1.1                          A bill for an act 
  1.2             relating to financing state and local government; 
  1.3             providing a sales tax rebate; reducing individual 
  1.4             income tax rates; making changes to income, sales and 
  1.5             use, property, excise, mortgage registry and deed, 
  1.6             health care provider, motor fuels, cigarette and 
  1.7             tobacco, liquor, insurance premiums, aircraft 
  1.8             registration, lawful gambling, taconite production, 
  1.9             solid waste, estate, and special taxes; conforming 
  1.10            with changes in federal income tax provisions; 
  1.11            authorizing certain cities to impose sales taxes and 
  1.12            issue bonds; establishing an agricultural homestead 
  1.13            credit; changing and allowing tax credits, 
  1.14            subtractions, and exemptions; changing property tax 
  1.15            valuation, assessment, levy, classification, 
  1.16            homestead, credit, aid, exemption, review, appeal, 
  1.17            abatement, and distribution provisions; extending levy 
  1.18            limits and changing levy authority; authorizing 
  1.19            property tax abatements; reducing the rate of health 
  1.20            care provider taxes; reducing tax rates on lawful 
  1.21            gambling; changing tax increment financing law and 
  1.22            providing special authority for certain cities; 
  1.23            authorizing water and sanitary sewer districts; 
  1.24            providing for the funding of courts in certain 
  1.25            judicial districts; changing tax forfeiture and 
  1.26            delinquency provisions; changing and clarifying tax 
  1.27            administration, collection, enforcement, and penalty 
  1.28            provisions; freezing the taconite production tax and 
  1.29            providing for its distribution; regulating state and 
  1.30            local business subsidies; authorizing issuance of 
  1.31            certain local obligations; requiring the metropolitan 
  1.32            airports commission to provide funding for airport 
  1.33            noise mitigation projects; modifying payment of 
  1.34            certain aids to local units of government; providing 
  1.35            for funding for border cities; changing fiscal note 
  1.36            requirements; providing for deposit of tobacco 
  1.37            settlement funds; requiring tax rebates when there is 
  1.38            a budget surplus; requiring a study; authorizing 
  1.39            requirements to use alternative dispute resolution 
  1.40            processes in annexation and similar proceedings; 
  1.41            transferring funds; appropriating money; amending 
  1.42            Minnesota Statutes 1998, sections 3.986, subdivision 
  1.43            2; 3.987, subdivision 1; 16D.09; 60A.19, subdivision 
  1.44            6; 92.51; 97A.065, subdivision 2; 204B.135, by adding 
  1.45            a subdivision; 270.07, subdivision 1; 270.65; 270.67, 
  1.46            by adding a subdivision; 270.78; 270A.03, subdivision 
  2.1             2; 270A.07, subdivision 2; 270A.08, subdivision 2; 
  2.2             271.01, subdivision 5; 271.21, subdivision 2; 272.02, 
  2.3             subdivision 1; 272.027; 272.03, subdivision 6; 273.11, 
  2.4             subdivisions 1a and 16; 273.111, by adding a 
  2.5             subdivision; 273.124, subdivisions 1, 7, 8, 13, 14, 
  2.6             and by adding a subdivision; 273.13, subdivisions 22, 
  2.7             23, 24, 25, 31, and by adding a subdivision; 273.1382; 
  2.8             273.1398, subdivisions 1a, 2, 8, and by adding a 
  2.9             subdivision; 273.1399, subdivision 6; 273.20; 274.01, 
  2.10            subdivision 1; 275.70, subdivision 5; 275.71, 
  2.11            subdivisions 2, 3, and 4; 276.131; 279.37, 
  2.12            subdivisions 1, 1a, and 2; 281.23, subdivisions 2, 4, 
  2.13            and 6; 282.01, subdivisions 1, 4, and 7; 282.04, 
  2.14            subdivision 2; 282.05; 282.08; 282.09; 282.241; 
  2.15            282.261, subdivision 4, and by adding a subdivision; 
  2.16            283.10; 287.01, subdivision 3, as amended; 287.05, 
  2.17            subdivisions 1, as amended, and 1a, as amended; 
  2.18            289A.02, subdivision 7; 289A.18, subdivision 4; 
  2.19            289A.20, subdivision 4; 289A.31, subdivision 2; 
  2.20            289A.40, subdivisions 1 and 1a; 289A.50, subdivision 
  2.21            7, and by adding a subdivision; 289A.55, subdivision 
  2.22            9; 289A.56, subdivision 4; 289A.60, subdivisions 3 and 
  2.23            21; 290.01, subdivisions 7, 19, 19a, 19b, 19f, 19g, 
  2.24            31, and by adding a subdivision; 290.06, subdivisions 
  2.25            2c, 2d, and by adding subdivisions; 290.0671, 
  2.26            subdivision 1; 290.0674, subdivisions 1 and 2; 
  2.27            290.091, subdivisions 1, 2, and 6; 290.0921, 
  2.28            subdivision 5; 290.095, subdivision 3; 290.17, 
  2.29            subdivisions 3, 4, and 6; 290.191, subdivisions 2 and 
  2.30            3; 290.9725; 290.9726, by adding a subdivision; 
  2.31            290A.03, subdivisions 3, 6, and 15; 290B.03, 
  2.32            subdivision 1; 290B.04, subdivisions 2, 3, and 4; 
  2.33            290B.05, subdivision 1; 291.005, subdivision 1; 
  2.34            295.50, subdivision 4; 295.52, subdivision 7; 295.53, 
  2.35            subdivision 1; 295.55, subdivisions 2 and 3; 295.57, 
  2.36            by adding a subdivision; 296A.16, by adding 
  2.37            subdivisions; 297A.15, subdivision 5; 297A.25, 
  2.38            subdivisions 9, 63, 73, and by adding subdivisions; 
  2.39            297A.48, by adding subdivisions; 297E.01, by adding a 
  2.40            subdivision; 297E.02, subdivisions 1, 3, 4, and 6; 
  2.41            297F.01, subdivision 23; 297F.17, subdivision 6; 
  2.42            297H.05; 297H.06, subdivision 2; 298.22, subdivision 
  2.43            7; 298.24, subdivision 1; 298.28, subdivisions 9a and 
  2.44            9b; 298.296, subdivision 4; 299D.03, subdivision 5; 
  2.45            357.021, subdivision 1a; 360.55, by adding a 
  2.46            subdivision; 373.40, subdivision 1; 375.18, 
  2.47            subdivision 12; 375.192, subdivision 2; 383C.482, 
  2.48            subdivision 1; 414.11; 462A.071, subdivision 2; 
  2.49            465.82, by adding a subdivision; 469.002, subdivision 
  2.50            10; 469.012, subdivision 1; 469.169, subdivision 12, 
  2.51            and by adding a subdivision; 469.1735, by adding a 
  2.52            subdivision; 469.176, subdivision 4g; 469.1763, by 
  2.53            adding a subdivision; 469.1771, subdivision 1, and by 
  2.54            adding a subdivision; 469.1791, subdivision 3; 
  2.55            469.1813, subdivisions 1, 2, 3, 6, and by adding 
  2.56            subdivisions; 469.1815, subdivision 2; 473.252, 
  2.57            subdivision 2; 475.52, subdivisions 1, 3, and 4; 
  2.58            477A.011, subdivision 36; 477A.03, subdivision 2; 
  2.59            477A.06, subdivision 1; 485.018, subdivision 5; 
  2.60            487.02, subdivision 2; 487.32, subdivision 3; 487.33, 
  2.61            subdivision 5; and 574.34, subdivision 1; Laws 1997, 
  2.62            chapter 231, article 1, section 19, subdivisions 1 and 
  2.63            3; article 2, section 68, subdivision 3, as amended; 
  2.64            article 3, section 9; Laws 1997, First Special Session 
  2.65            chapter 3, section 27; Laws 1997, Second Special 
  2.66            Session chapter 2, section 6; Laws 1998, chapter 389, 
  2.67            article 8, section 44, subdivisions 5, 6, and 7, as 
  2.68            amended; Laws 1998, chapter 645, section 3; and Laws 
  2.69            1999, chapter 112, section 1, subdivisions 1, 3, 4, 
  2.70            and 9; proposing coding for new law in Minnesota 
  2.71            Statutes, chapters 16A; 116J; 275; 290; 383D; 414; and 
  3.1             469; repealing Minnesota Statutes 1998, sections 
  3.2             92.22; 116J.991; 273.11, subdivision 10; 280.27; 
  3.3             281.13; 281.38; 284.01; 284.02; 284.03; 284.04; 
  3.4             284.05; 284.06; 297E.12, subdivision 3; 297F.19, 
  3.5             subdivision 4; 297G.18, subdivision 4; 473.252, 
  3.6             subdivisions 4 and 5; and 477A.05; Laws 1997, chapter 
  3.7             231, article 1, section 19, subdivision 2; and Laws 
  3.8             1998, chapter 389, article 3, section 45. 
  3.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  3.10                             ARTICLE 1 
  3.11                          SALES TAX REBATE 
  3.12     Section 1.  [STATEMENT OF PURPOSE.] 
  3.13     (a) The state of Minnesota derives revenues from a variety 
  3.14  of taxes, fees, and other sources, including the state sales tax.
  3.15     (b) It is fair and reasonable to refund the existing state 
  3.16  budget surplus in the form of a rebate of nonbusiness consumer 
  3.17  sales taxes paid by individuals in calendar year 1997. 
  3.18     (c) Information concerning the amount of sales tax paid at 
  3.19  various income levels is contained in the Minnesota tax 
  3.20  incidence report, which is written by the commissioner of 
  3.21  revenue and presented to the legislature according to Minnesota 
  3.22  Statutes, section 270.0682. 
  3.23     (d) It is fair and reasonable to use information contained 
  3.24  in the Minnesota tax incidence report to determine the 
  3.25  proportionate share of the sales tax rebate due each eligible 
  3.26  taxpayer since no effective or practical mechanism exists for 
  3.27  determining the amount of actual sales tax paid by each eligible 
  3.28  individual. 
  3.29     Sec. 2.  [SALES TAX REBATE.] 
  3.30     (a) An individual who: 
  3.31     (1) was eligible for a credit under Laws 1997, chapter 231, 
  3.32  article 1, section 16, as amended by Laws 1997, First Special 
  3.33  Session chapter 5, section 35, and Laws 1997, Third Special 
  3.34  Session chapter 3, section 11, and Laws 1998, chapter 304, and 
  3.35  Laws 1998, chapter 389, article 1, section 3, and who filed for 
  3.36  or received that credit on or before June 15, 1999; or 
  3.37     (2) filed a 1997 Minnesota income tax return on or before 
  3.38  June 15, 1999, and had a tax liability before refundable credits 
  3.39  on that return of at least $1 but did not file the claim for 
  4.1   credit authorized under Laws 1997, chapter 231, article 1, 
  4.2   section 16, as amended, and who was not allowed to be claimed as 
  4.3   a dependent on a 1997 federal income tax return filed by another 
  4.4   person; or 
  4.5      (3) had the property taxes payable on his or her homestead 
  4.6   abated to zero under Laws 1997, chapter 231, article 2, section 
  4.7   64, 
  4.8   shall receive a sales tax rebate. 
  4.9      (b) The sales tax rebate for taxpayers who qualify under 
  4.10  paragraph (a) as married filing joint or head of household must 
  4.11  be computed according to the following schedule: 
  4.12       Income                             Sales Tax Rebate
  4.13   less than $2,500                              $  358
  4.14   at least $2,500 but less than $5,000          $  469
  4.15   at least $5,000 but less than $10,000         $  502
  4.16   at least $10,000 but less than $15,000        $  549
  4.17   at least $15,000 but less than $20,000        $  604
  4.18   at least $20,000 but less than $25,000        $  641
  4.19   at least $25,000 but less than $30,000        $  690
  4.20   at least $30,000 but less than $35,000        $  762
  4.21   at least $35,000 but less than $40,000        $  820
  4.22   at least $40,000 but less than $45,000        $  874
  4.23   at least $45,000 but less than $50,000        $  921
  4.24   at least $50,000 but less than $60,000        $  969
  4.25   at least $60,000 but less than $70,000        $1,071
  4.26   at least $70,000 but less than $80,000        $1,162
  4.27   at least $80,000 but less than $90,000        $1,276
  4.28   at least $90,000 but less than $100,000       $1,417
  4.29   at least $100,000 but less than $120,000      $1,535
  4.30   at least $120,000 but less than $140,000      $1,682
  4.31   at least $140,000 but less than $160,000      $1,818
  4.32   at least $160,000 but less than $180,000      $1,946
  4.33   at least $180,000 but less than $200,000      $2,067
  4.34   at least $200,000 but less than $400,000      $2,644
  4.35   at least $400,000 but less than $600,000      $3,479
  4.36   at least $600,000 but less than $800,000      $4,175
  5.1    at least $800,000 but less than $1,000,000    $4,785
  5.2    $1,000,000 and over                           $5,000
  5.3      (c) The sales tax rebate for individuals who qualify under 
  5.4   paragraph (a) as single or married filing separately must be 
  5.5   computed according to the following schedule: 
  5.6         Income                                 Sales Tax Rebate
  5.7    less than $2,500                              $  204
  5.8    at least $2,500 but less than $5,000          $  249
  5.9    at least $5,000 but less than $10,000         $  299
  5.10   at least $10,000 but less than $15,000        $  408
  5.11   at least $15,000 but less than $20,000        $  464
  5.12   at least $20,000 but less than $25,000        $  496
  5.13   at least $25,000 but less than $30,000        $  515
  5.14   at least $30,000 but less than $40,000        $  570
  5.15   at least $40,000 but less than $50,000        $  649
  5.16   at least $50,000 but less than $70,000        $  776
  5.17   at least $70,000 but less than $100,000       $  958
  5.18   at least $100,000 but less than $140,000      $1,154
  5.19   at least $140,000 but less than $200,000      $1,394
  5.20   at least $200,000 but less than $400,000      $1,889
  5.21   at least $400,000 but less than $600,000      $2,485
  5.22   $600,000 and over                             $2,500
  5.23     (d) Individuals who were not residents of Minnesota for any 
  5.24  part of 1997 and who paid more than $10 in Minnesota sales tax 
  5.25  on nonbusiness consumer purchases in that year qualify for a 
  5.26  rebate under this paragraph only.  Qualifying nonresidents must 
  5.27  file a claim for rebate on a form prescribed by the commissioner 
  5.28  before the later of June 15, 1999, or 30 days after the date of 
  5.29  enactment of this act.  The claim must include receipts showing 
  5.30  the Minnesota sales tax paid and the date of the sale.  Taxes 
  5.31  paid on purchases allowed in the computation of federal taxable 
  5.32  income or reimbursed by an employer are not eligible for the 
  5.33  rebate.  The commissioner shall determine the qualifying taxes 
  5.34  paid and rebate the lesser of: 
  5.35     (1) 69.0 percent of that amount; or 
  5.36     (2) the maximum amount for which the claimant would have 
  6.1   been eligible as determined under paragraph (b) if the taxpayer 
  6.2   filed the 1997 federal income tax return as a married taxpayer 
  6.3   filing jointly or head of household, or as determined under 
  6.4   paragraph (c) for other taxpayers. 
  6.5      (e) "Income," for purposes of this section other than 
  6.6   paragraph (d), is taxable income as defined in section 63 of the 
  6.7   Internal Revenue Code of 1986, as amended through December 31, 
  6.8   1996, plus the sum of any additions to federal taxable income 
  6.9   for the taxpayer under Minnesota Statutes, section 290.01, 
  6.10  subdivision 19a, and reported on the original 1997 income tax 
  6.11  return including subsequent adjustments to that return made 
  6.12  within the time limits specified in paragraph (h).  For an 
  6.13  individual who was a resident of Minnesota for less than the 
  6.14  entire year, the sales tax rebate equals the sales tax rebate 
  6.15  calculated under paragraph (b) or (c) multiplied by the 
  6.16  percentage determined pursuant to Minnesota Statutes, section 
  6.17  290.06, subdivision 2c, paragraph (e), as calculated on the 
  6.18  original 1997 income tax return including subsequent adjustments 
  6.19  to that return made within the time limits specified in 
  6.20  paragraph (h).  For purposes of paragraph (d), "income" is 
  6.21  taxable income as defined in section 63 of the Internal Revenue 
  6.22  Code of 1986, as amended through December 31, 1996, and reported 
  6.23  on the taxpayer's original federal tax return for the first 
  6.24  taxable year beginning after December 31, 1996. 
  6.25     (f) Before payment, the commissioner of revenue shall 
  6.26  adjust the rebate as follows: 
  6.27     (1) the rebates calculated in paragraphs (b), (c), and (d) 
  6.28  must be proportionately reduced to account for 1997 income tax 
  6.29  returns that are filed on or after January 1, 1999, but before 
  6.30  July 1, 1999, so that the amount of sales tax rebates payable 
  6.31  under paragraphs (b), (c), and (d) does not exceed 
  6.32  $1,250,000,000; and 
  6.33     (2) the commissioner of finance shall certify by July 15, 
  6.34  1999, preliminary fiscal year 1999 general fund net nondedicated 
  6.35  revenues.  The certification shall exclude the impact of any 
  6.36  legislation enacted during the 1999 regular session.  If 
  7.1   certified net nondedicated revenues exceed the amount forecast 
  7.2   in February 1999, up to $50,000,000 of the increase shall be 
  7.3   added to the total amount rebated.  The commissioner of revenue 
  7.4   shall adjust all rebates proportionally to reflect any 
  7.5   increases.  The total amount of the rebate shall not exceed 
  7.6   $1,300,000,000. 
  7.7   The adjustments under this paragraph are not rules subject to 
  7.8   Minnesota Statutes, chapter 14. 
  7.9      (g) The commissioner of revenue may begin making sales tax 
  7.10  rebates by August 1, 1999.  Sales tax rebates not paid by 
  7.11  October 1, 1999, bear interest at the rate specified in 
  7.12  Minnesota Statutes, section 270.75. 
  7.13     (h) A sales tax rebate shall not be adjusted based on 
  7.14  changes to a 1997 income tax return that are made by order of 
  7.15  assessment after June 15, 1999, or made by the taxpayer that are 
  7.16  filed with the commissioner of revenue after June 15, 1999. 
  7.17     (i) Individuals who filed a joint income tax return for 
  7.18  1997 shall receive a joint sales tax rebate.  After the sales 
  7.19  tax rebate has been issued, but before the check has been 
  7.20  cashed, either joint claimant may request a separate check for 
  7.21  one-half of the joint sales tax rebate.  Notwithstanding 
  7.22  anything in this section to the contrary, if prior to payment, 
  7.23  the commissioner has been notified that persons who filed a 
  7.24  joint 1997 income tax return are living at separate addresses, 
  7.25  as indicated on their 1998 income tax return or otherwise, the 
  7.26  commissioner may issue separate checks to each person.  The 
  7.27  amount payable to each person is one-half of the total joint 
  7.28  rebate. 
  7.29     (j) The sales tax rebate is a "Minnesota tax law" for 
  7.30  purposes of Minnesota Statutes, section 270B.01, subdivision 8. 
  7.31     (k) The sales tax rebate is "an overpayment of any tax 
  7.32  collected by the commissioner" for purposes of Minnesota 
  7.33  Statutes, section 270.07, subdivision 5.  For purposes of this 
  7.34  paragraph, a joint sales tax rebate is payable to each spouse 
  7.35  equally. 
  7.36     (l) If the commissioner of revenue cannot locate an 
  8.1   individual entitled to a sales tax rebate by July 1, 2001, or if 
  8.2   an individual to whom a sales tax rebate was issued has not 
  8.3   cashed the check by July 1, 2001, the right to the sales tax 
  8.4   rebate lapses and the check must be deposited in the general 
  8.5   fund. 
  8.6      (m) Individuals entitled to a sales tax rebate pursuant to 
  8.7   paragraph (a), but who did not receive one, and individuals who 
  8.8   receive a sales tax rebate that was not correctly computed, must 
  8.9   file a claim with the commissioner before July 1, 2000, in a 
  8.10  form prescribed by the commissioner.  These claims must be 
  8.11  treated as if they are a claim for refund under Minnesota 
  8.12  Statutes, section 289A.50, subdivisions 4 and 7. 
  8.13     (n) The sales tax rebate is a refund subject to revenue 
  8.14  recapture under Minnesota Statutes, chapter 270A.  The 
  8.15  commissioner of revenue shall remit the entire refund to the 
  8.16  claimant agency, which shall, upon the request of the spouse who 
  8.17  does not owe the debt, refund one-half of the joint sales tax 
  8.18  rebate to the spouse who does not owe the debt. 
  8.19     (o) The rebate is a reduction of fiscal year 1999 sales tax 
  8.20  revenues.  The amount necessary to make the sales tax rebates 
  8.21  and interest provided in this section is appropriated from the 
  8.22  general fund to the commissioner of revenue in fiscal year 1999 
  8.23  and is available until June 30, 2001. 
  8.24     (p) If a sales tax rebate check is cashed by someone other 
  8.25  than the payee or payees of the check, and the commissioner of 
  8.26  revenue determines that the check has been forged or improperly 
  8.27  endorsed, the commissioner may issue an order of assessment for 
  8.28  the amount of the check against the person or persons cashing 
  8.29  it.  The assessment must be made within two years after the 
  8.30  check is cashed, but if cashing the check constitutes theft 
  8.31  under Minnesota Statutes, section 609.52, or forgery under 
  8.32  Minnesota Statutes, section 609.631, the assessment can be made 
  8.33  at any time.  The assessment may be appealed administratively 
  8.34  and judicially.  The commissioner may take action to collect the 
  8.35  assessment in the same manner as provided by Minnesota Statutes, 
  8.36  chapter 289A, for any other order of the commissioner assessing 
  9.1   tax. 
  9.2      (q) Notwithstanding Minnesota Statutes, sections 9.031, 
  9.3   16A.40, 16B.49, 16B.50, and any other law to the contrary, the 
  9.4   commissioner of revenue may take whatever actions the 
  9.5   commissioner deems necessary to pay the rebates required by this 
  9.6   section, and may, in consultation with the commissioner of 
  9.7   finance and the state treasurer, contract with a private vendor 
  9.8   or vendors to process, print, and mail the rebate checks or 
  9.9   warrants required under this section and receive and disburse 
  9.10  state funds to pay those checks or warrants. 
  9.11     (r) The commissioner may pay rebates required by this 
  9.12  section by electronic funds transfer to individuals who 
  9.13  requested that their 1998 individual income tax refund be paid 
  9.14  through electronic funds transfer.  The commissioner may make 
  9.15  the electronic funds transfer payments to the same financial 
  9.16  institution and into the same account as the 1998 individual 
  9.17  income tax refund. 
  9.18     Sec. 3.  [APPROPRIATIONS.] 
  9.19     $1,257,000 is appropriated from the general fund to the 
  9.20  commissioner of revenue to administer the sales tax rebate for 
  9.21  fiscal year 1999.  Any unencumbered balance remaining on June 
  9.22  30, 1999, does not cancel but is available for expenditure by 
  9.23  the commissioner of revenue until June 30, 2001.  This is a 
  9.24  one-time appropriation and may not be added to the agency's 
  9.25  budget base. 
  9.26     Sec. 4.  [EFFECTIVE DATE.] 
  9.27     Sections 1 to 3 are effective the day following final 
  9.28  enactment. 
  9.29                             ARTICLE 2
  9.30                     INCOME AND FRANCHISE TAXES 
  9.31     Section 1.  Minnesota Statutes 1998, section 16D.09, is 
  9.32  amended to read: 
  9.33     16D.09 [UNCOLLECTIBLE DEBTS.] 
  9.34     Subdivision 1.  [GENERALLY.] When a debt is determined by a 
  9.35  state agency to be uncollectible, the debt may be written off by 
  9.36  the state agency from the state agency's financial accounting 
 10.1   records and no longer recognized as an account receivable for 
 10.2   financial reporting purposes.  A debt is considered to be 
 10.3   uncollectible when (1) all reasonable collection efforts have 
 10.4   been exhausted, (2) the cost of further collection action will 
 10.5   exceed the amount recoverable, (3) the debt is legally without 
 10.6   merit or cannot be substantiated by evidence, (4) the debtor 
 10.7   cannot be located, (5) the available assets or income, current 
 10.8   or anticipated, that may be available for payment of the debt 
 10.9   are insufficient, (6) the debt has been discharged in 
 10.10  bankruptcy, (7) the applicable statute of limitations for 
 10.11  collection of the debt has expired, or (8) it is not in the 
 10.12  public interest to pursue collection of the debt.  The 
 10.13  determination of the uncollectibility of a debt must be reported 
 10.14  by the state agency along with the basis for that decision as 
 10.15  part of its quarterly reports to the commissioner of finance.  
 10.16  Determining that the debt is uncollectible does not cancel the 
 10.17  legal obligation of the debtor to pay the debt, except in the 
 10.18  case of a debt related to a tax liability that is canceled by 
 10.19  the department of revenue.  
 10.20     Subd. 2.  [NOTIFICATION OF ACTION BY DEPARTMENT OF 
 10.21  REVENUE.] When the department of revenue has determined that a 
 10.22  debt is uncollectible and has written off that debt as provided 
 10.23  in subdivision 1, the commissioner of revenue must make a 
 10.24  reasonable attempt to notify the debtor of that action and of 
 10.25  the release of any liens imposed under section 270.69 related to 
 10.26  that debt, within 30 days after the determination has been 
 10.27  reported to the commissioner of finance. 
 10.28     Sec. 2.  Minnesota Statutes 1998, section 290.01, 
 10.29  subdivision 7, is amended to read: 
 10.30     Subd. 7.  [RESIDENT.] The term "resident" means (1) any 
 10.31  individual domiciled in Minnesota, except that an individual is 
 10.32  not a "resident" for the period of time that the individual is a 
 10.33  "qualified individual" as defined in section 911(d)(1) of the 
 10.34  Internal Revenue Code, if the qualified individual notifies the 
 10.35  county within three months of moving out of the country that 
 10.36  homestead status be revoked for the Minnesota residence of the 
 11.1   qualified individual, and the property is not classified as a 
 11.2   homestead while the individual remains a qualified individual; 
 11.3   and (2) any individual domiciled outside the state who maintains 
 11.4   a place of abode in the state and spends in the aggregate more 
 11.5   than one-half of the tax year in Minnesota, unless the 
 11.6   individual or the spouse of the individual is in the armed 
 11.7   forces of the United States, or the individual is covered under 
 11.8   the reciprocity provisions in section 290.081. 
 11.9      For purposes of this subdivision, presence within the state 
 11.10  for any part of a calendar day constitutes a day spent in the 
 11.11  state.  Individuals shall keep adequate records to substantiate 
 11.12  the days spent outside the state. 
 11.13     The term "abode" means a dwelling maintained by an 
 11.14  individual, whether or not owned by the individual and whether 
 11.15  or not occupied by the individual, and includes a dwelling place 
 11.16  owned or leased by the individual's spouse. 
 11.17     Neither the commissioner nor any court shall consider 
 11.18  charitable contributions made by an individual within or without 
 11.19  the state in determining if the individual is domiciled in 
 11.20  Minnesota. 
 11.21     Sec. 3.  Minnesota Statutes 1998, section 290.01, 
 11.22  subdivision 19a, is amended to read: 
 11.23     Subd. 19a.  [ADDITIONS TO FEDERAL TAXABLE INCOME.] For 
 11.24  individuals, estates, and trusts, there shall be added to 
 11.25  federal taxable income: 
 11.26     (1)(i) interest income on obligations of any state other 
 11.27  than Minnesota or a political or governmental subdivision, 
 11.28  municipality, or governmental agency or instrumentality of any 
 11.29  state other than Minnesota exempt from federal income taxes 
 11.30  under the Internal Revenue Code or any other federal statute, 
 11.31  and 
 11.32     (ii) exempt-interest dividends as defined in section 
 11.33  852(b)(5) of the Internal Revenue Code, except the portion of 
 11.34  the exempt-interest dividends derived from interest income on 
 11.35  obligations of the state of Minnesota or its political or 
 11.36  governmental subdivisions, municipalities, governmental agencies 
 12.1   or instrumentalities, but only if the portion of the 
 12.2   exempt-interest dividends from such Minnesota sources paid to 
 12.3   all shareholders represents 95 percent or more of the 
 12.4   exempt-interest dividends that are paid by the regulated 
 12.5   investment company as defined in section 851(a) of the Internal 
 12.6   Revenue Code, or the fund of the regulated investment company as 
 12.7   defined in section 851(g) of the Internal Revenue Code, making 
 12.8   the payment; and 
 12.9      (iii) for the purposes of items (i) and (ii), interest on 
 12.10  obligations of an Indian tribal government described in section 
 12.11  7871(c) of the Internal Revenue Code shall be treated as 
 12.12  interest income on obligations of the state in which the tribe 
 12.13  is located; 
 12.14     (2) the amount of income taxes paid or accrued within the 
 12.15  taxable year under this chapter and income taxes paid to any 
 12.16  other state or to any province or territory of Canada, to the 
 12.17  extent allowed as a deduction under section 63(d) of the 
 12.18  Internal Revenue Code, but the addition may not be more than the 
 12.19  amount by which the itemized deductions as allowed under section 
 12.20  63(d) of the Internal Revenue Code exceeds the amount of the 
 12.21  standard deduction as defined in section 63(c) of the Internal 
 12.22  Revenue Code.  For the purpose of this paragraph, the 
 12.23  disallowance of itemized deductions under section 68 of the 
 12.24  Internal Revenue Code of 1986, income tax is the last itemized 
 12.25  deduction disallowed; 
 12.26     (3) the capital gain amount of a lump sum distribution to 
 12.27  which the special tax under section 1122(h)(3)(B)(ii) of the Tax 
 12.28  Reform Act of 1986, Public Law Number 99-514, applies; 
 12.29     (4) the amount of income taxes paid or accrued within the 
 12.30  taxable year under this chapter and income taxes paid to any 
 12.31  other state or any province or territory of Canada, to the 
 12.32  extent allowed as a deduction in determining federal adjusted 
 12.33  gross income.  For the purpose of this paragraph, income taxes 
 12.34  do not include the taxes imposed by sections 290.0922, 
 12.35  subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729; 
 12.36     (5) the amount of loss or expense included in federal 
 13.1   taxable income under section 1366 of the Internal Revenue Code 
 13.2   flowing from a corporation that has a valid election in effect 
 13.3   for the taxable year under section 1362 of the Internal Revenue 
 13.4   Code, but which is not allowed to be an "S" corporation under 
 13.5   section 290.9725; 
 13.6      (6) the amount of any distributions in cash or property 
 13.7   made to a shareholder during the taxable year by a corporation 
 13.8   that has a valid election in effect for the taxable year under 
 13.9   section 1362 of the Internal Revenue Code, but which is not 
 13.10  allowed to be an "S" corporation under section 290.9725 to the 
 13.11  extent not already included in federal taxable income under 
 13.12  section 1368 of the Internal Revenue Code; 
 13.13     (7) in the year stock of a corporation that had made a 
 13.14  valid election under section 1362 of the Internal Revenue Code 
 13.15  but was not an "S" corporation under section 290.9725 is sold or 
 13.16  disposed of in a transaction taxable under the Internal Revenue 
 13.17  Code, the amount of difference between the Minnesota basis of 
 13.18  the stock under subdivision 19f, paragraph (m), and the federal 
 13.19  basis if the Minnesota basis is lower than the shareholder's 
 13.20  federal basis; 
 13.21     (8) (5) the amount of expense, interest, or taxes 
 13.22  disallowed pursuant to section 290.10; and 
 13.23     (9) (6) the amount of a partner's pro rata share of net 
 13.24  income which does not flow through to the partner because the 
 13.25  partnership elected to pay the tax on the income under section 
 13.26  6242(a)(2) of the Internal Revenue Code. 
 13.27     Sec. 4.  Minnesota Statutes 1998, section 290.01, 
 13.28  subdivision 19b, is amended to read: 
 13.29     Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
 13.30  individuals, estates, and trusts, there shall be subtracted from 
 13.31  federal taxable income: 
 13.32     (1) interest income on obligations of any authority, 
 13.33  commission, or instrumentality of the United States to the 
 13.34  extent includable in taxable income for federal income tax 
 13.35  purposes but exempt from state income tax under the laws of the 
 13.36  United States; 
 14.1      (2) if included in federal taxable income, the amount of 
 14.2   any overpayment of income tax to Minnesota or to any other 
 14.3   state, for any previous taxable year, whether the amount is 
 14.4   received as a refund or as a credit to another taxable year's 
 14.5   income tax liability; 
 14.6      (3) the amount paid to others, less the credit allowed 
 14.7   under section 290.0674, not to exceed $1,625 for each dependent 
 14.8   qualifying child in grades kindergarten to 6 and $2,500 for each 
 14.9   dependent qualifying child in grades 7 to 12, for tuition, 
 14.10  textbooks, and transportation of each dependent qualifying child 
 14.11  in attending an elementary or secondary school situated in 
 14.12  Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, 
 14.13  wherein a resident of this state may legally fulfill the state's 
 14.14  compulsory attendance laws, which is not operated for profit, 
 14.15  and which adheres to the provisions of the Civil Rights Act of 
 14.16  1964 and chapter 363.  For the purposes of this clause, 
 14.17  "tuition" includes fees or tuition as defined in section 
 14.18  290.0674, subdivision 1, clause (1).  As used in this clause, 
 14.19  "textbooks" includes books and other instructional materials and 
 14.20  equipment used in elementary and secondary schools in teaching 
 14.21  only those subjects legally and commonly taught in public 
 14.22  elementary and secondary schools in this state.  Equipment 
 14.23  expenses qualifying for deduction includes expenses as defined 
 14.24  and limited in section 290.0674, subdivision 1, clause (3).  
 14.25  "Textbooks" does not include instructional books and materials 
 14.26  used in the teaching of religious tenets, doctrines, or worship, 
 14.27  the purpose of which is to instill such tenets, doctrines, or 
 14.28  worship, nor does it include books or materials for, or 
 14.29  transportation to, extracurricular activities including sporting 
 14.30  events, musical or dramatic events, speech activities, driver's 
 14.31  education, or similar programs.  For purposes of the subtraction 
 14.32  provided by this clause, "qualifying child" has the meaning 
 14.33  given in section 32(c)(3) of the Internal Revenue Code; 
 14.34     (4) contributions made in taxable years beginning after 
 14.35  December 31, 1981, and before January 1, 1985, to the extent 
 14.36  included in federal taxable income, distributions from a 
 15.1   qualified governmental pension plan, an individual retirement 
 15.2   account, simplified employee pension, or qualified plan covering 
 15.3   a self-employed person that represent a return of contributions 
 15.4   that were included in Minnesota gross income in the taxable year 
 15.5   for which the contributions were made but were deducted or were 
 15.6   not included in the computation of federal adjusted gross 
 15.7   income.  The distribution shall be allocated first to return of 
 15.8   contributions until the contributions included in Minnesota 
 15.9   gross income have been exhausted, less any amount allowed to be 
 15.10  subtracted as a distribution under this subdivision or a 
 15.11  predecessor provision in taxable years that began before January 
 15.12  1, 2000.  This subtraction applies only to contributions made in 
 15.13  a taxable year prior to 1985 for taxable years beginning after 
 15.14  December 31, 1999, and before January 1, 2001; 
 15.15     (5) income as provided under section 290.0802; 
 15.16     (6) the amount of unrecovered accelerated cost recovery 
 15.17  system deductions allowed under subdivision 19g; 
 15.18     (7) to the extent included in federal adjusted gross 
 15.19  income, income realized on disposition of property exempt from 
 15.20  tax under section 290.491; 
 15.21     (8) to the extent not deducted in determining federal 
 15.22  taxable income, the amount paid for health insurance of 
 15.23  self-employed individuals as determined under section 162(l) of 
 15.24  the Internal Revenue Code, except that the 25 percent limit does 
 15.25  not apply.  If the taxpayer deducted insurance payments under 
 15.26  section 213 of the Internal Revenue Code of 1986, the 
 15.27  subtraction under this clause must be reduced by the lesser of: 
 15.28     (i) the total itemized deductions allowed under section 
 15.29  63(d) of the Internal Revenue Code, less state, local, and 
 15.30  foreign income taxes deductible under section 164 of the 
 15.31  Internal Revenue Code and the standard deduction under section 
 15.32  63(c) of the Internal Revenue Code; or 
 15.33     (ii) the lesser of (A) the amount of insurance qualifying 
 15.34  as "medical care" under section 213(d) of the Internal Revenue 
 15.35  Code to the extent not deducted under section 162(1) of the 
 15.36  Internal Revenue Code or excluded from income or (B) the total 
 16.1   amount deductible for medical care under section 213(a); 
 16.2      (9) the exemption amount allowed under Laws 1995, chapter 
 16.3   255, article 3, section 2, subdivision 3; 
 16.4      (10) to the extent included in federal taxable income, 
 16.5   postservice benefits for youth community service under section 
 16.6   124D.42 for volunteer service under United States Code, title 
 16.7   42, section 5011(d), as amended; 
 16.8      (11) to the extent not subtracted under clause (1), the 
 16.9   amount of income or gain included in federal taxable income 
 16.10  under section 1366 of the Internal Revenue Code flowing from a 
 16.11  corporation that has a valid election in effect for the taxable 
 16.12  year under section 1362 of the Internal Revenue Code which is 
 16.13  not allowed to be an "S" corporation under section 290.9725; 
 16.14     (12) in the year stock of a corporation that had made a 
 16.15  valid election under section 1362 of the Internal Revenue Code 
 16.16  but was not an "S" corporation under section 290.9725 is sold or 
 16.17  disposed of in a transaction taxable under the Internal Revenue 
 16.18  Code, the amount of difference between the Minnesota basis of 
 16.19  the stock under subdivision 19f, paragraph (m), and the federal 
 16.20  basis if the Minnesota basis is higher than the shareholder's 
 16.21  federal basis; and 
 16.22     (13) an amount equal to an individual's, trust's, or 
 16.23  estate's net federal income tax liability for the tax year that 
 16.24  is attributable to items of income, expense, gain, loss, or 
 16.25  credits federally flowing to the taxpayer in the tax year from a 
 16.26  corporation, having a valid election in effect for federal tax 
 16.27  purposes under section 1362 of the Internal Revenue Code but not 
 16.28  treated as an "S" corporation for state tax purposes under 
 16.29  section 290.9725. 
 16.30     (11) to the extent not deducted in determining federal 
 16.31  taxable income by an individual who does not itemize deductions 
 16.32  for federal income tax purposes for the taxable year, an amount 
 16.33  equal to 50 percent of the excess of charitable contributions 
 16.34  allowable as a deduction for the taxable year under section 
 16.35  170(a) of the Internal Revenue Code over $500; and 
 16.36     (12) to the extent included in federal taxable income, 
 17.1   holocaust victims' settlement payments for any injury incurred 
 17.2   as a result of the holocaust, if received by an individual who 
 17.3   was persecuted for racial or religious reasons by Nazi Germany 
 17.4   or any other Axis regime or an heir of such a person. 
 17.5      Sec. 5.  Minnesota Statutes 1998, section 290.01, 
 17.6   subdivision 19f, is amended to read: 
 17.7      Subd. 19f.  [BASIS MODIFICATIONS AFFECTING GAIN OR LOSS ON 
 17.8   DISPOSITION OF PROPERTY.] (a) For individuals, estates, and 
 17.9   trusts, the basis of property is its adjusted basis for federal 
 17.10  income tax purposes except as set forth in paragraphs (f), (g), 
 17.11  and (m).  For corporations, the basis of property is its 
 17.12  adjusted basis for federal income tax purposes, without regard 
 17.13  to the time when the property became subject to tax under this 
 17.14  chapter or to whether out-of-state losses or items of tax 
 17.15  preference with respect to the property were not deductible 
 17.16  under this chapter, except that the modifications to the basis 
 17.17  for federal income tax purposes set forth in paragraphs (b) to 
 17.18  (j) are allowed to corporations, and the resulting modifications 
 17.19  to federal taxable income must be made in the year in which gain 
 17.20  or loss on the sale or other disposition of property is 
 17.21  recognized. 
 17.22     (b) The basis of property shall not be reduced to reflect 
 17.23  federal investment tax credit.  
 17.24     (c) The basis of property subject to the accelerated cost 
 17.25  recovery system under section 168 of the Internal Revenue Code 
 17.26  shall be modified to reflect the modifications in depreciation 
 17.27  with respect to the property provided for in subdivision 19e.  
 17.28  For certified pollution control facilities for which 
 17.29  amortization deductions were elected under section 169 of the 
 17.30  Internal Revenue Code of 1954, the basis of the property must be 
 17.31  increased by the amount of the amortization deduction not 
 17.32  previously allowed under this chapter. 
 17.33     (d) For property acquired before January 1, 1933, the basis 
 17.34  for computing a gain is the fair market value of the property as 
 17.35  of that date.  The basis for determining a loss is the cost of 
 17.36  the property to the taxpayer less any depreciation, 
 18.1   amortization, or depletion, actually sustained before that 
 18.2   date.  If the adjusted cost exceeds the fair market value of the 
 18.3   property, then the basis is the adjusted cost regardless of 
 18.4   whether there is a gain or loss.  
 18.5      (e) The basis is reduced by the allowance for amortization 
 18.6   of bond premium if an election to amortize was made pursuant to 
 18.7   Minnesota Statutes 1986, section 290.09, subdivision 13, and the 
 18.8   allowance could have been deducted by the taxpayer under this 
 18.9   chapter during the period of the taxpayer's ownership of the 
 18.10  property.  
 18.11     (f) For assets placed in service before January 1, 1987, 
 18.12  corporations, partnerships, or individuals engaged in the 
 18.13  business of mining ores other than iron ore or taconite 
 18.14  concentrates subject to the occupation tax under chapter 298 
 18.15  must use the occupation tax basis of property used in that 
 18.16  business. 
 18.17     (g) For assets placed in service before January 1, 1990, 
 18.18  corporations, partnerships, or individuals engaged in the 
 18.19  business of mining iron ore or taconite concentrates subject to 
 18.20  the occupation tax under chapter 298 must use the occupation tax 
 18.21  basis of property used in that business.  
 18.22     (h) In applying the provisions of sections 301(c)(3)(B), 
 18.23  312(f) and (g), and 316(a)(1) of the Internal Revenue Code, the 
 18.24  dates December 31, 1932, and January 1, 1933, shall be 
 18.25  substituted for February 28, 1913, and March 1, 1913, 
 18.26  respectively.  
 18.27     (i) In applying the provisions of section 362(a) and (c) of 
 18.28  the Internal Revenue Code, the date December 31, 1956, shall be 
 18.29  substituted for June 22, 1954.  
 18.30     (j) The basis of property shall be increased by the amount 
 18.31  of intangible drilling costs not previously allowed due to 
 18.32  differences between this chapter and the Internal Revenue Code.  
 18.33     (k) The adjusted basis of any corporate partner's interest 
 18.34  in a partnership is the same as the adjusted basis for federal 
 18.35  income tax purposes modified as required to reflect the basis 
 18.36  modifications set forth in paragraphs (b) to (j).  The adjusted 
 19.1   basis of a partnership in which the partner is an individual, 
 19.2   estate, or trust is the same as the adjusted basis for federal 
 19.3   income tax purposes modified as required to reflect the basis 
 19.4   modifications set forth in paragraphs (f) and (g).  
 19.5      (l) The modifications contained in paragraphs (b) to (j) 
 19.6   also apply to the basis of property that is determined by 
 19.7   reference to the basis of the same property in the hands of a 
 19.8   different taxpayer or by reference to the basis of different 
 19.9   property.  
 19.10     (m) If a corporation has a valid election in effect for the 
 19.11  taxable year under section 1362 of the Internal Revenue Code, 
 19.12  but is not allowed to be an "S" corporation under section 
 19.13  290.9725, and the corporation is liquidated or the individual 
 19.14  shareholder disposes of the stock, the Minnesota basis in the 
 19.15  shareholder's stock in the corporation shall be computed as if 
 19.16  the corporation were not an "S" corporation for federal tax 
 19.17  purposes. 
 19.18     Sec. 6.  Minnesota Statutes 1998, section 290.01, 
 19.19  subdivision 19g, is amended to read: 
 19.20     Subd. 19g.  [ACRS MODIFICATION FOR INDIVIDUALS.] (a) An 
 19.21  individual is allowed a subtraction from federal taxable income 
 19.22  for the amount of accelerated cost recovery system deductions 
 19.23  that were added to federal adjusted gross income in computing 
 19.24  Minnesota gross income for taxable year 1981, 1982, 1983, or 
 19.25  1984 and that were not deducted in a later taxable year 
 19.26  beginning before January 1, 2000.  The deduction is 
 19.27  allowed beginning in the first taxable year after the entire 
 19.28  allowable deduction for the property has been allowed under 
 19.29  federal law or the first taxable year beginning after December 
 19.30  31, 1987, whichever is later 1999.  The amount of the 
 19.31  deduction is computed by deducting equals the amount added to 
 19.32  federal adjusted gross income in computing Minnesota gross 
 19.33  income, (less any: 
 19.34     (1) deduction allowed allowable under Minnesota Statutes 
 19.35  1986, section 290.01, subdivision 20f) in equal annual amounts 
 19.36  over five years.; and 
 20.1      (2) amount allowable as a subtraction under this 
 20.2   subdivision in a taxable year beginning before January 1, 2000. 
 20.3      This paragraph does not apply to property that was sold or 
 20.4   exchanged in a taxable year beginning before January 1, 2001. 
 20.5      (b) In the event of a sale or exchange of the 
 20.6   property occurring during a taxable year beginning after 
 20.7   December 31, 1999, and before January 1, 2001, a deduction is 
 20.8   allowed equal to the lesser of (1) the remaining amount that 
 20.9   would be allowed as a deduction under paragraph (a) or (2) the 
 20.10  amount of capital gain recognized and the amount of cost 
 20.11  recovery deductions that were subject to recapture under 
 20.12  sections 1245 and 1250 of the Internal Revenue Code of 1986 for 
 20.13  the taxable year. 
 20.14     (c) In the case of a corporation treated as an "S" 
 20.15  corporation under section 290.9725, the amount of the 
 20.16  corporation's cost recovery allowances that have been deducted 
 20.17  in computing federal tax, but have been added to federal taxable 
 20.18  income or not deducted in computing tax under this chapter as a 
 20.19  result of the application of subdivision 19e, paragraphs (a) and 
 20.20  (c) or Minnesota Statutes 1986, section 290.09, subdivision 7, 
 20.21  is allowed as a deduction to the shareholders under the 
 20.22  provisions of paragraph (a). 
 20.23     Sec. 7.  Minnesota Statutes 1998, section 290.01, is 
 20.24  amended by adding a subdivision to read: 
 20.25     Subd. 32.  [HOLOCAUST SETTLEMENT PAYMENTS.] "Holocaust 
 20.26  victims' settlement payments" means: 
 20.27     (1) a payment received as a result of settlement of the 
 20.28  action entitled In re Holocaust Victims' Asset Litigation, in 
 20.29  United States district court for the eastern district of New 
 20.30  York, C.A. No. 96-4849; 
 20.31     (2) any amount received under the German Act Regulating 
 20.32  Unresolved Property Claims or any other foreign law providing 
 20.33  for payments for holocaust claims; and 
 20.34     (3) a payment received as a result of the settlement of a 
 20.35  holocaust claim not described in clause (1) or (2), including an 
 20.36  insurance claim, a claim relating to looted art or financial 
 21.1   assets, and a claim relating to slave labor wages. 
 21.2      Sec. 8.  Minnesota Statutes 1998, section 290.06, 
 21.3   subdivision 2c, is amended to read: 
 21.4      Subd. 2c.  [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 
 21.5   AND TRUSTS.] (a) The income taxes imposed by this chapter upon 
 21.6   married individuals filing joint returns and surviving spouses 
 21.7   as defined in section 2(a) of the Internal Revenue Code must be 
 21.8   computed by applying to their taxable net income the following 
 21.9   schedule of rates: 
 21.10     (1) On the first $19,910 $25,220, 6 5.5 percent; 
 21.11     (2) On all over $19,910 $25,220, but not 
 21.12  over $79,120 $100,200, 8 7.25 percent; 
 21.13     (3) On all over $79,120 $100,200, 8.5 8 percent. 
 21.14     Married individuals filing separate returns, estates, and 
 21.15  trusts must compute their income tax by applying the above rates 
 21.16  to their taxable income, except that the income brackets will be 
 21.17  one-half of the above amounts.  
 21.18     (b) The income taxes imposed by this chapter upon unmarried 
 21.19  individuals must be computed by applying to taxable net income 
 21.20  the following schedule of rates: 
 21.21     (1) On the first $13,620 $17,250, 6 5.5 percent; 
 21.22     (2) On all over $13,620 $17,250, but not 
 21.23  over $44,750 $56,680, 8 7.25 percent; 
 21.24     (3) On all over $44,750 $56,680, 8.5 8 percent. 
 21.25     (c) The income taxes imposed by this chapter upon unmarried 
 21.26  individuals qualifying as a head of household as defined in 
 21.27  section 2(b) of the Internal Revenue Code must be computed by 
 21.28  applying to taxable net income the following schedule of rates: 
 21.29     (1) On the first $16,770 $21,240, 6 5.5 percent; 
 21.30     (2) On all over $16,770 $21,240, but not 
 21.31  over $67,390 $85,350, 8 7.25 percent; 
 21.32     (3) On all over $67,390 $85,350, 8.5 8 percent. 
 21.33     (d) In lieu of a tax computed according to the rates set 
 21.34  forth in this subdivision, the tax of any individual taxpayer 
 21.35  whose taxable net income for the taxable year is less than an 
 21.36  amount determined by the commissioner must be computed in 
 22.1   accordance with tables prepared and issued by the commissioner 
 22.2   of revenue based on income brackets of not more than $100.  The 
 22.3   amount of tax for each bracket shall be computed at the rates 
 22.4   set forth in this subdivision, provided that the commissioner 
 22.5   may disregard a fractional part of a dollar unless it amounts to 
 22.6   50 cents or more, in which case it may be increased to $1. 
 22.7      (e) An individual who is not a Minnesota resident for the 
 22.8   entire year must compute the individual's Minnesota income tax 
 22.9   as provided in this subdivision.  After the application of the 
 22.10  nonrefundable credits provided in this chapter, the tax 
 22.11  liability must then be multiplied by a fraction in which:  
 22.12     (1) the numerator is the individual's Minnesota source 
 22.13  federal adjusted gross income as defined in section 62 of the 
 22.14  Internal Revenue Code disregarding income or loss flowing from a 
 22.15  corporation having a valid election for the taxable year under 
 22.16  section 1362 of the Internal Revenue Code but which is not an 
 22.17  "S" corporation under section 290.9725 and increased by the 
 22.18  additions required under section 290.01, subdivision 19a, 
 22.19  clauses (1) and (9) (6), after applying the allocation and 
 22.20  assignability provisions of section 290.081, clause (a), or 
 22.21  290.17; and 
 22.22     (2) the denominator is the individual's federal adjusted 
 22.23  gross income as defined in section 62 of the Internal Revenue 
 22.24  Code of 1986, increased by the amounts specified in section 
 22.25  290.01, subdivision 19a, clauses (1), (5), (6), (7), and 
 22.26  (9) (6), and reduced by the amounts specified in section 290.01, 
 22.27  subdivision 19b, clauses clause (1), (11), and (12). 
 22.28     Sec. 9.  Minnesota Statutes 1998, section 290.06, 
 22.29  subdivision 2d, is amended to read: 
 22.30     Subd. 2d.  [INFLATION ADJUSTMENT OF BRACKETS.] (a) For 
 22.31  taxable years beginning after December 31, 1991 1999, the 
 22.32  minimum and maximum dollar amounts for each rate bracket for 
 22.33  which a tax is imposed in subdivision 2c shall be adjusted for 
 22.34  inflation by the percentage determined under paragraph (b).  For 
 22.35  the purpose of making the adjustment as provided in this 
 22.36  subdivision all of the rate brackets provided in subdivision 2c 
 23.1   shall be the rate brackets as they existed for taxable years 
 23.2   beginning after December 31, 1990 1998, and before January 
 23.3   1, 1992 2000.  The rate applicable to any rate bracket must not 
 23.4   be changed.  The dollar amounts setting forth the tax shall be 
 23.5   adjusted to reflect the changes in the rate brackets.  The rate 
 23.6   brackets as adjusted must be rounded to the nearest $10 amount.  
 23.7   If the rate bracket ends in $5, it must be rounded up to the 
 23.8   nearest $10 amount.  
 23.9      (b) The commissioner shall adjust the rate brackets and by 
 23.10  the percentage determined pursuant to the provisions of section 
 23.11  1(f) of the Internal Revenue Code, except that in section 
 23.12  1(f)(3)(B) the word "1990 1998" shall be substituted for the 
 23.13  word "1987 1992."  For 1991 2000, the commissioner shall then 
 23.14  determine the percent change from the 12 months ending on August 
 23.15  31, 1990 1998, to the 12 months ending on August 31, 1991 1999, 
 23.16  and in each subsequent year, from the 12 months ending on August 
 23.17  31, 1990 1998, to the 12 months ending on August 31 of the year 
 23.18  preceding the taxable year.  The determination of the 
 23.19  commissioner pursuant to this subdivision shall not be 
 23.20  considered a "rule" and shall not be subject to the 
 23.21  Administrative Procedure Act contained in chapter 14.  
 23.22     No later than December 15 of each year, the commissioner 
 23.23  shall announce the specific percentage that will be used to 
 23.24  adjust the tax rate brackets. 
 23.25     Sec. 10.  Minnesota Statutes 1998, section 290.06, is 
 23.26  amended by adding a subdivision to read: 
 23.27     Subd. 26.  [BANK S CORPORATIONS.] A shareholder of an S 
 23.28  corporation subject to tax under section 290.9725, clause (2), 
 23.29  is allowed a credit against the tax imposed under this chapter.  
 23.30  The credit equals 80 percent of the tax apportioned to the 
 23.31  shareholder under section 290.9726, subdivision 7, for the 
 23.32  taxable year.  
 23.33     Sec. 11.  Minnesota Statutes 1998, section 290.06, is 
 23.34  amended by adding a subdivision to read: 
 23.35     Subd. 27.  [TAX PAID TO ANOTHER STATE; CORPORATIONS.] (a) A 
 23.36  credit is allowed against the tax imposed under subdivision 1 
 24.1   for tax paid to another state based on net income.  The credit 
 24.2   must be claimed in a manner prescribed by the commissioner.  
 24.3      (b) The amount of the credit equals the amount of 
 24.4   qualifying tax paid to the other state for the taxable year, 
 24.5   multiplied by the taxpayer's apportionment percentage under 
 24.6   section 290.191.  If the item of income or gain is assigned to 
 24.7   Minnesota as nonbusiness income, the entire amount of the 
 24.8   qualifying tax is allowed as a credit.  The maximum amount of 
 24.9   the credit is limited to the tax liability under subdivision 1 
 24.10  for the taxable year and, in no case, may the credit exceed the 
 24.11  reduction in the amount of tax under subdivision 1 if the item 
 24.12  of income or gain were excluded from net income. 
 24.13     (c) For purposes of this subdivision, "qualifying tax" 
 24.14  means the amount of tax paid to another state on an item of 
 24.15  income or gain for the taxable year, if: 
 24.16     (1) the law of another state requires and the taxpayer 
 24.17  assigns the entire amount of the income or gain to one other 
 24.18  state; and 
 24.19     (2) the income or gain is included in the measure of the 
 24.20  exercise of the corporate franchise that is taxable under 
 24.21  subdivision 1.  
 24.22     (d) The amount of tax paid to another state on an item of 
 24.23  income or gain is the difference between the tax paid to the 
 24.24  state and the amount of tax that would have been paid to the 
 24.25  state if the item of income or gain had not been included in the 
 24.26  net income of that state. 
 24.27     (e) The taxpayer must report to the commissioner of revenue 
 24.28  any change in tax in the other state, the change in qualifying 
 24.29  tax, and a copy of the final determination of the tax by the 
 24.30  taxing authority of the other state.  A taxpayer who claims the 
 24.31  credit consents to extend the period of limitation for the 
 24.32  commissioner to recompute the credit and reassess the tax due, 
 24.33  including a refund, for a period of one year following a report 
 24.34  by the taxpayer of a final determination of tax by the state in 
 24.35  which the entire amount of income or gain is reported, 
 24.36  notwithstanding any period of limitations to the contrary, or 
 25.1   within any applicable period of limitations, whichever is 
 25.2   longer.  If a taxpayer fails to report as required by this 
 25.3   paragraph, the commissioner may recompute the tax, including a 
 25.4   refund, based on the information available to the commissioner.  
 25.5   The tax may be recomputed within six years after the report 
 25.6   should have been filed, notwithstanding any period of 
 25.7   limitations to the contrary. 
 25.8      Sec. 12.  Minnesota Statutes 1998, section 290.0671, 
 25.9   subdivision 1, is amended to read: 
 25.10     Subdivision 1.  [CREDIT ALLOWED.] (a) An individual is 
 25.11  allowed a credit against the tax imposed by this chapter equal 
 25.12  to a percentage of earned income.  To receive a credit, a 
 25.13  taxpayer must be eligible for a credit under section 32 of the 
 25.14  Internal Revenue Code.  
 25.15     (b) For individuals with no qualifying children, the credit 
 25.16  equals 1.1475 percent of the first $4,460 of earned income.  The 
 25.17  credit is reduced by 1.1475 percent of earned income or modified 
 25.18  adjusted gross income, whichever is greater, in excess of 
 25.19  $5,570, but in no case is the credit less than zero. 
 25.20     (c) For individuals with one qualifying child, the credit 
 25.21  equals 6.8 7.45 percent of the first $6,680 of earned income and 
 25.22  8.5 percent of earned income over $11,650 but less than $12,990. 
 25.23  The credit is reduced by 4.77 5.13 percent of earned income or 
 25.24  modified adjusted gross income, whichever is greater, in excess 
 25.25  of $14,560, but in no case is the credit less than zero. 
 25.26     (d) For individuals with two or more qualifying children, 
 25.27  the credit equals eight 8.8 percent of the first $9,390 of 
 25.28  earned income and 20 percent of earned income over $14,350 but 
 25.29  less than $16,230.  The credit is reduced by 8.8 9.38 percent of 
 25.30  earned income or modified adjusted gross income, whichever is 
 25.31  greater, in excess of $17,280, but in no case is the credit less 
 25.32  than zero. 
 25.33     (e) For a nonresident or part-year resident, the credit 
 25.34  must be allocated based on the percentage calculated under 
 25.35  section 290.06, subdivision 2c, paragraph (e). 
 25.36     (f) For a person who was a resident for the entire tax year 
 26.1   and has earned income not subject to tax under this chapter, the 
 26.2   credit must be allocated based on the ratio of federal adjusted 
 26.3   gross income reduced by the earned income not subject to tax 
 26.4   under this chapter over federal adjusted gross income. 
 26.5      (g) The commissioner shall construct tables showing the 
 26.6   amount of the credit at various income levels and make them 
 26.7   available to taxpayers.  The tables shall follow the schedule 
 26.8   contained in this subdivision, except that the commissioner may 
 26.9   graduate the transition between income brackets. 
 26.10     Sec. 13.  Minnesota Statutes 1998, section 290.0674, 
 26.11  subdivision 1, is amended to read: 
 26.12     Subdivision 1.  [CREDIT ALLOWED.] An individual is allowed 
 26.13  a credit against the tax imposed by this chapter in an amount 
 26.14  equal to the amount paid for education-related expenses for 
 26.15  a dependent qualifying child in kindergarten through grade 12.  
 26.16  For purposes of this section, "education-related expenses" means:
 26.17     (1) fees or tuition for instruction by an instructor under 
 26.18  section 120A.22, subdivision 10, clause (1), (2), (3), (4), or 
 26.19  (5), or by a member of the Minnesota music teachers association, 
 26.20  for instruction outside the regular school day or school year, 
 26.21  including tutoring, driver's education offered as part of school 
 26.22  curriculum, regardless of whether it is taken from a public or 
 26.23  private entity or summer camps, in grade or age appropriate 
 26.24  curricula that supplement curricula and instruction available 
 26.25  during the regular school year, that assists a dependent to 
 26.26  improve knowledge of core curriculum areas or to expand 
 26.27  knowledge and skills under the graduation rule under section 
 26.28  120B.02 and that do not include the teaching of religious 
 26.29  tenets, doctrines, or worship, the purpose of which is to 
 26.30  instill such tenets, doctrines, or worship; 
 26.31     (2) expenses for textbooks, including books and other 
 26.32  instructional materials and equipment used in elementary and 
 26.33  secondary schools in teaching only those subjects legally and 
 26.34  commonly taught in public elementary and secondary schools in 
 26.35  this state.  "Textbooks" does not include instructional books 
 26.36  and materials used in the teaching of religious tenets, 
 27.1   doctrines, or worship, the purpose of which is to instill such 
 27.2   tenets, doctrines, or worship, nor does it include books or 
 27.3   materials for extracurricular activities including sporting 
 27.4   events, musical or dramatic events, speech activities, driver's 
 27.5   education, or similar programs; 
 27.6      (3) a maximum expense of $200 per family for personal 
 27.7   computer hardware, excluding single purpose processors, and 
 27.8   educational software that assists a dependent to improve 
 27.9   knowledge of core curriculum areas or to expand knowledge and 
 27.10  skills under the graduation rule under section 120B.02 purchased 
 27.11  for use in the taxpayer's home and not used in a trade or 
 27.12  business regardless of whether the computer is required by the 
 27.13  dependent's school; and 
 27.14     (4) the amount paid to others for transportation of a 
 27.15  dependent qualifying child attending an elementary or secondary 
 27.16  school situated in Minnesota, North Dakota, South Dakota, Iowa, 
 27.17  or Wisconsin, wherein a resident of this state may legally 
 27.18  fulfill the state's compulsory attendance laws, which is not 
 27.19  operated for profit, and which adheres to the provisions of the 
 27.20  Civil Rights Act of 1964 and chapter 363. 
 27.21     For purposes of this section, "qualifying child" has the 
 27.22  meaning given in section 32(c)(3) of the Internal Revenue Code. 
 27.23     Sec. 14.  Minnesota Statutes 1998, section 290.0674, 
 27.24  subdivision 2, is amended to read: 
 27.25     Subd. 2.  [LIMITATIONS.] (a) For claimants with income not 
 27.26  greater than $33,500, the maximum credit allowed is $1,000 per 
 27.27  qualifying child and $2,000 per family.  No credit is allowed 
 27.28  for education-related expenses for claimants with income greater 
 27.29  than $33,500 $37,500.  The maximum credit per child is reduced 
 27.30  by $1 for each $4 of household income over $33,500, and the 
 27.31  maximum credit per family is reduced by $2 for each $4 of 
 27.32  household income over $33,500, but in no case is the credit less 
 27.33  than zero. 
 27.34     For purposes of this section "income" has the meaning given 
 27.35  in section 290.067, subdivision 2a.  In the case of a married 
 27.36  claimant, a credit is not allowed unless a joint income tax 
 28.1   return is filed. 
 28.2      (b) For a nonresident or part-year resident, the credit 
 28.3   determined under subdivision 1 and the maximum credit amount in 
 28.4   paragraph (a) must be allocated using the percentage calculated 
 28.5   in section 290.06, subdivision 2c, paragraph (e). 
 28.6      Sec. 15.  [290.0675] [MARRIAGE PENALTY CREDIT.] 
 28.7      Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
 28.8   section the following terms have the meanings given. 
 28.9      (b) "Earned income" means earned income as defined in 
 28.10  section 32(c)(2) of the Internal Revenue Code. 
 28.11     (c) "Taxable income" means net income as defined in section 
 28.12  290.01, subdivision 19. 
 28.13     (d) "Earned income of lesser-earning spouse" means the 
 28.14  earned income of the spouse with the lesser amount of earned 
 28.15  income as defined in paragraph (b) for the taxable year.  
 28.16     Subd. 2.  [CREDIT ALLOWED.] A married couple filing a joint 
 28.17  return is allowed a credit against the tax imposed under section 
 28.18  290.06.  
 28.19     The minimum taxable income for the married couple to be 
 28.20  eligible for the credit is $25,000, and the minimum earned 
 28.21  income in order for the couple to be eligible for the credit is 
 28.22  $14,000 for each spouse. 
 28.23     Subd. 3.  [CREDIT AMOUNT.] The credit amount is as shown in 
 28.24  the table in this subdivision, based on the couple's taxable 
 28.25  income for the tax year and on the earned income of the 
 28.26  lesser-earning spouse. 
 28.27                               Credit For          Credit For
 28.28    Earned Income of           Taxable Income      Taxable Income
 28.29    Lesser Earning Spouse      $25,000-$99,999     $100,000-over
 28.30    $14,000 - $14,999          $9                  $0    
 28.31    $15,000 - $15,999          $27                 $0    
 28.32    $16,000 - $16,999          $44                 $0    
 28.33    $17,000 - $17,999          $62                 $0    
 28.34    $18,000 - $18,999          $79                 $0    
 28.35    $19,000 - $19,999          $97                 $0  
 28.36    $20,000 - $20,999          $114                $0  
 29.1     $21,000 - $21,999          $132                $0 
 29.2     $22,000 - $22,999          $149                $0
 29.3     $23,000 - $23,999          $162                $0 
 29.4     $24,000 - $24,999          $162                $0   
 29.5     $25,000 - $25,999          $162                $0  
 29.6     $26,000 - $26,999          $162                $0   
 29.7     $27,000 - $27,999          $162                $0
 29.8     $28,000 - $28,999          $162                $9
 29.9     $29,000 - $29,999          $162                $16
 29.10    $30,000 - $30,999          $162                $24
 29.11    $31,000 - $31,999          $162                $31
 29.12    $32,000 - $32,999          $162                $39
 29.13    $33,000 - $33,999          $162                $46
 29.14    $34,000 - $34,999          $162                $54
 29.15    $35,000 - $35,999          $162                $61
 29.16    $36,000 - $36,999          $162                $69
 29.17    $37,000 - $37,999          $162                $76
 29.18    $38,000 - $38,999          $162                $84
 29.19    $39,000 - $39,999          $162                $91
 29.20    $40,000 - $40,999          $162                $99
 29.21    $41,000 - $41,999          $162                $106
 29.22    $42,000 - $42,999          $162                $114
 29.23    $43,000 - $43,999          $162                $121
 29.24    $44,000 - $44,999          $162                $129
 29.25    $45,000 - $45,999          $162                $136
 29.26    $46,000 - $46,999          $162                $144
 29.27    $47,000 - $47,999          $162                $151
 29.28    $48,000 - $48,999          $162                $159
 29.29    $49,000 - $49,999          $162                $166
 29.30    $50,000 - $50,999          $162                $174
 29.31    $51,000 - $51,999          $162                $181
 29.32    $52,000 - $52,999          $162                $189
 29.33    $53,000 - $53,999          $162                $196
 29.34    $54,000 - $54,999          $162                $204
 29.35    $55,000 - $55,999          $162                $211
 29.36    $56,000 - $56,999          $162                $219
 30.1     $57,000 - $57,999          $162                $226
 30.2     $58,000 - $58,999          $162                $234
 30.3     $59,000 - $59,999          $162                $241
 30.4     $60,000 - $60,999          $162                $249
 30.5     $61,000 - $61,999          $162                $256
 30.6     $62,000 and over           $162                $261
 30.7      Subd. 4.  [NONRESIDENTS AND PART-YEAR RESIDENTS.] For a 
 30.8   nonresident or part-year resident, the credit must be allocated 
 30.9   based on the percentage calculated under section 290.06, 
 30.10  subdivision 2c, paragraph (e). 
 30.11     Subd. 5.  [INFLATION ADJUSTMENT.] The dollar amount of 
 30.12  earned income of the lesser-earning spouse, taxable income, and 
 30.13  marriage penalty credit in the table in subdivision 3 must be 
 30.14  adjusted for inflation.  The commissioner shall adjust the 
 30.15  amounts by the percentage determined under section 290.06, 
 30.16  subdivision 2d, for the taxable year. 
 30.17     Sec. 16.  Minnesota Statutes 1998, section 290.091, 
 30.18  subdivision 1, is amended to read: 
 30.19     Subdivision 1.  [IMPOSITION OF TAX.] In addition to all 
 30.20  other taxes imposed by this chapter a tax is imposed on 
 30.21  individuals, estates, and trusts equal to the excess (if any) of 
 30.22     (a) an amount equal to seven 6.5 percent of alternative 
 30.23  minimum taxable income after subtracting the exemption amount, 
 30.24  over 
 30.25     (b) the regular tax for the taxable year. 
 30.26     Sec. 17.  Minnesota Statutes 1998, section 290.091, 
 30.27  subdivision 2, is amended to read: 
 30.28     Subd. 2.  [DEFINITIONS.] For purposes of the tax imposed by 
 30.29  this section, the following terms have the meanings given: 
 30.30     (a) "Alternative minimum taxable income" means the sum of 
 30.31  the following for the taxable year: 
 30.32     (1) the taxpayer's federal alternative minimum taxable 
 30.33  income as defined in section 55(b)(2) of the Internal Revenue 
 30.34  Code; 
 30.35     (2) the taxpayer's itemized deductions allowed in computing 
 30.36  federal alternative minimum taxable income, but excluding: 
 31.1      (i) the Minnesota charitable contribution deduction; 
 31.2      (ii) the medical expense deduction; 
 31.3      (iii) the casualty, theft, and disaster loss deduction; and 
 31.4      (iv) the impairment-related work expenses of a disabled 
 31.5   person; and 
 31.6      (v) holocaust victims' settlement payments to the extent 
 31.7   allowed under section 290.01, subdivision 19b; and 
 31.8      (3) for depletion allowances computed under section 613A(c) 
 31.9   of the Internal Revenue Code, with respect to each property (as 
 31.10  defined in section 614 of the Internal Revenue Code), to the 
 31.11  extent not included in federal alternative minimum taxable 
 31.12  income, the excess of the deduction for depletion allowable 
 31.13  under section 611 of the Internal Revenue Code for the taxable 
 31.14  year over the adjusted basis of the property at the end of the 
 31.15  taxable year (determined without regard to the depletion 
 31.16  deduction for the taxable year); 
 31.17     (4) to the extent not included in federal alternative 
 31.18  minimum taxable income, the amount of the tax preference for 
 31.19  intangible drilling cost under section 57(a)(2) of the Internal 
 31.20  Revenue Code determined without regard to subparagraph (E); 
 31.21     (5) to the extent not included in federal alternative 
 31.22  minimum taxable income, the amount of interest income as 
 31.23  provided by section 290.01, subdivision 19a, clause (1); 
 31.24     (6) amounts added to federal taxable income as provided by 
 31.25  section 290.01, subdivision 19a, clauses (5), (6), and (7); 
 31.26     less the sum of the amounts determined under the following 
 31.27  clauses (1) to (4): 
 31.28     (1) interest income as defined in section 290.01, 
 31.29  subdivision 19b, clause (1); 
 31.30     (2) an overpayment of state income tax as provided by 
 31.31  section 290.01, subdivision 19b, clause (2), to the extent 
 31.32  included in federal alternative minimum taxable income; and 
 31.33     (3) the amount of investment interest paid or accrued 
 31.34  within the taxable year on indebtedness to the extent that the 
 31.35  amount does not exceed net investment income, as defined in 
 31.36  section 163(d)(4) of the Internal Revenue Code.  Interest does 
 32.1   not include amounts deducted in computing federal adjusted gross 
 32.2   income; and. 
 32.3      (4) amounts subtracted from federal taxable income as 
 32.4   provided by section 290.01, subdivision 19b, clauses (11) and 
 32.5   (12). 
 32.6      In the case of an estate or trust, alternative minimum 
 32.7   taxable income must be computed as provided in section 59(c) of 
 32.8   the Internal Revenue Code. 
 32.9      (b) "Investment interest" means investment interest as 
 32.10  defined in section 163(d)(3) of the Internal Revenue Code. 
 32.11     (c) "Tentative minimum tax" equals seven 6.5 percent of 
 32.12  alternative minimum taxable income after subtracting the 
 32.13  exemption amount determined under subdivision 3. 
 32.14     (d) "Regular tax" means the tax that would be imposed under 
 32.15  this chapter (without regard to this section and section 
 32.16  290.032), reduced by the sum of the nonrefundable credits 
 32.17  allowed under this chapter.  
 32.18     (e) "Net minimum tax" means the minimum tax imposed by this 
 32.19  section. 
 32.20     (f) "Minnesota charitable contribution deduction" means a 
 32.21  charitable contribution deduction under section 170 of the 
 32.22  Internal Revenue Code to or for the use of an entity described 
 32.23  in section 290.21, subdivision 3, clauses (a) to (e).  When the 
 32.24  federal deduction for charitable contributions is limited under 
 32.25  section 170(b) of the Internal Revenue Code, the allowable 
 32.26  contributions in the year of contribution are deemed to be first 
 32.27  contributions to entities described in section 290.21, 
 32.28  subdivision 3, clauses (a) to (e). 
 32.29     Sec. 18.  Minnesota Statutes 1998, section 290.091, 
 32.30  subdivision 6, is amended to read: 
 32.31     Subd. 6.  [CREDIT FOR PRIOR YEARS' LIABILITY.] (a) A credit 
 32.32  is allowed against the tax imposed by this chapter on 
 32.33  individuals, trusts, and estates equal to the minimum tax credit 
 32.34  for the taxable year.  The minimum tax credit equals the 
 32.35  adjusted net minimum tax for taxable years beginning after 
 32.36  December 31, 1988, reduced by the minimum tax credits allowed in 
 33.1   a prior taxable year.  The credit may not exceed the excess (if 
 33.2   any) for the taxable year of 
 33.3      (1) the regular tax, over 
 33.4      (2) the greater of (i) the tentative alternative minimum 
 33.5   tax, or (ii) zero. 
 33.6      (b) The adjusted net minimum tax for a taxable year equals 
 33.7   the lesser of the net minimum tax or the excess (if any) of 
 33.8      (1) the tentative minimum tax, over 
 33.9      (2) seven 6.5 percent of the sum of 
 33.10     (i) adjusted gross income as defined in section 62 of the 
 33.11  Internal Revenue Code, 
 33.12     (ii) interest income as defined in section 290.01, 
 33.13  subdivision 19a, clause (1), 
 33.14     (iii) the amount added to federal taxable income as 
 33.15  provided by section 290.01, subdivision 19a, clauses (5), (6), 
 33.16  and (7), 
 33.17     (iv) interest on specified private activity bonds, as 
 33.18  defined in section 57(a)(5) of the Internal Revenue Code, to the 
 33.19  extent not included under clause (ii), 
 33.20     (v) (iv) depletion as defined in section 57(a)(1), 
 33.21  determined without regard to the last sentence of paragraph (1), 
 33.22  of the Internal Revenue Code, less 
 33.23     (vi) (v) the deductions allowed in computing alternative 
 33.24  minimum taxable income provided in subdivision 2, paragraph (a), 
 33.25  clause (2) of the first series of clauses and clauses (1), 
 33.26  (2), and (3), and (4) of the second series of clauses, and 
 33.27     (vii) (vi) the exemption amount determined under 
 33.28  subdivision 3. 
 33.29     In the case of an individual who is not a Minnesota 
 33.30  resident for the entire year, adjusted net minimum tax must be 
 33.31  multiplied by the fraction defined in section 290.06, 
 33.32  subdivision 2c, paragraph (e).  In the case of a trust or 
 33.33  estate, adjusted net minimum tax must be multiplied by the 
 33.34  fraction defined under subdivision 4, paragraph (b). 
 33.35     Sec. 19.  Minnesota Statutes 1998, section 290.0921, 
 33.36  subdivision 5, is amended to read: 
 34.1      Subd. 5.  [CHARITABLE CONTRIBUTIONS.] (a) A deduction from 
 34.2   alternative minimum taxable net income is allowed equal to 
 34.3   the contributions subject to the deduction for charitable 
 34.4   contributions under section 290.21, subdivision 3, without 
 34.5   application of the limitation in section 290.21, subdivision 3.  
 34.6   The deduction allowable for capital gain property is limited to 
 34.7   the adjusted basis of the property as defined in section 290.01, 
 34.8   subdivision 19f.  The term capital gain property has the meaning 
 34.9   given by section 170(b)(1)(C)(iv) of the Internal Revenue Code, 
 34.10  but does not include property to which an election under section 
 34.11  170(b)(1)(C)(iii) of the Internal Revenue Code applies. 
 34.12     (b) The amount of the deduction may not exceed 15 percent 
 34.13  of alternative minimum taxable net income less the deduction 
 34.14  allowed under subdivision 6. 
 34.15     Sec. 20.  Minnesota Statutes 1998, section 290.095, 
 34.16  subdivision 3, is amended to read: 
 34.17     Subd. 3.  [CARRYOVER.] (a) A net operating loss incurred in 
 34.18  a taxable year:  (i) beginning after December 31, 1986, shall be 
 34.19  a net operating loss carryover to each of the 15 taxable years 
 34.20  following the taxable year of such loss; (ii) beginning before 
 34.21  January 1, 1987, shall be a net operating loss carryover to each 
 34.22  of the five taxable years following the taxable year of such 
 34.23  loss subject to the provisions of Minnesota Statutes 1986, 
 34.24  section 290.095; and (iii) beginning before January 1, 1987, 
 34.25  shall be a net operating loss carryback to each of the three 
 34.26  taxable years preceding the loss year subject to the provisions 
 34.27  of Minnesota Statutes 1986, section 290.095. 
 34.28     (b) The entire amount of the net operating loss for any 
 34.29  taxable year shall be carried to the earliest of the taxable 
 34.30  years to which such loss may be carried.  The portion of such 
 34.31  loss which shall be carried to each of the other taxable years 
 34.32  shall be the excess, if any, of the amount of such loss over the 
 34.33  sum of the taxable net income, adjusted by the modifications 
 34.34  specified in subdivision 4, for each of the taxable years to 
 34.35  which such loss may be carried. 
 34.36     (c) Where a corporation does business both within and 
 35.1   without Minnesota, and apportions its income under the 
 35.2   provisions of section 290.191, the net operating loss deduction 
 35.3   incurred in any taxable year shall be allowed to the extent of 
 35.4   the apportionment ratio of the loss year. 
 35.5      (d) The provisions of sections 381, 382, and 384 of the 
 35.6   Internal Revenue Code apply to carryovers in certain corporate 
 35.7   acquisitions and special limitations on net operating loss 
 35.8   carryovers.  The limitation amount determined under section 382 
 35.9   shall be applied to net income, before apportionment, in each 
 35.10  post change year to which a loss is carried. 
 35.11     Sec. 21.  Minnesota Statutes 1998, section 290.17, 
 35.12  subdivision 3, is amended to read: 
 35.13     Subd. 3.  [TRADE OR BUSINESS INCOME; GENERAL RULE.] All 
 35.14  income of a trade or business is subject to apportionment except 
 35.15  nonbusiness income.  Income derived from carrying on a trade or 
 35.16  business must be assigned to this state if the trade or business 
 35.17  is conducted wholly within this state, assigned outside this 
 35.18  state if conducted wholly without this state and apportioned 
 35.19  between this state and other states and countries under this 
 35.20  subdivision if conducted partly within and partly without this 
 35.21  state.  For purposes of determining whether a trade or business 
 35.22  is carried on exclusively within or without this state:  
 35.23     (a) A trade or business physically located exclusively 
 35.24  within this state is nevertheless carried on partly within and 
 35.25  partly without this state if any of the principles set forth in 
 35.26  section 290.191 for the allocation of sales or receipts within 
 35.27  or without this state when applied to the taxpayer's situation 
 35.28  result in the allocation of any sales or receipts without this 
 35.29  state.  
 35.30     (b) A trade or business physically located exclusively 
 35.31  without this state is nevertheless carried on partly within and 
 35.32  partly without this state if any of the principles set forth in 
 35.33  section 290.191 for the allocation of sales or receipts within 
 35.34  or without this state when applied to the taxpayer's situation 
 35.35  result in the allocation of any sales or receipts without this 
 35.36  state.  The jurisdiction to tax such a business under this 
 36.1   chapter must be determined in accordance with sections 290.014 
 36.2   and 290.015. 
 36.3      Sec. 22.  Minnesota Statutes 1998, section 290.17, 
 36.4   subdivision 4, is amended to read: 
 36.5      Subd. 4.  [UNITARY BUSINESS PRINCIPLE.] (a) If a trade or 
 36.6   business conducted wholly within this state or partly within and 
 36.7   partly without this state is part of a unitary business, the 
 36.8   entire income of the unitary business is subject to 
 36.9   apportionment pursuant to section 290.191.  Notwithstanding 
 36.10  subdivision 2, paragraph (c), none of the income of a unitary 
 36.11  business is considered to be derived from any particular source 
 36.12  and none may be allocated to a particular place except as 
 36.13  provided by the applicable apportionment formula.  The 
 36.14  provisions of this subdivision do not apply to farm income 
 36.15  subject to subdivision 5, paragraph (a), business income subject 
 36.16  to subdivision 5, paragraph (b) or (c), income of an insurance 
 36.17  company determined under section 290.35, or income of an 
 36.18  investment company determined under section 290.36. 
 36.19     (b) The term "unitary business" means business activities 
 36.20  or operations which are of mutual benefit, dependent upon, or 
 36.21  contributory to one another, individually or as a group result 
 36.22  in a flow of value between them.  The term may be applied within 
 36.23  a single legal entity or between multiple entities and without 
 36.24  regard to whether each entity is a sole proprietorship, a 
 36.25  corporation, a partnership or a trust.  
 36.26     (c) Unity is presumed whenever there is unity of ownership, 
 36.27  operation, and use, evidenced by centralized management or 
 36.28  executive force, centralized purchasing, advertising, 
 36.29  accounting, or other controlled interaction, but the absence of 
 36.30  these centralized activities will not necessarily evidence a 
 36.31  nonunitary business.  Unity is also presumed when business 
 36.32  activities or operations are of mutual benefit, dependent upon 
 36.33  or contributory to one another, either individually or as a 
 36.34  group. 
 36.35     (d) Where a business operation conducted in Minnesota is 
 36.36  owned by a business entity that carries on business activity 
 37.1   outside the state different in kind from that conducted within 
 37.2   this state, and the other business is conducted entirely outside 
 37.3   the state, it is presumed that the two business operations are 
 37.4   unitary in nature, interrelated, connected, and interdependent 
 37.5   unless it can be shown to the contrary.  
 37.6      (e) Unity of ownership is not deemed to exist when a 
 37.7   corporation is involved unless that corporation is a member of a 
 37.8   group of two or more business entities and more than 50 percent 
 37.9   of the voting stock of each member of the group is directly or 
 37.10  indirectly owned by a common owner or by common owners, either 
 37.11  corporate or noncorporate, or by one or more of the member 
 37.12  corporations of the group.  For this purpose, the term "voting 
 37.13  stock" shall include membership interests of mutual insurance 
 37.14  holding companies formed under section 60A.077.  
 37.15     (f) The net income and apportionment factors under section 
 37.16  290.191 or 290.20 of foreign corporations and other foreign 
 37.17  entities which are part of a unitary business shall not be 
 37.18  included in the net income or the apportionment factors of the 
 37.19  unitary business.  A foreign corporation or other foreign entity 
 37.20  which is required to file a return under this chapter shall file 
 37.21  on a separate return basis.  The net income and apportionment 
 37.22  factors under section 290.191 or 290.20 of foreign operating 
 37.23  corporations shall not be included in the net income or the 
 37.24  apportionment factors of the unitary business except as provided 
 37.25  in paragraph (g). 
 37.26     (g) The adjusted net income of a foreign operating 
 37.27  corporation shall be deemed to be paid as a dividend on the last 
 37.28  day of its taxable year to each shareholder thereof, in 
 37.29  proportion to each shareholder's ownership, with which such 
 37.30  corporation is engaged in a unitary business.  Such deemed 
 37.31  dividend shall be treated as a dividend under section 290.21, 
 37.32  subdivision 4. 
 37.33     Dividends actually paid by a foreign operating corporation 
 37.34  to a corporate shareholder which is a member of the same unitary 
 37.35  business as the foreign operating corporation shall be 
 37.36  eliminated from the net income of the unitary business in 
 38.1   preparing a combined report for the unitary business.  The 
 38.2   adjusted net income of a foreign operating corporation shall be 
 38.3   its net income adjusted as follows: 
 38.4      (1) any taxes paid or accrued to a foreign country, the 
 38.5   commonwealth of Puerto Rico, or a United States possession or 
 38.6   political subdivision of any of the foregoing shall be a 
 38.7   deduction; and 
 38.8      (2) the subtraction from federal taxable income for 
 38.9   payments received from foreign corporations or foreign operating 
 38.10  corporations under section 290.01, subdivision 19d, clause (11), 
 38.11  shall not be allowed. 
 38.12     If a foreign operating corporation incurs a net loss, 
 38.13  neither income nor deduction from that corporation shall be 
 38.14  included in determining the net income of the unitary business. 
 38.15     (h) For purposes of determining the net income of a unitary 
 38.16  business and the factors to be used in the apportionment of net 
 38.17  income pursuant to section 290.191 or 290.20, there must be 
 38.18  included only the income and apportionment factors of domestic 
 38.19  corporations or other domestic entities other than foreign 
 38.20  operating corporations that are determined to be part of the 
 38.21  unitary business pursuant to this subdivision, notwithstanding 
 38.22  that foreign corporations or other foreign entities might be 
 38.23  included in the unitary business.  
 38.24     (i) Deductions for expenses, interest, or taxes otherwise 
 38.25  allowable under this chapter that are connected with or 
 38.26  allocable against dividends, deemed dividends described in 
 38.27  paragraph (g), or royalties, fees, or other like income 
 38.28  described in section 290.01, subdivision 19d, clause (11), shall 
 38.29  not be disallowed. 
 38.30     (j) Each corporation or other entity, except a sole 
 38.31  proprietorship, that is part of a unitary business must file 
 38.32  combined reports as the commissioner determines.  On the 
 38.33  reports, all intercompany transactions between entities included 
 38.34  pursuant to paragraph (h) must be eliminated and the entire net 
 38.35  income of the unitary business determined in accordance with 
 38.36  this subdivision is apportioned among the entities by using each 
 39.1   entity's Minnesota factors for apportionment purposes in the 
 39.2   numerators of the apportionment formula and the total factors 
 39.3   for apportionment purposes of all entities included pursuant to 
 39.4   paragraph (h) in the denominators of the apportionment formula. 
