1.1                          A bill for an act
  1.2             relating to taxation; providing for an income and 
  1.3             property tax rebate; providing for agricultural 
  1.4             assistance; exempting certain storm-damaged tree 
  1.5             trimming and removal services from the sales tax; 
  1.6             providing for automatic rebates in enacted budget; 
  1.7             appropriating money; amending Minnesota Statutes 1998, 
  1.8             sections 297A.15, subdivision 6; and 297A.25, by 
  1.9             adding a subdivision; proposing coding for new law in 
  1.10            Minnesota Statutes, chapter 16A. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12                             ARTICLE 1
  1.13            INCOME AND PROPERTY TAX REBATE, AGRICULTURAL 
  1.14                ASSISTANCE, AND SALES TAX EXEMPTION 
  1.15     Section 1.  Minnesota Statutes 1998, section 297A.15, 
  1.16  subdivision 6, is amended to read: 
  1.17     Subd. 6.  [REFUND; APPROPRIATION.] The tax on the gross 
  1.18  receipts from the sale of items exempt under section 297A.25, 
  1.19  subdivision 43, and section 2, must be imposed and collected as 
  1.20  if the sale were taxable and the rate under section 297A.02, 
  1.21  subdivision 1, applied. 
  1.22     Upon application by the owner of the homestead property on 
  1.23  forms prescribed by the commissioner, a refund equal to the tax 
  1.24  paid on the gross receipts of the building materials and 
  1.25  equipment must be paid to the homeowner.  In the case of 
  1.26  building materials in which the tax was paid by a contractor, 
  1.27  application must be made by the homeowner for the sales tax paid 
  1.28  by the contractor.  The application must include sufficient 
  2.1   information to permit the commissioner to verify the sales tax 
  2.2   paid for the project.  The contractor must furnish to the 
  2.3   homeowner a statement of the cost of building materials and the 
  2.4   sales taxes paid on the materials.  The amount required to make 
  2.5   the refunds is annually appropriated to the commissioner.  
  2.6   Interest must be paid on the refund at the rate in section 
  2.7   270.76 from 60 days after the date the refund claim is filed 
  2.8   with the commissioner. 
  2.9      Upon application by the owner of the residential property 
  2.10  on forms prescribed by the commissioner, a refund equal to the 
  2.11  tax paid on the gross receipts on the tree trimming or tree or 
  2.12  stump removal services must be paid to the residential property 
  2.13  owner.  The application must include sufficient information to 
  2.14  permit the commissioner to certify that the project meets the 
  2.15  requirements of section 2.  The amount required to make the 
  2.16  refunds is annually appropriated to the commissioner.  Interest 
  2.17  must be paid on the refund at the rate in section 270.76 from 60 
  2.18  days after the date the refund claim is filed with the 
  2.19  commissioner. 
  2.20     Sec. 2.  Minnesota Statutes 1998, section 297A.25, is 
  2.21  amended by adding a subdivision to read: 
  2.22     Subd. 79.  [TREE DAMAGE FROM STORMS.] (a) The gross 
  2.23  receipts from the sale of tree and stump removal services and 
  2.24  tree trimming services are exempt provided that (1) the removal 
  2.25  or trimming is for a tree on residential property, (2) the 
  2.26  removal or trimming is necessary because of tree damage 
  2.27  resulting from a tornado, wind storm, blizzard, or ice storm, 
  2.28  and (3) the residential property owner is uninsured for the loss.
  2.29     (b) The tax on the gross receipts from the sales of the 
  2.30  services exempt under this subdivision must be imposed and 
  2.31  collected as if the sales were taxable and the rate under 
  2.32  section 297A.02, subdivision 1, applied.  The residential 
  2.33  property owner may apply for a refund as provided under section 
  2.34  297A.15, subdivision 6. 
