Office of the Revisor of Statutes
SF 2657
1st Engrossment - 81st Legislature (1999 - 2000)
Posted on 12/15/2009 12:00 a.m.
KEY: stricken = removed, old language.
underscored = added, new language.
1.1 A bill for an act 1.2 relating to financing of government in this state; 1.3 providing for payment of sales tax rebates and 1.4 assistance to farmers; providing an income tax 1.5 deduction or credit for dependents; modifying the 1.6 treatment of certain types of income; modifying tax 1.7 administration provisions; authorizing the city of 1.8 Luverne to provide certain tax incentives; conforming 1.9 with federal income tax changes; reducing the rate of 1.10 the motor vehicle registration tax; exempting certain 1.11 sales from taxation; restricting local taxes on motor 1.12 vehicles; altering the imposition of the tax on 1.13 insurance premiums; modifying the provider tax; 1.14 reducing the rates of taxes on gambling; providing for 1.15 administration of the tax on cigarettes; prohibiting 1.16 distribution of certain types of cigarettes; providing 1.17 for property tax homestead treatment; providing for 1.18 certain property tax exemptions, credits, assessments, 1.19 appeals, notices, and refunds; reducing certain 1.20 property tax class rates; changing and providing for 1.21 certain payments in lieu of taxes; changing provisions 1.22 relating to tax increment financing, housing 1.23 improvement areas, county housing authorities, and 1.24 corporations created by political subdivisions; 1.25 authorizing election by local governments to provide 1.26 truth in taxation information on the Internet; 1.27 extending senior citizen property tax deferral to 1.28 certain taxes, special assessments, penalties, and 1.29 interest; providing for certain special assessments by 1.30 counties; modifying or increasing certain aids to 1.31 local governments; providing special authority to 1.32 certain political subdivisions; changing certain 1.33 forfeiture provision relating to plats; authorizing 1.34 issuance of certain obligations; providing for 1.35 studies; appropriating money; amending Minnesota 1.36 Statutes 1998, sections 16A.46; 60A.15, subdivision 1; 1.37 97A.061, by adding subdivisions; 168.013, subdivision 1.38 1a; 238.08, subdivision 3; 270.063, by adding a 1.39 subdivision; 270A.03, subdivision 2; 272.115, 1.40 subdivision 1; 273.124, by adding a subdivision; 1.41 273.1398, subdivision 4; 273.37, subdivision 3; 1.42 275.065, subdivisions 3, 8, and by adding 1.43 subdivisions; 275.066; 276.19, subdivision 1; 289A.08, 1.44 by adding a subdivision; 289A.35; 289A.60, subdivision 1.45 1; 290.01, by adding a subdivision; 290.17, 1.46 subdivision 2; 290B.04, by adding a subdivision; 2.1 290B.05, subdivision 3; 290B.07; 290B.08, subdivisions 2.2 1 and 2; 290B.09, subdivision 2; 295.50, subdivision 2.3 9b; 297A.01, subdivisions 3 and 15; 297A.15, by adding 2.4 a subdivision; 297A.25, subdivisions 5, 7, 65, and by 2.5 adding subdivisions; 297F.01, subdivision 17; 297F.08, 2.6 subdivisions 2, 4, 5, 8, and 9; 297F.21, subdivisions 2.7 1 and 3; 428A.11, by adding subdivisions; 428A.13, 2.8 subdivisions 1 and 3; 428A.14, subdivision 1; 428A.15; 2.9 428A.16; 428A.17; 428A.19; 428A.21; 429.011, 2.10 subdivisions 2a and 5; 429.021, subdivision 1; 2.11 429.031, subdivision 1; 469.003, subdivision 5; 2.12 469.006, subdivisions 1 and 2; 469.011, subdivision 4; 2.13 469.040, by adding a subdivision; 469.174, subdivision 2.14 10; 469.175, subdivisions 1a, 5, and 6; 469.176, 2.15 subdivision 1b; 469.1763, by adding a subdivision; 2.16 473.39, by adding a subdivision; 477A.011, by adding a 2.17 subdivision; 477A.0121, subdivision 4, and by adding a 2.18 subdivision; 477A.03, by adding a subdivision; 2.19 477A.06, subdivisions 2 and 3; 477A.11, subdivision 1; 2.20 477A.12; 477A.13; 477A.14; Minnesota Statutes 1999 2.21 Supplement, sections 16D.09, subdivision 2; 123B.54; 2.22 270.65; 272.02, subdivision 39, and by adding a 2.23 subdivision; 273.124, subdivisions 1 and 14; 273.13, 2.24 subdivisions 24 and 25; 273.1382, subdivision 1b; 2.25 273.1398, subdivisions 1a and 4a; 275.065, subdivision 2.26 5a; 275.71, subdivision 4; 289A.02, subdivision 7; 2.27 290.01, subdivisions 19, 19b, and 31; 290.091, 2.28 subdivision 2; 290A.03, subdivision 15; 290B.03, 2.29 subdivision 1; 290B.05, subdivision 1; 291.005, 2.30 subdivision 1; 295.53, subdivision 1; 297A.25, 2.31 subdivisions 9 and 11; 297E.02, subdivisions 1, 4, and 2.32 6; 297F.08, subdivision 8a; 383D.74; 473.39, 2.33 subdivision 1g; 477A.011, subdivision 36; 477A.03, 2.34 subdivision 2; 477A.06, subdivision 1; 505.08, 2.35 subdivision 3; Laws 1995, chapter 264, article 2, 2.36 section 44, as amended; Laws 1995, First Special 2.37 Session chapter 3, article 15, section 25; Laws 1999, 2.38 chapters 112, sections 1, subdivisions 2 and 7; and 2; 2.39 and 243, article 1, section 2; proposing coding for 2.40 new law in Minnesota Statutes, chapters 273; 278; 290; 2.41 297F; 465; and 477A; repealing Minnesota Statutes 2.42 1998, sections 297A.15, subdivision 7; 465.715, 2.43 subdivisions 1, 2, and 3; and 469.175, subdivision 6a; 2.44 Minnesota Statutes 1999 Supplement, section 465.715, 2.45 subdivision 1a; Minnesota Rules, part 8160.0300, 2.46 subpart 4. 2.47 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 2.48 ARTICLE 1 2.49 2000 SALES TAX REBATE 2.50 Section 1. [STATEMENT OF PURPOSE.] 2.51 (a) The state of Minnesota derives revenues from a variety 2.52 of taxes, fees, and other sources, including the state sales tax. 2.53 (b) It is fair and reasonable to refund the existing state 2.54 budget surplus in the form of a rebate of nonbusiness consumer 2.55 sales taxes paid by individuals in calendar year 1998. 2.56 (c) Information concerning the amount of sales tax paid at 2.57 various income levels is contained in the Minnesota tax 2.58 incidence report, which is written by the commissioner of 3.1 revenue and presented to the legislature according to Minnesota 3.2 Statutes, section 270.0682. 3.3 (d) It is fair and reasonable to use information contained 3.4 in the Minnesota tax incidence report to determine the 3.5 proportionate share of the sales tax rebate due each eligible 3.6 taxpayer since no effective or practical mechanism exists for 3.7 determining the amount of actual sales tax paid by each eligible 3.8 individual. 3.9 Sec. 2. [SALES TAX REBATE.] 3.10 (a) An individual who: 3.11 (1) was eligible for a credit under Laws 1998, chapter 389, 3.12 article 1, section 1, and who filed for or received that credit 3.13 on or before November 30, 2000; or 3.14 (2) was a resident of Minnesota for any part of 1998, and 3.15 filed a 1998 Minnesota income tax return on or before November 3.16 30, 2000, and had a tax liability before refundable credits on 3.17 that return of at least $1 but did not file the claim for credit 3.18 authorized under Laws 1998, chapter 389, article 1, section 1, 3.19 and who was not allowed to be claimed as a dependent on a 1998 3.20 federal income tax return filed by another person; or 3.21 (3) had the property taxes payable on his or her homestead 3.22 abated to zero under Laws 1998, chapter 383, section 20, 3.23 shall receive a sales tax rebate. 3.24 (b) The sales tax rebate for taxpayers who qualify under 3.25 paragraph (a) as married filing joint or head of household must 3.26 be computed according to the following schedule: 3.27 Income Sales Tax Rebate 3.28 less than $2,500 $ 91 3.29 at least $2,500 but less than $5,000 $ 118 3.30 at least $5,000 but less than $10,000 $ 126 3.31 at least $10,000 but less than $15,000 $ 138 3.32 at least $15,000 but less than $20,000 $ 150 3.33 at least $20,000 but less than $25,000 $ 163 3.34 at least $25,000 but less than $30,000 $ 170 3.35 at least $30,000 but less than $35,000 $ 184 3.36 at least $35,000 but less than $40,000 $ 201 4.1 at least $40,000 but less than $45,000 $ 216 4.2 at least $45,000 but less than $50,000 $ 227 4.3 at least $50,000 but less than $60,000 $ 242 4.4 at least $60,000 but less than $70,000 $ 259 4.5 at least $70,000 but less than $80,000 $ 285 4.6 at least $80,000 but less than $90,000 $ 306 4.7 at least $90,000 but less than $100,000 $ 338 4.8 at least $100,000 but less than $120,000 $ 366 4.9 at least $120,000 but less than $140,000 $ 401 4.10 at least $140,000 but less than $160,000 $ 433 4.11 at least $160,000 but less than $180,000 $ 464 4.12 at least $180,000 but less than $200,000 $ 493 4.13 at least $200,000 but less than $400,000 $ 630 4.14 at least $400,000 but less than $600,000 $ 829 4.15 at least $600,000 but less than $800,000 $ 995 4.16 at least $800,000 but less than $1,000,000 $1,140 4.17 $1,000,000 and over $1,500 4.18 (c) The sales tax rebate for individuals who qualify under 4.19 paragraph (a) as single or married filing separately must be 4.20 computed according to the following schedule: 4.21 Income Sales Tax Rebate 4.22 less than $2,500 $ 52 4.23 at least $2,500 but less than $5,000 $ 63 4.24 at least $5,000 but less than $10,000 $ 74 4.25 at least $10,000 but less than $15,000 $ 100 4.26 at least $15,000 but less than $20,000 $ 114 4.27 at least $20,000 but less than $25,000 $ 124 4.28 at least $25,000 but less than $30,000 $ 129 4.29 at least $30,000 but less than $40,000 $ 141 4.30 at least $40,000 but less than $50,000 $ 158 4.31 at least $50,000 but less than $70,000 $ 186 4.32 at least $70,000 but less than $100,000 $ 237 4.33 at least $100,000 but less than $140,000 $ 285 4.34 at least $140,000 but less than $200,000 $ 344 4.35 at least $200,000 but less than $400,000 $ 467 4.36 at least $400,000 but less than $600,000 $ 614 5.1 $600,000 and over $ 875 5.2 (d) Individuals who: 5.3 (1) were residents of Minnesota in 1998; 5.4 (2) attained the age of 18 on or before December 31, 1998; 5.5 (3) had at least $500 of qualifying income in 1998; and 5.6 (4) do not otherwise qualify for a rebate either 5.7 individually or as the spouse of an individual who receives a 5.8 rebate on the basis of a married joint filing status, 5.9 qualify for a rebate under this paragraph only. If required to 5.10 do so by the commissioner, claimants under this paragraph must 5.11 file a claim for a rebate on a form prescribed by the 5.12 commissioner before the later of June 15, 2001, or 30 days after 5.13 the date of enactment of this act. The commissioner shall 5.14 verify the information provided and rebate the minimum amount 5.15 for which the claimant would have been eligible as determined 5.16 under paragraph (b), as adjusted by paragraph (p), if the 5.17 taxpayer would have met the requirements to file a 1998 federal 5.18 income tax return as a married taxpayer filing jointly or head 5.19 of household, or as determined under paragraph (c), as adjusted 5.20 by paragraph (p), for other taxpayers. Qualified claims for 5.21 rebate under this paragraph not paid by October 1, 2001, bear 5.22 interest at the rate specified in Minnesota Statutes, section 5.23 270.75. As used in this paragraph only, "qualifying income" 5.24 means the sum of: 5.25 (1) self-employment income subject to the tax under section 5.26 1401(b) of the Internal Revenue Code of 1986, as amended through 5.27 December 31, 1997; plus 5.28 (2) wages subject to tax under section 3101(b) of the 5.29 Internal Revenue Code of 1986, as amended through December 31, 5.30 1997; plus 5.31 (3) amounts described in Minnesota Statutes, section 5.32 290A.03, subdivision 3, paragraph (b), clauses (iv), (v), (vi), 5.33 (vii), (viii), (ix), (x), and (xii). 5.34 As used in this paragraph, "qualifying income" does not 5.35 include any compensation paid to inmates at a state, local, 5.36 federal, or privately operated correctional facility as pay for 6.1 services performed by the inmate at the facility. 6.2 If the Social Security Administration or Railroad 6.3 Retirement Board is paying benefits to a recipient by electronic 6.4 funds transfers in 2000, the rebate under this paragraph must be 6.5 paid by the commissioner through electronic funds transfer to 6.6 the same financial institution and into the same account into 6.7 which the Social Security Administration or Railroad Retirement 6.8 Board transfers social security benefits in calendar year 2000. 6.9 (e) Individuals who were not residents of Minnesota for any 6.10 part of 1998 and who paid more than $10 in Minnesota sales tax 6.11 under Minnesota Statutes, chapters 297A and 297B, on nonbusiness 6.12 consumer purchases in that year qualify for a rebate under this 6.13 paragraph only. Qualifying nonresidents must file a claim for 6.14 rebate on a form prescribed by the commissioner before November 6.15 30, 2000. The claim must include receipts showing the Minnesota 6.16 sales tax paid and the date of the sale. Taxes paid on 6.17 purchases allowed in the computation of federal taxable income 6.18 or reimbursed by an employer are not eligible for the rebate. 6.19 The commissioner shall determine the qualifying taxes paid and 6.20 rebate the lesser of: 6.21 (1) 16.18 percent of that amount; or 6.22 (2) the maximum amount for which the claimant would have 6.23 been eligible as determined under paragraph (b) if the taxpayer 6.24 filed the 1998 federal income tax return as a married taxpayer 6.25 filing jointly or head of household, or as determined under 6.26 paragraph (c) for other taxpayers. 6.27 (f) "Income," for purposes of this section other than 6.28 paragraph (e), is taxable income as defined in section 63 of the 6.29 Internal Revenue Code of 1986, as amended through December 31, 6.30 1997, plus the sum of any additions to federal taxable income 6.31 for the taxpayer under Minnesota Statutes, section 290.01, 6.32 subdivision 19a, and reported on the original 1998 income tax 6.33 return including subsequent adjustments to that return made 6.34 within the time limits specified in paragraph (i). For an 6.35 individual who was a resident of Minnesota for less than the 6.36 entire year, income as determined under this paragraph must be 7.1 multiplied by the percentage determined pursuant to Minnesota 7.2 Statutes, section 290.06, subdivision 2c, paragraph (e), as 7.3 calculated on the original 1998 income tax return including 7.4 subsequent adjustments to that return made within the time 7.5 limits specified in paragraph (i). For purposes of paragraph 7.6 (e), "income" is taxable income as defined in section 63 of the 7.7 Internal Revenue Code of 1986, as amended through December 31, 7.8 1997, and reported on the taxpayer's original federal tax return 7.9 for the first taxable year beginning after December 31, 1997. 7.10 (g) For a fiscal year taxpayer, the November 30, 2000, 7.11 dates in paragraphs (a) through (e) are extended one month for 7.12 each month in calendar year 1998 that occurred prior to the 7.13 start of the individual's 1998 fiscal tax year. 7.14 (h) Sales tax rebates not paid by April 1, 2001, bear 7.15 interest at the rate specified in Minnesota Statutes, section 7.16 270.75. 7.17 (i) A sales tax rebate shall not be adjusted based on 7.18 changes to a 1998 income tax return that are made by order of 7.19 assessment after June 15, 2000, or made by the taxpayer by 7.20 amended return that are filed with the commissioner of revenue 7.21 after June 15, 2000. 7.22 (j) Individuals who filed a joint income tax return for 7.23 1998 shall receive a joint sales tax rebate. After the sales 7.24 tax rebate has been issued, but before the check has been 7.25 cashed, either joint claimant may request a separate check for 7.26 one-half of the joint sales tax rebate. Notwithstanding 7.27 anything in this section to the contrary, if, prior to payment, 7.28 the commissioner has been notified that persons who filed a 7.29 joint 1998 income tax return are living at separate addresses, 7.30 as indicated on their 1999 income tax return or otherwise, the 7.31 commissioner may issue separate checks to each person. The 7.32 amount payable to each person is one-half of the total joint 7.33 rebate. 7.34 If a rebate is received by the estate of a deceased 7.35 individual after the probate estate has been closed, and if the 7.36 original rebate check is returned to the commissioner with a 8.1 copy of the decree of descent or final account of the estate, 8.2 social security numbers, and addresses of the beneficiaries, the 8.3 commissioner may issue separate checks in proportion to their 8.4 share in the residuary estate in the names of the residuary 8.5 beneficiaries of the estate. 8.6 (k) The sales tax rebate is a "Minnesota tax law" for 8.7 purposes of Minnesota Statutes, section 270B.01, subdivision 8. 8.8 (l) The sales tax rebate is "an overpayment of any tax 8.9 collected by the commissioner" for purposes of Minnesota 8.10 Statutes, section 270.07, subdivision 5. For purposes of this 8.11 paragraph, a joint sales tax rebate is payable to each spouse 8.12 equally. 8.13 (m) If the commissioner of revenue cannot locate an 8.14 individual entitled to a sales tax rebate by July 1, 2002, or if 8.15 an individual to whom a sales tax rebate was issued has not 8.16 cashed the check by July 1, 2002, the right to the sales tax 8.17 rebate lapses and the check must be deposited in the general 8.18 fund. 8.19 (n) Individuals entitled to a sales tax rebate pursuant to 8.20 paragraph (a), but who did not receive one, and individuals who 8.21 receive a sales tax rebate that was not correctly computed, must 8.22 file a claim with the commissioner before July 1, 2001, in a 8.23 form prescribed by the commissioner. These claims must be 8.24 treated as if they are a claim for refund under Minnesota 8.25 Statutes, section 289A.50, subdivisions 4 and 7. 8.26 (o) The sales tax rebate is a refund subject to revenue 8.27 recapture under Minnesota Statutes, chapter 270A. The 8.28 commissioner of revenue shall remit the entire refund to the 8.29 claimant agency, which shall, upon the request of the spouse who 8.30 does not owe the debt, refund one-half of the joint sales tax 8.31 rebate to the spouse who does not owe the debt. 8.32 (p) Before payment, the rebates calculated in paragraphs 8.33 (b), (c), (d), and (e) must be proportionately reduced to 8.34 account for 1998 income tax returns that are filed on or after 8.35 January 1, 2000, but before July 1, 2000, so that the amount of 8.36 sales tax rebates payable under paragraphs (b), (c), (d), and 9.1 (e) does not exceed $453,000,000, less the amount of the rebates 9.2 paid under article 2. 9.3 The adjustments under this paragraph are not rules subject to 9.4 Minnesota Statutes, chapter 14. 9.5 (q) The rebate is a reduction of fiscal year 2000 sales tax 9.6 revenues. The amount necessary to make the sales tax rebates 9.7 and interest provided in this section is appropriated from the 9.8 general fund to the commissioner of revenue in fiscal year 2000 9.9 and is available until June 30, 2002. 9.10 (r) If a sales tax rebate check is cashed by someone other 9.11 than the payee or payees of the check, and the commissioner of 9.12 revenue determines that the check has been forged or improperly 9.13 endorsed, or the commissioner determines that a rebate was 9.14 erroneously issued or overstated, the commissioner may issue an 9.15 order of assessment for the amount of the check or the amount 9.16 the check is overstated against the person or persons cashing 9.17 it. The assessment must be made within two years after the 9.18 check is cashed, but if cashing the check constitutes theft 9.19 under Minnesota Statutes, section 609.52, or forgery under 9.20 Minnesota Statutes, section 609.631, the assessment can be made 9.21 at any time. The assessment may be appealed administratively 9.22 and judicially. The commissioner may take action to collect the 9.23 assessment in the same manner as provided by Minnesota Statutes, 9.24 chapter 289A, for any other order of the commissioner assessing 9.25 tax. 9.26 (s) Notwithstanding Minnesota Statutes, sections 9.031, 9.27 16A.40, 16B.49, 16B.50, and any other law to the contrary, the 9.28 commissioner of revenue may take whatever actions the 9.29 commissioner deems necessary to pay the rebates required by this 9.30 section, and may, in consultation with the commissioner of 9.31 finance and the state treasurer, contract with a private vendor 9.32 or vendors to process, print, and mail the rebate checks or 9.33 warrants required under this section and receive and disburse 9.34 state funds to pay those checks or warrants. 9.35 (t) The commissioner may pay rebates required by this 9.36 section by electronic funds transfer to individuals who 10.1 requested that their 1999 individual income tax refund be paid 10.2 through electronic funds transfer. The commissioner may make 10.3 the electronic funds transfer payments to the same financial 10.4 institution and into the same account as the 1999 individual 10.5 income tax refund. 10.6 (u) For purposes of this section, "resident" has the 10.7 meaning given in Minnesota Statutes, section 290.01, subdivision 10.8 7. 10.9 Sec. 3. [APPROPRIATION.] 10.10 $4,000,000 is appropriated from the general fund to the 10.11 commissioner of revenue to be used to pay the costs of 10.12 administering section 2 and articles 2 and 3. 10.13 EFFECTIVE DATE: Sections 1 and 2 are effective the day 10.14 following final enactment. 10.15 ARTICLE 2 10.16 1999 SALES TAX REBATE 10.17 Section 1. Laws 1999, chapter 243, article 1, section 2, 10.18 is amended to read: 10.19 Sec. 2. [SALES TAX REBATE.] 10.20 (a) An individual who: 10.21 (1) was eligible for a credit under Laws 1997, chapter 231, 10.22 article 1, section 16, as amended by Laws 1997, First Special 10.23 Session chapter 5, section 35, and Laws 1997, Third Special 10.24 Session chapter 3, section 11, and Laws 1998, chapter 304, and 10.25 Laws 1998, chapter 389, article 1, section 3, and who filed for 10.26 or received that credit on or before June 15,19992000; or 10.27 (2) was a resident of Minnesota for any part of 1997, and 10.28 filed a 1997 Minnesota income tax return on or before June 15, 10.2919992000, and had a tax liability before refundable credits on 10.30 that return of at least $1 but did not file the claim for credit 10.31 authorized under Laws 1997, chapter 231, article 1, section 16, 10.32 as amended, and who was not allowed to be claimed as a dependent 10.33 on a 1997 federal income tax return filed by another person; or 10.34 (3) had the property taxes payable on his or her homestead 10.35 abated to zero under Laws 1997, chapter 231, article 2, section 10.36 64, 11.1 shall receive a sales tax rebate. 11.2 (b) The sales tax rebate for taxpayers who qualify under 11.3 paragraph (a) as married filing joint or head of household must 11.4 be computed according to the following schedule: 11.5 Income Sales Tax Rebate 11.6 less than $2,500 $ 358 11.7 at least $2,500 but less than $5,000 $ 469 11.8 at least $5,000 but less than $10,000 $ 502 11.9 at least $10,000 but less than $15,000 $ 549 11.10 at least $15,000 but less than $20,000 $ 604 11.11 at least $20,000 but less than $25,000 $ 641 11.12 at least $25,000 but less than $30,000 $ 690 11.13 at least $30,000 but less than $35,000 $ 762 11.14 at least $35,000 but less than $40,000 $ 820 11.15 at least $40,000 but less than $45,000 $ 874 11.16 at least $45,000 but less than $50,000 $ 921 11.17 at least $50,000 but less than $60,000 $ 969 11.18 at least $60,000 but less than $70,000 $1,071 11.19 at least $70,000 but less than $80,000 $1,162 11.20 at least $80,000 but less than $90,000 $1,276 11.21 at least $90,000 but less than $100,000 $1,417 11.22 at least $100,000 but less than $120,000 $1,535 11.23 at least $120,000 but less than $140,000 $1,682 11.24 at least $140,000 but less than $160,000 $1,818 11.25 at least $160,000 but less than $180,000 $1,946 11.26 at least $180,000 but less than $200,000 $2,067 11.27 at least $200,000 but less than $400,000 $2,644 11.28 at least $400,000 but less than $600,000 $3,479 11.29 at least $600,000 but less than $800,000 $4,175 11.30 at least $800,000 but less than $1,000,000 $4,785 11.31 $1,000,000 and over $5,000 11.32 (c) The sales tax rebate for individuals who qualify under 11.33 paragraph (a) as single or married filing separately must be 11.34 computed according to the following schedule: 11.35 Income Sales Tax Rebate 11.36 less than $2,500 $ 204 12.1 at least $2,500 but less than $5,000 $ 249 12.2 at least $5,000 but less than $10,000 $ 299 12.3 at least $10,000 but less than $15,000 $ 408 12.4 at least $15,000 but less than $20,000 $ 464 12.5 at least $20,000 but less than $25,000 $ 496 12.6 at least $25,000 but less than $30,000 $ 515 12.7 at least $30,000 but less than $40,000 $ 570 12.8 at least $40,000 but less than $50,000 $ 649 12.9 at least $50,000 but less than $70,000 $ 776 12.10 at least $70,000 but less than $100,000 $ 958 12.11 at least $100,000 but less than $140,000 $1,154 12.12 at least $140,000 but less than $200,000 $1,394 12.13 at least $200,000 but less than $400,000 $1,889 12.14 at least $400,000 but less than $600,000 $2,485 12.15 $600,000 and over $2,500 12.16 (d) Individuals who were not residents of Minnesota for any 12.17 part of 1997 and who paid more than $10 in Minnesota sales tax 12.18 on nonbusiness consumer purchases in that year qualify for a 12.19 rebate under this paragraph only. Qualifying nonresidents must 12.20 file a claim for rebate on a form prescribed by the commissioner 12.21 before the later of June 15,19992000, or 30 days after the 12.22 date of enactment of this act. The claim must include receipts 12.23 showing the Minnesota sales tax paid and the date of the sale. 12.24 Taxes paid on purchases allowed in the computation of federal 12.25 taxable income or reimbursed by an employer are not eligible for 12.26 the rebate. The commissioner shall determine the qualifying 12.27 taxes paid and rebate the lesser of: 12.28 (1) 69.0 percent of that amount; or 12.29 (2) the maximum amount for which the claimant would have 12.30 been eligible as determined under paragraph (b) if the taxpayer 12.31 filed the 1997 federal income tax return as a married taxpayer 12.32 filing jointly or head of household, or as determined under 12.33 paragraph (c) for other taxpayers. 12.34 (e) "Income," for purposes of this section other than 12.35 paragraph (d), is taxable income as defined in section 63 of the 12.36 Internal Revenue Code of 1986, as amended through December 31, 13.1 1996, plus the sum of any additions to federal taxable income 13.2 for the taxpayer under Minnesota Statutes, section 290.01, 13.3 subdivision 19a, and reported on the original 1997 income tax 13.4 return including subsequent adjustments to that return made 13.5 within the time limits specified in paragraph (h). For an 13.6 individual who was a resident of Minnesota for less than the 13.7 entire year,the sales tax rebate equals the sales tax rebate13.8calculated under paragraph (b) or (c)income as determined under 13.9 this paragraph must be multiplied by the percentage determined 13.10 pursuant to Minnesota Statutes, section 290.06, subdivision 2c, 13.11 paragraph (e), as calculated on the original 1997 income tax 13.12 return including subsequent adjustments to that return made 13.13 within the time limits specified in paragraph (h). For purposes 13.14 of paragraph (d), "income" is taxable income as defined in 13.15 section 63 of the Internal Revenue Code of 1986, as amended 13.16 through December 31, 1996, and reported on the taxpayer's 13.17 original federal tax return for the first taxable year beginning 13.18 after December 31, 1996. 13.19 (f) For a fiscal year taxpayer, the June 15, 1999, dates in 13.20 paragraphs (a) through (d) are extended one month for each month 13.21 in calendar year 1997 that occurred prior to the start of the 13.22 individual's 1997 fiscal tax year. 13.23 (g) Before payment, the commissioner of revenue shall 13.24 adjust the rebate as follows: 13.25 (1) the rebates calculated in paragraphs (b), (c), and (d) 13.26 must be proportionately reduced to account for 1997 income tax 13.27 returns that are filed on or after January 1, 1999, but before 13.28 July 1, 1999, so that the amount of sales tax rebates payable 13.29 under paragraphs (b), (c), and (d) does not exceed 13.30 $1,250,000,000; and 13.31 (2) the commissioner of finance shall certify by July 15, 13.32 1999, preliminary fiscal year 1999 general fund net nondedicated 13.33 revenues. The certification shall exclude the impact of any 13.34 legislation enacted during the 1999 regular session. If 13.35 certified net nondedicated revenues exceed the amount forecast 13.36 in February 1999, up to $50,000,000 of the increase shall be 14.1 added to the total amount rebated. The commissioner of revenue 14.2 shall adjust all rebates proportionally to reflect any 14.3 increases. The total amount of the rebate shall not exceed 14.4 $1,300,000,000. 14.5 The adjustments under this paragraph are not rules subject to 14.6 Minnesota Statutes, chapter 14. 14.7(g)(h) The commissioner of revenue may begin making sales 14.8 tax rebates by August 1, 1999. Sales tax rebates not paid by 14.9 October 1, 1999, bear interest at the rate specified in 14.10 Minnesota Statutes, section 270.75. Sales tax rebates paid to: 14.11 (1) taxpayers who file their original 1997 Minnesota income 14.12 tax return after June 15, 1999; 14.13 (2) individuals qualifying under paragraph (s); and 14.14 (3) qualifying nonresidents who file a claim for rebate 14.15 after June 15, 1999, 14.16 bear interest at the rate specified in Minnesota Statutes, 14.17 section 270.75, beginning October 1, 2000. 14.18(h)(i) A sales tax rebate shall not be adjusted based on 14.19 changes to a 1997 income tax return that are made by order of 14.20 assessment after June 15, 1999, or made by the taxpayer that are 14.21 filed with the commissioner of revenue after June 15, 1999. 14.22(i)(j) Individuals who filed a joint income tax return for 14.23 1997 shall receive a joint sales tax rebate. After the sales 14.24 tax rebate has been issued, but before the check has been 14.25 cashed, either joint claimant may request a separate check for 14.26 one-half of the joint sales tax rebate. Notwithstanding 14.27 anything in this section to the contrary, if prior to payment, 14.28 the commissioner has been notified that persons who filed a 14.29 joint 1997 income tax return are living at separate addresses, 14.30 as indicated on their 1998 income tax return or otherwise, the 14.31 commissioner may issue separate checks to each person. The 14.32 amount payable to each person is one-half of the total joint 14.33 rebate. If a rebate is received by the estate of a deceased 14.34 individual after the probate estate has been closed, and if the 14.35 original rebate check is returned to the commissioner with a 14.36 copy of the decree of descent or final account of the estate, 15.1 social security numbers, and addresses of the beneficiaries, the 15.2 commissioner may issue separate checks in proportion to their 15.3 share in the residuary estate in the names of the residuary 15.4 beneficiaries of the estate. 15.5(j)(k) The sales tax rebate is a "Minnesota tax law" for 15.6 purposes of Minnesota Statutes, section 270B.01, subdivision 8. 15.7(k)(l) The sales tax rebate is "an overpayment of any tax 15.8 collected by the commissioner" for purposes of Minnesota 15.9 Statutes, section 270.07, subdivision 5. For purposes of this 15.10 paragraph, a joint sales tax rebate is payable to each spouse 15.11 equally. 15.12(l)(m) If the commissioner of revenue cannot locate an 15.13 individual entitled to a sales tax rebate by July 1, 2001, or if 15.14 an individual to whom a sales tax rebate was issued has not 15.15 cashed the check by July 1, 2001, the right to the sales tax 15.16 rebate lapses and the check must be deposited in the general 15.17 fund. 15.18(m)(n) Individuals entitled to a sales tax rebate pursuant 15.19 to paragraph (a), but who did not receive one, and individuals 15.20 who receive a sales tax rebate that was not correctly computed, 15.21 must file a claim with the commissioner before July 1, 2000, in 15.22 a form prescribed by the commissioner. Taxpayers who file their 15.23 original 1997 Minnesota income tax return after June 15, 1999, 15.24 and qualifying nonresidents who file a claim for rebate after 15.25 June 15, 1999, and who do not receive it or who receive a sales 15.26 tax rebate that was not correctly computed, must file a claim 15.27 with the commissioner before July 1, 2001, in a form prescribed 15.28 by the commissioner. These claims must be treated as if they 15.29 are a claim for refund under Minnesota Statutes, section 15.30 289A.50, subdivisions 4 and 7. 15.31(n)(o) The sales tax rebate is a refund subject to revenue 15.32 recapture under Minnesota Statutes, chapter 270A. The 15.33 commissioner of revenue shall remit the entire refund to the 15.34 claimant agency, which shall, upon the request of the spouse who 15.35 does not owe the debt, refund one-half of the joint sales tax 15.36 rebate to the spouse who does not owe the debt. 16.1(o)(p) The rebate is a reduction of fiscal year 1999 sales 16.2 tax revenues. The amount necessary to make the sales tax 16.3 rebates and interest provided in this section is appropriated 16.4 from the general fund to the commissioner of revenue in fiscal 16.5 year 1999 and is available until June 30, 2001. 16.6(p)(q) If a sales tax rebate check is cashed by someone 16.7 other than the payee or payees of the check, and the 16.8 commissioner of revenue determines that the check has been 16.9 forged or improperly endorsed or the commissioner determines 16.10 that a rebate was overstated or erroneously issued, the 16.11 commissioner may issue an order of assessment for the amount of 16.12 the check or the amount the check is overstated against the 16.13 person or persons cashing it. The assessment must be made 16.14 within two years after the check is cashed, but if cashing the 16.15 check constitutes theft under Minnesota Statutes, section 16.16 609.52, or forgery under Minnesota Statutes, section 609.631, 16.17 the assessment can be made at any time. The assessment may be 16.18 appealed administratively and judicially. The commissioner may 16.19 take action to collect the assessment in the same manner as 16.20 provided by Minnesota Statutes, chapter 289A, for any other 16.21 order of the commissioner assessing tax. 16.22(q)(r) Notwithstanding Minnesota Statutes, sections 9.031, 16.23 16A.40, 16B.49, 16B.50, and any other law to the contrary, the 16.24 commissioner of revenue may take whatever actions the 16.25 commissioner deems necessary to pay the rebates required by this 16.26 section, and may, in consultation with the commissioner of 16.27 finance and the state treasurer, contract with a private vendor 16.28 or vendors to process, print, and mail the rebate checks or 16.29 warrants required under this section and receive and disburse 16.30 state funds to pay those checks or warrants. 16.31(r)(s) The commissioner may pay rebates required by this 16.32 section by electronic funds transfer to individuals who 16.33 requested that their 1998 individual income tax refund be paid 16.34 through electronic funds transfer. The commissioner may make 16.35 the electronic funds transfer payments to the same financial 16.36 institution and into the same account as the 1998 individual 17.1 income tax refund. 17.2 (t) Individuals who: 17.3 (1) were residents of Minnesota in 1997; 17.4 (2) attained the age of 18 on or before December 31, 1997; 17.5 (3) had at least $500 of qualifying income in 1997; and 17.6 (4) do not otherwise qualify for a rebate either 17.7 individually or as the spouse of an individual who receives a 17.8 rebate on the basis of a married joint filing status, 17.9 qualify for a rebate under this paragraph only. If required to 17.10 do so by the commissioner, claimants under this paragraph must 17.11 file a claim for a rebate on a form prescribed by the 17.12 commissioner before the later of June 15, 2000, or 30 days after 17.13 the date of enactment of this act. The commissioner shall 17.14 verify the information provided and rebate the minimum amount 17.15 for which the claimant would have been eligible as determined 17.16 under paragraph (b), as adjusted by paragraph (f), if the 17.17 taxpayer would have met the requirements to file a 1997 federal 17.18 income tax return as a married taxpayer filing jointly or head 17.19 of household, or as determined under paragraph (c), as adjusted 17.20 by paragraph (f), for other taxpayers. Qualified claims for 17.21 rebate under this paragraph not paid by October 1, 2000, bear 17.22 interest at the rate specified in Minnesota Statutes, section 17.23 270.75. As used in this paragraph only, "qualifying income" 17.24 means the sum of: 17.25 (1) self-employment income subject to the tax under section 17.26 1401(b) of the Internal Revenue Code of 1986, as amended through 17.27 December 31, 1997; plus 17.28 (2) wages subject to tax under section 3101(b) of the 17.29 Internal Revenue Code of 1986, as amended through December 31, 17.30 1997; plus 17.31 (3) amounts described in Minnesota Statutes, section 17.32 290A.03, subdivision 3, paragraph (b), clauses (iv), (v), (vi), 17.33 (vii), (viii), (ix), (x), and (xii). 17.34 As used in this paragraph, "qualifying income" does not 17.35 include any compensation paid to inmates at a state, local, 17.36 federal, or privately operated correctional facility as pay for 18.1 services performed by the inmate at the facility. 18.2 If the Social Security Administration or Railroad 18.3 Retirement Board is paying benefits to a recipient by electronic 18.4 funds transfers in 2000, the rebate under this paragraph must be 18.5 paid by the commissioner through electronic funds transfer to 18.6 the same financial institution and into the same account into 18.7 which the Social Security Administration or Railroad Retirement 18.8 Board transfers social security benefits in calendar year 1999. 18.9 Sec. 2. [APPLICATION OF LAW.] 18.10 The limitation on the total amount of rebates in Laws 1999, 18.11 chapter 243, article 1, section 2, paragraph (f), does not apply 18.12 to rebates issued under section 1. To the extent applicable, 18.13 all other provisions of Laws 1999, chapter 243, article 1, 18.14 section 2, apply to the rebates paid under section 1. 18.15 Sec. 3. [APPROPRIATION.] 18.16 The amount necessary to pay the rebates under section 1 is 18.17 appropriated from the general fund to the commissioner of 18.18 revenue for fiscal years 2000 and 2001. 18.19 EFFECTIVE DATE: Sections 1 to 3 are effective the day 18.20 following final enactment. 18.21 ARTICLE 3 18.22 AGRICULTURAL ASSISTANCE 18.23 Section 1. Laws 1999, chapter 112, section 1, subdivision 18.24 2, is amended to read: 18.25 Subd. 2. [PAYMENT TO FARMERS.] Every farm operator may 18.26 apply on a separate form for each farm that they operate to the 18.27 commissioner for payments as provided under this subdivision. 18.28 The payment shall be made to each farmer at risk for a farm 18.29 operation and shall equal $4, multiplied by the number of acres 18.30 of the farm operation, multiplied by the percentage of the risk 18.31 borne by that farmer for that farm operation. If total payments 18.32 for a farm to all farmers at risk for that farm would exceed 18.33 $5,600, the payment to each farmer at risk shall be prorated so 18.34 that the total payments to all farmers at risk for that farm do 18.35 not exceed $5,600. 18.36 Applications shall be based on information reported to the 19.1 farm service agency for crop year 1998 by December 31, 1998. 19.2 The applications shall include the social security number or 19.3 federal employer identification number or a producer number 19.4 assigned by the farm service agency for each farmer and the farm 19.5 service agency farm number from form 156EZ. The commissioner 19.6 shall prepare application forms for the payment and ensure that 19.7 they are available throughout the state. The commissioner shall 19.8 make payments by June 30, 1999, to each eligible farmer who 19.9 applies by May 31, 1999, or within 30 days of the application if 19.10 the application is received after May 31, 1999. In no case will 19.11 applications be accepted afterSeptemberJune 30,19992000. 19.12 Sec. 2. Laws 1999, chapter 112, section 1, subdivision 7, 19.13 is amended to read: 19.14 Subd. 7. [CERTIFICATION AND PAYMENT.] Any person eligible 19.15 for the refund under subdivisions 4 to 8 shall send the 19.16 commissioner a copy of the certification that the taxpayer 19.17 received from the county auditor. In no case will applications 19.18 be accepted afterNovemberJune 30,19992000. The commissioner 19.19 shall issue a refund by July 15, 1999, to each qualifying 19.20 taxpayer who applied by June 15, 1999, or within 30 days of 19.21 receipt of the application if received after June 15, 1999. 19.22 Sec. 3. Laws 1999, chapter 112, section 2, is amended to 19.23 read: 19.24 Sec. 2. [APPROPRIATION.] 19.25 (a) The amount necessary to fund the payments required 19.26 under section 1, subdivisions 2 and 7, is appropriated in fiscal 19.27yearyears 1999 and 2000 from the general fund to the 19.28 commissioner of revenue. This appropriation is available 19.29 untilJune 30December 31, 2000. 19.30 (b) $68,000 is appropriated in fiscal year 1999 to the 19.31 commissioner of revenue for distribution to counties for the 19.32 costs of administering section 1, subdivisions 4 to 8. This 19.33 appropriation is available until June 30, 2000. The 19.34 distribution to counties shall be based on the number of refunds 19.35 received under the provisions of section 1, subdivisions 4 to 8. 19.36 Sec. 4. [AGRICULTURAL ASSISTANCE IN 2000.] 20.1 Subdivision 1. [DEFINITIONS.] (a) The definitions in this 20.2 subdivision apply to this section. 20.3 (b) "Acre" means an acre of effective agricultural use land 20.4 within the state of Minnesota as reported to the Farm Service 20.5 Agency on form 156EZ. 20.6 (c) "Commissioner" means the commissioner of revenue. 20.7 (d) "Disaster county" means a county in Minnesota that: 20.8 (1) received a presidential major disaster declaration in 20.9 1999; or 20.10 (2) was named as a contiguous county under a presidential 20.11 major disaster declaration in 1999. 20.12 (e) "Effective agricultural use land" means land suitable 20.13 for growing an agricultural crop and excludes land enrolled in 20.14 the conservation reserve program established by Minnesota 20.15 Statutes, section 103F.515, or the water bank program 20.16 established by Minnesota Statutes, section 103F.601. 20.17 (f) "Farm" or "farm operation" means an agricultural 20.18 production operation located wholly or in part within a disaster 20.19 county that: 20.20 (1) has a unique farm number as reported on form 156EZ to 20.21 the Farm Service Agency and includes at least 40 acres of 20.22 effective agricultural use land; or 20.23 (2) has produced at least $10,000 in sales of unprocessed 20.24 livestock or unprocessed dairy products as reported on schedule 20.25 F or form 1065, 1120, or 1120S of the farmer's federal income 20.26 tax return for the taxable year beginning in either calendar 20.27 year 1998 or 1999. 20.28 (g) "Farm operator" means a person who is identified as the 20.29 operator of a farm on form 156EZ filed with the Farm Service 20.30 Agency, provided that if both spouses in a married couple are so 20.31 identified, only one will be deemed to be a farm operator for 20.32 purposes of this article. 20.33 (h) "Farm Service Agency" means the United States 20.34 Department of Agriculture, Farm Service Agency. 20.35 (i) "Farmer" or "farmer at risk" means a person who: 20.36 (1) produces an agricultural crop or livestock and is 21.1 reported to the Farm Service Agency as bearing a percentage of 21.2 the risk for the farm operation; or 21.3 (2) owns or resides on property homesteaded under Minnesota 21.4 Statutes, section 273.124, subdivision 1, paragraph (c), and 21.5 operates a livestock production facility. 21.6 (j) "Livestock" means cattle, hogs, poultry, and sheep. 21.7 (k) "Person" includes individuals, fiduciaries, estates, 21.8 trusts, partnerships, joint ventures, and corporations. 21.9 Subd. 2. [PAYMENT TO FARMERS.] (a) A farm operator may 21.10 apply on a separate form for each farm that the person operates 21.11 to the commissioner for payments as provided under this 21.12 subdivision. The payment must be made to each farmer at risk 21.13 for a farm operation and must equal $4, multiplied by the number 21.14 of acres of the farm operation, multiplied by the percentage of 21.15 the risk borne by that farmer for that farm operation. 21.16 (b) Applications must be based on information reported to 21.17 the Farm Service Agency for crop year 1999, by December 31, 21.18 1999, and must include the social security number or federal 21.19 employer identification number, or a producer number assigned by 21.20 the Farm Service Agency for each farmer and the Farm Service 21.21 Agency farm number from form 156EZ. The commissioner shall 21.22 prepare application forms for the payment and ensure that they 21.23 are available throughout the state. The commissioner shall make 21.24 payments by June 30, 2000, to each eligible farmer who applies 21.25 by May 31, 2000, or within 30 days of the application if the 21.26 application is received after May 31, 2000. In no case will 21.27 applications be accepted after September 30, 2000. 21.28 Subd. 3. [ALTERNATE QUALIFICATION.] (a) If an agricultural 21.29 production operation does not meet the definition of a farm 21.30 under subdivision 1 solely because: 21.31 (1) the farm operator had not filed a form 156EZ with the 21.32 Farm Service Agency; 21.33 (2) there was an error in the Farm Service Agency's 21.34 records; or 21.35 (3) an operator operates more than one farm and the acres 21.36 of effective agricultural use land of a farm is less than 40 22.1 acres, but the combined acres of effective agricultural use land 22.2 of all land operated by that operator is at least 40 acres, 22.3 the commissioner may allow the farm operator to apply for 22.4 payment under subdivision 2 after providing the information the 22.5 commissioner requires to determine the number of acres that 22.6 would be comparable to the effective agricultural use land 22.7 listed on form 156EZ. 22.8 (b) If the number of acres of effective agricultural use 22.9 land for crop year 1999 for a farm is greater than indicated in 22.10 the Farm Service Agency's records, the commissioner may allow a 22.11 farm operator to apply for payment on the greater acreage after 22.12 providing the information the commissioner requires. 22.13 (c) If a person who produced an agricultural crop or 22.14 livestock in 1999 and bore a portion of the risk for the farm 22.15 operation does not meet the definition of a farmer under 22.16 subdivision 1 solely because that information was not reported 22.17 to the Farm Service Agency or because there was an error in the 22.18 Farm Service Agency's records, the commissioner may allow the 22.19 farmer to be included on an application for payment under 22.20 subdivision 2 after the farmer provides the information the 22.21 commissioner requires to determine the farmer was at risk for 22.22 that farm. 22.23 Subd. 4. [LIMIT.] No person and no married couple may 22.24 receive a payment under subdivision 2 that exceeds $5,600. 22.25 Subd. 5. [APPLICATION OF OTHER LAWS.] The payments under 22.26 subdivision 2 are a "Minnesota tax law" for purposes of 22.27 Minnesota Statutes, section 270B.01, subdivision 8. 22.28 Subd. 6. [REMEDIES.] A farmer denied a payment under 22.29 subdivision 2 may appeal that denial under Minnesota Statutes, 22.30 section 289A.50, subdivision 7. 22.31 Subd. 7. [INTEREST.] Payments under subdivision 2 bear 22.32 interest at the rate specified in Minnesota Statutes, section 22.33 289A.55, subdivision 1, from the later of the payment dates 22.34 specified under subdivision 2 or 75 days after a complete 22.35 payment application was filed with the commissioner. 22.36 Subd. 8. [PENALTIES.] If the commissioner determines that 23.1 claims for payments under subdivision 2 are or were excessive 23.2 and were filed with fraudulent intent, the claim must be 23.3 disallowed in full. If the claim has been paid, the amount 23.4 disallowed must be recovered by assessment and collection under 23.5 Minnesota Statutes, chapter 289A. The assessment must be made 23.6 within two years after a check is cashed, but if cashing a check 23.7 constitutes theft under Minnesota Statutes, section 609.52, or 23.8 forgery under Minnesota Statutes, section 609.631, the 23.9 assessment may be made at any time. The assessment may be 23.10 appealed administratively and judicially. 23.11 Sec. 5. [APPROPRIATION.] 23.12 The amount necessary to fund the payments required under 23.13 section 4, subdivision 2, is appropriated in fiscal year 2000 23.14 from the general fund to the commissioner of revenue. This 23.15 appropriation is available until June 30, 2001. 23.16 EFFECTIVE DATE: Sections 1 to 5 are effective the day 23.17 following final enactment. 23.18 ARTICLE 4 23.19 INCOME AND FRANCHISE TAXES 23.20 Section 1. Minnesota Statutes 1998, section 289A.08, is 23.21 amended by adding a subdivision to read: 23.22 Subd. 16. [TAX REFUND OR RETURN PREPARERS.] (a) A "tax 23.23 refund or return preparer," as defined in section 289A.60, 23.24 subdivision 13, paragraph (g), who prepared more than 500 23.25 Minnesota individual income tax returns for the prior calendar 23.26 year must file all Minnesota individual income tax returns 23.27 prepared for the current calendar year by electronic means. 23.28 (b) For tax returns prepared for the tax year beginning in 23.29 2001, the "500" in paragraph (a) is reduced to 250. 23.30 (c) For tax returns prepared for tax years beginning after 23.31 December 31, 2001, the "500" in paragraph (a) is reduced to 100. 23.32 (d) Paragraph (a) does not apply to a return if the 23.33 taxpayer has indicated on the return that the taxpayer did not 23.34 want the return filed by electronic means. 23.35 EFFECTIVE DATE: This section is effective for tax returns 23.36 prepared for taxable years beginning after December 31, 1999. 24.1 Sec. 2. Minnesota Statutes 1998, section 289A.60, 24.2 subdivision 1, is amended to read: 24.3 Subdivision 1. [PENALTY FOR FAILURE TO PAY TAX.] If a tax 24.4 other than a withholding or sales or use tax is not paid within 24.5 the time specified for payment, a penalty must be added to the 24.6 amount required to be shown as tax. The penalty is three 24.7 percent of the tax not paid on or before the date specified for 24.8 payment of the tax if the failure is for not more than 30 days, 24.9 with an additional penalty of three percent of the amount of tax 24.10 remaining unpaid during each additional 30 days or fraction of 24.11 30 days during which the failure continues, not exceeding 24 24.12 percent in the aggregate. 24.13 If an individual files a state individual income tax return 24.14 and pays all of the state individual income tax with the filing 24.15 of a return within six months of the date the return is due and 24.16 the amount paid by the due date of the return is at least 90 24.17 percent of the amount of tax due, as shown on the return, the 24.18 individual is presumed to have reasonable cause for the late 24.19 payment. 24.20 If a withholding or sales or use tax is not paid within the 24.21 time specified for payment, a penalty must be added to the 24.22 amount required to be shown as tax. The penalty is five percent 24.23 of the tax not paid on or before the date specified for payment 24.24 of the tax if the failure is for not more than 30 days, with an 24.25 additional penalty of five percent of the amount of tax 24.26 remaining unpaid during each additional 30 days or fraction of 24.27 30 days during which the failure continues, not exceeding 15 24.28 percent in the aggregate. 24.29 EFFECTIVE DATE: This section is effective for taxable 24.30 years beginning after December 31, 1999. 