 39.5      (k) If a corporation has been divested from a unitary 
 39.6   business and is included in a combined report for a fractional 
 39.7   part of the common accounting period of the combined report:  
 39.8      (1) its income includable in the combined report is its 
 39.9   income incurred for that part of the year determined by 
 39.10  proration or separate accounting; and 
 39.11     (2) its sales, property, and payroll included in the 
 39.12  apportionment formula must be prorated or accounted for 
 39.13  separately. 
 39.14     Sec. 23.  Minnesota Statutes 1998, section 290.17, 
 39.15  subdivision 6, is amended to read: 
 39.16     Subd. 6.  [NONBUSINESS INCOME.] For a trade or business for 
 39.17  which allocation of income within and without this state is 
 39.18  required, if the taxpayer has any income not connected with the 
 39.19  trade or business carried on partly within and partly without 
 39.20  this state that income must be allocated under subdivision 2.  
 39.21  Intangible property is employed in a trade or business if the 
 39.22  owner of the property holds it as a means of furthering the 
 39.23  trade or business.  Nonbusiness income is income of the trade or 
 39.24  business that cannot be apportioned by this state because of the 
 39.25  United States Constitution or the constitution of the state of 
 39.26  Minnesota and includes income that cannot constitutionally be 
 39.27  apportioned to this state because it is derived from a capital 
 39.28  transaction that solely serves an investment function.  
 39.29  Nonbusiness income must be allocated under subdivision 2. 
 39.30     Sec. 24.  Minnesota Statutes 1998, section 290.191, 
 39.31  subdivision 2, is amended to read: 
 39.32     Subd. 2.  [APPORTIONMENT FORMULA OF GENERAL APPLICATION.] 
 39.33  Except for those trades or businesses required to use a 
 39.34  different formula under subdivision 3 or section 290.35 or 
 39.35  290.36, and for those trades or businesses that receive 
 39.36  permission to use some other method under section 290.20 or 
 40.1   under subdivision 4, a trade or business required to apportion 
 40.2   its net income must apportion its income to this state on the 
 40.3   basis of the percentage obtained by taking the sum of:  
 40.4      (1) 70 75 percent of the percentage which the sales made 
 40.5   within this state in connection with the trade or business 
 40.6   during the tax period are of the total sales wherever made in 
 40.7   connection with the trade or business during the tax period; 
 40.8      (2) 15 12.5 percent of the percentage which the total 
 40.9   tangible property used by the taxpayer in this state in 
 40.10  connection with the trade or business during the tax period is 
 40.11  of the total tangible property, wherever located, used by the 
 40.12  taxpayer in connection with the trade or business during the tax 
 40.13  period; and 
 40.14     (3) 15 12.5 percent of the percentage which the taxpayer's 
 40.15  total payrolls paid or incurred in this state or paid in respect 
 40.16  to labor performed in this state in connection with the trade or 
 40.17  business during the tax period are of the taxpayer's total 
 40.18  payrolls paid or incurred in connection with the trade or 
 40.19  business during the tax period.  
 40.20     Sec. 25.  Minnesota Statutes 1998, section 290.191, 
 40.21  subdivision 3, is amended to read: 
 40.22     Subd. 3.  [APPORTIONMENT FORMULA FOR FINANCIAL 
 40.23  INSTITUTIONS.] Except for an investment company required to 
 40.24  apportion its income under section 290.36, a financial 
 40.25  institution that is required to apportion its net income must 
 40.26  apportion its net income to this state on the basis of the 
 40.27  percentage obtained by taking the sum of:  
 40.28     (1) 70 75 percent of the percentage which the receipts from 
 40.29  within this state in connection with the trade or business 
 40.30  during the tax period are of the total receipts in connection 
 40.31  with the trade or business during the tax period, from wherever 
 40.32  derived; 
 40.33     (2) 15 12.5 percent of the percentage which the sum of the 
 40.34  total tangible property used by the taxpayer in this state and 
 40.35  the intangible property owned by the taxpayer and attributed to 
 40.36  this state in connection with the trade or business during the 
 41.1   tax period is of the sum of the total tangible property, 
 41.2   wherever located, used by the taxpayer and the intangible 
 41.3   property owned by the taxpayer and attributed to all states in 
 41.4   connection with the trade or business during the tax period; and 
 41.5      (3) 15 12.5 percent of the percentage which the taxpayer's 
 41.6   total payrolls paid or incurred in this state or paid in respect 
 41.7   to labor performed in this state in connection with the trade or 
 41.8   business during the tax period are of the taxpayer's total 
 41.9   payrolls paid or incurred in connection with the trade or 
 41.10  business during the tax period. 
 41.11     Sec. 26.  Minnesota Statutes 1998, section 290.9725, is 
 41.12  amended to read: 
 41.13     290.9725 [S CORPORATION.] 
 41.14     For purposes of this chapter, the term "S corporation" 
 41.15  means any corporation having a valid election in effect for the 
 41.16  taxable year under section 1362 of the Internal Revenue Code, 
 41.17  except that a corporation which either: 
 41.18     (1) is a financial institution to which either section 585 
 41.19  or section 593 of the Internal Revenue Code applies; or 
 41.20     (2) has a wholly owned subsidiary as described in section 
 41.21  1361(b)(3)(B) of the Internal Revenue Code which is a financial 
 41.22  institution as described above 
 41.23  is not an "S" corporation for the purposes of this chapter.  An 
 41.24  S corporation shall not be subject to the taxes imposed by this 
 41.25  chapter, except:  
 41.26     (1) the taxes imposed under sections 290.0922, 290.92, 
 41.27  290.9727, 290.9728, and 290.9729; and 
 41.28     (2) the tax under sections 290.06, subdivision 1, and 
 41.29  290.0921 apply to a financial institution to which either 
 41.30  section 585 or 593 of the Internal Revenue Code applies or that 
 41.31  has a wholly owned subsidiary as described in section 
 41.32  1361(b)(3)(B) of the Internal Revenue Code which is a financial 
 41.33  institution under section 585 or 593 of the Internal Revenue 
 41.34  Code. 
 41.35     Sec. 27.  Minnesota Statutes 1998, section 290.9726, is 
 41.36  amended by adding a subdivision to read: 
 42.1      Subd. 7.  [FINANCIAL INSTITUTIONS.] An S corporation that 
 42.2   is subject to the tax under section 290.9725, clause (2), must 
 42.3   report to each shareholder an apportionment of the S 
 42.4   corporation's tax obligation for the taxable year for purposes 
 42.5   of the credit under section 290.06, subdivision 26.  The 
 42.6   apportionment to a shareholder must be made in proportion to the 
 42.7   amount of taxable income of the S corporation apportioned to the 
 42.8   shareholder. 
 42.9      Sec. 28.  Minnesota Statutes 1998, section 290A.03, 
 42.10  subdivision 3, is amended to read: 
 42.11     Subd. 3.  [INCOME.] (1) "Income" means the sum of the 
 42.12  following:  
 42.13     (a) federal adjusted gross income as defined in the 
 42.14  Internal Revenue Code; and 
 42.15     (b) the sum of the following amounts to the extent not 
 42.16  included in clause (a):  
 42.17     (i) all nontaxable income; 
 42.18     (ii) the amount of a passive activity loss that is not 
 42.19  disallowed as a result of section 469, paragraph (i) or (m) of 
 42.20  the Internal Revenue Code and the amount of passive activity 
 42.21  loss carryover allowed under section 469(b) of the Internal 
 42.22  Revenue Code; 
 42.23     (iii) an amount equal to the total of any discharge of 
 42.24  qualified farm indebtedness of a solvent individual excluded 
 42.25  from gross income under section 108(g) of the Internal Revenue 
 42.26  Code; 
 42.27     (iv) cash public assistance and relief; 
 42.28     (v) any pension or annuity (including railroad retirement 
 42.29  benefits, all payments received under the federal Social 
 42.30  Security Act, supplemental security income, and veterans 
 42.31  benefits), which was not exclusively funded by the claimant or 
 42.32  spouse, or which was funded exclusively by the claimant or 
 42.33  spouse and which funding payments were excluded from federal 
 42.34  adjusted gross income in the years when the payments were made; 
 42.35     (vi) interest received from the federal or a state 
 42.36  government or any instrumentality or political subdivision 
 43.1   thereof; 
 43.2      (vii) workers' compensation; 
 43.3      (viii) nontaxable strike benefits; 
 43.4      (ix) the gross amounts of payments received in the nature 
 43.5   of disability income or sick pay as a result of accident, 
 43.6   sickness, or other disability, whether funded through insurance 
 43.7   or otherwise; 
 43.8      (x) a lump sum distribution under section 402(e)(3) of the 
 43.9   Internal Revenue Code; 
 43.10     (xi) contributions made by the claimant to an individual 
 43.11  retirement account, including a qualified voluntary employee 
 43.12  contribution; simplified employee pension plan; self-employed 
 43.13  retirement plan; cash or deferred arrangement plan under section 
 43.14  401(k) of the Internal Revenue Code; or deferred compensation 
 43.15  plan under section 457 of the Internal Revenue Code; and 
 43.16     (xii) nontaxable scholarship or fellowship grants.  
 43.17     In the case of an individual who files an income tax return 
 43.18  on a fiscal year basis, the term "federal adjusted gross income" 
 43.19  shall mean federal adjusted gross income reflected in the fiscal 
 43.20  year ending in the calendar year.  Federal adjusted gross income 
 43.21  shall not be reduced by the amount of a net operating loss 
 43.22  carryback or carryforward or a capital loss carryback or 
 43.23  carryforward allowed for the year.  
 43.24     (2) "Income" does not include:  
 43.25     (a) amounts excluded pursuant to the Internal Revenue Code, 
 43.26  sections 101(a) and 102; 
 43.27     (b) amounts of any pension or annuity which was exclusively 
 43.28  funded by the claimant or spouse and which funding payments were 
 43.29  not excluded from federal adjusted gross income in the years 
 43.30  when the payments were made; 
 43.31     (c) surplus food or other relief in kind supplied by a 
 43.32  governmental agency; 
 43.33     (d) relief granted under this chapter; or 
 43.34     (e) child support payments received under a temporary or 
 43.35  final decree of dissolution or legal separation; or 
 43.36     (f) holocaust settlement payments as defined in section 
 44.1   290.01, subdivision 32.  
 44.2      (3) The sum of the following amounts may be subtracted from 
 44.3   income:  
 44.4      (a) for the claimant's first dependent, the exemption 
 44.5   amount multiplied by 1.4; 
 44.6      (b) for the claimant's second dependent, the exemption 
 44.7   amount multiplied by 1.3; 
 44.8      (c) for the claimant's third dependent, the exemption 
 44.9   amount multiplied by 1.2; 
 44.10     (d) for the claimant's fourth dependent, the exemption 
 44.11  amount multiplied by 1.1; 
 44.12     (e) for the claimant's fifth dependent, the exemption 
 44.13  amount; and 
 44.14     (f) if the claimant or claimant's spouse was disabled or 
 44.15  attained the age of 65 on or before December 31 of the year for 
 44.16  which the taxes were levied or rent paid, the exemption amount.  
 44.17     For purposes of this subdivision, the "exemption amount" 
 44.18  means the exemption amount under section 151(d) of the Internal 
 44.19  Revenue Code for the taxable year for which the income is 
 44.20  reported.  
 44.21     Sec. 29.  [NONBUSINESS INCOME; PRE-1999 TAX YEARS.] 
 44.22     If all items of income, gain, or loss are reported by a 
 44.23  taxpayer as business income or loss on an original or amended 
 44.24  return for a tax year to which this section applies, the 
 44.25  commissioner of revenue shall not adjust the tax liability for 
 44.26  that tax year, or for any other tax year affected by a carryover 
 44.27  from that tax year, by treating any of the items as nonbusiness 
 44.28  income or loss under Minnesota Statutes, section 290.17, 
 44.29  subdivision 6.  Any adjustment treating an item as nonbusiness 
 44.30  income or loss ordered by the commissioner before the effective 
 44.31  date of this section must be reversed if the order is subject to 
 44.32  administrative or judicial challenge on the effective date and 
 44.33  such a challenge is timely filed.  The reporting of any item as 
 44.34  nonbusiness income, gain, or loss does not preclude the 
 44.35  application of this section if the taxpayer may not 
 44.36  constitutionally be required to treat the item as business 
 45.1   income, gain, or loss. 
 45.2      Sec. 30.  [BANK S CORPORATION SHAREHOLDERS; ALTERNATIVE 
 45.3   MINIMUM TAX.] 
 45.4      For taxable years beginning after December 31, 1997, and 
 45.5   before January 1, 1999, a taxpayer is allowed a deduction in 
 45.6   computing alternative minimum taxable income under Minnesota 
 45.7   Statutes 1998, section 290.091, subdivision 2, paragraph (a), 
 45.8   equal to the amount of the subtraction under Minnesota Statutes 
 45.9   1998, section 290.01, subdivision 19b, clause (13). 
 45.10     Sec. 31.  [APPROPRIATION.] 
 45.11     (a) $100,000 is appropriated from the general fund to the 
 45.12  commissioner of revenue to make grants to one or more nonprofit 
 45.13  organizations, qualifying under section 501(c)(3) of the 
 45.14  Internal Revenue Code of 1986, to coordinate, facilitate, 
 45.15  encourage, and aid in the provision of taxpayer assistance 
 45.16  services.  In making grants under this appropriation, the 
 45.17  commissioner shall give preference to organizations that will 
 45.18  use the grants to attract new and train new and existing 
 45.19  volunteers to provide taxpayer assistance.  This appropriation 
 45.20  is available for fiscal years 2000 and 2001 and does not become 
 45.21  a part of the base. 
 45.22     (b) "Taxpayer assistance services" means accounting and tax 
 45.23  preparation services provided by volunteers to low-income and 
 45.24  disadvantaged Minnesota residents to help them file federal and 
 45.25  state income tax returns and Minnesota property tax refund 
 45.26  claims and to provide personal representation before the 
 45.27  department of revenue and the Internal Revenue Service. 
 45.28     Sec. 32.  [EFFECTIVE DATE.] 
 45.29     (a) Section 1 applies to claims written off after June 30, 
 45.30  1999.  
 45.31     (b) Section 2 is intended to clarify rather than to change 
 45.32  the definition of resident and is effective for all 
 45.33  examinations, claims for refund, administrative appeals, and 
 45.34  court proceedings that are pending or begin on or after the day 
 45.35  following final enactment. 
 45.36     (c) Except as otherwise provided, sections 3 to 5, 7 to 11, 
 46.1   13 to 18, 21, 22, the changes to clauses (b), (c), and (j), 23, 
 46.2   and 26 to 28 are effective for tax years beginning after 
 46.3   December 31, 1998.  The provisions substituting qualifying child 
 46.4   for dependent in sections 4 and 13 are effective for taxable 
 46.5   years beginning after December 31, 1999. 
 46.6      (d) Section 4, clause (4), and section 6 are effective for 
 46.7   taxable years beginning after December 31, 1999. 
 46.8      (e) Section 12, clause (g), is effective for tax years 
 46.9   beginning after December 31, 1997.  The rest of section 12 is 
 46.10  effective for taxable years beginning after December 31, 1998.  
 46.11     (f) Sections 19, 20, and 22, the changes to clause (a), are 
 46.12  effective for tax years beginning on or after the day following 
 46.13  final enactment.  
 46.14     (g) Sections 24 and 25 are effective for taxable years 
 46.15  beginning after December 31, 2000. 
 46.16     (h) Section 29 is effective on the day after final 
 46.17  enactment and applies to tax years beginning before January 1, 
 46.18  1999. 
 46.19     (i) Section 30 is effective for tax years after December 
 46.20  31, 1997, and beginning before January 1, 1999. 
 46.21     (j) Section 31 is effective the day following final 
 46.22  enactment. 
 46.23                             ARTICLE 3 
 46.24                           FEDERAL UPDATE
 46.25     Section 1.  Minnesota Statutes 1998, section 289A.02, 
 46.26  subdivision 7, is amended to read: 
 46.27     Subd. 7.  [INTERNAL REVENUE CODE.] Unless specifically 
 46.28  defined otherwise, "Internal Revenue Code" means the Internal 
 46.29  Revenue Code of 1986, as amended through December 31, 1997 1998. 
 46.30     Sec. 2.  Minnesota Statutes 1998, section 290.01, 
 46.31  subdivision 19, is amended to read: 
 46.32     Subd. 19.  [NET INCOME.] The term "net income" means the 
 46.33  federal taxable income, as defined in section 63 of the Internal 
 46.34  Revenue Code of 1986, as amended through the date named in this 
 46.35  subdivision, incorporating any elections made by the taxpayer in 
 46.36  accordance with the Internal Revenue Code in determining federal 
 47.1   taxable income for federal income tax purposes, and with the 
 47.2   modifications provided in subdivisions 19a to 19f. 
 47.3      In the case of a regulated investment company or a fund 
 47.4   thereof, as defined in section 851(a) or 851(g) of the Internal 
 47.5   Revenue Code, federal taxable income means investment company 
 47.6   taxable income as defined in section 852(b)(2) of the Internal 
 47.7   Revenue Code, except that:  
 47.8      (1) the exclusion of net capital gain provided in section 
 47.9   852(b)(2)(A) of the Internal Revenue Code does not apply; 
 47.10     (2) the deduction for dividends paid under section 
 47.11  852(b)(2)(D) of the Internal Revenue Code must be applied by 
 47.12  allowing a deduction for capital gain dividends and 
 47.13  exempt-interest dividends as defined in sections 852(b)(3)(C) 
 47.14  and 852(b)(5) of the Internal Revenue Code; and 
 47.15     (3) the deduction for dividends paid must also be applied 
 47.16  in the amount of any undistributed capital gains which the 
 47.17  regulated investment company elects to have treated as provided 
 47.18  in section 852(b)(3)(D) of the Internal Revenue Code.  
 47.19     The net income of a real estate investment trust as defined 
 47.20  and limited by section 856(a), (b), and (c) of the Internal 
 47.21  Revenue Code means the real estate investment trust taxable 
 47.22  income as defined in section 857(b)(2) of the Internal Revenue 
 47.23  Code.  
 47.24     The net income of a designated settlement fund as defined 
 47.25  in section 468B(d) of the Internal Revenue Code means the gross 
 47.26  income as defined in section 468B(b) of the Internal Revenue 
 47.27  Code. 
 47.28     The Internal Revenue Code of 1986, as amended through 
 47.29  December 31, 1986, shall be in effect for taxable years 
 47.30  beginning after December 31, 1986.  The provisions of sections 
 47.31  10104, 10202, 10203, 10204, 10206, 10212, 10221, 10222, 10223, 
 47.32  10226, 10227, 10228, 10611, 10631, 10632, and 10711 of the 
 47.33  Omnibus Budget Reconciliation Act of 1987, Public Law Number 
 47.34  100-203, the provisions of sections 1001, 1002, 1003, 1004, 
 47.35  1005, 1006, 1008, 1009, 1010, 1011, 1011A, 1011B, 1012, 1013, 
 47.36  1014, 1015, 1018, 2004, 3041, 4009, 6007, 6026, 6032, 6137, 
 48.1   6277, and 6282 of the Technical and Miscellaneous Revenue Act of 
 48.2   1988, Public Law Number 100-647, the provisions of sections 
 48.3   7811, 7816, and 7831 of the Omnibus Budget Reconciliation Act of 
 48.4   1989, Public Law Number 101-239, the provisions of sections 
 48.5   1305, 1704(r), and 1704(e)(1) of the Small Business Job 
 48.6   Protection Act, Public Law Number 104-188, and the provisions of 
 48.7   sections 975 and 1604(d)(2) and (e) of the Taxpayer Relief Act 
 48.8   of 1997, Public Law Number 105-34, and the provisions of section 
 48.9   4004 of the Omnibus Consolidated and Emergency Supplemental 
 48.10  Appropriations Act, 1999, Public Law Number 105-277 shall be 
 48.11  effective at the time they become effective for federal income 
 48.12  tax purposes.  
 48.13     The Internal Revenue Code of 1986, as amended through 
 48.14  December 31, 1987, shall be in effect for taxable years 
 48.15  beginning after December 31, 1987.  The provisions of sections 
 48.16  4001, 4002, 4011, 5021, 5041, 5053, 5075, 6003, 6008, 6011, 
 48.17  6030, 6031, 6033, 6057, 6064, 6066, 6079, 6130, 6176, 6180, 
 48.18  6182, 6280, and 6281 of the Technical and Miscellaneous Revenue 
 48.19  Act of 1988, Public Law Number 100-647, the provisions of 
 48.20  sections 7815 and 7821 of the Omnibus Budget Reconciliation Act 
 48.21  of 1989, Public Law Number 101-239, and the provisions of 
 48.22  section 11702 of the Revenue Reconciliation Act of 1990, Public 
 48.23  Law Number 101-508, shall become effective at the time they 
 48.24  become effective for federal tax purposes.  
 48.25     The Internal Revenue Code of 1986, as amended through 
 48.26  December 31, 1988, shall be in effect for taxable years 
 48.27  beginning after December 31, 1988.  The provisions of sections 
 48.28  7101, 7102, 7104, 7105, 7201, 7202, 7203, 7204, 7205, 7206, 
 48.29  7207, 7210, 7211, 7301, 7302, 7303, 7304, 7601, 7621, 7622, 
 48.30  7641, 7642, 7645, 7647, 7651, and 7652 of the Omnibus Budget 
 48.31  Reconciliation Act of 1989, Public Law Number 101-239, the 
 48.32  provision of section 1401 of the Financial Institutions Reform, 
 48.33  Recovery, and Enforcement Act of 1989, Public Law Number 101-73, 
 48.34  the provisions of sections 11701 and 11703 of the Revenue 
 48.35  Reconciliation Act of 1990, Public Law Number 101-508, and the 
 48.36  provisions of sections 1702(g) and 1704(f)(2)(A) and (B) of the 
 49.1   Small Business Job Protection Act, Public Law Number 104-188, 
 49.2   shall become effective at the time they become effective for 
 49.3   federal tax purposes.  
 49.4      The Internal Revenue Code of 1986, as amended through 
 49.5   December 31, 1989, shall be in effect for taxable years 
 49.6   beginning after December 31, 1989.  The provisions of sections 
 49.7   11321, 11322, 11324, 11325, 11403, 11404, 11410, and 11521 of 
 49.8   the Revenue Reconciliation Act of 1990, Public Law Number 
 49.9   101-508, and the provisions of sections 13224 and 13261 of the 
 49.10  Omnibus Budget Reconciliation Act of 1993, Public Law Number 
 49.11  103-66, shall become effective at the time they become effective 
 49.12  for federal purposes.  
 49.13     The Internal Revenue Code of 1986, as amended through 
 49.14  December 31, 1990, shall be in effect for taxable years 
 49.15  beginning after December 31, 1990. 
 49.16     The provisions of section 13431 of the Omnibus Budget 
 49.17  Reconciliation Act of 1993, Public Law Number 103-66, shall 
 49.18  become effective at the time they became effective for federal 
 49.19  purposes.  
 49.20     The Internal Revenue Code of 1986, as amended through 
 49.21  December 31, 1991, shall be in effect for taxable years 
 49.22  beginning after December 31, 1991.  
 49.23     The provisions of sections 1936 and 1937 of the 
 49.24  Comprehensive National Energy Policy Act of 1992, Public Law 
 49.25  Number 102-486, the provisions of sections 13101, 13114, 13122, 
 49.26  13141, 13150, 13151, 13174, 13239, 13301, and 13442 of the 
 49.27  Omnibus Budget Reconciliation Act of 1993, Public Law Number 
 49.28  103-66, and the provisions of section 1604(a)(1), (2), and (3) 
 49.29  of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 
 49.30  shall become effective at the time they become effective for 
 49.31  federal purposes.  
 49.32     The Internal Revenue Code of 1986, as amended through 
 49.33  December 31, 1992, shall be in effect for taxable years 
 49.34  beginning after December 31, 1992.  
 49.35     The provisions of sections 13116, 13121, 13206, 13210, 
 49.36  13222, 13223, 13231, 13232, 13233, 13239, 13262, and 13321 of 
 50.1   the Omnibus Budget Reconciliation Act of 1993, Public Law Number 
 50.2   103-66, the provisions of sections 1703(a), 1703(d), 1703(i), 
 50.3   1703(l), and 1703(m) of the Small Business Job Protection Act, 
 50.4   Public Law Number 104-188, and the provision of section 1604(c) 
 50.5   of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 
 50.6   shall become effective at the time they become effective for 
 50.7   federal purposes. 
 50.8      The Internal Revenue Code of 1986, as amended through 
 50.9   December 31, 1993, shall be in effect for taxable years 
 50.10  beginning after December 31, 1993. 
 50.11     The provision of section 741 of Legislation to Implement 
 50.12  Uruguay Round of General Agreement on Tariffs and Trade, Public 
 50.13  Law Number 103-465, the provisions of sections 1, 2, and 3, of 
 50.14  the Self-Employed Health Insurance Act of 1995, Public Law 
 50.15  Number 104-7, the provision of section 501(b)(2) of the Health 
 50.16  Insurance Portability and Accountability Act, Public Law Number 
 50.17  104-191, the provisions of sections 1604 and 1704(p)(1) and (2) 
 50.18  of the Small Business Job Protection Act, Public Law Number 
 50.19  104-188, and the provisions of sections 1011, 1211(b)(1), and 
 50.20  1602(f) of the Taxpayer Relief Act of 1997, Public Law Number 
 50.21  105-34, shall become effective at the time they become effective 
 50.22  for federal purposes. 
 50.23     The Internal Revenue Code of 1986, as amended through 
 50.24  December 31, 1994, shall be in effect for taxable years 
 50.25  beginning after December 31, 1994. 
 50.26     The provisions of sections 1119(a), 1120, 1121, 1202(a), 
 50.27  1444, 1449(b), 1602(a), 1610(a), 1613, and 1805 of the Small 
 50.28  Business Job Protection Act, Public Law Number 104-188, the 
 50.29  provision of section 511 of the Health Insurance Portability and 
 50.30  Accountability Act, Public Law Number 104-191, and the 
 50.31  provisions of sections 1174 and 1601(i)(2) of the Taxpayer 
 50.32  Relief Act of 1997, Public Law Number 105-34, shall become 
 50.33  effective at the time they become effective for federal purposes.
 50.34     The Internal Revenue Code of 1986, as amended through March 
 50.35  22, 1996, is in effect for taxable years beginning after 
 50.36  December 31, 1995. 
 51.1      The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 
 51.2   1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 
 51.3   1616, 1617, 1704(l), and 1704(m) of the Small Business Job 
 51.4   Protection Act, Public Law Number 104-188, the provisions of 
 51.5   Public Law Number 104-117, and the provisions of sections 313(a) 
 51.6   and (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 
 51.7   1002, 1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 
 51.8   1087, 1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 
 51.9   1601(f)(5) and (h), and 1604(d)(1) of the Taxpayer Relief Act of 
 51.10  1997, Public Law Number 105-34, the provisions of section 6010 
 51.11  of the Internal Revenue Service Restructuring and Reform Act of 
 51.12  1998, Public Law Number 105-206, and the provisions of section 
 51.13  4003 of the Omnibus Consolidated and Emergency Supplemental 
 51.14  Appropriations Act, 1999, Public Law Number 105-277, shall 
 51.15  become effective at the time they become effective for federal 
 51.16  purposes. 
 51.17     The Internal Revenue Code of 1986, as amended through 
 51.18  December 31, 1996, shall be in effect for taxable years 
 51.19  beginning after December 31, 1996. 
 51.20     The provisions of sections 202(a) and (b), 221(a), 225, 
 51.21  312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 
 51.22  (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 
 51.23  1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 
 51.24  1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 
 51.25  of the Taxpayer Relief Act of 1997, Public Law Number 
 51.26  105-34, the provisions of sections 6004, 6005, 6012, 6013, 6015, 
 51.27  6016, 7002, and 7003 of the Internal Revenue Service 
 51.28  Restructuring and Reform Act of 1998, Public Law Number 105-206, 
 51.29  and the provisions of section 3001 of the Omnibus Consolidated 
 51.30  and Emergency Supplemental Appropriations Act, 1999, Public Law 
 51.31  Number 105-277, shall become effective at the time they become 
 51.32  effective for federal purposes. 
 51.33     The Internal Revenue Code of 1986, as amended through 
 51.34  December 31, 1997, shall be in effect for taxable years 
 51.35  beginning after December 31, 1997. 
 51.36     The provisions of sections 5002, 6009, 6011, and 7001 of 
 52.1   the Internal Revenue Service Restructuring and Reform Act of 
 52.2   1998, Public Law Number 105-206, the provisions of section 9010 
 52.3   of the Transportation Equity Act for the 21st Century, Public 
 52.4   Law Number 105-178, the provisions of sections 1004, 4002, and 
 52.5   5301 of the Omnibus Consolidation and Emergency Supplemental 
 52.6   Appropriations Act, 1999, Public Law Number 105-277, and the 
 52.7   provision of section 303 of the Ricky Ray Hemophilia Relief Fund 
 52.8   Act of 1998, Public Law Number 105-369, shall become effective 
 52.9   at the time they become effective for federal purposes. 
 52.10     The Internal Revenue Code of 1986, as amended through 
 52.11  December 31, 1998, shall be in effect for taxable years 
 52.12  beginning after December 31, 1998. 
 52.13     Except as otherwise provided, references to the Internal 
 52.14  Revenue Code in subdivisions 19a to 19g mean the code in effect 
 52.15  for purposes of determining net income for the applicable year. 
 52.16     Sec. 3.  Minnesota Statutes 1998, section 290.01, 
 52.17  subdivision 19b, is amended to read: 
 52.18     Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
 52.19  individuals, estates, and trusts, there shall be subtracted from 
 52.20  federal taxable income: 
 52.21     (1) interest income on obligations of any authority, 
 52.22  commission, or instrumentality of the United States to the 
 52.23  extent includable in taxable income for federal income tax 
 52.24  purposes but exempt from state income tax under the laws of the 
 52.25  United States; 
 52.26     (2) if included in federal taxable income, the amount of 
 52.27  any overpayment of income tax to Minnesota or to any other 
 52.28  state, for any previous taxable year, whether the amount is 
 52.29  received as a refund or as a credit to another taxable year's 
 52.30  income tax liability; 
 52.31     (3) the amount paid to others, less the credit allowed 
 52.32  under section 290.0674, not to exceed $1,625 for each dependent 
 52.33  in grades kindergarten to 6 and $2,500 for each dependent in 
 52.34  grades 7 to 12, for tuition, textbooks, and transportation of 
 52.35  each dependent in attending an elementary or secondary school 
 52.36  situated in Minnesota, North Dakota, South Dakota, Iowa, or 
 53.1   Wisconsin, wherein a resident of this state may legally fulfill 
 53.2   the state's compulsory attendance laws, which is not operated 
 53.3   for profit, and which adheres to the provisions of the Civil 
 53.4   Rights Act of 1964 and chapter 363.  For the purposes of this 
 53.5   clause, "tuition" includes fees or tuition as defined in section 
 53.6   290.0674, subdivision 1, clause (1).  As used in this clause, 
 53.7   "textbooks" includes books and other instructional materials and 
 53.8   equipment used in elementary and secondary schools in teaching 
 53.9   only those subjects legally and commonly taught in public 
 53.10  elementary and secondary schools in this state.  Equipment 
 53.11  expenses qualifying for deduction includes expenses as defined 
 53.12  and limited in section 290.0674, subdivision 1, clause (3).  
 53.13  "Textbooks" does not include instructional books and materials 
 53.14  used in the teaching of religious tenets, doctrines, or worship, 
 53.15  the purpose of which is to instill such tenets, doctrines, or 
 53.16  worship, nor does it include books or materials for, or 
 53.17  transportation to, extracurricular activities including sporting 
 53.18  events, musical or dramatic events, speech activities, driver's 
 53.19  education, or similar programs; 
 53.20     (4) to the extent included in federal taxable income, 
 53.21  distributions from a qualified governmental pension plan, an 
 53.22  individual retirement account, simplified employee pension, or 
 53.23  qualified plan covering a self-employed person that represent a 
 53.24  return of contributions that were included in Minnesota gross 
 53.25  income in the taxable year for which the contributions were made 
 53.26  but were deducted or were not included in the computation of 
 53.27  federal adjusted gross income.  The distribution shall be 
 53.28  allocated first to return of contributions until the 
 53.29  contributions included in Minnesota gross income have been 
 53.30  exhausted.  This subtraction applies only to contributions made 
 53.31  in a taxable year prior to 1985; 
 53.32     (5) income as provided under section 290.0802; 
 53.33     (6) the amount of unrecovered accelerated cost recovery 
 53.34  system deductions allowed under subdivision 19g; 
 53.35     (7) to the extent included in federal adjusted gross 
 53.36  income, income realized on disposition of property exempt from 
 54.1   tax under section 290.491; 
 54.2      (8) to the extent not deducted in determining federal 
 54.3   taxable income, the amount paid for health insurance of 
 54.4   self-employed individuals as determined under section 162(l) of 
 54.5   the Internal Revenue Code, except that the 25 percent limit does 
 54.6   not apply.  If the taxpayer deducted insurance payments under 
 54.7   section 213 of the Internal Revenue Code of 1986, the 
 54.8   subtraction under this clause must be reduced by the lesser of: 
 54.9      (i) the total itemized deductions allowed under section 
 54.10  63(d) of the Internal Revenue Code, less state, local, and 
 54.11  foreign income taxes deductible under section 164 of the 
 54.12  Internal Revenue Code and the standard deduction under section 
 54.13  63(c) of the Internal Revenue Code; or 
 54.14     (ii) the lesser of (A) the amount of insurance qualifying 
 54.15  as "medical care" under section 213(d) of the Internal Revenue 
 54.16  Code to the extent not deducted under section 162(1) of the 
 54.17  Internal Revenue Code or excluded from income or (B) the total 
 54.18  amount deductible for medical care under section 213(a); 
 54.19     (9) the exemption amount allowed under Laws 1995, chapter 
 54.20  255, article 3, section 2, subdivision 3; 
 54.21     (10) to the extent included in federal taxable income, 
 54.22  postservice benefits for youth community service under section 
 54.23  124D.42 for volunteer service under United States Code, title 
 54.24  42, section 5011(d), as amended; 
 54.25     (11) to the extent not subtracted under clause (1), the 
 54.26  amount of income or gain included in federal taxable income 
 54.27  under section 1366 of the Internal Revenue Code flowing from a 
 54.28  corporation that has a valid election in effect for the taxable 
 54.29  year under section 1362 of the Internal Revenue Code which is 
 54.30  not allowed to be an "S" corporation under section 290.9725; 
 54.31     (12) in the year stock of a corporation that had made a 
 54.32  valid election under section 1362 of the Internal Revenue Code 
 54.33  but was not an "S" corporation under section 290.9725 is sold or 
 54.34  disposed of in a transaction taxable under the Internal Revenue 
 54.35  Code, the amount of difference between the Minnesota basis of 
 54.36  the stock under subdivision 19f, paragraph (m), and the federal 
 55.1   basis if the Minnesota basis is higher than the shareholder's 
 55.2   federal basis; and 
 55.3      (13) an amount equal to an individual's, trust's, or 
 55.4   estate's net federal income tax liability for the tax year that 
 55.5   is attributable to items of income, expense, gain, loss, or 
 55.6   credits federally flowing to the taxpayer in the tax year from a 
 55.7   corporation, having a valid election in effect for federal tax 
 55.8   purposes under section 1362 of the Internal Revenue Code but not 
 55.9   treated as an "S" corporation for state tax purposes under 
 55.10  section 290.9725. 
 55.11     Sec. 4.  Minnesota Statutes 1998, section 290.01, 
 55.12  subdivision 31, is amended to read: 
 55.13     Subd. 31.  [INTERNAL REVENUE CODE.] Unless specifically 
 55.14  defined otherwise, "Internal Revenue Code" means the Internal 
 55.15  Revenue Code of 1986, as amended through December 31, 1997 1998. 
 55.16     Sec. 5.  Minnesota Statutes 1998, section 290A.03, 
 55.17  subdivision 15, is amended to read: 
 55.18     Subd. 15.  [INTERNAL REVENUE CODE.] "Internal Revenue Code" 
 55.19  means the Internal Revenue Code of 1986, as amended through 
 55.20  December 31, 1997 1998. 
 55.21     Sec. 6.  Minnesota Statutes 1998, section 291.005, 
 55.22  subdivision 1, is amended to read: 
 55.23     Subdivision 1.  Unless the context otherwise clearly 
 55.24  requires, the following terms used in this chapter shall have 
 55.25  the following meanings: 
 55.26     (1) "Federal gross estate" means the gross estate of a 
 55.27  decedent as valued and otherwise determined for federal estate 
 55.28  tax purposes by federal taxing authorities pursuant to the 
 55.29  provisions of the Internal Revenue Code. 
 55.30     (2) "Minnesota gross estate" means the federal gross estate 
 55.31  of a decedent after (a) excluding therefrom any property 
 55.32  included therein which has its situs outside Minnesota and (b) 
 55.33  including therein any property omitted from the federal gross 
 55.34  estate which is includable therein, has its situs in Minnesota, 
 55.35  and was not disclosed to federal taxing authorities.  
 55.36     (3) "Personal representative" means the executor, 
 56.1   administrator or other person appointed by the court to 
 56.2   administer and dispose of the property of the decedent.  If 
 56.3   there is no executor, administrator or other person appointed, 
 56.4   qualified, and acting within this state, then any person in 
 56.5   actual or constructive possession of any property having a situs 
 56.6   in this state which is included in the federal gross estate of 
 56.7   the decedent shall be deemed to be a personal representative to 
 56.8   the extent of the property and the Minnesota estate tax due with 
 56.9   respect to the property. 
 56.10     (4) "Resident decedent" means an individual whose domicile 
 56.11  at the time of death was in Minnesota. 
 56.12     (5) "Nonresident decedent" means an individual whose 
 56.13  domicile at the time of death was not in Minnesota. 
 56.14     (6) "Situs of property" means, with respect to real 
 56.15  property, the state or country in which it is located; with 
 56.16  respect to tangible personal property, the state or country in 
 56.17  which it was normally kept or located at the time of the 
 56.18  decedent's death; and with respect to intangible personal 
 56.19  property, the state or country in which the decedent was 
 56.20  domiciled at death. 
 56.21     (7) "Commissioner" means the commissioner of revenue or any 
 56.22  person to whom the commissioner has delegated functions under 
 56.23  this chapter. 
 56.24     (8) "Internal Revenue Code" means the United States 
 56.25  Internal Revenue Code of 1986, as amended through December 31, 
 56.26  1997 1998. 
 56.27     Sec. 7.  [EFFECTIVE DATES.] 
 56.28     Sections 1, 4, 5, and 6 are effective at the same time 
 56.29  federal changes made by the Internal Revenue Service 
 56.30  Restructuring and Reform Act of 1998, Public Law Number 105-206 
 56.31  and the Omnibus Consolidation and Emergency Supplemental 
 56.32  Appropriations Act, 1999, Public Law Number 105-277 which are 
 56.33  incorporated into Minnesota Statutes, chapters 289A, 290, 290A, 
 56.34  and 291 by these sections become effective for federal tax 
 56.35  purposes.  Section 3 is effective for tax years beginning after 
 56.36  December 31, 1998. 
 57.1                              ARTICLE 4 
 57.2                         SALES AND USE TAXES 
 57.3      Section 1.  Minnesota Statutes 1998, section 289A.18, 
 57.4   subdivision 4, is amended to read: 
 57.5      Subd. 4.  [SALES AND USE TAX RETURNS.] (a) Sales and use 
 57.6   tax returns must be filed on or before the 20th day of the month 
 57.7   following the close of the preceding reporting period, except 
 57.8   that annual use tax returns provided for under section 289A.11, 
 57.9   subdivision 1, must be filed by April 15 following the close of 
 57.10  the calendar year, in the case of individuals.  Annual use tax 
 57.11  returns of businesses, including sole proprietorships, and 
 57.12  annual sales tax returns must be filed by February 5 following 
 57.13  the close of the calendar year.  
 57.14     (b) Except for the return for the June reporting period, 
 57.15  which is due on the following August 25, returns filed by 
 57.16  retailers required to remit liabilities by means of funds 
 57.17  transfer under section 289A.20, subdivision 4, paragraph (d), 
 57.18  are due on or before the 25th day of the month following the 
 57.19  close of the preceding reporting period.  
 57.20     (c) If a retailer has an average sales and use tax 
 57.21  liability, including local sales and use taxes administered by 
 57.22  the commissioner, equal to or less than $500 per month in any 
 57.23  quarter of a calendar year, and has substantially complied with 
 57.24  the tax laws during the preceding four calendar quarters, the 
 57.25  retailer may request authorization to file and pay the taxes 
 57.26  quarterly in subsequent calendar quarters.  The authorization 
 57.27  remains in effect during the period in which the retailer's 
 57.28  quarterly returns reflect sales and use tax liabilities of less 
 57.29  than $1,500 and there is continued compliance with state tax 
 57.30  laws. 
 57.31     (d) If a retailer has an average sales and use tax 
 57.32  liability, including local sales and use taxes administered by 
 57.33  the commissioner, equal to or less than $100 per month during a 
 57.34  calendar year, and has substantially complied with the tax laws 
 57.35  during that period, the retailer may request authorization to 
 57.36  file and pay the taxes annually in subsequent years.  The 
 58.1   authorization remains in effect during the period in which the 
 58.2   retailer's annual returns reflect sales and use tax liabilities 
 58.3   of less than $1,200 and there is continued compliance with state 
 58.4   tax laws. 
 58.5      (e) The commissioner may also grant quarterly or annual 
 58.6   filing and payment authorizations to retailers if the 
 58.7   commissioner concludes that the retailers' future tax 
 58.8   liabilities will be less than the monthly totals identified in 
 58.9   paragraphs (c) and (d).  An authorization granted under this 
 58.10  paragraph is subject to the same conditions as an authorization 
 58.11  granted under paragraphs (c) and (d). 
 58.12     (f) A taxpayer who is a materials supplier may report gross 
 58.13  receipts either on: 
 58.14     (1) the cash basis as the consideration is received; or 
 58.15     (2) the accrual basis as sales are made.  
 58.16  As used in this paragraph, "materials supplier" means a person 
 58.17  who provides materials for the improvement of real property; who 
 58.18  is primarily engaged in the sale of lumber and building 
 58.19  materials-related products to owners, contractors, 
 58.20  subcontractors, repairers, or consumers; who is authorized to 
 58.21  file a mechanics lien upon real property and improvements under 
 58.22  chapter 514; and who files with the commissioner an election to 
 58.23  file sales and use tax returns on the basis of this paragraph. 
 58.24     Sec. 2.  Minnesota Statutes 1998, section 289A.20, 
 58.25  subdivision 4, is amended to read: 
 58.26     Subd. 4.  [SALES AND USE TAX.] (a) The taxes imposed by 
 58.27  chapter 297A are due and payable to the commissioner monthly on 
 58.28  or before the 20th day of the month following the month in which 
 58.29  the taxable event occurred, or following another reporting 
 58.30  period as the commissioner prescribes or as allowed under 
 58.31  section 289A.18, subdivision 4, paragraph (f), except that use 
 58.32  taxes due on an annual use tax return as provided under section 
 58.33  289A.11, subdivision 1, are payable by April 15 following the 
 58.34  close of the calendar year. 
 58.35     (b) A vendor having a liability of $120,000 or more during 
 58.36  a fiscal year ending June 30 must remit the June liability for 
 59.1   the next year in the following manner: 
 59.2      (1) Two business days before June 30 of the year, the 
 59.3   vendor must remit 75 percent of the estimated June liability to 
 59.4   the commissioner.  
 59.5      (2) On or before August 14 of the year, the vendor must pay 
 59.6   any additional amount of tax not remitted in June. 
 59.7      (c) A vendor having a liability of $120,000 or more during 
 59.8   a fiscal year ending June 30 must remit all liabilities in the 
 59.9   subsequent calendar year by means of a funds transfer as defined 
 59.10  in section 336.4A-104, paragraph (a).  The funds transfer 
 59.11  payment date, as defined in section 336.4A-401, must be on or 
 59.12  before the 14th day of the month following the month in which 
 59.13  the taxable event occurred, or on or before the 14th day of the 
 59.14  month following the month in which the sale is reported under 
 59.15  section 289A.18, subdivision 4, except for 75 percent of the 
 59.16  estimated June liability, which is due two business days before 
 59.17  June 30.  The remaining amount of the June liability is due on 
 59.18  August 14.  If the date the tax is due is not a funds transfer 
 59.19  business day, as defined in section 336.4A-105, paragraph (a), 
 59.20  clause (4), the payment date must be on or before the funds 
 59.21  transfer business day next following the date the tax is due. 
 59.22     (d) If the vendor required to remit by electronic funds 
 59.23  transfer as provided in paragraph (c) is unable due to 
 59.24  reasonable cause to determine the actual sales and use tax due 
 59.25  on or before the due date for payment, the vendor may remit an 
 59.26  estimate of the tax owed using one of the following options: 
 59.27     (1) 100 percent of the tax reported on the previous month's 
 59.28  sales and use tax return; 
 59.29     (2) 100 percent of the tax reported on the sales and use 
 59.30  tax return for the same month in the previous calendar year; or 
 59.31     (3) 95 percent of the actual tax due. 
 59.32     Any additional amount of tax that is not remitted on or 
 59.33  before the due date for payment, must be remitted with the 
 59.34  return.  If a vendor fails to remit the actual liability or does 
 59.35  not remit using one of the estimate options by the due date for 
 59.36  payment, the vendor must remit actual liability as provided in 
 60.1   paragraph (c) in all subsequent periods.  This paragraph does 
 60.2   not apply to the June sales and use tax liability. 
 60.3      Sec. 3.  Minnesota Statutes 1998, section 289A.56, 
 60.4   subdivision 4, is amended to read: 
 60.5      Subd. 4.  [CAPITAL EQUIPMENT REFUNDS; REFUNDS TO 
 60.6   PURCHASERS.] Notwithstanding subdivision 3, for refunds payable 
 60.7   under section 297A.15, subdivision 5, interest is computed from 
 60.8   the date the refund claim is filed with the commissioner.  For 
 60.9   refunds payable under section 289A.50, subdivision 2a, interest 
 60.10  is computed from the 20th day of the month following the month 
 60.11  of the invoice date for the purchase which is the subject of the 
 60.12  refund, if the refund claim includes a detailed schedule of 
 60.13  purchases made during each of the periods in the claim.  If the 
 60.14  refund claim submitted does not contain a schedule reflecting 
 60.15  purchases made in each period, interest is computed from the 
 60.16  date the claim was filed. 
 60.17     Sec. 4.  Minnesota Statutes 1998, section 297A.25, 
 60.18  subdivision 9, is amended to read: 
 60.19     Subd. 9.  [MATERIALS CONSUMED IN PRODUCTION.] The gross 
 60.20  receipts from the sale of and the storage, use, or consumption 
 60.21  of all materials, including chemicals, fuels, petroleum 
 60.22  products, lubricants, packaging materials, including returnable 
 60.23  containers used in packaging food and beverage products, feeds, 
 60.24  seeds, fertilizers, electricity, gas and steam, used or consumed 
 60.25  in agricultural or industrial production of personal property 
 60.26  intended to be sold ultimately at retail, whether or not the 
 60.27  item so used becomes an ingredient or constituent part of the 
 60.28  property produced are exempt.  Seeds, trees, fertilizers, and 
 60.29  herbicides purchased for use by farmers in the Conservation 
 60.30  Reserve Program under United States Code, title 16, section 
 60.31  590h, as amended through December 31, 1991, the Integrated Farm 
 60.32  Management Program under section 1627 of Public Law Number 
 60.33  101-624, the Wheat and Feed Grain Programs under sections 301 to 
 60.34  305 and 401 to 405 of Public Law Number 101-624, and the 
 60.35  conservation reserve program under sections 103F.505 to 
 60.36  103F.531, are included in this exemption.  Sales to a 
 61.1   veterinarian of materials used or consumed in the care, 
 61.2   medication, and treatment of horses and agricultural production 
 61.3   animals are exempt under this subdivision.  Chemicals used for 
 61.4   cleaning food processing machinery and equipment are included in 
 61.5   this exemption.  Materials, including chemicals, fuels, and 
 61.6   electricity purchased by persons engaged in agricultural or 
 61.7   industrial production to treat waste generated as a result of 
 61.8   the production process are included in this exemption.  Such 
 61.9   production shall include, but is not limited to, research, 
 61.10  development, design or production of any tangible personal 
 61.11  property, manufacturing, processing (other than by restaurants 
 61.12  and consumers) of agricultural products whether vegetable or 
 61.13  animal, commercial fishing, refining, smelting, reducing, 
 61.14  brewing, distilling, printing, mining, quarrying, lumbering, 
 61.15  generating electricity and the production of road building 
 61.16  materials.  Such production shall not include painting, 
 61.17  cleaning, repairing or similar processing of property except as 
 61.18  part of the original manufacturing process.  Machinery, 
 61.19  equipment, implements, tools, accessories, appliances, 
 61.20  contrivances, furniture and fixtures, used in such production 
 61.21  and fuel, electricity, gas or steam used for space heating or 
 61.22  lighting, are not included within this exemption; however, 
 61.23  accessory tools, equipment and other short lived items, which 
 61.24  are separate detachable units used in producing a direct effect 
 61.25  upon the product, where such items have an ordinary useful life 
 61.26  of less than 12 months, are included within the exemption 
 61.27  provided herein.  The following materials, tools, and equipment 
 61.28  used in metalcasting are exempt under this subdivision: 
 61.29  crucibles, thermocouple protection sheaths and tubes, stalk 
 61.30  tubes, refractory materials, molten metal filters and filter 
 61.31  boxes, and degassing lances.  Electricity used to make snow for 
 61.32  outdoor use for ski hills, ski slopes, or ski trails is included 
 61.33  in this exemption.  Petroleum and special fuels used in 
 61.34  producing or generating power for propelling ready-mixed 
 61.35  concrete trucks on the public highways of this state are not 
 61.36  included in this exemption. 
 62.1      Sec. 5.  Minnesota Statutes 1998, section 297A.25, 
 62.2   subdivision 63, is amended to read: 
 62.3      Subd. 63.  [HOSPITALS AND OUTPATIENT SURGICAL CENTERS.] (a) 
 62.4   The gross receipts from the sale of tangible personal property 
 62.5   to, and the storage, use, or consumption of such property by, a 
 62.6   hospital are exempt, if the property purchased is to be used in 
 62.7   providing hospital services to human beings.  For purposes of 
 62.8   this subdivision, "hospital" means a hospital organized and 
 62.9   operated for charitable purposes within the meaning of section 
 62.10  501(c)(3) of the Internal Revenue Code of 1986, as amended, and 
 62.11  licensed under chapter 144 or by any other jurisdiction.  For 
 62.12  purposes of this subdivision, "hospital services" are means 
 62.13  services authorized or required to be performed by 
 62.14  a "hospital" hospital under chapter 144 and regulations rules 
 62.15  thereunder or under the applicable licensure law of any other 
 62.16  jurisdiction.  This exemption does 
 62.17     (b) The gross receipts from the sale of tangible personal 
 62.18  property to, and the storage, use, or consumption of such 
 62.19  property by, an outpatient surgical center are exempt, if the 
 62.20  property purchased is to be used in providing outpatient 
 62.21  surgical services to human beings.  For purposes of this 
 62.22  subdivision, "outpatient surgical center" means an outpatient 
 62.23  surgical center organized and operated for charitable purposes 
 62.24  within the meaning of section 501(c)(3) of the Internal Revenue 
 62.25  Code of 1986, as amended, and licensed under chapter 144 or by 
 62.26  any other jurisdiction.  For the purposes of this subdivision, 
 62.27  "outpatient surgical services" means:  (1) services authorized 
 62.28  or required to be performed by an outpatient surgical center 
 62.29  under chapter 144 and rules thereunder or under the applicable 
 62.30  licensure law of any other jurisdiction; and (2) urgent care.  
 62.31  For purposes of this subdivision, "urgent care" means health 
 62.32  services furnished to a person whose medical condition is 
 62.33  sufficiently acute to require treatment unavailable through, or 
 62.34  inappropriate to be provided by, a clinic or physician's office, 
 62.35  but not so acute as to require treatment in a hospital emergency 
 62.36  room.  
 63.1      (c) These exemptions do not apply to purchases made by a 
 63.2   clinic, physician's office, or any other medical facility not 
 63.3   operating as a hospital or outpatient surgical center, even 
 63.4   though the clinic, office, or facility may be owned and operated 
 63.5   by a hospital or outpatient surgical center.  Sales exempted by 
 63.6   this subdivision do not include sales under section 297A.01, 
 63.7   subdivision 3, paragraphs (c) and (e).  This exemption 
 63.8   does These exemptions do not apply to building, construction, or 
 63.9   reconstruction materials purchased by a contractor or a 
 63.10  subcontractor as a part of a lump-sum contract or similar type 
 63.11  of contract with a guaranteed maximum price covering both labor 
 63.12  and materials for use in the construction, alteration, or repair 
 63.13  of a hospital or outpatient surgical center.  This exemption 
 63.14  does These exemptions do not apply to construction materials to 
 63.15  be used in constructing buildings or facilities which will not 
 63.16  be used principally by a hospital or outpatient surgical 
 63.17  center.  This exemption does These exemptions do not apply to 
 63.18  the leasing of a motor vehicle as defined in section 297B.01, 
 63.19  subdivision 5. 
 63.20     Sec. 6.  Minnesota Statutes 1998, section 297A.25, 
 63.21  subdivision 73, is amended to read: 
 63.22     Subd. 73.  [BIOSOLIDS PROCESSING EQUIPMENT.] (a) The gross 
 63.23  receipts from the sale of and the storage, use, or consumption 
 63.24  of equipment designed to process, dewater, and recycle biosolids 
 63.25  for wastewater treatment facilities of political subdivisions, 
 63.26  and materials incidental to installation of that equipment, are 
 63.27  exempt. 
 63.28     (b) The gross receipts from the sale of and the storage, 
 63.29  use, or consumption of materials used to construct buildings to 
 63.30  house the equipment in paragraph (a) are exempt if purchased 
 63.31  after June 30, 1998, and before July 1, 2001. 
 63.32     Sec. 7.  Minnesota Statutes 1998, section 297A.25, is 
 63.33  amended by adding a subdivision to read: 
 63.34     Subd. 79.  [PRIZES.] The gross receipts from the sales of 
 63.35  tangible personal property which will be given as prizes to 
 63.36  players in games of skill or chance conducted at events such as 
 64.1   community festivals, fairs, and carnivals lasting less than six 
 64.2   days are exempt.  This exemption shall not apply to property 
 64.3   awarded as prizes in connection with lawful gambling as defined 
 64.4   in section 349.12 or the state lottery. 
 64.5      Sec. 8.  Minnesota Statutes 1998, section 297A.25, is 
 64.6   amended by adding a subdivision to read: 
 64.7      Subd. 80.  [CONSTRUCTION MATERIALS AND SUPPLIES; 
 64.8   AGRICULTURAL PROCESSING FACILITY.] Purchases of construction 
 64.9   materials, supplies, and equipment are exempt from the sales and 
 64.10  use taxes imposed under this chapter, regardless of whether 
 64.11  purchased by the owner or a contractor, subcontractor, or 
 64.12  builder, if: 
 64.13     (1) the materials and supplies are used or consumed in, and 
 64.14  the equipment is incorporated into, the expansion, remodeling, 
 64.15  or improvement of a facility used for cattle slaughtering; 
 64.16     (2) the cost of the project is expected to exceed 
 64.17  $15,000,000; 
 64.18     (3) the expansion, remodeling, or improvement of the 
 64.19  facility will be used to fabricate beef; 
 64.20     (4) the number of jobs at the facility are expected to 
 64.21  increase by at least 150 when the project is completed; and 
 64.22     (5) the project is expected to be completed by December 31, 
 64.23  2001. 
 64.24     Sec. 9.  Minnesota Statutes 1998, section 297A.25, is 
 64.25  amended by adding a subdivision to read: 
 64.26     Subd. 82.  [TELEVISION COMMERCIALS.] The gross receipts 
 64.27  from the sale of and storage, use, or consumption of tangible 
 64.28  personal property which is primarily used or consumed in the 
 64.29  preproduction, production, or postproduction of any television 
 64.30  commercial and any such commercial, regardless of the medium in 
 64.31  which it is transferred, are exempt.  "Preproduction" and 
 64.32  "production" include but are not limited to all activities 
 64.33  related to the preparation for shooting and the shooting of 
 64.34  television commercials, including film processing.  Equipment 
 64.35  rented for the preproduction and production activities is 
 64.36  exempt.  "Postproduction" includes but is not limited to all 
 65.1   activities related to the finishing and duplication of 
 65.2   television commercials.  This exemption does not apply to 
 65.3   tangible personal property used primarily in administration, 
 65.4   general management, or marketing.  Machinery and equipment 
 65.5   purchased for use in producing such commercials and fuel, 
 65.6   electricity, gas, or steam used for space heating or lighting 
 65.7   are not exempt under this subdivision. 
 65.8      Sec. 10.  Minnesota Statutes 1998, section 297A.25, is 
 65.9   amended by adding a subdivision to read: 
 65.10     Subd. 83.  [CONSTRUCTION MATERIALS AND EQUIPMENT; BIOMASS 
 65.11  ELECTRICAL GENERATING FACILITY.] The gross receipts from the 
 65.12  purchases of materials and supplies used or consumed in, and 
 65.13  equipment incorporated into, the construction, improvement, or 
 65.14  expansion of a facility using biomass to generate electricity 
 65.15  are exempt from the sales and use taxes imposed under this 
 65.16  chapter, regardless of whether purchased by the owner or a 
 65.17  contractor, subcontractor, or builder, if: 
 65.18     (1) the facility exclusively utilizes residue wood, 
 65.19  sawdust, bark, chipped wood, or brush to generate electricity; 
 65.20     (2) the facility utilizes a reciprocated grate combination 
 65.21  system; and 
 65.22     (3) the total gross capacity of the facility is 15 to 21 
 65.23  megawatts. 
 65.24     Sec. 11.  Minnesota Statutes 1998, section 297A.25, is 
 65.25  amended by adding a subdivision to read: 
 65.26     Subd. 84.  [WASTE MANAGEMENT CONTAINERS AND 
 65.27  COMPACTORS.] The gross receipts from the sale of and storage, 
 65.28  use, or consumption of compactors and waste collection 
 65.29  containers are exempt from the sales and use taxes imposed under 
 65.30  this chapter provided that they are purchased by a waste 
 65.31  management service provider, and are used in providing waste 
 65.32  management services as defined in section 297H.01, subdivision 
 65.33  12.  A waste management service provider that does not remit tax 
 65.34  on customer charges or lease or rental payments for compactors 
 65.35  and waste collection containers under chapter 297H is ineligible 
 65.36  for this exemption. 
 66.1      Sec. 12.  Minnesota Statutes 1998, section 297A.48, is 
 66.2   amended by adding a subdivision to read: 
 66.3      Subd. 1a.  [RULES FOR ADOPTION, USE, TERMINATION.] (a) 
 66.4   Imposition of a local sales tax is subject to approval by voters 
 66.5   of the political subdivision at a general election. 
 66.6      (b) The proceeds of the tax must be dedicated exclusively 
 66.7   to payment of the cost of a specific capital improvement which 
 66.8   is designated at least 90 days before the referendum on 
 66.9   imposition of the tax is conducted. 
 66.10     (c) The tax must terminate after the improvement designated 
 66.11  under paragraph (b) has been completed. 
 66.12     (d) After a sales tax imposed by a political subdivision 
 66.13  has expired or been terminated, the political subdivision is 
 66.14  prohibited from imposing a local sales tax for a period of one 
 66.15  year.  Notwithstanding subdivision 10, this paragraph applies to 
 66.16  all local sales taxes in effect at the time of or imposed after 
 66.17  the date of enactment of this section.  
 66.18     Sec. 13.  Minnesota Statutes 1998, section 297A.48, is 
 66.19  amended by adding a subdivision to read: 
 66.20     Subd. 7a.  [USE OF ZIP CODE IN DETERMINING LOCATION OF 
 66.21  SALE.] To determine whether to impose the local tax, the 
 66.22  retailer may use zip codes if the zip code area is entirely 
 66.23  within the political subdivision.  When a zip code area is not 
 66.24  entirely within a political subdivision, the retailer shall not 
 66.25  collect the local tax if the purchaser notified the retailer 
 66.26  that their delivery address is outside of the political 
 66.27  subdivision, unless the retailer verifies that the delivery 
 66.28  address is in the political subdivision using a means other than 
 66.29  the zip code.  Notwithstanding subdivision 10, this subdivision 
 66.30  applies to all local sales taxes without regard to the date of 
 66.31  authorization. 
 66.32     Sec. 14.  Laws 1998, chapter 389, article 8, section 44, 
 66.33  subdivision 5, is amended to read: 
 66.34     Subd. 5.  [USE OF REVENUES.] (a) Revenues received from the 
 66.35  taxes authorized by subdivisions 1 to 4 must be used to pay for 
 66.36  the cost of collecting the taxes; to pay all or part of the 
 67.1   capital or administrative cost of the acquisition, construction, 
 67.2   and improvement of the Central Minnesota Events Center and 
 67.3   related on-site and off-site improvements; and to pay for the 
 67.4   operating deficit, if any, in the first five years of operation 
 67.5   of the facility.  Authorized expenses related to acquisition, 
 67.6   construction, and improvement of the center include, but are not 
 67.7   limited to, acquiring property, paying construction and 
 67.8   operating expenses related to the development of the facility, 
 67.9   and securing and paying debt service on bonds or other 
 67.10  obligations issued to finance construction or improvement of the 
 67.11  authorized facility. 
 67.12     (b) In addition, if the revenues collected from a tax 
 67.13  imposed in subdivisions 1 to 4 are greater than the amount 
 67.14  needed to meet obligations under paragraph (a) in any year, the 
 67.15  surplus may be returned to the cities in a manner agreed upon by 
 67.16  the participating cities under this section, to be used by the 
 67.17  cities for projects of regional significance, limited to the 
 67.18  acquisition and improvement of park land and open space; the 
 67.19  purchase, renovation, and construction of public buildings and 
 67.20  land primarily used for the arts, libraries, and community 
 67.21  centers; and for debt service on bonds issued for these 
 67.22  purposes.  The amount of surplus revenues raised by a tax will 
 67.23  be determined either as provided for by an applicable joint 
 67.24  powers agreement or by a governing entity in charge of 
 67.25  administering the project in paragraph (a). 
 67.26     (c) If start of the Central Minnesota Events Center under 
 67.27  paragraph (a) is delayed, the cities may still impose the tax, 
 67.28  and use a portion of the revenue to fund the projects under 
 67.29  paragraph (b), provided that revenues are reserved to pay future 
 67.30  costs of the construction of the events center in paragraph (a) 
 67.31  as provided by a joint powers agreement or by a governing entity 
 67.32  in charge of administering the project.  If a decision is made 
 67.33  not to proceed with the event center under paragraph (a) or 
 67.34  construction of the event center has not begun by December 31, 
 67.35  2007, the funds in the reserve account shall be distributed to 
 67.36  the cities based on the joint powers agreement to pay for other 
 68.1   projects permitted under paragraph (b).  All revenues raised 
 68.2   from these taxes after December 31, 2008, must be used 
 68.3   exclusively to pay off bonds for the event center project under 
 68.4   paragraph (a) and to pay off bonds issued under subdivision 6. 
 68.5      Sec. 15.  Laws 1998, chapter 389, article 8, section 44, 
 68.6   subdivision 6, is amended to read: 
 68.7      Subd. 6.  [BONDING AUTHORITY.] (a) The cities named in 
 68.8   subdivision 1 may issue bonds under Minnesota Statutes, chapter 
 68.9   475, to finance the acquisition, construction, and improvement 
 68.10  of the Central Minnesota Events Center.  An election to approve 
 68.11  the bonds under Minnesota Statutes, section 475.58, may be held 
 68.12  in combination with the election to authorize imposition of the 
 68.13  tax under subdivision 1.  Whether to permit imposition of the 
 68.14  tax and issuance of bonds may be posed to the voters as a single 
 68.15  question.  The question must state that the sales tax revenues 
 68.16  are pledged to pay the bonds, but that the bonds are general 
 68.17  obligations and will be guaranteed by the city's property taxes. 
 68.18     (b) The issuance of bonds under this subdivision is not 
 68.19  subject to Minnesota Statutes, section 275.60. 
 68.20     (c) The bonds are not included in computing any debt 
 68.21  limitation applicable to the city, and the levy of taxes under 
 68.22  Minnesota Statutes, section 475.61, to pay principal of and 
 68.23  interest on the bonds is not subject to any levy limitation. 
 68.24  The aggregate principal amount of bonds issued by all cities 
 68.25  named in subdivision 1, plus the aggregate of the taxes used 
 68.26  directly to pay eligible capital expenditures and improvements 
 68.27  for the Central Minnesota Events Center, may not exceed 
 68.28  $50,000,000, plus an amount equal to the costs related to 
 68.29  issuance of the bonds, less any amount made available to the 
 68.30  cities for the project described in subdivision 5 under the 
 68.31  capital expenditure legislation adopted during the 1998 session 
 68.32  of the legislature. 
 68.33     (d) The taxes may be pledged to and used for the payment of 
 68.34  the bonds and any bonds issued to refund them, only if the bonds 
 68.35  and any refunding bonds are general obligations of the city. 
 68.36     (e) The cities named in subdivision 1 may issue bonds for 
 69.1   the projects listed in subdivision 5, paragraph (b), under 
 69.2   regular bonding authority.  Bonds for these projects, to be paid 
 69.3   from tax revenues under this section, may not be issued after 
 69.4   December 31, 2008. 
 69.5      Sec. 16.  Laws 1998, chapter 389, article 8, section 44, 
 69.6   subdivision 7, as amended by Laws 1998, chapter 408, section 20, 
 69.7   is amended to read: 
 69.8      Subd. 7.  [TERMINATION OF TAXES.] The taxes imposed by each 
 69.9   city under subdivisions 1 to 4 expire at the earlier of 30 years 
 69.10  or when sufficient funds have been received from the taxes to 
 69.11  finance the obligations under subdivisions 5, paragraph (a), and 
 69.12  6, and to prepay or retire at maturity the principal, interest, 
 69.13  and premium due on the original bonds issued for the initial 
 69.14  acquisition, construction, and improvement of the Central 
 69.15  Minnesota Events Center as determined under an applicable joint 
 69.16  powers agreement or by a governing entity in charge of 
 69.17  administering the project.  Any funds remaining after completion 
 69.18  of the project and retirement or redemption of the bonds may be 
 69.19  placed in the general funds of the cities imposing the taxes.  
 69.20  The taxes imposed by a city under this section may expire at an 
 69.21  earlier time by city ordinance, if authorized under the 
 69.22  applicable joint powers agreement or by the governing entity in 
 69.23  charge of administering the project. 
 69.24     If the cities that pass a referendum required under 
 69.25  subdivision 6 1 determine that the revenues raised from the sum 
 69.26  of all the taxes authorized by referendum under this subdivision 
 69.27  section will not be sufficient to fund the project in 
 69.28  subdivision 5, paragraph (a), none of the authorized taxes may 
 69.29  be imposed. 
 69.30     If the taxes are imposed, as allowed under subdivision 5, 
 69.31  paragraph (c), and the cities determine at a later date that 
 69.32  there are not sufficient funds to fund the Central Minnesota 
 69.33  Events Center under subdivision 5, paragraph (a), or the funding 
 69.34  for the event center has not been determined by December 31, 
 69.35  2008, the taxes will be terminated as soon as sufficient 
 69.36  revenues are raised to prepay or retire at maturity the 
 70.1   principal, interest, and premium due on bonds issued under 
 70.2   subdivision 6, paragraph (e). 
 70.3      Sec. 17.  [CITY OF NEW ULM; TAXES AUTHORIZED.] 
 70.4      Subdivision 1.  [SALES AND USE TAX.] Notwithstanding 
 70.5   Minnesota Statutes, section 477A.016, or any other provision of 
 70.6   law, ordinance, or city charter, if approved by the city voters 
 70.7   at the first municipal general election held after the date of 
 70.8   final enactment of this act, the city of New Ulm may impose by 
 70.9   ordinance a sales and use tax of up to one-half of one percent 
 70.10  for the purposes specified in subdivision 3.  The provisions of 
 70.11  Minnesota Statutes, section 297A.48, govern the imposition, 
 70.12  administration, collection, and enforcement of the tax 
 70.13  authorized under this subdivision. 
 70.14     Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
 70.15  Minnesota Statutes, section 477A.016, or any other provision of 
 70.16  law, ordinance, or city charter, the city of New Ulm may impose 
 70.17  by ordinance, for the purposes specified in subdivision 3, an 
 70.18  excise tax of up to $20 per motor vehicle, as defined by 
 70.19  ordinance, purchased or acquired from any person engaged within 
 70.20  the city in the business of selling motor vehicles at retail. 
 70.21     Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
 70.22  authorized by subdivisions 1 and 2 must be used by the city to 
 70.23  pay the cost of collecting the taxes and to pay for construction 
 70.24  and improvement of a civic and community center and recreational 
 70.25  facilities to serve all ages, including seniors and youth.  
 70.26  Authorized expenses include, but are not limited to, acquiring 
 70.27  property, paying construction and operating expenses related to 
 70.28  the development of an authorized facility, funding facilities 
 70.29  replacement reserves, and paying debt service on bonds or other 
 70.30  obligations issued to finance the construction or expansion of 
 70.31  an authorized facility.  The capital expenses for all projects 
 70.32  authorized under this subdivision that may be paid with these 
 70.33  taxes are limited to $9,000,000, plus an amount equal to the 
 70.34  costs related to issuance of the bonds and funding facilities 
 70.35  replacement reserves. 
 70.36     Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
 71.1   under Minnesota Statutes, chapter 475, to finance the capital 
 71.2   expenditure and improvement projects.  An election to approve 
 71.3   the bonds under Minnesota Statutes, section 475.58, may be held 
 71.4   in combination with the election to authorize imposition of the 
 71.5   tax under subdivision 1.  Whether to permit imposition of the 
 71.6   tax and issuance of bonds may be posed to the voters as a single 
 71.7   question.  The question must state that the sales tax revenues 
 71.8   are pledged to pay the bonds, but that the bonds are general 
 71.9   obligations and will be guaranteed by the city's property taxes. 
 71.10     (b) The issuance of bonds under this subdivision is not 
 71.11  subject to Minnesota Statutes, sections 275.60 and 275.61. 
 71.12     (c) The bonds are not included in computing any debt 
 71.13  limitation applicable to the city, and the levy of taxes under 
 71.14  Minnesota Statutes, section 475.61, to pay principal of and 
 71.15  interest on the bonds is not subject to any levy limitation.  
 71.16  The aggregate principal amount of bonds, plus the aggregate of 
 71.17  the taxes used directly to pay eligible capital expenditures and 
 71.18  improvements may not exceed $9,000,000, plus an amount equal to 
 71.19  the costs related to issuance of the bonds. 
 71.20     (d) The taxes may be pledged to and used for the payment of 
 71.21  the bonds and any bonds issued to refund them, only if the bonds 
 71.22  and any refunding bonds are general obligations of the city. 
 71.23     Subd. 5.  [TERMINATION OF TAXES.] The taxes imposed under 
 71.24  subdivisions 1 and 2 expire when the city council determines 
 71.25  that sufficient funds have been received from the taxes to 
 71.26  finance the capital and administrative costs for the 
 71.27  acquisition, construction, and improvement of facilities 
 71.28  described in subdivision 3, and to prepay or retire at maturity 
 71.29  the principal, interest, and premium due on any bonds issued for 
 71.30  the facilities under subdivision 4.  Any funds remaining after 
 71.31  completion of the project and retirement or redemption of the 
 71.32  bonds may be placed in the general fund of the city.  The taxes 
 71.33  imposed under subdivisions 1 and 2 may expire at an earlier time 
 71.34  if the city so determines by ordinance. 
 71.35     Subd. 6.  [EFFECTIVE DATE.] This section is effective the 
 71.36  day after compliance by the governing body of the city of New 
 72.1   Ulm with Minnesota Statutes, section 645.021, subdivision 3. 
 72.2      Sec. 18.  [CITY OF PROCTOR; TAXES AUTHORIZED.] 
 72.3      Subdivision 1.  [SALES AND USE TAX.] Notwithstanding 
 72.4   Minnesota Statutes, section 297A.48, subdivision 1a, 477A.016, 
 72.5   or any other provision of law, ordinance, or city charter, if 
 72.6   approved by the city voters at the first municipal general 
 72.7   election held after the date of final enactment of this act or 
 72.8   at a special election held November 2, 1999, the city of Proctor 
 72.9   may impose by ordinance a sales and use tax of up to one-half of 
 72.10  one percent for the purposes specified in subdivision 3.  The 
 72.11  provisions of Minnesota Statutes, section 297A.48, govern the 
 72.12  imposition, administration, collection, and enforcement of the 
 72.13  tax authorized under this subdivision. 
 72.14     Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
 72.15  Minnesota Statutes, section 477A.016, or any other provision of 
 72.16  law, ordinance, or city charter, the city of Proctor may impose 
 72.17  by ordinance, for the purposes specified in subdivision 3, an 
 72.18  excise tax of up to $20 per motor vehicle, as defined by 
 72.19  ordinance, purchased or acquired from any person engaged within 
 72.20  the city in the business of selling motor vehicles at retail. 
 72.21     Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
 72.22  authorized by subdivisions 1 and 2 must be used by the city to 
 72.23  pay the cost of collecting the taxes and to pay for construction 
 72.24  and improvement of the following city facilities: 
 72.25     (1) streets; and 
 72.26     (2) constructing and equipping the Proctor community 
 72.27  activity center. 
 72.28     Authorized expenses include, but are not limited to, 
 72.29  acquiring property, paying construction and operating expenses 
 72.30  related to the development of an authorized facility, and paying 
 72.31  debt service on bonds or other obligations, including lease 
 72.32  obligations, issued to finance the construction, expansion, or 
 72.33  improvement of an authorized facility.  The capital expenses for 
 72.34  all projects authorized under this paragraph that may be paid 
 72.35  with these taxes is limited to $3,600,000, plus an amount equal 
 72.36  to the costs related to issuance of the bonds. 
 73.1      Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
 73.2   under Minnesota Statutes, chapter 475, to finance the capital 
 73.3   expenditure and improvement projects described in subdivision 
 73.4   3.  An election to approve the bonds under Minnesota Statutes, 
 73.5   section 475.58, is not required. 
 73.6      (b) The issuance of bonds under this subdivision is not 
 73.7   subject to Minnesota Statutes, sections 275.60 and 279.61. 
 73.8      (c) The bonds are not included in computing any debt 
 73.9   limitation applicable to the city, and the levy of taxes under 
 73.10  Minnesota Statutes, section 475.61, to pay principal of and 
 73.11  interest on the bonds is not subject to any levy limitation.  
 73.12     (d) The aggregate principal amount of bonds, plus the 
 73.13  aggregate of the taxes used directly to pay eligible capital 
 73.14  expenditures and improvements, may not exceed $3,600,000, plus 
 73.15  an amount equal to the costs related to issuance of the bonds, 
 73.16  including interest on the bonds. 
 73.17     (e) The sales and use and excise taxes authorized in this 
 73.18  section may be pledged to and used for the payment of the bonds 
 73.19  and any bonds issued to refund them only if the bonds and any 
 73.20  refunding bonds are general obligations of the city. 
 73.21     Subd. 5.  [TERMINATION OF TAXES.] The taxes imposed under 
 73.22  subdivisions 1 and 2 expire when the city council determines 
 73.23  that the amount described in subdivision 4, paragraph (d), has 
 73.24  been received from the taxes to finance the capital and 
 73.25  administrative costs for the acquisition, construction, 
 73.26  expansion, and improvement of facilities described in 
 73.27  subdivision 3, plus the additional amount needed to pay the 
 73.28  costs related to issuance of bonds under subdivision 4.  Any 
 73.29  funds remaining after completion of the project and retirement 
 73.30  or redemption of the bonds may be placed in the general fund of 
 73.31  the city.  The taxes imposed under subdivisions 1 and 2 may 
 73.32  expire at an earlier time if the city so determines by ordinance.
 73.33     Subd. 6.  [EFFECTIVE DATE.] This section is effective the 
 73.34  day after compliance by the governing body of the city of 
 73.35  Proctor with Minnesota Statutes, section 645.021, subdivision 3. 
 73.36     Sec. 19.  [EFFECTIVE DATES.] 
 74.1      Sections 1, 2, 5, 7, 9, and 11 are effective for sales and 
 74.2   purchases made after June 30, 1999.  
 74.3      Section 3 is effective for amended returns and refund 
 74.4   claims filed on or after July 1, 1999. 
 74.5      Section 4 is effective the day following final enactment 
 74.6   and applies retroactively to all open tax years and to 
 74.7   assessments and appeals under Minnesota Statutes, sections 
 74.8   289A.38 and 289A.65, for which the time limits have not expired 
 74.9   on the date of final enactment of this act.  The provisions of 
 74.10  Minnesota Statutes, section 289A.50, apply to refunds claimed 
 74.11  under section 4.  Refunds claimed under section 4 must be filed 
 74.12  by the later of December 31, 1999, or the time limit under 
 74.13  Minnesota Statutes, section 289A.40, subdivision 1. 
 74.14     Section 6 is effective retroactively for sales and 
 74.15  purchases made after June 30, 1998. 
 74.16     Section 8 is effective for purchases and sales made after 
 74.17  the date of final enactment.  
 74.18     Section 10 is effective for purchases made after the date 
 74.19  of final enactment and before July 1, 2001. 
 74.20     Section 12 is effective the day after final enactment.  
 74.21  Section 12, paragraphs (a) to (c), apply to all local sales 
 74.22  taxes enacted after July 1, 1999.  Section 12, paragraph (d), 
 74.23  applies to all local sales taxes in effect at the time of, or 
 74.24  imposed after the day of, the enactment of this section. 
 74.25     Section 13 is effective the day following final enactment. 
 74.26                             ARTICLE 5 
 74.27                           PROPERTY TAXES 
 74.28     Section 1.  Minnesota Statutes 1998, section 271.01, 
 74.29  subdivision 5, is amended to read: 
 74.30     Subd. 5.  [JURISDICTION.] The tax court shall have 
 74.31  statewide jurisdiction.  Except for an appeal to the supreme 
 74.32  court or any other appeal allowed under this subdivision, the 
 74.33  tax court shall be the sole, exclusive, and final authority for 
 74.34  the hearing and determination of all questions of law and fact 
 74.35  arising under the tax laws of the state, as defined in this 
 74.36  subdivision, in those cases that have been appealed to the tax 
 75.1   court and in any case that has been transferred by the district 
 75.2   court to the tax court.  The tax court shall have no 
 75.3   jurisdiction in any case that does not arise under the tax laws 
 75.4   of the state or in any criminal case or in any case determining 
 75.5   or granting title to real property or in any case that is under 
 75.6   the probate jurisdiction of the district court.  The small 
 75.7   claims division of the tax court shall have no jurisdiction in 
 75.8   any case dealing with property valuation or assessment for 
 75.9   property tax purposes until the taxpayer has appealed the 
 75.10  valuation or assessment to the county board of equalization, and 
 75.11  in those towns and cities which have not transferred their 
 75.12  duties to the county, the town or city board of equalization, 
 75.13  except for:  (i) those taxpayers whose original assessments are 
 75.14  determined by the commissioner of revenue; and (ii) those 
 75.15  taxpayers appealing a denial of a current year application for 
 75.16  the homestead classification for their property and the denial 
 75.17  was not reflected on a valuation notice issued in the year.  The 
 75.18  tax court shall have no jurisdiction in any case involving an 
 75.19  order of the state board of equalization unless a taxpayer 
 75.20  contests the valuation of property.  Laws governing taxes, aids, 
 75.21  and related matters administered by the commissioner of revenue, 
 75.22  laws dealing with property valuation, assessment or taxation of 
 75.23  property for property tax purposes, and any other laws that 
 75.24  contain provisions authorizing review of taxes, aids, and 
 75.25  related matters by the tax court shall be considered tax laws of 
 75.26  this state subject to the jurisdiction of the tax court.  This 
 75.27  subdivision shall not be construed to prevent an appeal, as 
 75.28  provided by law, to an administrative agency, board of 
 75.29  equalization, review under section 274.13, subdivision 1c, or to 
 75.30  the commissioner of revenue.  Wherever used in this chapter, the 
 75.31  term commissioner shall mean the commissioner of revenue, unless 
 75.32  otherwise specified. 
 75.33     Sec. 2.  Minnesota Statutes 1998, section 271.21, 
 75.34  subdivision 2, is amended to read: 
 75.35     Subd. 2.  [JURISDICTION.] At the election of the taxpayer, 
 75.36  the small claims division shall have jurisdiction only in the 
 76.1   following matters: 
 76.2      (a) in cases involving valuation, assessment, or taxation 
 76.3   of real or personal property, if the taxpayer has satisfied the 
 76.4   requirements of section 271.01, subdivision 5, and:  (i) the 
 76.5   issue is a denial of a current year application for the 
 76.6   homestead classification for the taxpayer's property and the 
 76.7   denial was not reflected on a valuation notice issued in the 
 76.8   year; or (ii) in the case of nonhomestead property, the 
 76.9   assessor's estimated market value is less than $100,000; or 
 76.10     (b) any other case concerning the tax laws as defined in 
 76.11  section 271.01, subdivision 5, in which the amount in 
 76.12  controversy does not exceed $5,000, including penalty and 
 76.13  interest. 
 76.14     Sec. 3.  Minnesota Statutes 1998, section 272.02, 
 76.15  subdivision 1, is amended to read: 
 76.16     Subdivision 1.  [EXEMPT PROPERTY DESCRIBED.] All property 
 76.17  described in this section to the extent herein limited shall be 
 76.18  exempt from taxation: 
 76.19     (1) All public burying grounds. 
 76.20     (2) All public schoolhouses. 
 76.21     (3) All public hospitals. 
 76.22     (4) All academies, colleges, and universities, and all 
 76.23  seminaries of learning. 
 76.24     (5) All churches, church property, and houses of worship. 
 76.25     (6) Institutions of purely public charity except parcels of 
 76.26  property containing structures and the structures described in 
 76.27  section 273.13, subdivision 25, paragraph (e), other than those 
 76.28  that qualify for exemption under clause (25). 
 76.29     (7) All public property exclusively used for any public 
 76.30  purpose. 
 76.31     (8) Except for the taxable personal property enumerated 
 76.32  below, all personal property and the property described in 
 76.33  section 272.03, subdivision 1, paragraphs (c) and (d), shall be 
 76.34  exempt.  
 76.35     The following personal property shall be taxable:  
 76.36     (a) personal property which is part of an electric 
 77.1   generating, transmission, or distribution system or a pipeline 
 77.2   system transporting or distributing water, gas, crude oil, or 
 77.3   petroleum products or mains and pipes used in the distribution 
 77.4   of steam or hot or chilled water for heating or cooling 
 77.5   buildings and structures; 
 77.6      (b) railroad docks and wharves which are part of the 
 77.7   operating property of a railroad company as defined in section 
 77.8   270.80; 
 77.9      (c) personal property defined in section 272.03, 
 77.10  subdivision 2, clause (3); 
 77.11     (d) leasehold or other personal property interests which 
 77.12  are taxed pursuant to section 272.01, subdivision 2; 273.124, 
 77.13  subdivision 7; or 273.19, subdivision 1; or any other law 
 77.14  providing the property is taxable as if the lessee or user were 
 77.15  the fee owner; 
 77.16     (e) manufactured homes and sectional structures, including 
 77.17  storage sheds, decks, and similar removable improvements 
 77.18  constructed on the site of a manufactured home, sectional 
 77.19  structure, park trailer or travel trailer as provided in section 
 77.20  273.125, subdivision 8, paragraph (f); and 
 77.21     (f) flight property as defined in section 270.071.  
 77.22     (9) Personal property used primarily for the abatement and 
 77.23  control of air, water, or land pollution to the extent that it 
 77.24  is so used, and real property which is used primarily for 
 77.25  abatement and control of air, water, or land pollution as part 
 77.26  of an agricultural operation, as a part of a centralized 
 77.27  treatment and recovery facility operating under a permit issued 
 77.28  by the Minnesota pollution control agency pursuant to chapters 
 77.29  115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 
 77.30  and 7045.0020 to 7045.1260, as a wastewater treatment facility 
 77.31  and for the treatment, recovery, and stabilization of metals, 
 77.32  oils, chemicals, water, sludges, or inorganic materials from 
 77.33  hazardous industrial wastes, or as part of an electric 
 77.34  generation system.  For purposes of this clause, personal 
 77.35  property includes ponderous machinery and equipment used in a 
 77.36  business or production activity that at common law is considered 
 78.1   real property. 
 78.2      Any taxpayer requesting exemption of all or a portion of 
 78.3   any real property or any equipment or device, or part thereof, 
 78.4   operated primarily for the control or abatement of air or water 
 78.5   pollution shall file an application with the commissioner of 
 78.6   revenue.  The equipment or device shall meet standards, rules, 
 78.7   or criteria prescribed by the Minnesota pollution control 
 78.8   agency, and must be installed or operated in accordance with a 
 78.9   permit or order issued by that agency.  The Minnesota pollution 
 78.10  control agency shall upon request of the commissioner furnish 
 78.11  information or advice to the commissioner.  On determining that 
 78.12  property qualifies for exemption, the commissioner shall issue 
 78.13  an order exempting the property from taxation.  The equipment or 
 78.14  device shall continue to be exempt from taxation as long as the 
 78.15  permit issued by the Minnesota pollution control agency remains 
 78.16  in effect. 
