1.1                          A bill for an act 
  1.2             relating to the financing and operation of government 
  1.3             in this state; making changes to income, sales and 
  1.4             use, property, motor vehicle sales, motor vehicle 
  1.5             registration, mortgage registry, deed, insurance 
  1.6             premiums, motor fuels, cigarette and tobacco, liquor, 
  1.7             lawful gambling, and special taxes; changing and 
  1.8             allowing tax credits and exemptions; conforming with 
  1.9             changes in federal income tax provisions; providing 
  1.10            for allocation of income; changing property tax 
  1.11            valuation, assessment, levy, classification, 
  1.12            homestead, exemption, review, appeal, and distribution 
  1.13            provisions; changing certain provisions relating to 
  1.14            biomass facilities; providing for uniform sales and 
  1.15            use tax administration; providing for taxation and 
  1.16            incentive payments on forest lands; providing for 
  1.17            electronic filing and payment of taxes; changing 
  1.18            procedures for disposition of seized contraband; 
  1.19            changing tax increment financing provisions; providing 
  1.20            for payments in lieu of taxes; changing calculation of 
  1.21            rent constituting property taxes for purposes of 
  1.22            property tax refunds; providing special authority to 
  1.23            certain political subdivisions; authorizing special 
  1.24            taxing districts; changing and clarifying tax 
  1.25            administration, collection, enforcement, interest, and 
  1.26            penalty provisions; transferring administration and 
  1.27            enforcement of the Unfair Cigarette Sales Act from the 
  1.28            commissioner of revenue to the commissioner of 
  1.29            commerce; changing revenue recapture provisions; 
  1.30            authorizing abatements and waivers of fees and certain 
  1.31            taxes in disaster areas; changing and imposing a fee; 
  1.32            changing debt collection provisions for student loans; 
  1.33            providing certain duties and powers to the 
  1.34            commissioner of revenue; authorizing publication of 
  1.35            names of certain delinquent taxpayers; authorizing 
  1.36            border city allocations; changing provisions relating 
  1.37            to tax-forfeited lands and providing for tax-forfeited 
  1.38            lands transfers; defining a lottery and other terms; 
  1.39            classifying data; requiring a report; imposing 
  1.40            penalties; appropriating money; amending Minnesota 
  1.41            Statutes 2000, sections 16A.152, subdivision 2; 
  1.42            16D.08, subdivision 2; 45.011, subdivision 1; 69.021, 
  1.43            subdivision 5, as amended; 84.922, by adding a 
  1.44            subdivision; 88.49, subdivisions 5, 9a; 88.491, 
  1.45            subdivision 2; 103D.905, subdivision 3; 115B.24, 
  1.46            subdivision 2; 123A.45, subdivisions 2, 6; 144.3831, 
  2.1             subdivision 2; 168.013, subdivision 1a; 168.017, 
  2.2             subdivision 3; 216B.2424, subdivision 5; 239.101, 
  2.3             subdivision 3; 270.06; 270.07, subdivision 3, by 
  2.4             adding a subdivision; 270.271, subdivisions 1, 3; 
  2.5             270.60, by adding a subdivision; 270.70, subdivision 
  2.6             13; 270.73, subdivision 1; 270.771; 270.78; 270A.03, 
  2.7             subdivisions 5, 7; 270A.11; 270B.02, subdivisions 2, 
  2.8             3; 270B.03, subdivision 6; 271.01, subdivision 5; 
  2.9             271.21, subdivision 2; 272.02, subdivisions 10, 22, by 
  2.10            adding a subdivision; 273.061, subdivisions 1, 2; 
  2.11            273.072, subdivision 1; 273.11, subdivisions 1a, 14, 
  2.12            by adding subdivisions; 273.1104, subdivision 2; 
  2.13            273.111, subdivision 4; 273.121; 273.124, subdivisions 
  2.14            1, 8, 13, 14; 274.01, subdivision 1; 274.13, 
  2.15            subdivision 1; 275.065, subdivisions 3, 5a, 6; 
  2.16            275.066; 275.07, subdivision 1; 275.62, subdivision 1; 
  2.17            276A.01, subdivision 3; 281.17; 282.01, subdivisions 
  2.18            1, 1b, 1c, 1d, 1e; 282.04, subdivision 2; 282.241; 
  2.19            287.08; 287.12; 287.20, subdivisions 2, 9; 287.21, 
  2.20            subdivision 1; 287.28; 289A.02, subdivision 7, by 
  2.21            adding a subdivision; 289A.12, subdivision 3; 289A.18, 
  2.22            subdivision 4, as amended; 289A.20, subdivisions 1, 2, 
  2.23            4; 289A.26, subdivision 2a; 289A.31, subdivision 7; 
  2.24            289A.50, subdivisions 2, 2a; 289A.55, subdivision 9; 
  2.25            289A.60, subdivisions 1, 2, 7, 21, as amended, by 
  2.26            adding a subdivision; 290.01, subdivisions 6b, 19, 
  2.27            19c, 19d, 31; 290.06, subdivisions 2c, 23; 290.067, 