24.31 Sec. 3. Minnesota Statutes 1999 Supplement, section 24.32 290.01, subdivision 19b, is amended to read: 24.33 Subd. 19b. [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 24.34 individuals, estates, and trusts, there shall be subtracted from 24.35 federal taxable income: 24.36 (1) interest income on obligations of any authority, 25.1 commission, or instrumentality of the United States to the 25.2 extent includable in taxable income for federal income tax 25.3 purposes but exempt from state income tax under the laws of the 25.4 United States; 25.5 (2) if included in federal taxable income, the amount of 25.6 any overpayment of income tax to Minnesota or to any other 25.7 state, for any previous taxable year, whether the amount is 25.8 received as a refund or as a credit to another taxable year's 25.9 income tax liability; 25.10 (3) the amount paid to others, less the credit allowed 25.11 under section 290.0674, not to exceed $1,625 for each qualifying 25.12 child in grades kindergarten to 6 and $2,500 for each qualifying 25.13 child in grades 7 to 12, for tuition, textbooks, and 25.14 transportation of each qualifying child in attending an 25.15 elementary or secondary school situated in Minnesota, North 25.16 Dakota, South Dakota, Iowa, or Wisconsin, wherein a resident of 25.17 this state may legally fulfill the state's compulsory attendance 25.18 laws, which is not operated for profit, and which adheres to the 25.19 provisions of the Civil Rights Act of 1964 and chapter 363. For 25.20 the purposes of this clause, "tuition" includes fees or tuition 25.21 as defined in section 290.0674, subdivision 1, clause (1). As 25.22 used in this clause, "textbooks" includes books and other 25.23 instructional materials and equipment used in elementary and 25.24 secondary schools in teaching only those subjects legally and 25.25 commonly taught in public elementary and secondary schools in 25.26 this state. Equipment expenses qualifying for deduction 25.27 includes expenses as defined and limited in section 290.0674, 25.28 subdivision 1, clause (3). "Textbooks" does not include 25.29 instructional books and materials used in the teaching of 25.30 religious tenets, doctrines, or worship, the purpose of which is 25.31 to instill such tenets, doctrines, or worship, nor does it 25.32 include books or materials for, or transportation to, 25.33 extracurricular activities including sporting events, musical or 25.34 dramatic events, speech activities, driver's education, or 25.35 similar programs. For purposes of the subtraction provided by 25.36 this clause, "qualifying child" has the meaning given in section 26.1 32(c)(3) of the Internal Revenue Code; 26.2 (4) contributions made in taxable years beginning after 26.3 December 31, 1981, and before January 1, 1985, to a qualified 26.4 governmental pension plan, an individual retirement account, 26.5 simplified employee pension, or qualified plan covering a 26.6 self-employed person that were included in Minnesota gross 26.7 income in the taxable year for which the contributions were made 26.8 but were deducted or were not included in the computation of 26.9 federal adjusted gross income, less any amount allowed to be 26.10 subtracted as a distribution under this subdivision or a 26.11 predecessor provision in taxable years that began before January 26.12 1, 2000. This subtraction applies only for taxable years 26.13 beginning after December 31, 1999, and before January 1, 2001; 26.14 (5) income as provided under section 290.0802; 26.15 (6) the amount of unrecovered accelerated cost recovery 26.16 system deductions allowed under subdivision 19g; 26.17 (7) to the extent included in federal adjusted gross 26.18 income, income realized on disposition of property exempt from 26.19 tax under section 290.491; 26.20 (8) to the extent not deducted in determining federal 26.21 taxable income, the amount paid for health insurance of 26.22 self-employed individuals as determined under section 162(l) of 26.23 the Internal Revenue Code, except that the percent limit does 26.24 not apply. If the taxpayer deducted insurance payments under 26.25 section 213 of the Internal Revenue Code of 1986, the 26.26 subtraction under this clause must be reduced by the lesser of: 26.27 (i) the total itemized deductions allowed under section 26.28 63(d) of the Internal Revenue Code, less state, local, and 26.29 foreign income taxes deductible under section 164 of the 26.30 Internal Revenue Code and the standard deduction under section 26.31 63(c) of the Internal Revenue Code; or 26.32 (ii) the lesser of (A) the amount of insurance qualifying 26.33 as "medical care" under section 213(d) of the Internal Revenue 26.34 Code to the extent not deducted under section 162(1) of the 26.35 Internal Revenue Code or excluded from income or (B) the total 26.36 amount deductible for medical care under section 213(a); 27.1 (9) the exemption amount allowed under Laws 1995, chapter 27.2 255, article 3, section 2, subdivision 3; 27.3 (10) to the extent included in federal taxable income, 27.4 postservice benefits for youth community service under section 27.5 124D.42 for volunteer service under United States Code, title 27.6 42, section 5011(d), as amended; 27.7 (11) to the extent not deducted in determining federal 27.8 taxable income by an individual who does not itemize deductions 27.9 for federal income tax purposes for the taxable year, an amount 27.10 equal to 50 percent of the excess of charitable contributions 27.11 allowable as a deduction for the taxable year under section 27.12 170(a) of the Internal Revenue Code over $500;and27.13 (12) to the extent included in federal taxable income, 27.14 holocaust victims' settlement payments for any injury incurred 27.15 as a result of the holocaust, if received by an individual who 27.16 was persecuted for racial or religious reasons by Nazi Germany 27.17 or any other Axis regime or an heir of such a person.; 27.18 (13) an amount equal to $360 for each of the taxpayer's 27.19 personal exemptions, as defined in section 151 of the Internal 27.20 Revenue Code, and allowed on the taxpayer's federal tax return 27.21 for the tax year. For taxable years beginning after December 27.22 31, 2000, the commissioner shall adjust the subtraction amount 27.23 by the percentage determined under section 290.06, subdivision 27.24 2d, for the taxable year; and 27.25 (14) an amount equal to $360 for each of the taxpayer's 27.26 dependent exemptions, as defined in section 152 of the Internal 27.27 Revenue Code, and allowed on the taxpayer's federal tax return 27.28 for the tax year. For taxable years beginning after December 27.29 31, 2000, the commissioner shall adjust the subtraction amount 27.30 by the percentage determined under section 290.06, subdivision 27.31 2d, for the taxable year. The subtraction in this clause is not 27.32 allowed to taxpayers who claim the credit in section 290.0676. 27.33 EFFECTIVE DATE: This section is effective for taxable 27.34 years beginning after December 31, 1999. 27.35 Sec. 4. Minnesota Statutes 1998, section 290.01, is 27.36 amended by adding a subdivision to read: 28.1 Subd. 33. [DOMICILE.] For corporations, "domicile" means 28.2 the principal place from which the trade or business of the 28.3 taxpayer is directed or managed. 28.4 EFFECTIVE DATE: This section is effective for taxable 28.5 years beginning after December 31, 1999. 28.6 Sec. 5. [290.0676] [CHILD TAX CREDIT.] 28.7 Subdivision 1. [CREDIT ALLOWED.] An individual is allowed 28.8 a credit against the tax imposed by this chapter equal to $20 28.9 for each dependent exemption as defined in section 152 of the 28.10 Internal Revenue Code, and allowed on the taxpayer's federal tax 28.11 return for the tax year. The credit is not allowed to an 28.12 individual who claims the subtraction in section 290.01, 28.13 subdivision 19b, clause (14). 28.14 For a nonresident or part-year resident, the credit 28.15 determined under this section must be allocated based on the 28.16 percentage calculated under section 290.06, subdivision 2c, 28.17 paragraph (e). 28.18 For taxable years beginning after December 31, 2000, the 28.19 commissioner shall adjust the credit amount by the percentage 28.20 determined under section 290.06, subdivision 2d, for the taxable 28.21 year. 28.22 Subd. 2. [CREDIT REFUNDABLE.] If the amount of credit 28.23 which the claimant is eligible to receive under this section 28.24 exceeds the claimant's tax liability under this chapter, the 28.25 commissioner shall refund the excess to the claimant. 28.26 EFFECTIVE DATE: This section is effective for taxable 28.27 years beginning after December 31, 1999. 28.28 Sec. 6. Minnesota Statutes 1999 Supplement, section 28.29 290.091, subdivision 2, is amended to read: 28.30 Subd. 2. [DEFINITIONS.] For purposes of the tax imposed by 28.31 this section, the following terms have the meanings given: 28.32 (a) "Alternative minimum taxable income" means the sum of 28.33 the following for the taxable year: 28.34 (1) the taxpayer's federal alternative minimum taxable 28.35 income as defined in section 55(b)(2) of the Internal Revenue 28.36 Code; 29.1 (2) the taxpayer's itemized deductions allowed in computing 29.2 federal alternative minimum taxable income, but excluding: 29.3 (i) the Minnesota charitable contribution deduction; 29.4 (ii) the medical expense deduction; 29.5 (iii) the casualty, theft, and disaster loss deduction; 29.6 (iv) the impairment-related work expenses of a disabled 29.7 person; and 29.8 (v) holocaust victims' settlement payments to the extent 29.9 allowed under section 290.01, subdivision 19b; 29.10 (3) for depletion allowances computed under section 613A(c) 29.11 of the Internal Revenue Code, with respect to each property (as 29.12 defined in section 614 of the Internal Revenue Code), to the 29.13 extent not included in federal alternative minimum taxable 29.14 income, the excess of the deduction for depletion allowable 29.15 under section 611 of the Internal Revenue Code for the taxable 29.16 year over the adjusted basis of the property at the end of the 29.17 taxable year (determined without regard to the depletion 29.18 deduction for the taxable year); 29.19 (4) to the extent not included in federal alternative 29.20 minimum taxable income, the amount of the tax preference for 29.21 intangible drilling cost under section 57(a)(2) of the Internal 29.22 Revenue Code determined without regard to subparagraph (E); and 29.23 (5) to the extent not included in federal alternative 29.24 minimum taxable income, the amount of interest income as 29.25 provided by section 290.01, subdivision 19a, clause (1); 29.26 less the sum of the amounts determined under the following: 29.27 (1) interest income as defined in section 290.01, 29.28 subdivision 19b, clause (1); 29.29 (2) an overpayment of state income tax as provided by 29.30 section 290.01, subdivision 19b, clause (2), to the extent 29.31 included in federal alternative minimum taxable income;and29.32 (3) the amount of investment interest paid or accrued 29.33 within the taxable year on indebtedness to the extent that the 29.34 amount does not exceed net investment income, as defined in 29.35 section 163(d)(4) of the Internal Revenue Code. Interest does 29.36 not include amounts deducted in computing federal adjusted gross 30.1 income; and 30.2 (4) amounts subtracted from federal taxable income as 30.3 provided by section 290.01, subdivision 19b, clauses (4), (6), 30.4 (13), and (14). 30.5 In the case of an estate or trust, alternative minimum 30.6 taxable income must be computed as provided in section 59(c) of 30.7 the Internal Revenue Code. 30.8 (b) "Investment interest" means investment interest as 30.9 defined in section 163(d)(3) of the Internal Revenue Code. 30.10 (c) "Tentative minimum tax" equals 6.5 percent of 30.11 alternative minimum taxable income after subtracting the 30.12 exemption amount determined under subdivision 3. 30.13 (d) "Regular tax" means the tax that would be imposed under 30.14 this chapter (without regard to this section and section 30.15 290.032), reduced by the sum of the nonrefundable credits 30.16 allowed under this chapter plus the credit allowed under section 30.17 290.0676. 30.18 (e) "Net minimum tax" means the minimum tax imposed by this 30.19 section. 30.20 (f) "Minnesota charitable contribution deduction" means a 30.21 charitable contribution deduction under section 170 of the 30.22 Internal Revenue Code to or for the use of an entity described 30.23 in section 290.21, subdivision 3, clauses (a) to (e). When the 30.24 federal deduction for charitable contributions is limited under 30.25 section 170(b) of the Internal Revenue Code, the allowable 30.26 contributions in the year of contribution are deemed to be first 30.27 contributions to entities described in section 290.21, 30.28 subdivision 3, clauses (a) to (e). 30.29 EFFECTIVE DATE: This section is effective for taxable 30.30 years beginning after December 31, 1999. 30.31 Sec. 7. Minnesota Statutes 1998, section 290.17, 30.32 subdivision 2, is amended to read: 30.33 Subd. 2. [INCOME NOT DERIVED FROM CONDUCT OF A TRADE OR 30.34 BUSINESS.] The income of a taxpayer subject to the allocation 30.35 rules that is not derived from the conduct of a trade or 30.36 business must be assigned in accordance with paragraphs (a) to 31.1 (f): 31.2 (a)(1) Subject to paragraphs (a)(2) and (a)(3), income from 31.3labor or personal or professional serviceswages as defined in 31.4 section 3401(a) and (f) of the Internal Revenue Code is assigned 31.5 to this state if, and to the extent that, thelabor or services31.6arework of the employee is performed within it; all other 31.7 income from such sources is treated as income from sources 31.8 without this state. 31.9 Severance pay shall be considered income from labor or 31.10 personal or professional services. 31.11 (2) In the case of an individual who is a nonresident of 31.12 Minnesota and who is an athlete or entertainer, income from 31.13 compensation for labor or personal services performed within 31.14 this state shall be determined in the following manner: 31.15 (i) The amount of income to be assigned to Minnesota for an 31.16 individual who is a nonresident salaried athletic team employee 31.17 shall be determined by using a fraction in which the denominator 31.18 contains the total number of days in which the individual is 31.19 under a duty to perform for the employer, and the numerator is 31.20 the total number of those days spent in Minnesota. For purposes 31.21 of this paragraph, off-season training activities, unless 31.22 conducted at the team's facilities as part of a team imposed 31.23 program, are not included in the total number of duty days. 31.24 Bonuses earned as a result of play during the regular season or 31.25 for participation in championship, play-off, or all-star games 31.26 must be allocated under the formula. Signing bonuses are not 31.27 subject to allocation under the formula if they are not 31.28 conditional on playing any games for the team, are payable 31.29 separately from any other compensation, and are nonrefundable; 31.30 and 31.31 (ii) The amount of income to be assigned to Minnesota for 31.32 an individual who is a nonresident, and who is an athlete or 31.33 entertainer not listed in clause (i), for that person's athletic 31.34 or entertainment performance in Minnesota shall be determined by 31.35 assigning to this state all income from performances or athletic 31.36 contests in this state. 32.1 (3) For purposes of this section, amounts received by a 32.2 nonresident as "retirement income" as defined in section (b)(1) 32.3 of the State Income Taxation of Pension Income Act, Public Law 32.4 Number 104-95, are not considered income derived from carrying 32.5 on a trade or business or from performing personal or 32.6 professional services in Minnesota, and are not taxable under 32.7 this chapter. 32.8 (b) Income or gains from tangible property located in this 32.9 state that is not employed in the business of the recipient of 32.10 the income or gains must be assigned to this state. 32.11 (c) Income or gains from intangible personal property not 32.12 employed in the business of the recipient of the income or gains 32.13 must be assigned to this state if the recipient of the income or 32.14 gains is a resident of this state or is a resident trust or 32.15 estate. 32.16 Gain on the sale of a partnership interest is allocable to 32.17 this state in the ratio of the original cost of partnership 32.18 tangible property in this state to the original cost of 32.19 partnership tangible property everywhere, determined at the time 32.20 of the sale. If more than 50 percent of the value of the 32.21 partnership's assets consists of intangibles, gain or loss from 32.22 the sale of the partnership interest is allocated to this state 32.23 in accordance with the sales factor of the partnership for its 32.24 first full tax period immediately preceding the tax period of 32.25 the partnership during which the partnership interest was sold. 32.26 Gain on the sale of goodwill or income from a covenant not 32.27 to compete that is connected with a business operating all or 32.28 partially in Minnesota is allocated to this state to the extent 32.29 that the income from the business in the year preceding the year 32.30 of sale was assignable to Minnesota under subdivision 3. 32.31 When an employer pays an employee for a covenant not to 32.32 compete, the income allocated to this state is in the ratio of 32.33 the employee's service in Minnesota in the calendar year 32.34 preceding leaving the employment of the employer over the total 32.35 services performed by the employee for the employer in that year. 32.36 (d) Income from winnings on Minnesota pari-mutuel betting 33.1 tickets, the Minnesota state lottery, and lawful gambling as 33.2 defined in section 349.12, subdivision 24, conducted within the 33.3 boundaries of the state of Minnesota shall be assigned to this 33.4 state. 33.5 (e) All items of gross income not covered in paragraphs (a) 33.6 to (d) and not part of the taxpayer's income from a trade or 33.7 business shall be assigned to the taxpayer's domicile. 33.8 (f) For the purposes of this section, working as an 33.9 employee shall not be considered to be conducting a trade or 33.10 business. 33.11 EFFECTIVE DATE: This section is effective for wages paid 33.12 after the date of final enactment of this act, except that to 33.13 the extent this section impacts an employer's requirement to 33.14 withhold Minnesota tax under Minnesota Statutes, section 290.92, 33.15 subdivision 4a, the requirement to withhold is effective for 33.16 wages paid after December 31, 2000. 33.17 Sec. 8. [CITY OF LUVERNE.] 33.18 Subdivision 1. [AUTHORIZATION.] The governing body of the 33.19 city of Luverne may designate between one and six areas of the 33.20 city as border city development zones. The total area of the 33.21 zones may not exceed 100 acres. 33.22 Subd. 2. [APPLICATION OF GENERAL LAW.] (a) The provisions 33.23 of Minnesota Statutes, sections 469.1731 to 469.1735, apply to 33.24 the border city development zones designated under this section. 33.25 The governing body of the city may exercise the powers granted 33.26 under Minnesota Statutes, sections 469.1731 to 469.1735, 33.27 including powers that apply outside of the zones. 33.28 (b) The allocation under subdivision 3 for purposes of 33.29 Minnesota Statutes, section 469.1735, subdivision 2, and the 33.30 necessary amount of the allocation is appropriated to the 33.31 commissioner of revenue. 33.32 Subd. 3. [ALLOCATION OF STATE TAX REDUCTIONS.] (a) The 33.33 cumulative total amount of tax reductions for all years of the 33.34 program under Minnesota Statutes, sections 469.1731 to 469.1735, 33.35 is limited to $183,000, and the maximum for any year is $61,000. 33.36 (b) This allocation may be used for tax reductions provided 34.1 in Minnesota Statutes, section 469.1732 or 469.1734, or for 34.2 reimbursements under Minnesota Statutes, section 469.1735, 34.3 subdivision 3, but only if the governing body of the city of 34.4 Luverne determines that the tax reduction or offset is necessary 34.5 to enable a business to expand within a city or to attract a 34.6 business to the city. 34.7 (c) The commissioner of revenue may waive the limit under 34.8 this subdivision using the same rules and standards provided in 34.9 Minnesota Statutes, section 469.169, subdivision 12, paragraph 34.10 (b). 34.11 EFFECTIVE DATE: This section is effective upon approval by 34.12 the governing body of the city of Luverne and compliance with 34.13 the requirements of Minnesota Statutes, section 645.021, 34.14 subdivision 3. 34.15 Sec. 9. [TAX INFORMATION SAMPLE DATA STUDY.] 34.16 (a) One of the goals of a reengineered income tax system is 34.17 to reduce the administrative burden for both taxpayers and tax 34.18 administrators. In order to reduce the cost of handling paper 34.19 returns and to explore electronic options for taxpayer filing of 34.20 tax data, the department of revenue will explore eliminating the 34.21 requirement of Minnesota Statutes, section 289A.08, subdivision 34.22 11, that the federal return be attached in filing a Minnesota 34.23 individual income tax return. This federal return information 34.24 is used for the purposes of ensuring the accurate calculation of 34.25 individuals' Minnesota income tax liabilities and for the 34.26 purposes of preparing the microdata samples under Minnesota 34.27 Statutes, section 270.0681. 34.28 (b) To ensure the continued reliability of income tax data 34.29 samples and to evaluate ways in which the quality of samples may 34.30 be improved, the commissioner shall study and evaluate 34.31 alternatives to requiring taxpayers to attach a copy of their 34.32 federal return when filing Minnesota state income tax. The 34.33 study must be prepared in consultation with the coordinating 34.34 committee established in Minnesota Statutes, section 270.0681, 34.35 subdivision 2. The study must: 34.36 (1) evaluate the quality of federal electronic data 35.1 compared to sample data prepared from returns filed with the 35.2 department; 35.3 (2) evaluate alternative sampling methodology, including 35.4 preselection of sampled returns, panel data, and other sampling 35.5 methods; and 35.6 (3) evaluate and test whether alternative methods can 35.7 (i) provide a data sample that is as accurate and reliable 35.8 as one prepared from federal returns that are filed with or 35.9 attached to Minnesota individual income tax returns; and 35.10 (ii) result in a data sample that will continue to be 35.11 available to staff of both the department of finance and the 35.12 legislature on the same basis as one prepared from returns 35.13 required to be attached to or filed with the Minnesota tax 35.14 returns. 35.15 (c) The commissioner of revenue shall report the findings 35.16 of the study to the house tax committee chair, the senate tax 35.17 committee chair, and the commissioner of finance. 35.18 (d) The commissioner of revenue shall prepare a bill for 35.19 introduction in the 2001 legislative session that eliminates, 35.20 for some or all taxpayers, the requirement that a copy of the 35.21 federal return be filed with the individual income tax return, 35.22 if the commissioner determines as a result of the study that: 35.23 (1) an alternative method would provide a data sample that 35.24 is as accurate and reliable as one prepared from federal returns 35.25 required to be filed with the Minnesota return; and 35.26 (2) the sample will continue to be available to the staff 35.27 of both the department of finance and the legislature on the 35.28 same basis as one prepared from returns required to be filed 35.29 with Minnesota tax returns. 35.30 EFFECTIVE DATE: This section is effective the day 35.31 following final enactment. 35.32 Sec. 10. [COMMISSIONER OF REVENUE; TEMPORARY POWERS.] 35.33 Subdivision 1. [APPLICABILITY.] This section gives the 35.34 commissioner of revenue certain temporary powers. These powers 35.35 apply only to taxes imposed under Minnesota Statutes, sections 35.36 290.032, 290.06, and 290.091 administered by the commissioner 36.1 under Minnesota Statutes, chapters 289A and 290. 36.2 Subd. 2. [PAYMENT OF TAXES.] The commissioner may 36.3 establish additional due dates, applicable to certain groups of 36.4 taxpayers, for the payment of taxes. Unless the commissioner 36.5 has the written consent of the taxpayer, the additional payment 36.6 dates must not require the taxpayer to pay the tax earlier than 36.7 the payment dates provided by statute or rule. The commissioner 36.8 may accept various forms of payment, including, but not limited 36.9 to, financial transaction cards and electronic funds transfer. 36.10 Subd. 3. [FILING OF RETURN.] The commissioner may 36.11 establish additional due dates, applicable to certain groups of 36.12 taxpayers, for the filing of tax returns. Unless the 36.13 commissioner has the written consent of the taxpayer, the return 36.14 due date must not be earlier than the due date provided by 36.15 statute or rule. In conducting pilot studies, the commissioner 36.16 may use tax return forms with varying formats, accept electronic 36.17 filed returns, and waive the taxpayer signature requirements. 36.18 Subd. 4. [AGREEMENTS.] The commissioner may enter written 36.19 agreements with taxpayers that provide for the payment of taxes 36.20 or the filing of returns at dates earlier than provided by 36.21 statute or rule. The commissioner and the taxpayer may also 36.22 agree in writing to other changes from the statutory or rule 36.23 requirements related to the administration of these taxes. If 36.24 the taxpayer agrees to pay taxes at a date earlier than that 36.25 provided by statute, the commissioner may negotiate payments to 36.26 the taxpayer to compensate in part or in full for the loss 36.27 incurred as a result of the accelerated payment. 36.28 Subd. 5. [PROCEDURE; APPROVAL.] Pilot studies proposed 36.29 under these authorities must be presented to the chairs of the 36.30 house of representatives tax committee and the senate committee 36.31 on taxes and to the chairs of the committees on state government 36.32 finance of the house of representatives and the senate. No 36.33 study may be undertaken without the approval of both tax 36.34 committee chairs. If either chair fails to respond within 15 36.35 days after the proposal is presented, that chair is considered 36.36 to have approved the study. If the study is approved, the 37.1 commissioner shall initially seek participation on a voluntary 37.2 basis from within the targeted taxpayer group. 37.3 Subd. 6. [EXPIRATION DATE.] This section expires June 30, 37.4 2002, and all pilot projects under this section must be 37.5 completed by June 30, 2002. 37.6 EFFECTIVE DATE: This section is effective the day 37.7 following final enactment. 37.8 ARTICLE 5 37.9 FEDERAL UPDATE 37.10 Section 1. Minnesota Statutes 1999 Supplement, section 37.11 289A.02, subdivision 7, is amended to read: 37.12 Subd. 7. [INTERNAL REVENUE CODE.] Unless specifically 37.13 defined otherwise, "Internal Revenue Code" means the Internal 37.14 Revenue Code of 1986, as amended through December 31,19981999. 37.15 Sec. 2. Minnesota Statutes 1999 Supplement, section 37.16 290.01, subdivision 19, is amended to read: 37.17 Subd. 19. [NET INCOME.] The term "net income" means the 37.18 federal taxable income, as defined in section 63 of the Internal 37.19 Revenue Code of 1986, as amended through the date named in this 37.20 subdivision, incorporating any elections made by the taxpayer in 37.21 accordance with the Internal Revenue Code in determining federal 37.22 taxable income for federal income tax purposes, and with the 37.23 modifications provided in subdivisions 19a to 19f. 37.24 In the case of a regulated investment company or a fund 37.25 thereof, as defined in section 851(a) or 851(g) of the Internal 37.26 Revenue Code, federal taxable income means investment company 37.27 taxable income as defined in section 852(b)(2) of the Internal 37.28 Revenue Code, except that: 37.29 (1) the exclusion of net capital gain provided in section 37.30 852(b)(2)(A) of the Internal Revenue Code does not apply; 37.31 (2) the deduction for dividends paid under section 37.32 852(b)(2)(D) of the Internal Revenue Code must be applied by 37.33 allowing a deduction for capital gain dividends and 37.34 exempt-interest dividends as defined in sections 852(b)(3)(C) 37.35 and 852(b)(5) of the Internal Revenue Code; and 37.36 (3) the deduction for dividends paid must also be applied 38.1 in the amount of any undistributed capital gains which the 38.2 regulated investment company elects to have treated as provided 38.3 in section 852(b)(3)(D) of the Internal Revenue Code. 38.4 The net income of a real estate investment trust as defined 38.5 and limited by section 856(a), (b), and (c) of the Internal 38.6 Revenue Code means the real estate investment trust taxable 38.7 income as defined in section 857(b)(2) of the Internal Revenue 38.8 Code. 38.9 The net income of a designated settlement fund as defined 38.10 in section 468B(d) of the Internal Revenue Code means the gross 38.11 income as defined in section 468B(b) of the Internal Revenue 38.12 Code. 38.13The Internal Revenue Code of 1986, as amended through38.14December 31, 1986, shall be in effect for taxable years38.15beginning after December 31, 1986. The provisions of sections38.1610104, 10202, 10203, 10204, 10206, 10212, 10221, 10222, 10223,38.1710226, 10227, 10228, 10611, 10631, 10632, and 10711 of the38.18Omnibus Budget Reconciliation Act of 1987, Public Law Number38.19100-203, the provisions of sections 1001, 1002, 1003, 1004,38.201005, 1006, 1008, 1009, 1010, 1011, 1011A, 1011B, 1012, 1013,38.211014, 1015, 1018, 2004, 3041, 4009, 6007, 6026, 6032, 6137,38.226277, and 6282 of the Technical and Miscellaneous Revenue Act of38.231988, Public Law Number 100-647, the provisions of sections38.247811, 7816, and 7831 of the Omnibus Budget Reconciliation Act of38.251989, Public Law Number 101-239, the provisions of sections38.261305, 1704(r), and 1704(e)(1) of the Small Business Job38.27Protection Act, Public Law Number 104-188, and the provisions of38.28sections 975 and 1604(d)(2) and (e) of the Taxpayer Relief Act38.29of 1997, Public Law Number 105-34, and the provisions of section38.304004 of the Omnibus Consolidated and Emergency Supplemental38.31Appropriations Act, 1999, Public Law Number 105-277 shall be38.32effective at the time they become effective for federal income38.33tax purposes.38.34The Internal Revenue Code of 1986, as amended through38.35December 31, 1987, shall be in effect for taxable years38.36beginning after December 31, 1987. The provisions of sections39.14001, 4002, 4011, 5021, 5041, 5053, 5075, 6003, 6008, 6011,39.26030, 6031, 6033, 6057, 6064, 6066, 6079, 6130, 6176, 6180,39.36182, 6280, and 6281 of the Technical and Miscellaneous Revenue39.4Act of 1988, Public Law Number 100-647, the provisions of39.5sections 7815 and 7821 of the Omnibus Budget Reconciliation Act39.6of 1989, Public Law Number 101-239, and the provisions of39.7section 11702 of the Revenue Reconciliation Act of 1990, Public39.8Law Number 101-508, shall become effective at the time they39.9become effective for federal tax purposes.39.10The Internal Revenue Code of 1986, as amended through39.11December 31, 1988, shall be in effect for taxable years39.12beginning after December 31, 1988. The provisions of sections39.137101, 7102, 7104, 7105, 7201, 7202, 7203, 7204, 7205, 7206,39.147207, 7210, 7211, 7301, 7302, 7303, 7304, 7601, 7621, 7622,39.157641, 7642, 7645, 7647, 7651, and 7652 of the Omnibus Budget39.16Reconciliation Act of 1989, Public Law Number 101-239, the39.17provision of section 1401 of the Financial Institutions Reform,39.18Recovery, and Enforcement Act of 1989, Public Law Number 101-73,39.19the provisions of sections 11701 and 11703 of the Revenue39.20Reconciliation Act of 1990, Public Law Number 101-508, and the39.21provisions of sections 1702(g) and 1704(f)(2)(A) and (B) of the39.22Small Business Job Protection Act, Public Law Number 104-188,39.23shall become effective at the time they become effective for39.24federal tax purposes.39.25The Internal Revenue Code of 1986, as amended through39.26December 31, 1989, shall be in effect for taxable years39.27beginning after December 31, 1989. The provisions of sections39.2811321, 11322, 11324, 11325, 11403, 11404, 11410, and 11521 of39.29the Revenue Reconciliation Act of 1990, Public Law Number39.30101-508, and the provisions of sections 13224 and 13261 of the39.31Omnibus Budget Reconciliation Act of 1993, Public Law Number39.32103-66, shall become effective at the time they become effective39.33for federal purposes.39.34The Internal Revenue Code of 1986, as amended through39.35December 31, 1990, shall be in effect for taxable years39.36beginning after December 31, 1990.40.1The provisions of section 13431 of the Omnibus Budget40.2Reconciliation Act of 1993, Public Law Number 103-66, shall40.3become effective at the time they became effective for federal40.4purposes.40.5The Internal Revenue Code of 1986, as amended through40.6December 31, 1991, shall be in effect for taxable years40.7beginning after December 31, 1991.40.8The provisions of sections 1936 and 1937 of the40.9Comprehensive National Energy Policy Act of 1992, Public Law40.10Number 102-486, the provisions of sections 13101, 13114, 13122,40.1113141, 13150, 13151, 13174, 13239, 13301, and 13442 of the40.12Omnibus Budget Reconciliation Act of 1993, Public Law Number40.13103-66, and the provisions of section 1604(a)(1), (2), and (3)40.14of the Taxpayer Relief Act of 1997, Public Law Number 105-34,40.15shall become effective at the time they become effective for40.16federal purposes.40.17The Internal Revenue Code of 1986, as amended through40.18December 31, 1992, shall be in effect for taxable years40.19beginning after December 31, 1992.40.20The provisions of sections 13116, 13121, 13206, 13210,40.2113222, 13223, 13231, 13232, 13233, 13239, 13262, and 13321 of40.22the Omnibus Budget Reconciliation Act of 1993, Public Law Number40.23103-66, the provisions of sections 1703(a), 1703(d), 1703(i),40.241703(l), and 1703(m) of the Small Business Job Protection Act,40.25Public Law Number 104-188, and the provision of section 1604(c)40.26of the Taxpayer Relief Act of 1997, Public Law Number 105-34,40.27shall become effective at the time they become effective for40.28federal purposes.40.29The Internal Revenue Code of 1986, as amended through40.30December 31, 1993, shall be in effect for taxable years40.31beginning after December 31, 1993.40.32The provision of section 741 of Legislation to Implement40.33Uruguay Round of General Agreement on Tariffs and Trade, Public40.34Law Number 103-465, the provisions of sections 1, 2, and 3, of40.35the Self-Employed Health Insurance Act of 1995, Public Law40.36Number 104-7, the provision of section 501(b)(2) of the Health41.1Insurance Portability and Accountability Act, Public Law Number41.2104-191, the provisions of sections 1604 and 1704(p)(1) and (2)41.3of the Small Business Job Protection Act, Public Law Number41.4104-188, and the provisions of sections 1011, 1211(b)(1), and41.51602(f) of the Taxpayer Relief Act of 1997, Public Law Number41.6105-34, shall become effective at the time they become effective41.7for federal purposes.41.8The Internal Revenue Code of 1986, as amended through41.9December 31, 1994, shall be in effect for taxable years41.10beginning after December 31, 1994.41.11The provisions of sections 1119(a), 1120, 1121, 1202(a),41.121444, 1449(b), 1602(a), 1610(a), 1613, and 1805 of the Small41.13Business Job Protection Act, Public Law Number 104-188, the41.14provision of section 511 of the Health Insurance Portability and41.15Accountability Act, Public Law Number 104-191, and the41.16provisions of sections 1174 and 1601(i)(2) of the Taxpayer41.17Relief Act of 1997, Public Law Number 105-34, shall become41.18effective at the time they become effective for federal purposes.41.19The Internal Revenue Code of 1986, as amended through March41.2022, 1996, is in effect for taxable years beginning after41.21December 31, 1995.41.22 The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 41.23 1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 41.24 1616, 1617, 1704(l), and 1704(m) of the Small Business Job 41.25 Protection Act, Public Law Number 104-188, the provisions of 41.26 Public Law Number 104-117, the provisions of sections 313(a) and 41.27 (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 1002, 41.28 1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 1087, 41.29 1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 1601(f)(5) 41.30 and (h), and 1604(d)(1) of the Taxpayer Relief Act of 1997, 41.31 Public Law Number 105-34, the provisions of section 6010 of the 41.32 Internal Revenue Service Restructuring and Reform Act of 1998, 41.33 Public Law Number 105-206, and the provisions of section 4003 of 41.34 the Omnibus Consolidated and Emergency Supplemental 41.35 Appropriations Act, 1999, Public Law Number 105-277, shall 41.36 become effective at the time they become effective for federal 42.1 purposes. 42.2 The Internal Revenue Code of 1986, as amended through 42.3 December 31, 1996, shall be in effect for taxable years 42.4 beginning after December 31, 1996. 42.5 The provisions of sections 202(a) and (b), 221(a), 225, 42.6 312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 42.7 (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 42.8 1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 42.9 1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 42.10 of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 42.11 the provisions of sections 6004, 6005, 6012, 6013, 6015, 6016, 42.12 7002, and 7003 of the Internal Revenue Service Restructuring and 42.13 Reform Act of 1998, Public Law Number 105-206,andthe 42.14 provisions of section 3001 of the Omnibus Consolidated and 42.15 Emergency Supplemental Appropriations Act, 1999, Public Law 42.16 Number 105-277, and the provisions of section 3001 of the 42.17 Miscellaneous Trade and Technical Corrections Act of 1999, 42.18 Public Law Number 106-36, shall become effective at the time 42.19 they become effective for federal purposes. 42.20 The Internal Revenue Code of 1986, as amended through 42.21 December 31, 1997, shall be in effect for taxable years 42.22 beginning after December 31, 1997. 42.23 The provisions of sections 5002, 6009, 6011, and 7001 of 42.24 the Internal Revenue Service Restructuring and Reform Act of 42.25 1998, Public Law Number 105-206, the provisions of section 9010 42.26 of the Transportation Equity Act for the 21st Century, Public 42.27 Law Number 105-178, the provisions of sections 1004, 4002, and 42.28 5301 of the Omnibus Consolidation and Emergency Supplemental 42.29 Appropriations Act, 1999, Public Law Number 105-277,andthe 42.30 provision of section 303 of the Ricky Ray Hemophilia Relief Fund 42.31 Act of 1998, Public Law Number 105-369, and the provisions of 42.32 sections 532, 534, 536, 537, and 538 of the Ticket to Work and 42.33 Work Incentives Improvement Act of 1999, Public Law Number 42.34 106-170, shall become effective at the time they become 42.35 effective for federal purposes. 42.36 The Internal Revenue Code of 1986, as amended through 43.1 December 31, 1998, shall be in effect for taxable years 43.2 beginning after December 31, 1998. 43.3 The Internal Revenue Code of 1986, as amended through 43.4 December 31, 1999, shall be in effect for taxable years 43.5 beginning after December 31, 1999. 43.6 Except as otherwise provided, references to the Internal 43.7 Revenue Code in subdivisions 19a to 19g mean the code in effect 43.8 for purposes of determining net income for the applicable year. 43.9 Sec. 3. Minnesota Statutes 1999 Supplement, section 43.10 290.01, subdivision 31, is amended to read: 43.11 Subd. 31. [INTERNAL REVENUE CODE.] Unless specifically 43.12 defined otherwise, "Internal Revenue Code" means the Internal 43.13 Revenue Code of 1986, as amended through December 31,19981999. 43.14 Sec. 4. Minnesota Statutes 1999 Supplement, section 43.15 290A.03, subdivision 15, is amended to read: 43.16 Subd. 15. [INTERNAL REVENUE CODE.] "Internal Revenue Code" 43.17 means the Internal Revenue Code of 1986, as amended through 43.18 December 31,19981999. 43.19 Sec. 5. Minnesota Statutes 1999 Supplement, section 43.20 291.005, subdivision 1, is amended to read: 43.21 Subdivision 1. Unless the context otherwise clearly 43.22 requires, the following terms used in this chapter shall have 43.23 the following meanings: 43.24 (1) "Federal gross estate" means the gross estate of a 43.25 decedent as valued and otherwise determined for federal estate 43.26 tax purposes by federal taxing authorities pursuant to the 43.27 provisions of the Internal Revenue Code. 43.28 (2) "Minnesota gross estate" means the federal gross estate 43.29 of a decedent after (a) excluding therefrom any property 43.30 included therein which has its situs outside Minnesota and (b) 43.31 including therein any property omitted from the federal gross 43.32 estate which is includable therein, has its situs in Minnesota, 43.33 and was not disclosed to federal taxing authorities. 43.34 (3) "Personal representative" means the executor, 43.35 administrator or other person appointed by the court to 43.36 administer and dispose of the property of the decedent. If 44.1 there is no executor, administrator or other person appointed, 44.2 qualified, and acting within this state, then any person in 44.3 actual or constructive possession of any property having a situs 44.4 in this state which is included in the federal gross estate of 44.5 the decedent shall be deemed to be a personal representative to 44.6 the extent of the property and the Minnesota estate tax due with 44.7 respect to the property. 44.8 (4) "Resident decedent" means an individual whose domicile 44.9 at the time of death was in Minnesota. 44.10 (5) "Nonresident decedent" means an individual whose 44.11 domicile at the time of death was not in Minnesota. 44.12 (6) "Situs of property" means, with respect to real 44.13 property, the state or country in which it is located; with 44.14 respect to tangible personal property, the state or country in 44.15 which it was normally kept or located at the time of the 44.16 decedent's death; and with respect to intangible personal 44.17 property, the state or country in which the decedent was 44.18 domiciled at death. 44.19 (7) "Commissioner" means the commissioner of revenue or any 44.20 person to whom the commissioner has delegated functions under 44.21 this chapter. 44.22 (8) "Internal Revenue Code" means the United States 44.23 Internal Revenue Code of 1986, as amended through December 31, 44.2419981999. 44.25 EFFECTIVE DATE: Sections 1, 2, 4, and 5 are effective the 44.26 day following final enactment, except that the striking of 44.27 language in section 2 is effective for tax years beginning after 44.28 December 31, 1999. Section 3 is effective for tax years 44.29 beginning after December 31, 1999. 44.30 ARTICLE 6 44.31 MOTOR VEHICLE REGISTRATION TAX 44.32 Section 1. Minnesota Statutes 1998, section 168.013, 44.33 subdivision 1a, is amended to read: 44.34 Subd. 1a. [PASSENGER AUTOMOBILE; HEARSE.] (a) On passenger 44.35 automobilesas defined in section 168.011, subdivision 7,and 44.36 hearses, except as otherwise provided, the taxshall beis $10 45.1 plus an additional tax equal to1.251.2 percent of the base 45.2 value. 45.3 (b) Subject to the classification provisionshereinin this 45.4 subdivision, "base value" means the manufacturer's suggested 45.5 retail price of the vehicle, including destination charge, using 45.6 list price information published by the manufacturer or 45.7 determined by the registrar if no suggested retail price exists,45.8and shall. Base value does not include the cost of each 45.9 accessory or item of optional equipment separately added to the 45.10 vehicle and the suggested retail price. 45.11 (c) If the manufacturer's list price information contains a 45.12 single vehicle identification number followed by various 45.13 descriptions and suggested retail prices, the registrar shall 45.14 select from those listings only the lowest price for determining 45.15 base value. 45.16 (d) If unable to determine the base value because the 45.17 vehicle is specially constructed, orfordue to any other 45.18 reason, the registrar may establishsuchthe value upon the cost 45.19 price to the purchaser or owner as evidenced by a certificate of 45.20 cost but not including Minnesota sales or use tax or any local 45.21 sales or other local tax. 45.22 (e) The registrar shall classify every vehicle in its 45.23 proper base value class as follows: 45.24 FROM TO 45.25 $ 0 $199.99 45.26 200 399.99 45.27 and thereafter, consisting of a series of classes successively 45.28 set in brackets having a spread of $200consisting of such, with 45.29 that number of classes aswillrequired to permit classification 45.30 of all vehicles. 45.31 (f) The base value for purposes of this sectionshall beis 45.32 the middle point between the extremes of its class. 45.33 (g) The registrar shall establish the base value, when new, 45.34 of every passenger automobile and hearseregistered prior to the45.35effective date of Extra Session Laws 1971, chapter 31, using 45.36 list price information published by the manufacturer or any 46.1 nationally recognized firm or association compiling such data 46.2 for the automotive industry. If unable to ascertain the base 46.3 value of any registered vehicle inthe foregoingthis manner, 46.4 the registrar may use any other available source or method. The 46.5 tax on all previously registered vehiclesshallmust be computed 46.6 upon the base value thus determined taking into account the 46.7 depreciation provisions of paragraph (h). 46.8 (h)Except as provided in paragraph (i),The annual 46.9 additional tax computed upon the base valueas provided herein46.10 of a passenger automobile or hearse, during the firstand second46.11yearsyear of vehicle lifeshall beis computed upon 100 percent 46.12 of the base value; for thethird and fourth yearssecond year, 46.13 90 percent ofsuchthat value; for thefifth and sixth years, 7546.14 third year, 85 percent of that value; for the fourth year, 75 46.15 percent ofsuchthat value; for theseventhfifth year,6065 46.16 percent ofsuchthat value; for the sixth year, 55 percent of 46.17 that value; for theeighthseventh year,4045 percent of 46.18suchthat value; for thenintheighth year,3035 percent of 46.19suchthat value; for the ninth year, 25 percent of that value; 46.20 for the tenth year, ten percent ofsuchthat value; for the 11th 46.21 and each succeeding year, the sum of$25$20. 46.22In no event shallThe annual additional tax must not be 46.23 less than$25$20. 46.24(i) The annual additional tax under paragraph (h) on a46.25motor vehicle on which the first annual tax was paid before46.26January 1, 1990, must not exceed the tax that was paid on that46.27vehicle the year before.46.28 Sec. 2. [TRANSFER.] 46.29 $75,700,000 is appropriated from the general fund to the 46.30 commissioner of finance for transfer to the highway user tax 46.31 distribution fund. 46.32 EFFECTIVE DATE: Section 1 is effective July 1, 2000, for 46.33 registrations due on or after that date. Section 2 is effective 46.34 July 1, 2000. Section 1 is repealed the day after the 2000 46.35 general election if an amendment proposed to the Minnesota 46.36 Constitution dedicating at least 15 percent of the motor vehicle 47.1 sales tax proceeds to the highway user tax distribution fund is 47.2 not adopted. 47.3 ARTICLE 7 47.4 SALES TAX 47.5 Section 1. Minnesota Statutes 1998, section 297A.01, 47.6 subdivision 3, is amended to read: 47.7 Subd. 3. A "sale" and a "purchase" includes, but is not 47.8 limited to, each of the following transactions: 47.9 (a) Any transfer of title or possession, or both, of 47.10 tangible personal property, whether absolutely or conditionally, 47.11 and the leasing of or the granting of a license to use or 47.12 consume tangible personal property other than manufactured homes 47.13 used for residential purposes for a continuous period of 30 days 47.14 or more, for a consideration in money or by exchange or barter; 47.15 (b) The production, fabrication, printing, or processing of 47.16 tangible personal property for a consideration for consumers who 47.17 furnish either directly or indirectly the materials used in the 47.18 production, fabrication, printing, or processing; 47.19 (c) The furnishing, preparing, or serving for a 47.20 consideration of food, meals, or drinks. "Sale" or "purchase" 47.21 does not include: 47.22 (1) meals or drinks served to patients, inmates, or persons 47.23 residing at hospitals, sanitariums, nursing homes, senior 47.24 citizens homes, and correctional, detention, and detoxification 47.25 facilities; 47.26 (2) meals or drinks purchased for and served exclusively to 47.27 individuals who are 60 years of age or over and their spouses or 47.28 to the handicapped and their spouses by governmental agencies, 47.29 nonprofit organizations, agencies, or churches or pursuant to 47.30 any program funded in whole or part through 42 USCA sections 47.31 3001 through 3045, wherever delivered, prepared or served; or 47.32 (3) meals and lunches served at public and private schools, 47.33 universities, or colleges. 47.34 Notwithstanding section 297A.25, subdivision 2, taxable food or 47.35 meals include, but are not limited to, the following: 47.36 (i) food or drinks sold by the retailer for immediate 48.1 consumption on the retailer's premises. Food and drinks sold 48.2 within a building or grounds which require an admission charge 48.3 for entrance are presumed to be sold for consumption on the 48.4 premises; 48.5 (ii) food or drinks prepared by the retailer for immediate 48.6 consumption either on or off the retailer's premises. For 48.7 purposes of this subdivision, "food or drinks prepared for 48.8 immediate consumption" includes any food product upon which an 48.9 act of preparation including, but not limited to, cooking, 48.10 mixing, sandwich making, blending, heating, or pouring has been 48.11 performed by the retailer so the food product may be immediately 48.12 consumed by the purchaser; 48.13 (iii) ice cream, ice milk, frozen yogurt products, or 48.14 frozen novelties sold in single or individual servings including 48.15 cones, sundaes, and snow cones. For purposes of this 48.16 subdivision, "single or individual servings" does not include 48.17 products when sold in bulk containers or bulk packaging; 48.18 (iv) soft drinks and other beverages including all 48.19 carbonated and noncarbonated beverages or drinks sold in liquid 48.20 form except beverages or drinks which contain milk or milk 48.21 products, beverages or drinks containing 15 or more percent 48.22 fruit juice, and noncarbonated and noneffervescent bottled water 48.23 sold in individual containers of one-half gallon or more in 48.24 size; 48.25 (v) gum, candy, and candy products, except when sold for 48.26 fundraising purposes by a nonprofit organization that provides 48.27 educational and social activities primarily for young people 18 48.28 years of age and under; 48.29 (vi) ice; 48.30 (vii) all food sold from vending machines, except: 48.31 (A) beverages or drinks which contain milk or milk 48.32 products; 48.33 (B) beverages or drinks which contain 15 or more percent 48.34 fruit juice; 48.35 (C) fruit and fruit products; 48.36 (D) vegetables; 49.1 (E) granola bars, breakfast bars, energy bars, and similar 49.2 items; and 49.3 (F) yogurt and pudding; 49.4 (viii) all food for immediate consumption sold from 49.5 concession stands and vehicles; 49.6 (ix) party trays; 49.7 (x) all meals and single servings of packaged snack food 49.8 sold in restaurants and bars; and 49.9 (xi) bakery products: 49.10 (A) prepared by the retailer for consumption on the 49.11 retailer's premises; 49.12 (B) sold at a place that charges admission; 49.13 (C) sold from vending machines; or 49.14 (D) sold in single or individual servings from concession 49.15 stands, vehicles, bars, and restaurants. For purposes of this 49.16 subdivision, "single or individual servings" does not include 49.17 products when sold in bulk containers or bulk packaging. 49.18 For purposes of this subdivision, "premises" means the 49.19 total space and facilities, including buildings, grounds, and 49.20 parking lots that are made available or that are available for 49.21 use by the retailer or customer for the purpose of sale or 49.22 consumption of prepared food and drinks. The premises of a 49.23 caterer is the place where the catered food or drinks are 49.24 served; 49.25 (d) The granting of the privilege of admission to places of 49.26 amusement, recreational areas, or athletic events, except a 49.27 world championship football game sponsored by the national 49.28 football league, and the privilege of having access to and the 49.29 use of amusement devices, tanning facilities, reducing salons, 49.30 steam baths, turkish baths, health clubs, and spas or athletic 49.31 facilities; 49.32 (e) The furnishing for a consideration of lodging and 49.33 related services by a hotel, rooming house, tourist court, motel 49.34 or trailer camp and of the granting of any similar license to 49.35 use real property other than the renting or leasing thereof for 49.36 a continuous period of 30 days or more; 50.1 (f) The furnishing for a consideration of electricity, gas, 50.2 water, or steam for use or consumption within this state, or 50.3 local exchange telephone service, intrastate toll service, and 50.4 interstate toll service, if that service originates from and is 50.5 charged to a telephone located in this state. Telephone service 50.6 does not include services purchased with prepaid telephone 50.7 calling cards. Telephone service includes paging services and 50.8 private communication service, as defined in United States Code, 50.9 title 26, section 4252(d), as amended through December 31, 1991, 50.10 except for private communication service purchased by an agent 50.11 acting on behalf of the state lottery. The furnishing for a 50.12 consideration of access to telephone services by a hotel to its 50.13 guests is a sale under this clause. Sales by municipal 50.14 corporations in a proprietary capacity are included in the 50.15 provisions of this clause. The furnishing of water and sewer 50.16 services for residential use shall not be considered a sale. 50.17 The sale of natural gas to be used as a fuel in vehicles 50.18 propelled by natural gas shall not be considered a sale for the 50.19 purposes of this section; 50.20 (g) The furnishing for a consideration of cable television 50.21 services, including charges for basic service, charges for 50.22 premium service, and any other charges for any other 50.23 pay-per-view, monthly, or similar television services; 50.24 (h) The furnishing for a consideration of parking services, 50.25 whether on a contractual, hourly, or other periodic basis, 50.26 except for parking at a meter; 50.27 (i) The furnishing for a consideration of services listed 50.28 in this paragraph: 50.29(i)(1) laundry and dry cleaning services including 50.30 cleaning, pressing, repairing, altering, and storing clothes, 50.31 linen services and supply, cleaning and blocking hats, and 50.32 carpet, drapery, upholstery, and industrial cleaning. Laundry 50.33 and dry cleaning services do not include services provided by 50.34 coin operated facilities operated by the customer; 50.35(ii)(2) motor vehicle washing, waxing, and cleaning 50.36 services, including services provided by coin-operated 51.1 facilities operated by the customer, and rustproofing, 51.2 undercoating, and towing of motor vehicles; 51.3(iii)(3) building and residential cleaning, maintenance, 51.4 and disinfecting and exterminating services; 51.5(iv)(4) detective services, security services, burglar, 51.6 fire alarm, and armored car services; but not including services 51.7 performed within the jurisdiction they serve by off-duty 51.8 licensed peace officers as defined in section 626.84, 51.9 subdivision 1, or services provided by a nonprofit organization 51.10 for monitoring and electronic surveillance of persons placed on 51.11 in-home detention pursuant to court order or under the direction 51.12 of the Minnesota department of corrections; 51.13(v)(5) pet grooming services; 51.14(vi)(6) lawn care, fertilizing, mowing, spraying and 51.15 sprigging services; garden planting and maintenance; tree, bush, 51.16 and shrub pruning, bracing, spraying, and surgery; indoor plant 51.17 care; tree, bush, shrub and stump removal; and tree trimming for 51.18 public utility lines. Services performed under a construction 51.19 contract for the installation of shrubbery, plants, sod, trees, 51.20 bushes, and similar items are not taxable; 51.21(vii)(7) massages, except when provided by a licensed 51.22 health care facility or professional or upon written referral 51.23 from a licensed health care facility or professional for 51.24 treatment of illness, injury, or disease; and 51.25(viii)(8) the furnishing for consideration of lodging, 51.26 board and care services for animals in kennels and other similar 51.27 arrangements, but excluding veterinary and horse boarding 51.28 services. 