  2.35     Sec. 3.  [1999 INCOME AND PROPERTY TAX REBATE.] 
  2.36     Subdivision 1.  [PAYMENT REQUIRED.] The commissioner of 
  3.1   revenue shall pay an income tax rebate to each individual or 
  3.2   married couple who paid tax under Minnesota Statutes, chapter 
  3.3   290, for a taxable year beginning after December 31, 1996, and 
  3.4   before January 1, 1998.  The commissioner of revenue shall pay a 
  3.5   property tax rebate to each individual who was eligible for a 
  3.6   credit under Laws 1997, chapter 231, article 1, section 16, as 
  3.7   amended by Laws 1997, First Special Session chapter 5, section 
  3.8   35, and Laws 1997, Third Special Session chapter 3, section 11, 
  3.9   and Laws 1998, chapter 304, and Laws 1998, chapter 389, article 
  3.10  1, section 3, and who filed for that credit on or before April 
  3.11  15, 1999.  The commissioner shall pay the rebate by (1) 60 days 
  3.12  after the day following final enactment of this section for 
  3.13  returns filed before January 1, 1999; or (2) within 90 days 
  3.14  after the commissioner receives the taxpayer's return for all 
  3.15  other returns.  Payments of the rebate made after the required 
  3.16  payment date bear interest at the rate provided in Minnesota 
  3.17  Statutes, section 270.76.  For returns filed after July 1, 1999, 
  3.18  the commissioner may allow the income tax rebate as a credit 
  3.19  against the tax imposed. 
  3.20     Subd. 2.  [AMOUNT ALLOWED.] (a) The amount of the income 
  3.21  tax rebate equals the sum of: 
  3.22     (1) 100 percent of the first $150 of income tax liability; 
  3.23  and 
  3.24     (2) 20 percent of any income tax liability in excess of 
  3.25  $150. 
  3.26     The maximum income tax rebate is $7,600 for married 
  3.27  taxpayers filing joint returns and surviving spouses, and $3,800 
  3.28  for all other taxpayers. 
  3.29     (b) Income tax liability means the liability for tax 
  3.30  computed under Minnesota Statutes, sections 290.06 and 290.091, 
  3.31  and before subtraction of the credits in Minnesota Statutes, 
  3.32  sections 290.067 and 290.0671, and Laws 1997, chapter 231, 
  3.33  article 1, section 16, as amended. 
  3.34     (c) The amount of the property tax rebate equals 88 percent 
  3.35  of the rebate allowed to the individual under Laws 1997, chapter 
  3.36  231, article 1, section 16, as amended. 
  4.1      Subd. 3.  [NO OFFSET OF INTEREST AND PENALTIES.] The rebate 
  4.2   may not be used to offset any interest and penalties resulting 
  4.3   from underpayment of estimated tax for taxable year 1997. 
  4.4      Subd. 4.  [JOINT RETURNS.] Individuals who filed a joint 
  4.5   return must receive a joint rebate.  After the rebate has been 
  4.6   issued, but before the check has been cashed, either joint 
  4.7   claimant may request a separate check for one-half of the rebate.
  4.8      Subd. 5.  [APPLICATION OF OTHER LAWS.] (a) The rebate is a 
  4.9   "Minnesota tax law" for purposes of Minnesota Statutes, section 
  4.10  270B.01, subdivision 8. 
  4.11     (b) The rebate is "an overpayment of any tax collected by 
  4.12  the commissioner" for purposes of Minnesota Statutes, section 
  4.13  270.07, subdivision 5.  For purposes of this paragraph, a joint 
  4.14  rebate is payable to each spouse equally. 
  4.15     (c) The rebate is a refund subject to revenue recapture 
  4.16  under Minnesota Statutes, chapter 270A.  The commissioner of 
  4.17  revenue shall remit the entire refund to the claimant agency, 
  4.18  which shall, upon the request of the spouse who does not owe the 
  4.19  debt, refund one-half of a joint rebate to the spouse who does 
  4.20  not owe the debt. 
