current level of 
 55.12  referendum revenue authority per pupil unit are exempt from the 
 55.13  limit and requirements of this section. 
 55.14     (c) The aggregate amount of referendum revenue authorized 
 55.15  for referendum elections by the commissioner under this section 
 55.16  may not exceed $16,500,000. 
 55.17     (d) A school district that desires to hold an election 
 55.18  under Minnesota Statutes, section 124A.03, must submit an 
 55.19  application to the commissioner by August 1, 1997. 
 55.20     (e) The commissioner shall prioritize applications and 
 55.21  grant authority to hold an election to districts in the 
 55.22  following order: 
 55.23     (1) districts without authority for an operating referendum 
 55.24  under Minnesota Statutes, section 124A.03 or districts that can 
 55.25  document a financial hardship; and 
 55.26     (2) districts that are in statutory operating debt and have 
 55.27  an approved plan or have received an extension from the 
 55.28  commissioner to file a plan to eliminate the statutory operating 
 55.29  debt. 
 55.30     (f) The commissioner must approve, deny or modify each 
 55.31  district's application for authority to hold a referendum 
 55.32  election authority by August 31, 1997.  Copies of each 
 55.33  application shall be forwarded to the chairs of the house and 
 55.34  senate education finance committees and the chairs of the house 
 55.35  and senate tax committees, with a notation as to whether the 
 55.36  commissioner approved, denied, or modified the application. 
 56.1      Sec. 18.  [REPEALER.] 
 56.2      (a) Minnesota Statutes 1996, section 124.91, subdivisions 2 
 56.3   and 7, are repealed. 
 56.4      (b) Minnesota Statutes 1996, sections 124.2601, 
 56.5   subdivisions 4, 5, and 6; 124.2711, subdivisions 2a and 3; 
 56.6   124.2713, subdivisions 6, 6a, 6b, and 7; 124.2715, subdivisions 
 56.7   2 and 3; 124.2716, subdivisions 3 and 4, are repealed for 
 56.8   revenue for fiscal year 2000 and later. 
 56.9      Sec. 19.  [EFFECTIVE DATE.] 
 56.10     Sections 1, 2, 3, 12, 13, 15, and 18, paragraph (a), are 
 56.11  effective beginning in fiscal year 1999.  Sections 4 to 11, 14, 
 56.12  and 18, paragraph (b), are effective beginning in fiscal year 
 56.13  2000.  Section 16 is effective for fiscal year 1998. 
 56.14                             ARTICLE 3
 56.15                            PROPERTY TAX
 56.16     Section 1.  Minnesota Statutes 1996, section 69.021, 
 56.17  subdivision 7, is amended to read: 
 56.18     Subd. 7.  [APPORTIONMENT OF FIRE STATE AID TO 
 56.19  MUNICIPALITIES AND RELIEF ASSOCIATIONS.] (a) The commissioner 
 56.20  shall apportion the fire state aid relative to the premiums 
 56.21  reported on the Minnesota Firetown Premium Reports filed under 
 56.22  this chapter to each municipality and/or firefighters' relief 
 56.23  association.  
 56.24     (b) The commissioner shall calculate an initial fire state 
 56.25  aid allocation amount for each municipality or fire department 
 56.26  under paragraph (c) and a minimum fire state aid allocation 
 56.27  amount for each municipality or fire department under paragraph 
 56.28  (d).  The municipality or fire department must receive the 
 56.29  larger fire state aid amount. 
 56.30     (c) The initial fire state aid allocation amount is the 
 56.31  amount available for apportionment as fire state aid under 
 56.32  subdivision 5, without inclusion of any additional funding 
 56.33  amount to support a minimum fire state aid amount under section 
 56.34  423A.02, subdivision 3, allocated one-half in proportion to the 
 56.35  population as shown in the last official statewide federal 
 56.36  census for each fire town and one-half in proportion to the 
 57.1   market value of each fire town, including (1) the market value 
 57.2   of tax exempt property and (2) the market value of natural 
 57.3   resources lands receiving in lieu payments under sections 
 57.4   477A.11 to 477A.14, but excluding the market value of minerals.  
 57.5   In the case of incorporated or municipal fire departments 
 57.6   furnishing fire protection to other cities, towns, or townships 
 57.7   as evidenced by valid fire service contracts filed with the 
 57.8   commissioner, the distribution must be adjusted proportionately 
 57.9   to take into consideration the crossover fire protection 
 57.10  service.  Necessary adjustments shall be made to subsequent 
 57.11  apportionments.  In the case of municipalities or independent 
 57.12  fire departments qualifying for the aid, the commissioner shall 
 57.13  calculate the state aid for the municipality or relief 
 57.14  association on the basis of the population and the market value 
 57.15  of the area furnished fire protection service by the fire 
 57.16  department as evidenced by duly executed and valid fire service 
 57.17  agreements filed with the commissioner.  If one or more fire 
 57.18  departments are furnishing contracted fire service to a city, 
 57.19  town, or township, only the population and market value of the 
 57.20  area served by each fire department may be considered in 
 57.21  calculating the state aid and the fire departments furnishing 
 57.22  service shall enter into an agreement apportioning among 
 57.23  themselves the percent of the population and the market value of 
 57.24  each service area.  The agreement must be in writing and must be 
 57.25  filed with the commissioner. 
 57.26     (d) The minimum fire state aid allocation amount is the 
 57.27  amount in addition to the initial fire state allocation amount 
 57.28  that is derived from any additional funding amount to support a 
 57.29  minimum fire state aid amount under section 423A.02, subdivision 
 57.30  3, and allocated to municipalities with volunteer firefighter 
 57.31  relief associations based on the number of active volunteer 
 57.32  firefighters who are members of the relief association as 
 57.33  reported in the annual financial reporting for the calendar year 
 57.34  1993 to the office of the state auditor, but not to exceed 30 
 57.35  active volunteer firefighters, so that all municipalities or 
 57.36  fire departments with volunteer firefighter relief associations 
 58.1   receive in total at least a minimum fire state aid amount per 
 58.2   1993 active volunteer firefighter to a maximum of 30 
 58.3   firefighters. 
 58.4      (e) The fire state aid must be paid to the treasurer of the 
 58.5   municipality where the fire department is located and the 
 58.6   treasurer of the municipality shall, within 30 days of receipt 
 58.7   of the fire state aid, transmit the aid to the relief 
 58.8   association if the relief association has filed a financial 
 58.9   report with the treasurer of the municipality and has met all 
 58.10  other statutory provisions pertaining to the aid apportionment. 
 58.11     (f) The commissioner may make rules to permit the 
 58.12  administration of the provisions of this section.  Any 
 58.13  adjustments needed to correct prior misallocations must be made 
 58.14  to subsequent apportionments. 
 58.15     Sec. 2.  Minnesota Statutes 1996, section 93.41, is amended 
 58.16  to read: 
 58.17     93.41 [STATE-OWNED IRON-BEARING MATERIALS.] 
 58.18     Subdivision 1.  [USE FOR ROAD CONSTRUCTION AND OTHER 
 58.19  PURPOSES.] In case the commissioner of natural resources shall 
 58.20  determine that any paint rock, taconite, or other iron-bearing 
 58.21  material belonging to the state and containing not more than 45 
 58.22  percent dried iron by analysis is needed and suitable for use in 
 58.23  the construction or maintenance of any road, tailings basin, 
 58.24  settling basin, dike, dam, bank fill, or other works on public 
 58.25  or private property, and that such use would be in the best 
 58.26  interests of the public, the commissioner may authorize the 
 58.27  disposal of such material therefor as hereinafter provided.  
 58.28     Subd. 2.  [MATERIALS SUBJECT TO STATE IRON ORE MINING 
 58.29  LEASE.] If such material is subject to an existing state iron 
 58.30  ore mining lease or located on property subject to an existing 
 58.31  state iron ore mining lease, the commissioner, by written 
 58.32  agreement with the holder of the lease, may authorize the use of 
 58.33  the material for any purpose specified in subdivision 1 that 
 58.34  will facilitate the mining and disposal of the iron ore therein 
 58.35  on such terms as the commissioner may prescribe consistent with 
 58.36  the interests of the state, or may authorize the holder of the 
 59.1   lease to dispose of the material otherwise for any purpose 
 59.2   specified in subdivision 1 upon payment of an amount therefor 
 59.3   equivalent to the royalty that would be payable under the terms 
 59.4   of the lease if the material were shipped or otherwise disposed 
 59.5   of as iron ore, but not less than the applicable minimum rate 
 59.6   prescribed by section 93.20.  
 59.7      Subd. 3.  [ISSUANCE OF LEASES, ROYALTIES.] If such 
 59.8   material, whether in the ground or in stockpile, is not subject 
 59.9   to an existing lease, the commissioner may issue leases for the 
 59.10  taking and removal thereof for the purposes specified in 
 59.11  subdivision 1 in like manner as provided by section 92.50 for 
 59.12  leases for the taking and removal of sand, gravel, and other 
 59.13  materials specified in said section, and subject to all the 
 59.14  provisions thereof, so far as applicable; provided, that the 
 59.15  amount payable for such material shall be at least equivalent to 
 59.16  the minimum royalty that would be payable therefor under the 
 59.17  provisions of section 93.20.  
 59.18     Subd. 4.  [SALE OF STOCKPILED IRON-BEARING MATERIAL IN 
 59.19  PLACE.] If such material is in stockpile and is not subject to 
 59.20  an existing lease, the commissioner may sell stockpiled 
 59.21  iron-bearing material in place.  The sale must be to a person 
 59.22  holding an interest in the surface of the property upon which 
 59.23  the stockpile is located or to a person holding an interest in 
 59.24  publicly or privately owned stockpiled iron-bearing material 
 59.25  located in the same stockpile.  
 59.26     Sec. 3.  Minnesota Statutes 1996, section 103D.905, 
 59.27  subdivision 4, is amended to read: 
 59.28     Subd. 4.  [BOND FUND.] A bond fund consists of the proceeds 
 59.29  of special assessments, storm water charges, loan repayments, 
 59.30  and ad valorem tax levies pledged by the watershed district for 
 59.31  the payment of bonds or notes issued by the watershed district 
 59.32  secured by the property of the watershed district that is 
 59.33  producing or is likely to produce a regular income.  The bond 
 59.34  fund is to be used for the payment of the purchase price of the 
 59.35  property or the value of the property as determined by the court 
 59.36  in proper proceedings and for the improvement and development of 
 60.1   the property principal of, premium or administrative surcharge, 
 60.2   if any, and interest on the bonds and notes issued by the 
 60.3   watershed district and for payments required to be made to the 
 60.4   federal government under section 148(f) of the Internal Revenue 
 60.5   Code of 1986, as amended.  
 60.6      Sec. 4.  Minnesota Statutes 1996, section 103D.905, 
 60.7   subdivision 5, is amended to read: 
 60.8      Subd. 5.  [CONSTRUCTION OR IMPLEMENTATION FUND.] (a) A 
 60.9   construction or implementation fund consists of:  
 60.10     (1) the proceeds of watershed district bonds or notes or of 
 60.11  the sale of county bonds; 
 60.12     (2) construction or implementation loans from the pollution 
 60.13  control agency under sections 103F.701 to 103F.761, or from any 
 60.14  agency of the federal government; and 
 60.15     (3) special assessments, storm water charges, loan 
 60.16  repayments, and ad valorem tax levies levied or to be levied to 
 60.17  supply funds for the construction or implementation of the 
 60.18  projects of the watershed district, including reservoirs, 
 60.19  ditches, dikes, canals, channels, storm water facilities, sewage 
 60.20  treatment facilities, wells, and other works, and the expenses 
 60.21  incident to and connected with the construction or 
 60.22  implementation. 
 60.23     (b) Construction or implementation loans from the pollution 
 60.24  control agency under sections 103F.701 to 103F.761, or from an 
 60.25  agency of the federal government may be repaid from money 
 60.26  collected by the proceeds of watershed district bonds or notes 
 60.27  or from the collections of storm water charges, loan repayments, 
 60.28  ad valorem tax levies, or special assessments on properties 
 60.29  benefited by the project.  
 60.30     Sec. 5.  Minnesota Statutes 1996, section 103D.905, is 
 60.31  amended by adding a subdivision to read: 
 60.32     Subd. 9.  [PROJECT TAX LEVY.] In addition to other tax 
 60.33  levies provided in this section or in any other law, a watershed 
 60.34  district may levy a tax: 
 60.35     (1) to pay the costs of projects undertaken by the 
 60.36  watershed district which are to be funded, in whole or in part, 
 61.1   with the proceeds of grants or construction or implementation 
 61.2   loans from an agency of the state of Minnesota under the 
 61.3   authority of sections 103F.701 to 103F.761; 
 61.4      (2) to pay the principal of, or premium or administrative 
 61.5   surcharge, if any, and interest on, the bonds and notes issued 
 61.6   by the watershed district pursuant to section 103F.725; or 
 61.7      (3) to repay the construction or implementation loans under 
 61.8   sections 103F.701 to 103F.761. 
 61.9      Taxes levied with respect to payment of bonds and notes 
 61.10  shall comply with section 475.61. 
 61.11     Sec. 6.  Minnesota Statutes 1996, section 216B.16, is 
 61.12  amended by adding a subdivision to read: 
 61.13     Subd. 6d.  [WIND ENERGY; PROPERTY TAX.] An owner of a wind 
 61.14  energy conversion facility which is required to pay property 
 61.15  taxes under section 272.02, subdivision 1, paragraph (21), may 
 61.16  petition the public utilities commission to include in any power 
 61.17  purchase agreement between the owner of the facility and a 
 61.18  public utility regulated by the commission the amount of 
 61.19  property taxes paid by the owner of the facility.  The public 
 61.20  utilities commission shall require the public utility to amend 
 61.21  the power purchase agreement to include the property taxes paid 
 61.22  by the owner of the facility in the price paid by the utility 
 61.23  for wind generated electricity only if the commission finds: 
 61.24     (a) the owner of the facility has paid the property taxes 
 61.25  required by this subdivision; 
 61.26     (b) the power purchase agreement between the public utility 
 61.27  and the owner does not already require the utility to pay the 
 61.28  amount of property taxes the owner has paid under this 
 61.29  subdivision; and 
 61.30     (c) the commission has approved a rate schedule containing 
 61.31  provisions for the automatic adjustment of charges for utility 
 61.32  service in direct relation to the charges ordered by the 
 61.33  commission under section 272.02, subdivision 1, paragraph (21). 
 61.34     Sec. 7.  Minnesota Statutes 1996, section 271.01, 
 61.35  subdivision 5, is amended to read: 
 61.36     Subd. 5.  [JURISDICTION.] The tax court shall have 
 62.1   statewide jurisdiction.  Except for an appeal to the supreme 
 62.2   court or any other appeal allowed under this subdivision, the 
 62.3   tax court shall be the sole, exclusive, and final authority for 
 62.4   the hearing and determination of all questions of law and fact 
 62.5   arising under the tax laws of the state, as defined in this 
 62.6   subdivision, in those cases that have been appealed to the tax 
 62.7   court and in any case that has been transferred by the district 
 62.8   court to the tax court.  The tax court shall have no 
 62.9   jurisdiction in any case that does not arise under the tax laws 
 62.10  of the state or in any criminal case or in any case determining 
 62.11  or granting title to real property or in any case that is under 
 62.12  the probate jurisdiction of the district court.  The small 
 62.13  claims division of the tax court shall have no jurisdiction in 
 62.14  any case dealing with property valuation or assessment for 
 62.15  property tax purposes until the taxpayer has appealed the 
 62.16  valuation or assessment to the county board of equalization, and 
 62.17  in those towns and cities which have not transferred their 
 62.18  duties to the county, the town or city board of equalization and 
 62.19  to the county board of equalization, except for those taxpayers 
 62.20  whose original assessments are determined by the commissioner of 
 62.21  revenue.  The tax court shall have no jurisdiction in any case 
 62.22  involving an order of the state board of equalization unless a 
 62.23  taxpayer contests the valuation of property.  Laws governing 
 62.24  taxes, aids, and related matters administered by the 
 62.25  commissioner of revenue, laws dealing with property valuation, 
 62.26  assessment or taxation of property for property tax purposes, 
 62.27  and any other laws that contain provisions authorizing review of 
 62.28  taxes, aids, and related matters by the tax court shall be 
 62.29  considered tax laws of this state subject to the jurisdiction of 
 62.30  the tax court.  This subdivision shall not be construed to 
 62.31  prevent an appeal, as provided by law, to an administrative 
 62.32  agency, board of equalization, review under section 274.13, 
 62.33  subdivision 1c, or to the commissioner of revenue.  Wherever 
 62.34  used in this chapter, the term commissioner shall mean the 
 62.35  commissioner of revenue, unless otherwise specified. 
 62.36     Sec. 8.  Minnesota Statutes 1996, section 272.02, 
 63.1   subdivision 1, is amended to read: 
 63.2      Subdivision 1.  All property described in this section to 
 63.3   the extent herein limited shall be exempt from taxation: 
 63.4      (1) All public burying grounds. 
 63.5      (2) All public schoolhouses. 
 63.6      (3) All public hospitals. 
 63.7      (4) All academies, colleges, and universities, and all 
 63.8   seminaries of learning. 
 63.9      (5) All churches, church property, and houses of worship. 
 63.10     (6) Institutions of purely public charity except parcels of 
 63.11  property containing structures and the structures described in 
 63.12  section 273.13, subdivision 25, paragraph (c), clauses (1), (2), 
 63.13  and (3), or paragraph (d), other than those that qualify for 
 63.14  exemption under clause (25). 
 63.15     (7) All public property exclusively used for any public 
 63.16  purpose. 
 63.17     (8) Except for the taxable personal property enumerated 
 63.18  below, all personal property and the property described in 
 63.19  section 272.03, subdivision 1, paragraphs (c) and (d), shall be 
 63.20  exempt.  
 63.21     The following personal property shall be taxable:  
 63.22     (a) personal property which is part of an electric 
 63.23  generating, transmission, or distribution system or a pipeline 
 63.24  system transporting or distributing water, gas, crude oil, or 
 63.25  petroleum products or mains and pipes used in the distribution 
 63.26  of steam or hot or chilled water for heating or cooling 
 63.27  buildings and structures; 
 63.28     (b) railroad docks and wharves which are part of the 
 63.29  operating property of a railroad company as defined in section 
 63.30  270.80; 
 63.31     (c) personal property defined in section 272.03, 
 63.32  subdivision 2, clause (3); 
 63.33     (d) leasehold or other personal property interests which 
 63.34  are taxed pursuant to section 272.01, subdivision 2; 273.124, 
 63.35  subdivision 7; or 273.19, subdivision 1; or any other law 
 63.36  providing the property is taxable as if the lessee or user were 
 64.1   the fee owner; 
 64.2      (e) manufactured homes and sectional structures, including 
 64.3   storage sheds, decks, and similar removable improvements 
 64.4   constructed on the site of a manufactured home, sectional 
 64.5   structure, park trailer or travel trailer as provided in section 
 64.6   273.125, subdivision 8, paragraph (f); and 
 64.7      (f) flight property as defined in section 270.071.  
 64.8      (9) Personal property used primarily for the abatement and 
 64.9   control of air, water, or land pollution to the extent that it 
 64.10  is so used, and real property which is used primarily for 
 64.11  abatement and control of air, water, or land pollution as part 
 64.12  of an agricultural operation, as a part of a centralized 
 64.13  treatment and recovery facility operating under a permit issued 
 64.14  by the Minnesota pollution control agency pursuant to chapters 
 64.15  115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 
 64.16  and 7045.0020 to 7045.1260, as a wastewater treatment facility 
 64.17  and for the treatment, recovery, and stabilization of metals, 
 64.18  oils, chemicals, water, sludges, or inorganic materials from 
 64.19  hazardous industrial wastes, or as part of an electric 
 64.20  generation system.  For purposes of this clause, personal 
 64.21  property includes ponderous machinery and equipment used in a 
 64.22  business or production activity that at common law is considered 
 64.23  real property. 
 64.24     Any taxpayer requesting exemption of all or a portion of 
 64.25  any real property or any equipment or device, or part thereof, 
 64.26  operated primarily for the control or abatement of air or water 
 64.27  pollution shall file an application with the commissioner of 
 64.28  revenue.  The equipment or device shall meet standards, rules, 
 64.29  or criteria prescribed by the Minnesota pollution control 
 64.30  agency, and must be installed or operated in accordance with a 
 64.31  permit or order issued by that agency.  The Minnesota pollution 
 64.32  control agency shall upon request of the commissioner furnish 
 64.33  information or advice to the commissioner.  On determining that 
 64.34  property qualifies for exemption, the commissioner shall issue 
 64.35  an order exempting the property from taxation.  The equipment or 
 64.36  device shall continue to be exempt from taxation as long as the 
 65.1   permit issued by the Minnesota pollution control agency remains 
 65.2   in effect. 
 65.3      (10) Wetlands.  For purposes of this subdivision, 
 65.4   "wetlands" means:  (i) land described in section 103G.005, 
 65.5   subdivision 15a; (ii) land which is mostly under water, produces 
 65.6   little if any income, and has no use except for wildlife or 
 65.7   water conservation purposes, provided it is preserved in its 
 65.8   natural condition and drainage of it would be legal, feasible, 
 65.9   and economically practical for the production of livestock, 
 65.10  dairy animals, poultry, fruit, vegetables, forage and grains, 
 65.11  except wild rice; or (iii) land in a wetland preservation area 
 65.12  under sections 103F.612 to 103F.616.  "Wetlands" under items (i) 
 65.13  and (ii) include adjacent land which is not suitable for 
 65.14  agricultural purposes due to the presence of the wetlands, but 
 65.15  do not include woody swamps containing shrubs or trees, wet 
 65.16  meadows, meandered water, streams, rivers, and floodplains or 
 65.17  river bottoms.  Exemption of wetlands from taxation pursuant to 
 65.18  this section shall not grant the public any additional or 
 65.19  greater right of access to the wetlands or diminish any right of 
 65.20  ownership to the wetlands. 
 65.21     (11) Native prairie.  The commissioner of the department of
 65.22  natural resources shall determine lands in the state which are 
 65.23  native prairie and shall notify the county assessor of each 
 65.24  county in which the lands are located.  Pasture land used for 
 65.25  livestock grazing purposes shall not be considered native 
 65.26  prairie for the purposes of this clause.  Upon receipt of an 
 65.27  application for the exemption provided in this clause for lands 
 65.28  for which the assessor has no determination from the 
 65.29  commissioner of natural resources, the assessor shall refer the 
 65.30  application to the commissioner of natural resources who shall 
 65.31  determine within 30 days whether the land is native prairie and 
 65.32  notify the county assessor of the decision.  Exemption of native 
 65.33  prairie pursuant to this clause shall not grant the public any 
 65.34  additional or greater right of access to the native prairie or 
 65.35  diminish any right of ownership to it. 
 65.36     (12) Property used in a continuous program to provide 
 66.1   emergency shelter for victims of domestic abuse, provided the 
 66.2   organization that owns and sponsors the shelter is exempt from 
 66.3   federal income taxation pursuant to section 501(c)(3) of the 
 66.4   Internal Revenue Code of 1986, as amended through December 31, 
 66.5   1992, notwithstanding the fact that the sponsoring organization 
 66.6   receives funding under section 8 of the United States Housing 
 66.7   Act of 1937, as amended. 
 66.8      (13) If approved by the governing body of the municipality 
 66.9   in which the property is located, property not exceeding one 
 66.10  acre which is owned and operated by any senior citizen group or 
 66.11  association of groups that in general limits membership to 
 66.12  persons age 55 or older and is organized and operated 
 66.13  exclusively for pleasure, recreation, and other nonprofit 
 66.14  purposes, no part of the net earnings of which inures to the 
 66.15  benefit of any private shareholders; provided the property is 
 66.16  used primarily as a clubhouse, meeting facility, or recreational 
 66.17  facility by the group or association and the property is not 
 66.18  used for residential purposes on either a temporary or permanent 
 66.19  basis. 
 66.20     (14) To the extent provided by section 295.44, real and 
 66.21  personal property used or to be used primarily for the 
 66.22  production of hydroelectric or hydromechanical power on a site 
 66.23  owned by the state or a local governmental unit which is 
 66.24  developed and operated pursuant to the provisions of section 
 66.25  103G.535. 
 66.26     (15) If approved by the governing body of the municipality 
 66.27  in which the property is located, and if construction is 
 66.28  commenced after June 30, 1983:  
 66.29     (a) a "direct satellite broadcasting facility" operated by 
 66.30  a corporation licensed by the federal communications commission 
 66.31  to provide direct satellite broadcasting services using direct 
 66.32  broadcast satellites operating in the 12-ghz. band; and 
 66.33     (b) a "fixed satellite regional or national program service 
 66.34  facility" operated by a corporation licensed by the federal 
 66.35  communications commission to provide fixed satellite-transmitted 
 66.36  regularly scheduled broadcasting services using satellites 
 67.1   operating in the 6-ghz. band. 
 67.2   An exemption provided by clause (15) shall apply for a period 
 67.3   not to exceed five years.  When the facility no longer qualifies 
 67.4   for exemption, it shall be placed on the assessment rolls as 
 67.5   provided in subdivision 4.  Before approving a tax exemption 
 67.6   pursuant to this paragraph, the governing body of the 
 67.7   municipality shall provide an opportunity to the members of the 
 67.8   county board of commissioners of the county in which the 
 67.9   facility is proposed to be located and the members of the school 
 67.10  board of the school district in which the facility is proposed 
 67.11  to be located to meet with the governing body.  The governing 
 67.12  body shall present to the members of those boards its estimate 
 67.13  of the fiscal impact of the proposed property tax exemption.  
 67.14  The tax exemption shall not be approved by the governing body 
 67.15  until the county board of commissioners has presented its 
 67.16  written comment on the proposal to the governing body or 30 days 
 67.17  have passed from the date of the transmittal by the governing 
 67.18  body to the board of the information on the fiscal impact, 
 67.19  whichever occurs first. 
 67.20     (16) Real and personal property owned and operated by a 
 67.21  private, nonprofit corporation exempt from federal income 
 67.22  taxation pursuant to United States Code, title 26, section 
 67.23  501(c)(3), primarily used in the generation and distribution of 
 67.24  hot water for heating buildings and structures.  
 67.25     (17) Notwithstanding section 273.19, state lands that are 
 67.26  leased from the department of natural resources under section 
 67.27  92.46. 
 67.28     (18) Electric power distribution lines and their 
 67.29  attachments and appurtenances, that are used primarily for 
 67.30  supplying electricity to farmers at retail.  
 67.31     (19) Transitional housing facilities.  "Transitional 
 67.32  housing facility" means a facility that meets the following 
 67.33  requirements.  (i) It provides temporary housing to individuals, 
 67.34  couples, or families.  (ii) It has the purpose of reuniting 
 67.35  families and enabling parents or individuals to obtain 
 67.36  self-sufficiency, advance their education, get job training, or 
 68.1   become employed in jobs that provide a living wage.  (iii) It 
 68.2   provides support services such as child care, work readiness 
 68.3   training, and career development counseling; and a 
 68.4   self-sufficiency program with periodic monitoring of each 
 68.5   resident's progress in completing the program's goals.  (iv) It 
 68.6   provides services to a resident of the facility for at least 
 68.7   three months but no longer than three years, except residents 
 68.8   enrolled in an educational or vocational institution or job 
 68.9   training program.  These residents may receive services during 
 68.10  the time they are enrolled but in no event longer than four 
 68.11  years.  (v) It is owned and operated or under lease from a unit 
 68.12  of government or governmental agency under a property 
 68.13  disposition program and operated by one or more organizations 
 68.14  exempt from federal income tax under section 501(c)(3) of the 
 68.15  Internal Revenue Code of 1986, as amended through December 31, 
 68.16  1992.  This exemption applies notwithstanding the fact that the 
 68.17  sponsoring organization receives financing by a direct federal 
 68.18  loan or federally insured loan or a loan made by the Minnesota 
 68.19  housing finance agency under the provisions of either Title II 
 68.20  of the National Housing Act or the Minnesota housing finance 
 68.21  agency law of 1971 or rules promulgated by the agency pursuant 
 68.22  to it, and notwithstanding the fact that the sponsoring 
 68.23  organization receives funding under Section 8 of the United 
 68.24  States Housing Act of 1937, as amended. 
 68.25     (20) Real and personal property, including leasehold or 
 68.26  other personal property interests, owned and operated by a 
 68.27  corporation if more than 50 percent of the total voting power of 
 68.28  the stock of the corporation is owned collectively by:  (i) the 
 68.29  board of regents of the University of Minnesota, (ii) the 
 68.30  University of Minnesota Foundation, an organization exempt from 
 68.31  federal income taxation under section 501(c)(3) of the Internal 
 68.32  Revenue Code of 1986, as amended through December 31, 1992, and 
 68.33  (iii) a corporation organized under chapter 317A, which by its 
 68.34  articles of incorporation is prohibited from providing pecuniary 
 68.35  gain to any person or entity other than the regents of the 
 68.36  University of Minnesota; which property is used primarily to 
 69.1   manage or provide goods, services, or facilities utilizing or 
 69.2   relating to large-scale advanced scientific computing resources 
 69.3   to the regents of the University of Minnesota and others. 
 69.4      (21)(a) Small scale wind energy conversion systems, as 
 69.5   defined in section 216C.06, subdivision 12, installed after 
 69.6   January 1, 1991, and before January 2, 1995, and used as an 
 69.7   electric power source, are exempt. 
 69.8      (b) "Small scale wind energy conversion systems" are wind 
 69.9   energy conversion systems, as defined in section 216C.06, 
 69.10  subdivision 12, installed after January 1, 1995, including the 
 69.11  foundation or support pad, which are (i) used as an electric 
 69.12  power source; (ii) located within one county and owned by the 
 69.13  same owner; and (iii) produce two megawatts or less of 
 69.14  electricity as measured by nameplate ratings, are exempt. 
 69.15     (c) (b) Medium scale wind energy conversion systems, as 
 69.16  defined in section 216C.06, subdivision 12, installed after 
 69.17  January 1, 1995 1991, and used as an electric power source but 
 69.18  not exempt under item (b), are treated as follows:  (i) the 
 69.19  foundation and support pad are taxable; (ii) the associated 
 69.20  supporting and protective structures are exempt for the first 
 69.21  five assessment years after they have been constructed, and 
 69.22  thereafter, 30 percent of the market value of the associated 
 69.23  supporting and protective structures are taxable; and (iii) the 
 69.24  turbines, blades, transformers, and its related equipment, are 
 69.25  exempt.  "Medium scale wind energy conversion systems" are wind 
 69.26  energy conversion systems as defined in section 216C.06, 
 69.27  subdivision 12, including the foundation or support pad, which 
 69.28  are:  (i) used as an electric power source; (ii) located within 
 69.29  one county and owned by the same owner; and (iii) produce more 
 69.30  than two but equal to or less than 12 megawatts of energy as 
 69.31  measured by nameplate ratings. 
 69.32     (c) Large scale wind energy conversion systems installed 
 69.33  after January 1, 1991, are treated as follows:  30 percent of 
 69.34  the market value of all property is taxable, including (i) the 
 69.35  foundation and support pad; (ii) the associated supporting and 
 69.36  protective structures; and (iii) the turbines, blades, 
 70.1   transformers, and its related equipment.  "Large scale wind 
 70.2   energy conversion systems" are wind energy conversion systems as 
 70.3   defined in section 216C.06, subdivision 12, including the 
 70.4   foundation or support pad, which are:  (i) used as an electric 
 70.5   power source; and (ii) produce more than 12 megawatts of energy 
 70.6   as measured by nameplate ratings. 
 70.7      (22) Containment tanks, cache basins, and that portion of 
 70.8   the structure needed for the containment facility used to 
 70.9   confine agricultural chemicals as defined in section 18D.01, 
 70.10  subdivision 3, as required by the commissioner of agriculture 
 70.11  under chapter 18B or 18C. 
 70.12     (23) Photovoltaic devices, as defined in section 216C.06, 
 70.13  subdivision 13, installed after January 1, 1992, and used to 
 70.14  produce or store electric power. 
 70.15     (24) Real and personal property owned and operated by a 
 70.16  private, nonprofit corporation exempt from federal income 
 70.17  taxation pursuant to United States Code, title 26, section 
 70.18  501(c)(3), primarily used for an ice arena or ice rink, and used 
 70.19  primarily for youth and high school programs. 
 70.20     (25) A structure that is situated on real property that is 
 70.21  used for: 
 70.22     (i) housing for the elderly or for low- and moderate-income 
 70.23  families as defined in Title II of the National Housing Act, as 
 70.24  amended through December 31, 1990, and funded by a direct 
 70.25  federal loan or federally insured loan made pursuant to Title II 
 70.26  of the act; or 
 70.27     (ii) housing lower income families or elderly or 
 70.28  handicapped persons, as defined in Section 8 of the United 
 70.29  States Housing Act of 1937, as amended. 
 70.30     In order for a structure to be exempt under (i) or (ii), it 
 70.31  must also meet each of the following criteria: 
 70.32     (A) is owned by an entity which is operated as a nonprofit 
 70.33  corporation organized under chapter 317A; 
 70.34     (B) is owned by an entity which has not entered into a 
 70.35  housing assistance payments contract under Section 8 of the 
 70.36  United States Housing Act of 1937, or, if the entity which owns 
 71.1   the structure has entered into a housing assistance payments 
 71.2   contract under Section 8 of the United States Housing Act of 
 71.3   1937, the contract provides assistance for less than 90 percent 
 71.4   of the dwelling units in the structure, excluding dwelling units 
 71.5   intended for management or maintenance personnel; 
 71.6      (C) operates an on-site congregate dining program in which 
 71.7   participation by residents is mandatory, and provides assisted 
 71.8   living or similar social and physical support services for 
 71.9   residents; and 
 71.10     (D) was not assessed and did not pay tax under chapter 273 
 71.11  prior to the 1991 levy, while meeting the other conditions of 
 71.12  this clause. 
 71.13     An exemption under this clause remains in effect for taxes 
 71.14  levied in each year or partial year of the term of its permanent 
 71.15  financing. 
 71.16     (26) Real and personal property that is located in the 
 71.17  Superior National Forest, and owned or leased and operated by a 
 71.18  nonprofit organization that is exempt from federal income 
 71.19  taxation under section 501(c)(3) of the Internal Revenue Code of 
 71.20  1986, as amended through December 31, 1992, and primarily used 
 71.21  to provide recreational opportunities for disabled veterans and 
 71.22  their families. 
 71.23     (27) Manure pits and appurtenances, which may include 
 71.24  slatted floors and pipes, installed or operated in accordance 
 71.25  with a permit, order, or certificate of compliance issued by the 
 71.26  Minnesota pollution control agency.  The exemption shall 
 71.27  continue for as long as the permit, order, or certificate issued 
 71.28  by the Minnesota pollution control agency remains in effect. 
 71.29     (28) Notwithstanding clause (8), item (a), attached 
 71.30  machinery and other personal property which is part of a 
 71.31  facility containing a cogeneration system as described in 
 71.32  section 216B.166, subdivision 2, paragraph (a), if the 
 71.33  cogeneration system has met the following criteria:  (i) the 
 71.34  system utilizes natural gas as a primary fuel and the 
 71.35  cogenerated steam initially replaces steam generated from 
 71.36  existing thermal boilers utilizing coal; (ii) the facility 
 72.1   developer is selected as a result of a procurement process 
 72.2   ordered by the public utilities commission; and (iii) 
 72.3   construction of the facility is commenced after July 1, 1994, 
 72.4   and before July 1, 1997. 
 72.5      (29) Real property acquired by a home rule charter city, 
 72.6   statutory city, county, town, or school district under a lease 
 72.7   purchase agreement or an installment purchase contract during 
 72.8   the term of the lease purchase agreement as long as and to the 
 72.9   extent that the property is used by the city, county, town, or 
 72.10  school district and devoted to a public use and to the extent it 
 72.11  is not subleased to any private individual, entity, association, 
 72.12  or corporation in connection with a business or enterprise 
 72.13  operated for profit. 
 72.14     Sec. 9.  Minnesota Statutes 1996, section 272.02, is 
 72.15  amended by adding a subdivision to read: 
 72.16     Subd. 9.  [PERSONAL PROPERTY; BIOMASS FACILITY.] (a) 
 72.17  Notwithstanding clause (8), item (a), of subdivision 1, attached 
 72.18  machinery and other personal property that is part of a system 
 72.19  that generates biomass electric energy that satisfies the 
 72.20  mandate, in whole or in part, established in section 216B.2424, 
 72.21  or a system that generates electric energy using waste wood, is 
 72.22  exempt if it meets the requirements of this subdivision. 
 72.23     (b) The governing bodies of the county, city or town, and 
 72.24  school district must each approve by resolution the exemption of 
 72.25  the personal property under this subdivision.  Each of the 
 72.26  governing bodies shall file a copy of the resolution with the 
 72.27  county auditor.  The county auditor shall publish the 
 72.28  resolutions in newspapers of general circulation within the 
 72.29  county.  The voters of the county may request a referendum on 
 72.30  the proposed exemption by filing a petition within 30 days after 
 72.31  the resolutions are published.  The petition must be signed by 
 72.32  voters who reside in the county.  The number of signatures must 
 72.33  equal at least five percent of the number of persons voting in 
 72.34  the county in the last general election.  If such a petition is 
 72.35  timely filed, the resolutions are not effective until they have 
 72.36  been submitted to the voters residing in the county at a general 
 73.1   or special election and a majority of votes cast on the question 
 73.2   of approving the resolution are in the affirmative.  The 
 73.3   commissioner of revenue shall prepare a suggested form of 
 73.4   question to be presented at the referendum. 
 73.5      (c) This subdivision is effective for assessment years 1998 
 73.6   to 2002 and expires thereafter. 
 73.7      Sec. 10.  Minnesota Statutes 1996, section 273.111, 
 73.8   subdivision 3, is amended to read: 
 73.9      Subd. 3.  (a) Real estate consisting of ten acres or more 
 73.10  or a nursery or greenhouse, and qualifying for classification as 
 73.11  class 1b, 2a, or 2b under section 273.13, subdivision 23, 
 73.12  paragraph (d), shall be entitled to valuation and tax deferment 
 73.13  under this section only if it is actively and exclusively 
 73.14  primarily devoted to agricultural use as defined, and meets the 
 73.15  qualifications in subdivision 6, and either:  
 73.16     (1) is the homestead of the owner, or of a surviving 
 73.17  spouse, child, or sibling of the owner or is real estate which 
 73.18  is farmed with the real estate which contains the homestead 
 73.19  property; or 
 73.20     (2) has been in possession of the applicant, the 
 73.21  applicant's spouse, parent, or sibling, or any combination 
 73.22  thereof, for a period of at least seven years prior to 
 73.23  application for benefits under the provisions of this section, 
 73.24  or is real estate which is farmed with the real estate which 
 73.25  qualifies under this clause and is within two townships or 
 73.26  cities or combination thereof from the qualifying real estate; 
 73.27  or 
 73.28     (3) is the homestead of a shareholder in a family farm 
 73.29  corporation as defined in section 500.24, notwithstanding the 
 73.30  fact that legal title to the real estate may be held in the name 
 73.31  of the family farm corporation; or 
 73.32     (4) is in the possession of a nursery or greenhouse or an 
 73.33  entity owned by a proprietor, partnership, or corporation which 
 73.34  also owns the nursery or greenhouse operations on the parcel or 
 73.35  parcels. 
 73.36     (b) Valuation of real estate under this section is limited 
 74.1   to parcels the ownership of which is in noncorporate entities 
 74.2   except for:  
 74.3      (1) family farm corporations organized pursuant to section 
 74.4   500.24; and 
 74.5      (2) corporations that derive 80 percent or more of their 
 74.6   gross receipts from the wholesale or retail sale of 
 74.7   horticultural or nursery stock.  
 74.8      Corporate entities who previously qualified for tax 
 74.9   deferment pursuant to this section and who continue to otherwise 
 74.10  qualify under subdivisions 3 and 6 for a period of at least 
 74.11  three years following the effective date of Laws 1983, chapter 
 74.12  222, section 8, will not be required to make payment of the 
 74.13  previously deferred taxes, notwithstanding the provisions of 
 74.14  subdivision 9.  Special assessments are payable at the end of 
 74.15  the three-year period or at time of sale, whichever comes first. 
 74.16     (c) Land that previously qualified for tax deferment 
 74.17  pursuant to under this section and no longer qualifies because 
 74.18  it is not classified as primarily used for agricultural land 
 74.19  purposes but would otherwise qualify under subdivisions 3 and 6 
 74.20  for a period of at least three years will not be required to 
 74.21  make payment of the previously deferred taxes, notwithstanding 
 74.22  the provisions of subdivision 9.  Sale of the land prior to the 
 74.23  expiration of the three-year period requires payment of deferred 
 74.24  taxes as follows:  sale in the year the land no longer qualifies 
 74.25  requires payment of the current year's deferred taxes plus 
 74.26  payment of deferred taxes for the two prior years; sale during 
 74.27  the second year the land no longer qualifies requires payment of 
 74.28  the current year's deferred taxes plus payment of the deferred 
 74.29  taxes for the prior year; and sale during the third year the 
 74.30  land no longer qualifies requires payment of the current year's 
 74.31  deferred taxes.  Deferred taxes shall be paid even if the land 
 74.32  qualifies pursuant to subdivision 11a.  When such property is 
 74.33  sold or no longer qualifies under this paragraph, or at the end 
 74.34  of the three-year period, whichever comes first, all deferred 
 74.35  special assessments plus interest are payable in equal 
 74.36  installments spread over the time remaining until the last 
 75.1   maturity date of the bonds issued to finance the improvement for 
 75.2   which the assessments were levied.  If the bonds have matured, 
 75.3   the deferred special assessments plus interest are payable 
 75.4   within 90 days.  The provisions of section 429.061, subdivision 
 75.5   2, apply to the collection of these installments.  Penalties are 
 75.6   not imposed on any such special assessments if timely paid. 
 75.7      Sec. 11.  Minnesota Statutes 1996, section 273.111, 
 75.8   subdivision 6, is amended to read: 
 75.9      Subd. 6.  Real property qualifying under subdivision 3 
 75.10  shall be considered to be in agricultural use provided that 
 75.11  annually: 
 75.12     (1) at least 33-1/3 percent of the total family income of 
 75.13  the owner is derived therefrom, or the total production income 
 75.14  including rental from the property is $300 plus $10 per tillable 
 75.15  acre; and 
 75.16     (2) it is devoted to the production for sale of 
 75.17  agricultural products as defined in section 273.13, subdivision 
 75.18  23, paragraph (e). 
 75.19     Slough, wasteland, and woodland contiguous to or surrounded 
 75.20  by land that is entitled to valuation and tax deferment under 
 75.21  this section is considered to be in agricultural use if under 
 75.22  the same ownership and management. 
 75.23     Sec. 12.  Minnesota Statutes 1996, section 273.112, is 
 75.24  amended by adding a subdivision to read: 
 75.25     Subd. 3a.  Real estate shall be entitled to valuation and 
 75.26  tax deferment under this section only if it is: 
 75.27     (1) nonresidential real estate that has been operated as an 
 75.28  amusement park for at least 45 years; and 
 75.29     (2) the governing bodies of the county, home rule charter 
 75.30  or statutory city or town, and school district in which the real 
 75.31  estate is located have each approved by resolution the valuation 
 75.32  and tax deferment under this section and have each filed a 
 75.33  notice of the approval with the county assessor within the time 
 75.34  limits of subdivision 6. 
 75.35     Sec. 13.  Minnesota Statutes 1996, section 272.115, is 
 75.36  amended to read: 
 76.1      272.115 [CERTIFICATE OF VALUE; FILING.] 
 76.2      Subdivision 1.  [REQUIREMENT.] Except as otherwise provided 
 76.3   in subdivision 5, whenever any real estate is sold for a 
 76.4   consideration in excess of $1,000, whether by warranty deed, 
 76.5   quitclaim deed, contract for deed or any other method of sale, 
 76.6   the grantor, grantee or the legal agent of either shall file a 
 76.7   certificate of value with the county auditor in the county in 
 76.8   which the property is located when the deed or other document is 
 76.9   presented for recording.  Contract for deeds are subject to 
 76.10  recording under section 507.235, subdivision 1.  Value shall, in 
 76.11  the case of any deed not a gift, be the amount of the full 
 76.12  actual consideration thereof, paid or to be paid, including the 
 76.13  amount of any lien or liens assumed.  The items and value of 
 76.14  personal property transferred with the real property must be 
 76.15  listed and deducted from the sale price.  The certificate of 
 76.16  value shall include the classification to which the property 
 76.17  belongs for the purpose of determining the fair market value of 
 76.18  the property.  The certificate shall include financing terms and 
 76.19  conditions of the sale which are necessary to determine the 
 76.20  actual, present value of the sale price for purposes of the 
 76.21  sales ratio study.  The commissioner of revenue shall promulgate 
 76.22  administrative rules specifying the financing terms and 
 76.23  conditions which must be included on the certificate.  Pursuant 
 76.24  to the authority of the commissioner of revenue in section 
 76.25  270.066, the certificate of value must include the social 
 76.26  security number or the federal employer identification number of 
 76.27  the grantors and grantees.  The identification numbers of the 
 76.28  grantors and grantees are private data on individuals or 
 76.29  nonpublic data as defined in section 13.02, subdivisions 9 and 
 76.30  12, but, notwithstanding that section, the private or nonpublic 
 76.31  data may be disclosed to the commissioner of revenue for 
 76.32  purposes of tax administration. 
 76.33     Subd. 2.  [FORM; INFORMATION REQUIRED.] The certificate of 
 76.34  value shall require such facts and information as may be 
 76.35  determined by the commissioner to be reasonably necessary in the 
 76.36  administration of the state education aid formulas.  The form of 
 77.1   the certificate of value shall be prescribed by the department 
 77.2   of revenue which shall provide an adequate supply of forms to 
 77.3   each county auditor. 
 77.4      Subd. 3.  [COPIES TRANSMITTED; HOMESTEAD STATUS.] The 
 77.5   county auditor shall transmit two true copies of the certificate 
 77.6   of value to the assessor who shall insert the most recent market 
 77.7   value and when available, the year of original construction of 
 77.8   each parcel of property on both copies and shall transmit one 
 77.9   copy to the department of revenue.  Upon the request of a city 
 77.10  council located within the county, a copy of each certificate of 
 77.11  value for property located in that city shall be made available 
 77.12  to the governing body of the city.  The assessor shall remove 
 77.13  the homestead classification for the following assessment year 
 77.14  from a property which is sold or transferred, unless the grantee 
 77.15  or the person to whom the property is transferred completes a 
 77.16  homestead application under section 273.124, subdivision 13, and 
 77.17  qualifies for homestead status. 
 77.18     Subd. 4.  [ELIGIBILITY FOR HOMESTEAD STATUS.] No real 
 77.19  estate sold or transferred on or after January 1, 1993, under 
 77.20  subdivision 1 shall be classified as a homestead, unless (1) a 
 77.21  certificate of value has been filed with the county auditor in 
 77.22  accordance with this section, or (2) the real estate was 
 77.23  conveyed by the federal government, the state, a political 
 77.24  subdivision of the state, or combination of them to a person 
 77.25  otherwise eligible to receive homestead classification of the 
 77.26  property. 
 77.27     This subdivision shall apply to any real estate taxes that 
 77.28  are payable the year or years following the sale or transfer of 
 77.29  the property. 
 77.30     Subd. 5.  [EXEMPTION FOR GOVERNMENT BODIES.] A certificate 
 77.31  of real estate value is not required when the real estate is 
 77.32  being conveyed to or by a public authority or agency of the 
 77.33  federal government, the state of Minnesota, a political 
 77.34  subdivision of the state, or any combination of them, provided 
 77.35  that the authority, agency, or governmental unit has agreed to 
 77.36  file a list of the real estate conveyed by or to the authority, 
 78.1   agency, or governmental unit with the commissioner of revenue by 
 78.2   June 1 of the year following the year of the conveyance. 
 78.3      Sec. 14.  Minnesota Statutes 1996, section 273.11, 
 78.4   subdivision 1a, is amended to read: 
 78.5      Subd. 1a.  [LIMITED MARKET VALUE.] In the case of all 
 78.6   property classified as agricultural homestead or nonhomestead, 
 78.7   residential homestead or nonhomestead, or noncommercial seasonal 
 78.8   recreational residential, the assessor shall compare the value 
 78.9   with that determined in the preceding assessment.  The amount of 
 78.10  the increase entered in the current assessment shall not exceed 
 78.11  the greater of (1) ten percent of the value in the preceding 
 78.12  assessment, or (2) one-third one-fourth of the difference 
 78.13  between the current assessment and the preceding assessment.  
 78.14  This limitation shall not apply to increases in value due to 
 78.15  improvements.  For purposes of this subdivision, the term 
 78.16  "assessment" means the value prior to any exclusion under 
 78.17  subdivision 16. 
 78.18     The provisions of this subdivision shall be in effect only 
 78.19  for assessment years 1993 through 1997 2001. 
 78.20     For purposes of the assessment/sales ratio study conducted 
 78.21  under section 124.2131, and the computation of state aids paid 
 78.22  under chapters 124, 124A, and 477A, market values and net tax 
 78.23  capacities determined under this subdivision and subdivision 16, 
 78.24  shall be used. 
 78.25     Sec. 15.  Minnesota Statutes 1996, section 273.11, 
 78.26  subdivision 16, is amended to read: 
 78.27     Subd. 16.  [VALUATION EXCLUSION FOR CERTAIN IMPROVEMENTS.] 
 78.28  Improvements to homestead property made before January 2, 2003, 
 78.29  shall be fully or partially excluded from the value of the 
 78.30  property for assessment purposes provided that (1) the house is 
 78.31  at least 35 years old at the time of the improvement and (2) 
 78.32  either 
 78.33     (a) the assessor's estimated market value of the house on 
 78.34  January 2 of the current year is equal to or less than $150,000, 
 78.35  or 
 78.36     (b) if the estimated market value of the house is over 
 79.1   $150,000 market value but is less than $300,000 on January 2 of 
 79.2   the current year, the property qualifies if 
 79.3      (i) it is located in a city or town in which 50 percent or 
 79.4   more of the owner-occupied housing units were constructed before 
 79.5   1960 based upon the 1990 federal census, and 
 79.6      (ii) the city or town's median family income based upon the 
 79.7   1990 federal census is less than the statewide median family 
 79.8   income based upon the 1990 federal census, or 
 79.9      (c) if the estimated market value of the house is $300,000 
 79.10  or more on January 2 of the current year, the property qualifies 
 79.11  if 
 79.12     (i) it is located in a city or town in which 45 percent or 
 79.13  more of the homes were constructed before 1940 based upon the 
 79.14  1990 federal census, and 
 79.15     (ii) it is located in a city or town in which 45 percent or 
 79.16  more of the housing units were rental based upon the 1990 
 79.17  federal census, and 
 79.18     (iii) the city or town's median value of owner-occupied 
 79.19  housing units based upon the 1990 federal census is less than 
 79.20  the statewide median value of owner-occupied housing units based 
 79.21  upon the 1990 federal census. 
 79.22     For purposes of determining this eligibility, "house" means 
 79.23  land and buildings.  
 79.24     The age of a residence is either (1) the number of years 
 79.25  that the residence has existed at its present site, or, (2) the 
 79.26  original year of its construction if the residence has been 
 79.27  relocated and if the relocation site is in the same city or town 
 79.28  as the original site.  In the case of a qualifying relocated 
 79.29  residence under clause (2), an improvement is eligible for 
 79.30  exclusion under this subdivision only if a building permit was 
 79.31  issued to the homeowner after the residence was relocated to its 
 79.32  present site, and the improvement was undertaken during or after 
 79.33  the year the residence was initially occupied by the homeowner.  
 79.34  In the case of an owner-occupied duplex or triplex, the 
 79.35  improvement is eligible regardless of which portion of the 
 79.36  property was improved. 
 80.1      If the property lies in a jurisdiction which is subject to 
 80.2   a building permit process, a building permit must have been 
 80.3   issued prior to commencement of the improvement.  Any 
 80.4   improvement must add at least $1,000 to the value of the 
 80.5   property to be eligible for exclusion under this subdivision.  
 80.6   Only improvements to the structure which is the residence of the 
 80.7   qualifying homesteader or construction of or improvements to no 
 80.8   more than one two-car garage per residence qualify for the 
 80.9   provisions of this subdivision.  If an improvement was begun 
 80.10  between January 2, 1992, and January 2, 1993, any value added 
 80.11  from that improvement for the January 1994 and subsequent 
 80.12  assessments shall qualify for exclusion under this subdivision 
 80.13  provided that a building permit was obtained for the improvement 
 80.14  between January 2, 1992, and January 2, 1993.  Whenever a 
 80.15  building permit is issued for property currently classified as 
 80.16  homestead, the issuing jurisdiction shall notify the property 
 80.17  owner of the possibility of valuation exclusion under this 
 80.18  subdivision.  The assessor shall require an application, 
 80.19  including documentation of the age of the house from the owner, 
 80.20  if unknown by the assessor.  The application may be filed 
 80.21  subsequent to the date of the building permit provided that the 
 80.22  application must be filed within three years of the date the 
 80.23  building permit was issued for the improvement.  If the property 
 80.24  lies in a jurisdiction which is not subject to a building permit 
 80.25  process, the application must be filed within three years of the 
 80.26  date the improvement was made.  The assessor may require proof 
 80.27  from the taxpayer of the date the improvement was made.  
 80.28  Applications must be received prior to July 1 of any year in 
 80.29  order to be effective for taxes payable in the following year. 
 80.30     No exclusion may be granted for an improvement by a local 
 80.31  board of review or county board of equalization and no abatement 
 80.32  of the taxes for qualifying improvements may be granted by the 
 80.33  county board unless (1) a building permit was issued prior to 
 80.34  the commencement of the improvement if the jurisdiction requires 
 80.35  a building permit, and (2) an application was completed. 
 80.36     The assessor shall note the qualifying value of each 
 81.1   improvement on the property's record, and the sum of those 
 81.2   amounts shall be subtracted from the value of the property in 
 81.3   each year for ten years after the improvement has been made, at 
 81.4   which time an amount equal to 20 percent of the qualifying value 
 81.5   shall be added back in each of the five subsequent assessment 
 81.6   years.  If an application is filed after the first assessment 
 81.7   date at which an improvement could have been subject to the 
 81.8   valuation exclusion under this subdivision, the ten-year period 
 81.9   during which the value is subject to exclusion is reduced by the 
 81.10  number of years that have elapsed since the property would have 
 81.11  qualified initially.  The valuation exclusion shall terminate 
 81.12  whenever (1) the property is sold, or (2) the property is 
 81.13  reclassified to a class which does not qualify for treatment 
 81.14  under this subdivision.  Improvements made by an occupant who is 
 81.15  the purchaser of the property under a conditional purchase 
 81.16  contract do not qualify under this subdivision unless the seller 
 81.17  of the property is a governmental entity.  The qualifying value 
 81.18  of the property shall be computed based upon the increase from 
 81.19  that structure's market value as of January 2 preceding the 
 81.20  acquisition of the property by the governmental entity. 
 81.21     The total qualifying value for a homestead may not exceed 
 81.22  $50,000.  The total qualifying value for a homestead with a 
 81.23  house that is less than 70 years old may not exceed $25,000.  
 81.24  The term "qualifying value" means the increase in estimated 
 81.25  market value resulting from the improvement if the improvement 
 81.26  occurs when the house is at least 70 years old, or one-half of 
 81.27  the increase in estimated market value resulting from the 
 81.28  improvement otherwise.  The $25,000 and $50,000 maximum 
 81.29  qualifying value under this subdivision may result from up to 
 81.30  three separate improvements to the homestead.  The application 
 81.31  shall state, in clear language, that if more than three 
 81.32  improvements are made to the qualifying property, a taxpayer may 
 81.33  choose which three improvements are eligible, provided that 
 81.34  after the taxpayer has made the choice and any valuation 
 81.35  attributable to those improvements has been excluded from 
 81.36  taxation, no further changes can be made by the taxpayer. 
 82.1      If 50 percent or more of the square footage of a structure 
 82.2   is voluntarily razed or removed, the valuation increase 
 82.3   attributable to any subsequent improvements to the remaining 
 82.4   structure does not qualify for the exclusion under this 
 82.5   subdivision.  If a structure is unintentionally or accidentally 
 82.6   destroyed by a natural disaster, the property is eligible for an 
 82.7   exclusion under this subdivision provided that the structure was 
 82.8   not completely destroyed.  The qualifying value on property 
 82.9   destroyed by a natural disaster shall be computed based upon the 
 82.10  increase from that structure's market value as determined on 
 82.11  January 2 of the year in which the disaster occurred.  A 
 82.12  property receiving benefits under the homestead disaster 
 82.13  provisions under section 273.123 is not disqualified from 
 82.14  receiving an exclusion under this subdivision.  If any 
 82.15  combination of improvements made to a structure after January 1, 
 82.16  1993, increases the size of the structure by 100 percent or 
 82.17  more, the valuation increase attributable to the portion of the 
 82.18  improvement that causes the structure's size to exceed 100 
 82.19  percent does not qualify for exclusion under this subdivision. 
 82.20     Sec. 16.  Minnesota Statutes 1996, section 273.121, is 
 82.21  amended to read: 
 82.22     273.121 [VALUATION OF REAL PROPERTY, NOTICE.] 
 82.23     Any county assessor or city assessor having the powers of a 
 82.24  county assessor, valuing or classifying taxable real property 
 82.25  shall in each year notify those persons whose property is to be 
 82.26  assessed or reclassified that year if the person's address is 
 82.27  known to the assessor, otherwise the occupant of the property.  
 82.28  The notice shall be in writing and shall be sent by ordinary 
 82.29  mail at least ten days before the meeting of the local board of 
 82.30  review or equalization under section 274.01 or the review 
 82.31  process established under section 274.13, subdivision 1c.  It 
 82.32  shall contain:  (1) the market value, (2) the limited market 
 82.33  value under section 273.11, subdivision 1a, (3) the qualifying 
 82.34  amount of any improvements under section 273.11, subdivision 16, 
 82.35  (4) the market value subject to taxation after subtracting the 
 82.36  amount of any qualifying improvements, (5) the new 
 83.1   classification, (6) a note that if the property is homestead and 
 83.2   at least 35 years old, improvements made to the property may be 
 83.3   eligible for a valuation exclusion under section 273.11, 
 83.4   subdivision 16, (7) the assessor's office address, and (8) the 
 83.5   dates, places, and times set for the meetings of the local board 
 83.6   of review or equalization, the review process established under 
 83.7   section 274.13, subdivision 1c, and the county board of 
 83.8   equalization.  If the assessment roll is not complete, the 
 83.9   notice shall be sent by ordinary mail at least ten days prior to 
 83.10  the date on which the board of review has adjourned.  The 
 83.11  assessor shall attach to the assessment roll a statement that 
 83.12  the notices required by this section have been mailed.  Any 
 83.13  assessor who is not provided sufficient funds from the 
 83.14  assessor's governing body to provide such notices, may make 
 83.15  application to the commissioner of revenue to finance such 
 83.16  notices.  The commissioner of revenue shall conduct an 
 83.17  investigation and, if satisfied that the assessor does not have 
 83.18  the necessary funds, issue a certification to the commissioner 
 83.19  of finance of the amount necessary to provide such notices.  The 
 83.20  commissioner of finance shall issue a warrant for such amount 
 83.21  and shall deduct such amount from any state payment to such 
 83.22  county or municipality.  The necessary funds to make such 
 83.23  payments are hereby appropriated.  Failure to receive the notice 
 83.24  shall in no way affect the validity of the assessment, the 
 83.25  resulting tax, the procedures of any board of review or 
 83.26  equalization, or the enforcement of delinquent taxes by 
 83.27  statutory means. 
 83.28     Sec. 17.  Minnesota Statutes 1996, section 273.124, 
 83.29  subdivision 1, is amended to read: 
 83.30     Subdivision 1.  [GENERAL RULE.] (a) Residential real estate 
 83.31  that is occupied and used for the purposes of a homestead by its 
 83.32  owner, who must be a Minnesota resident, is a residential 
 83.33  homestead.  
 83.34     Agricultural land, as defined in section 273.13, 
 83.35  subdivision 23, that is occupied and used as a homestead by its 
 83.36  owner, who must be a Minnesota resident, is an agricultural 
 84.1   homestead. 
 84.2      Dates for establishment of a homestead and homestead 
 84.3   treatment provided to particular types of property are as 
 84.4   provided in this section.  
 84.5      Property of a trustee, beneficiary, or grantor of a trust 
 84.6   is not disqualified from receiving homestead benefits if the 
 84.7   homestead requirements under this chapter are satisfied. 
 84.8      The assessor shall require proof, as provided in 
 84.9   subdivision 13, of the facts upon which classification as a 
 84.10  homestead may be determined.  Notwithstanding any other law, the 
 84.11  assessor may at any time require a homestead application to be 
 84.12  filed in order to verify that any property classified as a 
 84.13  homestead continues to be eligible for homestead status.  
 84.14  Notwithstanding any other law to the contrary, the department of 
 84.15  revenue may, upon request from an assessor, verify whether an 
 84.16  individual who is requesting or receiving homestead 
 84.17  classification has filed a Minnesota income tax return as a 
 84.18  resident for the most recent taxable year for which the 
 84.19  information is available. 
 84.20     When there is a name change or a transfer of homestead 
 84.21  property, the assessor may reclassify the property in the next 
 84.22  assessment unless a homestead application is filed to verify 
 84.23  that the property continues to qualify for homestead 
 84.24  classification. 
 84.25     (b) For purposes of this section, homestead property shall 
 84.26  include property which is used for purposes of the homestead but 
 84.27  is separated from the homestead by a road, street, lot, 
 84.28  waterway, or other similar intervening property.  The term "used 
 84.29  for purposes of the homestead" shall include but not be limited 
 84.30  to uses for gardens, garages, or other outbuildings commonly 
 84.31  associated with a homestead, but shall not include vacant land 
 84.32  held primarily for future development.  In order to receive 
 84.33  homestead treatment for the noncontiguous property, the owner 
 84.34  shall apply for it to the assessor by July 1 of the year when 
 84.35  the treatment is initially sought.  After initial qualification 
 84.36  for the homestead treatment, additional applications for 
 85.1   subsequent years are not required. 
 85.2      (c) Residential real estate that is occupied and used for 
 85.3   purposes of a homestead by a relative of the owner is a 
 85.4   homestead but only to the extent of the homestead treatment that 
 85.5   would be provided if the related owner occupied the property.  
 85.6   For purposes of this paragraph and paragraph (f) (g), "relative" 
 85.7   means a parent, stepparent, child, stepchild, grandparent, 
 85.8   grandchild, brother, sister, uncle, or aunt.  This relationship 
 85.9   may be by blood or marriage.  Property that has been classified 
 85.10  as seasonal recreational residential property at any time during 
 85.11  which it has been owned by the current owner or spouse of the 
 85.12  current owner will not be reclassified as a homestead unless it 
 85.13  is occupied as a homestead by the owner; this prohibition also 
 85.14  applies to property that, in the absence of this paragraph, 
 85.15  would have been classified as seasonal recreational residential 
 85.16  property at the time when the residence was constructed.  
 85.17  Neither the related occupant nor the owner of the property may 
 85.18  claim a property tax refund under chapter 290A for a homestead 
 85.19  occupied by a relative.  In the case of a residence located on 
 85.20  agricultural land, only the house, garage, and immediately 
 85.21  surrounding one acre of land shall be classified as a homestead 
 85.22  under this paragraph, except as provided in paragraph (d). 
 85.23     (d) Agricultural property that is occupied and used for 
 85.24  purposes of a homestead by a relative of the owner, is a 
 85.25  homestead, only to the extent of the homestead treatment that 
 85.26  would be provided if the related owner occupied the property, 
 85.27  and only if all of the following criteria are met: 
 85.28     (1) the relative who is occupying the agricultural property 
 85.29  is a son, daughter, father, or mother of the owner of the 
 85.30  agricultural property or a son or daughter of the spouse of the 
 85.31  owner of the agricultural property, 
 85.32     (2) the owner of the agricultural property must be a 
 85.33  Minnesota resident, 
 85.34     (3) the owner of the agricultural property must not receive 
 85.35  homestead treatment on any other agricultural property in 
 85.36  Minnesota, and 
 86.1      (4) the owner of the agricultural property is limited to 
 86.2   only one agricultural homestead per family under this paragraph. 
 86.3      Neither the related occupant nor the owner of the property 
 86.4   may claim a property tax refund under chapter 290A for a 
 86.5   homestead occupied by a relative qualifying under this 
 86.6   paragraph.  For purposes of this paragraph, "agricultural 
 86.7   property" means the house, garage, other farm buildings and 
 86.8   structures, and agricultural land. 
 86.9      Application must be made to the assessor by the owner of 
 86.10  the agricultural property to receive homestead benefits under 
 86.11  this paragraph.  The assessor may require the necessary proof 
 86.12  that the requirements under this paragraph have been met. 
 86.13     (e) In the case of property owned by a property owner who 
 86.14  is married, the assessor must not deny homestead treatment in 
 86.15  whole or in part if only one of the spouses occupies the 
 86.16  property and the other spouse is absent due to:  (1) marriage 
 86.17  dissolution proceedings, (2) legal separation, (3) employment or 
 86.18  self-employment in another location, or (4) residence in a 
 86.19  nursing home or boarding care facility, or (5) other personal 
 86.20  circumstances causing the spouses to live separately, not 
 86.21  including an intent to obtain two homestead classifications for 
 86.22  property tax purposes.  To qualify under clause (3), the 
 86.23  spouse's place of employment or self-employment must be at least 
 86.24  50 miles distant from the other spouse's place of employment, 
 86.25  and the homesteads must be at least 50 miles distant from each 
 86.26  other.  Homestead treatment, in whole or in part, shall not be 
 86.27  denied to the owner's spouse who previously occupied the 
 86.28  residence with the owner if the absence of the owner is due to 
 86.29  one of the exceptions provided in this paragraph. 
 86.30     (f) The assessor must not deny homestead treatment in whole 
 86.31  or in part if: 
 86.32     (1) in the case of a property owner who is not married, the 
 86.33  owner is absent due to residence in a nursing home or boarding 
 86.34  care facility and the property is not otherwise occupied; or 
 86.35     (2) in the case of a property owner who is married, the 
 86.36  owner or the owner's spouse or both are absent due to residence 
 87.1   in a nursing home or boarding care facility and the property is 
 87.2   not occupied or is occupied only by the owner's spouse. 
 87.3      (g) If an individual is purchasing property with the intent 
 87.4   of claiming it as a homestead and is required by the terms of 
 87.5   the financing agreement to have a relative shown on the deed as 
 87.6   a coowner, the assessor shall allow a full homestead 
 87.7   classification.  This provision only applies to first-time 
 87.8   purchasers, whether married or single, or to a person who had 
 87.9   previously been married and is purchasing as a single individual 
 87.10  for the first time.  The application for homestead benefits must 
 87.11  be on a form prescribed by the commissioner and must contain the 
 87.12  data necessary for the assessor to determine if full homestead 
 87.13  benefits are warranted. 
 87.14     Sec. 18.  Minnesota Statutes 1996, section 273.13, 
 87.15  subdivision 23, is amended to read: 
 87.16     Subd. 23.  [CLASS 2.] (a) Class 2a property is agricultural 
 87.17  land including any improvements that is homesteaded.  The market 
 87.18  value of the house and garage and immediately surrounding one 
 87.19  acre of land has the same class rates as class 1a property under 
 87.20  subdivision 22.  The value of the remaining land including 
 87.21  improvements up to $115,000 has a net class rate of .45 percent 
 87.22  of market value and a gross class rate of 1.75 percent of market 
 87.23  value.  The remaining value of class 2a property over $115,000 
 87.24  of market value that does not exceed 320 acres has a net class 
 87.25  rate of one percent of market value, and a gross class rate of 
 87.26  2.25 percent of market value.  The remaining property over the 
 87.27  $115,000 market value in excess of 320 acres has a class rate of 
 87.28  1.5 1.4 percent of market value, and a gross class rate of 2.25 
 87.29  percent of market value.  
 87.30     (b) Class 2b property is (1) real estate, rural in 
 87.31  character and used exclusively for growing trees for timber, 
 87.32  lumber, and wood and wood products; (2) real estate that is not 
 87.33  improved with a structure and is used exclusively for growing 
 87.34  trees for timber, lumber, and wood and wood products, if the 
 87.35  owner has participated or is participating in a cost-sharing 
 87.36  program for afforestation, reforestation, or timber stand 
 88.1   improvement on that particular property, administered or 
 88.2   coordinated by the commissioner of natural resources; (3) real 
 88.3   estate that is nonhomestead agricultural land; or (4) a landing 
 88.4   area or public access area of a privately owned public use 
 88.5   airport.  Class 2b property has a net class rate of 1.5 1.4 
 88.6   percent of market value, and a gross class rate of 2.25 percent 
 88.7   of market value.  
 88.8      (c) Agricultural land as used in this section means 
 88.9   contiguous acreage of ten acres or more, primarily used during 
 88.10  the preceding year for agricultural purposes.  Agricultural use 
 88.11  may include "Agricultural purposes" as used in this section 
 88.12  means the raising or cultivation of agricultural products or 
 88.13  enrollment in the Reinvest in Minnesota program under sections 
 88.14  103F.501 to 103F.535 or the federal Conservation Reserve Program 
 88.15  as contained in Public Law Number 99-198.  Contiguous acreage on 
 88.16  the same parcel, or contiguous acreage on an immediately 
 88.17  adjacent parcel under the same ownership, may also qualify as 
 88.18  agricultural land, but only if it is pasture, timber, waste, 
 88.19  unusable wild land, and or land included in state or federal 
 88.20  farm or conservation programs.  "Agricultural purposes" as used 
 88.21  in this section means the raising or cultivation of agricultural 
 88.22  products.  Land enrolled in the Reinvest in Minnesota program 
 88.23  under sections 103F.505 to 103F.531 or the federal Conservation 
 88.24  Reserve Program as contained in Public Law Number 99-198, and 
 88.25  consisting of a minimum of ten contiguous acres, shall be 
 88.26  classified as agricultural.  Agricultural classification for 
 88.27  property shall be determined with respect to the use of the 
 88.28  whole parcel, excluding the house, garage, and immediately 
 88.29  surrounding one acre of land, and shall not be based upon the 
 88.30  market value of any residential structures on the parcel or 
 88.31  contiguous parcels under the same ownership. 
 88.32     (d) Real estate, excluding the house, garage, and 
 88.33  immediately surrounding one acre of land, of less than ten acres 
 88.34  which is exclusively or intensively used principally for raising 
 88.35  or cultivating agricultural products, shall be considered as 
 88.36  agricultural land, if it is not used primarily for residential 
 89.1   purposes. 
 89.2      Land shall be classified as agricultural even if all or a 
 89.3   portion of the agricultural use of that property is the leasing 
 89.4   to, or use by another person for agricultural purposes. 
 89.5      Classification under this subdivision is not determinative 
 89.6   for qualifying under section 273.111. 
 89.7      The property classification under this section supersedes, 
 89.8   for property tax purposes only, any locally administered 
 89.9   agricultural policies or land use restrictions that define 
 89.10  minimum or maximum farm acreage. 
 89.11     (e) The term "agricultural products" as used in this 
 89.12  subdivision includes production for sale of:  
 89.13     (1) livestock, livestock products, dairy animals, dairy 
 89.14  products, poultry and poultry products, fur-bearing animals, 
 89.15  horticultural and nursery stock described in sections 18.44 to 
 89.16  18.61, fruit of all kinds, vegetables, forage, grains, bees, and 
 89.17  apiary products by the owner; 
 89.18     (2) fish bred for sale and consumption if the fish breeding 
 89.19  occurs on land zoned for agricultural use; 
 89.20     (3) the commercial boarding of horses if the boarding is 
 89.21  done in conjunction with raising or cultivating agricultural 
 89.22  products as defined in clause (1); 
 89.23     (4) property which is owned and operated by nonprofit 
 89.24  organizations used for equestrian activities, excluding racing; 
 89.25  and 
 89.26     (5) game birds and waterfowl bred and raised for use on a 
 89.27  shooting preserve licensed under section 97A.115.  
 89.28     (f) If a parcel used for agricultural purposes is also used 
 89.29  for commercial or industrial purposes, including but not limited 
 89.30  to:  
 89.31     (1) wholesale and retail sales; 
 89.32     (2) processing of raw agricultural products or other goods; 
 89.33     (3) warehousing or storage of processed goods; and 
 89.34     (4) office facilities for the support of the activities 
 89.35  enumerated in clauses (1), (2), and (3), 
 89.36  the assessor shall classify the part of the parcel used for 
 90.1   agricultural purposes as class 1b, 2a, or 2b, whichever is 
 90.2   appropriate, and the remainder in the class appropriate to its 
 90.3   use.  The grading, sorting, and packaging of raw agricultural 
 90.4   products for first sale is considered an agricultural purpose.  
 90.5   A greenhouse or other building where horticultural or nursery 
 90.6   products are grown that is also used for the conduct of retail 
 90.7   sales must be classified as agricultural if it is primarily used 
 90.8   for the growing of horticultural or nursery products from seed, 
 90.9   cuttings, or roots and occasionally as a showroom for the retail 
 90.10  sale of those products.  Use of a greenhouse or building only 
 90.11  for the display of already grown horticultural or nursery 
 90.12  products does not qualify as an agricultural purpose.  
 90.13     The assessor shall determine and list separately on the 
 90.14  records the market value of the homestead dwelling and the one 
 90.15  acre of land on which that dwelling is located.  If any farm 
 90.16  buildings or structures are located on this homesteaded acre of 
 90.17  land, their market value shall not be included in this separate 
 90.18  determination.  
 90.19     (g) To qualify for classification under paragraph (b), 
 90.20  clause (4), a privately owned public use airport must be 
 90.21  licensed as a public airport under section 360.018.  For 
 90.22  purposes of paragraph (b), clause (4), "landing area" means that 
 90.23  part of a privately owned public use airport properly cleared, 
 90.24  regularly maintained, and made available to the public for use 
 90.25  by aircraft and includes runways, taxiways, aprons, and sites 
 90.26  upon which are situated landing or navigational aids.  A landing 
 90.27  area also includes land underlying both the primary surface and 
 90.28  the approach surfaces that comply with all of the following:  
 90.29     (i) the land is properly cleared and regularly maintained 
 90.30  for the primary purposes of the landing, taking off, and taxiing 
 90.31  of aircraft; but that portion of the land that contains 
 90.32  facilities for servicing, repair, or maintenance of aircraft is 
 90.33  not included as a landing area; 
 90.34     (ii) the land is part of the airport property; and 
 90.35     (iii) the land is not used for commercial or residential 
 90.36  purposes. 
 91.1   The land contained in a landing area under paragraph (b), clause 
 91.2   (4), must be described and certified by the commissioner of 
 91.3   transportation.  The certification is effective until it is 
 91.4   modified, or until the airport or landing area no longer meets 
 91.5   the requirements of paragraph (b), clause (4).  For purposes of 
 91.6   paragraph (b), clause (4), "public access area" means property 
 91.7   used as an aircraft parking ramp, apron, or storage hangar, or 
 91.8   an arrival and departure building in connection with the airport.
 91.9      (h) A structure is classified as an agricultural building 
 91.10  if all of the following criteria are met: 
 91.11     (1) the structure is located on property that is classified 
 91.12  as agricultural property under this subdivision; 
 91.13     (2) the structure is occupied exclusively by seasonal farm 
 91.14  workers during the time when they work on that farm, and the 
 91.15  occupants are not charged rent for the privilege of occupying 
 91.16  the property; 
 91.17     (3) the structure meets all applicable health and safety 
 91.18  requirements for the appropriate season; and 
 91.19     (4) the structure is not salable as residential property 
 91.20  because it does not comply with local ordinances relating to 
 91.21  location in relation to streets or roads. 
 91.22     Sec. 19.  Minnesota Statutes 1996, section 273.13, is 
 91.23  amended by adding a subdivision to read: 
 91.24     Subd. 25a.  [ELDERLY ASSISTED LIVING FACILITY 
 91.25  PROPERTY.] "Elderly assisted living facility property" means 
 91.26  residential real estate containing more than one unit held for 
 91.27  use by the tenants or lessees as a residence for periods of 30 
 91.28  days or more, along with community rooms, lounges, activity 
 91.29  rooms, and related facilities, designed to meet the housing, 
 91.30  health, and financial security needs of the elderly.  The real 
 91.31  estate may be owned by an individual, partnership, limited 
 91.32  partnership, for-profit corporation or nonprofit corporation 
 91.33  exempt from federal income taxation under United States Code, 
 91.34  title 26, section 501(c)(3) or related sections.  
 91.35     An admission or initiation fee may be required of tenants.  
 91.36  Monthly charges may include charges for the residential unit, 
 92.1   meals, housekeeping, utilities, social programs, a health care 
 92.2   alert system, or any combination of them.  On-site health care 
 92.3   may be provided by in-house staff or an outside health care 
 92.4   provider. 
 92.5      The assessor shall classify elderly assisted living 
 92.6   facility property, depending upon the property's ownership, 
 92.7   occupancy, and use.  The applicable class rates apply based on 
 92.8   its classification.  If a skilled care nursing home facility is 
 92.9   located on the same parcel as an elderly assisted living 
 92.10  facility, the portion of the property devoted to the elderly 
 92.11  assisted living facility shall be classified under this 
 92.12  subdivision. 
 92.13     Sec. 20.  [273.1651] [TAXATION AND FORFEITURE OF STOCKPILED 
 92.14  METALLIC MINERALS MATERIAL.] 
 92.15     Subdivision 1.  [DEFINITION.] "Stockpiled metallic minerals 
 92.16  material" for purposes of this section, means surface 
 92.17  overburden, rock, lean ore, tailings, or other material that has 
 92.18  been removed from the ground and deposited elsewhere on the 
 92.19  surface in the process of iron ore, taconite, or other metallic 
 92.20  minerals mining, or in the process of beneficiation.  Stockpiled 
 92.21  metallic minerals material does not include processed metallic 
 92.22  minerals concentrates in the form of pellets, chips, briquettes, 
 92.23  fines, or other form which have been prepared for or are in the 
 92.24  process of shipment. 
 92.25     Subd. 2.  [PURPOSE.] The purpose of this section is to 
 92.26  clarify the ownership of stockpiled metallic minerals material 
 92.27  in this state.  Depending on the intent of the person who 
 92.28  extracted the material from the ground, stockpiled metallic 
 92.29  minerals material may or may not be owned separately and apart 
 92.30  from the fee title to the surface of the real property.  The 
 92.31  legislature finds that the uncertainty of ownership of 
 92.32  stockpiled metallic minerals material located on real property 
 92.33  that becomes tax forfeited has created a burden on the public 
 92.34  owner of the surface of the real property and an impediment to 
 92.35  productive management or use of a public resource. 
 92.36     Subd. 3.  [TAXATION AND FORFEITURE.] From and after the 
 93.1   effective date of this section, for purposes of taxation, the 
 93.2   definition of "real property," as contained in section 272.03, 
 93.3   subdivision 1, includes stockpiled metallic minerals material.  
 93.4   Nothing in this subdivision shall be construed to subject 
 93.5   stockpiled metallic minerals material to the general property 
 93.6   tax when the stockpiled metallic minerals material is exempt 
 93.7   from the general property tax pursuant to section 298.015 or 
 93.8   298.25.  If the surface of the real property forfeits for 
 93.9   delinquent taxes, stockpiled metallic minerals material located 
 93.10  on the real property forfeits with the surface of the property. 
 93.11     Subd. 4.  [PRIOR FORFEITURE.] Stockpiled metallic minerals 
 93.12  material located on real property that forfeited prior to the 
 93.13  effective date of this section or forfeits due to a judgment for 
 93.14  delinquent taxes issued prior to the effective date of this 
 93.15  section shall be assessed and taxed as real property.  The tax 
 93.16  applies only to stockpiled metallic minerals material located on 
 93.17  real property that remains in the ownership of the state or a 
 93.18  political subdivision of the state.  The tax shall be based on 
 93.19  the market value of the rental of the property for storage of 
 93.20  stockpiled metallic minerals material. 
 93.21     Subd. 5.  [EXCEPTIONS; TAX LAWS.] (a) The tax imposed 
 93.22  pursuant to this section shall not be imposed on the following: 
 93.23     (1) stockpiled metallic minerals material valued and taxed 
 93.24  under other laws relating to the taxation of minerals, gas, 
 93.25  coal, oil, or other similar interests; 
 93.26     (2) stockpiled metallic minerals material that is exempt 
 93.27  from taxation pursuant to constitutional or related statutory 
 93.28  provisions; or 
 93.29     (3) stockpiled metallic minerals material that is owned by 
 93.30  the state.  
 93.31     (b) All laws for the enforcement of taxes on real property 
 93.32  shall apply to the tax imposed pursuant to this section on 
 93.33  stockpiled metallic minerals material. 
 93.34     Subd. 6.  [FEE OWNER.] For purposes of section 276.041, the 
 93.35  owner of stockpiled metallic minerals material is a fee owner. 
 93.36     Sec. 21.  Minnesota Statutes 1996, section 273.18, is 
 94.1   amended to read: 
 94.2      273.18 [LISTING, VALUATION, AND ASSESSMENT OF EXEMPT 
 94.3   PROPERTY BY COUNTY AUDITORS.] 
 94.4      (a) In every sixth year after the year 1926, the county 
 94.5   auditor shall enter, in a separate place in the real estate 
 94.6   assessment books, the description of each tract of real property 
 94.7   exempt by law from taxation, with the name of the owner, if 
 94.8   known, and the assessor shall value and assess the same in the 
 94.9   same manner that other real property is valued and assessed, and 
 94.10  shall designate in each case the purpose for which the property 
 94.11  is used.  
 94.12     (b) For purposes of the apportionment of fire state aid 
 94.13  under section 69.021, subdivision 7, the county auditor shall 
 94.14  include on the abstract of assessment of exempt real property 
 94.15  filed under this section, the total number of acres of all 
 94.16  natural resources lands for which in lieu payments are made 
 94.17  under sections 477A.11 to 477A.14.  The assessor shall estimate 
 94.18  its market value, provided that if the assessor is not able to 
 94.19  estimate the market value of the land on a per parcel basis, the 
 94.20  assessor shall furnish the commissioner of revenue with an 
 94.21  estimate of the average value per acre of this land within the 
 94.22  county. 
 94.23     Sec. 22.  Minnesota Statutes 1996, section 274.01, is 
 94.24  amended to read: 
 94.25     274.01 [BOARD OF REVIEW.] 
 94.26     Subdivision 1.  [ORDINARY BOARD; MEETINGS, DEADLINES, 
 94.27  GRIEVANCES.] (a) The town board of a town, or the council or 
 94.28  other governing body of a city, is the board of review 
 94.29  except (1) in cities whose charters provide for a board of 
 94.30  equalization or (2) in any city or town that has transferred its 
 94.31  local board of review power and duties to the county board as 
 94.32  provided in subdivision 3.  The county assessor shall fix a day 
 94.33  and time when the board or the board of equalization shall meet 
 94.34  in the assessment districts of the county.  On or before 
 94.35  February 15 of each year the assessor shall give written notice 
 94.36  of the time to the city or town clerk.  Notwithstanding the 
 95.1   provisions of any charter to the contrary, the meetings must be 
 95.2   held between April 1 and May 31 each year.  The clerk shall give 
 95.3   published and posted notice of the meeting at least ten days 
 95.4   before the date of the meeting.  
 95.5      If in any county, at least 25 percent of the total net tax 
 95.6   capacity of a city or town is noncommercial seasonal residential 
 95.7   recreational property classified under section 273.13, 
 95.8   subdivision 25, the county must hold two countywide 
 95.9   informational meetings on Saturdays.  The meetings will allow 
 95.10  noncommercial seasonal residential recreational taxpayers to 
 95.11  discuss their property valuation with the appropriate assessment 
 95.12  staff.  These Saturday informational meetings must be scheduled 
 95.13  to allow the owner of the noncommercial seasonal residential 
 95.14  recreational property the opportunity to attend one of the 
 95.15  meetings prior to the scheduled board of review for their city 
 95.16  or town.  The Saturday meeting dates must be contained on the 
 95.17  notice of valuation of real property under section 273.121.  
 95.18     The board shall meet at the office of the clerk to review 
 95.19  the assessment and classification of property in the town or 
 95.20  city.  No changes in valuation or classification which are 
 95.21  intended to correct errors in judgment by the county assessor 
 95.22  may be made by the county assessor after the board of review or 
 95.23  the county board of equalization has adjourned in those cities 
 95.24  or towns that hold a local board of review; however, corrections 
 95.25  of errors that are merely clerical in nature or changes that 
 95.26  extend homestead treatment to property are permitted after 
 95.27  adjournment until the tax extension date for that assessment 
 95.28  year.  The changes must be fully documented and maintained in 
 95.29  the assessor's office and must be available for review by any 
 95.30  person.  A copy of the changes made during this period in those 
 95.31  cities or towns that hold a local board of review must be sent 
 95.32  to the county board no later than December 31 of the assessment 
 95.33  year.  
 95.34     (b) The board shall determine whether the taxable property 
 95.35  in the town or city has been properly placed on the list and 
 95.36  properly valued by the assessor.  If real or personal property 
 96.1   has been omitted, the board shall place it on the list with its 
 96.2   market value, and correct the assessment so that each tract or 
 96.3   lot of real property, and each article, parcel, or class of 
 96.4   personal property, is entered on the assessment list at its 
 96.5   market value.  No assessment of the property of any person may 
 96.6   be raised unless the person has been duly notified of the intent 
 96.7   of the board to do so.  On application of any person feeling 
 96.8   aggrieved, the board shall review the assessment or 
 96.9   classification, or both, and correct it as appears just.  
 96.10     (c) A local board of review may reduce assessments upon 
 96.11  petition of the taxpayer but the total reductions must not 
 96.12  reduce the aggregate assessment made by the county assessor by 
 96.13  more than one percent.  If the total reductions would lower the 
 96.14  aggregate assessments made by the county assessor by more than 
 96.15  one percent, none of the adjustments may be made.  The assessor 
 96.16  shall correct any clerical errors or double assessments 
 96.17  discovered by the board of review without regard to the one 
 96.18  percent limitation.  
 96.19     (d) A majority of the members may act at the meeting, and 
 96.20  adjourn from day to day until they finish hearing the cases 
 96.21  presented.  The assessor shall attend, with the assessment books 
 96.22  and papers, and take part in the proceedings, but must not 
 96.23  vote.  The county assessor, or an assistant delegated by the 
 96.24  county assessor shall attend the meetings.  The board shall list 
 96.25  separately, on a form appended to the assessment book, all 
 96.26  omitted property added to the list by the board and all items of 
 96.27  property increased or decreased, with the market value of each 
 96.28  item of property, added or changed by the board, placed opposite 
 96.29  the item.  The county assessor shall enter all changes made by 
 96.30  the board in the assessment book.  
 96.31     (e) Except as provided in subdivision 3, if a person fails 
 96.32  to appear in person, by counsel, or by written communication 
 96.33  before the board after being duly notified of the board's intent 
 96.34  to raise the assessment of the property, or if a person feeling 
 96.35  aggrieved by an assessment or classification fails to apply for 
 96.36  a review of the assessment or classification, the person may not 
 97.1   appear before the county board of equalization for a review of 
 97.2   the assessment or classification.  This paragraph does not apply 
 97.3   if an assessment was made after the board meeting, as provided 
 97.4   in section 273.01, or if the person can establish not having 
 97.5   received notice of market value at least five days before the 
 97.6   local board of review meeting.  
 97.7      (f) The board of review or the board of equalization must 
 97.8   complete its work and adjourn within 20 days from the time of 
 97.9   convening stated in the notice of the clerk, unless a longer 
 97.10  period is approved by the commissioner of revenue.  No action 
 97.11  taken after that date is valid.  All complaints about an 
 97.12  assessment or classification made after the meeting of the board 
 97.13  must be heard and determined by the county board of 
 97.14  equalization.  A nonresident may, at any time, before the 
 97.15  meeting of the board of review file written objections to an 
 97.16  assessment or classification with the county assessor.  The 
 97.17  objections must be presented to the board of review at its 
 97.18  meeting by the county assessor for its consideration. 
 97.19     Subd. 2.  [SPECIAL BOARD; DUTIES DELEGATED.] The governing 
 97.20  body of a city, including a city whose charter provides for a 
 97.21  board of equalization, may appoint a special board of review.  
 97.22  The city may delegate to the special board of review all of the 
 97.23  powers and duties in subdivision 1.  The special board of review 
 97.24  shall serve at the direction and discretion of the appointing 
 97.25  body, subject to the restrictions imposed by law.  The 
 97.26  appointing body shall determine the number of members of the 
 97.27  board, the compensation and expenses to be paid, and the term of 
 97.28  office of each member.  At least one member of the special board 
 97.29  of review must be an appraiser, realtor, or other person 
 97.30  familiar with property valuations in the assessment district. 
 97.31     Subd. 3.  [LOCAL BOARD DUTIES TRANSFERRED TO COUNTY.] The 
 97.32  town board of any town or the governing body of any home rule 
 97.33  charter or statutory city may transfer its powers and duties 
 97.34  under subdivision 1 to the county board, and no longer perform 
 97.35  the function of a local board.  Before the town board or the 
 97.36  governing body of a city transfers the powers and duties to the 
 98.1   county board, the town board or city's governing body shall give 
 98.2   public notice of the meeting at which the proposal for transfer 
 98.3   is to be considered.  The public notice shall follow the 
 98.4   procedure contained in section 471.705, subdivision 1c, 
 98.5   paragraph (b).  A transfer of duties as permitted under this 
 98.6   subdivision must be communicated to the county assessor, in 
 98.7   writing, before December 1 of any year to be effective for the 
 98.8   following year's assessment.  This transfer of duties to the 
 98.9   county may either be permanent or for a specified number of 
 98.10  years, provided that the transfer cannot be for less than three 
 98.11  years.  Its length must be stated in writing.  A town or city 
 98.12  may renew its option to transfer.  The option to transfer duties 
 98.13  under this subdivision is only available to a town or city whose 
 98.14  assessment is done by the county. 
 98.15     Sec. 23.  Minnesota Statutes 1996, section 274.13, is 
 98.16  amended by adding a subdivision to read: 
 98.17     Subd. 1b.  [ASSESSMENT CHANGES.] No changes in valuation or 
 98.18  classification that are intended to correct errors in judgment 
 98.19  by the county assessor may be made by the county assessor after 
 98.20  the county board of equalization has adjourned; however, 
 98.21  corrections of errors that are merely clerical in nature or 
 98.22  changes that extend homestead treatment to property are 
 98.23  permitted after adjournment until the tax extension date for 
 98.24  that assessment year.  The changes must be fully documented and 
 98.25  maintained in the assessor's office and must be available for 
 98.26  review by any person. 
 98.27     Sec. 24.  Minnesota Statutes 1996, section 274.13, is 
 98.28  amended by adding a subdivision to read: 
 98.29     Subd. 1c.  [ALTERNATIVE REVIEW OPTION.] The county shall 
 98.30  notify taxpayers whose town or city elected to transfer its 
 98.31  powers and duties under section 274.01 to the county.  Prior to 
 98.32  the time of the county board of equalization, the county shall 
 98.33  make available to those taxpayers a procedure for a review of 
 98.34  its assessments, including, but not limited to, open book 
 98.35  meetings.  This alternative review process shall take place in 
 98.36  April and May.  
 99.1      Sec. 25.  Minnesota Statutes 1996, section 281.13, is 
 99.2   amended to read: 
 99.3      281.13 [NOTICE OF EXPIRATION OF REDEMPTION.] 
 99.4      Every person holding a tax certificate after expiration of 
 99.5   three years, or the redemption period specified in section 
 99.6   281.17 if shorter, after the date of the tax sale under which 
 99.7   the same was issued, may present such certificate to the county 
 99.8   auditor; and thereupon the auditor shall prepare, under the 
 99.9   auditor's hand and official seal, a notice, directed to the 
 99.10  person or persons in whose name such lands are assessed, 
 99.11  specifying the description thereof, the amount for which the 
 99.12  same was sold, the amount required to redeem the same, exclusive 
 99.13  of the costs to accrue upon such notice, and the time when the 
 99.14  redemption period will expire.  If, at the time when any tax 
 99.15  certificate is so presented, such lands are assessed in the name 
 99.16  of the holder of the certificate, such notice shall be directed 
 99.17  also to the person or persons in whose name title in fee of such 
 99.18  land appears of record in the office of the county recorder.  