51.29 The services listed in this paragraph are taxable under section 51.30 297A.02 if the service is performed wholly within Minnesota or 51.31 if the service is performed partly within and partly without 51.32 Minnesota and the greater proportion of the service is performed 51.33 in Minnesota, based on the cost of performance. In applying the 51.34 provisions of this chapter, the terms "tangible personal 51.35 property" and "sales at retail" include taxable services and the 51.36 provision of taxable services, unless specifically provided 52.1 otherwise. Services performed by an employee for an employer 52.2 are not taxable under this paragraph. Services performed by a 52.3 partnership or association for another partnership or 52.4 association are not taxable under this paragraph if one of the 52.5 entities owns or controls more than 80 percent of the voting 52.6 power of the equity interest in the other entity. Services 52.7 performed between members of an affiliated group of corporations 52.8 are not taxable. For purposes of this section, "affiliated 52.9 group of corporations" includes those entities that would be 52.10 classified as a member of an affiliated group under United 52.11 States Code, title 26, section 1504, as amended through December 52.12 31, 1987, and who are eligible to file a consolidated tax return 52.13 for federal income tax purposes; 52.14 (j) A "sale" and a "purchase" includes the transfer of 52.15 computer software, meaning information and directions that 52.16 dictate the function performed by data processing equipment. A 52.17 "sale" and a "purchase" does not include the design, 52.18 development, writing, translation, fabrication, lease, or 52.19 transfer for a consideration of title or possession of a custom 52.20 computer program; and 52.21 (k) The granting of membership in a club, association, or 52.22 other organization if: 52.23 (1) the club, association, or other organization makes 52.24 available for the use of its members sports and athletic 52.25 facilities (without regard to whether a separate charge is 52.26 assessed for use of the facilities); and 52.27 (2) use of the sports and athletic facilities is not made 52.28 available to the general public on the same basis as it is made 52.29 available to members. 52.30 Granting of membership includes both one-time initiation fees 52.31 and periodic membership dues. Sports and athletic facilities 52.32 include golf courses, tennis, racquetball, handball and squash 52.33 courts, basketball and volleyball facilities, running tracks, 52.34 exercise equipment, swimming pools, and other similar athletic 52.35 or sports facilities. The provisions of this paragraph do not 52.36 apply to camps or other recreation facilities owned and operated 53.1 by an exempt organization under section 501(c)(3) of the 53.2 Internal Revenue Code of 1986, as amended through December 31, 53.3 1992, for educational and social activities for young people 53.4 primarily age 18 and under. 53.5 EFFECTIVE DATE: This section is effective for sales after 53.6 June 30, 2000. 53.7 Sec. 2. Minnesota Statutes 1998, section 297A.01, 53.8 subdivision 15, is amended to read: 53.9 Subd. 15. "Farm machinery" means new or used machinery, 53.10 equipment, implements, accessories, and contrivances used 53.11 directly and principally in the production for sale, but not 53.12 including the processing, of livestock, dairy animals, dairy 53.13 products, poultry and poultry products, fruits, vegetables, 53.14 trees, shrubs, forage, grains and bees and apiary products. 53.15 "Farm machinery" includes: 53.16 (1) machinery for the preparation, seeding or cultivation 53.17 of soil for growing agricultural crops and sod, harvesting and 53.18 threshing of agricultural products, harvesting or mowing of sod, 53.19 and certain machinery for dairy, livestock and poultry farms; 53.20 (2) barn cleaners, milking systems, grain dryers, automatic 53.21 feeding systems and similar installations, whether or not the 53.22 equipment is installed by the seller and becomes part of the 53.23 real property; 53.24 (3) irrigation equipment sold for exclusively agricultural 53.25 use, including pumps, pipe fittings, valves, sprinklers and 53.26 other equipment necessary to the operation of an irrigation 53.27 system when sold as part of an irrigation system, whether or not 53.28 the equipment is installed by the seller and becomes part of the 53.29 real property; 53.30 (4) logging equipment, including chain saws used for 53.31 commercial logging; 53.32 (5) fencing used for the containment of farmed cervidae, as 53.33 defined in section 17.451, subdivision 2; 53.34 (6) primary and backup generator units used to generate 53.35 electricity for the purpose of operating farm machinery, as 53.36 defined in this subdivision, or providing light or space heating 54.1 necessary for the production of livestock, dairy animals, dairy 54.2 products, or poultry and poultry products; and 54.3 (7) aquaculture production equipment as defined in 54.4 subdivision 19. 54.5 Repair or replacement parts for farm machinery shall not be 54.6 included in the definition of farm machinery. 54.7 Tools, shop equipment, grain bins, feed bunks, fencing 54.8 material except fencing material covered by clause (5), 54.9 communication equipment and other farm supplies shall not be 54.10 considered to be farm machinery. "Farm machinery" does not 54.11 include motor vehicles taxed under chapter 297B, snowmobiles, 54.12 snow blowers, lawn mowers except those used in the production of 54.13 sod for sale, garden-type tractors or garden tillers and the 54.14 repair and replacement parts for those vehicles and machines. 54.15 EFFECTIVE DATE: This section is effective for sales and 54.16 purchases occurring after June 30, 2000. 54.17 Sec. 3. Minnesota Statutes 1998, section 297A.15, is 54.18 amended by adding a subdivision to read: 54.19 Subd. 8. [REFUND; APPROPRIATION; COMMUTER RAIL FUEL.] If 54.20 fuel described in section 297A.25, subdivision 7, clause (6), is 54.21 purchased by the operator of the commuter rail system, a refund 54.22 equal to the taxes paid on the fuel must be paid to the operator 54.23 of the commuter rail system. The tax must be imposed and 54.24 collected as if the sales were taxable and the rate under 54.25 section 297A.02, subdivision 1, applied. An application for 54.26 refund must be submitted by the operator of the commuter rail 54.27 system and must include sufficient information to permit the 54.28 commissioner to verify the sales taxes paid. The amount 54.29 required to make the refunds is annually appropriated to the 54.30 commissioner. Interest must be paid on the refund at the rate 54.31 in section 270.76 from 60 days after the date the refund claim 54.32 is filed with the commissioner. 54.33 EFFECTIVE DATE: This section is effective for purchases 54.34 after June 30, 2000. 54.35 Sec. 4. Minnesota Statutes 1998, section 297A.25, 54.36 subdivision 5, is amended to read: 55.1 Subd. 5. [OUTSTATE TRANSPORT OR DELIVERY.] The gross 55.2 receipts from the following sales of, and storage, use, or 55.3 consumption of, tangible personal property are exempt: 55.4 (1) property which, without intermediate use, is shipped or 55.5 transported outside Minnesota by the purchaser and thereafter 55.6 used in a trade or business or is stored, processed, fabricated 55.7 or manufactured into, attached to or incorporated into other 55.8 tangible personal property transported or shipped outside 55.9 Minnesota and thereafter used in a trade or business outside 55.10 Minnesota, and which is not thereafter returned to a point 55.11 within Minnesota, except in the course of interstate commerce 55.12 (storage shall not constitute intermediate use); provided that 55.13 the property is not subject to tax in that state or country to 55.14 which it is transported for storage or use and provided further 55.15 that sales of tangible personal property to be used in other 55.16 states or countries as part of a maintenance contract shall be 55.17 specifically exempt;or55.18 (2) property which the seller delivers to a common carrier 55.19 for delivery outside Minnesota, places in the United States mail 55.20 or parcel post directed to the purchaser outside Minnesota, or 55.21 delivers to the purchaser outside Minnesota by means of the 55.22 seller's own delivery vehicles, and which is not thereafter 55.23 returned to a point within Minnesota, except in the course of 55.24 interstate commerce; or 55.25 (3) aircraft, as defined in section 360.511 and approved by 55.26 the Federal Aviation Administration, and which the seller 55.27 delivers to a purchaser outside Minnesota or which, without 55.28 intermediate use, is shipped or transported outside Minnesota by 55.29 the purchaser, but only if the purchaser is not a resident of 55.30 Minnesota and provided that the aircraft is not thereafter 55.31 returned to a point within Minnesota, except in the course of 55.32 interstate commerce or isolated and occasional use and will be 55.33 registered in another state or country upon its removal from 55.34 Minnesota; this exemption applies even if the purchaser takes 55.35 possession of the aircraft in Minnesota and uses the aircraft in 55.36 the state exclusively for training purposes for a period not to 56.1 exceed ten days prior to removing the aircraft from this state. 56.2 EFFECTIVE DATE: This section is effective for purchases 56.3 made after the date of final enactment. 56.4 Sec. 5. Minnesota Statutes 1998, section 297A.25, 56.5 subdivision 7, is amended to read: 56.6 Subd. 7. [PETROLEUM PRODUCTS.] The gross receipts from the 56.7 sale of and storage, use or consumption of the following 56.8 petroleum products are exempt: 56.9 (1) products upon which a tax has been imposed and paid 56.10 under the provisions of chapter 296A, and no refund has been or 56.11 will be allowed because the buyer used the fuel for nonhighway 56.12 use; 56.13 (2) products which are used in the improvement of 56.14 agricultural land by constructing, maintaining, and repairing 56.15 drainage ditches, tile drainage systems, grass waterways, water 56.16 impoundment, and other erosion control structures; 56.17 (3) products purchased by a transit system receiving 56.18 financial assistance under section 174.24 or 473.384; 56.19 (4) products used in a passenger snowmobile, as defined in 56.20 section 296A.01, subdivision 39, for off-highway business use as 56.21 part of the operations of a resort as provided under section 56.22 296A.16, subdivision 2, clause (2);or56.23 (5) products purchased by a state or a political 56.24 subdivision of a state for use in motor vehicles exempt from 56.25 registration under section 168.012, subdivision 1, paragraph 56.26 (b); or 56.27 (6) products purchased for use as fuel for a commuter rail 56.28 system operating under sections 174.80 to 174.90, provided that 56.29 the tax must be paid on these purchases and a refund of the tax 56.30 applied for as provided in section 297A.15, subdivision 8. 56.31 EFFECTIVE DATE: This section is effective for purchases 56.32 after June 30, 2000. 56.33 Sec. 6. Minnesota Statutes 1999 Supplement, section 56.34 297A.25, subdivision 9, is amended to read: 56.35 Subd. 9. [MATERIALS CONSUMED IN PRODUCTION.] The gross 56.36 receipts from the sale of and the storage, use, or consumption 57.1 of all materials, including chemicals, fuels, petroleum 57.2 products, lubricants, packaging materials, including returnable 57.3 containers used in packaging food and beverage products, feeds, 57.4 seeds, fertilizers, electricity, gas and steam, used or consumed 57.5 in agricultural or industrial production of personal property 57.6 intended to be sold ultimately at retail, whether or not the 57.7 item so used becomes an ingredient or constituent part of the 57.8 property produced are exempt. Seeds, trees, fertilizers, and 57.9 herbicides purchased for use by farmers in the Conservation 57.10 Reserve Program under United States Code, title 16, section 57.11 590h, as amended through December 31, 1991, the Integrated Farm 57.12 Management Program under section 1627 of Public Law Number 57.13 101-624, the Wheat and Feed Grain Programs under sections 301 to 57.14 305 and 401 to 405 of Public Law Number 101-624, and the 57.15 conservation reserve program under sections 103F.505 to 57.16 103F.531, are included in this exemption. Sales to a 57.17 veterinarian of materials used or consumed in the care, 57.18 medication, and treatment of horses and agricultural production 57.19 animals are exempt under this subdivision. Chemicals used for 57.20 cleaning food processing machinery and equipment are included in 57.21 this exemption. Materials, including chemicals, fuels, and 57.22 electricity purchased by persons engaged in agricultural or 57.23 industrial production to treat waste generated as a result of 57.24 the production process are included in this exemption. Such 57.25 production shall include, but is not limited to, research, 57.26 development, design or production of any tangible personal 57.27 property, manufacturing, processing (other than by restaurants 57.28 and consumers) of agricultural products whether vegetable or 57.29 animal, commercial fishing, refining, smelting, reducing, 57.30 brewing, distilling, printing, mining, quarrying, lumbering, 57.31 generating electricity and the production of road building 57.32 materials. Such production shall not include painting, 57.33 cleaning, repairing or similar processing of property except as 57.34 part of the original manufacturing process. Machinery, 57.35 equipment, implements, tools, accessories, appliances, 57.36 contrivances, furniture and fixtures, used in such production 58.1 and fuel, electricity, gas or steam used for space heating or 58.2 lighting, are not included within this exemption; however, 58.3 accessory tools, equipment and other short lived items, which 58.4 are separate detachable units used in producing a direct effect 58.5 upon the product, where such items have an ordinary useful life 58.6 of less than 12 months, are included within the exemption 58.7 provided herein. The following materials, tools, and equipment 58.8 used in metalcasting are exempt under this subdivision: 58.9 crucibles, thermocouple protection sheaths and tubes, stalk 58.10 tubes, refractory materials, molten metal filters and filter 58.11 boxes,anddegassing lances, and base blocks. Electricity used 58.12 to make snow for outdoor use for ski hills, ski slopes, or ski 58.13 trails is included in this exemption. Petroleum and special 58.14 fuels used in producing or generating power for propelling 58.15 ready-mixed concrete trucks on the public highways of this state 58.16 are not included in this exemption. 58.17 EFFECTIVE DATE: This section is effective for sales and 58.18 purchases made after June 30, 2000. 58.19 Sec. 7. Minnesota Statutes 1999 Supplement, section 58.20 297A.25, subdivision 11, is amended to read: 58.21 Subd. 11. [SALES TO GOVERNMENT.] The gross receipts from 58.22 all sales, including sales in which title is retained by a 58.23 seller or a vendor or is assigned to a third party under an 58.24 installment sale or lease purchase agreement under section 58.25 465.71, of tangible personal property to, and all storage, use 58.26 or consumption of such property by, the United States and its 58.27 agencies and instrumentalities, the University of Minnesota, 58.28 state universities, community colleges, technical colleges, 58.29 state academies, the Perpich center for arts education, an 58.30 instrumentality of a political subdivision that is accredited as 58.31 an optional/special function school by the North Central 58.32 Association of Colleges and Schools, school districts, public 58.33 libraries, public library systems, multicounty, multitype 58.34 library systems as defined in section 134.001, county law 58.35 libraries under chapter 134A, state agency libraries, the state 58.36 library under section 480.09, and the legislative reference 59.1 library are exempt. 59.2 As used in this subdivision, "school districts" means 59.3 public school entities and districts of every kind and nature 59.4 organized under the laws of the state of Minnesota, including, 59.5 without limitation, school districts, intermediate school 59.6 districts, education districts, service cooperatives, secondary 59.7 vocational cooperative centers, special education cooperatives, 59.8 joint purchasing cooperatives, telecommunication cooperatives, 59.9 regional management information centers, and any instrumentality 59.10 of a school district, as defined in section 471.59. 59.11 Sales exempted by this subdivision include sales under 59.12 section 297A.01, subdivision 3, paragraph (f). 59.13 Sales to hospitals and nursing homes owned and operated by 59.14 political subdivisions of the state are exempt under this 59.15 subdivision. 59.16 Sales of supplies and equipment used in the operation of an 59.17 ambulance service owned and operated by a political subdivision 59.18 of the state are exempt under this subdivision provided that the 59.19 supplies and equipment are used in the course of providing 59.20 medical care. Sales to a political subdivision of repair and 59.21 replacement parts for emergency rescue vehicles and fire trucks 59.22 and apparatus are exempt under this subdivision. 59.23 Sales to a political subdivision of machinery and 59.24 equipment, except for motor vehicles, used directly for mixed 59.25 municipal solid waste management services at a solid waste 59.26 disposal facility as defined in section 115A.03, subdivision 10, 59.27 are exempt under this subdivision. 59.28 Sales to political subdivisions of chore and homemaking 59.29 services to be provided to elderly or disabled individuals are 59.30 exempt. 59.31 Sales to a town of gravel and of machinery, equipment, and 59.32 accessories, except motor vehicles, used exclusively for road 59.33 and bridge maintenance, and leases of motor vehicles exempt from 59.34 tax under section 297B.03, clause (10), are exempt. 59.35 Sales of telephone services to the department of 59.36 administration that are used to provide telecommunications 60.1 services through the intertechnologies revolving fund are exempt 60.2 under this subdivision. 60.3 This exemption shall not apply to building, construction or 60.4 reconstruction materials purchased by a contractor or a 60.5 subcontractor as a part of a lump-sum contract or similar type 60.6 of contract with a guaranteed maximum price covering both labor 60.7 and materials for use in the construction, alteration, or repair 60.8 of a building or facility except for facilities the construction 60.9 materials of which are exempt under subdivision 65. This 60.10 exemption does not apply to construction materials purchased by 60.11 tax exempt entities or their contractors to be used in 60.12 constructing buildings or facilities which will not be used 60.13 principally by the tax exempt entities. 60.14 This exemption does not apply to the leasing of a motor 60.15 vehicle as defined in section 297B.01, subdivision 5, except for 60.16 leases entered into by the United States or its agencies or 60.17 instrumentalities. 60.18 The tax imposed on sales to political subdivisions of the 60.19 state under this section applies to all political subdivisions 60.20 other than those explicitly exempted under this subdivision, 60.21 notwithstanding section 115A.69, subdivision 6, 116A.25, 60.22 360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2, 60.23 469.127, 473.448, 473.545, or 473.608 or any other law to the 60.24 contrary enacted before 1992. 60.25 Sales exempted by this subdivision include sales made to 60.26 other states or political subdivisions of other states, if the 60.27 sale would be exempt from taxation if it occurred in that state, 60.28 but do not include sales under section 297A.01, subdivision 3, 60.29 paragraphs (c) and (e). 60.30 EFFECTIVE DATE: This section is effective for purchases 60.31 after June 30, 2000. 60.32 Sec. 8. Minnesota Statutes 1998, section 297A.25, 60.33 subdivision 65, is amended to read: 60.34 Subd. 65. [CONSTRUCTION MATERIALS FOR CORRECTIONAL 60.35 FACILITIES.] The gross receipts from the sale of and storage, 60.36 use, or consumption of construction materials and supplies are 61.1 exempt from the tax imposed under this chapter if purchased for 61.2 use in a project to construct or improve an adult or juvenile 61.3 correctional facility in a county, home rule charter city, or 61.4 statutory city, and if the project is mandated by state or 61.5 federal law, rule, or regulation. Construction materials and 61.6 supplies used in a project to construct or improve a building 61.7 used in part as an adult or juvenile correctional facility are 61.8 exempt to the extent they are used for the correctional facility 61.9 and for court facilities related to the detention and 61.10 arraignment process. The exemption applies regardless of 61.11 whether the materials and supplies are purchased by the city or 61.12 county, or by a contractor, subcontractor, or builder under a 61.13 contract with the city or county. 61.14 EFFECTIVE DATE: This section is effective for purchases 61.15 after December 31, 1998. 61.16 Sec. 9. Minnesota Statutes 1998, section 297A.25, is 61.17 amended by adding a subdivision to read: 61.18 Subd. 84. [PATENT, TRADEMARK, AND COPYRIGHT DRAWINGS AND 61.19 DOCUMENTS.] The gross receipts from sales of, and use, storage, 61.20 distribution, or consumption of, drawings, diagrams, or other 61.21 documents or copies are exempt if they are: (1) produced and 61.22 sold by patent drafters for use in patent, trademark, or 61.23 copyright applications to be filed with government agencies; or 61.24 (2) used in judicial or quasi-judicial proceedings, including 61.25 mediations and arbitrations. 61.26 EFFECTIVE DATE: This section is retroactively effective 61.27 for sales, use, storage, distribution, or consumption occurring 61.28 on or after January 1, 1993. 61.29 Sec. 10. Minnesota Statutes 1998, section 297A.25, is 61.30 amended by adding a subdivision to read: 61.31 Subd. 85. [CONSTRUCTION MATERIALS FOR QUALIFIED LOW-INCOME 61.32 HOUSING PROJECTS.] Purchases of materials and supplies used or 61.33 consumed in and equipment incorporated into the construction, 61.34 improvement, or expansion of qualified low-income housing 61.35 projects are exempt from the tax imposed under this chapter if 61.36 the owner of the qualified low-income housing project is the 62.1 public housing agency or housing and redevelopment authority of 62.2 a political subdivision. 62.3 This exemption applies regardless of whether the purchases 62.4 are made by the owner of the facility or a contractor. 62.5 For purposes of this exemption, "qualified low-income 62.6 housing project" means: 62.7 (1) a housing or mixed use project in which at least 20 62.8 percent of the residential units meet the income requirements of 62.9 low-income rental housing units as defined in section 273.126; 62.10 (2) a federally assisted low-income housing project 62.11 financed by a mortgage insured or held by the United States 62.12 Department of Housing and Urban Development under United States 62.13 Code, title 12, section 1701s, 1715l(d)(3), 1715l(d)(4), or 62.14 1715z-1; United States Code, title 42, section 1437f; the Native 62.15 American Housing Assistance and Self-Determination Act, United 62.16 States Code, title 25, section 4101 et seq.; or any similar 62.17 successor federal low-income housing program; or 62.18 (3) a project that meets the income requirements that apply 62.19 to: 62.20 (i) a qualified low-income housing project as defined in 62.21 United States Code, title 26, section 42(g); or 62.22 (ii) a project operated in compliance with Internal Revenue 62.23 Service revenue procedure 96-32. 62.24 EFFECTIVE DATE: This section is effective for sales after 62.25 June 30, 2000. 62.26 Sec. 11. Minnesota Statutes 1998, section 297A.25, is 62.27 amended by adding a subdivision to read: 62.28 Subd. 86. [MACHINERY AND EQUIPMENT FOR SKI AREAS.] The 62.29 gross receipts from the sale, storage, use, or consumption of 62.30 tangible personal property used or consumed primarily and 62.31 directly for tramways or in snowmaking or snow-grooming 62.32 operations at ski hills, ski slopes, or ski trails, including 62.33 machinery, equipment, fuel, electricity, and water additives 62.34 used in the production and maintenance of machine-made snow, are 62.35 exempt. 62.36 EFFECTIVE DATE: This section is effective for sales after 63.1 June 30, 2000. 63.2 Sec. 12. Laws 1995, chapter 264, article 2, section 44, as 63.3 amended by Laws 1996, chapter 471, article 2, section 27, and 63.4 Laws 1998, chapter 389, article 8, section 33, is amended to 63.5 read: 63.6 Sec. 44. [EFFECTIVE DATE.] 63.7 Section 1 is effective the day following final enactment. 63.8 Sections 3 and 4 are effective June 1, 1995. Section 4 is 63.9 repealed June 1, 2000. 63.10 Sections 5 to 21 and 43, paragraph (a), are effective July 63.11 1, 1995. 63.12 Sections 23, 28, 33, 40, 42, and the part of section 22 63.13 amending language in paragraph (i), clause (vii), are effective 63.14 the day following final enactment. 63.15 Sections 24 and 34 are effective for sales made after 63.16 December 31, 1996. 63.17 Section 25 is effective beginning with leases or rentals 63.18 made after June 30, 1995. 63.19 Section 26 is effective retroactively for sales after May 63.20 31, 1992. 63.21 Section 27 is effective for sales made after June 30, 1995. 63.22 Section 29 and the part of section 22 striking the language 63.23 after paragraph (h) are effective for sales after June 30, 1995. 63.24 Section 32 is effective for sales made after June 30, 1995, 63.25 and before July 1,19992000. 63.26 Sections 35 and 36 are effective for sales or transfers 63.27 made after June 30, 1995. 63.28 Section 38 is effective the day after the governing body of 63.29 the city of Winona complies with Minnesota Statutes, section 63.30 645.021, subdivision 3. 63.31 Section 39 is effective upon compliance by the Minneapolis 63.32 city council with Minnesota Statutes, section 645.021, 63.33 subdivision 3. 63.34 Section 43, paragraph (b), is effective for sales of 900 63.35 information services made after June 30, 1995. 63.36 EFFECTIVE DATE: This section is retroactively effective 64.1 for sales and purchases on or after July 1, 1999. 64.2 Sec. 13. [LOCAL TAXES ON MOTOR VEHICLES PROHIBITED.] 64.3 (a) Except as provided in paragraph (b), after June 30, 64.4 2000, no home rule charter or statutory city, county, or other 64.5 political subdivision may impose a tax on the sale, transfer, or 64.6 use of a motor vehicle that exceeds the tax authorized under 64.7 section 14. 64.8 (b) If, on March 8, 2000, a tax was in effect in a home 64.9 rule charter or statutory city, county, or other political 64.10 subdivision that exceeded the limit imposed under section 14, 64.11 the rate of that tax is reduced as follows: 64.12 (1) for sales or transfers after December 31, 2000, and 64.13 before January 1, 2002, the tax rate in effect on March 8, 2000, 64.14 is reduced by 25 percent; 64.15 (2) for sales or transfers after December 31, 2001, and 64.16 before January 1, 2003, the tax rate in effect on March 8, 2000, 64.17 is reduced by 50 percent; and 64.18 (3) for sales or transfers after December 31, 2002, and 64.19 before January 1, 2004, the tax rate in effect on March 8, 2000, 64.20 is reduced by 75 percent. 64.21 For sales or transfers after December 31, 2003, the political 64.22 subdivision may impose no tax except as authorized under section 64.23 14. 64.24 EFFECTIVE DATE: This section is effective July 1, 2000. 64.25 Sec. 14. [LOCAL EXCISE TAX ON MOTOR VEHICLES AUTHORIZED.] 64.26 Notwithstanding Minnesota Statutes, section 477A.016, or 64.27 any other provision of law, ordinance, or city charter, if a 64.28 sales and use tax on motor vehicles that was imposed by a 64.29 political subdivision is terminated under section 13, the 64.30 political subdivision may impose by ordinance an excise tax of 64.31 up to $20 per motor vehicle, as defined by ordinance, that was 64.32 purchased or acquired from any person engaged within the 64.33 territory of the political subdivision in the business of 64.34 selling motor vehicles at retail. The proceeds of the tax must 64.35 be used for the purposes for which the tax terminated under 64.36 section 13 was used. 65.1 EFFECTIVE DATE: This section is effective July 1, 2000. 65.2 Sec. 15. [DEVELOPMENT OF SALES AND USE TAX COLLECTION 65.3 SYSTEM.] 65.4 Subdivision 1. [AUTHORIZATION TO ENTER INTO MULTISTATE 65.5 DISCUSSIONS.] The commissioner of revenue may enter into 65.6 discussions with states regarding development of a multistate, 65.7 voluntary, streamlined system for sales and use tax collection 65.8 and administration. These discussions will focus on development 65.9 of a system that is capable of determining whether a transaction 65.10 is taxable or exempt, the appropriate tax rate applied to the 65.11 transaction, and the total tax due on the transaction, and shall 65.12 provide a method for collecting and remitting sales and use 65.13 taxes to the state. The system may provide compensation for the 65.14 costs of collecting and remitting sales and use taxes. 65.15 Discussions between the department and other states may result 65.16 in developing and issuing a joint request for information from 65.17 public and private potential parties. The commissioner must 65.18 publish the notices in the State Register. 65.19 Subd. 2. [LIMITED TEST AUTHORIZATION.] (a) The 65.20 commissioner may participate in a sales tax pilot project with 65.21 other states and selected businesses to test a means for 65.22 simplifying sales and use tax administration, and may enter into 65.23 joint agreements for that purpose. 65.24 (b) Agreements to participate in the test will establish 65.25 provisions for the administration, imposition, and collection of 65.26 sales and use taxes resulting in revenues paid by the taxpayer 65.27 that are the same as would be paid under existing law. 65.28 (c) Parties to the agreements are excused from complying 65.29 with the provisions of Minnesota Statutes, chapters 289A and 65.30 297A, to the extent a different procedure is required by the 65.31 agreements. 65.32 (d) Agreements authorized under this section terminate no 65.33 later than December 31, 2001. 65.34 Subd. 3. [DISCLOSURE.] Any agreements entered into under 65.35 subdivision 1 or 2 are subject to the provisions of Minnesota 65.36 Statutes, chapter 270B. 66.1 Subd. 4. [REPORT ON PROJECT.] By March 1, 2002, the 66.2 commissioner shall report to the chairs of the house of 66.3 representatives tax committee and the senate committee on 66.4 taxes. The report must describe the status of multistate 66.5 discussions conducted under subdivision 1 and, if a proposed 66.6 system has been agreed upon by participating states, must also 66.7 recommend whether the state should participate in the system. 66.8 EFFECTIVE DATE: This section is effective the day 66.9 following final enactment. 66.10 Sec. 16. [REPEALER.] 66.11 Minnesota Statutes 1998, section 297A.15, subdivision 7, is 66.12 repealed. 66.13 ARTICLE 8 66.14 SPECIAL TAXES 66.15 Section 1. Minnesota Statutes 1998, section 60A.15, 66.16 subdivision 1, is amended to read: 66.17 Subdivision 1. [DOMESTIC AND FOREIGN COMPANIES.] (a) On or 66.18 before April 1, June 1, and December 1 of each year, every 66.19 domestic and foreign company, including town and farmers' mutual 66.20 insurance companies, domestic mutual insurance companies, marine 66.21 insurance companies, health maintenance organizations, community 66.22 integrated service networks, and nonprofit health service plan 66.23 corporations, shall pay to the commissioner of revenue 66.24 installments equal to one-third of the insurer's total estimated 66.25 tax for the current year. Except as provided in paragraphs (d), 66.26 (e), (h), and (i), installments must be based on a sum equal to 66.27 two percent of the premiums described in paragraph (b). 66.28 (b) Installments under paragraph (a), (d), or (e) are 66.29 percentages of gross premiums less return premiums on all direct 66.30 business received by the insurer in this state, or by its agents 66.31 for it, in cash or otherwise, during such year. 66.32 (c) Failure of a company to make payments of at least 66.33 one-third of either (1) the total tax paid during the previous 66.34 calendar year or (2) 80 percent of the actual tax for the 66.35 current calendar year shall subject the company to the penalty 66.36 and interest provided in this section, unless the total tax for 67.1 the current tax year is $500 or less. 67.2 (d) For health maintenance organizations, nonprofit health 67.3 service plan corporations, and community integrated service 67.4 networks, the installments must be based on an amount determined 67.5 under paragraph (h) or (i). 67.6 (e) For purposes of computing installments for town and 67.7 farmers' mutual insurance companies and for mutual property 67.8 casualty companies with total assets on December 31, 1989, of 67.9 $1,600,000,000 or less, the following rates apply: 67.10 (1) for all life insurance, two percent; 67.11 (2) for town and farmers' mutual insurance companies and 67.12 for mutual property and casualty companies with total assets of 67.13 $5,000,000 or less, on all other coverages, one percent; and 67.14 (3) for mutual property and casualty companies with total 67.15 assets on December 31, 1989, of $1,600,000,000 or less, on all 67.16 other coverages, 1.26 percent. 67.17 (f) If the aggregate amount of premium tax payments under 67.18 this section and the fire marshal tax payments under section 67.19 299F.21 made during a calendar year is equal to or exceeds 67.20 $120,000, all tax payments in the subsequent calendar year must 67.21 be paid by means of a funds transfer as defined in section 67.22 336.4A-104, paragraph (a). The funds transfer payment date, as 67.23 defined in section 336.4A-401, must be on or before the date the 67.24 payment is due. If the date the payment is due is not a funds 67.25 transfer business day, as defined in section 336.4A-105, 67.26 paragraph (a), clause (4), the payment date must be on or before 67.27 the funds transfer business day next following the date the 67.28 payment is due. 67.29 (g) Premiums under medical assistance, general assistance 67.30 medical care, the MinnesotaCare program, and the Minnesota 67.31 comprehensive health insurance plan and all payments, revenues, 67.32 and reimbursements received from the federal government for 67.33 Medicare-related coverage as defined in section 62A.31, 67.34 subdivision 3, paragraph (e), are not subject to tax under this 67.35 section. 67.36 (h) For calendar years 1997, 1998, and 1999, the 68.1 installments for health maintenance organizations, community 68.2 integrated service networks, and nonprofit health service plan 68.3 corporations must be based on an amount equal to one percent of 68.4 premiums described under paragraph (b). Health maintenance 68.5 organizations, community integrated service networks, and 68.6 nonprofit health service plan corporations that have met the 68.7 cost containment goals established under section 62J.04 in the 68.8 individual and small employer market for calendar year 1996 are 68.9 exempt from payment of the tax imposed under this section for 68.10 premiums paid after March 30, 1997, and before April 1, 1998. 68.11 Health maintenance organizations, community integrated service 68.12 networks, and nonprofit health service plan corporations that 68.13 have met the cost containment goals established under section 68.14 62J.04 in the individual and small employer market for calendar 68.15 year 1997 are exempt from payment of the tax imposed under this 68.16 section for premiums paid after March 30, 1998, and before April 68.17 1, 1999. Health maintenance organizations, community integrated 68.18 service networks, and nonprofit health service plan corporations 68.19 that have met the cost containment goals established under 68.20 section 62J.04 in the individual and small employer market for 68.21 calendar year 1998 are exempt from payment of the tax imposed 68.22 under this section for premiums paid after March 30, 1999, and 68.23 before January 1, 2000. 68.24 (i) Health maintenance organizations, community integrated 68.25 service networks, and nonprofit health service plan corporations 68.26 are exempt from the tax imposed under this section on premiums 68.27 received in calendar years 2000 and 2001. 68.28(i) For calendar years after 1999,The commissioner of 68.29 finance shall determine the balance of the health care access 68.30 fund on September 1 of each year beginning September 1,199968.31 2000. If the commissioner determines that there is no 68.32 structural deficit for the next fiscal year, no tax shall be 68.33 imposed under paragraph (d) for thefollowingcalendar year 68.34 beginning six months after the fiscal year has begun. If the 68.35 commissioner determines that there will be a structural deficit 68.36 in the fund for thefollowingfiscal year, then the 69.1 commissioner, in consultation with the commissioner of revenue, 69.2 shall determine the amount needed to eliminate the structural 69.3 deficit and a tax shall be imposed under paragraph (d) for the 69.4followingcalendar year beginning six months after that fiscal 69.5 year has begun. The commissioner shall determine the rate of 69.6 the tax as either one-quarter of one percent, one-half of one 69.7 percent, three-quarters of one percent, or one percent of 69.8 premiums described in paragraph (b), whichever is the lowest of 69.9 those rates that the commissioner determines will produce 69.10 sufficient revenue to eliminate the projected structural 69.11 deficit. The commissioner of finance shall publish in the State 69.12 Register by October 1 of each year the amount of tax to be 69.13 imposed for thefollowingcalendar year.In determining the69.14structural balance of the health care access fund for fiscal69.15years 2000 and 2001, the commissioner shall disregard the69.16transfer amount from the health care access fund to the general69.17fund for expenditures associated with the services provided to69.18pregnant women and children under the age of two enrolled in the69.19MinnesotaCare program.69.20 (j) In approving the premium rates as required in sections 69.21 62L.08, subdivision 8, and 62A.65, subdivision 3, the 69.22 commissioners of health and commerce shall ensure that any 69.23 exemption from the tax as described in paragraphs (h) and (i) is 69.24 reflected in the premium rate. 69.25 EFFECTIVE DATE: This section is effective for taxes on 69.26 premiums received after December 31, 1999. 69.27 Sec. 2. Minnesota Statutes 1998, section 295.50, 69.28 subdivision 9b, is amended to read: 69.29 Subd. 9b. [PATIENT SERVICES.] (a) "Patient services" means 69.30 inpatient and outpatient services and other goods and services 69.31 provided by hospitals, surgical centers, or health care 69.32 providers. They include the following health care goods and 69.33 services provided to a patient or consumer: 69.34 (1) bed and board; 69.35 (2) nursing services and other related services; 69.36 (3) use of hospitals, surgical centers, or health care 70.1 provider facilities; 70.2 (4) medical social services; 70.3 (5) drugs, biologicals, supplies, appliances, and 70.4 equipment; 70.5 (6) other diagnostic or therapeutic items or services; 70.6 (7) medical or surgical services; 70.7 (8) items and services furnished to ambulatory patients not 70.8 requiring emergency care; 70.9 (9) emergency services; and 70.10 (10) covered services listed in section 256B.0625 and in 70.11 Minnesota Rules, parts 9505.0170 to 9505.0475. 70.12 (b) "Patient services" does not include: 70.13 (1) services provided to nursing homes licensed under 70.14 chapter 144A; and 70.15 (2) examinations for purposes of utilization reviews, 70.16 insurance claims or eligibility, litigation, and employment, 70.17 including reviews of medical records for those purposes. 70.18 EFFECTIVE DATE: This section is effective for payments 70.19 received on or after January 1, 2000. 70.20 Sec. 3. Minnesota Statutes 1999 Supplement, section 70.21 295.53, subdivision 1, is amended to read: 70.22 Subdivision 1. [EXEMPTIONS.] (a) The following payments 70.23 are excluded from the gross revenues subject to the hospital, 70.24 surgical center, or health care provider taxes under sections 70.25 295.50 to 295.57: 70.26 (1) payments received for services provided under the 70.27 Medicare program, including payments received from the 70.28 government, and organizations governed by sections 1833 and 1876 70.29 of title XVIII of the federal Social Security Act, United States 70.30 Code, title 42, section 1395, and enrollee deductibles, 70.31 coinsurance, and copayments, whether paid by the Medicare 70.32 enrollee or by a Medicare supplemental coverage as defined in 70.33 section 62A.011, subdivision 3, clause (10). Payments for 70.34 services not covered by Medicare are taxable; 70.35 (2) medical assistance payments including payments received 70.36 directly from the government or from a prepaid plan; 71.1 (3) payments received for home health care services; 71.2 (4) payments received from hospitals or surgical centers 71.3 for goods and services on which liability for tax is imposed 71.4 under section 295.52 or the source of funds for the payment is 71.5 exempt under clause (1), (2), (7), (8), (10),or(13), or (20); 71.6 (5) payments received from health care providers for goods 71.7 and services on which liability for tax is imposed under this 71.8 chapter or the source of funds for the payment is exempt under 71.9 clause (1), (2), (7), (8), (10),or(13), or (20); 71.10 (6) amounts paid for legend drugs, other than nutritional 71.11 products, to a wholesale drug distributor who is subject to tax 71.12 under section 295.52, subdivision 3, reduced by reimbursements 71.13 received for legend drugs under clauses (1), (2), (7), and (8); 71.14 (7) payments received under the general assistance medical 71.15 care program including payments received directly from the 71.16 government or from a prepaid plan; 71.17 (8) payments received for providing services under the 71.18 MinnesotaCare program including payments received directly from 71.19 the government or from a prepaid plan and enrollee deductibles, 71.20 coinsurance, and copayments. For purposes of this clause, 71.21 coinsurance means the portion of payment that the enrollee is 71.22 required to pay for the covered service; 71.23 (9) payments received by a health care provider or the 71.24 wholly owned subsidiary of a health care provider for care 71.25 provided outside Minnesota; 71.26 (10) payments received from the chemical dependency fund 71.27 under chapter 254B; 71.28 (11) payments received in the nature of charitable 71.29 donations that are not designated for providing patient services 71.30 to a specific individual or group; 71.31 (12) payments received for providing patient services 71.32 incurred through a formal program of health care research 71.33 conducted in conformity with federal regulations governing 71.34 research on human subjects. Payments received from patients or 71.35 from other persons paying on behalf of the patients are subject 71.36 to tax; 72.1 (13) payments received from any governmental agency for 72.2 services benefiting the public, not including payments made by 72.3 the government in its capacity as an employer or insurer; 72.4 (14) payments received for services provided by community 72.5 residential mental health facilities licensed under Minnesota 72.6 Rules, parts 9520.0500 to 9520.0690, community support programs 72.7 and family community support programs approved under Minnesota 72.8 Rules, parts 9535.1700 to 9535.1760, and community mental health 72.9 centers as defined in section 245.62, subdivision 2; 72.10 (15) government payments received by a regional treatment 72.11 center; 72.12 (16) payments received for hospice care services; 72.13 (17) payments received by a health care provider for 72.14 hearing aids and related equipment or prescription eyewear 72.15 delivered outside of Minnesota; 72.16 (18) payments received by an educational institution from 72.17 student tuition, student activity fees, health care service 72.18 fees, government appropriations, donations, or grants. Fee for 72.19 service payments and payments for extended coverage are taxable; 72.20 (19) payments received for services provided by: assisted 72.21 living programs and congregate housing programs; and 72.22(20) payments received from nursing homes licensed under72.23chapter 144A for services provided to a nursing home; and72.24(21) payments received for examinations for purposes of72.25utilization reviews, insurance claims or eligibility,72.26litigation, and employment, including reviews of medical records72.27for those purposes.72.28 (20) payments received under the federal Employees Health 72.29 Benefits Act, United States Code, title 5, section 8909(f), as 72.30 amended by the Omnibus Reconciliation Act of 1990. 72.31 (b) Payments received by wholesale drug distributors for 72.32 legend drugs sold directly to veterinarians or veterinary bulk 72.33 purchasing organizations are excluded from the gross revenues 72.34 subject to the wholesale drug distributor tax under sections 72.35 295.50 to 295.59. 72.36 EFFECTIVE DATE: This section is effective for payments 73.1 received on or after January 1, 2000. 73.2 Sec. 4. Minnesota Statutes 1999 Supplement, section 73.3 297E.02, subdivision 1, is amended to read: 73.4 Subdivision 1. [IMPOSITION.] A tax is imposed on all 73.5 lawful gambling other than (1) pull-tab deals or games; (2) 73.6 tipboard deals or games; and (3) items listed in section 73.7 297E.01, subdivision 8, clauses (4) and (5), at the rate of973.8 8.75 percent on the gross receipts as defined in section 73.9 297E.01, subdivision 8, less prizes actually paid. The tax 73.10 imposed by this subdivision is in lieu of the tax imposed by 73.11 section 297A.02 and all local taxes and license fees except a 73.12 fee authorized under section 349.16, subdivision 8, or a tax 73.13 authorized under subdivision 5. 73.14 The tax imposed under this subdivision is payable by the 73.15 organization or party conducting, directly or indirectly, the 73.16 gambling. 73.17 EFFECTIVE DATE: This section is effective July 1, 2000. 73.18 Sec. 5. Minnesota Statutes 1999 Supplement, section 73.19 297E.02, subdivision 4, is amended to read: 73.20 Subd. 4. [PULL-TAB AND TIPBOARD TAX.] (a) A tax is imposed 73.21 on the sale of each deal of pull-tabs and tipboards sold by a 73.22 distributor. The rate of the tax is1.81.75 percent of the 73.23 ideal gross of the pull-tab or tipboard deal. The sales tax 73.24 imposed by chapter 297A on the sale of the pull-tabs and 73.25 tipboards by the distributor is imposed on the retail sales 73.26 price less the tax imposed by this subdivision. The retail sale 73.27 of pull-tabs or tipboards by the organization is exempt from 73.28 taxes imposed by chapter 297A and is exempt from all local taxes 73.29 and license fees except a fee authorized under section 349.16, 73.30 subdivision 8. 73.31 (b) The liability for the tax imposed by this section is 73.32 incurred when the pull-tabs and tipboards are delivered by the 73.33 distributor to the customer or to a common or contract carrier 73.34 for delivery to the customer, or when received by the customer's 73.35 authorized representative at the distributor's place of 73.36 business, regardless of the distributor's method of accounting 74.1 or the terms of the sale. 74.2 The tax imposed by this subdivision is imposed on all sales 74.3 of pull-tabs and tipboards, except the following: 74.4 (1) sales to the governing body of an Indian tribal 74.5 organization for use on an Indian reservation; 74.6 (2) sales to distributors licensed under the laws of 74.7 another state or of a province of Canada, as long as all 74.8 statutory and regulatory requirements are met in the other state 74.9 or province; 74.10 (3) sales of promotional tickets as defined in section 74.11 349.12; and 74.12 (4) pull-tabs and tipboards sold to an organization that 74.13 sells pull-tabs and tipboards under the exemption from licensing 74.14 in section 349.166, subdivision 2. A distributor shall require 74.15 an organization conducting exempt gambling to show proof of its 74.16 exempt status before making a tax-exempt sale of pull-tabs or 74.17 tipboards to the organization. A distributor shall identify, on 74.18 all reports submitted to the commissioner, all sales of 74.19 pull-tabs and tipboards that are exempt from tax under this 74.20 subdivision. 74.21 (c) A distributor having a liability of $120,000 or more 74.22 during a fiscal year ending June 30 must remit all liabilities 74.23 in the subsequent calendar year by a funds transfer as defined 74.24 in section 336.4A-104, paragraph (a). The funds transfer 74.25 payment date, as defined in section 336.4A-401, must be on or 74.26 before the date the tax is due. If the date the tax is due is 74.27 not a funds transfer business day, as defined in section 74.28 336.4A-105, paragraph (a), clause (4), the payment date must be 74.29 on or before the funds transfer business day next following the 74.30 date the tax is due. 74.31 (d) Any customer who purchases deals of pull-tabs or 74.32 tipboards from a distributor may file an annual claim for a 74.33 refund or credit of taxes paid pursuant to this subdivision for 74.34 unsold pull-tab and tipboard tickets. The claim must be filed 74.35 with the commissioner on a form prescribed by the commissioner 74.36 by March 20 of the year following the calendar year for which 75.1 the refund is claimed. The refund must be filed as part of the 75.2 customer's February monthly return. The refund or credit is 75.3 equal to1.81.75 percent of the face value of the unsold 75.4 pull-tab or tipboard tickets, provided that the refund or credit 75.5 will be1.851.775 percent of the face value of the unsold 75.6 pull-tab or tipboard tickets for claims for a refund or credit 75.7 of taxes filed on the February20002001 monthly return. The 75.8 refund claimed will be applied as a credit against tax owing 75.9 under this chapter on the February monthly return. If the 75.10 refund claimed exceeds the tax owing on the February monthly 75.11 return, that amount will be refunded. The amount refunded will 75.12 bear interest pursuant to section 270.76 from 90 days after the 75.13 claim is filed. 75.14 EFFECTIVE DATE: This section is effective July 1, 2000. 