  4.21     Subd. 6.  [UNCASHED CHECKS.] If the commissioner of revenue 
  4.22  cannot locate an individual entitled to a rebate by July 1, 
  4.23  2001, or if an individual to whom a rebate was issued has not 
  4.24  cashed the check by July 1, 2001, the right to the rebate lapses 
  4.25  and the check must be deposited in the general fund. 
  4.26     Subd. 7.  [FILING PERMITTED.] Individuals entitled to a 
  4.27  rebate under this section, but who did not receive one, and 
  4.28  individuals who receive a rebate that was not correctly 
  4.29  computed, must file a claim with the commissioner before July 1, 
  4.30  2000, in a form prescribed by the commissioner.  The 
  4.31  commissioner shall treat these claims as claims for refund under 
  4.32  Minnesota Statutes, section 289A.50, subdivisions 4 and 7. 
  4.33     Subd. 8.  [WRONGLY CASHED CHECKS.] If a rebate check is 
  4.34  cashed by someone other than the payee or payees of the check 
  4.35  and the commissioner of revenue determines that the check has 
  4.36  been forged or improperly endorsed, the commissioner may issue 
  5.1   an order of assessment for the amount of the check against the 
  5.2   person or persons cashing it.  The assessment must be made 
  5.3   within two years after the check is cashed, but if cashing the 
  5.4   check constitutes theft under Minnesota Statutes, section 
  5.5   609.52, or forgery under Minnesota Statutes, section 609.631, 
  5.6   the assessment may be made at any time.  The assessment may be 
  5.7   appealed administratively and judicially.  The commissioner may 
  5.8   take action to collect the assessment in the same manner as 
  5.9   provided by Minnesota Statutes, chapter 289A, for any other 
  5.10  order of the commissioner assessing tax. 
  5.11     Subd. 9.  [CONTRACTING AUTHORITY.] Notwithstanding 
  5.12  Minnesota Statutes, sections 9.031, 16A.40, 16B.49, 16B.50, and 
  5.13  any other law to the contrary, the commissioner of revenue may 
  5.14  take whatever actions the commissioner deems necessary to pay 
  5.15  the rebates required by this section, and may, in consultation 
  5.16  with the commissioner of finance and the state treasurer, 
  5.17  contract with a private vendor or vendors to process, print, and 
  5.18  mail the rebate checks or warrants required under this section 
  5.19  and receive and disburse state funds to pay those checks or 
  5.20  warrants. 
  5.21     Subd. 10.  [PAYMENT TO STATE.] (a) A taxpayer receiving a 
  5.22  rebate under this section may endorse and return the rebate 
  5.23  check to the state and designate that the returned rebate must 
  5.24  be deposited in one or more of the following accounts for use 
  5.25  only for the purposes designated in this subdivision: 
  5.26     (1) an account for the basic sliding fee child care program 
  5.27  for child care assistance to families administered by the 
  5.28  commissioner of children, families, and learning under Minnesota 
  5.29  Statutes, section 119B.03; 
  5.30     (2) an account to lower kindergarten through grade 6 
  5.31  classroom size and reduce instructor-to-student ratios to an 
  5.32  average level of 1 to 17 to be administered by the commissioner 
  5.33  of children, families, and learning; 
  5.34     (3) the affordable rental investment fund to be used by the 
  5.35  housing finance agency for family rental housing assistance 
  5.36  under Minnesota Statutes, section 462A.21, subdivision 8b; 
  6.1      (4) the contaminated site cleanup and development account 
  6.2   to be used by the commissioner of trade and economic development 
  6.3   for contamination cleanup development grants under Minnesota 
  6.4   Statutes, sections 116J.551 to 116J.556; and 
  6.5      (5) the general fund for use as appropriated by law. 
  6.6      (b) Each rebate check shall have printed on the back of the 
  6.7   check that it may be endorsed to the state of Minnesota and used 
  6.8   for the designated option under paragraph (a).  If more than one 
  6.9   use of the rebate is designated, the rebate must be divided 
  6.10  evenly between the designated options.  If a check is endorsed 
  6.11  and mailed to the state and no option is designated, the check 
  6.12  must be deposited in the general fund. 