 78.17     (10) Wetlands.  For purposes of this subdivision, 
 78.18  "wetlands" means:  (i) land described in section 103G.005, 
 78.19  subdivision 15a; (ii) land which is mostly under water, produces 
 78.20  little if any income, and has no use except for wildlife or 
 78.21  water conservation purposes, provided it is preserved in its 
 78.22  natural condition and drainage of it would be legal, feasible, 
 78.23  and economically practical for the production of livestock, 
 78.24  dairy animals, poultry, fruit, vegetables, forage and grains, 
 78.25  except wild rice; or (iii) land in a wetland preservation area 
 78.26  under sections 103F.612 to 103F.616.  "Wetlands" under items (i) 
 78.27  and (ii) include adjacent land which is not suitable for 
 78.28  agricultural purposes due to the presence of the wetlands, but 
 78.29  do not include woody swamps containing shrubs or trees, wet 
 78.30  meadows, meandered water, streams, rivers, and floodplains or 
 78.31  river bottoms.  Exemption of wetlands from taxation pursuant to 
 78.32  this section shall not grant the public any additional or 
 78.33  greater right of access to the wetlands or diminish any right of 
 78.34  ownership to the wetlands. 
 78.35     (11) Native prairie.  The commissioner of the department of 
 78.36  natural resources shall determine lands in the state which are 
 79.1   native prairie and shall notify the county assessor of each 
 79.2   county in which the lands are located.  Pasture land used for 
 79.3   livestock grazing purposes shall not be considered native 
 79.4   prairie for the purposes of this clause.  Upon receipt of an 
 79.5   application for the exemption provided in this clause for lands 
 79.6   for which the assessor has no determination from the 
 79.7   commissioner of natural resources, the assessor shall refer the 
 79.8   application to the commissioner of natural resources who shall 
 79.9   determine within 30 days whether the land is native prairie and 
 79.10  notify the county assessor of the decision.  Exemption of native 
 79.11  prairie pursuant to this clause shall not grant the public any 
 79.12  additional or greater right of access to the native prairie or 
 79.13  diminish any right of ownership to it. 
 79.14     (12) Property used in a continuous program to provide 
 79.15  emergency shelter for victims of domestic abuse, provided the 
 79.16  organization that owns and sponsors the shelter is exempt from 
 79.17  federal income taxation pursuant to section 501(c)(3) of the 
 79.18  Internal Revenue Code of 1986, as amended through December 31, 
 79.19  1992, notwithstanding the fact that the sponsoring organization 
 79.20  receives funding under section 8 of the United States Housing 
 79.21  Act of 1937, as amended. 
 79.22     (13) If approved by the governing body of the municipality 
 79.23  in which the property is located, property not exceeding one 
 79.24  acre which is owned and operated by any senior citizen group or 
 79.25  association of groups that in general limits membership to 
 79.26  persons age 55 or older and is organized and operated 
 79.27  exclusively for pleasure, recreation, and other nonprofit 
 79.28  purposes, no part of the net earnings of which inures to the 
 79.29  benefit of any private shareholders; provided the property is 
 79.30  used primarily as a clubhouse, meeting facility, or recreational 
 79.31  facility by the group or association and the property is not 
 79.32  used for residential purposes on either a temporary or permanent 
 79.33  basis. 
 79.34     (14) To the extent provided by section 295.44, real and 
 79.35  personal property used or to be used primarily for the 
 79.36  production of hydroelectric or hydromechanical power on a site 
 80.1   owned by the federal government, the state, or a local 
 80.2   governmental unit which is developed and operated pursuant to 
 80.3   the provisions of section 103G.535. 
 80.4      (15) If approved by the governing body of the municipality 
 80.5   in which the property is located, and if construction is 
 80.6   commenced after June 30, 1983:  
 80.7      (a) a "direct satellite broadcasting facility" operated by 
 80.8   a corporation licensed by the federal communications commission 
 80.9   to provide direct satellite broadcasting services using direct 
 80.10  broadcast satellites operating in the 12-ghz. band; and 
 80.11     (b) a "fixed satellite regional or national program service 
 80.12  facility" operated by a corporation licensed by the federal 
 80.13  communications commission to provide fixed satellite-transmitted 
 80.14  regularly scheduled broadcasting services using satellites 
 80.15  operating in the 6-ghz. band. 
 80.16  An exemption provided by clause (15) shall apply for a period 
 80.17  not to exceed five years.  When the facility no longer qualifies 
 80.18  for exemption, it shall be placed on the assessment rolls as 
 80.19  provided in subdivision 4.  Before approving a tax exemption 
 80.20  pursuant to this paragraph, the governing body of the 
 80.21  municipality shall provide an opportunity to the members of the 
 80.22  county board of commissioners of the county in which the 
 80.23  facility is proposed to be located and the members of the school 
 80.24  board of the school district in which the facility is proposed 
 80.25  to be located to meet with the governing body.  The governing 
 80.26  body shall present to the members of those boards its estimate 
 80.27  of the fiscal impact of the proposed property tax exemption.  
 80.28  The tax exemption shall not be approved by the governing body 
 80.29  until the county board of commissioners has presented its 
 80.30  written comment on the proposal to the governing body or 30 days 
 80.31  have passed from the date of the transmittal by the governing 
 80.32  body to the board of the information on the fiscal impact, 
 80.33  whichever occurs first. 
 80.34     (16) Real and personal property owned and operated by a 
 80.35  private, nonprofit corporation exempt from federal income 
 80.36  taxation pursuant to United States Code, title 26, section 
 81.1   501(c)(3), primarily used in the generation and distribution of 
 81.2   hot water for heating buildings and structures.  
 81.3      (17) Notwithstanding section 273.19, state lands that are
 81.4   leased from the department of natural resources under section 
 81.5   92.46. 
 81.6      (18) Electric power distribution lines and their 
 81.7   attachments and appurtenances, that are used primarily for 
 81.8   supplying electricity to farmers at retail.  
 81.9      (19) Transitional housing facilities.  "Transitional 
 81.10  housing facility" means a facility that meets the following 
 81.11  requirements.  (i) It provides temporary housing to individuals, 
 81.12  couples, or families.  (ii) It has the purpose of reuniting 
 81.13  families and enabling parents or individuals to obtain 
 81.14  self-sufficiency, advance their education, get job training, or 
 81.15  become employed in jobs that provide a living wage.  (iii) It 
 81.16  provides support services such as child care, work readiness 
 81.17  training, and career development counseling; and a 
 81.18  self-sufficiency program with periodic monitoring of each 
 81.19  resident's progress in completing the program's goals.  (iv) It 
 81.20  provides services to a resident of the facility for at least 
 81.21  three months but no longer than three years, except residents 
 81.22  enrolled in an educational or vocational institution or job 
 81.23  training program.  These residents may receive services during 
 81.24  the time they are enrolled but in no event longer than four 
 81.25  years.  (v) It is owned and operated or under lease from a unit 
 81.26  of government or governmental agency under a property 
 81.27  disposition program and operated by one or more organizations 
 81.28  exempt from federal income tax under section 501(c)(3) of the 
 81.29  Internal Revenue Code of 1986, as amended through December 31, 
 81.30  1992.  This exemption applies notwithstanding the fact that the 
 81.31  sponsoring organization receives financing by a direct federal 
 81.32  loan or federally insured loan or a loan made by the Minnesota 
 81.33  housing finance agency under the provisions of either Title II 
 81.34  of the National Housing Act or the Minnesota Housing Finance 
 81.35  Agency Law of 1971 or rules promulgated by the agency pursuant 
 81.36  to it, and notwithstanding the fact that the sponsoring 
 82.1   organization receives funding under Section 8 of the United 
 82.2   States Housing Act of 1937, as amended. 
 82.3      (20) Real and personal property, including leasehold or 
 82.4   other personal property interests, owned and operated by a 
 82.5   corporation if more than 50 percent of the total voting power of 
 82.6   the stock of the corporation is owned collectively by:  (i) the 
 82.7   board of regents of the University of Minnesota, (ii) the 
 82.8   University of Minnesota Foundation, an organization exempt from 
 82.9   federal income taxation under section 501(c)(3) of the Internal 
 82.10  Revenue Code of 1986, as amended through December 31, 1992, and 
 82.11  (iii) a corporation organized under chapter 317A, which by its 
 82.12  articles of incorporation is prohibited from providing pecuniary 
 82.13  gain to any person or entity other than the regents of the 
 82.14  University of Minnesota; which property is used primarily to 
 82.15  manage or provide goods, services, or facilities utilizing or 
 82.16  relating to large-scale advanced scientific computing resources 
 82.17  to the regents of the University of Minnesota and others. 
 82.18     (21)(a) Small scale wind energy conversion systems 
 82.19  installed after January 1, 1991, and used as an electric power 
 82.20  source are exempt. 
 82.21     "Small scale wind energy conversion systems" are wind 
 82.22  energy conversion systems, as defined in section 216C.06, 
 82.23  subdivision 12, including the foundation or support pad, which 
 82.24  are (i) used as an electric power source; (ii) located within 
 82.25  one county and owned by the same owner; and (iii) produce two 
 82.26  megawatts or less of electricity as measured by nameplate 
 82.27  ratings. 
 82.28     (b) Medium scale wind energy conversion systems installed 
 82.29  after January 1, 1991, are treated as follows:  (i) the 
 82.30  foundation and support pad are taxable; (ii) the associated 
 82.31  supporting and protective structures are exempt for the first 
 82.32  five assessment years after they have been constructed, and 
 82.33  thereafter, 30 percent of the market value of the associated 
 82.34  supporting and protective structures are taxable; and (iii) the 
 82.35  turbines, blades, transformers, and its related equipment, are 
 82.36  exempt.  "Medium scale wind energy conversion systems" are wind 
 83.1   energy conversion systems as defined in section 216C.06, 
 83.2   subdivision 12, including the foundation or support pad, which 
 83.3   are:  (i) used as an electric power source; (ii) located within 
 83.4   one county and owned by the same owner; and (iii) produce more 
 83.5   than two but equal to or less than 12 megawatts of energy as 
 83.6   measured by nameplate ratings. 
 83.7      (c) Large scale wind energy conversion systems installed 
 83.8   after January 1, 1991, are treated as follows:  25 percent of 
 83.9   the market value of all property is taxable, including (i) the 
 83.10  foundation and support pad; (ii) the associated supporting and 
 83.11  protective structures; and (iii) the turbines, blades, 
 83.12  transformers, and its related equipment.  "Large scale wind 
 83.13  energy conversion systems" are wind energy conversion systems as 
 83.14  defined in section 216C.06, subdivision 12, including the 
 83.15  foundation or support pad, which are:  (i) used as an electric 
 83.16  power source; and (ii) produce more than 12 megawatts of energy 
 83.17  as measured by nameplate ratings. 
 83.18     (22) Containment tanks, cache basins, and that portion of 
 83.19  the structure needed for the containment facility used to 
 83.20  confine agricultural chemicals as defined in section 18D.01, 
 83.21  subdivision 3, as required by the commissioner of agriculture 
 83.22  under chapter 18B or 18C. 
 83.23     (23) Photovoltaic devices, as defined in section 216C.06, 
 83.24  subdivision 13, installed after January 1, 1992, and used to 
 83.25  produce or store electric power. 
 83.26     (24) Real and personal property owned and operated by a 
 83.27  private, nonprofit corporation exempt from federal income 
 83.28  taxation pursuant to United States Code, title 26, section 
 83.29  501(c)(3), primarily used for an ice arena or ice rink, and used 
 83.30  primarily for youth and high school programs. 
 83.31     (25) A structure that is situated on real property that is 
 83.32  used for: 
 83.33     (i) housing for the elderly or for low- and moderate-income 
 83.34  families as defined in Title II of the National Housing Act, as 
 83.35  amended through December 31, 1990, and funded by a direct 
 83.36  federal loan or federally insured loan made pursuant to Title II 
 84.1   of the act; or 
 84.2      (ii) housing lower income families or elderly or 
 84.3   handicapped persons, as defined in Section 8 of the United 
 84.4   States Housing Act of 1937, as amended. 
 84.5      In order for a structure to be exempt under item (i) or 
 84.6   (ii), it must also meet each of the following criteria: 
 84.7      (A) is owned by an entity which is operated as a nonprofit 
 84.8   corporation organized under chapter 317A; 
 84.9      (B) is owned by an entity which has not entered into a 
 84.10  housing assistance payments contract under Section 8 of the 
 84.11  United States Housing Act of 1937, or, if the entity which owns 
 84.12  the structure has entered into a housing assistance payments 
 84.13  contract under Section 8 of the United States Housing Act of 
 84.14  1937, the contract provides assistance for less than 90 percent 
 84.15  of the dwelling units in the structure, excluding dwelling units 
 84.16  intended for management or maintenance personnel; 
 84.17     (C) operates an on-site congregate dining program in which 
 84.18  participation by residents is mandatory, and provides assisted 
 84.19  living or similar social and physical support services for 
 84.20  residents; and 
 84.21     (D) was not assessed and did not pay tax under chapter 273 
 84.22  prior to the 1991 levy, while meeting the other conditions of 
 84.23  this clause. 
 84.24     An exemption under this clause remains in effect for taxes 
 84.25  levied in each year or partial year of the term of its permanent 
 84.26  financing. 
 84.27     (26) Real and personal property that is located in the 
 84.28  Superior National Forest, and owned or leased and operated by a 
 84.29  nonprofit organization that is exempt from federal income 
 84.30  taxation under section 501(c)(3) of the Internal Revenue Code of 
 84.31  1986, as amended through December 31, 1992, and primarily used 
 84.32  to provide recreational opportunities for disabled veterans and 
 84.33  their families. 
 84.34     (27) Manure pits and appurtenances, which may include 
 84.35  slatted floors and pipes, installed or operated in accordance 
 84.36  with a permit, order, or certificate of compliance issued by the 
 85.1   Minnesota pollution control agency.  The exemption shall 
 85.2   continue for as long as the permit, order, or certificate issued 
 85.3   by the Minnesota pollution control agency remains in effect. 
 85.4      (28) Notwithstanding clause (8), item (a), attached 
 85.5   machinery and other personal property which is part of a 
 85.6   facility containing a cogeneration system as described in 
 85.7   section 216B.166, subdivision 2, paragraph (a), if the 
 85.8   cogeneration system has met the following criteria:  (i) the 
 85.9   system utilizes natural gas as a primary fuel and the 
 85.10  cogenerated steam initially replaces steam generated from 
 85.11  existing thermal boilers utilizing coal; (ii) the facility 
 85.12  developer is selected as a result of a procurement process 
 85.13  ordered by the public utilities commission; and (iii) 
 85.14  construction of the facility is commenced after July 1, 1994, 
 85.15  and before July 1, 1997. 
 85.16     (29) Real property acquired by a home rule charter city, 
 85.17  statutory city, county, town, or school district under a lease 
 85.18  purchase agreement or an installment purchase contract during 
 85.19  the term of the lease purchase agreement as long as and to the 
 85.20  extent that the property is used by the city, county, town, or 
 85.21  school district and devoted to a public use and to the extent it 
 85.22  is not subleased to any private individual, entity, association, 
 85.23  or corporation in connection with a business or enterprise 
 85.24  operated for profit. 
 85.25     (30) Property owned by a nonprofit charitable organization 
 85.26  that qualifies for tax exemption under section 501(c)(3) of the 
 85.27  Internal Revenue Code of 1986, as amended through December 31, 
 85.28  1997, that is intended to be used as a business incubator in a 
 85.29  high-unemployment county but is not occupied on the assessment 
 85.30  date.  As used in this clause, a "business incubator" is a 
 85.31  facility used for the development of nonretail businesses, 
 85.32  offering access to equipment, space, services, and advice to the 
 85.33  tenant businesses, for the purpose of encouraging economic 
 85.34  development, diversification, and job creation in the area 
 85.35  served by the organization, and "high-unemployment county" is a 
 85.36  county that had an average annual unemployment rate of 7.9 
 86.1   percent or greater in 1997.  Property that qualifies for the 
 86.2   exemption under this clause is limited to no more than two 
 86.3   contiguous parcels and structures that do not exceed in the 
 86.4   aggregate 40,000 square feet.  This exemption expires after 
 86.5   taxes payable in 2005. 
 86.6      (31) Notwithstanding any other law to the contrary, real 
 86.7   property that meets the following criteria is exempt: 
 86.8      (i) constitutes a wastewater treatment system (a) 
 86.9   constructed by a municipality using public funds, (b) operates 
 86.10  under a State Disposal System Permit issued by the Minnesota 
 86.11  pollution control agency pursuant to chapters 115 and 116 and 
 86.12  Minnesota Rules, chapter 700l, and (c) applies its effluent to 
 86.13  land used as part of an agricultural operation; 
 86.14     (ii) is located within a municipality of a population of 
 86.15  less than 10,000; 
 86.16     (iii) is used for treatment of effluent from a private 
 86.17  potato processing facility; and 
 86.18     (iv) is owned by a municipality and operated by a private 
 86.19  entity under agreement with that municipality. 
 86.20     (32) Notwithstanding clause (8), item (a), attached 
 86.21  machinery and other personal property which is part of a 
 86.22  simple-cycle combustion-turbine electric generation facility 
 86.23  that exceeds 250 megawatts of installed capacity and that meets 
 86.24  the requirements of this clause.  At the time of construction, 
 86.25  the facility must:  
 86.26     (i) not be owned by a public utility as defined in section 
 86.27  216B.02, subdivision 4; 
 86.28     (ii) utilize natural gas as a primary fuel; 
 86.29     (iii) be located within 20 miles of the intersection of an 
 86.30  existing 42-inch (outside diameter) natural gas pipeline and a 
 86.31  345-kilovolt high-voltage electric transmission line; and 
 86.32     (iv) be designed to provide peaking, emergency backup, or 
 86.33  contingency services, and have received a certificate of need 
 86.34  pursuant to section 216B.243 demonstrating demand for its 
 86.35  capacity.  
 86.36  Construction of the facility must be commenced after July 1, 
 87.1   1999, and before July 1, 2003.  Property eligible for this 
 87.2   exemption does not include electric transmission lines and 
 87.3   interconnections or gas pipelines and interconnections 
 87.4   appurtenant to the property or the facility. 
 87.5      Sec. 4.  Minnesota Statutes 1998, section 272.027, is 
 87.6   amended to read: 
 87.7      272.027 [PERSONAL PROPERTY USED TO GENERATE ELECTRICITY FOR 
 87.8   PRODUCTION AND RESALE.] 
 87.9      Subdivision 1.  [ELECTRICITY GENERATED TO PRODUCE GOODS AND 
 87.10  SERVICES.] Personal property used to generate electric power is 
 87.11  exempt from property taxation if the electric power is used to 
 87.12  manufacture or produce goods, products, or services, other than 
 87.13  electric power, by the owner of the electric generation 
 87.14  plant.  Except as provided in subdivisions 2 and 3, the 
 87.15  exemption does not apply to property used to produce electric 
 87.16  power for sale to others and does not apply to real property.  
 87.17  In determining the value subject to tax, a proportionate share 
 87.18  of the value of the generating facilities, equal to the 
 87.19  proportion that the power sold to others bears to the total 
 87.20  generation of the plant, is subject to the general property tax 
 87.21  in the same manner as other property.  Power generated in such a 
 87.22  plant and exchanged for an equivalent amount of power that is 
 87.23  used for the manufacture or production of goods, products, or 
 87.24  services other than electric power by the owner of the 
 87.25  generating plant is considered to be used by the owner of the 
 87.26  plant. 
 87.27     Subd. 2.  [EXEMPTION FOR CUSTOMER OWNED PROPERTY 
 87.28  TRANSFERRED TO A UTILITY.] (a) Tools, implements, and machinery 
 87.29  of an electric generating facility are exempt if all the 
 87.30  following requirements are met: 
 87.31     (1) the electric generating facilities were operational and 
 87.32  met the requirements for exemption of personal property under 
 87.33  subdivision 1 on January 2, 1999; and 
 87.34     (2) the generating facility is sold to a Minnesota electric 
 87.35  utility. 
 87.36     (b) Any tools, implements, and machinery installed to 
 88.1   increase generation capacity are also exempt under this section 
 88.2   provided that the existing tools, implements, and machinery are 
 88.3   exempt under paragraph (a). 
 88.4      Subd. 3.  [EXEMPTION ELECTRIC POWER PLANT PERSONAL 
 88.5   PROPERTY; TACONITE AND STEEL MILL.] 
 88.6      Tools, implements, and machinery of an electric generating 
 88.7   facility are exempt if all the following requirements are met: 
 88.8      (1) the electric generating facility, when completed, will 
 88.9   have a capacity of at least 450 megawatts; 
 88.10     (2) the electric generating facility is adjacent to a 
 88.11  taconite mine direct-reduction steel mill; and 
 88.12     (3) the electric generating facility supplied over 60 
 88.13  percent of its electricity generated in the prior year to the 
 88.14  adjacent direct-reduction plant and steel mill. 
 88.15     Sec. 5.  Minnesota Statutes 1998, section 272.03, 
 88.16  subdivision 6, is amended to read: 
 88.17     Subd. 6.  [TRACT, LOT, PARCEL, AND PIECE OR PARCEL.] 
 88.18  (a) "Tract," "lot," "parcel," and "piece or parcel" of land 
 88.19  means any contiguous quantity of land in the possession of, 
 88.20  owned by, or recorded as the property of, the same claimant or 
 88.21  person.  
 88.22     (b) Notwithstanding paragraph (a), property that is owned 
 88.23  by a utility, leased for residential or recreational uses for 
 88.24  terms of 20 years or longer, and separately valued by the 
 88.25  assessor, will be treated for property tax purposes as separate 
 88.26  parcels. 
 88.27     Sec. 6.  Minnesota Statutes 1998, section 273.11, 
 88.28  subdivision 1a, is amended to read: 
 88.29     Subd. 1a.  [LIMITED MARKET VALUE.] In the case of all 
 88.30  property classified as agricultural homestead or nonhomestead, 
 88.31  residential homestead or nonhomestead, or noncommercial seasonal 
 88.32  recreational residential, the assessor shall compare the value 
 88.33  with that determined in the preceding assessment.  The amount of 
 88.34  the increase entered in the current assessment shall not exceed 
 88.35  the greater of (1) ten 8.5 percent of the value in the preceding 
 88.36  assessment, or (2) one-fourth 15 percent of the difference 
 89.1   between the current assessment and the preceding assessment.  
 89.2   This limitation shall not apply to increases in value due to 
 89.3   improvements.  For purposes of this subdivision, the term 
 89.4   "assessment" means the value prior to any exclusion under 
 89.5   subdivision 16. 
 89.6      The provisions of this subdivision shall be in effect only 
 89.7   for assessment years 1993 through assessment year 2001. 
 89.8      For purposes of the assessment/sales ratio study conducted 
 89.9   under section 127A.48, and the computation of state aids paid 
 89.10  under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and 
 89.11  477A, market values and net tax capacities determined under this 
 89.12  subdivision and subdivision 16, shall be used. 
 89.13     Sec. 7.  Minnesota Statutes 1998, section 273.11, 
 89.14  subdivision 16, is amended to read: 
 89.15     Subd. 16.  [VALUATION EXCLUSION FOR CERTAIN IMPROVEMENTS.] 
 89.16  Improvements to homestead property made before January 2, 2003, 
 89.17  shall be fully or partially excluded from the value of the 
 89.18  property for assessment purposes provided that (1) the house is 
 89.19  at least 35 45 years old at the time of the improvement and (2) 
 89.20  either 
 89.21     (a) the assessor's estimated market value of the house on 
 89.22  January 2 of the current year is equal to or less than $150,000, 
 89.23  or $400,000. 
 89.24     (b) if the estimated market value of the house is over 
 89.25  $150,000 market value but is less than $300,000 on January 2 of 
 89.26  the current year, the property qualifies if 
 89.27     (i) it is located in a city or town in which 50 percent or 
 89.28  more of the owner-occupied housing units were constructed before 
 89.29  1960 based upon the 1990 federal census, and 
 89.30     (ii) the city or town's median family income based upon the 
 89.31  1990 federal census is less than the statewide median family 
 89.32  income based upon the 1990 federal census, or 
 89.33     (c) if the estimated market value of the house is $300,000 
 89.34  or more on January 2 of the current year, the property qualifies 
 89.35  if 
 89.36     (i) it is located in a city or town in which 45 percent or 
 90.1   more of the homes were constructed before 1940 based upon the 
 90.2   1990 federal census, and 
 90.3      (ii) it is located in a city or town in which 45 percent or 
 90.4   more of the housing units were rental based upon the 1990 
 90.5   federal census, and 
 90.6      (iii) the city or town's median value of owner-occupied 
 90.7   housing units based upon the 1990 federal census is less than 
 90.8   the statewide median value of owner-occupied housing units based 
 90.9   upon the 1990 federal census. 
 90.10     For purposes of determining this eligibility, "house" means 
 90.11  land and buildings.  
 90.12     The age of a residence is the number of years since the 
 90.13  original year of its construction.  In the case of a residence 
 90.14  that is relocated, the relocation must be from a location within 
 90.15  the state and the only improvements eligible for exclusion under 
 90.16  this subdivision are (1) those for which building permits were 
 90.17  issued to the homeowner after the residence was relocated to its 
 90.18  present site, and (2) those undertaken during or after the year 
 90.19  the residence is initially occupied by the homeowner, excluding 
 90.20  any market value increase relating to basic improvements that 
 90.21  are necessary to install the residence on its foundation and 
 90.22  connect it to utilities at its present site.  In the case of an 
 90.23  owner-occupied duplex or triplex, the improvement is eligible 
 90.24  regardless of which portion of the property was improved. 
 90.25     If the property lies in a jurisdiction which is subject to 
 90.26  a building permit process, a building permit must have been 
 90.27  issued prior to commencement of the improvement.  Any 
 90.28  improvement The improvements for a single project or in any one 
 90.29  year must add at least $1,000 $5,000 to the value of the 
 90.30  property to be eligible for exclusion under this subdivision.  
 90.31  Only improvements to the structure which is the residence of the 
 90.32  qualifying homesteader or construction of or improvements to no 
 90.33  more than one two-car garage per residence qualify for the 
 90.34  provisions of this subdivision.  If an improvement was begun 
 90.35  between January 2, 1992, and January 2, 1993, any value added 
 90.36  from that improvement for the January 1994 and subsequent 
 91.1   assessments shall qualify for exclusion under this subdivision 
 91.2   provided that a building permit was obtained for the improvement 
 91.3   between January 2, 1992, and January 2, 1993.  Whenever a 
 91.4   building permit is issued for property currently classified as 
 91.5   homestead, the issuing jurisdiction shall notify the property 
 91.6   owner of the possibility of valuation exclusion under this 
 91.7   subdivision.  The assessor shall require an application, 
 91.8   including documentation of the age of the house from the owner, 
 91.9   if unknown by the assessor.  The application may be filed 
 91.10  subsequent to the date of the building permit provided that the 
 91.11  application must be filed within three years of the date the 
 91.12  building permit was issued for the improvement.  If the property 
 91.13  lies in a jurisdiction which is not subject to a building permit 
 91.14  process, the application must be filed within three years of the 
 91.15  date the improvement was made.  The assessor may require proof 
 91.16  from the taxpayer of the date the improvement was made.  
 91.17  Applications must be received prior to July 1 of any year in 
 91.18  order to be effective for taxes payable in the following year. 
 91.19     No exclusion for an improvement may be granted for an 
 91.20  improvement by a local board of review or county board of 
 91.21  equalization, and no abatement of the taxes for qualifying 
 91.22  improvements may be granted by the county board unless (1) a 
 91.23  building permit was issued prior to the commencement of the 
 91.24  improvement if the jurisdiction requires a building permit, and 
 91.25  (2) an application was completed. 
 91.26     The assessor shall note the qualifying value of each 
 91.27  improvement on the property's record, and the sum of those 
 91.28  amounts shall be subtracted from the value of the property in 
 91.29  each year for ten years after the improvement has been made, at 
 91.30  which time an amount equal to 20 percent of the qualifying value 
 91.31  shall be added back in each of the five subsequent assessment 
 91.32  years.  After ten years the amount of the qualifying value shall 
 91.33  be added back as follows: 
 91.34     (1) 50 percent in the two subsequent assessment years if 
 91.35  the qualifying value is equal to or less than $10,000 market 
 91.36  value; or 
 92.1      (2) 20 percent in the five subsequent assessment years if 
 92.2   the qualifying value is greater than $10,000 market value. 
 92.3   If an application is filed after the first assessment date at 
 92.4   which an improvement could have been subject to the valuation 
 92.5   exclusion under this subdivision, the ten-year period during 
 92.6   which the value is subject to exclusion is reduced by the number 
 92.7   of years that have elapsed since the property would have 
 92.8   qualified initially.  The valuation exclusion shall terminate 
 92.9   whenever (1) the property is sold, or (2) the property is 
 92.10  reclassified to a class which does not qualify for treatment 
 92.11  under this subdivision.  Improvements made by an occupant who is 
 92.12  the purchaser of the property under a conditional purchase 
 92.13  contract do not qualify under this subdivision unless the seller 
 92.14  of the property is a governmental entity.  The qualifying value 
 92.15  of the property shall be computed based upon the increase from 
 92.16  that structure's market value as of January 2 preceding the 
 92.17  acquisition of the property by the governmental entity. 
 92.18     The total qualifying value for a homestead may not exceed 
 92.19  $50,000.  The total qualifying value for a homestead with a 
 92.20  house that is less than 70 years old may not exceed $25,000.  
 92.21  The term "qualifying value" means the increase in estimated 
 92.22  market value resulting from the improvement if the improvement 
 92.23  occurs when the house is at least 70 years old, or one-half of 
 92.24  the increase in estimated market value resulting from the 
 92.25  improvement otherwise.  The $25,000 and $50,000 maximum 
 92.26  qualifying value under this subdivision may result from up to 
 92.27  three separate multiple improvements to the homestead.  The 
 92.28  application shall state, in clear language, that If more than 
 92.29  three improvements are made to the qualifying property, a 
 92.30  taxpayer may choose which three improvements are eligible, 
 92.31  provided that after the taxpayer has made the choice and any 
 92.32  valuation attributable to those improvements has been excluded 
 92.33  from taxation, no further changes can be made by the taxpayer. 
 92.34     If 50 percent or more of the square footage of a structure 
 92.35  is voluntarily razed or removed, the valuation increase 
 92.36  attributable to any subsequent improvements to the remaining 
 93.1   structure does not qualify for the exclusion under this 
 93.2   subdivision.  If a structure is unintentionally or accidentally 
 93.3   destroyed by a natural disaster, the property is eligible for an 
 93.4   exclusion under this subdivision provided that the structure was 
 93.5   not completely destroyed.  The qualifying value on property 
 93.6   destroyed by a natural disaster shall be computed based upon the 
 93.7   increase from that structure's market value as determined on 
 93.8   January 2 of the year in which the disaster occurred.  A 
 93.9   property receiving benefits under the homestead disaster 
 93.10  provisions under section 273.123 is not disqualified from 
 93.11  receiving an exclusion under this subdivision.  If any 
 93.12  combination of improvements made to a structure after January 1, 
 93.13  1993, increases the size of the structure by 100 percent or 
 93.14  more, the valuation increase attributable to the portion of the 
 93.15  improvement that causes the structure's size to exceed 100 
 93.16  percent does not qualify for exclusion under this subdivision. 
 93.17     Sec. 8.  Minnesota Statutes 1998, section 273.111, is 
 93.18  amended by adding a subdivision to read: 
 93.19     Subd. 15.  [DISSECTED PARCELS; CONTINUED DEFERMENT.] Real 
 93.20  estate consisting of more than ten, but less than 15, acres 
 93.21  which has: 
 93.22     (1) been owned by the applicant or the applicant's parents 
 93.23  for at least 70 years; 
 93.24     (2) been dissected by two or more major parkways or 
 93.25  interstate highways; and 
 93.26     (3) qualified for the agricultural valuation and tax 
 93.27  deferment under this section through assessment year 1996, taxes 
 93.28  payable in 1997, 
 93.29  shall continue to qualify for treatment under this section until 
 93.30  the applicant's death or transfer or sale by the applicant of 
 93.31  the applicant's interest in the real estate.  When the property 
 93.32  ceases to qualify for treatment under this section, the 
 93.33  recapture provisions of subdivision 9 will apply with respect to 
 93.34  the last ten years that the property has been valued and 
 93.35  assessed under this section. 
 93.36     Sec. 9.  Minnesota Statutes 1998, section 273.124, 
 94.1   subdivision 1, is amended to read: 
 94.2      Subdivision 1.  [GENERAL RULE.] (a) Residential real estate 
 94.3   that is occupied and used for the purposes of a homestead by its 
 94.4   owner, who must be a Minnesota resident, is a residential 
 94.5   homestead.  
 94.6      Agricultural land, as defined in section 273.13, 
 94.7   subdivision 23, that is occupied and used as a homestead by its 
 94.8   owner, who must be a Minnesota resident, is an agricultural 
 94.9   homestead. 
 94.10     Dates for establishment of a homestead and homestead 
 94.11  treatment provided to particular types of property are as 
 94.12  provided in this section.  
 94.13     Property of a trustee, beneficiary, or grantor of a trust 
 94.14  is not disqualified from receiving homestead benefits if the 
 94.15  homestead requirements under this chapter are satisfied. 
 94.16     The assessor shall require proof, as provided in 
 94.17  subdivision 13, of the facts upon which classification as a 
 94.18  homestead may be determined.  Notwithstanding any other law, the 
 94.19  assessor may at any time require a homestead application to be 
 94.20  filed in order to verify that any property classified as a 
 94.21  homestead continues to be eligible for homestead status.  
 94.22  Notwithstanding any other law to the contrary, the department of 
 94.23  revenue may, upon request from an assessor, verify whether an 
 94.24  individual who is requesting or receiving homestead 
 94.25  classification has filed a Minnesota income tax return as a 
 94.26  resident for the most recent taxable year for which the 
 94.27  information is available. 
 94.28     When there is a name change or a transfer of homestead 
 94.29  property, the assessor may reclassify the property in the next 
 94.30  assessment unless a homestead application is filed to verify 
 94.31  that the property continues to qualify for homestead 
 94.32  classification. 
 94.33     (b) For purposes of this section, homestead property shall 
 94.34  include property which is used for purposes of the homestead but 
 94.35  is separated from the homestead by a road, street, lot, 
 94.36  waterway, or other similar intervening property.  The term "used 
 95.1   for purposes of the homestead" shall include but not be limited 
 95.2   to uses for gardens, garages, or other outbuildings commonly 
 95.3   associated with a homestead, but shall not include vacant land 
 95.4   held primarily for future development.  In order to receive 
 95.5   homestead treatment for the noncontiguous property, the owner 
 95.6   must use the property for the purposes of the homestead, and 
 95.7   must apply to the assessor, both by the deadlines given in 
 95.8   subdivision 9.  After initial qualification for the homestead 
 95.9   treatment, additional applications for subsequent years are not 
 95.10  required. 
 95.11     (c) Residential real estate that is occupied and used for 
 95.12  purposes of a homestead by a relative of the owner is a 
 95.13  homestead but only to the extent of the homestead treatment that 
 95.14  would be provided if the related owner occupied the property.  
 95.15  For purposes of this paragraph and paragraph (g), "relative" 
 95.16  means a parent, stepparent, child, stepchild, grandparent, 
 95.17  grandchild, brother, sister, uncle, or aunt, nephew, or niece.  
 95.18  This relationship may be by blood or marriage.  Property that 
 95.19  has been classified as seasonal recreational residential 
 95.20  property at any time during which it has been owned by the 
 95.21  current owner or spouse of the current owner will not be 
 95.22  reclassified as a homestead unless it is occupied as a homestead 
 95.23  by the owner; this prohibition also applies to property that, in 
 95.24  the absence of this paragraph, would have been classified as 
 95.25  seasonal recreational residential property at the time when the 
 95.26  residence was constructed.  Neither the related occupant nor the 
 95.27  owner of the property may claim a property tax refund under 
 95.28  chapter 290A for a homestead occupied by a relative.  In the 
 95.29  case of a residence located on agricultural land, only the 
 95.30  house, garage, and immediately surrounding one acre of land 
 95.31  shall be classified as a homestead under this paragraph, except 
 95.32  as provided in paragraph (d). 
 95.33     (d) Agricultural property that is occupied and used for 
 95.34  purposes of a homestead by a relative of the owner, is a 
 95.35  homestead, only to the extent of the homestead treatment that 
 95.36  would be provided if the related owner occupied the property, 
 96.1   and only if all of the following criteria are met: 
 96.2      (1) the relative who is occupying the agricultural property 
 96.3   is a son, daughter, father, or mother of the owner of the 
 96.4   agricultural property or a son or daughter of the spouse of the 
 96.5   owner of the agricultural property, 
 96.6      (2) the owner of the agricultural property must be a 
 96.7   Minnesota resident, 
 96.8      (3) the owner of the agricultural property must not receive 
 96.9   homestead treatment on any other agricultural property in 
 96.10  Minnesota, and 
 96.11     (4) the owner of the agricultural property is limited to 
 96.12  only one agricultural homestead per family under this paragraph. 
 96.13     Neither the related occupant nor the owner of the property 
 96.14  may claim a property tax refund under chapter 290A for a 
 96.15  homestead occupied by a relative qualifying under this 
 96.16  paragraph.  For purposes of this paragraph, "agricultural 
 96.17  property" means the house, garage, other farm buildings and 
 96.18  structures, and agricultural land. 
 96.19     Application must be made to the assessor by the owner of 
 96.20  the agricultural property to receive homestead benefits under 
 96.21  this paragraph.  The assessor may require the necessary proof 
 96.22  that the requirements under this paragraph have been met. 
 96.23     (e) In the case of property owned by a property owner who 
 96.24  is married, the assessor must not deny homestead treatment in 
 96.25  whole or in part if only one of the spouses occupies the 
 96.26  property and the other spouse is absent due to:  (1) marriage 
 96.27  dissolution proceedings, (2) legal separation, (3) employment or 
 96.28  self-employment in another location, or (4) other personal 
 96.29  circumstances causing the spouses to live separately, not 
 96.30  including an intent to obtain two homestead classifications for 
 96.31  property tax purposes.  To qualify under clause (3), the 
 96.32  spouse's place of employment or self-employment must be at least 
 96.33  50 miles distant from the other spouse's place of employment, 
 96.34  and the homesteads must be at least 50 miles distant from each 
 96.35  other.  Homestead treatment, in whole or in part, shall not be 
 96.36  denied to the owner's spouse who previously occupied the 
 97.1   residence with the owner if the absence of the owner is due to 
 97.2   one of the exceptions provided in this paragraph. 
 97.3      (f) The assessor must not deny homestead treatment in whole 
 97.4   or in part if: 
 97.5      (1) in the case of a property owner who is not married, the 
 97.6   owner is absent due to residence in a nursing home or boarding 
 97.7   care facility and the property is not otherwise occupied; or 
 97.8      (2) in the case of a property owner who is married, the 
 97.9   owner or the owner's spouse or both are absent due to residence 
 97.10  in a nursing home or boarding care facility and the property is 
 97.11  not occupied or is occupied only by the owner's spouse. 
 97.12     (g) If an individual is purchasing property with the intent 
 97.13  of claiming it as a homestead and is required by the terms of 
 97.14  the financing agreement to have a relative shown on the deed as 
 97.15  a coowner, the assessor shall allow a full homestead 
 97.16  classification.  This provision only applies to first-time 
 97.17  purchasers, whether married or single, or to a person who had 
 97.18  previously been married and is purchasing as a single individual 
 97.19  for the first time.  The application for homestead benefits must 
 97.20  be on a form prescribed by the commissioner and must contain the 
 97.21  data necessary for the assessor to determine if full homestead 
 97.22  benefits are warranted. 
 97.23     (h) If residential or agricultural real estate is occupied 
 97.24  and used for purposes of a homestead by a child of a deceased 
 97.25  owner and the property is subject to jurisdiction of probate 
 97.26  court, the child shall receive relative homestead classification 
 97.27  under paragraph (c) or (d) to the same extent they would be 
 97.28  entitled to it if the owner was still living, until the probate 
 97.29  is completed.  For purposes of this paragraph, "child" includes 
 97.30  a relationship by blood or by marriage. 
 97.31     Sec. 10.  Minnesota Statutes 1998, section 273.124, 
 97.32  subdivision 7, is amended to read: 
 97.33     Subd. 7.  [LEASED BUILDINGS OR LAND.] For purposes of class 
 97.34  1 determinations, homesteads include: 
 97.35     (a) buildings and appurtenances owned and used by the 
 97.36  occupant as a permanent residence which are located upon land 
 98.1   the title to which is vested in a person or entity other than 
 98.2   the occupant; 
 98.3      (b) all buildings and appurtenances located upon land owned 
 98.4   by the occupant and used for the purposes of a homestead 
 98.5   together with the land upon which they are located, if all of 
 98.6   the following criteria are met: 
 98.7      (1) the occupant is using the property as a permanent 
 98.8   residence; 
 98.9      (2) the occupant is paying the property taxes and any 
 98.10  special assessments levied against the property; 
 98.11     (3) the occupant has signed a lease which has an option to 
 98.12  purchase the buildings and appurtenances; 
 98.13     (4) the term of the lease is at least five years; and 
 98.14     (5) the occupant has made a down payment of at least $5,000 
 98.15  in cash if the property was purchased by means of a contract for 
 98.16  deed or subject to a mortgage. 
 98.17     (c) all buildings and appurtenances and the land upon which 
 98.18  they are located that are used for purposes of a homestead, if 
 98.19  all of the following criteria are met: 
 98.20     (1) the land is owned by a utility, which maintains 
 98.21  ownership of the land in order to facilitate compliance with the 
 98.22  terms of its hydroelectric project license from the federal 
 98.23  energy regulatory commission; 
 98.24     (2) the land is leased for a term of 20 years or more; 
 98.25     (3) the occupant is using the property as a permanent 
 98.26  residence; and 
 98.27     (4) the occupant is paying the property taxes and any 
 98.28  special assessments levied against the property. 
 98.29     Any taxpayer meeting all the requirements of this paragraph 
 98.30  must notify the county assessor, or the assessor who has the 
 98.31  powers of the county assessor pursuant to section 273.063, in 
 98.32  writing, as soon as possible after signing the lease agreement 
 98.33  and occupying the buildings as a homestead. 
 98.34     Sec. 11.  Minnesota Statutes 1998, section 273.124, 
 98.35  subdivision 8, is amended to read: 
 98.36     Subd. 8.  [HOMESTEAD OWNED BY FAMILY FARM CORPORATION OR 
 99.1   PARTNERSHIP OR LEASED TO FAMILY FARM CORPORATION OR 
 99.2   PARTNERSHIP.] (a) Each family farm corporation and each 
 99.3   partnership operating a family farm is entitled to class 1b 
 99.4   under section 273.13, subdivision 22, paragraph (b), or class 2a 
 99.5   assessment for one homestead occupied by a shareholder or 
 99.6   partner thereof who is residing on the land and actively engaged 
 99.7   in farming of the land owned by the corporation or partnership.  
 99.8   Homestead treatment applies even if legal title to the property 
 99.9   is in the name of the corporation or partnership and not in the 
 99.10  name of the person residing on it.  "Family farm corporation" 
 99.11  and "family farm" have the meanings given in section 500.24, 
 99.12  except that the number of allowable shareholders or partners 
 99.13  under this subdivision shall not exceed 12. 
 99.14     (b) In addition to property specified in paragraph (a), any 
 99.15  other residences owned by corporations or partnerships described 
 99.16  in paragraph (a) which are located on agricultural land and 
 99.17  occupied as homesteads by shareholders or partners who are 
 99.18  actively engaged in farming on behalf of the corporation or 
 99.19  partnership must also be assessed as class 2a property or as 
 99.20  class 1b property under section 273.13, subdivision 22, 
 99.21  paragraph (b), but the property eligible is limited to the 
 99.22  residence itself and as much of the land surrounding the 
 99.23  homestead, not exceeding one acre, as is reasonably necessary 
 99.24  for the use of the dwelling as a home, and does not include any 
 99.25  other structures that may be located on it. 
 99.26     (c) Agricultural property owned by a shareholder of a 
 99.27  family farm corporation, as defined in paragraph (a), or by a 
 99.28  partner in a partnership operating a family farm and leased to 
 99.29  the family farm corporation by the shareholder or to the 
 99.30  partnership by the partner, is eligible for classification as 
 99.31  class 1b under section 273.13, subdivision 22, paragraph (b), or 
 99.32  class 2a under section 273.13, subdivision 23, paragraph (a), if 
 99.33  the owner is actually residing on the property and is actually 
 99.34  engaged in farming the land on behalf of the corporation or 
 99.35  partnership.  This paragraph applies without regard to any legal 
 99.36  possession rights of the family farm corporation or partnership 
100.1   operating a family farm under the lease. 
100.2      Sec. 12.  Minnesota Statutes 1998, section 273.124, 
100.3   subdivision 13, is amended to read: 
100.4      Subd. 13.  [HOMESTEAD APPLICATION.] (a) A person who meets 
100.5   the homestead requirements under subdivision 1 must file a 
100.6   homestead application with the county assessor to initially 
100.7   obtain homestead classification. 
100.8      (b) On or before January 2, 1993, each county assessor 
100.9   shall mail a homestead application to the owner of each parcel 
100.10  of property within the county which was classified as homestead 
100.11  for the 1992 assessment year.  The format and contents of a 
100.12  uniform homestead application shall be prescribed by the 
100.13  commissioner of revenue.  The commissioner shall consult with 
100.14  the chairs of the house and senate tax committees on the 
100.15  contents of the homestead application form.  The application 
100.16  must clearly inform the taxpayer that this application must be 
100.17  signed by all owners who occupy the property or by the 
100.18  qualifying relative and returned to the county assessor in order 
100.19  for the property to continue receiving homestead treatment.  The 
100.20  envelope containing the homestead application shall clearly 
100.21  identify its contents and alert the taxpayer of its necessary 
100.22  immediate response. 
100.23     (c) Every property owner applying for homestead 
100.24  classification must furnish to the county assessor the social 
100.25  security number of each occupant who is listed as an owner of 
100.26  the property on the deed of record, the name and address of each 
100.27  owner who does not occupy the property, and the name and social 
100.28  security number of each owner's spouse who occupies the 
100.29  property.  The application must be signed by each owner who 
100.30  occupies the property and by each owner's spouse who occupies 
100.31  the property, or, in the case of property that qualifies as a 
100.32  homestead under subdivision 1, paragraph (c), by the qualifying 
100.33  relative. 
100.34     If a property owner occupies a homestead, the property 
100.35  owner's spouse may not claim another property as a homestead 
100.36  unless the property owner and the property owner's spouse file 
101.1   with the assessor an affidavit or other proof required by the 
101.2   assessor stating that the property qualifies as a homestead 
101.3   under subdivision 1, paragraph (e). 
101.4      Owners or spouses occupying residences owned by their 
101.5   spouses and previously occupied with the other spouse, either of 
101.6   whom fail to include the other spouse's name and social security 
101.7   number on the homestead application or provide the affidavits or 
101.8   other proof requested, will be deemed to have elected to receive 
101.9   only partial homestead treatment of their residence.  The 
101.10  remainder of the residence will be classified as nonhomestead 
101.11  residential.  When an owner or spouse's name and social security 
101.12  number appear on homestead applications for two separate 
101.13  residences and only one application is signed, the owner or 
101.14  spouse will be deemed to have elected to homestead the residence 
101.15  for which the application was signed. 
101.16     The social security numbers or affidavits or other proofs 
101.17  of the property owners and spouses are private data on 
101.18  individuals as defined by section 13.02, subdivision 12, but, 
101.19  notwithstanding that section, the private data may be disclosed 
101.20  to the commissioner of revenue, or, for purposes of proceeding 
101.21  under the Revenue Recapture Act to recover personal property 
101.22  taxes owing, to the county treasurer. 
101.23     (d) If residential real estate is occupied and used for 
101.24  purposes of a homestead by a relative of the owner and qualifies 
101.25  for a homestead under subdivision 1, paragraph (c), in order for 
101.26  the property to receive homestead status, a homestead 
101.27  application must be filed with the assessor.  The social 
101.28  security number of each relative occupying the property and the 
101.29  social security number of each owner who is related to an 
101.30  occupant of the property shall be required on the homestead 
101.31  application filed under this subdivision.  If a different 
101.32  relative of the owner subsequently occupies the property, the 
101.33  owner of the property must notify the assessor within 30 days of 
101.34  the change in occupancy.  The social security number of a 
101.35  relative occupying the property is private data on individuals 
101.36  as defined by section 13.02, subdivision 12, but may be 
102.1   disclosed to the commissioner of revenue.  
102.2      (e) The homestead application shall also notify the 
102.3   property owners that the application filed under this section 
102.4   will not be mailed annually and that if the property is granted 
102.5   homestead status for the 1993 assessment, or any assessment year 
102.6   thereafter, that same property shall remain classified as 
102.7   homestead until the property is sold or transferred to another 
102.8   person, or the owners, the spouse of the owner, or the relatives 
102.9   no longer use the property as their homestead.  Upon the sale or 
102.10  transfer of the homestead property, a certificate of value must 
102.11  be timely filed with the county auditor as provided under 
102.12  section 272.115.  Failure to notify the assessor within 30 days 
102.13  that the property has been sold, transferred, or that the owner, 
102.14  the spouse of the owner, or the relative is no longer occupying 
102.15  the property as a homestead, shall result in the penalty 
102.16  provided under this subdivision and the property will lose its 
102.17  current homestead status. 
102.18     (f) If the homestead application is not returned within 30 
102.19  days, the county will send a second application to the present 
102.20  owners of record.  The notice of proposed property taxes 
102.21  prepared under section 275.065, subdivision 3, shall reflect the 
102.22  property's classification.  Beginning with assessment year 1993 
102.23  for all properties, if a homestead application has not been 
102.24  filed with the county by December 15, the assessor shall 
102.25  classify the property as nonhomestead for the current assessment 
102.26  year for taxes payable in the following year, provided that the 
102.27  owner may be entitled to receive the homestead classification by 
102.28  proper application under section 375.192. 
102.29     (g) At the request of the commissioner, each county must 
102.30  give the commissioner a list that includes the name and social 
102.31  security number of each property owner and the property owner's 
102.32  spouse occupying the property, or relative of a property owner, 
102.33  applying for homestead classification under this subdivision.  
102.34  The commissioner shall use the information provided on the lists 
102.35  as appropriate under the law, including for the detection of 
102.36  improper claims by owners, or relatives of owners, under chapter 
103.1   290A.  
103.2      (h) If the commissioner finds that a property owner may be 
103.3   claiming a fraudulent homestead, the commissioner shall notify 
103.4   the appropriate counties.  Within 90 days of the notification, 
103.5   the county assessor shall investigate to determine if the 
103.6   homestead classification was properly claimed.  If the property 
103.7   owner does not qualify, the county assessor shall notify the 
103.8   county auditor who will determine the amount of homestead 
103.9   benefits that had been improperly allowed.  For the purpose of 
103.10  this section, "homestead benefits" means the tax reduction 
103.11  resulting from the classification as a homestead under section 
103.12  273.13, the taconite homestead credit under section 273.135, and 
103.13  the supplemental homestead credit under section 273.1391. 
103.14     The county auditor shall send a notice to the person who 
103.15  owned the affected property at the time the homestead 
103.16  application related to the improper homestead was filed, 
103.17  demanding reimbursement of the homestead benefits plus a penalty 
103.18  equal to 100 percent of the homestead benefits.  The person 
103.19  notified may appeal the county's determination by serving copies 
103.20  of a petition for review with county officials as provided in 
103.21  section 278.01 and filing proof of service as provided in 
103.22  section 278.01 with the Minnesota tax court within 60 days of 
103.23  the date of the notice from the county.  Procedurally, the 
103.24  appeal is governed by the provisions in chapter 271 which apply 
103.25  to the appeal of a property tax assessment or levy, but without 
103.26  requiring any prepayment of the amount in controversy.  If the 
103.27  amount of homestead benefits and penalty is not paid within 60 
103.28  days, and if no appeal has been filed, the county auditor shall 
103.29  certify the amount of taxes and penalty to the county 
103.30  treasurer.  The county treasurer will add interest to the unpaid 
103.31  homestead benefits and penalty amounts at the rate provided in 
103.32  section 279.03 for real property taxes becoming delinquent in 
103.33  the calendar year during which the amount remains unpaid.  
103.34  Interest may be assessed for the period beginning 60 days after 
103.35  demand for payment was made. 
103.36     If the person notified is the current owner of the 
104.1   property, the treasurer may add the total amount of benefits, 
104.2   penalty, interest, and costs to the ad valorem taxes otherwise 
104.3   payable on the property by including the amounts on the property 
104.4   tax statements under section 276.04, subdivision 3.  The amounts 
104.5   added under this paragraph to the ad valorem taxes shall include 
104.6   interest accrued through December 31 of the year preceding the 
104.7   taxes payable year for which the amounts are first added.  These 
104.8   amounts, when added to the property tax statement, become 
104.9   subject to all the laws for the enforcement of real or personal 
104.10  property taxes for that year, and for any subsequent year. 
104.11     If the person notified is not the current owner of the 
104.12  property, the treasurer may collect the amounts due under the 
104.13  Revenue Recapture Act in chapter 270A, or use any of the powers 
104.14  granted in sections 277.20 and 277.21 without exclusion, to 
104.15  enforce payment of the benefits, penalty, interest, and costs, 
104.16  as if those amounts were delinquent tax obligations of the 
104.17  person who owned the property at the time the application 
104.18  related to the improperly allowed homestead was filed.  The 
104.19  treasurer may relieve a prior owner of personal liability for 
104.20  the benefits, penalty, interest, and costs, and instead extend 
104.21  those amounts on the tax lists against the property as provided 
104.22  in this paragraph to the extent that the current owner agrees in 
104.23  writing.  On all demands, billings, property tax statements, and 
104.24  related correspondence, the county must list and state 
104.25  separately the amounts of homestead benefits, penalty, interest 
104.26  and costs being demanded, billed or assessed. 
104.27     (i) Any amount of homestead benefits recovered by the 
104.28  county from the property owner shall be distributed to the 
104.29  county, city or town, and school district where the property is 
104.30  located in the same proportion that each taxing district's levy 
104.31  was to the total of the three taxing districts' levy for the 
104.32  current year.  Any amount recovered attributable to taconite 
104.33  homestead credit shall be transmitted to the St. Louis county 
104.34  auditor to be deposited in the taconite property tax relief 
104.35  account.  Any amount recovered that is attributable to 
104.36  supplemental homestead credit is to be transmitted to the 
105.1   commissioner of revenue for deposit in the general fund of the 
105.2   state treasury.  The total amount of penalty collected must be 
105.3   deposited in the county general fund. 
105.4      (j) If a property owner has applied for more than one 
105.5   homestead and the county assessors cannot determine which 
105.6   property should be classified as homestead, the county assessors 
105.7   will refer the information to the commissioner.  The 
105.8   commissioner shall make the determination and notify the 
105.9   counties within 60 days. 
105.10     (k) In addition to lists of homestead properties, the 
105.11  commissioner may ask the counties to furnish lists of all 
105.12  properties and the record owners.  The social security numbers 
105.13  and federal identification numbers that are maintained by a 
105.14  county or city assessor for property tax administration 
105.15  purposes, and that may appear on the lists retain their 
105.16  classification as private or nonpublic data; but may be viewed, 
105.17  accessed, and used by the county auditor or treasurer of the 
105.18  same county for the limited purpose of assisting the 
105.19  commissioner in the preparation of microdata samples under 
105.20  section 270.0681. 
105.21     Sec. 13.  Minnesota Statutes 1998, section 273.124, 
105.22  subdivision 14, is amended to read: 
105.23     Subd. 14.  [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.] 
105.24  (a) Real estate of less than ten acres that is the homestead of 
105.25  its owner must be classified as class 2a under section 273.13, 
105.26  subdivision 23, paragraph (a), if:  
105.27     (1) the parcel on which the house is located is contiguous 
105.28  on at least two sides to (i) agricultural land, (ii) land owned 
105.29  or administered by the United States Fish and Wildlife Service, 
105.30  or (iii) land administered by the department of natural 
105.31  resources on which in lieu taxes are paid under sections 477A.11 
105.32  to 477A.14; 
105.33     (2) its owner also owns a noncontiguous parcel of 
105.34  agricultural land that is at least 20 acres; 
105.35     (3) the noncontiguous land is located not farther than four 
105.36  townships or cities, or a combination of townships or cities 
106.1   from the homestead; and 
106.2      (4) the agricultural use value of the noncontiguous land 
106.3   and farm buildings is equal to at least 50 percent of the market 
106.4   value of the house, garage, and one acre of land. 
106.5      Homesteads initially classified as class 2a under the 
106.6   provisions of this paragraph shall remain classified as class 
106.7   2a, irrespective of subsequent changes in the use of adjoining 
106.8   properties, as long as the homestead remains under the same 
106.9   ownership, the owner owns a noncontiguous parcel of agricultural 
106.10  land that is at least 20 acres, and the agricultural use value 
106.11  qualifies under clause (4).  Homestead classification under this 
106.12  paragraph is limited to property that qualified under this 
106.13  paragraph for the 1998 assessment. 
106.14     (b) Agricultural property consisting of at least 40 acres 
106.15  shall be classified homestead, to the same extent as other 
106.16  agricultural homestead property, if all of the following 
106.17  criteria are met: 
106.18     (1) the owner is actively farming the agricultural 
106.19  property; 
106.20     (2) the owner of the agricultural property is a Minnesota 
106.21  resident; 
106.22     (3) neither the owner nor the spouse of the agricultural 
106.23  property claims another agricultural homestead in Minnesota; and 
106.24     (4) the owner does not live farther than four townships or 
106.25  cities, or a combination of four townships or cities, from the 
106.26  agricultural property. 
106.27     (b) (c) Except as provided in paragraph (d) (e), 
106.28  noncontiguous land shall be included as part of a homestead 
106.29  under section 273.13, subdivision 23, paragraph (a), only if the 
106.30  homestead is classified as class 2a and the detached land is 
106.31  located in the same township or city, or not farther than four 
106.32  townships or cities or combination thereof from the homestead.  
106.33  Any taxpayer of these noncontiguous lands must notify the county 
106.34  assessor that the noncontiguous land is part of the taxpayer's 
106.35  homestead, and, if the homestead is located in another county, 
106.36  the taxpayer must also notify the assessor of the other county. 
107.1      (c) (d) Agricultural land used for purposes of a homestead 
107.2   and actively farmed by a person holding a vested remainder 
107.3   interest in it must be classified as a homestead under section 
107.4   273.13, subdivision 23, paragraph (a).  If agricultural land is 
107.5   classified class 2a, any other dwellings on the land used for 
107.6   purposes of a homestead by persons holding vested remainder 
107.7   interests who are actively engaged in farming the property, and 
107.8   up to one acre of the land surrounding each homestead and 
107.9   reasonably necessary for the use of the dwelling as a home, must 
107.10  also be assessed class 2a. 
107.11     (d) (e) Agricultural land and buildings that were class 2a 
107.12  homestead property under section 273.13, subdivision 23, 
107.13  paragraph (a), for the 1997 assessment shall remain classified 
107.14  as agricultural homesteads for subsequent assessments if:  
107.15     (1) the property owner abandoned the homestead dwelling 
107.16  located on the agricultural homestead as a result of the April 
107.17  1997 floods; 
107.18     (2) the property is located in the county of Polk, Clay, 
107.19  Kittson, Marshall, Norman, or Wilkin; 
107.20     (3) the agricultural land and buildings remain under the 
107.21  same ownership for the current assessment year as existed for 
107.22  the 1997 assessment year and continue to be used for 
107.23  agricultural purposes; 
107.24     (4) the dwelling occupied by the owner is located in 
107.25  Minnesota and is within 30 miles of one of the parcels of 
107.26  agricultural land that is owned by the taxpayer; and 
107.27     (5) the owner notifies the county assessor that the 
107.28  relocation was due to the 1997 floods, and the owner furnishes 
107.29  the assessor any information deemed necessary by the assessor in 
107.30  verifying the change in dwelling.  Further notifications to the 
107.31  assessor are not required if the property continues to meet all 
107.32  the requirements in this paragraph and any dwellings on the 
107.33  agricultural land remain uninhabited. 
107.34     (e) (f) Agricultural land and buildings that were class 2a 
107.35  homestead property under section 273.13, subdivision 23, 
107.36  paragraph (a), for the 1998 assessment shall remain classified 
108.1   agricultural homesteads for subsequent assessments if: 
108.2      (1) the property owner abandoned the homestead dwelling 
108.3   located on the agricultural homestead as a result of damage 
108.4   caused by a March 29, 1998, tornado; 
108.5      (2) the property is located in the county of Blue Earth, 
108.6   Brown, Cottonwood, LeSueur, Nicollet, Nobles, or Rice; 
108.7      (3) the agricultural land and buildings remain under the 
108.8   same ownership for the current assessment year as existed for 
108.9   the 1998 assessment year; 
108.10     (4) the dwelling occupied by the owner is located in this 
108.11  state and is within 50 miles of one of the parcels of 
108.12  agricultural land that is owned by the taxpayer; and 
108.13     (5) the owner notifies the county assessor that the 
108.14  relocation was due to a March 29, 1998, tornado, and the owner 
108.15  furnishes the assessor any information deemed necessary by the 
108.16  assessor in verifying the change in homestead dwelling.  For 
108.17  taxes payable in 1999, the owner must notify the assessor by 
108.18  December 1, 1998.  Further notifications to the assessor are not 
108.19  required if the property continues to meet all the requirements 
108.20  in this paragraph and any dwellings on the agricultural land 
108.21  remain uninhabited. 
108.22     Sec. 14.  Minnesota Statutes 1998, section 273.124, is 
108.23  amended by adding a subdivision to read: 
108.24     Subd. 20.  [ADDITIONAL REQUIREMENTS PROHIBITED.] No 
108.25  political subdivision may impose any requirements not contained 
108.26  in this chapter or chapter 272 to disqualify property from being 
108.27  classified as a homestead if the property otherwise meets the 
108.28  requirements for homestead treatment under this chapter and 
108.29  chapter 272. 
108.30     Sec. 15.  Minnesota Statutes 1998, section 273.13, 
108.31  subdivision 22, is amended to read: 
108.32     Subd. 22.  [CLASS 1.] (a) Except as provided in subdivision 
108.33  23, real estate which is residential and used for homestead 
108.34  purposes is class 1.  The market value of class 1a property must 
108.35  be determined based upon the value of the house, garage, and 
108.36  land.  
109.1      The first $75,000 $76,000 of market value of class 1a 
109.2   property has a net class rate of one percent of its market 
109.3   value; and the market value of class 1a property that 
109.4   exceeds $75,000 $76,000 has a class rate of 1.7 1.65 percent of 
109.5   its market value.  
109.6      (b) Class 1b property includes homestead real estate or 
109.7   homestead manufactured homes used for the purposes of a 
109.8   homestead by 
109.9      (1) any blind person, or the blind person and the blind 
109.10  person's spouse; or 
109.11     (2) any person, hereinafter referred to as "veteran," who: 
109.12     (i) served in the active military or naval service of the 
109.13  United States; and 
109.14     (ii) is entitled to compensation under the laws and 
109.15  regulations of the United States for permanent and total 
109.16  service-connected disability due to the loss, or loss of use, by 
109.17  reason of amputation, ankylosis, progressive muscular 
109.18  dystrophies, or paralysis, of both lower extremities, such as to 
109.19  preclude motion without the aid of braces, crutches, canes, or a 
109.20  wheelchair; and 
109.21     (iii) has acquired a special housing unit with special 
109.22  fixtures or movable facilities made necessary by the nature of 
109.23  the veteran's disability, or the surviving spouse of the 
109.24  deceased veteran for as long as the surviving spouse retains the 
109.25  special housing unit as a homestead; or 
109.26     (3) any person who: 
109.27     (i) is permanently and totally disabled and 
109.28     (ii) receives 90 percent or more of total household income, 
109.29  as defined in section 290A.03, subdivision 5, from 
109.30     (A) aid from any state as a result of that disability; or 
109.31     (B) supplemental security income for the disabled; or 
109.32     (C) workers' compensation based on a finding of total and 
109.33  permanent disability; or 
109.34     (D) social security disability, including the amount of a 
109.35  disability insurance benefit which is converted to an old age 
109.36  insurance benefit and any subsequent cost of living increases; 
110.1   or 
110.2      (E) aid under the federal Railroad Retirement Act of 1937, 
110.3   United States Code Annotated, title 45, section 228b(a)5; or 
110.4      (F) a pension from any local government retirement fund 
110.5   located in the state of Minnesota as a result of that 
110.6   disability; or 
110.7      (G) pension, annuity, or other income paid as a result of 
110.8   that disability from a private pension or disability plan, 
110.9   including employer, employee, union, and insurance plans and 
110.10     (iii) has household income as defined in section 290A.03, 
110.11  subdivision 5, of $50,000 or less; or 
110.12     (4) any person who is permanently and totally disabled and 
110.13  whose household income as defined in section 290A.03, 
110.14  subdivision 5, is 275 percent or less of the federal poverty 
110.15  level. 
110.16     Property is classified and assessed under clause (4) only 
110.17  if the government agency or income-providing source certifies, 
110.18  upon the request of the homestead occupant, that the homestead 
110.19  occupant satisfies the disability requirements of this paragraph.
110.20     Property is classified and assessed pursuant to clause (1) 
110.21  only if the commissioner of economic security certifies to the 
110.22  assessor that the homestead occupant satisfies the requirements 
110.23  of this paragraph.  
110.24     Permanently and totally disabled for the purpose of this 
110.25  subdivision means a condition which is permanent in nature and 
110.26  totally incapacitates the person from working at an occupation 
110.27  which brings the person an income.  The first $32,000 market 
110.28  value of class 1b property has a net class rate of .45 percent 
110.29  of its market value.  The remaining market value of class 1b 
110.30  property has a net class rate using the rates for class 1 or 
110.31  class 2a property, whichever is appropriate, of similar market 
110.32  value.  
110.33     (c) Class 1c property is commercial use real property that 
110.34  abuts a lakeshore line and is devoted to temporary and seasonal 
110.35  residential occupancy for recreational purposes but not devoted 
110.36  to commercial purposes for more than 250 days in the year 
111.1   preceding the year of assessment, and that includes a portion 
111.2   used as a homestead by the owner, which includes a dwelling 
111.3   occupied as a homestead by a shareholder of a corporation that 
111.4   owns the resort or a partner in a partnership that owns the 
111.5   resort, even if the title to the homestead is held by the 
111.6   corporation or partnership.  For purposes of this clause, 
111.7   property is devoted to a commercial purpose on a specific day if 
111.8   any portion of the property, excluding the portion used 
111.9   exclusively as a homestead, is used for residential occupancy 
111.10  and a fee is charged for residential occupancy.  Class 1c 
111.11  property has a class rate of one percent of total market value 
111.12  with the following limitation:  the area of the property must 
111.13  not exceed 100 feet of lakeshore footage for each cabin or 
111.14  campsite located on the property up to a total of 800 feet and 
111.15  500 feet in depth, measured away from the lakeshore.  If any 
111.16  portion of the class 1c resort property is classified as class 
111.17  4c under subdivision 25, the entire property must meet the 
111.18  requirements of subdivision 25, paragraph (d), clause (1), to 
111.19  qualify for class 1c treatment under this paragraph. 
111.20     (d) Class 1d property includes structures that meet all of 
111.21  the following criteria: 
111.22     (1) the structure is located on property that is classified 
111.23  as agricultural property under section 273.13, subdivision 23; 
111.24     (2) the structure is occupied exclusively by seasonal farm 
111.25  workers during the time when they work on that farm, and the 
111.26  occupants are not charged rent for the privilege of occupying 
111.27  the property, provided that use of the structure for storage of 
111.28  farm equipment and produce does not disqualify the property from 
111.29  classification under this paragraph; 
111.30     (3) the structure meets all applicable health and safety 
111.31  requirements for the appropriate season; and 
111.32     (4) the structure is not salable as residential property 
111.33  because it does not comply with local ordinances relating to 
111.34  location in relation to streets or roads. 
111.35     The market value of class 1d property has the same class 
111.36  rates as class 1a property under paragraph (a). 
112.1      Sec. 16.  Minnesota Statutes 1998, section 273.13, 
112.2   subdivision 23, is amended to read: 
112.3      Subd. 23.  [CLASS 2.] (a) Class 2a property is agricultural 
112.4   land including any improvements that is homesteaded.  The market 
112.5   value of the house and garage and immediately surrounding one 
112.6   acre of land has the same class rates as class 1a property under 
112.7   subdivision 22.  The value of the remaining land including 
112.8   improvements up to $115,000 has a net class rate of 0.35 percent 
112.9   of market value.  The remaining value of class 2a property over 
112.10  $115,000 of market value that does not exceed 320 acres up to 
112.11  and including $600,000 market value has a net class rate of 0.8 
112.12  percent of market value.  The remaining property 
112.13  over $115,000 $600,000 market value in excess of 320 acres has a 
112.14  class rate of 1.25 1.20 percent of market value. 
112.15     (b) Class 2b property is (1) real estate, rural in 
112.16  character and used exclusively for growing trees for timber, 
112.17  lumber, and wood and wood products; (2) real estate that is not 
112.18  improved with a structure and is used exclusively for growing 
112.19  trees for timber, lumber, and wood and wood products, if the 
112.20  owner has participated or is participating in a cost-sharing 
112.21  program for afforestation, reforestation, or timber stand 
112.22  improvement on that particular property, administered or 
112.23  coordinated by the commissioner of natural resources; (3) real 
112.24  estate that is nonhomestead agricultural land; or (4) a landing 
112.25  area or public access area of a privately owned public use 
112.26  airport.  Class 2b property has a net class rate of 1.25 1.20 
112.27  percent of market value. 
112.28     (c) Agricultural land as used in this section means 
112.29  contiguous acreage of ten acres or more, used during the 
112.30  preceding year for agricultural purposes.  "Agricultural 
112.31  purposes" as used in this section means the raising or 
112.32  cultivation of agricultural products or enrollment in the 
112.33  Reinvest in Minnesota program under sections 103F.501 to 
112.34  103F.535 or the federal Conservation Reserve Program as 
112.35  contained in Public Law Number 99-198.  Contiguous acreage on 
112.36  the same parcel, or contiguous acreage on an immediately 
113.1   adjacent parcel under the same ownership, may also qualify as 
113.2   agricultural land, but only if it is pasture, timber, waste, 
113.3   unusable wild land, or land included in state or federal farm 
113.4   programs.  Agricultural classification for property shall be 
113.5   determined excluding the house, garage, and immediately 
113.6   surrounding one acre of land, and shall not be based upon the 
113.7   market value of any residential structures on the parcel or 
113.8   contiguous parcels under the same ownership. 
113.9      (d) Real estate, excluding the house, garage, and 
113.10  immediately surrounding one acre of land, of less than ten acres 
113.11  which is exclusively and intensively used for raising or 
113.12  cultivating agricultural products, shall be considered as 
113.13  agricultural land.  
113.14     Land shall be classified as agricultural even if all or a 
113.15  portion of the agricultural use of that property is the leasing 
113.16  to, or use by another person for agricultural purposes. 
113.17     Classification under this subdivision is not determinative 
113.18  for qualifying under section 273.111. 
113.19     The property classification under this section supersedes, 
113.20  for property tax purposes only, any locally administered 
113.21  agricultural policies or land use restrictions that define 
113.22  minimum or maximum farm acreage. 
113.23     (e) The term "agricultural products" as used in this 
113.24  subdivision includes production for sale of:  
113.25     (1) livestock, dairy animals, dairy products, poultry and 
113.26  poultry products, fur-bearing animals, horticultural and nursery 
113.27  stock described in sections 18.44 to 18.61, fruit of all kinds, 
113.28  vegetables, forage, grains, bees, and apiary products by the 
113.29  owner; 
113.30     (2) fish bred for sale and consumption if the fish breeding 
113.31  occurs on land zoned for agricultural use; 
113.32     (3) the commercial boarding of horses if the boarding is 
113.33  done in conjunction with raising or cultivating agricultural 
113.34  products as defined in clause (1); 
113.35     (4) property which is owned and operated by nonprofit 
113.36  organizations used for equestrian activities, excluding racing; 
114.1   and 
114.2      (5) game birds and waterfowl bred and raised for use on a 
114.3   shooting preserve licensed under section 97A.115; 
114.4      (6) insects primarily bred to be used as food for animals; 
114.5   and 
114.6      (7) trees, grown for sale as a crop, and not sold for 
114.7   timber, lumber, wood, or wood products. 
114.8      (f) If a parcel used for agricultural purposes is also used 
114.9   for commercial or industrial purposes, including but not limited 
114.10  to:  
114.11     (1) wholesale and retail sales; 
114.12     (2) processing of raw agricultural products or other goods; 
114.13     (3) warehousing or storage of processed goods; and 
114.14     (4) office facilities for the support of the activities 
114.15  enumerated in clauses (1), (2), and (3), 
114.16  the assessor shall classify the part of the parcel used for 
114.17  agricultural purposes as class 1b, 2a, or 2b, whichever is 
114.18  appropriate, and the remainder in the class appropriate to its 
114.19  use.  The grading, sorting, and packaging of raw agricultural 
114.20  products for first sale is considered an agricultural purpose.  
114.21  A greenhouse or other building where horticultural or nursery 
114.22  products are grown that is also used for the conduct of retail 
114.23  sales must be classified as agricultural if it is primarily used 
114.24  for the growing of horticultural or nursery products from seed, 
114.25  cuttings, or roots and occasionally as a showroom for the retail 
114.26  sale of those products.  Use of a greenhouse or building only 
114.27  for the display of already grown horticultural or nursery 
114.28  products does not qualify as an agricultural purpose.  
114.29     The assessor shall determine and list separately on the 
114.30  records the market value of the homestead dwelling and the one 
114.31  acre of land on which that dwelling is located.  If any farm 
114.32  buildings or structures are located on this homesteaded acre of 
114.33  land, their market value shall not be included in this separate 
114.34  determination.  
114.35     (g) To qualify for classification under paragraph (b), 
114.36  clause (4), a privately owned public use airport must be 
115.1   licensed as a public airport under section 360.018.  For 
115.2   purposes of paragraph (b), clause (4), "landing area" means that 
115.3   part of a privately owned public use airport properly cleared, 
115.4   regularly maintained, and made available to the public for use 
115.5   by aircraft and includes runways, taxiways, aprons, and sites 
115.6   upon which are situated landing or navigational aids.  A landing 
115.7   area also includes land underlying both the primary surface and 
115.8   the approach surfaces that comply with all of the following:  
115.9      (i) the land is properly cleared and regularly maintained 
115.10  for the primary purposes of the landing, taking off, and taxiing 
115.11  of aircraft; but that portion of the land that contains 
115.12  facilities for servicing, repair, or maintenance of aircraft is 
115.13  not included as a landing area; 
115.14     (ii) the land is part of the airport property; and 
115.15     (iii) the land is not used for commercial or residential 
115.16  purposes. 
115.17  The land contained in a landing area under paragraph (b), clause 
115.18  (4), must be described and certified by the commissioner of 
115.19  transportation.  The certification is effective until it is 
115.20  modified, or until the airport or landing area no longer meets 
115.21  the requirements of paragraph (b), clause (4).  For purposes of 
115.22  paragraph (b), clause (4), "public access area" means property 
115.23  used as an aircraft parking ramp, apron, or storage hangar, or 
115.24  an arrival and departure building in connection with the airport.
115.25     Sec. 17.  Minnesota Statutes 1998, section 273.13, 
115.26  subdivision 24, is amended to read: 
115.27     Subd. 24.  [CLASS 3.] (a) Commercial and industrial 
115.28  property and utility real and personal property, except class 5 
115.29  property as identified in subdivision 31, clause (1), is class 
115.30  3a.  Each parcel of real property has a class rate of 2.45 2.4 
115.31  percent of the first tier of market value, and 3.5 3.4 percent 
115.32  of the remaining market value, except that in the case of 
115.33  contiguous parcels of commercial and industrial property owned 
115.34  by the same person or entity, only the value equal to the 
115.35  first-tier value of the contiguous parcels qualifies for the 
115.36  reduced class rate.  For the purposes of this subdivision, the 
116.1   first tier means the first $150,000 of market value.  In the 
116.2   case of utility property owned by one person or entity, only one 
116.3   parcel in each county has a reduced class rate on the first tier 
116.4   of market value.  Real property owned in fee by a utility for 
116.5   transmission line right-of-way shall be classified at the class 
116.6   rate for the higher tier.  All personal property shall be 
116.7   classified at the class rate for the higher tier.  For purposes 
116.8   of this subdivision "personal property" means tools, implements, 
116.9   and machinery of an electric generating, transmission, or 
116.10  distribution system, or a pipeline system transporting or 
116.11  distributing water, gas, crude oil, or petroleum products or 
116.12  mains and pipes used in the distribution of steam or hot or 
116.13  chilled water for heating or cooling buildings, which are 
116.14  fixtures. 
116.15     For purposes of this paragraph, parcels are considered to 
116.16  be contiguous even if they are separated from each other by a 
116.17  road, street, vacant lot, waterway, or other similar intervening 
116.18  type of property. 
116.19     (b) Employment property defined in section 469.166, during 
116.20  the period provided in section 469.170, shall constitute class 
116.21  3b and has a class rate of 2.3 percent of the first $50,000 of 
116.22  market value and 3.5 percent of the remainder, except that for 
116.23  employment property located in a border city enterprise zone 
116.24  designated pursuant to section 469.168, subdivision 4, paragraph 
116.25  (c),.  The class rate of the first tier of market value and the 
116.26  class rate of the remainder is rates for class 3b property are 
116.27  determined under paragraph (a), unless the governing body of the 
116.28  city designated as an enterprise zone determines that a specific 
116.29  parcel shall be assessed pursuant to the first clause of this 
116.30  sentence.  The governing body may provide for assessment under 
116.31  the first clause of the preceding sentence only for property 
116.32  which is located in an area which has been designated by the 
116.33  governing body for the receipt of tax reductions authorized by 
116.34  section 469.171, subdivision 1. 
116.35     (c)(1) Subject to the limitations of clause (2), structures 
116.36  which are (i) located on property classified as class 3a, (ii) 
117.1   constructed under an initial building permit issued after 
117.2   January 2, 1996, (iii) located in a transit zone as defined 
117.3   under section 473.3915, subdivision 3, (iv) located within the 
117.4   boundaries of a school district, and (v) not primarily used for 
117.5   retail or transient lodging purposes, shall have a class rate 
117.6   equal to 85 percent of to the lesser of 2.975 percent or the 
117.7   class rate of the second tier of the commercial property rate 
117.8   under paragraph (a) on any portion of the market value that does 
117.9   not qualify for the first tier class rate under paragraph (a).  
117.10  As used in item (v), a structure is primarily used for retail or 
117.11  transient lodging purposes if over 50 percent of its square 
117.12  footage is used for those purposes.  A class rate equal to 85 
117.13  percent of the lesser of 2.975 percent or the class rate of the 
117.14  second tier of the commercial property class rate under 
117.15  paragraph (a) shall also apply to improvements to existing 
117.16  structures that meet the requirements of items (i) to (v) if the 
117.17  improvements are constructed under an initial building permit 
117.18  issued after January 2, 1996, even if the remainder of the 
117.19  structure was constructed prior to January 2, 1996.  For the 
117.20  purposes of this paragraph, a structure shall be considered to 
117.21  be located in a transit zone if any portion of the structure 
117.22  lies within the zone.  If any property once eligible for 
117.23  treatment under this paragraph ceases to remain eligible due to 
117.24  revisions in transit zone boundaries, the property shall 
117.25  continue to receive treatment under this paragraph for a period 
117.26  of three years. 
117.27     (2) This clause applies to any structure qualifying for the 
117.28  transit zone reduced class rate under clause (1) on January 2, 
117.29  1999, or any structure meeting any of the qualification criteria 
117.30  in item (i) and otherwise qualifying for the transit zone 
117.31  reduced class rate under clause (1).  Such a structure continues 
117.32  to receive the transit zone reduced class rate until the 
117.33  occurrence of one of the events in item (ii).  Property 
117.34  qualifying under item (i)(D), that is located outside of a city 
117.35  of the first class, qualifies for the transit zone reduced class 
117.36  rate as provided in that item.  Property qualifying under item 
118.1   (i)(E) qualifies for the transit zone reduced class rate as 
118.2   provided in that item. 
118.3      (i) A structure qualifies for the rate in this clause if it 
118.4   is: 
118.5      (A) property for which a building permit was issued before 
118.6   December 31, 1998; or 
118.7      (B) property for which a building permit was issued before 
118.8   June 30, 2001, if: 
118.9      (I) at least 50 percent of the land on which the structure 
118.10  is to be built has been acquired or is the subject of signed 
118.11  purchase agreements or signed options as of March 15, 1998, by 
118.12  the entity that proposes construction of the project or an 
118.13  affiliate of the entity; 
118.14     (II) signed agreements have been entered into with one 
118.15  entity or with affiliated entities to lease for the account of 
118.16  the entity or affiliated entities at least 50 percent of the 
118.17  square footage of the structure or the owner of the structure 
118.18  will occupy at least 50 percent of the square footage of the 
118.19  structure; and 
118.20     (III) one of the following requirements is met: 
118.21     the project proposer has submitted the completed data 
118.22  portions of an environmental assessment worksheet by December 
118.23  31, 1998; or 
118.24     a notice of determination of adequacy of an environmental 
118.25  impact statement has been published by April 1, 1999; or 
118.26     an alternative urban areawide review has been completed by 
118.27  April 1, 1999; or 
118.28     (C) property for which a building permit is issued before 
118.29  July 30, 1999, if: 
118.30     (I) at least 50 percent of the land on which the structure 
118.31  is to be built has been acquired or is the subject of signed 
118.32  purchase agreements as of March 31, 1998, by the entity that 
118.33  proposes construction of the project or an affiliate of the 
118.34  entity; 
118.35     (II) a signed agreement has been entered into between the 
118.36  building developer and a tenant to lease for its own account at 
119.1   least 200,000 square feet of space in the building; 
119.2      (III) a signed letter of intent is entered into by July 1, 
119.3   1998, between the building developer and the tenant to lease the 
119.4   space for its own account; and 
119.5      (IV) the environmental review process required by state law 
119.6   was commenced by December 31, 1998; 
119.7      (D) property for which an irrevocable letter of credit with 
119.8   a housing and redevelopment authority was signed before December 
119.9   31, 1998.  The structure shall receive the transit zone reduced 
119.10  class rate during construction and for the duration of time that 
119.11  the original tenants remain in the building.  Any unoccupied net 
119.12  leasable square footage that is not leased within 36 months 
119.13  after the certificate of occupancy has been issued for the 
119.14  building shall not be eligible to receive the reduced class 
119.15  rate.  This reduced class rate applies only if the entity that 
119.16  constructed the structure continues to own the property; 
119.17     (E) property, located in a city of the first class, and for 
119.18  which the building permits for the excavation, the parking ramp, 
119.19  and the office tower were issued prior to April 1, 1999, shall 
119.20  receive the reduced class rate during construction and for the 
119.21  first five assessment years immediately following its initial 
119.22  occupancy provided that, when completed, at least 25 percent of 
119.23  the net leasable square footage must be occupied by the entity 
119.24  or the parent entity constructing the structure each year during 
119.25  this time period.  In order to receive the reduced class rate on 
119.26  the structure in any subsequent assessment years, at least 50 
119.27  percent of the rentable square footage must be occupied by the 
119.28  entity or the parent entity that constructed the structure.  
119.29  This reduced class rate applies only if the entity or the parent 
119.30  entity that constructed the structure continues to own the 
119.31  property. 
119.32     (ii) A structure specified by this clause, other than a 
119.33  structure qualifying under clause (i)(D) or (E), shall continue 
119.34  to receive the transit zone reduced class rate until the 
119.35  occurrence of one of the following events: 
119.36     (A) if the structure upon initial occupancy will be owner 
120.1   occupied by the entity initially constructing the structure or 
120.2   an affiliated entity, the structure receives the reduced class 
120.3   rate until the structure ceases to be at least 50 percent 
120.4   occupied by the entity or an affiliated entity, provided, if the 
120.5   portion of the structure occupied by that entity or an affiliate 
120.6   of the entity is less than 85 percent, the transit zone class 
120.7   rate reduction for the portion of structure not so occupied 
120.8   terminates upon the leasing of such space to any nonaffiliated 
120.9   entity; or 
120.10     (B) if the structure is leased by a single entity or 
120.11  affiliated entity at the time of initial occupancy, the 
120.12  structure shall receive the reduced class rate until the 
120.13  structure ceases to be at least 50 percent occupied by the 
120.14  entity or an affiliated entity, provided, if the portion of the 
120.15  structure occupied by that entity or an affiliate of the entity 
120.16  is less than 85 percent, the transit zone class rate reduction 
120.17  for the portion of structure not so occupied shall terminate 
120.18  upon the leasing of such space to any nonaffiliated entity; or 
120.19     (C) if the structure meets the criteria in item (i)(C), the 
120.20  structure shall receive the reduced class rate until the 
120.21  expiration of the initial lease term of the applicable tenants. 
120.22     Percentages occupied or leased shall be determined based 
120.23  upon net leasable square footage in the structure.  The assessor 
120.24  shall allocate the value of the structure in the same fashion as 
120.25  provided in the general law for portions of any structure 
120.26  receiving and not receiving the transit tax class reduction as a 
120.27  result of this clause. 
120.28     Sec. 18.  Minnesota Statutes 1998, section 273.13, is 
120.29  amended by adding a subdivision to read: 
120.30     Subd. 24a.  [TRANSIT ZONE PROPERTIES; PERSONAL PROPERTY 
120.31  TAX.] (a) Notwithstanding the provisions of section 272.02 or 
120.32  any other law to the contrary, a personal property tax is 
120.33  imposed on the leasehold of a tenant of a structure described in 
120.34  subdivision 24, paragraph (c), clause (2), item (i)(C). 