75.15 Sec. 6. Minnesota Statutes 1999 Supplement, section 75.16 297E.02, subdivision 6, is amended to read: 75.17 Subd. 6. [COMBINED RECEIPTS TAX.] In addition to the taxes 75.18 imposed under subdivisions 1 and 4, a tax is imposed on the 75.19 combined receipts of the organization. As used in this section, 75.20 "combined receipts" is the sum of the organization's gross 75.21 receipts from lawful gambling less gross receipts directly 75.22 derived from the conduct of bingo, raffles, and paddlewheels, as 75.23 defined in section 297E.01, subdivision 8, for the fiscal year. 75.24 The combined receipts of an organization are subject to a tax 75.25 computed according to the following schedule: 75.26 If the combined receipts for the The tax is: 75.27 fiscal year are: 75.28 Not over $500,000 zero 75.29 Over $500,000, but not over 75.30 $700,0001.81.75 percent of the 75.31 amount over $500,000, but 75.32 not over $700,000 75.33 Over $700,000, but not over 75.34 $900,000$3,600$3,500 plus3.675.35 3.5 percent of the amount 75.36 over $700,000, but 76.1 not over $900,000 76.2 Over $900,000$10,800$10,500 plus5.476.3 5.25 percent of the 76.4 amount over $900,000 76.5 EFFECTIVE DATE: This section is effective July 1, 2000. 76.6 Sec. 7. Minnesota Statutes 1998, section 297F.01, 76.7 subdivision 17, is amended to read: 76.8 Subd. 17. [STAMP.] "Stamp" means the adhesive stamp 76.9 supplied by the commissioner of revenue for use on cigarette 76.10 packages or any other indicia adopted by the commissioner to 76.11 indicate that the tax has been paid. 76.12 EFFECTIVE DATE: This section is effective the day 76.13 following final enactment. 76.14 Sec. 8. Minnesota Statutes 1998, section 297F.08, 76.15 subdivision 2, is amended to read: 76.16 Subd. 2. [TAX DUE; CIGARETTES.] Notwithstanding any other 76.17 provisions of this chapter, the tax due on the return is based 76.18 upon actualheat-appliedstamps purchased during the reporting 76.19 period. 76.20 EFFECTIVE DATE: This section is effective the day 76.21 following final enactment. 76.22 Sec. 9. Minnesota Statutes 1998, section 297F.08, 76.23 subdivision 4, is amended to read: 76.24 Subd. 4. [STAMPS; DESIGN, PRINTING.] The commissioner 76.25 shall adopt the design of two stamps. One stamp must be 76.26 designed for application to cigarette packages destined for 76.27 retail sale on an Indian reservation which is a party to an 76.28 agreement under section 270.60, subdivision 2, and only to those 76.29 packages. A second stamp must be designed for all other 76.30 cigarette packages subject to the provisions of this chapter. 76.31 The commissioner shall arrange for the printing of stamps in 76.32 such amounts and denominations as the commissioner deems 76.33 necessary. All stamps prescribed by the commissioner shall be 76.34 designed and furnished so as to permit identification of the 76.35 distributor that affixed the stamp to the particular package of 76.36 cigarettes, by means of a serial number or other mark on the 77.1 stamp. The commissioner shall maintain for not less than three 77.2 years information identifying which distributor affixed the tax 77.3 stamp to each package of cigarettes, which information shall not 77.4 be confidential or exempt from disclosure to the public. 77.5 EFFECTIVE DATE: This section is effective the day 77.6 following final enactment. 77.7 Sec. 10. Minnesota Statutes 1998, section 297F.08, 77.8 subdivision 5, is amended to read: 77.9 Subd. 5. [DEPOSIT OF PROCEEDS.] The commissioner shall use 77.10 the amounts appropriated by law to purchaseheat-appliedstamps 77.11 for resale. The commissioner shall charge the purchasers for 77.12 the costs of the stamps along with the tax value plus shipping 77.13 costs. The costs recovered along with shipping costs must be 77.14 deposited into the general fund. 77.15 EFFECTIVE DATE: This section is effective the day 77.16 following final enactment. 77.17 Sec. 11. Minnesota Statutes 1998, section 297F.08, 77.18 subdivision 8, is amended to read: 77.19 Subd. 8. [SALE OF STAMPS.] The commissioner may sell 77.20heat-appliedstamps on a credit basis under conditions 77.21 prescribed by the commissioner. The commissioner shall sell the 77.22 stamps at a price which includes the tax after giving effect to 77.23 the discount provided in subdivision 7. The commissioner shall 77.24 recover the actual costs of the stamps from the distributor. 77.25 The commissioner shall annually establish the maximum amount of 77.26heat-appliedstamps that may be purchased each month. 77.27 EFFECTIVE DATE: This section is effective the day 77.28 following final enactment. 77.29 Sec. 12. Minnesota Statutes 1999 Supplement, section 77.30 297F.08, subdivision 8a, is amended to read: 77.31 Subd. 8a. [REVOLVING ACCOUNT.] Aheat-appliedcigarette 77.32 tax stamp revolving account is created. The commissioner shall 77.33 use the amounts in this fund to purchaseheat-appliedstamps for 77.34 resale. The commissioner shall charge distributors for the tax 77.35 value of the stamps they receive along with the commissioner's 77.36 cost to purchase the stamps and ship them to the distributor. 78.1 The stamp purchase and shipping costs recovered must be credited 78.2 to the revolving account and are appropriated to the 78.3 commissioner for the further purchases and shipping costs. The 78.4 revolving account is initially funded by a $40,000 transfer from 78.5 the department of revenue. 78.6 EFFECTIVE DATE: This section is effective the day 78.7 following final enactment. 78.8 Sec. 13. Minnesota Statutes 1998, section 297F.08, 78.9 subdivision 9, is amended to read: 78.10 Subd. 9. [TAX STAMPING MACHINES.] The commissioner shall 78.11 require any person licensed as a distributor to stamp packages 78.12 with aheat-appliedtax stamping machine, approved by the 78.13 commissioner, which shall be provided by the distributor. The 78.14 commissioner shall also supervise and check the operation of the 78.15 machines and shall provide for the payment of the tax on any 78.16 package so stamped, subject to the discount provided in 78.17 subdivision 7. If the commissioner finds that a stamping 78.18 machine is not affixing a legible stamp on the package, the 78.19 commissioner may order the distributor to immediately cease the 78.20 stamping process until the machine is functioning properly. 78.21 EFFECTIVE DATE: This section is effective the day 78.22 following final enactment. 78.23 Sec. 14. [297F.085] [CIGARETTE ENFORCEMENT.] 78.24 Subdivision 1. [PROHIBITIONS.] (a) It is unlawful for any 78.25 person to sell or distribute in this state; to acquire, hold, 78.26 own, possess, or transport, for sale or distribution in this 78.27 state; or to import, or cause to be imported, into this state 78.28 for sale or distribution in this state, any cigarettes: 78.29 (1) the package of which: 78.30 (i) bears any statement, label, stamp, sticker, or notice 78.31 indicating that the manufacturer did not intend the cigarettes 78.32 to be sold, distributed, or used in the United States, 78.33 including, but not limited to, labels stating "For Export Only," 78.34 "U.S. Tax-Exempt," "For Use Outside U.S.," or similar wording; 78.35 or 78.36 (ii) does not comply with all requirements imposed by or 79.1 pursuant to federal law regarding warnings and other information 79.2 on packages of cigarettes manufactured, packaged, or imported 79.3 for sale, distribution, or use in the United States, including, 79.4 but not limited to, the precise warning labels specified in the 79.5 federal Cigarette Labeling and Advertising Act, United States 79.6 Code, title 15, section 1333; 79.7 (2) imported into the United States in violation of United 79.8 States Code, title 26, section 5754, or any other federal law or 79.9 regulation; 79.10 (3) that the person otherwise knows or has reason to know 79.11 the manufacturer did not intend to be sold, distributed, or used 79.12 in the United States; or 79.13 (4) for which there has not been submitted to the secretary 79.14 of the United States Department of Health and Human Services the 79.15 list or lists of the ingredients added to tobacco in the 79.16 manufacture of the cigarettes required by the federal Cigarette 79.17 Labeling and Advertising Act, United States Code, title 15, 79.18 section 1335a. 79.19 (b) It is unlawful for any person to alter the package of 79.20 any cigarettes, prior to sale or distribution to the ultimate 79.21 consumer, so as to remove, conceal, or obscure: 79.22 (1) any statement, label, stamp, sticker, or notice 79.23 described in paragraph (a), clause (1), item (i); or 79.24 (2) any health warning that is not specified in, or does 79.25 not conform with the requirements of the federal Cigarette 79.26 Labeling and Advertising Act, United States Code, title 15, 79.27 section 1333. 79.28 It is unlawful for any person to affix any stamp required under 79.29 this chapter to the package of any cigarettes described in 79.30 paragraph (a) or altered in violation of paragraph (b). 79.31 Subd. 2. [ENFORCEMENT.] (a) The commissioner may revoke or 79.32 suspend the license or licenses of any distributor or subjobber 79.33 for a violation of subdivision 1 or any implementing rule 79.34 promulgated by the commissioner pursuant to the procedures set 79.35 forth in section 297F.04. 79.36 (b) A municipal or county authority that has licensed a 80.1 retailer under section 461.12, subdivision 1, may impose 80.2 administrative sanctions for violations of subdivision 1, 80.3 including suspending or revoking the retailer's license, 80.4 pursuant to the procedures in section 461.12, subdivision 7. 80.5 (c) Cigarettes acquired, held, owned, possessed, 80.6 transported in, imported into, or sold or distributed in this 80.7 state in violation of subdivision 1 shall be deemed contraband 80.8 under section 297F.21, and are subject to seizure and forfeiture 80.9 as provided therein; provided, however, that all such cigarettes 80.10 so seized and forfeited shall be destroyed. Such cigarettes 80.11 shall be deemed contraband whether or not the violation of 80.12 subdivision 1 is knowing. 80.13 (d) In addition to any other remedy provided by law, any 80.14 person that sustains economic damages or commercial injury as a 80.15 result of any violation of subdivision 1 may bring an action for 80.16 appropriate injunctive or other equitable relief, actual 80.17 damages, if any, sustained by reason of the violation, and, as 80.18 determined by the court, interest on the damages from the date 80.19 of the complaint, taxable costs, and reasonable attorney fees. 80.20 If the trier of fact finds that the violation is egregious, it 80.21 may increase recovery to an amount not in excess of three times 80.22 the actual damages sustained by reason of the violation. 80.23 Subd. 3. [UNFAIR TRADE PRACTICES.] A violation of 80.24 subdivision 1 constitutes an unlawful trade practice as provided 80.25 in section 325D.13, and, in addition to any remedies or 80.26 penalties set forth in this section, is subject to any remedies 80.27 or penalties available for a violation of that section. 80.28 Subd. 4. [UNFAIR CIGARETTE SALES.] For purposes of 80.29 sections 325D.30 to 325D.42, cigarettes imported or reimported 80.30 into the United States for sale or distribution under any trade 80.31 name, trade dress, or trademark that is the same as, or is 80.32 confusingly similar to, any trade name, trade dress, or 80.33 trademark used for cigarettes manufactured in the United States 80.34 for sale or distribution in the United States are presumed to 80.35 have been purchased outside of the ordinary channels of trade. 80.36 Subd. 5. [APPLICABILITY.] This section does not apply to 81.1 cigarettes imported or reimported into the United States for 81.2 personal use and cigarettes sold or intended to be sold as 81.3 duty-free merchandise by a duty-free sales enterprise in 81.4 accordance with the provisions of United States Code, title 19, 81.5 section 1555(b), and any implementing regulations; provided, 81.6 however, that this section shall apply to any such cigarettes 81.7 that are brought back into the customs territory for resale 81.8 within the customs territory. 81.9 Subd. 6. [VIOLATION.] A violation of this section is a 81.10 misdemeanor. 81.11 Sec. 15. Minnesota Statutes 1998, section 297F.21, 81.12 subdivision 1, is amended to read: 81.13 Subdivision 1. [CONTRABAND DEFINED.] The following are 81.14 declared to be contraband and therefore subject to civil and 81.15 criminal penalties under this chapter: 81.16 (a) Cigarette packages which do not have stamps affixed to 81.17 them as provided in this chapter, including but not limited to 81.18 (i) packages with illegible stamps and packages with stamps that 81.19 are not complete or whole even if the stamps are legible, and 81.20 (ii) all devices for the vending of cigarettes in which packages 81.21 as defined in item (i) are found, including all contents 81.22 contained within the devices. 81.23 (b) A device for the vending of cigarettes and all packages 81.24 of cigarettes, where the device does not afford at least partial 81.25 visibility of contents. Where any package exposed to view does 81.26 not carry the stamp required by this chapter, it shall be 81.27 presumed that all packages contained in the device are unstamped 81.28 and contraband. 81.29 (c) A device for the vending of cigarettes to which the 81.30 commissioner or authorized agents have been denied access for 81.31 the inspection of contents. In lieu of seizure, the 81.32 commissioner or an agent may seal the device to prevent its use 81.33 until inspection of contents is permitted. 81.34 (d) A device for the vending of cigarettes which does not 81.35 carry the name and address of the owner, plainly marked and 81.36 visible from the front of the machine. 82.1 (e) A device including, but not limited to, motor vehicles, 82.2 trailers, snowmobiles, airplanes, and boats used with the 82.3 knowledge of the owner or of a person operating with the consent 82.4 of the owner for the storage or transportation of more than 82.5 5,000 cigarettes which are contraband under this subdivision. 82.6 When cigarettes are being transported in the course of 82.7 interstate commerce, or are in movement from either a public 82.8 warehouse to a distributor upon orders from a manufacturer or 82.9 distributor, or from one distributor to another, the cigarettes 82.10 are not contraband, notwithstanding the provisions of clause (a). 82.11 (f) Cigarette packages or tobacco products obtained from an 82.12 unlicensed seller. 82.13 (g) Cigarette packages offered for sale or held as 82.14 inventory in violation of section 297F.20, subdivision 7. 82.15 (h) Tobacco products on which the tax has not been paid by 82.16 a licensed distributor. 82.17 (i) Any cigarette packages or tobacco products offered for 82.18 sale or held as inventory for which there is not an invoice from 82.19 a licensed seller as required under section 297F.13, subdivision 82.20 4. 82.21 (j) Cigarette packages which have been imported into the 82.22 United States in violation of United States Code, title 26, 82.23 section 5754. All cigarettes held in violation of that section 82.24 shall be presumed to have entered the United States after 82.25 December 31, 1999, in the absence of proof to the contrary. 82.26 EFFECTIVE DATE: This section, paragraph (i), is effective 82.27 July 1, 2000, and this section, paragraph (j), is effective the 82.28 day following final enactment. 82.29 Sec. 16. Minnesota Statutes 1998, section 297F.21, 82.30 subdivision 3, is amended to read: 82.31 Subd. 3. [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 82.32 DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the 82.33 seizure of any alleged contraband, the person making the seizure 82.34 shall make available an inventory of the property seized to the 82.35 person from whom the seizure was made, if known, and file a copy 82.36 with the commissioner. Within ten days after the date of 83.1 service of the inventory, the person from whom the property was 83.2 seized or any person claiming an interest in the property may 83.3 file with the commissioner a demand for a judicial determination 83.4 of the question as to whether the property was lawfully subject 83.5 to seizure and forfeiture. The commissioner, within 60 days, 83.6 shall institute an action in the district court of the county 83.7 where the seizure was made to determine the issue of 83.8 forfeiture. The court shall decide whether the alleged 83.9 contraband is contraband, as defined in subdivision 1. 83.10 (b) The action must be brought in the name of the state and 83.11 must be prosecuted by the county attorney or by the attorney 83.12 general. The court shall hear the action without a jury and 83.13 shall try and determine the issues of fact and law involved. 83.14 (c) When a judgment of forfeiture is entered, the 83.15 commissioner may, unless the judgment is stayed pending an 83.16 appeal, either: 83.17 (1) deliver the forfeited property to the commissioner of 83.18 human services for use by patients in state institutions; 83.19 (2) cause it to be destroyed; or 83.20 (3) cause it to be sold at public auction as provided by 83.21 law. 83.22 (d) If a demand for judicial determination is made and no 83.23 action commenced as provided in this subdivision, the property 83.24 must be released by the commissioner and returned to the person 83.25 entitled to it. If no demand is made, the property seized is 83.26 considered forfeited to the state by operation of law and may be 83.27 disposed of by the commissioner as provided in the case of a 83.28 judgment of forfeiture.When the commissioner is satisfied that83.29a person from whom property is seized was acting in good faith83.30and without intent to evade the tax imposed by this chapter, the83.31commissioner shall release the property seized without further83.32legal proceedings.83.33 EFFECTIVE DATE: This section is effective for alleged 83.34 contraband seized on or after the day following final enactment. 83.35 ARTICLE 9 83.36 PROPERTY TAXES AND AIDS 84.1 Section 1. Minnesota Statutes 1998, section 97A.061, is 84.2 amended by adding a subdivision to read: 84.3 Subd. 4. [OFFSET OF PAYMENTS.] Payments to a county or 84.4 town under this section must be reduced by the amount of payment 84.5 to that county or town under section 477A.12 for the same lands 84.6 in the same year. 84.7 EFFECTIVE DATE: This section is effective for payments 84.8 made in calendar year 2001 and thereafter. 84.9 Sec. 2. Minnesota Statutes 1998, section 97A.061, is 84.10 amended by adding a subdivision to read: 84.11 Subd. 5. [ALLOCATION OF PAYMENTS.] Notwithstanding section 84.12 477A.14, the amounts paid to a county under section 477A.14 for 84.13 lands that are also subject to payment under this section shall 84.14 be allocated within the county in accordance with subdivision 2. 84.15 EFFECTIVE DATE: This section is effective for payments 84.16 made in calendar year 2001 and thereafter. 84.17 Sec. 3. Minnesota Statutes 1999 Supplement, section 84.18 123B.54, is amended to read: 84.19 123B.54 [DEBT SERVICE APPROPRIATION.] 84.20 (a) $33,165,000 in fiscal year 2000, $32,057,000 in fiscal 84.21 year 2001, and $31,280,000 in fiscal year 2002 and each year 84.22 thereafter is appropriated from the general fund to the 84.23 commissioner of children, families, and learning for payment of 84.24 debt service equalization aid under section 123B.53. The 2002 84.25 appropriation includes $3,201,000 for 2001 and $29,079,000 for 84.26 2002. 84.27 (b) The appropriations in paragraph (a) must be reduced by 84.28 the amount of any money specifically appropriated for the same 84.29 purpose in any year from any state fund. 84.30 (c) In addition to any other money specifically 84.31 appropriated for this section, $10,000,000 is appropriated from 84.32 the general fund to the commissioner of children, families, and 84.33 learning each year beginning in fiscal year 2002 for the 84.34 purposes of this section. This represents 100 percent of the 84.35 aid entitlement. 84.36 Sec. 4. Minnesota Statutes 1999 Supplement, section 85.1 272.02, subdivision 39, is amended to read: 85.2 Subd. 39. [ECONOMIC DEVELOPMENT; PUBLIC PURPOSE.] The 85.3 holding of property by a political subdivision of the state for 85.4 later resale for economic development purposes shall be 85.5 considered a public purpose in accordance with subdivision 8 for 85.6 a period not to exceed eight years for property located either: 85.7 (1) in the metropolitan area as defined in section 473.121; 85.8 or 85.9 (2) in a city of over 10,000 population located outside of 85.10 the metropolitan area, 85.11 and 15 years in the remainder of the state. 85.12 The holding of property by a political subdivision of the 85.13 state for later resale (1) which is purchased or held for 85.14 housing purposes, or (2) which meets the conditions described in 85.15 section 469.174, subdivision 10, shall be considered a public 85.16 purpose in accordance with subdivision 8. 85.17 The governing body of the political subdivision which 85.18 acquires property which is subject to this subdivision shall 85.19 after the purchase of the property certify to the city or county 85.20 assessor whether the property is held for economic development 85.21 purposes or housing purposes, or whether it meets the conditions 85.22 of section 469.174, subdivision 10. If the property is acquired 85.23 for economic development purposes and buildings or other 85.24 improvements are constructed after acquisition of the property, 85.25 and if more than one-half of the floor space of the buildings or 85.26 improvements which is available for lease to or use by a private 85.27 individual, corporation, or other entity is leased to or 85.28 otherwise used by a private individual, corporation, or other 85.29 entity the provisions of this subdivision shall not apply to the 85.30 property. This subdivision shall not create an exemption from 85.31 section 272.01, subdivision 2; 272.68; 273.19; or 469.040, 85.32 subdivision 3; or other provision of law providing for the 85.33 taxation of or for payments in lieu of taxes for publicly held 85.34 property which is leased, loaned, or otherwise made available 85.35 and used by a private person. 85.36 EFFECTIVE DATE: This section is effective for taxes levied 86.1 in 2000, payable in 2001, and thereafter. 86.2 Sec. 5. Minnesota Statutes 1999 Supplement, section 86.3 272.02, is amended by adding a subdivision to read: 86.4 Subd. 44. [ELECTRIC GENERATION FACILITY PERSONAL 86.5 PROPERTY.] Notwithstanding subdivision 9, clause (a), attached 86.6 machinery and other personal property which is part of a 86.7 simple-cycle combustion-turbine electric generation facility 86.8 that exceeds 250 megawatts of installed capacity and that meets 86.9 the requirements of this subdivision is exempt. At the time of 86.10 construction, the facility must: 86.11 (1) utilize natural gas as a primary fuel; 86.12 (2) be located within 20 miles of parallel existing 16-inch 86.13 and 12-inch (outside diameter) natural gas pipelines and a 86.14 345-kilovolt high-voltage electric transmission line; and 86.15 (3) be designed to provide peaking, emergency backup, or 86.16 contingency services, and have received a certificate of need 86.17 pursuant to section 216B.243 demonstrating demand for its 86.18 capacity. 86.19 Construction of the facility must be commenced after January 1, 86.20 2000, and before January 1, 2004. Property eligible for this 86.21 exemption does not include electric transmission lines and 86.22 interconnections or gas pipelines and interconnections 86.23 appurtenant to the property or the facility. 86.24 EFFECTIVE DATE: This section is effective for taxes levied 86.25 in 2001, payable in 2002, and thereafter. 86.26 Sec. 6. Minnesota Statutes 1998, section 272.115, 86.27 subdivision 1, is amended to read: 86.28 Subdivision 1. [REQUIREMENT.] Except as otherwise provided 86.29 in subdivision 5, whenever any real estate is sold for a 86.30 consideration in excess of $1,000, whether by warranty deed, 86.31 quitclaim deed, contract for deed or any other method of sale, 86.32 the grantor, grantee or the legal agent of either shall file a 86.33 certificate of value with the county auditor in the county in 86.34 which the property is located when the deed or other document is 86.35 presented for recording. This subdivision does not apply to a 86.36 deed or other document which has been dated and acknowledged on 87.1 or before December 31, 1997. Contract for deeds are subject to 87.2 recording under section 507.235, subdivision 1. Value shall, in 87.3 the case of any deed not a gift, be the amount of the full 87.4 actual consideration thereof, paid or to be paid, including the 87.5 amount of any lien or liens assumed. The items and value of 87.6 personal property transferred with the real property must be 87.7 listed and deducted from the sale price. The certificate of 87.8 value shall include the classification to which the property 87.9 belongs for the purpose of determining the fair market value of 87.10 the property. The certificate shall include financing terms and 87.11 conditions of the sale which are necessary to determine the 87.12 actual, present value of the sale price for purposes of the 87.13 sales ratio study. The commissioner of revenue shall promulgate 87.14 administrative rules specifying the financing terms and 87.15 conditions which must be included on the certificate. Pursuant 87.16 to the authority of the commissioner of revenue in section 87.17 270.066, the certificate of value must include the social 87.18 security number or the federal employer identification number of 87.19 the grantors and grantees. The identification numbers of the 87.20 grantors and grantees are private data on individuals or 87.21 nonpublic data as defined in section 13.02, subdivisions 9 and 87.22 12, but, notwithstanding that section, the private or nonpublic 87.23 data may be disclosed to the commissioner of revenue for 87.24 purposes of tax administration. The information required to be 87.25 shown on the certificate of value is limited to the information 87.26 required as of the date of the acknowledgment on the deed or 87.27 other document to be recorded. 87.28 Sec. 7. Minnesota Statutes 1999 Supplement, section 87.29 273.124, subdivision 1, is amended to read: 87.30 Subdivision 1. [GENERAL RULE.] (a) Residential real estate 87.31 that is occupied and used for the purposes of a homestead by its 87.32 owner, who must be a Minnesota resident, is a residential 87.33 homestead. 87.34 Agricultural land, as defined in section 273.13, 87.35 subdivision 23, that is occupied and used as a homestead by its 87.36 owner, who must be a Minnesota resident, is an agricultural 88.1 homestead. 88.2 Dates for establishment of a homestead and homestead 88.3 treatment provided to particular types of property are as 88.4 provided in this section. 88.5 Propertyofheld by a trustee,beneficiary, or grantor of88.6 under a trust isnot disqualified from receivingeligible for 88.7 homesteadbenefitsclassification if thehomesteadrequirements 88.8 under this chapter are satisfied. 88.9 The assessor shall require proof, as provided in 88.10 subdivision 13, of the facts upon which classification as a 88.11 homestead may be determined. Notwithstanding any other law, the 88.12 assessor may at any time require a homestead application to be 88.13 filed in order to verify that any property classified as a 88.14 homestead continues to be eligible for homestead status. 88.15 Notwithstanding any other law to the contrary, the department of 88.16 revenue may, upon request from an assessor, verify whether an 88.17 individual who is requesting or receiving homestead 88.18 classification has filed a Minnesota income tax return as a 88.19 resident for the most recent taxable year for which the 88.20 information is available. 88.21 When there is a name change or a transfer of homestead 88.22 property, the assessor may reclassify the property in the next 88.23 assessment unless a homestead application is filed to verify 88.24 that the property continues to qualify for homestead 88.25 classification. 88.26 (b) For purposes of this section, homestead property shall 88.27 include property which is used for purposes of the homestead but 88.28 is separated from the homestead by a road, street, lot, 88.29 waterway, or other similar intervening property. The term "used 88.30 for purposes of the homestead" shall include but not be limited 88.31 to uses for gardens, garages, or other outbuildings commonly 88.32 associated with a homestead, but shall not include vacant land 88.33 held primarily for future development. In order to receive 88.34 homestead treatment for the noncontiguous property, the owner 88.35 must use the property for the purposes of the homestead, and 88.36 must apply to the assessor, both by the deadlines given in 89.1 subdivision 9. After initial qualification for the homestead 89.2 treatment, additional applications for subsequent years are not 89.3 required. 89.4 (c) Residential real estate that is occupied and used for 89.5 purposes of a homestead by a relative of the owner is a 89.6 homestead but only to the extent of the homestead treatment that 89.7 would be provided if the related owner occupied the property. 89.8 For purposes of this paragraph and paragraph (g), "relative" 89.9 means a parent, stepparent, child, stepchild, grandparent, 89.10 grandchild, brother, sister, uncle, aunt, nephew, or niece. 89.11 This relationship may be by blood or marriage. Property that 89.12 has been classified as seasonal recreational residential 89.13 property at any time during which it has been owned by the 89.14 current owner or spouse of the current owner will not be 89.15 reclassified as a homestead unless it is occupied as a homestead 89.16 by the owner; this prohibition also applies to property that, in 89.17 the absence of this paragraph, would have been classified as 89.18 seasonal recreational residential property at the time when the 89.19 residence was constructed. Neither the related occupant nor the 89.20 owner of the property may claim a property tax refund under 89.21 chapter 290A for a homestead occupied by a relative. In the 89.22 case of a residence located on agricultural land, only the 89.23 house, garage, and immediately surrounding one acre of land 89.24 shall be classified as a homestead under this paragraph, except 89.25 as provided in paragraph (d). 89.26 (d) Agricultural property that is occupied and used for 89.27 purposes of a homestead by a relative of the owner, is a 89.28 homestead, only to the extent of the homestead treatment that 89.29 would be provided if the related owner occupied the property, 89.30 and only if all of the following criteria are met: 89.31 (1) the relative who is occupying the agricultural property 89.32 is a son, daughter, grandson, granddaughter, father, or mother 89.33 of the owner of the agricultural property or a sonor, daughter, 89.34 grandson, or granddaughter of the spouse of the owner of the 89.35 agricultural property; 89.36 (2) the owner of the agricultural property must be a 90.1 Minnesota resident; 90.2 (3) the owner of the agricultural property must not receive 90.3 homestead treatment on any other agricultural property in 90.4 Minnesota; and 90.5 (4) the owner of the agricultural property is limited to 90.6 only one agricultural homestead per family under this paragraph. 90.7 Neither the related occupant nor the owner of the property 90.8 may claim a property tax refund under chapter 290A for a 90.9 homestead occupied by a relative qualifying under this 90.10 paragraph. For purposes of this paragraph, "agricultural 90.11 property" means the house, garage, other farm buildings and 90.12 structures, and agricultural land. 90.13 Application must be made to the assessor by the owner of 90.14 the agricultural property to receive homestead benefits under 90.15 this paragraph. The assessor may require the necessary proof 90.16 that the requirements under this paragraph have been met. 90.17 (e) In the case of property owned by a property owner who 90.18 is married, the assessor must not deny homestead treatment in 90.19 whole or in part if only one of the spouses occupies the 90.20 property and the other spouse is absent due to: (1) marriage 90.21 dissolution proceedings, (2) legal separation, (3) employment or 90.22 self-employment in another location, or (4) other personal 90.23 circumstances causing the spouses to live separately, not 90.24 including an intent to obtain two homestead classifications for 90.25 property tax purposes. To qualify under clause (3), the 90.26 spouse's place of employment or self-employment must be at least 90.27 50 miles distant from the other spouse's place of employment, 90.28 and the homesteads must be at least 50 miles distant from each 90.29 other. Homestead treatment, in whole or in part, shall not be 90.30 denied to the owner's spouse who previously occupied the 90.31 residence with the owner if the absence of the owner is due to 90.32 one of the exceptions provided in this paragraph. 90.33 (f) The assessor must not deny homestead treatment in whole 90.34 or in part if: 90.35 (1) in the case of a property owner who is not married, the 90.36 owner is absent due to residence in a nursing home or boarding 91.1 care facility and the property is not otherwise occupied; or 91.2 (2) in the case of a property owner who is married, the 91.3 owner or the owner's spouse or both are absent due to residence 91.4 in a nursing home or boarding care facility and the property is 91.5 not occupied or is occupied only by the owner's spouse. 91.6 (g) If an individual is purchasing property with the intent 91.7 of claiming it as a homestead and is required by the terms of 91.8 the financing agreement to have a relative shown on the deed as 91.9 a coowner, the assessor shall allow a full homestead 91.10 classification. This provision only applies to first-time 91.11 purchasers, whether married or single, or to a person who had 91.12 previously been married and is purchasing as a single individual 91.13 for the first time. The application for homestead benefits must 91.14 be on a form prescribed by the commissioner and must contain the 91.15 data necessary for the assessor to determine if full homestead 91.16 benefits are warranted. 91.17 (h) If residential or agricultural real estate is occupied 91.18 and used for purposes of a homestead by a child of a deceased 91.19 owner and the property is subject to jurisdiction of probate 91.20 court, the child shall receive relative homestead classification 91.21 under paragraph (c) or (d) to the same extent they would be 91.22 entitled to it if the owner was still living, until the probate 91.23 is completed. For purposes of this paragraph, "child" includes 91.24 a relationship by blood or by marriage. 91.25 EFFECTIVE DATE: This section is effective for taxes levied 91.26 in 2000, payable in 2001, and thereafter. 91.27 Sec. 8. Minnesota Statutes 1999 Supplement, section 91.28 273.124, subdivision 14, is amended to read: 91.29 Subd. 14. [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.] 91.30 (a) Real estate of less than ten acres that is the homestead of 91.31 its owner must be classified as class 2a under section 273.13, 91.32 subdivision 23, paragraph (a), if: 91.33 (1) the parcel on which the house is located is contiguous 91.34 on at least two sides to (i) agricultural land, (ii) land owned 91.35 or administered by the United States Fish and Wildlife Service, 91.36 or (iii) land administered by the department of natural 92.1 resources on which in lieu taxes are paid under sections 477A.11 92.2 to 477A.14; 92.3 (2) its owner also owns a noncontiguous parcel of 92.4 agricultural land that is at least 20 acres; 92.5 (3) the noncontiguous land is located not farther than four 92.6 townships or cities, or a combination of townships or cities 92.7 from the homestead; and 92.8 (4) the agricultural use value of the noncontiguous land 92.9 and farm buildings is equal to at least 50 percent of the market 92.10 value of the house, garage, and one acre of land. 92.11 Homesteads initially classified as class 2a under the 92.12 provisions of this paragraph shall remain classified as class 92.13 2a, irrespective of subsequent changes in the use of adjoining 92.14 properties, as long as the homestead remains under the same 92.15 ownership, the owner owns a noncontiguous parcel of agricultural 92.16 land that is at least 20 acres, and the agricultural use value 92.17 qualifies under clause (4). Homestead classification under this 92.18 paragraph is limited to property that qualified under this 92.19 paragraph for the 1998 assessment. 92.20 (b) Agricultural property consisting of at least 40 acres 92.21 shall be classified homestead, to the same extent as other 92.22 agricultural homestead property, if all of the following 92.23 criteria are met: 92.24 (1) the owner is actively farming the agricultural 92.25 property; 92.26 (2) the owner of the agricultural property is a Minnesota 92.27 resident; 92.28 (3) neither the owner nor the spouse of theagricultural92.29propertyowner claims another agricultural homestead in 92.30 Minnesota; and 92.31 (4) the owner does not live farther than four townships or 92.32 cities, or a combination of four townships or cities, from the 92.33 agricultural property. 92.34 As used in this paragraph, "owner" includes a shareholder of a 92.35 family farm corporation that owns the property or a partner in a 92.36 family farm partnership that owns the property. 93.1 (c) Except as provided in paragraph (e), noncontiguous land 93.2 shall be included as part of a homestead under section 273.13, 93.3 subdivision 23, paragraph (a), only if the homestead is 93.4 classified as class 2a and the detached land is located in the 93.5 same township or city, or not farther than four townships or 93.6 cities or combination thereof from the homestead. Any taxpayer 93.7 of these noncontiguous lands must notify the county assessor 93.8 that the noncontiguous land is part of the taxpayer's homestead, 93.9 and, if the homestead is located in another county, the taxpayer 93.10 must also notify the assessor of the other county. 93.11 (d) Agricultural land used for purposes of a homestead and 93.12 actively farmed by a person holding a vested remainder interest 93.13 in it must be classified as a homestead under section 273.13, 93.14 subdivision 23, paragraph (a). If agricultural land is 93.15 classified class 2a, any other dwellings on the land used for 93.16 purposes of a homestead by persons holding vested remainder 93.17 interests who are actively engaged in farming the property, and 93.18 up to one acre of the land surrounding each homestead and 93.19 reasonably necessary for the use of the dwelling as a home, must 93.20 also be assessed class 2a. 93.21 (e) Agricultural land and buildings that were class 2a 93.22 homestead property under section 273.13, subdivision 23, 93.23 paragraph (a), for the 1997 assessment shall remain classified 93.24 as agricultural homesteads for subsequent assessments if: 93.25 (1) the property owner abandoned the homestead dwelling 93.26 located on the agricultural homestead as a result of the April 93.27 1997 floods; 93.28 (2) the property is located in the county of Polk, Clay, 93.29 Kittson, Marshall, Norman, or Wilkin; 93.30 (3) the agricultural land and buildings remain under the 93.31 same ownership for the current assessment year as existed for 93.32 the 1997 assessment year and continue to be used for 93.33 agricultural purposes; 93.34 (4) the dwelling occupied by the owner is located in 93.35 Minnesota and is within 30 miles of one of the parcels of 93.36 agricultural land that is owned by the taxpayer; and 94.1 (5) the owner notifies the county assessor that the 94.2 relocation was due to the 1997 floods, and the owner furnishes 94.3 the assessor any information deemed necessary by the assessor in 94.4 verifying the change in dwelling. Further notifications to the 94.5 assessor are not required if the property continues to meet all 94.6 the requirements in this paragraph and any dwellings on the 94.7 agricultural land remain uninhabited. 94.8 (f) Agricultural land and buildings that were class 2a 94.9 homestead property under section 273.13, subdivision 23, 94.10 paragraph (a), for the 1998 assessment shall remain classified 94.11 agricultural homesteads for subsequent assessments if: 94.12 (1) the property owner abandoned the homestead dwelling 94.13 located on the agricultural homestead as a result of damage 94.14 caused by a March 29, 1998, tornado; 94.15 (2) the property is located in the county of Blue Earth, 94.16 Brown, Cottonwood, LeSueur, Nicollet, Nobles, or Rice; 94.17 (3) the agricultural land and buildings remain under the 94.18 same ownership for the current assessment year as existed for 94.19 the 1998 assessment year; 94.20 (4) the dwelling occupied by the owner is located in this 94.21 state and is within 50 miles of one of the parcels of 94.22 agricultural land that is owned by the taxpayer; and 94.23 (5) the owner notifies the county assessor that the 94.24 relocation was due to a March 29, 1998, tornado, and the owner 94.25 furnishes the assessor any information deemed necessary by the 94.26 assessor in verifying the change in homestead dwelling. For 94.27 taxes payable in 1999, the owner must notify the assessor by 94.28 December 1, 1998. Further notifications to the assessor are not 94.29 required if the property continues to meet all the requirements 94.30 in this paragraph and any dwellings on the agricultural land 94.31 remain uninhabited. 94.32 EFFECTIVE DATE: This section is effective for taxes levied 94.33 in 2000, payable in 2001, and thereafter. 94.34 Sec. 9. Minnesota Statutes 1998, section 273.124, is 94.35 amended by adding a subdivision to read: 94.36 Subd. 21. [TRUST PROPERTY; HOMESTEAD.] Real property held 95.1 by a trustee under a trust is eligible for classification as 95.2 homestead property if: 95.3 (1) the grantor or surviving spouse of the grantor of the 95.4 trust occupies and uses the property as a homestead; 95.5 (2) a relative or surviving relative of the grantor who 95.6 meets the requirements of subdivision 1, paragraph (c), in the 95.7 case of residential real estate; or subdivision 1, paragraph 95.8 (d), in the case of agricultural property, occupies and uses the 95.9 property as a homestead; 95.10 (3) a family farm corporation, a partnership operating a 95.11 family farm, or a joint farm venture operating a family farm 95.12 rents the property held by a trustee under a trust, and a 95.13 shareholder or partner of the corporation, partnership, or joint 95.14 farm venture occupies and uses the property as a homestead, and 95.15 is actively farming the property on behalf of the corporation, 95.16 partnership, or joint farm venture; or 95.17 (4) a person who has received homestead classification for 95.18 property taxes payable in 2000 on the basis of an unqualified 95.19 legal right under the terms of the trust agreement to occupy the 95.20 property as that person's homestead and who continues to use the 95.21 property as a homestead. 95.22 For purposes of this subdivision, "grantor" is defined as 95.23 the person creating or establishing a testamentary, inter vivos, 95.24 revocable or irrevocable trust by written instrument or through 95.25 the exercise of a power of appointment. 95.26 EFFECTIVE DATE: This section is effective for taxes levied 95.27 in 2000, payable in 2001, and thereafter. 95.28 Sec. 10. Minnesota Statutes 1999 Supplement, section 95.29 273.13, subdivision 24, is amended to read: 95.30 Subd. 24. [CLASS 3.] (a) Commercial and industrial 95.31 property and utility real and personal property is class 3a. 95.32 Each parcel of real property has a class rate of 2.4 percent of 95.33 the first tier of market value, and 3.4 percent of the remaining 95.34 market value, except that in the case of contiguous parcels of 95.35 property owned by the same person or entity, only the value 95.36 equal to the first-tier value of the contiguous parcels 96.1 qualifies for the reduced class rate. For the purposes of this 96.2 subdivision, the first tier means the first $150,000 of market 96.3 value. Real property owned in fee by a utility for transmission 96.4 line right-of-way shall be classified at the class rate for the 96.5 higher tier. All personal property shall be classified at the 96.6 class rate for the higher tier. For purposes of this 96.7 subdivision "personal property" means tools, implements, and 96.8 machinery of an electric generating, transmission, or 96.9 distribution system, or a pipeline system transporting or 96.10 distributing water, gas, crude oil, or petroleum products or 96.11 mains and pipes used in the distribution of steam or hot or 96.12 chilled water for heating or cooling buildings, which are 96.13 fixtures. 96.14 For purposes of this paragraph, parcels are considered to 96.15 be contiguous even if they are separated from each other by a 96.16 road, street, vacant lot, waterway, or other similar intervening 96.17 type of property. 96.18 (b) Employment property defined in section 469.166, during 96.19 the period provided in section 469.170, shall constitute class 96.20 3b. The class rates for class 3b property are determined under 96.21 paragraph (a). 96.22 (c)(1) Subject to the limitations of clause (2), structures 96.23 which are (i) located on property classified as class 3a, (ii) 96.24 constructed under an initial building permit issued after 96.25 January 2, 1996, (iii) located in a transit zone as defined 96.26 under section 473.3915, subdivision 3, (iv) located within the 96.27 boundaries of a school district, and (v) not primarily used for 96.28 retail or transient lodging purposes, shall have a class rate 96.29 equal to the lesser of 2.975 percent or the class rate of the 96.30 second tier of the commercial property rate under paragraph (a) 96.31 on any portion of the market value that does not qualify for the 96.32 first tier class rate under paragraph (a). As used in item (v), 96.33 a structure is primarily used for retail or transient lodging 96.34 purposes if over 50 percent of its square footage is used for 96.35 those purposes. A class rate equal to the lesser of 2.975 96.36 percent or the class rate of the second tier of the commercial 97.1 property class rate under paragraph (a) shall also apply to 97.2 improvements to existing structures that meet the requirements 97.3 of items (i) to (v) if the improvements are constructed under an 97.4 initial building permit issued after January 2, 1996, even if 97.5 the remainder of the structure was constructed prior to January 97.6 2, 1996. For the purposes of this paragraph, a structure shall 97.7 be considered to be located in a transit zone if any portion of 97.8 the structure lies within the zone. If any property once 97.9 eligible for treatment under this paragraph ceases to remain 97.10 eligible due to revisions in transit zone boundaries, the 97.11 property shall continue to receive treatment under this 97.12 paragraph for a period of three years. 97.13 (2) This clause applies to any structure qualifying for the 97.14 transit zone reduced class rate under clause (1) on January 2, 97.15 1999, or any structure meeting any of the qualification criteria 97.16 in item (i) and otherwise qualifying for the transit zone 97.17 reduced class rate under clause (1). Such a structure continues 97.18 to receive the transit zone reduced class rate until the 97.19 occurrence of one of the events in item (ii). Property 97.20 qualifying under item (i)(D), that is located outside of a city 97.21 of the first class, qualifies for the transit zone reduced class 97.22 rate as provided in that item. Property qualifying under item 97.23 (i)(E) qualifies for the transit zone reduced class rate as 97.24 provided in that item. 97.25 (i) A structure qualifies for the rate in this clause if it 97.26 is: 97.27 (A) property for which a building permit was issued before 97.28 December 31, 1998; or 97.29 (B) property for which a building permit was issued before 97.30 June 30, 2001, if: 97.31 (I) at least 50 percent of the land on which the structure 97.32 is to be built has been acquired or is the subject of signed 97.33 purchase agreements or signed options as of March 15, 1998, by 97.34 the entity that proposes construction of the project or an 97.35 affiliate of the entity; 97.36 (II) signed agreements have been entered into with one 98.1 entity or with affiliated entities to lease for the account of 98.2 the entity or affiliated entities at least 50 percent of the 98.3 square footage of the structure or the owner of the structure 98.4 will occupy at least 50 percent of the square footage of the 98.5 structure; and 98.6 (III) one of the following requirements is met: 98.7 the project proposer has submitted the completed data 98.8 portions of an environmental assessment worksheet by December 98.9 31, 1998; or 98.10 a notice of determination of adequacy of an environmental 98.11 impact statement has been published by April 1, 1999; or 98.12 an alternative urban areawide review has been completed by 98.13 April 1, 1999; or 98.14 (C) property for which a building permit is issued before 98.15 July 30, 1999, if: 98.16 (I) at least 50 percent of the land on which the structure 98.17 is to be built has been acquired or is the subject of signed 98.18 purchase agreements as of March 31, 1998, by the entity that 98.19 proposes construction of the project or an affiliate of the 98.20 entity; 98.21 (II) a signed agreement has been entered into between the 98.22 building developer and a tenant to lease for its own account at 98.23 least 200,000 square feet of space in the building; 98.24 (III) a signed letter of intent is entered into by July 1, 98.25 1998, between the building developer and the tenant to lease the 98.26 space for its own account; and 98.27 (IV) the environmental review process required by state law 98.28 was commenced by December 31, 1998; 98.29 (D) property for which an irrevocable letter of credit with 98.30 a housing and redevelopment authority was signed before December 98.31 31, 1998. The structure shall receive the transit zone reduced 98.32 class rate during construction and for the duration of time that 98.33 the original tenants remain in the building. Any unoccupied net 98.34 leasable square footage that is not leased within 36 months 98.35 after the certificate of occupancy has been issued for the 98.36 building shall not be eligible to receive the reduced class 99.1 rate. This reduced class rate applies only ifthea qualifying 99.2 entitythat constructed the structurecontinues to own the 99.3 property; 99.4 (E) property, located in a city of the first class, and for 99.5 which the building permits for the excavation, the parking ramp, 99.6 and the office tower were issued prior to April 1, 1999, shall 99.7 receive the reduced class rate during construction and for the 99.8 first five assessment years immediately following its initial 99.9 occupancy provided that, when completed, at least 25 percent of 99.10 the net leasable square footage must be occupied bythea 99.11 qualifying entityor the parent entity constructing the99.12structureeach year during this time period. In order to 99.13 receive the reduced class rate on the structure in any 99.14 subsequent assessment years, at least 50 percent of the rentable 99.15 square footage must be occupied bythea qualifying entityor99.16the parent entity that constructed the structure. This reduced 99.17 class rate applies only ifthea qualifying entityor the parent99.18entity that constructed the structurecontinues to own the 99.19 property. 99.20 (ii) A structure specified by this clause, other than a 99.21 structure qualifying under clause (i)(D) or (E), shall continue 99.22 to receive the transit zone reduced class rate until the 99.23 occurrence of one of the following events: 99.24 (A) if the structure upon initial occupancy will be owner 99.25 occupied by the entity initially constructing the structure or 99.26 an affiliated entity, the structure receives the reduced class 99.27 rate until the structure ceases to be at least 50 percent 99.28 occupied by the entity or an affiliated entity, provided, if the 99.29 portion of the structure occupied by that entity or an affiliate 99.30 of the entity is less than 85 percent, the transit zone class 99.31 rate reduction for the portion of structure not so occupied 99.32 terminates upon the leasing of such space to any nonaffiliated 99.33 entity; or 99.34 (B) if the structure is leased by a single entity or 99.35 affiliated entity at the time of initial occupancy, the 99.36 structure shall receive the reduced class rate until the 100.1 structure ceases to be at least 50 percent occupied by the 100.2 entity or an affiliated entity, provided, if the portion of the 100.3 structure occupied by that entity or an affiliate of the entity 100.4 is less than 85 percent, the transit zone class rate reduction 100.5 for the portion of structure not so occupied shall terminate 100.6 upon the leasing of such space to any nonaffiliated entity; or 100.7 (C) if the structure meets the criteria in item (i)(C), the 100.8 structure shall receive the reduced class rate until the 100.9 expiration of the initial lease term of the applicable tenants. 100.10 Percentages occupied or leased shall be determined based 100.11 upon net leasable square footage in the structure. The assessor 100.12 shall allocate the value of the structure in the same fashion as 100.13 provided in the general law for portions of any structure 100.14 receiving and not receiving the transit tax class reduction as a 100.15 result of this clause. 100.16 (3) For purposes of paragraph (c), "qualifying entity" 100.17 means the entity owning the property on September 1, 2000, or an 100.18 affiliate of an entity that owned the property on September 1, 100.19 2000. 