  6.13     (c) The rebate check shall be accompanied by a notice 
  6.14  prepared by the commissioner of revenue that explains the 
  6.15  taxpayer's option to endorse the check to the state, and 
  6.16  explains the uses of the funds that the taxpayer may designate.  
  6.17  In preparing the notice, the commissioner of revenue shall 
  6.18  consult with the commissioners or agencies that administer the 
  6.19  funds or accounts.  The notice shall also explain that a 
  6.20  taxpayer may cash the rebate check and mail a contribution of 
  6.21  any amount to the state and that the contribution must be used 
  6.22  for the option or options under paragraph (a) as designated by 
  6.23  the taxpayer.  The notice shall contain in bold print the 
  6.24  address to which the endorsed check or a state contribution may 
  6.25  be mailed. 
  6.26     (d) Funds endorsed and mailed to the state and 
  6.27  contributions mailed to the state under this subdivision shall 
  6.28  be deposited by the commissioner of finance in the fund or 
  6.29  account designated, and are appropriated to the agency or 
  6.30  commissioner designated by the taxpayer or contributor for use 
  6.31  as provided in this subdivision.  Funds appropriated under this 
  6.32  paragraph are available until expended. 
  6.33     (e) Funds appropriated under this subdivision are in 
  6.34  addition to any funds appropriated for the purposes given in 
  6.35  this subdivision and may not be used for any other purposes 
  6.36  including the reduction of any other appropriations.  Funds 
  7.1   appropriated to a commissioner or agency under this subdivision 
  7.2   are not included in the department's or agency's budget base. 
  7.3      Subd. 11.  [PROPERTY TAX REBATE CONTINGENT.] (a) The 
  7.4   provisions of subdivisions 1 and 2 providing a property tax 
  7.5   rebate take effect only if $400,000,000 or more in an 
  7.6   unrestricted general fund budgetary balance becomes available 
  7.7   for fiscal year 1999 by any combination of the following: 
  7.8      (1) reductions or cancellations in general fund 
  7.9   appropriations enacted by the legislature, including any 
  7.10  reductions or cancellations that are deposited in a rebate 
  7.11  account; and 
  7.12     (2) an increase in the unrestricted budgetary general fund 
  7.13  balance as a result of the February 1999 forecast. 
  7.14     (b) If the amount calculated under paragraph (a) exceeds 
  7.15  $400,000,000, the commissioner of revenue shall increase the 
  7.16  percentage of the property tax rebate paid under subdivision 1, 
  7.17  paragraph (c), by one percentage point for each $4,000,000 of 
  7.18  unrestricted general fund budgetary balance that becomes 
  7.19  available for fiscal year 1999. 
  7.20     Sec. 4.  [AGRICULTURAL ASSISTANCE IN 1999.] 
  7.21     Subdivision 1.  [DEFINITIONS.] (a) The definitions in this 
  7.22  subdivision apply to this section. 
  7.23     (b) "Commissioner" means the commissioner of revenue. 
  7.24     (c) "Farm service agency" means the United States Farm 
  7.25  Service Agency. 
  7.26     (d) "Farmer" means a person who produces an agricultural 
  7.27  crop or livestock and is certified by the farm service agency as 
  7.28  bearing a percentage of the risk for the production operation. 
  7.29     (e) "Livestock" means cattle, hogs, poultry, and sheep. 
  7.30     (f) "Livestock production facility" means a facility that 
  7.31  has produced at least $10,000 in sales of livestock or dairy 
  7.32  products as reported on schedule F of the farmer's federal 
  7.33  income tax return for either taxable years beginning in calendar 
  7.34  year 1997 or 1998. 