 99.19  The auditor shall deliver such notice to the party applying 
 99.20  therefor, who shall deliver it to the sheriff of the proper 
 99.21  county or any other person not less than 18 years of age for 
 99.22  service.  Within 20 days after receiving it, the sheriff or 
 99.23  other person serving the notice shall serve such notice upon the 
 99.24  persons to whom it is directed, if to be found in the sheriff's 
 99.25  county, in the manner prescribed for serving a summons in a 
 99.26  civil action; if not so found, then upon the person in 
 99.27  possession of the land, and make return thereof to the auditor.  
 99.28  In the case of land held in joint tenancy the notice shall be 
 99.29  served upon each joint tenant.  If one or more of the persons to 
 99.30  whom the notice is directed cannot be found in the county, and 
 99.31  there is no one in possession of the land, of each of which 
 99.32  facts the return of the sheriff or other person serving the 
 99.33  notice so specifying shall be prima facie evidence, service 
 99.34  shall be made upon those persons that can be found and service 
 99.35  shall also be made by two weeks' published notice, proof of 
 99.36  which publication shall be filed with the auditor. 
100.1      When the records in the office of the county recorder show 
100.2   that any lot or tract of land is encumbered by an unsatisfied 
100.3   mortgage or other lien, and show the post office address of the 
100.4   mortgagee or lienee, or if the same has been assigned, the post 
100.5   office address of the assignee, the person holding such tax 
100.6   certificate shall serve a copy of such notice upon such 
100.7   mortgagee, lienee, or assignee by certified mail addressed to 
100.8   such mortgagee, lienee, or assignee at the post office address 
100.9   of the mortgagee, lienee, or assignee as disclosed by the 
100.10  records in the office of the county recorder, at least 60 days 
100.11  prior to the time when the redemption period will expire. 
100.12     The notice herein provided for shall be sufficient if 
100.13  substantially in the following form: 
100.14                "NOTICE OF EXPIRATION OF REDEMPTION 
100.15     Office of the County Auditor 
100.16     County of ......................., State of Minnesota. 
100.17     To .............................. 
100.18     You are hereby notified that the following described piece 
100.19  or parcel of land, situated in the county of 
100.20  ......................., and State of Minnesota, and known and 
100.21  described as follows:  ......... 
100.22  ............................................................ 
100.23  .........., is now assessed in your name; that on the 
100.24  ........................ day of May, ....................., at 
100.25  the sale of land pursuant to the real estate tax judgment, duly 
100.26  given and made in and by the district court in and for said 
100.27  county of ......................................, on the 
100.28  ................................. day of March, .............., 
100.29  in proceedings to enforce the payment of taxes delinquent upon 
100.30  real estate for the year .............. for said county of 
100.31  ........... ......................., the above described piece 
100.32  or parcel of land was sold for the sum of $............., and 
100.33  the amount required to redeem such piece or parcel of land from 
100.34  such sale, exclusive of the cost to accrue upon this notice, is 
100.35  the sum of $............, and interest at the rate of 
100.36  ............... percent per annum from said 
101.1   ............................. day of ......................, 
101.2   ..................., to the day such redemption is made, and 
101.3   that the tax certificate has been presented to me by the holder 
101.4   thereof, and the time for redemption of such piece or parcel of 
101.5   land from such sale will expire 60 days after the service of 
101.6   this notice and proof thereof has been filed in my office. 
101.7      Witness my hand and official seal this 
101.8   ............................  day of ................, 
101.9   ................. 
101.10     ................. 
101.11     (OFFICIAL SEAL) 
101.12     County Auditor of 
101.13     ...................... County, Minnesota." 
101.14     Sec. 26.  Minnesota Statutes 1996, section 281.23, 
101.15  subdivision 6, is amended to read: 
101.16     Subd. 6.  [SERVICE BY SHERIFF OF NOTICE.] Forthwith after 
101.17  the commencement of such publication the county auditor shall 
101.18  deliver to the sheriff of the county or any other person not 
101.19  less than 18 years of age a sufficient number of copies of such 
101.20  notice of expiration of redemption for service upon the persons 
101.21  in possession of all parcels of such land as are actually 
101.22  occupied.  Within 30 days after receipt thereof, the sheriff or 
101.23  other person serving the notice shall make such investigation as 
101.24  may be necessary to ascertain whether the parcels covered by 
101.25  such notice are actually occupied or not, and shall serve a copy 
101.26  of such notice of expiration of redemption upon the person in 
101.27  possession of each parcel found to be so occupied, in the manner 
101.28  prescribed for serving summons in a civil action.  The 
101.29  sheriff or other person serving the notice shall make prompt 
101.30  return to the auditor as to all notices so served and as to all 
101.31  parcels found vacant and unoccupied.  Such return shall be made 
101.32  upon a copy of such notice and shall be prima facie evidence of 
101.33  the facts therein stated. 
101.34     Unless compensation for such services is otherwise provided 
101.35  by law If the notice is served by the sheriff, the sheriff shall 
101.36  receive from the county, in addition to other compensation 
102.1   prescribed by law, such fees and mileage for service on persons 
102.2   in possession as are prescribed by law for such service in other 
102.3   cases, and shall also receive such compensation for making 
102.4   investigation and return as to vacant and unoccupied lands as 
102.5   the county board may fix, subject to appeal to the district 
102.6   court as in case of other claims against the county.  As to 
102.7   either service upon persons in possession or return as to vacant 
102.8   lands, the sheriff shall charge mileage only for one trip if the 
102.9   occupants of more than two tracts are served simultaneously, and 
102.10  in such case mileage shall be prorated and charged equitably 
102.11  against all such owners. 
102.12     Sec. 27.  Minnesota Statutes 1996, section 281.273, is 
102.13  amended to read: 
102.14     281.273 [EXPIRATION OF TIME OF REDEMPTION ON LANDS OWNED BY 
102.15  PERSONS IN MILITARY SERVICE.] 
102.16     When a county sheriff or other person serves notice of 
102.17  expiration of the time for redemption of any parcel of real 
102.18  property from delinquent taxes upon any occupant of the real 
102.19  property, the sheriff or other person shall inquire of the 
102.20  occupant and otherwise as the sheriff or other person may deem 
102.21  proper whether the real property was owned and occupied for 
102.22  dwelling, professional, business or agricultural purposes by a 
102.23  person in the military service of the United States as defined 
102.24  in the Soldiers' and Sailors' Civil Relief Act of 1940, as 
102.25  amended, or the person's dependents at the commencement of the 
102.26  period of military service.  On finding that the real property 
102.27  is so owned, the sheriff or other person shall make a 
102.28  certificate to the county auditor, setting forth the description 
102.29  of the property, the name of the owner, the particulars of the 
102.30  owner's military service so far as ascertained or claimed, and 
102.31  the names and addresses of the persons of whom the sheriff or 
102.32  other person made inquiry.  The certificate shall be filed with 
102.33  the county auditor and shall be prima facie evidence of the 
102.34  facts stated.  If the real property described in the certificate 
102.35  becomes forfeited to the state, it shall be withheld from sale 
102.36  or conveyance as tax-forfeited property in accordance with and 
103.1   subject to the provisions of the Soldiers' and Sailors' Civil 
103.2   Relief Act of 1940, as amended, except that the requirement in 
103.3   United States Code, title 50, section 560, that the property be 
103.4   occupied by the dependent or employee of the person in military 
103.5   service does not apply.  The period of withholding from sale or 
103.6   conveyance shall be no longer than is required by that act.  If 
103.7   upon further investigation the sheriff or other person finds at 
103.8   any time that the certificate is erroneous in any particular, 
103.9   the sheriff or other person shall file a supplemental 
103.10  certificate referring to the matter in error and stating the 
103.11  facts as found.  The supplemental certificate shall be prima 
103.12  facie evidence of the facts stated, and shall supersede any 
103.13  prior certificate so far as in conflict therewith.  If it 
103.14  appears from the supplemental certificate that the owner of the 
103.15  real property affected is not entitled to have the same withheld 
103.16  from sale under the Soldiers' and Sailors' Civil Relief Act of 
103.17  1940, as amended, the property shall not be withheld from sale 
103.18  further under this section.  
103.19     Sec. 28.  Minnesota Statutes 1996, section 281.276, is 
103.20  amended to read: 
103.21     281.276 [RETURN OF SHERIFF MUST SHOW MILITARY SERVICE.] 
103.22     Unless a sheriff's certificate showing military service is 
103.23  filed as required by section 281.273, it shall be presumed that 
103.24  the owner of the property described in the notice of expiration 
103.25  of the time for redemption from delinquent taxes is not in such 
103.26  service.  The filing of the sheriff's certificate provided for 
103.27  in section 281.273 shall not affect the forfeiture of the real 
103.28  property described in such notice of the expiration of the time 
103.29  for redemption from delinquent taxes or their proceedings 
103.30  relating thereto except as expressly herein provided. 
103.31     Sec. 29.  Minnesota Statutes 1996, section 282.01, 
103.32  subdivision 8, is amended to read: 
103.33     Subd. 8.  [MINERALS IN TAX-FORFEITED LAND AND TAX-FORFEITED 
103.34  STOCKPILED METALLIC MINERALS MATERIAL SUBJECT TO MINING; 
103.35  PROCEDURES.] In case the commissioner of natural resources shall 
103.36  notify the county auditor of any county in writing that the 
104.1   minerals in any tax-forfeited land or tax-forfeited stockpiled 
104.2   metallic minerals material located on tax-forfeited land in such 
104.3   county have been designated as a mining unit as provided by law, 
104.4   or that such minerals or tax-forfeited stockpiled metallic 
104.5   minerals material are subject to a mining permit or lease issued 
104.6   therefor as provided by law, the surface of such tax-forfeited 
104.7   land shall be subject to disposal and use for mining purposes 
104.8   pursuant to such designation, permit, or lease, and shall be 
104.9   withheld from sale or lease by the county auditor until the 
104.10  commissioner shall notify the county auditor that such land has 
104.11  been removed from the list of mining units or that any mining 
104.12  permit or lease theretofore issued thereon is no longer in 
104.13  force; provided, that the surface of such tax-forfeited land may 
104.14  be leased by the county auditor as provided by law, with the 
104.15  written approval of the commissioner, subject to disposal and 
104.16  use for mining purposes as herein provided and to any special 
104.17  conditions relating thereto that the commissioner may prescribe, 
104.18  also subject to cancellation for mining purposes on three months 
104.19  written notice from the commissioner to the county auditor. 
104.20     Sec. 30.  Minnesota Statutes 1996, section 282.04, 
104.21  subdivision 1, is amended to read: 
104.22     Subdivision 1.  [TIMBER SALES; LAND LEASES AND USES.] (a) 
104.23  The county auditor may sell timber upon any tract that may be 
104.24  approved by the natural resources commissioner.  Such sale of 
104.25  timber shall be made for cash at not less than the appraised 
104.26  value determined by the county board to the highest bidder after 
104.27  not less than one week's published notice in an official paper 
104.28  within the county.  Any timber offered at such public sale and 
104.29  not sold may thereafter be sold at private sale by the county 
104.30  auditor at not less than the appraised value thereof, until such 
104.31  time as the county board may withdraw such timber from sale.  
104.32  The appraised value of the timber and the forestry practices to 
104.33  be followed in the cutting of said timber shall be approved by 
104.34  the commissioner of natural resources.  
104.35     (b) Payment of the full sale price of all timber sold on 
104.36  tax-forfeited lands shall be made in cash at the time of the 
105.1   timber sale, except in the case of oral or sealed bid auction 
105.2   sales, the down payment shall be no less than 15 percent of the 
105.3   appraised value, and the balance shall be paid prior to entry.  
105.4   In the case of auction sales that are partitioned and sold as a 
105.5   single sale with predetermined cutting blocks, the down payment 
105.6   shall be no less than 15 percent of the appraised price of the 
105.7   entire timber sale which may be held until the satisfactory 
105.8   completion of the sale or applied in whole or in part to the 
105.9   final cutting block.  The value of each separate block must be 
105.10  paid in full before any cutting may begin in that block.  With 
105.11  the permission of the county administrator the purchaser may 
105.12  enter unpaid blocks and cut necessary timber incidental to 
105.13  developing logging roads as may be needed to log other blocks 
105.14  provided that no timber may be removed from an unpaid block 
105.15  until separately scaled and paid for.  
105.16     (c) The county board may require final settlement on the 
105.17  basis of a scale of cut products.  Any parcels of land from 
105.18  which timber is to be sold by scale of cut products shall be so 
105.19  designated in the published notice of sale above mentioned, in 
105.20  which case the notice shall contain a description of such 
105.21  parcels, a statement of the estimated quantity of each species 
105.22  of timber thereon and the appraised price of each specie of 
105.23  timber for 1,000 feet, per cord or per piece, as the case may 
105.24  be.  In such cases any bids offered over and above the appraised 
105.25  prices shall be by percentage, the percent bid to be added to 
105.26  the appraised price of each of the different species of timber 
105.27  advertised on the land.  The purchaser of timber from such 
105.28  parcels shall pay in cash at the time of sale at the rate bid 
105.29  for all of the timber shown in the notice of sale as estimated 
105.30  to be standing on the land, and in addition shall pay at the 
105.31  same rate for any additional amounts which the final scale shows 
105.32  to have been cut or was available for cutting on the land at the 
105.33  time of sale under the terms of such sale.  Where the final 
105.34  scale of cut products shows that less timber was cut or was 
105.35  available for cutting under terms of such sale than was 
105.36  originally paid for, the excess payment shall be refunded from 
106.1   the forfeited tax sale fund upon the claim of the purchaser, to 
106.2   be audited and allowed by the county board as in case of other 
106.3   claims against the county.  No timber, except hardwood pulpwood, 
106.4   may be removed from such parcels of land or other designated 
106.5   landings until scaled by a person or persons designated by the 
106.6   county board and approved by the commissioner of natural 
106.7   resources.  Landings other than the parcel of land from which 
106.8   timber is cut may be designated for scaling by the county board 
106.9   by written agreement with the purchaser of the timber.  The 
106.10  county board may, by written agreement with the purchaser and 
106.11  with a consumer designated by the purchaser when the timber is 
106.12  sold by the county auditor, and with the approval of the 
106.13  commissioner of natural resources, accept the consumer's scale 
106.14  of cut products delivered at the consumer's landing.  No timber 
106.15  shall be removed until fully paid for in cash.  Small amounts of 
106.16  timber not exceeding $3,000 in appraised valuation may be sold 
106.17  for not less than the full appraised value at private sale to 
106.18  individual persons without first publishing notice of sale or 
106.19  calling for bids, provided that in case of such sale involving a 
106.20  total appraised value of more than $200 the sale shall be made 
106.21  subject to final settlement on the basis of a scale of cut 
106.22  products in the manner above provided and not more than two such 
106.23  sales, directly or indirectly to any individual shall be in 
106.24  effect at one time. 
106.25     (d) As directed by the county board, the county auditor may 
106.26  lease tax-forfeited land to individuals, corporations or 
106.27  organized subdivisions of the state at public or private vendue, 
106.28  and at such prices and under such terms as the county board may 
106.29  prescribe, for use as cottage and camp sites and for 
106.30  agricultural purposes and for the purpose of taking and removing 
106.31  of hay, stumpage, sand, gravel, clay, rock, marl, and black dirt 
106.32  therefrom, and for garden sites and other temporary uses 
106.33  provided that no leases shall be for a period to exceed ten 
106.34  years; provided, further that any leases involving a 
106.35  consideration of more than $1,500 per year, except to an 
106.36  organized subdivision of the state shall first be offered at 
107.1   public sale in the manner provided herein for sale of timber.  
107.2   Upon the sale of any such leased land, it shall remain subject 
107.3   to the lease for not to exceed one year from the beginning of 
107.4   the term of the lease.  Any rent paid by the lessee for the 
107.5   portion of the term cut off by such cancellation shall be 
107.6   refunded from the forfeited tax sale fund upon the claim of the 
107.7   lessee, to be audited and allowed by the county board as in case 
107.8   of other claims against the county. 
107.9      (e) As directed by the county board, the county auditor may 
107.10  lease tax-forfeited land to individuals, corporations, or 
107.11  organized subdivisions of the state at public or private vendue, 
107.12  at such prices and under such terms as the county board may 
107.13  prescribe, for the purpose of taking and removing for use for 
107.14  road construction and other purposes tax-forfeited stockpiled 
107.15  iron-bearing material.  The county auditor must determine that 
107.16  the material is needed and suitable for use in the construction 
107.17  or maintenance of a road, tailings basin, settling basin, dike, 
107.18  dam, bank fill, or other works on public or private property, 
107.19  and that the use would be in the best interests of the public.  
107.20  No lease shall exceed ten years.  The use of a stockpile for 
107.21  these purposes must first be approved by the commissioner of 
107.22  natural resources.  The request shall be deemed approved unless 
107.23  the requesting county is notified to the contrary by the 
107.24  commissioner of natural resources within six months after 
107.25  receipt of a request for approval for use of a stockpile.  Once 
107.26  use of a stockpile has been approved, the county may continue to 
107.27  lease it for these purposes until approval is withdrawn by the 
107.28  commissioner of natural resources. 
107.29     (f) The county auditor, with the approval of the county 
107.30  board is authorized to grant permits, licenses, and leases to 
107.31  tax-forfeited lands for the depositing of stripping, lean ores, 
107.32  tailings, or waste products from mines or ore milling plants, 
107.33  upon such conditions and for such consideration and for such 
107.34  period of time, not exceeding 15 years, as the county board may 
107.35  determine; said permits, licenses, or leases to be subject to 
107.36  approval by the commissioner of natural resources. 
108.1      (g) Any person who removes any timber from tax-forfeited 
108.2   land before said timber has been scaled and fully paid for as 
108.3   provided in this subdivision is guilty of a misdemeanor. 
108.4      (h) The county auditor may, with the approval of the county 
108.5   board, and without first offering at public sale, grant leases, 
108.6   for a term not exceeding 25 years, for the removal of peat from 
108.7   tax-forfeited lands upon such terms and conditions as the county 
108.8   board may prescribe.  Any lease for the removal of peat from 
108.9   tax-forfeited lands must first be reviewed and approved by the 
108.10  commissioner of natural resources if the lease covers 320 or 
108.11  more acres.  No lease for the removal of peat shall be made by 
108.12  the county auditor pursuant to this section without first 
108.13  holding a public hearing on the auditor's intention to lease.  
108.14  One printed notice in a legal newspaper in the county at least 
108.15  ten days before the hearing, and posted notice in the courthouse 
108.16  at least 20 days before the hearing shall be given of the 
108.17  hearing. 
108.18     Sec. 31.  Minnesota Statutes 1996, section 469.012, 
108.19  subdivision 1, is amended to read: 
108.20     Subdivision 1.  [SCHEDULE OF POWERS.] An authority shall be 
108.21  a public body corporate and politic and shall have all the 
108.22  powers necessary or convenient to carry out the purposes of 
108.23  sections 469.001 to 469.047, except that the power to levy and 
108.24  collect taxes or special assessments is limited to the power 
108.25  provided in sections 469.027 to 469.033.  Its powers include the 
108.26  following powers in addition to others granted in sections 
108.27  469.001 to 469.047:  
108.28     (1) to sue and be sued; to have a seal, which shall be 
108.29  judicially noticed, and to alter it; to have perpetual 
108.30  succession; and to make, amend, and repeal rules consistent with 
108.31  sections 469.001 to 469.047; 
108.32     (2) to employ an executive director, technical experts, and 
108.33  officers, agents, and employees, permanent and temporary, that 
108.34  it requires, and determine their qualifications, duties, and 
108.35  compensation; for legal services it requires, to call upon the 
108.36  chief law officer of the city or to employ its own counsel and 
109.1   legal staff; so far as practicable, to use the services of local 
109.2   public bodies in its area of operation, provided that those 
109.3   local public bodies, if requested, shall make the services 
109.4   available; 
109.5      (3) to delegate to one or more of its agents or employees 
109.6   the powers or duties it deems proper; 
109.7      (4) within its area of operation, to undertake, prepare, 
109.8   carry out, and operate projects and to provide for the 
109.9   construction, reconstruction, improvement, extension, 
109.10  alteration, or repair of any project or part thereof; 
109.11     (5) subject to the provisions of section 469.026, to give, 
109.12  sell, transfer, convey, or otherwise dispose of real or personal 
109.13  property or any interest therein and to execute leases, deeds, 
109.14  conveyances, negotiable instruments, purchase agreements, and 
109.15  other contracts or instruments, and take action that is 
109.16  necessary or convenient to carry out the purposes of these 
109.17  sections; 
109.18     (6) within its area of operation, to acquire real or 
109.19  personal property or any interest therein by gifts, grant, 
109.20  purchase, exchange, lease, transfer, bequest, devise, or 
109.21  otherwise, and by the exercise of the power of eminent domain, 
109.22  in the manner provided by chapter 117, to acquire real property 
109.23  which it may deem necessary for its purposes, after the adoption 
109.24  by it of a resolution declaring that the acquisition of the real 
109.25  property is necessary to eliminate one or more of the conditions 
109.26  found to exist in the resolution adopted pursuant to section 
109.27  469.003 or to provide decent, safe, and sanitary housing for 
109.28  persons of low and moderate income, or is necessary to carry out 
109.29  a redevelopment project.  Real property needed or convenient for 
109.30  a project may be acquired by the authority for the project by 
109.31  condemnation pursuant to this section.  This includes any 
109.32  property devoted to a public use, whether or not held in trust, 
109.33  notwithstanding that the property may have been previously 
109.34  acquired by condemnation or is owned by a public utility 
109.35  corporation, because the public use in conformity with the 
109.36  provisions of sections 469.001 to 469.047 shall be deemed a 
110.1   superior public use.  Property devoted to a public use may be so 
110.2   acquired only if the governing body of the municipality has 
110.3   approved its acquisition by the authority.  An award of 
110.4   compensation shall not be increased by reason of any increase in 
110.5   the value of the real property caused by the assembly, clearance 
110.6   or reconstruction, or proposed assembly, clearance or 
110.7   reconstruction for the purposes of sections 469.001 to 469.047 
110.8   of the real property in an area; 
110.9      (7) within its area of operation, and without the adoption 
110.10  of an urban renewal plan, to acquire, by all means as set forth 
110.11  in clause (6) but without the adoption of a resolution provided 
110.12  for in clause (6), real property, and to demolish, remove, 
110.13  rehabilitate, or reconstruct the buildings and improvements or 
110.14  construct new buildings and improvements thereon, or to so 
110.15  provide through other means as set forth in Laws 1974, chapter 
110.16  228, or to grade, fill, and construct foundations or otherwise 
110.17  prepare the site for improvements.  The authority may dispose of 
110.18  the property pursuant to section 469.029, provided that the 
110.19  provisions of section 469.029 requiring conformance to an urban 
110.20  renewal plan shall not apply.  The authority may finance these 
110.21  activities by means of the redevelopment project fund or by 
110.22  means of tax increments or tax increment bonds or by the methods 
110.23  of financing provided for in section 469.033 or by means of 
110.24  contributions from the municipality provided for in section 
110.25  469.041, clause (9), or by any combination of those means.  Real 
110.26  property with buildings or improvements thereon shall only be 
110.27  acquired under this clause when the buildings or improvements 
110.28  are substandard.  The exercise of the power of eminent domain 
110.29  under this clause shall be limited to real property which 
110.30  contains, or has contained within the three years immediately 
110.31  preceding the exercise of the power of eminent domain and is 
110.32  currently vacant, buildings and improvements which are vacated 
110.33  and substandard.  Notwithstanding the prior sentence, in cities 
110.34  of the first class the exercise of the power of eminent domain 
110.35  under this clause shall be limited to real property which 
110.36  contains, or has contained within the three years immediately 
111.1   preceding the exercise of the power of eminent domain, buildings 
111.2   and improvements which are substandard.  For the purpose of this 
111.3   clause, substandard buildings or improvements mean hazardous 
111.4   buildings as defined in section 463.15, subdivision 3, or 
111.5   buildings or improvements that are dilapidated or obsolescent, 
111.6   faultily designed, lack adequate ventilation, light, or sanitary 
111.7   facilities, or any combination of these or other factors that 
111.8   are detrimental to the safety or health of the community; 
111.9      (8) within its area of operation, to determine the level of 
111.10  income constituting low or moderate family income.  The 
111.11  authority may establish various income levels for various family 
111.12  sizes.  In making its determination, the authority may consider 
111.13  income levels that may be established by the Department of 
111.14  Housing and Urban Development or a similar or successor federal 
111.15  agency for the purpose of federal loan guarantees or subsidies 
111.16  for persons of low or moderate income.  The authority may use 
111.17  that determination as a basis for the maximum amount of income 
111.18  for admissions to housing development projects or housing 
111.19  projects owned or operated by it; 
111.20     (9) to provide in federally assisted projects any 
111.21  relocation payments and assistance necessary to comply with the 
111.22  requirements of the Federal Uniform Relocation Assistance and 
111.23  Real Property Acquisition Policies Act of 1970, and any 
111.24  amendments or supplements thereto; 
111.25     (10) to make an agreement with the governing body or bodies 
111.26  creating the authority which provides exemption from all ad 
111.27  valorem real and personal property taxes levied or imposed by 
111.28  the state, city, county, or other political subdivisions, for 
111.29  which the authority shall make payments in lieu of taxes to the 
111.30  state, city, county, or other political subdivisions as provided 
111.31  in section 469.040 body or bodies creating the authority.  The 
111.32  governing body shall agree on behalf of all the applicable 
111.33  governing bodies affected that local cooperation as required by 
111.34  the federal government shall be provided by the local governing 
111.35  body or bodies in whose jurisdiction the project is to be 
111.36  located, at no cost or at no greater cost than the same public 
112.1   services and facilities furnished to other residents; 
112.2      (11) to cooperate with or act as agent for the federal 
112.3   government, the state or any state public body, or any agency or 
112.4   instrumentality of the foregoing, in carrying out any of the 
112.5   provisions of sections 469.001 to 469.047 or of any other 
112.6   related federal, state, or local legislation; and upon the 
112.7   consent of the governing body of the city to purchase, lease, 
112.8   manage, or otherwise take over any housing project already owned 
112.9   and operated by the federal government; 
112.10     (12) to make plans for carrying out a program of voluntary 
112.11  repair and rehabilitation of buildings and improvements, and 
112.12  plans for the enforcement of laws, codes, and regulations 
112.13  relating to the use of land and the use and occupancy of 
112.14  buildings and improvements, and to the compulsory repair, 
112.15  rehabilitation, demolition, or removal of buildings and 
112.16  improvements.  The authority may develop, test, and report 
112.17  methods and techniques, and carry out demonstrations and other 
112.18  activities for the prevention and elimination of slums and 
112.19  blight; 
112.20     (13) to borrow money or other property and accept 
112.21  contributions, grants, gifts, services, or other assistance from 
112.22  the federal government, the state government, state public 
112.23  bodies, or from any other public or private sources; 
112.24     (14) to include in any contract for financial assistance 
112.25  with the federal government any conditions that the federal 
112.26  government may attach to its financial aid of a project, not 
112.27  inconsistent with purposes of sections 469.001 to 469.047, 
112.28  including obligating itself (which obligation shall be 
112.29  specifically enforceable and not constitute a mortgage, 
112.30  notwithstanding any other laws) to convey to the federal 
112.31  government the project to which the contract relates upon the 
112.32  occurrence of a substantial default with respect to the 
112.33  covenants or conditions to which the authority is subject; to 
112.34  provide in the contract that, in case of such conveyance, the 
112.35  federal government may complete, operate, manage, lease, convey, 
112.36  or otherwise deal with the project until the defaults are cured 
113.1   if the federal government agrees in the contract to reconvey to 
113.2   the authority the project as then constituted when the defaults 
113.3   have been cured; 
113.4      (15) to issue bonds for any of its corporate purposes and 
113.5   to secure the bonds by mortgages upon property held or to be 
113.6   held by it or by pledge of its revenues, including grants or 
113.7   contributions; 
113.8      (16) to invest any funds held in reserves or sinking funds, 
113.9   or any funds not required for immediate disbursement, in 
113.10  property or securities in which savings banks may legally invest 
113.11  funds subject to their control or in the manner and subject to 
113.12  the conditions provided in section 118A.04 for the deposit and 
113.13  investment of public funds; 
113.14     (17) within its area of operation, to determine where 
113.15  blight exists or where there is unsafe, unsanitary, or 
113.16  overcrowded housing; 
113.17     (18) to carry out studies of the housing and redevelopment 
113.18  needs within its area of operation and of the meeting of those 
113.19  needs.  This includes study of data on population and family 
113.20  groups and their distribution according to income groups, the 
113.21  amount and quality of available housing and its distribution 
113.22  according to rentals and sales prices, employment, wages, 
113.23  desirable patterns for land use and community growth, and other 
113.24  factors affecting the local housing and redevelopment needs and 
113.25  the meeting of those needs; to make the results of those studies 
113.26  and analyses available to the public and to building, housing, 
113.27  and supply industries; 
113.28     (19) if a local public body does not have a planning agency 
113.29  or the planning agency has not produced a comprehensive or 
113.30  general community development plan, to make or cause to be made 
113.31  a plan to be used as a guide in the more detailed planning of 
113.32  housing and redevelopment areas; 
113.33     (20) to lease or rent any dwellings, accommodations, lands, 
113.34  buildings, structures, or facilities included in any project 
113.35  and, subject to the limitations contained in sections 469.001 to 
113.36  469.047 with respect to the rental of dwellings in housing 
114.1   projects, to establish and revise the rents or charges therefor; 
114.2      (21) to own, hold, and improve real or personal property 
114.3   and to sell, lease, exchange, transfer, assign, pledge, or 
114.4   dispose of any real or personal property or any interest 
114.5   therein; 
114.6      (22) to insure or provide for the insurance of any real or 
114.7   personal property or operations of the authority against any 
114.8   risks or hazards; 
114.9      (23) to procure or agree to the procurement of government 
114.10  insurance or guarantees of the payment of any bonds or parts 
114.11  thereof issued by an authority and to pay premiums on the 
114.12  insurance; 
114.13     (24) to make expenditures necessary to carry out the 
114.14  purposes of sections 469.001 to 469.047; 
114.15     (25) to enter into an agreement or agreements with any 
114.16  state public body to provide informational service and 
114.17  relocation assistance to families, individuals, business 
114.18  concerns, and nonprofit organizations displaced or to be 
114.19  displaced by the activities of any state public body; 
114.20     (26) to compile and maintain a catalog of all vacant, open 
114.21  and undeveloped land, or land which contains substandard 
114.22  buildings and improvements as that term is defined in clause 
114.23  (7), that is owned or controlled by the authority or by the 
114.24  governing body within its area of operation and to compile and 
114.25  maintain a catalog of all authority owned real property that is 
114.26  in excess of the foreseeable needs of the authority, in order to 
114.27  determine and recommend if the real property compiled in either 
114.28  catalog is appropriate for disposal pursuant to the provisions 
114.29  of section 469.029, subdivisions 9 and 10; 
114.30     (27) to recommend to the city concerning the enforcement of 
114.31  the applicable health, housing, building, fire prevention, and 
114.32  housing maintenance code requirements as they relate to 
114.33  residential dwelling structures that are being rehabilitated by 
114.34  low- or moderate-income persons pursuant to section 469.029, 
114.35  subdivision 9, for the period of time necessary to complete the 
114.36  rehabilitation, as determined by the authority; 
115.1      (28) to recommend to the city the initiation of municipal 
115.2   powers, against certain real properties, relating to repair, 
115.3   closing, condemnation, or demolition of unsafe, unsanitary, 
115.4   hazardous, and unfit buildings, as provided in section 469.041, 
115.5   clause (5); 
115.6      (29) to sell, at private or public sale, at the price or 
115.7   prices determined by the authority, any note, mortgage, lease, 
115.8   sublease, lease purchase, or other instrument or obligation 
115.9   evidencing or securing a loan made for the purpose of economic 
115.10  development, job creation, redevelopment, or community 
115.11  revitalization by a public agency to a business, for-profit or 
115.12  nonprofit organization, or an individual; 
115.13     (30) within its area of operation, to acquire and sell real 
115.14  property that is benefited by federal housing assistance 
115.15  payments, other rental subsidies, interest reduction payments, 
115.16  or interest reduction contracts for the purpose of preserving 
115.17  the affordability of low- and moderate-income multifamily 
115.18  housing; 
115.19     (31) to apply for, enter into contracts with the federal 
115.20  government, administer, and carry out a section 8 program.  
115.21  Authorization by the governing body creating the authority to 
115.22  administer the program at the authority's initial application is 
115.23  sufficient to authorize operation of the program in its area of 
115.24  operation for which it was created without additional local 
115.25  governing body approval.  Approval by the governing body or 
115.26  bodies creating the authority constitutes approval of a housing 
115.27  program for purposes of any special or general law requiring 
115.28  local approval of section 8 programs undertaken by city, county, 
115.29  or multicounty authorities; and 
115.30     (32) to secure a mortgage or loan for a rental housing 
115.31  project by obtaining the appointment of receivers or assignments 
115.32  of rents and profits under sections 559.17 and 576.01, except 
115.33  that the limitation relating to the minimum amounts of the 
115.34  original principal balances of mortgages specified in sections 
115.35  559.17, subdivision 2, clause (2); and 576.01, subdivision 2, 
115.36  does not apply. 
116.1      Sec. 32.  Minnesota Statutes 1996, section 469.033, 
116.2   subdivision 6, is amended to read: 
116.3      Subd. 6.  [OPERATION AREA AS TAXING DISTRICT, SPECIAL TAX.] 
116.4   All of the territory included within the area of operation of 
116.5   any authority shall constitute a taxing district for the purpose 
116.6   of levying and collecting special benefit taxes as provided in 
116.7   this subdivision.  All of the taxable property, both real and 
116.8   personal, within that taxing district shall be deemed to be 
116.9   benefited by projects to the extent of the special taxes levied 
116.10  under this subdivision.  Subject to the consent by resolution of 
116.11  the governing body of the city in and for which it was created, 
116.12  an authority may levy a tax upon all taxable property within 
116.13  that taxing district.  The tax shall be extended, spread, and 
116.14  included with and as a part of the general taxes for state, 
116.15  county, and municipal purposes by the county auditor, to be 
116.16  collected and enforced therewith, together with the penalty, 
116.17  interest, and costs.  As the tax, including any penalties, 
116.18  interest, and costs, is collected by the county treasurer it 
116.19  shall be accumulated and kept in a separate fund to be known as 
116.20  the "housing and redevelopment project fund."  The money in the 
116.21  fund shall be turned over to the authority at the same time and 
116.22  in the same manner that the tax collections for the city are 
116.23  turned over to the city, and shall be expended only for the 
116.24  purposes of sections 469.001 to 469.047.  It shall be paid out 
116.25  upon vouchers signed by the chair of the authority or an 
116.26  authorized representative.  The amount of the levy shall be an 
116.27  amount approved by the governing body of the city, but shall not 
116.28  exceed 0.0131 0.0144 percent of taxable market value.  The 
116.29  authority may levy an additional levy, not to exceed 0.0013 
116.30  percent of taxable market value, to be used to defray costs of 
116.31  providing informational service and relocation assistance as set 
116.32  forth in section 469.012, subdivision 1.  The authority shall 
116.33  each year formulate and file a budget in accordance with the 
116.34  budget procedure of the city in the same manner as required of 
116.35  executive departments of the city or, if no budgets are required 
116.36  to be filed, by August 1.  The amount of the tax levy for the 
117.1   following year shall be based on that budget. 
117.2      Sec. 33.  [469.1812] [DEFINITIONS.] 
117.3      Subdivision 1.  [SCOPE.] For purposes of sections 469.1812 
117.4   to 469.1815, the following terms have the meanings given. 
117.5      Subd. 2.  [GOVERNING BODY.] "Governing body" means, for a 
117.6   city, the city council; for a school district, the school board; 
117.7   for a county, the county board; and for a town, the annual 
117.8   meeting of the town. 
117.9      Subd. 3.  [MUNICIPALITY.] "Municipality" means a statutory 
117.10  or home rule charter city or a town. 
117.11     Subd. 4.  [POLITICAL SUBDIVISION OR 
117.12  SUBDIVISION.] "Political subdivision" or "subdivision" means a 
117.13  statutory or home rule charter city, town, school district, or 
117.14  county. 
117.15     Sec. 34.  [469.1813] [ABATEMENT AUTHORITY.] 
117.16     Subdivision 1.  [AUTHORITY.] The governing body of a 
117.17  political subdivision may grant an abatement of the taxes 
117.18  imposed by the political subdivision on a parcel of property, if:
117.19     (a) it expects the benefits to the political subdivision of 
117.20  the proposed abatement agreement to at least equal the costs to 
117.21  the political subdivision of the proposed agreement; and 
117.22     (b) it finds that doing so is in the public interest 
117.23  because it will: 
117.24     (1) increase or preserve tax base; 
117.25     (2) provide employment opportunities in the political 
117.26  subdivision; 
117.27     (3) provide or help acquire or construct public facilities; 
117.28     (4) help redevelop or renew blighted areas; or 
117.29     (5) help provide access to services for residents of the 
117.30  political subdivision. 
117.31     Subd. 2.  [ABATEMENT RESOLUTION.] The governing body of a 
117.32  political subdivision may grant an abatement only by adopting an 
117.33  abatement resolution, specifying the terms of the abatement.  
117.34  The resolution must also include a specific statement as to the 
117.35  nature and extent of the public benefits which the governing 
117.36  body expects to result from the agreement. The abatement may 
118.1   reduce all or part of the property tax levied by the political 
118.2   subdivision on the parcel.  The political subdivision may limit 
118.3   the abatement: 
118.4      (1) to a specific dollar amount per year or in total; 
118.5      (2) to the increase in property taxes resulting from 
118.6   improvement of the property; 
118.7      (3) to the increases in property taxes resulting from 
118.8   increases in the market value or tax capacity of the property; 
118.9   or 
118.10     (4) in any other manner the governing body of the 
118.11  subdivision determines is appropriate. 
118.12  The political subdivision may not abate tax attributable to the 
118.13  value of the land or the areawide tax under chapter 276A or 473F.
118.14     Subd. 3.  [SCHOOL DISTRICT ABATEMENT 
118.15  PROCEDURE.] Notwithstanding the amounts in subdivision 2, a 
118.16  school district that grants an abatement under this section must 
118.17  limit the abatement for any property to not more than an amount 
118.18  equal to the product of:  (1) the property's net tax capacity, 
118.19  and (2) the difference between the district's total tax rate for 
118.20  that year and one-half of the general education tax rate for 
118.21  that year.  An abatement granted under this section is not an 
118.22  abatement for purposes of state aid or local levy under chapter 
118.23  124.  A school district may levy in the following year for the 
118.24  total amount of any revenue foregone through the abatement 
118.25  awarded under this subdivision. 
118.26     Subd. 4.  [PROPERTY LOCATED IN TAX INCREMENT FINANCING 
118.27  DISTRICTS.] The governing body of a governmental subdivision may 
118.28  not enter into a property tax abatement agreement under sections 
118.29  469.1812 to 469.1815 if the property is located in a tax 
118.30  increment financing district. 
118.31     Subd. 5.  [NOTICE AND PUBLIC HEARING.] (a) The governing 
118.32  body of the political subdivision may approve an abatement under 
118.33  sections 469.1812 to 469.1815 only after holding a public 
118.34  hearing on the abatement. 
118.35     (b) Notice of the hearing must be published in a newspaper 
118.36  of general circulation in the political subdivision at least 
119.1   once more than ten days but less than 30 days before the 
119.2   hearing.  The newspaper must be one of general interest and 
119.3   readership in the community, and not one of limited subject 
119.4   matter.  The newspaper must be published at least once per 
119.5   week.  The notice must indicate that the governing body will 
119.6   consider granting a property tax abatement, identify the 
119.7   property or properties for which an abatement is under 
119.8   consideration, and the total estimated amount of the abatement. 
119.9      Subd. 6.  [DURATION LIMIT.] (a) A political subdivision 
119.10  other than a school district may grant an abatement for a period 
119.11  no longer than ten years.  The subdivision may specify in the 
119.12  abatement resolution a shorter duration.  If the resolution does 
119.13  not specify a period of time, the abatement is for eight years.  
119.14  If an abatement has been granted to a parcel of property and the 
119.15  period of the abatement has expired, the political subdivision 
119.16  that granted the abatement may not grant another abatement for 
119.17  eight years after the expiration of the first abatement.  This 
119.18  prohibition does not apply to improvements added after and not 
119.19  subject to the first abatement. 
119.20     (b) A school district may grant an abatement for only one 
119.21  year at a time.  Once a school district has authorized an 
119.22  abatement for a property, it may reauthorize the abatement in 
119.23  any subsequent year for the next seven years, or nine years if 
119.24  provided in the original abatement agreement.  This prohibition 
119.25  does not apply to improvements added after and not subject to 
119.26  the original abatement agreement. 
119.27     Subd. 7.  [REVIEW AND MODIFICATION OF ABATEMENTS.] The 
119.28  political subdivision may provide in the abatement resolution 
119.29  that the abatement may not be modified or changed during its 
119.30  term.  If the abatement resolution does not provide that the 
119.31  abatement may not be modified or changed, the governing body of 
119.32  the political subdivision may review and modify the abatement 
119.33  every second year after it was approved. 
119.34     Subd. 8.  [LIMITATION ON ABATEMENTS.] In any year, the 
119.35  total amount of property taxes abated by a political subdivision 
119.36  under this section may not exceed (1) five percent of the 
120.1   current levy, or (2) $100,000, whichever is greater. 
120.2      Sec. 35.  [469.1814] [BONDING AUTHORITY.] 
120.3      Subdivision 1.  [AUTHORITY.] A political subdivision may 
120.4   issue bonds or other obligations to provide an amount equal to 
120.5   the sum of the abatements granted for a property under section 
120.6   469.1813.  The maximum principal amount of these bonds may not 
120.7   exceed the estimated sum of the abatements for the property for 
120.8   the years authorized.  The bonds may be general obligations of 
120.9   the political subdivision if the governing body of the political 
120.10  subdivision elects to pledge the full faith and credit of the 
120.11  subdivision in the resolution issuing the bonds. 
120.12     Subd. 2.  [BOND CODE APPLIES.] Chapter 475 applies to the 
120.13  obligations authorized by this section, except bonds are 
120.14  excluded from the calculation of the net debt limit. 
120.15     Subd. 3.  [MUNICIPAL ISSUE FOR COMBINED ABATEMENTS.] If two 
120.16  or more political subdivisions decide to grant abatements for 
120.17  the same property, the municipality in which the property is 
120.18  located may issue bonds to provide an amount equal to the sum of 
120.19  the abatements for each of the jurisdictions that agrees.  The 
120.20  governing body of each of the other jurisdictions must guarantee 
120.21  and pledge to pay annually to the municipality the amount of the 
120.22  abatement.  This pledge and guarantee is a binding obligation of 
120.23  the political subdivision and must be included in the abatement 
120.24  resolution. 
120.25     Subd. 4.  [BONDED ABATEMENTS NOT SUBJECT TO REVIEW.] If 
120.26  bonds are issued to provide advance payment of abatements under 
120.27  this section, the amount of abatement is not subject to periodic 
120.28  review by the political subdivision under section 469.1813, 
120.29  subdivision 7. 
120.30     Subd. 5.  [USE OF PROCEEDS.] The proceeds of bonds issued 
120.31  under this section may be used to (1) pay for public 
120.32  improvements that benefit the property, (2) to acquire and 
120.33  convey land or other property, as provided under this section, 
120.34  (3) to reimburse the property owner for the cost of improvements 
120.35  made to the property, or (4) to pay the costs of issuance of the 
120.36  bonds. 
121.1      Sec. 36.  [469.1815] [ADMINISTRATIVE.] 
121.2      Subdivision 1.  [INCLUSION IN PROPOSED AND FINAL 
121.3   LEVIES.] The political subdivision must add to its levy amount 
121.4   for the current year under sections 275.065 and 275.07 the total 
121.5   estimated amount of all current year abatements granted.  The 
121.6   tax amounts shown on the proposed notice under section 275.065, 
121.7   subdivision 3, and on the property tax statement under section 
121.8   276.04, subdivision 2, are the total amounts before the 
121.9   reduction of any abatements that will be granted on the property.
121.10     Subd. 2.  [PROPERTY TAXES; ABATEMENT PAYMENT.] The total 
121.11  property taxes shall be levied on the property and shall be due 
121.12  and payable to the county at the times provided under section 
121.13  279.01.  The political subdivision will pay the abatement to the 
121.14  property owner, lessee, or a representative of the bondholders, 
121.15  as provided by the abatement resolution. 
121.16     Sec. 37.  Minnesota Statutes 1996, section 477A.011, 
121.17  subdivision 36, is amended to read: 
121.18     Subd. 36.  [CITY AID BASE.] (a) Except as provided in 
121.19  paragraphs (b) and, (c), and (d), "city aid base" means, for 
121.20  each city, the sum of the local government aid and equalization 
121.21  aid it was originally certified to receive in calendar year 1993 
121.22  under Minnesota Statutes 1992, section 477A.013, subdivisions 3 
121.23  and 5, and the amount of disparity reduction aid it received in 
121.24  calendar year 1993 under Minnesota Statutes 1992, section 
121.25  273.1398, subdivision 3. 
121.26     (b) For aids payable in 1996 and thereafter, a city that in 
121.27  1992 or 1993 transferred an amount from governmental funds to 
121.28  its sewer and water fund, which amount exceeded its net levy for 
121.29  taxes payable in the year in which the transfer occurred, has a 
121.30  "city aid base" equal to the sum of (i) its city aid base, as 
121.31  calculated under paragraph (a), and (ii) one-half of the 
121.32  difference between its city aid distribution under section 
121.33  477A.013, subdivision 9, for aids payable in 1995 and its city 
121.34  aid base for aids payable in 1995. 
121.35     (c) The city aid base for any city with a population less 
121.36  than 500 is increased by $40,000 for aids payable in calendar 
122.1   year 1995 and thereafter, and the maximum amount of total aid it 
122.2   may receive under section 477A.013, subdivision 9, paragraph 
122.3   (c), is also increased by $40,000 for aids payable in calendar 
122.4   year 1995 only, provided that: 
122.5      (i) the average total tax capacity rate for taxes payable 
122.6   in 1995 exceeds 200 percent; 
122.7      (ii) the city portion of the tax capacity rate exceeds 100 
122.8   percent; and 
122.9      (iii) its city aid base is less than $60 per capita. 
122.10     (d) The city aid base for a city is increased by $20,000 in 
122.11  1998 and thereafter and the maximum amount of total aid it may 
122.12  receive under section 477A.013, subdivision 9, paragraph (c), is 
122.13  also increased by $20,000 in calendar year 1998 only, provided 
122.14  that: 
122.15     (i) the city has a population in 1994 of 2,500 or more; 
122.16     (ii) the city is located in a county, outside of the 
122.17  metropolitan area, which contains a city of the first class; 
122.18     (iii) the city's net tax capacity used in calculating its 
122.19  1996 aid under section 477A.013 is less than $400 per capita; 
122.20  and 
122.21     (iv) at least four percent of the total net tax capacity, 
122.22  for taxes payable in 1996, of property located in the city is 
122.23  classified as railroad property. 
122.24     Sec. 38.  Laws 1992, chapter 511, article 2, section 52, is 
122.25  amended to read: 
122.26     Sec. 52.  [WATERSHED DISTRICT LEVIES.] 
122.27     (a) The Nine Mile Creek watershed district, the 
122.28  Riley-Purgatory Bluff Creek watershed district, the Minnehaha 
122.29  Creek watershed district, the Coon Creek watershed district, and 
122.30  the Lower Minnesota River watershed district may levy in 1992 
122.31  and thereafter a tax not to exceed $200,000 on property within 
122.32  the district for the administrative fund.  The levy authorized 
122.33  under this section is in lieu of section 103D.905, subdivision 
122.34  3.  The administrative fund shall be used for the purposes 
122.35  contained in Minnesota Statutes, section 103D.905, subdivision 
122.36  3.  The board of managers shall make the levy for the 
123.1   administrative fund in accordance with Minnesota Statutes, 
123.2   section 103D.915. 
123.3      (b) The Wild Rice watershed district may levy, for taxes 
123.4   payable in 1993, 1994, 1995, 1996, and 1997, 1998, 1999, 2000, 
123.5   2001, and 2002, an ad valorem tax not to exceed $200,000 on 
123.6   property within the district for the administrative fund.  The 
123.7   additional $75,000 above the amount authorized in Minnesota 
123.8   Statutes, section 103D.905, subdivision 3, must be used for 
123.9   costs incurred in connection with the development and 
123.10  maintenance of cost-sharing projects with the United States Army 
123.11  Corps of Engineers.  The board of managers shall make the levy 
123.12  for the administrative fund in accordance with Minnesota 
123.13  Statutes, section 103D.915. 
123.14     Sec. 39.  [FLOODWOOD JOINT RECREATION BOARD TAX.] 
123.15     Subdivision 1.  [LEVY AUTHORIZATION.] Each year, the 
123.16  Floodwood joint recreation board may levy a tax not to exceed 
123.17  $25,000 on the value of property situated in the territory of 
123.18  independent school district No. 698 in accordance with this 
123.19  section.  Property in territory in the school district may be 
123.20  made subject to the tax permitted by this section by the 
123.21  agreement of the governing body or town board of the city or 
123.22  town where it is located.  The agreement may be by resolution of 
123.23  a governing body or town board or by a joint powers agreement 
123.24  pursuant to Minnesota Statutes, section 471.59.  If levied, the 
123.25  tax is in addition to all other taxes on the property subject to 
123.26  it permitted to be levied for park and recreation purposes by 
123.27  the cities and towns other than for the support of the joint 
123.28  recreation board.  It shall be disregarded in the calculation of 
123.29  all other mill rate or per capita tax levy limitations imposed 
123.30  by law or charter upon them.  A city or town may withdraw its 
123.31  agreement to future taxes by notice to the recreation board and 
123.32  the county auditor unless provided otherwise by a joint powers 
123.33  agreement.  The tax shall be collected by the applicable county 
123.34  auditor and treasurer and paid directly to the Floodwood joint 
123.35  recreation board.  
123.36     Subd. 2.  [LOCAL APPROVAL.] This section is effective in 
124.1   the city of Floodwood, the towns of Arrowhead, Fine Lakes, 
124.2   Floodwood, Halden, Van Buren, Cedar Valley, Prairie Lake, and 
124.3   Unorganized Township 52-21 in St. Louis county, and Unorganized 
124.4   Township 52-22 in Aitkin county the day after compliance with 
124.5   Minnesota Statutes, section 645.021, subdivision 3, by the 
124.6   governing body of each.  This section is effective for each 
124.7   city, town, and unorganized township regardless of the action of 
124.8   the others.  
124.9      Approval of this section is not agreement to be subject to 
124.10  the tax permitted by it.  Agreement to the tax must be by 
124.11  separate action in accordance with subdivision 1. 
124.12     Sec. 40.  [SAUK RIVER WATERSHED DISTRICT.] 
124.13     Subdivision 1.  [LEVY AUTHORIZATION.] Notwithstanding 
124.14  Minnesota Statutes, section 103D.905, subdivision 3, the Sauk 
124.15  River watershed district may levy up to $150,000 for its 
124.16  administrative fund for taxes levied in 1997, payable in 1998. 
124.17     Subd. 2.  [EFFECTIVE DATE.] This section is effective the 
124.18  day following final enactment. 
124.19     Sec. 41.  [VIRGINIA AREA AMBULANCE DISTRICT.] 
124.20     Subdivision 1.  [AGREEMENT; POWERS; GENERAL 
124.21  DESCRIPTION.] (a) The cities of Virginia, Mountain Iron, 
124.22  Eveleth, Leonidas, Iron Junction, and Gilbert, and the towns of 
124.23  Pike, Clinton, McDavitt, Colvin, Sandy, Cherry, Ellsburg, Wouri, 
124.24  Lavell, Fayal, Cotton, and Embarrass, may by resolution of their 
124.25  city councils and town boards establish the Virginia area 
124.26  ambulance district. 
124.27     (b) The St. Louis county board may by resolution provide 
124.28  that property located in unorganized townships described in 
124.29  clauses (1) to (7) may be included within the district: 
124.30     (1) Township 61 North, Range 17 West; 
124.31     (2) Township 59 North, Ranges 16 and 18 West; 
124.32     (3) Township 56 North, Range 16 West; 
124.33     (4) Township 60 North, Range 18 West; 
124.34     (5) Township 55 North, Range 15; 
124.35     (6) Township 56, Range 17; and 
124.36     (7) Township 57, Range 16.  
125.1      (c) The district shall make payments of the proceeds of the 
125.2   tax authorized in this section to the city of Virginia, which 
125.3   shall provide ambulance services throughout the district and may 
125.4   exercise all the powers of the cities and towns that relate to 
125.5   ambulance service anywhere within its territory.  
125.6      (d) Any other contiguous town or home rule charter or 
125.7   statutory city may join the district with the agreement of the 
125.8   cities and towns that comprise the district at the time of its 
125.9   application to join.  Action to join the district may be taken 
125.10  by the city council or town board of the city or town.  
125.11     Subd. 2.  [BOARD.] The district shall be governed by a 
125.12  board composed of one member appointed by the city council or 
125.13  town board of each city and town in the district.  A district 
125.14  board member may, but is not required to, be a member of a city 
125.15  council or town board.  Except as provided in this section, 
125.16  members shall serve two-year terms ending the first Monday in 
125.17  January and until their successors are appointed and qualified.  
125.18  Of the members first appointed, as far as possible, the terms of 
125.19  one-half shall expire on the first Monday in January in the 
125.20  first year following appointment and one-half the first Monday 
125.21  in January in the second year.  The terms of those initially 
125.22  appointed must be determined by lot.  If an additional member is 
125.23  added because an additional city or town joins the district, the 
125.24  member's term must be fixed so that, as far as possible, the 
125.25  terms of one-half of all the members expire on the same date. 
125.26     Subd. 3.  [TAX.] The district may impose a property tax on 
125.27  real and personal property in the district in an amount 
125.28  sufficient to discharge its operating expenses and debt payable 
125.29  in each year, but not to exceed .0528 percent of the district's 
125.30  taxable market value.  The St. Louis county auditor shall 
125.31  collect the tax and distribute it to the Virginia area ambulance 
125.32  district. 
125.33     Subd. 4.  [EXPENDITURES.] The taxes collected under 
125.34  subdivision 3 shall be used for licensed ambulance services and 
125.35  first responders.  Licensed ambulance services shall receive 80 
125.36  percent of the available funds and first responders shall 
126.1   receive 20 percent of the available funds.  The amounts 
126.2   allocated to first responders shall be used for education, 
126.3   training, and reimbursement for their allowable expenses.  Only 
126.4   education and training that meets the recognized education and 
126.5   training guidelines set by the emergency medical services 
126.6   regulatory board under Minnesota Statutes, chapter 144E, shall 
126.7   be reimbursable under this subdivision. 
126.8      Subd. 5.  [PUBLIC INDEBTEDNESS.] The district may incur 
126.9   debt in the manner provided for a municipality by Minnesota 
126.10  Statutes, chapter 475, when necessary to accomplish a duty 
126.11  charged to it. 
126.12     Subd. 6.  [WITHDRAWAL.] Upon two years' notice, a city or 
126.13  town may withdraw from the district.  Its territory shall remain 
126.14  subject to taxation for debt incurred prior to its withdrawal 
126.15  under Minnesota Statutes, chapter 475. 
126.16     Subd. 7.  [EFFECTIVE DATE.] This section is effective (1) 
126.17  in the cities of Virginia, Mountain Iron, Eveleth, Leonidas, 
126.18  Iron Junction, and Gilbert, and the towns of Pike, Clinton, 
126.19  McDavitt, Colvin, Sandy, Cherry, Ellsburg, Wouri, Lavell, Fayal, 
126.20  Cotton, and Embarrass, the day after compliance with Minnesota 
126.21  Statutes, section 645.021, subdivision 2, by the governing body 
126.22  of each, and (2) for unorganized townships described in 
126.23  subdivision 1, paragraph (b), clauses (1) to (7), the day after 
126.24  compliance with Minnesota Statutes, section 645.021, subdivision 
126.25  2, by the St. Louis county board, provided that the district 
126.26  must be established by September 1, 2000.  Any of the cities, 
126.27  towns, and unorganized townships listed in subdivision 1 that do 
126.28  not join the district initially may join the district after its 
126.29  establishment. 
126.30     Sec. 42.  [BROOKLYN CENTER, RICHFIELD, AND ST. LOUIS PARK; 
126.31  APARTMENT EXCLUSIONS.] 
126.32     Subdivision 1.  [IMPROVEMENTS MADE TO CERTAIN 
126.33  APARTMENTS.] (a) Notwithstanding any other provisions to the 
126.34  contrary, the market value of qualifying property located in the 
126.35  city of Brooklyn Center, Richfield, or St. Louis Park shall not 
126.36  be increased for assessment purposes under the conditions 
127.1   provided in this subdivision.  
127.2      (b) "Qualifying property" means property that meets all of 
127.3   the following criteria: 
127.4      (1) the building is at least 30 years old at the time of 
127.5   the improvements; 
127.6      (2) the building is residential real estate of four or more 
127.7   units and is classified under Minnesota Statutes, section 
127.8   273.13, subdivision 25, as class 4a, 4c, or 4d property; and 
127.9      (3) the building has been improved after January 1, 1997, 
127.10  and those total improvements exceed $5,000 per unit. 
127.11     (c) A building permit must have been issued prior to the 
127.12  commencement of the improvements.  Only improvements to the 
127.13  residential structure and garages qualify for the market value 
127.14  freeze as provided in this subdivision.  The assessor shall 
127.15  require an application, including, if unknown by the assessor, 
127.16  documentation of the age of the building from the owner.  The 
127.17  application may be filed subsequent to the date of the building 
127.18  permit provided that the application is filed prior to the next 
127.19  assessment date. 
127.20     (d) If the property qualifies under this subdivision, the 
127.21  assessor shall not increase that qualifying property's market 
127.22  value for the five assessment years immediately following the 
127.23  year in which the improvements were completed, at which time the 
127.24  assessor shall determine the property's estimated market value, 
127.25  and 20 percent of the increased market value over the base value 
127.26  shall be added back in each of the next five subsequent 
127.27  assessment years.  The assessor may require from the owner any 
127.28  documentation necessary to verify that the amount of 
127.29  improvements exceed the $5,000 per unit minimum.  Improvements 
127.30  made subsequent to the initial improvements which allowed the 
127.31  building to qualify shall also be disregarded by the assessor in 
127.32  any determination of market value during the initial five-year 
127.33  time period; provided, however, that beginning in the sixth year 
127.34  when the increased market value is added back, the assessor's 
127.35  estimate of market value shall include all improvements made in 
127.36  the entire five-year time period. 
128.1      Subd. 2.  [SUNSET.] This section is effective beginning 
128.2   with the 1998 assessment and ending with the 2000 assessment, 
128.3   provided that any property that originally qualifies in that 
128.4   time period will be allowed to receive the benefits provided 
128.5   under that section for the full time period prescribed in that 
128.6   section. 
128.7      Subd. 3.  [EFFECTIVE DATE.] This section is effective for 
128.8   each of the cities of Brooklyn Center, Richfield, and St. Louis 
128.9   Park upon compliance with Minnesota Statutes, section 645.021, 
128.10  subdivision 3, by the governing body of that city. 
128.11     Sec. 43.  [ST. LOUIS COUNTY; UTILITY PERSONAL PROPERTY 
128.12  EXEMPTION.] 
128.13     (a) An electric generating facility with a capacity of 
128.14  110,000 kilowatts located in St. Louis County whose operation is 
128.15  integral to the development and operation of a new, adjacent 
128.16  industrial park is exempt from property taxes on attached 
128.17  machinery and other personal property for replacement equipment 
128.18  and improvements installed after July 1, 1997. 
128.19     (b) The governing bodies of the county, city or town, and 
128.20  school district must each approve by resolution the exemption of 
128.21  the personal property under this section.  Each of the governing 
128.22  bodies shall file a copy of the resolution with the county 
128.23  auditor.  The county auditor shall publish the resolutions in 
128.24  newspapers of general circulation within the county.  The voters 
128.25  of the county may request a referendum on the proposed exemption 
128.26  by filing a petition within 30 days after the resolutions are 
128.27  published.  The petition must be signed by voters who reside in 
128.28  the county.  The number of signatures must equal at least five 
128.29  percent of the number of persons voting in the county in the 
128.30  last general election.  If such a petition is timely filed, the 
128.31  resolutions are not effective until they have been submitted to 
128.32  the voters residing in the county at a general or special 
128.33  election and a majority of votes cast on the question of 
128.34  approving the resolution are in the affirmative.  The 
128.35  commissioner of revenue shall prepare a suggested form of 
128.36  question to be presented at the referendum. 
129.1      (c) This section is effective for assessment years 1998 to 
129.2   2002 and expires thereafter. 
129.3      Sec. 44.  [REPORT; ELDERLY ASSISTED LIVING CARE 
129.4   FACILITIES.] 
129.5      The department of revenue shall conduct a survey with all 
129.6   county assessors of the tax status of all elderly assisted 
129.7   living care facilities as defined in Minnesota Statutes, section 
129.8   273.13, subdivision 25a, located in the state, and report to the 
129.9   chairs of the house and senate tax committees by February 1, 
129.10  1998, on its findings.  The survey shall include, but not be 
129.11  limited to, estimates of the amount of charitable contributions, 
129.12  if any, for each elderly assisted living care facility and the 
129.13  relative portion of those charitable contributions to the total 
129.14  operating costs of the elderly assisted living care facility. 
129.15     Sec. 45.  [REPEALER.] 
129.16     (a) Minnesota Statutes 1996, sections 270B.12, subdivision 
129.17  11; 276.012; 290A.055; and 290A.26; and Laws 1995, chapter 264, 
129.18  article 4, as amended by Laws 1996, chapter 471, article 3, are 
129.19  repealed.  Notwithstanding Minnesota Statutes, section 645.34, 
129.20  the sections of statutes amended by the repealed Laws 1995, 
129.21  chapter 264, article 4, as amended, remain in effect as if not 
129.22  so amended. 
129.23     (b) Minnesota Statutes 1996, section 469.181, is repealed. 
129.24     Sec. 46.  [EFFECTIVE DATE.] 
129.25     Section 1 is effective for aids distributed in 1999 and 
129.26  thereafter.  
129.27     Sections 3 to 5, 7, 16, 22 to 24, 40, 44, and 45, paragraph 
129.28  (a), are effective the day following final enactment. 
129.29     Sections 8, 9 to 11, 17 and 18, and 32 to 36 are effective 
129.30  for the 1997 assessment and thereafter, for taxes payable in 
129.31  1998 and thereafter. 
129.32     Section 19 is effective for taxes levied in 1997, payable 
129.33  in 1998, only, provided that any elderly assisted living care 
129.34  facility that is tax exempt for the taxes payable year 1997, 
129.35  will remain tax exempt for the taxes payable year 1998, and any 
129.36  elderly assisted living care facility that is taxable for the 
130.1   taxes payable year 1997 will remain taxable for the taxes 
130.2   payable year 1998.  
130.3      Section 12 is effective for the 1997 assessment and 
130.4   thereafter, for taxes payable in 1998 and thereafter.  
130.5   Notwithstanding Minnesota Statutes, section 273.112, application 
130.6   for deferment and the notices of approval under section 12 for 
130.7   the 1997 assessment must be filed with the county assessor by 
130.8   August 1, 1997. 
130.9      Section 14 is effective beginning with the 1997 assessment. 
130.10     Section 15 is effective beginning with the 1997 assessment 
130.11  and ending with the 2002 assessment, for qualifying improvements 
130.12  made after January 2, 1993, to a residence that has been 
130.13  relocated; provided, that any residence that originally 
130.14  qualifies in that time period will be allowed to receive the 
130.15  benefits provided under section 15 for the full ten-year time 
130.16  period.  In order to qualify for a market value exclusion under 
130.17  Minnesota Statutes, section 273.11, subdivision 10, for the 1997 
130.18  assessment for improvements made to a relocated residence, a 
130.19  homeowner must notify the assessor by July 1, 1997. 
130.20     Section 21 is effective for the abstracts of exempt real 
130.21  property filed in 1998 and thereafter. 
130.22     Section 31 is effective for agreements executed on or after 
130.23  the day following final enactment. 
130.24     Section 37 is effective for aids paid in 1998 and 
130.25  thereafter. 
130.26     Section 45, paragraph (b), is effective for property tax 
130.27  deferrals granted after June 30, 1997. 
130.28                             ARTICLE 4 
130.29                            LEVY LIMITS 
130.30     Section 1.  [275.70] [LEVY LIMITATIONS; DEFINITIONS.] 
130.31     Subdivision 1.  [APPLICATION.] For the purposes of sections 
130.32  275.70 to 275.74, the following terms shall have these meanings, 
130.33  unless provided otherwise. 
130.34     Subd. 2.  [IMPLICIT PRICE DEFLATOR.] "Implicit price 
130.35  deflator" means the implicit price deflator for government 
130.36  purchases of goods and services for state and local governments 
131.1   prepared by the bureau of economic analysis of the United States 
131.2   Department of Commerce for the 12-month period ending in June of 
131.3   the levy year. 
131.4      Subd. 3.  [LOCAL GOVERNMENTAL UNIT.] "Local governmental 
131.5   unit" means a county, or a statutory or home rule charter city. 
131.6      Subd. 4.  [POPULATION AND HOUSEHOLD ESTIMATES.] "Population"
131.7   or "number of households" means the population or number of 
131.8   households for the local governmental unit as established by the 
131.9   last federal census, by a census taken under section 275.14, or 
131.10  by an estimate made by the metropolitan council or by the state 
131.11  demographer under section 4A.02, whichever is most recent as to 
131.12  the stated date of the count or estimate up to and including 
131.13  July 1 of the current levy year. 
131.14     Subd. 5.  [SPECIAL LEVIES.] "Special levies" means those 
131.15  portions of ad valorem taxes levied by a local governmental unit 
131.16  for the following purposes or in the following manner: 
131.17     (1) to pay the costs of the principal and interest on 
131.18  bonded indebtedness or to reimburse for the amount of liquor 
131.19  store revenues used to pay the principal and interest due on 
131.20  municipal liquor store bonds in the year preceding the year for 
131.21  which the levy limit is calculated; 
131.22     (2) to pay the costs of principal and interest on 
131.23  certificates of indebtedness issued for any corporate purpose 
131.24  except for the following: 
131.25     (i) tax anticipation or aid anticipation certificates of 
131.26  indebtedness; 
131.27     (ii) certificates of indebtedness issued under sections 
131.28  298.28 and 298.282; 
131.29     (iii) certificates of indebtedness used to fund current 
131.30  expenses or to pay the costs of extraordinary expenditures that 
131.31  result from a public emergency; or 
131.32     (iv) certificates of indebtedness used to fund an 
131.33  insufficiency in tax receipts or an insufficiency in other 
131.34  revenue sources; 
131.35     (3) to provide for the bonded indebtedness portion of 
131.36  payments made to another political subdivision of the state of 
132.1   Minnesota; 
132.2      (4) to fund payments made to the Minnesota state armory 
132.3   building commission under section 193.145, subdivision 2, to 
132.4   retire the principal and interest on armory construction bonds; 
132.5      (5) for counties only, to fund increased county costs 
132.6   associated with the reform of income maintenance programs 
132.7   enacted by the 1997 legislature including increased 
132.8   administration and program costs of the income maintenance 
132.9   programs and also related support services as they relate 
132.10  directly to the reform of income maintenance programs; 
132.11     (6) for un-reimbursed expenses related to flooding that 
132.12  occurred during the first half of calendar year 1997, as allowed 
132.13  by the commissioner of revenue under section 275.74, paragraph 
132.14  (c); 
132.15     (7) for local units of government located in an area 
132.16  designated by the Federal Emergency Management Agency pursuant 
132.17  to a major disaster declaration issued for Minnesota by 
132.18  President Clinton after April 1, 1997, and before April 21, 
132.19  1997, only for levies authorized under section 273.123, 
132.20  subdivision 7, to the extent that they are due to abatements 
132.21  related to the major disaster; and 
132.22     (8) property taxes approved by voters which are levied 
132.23  against the referendum market value as provided under section 
132.24  275.61. 
132.25     Sec. 2.  [275.71] [LEVY LIMITS.] 
132.26     Subdivision 1.  [LIMIT ON LEVIES.] Notwithstanding any 
132.27  other provision of law or municipal charter to the contrary 
132.28  which authorize ad valorem taxes in excess of the limits 
132.29  established by sections 275.70 to 275.74, the provision of this 
132.30  section shall apply to local governmental units for all purposes 
132.31  other than those for which special levies and special 
132.32  assessments are made. 
132.33     Subd. 2.  [LEVY LIMIT BASE.] (a) The levy limit base for a 
132.34  local governmental unit for taxes levied in 1997 shall be equal 
132.35  to the sum of: 
132.36     (1) the amount the local governmental unit levied in 1996, 
133.1   less any amount levied for debt, as reported to the department 
133.2   of revenue under section 275.62, subdivision 1, clause (1), and 
133.3   less any tax levied in 1996 against market value as provided for 
133.4   in section 275.61; 
133.5      (2) the amount of aids the local governmental unit was 
133.6   certified to receive in calendar year 1997 under sections 
133.7   477A.011 to 477A.03 before any reductions for state tax 
133.8   increment financing aid under section 273.1399, subdivision 5; 
133.9      (3) the amount of homestead and agricultural credit aid the 
133.10  local governmental unit was certified to receive under section 
133.11  273.1398 in calendar year 1997 before any reductions for tax 
133.12  increment financing aid under section 273.1399, subdivision 5; 
133.13     (4) the amount of local performance aid the local 
133.14  governmental unit was certified to receive in calendar year 1997 
133.15  under section 477A.05; and 
133.16     (5) the amount of any payments certified to the local 
133.17  government unit in 1997 under sections 298.28 and 298.282. 
133.18     If a governmental unit was not required to report under 
133.19  section 275.62 for taxes levied in 1997, the commissioner shall 
133.20  request information on levies used for debt from the local 
133.21  governmental unit and adjust its levy limit base accordingly. 
133.22     (b) The levy limit base for a local governmental unit for 
133.23  taxes levied in 1998 and 1999 is limited to its adjusted levy 
133.24  limit base in the previous year, subject to any adjustments 
133.25  under section 275.72. 
133.26     Subd. 3.  [ADJUSTED LEVY LIMIT BASE.] For taxes levied in 
133.27  1997, 1998, and 1999, the adjusted levy limit is equal to the 
133.28  levy limit base computed under subdivision 2, multiplied by: 
133.29     (a) one plus a percentage equal to the percentage growth in 
133.30  the implicit price deflator; and 
133.31     (b) one plus a percentage equal to the percentage increase 
133.32  in number of households, if any, for the most recent 12-month 
133.33  period for which data is available. 
133.34     Subd. 4.  [PROPERTY TAX LEVY LIMIT.] For taxes levied in 
133.35  1997, 1998, and 1999, the property tax levy limit for a local 
133.36  governmental unit is equal to its adjusted levy limit base 
134.1   determined under subdivision 3 plus any additional levy 
134.2   authorized under section 275.73, which is levied against net tax 
134.3   capacity, reduced by the sum of (a) the total amount of aids 
134.4   that the local governmental unit is certified to receive under 
134.5   sections 477A.011 to 477A.014, (b) homestead and agricultural 
134.6   aids it is certified to receive under section 273.1398, (c) 
134.7   local performance aid it is certified to receive under section 
134.8   477A.05, and (d) taconite aids under sections 298.28 and 298.282 
134.9   including any aid which was required to be placed in a special 
134.10  fund for expenditure in the next succeeding year. 
134.11     Subd. 5.  [LEVIES IN EXCESS OF LEVY LIMITS.] If the levy 
134.12  made by a city exceeds the levy limit provided in sections 
134.13  275.70 to 275.74, except when the excess levy is due to the 
134.14  rounding of the rate in accordance with section 275.28, the 
134.15  county auditor shall only extend the amount of taxes permitted 
134.16  under sections 275.70 to 275.74, as provided for in section 
134.17  275.16. 
134.18     Sec. 3.  [275.72] [LEVY LIMIT ADJUSTMENTS FOR CONSOLIDATION 
134.19  AND ANNEXATION.] 
134.20     Subdivision 1.  [ADJUSTMENTS FOR CONSOLIDATION.] If all of 
134.21  the area included in two or more local governmental units is 
134.22  consolidated, merged, or otherwise combined to constitute a 
134.23  single governmental unit, the levy limit base for the resulting 
134.24  governmental unit in the first levy year in which the 
134.25  consolidation is effective shall be equal to (a) the highest tax 
134.26  rate in any of the merging governmental units in the previous 
134.27  year multiplied by the net tax capacity of all the merging 
134.28  governmental units in the previous year, minus (b) the sum of 
134.29  all levies in the merging governmental units in the previous 
134.30  year that qualify as special levies under section 275.70, 
134.31  subdivision 3. 
134.32     Subd. 2.  [ADJUSTMENTS FOR ANNEXATION.] If a local 
134.33  governmental unit increases its tax base through annexation of 
134.34  an area which is not the area of an entire local governmental 
134.35  unit, the levy limit base of the local governmental unit in the 
134.36  first year in which the annexation is effective shall be equal 
135.1   to its adjusted levy limit base from the previous year 
135.2   multiplied by the ratio of the net tax capacity in the local 
135.3   governmental unit after the annexation compared to its net tax 
135.4   capacity before the annexation. 
135.5      Subd. 3.  [TRANSFER OF GOVERNMENTAL FUNCTIONS.] If a 
135.6   function or service of one local governmental unit is 
135.7   transferred to another local governmental unit, the levy limits 
135.8   established under section 275.71 shall be adjusted by the 
135.9   commissioner of revenue in such manner so as to fairly and 
135.10  equitably reflect the reduced or increased property tax burden 
135.11  resulting from the transfer.  The aggregate of the adjusted 
135.12  limitations shall not exceed the aggregate of the limitations 
135.13  prior to adjustment. 
135.14     Subd. 4.  [EFFECTIVE DATE FOR LEVY LIMITS PURPOSES.] 
135.15  Annexations, mergers, and shifts in services and functional 
135.16  responsibilities that are effective by June 30 of the levy year 
135.17  are included in the calculation of the levy limit for that levy 
135.18  year.  Annexations, mergers, and shifts in services and 
135.19  functional responsibilities that are effective after June 30 of 
135.20  a levy year are not included in the calculation of the levy 
135.21  limit until the subsequent levy year. 
135.22     Sec. 4.  [275.73] [ELECTIONS FOR ADDITIONAL LEVIES.] 
135.23     Subdivision 1.  [ADDITIONAL LEVY AUTHORIZATION.] 
135.24  Notwithstanding the provisions of sections 275.70 to 275.72, but 
135.25  subject to other law or charter provisions establishing other 
135.26  limitations on the amount of property taxes a local governmental 
135.27  unit may levy, a local governmental unit may levy an additional 
135.28  levy in any amount which is approved by the majority of voters 
135.29  of the governmental unit voting on the question at a general or 
135.30  special election.  Notwithstanding section 275.61, any levy 
135.31  authorized under this section shall be levied against net tax 
135.32  capacity unless the levy required voter approval under another 
135.33  general or special law or any charter provisions.  When the 
135.34  governing body of the local governmental unit resolves to 
135.35  increase the levy pursuant to this section, it shall provide for 
135.36  submission of the proposition of an additional levy at a general 
136.1   or special election.  Notice of the election shall be given in 
136.2   the manner required by law.  The notice shall state the purpose 
136.3   and the maximum yearly amount of the additional levy. 
136.4      Subd. 2.  [LEVY EFFECTIVE DATE.] An additional levy 
136.5   approved under subdivision 1 at a general or special election 
136.6   held prior to October 1 in any levy year may be levied in that 
136.7   same levy year and subsequent levy years.  An additional levy 
136.8   approved under subdivision 1 at a general or special election 
136.9   held after September 30 in any levy year shall not be levied in 
136.10  that same levy but may be levied in subsequent levy years. 
136.11     Sec. 5.  [275.74] [STATE REGULATION OF LEVIES.] 
136.12     (a) The commissioner of revenue shall make all necessary 
136.13  calculations for determining levy limits for local governmental 
136.14  units and notify the affected governmental units of their levy 
136.15  limits directly by August 1 of each levy year.  In addition, the 
136.16  commissioner of revenue shall notify all county auditors of the 
136.17  levy limits imposed on local governmental units located within 
136.18  their boundaries so that they may fix the levies as required in 
136.19  section 275.16.  The local governmental units shall provide the 
136.20  commissioner of revenue with all information that the 
136.21  commissioner deems necessary to make the calculations provided 
136.22  for in sections 275.70 to 275.73. 
136.23     (b) Counties shall report annually to the commissioner of 
136.24  revenue on the purposes for which the special levy authorized 
136.25  under section 275.70, subdivision 5, clause (5), is used.  The 
136.26  report shall be made on a form developed by the commissioner, in 
136.27  consultation with the commissioner of human services, and 
136.28  provide information on the costs to the county for the relevant 
136.29  programs both before and after the reform of the income 
136.30  maintenance programs enacted by the 1997 legislature. 
136.31     (c) A local governmental unit may request authorization to 
136.32  levy under section 275.70, clause (6) if (i) the governmental 
136.33  unit is located in an area designated by the Federal Emergency 
136.34  Management Agency pursuant to a major disaster declaration 
136.35  issued for Minnesota by President Clinton after April 1, 1997, 
136.36  and before April 21, 1997, and (ii) the amount of direct 
137.1   un-reimbursed costs incurred by the governmental unit related to 
137.2   the flooding and its clean-up, including emergency disaster 
137.3   assistance to residents, exceeds five percent of its levy in 
137.4   1997.  The local governmental unit must submit a request to the 
137.5   commissioner of revenue by July 1 of the levy year and the 
137.6   request must include information documenting the estimated 
137.7   un-reimbursed costs.  The commissioner of revenue may grant levy 
137.8   authority, up to the amount requested based on the documentation 
137.9   submitted.  All decisions of the commissioner are final.  The 
137.10  commissioner shall send a report to the chairs of the house and 
137.11  senate tax committees on the levies authorized and levied under 
137.12  this provision by January 15 of the year following the levy year.
137.13     Sec. 6.  [EFFECTIVE DATE.] 
137.14     This article is effective for taxes levied in 1997, 1998, 
137.15  and 1999, payable in 1998, 1999, and 2000. 
137.16                             ARTICLE 5
137.17                         TRUTH IN TAXATION
137.18     Section 1.  Minnesota Statutes 1996, section 275.065, 
137.19  subdivision 1, is amended to read: 
137.20     Subdivision 1.  [PROPOSED LEVY.] (a) Notwithstanding any 
137.21  law or charter to the contrary, on or before September 15, each 
137.22  taxing authority, other than a school district, shall adopt a 
137.23  proposed budget and shall certify to the county auditor the 
137.24  proposed or, in the case of a town, the final property tax levy 
137.25  for taxes payable in the following year. 
137.26     (b) On or before September 30, each school district shall 
137.27  certify to the county auditor the proposed property tax levy for 
137.28  taxes payable in the following year.  The school district may 
137.29  shall certify the proposed levy as: 
137.30     (1) a specific dollar amount; or the state determined 
137.31  school levy amount as prescribed under section 124A.23, 
137.32  subdivision 2; 
137.33     (2) voter approved referendum and debt levies; and 
137.34     (2) an amount equal to (3) the sum of the remaining school 
137.35  levies, or the maximum levy limitation certified by the 
137.36  commissioner of children, families, and learning to the county 
138.1   auditor according to section 124.918, subdivision 1, less the 
138.2   amounts levied under clauses (1) and (2). 
138.3      (c) If the board of estimate and taxation or any similar 
138.4   board that establishes maximum tax levies for taxing 
138.5   jurisdictions within a first class city certifies the maximum 
138.6   property tax levies for funds under its jurisdiction by charter 
138.7   to the county auditor by September 15, the city shall be deemed 
138.8   to have certified its levies for those taxing jurisdictions. 
138.9      (d) For purposes of this section, "taxing authority" 
138.10  includes all home rule and statutory cities, towns, counties, 
138.11  school districts, and special taxing districts as defined in 
138.12  section 275.066.  Intermediate school districts that levy a tax 
138.13  under chapter 124 or 136D, joint powers boards established under 
138.14  sections 124.491 to 124.495, and common school districts No. 
138.15  323, Franconia, and No. 815, Prinsburg, are also special taxing 
138.16  districts for purposes of this section.  
138.17     Sec. 2.  Minnesota Statutes 1996, section 275.065, is 
138.18  amended by adding a subdivision to read: 
138.19     Subd. 1a.  [LEVY; SHARED, MERGED, CONSOLIDATED 
138.20  SERVICES.] If two or more taxing authorities are in the process 
138.21  of negotiating an agreement for sharing, merging, or 
138.22  consolidating services between those taxing authorities at the 
138.23  time the proposed levy is to be certified under subdivision 1, 
138.24  each taxing authority involved in the negotiation shall certify 
138.25  its total proposed levy as provided in that subdivision, 
138.26  including a notification to the county auditor of the specific 
138.27  service involved in the agreement which is not yet finalized.  
138.28  The affected taxing authorities may amend their proposed levies 
138.29  under subdivision 1 until October 10 for levy amounts relating 
138.30  only to the specific service involved. 
138.31     Sec. 3.  Minnesota Statutes 1996, section 275.065, 
138.32  subdivision 3, is amended to read: 
138.33     Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
138.34  county auditor shall prepare and the county treasurer shall 
138.35  deliver after November 10 and on or before November 24 17 each 
138.36  year, by first class mail to each taxpayer at the address listed 
139.1   on the county's current year's assessment roll, a notice of 
139.2   proposed property taxes and, in the case of a town, final 
139.3   property taxes.  
139.4      (b) The commissioner of revenue shall prescribe the form of 
139.5   the notice. 
139.6      (c) The notice must inform taxpayers that it contains the 
139.7   amount of property taxes each taxing authority other than a town 
139.8   proposes to collect for taxes payable the following year and, 
139.9   for a town, the amount of its final levy.  It In the case of a 
139.10  town, or in the case of the state determined portion of the 
139.11  school district levy, the final tax amount will be its proposed 
139.12  tax.  The notice must clearly state that each taxing authority, 
139.13  including regional library districts established under section 
139.14  134.201, and including the metropolitan taxing districts as 
139.15  defined in paragraph (i), but excluding all other special taxing 
139.16  districts and towns, will hold a public meeting to receive 
139.17  public testimony on the proposed budget and proposed or final 
139.18  property tax levy, or, in case of a school district, on the 
139.19  current budget and proposed property tax levy.  It must clearly 
139.20  state the time and place of each taxing authority's meeting and 
139.21  an address where comments will be received by mail.  
139.22     (d) The notice must state for each parcel: 
139.23     (1) the market value of the property as determined under 
139.24  section 273.11, and used for computing property taxes payable in 
139.25  the following year and for taxes payable in the current year; 
139.26  and, in the case of residential property, whether the property 
139.27  is classified as homestead or nonhomestead.  The notice must 
139.28  clearly inform taxpayers of the years to which the market values 
139.29  apply and that the values are final values; 
139.30     (2) the items listed below, shown separately by county, 
139.31  city or town, school district excess referenda levy state 
139.32  determined school tax, remaining voter approved school levy, 
139.33  other local school district levy, regional library district, if 
139.34  in existence, the total of the metropolitan special taxing 
139.35  districts as defined in paragraph (i) and the sum of 
139.36  the remaining special taxing districts, and as a total of the 
140.1   all taxing authorities, including all special taxing districts, 
140.2   the proposed or, for a town, final net tax on the property for 
140.3   taxes payable the following year and the actual tax for taxes 
140.4   payable the current year: 
140.5      (i) the actual tax for taxes payable in the current year; 
140.6      (ii) the tax change due to spending factors, defined as the 
140.7   proposed tax minus the constant spending tax amount; 
140.8      (iii) the tax change due to other factors, defined as the 
140.9   constant spending tax amount minus the actual current year tax; 
140.10  and 
140.11     (iv) the proposed tax amount. 
140.12     In the case of a town or the state determined school tax, 
140.13  the final tax shall also be its proposed tax.  If a school 
140.14  district has certified under section 124A.03, subdivision 2, 
140.15  that a referendum will be held in the school district at the 
140.16  November general election, the county auditor must note next to 
140.17  the school district's proposed amount that a referendum is 
140.18  pending and that, if approved by the voters, the tax amount may 
140.19  be higher than shown on the notice.  For the purposes of this 
140.20  subdivision, "school district excess referenda levy" means 
140.21  school district taxes for operating purposes approved at 
140.22  referendums, including those taxes based on net tax capacity as 
140.23  well as those based on market value.  "School district excess 
140.24  referenda levy" does not include school district taxes for 
140.25  capital expenditures approved at referendums or school district 
140.26  taxes to pay for the debt service on bonds approved at 
140.27  referenda.  In the case of the city of Minneapolis, the levy for 
140.28  the Minneapolis library board and the levy for Minneapolis park 
140.29  and recreation shall be listed separately from the remaining 
140.30  amount of the city's levy considered as special taxing district 
140.31  levies for the purposes of this subdivision.  In the case of a 
140.32  parcel where tax increment or the fiscal disparities areawide 
140.33  tax under chapter 276A or 473F applies, the proposed tax levy on 
140.34  the captured value or the proposed tax levy on the tax capacity 
140.35  subject to the areawide tax must each be stated separately and 
140.36  not included in the sum of the special taxing districts; and 
141.1      (3) the increase or decrease in the amounts in clause (2) 
141.2   from between the total taxes payable in the current year to and 
141.3   the total proposed or, for a town, final taxes payable the 
141.4   following year taxes, expressed as a dollar amount and as a 
141.5   percentage. 
141.6      (e) The notice must clearly state that the proposed or 
141.7   final taxes do not include the following: 
141.8      (1) special assessments; 
141.9      (2) levies approved by the voters after the date the 
141.10  proposed taxes are certified, including bond referenda, school 
141.11  district levy referenda, and levy limit increase referenda; 
141.12     (3) amounts necessary to pay cleanup or other costs due to 
141.13  a natural disaster occurring after the date the proposed taxes 
141.14  are certified; 
141.15     (4) amounts necessary to pay tort judgments against the 
141.16  taxing authority that become final after the date the proposed 
141.17  taxes are certified; and 
141.18     (5) the contamination tax imposed on properties which 
141.19  received market value reductions for contamination. 
141.20     (f) Except as provided in subdivision 7, failure of the 
141.21  county auditor to prepare or the county treasurer to deliver the 
141.22  notice as required in this section does not invalidate the 
141.23  proposed or final tax levy or the taxes payable pursuant to the 
141.24  tax levy. 
141.25     (g) If the notice the taxpayer receives under this section 
141.26  lists the property as nonhomestead and the homeowner provides 
141.27  satisfactory documentation to the county assessor that the 
141.28  property is owned and used as the owner's homestead, the 
141.29  assessor shall reclassify the property to homestead for taxes 
141.30  payable in the following year. 
141.31     (h) In the case of class 4 residential property used as a 
141.32  residence for lease or rental periods of 30 days or more, the 
141.33  taxpayer must either: 
141.34     (1) mail or deliver a copy of the notice of proposed 
141.35  property taxes to each tenant, renter, or lessee; or 
141.36     (2) post a copy of the notice in a conspicuous place on the 
142.1   premises of the property.  
142.2      The notice must be mailed or posted by the taxpayer by 
142.3   November 27 or within three days of receipt of the notice, 
142.4   whichever is later.  A taxpayer may notify the county treasurer 
142.5   of the address of the taxpayer, agent, caretaker, or manager of 
142.6   the premises to which the notice must be mailed in order to 
142.7   fulfill the requirements of this paragraph. 
142.8      (i) For purposes of this subdivision, subdivisions 5a and 
142.9   6, "metropolitan special taxing districts" means the following 
142.10  taxing districts in the seven-county metropolitan area that levy 
142.11  a property tax for any of the specified purposes listed below: 
142.12     (1) metropolitan council under section 473.132, 473.167, 
142.13  473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 
142.14     (2) metropolitan airports commission under section 473.667, 
142.15  473.671, or 473.672; and 
142.16     (3) metropolitan mosquito control commission under section 
142.17  473.711. 
142.18     For purposes of this section, any levies made by the 
142.19  regional rail authorities in the county of Anoka, Carver, 
142.20  Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
142.21  398A shall be included with the appropriate county's levy and 
142.22  shall be discussed at that county's public hearing. 
142.23     (j) For taxes levied in 1996, payable in 1997 only, in the 
142.24  case of a statutory or home rule charter city or town that 
142.25  exercises the local levy option provided in section 473.388, 
142.26  subdivision 7, the notice of its proposed taxes may include a 
142.27  statement of the amount by which its proposed tax increase for 
142.28  taxes payable in 1997 is attributable to its exercise of that 
142.29  option, together with a statement that the levy of the 
142.30  metropolitan council was decreased by a similar amount because 
142.31  of the exercise of that option. 
142.32     Sec. 4.  Minnesota Statutes 1996, section 275.065, is 
142.33  amended by adding a subdivision to read: 
142.34     Subd. 3a.  [CONSTANT SPENDING LEVY AMOUNT.] (a) For 
142.35  purposes of this section, "constant spending levy amount" for a 
142.36  county, city, town, or special taxing district means the 
143.1   property tax levy that the taxing authority would need to levy 
143.2   so that the sum of its levy, including its fiscal disparities 
143.3   distribution levy under section 276A.06, subdivision 3, clause 
143.4   (a), or 473F.08, subdivision 3, clause (a), plus its property 
143.5   tax aid amounts would remain constant from the current year to 
143.6   the proposed year, taking into account the fiscal disparities 
143.7   distribution levy amounts and the property tax aid amounts that 
143.8   have been certified for the proposed year.  For the purposes of 
143.9   this paragraph, property tax aids include homestead and 
143.10  agricultural credit aid under section 273.1398, subdivision 2, 
143.11  local government aid under section 477A.013, local performance 
143.12  aid under section 477A.05, county criminal justice aid under 
143.13  section 477A.0121, and family preservation aid under section 
143.14  477A.0122. 
143.15     (b) For school districts, for the state determined school 
143.16  tax, "constant spending levy amount" is the same as the proposed 
143.17  tax.  For the other school district levies, the commissioner 
143.18  shall compute the constant spending levy amount by separately 
143.19  calculating each program levy using the current year's revenue 
143.20  per pupil unit and the proposed year's tax base, pupil units and 
143.21  aid amounts, and then adding the resulting amounts.  In no case 
143.22  shall the constant spending levy amount be less than $0.  The 
143.23  commissioner shall also determine the apportionment of the 
143.24  fiscal disparities distribution levy between the state 
143.25  determined school levy and the other school district levies.  On 
143.26  or before September 30 annually, the commissioner must report to 
143.27  the county auditor each school district's constant spending 
143.28  state determined school levy and its constant spending levy 
143.29  amount for the other school district levies.  
143.30     Sec. 5.  Minnesota Statutes 1996, section 275.065, 
143.31  subdivision 5a, is amended to read: 
143.32     Subd. 5a.  [PUBLIC ADVERTISEMENT.] (a) A city that has a 
143.33  population of more than 2,500, county, a metropolitan special 
143.34  taxing district as defined in subdivision 3, paragraph (i), a 
143.35  regional library district established under section 134.201, or 
143.36  school district shall advertise in a newspaper a notice of its 
144.1   intent to adopt a budget and property tax levy or, in the case 
144.2   of a school district, to review its current budget and proposed 
144.3   property taxes payable in the following year, at a public 
144.4   hearing.  The notice must be published not less than two 
144.5   business days nor more than six business days before the hearing.
144.6      The advertisement must be at least one-eighth page in size 
144.7   of a standard-size or a tabloid-size newspaper.  The 
144.8   advertisement must not be placed in the part of the newspaper 
144.9   where legal notices and classified advertisements appear.  The 
144.10  advertisement must be published in an official newspaper of 
144.11  general circulation in the taxing authority.  The newspaper 
144.12  selected must be one of general interest and readership in the 
144.13  community, and not one of limited subject matter.  The 
144.14  advertisement must appear in a newspaper that is published at 
144.15  least once per week.  
144.16     For purposes of this section, the metropolitan special 
144.17  taxing district's advertisement must only be published in the 
144.18  Minneapolis Star and Tribune and the Saint Paul Pioneer Press. 
144.19     (b) The advertisement for school districts, metropolitan 
144.20  special taxing districts, and regional library districts must be 
144.21  in the following form, except that the notice for a school 
144.22  district may include references to the current budget in regard 
144.23  to proposed property taxes. 
144.24                             "NOTICE OF
144.25                      PROPOSED PROPERTY TAXES
144.26            (City/County/School District/Metropolitan
144.27                  Special Taxing District/Regional
144.28                   Library District) of .........
144.29  The governing body of ........ will soon hold budget hearings 
144.30  and vote on the property taxes for (city/county/metropolitan 
144.31  special taxing district/regional library district services that 
144.32  will be provided in 199_ (year)/school district services that 
144.33  will be provided in 199_ (year) and 199_ (year)). 