100.20 EFFECTIVE DATE: This section is effective for property 100.21 taxes payable in 2001 and thereafter. 100.22 Sec. 11. Minnesota Statutes 1999 Supplement, section 100.23 273.13, subdivision 25, is amended to read: 100.24 Subd. 25. [CLASS 4.] (a) Class 4a is residential real 100.25 estate containing four or more units and used or held for use by 100.26 the owner or by the tenants or lessees of the owner as a 100.27 residence for rental periods of 30 days or more. Class 4a also 100.28 includes hospitals licensed under sections 144.50 to 144.56, 100.29 other than hospitals exempt under section 272.02, and contiguous 100.30 property used for hospital purposes, without regard to whether 100.31 the property has been platted or subdivided.Class 4a property100.32in a city with a population of 5,000 or less, that is (1)100.33located outside of the metropolitan area, as defined in section100.34473.121, subdivision 2, or outside any county contiguous to the100.35metropolitan area, and (2) whose city boundary is at least 15100.36miles from the boundary of any city with a population greater101.1than 5,000 has a class rate of 2.15 percent of market value.101.2All otherClass 4a property has a class rate of2.41.95 percent 101.3 of market value.For purposes of this paragraph, population has101.4the same meaning given in section 477A.011, subdivision 3.101.5 (b) Class 4b includes: 101.6 (1) residential real estate containing less than four units 101.7 that does not qualify as class 4bb, other than seasonal 101.8 residential, and recreational; 101.9 (2) manufactured homes not classified under any other 101.10 provision; 101.11 (3) a dwelling, garage, and surrounding one acre of 101.12 property on a nonhomestead farm classified under subdivision 23, 101.13 paragraph (b) containing two or three units; 101.14 (4) unimproved property that is classified residential as 101.15 determined under subdivision 33. 101.16 Class 4b property has a class rate of 1.65 percent of 101.17 market value. 101.18 (c) Class 4bb includes: 101.19 (1) nonhomestead residential real estate containing one 101.20 unit, other than seasonal residential, and recreational; and 101.21 (2) a single family dwelling, garage, and surrounding one 101.22 acre of property on a nonhomestead farm classified under 101.23 subdivision 23, paragraph (b). 101.24 Class 4bb has a class rate of 1.2 percent on the first 101.25 $76,000 of market value and a class rate of 1.65 percent of its 101.26 market value that exceeds $76,000. 101.27 Property that has been classified as seasonal recreational 101.28 residential property at any time during which it has been owned 101.29 by the current owner or spouse of the current owner does not 101.30 qualify for class 4bb. 101.31 (d) Class 4c property includes: 101.32 (1) except as provided in subdivision 22, paragraph (c), 101.33 real property devoted to temporary and seasonal residential 101.34 occupancy for recreation purposes, including real property 101.35 devoted to temporary and seasonal residential occupancy for 101.36 recreation purposes and not devoted to commercial purposes for 102.1 more than 250 days in the year preceding the year of 102.2 assessment. For purposes of this clause, property is devoted to 102.3 a commercial purpose on a specific day if any portion of the 102.4 property is used for residential occupancy, and a fee is charged 102.5 for residential occupancy. In order for a property to be 102.6 classified as class 4c, seasonal recreational residential for 102.7 commercial purposes, at least 40 percent of the annual gross 102.8 lodging receipts related to the property must be from business 102.9 conducted during 90 consecutive days and either (i) at least 60 102.10 percent of all paid bookings by lodging guests during the year 102.11 must be for periods of at least two consecutive nights; or (ii) 102.12 at least 20 percent of the annual gross receipts must be from 102.13 charges for rental of fish houses, boats and motors, 102.14 snowmobiles, downhill or cross-country ski equipment, or charges 102.15 for marina services, launch services, and guide services, or the 102.16 sale of bait and fishing tackle. For purposes of this 102.17 determination, a paid booking of five or more nights shall be 102.18 counted as two bookings. Class 4c also includes commercial use 102.19 real property used exclusively for recreational purposes in 102.20 conjunction with class 4c property devoted to temporary and 102.21 seasonal residential occupancy for recreational purposes, up to 102.22 a total of two acres, provided the property is not devoted to 102.23 commercial recreational use for more than 250 days in the year 102.24 preceding the year of assessment and is located within two miles 102.25 of the class 4c property with which it is used. Class 4c 102.26 property classified in this clause also includes the remainder 102.27 of class 1c resorts provided that the entire property including 102.28 that portion of the property classified as class 1c also meets 102.29 the requirements for class 4c under this clause; otherwise the 102.30 entire property is classified as class 3. Owners of real 102.31 property devoted to temporary and seasonal residential occupancy 102.32 for recreation purposes and all or a portion of which was 102.33 devoted to commercial purposes for not more than 250 days in the 102.34 year preceding the year of assessment desiring classification as 102.35 class 1c or 4c, must submit a declaration to the assessor 102.36 designating the cabins or units occupied for 250 days or less in 103.1 the year preceding the year of assessment by January 15 of the 103.2 assessment year. Those cabins or units and a proportionate 103.3 share of the land on which they are located will be designated 103.4 class 1c or 4c as otherwise provided. The remainder of the 103.5 cabins or units and a proportionate share of the land on which 103.6 they are located will be designated as class 3a. The owner of 103.7 property desiring designation as class 1c or 4c property must 103.8 provide guest registers or other records demonstrating that the 103.9 units for which class 1c or 4c designation is sought were not 103.10 occupied for more than 250 days in the year preceding the 103.11 assessment if so requested. The portion of a property operated 103.12 as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 103.13 nonresidential facility operated on a commercial basis not 103.14 directly related to temporary and seasonal residential occupancy 103.15 for recreation purposes shall not qualify for class 1c or 4c; 103.16 (2) qualified property used as a golf course if: 103.17 (i) it is open to the public on a daily fee basis. It may 103.18 charge membership fees or dues, but a membership fee may not be 103.19 required in order to use the property for golfing, and its green 103.20 fees for golfing must be comparable to green fees typically 103.21 charged by municipal courses; and 103.22 (ii) it meets the requirements of section 273.112, 103.23 subdivision 3, paragraph (d). 103.24 A structure used as a clubhouse, restaurant, or place of 103.25 refreshment in conjunction with the golf course is classified as 103.26 class 3a property; 103.27 (3) real property up to a maximum of one acre of land owned 103.28 by a nonprofit community service oriented organization; provided 103.29 that the property is not used for a revenue-producing activity 103.30 for more than six days in the calendar year preceding the year 103.31 of assessment and the property is not used for residential 103.32 purposes on either a temporary or permanent basis. For purposes 103.33 of this clause, a "nonprofit community service oriented 103.34 organization" means any corporation, society, association, 103.35 foundation, or institution organized and operated exclusively 103.36 for charitable, religious, fraternal, civic, or educational 104.1 purposes, and which is exempt from federal income taxation 104.2 pursuant to section 501(c)(3), (10), or (19) of the Internal 104.3 Revenue Code of 1986, as amended through December 31, 1990. For 104.4 purposes of this clause, "revenue-producing activities" shall 104.5 include but not be limited to property or that portion of the 104.6 property that is used as an on-sale intoxicating liquor or 3.2 104.7 percent malt liquor establishment licensed under chapter 340A, a 104.8 restaurant open to the public, bowling alley, a retail store, 104.9 gambling conducted by organizations licensed under chapter 349, 104.10 an insurance business, or office or other space leased or rented 104.11 to a lessee who conducts a for-profit enterprise on the 104.12 premises. Any portion of the property which is used for 104.13 revenue-producing activities for more than six days in the 104.14 calendar year preceding the year of assessment shall be assessed 104.15 as class 3a. The use of the property for social events open 104.16 exclusively to members and their guests for periods of less than 104.17 24 hours, when an admission is not charged nor any revenues are 104.18 received by the organization shall not be considered a 104.19 revenue-producing activity; 104.20 (4) post-secondary student housing of not more than one 104.21 acre of land that is owned by a nonprofit corporation organized 104.22 under chapter 317A and is used exclusively by a student 104.23 cooperative, sorority, or fraternity for on-campus housing or 104.24 housing located within two miles of the border of a college 104.25 campus; 104.26 (5) manufactured home parks as defined in section 327.14, 104.27 subdivision 3;and104.28 (6) real property that is actively and exclusively devoted 104.29 to indoor fitness, health, social, recreational, and related 104.30 uses, is owned and operated by a not-for-profit corporation, and 104.31 is located within the metropolitan area as defined in section 104.32 473.121, subdivision 2; and 104.33 (7) a leased or privately owned noncommercial aircraft 104.34 storage hangar that is not exempt under section 272.01, 104.35 subdivision 2, and the land on which it is located, provided 104.36 that: 105.1 (i) the land is on an airport owned or operated by a city, 105.2 town, county, metropolitan airports commission, or group 105.3 thereof; and 105.4 (ii) the land lease, or any ordinance or other signed 105.5 agreement restricting the use of the leased premise, prohibits 105.6 commercial activity performed at the hangar. 105.7 If a hangar classified under this clause is sold after the 105.8 effective date of this act, a bill of sale must be filed by the 105.9 new owner with the county assessor of the county where the 105.10 property is located within 60 days of the sale. 105.11 Class 4c property has a class rate of 1.65 percent of 105.12 market value, except that (i) each parcel of seasonal 105.13 residential recreational property not used for commercial 105.14 purposes has the same class rates as class 4bb property, (ii) 105.15 manufactured home parks assessed under clause (5) havethe same105.16 a class rateas class 4b propertyof 1.2 percent, and (iii) 105.17 property described in paragraph (d), clause (4), has the same 105.18 class rate as the rate applicable to the first tier of class 4bb 105.19 nonhomestead residential real estate under paragraph (c). 105.20 (e) Class 4d property is qualifying low-income rental 105.21 housing certified to the assessor by the housing finance agency 105.22 under sections 273.126 and 462A.071. Class 4d includes land in 105.23 proportion to the total market value of the building that is 105.24 qualifying low-income rental housing. For all properties 105.25 qualifying as class 4d, the market value determined by the 105.26 assessor must be based on the normal approach to value using 105.27 normal unrestricted rents. 105.28 Class 4d property has a class rate of one percent of market 105.29 value. 105.30 EFFECTIVE DATE: The provisions of clause (7) are effective 105.31 for taxes levied in 2000, payable in 2001 only. The reminder of 105.32 this section is effective for taxes levied in 2000, payable in 105.33 2001, and thereafter. 105.34 Sec. 12. Minnesota Statutes 1999 Supplement, section 105.35 273.1382, subdivision 1b, is amended to read: 105.36 Subd. 1b. [EDUCATION AGRICULTURAL CREDIT.] Property 106.1 classified as class 2a agricultural homestead or class 2b 106.2 agricultural nonhomestead or timberland is eligible for 106.3 education agricultural credit. The credit is equal to5488.5 106.4 percent, in the case of agricultural homestead property, or 50106.5percent, in the case of agricultural nonhomestead property or106.6timberland,of the property's net tax capacity times the 106.7 education credit tax rate determined in subdivision 1. The net 106.8 tax capacity of class 2a property attributable to the house, 106.9 garage, and surrounding one acre of land is not eligible for the 106.10 credit under this subdivision. 106.11 EFFECTIVE DATE: This section is effective for taxes 106.12 payable in 2001, and thereafter. 106.13 Sec. 13. Minnesota Statutes 1999 Supplement, section 106.14 273.1398, subdivision 1a, is amended to read: 106.15 Subd. 1a. [TAX BASE DIFFERENTIAL.] (a) For aids payable in 106.16 2000, the tax base differential is: 106.17 (1) 0.45 percent of the assessment year 1998 taxable market 106.18 value of class 2a agricultural homestead property, excluding the 106.19 house, garage, and surrounding one acre of land, between 106.20 $115,000 and $600,000 and over 320 acres, minus the value over 106.21 $600,000 that is less than 320 acres; plus 106.22 (2) 0.5 percent of the assessment year 1998 taxable market 106.23 value of noncommercial seasonal recreational residential 106.24 property over $75,000 in value; plus 106.25 (3) for purposes of computing the fiscal disparity 106.26 adjustment only, 0.2 percent of the assessment year 1998 taxable 106.27 market value of class 3 commercial-industrial property over 106.28 $150,000. 106.29 (b) For the purposes of the distribution of homestead and 106.30 agricultural credit aid for aids payable in 2000, the 106.31 commissioner of revenue shall use the best information available 106.32 as of June 30, 1999, to make an estimate of the value described 106.33 in paragraph (a), clause (1). The commissioner shall adjust the 106.34 distribution of homestead and agricultural credit aid for aids 106.35 payable in 2001 and subsequent years if new information 106.36 regarding the value described in paragraph (a), clause (1), 107.1 becomes available after June 30, 1999. 107.2 (c) For aids payable in 2001, the tax base differential is: 107.3 (1) 0.45 percent of the assessment year 1999 taxable market 107.4 value of class 4a property that had a class rate of 2.4 percent 107.5 for taxes payable in 2000, plus 0.2 percent of the assessment 107.6 year 1999 taxable market value of class 4a property that had a 107.7 class rate of 2.15 percent of taxes payable in 2000; plus 107.8 (2) 0.45 percent of the assessment year 1999 taxable market 107.9 value of manufactured home parks classified under section 107.10 273.13, subdivision 25, paragraph (d), clause (5). 107.11 EFFECTIVE DATE: This section is effective for aids payable 107.12 in 2001, and thereafter. 107.13 Sec. 14. Minnesota Statutes 1998, section 273.1398, 107.14 subdivision 4, is amended to read: 107.15 Subd. 4. [DISPARITY REDUCTION CREDIT.] (a) Beginning with 107.16 taxes payable in 1989, class 4a, class 3a, and class 3b property 107.17 qualifies for a disparity reduction credit if: (1) the property 107.18 is located in a border city that has an enterprise zone 107.19 designated pursuant to section 469.168, subdivision 4; (2) the 107.20 property is located in a city with a population greater than 107.21 2,500 and less than 35,000 according to the 1980 decennial 107.22 census; (3) the city is adjacent to a city in another state or 107.23 immediately adjacent to a city adjacent to a city in another 107.24 state; and (4) the adjacent city in the other state has a 107.25 population of greater than 5,000 and less than 75,000. 107.26 (b) The credit is an amount sufficient to reduce (i) the 107.27 taxes levied on class 4a property to2.31.95 percent of the 107.28 property's market value and (ii) the tax on class 3a and class 107.29 3b property to 2.3 percent of market value. 107.30 (c) The county auditor shall annually certify the costs of 107.31 the credits to the department of revenue. The department shall 107.32 reimburse local governments for the property taxes foregone as 107.33 the result of the credits in proportion to their total levies. 107.34 Sec. 15. Minnesota Statutes 1999 Supplement, section 107.35 273.1398, subdivision 4a, is amended to read: 107.36 Subd. 4a. [AID OFFSET FOR COURT COSTS.] (a) By July 15, 108.1 1999, the supreme court shall determine and certify to the 108.2 commissioner of revenue for each county, other than counties 108.3 located in the eighth judicial district, the county's share of 108.4 the costs assumed under Laws 1999, chapter 216, article 7, 108.5 during the fiscal year beginning July 1, 2000, less an amount 108.6 equal to the county's share of transferred fines collected by 108.7 the district courts in the county during calendar year 1998. 108.8 (b) Payments to a county under subdivision 2 or section 108.9 273.166 for calendar year 2000 must be permanently reduced by an 108.10 amount equal to 75 percent of the net cost to the state for 108.11 assumption of district court costs as certified in paragraph (a). 108.12 (c) Payments to a county under subdivision 2 or section 108.13 273.166 for calendar year 2001 must be permanently reduced by an 108.14 amount equal to 25 percent of the net cost to the state for 108.15 assumption of district court costs as certified in paragraph (a). 108.16 (d) Payments to a county under subdivision 2 for calendar 108.17 year 2001 are permanently increased by an amount equal to 7.5 108.18 percent of the county's share of transferred fines collected by 108.19 the district courts in the county during calendar year 1998, as 108.20 determined under paragraph (a). 108.21 EFFECTIVE DATE: This section is effective for aids payable 108.22 in 2001. 108.23 Sec. 16. Minnesota Statutes 1998, section 273.37, 108.24 subdivision 3, is amended to read: 108.25 Subd. 3. Taxable wind energy conversion systems, as 108.26 defined in section 216C.06, subdivision 12, which are not owned, 108.27 operated, and exclusively controlled by the owner of the land 108.28 upon which the system is situated, must be listed and assessed 108.29 by the commissioner of revenue as personal property in the name 108.30 of the owner of the system in the taxing district where it is 108.31 situated. 108.32 EFFECTIVE DATE: This section is effective for the 2000 108.33 assessment and thereafter. 108.34 Sec. 17. [273.372] [PROCEEDINGS AND APPEALS; UTILITY 108.35 VALUATIONS.] 108.36 An appeal by a utility company concerning the exemption, 109.1 valuation, or classification on property for which the 109.2 commissioner of revenue has provided the county with 109.3 commissioner's orders or recommended values must be brought 109.4 against the commissioner in tax court or in district court of 109.5 the county where the property is located, and not against the 109.6 county or taxing district where the property is located. If the 109.7 appeal to a court is of an order of the commissioner, it must be 109.8 brought under chapter 271. If the appeal is brought under 109.9 chapter 278, the procedures in that chapter apply. This 109.10 provision applies to the property contained under sections 109.11 273.33, 273.35, 273.36, and 273.37, but only if the appealed 109.12 values have remained unchanged from those provided to the county 109.13 by the commissioner. If the exemption, valuation, or 109.14 classification being appealed has been changed by the county, 109.15 then the action must be brought under chapter 278 in the county 109.16 where the property is located. 109.17 Upon filing of any appeal by a utility company against the 109.18 commissioner, the commissioner shall give notice by first class 109.19 mail to each county which would be affected by the appeal. 109.20 Companies that submit the reports under section 273.371 by 109.21 the date specified in that section, or by the date specified by 109.22 the commissioner in an extension, may appeal administratively to 109.23 the commissioner under the procedures in section 270.11, 109.24 subdivision 6, prior to bringing an action in tax court or in 109.25 district court, however, instituting an administrative appeal 109.26 with the commissioner does not change or modify the deadline in 109.27 section 278.01 for bringing an action in tax court or district 109.28 court. 109.29 EFFECTIVE DATE: This section is effective for appeals made 109.30 on property for assessment year 1999 and thereafter. 109.31 Sec. 18. Minnesota Statutes 1998, section 275.065, 109.32 subdivision 3, is amended to read: 109.33 Subd. 3. [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 109.34 county auditor shall prepare and the county treasurer shall 109.35 deliver after November 10 and on or before November 24 each 109.36 year, by first class mail to each taxpayer at the address listed 110.1 on the county's current year's assessment roll, a notice of 110.2 proposed property taxes. 110.3 (b) The commissioner of revenue shall prescribe the form of 110.4 the notice. 110.5 (c) The notice must inform taxpayers that it contains the 110.6 amount of property taxes each taxing authority proposes to 110.7 collect for taxes payable the following year. In the case of a 110.8 town, or in the case of the state determined portion of the 110.9 school district levy, the final tax amount will be its proposed 110.10 tax. The notice must clearly state that each taxing authority, 110.11 including regional library districts established under section 110.12 134.201, and including the metropolitan taxing districts as 110.13 defined in paragraph (i), but excluding all other special taxing 110.14 districts and towns, will hold a public meeting to receive 110.15 public testimony on the proposed budget and proposed or final 110.16 property tax levy, or, in case of a school district, on the 110.17 current budget and proposed property tax levy unless the taxing 110.18 authority either: (1) elects to provide information under 110.19 subdivision 9; or (2) is exempt under subdivision 6c. It must 110.20 clearly state the time and place of each taxing authority's 110.21 meeting and an address where comments will be received by mail. 110.22 (d) The notice must state for each parcel: 110.23 (1) the market value of the property as determined under 110.24 section 273.11, and used for computing property taxes payable in 110.25 the following year and for taxes payable in the current year as 110.26 each appears in the records of the county assessor on November 1 110.27 of the current year; and, in the case of residential property, 110.28 whether the property is classified as homestead or 110.29 nonhomestead. The notice must clearly inform taxpayers of the 110.30 years to which the market values apply and that the values are 110.31 final values; 110.32 (2) the items listed below, shown separately by county, 110.33 city or town, state determined school tax net of the education 110.34 homestead credit under section 273.1382, voter approved school 110.35 levy, other local school levy, and the sum of the special taxing 110.36 districts, and as a total of all taxing authorities: 111.1 (i) the actual tax for taxes payable in the current year; 111.2 (ii) the tax change due to spending factors, defined as the 111.3 proposed tax minus the constant spending tax amount; 111.4 (iii) the tax change due to other factors, defined as the 111.5 constant spending tax amount minus the actual current year tax; 111.6 and 111.7 (iv) the proposed tax amount. 111.8 In the case of a town or the state determined school tax, 111.9 the final tax shall also be its proposed tax unless the town 111.10 changes its levy at a special town meeting under section 111.11 365.52. If a school district has certified under section 111.12 126C.17, subdivision 9, that a referendum will be held in the 111.13 school district at the November general election, the county 111.14 auditor must note next to the school district's proposed amount 111.15 that a referendum is pending and that, if approved by the 111.16 voters, the tax amount may be higher than shown on the notice. 111.17 In the case of the city of Minneapolis, the levy for the 111.18 Minneapolis library board and the levy for Minneapolis park and 111.19 recreation shall be listed separately from the remaining amount 111.20 of the city's levy. In the case of a parcel where tax increment 111.21 or the fiscal disparities areawide tax under chapter 276A or 111.22 473F applies, the proposed tax levy on the captured value or the 111.23 proposed tax levy on the tax capacity subject to the areawide 111.24 tax must each be stated separately and not included in the sum 111.25 of the special taxing districts; and 111.26 (3) the increase or decrease between the total taxes 111.27 payable in the current year and the total proposed taxes, 111.28 expressed as a percentage. 111.29 For purposes of this section, the amount of the tax on 111.30 homesteads qualifying under the senior citizens' property tax 111.31 deferral program under chapter 290B is the total amount of 111.32 property tax before subtraction of the deferred property tax 111.33 amount. 111.34 (e) The notice must clearly state that the proposed or 111.35 final taxes do not include the following: 111.36 (1) special assessments; 112.1 (2) levies approved by the voters after the date the 112.2 proposed taxes are certified, including bond referenda, school 112.3 district levy referenda, and levy limit increase referenda; 112.4 (3) amounts necessary to pay cleanup or other costs due to 112.5 a natural disaster occurring after the date the proposed taxes 112.6 are certified; 112.7 (4) amounts necessary to pay tort judgments against the 112.8 taxing authority that become final after the date the proposed 112.9 taxes are certified; and 112.10 (5) the contamination tax imposed on properties which 112.11 received market value reductions for contamination. 112.12 (f) Except as provided in subdivision 7, failure of the 112.13 county auditor to prepare or the county treasurer to deliver the 112.14 notice as required in this section does not invalidate the 112.15 proposed or final tax levy or the taxes payable pursuant to the 112.16 tax levy. 112.17 (g) If the notice the taxpayer receives under this section 112.18 lists the property as nonhomestead, and satisfactory 112.19 documentation is provided to the county assessor by the 112.20 applicable deadline, and the property qualifies for the 112.21 homestead classification in that assessment year, the assessor 112.22 shall reclassify the property to homestead for taxes payable in 112.23 the following year. 112.24 (h) In the case of class 4 residential property used as a 112.25 residence for lease or rental periods of 30 days or more, the 112.26 taxpayer must either: 112.27 (1) mail or deliver a copy of the notice of proposed 112.28 property taxes to each tenant, renter, or lessee; or 112.29 (2) post a copy of the notice in a conspicuous place on the 112.30 premises of the property. 112.31 The notice must be mailed or posted by the taxpayer by 112.32 November 27 or within three days of receipt of the notice, 112.33 whichever is later. A taxpayer may notify the county treasurer 112.34 of the address of the taxpayer, agent, caretaker, or manager of 112.35 the premises to which the notice must be mailed in order to 112.36 fulfill the requirements of this paragraph. 113.1 (i) For purposes of this subdivision, subdivisions 5a and 113.2 6, "metropolitan special taxing districts" means the following 113.3 taxing districts in the seven-county metropolitan area that levy 113.4 a property tax for any of the specified purposes listed below: 113.5 (1) metropolitan council under section 473.132, 473.167, 113.6 473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 113.7 (2) metropolitan airports commission under section 473.667, 113.8 473.671, or 473.672; and 113.9 (3) metropolitan mosquito control commission under section 113.10 473.711. 113.11 For purposes of this section, any levies made by the 113.12 regional rail authorities in the county of Anoka, Carver, 113.13 Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 113.14 398A shall be included with the appropriate county's levy and 113.15 shall be discussed at that county's public hearing or stated in 113.16 the county's Internet posting as provided in subdivision 9. 113.17 (j) If a statutory or home rule charter city or a town has 113.18 exercised the local levy option provided by section 473.388, 113.19 subdivision 7, it may include in the notice of its proposed 113.20 taxes the amount of its proposed taxes attributable to its 113.21 exercise of the option. In the first year of the city or town's 113.22 exercise of this option, the statement shall include an estimate 113.23 of the reduction of the metropolitan council's tax on the parcel 113.24 due to exercise of that option. The metropolitan council's levy 113.25 shall be adjusted accordingly. 113.26 Sec. 19. Minnesota Statutes 1999 Supplement, section 113.27 275.065, subdivision 5a, is amended to read: 113.28 Subd. 5a. [PUBLIC ADVERTISEMENT.] (a) Unless exempt under 113.29 subdivision 6c, a city that has a population of more than 2,500, 113.30 county, a metropolitan special taxing district as defined in 113.31 subdivision 3, paragraph (i), a regional library district 113.32 established under section 134.201, or school district shall 113.33 advertise in a newspaper a notice of its intent to: 113.34 (1) adopt a budget and property tax levy or, in the case of 113.35 a school district, to review its current budget and proposed 113.36 property taxes payable in the following year, at a public 114.1 hearing; or 114.2 (2) post information as provided in subdivision 9. 114.3 The notice must be published not less than two business days nor 114.4 more than six business days before the hearing or the posting of 114.5 information. 114.6 The advertisement must be at least one-eighth page in size 114.7 of a standard-size or a tabloid-size newspaper. The 114.8 advertisement must not be placed in the part of the newspaper 114.9 where legal notices and classified advertisements appear. The 114.10 advertisement must be published in an official newspaper of 114.11 general circulation in the taxing authority. The newspaper 114.12 selected must be one of general interest and readership in the 114.13 community, and not one of limited subject matter. The 114.14 advertisement must appear in a newspaper that is published at 114.15 least once per week. 114.16 For purposes of this section, the metropolitan special 114.17 taxing district's advertisement must only be published in the 114.18 Minneapolis Star and Tribune and the Saint Paul Pioneer Press. 114.19 (b) The advertisement for school districts, metropolitan 114.20 special taxing districts, and regional library districts that 114.21 are not exempt under subdivision 6c and do not elect to post 114.22 information as provided in subdivision 9 must be in the 114.23 following form, except that the notice for a school district may 114.24 include references to the current budget in regard to proposed 114.25 property taxes. 114.26 "NOTICE OF 114.27 PROPOSED PROPERTY TAXES 114.28 (School District/Metropolitan 114.29 Special Taxing District/Regional 114.30 Library District) of ......... 114.31 The governing body of ........ will soon hold budget hearings 114.32 and vote on the property taxes for (metropolitan special taxing 114.33 district/regional library district services that will be 114.34 provided in (year)/school district services that will be 114.35 provided in (year) and (year)). 114.36 NOTICE OF PUBLIC HEARING: 115.1 All concerned citizens are invited to attend a public hearing 115.2 and express their opinions on the proposed (school 115.3 district/metropolitan special taxing district/regional library 115.4 district) budget and property taxes, or in the case of a school 115.5 district, its current budget and proposed property taxes, 115.6 payable in the following year. The hearing will be held on 115.7 (Month/Day/Year) at (Time) at (Location, Address)." 115.8 (c) The advertisement for cities and counties that are not 115.9 exempt under subdivision 6c and do not elect to post information 115.10 as provided in subdivision 9 must be in the following form. 115.11 "NOTICE OF PROPOSED 115.12 TOTAL BUDGET AND PROPERTY TAXES 115.13 The (city/county) governing body or board of commissioners will 115.14 hold a public hearing to discuss the budget and to vote on the 115.15 amount of property taxes to collect for services the 115.16 (city/county) will provide in (year). 115.17 115.18 SPENDING: The total budget amounts below compare 115.19 (city's/county's) (year) total actual budget with the amount the 115.20 (city/county) proposes to spend in (year). 115.21 115.22 (Year) Total Proposed (Year) Change from 115.23 Actual Budget Budget (Year)-(Year) 115.24 115.25 $....... $....... ...% 115.26 115.27 TAXES: The property tax amounts below compare that portion of 115.28 the current budget levied in property taxes in (city/county) for 115.29 (year) with the property taxes the (city/county) proposes to 115.30 collect in (year). 115.31 115.32 (Year) Property Proposed (Year) Change from 115.33 Taxes Property Taxes (Year)-(Year) 115.34 115.35 $....... $....... ...% 115.36 116.1 ATTEND THE PUBLIC HEARING 116.2 All (city/county) residents are invited to attend the public 116.3 hearing of the (city/county) to express your opinions on the 116.4 budget and the proposed amount of (year) property taxes. The 116.5 hearing will be held on: 116.6 (Month/Day/Year/Time) 116.7 (Location/Address) 116.8 If the discussion of the budget cannot be completed, a time and 116.9 place for continuing the discussion will be announced at the 116.10 hearing. You are also invited to send your written comments to: 116.11 (City/County) 116.12 (Location/Address)" 116.13 (d) The advertisement for taxing authorities that elect to 116.14 post information under subdivision 9 must be in the following 116.15 form. 116.16 "NOTICE OF 116.17 PROPOSED PROPERTY TAX INFORMATION 116.18 The governing body of ........ will provide detailed information 116.19 on its proposed budget and property taxes for the upcoming 116.20 calendar year on an Internet Web site. The address of that Web 116.21 site is ......... This information is provided in lieu of 116.22 conducting a public meeting on the budget and proposed property 116.23 taxes. A resident of ........ or an owner of property located 116.24 in ........ may request that a copy of the information provided 116.25 at the Web site be mailed to the resident or property owner. 116.26 This information may be requested by contacting: 116.27 name (name) 116.28 at (mailing address) 116.29 or (telephone number) 116.30 or (e-mail address)" 116.31 (e) For purposes of this subdivision, the budget amounts 116.32 listed on the advertisement mean: 116.33 (1) for cities, the total government fund expenditures, as 116.34 defined by the state auditor under section 471.6965, less any 116.35 expenditures for improvements or services that are specially 116.36 assessed or charged under chapter 429, 430, 435, or the 117.1 provisions of any other law or charter; and 117.2 (2) for counties, the total government fund expenditures, 117.3 as defined by the state auditor under section 375.169, less any 117.4 expenditures for direct payments to recipients or providers for 117.5 the human service aids listed below: 117.6 (i) Minnesota family investment program under chapters 256J 117.7 and 256K; 117.8 (ii) medical assistance under sections 256B.041, 117.9 subdivision 5, and 256B.19, subdivision 1; 117.10 (iii) general assistance medical care under section 117.11 256D.03, subdivision 6; 117.12 (iv) general assistance under section 256D.03, subdivision 117.13 2; 117.14 (v) emergency assistance under section 256J.48; 117.15 (vi) Minnesota supplemental aid under section 256D.36, 117.16 subdivision 1; 117.17 (vii) preadmission screening under section 256B.0911, and 117.18 alternative care grants under section 256B.0913; 117.19 (viii) general assistance medical care claims processing, 117.20 medical transportation and related costs under section 256D.03, 117.21 subdivision 4; 117.22 (ix) medical transportation and related costs under section 117.23 256B.0625, subdivisions 17 to 18a; 117.24 (x) group residential housing under section 256I.05, 117.25 subdivision 8, transferred from programs in clauses (iv) and 117.26 (vi); or 117.27 (xi) any successor programs to those listed in clauses (i) 117.28 to (x). 117.29(e)(f) A city with a population of over 500 but not more 117.30 than 2,500 must advertise by posted notice as defined in section 117.31 645.12, subdivision 1. The advertisement must be posted at the 117.32 time provided in paragraph (a). It must be in the form required 117.33 in paragraph (b). 117.34(f)(g) For purposes of this subdivision, the population of 117.35 a city is the most recent population as determined by the state 117.36 demographer under section 4A.02. 118.1(g)(h) The commissioner of revenue, subject to the 118.2 approval of the chairs of the house and senate tax committees, 118.3 shall prescribe the form and format of the advertisement. 118.4 Sec. 20. Minnesota Statutes 1998, section 275.065, is 118.5 amended by adding a subdivision to read: 118.6 Subd. 6c. [EXEMPTION FROM PUBLIC HEARING REQUIREMENT.] A 118.7 taxing authority is exempt from the requirement to hold a public 118.8 hearing under this section if its total proposed tax does not 118.9 exceed its total tax payable in the current year by more than 118.10 one percent. 118.11 Sec. 21. Minnesota Statutes 1998, section 275.065, 118.12 subdivision 8, is amended to read: 118.13 Subd. 8. [HEARING.] (a) Notwithstanding any other 118.14 provision of law, Ramsey county, the city of St. Paul, and 118.15 independent school district No. 625are authorized to and, 118.16 except as provided in paragraph (b), shall hold their initial 118.17 public hearing jointly. The hearing must be held on the second 118.18 Tuesday of December each year. The advertisement required in 118.19 subdivision 5a may be a joint advertisement. The hearing is 118.20 otherwise subject to the requirements of this section. 118.21 Ramsey county is authorized to hold an additional initial 118.22 hearing or hearings as provided under this section, provided 118.23 that any additional hearings must not conflict with the initial 118.24 or continuation hearing dates of the other taxing districts. 118.25 However, if Ramsey county elects not to holdsuchadditional 118.26 initial hearing or hearings, the joint initial hearing required 118.27 by this subdivision must be held in a St. Paul location 118.28 convenient to residents of Ramsey county. 118.29 (b) Ramsey county, the city of St. Paul, and independent 118.30 school district No. 625 may each be exempt from the requirement 118.31 to participate in a joint public hearing under paragraph (a), if 118.32 that entity qualifies under subdivision 6c or elects to post 118.33 information under subdivision 9. 118.34 Sec. 22. Minnesota Statutes 1998, section 275.065, is 118.35 amended by adding a subdivision to read: 118.36 Subd. 9. [ALTERNATIVE TO HEARING; INFORMATION POSTED ON 119.1 INTERNET.] A taxing authority that proposes to increase its levy 119.2 over the tax payable in the current year by no more than the 119.3 percentage increase in the implicit price deflator may elect to 119.4 provide information on an Internet Web site as required under 119.5 this subdivision in lieu of conducting a hearing under 119.6 subdivision 6 or 6b. The posted information must include the 119.7 following information: 119.8 SPENDING: The total budget amounts below compare (the taxing 119.9 authority's) (year) total actual budget with the amount the 119.10 (taxing authority) proposes to spend in (year). 119.11 119.12 (Year) Total Proposed (Year) Change from 119.13 Actual Budget Budget (Year)-(Year) 119.14 119.15 $....... $....... ...% 119.16 119.17 TAXES: The property tax amounts below compare that portion of 119.18 the current budget levied in property taxes in (the taxing 119.19 authority) for (year) with the property taxes the (taxing 119.20 authority) proposes to collect in (year). 119.21 119.22 (Year) Property Proposed (Year) Change from 119.23 Taxes Property Taxes (Year)-(Year) 119.24 119.25 $....... $....... ...% 119.26 The budget amounts have the meaning provided in subdivision 119.27 5a, paragraph (e). The specific purposes for which property tax 119.28 revenues are being increased must be set forth. 119.29 The posting must also provide the name, mailing address, 119.30 telephone number, and e-mail address of an individual who will 119.31 respond to inquiries about the budget and tax information posted 119.32 on the Web site. This information is required to be posted by 119.33 the first business day after November 28. 119.34 Sec. 23. Minnesota Statutes 1998, section 275.066, is 119.35 amended to read: 119.36 275.066 [SPECIAL TAXING DISTRICTS; DEFINITION.] 120.1 For the purposes of property taxation and property tax 120.2 state aids, the term "special taxing districts" includes the 120.3 following entities: 120.4 (1) watershed districts under chapter 103D; 120.5 (2) sanitary districts under sections 115.18 to 115.37; 120.6 (3) regional sanitary sewer districts under sections 115.61 120.7 to 115.67; 120.8 (4) regional public library districts under section 120.9 134.201; 120.10 (5) park districts under chapter 398; 120.11 (6) regional railroad authorities under chapter 398A; 120.12 (7) hospital districts under sections 447.31 to 447.38; 120.13 (8) St. Cloud metropolitan transit commission under 120.14 sections 458A.01 to 458A.15; 120.15 (9) Duluth transit authority under sections 458A.21 to 120.16 458A.37; 120.17 (10) regional development commissions under sections 120.18 462.381 to 462.398; 120.19 (11) housing and redevelopment authorities under sections 120.20 469.001 to 469.047; 120.21 (12) port authorities under sections 469.048 to 469.068; 120.22 (13) economic development authorities under sections 120.23 469.090 to 469.1081; 120.24 (14) metropolitan council under sections 473.123 to 120.25 473.549; 120.26 (15) metropolitan airports commission under sections 120.27 473.601 to 473.680; 120.28 (16) metropolitan mosquito control commission under 120.29 sections 473.701 to 473.716; 120.30 (17) Morrison county rural development financing authority 120.31 under Laws 1982, chapter 437, section 1; 120.32 (18) Croft Historical Park District under Laws 1984, 120.33 chapter 502, article 13, section 6; 120.34 (19) East Lake county medical clinic district under Laws 120.35 1989, chapter 211, sections 1 to 6; 120.36 (20) Floodwood area ambulance district under Laws 1993, 121.1 chapter 375, article 5, section 39;and121.2 (21) Middle Mississippi River Watershed Management 121.3 Organization under sections 103B.211 and 103B.241; and 121.4 (22) any other political subdivision of the state of 121.5 Minnesota, excluding counties, school districts, cities, and 121.6 towns, that has the power to adopt and certify a property tax 121.7 levy to the county auditor, as determined by the commissioner of 121.8 revenue. 121.9 EFFECTIVE DATE: This section is effective for taxes levied 121.10 in 2000, payable in 2001, and thereafter. 121.11 Sec. 24. Minnesota Statutes 1999 Supplement, section 121.12 275.71, subdivision 4, is amended to read: 121.13 Subd. 4. [PROPERTY TAX LEVY LIMIT.] For taxes levied in 121.141998 and1999, the property tax levy limit for a local 121.15 governmental unit is equal to its adjusted levy limit base 121.16 determined under subdivision 3 plus any additional levy 121.17 authorized under section 275.73, which is levied against net tax 121.18 capacity, reduced by the sum of (1) the total amount of aids 121.19 that the local governmental unit is certified to receive under 121.20 sections 477A.011 to 477A.014, (2) homestead and agricultural 121.21 aids it is certified to receive under section 273.1398, (3) 121.22 local performance aid it is certified to receive under section 121.23 477A.05, (4) taconite aids under sections 298.28 and 298.282 121.24 including any aid which was required to be placed in a special 121.25 fund for expenditure in the next succeeding year but excluding 121.26 amounts allocated under section 298.28, subdivision 2, paragraph 121.27 (b), (5) flood loss aid under section 273.1383, and (6) 121.28 low-income housing aid under sections 477A.06 and 477A.065. 121.29 EFFECTIVE DATE: This section is effective for taxes levied 121.30 in 1999, payable in 2000. 121.31 Sec. 25. Minnesota Statutes 1998, section 276.19, 121.32 subdivision 1, is amended to read: 121.33 Subdivision 1. [NOTICE OF OVERPAYMENT.] If an overpayment 121.34 of property tax arises on a parcelfor any reasondue to receipt 121.35 of a payment that exceeds the total amount of the tax required 121.36 to be paid on the property tax statement, the responsible county 122.1 official shall promptly notify the payer by regular mail that 122.2 the overpayment has occurred. The notice must state the amount 122.3 of overpayment and identify the parcel on which the overpayment 122.4 occurred. The notice must also instruct the payer how to claim 122.5 the overpayment and advise that the overpayment is subject to 122.6 forfeiture under this section. If the name or address of the 122.7 payer is not known, the notice of unclaimed overpayment must be 122.8 mailed to the taxpayer of record in the office of the county 122.9 auditor. 122.10 EFFECTIVE DATE: This section is effective for overpayment 122.11 of taxes made the day following final enactment and thereafter 122.12 and applies only to taxes levied in 1999, payable in 2000, and 122.13 thereafter. 122.14 Sec. 26. [278.14] [REFUNDS OF MISTAKENLY BILLED TAXES.] 122.15 Subdivision 1. [APPLICABILITY.] A county must pay a refund 122.16 of a mistakenly billed tax as provided in this section. As used 122.17 in this section, "mistakenly billed tax" means an amount of 122.18 property tax that was billed, to the extent the amount billed 122.19 exceeds the accurate tax amount due to a misclassification of 122.20 property or a mathematical error in the calculation of the tax, 122.21 together with any penalty or interest paid on that amount. This 122.22 section applies only to taxes payable in the current year and 122.23 the two prior years. As used in this section, "mathematical 122.24 error" is limited to an error in: 122.25 (1) converting the market value of a property to tax 122.26 capacity; 122.27 (2) application of the tax rate to the property's tax 122.28 capacity; or 122.29 (3) calculation of or eligibility for a credit. 122.30 Subd. 2. [PROCEDURE.] A refund of mistakenly billed tax 122.31 must be paid upon verification of a claim made in a written 122.32 application by the owner of the property or upon discovery of 122.33 the mistakenly billed tax by the county. Refunds of 122.34 overpayments will be made as provided in section 278.12. 122.35 Subd. 3. [APPEALS.] If the county rejects a claim by a 122.36 property owner under subdivision 2, it must notify the property 123.1 owner of that decision within 90 days of receipt of the claim. 123.2 The property owner may appeal that decision to the tax court 123.3 within 60 days after receipt of a notice from the county of the 123.4 decision. Relief granted by the tax court is limited to current 123.5 year taxes, and taxes in the two prior years. 123.6 EFFECTIVE DATE: This section is effective for overpayment 123.7 of taxes made the day following final enactment and thereafter 123.8 and applies only to taxes levied in 1999, payable in 2000, and 123.9 thereafter. 123.10 Sec. 27. Minnesota Statutes 1999 Supplement, section 123.11 290B.03, subdivision 1, is amended to read: 123.12 Subdivision 1. [PROGRAM QUALIFICATIONS.] The 123.13 qualifications for the senior citizens' property tax deferral 123.14 program are as follows: 123.15 (1) the property must be owned and occupied as a homestead 123.16 by a person 65 years of age or older. In the case of a married 123.17 couple, both of the spouses must be at least 65 years old at the 123.18 time the first property tax deferral is granted, regardless of 123.19 whether the property is titled in the name of one spouse or both 123.20 spouses, or titled in another way that permits the property to 123.21 have homestead status; 123.22 (2) the total household income of the qualifying 123.23 homeowners, as defined in section 290A.03, subdivision 5, for 123.24 the calendar year preceding the year of the initial application 123.25 may not exceed $60,000; 123.26 (3) the homestead must have been owned and occupied as the 123.27 homestead of at least one of the qualifying homeowners for at 123.28 least 15 years prior to the year the initial application is 123.29 filed; 123.30 (4)there are no delinquent property taxes, penalties, or123.31interest on the homesteaded property;123.32(5) there are no delinquent special assessments on the123.33homesteaded property;123.34(6)there are no state or federal tax liens or judgment 123.35 liens on the homesteaded property; 123.36(7)(5) there are no mortgages or other liens on the 124.1 property that secure future advances, except for those subject 124.2 to credit limits that result in compliance with clause(8)(6); 124.3 and 124.4(8)(6) the total unpaid balances of debts secured by 124.5 mortgages and other liens on the property, including unpaid 124.6 special assessments and delinquent property taxes, penalties, 124.7 and interest, but not including property taxes payable during 124.8 the year, does not exceed3075 percent of the assessor's 124.9 estimated market value for the year. 124.10 Sec. 28. Minnesota Statutes 1998, section 290B.04, is 124.11 amended by adding a subdivision to read: 124.12 Subd. 7. [PAYMENT OF DELINQUENT TAXES AND 124.13 ASSESSMENTS.] Upon approval of a senior citizen's initial 124.14 application, the commissioner of revenue shall pay to the 124.15 treasurer of the county where the property is located the amount 124.16 of any delinquent property taxes, penalties, interest, and 124.17 delinquent special assessments on the property which is the 124.18 subject of the application. 124.19 Sec. 29. Minnesota Statutes 1999 Supplement, section 124.20 290B.05, subdivision 1, is amended to read: 124.21 Subdivision 1. [DETERMINATION BY COMMISSIONER.] The 124.22 commissioner shall determine each qualifying homeowner's "annual 124.23 maximum property tax amount" following approval of the 124.24 homeowner's initial application and following the receipt of a 124.25 resumption of eligibility certification. The "annual maximum 124.26 property tax amount" equals three percent of the homeowner's 124.27 total household income for the year preceding either the initial 124.28 application or the resumption of eligibility certification, 124.29 whichever is applicable. Following approval of the initial 124.30 application, the commissioner shall determine the qualifying 124.31 homeowner's "maximum allowable deferral." No tax may be 124.32 deferred relative to the appropriate assessment year for any 124.33 homeowner whose total household income for the previous year 124.34 exceeds $60,000. No tax shall be deferred in any year in which 124.35 the homeowner does not meet the program qualifications in 124.36 section 290B.03. The maximum allowable total deferral is equal 125.1 to 75 percent of the assessor's estimated market value for the 125.2 year, less the balance of any mortgage loans and other amounts 125.3 secured by liens against the property at the time of 125.4 application, including any unpaid special assessments and any 125.5 delinquent property taxes, penalties, and interest, but not 125.6 including property taxes payable during the year. 125.7 Sec. 30. Minnesota Statutes 1998, section 290B.05, 125.8 subdivision 3, is amended to read: 125.9 Subd. 3. [CALCULATION OF DEFERRED PROPERTY TAX AMOUNT.] 125.10 When final property tax amounts for the following year have been 125.11 determined, the county auditor shall calculate the "deferred 125.12 property tax amount." The deferred property tax amount is equal 125.13 to the lesser of (1) the maximum allowable deferral for the 125.14 year; or (2) the difference between the total amount of property 125.15 taxes levied upon the qualifying homestead by all taxing 125.16 jurisdictions and the maximum property tax amount. Any special 125.17 assessments levied by any local unit of government must not be 125.18 included in the total tax used to calculate the deferred tax 125.19 amount.No deferral of the current year's property taxes is125.20allowed if there are any delinquent property taxes or delinquent125.21special assessments for any previous year.Any tax attributable 125.22 to new improvements made to the property after the initial 125.23 application has been approved under section 290B.04, subdivision 125.24 2, must be excluded when determining any subsequent deferred 125.25 property tax amount. The county auditor shall annually, on or 125.26 before April 15, certify to the commissioner of revenue the 125.27 property tax deferral amounts determined under this subdivision 125.28 by property and by owner. 125.29 Sec. 31. Minnesota Statutes 1998, section 290B.07, is 125.30 amended to read: 125.31 290B.07 [LIEN; DEFERRED PORTION.] 