  2.28            subdivisions 2, 2b; 290.0671, subdivisions 1, 7; 
  2.29            290.0675, subdivisions 1, 3; 290.0921, subdivision 3; 
  2.30            290.92, subdivision 23; 290A.03, subdivisions 12, 15; 
  2.31            290A.15; 291.005, subdivision 1; 295.55, subdivision 
  2.32            4; 296A.07, subdivision 4; 296A.08, subdivision 3; 
  2.33            296A.15, subdivisions 1, 7; 296A.16, subdivision 2; 
  2.34            296A.21, subdivisions 1, 4; 296A.24, subdivisions 1, 
  2.35            2; 297A.01, subdivision 5; 297A.07, subdivision 3; 
  2.36            297A.25, subdivisions 3, 11, 28; 297A.61, subdivisions 
  2.37            2, 3, 4, 6, 7, 9, 10, 14, 17, 19, 22, 23, by adding 
  2.38            subdivisions; 297A.64, subdivisions 3, 4; 297A.66, 
  2.39            subdivisions 1, 3; 297A.67, subdivisions 2, 8, 23, 24, 
  2.40            25, by adding subdivisions; 297A.68, subdivisions 2, 
  2.41            3, 5, 11, 13, 14, 18, 19, 25; 297A.69, subdivision 2; 
  2.42            297A.70, subdivisions 1, 2, 3, 4, 7, 8, 13, 14; 
  2.43            297A.71, subdivision 6; 297A.72, subdivision 1; 
  2.44            297A.75; 297A.77, subdivision 1; 297A.80; 297A.82, 
  2.45            subdivision 3, by adding a subdivision; 297A.86, 
  2.46            subdivision 1; 297A.89, subdivision 1; 297A.90, 
  2.47            subdivision 1; 297A.91; 297A.92, subdivision 2; 
  2.48            297A.94, as amended; 297A.99, subdivisions 7, 9, 11; 
  2.49            297B.03; 297E.02, subdivision 4; 297E.16, subdivisions 
  2.50            1, 2; 297F.04, subdivision 1; 297F.09, subdivision 7; 
  2.51            297F.13, subdivision 4; 297F.16, subdivision 4; 
  2.52            297F.20, subdivision 3; 297F.21, subdivisions 1, 2, 3; 
  2.53            297G.09, subdivision 6; 297G.15, subdivision 4; 
  2.54            297G.16, subdivisions 5, 7; 297G.20, subdivisions 3, 
  2.55            4; 297H.04, by adding a subdivision; 297H.06, by 
  2.56            adding a subdivision; 297I.35, subdivision 2; 297I.85, 
  2.57            subdivision 7; 325D.33, subdivision 8, by adding a 
  2.58            subdivision; 325D.405; 325D.415; 345.41; 349.19, 
  2.59            subdivision 2a; 461.12, by adding a subdivision; 
  2.60            469.040, subdivision 5; 469.169, by adding a 
  2.61            subdivision; 469.174, subdivisions 3, 10, 10a, 12; 
  2.62            469.175, subdivisions 1, 6b, by adding a subdivision; 
  2.63            469.176, subdivisions 1b, 1e, 3, 4g, by adding a 
  2.64            subdivision; 469.177, subdivision 1; 469.178, by 
  2.65            adding a subdivision; 469.1812, subdivision 2; 
  2.66            469.1813, subdivision 6; 469.202, subdivision 2; 
  2.67            473.843, subdivision 3; 473H.10, subdivision 3; 
  2.68            475.58, subdivision 1, as amended; 477A.12; 477A.14; 
  2.69            609.75, subdivision 1; Laws 1986, chapter 396, section 
  2.70            5; Laws 1992, chapter 499, article 7, section 31, as 
  2.71            amended; Laws 2000, chapter 490, article 11, section 
  3.1             26; proposing coding for new law in Minnesota 
  3.2             Statutes, chapters 12; 103B; 126C; 144F; 270; 272; 
  3.3             290C; 295; 296A; 297A; 297F; 297H; 383A; 471; 
  3.4             repealing Minnesota Statutes 2000, sections 16A.1521; 
  3.5             126C.30; 126C.31; 126C.32; 126C.33; 126C.34; 126C.35; 
  3.6             126C.36; 270.31; 270.32; 270.33; 270.34; 270.35; 
  3.7             270.36; 270.37; 270.38; 270.39; 275.078; 289A.60, 
  3.8             subdivision 3; 290.06, subdivision 25; 290.095, 
  3.9             subdivision 7; 290.23; 290.25; 290.31, subdivisions 2, 
  3.10            2a, 3, 4, 5, 19; 290A.04, subdivision 2j; 296A.16, 
  3.11            subdivision 6; 296A.24, subdivision 3; 297A.61, 
  3.12            subdivision 16; 297A.62, subdivision 2; 297A.64, 
  3.13            subdivision 1; 297A.68, subdivision 21; 297A.71, 
  3.14            subdivisions 2, 15, 16; 297B.032; 297E.16, subdivision 
  3.15            3; 297F.21, subdivision 4; 297G.20, subdivision 5; 
  3.16            297I.05, subdivision 8; 297I.30, subdivision 3; 
  3.17            325D.33, subdivision 5; Laws 1988, chapter 426, 
  3.18            section 1; Laws 1988, chapter 702, section 16; Laws 
  3.19            1992, chapter 511, article 2, section 52, as amended; 
  3.20            Laws 1996, chapter 471, article 8, section 45; Laws 
  3.21            1999, chapter 243, article 6, section 14; Laws 1999, 
  3.22            chapter 243, article 6, section 15; Laws 2000, chapter 
  3.23            490, article 6, section 17; Minnesota Rules, parts 
  3.24            8120.0200; 8120.0500; 8120.0700; 8120.0900; 8120.1300; 
  3.25            8120.1600; 8120.2000; 8120.2100; 8120.2200; 8120.2300; 
  3.26            8120.2500; 8120.2700; 8120.2800; 8120.3000; 8120.3200; 
  3.27            8120.4300; 8120.4400; 8120.4500; 8120.4600; 8120.4900; 
  3.28            8120.5000; 8120.5100; 8120.5300. 