144.34                     NOTICE OF PUBLIC HEARING:
144.35  All concerned citizens are invited to attend a public hearing 
144.36  and express their opinions on the proposed (city/county/school 
145.1   district/metropolitan special taxing district/regional library 
145.2   district) budget and property taxes, or in the case of a school 
145.3   district, its current budget and proposed property taxes, 
145.4   payable in the following year.  The hearing will be held on 
145.5   (Month/Day/Year) at (Time) at (Location, Address)." 
145.6      (c) The advertisement for cities and counties must be in 
145.7   the following form. 
145.8                        "NOTICE OF PROPOSED
145.9                  TOTAL BUDGET AND PROPERTY TAXES
145.10  The (city/county) governing body or board of commissioners will 
145.11  hold a public hearing to discuss the budget and to vote on the 
145.12  amount of property taxes to collect for services the 
145.13  (city/county) will provide in (year). 
145.14     
145.15  SPENDING:  The total budget amounts below compare 
145.16  (city's/county's) (year) total actual budget with the amount the 
145.17  (city/county) proposes to spend in (year). 
145.18     
145.19  (Year) Total          Proposed (Year)          Change from
145.20  Actual Budget             Budget               (Year)-(Year)
145.21     
145.22    $.......              $.......                ...%
145.23     
145.24  TAXES:  The property tax amounts below compare that portion of 
145.25  the current budget levied in property taxes in (city/county) for 
145.26  (year) with the property taxes the (city/county) proposes to 
145.27  collect in (year). 
145.28     
145.29  (Year) Property       Proposed (Year)          Change from
145.30      Taxes              Property Taxes         (Year)-(Year)
145.31     
145.32    $.......              $.......                ...% 
145.33     
145.34                    ATTEND THE PUBLIC HEARING
145.35  All (city/county) residents are invited to attend the public 
145.36  hearing of the (city/county) to express your opinions on the 
146.1   budget and the proposed amount of (year) property taxes.  The 
146.2   hearing will be held on: 
146.3                       (Month/Day/Year/Time)
146.4                         (Location/Address)
146.5   If the discussion of the budget cannot be completed, a time and 
146.6   place for continuing the discussion will be announced at the 
146.7   hearing.  You are also invited to send your written comments to: 
146.8                           (City/County)
146.9                        (Location/Address)"
146.10     (d) For purposes of this subdivision, the budget amounts 
146.11  listed on the advertisement mean: 
146.12     (1) for cities, the total government fund expenditures, as 
146.13  defined by the state auditor under section 471.6965, less any 
146.14  expenditures for improvements or services that are specially 
146.15  assessed or charged under chapter 429, 430, 435, or the 
146.16  provisions of any other law or charter; and 
146.17     (2) for counties, the total government fund expenditures, 
146.18  as defined by the state auditor under section 375.169, less any 
146.19  expenditures for direct payments to recipients or providers for 
146.20  the human service aids listed in section 273.1398, subdivision 
146.21  1, paragraph (i). 
146.22     (c) (e) A city with a population of over 500 but not more 
146.23  than 2,500 must advertise by posted notice as defined in section 
146.24  645.12, subdivision 1.  The advertisement must be posted at the 
146.25  time provided in paragraph (a).  It must be in the form required 
146.26  in paragraph (b). 
146.27     (d) (f) For purposes of this subdivision, the population of 
146.28  a city is the most recent population as determined by the state 
146.29  demographer under section 4A.02. 
146.30     (e) (g) The commissioner of revenue, subject to the 
146.31  approval of the chairs of the house and senate tax committees, 
146.32  shall prescribe the form and format of the advertisement. 
146.33     (f) For calendar year 1993, each taxing authority required 
146.34  to publish an advertisement must include on the advertisement a 
146.35  statement that information on the increases or decreases of the 
146.36  total budget, including employee and independent contractor 
147.1   compensation in the prior year, current year, and proposed 
147.2   budget year will be discussed at the hearing. 
147.3      (g) Notwithstanding paragraph (f), for 1993, the 
147.4   commissioner of revenue shall prescribe the form, format, and 
147.5   content of an advertisement comparing current and proposed 
147.6   expense budgets for the metropolitan council, the metropolitan 
147.7   airports commission, and the metropolitan mosquito control 
147.8   commission.  The expense budget must include occupancy, 
147.9   personnel, contractual and capital improvement expenses.  The 
147.10  form, format, and content of the advertisement must be approved 
147.11  by the chairs of the house and senate tax committees prior to 
147.12  publication. 
147.13     Sec. 6.  Minnesota Statutes 1996, section 275.065, 
147.14  subdivision 6, is amended to read: 
147.15     Subd. 6.  [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 
147.16     (a) For purposes of this section, the following terms shall 
147.17  have the meanings given: 
147.18     (1) "Initial hearing" means the first and primary hearing 
147.19  held to discuss the taxing authority's proposed budget and 
147.20  proposed property tax levy for taxes payable in the following 
147.21  year, or, for school districts, the current budget and the 
147.22  proposed property tax levy for taxes payable in the following 
147.23  year. 
147.24     (2) "Continuation hearing" means a hearing held to complete 
147.25  the initial hearing, if the initial hearing is not completed on 
147.26  its scheduled date. 
147.27     (3) "Subsequent hearing" means the hearing held to adopt 
147.28  the taxing authority's final property tax levy, and, in the case 
147.29  of taxing authorities other than school districts, the final 
147.30  budget, for taxes payable in the following year. 
147.31     (b) Between November 29 19 and December 20 10, the 
147.32  governing bodies of a city that has a population over 500, 
147.33  county, metropolitan special taxing districts as defined in 
147.34  subdivision 3, paragraph (i), and regional library districts 
147.35  shall each hold a an initial public hearing to discuss and seek 
147.36  public comment on its final budget and property tax levy for 
148.1   taxes payable in the following year, and the governing body of 
148.2   the school district shall hold a an initial public hearing to 
148.3   review its current budget and proposed property tax levy for 
148.4   taxes payable in the following year.  The metropolitan special 
148.5   taxing districts shall be required to hold only a single 
148.6   joint initial public hearing, the location of which will be 
148.7   determined by the affected metropolitan agencies. 
148.8      (c) The initial hearing must be held after 5:00 p.m. if 
148.9   scheduled on a day other than Saturday.  No initial hearing may 
148.10  be held on a Sunday.  
148.11     (d) At the initial hearing under this subdivision, the 
148.12  percentage increase in property taxes proposed by the taxing 
148.13  authority, if any, and the specific purposes for which property 
148.14  tax revenues are being increased must be discussed.  During the 
148.15  discussion, the governing body shall hear comments regarding a 
148.16  proposed increase and explain the reasons for the proposed 
148.17  increase.  The public shall be allowed to speak and to ask 
148.18  questions.  At the public hearing, the school district must also 
148.19  provide and discuss information on the distribution of its 
148.20  revenues by revenue source, and the distribution of its spending 
148.21  by program area.  
148.22     (e) If the initial hearing is not completed on its 
148.23  scheduled date, the taxing authority must announce, prior to 
148.24  adjournment of the hearing, the date, time, and place for the 
148.25  continuation of the hearing.  The continuation hearing must be 
148.26  held at least five business days but no more than ten business 
148.27  days after the initial hearing.  A continuation hearing may not 
148.28  be held later than December 10 except as provided in paragraphs 
148.29  (f) and (g).  A continuation hearing must be held after 5:00 
148.30  p.m. if scheduled on a day other than Saturday.  No continuation 
148.31  hearing may be held on a Sunday. 
148.32     (f) The governing body of a county shall hold its initial 
148.33  hearing on the first Tuesday in December each year, and may hold 
148.34  additional initial hearings on other dates before December 10 if 
148.35  necessary for the convenience of county residents.  If the 
148.36  county needs a continuation of its hearing, the continuation 
149.1   hearing shall be held on the second Tuesday in December even if 
149.2   that second Tuesday is after December 10. 
149.3      (g) The metropolitan special taxing districts shall hold a 
149.4   joint initial public hearing on the first Monday of December.  A 
149.5   continuation hearing, if necessary, shall be held on the second 
149.6   Monday of December even if that second Monday is after December 
149.7   10. 
149.8      (h) The county auditor shall provide for the coordination 
149.9   of initial and continuation hearing dates for all school 
149.10  districts and cities within the county to prevent conflicts 
149.11  under clauses (i) and (j). 
149.12     (i) By August 10, each school board and the board of the 
149.13  regional library district shall certify to the county auditors 
149.14  of the counties in which the school district or regional library 
149.15  district is located the dates on which it elects to hold its 
149.16  initial hearing and any continuation hearing.  If a school board 
149.17  or regional library district does not certify these dates by 
149.18  August 10, the auditor will assign the initial and continuation 
149.19  hearing dates.  The dates elected or assigned must not conflict 
149.20  with the initial and continuation hearing dates of the county or 
149.21  the metropolitan special taxing districts.  
149.22     (j) By August 20, the county auditor shall notify the 
149.23  clerks of the cities within the county of the dates on which 
149.24  school districts and regional library districts have elected to 
149.25  hold their initial and continuation hearings.  At the time a 
149.26  city certifies its proposed levy under subdivision 1 it shall 
149.27  certify the dates on which it elects to hold its initial hearing 
149.28  and any continuation hearing.  If a city does not certify these 
149.29  dates by September 15, the auditor will assign the initial and 
149.30  continuation hearing dates.  The dates elected or assigned must 
149.31  not conflict with the initial and continuation hearing dates of 
149.32  the county, metropolitan special taxing districts, regional 
149.33  library districts, or school districts within which the city is 
149.34  located.  This paragraph does not apply to cities of 500 
149.35  population or less. 
149.36     (k) The county initial hearing date and the city, 
150.1   metropolitan special taxing district, regional library district, 
150.2   and school district initial hearing dates must be designated on 
150.3   the notices required under subdivision 3.  The continuation 
150.4   hearing dates need not be stated on the notices.  
150.5      (l) At a subsequent hearing, each county, school district, 
150.6   city over 500 population, and metropolitan special taxing 
150.7   district may amend its proposed property tax levy and must adopt 
150.8   a final property tax levy.  Each county, city over 500 
150.9   population, and metropolitan special taxing district may also 
150.10  amend its proposed budget and must adopt a final budget at the 
150.11  subsequent hearing.  The final property tax levy must be adopted 
150.12  prior to adopting the final budget.  A school district is not 
150.13  required to adopt its final budget at the subsequent hearing.  
150.14  The subsequent hearing of a taxing authority must be held on a 
150.15  date subsequent to the date of the taxing authority's initial 
150.16  public hearing, or subsequent to the date of its continuation 
150.17  hearing.  If a continuation hearing is held, the subsequent 
150.18  hearing must be held either immediately following the 
150.19  continuation hearing or on a date subsequent to the continuation 
150.20  hearing.  The subsequent hearing may be held at a regularly 
150.21  scheduled board or council meeting or at a special meeting 
150.22  scheduled for the purposes of the subsequent hearing.  The 
150.23  subsequent hearing of a taxing authority does not have to be 
150.24  coordinated by the county auditor to prevent a conflict with an 
150.25  initial hearing, a continuation hearing, or a subsequent hearing 
150.26  of any other taxing authority.  All subsequent hearings must be 
150.27  held prior to five working days after December 20 10 of the levy 
150.28  year.  The date, time, and place of the subsequent hearing must 
150.29  be announced at the initial public hearing or at the 
150.30  continuation hearing. 
150.31     (m) The property tax levy certified under section 275.07 by 
150.32  a city of any population, county, metropolitan special taxing 
150.33  district, regional library district, or school district must not 
150.34  exceed the proposed levy determined under subdivision 1, except 
150.35  by an amount up to the sum of the following amounts: 
150.36     (1) the amount of a school district levy whose voters 
151.1   approved a referendum to increase taxes under section 124.82, 
151.2   subdivision 3, 124A.03, subdivision 2, or 124B.03, subdivision 
151.3   2, after the proposed levy was certified; 
151.4      (2) the amount of a city or county levy approved by the 
151.5   voters after the proposed levy was certified; 
151.6      (3) the amount of a levy to pay principal and interest on 
151.7   bonds approved by the voters under section 475.58 after the 
151.8   proposed levy was certified; 
151.9      (4) the amount of a levy to pay costs due to a natural 
151.10  disaster occurring after the proposed levy was certified, if 
151.11  that amount is approved by the commissioner of revenue under 
151.12  subdivision 6a; 
151.13     (5) the amount of a levy to pay tort judgments against a 
151.14  taxing authority that become final after the proposed levy was 
151.15  certified, if the amount is approved by the commissioner of 
151.16  revenue under subdivision 6a; 
151.17     (6) the amount of an increase in levy limits certified to 
151.18  the taxing authority by the commissioner of children, families, 
151.19  and learning or the commissioner of revenue after the proposed 
151.20  levy was certified; and 
151.21     (7) the amount required under section 124.755. 
151.22     At the hearing under this subdivision, the percentage 
151.23  increase in property taxes proposed by the taxing authority, if 
151.24  any, and the specific purposes for which property tax revenues 
151.25  are being increased must be discussed.  
151.26     During the discussion, the governing body shall hear 
151.27  comments regarding a proposed increase and explain the reasons 
151.28  for the proposed increase.  The public shall be allowed to speak 
151.29  and to ask questions.  At the subsequent hearing held as 
151.30  provided in this subdivision, the governing body, other than the 
151.31  governing body of a school district, shall adopt its final 
151.32  property tax levy prior to adopting its final budget. 
151.33     If the hearing is not completed on its scheduled date, the 
151.34  taxing authority must announce, prior to adjournment of the 
151.35  hearing, the date, time, and place for the continuation of the 
151.36  hearing.  The continued hearing must be held at least five 
152.1   business days but no more than 14 business days after the 
152.2   original hearing. 
152.3      The hearing must be held after 5:00 p.m. if scheduled on a 
152.4   day other than Saturday.  No hearing may be held on a Sunday.  
152.5   The governing body of a county shall hold a hearing on the 
152.6   second Tuesday in December each year, and may hold additional 
152.7   hearings on other dates before December 20 if necessary for the 
152.8   convenience of county residents.  If the county needs a 
152.9   continuation of its hearing, the continued hearing shall be held 
152.10  on the third Tuesday in December.  If the third Tuesday in 
152.11  December falls on December 21, the county's continuation hearing 
152.12  shall be held on Monday, December 20.  The county auditor shall 
152.13  provide for the coordination of hearing dates for all cities and 
152.14  school districts within the county. 
152.15     The metropolitan special taxing districts shall hold a 
152.16  joint public hearing on the first Monday of December.  A 
152.17  continuation hearing, if necessary, shall be held on the second 
152.18  Monday of December. 
152.19     By August 10, each school board and the board of the 
152.20  regional library district shall certify to the county auditors 
152.21  of the counties in which the school district or regional library 
152.22  district is located the dates on which it elects to hold its 
152.23  hearings and any continuations.  If a school board or regional 
152.24  library district does not certify the dates by August 10, the 
152.25  auditor will assign the hearing date.  The dates elected or 
152.26  assigned must not conflict with the hearing dates of the county 
152.27  or the metropolitan special taxing districts.  By August 20, the 
152.28  county auditor shall notify the clerks of the cities within the 
152.29  county of the dates on which school districts and regional 
152.30  library districts have elected to hold their hearings.  At the 
152.31  time a city certifies its proposed levy under subdivision 1 it 
152.32  shall certify the dates on which it elects to hold its hearings 
152.33  and any continuations.  For its initial hearing and for the 
152.34  subsequent hearing at which the final property tax levy will be 
152.35  adopted, the city must not select dates that conflict with the 
152.36  county hearing dates, metropolitan special taxing district 
153.1   dates, or with those elected by or assigned to the school 
153.2   districts or regional library district in which the city is 
153.3   located.  For continuation hearings, the city may select dates 
153.4   that conflict with other taxing authorities' dates if the city 
153.5   deems it necessary. 
153.6      The county hearing dates and the city, metropolitan special 
153.7   taxing district, regional library district, and school district 
153.8   hearing dates must be designated on the notices required under 
153.9   subdivision 3.  The continuation dates need not be stated on the 
153.10  notices.  
153.11     (n) This subdivision does not apply to towns and special 
153.12  taxing districts other than regional library districts and 
153.13  metropolitan special taxing districts. 
153.14     (o) Notwithstanding the requirements of this section, the 
153.15  employer is required to meet and negotiate over employee 
153.16  compensation as provided for in chapter 179A.  
153.17     Sec. 7.  Minnesota Statutes 1996, section 275.065, is 
153.18  amended by adding a subdivision to read: 
153.19     Subd. 6b.  [JOINT PUBLIC HEARINGS.] Notwithstanding any 
153.20  other provision of law, any city with a population of 10,000 and 
153.21  over, may conduct a more comprehensive public hearing than is 
153.22  contained in subdivision 6 by including a board member from the 
153.23  county, a board member from the school district located within 
153.24  the city's boundary, and the member or the member's designee of 
153.25  the metropolitan council for the district in which the city is 
153.26  located, if the city is in the metropolitan area, as defined in 
153.27  section 473.121, subdivision 2, at the city's public hearing.  
153.28  All provisions regarding the public hearings under subdivision 6 
153.29  are applicable to the joint public hearings under this 
153.30  subdivision. 
153.31     Upon the adoption of a resolution by the governing body of 
153.32  the city to hold a joint hearing, the city shall notify the 
153.33  county, the school district, and the metropolitan council if the 
153.34  city is in the metropolitan area, of the decision to hold a 
153.35  joint public hearing and request a board member from each of 
153.36  those taxing authorities, and the member or the designee of the 
154.1   metropolitan council if applicable, to be at the joint hearing.  
154.2   If the city is located in more than one county, the city may 
154.3   choose to request a county board member from each county or only 
154.4   from the county containing the majority of the city's market 
154.5   value.  If more than one school district is partially or totally 
154.6   located within the city, the city may choose to request a school 
154.7   district board member from each school district, or a board 
154.8   member only from the school district containing the majority of 
154.9   the city's market value.  If, as a result of requests under this 
154.10  subdivision, there are not sufficient board members in the 
154.11  county or the school district to attend the joint hearing, the 
154.12  county or school district may send a nonelected person working 
154.13  for its taxing authority to speak on the authority's behalf.  
154.14  The city may also invite each state senator and representative 
154.15  who represents the city, or a portion of the city, to come to 
154.16  the joint hearing. 
154.17     The primary purpose of the joint hearing is to discuss the 
154.18  city's budget and property tax levy.  However, the county and 
154.19  school district officials, and metropolitan council 
154.20  representative, if the city is in the metropolitan area, should 
154.21  be prepared to answer questions relevant to its budget and levy 
154.22  and the effect that its levy has on the property owners in the 
154.23  city. 
154.24     If a city conducts a hearing under this subdivision, this 
154.25  hearing is in lieu of the initial hearing required under 
154.26  subdivision 6.  However, the city is still required to adopt its 
154.27  proposed property tax levy at a subsequent hearing as provided 
154.28  under subdivision 6.  The hearings under this subdivision do not 
154.29  relieve a county, school district, or the metropolitan council 
154.30  of the requirement to hold its individual hearing under 
154.31  subdivision 6. 
154.32     Sec. 8.  Minnesota Statutes 1996, section 275.065, 
154.33  subdivision 8, is amended to read: 
154.34     Subd. 8.  [HEARING.] Notwithstanding any other provision of 
154.35  law, Ramsey county, the city of St. Paul, and independent school 
154.36  district No. 625 are authorized to and shall hold their initial 
155.1   public hearing jointly.  The hearing must be held on the second 
155.2   first Tuesday of December each year.  The advertisement required 
155.3   in subdivision 5a may be a joint advertisement.  The hearing is 
155.4   otherwise subject to the requirements of this section. 
155.5      Ramsey county is authorized to hold an additional initial 
155.6   hearing or hearings as provided under this section, provided 
155.7   that any additional hearings must not conflict with the initial 
155.8   or continuation hearing dates of the other taxing districts.  
155.9   However, if Ramsey county elects not to hold such 
155.10  additional initial hearing or hearings, the joint initial 
155.11  hearing required by this subdivision must be held in a St. Paul 
155.12  location convenient to residents of Ramsey county. 
155.13     Sec. 9.  Minnesota Statutes 1996, section 275.065, is 
155.14  amended by adding a subdivision to read: 
155.15     Subd. 9.  [REVERSE REFERENDUM.] The reverse referendum 
155.16  procedure in this subdivision applies only in the case of a 
155.17  county, or a city that has a population of more than 1,000, that 
155.18  has adopted a property tax levy increase over the levy amount 
155.19  certified under section 275.07, subdivision 1, for the previous 
155.20  year.  For purposes of taxes payable in 1998, a property tax 
155.21  levy increase under this subdivision is computed by deeming the 
155.22  net reduction in county and city homestead and agricultural 
155.23  credit aid under section 273.1398 for calendar year 1998 over 
155.24  calendar year 1997, as a levy made by the county or city in the 
155.25  previous year. 
155.26     If within 21 days after the public hearing and adoption of 
155.27  a levy under subdivision 6, a petition signed by voters equal in 
155.28  number to five percent of the votes cast in the county or city 
155.29  in the last general election requesting a referendum on the levy 
155.30  increase is filed with the county auditor, or the city clerk, 
155.31  the levy increase shall not be effective until it has been 
155.32  submitted to the voters at a special election to be held on the 
155.33  third Tuesday in January, and a majority of votes cast on the 
155.34  question of approving the levy increase are in the affirmative.  
155.35  The commissioner of revenue shall prepare the form of the 
155.36  question to be presented at the referendum, which shall 
156.1   reference only the amount of the property tax levy increase over 
156.2   the previous year. 
156.3      The county or city shall notify the county auditor of the 
156.4   results of the referendum.  If the majority of the votes cast on 
156.5   the question are in the affirmative, the levy adopted under 
156.6   subdivision 6 shall be certified to the county auditor under 
156.7   section 275.07, subdivision 1.  If the majority of the votes 
156.8   cast on the question are in the negative, an amount equal to the 
156.9   preceding year's levy shall be certified to the county auditor 
156.10  for purposes of section 275.07, subdivision 1. 
156.11     Sec. 10.  Minnesota Statutes 1996, section 275.07, 
156.12  subdivision 1, is amended to read: 
156.13     Subdivision 1.  Except as otherwise provided in this 
156.14  subdivision, the taxes voted by cities, counties, school 
156.15  districts, and special districts shall be certified by the 
156.16  proper authorities to the county auditor on or before five 
156.17  working days after December 20 in each year.  A county or city 
156.18  to which the reverse referendum provisions under section 
156.19  275.065, subdivision 9, apply shall certify the taxes to the 
156.20  county auditor by January 5, except that any county or city for 
156.21  which a petition has been filed under section 275.065, 
156.22  subdivision 9, must certify by the third Wednesday in January.  
156.23  A town must certify the levy adopted by the town board to the 
156.24  county auditor by September 15 each year.  If the town board 
156.25  modifies the levy at a special town meeting after September 15, 
156.26  the town board must recertify its levy to the county auditor on 
156.27  or before five working days after December 20.  The taxes 
156.28  certified shall not be reduced by the county auditor by the aid 
156.29  received under section 273.1398, subdivision 2, but shall be 
156.30  reduced by the county auditor by the aid received under section 
156.31  273.1398, subdivision 3.  If a city, town, county, school 
156.32  district, or special district fails to certify its levy by that 
156.33  date, its levy shall be the amount levied by it for the 
156.34  preceding year. 
156.35     Sec. 11.  Minnesota Statutes 1996, section 275.07, 
156.36  subdivision 4, is amended to read: 
157.1      Subd. 4.  [REPORT TO COMMISSIONER.] (a) On or before 
157.2   October 8 of each year, the county auditor shall report to the 
157.3   commissioner of revenue the proposed levy certified by local 
157.4   units of government under section 275.065, subdivision 1.  If 
157.5   any taxing authorities have notified the county auditor that 
157.6   they are in the process of negotiating an agreement for sharing, 
157.7   merging, or consolidating services but that when the proposed 
157.8   levy was certified under section 275.065, subdivision 1a, the 
157.9   agreement was not yet finalized, the county auditor shall supply 
157.10  that information to the commissioner when filing the report 
157.11  under this section and shall recertify the affected levies as 
157.12  soon as practical after October 10. 
157.13     (b) On or before January 15 of each year, the county 
157.14  auditor shall report to the commissioner of revenue the final 
157.15  levy certified by local units of government under subdivision 1. 
157.16     (c) The levies must be reported in the manner prescribed by 
157.17  the commissioner.  The reports must show a total levy and the 
157.18  amount of each special levy. 
157.19     Sec. 12.  Minnesota Statutes 1996, section 276.04, 
157.20  subdivision 2, is amended to read: 
157.21     Subd. 2.  [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 
157.22  shall provide for the printing of the tax statements.  The 
157.23  commissioner of revenue shall prescribe the form of the property 
157.24  tax statement and its contents.  The statement must contain a 
157.25  tabulated statement of the dollar amount due to each taxing 
157.26  authority and the amount of the state determined school tax from 
157.27  the parcel of real property for which a particular tax statement 
157.28  is prepared.  The dollar amounts due attributable to the county, 
157.29  the state determined school tax, the voter approved school tax, 
157.30  the other local school tax, the township or municipality, and 
157.31  the total of the metropolitan special taxing districts as 
157.32  defined in section 275.065, subdivision 3, paragraph (i), school 
157.33  district excess referenda levy, remaining school district levy, 
157.34  and the total of other voter approved referenda levies based on 
157.35  market value under section 275.61 must be separately stated.  
157.36  The amounts due all other special taxing districts, if any, may 
158.1   be aggregated.  For the purposes of this subdivision, "school 
158.2   district excess referenda levy" means school district taxes for 
158.3   operating purposes approved at referenda, including those taxes 
158.4   based on net tax capacity as well as those based on market 
158.5   value. "School district excess referenda levy" does not include 
158.6   school district taxes for capital expenditures approved at 
158.7   referendums or school district taxes to pay for the debt service 
158.8   on bonds approved at referenda.  The amount of the tax on 
158.9   contamination value imposed under sections 270.91 to 270.98, if 
158.10  any, must also be separately stated.  The dollar amounts, 
158.11  including the dollar amount of any special assessments, may be 
158.12  rounded to the nearest even whole dollar.  For purposes of this 
158.13  section whole odd-numbered dollars may be adjusted to the next 
158.14  higher even-numbered dollar.  The amount of market value 
158.15  excluded under section 273.11, subdivision 16, if any, must also 
158.16  be listed on the tax statement.  The statement shall include the 
158.17  following sentence sentences, printed in upper case letters in 
158.18  boldface print:  "EVEN THOUGH THE STATE OF MINNESOTA DOES NOT 
158.19  RECEIVE ANY PROPERTY TAX REVENUES, IT DETERMINES THE AMOUNT OF 
158.20  THE GENERAL EDUCATION TAX LEVY.  THE STATE OF MINNESOTA REDUCES 
158.21  YOUR PROPERTY TAX BY PAYING CREDITS AND REIMBURSEMENTS TO LOCAL 
158.22  UNITS OF GOVERNMENT."  
158.23     (b) The property tax statements for manufactured homes and 
158.24  sectional structures taxed as personal property shall contain 
158.25  the same information that is required on the tax statements for 
158.26  real property.  
158.27     (c) Real and personal property tax statements must contain 
158.28  the following information in the order given in this paragraph.  
158.29  The information must contain the current year tax information in 
158.30  the right column with the corresponding information for the 
158.31  previous year in a column on the left: 
158.32     (1) the property's estimated market value under section 
158.33  273.11, subdivision 1; 
158.34     (2) the property's taxable market value after reductions 
158.35  under section 273.11, subdivisions 1a and 16; 
158.36     (3) the property's gross tax, calculated by multiplying the 
159.1   property's gross tax capacity times the total local tax rate and 
159.2   adding the property's total property tax to the result the sum 
159.3   of the aids enumerated in clause (4); 
159.4      (4) a total of the following aids: 
159.5      (i) education aids payable under chapters 124 and 124A; and 
159.6      (ii) local government aids for cities, towns, and counties 
159.7   under chapter 477A; and 
159.8      (iii) disparity reduction aid under section 273.1398; 
159.9      (5) for homestead residential and agricultural properties, 
159.10  the homestead and agricultural credit aid apportioned to the 
159.11  property.  This amount is obtained by multiplying the total 
159.12  local tax rate by the difference between the property's gross 
159.13  and net tax capacities under section 273.13.  This amount must 
159.14  be separately stated and identified as "homestead and 
159.15  agricultural credit."  For purposes of comparison with the 
159.16  previous year's amount for the statement for taxes payable in 
159.17  1990, the statement must show the homestead credit for taxes 
159.18  payable in 1989 under section 273.13, and the agricultural 
159.19  credit under section 273.132 for taxes payable in 1989; 
159.20     (6) (5) any credits received under sections 273.119; 
159.21  273.123; 273.135; 273.1391; 273.1398, subdivision 4; 469.171; 
159.22  and 473H.10, except that the amount of credit received under 
159.23  section 273.135 must be separately stated and identified as 
159.24  "taconite tax relief"; and 
159.25     (7) (6) the net tax payable in the manner required in 
159.26  paragraph (a). 
159.27     (d) If the county uses envelopes for mailing property tax 
159.28  statements and if the county agrees, a taxing district may 
159.29  include a notice with the property tax statement notifying 
159.30  taxpayers when the taxing district will begin its budget 
159.31  deliberations for the current year, and encouraging taxpayers to 
159.32  attend the hearings.  If the county allows notices to be 
159.33  included in the envelope containing the property tax statement, 
159.34  and if more than one taxing district relative to a given 
159.35  property decides to include a notice with the tax statement, the 
159.36  county treasurer or auditor must coordinate the process and may 
160.1   combine the information on a single announcement.  
160.2      The commissioner of revenue shall certify to the county 
160.3   auditor the actual or estimated aids enumerated in clauses (3) 
160.4   and clause (4) that local governments will receive in the 
160.5   following year.  In the case of a county containing a city of 
160.6   the first class, for taxes levied in 1991, and for all counties 
160.7   for taxes levied in 1992 and thereafter, The commissioner must 
160.8   certify this amount by September 1 of each year.  
160.9      Sec. 13.  [EFFECTIVE DATE.] 
160.10     Sections 1 to 4 and 11 are effective for levies and notices 
160.11  for taxes payable in 1998, and thereafter. 
160.12     Section 5 is effective for newspaper advertisements 
160.13  prepared in 1997 for taxes payable in 1998, and thereafter. 
160.14     Sections 6 to 8 are effective for public hearings held in 
160.15  1997, and thereafter. 
160.16     Section 9 is effective for taxes levied in 1997, and 
160.17  thereafter, for taxes payable in 1998, and thereafter. 
160.18     Section 12 is effective for property tax statements 
160.19  prepared in 1998, and thereafter. 
160.20                             ARTICLE 6 
160.21                    PROPERTY TAX REFORM PAY 2000 
160.22     Section 1.  Minnesota Statutes 1996, section 273.124, 
160.23  subdivision 14, is amended to read: 
160.24     Subd. 14.  [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.] 
160.25  (a) Real estate of less than ten acres that is the homestead of 
160.26  its owner must be classified as class 2a qualifies for treatment 
160.27  as an agricultural homestead under section 273.13, subdivision 
160.28  23, paragraph (a), if:  
160.29     (1) the parcel on which the house is located is contiguous 
160.30  on at least two sides to (i) agricultural land, (ii) land owned 
160.31  or administered by the United States Fish and Wildlife Service, 
160.32  or (iii) land administered by the department of natural 
160.33  resources on which in lieu taxes are paid under sections 477A.11 
160.34  to 477A.14; 
160.35     (2) its owner also owns a noncontiguous parcel of 
160.36  agricultural land that is at least 20 acres; 
161.1      (3) the noncontiguous land is located not farther than two 
161.2   townships or cities, or a combination of townships or cities 
161.3   from the homestead; and 
161.4      (4) the agricultural use value of the noncontiguous land 
161.5   and farm buildings is equal to at least 50 percent of the market 
161.6   value of the house, garage, and one acre of land. 
161.7      Homesteads initially classified as class 2a qualifying 
161.8   under the provisions of this subdivision shall remain classified 
161.9   as class 2a qualified, irrespective of subsequent changes in the 
161.10  use of adjoining properties, as long as the homestead remains 
161.11  under the same ownership, the owner owns a noncontiguous parcel 
161.12  of agricultural land that is at least 20 acres, and the 
161.13  agricultural use value qualifies under clause (4). 
161.14     (b) Noncontiguous land shall be included as part of a an 
161.15  agricultural homestead under section 273.13, subdivision 23, 
161.16  paragraph (a), only if the homestead is classified as class 2a 
161.17  and the detached land is located in the same township or city, 
161.18  or not farther than two townships or cities or combination 
161.19  thereof from the remainder of the homestead.  
161.20     (c) Agricultural land used for purposes of a homestead and 
161.21  actively farmed by a person holding a vested remainder interest 
161.22  in it must be classified as a homestead under section 273.13, 
161.23  subdivision 23, paragraph (a).  If agricultural land is 
161.24  classified class 2a qualifies for homestead treatment, any other 
161.25  dwellings on the land used for purposes of a homestead as a 
161.26  residence by persons holding vested remainder interests who are 
161.27  actively engaged in farming the property, and up to one acre of 
161.28  the land surrounding each homestead dwelling and reasonably 
161.29  necessary for the use of the dwelling as a home, must also be 
161.30  assessed class 2a qualify for homestead treatment. 
161.31     Sec. 2.  Minnesota Statutes 1996, section 273.13, 
161.32  subdivision 1, is amended to read: 
161.33     Subdivision 1.  [HOW CLASSIFIED.] All real and personal 
161.34  property subject to a general property tax and not subject to 
161.35  any gross earnings or other lieu in-lieu tax is hereby 
161.36  classified for purposes of taxation as provided by this section. 
162.1   All of a property's taxable value must be assigned to the 
162.2   classes defined in this section provided, however, that the 
162.3   value may be split into more than one class. 
162.4      Sec. 3.  Minnesota Statutes 1996, section 273.13, is 
162.5   amended by adding a subdivision to read: 
162.6      Subd. 1a.  [CLASS RATES; LOCAL PROPERTY TAX CAPACITY.] The 
162.7   following class rates apply to each class of property described 
162.8   in this section in determining net tax capacity for levying 
162.9   local property taxes: 
162.10             Class                      Class rate
162.11       1 (residential)                  1.0 percent
162.12       2 (agricultural)                 0.5 percent
162.13       3 (commercial-industrial)        2.0 percent
162.14       4 (apartment)                    1.5 percent
162.15     Sec. 4.  Minnesota Statutes 1996, section 273.13, is 
162.16  amended by adding a subdivision to read: 
162.17     Subd. 1b.  [CLASS RATES; GENERAL EDUCATION TAX 
162.18  CAPACITY.] The following class rates apply to each class of 
162.19  property described in this section in determining tax capacity 
162.20  for levying the general education property tax: 
162.21             Class                      Education class rate
162.22       1 (residential)                  1.2 percent
162.23       2 (agricultural)                 1.2 percent
162.24       3 (commercial-industrial)        2.4 percent
162.25       4 (apartments)                   1.2 percent
162.26     All property classified as subclass 1a, 2a, 3a, or 4d is 
162.27  exempt from the general education property tax. 
162.28     Sec. 5.  Minnesota Statutes 1996, section 273.13, is 
162.29  amended by adding a subdivision to read: 
162.30     Subd. 1c.  [TRANSITION STATE TAX RATES.] (a) 
162.31  Notwithstanding subdivision 1b, the general education class rate 
162.32  applying to subclass 4a property is 0.8 percent for taxes 
162.33  payable in 2000 and one percent for taxes payable in 2001. 
162.34     (b) Notwithstanding subdivision 1b, the general education 
162.35  class rates for property qualifying under section 273.127 are as 
162.36  follows: 
163.1      (1) 0.6 percent for taxes payable in 2000; 
163.2      (2) 0.8 percent for taxes payable in 2001; and 
163.3      (3) one percent for taxes payable in 2002. 
163.4      Sec. 6.  Minnesota Statutes 1996, section 273.13, is 
163.5   amended by adding a subdivision to read: 
163.6      Subd. 34.  [EFFECT OF NEW PROPERTY TAX 
163.7   CLASSIFICATIONS.] For taxes levied in 1999, payable in 2000 and 
163.8   subsequent years, property shall be classified according to 
163.9   subdivisions 35 to 38, which shall supersede classification 
163.10  under subdivisions 22 to 31. 
163.11     Sec. 7.  Minnesota Statutes 1996, section 273.13, is 
163.12  amended by adding a subdivision to read: 
163.13     Subd. 35.  [CLASS 1.] (a) Class 1 property consists of real 
163.14  estate which is (1) used for residential purposes, including 
163.15  residential structures on agricultural property, or (2) devoted 
163.16  to temporary and seasonal residential occupancy for recreation 
163.17  purposes.  
163.18     (b) A residential property qualifies for class 1 only if it 
163.19  contains no more than three housing units. 
163.20     (c) Seasonal recreational residential property qualifies 
163.21  for class 1 only if it is not used for commercial purposes for 
163.22  more than 250 days in the year preceding the year of 
163.23  assessment.  For purposes of this paragraph, property is devoted 
163.24  to a commercial purpose on a specific day if any portion of the 
163.25  property is used for residential occupancy, and a fee is charged 
163.26  for residential occupancy.  
163.27     (d) Class 1 includes commercial use real property used 
163.28  exclusively for recreational purposes in conjunction with class 
163.29  1 property devoted to temporary and seasonal residential 
163.30  occupancy for recreational purposes, up to a total of two acres, 
163.31  provided the property is not devoted to commercial recreational 
163.32  use for more than 250 days in the year preceding the year of 
163.33  assessment and is located within two miles of the class 1 
163.34  property with which it is used.  Owners of real property devoted 
163.35  to temporary and seasonal residential occupancy for recreational 
163.36  purposes and all or a portion of which was devoted to commercial 
164.1   purposes for not more than 250 days in the year preceding the 
164.2   year of assessment desiring classification as class 1, must 
164.3   submit a declaration to the assessor designating the cabins or 
164.4   units occupied for 250 days or less in the year preceding the 
164.5   year of assessment by January 15 of the assessment year.  Those 
164.6   cabins or units and a proportionate share of the land on which 
164.7   they are located will be designated class 1 as otherwise 
164.8   provided.  The remainder of the cabins or units and a 
164.9   proportionate share of the land on which they are located will 
164.10  be designated as class 3.  The owner of property desiring 
164.11  designation as class 1 property must provide guest registers or 
164.12  other records demonstrating that the units for which class 1 
164.13  designation is sought were not occupied for more than 250 days 
164.14  in the year preceding the assessment if so requested.  The 
164.15  portion of a property operated as a (1) restaurant, (2) bar, (3) 
164.16  gift shop, and (4) other nonresidential facility operated on a 
164.17  commercial basis not directly related to temporary and seasonal 
164.18  residential occupancy for recreational purposes shall not 
164.19  qualify for class 1. 
164.20     (e) Class 1 includes commercial use real property that 
164.21  abuts a lakeshore line and is devoted to temporary and seasonal 
164.22  residential occupancy for recreational purposes, and that 
164.23  includes a portion used as a homestead by the owner, which 
164.24  includes a dwelling occupied as a homestead by a shareholder of 
164.25  a corporation that owns the resort or a partner in a partnership 
164.26  that owns the resort, even if the title to the homestead is held 
164.27  by the corporation or partnership.  
164.28     (f) Subclass 1a consists of the first tier of market value 
164.29  of each class 1 property that (1) is used for residential 
164.30  purposes and contains only one dwelling unit, or contains more 
164.31  than one dwelling unit but qualifies for homestead treatment 
164.32  under section 273.124, (2) is used for noncommercial seasonal 
164.33  recreational residential purposes, or (3) is used for homestead 
164.34  commercial seasonal recreational residential purposes as defined 
164.35  in paragraph (e).  
164.36     (g) The valuation limit for the first tier in paragraph 
165.1   (f), clause (1), is $115,000, adjusted for inflation under 
165.2   subdivision 39.  The valuation limit for the first tier in 
165.3   paragraph (f), clause (2), is $40,000, adjusted for inflation 
165.4   under subdivision 39.  The valuation limit for the first tier in 
165.5   paragraph (f), clause (3), is $230,000, adjusted for inflation 
165.6   under subdivision 39.  
165.7      Sec. 8.  Minnesota Statutes 1996, section 273.13, is 
165.8   amended by adding a subdivision to read: 
165.9      Subd. 36.  [CLASS 2.] (a) Class 2 property consists of 
165.10  agricultural land and structures used for agricultural purposes. 
165.11  In the case of a property qualifying as an agricultural 
165.12  homestead under section 273.124, the house and garage and 
165.13  immediately surrounding one acre of land is class 1 property and 
165.14  the remainder of the homestead is class 2.  
165.15     (b) Class 2 includes property that is (1) real estate, 
165.16  rural in character and used exclusively for growing trees for 
165.17  timber, lumber, and wood and wood products; (2) real estate that 
165.18  is not improved with a structure and is used exclusively for 
165.19  growing trees for timber, lumber, and wood and wood products, if 
165.20  the owner has participated or is participating in a cost-sharing 
165.21  program for afforestation, reforestation, or timber stand 
165.22  improvement on that particular property, administered or 
165.23  coordinated by the commissioner of natural resources; or (3) a 
165.24  landing area or public access area of a privately owned public 
165.25  use airport.  
165.26     (c) Agricultural land as used in this section means 
165.27  contiguous acreage of ten acres or more, primarily used during 
165.28  the preceding year for agricultural purposes.  Agricultural use 
165.29  may include pasture, timber, waste, unusable wild land, and land 
165.30  included in state or federal farm or conservation programs.  
165.31  "Agricultural purposes" as used in this section means the 
165.32  raising or cultivation of agricultural products.  Land enrolled 
165.33  in the Reinvest in Minnesota program under sections 103F.505 to 
165.34  103F.531 or the federal Conservation Reserve Program as 
165.35  contained in Public Law Number 99-198, and consisting of a 
165.36  minimum of ten contiguous acres, shall be classified as 
166.1   agricultural.  Agricultural classification for property shall be 
166.2   determined with respect to the use of the whole parcel, and not 
166.3   based upon the market value of any residential structures on the 
166.4   parcel or contiguous parcels under the same ownership. 
166.5      (d) Real estate of less than ten acres used principally for 
166.6   raising or cultivating agricultural products, shall be 
166.7   considered as agricultural land, if it is not used primarily for 
166.8   residential purposes.  
166.9      (e) The term "agricultural products" as used in this 
166.10  subdivision includes:  
166.11     (1) livestock, dairy animals, dairy products, poultry and 
166.12  poultry products, fur-bearing animals, horticultural and nursery 
166.13  stock described in sections 18.44 to 18.61, fruit of all kinds, 
166.14  vegetables, forage, grains, bees, and apiary products by the 
166.15  owner; 
166.16     (2) fish bred for sale and consumption if the fish breeding 
166.17  occurs on land zoned for agricultural use; 
166.18     (3) the commercial boarding of horses if the boarding is 
166.19  done in conjunction with raising or cultivating agricultural 
166.20  products as defined in clause (1); 
166.21     (4) property which is owned and operated by nonprofit 
166.22  organizations used for equestrian activities, excluding racing; 
166.23  and 
166.24     (5) game birds and waterfowl bred and raised for use on a 
166.25  shooting preserve licensed under section 97A.115.  
166.26     (f) If a parcel used for agricultural purposes is also used 
166.27  for commercial or industrial purposes, including but not limited 
166.28  to:  
166.29     (1) wholesale and retail sales; 
166.30     (2) processing of raw agricultural products or other goods; 
166.31     (3) warehousing or storage of processed goods; and 
166.32     (4) office facilities for the support of the activities 
166.33  enumerated in clauses (1), (2), and (3), 
166.34  the assessor shall classify the part of the parcel used for 
166.35  agricultural purposes as class 2 and the remainder in the class 
166.36  appropriate to its use.  The grading, sorting, and packaging of 
167.1   raw agricultural products for first sale is considered an 
167.2   agricultural purpose.  A greenhouse or other building where 
167.3   horticultural or nursery products are grown that is also used 
167.4   for the conduct of retail sales must be classified as 
167.5   agricultural if it is primarily used for the growing of 
167.6   horticultural or nursery products from seed, cuttings, or roots 
167.7   and occasionally as a showroom for the retail sale of those 
167.8   products.  Use of a greenhouse or building only for the display 
167.9   of already grown horticultural or nursery products does not 
167.10  qualify as an agricultural purpose.  
167.11     (g) To qualify for classification under paragraph (b), 
167.12  clause (3), a privately owned public use airport must be 
167.13  licensed as a public airport under section 360.018.  For 
167.14  purposes of paragraph (b), clause (3), "landing area" means that 
167.15  part of a privately owned public use airport properly cleared, 
167.16  regularly maintained, and made available to the public for use 
167.17  by aircraft and includes runways, taxiways, aprons, and sites 
167.18  upon which are situated landing or navigational aids.  A landing 
167.19  area also includes land underlying both the primary surface and 
167.20  the approach surfaces that comply with all of the following:  
167.21     (i) the land is properly cleared and regularly maintained 
167.22  for the primary purposes of the landing, taking off, and taxiing 
167.23  of aircraft; but that portion of the land that contains 
167.24  facilities for servicing, repair, or maintenance of aircraft is 
167.25  not included as a landing area; 
167.26     (ii) the land is part of the airport property; and 
167.27     (iii) the land is not used for commercial or residential 
167.28  purposes. 
167.29     The land contained in a landing area under paragraph (b), 
167.30  clause (3), must be described and certified by the commissioner 
167.31  of transportation.  The certification is effective until it is 
167.32  modified, or until the airport or landing area no longer meets 
167.33  the requirements of paragraph (b), clause (3).  For purposes of 
167.34  paragraph (b), clause (3), "public access area" means property 
167.35  used as an aircraft parking ramp, apron, or storage hangar, or 
167.36  an arrival and departure building in connection with the airport.
168.1      (h) Subclass 2a consists of the first tier of class 2 
168.2   market value of each homestead agricultural property.  The 
168.3   valuation limit for the first tier is $200,000, adjusted for 
168.4   inflation under subdivision 39. 
168.5      Sec. 9.  Minnesota Statutes 1996, section 273.13, is 
168.6   amended by adding a subdivision to read: 
168.7      Subd. 37.  [CLASS 3.] (a) Class 3 consists of commercial 
168.8   and industrial property and utility real and personal property, 
168.9   including: 
168.10     (1) tools, implements, and machinery of an electric 
168.11  generating, transmission, or distribution system or a pipeline 
168.12  system transporting or distributing water, gas, crude oil, or 
168.13  petroleum products or mains and pipes used in the distribution 
168.14  of steam or hot or chilled water for heating or cooling 
168.15  buildings, which are fixtures; 
168.16     (2) unmined iron ore and low-grade iron-bearing formations 
168.17  as defined in section 273.14; and 
168.18     (3) all other property not otherwise classified. 
168.19     (b) Subclass 3a consists of the first $70,000 of each 
168.20  parcel of class 3 property's market value, provided that in the 
168.21  case of contiguous parcels of commercial and industrial property 
168.22  owned by the same person or entity, only the first $70,000 of 
168.23  market value of the contiguous parcels is eligible for inclusion 
168.24  in subclass 3a, and provided that in the case of utility 
168.25  property owned by one person or entity, only one parcel in each 
168.26  county is eligible for inclusion in subclass 3a. 
168.27     For purposes of this paragraph, parcels are considered to 
168.28  be contiguous even if they are separated from each other by a 
168.29  road, street, vacant lot, waterway, or other similar intervening 
168.30  type of property. 
168.31     Sec. 10.  Minnesota Statutes 1996, section 273.13, is 
168.32  amended by adding a subdivision to read: 
168.33     Subd. 38.  [CLASS 4.] (a) Class 4 consists of residential 
168.34  real estate containing four or more units and used or held for 
168.35  use by the owner or by the tenants or lessees of the owner as a 
168.36  residence for rental periods of 30 days or more.  Class 4 also 
169.1   includes all property described in paragraph (c), and hospitals 
169.2   licensed under sections 144.50 to 144.56, other than hospitals 
169.3   exempt under section 272.02, and contiguous property used for 
169.4   hospital purposes, without regard to whether the property has 
169.5   been platted or subdivided.  
169.6      (b) Subclass 4a consists of property in a city with a 
169.7   population of 5,000 or less, that is (1) located outside of the 
169.8   metropolitan area, as defined in section 473.121, subdivision 2, 
169.9   or outside any county contiguous to the metropolitan area, and 
169.10  (2) whose city boundary is at least 15 miles from the boundary 
169.11  of any city with a population greater than 5,000.  For the 
169.12  purposes of this paragraph, "population" has the meaning given 
169.13  in section 477A.011, subdivision 3. 
169.14     (c) Subclass 4d property includes: 
169.15     (1) qualifying low-income rental housing certified to the 
169.16  assessor by the housing finance agency under sections 273.126 
169.17  and 462A.071.  Subclass 4d includes land in proportion to the 
169.18  total market value of the building that is qualifying low-income 
169.19  rental housing.  For all properties qualifying as subclass 4d, 
169.20  the market value determined by the assessor must be based in the 
169.21  normal approach to value using normal unrestricted rents; 
169.22     (2) real property up to a maximum of one acre of land owned 
169.23  by a nonprofit community service oriented organization; provided 
169.24  that the property is not used for a revenue-producing activity 
169.25  for more than six days in the calendar year preceding the year 
169.26  of assessment and the property is not used for residential 
169.27  purposes on either a temporary or permanent basis.  For purposes 
169.28  of this clause, a "nonprofit community service oriented 
169.29  organization" means any corporation, society, association, 
169.30  foundation, or institution organized and operated exclusively 
169.31  for charitable, religious, fraternal, civic, or educational 
169.32  purposes, and which is exempt from federal income taxation 
169.33  pursuant to section 501(c)(3), (10), or (19) of the Internal 
169.34  Revenue Code of 1986, as amended through December 31, 1990.  For 
169.35  purposes of this clause, "revenue-producing activities" shall 
169.36  include but not be limited to property or that portion of the 
170.1   property that is used as an on-sale intoxicating liquor or 3.2 
170.2   percent malt liquor establishment licensed under chapter 340A, a 
170.3   restaurant open to the public, bowling alley, a retail store, 
170.4   gambling conducted by organizations licensed under chapter 349, 
170.5   an insurance business, or office or other space leased or rented 
170.6   to a lessee who conducts a for-profit enterprise on the 
170.7   premises.  Any portion of the property which is used for 
170.8   revenue-producing activities for more than six days in the 
170.9   calendar year preceding the year of assessment shall be assessed 
170.10  as class 3.  The use of the property for social events open 
170.11  exclusively to members and their guests for periods of less than 
170.12  24 hours, when an admission is not charged nor any revenues are 
170.13  received by the organization shall not be considered a 
170.14  revenue-producing activity; 
170.15     (3) post-secondary student housing of not more than one 
170.16  acre of land that is owned by a nonprofit corporation organized 
170.17  under chapter 317A and is used exclusively by a student 
170.18  cooperative, sorority, or fraternity for on-campus housing or 
170.19  housing located within two miles of the border of a college 
170.20  campus; and 
170.21     (4) manufactured home parks as defined in section 327.14, 
170.22  subdivision 3. 
170.23     Sec. 11.  Minnesota Statutes 1996, section 273.13, is 
170.24  amended by adding a subdivision to read: 
170.25     Subd. 39.  [INFLATION ADJUSTMENT.] Beginning for property 
170.26  assessed in 2000, payable in 2001, the commissioner shall 
170.27  annually adjust the valuation limits specified in subdivisions 
170.28  35 and 36 for inflation.  The commissioner shall make the 
170.29  inflation adjustments in accordance with section 290.06, 
170.30  subdivision 2d, except that for purposes of this subdivision the 
170.31  percentage increase shall be determined from the year ending on 
170.32  August 31, 1998, to the year ending on August 31 of the year 
170.33  preceding the assessment year.  The commissioner shall round the 
170.34  valuation limits to the nearest $1,000 value.  The commissioner 
170.35  shall annually announce the adjusted valuation limits at the 
170.36  same time provided under section 290.06.  The determination of 
171.1   the commissioner under this subdivision is not a rule under the 
171.2   Administrative Procedure Act. 
171.3      Sec. 12.  Minnesota Statutes 1996, section 273.135, 
171.4   subdivision 2, is amended to read: 
171.5      Subd. 2.  The amount of the reduction authorized by 
171.6   subdivision 1 shall be: 
171.7      (a) In the case of property located within the boundaries 
171.8   of a municipality which meets the qualifications prescribed in 
171.9   section 273.134, 66 percent of the tax, provided that the 
171.10  reduction shall not exceed the maximum amounts specified in 
171.11  clause (c), and shall not exceed an amount sufficient to reduce 
171.12  the effective tax rate on each parcel of property to 95 percent 
171.13  of the base year effective tax rate.  In no case will the 
171.14  reduction for each homestead resulting from this credit be less 
171.15  than $10.  
171.16     (b) In the case of property located within the boundaries 
171.17  of a school district which qualifies as a tax relief area but 
171.18  which is outside the boundaries of a municipality which meets 
171.19  the qualifications prescribed in section 273.134, 57 percent of 
171.20  the tax, provided that the reduction shall not exceed the 
171.21  maximum amounts specified in clause (c), and shall not exceed an 
171.22  amount sufficient to reduce the effective tax rate on each 
171.23  parcel of property to 95 percent of the base year effective tax 
171.24  rate.  In no case will the reduction for each homestead 
171.25  resulting from this credit be less than $10.  
171.26     (c) The maximum reduction of the tax is $225.40 on property 
171.27  described in clause (a) and $200.10 on property described in 
171.28  clause (b), for taxes payable in 1985.  These maximum amounts 
171.29  shall increase by $15 times the quantity one minus the homestead 
171.30  credit equivalency percentage per year for taxes payable in 1986 
171.31  and subsequent years through taxes payable in 1999.  Beginning 
171.32  with taxes payable in 2000 and thereafter, the maximum reduction 
171.33  of the tax under this subdivision will be $315.10. 
171.34     For the purposes of this subdivision, "homestead credit 
171.35  equivalency percentage" means one minus the ratio of the net 
171.36  class rate to the gross class rate applicable to the first 
172.1   $72,000 of the market value of residential homesteads, 
172.2   "effective tax rate" means tax divided by the market value of a 
172.3   property, and the "base year effective tax rate" means the 
172.4   payable 1988 tax on a property with an identical market value to 
172.5   that of the property receiving the credit in the current year 
172.6   after the application of the credits payable under Minnesota 
172.7   Statutes 1988, section 273.13, subdivisions 22 and 23, and this 
172.8   section, divided by the market value of the property.  
172.9      Sec. 13.  Minnesota Statutes 1996, section 273.1391, 
172.10  subdivision 2, is amended to read: 
172.11     Subd. 2.  The amount of the reduction authorized by 
172.12  subdivision 1 shall be: 
172.13     (a) In the case of property located within a school 
172.14  district which does not meet the qualifications of section 
172.15  273.134 as a tax relief area, but which is located in a county 
172.16  with a population of less than 100,000 in which taconite is 
172.17  mined or quarried and wherein a school district is located which 
172.18  does meet the qualifications of a tax relief area, and provided 
172.19  that at least 90 percent of the area of the school district 
172.20  which does not meet the qualifications of section 273.134 lies 
172.21  within such county, 57 percent of the tax on qualified property 
172.22  located in the school district that does not meet the 
172.23  qualifications of section 273.134, provided that the amount of 
172.24  said reduction shall not exceed the maximum amounts specified in 
172.25  clause (c), and shall not exceed an amount sufficient to reduce 
172.26  the effective tax rate on each parcel of property to the product 
172.27  of 95 percent of the base year effective tax rate multiplied by 
172.28  the ratio of the current year's tax rate to the payable 1989 tax 
172.29  rate.  In no case will the reduction for each homestead 
172.30  resulting from this credit be less than $10.  The reduction 
172.31  provided by this clause shall only be applicable to property 
172.32  located within the boundaries of the county described therein.  
172.33     (b) In the case of property located within a school 
172.34  district which does not meet the qualifications of section 
172.35  273.134 as a tax relief area, but which is located in a school 
172.36  district in a county containing a city of the first class and a 
173.1   qualifying municipality, but not in a school district containing 
173.2   a city of the first class or adjacent to a school district 
173.3   containing a city of the first class unless the school district 
173.4   so adjacent contains a qualifying municipality, 57 percent of 
173.5   the tax, but not to exceed the maximums specified in clause (c), 
173.6   and shall not exceed an amount sufficient to reduce the 
173.7   effective tax rate on each parcel of property to the product of 
173.8   95 percent of the base year effective tax rate multiplied by the 
173.9   ratio of the current year's tax rate to the payable 1989 tax 
173.10  rate.  In no case will the reduction for each homestead 
173.11  resulting from this credit be less than $10. 
173.12     (c) The maximum reduction of the tax is $200.10 for taxes 
173.13  payable in 1985.  This maximum amount shall increase by $15 
173.14  multiplied by the quantity one minus the homestead credit 
173.15  equivalency percentage per year for taxes payable in 1986 and 
173.16  subsequent years through taxes payable in 1999.  Beginning with 
173.17  taxes payable in 2000 and thereafter, the maximum reduction of 
173.18  the tax under this subdivision will be $289.80.  
173.19     For the purposes of this subdivision, "homestead credit 
173.20  equivalency percentage" means one minus the ratio of the net 
173.21  class rate to the gross class rate applicable to the first 
173.22  $72,000 of the market value of residential homesteads, and 
173.23  "effective tax rate" means tax divided by the market value of a 
173.24  property, and the "base year effective tax rate" means the 
173.25  payable 1988 tax on a property with an identical market value to 
173.26  that of the property receiving the credit in the current year 
173.27  after application of the credits payable under Minnesota 
173.28  Statutes 1988, section 273.13, subdivisions 22 and 23, and this 
173.29  section, divided by the market value of the property. 
173.30     Sec. 14.  Minnesota Statutes 1996, section 275.08, 
173.31  subdivision 1b, is amended to read: 
173.32     Subd. 1b.  [COMPUTATION OF TAX RATES.] The amounts 
173.33  certified to be levied against net tax capacity under section 
173.34  275.07 by an individual local government unit shall be divided 
173.35  by the total net tax capacity of all taxable properties within 
173.36  the local government unit's taxing jurisdiction.  The resulting 
174.1   ratio, the local government's local tax rate, multiplied by each 
174.2   property's net tax capacity shall be each property's net tax 
174.3   capacity tax for that local government unit before reduction by 
174.4   any credits.  The sum of the general education tax, if any, plus 
174.5   each local government's tax is the property's total property 
174.6   tax, before reduction by any credits. 
174.7      Any amount certified to the county auditor to be levied 
174.8   against market value shall be divided by the total referendum 
174.9   market value of all taxable properties within the taxing 
174.10  district.  The resulting ratio, the taxing district's new 
174.11  referendum tax rate, multiplied by each property's referendum 
174.12  market value shall be each property's new referendum tax before 
174.13  reduction by any credits.  For the purposes of this subdivision, 
174.14  "referendum market value" means the market value as defined in 
174.15  section 124A.02, subdivision 3b. 
174.16     Sec. 15.  Minnesota Statutes 1996, section 290.06, is 
174.17  amended by adding a subdivision to read: 
174.18     Subd. 25.  [PROPERTY TAX CREDIT FOR DISABLED.] (a) A 
174.19  disabled individual may claim a credit against the tax imposed 
174.20  by this chapter equal to 50 percent of the ad valorem homestead 
174.21  property tax paid during the taxable year.  The maximum credit 
174.22  allowed to an individual or a married couple for the year is 
174.23  $300.  Homestead tax means the tax paid on the individual's or 
174.24  married couple's principal residence, classified as class 1 
174.25  under section 273.13, subdivision 22. 
174.26     (b) If the amount of the credit under this subdivision 
174.27  exceeds the claimant's liability for tax, the commissioner shall 
174.28  refund the excess to the individual.  An amount sufficient to 
174.29  pay the refunds is appropriated to the commissioner from the 
174.30  general fund. 
174.31     (c) For purposes of this subdivision, a disabled person 
174.32  means: 
174.33     (1) a blind person; 
174.34     (2) a person who: 
174.35     (i) served in the active military or naval service of the 
174.36  United States; 
175.1      (ii) is entitled to compensation under the laws and 
175.2   regulations of the United States for permanent and total 
175.3   service-connected disability due to the loss, or loss of use, by 
175.4   reason of amputation, ankylosis, progressive muscular 
175.5   dystrophies, or paralysis of both lower extremities, such as to 
175.6   preclude motion without the aid of braces, crutches, canes, or a 
175.7   wheelchair; and 
175.8      (iii) has acquired a special housing unit with special 
175.9   fixtures or movable facilities made necessary by the nature of 
175.10  the veteran's disability; 
175.11     (3) the surviving spouse of a deceased individual who 
175.12  qualified under clause (2), for as long as the surviving spouse 
175.13  uses the special housing unit as the spouse's principal 
175.14  residence; 
175.15     (4) any person who: 
175.16     (i) is permanently and totally disabled; and 
175.17     (ii) receives 90 percent or more of the person's total 
175.18  income from one or more of the following: 
175.19     (A) aid from any state as a result of that disability; 
175.20     (B) supplemental security income for the disabled; 
175.21     (C) workers' compensation based on a finding of total and 
175.22  permanent disability; 
175.23     (D) social security disability, including the amount of a 
175.24  disability insurance benefit which is converted to an old-age 
175.25  insurance benefit and any subsequent cost-of-living increases; 
175.26     (E) aid under the federal Railroad Retirement Act of 1937, 
175.27  United States Code Annotated, title 45, section 228b(a)5; 
175.28     (F) a pension from any local government retirement fund 
175.29  located in the state of Minnesota as a result of that 
175.30  disability; 
175.31     (G) pension, annuity, or other income paid as a result of 
175.32  that disability from a private pension or disability plan, 
175.33  including employer, employee, union, and insurance plans; and 
175.34     (iii) has household income as defined in section 290A.03, 
175.35  subdivision 5, of $50,000 or less; or 
175.36     (5) any person who is permanently and totally disabled and 
176.1   whose household income as defined in section 290A.03, 
176.2   subdivision 5, is 150 percent or less of the federal poverty 
176.3   level. 
176.4      Permanently and totally disabled for purposes of this 
176.5   subdivision means a condition that is permanent and totally 
176.6   incapacitates the person from working at an occupation which 
176.7   brings the person an income. 
176.8      Sec. 16.  Minnesota Statutes 1996, section 290A.03, 
176.9   subdivision 6, is amended to read: 
176.10     Subd. 6.  [HOMESTEAD.] "Homestead" means the dwelling 
176.11  occupied as the claimant's principal residence and so much of 
176.12  the land surrounding it, not exceeding ten acres, as is 
176.13  reasonably necessary for use of the dwelling as a home and any 
176.14  other property used for purposes of a homestead as defined in 
176.15  section 273.13, subdivision 22, except for agricultural land 
176.16  assessed as part of a homestead pursuant to section 273.13, 
176.17  subdivision 23, "homestead" is limited to 320 acres or, where 
176.18  the farm homestead is rented, one acre 273.124.  The homestead 
176.19  may be owned or rented and may be a part of a multidwelling or 
176.20  multipurpose building and the land on which it is built.  A 
176.21  manufactured home, as defined in section 273.125, subdivision 8, 
176.22  or a park trailer taxed as a manufactured home under section 
176.23  168.012, subdivision 9, assessed as personal property may be a 
176.24  dwelling for purposes of this subdivision. 
176.25     Sec. 17.  Minnesota Statutes 1996, section 290A.04, 
176.26  subdivision 1, is amended to read: 
176.27     Subdivision 1.  A refund shall be is allowed each claimant 
176.28  in the amount that property taxes payable or rent constituting 
176.29  property taxes exceed the percentage of the household income of 
176.30  the claimant specified in subdivision 2 or 2a in the year for 
176.31  which the taxes were levied or in the year in which the rent was 
176.32  paid as specified in under subdivision 2 or 2a.  If the amount 
176.33  of property taxes payable or rent constituting property taxes is 
176.34  equal to or less than the percentage of the claimant's household 
176.35  income of the claimant is greater than the maximum amount 
176.36  specified in subdivision 2 or 2a in the year for which the taxes 
177.1   were levied or in the year in which the rent was paid, the 
177.2   claimant shall is not be eligible for a state refund pursuant to 
177.3   this section. 
177.4      Sec. 18.  Minnesota Statutes 1996, section 290A.04, 
177.5   subdivision 2, is amended to read: 
177.6      Subd. 2.  [HOMEOWNERS.] Each homeowner is allowed a 
177.7   standard refund equal to the lesser of: 
177.8      (1) 0.25 percent of the taxable market value of the 
177.9   homestead; or 
177.10     (2) $180. 
177.11     In addition to the standard refund, a claimant whose 
177.12  property taxes payable after subtraction of (1) the standard 
177.13  refund, and (2) the state education tax are in excess of the 
177.14  percentage 2.5 percent of the household income stated below 
177.15  shall pay an amount equal to the percent of income shown for the 
177.16  appropriate 2.5 percent of household income level along 
177.17  with plus the percent to be paid by the claimant of the 
177.18  remaining amount of property taxes payable as stated below.  The 
177.19  total state refund equals the amount of property taxes payable 
177.20  that remain plus the standard refund amount, up to the maximum 
177.21  state refund amount shown below.  
177.22                        Percent           Percent    Maximum
177.23  Household Income     of Income          Paid by     State
177.24                                          Claimant    Refund
177.25      $0 to 1,029     1.2 percent        18 percent   $440
177.26   1,030 to 2,059     1.3 percent        18 percent   $440
177.27   2,060 to 3,099     1.4 percent        20 percent   $440
177.28   3,100 to 4,129     1.6 percent        20 percent   $440
177.29   4,130 to 5,159     1.7 percent        20 percent   $440
177.30   5,160 to 7,229     1.9 percent        25 percent   $440
177.31   7,230 to 8,259     2.1 percent        25 percent   $440
177.32   8,260 to 9,289     2.2 percent        25 percent   $440
177.33   9,290 to 10,319    2.3 percent        30 percent   $440
177.34  10,320 to 11,349    2.4 percent        30 percent   $440
177.35  11,350 to 12,389    2.5 percent        30 percent   $440
177.36  12,390 to 14,449    2.6 percent        30 percent   $440
177.37  14,450 to 15,479    2.8 percent        35 percent   $440
177.38  15,480 to 16,509    3.0 percent        35 percent   $440
177.39  16,510 to 17,549    3.2 percent        40 percent   $440
177.40  17,550 to 21,669    3.3 percent        40 percent   $440
177.41  21,670 to 24,769    3.4 percent        45 percent   $440
177.42  24,770 to 30,959    3.5 percent        45 percent   $440
177.43  30,960 to 36,119    3.5 percent        45 percent   $440
177.44  36,120 to 41,279    3.7 percent        50 percent   $440
177.45  41,280 to 58,829    4.0 percent        50 percent   $440
177.46  58,830 to 59,859    4.0 percent        50 percent   $310
177.47  59,860 to 60,889    4.0 percent        50 percent   $210
177.48  60,890 to 61,929    4.0 percent        50 percent   $100 
177.49     
178.1                                Percent Paid      Maximum State
178.2        Household Income        by Claimant       Refund
178.4            $0 to  4,999        20 percent        $750
178.5         5,000 to  9,999        20 percent        $750
178.6        10,000 to 14,999        30 percent        $750
178.7        15,000 to 19,999        35 percent        $750
178.8        20,000 to 24,999        40 percent        $750
178.9        25,000 to 29,999        45 percent        $750
178.10       30,000 to 34,999        50 percent        $750
178.11       35,000 to 39,999        55 percent        $750
178.12       40,000 to 44,999        60 percent        $700
178.13       45,000 to 49,999        60 percent        $650
178.14       50,000 to 54,999        60 percent        $600
178.15       55,000 to 59,999        60 percent        $550
178.16       60,000 to 64,999        60 percent        $500
178.17       65,000 to 69,499        60 percent        $450
178.18       69,500 to 73,999        60 percent        $400
178.19       74,000 to 77,499        60 percent        $350
178.20       77,500 to 81,999        60 percent        $300
178.21       82,000 to 85,499        60 percent        $250
178.22       85,500 to 89,999        60 percent        $200
178.23       90,000 to 94,499        60 percent        $150
178.24       94,500 to 97,499        60 percent        $100
178.25       97,500 to 99,999        60 percent        $ 50
178.26     The payment made to a claimant shall be the amount of the 
178.27  state refund calculated under this subdivision.  No payment is 
178.28  allowed if the claimant's household income is $61,930 $100,000 
178.29  or more. 
178.30     Sec. 19.  Minnesota Statutes 1996, section 290A.04, 
178.31  subdivision 6, is amended to read: 
178.32     Subd. 6.  [INFLATION ADJUSTMENT.] Beginning for property 
178.33  tax refunds payable in calendar year 1996, the commissioner 
178.34  shall annually adjust the dollar amounts of the income 
178.35  thresholds and the maximum refunds under subdivisions 2 and 2a 
178.36  for inflation.  The commissioner shall make the inflation 
178.37  adjustments in accordance with section 290.06, subdivision 2d, 
178.38  except that for purposes of this subdivision the percentage 
178.39  increase shall be determined from the year ending on August 31, 
178.40  1994, to the year ending on August 31 of the year preceding that 
178.41  in which the refund is payable.  The commissioner shall not 
178.42  adjust the dollar amounts under subdivision 2 for refunds that 
178.43  are payable in calendar year 2001.  Beginning for refunds 
178.44  payable in 2002, the base year for adjustment of the dollar 
178.45  amounts in subdivision 2 is the year ending June 30, 2000.  The 
178.46  commissioner shall use the appropriate percentage increase to 
178.47  annually adjust the income thresholds and maximum refunds under 
178.48  subdivisions 2 and 2a for inflation without regard to whether or 
179.1   not the income tax brackets are adjusted for inflation in that 
179.2   year.  The commissioner shall round the thresholds and the 
179.3   maximum amounts, as adjusted to the nearest $10 amount.  If the 
179.4   amount ends in $5, the commissioner shall round it up to the 
179.5   next $10 amount.  
179.6      The commissioner shall annually announce the adjusted 
179.7   refund schedule at the same time provided under section 290.06.  
179.8   The determination of the commissioner under this subdivision is 
179.9   not a rule under the administrative procedure act. 
179.10     Sec. 20.  Minnesota Statutes 1996, section 298.24, 
179.11  subdivision 1, is amended to read: 
179.12     Subdivision 1.  (a) For concentrate produced in 1992, 1993, 
179.13  1994, and 1995 there is imposed upon taconite and iron 
179.14  sulphides, and upon the mining and quarrying thereof, and upon 
179.15  the production of iron ore concentrate therefrom, and upon the 
179.16  concentrate so produced, a tax of $2.054 per gross ton of 
179.17  merchantable iron ore concentrate produced therefrom.  
179.18     (b) For concentrates produced in 1996 and subsequent years 
179.19  1997, 1998, and 1999, the tax rate shall be equal to the 
179.20  preceding year's tax rate plus an amount equal to the preceding 
179.21  year's tax rate multiplied by the percentage increase in the 
179.22  implicit price deflator from the fourth quarter of the second 
179.23  preceding year to the fourth quarter of the preceding year, 
179.24  provided that, for concentrates produced in 1996 only, the 
179.25  increase in the rate of tax imposed under this section over the 
179.26  rate imposed for the previous year may not exceed four cents per 
179.27  ton.  "Implicit price deflator" for the gross national product 
179.28  means the implicit price deflator prepared by the bureau of 
179.29  economic analysis of the United States Department of 
179.30  Commerce.  For concentrates produced in 2000 and subsequent 
179.31  years, the tax rate shall be equal to the tax rate determined 
179.32  under this subdivision for 1999. 
179.33     (c) The tax shall be imposed on the average of the 
179.34  production for the current year and the previous two years.  The 
179.35  rate of the tax imposed will be the current year's tax rate.  
179.36  This clause shall not apply in the case of the closing of a 
180.1   taconite facility if the property taxes on the facility would be 
180.2   higher if this clause and section 298.25 were not applicable.  
180.3      (d) If the tax or any part of the tax imposed by this 
180.4   subdivision is held to be unconstitutional, a tax of $2.054 per 
180.5   gross ton of merchantable iron ore concentrate produced shall be 
180.6   imposed.  
180.7      (e) Consistent with the intent of this subdivision to 
180.8   impose a tax based upon the weight of merchantable iron ore 
180.9   concentrate, the commissioner of revenue may indirectly 
180.10  determine the weight of merchantable iron ore concentrate 
180.11  included in fluxed pellets by subtracting the weight of the 
180.12  limestone, dolomite, or olivine derivatives or other basic flux 
180.13  additives included in the pellets from the weight of the 
180.14  pellets.  For purposes of this paragraph, "fluxed pellets" are 
180.15  pellets produced in a process in which limestone, dolomite, 
180.16  olivine, or other basic flux additives are combined with 
180.17  merchantable iron ore concentrate.  No subtraction from the 
180.18  weight of the pellets shall be allowed for binders, mineral and 
180.19  chemical additives other than basic flux additives, or moisture. 
180.20     (f)(1) Notwithstanding any other provision of this 
180.21  subdivision, for the first five years of a plant's production of 
180.22  direct reduced ore, the rate of the tax on direct reduced ore is 
180.23  determined under this paragraph.  As used in this paragraph, 
180.24  "direct reduced ore" is ore that results in a product that has 
180.25  an iron content of at least 75 percent.  The rate to be applied 
180.26  to direct reduced ore is 25 percent of the rate otherwise 
180.27  determined under this subdivision for the first 500,000 of 
180.28  taxable tons for the production year, and 50 percent of the rate 
180.29  otherwise determined for any remainder.  If the taxpayer had no 
180.30  production in the two years prior to the current production 
180.31  year, the tonnage eligible to be taxed at 25 percent of the rate 
180.32  otherwise determined under this subdivision is the first 166,667 
180.33  tons.  If the taxpayer had some production in the year prior to 
180.34  the current production year but no production in the second 
180.35  prior year, the tonnage eligible to be taxed at 25 percent of 
180.36  the rate otherwise determined under this subdivision is the 
181.1   first 333,333 tons. 
181.2      (2) Production of direct reduced ore in this state is 
181.3   subject to the tax imposed by this section, but if that 
181.4   production is not produced by a producer of taconite or iron 
181.5   sulfides, the production of taconite or iron sulfides consumed 
181.6   in the production of direct reduced iron in this state is not 
181.7   subject to the tax imposed by this section on taconite or iron 
181.8   sulfides. 
181.9      Sec. 21.  [REPEALER.] 
181.10     Minnesota Statutes 1996, sections 273.13, subdivision 21a; 
181.11  273.1315; 275.08, subdivisions 1c and 1d; and 275.61, are 
181.12  repealed. 
181.13     Sec. 22.  [EFFECTIVE DATE.] 
181.14     Sections 1 to 4 and 6 to 14 and 21 are effective for taxes 
181.15  levied in 1999, payable in 2000 and subsequent years.  
181.16     Section 15 is effective for tax years beginning after 1999. 
181.17     Sections 16 to 19 are effective for refunds payable in 2000 
181.18  and following years. 
181.19     Section 20 is effective January 1, 2000. 
181.20                             ARTICLE 7
181.21                 EDUCATION FINANCE REFORM PAY 2000 
181.22     Section 1.  Minnesota Statutes 1996, section 122.247, 
181.23  subdivision 3, is amended to read: 
181.24     Subd. 3.  [TRANSITIONAL LEVY REVENUE.] The board of the 
181.25  combined district, or the boards of combining districts that 
181.26  have received voter approval for the combination under section 
181.27  122.243, subdivision 2, may levy are eligible for state aid to 
181.28  pay for the expenses of negotiation, administrative expenses 
181.29  directly related to the transition from cooperation to 
181.30  combination, and the cost of necessary new athletic and music 
181.31  uniforms.  The board or boards may levy this amount over three 
181.32  or fewer years.  All expenses must be approved by the 
181.33  commissioner of children, families, and learning.  The 
181.34  commissioner may pay this state aid to a district over three or 
181.35  fewer years.  
181.36     Sec. 2.  Minnesota Statutes 1996, section 122.45, 
182.1   subdivision 3a, is amended to read: 
182.2      Subd. 3a.  (a) Liabilities of a dissolved district existing 
182.3   at the time of the attachment other than bonded debt within the 
182.4   purview of subdivision 2 shall be obligations of the 
182.5   consolidated district after attachment (in the amount and kind 
182.6   determined by the commissioner according to subdivision 1, where 
182.7   a dissolved district is divided), for the payment of which the 
182.8   consolidated district has a right to reimbursement by special 
182.9   levy or levies state aid.  The amount of reimbursement will be 
182.10  equal to the liabilities of the dissolved district for which the 
182.11  consolidated district is obligated less the aggregate of the 
182.12  following which has been or will be received by the consolidated 
182.13  district at or after the time of attachment from or as a result 
182.14  of the dissolution and attachment of the dissolved district: 
182.15     (1) all taxes inuring to the consolidating district upon 
182.16  levies made by the dissolved district; 
182.17     (2) all cash, bank accounts, investments, and other current 
182.18  assets; 
182.19     (3) earned state aids of the dissolved districts; 
182.20     (4) returns from the sale of property of the dissolved 
182.21  district. 
182.22     (b) The amount of such special levy so computed shall be 
182.23  certified to the county auditor with the other tax requirements 
182.24  of the consolidated district but separately stated and 
182.25  identified.  The auditor shall add the amount of special levy so 
182.26  certified to the school rate for the territory in the 
182.27  consolidated district which came from the dissolved district and 
182.28  include it in the levy on the taxable property in that 
182.29  territory; provided, the county auditor shall not spread more of 
182.30  the amount certified for special levy in any year than will 
182.31  amount to 20 percent of the school levy without the special 
182.32  levy, leaving the remaining part of the certified amount for 
182.33  levy in successive years without further certification.  Any 
182.34  amount of reimbursement to which it is entitled omitted by the 
182.35  consolidated district from its initial certification for special 
182.36  levy may be certified in a subsequent year for levy in the same 
183.1   manner as the levy upon initial certification. 
183.2      The levy authorized by this subdivision shall be in 
183.3   addition to those otherwise authorized for a school district. 
183.4   state aid shall be calculated by the commissioner and may be 
183.5   reduced at the commissioner's discretion for any liabilities 
183.6   that the commissioner determines are inappropriate for 
183.7   reimbursement. 
183.8      Sec. 3.  Minnesota Statutes 1996, section 122.531, 
183.9   subdivision 4a, is amended to read: 
183.10     Subd. 4a.  [REORGANIZATION OPERATING DEBT LEVIES REVENUE.] 
183.11  (a) A district that receives revenue under section 124.2725 for 
183.12  cooperation or has combined according to sections 122.241 to 
183.13  122.248 may levy is eligible for state aid to eliminate 
183.14  reorganization operating debt as defined in section 121.915, 
183.15  clause (1).  The amount of the debt must be certified over a 
183.16  period of five years.  After the effective date of combination 
183.17  according to sections 122.241 to 122.248, the levy may be 
183.18  certified and spread either 
183.19     (1) only on the property in the combined district that 
183.20  would have been taxable in the preexisting district that 
183.21  incurred the debt, or 
183.22     (2) on all of the taxable property in the combined district.
183.23     (b) A district that has reorganized according to section 
183.24  122.22 or 122.23 may levy is eligible for state aid to eliminate 
183.25  reorganization operating debt as defined in section 121.915, 
183.26  clause (2).  The amount of debt must be certified over a period 
183.27  not to exceed five years and may be spread either 
183.28     (1) only on the property in the newly created or enlarged 
183.29  district which was taxable in the preexisting district that 
183.30  incurred the debt, or 
183.31     (2) on all of the taxable property in the newly created or 
183.32  enlarged district. 
183.33     (c) The commissioner shall calculate the amount of 
183.34  reorganization operating debt for each qualifying school 
183.35  district.  At the commissioner's discretion, the amount of the 
183.36  state aid may be reduced for any school district.  The 
184.1   commissioner shall establish a schedule for the payment of state 
184.2   aid.  The schedule may extend for up to five years. 
184.3      Sec. 4.  Minnesota Statutes 1996, section 122.531, 
184.4   subdivision 9, is amended to read: 
184.5      Subd. 9.  [LEVY REVENUE FOR SEVERANCE PAY OR EARLY 
184.6   RETIREMENT INCENTIVES.] The school board of a newly created or 
184.7   enlarged district to which part or all of a dissolved district 
184.8   was attached according to section 122.22 may levy for is 
184.9   eligible for state aid payments for the cost of severance pay or 
184.10  early retirement incentives for licensed and nonlicensed 
184.11  employees who resign or retire early as a result of the 
184.12  dissolution or consolidation, if the commissioner of children, 
184.13  families, and learning approves the incentives and the amount to 
184.14  be levied.  The amount may be levied over a period of up to five 
184.15  years and shall be spread in whole or in part on the property of 
184.16  a preexisting district or the newly created or enlarged 
184.17  district, as determined by the school board of the newly created 
184.18  or enlarged district of the incentives.  The commissioner shall 
184.19  establish a schedule for the payment of state aid.  The schedule 
184.20  may extend for up to five years. 
184.21     Sec. 5.  Minnesota Statutes 1996, section 122.533, is 
184.22  amended to read: 
184.23     122.533 [EXPENSES OF TRANSITION.] 
184.24     The board of a district to which a dissolved district is 
184.25  attached pursuant to section 122.22, may, is eligible for state 
184.26  aid for the purpose of paying the expenses of negotiations and 
184.27  other administrative expenses relating to the transition,.  The 
184.28  board of the district may enter into agreements with banks or 
184.29  any person to take its orders at any rate of interest not to 
184.30  exceed seven percent per annum.  These orders shall be paid by 
184.31  the treasurer of the district from district funds after the 
184.32  effective date of the dissolution and attachment.  
184.33  Notwithstanding the provisions of sections 124.226, 124.2716, 
184.34  124.91, 124.912, 124.914, 124.916, and 124.918, the district may 
184.35  is, in the year the dissolution and attachment becomes 
184.36  effective, levy eligible for state aid in an amount equal to the 
185.1   amount of the orders issued pursuant to this subdivision and the 
185.2   interest on these orders.  No district shall issue orders for 
185.3   funds or make a levy pursuant according to this subdivision 
185.4   without the commissioner's approval of the expenses to be paid 
185.5   with the funds from the orders and levy state aid. 
185.6      Sec. 6.  Minnesota Statutes 1996, section 122.535, 
185.7   subdivision 6, is amended to read: 
185.8      Subd. 6.  [SEVERANCE PAY.] A district shall pay severance 
185.9   pay to a teacher who is placed on unrequested leave of absence 
185.10  by the district as a result of the agreement.  A teacher is 
185.11  eligible under this subdivision if the teacher: 
185.12     (1) is a teacher, as defined in section 125.12, subdivision 
185.13  1, but not a superintendent; 
185.14     (2) has a continuing contract with the district according 
185.15  to section 125.12, subdivision 4. 
185.16     The amount of severance pay shall be equal to the teacher's 
185.17  salary for the school year during which the teacher was placed 
185.18  on unrequested leave of absence minus the gross amount the 
185.19  teacher was paid during the 12 months following the teacher's 
185.20  termination of salary, by an entity whose teachers by statute or 
185.21  rule must possess a valid Minnesota teaching license, and minus 
185.22  the amount a teacher receives as severance or other similar pay 
185.23  according to a contract with the district or district policy.  
185.24  These entities include, but are not limited to, the school 
185.25  district that placed the teacher on unrequested leave of 
185.26  absence, another school district in Minnesota, an education 
185.27  district, an intermediate school district, a SC, a board formed 
185.28  under section 471.59, a state residential academy, the Lola and 
185.29  Rudy Perpich Minnesota center for arts education, a vocational 
185.30  center, or a special education cooperative.  These entities do 
185.31  not include a school district in another state, a Minnesota 
185.32  public post-secondary institution, or a state agency.  Only 
185.33  amounts earned by the teacher as a substitute teacher or in a 
185.34  position requiring a valid Minnesota teaching license shall be 
185.35  subtracted.  A teacher may decline any offer of employment as a 
185.36  teacher without loss of rights to severance pay. 
186.1      To determine the amount of severance pay that is due for 
186.2   the first six months following termination of the teacher's 
186.3   salary, the district may require the teacher to provide 
186.4   documented evidence of the teacher's employers and gross 
186.5   earnings during that period.  The district shall pay the teacher 
186.6   the amount of severance pay it determines to be due from the 
186.7   proceeds of the levy state aid for this purpose.  To determine 
186.8   the amount of severance pay that is due for the second six 
186.9   months of the 12 months following the termination of the 
186.10  teacher's salary, the district may require the teacher to 
186.11  provide documented evidence of the teacher's employers and gross 
186.12  earnings during that period.  The district shall pay the teacher 
186.13  the amount of severance pay it determines to be due from 
186.14  the proceeds of the levy state aid for this purpose.  
186.15     A teacher who receives severance pay under this subdivision 
186.16  waives all further reinstatement rights under section 125.12, 
186.17  subdivision 6a or 6b.  If the teacher receives severance pay, 
186.18  the teacher shall not receive credit for any years of service in 
186.19  the district paying severance pay prior to the year in which the 
186.20  teacher becomes eligible to receive severance pay. 
186.21     The severance pay is subject to section 465.72.  The 
186.22  district may levy annually is eligible for state aid according 
186.23  to section 124.912, subdivision 1, for the severance pay.  
186.24     Sec. 7.  Minnesota Statutes 1996, section 124.2131, 
186.25  subdivision 1, is amended to read: 
186.26     Subdivision 1.  [ADJUSTED NET TAX CAPACITY.] (a) 
186.27  [COMPUTATION.] The department of revenue shall annually conduct 
186.28  an assessment/sales ratio study of the taxable property in each 
186.29  school district in accordance with the procedures in paragraphs 
186.30  (b) and (c).  Based upon the results of this assessment/sales 
186.31  ratio study, the department of revenue shall determine an 
186.32  aggregate equalized net local tax capacity for the various 
186.33  classes of taxable property in each county, city, town, and 
186.34  school district under the definition of tax base contained in 
186.35  section 273.13, subdivision 1a, which tax capacity shall be 
186.36  designated as the adjusted net local tax capacity.  Based upon 
187.1   the results of the study, the department shall determine an 
187.2   aggregate equalized education tax capacity for each school 
187.3   district under the definition of tax base contained in section 
187.4   273.13, subdivision 1b, which shall be designated as the 
187.5   adjusted education tax capacity.  The adjusted net tax 
187.6   capacities shall be determined using the net tax capacity 
187.7   percentages in effect for the assessment year following the 
187.8   assessment year of the study.  The department of revenue shall 
187.9   make whatever estimates are necessary to account for changes in 
187.10  the classification system.  The department of revenue may incur 
187.11  the expense necessary to make the determinations.  The 
187.12  commissioner of revenue may reimburse any county or governmental 
187.13  official for requested services performed in ascertaining the 
187.14  adjusted net tax capacity.  On or before March 15 annually, the 
187.15  department of revenue shall file with the chair of the tax 
187.16  committee of the house of representatives and the chair of the 
187.17  committee on taxes and tax laws of the senate a report of 
187.18  adjusted net tax capacities.  On or before June 15 annually, the 
187.19  department of revenue shall file its final report on the 
187.20  adjusted net education tax capacities established by the 
187.21  previous year's assessments and the current year's net education 
187.22  tax capacity percentages with the commissioner of children, 
187.23  families, and learning and each county auditor for those school 
187.24  districts for which the auditor has the responsibility for 
187.25  determination of local tax rates.  A copy of the report so filed 
187.26  shall be mailed to the clerk of each district involved and to 
187.27  the county assessor or supervisor of assessments of the county 
187.28  or counties in which each district is located. 
187.29     (b)  [METHODOLOGY.] In making its annual assessment/sales 
187.30  ratio studies, the department of revenue shall use a methodology 
187.31  consistent with the most recent Standard on Assessment Ratio 
187.32  Studies published by the assessment standards committee of the 
187.33  International Association of Assessing Officers.  The 
187.34  commissioner of revenue shall supplement this general 
187.35  methodology with specific procedures necessary for execution of 
187.36  the study in accordance with other Minnesota laws impacting the 
188.1   assessment/sales ratio study.  The commissioner shall document 
188.2   these specific procedures in writing and shall publish the 
188.3   procedures in the State Register, but these procedures will not 
188.4   be considered "rules" pursuant to the Minnesota administrative 
188.5   procedure act.  For purposes of this section, sections 270.12, 
188.6   subdivision 2, clause (8), and 278.05, subdivision 4, the 
188.7   commissioner of revenue shall exclude from the assessment/sales 
188.8   ratio study the sale of any nonagricultural property which does 
188.9   not contain an improvement, if (1) the statutory basis on which 
188.10  the property's taxable value as most recently assessed is less 
188.11  than market value as defined in section 273.11, or (2) the 
188.12  property has undergone significant physical change or a change 
188.13  of use since the most recent assessment.  
188.14     (c)  [AGRICULTURAL LANDS.] For purposes of determining the 
188.15  adjusted net tax capacity of agricultural lands for the 
188.16  calculation of adjusted net tax capacities, the market value of 
188.17  agricultural lands shall be the price for which the property 
188.18  would sell in an arms length transaction. 
188.19     (d)  [FORCED SALES.] The commissioner may include forced 
188.20  sales in the assessment/sales ratio studies if it is determined 
188.21  by the commissioner that these forced sales indicate true market 
188.22  value. 
188.23     (e)  [STIPULATED VALUES AND ABATEMENTS.] The estimated 
188.24  market value to be used in calculating sales ratios shall be the 
188.25  value established by the assessor before any stipulations 
188.26  resulting from appeals by property owners and before any 
188.27  abatement unless the abatement was granted for the purpose of 
188.28  correcting mere clerical errors. 
188.29     (f)  [SALES OF INDUSTRIAL PROPERTY.] Separate sales ratios 
188.30  shall be calculated for commercial property and for industrial 
188.31  property.  These two classes shall be combined only in 
188.32  jurisdictions in which there is not an adequate sample of sales 
188.33  in each class. 
188.34     Sec. 8.  Minnesota Statutes 1996, section 124.239, 
188.35  subdivision 5, is amended to read: 
188.36     Subd. 5.  [LEVY AUTHORIZED.] A district, after local board 
189.1   approval, may levy for costs related to an approved facility 
189.2   plan as follows:  
189.3      (a) if the district has indicated to the commissioner that 
189.4   bonds will be issued, the district may levy for the principal 
189.5   and interest payments on outstanding bonds issued according to 
189.6   subdivision 3; or 
189.7      (b) if the district has indicated to the commissioner that 
189.8   the plan will be funded through levy, the district may levy 
189.9   according to the schedule approved in the plan. 
189.10     The authority to levy for costs related to an approved 
189.11  facility plan under this section is limited to facilities plans 
189.12  approved prior to July 1, 1999. 
189.13     Sec. 9.  Minnesota Statutes 1996, section 124.2725, 
189.14  subdivision 2, is amended to read: 
189.15     Subd. 2.  [COOPERATION AND COMBINATION REVENUE.] 
189.16  Cooperation and combination revenue equals $100 times the pupil 
189.17  units served in the district.  For purposes of this section, 
189.18  pupil units served means the number of resident and nonresident 
189.19  pupil units in average daily membership receiving instruction in 
189.20  the cooperating or combined district.  A district may not 
189.21  receive revenue under this section if it levies receives revenue 
189.22  under section 124.912, subdivision 4.  Cooperation and 
189.23  combination revenue is provided through state aid. 
189.24     Sec. 10.  Minnesota Statutes 1996, section 124.2725, 
189.25  subdivision 6, is amended to read: 
189.26     Subd. 6.  [ADDITIONAL AID.] In addition to the aid in 
189.27  subdivision 5 2, districts shall receive aid according to the 
189.28  following: 
189.29     (1) for districts that did not enter into an agreement 
189.30  under section 122.541 at least three years before the date of a 
189.31  successful referendum held under section 122.243, subdivision 2, 
189.32  and combine without cooperating, $100 times the pupil units 
189.33  served in the district in the first year of combination; or 
189.34     (2) for districts that combine after one or two years of 
189.35  cooperation, $100 times the actual pupil units served in each 
189.36  district for the first year of cooperation and $100 times the 
190.1   actual pupil units served in the combined district for the first 
190.2   year of combination; or 
190.3      (3) for districts that entered into an agreement under 
190.4   section 122.541 at least three years before the date of a 
190.5   successful referendum held under section 122.243, subdivision 2, 
190.6   and combine without cooperating, $100 times the pupil units 
190.7   served in the combined district for the first two years of 
190.8   combination. 