125.32 (a) Payment by the state to the county treasurer 125.33 of property taxes, penalties, interest, or special assessments 125.34 deferred under thissectionchapter is deemed a loan from the 125.35 state to the program participant. The commissioner must compute 125.36 the interest as provided in section 270.75, subdivision 5, but 126.1 not to exceed five percent, and maintain records of the total 126.2 deferred amount and interest for each participant. Interest 126.3 shall accrue beginning September 1 of the payable year for which 126.4 the taxes are deferred. Any deferral made under this chapter 126.5 shall not be construed as delinquent property taxes. 126.6 The lien created under section 272.31 continues to secure 126.7 payment by the taxpayer, or by the taxpayer's successors or 126.8 assigns, of the amount deferred, including interest, with 126.9 respect to all years for which amounts are deferred. The lien 126.10 for deferred taxes and interest has the same priority as any 126.11 other lien under section 272.31, except that liens, including 126.12 mortgages, recorded or filed prior to the recording or filing of 126.13 the notice under section 290B.04, subdivision 2, have priority 126.14 over the lien for deferred taxes and interest. A seller's 126.15 interest in a contract for deed, in which a qualifying homeowner 126.16 is the purchaser or an assignee of the purchaser, has priority 126.17 over deferred taxes and interest on deferred taxes, regardless 126.18 of whether the contract for deed is recorded or filed. The lien 126.19 for deferred taxes and interest for future years has the same 126.20 priority as the lien for deferred taxes and interest for the 126.21 first year, which is always higher in priority than any 126.22 mortgages or other liens filed, recorded, or created after the 126.23 notice recorded or filed under section 290B.04, subdivision 2. 126.24 The county treasurer or auditor shall maintain records of the 126.25 deferred portion and shall list the amount of deferred taxes for 126.26 the year and the cumulative deferral and interest for all 126.27 previous years as a lien against the property. In any 126.28 certification of unpaid taxes for a tax parcel, the county 126.29 auditor shall clearly distinguish between taxes payable in the 126.30 current year, deferred taxes and interest, and delinquent 126.31 taxes. Payment of the deferred portion becomes due and owing at 126.32 the time specified in section 290B.08. Upon receipt of the 126.33 payment, the commissioner shall issue a receipt for it to the 126.34 person making the payment upon request and shall notify the 126.35 auditor of the county in which the parcel is located, within ten 126.36 days, identifying the parcel to which the payment applies. Upon 127.1 receipt by the commissioner of revenue of collected funds in the 127.2 amount of the deferral, the state's loan to the program 127.3 participant is deemed paid in full. 127.4 (b) If property for which taxes have been deferred under 127.5 this chapter forfeits under chapter 281 for nonpayment of a 127.6 nondeferred property tax amount, or because of nonpayment of 127.7 amounts previously deferred following a termination under 127.8 section 290B.08, the lien for the taxes deferred under this 127.9 chapter, plus interest and costs, shall be canceled by the 127.10 county auditor as provided in section 282.07. However, 127.11 notwithstanding any other law to the contrary, any proceeds from 127.12 a subsequent sale of the property under chapter 282 or another 127.13 law, must be used to first reimburse the county's forfeited tax 127.14 sale fund for any direct costs of selling the property or any 127.15 costs directly related to preparing the property for sale, and 127.16 then to reimburse the state for the amount of the canceled 127.17 lien. Within 90 days of the receipt of any sale proceed to 127.18 which the state is entitled under these provisions, the county 127.19 auditor must pay those funds to the commissioner of revenue by 127.20 warrant for deposit in the general fund. No other deposit, use, 127.21 distribution, or release of gross sale proceeds or receipts may 127.22 be made by the county until payments sufficient to fully 127.23 reimburse the state for the canceled lien amount have been 127.24 transmitted to the commissioner. 127.25 EFFECTIVE DATE: This section and sections 24 to 27 apply 127.26 to all homeowners and all property taxes deferred beginning in 127.27 payable 2001, including those homeowners who initially qualified 127.28 under this program for taxes payable in 1999 or 2000, except 127.29 that if a homeowner did not qualify for any property tax 127.30 deferral for payable 2000 because of the percentage threshold in 127.31 Minnesota Statutes, section 290B.03, subdivision 1, paragraph 127.32 (8), or the prohibition on qualification of owners of property 127.33 with delinquent taxes or special assessments, and now qualifies 127.34 for the program with the changes in those provisions, the 127.35 homeowner may apply to the commissioner by July 1, 2000, and 127.36 request a retroactive qualification into the program for taxes 128.1 payable in 2000. The commissioner of revenue shall notify the 128.2 county auditor of such eligible taxpayers. The commissioner 128.3 shall make payment to the county for the appropriate amount due 128.4 for taxes payable in 2000, and the county treasurer shall refund 128.5 the taxpayer for any excess tax amount that the taxpayer has 128.6 paid to the county. 128.7 Sec. 32. Minnesota Statutes 1998, section 290B.08, 128.8 subdivision 1, is amended to read: 128.9 Subdivision 1. [TERMINATION.] (a) The deferral of taxes 128.10 granted under this chapter terminates when one of the following 128.11 occurs: 128.12 (1) the property is sold or transferred; 128.13 (2) the death oftheall qualifying 128.14homeowner(s)homeowners; 128.15 (3) the homeowner notifies the commissioner in writing that 128.16 the homeowner desires to discontinue the deferral; or 128.17 (4) the property no longer qualifies as a homestead. 128.18 (b) A property is not terminated from the program because 128.19 no deferred property tax amount is determined on the homestead 128.20 for any given year after the homestead's initial enrollment into 128.21 the program. 128.22 EFFECTIVE DATE: This section is effective for deferrals of 128.23 property taxes payable in 2001 and thereafter. 128.24 Sec. 33. Minnesota Statutes 1998, section 290B.08, 128.25 subdivision 2, is amended to read: 128.26 Subd. 2. [PAYMENT UPON TERMINATION.] Upon the termination 128.27 of the deferral under subdivision 1, the amount of deferred 128.28 taxesand, penalties, interest, and special assessments, plus 128.29 the recording or filing fees under both section 290B.04, 128.30 subdivision 2, and this subdivision becomes due and payable to 128.31 the commissioner within 90 days of termination of the deferral 128.32 for terminations under subdivision 1, paragraph (a), clauses (1) 128.33 and (2), and within one year of termination of the deferral for 128.34 terminations under subdivision 1, paragraph (a), clauses (3) and 128.35 (4). No additional interest is due on the deferral if timely 128.36 paid. On receipt of payment, the commissioner shall within ten 129.1 days notify the auditor of the county in which the parcel is 129.2 located, identifying the parcel to which the payment applies and 129.3 shall remit the recording or filing fees under section 290B.04, 129.4 subdivision 2, and this subdivision to the auditor. A notice of 129.5 termination of deferral, containing the legal description and 129.6 the recording or filing data for the notice of qualification for 129.7 deferral under section 290B.04, subdivision 2, shall be prepared 129.8 and recorded or filed by the county auditor in the same office 129.9 in which the notice of qualification for deferral under section 129.10 290B.04, subdivision 2, was recorded or filed, and the county 129.11 auditor shall mail a copy of the notice of termination to the 129.12 property owner. The property owner shall pay the recording or 129.13 filing fees. Upon recording or filing of the notice of 129.14 termination of deferral, the notice of qualification for 129.15 deferral under section 290B.04, subdivision 2, and the lien 129.16 created by it are discharged. If the deferral is not timely 129.17 paid, the penalty, interest, lien, forfeiture, and other rules 129.18 for the collection of ad valorem property taxes apply. 129.19 Sec. 34. Minnesota Statutes 1998, section 290B.09, 129.20 subdivision 2, is amended to read: 129.21 Subd. 2. [APPROPRIATION.] An amount sufficient to pay the 129.22 total amount of property tax determined under subdivision 1, 129.23 plus any amounts paid under section 290B.04, subdivision 7, is 129.24 annually appropriated from the general fund to the commissioner 129.25 of revenue. 129.26 EFFECTIVE DATE: This section and section 30 apply to all 129.27 homeowners and all property taxes deferred beginning in payable 129.28 2001, including those homeowners who initially qualified under 129.29 this program for taxes payable in 1999 or 2000, except that if a 129.30 homeowner did not qualify for any property tax deferral for 129.31 payable 2000 because of the percentage threshold in Minnesota 129.32 Statutes, section 290B.03, subdivision 1, paragraph (8), or the 129.33 prohibition on qualification of owners of property with 129.34 delinquent taxes or special assessments, and now qualifies for 129.35 the program with the changes in those provisions, the homeowner 129.36 may apply to the commissioner by July 1, 2000, and request a 130.1 retroactive qualification into the program for taxes payable in 130.2 2000. The commissioner of revenue shall notify the county 130.3 auditor of such eligible taxpayers. The commissioner shall make 130.4 payment to the county for the appropriate amount due for taxes 130.5 payable in 2000, and the county treasurer shall refund the 130.6 taxpayer for any excess tax amount that the taxpayer has paid to 130.7 the county. 130.8 Sec. 35. Minnesota Statutes 1998, section 429.011, 130.9 subdivision 2a, is amended to read: 130.10 Subd. 2a. [MUNICIPALITY.] "Municipality" also includes a 130.11 county in the case of construction, reconstruction, or 130.12 improvement of a county state-aid highway or county highway as 130.13 defined in section 160.02 including curbs and gutters and storm 130.14 sewersand includes; a county exercising its powers and duties 130.15 under section 444.075, subdivision 1; and a county for expenses 130.16 not paid for under section 403.113, subdivision 3, paragraph 130.17 (b), clause (3). 130.18 Sec. 36. Minnesota Statutes 1998, section 429.011, 130.19 subdivision 5, is amended to read: 130.20 Subd. 5. [IMPROVEMENT.] "Improvement" means any type of 130.21 improvement made under authority granted by section 429.021,130.22and. In the case of a county, improvement is limited to: 130.23 (1) the construction, reconstruction, or improvement of a 130.24 county state-aid highway or county highway including curbs and 130.25 gutters and storm sewers; and 130.26 (2) the purchase, installation, or replacement of signs, 130.27 posts, and markers for addressing related to the operation of 130.28 enhanced 911 telephone service. 130.29 Sec. 37. Minnesota Statutes 1998, section 429.021, 130.30 subdivision 1, is amended to read: 130.31 Subdivision 1. [IMPROVEMENTS AUTHORIZED.] The council of a 130.32 municipality shall have power to make the following improvements: 130.33 (1) To acquire, open, and widen any street, and to improve 130.34 the same by constructing, reconstructing, and maintaining 130.35 sidewalks, pavement, gutters, curbs, and vehicle parking strips 130.36 of any material, or by grading, graveling, oiling, or otherwise 131.1 improving the same, including the beautification thereof and 131.2 including storm sewers or other street drainage and connections 131.3 from sewer, water, or similar mains to curb lines. 131.4 (2) To acquire, develop, construct, reconstruct, extend, 131.5 and maintain storm and sanitary sewers and systems, including 131.6 outlets, holding areas and ponds, treatment plants, pumps, lift 131.7 stations, service connections, and other appurtenances of a 131.8 sewer system, within and without the corporate limits. 131.9 (3) To construct, reconstruct, extend, and maintain steam 131.10 heating mains. 131.11 (4) To install, replace, extend, and maintain street lights 131.12 and street lighting systems and special lighting systems. 131.13 (5) To acquire, improve, construct, reconstruct, extend, 131.14 and maintain water works systems, including mains, valves, 131.15 hydrants, service connections, wells, pumps, reservoirs, tanks, 131.16 treatment plants, and other appurtenances of a water works 131.17 system, within and without the corporate limits. 131.18 (6) To acquire, improve and equip parks, open space areas, 131.19 playgrounds, and recreational facilities within or without the 131.20 corporate limits. 131.21 (7) To plant trees on streets and provide for their 131.22 trimming, care, and removal. 131.23 (8) To abate nuisances and to drain swamps, marshes, and 131.24 ponds on public or private property and to fill the same. 131.25 (9) To construct, reconstruct, extend, and maintain dikes 131.26 and other flood control works. 131.27 (10) To construct, reconstruct, extend, and maintain 131.28 retaining walls and area walls. 131.29 (11) To acquire, construct, reconstruct, improve, alter, 131.30 extend, operate, maintain, and promote a pedestrian skyway 131.31 system. Such improvement may be made upon a petition pursuant 131.32 to section 429.031, subdivision 3. 131.33 (12) To acquire, construct, reconstruct, extend, operate, 131.34 maintain, and promote underground pedestrian concourses. 131.35 (13) To acquire, construct, improve, alter, extend, 131.36 operate, maintain, and promote public malls, plazas or 132.1 courtyards. 132.2 (14) To construct, reconstruct, extend, and maintain 132.3 district heating systems. 132.4 (15) To construct, reconstruct, alter, extend, operate, 132.5 maintain, and promote fire protection systems in existing 132.6 buildings, but only upon a petition pursuant to section 429.031, 132.7 subdivision 3. 132.8 (16) To acquire, construct, reconstruct, improve, alter, 132.9 extend, and maintain highway sound barriers. 132.10 (17) To improve, construct, reconstruct, extend, and 132.11 maintain gas and electric distribution facilities owned by a 132.12 municipal gas or electric utility. 132.13 (18) To purchase, install, and replace signs, posts, and 132.14 other markers for addressing related to the operation of 132.15 enhanced 911 telephone service. 132.16 Sec. 38. Minnesota Statutes 1998, section 429.031, 132.17 subdivision 1, is amended to read: 132.18 Subdivision 1. [PREPARATION OF PLANS, NOTICE OF HEARING.] 132.19 (a) Before the municipality awards a contract for an improvement 132.20 or orders it made by day labor, or before the municipality may 132.21 assess any portion of the cost of an improvement to be made 132.22 under a cooperative agreement with the state or another 132.23 political subdivision for sharing the cost of making the 132.24 improvement, the council shall hold a public hearing on the 132.25 proposed improvement following two publications in the newspaper 132.26 of a notice stating the time and place of the hearing, the 132.27 general nature of the improvement, the estimated cost, and the 132.28 area proposed to be assessed. The two publications must be a 132.29 week apart, and the hearing must be at least three days after 132.30 the second publication. Not less than ten days before the 132.31 hearing, notice of the hearing must also be mailed to the owner 132.32 of each parcel within the area proposed to be assessed with a 132.33 reasonable estimate of the amount to be assessed against each 132.34 parcel, but failure to give mailed notice or any defects in the 132.35 notice does not invalidate the proceedings. For the purpose of 132.36 giving mailed notice, owners are those shown as owners on the 133.1 records of the county auditor or, in any county where tax 133.2 statements are mailed by the county treasurer, on the records of 133.3 the county treasurer; but other appropriate records may be used 133.4 for this purpose. For properties that are tax exempt or subject 133.5 to taxation on a gross earnings basis and are not listed on the 133.6 records of the county auditor or the county treasurer, the 133.7 owners may be ascertained by any practicable means, and mailed 133.8 notice must be given them as provided in this subdivision. 133.9 (b) Before the adoption of a resolution ordering the 133.10 improvement, the council shall secure from the city engineer or 133.11 some other competent person of its selection a report advising 133.12 it in a preliminary way as to whether the proposed improvement 133.13 is necessary, cost-effective, and feasible and as to whether it 133.14 should best be made as proposed or in connection with some other 133.15 improvement. The report must also include the estimated cost of 133.16 the improvement as recommended with a reasonable estimate of the 133.17 amount to be assessed against each parcel. No error or omission 133.18 in the report invalidates the proceeding unless it materially 133.19 prejudices the interests of an owner. 133.20 (c) If the report is not prepared by an employee of a 133.21 municipality, the compensation for preparing the report under 133.22 this subdivision must be based on the following factors: 133.23 (1) the time and labor required; 133.24 (2) the experience and knowledge of the preparer; 133.25 (3) the complexity and novelty of the problems involved; 133.26 and 133.27 (4) the extent of the responsibilities assumed. 133.28 (d) The compensation must not be based primarily on a 133.29 percentage of the estimated cost of the improvement. 133.30 (e) The council may also take other steps prior to the 133.31 hearing, including, among other things, the preparation of plans 133.32 and specifications and the advertisement for bids that will in 133.33 its judgment provide helpful information in determining the 133.34 desirability and feasibility of the improvement. 133.35 (f) The hearing may be adjourned from time to time, and a 133.36 resolution ordering the improvement may be adopted at any time 134.1 within six months after the date of the hearing by vote of a 134.2 majority of all members of the council when the improvement has 134.3 been petitioned for by the owners of not less than 35 percent in 134.4 frontage of the real property abutting on the streets named in 134.5 the petition as the location of the improvement. When there has 134.6 been no such petition, the resolution may be adopted only by 134.7 vote of four-fifths of all members of the council; provided that 134.8 if the mayor of the municipality is a member of the council but 134.9 has no vote or votes only in case of a tie, the mayor is not 134.10 deemed to be a member for the purpose of determining a 134.11 four-fifths majority vote. 134.12 (g) The resolution ordering the improvement may reduce, but 134.13 not increase, the extent of the improvement as stated in the 134.14 notice of hearing. 134.15 Sec. 39. Minnesota Statutes 1998, section 469.040, is 134.16 amended by adding a subdivision to read: 134.17 Subd. 5. [DESIGNATED HOUSING CORPORATIONS.] Property 134.18 located within the exterior boundaries of the White Earth Indian 134.19 reservation that is owned by the tribe's designated housing 134.20 entity as defined in United States Code, title 25, section 4103, 134.21 paragraph 21, and that is a housing project or a housing 134.22 development project, as defined in section 469.002, subdivisions 134.23 13 and 15, is exempt from all real and personal property taxes 134.24 of the city, county, state, or any political subdivision 134.25 thereof, but the property is subject to subdivision 3. A copy 134.26 of those portions of the annual reports submitted on behalf of 134.27 the housing entity to the secretary of the United States 134.28 Department of Housing and Urban Development for the project that 134.29 contain information sufficient to determine the amount due under 134.30 subdivision 3 satisfies the reporting requirements of 134.31 subdivision 3 for the project. 134.32 Sec. 40. Minnesota Statutes 1999 Supplement, section 134.33 473.39, subdivision 1g, is amended to read: 134.34 Subd. 1g. [OBLIGATIONS; 2000-2002.] In addition to the 134.35 authority in subdivisions 1a, 1b, 1c, 1d, and 1e, the council 134.36 may issue certificates of indebtedness, bonds, or other 135.1 obligations under this section in an amount not exceeding 135.2$36,000,000$55,400,000, which may be used for capital 135.3 expenditures, other than for construction, maintenance, or 135.4 operation of light rail transit, as prescribed in the council's 135.5 transit capital improvement program and for related costs, 135.6 including the costs of issuance and sale of the obligations. 135.7 The funds must be proportionally spent on capital improvement 135.8 projects as recommended by the regional transit capital 135.9 evaluation committee. This section applies in the counties of 135.10 Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. 135.11 Sec. 41. Minnesota Statutes 1998, section 473.39, is 135.12 amended by adding a subdivision to read: 135.13 Subd. 1h. [OBLIGATIONS.] (a) After July 1, 2001, in 135.14 addition to the authority in subdivisions 1a, 1b, 1c, 1d, 1e, 135.15 and 1g, the council may issue certificates of indebtedness, 135.16 bonds, or other obligations under this section for capital 135.17 expenditures as prescribed in the council's regional transit 135.18 master plan and transit capital improvement program and for 135.19 related costs including the costs of issuance and sale of the 135.20 obligations. The amount of the obligations issued under this 135.21 subdivision in any year may not exceed an amount equal to the 135.22 following limitations, except as provided in this subdivision: 135.23 (1) for 2002, the limitation is $40,000,000; and 135.24 (2) for each subsequent year, the limitation is equal to 135.25 the previous year's limitation calculated under this subdivision 135.26 adjusted for inflation using the United States Department of 135.27 Labor's Bureau of Labor Statistics Minneapolis-St. Paul Consumer 135.28 Price Index for All Urban Consumers (CPI-U) for the previous 135.29 taxes payable year or three percent, whichever amount is less. 135.30 (b) In any year in which the council does not issue 135.31 obligations totaling the limitation calculated under this 135.32 subdivision, the council's limitation for the following year is 135.33 increased by the difference between the previous year's 135.34 limitation calculated under this subdivision and the amount 135.35 issued in the previous year, or 20 percent of the previous 135.36 year's limitation, whichever is less. Any limitation increase 136.1 carried forward under this subdivision is available only in the 136.2 following year and is not a permanent increase in the annual 136.3 limitation calculated under this subdivision. 136.4 Sec. 42. Minnesota Statutes 1999 Supplement, section 136.5 477A.011, subdivision 36, is amended to read: 136.6 Subd. 36. [CITY AID BASE.] (a) Except as provided in 136.7 paragraphs (b) to(k)(n), "city aid base" means, for each city, 136.8 the sum of the local government aid and equalization aid it was 136.9 originally certified to receive in calendar year 1993 under 136.10 Minnesota Statutes 1992, section 477A.013, subdivisions 3 and 5, 136.11 and the amount of disparity reduction aid it received in 136.12 calendar year 1993 under Minnesota Statutes 1992, section 136.13 273.1398, subdivision 3. 136.14 (b) For aids payable in 1996 and thereafter, a city that in 136.15 1992 or 1993 transferred an amount from governmental funds to 136.16 its sewer and water fund, which amount exceeded its net levy for 136.17 taxes payable in the year in which the transfer occurred, has a 136.18 "city aid base" equal to the sum of (i) its city aid base, as 136.19 calculated under paragraph (a), and (ii) one-half of the 136.20 difference between its city aid distribution under section 136.21 477A.013, subdivision 9, for aids payable in 1995 and its city 136.22 aid base for aids payable in 1995. 136.23 (c) The city aid base for any city with a population less 136.24 than 500 is increased by $40,000 for aids payable in calendar 136.25 year 1995 and thereafter, and the maximum amount of total aid it 136.26 may receive under section 477A.013, subdivision 9, paragraph 136.27 (c), is also increased by $40,000 for aids payable in calendar 136.28 year 1995 only, provided that: 136.29 (i) the average total tax capacity rate for taxes payable 136.30 in 1995 exceeds 200 percent; 136.31 (ii) the city portion of the tax capacity rate exceeds 100 136.32 percent; and 136.33 (iii) its city aid base is less than $60 per capita. 136.34 (d) The city aid base for a city is increased by $20,000 in 136.35 1998 and thereafter and the maximum amount of total aid it may 136.36 receive under section 477A.013, subdivision 9, paragraph (c), is 137.1 also increased by $20,000 in calendar year 1998 only, provided 137.2 that: 137.3 (i) the city has a population in 1994 of 2,500 or more; 137.4 (ii) the city is located in a county, outside of the 137.5 metropolitan area, which contains a city of the first class; 137.6 (iii) the city's net tax capacity used in calculating its 137.7 1996 aid under section 477A.013 is less than $400 per capita; 137.8 and 137.9 (iv) at least four percent of the total net tax capacity, 137.10 for taxes payable in 1996, of property located in the city is 137.11 classified as railroad property. 137.12 (e) The city aid base for a city is increased by $200,000 137.13 in 1999 and thereafter and the maximum amount of total aid it 137.14 may receive under section 477A.013, subdivision 9, paragraph 137.15 (c), is also increased by $200,000 in calendar year 1999 only, 137.16 provided that: 137.17 (i) the city was incorporated as a statutory city after 137.18 December 1, 1993; 137.19 (ii) its city aid base does not exceed $5,600; and 137.20 (iii) the city had a population in 1996 of 5,000 or more. 137.21 (f) The city aid base for a city is increased by $450,000 137.22 in 1999 to 2008 and the maximum amount of total aid it may 137.23 receive under section 477A.013, subdivision 9, paragraph (c), is 137.24 also increased by $450,000 in calendar year 1999 only, provided 137.25 that: 137.26 (i) the city had a population in 1996 of at least 50,000; 137.27 (ii) its population had increased by at least 40 percent in 137.28 the ten-year period ending in 1996; and 137.29 (iii) its city's net tax capacity for aids payable in 1998 137.30 is less than $700 per capita. 137.31 (g) Beginning in 2002, the city aid base for a city is 137.32 equal to the sum of its city aid base in 2001 and the amount of 137.33 additional aid it was certified to receive under section 477A.06 137.34 in 2001. For 2002 only, the maximum amount of total aid a city 137.35 may receive under section 477A.013, subdivision 9, paragraph 137.36 (c), is also increased by the amount it was certified to receive 138.1 under section 477A.06 in 2001. 138.2 (h) The city aid base for a city is increased by $150,000 138.3 for aids payable in 2000 and thereafter, and the maximum amount 138.4 of total aid it may receive under section 477A.013, subdivision 138.5 9, paragraph (c), is also increased by $150,000 in calendar year 138.6 2000 only, provided that: 138.7 (1) the city has a population that is greater than 1,000 138.8 and less than 2,500; 138.9 (2) its commercial and industrial percentage for aids 138.10 payable in 1999 is greater than 45 percent; and 138.11 (3) the total market value of all commercial and industrial 138.12 property in the city for assessment year 1999 is at least 15 138.13 percent less than the total market value of all commercial and 138.14 industrial property in the city for assessment year 1998. 138.15 (i) The city aid base for a city is increased by $200,000 138.16 in 2000 and thereafter, and the maximum amount of total aid it 138.17 may receive under section 477A.013, subdivision 9, paragraph 138.18 (c), is also increased by $200,000 in calendar year 2000 only, 138.19 provided that: 138.20 (1) the city had a population in 1997 of 2,500 or more; 138.21 (2) the net tax capacity of the city used in calculating 138.22 its 1999 aid under section 477A.013 is less than $650 per 138.23 capita; 138.24 (3) the pre-1940 housing percentage of the city used in 138.25 calculating 1999 aid under section 477A.013 is greater than 12 138.26 percent; 138.27 (4) the 1999 local government aid of the city under section 138.28 477A.013 is less than 20 percent of the amount that the formula 138.29 aid of the city would have been if the need increase percentage 138.30 was 100 percent; and 138.31 (5) the city aid base of the city used in calculating aid 138.32 under section 477A.013 is less than $7 per capita. 138.33 (j) The city aid base for a city is increased by $225,000 138.34 in calendar years 2000 to 2002 and the maximum amount of total 138.35 aid it may receive under section 477A.013, subdivision 9, 138.36 paragraph (c), is also increased by $225,000 in calendar year 139.1 2000 only, provided that: 139.2 (1) the city had a population of at least 5,000; 139.3 (2) its population had increased by at least 50 percent in 139.4 the ten-year period ending in 1997; 139.5 (3) the city is located outside of the Minneapolis-St. Paul 139.6 metropolitan statistical area as defined by the United States 139.7 Bureau of the Census; and 139.8 (4) the city received less than $30 per capita in aid under 139.9 section 477A.013, subdivision 9, for aids payable in 1999. 139.10 (k) The city aid base for a city is increased by $102,000 139.11 in 2000 and thereafter, and the maximum amount of total aid it 139.12 may receive under section 477A.013, subdivision 9, paragraph 139.13 (c), is also increased by $102,000 in calendar year 2000 only, 139.14 provided that: 139.15 (1) the city has a population in 1997 of 2,000 or more; 139.16 (2) the net tax capacity of the city used in calculating 139.17 its 1999 aid under section 477A.013 is less than $455 per 139.18 capita; 139.19 (3) the net levy of the city used in calculating 1999 aid 139.20 under section 477A.013 is greater than $195 per capita; and 139.21 (4) the 1999 local government aid of the city under section 139.22 477A.013 is less than 38 percent of the amount that the formula 139.23 aid of the city would have been if the need increase percentage 139.24 was 100 percent. 139.25 (l) In addition to the increase the city receives under 139.26 section 43, the city aid base for a city is increased by $23,000 139.27 in 2001 and thereafter, and the maximum amount of total aid it 139.28 may receive under section 477A.013, subdivision 9, paragraph 139.29 (c), is also increased by $32,000 in calendar year 2001 only, 139.30 provided that: 139.31 (1) the city has a population in 1998 that is greater than 139.32 200 but less than 500; 139.33 (2) the city's revenue need used in calculating aids 139.34 payable in 2000 was greater than $200 per capita; 139.35 (3) the city net tax capacity for the city, used in 139.36 calculating aids available in 2000 was equal to or less than 140.1 $200 per capita; 140.2 (4) the city aid base of the city used in calculating aid 140.3 under section 477A.013 is less than $65 per capita; and 140.4 (5) the city's formula aid for aids payable in 2000 was 140.5 greater than zero. 140.6 (m) In addition to the increase the city receives under 140.7 section 43, the city aid base for a city is increased by 140.8 $100,000 in 2001 and thereafter, and the maximum amount of total 140.9 aid it may receive under section 477A.013, subdivision 9, 140.10 paragraph (c), is also increased by $184,000 in calendar year 140.11 2001 only, provided that: 140.12 (1) the net tax capacity of the city used in calculating 140.13 its 2000 aid under section 477A.013 is less than $810 per 140.14 capita; 140.15 (2) the population of the city declined more than two 140.16 percent between 1988 and 1998; 140.17 (3) the net levy of the city used in calculating 2000 aid 140.18 under section 477A.013 is greater than $240 per capita; and 140.19 (4) the city received less than $36 per capita in aid under 140.20 section 477A.013, subdivision 9, for aids payable in 2000. 140.21 (n) The city aid base for a city is increased by $7,200 in 140.22 2001 and thereafter, and the maximum amount of total aid it may 140.23 receive under section 477A.013, subdivision 9, paragraph (c), is 140.24 also increased by $7,200 in calendar year 2001 only, provided 140.25 that: 140.26 (1) the city had a population in 1998 that is greater than 140.27 200 but less than 500; 140.28 (2) the city's commercial industrial percentage used in 140.29 calculating aids payable in 2000 was less than ten percent; 140.30 (3) more than 25 percent of the city's population was 60 140.31 years old or older according to the 1990 census; 140.32 (4) the city aid base of the city used in calculating aid 140.33 under section 477A.013 is less than $15 per capita; and 140.34 (5) the city's formula aid for aids payable in 2000 was 140.35 greater than zero. 140.36 EFFECTIVE DATE: This section is effective beginning with 141.1 aids payable in 2001 and thereafter. 141.2 Sec. 43. Minnesota Statutes 1998, section 477A.011, is 141.3 amended by adding a subdivision to read: 141.4 Subd. 38. [TEMPORARY BASE ADJUSTMENT.] (a) The city aid 141.5 base for a city is increased as provided in paragraph (b) in 141.6 2001 and 2002 only, and the maximum amount of total aid it may 141.7 receive under section 477A.013, subdivision 9, paragraph (c), is 141.8 also increased as provided in paragraph (b) in calendar year 141.9 2001 only, provided that: 141.10 (1) it had a population in 1999 of 5,000 or less; 141.11 (2) the per capita net tax capacity of the city calculated 141.12 using its 1999 population and 1999 net tax capacity is equal to 141.13 or less than 110 percent of the average 1999 per capita net tax 141.14 capacity for all cities; and 141.15 (3) the 2001 local government aid of the city under section 141.16 477A.013 after reductions made under sections 273.1399, 141.17 subdivision 5; and 477A.014, subdivision 5, but before 141.18 adjustment under this subdivision is less than 64 percent of the 141.19 amount that the formula aid of the city would have been if the 141.20 need increase percentage was 100 percent. 141.21 (b) The adjustment is equal to the positive difference, if 141.22 any, between: 141.23 (1) 64 percent of the amount that the formula aid of the 141.24 city would have been for aid payable in 2001 if the need 141.25 increase percentage was 100 percent; and 141.26 (2) the 2001 local government aid of the city under section 141.27 477A.013 after reductions made under sections 273.1399, 141.28 subdivision 5, and 477A.014, subdivision 5, but before 141.29 adjustment under this subdivision. 141.30 Sec. 44. Minnesota Statutes 1998, section 477A.0121, 141.31 subdivision 4, is amended to read: 141.32 Subd. 4. [PUBLIC DEFENDER COSTS.] Each calendar year, 1.5 141.33 percent of the total appropriation for this section, other than 141.34 the amount appropriated under section 477A.03, subdivision 2, 141.35 paragraph (b)(ii), shall be retained by the commissioner of 141.36 revenue to make reimbursements to the commissioner of finance 142.1 for payments made under section 611.27. The reimbursements 142.2 shall be to defray the additional costs associated with 142.3 court-ordered counsel under section 611.27. Any retained 142.4 amounts not used for reimbursement in a year shall be included 142.5 in the next distribution of county criminal justice aid that is 142.6 certified to the county auditors for the purpose of property tax 142.7 reduction for the next taxes payable year. 142.8 Sec. 45. Minnesota Statutes 1998, section 477A.0121, is 142.9 amended by adding a subdivision to read: 142.10 Subd. 4a. [USE OF INCREASED FUNDING.] (a) The distribution 142.11 formula in subdivision 3 does not apply to $5,000,000 of the aid 142.12 provided under section 477A.03, subdivision 2, paragraph (b)(ii). 142.13 (b) $1,000,000 of the aid provided under section 477A.03, 142.14 subdivision 2, paragraph (b)(ii), is to be used to increase the 142.15 number of probation officers managing intensive supervised 142.16 release caseloads. The commissioner of corrections shall 142.17 distribute these funds proportionately based on current unmet 142.18 needs, including distribution to areas of the state that are not 142.19 currently served by an intensive supervised release caseload. 142.20 (c) $4,000,000 of the aid provided under section 477A.03, 142.21 subdivision 2, paragraph (b)(ii), is to be used for enhanced 142.22 supervision of adult felony sex offenders by employing 142.23 additional probation officers to reduce the caseloads of 142.24 probation officers supervising sex offenders on probation or 142.25 supervised release. The commissioner of corrections shall 142.26 determine statewide eligibility for these funds according to the 142.27 formula contained in section 401.10. Each Community Corrections 142.28 Act jurisdiction and the probation and supervised release unit 142.29 of the department of corrections shall submit to the 142.30 commissioner of corrections an analysis of need along with a 142.31 plan to meet these needs and reduce adult felony sex offender 142.32 caseloads. Upon approval of the plans, the non-Community 142.33 Corrections Act portion of these funds shall be appropriated to 142.34 the department of corrections and the distribution shall be 142.35 based on statewide need. The Community Corrections Act funds 142.36 shall be disbursed as grants to each Community Corrections Act 143.1 jurisdiction. These appropriations may not be used to supplant 143.2 existing state or county probation officer positions. 143.3 Sec. 46. [477A.0123] [CHARITY CARE AID.] 143.4 Subdivision 1. [PURPOSE.] The purpose of charity care aid 143.5 is to prevent or reduce the reliance on county property taxes to 143.6 meet the cost of providing medical care to individuals who are 143.7 indigent and who do not reside in the county. 143.8 Subd. 2. [QUALIFICATION.] A county qualifies for payment 143.9 in 2001 and 2002 only under this section if it contains a 143.10 hospital that has a medical assistance disproportionate 143.11 population adjustment as determined under section 256.969, 143.12 subdivision 9, greater than 16 percent. 143.13 Subd. 3. [REPORTS BY HOSPITALS AND COUNTIES.] (a) By June 143.14 1 of 2000 and 2001, a hospital described in subdivision 2 must 143.15 file a report with the county in which it is located setting 143.16 forth its audited financial statements and a schedule setting 143.17 forth the aggregate amount of charity care for the previous 143.18 calendar year that meets the following criteria: 143.19 (1) the patient is from a county other than the county in 143.20 which the hospital is located; and 143.21 (2) the hospital has made a preliminary determination that: 143.22 (i) the patient is not eligible for any public health care 143.23 program or it cannot be determined whether the person is 143.24 eligible for any public health care program; and 143.25 (ii) the person is uninsured or it cannot be determined if 143.26 the person is uninsured or the person has insufficient resources 143.27 to pay the cost of services delivered by the hospital. 143.28 (b) By July 1 of 2000 and 2001, each county must report to 143.29 the commissioner of revenue the total amount of charity care 143.30 reported to it by hospitals under this subdivision. 143.31 Subd. 4. [AMOUNT OF AID.] (a) Subject to the limitation in 143.32 paragraph (b), payment to a county under this section is equal 143.33 to the aggregate amount of charity care, as reported under 143.34 subdivision 3. 143.35 (b) The total of all payments under this section each year 143.36 may not exceed $10,000,000. If the amounts reported under 144.1 subdivision 3 for all counties exceeds $10,000,000 for a year, 144.2 the distributions to each county must be allocated in proportion 144.3 to the total amount of uncompensated care reported to the 144.4 commissioner by the county so that the total of the payments for 144.5 the year does not exceed $10,000,000. 144.6 Subd. 5. [PAYMENT DATES.] The aid amounts must be paid as 144.7 provided in section 477A.015. 144.8 Subd. 6. [USE OF FUNDS.] Each county that receives a 144.9 payment under this section must remit all charity care aid funds 144.10 to hospitals described in subdivision 2 that apply to the county 144.11 for reimbursement. If the aid a county receives is less than 144.12 the total amount of uncompensated care reported by eligible 144.13 hospitals in the county, the aid amounts remitted to the 144.14 hospitals must be proportional to the amounts reported. 144.15 Subd. 7. [REPORT TO THE COMMISSIONER.] By March 15 of the 144.16 year following the year when the aid was received, each county 144.17 that receives the aid must file a report with the commissioner 144.18 of revenue describing how charity care aids were spent, and 144.19 verifying that they were paid to hospitals described in 144.20 subdivision 2 for charity care purposes for individuals who do 144.21 not reside in the county. 144.22 Subd. 8. [NOTICE TO COUNTIES.] The commissioner of revenue 144.23 shall annually notify the governing body of each county, 144.24 providing information, to the extent available to the 144.25 commissioner, regarding the amount of reimbursements paid under 144.26 this section attributable to care provided to residents of that 144.27 county. 144.28 Subd. 9. [APPROPRIATIONS.] The amounts sufficient to make 144.29 the payments under this section are appropriated from the 144.30 general fund to the commissioner of revenue. 144.31 EFFECTIVE DATE: This section is effective for aids payable 144.32 in 2001 and 2002. 144.33 Sec. 47. Minnesota Statutes 1999 Supplement, section 144.34 477A.03, subdivision 2, is amended to read: 144.35 Subd. 2. [ANNUAL APPROPRIATION.] (a) A sum sufficient to 144.36 discharge the duties imposed by sections 477A.011 to 477A.014 is 145.1 annually appropriated from the general fund to the commissioner 145.2 of revenue. 145.3 (b)(i) Aid payments to counties under section 477A.0121 are 145.4 limited to $20,265,000 in 1996. Aid payments to counties under 145.5 section 477A.0121 are limited to $27,571,625 in 1997. For aid 145.6 payable in 1998 and thereafter, the total aids paid under 145.7 section 477A.0121 are the amounts certified to be paid in the 145.8 previous year, adjusted for inflation as provided under 145.9 subdivision 3. 145.10 (ii) Aid payments to counties under section 477A.0121 are 145.11 further increased by an additional $10,000,000 in 2001 and 2002 145.12 only. 145.13 (c)(i) For aids payable in 1998 and thereafter, the total 145.14 aids paid to counties under section 477A.0122 are the amounts 145.15 certified to be paid in the previous year, adjusted for 145.16 inflation as provided under subdivision 3. 145.17 (ii) Aid payments to counties under section 477A.0122 in 145.18 2000 are further increased by an additional $20,000,000 in 2000. 145.19 (d) Aid payments to cities in 1999 under section 477A.013, 145.20 subdivision 9, are limited to $380,565,489. For aids payable in 145.21 2000 and 2001, the total aids paid under section 477A.013, 145.22 subdivision 9, are the amounts certified to be paid in the 145.23 previous year, adjusted for inflation as provided under 145.24 subdivision 3. For aids payable in20022003, the total aids 145.25 paid under section 477A.013, subdivision 9, are the amounts 145.26 certified to be paid in the previous year, adjusted for 145.27 inflation as provided under subdivision 3, and increased by the 145.28 amount certified to be paid in 2001 under section 477A.06. For 145.29 aids payable in 2003 and thereafter, the total aids paid under 145.30 section 477A.013, subdivision 9, are the amounts certified to be 145.31 paid in the previous year, adjusted for inflation as provided 145.32 under subdivision 3. The additional amount authorized under 145.33 subdivision 4 is not included when calculating the appropriation 145.34 limits under this paragraph. 145.35 Sec. 48. Minnesota Statutes 1998, section 477A.03, is 145.36 amended by adding a subdivision to read: 146.1 Subd. 5. [2001 AND 2002 ADJUSTMENT.] The appropriation 146.2 under subdivision 2 for aid payable in 2001 is increased by 146.3 $6,700,000. This amount is included in the base appropriation 146.4 subject to the inflation adjustment under subdivision 3 for aid 146.5 payable in 2002 only. 146.6 Sec. 49. Minnesota Statutes 1999 Supplement, section 146.7 477A.06, subdivision 1, is amended to read: 146.8 Subdivision 1. [ELIGIBILITY.] (a) For assessment years 146.91998, 1999, and2000 and 2001, for all class 4d property on 146.10 which construction was begun before January 1, 1999, the 146.11 assessor shall determine the difference between the actual net 146.12 tax capacity and the net tax capacity that would be determined 146.13 for the property if the class rates for assessment year 1997 146.14 were in effect. 146.15 (b) In calendar years 2001 and 2002, each city that is an 146.16 impacted community shall be eligible for aid equal to (i) the 146.17 amount by which the difference determined in paragraph (a) for 146.18 the corresponding assessment year exceeds one percent of the 146.19 city's total taxable net tax capacity for taxes payable in 1998, 146.20 multiplied by (ii) the city government's average local tax rate 146.21 for taxes payable in 1998. 146.22(b)(c) In calendar years1999, 2000, and2001 and 2002, 146.23 each city that is not an impacted community shall be eligible 146.24 for aid equal to (i) the amount by which the sum of the 146.25 differences determined inclauseparagraph (a) for the 146.26 corresponding assessment year exceedstwo1.5 percent of the 146.27 city's total taxable net tax capacity for taxes payable in 1998, 146.28 multiplied by (ii) the city government's average local tax rate 146.29 for taxes payable in 1998. 146.30 (d) For purposes of this section, "impacted community" 146.31 means a home rule or statutory city that meets all of the 146.32 following requirements: 146.33 (1) the city has at least 250 multifamily housing units, 146.34 excluding duplexes, converted duplexes, triplexes, senior 146.35 assisted living facilities, and student housing; 146.36 (2) the city has at least 25 percent of its multifamily 147.1 housing units classified as class 4d property; and 147.2 (3) the city meets the 1.5 percent requirement for aid 147.3 payments under paragraph (c). 147.4 EFFECTIVE DATE: This section is effective for aid paid in 147.5 calendar years 2001 and 2002. 147.6 Sec. 50. Minnesota Statutes 1998, section 477A.06, 147.7 subdivision 2, is amended to read: 147.8 Subd. 2. [CERTIFICATION.] (a) The county assessor shall 147.9 notify the commissioner of revenue of the amount determined 147.10 under subdivision 1, paragraph (b), clause (i), for any city 147.11 that is an impacted community by June 30 of the assessment year, 147.12 in a form prescribed by the commissioner. 147.13 (b) The county assessor shall notify the commissioner of 147.14 revenue of the amount determined under subdivision 1, 147.15 paragraph(b)(c), clause (i), for any city that is not an 147.16 impacted community which qualifies for aid under this section by 147.17 June 30 of the assessment year, in a form prescribed by the 147.18 commissioner. 147.19 (c) The commissioner shall notify each city of its 147.20 qualifying aid amount by August 15 of the assessment year. 147.21 EFFECTIVE DATE: This section is effective for aid paid in 147.22 calendar years 2001 and 2002. 147.23 Sec. 51. Minnesota Statutes 1998, section 477A.06, 147.24 subdivision 3, is amended to read: 147.25 Subd. 3. [APPROPRIATION; PAYMENT.] (a) The commissioner 147.26 shall pay each city its qualifying aid amount on or before July 147.27 20 of each year. An amount sufficient to pay the aid authorized 147.28 under this section is appropriated to the commissioner of 147.29 revenue from the property tax reform account in fiscal years 147.30 2000 and 2001, and from the general fund in fiscal year 2002. 147.31 (b) For fiscal years 2001 and 2002, the amount of aid 147.32 appropriated under this section may not 147.33 exceed$1,500,000$2,425,000 each year. 147.34 (c) If the total amount of aid that would otherwise be 147.35 payable under the formula in this section exceeds the maximum 147.36 allowed under paragraph (b), the amount of aid for each city is 148.1 reduced proportionately to equal the limit. 148.2 Sec. 52. Minnesota Statutes 1998, section 477A.11, 148.3 subdivision 1, is amended to read: 148.4 Subdivision 1. [TERMS.] For the purpose ofLaws 1979,148.5Chapter 303, Article 8, Sections 1 to 5sections 477A.11 to 148.6 477A.145, the terms defined in this section have the meanings 148.7 given them. 148.8 EFFECTIVE DATE: This section applies to payments made in 148.9 calendar year 2001 and thereafter. 148.10 Sec. 53. Minnesota Statutes 1998, section 477A.12, is 148.11 amended to read: 148.12 477A.12 [ANNUAL APPROPRIATIONS; LANDS ELIGIBLE; 148.13 CERTIFICATION OF ACREAGE.] 148.14 (a)There isAs an offset for expenses incurred by counties 148.15 and towns in support of natural resources lands, the following 148.16 amounts are annually appropriated to the commissioner of natural 148.17 resources from the general fund forpayment to counties within148.18the state an amount equal totransfer to the commissioner of 148.19 revenue. The commissioner of revenue shall pay the transferred 148.20 funds to counties as required by sections 477A.11 to 477A.145. 148.21 The amounts are: 148.22 (1) for acquired natural resources land, $3, as adjusted 148.23 for inflation under section 477A.145, multiplied by the total 148.24 number of acres of acquired natural resources land or,beginning148.25July 1, 1996,at the county's option three-fourths of one 148.26 percent of the appraised value of all acquired natural resources 148.27 land in the county, whichever is greater; 148.28 (2) 75 cents, as adjusted for inflation under section 148.29 477A.145, multiplied by the number of acres of 148.30 county-administered other natural resources land; and 148.31 (3) 37.5 cents, as adjusted for inflation under section 148.32 477A.145, multiplied by the number of acres of 148.33 commissioner-administered other natural resources land located 148.34 in each county as of July 1 of each year prior to the payment 148.35 year. 148.36 (b) Lands for which payments in lieu are made pursuant to 149.1 section 97A.061, subdivision 3, and Laws 1973, chapter 567, 149.2 shall not be eligible for payments under this section. Each 149.3 county auditor shall certify to the department of natural 149.4 resources during July of each year prior to the payment year the 149.5 number of acres of county-administered other natural resources 149.6 land within the county. The department of natural resources 149.7 may, in addition to the certification of acreage, require 149.8 descriptive lists of land so certified. The commissioner of 149.9 natural resources shall determine and certify to the 149.10 commissioner of revenue by March 1 of the payment year: 149.11 (1) the number of acres and most recent appraised value of 149.12 acquired natural resources landandwithin each county; 149.13 (2) the number of acres of commissioner-administered 149.14 natural resources land within each county; and 149.15 (3) the number of acres of county-administered other 149.16 natural resources land within each county, based on the reports 149.17 filed by each county auditor with the commissioner of natural 149.18 resources. 149.19 The commissioner of revenue shall determine the 149.20 distributions provided for in this section using the number of 149.21 acres and appraised values certified by the commissioner of 149.22 natural resources by March 1 of the payment year. 149.23 (c) For the purposes of this section, the appraised value 149.24 of acquired natural resources land is the purchase price for the 149.25 first five years after acquisition. The appraised value of 149.26 acquired natural resources land received as a donation is the 149.27 value determined for the commissioner of natural resources by a 149.28 licensed appraiser, or the county assessor's estimated market 149.29 value if no appraisal is done. The appraised value must be 149.30 determined by the county assessor every five years after the 149.31 land is acquired. 149.32 EFFECTIVE DATE: This section applies to payments made in 149.33 calendar year 2001 and thereafter. 149.34 Sec. 54. Minnesota Statutes 1998, section 477A.13, is 149.35 amended to read: 149.36 477A.13 [TIME OF PAYMENT, DEDUCTIONS.] 150.1 Payments to the countiesshallof the amounts determined 150.2 under section 477A.12 must be made by the commissioner of 150.3 revenue from the general fundduring the month of July of the150.4year next following certification. There shall be deducted from150.5amounts paid any amounts paid to a county or township during the150.6preceding year pursuant to sections 97A.061, subdivisions 1 and150.72, and 272.68, subdivision 3, with respect to the lands150.8certified pursuant to section 477A.12at the time provided in 150.9 section 477A.015 for the first installment of local government 150.10 aid. 150.11 EFFECTIVE DATE: This section applies to payments made in 150.12 calendar year 2001 and thereafter. 