120.35     (b) The tax equals the amount obtained by multiplying the 
120.36  sum of the local tax rates by: 
121.1      (1) the estimated market value of the structure multiplied 
121.2   by 
121.3      (2) the square footage of the structure under lease that 
121.4   qualifies under subdivision 24, clause (c)(1), divided by 
121.5      (3) the total square footage of the structure that 
121.6   qualifies under subdivision 24, clause (c)(1), multiplied by 
121.7      (4) the difference between the class rate under subdivision 
121.8   24, paragraph (a), for the second tier and the class rate under 
121.9   subdivision 24, paragraph (c), for the second tier for the 
121.10  qualifying parts of a structure. 
121.11     (c) The tax under this subdivision does not apply to a 
121.12  lease that: 
121.13     (1) was executed before May 1, 1999; 
121.14     (2) was entered according to a binding written agreement 
121.15  executed before May 1, 1999; or 
121.16     (3) is a lease entered under an expansion option contained 
121.17  in a lease or binding written agreement qualifying under clause 
121.18  (1) or (2). 
121.19     (d) The tax imposed under this subdivision is a personal 
121.20  property tax and is imposed on the lessee or tenant and not on 
121.21  the structure or the real property.  The tax is an obligation of 
121.22  the lessee or tenant and must be collected in the manner 
121.23  provided for personal property taxes. 
121.24     (e) The personal property tax applies only to a year in 
121.25  which the leased structure qualifies for the transit zone class 
121.26  rate. 
121.27     Sec. 19.  Minnesota Statutes 1998, section 273.13, 
121.28  subdivision 25, is amended to read: 
121.29     Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
121.30  estate containing four or more units and used or held for use by 
121.31  the owner or by the tenants or lessees of the owner as a 
121.32  residence for rental periods of 30 days or more.  Class 4a also 
121.33  includes hospitals licensed under sections 144.50 to 144.56, 
121.34  other than hospitals exempt under section 272.02, and contiguous 
121.35  property used for hospital purposes, without regard to whether 
121.36  the property has been platted or subdivided.  Class 4a property 
122.1   in a city with a population of 5,000 or less, that is (1) 
122.2   located outside of the metropolitan area, as defined in section 
122.3   473.121, subdivision 2, or outside any county contiguous to the 
122.4   metropolitan area, and (2) whose city boundary is at least 15 
122.5   miles from the boundary of any city with a population greater 
122.6   than 5,000 has a class rate of 2.15 percent of market value.  
122.7   All other class 4a property has a class rate of 2.5 2.4 percent 
122.8   of market value.  For purposes of this paragraph, population has 
122.9   the same meaning given in section 477A.011, subdivision 3. 
122.10     (b) Class 4b includes: 
122.11     (1) residential real estate containing less than four units 
122.12  that does not qualify as class 4bb, other than seasonal 
122.13  residential, and recreational; 
122.14     (2) manufactured homes not classified under any other 
122.15  provision; 
122.16     (3) a dwelling, garage, and surrounding one acre of 
122.17  property on a nonhomestead farm classified under subdivision 23, 
122.18  paragraph (b) containing two or three units; 
122.19     (4) unimproved property that is classified residential as 
122.20  determined under subdivision 33.  
122.21     Class 4b property has a class rate of 1.7 1.65 percent of 
122.22  market value.  
122.23     (c) Class 4bb includes: 
122.24     (1) nonhomestead residential real estate containing one 
122.25  unit, other than seasonal residential, and recreational; and 
122.26     (2) a single family dwelling, garage, and surrounding one 
122.27  acre of property on a nonhomestead farm classified under 
122.28  subdivision 23, paragraph (b). 
122.29     Class 4bb has a class rate of 1.25 1.2 percent on the 
122.30  first $75,000 $76,000 of market value and a class rate of 1.7 
122.31  1.65 percent of its market value that exceeds $75,000 $76,000. 
122.32     Property that has been classified as seasonal recreational 
122.33  residential property at any time during which it has been owned 
122.34  by the current owner or spouse of the current owner does not 
122.35  qualify for class 4bb. 
122.36     (d) Class 4c property includes: 
123.1      (1) except as provided in subdivision 22, paragraph (c), 
123.2   real property devoted to temporary and seasonal residential 
123.3   occupancy for recreation purposes, including real property 
123.4   devoted to temporary and seasonal residential occupancy for 
123.5   recreation purposes and not devoted to commercial purposes for 
123.6   more than 250 days in the year preceding the year of 
123.7   assessment.  For purposes of this clause, property is devoted to 
123.8   a commercial purpose on a specific day if any portion of the 
123.9   property is used for residential occupancy, and a fee is charged 
123.10  for residential occupancy.  In order for a property to be 
123.11  classified as class 4c, seasonal recreational residential for 
123.12  commercial purposes, at least 40 percent of the annual gross 
123.13  lodging receipts related to the property must be from business 
123.14  conducted during 90 consecutive days and either (i) at least 60 
123.15  percent of all paid bookings by lodging guests during the year 
123.16  must be for periods of at least two consecutive nights; or (ii) 
123.17  at least 20 percent of the annual gross receipts must be from 
123.18  charges for rental of fish houses, boats and motors, 
123.19  snowmobiles, downhill or cross-country ski equipment, or charges 
123.20  for marina services, launch services, and guide services, or the 
123.21  sale of bait and fishing tackle.  For purposes of this 
123.22  determination, a paid booking of five or more nights shall be 
123.23  counted as two bookings.  Class 4c also includes commercial use 
123.24  real property used exclusively for recreational purposes in 
123.25  conjunction with class 4c property devoted to temporary and 
123.26  seasonal residential occupancy for recreational purposes, up to 
123.27  a total of two acres, provided the property is not devoted to 
123.28  commercial recreational use for more than 250 days in the year 
123.29  preceding the year of assessment and is located within two miles 
123.30  of the class 4c property with which it is used.  Class 4c 
123.31  property classified in this clause also includes the remainder 
123.32  of class 1c resorts provided that the entire property including 
123.33  that portion of the property classified as class 1c also meets 
123.34  the requirements for class 4c under this clause; otherwise the 
123.35  entire property is classified as class 3.  Owners of real 
123.36  property devoted to temporary and seasonal residential occupancy 
124.1   for recreation purposes and all or a portion of which was 
124.2   devoted to commercial purposes for not more than 250 days in the 
124.3   year preceding the year of assessment desiring classification as 
124.4   class 1c or 4c, must submit a declaration to the assessor 
124.5   designating the cabins or units occupied for 250 days or less in 
124.6   the year preceding the year of assessment by January 15 of the 
124.7   assessment year.  Those cabins or units and a proportionate 
124.8   share of the land on which they are located will be designated 
124.9   class 1c or 4c as otherwise provided.  The remainder of the 
124.10  cabins or units and a proportionate share of the land on which 
124.11  they are located will be designated as class 3a.  The owner of 
124.12  property desiring designation as class 1c or 4c property must 
124.13  provide guest registers or other records demonstrating that the 
124.14  units for which class 1c or 4c designation is sought were not 
124.15  occupied for more than 250 days in the year preceding the 
124.16  assessment if so requested.  The portion of a property operated 
124.17  as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 
124.18  nonresidential facility operated on a commercial basis not 
124.19  directly related to temporary and seasonal residential occupancy 
124.20  for recreation purposes shall not qualify for class 1c or 4c; 
124.21     (2) qualified property used as a golf course if: 
124.22     (i) it is open to the public on a daily fee basis.  It may 
124.23  charge membership fees or dues, but a membership fee may not be 
124.24  required in order to use the property for golfing, and its green 
124.25  fees for golfing must be comparable to green fees typically 
124.26  charged by municipal courses; and 
124.27     (ii) it meets the requirements of section 273.112, 
124.28  subdivision 3, paragraph (d). 
124.29     A structure used as a clubhouse, restaurant, or place of 
124.30  refreshment in conjunction with the golf course is classified as 
124.31  class 3a property. 
124.32     (3) real property up to a maximum of one acre of land owned 
124.33  by a nonprofit community service oriented organization; provided 
124.34  that the property is not used for a revenue-producing activity 
124.35  for more than six days in the calendar year preceding the year 
124.36  of assessment and the property is not used for residential 
125.1   purposes on either a temporary or permanent basis.  For purposes 
125.2   of this clause, a "nonprofit community service oriented 
125.3   organization" means any corporation, society, association, 
125.4   foundation, or institution organized and operated exclusively 
125.5   for charitable, religious, fraternal, civic, or educational 
125.6   purposes, and which is exempt from federal income taxation 
125.7   pursuant to section 501(c)(3), (10), or (19) of the Internal 
125.8   Revenue Code of 1986, as amended through December 31, 1990.  For 
125.9   purposes of this clause, "revenue-producing activities" shall 
125.10  include but not be limited to property or that portion of the 
125.11  property that is used as an on-sale intoxicating liquor or 3.2 
125.12  percent malt liquor establishment licensed under chapter 340A, a 
125.13  restaurant open to the public, bowling alley, a retail store, 
125.14  gambling conducted by organizations licensed under chapter 349, 
125.15  an insurance business, or office or other space leased or rented 
125.16  to a lessee who conducts a for-profit enterprise on the 
125.17  premises.  Any portion of the property which is used for 
125.18  revenue-producing activities for more than six days in the 
125.19  calendar year preceding the year of assessment shall be assessed 
125.20  as class 3a.  The use of the property for social events open 
125.21  exclusively to members and their guests for periods of less than 
125.22  24 hours, when an admission is not charged nor any revenues are 
125.23  received by the organization shall not be considered a 
125.24  revenue-producing activity; 
125.25     (4) post-secondary student housing of not more than one 
125.26  acre of land that is owned by a nonprofit corporation organized 
125.27  under chapter 317A and is used exclusively by a student 
125.28  cooperative, sorority, or fraternity for on-campus housing or 
125.29  housing located within two miles of the border of a college 
125.30  campus; 
125.31     (5) manufactured home parks as defined in section 327.14, 
125.32  subdivision 3; and 
125.33     (6) real property that is actively and exclusively devoted 
125.34  to indoor fitness, health, social, recreational, and related 
125.35  uses, is owned and operated by a not-for-profit corporation, and 
125.36  is located within the metropolitan area as defined in section 
126.1   473.121, subdivision 2. 
126.2      Class 4c property has a class rate of 1.8 1.65 percent of 
126.3   market value, except that (i) for each parcel of seasonal 
126.4   residential recreational property not used for commercial 
126.5   purposes the first $75,000 of market value has a class rate of 
126.6   1.25 percent, and the market value that exceeds $75,000 has a 
126.7   class rate of 2.2 percent has the same class rates as class 4bb 
126.8   property, (ii) manufactured home parks assessed under clause (5) 
126.9   have a the same class rate of two percent as class 4b property, 
126.10  and (iii) property described in paragraph (d), clause (4), has 
126.11  the same class rate as the rate applicable to the first tier of 
126.12  class 4bb nonhomestead residential real estate under paragraph 
126.13  (c).  
126.14     (e) Class 4d property is qualifying low-income rental 
126.15  housing certified to the assessor by the housing finance agency 
126.16  under sections 273.126 and 462A.071.  Class 4d includes land in 
126.17  proportion to the total market value of the building that is 
126.18  qualifying low-income rental housing.  For all properties 
126.19  qualifying as class 4d, the market value determined by the 
126.20  assessor must be based on the normal approach to value using 
126.21  normal unrestricted rents. 
126.22     Class 4d property has a class rate of one percent of market 
126.23  value.  
126.24     (f) Class 4e property consists of the residential portion 
126.25  of any structure located within a city that was converted from 
126.26  nonresidential use to residential use, provided that: 
126.27     (1) the structure had formerly been used as a warehouse; 
126.28     (2) the structure was originally constructed prior to 1940; 
126.29     (3) the conversion was done after December 31, 1995, but 
126.30  before January 1, 2003; and 
126.31     (4) the conversion involved an investment of at least 
126.32  $25,000 per residential unit. 
126.33     Class 4e property has a class rate of 2.3 percent, provided 
126.34  that a structure is eligible for class 4e classification only in 
126.35  the 12 assessment years immediately following the conversion. 
126.36     Sec. 20.  Minnesota Statutes 1998, section 273.13, 
127.1   subdivision 31, is amended to read: 
127.2      Subd. 31.  [CLASS 5.] Class 5 property includes:  
127.3      (1) tools, implements, and machinery of an electric 
127.4   generating, transmission, or distribution system or a pipeline 
127.5   system transporting or distributing water, gas, crude oil, or 
127.6   petroleum products or mains and pipes used in the distribution 
127.7   of steam or hot or chilled water for heating or cooling 
127.8   buildings, which are fixtures; 
127.9      (2) unmined iron ore and low-grade iron-bearing formations 
127.10  as defined in section 273.14; and 
127.11     (3) (2) all other property not otherwise classified. 
127.12     Class 5 property has a class rate of 3.5 3.4 percent of 
127.13  market value. 
127.14     Sec. 21.  Minnesota Statutes 1998, section 273.1382, is 
127.15  amended to read: 
127.16     273.1382 [EDUCATION HOMESTEAD CREDIT; EDUCATION 
127.17  AGRICULTURAL CREDIT.] 
127.18     Subdivision 1.  [EDUCATION HOMESTEAD CREDIT TAX RATE.] Each 
127.19  year, the respective county auditors shall determine the initial 
127.20  tax rate for each school district for the general education levy 
127.21  certified under section 126C.13, subdivision 2 or 3.  That rate 
127.22  plus the school district's education homestead credit tax rate 
127.23  adjustment under section 275.08, subdivision 1e, shall be the 
127.24  general education homestead credit local tax rate for the 
127.25  district.  The 
127.26     Subd. 1a.  [EDUCATION HOMESTEAD CREDIT.] Each county 
127.27  auditor shall then determine a general education homestead 
127.28  credit for each homestead within the county equal to 68 66.2 
127.29  percent for taxes payable in 1999 and 69 83 percent for taxes 
127.30  payable in 2000 and thereafter of the general education 
127.31  homestead credit local tax rate times the net tax capacity of 
127.32  the homestead for the taxes payable year.  The amount of general 
127.33  education homestead credit for a homestead may not exceed $320 
127.34  for taxes payable in 1999 and $335 $390 for taxes payable in 
127.35  2000 and thereafter.  In the case of an agricultural homestead, 
127.36  only the net tax capacity of the house, garage, and surrounding 
128.1   one acre of land shall be used in determining the property's 
128.2   education homestead credit. 
128.3      Subd. 1a.  [CREDIT PERCENTAGE REDUCTION.] If the general 
128.4   education levy target for fiscal year 2000 or 2001 is increased 
128.5   by another law enacted prior to the 1999 legislative session, 
128.6   the commissioner of revenue shall adjust the percentage rates of 
128.7   the education homestead credit for the corresponding taxes 
128.8   payable year by multiplying the percentage rate by the ratio of 
128.9   the prior general education levy target to the current general 
128.10  education levy target.  If an adjustment is made under this 
128.11  section for fiscal year 2001, the adjusted rate shall remain in 
128.12  effect for future years until amended by subsequent legislation. 
128.13     Subd. 1b.  [EDUCATION AGRICULTURAL CREDIT.] Property 
128.14  classified as class 2a agricultural homestead or class 2b 
128.15  agricultural nonhomestead or timberland is eligible for 
128.16  education agricultural credit.  The credit is equal to 54 
128.17  percent, in the case of agricultural homestead property, or 50 
128.18  percent, in the case of agricultural nonhomestead property or 
128.19  timberland, of the property's net tax capacity times the 
128.20  education credit tax rate determined in subdivision 1.  The net 
128.21  tax capacity of class 2a property attributable to the house, 
128.22  garage, and surrounding one acre of land is not eligible for the 
128.23  credit under this subdivision. 
128.24     Subd. 2.  [CREDIT REIMBURSEMENTS.] (a) The commissioner of 
128.25  revenue shall determine the tax reductions allowed under this 
128.26  section for each taxes payable year, and for each school 
128.27  district based upon a review of the abstracts of tax lists 
128.28  submitted by the county auditors under section 275.29, and from 
128.29  any other information which the commissioner deems relevant.  
128.30  The commissioner of revenue shall generally compute the tax 
128.31  reductions at the unique taxing jurisdiction level, however the 
128.32  commissioner may compute the tax reductions at a higher 
128.33  geographic level if that would have a negligible impact, or if 
128.34  changes in the composition of unique taxing jurisdictions do not 
128.35  permit computation at the unique taxing jurisdiction level.  The 
128.36  commissioner's determinations under this paragraph are not rules.
129.1      (b) The commissioner of revenue shall certify the total of 
129.2   the tax reductions granted under this section for each taxes 
129.3   payable year within each school district to the commissioner of 
129.4   children, families, and learning after July 1 and on or before 
129.5   August 1 of the taxes payable year.  The commissioner of 
129.6   children, families, and learning shall reimburse each affected 
129.7   school district for the amount of the property tax reductions 
129.8   allowed under this section as provided in section 273.1392.  The 
129.9   commissioner of children, families, and learning shall treat the 
129.10  reimbursement payments as entitlements for the same state fiscal 
129.11  year as certified, including with each district's initial 
129.12  payment all amounts that would have been paid up to that date, 
129.13  computed as if 90 percent of the annual reimbursement amount for 
129.14  the district were being paid one-twelfth in each month of the 
129.15  fiscal year.  
129.16     Subd. 3.  [APPROPRIATION.] An amount sufficient to make the 
129.17  payments required by this section is annually appropriated from 
129.18  the general fund to the commissioner of children, families, and 
129.19  learning.  
129.20     Sec. 22.  Minnesota Statutes 1998, section 273.1398, 
129.21  subdivision 1a, is amended to read: 
129.22     Subd. 1a.  [TAX BASE DIFFERENTIAL.] (a) For aids payable in 
129.23  2000, the tax base differential is: 
129.24     (1) 0.45 percent of the assessment year 1998 taxable market 
129.25  value of class 2a agricultural homestead property, excluding the 
129.26  house, garage, and surrounding one acre of land, between 
129.27  $115,000 and $600,000 and over 320 acres, minus the value over 
129.28  $600,000 that is less than 320 acres; plus 
129.29     (2) 0.5 percent of the assessment year 1998 taxable market 
129.30  value of noncommercial seasonal recreational residential 
129.31  property over $75,000 in value; plus 
129.32     (3) for purposes of computing the fiscal disparity 
129.33  adjustment only, the tax base differential is 0.2 percent of the 
129.34  assessment year 1998 taxable market value of class 3 
129.35  commercial-industrial property over $150,000. 
129.36     (b) For the purposes of the distribution of homestead and 
130.1   agricultural credit aid for aids payable in 2000, the 
130.2   commissioner of revenue shall use the best information available 
130.3   as of June 30, 1999, to make an estimate of the value described 
130.4   in paragraph (a), clause (1).  The commissioner shall adjust the 
130.5   distribution of homestead and agricultural credit aid for aids 
130.6   payable in 2001 and subsequent years if new information 
130.7   regarding the value described in paragraph (a), clause (1), 
130.8   becomes available after June 30, 1999. 
130.9      Sec. 23.  Minnesota Statutes 1998, section 273.1398, 
130.10  subdivision 8, is amended to read: 
130.11     Subd. 8.  [APPROPRIATION.] (a) An amount sufficient to pay 
130.12  the aids and credits provided under this section for school 
130.13  districts, intermediate school districts, or any group of school 
130.14  districts levying as a single taxing entity, is annually 
130.15  appropriated from the general fund to the commissioner of 
130.16  children, families, and learning.  An amount sufficient to pay 
130.17  the aids and credits provided under this section for counties, 
130.18  cities, towns, and special taxing districts is annually 
130.19  appropriated from the general fund to the commissioner of 
130.20  revenue.  A jurisdiction's aid amount may be increased or 
130.21  decreased based on any prior year adjustments for homestead 
130.22  credit or other property tax credit or aid programs. 
130.23     (b) The commissioner of finance shall bill the commissioner 
130.24  of revenue for the cost of preparation of local impact notes as 
130.25  required by section 3.987 only to the extent to which those 
130.26  costs exceed those costs incurred in fiscal year 1997 and for 
130.27  any other new costs attributable to the local impact note 
130.28  function required by section 3.987, not to exceed $100,000 in 
130.29  fiscal year years 1998 and 1999 and $200,000 in fiscal year 1999 
130.30  2000 and thereafter. 
130.31     The commissioner of revenue shall deduct the amount billed 
130.32  under this paragraph from aid payments to be made to cities and 
130.33  counties under subdivision 2 on a pro rata basis.  The amount 
130.34  deducted under this paragraph is appropriated to the 
130.35  commissioner of finance for the preparation of local impact 
130.36  notes. 
131.1      Sec. 24.  Minnesota Statutes 1998, section 273.20, is 
131.2   amended to read: 
131.3      273.20 [ASSESSOR MAY ENTER DWELLINGS, BUILDINGS, OR 
131.4   STRUCTURES.] 
131.5      Any officer authorized by law to assess property for 
131.6   taxation may, when necessary to the proper performance of 
131.7   duties, enter any dwelling-house, building, or structure, and 
131.8   view the same and the property therein.  
131.9      Any officer authorized by law to assess property for ad 
131.10  valorem tax purposes shall have reasonable access to land and 
131.11  structures as necessary for the proper performance of their 
131.12  duties.  A property owner may refuse to allow an assessor to 
131.13  inspect their property.  This refusal by the property owner must 
131.14  be either verbal or expressly stated in a letter to the county 
131.15  assessor.  If the assessor is denied access to view a property, 
131.16  the assessor is authorized to estimate the property's estimated 
131.17  market value by making assumptions believed appropriate 
131.18  concerning the property's finish and condition. 
131.19     Sec. 25.  Minnesota Statutes 1998, section 274.01, 
131.20  subdivision 1, is amended to read: 
131.21     Subdivision 1.  [ORDINARY BOARD; MEETINGS, DEADLINES, 
131.22  GRIEVANCES.] (a) The town board of a town, or the council or 
131.23  other governing body of a city, is the board of review except 
131.24  (1) in cities whose charters provide for a board of equalization 
131.25  or (2) in any city or town that has transferred its local board 
131.26  of review power and duties to the county board as provided in 
131.27  subdivision 3.  The county assessor shall fix a day and time 
131.28  when the board or the board of equalization shall meet in the 
131.29  assessment districts of the county.  On or before February 15 of 
131.30  each year the assessor shall give written notice of the time to 
131.31  the city or town clerk.  Notwithstanding the provisions of any 
131.32  charter to the contrary, the meetings must be held between April 
131.33  1 and May 31 each year.  The clerk shall give published and 
131.34  posted notice of the meeting at least ten days before the date 
131.35  of the meeting.  
131.36     If in any county, at least 25 percent of the total net tax 
132.1   capacity of a city or town is noncommercial seasonal residential 
132.2   recreational property classified under section 273.13, 
132.3   subdivision 25, the county must hold two countywide 
132.4   informational meetings on Saturdays.  The meetings will allow 
132.5   noncommercial seasonal residential recreational taxpayers to 
132.6   discuss their property valuation with the appropriate assessment 
132.7   staff.  These Saturday informational meetings must be scheduled 
132.8   to allow the owner of the noncommercial seasonal residential 
132.9   recreational property the opportunity to attend one of the 
132.10  meetings prior to the scheduled board of review for their city 
132.11  or town.  The Saturday meeting dates must be contained on the 
132.12  notice of valuation of real property under section 273.121.  
132.13     The board shall meet at the office of the clerk to review 
132.14  the assessment and classification of property in the town or 
132.15  city.  No changes in valuation or classification which are 
132.16  intended to correct errors in judgment by the county assessor 
132.17  may be made by the county assessor after the board of review has 
132.18  adjourned in those cities or towns that hold a local board of 
132.19  review; however, corrections of errors that are merely clerical 
132.20  in nature or changes that extend homestead treatment to property 
132.21  are permitted after adjournment until the tax extension date for 
132.22  that assessment year.  The changes must be fully documented and 
132.23  maintained in the assessor's office and must be available for 
132.24  review by any person.  A copy of the changes made during this 
132.25  period in those cities or towns that hold a local board of 
132.26  review must be sent to the county board no later than December 
132.27  31 of the assessment year.  
132.28     (b) The board shall determine whether the taxable property 
132.29  in the town or city has been properly placed on the list and 
132.30  properly valued by the assessor.  If real or personal property 
132.31  has been omitted, the board shall place it on the list with its 
132.32  market value, and correct the assessment so that each tract or 
132.33  lot of real property, and each article, parcel, or class of 
132.34  personal property, is entered on the assessment list at its 
132.35  market value.  No assessment of the property of any person may 
132.36  be raised unless the person has been duly notified of the intent 
133.1   of the board to do so.  On application of any person feeling 
133.2   aggrieved, the board shall review the assessment or 
133.3   classification, or both, and correct it as appears just.  The 
133.4   board may not make an individual market value adjustment or 
133.5   classification change that would benefit the property in cases 
133.6   where the owner or other person having control over the property 
133.7   will not permit the assessor to inspect the property and the 
133.8   interior of any buildings or structures.  
133.9      (c) A local board of review may reduce assessments upon 
133.10  petition of the taxpayer but the total reductions must not 
133.11  reduce the aggregate assessment made by the county assessor by 
133.12  more than one percent.  If the total reductions would lower the 
133.13  aggregate assessments made by the county assessor by more than 
133.14  one percent, none of the adjustments may be made.  The assessor 
133.15  shall correct any clerical errors or double assessments 
133.16  discovered by the board of review without regard to the one 
133.17  percent limitation.  
133.18     (d) A majority of the members may act at the meeting, and 
133.19  adjourn from day to day until they finish hearing the cases 
133.20  presented.  The assessor shall attend, with the assessment books 
133.21  and papers, and take part in the proceedings, but must not 
133.22  vote.  The county assessor, or an assistant delegated by the 
133.23  county assessor shall attend the meetings.  The board shall list 
133.24  separately, on a form appended to the assessment book, all 
133.25  omitted property added to the list by the board and all items of 
133.26  property increased or decreased, with the market value of each 
133.27  item of property, added or changed by the board, placed opposite 
133.28  the item.  The county assessor shall enter all changes made by 
133.29  the board in the assessment book.  
133.30     (e) Except as provided in subdivision 3, if a person fails 
133.31  to appear in person, by counsel, or by written communication 
133.32  before the board after being duly notified of the board's intent 
133.33  to raise the assessment of the property, or if a person feeling 
133.34  aggrieved by an assessment or classification fails to apply for 
133.35  a review of the assessment or classification, the person may not 
133.36  appear before the county board of equalization for a review of 
134.1   the assessment or classification.  This paragraph does not apply 
134.2   if an assessment was made after the board meeting, as provided 
134.3   in section 273.01, or if the person can establish not having 
134.4   received notice of market value at least five days before the 
134.5   local board of review meeting.  
134.6      (f) The board of review or the board of equalization must 
134.7   complete its work and adjourn within 20 days from the time of 
134.8   convening stated in the notice of the clerk, unless a longer 
134.9   period is approved by the commissioner of revenue.  No action 
134.10  taken after that date is valid.  All complaints about an 
134.11  assessment or classification made after the meeting of the board 
134.12  must be heard and determined by the county board of 
134.13  equalization.  A nonresident may, at any time, before the 
134.14  meeting of the board of review file written objections to an 
134.15  assessment or classification with the county assessor.  The 
134.16  objections must be presented to the board of review at its 
134.17  meeting by the county assessor for its consideration. 
134.18     Sec. 26.  Minnesota Statutes 1998, section 276.131, is 
134.19  amended to read: 
134.20     276.131 [DISTRIBUTION OF PENALTIES, INTEREST, AND COSTS.] 
134.21     The penalties, interest, and costs collected on special 
134.22  assessments and real and personal property taxes must be 
134.23  distributed as follows: 
134.24     (1) all penalties and interest collected on special 
134.25  assessments against real or personal property must be 
134.26  distributed to the taxing jurisdiction that levied the 
134.27  assessment; 
134.28     (2) 50 percent of all penalties and interest collected on 
134.29  real and personal property taxes must be distributed to the 
134.30  county in which the property is located school districts within 
134.31  the county, and the other remaining 50 percent must be 
134.32  distributed to the school districts within the county.  The 
134.33  distribution to the school district must be in accordance with 
134.34  the provisions of section 127A.34; and 
134.35     (3) in the case of interest on taxes that have been 
134.36  delinquent for a period of one year or less, (a) 50 percent of 
135.1   the interest must be distributed to the school districts within 
135.2   the county and (b) the remaining 50 percent shall be distributed 
135.3   to the county; 
135.4      (4) in the case of interest on taxes that have been 
135.5   delinquent for a period of more than one year, (a) 50 percent of 
135.6   the interest must be distributed to the school districts within 
135.7   the county and (b) the remaining 50 percent must be distributed 
135.8   as follows:  (i) the city or town where the property is located 
135.9   shall receive a share of the amount of interest equal to the 
135.10  proportion that the city's or town's local tax rate for the year 
135.11  that the interest was collected, is to the sum of the city's or 
135.12  town's local tax rate and the county's local tax rate for the 
135.13  year that the interest was collected and (ii) the balance must 
135.14  be distributed to the county; and 
135.15     (5) all costs collected by the county on special 
135.16  assessments and on delinquent real and personal property taxes 
135.17  must be distributed to the county in which the property is 
135.18  located.  
135.19     The distribution of all penalties and interest to the 
135.20  school district must be in accordance with the provisions of 
135.21  section 127A.34. 
135.22     Sec. 27.  Minnesota Statutes 1998, section 290A.03, 
135.23  subdivision 6, is amended to read: 
135.24     Subd. 6.  [HOMESTEAD.] "Homestead" means the dwelling 
135.25  occupied as the claimant's principal residence and so much of 
135.26  the land surrounding it, not exceeding ten acres, as is 
135.27  reasonably necessary for use of the dwelling as a home and any 
135.28  other property used for purposes of a homestead as defined in 
135.29  section 273.13, subdivision 22, except for agricultural land 
135.30  assessed as part of a homestead pursuant to section 273.13, 
135.31  subdivision 23, "homestead" is limited to 320 acres the first 
135.32  $600,000 of market value or, where the farm homestead is rented, 
135.33  one acre.  The homestead may be owned or rented and may be a 
135.34  part of a multidwelling or multipurpose building and the land on 
135.35  which it is built.  A manufactured home, as defined in section 
135.36  273.125, subdivision 8, or a park trailer taxed as a 
136.1   manufactured home under section 168.012, subdivision 9, assessed 
136.2   as personal property may be a dwelling for purposes of this 
136.3   subdivision. 
136.4      Sec. 28.  Minnesota Statutes 1998, section 290B.03, 
136.5   subdivision 1, is amended to read: 
136.6      Subdivision 1.  [PROGRAM QUALIFICATIONS.] The 
136.7   qualifications for the senior citizens' property tax deferral 
136.8   program are as follows: 
136.9      (1) the property must be owned and occupied as a homestead 
136.10  by a person 65 years of age or older.  In the case of a married 
136.11  couple, both of the spouses must be at least 65 years old at the 
136.12  time the first property tax deferral is granted, regardless of 
136.13  whether the property is titled in the name of one spouse or both 
136.14  spouses, or titled in another way that permits the property to 
136.15  have homestead status; 
136.16     (2) the total household income of the qualifying 
136.17  homeowners, as defined in section 290A.03, subdivision 5, for 
136.18  the calendar year preceding the year of the initial application 
136.19  may not exceed $30,000 $60,000; 
136.20     (3) the homestead must have been owned and occupied as the 
136.21  homestead of at least one of the qualifying homeowners for at 
136.22  least 15 years prior to the year the initial application is 
136.23  filed; 
136.24     (4) there are no delinquent property taxes, penalties, or 
136.25  interest on the homesteaded property; 
136.26     (5) there are no delinquent special assessments on the 
136.27  homesteaded property; 
136.28     (6) there are no state or federal tax liens or judgment 
136.29  liens on the homesteaded property; 
136.30     (7) there are no mortgages or other liens on the property 
136.31  that secure future advances, except for those subject to credit 
136.32  limits that result in compliance with clause (8); and 
136.33     (8) the total unpaid balances of debts secured by mortgages 
136.34  and other liens on the property, including unpaid special 
136.35  assessments, but not including property taxes payable during the 
136.36  year, does not exceed 30 percent of the assessor's estimated 
137.1   market value for the year. 
137.2      Sec. 29.  Minnesota Statutes 1998, section 290B.04, 
137.3   subdivision 2, is amended to read: 
137.4      Subd. 2.  [APPROVAL; RECORDING.] The commissioner shall 
137.5   approve all initial applications that qualify under this chapter 
137.6   and shall notify qualifying homeowners on or before December 1.  
137.7   The commissioner may investigate the facts or require 
137.8   confirmation in regard to an application.  The commissioner 
137.9   shall record or file a notice of qualification for deferral, 
137.10  including the names of the qualifying homeowners and a legal 
137.11  description of the property, in the office of the county 
137.12  recorder, or registrar of titles, whichever is applicable, in 
137.13  the county where the qualifying property is located.  The notice 
137.14  must state that it serves as a notice of lien and that it 
137.15  includes deferrals under this section for future years.  The 
137.16  homeowner shall pay the recording or filing fees for the notice, 
137.17  which, notwithstanding section 357.18, shall be paid by the 
137.18  homeowner at the time of satisfaction of the lien. 
137.19     Sec. 30.  Minnesota Statutes 1998, section 290B.04, 
137.20  subdivision 3, is amended to read: 
137.21     Subd. 3.  [EXCESS-INCOME CERTIFICATION BY TAXPAYER.] A 
137.22  taxpayer whose initial application has been approved under 
137.23  subdivision 2 shall notify the commissioner of revenue in 
137.24  writing by July 1 if the taxpayer's household income for the 
137.25  preceding calendar year exceeded $30,000 $60,000.  The 
137.26  certification must state the homeowner's total household income 
137.27  for the previous calendar year.  No property taxes may be 
137.28  deferred under this chapter in any year following the year in 
137.29  which a program participant filed or should have filed an 
137.30  excess-income certification under this subdivision, unless the 
137.31  participant has filed a resumption of eligibility certification 
137.32  as described in subdivision 4. 
137.33     Sec. 31.  Minnesota Statutes 1998, section 290B.04, 
137.34  subdivision 4, is amended to read: 
137.35     Subd. 4.  [RESUMPTION OF ELIGIBILITY CERTIFICATION BY 
137.36  TAXPAYER.] A taxpayer who has previously filed an excess-income 
138.1   certification under subdivision 3 may resume program 
138.2   participation if the taxpayer's household income for a 
138.3   subsequent year is $30,000 $60,000 or less.  If the taxpayer 
138.4   chooses to resume program participation, the taxpayer must 
138.5   notify the commissioner of revenue in writing by July 1 of the 
138.6   year following a calendar year in which the taxpayer's household 
138.7   income is $30,000 $60,000 or less.  The certification must state 
138.8   the taxpayer's total household income for the previous calendar 
138.9   year.  Once a taxpayer resumes participation in the program 
138.10  under this subdivision, participation will continue until the 
138.11  taxpayer files a subsequent excess-income certification under 
138.12  subdivision 3 or until participation is terminated under section 
138.13  290B.08, subdivision 1. 
138.14     Sec. 32.  Minnesota Statutes 1998, section 290B.05, 
138.15  subdivision 1, is amended to read: 
138.16     Subdivision 1.  [DETERMINATION BY COMMISSIONER.] The 
138.17  commissioner shall determine each qualifying homeowner's "annual 
138.18  maximum property tax amount" following approval of the 
138.19  homeowner's initial application and following the receipt of a 
138.20  resumption of eligibility certification.  The "annual maximum 
138.21  property tax amount" equals five three percent of the 
138.22  homeowner's total household income for the year preceding either 
138.23  the initial application or the resumption of eligibility 
138.24  certification, whichever is applicable.  Following approval of 
138.25  the initial application, the commissioner shall determine the 
138.26  qualifying homeowner's "maximum allowable deferral."  No tax may 
138.27  be deferred relative to the appropriate assessment year for any 
138.28  homeowner whose total household income for the previous year 
138.29  exceeds $30,000 $60,000.  No tax shall be deferred in any year 
138.30  in which the homeowner does not meet the program qualifications 
138.31  in section 290B.03.  The maximum allowable total deferral is 
138.32  equal to 75 percent of the assessor's estimated market value for 
138.33  the year, less the balance of any mortgage loans and other 
138.34  amounts secured by liens against the property at the time of 
138.35  application, including any unpaid special assessments but not 
138.36  including property taxes payable during the year. 
139.1      Sec. 33.  Minnesota Statutes 1998, section 298.22, 
139.2   subdivision 7, is amended to read: 
139.3      Subd. 7.  [GIANTS RIDGE RECREATION AREA.] (a) In addition 
139.4   to the other powers granted in this section and other law, the 
139.5   commissioner, for purposes of fostering economic development and 
139.6   tourism within the Giants Ridge recreation area, may spend any 
139.7   money made available to the agency under section 298.28 to 
139.8   acquire real or personal property or interests therein by gift, 
139.9   purchase, or lease and may convey by lease, sale, or other means 
139.10  of conveyance or commitment any or all of those property 
139.11  interests acquired.  
139.12     (b) Notwithstanding any other law to the contrary, property 
139.13  conveyed under this subdivision and used for residential 
139.14  purposes is not eligible for property tax homestead 
139.15  classification under section 273.124 or for a property tax 
139.16  refund under chapter 290A. 
139.17     (c) In furtherance of development of the Giants Ridge 
139.18  recreation area, the commissioner may establish and participate 
139.19  in charitable foundations and nonprofit corporations, including 
139.20  a corporation within the meaning of section 317A.011, 
139.21  subdivision 6. 
139.22     (d) (c) The term "Giants Ridge recreation area" refers to 
139.23  an economic development project area established by the 
139.24  commissioner in furtherance of the powers delegated in this 
139.25  section within St. Louis county in the western portions of the 
139.26  town of White and in the eastern portion of the westerly, 
139.27  adjacent, unorganized township. 
139.28     Sec. 34.  Minnesota Statutes 1998, section 373.40, 
139.29  subdivision 1, is amended to read: 
139.30     Subdivision 1.  [DEFINITIONS.] For purposes of this 
139.31  section, the following terms have the meanings given. 
139.32     (a) "Bonds" means an obligation as defined under section 
139.33  475.51. 
139.34     (b) "Capital improvement" means acquisition or betterment 
139.35  of public lands, development rights in the form of conservation 
139.36  easements under chapter 84C, buildings, or other improvements 
140.1   within the county for the purpose of a county courthouse, 
140.2   administrative building, health or social service facility, 
140.3   correctional facility, jail, law enforcement center, hospital, 
140.4   morgue, library, park, qualified indoor ice arena, and roads and 
140.5   bridges.  An improvement must have an expected useful life of 
140.6   five years or more to qualify. "Capital improvement" does not 
140.7   include light rail transit or any activity related to it or a 
140.8   recreation or sports facility building (such as, but not limited 
140.9   to, a gymnasium, ice arena, racquet sports facility, swimming 
140.10  pool, exercise room or health spa), unless the building is part 
140.11  of an outdoor park facility and is incidental to the primary 
140.12  purpose of outdoor recreation. 
140.13     (c) "Commissioner" means the commissioner of trade and 
140.14  economic development. 
140.15     (d) "Metropolitan county" means a county located in the 
140.16  seven-county metropolitan area as defined in section 473.121 or 
140.17  a county with a population of 90,000 or more. 
140.18     (e) "Population" means the population established by the 
140.19  most recent of the following (determined as of the date the 
140.20  resolution authorizing the bonds was adopted): 
140.21     (1) the federal decennial census, 
140.22     (2) a special census conducted under contract by the United 
140.23  States Bureau of the Census, or 
140.24     (3) a population estimate made either by the metropolitan 
140.25  council or by the state demographer under section 4A.02. 
140.26     (f) "Qualified indoor ice arena" means a facility that 
140.27  meets the requirements of section 373.43. 
140.28     (g) "Tax capacity" means total taxable market value, but 
140.29  does not include captured market value. 
140.30     Sec. 35.  Minnesota Statutes 1998, section 375.18, 
140.31  subdivision 12, is amended to read: 
140.32     Subd. 12.  [LAND FOR PUBLIC USE.] Each county board may 
140.33  acquire by gift or purchase and improve land within the county, 
140.34  for use as a park, site for a building, or other public purpose, 
140.35  and, when required by the public interest, sell and convey it.  
140.36  The land may be paid for out of moneys in the county treasury 
141.1   not otherwise appropriated, or by issuing bonds of the 
141.2   county.  The county board may acquire development rights in the 
141.3   form of a conservation easement under chapter 84C.  The holder 
141.4   of the conservation easement may be determined by a governmental 
141.5   body. 
141.6      Sec. 36.  Minnesota Statutes 1998, section 462A.071, 
141.7   subdivision 2, is amended to read: 
141.8      Subd. 2.  [APPLICATION.] (a) In order to qualify for 
141.9   certification under subdivision 1, the owner or manager of the 
141.10  property must annually apply to the agency.  The application 
141.11  must be in the form prescribed by the agency, contain the 
141.12  information required by the agency, and be submitted by the date 
141.13  and time specified by the agency.  Beginning in calendar year 
141.14  2000, the agency shall adopt procedures and deadlines for making 
141.15  application to permit certification of the units qualifying to 
141.16  the assessor by no later than April 1 of the assessment year.  
141.17     (b) Each application must include: 
141.18     (1) the property tax identification number; 
141.19     (2) the number, type, and size of units the applicant seeks 
141.20  to qualify as low-income housing under class 4d; 
141.21     (3) the number, type, and size of units in the property for 
141.22  which the applicant is not seeking qualification, if any; 
141.23     (4) a certification that the property has been inspected by 
141.24  a qualified inspector within the past three years and meets the 
141.25  minimum housing quality standards or is exempt from the 
141.26  inspection requirement under subdivision 4; 
141.27     (5) a statement indicating the qualifying units in 
141.28  compliance with the income limits; 
141.29     (6) an executed agreement to restrict rents meeting the 
141.30  requirements specified by the agency or executed leases for the 
141.31  units for which qualification as low-income housing as class 4d 
141.32  under section 273.13 is sought and the rent schedule; and 
141.33     (7) any additional information the agency deems appropriate 
141.34  to require. 
141.35     (c) The applicant must pay a per-unit application fee to be 
141.36  set by the agency.  The application fee charged by the agency 
142.1   must approximately equal the costs of processing and reviewing 
142.2   the applications.  The fee must be deposited in the housing 
142.3   development fund. 
142.4      Sec. 37.  Minnesota Statutes 1998, section 469.002, 
142.5   subdivision 10, is amended to read: 
142.6      Subd. 10.  [FEDERAL LEGISLATION.] "Federal legislation" 
142.7   includes the United States Housing Act of 1937, United States 
142.8   Code, title 42, sections 1401 to 1440, as amended through 
142.9   December 31, 1989 1998; the National Housing Act, United States 
142.10  Code, title 12, sections 1701 to 1750g, as amended through 
142.11  December 31, 1989; and any other legislation of the Congress of 
142.12  the United States relating to federal assistance for clearance 
142.13  or rehabilitation of substandard or blighted areas, land 
142.14  assembly, redevelopment projects, or housing. 
142.15     Sec. 38.  Minnesota Statutes 1998, section 469.012, 
142.16  subdivision 1, is amended to read: 
142.17     Subdivision 1.  [SCHEDULE OF POWERS.] An authority shall be 
142.18  a public body corporate and politic and shall have all the 
142.19  powers necessary or convenient to carry out the purposes of 
142.20  sections 469.001 to 469.047, except that the power to levy and 
142.21  collect taxes or special assessments is limited to the power 
142.22  provided in sections 469.027 to 469.033.  Its powers include the 
142.23  following powers in addition to others granted in sections 
142.24  469.001 to 469.047:  
142.25     (1) to sue and be sued; to have a seal, which shall be 
142.26  judicially noticed, and to alter it; to have perpetual 
142.27  succession; and to make, amend, and repeal rules consistent with 
142.28  sections 469.001 to 469.047; 
142.29     (2) to employ an executive director, technical experts, and 
142.30  officers, agents, and employees, permanent and temporary, that 
142.31  it requires, and determine their qualifications, duties, and 
142.32  compensation; for legal services it requires, to call upon the 
142.33  chief law officer of the city or to employ its own counsel and 
142.34  legal staff; so far as practicable, to use the services of local 
142.35  public bodies in its area of operation, provided that those 
142.36  local public bodies, if requested, shall make the services 
143.1   available; 
143.2      (3) to delegate to one or more of its agents or employees 
143.3   the powers or duties it deems proper; 
143.4      (4) within its area of operation, to undertake, prepare, 
143.5   carry out, and operate projects and to provide for the 
143.6   construction, reconstruction, improvement, extension, 
143.7   alteration, or repair of any project or part thereof; 
143.8      (5) subject to the provisions of section 469.026, to give, 
143.9   sell, transfer, convey, or otherwise dispose of real or personal 
143.10  property or any interest therein and to execute leases, deeds, 
143.11  conveyances, negotiable instruments, purchase agreements, and 
143.12  other contracts or instruments, and take action that is 
143.13  necessary or convenient to carry out the purposes of these 
143.14  sections; 
143.15     (6) within its area of operation, to acquire real or 
143.16  personal property or any interest therein by gifts, grant, 
143.17  purchase, exchange, lease, transfer, bequest, devise, or 
143.18  otherwise, and by the exercise of the power of eminent domain, 
143.19  in the manner provided by chapter 117, to acquire real property 
143.20  which it may deem necessary for its purposes, after the adoption 
143.21  by it of a resolution declaring that the acquisition of the real 
143.22  property is necessary to eliminate one or more of the conditions 
143.23  found to exist in the resolution adopted pursuant to section 
143.24  469.003 or to provide decent, safe, and sanitary housing for 
143.25  persons of low and moderate income, or is necessary to carry out 
143.26  a redevelopment project.  Real property needed or convenient for 
143.27  a project may be acquired by the authority for the project by 
143.28  condemnation pursuant to this section.  This includes any 
143.29  property devoted to a public use, whether or not held in trust, 
143.30  notwithstanding that the property may have been previously 
143.31  acquired by condemnation or is owned by a public utility 
143.32  corporation, because the public use in conformity with the 
143.33  provisions of sections 469.001 to 469.047 shall be deemed a 
143.34  superior public use.  Property devoted to a public use may be so 
143.35  acquired only if the governing body of the municipality has 
143.36  approved its acquisition by the authority.  An award of 
144.1   compensation shall not be increased by reason of any increase in 
144.2   the value of the real property caused by the assembly, clearance 
144.3   or reconstruction, or proposed assembly, clearance or 
144.4   reconstruction for the purposes of sections 469.001 to 469.047 
144.5   of the real property in an area; 
144.6      (7) within its area of operation, and without the adoption 
144.7   of an urban renewal plan, to acquire, by all means as set forth 
144.8   in clause (6) but without the adoption of a resolution provided 
144.9   for in clause (6), real property, and to demolish, remove, 
144.10  rehabilitate, or reconstruct the buildings and improvements or 
144.11  construct new buildings and improvements thereon, or to so 
144.12  provide through other means as set forth in Laws 1974, chapter 
144.13  228, or to grade, fill, and construct foundations or otherwise 
144.14  prepare the site for improvements.  The authority may dispose of 
144.15  the property pursuant to section 469.029, provided that the 
144.16  provisions of section 469.029 requiring conformance to an urban 
144.17  renewal plan shall not apply.  The authority may finance these 
144.18  activities by means of the redevelopment project fund or by 
144.19  means of tax increments or tax increment bonds or by the methods 
144.20  of financing provided for in section 469.033 or by means of 
144.21  contributions from the municipality provided for in section 
144.22  469.041, clause (9), or by any combination of those means.  Real 
144.23  property with buildings or improvements thereon shall only be 
144.24  acquired under this clause when the buildings or improvements 
144.25  are substandard.  The exercise of the power of eminent domain 
144.26  under this clause shall be limited to real property which 
144.27  contains, or has contained within the three years immediately 
144.28  preceding the exercise of the power of eminent domain and is 
144.29  currently vacant, buildings and improvements which are vacated 
144.30  and substandard.  Notwithstanding the prior sentence, in cities 
144.31  of the first class the exercise of the power of eminent domain 
144.32  under this clause shall be limited to real property which 
144.33  contains, or has contained within the three years immediately 
144.34  preceding the exercise of the power of eminent domain, buildings 
144.35  and improvements which are substandard.  For the purpose of this 
144.36  clause, substandard buildings or improvements mean hazardous 
145.1   buildings as defined in section 463.15, subdivision 3, or 
145.2   buildings or improvements that are dilapidated or obsolescent, 
145.3   faultily designed, lack adequate ventilation, light, or sanitary 
145.4   facilities, or any combination of these or other factors that 
145.5   are detrimental to the safety or health of the community; 
145.6      (8) within its area of operation, to determine the level of 
145.7   income constituting low or moderate family income.  The 
145.8   authority may establish various income levels for various family 
145.9   sizes.  In making its determination, the authority may consider 
145.10  income levels that may be established by the Department of 
145.11  Housing and Urban Development or a similar or successor federal 
145.12  agency for the purpose of federal loan guarantees or subsidies 
145.13  for persons of low or moderate income.  The authority may use 
145.14  that determination as a basis for the maximum amount of income 
145.15  for admissions to housing development projects or housing 
145.16  projects owned or operated by it; 
145.17     (9) to provide in federally assisted projects any 
145.18  relocation payments and assistance necessary to comply with the 
145.19  requirements of the Federal Uniform Relocation Assistance and 
145.20  Real Property Acquisition Policies Act of 1970, and any 
145.21  amendments or supplements thereto; 
145.22     (10) to make an agreement with the governing body or bodies 
145.23  creating the authority which provides exemption from all ad 
145.24  valorem real and personal property taxes levied or imposed by 
145.25  the body or bodies creating the authority.  In the case of 
145.26  low-rent public housing that received financial assistance under 
145.27  the United States Housing Act of 1937, or successor federal 
145.28  legislation, an authority may make an agreement with the 
145.29  governing body or bodies creating the authority to provide 
145.30  exemption from all real and personal property taxes levied or 
145.31  imposed by the state, city, county, or other political 
145.32  subdivision, for which the authority shall make payments in lieu 
145.33  of taxes to the state, city, county, or other political 
145.34  subdivisions as provided in section 469.040.  The governing body 
145.35  shall agree on behalf of all the applicable governing bodies 
145.36  affected that local cooperation as required by the federal 
146.1   government shall be provided by the local governing body or 
146.2   bodies in whose jurisdiction the project is to be located, at no 
146.3   cost or at no greater cost than the same public services and 
146.4   facilities furnished to other residents; 
146.5      (11) to cooperate with or act as agent for the federal 
146.6   government, the state or any state public body, or any agency or 
146.7   instrumentality of the foregoing, in carrying out any of the 
146.8   provisions of sections 469.001 to 469.047 or of any other 
146.9   related federal, state, or local legislation; and upon the 
146.10  consent of the governing body of the city to purchase, lease, 
146.11  manage, or otherwise take over any housing project already owned 
146.12  and operated by the federal government; 
146.13     (12) to make plans for carrying out a program of voluntary 
146.14  repair and rehabilitation of buildings and improvements, and 
146.15  plans for the enforcement of laws, codes, and regulations 
146.16  relating to the use of land and the use and occupancy of 
146.17  buildings and improvements, and to the compulsory repair, 
146.18  rehabilitation, demolition, or removal of buildings and 
146.19  improvements.  The authority may develop, test, and report 
146.20  methods and techniques, and carry out demonstrations and other 
146.21  activities for the prevention and elimination of slums and 
146.22  blight; 
146.23     (13) to borrow money or other property and accept 
146.24  contributions, grants, gifts, services, or other assistance from 
146.25  the federal government, the state government, state public 
146.26  bodies, or from any other public or private sources; 
146.27     (14) to include in any contract for financial assistance 
146.28  with the federal government any conditions that the federal 
146.29  government may attach to its financial aid of a project, not 
146.30  inconsistent with purposes of sections 469.001 to 469.047, 
146.31  including obligating itself (which obligation shall be 
146.32  specifically enforceable and not constitute a mortgage, 
146.33  notwithstanding any other laws) to convey to the federal 
146.34  government the project to which the contract relates upon the 
146.35  occurrence of a substantial default with respect to the 
146.36  covenants or conditions to which the authority is subject; to 
147.1   provide in the contract that, in case of such conveyance, the 
147.2   federal government may complete, operate, manage, lease, convey, 
147.3   or otherwise deal with the project until the defaults are cured 
147.4   if the federal government agrees in the contract to reconvey to 
147.5   the authority the project as then constituted when the defaults 
147.6   have been cured; 
147.7      (15) to issue bonds for any of its corporate purposes and 
147.8   to secure the bonds by mortgages upon property held or to be 
147.9   held by it or by pledge of its revenues, including grants or 
147.10  contributions; 
147.11     (16) to invest any funds held in reserves or sinking funds, 
147.12  or any funds not required for immediate disbursement, in 
147.13  property or securities in which savings banks may legally invest 
147.14  funds subject to their control or in the manner and subject to 
147.15  the conditions provided in section 118A.04 for the deposit and 
147.16  investment of public funds; 
147.17     (17) within its area of operation, to determine where 
147.18  blight exists or where there is unsafe, unsanitary, or 
147.19  overcrowded housing; 
147.20     (18) to carry out studies of the housing and redevelopment 
147.21  needs within its area of operation and of the meeting of those 
147.22  needs.  This includes study of data on population and family 
147.23  groups and their distribution according to income groups, the 
147.24  amount and quality of available housing and its distribution 
147.25  according to rentals and sales prices, employment, wages, 
147.26  desirable patterns for land use and community growth, and other 
147.27  factors affecting the local housing and redevelopment needs and 
147.28  the meeting of those needs; to make the results of those studies 
147.29  and analyses available to the public and to building, housing, 
147.30  and supply industries; 
147.31     (19) if a local public body does not have a planning agency 
147.32  or the planning agency has not produced a comprehensive or 
147.33  general community development plan, to make or cause to be made 
147.34  a plan to be used as a guide in the more detailed planning of 
147.35  housing and redevelopment areas; 
147.36     (20) to lease or rent any dwellings, accommodations, lands, 
148.1   buildings, structures, or facilities included in any project 
148.2   and, subject to the limitations contained in sections 469.001 to 
148.3   469.047 with respect to the rental of dwellings in housing 
148.4   projects, to establish and revise the rents or charges therefor; 
148.5      (21) to own, hold, and improve real or personal property 
148.6   and to sell, lease, exchange, transfer, assign, pledge, or 
148.7   dispose of any real or personal property or any interest 
148.8   therein; 
148.9      (22) to insure or provide for the insurance of any real or 
148.10  personal property or operations of the authority against any 
148.11  risks or hazards; 
148.12     (23) to procure or agree to the procurement of government 
148.13  insurance or guarantees of the payment of any bonds or parts 
148.14  thereof issued by an authority and to pay premiums on the 
148.15  insurance; 
148.16     (24) to make expenditures necessary to carry out the 
148.17  purposes of sections 469.001 to 469.047; 
148.18     (25) to enter into an agreement or agreements with any 
148.19  state public body to provide informational service and 
148.20  relocation assistance to families, individuals, business 
148.21  concerns, and nonprofit organizations displaced or to be 
148.22  displaced by the activities of any state public body; 
148.23     (26) to compile and maintain a catalog of all vacant, open 
148.24  and undeveloped land, or land which contains substandard 
148.25  buildings and improvements as that term is defined in clause 
148.26  (7), that is owned or controlled by the authority or by the 
148.27  governing body within its area of operation and to compile and 
148.28  maintain a catalog of all authority owned real property that is 
148.29  in excess of the foreseeable needs of the authority, in order to 
148.30  determine and recommend if the real property compiled in either 
148.31  catalog is appropriate for disposal pursuant to the provisions 
148.32  of section 469.029, subdivisions 9 and 10; 
148.33     (27) to recommend to the city concerning the enforcement of 
148.34  the applicable health, housing, building, fire prevention, and 
148.35  housing maintenance code requirements as they relate to 
148.36  residential dwelling structures that are being rehabilitated by 
149.1   low- or moderate-income persons pursuant to section 469.029, 
149.2   subdivision 9, for the period of time necessary to complete the 
149.3   rehabilitation, as determined by the authority; 
149.4      (28) to recommend to the city the initiation of municipal 
149.5   powers, against certain real properties, relating to repair, 
149.6   closing, condemnation, or demolition of unsafe, unsanitary, 
149.7   hazardous, and unfit buildings, as provided in section 469.041, 
149.8   clause (5); 
149.9      (29) to sell, at private or public sale, at the price or 
149.10  prices determined by the authority, any note, mortgage, lease, 
149.11  sublease, lease purchase, or other instrument or obligation 
149.12  evidencing or securing a loan made for the purpose of economic 
149.13  development, job creation, redevelopment, or community 
149.14  revitalization by a public agency to a business, for-profit or 
149.15  nonprofit organization, or an individual; 
149.16     (30) within its area of operation, to acquire and sell real 
149.17  property that is benefited by federal housing assistance 
149.18  payments, other rental subsidies, interest reduction payments, 
149.19  or interest reduction contracts for the purpose of preserving 
149.20  the affordability of low- and moderate-income multifamily 
149.21  housing; 
149.22     (31) to apply for, enter into contracts with the federal 
149.23  government, administer, and carry out a section 8 program.  
149.24  Authorization by the governing body creating the authority to 
149.25  administer the program at the authority's initial application is 
149.26  sufficient to authorize operation of the program in its area of 
149.27  operation for which it was created without additional local 
149.28  governing body approval.  Approval by the governing body or 
149.29  bodies creating the authority constitutes approval of a housing 
149.30  program for purposes of any special or general law requiring 
149.31  local approval of section 8 programs undertaken by city, county, 
149.32  or multicounty authorities; and 
149.33     (32) to secure a mortgage or loan for a rental housing 
149.34  project by obtaining the appointment of receivers or assignments 
149.35  of rents and profits under sections 559.17 and 576.01, except 
149.36  that the limitation relating to the minimum amounts of the 
150.1   original principal balances of mortgages specified in sections 
150.2   559.17, subdivision 2, clause (2); and 576.01, subdivision 2, 
150.3   does not apply. 
150.4      Sec. 39.  Minnesota Statutes 1998, section 475.52, 
150.5   subdivision 1, is amended to read: 
150.6      Subdivision 1.  [STATUTORY CITIES.] Any statutory city may 
150.7   issue bonds or other obligations for the acquisition or 
150.8   betterment of public buildings, means of garbage disposal, 
150.9   hospitals, nursing homes, homes for the aged, schools, 
150.10  libraries, museums, art galleries, parks, playgrounds, stadia, 
150.11  sewers, sewage disposal plants, subways, streets, sidewalks, 
150.12  warning systems; for any utility or other public convenience 
150.13  from which a revenue is or may be derived; for a permanent 
150.14  improvement revolving fund; for changing, controlling or 
150.15  bridging streams and other waterways; for the acquisition and 
150.16  betterment of bridges and roads within two miles of the 
150.17  corporate limits for the acquisition of development rights in 
150.18  the form of conservation easements under chapter 84C; and for 
150.19  acquisition of equipment for snow removal, street construction 
150.20  and maintenance, or fire fighting.  Without limitation by the 
150.21  foregoing the city may issue bonds to provide money for any 
150.22  authorized corporate purpose except current expenses. 
150.23     Sec. 40.  Minnesota Statutes 1998, section 475.52, 
150.24  subdivision 3, is amended to read: 
150.25     Subd. 3.  [COUNTIES.] Any county may issue bonds for the 
150.26  acquisition or betterment of courthouses, county administrative 
150.27  buildings, health or social service facilities, correctional 
150.28  facilities, law enforcement centers, jails, morgues, libraries, 
150.29  parks, and hospitals, for roads and bridges within the county or 
150.30  bordering thereon and for road equipment and machinery and for 
150.31  ambulances and related equipment for the acquisition of 
150.32  development rights in the form of conservation easements under 
150.33  chapter 84C, and for capital equipment for the administration 
150.34  and conduct of elections providing the equipment is uniform 
150.35  countywide, except that the power of counties to issue bonds in 
150.36  connection with a library shall not exist in Hennepin county. 
151.1      Sec. 41.  Minnesota Statutes 1998, section 475.52, 
151.2   subdivision 4, is amended to read: 
151.3      Subd. 4.  [TOWNS.] Any town may issue bonds for the 
151.4   acquisition and betterment of town halls, town roads and 
151.5   bridges, nursing homes and homes for the aged, and for 
151.6   acquisition of equipment for snow removal, road construction or 
151.7   maintenance, and fire fighting for the acquisition of 
151.8   development rights in the form of conservation easements under 
151.9   chapter 84C and for the acquisition and betterment of any 
151.10  buildings to house and maintain town equipment. 
151.11     Sec. 42.  Minnesota Statutes 1998, section 477A.011, 
151.12  subdivision 36, is amended to read: 
151.13     Subd. 36.  [CITY AID BASE.] (a) Except as provided in 
151.14  paragraphs (b), (c), and (d) to (k), "city aid base" means, for 
151.15  each city, the sum of the local government aid and equalization 
151.16  aid it was originally certified to receive in calendar year 1993 
151.17  under Minnesota Statutes 1992, section 477A.013, subdivisions 3 
151.18  and 5, and the amount of disparity reduction aid it received in 
151.19  calendar year 1993 under Minnesota Statutes 1992, section 
151.20  273.1398, subdivision 3. 
151.21     (b) For aids payable in 1996 and thereafter, a city that in 
151.22  1992 or 1993 transferred an amount from governmental funds to 
151.23  its sewer and water fund, which amount exceeded its net levy for 
151.24  taxes payable in the year in which the transfer occurred, has a 
151.25  "city aid base" equal to the sum of (i) its city aid base, as 
151.26  calculated under paragraph (a), and (ii) one-half of the 
151.27  difference between its city aid distribution under section 
151.28  477A.013, subdivision 9, for aids payable in 1995 and its city 
151.29  aid base for aids payable in 1995. 
151.30     (c) The city aid base for any city with a population less 
151.31  than 500 is increased by $40,000 for aids payable in calendar 
151.32  year 1995 and thereafter, and the maximum amount of total aid it 
151.33  may receive under section 477A.013, subdivision 9, paragraph 
151.34  (c), is also increased by $40,000 for aids payable in calendar 
151.35  year 1995 only, provided that: 
151.36     (i) the average total tax capacity rate for taxes payable 
152.1   in 1995 exceeds 200 percent; 
152.2      (ii) the city portion of the tax capacity rate exceeds 100 
152.3   percent; and 
152.4      (iii) its city aid base is less than $60 per capita. 
152.5      (d) The city aid base for a city is increased by $20,000 in 
152.6   1998 and thereafter and the maximum amount of total aid it may 
152.7   receive under section 477A.013, subdivision 9, paragraph (c), is 
152.8   also increased by $20,000 in calendar year 1998 only, provided 
152.9   that: 
152.10     (i) the city has a population in 1994 of 2,500 or more; 
152.11     (ii) the city is located in a county, outside of the 
152.12  metropolitan area, which contains a city of the first class; 
152.13     (iii) the city's net tax capacity used in calculating its 
152.14  1996 aid under section 477A.013 is less than $400 per capita; 
152.15  and 
152.16     (iv) at least four percent of the total net tax capacity, 
152.17  for taxes payable in 1996, of property located in the city is 
152.18  classified as railroad property. 
152.19     (e) The city aid base for a city is increased by $200,000 
152.20  in 1999 and thereafter and the maximum amount of total aid it 
152.21  may receive under section 477A.013, subdivision 9, paragraph 
152.22  (c), is also increased by $200,000 in calendar year 1999 only, 
152.23  provided that: 
152.24     (i) the city was incorporated as a statutory city after 
152.25  December 1, 1993; 
152.26     (ii) its city aid base does not exceed $5,600; and 
152.27     (iii) the city had a population in 1996 of 5,000 or more. 
152.28     (f) The city aid base for a city is increased by $450,000 
152.29  in 1999 to 2008 and the maximum amount of total aid it may 
152.30  receive under section 477A.013, subdivision 9, paragraph (c), is 
152.31  also increased by $450,000 in calendar year 1999 only, provided 
152.32  that: 
152.33     (i) the city had a population in 1996 of at least 50,000; 
152.34     (ii) its population had increased by at least 40 percent in 
152.35  the ten-year period ending in 1996; and 
152.36     (iii) its city's net tax capacity for aids payable in 1998 
153.1   is less than $700 per capita. 
153.2      (g) Beginning in 2002, the city aid base for a city is 
153.3   equal to the sum of its city aid base in 2001 and the amount of 
153.4   additional aid it was certified to receive under section 477A.06 
153.5   in 2001.  For 2002 only, the maximum amount of total aid a city 
153.6   may receive under section 477A.013, subdivision 9, paragraph 
153.7   (c), is also increased by the amount it was certified to receive 
153.8   under section 477A.06 in 2001. 
153.9      (h) The city aid base for a city is increased by $150,000 
153.10  for aids payable in 2000 and thereafter, and the maximum amount 
153.11  of total aid it may receive under section 477A.013, subdivision 
153.12  9, paragraph (c), is also increased by $150,000 in calendar year 
153.13  2000 only, provided that: 
153.14     (1) the city has a population that is greater than 1,000 
153.15  and less than 2,500; 
153.16     (2) its commercial and industrial percentage for aids 
153.17  payable in 1999 is greater than 45 percent; and 
153.18     (3) the total market value of all commercial and industrial 
153.19  property in the city for assessment year 1999 is at least 15 
153.20  percent less than the total market value of all commercial and 
153.21  industrial property in the city for assessment year 1998. 
153.22     (i) The city aid base for a city is increased by $200,000 
153.23  in 2000 and thereafter, and the maximum amount of total aid it 
153.24  may receive under section 477A.013, subdivision 9, paragraph 
153.25  (c), is also increased by $200,000 in calendar year 2000 only, 
153.26  provided that: 
153.27     (1) the city had a population in 1997 of 2,500 or more; 
153.28     (2) the net tax capacity of the city used in calculating 
153.29  its 1999 aid under section 477A.013 is less than $650 per 
153.30  capita; 
153.31     (3) the pre-1940 housing percentage of the city used in 
153.32  calculating 1999 aid under section 477A.013 is greater than 12 
153.33  percent; 
153.34     (4) the 1999 local government aid of the city under section 
153.35  477A.013 is less than 20 percent of the amount that the formula 
153.36  aid of the city would have been if the need increase percentage 
154.1   was 100 percent; and 
154.2      (5) the city aid base of the city used in calculating aid 
154.3   under section 477A.013 is less than $7 per capita. 
154.4      (j) The city aid base for a city is increased by $225,000 
154.5   in calendar years 2000 to 2002 and the maximum amount of total 
154.6   aid it may receive under section 477A.013, subdivision 9, 
154.7   paragraph (c), is also increased by $225,000 in calendar year 
154.8   2000 only, provided that: 
154.9      (1) the city had a population of at least 5,000; 
154.10     (2) its population had increased by at least 50 percent in 
154.11  the ten-year period ending in 1997; 
154.12     (3) the city is located outside of the Minneapolis-St. Paul 
154.13  metropolitan statistical area as defined by the United States 
154.14  Bureau of the Census; and 
154.15     (4) the city received less than $30 per capita in aid under 
154.16  section 477A.013, subdivision 9, for aids payable in 1999. 
154.17     (k) The city aid base for a city is increased by $102,000 
154.18  in 2000 and thereafter, and the maximum amount of total aid it 
154.19  may receive under section 477A.013, subdivision 9, paragraph 
154.20  (c), is also increased by $102,000 in calendar year 2000 only, 
154.21  provided that: 
154.22     (1) the city has a population in 1997 of 2,000 or more; 
154.23     (2) the net tax capacity of the city used in calculating 
154.24  its 1999 aid under section 477A.013 is less than $455 per 
154.25  capita; 
154.26     (3) the net levy of the city used in calculating 1999 aid 
154.27  under section 477A.013 is greater than $195 per capita; and 
154.28     (4) the 1999 local government aid of the city under section 
154.29  477A.013 is less than 38 percent of the amount that the formula 
154.30  aid of the city would have been if the need increase percentage 
154.31  was 100 percent. 
154.32     Sec. 43.  Minnesota Statutes 1998, section 477A.06, 
154.33  subdivision 1, is amended to read: 
154.34     Subdivision 1.  [ELIGIBILITY.] (a) For assessment years 
154.35  1998, 1999, and 2000, for all class 4d property on which 
154.36  construction was begun before January 1, 1999, the assessor 
155.1   shall determine the difference between the actual net tax 
155.2   capacity and the net tax capacity that would be determined for 
155.3   the property if the class rates for assessment year 1997 were in 
155.4   effect. 
155.5      (b) In calendar years 1999, 2000, and 2001, each city shall 
155.6   be eligible for aid equal to (i) the amount by which the sum of 
155.7   the differences determined in clause (a) for the corresponding 
155.8   assessment year exceeds 2.5 two percent of the city's total 
155.9   taxable net tax capacity for taxes payable in 1998, multiplied 
155.10  by (ii) the city government's average local tax rate for taxes 
155.11  payable in 1998. 
155.12     Sec. 44.  Laws 1997, chapter 231, article 2, section 68, 
155.13  subdivision 3, as amended by Laws 1998, chapter 389, article 3, 
155.14  section 36, is amended to read: 
155.15     Subd. 3.  [MORATORIUM ON CHANGES IN ELDERLY ASSISTED LIVING 
155.16  FACILITIES; ASSESSMENT PRACTICES.] (a) An assessor may not 
155.17  change the current practices or policies used generally in 
155.18  assessing elderly assisted living facilities. 
155.19     (b) An assessor may not change the 1999 assessment of an 
155.20  existing elderly assisted living facility, unless the change is 
155.21  made as a result of a change in ownership, occupancy, or use of 
155.22  the facility.  This paragraph does not apply to: 
155.23     (1) a facility that was constructed during calendar year 
155.24  1997, 1998, or 1999; 
155.25     (2) a facility that was converted to an elderly assisted 
155.26  living facility during calendar year 1997, 1998, or 1999; or 
155.27     (3) a change in market value. 
155.28     (c) This subdivision expires and no longer applies on the 
155.29  earlier of: 
155.30     (1) the enactment of legislation establishing criteria for 
155.31  the property taxation of elderly assisted living facilities; or 
155.32     (2) final adjournment of the 1999 regular legislative 
155.33  session December 31, 1999. 
155.34     Sec. 45.  Laws 1997, First Special Session chapter 3, 
155.35  section 27, is amended to read: 
155.36     Sec. 27.  [TAXPAYER'S PERSONAL INFORMATION; DISCLOSURE.] 
156.1      (a) An owner of property in Washington or Ramsey county 
156.2   that is subject to property taxation must be informed in a clear 
156.3   and conspicuous manner in writing on a form sent to property 
156.4   taxpayers that the property owner's name, address, and other 
156.5   information may be used, rented, or sold for business purposes, 
156.6   including surveys, marketing, and solicitation. 
156.7      (b) If the property owner so requests on the form provided, 
156.8   then any such list generated by the county and sold for business 
156.9   purposes must exclude the owner's name and address if the 
156.10  business purpose is conducting surveys, marketing, or 
156.11  solicitation. 
156.12     (c) This section expires August 1, 1999 2001. 
156.13     Sec. 46.  [ABATEMENT OF TAXES.] 
156.14     Subdivision 1.  [PROPERTY DEFINED.] As used in this section 
156.15  and section 47, "property" means property located in Lake county 
156.16  that meets the following description: 
156.17     All that part of Government Lot Two (2) of Section One (1) 
156.18  in Township Fifty-two (52) North, Range Eleven (11) West of the 
156.19  Fourth Principal Meridian, lying within the following described 
156.20  lines: 
156.21     Commencing at a point on the North-South quarter line of 
156.22  said Section 1 which is 20 feet south of the center of said 
156.23  Section 1 measured along said North-South quarter line; 
156.24     thence easterly at a right angle to said North-South 
156.25  quarter line a distance of 5 feet to the point of Beginning; 
156.26     thence continuing in an easterly direction at a right angle 
156.27  to said North-South quarter line a distance of 335 feet; 
156.28     thence southerly at a right angle to the last described 
156.29  line a distance of 80 feet; 
156.30     thence easterly at a right angle to the last described line 
156.31  a distance of 210 feet; 
156.32     thence southerly at a right angle to the last described 
156.33  line a distance of 255 feet; 
156.34     thence southeasterly at an angle of 102 degrees to the last 
156.35  described line to the ordinary low-water mark of Agate Bay; 
156.36     thence easterly along said ordinary low-water mark to the 
157.1   East boundary line of said Government Lot 2; 
157.2      thence in a northerly direction along said East boundary 
157.3   line to a point on said East boundary line which is 75 feet 
157.4   distant in a northerly direction from the East-West quarter line 
157.5   of said Section 1, extended, as measured along said East 
157.6   boundary line; 
157.7      thence in a northwesterly direction to a point which is 190 
157.8   feet easterly measured at a right angle to the North-South 
157.9   quarter line of said Section 1 from a point on the North-South 
157.10  quarter line, which point is 725 feet northerly of the center of 
157.11  said Section 1 when measured along said North-South quarter 
157.12  line; 
157.13     thence in a westerly direction at a right angle to said 
157.14  North-South quarter line a distance of 185 feet; 
157.15     thence southerly along a line parallel to and 5 feet 
157.16  distant easterly from said North-South quarter line a distance 
157.17  of 230 feet; 
157.18     thence easterly at a right angle to the last described line 
157.19  a distance of 130 feet; 
157.20     thence southerly at a right angle to the last described 
157.21  line a distance of 119.27 feet; 
157.22     thence westerly at a right angle to the last described line 
157.23  a distance of 130 feet; 
157.24     thence southerly along a line parallel to and 5 feet 
157.25  distant easterly from said North-South quarter line a distance 
157.26  of 395.73 feet to the point of beginning. 
157.27     Subd. 2.  [AUTHORIZATION.] Upon a majority vote of its 
157.28  members, the governing bodies of each of Lake county, the city 
157.29  of Two Harbors, and Lake Superior independent school district 
157.30  No. 381, may abate the taxes levied on the property described in 
157.31  subdivision 1 in 1979 to 1990, payable in 1980 to 1991, as well 
157.32  as any interest and penalties due on those taxes. 
157.33     Sec. 47.  [RECORDING OF CONVEYANCE AUTHORIZED.] 
157.34     Notwithstanding Minnesota Statutes, section 272.12, or any 
157.35  other law to the contrary, if the governing bodies of Lake 
157.36  county, the city of Two Harbors, and Lake Superior independent 
158.1   school district No. 381 have all abated the taxes, interest, and 
158.2   penalties as provided in section 46, subdivision 2, the county 
158.3   auditor may record the conveyance of the property described in 
158.4   section 46, subdivision 1. 
158.5      Sec. 48.  [LOCAL PERFORMANCE AID RECIPIENTS; OTHER AID 
158.6   INCREASES.] 
158.7      (a) If a county received local performance aid under 
158.8   Minnesota Statutes, section 477A.05, in calendar year 1999, the 
158.9   amount of homestead and agricultural credit aid determined and 
158.10  payable to the county under Minnesota Statutes, section 
158.11  273.1398, in 2000 and subsequent years is increased by the 
158.12  amount of performance aid it received in 1999. 
158.13     (b) If a city received local performance aid under 
158.14  Minnesota Statutes, section 477A.05, in calendar year 1999, the 
158.15  city aid base of the city under Minnesota Statutes, section 
158.16  477A.011, subdivision 36, is increased for aid payable in 2000 
158.17  and subsequent years by the amount of performance aid it 
158.18  received in 1999, and the maximum amount of total aid it may 
158.19  receive under Minnesota Statutes, section 477A.013, subdivision 
158.20  9, paragraph (c), is also increased by that amount in calendar 
158.21  year 2000 only. 
158.22     (c) For purposes of determining the limitation on aid 
158.23  increases under Minnesota Statutes, section 477A.013, 
158.24  subdivision 9, paragraph (b), for aid payable in 2000, the sum 
158.25  of the aid to all cities in 2000 does not include the aid 
158.26  increase under paragraph (a) of this section. 
158.27     Sec. 49.  [RECOMMENDATIONS ON UTILITY TAX POLICY.] 
158.28     The commissioner of revenue, upon consultation with the 
158.29  commissioner of public service and other appropriate state 
158.30  agencies, shall convene meetings of representatives from 
158.31  utilities which pay personal property taxes on generation 
158.32  facilities and local governments in which those facilities are 
158.33  sited.  These meetings shall assess policy issues related to the 
158.34  taxation of Minnesota utility generation facilities in a 
158.35  changing energy market, including: 
158.36     (1) the effects of future restructuring of the electric 
159.1   industry; 
159.2      (2) impacts on revenue to local governments and debt 
159.3   issuance; 
159.4      (3) evolution of utility tax policy in Minnesota and other 
159.5   states; 
159.6      (4) sufficiency of Minnesota's future electric power 
159.7   supply; and 
159.8      (5) any other relevant issues, including environmental, 
159.9   labor, and consumer issues. 
159.10     The meetings shall be open to any interested parties.  The 
159.11  commissioner shall examine utility tax policy issues and make 
159.12  recommendations, as warranted, on the future of the personal 
159.13  property tax on generation facilities and the replacement of 
159.14  revenues that would be lost to local units of government as a 
159.15  result of a partial or full exemption of these personal property 
159.16  taxes. 
159.17     The commissioner shall report on the progress of these 
159.18  meetings, including options being considered and a plan for 
159.19  completing the report, to the chairs of the senate committees on 
159.20  taxes and jobs, energy and community development, the house 
159.21  committees on taxes and commerce, and the governor, by January 
159.22  15, 2000, with a final report to those same officials by 
159.23  December 1, 2000. 
159.24     Sec. 50.  [383D.74] [DAKOTA COUNTY; ADMINISTRATIVE 
159.25  PENALTIES.] 
159.26     Subdivision 1.  [PENALTIES.] The Dakota county board may 
159.27  impose an administrative penalty for violation of an ordinance 
159.28  enacted under chapter 103F.  No penalty may be imposed unless 
159.29  the owner has received notice, served personally or by mail, of 
159.30  the alleged violation and an opportunity for a hearing before a 
159.31  person authorized by the county board to conduct the hearing.  A 
159.32  decision that a violation occurred must be in writing.  The 
159.33  amount of the penalty with interest may not exceed the amount 
159.34  allowed for a single misdemeanor violation.  A person aggrieved 
159.35  by a decision under this section may have the decision reviewed 
159.36  in the district court.  If a penalty imposed under this section 
160.1   is unpaid for more than 60 days after the date when payment is 
160.2   due, the county board may certify the penalty to the county 
160.3   auditor for collection to the same extent and in the same manner 
160.4   provided by law for the assessment and collection of real estate 
160.5   taxes. 
160.6      Subd. 2.  [EXPIRATION.] The authority to impose a penalty 
160.7   under this section expires on December 31, 2000. 
160.8      Sec. 51.  [LEGISLATIVE INTENT.] 
160.9      It is the intent of the legislature that one-half of the 
160.10  actual property tax savings to the taxpayer as a result of the 
160.11  class rate reduction under section 19, for manufactured home 
160.12  parks, for taxes payable in 2000 to 2004, be reinvested by the 
160.13  taxpayer in capital improvements of the manufactured home park 
160.14  or used for direct assistance to homeowners for home 
160.15  improvements. 
160.16     Sec. 52.  [2000 CHARITY CARE AID.] 
160.17     Subdivision 1.  [PURPOSE.] The purpose of charity care aid 
160.18  is to prevent or reduce the reliance on county property taxes to 
160.19  meet the cost of providing medical care to individuals who are 
160.20  indigent and who do not reside in the county. 
160.21     Subd. 2.  [QUALIFICATION.] A county qualifies for payment 
160.22  under this section in 2000 only if it contains a hospital that 
160.23  has a medical assistance disproportionate population adjustment 
160.24  as determined under section 256.969, subdivision 9, greater than 
160.25  16 percent. 
160.26     Subd. 3.  [REPORTS BY HOSPITALS AND COUNTIES.] (a) By June 
160.27  1, 1999, a hospital described in subdivision 2 must file a 
160.28  report with the county in which it is located setting forth its 
160.29  audited financial statements and a schedule setting forth the 
160.30  aggregate amount of charity care for calendar year 1998 that 
160.31  meets the following criteria: 
160.32     (1) the patient is from a county other than the county in 
160.33  which the hospital is located; and 
160.34     (2) the hospital has made a preliminary determination that: 
160.35     (i) the patient is not eligible for any public health care 
160.36  program or it cannot be determined whether the person is 
161.1   eligible for any public health care program; and 
161.2      (ii) the person is uninsured or it cannot be determined if 
161.3   the person is uninsured or the person has insufficient resources 
161.4   to pay the cost of services delivered by the hospital. 
161.5      (b) By July 1, 1999, each county must report to the 
161.6   commissioner of revenue the total amount of charity care 
161.7   reported to it by hospitals under this subdivision.  
161.8      Subd. 4.  [AMOUNT OF AID.] (a) Subject to the limitation in 
161.9   paragraph (b), payment to a county under this section is equal 
161.10  to the aggregate amount of charity care, as reported under 
161.11  subdivision 3, for calendar year 1998. 
161.12     (b) The total of all payments under this section may not 
161.13  exceed $10,000,000.  If the amounts reported under subdivision 3 
161.14  for all counties exceeds $10,000,000, the distributions to each 
161.15  county must be allocated in proportion to the total amount of 
161.16  uncompensated care reported to the commissioner by the county so 
161.17  that the total of the payments does not exceed $10,000,000. 
161.18     Subd. 5.  [PAYMENT DATES.] The aid amounts must be paid as 
161.19  provided in section 477A.015. 
161.20     Subd. 6.  [USE OF FUNDS.] Each county that receives a 
161.21  payment under this section must remit all charity care aid funds 
161.22  to hospitals described in subdivision 2 that apply to the county 
161.23  for reimbursement.  If the aid a county receives is less than 
161.24  the total amount of uncompensated care reported by eligible 
161.25  hospitals in the county, the aid amounts remitted to the 
161.26  hospitals must be proportional to the amounts reported. 
161.27     Subd. 7.  [REPORT TO THE COMMISSIONER.] By March 15, 2001, 
161.28  each county that receives the aid must file a report with the 
161.29  commissioner of revenue describing how charity care aids were 
161.30  spent, and verifying that they were paid to hospitals described 
161.31  in subdivision 2 for charity care purposes for individuals who 
161.32  do not reside in the county. 
161.33     Subd. 8.  [NOTICE TO COUNTIES.] The commissioner of revenue 
161.34  shall annually notify the governing body of each county, 
161.35  providing information, to the extent available to the 
161.36  commissioner, regarding the amount of reimbursements paid under 
162.1   this section attributable to care provided to residents of that 
162.2   county. 
162.3      Subd. 9.  [HENNEPIN COUNTY LEVY LIMIT ADJUSTMENT.] For 
162.4   taxes levied in 1999 only, the levy limit for Hennepin county 
162.5   under Minnesota Statutes, section 275.71, subdivision 4, is 
162.6   reduced by an amount equal to the amount of charity aid 
162.7   allocated to the Hennepin county medical center. 
162.8      Subd. 10.  [APPROPRIATION.] The amount sufficient to make 
162.9   the payments under this section is appropriated from the general 
162.10  fund to the commissioner of revenue. 
162.11     Sec. 53.  [PROPERTY TAX ABATEMENT; PROPERTY DAMAGED BY 
162.12  TORNADO.] 
162.13     Subdivision 1.  [ABATEMENT AMOUNT.] The county auditor 
162.14  shall grant an abatement for taxes payable in 1999 to any 
162.15  property in a qualifying county, as defined in Laws 1998, 
162.16  chapter 383, section 20, that contains a structure that has been 
162.17  determined by the assessor to have lost over 50 percent of its 
162.18  estimated market value due to wind damage sustained on March 29, 
162.19  1998, excluding residential homestead property and the portion 
162.20  of agricultural homestead property consisting of the house, 
162.21  garage, and surrounding one acre of land.  The abatement is 
162.22  equal to 75 percent of the amount by which the net tax capacity 
162.23  of the structure was reduced by the wind damage, multiplied by 
162.24  the payable 1999 total local net tax capacity tax rate, plus 75 
162.25  percent of the amount by which the referendum market value of 
162.26  the structure was reduced by the wind damage, multiplied by the 
162.27  payable 1999 total market value tax rate.  If the amount of the 
162.28  abatement exceeds the remaining tax due on the property for 
162.29  taxes payable in 1999, a refund shall be issued to the taxpayer 
162.30  by the county treasurer by June 30, 1999. 
162.31     Subd. 2.  [CERTIFICATION.] The amount of abatements granted 
162.32  under this section shall be reported to the commissioner of 
162.33  revenue by the county auditor by June 30, 1999, in a form 
162.34  prescribed by the commissioner.  The commissioner may require 
162.35  the county to provide other information necessary to verify the 
162.36  accuracy of the abatement amounts submitted. 
163.1      Subd. 3.  [PAYMENT.] The commissioner shall make payments 
163.2   equal to the amount of abatements granted to each county by 
163.3   August 30, 1999.  The county treasurer shall distribute the 
163.4   payments to the affected taxing jurisdictions equal to the 
163.5   amount of the tax that was abated as part of the October 1999 
163.6   regular settlement as provided in Minnesota Statutes, section 
163.7   276.111. 
163.8      Subd. 4.  [APPROPRIATION.] The amount necessary to fund the 
163.9   payments required under this section is appropriated from the 
163.10  general fund to the commissioner of revenue in fiscal year 2000. 
163.11     Sec. 54.  [REPEALER.] 
163.12     (a) Minnesota Statutes 1998, section 273.11, subdivision 
163.13  10, is repealed. 
163.14     (b) Minnesota Statutes 1998, section 477A.05, is repealed. 
163.15     (c) Laws 1998, chapter 389, article 3, section 45, is 
163.16  repealed. 
163.17     Sec. 55.  [EFFECTIVE DATES.] 
163.18     Sections 1 and 2 are effective for petitions filed on or 
163.19  after the day following final enactment.  
163.20     Sections 3, 4, 5, 9, paragraph (c), 10, 11, 15, 16, 17, 
163.21  paragraphs (a) and (b), 19, 20, 21, 22, 25, and 33 are effective 
163.22  for taxes levied in 1999, payable in 2000, and thereafter. 