190.9      Sec. 11.  Minnesota Statutes 1996, section 124.2725, 
190.10  subdivision 13, is amended to read: 
190.11     Subd. 13.  [FAILURE TO COMBINE.] A district has failed to 
190.12  combine if the commissioner disapproves of the plan according to 
190.13  section 122.243, subdivision 1, or if a third referendum fails 
190.14  under section 122.243, subdivision 2, or if the commissioner of 
190.15  children, families, and learning determines that the districts 
190.16  involved are not making sufficient progress toward combination. 
190.17     (a) If a district has failed to combine, cooperation and 
190.18  combination aid under subdivisions 5 and 6 shall not be paid and 
190.19  the authority to levy under subdivision 4 ceases.  The 
190.20  commissioner shall reduce other aids due the district to recover 
190.21  an amount equal to the aid paid under subdivision 6 plus the 
190.22  difference between the aid paid under subdivision 5 and the aid 
190.23  that would have been paid if the revenue had been $50 times the 
190.24  pupil units served.  
190.25     (b) If a district has failed to combine, the authority to 
190.26  levy eligibility for revenue for reorganization operating debt 
190.27  under section 122.531, subdivision 4a, and for severance pay or 
190.28  early retirement incentives under subdivision 15 ceases. 
190.29     Sec. 12.  Minnesota Statutes 1996, section 124.2725, 
190.30  subdivision 14, is amended to read: 
190.31     Subd. 14.  [CESSATION OF REVENUE.] At any time the 
190.32  districts cease cooperating, aid shall not be paid and the 
190.33  authority to levy ceases.  If a district ceases to cooperate for 
190.34  all or a portion of a fiscal year for which a levy has been 
190.35  certified under subdivision 3, the department of children, 
190.36  families, and learning shall adjust the next levy certified by 
191.1   the district by an amount in proportion to the part of the 
191.2   fiscal year that the district did not cooperate. 
191.3      Sec. 13.  Minnesota Statutes 1996, section 124.2726, 
191.4   subdivision 1, is amended to read: 
191.5      Subdivision 1.  [ELIGIBILITY AND USE.] A school district 
191.6   that has been reorganized after June 30, 1994, under section 
191.7   122.23 is eligible for consolidation transition revenue.  
191.8   Revenue is equal to the sum of aid under subdivision 
191.9   subdivisions 2 and levy under subdivision 3.  Consolidation 
191.10  transition revenue may only be used according to this section.  
191.11  Revenue must be used for the following purposes and may be 
191.12  distributed among these purposes at the discretion of the 
191.13  district: 
191.14     (1) to offer early retirement incentives as provided by 
191.15  section 122.23, subdivision 20; 
191.16     (2) to reduce operating debt as defined in section 121.915; 
191.17     (3) to enhance learning opportunities for students in the 
191.18  reorganized district; and 
191.19     (4) for other costs incurred in the reorganization. 
191.20     Revenue received and utilized under clause (3) or (4) may 
191.21  be expended for operating, facilities, and/or equipment.  
191.22  Revenue received under this section shall not be included in the 
191.23  determination of the reduction under section 124A.26, 
191.24  subdivision 1.  
191.25     Sec. 14.  Minnesota Statutes 1996, section 124.2726, 
191.26  subdivision 3, is amended to read: 
191.27     Subd. 3.  [LEVY ADDITIONAL AID.] If the aid available in 
191.28  subdivision 2 is insufficient to cover the costs of the district 
191.29  under section 122.23, subdivision 20, the district may levy 
191.30  apply to the commissioner for state aid to cover the difference 
191.31  over a period of time not to exceed.  The commissioner shall 
191.32  evaluate the aid request and may award additional aid for a 
191.33  period not to exceed three years.  
191.34     Sec. 15.  Minnesota Statutes 1996, section 124.2727, 
191.35  subdivision 6a, is amended to read: 
191.36     Subd. 6a.  [DISTRICT COOPERATION REVENUE.] A district's 
192.1   cooperation revenue is equal to the greater of $67 times the 
192.2   actual pupil units or $25,000.  District cooperation revenue is 
192.3   provided through state aid. 
192.4      Sec. 16.  Minnesota Statutes 1996, section 124.312, 
192.5   subdivision 5, is amended to read: 
192.6      Subd. 5.  [INTEGRATION AID.] For fiscal year 1996 and later 
192.7   fiscal years Integration revenue is provided through state aid 
192.8   and equals the following amounts: 
192.9      (1) for independent school district No. 709, Duluth, 
192.10  $1,385,000 plus the sum of $660,000 and an amount equal to 2.0 
192.11  percent times the district's adjusted net tax capacity for 
192.12  assessment year 1998; 
192.13     (2) for independent school district No. 625, St. Paul, 
192.14  $8,090,700 plus the product of $197 and the district's actual 
192.15  pupil units for that year; and 
192.16     (3) for special school district No. 1, Minneapolis, 
192.17  $9,368,300 plus the product of $197 and the district's actual 
192.18  pupil units for that year. 
192.19     Sec. 17.  Minnesota Statutes 1996, section 124.313, is 
192.20  amended to read: 
192.21     124.313 [TARGETED NEEDS REVENUE.] 
192.22     For fiscal year 1996 and thereafter, a school district's 
192.23  targeted needs revenue equals the sum of: 
192.24     (1) assurance of mastery revenue according to section 
192.25  124.311; plus 
192.26     (2) the district's limited English proficiency revenue 
192.27  computed according to section 124.273, subdivision 1d; plus 
192.28     (3) integration revenue computed according to section 
192.29  124.312, subdivision 4. 
192.30     Sec. 18.  Minnesota Statutes 1996, section 124.4945, is 
192.31  amended to read: 
192.32     124.4945 [LEVY STATE AID FOR SEVERANCE PAY.] 
192.33     A joint powers board established under section 124.494 may 
192.34  make a levy is eligible to receive state aid to provide 
192.35  severance pay and early retirement incentives under section 
192.36  125.611, for any teacher as defined under section 125.12, 
193.1   subdivision 1, who is placed on unrequested leave as a result of 
193.2   the cooperative secondary facility agreement.  A joint powers 
193.3   board making a levy shall certify to each participating district 
193.4   tax levies sufficient to raise the amount necessary to provide 
193.5   the district's portion of severance pay and early retirement 
193.6   incentives.  The tax levy certified to each district must be 
193.7   expressed as a local tax rate, that, when applied to the 
193.8   adjusted net tax capacity of all of the participating districts 
193.9   raises the amount necessary to provide severance pay and early 
193.10  retirement incentives.  Each participating school district shall 
193.11  include the levy in the next tax roll which it shall certify to 
193.12  the county auditor, and shall remit the collections of the levy 
193.13  to the joint powers board.  The commissioner shall approve any 
193.14  severance pay agreements or early retirement incentives and 
193.15  determine the amount of state aid for the districts. 
193.16     Sec. 19.  Minnesota Statutes 1996, section 124.83, 
193.17  subdivision 3, is amended to read: 
193.18     Subd. 3.  [HEALTH AND SAFETY REVENUE.] A district's health 
193.19  and safety revenue for a fiscal year equals: 
193.20     (1) the sum of (a) the total approved cost of the 
193.21  district's hazardous substance plan for fiscal years 1985 
193.22  through 1989, plus (b) the total approved cost of the district's 
193.23  health and safety program for fiscal year 1990 through the 
193.24  fiscal year to which the levy is attributable, minus 
193.25     (2) the sum of (a) the district's total hazardous substance 
193.26  aid and levy for fiscal years 1985 through 1989 under sections 
193.27  124.245 and 275.125, subdivision 11c, plus (b) the district's 
193.28  health and safety revenue under this subdivision, for years 
193.29  before the fiscal year to which the levy is attributable, plus 
193.30  (c) the amount of other federal, state, or local receipts for 
193.31  the district's hazardous substance or health and safety programs 
193.32  for fiscal year 1985 through the fiscal year to which the levy 
193.33  is attributable.  
193.34     The commissioner shall not approve any new health and 
193.35  safety revenue plans after July 1, 1999. 
193.36     Sec. 20.  Minnesota Statutes 1996, section 124.91, 
194.1   subdivision 1, is amended to read: 
194.2      Subdivision 1.  [TO LEASE BUILDING OR LAND.] When a 
194.3   district finds it economically advantageous to rent or lease a 
194.4   building or land for any instructional purposes or for school 
194.5   storage or furniture repair, and it determines that the capital 
194.6   expenditure facilities revenues authorized under sections 
194.7   124.243 and 124A.22, subdivision 10, are insufficient for this 
194.8   purpose, it may apply to the commissioner for permission to make 
194.9   an additional capital expenditure levy for this purpose.  The 
194.10  commissioner shall not approve any levies under this section 
194.11  after July 1, 1999.  A school district that has approved levy 
194.12  authority under this section may continue to levy for the 
194.13  remainder of the lease amounts.  An application for permission 
194.14  to levy under this subdivision must contain financial 
194.15  justification for the proposed levy, the terms and conditions of 
194.16  the proposed lease, and a description of the space to be leased 
194.17  and its proposed use.  The criteria for approval of applications 
194.18  to levy under this subdivision must include:  the reasonableness 
194.19  of the price, the appropriateness of the space to the proposed 
194.20  activity, the feasibility of transporting pupils to the leased 
194.21  building or land, conformity of the lease to the laws and rules 
194.22  of the state of Minnesota, and the appropriateness of the 
194.23  proposed lease to the space needs and the financial condition of 
194.24  the district.  The commissioner must not authorize a levy under 
194.25  this subdivision in an amount greater than the cost to the 
194.26  district of renting or leasing a building or land for approved 
194.27  purposes.  The proceeds of this levy must not be used for 
194.28  custodial or other maintenance services.  A district may not 
194.29  levy under this subdivision for the purpose of leasing or 
194.30  renting a district-owned building to itself. 
194.31     Sec. 21.  Minnesota Statutes 1996, section 124.91, 
194.32  subdivision 2, is amended to read: 
194.33     Subd. 2.  [PRE-JULY 1990 LEASE PURCHASE, INSTALLMENT BUYS.] 
194.34  For taxes payable prior to 2000, a district may annually levy 
194.35  the amount needed to make payments required by a lease purchase 
194.36  agreement, installment purchase agreement, or other deferred 
195.1   payment agreement authorized by Minnesota Statutes 1989 
195.2   Supplement, section 465.71, if:  
195.3      (1) the agreement was approved by the commissioner before 
195.4   July 1, 1990, according to Minnesota Statutes 1989 Supplement, 
195.5   section 275.125, subdivision 11d; or 
195.6      (2) the district levied in 1989 for the payments. 
195.7      For fiscal years 2001 and later, the commissioner shall pay 
195.8   state aid to each district in the amount needed to make the 
195.9   payments authorized by this section. 
195.10     Sec. 22.  Minnesota Statutes 1996, section 124.91, 
195.11  subdivision 5, is amended to read: 
195.12     Subd. 5.  [INTERACTIVE TELEVISION.] (a) A school district 
195.13  with its central administrative office located within economic 
195.14  development region one, two, three, four, five, six, seven, 
195.15  eight, nine, and ten may apply to the commissioner of children, 
195.16  families, and learning for ITV revenue up to the greater of .5 
195.17  percent of the adjusted net tax capacity of the district or 
195.18  $25,000 for the construction, maintenance, and lease costs of an 
195.19  interactive television system for instructional purposes.  The 
195.20  approval by the commissioner of children, families, and learning 
195.21  and the application procedures set forth in subdivision 1 shall 
195.22  apply to the revenue in this subdivision.  In granting the 
195.23  approval, the commissioner must consider whether the district is 
195.24  maximizing efficiency through peak use and off-peak use pricing 
195.25  structures.  The commissioner may not approve any new projects 
195.26  after July 1, 1999. 
195.27     (b) To obtain ITV revenue, a district may levy an amount 
195.28  not to exceed the district's ITV revenue times the lesser of one 
195.29  or the ratio of: 
195.30     (1) the quotient derived by dividing the adjusted net tax 
195.31  capacity of the district for the year before the year the levy 
195.32  is certified by the actual pupil units in the district for the 
195.33  year to which the levy is attributable; to 
195.34     (2) 100 percent of the equalizing factor as defined in 
195.35  section 124A.02, subdivision 8, for the year to which the levy 
195.36  is attributable. 
196.1      (c) A district's ITV aid is the difference between its ITV 
196.2   revenue and the ITV levy. 
196.3      (d) The revenue in the first year after reorganization for 
196.4   a district that has reorganized under section 122.22, 122.23, or 
196.5   122.241 to 122.247 shall be the greater of: 
196.6      (1) the revenue computed for the reorganized district under 
196.7   paragraph (a), or 
196.8      (2)(i) for two districts that reorganized, 75 percent of 
196.9   the revenue computed as if the districts involved in the 
196.10  reorganization were separate, or 
196.11     (ii) for three or more districts that reorganized, 50 
196.12  percent of the revenue computed as if the districts involved in 
196.13  the reorganization were separate. 
196.14     (e) The revenue in paragraph (d) is increased by the 
196.15  difference between the initial revenue and ITV lease costs for 
196.16  leases that had been entered into by the preexisting districts 
196.17  on the effective date of the consolidation or combination and 
196.18  with a term not exceeding ten years.  This increased revenue is 
196.19  only available for the remaining term of the lease.  However, in 
196.20  no case shall the revenue exceed the amount available had the 
196.21  preexisting districts received revenue separately. 
196.22     Sec. 23.  Minnesota Statutes 1996, section 124.91, 
196.23  subdivision 7, is amended to read: 
196.24     Subd. 7.  [LEASE PURCHASE, INSTALLMENT BUYS.] (a) Upon 
196.25  application to, and approval by, the commissioner in accordance 
196.26  with the procedures and limits in subdivision 1, a district, as 
196.27  defined in this subdivision, may: 
196.28     (1) purchase real or personal property under an installment 
196.29  contract or may lease real or personal property with an option 
196.30  to purchase under a lease purchase agreement, by which 
196.31  installment contract or lease purchase agreement title is kept 
196.32  by the seller or vendor or assigned to a third party as security 
196.33  for the purchase price, including interest, if any; and 
196.34     (2) annually levy receive state aid in the amounts 
196.35  necessary to pay the district's obligations under the 
196.36  installment contract or lease purchase agreement. 
197.1      (b) The obligation created by the installment contract or 
197.2   the lease purchase agreement must not be included in the 
197.3   calculation of net debt for purposes of section 475.53, and does 
197.4   not constitute debt under other law.  An election is not 
197.5   required in connection with the execution of the installment 
197.6   contract or the lease purchase agreement. 
197.7      (c) The proceeds of the levy authorized by commissioner 
197.8   shall not authorize state aid under this subdivision must not to 
197.9   be used to acquire a facility to be primarily used for athletic 
197.10  or school administration purposes. 
197.11     (d) For the purposes of this subdivision, "district" means: 
197.12     (1) a school district required to have a comprehensive plan 
197.13  for the elimination of segregation whose plan has been 
197.14  determined by the commissioner to be in compliance with the 
197.15  state board of education rules relating to equality of 
197.16  educational opportunity and school desegregation; or 
197.17     (2) a school district that participates in a joint program 
197.18  for interdistrict desegregation with a district defined in 
197.19  clause (1) if the facility acquired under this subdivision is to 
197.20  be primarily used for the joint program. 
197.21     (e) Notwithstanding subdivision 1, the prohibition against 
197.22  a levy by a district to lease or rent a district-owned building 
197.23  to itself does not apply to levies otherwise authorized by this 
197.24  subdivision. 
197.25     (f) For the purposes of this subdivision, any references in 
197.26  subdivision 1 to building or land shall include personal 
197.27  property. 
197.28     Sec. 24.  Minnesota Statutes 1996, section 124.912, 
197.29  subdivision 1, is amended to read: 
197.30     Subdivision 1.  [STATUTORY OBLIGATIONS.] (a) A school 
197.31  district may levy the amount authorized for liabilities of 
197.32  dissolved districts pursuant to section 122.45; the amounts 
197.33  necessary to pay the district's obligations under section 
197.34  268.06, subdivision 25; the amounts necessary to pay for job 
197.35  placement services offered to employees who may become eligible 
197.36  for benefits pursuant to section 268.08; the amounts necessary 
198.1   to pay the district's obligations under section 127.05; the 
198.2   amounts authorized by section 122.531; the amounts necessary to 
198.3   pay the district's obligations under section 122.533; and for 
198.4   severance pay required by sections 120.08, subdivision 3, and 
198.5   122.535, subdivision 6. 
198.6      (b) Each year, a member district of an education district 
198.7   that levies under this subdivision must transfer the amount of 
198.8   revenue certified under paragraph (b) to the education district 
198.9   board according to this subdivision.  By June 20 and November 30 
198.10  of each year, an amount must be transferred equal to: 
198.11     (1) 50 percent times 
198.12     (2) the amount certified in paragraph (b) minus homestead 
198.13  and agricultural credit aid allocated for that levy according to 
198.14  section 273.1398, subdivision 6.  A school district is eligible 
198.15  for state aid for the following purposes: 
198.16     (1) liabilities for dissolved districts under section 
198.17  122.45; 
198.18     (2) the amounts necessary to pay the district's obligations 
198.19  under section 268.06, subdivision 25; 
198.20     (3) the amounts necessary to pay for job placement services 
198.21  offered to employees who may become eligible for benefits 
198.22  pursuant to section 268.08; 
198.23     (4) the amounts authorized by section 122.531; 
198.24     (5) the amounts necessary to pay the district's obligations 
198.25  under section 122.533; and 
198.26     (6) for severance pay required by sections 120.08, 
198.27  subdivision 3, and 122.535, subdivision 6.  
198.28     The commissioner shall consider all requests for state aid 
198.29  under this subdivision and shall, at the commissioner's 
198.30  discretion, approve, modify, or disapprove aid amounts. 
198.31     Sec. 25.  Minnesota Statutes 1996, section 124.912, 
198.32  subdivision 3, is amended to read: 
198.33     Subd. 3.  [RULE COMPLIANCE.] Each year a district that is 
198.34  required to implement a plan according to the requirements of 
198.35  Minnesota Rules, parts 3535.0200 to 3535.2200, may levy is 
198.36  eligible for state aid in an amount not to exceed a net tax rate 
199.1   of equal to 2.0 percent times the adjusted net tax capacity of 
199.2   the district for taxes payable in 1991 and thereafter the 
199.3   preceding year.  A district that levies receives integration 
199.4   revenue according to subdivision 2 may not levy according 
199.5   to section 124.312 is not eligible for state aid under this 
199.6   subdivision.  Notwithstanding section 121.904, the entire amount 
199.7   of this levy shall be recognized as revenue for the fiscal year 
199.8   in which the levy is certified.  This levy shall not be 
199.9   considered in computing the aid reduction under section 124.155. 
199.10     Sec. 26.  Minnesota Statutes 1996, section 124.912, 
199.11  subdivision 6, is amended to read: 
199.12     Subd. 6.  [CRIME RELATED COSTS.] For taxes levied in 1991 
199.13  and subsequent years, payable in 1992 and subsequent years, each 
199.14  school district may make a levy on all taxable property located 
199.15  within the school district for the purposes specified in this 
199.16  subdivision.  The maximum amount which may be levied for all 
199.17  costs under this subdivision shall be equal to State aid for 
199.18  crime related costs equals $1 multiplied by the population of 
199.19  the school district.  For purposes of this subdivision, 
199.20  "population" of the school district means the same as contained 
199.21  in section 275.14.  The proceeds of the levy state aid must be 
199.22  used for reimbursing the cities and counties who contract with 
199.23  the school district for the following purposes:  (1) to pay the 
199.24  costs incurred for the salaries, benefits, and transportation 
199.25  costs of peace officers and sheriffs for liaison services in the 
199.26  district's middle and secondary schools; (2) to pay the costs 
199.27  for a drug abuse prevention program as defined in Minnesota 
199.28  Statutes 1991 Supplement, section 609.101, subdivision 3, 
199.29  paragraph (f), in the elementary schools; or (3) to pay the 
199.30  costs for a gang resistance education training curriculum in the 
199.31  middle schools.  The school district must initially attempt to 
199.32  contract for these services with the police department of each 
199.33  city or the sheriff's department of the county within the school 
199.34  district containing the school receiving the services.  If a 
199.35  local police department or a county sheriff's department does 
199.36  not wish to provide the necessary services, the district may 
200.1   contract for these services with any other police or sheriff's 
200.2   department located entirely or partially within the school 
200.3   district's boundaries.  The levy authorized under this 
200.4   subdivision is not included in determining the school district's 
200.5   levy limitations. 
200.6      Sec. 27.  Minnesota Statutes 1996, section 124.912, 
200.7   subdivision 7, is amended to read: 
200.8      Subd. 7.  [ICE ARENA LEVY AID.] (a) Each year, an 
200.9   independent school district operating and maintaining an ice 
200.10  arena, may levy is eligible for state aid for the net 
200.11  operational costs of the ice arena.  The levy amount of state 
200.12  aid may not exceed the net actual costs of operation of the 
200.13  arena for the previous year.  Net actual costs are defined as 
200.14  operating costs less any operating revenues. 
200.15     (b) Any school district operating and maintaining an ice 
200.16  arena must demonstrate to the satisfaction of the office of 
200.17  monitoring in the department of children, families, and learning 
200.18  that the district will offer equal sports opportunities for male 
200.19  and female students to use its ice arena, particularly in areas 
200.20  of access to prime practice time, team support, and providing 
200.21  junior varsity and younger level teams for girls' ice sports and 
200.22  ice sports offerings.  The commissioner shall consider all 
200.23  requests for state aid under this subdivision and shall, at the 
200.24  commissioner's discretion, approve, modify, or disapprove aid 
200.25  amounts. 
200.26     Sec. 28.  Minnesota Statutes 1996, section 124.914, 
200.27  subdivision 1, is amended to read: 
200.28     Subdivision 1.  [1977 STATUTORY OPERATING DEBT.] (1) In 
200.29  each year in which so required by this subdivision, a district 
200.30  shall make an additional levy is eligible for state aid to 
200.31  eliminate its statutory operating debt, determined as of June 
200.32  30, 1977, and certified and adjusted by the commissioner.  This 
200.33  State aid payments for fiscal years 2001 and later and the 
200.34  previous local levy shall not be made in more than 30 successive 
200.35  years and each year before it is made, it must be approved by 
200.36  the commissioner and the approval shall specify its 
201.1   amount.  This levy shall be an amount which is equal to the 
201.2   amount raised by a levy of a net tax rate of 1.66 percent times 
201.3   the adjusted net tax capacity of the district for the preceding 
201.4   year for taxes payable in 1991 and thereafter; provided that in 
201.5   the last year in which the district is required to make this 
201.6   levy, it shall levy an amount not to exceed the amount raised by 
201.7   a levy of a net tax rate of 1.66 percent times the adjusted net 
201.8   tax capacity of the district for the preceding year for taxes 
201.9   payable in 1991 and thereafter The state aid for each district 
201.10  equals the amount raised by the levy for this purpose for taxes 
201.11  payable in 1999.  When the sum of the cumulative levies made 
201.12  pursuant revenue received according to this subdivision and 
201.13  transfers made according to section 121.912, subdivision 4, 
201.14  equals an amount equal to the statutory operating debt of the 
201.15  district, the levy state aid shall be discontinued. 
201.16     (2) The district shall establish a special account in the 
201.17  general fund which shall be designated "appropriated fund 
201.18  balance reserve account for purposes of reducing statutory 
201.19  operating debt" on its books and records.  This account shall 
201.20  reflect the levy revenue authorized pursuant to this subdivision.
201.21  The proceeds of this levy revenue shall be used only for cash 
201.22  flow requirements and shall not be used to supplement district 
201.23  revenues or income for the purposes of increasing the district's 
201.24  expenditures or budgets. 
201.25     (3) Any district which is required to levy pursuant to this 
201.26  subdivision shall certify the maximum levy allowable under 
201.27  section 124A.23, subdivision 2, in that same year. 
201.28     (4) Each district shall make permanent fund balance 
201.29  transfers so that the total statutory operating debt of the 
201.30  district is reflected in the general fund as of June 30, 1977. 
201.31     Sec. 29.  Minnesota Statutes 1996, section 124.914, 
201.32  subdivision 2, is amended to read: 
201.33     Subd. 2.  [1983 OPERATING DEBT.] (1) Each year, a 
201.34  district may make an additional levy is eligible for state aid 
201.35  to eliminate a deficit in the net unappropriated operating funds 
201.36  of the district, determined as of June 30, 1983, and certified 
202.1   and adjusted by the commissioner.  This levy may in each year be 
202.2   an amount not to exceed the amount raised by a levy of a net tax 
202.3   rate of 1.85 percent times the adjusted net tax capacity for 
202.4   taxes payable in 1991 and thereafter of the district for the 
202.5   preceding year as determined by the commissioner state aid for 
202.6   each district equals the amount raised by the district's levy 
202.7   for this purpose for taxes payable in 1999.  However, the total 
202.8   amount of this levy revenue for all years it is made received 
202.9   shall not exceed the lesser of (a) the amount of the deficit in 
202.10  the net unappropriated operating funds of the district as of 
202.11  June 30, 1983, or (b) the amount of the aid reduction, according 
202.12  to Laws 1981, Third Special Session chapter 2, article 2, 
202.13  section 2, but excluding clauses (l), (m), (n), (o), and (p), 
202.14  and Laws 1982, Third Special Session chapter 1, article 3, 
202.15  section 6, to the district in fiscal year 1983.  When the 
202.16  cumulative levies made pursuant revenue received according to 
202.17  this subdivision equal equals the total amount permitted by this 
202.18  subdivision, the levy state aid shall be discontinued.  
202.19     (2) The proceeds of this levy state aid shall be used only 
202.20  for cash flow requirements and shall not be used to supplement 
202.21  district revenues or income for the purposes of increasing the 
202.22  district's expenditures or budgets.  
202.23     (3) Any district that levies pursuant to this subdivision 
202.24  shall certify the maximum levy allowable under section 124A.23, 
202.25  subdivisions 2 and 2a, in that same year. 
202.26     Sec. 30.  Minnesota Statutes 1996, section 124.914, 
202.27  subdivision 3, is amended to read: 
202.28     Subd. 3.  [1985 OPERATING DEBT.] (1) Each year, a 
202.29  district may levy is eligible for state aid to eliminate a 
202.30  deficit in the net unappropriated balance in the general fund of 
202.31  the district, determined as of June 30, 1985, and certified and 
202.32  adjusted by the commissioner.  Each year this levy may be an 
202.33  amount not to exceed the amount raised by a levy of a net tax 
202.34  rate of 1.85 percent times the adjusted net tax capacity for 
202.35  taxes payable in 1991 and thereafter of the district for the 
202.36  preceding year the state aid for each district equals the amount 
203.1   raised by the district's levy for this purpose for taxes payable 
203.2   in 1999.  However, the total amount of this levy revenue for all 
203.3   years it is made received shall not exceed the amount of the 
203.4   deficit in the net unappropriated balance in the general fund of 
203.5   the district as of June 30, 1985.  When the cumulative levies 
203.6   made pursuant to revenue received under this subdivision equal 
203.7   equals the total amount permitted by this subdivision, the levy 
203.8   state aid shall be discontinued.  
203.9      (2) A district, if eligible, may levy receive revenue under 
203.10  this subdivision or subdivision 2 but not both. 
203.11     (3) The proceeds of this levy revenue shall be used only 
203.12  for cash flow requirements and shall not be used to supplement 
203.13  district revenues or income for the purposes of increasing the 
203.14  district's expenditures or budgets.  
203.15     (4) Any district that levies pursuant to this subdivision 
203.16  shall certify the maximum levy allowable under section 124A.23, 
203.17  subdivision 2, in that same year. 
203.18     Sec. 31.  Minnesota Statutes 1996, section 124.914, 
203.19  subdivision 4, is amended to read: 
203.20     Subd. 4.  [1992 OPERATING DEBT.] (a) For taxes payable for 
203.21  calendar year 2003 fiscal year 2004 and earlier, a district that 
203.22  has filed a plan pursuant to section 121.917, subdivision 4, may 
203.23  levy is eligible for state aid, with the approval of the 
203.24  commissioner, to eliminate a deficit in the net unappropriated 
203.25  balance in the operating funds of the district, determined as of 
203.26  June 30, 1992, and certified and adjusted by the commissioner.  
203.27  Each year this levy may be an amount not to state aid shall not 
203.28  exceed the lesser of: 
203.29     (1) an amount raised by a levy of a net tax rate of one 
203.30  percent times the adjusted net tax capacity the district's levy 
203.31  for this purpose for taxes payable in 1999; or 
203.32     (2) $100,000. 
203.33  This amount shall be reduced by referendum revenue authorized 
203.34  under section 124A.03 pursuant to the plan filed under section 
203.35  121.917.  However, the total amount of this levy revenue for all 
203.36  years it is made received shall not exceed the amount of the 
204.1   deficit in the net unappropriated balance in the operating funds 
204.2   of the district as of June 30, 1992.  When the cumulative levies 
204.3   made pursuant to revenue received under this subdivision equal 
204.4   equals the total amount permitted by this subdivision, the levy 
204.5   state aid shall be discontinued.  
204.6      (b) A district, if eligible, may levy receive revenue under 
204.7   this subdivision or subdivision 2 or 3, or under section 
204.8   122.531, subdivision 4a, or Laws 1992, chapter 499, article 7, 
204.9   sections 16 or 17, but not under more than one. 
204.10     (c) The proceeds of this levy revenue shall be used only 
204.11  for cash flow requirements and shall not be used to supplement 
204.12  district revenues or income for the purposes of increasing the 
204.13  district's expenditures or budgets.  
204.14     (d) Any district that levies pursuant to this subdivision 
204.15  shall certify the maximum levy allowable under section 124A.23, 
204.16  subdivision 2, in that same year. 
204.17     Sec. 32.  Minnesota Statutes 1996, section 124.916, 
204.18  subdivision 1, is amended to read: 
204.19     Subdivision 1.  [HEALTH INSURANCE.] (a) A school 
204.20  district may levy is eligible for state aid in the amount 
204.21  necessary to make employer contributions for insurance for 
204.22  retired employees under this subdivision.  Notwithstanding 
204.23  section 121.904, 50 percent of the amount levied shall be 
204.24  recognized as revenue for the fiscal year in which the levy is 
204.25  certified.  This levy shall not be considered in computing the 
204.26  aid reduction under section 124.155. 
204.27     (b) The school board of a joint vocational technical 
204.28  district formed under sections 136C.60 to 136C.69 and the school 
204.29  board of a school district may provide employer-paid hospital, 
204.30  medical, and dental benefits to a person who: 
204.31     (1) is eligible for employer-paid insurance under 
204.32  collective bargaining agreements or personnel plans in effect on 
204.33  June 30, 1992; 
204.34     (2) has at least 25 years of service credit in the public 
204.35  pension plan of which the person is a member on the day before 
204.36  retirement or, in the case of a teacher, has a total of at least 
205.1   25 years of service credit in the teachers retirement 
205.2   association, a first-class city teacher retirement fund, or any 
205.3   combination of these; 
205.4      (3) upon retirement is immediately eligible for a 
205.5   retirement annuity; 
205.6      (4) is at least 55 and not yet 65 years of age; and 
205.7      (5) retires on or after May 15, 1992, and before July 21, 
205.8   1992. 
205.9      A school board paying insurance under this subdivision may 
205.10  not exclude any eligible employees. 
205.11     (c) An employee who is eligible both for the health 
205.12  insurance benefit under this subdivision and for an early 
205.13  retirement incentive under a collective bargaining agreement or 
205.14  personnel plan established by the employer must select either 
205.15  the early retirement incentive provided under the collective 
205.16  bargaining agreement personnel plan or the incentive provided 
205.17  under this subdivision, but may not receive both.  For purposes 
205.18  of this subdivision, a person retires when the person terminates 
205.19  active employment and applies for retirement benefits.  The 
205.20  retired employee is eligible for single and dependent coverages 
205.21  and employer payments to which the person was entitled 
205.22  immediately before retirement, subject to any changes in 
205.23  coverage and employer and employee payments through collective 
205.24  bargaining or personnel plans, for employees in positions 
205.25  equivalent to the position from which the employee retired.  The 
205.26  retired employee is not eligible for employer-paid life 
205.27  insurance.  Eligibility ceases when the retired employee attains 
205.28  the age of 65, or when the employee chooses not to receive the 
205.29  retirement benefits for which the employee has applied, or when 
205.30  the employee is eligible for employer-paid health insurance from 
205.31  a new employer.  Coverages must be coordinated with relevant 
205.32  health insurance benefits provided through the federally 
205.33  sponsored Medicare program.  
205.34     (d) Unilateral implementation of this section by a public 
205.35  employer is not an unfair labor practice for purposes of chapter 
205.36  179A.  The authority provided in this subdivision for an 
206.1   employer to pay health insurance costs for certain retired 
206.2   employees is not subject to the limits in section 179A.20, 
206.3   subdivision 2a. 
206.4      (e) If a school district levies receives revenue according 
206.5   to this subdivision, it may not also levy receive revenue 
206.6   according to section 122.531, subdivision 9, for eligible 
206.7   employees. 
206.8      Sec. 33.  Minnesota Statutes 1996, section 124.916, 
206.9   subdivision 3, is amended to read: 
206.10     Subd. 3.  [RETIREMENT LEVIES AID.] (1) In addition to the 
206.11  excess levy authorized in 1976 any district within a city of the 
206.12  first class which was authorized in 1975 to make a retirement 
206.13  levy under Minnesota Statutes 1974, section 275.127 and chapter 
206.14  422A may levy an amount per pupil unit which is equal to the 
206.15  amount levied in 1975 payable 1976, under Minnesota Statutes 
206.16  1974, section 275.127 and chapter 422A, divided by the number of 
206.17  pupil units in the district in 1976-1977. 
206.18     (2) In 1979 and each year thereafter, any district which 
206.19  qualified in 1976 for an extra levy under paragraph (1) shall be 
206.20  allowed to levy the same amount as levied for retirement in 1978 
206.21  under this clause reduced each year by ten percent of the 
206.22  difference between the amount levied for retirement in 1971 
206.23  under Minnesota Statutes 1971, sections 275.127 and 422.01 to 
206.24  422.54 and the amount levied for retirement in 1975 under 
206.25  Minnesota Statutes 1974, section 275.127 and chapter 422A. 
206.26     (3) In 1991 and each year thereafter, a district to which 
206.27  this subdivision applies may levy an additional amount required 
206.28  for contributions to the Minneapolis employees retirement fund 
206.29  as a result of the maximum dollar amount limitation on state 
206.30  contributions to the fund imposed under section 422A.101, 
206.31  subdivision 3.  The additional levy shall not exceed the most 
206.32  recent amount certified by the board of the Minneapolis 
206.33  employees retirement fund as the district's share of the 
206.34  contribution requirement in excess of the maximum state 
206.35  contribution under section 422A.101, subdivision 3.  
206.36     (4) For taxes payable in 1994 and thereafter, special 
207.1   school district No. 1, Minneapolis, and independent school 
207.2   district No. 625, St. Paul, may levy for the increase in the 
207.3   employer retirement fund contributions, under Laws 1992, chapter 
207.4   598, article 5, section 1.  Notwithstanding section 121.904, the 
207.5   entire amount of this levy may be recognized as revenue for the 
207.6   fiscal year in which the levy is certified.  This levy shall not 
207.7   be considered in computing the aid reduction under section 
207.8   124.155. 
207.9      (1) For fiscal years 2001 and later, a district is eligible 
207.10  for state aid equal to the amount of its retirement levies 
207.11  certified under this subdivision for taxes payable in 1999. 
207.12     (5) (2) If the employer retirement fund contributions under 
207.13  section 354A.12, subdivision 2a, are increased for fiscal year 
207.14  1994 or later fiscal years, special school district No. 1, 
207.15  Minneapolis, and independent school district No. 625, St. Paul, 
207.16  may levy in payable 1994 or later an amount are eligible for 
207.17  state aid equal to the amount derived by applying the net 
207.18  increase in the employer retirement fund contribution rate of 
207.19  the respective teacher retirement fund association between 
207.20  fiscal year 1993 and the fiscal year beginning in the year after 
207.21  the levy is certified to the total covered payroll of the 
207.22  applicable teacher retirement fund association.  Notwithstanding 
207.23  section 121.904, the entire amount of this levy may be 
207.24  recognized as revenue for the fiscal year in which the levy is 
207.25  certified.  This levy shall not be considered in computing the 
207.26  aid reduction under section 124.155.  If an applicable school 
207.27  district levies under this paragraph, they may not levy under 
207.28  paragraph (4). 
207.29     (6) (3) In addition to the levy state aid authorized under 
207.30  paragraph (5) (2), special school district No. 1, 
207.31  Minneapolis, may also levy payable in 1997 or later is also 
207.32  eligible for additional state aid in an amount equal to the 
207.33  contributions under section sections 423A.02, subdivision 3, and 
207.34  may also levy in payable 1994 or later an amount equal to the 
207.35  state aid contribution under section 354A.12, subdivision 3b.  
207.36  Independent school district No. 625, St. Paul, may levy payable 
208.1   in 1997 or is eligible for additional state aid in fiscal years 
208.2   2001 and later in an amount equal to the supplemental 
208.3   contributions under section 423A.02, subdivision 
208.4   3.  Notwithstanding section 121.904, the entire amount of these 
208.5   levies may be recognized as revenue for the fiscal year in which 
208.6   the levy is certified.  These levies shall not be considered in 
208.7   computing the aid reduction under section 124.155. 
208.8      Sec. 34.  Minnesota Statutes 1996, section 124.916, 
208.9   subdivision 4, is amended to read: 
208.10     Subd. 4.  [MINNEAPOLIS HEALTH INSURANCE SUBSIDY.] Each year 
208.11  special school district No. 1, Minneapolis, may make an 
208.12  additional levy not to exceed is eligible for state aid equal to 
208.13  the amount raised by a net tax rate of .10 percent times the 
208.14  adjusted net tax capacity for taxes payable in 1991 and 
208.15  thereafter of the property in the district for the preceding 
208.16  assessment year 1998.  The proceeds may be used only to 
208.17  subsidize health insurance costs for eligible teachers as 
208.18  provided in this section.  
208.19     "Eligible teacher" means a retired teacher who was a basic 
208.20  member of the Minneapolis teachers retirement fund association, 
208.21  who retired before May 1, 1974, or who had 20 or more years of 
208.22  basic member service in the Minneapolis teacher retirement fund 
208.23  association and retired before June 30, 1983, and who is not 
208.24  eligible to receive the hospital insurance benefits of the 
208.25  federal Medicare program of the Social Security Act without 
208.26  payment of a monthly premium.  The district shall notify 
208.27  eligible teachers that a subsidy is available.  To obtain a 
208.28  subsidy, an eligible teacher must submit to the school district 
208.29  a copy of receipts for health insurance premiums paid.  The 
208.30  school district shall disburse the health insurance premium 
208.31  subsidy to each eligible teacher according to a schedule 
208.32  determined by the district, but at least annually.  An eligible 
208.33  teacher may receive a subsidy up to an amount equal to the 
208.34  lesser of 90 percent of the cost of the eligible teacher's 
208.35  health insurance or up to 90 percent of the cost of the number 
208.36  two qualified plan of health coverage for individual policies 
209.1   made available by the Minnesota comprehensive health association 
209.2   under chapter 62E.  
209.3      If funds remaining from the previous year's health 
209.4   insurance subsidy levy revenue, minus the previous year's 
209.5   required subsidy amount, are sufficient to pay the estimated 
209.6   current year subsidy, the levy state aid must be discontinued 
209.7   until the remaining funds are estimated by the school board to 
209.8   be insufficient to pay the subsidy. 
209.9      This subdivision does not extend benefits to teachers who 
209.10  retire after June 30, 1983, and does not create a contractual 
209.11  right or claim for altering the benefits in this subdivision.  
209.12  This subdivision does not restrict the school district's right 
209.13  to modify or terminate coverage under this subdivision. 
209.14     Sec. 35.  Minnesota Statutes 1996, section 124.918, 
209.15  subdivision 8, is amended to read: 
209.16     Subd. 8.  [TACONITE PAYMENT AND OTHER REDUCTIONS.] (1) 
209.17  Reductions in levies pursuant to section 124.918, subdivision 1, 
209.18  and section 273.138, shall be made prior to the reductions in 
209.19  clause (2) A school district's levies shall be reduced according 
209.20  to section 298.28, subdivision 4a. 
209.21     (2) Notwithstanding any other law to the contrary, 
209.22  districts which received payments pursuant to sections 298.018; 
209.23  298.23 to 298.28, except an amount distributed under section 
209.24  298.28, subdivision 4, paragraph (c), clause (ii); 298.34 to 
209.25  298.39; 298.391 to 298.396; 298.405; and any law imposing a tax 
209.26  upon severed mineral values, or recognized revenue pursuant to 
209.27  section 477A.15; shall not include a portion of these aids in 
209.28  their permissible levies pursuant to those sections, but instead 
209.29  shall reduce the permissible levies authorized by this chapter 
209.30  and chapter 124A by the greater of the following: 
209.31     (a) an amount equal to 50 percent of the total dollar 
209.32  amount of the payments received pursuant to those sections or 
209.33  revenue recognized pursuant to section 477A.15 in the previous 
209.34  fiscal year; or 
209.35     (b) an amount equal to the total dollar amount of the 
209.36  payments received pursuant to those sections or revenue 
210.1   recognized pursuant to section 477A.15 in the previous fiscal 
210.2   year less the product of the same dollar amount of payments or 
210.3   revenue times the ratio of the maximum levy allowed the district 
210.4   under Minnesota Statutes 1986, sections 124A.03, subdivision 2, 
210.5   124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10, 
210.6   subdivision 3a, 124A.12, subdivision 3a, and 124A.14, 
210.7   subdivision 5a, to the total levy allowed the district under 
210.8   this section and Minnesota Statutes 1986, sections 124A.03, 
210.9   124A.06, subdivision 3a, 124A.08, subdivision 3a, 124A.10, 
210.10  subdivision 3a, 124A.12, subdivision 3a, 124A.14, subdivision 
210.11  5a, and 124A.20, subdivision 2, for levies certified in 1986. 
210.12     (3) No reduction pursuant to this subdivision shall reduce 
210.13  the levy made by the district pursuant to section 124A.23, to an 
210.14  amount less than the amount raised by a levy of a net tax rate 
210.15  of 6.82 percent times the adjusted net tax capacity for taxes 
210.16  payable in 1990 and thereafter of that district for the 
210.17  preceding year as determined by the commissioner.  The amount of 
210.18  any increased levy authorized by referendum pursuant to section 
210.19  124A.03, subdivision 2, shall not be reduced pursuant to this 
210.20  subdivision.  The amount of any levy authorized by section 
210.21  124.912, subdivision 1, to make payments for bonds issued and 
210.22  for interest thereon, shall not be reduced pursuant to this 
210.23  subdivision.  
210.24     (4) Before computing the reduction pursuant to this 
210.25  subdivision of the capital expenditure facilities levy 
210.26  authorized by section 124.243, the capital expenditure equipment 
210.27  levy authorized by section 124.244, the health and safety levy 
210.28  authorized by sections 124.83 and 124.91, subdivision 6, the 
210.29  commissioner shall ascertain from each affected school district 
210.30  the amount it proposes to levy under each section or 
210.31  subdivision.  The reduction shall be computed on the basis of 
210.32  the amount so ascertained. 
210.33     (5) Notwithstanding any law to the contrary, (2) Any 
210.34  amounts received by districts in any fiscal year pursuant to 
210.35  sections 298.018; 298.23 to 298.28; 298.34 to 298.39; 298.391 to 
210.36  298.396; 298.405; or any law imposing a tax on severed mineral 
211.1   values; and not deducted from general education aid pursuant to 
211.2   section 124A.035, subdivision 5, clause (2), under this section 
211.3   and not applied to reduce levies pursuant to this subdivision 
211.4   shall be paid by the district to the St. Louis county auditor in 
211.5   the following amount by March 15 of each year, the amount 
211.6   required to be subtracted from the previous fiscal year's 
211.7   general education aid pursuant to section 124A.035, subdivision 
211.8   5, which is in excess of the general education aid earned for 
211.9   that fiscal year.  The county auditor shall deposit any amounts 
211.10  received pursuant to this clause in the St. Louis county 
211.11  treasury for purposes of paying the taconite homestead credit as 
211.12  provided in section 273.135. 
211.13     Sec. 36.  Minnesota Statutes 1996, section 124A.03, 
211.14  subdivision 1g, is amended to read: 
211.15     Subd. 1g.  [REFERENDUM EQUALIZATION LEVY.] (a) For fiscal 
211.16  year 1996, a district's referendum equalization levy equals the 
211.17  district's referendum equalization revenue times the lesser of 
211.18  one or the ratio of the district's adjusted net tax capacity per 
211.19  actual pupil unit to 100 percent of the equalizing factor as 
211.20  defined in section 124A.02, subdivision 8. 
211.21     (b) For fiscal year years 1997 and thereafter through 
211.22  2000, a district's referendum equalization levy for a referendum 
211.23  levied against the referendum market value of all taxable 
211.24  property as defined in section 124A.02, subdivision 3b, equals 
211.25  the district's referendum equalization revenue times the lesser 
211.26  of one or the ratio of the district's referendum market value 
211.27  per actual pupil unit to $476,000. 
211.28     (c) (b) For fiscal year years 1997 and 
211.29  thereafter through 2000, a district's referendum equalization 
211.30  levy for a referendum levied against the net tax capacity of all 
211.31  taxable property equals the district's referendum equalization 
211.32  revenue times the lesser of one or the ratio of the district's 
211.33  adjusted net tax capacity per actual pupil unit to 100 percent 
211.34  of the equalizing factor for that year. 
211.35     (c) For fiscal years 2001 and later, a district's 
211.36  referendum equalization levy equals the district's referendum 
212.1   equalization revenue times the lesser of one or the ratio of the 
212.2   district's adjusted local tax capacity to the product of 
212.3   $476,000 times the ratio of the district's adjusted local tax 
212.4   capacity for assessment year 1998 to the district's referendum 
212.5   market value for assessment year 1998. 
212.6      Sec. 37.  [124A.235] [STATEWIDE UNIFORM GENERAL EDUCATION 
212.7   LEVY.] 
212.8      Subdivision 1.  [GENERAL EDUCATION LEVY CALCULATION.] A 
212.9   school district's general education levy equals the lesser of:  
212.10  (1) an amount equal to the district's adjusted education tax 
212.11  capacity; or (2) the sum of its revenue under chapters 124 and 
212.12  124A, excluding the revenue for debt service under section 
212.13  124.95 and for operating referenda under section 124A.03.  The 
212.14  general education levy shall be levied against each district's 
212.15  general education tax base. 
212.16     Subd. 2.  [GENERAL EDUCATION AID.] A school district's 
212.17  general education aid is the difference between its general 
212.18  education revenue computed under section 124A.22 and its levy 
212.19  established according to subdivision 1. 
212.20     Subd. 3.  [COMPUTATION OF TAX INCREMENT.] Notwithstanding 
212.21  any law to the contrary, the tax imposed under this section may 
212.22  not be used to compute the increment for a tax increment 
212.23  financing district.  
212.24     Subd. 4.  [RELATIONSHIP TO FISCAL DISPARITIES.] The tax 
212.25  imposed under this section shall not be subject to the 
212.26  provisions of chapters 276A and 473F. 
212.27     Sec. 38.  Minnesota Statutes 1996, section 124A.292, 
212.28  subdivision 2, is amended to read: 
212.29     Subd. 2.  [REVENUE.] Staff development incentive revenue is 
212.30  equal to the number of teachers at the site times $25.  Staff 
212.31  development incentive revenue is provided through state aid. 
212.32     Sec. 39.  Minnesota Statutes 1996, section 298.28, 
212.33  subdivision 4, is amended to read: 
212.34     Subd. 4.  [SCHOOL DISTRICTS; REFERENDUM AID.] (a) 27.5 
212.35  cents per taxable ton plus the increase provided in paragraph 
212.36  (d) must be allocated to qualifying school districts to be 
213.1   distributed, based upon the certification of the commissioner of 
213.2   revenue, under paragraphs (b) and (c). 
213.3      (b) 5.5 cents per taxable ton must be distributed to the 
213.4   school districts in which the lands from which taconite was 
213.5   mined or quarried were located or within which the concentrate 
213.6   was produced.  The distribution must be based on the 
213.7   apportionment formula prescribed in subdivision 2. 
213.8      (c)(i) 22 cents per taxable ton, less any amount 
213.9   distributed under paragraph (e), shall be distributed to a group 
213.10  of school districts comprised of those school districts in which 
213.11  the taconite was mined or quarried or the concentrate produced 
213.12  or in which there is a qualifying municipality as defined by 
213.13  section 273.134 in direct proportion to school district indexes 
213.14  as follows:  for each school district, its pupil units 
213.15  determined under section 124.17 for the prior school year shall 
213.16  be multiplied by the ratio of the average adjusted net tax 
213.17  capacity per pupil unit for school districts receiving aid under 
213.18  this clause as calculated pursuant to chapter 124A for the 
213.19  school year ending prior to distribution to the adjusted net tax 
213.20  capacity per pupil unit of the district.  Each district shall 
213.21  receive that portion of the distribution which its index bears 
213.22  to the sum of the indices for all school districts that receive 
213.23  the distributions.  
213.24     (ii) Notwithstanding clause (i), each school district that 
213.25  receives a distribution under sections 298.018; 298.23 to 
213.26  298.28, exclusive of any amount received under this clause; 
213.27  298.34 to 298.39; 298.391 to 298.396; 298.405; or any law 
213.28  imposing a tax on severed mineral values that is less than the 
213.29  amount of its levy reduction under section 124.918, subdivision 
213.30  8, for the second year prior to the year of the distribution 
213.31  shall receive a distribution equal to the difference; the amount 
213.32  necessary to make this payment shall be derived from 
213.33  proportionate reductions in the initial distribution to other 
213.34  school districts under clause (i).  
213.35     (d) Any school district described in paragraph (c) where a 
213.36  levy increase pursuant to section 124A.03, subdivision 2, is 
214.1   authorized by referendum, shall receive a distribution according 
214.2   to the following formula.  In 1994, the amount distributed per 
214.3   ton shall be equal to the amount per ton distributed in 1991 
214.4   under this paragraph increased in the same proportion as the 
214.5   increase between the fourth quarter of 1989 and the fourth 
214.6   quarter of 1992 in the implicit price deflator as defined in 
214.7   section 298.24, subdivision 1.  On July 15, 1995, and subsequent 
214.8   years, the increase over the amount established for the prior 
214.9   year shall be determined according to the increase in the 
214.10  implicit price deflator as provided in section 298.24, 
214.11  subdivision 1.  Each district shall receive the product of: 
214.12     (i) $175 times the pupil units identified in section 
214.13  124.17, subdivision 1, enrolled in the second previous year or 
214.14  the 1983-1984 school year, whichever is greater, less the 
214.15  product of 1.8 percent times the district's taxable net tax 
214.16  capacity in the second previous year; times 
214.17     (ii) the lesser of: 
214.18     (A) one, or 
214.19     (B) the ratio of the sum of the amount certified pursuant 
214.20  to section 124A.03, subdivision 1g, in the previous year, plus 
214.21  the amount certified pursuant to section 124A.03, subdivision 
214.22  1i, in the previous year, plus the referendum aid according to 
214.23  section 124A.03, subdivision 1h, for the current year, plus an 
214.24  amount equal to the reduction under section 124A.03, subdivision 
214.25  3b, to the product of 1.8 percent times the district's taxable 
214.26  net tax capacity in the second previous year. 
214.27     If the total amount provided by paragraph (d) is 
214.28  insufficient to make the payments herein required then the 
214.29  entitlement of $175 per pupil unit shall be reduced uniformly so 
214.30  as not to exceed the funds available.  Any amounts received by a 
214.31  qualifying school district in any fiscal year pursuant to 
214.32  paragraph (d) shall not be applied to reduce general education 
214.33  aid which the district receives pursuant to section 124A.23 or 
214.34  the permissible levies of the district.  Any amount remaining 
214.35  after the payments provided in this paragraph shall be paid to 
214.36  the commissioner of iron range resources and rehabilitation who 
215.1   shall deposit the same in the taconite environmental protection 
215.2   fund and the northeast Minnesota economic protection trust fund 
215.3   as provided in subdivision 11. 
215.4      For fiscal years 2001 and later, a school district's 
215.5   taconite referendum aid equals its taconite referendum aid for 
215.6   fiscal year 2000.  Each district receiving money according to 
215.7   this paragraph shall reserve $25 times the number of pupil units 
215.8   in the district.  It may use the money for early childhood 
215.9   programs or for outcome-based learning programs that enhance the 
215.10  academic quality of the district's curriculum.  The 
215.11  outcome-based learning programs must be approved by the 
215.12  commissioner of children, families, and learning. 
215.13     (e) There shall be distributed to any school district the 
215.14  amount which the school district was entitled to receive under 
215.15  section 298.32 in 1975.  
215.16     Sec. 40.  Minnesota Statutes 1996, section 298.28, is 
215.17  amended by adding a subdivision to read: 
215.18     Subd. 4a.  [SCHOOL DISTRICT LEVY REDUCTION.] For taxes 
215.19  payable in 2001 and later, a school district's levy reduction 
215.20  under section 124.918, subdivision 8, is equal to one-third of 
215.21  its reduction for taxes payable in 1998 times the ratio of the 
215.22  taxable tons in the current year to the taxable tons in payable 
215.23  year 1998. 
215.24     Sec. 41.  Minnesota Statutes 1996, section 298.28, is 
215.25  amended by adding a subdivision to read: 
215.26     Subd. 4b.  [SCHOOL DISTRICT AID REDUCTION.] A school 
215.27  district's taconite aid reduction to general education aid is 
215.28  equal to one-third of its aid reduction for fiscal year 2000 
215.29  times the ratio of the taxable tons in the current payable year 
215.30  to the taxable tons in the payable year 1998. 
215.31     Sec. 42.  [CHANGES TO SCHOOL DISTRICT LEVIES.] 
215.32     Any school levy programs created or amended after January 
215.33  1, 1997, are expired for revenue for fiscal years 2001 and 
215.34  later.  The state aid appropriation under Minnesota Statutes, 
215.35  section 124A.032, is increased by the amount of any levies 
215.36  eliminated under this section and that amount shall be paid to 
216.1   each school district in the same amount for the same purposes as 
216.2   the levy. 
216.3      Sec. 43.  [REPEALER.] 
216.4      (a) Minnesota Statutes 1996, sections 124.2131, subdivision 
216.5   3a; 124.2134; 124.225, subdivisions 1, 3a, 7a, 7b, 7d, 7e, 7f, 
216.6   8a, 8k, 8l, 8m, 9, 10, 13, 14, 15, 16, and 17; 124.226; 
216.7   124.2442; 124.2725, subdivisions 3, 4, 5, and 7; 124.2727, 
216.8   subdivisions 6b, 6c, and 9; 124.314, subdivision 2; 124.321; 
216.9   124.91, subdivision 4; 124.912, subdivision 2; 124A.029; 
216.10  124A.03, subdivisions 2a and 3b; 124A.0311; 124A.22, 
216.11  subdivisions 4a, 4b, 8a, 8b, 13d, and 13e; 124A.23, subdivisions 
216.12  1, 2, 3, and 4; 124A.26, subdivisions 2 and 3; 124A.292, 
216.13  subdivisions 3 and 4, are repealed for revenue for fiscal year 
216.14  2001.  
216.15     (b) Minnesota Statutes 1996, sections 273.1399; and 
216.16  469.1782, subdivision 1, are repealed for taxes payable and aids 
216.17  payable in 2000 and subsequent years. 
216.18     Sec. 44.  [EFFECTIVE DATE.] 
216.19     Sections 1 to 43 are effective for revenue for fiscal year 
216.20  2001. 
216.21                             ARTICLE 8
216.22                          STATE AID REFORM 
216.23     Section 1.  Minnesota Statutes 1996, section 273.1398, 
216.24  subdivision 6, is amended to read: 
216.25     Subd. 6.  [PAYMENT.] The commissioner shall certify the 
216.26  aids provided in subdivisions 2, 2b, 3, and 5 before September 1 
216.27  of the year preceding the distribution year to the county 
216.28  auditor of the affected local government.  The aids provided in 
216.29  subdivisions 2, 2b, 3, and 5 must be paid to local governments 
216.30  other than school districts at the times provided in section 
216.31  477A.015 for payment of local government aid to taxing 
216.32  jurisdictions, except that the first one-half payment of 
216.33  disparity reduction aid provided in subdivision 3 must be paid 
216.34  on or before August 31.  The disparity reduction credit provided 
216.35  in subdivision 4 must be paid to taxing jurisdictions other than 
216.36  school districts at the time provided in section 473H.10, 
217.1   subdivision 3.  Aids and Credit reimbursements to school 
217.2   districts must be certified to the commissioner of children, 
217.3   families, and learning and paid under section 273.1392.  Except 
217.4   for education districts and secondary cooperatives that receive 
217.5   revenue according to section 124.575, payment shall not be made 
217.6   to any taxing jurisdiction that has ceased to levy a property 
217.7   tax.  
217.8      Sec. 2.  Minnesota Statutes 1996, section 298.28, 
217.9   subdivision 2, is amended to read: 
217.10     Subd. 2.  [CITY OR TOWN WHERE QUARRIED OR PRODUCED.] 
217.11  4.5 6.75 cents per gross ton of merchantable iron ore 
217.12  concentrate, hereinafter referred to as "taxable ton," must be 
217.13  allocated to the city or town in the county in which the lands 
217.14  from which taconite was mined or quarried were located or within 
217.15  which the concentrate was produced.  If the mining, quarrying, 
217.16  and concentration, or different steps in either thereof are 
217.17  carried on in more than one taxing district, the commissioner 
217.18  shall apportion equitably the proceeds of the part of the tax 
217.19  going to cities and towns among such subdivisions upon the basis 
217.20  of attributing 40 percent of the proceeds of the tax to the 
217.21  operation of mining or quarrying the taconite, and the remainder 
217.22  to the concentrating plant and to the processes of 
217.23  concentration, and with respect to each thereof giving due 
217.24  consideration to the relative extent of such operations 
217.25  performed in each such taxing district.  The commissioner's 
217.26  order making such apportionment shall be subject to review by 
217.27  the tax court at the instance of any of the interested taxing 
217.28  districts, in the same manner as other orders of the 
217.29  commissioner. 
217.30     Sec. 3.  Minnesota Statutes 1996, section 298.28, 
217.31  subdivision 3, is amended to read: 
217.32     Subd. 3.  [CITIES; TOWNS.] (a) 12.5 18.75 cents per taxable 
217.33  ton, less any amount distributed under subdivision 8, and 
217.34  paragraph (b), must be allocated to the taconite municipal aid 
217.35  account to be distributed as provided in section 298.282. 
217.36     (b) An amount must be allocated to towns or cities that is 
218.1   annually certified by the county auditor of a county containing 
218.2   a taconite tax relief area within which there is (1) an 
218.3   organized township if, as of January 2, 1982, more than 75 
218.4   percent of the assessed valuation of the township consists of 
218.5   iron ore or (2) a city if, as of January 2, 1980, more than 75 
218.6   percent of the assessed valuation of the city consists of iron 
218.7   ore.  
218.8      (c) The amount allocated under paragraph (b) will be the 
218.9   portion of a township's or city's certified levy equal to the 
218.10  proportion of (1) the difference between 50 percent of January 
218.11  2, 1982, assessed value in the case of a township and 50 percent 
218.12  of the January 2, 1980, assessed value in the case of a city and 
218.13  its current assessed value to (2) the sum of its current 
218.14  assessed value plus the difference determined in (1), provided 
218.15  that the amount distributed shall not exceed $55 per capita in 
218.16  the case of a township or $75 per capita in the case of a city.  
218.17  For purposes of this limitation, population will be determined 
218.18  according to the 1980 decennial census conducted by the United 
218.19  States Bureau of the Census.  If the current assessed value of 
218.20  the township exceeds 50 percent of the township's January 2, 
218.21  1982, assessed value, or if the current assessed value of the 
218.22  city exceeds 50 percent of the city's January 2, 1980, assessed 
218.23  value, this paragraph shall not apply.  For purposes of this 
218.24  paragraph, "assessed value," when used in reference to years 
218.25  other than 1980 or 1982, means, for distributions for production 
218.26  year 1989, production taxes payable in 1990, the appropriate net 
218.27  tax capacities multiplied by 8.2 and for distributions for 
218.28  production year 1990 and thereafter, production taxes payable in 
218.29  1991 and thereafter, the appropriate net tax capacities 
218.30  multiplied by 10.2. 
218.31     Sec. 4.  Minnesota Statutes 1996, section 298.28, 
218.32  subdivision 5, is amended to read: 
218.33     Subd. 5.  [COUNTIES.] (a) 16.5 24.75 cents per taxable ton 
218.34  is allocated to counties to be distributed, based upon 
218.35  certification by the commissioner of revenue, under paragraphs 
218.36  (b) to (d). 
219.1      (b) 13 19.5 cents per taxable ton shall be distributed to 
219.2   the county in which the taconite is mined or quarried or in 
219.3   which the concentrate is produced, less any amount which is to 
219.4   be distributed pursuant to paragraph (c).  The apportionment 
219.5   formula prescribed in subdivision 2 is the basis for the 
219.6   distribution. 
219.7      (c) If an electric power plant owned by and providing the 
219.8   primary source of power for a taxpayer mining and concentrating 
219.9   taconite is located in a county other than the county in which 
219.10  the mining and the concentrating processes are conducted, one 
219.11  cent 1.5 cents per taxable ton of the tax distributed to the 
219.12  counties pursuant to paragraph (b) and imposed on and collected 
219.13  from such taxpayer shall be paid to the county in which the 
219.14  power plant is located. 
219.15     (d) 3.5 5.25 cents per taxable ton shall be paid to the 
219.16  county from which the taconite was mined, quarried or 
219.17  concentrated to be deposited in the county road and bridge 
219.18  fund.  If the mining, quarrying and concentrating, or separate 
219.19  steps in any of those processes are carried on in more than one 
219.20  county, the commissioner shall follow the apportionment formula 
219.21  prescribed in subdivision 2. 
219.22     Sec. 5.  Minnesota Statutes 1996, section 477A.011, is 
219.23  amended by adding a subdivision to read: 
219.24     Subd. 3d.  [POVERTY ADJUSTED POPULATION.] "Poverty adjusted 
219.25  population" means the sum of (1) the county's population, and 
219.26  (2) three times the average unduplicated number of persons who 
219.27  receive benefits per month under general assistance, medical 
219.28  assistance, or AFDC, or its successor program, as determined 
219.29  under section 256E.06. 
219.30     Sec. 6.  Minnesota Statutes 1996, section 477A.011, 
219.31  subdivision 20, is amended to read: 
219.32     Subd. 20.  [CITY NET TAX CAPACITY.] "City Net tax capacity" 
219.33  for a local taxing jurisdiction means (1) the net tax capacity 
219.34  computed using the net tax capacity rates in section 273.13, and 
219.35  the market values for taxes payable in the year prior to the aid 
219.36  distribution plus (2) a city's jurisdiction's fiscal disparities 
220.1   distribution tax capacity under section 276A.06, subdivision 2, 
220.2   paragraph (b), or 473F.08, subdivision 2, paragraph (b), for 
220.3   taxes payable in the year prior to that for which aids are being 
220.4   calculated.  The market value utilized in computing city a 
220.5   jurisdiction's net tax capacity shall be reduced by the sum of 
220.6   (1) a city's the jurisdiction's market value of commercial 
220.7   industrial property as defined in section 276A.01, subdivision 
220.8   3, or 473F.02, subdivision 3, multiplied by the ratio determined 
220.9   pursuant to section 276A.06, subdivision 2, paragraph (a), or 
220.10  473F.08, subdivision 2, paragraph (a), (2) the market value of 
220.11  the captured value of tax increment financing districts as 
220.12  defined in section 469.177, subdivision 2, and (3) the market 
220.13  value of transmission lines deducted from a city's the 
220.14  jurisdiction's total net tax capacity under section 273.425.  
220.15  The county or city net tax capacity will be computed using 
220.16  equalized market values.  
220.17     Sec. 7.  Minnesota Statutes 1996, section 477A.011, 
220.18  subdivision 35, is amended to read: 
220.19     Subd. 35.  [TAX EFFORT RATE.] "Tax effort rate" for a type 
220.20  of taxing jurisdiction means the sum of the net levy for 
220.21  all cities jurisdictions of that type divided by the sum of the 
220.22  city net tax capacity for all cities jurisdictions of that type. 
220.23  For aids payable in 2000 only, the "tax effort rate" for cities 
220.24  means (1) the sum of the net levy for all cities plus the 1999 
220.25  homestead and agricultural credit aid for all cities, divided by 
220.26  (2) the sum of the net tax capacity for all cities.  For 
220.27  purposes of this section, "net levy" means the city levy, after 
220.28  all adjustments, used for calculating the local tax rate under 
220.29  section 275.08 for taxes payable in the year prior to the aid 
220.30  distribution.  The fiscal disparity distribution levy under 
220.31  chapter 276A or 473F is included in net levy. 
220.32     Sec. 8.  Minnesota Statutes 1996, section 477A.011, is 
220.33  amended by adding a subdivision to read: 
220.34     Subd. 38.  [ACRES.] The number of acres in a township or a 
220.35  county are the number of acres of land in the jurisdiction, 
220.36  according to the most recent federal census, adjusted for any 
221.1   annexations and detachments as provided under section 477A.014, 
221.2   subdivision 1. 
221.3      Sec. 9.  Minnesota Statutes 1996, section 477A.011, is 
221.4   amended by adding a subdivision to read: 
221.5      Subd. 39.  [AGRICULTURAL NET TAX CAPACITY.] The 
221.6   "agricultural net tax capacity" for a township is equal to the 
221.7   net tax capacity for all property in the township that is 
221.8   classified as class 2 under section 273.13, subdivision 23, 
221.9   excluding any airport property, plus any class 1 property under 
221.10  section 273.13, subdivision 22, that is part of an agricultural 
221.11  homestead. 
221.12     Sec. 10.  [477A.0125] [COUNTY AID DISTRIBUTIONS.] 
221.13     Subdivision 1.  [FORMULA AMOUNT.] In calendar year 2000 and 
221.14  subsequent years, each county shall receive an aid amount equal 
221.15  to the product of (1) an aid percentage, and (2) the sum of (i) 
221.16  its poverty weighted population multiplied by 145; and (ii) its 
221.17  acres of land multiplied by .40; minus its net tax capacity 
221.18  multiplied by 50 percent of the county tax effort rate.  The aid 
221.19  percentage shall be calculated by the department of revenue so 
221.20  that the total aid paid to counties under this section equals 
221.21  the amount available for distribution under section 477A.03. 
221.22     Subd. 2.  [AID LIMITATION.] (a) For aids payable in 2000, 
221.23  the amount of aid a county receives under this section shall not 
221.24  exceed an amount equal to (1) its 1997 homestead and 
221.25  agricultural credit aid, plus (2) ten percent of its net levy 
221.26  for taxes payable in 1997. 
221.27     (b) For aids payable in 2001 and subsequent years, the 
221.28  amount of aid a county receives under this section shall not 
221.29  exceed an amount equal to (1) its 1997 homestead and 
221.30  agricultural credit aid increased by the percentage increase in 
221.31  total aid under this section for the current aid payable year 
221.32  compared to the total aid under this section for 2000, plus (2) 
221.33  a percentage of its net levy for taxes payable in 1997 equal to 
221.34  ten percent plus one percent for each aid payable year since 
221.35  2000. 
221.36     Sec. 11.  Minnesota Statutes 1996, section 477A.013, 
222.1   subdivision 1, is amended to read: 
222.2      Subdivision 1.  [TOWNS.] In 1994 each town that had levied 
222.3   for taxes payable in the prior year a local tax rate of at least 
222.4   .008 shall receive a distribution equal to the amount it 
222.5   received in 1993 under this section before any nonpermanent 
222.6   reductions made under section 477A.0132.  In 1995 each town that 
222.7   had levied for taxes payable in 1993 a local tax rate of at 
222.8   least .008 shall receive a distribution equal to 102 percent of 
222.9   the amount it received in 1994 under this section before any 
222.10  increases or reductions under sections 16A.711, subdivision 5, 
222.11  and 477A.0132.  In 1996 and subsequent years each town that had 
222.12  levied for taxes payable in 1993 a local tax rate of at least 
222.13  .008 shall receive a distribution equal to the amount it 
222.14  received in the previous year under this section, adjusted for 
222.15  inflation as provided under section 477A.03, subdivision 3. In 
222.16  calendar year 2000 and subsequent years, the amount of aid that 
222.17  a town receives is equal to (1) the aid factor multiplied by the 
222.18  number of acres in the town, less (2) 0.10 multiplied by the 
222.19  difference between the town's total net tax capacity and its 
222.20  agricultural net tax capacity.  In 2000, the aid factor is $1.  
222.21  In 2001 and subsequent years, the aid factor is the aid factor 
222.22  from the previous year adjusted for inflation as provided under 
222.23  section 477A.03, subdivision 3.  If the town's agricultural net 
222.24  tax capacity is less than 40 percent of its total net tax 
222.25  capacity, the amount of aid it receives is zero.  No town may 
222.26  have an aid amount less than zero. 
222.27     Sec. 12.  Minnesota Statutes 1996, section 477A.03, 
222.28  subdivision 2, is amended to read: 
222.29     Subd. 2.  [ANNUAL APPROPRIATION.] A sum sufficient to 
222.30  discharge the duties imposed by sections 477A.011 to 477A.014 is 
222.31  annually appropriated from the general fund to the commissioner 
222.32  of revenue.  For aids payable in 1996 2000 and thereafter, the 
222.33  total aids paid under sections 477A.013, subdivision 9, 
222.34  477A.0121, and 477A.0122 are the amounts certified to be paid in 
222.35  the previous year, adjusted for inflation as provided under 
222.36  subdivision 3.  Aid payments to counties under section 477A.0121 
223.1   are limited to $20,265,000 in 1996 477A.0125 are limited to 
223.2   $200,000,000 in 2000.  Aid payments to counties under section 
223.3   477A.0121 are limited to $27,571,625 in 1997.  For aid payable 
223.4   in 1998 2001 and thereafter, the total aids paid under section 
223.5   477A.0121 477A.0125 are the amounts certified to be paid in the 
223.6   previous year, adjusted for inflation as provided under 
223.7   subdivision 3. 
223.8      Sec. 13.  [477A.20] [STATE-OWNED BUILDINGS; PAYMENTS IN 
223.9   LIEU.] 
223.10     Subdivision 1.  [STATE-OWNED BUILDINGS.] For purposes of 
223.11  this section, "state-owned buildings" means all buildings owned 
223.12  or leased by the state of Minnesota, the University of 
223.13  Minnesota, state universities, community colleges, and technical 
223.14  colleges which are currently exempt from local property taxes, 
223.15  with the following exceptions: 
223.16     (1) buildings that have less than 2,000 square feet of 
223.17  finished floor space, and 
223.18     (2) buildings owned or leased and used by the department of 
223.19  natural resources for purposes other than as a state or district 
223.20  headquarters. 
223.21     Subd. 2.  [EDUCATIONAL AND CORRECTIONAL BUILDINGS.] For 
223.22  purposes of this section, "educational and correctional 
223.23  buildings" means correctional facilities and buildings used for 
223.24  higher education purposes. 
223.25     Subd. 3.  [IN LIEU PAYMENT.] (a) A city shall receive a 
223.26  payment in lieu of property taxes for state owned buildings in 
223.27  the following amount, subject to the limits imposed in 
223.28  paragraphs (b) and (c).  The in lieu payment shall be equal to 
223.29  $.25 for each square foot of finished floor space in state-owned 
223.30  educational and correctional buildings plus $.75 for each square 
223.31  foot of finished floor space for all other state owned buildings 
223.32  located within the city.  The department of administration will 
223.33  provide the square footage for all qualifying buildings to the 
223.34  commissioner of revenue to allow calculation of this payment. 
223.35     (b) No city may receive an in lieu payment greater than $15 
223.36  per capita, based on the most recent city population estimate, 
224.1   as defined in section 477A.011, subdivision 3. 
224.2      (c) If the total amount of finished floor space in 
224.3   qualifying state owned buildings in a city is less than 8,000 
224.4   square feet, the in lieu payment shall be zero. 
224.5      Subd. 4.  [APPROPRIATION.] A sum sufficient to discharge 
224.6   the duties imposed under this section is annually appropriated 
224.7   from the general fund to the commissioner of revenue.  The 
224.8   payments shall be made in the manner in prescribed in section 
224.9   477A.014, subdivision 1.  The payments shall be made on the 
224.10  dates prescribed in section 477A.015. 
224.11     Sec. 14.  [TIF GRANTS; APPROPRIATIONS.] 
224.12     (a) The commissioner of revenue shall pay grants to 
224.13  municipalities for deficits in tax increment financing districts 
224.14  caused by the changes in class rates, the reduction of school 
224.15  district taxes, and the imposition of a state tax that is not 
224.16  used in determining tax increment under this act.  
224.17  Municipalities must submit applications for the grants in a form 
224.18  prescribed by the commissioner by no later than March 1 for 
224.19  taxes payable during the calendar year.  The maximum grant 
224.20  equals the lesser of: 
224.21     (1) the reduction in the tax increment financing district's 
224.22  revenues derived from increment resulting from the provisions of 
224.23  this act; and 
224.24     (2) the municipality's total available tax increments, 
224.25  including those from previous years, less the amount due during 
224.26  the calendar year to pay bonds issued and sold before and 
224.27  binding contracts entered into before the day following final 
224.28  enactment of this act. 
224.29     (b) The amount necessary to make the grants is appropriated 
224.30  to the commissioner of revenue from the general fund for 
224.31  purposes of this section. 
224.32     Sec. 15.  [REPEALER.] 
224.33     Minnesota Statutes 1996, sections 273.1398, subdivisions 2, 
224.34  2c, 2d, 3, and 3a; and 273.166, are repealed. 
224.35     Sec. 16.  [EFFECTIVE DATE.] 
224.36     This article is effective for aids payable in 2000 and 
225.1   subsequent years. 
225.2                              ARTICLE 9
225.3                      INCOME AND CORPORATE TAXES
225.4      Section 1.  Minnesota Statutes 1996, section 270B.02, is 
225.5   amended by adding a subdivision to read: 
225.6      Subd. 6.  [CLIENT LISTS; THIRD-PARTY BULK FILERS.] Client 
225.7   lists required under section 290.92, subdivision 30, are 
225.8   classified as private data on individuals or nonpublic data, as 
225.9   defined in section 13.02, subdivisions 9 and 12. 
225.10     Sec. 2.  Minnesota Statutes 1996, section 289A.26, 
225.11  subdivision 2, is amended to read: 
225.12     Subd. 2.  [AMOUNT AND TIME FOR PAYMENT OF INSTALLMENTS.] 
225.13  The estimated tax payment required under subdivision 1 must be 
225.14  paid in four equal installments on or before the 15th day of the 
225.15  third fourth, sixth, ninth, and 12th month of the taxable year.  
225.16     Sec. 3.  Minnesota Statutes 1996, section 289A.26, 
225.17  subdivision 3, is amended to read: 
225.18     Subd. 3.  [SHORT TAXABLE YEAR.] (a) An entity with a short 
225.19  taxable year of less than 12 months, but at least four months, 
225.20  must pay estimated tax in equal installments on or before the 
225.21  15th day of the third fourth, sixth, ninth, and final month of 
225.22  the short taxable year, to the extent applicable based on the 
225.23  number of months in the short taxable year.  
225.24     (b) An entity is not required to make estimated tax 
225.25  payments for a short taxable year unless its tax liability 
225.26  before the first day of the last month of the taxable year can 
225.27  reasonably be expected to exceed $500.  
225.28     (c) No payment is required for a short taxable year of less 
225.29  than four months. 
225.30     Sec. 4.  Minnesota Statutes 1996, section 289A.26, 
225.31  subdivision 6, is amended to read: 
225.32     Subd. 6.  [PERIOD OF UNDERPAYMENT.] The period of the 
225.33  underpayment runs from the date the installment was required to 
225.34  be paid to the earlier of the following dates: 
225.35     (1) the 15th day of the third fourth month following the 
225.36  close of the taxable year for corporations, and the 15th day of 
226.1   the fifth month following the close of the taxable year for 
226.2   entities subject to tax under section 290.05, subdivision 3; or 
226.3      (2) with respect to any part of the underpayment, the date 
226.4   on which that part is paid.  For purposes of this clause, a 
226.5   payment of estimated tax shall be credited against unpaid 
226.6   required installments in the order in which those installments 
226.7   are required to be paid. 
226.8      Sec. 5.  Minnesota Statutes 1996, section 289A.26, 
226.9   subdivision 7, is amended to read: 
226.10     Subd. 7.  [REQUIRED INSTALLMENTS.] (a) Except as otherwise 
226.11  provided in this subdivision, the amount of a required 
226.12  installment is 25 percent of the required annual payment. 
226.13     (b) Except as otherwise provided in this subdivision, the 
226.14  term "required annual payment" means the lesser of: 
226.15     (1) 100 percent of the tax shown on the return for the 
226.16  taxable year, or, if no return is filed, 100 percent of the tax 
226.17  for that year; or 
226.18     (2) 100 percent of the tax shown on the return of the 
226.19  entity for the preceding taxable year provided the return was 
226.20  for a full 12-month period, showed a liability, and was filed by 
226.21  the entity. 
226.22     (c) Except for determining the first required installment 
226.23  for any taxable year, paragraph (b), clause (2), does not apply 
226.24  in the case of a large corporation.  The term "large 
226.25  corporation" means a corporation or any predecessor corporation 
226.26  that had taxable net income of $1,000,000 or more for any 
226.27  taxable year during the testing period.  The term "testing 
226.28  period" means the three taxable years immediately preceding the 
226.29  taxable year involved.  A reduction allowed to a large 
226.30  corporation for the first installment that is allowed by 
226.31  applying paragraph (b), clause (2), must be recaptured by 
226.32  increasing the next required installment by the amount of the 
226.33  reduction. 
226.34     (d) In the case of a required installment, if the 
226.35  corporation establishes that the annualized income installment 
226.36  is less than the amount determined in paragraph (a), the amount 
227.1   of the required installment is the annualized income installment 
227.2   and the recapture of previous quarters' reductions allowed by 
227.3   this paragraph must be recovered by increasing later required 
227.4   installments to the extent the reductions have not previously 
227.5   been recovered. 
227.6      (e) The "annualized income installment" is the excess, if 
227.7   any, of: 
227.8      (1) an amount equal to the applicable percentage of the tax 
227.9   for the taxable year computed by placing on an annualized basis 
227.10  the taxable income: 
227.11     (i) for the first two three months of the taxable year, in 
227.12  the case of the first required installment; 
227.13     (ii) for the first two three months or for the first five 
227.14  months of the taxable year, in the case of the second required 
227.15  installment; 
227.16     (iii) for the first six months or for the first eight 
227.17  months of the taxable year, in the case of the third required 
227.18  installment; and 
227.19     (iv) for the first nine months or for the first 11 months 
227.20  of the taxable year, in the case of the fourth required 
227.21  installment, over 
227.22     (2) the aggregate amount of any prior required installments 
227.23  for the taxable year.  
227.24     (3) For the purpose of this paragraph, the annualized 
227.25  income shall be computed by placing on an annualized basis the 
227.26  taxable income for the year up to the end of the month preceding 
227.27  the due date for the quarterly payment multiplied by 12 and 
227.28  dividing the resulting amount by the number of months in the 
227.29  taxable year (2, 5, 6, 8, 9, or 11 as the case may be) referred 
227.30  to in clause (1). 
227.31     (4) The "applicable percentage" used in clause (1) is: 
227.32  For the following                 The applicable
227.33  required installments:            percentage is:
227.34          1st                               25 
227.35          2nd                               50  
227.36          3rd                               75  
228.1           4th                              100   
228.2      (f)(1) If this paragraph applies, the amount determined for 
228.3   any installment must be determined in the following manner: 
228.4      (i) take the taxable income for the months during the 
228.5   taxable year preceding the filing month; 
228.6      (ii) divide that amount by the base period percentage for 
228.7   the months during the taxable year preceding the filing month; 
228.8      (iii) determine the tax on the amount determined under item 
228.9   (ii); and 
228.10     (iv) multiply the tax computed under item (iii) by the base 
228.11  period percentage for the filing month and the months during the 
228.12  taxable year preceding the filing month.  
228.13     (2) For purposes of this paragraph: 
228.14     (i) the "base period percentage" for a period of months is 
228.15  the average percent that the taxable income for the 
228.16  corresponding months in each of the three preceding taxable 
228.17  years bears to the taxable income for the three preceding 
228.18  taxable years; 
228.19     (ii) the term "filing month" means the month in which the 
228.20  installment is required to be paid; 
228.21     (iii) this paragraph only applies if the base period 
228.22  percentage for any six consecutive months of the taxable year 
228.23  equals or exceeds 70 percent; and 
228.24     (iv) the commissioner may provide by rule for the 
228.25  determination of the base period percentage in the case of 
228.26  reorganizations, new corporations, and other similar 
228.27  circumstances.  
228.28     (3) In the case of a required installment determined under 
228.29  this paragraph, if the entity determines that the installment is 
228.30  less than the amount determined in paragraph (a), the amount of 
228.31  the required installment is the amount determined under this 
228.32  paragraph and the recapture of previous quarters' reductions 
228.33  allowed by this paragraph must be recovered by increasing later 
228.34  required installments to the extent the reductions have not 
228.35  previously been recovered.  
228.36     Sec. 6.  Minnesota Statutes 1996, section 290.01, 
229.1   subdivision 19b, is amended to read: 
229.2      Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
229.3   individuals, estates, and trusts, there shall be subtracted from 
229.4   federal taxable income: 
229.5      (1) interest income on obligations of any authority, 
229.6   commission, or instrumentality of the United States to the 
229.7   extent includable in taxable income for federal income tax 
229.8   purposes but exempt from state income tax under the laws of the 
229.9   United States; 
229.10     (2) if included in federal taxable income, the amount of 
229.11  any overpayment of income tax to Minnesota or to any other 
229.12  state, for any previous taxable year, whether the amount is 
229.13  received as a refund or as a credit to another taxable year's 
229.14  income tax liability; 
229.15     (3) the amount paid to others not to exceed $650 for each 
229.16  dependent in grades kindergarten to 6 and $1,000 for each 
229.17  dependent in grades 7 to 12, for tuition, textbooks, and 
229.18  transportation of each dependent in attending an elementary or 
229.19  secondary school situated in Minnesota, North Dakota, South 
229.20  Dakota, Iowa, or Wisconsin, wherein a resident of this state may 
229.21  legally fulfill the state's compulsory attendance laws, which is 
229.22  not operated for profit, and which adheres to the provisions of 
229.23  the Civil Rights Act of 1964 and chapter 363.  As used in this 
229.24  clause, "textbooks" includes books and other instructional 
229.25  materials and equipment used in elementary and secondary schools 
229.26  in teaching only those subjects legally and commonly taught in 
229.27  public elementary and secondary schools in this state.  
229.28  "Textbooks" does not include instructional books and materials 
229.29  used in the teaching of religious tenets, doctrines, or worship, 
229.30  the purpose of which is to instill such tenets, doctrines, or 
229.31  worship, nor does it include books or materials for, or 
229.32  transportation to, extracurricular activities including sporting 
229.33  events, musical or dramatic events, speech activities, driver's 
229.34  education, or similar programs.  In order to qualify for the 
229.35  subtraction under this clause the taxpayer must elect to itemize 
229.36  deductions under section 63(e) of the Internal Revenue Code; 
230.1      (4) to the extent included in federal taxable income, 
230.2   distributions from a qualified governmental pension plan, an 
230.3   individual retirement account, simplified employee pension, or 
230.4   qualified plan covering a self-employed person that represent a 
230.5   return of contributions that were included in Minnesota gross 
230.6   income in the taxable year for which the contributions were made 
230.7   but were deducted or were not included in the computation of 
230.8   federal adjusted gross income.  The distribution shall be 
230.9   allocated first to return of contributions until the 
230.10  contributions included in Minnesota gross income have been 
230.11  exhausted.  This subtraction applies only to contributions made 
230.12  in a taxable year prior to 1985; 
230.13     (5) income as provided under section 290.0802; 
230.14     (6) the amount of unrecovered accelerated cost recovery 
230.15  system deductions allowed under subdivision 19g; 
230.16     (7) to the extent included in federal adjusted gross 
230.17  income, income realized on disposition of property exempt from 
230.18  tax under section 290.491; 
230.19     (8) to the extent not deducted in determining federal 
230.20  taxable income, the amount paid for health insurance of 
230.21  self-employed individuals as determined under section 162(l) of 
230.22  the Internal Revenue Code, except that the 25 percent limit does 
230.23  not apply.  If the taxpayer deducted insurance payments under 
230.24  section 213 of the Internal Revenue Code of 1986, the 
230.25  subtraction under this clause must be reduced by the lesser of: 
230.26     (i) the total itemized deductions allowed under section 
230.27  63(d) of the Internal Revenue Code, less state, local, and 
230.28  foreign income taxes deductible under section 164 of the 
230.29  Internal Revenue Code and the standard deduction under section 
230.30  63(c) of the Internal Revenue Code; or 
230.31     (ii) the lesser of (A) the amount of insurance qualifying 
230.32  as "medical care" under section 213(d) of the Internal Revenue 
230.33  Code to the extent not deducted under section 162(1) of the 
230.34  Internal Revenue Code or excluded from income or (B) the total 
230.35  amount deductible for medical care under section 213(a); and 
230.36     (9) the exemption amount allowed under Laws 1995, chapter 
231.1   255, article 3, section 2, subdivision 3; and 
231.2      (10) to the extent included in federal taxable income, 
231.3   postservice benefits for youth community service under section 
231.4   121.707 for volunteer service under United States Code, title 
231.5   42, section 5011(d), as amended. 
231.6      Sec. 7.  Minnesota Statutes 1996, section 290.01, 
231.7   subdivision 19c, is amended to read: 
231.8      Subd. 19c.  [CORPORATIONS; ADDITIONS TO FEDERAL TAXABLE 
231.9   INCOME.] For corporations, there shall be added to federal 
231.10  taxable income: 
231.11     (1) the amount of any deduction taken for federal income 
231.12  tax purposes for income, excise, or franchise taxes based on net 
231.13  income or related minimum taxes paid by the corporation to 
231.14  Minnesota, another state, a political subdivision of another 
231.15  state, the District of Columbia, or any foreign country or 
231.16  possession of the United States; 
231.17     (2) interest not subject to federal tax upon obligations 
231.18  of:  the United States, its possessions, its agencies, or its 
231.19  instrumentalities; the state of Minnesota or any other state, 
231.20  any of its political or governmental subdivisions, any of its 
231.21  municipalities, or any of its governmental agencies or 
231.22  instrumentalities; the District of Columbia; or Indian tribal 
231.23  governments; 
231.24     (3) exempt-interest dividends received as defined in 
231.25  section 852(b)(5) of the Internal Revenue Code; 
231.26     (4) the amount of any windfall profits tax deducted under 
231.27  section 164 or 471 of the Internal Revenue Code; 
231.28     (5) the amount of any net operating loss deduction taken 
231.29  for federal income tax purposes under section 172 or 832(c)(10) 
231.30  of the Internal Revenue Code or operations loss deduction under 
231.31  section 810 of the Internal Revenue Code; 
231.32     (6) the amount of any special deductions taken for federal 
231.33  income tax purposes under sections 241 to 247 of the Internal 
231.34  Revenue Code; 
231.35     (7) losses from the business of mining, as defined in 
231.36  section 290.05, subdivision 1, clause (a), that are not subject 
232.1   to Minnesota income tax; 
232.2      (8) the amount of any capital losses deducted for federal 
232.3   income tax purposes under sections 1211 and 1212 of the Internal 
232.4   Revenue Code; 
232.5      (9) the amount of any charitable contributions deducted for 
232.6   federal income tax purposes under section 170 of the Internal 
232.7   Revenue Code; 
232.8      (10) the exempt foreign trade income of a foreign sales 
232.9   corporation under sections 921(a) and 291 of the Internal 
232.10  Revenue Code; 
232.11     (11) the amount of percentage depletion deducted under 
232.12  sections 611 through 614 and 291 of the Internal Revenue Code; 
232.13     (12) for certified pollution control facilities placed in 
232.14  service in a taxable year beginning before December 31, 1986, 
232.15  and for which amortization deductions were elected under section 
232.16  169 of the Internal Revenue Code of 1954, as amended through 
232.17  December 31, 1985, the amount of the amortization deduction 
232.18  allowed in computing federal taxable income for those 
232.19  facilities; and 
232.20     (13) the amount of any deemed dividend from a foreign 
232.21  operating corporation determined pursuant to section 290.17, 
232.22  subdivision 4, paragraph (g); and 
232.23     (14) the amount of any environmental tax paid under section 
232.24  59A of the Internal Revenue Code. 
232.25     Sec. 8.  Minnesota Statutes 1996, section 290.01, 
232.26  subdivision 19d, is amended to read: 
232.27     Subd. 19d.  [CORPORATIONS; MODIFICATIONS DECREASING FEDERAL 
232.28  TAXABLE INCOME.] For corporations, there shall be subtracted 
232.29  from federal taxable income after the increases provided in 
232.30  subdivision 19c:  
232.31     (1) the amount of foreign dividend gross-up added to gross 
232.32  income for federal income tax purposes under section 78 of the 
232.33  Internal Revenue Code; 
232.34     (2) the amount of salary expense not allowed for federal 
232.35  income tax purposes due to claiming the federal jobs credit 
232.36  under section 51 of the Internal Revenue Code; 
233.1      (3) any dividend (not including any distribution in 
233.2   liquidation) paid within the taxable year by a national or state 
233.3   bank to the United States, or to any instrumentality of the 
233.4   United States exempt from federal income taxes, on the preferred 
233.5   stock of the bank owned by the United States or the 
233.6   instrumentality; 
233.7      (4) amounts disallowed for intangible drilling costs due to 
233.8   differences between this chapter and the Internal Revenue Code 
233.9   in taxable years beginning before January 1, 1987, as follows: 
233.10     (i) to the extent the disallowed costs are represented by 
233.11  physical property, an amount equal to the allowance for 
233.12  depreciation under Minnesota Statutes 1986, section 290.09, 
233.13  subdivision 7, subject to the modifications contained in 
233.14  subdivision 19e; and 
233.15     (ii) to the extent the disallowed costs are not represented 
233.16  by physical property, an amount equal to the allowance for cost 
233.17  depletion under Minnesota Statutes 1986, section 290.09, 
233.18  subdivision 8; 
233.19     (5) the deduction for capital losses pursuant to sections 
233.20  1211 and 1212 of the Internal Revenue Code, except that: 
233.21     (i) for capital losses incurred in taxable years beginning 
233.22  after December 31, 1986, capital loss carrybacks shall not be 
233.23  allowed; 
233.24     (ii) for capital losses incurred in taxable years beginning 
233.25  after December 31, 1986, a capital loss carryover to each of the 
233.26  15 taxable years succeeding the loss year shall be allowed; 
233.27     (iii) for capital losses incurred in taxable years 
233.28  beginning before January 1, 1987, a capital loss carryback to 
233.29  each of the three taxable years preceding the loss year, subject 
233.30  to the provisions of Minnesota Statutes 1986, section 290.16, 
233.31  shall be allowed; and 
233.32     (iv) for capital losses incurred in taxable years beginning 
233.33  before January 1, 1987, a capital loss carryover to each of the 
233.34  five taxable years succeeding the loss year to the extent such 
233.35  loss was not used in a prior taxable year and subject to the 
233.36  provisions of Minnesota Statutes 1986, section 290.16, shall be 
234.1   allowed; 
234.2      (6) an amount for interest and expenses relating to income 
234.3   not taxable for federal income tax purposes, if (i) the income 
234.4   is taxable under this chapter and (ii) the interest and expenses 
234.5   were disallowed as deductions under the provisions of section 
234.6   171(a)(2), 265 or 291 of the Internal Revenue Code in computing 
234.7   federal taxable income; 
234.8      (7) in the case of mines, oil and gas wells, other natural 
234.9   deposits, and timber for which percentage depletion was 
234.10  disallowed pursuant to subdivision 19c, clause (11), a 
234.11  reasonable allowance for depletion based on actual cost.  In the 
234.12  case of leases the deduction must be apportioned between the 
234.13  lessor and lessee in accordance with rules prescribed by the 
234.14  commissioner.  In the case of property held in trust, the 
234.15  allowable deduction must be apportioned between the income 
234.16  beneficiaries and the trustee in accordance with the pertinent 
234.17  provisions of the trust, or if there is no provision in the 
234.18  instrument, on the basis of the trust's income allocable to 
234.19  each; 
234.20     (8) for certified pollution control facilities placed in 
234.21  service in a taxable year beginning before December 31, 1986, 
234.22  and for which amortization deductions were elected under section 
234.23  169 of the Internal Revenue Code of 1954, as amended through 
234.24  December 31, 1985, an amount equal to the allowance for 
234.25  depreciation under Minnesota Statutes 1986, section 290.09, 
234.26  subdivision 7; 
234.27     (9) the amount included in federal taxable income 
234.28  attributable to the credits provided in Minnesota Statutes 1986, 
234.29  section 273.1314, subdivision 9, or Minnesota Statutes, section 
234.30  469.171, subdivision 6; 
234.31     (10) amounts included in federal taxable income that are 
234.32  due to refunds of income, excise, or franchise taxes based on 
234.33  net income or related minimum taxes paid by the corporation to 
234.34  Minnesota, another state, a political subdivision of another 
234.35  state, the District of Columbia, or a foreign country or 
234.36  possession of the United States to the extent that the taxes 
235.1   were added to federal taxable income under section 290.01, 
235.2   subdivision 19c, clause (1), in a prior taxable year; 
235.3      (11) the following percentage 80 percent of royalties, 
235.4   fees, or other like income accrued or received from a foreign 
235.5   operating corporation or a foreign corporation which is part of 
235.6   the same unitary business as the receiving corporation: 
235.7         Taxable Year 
235.8         Beginning After .......... Percentage 
235.9         December 31, 1988 ........ 50 percent 
235.10        December 31, 1990 ........ 80 percent;    
235.11     (12) income or gains from the business of mining as defined 
235.12  in section 290.05, subdivision 1, clause (a), that are not 
235.13  subject to Minnesota franchise tax; 
235.14     (13) the amount of handicap access expenditures in the 
235.15  taxable year which are not allowed to be deducted or capitalized 
235.16  under section 44(d)(7) of the Internal Revenue Code; 
235.17     (14) the amount of qualified research expenses not allowed 
235.18  for federal income tax purposes under section 280C(c) of the 
235.19  Internal Revenue Code, but only to the extent that the amount 
235.20  exceeds the amount of the credit allowed under section 290.068; 
235.21  and 
235.22     (15) the amount of salary expenses not allowed for federal 
235.23  income tax purposes due to claiming the Indian employment credit 
235.24  under section 45A(a) of the Internal Revenue Code; and 
235.25     (16) the amount of any refund of environmental taxes paid 
235.26  under section 59A of the Internal Revenue Code. 