150.13 Sec. 55. Minnesota Statutes 1998, section 477A.14, is 150.14 amended to read: 150.15 477A.14 [USE OF FUNDS.] 150.16FortyExcept as provided in section 97A.061, subdivision 5, 150.17 40 percent of the total payment to the county shall be deposited 150.18 in the county general revenue fund to be used to provide 150.19 property tax levy reduction. The remainder shall be distributed 150.20 by the county in the following priority: 150.21 (a) 37.5 cents, as adjusted for inflation under section 150.22 477A.145, for each acre of county-administered other natural 150.23 resources land shall be deposited in a resource development fund 150.24 to be created within the county treasury for use in resource 150.25 development, forest management, game and fish habitat 150.26 improvement, and recreational development and maintenance of 150.27 county-administered other natural resources land. Any county 150.28 receiving less than $5,000 annually for the resource development 150.29 fund may elect to deposit that amount in the county general 150.30 revenue fund; 150.31 (b) From the funds remaining, within 30 days of receipt of 150.32 the payment to the county, the county treasurer shall pay each 150.33 organized township 30 centsper, as adjusted for inflation under 150.34 section 477A.145, for each acre of acquired natural resources 150.35 land and 7.5 centsper, as adjusted for inflation under section 150.36 477A.145, for each acre of other natural resources land located 151.1 within its boundaries. Payments for natural resources lands not 151.2 located in an organized township shall be deposited in the 151.3 county general revenue fund. Payments to counties and townships 151.4 pursuant to this paragraph shall be used to provide property tax 151.5 levy reduction, except that of the payments for natural 151.6 resources lands not located in an organized township, the county 151.7 may allocate the amount determined to be necessary for 151.8 maintenance of roads in unorganized townships. Provided that, 151.9 if the total payment to the county pursuant to section 477A.12 151.10 is not sufficient to fully fund the distribution provided for in 151.11 this clause, the amount available shall be distributed to each 151.12 township and the county general revenue fund on a pro rata 151.13 basis; and 151.14 (c) Any remaining funds shall be deposited in the county 151.15 general revenue fund. Provided that, if the distribution to the 151.16 county general revenue fund exceeds $35,000, the excess shall be 151.17 used to provide property tax levy reduction. 151.18 EFFECTIVE DATE: This section applies to payments made in 151.19 calendar year 2001 and thereafter. 151.20 Sec. 56. [477A.145] [INFLATION ADJUSTMENT.] 151.21 In 2001 and each year thereafter, the amounts required to 151.22 be adjusted for inflation in sections 477A.12 and 477A.14 shall 151.23 be increased to an amount equal to: (1) the amount before the 151.24 inflation adjustment multiplied by (2) one plus the percentage 151.25 increase in the implicit price deflator for government 151.26 consumption expenditures and gross investment for state and 151.27 local governments prepared by the Bureau of Economic Analysis of 151.28 the United States Department of Commerce for the period starting 151.29 with 1980 and ending with the calendar year prior to the year in 151.30 which aid is paid. 151.31 EFFECTIVE DATE: This section applies to payments made in 151.32 calendar year 2001 and thereafter. 151.33 Sec. 57. Minnesota Statutes 1999 Supplement, section 151.34 505.08, subdivision 3, is amended to read: 151.35 Subd. 3. [PREMATURE REFERENCE TO PLAT; FORFEITURE.] Any 151.36 person who shall dispose of,or lease, or offer to sellany land 152.1 included in a plat by reference to the plat before the same is 152.2 recorded, shall forfeit to the county $100 for each lot, or part 152.3 of a lot, so disposed of,or leased, or offered; and any 152.4 official, land surveyor, or person whose duty it is to comply 152.5 with any of the provisions of this chapter, shall forfeit not 152.6 less than $100 for each month during which compliance is 152.7 delayed. All forfeitures under this chapter shall be recovered 152.8 in an action brought in the name of the county. Notwithstanding 152.9 any provisions of this subdivision to the contrary, this 152.10 subdivision shall not apply to an offer to sell or lease a unit 152.11 in a proposed common interest community as defined in chapter 152.12 515B. 152.13 Sec. 58. Laws 1995, First Special Session chapter 3, 152.14 article 15, section 25, is amended to read: 152.15 Sec. 25. [HOMESTEAD AND AGRICULTURAL CREDIT ADJUSTMENT.] 152.16 (a) For the computation of homestead and agricultural aid 152.17 for taxes payable in 1996, the commissioner of revenue shall 152.18 reduce a school district's homestead and agricultural aid by an 152.19 amount equal to the lesser of: (1) 25 percent of the amount of 152.20 the district's homestead and agricultural aid for calendar year 152.21 1995; or (2) an amount equal to one percent times the district's 152.22 adjusted net tax capacity for assessment year 1994. 152.23 (b) Prior to the computation of homestead and agricultural 152.24 aid for taxes payable in 1997, the commissioner of revenue shall 152.25 reduce the school district's homestead and agricultural aid by 152.26 an amount equal to the lesser of: (1) 50 percent of the amount 152.27 of the district's homestead and agricultural aid for calendar 152.28 year 1995; or (2) an amount equal to one percent times the 152.29 district's adjusted net tax capacity for assessment year 1994. 152.30 (c) Prior to the computation of homestead and agricultural 152.31 aid for taxes payable in 1998, the commissioner of revenue shall 152.32 reduce a school district's homestead and agricultural aid by an 152.33 amount equal to the lesser of: (1) 75 percent of the amount of 152.34 the district's homestead and agricultural aid for calendar year 152.35 1995; or (2) an amount equal to one percent times the district's 152.36 adjusted net tax capacity for assessment year 1994. 153.1 (d) Prior to the computation of homestead and agricultural 153.2 aid for taxes payable in 1999, the commissioner of revenue shall 153.3 reduce a school district's homestead and agricultural aid by an 153.4 amount equal to the lesser of: (1) the amount of the district's 153.5 homestead and agricultural aid for calendar year 1995; or (2) an 153.6 amount equal to one percent times the district's adjusted net 153.7 tax capacity for assessment year 1994. 153.8 (e) Prior to the computation of homestead and agricultural 153.9 aid for taxes payable in 2000and later years, the commissioner 153.10 of revenue shall reduce a school district's homestead and 153.11 agricultural aid by an amount equal to the lesser of: (1) any 153.12 remaining amount of the district's homestead and agricultural 153.13 aid; or (2) an amount equal to one percent times the district's 153.14 adjusted net tax capacity for assessment year 1994. 153.15 (f) Prior to the computation of homestead and agricultural 153.16 credit aid for taxes payable in 2001 and later years, the 153.17 commissioner of revenue shall reduce that portion of a school 153.18 district's homestead and agricultural credit aid first paid to a 153.19 district in calendar year 2000 or an earlier calendar year by an 153.20 amount equal to the lesser of: (1) any remaining amount of the 153.21 portion of the district's homestead and agricultural credit aid 153.22 first paid to a district in calendar year 2000 or an earlier 153.23 calendar year; or (2) an amount equal to one percent times the 153.24 district's adjusted net tax capacity for assessment year 1994. 153.25 Sec. 59. [TEMPORARY LOCAL GOVERNMENT AID INCREASE FOR 153.26 TOWNS.] 153.27 Subdivision 1. [AID INCREASE.] (a) The total aid a town 153.28 may receive under Minnesota Statutes, sections 477A.011 to 153.29 477A.014, is increased by $75,000 in calendar year 2000 only if 153.30 the town meets all of the following conditions: 153.31 (1) it is located outside of a metropolitan county as 153.32 defined in Minnesota Statutes, section 473.121, subdivision 4; 153.33 (2) it is located in a county that does not contain a city 153.34 of the first class; 153.35 (3) its local tax rate for taxes levied in 1992 was at 153.36 least .022; 154.1 (4) its population in 1998 was at least 3,000; and 154.2 (5) it incurred legal costs related to a municipal 154.3 incorporation proceeding under Minnesota Statutes, chapter 414, 154.4 prior to the termination of the municipal board. 154.5 (b) The increased payment under paragraph (a) must not be 154.6 included in calculating local government aid payments to a town 154.7 under Minnesota Statutes, section 477A.013, subdivision 1, in 154.8 calendar year 2001, and thereafter. The increased payment must 154.9 not be included in the calculation of any other aids paid under 154.10 another law or of any limitations on levies or expenditures. 154.11 EFFECTIVE DATE: This section is effective for aids payable 154.12 in calendar year 2000 only. 154.13 Sec. 60. [CAPITOL REGION WATERSHED DISTRICT LEVY LIMIT.] 154.14 The capitol region watershed district managers may levy an 154.15 annual ad valorem tax of 0.02418 percent of taxable market value 154.16 or $200,000, whichever is less, under Minnesota Statutes, 154.17 section 103D.905, subdivision 3, notwithstanding the levy limits 154.18 in that subdivision. 154.19 EFFECTIVE DATE: This section is effective for taxes levied 154.20 in 2000, payable in 2001, and thereafter. 154.21 Sec. 61. [EVELETH-GILBERT JOINT RECREATION BOARD TAX.] 154.22 The Eveleth-Gilbert joint recreation board may levy a tax 154.23 on the taxable property situated in the territory of independent 154.24 school district No. 2154, Eveleth-Gilbert, in accordance with 154.25 this section. Property in territory in the school district may 154.26 be made subject to the tax permitted by this section by the 154.27 agreement of the governing body or town board of the city or 154.28 town where it is located. The agreement may be by resolution of 154.29 a governing body or town board or by a joint powers agreement 154.30 pursuant to Minnesota Statutes, section 471.59. If levied, the 154.31 tax is in addition to all other taxes on the property subject to 154.32 it that are permitted to be levied for park and recreation 154.33 purposes by the cities and towns other than taxes levied for the 154.34 support of the joint recreation board. The tax must be 154.35 disregarded in the calculation of all other rate or per capita 154.36 tax levy limitations imposed by charter. A city or town may 155.1 withdraw its agreement to future taxes by notice to the 155.2 recreation board and the county auditor unless provided 155.3 otherwise by a joint powers agreement. The tax shall be 155.4 collected by the St. Louis county auditor and treasurer and paid 155.5 directly to the Eveleth-Gilbert joint recreation board. This 155.6 section applies in the cities of Eveleth and Gilbert and in the 155.7 town of Fayal, all in St. Louis county. 155.8 Sec. 62. [LAKE OF THE WOODS AND KOOCHICHING COUNTIES; 155.9 EXPENDITURES FOR ROAD AND BRIDGE PURPOSES.] 155.10 (a) Notwithstanding Minnesota Statutes, section 163.06, 155.11 subdivisions 4 and 5, the county board of Lake of the Woods 155.12 county, by resolution, may expend the proceeds of the levy under 155.13 Minnesota Statutes, section 163.06, in any organized or 155.14 unorganized township or portion thereof in the county. 155.15 (b) Notwithstanding Minnesota Statutes, section 163.06, 155.16 subdivisions 4 and 5, the county board of Koochiching county, by 155.17 resolution, may expend the proceeds of the levy under Minnesota 155.18 Statutes, section 163.06, in any organized or unorganized 155.19 township or portion thereof in the county. 155.20 EFFECTIVE DATES: This section is effective for Lake of the 155.21 Woods county upon approval by and compliance with Minnesota 155.22 Statutes, section 645.021, subdivision 3. This section is 155.23 effective for Koochiching county upon approval by and compliance 155.24 with Minnesota Statutes, section 645.021, subdivision 3. 155.25 Sec. 63. [ST. LOUIS COUNTY; CAPITAL IMPROVEMENT PLAN 155.26 DEFINITION.] 155.27 For St. Louis county, the St. Louis county heritage and 155.28 arts center is included in the definition of "capital 155.29 improvement" in Minnesota Statutes, section 373.40, subdivision 155.30 1. 155.31 EFFECTIVE DATE: This section is effective upon approval by 155.32 the governing body of St. Louis county, and compliance with 155.33 Minnesota Statutes, section 645.021, subdivision 3. 155.34 Sec. 64. [STUDY OF TAXATION OF FOREST LAND.] 155.35 Subdivision 1. [AUTHORIZATION.] The commissioner of 155.36 revenue, in cooperation with the Minnesota forest resources 156.1 council, shall study the taxation of forest land in this state. 156.2 The study shall include a review of the current application of 156.3 property taxes to these lands and a review and comparison with 156.4 other forest land tax policies. It shall also include 156.5 recommendations for changes in tax policy: 156.6 (1) to encourage forest productivity; 156.7 (2) to maintain land in forest cover; 156.8 (3) to encourage the application of sustainable site level 156.9 forest management guidelines; 156.10 (4) to address impacts on local government revenues; and 156.11 (5) for changes in tax rates. 156.12 The study shall be completed and transmitted to the chairs of 156.13 the house and senate tax committees by December 1, 2000. 156.14 Subd. 2. [APPROPRIATION.] $50,000 is appropriated from the 156.15 general fund in fiscal year 2000 to the commissioner of revenue 156.16 for completion of the study required in this section. This 156.17 appropriation is available until December 31, 2000. 156.18 ARTICLE 10 156.19 LOCAL DEVELOPMENT 156.20 Section 1. Minnesota Statutes 1998, section 238.08, 156.21 subdivision 3, is amended to read: 156.22 Subd. 3. [MUNICIPAL OPERATION.] Nothing in this chapter 156.23 shall be construed to limit any municipality from the right to 156.24 construct, purchase, and operateacable communications 156.25systemsystems, or, to operate facilities and channels for 156.26 community television, including, but not limited to, public, 156.27 educational, and governmental access and local origination 156.28 programming. Any municipal system, including the operation of 156.29 community television by a municipality, shall be subject to this 156.30 chapter to the same extent as would any nonpublic cable 156.31 communications system. 156.32 Sec. 2. Minnesota Statutes 1998, section 428A.11, is 156.33 amended by adding a subdivision to read: 156.34 Subd. 7. [AUTHORITY.] "Authority" means an economic 156.35 development authority or housing and redevelopment authority 156.36 created pursuant to section 469.003, 469.004, or 469.091. 157.1 Sec. 3. Minnesota Statutes 1998, section 428A.11, is 157.2 amended by adding a subdivision to read: 157.3 Subd. 8. [IMPLEMENTING ENTITY.] "Implementing entity" 157.4 means the city or authority designated in the enabling ordinance 157.5 as responsible for implementing and administering the housing 157.6 improvement area. 157.7 Sec. 4. Minnesota Statutes 1998, section 428A.13, 157.8 subdivision 1, is amended to read: 157.9 Subdivision 1. [ORDINANCE.] The governing body of the city 157.10 may adopt an ordinance establishingaone or more housing 157.11 improvementareaareas. The ordinance must specifically 157.12 describe the portion of the city to be included in the area, the 157.13 basis for the imposition of the fees, and the number of years 157.14 the fee will be in effect. In addition, the ordinance must 157.15 include findings that without the housing improvement area, the 157.16 proposed improvements could not be made by the condominium 157.17 associations or housing unit owners, and the designation is 157.18 needed to maintain and preserve the housing units within the 157.19 housing improvement area. The ordinance shall designate the 157.20 implementing entity. The ordinance may not be adopted until a 157.21 public hearing has been held regarding the ordinance. The 157.22 ordinance may be amended by the governing body of the city, 157.23 provided the governing body complies with the public hearing 157.24 notice provisions of subdivision 2. Within 30 days after 157.25 adoption of the ordinance under this subdivision, the governing 157.26 body shall send a copy of the ordinance to the commissioner of 157.27 revenue. 157.28 Sec. 5. Minnesota Statutes 1998, section 428A.13, 157.29 subdivision 3, is amended to read: 157.30 Subd. 3. [PROPOSED HOUSING IMPROVEMENTS.] At the public 157.31 hearing held under subdivision 2, thecityproposed implementing 157.32 entity shall provide a preliminary listing of the housing 157.33 improvements to be made in the area. The listing shall identify 157.34 those improvements, if any, that are proposed to be made to all 157.35 or a portion of the common elements of a condominium. The 157.36 listing shall also identify those housing units that have 158.1 completed the proposed housing improvements and are proposed to 158.2 be exempted from a portion of the fee. In preparing the list 158.3 thecityproposed implementing entity shall consult with the 158.4 residents of the area and the condominium associations. 158.5 Sec. 6. Minnesota Statutes 1998, section 428A.14, 158.6 subdivision 1, is amended to read: 158.7 Subdivision 1. [AUTHORITY.] Fees may be imposed by the 158.8cityimplementing entity on the housing units within the housing 158.9 improvement area at a rate, term, or amount sufficient to 158.10 produce revenue required to provide housing improvements in the 158.11 area to reimburse the implementing entity for advances made to 158.12 pay for the housing improvements or to pay principal of, 158.13 interest on, and premiums, if any, on bonds issued by the 158.14 implementing entity under section 428A.16. The fee can be 158.15 imposed on the basis of the tax capacity of the housing unit, or 158.16 the total amount of square footage of the housing unit, or a 158.17 method determined by the council and specified in the resolution. 158.18 Before the imposition of the fees, a hearing must be held and 158.19 notice must be published in the official newspaper at least 158.20 seven days before the hearing and shall be mailed at least seven 158.21 days before the hearing to any housing unit owner subject to a 158.22 fee. For purposes of this section, the notice must also include: 158.23 (1) a statement that all interested persons will be given 158.24 an opportunity to be heard at the hearing regarding a proposed 158.25 housing improvement fee; 158.26 (2) the estimated cost of improvements including 158.27 administrative costs to be paid for in whole or in part by the 158.28 fee imposed under the ordinance; 158.29 (3) the amount to be charged against the particular 158.30 property; 158.31 (4) the right of the property owner to prepay the entire 158.32 fee; 158.33 (5) the number of years the fee will be in effect; and 158.34 (6) a statement that the petition requirements of section 158.35 428A.12 have either been met or do not apply to the proposed fee. 158.36 Within six months of the public hearing, thecity159.1 implementing entity may adopt a resolution imposing a fee within 159.2 the area not exceeding the amount expressed in the notice issued 159.3 under this section. 159.4 Prior to adoption of the resolution approving the fee, the 159.5 condominium associations located in the housing improvement area 159.6 shall submit to thecityimplementing entity a financial plan 159.7 prepared by an independent third party, acceptable to thecity159.8 implementing entity and associations, that provides for the 159.9 associations to finance maintenance and operation of the common 159.10 elements in the condominium and a long-range plan to conduct and 159.11 finance capital improvements. 159.12 Sec. 7. Minnesota Statutes 1998, section 428A.15, is 159.13 amended to read: 159.14 428A.15 [COLLECTION OF FEES.] 159.15 Thecityimplementing entity may provide for the collection 159.16 of the housing improvement fees according to the terms of 159.17 section 428A.05. 159.18 Sec. 8. Minnesota Statutes 1998, section 428A.16, is 159.19 amended to read: 159.20 428A.16 [BONDS.] 159.21 At any time after a contract for the construction of all or 159.22 part of an improvement authorized under sections 428A.11 to 159.23 428A.20 has been entered into or the work has been ordered, the 159.24governing body of the cityimplementing entity may issue 159.25 obligations in the amount it deems necessary to defray in whole 159.26 or in part the expense incurred and estimated to be incurred in 159.27 making the improvement, including every item of cost from 159.28 inception to completion and all fees and expenses incurred in 159.29 connection with the improvement or the financing. 159.30 The obligations are payable primarily out of the proceeds 159.31 of the fees imposed under section 428A.14, or from any other 159.32 special assessments or revenues available to be pledged for 159.33 their payment under charter or statutory authority, or from two 159.34 or more of those sources. The governing body of the city, or if 159.35 the governing bodies are the same or consist of identical 159.36 membership, the authority may, by resolution adopted prior to 160.1 the sale of obligations, pledge the full faith, credit, and 160.2 taxing power of the city toassurebonds issued by it to ensure 160.3 payment of the principal and interest if the proceeds of the 160.4 fees in the area are insufficient to pay the principal and 160.5 interest. The obligations must be issued in accordance with 160.6 chapter 475, except that an election is not required, and the 160.7 amount of the obligations are not included in determination of 160.8 the net debt of the city under the provisions of any law or 160.9 charter limiting debt. 160.10 Sec. 9. Minnesota Statutes 1998, section 428A.17, is 160.11 amended to read: 160.12 428A.17 [ADVISORY BOARD.] 160.13 Thegoverning body of the cityimplementing entity may 160.14 create and appoint an advisory board for the housing improvement 160.15 area in the city to advise thegoverning bodyimplementing 160.16 entity in connection with the planning and construction of 160.17 housing improvements. In appointing the board, thecouncil160.18 implementing entity shall consider for membership members of 160.19 condominium associations located in the housing improvement 160.20 area. The advisory board shall make recommendations to 160.21 thegoverning bodyimplementing entity to provide improvements 160.22 or impose fees within the housing improvement area. Before the 160.23 adoption of a proposal by thegoverning bodyimplementing entity 160.24 to provide improvements within the housing improvement area, the 160.25 advisory board of the housing improvement area shall have an 160.26 opportunity to review and comment upon the proposal. 160.27 Sec. 10. Minnesota Statutes 1998, section 428A.19, is 160.28 amended to read: 160.29 428A.19 [ANNUAL REPORTS.] 160.30 Each condominium association located within the housing 160.31 improvement area must, by August 15 annually, submit a copy of 160.32 its audited financial statements to thecityimplementing entity. 160.33 The city may also, as part of the enabling ordinance, require 160.34 the submission of other relevant information from the 160.35 associations. 160.36 Sec. 11. Minnesota Statutes 1998, section 428A.21, is 161.1 amended to read: 161.2 428A.21 [SUNSET.] 161.3 No new housing improvement areas may be established under 161.4 sections 428A.11 to 428A.20 after June 30,20012005. After 161.5 June 30,20012005, a city may establish a housing improvement 161.6 area, provided that it receives enabling legislation authorizing 161.7 the establishment of the area. 161.8 Sec. 12. [465.717] [CREATION OF CORPORATIONS BY POLITICAL 161.9 SUBDIVISIONS.] 161.10 Subdivision 1. [STATUTORY AUTHORIZATION REQUIRED.] A 161.11 county, home rule charter city, statutory city, town, school 161.12 district, or other political subdivision, including a joint 161.13 powers entity operating under section 471.59 may not create a 161.14 corporation, whether for profit or not for profit, unless 161.15 explicitly authorized to do so by law. 161.16 Subd. 2. [AUTHORITY TO INCORPORATE A JOINT POWERS ENTITY.] 161.17 A joint powers entity created under section 471.59 may 161.18 incorporate itself as a nonprofit under chapter 317A. A 161.19 corporation created under this subdivision shall comply with 161.20 every law that applies to the participating political 161.21 subdivisions and shall possess no greater authority or power 161.22 than that held by the joint powers entity itself. 161.23 Sec. 13. [465.719] [EXISTING CORPORATIONS CREATED BY 161.24 POLITICAL SUBDIVISIONS.] 161.25 Subdivision 1. [DEFINITIONS.] The following definitions 161.26 apply to this section: 161.27 (a) "Political subdivision" means a county, a statutory or 161.28 home rule charter city, a town, a school district, or other 161.29 political subdivision of the state. Political subdivision 161.30 includes a political subdivision acting individually or jointly 161.31 as provided under section 471.59. 161.32 (b) "Corporation" means a corporation created by a 161.33 political subdivision before May 31, 1997, in which (1) the 161.34 corporation's articles of incorporation or bylaws provide for 161.35 the governing body of the political subdivision to serve as a 161.36 corporation's governing board; (2) the articles of incorporation 162.1 or bylaws provide for members of the governing body of the 162.2 political subdivision to be automatically appointed to the board 162.3 solely by virtue of their appointment or election to office and 162.4 they constitute a majority of the corporation's board members; 162.5 or (3) the governing body of the political subdivision approves 162.6 the budget or expenditures of the corporation for purposes other 162.7 than those related to oversight of public grants or loans made 162.8 to the corporation under a competitive process for which other 162.9 entities are eligible. Corporation does not include: 162.10 (1) a corporation established under chapters 453, 453A, or 162.11 sections 119A.374 to 119A.376; 245.62 to 245.66; 162.12 (2) a nonprofit corporation created to raise funds for use 162.13 by a political subdivision if less than a majority of the board 162.14 of directors of the corporation are members of the governing 162.15 body of the political subdivision appointed to the board of 162.16 directors by virtue of their election to office; or 162.17 (3) a corporation created by a political subdivision 162.18 pursuant to state statute or special law or federal law. 162.19 Subd. 2. [RESOLUTION REQUIRED.] In order to provide for 162.20 the continued existence of a corporation created by a political 162.21 subdivision, the political subdivision, or its successor, that 162.22 created the corporation must adopt a resolution at a regularly 162.23 scheduled meeting of the governing body of the political 162.24 subdivision. The resolution must include the information 162.25 required in subdivisions 4 to 9. If a resolution is not adopted 162.26 within three years of the effective date of this section, the 162.27 board of directors of the corporation shall direct and authorize 162.28 an officer or designee of the corporation to file with the 162.29 secretary of state immediately a notice of intent to dissolve 162.30 the corporation and then as soon as possible, complete 162.31 dissolution of the corporation as provided in the corporation's 162.32 articles of incorporation and bylaws, and the law under which 162.33 the corporation was formed. 162.34 Subd. 3. [AMENDED ARTICLES OF INCORPORATION, BYLAWS.] If 162.35 the political subdivision adopts a resolution under subdivision 162.36 2, the board of directors of the corporation shall direct and 163.1 authorize an officer or designee of the corporation to file 163.2 amended articles of incorporation, if necessary, as soon as 163.3 practicable after adoption of the resolution to make the 163.4 articles of incorporation consistent with the resolution and to 163.5 provide for the application of the laws under subdivision 10. 163.6 Thereafter, the corporation may not amend its articles of 163.7 incorporation unless the political subdivision adopts a 163.8 resolution in support of the change as provided in subdivision 2 163.9 for ratifying existing corporations. 163.10 Subd. 4. [EXISTING CONTRACTS.] If on the effective date of 163.11 this section the corporation has contracts or other obligations 163.12 that are inconsistent with any requirement of this section, the 163.13 resolution may provide for the delayed application of that 163.14 requirement for the time necessary to avoid a breach or 163.15 impairment of the contract or obligation. 163.16 Subd. 5. [NEED FOR CORPORATION.] The resolution must make 163.17 a detailed and specific finding regarding the purpose of the 163.18 corporation, and why the corporation is the best alternative for 163.19 accomplishing the purpose. 163.20 Subd. 6. [AUTHORITIES AND POWERS OF CORPORATION 163.21 LIMITED.] The resolution must specify what authorities and 163.22 powers the corporation possesses. The authorities and powers of 163.23 the corporation must not exceed the authorities and powers of 163.24 the political subdivision that created it, except as otherwise 163.25 authorized in this section. 163.26 Subd. 7. [BOARD MEMBERSHIP.] If a majority of the 163.27 corporation's governing board includes elected or appointed 163.28 officials of the political subdivision creating the corporation, 163.29 the resolution must make a detailed and specific finding 163.30 regarding the purpose of those officials serving on the board, 163.31 and why the corporation cannot accomplish its purpose unless 163.32 those officials serve on the board. Alternatively, the 163.33 resolution may provide for other board membership and the 163.34 articles of incorporation amended to be consistent with the 163.35 resolution. 163.36 Subd. 8. [ALLOCATION OF ASSETS AND LIABILITIES.] If a 164.1 corporation is created by more than one political subdivision, 164.2 each political subdivision that ratifies creation of the 164.3 corporation must adopt a resolution required by this section 164.4 and, among other requirements, each resolution must specify and 164.5 agree with the resolution of the other political subdivisions as 164.6 to how the assets and liabilities of the corporation are 164.7 allocated or attributed to each political subdivision, 164.8 including, but not limited to, for the purposes of any 164.9 applicable levy or debt limits. 164.10 Subd. 9. [APPLICATION OF OTHER LAWS.] A corporation 164.11 created by a political subdivision under this section must 164.12 comply with every law that applies to the political subdivision, 164.13 as if the corporation is a part of the political subdivision, 164.14 unless the resolution ratifying creation of the corporation 164.15 specifically exempts the corporation from part or all of a law. 164.16 If the resolution exempts the corporation from part or all of a 164.17 law, the resolution must make a detailed and specific finding as 164.18 to why the corporation cannot fulfill its purpose if the 164.19 corporation is subject to that law. A corporation may not be 164.20 exempted from section 471.705, the Minnesota Open Meeting Law, 164.21 sections 138.163 to 138.25, the Records Management Act, or 164.22 Chapter 13, the Minnesota Government Data Practices Act. Laws 164.23 that apply to a political subdivision that also apply to a 164.24 corporation created by a political subdivision under this 164.25 subdivision include, but are not limited to: 164.26 (1) section 471.705, the Minnesota Open Meeting Law; 164.27 (2) chapter 13, the Minnesota Government Data Practices 164.28 Act; 164.29 (3) section 471.345, the Uniform Municipal Contracting Law; 164.30 (4) sections 43A.17, limiting the compensation of employees 164.31 based on the governor's salary; 471.991 to 471.999, providing 164.32 for equitable pay; and 465.72 and 465.722, governing severance 164.33 pay; 164.34 (5) section 275.065, providing for truth-in-taxation 164.35 hearings. If any tax revenues of the political subdivision will 164.36 be appropriated to the corporation, the corporation's annual 165.1 operating and capital budgets must be included in the 165.2 truth-in-taxation hearing of the political subdivision that 165.3 created the corporation; 165.4 (6) if the corporation issues debt, its debt is included in 165.5 the political subdivision's debt limit if it would be included 165.6 if issued by the political subdivision, and issuance of the debt 165.7 is subject to the election and other requirements of chapter 475 165.8 and section 471.69; 165.9 (7) section 471.895, prohibiting acceptance of gifts from 165.10 interested parties, and sections 471.87 to 471.89, relating to 165.11 interests in contracts; 165.12 (8) chapter 466, relating to municipal tort liability; 165.13 (9) chapter 118A, requiring deposit insurance or bond or 165.14 pledged collateral for deposits; 165.15 (10) chapter 118A, restricting investments; 165.16 (11) section 471.346, requiring ownership of vehicles to be 165.17 identified; 165.18 (12) sections 471.38 to 471.41, requiring claims to be in 165.19 writing, itemized, and approved by the governing board before 165.20 payment can be made; and 165.21 (13) the corporation cannot make advances of pay, make or 165.22 guarantee loans to employees, or provide in-kind benefits unless 165.23 authorized by law. 165.24 Subd. 10. [TAXES USED FOR PUBLIC PURPOSE.] If the 165.25 political subdivision has authority under other law to 165.26 appropriate tax revenues for use by the corporation, those funds 165.27 must be appropriated and used only for public purposes. 165.28 Subd. 11. [AUDIT.] A corporation created by a political 165.29 subdivision that receives public money from the political 165.30 subdivision, other than grants or loans made under a competitive 165.31 process for which other entities are eligible, must be audited 165.32 annually by either a certified public accountant or the state 165.33 auditor. Except as provided below, the audit report must be 165.34 presented at a regularly scheduled meeting of the governing body 165.35 of the political subdivision that created the corporation. The 165.36 audit report must be made available to individuals after 166.1 presentation of the audit report to the governing body of the 166.2 political subdivision. The data classification of an audit 166.3 performed by the office of the state auditor is governed by 166.4 chapter 6. 166.5 Subd. 12. [STATE AUDITOR POWERS.] The state auditor has 166.6 the same powers with regard to a corporation created by a 166.7 political subdivision as the state auditor has with regard to 166.8 the political subdivision that created the corporation. 166.9 Subd. 13. [DATA.] (a) The following government data of a 166.10 corporation subject to this section that are provided by a 166.11 private business are private data on individuals or nonpublic 166.12 data, as defined in section 13.02: 166.13 (1) trade secret information, as defined in section 13.37; 166.14 and 166.15 (2) financial statements; credit reports; business plans; 166.16 income and expense projections; customer lists; balance sheets; 166.17 income tax returns; and design, market, and feasibility studies 166.18 not paid for with public funds. 166.19 (b) The following government data of the corporation are 166.20 private data on individuals or nonpublic data, as defined in 166.21 section 13.02: 166.22 (1) trade secret information, as defined in section 13.02; 166.23 (2) other data, to the extent the corporation is competing 166.24 with other organizations providing the same goods or services 166.25 and disclosure of the data would impair the ability of the 166.26 corporation to compete; and 166.27 (3) data identified in section 13.491 collected or received 166.28 by a transit organization. 166.29 Sec. 14. Minnesota Statutes 1998, section 469.003, 166.30 subdivision 5, is amended to read: 166.31 Subd. 5. [COMMISSIONERS.] An authority shall consist 166.32 offiveup to seven commissioners, who shall be residents of the 166.33 area of operation of the authority, who shall be appointed after 166.34 the resolution becomes finally effective. If any additional 166.35 commissioners are appointed, one of the commissioners must be 166.36 appointed in accordance with the requirements of the Code of 167.1 Federal Regulations, title 24, part 964. 167.2 Sec. 15. Minnesota Statutes 1998, section 469.006, 167.3 subdivision 1, is amended to read: 167.4 Subdivision 1. [COUNTY COMMISSIONERS.] When the governing 167.5 body of a county adopts a resolution under section 469.004, the 167.6 governing body shall appoint five persons or the number of 167.7 commissioners for the governing body, plus up to two additional 167.8 commissioners, as commissioners of the county authority. If any 167.9 additional commissioners are appointed, one of the commissioners 167.10 must be appointed in accordance with the requirements of the 167.11 Code of Federal Regulations, title 24, part 964. The membership 167.12 of the commission will reflect an areawide distribution on a 167.13 representative basis. The commissioners who are first appointed 167.14 shall be designated to serve for terms of one, two, three, four, 167.15 and five years respectively, from the date of their 167.16 appointment. Thereafter commissioners shall be appointed for a 167.17 term of office of five years except that all vacancies shall be 167.18 filled for the unexpired term. Persons may be appointed as 167.19 commissioners if they reside within the boundaries or area, and 167.20 are otherwise eligible for the appointments under sections 167.21 469.001 to 469.047. 167.22 Sec. 16. Minnesota Statutes 1998, section 469.006, 167.23 subdivision 2, is amended to read: 167.24 Subd. 2. [MULTICOUNTY COMMISSIONERS.] The governing body 167.25 in the case of a county, and the mayor with the approval of the 167.26 governing body in the case of a city, of each political 167.27 subdivision included in a multicounty authority shall appoint 167.28 one person as a commissioner of the authority at or after the 167.29 time of the adoption of the resolution establishing the 167.30 authority. 167.31 In the case of a multicounty authority comprising only two 167.32 or three political subdivisions, the appointing authorities of 167.33 the participating political subdivisions shall each appoint one 167.34 additional commissioner whose term of office shall be as 167.35 provided for a commissioner of a multicounty authority. If any 167.36 additional commissioners are appointed, one of the commissioners 168.1 must be appointed in accordance with the requirements of the 168.2 Code of Federal Regulations, title 24, part 964. 168.3 In the case of a multicounty authority comprising more than 168.4 three political subdivisions, the appointing authorities of the 168.5 participating political subdivisions may each appoint one 168.6 additional commissioner whose term of office shall be as 168.7 provided for a commissioner of a multicounty authority. The 168.8 housing and redevelopment authority board of commissioners of a 168.9 multicounty authority may appoint one or two additional 168.10 commissioners in order to comply with the requirements of the 168.11 Code of Federal Regulations, title 24, part 964. The 168.12 appointment must be approved by a majority of the commissioners 168.13 of each of the political subdivisions comprising the multicounty 168.14 authority. 168.15 When the area of operation of a multicounty authority is 168.16 increased to include an additional political subdivision, the 168.17 appointing authority of each additional political subdivision 168.18 shall appoint one or, if appropriate, two commissioners of the 168.19 multicounty authority. 168.20 The appointing authority of each political subdivision 168.21 shall appoint the successors of the commissioner appointed by 168.22 it. The commissioners of a multicounty authority shall be 168.23 appointed for terms of five years except that all vacancies 168.24 shall be filled for the unexpired terms. 168.25 Sec. 17. Minnesota Statutes 1998, section 469.011, 168.26 subdivision 4, is amended to read: 168.27 Subd. 4. [EXPENSES; COMPENSATION.] Each commissioner may 168.28 receive necessary expenses, including traveling expenses, 168.29 incurred in the performance of duties. Each commissioner may be 168.30 paid up to$55$75 for attending each regular and special 168.31 meeting of the authority. Commissioners who are full-time state 168.32 employees or full-time employees of the political subdivisions 168.33 of the state may not receive the daily payment, but they may 168.34 suffer no loss in compensation or benefits from the state or a 168.35 political subdivision as a result of their service on the board. 168.36 Commissioners who are elected officials may receive the daily 169.1 payment for a particular day only if they do not receive any 169.2 other daily payment for public service on that day. 169.3 Commissioners who are full-time state employees or full-time 169.4 employees of the political subdivisions of the state may receive 169.5 the expenses provided for in this subdivision unless the 169.6 expenses are reimbursed by another source. 169.7 Sec. 18. Minnesota Statutes 1998, section 469.174, 169.8 subdivision 10, is amended to read: 169.9 Subd. 10. [REDEVELOPMENT DISTRICT.] (a) "Redevelopment 169.10 district" means a type of tax increment financing district 169.11 consisting of a project, or portions of a project, within which 169.12 the authority finds by resolution that one of the following 169.13 conditions, reasonably distributed throughout the district, 169.14 exists: 169.15 (1) parcels consisting of 70 percent of the area of the 169.16 district are occupied by buildings, streets, utilities, or other 169.17 improvements and more than 50 percent of the buildings, not 169.18 including outbuildings, are structurally substandard to a degree 169.19 requiring substantial renovation or clearance; or 169.20 (2) the property consists of vacant, unused, underused, 169.21 inappropriately used, or infrequently used railyards, rail 169.22 storage facilities,orexcessive or vacated railroad 169.23 rights-of-way, or tank facilities, as defined in section 169.24 115C.02, subdivision 15, with a capacity in excess of 1,000,000 169.25 gallons, located adjacent to rail facilities. 169.26 (b) For purposes of this subdivision, "structurally 169.27 substandard" shall mean containing defects in structural 169.28 elements or a combination of deficiencies in essential utilities 169.29 and facilities, light and ventilation, fire protection including 169.30 adequate egress, layout and condition of interior partitions, or 169.31 similar factors, which defects or deficiencies are of sufficient 169.32 total significance to justify substantial renovation or 169.33 clearance. 169.34 (c) A building is not structurally substandard if it is in 169.35 compliance with the building code applicable to new buildings or 169.36 could be modified to satisfy the building code at a cost of less 170.1 than 15 percent of the cost of constructing a new structure of 170.2 the same square footage and type on the site. The municipality 170.3 may find that a building is not disqualified as structurally 170.4 substandard under the preceding sentence on the basis of 170.5 reasonably available evidence, such as the size, type, and age 170.6 of the building, the average cost of plumbing, electrical, or 170.7 structural repairs, or other similar reliable evidence. The 170.8 municipality may not make such a determination without an 170.9 interior inspection of the property, but need not have an 170.10 independent, expert appraisal prepared of the cost of repair and 170.11 rehabilitation of the building. An interior inspection of the 170.12 property is not required, if the municipality finds that (1) the 170.13 municipality or authority is unable to gain access to the 170.14 property after using its best efforts to obtain permission from 170.15 the party that owns or controls the property; and (2) the 170.16 evidence otherwise supports a reasonable conclusion that the 170.17 building is structurally substandard. Items of evidence that 170.18 support such a conclusion include recent fire or police 170.19 inspections, on-site property tax appraisals or housing 170.20 inspections, exterior evidence of deterioration, or other 170.21 similar reliable evidence. Written documentation of the 170.22 findings and reasons why an interior inspection was not 170.23 conducted must be made and retained under section 469.175, 170.24 subdivision 3, clause (1). 170.25 (d) A parcel is deemed to be occupied by a structurally 170.26 substandard building for purposes of the finding under paragraph 170.27 (a) if all of the following conditions are met: 170.28 (1) the parcel was occupied by a substandard building 170.29 within three years of the filing of the request for 170.30 certification of the parcel as part of the district with the 170.31 county auditor; 170.32 (2) the substandard building was demolished or removed by 170.33 the authority or the demolition or removal was financed by the 170.34 authority or was done by a developer under a development 170.35 agreement with the authority; 170.36 (3) the authority found by resolution before the demolition 171.1 or removal that the parcel was occupied by a structurally 171.2 substandard building and that after demolition and clearance the 171.3 authority intended to include the parcel within a district; and 171.4 (4) upon filing the request for certification of the tax 171.5 capacity of the parcel as part of a district, the authority 171.6 notifies the county auditor that the original tax capacity of 171.7 the parcel must be adjusted as provided by section 469.177, 171.8 subdivision 1, paragraph (h). 171.9 (e) For purposes of this subdivision, a parcel is not 171.10 occupied by buildings, streets, utilities, or other improvements 171.11 unless 15 percent of the area of the parcel contains 171.12 improvements. 171.13 (f) For districts consisting of two or more noncontiguous 171.14 areas, each area must qualify as a redevelopment district under 171.15 paragraph (a) to be included in the district, and the entire 171.16 area of the district must satisfy paragraph (a). 171.17 EFFECTIVE DATE: This section is effective for districts or 171.18 additions to the geographic area of a district for which request 171.19 for certification is made after June 30, 2000. 171.20 Sec. 19. Minnesota Statutes 1998, section 469.175, 171.21 subdivision 1a, is amended to read: 171.22 Subd. 1a. [INCLUSION OF COUNTY ROAD COSTS.] (a) The county 171.23 board may require the authority to pay all or a portion of the 171.24 cost of county road improvements out of increment revenues, if 171.25 the following conditions occur: 171.26 (1) the proposed tax increment financing plan or an 171.27 amendment to the plan contemplates construction of a development 171.28 that will, in the judgment of the county, substantially increase 171.29 the use of county roads requiring construction of road 171.30 improvements or other road costs; and 171.31 (2) the road improvements or other road costs are not 171.32 scheduled for construction within five years under the county 171.33 capital improvement plan orotherwithin five years under 171.34 another formally adopted county plan, and in the opinion of the 171.35 county, would not reasonably be expected to be needed within the 171.36 reasonably foreseeable future if the tax increment financing 172.1 plan were not implemented. 172.2 (b) If the county elects to use increments to finance the 172.3 road improvements, the county must notify the authority and 172.4 municipality within 30 days after receipt of the information on 172.5 the proposed tax increment district under subdivision 2. The 172.6 notice must include the estimated cost of the road improvements 172.7 and schedule for construction and payment of the cost. The 172.8 authority must include the improvements in the tax increment 172.9 financing plan. The improvements may be financed with the 172.10 proceeds of tax increment bonds or the authority and the county 172.11 may agree that the county will finance the improvements with 172.12 county funds to be repaid in installments, with or without 172.13 interest, out of increment revenues. If the cost of the road 172.14 improvements and other project costs exceed the projected amount 172.15 of the increment revenues, the county and authority shall 172.16 negotiate an agreement, modifying the development plan or 172.17 proposed road improvements that will permit financing of the 172.18 costs before the tax increment financing plan may be approved. 172.19 EFFECTIVE DATE: This section is effective for districts, 172.20 or expansions of the geographic area of districts, for which 172.21 certification is requested after the day following final 172.22 enactment of this act. 172.23 Sec. 20. Minnesota Statutes 1998, section 469.175, 172.24 subdivision 5, is amended to read: 172.25 Subd. 5. [ANNUAL DISCLOSURE.](a) The authority shall172.26annually submit to the county board, the county auditor, the172.27school board, state auditor and, if the authority is other than172.28the municipality, the governing body of the municipality, a172.29report of the status of the district. The report shall include172.30the following information: the amount and the source of revenue172.31in the account, the amount and purpose of expenditures from the172.32account, the amount of any pledge of revenues, including172.33principal and interest on any outstanding bonded indebtedness,172.34the original net tax capacity of the district and any172.35subdistrict, the captured net tax capacity retained by the172.36authority, the captured net tax capacity shared with other173.1taxing districts, the tax increment received, and any additional173.2information necessary to demonstrate compliance with any173.3applicable tax increment financing plan. The authority must173.4submit the annual report for a year on or before August 1 of the173.5next year.173.6(b)An annual statement showingthe tax increment received173.7and expended in that year, the original net tax capacity,173.8captured net tax capacity, amount of outstanding bonded173.9indebtedness, the amount of the district's and any subdistrict's173.10increments paid to other governmental bodies, the amount paid173.11for administrative costs, the sum of increments paid, directly173.12or indirectly, for activities and improvements located outside173.13of the district,for each district the information required to 173.14 be reported under subdivision 6, paragraph (c), clauses (1), 173.15 (2), (3), (11), (12), (20), and (21); the amounts of tax 173.16 increment received and expended in the reporting period; and any 173.17 additional information the authority deems necessaryshallmust 173.18 be published in a newspaper of general circulation in the 173.19 municipality that approved the tax increment financing plan.If173.20the fiscal disparities contribution under chapter 276A or 473F173.21for the district is computed under section 469.177, subdivision173.223, paragraph (a), the annual statement must disclose that fact173.23and indicate the amount of increased property tax imposed on173.24other properties in the municipality as a result of the fiscal173.25disparities contribution. The commissioner of revenue shall173.26prescribe the form of this statement and the method for173.27calculating the increased property taxes.The annual statement 173.28 must inform readers that additional information regarding each 173.29 district may be obtained from the authority, and must explain 173.30 how the additional information may be requested. The authority 173.31 must publish the annual statement for a year no later than 173.32 August 15 of the next year. The authority must identify the 173.33 newspaper of general circulation in the municipality to which 173.34 the annual statement has been or will be submitted for 173.35 publication and provide a copy of the annual statement to 173.36 the county board, the county auditor, the school board, the 174.1 state auditor, and, if the authority is other than the 174.2 municipality, the governing body of the municipality on or 174.3 before August 1 of the year in which the statement must be 174.4 published. 174.5 (c) The disclosureand reportingrequirements imposed by 174.6 this subdivision apply to districts certified before, on, or 174.7 after August 1, 1979. 174.8 EFFECTIVE DATE: This section is effective for reports due 174.9 in 2001 and subsequent years. 174.10 Sec. 21. Minnesota Statutes 1998, section 469.175, 174.11 subdivision 6, is amended to read: 174.12 Subd. 6. [ANNUAL FINANCIAL REPORTING.] (a) The state 174.13 auditor shall develop a uniform system of accounting and 174.14 financial reporting for tax increment financing districts. The 174.15 system of accounting and financial reporting shall, as nearly as 174.16 possible: 174.17 (1) provide for full disclosure of the sources and uses of 174.18 public funds in the district; 174.19 (2) permit comparison and reconciliation with the affected 174.20 local government's accounts and financial reports; 174.21 (3) permit auditing of the funds expended on behalf of a 174.22 district, including a single district that is part of a 174.23 multidistrict project or that is funded in part or whole through 174.24 the use of a development account funded with tax increments from 174.25 other districts or with other public money; 174.26 (4) be consistent with generally accepted accounting 174.27 principles. 