163.23     Section 6 is effective for assessment years 1999 through 
163.24  2001. 
163.25     Section 7 is effective for improvements made on or after 
163.26  July 1, 1999.  
163.27     Section 8 is effective retroactively for property taxes 
163.28  payable in 1998 and thereafter. 
163.29     Section 9, paragraph (h), is effective for taxes payable in 
163.30  1999 and subsequent years. 
163.31     Section 13 is effective beginning with the 1999 assessment, 
163.32  taxes payable in 2000 and thereafter.  For eligibility for the 
163.33  1999 assessment year under section 13, paragraph (b), the owner 
163.34  or the person who is actively farming the property must notify 
163.35  the county assessor by July 1, 1999, and furnish to the assessor 
163.36  the information required by the assessor to determine whether 
164.1   the qualifying criteria has been met for the 1999 assessment on 
164.2   the agricultural property. 
164.3      Sections 12, 14, 24, 29, 36 to 38, 44, and 53 are effective 
164.4   the day following final enactment.  
164.5      Sections 17, paragraph (c), 18, and 54, paragraph (c), are 
164.6   effective for taxes levied in 2000, payable in 2001 and 
164.7   thereafter. 
164.8      Section 20, paragraph (f), is effective for the 2000 
164.9   assessment and thereafter, for taxes payable in 2001 and 
164.10  thereafter, except that for taxes payable in 2001, the date for 
164.11  filing an application with the county assessor under section 20, 
164.12  paragraph (f), clause (3), is September 1, 1999. 
164.13     Section 26 is effective for penalties and interest on 
164.14  property taxes collected after June 30, 1999. 
164.15     Section 27 is effective for property tax refunds for claims 
164.16  for property taxes payable filed in 2000 and thereafter for 
164.17  taxes payable in 2000 and thereafter. 
164.18     Sections 22, 48, and 54, paragraph (b), are effective for 
164.19  aids payable in 2000 and thereafter. 
164.20     Sections 28 and 30 to 32 are effective for deferrals of 
164.21  property taxes payable in 2000 and thereafter.  The changes in 
164.22  the annual tax amount percentage and the maximum annual 
164.23  household income in sections 28 and 30 to 32 apply to all 
164.24  homeowners and all property taxes deferred beginning in payable 
164.25  2000, including those homeowners who initially qualified under 
164.26  this program for taxes payable in 1999. 
164.27     Section 45 applies to Washington county only and is 
164.28  effective the day after the chief clerical officer of Washington 
164.29  county files a certificate of approval that complies with 
164.30  Minnesota Statutes, section 645.021, subdivision 3. 
164.31     Sections 46 and 47 are effective the day following final 
164.32  enactment, upon approval by and compliance with Minnesota 
164.33  Statutes, section 645.021, subdivision 3, by the governing 
164.34  bodies of Lake county, the city of Two Harbors, and Lake 
164.35  Superior independent school district No. 381. 
164.36                             ARTICLE 6 
165.1                  LEVY AUTHORIZATION AND LEVY LIMITS 
165.2      Section 1.  Minnesota Statutes 1998, section 204B.135, is 
165.3   amended by adding a subdivision to read: 
165.4      Subd. 5.  [REDISTRICTING EXPENSES.] The county board may 
165.5   levy a tax not to exceed $1 per capita in the year ending in "0" 
165.6   to pay costs incurred in the year ending in "1" or "2" that are 
165.7   reasonably related to the redistricting of election districts, 
165.8   establishment of precinct boundaries, designation of polling 
165.9   places, and the updating of voter records in the statewide 
165.10  registration system.  The county auditor shall distribute to 
165.11  each municipality in the county on a per capita basis 25 percent 
165.12  of the amount levied as provided in this subdivision, based on 
165.13  the population of the municipality in the most recent census.  
165.14  This levy is not subject to statutory levy limits. 
165.15     Sec. 2.  [275.078] [AUTHORIZATION; TAX RATE INCREASE.] 
165.16     On or before October 1, 1999, and each subsequent year, the 
165.17  county auditor shall certify to the governing body of each home 
165.18  rule charter or statutory city in the county and to the county 
165.19  board, the following information for the taxing jurisdiction: 
165.20     (1) the taxing jurisdiction's certified levy under section 
165.21  275.08 for the previous year, taxes payable in the current year, 
165.22  excluding any amount levied to pay general obligation bonds, 
165.23  less (i) the areawide portion of the levy under section 276A.06, 
165.24  subdivision 3, or 473F.08, subdivision 3, if any, for taxes 
165.25  payable in the following year; and (ii) the sum of the net tax 
165.26  capacity adjustment amount and the fiscal disparities adjustment 
165.27  amount under section 273.1398, subdivision 2, if any, for aids 
165.28  payable in the following year; 
165.29     (2) the taxing jurisdiction's taxable net tax capacity for 
165.30  the current assessment year, for taxes payable in the following 
165.31  year; and 
165.32     (3) the tax rate obtained by dividing the amount in clause 
165.33  (1) by the amount in clause (2), rounded to the nearest 
165.34  hundredth percent. 
165.35     In order to impose a tax rate for purposes other than to 
165.36  pay general obligation bonds for taxes payable in the following 
166.1   year that is higher than the tax rate certified by the county 
166.2   auditor under clause (3), the governing body of the city or the 
166.3   county board must adopt a resolution, after holding a public 
166.4   hearing, authorizing a higher tax rate and file a copy of the 
166.5   resolution with the county auditor on or before October 20, 
166.6   1999, and each year thereafter.  A county auditor is prohibited 
166.7   from fixing a tax rate for purposes other than to pay general 
166.8   obligation bonds for taxes payable in the following year that is 
166.9   higher than the rate certified under clause (3) if a resolution 
166.10  has not been filed, unless the higher rate is due solely to a 
166.11  reduction in the taxing jurisdiction's net tax capacity 
166.12  certified under clause (2) resulting from classification 
166.13  changes, exemptions, tax court judgments, or clerical or 
166.14  administrative errors made by the county.  For purposes of this 
166.15  section, "public hearing" includes, but is not limited to, 
166.16  regularly scheduled city council hearings and county board 
166.17  meetings. 
166.18     Sec. 3.  Minnesota Statutes 1998, section 275.70, 
166.19  subdivision 5, is amended to read: 
166.20     Subd. 5.  [SPECIAL LEVIES.] "Special levies" means those 
166.21  portions of ad valorem taxes levied by a local governmental unit 
166.22  for the following purposes or in the following manner: 
166.23     (1) to pay the costs of the principal and interest on 
166.24  bonded indebtedness or to reimburse for the amount of liquor 
166.25  store revenues used to pay the principal and interest due on 
166.26  municipal liquor store bonds in the year preceding the year for 
166.27  which the levy limit is calculated; 
166.28     (2) to pay the costs of principal and interest on 
166.29  certificates of indebtedness issued for any corporate purpose 
166.30  except for the following: 
166.31     (i) tax anticipation or aid anticipation certificates of 
166.32  indebtedness; 
166.33     (ii) certificates of indebtedness issued under sections 
166.34  298.28 and 298.282; 
166.35     (iii) certificates of indebtedness used to fund current 
166.36  expenses or to pay the costs of extraordinary expenditures that 
167.1   result from a public emergency; or 
167.2      (iv) certificates of indebtedness used to fund an 
167.3   insufficiency in tax receipts or an insufficiency in other 
167.4   revenue sources; 
167.5      (3) to provide for the bonded indebtedness portion of 
167.6   payments made to another political subdivision of the state of 
167.7   Minnesota; 
167.8      (4) to fund payments made to the Minnesota state armory 
167.9   building commission under section 193.145, subdivision 2, to 
167.10  retire the principal and interest on armory construction bonds; 
167.11     (5) for unreimbursed expenses related to flooding that 
167.12  occurred during the first half of calendar year 1997, as allowed 
167.13  by the commissioner of revenue under section 275.74, paragraph 
167.14  (b); 
167.15     (6) for local units of government located in an area 
167.16  designated by the Federal Emergency Management Agency pursuant 
167.17  to a major disaster declaration issued for Minnesota by 
167.18  President Clinton after April 1, 1997, and before June 11, 1997, 
167.19  for the amount of tax dollars lost due to abatements authorized 
167.20  under section 273.123, subdivision 7, and Laws 1997, chapter 
167.21  231, article 2, section 64, to the extent that they are related 
167.22  to the major disaster and to the extent that neither the state 
167.23  or federal government reimburses the local government for the 
167.24  amount lost; 
167.25     (7) property taxes approved by voters which are levied 
167.26  against the referendum market value as provided under section 
167.27  275.61; 
167.28     (8) to fund matching requirements needed to qualify for 
167.29  federal or state grants or programs to the extent that either 
167.30  (i) the matching requirement exceeds the matching requirement in 
167.31  calendar year 1997, or (ii) it is a new matching requirement 
167.32  that didn't exist prior to 1998; 
167.33     (9) to pay the expenses reasonably and necessarily incurred 
167.34  in preparing for or repairing the effects of natural disaster 
167.35  including the occurrence or threat of widespread or severe 
167.36  damage, injury, or loss of life or property resulting from 
168.1   natural causes, in accordance with standards formulated by the 
168.2   emergency services division of the state department of public 
168.3   safety, as allowed by the commissioner of revenue under section 
168.4   275.74, paragraph (b); 
168.5      (10) for the amount of tax revenue lost due to abatements 
168.6   authorized under section 273.123, subdivision 7, for damage 
168.7   related to the tornadoes of March 29, 1998, to the extent that 
168.8   neither the state or federal government provides reimbursement 
168.9   for the amount lost; 
168.10     (11) pay amounts required to correct an error in the levy 
168.11  certified to the county auditor by a city or county in a levy 
168.12  year, but only to the extent that when added to the preceding 
168.13  year's levy it is not in excess of an applicable statutory, 
168.14  special law or charter limitation, or the limitation imposed on 
168.15  the governmental subdivision by sections 275.70 to 275.74 in the 
168.16  preceding levy year; and 
168.17     (12) to pay an abatement under section 469.1815.; and 
168.18     (13) to pay the operating or maintenance costs of a county 
168.19  jail as authorized in section 641.01 or 641.262, or of a 
168.20  correctional facility as defined in section 241.021, subdivision 
168.21  1, paragraph (5), to the extent that the county can demonstrate 
168.22  to the commissioner of revenue that the amount has been included 
168.23  in the county budget as a direct result of a rule, minimum 
168.24  requirement, minimum standard, or directive of the department of 
168.25  corrections.  If the county utilizes this special levy, any 
168.26  amount levied by the county in the previous levy year for the 
168.27  purposes specified under this clause and included in the 
168.28  county's previous year's levy limitation computed under section 
168.29  275.71, shall be deducted from the levy limit base under section 
168.30  275.71, subdivision 2, when determining the county's current 
168.31  year levy limitation.  The county shall provide the necessary 
168.32  information to the commissioner of revenue for making this 
168.33  determination. 
168.34     Sec. 4.  Minnesota Statutes 1998, section 275.71, 
168.35  subdivision 2, is amended to read: 
168.36     Subd. 2.  [LEVY LIMIT BASE.] (a) The levy limit base for a 
169.1   local governmental unit for taxes levied in 1997 shall be equal 
169.2   to the sum of: 
169.3      (1) the amount the local governmental unit levied in 1996, 
169.4   less any amount levied for debt, as reported to the department 
169.5   of revenue under section 275.62, subdivision 1, clause (1), and 
169.6   less any tax levied in 1996 against market value as provided for 
169.7   in section 275.61; 
169.8      (2) the amount of aids the local governmental unit was 
169.9   certified to receive in calendar year 1997 under sections 
169.10  477A.011 to 477A.03 before any reductions for state tax 
169.11  increment financing aid under section 273.1399, subdivision 5; 
169.12     (3) the amount of homestead and agricultural credit aid the 
169.13  local governmental unit was certified to receive under section 
169.14  273.1398 in calendar year 1997 before any reductions for tax 
169.15  increment financing aid under section 273.1399, subdivision 5; 
169.16     (4) the amount of local performance aid the local 
169.17  governmental unit was certified to receive in calendar year 1997 
169.18  under section 477A.05; and 
169.19     (5) the amount of any payments certified to the local 
169.20  government unit in 1997 under sections 298.28 and 298.282. 
169.21     If a governmental unit was not required to report under 
169.22  section 275.62 for taxes levied in 1997, the commissioner shall 
169.23  request information on levies used for debt from the local 
169.24  governmental unit and adjust its levy limit base accordingly. 
169.25     (b) The levy limit base for a local governmental unit for 
169.26  taxes levied in 1998 is equal to its adjusted levy limit base in 
169.27  the previous year, subject to any adjustments under section 
169.28  275.72 and multiplied by the increase that would have occurred 
169.29  under subdivision 3, clause (3), if that clause had been in 
169.30  effect for taxes levied in 1997. 
169.31     (c) The levy limit base for a city with a population 
169.32  greater than 2,500 for taxes levied in 1999 is limited to its 
169.33  adjusted levy limit base in the previous year, subject to 
169.34  adjustments under section 275.72. 
169.35     (d) The levy limit base for a county for taxes levied in 
169.36  1999 is limited to the difference between (1) its adjusted levy 
170.1   limit base in the previous year subject to adjustments under 
170.2   section 275.72, and (2) one-half of the county's share of the 
170.3   net cost to the state for assumption of district court costs, as 
170.4   reported by the supreme court to the commissioner of revenue 
170.5   under section 273.1398, subdivision 4a, paragraph (a). 
170.6      Sec. 5.  Minnesota Statutes 1998, section 275.71, 
170.7   subdivision 3, is amended to read: 
170.8      Subd. 3.  [ADJUSTED LEVY LIMIT BASE.] For taxes levied in 
170.9   1998 and 1999, the adjusted levy limit is equal to the levy 
170.10  limit base computed under subdivision 2 or section 275.72, 
170.11  multiplied by: 
170.12     (1) one plus a percentage equal to the percentage growth in 
170.13  the implicit price deflator; and 
170.14     (2) for all cities and for counties outside of the 
170.15  seven-county metropolitan area, one plus a percentage equal to 
170.16  the percentage increase in number of households, if any, for the 
170.17  most recent 12-month period for which data is available; and for 
170.18  counties located in the seven-county metropolitan area, one plus 
170.19  a percentage equal to the greater of the percentage increase in 
170.20  the number of households in the county or the percentage 
170.21  increase in the number of households in the entire seven-county 
170.22  metropolitan area for the most recent 12-month period for which 
170.23  data is available; and 
170.24     (3) one plus a percentage equal to the percentage increase 
170.25  in the taxable market value of the jurisdiction due to new 
170.26  construction of class 3 and class 5 property, as defined in 
170.27  section 273.13, subdivisions 24 and 31, for the most recent year 
170.28  for which data are available. 
170.29     Sec. 6.  Minnesota Statutes 1998, section 275.71, 
170.30  subdivision 4, is amended to read: 
170.31     Subd. 4.  [PROPERTY TAX LEVY LIMIT.] For taxes levied in 
170.32  1998 and 1999, the property tax levy limit for a local 
170.33  governmental unit is equal to its adjusted levy limit base 
170.34  determined under subdivision 3 plus any additional levy 
170.35  authorized under section 275.73, which is levied against net tax 
170.36  capacity, reduced by the sum of (1) the total amount of aids 
171.1   that the local governmental unit is certified to receive under 
171.2   sections 477A.011 to 477A.014, (2) homestead and agricultural 
171.3   aids it is certified to receive under section 273.1398, (3) 
171.4   local performance aid it is certified to receive under section 
171.5   477A.05, (4) taconite aids under sections 298.28 and 298.282 
171.6   including any aid which was required to be placed in a special 
171.7   fund for expenditure in the next succeeding year, (5) flood loss 
171.8   aid under section 273.1383, and (6) low-income housing aid under 
171.9   sections 477A.06 and 477A.065. 
171.10     Sec. 7.  Minnesota Statutes 1998, section 465.82, is 
171.11  amended by adding a subdivision to read: 
171.12     Subd. 4.  [DIFFERENTIAL TAXATION.] The plan for cooperation 
171.13  and combination adopted in accordance with subdivision 1 may 
171.14  establish that the tax rate of the local government unit with 
171.15  the lesser tax rate prior to the effective date of combination 
171.16  shall be increased in substantially equal proportions over not 
171.17  more than six years to equality with the tax rate on the 
171.18  property already within the borders of the local unit of 
171.19  government with the higher tax rate.  The appropriate period of 
171.20  time, if any, for transition to the higher tax rate shall be 
171.21  based on the time reasonably required to effectively provide 
171.22  equal municipal services to the residents of the local unit of 
171.23  government with the lower tax rate. 
171.24     Sec. 8.  Minnesota Statutes 1998, section 473.252, 
171.25  subdivision 2, is amended to read: 
171.26     Subd. 2.  [SOURCES OF FUNDS.] The council shall credit to 
171.27  the tax base revitalization account within the fund the amount, 
171.28  if any, provided for under subdivision 4, and the amount, if 
171.29  any, distributed to the council under section 473F.08, 
171.30  subdivision 3b. 
171.31     Sec. 9.  Laws 1988, chapter 645, section 3, is amended to 
171.32  read: 
171.33     Sec. 3.  [TAX; PAYMENT OF EXPENSES.] 
171.34     (a) The tax levied by the hospital district under Minnesota 
171.35  Statutes, section 447.34, must not be levied at a rate that 
171.36  exceeds 2 mills .0063 percent of taxable market value.  The 
172.1   proceeds 
172.2      (b) .0048 percent of taxable market value of that tax in 
172.3   paragraph (a) may be used only for acquisition, betterment, and 
172.4   maintenance of the district's hospital and nursing home 
172.5   facilities and equipment, and not for administrative or salary 
172.6   expenses.  
172.7      (c) .0015 percent of taxable market value of the tax in 
172.8   paragraph (a) may be used solely for the purpose of capital 
172.9   expenditures as it relates to ambulance acquisitions for the 
172.10  Cook ambulance service and the Orr ambulance service and not for 
172.11  administrative or salary expenses.  
172.12     The part of the levy referred to in paragraph (c) must be 
172.13  administered by the Cook Hospital and passed on directly to the 
172.14  Cook area ambulance service board and the city of Orr to be held 
172.15  in trust until funding for a new ambulance is needed by either 
172.16  the Cook ambulance service or the Orr ambulance service. 
172.17     Sec. 10.  Laws 1997, chapter 231, article 3, section 9, is 
172.18  amended to read: 
172.19     Sec. 9.  [EFFECTIVE DATE.] 
172.20     Sections 1 and 3 to 7, as amended by Laws 1998, chapter 
172.21  389, article 4, sections 1 to 6, are effective for taxes levied 
172.22  in 1997 and 1998 through 1999, payable in 1998 and 1999 through 
172.23  2000. 
172.24     Upon compliance with Minnesota Statutes, section 645.021, 
172.25  subdivision 3, by the governing body of Faribault county or the 
172.26  city of Blue Earth, section 8 is effective for taxes levied in 
172.27  1997 and 1998 through 1999 in the county or city that approves 
172.28  it. 
172.29     Sec. 11.  [CEMETERY LEVY FOR SAWYER BY CARLTON COUNTY.] 
172.30     Subdivision 1.  [LEVY AUTHORIZED.] Notwithstanding other 
172.31  law to the contrary, the Carlton county board of commissioners 
172.32  may levy in and for the unorganized township of Sawyer an amount 
172.33  up to $1,000 annually for cemetery purposes, beginning with 
172.34  taxes payable in 2000 and ending with taxes payable in 2009. 
172.35     Subd. 2.  [EFFECTIVE DATE.] This section is effective June 
172.36  1, 1999, without local approval. 
173.1      Sec. 12.  [COUNTY OF GOODHUE; LEVY LIMITS AND AID 
173.2   ADJUSTMENTS.] 
173.3      Subdivision 1.  [LEVY LIMIT BASE.] The levy limit base of 
173.4   the county of Goodhue for taxes levied in 1999 under Minnesota 
173.5   Statutes, section 275.71, subdivision 2, is increased by 
173.6   $422,324. 
173.7      Subd. 2.  [TEMPORARY COUNTY AGRICULTURAL AND HOMESTEAD 
173.8   CREDIT AID ADJUSTMENTS.] For aids paid in calendar year 1999 
173.9   only, the county of Goodhue shall receive an additional aid 
173.10  payment of $422,324 under the provisions of Minnesota Statutes, 
173.11  section 273.1398.  For aids paid in calendar years 2000 and 
173.12  2001, the aid paid to the county of Goodhue under section 
173.13  273.1398, subdivision 2, shall be reduced by $211,162.  The 
173.14  additional aid paid in 1999 shall not be included in calculating 
173.15  any limitation on levies or expenditures in calendar year 1999 
173.16  but the reductions in calendar years 2000 and 2001 shall be 
173.17  included in calculating any limitation on levies or expenditures.
173.18     Subd. 3.  [APPROPRIATION.] $422,324 is appropriated in 
173.19  fiscal year 2000 to the commissioner of revenue from the general 
173.20  fund to make the payment under subdivision 2. 
173.21     Subd. 4.  [EFFECTIVE DATE.] Subdivision 1 is effective for 
173.22  taxes levied in 1999 upon compliance with the governing body of 
173.23  the county of Goodhue with Minnesota Statutes, section 645.021, 
173.24  subdivision 3.  Subdivision 2 is effective for aids payable in 
173.25  calendar years 1999 to 2001. 
173.26     Sec. 13.  [CITY OF GRANT; LEVY LIMITS.] 
173.27     Subdivision 1.  [LEVY LIMIT BASE INCREASE.] The levy limit 
173.28  base for the city of Grant for taxes levied in 1999 under 
173.29  Minnesota Statutes, section 275.71, subdivision 2, is increased 
173.30  by an amount equal to the difference between (1) the amount the 
173.31  city would have raised if it had imposed a tax rate equal to 
173.32  one-third of the statewide average city tax effort rate for 
173.33  taxes payable in 1999, as defined in Minnesota Statutes, section 
173.34  477A.011, subdivision 35, on its net tax capacity for taxes 
173.35  payable in 1999, as defined in Minnesota Statutes, section 
173.36  477A.011, subdivision 20; and (2) the amount it levied for taxes 
174.1   payable in 1999. 
174.2      Subd. 2.  [LOCAL APPROVAL; EFFECTIVE DATE.] This section is 
174.3   effective upon compliance by the governing body of the city of 
174.4   Grant with Minnesota Statutes, section 645.021, subdivision 3, 
174.5   for taxes levied in 1999, payable in 2000. 
174.6      Sec. 14.  [NORTH FORK CROW RIVER WATERSHED DISTRICT.] 
174.7      Subdivision 1.  [LEVY AUTHORIZED.] Notwithstanding 
174.8   Minnesota Statutes, section 103D.905, subdivision 3, the North 
174.9   Fork Crow River watershed district may annually levy up to 
174.10  .04836 percent of taxable market value, or $140,000, whichever 
174.11  is less, for its administrative fund. 
174.12     Subd. 2.  [EFFECTIVE DATE.] This section is effective 
174.13  without local approval beginning with taxes levied in 1999, 
174.14  payable in 2000. 
174.15     Sec. 15.  [SAUK RIVER WATERSHED DISTRICT.] 
174.16     Subdivision 1.  [LEVY AUTHORIZED.] Notwithstanding 
174.17  Minnesota Statutes, section 103D.905, subdivision 3, the Sauk 
174.18  river watershed district may annually levy up to $200,000 for 
174.19  its administrative fund for taxes payable in 2000, 2001, 2002, 
174.20  2003, and 2004. 
174.21     Subd. 2.  [EFFECTIVE DATE.] This section is effective the 
174.22  day following final enactment.  
174.23     Sec. 16.  [CITY OF STILLWATER; DIVISION INTO URBAN AND 
174.24  RURAL SERVICE DISTRICTS.] 
174.25     Notwithstanding the provisions of Minnesota Statutes, 
174.26  section 272.67, subdivisions 1 and 6, in order to carry out an 
174.27  orderly annexation agreement entered into for the annexation of 
174.28  a part or all of Stillwater township, the city of Stillwater may 
174.29  divide its area into urban service districts and rural service 
174.30  districts constituting separate taxing districts for the purpose 
174.31  of all municipal property taxes including those levied for the 
174.32  payment of bonds and judgments and interest on them. 
174.33     Sec. 17.  [REPEALER.] 
174.34     Minnesota Statutes 1998, section 473.252, subdivisions 4 
174.35  and 5, are repealed. 
174.36     Sec. 18.  [EFFECTIVE DATE.] 
175.1      Sections 3 to 6 and 10 are effective for taxes levied in 
175.2   1999, and payable in 2000.  Section 7 is effective the day 
175.3   following final enactment for taxes levied in 1999 and 
175.4   thereafter.  Sections 8 and 17 are effective for taxes levied in 
175.5   1999, payable in 2000, and thereafter.  
175.6      The .0015 percent of taxable market value levy described in 
175.7   section 9, paragraph (c), is effective for the cities of Cook 
175.8   and Orr and the counties of St. Louis and Koochiching for 
175.9   affected parts of those counties on January 1, 2000, to be 
175.10  requested in the year 2000, with the first payment to be 
175.11  received in 2001. 
175.12                             ARTICLE 7 
175.13                           SPECIAL TAXES
175.14     Section 1.  Minnesota Statutes 1998, section 60A.19, 
175.15  subdivision 6, is amended to read: 
175.16     Subd. 6.  [RETALIATORY PROVISIONS.] (1) When by the laws of 
175.17  any other state or country any taxes, fines, deposits, 
175.18  penalties, licenses, or fees, other than assessments made by an 
175.19  insurance guaranty association or similar organization, in 
175.20  addition to or in excess of those imposed by the laws of this 
175.21  state upon foreign insurance companies and their agents doing 
175.22  business in this state, other than assessments by an insurance 
175.23  guaranty association or similar organization organized under the 
175.24  laws of this state, are imposed on insurance companies of this 
175.25  state and their agents doing business in that state or country, 
175.26  or when any conditions precedent to the right to do business in 
175.27  that state are imposed by the laws thereof, beyond those imposed 
175.28  upon these foreign companies by the laws of this state, the same 
175.29  taxes, fines, deposits, penalties, licenses, fees, and 
175.30  conditions precedent shall be imposed upon every similar 
175.31  insurance company of that state or country and their agents 
175.32  doing or applying to do business in this state so long as these 
175.33  foreign laws remain in force.  Special purpose obligations or 
175.34  assessments, including assessments by an insurance guaranty 
175.35  association, joint underwriting association or similar 
175.36  organization, or assessments imposed in connection with 
176.1   particular kinds of insurance, are not taxes, licenses, or fees 
176.2   as these terms are used in this section. 
176.3      (2) In the event that a domestic insurance company, after 
176.4   complying with all reasonable laws and rulings of any other 
176.5   state or country, is refused permission by that state or country 
176.6   to transact business therein after the commissioner of commerce 
176.7   of Minnesota has determined that that company is solvent and 
176.8   properly managed and after the commissioner has so certified to 
176.9   the proper authority of that other state or country, then, and 
176.10  in every such case, the commissioner may forthwith suspend or 
176.11  cancel the certificate of authority of every insurance company 
176.12  organized under the laws of that other state or country to the 
176.13  extent that it insures, or seeks to insure, in this state 
176.14  against any of the risks or hazards which that domestic company 
176.15  seeks to insure against in that other state or country.  Without 
176.16  limiting the application of the foregoing provision, it is 
176.17  hereby determined that any law or ruling of any other state or 
176.18  country which prescribes to a Minnesota domestic insurance 
176.19  company the premium rate or rates for life insurance issued or 
176.20  to be issued outside that other state or country shall not be 
176.21  reasonable. 
176.22     (3) This section does not apply to insurance companies 
176.23  organized or domiciled in a state or country, the laws of which 
176.24  do not impose retaliatory taxes, fines, deposits, penalties, 
176.25  licenses, or fees or which grant, on a reciprocal basis, 
176.26  exemptions from retaliatory taxes, fines, deposits, penalties, 
176.27  licenses, or fees to insurance companies domiciled in this state.
176.28     Sec. 2.  Minnesota Statutes 1998, section 296A.16, is 
176.29  amended by adding a subdivision to read: 
176.30     Subd. 4a.  [UNDYED KEROSENE; REFUNDS.] Notwithstanding 
176.31  subdivision 1, the commissioner shall allow a refund of the tax 
176.32  paid on undyed kerosene used exclusively for a purpose other 
176.33  than as fuel for a motor vehicle using the streets and 
176.34  highways.  To obtain a refund, the person making the sale to an 
176.35  end user must meet the Internal Revenue Service requirements for 
176.36  sales from a blocked pump.  A claim for a refund may be filed as 
177.1   provided in this section. 
177.2      Sec. 3.  Minnesota Statutes 1998, section 296A.16, is 
177.3   amended by adding a subdivision to read: 
177.4      Subd. 4b.  [RACING GASOLINE; REFUNDS.] Notwithstanding 
177.5   subdivision 1, the commissioner shall allow a licensed 
177.6   distributor a refund of the tax paid on leaded gasoline of 110 
177.7   octane or more that does not meet ASTM specification D4814 for 
177.8   gasoline and that is sold in bulk for use in nonregistered motor 
177.9   vehicles.  A claim for a refund may be filed as provided for in 
177.10  this section. 
177.11     Sec. 4.  Minnesota Statutes 1998, section 297E.01, is 
177.12  amended by adding a subdivision to read: 
177.13     Subd. 17a.  [BUSINESS DAY.] "Business day" means Monday 
177.14  through Friday, excluding any holidays as defined in section 
177.15  645.44. 
177.16     Sec. 5.  Minnesota Statutes 1998, section 297E.02, 
177.17  subdivision 1, is amended to read: 
177.18     Subdivision 1.  [IMPOSITION.] A tax is imposed on all 
177.19  lawful gambling other than (1) pull-tabs purchased and placed 
177.20  into inventory after January 1, 1987, pull-tab deals or games; 
177.21  and (2) tipboards purchased and placed into inventory after June 
177.22  30, 1988 tipboard deals or games; and (3) items listed in 
177.23  section 297E.01, subdivision 8, clauses (4) and (5), at the rate 
177.24  of 9.5 9 percent on the gross receipts as defined in section 
177.25  297E.01, subdivision 8, less prizes actually paid.  The tax 
177.26  imposed by this subdivision is in lieu of the tax imposed by 
177.27  section 297A.02 and all local taxes and license fees except a 
177.28  fee authorized under section 349.16, subdivision 8, or a tax 
177.29  authorized under subdivision 5.  
177.30     The tax imposed under this subdivision is payable by the 
177.31  organization or party conducting, directly or indirectly, the 
177.32  gambling.  
177.33     Sec. 6.  Minnesota Statutes 1998, section 297E.02, 
177.34  subdivision 3, is amended to read: 
177.35     Subd. 3.  [COLLECTION; DISPOSITION.] Taxes imposed by this 
177.36  section other than in subdivision 4 are due and payable to the 
178.1   commissioner when the gambling tax return is required to be 
178.2   filed.  Taxes imposed by subdivision 4 are due and payable to 
178.3   the commissioner on or before the last business day of the month 
178.4   following the month in which the taxable sale was made.  Returns 
178.5   covering the taxes imposed under this section must be filed with 
178.6   the commissioner on or before the 20th day of the month 
178.7   following the close of the previous calendar month.  The 
178.8   commissioner may require that the returns be filed via magnetic 
178.9   media or electronic data transfer.  The proceeds, along with the 
178.10  revenue received from all license fees and other fees under 
178.11  sections 349.11 to 349.191, 349.211, and 349.213, must be paid 
178.12  to the state treasurer for deposit in the general fund. 
178.13     Sec. 7.  Minnesota Statutes 1998, section 297E.02, 
178.14  subdivision 4, is amended to read: 
178.15     Subd. 4.  [PULL-TAB AND TIPBOARD TAX.] (a) A tax is imposed 
178.16  on the sale of each deal of pull-tabs and tipboards sold by a 
178.17  distributor.  The rate of the tax is 1.9 1.8 percent of the 
178.18  ideal gross of the pull-tab or tipboard deal.  The sales tax 
178.19  imposed by chapter 297A on the sale of the pull-tabs and 
178.20  tipboards by the distributor is imposed on the retail sales 
178.21  price less the tax imposed by this subdivision.  The retail sale 
178.22  of pull-tabs or tipboards by the organization is exempt from 
178.23  taxes imposed by chapter 297A and is exempt from all local taxes 
178.24  and license fees except a fee authorized under section 349.16, 
178.25  subdivision 8.  
178.26     (b) The liability for the tax imposed by this section is 
178.27  incurred when the pull-tabs and tipboards are delivered by the 
178.28  distributor to the customer or to a common or contract carrier 
178.29  for delivery to the customer, or when received by the customer's 
178.30  authorized representative at the distributor's place of 
178.31  business, regardless of the distributor's method of accounting 
178.32  or the terms of the sale.  
178.33     The tax imposed by this subdivision is imposed on all sales 
178.34  of pull-tabs and tipboards, except the following:  
178.35     (1) sales to the governing body of an Indian tribal 
178.36  organization for use on an Indian reservation; 
179.1      (2) sales to distributors licensed under the laws of 
179.2   another state or of a province of Canada, as long as all 
179.3   statutory and regulatory requirements are met in the other state 
179.4   or province; 
179.5      (3) sales of promotional tickets as defined in section 
179.6   349.12; and 
179.7      (4) pull-tabs and tipboards sold to an organization that 
179.8   sells pull-tabs and tipboards under the exemption from licensing 
179.9   in section 349.166, subdivision 2.  A distributor shall require 
179.10  an organization conducting exempt gambling to show proof of its 
179.11  exempt status before making a tax-exempt sale of pull-tabs or 
179.12  tipboards to the organization.  A distributor shall identify, on 
179.13  all reports submitted to the commissioner, all sales of 
179.14  pull-tabs and tipboards that are exempt from tax under this 
179.15  subdivision.  
179.16     (c) A distributor having a liability of $120,000 or more 
179.17  during a fiscal year ending June 30 must remit all liabilities 
179.18  in the subsequent calendar year by a funds transfer as defined 
179.19  in section 336.4A-104, paragraph (a).  The funds transfer 
179.20  payment date, as defined in section 336.4A-401, must be on or 
179.21  before the date the tax is due.  If the date the tax is due is 
179.22  not a funds transfer business day, as defined in section 
179.23  336.4A-105, paragraph (a), clause (4), the payment date must be 
179.24  on or before the funds transfer business day next following the 
179.25  date the tax is due. 
179.26     (d) Any customer who purchases deals of pull-tabs or 
179.27  tipboards from a distributor may file an annual claim for a 
179.28  refund or credit of taxes paid pursuant to this subdivision for 
179.29  unsold pull-tab and tipboard tickets.  The claim must be filed 
179.30  with the commissioner on a form prescribed by the commissioner 
179.31  by March 20 of the year following the calendar year for which 
179.32  the refund is claimed.  The refund must be filed as part of the 
179.33  customer's February monthly return.  The refund or credit is 
179.34  equal to 1.9 1.8 percent of the face value of the unsold 
179.35  pull-tab or tipboard tickets, provided that the refund or credit 
179.36  will be 1.95 1.85 percent of the face value of the unsold 
180.1   pull-tab or tipboard tickets for claims for a refund or credit 
180.2   of taxes filed on the February 1999 2000 monthly return.  The 
180.3   refund claimed will be applied as a credit against tax owing 
180.4   under this chapter on the February monthly return.  If the 
180.5   refund claimed exceeds the tax owing on the February monthly 
180.6   return, that amount will be refunded.  The amount refunded will 
180.7   bear interest pursuant to section 270.76 from 90 days after the 
180.8   claim is filed.  
180.9      Sec. 8.  Minnesota Statutes 1998, section 297E.02, 
180.10  subdivision 6, is amended to read: 
180.11     Subd. 6.  [COMBINED RECEIPTS TAX.] In addition to the taxes 
180.12  imposed under subdivisions 1 and 4, a tax is imposed on the 
180.13  combined receipts of the organization.  As used in this section, 
180.14  "combined receipts" is the sum of the organization's gross 
180.15  receipts from lawful gambling less gross receipts directly 
180.16  derived from the conduct of bingo, raffles, and paddlewheels, as 
180.17  defined in section 297E.01, subdivision 8, for the fiscal year.  
180.18  The combined receipts of an organization are subject to a tax 
180.19  computed according to the following schedule: 
180.20     If the combined receipts for the          The tax is:
180.21     fiscal year are:
180.22     Not over $500,000                   zero
180.23     Over $500,000, but not over
180.24     $700,000                            1.9 1.8 percent of the 
180.25                                         amount over $500,000, but 
180.26                                         not over $700,000
180.27     Over $700,000, but not over
180.28     $900,000                            $3,800 $3,600 plus 3.8 
180.29                                         3.6 percent of the amount 
180.30                                         over $700,000, but 
180.31                                         not over $900,000
180.32     Over $900,000                       $11,400 $10,800 plus 5.7 
180.33                                         5.4 percent of the
180.34                                         amount over $900,000
180.35     Sec. 9.  Minnesota Statutes 1998, section 297F.01, 
180.36  subdivision 23, is amended to read: 
181.1      Subd. 23.  [WHOLESALE PRICE.] "Wholesale price" means the 
181.2   established price for which a manufacturer or person sells a 
181.3   tobacco product to a distributor, exclusive of any discount or 
181.4   other reduction. 
181.5      Sec. 10.  Minnesota Statutes 1998, section 297F.17, 
181.6   subdivision 6, is amended to read: 
181.7      Subd. 6.  [TIME LIMIT FOR BAD DEBT DEDUCTION REFUND.] 
181.8   Claims for refund must be filed with the commissioner within one 
181.9   year of during the one-year period beginning with the timely 
181.10  filing date of the taxpayer's federal income tax return 
181.11  containing the bad debt deduction that is being claimed.  
181.12  Claimants under this subdivision are subject to the notice 
181.13  requirements of section 289A.38, subdivision 7. 
181.14     Sec. 11.  Minnesota Statutes 1998, section 297H.05, is 
181.15  amended to read: 
181.16     297H.05 [SELF-HAULERS.] 
181.17     (a) A self-hauler of mixed municipal solid waste shall pay 
181.18  the tax to the operator of the waste management facility to 
181.19  which the waste is delivered at the rate imposed under section 
181.20  297H.03, based on the sales price of the waste management 
181.21  services. 
181.22     (b) A self-hauler of non-mixed-municipal solid waste shall 
181.23  pay the tax to the operator of the waste management facility to 
181.24  which the waste is delivered at the rate imposed under section 
181.25  297H.04. 
181.26     (c) The tax imposed on the self-hauler of 
181.27  non-mixed-municipal solid waste may be based either on the 
181.28  capacity of the container, the actual volume, or the 
181.29  weight-to-volume conversion schedule in paragraph (d).  However, 
181.30  the tax must be calculated by the operator using the same method 
181.31  for calculating the tipping fee so that both are calculated 
181.32  according to container capacity, actual volume, or weight. 
181.33     (d) The weight-to-volume conversion schedule for: 
181.34     (1) construction debris as defined in section 115A.03, 
181.35  subdivision 7, is one ton equals 3.33 cubic yards, or $2 per 
181.36  ton; 
182.1      (2) industrial waste as defined in section 115A.03, 
182.2   subdivision 13a, is equal to 60 cents per cubic yard.  The 
182.3   commissioner of revenue, after consultation with the 
182.4   commissioner of the pollution control agency, shall determine, 
182.5   and may publish by notice, a conversion schedule for various 
182.6   industrial wastes; and 
182.7      (3) infectious waste as defined in section 116.76, 
182.8   subdivision 12, and pathological waste as defined in section 
182.9   116.76, subdivision 14, is 150 pounds equals one cubic yard, or 
182.10  60 cents per 150 pounds. 
182.11     (e) For mixed municipal solid waste the tax is imposed upon 
182.12  the difference between the market price and the tip fee at a 
182.13  processing or disposal facility if the tip fee is less than the 
182.14  market price and the political subdivision subsidizes the cost 
182.15  of service at the facility.  The political subdivision is liable 
182.16  for the tax. 
182.17     Sec. 12.  Minnesota Statutes 1998, section 297H.06, 
182.18  subdivision 2, is amended to read: 
182.19     Subd. 2.  [MATERIALS.] The tax is not imposed upon charges 
182.20  to generators of mixed municipal solid waste or upon the volume 
182.21  of non-mixed-municipal solid waste for waste management services 
182.22  to manage the following materials: 
182.23     (1) mixed municipal solid waste and non-mixed-municipal 
182.24  solid waste generated outside of Minnesota; 
182.25     (2) recyclable materials that are separated for recycling 
182.26  by the generator, collected separately from other waste, and 
182.27  recycled, to the extent the price of the service for handling 
182.28  recyclable material is separately itemized; 
182.29     (3) recyclable non-mixed-municipal solid waste that is 
182.30  separated for recycling by the generator, collected separately 
182.31  from other waste, delivered to a waste facility for the purpose 
182.32  of recycling, and recycled; 
182.33     (4) industrial waste, when it is transported to a facility 
182.34  owned and operated by the same person that generated it; 
182.35     (5) mixed municipal solid waste from a recycling facility 
182.36  that separates or processes recyclable materials and reduces the 
183.1   volume of the waste by at least 85 percent, provided that the 
183.2   exempted waste is managed separately from other waste; 
183.3      (6) recyclable materials that are separated from mixed 
183.4   municipal solid waste by the generator, collected and delivered 
183.5   to a waste facility that recycles at least 85 percent of its 
183.6   waste, and are collected with mixed municipal solid waste that 
183.7   is segregated in leakproof bags, provided that the mixed 
183.8   municipal solid waste does not exceed five percent of the total 
183.9   weight of the materials delivered to the facility and is 
183.10  ultimately delivered to a waste facility identified as a 
183.11  preferred waste management facility in county solid waste plans 
183.12  under section 115A.46; 
183.13     (7) through December 31, 2002, source-separated compostable 
183.14  waste, if the waste is delivered to a facility exempted as 
183.15  described in this clause.  To initially qualify for an 
183.16  exemption, a facility must apply for an exemption in its 
183.17  application for a new or amended solid waste permit to the 
183.18  pollution control agency.  The first time a facility applies to 
183.19  the agency it must certify in its application that it will 
183.20  comply with the criteria in items (i) to (v) and the 
183.21  commissioner of the agency shall so certify to the commissioner 
183.22  of revenue who must grant the exemption.  For each subsequent 
183.23  calendar year, by October 1 of the preceding year, the facility 
183.24  must apply to the agency for certification to renew its 
183.25  exemption for the following year.  The application must be filed 
183.26  according to the procedures of, and contain the information 
183.27  required by, the agency.  The commissioner of revenue shall 
183.28  grant the exemption if the commissioner of the pollution control 
183.29  agency finds and certifies to the commissioner of revenue that 
183.30  based on an evaluation of the composition of incoming waste and 
183.31  residuals and the quality and use of the product: 
183.32     (i) generators separate materials at the source; 
183.33     (ii) the separation is performed in a manner appropriate to 
183.34  the technology specific to the facility that: 
183.35     (A) maximizes the quality of the product; 
183.36     (B) minimizes the toxicity and quantity of residuals; and 
184.1      (C) provides an opportunity for significant improvement in 
184.2   the environmental efficiency of the operation; 
184.3      (iii) the operator of the facility educates generators, in 
184.4   coordination with each county using the facility, about 
184.5   separating the waste to maximize the quality of the waste stream 
184.6   for technology specific to the facility; 
184.7      (iv) process residuals do not exceed 15 percent of the 
184.8   weight of the total material delivered to the facility; and 
184.9      (v) the final product is accepted for use; and 
184.10     (8) waste and waste by-products for which the tax has been 
184.11  paid; and 
184.12     (9) daily cover for landfills that has been approved in 
184.13  writing by the Minnesota pollution control agency.  
184.14     Sec. 13.  [EFFECTIVE DATES.] 
184.15     Section 1 is effective for taxable years beginning after 
184.16  December 31, 1999.  Section 2 is effective retroactively for 
184.17  sales made after June 30, 1998.  Section 3 is effective 
184.18  retroactively for sales made after January 31, 1999.  Section 4 
184.19  is effective August 1, 1999.  Sections 5, 7, and 8 are effective 
184.20  July 1, 1999.  Section 6 is effective for taxes first becoming 
184.21  due on or after August 1, 1999.  Sections 9 and 12 are effective 
184.22  the day following final enactment.  Section 10 is effective for 
184.23  refund claims filed on or after July 1, 1999.  Section 11 is 
184.24  effective for services provided on or after July 1, 1999. 
184.25                             ARTICLE 8 
184.26                        MINNESOTACARE TAXES 
184.27     Section 1.  Minnesota Statutes 1998, section 295.50, 
184.28  subdivision 4, is amended to read: 
184.29     Subd. 4.  [HEALTH CARE PROVIDER.] (a) "Health care 
184.30  provider" means: 
184.31     (1) a person whose health care occupation is regulated or 
184.32  required to be regulated by the state of Minnesota furnishing 
184.33  any or all of the following goods or services directly to a 
184.34  patient or consumer:  medical, surgical, optical, visual, 
184.35  dental, hearing, nursing services, drugs, laboratory, diagnostic 
184.36  or therapeutic services; 
185.1      (2) a person who provides goods and services not listed in 
185.2   clause (1) that qualify for reimbursement under the medical 
185.3   assistance program provided under chapter 256B; 
185.4      (3) a staff model health plan company; 
185.5      (4) an ambulance service required to be licensed; or 
185.6      (5) a person who sells or repairs hearing aids and related 
185.7   equipment or prescription eyewear. 
185.8      (b) Health care provider does not include:  (1) hospitals; 
185.9   medical supplies distributors, except as specified under 
185.10  paragraph (a), clause (5); nursing homes licensed under chapter 
185.11  144A or licensed in any other jurisdiction; pharmacies; surgical 
185.12  centers; bus and taxicab transportation, or any other providers 
185.13  of transportation services other than ambulance services 
185.14  required to be licensed; supervised living facilities for 
185.15  persons with mental retardation or related conditions, licensed 
185.16  under Minnesota Rules, parts 4665.0100 to 4665.9900; residential 
185.17  care homes licensed under chapter 144B; board and lodging 
185.18  establishments providing only custodial services that are 
185.19  licensed under chapter 157 and registered under section 157.17 
185.20  to provide supportive services or health supervision services; 
185.21  adult foster homes as defined in Minnesota Rules, part 
185.22  9555.5105; day training and habilitation services for adults 
185.23  with mental retardation and related conditions as defined in 
185.24  section 252.41, subdivision 3; and boarding care homes, as 
185.25  defined in Minnesota Rules, part 4655.0100.; 
185.26     (c) For purposes of this subdivision, "directly to a 
185.27  patient or consumer" includes goods and services provided in 
185.28  connection with independent medical examinations under section 
185.29  65B.56 or other examinations for purposes of litigation or 
185.30  insurance claims. 
185.31     (2) home health agencies as defined in Minnesota Rules, 
185.32  part 9505.0175, subpart 15; a person providing personal care 
185.33  services and supervision of personal care services as defined in 
185.34  Minnesota Rules, part 9505.0335; a person providing private duty 
185.35  nursing services as defined in Minnesota Rules, part 9505.0360; 
185.36  and home care providers required to be licensed under chapter 
186.1   144A; 
186.2      (3) a person who employs health care providers solely for 
186.3   the purpose of providing patient services to its employees; and 
186.4      (4) an educational institution that employs health care 
186.5   providers solely for the purpose of providing patient services 
186.6   to its students if the institution does not receive fee for 
186.7   service payments or payments for extended coverage. 
186.8      Sec. 2.  Minnesota Statutes 1998, section 295.52, 
186.9   subdivision 7, is amended to read: 
186.10     Subd. 7.  [TAX REDUCTION.] (a) Notwithstanding subdivisions 
186.11  1, 1a, 2, 3, and 4, the tax imposed under this section equals 
186.12  for calendar years 1998 and, 1999 shall be equal to, 2000, and 
186.13  2001, 1.5 percent of the gross revenues received on or after 
186.14  January 1, 1998, and before January 1, 2000.  The commissioner 
186.15  shall extend the reduced tax rate of 1.5 percent for gross 
186.16  revenues received on or after January 1, 2000, and before 
186.17  January 1, 2002, if the commissioner of finance determines that 
186.18  the health care access fund structural balance projected for 
186.19  fiscal year 2001 will remain positive, prior to any increase of 
186.20  the one percent premium tax under section 60A.15, subdivision 1, 
186.21  paragraph (h), and prior to any tax expenditures related to the 
186.22  increase in the maximum tax credit for research expenses under 
186.23  section 295.53, subdivision 4a, as amended by Laws 1997, chapter 
186.24  225 2002. 
186.25     Sec. 3.  Minnesota Statutes 1998, section 295.53, 
186.26  subdivision 1, is amended to read: 
186.27     Subdivision 1.  [EXEMPTIONS.] (a) The following payments 
186.28  are excluded from the gross revenues subject to the hospital, 
186.29  surgical center, or health care provider taxes under sections 
186.30  295.50 to 295.57: 
186.31     (1) payments received for services provided under the 
186.32  Medicare program, including payments received from the 
186.33  government, and organizations governed by sections 1833 and 1876 
186.34  of title XVIII of the federal Social Security Act, United States 
186.35  Code, title 42, section 1395, and enrollee deductibles, 
186.36  coinsurance, and copayments, whether paid by the Medicare 
187.1   enrollee or by a Medicare supplemental coverage as defined in 
187.2   section 62A.011, subdivision 3, clause (10).  Payments for 
187.3   services not covered by Medicare are taxable; 
187.4      (2) medical assistance payments including payments received 
187.5   directly from the government or from a prepaid plan; 
187.6      (3) payments received for home health care services; 
187.7      (4) payments received from hospitals or surgical centers 
187.8   for goods and services on which liability for tax is imposed 
187.9   under section 295.52 or the source of funds for the payment is 
187.10  exempt under clause (1), (2), (7), (8), or (10), or (13); 
187.11     (5) payments received from health care providers for goods 
187.12  and services on which liability for tax is imposed under this 
187.13  chapter or the source of funds for the payment is exempt under 
187.14  clause (1), (2), (7), (8), or (10), or (13); 
187.15     (6) amounts paid for legend drugs, other than nutritional 
187.16  products, to a wholesale drug distributor who is subject to tax 
187.17  under section 295.52, subdivision 3, reduced by reimbursements 
187.18  received for legend drugs under clauses (1), (2), (7), and (8); 
187.19     (7) payments received under the general assistance medical 
187.20  care program including payments received directly from the 
187.21  government or from a prepaid plan; 
187.22     (8) payments received for providing services under the 
187.23  MinnesotaCare program including payments received directly from 
187.24  the government or from a prepaid plan and enrollee deductibles, 
187.25  coinsurance, and copayments.  For purposes of this clause, 
187.26  coinsurance means the portion of payment that the enrollee is 
187.27  required to pay for the covered service; 
187.28     (9) payments received by a health care provider or the 
187.29  wholly owned subsidiary of a health care provider for care 
187.30  provided outside Minnesota to a patient who is not domiciled in 
187.31  Minnesota; 
187.32     (10) payments received from the chemical dependency fund 
187.33  under chapter 254B; 
187.34     (11) payments received in the nature of charitable 
187.35  donations that are not designated for providing patient services 
187.36  to a specific individual or group; 
188.1      (12) payments received for providing patient services 
188.2   incurred through a formal program of health care research 
188.3   conducted in conformity with federal regulations governing 
188.4   research on human subjects.  Payments received from patients or 
188.5   from other persons paying on behalf of the patients are subject 
188.6   to tax; 
188.7      (13) payments received from any governmental agency for 
188.8   services benefiting the public, not including payments made by 
188.9   the government in its capacity as an employer or insurer; 
188.10     (14) payments received for services provided by community 
188.11  residential mental health facilities licensed under Minnesota 
188.12  Rules, parts 9520.0500 to 9520.0690, community support programs 
188.13  and family community support programs approved under Minnesota 
188.14  Rules, parts 9535.1700 to 9535.1760, and community mental health 
188.15  centers as defined in section 245.62, subdivision 2; 
188.16     (15) government payments received by a regional treatment 
188.17  center; 
188.18     (16) payments received for hospice care services; 
188.19     (17) payments received by a health care provider for 
188.20  hearing aids and related equipment or prescription eyewear 
188.21  delivered outside of Minnesota; 
188.22     (18) payments received by a post-secondary an educational 
188.23  institution from student tuition, student activity fees, health 
188.24  care service fees, government appropriations, donations, or 
188.25  grants.  Fee for service payments and payments for extended 
188.26  coverage are taxable; and 
188.27     (19) payments received for services provided by:  assisted 
188.28  living programs and congregate housing programs; 
188.29     (20) payments received from nursing homes licensed under 
188.30  chapter 144A for services provided to a nursing home; and 
188.31     (21) payments received for examinations for purposes of 
188.32  utilization reviews, insurance claims or eligibility, 
188.33  litigation, and employment, including reviews of medical records 
188.34  for those purposes. 
188.35     (b) Payments received by wholesale drug distributors for 
188.36  legend drugs sold directly to veterinarians or veterinary bulk 
189.1   purchasing organizations are excluded from the gross revenues 
189.2   subject to the wholesale drug distributor tax under sections 
189.3   295.50 to 295.59. 
189.4      Sec. 4.  Minnesota Statutes 1998, section 295.55, 
189.5   subdivision 2, is amended to read: 
189.6      Subd. 2.  [ESTIMATED TAX; HOSPITALS; SURGICAL CENTERS.] (a) 
189.7   Each hospital or surgical center must make estimated payments of 
189.8   the taxes for the calendar year in monthly installments to the 
189.9   commissioner within 15 days after the end of the month. 
189.10     (b) Estimated tax payments are not required of hospitals or 
189.11  surgical centers if:  (1) the tax for the current calendar year 
189.12  is less than $500; or (2) the tax for the previous calendar year 
189.13  is less than $500, if the taxpayer had a tax liability and was 
189.14  doing business the entire year; or (3) if a hospital has been 
189.15  allowed a grant under section 144.1484, subdivision 2, for the 
189.16  year. 
189.17     (c) Underpayment of estimated installments bear interest at 
189.18  the rate specified in section 270.75, from the due date of the 
189.19  payment until paid or until the due date of the annual return at 
189.20  the rate specified in section 270.75 whichever comes first.  An 
189.21  underpayment of an estimated installment is the difference 
189.22  between the amount paid and the lesser of (1) 90 percent of 
189.23  one-twelfth of the tax for the calendar year or (2) one-twelfth 
189.24  of the total tax for the actual gross revenues received during 
189.25  the month previous calendar year if the taxpayer had a tax 
189.26  liability and was doing business the entire year. 
189.27     Sec. 5.  Minnesota Statutes 1998, section 295.55, 
189.28  subdivision 3, is amended to read: 
189.29     Subd. 3.  [ESTIMATED TAX; OTHER TAXPAYERS.] (a) Each 
189.30  taxpayer, other than a hospital or surgical center, must make 
189.31  estimated payments of the taxes for the calendar year in 
189.32  quarterly installments to the commissioner by April 15, July 15, 
189.33  October 15, and January 15 of the following calendar year. 
189.34     (b) Estimated tax payments are not required if:  (1) the 
189.35  tax for the current calendar year is less than $500; or (2) the 
189.36  tax for the previous calendar year is less than $500, if the 
190.1   taxpayer had a tax liability and was doing business the entire 
190.2   year. 
190.3      (c) Underpayment of estimated installments bear interest at 
190.4   the rate specified in section 270.75, from the due date of the 
190.5   payment until paid or until the due date of the annual return at 
190.6   the rate specified in section 270.75 whichever comes first.  An 
190.7   underpayment of an estimated installment is the difference 
190.8   between the amount paid and the lesser of (1) 90 percent of 
190.9   one-quarter of the tax for the calendar year or (2) one-quarter 
190.10  of the total tax for the actual gross revenues received during 
190.11  the quarter previous calendar year if the taxpayer had a tax 
190.12  liability and was doing business the entire year. 
190.13     Sec. 6.  Minnesota Statutes 1998, section 295.57, is 
190.14  amended by adding a subdivision to read: 
190.15     Subd. 4.  [SAMPLING TECHNIQUES.] The commissioner may use 
190.16  statistical or other sampling techniques consistent with 
190.17  generally accepted auditing standards in examining returns or 
190.18  records and making assessments. 
190.19     Sec. 7.  [HEALTH CARE ACCESS FUND TRANSFER.] 
190.20     $27,000,000 is appropriated for fiscal year 2000; 
190.21  $27,000,000 is appropriated for fiscal year 2001; and 
190.22  $30,900,000 is appropriated for fiscal year 2002 from the 
190.23  general fund to the commissioner of finance for deposit in the 
190.24  health care access fund under Minnesota Statutes, section 
190.25  16A.724. 
190.26     Sec. 8.  [EFFECTIVE DATE.] 
190.27     The provisions of section 1, striking paragraph (c), and 
190.28  section 3, clause (21), are effective for services provided 
190.29  after December 31, 1998.  The rest of section 1, the rest of 
190.30  section 3 and sections 4 and 5 are effective for payments 
190.31  received on or after January 1, 2000.  Section 6 is effective 
190.32  the day following final enactment. 
190.33                             ARTICLE 9 
190.34                         TACONITE TAXATION 
190.35     Section 1.  Minnesota Statutes 1998, section 298.24, 
190.36  subdivision 1, is amended to read: 
191.1      Subdivision 1.  (a) For concentrate produced in 1997 and 
191.2   1998 1999, there is imposed upon taconite and iron sulphides, 
191.3   and upon the mining and quarrying thereof, and upon the 
191.4   production of iron ore concentrate therefrom, and upon the 
191.5   concentrate so produced, a tax of $2.141 per gross ton of 
191.6   merchantable iron ore concentrate produced therefrom.  
191.7      (b) For concentrates produced in 1999 2000 and subsequent 
191.8   years, the tax rate shall be equal to the preceding year's tax 
191.9   rate plus an amount equal to the preceding year's tax rate 
191.10  multiplied by the percentage increase in the implicit price 
191.11  deflator from the fourth quarter of the second preceding year to 
191.12  the fourth quarter of the preceding year.  "Implicit price 
191.13  deflator" for the gross national product means the implicit 
191.14  price deflator prepared by the bureau of economic analysis of 
191.15  the United States Department of Commerce.  
191.16     (c) On concentrates produced in 1997 and thereafter, an 
191.17  additional tax is imposed equal to three cents per gross ton of 
191.18  merchantable iron ore concentrate for each one percent that the 
191.19  iron content of the product exceeds 72 percent, when dried at 
191.20  212 degrees Fahrenheit. 
191.21     (d) The tax shall be imposed on the average of the 
191.22  production for the current year and the previous two years.  The 
191.23  rate of the tax imposed will be the current year's tax rate.  
191.24  This clause shall not apply in the case of the closing of a 
191.25  taconite facility if the property taxes on the facility would be 
191.26  higher if this clause and section 298.25 were not applicable.  
191.27     (e) If the tax or any part of the tax imposed by this 
191.28  subdivision is held to be unconstitutional, a tax of $2.141 per 
191.29  gross ton of merchantable iron ore concentrate produced shall be 
191.30  imposed.  
191.31     (f) Consistent with the intent of this subdivision to 
191.32  impose a tax based upon the weight of merchantable iron ore 
191.33  concentrate, the commissioner of revenue may indirectly 
191.34  determine the weight of merchantable iron ore concentrate 
191.35  included in fluxed pellets by subtracting the weight of the 
191.36  limestone, dolomite, or olivine derivatives or other basic flux 
192.1   additives included in the pellets from the weight of the 
192.2   pellets.  For purposes of this paragraph, "fluxed pellets" are 
192.3   pellets produced in a process in which limestone, dolomite, 
192.4   olivine, or other basic flux additives are combined with 
192.5   merchantable iron ore concentrate.  No subtraction from the 
192.6   weight of the pellets shall be allowed for binders, mineral and 
192.7   chemical additives other than basic flux additives, or moisture. 
192.8      (g)(1) Notwithstanding any other provision of this 
192.9   subdivision, for the first two years of a plant's production of 
192.10  direct reduced ore, no tax is imposed under this section.  As 
192.11  used in this paragraph, "direct reduced ore" is ore that results 
192.12  in a product that has an iron content of at least 75 percent.  
192.13  For the third year of a plant's production of direct reduced 
192.14  ore, the rate to be applied to direct reduced ore is 25 percent 
192.15  of the rate otherwise determined under this subdivision.  For 
192.16  the fourth such production year, the rate is 50 percent of the 
192.17  rate otherwise determined under this subdivision; for the fifth 
192.18  such production year, the rate is 75 percent of the rate 
192.19  otherwise determined under this subdivision; and for all 
192.20  subsequent production years, the full rate is imposed. 
192.21     (2) Subject to clause (1), production of direct reduced ore 
192.22  in this state is subject to the tax imposed by this section, but 
192.23  if that production is not produced by a producer of taconite or 
192.24  iron sulfides, the production of taconite or iron sulfides 
192.25  consumed in the production of direct reduced iron in this state 
192.26  is not subject to the tax imposed by this section on taconite or 
192.27  iron sulfides. 
192.28     Sec. 2.  Minnesota Statutes 1998, section 298.28, 
192.29  subdivision 9a, is amended to read: 
192.30     Subd. 9a.  [TACONITE ECONOMIC DEVELOPMENT FUND.] (a) 15.4 
192.31  cents per ton for distributions in 1996, 1998, 1999, and 2000 
192.32  and 20.4 cents per ton for distributions in 1997 shall, 2001, 
192.33  and 2002 must be paid to the taconite economic development 
192.34  fund.  No distribution shall be made under this paragraph in any 
192.35  year in which total industry production falls below 30 million 
192.36  tons. 
193.1      (b) An amount equal to 50 percent of the tax under section 
193.2   298.24 for concentrate sold in the form of pellet chips and 
193.3   fines not exceeding 5/16 inch in size and not including crushed 
193.4   pellets shall be paid to the taconite economic development 
193.5   fund.  The amount paid shall not exceed $700,000 annually for 
193.6   all companies.  If the initial amount to be paid to the fund 
193.7   exceeds this amount, each company's payment shall be prorated so 
193.8   the total does not exceed $700,000. 
193.9      Sec. 3.  Minnesota Statutes 1998, section 298.28, 
193.10  subdivision 9b, is amended to read: 
193.11     Subd. 9b.  [TACONITE ENVIRONMENTAL FUND.] Five cents per 
193.12  ton for distributions in 1998, 1999, and 2000 shall, 2001, and 
193.13  2002 must be paid to the taconite environmental fund for use 
193.14  under section 298.2961.  No distribution may be made under this 
193.15  paragraph in any year in which total industry production falls 
193.16  below 30,000,000 tons. 
193.17     Sec. 4.  Minnesota Statutes 1998, section 298.296, 
193.18  subdivision 4, is amended to read: 
193.19     Subd. 4.  [TEMPORARY LOAN AUTHORITY.] (a) The board may 
193.20  recommend that up to $7,500,000 from the corpus of the trust may 
193.21  be used for loans, grants, or equity investments as provided in 
193.22  this subdivision.  The money would be available for loans for 
193.23  construction and equipping of facilities constituting (1) a 
193.24  value added iron products plant, which may be either a new plant 
193.25  or a facility incorporated into an existing plant that produces 
193.26  iron upgraded to a minimum of 75 percent iron content or any 
193.27  iron alloy with a total minimum metallic content of 90 percent; 
193.28  or (2) a new mine or minerals processing plant for any mineral 
193.29  subject to the net proceeds tax imposed under section 298.015.  
193.30  A loan under this paragraph may not exceed $5,000,000 for any 
193.31  facility.  
193.32     (b) Additionally, the board must reserve the first 
193.33  $2,000,000 of the net interest, dividends, and earnings arising 
193.34  from the investment of the trust after June 30, 1996, to be used 
193.35  for additional grants for the purposes set forth in paragraph 
193.36  (a).  This amount must be reserved until it is used for the 
194.1   grants or until June 30, 1999, whichever is earlier. 
194.2      (c) Additionally, the board may recommend that up to 
194.3   $5,500,000 from the corpus of the trust may be used for 
194.4   additional grants for the purposes set forth in paragraph (a). 
194.5      (d) The board may require that it receive an equity 
194.6   percentage in any project to which it contributes under this 
194.7   section. 
194.8      (e) The authority to make loans and grants under this 
194.9   subdivision terminates June 30, 1999. 
194.10     Sec. 5.  [MINNESOTA MINERALS 21ST CENTURY FUND 
194.11  APPROPRIATION.] 
194.12     Subdivision 1.  [APPROPRIATION.] $20,000,000 is 
194.13  appropriated in fiscal year 2000 from the general fund to the 
194.14  Minnesota minerals 21st century fund, if a bill styled as H.F. 
194.15  No. 2390 is enacted in 1999 and creates such a fund.  
194.16  Notwithstanding any other law enacted during the 1999 regular 
194.17  legislative session, the maximum total appropriation authorized 
194.18  for the purposes of the Minnesota minerals 21st century fund 
194.19  under all laws enacted during the 1999 regular legislative 
194.20  session is $20,000,000.  Any amounts appropriated in any other 
194.21  law enacted during the 1999 legislative session that would cause 
194.22  the appropriation to exceed $20,000,000 are canceled.  This 
194.23  limitation does not apply to the appropriation transfer 
194.24  contained in 1999 H.F. No. 2390, article 2, section 71. 
194.25     Subd. 2.  [MATCHING REQUIREMENT.] If a bill styled as H.F. 
194.26  No. 2390 is enacted in 1999 and it provides for creation of the 
194.27  Minnesota minerals 21st century fund, the commissioner of the 
194.28  iron range resources and rehabilitation board shall, upon the 
194.29  recommendation of the board, match the funds allocated under 
194.30  subdivision 1 to the extent they are used for a loan or equity 
194.31  investment meeting the requirements of the provision creating 
194.32  the Minnesota minerals 21st century fund within H.F. No. 2390.  
194.33  Notwithstanding Minnesota Statutes, section 645.33, this 
194.34  subdivision supersedes any contrary provisions of H.F. No. 2390 
194.35  that is enacted in 1999. 
194.36                             ARTICLE 10 
195.1                       TAX INCREMENT FINANCING 
195.2      Section 1.  Minnesota Statutes 1998, section 273.1399, 
195.3   subdivision 6, is amended to read: 
195.4      Subd. 6.  [EXEMPT DISTRICTS.] (a) The provisions of this 
195.5   section do not apply to exempt tax increment financing districts 
195.6   as specified by this subdivision. 
195.7      (b) A tax increment financing district for an ethanol 
195.8   production facility that satisfies all of the following 
195.9   requirements is exempt: 
195.10     (1) The district is an economic development district, that 
195.11  qualifies under section 469.176, subdivision 4c, paragraph (a), 
195.12  clause (1). 
195.13     (2) The facility is certified by the commissioner of 
195.14  agriculture to qualify for state payments for ethanol 
195.15  development under section 41A.09 to the extent funds are 
195.16  available. 
195.17     (3) Increments from the district are used only to finance 
195.18  the qualifying ethanol development project located in the 
195.19  district or to pay for administrative costs of the district. 
195.20     (4) The district is located outside of the seven-county 
195.21  metropolitan area, as defined in section 473.121. 
195.22     (5) The tax increment financing plan was approved by a 
195.23  resolution of the county board. 
195.24     (6) The exemption provided by this paragraph applies until 
195.25  the first year after the total amount of increment for the 
195.26  district exceeds $1,500,000.  The county auditor shall notify 
195.27  the commissioner of revenue of the expiration of the exemption 
195.28  by June 1 of the year in which the auditor projects the revenues 
195.29  from increments will exceed $1,500,000.  On or before the 
195.30  expiration of the exemption, the municipality may elect to make 
195.31  a qualifying local contribution under paragraph (d) in lieu of 
195.32  the state aid reduction. 
195.33     (c) A qualified housing district is exempt. 
195.34     (d)(1) A district is exempt if the municipality elects at 
195.35  the time of approving the tax increment financing plan for the 
195.36  district to make a qualifying local contribution.  To qualify 
196.1   for the exemption in each year, the authority or the 
196.2   municipality must make a qualifying local contribution equal to 
196.3   the listed percentages of increment from the district or 
196.4   subdistrict: 
196.5      (A) for an economic development district, a housing 
196.6   district, or a renewal and renovation district, ten percent; 
196.7      (B) for a redevelopment district, a housing district, a 
196.8   mined underground space district, a hazardous substance 
196.9   subdistrict, or a soils condition district, five percent. 
196.10     (2) If the municipality elects to make a qualifying 
196.11  contribution and fails to make the required contribution for a 
196.12  year, the state aid reduction applies for the year.  The state 
196.13  aid reduction equals the greater of (A) the required local 
196.14  contribution or (B) the amount of the aid reduction that applies 
196.15  under subdivision 3.  For a district exempt under paragraph (b), 
196.16  no qualifying local contribution is required for years in which 
196.17  the district is exempt. 
196.18     (3)(A) If the sum of required local contributions for all 
196.19  districts in the municipality exceeds two percent of city net 
196.20  tax capacity as defined in section 477A.011, subdivision 20, for 
196.21  a year, the municipality's total required local contribution for 
196.22  that year is limited to two percent of net tax capacity to 
196.23  qualify for the exemption under this subdivision.  The 
196.24  municipality may allocate the contribution among the districts 
196.25  on which it has made elections as it determines appropriate. 
196.26     (B) If a municipality makes an election under this 
196.27  subdivision for a district in a year in which item (A) applies, 
196.28  a minimum annual qualifying contribution must be made for the 
196.29  district equal to the lesser of 0.25 percent of city net tax 
196.30  capacity or three percent of increment revenues.  This minimum 
196.31  contribution applies for the life of the district for each year 
196.32  that the restriction in item (A) applies and is in addition to 
196.33  the contribution required by item (A). 
196.34     (4) The amount of the local contribution must be made out 
196.35  of unrestricted money of the authority or municipality, such as 
196.36  the general fund, a property tax levy, or a federal or a state 
197.1   grant-in-aid which may be spent for general government 
197.2   purposes.  The local contribution may not be made, directly or 
197.3   indirectly, with tax increments or developer payments as defined 
197.4   under section 469.1766.  The local contribution must be used to 
197.5   pay project costs and cannot be used for general government 
197.6   purposes or for improvements or costs that the authority or 
197.7   municipality planned to incur absent the project.  The authority 
197.8   or municipality may request contributions from other local 
197.9   government entities that will benefit from the district's 
197.10  activities.  These contributions reduce the local contribution 
197.11  required of the municipality or authority by this paragraph.  
197.12  Cities, counties, towns, and schools may contribute to paying 
197.13  these costs, notwithstanding any other law to the contrary. 
197.14     (5) The municipality may make a local contribution in 
197.15  excess of the required contribution for a year.  If it does so, 
197.16  the municipality may credit the excess to a local contribution 
197.17  account for the district.  The balance in the account may be 
197.18  used to meet the requirements for qualifying local contributions 
197.19  for later years.  No interest or investment earnings may be 
197.20  credited or imputed to the account, except those (A) actually 
197.21  paid by the municipality out of its unrestricted funds or by 
197.22  another person or entity, other than a developer as used in 
197.23  section 469.1766, and (B) used as required for a qualifying 
197.24  local contribution. 
197.25     (6) If the state contributes to the project costs through a 
197.26  direct grant or similar incentive, the required local 
197.27  contribution is reduced by one-half of the dollar amount of the 
197.28  state grant or other similar incentive. 
197.29     Sec. 2.  Minnesota Statutes 1998, section 469.176, 
197.30  subdivision 4g, is amended to read: 
197.31     Subd. 4g.  [GENERAL GOVERNMENT USE PROHIBITED.] (a) These 
197.32  revenues shall not be used to circumvent existing levy limit 
197.33  law.  No revenues derived from tax increment from any district, 
197.34  whether certified before or after August 1, 1979, shall be used 
197.35  for the acquisition, construction, renovation, operation, or 
197.36  maintenance of a building to be used primarily and regularly for 
198.1   conducting the business of a municipality, county, school 
198.2   district, or any other local unit of government or the state or 
198.3   federal government or for a commons area used as a public park, 
198.4   or a facility used for social, recreational, or conference 
198.5   purposes.  This provision shall not prohibit the use of revenues 
198.6   derived from tax increments for the construction or renovation 
198.7   of a parking structure, a commons area used as a public park, or 
198.8   a facility used for social, recreational, or conference purposes 
198.9   and not primarily for conducting the business of the 
198.10  municipality or of a privately owned facility for conference 
198.11  purposes.  
198.12     (b) If any publicly owned facility used for social, 
198.13  recreational, or conference purposes and financed in whole or in 
198.14  part from revenues derived from a district is operated or 
198.15  managed by an entity other than the authority, the operating and 
198.16  management policies of the facility must be approved by the 
198.17  governing body of the authority. 
198.18     (c)(1) Tax increments may not be used to pay for the cost 
198.19  of public improvements, equipment, or other items, if: 
198.20     (i) the improvements, equipment, or other items are located 
198.21  outside of the area of the tax increment financing district from 
198.22  which the increments were collected; and 
198.23     (ii) the improvements, equipment, or items that (i) 
198.24  primarily serve a decorative or aesthetic purpose, or (ii) serve 
198.25  a functional purpose, but their cost is increased by more than 
198.26  100 percent as a result of the selection of materials, design, 
198.27  or type as compared with more commonly used materials, designs, 
198.28  or types for similar improvements, equipment, or items. 
198.29     (2) The provisions of this paragraph do not apply to 
198.30  expenditures related to the rehabilitation of historic 
198.31  structures that are: 
198.32     (i) individually listed on the National Register of 
198.33  Historic Places; or 
198.34     (ii) a contributing element to a historic district listed 
198.35  on the National Register of Historic Places. 
198.36     Sec. 3.  Minnesota Statutes 1998, section 469.1763, is 
199.1   amended by adding a subdivision to read: 
199.2      Subd. 6.  [POOLING PERMITTED FOR DEFICITS.] (a) This 
199.3   subdivision applies only to districts for which the request for 
199.4   certification was made before June 2, 1997. 
199.5      (b) The municipality for the district may transfer 
199.6   available increments from another tax increment financing 
199.7   district located in the municipality, if the transfer is 
199.8   necessary to eliminate a deficit in the district to which the 
199.9   increments are transferred.  A deficit in the district for 
199.10  purposes of this subdivision means the lesser of the following 
199.11  two amounts: 
199.12     (1)(i) the amount due during the calendar year to pay 
199.13  preexisting obligations of the district; minus 
199.14     (ii) the total increments to be collected from properties 
199.15  located within the district that are available for the calendar 
199.16  year, plus 
199.17     (iii) total increments from properties located in other 
199.18  districts in the municipality that are available to be used to 
199.19  meet the district's obligations under this section, excluding 
199.20  this subdivision, or other provisions of law (but excluding a 
199.21  special tax under section 469.1791 and the grant program under 
199.22  Laws 1997, chapter 231, article 1, section 19); or 
199.23     (2) the reduction in increments collected from properties 
199.24  located in the district for the calendar year as a result of the 
199.25  changes in class rates in Laws 1997, chapter 231, article 1; 
199.26  Laws 1998, chapter 389, article 2; and this act. 
199.27     (c) A preexisting obligation means bonds issued and sold 
199.28  before June 2, 1997, and bonds issued to refund such bonds or to 
199.29  reimburse expenditures made in conjunction with a signed 
199.30  contractual agreement entered into before June 2, 1997, to the 
199.31  extent that the bonds are secured by a pledge of increments from 
199.32  the tax increment financing district.  For purposes of this 
199.33  subdivision, bonds exclude an obligation to reimburse or pay a 
199.34  developer or owner of property located in the district for 
199.35  amounts incurred or paid by the developer or owner. 
199.36     (d) The municipality may require a development authority, 
200.1   other than a seaway port authority, to transfer available 
200.2   increments for any of its tax increment financing districts in 
200.3   the municipality to make up an insufficiency in another district 
200.4   in the municipality, regardless of whether the district was 
200.5   established by the development authority or another development 
200.6   authority.  This authority applies notwithstanding any law to 
200.7   the contrary, but applies only to a development authority that: 
200.8      (1) was established by the municipality; or 
200.9      (2) the governing body of which is appointed, in whole or 
200.10  part, by the municipality or an officer of the municipality or 
200.11  which consists, in whole or part, of members of the governing 
200.12  body of the municipality. 
200.13     (e) The authority under this subdivision to spend tax 
200.14  increments outside of the area of the district from which the 
200.15  tax increments were collected: 
200.16     (1) may only be exercised after obtaining approval of the 
200.17  use of the increments, in writing, by the commissioner of 
200.18  revenue; 
200.19     (2) is an exception to the restrictions under section 
200.20  469.176, subdivision 4i, and the other provisions of this 
200.21  section, and the percentage restrictions under subdivision 2 
200.22  must be calculated after deducting increments spent under this 
200.23  subdivision from the total increments for the district; and 
200.24     (3) applies notwithstanding the provisions of the tax 
200.25  increment financing act in effect for districts for which the 
200.26  request for certification was made before June 30, 1982, or any 
200.27  other law to the contrary. 
200.28     Sec. 4.  [469.1764] [PRE-1982 DISTRICTS; POOLING RULES.] 
200.29     Subdivision 1.  [SCOPE; APPLICATION.] (a) This section 
200.30  applies to a tax increment financing district or area added to a 
200.31  district, if the request for certification of the district or 
200.32  the area added to the district was made after July 31, 1979, and 
200.33  before July 1, 1982. 
200.34     (b) This section, section 469.1763, subdivision 6, and any 
200.35  special law applying to the district are the exclusive authority 
200.36  to spend tax increments on activities located outside of the 
201.1   geographic area of a tax increment financing district that is 
201.2   subject to this section. 
201.3      (c) This section does not apply to increments from a 
201.4   district that is subject to the provisions of this section, if: 
201.5      (1) the district was decertified before the enactment of 
201.6   this section and all increments spent on activities located 
201.7   outside of the geographic area of the district were repaid and 
201.8   distributed as excess increments under section 469.176, 
201.9   subdivision 2; or 
201.10     (2) the use of increments on activities located outside of 
201.11  the geographic area of the district consists solely of payment 
201.12  of debt service on bonds under section 469.129, subdivision 2, 
201.13  and any bonds issued to refund bonds issued under that 
201.14  subdivision.  
201.15     Subd. 2.  [STATE AUDITOR NOTIFICATION.] By August 1, 1999, 
201.16  the state auditor shall notify in writing each authority for 
201.17  which the auditor has records that the authority has a district 
201.18  subject to this section. 
201.19     Subd. 3.  [RATIFICATION OF PAST SPENDING.] (a) The 
201.20  following expenditures of increments on activities located 
201.21  outside of the geographic area of a district subject to this 
201.22  section are permitted: 
201.23     (1) expenditures made before the earlier of (i) 
201.24  notification by the state auditor or (ii) December 31, 1999; and 
201.25     (2) expenditures to pay preexisting outside district 
201.26  obligations. 
201.27     Subd. 4.  [DECERTIFICATION REQUIRED.] (a) The provisions of 
201.28  this subdivision apply to any tax increment financing district 
201.29  subject to this section, if increments from the district were 
201.30  used on activities located outside of the geographic area of the 
201.31  district. 
201.32     (b) After December 31, 1999, any tax increments received by 
201.33  the authority from a district subject to this subdivision may be 
201.34  expended only to pay:  
201.35     (1) preexisting in-district obligations; 
201.36     (2) preexisting outside district obligations; and 
202.1      (3) administrative expenses.  
202.2      After all preexisting obligations have been paid or 
202.3   defeased, the district must be decertified and any remaining 
202.4   increments distributed as excess increments under section 
202.5   469.176, subdivision 2. 
202.6      Subd. 5.  [DEFINITIONS.] (a) "Notification by the state 
202.7   auditor" means the receipt by the authority or the municipality 
202.8   of the final written notification from the state auditor that 
202.9   its expenditures of increments from the district on activities 
202.10  located outside of the geographic area of the district were not 
202.11  in compliance with state law. 
202.12     (b) "Preexisting outside district obligations" means: 
202.13     (1) bonds secured by increments from a district subject to 
202.14  this section and used to finance activities outside the 
202.15  geographic area of the district, if the bonds were issued and 
202.16  the pledge of increment was made before the earlier of (i) 
202.17  notification by the state auditor, or (ii) April 1, 1999; 
202.18     (2) bonds issued to refund bonds qualifying under clause 
202.19  (1), if the refunding bonds do not increase the total amount of 
202.20  tax increments required to pay the refunded bonds; and 
202.21     (3) binding written agreements secured by the increments 
202.22  from the district subject to this section and used to finance 
202.23  activities outside the geographic area of the district, if the 
202.24  agreement was entered before the earlier of (i) notification by 
202.25  the state auditor or (ii) May 1, 1999. 
202.26     (c) "Preexisting in-district obligations" means: 
202.27     (1) bonds secured by increments from a district subject to 
202.28  this section and not used to finance activities outside of the 
202.29  geographic area of the district, if the bonds were issued and 
202.30  the pledge of increments was made before April 1, 1999; 
202.31     (2) bonds issued to refund bonds qualifying under clause 
202.32  (1), if the refunding bonds do not increase the total amount of 
202.33  tax increments required to pay the refunded bonds; and 
202.34     (3) binding written agreements secured by increments from a 
202.35  district subject to this section and not used to finance 
202.36  activities outside of the geographic area of the district, if 
203.1   the agreements were entered into and the pledge of increments 
203.2   was made before June 30, 1999. 
203.3      Sec. 5.  Minnesota Statutes 1998, section 469.1771, 
203.4   subdivision 1, is amended to read: 
203.5      Subdivision 1.  [ENFORCEMENT.] (a) The owner of taxable 
203.6   property located in the city, town, school district, or county 
203.7   in which the tax increment financing district is located may 
203.8   bring suit for equitable relief or for damages, as provided in 
203.9   subdivisions 3 and 4, arising out of a failure of a municipality 
203.10  or authority to comply with the provisions of sections 469.174 
203.11  to 469.179, or related provisions of this chapter.  The 
203.12  prevailing party in a suit filed under the preceding sentence is 
203.13  entitled to costs, including reasonable attorney fees. 
203.14     (b) The state auditor may examine and audit political 
203.15  subdivisions' use of tax increment financing.  Without previous 
203.16  notice, the state auditor may examine or audit accounts and 
203.17  records on a random basis as the auditor deems to be in the 
203.18  public interest.  If the state auditor finds evidence that an 
203.19  authority or municipality has violated a provision of the law 
203.20  for which a remedy is provided under this section, the state 
203.21  auditor shall forward the relevant information to the county 
203.22  attorney.  The county attorney may bring an action to enforce 
203.23  the provisions of sections 469.174 to 469.179 or related 
203.24  provisions of this chapter, for matters referred by the state 
203.25  auditor or on behalf of the county.  If the county attorney 
203.26  determines not to bring an action or if the county attorney has 
203.27  not brought an action within 12 months after receipt of the 
203.28  initial notification by the state auditor of the violation, the 
203.29  county attorney shall notify the state auditor in writing. 
203.30     (c) If the state auditor finds an authority is not in 
203.31  compliance with sections 469.174 to 469.179 or related 
203.32  provisions of law, the auditor shall notify the governing body 
203.33  of the municipality that approved the tax increment financing 
203.34  district of its findings.  The governing body of the 
203.35  municipality must respond in writing to the state auditor within 
203.36  60 days after receiving the notification.  Its written response 
204.1   must state whether the municipality accepts, in whole or part, 
204.2   the auditor's findings.  If the municipality does not accept the 
204.3   findings, the statement must indicate the basis for its 
204.4   disagreement.  The state auditor shall annually summarize the 
204.5   responses it receives under this section and send the summary 
204.6   and copies of the responses to the chairs of the committees of 
204.7   the legislature with jurisdiction over tax increment financing. 
204.8      (d) The state auditor shall notify the attorney general in 
204.9   writing and provide supporting materials for a violation found 
204.10  by the auditor, if the: 
204.11     (1) auditor receives notification from the county attorney 
204.12  under paragraph (b) or receives no notification for a 12-month 
204.13  period after initially notifying the county attorney and the 
204.14  state auditor confirms with the county attorney or the 
204.15  municipality that no action has been brought regarding the 
204.16  matter; and 
204.17     (2) municipality or development authority have not 
204.18  eliminated or resolved the violation to the satisfaction of the 
204.19  state auditor. 
204.20  The auditor shall provide the municipality and development 
204.21  authority a copy of the notification sent to the attorney 
204.22  general. 
204.23     Sec. 6.  Minnesota Statutes 1998, section 469.1771, is 
204.24  amended by adding a subdivision to read: 
204.25     Subd. 2b.  [ACTION TO SUSPEND TIF AUTHORITY.] (a) Upon 
204.26  receipt of a notification from the state auditor under 
204.27  subdivision 1, paragraph (d), the attorney general shall review 
204.28  the materials submitted by the auditor and any materials 
204.29  submitted by the municipality and development authority.  If the 
204.30  attorney general finds that the municipality or development 
204.31  authority violated a provision of the law enumerated in 
204.32  subdivision 1 and that the violation was substantial, the 
204.33  attorney general shall file a petition in the tax court to 
204.34  suspend the authority of the municipality and development 
204.35  authority to exercise tax increment financing powers.  
204.36     (b) Before filing a petition under this subdivision, the 
205.1   attorney shall attempt to resolve the matter using appropriate 
205.2   alternative dispute resolution procedures, such as those under 
205.3   sections 572.31 to 572.40. 
205.4      (c) If the tax court finds that the municipality or 
205.5   development authority failed to comply with the law and that the 
205.6   noncompliance was substantial, the court shall suspend the 
205.7   authority of the municipality or development to exercise tax 
205.8   increment financing powers.  The court shall set the period of 
205.9   the suspension for a period not to exceed five years.  In 
205.10  determining the length of the suspension, the court may consider:
205.11     (1) the substantiality of the violation or violations; 
205.12     (2) the dollar amount of the violation or violations; 
205.13     (3) the sophistication of the municipality or development 
205.14  authority; 
205.15     (4) the extent to which the municipality or development 
205.16  authority violated a clear and unambiguous requirement of the 
205.17  law; 
205.18     (5) whether the municipality or development authority 
205.19  continued to violate the law after receiving notification from 
205.20  the state auditor that it was not in compliance with the law; 
205.21     (6) the extent to which the municipality or development 
205.22  authority engaged in a pattern of violations; and 
205.23     (7) any other factors the court determines are relevant to 
205.24  whether the municipality or development authority's authority to 
205.25  exercise tax increment financing powers should be suspended. 