235.27     Sec. 9.  [290.0672] [LONG-TERM CARE INSURANCE CREDIT.] 
235.28     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
235.29  section, the following terms have the meanings given. 
235.30     (b) "Long-term care insurance" means a policy that: 
235.31     (1) qualifies for a deduction under section 213 of the 
235.32  Internal Revenue Code, disregarding the 7.5 percent income test; 
235.33  or meets the requirements given in section 62A.46; or provides 
235.34  similar coverage issued under the laws of another jurisdiction; 
235.35  and 
235.36     (2) does not have a lifetime long-term care benefit limit 
236.1   of less than $100,000; and 
236.2      (3) includes inflation protection that meets or exceeds the 
236.3   inflation protection requirements of the long-term care 
236.4   insurance model regulation cited under section 
236.5   7702B(g)(2)(A)(i)(x) of the Internal Revenue Code. 
236.6      (c) "Qualified beneficiary" means the taxpayer or the 
236.7   taxpayer's spouse.  
236.8      (d) "Premiums deducted in determining federal taxable 
236.9   income" means the lesser of (1) long-term care insurance 
236.10  premiums that qualify as deductions under section 213 of the 
236.11  Internal Revenue Code; and (2) the total amount deductible for 
236.12  medical care under section 213 of the Internal Revenue Code. 
236.13     Subd. 2.  [CREDIT.] A taxpayer is allowed a credit against 
236.14  the tax imposed by this chapter for long-term care insurance 
236.15  policy premiums paid during the tax year.  The credit for each 
236.16  policy equals the lesser of (1) 25 percent of premiums paid to 
236.17  the extent not deducted in determining federal taxable income; 
236.18  or (2) $100.  A taxpayer may claim a credit for only one policy 
236.19  for each qualified beneficiary.  Only one credit may be claimed 
236.20  by any taxpayer for each policy.  The maximum total credit 
236.21  allowed per year is $200 for married couples filing joint 
236.22  returns and $100 for all other filers.  For a nonresident or 
236.23  part-year resident, the credit determined under this section 
236.24  must be allocated based on the percentage calculated under 
236.25  section 290.06, subdivision 2c, paragraph (e). 
236.26     Sec. 10.  [290.0673] [JOB TRAINING PROGRAM CREDIT.] 
236.27     Subdivision 1.  [CREDIT ALLOWED.] (a) A credit is allowed 
236.28  against the tax imposed by section 290.06, subdivision 1, equal 
236.29  to the sum of: 
236.30     (1) placement fees paid to a job training program upon 
236.31  hiring a qualified graduate of the program; and 
236.32     (2) retention fees paid to a job training program for 
236.33  retention of a qualified graduate of the program. 
236.34     (b) The maximum placement fee qualifying for a credit under 
236.35  this section is $8,000 per qualified graduate in the year 
236.36  hired.  The maximum retention fee qualifying for a credit under 
237.1   this section is $6,000 per qualified graduate retained as an 
237.2   employee per year.  Only retention fees paid in the second and 
237.3   third years after the qualified graduate is hired qualify for 
237.4   the credit. 
237.5      (c) A credit is allowed only up to the dollar amount of 
237.6   certificates, issued under subdivision 4, and provided by the 
237.7   job training program to the taxpayer. 
237.8      Subd. 2.  [QUALIFIED JOB TRAINING PROGRAM.] (a) To qualify 
237.9   for credits under this section, a job training program must 
237.10  satisfy the following requirements: 
237.11     (1) It must be operated by a nonprofit corporation that 
237.12  qualifies under section 501(c)(3) of the Internal Revenue Code. 
237.13     (2) The organization must spend at least $5,000 per 
237.14  graduate of the program. 
237.15     (3) The program must provide education and training in: 
237.16     (i) basic skills, such as reading, writing, mathematics, 
237.17  and communications; 
237.18     (ii) thinking skills, such as reasoning, creative thinking, 
237.19  decision making, and problem solving; and 
237.20     (iii) personal qualities, such as responsibility, 
237.21  self-esteem, self-management, honesty, and integrity. 
237.22     (4) The program must provide income supplements, when 
237.23  needed, to participants for housing, counseling, tuition, and 
237.24  other basic needs. 
237.25     (5) The education and training course must last for at 
237.26  least six months. 
237.27     (6) Individuals served by the program must: 
237.28     (i) be 18 years old or older; 
237.29     (ii) have had federal adjusted gross income of no more than 
237.30  $10,000 per year in the last two years; 
237.31     (iii) have assets of no more than $5,000, excluding the 
237.32  value of a homestead; and 
237.33     (iv) not have been claimed as a dependent on the federal 
237.34  tax return of another person in the previous taxable year. 
237.35     (7) The program must charge placement and retention fees 
237.36  that exceed the amount of credit certificates provided to the 
238.1   employer by at least 20 percent. 
238.2      (b) The program must be certified by the commissioner of 
238.3   children, families, and learning as meeting the requirements of 
238.4   this subdivision. 
238.5      Subd. 3.  [QUALIFIED GRADUATE.] A qualified graduate is a 
238.6   graduate of a job training program qualifying under subdivision 
238.7   1, who is placed in a job in Minnesota that pays at least $9 per 
238.8   hour or its equivalent.  To qualify for a credit under this 
238.9   section for a retention fee, a job in which the graduate is 
238.10  retained must pay at least $10 per hour at the end for the first 
238.11  and second years of employment.  
238.12     Subd. 4.  [DUTIES OF PROGRAM.] (a) Each program certified 
238.13  by the commissioner under subdivision 2 must comply with the 
238.14  requirements of this subdivision. 
238.15     (b) Each program must maintain records for each graduate 
238.16  for which the program provides a credit certificate to an 
238.17  employer.  These records must include information sufficient to 
238.18  verify the graduate's eligibility under this section, identify 
238.19  the employer, describe the job including its compensation rate 
238.20  and benefits, and determine the amount of placement and 
238.21  retention fees received. 
238.22     (c) Each program must report to the commissioner of revenue 
238.23  by January 1, 1999, and by January 1, 2001, on its use of the 
238.24  credit.  Each report must include, at least, information on: 
238.25     (1) the number of graduates placed; 
238.26     (2) demographic information on the graduates; 
238.27     (3) the types of position in which each graduate is placed, 
238.28  including compensation information; 
238.29     (4) the tenure of each graduate at the placed position or 
238.30  in other jobs; 
238.31     (5) the amount of employer fees paid to the program; 
238.32     (6) the amount of money raised by the program from other 
238.33  sources; and 
238.34     (7) the types and sizes of employers with which graduates 
238.35  have been placed and retained. 
238.36     (d) The commissioner shall compile and summarize this 
239.1   information and report to the legislature by February 15, 1999, 
239.2   and February 15, 2001.  
239.3      Subd. 5.  [ISSUANCE OF CREDIT CERTIFICATES.] (a) The total 
239.4   amount of credits under this section is limited to $1,700,000 
239.5   for taxable years beginning after December 31, 1996, and before 
239.6   January 1, 2002.  The commissioner may issue under paragraph (b) 
239.7   no more than the specified amount of certificates for taxable 
239.8   years beginning during each calendar year: 
239.9          1997            $200,000
239.10         1998            $400,000
239.11         1999            $600,000
239.12         2000            $340,000
239.13         2001            $160,000
239.14     Unused certificates for a taxable year carry over and may 
239.15  be used for a later taxable year, regardless of when issued by 
239.16  the commissioner. 
239.17     (b) Upon application, the commissioner of children, 
239.18  families, and learning shall issue certificates to job training 
239.19  programs, certified under subdivision 2, up to the dollar amount 
239.20  available for the taxable year.  The certificates must be in a 
239.21  dollar amount that is no greater than the dollar amount applied 
239.22  for, and reflects the commissioner's estimate of the job 
239.23  training program's projected fees for placements and retentions 
239.24  of qualifying graduates.  The commissioner shall issue the 
239.25  certificates in the order in which applications are received 
239.26  until the available authority has been issued. 
239.27     (c) To the extent available, the job training program must 
239.28  provide to employers of its qualified graduates certificates 
239.29  issued by the commissioner of children, families, and learning 
239.30  under this subdivision. 
239.31     Subd. 6.  [NONREFUNDABLE.] The taxpayer must use the tax 
239.32  credit for the taxable year in which the certificate is issued 
239.33  to the employer.  The credit for the taxable year may not exceed 
239.34  the liability for tax under section 290.06, subdivision 1, for 
239.35  the taxable year, before reduction by the nonrefundable credits 
239.36  allowed under this chapter. 
240.1      Subd. 7.  [MANNER OF CLAIMING.] The commissioner shall 
240.2   prescribe the manner in which the credit may be claimed.  This 
240.3   may include allowing the credit only as a separately processed 
240.4   claim for a refund. 
240.5      Subd. 8.  [EXPIRATION.] This section expires effective for 
240.6   taxable years beginning after December 31, 2001. 
240.7      Sec. 11.  Minnesota Statutes 1996, section 290.92, is 
240.8   amended by adding a subdivision to read: 
240.9      Subd. 30.  [REGISTRATION; THIRD-PARTY BULK FILER.] (a) For 
240.10  purposes of this subdivision, the following terms have the 
240.11  meanings given: 
240.12     (1) Notwithstanding section 290.01, "person" means an 
240.13  individual, fiduciary, partnership, corporation, limited 
240.14  liability company, association, or other entity organized under 
240.15  the laws of this state or any other jurisdiction. 
240.16     (2) "Third-party bulk filer" means a person that collects 
240.17  withholding taxes from more than one employer for the purpose of 
240.18  filing returns and depositing the withheld taxes with the 
240.19  commissioner.  
240.20     (b) A person shall not act as a third-party bulk filer 
240.21  unless the person is registered with the commissioner under this 
240.22  subdivision. 
240.23     (c) A person may apply to the commissioner, on a form 
240.24  prescribed by the commissioner, for registration as a 
240.25  third-party bulk filer under this subdivision, and the 
240.26  commissioner shall grant the application if the application 
240.27  indicates that the person will comply with this subdivision. 
240.28     (d) A third-party bulk filer must: 
240.29     (1) keep client funds held for payment of federal or state 
240.30  withholding taxes or other client obligations in an account 
240.31  separate from the third-party bulk filer's own funds; 
240.32     (2) permit the commissioner to conduct scheduled or 
240.33  unscheduled audits of the third-party bulk filer's books and 
240.34  records relating to compliance with this subdivision and fully 
240.35  cooperate with the audits or, at the discretion of the 
240.36  commissioner, submit an audit conducted by a certified public 
241.1   accountant; 
241.2      (3) file returns electronically and make deposits 
241.3   electronically with the commissioner in compliance with the 
241.4   commissioner's requirements for electronic filing and 
241.5   depositing; 
241.6      (4) provide to the commissioner at least monthly, in the 
241.7   form requested by the commissioner, an updated client list that 
241.8   includes at least the name, address, tax identification number, 
241.9   and federal deposit frequency of each client.  The address 
241.10  listed for the client must be the client's actual street or post 
241.11  office box address and not the third-party bulk filer's address; 
241.12     (5) disclose in writing to prospective clients that: 
241.13     (i) the third-party bulk filer may invest client funds 
241.14  prior to depositing them with the commissioner and with the 
241.15  Internal Revenue Service and that earnings from those 
241.16  investments will be the property of the third-party bulk filer; 
241.17     (ii) if the third-party bulk filer incurs losses on those 
241.18  investments or uses the client's funds for other purposes, the 
241.19  third-party bulk filer will still be liable to the client for 
241.20  the amounts withheld but will be able to make required tax 
241.21  deposits on behalf of the client only by using the third-party 
241.22  bulk filer's own funds or other assets to replace the funds lost 
241.23  through the investments or used for other purposes; and 
241.24     (iii) no state or federal agency monitors or assumes any 
241.25  responsibility for the financial solvency of third-party bulk 
241.26  filers; 
241.27     (6) timely file all returns and timely make all tax 
241.28  deposits required under its contracts with its clients; 
241.29     (7) upon request, provide to the commissioner, within the 
241.30  time specified in the request, a copy of any contract with a 
241.31  client; and 
241.32     (8) comply with all other requirements of this section or 
241.33  of rules adopted under this section. 
241.34     (e) When the commissioner sends an order of assessment 
241.35  issued under section 289A.37, in either paper or electronic 
241.36  form, to a third-party bulk filer regarding a client, the 
242.1   commissioner shall also send a paper copy of the order of 
242.2   assessment to the client. 
242.3      (f) If the commissioner determines that a required deposit 
242.4   appears not to have been made, the commissioner shall send a 
242.5   written notice of the delinquency, in electronic or paper form, 
242.6   to the third-party bulk filer, and a copy to the client as 
242.7   required under paragraph (e). 
242.8      (g) If the commissioner determines that a required deposit 
242.9   has not been made, and that continued operation of the 
242.10  third-party bulk filer would present a risk of loss to its 
242.11  clients, the commissioner may, upon ten business days' written 
242.12  notice by certified mail to the third-party bulk filer, suspend 
242.13  the registration of the third-party bulk filer for an indefinite 
242.14  period, and notify the third-party bulk filer's clients that the 
242.15  registration has been suspended.  A registration may not be 
242.16  suspended if the failure to make a deposit was caused by the 
242.17  client's failure to deposit funds or provide the information 
242.18  necessary to calculate appropriate tax withholding payments.  
242.19  The commissioner shall, upon request, provide the third-party 
242.20  bulk filer with the opportunity for an administrative appeal 
242.21  under section 289A.65, subdivisions 1, 4, and 10, prior to 
242.22  suspension; the hearing, if any, on the administrative appeal 
242.23  must occur within the ten-day period unless the commissioner, in 
242.24  the commissioner's sole discretion, agrees to delay the 
242.25  suspension to permit a later hearing.  The 60-day period 
242.26  specified in section 289A.65, subdivision 4, does not apply to a 
242.27  proceeding under this paragraph.  Within 30 days after the 
242.28  beginning of a suspension under this paragraph, the commissioner 
242.29  may commence a proceeding to suspend or revoke under paragraph 
242.30  (h); if the commissioner fails to do so, the suspension under 
242.31  this paragraph terminates. 
242.32     (h) If the commissioner determines, in compliance with 
242.33  paragraph (i), that a third-party bulk filer has violated this 
242.34  section without reasonable cause or is no longer eligible for 
242.35  registration under this subdivision, the commissioner may 
242.36  suspend or revoke the third-party bulk filer's registration or 
243.1   may assess a civil penalty upon the third-party bulk filer, not 
243.2   to exceed $5,000 per violation.  A suspension of registration 
243.3   may be for any period of less than six months and may include 
243.4   conditions for reinstatement.  If the commissioner revokes the 
243.5   registration, the third-party bulk filer may not apply for 
243.6   reregistration for six months after the revocation.  If the 
243.7   commissioner suspends or revokes a registration, the 
243.8   commissioner shall notify the former registrant's clients that 
243.9   the registration has been suspended or revoked.  If the 
243.10  commissioner assesses a civil penalty, the commissioner shall 
243.11  not notify the third-party bulk filer's clients of the 
243.12  assessment. 
243.13     (i) Prior to a suspension, revocation, or assessment of a 
243.14  civil penalty under paragraph (h), the commissioner shall first 
243.15  provide 30 days' written notice to the third-party bulk filer, 
243.16  specifying the violations and informing the third-party bulk 
243.17  filer that the commissioner intends, based upon those 
243.18  violations, to take action against the third-party bulk filer as 
243.19  permitted under this paragraph and paragraph (h).  The notice 
243.20  shall advise the third-party bulk filer of the right to contest 
243.21  the suspension, revocation, or assessment of a civil penalty and 
243.22  of the general procedures for a contested case hearing under 
243.23  chapter 14.  The notice may be served personally or by mail in 
243.24  the manner prescribed for service of an order of assessment 
243.25  issued under section 289A.37.  A suspension or revocation of 
243.26  registration under this paragraph is effective when the 
243.27  commissioner serves a notice of suspension or revocation upon 
243.28  the third-party bulk filer after 30 days have passed following 
243.29  the date of the notice of intent to suspend or revoke without 
243.30  the third-party bulk filer requesting a hearing.  If a hearing 
243.31  is timely requested and held, the suspension or revocation is 
243.32  effective upon service by the commissioner of an order of 
243.33  suspension or revocation under section 14.62, subdivision 1. 
243.34     (j) A third-party bulk filer may terminate its registration 
243.35  by written notice to the commissioner, but the termination does 
243.36  not affect the commissioner's authority to begin or continue a 
244.1   proceeding to take action permitted under paragraph (h).  The 
244.2   commissioner shall notify the third-party bulk filer's clients 
244.3   of a termination of registration under this paragraph. 
244.4      (k) The commissioner shall remind employers at least 
244.5   annually, through the department's regular informational 
244.6   publications that it sends to employers, that employers may 
244.7   telephone the department to determine whether a required filing 
244.8   or deposit has been made by a third-party bulk filer. 
244.9      Sec. 12.  Laws 1997, chapter 34, section 2, is amended to 
244.10  read: 
244.11     Sec. 2.  [EFFECTIVE DATE.] 
244.12     Section 1 is effective the day following final enactment 
244.13  for time limitations which expire or due dates specified in 
244.14  Minnesota Statutes, section 289A.20, which fall in the period 
244.15  between March 31, 1997, and May 30, 1997. 
244.16     Sec. 13.  [APPROPRIATION; BUSINESS TAX STUDY.] 
244.17     (a) $50,000 is appropriated from the general fund for 
244.18  fiscal years 1998 and 1999 to the legislative coordinating 
244.19  commission to study alternative methods for taxing business.  
244.20  This appropriation may be used to hire a consultant or 
244.21  consultants to prepare all or part of the study and related 
244.22  costs. 
244.23     (b) The study must analyze the following taxes paid by the 
244.24  businesses: 
244.25     (1) the corporate franchise tax; 
244.26     (2) the sales tax on capital or other business inputs; 
244.27     (3) the personal property tax on utility property; 
244.28     (4) the real property tax on commercial and industrial 
244.29  property. 
244.30     The study must consider the impact of alternative methods 
244.31  of taxing business and the impact of doing so on the fairness, 
244.32  efficiency, simplicity, elasticity, and stability of revenues, 
244.33  and competitiveness of Minnesota's taxation of business. 
244.34     (c) The legislative commission on planning and fiscal 
244.35  policy is responsible for managing any contracts under this 
244.36  section and for preparing the study.  The commission may appoint 
245.1   a formal or informal bipartisan working group of house and 
245.2   senate members to oversee and coordinate the study.  The 
245.3   commission shall regularly consult with and report to the chairs 
245.4   of the house and senate tax committees on the study process and 
245.5   results.  The commission shall regularly consult with and 
245.6   involve the commissioner of revenue in contracting with 
245.7   consultants and preparing the study.  
245.8      Sec. 14.  [EFFECTIVE DATE.] 
245.9      Sections 1 and 13 are effective the day following final 
245.10  enactment.  
245.11     Sections 2 to 5 are effective for taxable years beginning 
245.12  after December 31, 1997. 
245.13     Sections 6 to 10 are effective for taxable years beginning 
245.14  after December 31, 1996. 
245.15     Section 11 is effective January 1, 1998. 
245.16     Section 12 is effective April 16, 1997. 
245.17                             ARTICLE 10 
245.18                           FEDERAL UPDATE
245.19     Section 1.  Minnesota Statutes 1996, section 289A.02, 
245.20  subdivision 7, is amended to read: 
245.21     Subd. 7.  [INTERNAL REVENUE CODE.] Unless specifically 
245.22  defined otherwise, "Internal Revenue Code" means the Internal 
245.23  Revenue Code of 1986, as amended through March 22 December 31, 
245.24  1996, and includes the provisions of section 1(a) and (b) of 
245.25  Public Law Number 104-117. 
245.26     Sec. 2.  Minnesota Statutes 1996, section 290.01, 
245.27  subdivision 19, is amended to read: 
245.28     Subd. 19.  [NET INCOME.] The term "net income" means the 
245.29  federal taxable income, as defined in section 63 of the Internal 
245.30  Revenue Code of 1986, as amended through the date named in this 
245.31  subdivision, incorporating any elections made by the taxpayer in 
245.32  accordance with the Internal Revenue Code in determining federal 
245.33  taxable income for federal income tax purposes, and with the 
245.34  modifications provided in subdivisions 19a to 19f. 
245.35     In the case of a regulated investment company or a fund 
245.36  thereof, as defined in section 851(a) or 851(h) of the Internal 
246.1   Revenue Code, federal taxable income means investment company 
246.2   taxable income as defined in section 852(b)(2) of the Internal 
246.3   Revenue Code, except that:  
246.4      (1) the exclusion of net capital gain provided in section 
246.5   852(b)(2)(A) of the Internal Revenue Code does not apply; and 
246.6      (2) the deduction for dividends paid under section 
246.7   852(b)(2)(D) of the Internal Revenue Code must be applied by 
246.8   allowing a deduction for capital gain dividends and 
246.9   exempt-interest dividends as defined in sections 852(b)(3)(C) 
246.10  and 852(b)(5) of the Internal Revenue Code; and 
246.11     (3) the deduction for dividends paid must also be applied 
246.12  in the amount of any undistributed capital gains which the 
246.13  regulated investment company elects to have treated as provided 
246.14  in section 852(b)(3)(D) of the Internal Revenue Code.  
246.15     The net income of a real estate investment trust as defined 
246.16  and limited by section 856(a), (b), and (c) of the Internal 
246.17  Revenue Code means the real estate investment trust taxable 
246.18  income as defined in section 857(b)(2) of the Internal Revenue 
246.19  Code.  
246.20     The net income of a designated settlement fund as defined 
246.21  in section 468B(d) of the Internal Revenue Code means the gross 
246.22  income as defined in section 468B(b) of the Internal Revenue 
246.23  Code. 
246.24     The Internal Revenue Code of 1986, as amended through 
246.25  December 31, 1986, shall be in effect for taxable years 
246.26  beginning after December 31, 1986.  The provisions of sections 
246.27  10104, 10202, 10203, 10204, 10206, 10212, 10221, 10222, 10223, 
246.28  10226, 10227, 10228, 10611, 10631, 10632, and 10711 of the 
246.29  Omnibus Budget Reconciliation Act of 1987, Public Law Number 
246.30  100-203, the provisions of sections 1001, 1002, 1003, 1004, 
246.31  1005, 1006, 1008, 1009, 1010, 1011, 1011A, 1011B, 1012, 1013, 
246.32  1014, 1015, 1018, 2004, 3041, 4009, 6007, 6026, 6032, 6137, 
246.33  6277, and 6282 of the Technical and Miscellaneous Revenue Act of 
246.34  1988, Public Law Number 100-647, and the provisions of sections 
246.35  7811, 7816, and 7831 of the Omnibus Budget Reconciliation Act of 
246.36  1989, Public Law Number 101-239, and the provisions of sections 
247.1   1305, 1704(r), and 1704(e)(1) of the Small Business Job 
247.2   Protection Act, Public Law Number 104-188, shall be effective at 
247.3   the time they become effective for federal income tax purposes.  
247.4      The Internal Revenue Code of 1986, as amended through 
247.5   December 31, 1987, shall be in effect for taxable years 
247.6   beginning after December 31, 1987.  The provisions of sections 
247.7   4001, 4002, 4011, 5021, 5041, 5053, 5075, 6003, 6008, 6011, 
247.8   6030, 6031, 6033, 6057, 6064, 6066, 6079, 6130, 6176, 6180, 
247.9   6182, 6280, and 6281 of the Technical and Miscellaneous Revenue 
247.10  Act of 1988, Public Law Number 100-647, the provisions of 
247.11  sections 7815 and 7821 of the Omnibus Budget Reconciliation Act 
247.12  of 1989, Public Law Number 101-239, and the provisions of 
247.13  section 11702 of the Revenue Reconciliation Act of 1990, Public 
247.14  Law Number 101-508, shall become effective at the time they 
247.15  become effective for federal tax purposes.  
247.16     The Internal Revenue Code of 1986, as amended through 
247.17  December 31, 1988, shall be in effect for taxable years 
247.18  beginning after December 31, 1988.  The provisions of sections 
247.19  7101, 7102, 7104, 7105, 7201, 7202, 7203, 7204, 7205, 7206, 
247.20  7207, 7210, 7211, 7301, 7302, 7303, 7304, 7601, 7621, 7622, 
247.21  7641, 7642, 7645, 7647, 7651, and 7652 of the Omnibus Budget 
247.22  Reconciliation Act of 1989, Public Law Number 101-239, the 
247.23  provision of section 1401 of the Financial Institutions Reform, 
247.24  Recovery, and Enforcement Act of 1989, Public Law Number 101-73, 
247.25  and the provisions of sections 11701 and 11703 of the Revenue 
247.26  Reconciliation Act of 1990, Public Law Number 101-508, and the 
247.27  provisions of sections 1702(g) and 1704(f)(2)(A) and (B) of the 
247.28  Small Business Job Protection Act, Public Law Number 104-188, 
247.29  shall become effective at the time they become effective for 
247.30  federal tax purposes.  
247.31     The Internal Revenue Code of 1986, as amended through 
247.32  December 31, 1989, shall be in effect for taxable years 
247.33  beginning after December 31, 1989.  The provisions of sections 
247.34  11321, 11322, 11324, 11325, 11403, 11404, 11410, and 11521 of 
247.35  the Revenue Reconciliation Act of 1990, Public Law Number 
247.36  101-508, and the provisions of sections 13224 and 13261 of the 
248.1   Omnibus Budget Reconciliation Act of 1993, Public Law Number 
248.2   103-66, shall become effective at the time they become effective 
248.3   for federal purposes.  
248.4      The Internal Revenue Code of 1986, as amended through 
248.5   December 31, 1990, shall be in effect for taxable years 
248.6   beginning after December 31, 1990. 
248.7      The provisions of section 13431 of the Omnibus Budget 
248.8   Reconciliation Act of 1993, Public Law Number 103-66, shall 
248.9   become effective at the time they became effective for federal 
248.10  purposes.  
248.11     The Internal Revenue Code of 1986, as amended through 
248.12  December 31, 1991, shall be in effect for taxable years 
248.13  beginning after December 31, 1991.  
248.14     The provisions of sections 1936 and 1937 of the 
248.15  Comprehensive National Energy Policy Act of 1992, Public Law 
248.16  Number 102-486, and the provisions of sections 13101, 13114, 
248.17  13122, 13141, 13150, 13151, 13174, 13239, 13301, and 13442 of 
248.18  the Omnibus Budget Reconciliation Act of 1993, Public Law Number 
248.19  103-66, shall become effective at the time they become effective 
248.20  for federal purposes.  
248.21     The Internal Revenue Code of 1986, as amended through 
248.22  December 31, 1992, shall be in effect for taxable years 
248.23  beginning after December 31, 1992.  
248.24     The provisions of sections 13116, 13121, 13206, 13210, 
248.25  13222, 13223, 13231, 13232, 13233, 13239, 13262, and 13321 of 
248.26  the Omnibus Budget Reconciliation Act of 1993, Public Law Number 
248.27  103-66, and the provisions of sections 1703(a), 1703(d), 
248.28  1703(i), 1703(l), and 1703(m) of the Small Business Job 
248.29  Protection Act, Public Law Number 104-188, shall become 
248.30  effective at the time they become effective for federal purposes.
248.31     The Internal Revenue Code of 1986, as amended through 
248.32  December 31, 1993, shall be in effect for taxable years 
248.33  beginning after December 31, 1993. 
248.34     The provision of section 741 of Legislation to Implement 
248.35  Uruguay Round of General Agreement on Tariffs and Trade, Public 
248.36  Law Number 103-465, and the provisions of sections 1, 2, and 3, 
249.1   of the Self-Employed Health Insurance Act of 1995, Public Law 
249.2   Number 104-7, the provision of section 501(b)(2) of the Health 
249.3   Insurance Portability and Accountability Act, Public Law Number 
249.4   104-191, and the provisions of sections 1604 and 1704(p)(1) and 
249.5   (2) of the Small Business Job Protection Act, Public Law Number 
249.6   104-188, shall become effective at the time they become 
249.7   effective for federal purposes. 
249.8      The Internal Revenue Code of 1986, as amended through 
249.9   December 31, 1994, shall be in effect for taxable years 
249.10  beginning after December 31, 1994. 
249.11     The provisions of sections 1119(a), 1120, 1121, 1202(a), 
249.12  1444, 1449(b), 1602(a), 1610(a), 1613, and 1805 of the Small 
249.13  Business Job Protection Act, Public Law Number 104-188, and the 
249.14  provision of section 511 of the Health Insurance Portability and 
249.15  Accountability Act, Public Law Number 104-191, shall become 
249.16  effective at the time they become effective for federal purposes.
249.17     The Internal Revenue Code of 1986, as amended through March 
249.18  22, 1996, is in effect for taxable years beginning after 
249.19  December 31, 1995. 
249.20     The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 
249.21  1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 
249.22  1616, 1617, 1704(l), and 1704(m) of the Small Business Job 
249.23  Protection Act, Public Law Number 104-188, and the provisions of 
249.24  Public Law Number 104-117 become effective at the time they 
249.25  become effective for federal purposes. 
249.26     The Internal Revenue Code of 1986, as amended through 
249.27  December 31, 1996, shall be in effect for taxable years 
249.28  beginning after December 31, 1996. 
249.29     Except as otherwise provided, references to the Internal 
249.30  Revenue Code in subdivisions 19a to 19g mean the code in effect 
249.31  for purposes of determining net income for the applicable year. 
249.32     Sec. 3.  Minnesota Statutes 1996, section 290.01, 
249.33  subdivision 19a, is amended to read: 
249.34     Subd. 19a.  [ADDITIONS TO FEDERAL TAXABLE INCOME.] For 
249.35  individuals, estates, and trusts, there shall be added to 
249.36  federal taxable income: 
250.1      (1)(i) interest income on obligations of any state other 
250.2   than Minnesota or a political or governmental subdivision, 
250.3   municipality, or governmental agency or instrumentality of any 
250.4   state other than Minnesota exempt from federal income taxes 
250.5   under the Internal Revenue Code or any other federal statute, 
250.6   and 
250.7      (ii) exempt-interest dividends as defined in section 
250.8   852(b)(5) of the Internal Revenue Code, except the portion of 
250.9   the exempt-interest dividends derived from interest income on 
250.10  obligations of the state of Minnesota or its political or 
250.11  governmental subdivisions, municipalities, governmental agencies 
250.12  or instrumentalities, but only if the portion of the 
250.13  exempt-interest dividends from such Minnesota sources paid to 
250.14  all shareholders represents 95 percent or more of the 
250.15  exempt-interest dividends that are paid by the regulated 
250.16  investment company as defined in section 851(a) of the Internal 
250.17  Revenue Code, or the fund of the regulated investment company as 
250.18  defined in section 851(h) of the Internal Revenue Code, making 
250.19  the payment; and 
250.20     (iii) for the purposes of items (i) and (ii), interest on 
250.21  obligations of an Indian tribal government described in section 
250.22  7871(c) of the Internal Revenue Code shall be treated as 
250.23  interest income on obligations of the state in which the tribe 
250.24  is located; 
250.25     (2) the amount of income taxes paid or accrued within the 
250.26  taxable year under this chapter and income taxes paid to any 
250.27  other state or to any province or territory of Canada, to the 
250.28  extent allowed as a deduction under section 63(d) of the 
250.29  Internal Revenue Code, but the addition may not be more than the 
250.30  amount by which the itemized deductions as allowed under section 
250.31  63(d) of the Internal Revenue Code exceeds the amount of the 
250.32  standard deduction as defined in section 63(c) of the Internal 
250.33  Revenue Code.  For the purpose of this paragraph, the 
250.34  disallowance of itemized deductions under section 68 of the 
250.35  Internal Revenue Code of 1986, income tax is the last itemized 
250.36  deduction disallowed; 
251.1      (3) the capital gain amount of a lump sum distribution to 
251.2   which the special tax under section 1122(h)(3)(B)(ii) of the Tax 
251.3   Reform Act of 1986, Public Law Number 99-514, applies; and 
251.4      (4) the amount of income taxes paid or accrued within the 
251.5   taxable year under this chapter and income taxes paid to any 
251.6   other state or any province or territory of Canada, to the 
251.7   extent allowed as a deduction in determining federal adjusted 
251.8   gross income.  For the purpose of this paragraph, income taxes 
251.9   do not include the taxes imposed by sections 290.0922, 
251.10  subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729.; 
251.11  and 
251.12     (5) the amount of loss or expense included in federal 
251.13  taxable income under section 1366 of the Internal Revenue Code 
251.14  flowing from a corporation having a valid election in effect for 
251.15  the taxable year under section 1362 of the Internal Revenue Code 
251.16  which is not allowed to be an "S" corporation under section 
251.17  290.9725. 
251.18     Sec. 4.  Minnesota Statutes 1996, section 290.01, 
251.19  subdivision 19b, is amended to read: 
251.20     Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
251.21  individuals, estates, and trusts, there shall be subtracted from 
251.22  federal taxable income: 
251.23     (1) interest income on obligations of any authority, 
251.24  commission, or instrumentality of the United States to the 
251.25  extent includable in taxable income for federal income tax 
251.26  purposes but exempt from state income tax under the laws of the 
251.27  United States; 
251.28     (2) if included in federal taxable income, the amount of 
251.29  any overpayment of income tax to Minnesota or to any other 
251.30  state, for any previous taxable year, whether the amount is 
251.31  received as a refund or as a credit to another taxable year's 
251.32  income tax liability; 
251.33     (3) the amount paid to others not to exceed $650 for each 
251.34  dependent in grades kindergarten to 6 and $1,000 for each 
251.35  dependent in grades 7 to 12, for tuition, textbooks, and 
251.36  transportation of each dependent in attending an elementary or 
252.1   secondary school situated in Minnesota, North Dakota, South 
252.2   Dakota, Iowa, or Wisconsin, wherein a resident of this state may 
252.3   legally fulfill the state's compulsory attendance laws, which is 
252.4   not operated for profit, and which adheres to the provisions of 
252.5   the Civil Rights Act of 1964 and chapter 363.  As used in this 
252.6   clause, "textbooks" includes books and other instructional 
252.7   materials and equipment used in elementary and secondary schools 
252.8   in teaching only those subjects legally and commonly taught in 
252.9   public elementary and secondary schools in this state.  
252.10  "Textbooks" does not include instructional books and materials 
252.11  used in the teaching of religious tenets, doctrines, or worship, 
252.12  the purpose of which is to instill such tenets, doctrines, or 
252.13  worship, nor does it include books or materials for, or 
252.14  transportation to, extracurricular activities including sporting 
252.15  events, musical or dramatic events, speech activities, driver's 
252.16  education, or similar programs.  In order to qualify for the 
252.17  subtraction under this clause the taxpayer must elect to itemize 
252.18  deductions under section 63(e) of the Internal Revenue Code; 
252.19     (4) to the extent included in federal taxable income, 
252.20  distributions from a qualified governmental pension plan, an 
252.21  individual retirement account, simplified employee pension, or 
252.22  qualified plan covering a self-employed person that represent a 
252.23  return of contributions that were included in Minnesota gross 
252.24  income in the taxable year for which the contributions were made 
252.25  but were deducted or were not included in the computation of 
252.26  federal adjusted gross income.  The distribution shall be 
252.27  allocated first to return of contributions until the 
252.28  contributions included in Minnesota gross income have been 
252.29  exhausted.  This subtraction applies only to contributions made 
252.30  in a taxable year prior to 1985; 
252.31     (5) income as provided under section 290.0802; 
252.32     (6) the amount of unrecovered accelerated cost recovery 
252.33  system deductions allowed under subdivision 19g; 
252.34     (7) to the extent included in federal adjusted gross 
252.35  income, income realized on disposition of property exempt from 
252.36  tax under section 290.491; 
253.1      (8) to the extent not deducted in determining federal 
253.2   taxable income, the amount paid for health insurance of 
253.3   self-employed individuals as determined under section 162(l) of 
253.4   the Internal Revenue Code, except that the 25 percent limit does 
253.5   not apply.  If the taxpayer deducted insurance payments under 
253.6   section 213 of the Internal Revenue Code of 1986, the 
253.7   subtraction under this clause must be reduced by the lesser of: 
253.8      (i) the total itemized deductions allowed under section 
253.9   63(d) of the Internal Revenue Code, less state, local, and 
253.10  foreign income taxes deductible under section 164 of the 
253.11  Internal Revenue Code and the standard deduction under section 
253.12  63(c) of the Internal Revenue Code; or 
253.13     (ii) the lesser of (A) the amount of insurance qualifying 
253.14  as "medical care" under section 213(d) of the Internal Revenue 
253.15  Code to the extent not deducted under section 162(1) of the 
253.16  Internal Revenue Code or excluded from income or (B) the total 
253.17  amount deductible for medical care under section 213(a); and 
253.18     (9) the exemption amount allowed under Laws 1995, chapter 
253.19  255, article 3, section 2, subdivision 3.; and 
253.20     (10) the amount of income or gain included in federal 
253.21  taxable income under section 1366 of the Internal Revenue Code 
253.22  flowing from a corporation having a valid election in effect for 
253.23  the taxable year under section 1362 of the Internal Revenue Code 
253.24  which is not allowed to be an "S" corporation under section 
253.25  290.9725. 
253.26     Sec. 5.  Minnesota Statutes 1996, section 290.01, 
253.27  subdivision 19g, is amended to read: 
253.28     Subd. 19g.  [ACRS MODIFICATION FOR INDIVIDUALS.] (a) An 
253.29  individual is allowed a subtraction from federal taxable income 
253.30  for the amount of accelerated cost recovery system deductions 
253.31  that were added to federal adjusted gross income in computing 
253.32  Minnesota gross income for taxable year 1981, 1982, 1983, or 
253.33  1984 and that were not deducted in a later taxable year.  The 
253.34  deduction is allowed beginning in the first taxable year after 
253.35  the entire allowable deduction for the property has been allowed 
253.36  under federal law or the first taxable year beginning after 
254.1   December 31, 1987, whichever is later.  The amount of the 
254.2   deduction is computed by deducting the amount added to federal 
254.3   adjusted gross income in computing Minnesota gross income (less 
254.4   any deduction allowed under Minnesota Statutes 1986, section 
254.5   290.01, subdivision 20f) in equal annual amounts over five years.
254.6      (b) In the event of a sale or exchange of the property, a 
254.7   deduction is allowed equal to the lesser of (1) the remaining 
254.8   amount that would be allowed as a deduction under paragraph (a) 
254.9   or (2) the amount of capital gain recognized and the amount of 
254.10  cost recovery deductions that were subject to recapture under 
254.11  sections 1245 and 1250 of the Internal Revenue Code of 1986 for 
254.12  the taxable year. 
254.13     (c) In the case of a corporation electing S corporation 
254.14  status under section 1362 of the Internal Revenue Code treated 
254.15  as an "S" corporation under section 290.9725, the amount of the 
254.16  corporation's cost recovery allowances that have been deducted 
254.17  in computing federal tax, but have been added to federal taxable 
254.18  income or not deducted in computing tax under this chapter as a 
254.19  result of the application of subdivision 19e, paragraphs (a) and 
254.20  (c) or Minnesota Statutes 1986, section 290.09, subdivision 7, 
254.21  is allowed as a deduction to the shareholders under the 
254.22  provisions of paragraph (a). 
254.23     Sec. 6.  Minnesota Statutes 1996, section 290.01, 
254.24  subdivision 31, is amended to read: 
254.25     Subd. 31.  [INTERNAL REVENUE CODE.] Unless specifically 
254.26  defined otherwise, "Internal Revenue Code" means the Internal 
254.27  Revenue Code of 1986, as amended through March 22 December 31, 
254.28  1996, and includes the provisions of section 1(a) and (b) of 
254.29  Public Law Number 104-117. 
254.30     Sec. 7.  Minnesota Statutes 1996, section 290.014, 
254.31  subdivision 2, is amended to read: 
254.32     Subd. 2.  [NONRESIDENT INDIVIDUALS.] Except as provided in 
254.33  section 290.015, a nonresident individual is subject to the 
254.34  return filing requirements and to tax as provided in this 
254.35  chapter to the extent that the income of the nonresident 
254.36  individual is: 
255.1      (1) allocable to this state under section 290.17, 290.191, 
255.2   or 290.20; 
255.3      (2) taxed to the individual under the Internal Revenue Code 
255.4   (or not taxed under the Internal Revenue Code by reason of its 
255.5   character but of a character which is taxable under this 
255.6   chapter) in the individual's capacity as a beneficiary of an 
255.7   estate with income allocable to this state under section 290.17, 
255.8   290.191, or 290.20 and the income, taking into account the 
255.9   income character provisions of section 662(b) of the Internal 
255.10  Revenue Code, would be allocable to this state under section 
255.11  290.17, 290.191, or 290.20 if realized by the individual 
255.12  directly from the source from which realized by the estate; 
255.13     (3) taxed to the individual under the Internal Revenue Code 
255.14  (or not taxed under the Internal Revenue Code by reason of its 
255.15  character but of a character that is taxable under this chapter) 
255.16  in the individual's capacity as a beneficiary or grantor or 
255.17  other person treated as a substantial owner of a trust with 
255.18  income allocable to this state under section 290.17, 290.191, or 
255.19  290.20 and the income, taking into account the income character 
255.20  provisions of section 652(b), 662(b), or 664(b) of the Internal 
255.21  Revenue Code, would be allocable to this state under section 
255.22  290.17, 290.191, or 290.20 if realized by the individual 
255.23  directly from the source from which realized by the trust; 
255.24     (4) taxed to the individual under the Internal Revenue Code 
255.25  (or not taxed under the Internal Revenue Code by reason of its 
255.26  character but of a character which is taxable under this 
255.27  chapter) in the individual's capacity as a limited or general 
255.28  partner in a partnership with income allocable to this state 
255.29  under section 290.17, 290.191, or 290.20 and the income, taking 
255.30  into account the income character provisions of section 702(b) 
255.31  of the Internal Revenue Code, would be allocable to this state 
255.32  under section 290.17, 290.191, or 290.20 if realized by the 
255.33  individual directly from the source from which realized by the 
255.34  partnership; or 
255.35     (5) taxed to the individual under the Internal Revenue Code 
255.36  (or not taxed under the Internal Revenue Code by reason of its 
256.1   character but of a character which is taxable under this 
256.2   chapter) in the individual's capacity as a shareholder of a 
256.3   corporation having a valid election in effect under section 1362 
256.4   of the Internal Revenue Code treated as an "S" corporation under 
256.5   section 290.9725, and income allocable to this state under 
256.6   section 290.17, 290.191, or 290.20 and the income, taking into 
256.7   account the income character provisions of section 1366(b) of 
256.8   the Internal Revenue Code, would be allocable to this state 
256.9   under section 290.17, 290.191, or 290.20 if realized by the 
256.10  individual directly from the source from which realized by the 
256.11  corporation. 
256.12     Sec. 8.  Minnesota Statutes 1996, section 290.014, 
256.13  subdivision 3, is amended to read: 
256.14     Subd. 3.  [TRUSTS AND ESTATES.] Except as provided in 
256.15  section 290.015, a trust or estate, whether resident or 
256.16  nonresident, is subject to the return filing requirements and to 
256.17  tax as provided in this chapter to the extent that the income of 
256.18  the trust or estate is: 
256.19     (1) allocable to this state under section 290.17, 290.191, 
256.20  or 290.20; 
256.21     (2) taxed to the trust or estate under the Internal Revenue 
256.22  Code (or not taxed under the Internal Revenue Code by reason of 
256.23  its character but of a character which is taxable under this 
256.24  chapter) in its capacity as a beneficiary of a trust or estate 
256.25  with income allocable to this state under section 290.17, 
256.26  290.191, or 290.20 and the income, taking into account the 
256.27  income character provisions of section 662(b) of the Internal 
256.28  Revenue Code, would be allocable to this state under section 
256.29  290.17, 290.191, or 290.20 if realized by the trust or 
256.30  beneficiary estate directly from the source from which realized 
256.31  by the distributing estate; 
256.32     (3) taxed to the trust or estate under the Internal Revenue 
256.33  Code (or not taxed under the Internal Revenue Code by reason of 
256.34  its character but of a character which is taxable under this 
256.35  chapter) in its capacity as a beneficiary or grantor or other 
256.36  person treated as a substantial owner of a trust with income 
257.1   allocable to this state under section 290.17, 290.191, or 290.20 
257.2   and the income, taking into account the income character 
257.3   provisions of section 652(b), 662(b), or 664(b) of the Internal 
257.4   Revenue Code, would be allocable to this state under section 
257.5   290.17, 290.191, or 290.20 if realized by the beneficiary trust 
257.6   or estate directly from the source from which realized by the 
257.7   distributing trust; 
257.8      (4) taxed to the trust or estate under the Internal Revenue 
257.9   Code (or not taxed under the Internal Revenue Code by reason of 
257.10  its character but of a character which is taxable under this 
257.11  chapter) in its capacity as a limited or general partner in a 
257.12  partnership with income allocable to this state under section 
257.13  290.17, 290.191, or 290.20 and the income, taking into account 
257.14  the income character provisions of section 702(b) of the 
257.15  Internal Revenue Code, would be allocable to this state under 
257.16  section 290.17, 290.191, or 290.20 if realized by the trust or 
257.17  estate directly from the source from which realized by the 
257.18  partnership; or 
257.19     (5) taxed to the trust or estate under the Internal Revenue 
257.20  Code (or not taxed under the Internal Revenue Code by reason of 
257.21  its character but of a character which is taxable under this 
257.22  chapter) in its capacity as a shareholder of a 
257.23  corporation having a valid election in effect under section 1362 
257.24  of the Internal Revenue Code treated as an "S" corporation under 
257.25  section 290.9725, and income allocable to this state under 
257.26  section 290.17, 290.191, or 290.20 and the income, taking into 
257.27  account the income character provisions of section 1366(b) of 
257.28  the Internal Revenue Code, would be allocable to this state 
257.29  under section 290.17, 290.191, or 290.20 if realized by the 
257.30  trust or estate directly from the source from which realized by 
257.31  the corporation. 
257.32     Sec. 9.  Minnesota Statutes 1996, section 290.015, 
257.33  subdivision 5, is amended to read: 
257.34     Subd. 5.  [DETERMINATION AT ENTITY LEVEL.] Determinations 
257.35  under this section with respect to trades or businesses 
257.36  conducted by a partnership, trust, estate, or corporation with 
258.1   an election in effect under section 1362 of the Internal Revenue 
258.2   Code treated as an "S" corporation under section 290.9725, or 
258.3   any other entity, the income of which is or may be taxed to its 
258.4   owners or beneficiaries must be made with respect to the entity 
258.5   carrying on the trade or business and not with respect to owners 
258.6   or beneficiaries of the trade or business, the taxability of 
258.7   which under this chapter must be determined under section 
258.8   290.014.  
258.9      Sec. 10.  Minnesota Statutes 1996, section 290.06, 
258.10  subdivision 22, is amended to read: 
258.11     Subd. 22.  [CREDIT FOR TAXES PAID TO ANOTHER STATE.] (a) A 
258.12  taxpayer who is liable for taxes on or measured by net income to 
258.13  another state or province or territory of Canada, as provided in 
258.14  paragraphs (b) through (f), upon income allocated or apportioned 
258.15  to Minnesota, is entitled to a credit for the tax paid to 
258.16  another state or province or territory of Canada if the tax is 
258.17  actually paid in the taxable year or a subsequent taxable year.  
258.18  A taxpayer who is a resident of this state pursuant to section 
258.19  290.01, subdivision 7, clause (2), and who is subject to income 
258.20  tax as a resident in the state of the individual's domicile is 
258.21  not allowed this credit unless the state of domicile does not 
258.22  allow a similar credit. 
258.23     (b) For an individual, estate, or trust, the credit is 
258.24  determined by multiplying the tax payable under this chapter by 
258.25  the ratio derived by dividing the income subject to tax in the 
258.26  other state or province or territory of Canada that is also 
258.27  subject to tax in Minnesota while a resident of Minnesota by the 
258.28  taxpayer's federal adjusted gross income, as defined in section 
258.29  62 of the Internal Revenue Code, modified by the addition 
258.30  required by section 290.01, subdivision 19a, clause (1), and the 
258.31  subtraction allowed by section 290.01, subdivision 19b, clause 
258.32  (1), to the extent the income is allocated or assigned to 
258.33  Minnesota under sections 290.081 and 290.17.  
258.34     (c) If the taxpayer is an athletic team that apportions all 
258.35  of its income under section 290.17, subdivision 5, paragraph 
258.36  (c), the credit is determined by multiplying the tax payable 
259.1   under this chapter by the ratio derived from dividing the total 
259.2   net income subject to tax in the other state or province or 
259.3   territory of Canada by the taxpayer's Minnesota taxable income. 
259.4      (d) The credit determined under paragraph (b) or (c) shall 
259.5   not exceed the amount of tax so paid to the other state or 
259.6   province or territory of Canada on the gross income earned 
259.7   within the other state or province or territory of Canada 
259.8   subject to tax under this chapter, nor shall the allowance of 
259.9   the credit reduce the taxes paid under this chapter to an amount 
259.10  less than what would be assessed if such income amount was 
259.11  excluded from taxable net income. 
259.12     (e) In the case of the tax assessed on a lump sum 
259.13  distribution under section 290.032, the credit allowed under 
259.14  paragraph (a) is the tax assessed by the other state or province 
259.15  or territory of Canada on the lump sum distribution that is also 
259.16  subject to tax under section 290.032, and shall not exceed the 
259.17  tax assessed under section 290.032.  To the extent the total 
259.18  lump sum distribution defined in section 290.032, subdivision 1, 
259.19  includes lump sum distributions received in prior years or is 
259.20  all or in part an annuity contract, the reduction to the tax on 
259.21  the lump sum distribution allowed under section 290.032, 
259.22  subdivision 2, includes tax paid to another state that is 
259.23  properly apportioned to that distribution. 
259.24     (f) If a Minnesota resident reported an item of income to 
259.25  Minnesota and is assessed tax in such other state or province or 
259.26  territory of Canada on that same income after the Minnesota 
259.27  statute of limitations has expired, the taxpayer shall receive a 
259.28  credit for that year under paragraph (a), notwithstanding any 
259.29  statute of limitations to the contrary.  The claim for the 
259.30  credit must be submitted within one year from the date the taxes 
259.31  were paid to the other state or province or territory of 
259.32  Canada.  The taxpayer must submit sufficient proof to show 
259.33  entitlement to a credit. 
259.34     (g) For the purposes of this subdivision, a resident 
259.35  shareholder of a corporation having a valid election in effect 
259.36  under section 1362 of the Internal Revenue Code treated as an "S"
260.1   corporation under section 290.9725, must be considered to have 
260.2   paid a tax imposed on the shareholder in an amount equal to the 
260.3   shareholder's pro rata share of any net income tax paid by the S 
260.4   corporation to another state.  For the purposes of the preceding 
260.5   sentence, the term "net income tax" means any tax imposed on or 
260.6   measured by a corporation's net income. 
260.7      (h) For the purposes of this subdivision, a resident member 
260.8   of a limited liability company taxed as a partnership under the 
260.9   Internal Revenue Code must be considered to have paid a tax 
260.10  imposed on the member in an amount equal to the member's pro 
260.11  rata share of any net income tax paid by the limited liability 
260.12  company to a state that does not measure the income of the 
260.13  member of the limited liability company by reference to the 
260.14  income of the limited liability company.  For purposes of the 
260.15  preceding sentence, the term "net income" tax means any tax 
260.16  imposed on or measured by a limited liability company's net 
260.17  income. 
260.18     Sec. 11.  Minnesota Statutes 1996, section 290.068, 
260.19  subdivision 1, is amended to read: 
260.20     Subdivision 1.  [CREDIT ALLOWED.] A corporation, other than 
260.21  a corporation with a valid election in effect under section 1362 
260.22  of the Internal Revenue Code treated as an "S" corporation under 
260.23  section 290.9725, is allowed a credit against the portion of the 
260.24  franchise tax computed under section 290.06, subdivision 1, for 
260.25  the taxable year equal to: 
260.26     (a) 5 percent of the first $2 million of the excess (if 
260.27  any) of 
260.28     (1) the qualified research expenses for the taxable year, 
260.29  over 
260.30     (2) the base amount; and 
260.31     (b) 2.5 percent on all of such excess expenses over $2 
260.32  million. 
260.33     Sec. 12.  Minnesota Statutes 1996, section 290.0922, 
260.34  subdivision 1, is amended to read: 
260.35     Subdivision 1.  [IMPOSITION.] (a) In addition to the tax 
260.36  imposed by this chapter without regard to this section, the 
261.1   franchise tax imposed on a corporation required to file under 
261.2   section 289A.08, subdivision 3, other than a corporation having 
261.3   a valid election in effect under section 1362 of the Internal 
261.4   Revenue Code treated as an "S" corporation under section 
261.5   290.9725 for the taxable year includes a tax equal to the 
261.6   following amounts: 
261.7        If the sum of the corporation's
261.8   Minnesota property, payrolls, and sales
261.9   or receipts is:                            the tax equals:
261.10             less than $500,000                    $0
261.11     $   500,000 to $   999,999                  $100
261.12     $ 1,000,000 to $ 4,999,999                  $300
261.13     $ 5,000,000 to $ 9,999,999                $1,000 
261.14     $10,000,000 to $19,999,999                $2,000 
261.15     $20,000,000 or more                       $5,000 
261.16     (b) A tax is imposed for each taxable year on a corporation 
261.17  required to file a return under section 289A.12, subdivision 3, 
261.18  that has a valid election in effect for the taxable year under 
261.19  section 1362 of the Internal Revenue Code is treated as an "S" 
261.20  corporation under section 290.9725 and on a partnership required 
261.21  to file a return under section 289A.12, subdivision 3, other 
261.22  than a partnership that derives over 80 percent of its income 
261.23  from farming.  The tax imposed under this paragraph is due on or 
261.24  before the due date of the return for the taxpayer due under 
261.25  section 289A.18, subdivision 1.  The commissioner shall 
261.26  prescribe the return to be used for payment of this tax.  The 
261.27  tax under this paragraph is equal to the following amounts:  
261.28       If the sum of the S corporation's or partnership's 
261.29  Minnesota property, payrolls, and sales
261.30  or receipts is:                        the tax equals:
261.31               less than $500,000                $0 
261.32       $   500,000 to $   999,999              $100 
261.33       $ 1,000,000 to $ 4,999,999              $300 
261.34       $ 5,000,000 to $ 9,999,999            $1,000 
261.35       $10,000,000 to $19,999,999            $2,000 
261.36       $20,000,000 or more                   $5,000 
262.1      Sec. 13.  Minnesota Statutes 1996, section 290.17, 
262.2   subdivision 1, is amended to read: 
262.3      Subdivision 1.  [SCOPE OF ALLOCATION RULES.] (a) The income 
262.4   of resident individuals is not subject to allocation outside 
262.5   this state.  The allocation rules apply to nonresident 
262.6   individuals, estates, trusts, nonresident partners of 
262.7   partnerships, nonresident shareholders of corporations having a 
262.8   valid election in effect under section 1362 of the Internal 
262.9   Revenue Code treated as "S" corporations under section 290.9725, 
262.10  and all corporations not having such an election in effect.  If 
262.11  a partnership or corporation would not otherwise be subject to 
262.12  the allocation rules, but conducts a trade or business that is 
262.13  part of a unitary business involving another legal entity that 
262.14  is subject to the allocation rules, the partnership or 
262.15  corporation is subject to the allocation rules. 
262.16     (b) Expenses, losses, and other deductions (referred to 
262.17  collectively in this paragraph as "deductions") must be 
262.18  allocated along with the item or class of gross income to which 
262.19  they are definitely related for purposes of assignment under 
262.20  this section or apportionment under section 290.191, 290.20, 
262.21  290.35, or 290.36.  Deductions not definitely related to any 
262.22  item or class of gross income are assigned to the taxpayer's 
262.23  domicile. 
262.24     (c) In the case of an individual who is a resident for only 
262.25  part of a taxable year, the individual's income, gains, losses, 
262.26  and deductions from the distributive share of a partnership, S 
262.27  corporation, trust, or estate are not subject to allocation 
262.28  outside this state to the extent of the distributive share 
262.29  multiplied by a ratio, the numerator of which is the number of 
262.30  days the individual was a resident of this state during the tax 
262.31  year of the partnership, S corporation, trust, or estate, and 
262.32  the denominator of which is the number of days in the taxable 
262.33  year of the partnership, S corporation, trust, or estate. 
262.34     Sec. 14.  Minnesota Statutes 1996, section 290.371, 
262.35  subdivision 2, is amended to read: 
262.36     Subd. 2.  [EXEMPTIONS.] A corporation is not required to 
263.1   file a notice of business activities report if:  
263.2      (1) by the end of an accounting period for which it was 
263.3   otherwise required to file a notice of business activities 
263.4   report under this section, it had received a certificate of 
263.5   authority to do business in this state; 
263.6      (2) a timely return has been filed under section 289A.08; 
263.7      (3) the corporation is exempt from taxation under this 
263.8   chapter pursuant to section 290.05; 
263.9      (4) the corporation's activities in Minnesota, or the 
263.10  interests in property which it owns, consist solely of 
263.11  activities or property exempted from jurisdiction to tax under 
263.12  section 290.015, subdivision 3, paragraph (b); or 
263.13     (5) the corporation has a valid election in effect under 
263.14  section 1362 of the Internal Revenue Code is an "S" corporation 
263.15  under section 290.9725. 
263.16     Sec. 15.  Minnesota Statutes 1996, section 290.9725, is 
263.17  amended to read: 
263.18     290.9725 [S CORPORATION.] 
263.19     For purposes of this chapter, the term "S corporation" 
263.20  means any corporation having a valid election in effect for the 
263.21  taxable year under section 1362 of the Internal Revenue Code, 
263.22  except that a corporation which either: 
263.23     (1) is a financial institution to which either section 585 
263.24  or section 593 of the Internal Revenue Code applies; or 
263.25     (2) has a wholly owned subsidiary as described in section 
263.26  362(b)(3) of the Internal Revenue Code which is a financial 
263.27  institution as described above 
263.28  is not an "S" corporation for the purposes of this chapter.  An 
263.29  S corporation shall not be subject to the taxes imposed by this 
263.30  chapter, except the taxes imposed under sections 290.0922, 
263.31  290.92, 290.9727, 290.9728, and 290.9729. 
263.32     Sec. 16.  Minnesota Statutes 1996, section 290.9727, 
263.33  subdivision 1, is amended to read: 
263.34     Subdivision 1.  [TAX IMPOSED.] For a an "S" corporation 
263.35  electing S corporation status pursuant to section 1362 of the 
263.36  Internal Revenue Code after December 31, 1986, and having a 
264.1   recognized built-in gain as defined in section 1374 of the 
264.2   Internal Revenue Code, there is imposed a tax on the taxable 
264.3   income of such S corporation, as defined in this section, at the 
264.4   rate prescribed by section 290.06, subdivision 1.  This 
264.5   subdivision does not apply to any corporation having an S 
264.6   election in effect for each of its taxable years.  An S 
264.7   corporation and any predecessor corporation must be treated as 
264.8   one corporation for purposes of the preceding sentence.  
264.9      Sec. 17.  Minnesota Statutes 1996, section 290.9728, 
264.10  subdivision 1, is amended to read: 
264.11     Subdivision 1.  [TAX IMPOSED.] There is imposed a tax on 
264.12  the taxable income of a an "S" corporation that has:  
264.13     (1) elected S corporation status pursuant to section 1362 
264.14  of the Internal Revenue Code of 1986, as amended through 
264.15  December 31, 1986, before January 1, 1987; 
264.16     (2) a net capital gain for the taxable year (i) in excess 
264.17  of $25,000 and (ii) exceeding 50 percent of the corporation's 
264.18  federal taxable income for the taxable year; and 
264.19     (3) federal taxable income for the taxable year exceeding 
264.20  $25,000.  
264.21     The tax is imposed at the rate prescribed by section 
264.22  290.06, subdivision 1.  For purposes of this section, "federal 
264.23  taxable income" means federal taxable income determined under 
264.24  section 1374(4)(d) of the Internal Revenue Code.  This section 
264.25  does not apply to an S corporation which has had an election 
264.26  under section 1362 of the Internal Revenue Code of 1954, in 
264.27  effect for the three immediately preceding taxable years.  This 
264.28  section does not apply to an S corporation that has been in 
264.29  existence for less than four taxable years and has had an 
264.30  election in effect under section 1362 of the Internal Revenue 
264.31  Code of 1954 for each of the corporation's taxable years.  For 
264.32  purposes of this section, an S corporation and any predecessor 
264.33  corporation are treated as one corporation.  
264.34     Sec. 18.  [290.9743] [ELECTION BY FASIT.] 
264.35     An entity having a valid election as a Financial Asset 
264.36  Securitization Investment Trust in effect for a taxable year 
265.1   under section 860L(a) of the Internal Revenue Code shall not be 
265.2   subject to the taxes imposed by this chapter, except the tax 
265.3   imposed under section 290.92. 
265.4      Sec. 19.  [290.9744] [FASIT INCOME TAXABLE TO HOLDERS OF 
265.5   INTERESTS.] 
265.6      The income of a FASIT is taxable to the holders of 
265.7   interests in the FASIT as provided in sections 860H to 860L of 
265.8   the Internal Revenue Code.  The income of the holders must be 
265.9   computed under the provisions of this chapter. 
265.10     Sec. 20.  Minnesota Statutes 1996, section 291.005, 
265.11  subdivision 1, is amended to read: 
265.12     Subdivision 1.  Unless the context otherwise clearly 
265.13  requires, the following terms used in this chapter shall have 
265.14  the following meanings: 
265.15     (1) "Federal gross estate" means the gross estate of a 
265.16  decedent as valued and otherwise determined for federal estate 
265.17  tax purposes by federal taxing authorities pursuant to the 
265.18  provisions of the Internal Revenue Code. 
265.19     (2) "Minnesota gross estate" means the federal gross estate 
265.20  of a decedent after (a) excluding therefrom any property 
265.21  included therein which has its situs outside Minnesota and (b) 
265.22  including therein any property omitted from the federal gross 
265.23  estate which is includable therein, has its situs in Minnesota, 
265.24  and was not disclosed to federal taxing authorities.  
265.25     (3) "Personal representative" means the executor, 
265.26  administrator or other person appointed by the court to 
265.27  administer and dispose of the property of the decedent.  If 
265.28  there is no executor, administrator or other person appointed, 
265.29  qualified, and acting within this state, then any person in 
265.30  actual or constructive possession of any property having a situs 
265.31  in this state which is included in the federal gross estate of 
265.32  the decedent shall be deemed to be a personal representative to 
265.33  the extent of the property and the Minnesota estate tax due with 
265.34  respect to the property. 
265.35     (4) "Resident decedent" means an individual whose domicile 
265.36  at the time of death was in Minnesota. 
266.1      (5) "Nonresident decedent" means an individual whose 
266.2   domicile at the time of death was not in Minnesota. 
266.3      (6) "Situs of property" means, with respect to real 
266.4   property, the state or country in which it is located; with 
266.5   respect to tangible personal property, the state or country in 
266.6   which it was normally kept or located at the time of the 
266.7   decedent's death; and with respect to intangible personal 
266.8   property, the state or country in which the decedent was 
266.9   domiciled at death. 
266.10     (7) "Commissioner" means the commissioner of revenue or any 
266.11  person to whom the commissioner has delegated functions under 
266.12  this chapter. 
266.13     (8) "Internal Revenue Code" means the United States 
266.14  Internal Revenue Code of 1986, as amended through March 22 
266.15  December 31, 1996, and includes the provisions of section 
266.16  1(a)(4) of Public Law Number 104-117. 
266.17     Sec. 21.  [FEDERAL CHANGES.] 
266.18     The changes made by sections 1118(a), 1305, 1603, 1702(e), 
266.19  and 1702(f) of the Small Business Job Protection Act, Public Law 
266.20  Number 104-188, sections 451(a), 451(b), 909, and 910 of the 
266.21  Personal Responsibility and Work Opportunity Reconciliation Act, 
266.22  Public Law Number 104-193, and the federal changes to taxable 
266.23  income of section 2 of this article which affect the Minnesota 
266.24  definition of wages under Minnesota Statutes, section 290.92, 
266.25  subdivision 1, S corporation status under Minnesota Statutes, 
266.26  section 290.9725, unrelated business income tax under Minnesota 
266.27  Statutes, section 290.05, subdivision 3, corporate alternative 
266.28  minimum tax under Minnesota Statutes, section 290.0921, 
266.29  subdivision 3, estate tax under Minnesota Statutes, sections 
266.30  291.005 and 291.03, the Minnesota working family credit under 
266.31  Minnesota Statutes, section 290.0671, subdivision 1, and the 
266.32  definition of income under Minnesota Statutes, section 290A.03, 
266.33  subdivision 3, shall become effective at the same time the 
266.34  changes become effective for federal purposes. 
266.35     Sec. 22.  [INSTRUCTION TO REVISOR.] 
266.36     In the next edition of Minnesota Statutes, the revisor of 
267.1   statutes shall substitute the phrase "Internal Revenue Code of 
267.2   1986, as amended through December 31, 1996," for the words 
267.3   "Internal Revenue Code of 1986, as amended through April 15, 
267.4   1995," wherever the phrase occurs in chapters 290A, 297, 298, 
267.5   and 469. 
267.6      Sec. 23.  [EFFECTIVE DATE.] 
267.7      Sections 3 to 5, 7 to 19 and the provision of section 2 
267.8   dealing with regulated investment companies are effective for 
267.9   tax years beginning after December 31, 1996.  The remainder of 
267.10  this article is effective at the same time and for the same 
267.11  years as the federal changes made in 1996 were effective for 
267.12  federal purposes. 
267.13                             ARTICLE 11
267.14                      SALES AND SPECIAL TAXES
267.15     Section 1.  Minnesota Statutes 1996, section 289A.56, 
267.16  subdivision 4, is amended to read: 
267.17     Subd. 4.  [CAPITAL EQUIPMENT REFUNDS; REFUNDS TO 
267.18  PURCHASERS.] Notwithstanding subdivision 3, for refunds payable 
267.19  under sections section 297A.15, subdivision 5, and 289A.50, 
267.20  subdivision 2a, interest is computed from the date the refund 
267.21  claim is filed with the commissioner.  For refunds payable under 
267.22  section 289A.50, subdivision 2a, interest is computed from the 
267.23  20th day of the month following the month of the invoice date 
267.24  for the purchase which is the subject of the refund. 
267.25     Sec. 2.  Minnesota Statutes 1996, section 296.141, 
267.26  subdivision 4, is amended to read: 
267.27     Subd. 4.  [CREDIT OR REFUND OF TAX PAID.] The commissioner 
267.28  shall allow the distributor credit or refund of the tax paid on 
267.29  gasoline and special fuel: 
267.30     (1) exported or sold for export from the state, other than 
267.31  in the supply tank of a motor vehicle or of an aircraft; 
267.32     (2) sold to the United States government to be used 
267.33  exclusively in performing its governmental functions and 
267.34  activities or to any "cost plus a fixed fee" contractor employed 
267.35  by the United States government on any national defense project; 
267.36     (3) if the fuel is placed in a tank used exclusively for 
268.1   residential heating; 
268.2      (4) destroyed by accident while in the possession of the 
268.3   distributor; 
268.4      (5) in error; 
268.5      (6) sold for storage in an on-farm bulk storage tank, 
268.6   except undyed diesel fuel, if the tax was not collected on the 
268.7   sale; and 
268.8      (6) (7) in such other cases as the commissioner may permit, 
268.9   not inconsistent with the provisions of this chapter and other 
268.10  laws relating to the gasoline and special fuel excise taxes. 
268.11     Sec. 3.  Minnesota Statutes 1996, section 296.18, 
268.12  subdivision 1, is amended to read: 
268.13     Subdivision 1.  [CLAIM; FUEL USED IN OTHER VEHICLES.] Any 
268.14  person who shall buy and use gasoline for a qualifying purpose 
268.15  other than use in motor vehicles, snowmobiles except as provided 
268.16  in clause (2), or motorboats, or special fuel for a qualifying 
268.17  purpose other than use in licensed motor vehicles, and who shall 
268.18  have paid the Minnesota excise tax directly or indirectly 
268.19  through the amount of the tax being included in the price of the 
268.20  gasoline or special fuel, or otherwise, shall be reimbursed and 
268.21  repaid the amount of the tax paid upon filing with the 
268.22  commissioner a claim in the form and manner prescribed by the 
268.23  commissioner, and containing the information the commissioner 
268.24  shall require.  By signing any such claim which is false or 
268.25  fraudulent, the applicant shall be subject to the penalties 
268.26  provided in this section for knowingly making a false claim.  
268.27  The claim shall set forth the total amount of the gasoline so 
268.28  purchased and used by the applicant other than in motor 
268.29  vehicles, or special fuel so purchased and used by the applicant 
268.30  other than in licensed motor vehicles, and shall state when and 
268.31  for what purpose it was used.  When a claim contains an error in 
268.32  computation or preparation, the commissioner is authorized to 
268.33  adjust the claim in accordance with the evidence shown on the 
268.34  claim or other information available to the commissioner.  The 
268.35  commissioner, on being satisfied that the claimant is entitled 
268.36  to the payments, shall approve the claim and transmit it to the 
269.1   commissioner of finance.  No repayment shall be made unless the 
269.2   claim and invoice shall be filed with the commissioner within 
269.3   one year from the date of the purchase.  The postmark on the 
269.4   envelope in which a written claim is mailed shall determine its 
269.5   date of filing.  The words "gasoline" or "special fuel" as used 
269.6   in this subdivision do not include aviation gasoline or special 
269.7   fuel for aircraft.  Gasoline or special fuel bought and used for 
269.8   a "qualifying purpose" means: 
269.9      (1) Gasoline or special fuel used in carrying on a trade or 
269.10  business, used on a farm situated in Minnesota, and used for a 
269.11  farming purpose.  "Farm" and "farming purpose" have the meanings 
269.12  given them in section 6420(c)(2), (3), and (4) of the Internal 
269.13  Revenue Code of 1986, as amended through December 31, 1988.  
269.14     (2) Gasoline or special fuel used for off-highway business 
269.15  use.  "Off-highway business use" means any use off the public 
269.16  highways by a person in that person's trade, business, or 
269.17  activity for the production of income.  "Off-highway business 
269.18  use" includes: 
269.19     (a) use of a passenger snowmobile off the public highways 
269.20  as part of the operations of a resort as defined in section 
269.21  157.15; and 
269.22     (b) use of gasoline or special fuel to operate a power 
269.23  takeoff unit on a vehicle, but not including fuel consumed 
269.24  during idling time.  
269.25     "Off-highway business use" does not include use as a fuel 
269.26  in a motor vehicle which, at the time of use, is registered or 
269.27  is required to be registered for highway use under the laws of 
269.28  any state or foreign country.  
269.29     (3) Gasoline or special fuel placed in the fuel tanks of 
269.30  new motor vehicles, manufactured in Minnesota, and shipped by 
269.31  interstate carrier to destinations in other states or foreign 
269.32  countries.  
269.33     By July 1, 1998, the commissioner shall adopt rules that 
269.34  determine the rates and percentages necessary to develop 
269.35  formulas for calculating and administering the refund under 
269.36  clause (2)(b). 
270.1      Sec. 4.  Minnesota Statutes 1996, section 297A.01, 
270.2   subdivision 3, is amended to read: 
270.3      Subd. 3.  A "sale" and a "purchase" includes, but is not 
270.4   limited to, each of the following transactions: 
270.5      (a) Any transfer of title or possession, or both, of 
270.6   tangible personal property, whether absolutely or conditionally, 
270.7   and the leasing of or the granting of a license to use or 
270.8   consume tangible personal property other than manufactured homes 
270.9   used for residential purposes for a continuous period of 30 days 
270.10  or more, for a consideration in money or by exchange or barter; 
270.11     (b) The production, fabrication, printing, or processing of 
270.12  tangible personal property for a consideration for consumers who 
270.13  furnish either directly or indirectly the materials used in the 
270.14  production, fabrication, printing, or processing; 
270.15     (c) The furnishing, preparing, or serving for a 
270.16  consideration of food, meals, or drinks.  "Sale" or "purchase" 
270.17  does not include: 
270.18     (1) meals or drinks served to patients, inmates, or persons 
270.19  residing at hospitals, sanitariums, nursing homes, senior 
270.20  citizens homes, and correctional, detention, and detoxification 
270.21  facilities; 
270.22     (2) meals or drinks purchased for and served exclusively to 
270.23  individuals who are 60 years of age or over and their spouses or 
270.24  to the handicapped and their spouses by governmental agencies, 
270.25  nonprofit organizations, agencies, or churches or pursuant to 
270.26  any program funded in whole or part through 42 USCA sections 
270.27  3001 through 3045, wherever delivered, prepared or served; or 
270.28     (3) meals and lunches served at public and private schools, 
270.29  universities, or colleges. 
270.30  Notwithstanding section 297A.25, subdivision 2, taxable food or 
270.31  meals include, but are not limited to, the following:  
270.32     (i) heated food or drinks; prepared by the retailer for 
270.33  immediate consumption either on or off the retailer's premises.  
270.34  For purposes of this subdivision, "food or drinks prepared for 
270.35  immediate consumption" includes any food product upon which an 
270.36  act of preparation including, but not limited to, cooking, 
271.1   mixing, sandwich making, blending, heating, or pouring has been 
271.2   performed by the retailer so the food product may be immediately 
271.3   consumed by the purchaser.  For purposes of this subdivision, 
271.4   "premises" means the total space and facilities, including 
271.5   buildings, grounds, and parking lots that are made available or 
271.6   that are available for use by the retailer or customer for the 
271.7   purpose of sale or consumption of prepared food and drinks.  
271.8   Food and drinks sold within a building or grounds which require 
271.9   an admission charge for entrance are presumed to be sold for 
271.10  consumption on the premises.  The premises of a caterer is the 
271.11  place where the catered food or drinks are served; 
271.12     (ii) sandwiches prepared by the retailer; 
271.13     (iii) single sales of prepackaged ice cream or ice milk 
271.14  novelties prepared by the retailer; 
271.15     (iv) hand-prepared or dispensed ice cream or ice milk (ii) 
271.16  ice cream, ice milk, or frozen yogurt products including 
271.17  novelties, cones, sundaes, and snow cones, sold in single or 
271.18  individual servings.  For purposes of this subdivision, "single 
271.19  or individual servings" does not include products prepackaged 
271.20  and sold in bulk containers or packaging; 
271.21     (v) (iii) soft drinks and other beverages prepared or 
271.22  served by the retailer; including all carbonated and 
271.23  noncarbonated beverages or drinks sold in liquid form except 
271.24  beverages or drinks which contain a primary dairy product or 
271.25  dairy ingredient base, beverages or drinks containing 15 or more 
271.26  percent fruit juice, or noncarbonated and noneffervescent 
271.27  bottled water sold in individual containers of one-half gallon 
271.28  or more in size; 
271.29     (vi) (iv) gum;, candy, and candy products, except when sold 
271.30  for fundraising purposes by a nonprofit organization that 
271.31  provides educational and social activities primarily for young 
271.32  people 18 years of age and under; 
271.33     (vii) (v) ice; 
271.34     (viii) (vi) all food sold in from vending machines, 
271.35  pushcarts, lunch carts, motor vehicles, or any other form of 
271.36  vehicle except home delivery vehicles; 
272.1      (ix) (vii) party trays prepared by the retailers; and 
272.2      (x) (viii) all meals and single servings of packaged snack 
272.3   food, single cans or bottles of pop, sold in restaurants and 
272.4   bars; and 
272.5      (ix) bakery products, sold in single or individual servings.
272.6   For purposes of this subdivision, "single or individual 
272.7   servings" does not include products prepackaged and sold in bulk 
272.8   containers or packaging. 
272.9      (d) The granting of the privilege of admission to places of 
272.10  amusement, recreational areas, or athletic events, except a 
272.11  world championship football game sponsored by the national 
272.12  football league, and the privilege of having access to and the 
272.13  use of amusement devices, tanning facilities, reducing salons, 
272.14  steam baths, turkish baths, health clubs, and spas or athletic 
272.15  facilities; 
272.16     (e) The furnishing for a consideration of lodging and 
272.17  related services by a hotel, rooming house, tourist court, motel 
272.18  or trailer camp and of the granting of any similar license to 
272.19  use real property other than the renting or leasing thereof for 
272.20  a continuous period of 30 days or more; 
272.21     (f) The furnishing for a consideration of electricity, gas, 
272.22  water, or steam for use or consumption within this state, or 
272.23  local exchange telephone service, intrastate toll service, and 
272.24  interstate toll service, if that service originates from and is 
272.25  charged to a telephone located in this state.  Telephone service 
272.26  does not include services purchased with prepaid telephone 
272.27  calling cards.  Telephone service includes paging services and 
272.28  private communication service, as defined in United States Code, 
272.29  title 26, section 4252(d), except for private communication 
272.30  service purchased by an agent acting on behalf of the state 
272.31  lottery.  The furnishing for a consideration of access to 
272.32  telephone services by a hotel to its guests is a sale under this 
272.33  clause.  Sales by municipal corporations in a proprietary 
272.34  capacity are included in the provisions of this clause.  The 
272.35  furnishing of water and sewer services for residential use shall 
272.36  not be considered a sale.  The sale of natural gas to be used as 
273.1   a fuel in vehicles propelled by natural gas shall not be 
273.2   considered a sale for the purposes of this section; 
273.3      (g) The furnishing for a consideration of cable television 
273.4   services, including charges for basic service, charges for 
273.5   premium service, and any other charges for any other 
273.6   pay-per-view, monthly, or similar television services; 
273.7      (h) The furnishing for a consideration of parking services, 
273.8   whether on a contractual, hourly, or other periodic basis, 
273.9   except for parking at a meter; 
273.10     (i) The furnishing for a consideration of services listed 
273.11  in this paragraph: 
273.12     (i) laundry and dry cleaning services including cleaning, 
273.13  pressing, repairing, altering, and storing clothes, linen 
273.14  services and supply, cleaning and blocking hats, and carpet, 
273.15  drapery, upholstery, and industrial cleaning.  Laundry and dry 
273.16  cleaning services do not include services provided by coin 
273.17  operated facilities operated by the customer; 
273.18     (ii) motor vehicle washing, waxing, and cleaning services, 
273.19  including services provided by coin-operated facilities operated 
273.20  by the customer, and rustproofing, undercoating, and towing of 
273.21  motor vehicles; 
273.22     (iii) building and residential cleaning, maintenance, and 
273.23  disinfecting and exterminating services; 
273.24     (iv) detective services, security services, burglar, fire 
273.25  alarm, and armored car services; but not including services 
273.26  performed within the jurisdiction they serve by off-duty 
273.27  licensed peace officers as defined in section 626.84, 
273.28  subdivision 1, or services provided by a nonprofit organization 
273.29  for monitoring and electronic surveillance of persons placed on 
273.30  in-home detention pursuant to court order or under the direction 
273.31  of the Minnesota department of corrections; 
273.32     (v) pet grooming services; 
273.33     (vi) lawn care, fertilizing, mowing, spraying and sprigging 
273.34  services; garden planting and maintenance; tree, bush, and shrub 
273.35  pruning, bracing, spraying, and surgery; indoor plant care; 
273.36  tree, bush, shrub and stump removal; and tree trimming for 
274.1   public utility lines.  Services performed under a construction 
274.2   contract for the installation of shrubbery, plants, sod, trees, 
274.3   bushes, and similar items are not taxable; 
274.4      (vii) mixed municipal solid waste management services as 
274.5   described in section 297A.45; 
274.6      (viii) massages, except when provided by a licensed health 
274.7   care facility or professional or upon written referral from a 
274.8   licensed health care facility or professional for treatment of 
274.9   illness, injury, or disease; and 
274.10     (ix) the furnishing for consideration of lodging, board and 
274.11  care services for animals in kennels and other similar 
274.12  arrangements, but excluding veterinary and horse boarding 
274.13  services. 
274.14  The services listed in this paragraph are taxable under section 
274.15  297A.02 if the service is performed wholly within Minnesota or 
274.16  if the service is performed partly within and partly without 
274.17  Minnesota and the greater proportion of the service is performed 
274.18  in Minnesota, based on the cost of performance.  In applying the 
274.19  provisions of this chapter, the terms "tangible personal 
274.20  property" and "sales at retail" include taxable services and the 
274.21  provision of taxable services, unless specifically provided 
274.22  otherwise.  Services performed by an employee for an employer 
274.23  are not taxable under this paragraph.  Services performed by a 
274.24  partnership or association for another partnership or 
274.25  association are not taxable under this paragraph if one of the 
274.26  entities owns or controls more than 80 percent of the voting 
274.27  power of the equity interest in the other entity.  Services 
274.28  performed between members of an affiliated group of corporations 
274.29  are not taxable.  For purposes of this section, "affiliated 
274.30  group of corporations" includes those entities that would be 
274.31  classified as a member of an affiliated group under United 
274.32  States Code, title 26, section 1504, as amended through December 
274.33  31, 1987, and who are eligible to file a consolidated tax return 
274.34  for federal income tax purposes; 
274.35     (j) A "sale" and a "purchase" includes the transfer of 
274.36  computer software, meaning information and directions that 
275.1   dictate the function performed by data processing equipment.  A 
275.2   "sale" and a "purchase" does not include the design, 
275.3   development, writing, translation, fabrication, lease, or 
275.4   transfer for a consideration of title or possession of a custom 
275.5   computer program; and 
275.6      (k) The granting of membership in a club, association, or 
275.7   other organization if: 
275.8      (1) the club, association, or other organization makes 
275.9   available for the use of its members sports and athletic 
275.10  facilities (without regard to whether a separate charge is 
275.11  assessed for use of the facilities); and 
275.12     (2) use of the sports and athletic facilities is not made 
275.13  available to the general public on the same basis as it is made 
275.14  available to members.  
275.15  Granting of membership includes both one-time initiation fees 
275.16  and periodic membership dues.  Sports and athletic facilities 
275.17  include golf courses, tennis, racquetball, handball and squash 
275.18  courts, basketball and volleyball facilities, running tracks, 
275.19  exercise equipment, swimming pools, and other similar athletic 
275.20  or sports facilities.  The provisions of this paragraph do not 
275.21  apply to camps or other recreation facilities owned and operated 
275.22  by an exempt organization under section 501(c)(3) of the 
275.23  Internal Revenue Code of 1986, as amended through December 31, 
275.24  1992, for educational and social activities for young people 
275.25  primarily age 18 and under.  
275.26     Sec. 5.  Minnesota Statutes 1996, section 297A.01, 
275.27  subdivision 4, is amended to read: 
275.28     Subd. 4.  (a) A "retail sale" or "sale at retail" means a 
275.29  sale for any purpose other than resale in the regular course of 
275.30  business.  
275.31     (b) Property utilized by the owner only by leasing such 
275.32  property to others or by holding it in an effort to so lease it, 
275.33  and which is put to no use by the owner other than resale after 
275.34  such lease or effort to lease, shall be considered property 
275.35  purchased for resale.  
275.36     (c) Master computer software programs that are purchased 
276.1   and used to make copies for sale or lease are considered 
276.2   property purchased for resale.  
276.3      (d) Sales of building materials, supplies and equipment to 
276.4   owners, contractors, subcontractors or builders for the erection 
276.5   of buildings or the alteration, repair or improvement of real 
276.6   property are "retail sales" or "sales at retail" in whatever 
276.7   quantity sold and whether or not for purpose of resale in the 
276.8   form of real property or otherwise.  
276.9      (e) A sale of carpeting, linoleum, or other similar floor 
276.10  covering which includes installation of the carpeting, linoleum, 
276.11  or other similar floor covering is a contract for the 
276.12  improvement of real property.  
276.13     (f) A sale of shrubbery, plants, sod, trees, and similar 
276.14  items that includes installation of the shrubbery, plants, sod, 
276.15  trees, and similar items is a contract for the improvement of 
276.16  real property.  
276.17     (g) Aircraft and parts for the repair thereof purchased by 
276.18  a nonprofit, incorporated flying club or association utilized 
276.19  solely by the corporation by leasing such aircraft to 
276.20  shareholders of the corporation shall be considered property 
276.21  purchased for resale.  The leasing of the aircraft to the 
276.22  shareholders by the flying club or association shall be 
276.23  considered a sale.  Leasing of aircraft utilized by a lessee for 
276.24  the purpose of leasing to others, whether or not the lessee also 
276.25  utilizes the aircraft for flight instruction where no separate 
276.26  charge is made for aircraft rental or for charter service, shall 
276.27  be considered a purchase for resale; provided, however, that a 
276.28  proportionate share of the lease payment reflecting use for 
276.29  flight instruction or charter service is subject to tax pursuant 
276.30  to section 297A.14. 
276.31     (h) Tangible personal property that is utilized or employed 
276.32  in the furnishing or providing of services under section 
276.33  297A.01, subdivision 3, paragraph (d), or in conducting lawful 
276.34  gambling under chapter 349 or the state lottery under chapter 
276.35  349A, including property given as promotional items, shall not 
276.36  be considered property purchased for resale.  Machines, 
277.1   equipment, or devices that are used to furnish, provide, or 
277.2   dispense goods or services, including coin-operated devices, 
277.3   shall not be considered property purchased for resale. 
277.4      (i) Tangible personal property that is awarded as prizes 
277.5   shall not be considered property purchased for resale. 
277.6      Sec. 6.  Minnesota Statutes 1996, section 297A.01, 
277.7   subdivision 7, is amended to read: 
277.8      Subd. 7.  "Storage" and "use" do not include the keeping, 
277.9   or retaining or exercising of any right or power over in a 
277.10  public warehouse of tangible personal property or tickets or 
277.11  admissions to places of amusement or athletic events when 
277.12  shipped or brought into Minnesota by common carrier, for the 
277.13  purpose of subsequently being transported outside Minnesota and 
277.14  thereafter used solely outside Minnesota, except in the course 
277.15  of interstate commerce, or for the purpose of being processed, 
277.16  fabricated or manufactured into, attached to or incorporated 
277.17  into other tangible personal property to be transported outside 
277.18  Minnesota and not thereafter returned to a point within 
277.19  Minnesota, except in the course of interstate commerce. 
277.20     Sec. 7.  Minnesota Statutes 1996, section 297A.01, 
277.21  subdivision 11, is amended to read: 
277.22     Subd. 11.  "Tangible personal property" means corporeal 
277.23  personal property of any kind whatsoever, including property 
277.24  which is to become real property as a result of incorporation, 
277.25  attachment, or installation following its acquisition. 
277.26     Personal property does not include: 
277.27     (a) large ponderous machinery and equipment used in a 
277.28  business or production activity which at common law would be 
277.29  considered to be real property; 
277.30     (b) property which is subject to an ad valorem property 
277.31  tax; 
277.32     (c) property described in section 272.02, subdivision 1, 
277.33  clause (8), paragraphs (a) to (d); 
277.34     (d) property described in section 272.03, subdivision 2, 
277.35  clauses (3) and (5). 
277.36     Tangible personal property includes computer software, 
278.1   whether contained on tape, discs, cards, or other 
278.2   devices.  Tangible personal property also includes prepaid 
278.3   telephone calling cards. 
278.4      Sec. 8.  Minnesota Statutes 1996, section 297A.01, 
278.5   subdivision 15, is amended to read: 
278.6      Subd. 15.  "Farm machinery" means new or used machinery, 
278.7   equipment, implements, accessories, and contrivances used 
278.8   directly and principally in the production for sale, but not 
278.9   including the processing, of livestock, dairy animals, dairy 
278.10  products, poultry and poultry products, fruits, 
278.11  vegetables, flowering or ornamental plants including nursery 
278.12  stock, forage, grains and bees and apiary products.  "Farm 
278.13  machinery" includes: 
278.14     (1) machinery for the preparation, seeding or cultivation 
278.15  of soil for growing agricultural crops, as defined in section 
278.16  97A.028, and sod, harvesting and threshing of agricultural 
278.17  products, harvesting or mowing of sod, and certain machinery for 
278.18  dairy, livestock and poultry farms; 
278.19     (2) barn cleaners, milking systems, grain dryers, automatic 
278.20  feeding systems and similar installations, whether or not the 
278.21  equipment is installed by the seller and becomes part of the 
278.22  real property; 
278.23     (3) irrigation equipment sold for exclusively agricultural 
278.24  use, including pumps, pipe fittings, valves, sprinklers and 
278.25  other equipment necessary to the operation of an irrigation 
278.26  system when sold as part of an irrigation system, whether or not 
278.27  the equipment is installed by the seller and becomes part of the 
278.28  real property; 
278.29     (4) logging equipment, including chain saws used for 
278.30  commercial logging; 
278.31     (5) fencing used for the containment of farmed cervidae, as 
278.32  defined in section 17.451, subdivision 2; and 
278.33     (6) primary and backup generator units used to generate 
278.34  electricity for the purpose of operating farm machinery, as 
278.35  defined in this subdivision, or providing light or space heating 
278.36  necessary for the production of livestock, dairy animals, dairy 
279.1   products, or poultry and poultry products.  
279.2      Repair or replacement parts for farm machinery shall not 
279.3   be, except tires, are included in the definition of farm 
279.4   machinery if the part replaces a farm machinery part assigned a 
279.5   specific or generic part number by the manufacturer of the farm 
279.6   machinery.  
279.7      Tools, shop equipment, grain bins, feed bunks, fencing 
279.8   material except fencing material covered by clause (5), 
279.9   communication equipment and other farm supplies shall not be 
279.10  considered to be farm machinery.  "Farm machinery" does not 
279.11  include motor vehicles taxed under chapter 297B, snowmobiles, 
279.12  snow blowers, lawn mowers except those used in the production of 
279.13  sod for sale, garden-type tractors or garden tillers and the 
279.14  repair and replacement parts for those vehicles and machines. 
279.15     Sec. 9.  Minnesota Statutes 1996, section 297A.01, 
279.16  subdivision 16, is amended to read: 
279.17     Subd. 16.  [CAPITAL EQUIPMENT.] (a) Capital equipment means 
279.18  machinery and equipment purchased or leased for use in this 
279.19  state and used by the purchaser or lessee primarily for 
279.20  manufacturing, fabricating, mining, or refining tangible 
279.21  personal property to be sold ultimately at retail and for 
279.22  electronically transmitting results retrieved by a customer of 
279.23  an on-line computerized data retrieval system.  