  3.29  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  3.30                             ARTICLE 1 
  3.31                           PROPERTY TAXES 
  3.32     Section 1.  [103B.253] [COUNTY LEVY AUTHORITY.] 
  3.33     Notwithstanding any other law to the contrary, a county 
  3.34  levying a tax under section 103B.241, 103B.245, or 103B.251 
  3.35  shall not include any taxes levied under those authorities in 
  3.36  the levy certified under section 275.07, subdivision 1, 
  3.37  paragraph (a).  A county levying under section 103B.241, 
  3.38  103B.245, or 103B.251 shall separately certify that amount and 
  3.39  the auditor shall extend that levy as a special taxing district 
  3.40  levy under sections 275.066 and 275.07, subdivision 1, paragraph 
  3.41  (b). 
  3.42     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
  3.43  levied in 2001, payable in 2002, and thereafter. 
  3.44     Sec. 2.  Minnesota Statutes 2000, section 103D.905, 
  3.45  subdivision 3, is amended to read: 
  3.46     Subd. 3.  [ADMINISTRATIVE GENERAL FUND.] An administrative 
  3.47  A general fund, consisting of an ad valorem tax levy, may not 
  3.48  exceed 0.02418 0.048 percent of taxable market value, or 
  3.49  $125,000 $250,000, whichever is less.  The money in the fund 
  4.1   shall be used for general administrative expenses and for the 
  4.2   construction or implementation and maintenance of projects of 
  4.3   common benefit to the watershed district.  The managers may make 
  4.4   an annual levy for the administrative general fund as provided 
  4.5   in section 103D.911.  In addition to the annual administrative 
  4.6   general levy, the managers may annually levy a tax not to exceed 
  4.7   0.00798 percent of taxable market value for a period not to 
  4.8   exceed 15 consecutive years to pay the cost attributable to the 
  4.9   basic water management features of projects initiated by 
  4.10  petition of a municipality of political subdivision within the 
  4.11  watershed district or by petition of at least 50 resident owners 
  4.12  whose property is within the watershed district.  
  4.13     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
  4.14  levied in 2001, payable in 2002, and thereafter. 
  4.15     Sec. 3.  Minnesota Statutes 2000, section 123A.45, 
  4.16  subdivision 2, is amended to read: 
  4.17     Subd. 2.  [PETITION.] The petition must contain: 
  4.18     (a) A correct description of the area proposed for 
  4.19  detachment and annexation, including supporting data regarding 
  4.20  location and title to land to establish that the land is 
  4.21  adjoining a district. 
  4.22     (b) The reasons for the proposed change with facts showing 
  4.23  that the granting of the petition will not reduce the size of 
  4.24  any district to less than four sections, unless the district is 
  4.25  not operating a school within the district. 
  4.26     (c) Consent to the petition, if, at the time of the filing 
  4.27  of the petition, any part of the area proposed for detachment is 
  4.28  part of a district which maintains and operates a secondary 
  4.29  school within the district.  Before the hearing, the consent of 
  4.30  the board of the district in which the area proposed for 
  4.31  detachment lies must be endorsed on the petition. 
  4.32     (d) An identification of the district to which annexation 
  4.33  is sought. 
  4.34     (e) Other information the petitioners may desire to affix. 
  4.35     (f) An acknowledgment by the petitioner. 
  4.36     (g) A description of whether bonded indebtedness will be 
  5.1   allocated according to subdivision 6, paragraph (b) or (c). 
  5.2      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
  5.3   following final enactment for detachment and annexations 
  5.4   requests approved by a county board on or after that date. 
  5.5      Sec. 4.  Minnesota Statutes 2000, section 123A.45, 
  5.6   subdivision 6, is amended to read: 
  5.7      Subd. 6.  [TAXABLE PROPERTY.] (a) Upon the effective date 
  5.8   of the order, the detachment and annexation is effected.  The 
  5.9   bonded indebtedness must be assigned to the detached and annexed 
  5.10  land under either paragraph (b) or (c). 