205.26     (d) For purposes of this subdivision, the exercise of tax 
205.27  increment financing powers means: 
205.28     (1) the authority to request certification of a new tax 
205.29  increment financing district or the addition of area to an 
205.30  existing tax increment financing district; 
205.31     (2) the authority to issue bonds under section 469.178; 
205.32     (3) the authority to amend a tax increment financing plan 
205.33  to authorize new activities or expenditures.  
205.34     Sec. 7.  Minnesota Statutes 1998, section 469.1791, 
205.35  subdivision 3, is amended to read: 
205.36     Subd. 3.  [PRECONDITIONS TO ESTABLISH DISTRICT.] (a) A city 
206.1   may establish a special taxing district within a tax increment 
206.2   financing district under this section only if the conditions 
206.3   under paragraphs (b) and (c) are met or if the city elects to 
206.4   exercise the authority under paragraph (d). 
206.5      (b) The city has determined that: 
206.6      (1) total tax increments from the district, including 
206.7   unspent increments from previous years and increments 
206.8   transferred under paragraph (c), will be insufficient to pay the 
206.9   amounts due in a year on preexisting obligations; and 
206.10     (2) this insufficiency of increments resulted from the 
206.11  reduction in property tax class rates enacted in the 1997 and 
206.12  1998 legislative sessions. 
206.13     (c) The city has agreed to transfer any available 
206.14  increments from other tax increment financing districts in the 
206.15  city to pay the preexisting obligations of the district under 
206.16  section 469.1763, subdivision 6.  This requirement does not 
206.17  apply to any available increments of a qualified housing 
206.18  district, as defined in section 273.1399, subdivision 
206.19  1.  Notwithstanding any law to the contrary, the city may 
206.20  require a development authority to transfer available increments 
206.21  for any of its tax increment financing districts in the city to 
206.22  make up an insufficiency in another district in the city, 
206.23  regardless of whether the district was established by the 
206.24  development authority or another development authority.  
206.25  Notwithstanding any law to the contrary, increments transferred 
206.26  under this authority must be spent to pay preexisting 
206.27  obligations.  "Development authority" for this purpose means any 
206.28  authority as defined in section 469.174, subdivision 2. 
206.29     (d) If a tax increment financing district does not qualify 
206.30  under paragraphs (b) and (c), the governing body may elect to 
206.31  establish a special taxing district under this section.  If the 
206.32  city elects to exercise this authority, increments from the tax 
206.33  increment financing district and the proceeds of the tax imposed 
206.34  under this section may only be used to pay preexisting 
206.35  obligations and reasonable administrative expenses of the 
206.36  authority for the tax increment financing district.  The tax 
207.1   increment financing district must be decertified when all 
207.2   preexisting obligations have been paid.  
207.3      Sec. 8.  Minnesota Statutes 1998, section 469.1813, 
207.4   subdivision 1, is amended to read: 
207.5      Subdivision 1.  [AUTHORITY.] The governing body of a 
207.6   political subdivision may grant an abatement of the taxes 
207.7   imposed by the political subdivision on a parcel of property, or 
207.8   defer the payments of the taxes and abate the interest and 
207.9   penalty that otherwise would apply, if: 
207.10     (a) it expects the benefits to the political subdivision of 
207.11  the proposed abatement agreement to at least equal the costs to 
207.12  the political subdivision of the proposed agreement; and 
207.13     (b) it finds that doing so is in the public interest 
207.14  because it will: 
207.15     (1) increase or preserve tax base; 
207.16     (2) provide employment opportunities in the political 
207.17  subdivision; 
207.18     (3) provide or help acquire or construct public facilities; 
207.19     (4) help redevelop or renew blighted areas; or 
207.20     (5) help provide access to services for residents of the 
207.21  political subdivision; or 
207.22     (6) finance or provide public infrastructure. 
207.23     Sec. 9.  Minnesota Statutes 1998, section 469.1813, is 
207.24  amended by adding a subdivision to read: 
207.25     Subd. 1a.  [USE OF TERM.] As used in this section and 
207.26  sections 469.1814 and 469.1815, "abatement" includes a deferral 
207.27  of taxes with abatement of interest and penalties unless the 
207.28  context indicates otherwise. 
207.29     Sec. 10.  Minnesota Statutes 1998, section 469.1813, 
207.30  subdivision 2, is amended to read: 
207.31     Subd. 2.  [ABATEMENT RESOLUTION.] (a) The governing body of 
207.32  a political subdivision may grant an abatement only by adopting 
207.33  an abatement resolution, specifying the terms of the abatement.  
207.34  In the case of a town, the board of supervisors may approve the 
207.35  abatement resolution.  The resolution must also include a 
207.36  specific statement as to the nature and extent of the public 
208.1   benefits which the governing body expects to result from the 
208.2   agreement.  The resolution may provide that the political 
208.3   subdivision will retain or transfer to another political 
208.4   subdivision the abatement to pay for all or part of the cost of 
208.5   acquisition or improvement of public infrastructure, whether or 
208.6   not located on or adjacent to the parcel for which the tax is 
208.7   abated.  The abatement may reduce all or part of the property 
208.8   tax levied by amount for the political subdivision on the 
208.9   parcel.  A political subdivision's maximum annual amount for a 
208.10  parcel equals its total local tax rate multiplied by the total 
208.11  net tax capacity of the parcel. 
208.12     (b) The political subdivision may limit the abatement: 
208.13     (1) to a specific dollar amount per year or in total; 
208.14     (2) to the increase in property taxes resulting from 
208.15  improvement of the property; 
208.16     (3) to the increases in property taxes resulting from 
208.17  increases in the market value or tax capacity of the 
208.18  property; or 
208.19     (4) in any other manner the governing body of the 
208.20  subdivision determines is appropriate; or 
208.21     (5) to the interest and penalty that would otherwise be due 
208.22  on taxes that are deferred. 
208.23     (c) The political subdivision may not abate tax 
208.24  attributable to the value of the land or the areawide tax under 
208.25  chapter 276A or 473F, except as provided in this subdivision. 
208.26     Sec. 11.  Minnesota Statutes 1998, section 469.1813, is 
208.27  amended by adding a subdivision to read: 
208.28     Subd. 6a.  [DEFERMENT PAYMENT SCHEDULE.] When the tax is 
208.29  deferred and the interest and penalty abated, the political 
208.30  subdivision must set a schedule for repayments.  The deferred 
208.31  payment must be included with the current taxes due and payable 
208.32  in the years the deferred payments are due and payable and must 
208.33  be levied accordingly. 
208.34     Sec. 12.  Minnesota Statutes 1998, section 469.1813, 
208.35  subdivision 3, is amended to read: 
208.36     Subd. 3.  [SCHOOL DISTRICT ABATEMENT PROCEDURE ABATEMENTS.] 
209.1   Notwithstanding the amounts in subdivision 2, a school district 
209.2   that grants an abatement under this section must limit the 
209.3   abatement for any property to not more than an amount equal to 
209.4   the product of:  (1) the property's net tax capacity, and (2) 
209.5   the difference between the district's total tax rate for that 
209.6   year and one-half of the general education tax rate for that 
209.7   year.  An abatement granted under this section is not an 
209.8   abatement for purposes of state aid or local levy under sections 
209.9   127A.40 to 127A.51. 
209.10     Sec. 13.  Minnesota Statutes 1998, section 469.1813, 
209.11  subdivision 6, is amended to read: 
209.12     Subd. 6.  [DURATION LIMIT.] (a) A political subdivision 
209.13  other than a school district may grant an abatement for a period 
209.14  no longer than ten years.  The subdivision may specify in the 
209.15  abatement resolution a shorter duration.  If the resolution does 
209.16  not specify a period of time, the abatement is for eight years.  
209.17  If an abatement has been granted to a parcel of property and the 
209.18  period of the abatement has expired, the political subdivision 
209.19  that granted the abatement may not grant another abatement for 
209.20  eight years after the expiration of the first abatement.  This 
209.21  prohibition does not apply to improvements added after and not 
209.22  subject to the first abatement. 
209.23     (b) A school district may grant an abatement for only one 
209.24  year at a time.  Once a school district has authorized an 
209.25  abatement for a property, it may reauthorize the abatement in 
209.26  any subsequent year for the next seven years, or nine years if 
209.27  provided in the original abatement agreement.  This prohibition 
209.28  does not apply to improvements added after and not subject to 
209.29  the original abatement agreement. 
209.30     Sec. 14.  Minnesota Statutes 1998, section 469.1813, is 
209.31  amended by adding a subdivision to read: 
209.32     Subd. 9.  [CONSENT OF PROPERTY OWNER NOT REQUIRED.] A 
209.33  political subdivision may abate the taxes on a parcel under 
209.34  sections 469.1812 to 469.1815 without obtaining the consent of 
209.35  the property owner. 
209.36     Sec. 15.  Minnesota Statutes 1998, section 469.1815, 
210.1   subdivision 2, is amended to read: 
210.2      Subd. 2.  [PROPERTY TAXES; ABATEMENT PAYMENT.] The total 
210.3   property taxes shall be levied on the property and shall be due 
210.4   and payable to the county at the times provided under section 
210.5   279.01.  The political subdivision will pay the abatement to the 
210.6   property owner, lessee, or a representative of the 
210.7   bondholders or will retain the abatement to pay public 
210.8   infrastructure costs, as provided by the abatement resolution. 
210.9      Sec. 16.  Laws 1997, chapter 231, article 1, section 19, 
210.10  subdivision 1, is amended to read: 
210.11     Subdivision 1.  [TIF GRANTS.] (a) The commissioner of 
210.12  revenue shall pay grants to municipalities for deficits in tax 
210.13  increment financing districts caused by the changes in class 
210.14  rates under this act.  Municipalities must submit applications 
210.15  for the grants in a form prescribed by the commissioner by no 
210.16  later than March August 1 for grants payable during the calendar 
210.17  year.  The maximum grant equals the lesser of: 
210.18     (1) for taxes payable in the year before the grant is paid, 
210.19  the reduction in the tax increment financing district's revenues 
210.20  derived from increment resulting from the class rate changes in 
210.21  this article, Laws 1998, chapter 389, article 2, and those 
210.22  enacted in the 1999 regular legislative session; or 
210.23     (2) the municipality's total tax increments, including 
210.24  unspent increments from previous years, less the amount due 
210.25  during the calendar year to pay (i) bonds issued and sold before 
210.26  the day following final enactment of this act and (ii) binding 
210.27  contracts entered into before the day following final enactment 
210.28  of this act. 
210.29     (b) The commissioner of revenue may require applicants for 
210.30  grants or pooling authority under this section to provide any 
210.31  information the commissioner deems appropriate.  The 
210.32  commissioner shall calculate the amount under paragraph (a), 
210.33  clause (2), based on the reports for the tax increment financing 
210.34  district or districts filed with the state auditor on or before 
210.35  July August 1 of the year before the year in which the grant is 
210.36  to be paid. 
211.1      (c) This subdivision applies only to deficits in tax 
211.2   increment financing districts for which: 
211.3      (1) the request for certification was made before the 
211.4   enactment date of this act; and 
211.5      (2) all timely reports have been filed with the state 
211.6   auditor, as required by Minnesota Statutes, section 469.175. 
211.7      (d) The commissioner shall pay the grants under this 
211.8   subdivision by December 26 of the year. 
211.9      (e) $2,000,000 is appropriated to the commissioner of 
211.10  revenue to make grants under this section.  This appropriation 
211.11  is available until expended or this section expires under 
211.12  subdivision 3, whichever is earlier.  If the amount of grant 
211.13  entitlements for a year exceed the appropriation, the 
211.14  commissioner shall reduce each grant proportionately so the 
211.15  total equals the amount available.  
211.16     Sec. 17.  Laws 1997, chapter 231, article 1, section 19, 
211.17  subdivision 3, is amended to read: 
211.18     Subd. 3.  [EXPIRATION.] This section expires on January 1, 
211.19  2001 2002. 
211.20     Sec. 18.  [CITY OF ONAMIA; USE OF TAX INCREMENT FINANCING.] 
211.21     Subdivision 1.  [APPLICATION OF TIME LIMIT.] For tax 
211.22  increment financing district No. 1-1, established April 14, 
211.23  1993, by the city of Onamia, Minnesota Statutes, section 
211.24  469.1763, subdivision 3, applies to the qualified portion of the 
211.25  district by permitting a period of ten years for commencement of 
211.26  activities within the district.  As used in this section, 
211.27  "qualified portion of the district" means only that portion of 
211.28  the district consisting of three parcels fronting on U.S. 169. 
211.29     Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
211.30  approval by the governing body of the city of Onamia and 
211.31  compliance with Minnesota Statutes, section 645.021, subdivision 
211.32  3. 
211.33     Sec. 19.  [ST. CLOUD HOUSING AND REDEVELOPMENT AUTHORITY.] 
211.34     Subdivision 1.  [TAX INCREMENT POOLING.] Notwithstanding 
211.35  the provisions of Minnesota Statutes, section 469.1763, 
211.36  subdivision 2, and the provisions of the tax increment financing 
212.1   act in effect for districts established by the St. Cloud housing 
212.2   and redevelopment authority for which the request for 
212.3   certification was made after August 1, 1979, and before June 30, 
212.4   1982, revenue derived from tax increments paid by properties in 
212.5   the districts may be expended through a development fund or 
212.6   otherwise within other tax increment districts established by 
212.7   the authority to finance the redevelopment of commercial 
212.8   properties outside of tax increment financing districts which 
212.9   were destroyed or impacted in a natural gas explosion on 
212.10  December 11, 1998. 
212.11     Subd. 2.  [EFFECTIVE DATE.] This section is effective the 
212.12  day after compliance with Minnesota Statutes, section 645.021, 
212.13  subdivision 3. 
212.14     Sec. 20.  [CITY OF ST. PAUL.] 
212.15     Subdivision 1.  [DELAY OF DEEMED COMMENCEMENT OF TAX 
212.16  INCREMENT FINANCING DISTRICT.] Notwithstanding Minnesota 
212.17  Statutes, section 469.176, or any other law to the contrary, the 
212.18  duration limit of the Williams Hill tax increment district in 
212.19  the city of St. Paul is determined as if the date of receipt of 
212.20  the first tax increment by the authority occurs when the 
212.21  aggregate of all tax increments received from the district 
212.22  reaches $2,000.  In no case may the duration limit of the 
212.23  district be extended by more than two years.  
212.24     Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
212.25  approval by and compliance with Minnesota Statutes, sections 
212.26  469.1782, subdivision 2, and 645.021, subdivision 3, by the 
212.27  governing body of the city of St. Paul. 
212.28     Sec. 21.  [CITY OF JACKSON; TAX INCREMENT FINANCING 
212.29  DISTRICT.] 
212.30     Subdivision 1.  [DISTRICT EXTENSION.] (a) Notwithstanding 
212.31  the provisions of Minnesota Statutes, section 469.176, 
212.32  subdivision 1c, full tax increments from U.S. 71/I-90 tax 
212.33  increment financing district in the city of Jackson must be paid 
212.34  to and may be retained by the city of Jackson through taxes 
212.35  payable in 2002.  The amount to be retained by the city is 
212.36  limited to $170,000.  Any increments received during the 
213.1   extension in excess of $170,000 must be returned as excess 
213.2   increments under Minnesota Statutes, section 469.176, 
213.3   subdivision 2. 
213.4      Subd. 2.  [EFFECTIVE DATE.] This section is effective the 
213.5   day after compliance with Minnesota Statutes, sections 469.1782, 
213.6   subdivision 2, and 645.021, subdivision 3. 
213.7      Sec. 22.  [CITY OF MINNEOTA; TAX INCREMENT FINANCING.] 
213.8      Subdivision 1.  [ACTIONS RATIFIED.] The expenditure of tax 
213.9   increments on administrative expenses and public utility or 
213.10  other improvements by the city of Minneota for its tax increment 
213.11  financing district, adopted by city resolution 4-15-85A, are 
213.12  ratified and deemed to be authorized by the tax increment 
213.13  financing plan for the district. 
213.14     Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
213.15  compliance by the governing body of the city of Minneota with 
213.16  Minnesota Statutes, section 645.021, subdivision 3. 
213.17     Sec. 23.  [CITY OF FRIDLEY, TAX INCREMENT FINANCING 
213.18  DISTRICT.] 
213.19     Subdivision 1.  [EXTENSION OF TIME.] (a) Notwithstanding 
213.20  the provisions of Minnesota Statutes, section 469.176, 
213.21  subdivision 1b, upon approval of the governing body of the city 
213.22  of Fridley, the Fridley housing and redevelopment authority may, 
213.23  by resolution, extend the duration of tax increment financing 
213.24  district No. 6 located in the city of Fridley.  The housing and 
213.25  redevelopment authority may not extend the duration beyond 
213.26  December 31, 2025. 
213.27     (b) The provisions of Minnesota Statutes, sections 
213.28  273.1399, subdivision 8, and 469.1782, subdivision 1, apply to 
213.29  this district if extended, except that the maximum state aid 
213.30  reduction for a year may not exceed the least of the following 
213.31  amounts: 
213.32     (1) the amount under Minnesota Statutes, section 469.1782, 
213.33  subdivision 1; 
213.34     (2) $200,000, plus one-half of (the amount under Minnesota 
213.35  Statutes, section 469.1782, subdivision 1, minus $200,000); 
213.36     (3) 2.5 percent of the net tax capacity of the city; or 
214.1      (4) five percent of the prior year's tax increment from the 
214.2   district. 
214.3      (c) Notwithstanding any law to the contrary, effective upon 
214.4   approval of this section, no increments may be spent on 
214.5   activities located outside of the area of the district, other 
214.6   than for administrative expenses, sanitary sewer, and the costs 
214.7   of trunk highway No. 65 and other road improvements that are a 
214.8   direct result of development occurring within the area of the 
214.9   district. 
214.10     (d) In the taxes payable year that the district would be 
214.11  terminated under general law, the original net tax capacity of 
214.12  tax increment financing district No. 6 must be increased by the 
214.13  net tax capacity of 200,000 square feet of building 
214.14  improvements, exclusive of parking structures. 
214.15     Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
214.16  compliance with the requirements of Minnesota Statutes, sections 
214.17  469.1782, subdivision 2, and 645.021. 
214.18     Sec. 24.  [CITY OF BROOKLYN CENTER; TAX INCREMENT FINANCING 
214.19  DISTRICT.] 
214.20     Subdivision 1.  [CHANGE OF FISCAL DISPARITIES 
214.21  ELECTION.] Notwithstanding Minnesota Statutes, section 469.177, 
214.22  subdivision 3, paragraph (c), the governing body of the city of 
214.23  Brooklyn Center may change its election of the computation of 
214.24  tax increment for tax increment district No. 4 under Minnesota 
214.25  Statutes, section 469.177, subdivision 3, from the method of 
214.26  computation in paragraph (b) to the method in paragraph (a) of 
214.27  that provision. 
214.28     Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
214.29  approval by the governing body of the city of Brooklyn Center 
214.30  and compliance with Minnesota Statutes, section 645.021, 
214.31  subdivision 3. 
214.32     Sec. 25.  [CITY OF DAWSON; TAX INCREMENT DISTRICT.] 
214.33     Subdivision 1.  [DISTRICT EXTENDED.] Notwithstanding 
214.34  Minnesota Statutes, section 469.176, subdivision 1b, the Dawson 
214.35  economic development authority may collect tax increments from 
214.36  tax increment financing district No. 7 for a period of 18 years 
215.1   after receipt by the authority of the first increment. 
215.2      Subd. 2.  [EFFECTIVE DATE; APPLICABILITY.] Subdivision 1 is 
215.3   effective upon compliance with Minnesota Statutes, sections 
215.4   469.1782, subdivision 2, and 645.021, subdivision 3. 
215.5      Sec. 26.  [MINNEAPOLIS; TAX INCREMENT FINANCING.] 
215.6      Subdivision 1.  [SOCIAL AND RECREATIONAL FACILITIES.] The 
215.7   provisions of section 2 do not apply to the Mill Ruins Park and 
215.8   Milwaukee Road Depot tax increment financing districts and to a 
215.9   district designated in the future that contains the former 
215.10  federal reserve bank building in the city of Minneapolis. 
215.11     Subd. 2.  [EFFECTIVE DATE.] This section is effective upon 
215.12  compliance by the city of Minneapolis with the requirements of 
215.13  Minnesota Statutes 1998, section 645.021, subdivision 3. 
215.14     Sec. 27.  [APPROPRIATION; TIF GRANTS.] 
215.15     $4,000,000 is appropriated to the commissioner of revenue 
215.16  for purposes of grants under Laws 1997, chapter 231, article 1, 
215.17  section 19, to municipalities to offset deficits in tax 
215.18  increment financing districts. 
215.19     Sec. 28.  [REPEALER.] 
215.20     Laws 1997, chapter 231, article 1, section 19, subdivision 
215.21  2, is repealed. 
215.22     Sec. 29.  [EFFECTIVE DATE.] 
215.23     Section 1 is effective for requests for certification of a 
215.24  new district or for the addition of geographic area to a 
215.25  district made after June 30, 1999. 
215.26     Section 2 is effective for all tax increment financing 
215.27  districts, regardless of when the request for certification was 
215.28  made, but does not apply to (1) expenditures made before January 
215.29  1, 2000; (2) expenditures made under a binding contract entered 
215.30  before January 1, 2000; or (3) expenditures made under a binding 
215.31  contract entered pursuant to a letter of intent with the 
215.32  developer or contractor if the letter of intent was entered 
215.33  before January 1, 2000. 
215.34     Section 3 is effective for all districts for which the 
215.35  request for certification was made before June 2, 1997. 
215.36     Section 4 is effective the day following final enactment 
216.1   and applies to districts for which the request for certification 
216.2   was made after July 31, 1979, and before July 1, 1982.  
216.3      Sections 5 and 6 apply to all districts for which the 
216.4   request for certification was made after August 1, 1979, but is 
216.5   limited to final letters of noncompliance issued by the state 
216.6   auditor after December 31, 1999. 
216.7      Sections 8 to 17, and 28 are effective the day following 
216.8   final enactment. 
216.9                              ARTICLE 11 
216.10                  STATE FUNDING OF DISTRICT COURTS 
216.11         TRANSFER OF FINES, FEES, AND OTHER MONEY TO STATE 
216.12     Section 1.  Minnesota Statutes 1998, section 97A.065, 
216.13  subdivision 2, is amended to read: 
216.14     Subd. 2.  [FINES AND FORFEITED BAIL.] (a) Fines and 
216.15  forfeited bail collected from prosecutions of violations of:  
216.16  the game and fish laws; sections 84.091 to 84.15; sections 84.81 
216.17  to 84.91; section 169.121, when the violation involved an 
216.18  off-road recreational vehicle as defined in section 169.01, 
216.19  subdivision 86; chapter 348; and any other law relating to wild 
216.20  animals or aquatic vegetation, must be paid to the treasurer of 
216.21  the county where the violation is prosecuted.  The county 
216.22  treasurer shall submit one-half of the receipts to the 
216.23  commissioner and credit the balance to the county general 
216.24  revenue fund except as provided in paragraphs (b), (c), and 
216.25  (d).  In a county in a judicial district under section 480.181, 
216.26  subdivision 1, paragraph (b), as added in 1999 S.F. No. 2221, 
216.27  article 7, section 26, the share that would otherwise go to the 
216.28  county under this paragraph must be submitted to the state 
216.29  treasurer for deposit in the state treasury and credited to the 
216.30  general fund. 
216.31     (b) The commissioner must reimburse a county, from the game 
216.32  and fish fund, for the cost of keeping prisoners prosecuted for 
216.33  violations under this section if the county board, by 
216.34  resolution, directs:  (1) the county treasurer to submit all 
216.35  fines and forfeited bail to the commissioner; and (2) the county 
216.36  auditor to certify and submit monthly itemized statements to the 
217.1   commissioner.  
217.2      (c) The county treasurer shall submit one-half of the 
217.3   receipts collected under paragraph (a) from prosecutions of 
217.4   violations of sections 84.81 to 84.91, and 169.121, except 
217.5   receipts that are surcharges imposed under section 357.021, 
217.6   subdivision 6, to the state treasurer and credit the balance to 
217.7   the county general fund.  The state treasurer shall credit these 
217.8   receipts to the snowmobile trails and enforcement account in the 
217.9   natural resources fund. 
217.10     (d) The county treasurer shall indicate the amount of the 
217.11  receipts that are surcharges imposed under section 357.021, 
217.12  subdivision 6, and shall submit all of those receipts to the 
217.13  state treasurer. 
217.14     Sec. 2.  Minnesota Statutes 1998, section 273.1398, 
217.15  subdivision 2, is amended to read: 
217.16     Subd. 2.  [HOMESTEAD AND AGRICULTURAL CREDIT AID.] 
217.17  Homestead and agricultural credit aid for each unique taxing 
217.18  jurisdiction equals the product of (1) the homestead and 
217.19  agricultural credit aid base, and (2) the growth adjustment 
217.20  factor, plus the net tax capacity adjustment and the fiscal 
217.21  disparity adjustment.  For aid payable in 2000, each county 
217.22  shall have its homestead and agricultural credit aid permanently 
217.23  reduced by an amount equal to one-third of the additional amount 
217.24  received by the county under section 477A.03, subdivision 2, 
217.25  paragraph (c), clause (ii). 
217.26     Sec. 3.  Minnesota Statutes 1998, section 273.1398, is 
217.27  amended by adding a subdivision to read: 
217.28     Subd. 4a.  [AID OFFSET FOR COURT COSTS.] (a) By July 15, 
217.29  1999, the supreme court shall determine and certify to the 
217.30  commissioner of revenue for each county, other than counties 
217.31  located in the eighth judicial district, the county's share of 
217.32  the costs assumed under 1999 S.F. No. 2221, article 7, during 
217.33  the fiscal year beginning July 1, 2000, less an amount equal to 
217.34  the county's share of transferred fines collected by the 
217.35  district courts in the county during calendar year 1998.  
217.36     (b) Payments to a county under subdivision 2 or section 
218.1   273.166 for calendar year 2000 must be permanently reduced by an 
218.2   amount equal to 75 percent of the net cost to the state for 
218.3   assumption of district court costs as certified in paragraph (a).
218.4      (c) Payments to a county under subdivision 2 or section 
218.5   273.166 for calendar year 2001 must be permanently reduced by an 
218.6   amount equal to 25 percent of the net cost to the state for 
218.7   assumption of district court costs as certified in paragraph (a).
218.8      Sec. 4.  Minnesota Statutes 1998, section 299D.03, 
218.9   subdivision 5, is amended to read: 
218.10     Subd. 5.  [FINES AND FORFEITED BAIL MONEY.] (a) All fines 
218.11  and forfeited bail money, from traffic and motor vehicle law 
218.12  violations, collected from persons apprehended or arrested by 
218.13  officers of the state patrol, shall be paid by the person or 
218.14  officer collecting the fines, forfeited bail money or 
218.15  installments thereof, on or before the tenth day after the last 
218.16  day of the month in which these moneys were collected, to the 
218.17  county treasurer of the county where the violation occurred.  
218.18  Three-eighths of these receipts shall be credited to the general 
218.19  revenue fund of the county, except that in a county in a 
218.20  judicial district under section 480.181, subdivision 1, 
218.21  paragraph (b), as added in 1999 S.F. No. 2221, article 7, 
218.22  section 26, this three-eighths share must be transmitted to the 
218.23  state treasurer for deposit in the state treasury and credited 
218.24  to the general fund.  The other five-eighths of these receipts 
218.25  shall be transmitted by that officer to the state treasurer and 
218.26  shall be credited as follows: 
218.27     (1) In the fiscal year ending June 30, 1991, the first 
218.28  $275,000 in money received by the state treasurer after June 4, 
218.29  1991, must be credited to the transportation services fund, and 
218.30  the remainder in the fiscal year credited to the trunk highway 
218.31  fund. 
218.32     (2) In fiscal year 1992, the first $215,000 in money 
218.33  received by the state treasurer in the fiscal year must be 
218.34  credited to the transportation services fund, and the remainder 
218.35  credited to the trunk highway fund. 
218.36     (3) In fiscal years 1993 and subsequent years, the entire 
219.1   amount received by the state treasurer must be credited to the 
219.2   trunk highway fund.  If, however, the violation occurs within a 
219.3   municipality and the city attorney prosecutes the offense, and a 
219.4   plea of not guilty is entered, one-third of the receipts shall 
219.5   be credited to the general revenue fund of the county, one-third 
219.6   of the receipts shall be paid to the municipality prosecuting 
219.7   the offense, and one-third shall be transmitted to the state 
219.8   treasurer as provided in this subdivision.  All costs of 
219.9   participation in a nationwide police communication system 
219.10  chargeable to the state of Minnesota shall be paid from 
219.11  appropriations for that purpose. 
219.12     (b) Notwithstanding any other provisions of law, all fines 
219.13  and forfeited bail money from violations of statutes governing 
219.14  the maximum weight of motor vehicles, collected from persons 
219.15  apprehended or arrested by employees of the state of Minnesota, 
219.16  by means of stationary or portable scales operated by these 
219.17  employees, shall be paid by the person or officer collecting the 
219.18  fines or forfeited bail money, on or before the tenth day after 
219.19  the last day of the month in which the collections were made, to 
219.20  the county treasurer of the county where the violation 
219.21  occurred.  Five-eighths of these receipts shall be transmitted 
219.22  by that officer to the state treasurer and shall be credited to 
219.23  the highway user tax distribution fund.  Three-eighths of these 
219.24  receipts shall be credited to the general revenue fund of the 
219.25  county, except that in a county in a judicial district under 
219.26  section 480.181, subdivision 1, paragraph (b), as added in 1999 
219.27  S.F. No. 2221, article 7, section 26, this three-eighths share 
219.28  must be transmitted to the state treasurer for deposit in the 
219.29  state treasury and credited to the general fund. 
219.30     Sec. 5.  Minnesota Statutes 1998, section 357.021, 
219.31  subdivision 1a, is amended to read: 
219.32     Subd. 1a.  [TRANSMITTAL OF FEES TO STATE TREASURER.] (a) 
219.33  Every person, including the state of Minnesota and all bodies 
219.34  politic and corporate, who shall transact any business in the 
219.35  district court, shall pay to the court administrator of said 
219.36  court the sundry fees prescribed in subdivision 2.  Except as 
220.1   provided in paragraph (d), the court administrator shall 
220.2   transmit the fees monthly to the state treasurer for deposit in 
220.3   the state treasury and credit to the general fund.  
220.4      (b) In a county which has a screener-collector position, 
220.5   fees paid by a county pursuant to this subdivision shall be 
220.6   transmitted monthly to the county treasurer, who shall apply the 
220.7   fees first to reimburse the county for the amount of the salary 
220.8   paid for the screener-collector position.  The balance of the 
220.9   fees collected shall then be forwarded to the state treasurer 
220.10  for deposit in the state treasury and credited to the general 
220.11  fund.  In a county in the eighth a judicial district under 
220.12  section 480.181, subdivision 1, paragraph (b), as added in 1999 
220.13  S.F. No. 2221, article 7, section 26, which has a 
220.14  screener-collector position, the fees paid by a county shall be 
220.15  transmitted monthly to the state treasurer for deposit in the 
220.16  state treasury and credited to the general fund.  A 
220.17  screener-collector position for purposes of this paragraph is an 
220.18  employee whose function is to increase the collection of fines 
220.19  and to review the incomes of potential clients of the public 
220.20  defender, in order to verify eligibility for that service. 
220.21     (c) No fee is required under this section from the public 
220.22  authority or the party the public authority represents in an 
220.23  action for: 
220.24     (1) child support enforcement or modification, medical 
220.25  assistance enforcement, or establishment of parentage in the 
220.26  district court, or child or medical support enforcement 
220.27  conducted by an administrative law judge in an administrative 
220.28  hearing under section 518.5511; 
220.29     (2) civil commitment under chapter 253B; 
220.30     (3) the appointment of a public conservator or public 
220.31  guardian or any other action under chapters 252A and 525; 
220.32     (4) wrongfully obtaining public assistance under section 
220.33  256.98 or 256D.07, or recovery of overpayments of public 
220.34  assistance; 
220.35     (5) court relief under chapter 260; 
220.36     (6) forfeiture of property under sections 169.1217 and 
221.1   609.531 to 609.5317; 
221.2      (7) recovery of amounts issued by political subdivisions or 
221.3   public institutions under sections 246.52, 252.27, 256.045, 
221.4   256.25, 256.87, 256B.042, 256B.14, 256B.15, 256B.37, and 
221.5   260.251, or other sections referring to other forms of public 
221.6   assistance; 
221.7      (8) restitution under section 611A.04; or 
221.8      (9) actions seeking monetary relief in favor of the state 
221.9   pursuant to section 16D.14, subdivision 5. 
221.10     (d) The fees collected for child support modifications 
221.11  under subdivision 2, clause (13), must be transmitted to the 
221.12  county treasurer for deposit in the county general fund.  The 
221.13  fees must be used by the county to pay for child support 
221.14  enforcement efforts by county attorneys. 
221.15     Sec. 6.  Minnesota Statutes 1998, section 477A.03, 
221.16  subdivision 2, is amended to read: 
221.17     Subd. 2.  [ANNUAL APPROPRIATION.] (a) A sum sufficient to 
221.18  discharge the duties imposed by sections 477A.011 to 477A.014 is 
221.19  annually appropriated from the general fund to the commissioner 
221.20  of revenue.  
221.21     (b) Aid payments to counties under section 477A.0121 are 
221.22  limited to $20,265,000 in 1996.  Aid payments to counties under 
221.23  section 477A.0121 are limited to $27,571,625 in 1997.  For aid 
221.24  payable in 1998 and thereafter, the total aids paid under 
221.25  section 477A.0121 are the amounts certified to be paid in the 
221.26  previous year, adjusted for inflation as provided under 
221.27  subdivision 3. 
221.28     (c)(i) For aids payable in 1998 and thereafter, the total 
221.29  aids paid to counties under section 477A.0122 are the amounts 
221.30  certified to be paid in the previous year, adjusted for 
221.31  inflation as provided under subdivision 3. 
221.32     (ii) Aid payments to counties under section 477A.0122 in 
221.33  2000 are further increased by an 
221.34  additional $30,000,000 $20,000,000 in 2000. 
221.35     (d) Aid payments to cities in 1999 under section 477A.013, 
221.36  subdivision 9, are limited to $380,565,489.  For aids payable in 
222.1   2000 and 2001, the total aids paid under section 477A.013, 
222.2   subdivision 9, are the amounts certified to be paid in the 
222.3   previous year, adjusted for inflation as provided under 
222.4   subdivision 3.  For aids payable in 2002, the total aids paid 
222.5   under section 477A.013, subdivision 9, are the amounts certified 
222.6   to be paid in the previous year, adjusted for inflation as 
222.7   provided under subdivision 3, and increased by the amount 
222.8   certified to be paid in 2001 under section 477A.06.  For aids 
222.9   payable in 2003 and thereafter, the total aids paid under 
222.10  section 477A.013, subdivision 9, are the amounts certified to be 
222.11  paid in the previous year, adjusted for inflation as provided 
222.12  under subdivision 3.  The additional amount authorized under 
222.13  subdivision 4 is not included when calculating the appropriation 
222.14  limits under this paragraph. 
222.15     Sec. 7.  Minnesota Statutes 1998, section 485.018, 
222.16  subdivision 5, is amended to read: 
222.17     Subd. 5.  [COLLECTION OF FEES.] The court administrator of 
222.18  district court shall charge and collect all fees as prescribed 
222.19  by law and all such fees collected by the court administrator as 
222.20  court administrator of district court shall be paid to the 
222.21  county treasurer.  Except for those portions of forfeited bail 
222.22  paid to victims pursuant to existing law, the county treasurer 
222.23  shall forward all revenue from fees and forfeited bail collected 
222.24  under chapters 357, 487, and 574 to the state treasurer for 
222.25  deposit in the state treasury and credit to the general fund, 
222.26  unless otherwise provided in chapter 611A or other law, in the 
222.27  manner and at the times prescribed by the state treasurer, but 
222.28  not less often than once each month.  If the defendant or 
222.29  probationer is located after forfeited bail proceeds have been 
222.30  forwarded to the state treasurer, the state treasurer shall 
222.31  reimburse the county, on request, for actual costs expended for 
222.32  extradition, transportation, or other costs necessary to return 
222.33  the defendant or probationer to the jurisdiction where the bail 
222.34  was posted, in an amount not more than the amount of forfeited 
222.35  bail.  All other money must be deposited in the county general 
222.36  fund unless otherwise provided by law.  The court administrator 
223.1   of district court shall not retain any additional compensation, 
223.2   per diem or other emolument for services as court administrator 
223.3   of district court, but may receive and retain mileage and 
223.4   expense allowances as prescribed by law. 
223.5      Sec. 8.  Minnesota Statutes 1998, section 487.02, 
223.6   subdivision 2, is amended to read: 
223.7      Subd. 2.  Except as provided in this subdivision, the 
223.8   county board shall levy taxes annually against the taxable 
223.9   property within the county as necessary for the establishment, 
223.10  operation and maintenance of the county court or courts within 
223.11  the county.  Any county in a judicial district under section 
223.12  480.181, subdivision 1, paragraph (b), as added by 1999 S.F. No. 
223.13  2221, article 7, section 26, is prohibited from levying property 
223.14  taxes for these purposes, except for any amounts necessary to 
223.15  pay the costs incurred in the first six months of calendar year 
223.16  2000 with respect to counties in the fifth, seventh, and ninth 
223.17  judicial districts. 
223.18     Sec. 9.  Minnesota Statutes 1998, section 487.32, 
223.19  subdivision 3, is amended to read: 
223.20     Subd. 3.  A judge of a county court may order any sums 
223.21  forfeited to be reinstated and the county state treasurer shall 
223.22  then refund accordingly.  The county state treasurer shall 
223.23  reimburse the court administrator if the court administrator 
223.24  refunds the deposit upon a judge's order and obtains a receipt 
223.25  to be used as a voucher.  
223.26     Sec. 10.  Minnesota Statutes 1998, section 487.33, 
223.27  subdivision 5, is amended to read: 
223.28     Subd. 5.  [ALLOCATION.] The court administrator shall 
223.29  provide the county treasurer with the name of the municipality 
223.30  or other subdivision of government where the offense was 
223.31  committed which employed or provided by contract the arresting 
223.32  or apprehending officer and the name of the municipality or 
223.33  other subdivision of government which employed the prosecuting 
223.34  attorney or otherwise provided for prosecution of the offense 
223.35  for each fine or penalty and the total amount of fines or 
223.36  penalties collected for each municipality or other subdivision 
224.1   of government.  On or before the last day of each month, the 
224.2   county treasurer shall pay over to the treasurer of each 
224.3   municipality or subdivision of government within the county all 
224.4   fines or penalties for parking violations for which complaints 
224.5   and warrants have not been issued and one-third of all fines or 
224.6   penalties collected during the previous month for offenses 
224.7   committed within the municipality or subdivision of government 
224.8   from persons arrested or issued citations by officers employed 
224.9   by the municipality or subdivision or provided by the 
224.10  municipality or subdivision by contract.  An additional 
224.11  one-third of all fines or penalties shall be paid to the 
224.12  municipality or subdivision of government providing prosecution 
224.13  of offenses of the type for which the fine or penalty is 
224.14  collected occurring within the municipality or subdivision, 
224.15  imposed for violations of state statute or of an ordinance, 
224.16  charter provision, rule or regulation of a city whether or not a 
224.17  guilty plea is entered or bail is forfeited.  Except as provided 
224.18  in section 299D.03, subdivision 5, or as otherwise provided by 
224.19  law, all other fines and forfeitures and all fees and statutory 
224.20  court costs collected by the court administrator shall be paid 
224.21  to the county treasurer of the county in which the funds were 
224.22  collected who shall dispense them as provided by law.  In a 
224.23  county in a judicial district under section 480.181, subdivision 
224.24  1, paragraph (b), as added in 1999 S.F. No. 2221, article 7, 
224.25  section 26, all other fines, forfeitures, fees, and statutory 
224.26  court costs must be paid to the state treasurer for deposit in 
224.27  the state treasury and credited to the general fund. 
224.28     Sec. 11.  Minnesota Statutes 1998, section 574.34, 
224.29  subdivision 1, is amended to read: 
224.30     Subdivision 1.  [GENERAL.] Fines and forfeitures not 
224.31  specially granted or appropriated by law shall be paid into the 
224.32  treasury of the county where they are incurred, except in a 
224.33  county in a judicial district under section 480.181, subdivision 
224.34  1, paragraph (b), as added in 1999 S.F. No. 2221, article 7, 
224.35  section 26, the fines and forfeitures must be deposited in the 
224.36  state treasury and credited to the general fund. 
225.1      Sec. 12.  [APPROPRIATION.] 
225.2      $18,731,000 is appropriated for fiscal year 2001 from the 
225.3   general fund to the district courts for purposes of funding the 
225.4   district court expenses under this article. 
225.5      Sec. 13.  [EFFECTIVE DATES; CONTINGENCY.] 
225.6      (a) Sections 2 and 6 are effective for aids payable in 
225.7   2000.  The other provisions of this article providing for the 
225.8   transfer of fees and fines to the state are effective January 1, 
225.9   2000, with respect to counties in the eighth judicial district, 
225.10  and July 1, 2000, with respect to counties in the fifth, 
225.11  seventh, and ninth judicial districts. 
225.12     (b) Notwithstanding paragraph (a), this article does not 
225.13  take effect unless the state assumes the district court costs 
225.14  under 1999 S.F. No. 2221, article 7. 
225.15                             ARTICLE 12 
225.16                         BUSINESS SUBSIDIES 
225.17     Section 1.  [116J.993] [DEFINITIONS.] 
225.18     Subdivision 1.  [SCOPE.] For the purposes of sections 
225.19  116J.993 to 116J.995, the terms defined in this section have the 
225.20  meanings given them. 
225.21     Subd. 2.  [BENEFIT DATE.] "Benefit date" means the date 
225.22  that the recipient receives the business subsidy.  If the 
225.23  business subsidy involves the purchase, lease, or donation of 
225.24  physical equipment, then the benefit date begins when the 
225.25  recipient puts the equipment into service.  If the business 
225.26  subsidy is for improvements to property, then the benefit date 
225.27  refers to the earliest date of either: 
225.28     (1) when the improvements are finished for the entire 
225.29  project; or 
225.30     (2) when a business occupies the property.  If a business 
225.31  occupies the property and the subsidy grantor expects that other 
225.32  businesses will also occupy the same property, the grantor may 
225.33  assign a separate benefit date for each business when it first 
225.34  occupies the property. 
225.35     Subd. 3.  [BUSINESS SUBSIDY.] "Business subsidy" or 
225.36  "subsidy" means a state or local government agency grant, 
226.1   contribution of personal property, real property, 
226.2   infrastructure, the principal amount of a loan at rates below 
226.3   those commercially available to the recipient, any reduction or 
226.4   deferral of any tax or any fee, any guarantee of any payment 
226.5   under any loan, lease, or other obligation, or any preferential 
226.6   use of government facilities given to a business. 
226.7      The following forms of financial assistance are not a 
226.8   business subsidy: 
226.9      (1) a business subsidy of less than $25,000; 
226.10     (2) assistance that is generally available to all 
226.11  businesses or to a general class of similar businesses, such as 
226.12  a line of business, size, location, or similar general criteria; 
226.13     (3) public improvements to buildings or lands owned by the 
226.14  state or local government that serve a public purpose and do not 
226.15  principally benefit a single business or defined group of 
226.16  businesses at the time the improvements are made; 
226.17     (4) redevelopment property polluted by contaminants as 
226.18  defined in section 116J.552, subdivision 3; 
226.19     (5) assistance provided for the sole purpose of renovating 
226.20  old or decaying building stock or bringing it up to code, 
226.21  provided that the assistance is equal to or less than 50 percent 
226.22  of the total cost; 
226.23     (6) assistance provided to organizations whose primary 
226.24  mission is to provide job readiness and training services if the 
226.25  sole purpose of the assistance is to provide those services; 
226.26     (7) assistance for housing; 
226.27     (8) assistance for pollution control or abatement; 
226.28     (9) assistance for energy conservation; 
226.29     (10) tax reductions resulting from conformity with federal 
226.30  tax law; 
226.31     (11) workers' compensation and unemployment compensation; 
226.32     (12) benefits derived from regulation; 
226.33     (13) indirect benefits derived from assistance to 
226.34  educational institutions; 
226.35     (14) funds from bonds allocated under chapter 474A; 
226.36     (15) assistance for a collaboration between a Minnesota 
227.1   higher education institution and a business; 
227.2      (16) assistance for a tax increment financing soils 
227.3   condition district as defined under section 469.174, subdivision 
227.4   19; 
227.5      (17) redevelopment when the recipient's investment in the 
227.6   purchase of the site and in site preparation is 70 percent or 
227.7   more of the assessor's current year's estimated market value; 
227.8   and 
227.9      (18) general changes in tax increment financing law and 
227.10  other general tax law changes of a principally technical nature. 
227.11     Subd. 4.  [GRANTOR.] "Grantor" means any state or local 
227.12  government agency with the authority to grant a business subsidy.
227.13     Subd. 5.  [LOCAL GOVERNMENT AGENCY.] "Local government 
227.14  agency" includes a statutory or home rule charter city, housing 
227.15  and redevelopment authority, town, county, port authority, 
227.16  economic development authority, community development agency, 
227.17  nonprofit entity created by a local government agency, or any 
227.18  other entity created by or authorized by a local government with 
227.19  authority to provide business subsidies.  
227.20     Subd. 6.  [RECIPIENT.] "Recipient" means any for-profit or 
227.21  nonprofit business entity that receives a business subsidy.  
227.22  Only nonprofit entities with at least 100 full-time equivalent 
227.23  positions and with a ratio of highest to lowest paid employee, 
227.24  that exceeds ten to one, determined on the basis of full-time 
227.25  equivalent positions, are included in this definition. 
227.26     Subd. 7.  [STATE GOVERNMENT AGENCY.] "State government 
227.27  agency" means any state agency that has the authority to award 
227.28  business subsidies.  
227.29     Sec. 2.  [116J.994] [REGULATING LOCAL AND STATE BUSINESS 
227.30  SUBSIDIES.] 
227.31     Subdivision 1.  [PUBLIC PURPOSE.] A business subsidy must 
227.32  meet a public purpose other than increasing the tax base.  Job 
227.33  retention may only be used as a public purpose in cases where 
227.34  job loss is imminent and demonstrable. 
227.35     Subd. 2.  [DEVELOPING A SET OF CRITERIA.] A business 
227.36  subsidy may not be granted until the grantor has adopted 
228.1   criteria after a public hearing for awarding business subsidies 
228.2   that comply with this section.  The criteria must include a 
228.3   policy regarding the wages to be paid for the jobs created.  The 
228.4   commissioner of trade and economic development may assist local 
228.5   government agencies in developing criteria. 
228.6      Subd. 3.  [SUBSIDY AGREEMENT.] (a) A recipient must enter 
228.7   into a subsidy agreement with the grantor of the subsidy that 
228.8   includes: 
228.9      (1) a description of the subsidy, including the amount and 
228.10  type of subsidy, and type of district if the subsidy is tax 
228.11  increment financing; 
228.12     (2) a statement of the public purposes for the subsidy; 
228.13     (3) goals for the subsidy; 
228.14     (4) a description of the financial obligation of the 
228.15  recipient if the goals are not met; 
228.16     (5) a statement of why the subsidy is needed; 
228.17     (6) a commitment to continue operations at the site where 
228.18  the subsidy is used for at least five years after the benefit 
228.19  date; 
228.20     (7) the name and address of the parent corporation of the 
228.21  recipient, if any; and 
228.22     (8) a list of all financial assistance by all grantors for 
228.23  the project. 
228.24     (b) Business subsidies in the form of grants must be 
228.25  structured as forgivable loans.  If a business subsidy is not 
228.26  structured as a forgivable loan, the agreement must state the 
228.27  fair market value of the subsidy to the recipient, including the 
228.28  value of conveying property at less than a fair market price, or 
228.29  other in-kind benefits to the recipient. 
228.30     (c) If a business subsidy benefits more than one recipient, 
228.31  the grantor must assign a proportion of the business subsidy to 
228.32  each recipient that signs a subsidy agreement.  The proportion 
228.33  assessed to each recipient must reflect a reasonable estimate of 
228.34  the recipient's share of the total benefits of the project. 
228.35     (d) The state or local government agency and the recipient 
228.36  must both sign the subsidy agreement and, if the grantor is a 
229.1   local government agency, the agreement must be approved by the 
229.2   local elected governing body, except for the St. Paul Port 
229.3   Authority and a seaway port authority. 
229.4      Subd. 4.  [WAGE AND JOB GOALS.] The subsidy agreement, in 
229.5   addition to any other goals, must include:  (1) goals for the 
229.6   number of jobs created, which may include separate goals for the 
229.7   number of part-time or full-time jobs, or, in cases where job 
229.8   loss is imminent and demonstrable, goals for the number of jobs 
229.9   retained; and (2) wage goals for the jobs created or retained. 
229.10     In addition to other specific goal time frames, the wage 
229.11  and job goals must contain specific goals to be attained within 
229.12  two years of the benefit date. 
229.13     Subd. 5.  [PUBLIC NOTICE AND HEARING.] (a) Before granting 
229.14  a business subsidy that exceeds $500,000 for a state government 
229.15  grantor and $100,000 for a local government grantor, the grantor 
229.16  must provide public notice and a hearing on the subsidy.  A 
229.17  public hearing and notice under this subdivision is not required 
229.18  if a hearing and notice on the subsidy is otherwise required by 
229.19  law. 
229.20     (b) Public notice of a proposed business subsidy under this 
229.21  subdivision by a state government grantor must be published in 
229.22  the State Register.  Public notice of a proposed business 
229.23  subsidy under this subdivision by a local government grantor 
229.24  must be published in a local newspaper of general circulation.  
229.25  The public notice must identify the location at which 
229.26  information about the business subsidy, including a copy of the 
229.27  subsidy agreement, is available.  Published notice should be 
229.28  sufficiently conspicuous in size and placement to distinguish 
229.29  the notice from the surrounding text.  The grantor must make the 
229.30  information available in printed paper copies and, if possible, 
229.31  on the Internet.  The government agency must provide at least a 
229.32  ten-day notice for the public hearing. 
229.33     (c) The public notice must include the date, time, and 
229.34  place of the hearing. 
229.35     (d) The public hearing by a state government grantor must 
229.36  be held in St. Paul. 
230.1      Subd. 6.  [FAILURE TO MEET GOALS.] The subsidy agreement 
230.2   must specify the recipient's obligation if the recipient does 
230.3   not fulfill the agreement.  At a minimum, the agreement must 
230.4   require a recipient failing to meet subsidy agreement goals to 
230.5   pay back the assistance plus interest to the grantor provided 
230.6   that repayment may be prorated to reflect partial fulfillment of 
230.7   goals.  The interest rate must be set at the implicit price 
230.8   deflator defined under section 275.70, subdivision 2.  The 
230.9   grantor, after a public hearing, may extend for up to one year 
230.10  the period for meeting the goals provided in a subsidy agreement.
230.11     A recipient that fails to meet the terms of a subsidy 
230.12  agreement may not receive a business subsidy from any grantor 
230.13  for a period of five years from the date of failure or until a 
230.14  recipient satisfies its repayment obligation under this 
230.15  subdivision, whichever occurs first.  
230.16     Before a grantor signs a business subsidy agreement, the 
230.17  grantor must check with the compilation and summary report 
230.18  required by this section to determine if the recipient is 
230.19  eligible to receive a business subsidy. 
230.20     Subd. 7.  [REPORTS BY RECIPIENTS TO GRANTORS.] (a) A 
230.21  business subsidy grantor must monitor the progress by the 
230.22  recipient in achieving agreement goals. 
230.23     (b) A recipient must provide information regarding goals 
230.24  and results for two years after the benefit date or until the 
230.25  goals are met, whichever is later.  If the goals are not met, 
230.26  the recipient must continue to provide information on the 
230.27  subsidy until the subsidy is repaid.  The information must be 
230.28  filed on forms developed by the commissioner in cooperation with 
230.29  representatives of local government.  Copies of the completed 
230.30  forms must be sent to the commissioner and the local government 
230.31  agency that provided the business subsidy.  The report must 
230.32  include: 
230.33     (1) the type, public purpose, and amount of subsidies and 
230.34  type of district, if the subsidy is tax increment financing; 
230.35     (2) the hourly wage of each job created with separate bands 
230.36  of wages; 
231.1      (3) the sum of the hourly wages and cost of health 
231.2   insurance provided by the employer with separate bands of wages; 
231.3      (4) the date the job and wage goals will be reached; 
231.4      (5) a statement of goals identified in the subsidy 
231.5   agreement and an update on achievement of those goals; 
231.6      (6) the location of the recipient prior to receiving the 
231.7   business subsidy; 
231.8      (7) why the recipient did not complete the project outlined 
231.9   in the subsidy agreement at their previous location, if the 
231.10  recipient was previously located at another site in Minnesota; 
231.11     (8) the name and address of the parent corporation of the 
231.12  recipient, if any; 
231.13     (9) a list of all financial assistance by all grantors for 
231.14  the project; and 
231.15     (10) other information the commissioner may request. 
231.16  A report must be filed no later than March 1 of each year for 
231.17  the previous year and within 30 days after the deadline for 
231.18  meeting the job and wage goals.  
231.19     (c) Financial assistance that is excluded from the 
231.20  definition of "business subsidy" by section 116J.993, 
231.21  subdivision 3, clauses (4), (5), (8), and (16) is subject to the 
231.22  reporting requirements of this subdivision, except that the 
231.23  report of the recipient must include: 
231.24     (1) the type, public purpose, and amount of the financial 
231.25  assistance, and type of district if the subsidy is tax increment 
231.26  financing; 
231.27     (2) progress towards meeting goals stated in the subsidy 
231.28  agreement and the public purpose of the assistance; 
231.29     (3) the hourly wage of each job created with separate bands 
231.30  of wages; 
231.31     (4) the sum of the hourly wages and cost of health 
231.32  insurance provided by the employer with separate bands of wages; 
231.33     (5) the location of the recipient prior to receiving the 
231.34  assistance; and 
231.35     (6) other information the grantor requests. 
231.36     (d) If the recipient does not submit its report, the local 
232.1   government agency must mail the recipient a warning within one 
232.2   week of the required filing date.  If, after 14 days of the 
232.3   postmarked date of the warning, the recipient fails to provide a 
232.4   report, the recipient must pay to the grantor a penalty of $100 
232.5   for each subsequent day until the report is filed.  The maximum 
232.6   penalty shall not exceed $1,000.  
232.7      Subd. 8.  [REPORTS BY GRANTORS.] (a) Local government 
232.8   agencies of a local government with a population of more than 
232.9   2,500 and state government agencies, regardless of whether or 
232.10  not they have awarded any business subsidies, must file a report 
232.11  by April 1 of each year with the commissioner.  Local government 
232.12  agencies of a local government with a population of 2,500 or 
232.13  less are exempt from filing this report if they have not awarded 
232.14  a business subsidy in the past five years.  The local government 
232.15  agency must include a list of recipients that did not complete 
232.16  the report and of recipients that have not met their job and 
232.17  wage goals within two years and the steps being taken to bring 
232.18  them into compliance or to recoup the subsidy.  
232.19     If the commissioner has not received the report by April 1 
232.20  from an entity required to report, the commissioner shall issue 
232.21  a warning to the government agency.  If the commissioner has 
232.22  still not received the report by June 1 of that same year from 
232.23  an entity required to report, then that government agency may 
232.24  not award any business subsidies until the report has been filed.
232.25     (b) The commissioner of trade and economic development must 
232.26  provide information on reporting requirements to state and local 
232.27  government agencies. 
232.28     Subd. 9.  [COMPILATION AND SUMMARY REPORT.] The department 
232.29  of trade and economic development must publish a compilation and 
232.30  summary of the results of the reports for the previous calendar 
232.31  year by July 1 of each year.  The reports of the government 
232.32  agencies to the department and the compilation and summary 
232.33  report of the department must be made available to the public. 
232.34     The commissioner must coordinate the production of reports 
232.35  so that useful comparisons across time periods and across 
232.36  grantors can be made.  The commissioner may add other 
233.1   information to the report as the commissioner deems necessary to 
233.2   evaluate business subsidies.  Among the information in the 
233.3   summary and compilation report, the commissioner must include: 
233.4      (1) total amount of subsidies awarded in each development 
233.5   region of the state; 
233.6      (2) distribution of business subsidy amounts by size of the 
233.7   business subsidy; 
233.8      (3) distribution of business subsidy amounts by time 
233.9   category, such as monthly or quarterly; 
233.10     (4) distribution of subsidies by type and by public 
233.11  purpose; 
233.12     (5) percent of all business subsidies that reached their 
233.13  goals; 
233.14     (6) percent of business subsidies that did not reach their 
233.15  goals by two years from the benefit date; 
233.16     (7) total dollar amount of business subsidies that did not 
233.17  meet their goals after two years from the benefit date; 
233.18     (8) percent of subsidies that did not meet their goals and 
233.19  that did not receive repayment; 
233.20     (9) list of recipients that have failed to meet the terms 
233.21  of a subsidy agreement in the past five years and have not 
233.22  satisfied their repayment obligations; 
233.23     (10) number of part-time and full-time jobs within separate 
233.24  bands of wages; and 
233.25     (11) benefits paid within separate bands of wages. 
233.26     Sec. 3.  [116J.995] [ECONOMIC GRANTS.] 
233.27     An appropriation rider in an appropriation to the 
233.28  department of trade and economic development that specifies that 
233.29  the appropriation be granted to a particular business or class 
233.30  of businesses must contain a statement of the expected benefits 
233.31  associated with the grant.  At a minimum, the statement must 
233.32  include goals for the number of jobs created, wages paid, and 
233.33  the tax revenue increases due to the grant. 
233.34     Sec. 4.  [REPEALER.] 
233.35     Minnesota Statutes 1998, section 116J.991, is repealed. 
233.36     Sec. 5.  [EFFECTIVE DATE.] 
234.1      Sections 1 to 4 are effective for business subsidies 
234.2   entered into or state appropriations authorized on or after 
234.3   August 1, 1999. 
234.4                              ARTICLE 13 
234.5              TAX FORFEITURE AND DELINQUENCY PROCEDURES 
234.6      Section 1.  Minnesota Statutes 1998, section 92.51, is 
234.7   amended to read: 
234.8      92.51 [TAXATION; REDEMPTION; SPECIAL CERTIFICATE.] 
234.9      State lands sold by the director become taxable.  A 
234.10  description of the tract sold, with the name of the purchaser, 
234.11  must be transmitted to the proper county auditor.  The auditor 
234.12  must extend the land for taxation like other land.  Only the 
234.13  interest in the land vested by the land sale certificate in its 
234.14  holder may be sold for delinquent taxes.  Upon production to the 
234.15  county treasurer of the tax certificate given upon tax sale, in 
234.16  case the lands have not been redeemed, the tax purchaser has the 
234.17  right to pay the principal and interest then in default upon the 
234.18  land sale certificate as its assignee.  To redeem from a tax 
234.19  sale, the person redeeming must pay the county treasurer, for 
234.20  the holder and owner of the tax sale certificate, in addition to 
234.21  all sums required to be paid in other cases, all amounts paid by 
234.22  the holder and owner for interest and principal upon the land 
234.23  sale certificate, with interest at 12 percent per year.  When 
234.24  the director receives the tax certificate with the county 
234.25  auditor's certificate of the expiration of the time for 
234.26  redemption, and the county treasurer's receipt for all 
234.27  delinquent interest and penalty on the land sale certificate, 
234.28  the director shall issue the holder and owner of the tax 
234.29  certificate a special certificate with the same terms and the 
234.30  same effect as the original land sale certificate. 
234.31     Sec. 2.  Minnesota Statutes 1998, section 279.37, 
234.32  subdivision 1, is amended to read: 
234.33     Subdivision 1.  [COMPOSITION INTO ONE ITEM.] Delinquent 
234.34  taxes upon any parcel of real estate may be composed into one 
234.35  item or amount by confession of judgment at any time prior to 
234.36  the forfeiture of the parcel of land to the state for taxes, for 
235.1   the aggregate amount of all the taxes, costs, penalties, and 
235.2   interest accrued against the parcel, as hereinafter provided in 
235.3   this section.  Taxes upon property which, for the previous 
235.4   year's assessment, was classified as mineral property, 
235.5   employment property, or commercial or industrial property shall 
235.6   are only be eligible to be composed into any confession of 
235.7   judgment under this section as provided in subdivision 
235.8   1a.  Delinquent taxes for property that has been reclassified 
235.9   from 4bb to 4b under section 273.1319 may not be composed into a 
235.10  confession of judgment under this subdivision.  Delinquent taxes 
235.11  on unimproved land are eligible to be composed into a confession 
235.12  of judgment only if the land is classified as homestead, 
235.13  agricultural, or timberland in the previous year or is eligible 
235.14  for installment payment under subdivision 1a.  The entire parcel 
235.15  is eligible for the ten-year installment plan as provided in 
235.16  subdivision 2 if 25 percent or more of the market value of the 
235.17  parcel is eligible for confession of judgment under this 
235.18  subdivision. 
235.19     Sec. 3.  Minnesota Statutes 1998, section 279.37, 
235.20  subdivision 1a, is amended to read: 
235.21     Subd. 1a.  [CLASS 3A PROPERTY.] (a) The delinquent taxes 
235.22  upon a parcel of property which was classified class 3a, for the 
235.23  previous year's assessment and had a total market value of less 
235.24  than $200,000 or less for that same assessment shall be eligible 
235.25  to be composed into a confession of judgment.  Property 
235.26  qualifying under this subdivision shall be subject to the same 
235.27  provisions as provided in this section except as herein provided 
235.28  in paragraphs (b) to (d). 
235.29     (a) (b) Current year taxes and penalty due at the time the 
235.30  confession of judgment is entered must be paid. 
235.31     (c) The down payment shall must include all special 
235.32  assessments due in the current tax year, all delinquent special 
235.33  assessments, and 20 percent of the ad valorem tax, penalties, 
235.34  and interest accrued against the parcel.  The balance 
235.35  remaining shall be is payable in four equal annual installments; 
235.36  and 
236.1      (b) (d) The amounts entered in judgment shall bear interest 
236.2   at the rate provided in section 279.03, subdivision 1a, 
236.3   commencing with the date the judgment is entered.  The interest 
236.4   rate is subject to change each year on the unpaid balance in the 
236.5   manner provided in section 279.03, subdivision 1a. 
236.6      Sec. 4.  Minnesota Statutes 1998, section 279.37, 
236.7   subdivision 2, is amended to read: 
236.8      Subd. 2.  [INSTALLMENT PAYMENTS.] The owner of any such 
236.9   parcel, or any person to whom the right to pay taxes has been 
236.10  given by statute, mortgage, or other agreement, may make and 
236.11  file with the county auditor of the county wherein in which the 
236.12  parcel is located a written offer to pay the current taxes each 
236.13  year before they become delinquent, or to contest the taxes 
236.14  under Minnesota Statutes 1941, sections 278.01 to 278.13, and 
236.15  agree to confess judgment for the amount hereinbefore provided, 
236.16  as determined by the county auditor, and shall thereby waive.  
236.17  By filing the offer, the owner waives all irregularities in 
236.18  connection with the tax proceedings affecting the parcel and any 
236.19  defense or objection which the owner may have to the 
236.20  proceedings, and shall thereby waive also waives the 
236.21  requirements of any notice of default in the payment of any 
236.22  installment or interest to become due pursuant to the composite 
236.23  judgment to be so entered, and shall tender therewith.  With the 
236.24  offer, the owner shall tender one-tenth of the amount of the 
236.25  delinquent taxes, costs, penalty, and interest, and shall tender 
236.26  all current year taxes and penalty due at the time the 
236.27  confession of judgment is entered.  In the offer, the owner 
236.28  shall agree therein to pay the balance in nine equal 
236.29  installments, with interest as provided in section 279.03, 
236.30  payable annually on installments remaining unpaid from time to 
236.31  time, on or before December 31 of each year following the year 
236.32  in which judgment was confessed, which.  The offer shall must be 
236.33  substantially as follows: 
236.34     "To the court administrator of the district court of 
236.35  ...........  county, I, ....................., am the owner of 
236.36  the following described parcel of real estate situate located in 
237.1   .................... county, Minnesota, to-wit: 
237.2   .............................. Upon which that real estate there 
237.3   are delinquent taxes for the year ........., and prior years, as 
237.4   follows:  (here insert year of delinquency and the total amount 
237.5   of delinquent taxes, costs, interest, and penalty) do hereby.  
237.6   By signing this document I offer to confess judgment in the sum 
237.7   of $...... and hereby waive all irregularities in the tax 
237.8   proceedings affecting such these taxes and any defense or 
237.9   objection which I may have thereto to them, and direct judgment 
237.10  to be entered for the amount hereby confessed amount stated 
237.11  above, less minus the sum of $............, hereby tendered to 
237.12  be paid with this document, being which is one-tenth of the 
237.13  amount of said the taxes, costs, penalty, and interest; stated 
237.14  above.  I agree to pay the balance of said the judgment in nine 
237.15  equal, annual installments, with interest as provided in section 
237.16  279.03, payable annually, on the installments remaining 
237.17  unpaid from time to time, said.  I agree to pay the installments 
237.18  and interest to be paid on or before December 31 of each year 
237.19  following the year in which this judgment is confessed and 
237.20  current taxes each year before they become delinquent, or within 
237.21  30 days after the entry of final judgment in proceedings to 
237.22  contest such the taxes under Minnesota Statutes 1941, sections 
237.23  278.01 to 278.13. 
237.24     Dated this .............., ......." 
237.25     Sec. 5.  Minnesota Statutes 1998, section 281.23, 
237.26  subdivision 2, is amended to read: 
237.27     Subd. 2.  [MAY COVER PARCELS BID IN AT SAME TAX SALE FORM.] 
237.28  All parcels of land bid in at the same tax judgment sale and 
237.29  having the same period of redemption shall be covered by a 
237.30  single posted notice, but a separate notice may be posted for 
237.31  any parcel which may be omitted.  Such The notice of expiration 
237.32  of redemption must contain the tax parcel identification numbers 
237.33  and legal descriptions of parcels subject to notice of 
237.34  expiration of redemption provisions prescribed under subdivision 
237.35  1.  The notice must also indicate the names of taxpayers and fee 
237.36  owners of record in the office of the county auditor at the time 
238.1   the notice is prepared and names of those parties who have filed 
238.2   their addresses according to section 276.041 and the amount of 
238.3   payment necessary to redeem as of the date of the notice.  At 
238.4   the option of the county auditor, the current filed addresses of 
238.5   affected persons may be included on the notice.  The notice 
238.6   shall be is sufficient if substantially in the following form: 
238.7                 "NOTICE OF EXPIRATION OF REDEMPTION 
238.8      Office of the County Auditor 
238.9      County of ......................., State of Minnesota. 
238.10     To all persons interested having an interest in the lands 
238.11  hereinafter described in this notice: 
238.12     You are hereby notified that the parcels of land 
238.13  hereinafter described, situated in this notice and located in 
238.14  the county of ................................, state of 
238.15  Minnesota, were bid in for the state on the 
238.16  .........................  day of ......................., 
238.17  ......., at the tax judgment sale of land for delinquent taxes 
238.18  for the year .......; that the legal descriptions and tax parcel 
238.19  identification numbers of such parcels and names of the 
238.20  taxpayers and fee owners and in addition those parties who have 
238.21  filed their addresses pursuant to section 276.041, and the 
238.22  amount necessary to redeem as of the date hereof and, at the 
238.23  election of the county auditor, the current filed addresses of 
238.24  any such persons, are as follows: are subject to forfeiture to 
238.25  the state of Minnesota because of nonpayment of delinquent 
238.26  property taxes, special assessments, penalties, interest, and 
238.27  costs levied on those parcels.  The time for redemption from 
238.28  forfeiture expires if a redemption is not made by the later of 
238.29  (1) 60 days after service of this notice on all persons having 
238.30  an interest in the lands of record at the office of the county 
238.31  recorder or registrar of titles, or (2) by the second Monday in 
238.32  May.  The redemption must be made in my office. 
238.33   Names (and 
238.34   Current Filed 
238.35   Addresses) for 
238.36   the Taxpayers 
239.1    and Fee Owners 
239.2    and in Addition 
239.3    Those Parties 
239.4    Who Have Filed                                      Amount
239.5    Their Addresses                        Tax      Necessary to
239.6    Pursuant to               Legal       Parcel    Redeem as of
239.7    section 276.041        Description    Number    Date Hereof
239.8                                                    of Notice
239.9    ................       ...........    ......    ............
239.10   ................       ...........    ......    ............
239.11     That the time for redemption of such lands from such sale 
239.12  will expire 60 days after service of notice and the filing of 
239.13  proof thereof in my office, as provided by law.  The redemption 
239.14  must be made in my office.  
239.15    FAILURE TO REDEEM SUCH THE LANDS PRIOR TO THE EXPIRATION 
239.16        OF REDEMPTION WILL RESULT IN THE LOSS OF THE LAND AND 
239.17        FORFEITURE OF SAID LAND TO THE STATE OF MINNESOTA. 
239.18     Inquiries as to the these proceedings set forth above can 
239.19  be made to the County Auditor for the ............... County of 
239.20  ..............., whose address is set forth below.  
239.21     Witness my hand and official seal this 
239.22  ............................  day of ................, .......  
239.23                                    ......................... 
239.24                                           County Auditor   
239.25     (OFFICIAL SEAL) 
239.26                                    ......................... 
239.27                                           (Address)   
239.28                                    .........................   
239.29                                          (Telephone)."  
239.30     Such The notice shall must be posted by the auditor in the 
239.31  auditor's office, subject to public inspection, and shall must 
239.32  remain so posted until at least one week after the date of the 
239.33  last publication of notice, as hereinafter provided in this 
239.34  section.  Proof of such posting shall must be made by the 
239.35  certificate of the auditor, filed in the auditor's office.  
239.36     Sec. 6.  Minnesota Statutes 1998, section 281.23, 
240.1   subdivision 4, is amended to read:  
240.2      Subd. 4.  [PROOF OF PUBLICATION.] An affidavit establishing 
240.3   proof of publication of such the notice affidavit, as provided 
240.4   by law, shall must be filed in the office of the county 
240.5   auditor.  A single published notice shall be sufficient for all 
240.6   may include parcels of land bid in at the same different tax 
240.7   judgment sale sales, having the same period but included parcels 
240.8   must have a common year for expiration of redemption, and 
240.9   covered by a notice or notices kept posted during the time of 
240.10  the publication, as hereinbefore provided.  
240.11     Sec. 7.  Minnesota Statutes 1998, section 281.23, 
240.12  subdivision 6, is amended to read: 
240.13     Subd. 6.  [SERVICE OF NOTICE.] (a) Forthwith Immediately 
240.14  after the commencement of such publication or mailing the county 
240.15  auditor shall deliver to the sheriff of the county or any other 
240.16  person not less than 18 years of age a sufficient number of 
240.17  copies of such the notice of expiration of redemption for 
240.18  service upon on the persons in possession of all parcels of such 
240.19  land as are actually occupied, and documentation if the 
240.20  certified mail notice was returned as undeliverable or the 
240.21  notice was not mailed to the address associated with the 
240.22  property.  Within 30 days after receipt thereof of the notice, 
240.23  the sheriff or other person serving the notice shall make such 
240.24  investigation investigate as may be necessary to ascertain 
240.25  whether or not the parcels covered by such the notice are 
240.26  actually occupied parcels, and shall serve a copy of such the 
240.27  notice of expiration of redemption upon the person in possession 
240.28  of each parcel found to be an occupied parcel, in the manner 
240.29  prescribed for serving summons in a civil action.  If the 
240.30  sheriff or another person serving the notice has made at least 
240.31  two attempts to serve the notice of expiration of redemption, 
240.32  one between the weekday hours of 8:00 a.m. and 5:00 p.m. and the 
240.33  other on a different day and different time period, the sheriff 
240.34  or another person serving the notice may accomplish this service 
240.35  by posting a copy of the notice of expiration of redemption on a 
240.36  conspicuous location on the parcel.  The sheriff or other person 
241.1   serving the notice shall make prompt return to the auditor as to 
241.2   all notices so served and as to all parcels found vacant and 
241.3   unoccupied and parcels served by posting.  Such The return shall 
241.4   must be made upon on a copy of such the notice and shall be 
241.5   is prima facie evidence of the facts therein stated in it. 
241.6      If the notice is served by the sheriff, the sheriff shall 
241.7   receive from the county, in addition to other compensation 
241.8   prescribed by law, such fees and mileage for service on persons 
241.9   in possession as are prescribed by law for such service in other 
241.10  cases, and shall also receive such compensation for making 
241.11  investigation and return as to vacant and unoccupied lands as 
241.12  the county board may fix, subject to appeal to the district 
241.13  court as in case of other claims against the county.  As to 
241.14  either service upon persons in possession or return as to vacant 
241.15  lands, the sheriff shall charge mileage only for one trip if the 
241.16  occupants of more than two tracts are served simultaneously, and 
241.17  in such case mileage shall must be prorated and charged 
241.18  equitably against all such owners. 
241.19     (b) The secretary of state shall receive sheriff's service 
241.20  for all out-of-state interests. 
241.21     Sec. 8.  Minnesota Statutes 1998, section 282.01, 
241.22  subdivision 1, is amended to read: 
241.23     Subdivision 1.  [CLASSIFICATION AS CONSERVATION OR 
241.24  NONCONSERVATION.] It is the general policy of this state to 
241.25  encourage the best use of tax-forfeited lands, recognizing that 
241.26  some lands in public ownership should be retained and managed 
241.27  for public benefits while other lands should be returned to 
241.28  private ownership.  Parcels of land becoming the property of the 
241.29  state in trust under law declaring the forfeiture of lands to 
241.30  the state for taxes shall must be classified by the county board 
241.31  of the county in which the parcels lie as conservation or 
241.32  nonconservation.  In making the classification the board shall 
241.33  consider the present use of adjacent lands, the productivity of 
241.34  the soil, the character of forest or other growth, accessibility 
241.35  of lands to established roads, schools, and other public 
241.36  services, their peculiar suitability or desirability for 
242.1   particular uses and the suitability of the forest resources on 
242.2   the land for multiple use, sustained yield management.  The 
242.3   classification, furthermore, must encourage and foster a mode of 
242.4   land utilization that will facilitate the economical and 
242.5   adequate provision of transportation, roads, water supply, 
242.6   drainage, sanitation, education, and recreation; facilitate 
242.7   reduction of governmental expenditures; conserve and develop the 
242.8   natural resources; and foster and develop agriculture and other 
242.9   industries in the districts and places best suited to them. 
242.10     In making the classification the county board may use 
242.11  information made available by any office or department of the 
242.12  federal, state, or local governments, or by any other person or 
242.13  agency possessing pertinent information at the time the 
242.14  classification is made.  The lands may be reclassified from time 
242.15  to time as the county board may consider considers necessary or 
242.16  desirable, except for conservation lands held by the state free 
242.17  from any trust in favor of any taxing district.  
242.18     If the lands are located within the boundaries of an 
242.19  organized town, with taxable valuation in excess of $20,000, or 
242.20  incorporated municipality, the classification or 
242.21  reclassification and sale must first be approved by the town 
242.22  board of the town or the governing body of the municipality in 
242.23  which the lands are located.  The town board of the town or the 
242.24  governing body of the municipality is considered to have 
242.25  approved the classification or reclassification and sale if the 
242.26  county board is not notified of the disapproval of the 
242.27  classification or reclassification and sale within 90 60 days of 
242.28  the date the request for approval was transmitted to the town 
242.29  board of the town or governing body of the municipality.  If the 
242.30  town board or governing body desires to acquire any parcel lying 
242.31  in the town or municipality by procedures authorized in this 
242.32  section, it must file a written application with the county 
242.33  board to withhold the parcel from public sale.  The application 
242.34  must be filed within 90 60 days of the request for 
242.35  classification or reclassification and sale.  The county board 
242.36  shall then withhold the parcel from public sale for one year six 
243.1   months.  A municipality or governmental subdivision shall pay 
243.2   maintenance costs incurred by the county during the six-month 
243.3   period while the property is withheld from public sale, provided 
243.4   the property is not offered for public sale after the six-month 
243.5   period.  A clerical error made by county officials does not 
243.6   serve to eliminate the request of the town board or governing 
243.7   body if the board or governing body has forwarded the 
243.8   application to the county auditor. 
243.9      Sec. 9.  Minnesota Statutes 1998, section 282.01, 
243.10  subdivision 4, is amended to read: 
243.11     Subd. 4.  [SALE:  METHOD, REQUIREMENTS, EFFECTS.] The sale 
243.12  shall must be conducted by the county auditor at the county seat 
243.13  of the county in which the parcels lie, provided except that, in 
243.14  St. Louis and Koochiching counties, the sale may be conducted in 
243.15  any county facility within the county, and.  The parcels shall 
243.16  must be sold for cash only and at not less than the appraised 
243.17  value, unless the county board of the county shall have has 
243.18  adopted a resolution providing for their sale on terms, in which 
243.19  event the resolution shall control controls with respect thereto 
243.20  to the sale.  When the sale is made on terms other than for cash 
243.21  only (1) a payment of at least ten percent of the purchase price 
243.22  must be made at the time of purchase, thereupon and the balance 
243.23  shall must be paid in no more than ten equal annual 
243.24  installments, or (2) the payments must be made in accordance 
243.25  with county board policy, but in no event may the board require 
243.26  more than 12 installments annually, and the contract term must 
243.27  not be for more than ten years.  No Standing timber or timber 
243.28  products shall must not be removed from these lands until an 
243.29  amount equal to the appraised value of all standing timber or 
243.30  timber products on the lands at the time of purchase has been 
243.31  paid by the purchaser; provided, that in case any.  If a parcel 
243.32  of land bearing standing timber or timber products is sold at 
243.33  public auction for more than the appraised value, the amount bid 
243.34  in excess of the appraised value shall must be allocated between 
243.35  the land and the timber in proportion to the their respective 
243.36  appraised values thereof, and no.  In that case, standing timber 
244.1   or timber products shall must not be removed from the land until 
244.2   the amount of the excess bid allocated to timber or timber 
244.3   products has been paid in addition to the appraised 
244.4   value thereof of the land.  The purchaser is entitled to 
244.5   immediate possession, subject to the provisions of any existing 
244.6   valid lease made in behalf of the state. 
244.7      For sales occurring on or after July 1, 1982, the unpaid 
244.8   balance of the purchase price is subject to interest at the rate 
244.9   determined pursuant to section 549.09.  The unpaid balance of 
244.10  the purchase price for sales occurring after December 31, 1990, 
244.11  is subject to interest at the rate determined in section 279.03, 
244.12  subdivision 1a.  The interest rate is subject to change each 
244.13  year on the unpaid balance in the manner provided for rate 
244.14  changes in section 549.09 or 279.03, subdivision 1a, whichever, 
244.15  is applicable.  Interest on the unpaid contract balance on sales 
244.16  occurring before July 1, 1982, is payable at the rate applicable 
244.17  to the sale at the time that the sale occurred.  
244.18     Sec. 10.  Minnesota Statutes 1998, section 282.01, 
244.19  subdivision 7, is amended to read: 
244.20     Subd. 7.  [COUNTY SALES; NOTICE, PURCHASE PRICE, 
244.21  DISPOSITION.] The sale herein provided for shall must commence 
244.22  at such the time as determined by the county board of the county 
244.23  wherein such in which the parcels lie, shall direct are 
244.24  located.  The county auditor shall offer the parcels of land in 
244.25  order in which they appear in the notice of sale, and shall sell 
244.26  them to the highest bidder, but not for a less sum less than the 
244.27  appraised value, until all of the parcels of land shall have 
244.28  been offered, and thereafter.  Then the county auditor shall 
244.29  sell any remaining parcels to anyone offering to pay the 
244.30  appraised value thereof, except that if the person could have 
244.31  repurchased a parcel of property under section 282.012 or 
244.32  282.241, that person shall not be allowed to may not purchase 
244.33  that same parcel of property at the sale under this subdivision 
244.34  for a purchase price less than the sum of all delinquent taxes 
244.35  and, assessments, penalties, interest, and costs due at the time 
244.36  of forfeiture computed under section 282.251, together with 
245.1   penalties, interest, and costs that accrued or would have 
245.2   accrued if the parcel had not forfeited to the state and any 
245.3   special assessments for improvements certified as of the date of 
245.4   sale.  Said The sale shall must continue until all such 
245.5   the parcels are sold or until the county board shall order 
245.6   orders a reappraisal or shall withdraw withdraws any or all such 
245.7   of the parcels from sale.  Such The list of lands may be added 
245.8   to and the added lands may be sold at any time by publishing the 
245.9   descriptions and appraised values of such.  The added lands must 
245.10  be:  (1) parcels of land as shall that have become forfeited and 
245.11  classified as nonconservation since the commencement of any 
245.12  prior sale or such; (2) parcels as shall that have been 
245.13  reappraised, or such; (3) parcels as shall that have been 
245.14  reclassified as nonconservation; or such (4) other parcels as 
245.15  that are subject to sale but were omitted from the existing list 
245.16  for any reason.  The descriptions and appraised values must be 
245.17  published in the same manner as hereinafter provided for the 
245.18  publication of the original list, provided that any.  Parcels 
245.19  added to such the list shall must first be offered for sale to 
245.20  the highest bidder before they are sold at appraised value.  All 
245.21  parcels of land not offered for immediate sale, as well as 
245.22  parcels of such lands as that are offered and not immediately 
245.23  sold shall, continue to be held in trust by the state for the 
245.24  taxing districts interested in each of said the parcels, under 
245.25  the supervision of the county board, and such.  Those parcels 
245.26  may be used for public purposes until sold, as directed by the 
245.27  county board may direct. 
245.28     Sec. 11.  Minnesota Statutes 1998, section 282.04, 
245.29  subdivision 2, is amended to read: 
245.30     Subd. 2.  [RIGHTS BEFORE SALE; IMPROVEMENTS, INSURANCE, 
245.31  DEMOLITION.] Until after Before the sale of a parcel of 
245.32  forfeited land the county auditor may, with the approval of the 
245.33  county board of commissioners, provide for the repair and 
245.34  improvement of any building or structure located upon such the 
245.35  parcel, and may provide for maintenance of tax-forfeited lands, 
245.36  if it is determined by the county board that such repairs or, 
246.1   improvements, or maintenance are necessary for the operation, 
246.2   use, preservation and safety thereof; and, of the building or 
246.3   structure.  If so authorized by the county board, the county 
246.4   auditor may insure any such the building or structure against 
246.5   loss or damage resulting from fire or windstorm, may purchase 
246.6   workers' compensation insurance to insure the county against 
246.7   claims for injury to the persons therein employed in the 
246.8   building or structure by the county, and may insure the county, 
246.9   its officers and employees against claims for injuries to 
246.10  persons or property because of the management, use or operation 
246.11  of such the building or structure.  Such The county auditor may, 
246.12  with the approval of the county board, provide for the 
246.13  demolition of any such the building or structure, which has been 
246.14  determined by the county board to be within the purview of 
246.15  section 299F.10, and for the sale of salvaged 
246.16  materials therefrom from the building or structure.  Such The 
246.17  county auditor, with the approval of the county board, may 
246.18  provide for the sale of abandoned personal property under either 
246.19  chapter 345 or 566, as appropriate.  The net proceeds from any 
246.20  sale of such the personal property, salvaged materials, of 
246.21  timber or other products, or leases made under this law shall 
246.22  must be deposited in the forfeited tax sale fund and shall must 
246.23  be distributed in the same manner as if the parcel had been sold.
246.24     Such The county auditor, with the approval of the county 
246.25  board, may provide for the demolition of any structure or 
246.26  structures on tax-forfeited lands, if in the opinion of the 
246.27  county board, the county auditor, and the land commissioner, if 
246.28  there be is one, the sale of such the land with such the 
246.29  structure or structures thereon on it, or the continued 
246.30  existence of such the structure or structures by reason of age, 
246.31  dilapidated condition or excessive size as compared with nearby 
246.32  structures, will result in a material lessening of net tax 
246.33  capacities of real estate in the vicinity of such the 
246.34  tax-forfeited lands, or if the demolition of such the structure 
246.35  or structures will aid in disposing of such the tax-forfeited 
246.36  property. 
247.1      Before the sale of a parcel of forfeited land located in an 
247.2   urban area, the county auditor may with the approval of the 
247.3   county board provide for the grading thereof of the land by 
247.4   filling or the removal of any surplus material therefrom, and 
247.5   where from it.  If the physical condition of forfeited lands is 
247.6   such that a reasonable grading thereof of the lands is necessary 
247.7   for the protection and preservation of the property of any 
247.8   adjoining owner, such the adjoining property owner or owners may 
247.9   make application apply to the county board to have such the 
247.10  grading done.  If, after considering said the application, the 
247.11  county board believes that such the grading will enhance the 
247.12  value of such the forfeited lands commensurate with the cost 
247.13  involved, it may approve the same it, and any such the work 
247.14  shall must be performed under the supervision of the county or 
247.15  city engineer, as the case may be, and the expense thereof paid 
247.16  from the forfeited tax sale fund. 
247.17     Sec. 12.  Minnesota Statutes 1998, section 282.05, is 
247.18  amended to read: 
247.19     282.05 [PROCEEDS APPORTIONED.] 
247.20     The net proceeds received from the sale or rental of 
247.21  forfeited lands shall be apportioned to the general funds of the 
247.22  state or municipal subdivision thereof, in the manner 
247.23  hereinafter provided, and shall be first used by the municipal 
247.24  subdivision to retire any indebtedness then existing in section 
247.25  282.08.  