279.24     (b) Capital equipment includes all machinery and equipment 
279.25  that is essential to the integrated production process.  Capital 
279.26  equipment includes, but is not limited to: 
279.27     (1) machinery and equipment used or required to operate, 
279.28  control, or regulate the production equipment; 
279.29     (2) machinery and equipment used for research and 
279.30  development, design, quality control, and testing activities; 
279.31     (3) environmental control devices that are used to maintain 
279.32  conditions such as temperature, humidity, light, or air pressure 
279.33  when those conditions are essential to and are part of the 
279.34  production process; or 
279.35     (4) materials and supplies necessary to construct and 
279.36  install machinery or equipment.; 
280.1      (5) repair and replacement parts, including accessories, 
280.2   whether purchased as spare parts, repair parts, or as upgrades 
280.3   or modifications to machinery or equipment; 
280.4      (6) materials used for foundations that support machinery 
280.5   or equipment; or 
280.6      (7) materials used to construct and install special purpose 
280.7   buildings used in the production process. 
280.8      (c) Capital equipment does not include the following: 
280.9      (1) repair or replacement parts, including accessories, 
280.10  whether purchased as spare parts, repair parts, or as upgrades 
280.11  or modifications, and whether purchased before or after the 
280.12  machinery or equipment is placed into service.  Parts or 
280.13  accessories are treated as capital equipment only to the extent 
280.14  that they are a part of and are essential to the operation of 
280.15  the machinery or equipment as initially purchased; 
280.16     (2) motor vehicles taxed under chapter 297B; 
280.17     (3) (2) machinery or equipment used to receive or store raw 
280.18  materials; 
280.19     (4) (3) building materials; 
280.20     (5) (4) machinery or equipment used for nonproduction 
280.21  purposes, including, but not limited to, the following:  
280.22  machinery and equipment used for plant security, fire 
280.23  prevention, first aid, and hospital stations; machinery and 
280.24  equipment used in support operations or for administrative 
280.25  purposes; machinery and equipment used solely for pollution 
280.26  control, prevention, or abatement; and machinery and equipment 
280.27  used in plant cleaning, disposal of scrap and waste, plant 
280.28  communications, space heating, lighting, or safety; 
280.29     (6) (5) "farm machinery" as defined by subdivision 15, and 
280.30  "aquaculture production equipment" as defined by subdivision 19, 
280.31  and "replacement capital equipment" as defined by subdivision 
280.32  20; or 
280.33     (7) (6) any other item that is not essential to the 
280.34  integrated process of manufacturing, fabricating, mining, or 
280.35  refining. 
280.36     (d) For purposes of this subdivision: 
281.1      (1) "Equipment" means independent devices or tools separate 
281.2   from machinery but essential to an integrated production 
281.3   process, including computers and software, used in operating, 
281.4   controlling, or regulating machinery and equipment; and any 
281.5   subunit or assembly comprising a component of any machinery or 
281.6   accessory or attachment parts of machinery, such as tools, dies, 
281.7   jigs, patterns, and molds. 
281.8      (2) "Fabricating" means to make, build, create, produce, or 
281.9   assemble components or property to work in a new or different 
281.10  manner. 
281.11     (3) "Machinery" means mechanical, electronic, or electrical 
281.12  devices, including computers and software, that are purchased or 
281.13  constructed to be used for the activities set forth in paragraph 
281.14  (a), beginning with the removal of raw materials from inventory 
281.15  through the completion of the product, including packaging of 
281.16  the product. 
281.17     (4) "Manufacturing" means an operation or series of 
281.18  operations where raw materials are changed in form, composition, 
281.19  or condition by machinery and equipment and which results in the 
281.20  production of a new article of tangible personal property.  For 
281.21  purposes of this subdivision, "manufacturing" includes the 
281.22  generation of electricity or steam to be sold at retail. 
281.23     (5) "Mining" means the extraction of minerals, ores, stone, 
281.24  and peat. 
281.25     (6) "On-line data retrieval system" means a system whose 
281.26  cumulation of information is equally available and accessible to 
281.27  all its customers. 
281.28     (7) "Pollution control equipment" means machinery and 
281.29  equipment used to eliminate, prevent, or reduce pollution 
281.30  resulting from an activity described in paragraph (a). 
281.31     (8) "Primarily" means machinery and equipment used 50 
281.32  percent or more of the time in an activity described in 
281.33  paragraph (a). 
281.34     (9) "Refining" means the process of converting a natural 
281.35  resource to a product, including the treatment of water to be 
281.36  sold at retail. 
282.1      (e) For purposes of this subdivision the requirement that 
282.2   the machinery or equipment "must be used by the purchaser or 
282.3   lessee" means that the person who purchases or leases the 
282.4   machinery or equipment must be the one who uses it for the 
282.5   qualifying purpose.  When a contractor buys and installs 
282.6   machinery or equipment as part of an improvement to real 
282.7   property, only the contractor is considered the purchaser. 
282.8      (f) Notwithstanding prior provisions of this subdivision, 
282.9   machinery and equipment purchased or leased to replace machinery 
282.10  and equipment used in the mining or production of taconite shall 
282.11  qualify as capital equipment. 
282.12     Sec. 10.  Minnesota Statutes 1996, section 297A.02, 
282.13  subdivision 2, is amended to read: 
282.14     Subd. 2.  [MACHINERY AND EQUIPMENT.] Notwithstanding the 
282.15  provisions of subdivision 1, the rate of the excise tax imposed 
282.16  upon sales of farm machinery and aquaculture production 
282.17  equipment is: 
282.18     for purchases prior to July 1, 1998, 2.5 percent, 
282.19     for purchases after June 30, 1998, and prior to July 1, 
282.20  1999, 1.5 percent, 
282.21     purchases after June 30, 1999, are exempt. 
282.22     Sec. 11.  Minnesota Statutes 1996, section 297A.14, 
282.23  subdivision 4, is amended to read: 
282.24     Subd. 4.  [DE MINIMIS EXEMPTION.] Purchases subject to use 
282.25  tax under this section are exempt if (1) the purchase is made by 
282.26  an individual for personal use, and (2) the total amount of 
282.27  purchases made by a person, other than a person who has or is 
282.28  obligated to have a permit under section 297A.04, that are 
282.29  subject to the use tax, do not exceed $770 in the calendar 
282.30  year.  For purposes of this subdivision, "personal use" includes 
282.31  purchases for gifts.  If an individual a person makes purchases, 
282.32  which are subject to use tax, of more than $770 in the calendar 
282.33  year the individual the person must pay the use tax on the 
282.34  entire amount. 
282.35     Sec. 12.  Minnesota Statutes 1996, section 297A.211, 
282.36  subdivision 1, is amended to read: 
283.1      Subdivision 1.  Every person, as defined in this chapter, 
283.2   who is engaged in interstate for-hire transportation of tangible 
283.3   personal property or passengers by motor vehicle may at their 
283.4   option, under rules prescribed by the commissioner, register as 
283.5   retailers and pay the taxes imposed by this chapter in 
283.6   accordance with this section.  Any taxes paid under this section 
283.7   are deemed use taxes, except local sales taxes when no 
283.8   corresponding local use tax is imposed.  Persons referred to 
283.9   herein are:  (1) persons possessing a certificate or permit or 
283.10  having completed a registration process that authorizes for-hire 
283.11  transportation of property or passengers from the United States 
283.12  Department of Transportation, the transportation regulation 
283.13  board, or the department of transportation; or (2) persons 
283.14  transporting commodities defined as "exempt" in for-hire 
283.15  transportation in interstate commerce; or (3) persons who, 
283.16  pursuant to contracts with persons described in clause (1) or 
283.17  (2) above, transport tangible personal property in interstate 
283.18  commerce.  Persons qualifying under clauses (2) and (3) must 
283.19  maintain on a current basis the same type of mileage records 
283.20  that are required by persons specified in clause (1) by the 
283.21  United States Department of Transportation.  Persons who in the 
283.22  course of their business are transporting solely their own goods 
283.23  in interstate commerce may also register as retailers pursuant 
283.24  to rules prescribed by the commissioner and pay the taxes 
283.25  imposed by this chapter in accordance with this section.  
283.26     Sec. 13.  Minnesota Statutes 1996, section 297A.25, 
283.27  subdivision 2, is amended to read: 
283.28     Subd. 2.  [FOOD PRODUCTS.] The gross receipts from the sale 
283.29  of food products including but not limited to cereal and cereal 
283.30  products, butter, cheese, milk and milk products, oleomargarine, 
283.31  meat and meat products, fish and fish products, eggs and egg 
283.32  products, vegetables and vegetable products, fruit and fruit 
283.33  products, spices and salt, sugar and sugar products, coffee and 
283.34  coffee substitutes, tea, cocoa and cocoa products, and food 
283.35  products which are not taxable pursuant to section 297A.01, 
283.36  subdivision 3, clause (c) are exempt.  This exemption does not 
284.1   include the following:  
284.2      (1) candy and candy products, except when sold for 
284.3   fundraising purposes by a nonprofit organization that provides 
284.4   educational and social activities for young people primarily 
284.5   aged 18 and under; 
284.6      (2) carbonated beverages, beverages commonly referred to as 
284.7   soft drinks containing less than 15 percent fruit juice, or 
284.8   bottled water other than noncarbonated and noneffervescent 
284.9   bottled water sold in individual containers of one-half gallon 
284.10  or more in size. 
284.11     Sec. 14.  Minnesota Statutes 1996, section 297A.25, 
284.12  subdivision 3, is amended to read: 
284.13     Subd. 3.  [MEDICINES; MEDICAL DEVICES.] The gross receipts 
284.14  from the sale of prescribed drugs, prescribed medicine and 
284.15  insulin, intended for use, internal or external, in the cure, 
284.16  mitigation, treatment or prevention of illness or disease in 
284.17  human beings are exempt, together with prescription glasses, 
284.18  fever thermometers, therapeutic, and prosthetic devices.  
284.19  "Prescribed drugs" or "prescribed medicine" includes 
284.20  over-the-counter drugs or medicine prescribed by a licensed 
284.21  physician.  "Therapeutic devices" includes reusable finger 
284.22  pricking devices for the extraction of blood, blood glucose 
284.23  monitoring machines, and other diagnostic agents used in 
284.24  diagnosing, monitoring, or treating diabetes.  Nonprescription 
284.25  analgesics consisting principally (determined by the weight of 
284.26  all ingredients) of acetaminophen, acetylsalicylic acid, 
284.27  ibuprofen, ketoprofen, naproxen, and other nonprescription 
284.28  analgesics that are approved by the United States Food and Drug 
284.29  Administration for internal use by human beings, or a 
284.30  combination thereof, are exempt. 
284.31     Sec. 15.  Minnesota Statutes 1996, section 297A.25, 
284.32  subdivision 7, is amended to read: 
284.33     Subd. 7.  [PETROLEUM PRODUCTS.] The gross receipts from the 
284.34  sale of and storage, use or consumption of the following 
284.35  petroleum products are exempt:  
284.36     (1) products upon which a tax has been imposed and paid 
285.1   under the provisions of chapter 296, and no refund has been or 
285.2   will be allowed because the buyer used the fuel for nonhighway 
285.3   use; 
285.4      (2) products which are used in the improvement of 
285.5   agricultural land by constructing, maintaining, and repairing 
285.6   drainage ditches, tile drainage systems, grass waterways, water 
285.7   impoundment, and other erosion control structures; 
285.8      (3) products purchased by a transit system receiving 
285.9   financial assistance under section 174.24 or 473.384; or 
285.10     (4) products used in a passenger snowmobile, as defined in 
285.11  section 296.01, subdivision 27a, for off-highway business use as 
285.12  part of the operations of a resort as provided under section 
285.13  296.18, subdivision 1, clause (2); or 
285.14     (5) products purchased by a state or a political 
285.15  subdivision of a state for use in emergency rescue vehicles and 
285.16  fire trucks and apparatus. 
285.17     Sec. 16.  Minnesota Statutes 1996, section 297A.25, 
285.18  subdivision 11, is amended to read: 
285.19     Subd. 11.  [SALES TO GOVERNMENT.] The gross receipts from 
285.20  all sales, including sales in which title is retained by a 
285.21  seller or a vendor or is assigned to a third party under an 
285.22  installment sale or lease purchase agreement under section 
285.23  465.71, of tangible personal property to, and all storage, use 
285.24  or consumption of such property by, the United States and its 
285.25  agencies and instrumentalities, the University of Minnesota, 
285.26  state universities, community colleges, technical colleges, 
285.27  state academies, the Lola and Rudy Perpich Minnesota center for 
285.28  arts education, and school districts are exempt. 
285.29     As used in this subdivision, "school districts" means 
285.30  public school entities and districts of every kind and nature 
285.31  organized under the laws of the state of Minnesota, including, 
285.32  without limitation, school districts, intermediate school 
285.33  districts, education districts, service cooperatives, secondary 
285.34  vocational cooperative centers, special education cooperatives, 
285.35  joint purchasing cooperatives, telecommunication cooperatives, 
285.36  regional management information centers, and any instrumentality 
286.1   of a school district, as defined in section 471.59. 
286.2      Sales exempted by this subdivision include sales under 
286.3   section 297A.01, subdivision 3, paragraph (f), but do not 
286.4   include sales under section 297A.01, subdivision 3, paragraph 
286.5   (j), clause (vii).  
286.6      Sales to hospitals and nursing homes owned and operated by 
286.7   the state or political subdivisions of the state are exempt 
286.8   under this subdivision.  
286.9      The sales to and exclusively for the use of libraries of 
286.10  books, periodicals, audio-visual materials and equipment, 
286.11  photocopiers for use by the public, and all cataloguing and 
286.12  circulation equipment, and cataloguing and circulation software 
286.13  for library use are exempt under this subdivision.  For purposes 
286.14  of this paragraph "libraries" means libraries as defined in 
286.15  section 134.001, county law libraries under chapter 134A, the 
286.16  state library under section 480.09, and the legislative 
286.17  reference library. 
286.18     Sales of supplies and equipment used in the operation of an 
286.19  ambulance service owned and operated by a political subdivision 
286.20  of the state are exempt under this subdivision provided that the 
286.21  supplies and equipment are used in the course of providing 
286.22  medical care.  Sales to a political subdivision of repair and 
286.23  replacement parts for emergency rescue vehicles and fire trucks 
286.24  and apparatus are exempt under this subdivision.  
286.25     Sales to a political subdivision of machinery and 
286.26  equipment, except for motor vehicles, used directly for mixed 
286.27  municipal solid waste management services at a solid waste 
286.28  disposal facility as defined in section 115A.03, subdivision 10, 
286.29  are exempt under this subdivision.  
286.30     Sales to political subdivisions of chore and homemaking 
286.31  services to be provided to elderly or disabled individuals are 
286.32  exempt. 
286.33     Sales of telephone services to the department of 
286.34  administration that are used to provide telecommunications 
286.35  services through the intertechnologies revolving fund are exempt 
286.36  under this subdivision. 
287.1      This exemption shall not apply to building, construction or 
287.2   reconstruction materials purchased by a contractor or a 
287.3   subcontractor as a part of a lump-sum contract or similar type 
287.4   of contract with a guaranteed maximum price covering both labor 
287.5   and materials for use in the construction, alteration, or repair 
287.6   of a building or facility.  This exemption does not apply to 
287.7   construction materials purchased by tax exempt entities or their 
287.8   contractors to be used in constructing buildings or facilities 
287.9   which will not be used principally by the tax exempt entities. 
287.10     This exemption does not apply to the leasing of a motor 
287.11  vehicle as defined in section 297B.01, subdivision 5, except for 
287.12  leases entered into by the United States or its agencies or 
287.13  instrumentalities.  
287.14     The tax imposed on sales to political subdivisions of the 
287.15  state under this section applies to all political subdivisions 
287.16  other than those explicitly exempted under this subdivision, 
287.17  notwithstanding section 115A.69, subdivision 6, 116A.25, 
287.18  360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2, 
287.19  469.127, 473.448, 473.545, or 473.608 or any other law to the 
287.20  contrary enacted before 1992. 
287.21     Sales exempted by this subdivision include sales made to 
287.22  other states or political subdivisions of other states, if the 
287.23  sale would be exempt from taxation if it occurred in that state, 
287.24  but do not include sales under section 297A.01, subdivision 3, 
287.25  paragraphs (c) and (e). 
287.26     Sec. 17.  Minnesota Statutes 1996, section 297A.25, 
287.27  subdivision 56, is amended to read: 
287.28     Subd. 56.  [FIREFIGHTERS PERSONAL PROTECTIVE EQUIPMENT.] 
287.29  The gross receipts from the sale of and storage, use, or 
287.30  consumption of firefighters personal protective equipment are 
287.31  exempt if purchased by, or when authorized by and for the use 
287.32  of, an organized fire department, fire protection district, or 
287.33  fire company, regularly charged with the responsibility of 
287.34  providing fire protection to the state or a political 
287.35  subdivision.  For purposes of this subdivision, "personal 
287.36  protective equipment" includes:  helmets (including face 
288.1   shields, chin straps, and neck liners), bunker coats and pants 
288.2   (including pant suspenders), boots, gloves, head covers or 
288.3   hoods, wildfire jackets, protective coveralls, goggles, 
288.4   self-contained breathing apparatuses, canister filter masks, 
288.5   personal alert safety systems, spanner belts, optical or thermal 
288.6   imaging search devices, and all safety equipment required by the 
288.7   Occupational Safety and Health Administration. 
288.8      Sec. 18.  Minnesota Statutes 1996, section 297A.25, 
288.9   subdivision 59, is amended to read: 
288.10     Subd. 59.  [FARM MACHINERY.] From July 1, 1994, until June 
288.11  30, 1997, The gross receipts from the sale of used farm 
288.12  machinery are exempt.  In the case of leased farm machinery, 
288.13  used machinery is machinery which has been used for its intended 
288.14  purpose for a growing season or a harvest season.  
288.15     Sec. 19.  Minnesota Statutes 1996, section 297A.25, is 
288.16  amended by adding a subdivision to read: 
288.17     Subd. 62.  [MATERIALS USED IN PROVIDING TAXABLE 
288.18  SERVICES.] (a) The gross receipts from the sale of and the 
288.19  storage, use, or consumption of all materials used or consumed 
288.20  in providing a taxable service intended to be sold ultimately at 
288.21  retail are exempt. 
288.22     (b) This exemption includes, but is not limited to: 
288.23     (1) chemicals, fuels, petroleum products, lubricants, 
288.24  packaging materials, seeds, trees, fertilizers, herbicides, 
288.25  electricity, gas, and steam used or consumed in providing the 
288.26  taxable service; 
288.27     (2) chemicals, fuels, and electricity used to treat waste 
288.28  generated as a result of providing the taxable service; and 
288.29     (3) accessory tools, equipment, and other items that are 
288.30  separate detachable units used in providing the service and that 
288.31  have an ordinary useful life of less than 12 months. 
288.32     (c) This exemption does not include: 
288.33     (1) machinery, equipment, implements, tools, accessories, 
288.34  appliances, contrivances, furniture, and fixtures used in 
288.35  providing the taxable service; and 
288.36     (2) fuel, electricity, gas, and steam used for space 
289.1   heating or lighting. 
289.2      (d) For purposes of this subdivision, "taxable services" 
289.3   means the services listed in section 297A.01, subdivision 3, 
289.4   paragraph (i), except solid waste management services as 
289.5   described in section 297A.45. 
289.6      Sec. 20.  Minnesota Statutes 1996, section 297A.25, is 
289.7   amended by adding a subdivision to read: 
289.8      Subd. 63.  [HOSPITALS.] The gross receipts from the sale of 
289.9   tangible personal property to, and the storage, use, or 
289.10  consumption of such property by, a hospital are exempt, if the 
289.11  property purchased is to be used in providing hospital services 
289.12  to human beings.  For purposes of this subdivision, "hospital" 
289.13  means a hospital organized and operated for charitable purposes 
289.14  within the meaning of section 501(c)(3) of the Internal Revenue 
289.15  Code of 1986, as amended, and licensed under chapter 144 or by 
289.16  any other jurisdiction.  For purposes of this subdivision, 
289.17  "hospital services" are services authorized or required to be 
289.18  performed by a "hospital" under chapter 144 and regulations 
289.19  thereunder or under the applicable licensure law of any other 
289.20  jurisdiction.  Sales exempted by this subdivision do not include 
289.21  sales under section 297A.01, subdivision 3, paragraphs (c), (e), 
289.22  and (i), clause (vii).  This exemption does not apply to 
289.23  building, construction, or reconstruction materials purchased by 
289.24  a contractor or a subcontractor as a part of a lump-sum contract 
289.25  or similar type of contract with a guaranteed maximum price 
289.26  covering both labor and materials for use in the construction, 
289.27  alteration, or repair of a hospital.  This exemption does not 
289.28  apply to construction materials to be used in constructing 
289.29  buildings or facilities which will not be used principally by a 
289.30  hospital.  This exemption does not apply to the leasing of a 
289.31  motor vehicle as defined in section 297B.01, subdivision 5. 
289.32     Sec. 21.  Minnesota Statutes 1996, section 297A.25, is 
289.33  amended by adding a subdivision to read: 
289.34     Subd. 64.  [COPIES OF COURT REPORTER DOCUMENTS.] The gross 
289.35  receipts from sales of, and use, storage, or consumption of, 
289.36  transcripts or copies of transcripts of verbatim testimony 
290.1   produced and sold by court reporters or other transcribers of 
290.2   legal proceedings to individuals or entities that are parties to 
290.3   or representatives of parties to the proceeding to which the 
290.4   transcript relates, are exempt. 
290.5      Sec. 22.  Minnesota Statutes 1996, section 297A.25, is 
290.6   amended by adding a subdivision to read: 
290.7      Subd. 65.  [REGIONWIDE PUBLIC SAFETY RADIO COMMUNICATION 
290.8   SYSTEM; PRODUCTS AND SERVICES.] The gross receipts from the sale 
290.9   of, and the storage, use, or consumption of, products and 
290.10  services including end user equipment used for construction, 
290.11  ownership, operation, maintenance, and enhancement of the 
290.12  backbone system of the regionwide public safety radio 
290.13  communication system established under sections 473.891 to 
290.14  473.905, are exempt.  For purposes of this subdivision, backbone 
290.15  system is defined in section 473.891, subdivision 9. 
290.16     Sec. 23.  Minnesota Statutes 1996, section 297A.25, is 
290.17  amended by adding a subdivision to read: 
290.18     Subd. 66.  [FIREWOOD.] The gross receipts from the sale of 
290.19  wood used for fires for heating, cooking, or any other purpose, 
290.20  except for the generation of electricity, steam, or heat to be 
290.21  sold at retail, are exempt. 
290.22     Sec. 24.  [297A.48] [LOCAL SALES TAX RULES.] 
290.23     Subdivision 1.  [AUTHORIZATION; SCOPE.] (a) A political 
290.24  subdivision of this state may impose a general sales tax if 
290.25  permitted by special law or if the subdivision enacted and 
290.26  imposed the tax before the effective date of section 477A.016 
290.27  and its predecessor provision. 
290.28     (b) This section governs the imposition of a general sales 
290.29  tax by the political subdivision.  The provisions of this 
290.30  section preempt the provisions of any special law: 
290.31     (1) enacted before its effective date, or 
290.32     (2) enacted after its effective date that does not 
290.33  explicitly exempt the special law provision from this section's 
290.34  rules by reference. 
290.35     (c) This section does not apply to or preempt a sales tax 
290.36  on motor vehicles or a special excise tax on motor vehicles. 
291.1      Subd. 2.  [TAX BASE.] (a) The tax applies to sales taxable 
291.2   under this chapter that occur within the political subdivision. 
291.3      (b) Taxable services are subject to a political 
291.4   subdivision's sales tax, if they are performed either: 
291.5      (1) within the political subdivision, or 
291.6      (2) partly within and partly without the political 
291.7   subdivision and more of the service is performed within the 
291.8   political subdivision, based on the cost of performance. 
291.9      Subd. 3.  [TAX RATE.] (a) The tax rate is as specified in 
291.10  the special law authorization and as imposed by the political 
291.11  subdivision. 
291.12     (b) The full political subdivision rate applies to any 
291.13  sales that are taxed at a state rate less than or more than the 
291.14  state general sales and use tax rate. 
291.15     Subd. 4.  [USE TAX.] A compensating use tax applies, at the 
291.16  same rate as the sales tax, on the use, storage, distribution, 
291.17  or consumption of tangible personal property or taxable services.
291.18     Subd. 5.  [EXEMPTIONS.] (a) All goods or services that are 
291.19  otherwise exempt from taxation under this chapter are exempt 
291.20  from a political subdivision's tax. 
291.21     (b) The gross receipts from the sale of tangible personal 
291.22  property that meets the requirement of section 297A.25, 
291.23  subdivision 5, are exempt, except the qualification test applies 
291.24  based on the boundaries of the political subdivision instead of 
291.25  the state of Minnesota. 
291.26     (c) All mobile transportation equipment, and parts and 
291.27  accessories attached to or to be attached to the equipment are 
291.28  exempt, if purchased by a holder of a motor carrier direct pay 
291.29  permit under section 297A.211.  
291.30     Subd. 6.  [CREDIT FOR OTHER LOCAL TAXES.] If a person paid 
291.31  sales or use tax to another political subdivision on tangible 
291.32  personal property or another item subject to tax under this 
291.33  section, a credit applies against the tax imposed under this 
291.34  section.  The credit equals the tax the person paid to the other 
291.35  political subdivision for the item.  
291.36     Subd. 7.  [ENFORCEMENT; COLLECTION; AND ADMINISTRATION.] (a)
292.1   The commissioner of revenue shall collect the taxes subject to 
292.2   this section.  The commissioner may collect the tax with the 
292.3   state sales and use tax.  All taxes under this section are 
292.4   subject to the same penalties, interest, and enforcement 
292.5   provisions as apply to the state sales and use tax. 
292.6      (b) A request for a refund of state sales tax paid in 
292.7   excess of the amount of tax legally due includes a request for a 
292.8   refund of the political subdivision taxes paid on the goods or 
292.9   services.  The commissioner must refund to the taxpayer the full 
292.10  amount of the political subdivision taxes paid on exempt sales 
292.11  or use. 
292.12     (c) A political subdivision that is collecting and 
292.13  administering its own sales and use tax before January 1, 1998, 
292.14  may elect to be exempt from this subdivision and subdivision 8. 
292.15     Subd. 8.  [REVENUES; COST OF COLLECTION.] The commissioner 
292.16  shall remit the proceeds of the tax, less refunds and a 
292.17  proportionate share of the cost of collection, at least 
292.18  quarterly, to the political subdivision.  The commissioner shall 
292.19  deduct from the proceeds remitted an amount that equals 
292.20     (1) the direct and indirect costs of the department to 
292.21  administer, audit, and collect the political subdivision's tax, 
292.22  plus 
292.23     (2) the political subdivision's proportionate share of the 
292.24  indirect cost of administering all taxes under this section. 
292.25     Subd. 9.  [EFFECTIVE DATES; NOTIFICATION.] (a) A political 
292.26  subdivision may impose a tax under this section starting only on 
292.27  the first day of a calendar quarter.  A political subdivision 
292.28  may repeal a tax under this section stopping only on the last 
292.29  day of a calendar quarter. 
292.30     (b) The political subdivision must notify the commissioner 
292.31  of revenue at least 90 days before imposing or repealing a tax 
292.32  under this section. 
292.33     Subd. 10.  [APPLICATION.] This section applies to all local 
292.34  sales taxes authorized on or after the day of enactment of this 
292.35  act.  Starting January 1, 2000, this section applies to all 
292.36  local sales tax that were authorized before the day of enactment 
293.1   of this act. 
293.2      Sec. 25.  Minnesota Statutes 1996, section 297B.01, 
293.3   subdivision 7, is amended to read: 
293.4      Subd. 7.  [SALE, SELLS, SELLING, PURCHASE, PURCHASED, OR 
293.5   ACQUIRED.] "Sale," "sells," "selling," "purchase," "purchased," 
293.6   or "acquired" means any transfer of title of any motor vehicle, 
293.7   whether absolutely or conditionally, for a consideration in 
293.8   money or by exchange or barter for any purpose other than resale 
293.9   in the regular course of business.  Any motor vehicle utilized 
293.10  by the owner only by leasing such vehicle to others or by 
293.11  holding it in an effort to so lease it, and which is put to no 
293.12  other use by the owner other than resale after such lease or 
293.13  effort to lease, shall be considered property purchased for 
293.14  resale.  The terms also shall include any transfer of title or 
293.15  ownership of a motor vehicle by way of gift or by any other 
293.16  manner or by any other means whatsoever, for or without 
293.17  consideration, except that these terms shall not include: 
293.18     (a) the acquisition of a motor vehicle by inheritance from 
293.19  or by bequest of, a decedent who owned it; 
293.20     (b) the transfer of a motor vehicle which was previously 
293.21  licensed in the names of two or more joint tenants and 
293.22  subsequently transferred without monetary consideration to one 
293.23  or more of the joint tenants; 
293.24     (c) the transfer of a motor vehicle by way of gift between 
293.25  a husband and wife or parent and child; or 
293.26     (d) the voluntary or involuntary transfer of a motor 
293.27  vehicle between a husband and wife in a divorce proceeding.; or 
293.28     (e) the transfer of a motor vehicle by way of a gift to an 
293.29  organization that is exempt from federal income taxation under 
293.30  section 501(c)(3) of the Internal Revenue Code, as amended 
293.31  through December 31, 1996, when the motor vehicle will be used 
293.32  exclusively for religious, charitable, or educational purposes. 
293.33     Sec. 26.  Minnesota Statutes 1996, section 297B.01, 
293.34  subdivision 8, is amended to read: 
293.35     Subd. 8.  [PURCHASE PRICE.] "Purchase price" means the 
293.36  total consideration valued in money for a sale, whether paid in 
294.1   money or otherwise.  The purchase price excludes the amount of a 
294.2   manufacturer's rebate paid or payable to the purchaser.  If a 
294.3   motor vehicle is taken in trade as a credit or as part payment 
294.4   on a motor vehicle taxable under this chapter, the credit or 
294.5   trade-in value allowed by the person selling the motor vehicle 
294.6   shall be deducted from the total selling price to establish the 
294.7   purchase price of the vehicle being sold and the trade-in 
294.8   allowance allowed by the seller shall constitute the purchase 
294.9   price of the motor vehicle accepted as a trade-in.  The purchase 
294.10  price in those instances where the motor vehicle is acquired by 
294.11  gift or by any other transfer for a nominal or no monetary 
294.12  consideration shall also include the average value of similar 
294.13  motor vehicles, established by standards and guides as 
294.14  determined by the motor vehicle registrar.  The purchase price 
294.15  in those instances where a motor vehicle is manufactured by a 
294.16  person who registers it under the laws of this state shall mean 
294.17  the manufactured cost of such motor vehicle and manufactured 
294.18  cost shall mean the amount expended for materials, labor and 
294.19  other properly allocable costs of manufacture, except that in 
294.20  the absence of actual expenditures for the manufacture of a part 
294.21  or all of the motor vehicle, manufactured costs shall mean the 
294.22  reasonable value of the completed motor vehicle.  
294.23     The term "purchase price" shall not include the portion of 
294.24  the value of a motor vehicle due solely to modifications 
294.25  necessary to make the motor vehicle handicapped accessible.  The 
294.26  term "purchase price" shall not include the transfer of a motor 
294.27  vehicle by way of gift between a husband and wife or parent and 
294.28  child, or to a nonprofit organization as provided under section 
294.29  297B.01, paragraph (e), nor shall it include the transfer of a 
294.30  motor vehicle by a guardian to a ward when there is no monetary 
294.31  consideration and the title to such vehicle was registered in 
294.32  the name of the guardian, as guardian, only because the ward was 
294.33  a minor.  There shall not be included in "purchase price" the 
294.34  amount of any tax imposed by the United States upon or with 
294.35  respect to retail sales whether imposed upon the retailer or the 
294.36  consumer.  
295.1      The term "purchase price" shall not include the transfer of 
295.2   a motor vehicle as a gift between a foster parent and foster 
295.3   child.  For purposes of this subdivision, a foster relationship 
295.4   exists, regardless of the age of the child, if (1) a foster 
295.5   parent's home is or was licensed as a foster family home under 
295.6   Minnesota Rules, parts 9545.0010 to 9545.0260, and (2) the 
295.7   county verifies that the child was a state ward or in permanent 
295.8   foster care. 
295.9      Sec. 27.  Minnesota Statutes 1996, section 297E.02, 
295.10  subdivision 3, is amended to read: 
295.11     Subd. 3.  [COLLECTION; DISPOSITION.] Taxes imposed by this 
295.12  section are due and payable to the commissioner when the 
295.13  gambling tax return is required to be filed.  Returns covering 
295.14  the taxes imposed under this section must be filed with the 
295.15  commissioner on or before the 20th fifth day of the second month 
295.16  following the close of the previous calendar month.  The 
295.17  commissioner may require that the returns be filed via magnetic 
295.18  media or electronic data transfer.  The proceeds, along with the 
295.19  revenue received from all license fees and other fees under 
295.20  sections 349.11 to 349.191, 349.211, and 349.213, must be paid 
295.21  to the state treasurer for deposit in the general fund. 
295.22     Sec. 28.  Minnesota Statutes 1996, section 297E.02, 
295.23  subdivision 6, is amended to read: 
295.24     Subd. 6.  [COMBINED RECEIPTS TAX.] In addition to the taxes 
295.25  imposed under subdivisions 1 and 4, a tax is imposed on the 
295.26  combined receipts of the organization.  As used in this section, 
295.27  "combined receipts" is the sum of the organization's gross 
295.28  receipts from lawful gambling less gross receipts directly 
295.29  derived from the conduct of bingo, raffles, and paddlewheels, as 
295.30  defined in section 297E.01, subdivision 8, for the fiscal year.  
295.31  The combined receipts of an organization are subject to a tax 
295.32  computed according to the following schedule: 
295.33     If the combined receipts for the          The tax is:
295.34     fiscal year are:
295.35     Not over $500,000                   zero
295.36     Over $500,000, but not over
296.1      $700,000                            two percent of the amount
296.2                                          over $500,000, but not
296.3                                          over $700,000
296.4      Over $700,000, but not over
296.5      $900,000                            $4,000 plus four percent
296.6                                          of the amount over
296.7                                          $700,000, but not over
296.8                                          $900,000
296.9      Over $900,000                       $12,000 plus six percent
296.10                                         of the amount over
296.11                                         $900,000
296.12     Not over $700,000                   zero
296.13     Over $700,000, but not over
296.14     $900,000                            two percent of the amount
296.15                                         over $700,000, but not
296.16                                         over $900,000
296.17     Over $900,000, but not over
296.18     $1,100,000                          $4,000 plus four percent
296.19                                         of the amount over
296.20                                         $900,000, but not over
296.21                                         $1,100,000
296.22     Over $1,100,000                     $12,000 plus six percent
296.23                                         of the amount over
296.24                                         $1,100,000
296.25     Sec. 29.  Minnesota Statutes 1996, section 297E.04, 
296.26  subdivision 3, is amended to read: 
296.27     Subd. 3.  [PADDLETICKET CARD MASTER FLARES.] Each sealed 
296.28  grouping of 100 or fewer paddleticket cards must have its own 
296.29  individual master flare.  The manufacturer of the paddleticket 
296.30  cards must affix to or imprint at the bottom of each master 
296.31  flare a bar code that provides: 
296.32     (1) the name of the manufacturer; 
296.33     (2) the first paddleticket card number in the group; 
296.34     (3) the number of paddletickets attached to each 
296.35  paddleticket card in the group; and 
296.36     (4) all other information required by the commissioner.  
297.1   This subdivision applies to paddleticket cards (i) sold by a 
297.2   manufacturer after June 30, 1995, for use or resale in Minnesota 
297.3   or (ii) shipped into or caused to be shipped into Minnesota by a 
297.4   manufacturer after June 30, 1995.  Paddleticket cards that are 
297.5   subject to this subdivision may not have a registration stamp 
297.6   affixed to the master flare. 
297.7      Sec. 30.  Minnesota Statutes 1996, section 349.12, 
297.8   subdivision 26a, is amended to read: 
297.9      Subd. 26a.  [MASTER FLARE.] "Master flare" is the posted 
297.10  display, with registration stamp affixed or bar code imprinted 
297.11  or affixed, that is used in conjunction with sealed groupings of 
297.12  100 or fewer sequentially numbered paddleticket cards. 
297.13     Sec. 31.  Minnesota Statutes 1996, section 349.154, 
297.14  subdivision 2, is amended to read: 
297.15     Subd. 2.  [NET PROFIT REPORTS.] (a) Each licensed 
297.16  organization must report monthly to the board on a form 
297.17  prescribed by the board each expenditure and contribution of net 
297.18  profits from lawful gambling.  The reports must provide for each 
297.19  expenditure or contribution: 
297.20     (1) the name, address, and telephone number of the 
297.21  recipient of the expenditure or contribution; 
297.22     (2) the date the contribution was approved by the 
297.23  organization; 
297.24     (3) the date, amount, and check number of the expenditure 
297.25  or contribution; 
297.26     (4) a brief description of how the expenditure or 
297.27  contribution meets one or more of the purposes in section 
297.28  349.12, subdivision 25; and 
297.29     (5) in the case of expenditures authorized under section 
297.30  349.12, subdivision 25, paragraph (a), clause (7), whether the 
297.31  expenditure is for a facility or activity that primarily 
297.32  benefits male or female participants. 
297.33     (b) The board shall make available to the commissioners of 
297.34  revenue and public safety copies of reports received under this 
297.35  subdivision and requested by them. 
297.36     (c) The report required under this subdivision must provide 
298.1   for a separate accounting for all expenditures made from the 
298.2   reporting organization's tax refund and or credit account 
298.3   authorized under section 297E.02, subdivision 4, paragraph (d). 
298.4      Sec. 32.  Minnesota Statutes 1996, section 349.163, 
298.5   subdivision 8, is amended to read: 
298.6      Subd. 8.  [PADDLETICKET CARD MASTER FLARES.] Each sealed 
298.7   grouping of 100 or fewer paddleticket cards must have its own 
298.8   individual master flare.  The manufacturer must affix to or 
298.9   imprint at the bottom of the master flare a bar code that 
298.10  provides all information required by the commissioner of revenue 
298.11  under section 297E.04, subdivision 3. 
298.12     This subdivision applies to paddleticket cards sold by a 
298.13  manufacturer after June 30, 1995, for use or resale in Minnesota 
298.14  or shipped into or caused to be shipped into Minnesota by a 
298.15  manufacturer after June 30, 1995.  Paddleticket cards which are 
298.16  subject to this subdivision shall not have a registration stamp 
298.17  affixed to the master flare. 
298.18     Sec. 33.  Minnesota Statutes 1996, section 349.19, 
298.19  subdivision 2a, is amended to read: 
298.20     Subd. 2a.  [TAX REFUND AND OR CREDIT ACCOUNT.] (a) Each 
298.21  organization that receives a refund or credit under section 
298.22  297E.02, subdivision 4, paragraph (d), must establish a separate 
298.23  account designated as the tax and credit refund account.  The 
298.24  organization must (1) within four business days of receiving a 
298.25  refund under that paragraph deposit the refund in 
298.26  the organization's gambling account, and (2) within four 
298.27  business days of filing a tax return that claims a credit under 
298.28  that paragraph, transfer from the separate account established 
298.29  under subdivision 2 to the tax refund and credit account an 
298.30  amount equal to the tax credit. 
298.31     (b) The name and address of the bank, the account number 
298.32  for the tax refund and credit account, and the names of 
298.33  organization members authorized as signatories on the account 
298.34  must be provided to the board within 30 days of the date when 
298.35  the organization establishes the account.  Changes in the 
298.36  information must be submitted to the board at least ten days 
299.1   before the change is made. 
299.2      (c) (b) The organization may expend money in the account 
299.3   the tax refund or credit issued under section 297E.02, 
299.4   subdivision 4, paragraph (d), only for lawful purposes, other 
299.5   than lawful purposes described in section 349.012, subdivision 
299.6   25, paragraph (a), clauses (8), (9), and (12).  Amounts in the 
299.7   account received as refunds or allowed as credits must be spent 
299.8   for qualifying lawful purposes no later than one year after the 
299.9   refund or credit is deposited received. 
299.10     Sec. 34.  Minnesota Statutes 1996, section 349.191, 
299.11  subdivision 1b, is amended to read: 
299.12     Subd. 1b.  [CREDIT AND SALES TO DELINQUENT DISTRIBUTORS.] 
299.13  (a) If a manufacturer does not receive payment in full from a 
299.14  distributor within 30 35 days of the delivery of gambling 
299.15  equipment, the manufacturer must notify the board in writing of 
299.16  the delinquency. 
299.17     (b) If a manufacturer who has notified the board under 
299.18  paragraph (a) has not received payment in full from the 
299.19  distributor within 60 days of the notification under paragraph 
299.20  (a), the manufacturer must notify the board of the continuing 
299.21  delinquency. 
299.22     (c) On receipt of a notice under paragraph (a), the board 
299.23  shall order all manufacturers that until further notice from the 
299.24  board, they may sell gambling equipment to the delinquent 
299.25  distributor only on a cash basis with no credit extended.  On 
299.26  receipt of a notice under paragraph (b), the board shall order 
299.27  all manufacturers not to sell any gambling equipment to the 
299.28  delinquent distributor. 
299.29     (d) No manufacturer may extend credit or sell gambling 
299.30  equipment to a distributor in violation of an order under 
299.31  paragraph (c) until the board has authorized such credit or sale.
299.32     Sec. 35.  Laws 1993, chapter 375, article 9, section 45, 
299.33  subdivision 2, is amended to read: 
299.34     Subd. 2.  [USE OF REVENUES.] (a) Revenues received from 
299.35  taxes authorized by subdivision 1 shall be used by Cook county 
299.36  to pay the cost of collecting the tax and to pay all or a 
300.1   portion of the costs of expanding and improving the health care 
300.2   facility located in the county and known as North Shore hospital.
300.3   Authorized costs include, but are not limited to, securing or 
300.4   paying debt service on bonds or other obligations issued to 
300.5   finance the expansion and improvement of North Shore hospital.  
300.6   The total capital expenditures payable from bond proceeds, 
300.7   excluding investment earnings on bond proceeds and tax revenues, 
300.8   shall not exceed $4,000,000. 
300.9      (b) Additional revenues received from taxes authorized by 
300.10  subdivision 1 may be used by Cook county to pay all or a portion 
300.11  of the costs of remodeling North Shore care center and providing 
300.12  additional improvements to North Shore hospital.  Authorized 
300.13  costs include, but are not limited to, securing or paying debt 
300.14  service on bonds or other obligations issued to finance the 
300.15  remodeling of North Shore care center and additional 
300.16  improvements to North Shore hospital.  The total capital 
300.17  expenditures payable from bond proceeds, excluding investment 
300.18  earnings on bond proceeds and tax revenues, shall not exceed 
300.19  $2,200,000. 
300.20     Sec. 36.  Laws 1993, chapter 375, article 9, section 45, 
300.21  subdivision 3, is amended to read: 
300.22     Subd. 3.  [EXPIRATION OF TAXING AUTHORITY AND EXPENDITURE 
300.23  LIMITATION.] The authority granted by subdivision 1 to Cook 
300.24  county to impose a sales tax shall expire when the principal and 
300.25  interest on any bonds or obligations issued under subdivision 4, 
300.26  paragraph (a), to finance the expansion and improvement of North 
300.27  Shore hospital described in subdivision 2, paragraph (a), have 
300.28  been paid, or at an earlier time as the county shall, by 
300.29  resolution, determine.  Any funds remaining after completion of 
300.30  the improvements and retirement or redemption of the bonds may 
300.31  be placed in the general fund of the county. 
300.32     Sec. 37.  Laws 1993, chapter 375, article 9, section 45, 
300.33  subdivision 4, is amended to read: 
300.34     Subd. 4.  [BONDS.] (a) Cook county may issue general 
300.35  obligation bonds in an amount not to exceed $4,000,000 for the 
300.36  expansion and improvement of North Shore hospital,. 
301.1      (b) Additionally, Cook county may issue general obligation 
301.2   bonds in an amount not to exceed $2,200,000 for the remodeling 
301.3   of North Shore care center and additional improvements to North 
301.4   Shore hospital.  
301.5      (c) The bonds may be issued without election under 
301.6   Minnesota Statutes, chapter 475, on the question of issuance of 
301.7   the bonds or a property tax to pay them.  The debt represented 
301.8   by the bonds issued for the expansion and improvement of North 
301.9   Shore hospital shall not be included in computing any debt 
301.10  limitations applicable to Cook county, and the levy of taxes 
301.11  required by Minnesota Statutes, section 475.61, to pay principal 
301.12  of and interest on the bonds shall not be subject to any levy 
301.13  limitation or be included in computing or applying any levy 
301.14  limitation applicable to the county. 
301.15     Sec. 38.  Laws 1993, chapter 375, article 9, section 45, is 
301.16  amended by adding a subdivision to read: 
301.17     Subd. 5a.  [REFERENDUM.] If the governing body of Cook 
301.18  county intends to use the sales tax proceeds as authorized by 
301.19  subdivision 2, paragraph (b), it shall conduct a referendum on 
301.20  the issue.  The question of so using the tax proceeds must be 
301.21  submitted to the voters at a special or general election.  The 
301.22  tax proceeds may not be used as provided in subdivision 2, 
301.23  paragraph (b), unless a majority of votes cast on the question 
301.24  are in the affirmative.  The commissioner of revenue shall 
301.25  prepare a suggested form of question to be presented at the 
301.26  election.  The referendum must be held at a special or general 
301.27  election before December 1, 1997. 
301.28     Sec. 39.  [ITASCA COUNTY; SALES TAX EXEMPTION FOR JAIL 
301.29  CONSTRUCTION MATERIALS.] 
301.30     Subdivision 1.  [JAIL CONSTRUCTION MATERIALS.] In the case 
301.31  of construction materials and supplies purchased for use in a 
301.32  project to expand, reconstruct, and otherwise improve the Itasca 
301.33  county jail, Minnesota Statutes, section 297A.15, subdivision 7, 
301.34  shall apply with the following exceptions: 
301.35     (1) the refund is equal to 100 percent of the taxes paid; 
301.36  and 
302.1      (2) construction materials and supplies used in the 
302.2   expansion, reconstruction, or improvement of the portion of the 
302.3   facility used as a jail qualifies for the refund. 
302.4      Subd. 2.  [EFFECTIVE DATE.] Subdivision 1 is effective the 
302.5   day after compliance with Minnesota Statutes, section 645.021, 
302.6   subdivision 3, and applies to purchases after June 30, 1997. 
302.7      Sec. 40.  [COOK COUNTY; SALES TAX EXEMPTION FOR JAIL AND 
302.8   COURTHOUSE CONSTRUCTION MATERIALS.] 
302.9      Subdivision 1.  [CONSTRUCTION MATERIALS.] In the case of 
302.10  construction materials and supplies purchased for use in a 
302.11  project to construct an addition to and otherwise improve the 
302.12  Cook county jail and courthouse facility, Minnesota Statutes, 
302.13  section 297A.15, subdivision 7, shall apply with the following 
302.14  exceptions: 
302.15     (1) the refund is equal to 100 percent of the taxes paid; 
302.16  and 
302.17     (2) construction materials and supplies used in 
302.18  construction or improvement of the portion of the facility used 
302.19  as a courthouse as well as the portion of the facility used as a 
302.20  jail qualify for the refund. 
302.21     Subd. 2.  [EFFECTIVE DATE.] Subdivision 1 is effective the 
302.22  day after compliance with Minnesota Statutes, section 645.021, 
302.23  subdivision 3, and applies to purchases after June 30, 1997. 
302.24     Sec. 41.  [CITY OF FOSSTON; SALES AND USE TAX.] 
302.25     Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] The city of 
302.26  Fosston may, by ordinance, impose for the purposes specified in 
302.27  subdivision 3 a sales and use tax of up to one-half of one 
302.28  percent.  The provisions of Minnesota Statutes, section 297A.48, 
302.29  govern the imposition, administration, collection, and 
302.30  enforcement of the tax authorized under this section. 
302.31     Subd. 2.  [USE OF REVENUES.] Revenues received from the tax 
302.32  authorized by subdivision 1 must be used to pay the costs of 
302.33  collecting the tax, and for economic development and tourism 
302.34  purposes, including the expansion of the heritage center and 
302.35  construction of a business-industrial park and facilities, and 
302.36  including securing or paying debt service on bonds issued for 
303.1   those purposes under subdivision 4.  
303.2      Subd. 3.  [REFERENDUM.] If the Fosston city council 
303.3   proposes to impose the sales and use tax authorized by this 
303.4   section, it shall conduct a referendum on the issue.  The 
303.5   question of imposing the tax must be submitted to the voters at 
303.6   a special or general election.  The tax may not be imposed 
303.7   unless a majority of votes cast on the question of imposing the 
303.8   tax are in the affirmative.  The commissioner of revenue shall 
303.9   prepare a suggested form of question to be presented at the 
303.10  election.  This subdivision applies notwithstanding any city 
303.11  charter provision to the contrary. 
303.12     Subd. 4.  [BONDS.] The city of Fosston, pursuant to the 
303.13  approval of the city voters under subdivision 3, may issue 
303.14  without additional election general obligation bonds of the city 
303.15  to pay capital expenses for the purposes given in subdivision 
303.16  2.  The debt represented by the bonds must not be included in 
303.17  computing any debt limitations applicable to the city, and the 
303.18  levy of taxes required by Minnesota Statutes, section 475.61, to 
303.19  pay the principal of and interest on the bonds must not be 
303.20  subject to any levy limitation or be included in computing or 
303.21  applying any levy limitation applicable to the city.  
303.22     Subd. 5.  [TERMINATION.] The tax authorized under this 
303.23  section terminates at the later of (1) five years after the date 
303.24  of initial imposition of the tax, or (2) on the first day of the 
303.25  second month next succeeding a determination by the city council 
303.26  that sufficient funds have been received from the tax to finance 
303.27  the improvements described in subdivision 2, and to prepay or 
303.28  retire at maturity the principal, interest, and premium due on 
303.29  any bonds issued for the improvements.  Any funds remaining 
303.30  after completion of the improvements and retirement or 
303.31  redemption of the bonds may be placed in the general fund of the 
303.32  city. 
303.33     Subd. 6.  [LOCAL APPROVAL; EFFECTIVE DATE.] This section is 
303.34  effective August 1, 1997, upon compliance with Minnesota 
303.35  Statutes, section 645.021, subdivision 3, by the governing body 
303.36  of the city of Fosston. 
304.1      Sec. 42.  [CITY OF WILLMAR; TAXES.] 
304.2      Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] Pursuant to 
304.3   the approval of the city voters at the general election held on 
304.4   November 5, 1996, the city of Willmar may, by ordinance, impose, 
304.5   for the purposes specified in subdivision 3, a sales and use tax 
304.6   of up to one-half of one percent.  The provisions of Minnesota 
304.7   Statutes, section 297A.48, govern the imposition, 
304.8   administration, collection, and enforcement of the tax 
304.9   authorized under this subdivision. 
304.10     Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
304.11  Minnesota Statutes, section 477A.016, or any other contrary 
304.12  provision of law, ordinance, or city charter, the city of 
304.13  Willmar may, by ordinance, impose, for the purposes specified in 
304.14  subdivision 3, an excise tax of up to $20 per motor vehicle, as 
304.15  defined by ordinance, purchased or acquired from any person 
304.16  engaged within the city in the business of selling motor 
304.17  vehicles at retail. 
304.18     Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
304.19  authorized by subdivisions 1 and 2 must be used to pay the costs 
304.20  of collecting the taxes, and to pay all or a part of the capital 
304.21  and administrative costs of the acquisition, construction, and 
304.22  improvement of public library facilities, including securing or 
304.23  paying debt service on bonds issued for the project under 
304.24  subdivision 4.  The total capital and administrative 
304.25  expenditures payable from bond proceeds and revenues received 
304.26  from the taxes authorized by subdivisions 1 and 2, excluding 
304.27  investment earnings thereon, must not exceed $4,500,000. 
304.28     Subd. 4.  [BONDS.] The city of Willmar, pursuant to the 
304.29  approval of the city voters at the general election held on 
304.30  November 5, 1996, may issue without additional election general 
304.31  obligation bonds of the city in an amount not to exceed 
304.32  $4,500,000 to pay capital and administrative expenses for the 
304.33  acquisition, construction, and improvement of public library 
304.34  facilities.  The debt represented by the bonds must not be 
304.35  included in computing any debt limitations applicable to the 
304.36  city, and the levy of taxes required by Minnesota Statutes, 
305.1   section 475.61, to pay the principal of and interest on the 
305.2   bonds must not be subject to any levy limitation or be included 
305.3   in computing or applying any levy limitation applicable to the 
305.4   city.  
305.5      Subd. 5.  [TERMINATION OF TAXES.] The taxes imposed under 
305.6   subdivisions 1 and 2 expire when the city council determines 
305.7   that sufficient funds have been received from the taxes to 
305.8   finance the capital and administrative costs for the 
305.9   acquisition, construction, and improvement of public library 
305.10  facilities and to prepay or retire at maturity the principal, 
305.11  interest, and premium due on any bonds issued for the project 
305.12  under subdivision 4.  Any funds remaining after completion of 
305.13  the project and retirement or redemption of the bonds may be 
305.14  placed in the general fund of the city.  The taxes imposed under 
305.15  subdivisions 1 and 2 may expire at an earlier time if the city 
305.16  so determines by ordinance.  
305.17     Subd. 6.  [EFFECTIVE DATE.] This section is effective 
305.18  August 1, 1997, upon compliance by the governing body of the 
305.19  city of Willmar with Minnesota Statutes, section 645.021, 
305.20  subdivision 3. 
305.21     Sec. 43.  [ADVISORY COUNCIL; TAXATION OF TELECOMMUNICATIONS 
305.22  SERVICES.] 
305.23     Subdivision 1.  [CREATION; MEMBERSHIP.] (a) A state 
305.24  advisory council is established to study the taxation of 
305.25  telecommunications services in Minnesota and to make 
305.26  recommendations to the 1998 legislature.  The study shall be 
305.27  completed and findings reported to the legislature by February 
305.28  1, 1998. 
305.29     (b) The advisory council consists of 12 members who serve 
305.30  at the pleasure of the appointing authority as follows: 
305.31     (1) six legislators; three members of the senate, including 
305.32  one member of the minority party, appointed by the subcommittee 
305.33  on committees of the committee on rules and administration and 
305.34  three members of the house of representatives, including one 
305.35  member of the minority party, appointed by the speaker; 
305.36     (2) the commissioner of revenue or the commissioner's 
306.1   designee; and 
306.2      (3) five members of the public including at least two 
306.3   representatives of Internet service businesses who are 
306.4   knowledgeable about technologies and practices of the Internet; 
306.5   two appointed by the subcommittee on committees of the committee 
306.6   on rules and administration of the senate, two appointed by the 
306.7   speaker of the house, and one appointed by the governor.  
306.8      (c) the 12 members will elect a chair from the membership 
306.9   of the council.  
306.10     Subd. 2.  [SCOPE OF STUDY.] (a) The purpose of the advisory 
306.11  council is to: 
306.12     (1) study existing and emerging tax policies, both 
306.13  federally and nationally, that apply to telecommunications and 
306.14  computer industries and identify any inequities which may exist 
306.15  in the current system of taxation as it applies to those 
306.16  industries; 
306.17     (2) identify potential for erosion of the sales tax base as 
306.18  a result of evolving technologies in the telecommunications and 
306.19  computer industries; 
306.20     (3) consider methods of addressing potential impediments to 
306.21  extension of state taxes to emerging technologies; 
306.22     (4) suggest options for changing the tax system to maintain 
306.23  or broaden the sales tax base and to provide equitable tax 
306.24  treatment for users of existing and emerging technologies. 
306.25     Subd. 3.  [STAFF.] The department of revenue and 
306.26  legislative staff shall provide administrative and staff 
306.27  assistance when requested by the advisory council. 
306.28     Subd. 4.  [COOPERATION BY OTHER AGENCIES.] The commissioner 
306.29  of public service, the director of the Minnesota office of 
306.30  technology, and any other state department or agency shall, upon 
306.31  request by the advisory council, provide data or other 
306.32  information that is collected or possessed by their agencies and 
306.33  that is necessary or useful in conducting the study and 
306.34  preparing the report required by this section. 
306.35     Sec. 44.  [STATEMENT OF PURPOSE.] 
306.36     For purchases and sales occurring after December 31, 1992: 
307.1      (a) The purpose of section 5, paragraph (h), is to confirm 
307.2   and clarify the intent of the legislature in enacting an 
307.3   exemption from the sales tax for property to be resold in the 
307.4   normal course of business.  
307.5      (b) Section 5, paragraph (h), ratifies the existing state 
307.6   interpretation that a resale requires the transfer of title to 
307.7   the property or the complete transfer of possession and control 
307.8   over the property.  This section is not intended to affect any 
307.9   litigation pending before the supreme court as of April 22, 1997.
307.10     Sec. 45.  [RECODIFICATION.] 
307.11     In coordination with legislative staff, the revisor of 
307.12  statutes shall prepare a bill for introduction in the 1998 
307.13  session of the legislature that clarifies and recodifies chapter 
307.14  297A.  The department of revenue shall assist in the preparation 
307.15  of the legislation as requested by the revisor.  The revisor may 
307.16  consult professional groups and other interested persons in 
307.17  preparing the legislation.  
307.18     Sec. 46.  [APPLICATION.] 
307.19     Section 22 applies in the counties of Anoka, Carver, 
307.20  Dakota, Hennepin, Ramsey, Scott, and Washington. 
307.21     Sec. 47.  [REPEALER.] 
307.22     Minnesota Statutes 1996, sections 297A.01, subdivision 20; 
307.23  297A.02, subdivision 5; and 297A.25, subdivision 29, are 
307.24  repealed. 
307.25     Sec. 48.  [EFFECTIVE DATES.] 
307.26     Section 1 is effective for refund claims filed after June 
307.27  30, 1997. 
307.28     Sections 2, 6, 14 to 18, 20, 25, 26, 39, and 40 are 
307.29  effective for purchases and sales occurring after June 30, 1997. 
307.30     Section 3 as applied to fuel used to operate well drilling 
307.31  machines is effective the day following final enactment and 
307.32  applies to gasoline and special fuel purchased before, on, or 
307.33  after the date of final enactment of this act, provided that 
307.34  claims for refund must be made within the time period provided 
307.35  in Minnesota Statutes, section 296.18, subdivision 1.  For all 
307.36  other purposes, section 3 is effective on July 1, 1997, or upon 
308.1   adoption of the corresponding rules, whichever occurs earlier. 
308.2      Section 4, paragraph (i), clause (iv), is effective for 
308.3   purchases and sales occurring after September 30, 1987; the 
308.4   remainder of section 4 is effective for purchases and sales 
308.5   occurring after December 31, 1997. 
308.6      Section 5, paragraph (h), is effective for purchases and 
308.7   sales occurring after December 31, 1992, and paragraph (i) is 
308.8   effective for purchases and sales occurring after June 30, 1997. 
308.9      Sections 7, 13, 29, 30, and 32 are effective for purchases 
308.10  and sales occurring after December 31, 1997. 
308.11     Sections 8 to 10, 19, 27, 28, 33, 34, 43, and 47 are 
308.12  effective July 1, 1997. 
308.13     Section 11 is effective January 1, 1998. 
308.14     Sections 12, 24, 44, and 45 are effective the day following 
308.15  final enactment. 
308.16     Section 19 is effective July 1, 1998. 
308.17     Section 21 is effective January 1, 1992. 
308.18     Section 22 is effective for purchases and sales occurring 
308.19  after July 31, 1997, and before August 1, 2003. 
308.20     Section 23 is effective for sales made after December 31, 
308.21  1989, and before January 1, 1997.  The provisions of Minnesota 
308.22  Statutes, section 289A.50, apply to refunds claimed under 
308.23  section 23.  Refunds claimed under section 23 must be filed by 
308.24  the later of December 31, 1997, or the time limit under 
308.25  Minnesota Statutes, section 289A.40, subdivision 1. 
308.26     Sections 35 to 38 are effective the day after compliance by 
308.27  the governing body of Cook county with Minnesota Statutes, 
308.28  section 645.021, subdivision 3. 
308.29                             ARTICLE 12
308.30                           BUDGET RESERVE
308.31     Section 1.  Minnesota Statutes 1996, section 16A.152, 
308.32  subdivision 2, is amended to read: 
308.33     Subd. 2.  [ADDITIONAL REVENUES; PRIORITY.] If on the basis 
308.34  of a forecast of general fund revenues and expenditures after 
308.35  November 1 in an odd-numbered year, the commissioner of finance 
308.36  determines that there will be a positive unrestricted budgetary 
309.1   general fund balance at the close of the biennium, the 
309.2   commissioner of finance must allocate money to the budget 
309.3   reserve until the total amount in the account is $270,000,000.  
309.4   An amount equal to any additional biennial unrestricted 
309.5   budgetary general fund balance made available as the result of a 
309.6   forecast in an odd-numbered calendar year after November 1 is 
309.7   appropriated in January of the following year to reduce the 
309.8   property tax levy recognition percent under section 121.904, 
309.9   subdivision 4a, to zero before additional money beyond 
309.10  $270,000,000 is allocated to the budget reserve account.  The 
309.11  amount appropriated is the full amount forecast to be available 
309.12  at the end of the biennium and is not limited to the amount 
309.13  forecast to be available at the end of the current fiscal year 
309.14  as follows: 
309.15     (a) first, to the budget reserve until the total amount in 
309.16  the account equals $522,000,000; then 
309.17     (b) 40 percent, to reduce the property tax revenue 
309.18  recognition percent in section 121.904, subdivision 4a, to two 
309.19  percent and any amount of the 40 percent share that is available 
309.20  after the percent is reduced to two is an unrestricted balance 
309.21  in the general fund; and 
309.22     (c) 60 percent to the property tax reform account 
309.23  established in section 16A.1521. 
309.24     The amounts necessary to meet the requirements of this 
309.25  section are appropriated from the general fund within two weeks 
309.26  of the forecast. 
309.27     Sec. 2.  [16A.1521] [PROPERTY TAX REFORM ACCOUNT.] 
309.28     A property tax reform account is established in the general 
309.29  fund.  On July 1, 1997, $487,000,000 is appropriated to the 
309.30  property tax reform account.  The balance in the account does 
309.31  not cancel and remains in the account until appropriated for 
309.32  property tax reform in fiscal years 1999, 2000, and 2001.  
309.33  Investment earnings on the account are credited to the account. 
309.34     Sec. 3.  [BUDGET RESERVE APPROPRIATION.] 
309.35     An amount sufficient to increase the budget reserve to 
309.36  $522,000,000 on July 1, 1997, is appropriated from the general 
310.1   fund. 
310.2                              ARTICLE 13
310.3                       TAX INCREMENT FINANCING
310.4      Section 1.  Minnesota Statutes 1996, section 469.174, 
310.5   subdivision 10, is amended to read: 
310.6      Subd. 10.  [REDEVELOPMENT DISTRICT.] (a) "Redevelopment 
310.7   district" means a type of tax increment financing district 
310.8   consisting of a project, or portions of a project, within which 
310.9   the authority finds by resolution that one of the following 
310.10  conditions, reasonably distributed throughout the district, 
310.11  exists: 
310.12     (1) parcels consisting of 70 percent of the area of the 
310.13  district are occupied by buildings, streets, utilities, or other 
310.14  improvements and more than 50 percent of the buildings, not 
310.15  including outbuildings, are structurally substandard to a degree 
310.16  requiring substantial renovation or clearance; or 
310.17     (2) the property consists of vacant, unused, underused, 
310.18  inappropriately used, or infrequently used railyards, rail 
310.19  storage facilities, or excessive or vacated railroad 
310.20  rights-of-way. 
310.21     (b) For purposes of this subdivision, "structurally 
310.22  substandard" shall mean containing defects in structural 
310.23  elements or a combination of deficiencies in essential utilities 
310.24  and facilities, light and ventilation, fire protection including 
310.25  adequate egress, layout and condition of interior partitions, or 
310.26  similar factors, which defects or deficiencies are of sufficient 
310.27  total significance to justify substantial renovation or 
310.28  clearance.  
310.29     (c) A building is not structurally substandard if it is in 
310.30  compliance with the building code applicable to new buildings or 
310.31  could be modified to satisfy the building code at a cost of less 
310.32  than 15 percent of the cost of constructing a new structure of 
310.33  the same square footage and type on the site.  The municipality 
310.34  may find that a building is not disqualified as structurally 
310.35  substandard under the preceding sentence on the basis of 
310.36  reasonably available evidence, such as the size, type, and age 
311.1   of the building, the average cost of plumbing, electrical, or 
311.2   structural repairs, or other similar reliable evidence.  If the 
311.3   evidence supports a reasonable conclusion that the building is 
311.4   not disqualified as structurally substandard, The municipality 
311.5   may not make such a determination without an interior inspection 
311.6   or of the property, but need not have an independent, expert 
311.7   appraisal prepared of the cost of repair and rehabilitation of 
311.8   the building.  An interior inspection of the property is not 
311.9   required, if the municipality finds that (1) the municipality or 
311.10  authority is unable to gain access to the property after using 
311.11  its best efforts to obtain permission from the party that owns 
311.12  or controls the property; and (2) the evidence otherwise 
311.13  supports a reasonable conclusion that the building is 
311.14  structurally substandard.  Items of evidence that support such a 
311.15  conclusion include recent fire or police inspections, on-site 
311.16  property tax appraisals or housing inspections, exterior 
311.17  evidence of deterioration, or other similar reliable evidence.  
311.18  Written documentation of the findings and reasons why an 
311.19  interior inspection was not conducted must be made and retained 
311.20  under section 469.175, subdivision 3, clause (1). 
311.21     (d) A parcel is deemed to be occupied by a structurally 
311.22  substandard building for purposes of the finding under paragraph 
311.23  (a) if all of the following conditions are met: 
311.24     (1) the parcel was occupied by a substandard building 
311.25  within three years of the filing of the request for 
311.26  certification of the parcel as part of the district with the 
311.27  county auditor; 
311.28     (2) the substandard building was demolished or removed by 
311.29  the authority or the demolition or removal was financed by the 
311.30  authority or was done by a developer under a development 
311.31  agreement with the authority; 
311.32     (3) the authority found by resolution before the demolition 
311.33  or removal that the parcel was occupied by a structurally 
311.34  substandard building and that after demolition and clearance the 
311.35  authority intended to include the parcel within a district; and 
311.36     (4) upon filing the request for certification of the tax 
312.1   capacity of the parcel as part of a district, the authority 
312.2   notifies the county auditor that the original tax capacity of 
312.3   the parcel must be adjusted as provided by section 469.177, 
312.4   subdivision 1, paragraph (h). 
312.5      (c) (e) For purposes of this subdivision, a parcel is not 
312.6   occupied by buildings, streets, utilities, or other improvements 
312.7   unless 15 percent of the area of the parcel contains 
312.8   improvements. 
312.9      (d) (f) For districts consisting of two or more 
312.10  noncontiguous areas, each area must qualify as a redevelopment 
312.11  district under paragraph (a) to be included in the district, and 
312.12  the entire area of the district must satisfy paragraph (a). 
312.13     Sec. 2.  Minnesota Statutes 1996, section 469.174, 
312.14  subdivision 19, is amended to read: 
312.15     Subd. 19.  [SOILS CONDITION DISTRICT.] (a) "Soils condition 
312.16  district" means a type of tax increment financing district 
312.17  consisting of a project, or portions of a project, within which 
312.18  the authority finds by resolution that the following conditions 
312.19  exist: 
312.20     (1) the presence of hazardous substances, pollution, or 
312.21  contaminants requires removal or remedial action for use; 
312.22     (2) the estimated cost of the proposed removal and remedial 
312.23  action exceeds the fair market value of the land before 
312.24  completion of the preparation. 
312.25     The requirements of clause (2) need not be satisfied, if 
312.26  each parcel of property in the district either satisfies the 
312.27  requirements of clause (2) or the estimated costs of the 
312.28  proposed removal or remedial action exceeds $2 $4 per square 
312.29  foot for the area of the parcel. 
312.30     (b) The proposed removal or remediation action must be 
312.31  specified in a development action response plan to satisfy the 
312.32  requirements of paragraph (a). 
312.33     Sec. 3.  Minnesota Statutes 1996, section 469.174, is 
312.34  amended by adding a subdivision to read: 
312.35     Subd. 25.  [INCREMENT.] "Increment," "tax increment," "tax 
312.36  increment revenues," "revenues derived from tax increment," and 
313.1   other similar terms for a district include: 
313.2      (1) taxes paid by the captured net tax capacity, but 
313.3   excluding any excess taxes, as computed under section 469.177; 
313.4      (2) the proceeds from the sale or lease of property, 
313.5   tangible or intangible, purchased by the authority with tax 
313.6   increments; 
313.7      (3) repayments of loans or other advances made by the 
313.8   authority with tax increments; and 
313.9      (4) interest or other investment earnings on or from tax 
313.10  increments. 
313.11     Sec. 4.  Minnesota Statutes 1996, section 469.174, is 
313.12  amended by adding a subdivision to read: 
313.13     Subd. 26.  [POPULATION.] "Population" means the population 
313.14  established as of December 31 by the most recent of the 
313.15  following: 
313.16     (1) the federal census; 
313.17     (2) a special census conducted under contract with the 
313.18  United States Bureau of the Census; 
313.19     (3) a population estimate made by the metropolitan council; 
313.20  and 
313.21     (4) a population estimate made by the state demographer 
313.22  under section 4A.02. 
313.23     The population so established applies to the following 
313.24  calendar year. 
313.25     Sec. 5.  Minnesota Statutes 1996, section 469.174, is 
313.26  amended by adding a subdivision to read: 
313.27     Subd. 27.  [SMALL CITY.] "Small city" means any home rule 
313.28  charter or statutory city that has a population of 5,000 or less 
313.29  and that is located ten miles or more from a home rule charter 
313.30  or statutory city, located in this state, with a population of 
313.31  10,000 or more.  For purposes of this definition, the distance 
313.32  between cities is measured by drawing a straight line from the 
313.33  nearest boundaries of the two cities. 
313.34     Sec. 6.  Minnesota Statutes 1996, section 469.175, 
313.35  subdivision 3, is amended to read: 
313.36     Subd. 3.  [MUNICIPALITY APPROVAL.] A county auditor shall 
314.1   not certify the original net tax capacity of a tax increment 
314.2   financing district until the tax increment financing plan 
314.3   proposed for that district has been approved by the municipality 
314.4   in which the district is located.  If an authority that proposes 
314.5   to establish a tax increment financing district and the 
314.6   municipality are not the same, the authority shall apply to the 
314.7   municipality in which the district is proposed to be located and 
314.8   shall obtain the approval of its tax increment financing plan by 
314.9   the municipality before the authority may use tax increment 
314.10  financing.  The municipality shall approve the tax increment 
314.11  financing plan only after a public hearing thereon after 
314.12  published notice in a newspaper of general circulation in the 
314.13  municipality at least once not less than ten days nor more than 
314.14  30 days prior to the date of the hearing.  The published notice 
314.15  must include a map of the area of the district from which 
314.16  increments may be collected and, if the project area includes 
314.17  additional area, a map of the project area in which the 
314.18  increments may be expended.  The hearing may be held before or 
314.19  after the approval or creation of the project or it may be held 
314.20  in conjunction with a hearing to approve the project.  Before or 
314.21  at the time of approval of the tax increment financing plan, the 
314.22  municipality shall make the following findings, and shall set 
314.23  forth in writing the reasons and supporting facts for each 
314.24  determination: 
314.25     (1) that the proposed tax increment financing district is a 
314.26  redevelopment district, a renewal or renovation district, a 
314.27  mined underground space development district, a housing 
314.28  district, a soils condition district, or an economic development 
314.29  district; if the proposed district is a redevelopment district 
314.30  or a renewal or renovation district, the reasons and supporting 
314.31  facts for the determination that the district meets the criteria 
314.32  of section 469.174, subdivision 10, paragraph (a), clauses (1) 
314.33  and (2), or subdivision 10a, must be documented in writing and 
314.34  retained and made available to the public by the authority until 
314.35  the district has been terminated. 
314.36     (2) that the proposed development or redevelopment, in the 
315.1   opinion of the municipality, would not reasonably be expected to 
315.2   occur solely through private investment within the reasonably 
315.3   foreseeable future and that the increased market value of the 
315.4   site that could reasonably be expected to occur without the use 
315.5   of tax increment financing would be less than the increase in 
315.6   the market value estimated to result from the proposed 
315.7   development after subtracting the present value of the projected 
315.8   tax increments for the maximum duration of the district 
315.9   permitted by the plan.  The requirements of this clause do not 
315.10  apply if the district is a qualified housing district, as 
315.11  defined in section 273.1399, subdivision 1. 
315.12     (3) that the tax increment financing plan conforms to the 
315.13  general plan for the development or redevelopment of the 
315.14  municipality as a whole. 
315.15     (4) that the tax increment financing plan will afford 
315.16  maximum opportunity, consistent with the sound needs of the 
315.17  municipality as a whole, for the development or redevelopment of 
315.18  the project by private enterprise. 
315.19     (5) that the municipality elects the method of tax 
315.20  increment computation set forth in section 469.177, subdivision 
315.21  3, clause (b), if applicable. 
315.22     When the municipality and the authority are not the same, 
315.23  the municipality shall approve or disapprove the tax increment 
315.24  financing plan within 60 days of submission by the authority, or 
315.25  the plan shall be deemed approved.  When the municipality and 
315.26  the authority are not the same, the municipality may not amend 
315.27  or modify a tax increment financing plan except as proposed by 
315.28  the authority pursuant to subdivision 4.  Once approved, the 
315.29  determination of the authority to undertake the project through 
315.30  the use of tax increment financing and the resolution of the 
315.31  governing body shall be conclusive of the findings therein and 
315.32  of the public need for the financing. 
315.33     Sec. 7.  Minnesota Statutes 1996, section 469.175, is 
315.34  amended by adding a subdivision to read: 
315.35     Subd. 3a.  [BUT-FOR TEST; MODIFICATIONS.] (a) The 
315.36  provisions of this subdivision apply, if after municipal 
316.1   approval was obtained under subdivision 3, clause (2), the 
316.2   authority: 
316.3      (1) amends the tax increment financing plan, adopts or 
316.4   amends a development or redevelopment plan under the authority's 
316.5   law, enters into or amends a development or similar agreement, 
316.6   or adopts a resolution or approves an amended budget to permit 
316.7   increments to be spent, unless binding official action has 
316.8   already occurred with respect to the expenditure; and 
316.9      (2) the actions taken that satisfy clause (1) are estimated 
316.10  to permit spending of revenues derived from increments of 
316.11  $50,000 or more. 
316.12     (b) No action that satisfies the requirements of paragraph 
316.13  (a) is effective, unless the municipality after notice and 
316.14  hearing in accordance with section 469.175, subdivision 3, finds 
316.15  that, in its opinion: 
316.16     (1) the proposed development or redevelopment to be 
316.17  financed would not reasonably be expected to occur solely 
316.18  through private investment within the reasonably foreseeable 
316.19  future; and 
316.20     (2) the increased taxable market value of the site that 
316.21  could reasonably be expected to occur without the spending of 
316.22  tax increments would be less than the increase in the taxable 
316.23  market value estimated to result from the proposed development 
316.24  after subtracting the present value of the projected tax 
316.25  increments authorized to be spent on the development or 
316.26  redevelopment. 
316.27     (c) The requirements of this subdivision do not apply to 
316.28  expenditures to assist a development that meets the requirements 
316.29  for a qualified housing district, as defined in section 
316.30  273.1399, subdivision 1. 
316.31     (d) "Binding official action" means, with respect to 
316.32  revenues derived from tax increments considered expended on an 
316.33  activity, that the expenditure is authorized under the tax 
316.34  increment financing plan and that at least one of the following 
316.35  has occurred: 
316.36     (1) the revenues are actually paid to a third party with 
317.1   respect to the activity; 
317.2      (2) bonds, the proceeds of which must be used to finance 
317.3   the activity, are issued and sold to a third party, the revenues 
317.4   are spent to repay the bonds, and the proceeds of the bonds are, 
317.5   on the date of issuance, reasonably expected to be spent before 
317.6   the end of a reasonable temporary period within the meaning of 
317.7   the use of that term under section 148(c)(1) of the Internal 
317.8   Revenue Code, or are deposited in a reasonably required reserve 
317.9   or replacement fund; 
317.10     (3) binding contracts with a third party are entered into 
317.11  for performance of the activity, if the revenues are spent under 
317.12  the contractual obligation; or 
317.13     (4) the costs with respect to the activity are paid, if the 
317.14  revenues are spent to reimburse a party for payment of the 
317.15  costs, including any interest on unreimbursed costs. 
317.16     (e) For purposes of this subdivision, bonds include 
317.17  subsequent refunding bonds if the original refunded bonds meet 
317.18  the requirements of paragraph (d), clause (2). 
317.19     (f) For purposes of this subdivision, the terms "activity" 
317.20  and "third party" have the meanings given in section 469.1763, 
317.21  subdivision 1.  
317.22     Sec. 8.  Minnesota Statutes 1996, section 469.175, is 
317.23  amended by adding a subdivision to read: 
317.24     Subd. 9.  [DEVELOPER FINANCING; RESTRICTIONS.] (a) The 
317.25  provisions of this subdivision apply if the authority enters 
317.26  into an agreement or other arrangement with a developer that 
317.27  provides for the developer to be paid with increments for costs 
317.28  the developer incurs or pays for a project under the tax 
317.29  increment financing plan. 
317.30     (b) A "developer" means a nongovernmental entity that has 
317.31  an ownership interest in or a contract to improve, operate, or 
317.32  manage property in the project area. 
317.33     (c) The agreement with the developer: 
317.34     (1) must be in writing; 
317.35     (2) must require that the developer submit written 
317.36  documentation that it has paid costs for which increments may be 
318.1   spent under sections 469.174 to 469.178 and under the plan for 
318.2   the district before reimbursement may be paid; and 
318.3      (3) may provide for interest on payments at a reasonable 
318.4   rate, not to exceed the authority's cost of borrowing under 
318.5   similar terms. 
318.6      Sec. 9.  Minnesota Statutes 1996, section 469.176, 
318.7   subdivision 1b, is amended to read: 
318.8      Subd. 1b.  [DURATION LIMITS; TERMS.] (a) No tax increment 
318.9   shall in any event be paid to the authority 
318.10     (1) after 25 years from date of receipt by the authority of 
318.11  the first tax increment for a mined underground space 
318.12  development district, 
318.13     (2) after 15 years after receipt by the authority of the 
318.14  first increment for a renewal and renovation district, 
318.15     (3) after 12 20 years from approval of the tax increment 
318.16  financing plan after receipt by the authority of the first 
318.17  increment for a soils condition district, 
318.18     (4) after nine years from the date of the receipt, or 11 
318.19  years from approval of the tax increment financing plan, 
318.20  whichever is less, for an economic development district, 
318.21     (5) for a housing district or a redevelopment district, 
318.22  after 20 years from the date of receipt by the authority of the 
318.23  first tax increment by the authority pursuant to section 
318.24  469.175, subdivision 1, paragraph (b); or, if no provision is 
318.25  made under section 469.175, subdivision 1, paragraph (b), after 
318.26  25 years from the date of receipt by the authority of the first 
318.27  increment. 
318.28     (b) For purposes of determining a duration limit under this 
318.29  subdivision or subdivision 1e that is based on the receipt of an 
318.30  increment, any increments from taxes payable in the year in 
318.31  which the district terminates shall be paid to the authority.  
318.32  This paragraph does not affect a duration limit calculated from 
318.33  the date of approval of the tax increment financing plan or 
318.34  based on the recovery of costs or to a duration limit under 
318.35  subdivision 1c.  This paragraph does not supersede the 
318.36  restrictions on payment of delinquent taxes in subdivision 1f. 
319.1      Sec. 10.  Minnesota Statutes 1996, section 469.176, 
319.2   subdivision 2, is amended to read: 
319.3      Subd. 2.  [EXCESS TAX INCREMENTS.] (a) In any year in which 
319.4   the tax increment exceeds the amount necessary to pay the costs 
319.5   authorized by the tax increment financing plan, including the 
319.6   amount necessary to cancel any tax levy as provided in section 
319.7   475.61, subdivision 3, the authority shall use the excess amount 
319.8   to do any of the following:  (1) prepay any outstanding bonds, 
319.9   (2) discharge the pledge of tax increment therefor, (3) pay into 
319.10  an escrow account dedicated to the payment of such bond, or (4) 
319.11  return the excess amount to the county auditor who shall 
319.12  distribute the excess amount to the municipality, county, and 
319.13  school district in which the tax increment financing district is 
319.14  located in direct proportion to their respective local tax 
319.15  rates.  The county auditor must report to the commissioner of 
319.16  children, families, and learning the amount of any excess tax 
319.17  increment distributed to a school district within 30 days of the 
319.18  distribution. 
319.19     (b) Any revenues derived from tax increments from a 
319.20  district that are unspent or unencumbered upon decertification 
319.21  must be returned to the county auditor as provided in paragraph 
319.22  (a), clause (4).  "Decertification of a district" means the last 
319.23  day of the earlier of (1) the last calendar year in which the 
319.24  district is permitted to collect increments under this section, 
319.25  or (2) the calendar year in which the authority elects to stop 
319.26  collecting increments.  "Unencumbered" means the revenues 
319.27  derived from tax increments have not been designated to pay for 
319.28  goods or services received by the authority or to be received 
319.29  under a binding contract.  This paragraph does not apply to the 
319.30  portion of the increments permitted to be spent outside the 
319.31  district under section 469.1763, subdivision 2, if the district 
319.32  is subject to that subdivision. 
319.33     Sec. 11.  Minnesota Statutes 1996, section 469.176, 
319.34  subdivision 4c, is amended to read: 
319.35     Subd. 4c.  [ECONOMIC DEVELOPMENT DISTRICTS.] (a) Revenue 
319.36  derived from tax increment from an economic development district 
320.1   may not be used to provide improvements, loans, subsidies, 
320.2   grants, interest rate subsidies, or assistance in any form to 
320.3   developments consisting of buildings and ancillary facilities, 
320.4   if more than 15 percent of the buildings and facilities 
320.5   (determined on the basis of square footage) are used for a 
320.6   purpose other than:  
320.7      (1) the manufacturing or production of tangible personal 
320.8   property, including processing resulting in the change in 
320.9   condition of the property; 
320.10     (2) warehousing, storage, and distribution of tangible 
320.11  personal property, excluding retail sales; 
320.12     (3) research and development related to the activities 
320.13  listed in clause (1) or (2); 
320.14     (4) telemarketing if that activity is the exclusive use of 
320.15  the property; 
320.16     (5) tourism facilities; or 
320.17     (6) qualified border retail facilities; 
320.18     (7) space necessary for and related to the activities 
320.19  listed in clauses (1) to (5) (6).  
320.20     (b) Notwithstanding the provisions of this subdivision, 
320.21  revenue derived from tax increment from an economic development 
320.22  district may be used to pay for site preparation and public 
320.23  improvements, if the following conditions are met: 
320.24     (1) bedrock soils conditions are present in 80 percent or 
320.25  more of the acreage of the district; 
320.26     (2) the estimated cost of physical preparation of the site 
320.27  exceeds the fair market value of the land before completion of 
320.28  the preparation; and 
320.29     (3) revenues from tax increments are expended only for the 
320.30  additional costs of preparing the site because of unstable soils 
320.31  and the bedrock soils condition, the additional cost of 
320.32  installing public improvements because of unstable soils or the 
320.33  bedrock soils condition, and reasonable administrative costs. 
320.34     (c)(1) Notwithstanding the provisions of this subdivision, 
320.35  revenues derived from tax increment from an economic development 
320.36  district may be used to provide improvements, loans, subsidies, 
321.1   grants, interest rate subsidies, or assistance in any form for 
321.2   up to 15,000 square feet of any separately owned commercial 
321.3   facility located within the municipal jurisdiction of a small 
321.4   city, if the revenues derived from increments are spent only to 
321.5   assist the facility directly or for administrative costs, the 
321.6   assistance is necessary to develop the facility, and the 
321.7   increments are spent only within the district. 
321.8      (2) A city is a small city for purposes of this paragraph 
321.9   if the city was a small city in the year in which the request 
321.10  for certification was made and applies for the rest of the 
321.11  duration of the district, regardless of whether the city 
321.12  qualifies or ceases to qualify as a small city. 
321.13     (d) For purposes of this subdivision, a qualified border 
321.14  retail facility is a development consisting of a shopping center 
321.15  or one or more retail stores, if the authority finds that all of 
321.16  the following conditions are satisfied: 
321.17     (1) the district is in a small city located within one mile 
321.18  or less of the border of the state; 
321.19     (2) the development is not located in the seven county 
321.20  metropolitan area, as defined in section 473.121, subdivision 2; 
321.21     (3) the development will contain new buildings or will 
321.22  substantially rehabilitate existing buildings that together 
321.23  contain at least 25,000 square feet of retail space; and 
321.24     (4) without the use of tax increment financing for the 
321.25  development, the development or a similar competing development 
321.26  will instead occur in the bordering state or province. 
321.27     Sec. 12.  Minnesota Statutes 1996, section 469.176, 
321.28  subdivision 4g, is amended to read: 
321.29     Subd. 4g.  [GENERAL GOVERNMENT USE PROHIBITED.] (a) These 
321.30  revenues shall not be used to circumvent existing levy limit law.
321.31     (b) No revenues derived from tax increment from any 
321.32  district, whether certified before or after August 1, 1979, 
321.33  shall be used for the acquisition, construction, renovation, 
321.34  operation, or maintenance of a building to be used primarily and 
321.35  regularly for conducting the business of a municipality, county, 
321.36  school district, or any other local unit of government or the 
322.1   state or federal government.  "Conducting the business of the 
322.2   unit of government" includes, but is not limited to, the 
322.3   production or sale of goods or the provision of any service the 
322.4   unit of government provides in its normal course of operations.  
322.5   This provision shall not prohibit the use of revenues derived 
322.6   from tax increments for the construction or renovation of a 
322.7   parking structure, a commons area used as a public park, or a 
322.8   facility used for social, recreational, or conference 
322.9   purposes and not primarily for conducting the business of the 
322.10  municipality or a wastewater treatment facility, water treatment 
322.11  facility, or similar facility used in connection with public 
322.12  utilities, but only (1) if the construction or renovation is 
322.13  necessary to obtain a binding commitment by a third party to 
322.14  construct private taxable improvements as part of the 
322.15  development or redevelopment and (2) a binding commitment has 
322.16  been obtained, in writing, from the third party.  The market 
322.17  value of the taxable improvements must be substantial in 
322.18  relation to the cost of the construction or renovation of the 
322.19  public improvements paid with revenues derived from tax 
322.20  increments.  For purposes of this subdivision, "third party" 
322.21  means any person or entity other than the municipality, the 
322.22  authority, or other entity substantially under the control of 
322.23  the municipality.  
322.24     (b) (c) If any publicly owned facility used for social, 
322.25  recreational, or conference purposes and financed in whole or in 
322.26  part from revenues derived from a district is operated or 
322.27  managed by an entity other than the authority, the operating and 
322.28  management policies of the facility must be approved by the 
322.29  governing body of the authority. 
322.30     Sec. 13.  Minnesota Statutes 1996, section 469.176, 
322.31  subdivision 4j, is amended to read: 
322.32     Subd. 4j.  [REDEVELOPMENT DISTRICTS.] (a) At least 90 
322.33  percent of the revenues derived from tax increments from a 
322.34  redevelopment district or renewal and renovation district must 
322.35  be used to finance the cost of correcting conditions that allow 
322.36  designation of redevelopment and renewal and renovation 
323.1   districts under section 469.174. 
323.2      (b) These costs include and are limited to: 
323.3      (1) acquiring properties containing structurally 
323.4   substandard buildings or improvements, or properties described 
323.5   in section 469.174, subdivision 10, paragraph (a), clause (2); 
323.6      (2) acquiring adjacent parcels necessary to provide a site 
323.7   of sufficient size to permit development, of the parcels 
323.8   containing substandard structures or properties described in 
323.9   section 469.174, subdivision 10, paragraph (a), clause (2); 
323.10     (3) demolition of structures, including any required 
323.11  relocation costs; 
323.12     (4) clearing of the land, and other site preparation; 
323.13     (5) repair or rehabilitation of substandard buildings and 
323.14  improvements where necessary to eliminate unhealthful, 
323.15  unsanitary, or unsafe conditions or to remove or prevent the 
323.16  spread of blight; 
323.17     (6) removal or remediation of hazardous substance; and 
323.18     (7) installation of utilities, roads, sidewalks, and 
323.19  parking facilities for the site. 
323.20     (c) All costs must relate directly to financing 
323.21  redevelopment of the parcels containing substandard structures 
323.22  or property described in section 469.174, subdivision 10, 
323.23  paragraph (a), clause (2).  
323.24     (d) The allocated administrative expenses of the authority, 
323.25  costs required under section 469.175, subdivision 1a, for the 
323.26  district, and expenses under section 469.175, subdivision 7, 
323.27  paragraphs (f) and (g), for the district may be included in the 
323.28  qualifying costs. 
323.29     Sec. 14.  Minnesota Statutes 1996, section 469.176, 
323.30  subdivision 6, is amended to read: 
323.31     Subd. 6.  [ACTION REQUIRED.] If, after four three years 
323.32  from the date of certification of the original net tax capacity 
323.33  of the tax increment financing district pursuant to section 
323.34  469.177, no demolition, rehabilitation, or renovation of 
323.35  property or other site preparation, including qualified 
323.36  improvement of a street adjacent to a parcel but not 
324.1   installation of utility service including sewer or water 
324.2   systems, has been commenced on a parcel located within a tax 
324.3   increment financing district by the authority or by the owner of 
324.4   the parcel in accordance with the tax increment financing plan, 
324.5   no additional tax increment may be taken from that parcel, and 
324.6   the original net tax capacity of that parcel shall be excluded 
324.7   from the original net tax capacity of the tax increment 
324.8   financing district.  If the authority or the owner of the parcel 
324.9   subsequently commences demolition, rehabilitation, or renovation 
324.10  or other site preparation on that parcel including qualified 
324.11  improvement of a street adjacent to that parcel, in accordance 
324.12  with the tax increment financing plan, the authority shall 
324.13  certify to the county auditor that the activity has commenced, 
324.14  and the county auditor shall certify the net tax capacity 
324.15  thereof as most recently certified by the commissioner of 
324.16  revenue and add it to the original net tax capacity of the tax 
324.17  increment financing district.  The county auditor must enforce 
324.18  the provisions of this subdivision.  The authority must submit 
324.19  to the county auditor evidence that the required activity has 
324.20  taken place for each parcel in the district.  The evidence for a 
324.21  parcel must be submitted by February 1 of the fifth fourth year 
324.22  following the year in which the parcel was certified as included 
324.23  in the district.  For purposes of this subdivision, qualified 
324.24  improvements of a street are limited to (1) construction or 
324.25  opening of a new street, (2) relocation of a street, and (3) 
324.26  substantial reconstruction or rebuilding of an existing street.  
324.27  For purposes of this subdivision, a public improvement is only 
324.28  made in accordance with the tax increment financing plan, if it 
324.29  was specifically included in the plan before the improvement was 
324.30  undertaken or if at least 20 percent of the cost of the 
324.31  improvement was financed by increment from the district or 
324.32  obligations secured by increment from the district. 
324.33     Sec. 15.  Minnesota Statutes 1996, section 469.177, 
324.34  subdivision 1, is amended to read: 
324.35     Subdivision 1.  [ORIGINAL NET TAX CAPACITY.] (a) Upon or 
324.36  after adoption of a tax increment financing plan, the auditor of 
325.1   any county in which the district is situated shall, upon request 
325.2   of the authority, certify the original net tax capacity of the 
325.3   tax increment financing district and that portion of the 
325.4   district overlying any subdistrict as described in the tax 
325.5   increment financing plan and shall certify in each year 
325.6   thereafter the amount by which the original net tax capacity has 
325.7   increased or decreased as a result of a change in tax exempt 
325.8   status of property within the district and any subdistrict, 
325.9   reduction or enlargement of the district or changes pursuant to 
325.10  subdivision 4.  
325.11     (b) In the case of a mined underground space development 
325.12  district the county auditor shall certify the original net tax 
325.13  capacity as zero, plus the net tax capacity, if any, previously 
325.14  assigned to any subsurface area included in the mined 
325.15  underground space development district pursuant to section 
325.16  272.04. 