  7.35     Subd. 2.  [PAYMENT TO FARMERS.] Every farmer may apply to 
  7.36  the commissioner by April 1, 1999, for a payment as provided 
  8.1   under this subdivision.  The payment is equal to $4 for every 
  8.2   acre in Minnesota on which the farmer produced an agricultural 
  8.3   crop for crop year 1998 as certified by the farm service agency 
  8.4   by December 31, 1998.  The commissioner shall prepare 
  8.5   application forms for the payment and ensure that they are 
  8.6   available throughout the state.  To receive a payment under this 
  8.7   subdivision, a farmer must include with the application a 
  8.8   certification from the farm service agency of the number of 
  8.9   acres farmed including any percentage of risk for particular 
  8.10  acres.  The commissioner shall make the payment to each eligible 
  8.11  farmer by May 1, 1999. 
  8.12     Subd. 3.  [LIVESTOCK PRODUCERS.] Only a farmer who operates 
  8.13  a livestock production facility on 160 acres or less is eligible 
  8.14  for the agricultural property tax refund under subdivisions 4 to 
  8.15  8.  The refund is in lieu of the per acre payment under 
  8.16  subdivision 2.  To qualify, the farmer must apply for the refund 
  8.17  as provided in subdivisions 4 to 8. 
  8.18     Subd. 4.  [REFUND.] The refund equals the full amount of 
  8.19  the property tax payment due and payable on May 15, 1999, on 
  8.20  class 1b agricultural homestead property or class 2a 
  8.21  agricultural homestead property as defined in Minnesota 
  8.22  Statutes, section 273.13, excluding that portion of the tax 
  8.23  attributable to the house, garage, and surrounding acre of 
  8.24  land.  If a portion of the property was leased for the 1998 
  8.25  agricultural production year, the refund amount shall be 
  8.26  prorated so that only the portion of the property which was not 
  8.27  leased for the 1998 agricultural production year qualifies for 
  8.28  the refund.  
  8.29     Subd. 5.  [CERTIFICATION.] The commissioner shall develop a 
  8.30  form by February 15, 1999, for use by the county auditors to 
  8.31  ascertain qualification for the refund under subdivisions 4 to 
  8.32  8.  The form shall require the property owner to certify that (i)
  8.33  the owner operates a livestock production facility on 160 acres 
  8.34  or less, and (ii) the percentage of that property, if any, that 
  8.35  was leased to anyone for the 1998 agricultural production year.  
  8.36  Any person qualifying under subdivision 3 shall contact the 
  9.1   county auditor in the county where the livestock production 
  9.2   facility is located and shall file the required form with the 
  9.3   county auditor by April 1, 1999. 
  9.4      Subd. 6.  [VERIFICATION.] The county auditor shall 
  9.5   determine the amount of the refund for all qualifying properties 
  9.6   in the county for which the owner has applied under subdivision 
  9.7   5.  By April 10, 1999, the county auditor shall notify all 
  9.8   applicants of the amount of the refund. 
  9.9      Subd. 7.  [CERTIFICATION AND PAYMENT.] By April 20, 1999, 
  9.10  any person eligible for the refund under subdivisions 4 to 8 
  9.11  shall send the commissioner a copy of the certification that the 
  9.12  taxpayer received from the county auditor.  The commissioner 
  9.13  shall issue a refund to each qualifying taxpayer by May 10, 1999.
  9.14     Subd. 8.  [PROPERTY TAX REFUND.] Taxpayers benefiting from 
  9.15  the refund under subdivisions 4 to 8 must deduct the amount of 
  9.16  the refund from the net property taxes payable when applying for 
  9.17  a property tax refund under Minnesota Statutes 1998, section 
  9.18  290A.04, subdivision 2. 
  9.19     Subd. 9.  [LIMIT.] No person may receive a payment under 
  9.20  subdivision 2 or a property tax refund under subdivisions 4 to 8 
  9.21  that exceeds $10,000. 