174.28 (b) The authority must annually submit to the state auditor 174.29 a financial report in compliance with paragraph (a). Copies of 174.30 the report must also be provided to the countyand school174.31district boardsauditor and to the governing body of the 174.32 municipality, if the authority is not the municipality. To the 174.33 extent necessary to permit compliance with the requirement of 174.34 financial reporting, the county and any other appropriate local 174.35 government unit or private entity must provide the necessary 174.36 records or information to the authority or the state auditor as 175.1 provided by the system of accounting and financial reporting 175.2 developed pursuant to paragraph (a). The authority must submit 175.3 the annual report for a year on or before August 1 of the next 175.4 year. 175.5 (c) The annual financial report must also include the 175.6 following items: 175.7 (1) the original net tax capacity of the district and any 175.8 subdistrict under section 469.177, subdivision 1; 175.9 (2) the net tax capacity for the reporting period of the 175.10 district and any subdistrict; 175.11 (3) the captured net tax capacity of the district,175.12including the amount of any captured net tax capacity shared175.13with other taxing districts; 175.14(3)(4) any fiscal disparity deduction from the captured 175.15 net tax capacity under section 469.177, subdivision 3; 175.16 (5) the captured net tax capacity retained for tax 175.17 increment financing under section 469.177, subdivision 2, 175.18 paragraph (a), clause (1); 175.19 (6) any captured net tax capacity distributed among 175.20 affected taxing districts under section 469.177, subdivision 2, 175.21 paragraph (a), clause (2); 175.22 (7) the type of district; 175.23 (8) the date the municipality approved the tax increment 175.24 financing plan and the date of approval of any modification of 175.25 the tax increment financing plan, the approval of which requires 175.26 notice, discussion, a public hearing, and findings under 175.27 subdivision 4, paragraph (a); 175.28 (9) the date the authority first requested certification of 175.29 the original net tax capacity of the district and the date of 175.30 the request for certification regarding any parcel added to the 175.31 district; 175.32 (10) the date the county auditor first certified the 175.33 original net tax capacity of the district and the date of 175.34 certification of the original net tax capacity of any parcel 175.35 added to the district; 175.36 (11) the month and year in which the authority has received 176.1 or anticipates it will receive the first increment from the 176.2 district; 176.3 (12) the date the district must be decertified; 176.4 (13) for the reporting period and prior years of the 176.5 district, the actual amount received from, at least, the 176.6 following categories: 176.7 (i) tax increments paid by the captured net tax capacity 176.8 retained for tax increment financing under section 469.177, 176.9 subdivision 2, paragraph (a), clause (1), but excluding any 176.10 excess taxes; 176.11 (ii) tax increments that are interest or other investment 176.12 earnings on or from tax increments; 176.13 (iii) tax increments that are proceeds from the sale or 176.14 lease of property, tangible or intangible, purchased by the 176.15 authority with tax increments; 176.16 (iv) tax increments that are repayments of loans or other 176.17 advances made by the authority with tax increments; 176.18 (v) bond or loan proceeds; 176.19 (vi) special assessments; 176.20 (vii) grants; and 176.21 (viii) transfers from funds not exclusively associated with 176.22 the district; 176.23 (14) for the reporting period and for thedurationprior 176.24 years of the district, the amount budgeted under the tax 176.25 increment financing plan, and the actual amount expended for, at 176.26 least, the following categories: 176.27 (i) acquisition of land and buildings through condemnation 176.28 or purchase; 176.29 (ii) site improvements or preparation costs; 176.30 (iii) installation of public utilities, parking facilities, 176.31 streets, roads, sidewalks, or other similar public improvements; 176.32 (iv) administrative costs, including the allocated cost of 176.33 the authority; 176.34 (v) public park facilities, facilities for social, 176.35 recreational, or conference purposes, or other similar public 176.36 improvements; and 177.1 (vi) transfers to funds not exclusively associated with the 177.2 district; 177.3(4)(15) for properties sold to developers, the total cost 177.4 of the property to the authority and the price paid by the 177.5 developer;and177.6(5) the amount of increments rebated or paid to developers177.7or property owners for privately financed improvements or other177.8qualifying costs.177.9 (16) the amount of any payments and the value of any 177.10 in-kind benefits, such as physical improvements and the use of 177.11 building space, that are paid or financed with tax increments 177.12 and are provided to another governmental unit other than the 177.13 municipality during the reporting period; 177.14 (17) the amount of any payments for activities and 177.15 improvements located outside of the district that are paid for 177.16 or financed with tax increments; 177.17 (18) the amount of payments of principal and interest that 177.18 are made during the reporting period on any nondefeased: 177.19 (i) general obligation tax increment financing bonds; 177.20 (ii) other tax increment financing bonds; and 177.21 (iii) notes and pay-as-you-go contracts; 177.22 (19) the principal amount, at the end of the reporting 177.23 period, of any nondefeased: 177.24 (i) general obligation tax increment financing bonds; 177.25 (ii) other tax increment financing bonds; and 177.26 (iii) notes and pay-as-you-go contracts; 177.27 (20) the amount of principal and interest payments that are 177.28 due for the current calendar year on any nondefeased: 177.29 (i) general obligation tax increment financing bonds; 177.30 (ii) other tax increment financing bonds; and 177.31 (iii) notes and pay-as-you-go contracts; 177.32 (21) if the fiscal disparities contribution under chapter 177.33 276A or 473F for the district is computed under section 469.177, 177.34 subdivision 3, paragraph (a), the amount of increased property 177.35 taxes imposed on other properties in the municipality that 177.36 approved the tax increment financing plan as a result of the 178.1 fiscal disparities contribution; 178.2 (22) whether the tax increment financing plan or other 178.3 governing document permits increment revenues to be expended: 178.4 (i) to pay bonds, the proceeds of which were or may be 178.5 expended on activities outside of the district; 178.6 (ii) for deposit into a common bond fund from which money 178.7 may be expended on activities located outside of the district; 178.8 or 178.9 (iii) to otherwise finance activities located outside of 178.10 the tax increment financing district; and 178.11 (23) any additional information the state auditor may 178.12 require. 178.13 (d) The commissioner of revenue shall prescribe the method 178.14 of calculating the increased property taxes under paragraph (c), 178.15 clause (21), and the form of the statement disclosing this 178.16 information on the annual statement under subdivision 5. 178.17 (e) The reporting requirements imposed by this subdivision 178.18 apply to districts certified before, on, and after August 1, 178.19 1979. 178.20 EFFECTIVE DATE: This section is effective for reports due 178.21 in 2001 and subsequent years. 178.22 Sec. 22. Minnesota Statutes 1998, section 469.176, 178.23 subdivision 1b, is amended to read: 178.24 Subd. 1b. [DURATION LIMITS; TERMS.] (a) No tax increment 178.25 shall in any event be paid to the authority 178.26 (1) after 25 years from date of receipt by the authority of 178.27 the first tax increment for a mined underground space 178.28 development district, 178.29 (2) after 15 years after receipt by the authority of the 178.30 first increment for a renewal and renovation district, 178.31 (3) after 20 years after receipt by the authority of the 178.32 first increment for a soils condition district, 178.33 (4) after nine yearsfrom the date of theafter receipt, or178.3411 years from approval of the tax increment financing plan,178.35whichever is less,by the authority of the first increment for 178.36 an economic development district for which the request for 179.1 certification was made after May 31, 1993; and after eight years 179.2 after receipt by the authority of the first increment for an 179.3 economic development district for which the request for 179.4 certification was made before June 1, 1993, 179.5 (5) for a housing district or a redevelopment district, 179.6 after 20 years from the date of receipt by the authority of the 179.7 first tax increment by the authority pursuant to section 179.8 469.175, subdivision 1, paragraph (b); or, if no provision is 179.9 made under section 469.175, subdivision 1, paragraph (b), after 179.10 25 years from the date of receipt by the authority of the first 179.11 increment. 179.12 (b) For purposes of determining a duration limit under this 179.13 subdivision or subdivision 1e that is based on the receipt of an 179.14 increment, any increments from taxes payable in the year in 179.15 which the district terminates shall be paid to the authority. 179.16 This paragraph does not affect a duration limitcalculated from179.17the date of approval of the tax increment financing plan or179.18 based on the recovery of costs or to a duration limit under 179.19 subdivision 1c. This paragraph does not supersede the 179.20 restrictions on payment of delinquent taxes in subdivision 1f. 179.21 EFFECTIVE DATE: This section is effective on May 1, 2000, 179.22 and applies to any economic development district that: 179.23 (1) is requested for certification after May 1, 2000; 179.24 (2) was requested for certification after July 31, 1979, 179.25 and as of May 1, 2000, has not reached its maximum duration 179.26 under the law in effect on the date the district was requested 179.27 for certification; or 179.28 (3) was requested for certification after July 31, 1979, 179.29 and the authority received tax increment from the county after 179.30 the duration limit calculated from the date of approval of the 179.31 plan, but within the duration limit if this section had been in 179.32 effect on the date the district was requested for certification. 179.33 Sec. 23. Minnesota Statutes 1998, section 469.1763, is 179.34 amended by adding a subdivision to read: 179.35 Subd. 7. [HOUSING DEVELOPMENTS.] (a) The restrictions in 179.36 subdivisions 2 through 4 do not apply to increments spent 180.1 exclusively to assist a housing development. 180.2 (b) For purposes of this subdivision, the following terms 180.3 have the meanings given. 180.4 (1) "Housing development" or "development" means housing 180.5 that meets the requirements for a qualified low-income building 180.6 as that term is used in section 42 of the Internal Revenue Code. 180.7 (2) "To assist" means amounts spent to: 180.8 (i) acquire and prepare the site; 180.9 (ii) acquire, construct, or rehabilitate buildings or other 180.10 improvements; and 180.11 (iii) make public improvements directly related to the 180.12 development. 180.13 (c) For a development, the amount of the tax increments 180.14 that qualifies under this subdivision is limited to the 180.15 qualified basis for the development, as defined under section 180.16 42(c) of the Internal Revenue Code, less the amount of any tax 180.17 credit the development is allowed under section 42 of the 180.18 Internal Revenue Code. 180.19 EFFECTIVE DATE: This section applies to increments spent 180.20 after July 1, 2000. 180.21 Sec. 24. [FINDINGS.] 180.22 The legislature finds that: 180.23 (1) the legislature has directed the metropolitan airports 180.24 commission to develop a plan to mitigate aircraft noise 180.25 associated with the operation of the Minneapolis/St. Paul 180.26 International Airport; 180.27 (2) the metropolitan airports commission has developed a 180.28 noise mitigation plan in conjunction with communities adjacent 180.29 to the airport and is in the process of updating its FAR Part 180.30 150 noise mitigation program for submission to and approval by 180.31 the Federal Aviation Administration; 180.32 (3) the legislature also established the governor's airport 180.33 community stabilization funding task force that recommended 180.34 further mitigation funding to address federal, state, and local 180.35 participation in mitigation of noise and other impacts 180.36 associated with expansion of the Minneapolis/St. Paul 181.1 International Airport at its present location; 181.2 (4) the task force concluded that: 181.3 (i) the metropolitan airports commission has committed 181.4 significant resources toward mitigating the negative impacts 181.5 associated with airport expansion, but the FAR Part 150 noise 181.6 program is insufficient to address all impacts; 181.7 (ii) the metropolitan airports commission is neither 181.8 capable of, nor should it be required to, finance mitigation of 181.9 all airport impacts; 181.10 (iii) the decision to keep and expand the airport at its 181.11 current location was a state decision, and as such, the state 181.12 should be a financial partner in mitigation projects resulting 181.13 from the expansion of the airport; and 181.14 (iv) no single funding source is adequate for the range and 181.15 scope of proposed mitigation activities; and 181.16 (5) appropriate measures to mitigate adverse impacts 181.17 include, but are not limited to, insulation, redevelopment and 181.18 housing replacement activities, and property value assurance and 181.19 expenditures for all such measures are for a public purpose. 181.20 Sec. 25. [DEFINITIONS.] 181.21 Subdivision 1. [APPLICATION.] For the purposes of sections 181.22 24 to 28, the terms defined in this section have the meanings 181.23 given them. 181.24 Subd. 2. [AIRPORT IMPACT DISTRICT.] "Airport impact 181.25 district" means an airport impact tax increment financing 181.26 district described in section 27. 181.27 Subd. 3. [AIRPORT IMPACT ZONE.] "Airport impact zone" 181.28 means a contiguous or noncontiguous geographic area designated 181.29 by a city and approved by the council as part of a mitigation 181.30 plan under section 26. 181.31 Subd. 4. [CITY.] "City" means the cities of Bloomington, 181.32 Burnsville, Eagan, Mendota Heights, Minneapolis, Richfield, and 181.33 St. Paul or any of them. 181.34 Subd. 5. [COUNCIL.] "Council" means the metropolitan 181.35 council. 181.36 Subd. 6. [GOVERNING BODY.] "Governing body" means the city 182.1 council of a city. 182.2 Subd. 7. [HOUSING REPLACEMENT ACTIVITIES.] "Housing 182.3 replacement activities" means rehabilitation, acquisition, 182.4 demolition relocation assistance, relocation of existing 182.5 dwelling units, and construction of new dwelling units, for the 182.6 purpose of replacing dwelling units eliminated by airport 182.7 mitigation activities. 182.8 Subd. 8. [IMPACT REPORT.] "Impact report" means a written 182.9 report identifying airport impacts adopted by a city under 182.10 section 26. 182.11 Subd. 9. [MITIGATION PLAN.] "Mitigation plan" means a plan 182.12 for airport impact mitigation developed by a city and approved 182.13 by the council under section 26. 182.14 Subd. 10. [OBLIGATION.] "Obligation" has the meaning given 182.15 it in Minnesota Statutes, section 475.51, subdivision 3. The 182.16 term includes obligations issued to refund prior obligations 182.17 issued under sections 24 to 28. 182.18 Subd. 11. [SCHOOL DISTRICT.] "School district" means a 182.19 school district whose jurisdiction includes all or any portion 182.20 of a city. 182.21 Sec. 26. [AIRPORT IMPACT MITIGATION PLANNING.] 182.22 Subdivision 1. [IMPACT REPORT.] A city may study and 182.23 identify airport impacts and the scope of those impacts on the 182.24 city. At the conclusion of an impact study, a city must adopt a 182.25 report of the impacts on the city. In studying airport impacts 182.26 and preparing a report, a city must take into account airport 182.27 noise impacts and additional environmental, transportation, and 182.28 economic impacts associated with expansion of the 182.29 Minneapolis/St. Paul International Airport. A city must also 182.30 consider and incorporate the overhead noise guidelines 182.31 established by the Federal Aviation Administration and 182.32 recommendations of the low frequency noise policy committee 182.33 concerning noise impacts. 182.34 Subd. 2. [MITIGATION PLAN.] (a) After adopting an airport 182.35 impact report, a city must develop an airport mitigation plan 182.36 for an airport impact zone in the city. In developing the 183.1 mitigation plan, a city must seek to determine the most 183.2 effective measures for mitigating the impacts identified in the 183.3 impact report. A city may consider any measures for mitigating 183.4 airport impacts, including, but not limited to, noise insulation 183.5 of residential and commercial buildings, land use conversion, 183.6 development of housing to replace units lost through mitigation 183.7 activities, and property value assurance programs. The 183.8 mitigation plan must include: 183.9 (1) designated boundaries of the airport impact zone; 183.10 (2) a description of recommended impact mitigation 183.11 measures; 183.12 (3) if the plan includes establishment of one or more 183.13 airport impact tax increment financing districts, the proposed 183.14 boundaries of each district consistent with the terms of section 183.15 27; 183.16 (4) if the plan includes conversion of residential land 183.17 use, a description of proposed housing replacement activities; 183.18 (5) estimates of costs of the recommended mitigation 183.19 measures and possible financing sources; 183.20 (6) an analysis of the feasibility of property tax 183.21 abatement under Minnesota Statutes, sections 469.1813 to 183.22 469.1815, as a financing source; and 183.23 (7) the estimated amount of obligations, if any, to be 183.24 issued under section 28, including a description of the proposed 183.25 security for the obligations and whether the city requests 183.26 credit enhancement by the council as provided in section 28, 183.27 subdivision 2. 183.28 (b) Before initial approval of a mitigation plan, a city 183.29 must conduct a public hearing after publishing at least ten days 183.30 before the hearing a notice in a newspaper of general 183.31 circulation in the city. The hearing notice must state that the 183.32 mitigation plan and the mitigation report are available for 183.33 review in the administrative offices of the city. After initial 183.34 approval of the mitigation plan by the governing body, the city 183.35 must submit the mitigation plan and the mitigation report to the 183.36 council for approval, and must also submit copies to the 184.1 metropolitan airports commission for review and comment. No 184.2 more than 60 days after receipt of the city's submission, the 184.3 council must approve, disapprove, or otherwise comment on the 184.4 mitigation plan. Failure by the council to approve or comment 184.5 within 60 days is considered approval of the mitigation plan. 184.6 An action described in a mitigation plan must not be financed by 184.7 the mitigation fund or an airport impact district until the 184.8 mitigation plan has been approved by the council and then 184.9 approved by the governing body. 184.10 (c) Before approving any mitigation plan, the council must 184.11 establish criteria for evaluating proposed airport impact zones, 184.12 airport impact districts, and mitigation measures. The council 184.13 must consult with the cities and the metropolitan airports 184.14 commission in developing the criteria. The council must approve 184.15 final criteria by December 31, 2000. Any mitigation plan 184.16 approved under sections 24 to 28 must be consistent with the 184.17 criteria established under this paragraph. 184.18 (d) A mitigation plan may be changed for the following 184.19 purposes after the notice, hearing, and approvals required for 184.20 approval of the original plan to: 184.21 (1) increase the total estimated cost of mitigation 184.22 activities; 184.23 (2) increase the total estimated amount of obligations to 184.24 be issued; 184.25 (3) secure any obligations by the pledge described in 184.26 section 28, subdivision 2, if the pledge was not included in the 184.27 original plan; 184.28 (4) expand the boundaries of an airport impact zone; 184.29 (5) create or expand the boundaries of an airport impact 184.30 district; or 184.31 (6) add mitigation activities beyond the scope of 184.32 activities described in the original plan. 184.33 (e) Expenditures to implement a mitigation plan are not 184.34 considered a business subsidy under Minnesota Statutes, sections 184.35 116J.993 to 116J.995. 184.36 Sec. 27. [AIRPORT IMPACT TAX INCREMENT FINANCING 185.1 DISTRICTS.] 185.2 Subdivision 1. [AUTHORIZATION.] A city may establish one 185.3 or more airport impact tax increment financing districts within 185.4 an airport impact zone. At least 75 percent of the area of an 185.5 airport impact district must be located within the 60 DNL 185.6 contour surrounding the Minneapolis/St. Paul International 185.7 Airport. The boundaries of each district must be described in a 185.8 mitigation plan. 185.9 Subd. 2. [SPECIAL RULES.] (a) An airport impact district 185.10 is considered a redevelopment district within the meaning of, 185.11 and is subject to, Minnesota Statutes, sections 469.174 to 185.12 469.179, except as otherwise provided in this subdivision. For 185.13 the purposes of Minnesota Statutes, section 469.174, subdivision 185.14 8, "project" means an airport impact zone described in section 185.15 26. 185.16 (b) For the purposes of Minnesota Statutes, section 185.17 469.174, subdivision 10, the governing body must find that 185.18 parcels consisting of 70 percent of the area of the district are 185.19 occupied by buildings, streets, utilities, or other 185.20 improvements, and more than 50 percent of the buildings, not 185.21 including outbuildings, currently or upon completion of airport 185.22 expansion are reasonably expected to experience airport impacts 185.23 identified in the mitigation plan to a degree requiring land use 185.24 conversion to accommodate uses compatible with the airport. 185.25 This finding may be made at the time of approval of the 185.26 mitigation plan. 185.27 (c) For the purposes of Minnesota Statutes, section 185.28 469.1763, subdivision 2, the in-district percentage is 75 185.29 percent, except that any expenditures within the boundaries of 185.30 any other airport impact tax increment financing district in the 185.31 city are considered activities within the district whenever made 185.32 notwithstanding anything to the contrary in Minnesota Statutes, 185.33 section 469.1763, subdivision 3, and the 25 percent pooling 185.34 percentage may be used only to pay for administrative expenses 185.35 and housing replacement activities. 185.36 (d) For the purposes of Minnesota Statutes, section 186.1 469.176, subdivision 4j, the cost of correcting conditions that 186.2 allow designation of the airport impact district includes the 186.3 cost of a mitigation measure described in an approved mitigation 186.4 plan. 186.5 (e) Minnesota Statutes, sections 273.1399 and 469.1782, 186.6 subdivision 1, do not apply to the district if the city elects 186.7 either or both of the following: 186.8 (1) the exemption under Minnesota Statutes, section 186.9 273.1399, subdivision 6, paragraph (d); or 186.10 (2) at least 15 percent of the revenue generated from tax 186.11 increments from the airport impact district in any year is 186.12 deposited in the housing replacement account of the city and 186.13 spent for housing replacement activities described in the 186.14 mitigation plan. 186.15 (f) Housing replacement activities may be located in the 186.16 city within or outside the airport impact district. 186.17 (g) Minnesota Statutes, chapter 473F, does not apply to 186.18 property within an airport impact district beginning in the 186.19 first year in which tax increment is paid to the city and 186.20 continuing until decertification of the district. Tax increment 186.21 from the district is calculated according to Minnesota Statutes, 186.22 section 469.177, subdivision 3, paragraph (a), without regard to 186.23 the fiscal disparities provisions of Minnesota Statutes, chapter 186.24 473F. 186.25 Sec. 28. [BONDS; SECURITY.] 186.26 Subdivision 1. [TERMS.] (a) A city may issue obligations 186.27 secured by: 186.28 (1) tax increments; 186.29 (2) abatements; 186.30 (3) any other revenues available to the city under law; or 186.31 (4) any combination of revenue described in clauses (1) to 186.32 (3). 186.33 (b) The proceeds of obligations must be used to pay or 186.34 reimburse any costs to implement a mitigation plan, including, 186.35 without limitation, costs of preparing the impact report and the 186.36 mitigation plan. The governing body may provide by resolution 187.1 that the obligations are additionally secured by the full faith 187.2 and credit of the city. Notwithstanding any other law or 187.3 charter provision, voter approval is not required and net debt 187.4 limits do not apply to obligations issued under this section. 187.5 Obligations secured in whole or in part with tax increments from 187.6 an airport impact district must be issued according to sections 187.7 24 to 28 and Minnesota Statutes, section 469.178. 187.8 Subd. 2. [METROPOLITAN AREA CREDIT ENHANCEMENT 187.9 PROGRAM.] (a) The council may establish an airport impact 187.10 mitigation bond credit enhancement program as provided in this 187.11 section. The council may pledge its full faith and credit and 187.12 taxing powers to obligations issued under sections 24 to 28 if: 187.13 (1) the city so requests and the council approves that 187.14 pledge as part of the city's mitigation plan; and 187.15 (2) the council finds that revenues pledged for payment of 187.16 the obligations will produce, as estimated at the time of the 187.17 pledge, at least 125 percent of the principal and interest due 187.18 on the obligations. 187.19 (b) The pledge must be made by resolution of the council. 187.20 Voter approval of obligations secured by the pledge described in 187.21 this subdivision is not required and net debt limits do not 187.22 apply. 187.23 (c) Before pledging its full faith and credit, the council 187.24 must, in consultation with the cities and the metropolitan 187.25 airports commission, establish criteria for approving requests 187.26 for credit enhancement under this section. The criteria may 187.27 contain limits on the total amount of obligations that may be 187.28 credit enhanced under this subdivision. 187.29 (d) If there is a deficiency in revenues pledged to 187.30 obligations credit enhanced under this subdivision, the council 187.31 must levy a tax against all taxable property in the metropolitan 187.32 area and advance the proceeds of the levy to the city for 187.33 deposit in the debt service fund for the obligations. The city 187.34 must reimburse the council for the advance to the extent the 187.35 deficient revenues are later collected. 187.36 (e) Taxes levied by the council because of credit 188.1 enhancement under this subdivision do not affect the amount or 188.2 rate of taxes that may be levied by the council for other 188.3 purposes and are not subject to limit as to rate or amount. 188.4 (f) The council and each city that participates in the 188.5 credit enhancement program may enter into agreements they 188.6 determine to be necessary to implement the credit enhancement 188.7 program. The agreements may extend over any period, 188.8 notwithstanding any law to the contrary. 188.9 EFFECTIVE DATE: Sections 24, 25, 26, and 28 do not require 188.10 local approval because Minnesota Statutes, section 645.023, 188.11 subdivision 1, paragraph (a), applies. Sections 24, 25, 26, and 188.12 28 are effective June 1, 2000. Section 27 is effective for each 188.13 of the cities of Bloomington, Burnsville, Eagan, Mendota 188.14 Heights, Minneapolis, Richfield, and St. Paul the day after the 188.15 governing body of each city and its chief clerical officer, 188.16 together with the governing body of each affected county and 188.17 school district and its chief clerical officer, timely complete 188.18 their compliance with Minnesota Statutes, sections 469.1782, 188.19 subdivision 2, and 645.021, subdivisions 2 and 3. 188.20 Sec. 29. [BROOKLYN PARK EDA; TIF DISTRICT NO. 18.] 188.21 The 1998 amendments to Minnesota Statutes, section 469.176, 188.22 subdivision 7, as set forth in Laws 1998, chapter 389, article 188.23 11, section 6, apply to the Brooklyn Park economic development 188.24 authority's tax increment financing district No. 18, 188.25 notwithstanding the effective date of the amendments. 188.26 EFFECTIVE DATE: This section is effective the day after 188.27 the governing body of the city of Brooklyn Park and its chief 188.28 clerical officer timely complete their compliance with Minnesota 188.29 Statutes, section 645.021, subdivisions 2 and 3. 188.30 Sec. 30. [CITY OF FOUNTAIN; TIF DURATION EXTENSION.] 188.31 The governing body of the city of Fountain may extend the 188.32 duration of tax increment financing district 1-1 through 188.33 December 31, 2008, notwithstanding the provision of Minnesota 188.34 Statutes, section 469.176, subdivision 1b. The extension under 188.35 this section is intended to correct an error in calculation of 188.36 the increment after a division of a parcel in the tax increment 189.1 financing district. As a result, the provisions of Minnesota 189.2 Statutes, section 469.1782, subdivision 1, do not apply to the 189.3 district. 189.4 EFFECTIVE DATE: This section is effective the day after 189.5 the governing bodies of the city, county, and school district, 189.6 and their chief clerical officers, timely complete their 189.7 compliance with Minnesota Statutes, sections 469.1782, 189.8 subdivision 2, and 645.021, subdivisions 2 and 3. 189.9 Sec. 31. [MENDOTA HEIGHTS TAX INCREMENT FINANCING 189.10 DISTRICT; CONTINUATION.] 189.11 Notwithstanding the provisions of Minnesota Statutes, 189.12 section 469.1764, or any other law, tax increment financing 189.13 district No. 1 established by the city of Mendota Heights in 189.14 1981 shall continue in effect for its original authorized 189.15 duration, subject to the condition that, except for expenditures 189.16 to pay preexisting obligations described in Minnesota Statutes, 189.17 section 469.1764, subdivision 5, paragraphs (b) and (c), all 189.18 future expenditures of tax increment shall not exceed $4,500,000 189.19 and shall be limited to the city's freeway road project 189.20 substantially as described in the city's application for a grant 189.21 from the livable communities demonstration account of the 189.22 metropolitan livable communities fund. 189.23 EFFECTIVE DATE: This section is effective the day after 189.24 approval by the governing body of the city of Mendota Heights 189.25 and compliance with Minnesota Statutes, section 645.021, 189.26 subdivision 3. 189.27 Sec. 32. [REDEVELOPMENT DISTRICT FOR MINNEAPOLIS CENTRAL 189.28 LIBRARY.] 189.29 Subdivision 1. [AUTHORIZATION.] Upon approval of the 189.30 governing body of the city of Minneapolis by resolution, the 189.31 Minneapolis community development agency may establish a 189.32 redevelopment tax increment financing district to finance the 189.33 construction of the Minneapolis central library. The governing 189.34 body may approve establishment of the district only if it makes 189.35 a finding that at least 60 percent of the cost of the project 189.36 will be paid for from sources of financing other than tax 190.1 increments. The district is a redevelopment district subject to 190.2 Minnesota Statutes, sections 469.174 to 469.179, except as 190.3 provided in this section. 190.4 Subd. 2. [DISTRICT AREA.] If approved, the boundaries of 190.5 the district are as follows: 190.6 Starting at the point of intersection of the southeasterly 190.7 line of Marquette Avenue and the southwesterly line of 190.8 Fifth Street South, thence northwesterly along the 190.9 southwesterly line of Fifth Street South to its 190.10 intersection with the northwesterly line of Nicollet Mall, 190.11 thence northeasterly along the northwesterly line of 190.12 Nicollet Mall to its intersection with the southwesterly 190.13 line of Fourth Street South, thence northwesterly along the 190.14 southwesterly line of Fourth Street South to its 190.15 intersection with the northwesterly line of Hennepin 190.16 Avenue, thence northeasterly along the northwesterly line 190.17 of Hennepin Avenue to its intersection with the 190.18 northeasterly line of Washington Avenue, thence 190.19 southeasterly along the northeasterly line of Washington 190.20 Avenue to its intersection with the southeasterly line of 190.21 Nicollet Mall, extended, thence southwesterly along the 190.22 southeasterly line of Nicollet Mall to its intersection 190.23 with the northeasterly line of Third Street South, thence 190.24 southeasterly along the northeasterly line of Third Street 190.25 South to its intersection with the southeasterly line of 190.26 Marquette Avenue, thence southwesterly along the 190.27 southeasterly line of Marquette Avenue to the point of 190.28 beginning. All in the city of Minneapolis, county of 190.29 Hennepin. 190.30 Subd. 3. [EXCEPTIONS TO APPLICABILITY OF GENERAL LAW.] (a) 190.31 Notwithstanding the requirements of Minnesota Statutes, section 190.32 469.174, subdivision 10, the district is a redevelopment 190.33 district. 190.34 (b) Minnesota Statutes, section 469.176, subdivisions 4g 190.35 and 4j, do not apply to tax increment revenue generated by the 190.36 district. 191.1 (c) Minnesota Statutes, section 469.1782, subdivision 1, 191.2 does not apply to the district. 191.3 Subd. 4. [DURATION OF DISTRICT.] Notwithstanding the 191.4 provisions of Minnesota Statutes, section 469.176, subdivision 191.5 1b, no tax increment may be paid to the authority after 30 years 191.6 from the date of receipt by the authority of the first increment. 191.7 EFFECTIVE DATE: This section is effective upon compliance 191.8 with Minnesota Statutes, sections 469.1782, subdivision 2, and 191.9 645.021, subdivision 3. 191.10 Sec. 33. [MINNEAPOLIS COMMUNITY DEVELOPMENT AGENCY; 191.11 HOUSING DISTRICT.] 191.12 Subdivision 1. [AUTHORIZATION.] Upon approval of the 191.13 governing body of the city of Minneapolis, the Minneapolis 191.14 community development agency may establish a housing tax 191.15 increment financing district comprised of the property 191.16 identified as property identification number 27-029-24-34-0025, 191.17 known as 215 Oak Grove Street, for the purpose of preserving 191.18 affordable housing that meets the requirements of Minnesota 191.19 Statutes, section 469.174, subdivision 11. 191.20 Subd. 2. [ORIGINAL NET TAX CAPACITY.] Notwithstanding the 191.21 provisions of Minnesota Statutes, sections 469.174, subdivision 191.22 7, and 469.177, subdivision 1, the original net tax capacity of 191.23 the district shall be zero. 191.24 EFFECTIVE DATE: This section is effective upon compliance 191.25 by the city of Minneapolis with the requirements of Minnesota 191.26 Statutes, section 645.021, subdivisions 2 and 3. 191.27 Sec. 34. [ST. PAUL HOUSING AND REDEVELOPMENT AUTHORITY; 191.28 HOUSING DISTRICT.] 191.29 Subdivision 1. [AUTHORIZATION.] The governing body of the 191.30 housing and redevelopment authority of the city of St. Paul may 191.31 create a tax increment financing housing district as provided in 191.32 this section for a development containing both owner-occupied 191.33 and residential rental units for mixed income occupancy. 191.34 Subd. 2. [AREA.] The housing district authorized in this 191.35 section may only be created in the northeast quadrant of 191.36 downtown St. Paul, which is defined as the approximately 15-acre 192.1 area bounded by Interstate 94 on the north and east, Jackson 192.2 Street on the west, and Seventh Street on the south, together 192.3 with the west side of Jackson Street to midblock between 192.4 Interstate 94 and Seventh Street. 192.5 Subd. 3. [INCOME REQUIREMENTS FOR COMBINED OWNER-OCCUPIED 192.6 AND RESIDENTIAL RENTAL DEVELOPMENT.] (a) Notwithstanding the 192.7 income requirements in Minnesota Statutes, section 469.174, 192.8 subdivision 11, or 469.1761, a housing district in the northeast 192.9 quadrant means a type of tax increment financing district that 192.10 consists of a project, or a portion of a project, intended for 192.11 occupancy, in part, by persons of low and moderate income as 192.12 defined in chapter 462A, Title II, of the National Housing Act 192.13 of 1934; the National Housing Act of 1959; the United States 192.14 Housing Act of 1937, as amended; Title V of the Housing Act of 192.15 1949, as amended; any other similar present or future federal, 192.16 state, or municipal legislation, or the regulations promulgated 192.17 under any of those acts, as further set forth in this section. 192.18 Twenty percent of the units in the development in the housing 192.19 district must be occupied by individuals whose family income is 192.20 equal to or less than 50 percent of area median gross income and 192.21 an additional 60 percent of the units in the development in the 192.22 housing district must be occupied by individuals whose family 192.23 income is equal to or less than 115 percent of area median gross 192.24 income. Twenty percent of the units in the development in the 192.25 housing district shall not be subject to any income limitations. 192.26 (b) For purposes of this section, family income means the 192.27 median gross income for the area as determined under section 42 192.28 of the Internal Revenue Code of 1986, as amended. The income 192.29 requirements of this subdivision shall be deemed to be satisfied 192.30 if the sum of qualified owner-occupied units and qualified 192.31 residential rental units equals the required total number of 192.32 qualified units. Owner-occupied units must be initially 192.33 purchased and occupied by individuals whose family income 192.34 satisfies the income requirements of this subdivision. For 192.35 residential rental property, the income requirements of this 192.36 subdivision apply for the duration of the tax increment district. 193.1 (c) The development in the housing district, but not the 193.2 project, does not qualify under this subdivision if the fair 193.3 market value of the improvements which are constructed for 193.4 commercial uses or for uses other than owner-occupied and rental 193.5 mixed-income housing consists of more than 20 percent of the 193.6 total fair market value of the planned improvements in the 193.7 development plan or agreement. The fair market value of the 193.8 improvements may be determined using the cost of construction, 193.9 capitalized income, or other appropriate method of estimating 193.10 market value. 193.11 EFFECTIVE DATE: This section is effective the day after 193.12 the governing body of the city of St. Paul and its chief 193.13 clerical officer timely comply with Minnesota Statutes, section 193.14 645.021, subdivisions 2 and 3. 193.15 Sec. 35. [WASHINGTON COUNTY HRA INCREASED TO SEVEN.] 193.16 Notwithstanding Minnesota Statutes, section 469.006, 193.17 subdivision 1, the Washington county housing and redevelopment 193.18 authority has seven members. The county board must appoint one 193.19 member from each county commissioner district after receiving a 193.20 recommendation for the position from the district's county 193.21 commissioner. One housing and redevelopment commissioner must 193.22 be appointed by the county board to represent the county at 193.23 large. One authority member must be appointed by the county 193.24 board from among county residents who are directly assisted by 193.25 the public housing agency as defined in Code of Federal 193.26 Regulations, title 24, part 964. The first appointee to an 193.27 at-large position serves for two years; thereafter the term is 193.28 three years. The first appointee to the position requiring one 193.29 directly assisted by the public housing agency serves for one 193.30 year; thereafter the term is three years. 193.31 EFFECTIVE DATE: This section is effective the day after 193.32 the governing body of Washington county and its chief clerical 193.33 officer timely complete their compliance with Minnesota 193.34 Statutes, section 645.021, subdivisions 2 and 3. 193.35 Sec. 36. [WINONA TAX INCREMENT FINANCING DISTRICT; 193.36 RATIFICATION OF EXPENDITURE.] 194.1 For tax increment financing district No. 2, approved by the 194.2 city of Winona on August 1, 1980, the expenditure of tax 194.3 increments before January 1, 1998, to finance, in part, the 194.4 construction of improvements to the existing municipal 194.5 wastewater treatment plant is ratified and deemed an expenditure 194.6 within the geographic area of the tax increment financing 194.7 district, and Minnesota Statutes, section 469.1764, does not 194.8 apply to the tax increment financing district. 194.9 EFFECTIVE DATE: This section is effective upon approval by 194.10 the Winona city council and compliance with Minnesota Statutes, 194.11 section 645.021. 194.12 Sec. 37. [CLARIFICATION.] 194.13 Existing corporations that reported to the state auditor 194.14 under Minnesota Statutes 1998, section 465.715, subdivision 3, 194.15 but do not meet the definition of a corporation under section 194.16 13, subdivision 1, paragraph (b), remain as established and are 194.17 not affected by this act or by Minnesota Statutes, section 194.18 465.715. 194.19 Sec. 38. [REPEALER.] 194.20 (a) Minnesota Statutes 1998, section 469.175, subdivision 194.21 6a, is repealed. 194.22 (b) Minnesota Statutes 1998, section 465.715, subdivisions 194.23 1, 2, and 3; and Minnesota Statutes 1999 Supplement, section 194.24 465.715, subdivision 1a, are repealed. 194.25 EFFECTIVE DATE: Paragraph (a) of this section is effective 194.26 for reports due in 2001 and subsequent years. 194.27 ARTICLE 11 194.28 MISCELLANEOUS 194.29 Section 1. Minnesota Statutes 1998, section 16A.46, is 194.30 amended to read: 194.31 16A.46 [LOST OR DESTROYED WARRANT DUPLICATE; INDEMNITY.] 194.32 The commissioner may issue a duplicate to an owner if the 194.33 loss or destruction of an unpaid warrant is documented by 194.34 affidavit. When the duplicate is issued, the original is void. 194.35 The commissioner may require an indemnity bond from the 194.36 applicant to the state for double the amount of the warrant for 195.1 anyone damaged by the issuance of the duplicate. The 195.2 commissioner may refuse to issue a duplicate of an unpaid state 195.3 warrant. If the commissioner acts in good faith the 195.4 commissioner is not liable, whether the application is granted 195.5 or denied. For an unpaid refund or rebate issued under a tax 195.6 law administered by the commissioner of revenue that has been 195.7 lost or destroyed, an affidavit is not required for the 195.8 commissioner to issue a duplicate if the duplicate is issued to 195.9 the same name and social security number as the original warrant 195.10 and that information is verified on a tax return filed by the 195.11 recipient. 195.12 EFFECTIVE DATE: This section is effective the day 195.13 following final enactment. 195.14 Sec. 2. Minnesota Statutes 1999 Supplement, section 195.15 16D.09, subdivision 2, is amended to read: 195.16 Subd. 2. [NOTIFICATION OF ACTION BY DEPARTMENT OF 195.17 REVENUE.] When the department of revenue has determined that a 195.18 debt is uncollectible and has written off that debt as provided 195.19 in subdivision 1, the commissioner of revenue must make a 195.20 reasonable attempt to notify the debtor of that action and of 195.21 the release of any liens imposed under section 270.69 related to 195.22 that debt, within 30 days after the determination has been 195.23 reported to the commissioner of finance. A lien imposed under 195.24 section 270.69 need not be released unless after the write-off 195.25 of uncollectible debt there is no remaining collectible 195.26 liability recorded on the lien. 195.27 EFFECTIVE DATE: This section is effective for debts 195.28 written off on or after the day following final enactment. 195.29 Sec. 3. Minnesota Statutes 1998, section 270.063, is 195.30 amended by adding a subdivision to read: 195.31 Subd. 4. [FEDERAL TAX REFUND OFFSET FEES.] For fees 195.32 charged by the department of the treasury of the United States 195.33 for the offset of federal tax refunds that are deducted from the 195.34 refund amounts remitted to the commissioner, the unpaid debts of 195.35 the taxpayers whose refunds are being offset to satisfy the 195.36 debts shall be reduced only by the actual amount of the refund 196.1 payments received by the commissioner. 196.2 EFFECTIVE DATE: This section is effective for offsets of 196.3 refunds made on or after the day following final enactment. 196.4 Sec. 4. Minnesota Statutes 1999 Supplement, section 196.5 270.65, is amended to read: 196.6 270.65 [DATE OF ASSESSMENT; DEFINITION.] 196.7 For purposes of taxes administered by the commissioner, the 196.8 term "date of assessment" means the date a liability reported on 196.9 a return wasfiledentered into the records of the commissioner 196.10 or the date a return should have been filed, whichever is later; 196.11 or, in the case of taxes determined by the commissioner, "date 196.12 of assessment" means the date of the order assessing taxes or 196.13 date of the return made by the commissioner; or, in the case of 196.14 an amended return filed by the taxpayer, the assessment date is 196.15 the date additional liability reported on the return, if any, 196.16 wasfiled withentered into the records of the commissioner; or, 196.17 in the case of a check from a taxpayer that is dishonored and 196.18 results in an erroneous refund being given to the taxpayer, 196.19 remittance of the check is deemed to be an assessment and the 196.20 "date of assessment" is the date the check was received by the 196.21 commissioner. 196.22 EFFECTIVE DATE: This section is effective for assessments 196.23 made on or after the date of final enactment. 196.24 Sec. 5. Minnesota Statutes 1998, section 270A.03, 196.25 subdivision 2, is amended to read: 196.26 Subd. 2. [CLAIMANT AGENCY.] "Claimant agency" means any 196.27 state agency, as defined by section 14.02, subdivision 2, the 196.28 regents of the University of Minnesota, any district court of 196.29 the state, any county, any statutory or home rule charter city 196.30 presenting a claim for a municipal hospital or a public 196.31 library or a municipal ambulance service, a hospital district, 196.32 any public agency responsible for child support enforcement, any 196.33 public agency responsible for the collection of court-ordered 196.34 restitution, and any public agency established by general or 196.35 special law that is responsible for the administration of a 196.36 low-income housing program. 197.1 EFFECTIVE DATE: This section is effective for claims 197.2 submitted after June 30, 2000. 197.3 Sec. 6. Minnesota Statutes 1998, section 289A.35, is 197.4 amended to read: 197.5 289A.35 [ASSESSMENTS; COMMISSIONER FILED RETURNS.] 197.6 The commissionershallhas the authority to make 197.7 determinations, corrections, and assessments with respect to 197.8 state taxes, including interest, additions to taxes, and 197.9 assessable penalties. The commissioner may audit and adjust the 197.10 taxpayer's computation of federal taxable income, items of 197.11 federal tax preferences, or federal credit amounts to make them 197.12 conform with the provisions of chapter 290 or section 298.01. 197.13 If a taxpayer fails to file a required return, the commissioner, 197.14 from information in the commissioner's possession or obtainable 197.15 by the commissioner, may make a return for the taxpayer. The 197.16 return will be prima facie correct and valid. If a return has 197.17 been filed, the commissioner shallexamineenter the liability 197.18 reported on the return and may make any audit or investigation 197.19 that is considered necessary. The commissioner may use 197.20 statistical or other sampling techniques consistent with 197.21 generally accepted auditing standards in examining returns or 197.22 records and making assessments. 197.23 EFFECTIVE DATE: This section is effective the day 197.24 following final enactment. 197.25 Sec. 7. Minnesota Statutes 1999 Supplement, section 197.26 383D.74, is amended to read: 197.27 383D.74 [DAKOTA COUNTY; ADMINISTRATIVE PENALTIES.] 197.28 Subdivision 1. [PENALTIES.] The Dakota county board may 197.29 impose an administrative penalty for violation of an ordinance 197.30 enacted under chapter 103F. No penalty may be imposed unless 197.31 the owner has received notice, served personally or by mail, of 197.32 the alleged violation and an opportunity for a hearing before a 197.33 person authorized by the county board to conduct the hearing. A 197.34 decision that a violation occurred must be in writing. The 197.35 amount of the penalty with interest may not exceed the amount 197.36 allowed for a single misdemeanor violation. A person aggrieved 198.1 by a decision under this section may have the decision reviewed 198.2 in the district court. If a penalty imposed under this section 198.3 is unpaid for more than 60 days after the date when payment is 198.4 due, the county board may certify the penalty to the county 198.5 auditor for collection to the same extent and in the same manner 198.6 provided by law for the assessment and collection of real estate 198.7 taxes. 198.8 Subd. 2. [EXPIRATION.] The authority to impose a penalty 198.9 under this section expires on December 31,20002005. 198.10 EFFECTIVE DATE: This section is effective the day 198.11 following final enactment. 198.12 Sec. 8. [PROPERTY TAX REFORM ACCOUNT TRANSFER.] 198.13 (a) On June 30, 2000, the commissioner of finance shall 198.14 transfer from the property tax reform account established in 198.15 Minnesota Statutes, section 16A.1521, to the unrestricted 198.16 general fund balance any remaining balance in the account except 198.17 for amounts appropriated for county criminal justice aid under 198.18 article 9, section 47, low-income housing aid under article 9, 198.19 section 51, or local government aid increases to small cities 198.20 under article 9, section 48. 198.21 (b) Notwithstanding Minnesota Statutes, section 16A.152, 198.22 subdivision 2, the commissioner of finance shall not allocate 198.23 any money in fiscal year 2001 to the property tax reform account 198.24 based on the forecast in November 1999. 198.25 Sec. 9. [APPROPRIATION; LEGISLATIVE AUDITOR.] 198.26 $50,000 is appropriated from the general fund to the 198.27 legislative auditor to audit the appropriations to the 198.28 department of revenue for administration of the property tax 198.29 rebates in Laws 1997, chapter 231, article 16, section 29; and 198.30 Laws 1998, chapter 389, article 1, section 4; and the 198.31 appropriation for administration of the sales tax rebate in Laws 198.32 1999, chapter 243, article 1, section 3. The purpose of this 198.33 audit is to determine whether the funds appropriated were 198.34 expended consistent with the purpose of the appropriations. The 198.35 legislative auditor shall report the findings of the audit to 198.36 the legislature by January 1, 2001. 199.1 Sec. 10. [HISTORIC PRESERVATION GRANTS.] 199.2 (a) $1,500,000 is appropriated from the general fund to the 199.3 commissioner of trade and economic development for a grant to 199.4 the Minneapolis community development agency to be used to 199.5 provide assistance to a historic preservation project for the 199.6 rehabilitation of the Brew House, a building located on property 199.7 designated in the National Register of Historic Places as the 199.8 Minneapolis Brewing Company Historic District. 199.9 (b) $350,000 is appropriated to the commissioner of 199.10 administration for a grant to the city of St. Paul to be used to 199.11 provide assistance to a historic preservation project for the 199.12 relocation and preservation of the Armstrong House, a registered 199.13 national landmark property and local designated heritage 199.14 preservation site. This appropriation is contingent upon the 199.15 completion of the sale of the property to the city of St. Paul. 199.16 Sec. 11. [APPROPRIATION; COMMISSIONER OF REVENUE.] 199.17 $....... is appropriated from the general fund to the 199.18 commissioner of revenue to pay the cost of administration of 199.19 this act. 199.20 Sec. 12. [REPEALER.] 199.21 Minnesota Rules, part 8160.0300, subpart 4, is repealed. 199.22 EFFECTIVE DATE: This section is effective for assessments 199.23 made on or after the day following final enactment.