325.17     (c) For districts approved under section 469.175, 
325.18  subdivision 3, or parcels added to existing districts after May 
325.19  1, 1988, if the classification under section 273.13 of property 
325.20  located in a district changes to a classification that has a 
325.21  different assessment ratio, the original net tax capacity of 
325.22  that property must be redetermined at the time when its use is 
325.23  changed as if the property had originally been classified in the 
325.24  same class in which it is classified after its use is changed. 
325.25     (d) The amount to be added to the original net tax capacity 
325.26  of the district as a result of previously tax exempt real 
325.27  property within the district becoming taxable equals the net tax 
325.28  capacity of the real property as most recently assessed pursuant 
325.29  to section 273.18 or, if that assessment was made more than one 
325.30  year prior to the date of title transfer rendering the property 
325.31  taxable, the net tax capacity assessed by the assessor at the 
325.32  time of the transfer.  If substantial taxable improvements were 
325.33  made to a parcel after certification of the district and if the 
325.34  property later becomes tax exempt, in whole or part, as a result 
325.35  of the authority acquiring the property through foreclosure or 
325.36  exercise of remedies under a lease or other revenue agreement or 
326.1   as a result of tax forfeiture, the amount to be added to the 
326.2   original net tax capacity of the district as a result of the 
326.3   property again becoming taxable is the amount of the parcel's 
326.4   value that was included in original net tax capacity when the 
326.5   parcel was first certified.  The amount to be added to the 
326.6   original net tax capacity of the district as a result of 
326.7   enlargements equals the net tax capacity of the added real 
326.8   property as most recently certified by the commissioner of 
326.9   revenue as of the date of modification of the tax increment 
326.10  financing plan pursuant to section 469.175, subdivision 4. 
326.11     (e) For districts approved under section 469.175, 
326.12  subdivision 3, or parcels added to existing districts after May 
326.13  1, 1988, if the net tax capacity of a property increases because 
326.14  the property no longer qualifies under the Minnesota 
326.15  agricultural property tax law, section 273.111; the Minnesota 
326.16  open space property tax law, section 273.112; or the 
326.17  metropolitan agricultural preserves act, chapter 473H, or 
326.18  because platted, unimproved property is improved or three years 
326.19  pass after approval of the plat under section 273.11, 
326.20  subdivision 1, the increase in net tax capacity must be added to 
326.21  the original net tax capacity.  
326.22     (f) Each year the auditor shall also add to the original 
326.23  net tax capacity of each economic development district an amount 
326.24  equal to the original net tax capacity for the preceding year 
326.25  multiplied by the average percentage increase in the market 
326.26  value of all property included in the economic development 
326.27  district during the five years prior to certification of the 
326.28  district.  In computing the average percentage increase in 
326.29  market value, the auditor shall exclude the market value, as 
326.30  estimated by the assessor, that is attributable to new 
326.31  construction; extension of sewer, water, roads, or other public 
326.32  utilities; or platting of the land. 
326.33     (g) The amount to be subtracted from the original net tax 
326.34  capacity of the district as a result of previously taxable real 
326.35  property within the district becoming tax exempt, or a reduction 
326.36  in the geographic area of the district, shall be the amount of 
327.1   original net tax capacity initially attributed to the property 
327.2   becoming tax exempt or being removed from the district.  If the 
327.3   net tax capacity of property located within the tax increment 
327.4   financing district is reduced by reason of a court-ordered 
327.5   abatement, stipulation agreement, voluntary abatement made by 
327.6   the assessor or auditor or by order of the commissioner of 
327.7   revenue, the reduction shall be applied to the original net tax 
327.8   capacity of the district when the property upon which the 
327.9   abatement is made has not been improved since the date of 
327.10  certification of the district and to the captured net tax 
327.11  capacity of the district in each year thereafter when the 
327.12  abatement relates to improvements made after the date of 
327.13  certification.  The county auditor may specify reasonable form 
327.14  and content of the request for certification of the authority 
327.15  and any modification thereof pursuant to section 469.175, 
327.16  subdivision 4.  
327.17     (h) If a parcel of property contained a substandard 
327.18  building that was demolished or removed and if the authority 
327.19  elects to treat the parcel as occupied by a substandard building 
327.20  under section 469.174, subdivision 10, paragraph (b), the 
327.21  auditor shall certify the original net tax capacity of the 
327.22  parcel using the greater of (1) the current net tax capacity of 
327.23  the parcel, or (2) the estimated market value of the parcel for 
327.24  the year in which the building was demolished or removed, but 
327.25  applying the class rates for the current year. 
327.26     Sec. 16.  Minnesota Statutes 1996, section 469.177, 
327.27  subdivision 3, is amended to read: 
327.28     Subd. 3.  [TAX INCREMENT, RELATIONSHIP TO CHAPTERS 276A AND 
327.29  473F.] (a) Unless The governing body elects pursuant to clause 
327.30  (b) may, by resolution approving the tax increment financing 
327.31  plan under section 469.175, subdivision 3, for a redevelopment 
327.32  district, elect that the following method of computation shall 
327.33  apply applies: 
327.34     (1) The original net tax capacity and the current net tax 
327.35  capacity shall be determined before the application of the 
327.36  fiscal disparity provisions of chapter 276A or 473F.  Where the 
328.1   original net tax capacity is equal to or greater than the 
328.2   current net tax capacity, there is no captured net tax capacity 
328.3   and no tax increment determination.  Where the original net tax 
328.4   capacity is less than the current net tax capacity, the 
328.5   difference between the original net tax capacity and the current 
328.6   net tax capacity is the captured net tax capacity.  This amount 
328.7   less any portion thereof which the authority has designated, in 
328.8   its tax increment financing plan, to share with the local taxing 
328.9   districts is the retained captured net tax capacity of the 
328.10  authority.  
328.11     (2) The county auditor shall exclude the retained captured 
328.12  net tax capacity of the authority from the net tax capacity of 
328.13  the local taxing districts in determining local taxing district 
328.14  tax rates.  The local tax rates so determined are to be extended 
328.15  against the retained captured net tax capacity of the authority 
328.16  as well as the net tax capacity of the local taxing districts.  
328.17  The tax generated by the extension of the lesser of (A) the 
328.18  local taxing district tax rates or (B) the original local tax 
328.19  rate to the retained captured net tax capacity of the authority 
328.20  is the tax increment of the authority.  
328.21     (b) The governing body may, by resolution approving the tax 
328.22  increment financing plan pursuant to section 469.175, 
328.23  subdivision 3, elect If no election has been made under 
328.24  paragraph (a), the following method of computation applies to 
328.25  determine the amount of tax increment: 
328.26     (1) The original net tax capacity shall be determined 
328.27  before the application of the fiscal disparity provisions of 
328.28  chapter 276A or 473F.  The current net tax capacity shall 
328.29  exclude any fiscal disparity commercial-industrial net tax 
328.30  capacity increase between the original year and the current year 
328.31  multiplied by the fiscal disparity ratio determined pursuant to 
328.32  section 276A.06, subdivision 7, or 473F.08, subdivision 6.  
328.33  Where the original net tax capacity is equal to or greater than 
328.34  the current net tax capacity, there is no captured net tax 
328.35  capacity and no tax increment determination.  Where the original 
328.36  net tax capacity is less than the current net tax capacity, the 
329.1   difference between the original net tax capacity and the current 
329.2   net tax capacity is the captured net tax capacity.  This amount 
329.3   less any portion thereof which the authority has designated, in 
329.4   its tax increment financing plan, to share with the local taxing 
329.5   districts is the retained captured net tax capacity of the 
329.6   authority.  
329.7      (2) The county auditor shall exclude the retained captured 
329.8   net tax capacity of the authority from the net tax capacity of 
329.9   the local taxing districts in determining local taxing district 
329.10  tax rates.  The local tax rates so determined are to be extended 
329.11  against the retained captured net tax capacity of the authority 
329.12  as well as the net tax capacity of the local taxing districts.  
329.13  The tax generated by the extension of the lesser of (A) the 
329.14  local taxing district tax rates or (B) the original local tax 
329.15  rate to the retained captured net tax capacity of the authority 
329.16  is the tax increment of the authority.  
329.17     (3) An election by the governing body pursuant to paragraph 
329.18  (b) (a) shall be submitted to the county auditor by the 
329.19  authority at the time of the request for certification pursuant 
329.20  to subdivision 1. 
329.21     (c) The method of computation of tax increment applied to a 
329.22  district pursuant to paragraph (a) or (b) shall remain the same 
329.23  for the duration of the district, except that the governing body 
329.24  may elect to change its election from the method of computation 
329.25  in paragraph (a) to the method in paragraph (b). 
329.26     Sec. 17.  Minnesota Statutes 1996, section 469.177, 
329.27  subdivision 4, is amended to read: 
329.28     Subd. 4.  [PRIOR PLANNED IMPROVEMENTS.] The authority 
329.29  shall, after diligent search, accompany its request for 
329.30  certification to the county auditor pursuant to subdivision 1, 
329.31  or its notice of district enlargement pursuant to section 
329.32  469.175, subdivision 4, with a listing of all properties within 
329.33  the tax increment financing district or area of enlargement for 
329.34  which building permits have been issued during the 18 months 
329.35  immediately preceding approval of the tax increment financing 
329.36  plan by the municipality pursuant to section 469.175, 
330.1   subdivision 3.  The county auditor shall increase the original 
330.2   net tax capacity of the district by the net tax capacity of each 
330.3   improvement for which a building permit was issued.  For 
330.4   purposes of this subdivision, the term "building permit" means 
330.5   any permit issued by municipality or another political 
330.6   subdivision as a final condition for construction of an 
330.7   improvement to real property. 
330.8      Sec. 18. [BUFFALO LAKE.] 
330.9      Subdivision 1.  [EXTENSION OF TIME FOR CERTIFICATION.] 
330.10  Notwithstanding the provisions of Minnesota Statutes, section 
330.11  273.1399, subdivision 6, paragraph (b), clause (2), tax 
330.12  increment financing district No. 1-1 in the city of Buffalo Lake 
330.13  is an exempt district under Minnesota Statutes, section 
330.14  273.1399, paragraph (b), if the facility is certified by the 
330.15  commissioner of agriculture by December 31, 1998. 
330.16     Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
330.17  approval by the governing body of the city of Buffalo Lake under 
330.18  Minnesota Statutes, section 645.021, subdivision 2. 
330.19     Sec. 19.  [EAST GRAND FORKS] 
330.20     Subdivision 1.  [TIF EXTENSION.] The governing body of the 
330.21  city of East Grand Forks may extend the duration of tax 
330.22  increment financing district No. 2 (Gateway East) by up to 12 
330.23  additional years.  The district terminates no later than the end 
330.24  of calendar year 2012. 
330.25     Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
330.26  compliance by the governing body of the city of East Grand Forks 
330.27  with the provisions of Minnesota Statutes, sections 469.1782, 
330.28  subdivision 2; and 645.021. 
330.29     Sec. 20.  [COON RAPIDS; ECONOMIC DEVELOPMENT.] 
330.30     Subdivision 1.  [AUTHORIZATION.] Notwithstanding the 
330.31  provisions of Minnesota Statutes, section 469.176, subdivision 
330.32  1b, upon approval of the governing body of the city of Coon 
330.33  Rapids by resolution, the duration of the tax increment 
330.34  financing districts of the Coon Rapids economic development 
330.35  authority designated 2-1, 2-2, and 2-3 may be extended to 
330.36  December 31, 2010. 
331.1      Subd. 2.  [SPECIAL RULES.] (a) The tax increment financing 
331.2   districts of the Coon Rapids economic development authority 
331.3   designated 2-1, 2-2, and 2-3 are subject to Minnesota Statutes, 
331.4   sections 469.174 to 469.178, except as provided in this 
331.5   subdivision. 
331.6      (b) Tax increment revenues derived from the districts may 
331.7   only be applied to the payment of project costs described in the 
331.8   tax increment plans for the tax increment financing districts on 
331.9   the date of final enactment of this section and to the payment 
331.10  of the costs incurred with respect to the reconstruction and 
331.11  upgrading of the existing state and county bridges and roadways 
331.12  within the project area of the districts. 
331.13     (c) Notwithstanding Minnesota Statutes, section 469.176, 
331.14  subdivision 1, tax increment revenue generated from each 
331.15  district may be paid to the authority until the earlier of (1) 
331.16  December 31, 2010; or (2) the date upon which all bonded 
331.17  indebtedness or contractual obligations of the authority 
331.18  relating to the districts have terminated. 
331.19     Subd. 3.  [EFFECTIVE DATE.] This section is effective upon 
331.20  compliance by the governing bodies of the city of Coon Rapids, 
331.21  the county of Anoka, and independent school district No. 11, 
331.22  Anoka-Hennepin, with Minnesota Statutes, section 645.021, 
331.23  subdivision 2. 
331.24     Sec. 21.  [GAYLORD.] 
331.25     Subdivision 1.  [TIF DISTRICT EXTENSION AND EXPANSION.] 
331.26  Notwithstanding the provisions of Minnesota Statutes, section 
331.27  469.176, subdivision 1c, the city of Gaylord may, by resolution, 
331.28  extend the duration of a tax increment financing district 
331.29  originally certified in 1978.  The city may not extend the 
331.30  duration beyond December 31, 2008. 
331.31     Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
331.32  compliance with the requirements of Minnesota Statutes, sections 
331.33  469.1782 and 645.021. 
331.34     Sec. 22.  [BROOKLYN CENTER.] 
331.35     Subdivision 1.  [USE OF TAX INCREMENT FINANCING.] Tax 
331.36  increment financing district No. 3, established on December 19, 
332.1   1994, by Brooklyn Center Resolution No. 94-273, which includes 
332.2   the Brookdale regional shopping center, is exempt from Minnesota 
332.3   Statutes, section 469.1763, subdivision 3, until December 19, 
332.4   2004. 
332.5      Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
332.6   compliance by the city council of Brooklyn Center with the 
332.7   requirements of Minnesota Statutes, section 645.021. 
332.8      Sec. 23.  [ECONOMIC DEVELOPMENT TIF DISTRICT; DOUGLAS 
332.9   COUNTY.] 
332.10     Subdivision 1.  [AUTHORIZATION.] The Douglas county housing 
332.11  and redevelopment authority or the Brandon economic development 
332.12  authority may establish a tax increment financing district for a 
332.13  tourism facility including a theme park, amusement park, 
332.14  cultural facilities, recreational facilities, lodging 
332.15  facilities, retail facilities, and associated commercial 
332.16  development. 
332.17     Subd. 2.  [SPECIAL RULES.] (a) The tax increment financing 
332.18  district is subject to Minnesota Statutes, sections 469.174 to 
332.19  469.179, with the exceptions listed in this subdivision. 
332.20     (b) The tax increment financing district may encompass up 
332.21  to 360 acres and all taxable improvements within the district 
332.22  are deemed a tourism facility and qualified as an economic 
332.23  development district for purposes of Minnesota Statutes, 
332.24  sections 469.174, subdivisions 12 and 22; and 469.176, 
332.25  subdivision 4c. 
332.26     (c) Minnesota Statutes, section 469.1763, subdivision 3, 
332.27  does not apply to the tax increment financing district. 
332.28     (d) Notwithstanding Minnesota Statutes, section 469.176, 
332.29  subdivision 1b, the maximum duration of the tax increment 
332.30  financing district is 20 years from the receipt of the first tax 
332.31  increment financing district.  The authority must decertify the 
332.32  district after all the costs of the public improvements 
332.33  identified in the increment financing plan have been paid. 
332.34     Subd. 3.  [EFFECTIVE DATE.] This section is effective upon 
332.35  approval of the original tax increment financing plan for the 
332.36  tax increment financing district by the affected school board, 
333.1   county board, and township board or city council and upon 
333.2   approval of the governing body of the authority under Minnesota 
333.3   Statutes, section 645.021, subdivision 2. 
333.4      Sec. 24.  [CITY OF MINNETONKA; HOUSING DEVELOPMENT 
333.5   ACCOUNT.] 
333.6      Subdivision 1.  [DEPOSITS IN ACCOUNT.] The Minnetonka 
333.7   economic development authority may deposit the balance of 
333.8   revenues derived from tax increment from housing tax increment 
333.9   financing district No. 1 in the housing development account of 
333.10  the authority.  These increments may be expended for housing 
333.11  activities in accordance with the tax increment financing plan, 
333.12  if before depositing the increments or making any expenditures 
333.13  for housing activities under this section, the authority and 
333.14  city: 
333.15     (1) elect, by resolution, to decertify housing tax 
333.16  increment financing district No. 1 as of December 31, 1997; and 
333.17     (2) identify in the plan the housing activities that will 
333.18  be assisted by the housing development account.  
333.19     The election to decertify and any necessary plan amendment 
333.20  may be approved before or after the effective date of this 
333.21  section. 
333.22     Subd. 2.  [PERMITTED HOUSING ACTIVITIES.] For the purposes 
333.23  of this section, housing activities:  
333.24     (1) may include rehabilitation, acquisition, demolition, 
333.25  and financing of new or existing single family or multifamily 
333.26  housing and public improvements directly related to such 
333.27  activities, together with other related activities specified in 
333.28  the housing action plan approved by the city or the authority in 
333.29  compliance with Minnesota Statutes, sections 473.25 to 473.254; 
333.30     (2) may be located anywhere within the city without regard 
333.31  to the boundaries of any tax increment financing district or 
333.32  project area; and 
333.33     (3) for rental and owner-occupied housing, must meet the 
333.34  income, rent, or sales price limitations established from time 
333.35  to time by the metropolitan council under Minnesota Statutes, 
333.36  sections 473.25 to 473.254. 
334.1      Subd. 3.  [SEPARATE ACCOUNT REQUIRED.] Tax increment to be 
334.2   expended for housing activities under this section must be 
334.3   segregated by the authority into a special housing development 
334.4   account on its official books and records.  The account may also 
334.5   receive funds from other public and private sources. 
334.6      Subd. 4.  [EFFECTIVE DATE.] This section is effective upon 
334.7   approval by the governing body of the city of Minnetonka under 
334.8   Minnesota Statutes, section 645.021, subdivision 2. 
334.9      Sec. 25.  Laws 1995, chapter 264, article 5, section 44, 
334.10  subdivision 4, as amended by Laws 1996, chapter 471, article 7, 
334.11  section 21, is amended to read: 
334.12     Subd. 4.  [AUTHORITY.] For housing replacement projects in 
334.13  the city of Crystal, "authority" means the Crystal economic 
334.14  development authority.  For housing replacement projects in the 
334.15  city of Fridley, "authority" means the housing and redevelopment 
334.16  authority in and for the city of Fridley or a successor in 
334.17  interest.  For housing replacement projects in the city of 
334.18  Minneapolis, "authority" means the Minneapolis community 
334.19  development agency.  For housing replacement projects in the 
334.20  city of St. Paul, "authority" means the St. Paul housing and 
334.21  redevelopment authority.  For housing replacement projects in 
334.22  the city of Duluth, "authority" means the Duluth economic 
334.23  development authority.  For housing replacement projects in the 
334.24  city of Richfield, "authority" is the authority as defined in 
334.25  Minnesota Statutes, section 469.174, subdivision 2, that is 
334.26  designated by the governing body of the city of Richfield.  For 
334.27  housing replacement projects in the city of Columbia Heights, 
334.28  "authority" is the authority as defined in Minnesota Statutes, 
334.29  section 469.174, subdivision 2, that is designated by the 
334.30  governing body of the city of Columbia Heights. 
334.31     Sec. 26.  Laws 1995, chapter 264, article 5, section 45, 
334.32  subdivision 1, as amended by Laws 1996, chapter 471, article 7, 
334.33  section 22, is amended to read: 
334.34     Subdivision 1.  [CREATION OF PROJECTS.] (a) An authority 
334.35  may create a housing replacement project under sections 44 to 
334.36  47, as provided in this section. 
335.1      (b) For the cities of Crystal, Fridley, and Richfield, and 
335.2   Columbia Heights, the authority may designate up to 50 parcels 
335.3   in the city to be included in a housing replacement district.  
335.4   No more than ten parcels may be included in year one of the 
335.5   district, with up to ten additional parcels added to the 
335.6   district in each of the following nine years.  For the cities of 
335.7   Minneapolis, St. Paul, and Duluth, each authority may designate 
335.8   up to 100 parcels in the city to be included in a housing 
335.9   replacement district over the life of the district.  The only 
335.10  parcels that may be included in a district are (1) vacant sites, 
335.11  (2) parcels containing vacant houses, or (3) parcels containing 
335.12  houses that are structurally substandard, as defined in 
335.13  Minnesota Statutes, section 469.174, subdivision 10.  
335.14     (c) The city in which the authority is located must pay at 
335.15  least 25 percent of the housing replacement project costs from 
335.16  its general fund, a property tax levy, or other unrestricted 
335.17  money, not including tax increments. 
335.18     (d) The housing replacement district plan must have as its 
335.19  sole object the acquisition of parcels for the purpose of 
335.20  preparing the site to be sold for market rate housing.  As used 
335.21  in this section, "market rate housing" means housing that has a 
335.22  market value that does not exceed 150 percent of the average 
335.23  market value of single-family housing in that municipality. 
335.24     Sec. 27.  [DEFINITIONS.] 
335.25     Subdivision 1.  [AUTHORITY.] "Authority" or "authorities" 
335.26  means the Minneapolis public housing authority and the 
335.27  Minneapolis community development agency if and to the extent 
335.28  that the governing body has delegated to either the powers and 
335.29  duties hereunder pursuant to section 28, subdivision 4, 
335.30  paragraph (b). 
335.31     Subd. 2.  [CAPTURED NET TAX CAPACITY.] "Captured net tax 
335.32  capacity" means the amount by which the current net tax capacity 
335.33  of the housing transition district exceeds the original net tax 
335.34  capacity, including the value of property normally taxable as 
335.35  personal property by reason of its location on or over property 
335.36  owned by a tax exempt entity. 
336.1      Subd. 3.  [CITY.] "City" means the city of Minneapolis, 
336.2   Minnesota. 
336.3      Subd. 4.  [CONSENT DECREE.] "Consent decree" means the 
336.4   order of the United States District Court issued in connection 
336.5   with <i>Hollman et. al. vs. Cisneros et. al.,</i> United States 
336.6   District Court, Civil Case 4-92-712, as may be amended from time 
336.7   to time. 
336.8      Subd. 5.  [COUNTY AUDITOR.] "County auditor" means the 
336.9   county auditor of Hennepin county, Minnesota. 
336.10     Subd. 6.  [GOVERNING BODY.] "Governing body" means the city 
336.11  council of the city. 
336.12     Subd. 7.  [HOUSING TRANSITION DISTRICT; DISTRICT.] "Housing 
336.13  transition district" or "district" means a geographic area 
336.14  within the city designated by the governing body that consists 
336.15  of (1) parcels that contain or contained public housing 
336.16  structures scheduled for demolition or demolished in accordance 
336.17  with the terms of the consent decree and (2) additional parcels 
336.18  not to exceed ten percent of the size of the area under clause 
336.19  (1). 
336.20     Subd. 8.  [NONTAXABLE PARCEL.] "Nontaxable parcel" means a 
336.21  parcel to be included within the housing transition district 
336.22  which at the time of certification is not subject to property 
336.23  taxation by reason of public ownership. 
336.24     Subd. 9.  [ORIGINAL NET TAX CAPACITY.] (a) With respect to 
336.25  nontaxable parcels within the district, "original net tax 
336.26  capacity" means zero. 
336.27     (b) With respect to taxable parcels within the district, 
336.28  "original net tax capacity" means the net tax capacity of the 
336.29  parcels as certified by the commissioner of revenue for the 
336.30  appropriate assessment year.  For purposes of this subdivision, 
336.31  the appropriate assessment year is the previous assessment year, 
336.32  if a request by the authority for certification has been made to 
336.33  the county auditor by June 30.  If the request for certification 
336.34  is filed after June 30, the appropriate assessment year is the 
336.35  current assessment year. 
336.36     Subd. 10.  [PARCEL.] "Parcel" means a tract or plat of land 
337.1   established prior to the certification of the district as a 
337.2   single unit for purposes of assessment. 
337.3      Subd. 11.  [PREEXISTING DISTRICT.] "Preexisting district" 
337.4   means any tax increment district within which is located a 
337.5   parcel proposed to be included within the housing transition 
337.6   district. 
337.7      Subd. 12.  [TAXABLE PARCEL.] "Taxable parcel" means a 
337.8   parcel to be included within the housing transition district 
337.9   which is subject to property taxation at the time of 
337.10  certification. 
337.11     Sec. 28.  [ESTABLISHMENT OF HOUSING TRANSITION DISTRICT.] 
337.12     Subdivision 1.  [CREATION.] The governing body may 
337.13  establish a housing transition district within the city.  The 
337.14  parcels included within the district need not be contiguous but 
337.15  must all be designated and included at the time the district is 
337.16  initially established.  Parcels must not be added to the 
337.17  district after its initial certification. 
337.18     Subd. 2.  [TAX INCREMENT.] (a) Upon request of the 
337.19  authority, the county auditor shall certify the original net tax 
337.20  capacity of the district and shall certify in each year 
337.21  thereafter the amount by which the original net tax capacity 
337.22  increases as a result of the conditions described in Minnesota 
337.23  Statutes, section 469.177, subdivision 4, or decreases as a 
337.24  result of the conditions described in Minnesota Statutes, 
337.25  section 469.177, subdivision 1, paragraph (g).  No other changes 
337.26  shall be made in original net tax capacity once certified by the 
337.27  county auditor. 
337.28     (b) The provisions of Minnesota Statutes, section 469.177, 
337.29  subdivisions 1a and 3 to 10, apply to the computation of tax 
337.30  increment for the housing transition district created under 
337.31  sections 27 to 29. 
337.32     (c) If an authority request for certification includes 
337.33  nontaxable parcels then within a preexisting district, the 
337.34  county auditor shall remove such parcels from the preexisting 
337.35  district.  If an authority request for certification includes 
337.36  taxable parcels then within a preexisting district, the county 
338.1   auditor shall allocate all taxes derived from the captured net 
338.2   tax capacity attributable thereto to the preexisting district. 
338.3      Subd. 3.  [HOUSING TRANSITION DISTRICT PLAN.] To establish 
338.4   a housing transition district, the governing body shall adopt a 
338.5   housing transition district plan which constitutes a tax 
338.6   increment financing plan, as used in those provisions of 
338.7   Minnesota Statutes, sections 469.174 to 469.1781, made 
338.8   applicable by sections 27 to 30, and contains the following: 
338.9      (1) a general description of the plans for development of 
338.10  the district; 
338.11     (2) a description of the parcels to be included in the 
338.12  district, including such information regarding each as shall 
338.13  establish that the district meets the conditions described in 
338.14  section 27, subdivision 7; 
338.15     (3) the most recent net tax capacity of each parcel 
338.16  included in the district; 
338.17     (4) a budget containing estimated tax increment collections 
338.18  and expenditures as authorized or permitted by sections 27 to 
338.19  29; 
338.20     (5) estimates of the sources of revenue, public and 
338.21  private, other than tax increment to pay estimated or budgeted 
338.22  costs; 
338.23     (6) statements of the alternate estimated impacts of the 
338.24  housing transition district on the net tax capacities of all 
338.25  taxing jurisdictions in which the housing transition district is 
338.26  located in whole or in part.  For purposes of one statement, the 
338.27  statement shall assume that the estimated captured net tax 
338.28  capacity would be available to the taxing jurisdictions without 
338.29  creation of the housing transition district, and for purposes of 
338.30  the second statement, it shall be assumed that none of the 
338.31  estimated captured net tax capacity would be available to the 
338.32  taxing jurisdictions without creation of the housing transition 
338.33  district. 
338.34     Subd. 4.  [PROCEDURE.] (a) The provisions of Minnesota 
338.35  Statutes, section 469.175, subdivisions 3, 5, 6, and 6a, apply 
338.36  to the establishment and operation of the housing transition 
339.1   district created under sections 27 to 29, except the 
339.2   determinations required by Minnesota Statutes, section 469.175, 
339.3   subdivision 3, clauses (1) and (2), are not required. 
339.4      (b) Upon approval of the housing transition district plan, 
339.5   the governing body shall delegate to one or both of the 
339.6   authorities the powers and duties regarding the implementation 
339.7   and administration of the housing transition district it 
339.8   determines appropriate. 
339.9      Sec. 29.  [LIMITATIONS.] 
339.10     Subdivision 1.  [DURATION.] Tax increment generated by the 
339.11  district must cease to be paid to the authority after 20 years 
339.12  from the receipt by the authority of the first tax increment 
339.13  from the district. 
339.14     Subd. 2.  [USE.] (a) All tax increment received by the 
339.15  authority from the district must be used in accordance with the 
339.16  housing transition district plan. 
339.17     (b) Tax increment may be used to pay the costs of: 
339.18     (1) acquiring title to or an ownership interest in any 
339.19  property within the district; 
339.20     (2) relocating owners of or tenants in any property within 
339.21  the district; 
339.22     (3) demolishing all or a part of any structures or other 
339.23  improvements within the district; 
339.24     (4) site preparation, soil correction, and infrastructure 
339.25  improvements within the district; 
339.26     (5) rehabilitating or constructing any housing structures 
339.27  or other improvements within the district; 
339.28     (6) constructing public improvements associated with 
339.29  development within the district; 
339.30     (7) making loans or grants to public or private entities in 
339.31  order to facilitate development within the district; and 
339.32     (8) administering the creation and operation of the 
339.33  district or the implementation of the consent decree, including 
339.34  reimbursement for costs previously incurred or advanced and not 
339.35  reimbursed. 
339.36     (c) The authority may pay the costs authorized by this 
340.1   subdivision, directly, through the issuance and sale of 
340.2   obligations pursuant to Minnesota Statutes, section 469.178, by 
340.3   means of loans or grants to the current or future owners of 
340.4   property within the district, or through the exercise of any 
340.5   authority contained in Minnesota Statutes, sections 469.001 to 
340.6   469.047. 
340.7      (d) Minnesota Statutes, section 469.176, subdivision 4g, 
340.8   applies to the district.  Minnesota Statutes, section 469.176, 
340.9   subdivision 3, applies to the district, except "15" is 
340.10  substituted for "ten" in paragraph (a) of subdivision 3. 
340.11     Sec. 30.  [APPLICABILITY OF OTHER LAWS.] 
340.12     Minnesota Statutes, sections 469.174 to 469.179, apply to 
340.13  the housing transition district or tax increment generated 
340.14  pursuant to sections 27 to 29 only to the extent specified in 
340.15  sections 27 to 29.  The housing transition district does not 
340.16  have a longer duration than permitted by general law for 
340.17  purposes of Minnesota Statutes, section 469.1782. 
340.18     Sec. 31.  [REPEALER.] 
340.19     Minnesota Statutes, section 469.176, subdivision 1a and 5, 
340.20  are repealed. 
340.21     Sec. 32.  [EFFECTIVE DATE.] 
340.22     Sections 1, 2, 4, 5, 6, 9, 11, 14, 15, and 17 and section 
340.23  31's repeal of Minnesota Statutes, section 469.176, subdivision 
340.24  1a, are effective for districts for which the requests for 
340.25  certification are made after June 1, 1997. 
340.26     Section 3 and section 31's repeal of Minnesota Statutes, 
340.27  section 469.176, subdivision 5, are effective for districts for 
340.28  which the request for certification was made after July 31, 
340.29  1979, and section 3 is intended to confirm the intent of the 
340.30  original law, except that the provisions of clauses (2) and (3) 
340.31  apply only to proceeds from sales and leases of properties 
340.32  purchased by the authority after June 1, 1997, and repayments of 
340.33  advances and loans that were made after June 1, 1997. 
340.34     Sections 7 and 12 are effective for spending of tax 
340.35  increments finally approved after June 1, 1997. 
340.36     Section 8 is effective for agreements entered into after 
341.1   June 1, 1997. 
341.2      Section 10 is effective for tax increment financing 
341.3   districts that are decertified after June 1, 1997. 
341.4      Section 13 is effective for tax increment financing 
341.5   districts for which the request for certification was made after 
341.6   October 4, 1989, and is intended to confirm the intent of the 
341.7   original law. 
341.8      Section 16 is effective for districts for which the 
341.9   requests for certifications are made after August 1, 1997.  
341.10     Sections 25 and 26 are effective on the day the chief 
341.11  clerical officer of the city of Columbia Heights complies with 
341.12  Minnesota Statutes, sections 645.021, subdivision 3. 
341.13     Sections 27 to 30 are effective on the day following final 
341.14  enactment and upon compliance by the governing body with 
341.15  Minnesota Statutes, section 645.021, subdivision 3. 
341.16                             ARTICLE 14
341.17                    INTERGOVERNMENTAL RELATIONS 
341.18     Section 1.  [3.986] [DEFINITIONS.] 
341.19     Subdivision 1.  [SCOPE.] The terms used in sections 3.986 
341.20  to 3.989 have the meanings given them in this section. 
341.21     Subd. 2.  [COSTS MANDATED BY THE STATE.] (a) "Costs 
341.22  mandated by the state" means increased costs that a political 
341.23  subdivision is required to incur as a result of a law enacted or 
341.24  an executive order issued after June 30, 1997: 
341.25     (1) a law that mandates a new program or an increased level 
341.26  of service of an existing program; 
341.27     (2) an executive order that mandates a new program; 
341.28     (3) an executive order that implements or interprets a 
341.29  state law and, by its implementation or interpretation, 
341.30  increases program levels above the levels required before July 
341.31  1, 1997; 
341.32     (4) a law or executive order that implements or interprets 
341.33  federal law and, by its implementation or interpretation, 
341.34  increases program or service levels above the levels required by 
341.35  the federal law; 
341.36     (5) a law or executive order that implements or interprets 
342.1   a statute or amendment adopted or enacted pursuant to the 
342.2   approval of a statewide ballot measure by the voters and, by its 
342.3   implementation or interpretation, increases program or service 
342.4   levels above the levels required by the ballot measure; 
342.5      (6) a law or executive order that removes an option 
342.6   previously available to political subdivisions and thus 
342.7   increases program or service levels or prohibits a specific 
342.8   activity and so forces political subdivisions to use a more 
342.9   costly alternative to provide a mandated program or service; 
342.10     (7) a law or executive order that requires that an existing 
342.11  program or service be provided in a shorter time period and thus 
342.12  increases the cost of the program or service; 
342.13     (8) a law or executive order that adds new requirements to 
342.14  an existing optional program or service and thus increases the 
342.15  cost of the program or service because the political 
342.16  subdivisions have no reasonable alternative other than to 
342.17  continue the optional program; 
342.18     (9) a law or executive order that creates new revenue 
342.19  losses by new property or sales and use tax exemptions; 
342.20     (10) a law or executive order that requires costs 
342.21  previously incurred at local option that have subsequently been 
342.22  mandated by the state; or 
342.23     (11) a law enacted or an executive order that requires 
342.24  payment of a new fee or increases the amount of an existing fee. 
342.25     (b) When state law or executive actions are intended to 
342.26  achieve compliance with federal law or court orders, state 
342.27  mandates are determined as follows:  
342.28     (1) if the federal law or court order is discretionary, the 
342.29  state law or executive action is a state mandate; 
342.30     (2) if the state law or executive action exceeds what is 
342.31  required by the federal law or court order, only the provisions 
342.32  of the state action that exceed the federal requirements are a 
342.33  state mandate; and 
342.34     (3) if the state statutory or executive action does not 
342.35  exceed what is required by the federal statute or regulation or 
342.36  court order, the state action is not a state mandate.  
343.1      (c) Costs mandated by the state include the costs of a rule 
343.2   issued after June 30, 1997, that:  
343.3      (1) mandates a new responsibility; and 
343.4      (2) implements or interprets a state statute, and by doing 
343.5   so increases program levels above the levels required before 
343.6   June 30, 1997. 
343.7      Subd. 3.  [EXECUTIVE ORDER.] "Executive order" means an 
343.8   order, plan, requirement, or rule issued by the governor, an 
343.9   official serving at the pleasure of the governor, or an agency, 
343.10  department, board, or commission of state government.  Executive 
343.11  order does not include an order, plan, requirement, or rule 
343.12  issued by a regional water quality control board.  
343.13     Subd. 4.  [MANDATE.] A "mandate" is a requirement imposed 
343.14  upon a political subdivision in a law by a state agency or by 
343.15  judicial authority that, if not complied with, results in (1) 
343.16  civil liability, (2) criminal penalty, or (3) administrative 
343.17  sanctions such as reduction or loss of funding. 
343.18     Subd. 5.  [POLITICAL SUBDIVISION.] A "political 
343.19  subdivision" is a county, home rule charter or statutory city, 
343.20  town, or other taxing district or municipal corporation except a 
343.21  school district.  
343.22     Subd. 6.  [REQUIRING AN INCREASED LEVEL OF 
343.23  SERVICE.] "Requiring an increased level of service" includes 
343.24  requiring that an existing service be provided in a shorter time.
343.25     Subd. 7.  [RULE.] "Rule" means a rule, order, or standard 
343.26  of general application adopted by a state agency to implement, 
343.27  interpret, or make specific the law it enforces or administers 
343.28  or to govern its procedure.  Rule includes an amendment to a 
343.29  rule.  Rule does not include a rule that relates only to the 
343.30  internal management of a state agency.  
343.31     Subd. 8.  [SAVINGS.] "Savings" includes budget reductions 
343.32  and the freeing of staff or resources to be reassigned to a 
343.33  political subdivision's other areas of concern.  
343.34     Sec. 2.  [3.987] [FISCAL NOTES FOR STATE-MANDATED ACTIONS.] 
343.35     Subdivision 1.  [STATE AND LOCAL MANDATES OFFICE.] When the 
343.36  state proposes to mandate that a political subdivision take an 
344.1   action, and when reasonable compliance with that action would 
344.2   force the political subdivision to incur costs mandated by the 
344.3   state, a fiscal note must be prepared as provided in section 
344.4   3.98, subdivision 2, and made available to the public upon 
344.5   request.  If the action is among the exceptions listed in 
344.6   section 3.988, a fiscal note need not be prepared.  
344.7      An office of state and local mandates in the department of 
344.8   finance is created.  The commissioner shall make a reasonable 
344.9   and timely determination of the estimated and actual financial 
344.10  effects on each political subdivision of each program mandated 
344.11  by law including each rulemaking proposed by an administrative 
344.12  agency.  The commissioner of finance may require the 
344.13  commissioner of the appropriate administrative agency of the 
344.14  state to supply in a timely manner any information determined by 
344.15  the division to be necessary to determine local financial 
344.16  effects.  The commissioner shall convey the requested 
344.17  information to the commissioner of finance with a signed 
344.18  statement to the effect that the information is accurate and 
344.19  complete to the best of the commissioner's ability.  
344.20     The commissioner, when requested, shall update the 
344.21  determination of financial effects based on either actual cost 
344.22  figures or improved estimates or both.  
344.23     Subd. 2.  [MANDATE EXPLANATIONS.] Any bill introduced in 
344.24  the legislature after June 30, 1997, that seeks to impose 
344.25  program or financial mandates on political subdivisions must 
344.26  include an attachment that gives appropriate responses to the 
344.27  following guidelines.  It must state and list:  
344.28     (1) the policy goals that are sought to be attained, the 
344.29  performance standards that are to be imposed, and an explanation 
344.30  why the goals and standards will best be served by requiring 
344.31  compliance by political subdivisions; 
344.32     (2) performance standards that will allow political 
344.33  subdivisions flexibility and innovation of method in achieving 
344.34  these goals; 
344.35     (3) the reasons for each prescribed standard and the 
344.36  process by which each standard governs inputs such as staffing 
345.1   and other administrative aspects of the program; 
345.2      (4) the sources of additional revenue, in addition to 
345.3   existing funding for similar programs, that are directly linked 
345.4   to imposition of the mandates that will provide adequate and 
345.5   stable funding for their requirements; 
345.6      (5) what input has been obtained to ensure that the 
345.7   implementing agencies have the capacity to carry out the 
345.8   delegated responsibilities; and 
345.9      (6) the reasons why less intrusive measures such as 
345.10  financial incentives or voluntary compliance would not yield the 
345.11  equity, efficiency, or desired level of statewide uniformity in 
345.12  the proposed program.  
345.13     Subd. 3.  [LOCAL INVOLVEMENT; LAWS.] Any bill introduced in 
345.14  the legislature after June 30, 1997, that seeks to impose a 
345.15  program or financial mandate on political subdivisions must 
345.16  include as an attachment a description of the efforts put forth, 
345.17  if any, to involve political subdivisions in the creation or 
345.18  development of the proposed mandate.  
345.19     Subd. 4.  [NO MANDATE RESTRICTION.] Except as specifically 
345.20  provided, nothing in sections 3.986 to 3.989 and 14.431 
345.21  restricts or eliminates the authority of the state to create or 
345.22  impose programs by law upon political subdivisions. 
345.23     Sec. 3.  [3.988] [EXCEPTIONS TO FISCAL NOTES.] 
345.24     Subdivision 1.  [COSTS RESULTING FROM INFLATION.] A fiscal 
345.25  note need not be prepared for increases in the cost of providing 
345.26  an existing service if the increases result directly from 
345.27  inflation.  "Resulting directly from inflation" means 
345.28  attributable to maintaining an existing level of service rather 
345.29  than increasing the level of service.  A cost-of-living increase 
345.30  in welfare benefits is an example of a cost resulting directly 
345.31  from inflation.  
345.32     Subd. 2.  [COSTS NOT THE RESULT OF A NEW PROGRAM OR 
345.33  INCREASED SERVICE.] A fiscal note need not be prepared for 
345.34  increased local costs that do not result from a new program or 
345.35  an increased level of service. 
345.36     Subd. 3.  [MISCELLANEOUS EXCEPTIONS.] A fiscal note or an 
346.1   attachment as provided in section 3.987, subdivision 2, need not 
346.2   be prepared for the cost of a mandated action if the law, 
346.3   including a rulemaking, containing the mandate:  
346.4      (1) accommodates a specific local request; 
346.5      (2) results in no new local government duties; 
346.6      (3) leads to revenue losses from exemptions to taxes; 
346.7      (4) provided only clarifying or conforming, nonsubstantive 
346.8   charges on local government; 
346.9      (5) imposes additional net local costs that are minor (less 
346.10  than $200 for any single local government if the mandate does 
346.11  not apply statewide or less than $3,000,000 if the mandate is 
346.12  statewide) and do not cause a financial burden on local 
346.13  government; 
346.14     (6) is a law or executive order enacted before July 1, 
346.15  1997, or a rule initially implementing a law enacted before July 
346.16  1, 1997; 
346.17     (7) implements something other than a law or executive 
346.18  order, such as a federal, court, or voter-approved mandate; 
346.19     (8) defines a new crime or redefines an existing crime or 
346.20  infraction; 
346.21     (9) results in savings that equal or exceed costs; 
346.22     (10) requires the holding of elections; 
346.23     (11) ensures due process or equal protection; 
346.24     (12) provides for the notification and conduct of public 
346.25  meetings; 
346.26     (13) establishes the procedures for administrative and 
346.27  judicial review of actions taken by political subdivisions; 
346.28     (14) protects the public from malfeasance, misfeasance, or 
346.29  nonfeasance by officials of political subdivisions; 
346.30     (15) relates directly to financial administration, 
346.31  including the levy, assessment, and collection of taxes; 
346.32     (16) relates directly to the preparation and submission of 
346.33  financial audits necessary to the administration of state laws; 
346.34  or 
346.35     (17) requires uniform standards to apply to public and 
346.36  private institutions without differentiation. 
347.1      Sec. 4.  [3.989] [REIMBURSEMENT TO LOCAL POLITICAL 
347.2   SUBDIVISIONS FOR COSTS OF STATE MANDATES.] 
347.3      Subdivision 1.  [DEFINITIONS.] In this section: 
347.4      (1) "Class A state mandates" means those laws under which 
347.5   the state mandates to political subdivisions, their 
347.6   participation, the organizational structure of the program, and 
347.7   the procedural regulations under which the law must be 
347.8   administered; and 
347.9      (2) "Class B state mandates" means those mandates that 
347.10  allow the political subdivisions to opt for administration of a 
347.11  law with program elements mandated beforehand and with an 
347.12  assured revenue level from the state of 90 percent of full 
347.13  program and administrative costs.  
347.14     Subd. 2.  [REPORT.] The commissioner of finance shall 
347.15  prepare by September 1, 1998, and by September 1 of each year 
347.16  thereafter, a report by political subdivisions of the costs of 
347.17  class A state mandates established after June 30, 1997.  
347.18     The commissioner shall annually include the statewide total 
347.19  of the statement of costs of class A mandates as a notation in 
347.20  the state budget for the next fiscal year.  
347.21     Subd. 3.  [CERTAIN POLITICAL SUBDIVISIONS; REPORT.] The 
347.22  political subdivisions that have opted to administer class B 
347.23  state mandates shall report to the commissioner of finance by 
347.24  September 1, 1998, and by September 1 of each year thereafter, 
347.25  identifying each instance when revenue for a class B state 
347.26  mandate has fallen below 85 percent of the total cost of the 
347.27  program and the political subdivision intends to cease 
347.28  administration of the program.  
347.29     The commissioner shall forward a copy of the report to the 
347.30  chairs of the appropriate funding committees of the senate and 
347.31  the house for proposed inclusion of the shortfall as a line item 
347.32  appropriation in the state budget for the next fiscal year.  
347.33     The political subdivision may exercise its option to cease 
347.34  administration only if the legislature has failed to include the 
347.35  shortfall as an appropriation in the state budget for the next 
347.36  fiscal year.  
348.1      Subd. 4.  [EXEMPTIONS.] Laws and executive orders 
348.2   enumerated in section 3.988 are exempted from this section. 
348.3      Sec. 5.  [14.431] [PERIODIC REVIEW OF ADMINISTRATIVE 
348.4   RULES.] 
348.5      Subdivision 1.  [DEFINITIONS.] The terms defined in section 
348.6   3.986, subdivision 1, apply to this section. 
348.7      Subd. 2.  [SIGNIFICANT FINANCIAL IMPACT.] The commissioner 
348.8   of finance shall review, every five years, rules adopted after 
348.9   June 30, 1997, that have significant financial impact upon 
348.10  political subdivisions.  In this section, "significant financial 
348.11  impact" means requiring local political subdivisions to expand 
348.12  existing services, employ additional personnel, or increase 
348.13  local expenditures.  The commissioner shall determine the costs 
348.14  and benefits of each rulemaking and submit a report to the 
348.15  legislative coordinating commission with its opinion, if any, 
348.16  for the continuation, modification, or elimination of the rules 
348.17  in the rulemaking.  
348.18     Sec. 6.  Minnesota Statutes 1996, section 273.1398, is 
348.19  amended by adding a subdivision to read: 
348.20     Subd. 9.  [DEDUCTION FROM AID PAYMENTS.] (a) The 
348.21  commissioner of finance shall bill the commissioner of revenue 
348.22  for the cost of preparation of fiscal notes as required by 
348.23  section 3.897 only to the extent to which those costs exceed 
348.24  those costs incurred in fiscal year 1997 and for any other new 
348.25  costs attributable to the operation of the state and local 
348.26  mandates office required by section 3.897, not to exceed $50,000 
348.27  per year. 
348.28     (b) The commissioner of revenue shall reduce the aid 
348.29  amounts determined under subdivision 2 for counties, cities, and 
348.30  towns by whatever uniform percentage is necessary to recover the 
348.31  costs billed in paragraph (a). 
348.32     (c) The amount billed under section 14.431, subdivision 2, 
348.33  is appropriated to the commissioner of finance for the 
348.34  preparation of fiscal notes under section 3.897. 
348.35     Sec. 7.  Minnesota Statutes 1996, section 477A.05, is 
348.36  amended to read: 
349.1      477A.05 [LOCAL PERFORMANCE AID.] 
349.2      Subdivision 1.  [QUALIFICATION.] By May 15, 1996, and March 
349.3   31 25 of each year thereafter, the commissioner shall send a 
349.4   local performance aid qualification form to each county and city 
349.5   in the state.  Jurisdictions that are eligible to receive the 
349.6   aid must return the completed form by June 30 in order to 
349.7   receive aid in the following calendar year.  For each 
349.8   determinator specified in subdivision 2, the form shall have a 
349.9   space for the jurisdiction to indicate that it has satisfied the 
349.10  conditions of the determinator.  For counties, the form must be 
349.11  signed by the chair of the county board.  For cities, the form 
349.12  must be signed by the mayor, if the city has a mayor, and a 
349.13  member the chair of the city council.  Applications may be filed 
349.14  jointly by jurisdictions planning to spend the aid jointly. 
349.15     Subd. 2.  [ELIGIBILITY DETERMINATOR.] For calendar year 
349.16  1997 1998 and subsequent calendar years, a jurisdiction is 
349.17  eligible to receive local performance aid if the jurisdiction 
349.18  affirms that it (1) the aid will result in a reduction in 
349.19  property taxes at least equal to the amount of aid received, and 
349.20  (2) the jurisdiction will spend the aid on programs for which it 
349.21  has developed a system of performance measures for the services 
349.22  provided by the jurisdiction, and that these measures are will 
349.23  allow for the measurement of continuous improvement and will be 
349.24  regularly compiled and presented to the county board or the city 
349.25  council at least once a year.  The jurisdiction must identify 
349.26  the program or programs that are to be funded with the aid.  A 
349.27  jurisdiction is also eligible for aid under this determinator if 
349.28  it affirms that it is in the process of developing and 
349.29  implementing a system of performance measures for the program or 
349.30  programs for which the aid is being sought; however, eligibility 
349.31  based upon being in the process of development may not be used 
349.32  for more than two consecutive years aid amounts under this 
349.33  section may not be spent on the program or programs until the 
349.34  performance measurement system has been instituted, unless the 
349.35  aid is being used to establish the performance measurement 
349.36  system. 
350.1      Subd. 3.  [DETERMINATION OF AID AMOUNT.] (a) The 
350.2   commissioner shall sum the populations of all jurisdictions that 
350.3   have met the condition conditions specified in subdivision 2.  
350.4   The commissioner shall determine a per capita aid amount by 
350.5   dividing the aggregate aid available under subdivision 5 by the 
350.6   sum of the populations for all qualifying jurisdictions, 
350.7   separately for counties and cities.  Each jurisdiction shall 
350.8   then be eligible for aid equal to the jurisdictions's population 
350.9   times the per capita aid amount.  For purposes of this 
350.10  subdivision, population means the most recent population 
350.11  established under section 477A.011, subdivision 3, in the year 
350.12  in which the aid is determined. 
350.13     (b) If the program qualifying for aid is either (1) a 
350.14  collaborative program involving two or more jurisdictions, at 
350.15  least one of which is a county, (2) a program that is efficient, 
350.16  meaning that future total costs for providing the service will 
350.17  be reduced as a result of the program, or (3) a program that is 
350.18  innovative, in that it restructures the relationship between the 
350.19  governments responsible for providing the services or 
350.20  substantively changes the method for providing services, the 
350.21  jurisdiction's population will be increased by a factor of 1.5 
350.22  for the purposes of this subdivision.  A school district is 
350.23  considered to be a jurisdiction for the purposes of qualifying 
350.24  as a collaborative program under clause (1).  If the program is 
350.25  both collaborative and efficient, or both collaborative and 
350.26  innovative, the jurisdiction's population will be increased by a 
350.27  factor of two for the purposes of this subdivision.  The 
350.28  jurisdiction shall indicate on its application whether it 
350.29  qualifies for treatment under this paragraph. 
350.30     Subd. 4.  [NOTIFICATION AND PAYMENT.] Jurisdictions shall 
350.31  be notified of their aid under this section at the same time as 
350.32  the notification for aid under section 477A.014, subdivision 1.  
350.33  Payments of aid under this section shall be made on the dates 
350.34  prescribed in section 477A.015. 
350.35     Subd. 5.  [APPROPRIATION.] (a) For payments to counties 
350.36  under this section, there is annually appropriated from the 
351.1   general fund to the commissioner of revenue an amount equal to 
351.2   the sum of $558,625 plus the amount by which county aids were 
351.3   reduced under Laws 1996, chapter 471, article 3, section 49, 
351.4   adjusted for inflation as provided under section 477A.03, 
351.5   subdivision 3.  For payments to cities under this section, there 
351.6   is annually appropriated from the general fund to the 
351.7   commissioner of revenue an amount equal to the sum of $441,735 
351.8   plus the amount by which city aids were reduced under Laws 1996, 
351.9   chapter 471, article 3, section 49, adjusted for inflation as 
351.10  provided under section 477A.03, subdivision 3. 
351.11     (b) For aids payable in 1998 and 1999 under this section, 
351.12  an additional amount of $2,790,000 for counties and $2,210,000 
351.13  for cities is appropriated from the general fund to the 
351.14  commissioner of revenue. 
351.15     Sec. 8.  [REPEALER.] 
351.16     Minnesota Statutes 1996, section 3.982, is repealed. 
351.17     Sec. 9.  [EFFECTIVE DATE.] 
351.18     Section 7 is effective beginning with aids payable in 1998. 
351.19                             ARTICLE 15
351.20                         FISCAL DISPARITIES
351.21     Section 1.  Minnesota Statutes 1996, section 276A.04, is 
351.22  amended to read: 
351.23     276A.04 [INCREASE IN NET TAX CAPACITY.] 
351.24     By July August 15 of 1997 and each subsequent year, the 
351.25  auditor of each county in the area shall determine the amount, 
351.26  if any, by which the net tax capacity determined in the 
351.27  preceding year pursuant to section 276A.03, of 
351.28  commercial-industrial property subject to taxation within each 
351.29  municipality in the county exceeds the net tax capacity in 1995 
351.30  of commercial-industrial property subject to taxation within 
351.31  that municipality.  If a municipality is located in two or more 
351.32  counties within the area, the auditors of those counties shall 
351.33  certify the data required by section 276A.03 to the county 
351.34  auditor responsible for allocating the levies of that 
351.35  municipality between or among the affected counties.  That 
351.36  county auditor shall determine the amount of the net excess, if 
352.1   any, for the municipality under this section, and certify that 
352.2   amount under section 276A.05.  The increase in total net tax 
352.3   capacity determined by this section must be reduced by the 
352.4   amount of any decreases in the net tax capacity of 
352.5   commercial-industrial property resulting from any court 
352.6   decisions, court-related stipulation agreements, or abatements 
352.7   for a prior year, and only in the amount of such decreases made 
352.8   during the 12-month period ending on May 1 of the current 
352.9   assessment year, where the decreases, if originally reflected in 
352.10  the determination of a prior year's net tax capacity under 
352.11  section 276A.03, would have resulted in a smaller contribution 
352.12  from the municipality in that year.  An adjustment for the 
352.13  decreases shall be made only if the municipality made a 
352.14  contribution in a prior year based on the higher net tax 
352.15  capacity of the commercial-industrial property. 
352.16     Sec. 2.  Minnesota Statutes 1996, section 276A.05, 
352.17  subdivision 1, is amended to read: 
352.18     Subdivision 1.  [AREAWIDE NET TAX CAPACITY.] Each county 
352.19  auditor shall certify the determinations under sections 276A.03 
352.20  and 276A.04 to the administrative auditor on or before August 1 
352.21  15 of each year.  The administrative auditor shall determine an 
352.22  amount equal to 40 percent of the sum of the amounts certified 
352.23  pursuant to section 276A.04.  The resulting amount shall be 
352.24  known as the "areawide net tax capacity for ........(year)."  
352.25     Sec. 3.  Minnesota Statutes 1996, section 276A.05, 
352.26  subdivision 5, is amended to read: 
352.27     Subd. 5.  [CERTIFICATION.] The product of the procedure 
352.28  prescribed by subdivision 4 shall be known as the "areawide net 
352.29  tax capacity for ......(year) attributable to 
352.30  ..........(municipality)."  The administrative auditor shall 
352.31  certify the product to the auditor of the county in which the 
352.32  municipality is located on or before August September 15. 
352.33     Sec. 4.  Minnesota Statutes 1996, section 276A.06, 
352.34  subdivision 2, is amended to read: 
352.35     Subd. 2.  [DEFINITION.] The net tax capacity of a 
352.36  governmental unit is its net tax capacity as determined in 
353.1   accordance with other provisions of law including section 
353.2   469.177, subdivision 3, subject to the following adjustments:  
353.3      (a) There must be subtracted from its net tax capacity, in 
353.4   each municipality in which the governmental unit exercises ad 
353.5   valorem taxing jurisdiction, an amount that bears the same 
353.6   proportion to 40 percent of the amount certified in that year 
353.7   pursuant to sections 276A.04 and 276A.05 for the municipality as 
353.8   the total preceding year's net tax capacity of 
353.9   commercial-industrial property which is subject to the taxing 
353.10  jurisdiction of the governmental unit within the municipality, 
353.11  determined without regard to section 469.177, subdivision 3, 
353.12  bears to the total preceding year's net tax capacity of 
353.13  commercial-industrial property within the municipality, 
353.14  determined without regard to section 469.177, subdivision 3.  
353.15     (b) There must be added to its net tax capacity, in each 
353.16  municipality in which the governmental unit exercises ad valorem 
353.17  taxing jurisdiction, an amount which bears the same proportion 
353.18  to the areawide net tax capacity for the year attributable to 
353.19  that municipality as the total preceding year's net tax capacity 
353.20  of residential property which is subject to the taxing 
353.21  jurisdiction of the governmental unit within the municipality 
353.22  bears to the total preceding year's net tax capacity of 
353.23  residential property of the municipality.  
353.24     Sec. 5.  Minnesota Statutes 1996, section 276A.06, 
353.25  subdivision 3, is amended to read: 
353.26     Subd. 3.  [APPORTIONMENT OF LEVY.] The county auditor shall 
353.27  apportion the levy of each governmental unit in the county in 
353.28  the manner prescribed by this subdivision.  The auditor shall: 
353.29     (a) by August 20 of 1997 and each subsequent year, 
353.30  determine the areawide portion of the levy for each governmental 
353.31  unit by multiplying the local tax rate of the governmental unit 
353.32  for the preceding current levy year times the distribution value 
353.33  set forth in subdivision 2, clause (b); and 
353.34     (b) by September 5 of 1997 and each subsequent year, 
353.35  determine the local portion of the current year's levy by 
353.36  subtracting the resulting amount from clause (a) from the 
354.1   governmental unit's current year's levy. 
354.2      Sec. 6.  Minnesota Statutes 1996, section 276A.06, 
354.3   subdivision 5, is amended to read: 
354.4      Subd. 5.  [AREAWIDE TAX RATE.] (a) On or before August 25 
354.5   February 5 of 1997 and each subsequent year, the county auditor 
354.6   shall certify to the administrative auditor that portion of the 
354.7   levy of each governmental unit determined pursuant to 
354.8   subdivision 3, clause (a).  The administrative auditor shall 
354.9   then determine the areawide tax rate sufficient to yield an 
354.10  amount equal to the sum of the levies from the areawide net tax 
354.11  capacity.  
354.12     (b) On or before September 1 February 10 of each year, the 
354.13  administrative auditor shall certify the areawide tax rate to 
354.14  each of the county auditors. 
354.15     For the purposes of the notice required under section 
354.16  275.065, the deadline for the certification under paragraph (a) 
354.17  is October 10, and the deadline for certification under 
354.18  paragraph (b) is October 15. 
354.19     For any governmental unit for which the county auditor has 
354.20  not yet determined the local tax rate by January 31, the county 
354.21  auditor shall determine the areawide portion of the levy based 
354.22  on an estimated tax rate.  In the following year, the 
354.23  distribution levy of the unit must be adjusted to correct for 
354.24  the difference between the distribution levy actually received 
354.25  and the distribution levy that would have been received if the 
354.26  actual tax rate had been used. 
354.27     Sec. 7.  Minnesota Statutes 1996, section 473F.06, is 
354.28  amended to read: 
354.29     473F.06 [INCREASE IN NET TAX CAPACITY.] 
354.30     On or before July August 15 of each year, the auditor of 
354.31  each county in the area shall determine the amount, if any, by 
354.32  which the net tax capacity determined in the preceding year 
354.33  under section 473F.05, of commercial-industrial property subject 
354.34  to taxation within each municipality in the auditor's county 
354.35  exceeds the net tax capacity in 1971 of commercial-industrial 
354.36  property subject to taxation within that municipality.  If a 
355.1   municipality is located in two or more counties within the area, 
355.2   the auditors of those counties shall certify the data required 
355.3   by section 473F.05 to the county auditor who is responsible 
355.4   under other provisions of law for allocating the levies of that 
355.5   municipality between or among the affected counties.  That 
355.6   county auditor shall determine the amount of the net excess, if 
355.7   any, for the municipality under this section, and certify that 
355.8   amount under section 473F.07.  Notwithstanding any other 
355.9   provision of sections 473F.01 to 473F.13 to the contrary, in the 
355.10  case of a municipality which is designated on July 24, 1971, as 
355.11  a redevelopment area under section 401(a)(4) of the Public Works 
355.12  and Economic Development Act of 1965, Public Law Number 89-136, 
355.13  the increase in its net tax capacity of commercial-industrial 
355.14  property for purposes of this section shall be determined in 
355.15  each year by using as a base the net tax capacity of 
355.16  commercial-industrial property in that municipality in the 1989 
355.17  assessment year, rather than the net tax capacity of such 
355.18  property in 1971.  The increase in total net tax capacity 
355.19  determined by this section shall be reduced by the amount of any 
355.20  decreases in net tax capacity of commercial-industrial property 
355.21  resulting from any court decisions, court related stipulation 
355.22  agreements, or abatements for a prior year, and only in the 
355.23  amount of such decreases made during the 12-month period ending 
355.24  on May 1 of the current assessment year, where such decreases, 
355.25  if originally reflected in the determination of a prior year's 
355.26  net tax capacity under section 473F.05, would have resulted in a 
355.27  smaller contribution from the municipality in that year.  An 
355.28  adjustment for such decreases shall be made only if the 
355.29  municipality made a contribution in a prior year based on the 
355.30  higher net tax capacity of the commercial-industrial property. 
355.31     Sec. 8.  Minnesota Statutes 1996, section 473F.07, 
355.32  subdivision 1, is amended to read: 
355.33     Subdivision 1.  [AREAWIDE NET TAX CAPACITY.] Each county 
355.34  auditor shall certify the determinations under sections 473F.05 
355.35  and 473F.06 to the administrative auditor on or before August 1 
355.36  15 of each year.  
356.1      The administrative auditor shall determine an amount equal 
356.2   to 40 percent of the sum of the amounts certified under section 
356.3   473F.06.  The resulting amount shall be known as the "areawide 
356.4   net tax capacity for ........(year)." 
356.5      Sec. 9.  Minnesota Statutes 1996, section 473F.07, 
356.6   subdivision 5, is amended to read: 
356.7      Subd. 5.  [CERTIFICATION TO COUNTY AUDITOR.] The result of 
356.8   the procedure prescribed by subdivision 4 shall be known as the 
356.9   "areawide net tax capacity for ........(year) attributable to 
356.10  ..................(municipality)."  The administrative auditor 
356.11  shall certify such product to the auditor of the county in which 
356.12  the municipality is located on or before August September 15. 
356.13     Sec. 10.  Minnesota Statutes 1996, section 473F.08, 
356.14  subdivision 2, is amended to read: 
356.15     Subd. 2.  [COMPUTATION OF NET TAX CAPACITY.] The net tax 
356.16  capacity of a governmental unit is its net tax capacity, as 
356.17  determined in accordance with other provisions of law including 
356.18  section 469.177, subdivision 3, subject to the following 
356.19  adjustments:  
356.20     (a) There shall be subtracted from its net tax capacity, in 
356.21  each municipality in which the governmental unit exercises ad 
356.22  valorem taxing jurisdiction, an amount which bears the same 
356.23  proportion to 40 percent of the amount certified in that year 
356.24  under sections 473F.06 and 473F.07 for the municipality as the 
356.25  total preceding year's net tax capacity of commercial-industrial 
356.26  property which is subject to the taxing jurisdiction of the 
356.27  governmental unit within the municipality, determined without 
356.28  regard to section 469.177, subdivision 3, bears to the total 
356.29  preceding year's net tax capacity of commercial-industrial 
356.30  property within the municipality, determined without regard to 
356.31  section 469.177, subdivision 3; 
356.32     (b) There shall be added to its net tax capacity, in each 
356.33  municipality in which the governmental unit exercises ad valorem 
356.34  taxing jurisdiction, an amount which bears the same proportion 
356.35  to the areawide net tax capacity for the year attributable to 
356.36  that municipality as the total preceding year's net tax capacity 
357.1   of residential property which is subject to the taxing 
357.2   jurisdiction of the governmental unit within the municipality 
357.3   bears to the total preceding year's net tax capacity of 
357.4   residential property of the municipality.  
357.5      Sec. 11.  Minnesota Statutes 1996, section 473F.08, 
357.6   subdivision 3, is amended to read: 
357.7      Subd. 3.  [APPORTIONMENT OF LEVY.] The county auditor shall 
357.8   apportion the levy of each governmental unit in the auditor's 
357.9   county in the manner prescribed by this subdivision.  The 
357.10  auditor shall: 
357.11     (a) by August 20, determine the areawide portion of the 
357.12  levy for each governmental unit by multiplying the local tax 
357.13  rate of the governmental unit for the preceding current levy 
357.14  year times the distribution value set forth in subdivision 2, 
357.15  clause (b); and 
357.16     (b) by September 5, determine the local portion of the 
357.17  current year's levy by subtracting the resulting amount from 
357.18  clause (a) from the governmental unit's current year's levy. 
357.19     Sec. 12.  Minnesota Statutes 1996, section 473F.08, 
357.20  subdivision 5, is amended to read: 
357.21     Subd. 5.  [AREAWIDE TAX RATE.] (a) On or before August 25 
357.22  February 5 of each year, the county auditor shall certify to the 
357.23  administrative auditor that portion of the levy of each 
357.24  governmental unit determined under subdivisions 3, clause (a), 
357.25  3a, and 3b.  The administrative auditor shall then determine the 
357.26  areawide tax rate sufficient to yield an amount equal to the sum 
357.27  of such levies from the areawide net tax capacity. 
357.28     (b) On or before September 1 February 10 of each year, the 
357.29  administrative auditor shall certify the areawide tax rate to 
357.30  each of the county auditors. 
357.31     For the purposes of the notice required under section 
357.32  275.065, the deadline for the certification under paragraph (a) 
357.33  is October 10, and the deadline for certification under 
357.34  paragraph (b) is October 15. 
357.35     For any governmental unit for which the county auditor has 
357.36  not yet determined the local tax rate by January 31, the county 
358.1   auditor shall determine the areawide portion of the levy based 
358.2   on an estimated tax rate.  In the following year, the 
358.3   distribution levy of the unit must be adjusted to correct for 
358.4   the difference between the distribution levy actually received 
358.5   and the distribution levy that would have been received if the 
358.6   actual tax rate had been used. 
358.7      Sec. 13.  [REPEALER.] 
358.8      Minnesota Statutes 1996, sections 276A.06, subdivision 9; 
358.9   and 473F.08, subdivision 8a, are repealed. 
358.10     Sec. 14.  [EFFECTIVE DATE.] 
358.11     Sections 1 to 13 are effective for taxes payable in 1999 
358.12  and subsequent years. 
358.13                             ARTICLE 16
358.14                  REGIONAL DEVELOPMENT COMMISSIONS
358.15     Section 1.  Minnesota Statutes 1996, section 462.381, is 
358.16  amended to read: 
358.17     462.381 [TITLE.] 
358.18     Sections 462.381 to 462.398 may be cited as the "regional 
358.19  development act of 1969."  
358.20     Sec. 2.  Minnesota Statutes 1996, section 462.383, is 
358.21  amended to read: 
358.22     462.383 [PURPOSE:  GOVERNMENT COOPERATION AND 
358.23  COORDINATION.] 
358.24     Subdivision 1.  [LEGISLATIVE FINDINGS.] The legislature 
358.25  finds that problems of growth and development in urban and rural 
358.26  regions of the state so transcend the boundary lines of local 
358.27  government units that no single unit can plan for their solution 
358.28  without affecting other units in the region; that various 
358.29  multicounty planning activities conducted under various laws of 
358.30  the United States are presently being conducted in an 
358.31  uncoordinated manner that coordination of multijurisdictional 
358.32  activities is essential to the development and implementation of 
358.33  effective policies and programs; that intergovernmental 
358.34  cooperation on a regional basis is an effective means of pooling 
358.35  the resources of local government to approach common problems; 
358.36  and that the assistance of the state is needed to make the most 
359.1   effective use of local, state, federal, and private programs in 
359.2   serving the citizens of such urban and rural regions.  
359.3      Subd. 2.  [BY CREATING REGIONAL COMMISSION.] It is the 
359.4   purpose of sections 462.381 to 462.398 to facilitate 
359.5   intergovernmental cooperation and to insure the orderly and 
359.6   harmonious coordination of state, federal, and local 
359.7   comprehensive planning and development programs for the solution 
359.8   of economic, social, physical, and governmental problems of the 
359.9   state and its citizens by providing for the creation of regional 
359.10  development commissions authorize the establishment of regional 
359.11  development commissions to work with and on behalf of local 
359.12  units of government to develop plans or implement programs to 
359.13  address economic, social, physical, and governmental concerns of 
359.14  each region of the state.  The commissions may assist with, 
359.15  develop, or implement plans or programs for individual local 
359.16  units of government.  
359.17     Sec. 3.  Minnesota Statutes 1996, section 462.384, 
359.18  subdivision 5, is amended to read: 
359.19     Subd. 5.  [DEVELOPMENT REGION, REGION.] "Development 
359.20  region" or "region" means a geographic region composed of a 
359.21  grouping of counties embodied in an executive order of the 
359.22  governor or as otherwise established by sections 462.381 to 
359.23  462.398.  
359.24     Sec. 4.  Minnesota Statutes 1996, section 462.385, is 
359.25  amended to read: 
359.26     462.385 [DESIGNATION OF REGIONS; REGIONAL BOUNDARIES; 
359.27  MODIFICATION.] 
359.28     Subdivision 1.  [BY GOVERNOR'S ORDER; HEARINGS.] 
359.29  Development regions for the state shall be those regions so 
359.30  designated by the governor by executive order.  The order shall 
359.31  provide for public hearings within each proposed region after 
359.32  which any county may request assignment to a region other than 
359.33  that proposed by the order.  If a request for reassignment is 
359.34  unacceptable to the commissioner, the county shall remain in the 
359.35  originally designated region until the next session of the 
359.36  legislature for its review and final assignment. consist of the 
360.1   following counties: 
360.2      Region 1:  Kittson, Roseau, Marshall, Pennington, Red Lake, 
360.3   Polk, and Norman. 
360.4      Region 2:  Lake of the Woods, Beltrami, Mahnomen, 
360.5   Clearwater, and Hubbard. 
360.6      Region 3:  Koochiching, Itasca, St. Louis, Lake, Cook, 
360.7   Aitkin, and Carlton. 
360.8      Region 4:  Clay, Becker, Wilkin, Otter Tail, Grant, 
360.9   Douglas, Traverse, Stevens, and Pope. 
360.10     Region 5:  Cass, Wadena, Crow Wing, Todd, and Morrison. 
360.11     Region 6E:  Kandiyohi, Meeker, Renville, and McLeod. 
360.12     Region 6W:  Big Stone, Swift, Chippewa, Lac Qui Parle, and 
360.13  Yellow Medicine. 
360.14     Region 7E:  Mille Lacs, Kanabec, Pine, Isanti, and Chisago. 
360.15     Region 7W:  Stearns, Benton, Sherburne, and Wright. 
360.16     Region 8:  Lincoln, Lyon, Redwood, Pipestone, Murray, 
360.17  Cottonwood, Rock, Nobles, and Jackson. 
360.18     Region 9:  Sibley, Nicollet, LeSueur, Brown, Blue Earth, 
360.19  Waseca, Watonwan, Martin, and Faribault. 
360.20     Region 10:  Rice, Goodhue, Wabasha, Steele, Dodge, Olmsted, 
360.21  Winona, Freeborn, Mower, Fillmore, and Houston. 
360.22     Region 11:  Anoka, Hennepin, Ramsey, Washington, Carver, 
360.23  Scott, and Dakota. 
360.24     Subd. 2.  [EXISTING DEVELOPMENT DISTRICT BOUNDARIES.] The 
360.25  boundaries of any economic development district established 
360.26  under Section 403 of the United States Public Works and Economic 
360.27  Development Act of 1965 shall not be modified without the 
360.28  approval of an affected county and the development district. 
360.29     Subd. 3.  [ONGOING BOUNDARY STUDIES; CHANGES.] The 
360.30  commissioner shall conduct continuous studies and analysis of 
360.31  the boundaries of regions and shall make recommendations for 
360.32  their modification where necessary.  Modification of regional 
360.33  boundaries may be initiated by a county, a commission, or by the 
360.34  commissioner and will be accomplished in accordance with this 
360.35  section as in the case of initial designation requesting 
360.36  assignment to a region other than that within which it is 
361.1   designated.  If a request for reassignment is unacceptable to 
361.2   the commission whose boundaries would be modified, the county 
361.3   requesting reassignment shall remain in the originally 
361.4   designated region until the legislature determines the final 
361.5   assignment. 
361.6      Sec. 5.  Minnesota Statutes 1996, section 462.386, 
361.7   subdivision 1, is amended to read: 
361.8      Subdivision 1.  [EXCEPTION, WORKING AGREEMENTS.] All 
361.9   coordination, planning, and development regions assisted or 
361.10  created by the state of Minnesota or pursuant to federal 
361.11  legislation shall conform to the regions designated by the 
361.12  executive order except where, after review and approval by the 
361.13  commissioner governor or designee, nonconformance is clearly 
361.14  justified.  The commissioner governor or designee shall develop 
361.15  working agreements with state and federal departments and 
361.16  agencies to insure conformance with this subdivision. 
361.17     Sec. 6.  Minnesota Statutes 1996, section 462.387, is 
361.18  amended to read: 
361.19     462.387 [REGIONAL DEVELOPMENT COMMISSIONS; ESTABLISHMENT.] 
361.20     Subdivision 1.  [PETITION.] Any combination of counties or 
361.21  municipalities representing a majority of the population of the 
361.22  region for which a commission is proposed may petition the 
361.23  commissioner governor or designee by formal resolution setting 
361.24  forth its desire to establish, and the need for, the 
361.25  establishment of a regional development commission.  For 
361.26  purposes of this section the population of a county does not 
361.27  include the population of a municipality within the county. 
361.28     Subd. 1a.  [OPERATING COMMISSION.] Regional development 
361.29  commissions shall be those organizations operating pursuant to 
361.30  sections 462.381 to 462.398 which were formed by formal 
361.31  resolution of local units of government and those which may 
361.32  petition by formal resolution to establish a regional 
361.33  development commission. 
361.34     Subd. 3.  [ESTABLISHMENT.] Upon receipt of a petition as 
361.35  provided in subdivision 1 a regional development commission 
361.36  shall be established by the commissioner governor or designee 
362.1   and the notification of all local government units within the 
362.2   region for which the commission is proposed shall be notified.  
362.3   The notification shall be made within 60 days of 
362.4   the commissioner's governor's receipt of a petition under 
362.5   subdivision 1. 
362.6      Subd. 4.  [SELECTION OF MEMBERSHIP.] The commissioner 
362.7   governor or designee shall call together each of the membership 
362.8   classifications except citizen groups, defined in section 
362.9   462.388, within 60 days of the establishment of a regional 
362.10  development commission for the purpose of selecting the 
362.11  commission membership. 
362.12     Subd. 5.  [NAME OF COMMISSION.] The name of the 
362.13  organization shall be determined by formal resolution of the 
362.14  commission. 
362.15     Sec. 7.  Minnesota Statutes 1996, section 462.388, is 
362.16  amended to read: 
362.17     462.388 [COMMISSION MEMBERSHIP.] 
362.18     Subdivision 1.  [REPRESENTATION OF VARIOUS MEMBERS.] A 
362.19  commission shall consist of the following members: 
362.20     (1) one member from each county board of every county in 
362.21  the development region; 
362.22     (2) one additional county board member from each county of 
362.23  over 100,000 population; 
362.24     (3) the town clerk, town treasurer, or one member of a town 
362.25  board of supervisors from each county containing organized 
362.26  towns; 
362.27     (4) one additional member selected by the county board of 
362.28  any county containing no townships; 
362.29     (5) one mayor or council member from a municipality of 
362.30  under 10,000 population from each county, selected by the mayors 
362.31  of all such municipalities in the county; 
362.32     (6) one mayor or council member from each municipality of 
362.33  over 10,000 in each county; 
362.34     (7) two school board members elected by a majority of the 
362.35  chairs of school boards in the development region; 
362.36     (8) one member from each council of governments; 
363.1      (9) one member appointed by each native American tribal 
363.2   council located in each region; and 
363.3      (10) citizens representing public interests within the 
363.4   region including members of minority groups to be selected after 
363.5   adoption of the bylaws of the commission; and 
363.6      (10) the chair, who shall be selected by the commission. 
363.7      Subd. 2.  [TERMS, SELECTION METHOD.] The terms of office 
363.8   and method of selection of members other than the chair shall be 
363.9   provided in the bylaws of the commission which shall not be 
363.10  inconsistent with the provisions of subdivision 1.  The 
363.11  commission shall adopt rules setting forth its procedures. 
363.12     Subd. 5.  [PER DIEM; BOARD MEMBERS.] Members of the 
363.13  regional commission may receive a per diem of not over $35 $50, 
363.14  the amount to be determined by the commission, and shall be 
363.15  reimbursed for their reasonable expenses as determined by the 
363.16  commission.  The commission shall may provide for the election 
363.17  of a board of directors, who need not be commission members, and 
363.18  provide, at its discretion, for a per diem of not over $35 $50 a 
363.19  day for meetings of the board and expenses.  A member of the 
363.20  board of directors who is a member of the commission shall 
363.21  receive only the per diem payable to board members when meetings 
363.22  of the board of directors and the commission are held on the 
363.23  same day. 
363.24     Sec. 8.  Minnesota Statutes 1996, section 462.389, 
363.25  subdivision 1, is amended to read: 
363.26     Subdivision 1.  [CHAIR.] The chair of the commission shall 
363.27  have been a resident of the region for at least one year and 
363.28  shall be a person experienced in the field of government 
363.29  affairs.  The chair shall preside at the meetings of the 
363.30  commission and board of directors, appoint all employees 
363.31  thereof, subject to the approval of the commission, and be 
363.32  responsible for carrying out all policy decisions of the 
363.33  commission.  The chair's expense allowances shall be fixed by 
363.34  the commission.  The term of the first chair shall be one year, 
363.35  and the chair shall serve until a successor is selected and 
363.36  qualifies.  At the expiration of the term of the first chair, 
364.1   the chair shall be elected from the membership of the commission 
364.2   according to procedures established in its bylaws.  
364.3      Sec. 9.  Minnesota Statutes 1996, section 462.389, 
364.4   subdivision 3, is amended to read: 
364.5      Subd. 3.  [EXECUTIVE DIRECTOR.] Upon the recommendation of 
364.6   the chair, The commission may appoint an executive director to 
364.7   serve as the chief administrative officer.  The director may be 
364.8   chosen from among the citizens of the nation at large, and shall 
364.9   be selected on the basis of training and experience in the field 
364.10  of government affairs. 
364.11     Sec. 10.  Minnesota Statutes 1996, section 462.389, 
364.12  subdivision 4, is amended to read: 
364.13     Subd. 4.  [EMPLOYEES.] The commission may prepare, in 
364.14  consultation with the state commissioner of employee relations, 
364.15  and may adopt a merit personnel system for its officers and 
364.16  employees including terms and conditions for the employment, the 
364.17  fixing of compensation, their classification, benefits, and the 
364.18  filing of performance and fidelity bonds, and such policies of 
364.19  insurance as it may deem advisable, the premiums for which, 
364.20  however, shall be paid for by the commission.  Officers and 
364.21  employees are public employees within the meaning of chapter 
364.22  353.  The commission shall make the employer's contributions to 
364.23  pension funds of its employees.  
364.24     Sec. 11.  Minnesota Statutes 1996, section 462.39, 
364.25  subdivision 2, is amended to read: 
364.26     Subd. 2.  [FEDERAL REGIONAL PROGRAMS.] The commission is 
364.27  the authorized agency to receive state and federal grants public 
364.28  and private funds for regional purposes from the following 
364.29  programs: 
364.30     (1) Section 403 of the Public Works and Economic 
364.31  Development Act of 1965 (economic development districts); 
364.32     (2) Section 701 of the Housing Act of 1954, as amended 
364.33  (multicounty comprehensive planning); 
364.34     (3) Omnibus Crime Control Act of 1968; 
364.35     and for the following to the extent feasible as determined 
364.36  by the governor: 
365.1      (a) Economic Opportunity Act of 1964; 
365.2      (b) Comprehensive Health Planning Act of 1965; 
365.3      (c) Federal regional manpower planning programs; 
365.4      (d) Resource, conservation, and development districts; or 
365.5      (e) Any state and federal programs providing funds 
365.6   for including, but not limited to program administration, 
365.7   multicounty planning, coordination, and development 
365.8   purposes. The director shall, where consistent with state and 
365.9   federal statutes and regulations, review applications for all 
365.10  state and federal regional planning and development grants to a 
365.11  commission. 
365.12     Sec. 12.  Minnesota Statutes 1996, section 462.39, 
365.13  subdivision 3, is amended to read: 
365.14     Subd. 3.  [PLANNING.] The commission shall may prepare and 
365.15  adopt submit for adoption, after appropriate study and such 
365.16  public hearings as may be necessary, a comprehensive development 
365.17  plan plans for local units of government, individually or 
365.18  collectively, within the region.  The plan shall Plans may 
365.19  consist of a compilation of policy statements, goals, standards, 
365.20  programs, and maps prescribing guides for an orderly and 
365.21  economic development, public and private, of the region.  The 
365.22  comprehensive development plan within the jurisdiction subject 
365.23  to the plan.  The plans shall recognize and incorporate planning 
365.24  principles which encompass physical, social, or economic needs 
365.25  of the region, and those future developments which will have an 
365.26  impact on the entire region including but not limited to such 
365.27  matters as land use, parks and open space land needs, access to 
365.28  direct sunlight for solar energy systems, the necessity for and 
365.29  location of airports, highways, transit facilities, public 
365.30  hospitals, libraries, schools, public and private, housing, and 
365.31  other public buildings.  In preparing the development plan plans 
365.32  the commission shall use to the maximum extent feasible the 
365.33  resources studies and data available from other planning 
365.34  agencies within the region, including counties, municipalities, 
365.35  special districts, and subregional planning agencies, and it 
365.36  shall utilize the resources of the director state agencies to 
366.1   the same purpose.  No development plan or portion thereof for 
366.2   the region shall be adopted by the commission until it has been 
366.3   submitted to the director for review and comment and a period of 
366.4   60 days has elapsed after such submission.  When a development 
366.5   plan has been adopted, the commission shall distribute it to all 
366.6   local government units within the region. 
366.7      Sec. 13.  Minnesota Statutes 1996, section 462.391, is 
366.8   amended by adding a subdivision to read: 
366.9      Subd. 1a.  [REVIEW OF LOCAL PLANS.] The commission may 
366.10  review and provide comments and recommendations on local plans 
366.11  or development proposals which in the judgment of the commission 
366.12  have a substantial effect on regional development.  Local units 
366.13  of government may request that a regional commission review, 
366.14  comment, and provide advisory recommendations on local plans or 
366.15  development proposals. 
366.16     Sec. 14.  Minnesota Statutes 1996, section 462.391, is 
366.17  amended by adding a subdivision to read: 
366.18     Subd. 2a.  [STAFF SERVICES.] To avoid duplication of staff 
366.19  for various regional bodies assisted by federal or state 
366.20  government, the commission may provide basic administrative, 
366.21  research, and planning services for all regional planning and 
366.22  development bodies.  The commissions may contract to obtain or 
366.23  perform services with state agencies, for-profit or nonprofit 
366.24  entities, subdistricts organized as the result of federal or 
366.25  state programs, councils of governments organized under section 
366.26  471.59, or any other law, and with local governments. 
366.27     Sec. 15.  Minnesota Statutes 1996, section 462.391, is 
366.28  amended by adding a subdivision to read: 
366.29     Subd. 3a.  [DATA AND INFORMATION.] The commission may be 
366.30  designated as a regional data center providing data collection, 
366.31  storage, analysis, and dissemination to be used by it and other 
366.32  governmental and private users, and may accept gifts or grants 
366.33  to provide this service. 
366.34     Sec. 16.  Minnesota Statutes 1996, section 462.391, 
366.35  subdivision 5, is amended to read: 
366.36     Subd. 5.  [URBAN AND RURAL RESEARCH.] Where studies have 
367.1   not been otherwise authorized by law the commission may study 
367.2   the feasibility of programs relating including, but not limited 
367.3   to, water, land use, economic development, minority problems 
367.4   housing, demographics, cultural issues, governmental problems 
367.5   issues, human and services, natural resources, 
367.6   communication, technology, transportation, and other subjects of 
367.7   concern to the citizens of the region, may institute 
367.8   demonstration projects in connection therewith, and may enter 
367.9   into contracts or accept gifts or grants for such purposes as 
367.10  otherwise authorized in sections 462.381 to 462.398.  
367.11     Sec. 17.  Minnesota Statutes 1996, section 462.391, is 
367.12  amended by adding a subdivision to read: 
367.13     Subd. 11.  [PROGRAM OPERATION.] Upon approval of the 
367.14  appropriate authority from local, state, and federal government 
367.15  units, commissions may be regarded as general purpose units of 
367.16  government to receive funds and operate programs on a regional 
367.17  or subregional basis to provide economies of scale or to enhance 
367.18  program efficiency. 
367.19     Sec. 18.  Minnesota Statutes 1996, section 462.391, is 
367.20  amended by adding a subdivision to read: 
367.21     Subd. 12.  [PROPERTY OWNERSHIP.] A commission may buy, 
367.22  lease, acquire, own, hold, improve, and use real or personal 
367.23  property or an interest in property, wherever located in the 
367.24  state for purposes of housing the administrative office of the 
367.25  regional commission. 
367.26     Sec. 19.  Minnesota Statutes 1996, section 462.391, is 
367.27  amended by adding a subdivision to read: 
367.28     Subd. 13.  [PROPERTY DISPOSITION.] A commission may sell, 
367.29  convey, mortgage, create a security interest in, lease, 
367.30  exchange, transfer, or dispose of all or part of its real or 
367.31  personal property or an interest in property, wherever located 
367.32  in the state. 
367.33     Sec. 20.  Minnesota Statutes 1996, section 462.393, is 
367.34  amended to read: 
367.35     462.393 [ANNUAL REPORT TO UNITS, PUBLIC, GOVERNOR, 
367.36  LEGISLATURE.] 
368.1      Subdivision 1.  [CONTENTS.] On or before August September 1 
368.2   of each year, the commission shall prepare a report for the 
368.3   governmental units, the public within the region, the 
368.4   legislature and the governor.  The report shall include: 
368.5      (1) A statement of the commission's receipts and 
368.6   expenditures by category since the preceding report; 
368.7      (2) A detailed budget for the year in which the report is 
368.8   filed and a tentative budget for the following year including an 
368.9   outline of its program for such period; 
368.10     (3) A description of any comprehensive plan adopted in 
368.11  whole or in part for the region; 
368.12     (4) Summaries of any studies and the recommendations 
368.13  resulting therefrom made for the region; 
368.14     (5) A listing of all applications for federal grants or 
368.15  loans made by governmental units within the region together with 
368.16  the action taken by the commission in relation thereto summary 
368.17  of significant accomplishments; 
368.18     (6) A listing of plans of local governmental units 
368.19  submitted to the region, and actions taken in relationship 
368.20  thereto; 
368.21     (7) Recommendations of the commission regarding federal and 
368.22  state programs, cooperation, funding, and legislative needs; and 
368.23     (8) A summary of any audit report made during the previous 
368.24  year by the state auditor relative to the commission.  
368.25     Subd. 2.  [ASSESSMENT EVERY 5 YEARS.] In 1981 2001 and 
368.26  every five years thereafter the commission shall review its 
368.27  activities and issue a report assessing its performance in 
368.28  fulfilling the purposes of the regional development act of 
368.29  1969.  The report shall state address whether the existence of 
368.30  the commission is in the public welfare and interest.  The 
368.31  report shall be included in the report required by subdivision 1.
368.32     Sec. 21.  Minnesota Statutes 1996, section 462.394, is 
368.33  amended to read: 
368.34     462.394 [CITIZEN PARTICIPATION AND ADVISORY COMMITTEES.] 
368.35     The commission may appoint advisory committees of 
368.36  interested and affected citizens to assist in the review of 
369.1   plans, programs, and other matters referred for review by the 
369.2   commission.  Whenever a special advisory committee is required 
369.3   by any federal or state regional program the commission chair 
369.4   shall, as far as practical, appoint such committees as advisory 
369.5   groups to the commission.  Members of the advisory committees 
369.6   shall serve without compensation but shall be reimbursed for 
369.7   their reasonable expenses as determined by the commission.  
369.8      Sec. 22.  Minnesota Statutes 1996, section 462.396, is 
369.9   amended to read: 
369.10     462.396 [GRANTS; LEVIES; BUDGET; ACCOUNTS; AUDITS; BIDS; 
369.11  DEPOSITS FINANCIAL.] 
369.12     Subdivision 1.  [GRANTMAKING, TAX LEVY.] The director 
369.13  governor and the legislature shall determine the amount of state 
369.14  assistance and designate an agency to make grants to any 
369.15  commission created under sections 462.381 to 462.398 from 
369.16  appropriations made available for those purposes, provided a 
369.17  work program is submitted acceptable to the director.  Any 
369.18  regional commission may levy a tax on all taxable property in 
369.19  the region to provide money for the purposes of sections 462.381 
369.20  to 462.398. 
369.21     Subd. 2.  [BUDGET; HEARING; LEVY LIMITS.] On or before 
369.22  August 20 each year, the commission shall submit its proposed 
369.23  budget for the ensuing calendar year showing anticipated 
369.24  receipts, disbursements, and ad valorem tax levy with a written 
369.25  notice of the time and place of the public hearing on the 
369.26  proposed budget to each county auditor and municipal clerk 
369.27  within the region and those town clerks who in advance have 
369.28  requested a copy of the budget and notice of public hearing.  On 
369.29  or before September 15 each year, the commission shall adopt, 
369.30  after a public hearing held not later than September 15, a 
369.31  budget covering its anticipated receipts and disbursements for 
369.32  the ensuing year and shall decide upon the total amount 
369.33  necessary to be raised from ad valorem tax levies to meet its 
369.34  budget.  After adoption of the budget and no later than 
369.35  September 15, the secretary of the commission shall certify to 
369.36  the auditor of each county within the region the county share of 
370.1   the tax, which shall be an amount bearing the same proportion to 
370.2   the total levy agreed on by the commission as the net tax 
370.3   capacity of the county bears to the net tax capacity of the 
370.4   region.  For taxes levied in 1990 and thereafter 1997 and 
370.5   thereafter, the maximum amounts amount of levies levy made for 
370.6   the purposes of sections 462.381 to 462.398 are the following 
370.7   amounts, less the sum of regional planning grants from the 
370.8   commissioner to that region:  for Region 1, $180,337; for Region 
370.9   2, $150,000; for Region 3, $353,110; for Region 5, $195,865; for 
370.10  Region 6E, $197,177; for Region 6W, $150,000; for Region 7E, 
370.11  $158,653; for Region 8, $206,107; for Region 9, $343,572 is 103 
370.12  percent of the amount of the previous year's levy, except that 
370.13  for any year in which the legislature imposes a percentage 
370.14  increase limit on general purpose local government levies that 
370.15  is less than three percent, the same levy limit shall apply to 
370.16  each commission.  The auditor of each county in the region shall 
370.17  add the amount of any levy made by the commission within the 
370.18  limits imposed by this subdivision to other tax levies of the 
370.19  county for collection by the county treasurer with other taxes.  
370.20  When collected the county treasurer shall make settlement of the 
370.21  taxes with the commission in the same manner as other taxes are 
370.22  distributed to political subdivisions. 
370.23     Subd. 3.  [GIFTS, GRANTS, LOANS.] The commission is a 
370.24  special purpose unit of government which may accept gifts, apply 
370.25  for and use grants or loans of money or other property from the 
370.26  United States, the state, or any person, local or governmental 
370.27  body for any commission purpose and may enter into agreements 
370.28  required in connection therewith and may hold, use, and dispose 
370.29  of such moneys or property in accordance with the terms of the 
370.30  gift, grant, loan, agreement, or contract relating thereto.  
370.31     For purposes of receipt of state or federal funds for 
370.32  community and economic development, regional commissions shall 
370.33  be considered general purpose units of government. 