  5.11     (b) Unless specified separately under paragraph (c), all 
  5.12  taxable property in the area so detached and annexed remains 
  5.13  taxable for payment of any school purpose obligations already 
  5.14  authorized by or outstanding on the effective date of the order 
  5.15  against the district from which detached.  The order does not 
  5.16  relieve such property from the obligation of any bonded debt 
  5.17  already incurred to which it was subject prior to the order.  
  5.18  All taxable property in the area so detached and annexed is 
  5.19  taxable for payment of any district obligations authorized on or 
  5.20  subsequent to the effective date of the order by the district to 
  5.21  which annexation is made. 
  5.22     (c) Alternatively, if the school board of the district in 
  5.23  which the area is proposed for detachment and the school board 
  5.24  of the district in which the area is proposed for annexation 
  5.25  agree, all taxable property in the area detached and annexed 
  5.26  shall be taxable by the school district to which the property is 
  5.27  annexed.  Detached and annexed property is relieved from the 
  5.28  obligation of any bonded debt already incurred by the district 
  5.29  in which the area is detached and is obligated for any bonded 
  5.30  debt already incurred by the district to which the area is 
  5.31  annexed. 
  5.32     <b>[EFFECTIVE DATE.]</b> This sections is effective the day 
  5.33  following final enactment for detachment and annexations 
  5.34  requests approved by a county board on or after that date. 
  5.35     Sec. 5.  [126C.455] [SWIMMING POOL LEVY.] 
  5.36     Each year, a school district with its home office located 
  6.1   in a county that has (i) a population density of ten or fewer 
  6.2   persons per square mile according to the 2000 census of 
  6.3   population; (ii) an international border; and (iii) more than 
  6.4   one school district within its boundaries, may levy for the net 
  6.5   operational costs of a swimming pool.  The levy may not exceed 
  6.6   the net actual costs of operation of the swimming pool for the 
  6.7   previous year.  Net actual costs are defined as operating costs 
  6.8   less any operating revenues and less any payments from other 
  6.9   local governmental units. 
  6.10     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
  6.11  payable in 2002 and later. 
  6.12     Sec. 6.  [144F.01] [EMERGENCY MEDICAL SERVICES SPECIAL 
  6.13  TAXING DISTRICTS.] 
  6.14     Subdivision 1.  [POLITICAL SUBDIVISION DEFINED.] In this 
  6.15  section, "political subdivision" means a county, a statutory or 
  6.16  home rule charter city, or a township organized to provide town 
  6.17  government. 
  6.18     Subd. 2.  [WHO MAY ESTABLISH.] Two or more political 
  6.19  subdivisions, or parts of them, may establish by resolution of 
  6.20  their governing bodies a special taxing district for emergency 
  6.21  medical services.  The participating territory of a 
  6.22  participating political subdivision need not abut any other 
  6.23  participating territory to be in the special taxing district. 
  6.24     Subd. 3.  [BOARD.] The special taxing district under this 
  6.25  section is governed by a board made up initially of 
  6.26  representatives of each participating political subdivision in 
  6.27  the proportions set out in the establishing resolution, subject 
  6.28  to change as provided in the district's charter, if any, or in 
  6.29  the district's bylaws.  Each participant's representative serves 
  6.30  at the pleasure of that participant's governing body. 
  6.31     Subd. 4.  [PROPERTY TAX LEVY AUTHORITY.] The district's 
  6.32  board may levy a tax on the taxable real and personal property 
  6.33  in the district.  The ad valorem tax levy may not exceed 0.048 
  6.34  percent of the taxable market value of the district or $250,000, 
  6.35  whichever is less.  The proceeds of the levy must be used as 
  6.36  provided in subdivision 5.  The board shall certify the levy at 
  7.1   the times as provided under section 275.07.  The board shall 
  7.2   provide the county with whatever information is necessary to 
  7.3   identify the property that is located within the district.  If 
  7.4   the boundaries include a part of a parcel, the entire parcel 
  7.5   shall be included in the district.  The county auditors must 
  7.6   spread, collect, and distribute the proceeds of the tax at the 
  7.7   same time and in the same manner as provided by law for all 
  7.8   other property taxes. 
  7.9      Subd. 5.  [USE OF LEVY PROCEEDS.] The proceeds of property 
  7.10  taxes levied under this section must be used to support the 
  7.11  providing of out-of-hospital emergency medical services 
  7.12  including, but not limited to, first responder or rescue squads 
  7.13  recognized by the district, ambulance services licensed under 
  7.14  chapter 144E and recognized by the district, medical control 
  7.15  functions set out in chapter 144E, communications equipment and 
  7.16  systems, and programs of regional emergency medical services 
  7.17  authorized by regional boards described in section 144E.52. 
  7.18     Subd. 6.  [ADVISORY COMMITTEE.] A special taxing district 
  7.19  board under this section must have an advisory committee to 
  7.20  advise the board on issues involving emergency medical services 
  7.21  and EMS communications.  The committee's membership must be 
  7.22  comprised of representatives of first responders, ambulance 
  7.23  services, ambulance medical directors, and EMS communication 
  7.24  experts.  The advisory committee members serve at the pleasure 
  7.25  of the appointing board. 