247.26     Sec. 13.  Minnesota Statutes 1998, section 282.08, is 
247.27  amended to read: 
247.28     282.08 [APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.] 
247.29     The net proceeds from the sale or rental of any parcel of 
247.30  forfeited land, or from the sale of any products therefrom from 
247.31  the forfeited land, shall must be apportioned by the county 
247.32  auditor to the taxing districts interested therein in the land, 
247.33  as follows: 
247.34     (1) Such the portion as may be required to pay any amounts 
247.35  included in the appraised value under section 282.01, 
247.36  subdivision 3, as representing increased value due to any public 
248.1   improvement made after forfeiture of such the parcel to the 
248.2   state, but not exceeding the amount certified by the clerk of 
248.3   the municipality, shall must be apportioned to the municipal 
248.4   subdivision entitled thereto to it; 
248.5      (2) Such the portion as may be required to pay any amount 
248.6   included in the appraised value under section 282.019, 
248.7   subdivision 5, representing increased value due to response 
248.8   actions taken after forfeiture of such the parcel to the state, 
248.9   but not exceeding the amount of expenses certified by the 
248.10  pollution control agency or the commissioner of 
248.11  agriculture, shall must be apportioned to the agency or the 
248.12  commissioner of agriculture and deposited in the fund from which 
248.13  the expenses were paid; 
248.14     (3) Such the portion of the remainder as may be required to 
248.15  discharge any special assessment chargeable against such the 
248.16  parcel for drainage or other purpose whether due or deferred at 
248.17  the time of forfeiture, shall must be apportioned to the 
248.18  municipal subdivision entitled thereto to it; and 
248.19     (4) any balance shall must be apportioned as follows: 
248.20     (a) Any (i) The county board may annually by resolution set 
248.21  aside no more than 30 percent of the receipts remaining to be 
248.22  used for timber development on tax-forfeited land and dedicated 
248.23  memorial forests, to be expended under the supervision of the 
248.24  county board.  It shall must be expended only on projects 
248.25  approved by the commissioner of natural resources. 
248.26     (b) Any (ii) The county board may annually by resolution 
248.27  set aside no more than 20 percent of the receipts remaining to 
248.28  be used for the acquisition and maintenance of county parks or 
248.29  recreational areas as defined in sections 398.31 to 398.36, to 
248.30  be expended under the supervision of the county board. 
248.31     (c) If the board does not avail itself of the authority 
248.32  under paragraph (a) or (b) (iii) Any balance remaining shall 
248.33  must be apportioned as follows:  county, 40 percent; town or 
248.34  city, 20 percent; and school district, 40 percent, and if the 
248.35  board avails itself of the authority under paragraph (a) or (b) 
248.36  the balance remaining shall be apportioned among the county, 
249.1   town or city, and school district in the proportions in this 
249.2   paragraph above stated, provided, however, that in unorganized 
249.3   territory that portion which should would have accrued to the 
249.4   township shall must be administered by the county board of 
249.5   commissioners. 
249.6      Sec. 14.  Minnesota Statutes 1998, section 282.09, is 
249.7   amended to read: 
249.8      282.09 [FORFEITED TAX SALE FUND.] 
249.9      Subdivision 1.  [MONEY PLACED IN FUND; FEES AND 
249.10  DISBURSEMENTS.] The county auditor and county treasurer shall 
249.11  place all money received through the operation of sections 
249.12  282.01 to 282.13 in a fund to be known as the forfeited tax sale 
249.13  fund, and all disbursements and costs shall must be charged 
249.14  against that fund, when allowed by the county board.  Members of 
249.15  the county board may be paid a per diem pursuant to section 
249.16  375.055, subdivision 1, and reimbursed for their necessary 
249.17  expenses, and may receive mileage as fixed by law.  The amount 
249.18  of compensation of a land commissioner and assistants, if a land 
249.19  commissioner is appointed, shall must be in the amount 
249.20  determined by the county board.  The county auditor shall must 
249.21  receive 50 cents for each certificate of sale, each contract for 
249.22  deed and each lease executed by the auditor, and, in counties 
249.23  where no land commissioner is appointed, additional annual 
249.24  compensation, not exceeding $300, as fixed by the county board.  
249.25  The amount of compensation of any other clerical help that may 
249.26  be needed by the county auditor or land commissioner shall must 
249.27  be in the amount determined by the county board.  All 
249.28  compensation provided for herein shall be in this subdivision is 
249.29  in addition to other compensation allowed by law.  Fees so 
249.30  charged in addition to the fee imposed in section 282.014 shall 
249.31  must be included in the annual settlement by the county auditor 
249.32  as hereinafter provided.  On or before February 1 each year, the 
249.33  commissioner of revenue shall certify to the commissioner of 
249.34  finance, by counties, the total number of state deeds issued and 
249.35  reissued during the preceding calendar year for which such fees 
249.36  are charged and the total amount thereof of fees.  On or before 
250.1   March 1 each year, each county shall remit to the commissioner 
250.2   of revenue, from the forfeited tax sale fund, the aggregate 
250.3   amount of the fees imposed by section 282.014 in the preceding 
250.4   calendar year.  The commissioner of revenue shall deposit the 
250.5   amounts received in the state treasury to the credit of the 
250.6   general fund.  When disbursements are made from the fund for 
250.7   repairs, refunds, expenses of actions to quiet title, or any 
250.8   other purpose which particularly affects specific parcels of 
250.9   forfeited lands, the amount of such the disbursements shall must 
250.10  be charged to the account of the taxing districts interested in 
250.11  such parcels forfeited tax sale fund.  The county auditor shall 
250.12  make an annual settlement of the net proceeds received from 
250.13  sales and rentals by the operation of sections 282.01 to 282.13, 
250.14  on the settlement day determined in section 276.09, for the 
250.15  preceding calendar year. 
250.16     Subd. 2.  [EXPENDITURES.] In all counties, from said 
250.17  "Forfeited Tax Sale Fund," the authorities duly charged with the 
250.18  execution of responsible for carrying out the duties imposed by 
250.19  sections 282.01 to 282.13, at their discretion, may expend 
250.20  moneys in repairing from the forfeited tax sale fund to repair 
250.21  any sewer or water main either inside or outside of any curb 
250.22  line situated along any property forfeited to the state for 
250.23  nonpayment of taxes, to acquire and maintain equipment used 
250.24  exclusively for the maintenance and improvement of tax-forfeited 
250.25  lands, and to cut down, otherwise destroy or eradicate noxious 
250.26  weeds on all tax-forfeited lands.  In any year, the money to be 
250.27  expended for the cutting down, destruction or eradication of 
250.28  noxious weeds shall not exceed in amount more than ten percent 
250.29  of the net proceeds of said "Forfeited Tax Sale Fund" during the 
250.30  preceding calendar year, or $10,000, whichever is the lesser 
250.31  sum, and to maintain tax-forfeited lands.  
250.32     Sec. 15.  Minnesota Statutes 1998, section 282.241, is 
250.33  amended to read: 
250.34     282.241 [REPURCHASE AFTER FORFEITURE.] 
250.35     The owner at the time of forfeiture, or the owner's heirs, 
250.36  devisees, or representatives, or any person to whom the right to 
251.1   pay taxes was given by statute, mortgage, or other agreement, 
251.2   may repurchase any parcel of land claimed by the state to be 
251.3   forfeited to the state for taxes unless before the time 
251.4   repurchase is made the parcel is sold under installment 
251.5   payments, or otherwise, by the state as provided by law, or is 
251.6   under mineral prospecting permit or lease, or proceedings have 
251.7   been commenced by the state or any of its political subdivisions 
251.8   or by the United States to condemn such the parcel of land.  The 
251.9   parcel of land may be repurchased for the sum of all delinquent 
251.10  taxes and assessments computed under section 282.251, together 
251.11  with penalties, interest, and costs, that accrued or would have 
251.12  accrued if the parcel of land had not forfeited to the state.  
251.13  Except for property which was homesteaded on the date of 
251.14  forfeiture, such repurchase shall be is permitted during one 
251.15  year only from the date of forfeiture, and in any case only 
251.16  after the adoption of a resolution by the board of county 
251.17  commissioners determining that thereby by repurchase undue 
251.18  hardship or injustice resulting from the forfeiture will be 
251.19  corrected, or that permitting such the repurchase will promote 
251.20  the use of such the lands that will best serve the public 
251.21  interest.  If the county board has good cause to believe that a 
251.22  repurchase installment payment plan for a particular parcel is 
251.23  unnecessary and not in the public interest, the county board may 
251.24  require as a condition of repurchase that the entire repurchase 
251.25  price be paid at the time of repurchase.  A repurchase shall 
251.26  be is subject to any easement, lease, or other encumbrance 
251.27  granted by the state prior thereto before the repurchase, and if 
251.28  said the land is located within a restricted area established by 
251.29  any county under Laws 1939, chapter 340, such the repurchase 
251.30  shall must not be permitted unless said the resolution with 
251.31  respect thereto approving the repurchase is adopted by the 
251.32  unanimous vote of the board of county commissioners. 
251.33     The person seeking to repurchase under this section shall 
251.34  pay all maintenance costs incurred by the county auditor during 
251.35  the time the property was tax-forfeited. 
251.36     Sec. 16.  Minnesota Statutes 1998, section 282.261, 
252.1   subdivision 4, is amended to read: 
252.2      Subd. 4.  [SERVICE FEE.] The county auditor may collect a 
252.3   service fee to cover administrative costs as set by the county 
252.4   board for each repurchase contract approved application received 
252.5   after July 1, 1985.  The fee shall must be paid at the time of 
252.6   repurchase application and shall must be credited to the county 
252.7   general revenue fund. 
252.8      Sec. 17.  Minnesota Statutes 1998, section 282.261, is 
252.9   amended by adding a subdivision to read: 
252.10     Subd. 5.  [COUNTY MAY IMPOSE CONDITIONS OF REPURCHASE.] The 
252.11  county auditor, after receiving county board approval, may 
252.12  impose conditions on repurchase of tax-forfeited lands limiting 
252.13  the use of the parcel subject to the repurchase, including, but 
252.14  not limited to, environmental remediation action plan 
252.15  restrictions or covenants, or easements for lines or equipment 
252.16  for telephone, telegraph, electric power, or telecommunications. 
252.17     Sec. 18.  Minnesota Statutes 1998, section 283.10, is 
252.18  amended to read: 
252.19     283.10 [APPLICATION MUST BE MADE WITHIN TWO YEARS.] 
252.20     No such refundment refund shall be granted unless an 
252.21  application therefor shall be duly for refund is approved and 
252.22  presented to the commissioner of revenue within two years from 
252.23  the date of such tax certificate or the state assignment 
252.24  certificate.  
252.25     Sec. 19.  Minnesota Statutes 1998, section 375.192, 
252.26  subdivision 2, is amended to read: 
252.27     Subd. 2.  [PROCEDURE, CONDITIONS.] Upon written application 
252.28  by the owner of any property, the county board may grant the 
252.29  reduction or abatement of estimated market valuation or taxes 
252.30  and of any costs, penalties, or interest on them as the board 
252.31  deems just and equitable and order the refund in whole or part 
252.32  of any taxes, costs, penalties, or interest which have been 
252.33  erroneously or unjustly paid.  Except as provided in sections 
252.34  469.1812 to 469.1815, no reduction or abatement may be granted 
252.35  on the basis of providing an incentive for economic development 
252.36  or redevelopment.  Except as provided in section 375.194, the 
253.1   county board is authorized to may consider and grant reductions 
253.2   or abatements on applications only as they relate to taxes 
253.3   payable in the current year and the two prior years; provided 
253.4   that reductions or abatements for the two prior years shall be 
253.5   considered or granted only for (i) clerical errors, or (ii) when 
253.6   the taxpayer fails to file for a reduction or an adjustment due 
253.7   to hardship, as determined by the county board.  The application 
253.8   must include the social security number of the applicant.  The 
253.9   social security number is private data on individuals as defined 
253.10  by section 13.02, subdivision 12.  All applications must be 
253.11  approved by the county assessor, or, if the property is located 
253.12  in a city of the first or second class having a city assessor, 
253.13  by the city assessor, and by the county auditor before 
253.14  consideration by the county board, except that the part of the 
253.15  application which is for the abatement of penalty or interest 
253.16  must be approved by the county treasurer and county auditor.  
253.17  Approval by the county or city assessor is not required for 
253.18  abatements of penalty or interest.  No reduction, abatement, or 
253.19  refund of any special assessments made or levied by any 
253.20  municipality for local improvements shall be made unless it is 
253.21  also approved by the board of review or similar taxing authority 
253.22  of the municipality.  Before taking action On any reduction or 
253.23  abatement where when the reduction of taxes, costs, penalties, 
253.24  and interest exceed $10,000, the county board shall give 20 
253.25  days' notice within 20 days to the school board and the 
253.26  municipality in which the property is located.  The notice must 
253.27  describe the property involved, the actual amount of the 
253.28  reduction being sought, and the reason for the reduction.  If 
253.29  the school board or the municipality object to the granting of 
253.30  the reduction or abatement, the county board must refer the 
253.31  abatement or reduction to the commissioner of revenue with its 
253.32  recommendation.  The commissioner shall consider the abatement 
253.33  or reduction under section 270.07, subdivision 1.  
253.34     An appeal may not be taken to the tax court from any order 
253.35  of the county board made in the exercise of the discretionary 
253.36  authority granted in this section.  
254.1      The county auditor shall notify the commissioner of revenue 
254.2   of all abatements resulting from the erroneous classification of 
254.3   real property, for tax purposes, as nonhomestead property.  For 
254.4   the abatements relating to the current year's tax processed 
254.5   through June 30, the auditor shall notify the commissioner on or 
254.6   before July 31 of that same year of all abatement applications 
254.7   granted.  For the abatements relating to the current year's tax 
254.8   processed after June 30 through the balance of the year, the 
254.9   auditor shall notify the commissioner on or before the following 
254.10  January 31 of all applications granted.  The county auditor 
254.11  shall submit a form containing the social security number of the 
254.12  applicant and such other information the commissioner prescribes.
254.13     Sec. 20.  Minnesota Statutes 1998, section 383C.482, 
254.14  subdivision 1, is amended to read: 
254.15     Subdivision 1.  [AUDITOR TO SEARCH RECORDS; CERTIFICATES.] 
254.16  The St. Louis county auditor, upon written application of any 
254.17  person, shall make search of the records of the auditor's office 
254.18  and the county treasurer's office, and ascertain the amount of 
254.19  current tax against any lot or parcel of land described in the 
254.20  application and the existence of all tax liens and tax sales as 
254.21  to such the lot or parcel of land, and certify the result of 
254.22  such the search under the seal of office, giving the description 
254.23  of the lot or parcel of land, the amount of the current tax, if 
254.24  any, and all tax liens and tax sales shown by such records, and 
254.25  the amount thereof of liens and tax sales, the year of tax 
254.26  covered by such the lien, and the date of tax sale, and the name 
254.27  of the purchaser at such tax sale.  For the purpose of 
254.28  ascertaining the current tax against such a lot or parcel of 
254.29  land, the county auditor has the right of access to the records 
254.30  of current taxes in the office of the county treasurer.  
254.31     Sec. 21.  [REPEALER.] 
254.32     Minnesota Statutes 1998, sections 92.22; 280.27; 281.13; 
254.33  281.38; 284.01; 284.02; 284.03; 284.04; 284.05; and 284.06, are 
254.34  repealed. 
254.35     Sec. 22.  [EFFECTIVE DATES.] 
254.36     This article is effective September 1, 1999, except that 
255.1   sections 11 and 13 to 15 are effective beginning January 1, 
255.2   2000, and except that section 12 is effective for net proceeds 
255.3   received after the date of final enactment of this act. 
255.4                              ARTICLE 14 
255.5                  WATER AND SANITARY SEWER DISTRICTS 
255.6      Section 1.  [CEDAR LAKE AREA WATER AND SANITARY SEWER 
255.7   DISTRICT; DEFINITIONS.] 
255.8      Subdivision 1.  [APPLICATION.] In sections 1 to 19, the 
255.9   definitions in this section apply. 
255.10     Subd. 2.  [DISTRICT.] "Cedar lake area water and sanitary 
255.11  sewer district" and "district" mean the area over which the 
255.12  Cedar lake area water and sanitary sewer board has jurisdiction, 
255.13  which includes the area within the city of New Prague and Helena 
255.14  and Cedar Lake townships in Scott county.  The district shall 
255.15  precisely describe the area over which it has jurisdiction by a 
255.16  metes and bounds description in the comprehensive plan adopted 
255.17  pursuant to section 5.  The territory may not be larger than the 
255.18  area encompassed by the Cedar Lake improvement district, but it 
255.19  may be smaller and the area may include a route along public 
255.20  rights-of-way from Cedar Lake to the city of New Prague along 
255.21  which the sewer main is laid. 
255.22     Subd. 3.  [BOARD.] "Water and sanitary sewer board" or 
255.23  "board" means the Cedar lake area water and sanitary sewer board 
255.24  established for the district as provided in subdivision 2. 
255.25     Subd. 4.  [PERSON.] "Person" means an individual, 
255.26  partnership, corporation, limited liability company, 
255.27  cooperative, or other organization or entity, public or private. 
255.28     Subd. 5.  [LOCAL GOVERNMENTAL UNITS.] "Local governmental 
255.29  units" or "governmental units" means Scott county, the city of 
255.30  New Prague, and Helena and Cedar Lake Townships in Scott county. 
255.31     Subd. 6.  [ACQUISITION; BETTERMENT.] "Acquisition" and 
255.32  "betterment" have the meanings given in Minnesota Statutes, 
255.33  section 475.51. 
255.34     Subd. 7.  [AGENCY.] "Agency" means the Minnesota pollution 
255.35  control agency created in Minnesota Statutes, section 116.02. 
255.36     Subd. 8.  [SEWAGE.] "Sewage" means all liquid or 
256.1   water-carried waste products from whatever sources derived, 
256.2   together with any groundwater infiltration and surface water as 
256.3   may be present. 
256.4      Subd. 9.  [POLLUTION OF WATER; SEWER SYSTEM.] "Pollution of 
256.5   water" and "sewer system" have the meanings given in Minnesota 
256.6   Statutes, section 115.01. 
256.7      Subd. 10.  [TREATMENT WORKS; DISPOSAL SYSTEM.] "Treatment 
256.8   works" and "disposal system" have the meanings given in 
256.9   Minnesota Statutes, section 115.01. 
256.10     Subd. 11.  [INTERCEPTOR.] "Interceptor" means a sewer and 
256.11  its necessary appurtenances, including but not limited to mains, 
256.12  pumping stations, and sewage flow-regulating and -measuring 
256.13  stations, that is: 
256.14     (1) designed for or used to conduct sewage originating in 
256.15  more than one local governmental unit; 
256.16     (2) designed or used to conduct all or substantially all 
256.17  the sewage originating in a single local governmental unit from 
256.18  a point of collection in that unit to an interceptor or 
256.19  treatment works outside that unit; or 
256.20     (3) determined by the board to be a major collector of 
256.21  sewage used or designed to serve a substantial area in the 
256.22  district. 
256.23     Subd. 12.  [DISTRICT DISPOSAL SYSTEM.] "District disposal 
256.24  system" means any and all interceptors or treatment works owned, 
256.25  constructed, or operated by the board unless designated by the 
256.26  board as local water and sanitary sewer facilities. 
256.27     Subd. 13.  [MUNICIPALITY.] "Municipality" means any town or 
256.28  home rule charter or statutory city. 
256.29     Subd. 14.  [TOTAL COSTS.] "Total costs of acquisition and 
256.30  betterment" and "costs of acquisition and betterment" mean all 
256.31  acquisition and betterment expenses permitted to be financed out 
256.32  of stopped bond proceeds issued in accordance with section 13, 
256.33  whether or not the expenses are in fact financed out of the bond 
256.34  proceeds. 
256.35     Subd. 15.  [CURRENT COSTS.] "Current costs of acquisition, 
256.36  betterment, and debt service" means interest and principal 
257.1   estimated to be due during the budget year on bonds issued to 
257.2   finance said acquisition and betterment and all other costs of 
257.3   acquisition and betterment estimated to be paid during the year 
257.4   from funds other than bond proceeds and federal or state grants. 
257.5      Subd. 16.  [RESIDENT.] "Resident" means the owner of a 
257.6   dwelling located in the district and receiving water or sewer 
257.7   service. 
257.8      Sec. 2.  [WATER AND SANITARY SEWER BOARD.] 
257.9      Subdivision 1.  [ESTABLISHMENT.] A water and sanitary sewer 
257.10  district is established in Helena and Cedar Lake townships and 
257.11  the city of New Prague in Scott county, to be known as the Cedar 
257.12  lake area water and sanitary sewer district.  The water and 
257.13  sewer district is under the control and management of the Cedar 
257.14  lake area water and sanitary sewer board.  The board is 
257.15  established as a public corporation and political subdivision of 
257.16  the state with perpetual succession and all the rights, powers, 
257.17  privileges, immunities, and duties granted to or imposed upon a 
257.18  municipal corporation, as provided in sections 1 to 19.  
257.19     Subd. 2.  [MEMBERS AND SELECTION.] The board is composed of 
257.20  seven members selected as provided in this subdivision.  Each of 
257.21  the town boards of the townships shall meet to appoint two 
257.22  residents to the water and sanitary sewer board.  The township 
257.23  appointees must live on Cedar lake and must be served by the 
257.24  system.  One member must be selected by the city of New Prague.  
257.25  Two members must be selected by the Scott county board of 
257.26  commissioners.  Each member has one vote.  The first terms are 
257.27  as follows:  two for one year, two for two years, and three for 
257.28  three years, fixed by lot at the district's first meeting.  
257.29  Thereafter, all terms are for three years. 
257.30     Subd. 3.  [TIME LIMITS FOR SELECTION.] The board members 
257.31  must be selected as provided in subdivision 2 within 60 days 
257.32  after sections 1 to 19 are effective.  The successor to each 
257.33  board member must be selected at any time within 60 days before 
257.34  the expiration of the member's term in the same manner as the 
257.35  predecessor was selected.  A vacancy on the board must be filled 
257.36  within 60 days after it occurs. 
258.1      Subd. 4.  [VACANCIES.] If the office of a board member 
258.2   becomes vacant, the vacancy must be filled for the unexpired 
258.3   term in the manner provided for selection of the member who 
258.4   vacated the office.  The office is deemed vacant under the 
258.5   conditions specified in Minnesota Statutes, section 351.02. 
258.6      Subd. 5.  [REMOVAL.] A board member may be removed by the 
258.7   unanimous vote of the governing body appointing the member, with 
258.8   or without cause, or for malfeasance or nonfeasance in the 
258.9   performance of official duties as provided by Minnesota 
258.10  Statutes, sections 351.14 to 351.23. 
258.11     Subd. 6.  [CERTIFICATES OF SELECTION; OATH OF OFFICE.] A 
258.12  certificate of selection of every board member selected under 
258.13  subdivision 2 stating the term for which selected, must be made 
258.14  by the respective town clerks.  The certificates, with the 
258.15  approval appended by other authority, if required, must be filed 
258.16  with the secretary of state.  Counterparts thereof must be 
258.17  furnished to the board member and the secretary of the board.  
258.18  Each member shall qualify by taking and subscribing the oath of 
258.19  office prescribed by the Minnesota Constitution, article 5, 
258.20  section 8.  The oath, duly certified by the official 
258.21  administering the same, must be filed with the secretary of 
258.22  state and the secretary of the board. 
258.23     Subd. 7.  [BOARD MEMBERS' COMPENSATION.] Each board member, 
258.24  except the chair, may be paid a per diem compensation in 
258.25  accordance with the board's bylaws for meetings and for other 
258.26  services as are specifically authorized by the board, not to 
258.27  exceed the per diem amount under Minnesota Statutes, section 
258.28  15.0575, subdivision 3, and not to exceed $1,000 in any one year.
258.29  The chair may be paid a per diem compensation in accordance with 
258.30  the board's bylaws for meetings and for other services 
258.31  specifically authorized by the board, not to exceed the per diem 
258.32  amount under Minnesota Statutes, section 15.0575, subdivision 3, 
258.33  and not to exceed $1,500 in any one year.  All members of the 
258.34  board must be reimbursed for all reasonable and necessary 
258.35  expenses actually incurred in the performance of duties. 
258.36     Sec. 3.  [GENERAL PROVISIONS FOR ORGANIZATION AND OPERATION 
259.1   OF BOARD.] 
259.2      Subdivision 1.  [ORGANIZATION; OFFICERS; MEETINGS; 
259.3   SEAL.] After the selection and qualification of all board 
259.4   members, the board must meet to organize the board at the call 
259.5   of any two board members, upon seven days' notice by registered 
259.6   mail to the remaining board members, at a time and place within 
259.7   the district specified in the notice.  A majority of the members 
259.8   is a quorum at that meeting and all other meetings of the board, 
259.9   but a lesser number may meet and adjourn from time to time and 
259.10  compel the attendance of absent members.  At the first meeting 
259.11  the board shall select its officers and conduct other 
259.12  organizational business as may be necessary.  Thereafter the 
259.13  board shall meet regularly at the time and place that the board 
259.14  designates by resolution.  Special meetings may be held at any 
259.15  time upon call of the chair or any two members, upon written 
259.16  notice sent by mail to each member at least three days before 
259.17  the meeting, or upon other notice as the board by resolution may 
259.18  provide, or without notice if each member is present or files 
259.19  with the secretary a written consent to the meeting either 
259.20  before or after the meeting.  Except as otherwise provided in 
259.21  sections 1 to 19, any action within the authority of the board 
259.22  may be taken by the affirmative vote of a majority of the board 
259.23  and may be taken by regular or adjourned regular meeting or at a 
259.24  duly held special meeting, but in any case only if a quorum is 
259.25  present.  Meetings of the board must be open to the public.  The 
259.26  board may adopt a seal, which must be officially and judicially 
259.27  noticed, to authenticate instruments executed by its authority, 
259.28  but omission of the seal does not affect the validity of any 
259.29  instrument. 
259.30     Subd. 2.  [CHAIR.] The board shall elect a chair from its 
259.31  membership.  The term of the first chair of the board expires on 
259.32  January 1, 2001, and the terms of successor chairs expire on 
259.33  January 1 of each succeeding year.  The chair shall preside at 
259.34  all meetings of the board, if present, and shall perform all 
259.35  other duties and functions usually incumbent upon such an 
259.36  officer, and all administrative functions assigned to the chair 
260.1   by the board.  The board shall elect a vice-chair from its 
260.2   membership to act for the chair during temporary absence or 
260.3   disability. 
260.4      Subd. 3.  [SECRETARY AND TREASURER.] The board shall select 
260.5   persons who may, but need not be, members of the board, to act 
260.6   as its secretary and treasurer.  The two offices may be combined.
260.7   The secretary and treasurer shall hold office at the pleasure of 
260.8   the board, subject to the terms of any contract of employment 
260.9   that the board may enter into with the secretary or treasurer.  
260.10  The secretary shall record the minutes of all meetings of the 
260.11  board, and be the custodian of all books and records of the 
260.12  board except those that the board entrusts to the custody of a 
260.13  designated employee.  The treasurer is the custodian of all 
260.14  money received by the board except as the board otherwise 
260.15  entrusts to the custody of a designated employee.  The board may 
260.16  appoint a deputy to perform any and all functions of either the 
260.17  secretary or the treasurer.  A secretary or treasurer who is not 
260.18  a member of the board or a deputy of either does not have the 
260.19  right to vote. 
260.20     Subd. 4.  [PUBLIC EMPLOYEES.] The executive director and 
260.21  other persons employed by the district are public employees and 
260.22  have all the rights and duties conferred on public employees 
260.23  under Minnesota Statutes, sections 179A.01 to 179A.25.  The 
260.24  board may elect to have employees become members of either the 
260.25  public employees retirement association or the Minnesota state 
260.26  retirement system.  The compensation and conditions of 
260.27  employment of the employees must be governed by rules applicable 
260.28  to state employees in the classified service and to the 
260.29  provisions of Minnesota Statutes, chapter 15A. 
260.30     Subd. 5.  [PROCEDURES.] The board shall adopt resolutions 
260.31  or bylaws establishing procedures for board action, personnel 
260.32  administration, keeping records, approving claims, authorizing 
260.33  or making disbursements, safekeeping funds, and auditing all 
260.34  financial operations of the board. 
260.35     Subd. 6.  [SURETY BONDS AND INSURANCE.] The board may 
260.36  procure surety bonds for its officers and employees, in amounts 
261.1   deemed necessary to ensure proper performance of their duties 
261.2   and proper accounting for funds in their custody.  It may 
261.3   procure insurance against risks to property and liability of the 
261.4   board and its officers, agents, and employees for personal 
261.5   injuries or death and property damage and destruction, in 
261.6   amounts deemed necessary or desirable, with the force and effect 
261.7   stated in Minnesota Statutes, chapter 466. 
261.8      Sec. 4.  [GENERAL POWERS OF BOARD.] 
261.9      Subdivision 1.  [SCOPE.] The board has all powers necessary 
261.10  or convenient to discharge the duties imposed upon it by law.  
261.11  The powers include those specified in this section, but the 
261.12  express grant or enumeration of powers does not limit the 
261.13  generality or scope of the grant of powers contained in this 
261.14  subdivision. 
261.15     Subd. 2.  [SUIT.] The board may sue or be sued. 
261.16     Subd. 3.  [CONTRACT.] The board may enter into any contract 
261.17  necessary or proper for the exercise of its powers or the 
261.18  accomplishment of its purposes. 
261.19     Subd. 4.  [GIFTS, GRANTS, LOANS.] The board may accept 
261.20  gifts, apply for and accept grants or loans of money or other 
261.21  property from the United States, the state, or any person for 
261.22  any of its purposes, enter into any agreement required in 
261.23  connection with them, and hold, use, and dispose of the money or 
261.24  property in accordance with the terms of the gift, grant, loan, 
261.25  or agreement relating to it.  With respect to loans or grants of 
261.26  funds or real or personal property or other assistance from any 
261.27  state or federal government or its agency or instrumentality, 
261.28  the board may contract to do and perform all acts and things 
261.29  required as a condition or consideration for the gift, grant, or 
261.30  loan pursuant to state or federal law or regulations, whether or 
261.31  not included among the powers expressly granted to the board in 
261.32  sections 1 to 19.  
261.33     Subd. 5.  [COOPERATIVE ACTION.] The board may act under 
261.34  Minnesota Statutes, section 471.59, or any other appropriate law 
261.35  providing for joint or cooperative action between governmental 
261.36  units. 
262.1      Subd. 6.  [STUDIES AND INVESTIGATIONS.] The board may 
262.2   conduct research studies and programs, collect and analyze data, 
262.3   prepare reports, maps, charts, and tables, and conduct all 
262.4   necessary hearings and investigations in connection with the 
262.5   design, construction, and operation of the district disposal 
262.6   system. 
262.7      Subd. 7.  [EMPLOYEES, TERMS.] The board may employ on terms 
262.8   it deems advisable, persons or firms performing engineering, 
262.9   legal, or other services of a professional nature; require any 
262.10  employee to obtain and file with it an individual bond or 
262.11  fidelity insurance policy; and procure insurance in amounts it 
262.12  deems necessary against liability of the board or its officers 
262.13  or both, for personal injury or death and property damage or 
262.14  destruction, with the force and effect stated in Minnesota 
262.15  Statutes, chapter 466, and against risks of damage to or 
262.16  destruction of any of its facilities, equipment, or other 
262.17  property as it deems necessary. 
262.18     Subd. 8.  [PROPERTY RIGHTS, POWERS.] The board may acquire 
262.19  by purchase, lease, condemnation, gift, or grant, any real or 
262.20  personal property including positive and negative easements and 
262.21  water and air rights, and it may construct, enlarge, improve, 
262.22  replace, repair, maintain, and operate any interceptor, 
262.23  treatment works, or water facility determined to be necessary or 
262.24  convenient for the collection and disposal of sewage in the 
262.25  district.  Any local governmental unit and the commissioners of 
262.26  transportation and natural resources are authorized to convey to 
262.27  or permit the use of any of the above-mentioned facilities owned 
262.28  or controlled by it, by the board, subject to the rights of the 
262.29  holders of any bonds issued with respect to those facilities, 
262.30  with or without compensation, without an election or approval by 
262.31  any other governmental unit or agency.  All powers conferred by 
262.32  this subdivision may be exercised both within or without the 
262.33  district as may be necessary for the exercise by the board of 
262.34  its powers or the accomplishment of its purposes.  The board may 
262.35  hold, lease, convey, or otherwise dispose of the above-mentioned 
262.36  property for its purposes upon the terms and in the manner it 
263.1   deems advisable.  Unless otherwise provided, the right to 
263.2   acquire lands and property rights by condemnation may be 
263.3   exercised only in accordance with Minnesota Statutes, sections 
263.4   117.011 to 117.232, and applies to any property or interest in 
263.5   the property owned by any local governmental unit.  Property 
263.6   devoted to an actual public use at the time, or held to be 
263.7   devoted to such a use within a reasonable time, must not be so 
263.8   acquired unless a court of competent jurisdiction determines 
263.9   that the use proposed by the board is paramount to the existing 
263.10  use.  Except in the case of property in actual public use, the 
263.11  board may take possession of any property on which condemnation 
263.12  proceedings have been commenced at any time after the issuance 
263.13  of a court order appointing commissioners for its condemnation. 
263.14     Subd. 9.  [RELATIONSHIP TO OTHER PROPERTIES.] The board may 
263.15  construct or maintain its systems or facilities in, along, on, 
263.16  under, over, or through public waters, streets, bridges, 
263.17  viaducts, and other public rights-of-way without first obtaining 
263.18  a franchise from a county or municipality having jurisdiction 
263.19  over them.  However, the facilities must be constructed and 
263.20  maintained in accordance with the ordinances and resolutions of 
263.21  the county or municipality relating to constructing, installing, 
263.22  and maintaining similar facilities on public properties and must 
263.23  not unnecessarily obstruct the public use of those rights-of-way.
263.24     Subd. 10.  [DISPOSAL OF PROPERTY.] The board may sell, 
263.25  lease, or otherwise dispose of any real or personal property 
263.26  acquired by it which is no longer required for accomplishment of 
263.27  its purposes.  The property may be sold in the manner provided 
263.28  by Minnesota Statutes, section 469.065, insofar as practical.  
263.29  The board may give notice of sale as it deems appropriate.  When 
263.30  the board determines that any property or any part of the 
263.31  district disposal system acquired from a local governmental unit 
263.32  without compensation is no longer required but is required as a 
263.33  local facility by the governmental unit from which it was 
263.34  acquired, the board may by resolution transfer it to that 
263.35  governmental unit. 
263.36     Subd. 11.  [AGREEMENTS WITH OTHER GOVERNMENTAL UNITS.] The 
264.1   board may contract with the United States or any agency thereof, 
264.2   any state or agency thereof, or any regional public planning 
264.3   body in the state with jurisdiction over any part of the 
264.4   district, or any other municipal or public corporation, or 
264.5   governmental subdivision or agency or political subdivision in 
264.6   any state, for the joint use of any facility owned by the board 
264.7   or such entity, for the operation by that entity of any system 
264.8   or facility of the board, or for the performance on the board's 
264.9   behalf of any service, including but not limited to planning, on 
264.10  terms as may be agreed upon by the contracting parties.  Unless 
264.11  designated by the board as a local water and sanitary sewer 
264.12  facility, any treatment works or interceptor jointly used, or 
264.13  operated on behalf of the board, as provided in this 
264.14  subdivision, is deemed to be operated by the board for purposes 
264.15  of including those facilities in the district disposal system. 
264.16     Sec. 5.  [COMPREHENSIVE PLAN.] 
264.17     Subdivision 1.  [BOARD PLAN AND PROGRAM.] The board shall 
264.18  adopt a comprehensive plan for the collection, treatment, and 
264.19  disposal of sewage in the district for a designated period the 
264.20  board deems proper and reasonable.  The board shall prepare and 
264.21  adopt subsequent comprehensive plans for the collection, 
264.22  treatment, and disposal of sewage in the district for each 
264.23  succeeding designated period as the board deems proper and 
264.24  reasonable.  All comprehensive plans of the district shall be 
264.25  subject to the planning and zoning authority of Scott county and 
264.26  in conformance with all planning and zoning ordinances of Scott 
264.27  county.  The first plan, as modified by the board, and any 
264.28  subsequent plan shall take into account the preservation and 
264.29  best and most economic use of water and other natural resources 
264.30  in the area; the preservation, use, and potential for use of 
264.31  lands adjoining waters of the state to be used for the disposal 
264.32  of sewage; and the impact the disposal system will have on 
264.33  present and future land use in the area affected.  In no case 
264.34  shall the comprehensive plan provide for more than 325 
264.35  connections to the disposal system.  All connections must be 
264.36  charged a full assessment.  Connections made after the initial 
265.1   assessment period ends must be charged an amount equal to the 
265.2   initial assessment plus an adjustment for inflation and plus any 
265.3   other charges determined to be reasonable and necessary by the 
265.4   board.  Deferred assessments may be permitted, as provided for 
265.5   in Minnesota Statutes, chapter 429.  The plans shall include the 
265.6   general location of needed interceptors and treatment works, a 
265.7   description of the area that is to be served by the various 
265.8   interceptors and treatment works, a long-range capital 
265.9   improvements program, and any other details as the board deems 
265.10  appropriate.  In developing the plans, the board shall consult 
265.11  with persons designated for the purpose by governing bodies of 
265.12  any governmental unit within the district to represent the 
265.13  entities and shall consider the data, resources, and input 
265.14  offered to the board by the entities and any planning agency 
265.15  acting on behalf of one or more of the entities.  Each plan, 
265.16  when adopted, must be followed in the district and may be 
265.17  revised as often as the board deems necessary. 
265.18     Subd. 2.  [COMPREHENSIVE PLANS; HEARING.] Before adopting 
265.19  any subsequent comprehensive plan, the board shall hold a public 
265.20  hearing on the proposed plan at a time and place in the district 
265.21  that it selects.  The hearing may be continued from time to 
265.22  time.  Not less than 45 days before the hearing, the board shall 
265.23  publish notice of the hearing in a newspaper having general 
265.24  circulation in the district, stating the date, time, and place 
265.25  of the hearing, and the place where the proposed plan may be 
265.26  examined by any interested person.  At the hearing, all 
265.27  interested persons must be permitted to present their views on 
265.28  the plan. 
265.29     Sec. 6.  [POWERS TO ISSUE OBLIGATIONS AND IMPOSE SPECIAL 
265.30  ASSESSMENTS.] 
265.31     The Cedar lake area water and sanitary sewer board, in 
265.32  order to implement the powers granted under sections 1 to 19 to 
265.33  establish, maintain, and administer the Cedar lake area water 
265.34  and sanitary sewer district, may issue obligations and impose 
265.35  special assessments against benefited property within the limits 
265.36  of the district benefited by facilities constructed under 
266.1   sections 1 to 19 in the manner provided for local governments by 
266.2   Minnesota Statutes, chapter 429. 
266.3      Sec. 7.  [SYSTEM EXPANSION; APPLICATION TO CITIES.] 
266.4      The authority of the water and sanitary sewer board to 
266.5   establish water or sewer or combined water and sewer systems 
266.6   under this section extends to areas within the Cedar lake area 
266.7   water and sanitary sewer district organized into cities when 
266.8   requested by resolution of the governing body of the affected 
266.9   city or when ordered by the Minnesota pollution control agency 
266.10  after notice and hearing.  For the purpose of any petition filed 
266.11  or special assessment levied with respect to any system, the 
266.12  entire area to be served within a city must be treated as if it 
266.13  were owned by a single person, and the governing body shall 
266.14  exercise all the rights and be subject to all the duties of an 
266.15  owner of the area, and shall have power to provide for the 
266.16  payment of all special assessments and other charges imposed 
266.17  upon the area with respect to the system by the appropriation of 
266.18  money, the collection of service charges, or the levy of taxes, 
266.19  which shall be subject to no limitation of rate or amount. 
266.20     Sec. 8.  [SEWAGE COLLECTION AND DISPOSAL; POWERS.] 
266.21     Subdivision 1.  [POWERS.] In addition to all other powers 
266.22  conferred upon the board in sections 1 to 19, it has the powers 
266.23  specified in this section. 
266.24     Subd. 2.  [DISCHARGE OF TREATED SEWAGE.] The board may 
266.25  discharge the effluent from any treatment works operated by it 
266.26  into any waters of the state, subject to approval of the agency 
266.27  if required and in accordance with any effluent or water quality 
266.28  standards lawfully adopted by the agency, any interstate agency, 
266.29  or any federal agency having jurisdiction. 
266.30     Subd. 3.  [UTILIZATION OF DISTRICT SYSTEM.] The board may 
266.31  require any person or local governmental unit to provide for the 
266.32  discharge of any sewage, directly or indirectly, into the 
266.33  district disposal system, or to connect any disposal system or a 
266.34  part of it with the district disposal system wherever reasonable 
266.35  opportunity for connection is provided; may regulate the manner 
266.36  in which the connections are made; may require any person or 
267.1   local governmental unit discharging sewage into the disposal 
267.2   system to provide preliminary treatment for it; may prohibit the 
267.3   discharge into the district disposal system of any substance 
267.4   that it determines will or may be harmful to the system or any 
267.5   persons operating it; and may require any local governmental 
267.6   unit to discontinue the acquisition, betterment, or operation of 
267.7   any facility for the unit's disposal system wherever and so far 
267.8   as adequate service is or will be provided by the district 
267.9   disposal system. 
267.10     Subd. 4.  [SYSTEM OF COST RECOVERY TO COMPLY WITH 
267.11  APPLICABLE REGULATIONS.] Any charges, connection fees, or other 
267.12  cost-recovery techniques imposed on persons discharging sewage 
267.13  directly or indirectly into the district disposal system must 
267.14  comply with applicable state and federal law, including state 
267.15  and federal regulations governing grant applications. 
267.16     Sec. 9.  [BUDGET.] 
267.17     (a) The board shall prepare and adopt, on or before October 
267.18  1 in 2000 and each year thereafter, a budget showing for the 
267.19  following calendar year or other fiscal year determined by the 
267.20  board, sometimes referred to in sections 1 to 19 as the budget 
267.21  year, estimated receipts of money from all sources, including 
267.22  but not limited to payments by each local governmental unit, 
267.23  federal or state grants, taxes on property, and funds on hand at 
267.24  the beginning of the year, and estimated expenditures for: 
267.25     (1) costs of operation, administration, and maintenance of 
267.26  the district disposal system; 
267.27     (2) cost of acquisition and betterment of the district 
267.28  disposal system; and 
267.29     (3) debt service, including principal and interest, on 
267.30  general obligation bonds and certificates issued pursuant to 
267.31  section 13, and any money judgments entered by a court of 
267.32  competent jurisdiction.  
267.33     (b) Expenditures within these general categories, and any 
267.34  other categories as the board may from time to time determine, 
267.35  must be itemized in detail as the board prescribes.  The board 
267.36  and its officers, agents, and employees must not spend money for 
268.1   any purpose other than debt service without having set forth the 
268.2   expense in the budget nor in excess of the amount set forth in 
268.3   the budget for it.  No obligation to make an expenditure of the 
268.4   above-mentioned type is enforceable except as the obligation of 
268.5   the person or persons incurring it.  The board may amend the 
268.6   budget at any time by transferring from one purpose to another 
268.7   any sums except money for debt service and bond proceeds or by 
268.8   increasing expenditures in any amount by which actual cash 
268.9   receipts during the budget year exceed the total amounts 
268.10  designated in the original budget.  The creation of any 
268.11  obligation under section 13, or the receipt of any federal or 
268.12  state grant is a sufficient budget designation of the proceeds 
268.13  for the purpose for which it is authorized, and of the tax or 
268.14  other revenue pledged to pay the obligation and interest on it, 
268.15  whether or not specifically included in any annual budget. 
268.16     Sec. 10.  [ALLOCATION OF COSTS.] 
268.17     Subdivision 1.  [DEFINITION OF CURRENT COSTS.] The 
268.18  estimated cost of administration, operation, maintenance, and 
268.19  debt service of the district disposal system to be paid by the 
268.20  board in each fiscal year and the estimated costs of acquisition 
268.21  and betterment of the system that are to be paid during the year 
268.22  from funds other than state or federal grants and bond proceeds 
268.23  and all other previously unallocated payments made by the board 
268.24  pursuant to sections 1 to 19 to be allocated in the fiscal year 
268.25  are referred to as current costs and must be allocated by the 
268.26  board as provided in subdivision 2 in the budget for that year. 
268.27     Subd. 2.  [METHOD OF ALLOCATION OF CURRENT COSTS.] Current 
268.28  costs must be allocated in the district on an equitable basis as 
268.29  the board may determine by resolution to be in the best 
268.30  interests of the district.  The adoption or revision of any 
268.31  method of allocation used by the board must be by the 
268.32  affirmative vote of at least two-thirds of the members of the 
268.33  board. 
268.34     Sec. 11.  [TAX LEVIES.] 
268.35     To accomplish any duty imposed on it the board may, in 
268.36  addition to the powers granted in sections 1 to 19 and in any 
269.1   other law or charter, exercise the powers granted any 
269.2   municipality by Minnesota Statutes, chapters 117, 412, 429, 475, 
269.3   sections 115.46, 444.075, and 471.59, with respect to the area 
269.4   in the district.  The board may levy taxes upon all taxable 
269.5   property in the district for all or a part of the amount payable 
269.6   to the board, pursuant to section 10, to be assessed and 
269.7   extended as a tax upon that taxable property by the county 
269.8   auditor for the next calendar year, free from any limit of rate 
269.9   or amount imposed by law or charter.  The tax must be collected 
269.10  and remitted in the same manner as other general taxes. 
269.11     Sec. 12.  [PUBLIC HEARING AND SPECIAL ASSESSMENTS.] 
269.12     Subdivision 1.  [PUBLIC HEARING REQUIREMENT ON SPECIFIC 
269.13  PROJECT.] Before the board orders any project involving the 
269.14  acquisition or betterment of any interceptor or treatment works, 
269.15  all or a part of the cost of which will be allocated pursuant to 
269.16  section 10 as current costs, the board must hold a public 
269.17  hearing on the proposed project.  The hearing must be held 
269.18  following two publications in a newspaper having general 
269.19  circulation in the district, stating the time and place of the 
269.20  hearing, the general nature and location of the project, the 
269.21  estimated total cost of acquisition and betterment, that portion 
269.22  of costs estimated to be paid out of federal and state grants, 
269.23  and that portion of costs estimated to be allocated.  The 
269.24  estimates must be best available at the time of the meeting and 
269.25  if costs exceed the estimate, the project cannot proceed until 
269.26  an additional public hearing is held, with notice as required at 
269.27  the initial meeting.  The two publications must be a week apart 
269.28  and the hearing at least three days after the last publication.  
269.29  Not less than 45 days before the hearing, notice of the hearing 
269.30  must also be mailed to each clerk of all local governmental 
269.31  units in the district, but failure to give mailed notice or any 
269.32  defects in the notice does not invalidate the proceedings.  The 
269.33  project may include all or part of one or more interceptors or 
269.34  treatment works.  A hearing must not be held on a project unless 
269.35  the project is within the area covered by the comprehensive plan 
269.36  adopted by the board under section 5, except that the hearing 
270.1   may be held simultaneously with a hearing on a comprehensive 
270.2   plan.  A hearing is not required with respect to a project, no 
270.3   part of the costs of which are to be allocated as the current 
270.4   costs of acquisition, betterment, and debt service. 
270.5      Subd. 2.  [NOTICE TO BENEFITED PROPERTY OWNERS.] If the 
270.6   board proposes to assess against benefited property within the 
270.7   district all or any part of the allocable costs of the project 
270.8   as provided in subdivision 5, the board shall, not less than two 
270.9   weeks before the hearing provided for in subdivision 1, cause 
270.10  mailed notice of the hearing to be given to the owner of each 
270.11  parcel within the area proposed to be specially assessed and 
270.12  shall also give two weeks' published notice of the hearing.  The 
270.13  notice of hearing must contain the same information provided in 
270.14  the notice published by the board pursuant to subdivision 1, and 
270.15  a description of the area proposed to be assessed.  For the 
270.16  purpose of giving mailed notice, owners are those shown to be on 
270.17  the records of the county auditor or, in any county where tax 
270.18  statements are mailed by the county treasurer, on the records of 
270.19  the county treasurer; but other appropriate records may be used 
270.20  for this purpose.  For properties that are tax exempt or subject 
270.21  to taxation on a gross earnings basis and not listed on the 
270.22  records of the county auditor or the county treasurer, the 
270.23  owners must be ascertained by any practicable means and mailed 
270.24  notice given them as herein provided.  Failure to give mailed 
270.25  notice or any defects in the notice does not invalidate the 
270.26  proceedings of the board. 
270.27     Subd. 3.  [BOARD PROCEEDINGS PERTAINING TO HEARING.] Before 
270.28  adoption of the resolution calling for a hearing under this 
270.29  section, the board shall secure from the district engineer or 
270.30  some other competent person of the board's selection a report 
270.31  advising it in a preliminary way as to whether the proposed 
270.32  project is feasible and whether it should be made as proposed or 
270.33  in connection with some other project and the estimated costs of 
270.34  the project as recommended.  No error or omission in the report 
270.35  invalidates the proceeding.  The board may also take other steps 
270.36  before the hearing, as will in its judgment provide helpful 
271.1   information in determining the desirability and feasibility of 
271.2   the project, including but not limited to preparation of plans 
271.3   and specifications and advertisement for bids on them.  The 
271.4   hearing may be adjourned from time to time and a resolution 
271.5   ordering the project may be adopted at any time within six 
271.6   months after the date of hearing.  In ordering the project the 
271.7   board may reduce but not increase the extent of the project as 
271.8   stated in the notice of hearing and shall find that the project 
271.9   as ordered is in accordance with the comprehensive plan and 
271.10  program adopted by the board pursuant to section 5. 
271.11     Subd. 4.  [EMERGENCY ACTION.] If the board by resolution 
271.12  adopted by the affirmative vote of not less than two-thirds of 
271.13  its members determines that an emergency exists requiring the 
271.14  immediate purchase of materials or supplies or the making of 
271.15  emergency repairs, it may order the purchase of those supplies 
271.16  and materials and the making of the repairs before any hearing 
271.17  required under this section.  The board must set as early a date 
271.18  as practicable for the hearing at the time it declares the 
271.19  emergency.  All other provisions of this section must be 
271.20  followed in giving notice of and conducting the hearing.  
271.21  Nothing in this subdivision prevents the board or its agents 
271.22  from purchasing maintenance supplies or incurring maintenance 
271.23  costs without regard to the requirements of this section. 
271.24     Subd. 5.  [POWER OF THE BOARD TO SPECIALLY ASSESS.] The 
271.25  board may specially assess all or any part of the costs of 
271.26  acquisition and betterment as provided in this subdivision, of 
271.27  any project ordered under this section.  The special assessments 
271.28  must be levied in accordance with Minnesota Statutes, sections 
271.29  429.051 to 429.081, except as otherwise provided in this 
271.30  subdivision.  No other provisions of Minnesota Statutes, chapter 
271.31  429, apply.  For purposes of levying the special assessments, 
271.32  the hearing on the project required in subdivision 1 serves as 
271.33  the hearing on the making of the original improvement provided 
271.34  for by Minnesota Statutes, section 429.051.  The area assessed 
271.35  may be less than but may not exceed the area proposed to be 
271.36  assessed as stated in the notice of hearing on the project 
272.1   provided for in subdivision 2. 
272.2      Sec. 13.  [BONDS, CERTIFICATES, AND OTHER OBLIGATIONS.] 
272.3      Subdivision 1.  [BUDGET ANTICIPATION CERTIFICATES OF 
272.4   INDEBTEDNESS.] At any time after adoption of its annual budget 
272.5   and in anticipation of the collection of tax and other revenues 
272.6   estimated and set forth by the board in the budget, except in 
272.7   the case of deficiency taxes levied under this subdivision and 
272.8   taxes levied for the payment of certificates issued under 
272.9   subdivision 2, the board may, by resolution, authorize the 
272.10  issuance, negotiation, and sale, in accordance with subdivision 
272.11  4 in the form and manner and upon terms it determines, of its 
272.12  negotiable general obligation certificates of indebtedness in 
272.13  aggregate principal amounts not exceeding 50 percent of the 
272.14  total amount of tax collections and other revenues, and maturing 
272.15  not later than three months after the close of the budget year 
272.16  in which issued.  The proceeds of the sale of the certificates 
272.17  must be used solely for the purposes for which the tax 
272.18  collections and other revenues are to be expended under the 
272.19  budget. 
272.20     All the tax collections and other revenues included in the 
272.21  budget for the budget year, after the expenditure of the tax 
272.22  collections and other revenues in accordance with the budget, 
272.23  must be irrevocably pledged and appropriated to a special fund 
272.24  to pay the principal and interest on the certificates when due.  
272.25  If for any reason the tax collections and other revenues are 
272.26  insufficient to pay the certificates and interest when due, the 
272.27  board shall levy a tax in the amount of the deficiency on all 
272.28  taxable property in the district and shall appropriate this 
272.29  amount when received to the special fund. 
272.30     Subd. 2.  [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in 
272.31  any budget year the receipts of tax and other revenues should 
272.32  for some unforeseen cause become insufficient to pay the board's 
272.33  current expenses, or if any public emergency should subject it 
272.34  to the necessity of making extraordinary expenditures, the board 
272.35  may by resolution authorize the issuance, negotiation, and sale, 
272.36  in accordance with subdivision 4 in the form and manner and upon 
273.1   the terms and conditions it determines, of its negotiable 
273.2   general obligation certificates of indebtedness in an amount 
273.3   sufficient to meet the deficiency.  The board shall levy on all 
273.4   taxable property in the district a tax sufficient to pay the 
273.5   certificates and interest on the certificates and shall 
273.6   appropriate all collections of the tax to a special fund created 
273.7   for the payment of the certificates and the interest on them.  
273.8   Certificates issued under this subdivision mature not later than 
273.9   April 1 in the year following the year in which the tax is 
273.10  collectible. 
273.11     Subd. 3.  [GENERAL OBLIGATION BONDS.] The board may by 
273.12  resolution authorize the issuance of general obligation bonds 
273.13  for the acquisition or betterment of any part of the district 
273.14  disposal system, including but without limitation the payment of 
273.15  interest during construction and for a reasonable period 
273.16  thereafter, or for the refunding of outstanding bonds, 
273.17  certificates of indebtedness, or judgments.  The board shall 
273.18  pledge its full faith and credit and taxing power for the 
273.19  payment of the bonds and shall provide for the issuance and sale 
273.20  and for the security of the bonds in the manner provided in 
273.21  Minnesota Statutes, chapter 475.  The board has the same powers 
273.22  and duties as a municipality issuing bonds under that law, 
273.23  except that no election is required and the debt limitations of 
273.24  Minnesota Statutes, chapter 475, do not apply to the bonds.  The 
273.25  board may also pledge for the payment of the bonds and deduct 
273.26  from the amount of any tax levy required under Minnesota 
273.27  Statutes, section 475.61, subdivision 1, and any revenues 
273.28  receivable under any state and federal grants anticipated by the 
273.29  board and may covenant to refund the bonds if and when and to 
273.30  the extent that for any reason the revenues, together with other 
273.31  funds available and appropriated for that purpose, are not 
273.32  sufficient to pay all principal and interest due or about to 
273.33  become due, provided that the revenues have not been anticipated 
273.34  by the issuance of certificates under subdivision 1. 
273.35     Subd. 4.  [MANNER OF SALE AND ISSUANCE OF CERTIFICATES.] 
273.36  Certificates issued under subdivisions 1 and 2 may be issued and 
274.1   sold by negotiation, without public sale, and may be sold at a 
274.2   price equal to the percentage of the par value of the 
274.3   certificates, plus accrued interest, and bearing interest at the 
274.4   rate determined by the board.  An election is not required to 
274.5   authorize the issuance of the certificates.  The certificates 
274.6   must bear the same rate of interest after maturity as before and 
274.7   the full faith and credit and taxing power of the board must be 
274.8   pledged to the payment of the certificates. 
274.9      Sec. 14.  [DEPOSITORIES.] 
274.10     The board shall designate one or more national or state 
274.11  banks, or trust companies authorized to do a banking business, 
274.12  as official depositories for money of the board, and shall 
274.13  require the treasurer to deposit all or a part of the money in 
274.14  those institutions.  The designation must be in writing and set 
274.15  forth all the terms and conditions upon which the deposits are 
274.16  made, and must be signed by the chair and treasurer and made a 
274.17  part of the minutes of the board. 
274.18     Sec. 15.  [MONEY, ACCOUNTS, AND INVESTMENTS.] 
274.19     Subdivision 1.  [RECEIPT AND APPLICATION.] Money received 
274.20  by the board must be deposited or invested by the treasurer and 
274.21  disposed of as the board may direct in accordance with its 
274.22  budget; provided that any money that has been pledged or 
274.23  dedicated by the board to the payment of obligations or interest 
274.24  on the obligations or expenses incident thereto, or for any 
274.25  other specific purpose authorized by law, must be paid by the 
274.26  treasurer into the fund to which it has been pledged. 
274.27     Subd. 2.  [FUNDS AND ACCOUNTS.] (a) The board's treasurer 
274.28  shall establish funds and accounts as may be necessary or 
274.29  convenient to handle the receipts and disbursements of the board 
274.30  in an orderly fashion. 
274.31     (b) The funds and accounts must be audited annually by a 
274.32  certified public accountant at the expense of the district. 
274.33     Subd. 3.  [DEPOSIT AND INVESTMENT.] The money on hand in 
274.34  those funds and accounts may be deposited in the official 
274.35  depositories of the board or invested as provided in this 
274.36  subdivision.  Any amount not currently needed or required by law 
275.1   to be kept in cash on deposit may be invested in obligations 
275.2   authorized for the investment of municipal sinking funds by 
275.3   Minnesota Statutes, section 475.66.  The money may also be held 
275.4   under certificates of deposit issued by any official depository 
275.5   of the board. 
275.6      Subd. 4.  [BOND PROCEEDS.] The use of proceeds of all bonds 
275.7   issued by the board for the acquisition and betterment of the 
275.8   district disposal system, and the use, other than investment, of 
275.9   all money on hand in any sinking fund or funds of the board, is 
275.10  governed by the provisions of Minnesota Statutes, chapter 475, 
275.11  the provisions of sections 1 to 19, and the provisions of 
275.12  resolutions authorizing the issuance of the bonds.  When 
275.13  received, the bond proceeds must be transferred to the treasurer 
275.14  of the board for safekeeping, investment, and payment of the 
275.15  costs for which they were issued. 
275.16     Subd. 5.  [AUDIT.] The board shall provide for and pay the 
275.17  cost of an independent annual audit of its official books and 
275.18  records by the state auditor or a public accountant authorized 
275.19  to perform that function under Minnesota Statutes, chapter 6. 
275.20     Sec. 16.  [SERVICE CONTRACTS WITH GOVERNMENTAL ENTITIES 
275.21  OUTSIDE THE JURISDICTION OF THE BOARD.] 
275.22     (a) The board may contract with the United States or any 
275.23  agency of the federal government, any state or its agency, or 
275.24  any municipal or public corporation, governmental subdivision or 
275.25  agency or political subdivision in any state, outside the 
275.26  jurisdiction of the board, for furnishing services to those 
275.27  entities, including but not limited to planning for and the 
275.28  acquisition, betterment, operation, administration, and 
275.29  maintenance of any or all interceptors, treatment works, and 
275.30  local water and sanitary sewer facilities.  The board may 
275.31  include as one of the terms of the contract that the entity must 
275.32  pay to the board an amount agreed upon as a reasonable estimate 
275.33  of the proportionate share properly allocable to the entity of 
275.34  costs of acquisition, betterment, and debt service previously 
275.35  allocated in the district.  When payments are made by entities 
275.36  to the board, they must be applied in reduction of the total 
276.1   amount of costs thereafter allocated in the district, on an 
276.2   equitable basis as the board deems to be in the best interests 
276.3   of the district, applying so far as practicable and appropriate 
276.4   the criteria set forth in section 10, subdivision 2.  A 
276.5   municipality in the state of Minnesota may enter into a contract 
276.6   and perform all acts and things required as a condition or 
276.7   consideration therefor consistent with the purposes of sections 
276.8   1 to 19, whether or not included among the powers otherwise 
276.9   granted to the municipality by law or charter. 
276.10     (b) The board shall contract with a qualified entity to 
276.11  make necessary inspections of the district facilities, and to 
276.12  otherwise process or assist in processing any of the work of the 
276.13  district. 
276.14     Sec. 17.  [CONTRACTS FOR CONSTRUCTION, MATERIALS, SUPPLIES, 
276.15  AND EQUIPMENT.] 
276.16     When the board orders a project involving the acquisition 
276.17  or betterment of a part of the district disposal system, it 
276.18  shall cause plans and specifications of the project to be made, 
276.19  or if previously made, to be modified, if necessary, and to be 
276.20  approved by the agency if required, and after any required 
276.21  approval by the agency, one or more contracts for work and 
276.22  materials called for by the plans and specification may be 
276.23  awarded as provided in Minnesota Statutes, section 471.345. 
276.24     Sec. 18.  [PROPERTY EXEMPT FROM TAXATION.] 
276.25     Any properties, real or personal, owned, leased, 
276.26  controlled, used, or occupied by the water and sanitary sewer 
276.27  board for any purpose under sections 1 to 19 are declared to be 
276.28  acquired, owned, leased, controlled, used, and occupied for 
276.29  public, governmental, and municipal purposes, and are exempt 
276.30  from taxation by the state or any political subdivision of the 
276.31  state.  The properties are subject to special assessments levied 
276.32  by a political subdivision for a local improvement in amounts 
276.33  proportionate to and not exceeding the special benefit received 
276.34  by the properties from the improvement. 
276.35     Sec. 19.  [RELATION TO EXISTING LAWS.] 
276.36     Sections 1 to 19 must be given full effect notwithstanding 
277.1   the provisions of any law or charter inconsistent with sections 
277.2   1 to 19.  The powers conferred on the board under sections 1 to 
277.3   19 do not in any way diminish or supersede the powers conferred 
277.4   on the agency by Minnesota Statutes, chapters 115 to 116. 
277.5      Sec. 20.  [BANNING JUNCTION AREA WATER AND SANITARY SEWER 
277.6   DISTRICT; DEFINITIONS.] 
277.7      Subdivision 1.  [APPLICATION.] For the purposes of sections 
277.8   20 to 38, the terms defined in this section have the meanings 
277.9   given them. 
277.10     Subd. 2.  [DISTRICT.] "Banning Junction area water and 
277.11  sanitary sewer district" and "district" mean the area over which 
277.12  the Banning Junction area water and sanitary sewer board has 
277.13  jurisdiction, including the town of Finlayson and the city of 
277.14  Finlayson in Pine county and Banning state park, but only that 
277.15  part of the township described in the comprehensive plan adopted 
277.16  by the board pursuant to section 24. 
277.17     Subd. 3.  [BOARD.] "Water and sanitary sewer board" or 
277.18  "board" means the Banning Junction area water and sanitary sewer 
277.19  board established for the district as provided in subdivision 2. 
277.20     Subd. 4.  [PERSON.] "Person" means an individual, 
277.21  partnership, corporation, limited liability company, 
277.22  cooperative, or other organization or entity, public or private. 
277.23     Subd. 5.  [LOCAL GOVERNMENTAL UNITS.] "Local governmental 
277.24  units" or "governmental units" means the town of Finlayson, the 
277.25  department of natural resources, and the city of Finlayson. 
277.26     Subd. 6.  [ACQUISITION; BETTERMENT.] "Acquisition" and 
277.27  "betterment" have the meanings given in Minnesota Statutes, 
277.28  chapter 475. 
277.29     Subd. 7.  [AGENCY.] "Agency" means the Minnesota pollution 
277.30  control agency created in Minnesota Statutes, chapter 116. 
277.31     Subd. 8.  [SEWAGE.] "Sewage" means all liquid or 
277.32  water-carried waste products from whatever sources derived, 
277.33  together with any groundwater infiltration and surface water as 
277.34  may be present. 
277.35     Subd. 9.  [POLLUTION OF WATER; SEWER SYSTEM.] "Pollution of 
277.36  water" and "sewer system" have the meanings given in Minnesota 
278.1   Statutes, section 115.01. 
278.2      Subd. 10.  [TREATMENT WORKS; DISPOSAL SYSTEM.] "Treatment 
278.3   works" and "disposal system" have the meanings given in 
278.4   Minnesota Statutes, section 115.01. 
278.5      Subd. 11.  [INTERCEPTOR.] "Interceptor" means a sewer and 
278.6   its necessary appurtenances, including but not limited to mains, 
278.7   pumping stations, and sewage flow-regulating and -measuring 
278.8   stations, that is: 
278.9      (1) designed for or used to conduct sewage originating in 
278.10  more than one local governmental unit; 
278.11     (2) designed or used to conduct all or substantially all 
278.12  the sewage originating in a single local governmental unit from 
278.13  a point of collection in that unit to an interceptor or 
278.14  treatment works outside that unit; or 
278.15     (3) determined by the board to be a major collector of 
278.16  sewage used or designed to serve a substantial area in the 
278.17  district. 
278.18     Subd. 12.  [DISTRICT DISPOSAL SYSTEM.] "District disposal 
278.19  system" means any and all interceptors or treatment works owned, 
278.20  constructed, or operated by the board unless designated by the 
278.21  board as local water and sanitary sewer facilities. 
278.22     Subd. 13.  [MUNICIPALITY.] "Municipality" means any home 
278.23  rule charter or statutory city or town. 
278.24     Subd. 14.  [TOTAL COSTS.] "Total costs of acquisition and 
278.25  betterment" and "costs of acquisition and betterment" mean all 
278.26  acquisition and betterment expenses permitted to be financed out 
278.27  of stopped bond proceeds issued in accordance with section 32, 
278.28  whether or not the expenses are in fact financed out of the bond 
278.29  proceeds. 
278.30     Subd. 15.  [CURRENT COSTS.] "Current costs of acquisition, 
278.31  betterment, and debt service" means interest and principal 
278.32  estimated to be due during the budget year on bonds issued to 
278.33  finance said acquisition and betterment and all other costs of 
278.34  acquisition and betterment estimated to be paid during the year 
278.35  from funds other than bond proceeds and federal or state grants. 
278.36     Subd. 16.  [RESIDENT.] "Resident" means the owner of a 
279.1   dwelling located in the district and receiving water or sewer 
279.2   service. 
279.3      Sec. 21.  [WATER AND SANITARY SEWER BOARD.] 
279.4      Subdivision 1.  [ESTABLISHMENT.] A water and sanitary sewer 
279.5   district is established for the town of Finlayson, for the 
279.6   Banning state park, under the jurisdiction of the Minnesota 
279.7   department of natural resources, and for the city of Finlayson 
279.8   in Pine county, to be known as the Banning Junction area water 
279.9   and sanitary sewer district.  The water and sewer district is 
279.10  under the control and management of the Banning Junction area 
279.11  water and sanitary sewer board.  The board is established as a 
279.12  public corporation and political subdivision of the state with 
279.13  perpetual succession and all the rights, powers, privileges, 
279.14  immunities, and duties that may be validly granted to or imposed 
279.15  upon a municipal corporation, as provided in sections 20 to 38. 
279.16     Subd. 2.  [MEMBERS AND SELECTION.] The board is composed of 
279.17  five members selected as follows:  the town board shall meet to 
279.18  appoint three members, one of whom shall be an elected township 
279.19  officer, and two of whom shall be persons served by the system, 
279.20  the city shall appoint one member, and the department of natural 
279.21  resources shall appoint one member to the water and sanitary 
279.22  sewer board and each board member shall have one vote.  The 
279.23  first terms must be as follows:  one for one year, two for two 
279.24  years, and two for three years, fixed by lot at the district's 
279.25  first meeting.  Thereafter, all terms are for three years. 
279.26     Subd. 3.  [TIME LIMITS FOR SELECTION.] The board members 
279.27  must be selected as provided in subdivision 2 within 60 days 
279.28  after sections 20 to 38 become effective.  The successor to each 
279.29  board member must be selected at any time within 60 days before 
279.30  the expiration of the member's term in the same manner as the 
279.31  predecessor was selected.  A vacancy on the board must be filled 
279.32  within 60 days after it occurs. 
279.33     Subd. 4.  [VACANCIES.] If the office of a board member 
279.34  becomes vacant, the vacancy must be filled for the unexpired 
279.35  term in the manner provided for selection of the member who 
279.36  vacated the office.  The office is deemed vacant under the 
280.1   conditions specified in Minnesota Statutes, section 351.02. 
280.2      Subd. 5.  [REMOVAL.] A board member may be removed by the 
280.3   unanimous vote of the governing body appointing the member, with 
280.4   or without cause, or for malfeasance or nonfeasance in the 
280.5   performance of official duties as provided by Minnesota 
280.6   Statutes, sections 351.14 to 351.23. 
280.7      Subd. 6.  [CERTIFICATES OF SELECTION; OATH OF OFFICE.] A 
280.8   certificate of selection of every board member selected under 
280.9   subdivision 2 stating the term for which selected, must be made 
280.10  by the respective town clerks, city administrator, and by the 
280.11  commissioner of natural resources.  The certificates, with the 
280.12  approval appended by other authority, if required, must be filed 
280.13  with the secretary of state.  Counterparts thereof must be 
280.14  furnished to the board member and the secretary of the board.  
280.15  Each member shall qualify by taking and subscribing the oath of 
280.16  office prescribed by the Minnesota Constitution, article V, 
280.17  section 6.  The oath, duly certified by the official 
280.18  administering the same, must be filed with the secretary of 
280.19  state and the secretary of the board. 
280.20     Subd. 7.  [BOARD MEMBERS' COMPENSATION.] Each board member, 
280.21  except the chair, may be paid a per diem compensation in 
280.22  accordance with the board's bylaws for meetings and for other 
280.23  services as are specifically authorized by the board, not to 
280.24  exceed the per diem amount under Minnesota Statutes, section 
280.25  15.0575, subdivision 3, and not to exceed $1,000 in any one 
280.26  year.  The chair may be paid a per diem compensation in 
280.27  accordance with the board's bylaws for meetings and for other 
280.28  services specifically authorized by the board, not to exceed the 
280.29  per diem amount under Minnesota Statutes, section 15.0575, 
280.30  subdivision 3, and not to exceed $1,500 in any one year.  All 
280.31  members of the board must be reimbursed for all reasonable and 
280.32  necessary expenses actually incurred in the performance of 
280.33  duties. 
280.34     Sec. 22.  [GENERAL PROVISIONS FOR ORGANIZATION AND 
280.35  OPERATION OF BOARD.] 
280.36     Subdivision 1.  [ORGANIZATION; OFFICERS; MEETINGS; SEAL.] 
281.1   After the selection and qualification of all board members, they 
281.2   shall meet to organize the board at the call of any two board 
281.3   members, upon seven days' notice by registered mail to the 
281.4   remaining board members, at a time and place within the district 
281.5   specified in the notice.  A majority of the members shall 
281.6   constitute a quorum at that meeting and all other meetings of 
281.7   the board, but a lesser number may meet and adjourn from time to 
281.8   time and compel the attendance of absent members.  At the first 
281.9   meeting the board shall select its officers and conduct other 
281.10  organizational business as may be necessary.  Thereafter the 
281.11  board shall meet regularly at the time and place that the board 
281.12  designates by resolution.  Special meetings may be held at any 
281.13  time upon call of the chair or any two members, upon written 
281.14  notice sent by mail to each member at least three days before 
281.15  the meeting, or upon other notice as the board by resolution may 
281.16  provide, or without notice if each member is present or files 
281.17  with the secretary a written consent to the meeting either 
281.18  before or after the meeting.  Except as otherwise provided in 
281.19  sections 20 to 38, any action within the authority of the board 
281.20  may be taken by the affirmative vote of a majority of the board 
281.21  and may be taken by regular or adjourned regular meeting or at a 
281.22  duly held special meeting, but in any case only if a quorum is 
281.23  present.  Meetings of the board must be open to the public.  The 
281.24  board may adopt a seal, which must be officially and judicially 
281.25  noticed, to authenticate instruments executed by its authority, 
281.26  but omission of the seal does not affect the validity of any 
281.27  instrument. 
281.28     Subd. 2.  [CHAIR.] The board shall elect a chair from its 
281.29  membership.  The term of the first chair of the board shall 
281.30  expire on January 1, 2001, and the terms of successor chairs 
281.31  expire on January 1 of each succeeding year.  The chair shall 
281.32  preside at all meetings of the board, if present, and shall 
281.33  perform all other duties and functions usually incumbent upon 
281.34  such an officer, and all administrative functions assigned to 
281.35  the chair by the board.  The board shall elect a vice-chair from 
281.36  its membership to act for the chair during temporary absence or 
282.1   disability. 
282.2      Subd. 3.  [SECRETARY AND TREASURER.] The board shall select 
282.3   a person or persons who may, but need not be, a member or 
282.4   members of the board, to act as its secretary and treasurer.  
282.5   The secretary and treasurer shall hold office at the pleasure of 
282.6   the board, subject to the terms of any contract of employment 
282.7   that the board may enter into with the secretary or treasurer.  
282.8   The secretary shall record the minutes of all meetings of the 
282.9   board, and be the custodian of all books and records of the 
282.10  board except those that the board entrusts to the custody of a 
282.11  designated employee.  The treasurer is the custodian of all 
282.12  money received by the board except as the board otherwise 
282.13  entrusts to the custody of a designated employee.  The board may 
282.14  appoint a deputy to perform any and all functions of either the 
282.15  secretary or the treasurer.  A secretary or treasurer who is not 
282.16  a member of the board or a deputy of either does not have the 
282.17  right to vote. 
282.18     Subd. 4.  [EXECUTIVE DIRECTOR.] The board may appoint an 
282.19  executive director, selected solely upon the basis of training, 
282.20  experience, and other qualifications and who shall serve at the 
282.21  pleasure of the board and at a compensation to be determined by 
282.22  the board.  The executive director need not be a resident of the 
282.23  district.  The executive director may also be selected by the 
282.24  board to serve as either secretary or treasurer, or both, of the 
282.25  board.  The executive director shall attend all meetings of the 
282.26  board, but shall not vote, and shall have the following powers 
282.27  and duties: 
282.28     (1) to see that all resolutions, rules, regulations, or 
282.29  orders of the board are enforced; 
282.30     (2) to appoint and remove, upon the basis of merit and 
282.31  fitness, all subordinate officers and regular employees of the 
282.32  board except the secretary and the treasurer and their deputies; 
282.33     (3) to present to the board plans, studies, and other 
282.34  reports prepared for board purposes and recommend to the board 
282.35  for adoption the measures the executive director deems necessary 
282.36  to enforce or carry out the powers and the duties of the board, 
283.1   or the efficient administration of the affairs of the board; 
283.2      (4) to keep the board fully advised as to its financial 
283.3   condition, and to prepare and submit to the board and to the 
283.4   governing bodies of the local governmental units, the board's 
283.5   annual budget and other financial information the board may 
283.6   request; 
283.7      (5) to recommend to the board for adoption rules and 
283.8   regulations the executive director deems necessary for the 
283.9   efficient operation of the district disposal system; and 
283.10     (6) to perform other duties prescribed by the board. 
283.11     Subd. 5.  [PUBLIC EMPLOYEES.] The executive director and 
283.12  other persons employed by the district are public employees and 
283.13  have all the rights and duties conferred on public employees 
283.14  under Minnesota Statutes, sections 179A.01 to 179A.25.  The 
283.15  board may elect to have employees become members of either the 
283.16  public employees retirement association or the Minnesota state 
283.17  retirement system.  The compensation and conditions of 
283.18  employment of the employees must be governed by rules applicable 
283.19  to state employees in the classified service and to the 
283.20  provisions of Minnesota Statutes, chapter 15A. 
283.21     Subd. 6.  [PROCEDURES.] The board shall adopt resolutions 
283.22  or bylaws establishing procedures for board action, personnel 
283.23  administration, keeping records, approving claims, authorizing 
283.24  or making disbursements, safekeeping funds, and auditing all 
283.25  financial operations of the board. 
283.26     Subd. 7.  [SURETY BONDS AND INSURANCE.] The board may 
283.27  procure surety bonds for its officers and employees, in amounts 
283.28  deemed necessary to ensure proper performance of their duties 
283.29  and proper accounting for funds in their custody.  It may 
283.30  procure insurance against risks to property and liability of the 
283.31  board and its officers, agents, and employees for personal 
283.32  injuries or death and property damage and destruction, in 
283.33  amounts deemed necessary or desirable, with the force and effect 
283.34  stated in Minnesota Statutes, chapter 466. 
283.35     Sec. 23.  [GENERAL POWERS OF BOARD.] 
283.36     Subdivision 1.  [SCOPE.] The board has all powers necessary 
284.1   or convenient to discharge the duties imposed upon it by law.  
284.2   The powers include those specified in this section, but the 
284.3   express grant or enumeration of powers does not limit the 
284.4   generality or scope of the grant of powers contained in this 
284.5   subdivision. 
284.6      Subd. 2.  [SUIT.] The board may sue or be sued. 
284.7      Subd. 3.  [CONTRACT.] The board may enter into any contract 
284.8   necessary or proper for the exercise of its powers or the 
284.9   accomplishment of its purposes. 
284.10     Subd. 4.  [GIFTS, GRANTS, LOANS.] The board may accept 
284.11  gifts, apply for and accept grants or loans of money or other 
284.12  property from the United States, the state, or any person for 
284.13  any of its purposes, enter into any agreement required in 
284.14  connection with them, and hold, use, and dispose of the money or 
284.15  property in accordance with the terms of the gift, grant, loan, 
284.16  or agreement relating to it.  With respect to loans or grants of 
284.17  funds or real or personal property or other assistance from any 
284.18  state or federal government or its agency or instrumentality, 
284.19  the board may contract to do and perform all acts and things 
284.20  required as a condition or consideration for the gift, grant, or 
284.21  loan pursuant to state or federal law or regulations, whether or 
284.22  not included among the powers expressly granted to the board in 
284.23  sections 20 to 38. 
284.24     Subd. 5.  [COOPERATIVE ACTION.] The board may act under 
284.25  Minnesota Statutes, section 471.59, or any other appropriate law 
284.26  providing for joint or cooperative action between governmental 
284.27  units. 
284.28     Subd. 6.  [STUDIES AND INVESTIGATIONS.] The board may 
284.29  conduct research studies and programs, collect and analyze data, 
284.30  prepare reports, maps, charts, and tables, and conduct all 
284.31  necessary hearings and investigations in connection with the 
284.32  design, construction, and operation of the district disposal 
284.33  system. 
284.34     Subd. 7.  [EMPLOYEES, TERMS.] The board may employ on terms 
284.35  it deems advisable, persons or firms performing engineering, 
284.36  legal, or other services of a professional nature; require any 
285.1   employee to obtain and file with it an individual bond or 
285.2   fidelity insurance policy; and procure insurance in amounts it 
285.3   deems necessary against liability of the board or its officers 
285.4   or both, for personal injury or death and property damage or 
285.5   destruction, with the force and effect stated in Minnesota 
285.6   Statutes, chapter 466, and against risks of damage to or 
285.7   destruction of any of its facilities, equipment, or other 
285.8   property as it deems necessary. 
285.9      Subd. 8.  [PROPERTY RIGHTS, POWERS.] The board may acquire 
285.10  by purchase, lease, condemnation, gift, or grant, any real or 
285.11  personal property including positive and negative easements and 
285.12  water and air rights, and it may construct, enlarge, improve, 
285.13  replace, repair, maintain, and operate any interceptor, 
285.14  treatment works, or water facility determined to be necessary or 
285.15  convenient for the collection and disposal of sewage in the 
285.16  district.  Any local governmental unit and the commissioners of 
285.17  transportation and natural resources are authorized to convey to 
285.18  or permit the use of any of the above-mentioned facilities owned 
285.19  or controlled by it, by the board, subject to the rights of the 
285.20  holders of any bonds issued with respect to those facilities, 
285.21  with or without compensation, without an election or approval by 
285.22  any other governmental unit or agency.  All powers conferred by 
285.23  this subdivision may be exercised both within or without the 
285.24  district as may be necessary for the exercise by the board of 
285.25  its powers or the accomplishment of its purposes.  The board may 
285.26  hold, lease, convey, or otherwise dispose of the above-mentioned 
285.27  property for its purposes upon the terms and in the manner it 
285.28  deems advisable.  Unless otherwise provided, the right to 
285.29  acquire lands and property rights by condemnation may be 
285.30  exercised only in accordance with Minnesota Statutes, sections 
285.31  117.011 to 117.232, and shall apply to any property or interest 
285.32  in the property owned by any local governmental unit.  No 
285.33  property devoted to an actual public use at the time, or held to 
285.34  be devoted to such a use within a reasonable time, shall be so 
285.35  acquired unless a court of competent jurisdiction determines 
285.36  that the use proposed by the board is paramount to the existing 
286.1   use.  Except in the case of property in actual public use, the 
286.2   board may take possession of any property on which condemnation 
286.3   proceedings have been commenced at any time after the issuance 
286.4   of a court order appointing commissioners for its condemnation. 
286.5      Subd. 9.  [RELATIONSHIP TO OTHER PROPERTIES.] The board may 
286.6   construct or maintain its systems or facilities in, along, on, 
286.7   under, over, or through public waters, streets, bridges, 
286.8   viaducts, and other public rights-of-way without first obtaining 
286.9   a franchise from a county or municipality having jurisdiction 
286.10  over them.  However, the facilities must be constructed and 
286.11  maintained in accordance with the ordinances and resolutions of 
286.12  the county or municipality relating to constructing, installing, 
286.13  and maintaining similar facilities on public properties and must 
286.14  not unnecessarily obstruct the public use of those rights-of-way.
286.15     Subd. 10.  [DISPOSAL OF PROPERTY.] The board may sell, 
286.16  lease, or otherwise dispose of any real or personal property 
286.17  acquired by it which is no longer required for accomplishment of 
286.18  its purposes.  The property may be sold in the manner provided 
286.19  by Minnesota Statutes, section 469.065, insofar as practical.  
286.20  The board may give notice of sale as it deems appropriate.  When 
286.21  the board determines that any property or any part of the 
286.22  district disposal system acquired from a local governmental unit 
286.23  without compensation is no longer required but is required as a 
286.24  local facility by the governmental unit from which it was 
286.25  acquired, the board may by resolution transfer it to that 
286.26  governmental unit. 
286.27     Subd. 11.  [AGREEMENTS WITH OTHER GOVERNMENTAL UNITS.] The 
286.28  board may contract with the United States or any agency thereof, 
286.29  any state or agency thereof, or any regional public planning 
286.30  body in the state with jurisdiction over any part of the 
286.31  district, or any other municipal or public corporation, or 
286.32  governmental subdivision or agency or political subdivision in 
286.33  any state, for the joint use of any facility owned by the board 
286.34  or such entity, for the operation by that entity of any system 
286.35  or facility of the board, or for the performance on the board's 
286.36  behalf of any service, including but not limited to planning, on 
287.1   terms as may be agreed upon by the contracting parties.  Unless 
287.2   designated by the board as a local water and sanitary sewer 
287.3   facility, any treatment works or interceptor jointly used, or 
287.4   operated on behalf of the board, as provided in this 
287.5   subdivision, is deemed to be operated by the board for purposes 
287.6   of including those facilities in the district disposal system. 
287.7      Sec. 24.  [COMPREHENSIVE PLAN.] 
287.8      Subdivision 1.  [BOARD PLAN AND PROGRAM.] The board shall 
287.9   adopt a comprehensive plan for the collection, treatment, and 
287.10  disposal of sewage in the district for a designated period the 
287.11  board deems proper and reasonable.  The board shall prepare and 
287.12  adopt subsequent comprehensive plans for the collection, 
287.13  treatment, and disposal of sewage in the district for each 
287.14  succeeding designated period as the board deems proper and 
287.15  reasonable.  The first plan, as modified by the board, and any 
287.16  subsequent plan shall take into account the preservation and 
287.17  best and most economic use of water and other natural resources 
287.18  in the area; the preservation, use, and potential for use of 
287.19  lands adjoining waters of the state to be used for the disposal 
287.20  of sewage; and the impact the disposal system will have on 
287.21  present and future land use in the area affected.  The plans 
287.22  shall include the general location of needed interceptors and 
287.23  treatment works, a description of the area that is to be served 
287.24  by the various interceptors and treatment works, a long-range 
287.25  capital improvements program, and any other details as the board 
287.26  deems appropriate.  In developing the plans, the board shall 
287.27  consult with persons designated for the purpose by governing 
287.28  bodies of any governmental unit within the district to represent 
287.29  the entities and shall consider the data, resources, and input 
287.30  offered to the board by the entities and any planning agency 
287.31  acting on behalf of one or more of the entities.  Each plan, 
287.32  when adopted, must be followed in the district and may be 
287.33  revised as often as the board deems necessary. 
287.34     Subd. 2.  [COMPREHENSIVE PLANS; HEARING.] Before adopting 
287.35  any subsequent comprehensive plan, the board shall hold a public 
287.36  hearing on the proposed plan at a time and place in the district 
288.1   that it selects.  The hearing may be continued from time to 
288.2   time.  Not less than 45 days before the hearing, the board shall 
288.3   publish notice of the hearing in a newspaper having general 
288.4   circulation in the district, stating the date, time, and place 
288.5   of the hearing, and the place where the proposed plan may be 
288.6   examined by any interested person.  At the hearing, all 
288.7   interested persons must be permitted to present their views on 
288.8   the plan. 
288.9      Subd. 3.  [GOVERNMENTAL UNIT PLANS AND PROGRAMS; 
288.10  COORDINATION WITH BOARD'S RESPONSIBILITIES.] Once the board's 
288.11  plan is adopted, no construction project involving the 
288.12  construction of new sewers or other disposal facilities may be 
288.13  undertaken by the local governmental unit unless its governing 
288.14  body shall first find the project to be in accordance with the 
288.15  governmental unit's comprehensive plan and program as approved 
288.16  by the board.  Before approval by the board of the comprehensive 
288.17  plan and program of any local governmental unit in the district, 
288.18  no water and sanitary sewer construction project may be 
288.19  undertaken by the governmental unit unless approval of the 
288.20  project is first secured from the board as to those features of 
288.21  the project affecting the board's responsibilities as determined 
288.22  by the board. 