370.34     Subd. 4.  [ACCOUNTING; CHECKS; ANNUAL AUDIT.] The 
370.35  commission shall keep an accurate account of its receipts and 
370.36  disbursement.  Disbursements of funds of the commission shall be 
371.1   made by check signed by the chair or vice-chair or secretary of 
371.2   the commission and countersigned by the executive director or an 
371.3   authorized deputy thereof after such auditing and approval of 
371.4   the expenditure as may be provided by rules of the commission.  
371.5   The state auditor shall may audit the books and accounts of the 
371.6   commission once each year, or as often as funds and personnel of 
371.7   the state auditor permit.  The commission shall pay to the state 
371.8   the total cost and expenses of such examination, including the 
371.9   salaries paid to the auditors while actually engaged in making 
371.10  such examination.  The general fund shall be credited with all 
371.11  collections made for any such examination.  In lieu of an annual 
371.12  audit by the state auditor, the commission may shall contract 
371.13  with a certified public accountant for the annual audit of the 
371.14  books and accounts of the commission.  If a certified public 
371.15  accountant performs the audit, the commission shall send a copy 
371.16  of the audit to the state auditor. 
371.17     Subd. 5.  [BID LAW.] Every contract of the commission for 
371.18  the purchase of merchandise, materials, or supplies shall be let 
371.19  in accordance with the provisions of section 471.345.  
371.20     Subd. 6.  [DEPOSITORIES.] The commission shall from time to 
371.21  time designate one or more national or state banks, or trust 
371.22  companies authorized to do a banking business, as official 
371.23  depositories for money of the commission, and thereupon shall 
371.24  require the treasurer to deposit all or part of such money in 
371.25  such bank or banks.  Such designation shall be in writing and 
371.26  set forth all the terms and conditions upon which the deposits 
371.27  are made, and shall be signed by the chair and secretary, and 
371.28  made a part of the minutes of the commission.  Any bank or trust 
371.29  company so designated shall qualify as a depository by 
371.30  furnishing a corporate surety bond or collateral as required by 
371.31  chapter 118, and shall thereafter, as long as money of the 
371.32  commission is on deposit therein, maintain such bond or 
371.33  collateral and shall be required to secure any deposit, insofar 
371.34  as it is insured under federal law, as provided in section 
371.35  118A.03. 
371.36     Sec. 23.  Minnesota Statutes 1996, section 462.398, is 
372.1   amended to read: 
372.2      462.398 [TERMINATION OF COMMISSION.] 
372.3      Subdivision 1.  [PETITION; POPULATION.] Any combination of 
372.4   counties or municipalities representing a majority of the 
372.5   population of the region for which a commission exists may 
372.6   petition the director by formal resolution stating that the 
372.7   existence of the commission is no longer in the public welfare 
372.8   and interest and is not needed to accomplish the purposes of the 
372.9   regional development act of 1969.  For purposes of this section 
372.10  the population of a county does not include the population of a 
372.11  municipality within the county.  Any formal resolution adopted 
372.12  by the governing body of a county or municipality for the 
372.13  termination of a commission shall be effective for a period of 
372.14  one year for the purpose of determining the requisite population 
372.15  of the region needed to petition the director governor. 
372.16     Subd. 2.  [HEARINGS; RECOMMENDATION, TERMINATION DATE.] 
372.17  Within 35 days of the receipt filing of the petition, the 
372.18  director governor or designee shall fix a time and place within 
372.19  the region for a hearing.  The director shall give notice of the 
372.20  hearing by publication once each week for two successive weeks 
372.21  before the date of the hearing in a legal newspaper in each of 
372.22  the counties which the commission represents.  The hearing shall 
372.23  be conducted by members of the commission.  If the commission 
372.24  determines that the existence of the commission is no longer in 
372.25  the public welfare and interest and that it is not needed to 
372.26  accomplish the purposes of the regional development act of 1969, 
372.27  the commission shall recommend to the director governor or 
372.28  designee that the director governor or designee terminate the 
372.29  commission.  Within 60 days after receipt of the recommendation, 
372.30  the director shall terminate the commission by giving notice of 
372.31  the termination to all government units within the region for 
372.32  which the commission was established.  Unless otherwise provided 
372.33  by this subdivision, the hearing shall be in accordance with 
372.34  sections 14.001 to 14.69. 
372.35     Subd. 3.  [30 MONTHS BETWEEN PETITIONS.] The 
372.36  director governor or designee shall not accept a petition for 
373.1   termination more than once in 30 months for each regional 
373.2   development commission. 
373.3      Sec. 24.  [REPEALER.] 
373.4      Minnesota Statutes 1996, sections 462.384, subdivision 7; 
373.5   462.385, subdivision 2; 462.389, subdivision 5; 462.391, 
373.6   subdivisions 1, 2, 3, 4, 6, 7, 8, and 9; and 462.392, are 
373.7   repealed. 
373.8                              ARTICLE 17
373.9                      SCORE AND THE SOLID WASTE
373.10                        GENERATOR ASSESSMENT
373.11     Section 1.  Minnesota Statutes 1996, section 116.07, 
373.12  subdivision 10, is amended to read: 
373.13     Subd. 10.  [SOLID WASTE GENERATOR ASSESSMENTS.] (a) For the 
373.14  purposes of this subdivision: 
373.15     (1) "assessed waste" means mixed municipal solid waste as 
373.16  defined in section 115A.03, subdivision 21, infectious waste as 
373.17  defined in section 116.76, subdivision 12, pathological waste as 
373.18  defined in section 116.76, subdivision 14, industrial waste as 
373.19  defined in section 115A.03, subdivision 13a, and construction 
373.20  debris as defined in section 115A.03, subdivision 7; provided 
373.21  that all types of assessed waste listed in this clause do not 
373.22  include: 
373.23     (i) materials that are separated for recycling by the 
373.24  generator and that are collected separately from other waste and 
373.25  delivered to a waste facility for the purpose of recycling and 
373.26  recycled; 
373.27     (ii) materials that are separated for recycling by the 
373.28  generator, collected and delivered to a waste facility that 
373.29  recycles at least 85 percent of its waste, and are collected 
373.30  with mixed municipal solid waste that is segregated in leakproof 
373.31  bags, provided that the mixed municipal solid waste does not 
373.32  exceed five percent of the total weight of the materials 
373.33  delivered to the facility and is ultimately delivered to a 
373.34  facility designated under sections 115A.80 to 115A.893; and 
373.35     (iii) waste generated outside of Minnesota; 
373.36     (2) "noncompacted cubic yard" means a loose cubic yard of 
374.1   assessed waste; 
374.2      (3) "nonresidential customer" means: 
374.3      (i) an owner or operator of a business, including a home 
374.4   operated business, industry, church, nursing home, nonprofit 
374.5   organization, school, or any other commercial or institutional 
374.6   enterprise; 
374.7      (ii) an owner of a building or site containing multiple 
374.8   residences, including a townhome or manufactured home park, 
374.9   where no resident has separate trash pickup, and no resident is 
374.10  separately assessed for such service billed by the person that 
374.11  collects assessed waste; and 
374.12     (iii) any other generator of assessed waste that is not a 
374.13  residential customer as defined in clause (6); 
374.14     (4) "periodic waste collection" means each time a waste 
374.15  container is emptied by the person that collects the assessed 
374.16  waste; 
374.17     (5) "person that collects assessed waste" means each person 
374.18  that is required to pay sales tax on solid waste collection 
374.19  services under section 297A.45, or would pay sales tax under 
374.20  that section if the assessed waste was mixed municipal solid 
374.21  waste; and 
374.22     (6) "residential customer" means: 
374.23     (i) a detached single family residence that generates only 
374.24  household mixed municipal solid waste; and 
374.25     (ii) a person residing in a building or at a site 
374.26  containing multiple residences, including a townhome or a 
374.27  manufactured home park, where each resident either (A) is 
374.28  separately assessed for waste collection billed by the person 
374.29  that collects assessed waste; or (B) has separate waste 
374.30  collection for each resident, even if the resident pays to the 
374.31  owner or an association a monthly maintenance fee which includes 
374.32  the expense of waste collection, and the owner or association 
374.33  pays the waste collector for waste collection in one lump sum; 
374.34  or (C) in the case of a manufactured home park provides separate 
374.35  waste collection for each resident. 
374.36     (b) A residential customer and a nonresidential customer 
375.1   shall pay the solid waste generator assessment imposed under 
375.2   this subdivision to the person that collects the assessed waste 
375.3   from the customer. 
375.4      (c) A person that collects assessed waste shall collect and 
375.5   remit to the commissioner of revenue a solid waste generator 
375.6   assessment from each of the person's customers as provided in 
375.7   paragraphs (c) and (d) and (e).  A waste management facility 
375.8   that accepts assessed waste shall collect and remit to the 
375.9   commissioner of revenue the solid waste assessment as provided 
375.10  in paragraph (e) (f). 
375.11     (c) (d) Except as provided in paragraph (f) (g), the amount 
375.12  of the assessment for each residential customer is $2 per year.  
375.13  Each person that collects assessed waste shall collect the 
375.14  assessment annually from each residential customer that is 
375.15  receiving mixed municipal solid waste collection service on July 
375.16  1 of each year and shall remit the amount actually collected 
375.17  along with the person's first remittance of the sales tax on 
375.18  solid waste collection services, described in section 297A.45, 
375.19  made after October 1 of each year.  For buildings or sites that 
375.20  contain multiple residences that are not separately billed for 
375.21  collection services, the person who that collects assessed waste 
375.22  shall collect the assessment for all the residences from the 
375.23  person who is billed for the collection service.  Any amount of 
375.24  the assessment that is received by the person that collects 
375.25  assessed waste after October 1 of each year must be remitted 
375.26  along with the person's next remittance of sales tax after 
375.27  receipt of the assessment. 
375.28     (d) (e)(1) Except as provided in clause (2), the amount of 
375.29  the assessment for each nonresidential customer is 60 cents per 
375.30  noncompacted cubic yard of periodic waste collection capacity 
375.31  purchased by the customer, based on the size of the container 
375.32  for the assessed waste.  For a residential customer that 
375.33  generates assessed waste that is not mixed municipal solid 
375.34  waste, the amount of the assessment is 60 cents per noncompacted 
375.35  cubic yard of collection capacity purchased for the waste that 
375.36  is not mixed municipal solid waste, based on the size of the 
376.1   container for the waste.  If the capacity purchased is for 
376.2   compacted cubic yards of mixed municipal solid waste, the 
376.3   noncompacted capacity purchased is based on the compaction ratio 
376.4   of 3:1.  The commissioner of revenue, after consultation with 
376.5   the commissioner of the pollution control agency, shall 
376.6   determine, and may publish by notice, compaction rates for other 
376.7   types of waste where they exist and conversion schedules for 
376.8   waste that is managed by measurements other than cubic yards.  
376.9   Each person that collects assessed waste shall collect the 
376.10  assessment from each nonresidential customer as part of each 
376.11  statement for payment of waste collection charges and shall 
376.12  remit the amount actually collected along with the next 
376.13  remittance of sales tax after receipt of the assessment. 
376.14     (2) The assessment for nonresidential customers for the 
376.15  mixed municipal solid waste that is collected with 
376.16  source-separated recyclable materials as described in paragraph 
376.17  (a), clause (1), item (ii), is three-tenths of a cent per 
376.18  gallon.  The customer must pay by purchasing specific collection 
376.19  bags or stickers that include the cost of the collection service 
376.20  and assessment. 
376.21     (e) (f) A person who that transports assessed waste 
376.22  generated by that person or by another person without 
376.23  compensation shall pay an assessment of 60 cents per 
376.24  noncompacted cubic yard or the equivalent to the operator of the 
376.25  waste management facility to which the waste is delivered.  The 
376.26  operator shall remit the assessments actually collected under 
376.27  this paragraph to the commissioner of revenue.  This subdivision 
376.28  does not apply to a person who transports industrial waste 
376.29  generated by that person to a facility owned and operated by 
376.30  that person. 
376.31     (f) (g) The amount of the assessment for each residential 
376.32  customer that is subject to a mixed municipal solid waste 
376.33  collection service for which the customer pays, based on the 
376.34  volume of waste collected, by purchasing specific collection 
376.35  bags or stickers from the waste collector, municipality, or 
376.36  other vendor is either: 
377.1      (1) determined by a method developed by the waste collector 
377.2   or municipality and approved by the commissioner of revenue, 
377.3   which yields the equivalent of approximately a $2 annual 
377.4   assessment per household; or 
377.5      (2) three cents per each 35 gallon unit or less.  If the 
377.6   per unit fee method under this clause is used, it is the 
377.7   responsibility of the waste collector or the municipality who is 
377.8   selling the bags or stickers to remit the amount of the 
377.9   assessment to the department of revenue, according to a payment 
377.10  schedule provided by the commissioner of revenue.  The 
377.11  collection service and assessment under this clause shall be 
377.12  included in the price of the bag or sticker.  
377.13     (g) (h) The commissioner of revenue shall redesign sales 
377.14  tax forms for persons that collect assessed waste to accommodate 
377.15  payment of the assessment.  The amounts remitted under this 
377.16  subdivision must be deposited in the state treasury and credited 
377.17  to the solid waste fund established in section 115B.42. 
377.18     (h) (i) For persons that collect assessed waste and 
377.19  operators of waste management facilities who are required to 
377.20  collect the solid waste generator assessments under this 
377.21  subdivision, and persons who are required to remit the 
377.22  assessment under paragraph (f) (g), and who do not collect and 
377.23  remit the sales tax on solid waste collection services under 
377.24  section 297A.45, the commissioner of revenue shall determine 
377.25  when and in what manner the persons and operators must remit the 
377.26  assessment amounts actually collected. 
377.27     (i) (j) For the purposes of this subdivision, the 
377.28  requirement to "collect" the solid waste generator assessment 
377.29  under paragraph (b) (c) means that the person to whom the 
377.30  requirement applies shall: 
377.31     (i) include (1) separately and accurately state the amount 
377.32  of the assessment in the appropriate statement of charges for 
377.33  waste collection and waste management services and in any action 
377.34  to enforce payment on delinquent accounts; 
377.35     (ii) (2) accurately account for and remit assessments 
377.36  received; 
378.1      (iii) (3) indicate to generators that payment of the 
378.2   assessment by the waste generator is required by law and inform 
378.3   generators, using information supplied by the commissioner of 
378.4   the agency, of the purposes for which revenue from the 
378.5   assessment will be spent; and 
378.6      (iv) (4) cooperate fully with the commissioner of revenue 
378.7   to identify generators of assessed waste who fail to remit 
378.8   payment of the assessment. 
378.9      (j) (k) The audit, assessment, penalty, interest, 
378.10  enforcement, collection remedies, appeal rights, and 
378.11  administrative provisions applicable to taxes imposed under 
378.12  chapter 297A apply to the assessments imposed under this 
378.13  subdivision required to be paid under paragraphs (b) and (f). 
378.14     (l) A person that collects assessed waste and fails to 
378.15  comply with the provisions of paragraph (c), is liable for an 
378.16  amount equal to the solid waste generator assessment that was 
378.17  either: 
378.18     (1) received by the person but not timely remitted to the 
378.19  commissioner of revenue; or 
378.20     (2) not received by the person and the person failed to 
378.21  separately and accurately state the amount of the assessment in 
378.22  the appropriate statement of charges for waste collection and 
378.23  waste management services and in any action to enforce payment 
378.24  on delinquent accounts.  The audit, assessment, penalty, 
378.25  interest, enforcement, collection remedies, appeal rights, and 
378.26  administrative provisions applicable to taxes imposed under 
378.27  chapter 297A apply to the liability imposed under this 
378.28  paragraph.  A person who is liable under this paragraph is not 
378.29  prohibited from recovering from that person's customer the 
378.30  amount of the liability paid to the commissioner of revenue that 
378.31  is equal to the solid waste generator assessment owed by the 
378.32  customer. 
378.33     (k) (m) If less than $25,000,000 is projected to be 
378.34  available for new encumbrances in any fiscal year after fiscal 
378.35  year 1996 from all existing dedicated revenue sources for 
378.36  landfill cleanup and reimbursement costs under sections 115B.39 
379.1   to 115B.46, by April 1 before the next fiscal year in which the 
379.2   shortfall is projected the commissioner of the agency shall 
379.3   certify to the commissioner of revenue the amount of the 
379.4   shortfall.  To provide for the shortfall, the commissioner of 
379.5   revenue shall increase the assessment under paragraphs (d) 
379.6   and (e) and (f) by an amount sufficient to generate revenue 
379.7   equal to the amount of the shortfall effective the following 
379.8   July 1 and shall provide notice of the increased assessment by 
379.9   May 1 following certification to persons who are required to 
379.10  collect and remit the solid waste generator assessments under 
379.11  this subdivision. 
379.12     Sec. 2.  Minnesota Statutes 1996, section 297A.45, is 
379.13  amended to read: 
379.14     297A.45 [MIXED MUNICIPAL SOLID WASTE MANAGEMENT SERVICES.] 
379.15     Subdivision 1.  [DEFINITIONS.] The definitions in sections 
379.16  115A.03 and 297A.01 apply to this section. (a) When used in this 
379.17  section, the following terms shall have the meanings given to 
379.18  them in this subdivision, unless specifically stated otherwise.  
379.19  For terms not defined in this section, the definitions contained 
379.20  in chapter 115A.03 are incorporated into this chapter.  
379.21     (b) "Mixed municipal solid waste" means mixed municipal 
379.22  solid waste as defined in section 115A.03, subdivision 21. 
379.23     (c) "Mixed municipal solid waste management services" means 
379.24  collection, including a central canister system, transportation, 
379.25  processing, and disposal of mixed municipal solid waste. 
379.26     (d) "Waste management service provider" means the person 
379.27  that bills for mixed municipal solid waste management service; 
379.28  or if the service is not billed, the person who provides the 
379.29  waste management service, or that person's lawful designee, and 
379.30  includes, but is not limited to, waste haulers, waste management 
379.31  facilities, utility services, and political subdivisions. 
379.32     (e) "Sales price" means total consideration valued in money 
379.33  for mixed municipal solid waste management services, excluding 
379.34  separately stated charges for exemptions listed under 
379.35  subdivision 3. 
379.36     (f) "Self-hauler" means a person that transports mixed 
380.1   municipal solid waste generated by that person or by another 
380.2   person without compensation. 
380.3      Subd. 2.  [APPLICATION.] The tax imposed by section 297A.02 
380.4   applies to all public and private mixed municipal solid waste 
380.5   management services.  
380.6      Notwithstanding section 297A.25, subdivision 11, a 
380.7   political subdivision that purchases waste management services 
380.8   on behalf of its citizens shall pay the taxes. 
380.9      If a political subdivision provides a waste management 
380.10  service to its residents at a cost in excess of the total direct 
380.11  charge to the residents for the service, the political 
380.12  subdivision shall pay the taxes based on its cost of providing 
380.13  the service in excess of the direct charges.  
380.14     A person who transports mixed municipal solid waste 
380.15  generated by that person or by another person without 
380.16  compensation shall pay the taxes at the waste facility based on 
380.17  the disposal charge or tipping fee. 
380.18     A person who segregates mixed municipal waste from 
380.19  recyclable materials as described in subdivision 3, paragraph 
380.20  (a), clause (2), shall pay the taxes by purchasing specific 
380.21  collection bags or stickers.  The collection service and taxes 
380.22  must be included in the price of the bag or sticker.  (a) The 
380.23  tax imposed by this section applies to all public and private 
380.24  mixed municipal solid waste management services.  
380.25     (b) The tax, based on market price, is imposed upon the 
380.26  political subdivision in those cases where the waste management 
380.27  service provider provides waste management services (1) without 
380.28  charge, (2) with a service charge or fee under section 400.08, 
380.29  (3) billed on the property tax statement, or (4) any combination 
380.30  of clauses (1) to (3).  The commissioners of revenue and the 
380.31  pollution control agency shall determine market price.  In 
380.32  establishing market price, the commissioner of the pollution 
380.33  control agency may consult with the director of the office of 
380.34  environmental assistance.  
380.35     (c) A self-hauler of mixed municipal solid waste shall pay 
380.36  the tax to the operator of the waste management facility to 
381.1   which the waste is delivered, at the rate imposed under 
381.2   subdivision 5. 
381.3      Subd. 3.  [EXEMPTIONS.] (a) The cost of a service or the 
381.4   portion of a service to collect and manage recyclable materials 
381.5   is exempt from the tax imposed in section 297A.02 Charges to 
381.6   collect and manage recyclable materials are exempt if: 
381.7      (1) the recyclable materials are separated from mixed 
381.8   municipal solid waste by the waste generator, collected 
381.9   separately from other waste, and recycled; or 
381.10     (2) the recyclable materials are separated from mixed 
381.11  municipal solid waste by the generator, collected and delivered 
381.12  to a waste facility that recycles at least 85 percent of its 
381.13  waste, and are collected with mixed municipal solid waste that 
381.14  is segregated in leakproof bags, provided that the mixed 
381.15  municipal solid waste does not exceed five percent of the total 
381.16  weight of the materials delivered to the facility and is 
381.17  ultimately delivered to a facility designated under sections 
381.18  115A.80 to 115A.893.  
381.19     (b) The amount of a surcharge or fee imposed under section 
381.20  115A.919, 115A.921, 115A.923, or 473.843 is exempt from the tax 
381.21  imposed in section 297A.02. 
381.22     (c) Waste from a recycling facility that separates or 
381.23  processes recyclable materials and that reduces the volume of 
381.24  the waste by at least 85 percent is exempt from the tax imposed 
381.25  in section 297A.02.  To qualify for the exemption under this 
381.26  paragraph, the waste exempted must be managed separately from 
381.27  other solid waste. 
381.28     (d) The following costs are exempt from the tax imposed in 
381.29  section 297A.02: 
381.30     (1) costs of providing educational materials and other 
381.31  information to residents; 
381.32     (2) costs of managing solid waste other than mixed 
381.33  municipal solid waste, including household hazardous waste; and 
381.34     (3) costs of court litigation and associated damages. 
381.35     (e) The cost of a waste management service is exempt from 
381.36  the tax imposed in section 297A.02 to the extent that the cost 
382.1   was previously subject to the tax. 
382.2      (f) Through December 31, 2002, the gross receipts from the 
382.3   sales of source-separated compostable waste management services 
382.4   are exempt from the tax imposed in section 297A.02 if the waste 
382.5   is delivered to a facility exempted as described in this 
382.6   paragraph.  To initially qualify for an exemption, a facility 
382.7   must apply for an exemption in its application for a new or 
382.8   amended solid waste permit to the pollution control agency.  The 
382.9   first time a facility applies to the agency, it must certify in 
382.10  its application that it will comply with the criteria in clauses 
382.11  (1) to (5), and the commissioner of the agency shall so certify 
382.12  to the commissioner of revenue who must grant the exemption.  
382.13  For each subsequent calendar year, by October 1 of the preceding 
382.14  year, the facility must apply to the agency for certification to 
382.15  renew its exemption for the following year.  The application 
382.16  must be filed according to the procedures and contain the 
382.17  information required by the agency.  The commissioner of revenue 
382.18  shall grant the exemption if the commissioner of the agency 
382.19  finds and certifies to the commissioner of revenue that based on 
382.20  an evaluation of the composition of incoming waste and residuals 
382.21  and the quality and use of the product: 
382.22     (1) generators separate materials at the source; 
382.23     (2) the separation is performed in a manner appropriate to 
382.24  the technology specific to the facility that: 
382.25     (i) maximizes the quality of the product; 
382.26     (ii) minimizes the toxicity and quantity of residuals; and 
382.27     (iii) provides an opportunity for significant improvement 
382.28  in the environmental efficiency of the operation; 
382.29     (3) the operator of the facility educates generators, in 
382.30  coordination with each county using the facility, about 
382.31  separating the waste to maximize the quality of the waste stream 
382.32  for the technology specific to the facility; 
382.33     (4) process residuals do not exceed 15 percent of the 
382.34  weight of the total material delivered to the facility; and 
382.35     (5) the final product is accepted for use. 
382.36     Subd. 4.  [CITY LOCAL SALES TAX MAY NOT BE IMPOSED.] 
383.1   Notwithstanding any other law or charter provision to the 
383.2   contrary, a home rule charter or statutory city political 
383.3   subdivision that imposes a general sales tax may shall not 
383.4   impose the sales tax on solid waste management services that are 
383.5   subject to the tax under this section.  
383.6      Subd. 5.  [RATE.] Except as provided in subdivision 2, 
383.7   paragraph (b), the tax imposed by section 297A.02 applies to the 
383.8   sales price of waste management services billed by a waste 
383.9   management service provider.  
383.10     Subd. 6.  [SEPARATE ACCOUNTING SALES PRICE OF BAGS, 
383.11  STICKERS, OR OTHER INDICIA.] The commissioner shall account for 
383.12  revenue collected from public and private mixed municipal solid 
383.13  waste management services under this section separately from 
383.14  other tax revenue collected under this chapter. (a) When the 
383.15  sales price of a bag, sticker, or other indicia includes mixed 
383.16  municipal solid waste management services, the tax on the bag, 
383.17  sticker, and other indicia, sold by vendors on behalf of a 
383.18  political subdivision or waste hauler, shall be collected when 
383.19  the bag, sticker, or other indicia are sold to the vendor by the 
383.20  political subdivision or waste hauler, and shall be taxed at the 
383.21  rate imposed under subdivision 5. 
383.22     (b) The solid waste management services and tax under this 
383.23  section shall be included in the price of the bag, sticker, or 
383.24  other indicia. 
383.25     Subd. 7.  [BILLING.] The amount of the tax imposed under 
383.26  this section shall be itemized separately on the generator's 
383.27  bill.  
383.28     Subd. 8.  [PENALTY.] A penalty is imposed on any person or 
383.29  political subdivision that fails to separately report the amount 
383.30  of tax due under this chapter.  The specified penalties are ten 
383.31  percent 
383.32     Subd. 9.  [SEPARATE ACCOUNTING.] The commissioner shall 
383.33  account for revenue collected from public and private mixed 
383.34  municipal solid waste management services under this section 
383.35  separately from other tax revenue collected under this chapter.  
383.36     Sec. 3.  [MORATORIUM.] 
384.1      The commissioner of revenue shall not initiate or continue 
384.2   any action to collect any underpayment from political 
384.3   subdivisions, or to reimburse any overpayment to any political 
384.4   subdivisions, of use taxes on solid waste management services 
384.5   under Minnesota Statutes, section 297A.45, for the period from 
384.6   January 1, 1990, through December 31, 1996. 
384.7      Sec. 4.  [REPEALER.] 
384.8      Minnesota Statutes 1996, section 297A.01, subdivision 21, 
384.9   is repealed. 
384.10     Sec. 5.  [EFFECTIVE DATE.] 
384.11     Section 1 is effective for services provided after December 
384.12  31, 1996. 
384.13     Sections 2 and 4 are effective for services provided 
384.14  beginning October 1, 1997. 
384.15                             ARTICLE 18
384.16               SENIOR CITIZENS PROPERTY TAX DEFERRAL
384.17     Section 1.  Minnesota Statutes 1996, section 270B.12, is 
384.18  amended by adding a subdivision to read: 
384.19     Subd. 12.  [PROPERTY TAX DEFERRAL.] The commissioner may 
384.20  disclose to a county auditor and treasurer, and to their 
384.21  designated agents or employees, the annual deferral amounts and 
384.22  the cumulative deferral and interest as determined by the 
384.23  commissioner under chapter 290B for each parcel of homestead 
384.24  property in the county that is enrolled in the senior citizen 
384.25  property tax deferral program under chapter 290B. 
384.26     Sec. 2.  Minnesota Statutes 1996, section 275.065, 
384.27  subdivision 3, is amended to read: 
384.28     Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
384.29  county auditor shall prepare and the county treasurer shall 
384.30  deliver after November 10 and on or before November 24 each 
384.31  year, by first class mail to each taxpayer at the address listed 
384.32  on the county's current year's assessment roll, a notice of 
384.33  proposed property taxes and, in the case of a town, final 
384.34  property taxes.  
384.35     (b) The commissioner of revenue shall prescribe the form of 
384.36  the notice. 
385.1      (c) The notice must inform taxpayers that it contains the 
385.2   amount of property taxes each taxing authority other than a town 
385.3   proposes to collect for taxes payable the following year and, 
385.4   for a town, the amount of its final levy.  It must clearly state 
385.5   that each taxing authority, including regional library districts 
385.6   established under section 134.201, and including the 
385.7   metropolitan taxing districts as defined in paragraph (i), but 
385.8   excluding all other special taxing districts and towns, will 
385.9   hold a public meeting to receive public testimony on the 
385.10  proposed budget and proposed or final property tax levy, or, in 
385.11  case of a school district, on the current budget and proposed 
385.12  property tax levy.  It must clearly state the time and place of 
385.13  each taxing authority's meeting and an address where comments 
385.14  will be received by mail.  
385.15     (d) The notice must state for each parcel: 
385.16     (1) the market value of the property as determined under 
385.17  section 273.11, and used for computing property taxes payable in 
385.18  the following year and for taxes payable in the current year; 
385.19  and, in the case of residential property, whether the property 
385.20  is classified as homestead or nonhomestead.  The notice must 
385.21  clearly inform taxpayers of the years to which the market values 
385.22  apply and that the values are final values; 
385.23     (2) by county, city or town, school district excess 
385.24  referenda levy, remaining school district levy, regional library 
385.25  district, if in existence, the total of the metropolitan special 
385.26  taxing districts as defined in paragraph (i) and the sum of the 
385.27  remaining special taxing districts, and as a total of the taxing 
385.28  authorities, including all special taxing districts, the 
385.29  proposed or, for a town, final net tax on the property for taxes 
385.30  payable the following year and the actual tax for taxes payable 
385.31  the current year.  If a school district has certified under 
385.32  section 124A.03, subdivision 2, that a referendum will be held 
385.33  in the school district at the November general election, the 
385.34  county auditor must note next to the school district's proposed 
385.35  amount that a referendum is pending and that, if approved by the 
385.36  voters, the tax amount may be higher than shown on the notice.  
386.1   For the purposes of this subdivision, "school district excess 
386.2   referenda levy" means school district taxes for operating 
386.3   purposes approved at referendums, including those taxes based on 
386.4   net tax capacity as well as those based on market value.  
386.5   "School district excess referenda levy" does not include school 
386.6   district taxes for capital expenditures approved at referendums 
386.7   or school district taxes to pay for the debt service on bonds 
386.8   approved at referenda.  In the case of the city of Minneapolis, 
386.9   the levy for the Minneapolis library board and the levy for 
386.10  Minneapolis park and recreation shall be listed separately from 
386.11  the remaining amount of the city's levy.  In the case of a 
386.12  parcel where tax increment or the fiscal disparities areawide 
386.13  tax under chapter 276A or 473F applies, the proposed tax levy on 
386.14  the captured value or the proposed tax levy on the tax capacity 
386.15  subject to the areawide tax must each be stated separately and 
386.16  not included in the sum of the special taxing districts; and 
386.17     (3) the increase or decrease in the amounts in clause (2) 
386.18  from taxes payable in the current year to proposed or, for a 
386.19  town, final taxes payable the following year, expressed as a 
386.20  dollar amount and as a percentage. 
386.21     For purposes of this section, the amount of the tax on 
386.22  homesteads qualifying under the senior citizens' property tax 
386.23  deferral program under chapter 290B is the total amount of 
386.24  property tax before subtraction of the deferred property tax 
386.25  amount. 
386.26     (e) The notice must clearly state that the proposed or 
386.27  final taxes do not include the following: 
386.28     (1) special assessments; 
386.29     (2) levies approved by the voters after the date the 
386.30  proposed taxes are certified, including bond referenda, school 
386.31  district levy referenda, and levy limit increase referenda; 
386.32     (3) amounts necessary to pay cleanup or other costs due to 
386.33  a natural disaster occurring after the date the proposed taxes 
386.34  are certified; 
386.35     (4) amounts necessary to pay tort judgments against the 
386.36  taxing authority that become final after the date the proposed 
387.1   taxes are certified; and 
387.2      (5) the contamination tax imposed on properties which 
387.3   received market value reductions for contamination. 
387.4      (f) Except as provided in subdivision 7, failure of the 
387.5   county auditor to prepare or the county treasurer to deliver the 
387.6   notice as required in this section does not invalidate the 
387.7   proposed or final tax levy or the taxes payable pursuant to the 
387.8   tax levy. 
387.9      (g) If the notice the taxpayer receives under this section 
387.10  lists the property as nonhomestead and the homeowner provides 
387.11  satisfactory documentation to the county assessor that the 
387.12  property is owned and used as the owner's homestead, the 
387.13  assessor shall reclassify the property to homestead for taxes 
387.14  payable in the following year. 
387.15     (h) In the case of class 4 residential property used as a 
387.16  residence for lease or rental periods of 30 days or more, the 
387.17  taxpayer must either: 
387.18     (1) mail or deliver a copy of the notice of proposed 
387.19  property taxes to each tenant, renter, or lessee; or 
387.20     (2) post a copy of the notice in a conspicuous place on the 
387.21  premises of the property.  
387.22     The notice must be mailed or posted by the taxpayer by 
387.23  November 27 or within three days of receipt of the notice, 
387.24  whichever is later.  A taxpayer may notify the county treasurer 
387.25  of the address of the taxpayer, agent, caretaker, or manager of 
387.26  the premises to which the notice must be mailed in order to 
387.27  fulfill the requirements of this paragraph. 
387.28     (i) For purposes of this subdivision, subdivisions 5a and 
387.29  6, "metropolitan special taxing districts" means the following 
387.30  taxing districts in the seven-county metropolitan area that levy 
387.31  a property tax for any of the specified purposes listed below: 
387.32     (1) metropolitan council under section 473.132, 473.167, 
387.33  473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 
387.34     (2) metropolitan airports commission under section 473.667, 
387.35  473.671, or 473.672; and 
387.36     (3) metropolitan mosquito control commission under section 
388.1   473.711. 
388.2      For purposes of this section, any levies made by the 
388.3   regional rail authorities in the county of Anoka, Carver, 
388.4   Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
388.5   398A shall be included with the appropriate county's levy and 
388.6   shall be discussed at that county's public hearing. 
388.7      (j) For taxes levied in 1996, payable in 1997 only, in the 
388.8   case of a statutory or home rule charter city or town that 
388.9   exercises the local levy option provided in section 473.388, 
388.10  subdivision 7, the notice of its proposed taxes may include a 
388.11  statement of the amount by which its proposed tax increase for 
388.12  taxes payable in 1997 is attributable to its exercise of that 
388.13  option, together with a statement that the levy of the 
388.14  metropolitan council was decreased by a similar amount because 
388.15  of the exercise of that option. 
388.16     Sec. 3.  Minnesota Statutes 1996, section 276.04, 
388.17  subdivision 2, is amended to read: 
388.18     Subd. 2.  [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 
388.19  shall provide for the printing of the tax statements.  The 
388.20  commissioner of revenue shall prescribe the form of the property 
388.21  tax statement and its contents.  The statement must contain a 
388.22  tabulated statement of the dollar amount due to each taxing 
388.23  authority from the parcel of real property for which a 
388.24  particular tax statement is prepared.  The dollar amounts due 
388.25  the county, township or municipality, the total of the 
388.26  metropolitan special taxing districts as defined in section 
388.27  275.065, subdivision 3, paragraph (i), school district excess 
388.28  referenda levy, remaining school district levy, and the total of 
388.29  other voter approved referenda levies based on market value 
388.30  under section 275.61 must be separately stated.  The amounts due 
388.31  all other special taxing districts, if any, may be aggregated.  
388.32  The amount of the tax on homesteads qualifying under the senior 
388.33  citizens' property tax deferral program under chapter 290B is 
388.34  the total amount of property tax before subtraction of the 
388.35  deferred property tax amount.  For the purposes of this 
388.36  subdivision, "school district excess referenda levy" means 
389.1   school district taxes for operating purposes approved at 
389.2   referenda, including those taxes based on net tax capacity as 
389.3   well as those based on market value.  "School district excess 
389.4   referenda levy" does not include school district taxes for 
389.5   capital expenditures approved at referendums or school district 
389.6   taxes to pay for the debt service on bonds approved at 
389.7   referenda.  The amount of the tax on contamination value imposed 
389.8   under sections 270.91 to 270.98, if any, must also be separately 
389.9   stated.  The dollar amounts, including the dollar amount of any 
389.10  special assessments, may be rounded to the nearest even whole 
389.11  dollar.  For purposes of this section whole odd-numbered dollars 
389.12  may be adjusted to the next higher even-numbered dollar.  The 
389.13  amount of market value excluded under section 273.11, 
389.14  subdivision 16, if any, must also be listed on the tax 
389.15  statement.  The statement shall include the following sentence, 
389.16  printed in upper case letters in boldface print:  "THE STATE OF 
389.17  MINNESOTA DOES NOT RECEIVE ANY PROPERTY TAX REVENUES.  THE STATE 
389.18  OF MINNESOTA REDUCES YOUR PROPERTY TAX BY PAYING CREDITS AND 
389.19  REIMBURSEMENTS TO LOCAL UNITS OF GOVERNMENT."  
389.20     (b) The property tax statements for manufactured homes and 
389.21  sectional structures taxed as personal property shall contain 
389.22  the same information that is required on the tax statements for 
389.23  real property.  
389.24     (c) Real and personal property tax statements must contain 
389.25  the following information in the order given in this paragraph.  
389.26  The information must contain the current year tax information in 
389.27  the right column with the corresponding information for the 
389.28  previous year in a column on the left: 
389.29     (1) the property's estimated market value under section 
389.30  273.11, subdivision 1; 
389.31     (2) the property's taxable market value after reductions 
389.32  under section 273.11, subdivisions 1a and 16; 
389.33     (3) the property's gross tax, calculated by multiplying the 
389.34  property's gross tax capacity times the total local tax rate and 
389.35  adding to the result the sum of the aids enumerated in clause 
389.36  (4); 
390.1      (4) a total of the following aids: 
390.2      (i) education aids payable under chapters 124 and 124A; 
390.3      (ii) local government aids for cities, towns, and counties 
390.4   under chapter 477A; and 
390.5      (iii) disparity reduction aid under section 273.1398; 
390.6      (5) for homestead residential and agricultural properties, 
390.7   the homestead and agricultural credit aid apportioned to the 
390.8   property.  This amount is obtained by multiplying the total 
390.9   local tax rate by the difference between the property's gross 
390.10  and net tax capacities under section 273.13.  This amount must 
390.11  be separately stated and identified as "homestead and 
390.12  agricultural credit."  For purposes of comparison with the 
390.13  previous year's amount for the statement for taxes payable in 
390.14  1990, the statement must show the homestead credit for taxes 
390.15  payable in 1989 under section 273.13, and the agricultural 
390.16  credit under section 273.132 for taxes payable in 1989; 
390.17     (6) any credits received under sections 273.119; 273.123; 
390.18  273.135; 273.1391; 273.1398, subdivision 4; 469.171; and 
390.19  473H.10, except that the amount of credit received under section 
390.20  273.135 must be separately stated and identified as "taconite 
390.21  tax relief"; and 
390.22     (7) any deferred property tax amount under the senior 
390.23  citizens' property tax deferral program under chapter 290B, as 
390.24  well as the total deferred amount plus accrued interest; and 
390.25     (8) the net tax payable in the manner required in paragraph 
390.26  (a). 
390.27     (d) If the county uses envelopes for mailing property tax 
390.28  statements and if the county agrees, a taxing district may 
390.29  include a notice with the property tax statement notifying 
390.30  taxpayers when the taxing district will begin its budget 
390.31  deliberations for the current year, and encouraging taxpayers to 
390.32  attend the hearings.  If the county allows notices to be 
390.33  included in the envelope containing the property tax statement, 
390.34  and if more than one taxing district relative to a given 
390.35  property decides to include a notice with the tax statement, the 
390.36  county treasurer or auditor must coordinate the process and may 
391.1   combine the information on a single announcement.  
391.2      The commissioner of revenue shall certify to the county 
391.3   auditor the actual or estimated aids enumerated in clauses (3) 
391.4   and (4) that local governments will receive in the following 
391.5   year.  In the case of a county containing a city of the first 
391.6   class, for taxes levied in 1991, and for all counties for taxes 
391.7   levied in 1992 and thereafter, the commissioner must certify 
391.8   this amount by September 1.  
391.9      Sec. 4.  [290B.01] [PURPOSE.] 
391.10     Minnesota's system of ad valorem property taxation does not 
391.11  adequately recognize the unique financial circumstances of 
391.12  homestead property owned and occupied by low-income senior 
391.13  citizens.  It is therefore declared to be in the public interest 
391.14  of this state to stabilize tax burdens on homestead property 
391.15  owned by qualifying low-income senior citizens through a 
391.16  deferral of certain property taxes. 
391.17     Sec. 5.  [290B.02] [CITATION.] 
391.18     This program shall be named the "senior citizens' property 
391.19  tax deferral program." 
391.20     Sec. 6.  [290B.03] [DEFERRAL OF PROPERTY TAXES.] 
391.21     Subdivision 1.  [PROGRAM QUALIFICATIONS.] The 
391.22  qualifications for the senior citizens' property tax deferral 
391.23  program are as follows: 
391.24     (1) the property must be owned and occupied as a homestead 
391.25  by a person 65 years of age or older.  In the case of a married 
391.26  couple, both of the spouses must be at least 65 years old at the 
391.27  time the first property tax deferral is granted, regardless of 
391.28  whether the property is titled in the name of one spouse or both 
391.29  spouses, or titled in another way that permits the property to 
391.30  have homestead status; 
391.31     (2) the total household income of the qualifying 
391.32  homeowners, as defined in section 290A.03, subdivision 5, for 
391.33  the calendar year preceding the year of the initial application 
391.34  may not exceed $30,000; 
391.35     (3) the homestead must have been owned and occupied as the 
391.36  homestead of at least one of the qualifying homeowners for at 
392.1   least 15 years prior to the year the initial application is 
392.2   filed; 
392.3      (4) there are no delinquent property taxes, penalties, or 
392.4   interest on the homesteaded property; 
392.5      (5) there are no delinquent special assessments on the 
392.6   homesteaded property; 
392.7      (6) there are no state or federal tax liens or judgment 
392.8   liens on the homesteaded property; 
392.9      (7) there are no mortgages or other liens on the property 
392.10  that secure future advances, except for those subject to credit 
392.11  limits that result in compliance with clause (8); and 
392.12     (8) the total unpaid balances of debts secured by mortgages 
392.13  and other liens on the property, including unpaid special 
392.14  assessments, but not including property taxes payable during the 
392.15  year, does not exceed 30 percent of the assessor's estimated 
392.16  market value for the year. 
392.17     Subd. 2.  [QUALIFYING HOMESTEAD; DEFINED.] Qualifying 
392.18  homestead property is defined as the dwelling occupied as the 
392.19  homeowner's principal residence and so much of the land 
392.20  surrounding it, not exceeding one acre, as is reasonably 
392.21  necessary for use of the dwelling as a home and any other 
392.22  property used for purposes of a homestead as defined in section 
392.23  273.13, subdivisions 22 and 23.  The homestead may be part of a 
392.24  multidwelling building and the land on which it is built. 
392.25     Sec. 7.  [290B.04] [APPLICATION FOR DEFERRAL.] 
392.26     Subdivision 1.  [INITIAL APPLICATION.] A taxpayer meeting 
392.27  the program qualifications under section 290B.03 may apply to 
392.28  the commissioner of revenue for the deferral of taxes.  
392.29  Applications are due on or before July 1 for deferral of any of 
392.30  the following year's property taxes.  A taxpayer may apply in 
392.31  the year in which the taxpayer becomes 65 years old, provided 
392.32  that no deferral of property taxes will be made until the 
392.33  calendar year after the taxpayer becomes 65 years old.  The 
392.34  application, which shall be prescribed by the commissioner of 
392.35  revenue, shall include the following items and any other 
392.36  information which the commissioner deems necessary: 
393.1      (1) the name, address, and social security number of the 
393.2   owner or owners; 
393.3      (2) a copy of the property tax statement for the current 
393.4   payable year for the homesteaded property; 
393.5      (3) the initial year of ownership and occupancy as a 
393.6   homestead; 
393.7      (4) the owner's household income for the previous calendar 
393.8   year; and 
393.9      (5) information on any mortgage loans or other amounts 
393.10  secured by mortgages or other liens against the property, for 
393.11  which purpose the commissioner may require the applicant to 
393.12  provide a copy of the mortgage note, the mortgage, or a 
393.13  statement of the balance owing on the mortgage loan provided by 
393.14  the mortgage holder.  The commissioner may require the 
393.15  appropriate documents in connection with obtaining and 
393.16  confirming information on unpaid amounts secured by other liens. 
393.17     The application must state that program participation is 
393.18  voluntary.  The application must also state that the deferred 
393.19  amount depends directly on the applicant's household income, and 
393.20  that program participation includes authorization for the 
393.21  deferred amount for each year and the cumulative deferral and 
393.22  interest to appear on each year's property tax statement as 
393.23  public data. 
393.24     Subd. 2.  [APPROVAL; RECORDING.] The commissioner shall 
393.25  approve all initial applications that qualify under this chapter 
393.26  and shall notify qualifying homeowners on or before December 1.  
393.27  The commissioner may investigate the facts or require 
393.28  confirmation in regard to an application.  The commissioner 
393.29  shall record or file a notice of qualification for deferral, 
393.30  including the names of the qualifying homeowners and a legal 
393.31  description of the property, in the office of the county 
393.32  recorder, or registrar of titles, whichever is applicable, in 
393.33  the county where the qualifying property is located.  The notice 
393.34  must state that it serves as a notice of lien and that it 
393.35  includes deferrals under this section for future years.  The 
393.36  homeowner shall pay the recording or filing fees. 
394.1      Subd. 3.  [ANNUAL CERTIFICATION BY TAXPAYER.] Annually on 
394.2   or before July 1, a taxpayer whose initial application has been 
394.3   approved under subdivision 2, shall complete the certification 
394.4   form and return it to the commissioner of revenue.  The 
394.5   certification must state whether or not the taxpayer wishes to 
394.6   have property taxes deferred for the following year provided the 
394.7   taxes exceed the maximum property tax amount under section 
394.8   290B.05.  If the taxpayer does wish to have property taxes 
394.9   deferred, the certification must state the homeowner's total 
394.10  household income for the previous calendar year and any other 
394.11  information which the commissioner deems necessary.  
394.12     Sec. 8.  [290B.05] [MAXIMUM PROPERTY TAX AMOUNT AND 
394.13  DEFERRED PROPERTY TAX AMOUNT.] 
394.14     Subdivision 1.  [DETERMINATION BY COMMISSIONER.] The 
394.15  commissioner shall annually determine the qualifying homeowner's 
394.16  "maximum property tax amount" and "maximum allowable deferral."  
394.17  The maximum property tax amount calculated for taxes payable in 
394.18  the following year is equal to five percent of the homeowner's 
394.19  total household income for the previous calendar year.  No tax 
394.20  may be deferred for any homeowner whose total household income 
394.21  for the previous year exceeds $30,000.  No tax shall be deferred 
394.22  in any year in which the homeowner does not meet the program 
394.23  qualifications in section 290B.03.  The maximum allowable total 
394.24  deferral is equal to 75 percent of the assessor's estimated 
394.25  market value for the year, less (1) the balance of any mortgage 
394.26  loans and other amounts secured by liens against the property at 
394.27  the time of application, including any unpaid special 
394.28  assessments but not including property taxes payable during the 
394.29  year; and (2) any outstanding deferral and interest.  
394.30     Subd. 2.  [CERTIFICATION BY COMMISSIONER.] On or before 
394.31  December 1, the commissioner shall certify to the county auditor 
394.32  of the county in which the qualifying homestead is located (1) 
394.33  the maximum property tax amount; (2) the maximum allowable 
394.34  deferral for the year; and (3) the cumulative deferral and 
394.35  interest for all years preceding the next taxes payable year. 
394.36     Subd. 3.  [CALCULATION OF DEFERRED PROPERTY TAX AMOUNT.] 
395.1   When final property tax amounts for the following year have been 
395.2   determined, the county auditor shall calculate the "deferred 
395.3   property tax amount."  The deferred property tax amount is equal 
395.4   to the lesser of (1) the maximum allowable deferral for the 
395.5   year; or (2) the difference between the total amount of property 
395.6   taxes levied upon the qualifying homestead by all taxing 
395.7   jurisdictions and the maximum property tax amount.  Any special 
395.8   assessments levied by any local unit of government must not be 
395.9   included in the total tax used to calculate the deferred tax 
395.10  amount.  No deferral of the current year's property taxes is 
395.11  allowed if there are any delinquent property taxes or delinquent 
395.12  special assessments for any previous year.  Any tax attributable 
395.13  to new improvements made to the property after the initial 
395.14  application has been approved under section 290B.04, subdivision 
395.15  2, must be excluded when determining any subsequent deferred 
395.16  property tax amount.  The county auditor shall annually, on or 
395.17  before April 15, certify to the commissioner of revenue the 
395.18  property tax deferral amounts determined under this subdivision 
395.19  by property and by owner.  
395.20     Subd. 4.  [LIMITATION ON TOTAL AMOUNT OF DEFERRED TAXES.] 
395.21  On or before September 1 of each year, the commissioner shall 
395.22  request, and each county or city assessor shall provide, the 
395.23  current year's estimated market value of each property on the 
395.24  list supplied by the commissioner that may be eligible for 
395.25  deferral under this section for taxes payable in the following 
395.26  year.  The total amount of deferred taxes and interest on a 
395.27  property, when added to (1) the balance owing on any mortgages 
395.28  on the property at the time of initial application; and (2) 
395.29  other amounts secured by liens on the property at the time of 
395.30  the initial application, may not exceed 75 percent of the 
395.31  assessor's current estimated market value of the property. 
395.32     Sec. 9.  [290B.06] [PROPERTY TAX REFUNDS.] 
395.33     For purposes of qualifying for the regular property tax 
395.34  refund or the special refund for homeowners under chapter 290A, 
395.35  the qualifying tax is the full amount of taxes, including the 
395.36  deferred portion of the tax.  In any year in which a program 
396.1   participant chooses to have property taxes deferred under this 
396.2   section, any regular or special property tax refund awarded 
396.3   based upon those property taxes must be taken first as a 
396.4   deduction from the amount of the deferred tax for that year, and 
396.5   second as a deduction against any outstanding deferral from 
396.6   previous years, rather than as a cash payment to the homeowner.  
396.7   The commissioner shall cancel any current year's deferral or 
396.8   previous years' deferral and interest that is offset by the 
396.9   property tax refunds.  If the total of the regular and the 
396.10  special property tax refund amounts exceeds the sum of the 
396.11  deferred tax for the current year and cumulative deferred tax 
396.12  and interest for previous years, the commissioner shall then 
396.13  remit the excess amount to the homeowner.  On or before the date 
396.14  on which the commissioner issues property tax refunds, the 
396.15  commissioner shall notify program participants of any reduction 
396.16  in the deferred amount for the current and previous years 
396.17  resulting from property tax refunds. 
396.18     Sec. 10.  [290B.07] [LIEN; DEFERRED PORTION.] 
396.19     Payment by the state to the county treasurer of taxes 
396.20  deferred under this section is deemed a loan from the state to 
396.21  the program participant.  The commissioner must compute the 
396.22  interest as provided in section 270.75, subdivision 5, but not 
396.23  to exceed five percent, and maintain records of the total 
396.24  deferred amount and interest for each participant.  Interest 
396.25  shall accrue beginning September 1 of the payable year for which 
396.26  the taxes are deferred.  The lien created under section 272.31 
396.27  continues to secure payment by the taxpayer, or by the 
396.28  taxpayer's successors or assigns, of the amount deferred, 
396.29  including interest, with respect to all years for which amounts 
396.30  are deferred.  The lien for deferred taxes and interest has the 
396.31  same priority as any other lien under section 272.31, except 
396.32  that liens, including mortgages, recorded or filed prior to the 
396.33  recording or filing of the notice under section 290B.04, 
396.34  subdivision 2, have priority over the lien for deferred taxes 
396.35  and interest.  A seller's interest in a contract for deed, in 
396.36  which a qualifying homeowner is the purchaser or an assignee of 
397.1   the purchaser, has priority over deferred taxes and interest on 
397.2   deferred taxes, regardless of whether the contract for deed is 
397.3   recorded or filed.  The lien for deferred taxes and interest for 
397.4   future years has the same priority as the lien for deferred 
397.5   taxes and interest for the first year, which is always higher in 
397.6   priority than any mortgages or other liens filed, recorded, or 
397.7   created after the notice recorded or filed under section 
397.8   290B.04, subdivision 2.  The county treasurer or auditor shall 
397.9   maintain records of the deferred portion and shall list the 
397.10  amount of deferred taxes for the year and the cumulative 
397.11  deferral and interest for all previous years as a lien against 
397.12  the property on the property tax statement.  In any 
397.13  certification of unpaid taxes for a tax parcel, the county 
397.14  auditor shall clearly distinguish between taxes payable in the 
397.15  current year, deferred taxes and interest, and delinquent 
397.16  taxes.  Payment of the deferred portion becomes due and owing at 
397.17  the time specified in section 290B.08.  Upon receipt of the 
397.18  payment, the commissioner shall issue a receipt for it to the 
397.19  person making the payment upon request and shall notify the 
397.20  auditor of the county in which the parcel is located, within ten 
397.21  days, identifying the parcel to which the payment applies.  Upon 
397.22  receipt by the commissioner of revenue of collected funds in the 
397.23  amount of the deferral, the state's loan to the program 
397.24  participant is deemed paid in full. 
397.25     Sec. 11.  [290B.08] [TERMINATION OF DEFERRAL; PAYMENT OF 
397.26  DEFERRED TAXES.] 
397.27     Subdivision 1.  [TERMINATION.] (a) The deferral of taxes 
397.28  granted under this chapter terminates when one of the following 
397.29  occurs: 
397.30     (1) the property is sold or transferred; 
397.31     (2) the death of the qualifying homeowner(s); 
397.32     (3) the homeowner notifies the commissioner in writing that 
397.33  the homeowner desires to discontinue the deferral; or 
397.34     (4) the property no longer qualifies as a homestead. 
397.35     (b) A property is not terminated from the program because 
397.36  no deferred property tax amount is determined on the homestead 
398.1   for any given year after the homestead's initial enrollment into 
398.2   the program. 
398.3      Subd. 2.  [PAYMENT UPON TERMINATION.] Upon the termination 
398.4   of the deferral under subdivision 1, the amount of deferred 
398.5   taxes and interest plus the recording or filing fees under both 
398.6   section 290B.04, subdivision 2, and this subdivision becomes due 
398.7   and payable to the commissioner within 90 days of termination of 
398.8   the deferral.  No additional interest is due on the deferral if 
398.9   timely paid.  On receipt of payment, the commissioner shall 
398.10  within ten days notify the auditor of the county in which the 
398.11  parcel is located, identifying the parcel to which the payment 
398.12  applies and shall remit the recording or filing fees under 
398.13  section 290B.04, subdivision 2, and this subdivision to the 
398.14  auditor.  A notice of termination of deferral, containing the 
398.15  legal description and the recording or filing data for the 
398.16  notice of qualification for deferral under section 290B.04, 
398.17  subdivision 2, shall be prepared and recorded or filed by the 
398.18  county auditor in the same office in which the notice of 
398.19  qualification for deferral under section 290B.04, subdivision 2, 
398.20  was recorded or filed, and the county auditor shall mail a copy 
398.21  of the notice of termination to the property owner.  The 
398.22  property owner shall pay the recording or filing fees.  Upon 
398.23  recording or filing of the notice of termination of deferral, 
398.24  the notice of qualification for deferral under section 290B.04, 
398.25  subdivision 2, and the lien created by it are discharged.  If 
398.26  the deferral is not timely paid, the penalty, interest, lien, 
398.27  forfeiture, and other rules for the collection of ad valorem 
398.28  property taxes apply. 
398.29     Sec. 12.  [290B.09] [STATE REIMBURSEMENT.] 
398.30     Subdivision 1.  [DETERMINATION; PAYMENT.] The commissioner 
398.31  of revenue shall determine the deferred amount of property tax 
398.32  in each county, basing determinations on a review of abstracts 
398.33  of tax lists submitted by the county auditors under section 
398.34  275.29.  The commissioner may make changes in the abstracts of 
398.35  tax lists as deemed necessary.  The commissioner of revenue, 
398.36  after such review, shall pay the deferred amount of property tax 
399.1   to each county treasurer on or before August 31.  
399.2      At least once each year, the commissioner shall report to 
399.3   the county auditor the total cumulative amount of deferred taxes 
399.4   and interest that constitute a lien against the property.  
399.5      The county treasurer shall distribute as part of the 
399.6   October settlement the funds received as if they had been 
399.7   collected as a part of the property tax. 
399.8      Subd. 2.  [APPROPRIATION.] An amount sufficient to pay the 
399.9   total amount of property tax determined under subdivision 1 is 
399.10  annually appropriated from the general fund to the commissioner 
399.11  of revenue. 
399.12     Sec. 13.  [DEPARTMENT OF REVENUE APPROPRIATION.] 
399.13     There is appropriated to the commissioner of revenue, 
399.14  $33,000 for fiscal year 1998, and $34,000 for fiscal year 1999, 
399.15  for the purposes of administering the provisions of this article.
399.16     Sec. 14.  [EFFECTIVE DATE.] 
399.17     Sections 1 to 12 are effective the day following final 
399.18  enactment for deferral of property taxes payable in 1998, and 
399.19  thereafter. 
399.20                             ARTICLE 19
399.21                           MISCELLANEOUS
399.22     Section 1.  Minnesota Statutes 1996, section 6.76, is 
399.23  amended to read: 
399.24     6.76 [LOCAL GOVERNMENTAL EXPENDITURES FOR LOBBYISTS.] 
399.25     On or before January 31, 1990, and of each year thereafter, 
399.26  all counties, cities, school districts, metropolitan agencies, 
399.27  regional railroad authorities, and the metropolitan council 
399.28  shall report to the state auditor, on forms prescribed by the 
399.29  auditor, their estimated expenditures paid for the previous 
399.30  calendar year to a lobbyist as defined in section 10A.01, 
399.31  subdivision 11, and to any staff person not registered as a 
399.32  lobbyist, over 25 percent of whose time is spent during the 
399.33  legislative session on legislative matters, and for lobbying 
399.34  purposes to an association that retains or employs a lobbyist as 
399.35  defined in section 10A.01, subdivision 11. 
399.36     Sec. 2.  Minnesota Statutes 1996, section 115A.554, is 
400.1   amended to read: 
400.2      115A.554 [AUTHORITY OF SANITARY DISTRICTS.] 
400.3      A sanitary district has the authorities and duties of 
400.4   counties within the district's boundary for purposes of sections 
400.5   115A.0716; 115A.46, subdivisions 4 and 5; 115A.48; 115A.551; 
400.6   115A.552; 115A.553; 115A.919; 115A.929; 115A.93; 115A.96, 
400.7   subdivision 6; 115A.961; 116.072; 375.18, subdivision 14; 
400.8   400.08, except subdivision 4, paragraph (b); 400.16; and 400.161.
400.9      Sec. 3.  Minnesota Statutes 1996, section 117.155, is 
400.10  amended to read: 
400.11     117.155 [PAYMENTS; PARTIAL PAYMENT PENDING APPEAL.] 
400.12     Except as otherwise provided herein payment of damages 
400.13  awarded may be made or tendered at any time after the filing of 
400.14  the report; and the duty of the petitioner to pay the amount of 
400.15  any award or final judgment upon appeal shall, for all purposes, 
400.16  be held and construed to be full and just compensation to the 
400.17  respective owners or the persons interested in the lands.  If 
400.18  either the petitioner or any respondent appeals from an award, 
400.19  the respondent or respondents, if there is more than one, except 
400.20  encumbrancers having an interest in the award which has been 
400.21  appealed, may demand of the petitioner a partial payment of the 
400.22  award pending the final determination thereof, and it shall be 
400.23  the duty of the petitioner to comply with such demand and to 
400.24  promptly pay the amount demanded but not in excess of an amount 
400.25  equal to three-fourths of the award of damages for the parcel 
400.26  which has been appealed, less any payments made by petitioner 
400.27  pursuant to section 117.042; provided, however, that the 
400.28  petitioner may by motion after due notice to all interested 
400.29  parties request, and the court may order, reduction in the 
400.30  amount of the partial payment for cause shown.  If an appeal is 
400.31  taken from an award the petitioner may, but it cannot be 
400.32  compelled to, pay the entire amount of the award pending the 
400.33  final determination thereof.  If any respondent or respondents 
400.34  having an interest in the award refuses to accept such payment 
400.35  the petitioner may pay the amount thereof to the court 
400.36  administrator of district court to be paid out under direction 
401.1   of the court.  A partial or full payment as herein provided 
401.2   shall not draw interest from the condemner from the date of 
401.3   payment or deposit, and upon final determination of any appeal 
401.4   the total award of damages shall be reduced by the amount of the 
401.5   partial or full payment.  If any partial or full payment exceeds 
401.6   the amount of the award of compensation as finally determined, 
401.7   the petitioner shall have a claim against the respondents 
401.8   receiving such payment for the amount thereof, to be recoverable 
401.9   in the same manner as in any civil action upon petitioner's 
401.10  motion, final judgment must be entered in the condemnation 
401.11  action in favor of the petitioner in the amount of the balance 
401.12  owed to the petitioner and is recoverable within the original 
401.13  condemnation action. 
401.14     Sec. 4.  Minnesota Statutes 1996, section 121.15, is 
401.15  amended by adding a subdivision to read: 
401.16     Subd. 1a.  [PROJECT.] The construction, remodeling, or 
401.17  improvement of a building or site of an educational facility at 
401.18  an estimated cost exceeding $100,000 is a project under section 
401.19  177.42, subdivision 2. 
401.20     Sec. 5.  Minnesota Statutes 1996, section 161.45, is 
401.21  amended by adding a subdivision to read: 
401.22     Subd. 3.  [UTILITY INTERESTS WHEN REAL PROPERTY 
401.23  CONVEYED.] In proceedings to vacate, transfer, turn back, or 
401.24  otherwise convey an interest in real property owned or 
401.25  controlled by the department, when the property is owned in fee 
401.26  by the state, the commissioner may specify that the conveyance 
401.27  of the department's interest does not affect a prior, existing 
401.28  utility easement in the property or use of the property granted 
401.29  to a utility under permit issued by the department.  In 
401.30  addition, the commissioner may convey interests in real 
401.31  property, including an easement, subject to the right of a 
401.32  utility to enter upon the right-of-way to maintain, repair, 
401.33  replace, reconstruct, improve, remove, or otherwise attend to 
401.34  its equipment.  Where the utility had no preexisting easement 
401.35  over the real property, this subdivision does not prohibit a 
401.36  political subdivision, government agency, or private entity from 
402.1   negotiating or contracting with a utility with regard to the 
402.2   utility's easement or other interest in the property, but the 
402.3   utility shall continue to hold the interest in the property and 
402.4   the right of reasonable entry unless and until the utility 
402.5   agrees in writing to relinquish its interests. 
402.6      Sec. 6.  Minnesota Statutes 1996, section 216B.16, is 
402.7   amended by adding a subdivision to read: 
402.8      Subd. 16.  [WIND AND BIOMASS MANDATES.] Upon the petition 
402.9   of a public utility, the commission shall approve or disapprove 
402.10  power purchase contracts or investments entered into or made by 
402.11  the utility to satisfy the wind and biomass mandates contained 
402.12  in sections 216B.2423 and 216B.2424.  The contract expenses 
402.13  incurred and investments made by a public utility with the 
402.14  approval of the commission shall be fully recognized for the 
402.15  entire term of the contract or investment period without 
402.16  reduction and shall be included by the commission in its 
402.17  determination of just and reasonable rates.  The commission 
402.18  shall permit a public utility to file rate schedules providing 
402.19  for recovery of the costs of the wind and biomass mandates. 
402.20     Sec. 7. [270.0683] [REVENUE ESTIMATES OF LEGISLATIVE 
402.21  PROPOSALS.] 
402.22     Subdivision 1.  [DUTY TO PREPARE.] The commissioner of 
402.23  revenue shall prepare estimates of the effect of a bill or other 
402.24  proposal to change Minnesota tax law on state or local tax 
402.25  collections and state aid payments: 
402.26     (1) for bills being heard in a legislative committee with 
402.27  jurisdiction over bills relating to taxation; 
402.28     (2) in response to a request from the chair of a 
402.29  legislative committee with jurisdiction over bills relating to 
402.30  taxation; 
402.31     (3) in response to a request, approved by a majority of a 
402.32  legislative committee with jurisdiction over bills relating to 
402.33  taxation; and 
402.34     (4) to the extent possible, in response to a request from a 
402.35  member of the legislature. 
402.36     Subd. 2.  [METHODOLOGY.] Given the limitations of time and 
403.1   available resources, the commissioner shall use the best 
403.2   available data and methods to estimate, as accurately as 
403.3   possible, the actual effect of proposed changes on tax 
403.4   collections or payment of refunds.  To the extent practicable, 
403.5   in preparing the estimates the commissioner must specifically 
403.6   take into account actual and likely levels of compliance with 
403.7   both present and proposed tax law, including the effect of 
403.8   ongoing or planned compliance efforts by the commissioner.  The 
403.9   estimates must include a description of the methods and data 
403.10  used to prepare the estimate. 
403.11     Subd. 3.  [EDUCATION AIDS EXCLUDED.] This section does not 
403.12  require the commissioner to estimate the effect of changes in 
403.13  state education aids. 
403.14     Sec. 8.  Minnesota Statutes 1996, section 271.19, is 
403.15  amended to read: 
403.16     271.19 [COSTS AND DISBURSEMENTS.] 
403.17     Upon the determination of any appeal under this chapter 
403.18  before the tax court, or of any review hereunder by the supreme 
403.19  court, the costs and disbursements shall be taxed and allowed in 
403.20  favor of the prevailing party and against the losing party as in 
403.21  civil actions or, if there has been an offer of judgment or 
403.22  settlement by a party prior to ten days before the court hears 
403.23  the appeal, pursuant to Minnesota Rules of Civil Procedure, rule 
403.24  68.  In any case where a person liable for a tax or other 
403.25  obligation has lost an appeal or review instituted by the 
403.26  person, and the tax court or court shall determine that the 
403.27  person instituted the same merely for the purposes of delay, or 
403.28  that the taxpayer's position in the proceedings is frivolous, 
403.29  additional costs, commensurate with the expense incurred and 
403.30  services performed by the agencies of the state in connection 
403.31  with the appeal, but not exceeding $5,000 in any case, may be 
403.32  allowed against the taxpayer, in the discretion of the tax court 
403.33  or court.  Costs and disbursements allowed against any such 
403.34  person shall be added to the tax or other obligation determined 
403.35  to be due, and shall be payable therewith.  To the extent 
403.36  described in section 15.471, where an award of costs and 
404.1   attorney fees is authorized under section 15.472, the costs and 
404.2   fees shall be allowed against the state, including expenses 
404.3   incurred by the taxpayer to administratively protest or appeal 
404.4   to the department of revenue the order, decision, or report of 
404.5   the commissioner that is the subject of the tax court 
404.6   proceedings.  Costs and disbursements allowed against the state 
404.7   or other public agencies shall be paid out of funds received 
404.8   from taxes or other obligations of the kind involved in the 
404.9   proceeding, or other funds of the agency concerned appropriated 
404.10  and available therefor.  Witnesses in proceedings under this 
404.11  chapter shall receive like fees as in the district court, to be 
404.12  paid in the first instance by the parties by whom the witnesses 
404.13  were called, and to be taxed and allowed as herein provided. 
404.14     Sec. 9.  Minnesota Statutes 1996, section 278.07, is 
404.15  amended to read: 
404.16     278.07 [JUDGMENT; AMOUNT; COSTS.] 
404.17     Judgment shall be for the amount of the taxes for the year 
404.18  as the court shall determine the same, less the amount paid 
404.19  thereon, if any.  If the tax is sustained in the full amount 
404.20  levied or increased, costs and disbursements may, in the 
404.21  discretion of the court, be taxed and allowed as in delinquent 
404.22  tax proceedings and shall be included in the judgment.  If the 
404.23  tax so determined shall be less than is decreased from the 
404.24  amount thereof as originally levied, the court may, in its 
404.25  discretion, award disbursements to the petitioner, which shall 
404.26  be taxed and allowed and be deducted from the amount of the 
404.27  taxes as determined unless there has been a previous offer of 
404.28  reduced taxes that was rejected by the petitioner, in which case 
404.29  the award of costs and disbursements is governed by Minnesota 
404.30  Rules of Civil Procedure, rule 68.  If there be no judgment for 
404.31  taxes, a judgment may be entered determining the right of the 
404.32  parties and for the costs and disbursements as taxed and allowed.
404.33     Sec. 10.  Minnesota Statutes 1996, section 287.22, is 
404.34  amended to read: 
404.35     287.22 [EXCEPTIONS.] 
404.36     The tax imposed by section 287.21 shall not apply to: 
405.1      A.  Any executory contract for the sale of land under which 
405.2   the vendee is entitled to or does take possession thereof, or 
405.3   any assignment or cancellation thereof.  
405.4      B.  Any mortgage or any assignment, extension, partial 
405.5   release, or satisfaction thereof.  
405.6      C.  Any will.  
405.7      D.  Any plat.  
405.8      E.  Any lease.  
405.9      F.  Any deed, instrument, or writing in which the United 
405.10  States or any agency or instrumentality thereof is the grantor, 
405.11  assignor, transferor, conveyor, grantee or assignee. 
405.12     G.  Deeds for cemetery lots.  
405.13     H.  Deeds of distribution by personal representatives.  
405.14     I.  Deeds to or from coowners partitioning undivided 
405.15  interests in the same piece of property. 
405.16     J.  Any deed or other instrument of conveyance issued 
405.17  pursuant to a land exchange under section 92.121 and related 
405.18  laws.  
405.19     K.  A referee's or sheriff's certificate of sale in a 
405.20  mortgage or lien foreclosure sale. 
405.21     L.  A referee's or sheriff's certificate of redemption from 
405.22  a mortgage or lien foreclosure sale issued to the redeeming 
405.23  mortgagor or lienee. 
405.24     M.  A decree of marriage dissolution, as defined in section 
405.25  287.01, subdivision 4, or any deed or other instrument between 
405.26  the parties to the dissolution made pursuant to the terms of the 
405.27  decree. 
405.28     Sec. 11.  Minnesota Statutes 1996, section 298.75, 
405.29  subdivision 1, is amended to read: 
405.30     Subdivision 1.  [DEFINITIONS.] Except as may otherwise be 
405.31  provided, the following words, when used in this section, shall 
405.32  have the meanings herein ascribed to them.  
405.33     (1) "Aggregate material" shall mean nonmetallic natural 
405.34  mineral aggregate including, but not limited to sand, silica 
405.35  sand, gravel, building stone, crushed rock, limestone, and 
405.36  granite.  Aggregate material shall not include dimension stone 
406.1   and dimension granite.  Aggregate material must be measured or 
406.2   weighed after it has been extracted from the pit, quarry, or 
406.3   deposit.  
406.4      (2) "Person" shall mean any individual, firm, partnership, 
406.5   corporation, organization, trustee, association, or other entity.
406.6      (3) "Operator" shall mean any person engaged in the 
406.7   business of removing aggregate material from the surface or 
406.8   subsurface of the soil, for the purpose of sale, either directly 
406.9   or indirectly, through the use of the aggregate material in a 
406.10  marketable product or service.  
406.11     (4) "Extraction site" shall mean a pit, quarry, or deposit 
406.12  containing aggregate material and any contiguous property to the 
406.13  pit, quarry, or deposit which is used by the operator for 
406.14  stockpiling the aggregate material.  
406.15     (5) "Importer" shall mean any person who buys aggregate 
406.16  material produced from a county not listed in paragraph (6) or 
406.17  another state and causes the aggregate material to be imported 
406.18  into a county in this state which imposes a tax on aggregate 
406.19  material.  
406.20     (6) "County" shall mean the counties of Stearns, Benton, 
406.21  Sherburne, Carver, Scott, Dakota, Le Sueur, Kittson, Marshall, 
406.22  Pennington, Red Lake, Polk, Norman, Mahnomen, Clay, 
406.23  Becker, Carlton, St. Louis, Rock, Murray, Wilkin, Big Stone, 
406.24  Sibley, Hennepin, Washington, Chisago, and Ramsey.  
406.25     Sec. 12.  Minnesota Statutes 1996, section 298.75, 
406.26  subdivision 4, is amended to read: 
406.27     Subd. 4.  If the county auditor has not received the report 
406.28  by the 15th day after the last day of each calendar quarter from 
406.29  the operator or importer as required by subdivision 3 or has 
406.30  received an erroneous report, the county auditor shall estimate 
406.31  the amount of tax due and notify the operator or importer by 
406.32  registered mail of the amount of tax so estimated within the 
406.33  next 14 days.  An operator or importer may, within 30 days from 
406.34  the date of mailing the notice, and upon payment of the amount 
406.35  of tax determined to be due, file in the office of the county 
406.36  auditor a written statement of objections to the amount of taxes 
407.1   determined to be due.  The statement of objections shall be 
407.2   deemed to be a petition within the meaning of chapter 278, and 
407.3   shall be governed by sections 278.02 to 278.13. 
407.4      Sec. 13.  Minnesota Statutes 1996, section 298.75, is 
407.5   amended by adding a subdivision to read: 
407.6      Subd. 8.  The county auditor or its duly authorized agent 
407.7   may examine records, including computer records, maintained by 
407.8   an importer or operator.  The term "record" includes, but is not 
407.9   limited to, all accounts of an importer or operator.  The county 
407.10  auditor must have access at all reasonable times to inspect and 
407.11  copy all business records related to an importer's or operator's 
407.12  collection, transportation, and disposal of aggregate to the 
407.13  extent necessary to ensure that all aggregate material 
407.14  production taxes required to be paid have been remitted to the 
407.15  county.  The records must be maintained by the importer or 
407.16  operator for no less than six years. 
407.17     Sec. 14.  Minnesota Statutes 1996, section 298.28, 
407.18  subdivision 9a, is amended to read: 
407.19     Subd. 9a.  [TACONITE ECONOMIC DEVELOPMENT FUND.] (a) 15.4 
407.20  cents per ton for distributions in 1996, 1998, and 1999 and 20.4 
407.21  cents per ton for distributions in 1997, 1998, and 1999 shall be 
407.22  paid to the taconite economic development fund.  No distribution 
407.23  shall be made under this paragraph in any year in which total 
407.24  industry production falls below 30 million tons. 
407.25     (b) An amount equal to 50 percent of the tax under section 
407.26  298.24 for concentrate sold in the form of pellet chips and 
407.27  fines not exceeding 5/16 inch in size and not including crushed 
407.28  pellets shall be paid to the taconite economic development 
407.29  fund.  The amount paid shall not exceed $700,000 annually for 
407.30  all companies.  If the initial amount to be paid to the fund 
407.31  exceeds this amount, each company's payment shall be prorated so 
407.32  the total does not exceed $700,000. 
407.33     Sec. 15.  Minnesota Statutes 1996, section 298.28, is 
407.34  amended by adding a subdivision to read: 
407.35     Subd. 9b.  [TACONITE ENVIRONMENTAL FUND.] Five cents per 
407.36  ton for distributions in 1998 and 1999 shall be paid to the 
408.1   taconite environmental fund for use under section 298.2961.  No 
408.2   distribution may be made under this paragraph in any year in 
408.3   which total industry production falls below 30,000,000 tons. 
408.4      Sec. 16.  Minnesota Statutes 1996, section 298.2961, 
408.5   subdivision 1, is amended to read: 
408.6      Subdivision 1.  [APPROPRIATION.] (a) $10,000,000 is 
408.7   appropriated from the northeast Minnesota economic protection 
408.8   trust fund to a special account in the taconite area 
408.9   environmental protection fund for grants or loans to producers 
408.10  on a project-by-project basis as provided in this section. 
408.11     (b) The proceeds of the tax designated under section 
408.12  298.28, subdivision 9b, are appropriated for grants and loans to 
408.13  producers on a project-by-project basis as provided in this 
408.14  section. 
408.15     Sec. 17.  Minnesota Statutes 1996, section 325D.33, 
408.16  subdivision 3, is amended to read: 
408.17     Subd. 3.  [REBATES OR CONCESSIONS.] It is unlawful for a 
408.18  wholesaler to offer a rebate in price, to give a rebate in 
408.19  price, to offer a concession of any kind, or to give a 
408.20  concession of any kind in connection with the sale of 
408.21  cigarettes.  For purposes of this chapter, the term "discount" 
408.22  is included in the definition of a rebate.  For purposes of this 
408.23  subdivision, the term "wholesaler" does not include a 
408.24  manufacturer or manufacturer's representative.  
408.25     Sec. 18.  Minnesota Statutes 1996, section 373.40, 
408.26  subdivision 7, is amended to read: 
408.27     Subd. 7.  [REPEALER.] This section is repealed effective 
408.28  for bonds issued after July 1, 1998 2003, but continues to apply 
408.29  to bonds issued before that date. 
408.30     Sec. 19. [383A.80] [RAMSEY COUNTY DEED AND MORTGAGE TAX.] 
408.31     Subdivision 1.  [AUTHORITY TO IMPOSE; RATE.] (a) The 
408.32  governing body of Ramsey county may impose a mortgage registry 
408.33  and deed tax. 
408.34     (b) The rate of the mortgage registry tax equals one cent 
408.35  for each $100 or fraction of the principal. 
408.36     (c) The rate of the deed tax equals five cents for each 
409.1   $500 or fraction of the amount. 
409.2      Subd. 2.  [GENERAL LAW PROVISIONS APPLY.] The taxes under 
409.3   this section apply to the same base and must be imposed, 
409.4   collected, administered, and enforced in the same manner as 
409.5   provided under chapter 287 for the state mortgage registry and 
409.6   deed taxes.  All the provisions of chapter 287 apply to these 
409.7   taxes, except the rate is as specified in subdivision 1, the 
409.8   term "Ramsey county" must be substituted for "the state," and 
409.9   the revenue must be deposited as provided in subdivision 3. 
409.10     Subd. 3.  [DEPOSIT OF REVENUES.] All revenues from the tax 
409.11  are for the use of the Ramsey county board of commissioners and 
409.12  must be deposited in the county's environmental response fund 
409.13  under section 383B.81. 
409.14     Subd. 4.  [EXPIRATION.] The authority to impose the tax 
409.15  under this section expires January 1, 2003. 
409.16     Sec. 20. [383A.81] [ENVIRONMENTAL RESPONSE FUND.] 
409.17     Subdivision 1.  [CREATION.] An environmental response fund 
409.18  is created for the purposes specified in this section.  The 
409.19  taxes imposed by section 383B.80 must be deposited in the fund.  
409.20  The board of county commissioners shall administer the fund 
409.21  either as a county board, a housing and redevelopment authority, 
409.22  or a regional rail authority. 
409.23     Subd. 2.  [USES OF FUND.] The fund created in subdivision 1 
409.24  must be used for the following purposes: 
409.25     (1) acquisition through purchase or condemnation of lands 
409.26  or property which are polluted or contaminated with hazardous 
409.27  substances; 
409.28     (2) paying the costs associated with indemnifying or 
409.29  holding harmless the entity taking title to lands or property 
409.30  from any liability arising out of the ownership, remediation, or 
409.31  use of the land or property; 
409.32     (3) paying for the costs of remediating the acquired land 
409.33  or property; 
409.34     (4) paying the costs associated with remediating lands or 
409.35  property which are polluted or contaminated with hazardous 
409.36  substances; or 
410.1      (5) paying for the costs associated with improving the 
410.2   property for economic development, recreational, housing, 
410.3   transportation or rail traffic. 
410.4      Subd. 3.  [MATCHING FUNDS.] In expending funds under this 
410.5   section, the county shall seek matching funds from contamination 
410.6   clean up funds administered by the commissioner of the 
410.7   department of trade and economic development, the metropolitan 
410.8   council, the federal government, the private sector, and any 
410.9   other source. 
410.10     Subd. 4.  [BONDS.] The county may pledge the proceeds from 
410.11  the taxes imposed by section 383B.80 to bonds issued under this 
410.12  chapter and chapters 398A, 462, 469, and 475. 
410.13     Subd. 5.  [PRIORITIES.] The first priority for the use of 
410.14  the environmental response fund created in this section is to 
410.15  clean up the site located in the city of St. Paul known as the 
410.16  Dale Street Shops and Maxson Steel site or other sites at or 
410.17  near rail lines that are blighted and the clean up of which will 
410.18  lead to living wage jobs, and to improve the land for economic 
410.19  development. 
410.20     Subd. 6.  [LAND SALES.] Land or property acquired under 
410.21  this section may be resold at fair market value.  Proceeds from 
410.22  the sale of the land must be deposited in the environmental 
410.23  response fund. 
410.24     Subd. 7.  [DOT ASSISTANCE.] The commissioner of 
410.25  transportation shall collaborate with the county and any 
410.26  affected municipality by providing technical assistance and 
410.27  support in cleaning up a contaminated site. 
410.28     Sec. 21. [383B.80] [HENNEPIN COUNTY DEED AND MORTGAGE TAX.] 
410.29     Subdivision 1.  [AUTHORITY TO IMPOSE; RATE.] (a) The 
410.30  governing body of Hennepin county may impose a mortgage registry 
410.31  and deed tax. 
410.32     (b) The rate of the mortgage registry tax equals one cent 
410.33  for each $100 or fraction of the principal. 
410.34     (c) The rate of the deed tax equals five cents for each 
410.35  $500 or fraction of the amount. 
410.36     Subd. 2.  [GENERAL LAW PROVISIONS APPLY.] The taxes under 
411.1   this section apply to the same base and must be imposed, 
411.2   collected, administered, and enforced in the same manner as 
411.3   provided under Minnesota Statutes, chapter 287 for the state 
411.4   mortgage registry and deed taxes.  All the provisions of chapter 
411.5   287 apply to these taxes, except the rate is as specified in 
411.6   subdivision 1, the term "Hennepin county" must be substituted 
411.7   for the "state," and the revenue must be deposited as provided 
411.8   in subdivision 3. 
411.9      Subd. 3.  [DEPOSIT OF REVENUES.] All revenues from the tax 
411.10  are for the use of the Hennepin county board of commissioners 
411.11  and must be deposited in the county's environmental response 
411.12  fund under section 383B.81. 
411.13     Subd. 4.  [EXPIRATION.] The authority to impose the tax 
411.14  under this section expires January 1, 2003. 
411.15     Sec. 22. [383B.81] [ENVIRONMENTAL RESPONSE FUND.] 
411.16     Subdivision 1.  [CREATION.] An environmental response fund 
411.17  is created for the purposes specified in this section.  The 
411.18  taxes imposed by section 383B.80 must be deposited in the fund.  
411.19  The board of county commissioners shall administer the fund 
411.20  either as a county board, a housing and redevelopment authority, 
411.21  or a regional rail authority. 
411.22     Subd. 2.  [USES OF FUND.] The fund created in subdivision 1 
411.23  must be used for the following purposes: 
411.24     (1) acquisition through purchase or condemnation of lands 
411.25  or property which are polluted or contaminated with hazardous 
411.26  substances; 
411.27     (2) paying the costs associated with indemnifying or 
411.28  holding harmless the entity taking title to lands or property 
411.29  from any liability arising out of the ownership, remediation, or 
411.30  use of the land or property; 
411.31     (3) paying for the costs of remediating the acquired land 
411.32  or property; 
411.33     (4) paying the costs associated with remediating lands or 
411.34  property which are polluted or contaminated with hazardous 
411.35  substances; or 
411.36     (5) paying for the costs associated with improving the 
412.1   property for economic development, recreational, housing, 
412.2   transportation or rail traffic. 
412.3      Subd. 3.  [MATCHING FUNDS.] In expending funds under this 
412.4   section the county shall seek matching funds from contamination 
412.5   cleanup funds administered by the commissioners of the 
412.6   department of trade and economic development, the metropolitan 
412.7   council, the federal government, the private sector and any 
412.8   other source. 
412.9      Subd. 4.  [BONDS.] The county may pledge the proceeds from 
412.10  the taxes imposed by section 383B.80 to bonds issued under this 
412.11  chapter and chapters 398A, 462, 469, and 475. 
412.12     Subd. 5.  [PRIORITIES.] The first priority for the use of 
412.13  the the environmental response fund created in this section is 
412.14  to clean up the site located in the city of St. Louis Park known 
412.15  as NL Industries/Tarce Corporation/Golden Auto, EPA I.D. No. 
412.16  MND097891634 and to provide adequate right-of-way for a portion 
412.17  of the rail line to replace the 29th street line in the city of 
412.18  Minneapolis, including making rail improvements, changing the 
412.19  curve of the railroad track and eliminating a switching 
412.20  facility, and improving the land for economic development. 
412.21     Subd. 6.  [LAND SALES.] Land or property acquired under 
412.22  this section may be resold at fair market value.  Proceeds from 
412.23  the sale of the land must be deposited in the environmental 
412.24  response fund. 
412.25     Subd. 7.  [DOT ASSISTANCE.] The commissioner of 
412.26  transportation shall collaborate with the county and any 
412.27  affected municipality by providing technical assistance and 
412.28  support in facilitating the railroad improvement and cleaning up 
412.29  a contaminated site. 
412.30     Sec. 23.  Minnesota Statutes 1996, section 398A.04, 
412.31  subdivision 1, is amended to read: 
412.32     Subdivision 1.  [GENERAL.] An authority may exercise all 
412.33  the powers necessary or desirable to implement the powers 
412.34  specifically granted in this section, and in exercising the 
412.35  powers is deemed to be performing an essential governmental 
412.36  function and exercising a part of the sovereign power of the 
413.1   state, and is a local government unit and political subdivision 
413.2   of the state.  Without limiting the generality of the foregoing, 
413.3   the authority may: 
413.4      (a) Sue and be sued, have a seal, which may but need not be 
413.5   affixed to documents as directed by the board, make and perform 
413.6   contracts, and have perpetual succession; 
413.7      (b) Acquire real and personal property within or outside 
413.8   its taxing jurisdiction, by purchase, gift, devise, 
413.9   condemnation, conditional sale, lease, lease purchase, or 
413.10  otherwise; or for purposes, including the facilitation of an 
413.11  economic development project pursuant to section 469.091 or 
413.12  469.175, subdivision 7, that also improve rail service; and 
413.13     (c) Hold, manage, control, sell, convey, lease, mortgage, 
413.14  or otherwise dispose of real or personal property. 
413.15     Sec. 24.  [458D.111] [COLLECTION OF SOLID WASTE MANAGEMENT 
413.16  SERVICE CHARGES.] 
413.17     Subdivision 1.  [AUTHORITY.] The board shall have the 
413.18  powers of a county as specified in section 400.08. 
413.19     Subd. 2.  [METHOD OF COLLECTING CERTAIN SERVICE 
413.20  CHARGES.] The board shall determine the method of collecting 
413.21  service charges in a service area by resolution. 
413.22     Subd. 3.  [SERVICE CHARGES ON REAL ESTATE INCLUDING EXEMPT 
413.23  PROPERTY.] In addition to any methods provided in section 
413.24  400.08, the board may assess and collect service charges as 
413.25  follows.  On or before October 15 of each year, the board shall 
413.26  certify to each county auditor an itemized list of solid waste 
413.27  management service charges and a description of parcels of lands 
413.28  against which the charges arise.  It shall be the duty of the 
413.29  county auditors to include the charges upon the tax rolls of the 
413.30  county for the taxes due and payable for the following year.  
413.31  The solid waste management service charge shall be enforced and 
413.32  collected in the manner provided for the enforcement and 
413.33  collection of real property taxes.  The service charges shall be 
413.34  subject to the same penalties, interest, and other conditions 
413.35  provided for the collection of property taxes.  The board shall 
413.36  reimburse each county auditor for the costs of collection of the 
414.1   service charge. 
414.2      Sec. 25.  [PUBLIC SAFETY TRAINING FACILITY.] 
414.3      Subdivision 1.  [JOINT POWERS AGREEMENT; BONDS.] Each of 
414.4   the cities of Bloomington, Chanhassen, Eden Prairie, Edina, 
414.5   Minnetonka, and Richfield may issue general obligation bonds of 
414.6   the city in an amount not to exceed $1,000,000 for its share of 
414.7   the cost of the acquisition, construction, and equipping of a 
414.8   public safety training facility to be jointly operated by a 
414.9   joint powers association consisting of two or more municipal or 
414.10  public corporations of which that city is a member.  The 
414.11  issuance of the bonds is subject to Minnesota Statutes, chapter 
414.12  475, except that no election shall be required except as 
414.13  provided in subdivision 2. 
414.14     Subd. 2.  [REVERSE REFERENDUM.] Before the adoption by the 
414.15  governing body of a city of any resolution authorizing the 
414.16  issuance of any bonds authorized by subdivision 1, the city 
414.17  shall publish a notice in the official newspaper of the city 
414.18  stating that the governing body of the city intends to consider 
414.19  the authorization of the issuance of the bonds, stating the 
414.20  amount, purpose, and, in general, the security and source of 
414.21  payment for the bonds.  The resolution authorizing the issuance 
414.22  of the bonds shall not be adopted by the governing body of the 
414.23  city for at least 15 days after publication of the notice of 
414.24  intention.  If within 15 days after publication of the notice of 
414.25  intention a petition asking for an election on the proposition 
414.26  that the city issue the bonds signed by the voters equal to at 
414.27  least ten percent of the registered voters in the city is filed 
414.28  with the clerk, no bonds may be issued by the city unless 
414.29  approved by a majority of the voters of the city voting on the 
414.30  question of the issuance at a regular or special election.  
414.31     Subd. 3.  [EFFECTIVE DATE; LOCAL APPROVAL.] This section is 
414.32  effective with respect to any of the cities of Bloomington, 
414.33  Chanhassen, Eden Prairie, Edina, Minnetonka, and Richfield the 
414.34  day after compliance by that city with Minnesota Statutes, 
414.35  section 645.021, subdivision 3. 
414.36     Sec. 26.  [ST. LOUIS COUNTY TOWNS.] 
415.1      If the St. Louis county board does not approve section 11, 
415.2   as provided in section 30, each of the following towns in St. 
415.3   Louis county may impose the aggregate materials tax under 
415.4   Minnesota Statutes, section 298.75:  the towns of Alden, 
415.5   Brevator, Canosia, Duluth, Fredenberg, Gnesen, Grand Lake, 
415.6   Industrial, Lakewood, Midway, Normanna, North Star, Rice Lake, 
415.7   and Solway. 
415.8      For purposes of exercising the powers contained in 
415.9   Minnesota Statutes, section 298.75, the "town" is deemed to be 
415.10  the "county." 
415.11     In those towns located in St. Louis County that impose the 
415.12  tax under Minnesota Statutes, section 298.75, all provisions in 
415.13  that section shall apply to those towns, except that in lieu of 
415.14  the distribution of the tax proceeds under subdivision 7, all 
415.15  proceeds from this tax shall be retained by each of the towns 
415.16  that impose the tax. 
415.17     Sec. 27.  [DEED TAX.] 
415.18     The commissioner of revenue may not enforce a deed tax 
415.19  assessment in the case of new residential construction if, at or 
415.20  before the time the first residential owners of the improvement 
415.21  take possession, the deed tax has been paid on the consideration 
415.22  paid for the improvement. 
415.23     Sec. 28.  [APPROPRIATION; PAYMENT OF CLAIMS.] 
415.24     $16,600,000 is appropriated in fiscal year 1998 from the 
415.25  general fund to the commissioner of revenue to pay claims filed 
415.26  under the Cambridge Bank Judgment. 
415.27     Sec. 29.  [APPROPRIATION; ADMINISTRATION OF ACT.] 
415.28     Subdivision 1.  [PROPERTY TAX CREDIT.] $235,000 is 
415.29  appropriated from the general fund for fiscal year 1998 to the 
415.30  commissioner of revenue to pay the costs of administering the 
415.31  1997 property tax credit provided in article 1, section 14. 
415.32     Subd. 2.  [OTHER COSTS.] $416,000 is appropriated from the 
415.33  general fund for fiscal years 1998 and 1999 to the commissioner 
415.34  of revenue to pay the other costs of administering the 
415.35  provisions of this act. 
415.36     Sec. 30.  [EFFECTIVE DATE.] 
416.1      Section 10 is effective for decrees of marriage 
416.2   dissolution, deeds, or other instruments executed and delivered 
416.3   after July 1, 1997. 
416.4      Section 11 is effective for Carlton county the day after 
416.5   compliance by Carlton county with the requirements of Minnesota 
416.6   Statutes, section 645.021, subdivision 3. 
416.7      Section 11 is effective for St. Louis county the day after 
416.8   compliance by St. Louis county with the requirements of 
416.9   Minnesota Statutes, section 645.021, subdivision 3. 
416.10     Section 18 is effective the day following final enactment. 
416.11     Section 27 is effective for assessments made on or after 
416.12  the effective date of Laws 1996, chapter 471, article 2, section 
416.13  32.