  9.22     Sec. 5.  [APPROPRIATION.] 
  9.23     (a) The amount necessary to pay the rebate under section 3 
  9.24  is appropriated from the general fund to the commissioner of 
  9.25  revenue.  The first $200,000,000 of this appropriation is from 
  9.26  the tax reform and reduction account. 
  9.27     (b) $1,075,000 is appropriated from the general fund to the 
  9.28  commissioner of revenue to administer the rebate under section 3.
  9.29     (c) The amount of the payments required under section 4, 
  9.30  subdivisions 2 and 7, is appropriated from the general fund to 
  9.31  the commissioner of revenue for fiscal year 1999. 
  9.32     (d) $68,000 is appropriated to the commissioner of revenue 
  9.33  for distribution to counties for the costs of administering 
  9.34  section 4, subdivisions 4 to 8. 
  9.35     Sec. 6.  [EFFECTIVE DATE.] 
  9.36     Sections 1 and 2 are effective for sales made after March 
 10.1   1, 1998.  Sections 3 to 5 are effective the day following final 
 10.2   enactment. 
 10.3                              ARTICLE 2 
 10.4                  AUTOMATIC REBATE IN ENACTED BUDGET 
 10.5      Section 1.  [16A.1522] [STATEMENT OF PURPOSE.] 
 10.6      (a) The state of Minnesota derives revenues from a variety 
 10.7   of taxes, fees, and other sources. 
 10.8      (b) The general fund state budget is enacted for a two-year 
 10.9   period based on a forecast of state revenues and authorized 
 10.10  spending.  The two-year biennial budget period begins July 1 of 
 10.11  odd-numbered years and ends June 30 of odd-numbered years. 
 10.12     (c) Section 2 is intended to require that any positive 
 10.13  unrestricted budgetary general fund balance in excess of 
 10.14  one-half of one percent of total general fund biennial revenues 
 10.15  at the close of the biennium be returned to the taxpayers of 
 10.16  Minnesota in the form of a rebate, payable at the end of the 
 10.17  budget period. 
 10.18     Sec. 2.  [16A.1523] [REBATE REQUIREMENTS.] 
 10.19     (a) If, on the basis of a forecast of general fund revenues 
 10.20  and expenditures in November of an even-numbered year or 
 10.21  February of an odd-numbered year, the commissioner of finance 
 10.22  projects that there will be a positive unrestricted budgetary 
 10.23  general fund balance at the close of the biennium that exceeds 
 10.24  one-half of one percent of total general fund biennial revenues, 
 10.25  the commissioner of finance shall designate the entire balance 
 10.26  as available for rebate to the taxpayers of Minnesota. 
 10.27     (b) If the commissioner of finance designates an amount for 
 10.28  rebate in either forecast, then the governor shall present a 
 10.29  plan to the legislature for rebating that amount to the 
 10.30  taxpayers of Minnesota.  The plan must provide for payments to 
 10.31  begin no later than August 15 of the odd-numbered year.  The 
 10.32  legislature must adopt or modify any plan presented by the 
 10.33  governor by April 15 of each odd-numbered year. 
 10.34     (c) By July 15 of each odd-numbered year, the commissioner 
 10.35  of finance shall certify to the commissioner of revenue the 
 10.36  amount of revenues available for rebate as determined by 
 11.1   preliminary June 30 end-of-year fiscal analysis. 
 11.2      (d) If the amount of a positive unrestricted budgetary 
 11.3   general fund balance existing on June 30 of an odd-numbered year 
 11.4   is less than one-half of one percent of the total general fund 
 11.5   biennial revenues, the total amount of the positive balance 
 11.6   shall be deposited into the tax relief account. 
 11.7      (e) Amounts certified for rebate by the commissioner of 
 11.8   finance are appropriated from the general fund to the 
 11.9   commissioner of revenue for the sole purpose of making the 
 11.10  payments required by this section. 
 11.11     Sec. 3.  [EFFECTIVE DATE.] 
 11.12     Sections 1 and 2 are effective September 1, 1999.