  7.26     Subd. 7.  [POWERS.] (a) In addition to authority expressly 
  7.27  granted in this section, a special taxing district under this 
  7.28  section may exercise any power that may be exercised by any of 
  7.29  its participating political subdivisions, except that the board 
  7.30  may not incur debt.  The special taxing district may only use 
  7.31  the power to do what is necessary or reasonable to support the 
  7.32  services set out in subdivision 5. 
  7.33     (b) Notwithstanding paragraph (a), the district may only 
  7.34  levy the taxes authorized in this section. 
  7.35     Subd. 8.  [ADDITIONS AND WITHDRAWALS.] (a) Additional 
  7.36  eligible political subdivisions may be added to a special taxing 
  8.1   district under this section as provided by the board of the 
  8.2   district and agreed to in a resolution of the governing body of 
  8.3   the political subdivision proposed to be added. 
  8.4      (b) A political subdivision may withdraw from a special 
  8.5   taxing district under this section by resolution of its 
  8.6   governing body.  The political subdivision must notify the board 
  8.7   of the special taxing district of the withdrawal by providing a 
  8.8   copy of the resolution at least one year in advance of the 
  8.9   proposed withdrawal.  The taxable property of the withdrawing 
  8.10  member is subject to the property tax levy under subdivision 4 
  8.11  for the taxes payable year following the notice of the 
  8.12  withdrawal, unless the board and the withdrawing member agree 
  8.13  otherwise by action of their governing bodies. 
  8.14     (c) Notwithstanding subdivision 2, if the district is 
  8.15  comprised of only two political subdivisions and one of the 
  8.16  political subdivisions withdraws, the district can continue to 
  8.17  exist. 
  8.18     Subd. 9.  [DISSOLUTION.] If the special taxing district is 
  8.19  dissolved, the assets and liabilities may be assigned to a 
  8.20  successor entity, if any, or otherwise disposed of for public 
  8.21  purposes as provided by law.  
  8.22     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
  8.23  levied in 2002, payable in 2003, through taxes levied in 2007, 
  8.24  payable in 2008. 
  8.25     Sec. 7.  Minnesota Statutes 2000, section 216B.2424, 
  8.26  subdivision 5, is amended to read: 
  8.27     Subd. 5.  [MANDATE.] (a) A public utility, as defined in 
  8.28  section 216B.02, subdivision 4, that operates a nuclear-powered 
  8.29  electric generating plant within this state must construct and 
  8.30  operate, purchase, or contract to construct and operate (1) by 
  8.31  December 31, 1998, 50 megawatts of electric energy installed 
  8.32  capacity generated by farm-grown closed-loop biomass scheduled 
  8.33  to be operational by December 31, 2001; and (2) by December 31, 
  8.34  1998, an additional 75 megawatts of installed capacity so 
  8.35  generated scheduled to be operational by December 31, 2002.  
  8.36     (b) Of the 125 megawatts of biomass electricity installed 
  9.1   capacity required under this subdivision, no more than 50 
  9.2   megawatts of this capacity may be provided by a facility that 
  9.3   uses poultry litter as its primary fuel source and any such 
  9.4   facility:  
  9.5      (1) need not use biomass that complies with the definition 
  9.6   in subdivision 1; 
  9.7      (2) must enter into a contract with the public utility for 
  9.8   such capacity, that has an average purchase price per megawatt 
  9.9   hour over the life of the contract that is equal to or less than 
  9.10  the average purchase price per megawatt hour over the life of 
  9.11  the contract in contracts approved by the public utilities 
  9.12  commission before April 1, 2000, to satisfy the mandate of this 
  9.13  section, and file that contract with the public utilities 
  9.14  commission prior to September 1, 2000; and 
  9.15     (3) such capacity must be scheduled to be operational by 
  9.16  December 31, 2002.  
  9.17     (c) Of the total 125 megawatts of biomass electric energy 
  9.18  installed capacity required under this section, no more than 75 
  9.19  megawatts may be provided by a single project.  
  9.20     (d) Of the 75 megawatts of biomass electric energy 
  9.21  installed capacity required under paragraph (a), clause (2), no 
  9.22  more than 25 megawatts of this capacity may be provided by a St. 
  9.23  Paul district heating and cooling system cogeneration facility 
  9.24  utilizing waste wood as a primary fuel source.  The St. Paul 
  9.25  district heating and cooling system cogeneration facility need 
  9.26  not use biomass that complies with the definition in subdivision 
  9.27  1.  
  9.28     (e) The public utility must accept and consider on an equal 
  9.29  basis with other biomass proposals: 
  9.30     (1) a proposal to satisfy the requirements of this section 
  9.31  that includes a project that exceeds the megawatt capacity 
  9.32  requirements of either paragraph (a), clause (1) or (2), and 
  9.33  that proposes to sell the excess capacity to the public utility 
  9.34  or to other purchasers; and 
  9.35     (2) a proposal for a new facility to satisfy more than ten 
  9.36  but not more than 20 megawatts of the electrical generation 
 10.1   requirements by a small business-sponsored independent power 
 10.2   producer facility to be located within the northern quarter of 
 10.3   the state, which means the area located north of Constitutional 
 10.4   Route No. 8 as described in section 161.114, subdivision 2, and 
 10.5   that utilizes biomass residue wood, sawdust, bark, chipped wood, 
 10.6   or brush to generate electricity.  A facility described in this 
 10.7   clause is not required to utilize biomass complying with the 
 10.8   definition in subdivision 1, but must have the capacity required 
 10.9   by this clause operational by December 31, 2002. 