288.23     Sec. 25.  [POWERS TO ISSUE OBLIGATIONS AND IMPOSE SPECIAL 
288.24  ASSESSMENTS.] 
288.25     The Banning Junction area water and sanitary sewer board, 
288.26  in order to implement the powers granted under sections 20 to 38 
288.27  to establish, maintain, and administer the Banning Junction area 
288.28  water and sanitary sewer district, may issue obligations and 
288.29  impose special assessments against benefited property within the 
288.30  limits of the district benefited by facilities constructed under 
288.31  sections 20 to 38 in the manner provided for local governments 
288.32  by Minnesota Statutes, chapter 429. 
288.33     Sec. 26.  [SYSTEM EXPANSION; APPLICATION TO CITIES.] 
288.34     The authority of the water and sanitary sewer board to 
288.35  establish water or sewer or combined water and sewer systems 
288.36  under this section extends to areas within the Banning Junction 
289.1   area water and sanitary sewer district organized into cities 
289.2   when requested by resolution of the governing body of the 
289.3   affected city or when ordered by the Minnesota pollution control 
289.4   agency after notice and hearing.  For the purpose of any 
289.5   petition filed or special assessment levied with respect to any 
289.6   system, the entire area to be served within a city must be 
289.7   treated as if it were owned by a single person, and the 
289.8   governing body shall exercise all the rights and be subject to 
289.9   all the duties of an owner of the area, and shall have power to 
289.10  provide for the payment of all special assessments and other 
289.11  charges imposed upon the area with respect to the system by the 
289.12  appropriation of money, the collection of service charges, or 
289.13  the levy of taxes, which shall be subject to no limitation of 
289.14  rate or amount. 
289.15     Sec. 27.  [SEWAGE COLLECTION AND DISPOSAL; POWERS.] 
289.16     Subdivision 1.  [POWERS.] In addition to all other powers 
289.17  conferred upon the board in sections 20 to 38, it has the powers 
289.18  specified in this section. 
289.19     Subd. 2.  [DISCHARGE OF TREATED SEWAGE.] The board may 
289.20  discharge the effluent from any treatment works operated by it 
289.21  into any waters of the state, subject to approval of the agency 
289.22  if required and in accordance with any effluent or water quality 
289.23  standards lawfully adopted by the agency, any interstate agency, 
289.24  or any federal agency having jurisdiction. 
289.25     Subd. 3.  [UTILIZATION OF DISTRICT SYSTEM.] The board may 
289.26  require any person or local governmental unit to provide for the 
289.27  discharge of any sewage, directly or indirectly, into the 
289.28  district disposal system, or to connect any disposal system or a 
289.29  part of it with the district disposal system wherever reasonable 
289.30  opportunity for connection is provided; may regulate the manner 
289.31  in which the connections are made; may require any person or 
289.32  local governmental unit discharging sewage into the disposal 
289.33  system to provide preliminary treatment for it; may prohibit the 
289.34  discharge into the district disposal system of any substance 
289.35  that it determines will or may be harmful to the system or any 
289.36  persons operating it; and may require any local governmental 
290.1   unit to discontinue the acquisition, betterment, or operation of 
290.2   any facility for the unit's disposal system wherever and so far 
290.3   as adequate service is or will be provided by the district 
290.4   disposal system. 
290.5      Subd. 4.  [SYSTEM OF COST RECOVERY TO COMPLY WITH 
290.6   APPLICABLE REGULATIONS.] Any charges, connection fees, or other 
290.7   cost-recovery techniques imposed on persons discharging sewage 
290.8   directly or indirectly into the district disposal system must 
290.9   comply with applicable state and federal law, including state 
290.10  and federal regulations governing grant applications. 
290.11     Sec. 28.  [BUDGET.] 
290.12     The board shall prepare and adopt, on or before October 1 
290.13  in 1999 and each year thereafter, a budget showing for the 
290.14  following calendar year or other fiscal year determined by the 
290.15  board, sometimes referred to in sections 20 to 38 as the budget 
290.16  year, estimated receipts of money from all sources, including 
290.17  but not limited to payments by each local governmental unit, 
290.18  federal or state grants, taxes on property, and funds on hand at 
290.19  the beginning of the year, and estimated expenditures for: 
290.20     (1) costs of operation, administration, and maintenance of 
290.21  the district disposal system; 
290.22     (2) cost of acquisition and betterment of the district 
290.23  disposal system; and 
290.24     (3) debt service, including principal and interest, on 
290.25  general obligation bonds and certificates issued pursuant to 
290.26  section 32, and any money judgments entered by a court of 
290.27  competent jurisdiction.  Expenditures within these general 
290.28  categories, and any other categories as the board may from time 
290.29  to time determine, must be itemized in detail as the board 
290.30  prescribes.  The board and its officers, agents, and employees 
290.31  shall not spend money for any purpose other than debt service 
290.32  without having set forth the expense in the budget nor in excess 
290.33  of the amount set forth in the budget for it.  No obligation to 
290.34  make an expenditure of the above-mentioned type is enforceable 
290.35  except as the obligation of the person or persons incurring it.  
290.36  The board may amend the budget at any time by transferring from 
291.1   one purpose to another any sums except money for debt service 
291.2   and bond proceeds or by increasing expenditures in any amount by 
291.3   which actual cash receipts during the budget year exceed the 
291.4   total amounts designated in the original budget.  The creation 
291.5   of any obligation under section 32 or the receipt of any federal 
291.6   or state grant is a sufficient budget designation of the 
291.7   proceeds for the purpose for which it is authorized, and of the 
291.8   tax or other revenue pledged to pay the obligation and interest 
291.9   on it, whether or not specifically included in any annual budget.
291.10     Sec. 29.  [ALLOCATION OF COSTS.] 
291.11     Subdivision 1.  [DEFINITION OF CURRENT COSTS.] The 
291.12  estimated cost of administration, operation, maintenance, and 
291.13  debt service of the district disposal system to be paid by the 
291.14  board in each fiscal year and the estimated costs of acquisition 
291.15  and betterment of the system that are to be paid during the year 
291.16  from funds other than state or federal grants and bond proceeds 
291.17  and all other previously unallocated payments made by the board 
291.18  pursuant to sections 20 to 38 to be allocated in the fiscal year 
291.19  are referred to as current costs and must be allocated by the 
291.20  board as provided in subdivision 2 in the budget for that year. 
291.21     Subd. 2.  [METHOD OF ALLOCATION OF CURRENT COSTS.] Current 
291.22  costs must be allocated in the district on an equitable basis as 
291.23  the board may determine by resolution to be in the best 
291.24  interests of the district.  The adoption or revision of any 
291.25  method of allocation used by the board must be by the 
291.26  affirmative vote of at least two-thirds of the members of the 
291.27  board. 
291.28     Sec. 30.  [TAX LEVIES.] 
291.29     To accomplish any duty imposed on it the board may, in 
291.30  addition to the powers granted in sections 20 to 38 and in any 
291.31  other law or charter, exercise the powers granted any 
291.32  municipality by Minnesota Statutes, chapters 117, 412, 429, 475, 
291.33  sections 115.46, 444.075, and 471.59, with respect to the area 
291.34  in the district.  The board may levy taxes upon all taxable 
291.35  property in the district for all or a part of the amount payable 
291.36  to the board, pursuant to section 29, to be assessed and 
292.1   extended as a tax upon that taxable property by the county 
292.2   auditor for the next calendar year, free from any limitation of 
292.3   rate or amount imposed by law or charter.  The tax must be 
292.4   collected and remitted in the same manner as other general taxes.
292.5      Sec. 31.  [PUBLIC HEARING AND SPECIAL ASSESSMENTS.] 
292.6      Subdivision 1.  [PUBLIC HEARING REQUIREMENT ON SPECIFIC 
292.7   PROJECT.] Before the board orders any project involving the 
292.8   acquisition or betterment of any interceptor or treatment works, 
292.9   all or a part of the cost of which will be allocated pursuant to 
292.10  section 29 as current costs, the board shall hold a public 
292.11  hearing on the proposed project.  The hearing must be held 
292.12  following two publications in a newspaper having general 
292.13  circulation in the district, stating the time and place of the 
292.14  hearing, the general nature and location of the project, the 
292.15  estimated total cost of acquisition and betterment, that portion 
292.16  of costs estimated to be paid out of federal and state grants, 
292.17  and that portion of costs estimated to be allocated.  The 
292.18  estimates must be best available at the time of the meeting and 
292.19  if costs exceed the estimate, the project cannot proceed until 
292.20  an additional public hearing is held, with notice as required at 
292.21  the initial meeting.  The two publications must be a week apart 
292.22  and the hearing at least three days after the last publication.  
292.23  Not less than 45 days before the hearing, notice of the hearing 
292.24  must also be mailed to each clerk of all local governmental 
292.25  units in the district, but failure to give mailed notice or any 
292.26  defects in the notice does not invalidate the proceedings.  The 
292.27  project may include all or part of one or more interceptors or 
292.28  treatment works.  No hearing may be held on any project unless 
292.29  the project is within the area covered by the comprehensive plan 
292.30  adopted by the board pursuant to section 24 except that the 
292.31  hearing may be held simultaneously with a hearing on a 
292.32  comprehensive plan.  A hearing is not required with respect to a 
292.33  project, no part of the costs of which are to be allocated as 
292.34  the current costs of acquisition, betterment, and debt service. 
292.35     Subd. 2.  [NOTICE TO BENEFITED PROPERTY OWNERS.] If the 
292.36  board proposes to assess against benefited property within the 
293.1   district all or any part of the allocable costs of the project 
293.2   as provided in subdivision 5, the board shall, not less than two 
293.3   weeks before the hearing provided for in subdivision 1, cause 
293.4   mailed notice of the hearing to be given to the owner of each 
293.5   parcel within the area proposed to be specially assessed and 
293.6   shall also give two weeks' published notice of the hearing.  The 
293.7   notice of hearing must contain the same information provided in 
293.8   the notice published by the board pursuant to subdivision 1, and 
293.9   a description of the area proposed to be assessed.  For the 
293.10  purpose of giving mailed notice, owners are those shown to be on 
293.11  the records of the county auditor or, in any county where tax 
293.12  statements are mailed by the county treasurer, on the records of 
293.13  the county treasurer; but other appropriate records may be used 
293.14  for this purpose.  For properties that are tax exempt or subject 
293.15  to taxation on a gross earnings basis and not listed on the 
293.16  records of the county auditor or the county treasurer, the 
293.17  owners must be ascertained by any practicable means and mailed 
293.18  notice given them as herein provided.  Failure to give mailed 
293.19  notice or any defects in the notice does not invalidate the 
293.20  proceedings of the board. 
293.21     Subd. 3.  [BOARD PROCEEDINGS PERTAINING TO HEARING.] Before 
293.22  adoption of the resolution calling for a hearing under this 
293.23  section, the board shall secure from the district engineer or 
293.24  some other competent person of the board's selection a report 
293.25  advising it in a preliminary way as to whether the proposed 
293.26  project is feasible and whether it should be made as proposed or 
293.27  in connection with some other project and the estimated costs of 
293.28  the project as recommended.  No error or omission in the report 
293.29  invalidates the proceeding.  The board may also take other steps 
293.30  before the hearing, as will in its judgment provide helpful 
293.31  information in determining the desirability and feasibility of 
293.32  the project, including but not limited to preparation of plans 
293.33  and specifications and advertisement for bids on them.  The 
293.34  hearing may be adjourned from time to time and a resolution 
293.35  ordering the project may be adopted at any time within six 
293.36  months after the date of hearing.  In ordering the project the 
294.1   board may reduce but not increase the extent of the project as 
294.2   stated in the notice of hearing and shall find that the project 
294.3   as ordered is in accordance with the comprehensive plan and 
294.4   program adopted by the board pursuant to section 24. 
294.5      Subd. 4.  [EMERGENCY ACTION.] If the board by resolution 
294.6   adopted by the affirmative vote of not less than two-thirds of 
294.7   its members determines that an emergency exists requiring the 
294.8   immediate purchase of materials or supplies or the making of 
294.9   emergency repairs, it may order the purchase of those supplies 
294.10  and materials and the making of the repairs before any hearing 
294.11  required under this section, provided that the board shall set 
294.12  as early a date as practicable for the hearing at the time it 
294.13  declares the emergency.  All other provisions of this section 
294.14  must be followed in giving notice of and conducting the 
294.15  hearing.  Nothing herein may be construed as preventing the 
294.16  board or its agents from purchasing maintenance supplies or 
294.17  incurring maintenance costs without regard to the requirements 
294.18  of this section. 
294.19     Subd. 5.  [POWER OF THE BOARD TO SPECIALLY ASSESS.] The 
294.20  board may specially assess all or any part of the costs of 
294.21  acquisition and betterment as herein provided, of any project 
294.22  ordered pursuant to this section.  The special assessments must 
294.23  be levied in accordance with the provisions of Minnesota 
294.24  Statutes, sections 429.051 to 429.081, except as otherwise 
294.25  provided in this subdivision.  No other provisions of Minnesota 
294.26  Statutes, chapter 429, apply.  For purposes of levying the 
294.27  special assessments, the hearing on the project required in 
294.28  subdivision 1 serves as the hearing on the making of the 
294.29  original improvement provided for by Minnesota Statutes, section 
294.30  429.051.  The area assessed may be less than but may not exceed 
294.31  the area proposed to be assessed as stated in the notice of 
294.32  hearing on the project provided for in subdivision 2. 
294.33     Sec. 32.  [BONDS, CERTIFICATES, AND OTHER OBLIGATIONS.] 
294.34     Subdivision 1.  [BUDGET ANTICIPATION CERTIFICATES OF 
294.35  INDEBTEDNESS.] At any time after adoption of its annual budget 
294.36  and in anticipation of the collection of tax and other revenues 
295.1   estimated and set forth by the board in the budget, except in 
295.2   the case of deficiency taxes levied under this subdivision and 
295.3   taxes levied for the payment of certificates issued under 
295.4   subdivision 2, the board may, by resolution, authorize the 
295.5   issuance, negotiation, and sale, in accordance with subdivision 
295.6   4 in the form and manner and upon terms it determines, of its 
295.7   negotiable general obligation certificates of indebtedness in 
295.8   aggregate principal amounts not exceeding 50 percent of the 
295.9   total amount of tax collections and other revenues, and maturing 
295.10  not later than three months after the close of the budget year 
295.11  in which issued.  The proceeds of the sale of the certificates 
295.12  must be used solely for the purposes for which the tax 
295.13  collections and other revenues are to be expended pursuant to 
295.14  the budget. 
295.15     All the tax collections and other revenues included in the 
295.16  budget for the budget year, after the expenditure of the tax 
295.17  collections and other revenues in accordance with the budget, 
295.18  must be irrevocably pledged and appropriated to a special fund 
295.19  to pay the principal and interest on the certificates when due.  
295.20  If for any reason the tax collections and other revenues are 
295.21  insufficient to pay the certificates and interest when due, the 
295.22  board shall levy a tax in the amount of the deficiency on all 
295.23  taxable property in the district and shall appropriate this 
295.24  amount when received to the special fund. 
295.25     Subd. 2.  [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in 
295.26  any budget year the receipts of tax and other revenues should 
295.27  for some unforeseen cause become insufficient to pay the board's 
295.28  current expenses, or if any public emergency should subject it 
295.29  to the necessity of making extraordinary expenditures, the board 
295.30  may by resolution authorize the issuance, negotiation, and sale, 
295.31  in accordance with subdivision 4 in the form and manner and upon 
295.32  the terms and conditions it determines, of its negotiable 
295.33  general obligation certificates of indebtedness in an amount 
295.34  sufficient to meet the deficiency.  The board shall levy on all 
295.35  taxable property in the district a tax sufficient to pay the 
295.36  certificates and interest on the certificates and shall 
296.1   appropriate all collections of the tax to a special fund created 
296.2   for the payment of the certificates and the interest on them.  
296.3   Certificates issued under this subdivision mature not later than 
296.4   April 1 in the year following the year in which the tax is 
296.5   collectible. 
296.6      Subd. 3.  [GENERAL OBLIGATION BONDS.] The board may by 
296.7   resolution authorize the issuance of general obligation bonds 
296.8   for the acquisition or betterment of any part of the district 
296.9   disposal system, including but without limitation the payment of 
296.10  interest during construction and for a reasonable period 
296.11  thereafter, or for the refunding of outstanding bonds, 
296.12  certificates of indebtedness, or judgments.  The board shall 
296.13  pledge its full faith and credit and taxing power for the 
296.14  payment of the bonds and shall provide for the issuance and sale 
296.15  and for the security of the bonds in the manner provided in 
296.16  Minnesota Statutes, chapter 475.  The board has the same powers 
296.17  and duties as a municipality issuing bonds under that law, 
296.18  except that no election is required and the debt limitations of 
296.19  Minnesota Statutes, chapter 475, do not apply to the bonds.  The 
296.20  board may also pledge for the payment of the bonds and deduct 
296.21  from the amount of any tax levy required under Minnesota 
296.22  Statutes, section 475.61, subdivision 1, and any revenues 
296.23  receivable under any state and federal grants anticipated by the 
296.24  board and may covenant to refund the bonds if and when and to 
296.25  the extent that for any reason the revenues, together with other 
296.26  funds available and appropriated for that purpose, are not 
296.27  sufficient to pay all principal and interest due or about to 
296.28  become due, provided that the revenues have not been anticipated 
296.29  by the issuance of certificates under subdivision 1. 
296.30     Subd. 4.  [MANNER OF SALE AND ISSUANCE OF CERTIFICATES.] 
296.31  Certificates issued under subdivisions 1 and 2 may be issued and 
296.32  sold by negotiation, without public sale, and may be sold at a 
296.33  price equal to the percentage of the par value of the 
296.34  certificates, plus accrued interest, and bearing interest at the 
296.35  rate determined by the board.  No election is required to 
296.36  authorize the issuance of the certificates.  The certificates 
297.1   must bear the same rate of interest after maturity as before and 
297.2   the full faith and credit and taxing power of the board must be 
297.3   pledged to the payment of the certificates. 
297.4      Sec. 33.  [DEPOSITORIES.] 
297.5      The board shall designate one or more national or state 
297.6   banks, or trust companies authorized to do a banking business, 
297.7   as official depositories for money of the board, and shall 
297.8   require the treasurer to deposit all or a part of the money in 
297.9   those institutions.  The designation must be in writing and must 
297.10  set forth all the terms and conditions upon which the deposits 
297.11  are made, and must be signed by the chair and treasurer and made 
297.12  a part of the minutes of the board.  
297.13     Sec. 34.  [MONEY, ACCOUNTS, AND INVESTMENTS.] 
297.14     Subdivision 1.  [RECEIPT AND APPLICATION.] Money received 
297.15  by the board must be deposited or invested by the treasurer and 
297.16  disposed of as the board may direct in accordance with its 
297.17  budget; provided that any money that has been pledged or 
297.18  dedicated by the board to the payment of obligations or interest 
297.19  on the obligations or expenses incident thereto, or for any 
297.20  other specific purpose authorized by law, must be paid by the 
297.21  treasurer into the fund to which it has been pledged. 
297.22     Subd. 2.  [FUNDS AND ACCOUNTS.] (a) The board's treasurer 
297.23  shall establish funds and accounts as may be necessary or 
297.24  convenient to handle the receipts and disbursements of the board 
297.25  in an orderly fashion. 
297.26     (b) The funds and accounts must be audited annually by a 
297.27  certified public accountant at the expense of the district. 
297.28     Subd. 3.  [DEPOSIT AND INVESTMENT.] The money on hand in 
297.29  those funds and accounts may be deposited in the official 
297.30  depositories of the board or invested as provided in this 
297.31  subdivision.  Any amount not currently needed or required by law 
297.32  to be kept in cash on deposit may be invested in obligations 
297.33  authorized for the investment of municipal sinking funds by 
297.34  Minnesota Statutes, section 475.66.  The money may also be held 
297.35  under certificates of deposit issued by any official depository 
297.36  of the board. 
298.1      Subd. 4.  [BOND PROCEEDS.] The use of proceeds of all bonds 
298.2   issued by the board for the acquisition and betterment of the 
298.3   district disposal system, and the use, other than investment, of 
298.4   all money on hand in any sinking fund or funds of the board, is 
298.5   governed by the provisions of Minnesota Statutes, chapter 475, 
298.6   the provisions of sections 20 to 38, and the provisions of 
298.7   resolutions authorizing the issuance of the bonds.  When 
298.8   received, the bond proceeds must be transferred to the treasurer 
298.9   of the board for safekeeping, investment, and payment of the 
298.10  costs for which they were issued. 
298.11     Subd. 5.  [AUDIT.] The board shall provide for and pay the 
298.12  cost of an independent annual audit of its official books and 
298.13  records by the state auditor or a public accountant authorized 
298.14  to perform that function under Minnesota Statutes, chapter 6. 
298.15     Sec. 35.  [SERVICE CONTRACTS WITH GOVERNMENTAL ENTITIES 
298.16  OUTSIDE THE JURISDICTION OF THE BOARD.] 
298.17     (a) The board may contract with the United States or any 
298.18  agency of the federal government, any state or its agency, or 
298.19  any municipal or public corporation, governmental subdivision or 
298.20  agency or political subdivision in any state, outside the 
298.21  jurisdiction of the board, for furnishing services to those 
298.22  entities, including but not limited to planning for and the 
298.23  acquisition, betterment, operation, administration, and 
298.24  maintenance of any or all interceptors, treatment works, and 
298.25  local water and sanitary sewer facilities.  The board may 
298.26  include as one of the terms of the contract that the entity must 
298.27  pay to the board an amount agreed upon as a reasonable estimate 
298.28  of the proportionate share properly allocable to the entity of 
298.29  costs of acquisition, betterment, and debt service previously 
298.30  allocated in the district.  When payments are made by entities 
298.31  to the board, they must be applied in reduction of the total 
298.32  amount of costs thereafter allocated in the district, on an 
298.33  equitable basis as the board deems to be in the best interests 
298.34  of the district, applying so far as practicable and appropriate 
298.35  the criteria set forth in section 29, subdivision 2.  A 
298.36  municipality in the state of Minnesota may enter into a contract 
299.1   and perform all acts and things required as a condition or 
299.2   consideration therefor consistent with the purposes of sections 
299.3   20 to 38, whether or not included among the powers otherwise 
299.4   granted to the municipality by law or charter. 
299.5      (b) The board shall contract with a qualified entity to 
299.6   make necessary inspections on the district facilities, and to 
299.7   otherwise process or assist in processing any of the work of the 
299.8   district. 
299.9      Sec. 36.  [CONTRACTS FOR CONSTRUCTION, MATERIALS, SUPPLIES, 
299.10  AND EQUIPMENT.] 
299.11     When the board orders a project involving the acquisition 
299.12  or betterment of a part of the district disposal system, it 
299.13  shall cause plans and specifications of the project to be made, 
299.14  or if previously made, to be modified, if necessary, and to be 
299.15  approved by the agency if required, and after any required 
299.16  approval by the agency, one or more contracts for work and 
299.17  materials called for by the plans and specification may be 
299.18  awarded as provided in Minnesota Statutes, section 471.345. 
299.19     Sec. 37.  [PROPERTY EXEMPT FROM TAXATION.] 
299.20     Any properties, real or personal, owned, leased, 
299.21  controlled, used, or occupied by the water and sanitary sewer 
299.22  board for any purpose under sections 20 to 38 are declared to be 
299.23  acquired, owned, leased, controlled, used, and occupied for 
299.24  public, governmental, and municipal purposes, and are exempt 
299.25  from taxation by the state or any political subdivision of the 
299.26  state, provided that the properties are subject to special 
299.27  assessments levied by a political subdivision for a local 
299.28  improvement in amounts proportionate to and not exceeding the 
299.29  special benefit received by the properties from the 
299.30  improvement.  No possible use of any properties in any manner 
299.31  different from their use as part of a disposal system at the 
299.32  time may be considered in determining the special benefit 
299.33  received by the properties.  All assessments are subject to 
299.34  final approval by the board, whose determination of the benefits 
299.35  is conclusive upon the political subdivision levying the 
299.36  assessment. 
300.1      Sec. 38.  [RELATION TO EXISTING LAWS.] 
300.2      The provisions of sections 20 to 38 must be given full 
300.3   effect notwithstanding the provisions of any law or charter 
300.4   inconsistent with sections 20 to 38.  The powers conferred on 
300.5   the board under sections 20 to 38 do not in any way diminish or 
300.6   supersede the powers conferred on the agency by Minnesota 
300.7   Statutes, chapters 115 to 116. 
300.8      Sec. 39.  [EFFECTIVE DATE.] 
300.9      Sections 1 to 19 are effective the day after a certificate 
300.10  of approval under Minnesota Statutes, section 645.021, 
300.11  subdivision 3, is filed by the last of the four local 
300.12  governmental units subject to sections 1 to 19. 
300.13     Sections 20 to 38 are effective as to the city and the town 
300.14  of Finlayson separately the day after the certificate of 
300.15  approval of the governing body of each is filed as provided in 
300.16  Minnesota Statutes, section 645.021, subdivision 3. 
300.17                             ARTICLE 15 
300.18                 AUTOMATIC REBATE IN ENACTED BUDGET 
300.19     Section 1.  [16A.1522] [REBATE REQUIREMENTS.] 
300.20     Subdivision 1.  [FORECAST.] If, on the basis of a forecast 
300.21  of general fund revenues and expenditures in November of an 
300.22  even-numbered year or February of an odd-numbered year, the 
300.23  commissioner projects a positive unrestricted budgetary general 
300.24  fund balance at the close of the biennium that exceeds one-half 
300.25  of one percent of total general fund biennial revenues, the 
300.26  commissioner shall designate the entire balance as available for 
300.27  rebate to the taxpayers of this state.  In forecasting, 
300.28  projecting, or designating the unrestricted budgetary general 
300.29  fund balance or general fund biennial revenue under this 
300.30  section, the commissioner shall not include any balance or 
300.31  revenue attributable to settlement payments received after July 
300.32  1, 1998, and before July 1, 2001, as defined in Section IIB of 
300.33  the settlement document, filed May 18, 1998, in State v. Philip 
300.34  Morris, Inc., No. C1-94-8565 (Minnesota District Court, Second 
300.35  Judicial District). 
300.36     Subd. 2.  [PLAN.] If the commissioner designates an amount 
301.1   for rebate in either forecast, the governor shall present a plan 
301.2   to the legislature for rebating that amount.  The plan must 
301.3   provide for payments to begin no later than August 15 of the 
301.4   odd-numbered year.  By April 15 of each odd-numbered year, the 
301.5   legislature shall enact, modify, or reject the plan presented by 
301.6   the governor. 
301.7      Subd. 3.  [CERTIFICATION.] By July 15 of each odd-numbered 
301.8   year, based on a preliminary analysis of the general fund 
301.9   balance at the end of the fiscal year June 30, the commissioner 
301.10  of finance shall certify to the commissioner of revenue the 
301.11  amount available for rebate. 
301.12     Subd. 4.  [TRANSFER TO TAX RELIEF ACCOUNT.] Any positive 
301.13  unrestricted budgetary general fund balance on June 30 of an 
301.14  odd-numbered year is appropriated to the commissioner for 
301.15  transfer to the tax relief account. 
301.16     Subd. 5.  [APPROPRIATION.] A sum sufficient to pay any 
301.17  rebate due under the plan enacted under subdivision 2 is 
301.18  appropriated from the general fund to the commissioner of 
301.19  revenue. 
301.20     Sec. 2.  [ABOLISHING TAX REFORM AND REDUCTION ACCOUNT.] 
301.21     The tax reform and reduction account created in Laws 1998, 
301.22  chapter 389, article 9, section 2, subdivision 2, clause (2), is 
301.23  abolished.  The balance in the account shall revert to the 
301.24  unrestricted general fund balance. 
301.25     Sec. 3.  [EFFECTIVE DATE.] 
301.26     Section 1 is effective September 1, 1999.  Section 2 is 
301.27  effective the day following final enactment. 
301.28                             ARTICLE 16 
301.29                           MISCELLANEOUS 
301.30     Section 1.  Minnesota Statutes 1998, section 3.986, 
301.31  subdivision 2, is amended to read: 
301.32     Subd. 2.  [LOCAL FISCAL IMPACT.] (a) "Local fiscal impact" 
301.33  means increased or decreased costs or revenues that a political 
301.34  subdivision would incur as a result of a law enacted after June 
301.35  30, 1997, or rule proposed after December 31, 1998 1999: 
301.36     (1) that mandates a new program, eliminates an existing 
302.1   mandated program, requires an increased level of service of an 
302.2   existing program, or permits a decreased level of service in an 
302.3   existing mandated program; 
302.4      (2) that implements or interprets federal law and, by its 
302.5   implementation or interpretation, increases or decreases program 
302.6   or service levels beyond the level required by the federal law; 
302.7      (3) that implements or interprets a statute or amendment 
302.8   adopted or enacted pursuant to the approval of a statewide 
302.9   ballot measure by the voters and, by its implementation or 
302.10  interpretation, increases or decreases program or service levels 
302.11  beyond the levels required by the ballot measure; 
302.12     (4) that removes an option previously available to 
302.13  political subdivisions, or adds an option previously unavailable 
302.14  to political subdivisions, thus requiring higher program or 
302.15  service levels or permitting lower program or service levels, or 
302.16  prohibits a specific activity and so forces political 
302.17  subdivisions to use a more costly alternative to provide a 
302.18  mandated program or service; 
302.19     (5) that requires that an existing program or service be 
302.20  provided in a shorter time period and thus increases the cost of 
302.21  the program or service, or permits an existing mandated program 
302.22  or service to be provided in a longer time period, thus 
302.23  permitting a decrease in the cost of the program or service; 
302.24     (6) that adds new requirements to an existing optional 
302.25  program or service and thus increases the cost of the program or 
302.26  service because the political subdivisions have no reasonable 
302.27  alternative other than to continue the optional program; 
302.28     (7) that affects local revenue collections by changes in 
302.29  property or sales and use tax exemptions; 
302.30     (8) that requires costs previously incurred at local option 
302.31  that have subsequently been mandated by the state; or 
302.32     (9) that requires payment of a new fee or increases the 
302.33  amount of an existing fee, or permits the elimination or 
302.34  decrease of an existing fee mandated by the state. 
302.35     (b) When state law is intended to achieve compliance with 
302.36  federal law or court orders, state mandates shall be determined 
303.1   as follows: 
303.2      (1) if the federal law or court order is discretionary, the 
303.3   state law is a state mandate; 
303.4      (2) if the state law exceeds what is required by the 
303.5   federal law or court order, only the provisions of the state law 
303.6   that exceed the federal requirements are a state mandate; and 
303.7      (3) if the state law does not exceed what is required by 
303.8   the federal statute or regulation or court order, the state law 
303.9   is not a state mandate. 
303.10     Sec. 2.  Minnesota Statutes 1998, section 3.987, 
303.11  subdivision 1, is amended to read: 
303.12     Subdivision 1.  [LOCAL IMPACT NOTES.] The commissioner of 
303.13  finance shall coordinate the development of a local impact note 
303.14  for any proposed legislation introduced after June 30, 1997, or 
303.15  any rule proposed after December 31, 1998 1999, upon request of 
303.16  the chair or the ranking minority member of either legislative 
303.17  tax committee.  Upon receipt of a request to prepare a local 
303.18  impact note, the commissioner must notify the authors of the 
303.19  proposed legislation or, for an administrative rule, the head of 
303.20  the relevant executive agency or department, that the request 
303.21  has been made.  The local impact note must be made available to 
303.22  the public upon request.  If the action is among the exceptions 
303.23  listed in section 3.988, a local impact note need not be 
303.24  requested nor prepared.  The commissioner shall make a 
303.25  reasonable and timely estimate of the local fiscal impact on 
303.26  each type of political subdivision that would result from the 
303.27  proposed legislation.  The commissioner of finance may require 
303.28  any political subdivision or the commissioner of an 
303.29  administrative agency of the state to supply in a timely manner 
303.30  any information determined to be necessary to determine local 
303.31  fiscal impact.  The political subdivision, its representative 
303.32  association, or commissioner shall convey the requested 
303.33  information to the commissioner of finance with a signed 
303.34  statement to the effect that the information is accurate and 
303.35  complete to the best of its ability.  The political subdivision, 
303.36  its representative association, or commissioner, when requested, 
304.1   shall update its determination of local fiscal impact based on 
304.2   actual cost or revenue figures, improved estimates, or both.  
304.3   Upon completion of the note, the commissioner must provide a 
304.4   copy to the authors of the proposed legislation or, for an 
304.5   administrative rule, to the head of the relevant executive 
304.6   agency or department. 
304.7      Sec. 3.  [16A.77] [TOBACCO SETTLEMENT FUND.] 
304.8      (a) A tobacco settlement fund is established in the state 
304.9   treasury.  Amounts in the fund are available only for purposes 
304.10  authorized by appropriation by the legislature.  The governor 
304.11  shall make recommendations to the legislature regarding use of 
304.12  the money in the fund. 
304.13     (b) The commissioner of finance shall credit all settlement 
304.14  payments received after July 1, 1998, and before July 1, 2001, 
304.15  as defined in Section IIB of the settlement document, filed May 
304.16  18, 1998, in the State of Minnesota et al. vs. Philip Morris et 
304.17  al., to the tobacco settlement fund.  All other payments to the 
304.18  state resulting from the specified litigation shall be credited 
304.19  to the general fund. 
304.20     Sec. 4.  Minnesota Statutes 1998, section 270.07, 
304.21  subdivision 1, is amended to read: 
304.22     Subdivision 1.  [POWERS OF COMMISSIONER; APPLICATION FOR 
304.23  ABATEMENT; ORDERS.] (a) The commissioner of revenue shall 
304.24  prescribe the form of all blanks and books required under this 
304.25  chapter and shall hear and determine all matters of grievance 
304.26  relating to taxation.  Except for matters delegated to the 
304.27  various boards of county commissioners under section 375.192, 
304.28  and except as otherwise provided by law, the commissioner shall 
304.29  have power to grant such reduction or abatement of net tax 
304.30  capacities or taxes and of any costs, penalties or interest 
304.31  thereon as the commissioner may deem just and equitable, and to 
304.32  order the refundment, in whole or in part, of any taxes, costs, 
304.33  penalties or interest thereon which have been erroneously or 
304.34  unjustly paid.  Application therefor shall be submitted with a 
304.35  statement of facts in the case and the favorable recommendation 
304.36  of the county board or of the board of abatement of any city 
305.1   where any such board exists, and the county auditor of the 
305.2   county wherein such tax was levied or paid. In the case of taxes 
305.3   other than gross earnings taxes, the order may be made only on 
305.4   application and approval as provided in this paragraph.  No 
305.5   reduction, abatement, or refundment of any special assessments 
305.6   made or levied by any municipality for local improvements shall 
305.7   be made unless it is also approved by the board of review or 
305.8   similar taxing authority of such municipality. 
305.9      (b) The commissioner has the power to grant reductions or 
305.10  abatements of gross earnings tax.  An application for reduction 
305.11  of gross earnings taxes may be made directly to the commissioner 
305.12  without the favorable action of the county board and county 
305.13  auditor.  The commissioner shall direct that any gross earnings 
305.14  taxes that may have been erroneously or unjustly paid be applied 
305.15  against unpaid taxes due from the applicant. 
305.16     (c) The commissioner shall forward to the county auditor a 
305.17  copy of the order made by the commissioner in all cases in which 
305.18  the approval of the county board is required. 
305.19     (d) The commissioner may refer any question that may arise 
305.20  in reference to the true construction of this chapter to the 
305.21  attorney general, and the decision thereon shall be in force and 
305.22  effect until annulled by the judgment of a court of competent 
305.23  jurisdiction.  
305.24     (e) The commissioner may by written order abate, reduce, or 
305.25  refund any penalty or interest imposed by any law relating to 
305.26  taxation, if in the commissioner's opinion the failure to timely 
305.27  pay the tax or failure to timely file the return is due to 
305.28  reasonable cause, or if the taxpayer is located in a 
305.29  presidentially declared disaster area.  The order shall be made 
305.30  on application of the taxpayer to the commissioner. 
305.31     (f) If an order issued under this subdivision is for an 
305.32  abatement, reduction, or refund of over $5,000, it shall be 
305.33  valid only if approved in writing by the attorney general. 
305.34     (g) (f) An appeal may not be taken to the tax court from 
305.35  any order of the commissioner of revenue made in the exercise of 
305.36  the discretionary authority granted in paragraph (a) with 
306.1   respect to the reduction or abatement of real or personal 
306.2   property taxes in response to a taxpayer's application for an 
306.3   abatement, reduction, or refund of taxes, net tax capacities, 
306.4   costs, penalties, or interest. 
306.5      Sec. 5.  Minnesota Statutes 1998, section 270.65, is 
306.6   amended to read: 
306.7      270.65 [DATE OF ASSESSMENT; DEFINITION.] 
306.8      For purposes of taxes administered by the commissioner, the 
306.9   term "date of assessment" means the date a return was filed or 
306.10  the date a return should have been filed, whichever is later; 
306.11  or, in the case of taxes determined by the commissioner, "date 
306.12  of assessment" means the date of the order assessing taxes; or, 
306.13  in the case of an amended return filed by the taxpayer, the 
306.14  assessment date is the date the return was filed with the 
306.15  commissioner; or, in the case of a check from a taxpayer that is 
306.16  dishonored and results in an erroneous refund being given to the 
306.17  taxpayer, remittance of the check is deemed to be an assessment 
306.18  and the "date of assessment" is the date the check was received 
306.19  by the commissioner. 
306.20     Sec. 6.  Minnesota Statutes 1998, section 270.67, is 
306.21  amended by adding a subdivision to read: 
306.22     Subd. 4.  [OFFER-IN-COMPROMISE AND INSTALLMENT PAYMENT 
306.23  PROGRAM.] (a) In implementing the authority provided in 
306.24  subdivision 1 or in section 8.30 to accept offers of installment 
306.25  payments or offers-in-compromise of tax liabilities, the 
306.26  commissioner of revenue shall prescribe guidelines for employees 
306.27  of the department of revenue to determine whether an 
306.28  offer-in-compromise or an offer to make installment payments is 
306.29  adequate and should be accepted to resolve a dispute.  In 
306.30  prescribing the guidelines, the commissioner shall develop and 
306.31  publish schedules of national and local allowances designed to 
306.32  provide that taxpayers entering into a compromise or payment 
306.33  agreement have an adequate means to provide for basic living 
306.34  expenses.  The guidelines must provide that the taxpayer's 
306.35  ownership interest in a motor vehicle, to the extent of the 
306.36  value allowed in section 550.37, will not be considered as an 
307.1   asset; in the case of an offer related to a joint tax liability 
307.2   of spouses, that value of two motor vehicles must be excluded.  
307.3   The guidelines must provide that employees of the department 
307.4   shall determine, on the basis of the facts and circumstances of 
307.5   each taxpayer, whether the use of the schedules is appropriate 
307.6   and that employees must not use the schedules to the extent the 
307.7   use would result in the taxpayer not having adequate means to 
307.8   provide for basic living expenses.  The guidelines must provide 
307.9   that: 
307.10     (1) an employee of the department shall not reject an 
307.11  offer-in-compromise or an offer to make installment payments 
307.12  from a low-income taxpayer solely on the basis of the amount of 
307.13  the offer; and 
307.14     (2) in the case of an offer-in-compromise which relates 
307.15  only to issues of liability of the taxpayer: 
307.16     (i) the offer must not be rejected solely because the 
307.17  commissioner is unable to locate the taxpayer's return or return 
307.18  information for verification of the liability; and 
307.19     (ii) the taxpayer shall not be required to provide an 
307.20  audited, reviewed, or compiled financial statement. 
307.21     (b) The commissioner shall establish procedures: 
307.22     (1) that require presentation of a counteroffer or a 
307.23  written rejection of the offer by the commissioner if the amount 
307.24  offered by the taxpayer in an offer-in-compromise or an offer to 
307.25  make installment payments is not accepted by the commissioner; 
307.26     (2) for an administrative review of any written rejection 
307.27  of a proposed offer-in-compromise or installment agreement made 
307.28  by a taxpayer under this section before the rejection is 
307.29  communicated to the taxpayer; 
307.30     (3) that allow a taxpayer to request reconsideration of any 
307.31  written rejection of the offer or agreement to the commissioner 
307.32  of revenue to determine whether the rejection is reasonable and 
307.33  appropriate under the circumstances; and 
307.34     (4) that provide for notification to the taxpayer when an 
307.35  offer-in-compromise has been accepted, and issuance of 
307.36  certificates of release of any liens imposed under section 
308.1   270.69 related to the liability which is the subject of the 
308.2   compromise. 
308.3      Sec. 7.  Minnesota Statutes 1998, section 270.78, is 
308.4   amended to read: 
308.5      270.78 [PENALTY FOR FAILURE TO MAKE PAYMENT BY ELECTRONIC 
308.6   FUNDS TRANSFER.] 
308.7      (a) In addition to other applicable penalties imposed by 
308.8   law, after notification from the commissioner of revenue to the 
308.9   taxpayer that payments for a tax administered by the 
308.10  commissioner are required to be made by means of electronic 
308.11  funds transfer, and the payments are remitted by some other 
308.12  means, there is a penalty in the amount of five percent of each 
308.13  payment that should have been remitted electronically.  The 
308.14  penalty can be abated under the abatement procedures prescribed 
308.15  in section 270.07, subdivision 6, if the failure to remit the 
308.16  payment electronically is due to reasonable cause.  The penalty 
308.17  bears interest at the rate specified in section 270.75 from the 
308.18  due date of the payment of the tax to the date of payment of the 
308.19  penalty. 
308.20     (b) The penalty under paragraph (a) does not apply if the 
308.21  taxpayer pays by other means the amount due at least three 
308.22  business days before the date the payment is due.  This 
308.23  paragraph does not apply after December 31, 1997. 
308.24     Sec. 8.  Minnesota Statutes 1998, section 270A.03, 
308.25  subdivision 2, is amended to read: 
308.26     Subd. 2.  [CLAIMANT AGENCY.] "Claimant agency" means any 
308.27  state agency, as defined by section 14.02, subdivision 2, the 
308.28  regents of the University of Minnesota, any district court of 
308.29  the state, any county, any statutory or home rule charter city 
308.30  presenting a claim for a municipal hospital or a public library, 
308.31  a hospital district, a private nonprofit hospital that leases 
308.32  its building from the county in which it is located, any public 
308.33  agency responsible for child support enforcement, any public 
308.34  agency responsible for the collection of court-ordered 
308.35  restitution, and any public agency established by general or 
308.36  special law that is responsible for the administration of a 
309.1   low-income housing program. 
309.2      Sec. 9.  Minnesota Statutes 1998, section 270A.07, 
309.3   subdivision 2, is amended to read: 
309.4      Subd. 2.  [SETOFF PROCEDURES.] (a) The commissioner, upon 
309.5   receipt of notification, shall initiate procedures to detect any 
309.6   refunds otherwise payable to the debtor.  When the commissioner 
309.7   determines that a refund is due to a debtor whose debt was 
309.8   submitted by a claimant agency, the commissioner shall first 
309.9   deduct the fee in subdivision 1 and then remit the refund or the 
309.10  amount claimed, whichever is less, to the agency.  In 
309.11  transferring or remitting moneys to the claimant agency, the 
309.12  commissioner shall provide information indicating the amount 
309.13  applied against each debtor's obligation and the debtor's 
309.14  address listed on the tax return.  
309.15     (b) The commissioner shall remit to the debtor the amount 
309.16  of any refund due in excess of the debt submitted for setoff by 
309.17  the claimant agency.  Notice of the amount setoff and address of 
309.18  the claimant agency shall accompany any disbursement to the 
309.19  debtor of the balance of a refund.  The notice shall also advise 
309.20  the debtor of the right to contest the validity of the claim, 
309.21  other than a claim based upon child support under section 
309.22  518.171, 518.54, 518.551, or chapter 518C at a hearing, subject 
309.23  to the restrictions in this paragraph.  The debtor must assert 
309.24  this right by written request to the claimant agency, which 
309.25  request the claimant agency must receive within 45 days of the 
309.26  date of the notice.  This right does not apply to (1) issues 
309.27  relating to the validity of the claim that have been previously 
309.28  raised at a hearing under this section or section 270A.09; (2) 
309.29  issues relating to the validity of the claim that were not 
309.30  timely raised by the debtor under section 270A.08, subdivision 
309.31  2; or (3) issues relating to the validity of the claim that have 
309.32  been previously raised at a hearing conducted under rules 
309.33  promulgated by the United States Department of Housing and Urban 
309.34  Development or any public agency that is responsible for the 
309.35  administration of a low-income housing program, or that were not 
309.36  timely raised by the debtor under those rules; or (4) issues 
310.1   relating to the validity of the claim for which a hearing is 
310.2   discretionary under section 270A.09. 
310.3      Sec. 10.  Minnesota Statutes 1998, section 270A.08, 
310.4   subdivision 2, is amended to read: 
310.5      Subd. 2.  [REQUIREMENTS OF NOTICE.] (a) This written notice 
310.6   shall clearly and with specificity set forth the basis for the 
310.7   claim to the refund including the name of the benefit program 
310.8   involved if the debt arises from a public assistance grant and 
310.9   the dates on which the debt was incurred and, further, shall 
310.10  advise the debtor of the claimant agency's intention to request 
310.11  setoff of the refund against the debt.  
310.12     (b) Except as provided in paragraph (c), the notice will 
310.13  also advise the debtor that the debt can be setoff against a 
310.14  refund unless the time period allowed by law for collecting the 
310.15  debt has expired, and will advise the debtor of the right to 
310.16  contest the validity of the claim at a hearing.  The debtor must 
310.17  assert this right by written request to the claimant agency, 
310.18  which request the agency must receive within 45 days of the 
310.19  mailing date of the original notice or of the corrected notice, 
310.20  as required by subdivision 1.  If the debtor has not received 
310.21  the notice, the 45 days shall not commence until the debtor has 
310.22  received actual notice.  The debtor shall have the burden of 
310.23  showing no notice and shall be entitled to a hearing on the 
310.24  issue of notice as well as on the merits. 
310.25     (c) If the claimant agency is a public agency that is 
310.26  responsible for the administration of a low-income housing 
310.27  program, the notice will also advise the debtor that the debt 
310.28  can be set off against a refund unless the time period allowed 
310.29  by law for collecting the debt has expired.  If the public 
310.30  agency has provided the debtor with the opportunity to contest 
310.31  the issues relating to the validity of the claim at a hearing 
310.32  under rules promulgated by the United States Department of 
310.33  Housing and Urban Development or the public agency, the notice 
310.34  will advise the debtor of that fact and advise the debtor that 
310.35  no further hearing may be requested by the debtor to contest the 
310.36  validity of the claim. 
311.1      Sec. 11.  Minnesota Statutes 1998, section 287.01, 
311.2   subdivision 3, as amended by Laws 1999, chapter 31, section 1, 
311.3   is amended to read: 
311.4      Subd. 3.  [DEBT.] "Debt" means the principal amount of an 
311.5   obligation to pay money or to perform or refrain from performing 
311.6   an act that is secured in whole or in part by a mortgage of an 
311.7   interest in real property. 
311.8      Sec. 12.  Minnesota Statutes 1998, section 287.05, 
311.9   subdivision 1, as amended by Laws 1999, chapter 31, section 5, 
311.10  is amended to read: 
311.11     Subdivision 1.  [REAL PROPERTY OUTSIDE MINNESOTA.] (a) When 
311.12  a multistate mortgage is intended to secure only a portion of a 
311.13  debt amount recited or referred to in the mortgage, the mortgage 
311.14  may contain the following statement, or its equivalent, on the 
311.15  first page:  "Notwithstanding anything to the contrary herein, 
311.16  enforcement of this mortgage in Minnesota is limited to a debt 
311.17  amount of $....... under chapter 287 of Minnesota Statutes."  In 
311.18  such case, the tax shall be imposed based only on the amount of 
311.19  debt so stated to be secured by real property located in this 
311.20  state; and, the effect of the mortgage, or any amendment or 
311.21  extension, as evidence in any court in this state, or as notice 
311.22  for any purpose in this state, shall be limited to the amount 
311.23  contained in the statement and for which the tax has been 
311.24  paid and additional amounts for accrued interest and advances 
311.25  not subject to tax under section 287.035 or 287.05, subdivision 
311.26  4.  
311.27     (b) All multistate mortgages not taxed under paragraph (a) 
311.28  shall be taxed under sections 287.01 to 287.13 as if the real 
311.29  property identified in the mortgage secures payment of that 
311.30  portion of the maximum debt amount referred to, or incorporated 
311.31  by reference, in the mortgage that is equal to a fraction the 
311.32  numerator of which is the value of the real property described 
311.33  in the mortgage that is located in this state and the 
311.34  denominator of which is the value of all the real property 
311.35  described in the mortgage.  
311.36     Sec. 13.  Minnesota Statutes 1998, section 287.05, 
312.1   subdivision 1a, as amended by Laws 1999, chapter 31, section 5, 
312.2   is amended to read: 
312.3      Subd. 1a.  [REAL PROPERTY IN THIS STATE SECURES PORTION OF 
312.4   DEBT.] (a) When the real property identified in a mortgage is 
312.5   located entirely in this state and is intended to secure only a 
312.6   portion of a debt amount recited or referred to in the mortgage, 
312.7   the mortgage may contain the following statement, or its 
312.8   equivalent, on the first page:  "Notwithstanding anything to the 
312.9   contrary herein, enforcement of this mortgage is limited to a 
312.10  debt amount of $....... under chapter 287 of Minnesota 
312.11  Statutes."  In such case, the tax shall be imposed based only on 
312.12  the amount of debt so stated to be secured by real property; 
312.13  and, the effect of the mortgage, or any amendment or extension, 
312.14  as evidence in any court in this state, or as notice for any 
312.15  purpose in this state, shall be limited to the amount contained 
312.16  in the statement and for which the tax has been paid and 
312.17  additional amounts for accrued interest and advances not subject 
312.18  to tax under section 287.035 or 287.05, subdivision 4.  
312.19     (b) All mortgages that are not multistate mortgages and 
312.20  that are not taxed under paragraph (a) shall be taxed under 
312.21  sections 287.01 to 287.13 as if the real property identified in 
312.22  the mortgage secures payment of the maximum debt amount referred 
312.23  to, or incorporated by reference, in the mortgage. 
312.24     Sec. 14.  Minnesota Statutes 1998, section 289A.31, 
312.25  subdivision 2, is amended to read: 
312.26     Subd. 2.  [JOINT INCOME TAX RETURNS.] (a) If a joint income 
312.27  tax return is made by a husband and wife, the liability for the 
312.28  tax is joint and several.  A spouse who is relieved of qualifies 
312.29  for relief from a liability attributable to a substantial an 
312.30  underpayment under section 6013(e) 6015(b) of the Internal 
312.31  Revenue Code is also relieved of the state income tax liability 
312.32  on the substantial underpayment.  
312.33     (b) In the case of individuals who were a husband and wife 
312.34  prior to the dissolution of their marriage or their legal 
312.35  separation, or prior to the death of one of the individuals, for 
312.36  tax liabilities reported on a joint or combined return, the 
313.1   liability of each person is limited to the proportion of the tax 
313.2   due on the return that equals that person's proportion of the 
313.3   total tax due if the husband and wife filed separate returns for 
313.4   the taxable year.  This provision is effective only when the 
313.5   commissioner receives written notice of the marriage 
313.6   dissolution, legal separation, or death of a spouse from the 
313.7   husband or wife.  No refund may be claimed by an ex-spouse, 
313.8   legally separated or widowed spouse for any taxes paid more than 
313.9   60 days before receipt by the commissioner of the written notice.
313.10     Sec. 15.  Minnesota Statutes 1998, section 289A.40, 
313.11  subdivision 1, is amended to read: 
313.12     Subdivision 1.  [TIME LIMIT; GENERALLY.] Unless otherwise 
313.13  provided in this chapter, a claim for a refund of an overpayment 
313.14  of state tax must be filed within 3-1/2 years from the date 
313.15  prescribed for filing the return, plus any extension of time 
313.16  granted for filing the return, but only if filed within the 
313.17  extended time, or one year from the date of an order assessing 
313.18  tax under section 289A.37, subdivision 1, or an order 
313.19  determining an appeal under section 289A.65, subdivision 8, or 
313.20  one year from the date of a return made by the commissioner 
313.21  under section 289A.35, upon payment in full of the tax, 
313.22  penalties, and interest shown on the order or return made by the 
313.23  commissioner, whichever period expires later.  Claims for 
313.24  refund, except for taxes under chapter 297A, filed after the 
313.25  3-1/2 year period but within the one-year period are limited to 
313.26  the amount of the tax, penalties, and interest on the order or 
313.27  return made by the commissioner and to issues determined by the 
313.28  order or return made by the commissioner. 
313.29     In the case of assessments under section 289A.38, 
313.30  subdivision 5 or 6, claims for refund under chapter 297A filed 
313.31  after the 3-1/2 year period but within the one-year period are 
313.32  limited to the amount of the tax, penalties, and interest on the 
313.33  order or return made by the commissioner that are due for the 
313.34  period before the 3-1/2 year period. 
313.35     Sec. 16.  Minnesota Statutes 1998, section 289A.40, 
313.36  subdivision 1a, is amended to read: 
314.1      Subd. 1a.  [INDIVIDUAL INCOME TAXES; REASONABLE 
314.2   CAUSE SUSPENSION DURING PERIOD OF DISABILITY.] If the 
314.3   taxpayer establishes reasonable cause for failing to timely file 
314.4   the return required by section 289A.08, subdivision 1, files the 
314.5   required return within ten years of the date specified in 
314.6   section 289A.18, subdivision 1, and independently verifies that 
314.7   an overpayment has been made, the commissioner shall grant a 
314.8   refund claimed by the original return, notwithstanding the 
314.9   limitations of subdivision 1 meets the requirements for 
314.10  suspending the running of the time period to file a claim for 
314.11  refund under section 6511(h) of the Internal Revenue Code, the 
314.12  time period in subdivision 1 for the taxpayer to file a claim 
314.13  for an individual income tax refund is suspended. 
314.14     Sec. 17.  Minnesota Statutes 1998, section 289A.50, is 
314.15  amended by adding a subdivision to read: 
314.16     Subd. 1a.  [REFUND FORM.] On or before January 1, 2000, the 
314.17  commissioner of revenue shall prepare and make available to 
314.18  taxpayers a form for filing claims for refund of taxes paid in 
314.19  excess of the amount due.  If the commissioner fails to prepare 
314.20  a form under this subdivision by January 1, 2000, any claims for 
314.21  refund made after January 1, 2000, and up to ten days after the 
314.22  form is made available to taxpayers are deemed to be made in 
314.23  compliance with the requirement of the form. 
314.24     Sec. 18.  Minnesota Statutes 1998, section 289A.50, 
314.25  subdivision 7, is amended to read: 
314.26     Subd. 7.  [REMEDIES.] (a) If the taxpayer is notified by 
314.27  the commissioner that the refund claim is denied in whole or in 
314.28  part, the taxpayer may: 
314.29     (1) file an administrative appeal as provided in section 
314.30  289A.65, or an appeal with the tax court, within 60 days after 
314.31  issuance of the commissioner's notice of denial; or 
314.32     (2) file an action in the district court to recover the 
314.33  refund. 
314.34     (b) An action in the district court on a denied claim for 
314.35  refund must be brought within 18 months of the date of the 
314.36  denial of the claim by the commissioner. 
315.1      (c) No action in the district court or the tax court shall 
315.2   be brought within six months of the filing of the refund claim 
315.3   unless the commissioner denies the claim within that period. 
315.4      (d) If a taxpayer files a claim for refund and the 
315.5   commissioner has not issued a denial of the claim, the taxpayer 
315.6   may bring an action in the district court or the tax court at 
315.7   any time after the expiration of six months of the time the 
315.8   claim was filed, but within four years of the date that the 
315.9   claim was filed. 
315.10     (e) The commissioner and the taxpayer may agree to extend 
315.11  the period for bringing an action in the district court. 
315.12     (f) An action for refund of tax by the taxpayer must be 
315.13  brought in the district court of the district in which lies the 
315.14  county of the taxpayer's residence or principal place of 
315.15  business.  In the case of an estate or trust, the action must be 
315.16  brought at the principal place of its administration.  Any 
315.17  action may be brought in the district court for Ramsey county. 
315.18     Sec. 19.  Minnesota Statutes 1998, section 289A.55, 
315.19  subdivision 9, is amended to read: 
315.20     Subd. 9.  [INTEREST ON PENALTIES.] (a) A penalty imposed 
315.21  under section 289A.60, subdivision 1, 2, 3, 4, 5, or 6, or 21 
315.22  bears interest from the date the return or payment was required 
315.23  to be filed or paid, including any extensions, to the date of 
315.24  payment of the penalty. 
315.25     (b) A penalty not included in paragraph (a) bears interest 
315.26  only if it is not paid within ten days from the date of notice.  
315.27  In that case interest is imposed from the date of notice to the 
315.28  date of payment. 
315.29     Sec. 20.  Minnesota Statutes 1998, section 289A.60, 
315.30  subdivision 3, is amended to read: 
315.31     Subd. 3.  [COMBINED PENALTIES.] When penalties are imposed 
315.32  under subdivisions 1 and 2, except for the minimum penalty under 
315.33  subdivision 2, the penalties imposed under both subdivisions 
315.34  combined must not exceed 38 percent. 
315.35     Sec. 21.  Minnesota Statutes 1998, section 289A.60, 
315.36  subdivision 21, is amended to read: 
316.1      Subd. 21.  [PENALTY FOR FAILURE TO MAKE PAYMENT BY 
316.2   ELECTRONIC FUNDS TRANSFER.] (a) In addition to other applicable 
316.3   penalties imposed by this section, after notification from the 
316.4   commissioner to the taxpayer that payments are required to be 
316.5   made by means of electronic funds transfer under section 
316.6   289A.20, subdivision 2, paragraph (e), or 4, paragraph (d), or 
316.7   289A.26, subdivision 2a, and the payments are remitted by some 
316.8   other means, there is a penalty in the amount of five percent of 
316.9   each payment that should have been remitted electronically.  The 
316.10  penalty can be abated under the abatement procedures prescribed 
316.11  in section 270.07, subdivision 6, if the failure to remit the 
316.12  payment electronically is due to reasonable cause. 
316.13     (b) The penalty under paragraph (a) does not apply if the 
316.14  taxpayer pays by other means the amount due at least three 
316.15  business days before the date the payment is due.  This 
316.16  paragraph does not apply after December 31, 1997.  
316.17     Sec. 22.  Minnesota Statutes 1998, section 297A.15, 
316.18  subdivision 5, is amended to read: 
316.19     Subd. 5.  [REFUND; APPROPRIATION.] Notwithstanding the 
316.20  provisions of sections 297A.02, subdivision 5, and 297A.25, 
316.21  subdivision 42, the tax on sales of capital equipment, and 
316.22  replacement capital equipment, shall be imposed and collected as 
316.23  if the rate under section 297A.02, subdivision 1, applied.  Upon 
316.24  application by the purchaser, on forms prescribed by the 
316.25  commissioner, a refund equal to the reduction in the tax due as 
316.26  a result of the application of the exemption under section 
316.27  297A.25, subdivision 42, and the rate under section 297A.02, 
316.28  subdivision 5, shall be paid to the purchaser.  The application 
316.29  must include sufficient information to permit the commissioner 
316.30  to verify the sales tax paid for the project.  The application 
316.31  shall include information necessary for the commissioner 
316.32  initially to verify that the purchases qualified as capital 
316.33  equipment under section 297A.25, subdivision 42, or replacement 
316.34  capital equipment under section 297A.01, subdivision 20.  No 
316.35  more than two applications for refunds may be filed under this 
316.36  subdivision in a calendar year.  Unless otherwise specifically 
317.1   provided by this subdivision, the provisions of section sections 
317.2   289A.40 and 289A.50 apply to the refunds payable under this 
317.3   subdivision.  There is annually appropriated to the commissioner 
317.4   of revenue the amount required to make the refunds. 
317.5      The amount to be refunded shall bear interest at the rate 
317.6   in section 270.76 from the date the refund claim is filed with 
317.7   the commissioner. 
317.8      Sec. 23.  Minnesota Statutes 1998, section 360.55, is 
317.9   amended by adding a subdivision to read: 
317.10     Subd. 8.  [AGRICULTURAL AIRCRAFT.] Aircraft registered with 
317.11  the Federal Aviation Administration as restricted category 
317.12  aircraft used for agricultural purposes must be listed for 
317.13  taxation and registration upon filing by the owner a sworn 
317.14  affidavit with the commissioner.  The affidavit must state: 
317.15     (1) the name and address of the owner; 
317.16     (2) the name and address of the person from whom purchased; 
317.17     (3) the aircraft's make, year, model number, federal 
317.18  registration number, and manufacturer's identification number; 
317.19  and 
317.20     (4) that the aircraft is owned and operated solely for 
317.21  agricultural operations and purposes. 
317.22  The owner shall file the affidavit and pay an annual fee 
317.23  established under sections 360.511 to 360.67, which must not 
317.24  exceed $500.  Should the aircraft be operated other than for 
317.25  agricultural purposes, the owner shall list the aircraft for 
317.26  taxation and registration under sections 360.511 to 360.67.  If 
317.27  the aircraft is sold, the new owner shall list the aircraft for 
317.28  taxation and registration under this subdivision or under 
317.29  sections 360.511 to 360.67, as applicable. 
317.30     Sec. 24.  Minnesota Statutes 1998, section 414.11, is 
317.31  amended to read: 
317.32     414.11 [MUNICIPAL BOARD SUNSET.] 
317.33     The municipal board shall terminate on December 31 June 1, 
317.34  1999, and all of its authority and duties under this chapter 
317.35  shall be transferred to the office of strategic and long-range 
317.36  planning according to section 15.039, and any money remaining 
318.1   available on that date of the amount appropriated to the 
318.2   municipal board for fiscal year 2000 is transferred and 
318.3   appropriated to the director of the office of strategic and 
318.4   long-range planning to be used for the purposes of this chapter. 
318.5      Sec. 25.  [414.12] [DIRECTOR'S POWERS.] 
318.6      Notwithstanding anything to the contrary in sections 414.01 
318.7   to 414.11, the director of the office of strategic and 
318.8   long-range planning, upon consultation with affected parties and 
318.9   considering the procedures and principles established in 
318.10  sections 414.01 to 414.11, and Laws 1997, chapter 202, article 
318.11  4, sections 1 to 13, may require alternative dispute resolution 
318.12  processes, including those provided in chapter 14, in the 
318.13  execution of the office's duties under this chapter. 
318.14     Sec. 26.  Minnesota Statutes 1998, section 469.169, 
318.15  subdivision 12, is amended to read: 
318.16     Subd. 12.  [ADDITIONAL ZONE ALLOCATIONS.] (a) In addition 
318.17  to tax reductions authorized in subdivisions 7, 8, 9, 10, and 
318.18  11, the commissioner shall allocate tax reductions to border 
318.19  city enterprise zones located on the western border of the state.
318.20  The cumulative total amount of tax reductions for all years of 
318.21  the program under sections 469.1731 to 469.1735, is limited to: 
318.22     (1) for the city of Breckenridge, $394,000; 
318.23     (2) for the city of Dilworth, $118,200; 
318.24     (3) for the city of East Grand Forks, $788,000; 
318.25     (4) for the city of Moorhead, $591,000; and 
318.26     (5) for the city of Ortonville, $78,800. 
318.27     Allocations made under this subdivision may be used for tax 
318.28  reductions provided in section 469.1732 or 469.1734 or for 
318.29  reimbursements under section 469.1735, subdivision 3, but only 
318.30  if the municipality determines that the granting of the tax 
318.31  reduction or offset is necessary to enable a business to expand 
318.32  within a city or to attract a business to a city.  Limitations 
318.33  on allocations under subdivision 7 do not apply to this 
318.34  allocation. 
318.35     (b) The limit in the allocation in paragraph (a) for a 
318.36  municipality may be waived by the commissioner if the 
319.1   commissioner of revenue finds that the municipality must provide 
319.2   an incentive under section 469.1732 or 469.1734 that, by itself 
319.3   or when aggregated with all other tax reductions granted by the 
319.4   municipality under those provisions, exceeds the municipality's 
319.5   maximum allocation under paragraph (a), in order to obtain or 
319.6   retain a business in the city that would not occur in the 
319.7   municipality without the incentive.  The limit may be waived 
319.8   only if the commissioner finds that the business for which the 
319.9   tax incentives are to be provided: 
319.10     (1) requires a private capital investment of at least 
319.11  $1,000,000 within the city; 
319.12     (2) employs at least 25 new or additional full-time 
319.13  equivalent employees within the city; and 
319.14     (3) pays its employees at the location in the city wages 
319.15  that, on the average, will exceed the average wage paid in the 
319.16  county in which the municipality is located. 
319.17     Sec. 27.  Minnesota Statutes 1998, section 469.169, is 
319.18  amended by adding a subdivision to read: 
319.19     Subd. 14.  [ADDITIONAL BORDER CITY ALLOCATIONS.] In 
319.20  addition to tax reductions authorized in subdivisions 7 to 12, 
319.21  the commissioner may allocate $1,500,000 for tax reductions to 
319.22  border city enterprise zones in cities located on the western 
319.23  border of the state.  The commissioner shall make allocations to 
319.24  zones in cities on the western border on a per capita basis.  
319.25  Allocations made under this subdivision may be used for tax 
319.26  reductions as provided in section 469.171, or other offsets of 
319.27  taxes imposed on or remitted by businesses located in the 
319.28  enterprise zone, but only if the municipality determines that 
319.29  the granting of the tax reduction or offset is necessary in 
319.30  order to retain a business within or attract a business to the 
319.31  zone.  Limitations on allocations under subdivision 7, do not 
319.32  apply to this allocation. 
319.33     Sec. 28.  Minnesota Statutes 1998, section 469.1735, is 
319.34  amended by adding a subdivision to read: 
319.35     Subd. 4.  [APPROPRIATION; WAIVERS.] An amount sufficient to 
319.36  fund any tax reductions under a waiver made by the commissioner 
320.1   under section 469.169, subdivision 12, paragraph (b), is 
320.2   appropriated to the commissioner of revenue from the general 
320.3   fund.  This appropriation may not be deducted from the dollar 
320.4   limits under this section or section 469.169 or 469.1734. 
320.5      Sec. 29.  Laws 1997, Second Special Session chapter 2, 
320.6   section 6, is amended to read: 
320.7   Sec. 6.  TRADE AND ECONOMIC
320.8   DEVELOPMENT                                           8,200,000
320.9   Notwithstanding the requirement in 
320.10  Minnesota Statutes, section 469.169, 
320.11  subdivision 11, as added by Laws 1997, 
320.12  chapter 231, article 16, section 20, to 
320.13  base allocations to zones in cities on 
320.14  the state's western border on a per 
320.15  capita basis, $1,200,000 is a one-time 
320.16  appropriation from the general fund to 
320.17  the commissioner of trade and economic 
320.18  development for border city enterprise 
320.19  competitiveness grants under Minnesota 
320.20  Statutes, sections 469.166 to 469.173.  
320.21  Funds shall be allocated to communities 
320.22  with significant business losses that 
320.23  are at risk of losing business tax base 
320.24  due to noncompetitiveness with North 
320.25  Dakota and South Dakota and shall be 
320.26  available to communities for locally 
320.27  administered measures to retain their 
320.28  job base.  Allocations made under this 
320.29  paragraph may be used for tax 
320.30  reductions as provided in Minnesota 
320.31  Statutes, section 469.171, or other 
320.32  offsets of taxes imposed on or remitted 
320.33  by businesses located in the enterprise 
320.34  zone, but only if the municipality 
320.35  determines that the granting of the tax 
320.36  reduction or offset is necessary in 
320.37  order to retain a business within or 
320.38  attract a business to the zone.  
320.39  Limitations on allocations under 
320.40  Minnesota Statutes, section 469.169, 
320.41  subdivision 7, do not apply to this 
320.42  appropriation.  Enterprise zones that 
320.43  receive allocations under this 
320.44  paragraph may continue in effect for 
320.45  purposes of those allocations 
320.46  through December 31, 1998 June 30, 1999.
320.47  $6,000,000 is a one-time appropriation 
320.48  from the general fund to the Minnesota 
320.49  investment fund for grants to local 
320.50  units of government for locally 
320.51  administered operating loan programs 
320.52  for businesses directly and adversely 
320.53  affected by the floods.  Loan criteria 
320.54  and requirements shall be locally 
320.55  established with approval by the 
320.56  department.  For the purposes of this 
320.57  appropriation, Minnesota Statutes, 
320.58  sections 116J.8731, subdivisions 3, 4, 
320.59  5, and 7, and 116J.991, are waived. 
320.60  Businesses that receive grants or loans 
320.61  from this appropriation shall set goals 
320.62  for jobs retained and wages paid within 
320.63  the area designated under Presidential 
321.1   Declaration of Major Disaster, DR-1175. 
321.2   $1,000,000 is a one-time appropriation 
321.3   from the petroleum tank release cleanup 
321.4   fund to the commissioner of trade and 
321.5   economic development.  Notwithstanding 
321.6   Minnesota Statutes, section 115C.08, 
321.7   subdivision 4, as amended by Laws 1997, 
321.8   chapter 200, article 2, section 4, 
321.9   these funds are to be used for grants 
321.10  to buy out property substantially 
321.11  damaged by a petroleum tank release. 
321.12     Sec. 30.  Laws 1999, chapter 112, section 1, subdivision 1, 
321.13  is amended to read: 
321.14     Subdivision 1.  [DEFINITIONS.] (a) The definitions in this 
321.15  subdivision apply to this section. 
321.16     (b) "Acre" means an acre of effective agricultural use land 
321.17  within the state of Minnesota as reported to the farm service 
321.18  agency on form 156EZ for the purposes of this subdivision and 
321.19  subdivisions 2 and 9. 
321.20     (c) "Commissioner" means the commissioner of revenue. 
321.21     (d) "Effective agricultural use land" means the land 
321.22  suitable for growing an agricultural crop and excludes land 
321.23  enrolled in the conservation reserve program established by 
321.24  Minnesota Statutes, section 103F.515, or the water bank program 
321.25  established by Minnesota Statutes, section 103F.601. 
321.26     (e) "Farm" or "farm operation" means an agricultural 
321.27  production operation with a unique farm number as reported on 
321.28  form 156EZ to the farm service agency, which includes at least 
321.29  40 acres of effective agricultural use land.  "Farm" also 
321.30  includes an agricultural production operation, which contains 
321.31  less than 40 acres of effective agriculture use if the farm 
321.32  operator operates another farm qualifying under this paragraph.  
321.33     (f) "Farm operator" means a person who is identified as the 
321.34  operator of a farm on form 156EZ filed with the farm service 
321.35  agency. 
321.36     (g) "Farm service agency" means the United States Farm 
321.37  Service Agency. 
321.38     (h) "Farmer" or "farmer at risk" means a person who 
321.39  produces an agricultural crop or livestock and is reported to 
321.40  the farm service agency as bearing a percentage of the risk for 
322.1   the farm operation. 
322.2      (i) "Livestock" means cattle, hogs, poultry, and sheep. 
322.3      (j) "Livestock production facility" means a farm that has 
322.4   produced at least $10,000 in sales of unprocessed livestock or 
322.5   unprocessed dairy products as reported on schedule F or form 
322.6   1065 or form 1120 or 1120S of the farmer's federal income tax 
322.7   return for either taxable years beginning in calendar year 1997 
322.8   or 1998. 
322.9      (k) "Person" includes individuals, fiduciaries, estates, 
322.10  trusts, partnerships, joint ventures, and corporations. 
322.11     Sec. 31.  Laws 1999, chapter 112, section 1, subdivision 3, 
322.12  is amended to read: 
322.13     Subd. 3.  [LIVESTOCK PRODUCERS.] A farmer person who owns 
322.14  or resides on property homesteaded under section 273.124, 
322.15  subdivision 1, paragraph (c), and operates a livestock 
322.16  production facility on 160 acres or less may elect the 
322.17  agricultural property tax refund under subdivisions 4 to 8 in 
322.18  lieu of the per acre payment under subdivision 2.  To qualify, 
322.19  the farmer person must apply for the refund as provided in 
322.20  subdivisions 4 to 8.  The 40 acre minimum farm size under 
322.21  subdivision 1 does not apply to eligibility under subdivisions 4 
322.22  to 8. 
322.23     Sec. 32.  Laws 1999, chapter 112, section 1, subdivision 4, 
322.24  is amended to read: 
322.25     Subd. 4.  [REFUND.] The refund equals the full amount of 
322.26  the property tax payment due and payable on May 15, 1999, on a 
322.27  livestock production facility that is class 1b agricultural 
322.28  homestead property or class 2a agricultural homestead property 
322.29  as defined in Minnesota Statutes, section 273.13, excluding that 
322.30  portion of the tax attributable to the house, garage, and 
322.31  surrounding acre of land.  If a portion of the property was 
322.32  leased for the agricultural production year, the refund amount 
322.33  shall be prorated so that only the portion of the property which 
322.34  was not leased for the agricultural production year qualifies 
322.35  for the refund reduced by $4 for each acre that was leased for 
322.36  the agricultural production year. 
323.1      Sec. 33.  Laws 1999, chapter 112, section 1, subdivision 9, 
323.2   is amended to read: 
323.3      Subd. 9.  [ALTERNATE QUALIFICATION.] (a) If an agricultural 
323.4   production operation does not meet the definition of a farm 
323.5   under subdivision 1 solely because (1) the farm operator had not 
323.6   filed a form 156EZ with the farm service agency, (2) there was 
323.7   an error in the farm service agency's records, or (3) an 
323.8   operator operates more than one farm and the acres of effective 
323.9   agricultural use land of each a farm is less than 40 acres, but 
323.10  the combined acres of effective agricultural use land of all 
323.11  land operated by that operator is at least 40 acres, the 
323.12  commissioner may allow the farm operator to apply for payment 
323.13  under subdivision 2 after providing such information as the 
323.14  commissioner may require to determine the number of acres that 
323.15  would be comparable to the effective agricultural use land 
323.16  listed on form 156EZ. 
323.17     (b) If the number of acres of effective agricultural use 
323.18  land for crop year 1998 for a farm is greater than indicated in 
323.19  the farm service agency's records, the commissioner may allow a 
323.20  farm operator to apply for payment on the greater acreage after 
323.21  providing such information as the commissioner may require. 
323.22     (c) If a person who produced an agricultural crop or 
323.23  livestock in 1998 and bore a portion of the risk for the farm 
323.24  operation does not meet the definition of a farmer under 
323.25  subdivision 1 solely because that information was not reported 
323.26  to the farm service agency, or because there was an error in the 
323.27  farm service agency's records, the commissioner may allow the 
323.28  farmer to be included on an application for payment under 
323.29  subdivision 2 after the farmer provides such information as the 
323.30  commissioner may require to determine the farmer was at risk for 
323.31  that farm. 
323.32     Sec. 34.  [COST ESTIMATES.] 
323.33     Any waiver granted under Minnesota Statutes, section 
323.34  469.169, subdivision 12, paragraph (b), must be reported within 
323.35  60 days to the commissioner of finance and the chairs of the 
323.36  house and senate tax committees. 
324.1      Sec. 35.  [CITY OF RICHFIELD; AIRPORT IMPACT ZONE; 
324.2   FINANCING.] 
324.3      Subdivision 1.  [DESIGNATION OF AIRPORT IMPACT ZONE.] There 
324.4   is established within the city of Richfield an airport impact 
324.5   zone consisting of the real property described as follows: 
324.6   commencing at the intersection of the north city limits with the 
324.7   w'ly ROW line of trunk highway 77, thence south along the w'ly 
324.8   ROW line of trunk highway 77 to the n'ly ROW line of interstate 
324.9   highway 494, thence west along the n'ly ROW line of interstate 
324.10  highway 494 to the center line of Bloomington Avenue, thence 
324.11  north on the center line of Bloomington Avenue to the n'ly ROW 
324.12  line of East 77th Street to a point 133.2 feet east of the e'ly 
324.13  ROW line of Bloomington Avenue, thence north on a line parallel 
324.14  with and 133.2 feet east of the e'ly ROW line of Bloomington 
324.15  Avenue to the north city limits, thence east along the north 
324.16  city limits to the point of beginning. 
324.17     Subd. 2.  [AIRPORT IMPACTS DEFINED.] The legislature finds 
324.18  that: 
324.19     (1) the area included within the airport impact zone 
324.20  defined under this section will experience significant and 
324.21  unique adverse environmental and socioeconomic impacts directly 
324.22  associated with the operation of the Minneapolis-St. Paul 
324.23  International Airport; 
324.24     (2) whether funded directly by the metropolitan airports 
324.25  commission or by other means, expenditures for mitigation of 
324.26  those airport-created impacts involve an aspect of the airport's 
324.27  capital and operating expenses and will be made for airport 
324.28  purposes; 
324.29     (3) appropriate measures to mitigate those adverse impacts 
324.30  include but are not limited to housing replacement activities; 
324.31  and 
324.32     (4) the state legislature has authorized the expansion of 
324.33  the Minneapolis-St. Paul International Airport in order to 
324.34  accommodate the future economic growth of the state.  The 
324.35  environmental quality board has adopted findings that identify 
324.36  the need to make land uses in the area identified in subdivision 
325.1   1 compatible with airport uses. 
325.2      Subd. 3.  [METROPOLITAN AIRPORTS COMMISSION BONDS; 
325.3   SECURITY.] The metropolitan airports commission shall issue and 
325.4   sell its obligations in an aggregate principal amount not to 
325.5   exceed $30,000,000, after deducting costs of issuance, discount, 
325.6   and capitalized interest.  The metropolitan airports commission 
325.7   shall, not later than January 30, 2000, transfer $30,000,000 to 
325.8   the city of Richfield to be used to finance the costs of land 
325.9   and structure acquisition, demolition, relocation and site 
325.10  clearance, and public improvements within the airport impact tax 
325.11  zone established under subdivision 1, including, without 
325.12  limitation, the following housing replacement activities 
325.13  anywhere within the city:  rehabilitation, acquisition, 
325.14  demolition, relocation assistance, and relocation of existing 
325.15  single-family or multifamily housing, and financing of new or 
325.16  existing single-family or multifamily housing that replaces 
325.17  housing units eliminated by redevelopment within the airport 
325.18  impact zone. 
325.19     Subd. 4.  [TERMS.] The obligations must be secured by the 
325.20  revenues and pledges from the metropolitan airports commission 
325.21  in accordance with subdivision 5, and must be issued in 
325.22  accordance with chapter 475, provided that no election is 
325.23  required, net debt limits do not apply, and the obligations must 
325.24  mature no later than 35 years from the date of issue of the 
325.25  original obligations.  The metropolitan airports commission may 
325.26  issue obligations to refund any obligations issued under this 
325.27  section, the principal amount of which shall not be included in 
325.28  computing the limits on amount of obligations issuable by the 
325.29  commission under this section. 
325.30     Subd. 5.  [SECURITY; METROPOLITAN AIRPORTS COMMISSION 
325.31  PAYMENTS.] (a) Notwithstanding anything to the contrary in 
325.32  Minnesota Statutes, sections 473.601 to 473.679, on or before 
325.33  the due date of each principal and interest payment on 
325.34  obligations issued under this section, the treasurer of the 
325.35  metropolitan airports commission shall remit from any available 
325.36  funds to the trustee or paying agent for the obligations an 
326.1   amount sufficient for the payment, without further order from 
326.2   the commission.  The metropolitan airports commission shall be 
326.3   obligated to the holders of obligations issued under this 
326.4   section, to establish, revise from time to time, and collect 
326.5   landing fees according to schedules such as to produce revenues, 
326.6   together with other revenues not restricted by law or regulation 
326.7   available to the metropolitan airport commission, at all times 
326.8   sufficient to pay 105 percent of principal and interest on all 
326.9   obligations issued under this section. 
326.10     (b) Notwithstanding anything to the contrary in Minnesota 
326.11  Statutes, sections 473.601 to 473.679, any obligations issued 
326.12  under this section shall be further secured by the pledge of the 
326.13  full faith and credit of the metropolitan airports commission, 
326.14  which shall be obligated to levy upon all taxable property 
326.15  within the metropolitan area a tax at the times and in the 
326.16  amounts, if any, as may be required to provide funds sufficient 
326.17  to pay all the obligations and interest thereon in the event 
326.18  revenues pledged under paragraph (a), are insufficient for that 
326.19  purpose.  This tax, if ever required to be levied, shall not be 
326.20  subject to any limitation of rate or amount. 
326.21     (c) The pledges described in this section shall be made by 
326.22  resolution of the metropolitan airports commission.  The 
326.23  security afforded by this section extends equally and ratably to 
326.24  all bonds issued under this section and all bonds issued by the 
326.25  metropolitan airports commission secured by similar pledges. 
326.26     Subd. 6.  [OBLIGATION DEFINED.] In subdivisions 1 to 5, 
326.27  "obligation" has the meaning given in Minnesota Statutes, 
326.28  section 475.51, subdivision 3.  The term includes obligations 
326.29  issued to refund prior obligations issued under this section. 
326.30     Subd. 7.  [COMPLIANCE WITH FEDERAL LAW; NO ADDITIONAL 
326.31  COMMITMENTS.] (a) Nothing in this section shall require the 
326.32  metropolitan airports commission to violate federal law or 
326.33  regulation, including the Federal Aviation Administration 
326.34  revenue diversion policy. 
326.35     (b) If this section violates federal law or regulations, 
326.36  including the Federal Aviation Administration revenue diversion 
327.1   policy, the requirements imposed upon the metropolitan airports 
327.2   commission under this section are terminated and shall not 
327.3   become commitments of the state. 
327.4      Subd. 8.  [RELATIONSHIP TO REQUIREMENTS UNDER 
327.5   AGREEMENT.] The requirements imposed upon the metropolitan 
327.6   airports commission under this section are in addition to any 
327.7   requirements imposed upon the commission under the 
327.8   Richfield-metropolitan airports commission noise mitigation 
327.9   agreement dated December 18, 1998. 
327.10     Sec. 36.  [EXTENSIONS FOR OPERATION ALLIED FORCE SERVICE 
327.11  MEMBERS.] 
327.12     The limitations of time provided by Minnesota Statutes, 
327.13  chapter 289A relating to administration of taxes, chapter 290 
327.14  relating to income taxes, chapter 271 relating to the tax court 
327.15  for filing returns, paying taxes, claiming refunds, commencing 
327.16  action thereon, appealing to the tax court from orders relating 
327.17  to income taxes, and the filing of petitions under chapter 278, 
327.18  and appealing to the Supreme Court from decisions of the tax 
327.19  court relating to income taxes are extended, as provided in the 
327.20  special rule for section 7508 of the Internal Revenue Code in 
327.21  section 1, paragraph (c), of Public Law Number 106-21. 
327.22     Sec. 37.  [TRANSFER.] 
327.23     The commissioner of finance shall transfer $2,000,000 from 
327.24  the conservation fund under Minnesota Statutes, section 40A.151, 
327.25  to the general fund on July 1, 1999. 
327.26     Sec. 38.  [APPROPRIATION.] 
327.27     $143,000 is appropriated to the commissioner of revenue 
327.28  from the general fund for the cost of administering this act.  
327.29  This appropriation is for fiscal year 2000 and any unspent 
327.30  amount may be carried over to fiscal year 2001.  This is a 
327.31  one-time appropriation and not part of the budget base for the 
327.32  department. 
327.33     Sec. 39.  [REPEALER.] 
327.34     Minnesota Statutes 1998, sections 297E.12, subdivision 3; 
327.35  297F.19, subdivision 4; and 297G.18, subdivision 4, are repealed.
327.36     Sec. 40.  [EFFECTIVE DATES.] 
328.1      Sections 4, 21, 22, 25, and 29 to 34 are effective the day 
328.2   following final enactment.  
328.3      Section 5 is effective for checks received on or after the 
328.4   day following final enactment.  
328.5      Section 6 is effective the day following final enactment, 
328.6   and applies to offers-in-compromise submitted after June 30, 
328.7   1999. 
328.8      Sections 7 and 19 are effective for payments due on or 
328.9   after the day following final enactment. 
328.10     Sections 8, 9, and 10 are effective for claims for setoff 
328.11  submitted to the commissioner of revenue by claimant agencies 
328.12  after June 30, 1999. 
328.13     Sections 11 to 13 are effective for documents executed, 
328.14  recorded, or registered after June 30, 1999. 
328.15     Section 14, paragraph (a), is effective at the same time 
328.16  that section 6015(b) of the Internal Revenue Code is effective 
328.17  for federal tax purposes.  Section 14, paragraph (b), is 
328.18  effective for claims for innocent spouse relief, requests for 
328.19  allocation of joint income tax liability, and taxes filed or 
328.20  paid on or after the day following final enactment. 
328.21     Section 15 is effective for orders issued on or after the 
328.22  day following final enactment. 
328.23     Section 16 is effective for disabilities existing on or 
328.24  after the date of enactment for which claims for refund have not 
328.25  expired under the time limit in Minnesota Statutes, section 
328.26  289A.40, subdivision 1.  Claims based upon reasonable cause must 
328.27  be filed prior to the expiration of the repealed ten-year period 
328.28  or within one year after the date of enactment, whichever is 
328.29  earlier. 
328.30     Section 18 is effective for refund claims filed on or after 
328.31  the day following final enactment. 
328.32     Section 20 is effective for tax years ending on or after 
328.33  the day following final enactment.  
328.34     Section 23 is effective for aircraft registered after June 
328.35  30, 1999. 
328.36     Section 24 is effective June 1, 1999. 
329.1      Section 36 is effective at the same time section 1, 
329.2   paragraph (c), of Public Law Number 106-21 becomes effective.