 10.10     (e) (f) If a public utility files a contract with the 
 10.11  commission for electric energy installed capacity that uses 
 10.12  poultry litter as its primary fuel source, the commission must 
 10.13  do a preliminary review of the contract to determine if it meets 
 10.14  the purchase price criteria provided in paragraph (b), clause 
 10.15  (2), of this subdivision.  The commission shall perform its 
 10.16  review and advise the parties of its determination within 30 
 10.17  days of filing of such a contract by a public utility.  A public 
 10.18  utility may submit by September 1, 2000, a revised contract to 
 10.19  address the commission's preliminary determination.  
 10.20     (f) (g) The commission shall finally approve, modify, or 
 10.21  disapprove no later than July 1, 2001, all contracts submitted 
 10.22  by a public utility as of September 1, 2000, to meet the mandate 
 10.23  set forth in this subdivision.  
 10.24     (g) (h) If a public utility subject to this section 
 10.25  exercises an option to increase the generating capacity of a 
 10.26  project in a contract approved by the commission prior to April 
 10.27  25, 2000, to satisfy the mandate in this subdivision, the public 
 10.28  utility must notify the commission by September 1, 2000, that it 
 10.29  has exercised the option and include in the notice the amount of 
 10.30  additional megawatts to be generated under the option 
 10.31  exercised.  Any review by the commission of the project after 
 10.32  exercise of such an option shall be based on the same criteria 
 10.33  used to review the existing contract. 
 10.34     (i) A facility specified in this subdivision qualifies for 
 10.35  exemption from property taxation under section 272.02, 
 10.36  subdivision 43. 
 11.1      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 11.2   following final enactment. 
 11.3      Sec. 8.  Minnesota Statutes 2000, section 271.01, 
 11.4   subdivision 5, is amended to read: 
 11.5      Subd. 5.  [JURISDICTION.] The tax court shall have 
 11.6   statewide jurisdiction.  Except for an appeal to the supreme 
 11.7   court or any other appeal allowed under this subdivision, the 
 11.8   tax court shall be the sole, exclusive, and final authority for 
 11.9   the hearing and determination of all questions of law and fact 
 11.10  arising under the tax laws of the state, as defined in this 
 11.11  subdivision, in those cases that have been appealed to the tax 
 11.12  court and in any case that has been transferred by the district 
 11.13  court to the tax court.  The tax court shall have no 
 11.14  jurisdiction in any case that does not arise under the tax laws 
 11.15  of the state or in any criminal case or in any case determining 
 11.16  or granting title to real property or in any case that is under 
 11.17  the probate jurisdiction of the district court.  The small 
 11.18  claims division of the tax court shall have no jurisdiction in 
 11.19  any case dealing with property valuation or assessment for 
 11.20  property tax purposes until the taxpayer has appealed the 
 11.21  valuation or assessment to the county board of equalization, and 
 11.22  in those towns and cities which have not transferred their 
 11.23  duties to the county, the town or city board of equalization, 
 11.24  except for:  (i) those taxpayers whose original assessments are 
 11.25  determined by the commissioner of revenue; and (ii) those 
 11.26  taxpayers appealing a denial of a current year application for 
 11.27  the homestead classification for their property and the denial 
 11.28  was not reflected on a valuation notice issued in the year; and 
 11.29  (iii) any case dealing with property valuation, assessment, or 
 11.30  taxation for property tax purposes and meeting the 
 11.31  jurisdictional requirements of section 271.21, subdivision 2, 
 11.32  paragraph (c).  The tax court shall have no jurisdiction in any 
 11.33  case involving an order of the state board of equalization 
 11.34  unless a taxpayer contests the valuation of property.  Laws 
 11.35  governing taxes, aids, and related matters administered by the 
 11.36  commissioner of revenue, laws dealing with property valuation, 
 12.1   assessment or taxation of property for property tax purposes, 
 12.2   and any other laws that contain provisions authorizing review of 
 12.3   taxes, aids, and related matters by the tax court shall be 
 12.4   considered tax laws of this state subject to the jurisdiction of 
 12.5   the tax court.  This subdivision shall not be construed to 
 12.6   prevent an appeal, as provided by law, to an administrative 
 12.7   agency, board of equalization, review under section 274.13, 
 12.8   subdivision 1c, or to the commissioner of revenue.  Wherever 
 12.9   used in this chapter, the term commissioner shall mean the 
 12.10  commissioner of revenue, unless otherwise specified. 
 12.11     Sec. 9.  Minnesota Statutes 2000, section 271.21, 
 12.12  subdivision 2, is amended to read: 
 12.13     Subd. 2.  [JURISDICTION.] At the election of the taxpayer, 
 12.14  the small claims division shall have jurisdiction only in the 
 12.15  following matters: 
 12.16     (a) cases involving valuation, assessment, or taxation of 
 12.17  real or personal property, if the taxpayer has satisfied the 
 12.18  requirements of section 271.01, subdivision 5, and:  (i) the 
 12.19  issue is a denial of a current year application for the 
 12.20  homestead classification for the taxpayer's property and the 
 12.21  denial was not reflected on a valuation notice issued in the 
 12.22  year; or (ii) in the case of nonhomestead property, the 
 12.23  assessor's estimated market value is less than $100,000; or 
 12.24     (b) any other case concerning the tax laws as defined in 
 12.25  section 271.01, subdivision 5, in which the amount in 
 12.26  controversy does not exceed $5,000, including penalty and 
 12.27  interest; or 
 12.28     (c) cases involving valuation, assessment, or taxation of 
 12.29  real or personal property if: 
 12.30     (i) the issue is a denial of a current year application for 
 12.31  the homestead classification for the taxpayer's property; 
 12.32     (ii) only one parcel is included in the petition, the 
 12.33  entire parcel is classified as homestead 1a or 1b pursuant to 
 12.34  section 273.13, and the parcel contains no more than one 
 12.35  dwelling unit; or 
 12.36     (iii) the assessor's estimated market value of the property 
 13.1   included in the petition is less than $300,000. 
 13.2      Sec. 10.  Minnesota Statutes 2000, section 272.02, 
 13.3   subdivision 22, is amended to read: 
 13.4      Subd. 22.  [WIND ENERGY CONVERSION SYSTEMS.] (a) Small 
 13.5   scale wind energy conversion systems installed after January 1, 
 13.6   1991, and used as an electric power source are exempt. 
 13.7      "Small scale wind energy conversion systems" are wind 
 13.8   energy conversion systems, as defined in section 216C.06, 
 13.9   subdivision 12, including the foundation or support pad, which 
 13.10  (i) are used as an electric power source; (ii) are located 
 13.11  within one county and owned by the same owner; and (iii) produce 
 13.12  two megawatts or less of electricity as measured by nameplate 
 13.13  ratings. 
 13.14     (b) Medium scale wind energy conversion systems installed 
 13.15  after January 1, 1991, are treated as follows:  (i) the 
 13.16  foundation and support pad are taxable; (ii) the associated 
 13.17  supporting and protective structures are exempt for the first 
 13.18  five assessment years after they have been constructed, and 
 13.19  thereafter, 30 percent of the market value of the associated 
 13.20  supporting and protective structures are taxable; and (iii) the 
 13.21  turbines, blades, transformers, and its related equipment, are 
 13.22  exempt.  "Medium scale wind energy conversion systems" are wind 
 13.23  energy conversion systems as defined in section 216C.06, 
 13.24  subdivision 12, including the foundation or support pad, which:  
 13.25  (i) are used as an electric power source; (ii) are located 
 13.26  within one county and owned by the same owner; and (iii) produce 
 13.27  more than two but equal to or less than 12 megawatts of energy 
 13.28  as measured by nameplate ratings. 
 13.29     (c) Large scale wind energy conversion systems installed 
 13.30  after January 1, 1991, are treated as follows:  25 percent of 
 13.31  the market value of all property is taxable, including (i) the 
 13.32  foundation and support pad; (ii) the associated supporting and 
 13.33  protective structures; and (iii) the turbines, blades, 
 13.34  transformers, and its related equipment.  "Large scale wind 
 13.35  energy conversion systems" are wind energy conversion systems as 
 13.36  defined in section 216C.06, subdivision 12, including the 
 14.1   foundation or support pad, which (i) are used as an electric 
 14.2   power source; and (ii) produce more than 12 megawatts of energy 
 14.3   as measured by nameplate ratings. 
 14.4      (d) The total size of a wind energy conversion system under 
 14.5   this subdivision shall be determined according to this paragraph.
 14.6   Unless the systems are interconnected with different 
 14.7   distribution systems, the nameplate capacity of one wind energy 
 14.8   conversion system shall be combined with the nameplate capacity 
 14.9   of any other wind energy conversion system that is: 
 14.10     (1) located within five miles of the wind energy conversion 
 14.11  system; 
 14.12     (2) constructed within the same calendar year as the wind 
 14.13  energy conversion system; and 
 14.14     (3) under common ownership.  
 14.15     In the case of a dispute, the commissioner of commerce 
 14.16  shall determine the total size of the system, and shall draw all 
 14.17  reasonable inferences in favor of combining the systems. 
 14.18     (e) In making a determination under paragraph (d), the 
 14.19  commissioner of commerce may determine that two wind energy 
 14.20  conversion systems are under common ownership when the 
 14.21  underlying ownership structure contains similar persons or 
 14.22  entities, even if the ownership shares differ between the two 
 14.23  systems.  Wind energy conversion systems are not under common 
 14.24  ownership solely because the same person or entity provided 
 14.25  equity financing for the systems. 
 14.26     <b>[EFFECTIVE DATE.]</b> This section is effective for wind energy 
 14.27  conversion systems installed after January 1, 2001. 
 14.28     Sec. 11.  Minnesota Statutes 2000, section 272.02, is 
 14.29  amended by adding a subdivision to read: 
 14.30     Subd. 46.  [RESIDENTIAL BUILDINGS ON TEMPORARY SITES.] A 
 14.31  newly constructed building that is situated on real property is 
 14.32  exempt if it is: 
 14.33     (1) intended for future residential occupancy; 
 14.34     (2) on a temporary foundation and intended to be moved; 
 14.35     (3) not used as a model or for any other business purposes; 
 14.36     (4) not connected to any utilities; and 
 15.1      (5) located on land that will not be sold with the building.
 15.2      The exemption under this subdivision is allowable for only 
 15.3   one assessment year after the date of the initial construction 
 15.4   of the building. 
 15.5      <b>[EFFECTIVE DATE.]</b> This section is effective for assessment 
 15.6   year 2001 and thereafter. 
 15.7      Sec. 12.  [272.028] [PAYMENT IN LIEU OF PERSONAL PROPERTY 
 15.8   TAX; WIND GENERATION FACILITIES.] 
 15.9      A developer of a new or existing medium or large scale wind 
 15.10  energy conversion system, as defined under section 272.02, 
 15.11  subdivision 22, paragraphs (b) and (c), may negotiate with the 
 15.12  city or town and the county where the wind energy conversion 
 15.13  system is located to establish a payment in lieu of tax on 
 15.14  personal property used to generate electric power.  The in lieu 
 15.15  payment is to provide fees or compensation to the host 
 15.16  jurisdictions to maintain public infrastructure and services.  
 15.17  The payment in lieu of personal property tax may be based on 
 15.18  production capacity, historical production, or other factors 
 15.19  agreed upon by the parties.  The payment in lieu of tax 
 15.20  agreement must be signed by the parties and filed with the 
 15.21  commissioner of revenue and the county recorder.  Upon execution 
 15.22  and filing of the agreement, the personal property to which the 
 15.23  in lieu payment applies shall be deemed exempt from tax under 
 15.24  section 272.02, subdivision 22, paragraphs (b) and (c).  This 
 15.25  exemption shall be effective for the assessment year in which 
 15.26  the in lieu payment is agreed upon and shall remain exempt for 
 15.27  the same duration as the in lieu payments are in effect. 
 15.28     Sec. 13.  Minnesota Statutes 2000, section 273.11, 
 15.29  subdivision 1a, is amended to read: 
 15.30     Subd. 1a.  [LIMITED MARKET VALUE.] In the case of all 
 15.31  property classified as agricultural homestead or nonhomestead, 
 15.32  residential homestead or nonhomestead, or noncommercial seasonal 
 15.33  recreational residential, the assessor shall compare the value 
 15.34  with that the taxable portion of the value determined in the 
 15.35  preceding assessment.  The amount of the increase entered in the 
 15.36  current assessment shall not exceed the greater of (1) 8.5 
 16.1   percent of the value in the preceding assessment, or (2) 15 
 16.2   percent of the difference between the current assessment and the 
 16.3   preceding assessment. 
 16.4      For assessment year 2002, the amount of the increase shall 
 16.5   not exceed the greater of (1) 10 percent of the value in the 
 16.6   preceding assessment, or (2) 15 percent of the difference 
 16.7   between the current assessment and the preceding assessment. 
 16.8      For assessment year 2003, the amount of the increase shall 
 16.9   not exceed the greater of (1) 12 percent of the value in the 
 16.10  preceding assessment, or (2) 20 percent of the difference 
 16.11  between the current assessment and the preceding assessment. 
 16.12     For assessment year 2004, the amount of the increase shall 
 16.13  not exceed the greater of (1) 15 percent of the value in the 
 16.14  preceding assessment, or (2) 25 percent of the difference 
 16.15  between the current assessment and the preceding assessment. 
 16.16     For assessment year 2005, the amount of the increase shall 
 16.17  not exceed the greater of (1) 15 percent of the value in the 
 16.18  preceding assessment, or (2) 33 percent of the difference 
 16.19  between the current assessment and the preceding assessment.  
 16.20     For assessment year 2006, the amount of the increase shall 
 16.21  not exceed the greater of (1) 15 percent of the value in the 
 16.22  preceding assessment, or (2) 50 percent of the difference 
 16.23  between the current assessment and the preceding assessment. 
 16.24     This limitation shall not apply to increases in value due 
 16.25  to improvements.  For purposes of this subdivision, the term 
 16.26  "assessment" means the value prior to any exclusion under 
 16.27  subdivision 16. 
 16.28     The provisions of this subdivision shall be in effect only 
 16.29  through assessment year 2001 2006 as provided in this 
 16.30  subdivision. 
 16.31     For purposes of the assessment/sales ratio study conducted 
 16.32  under section 127A.48, and the computation of state aids paid 
 16.33  under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and 
 16.34  477A, market values and net tax capacities determined under this 
 16.35  subdivision and subdivision 16, shall be used. 
 16.36     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 17.1   following final enactment. 
 17.2      Sec. 14.  Minnesota Statutes 2000, section 273.11, 
 17.3   subdivision 14, is amended to read: 
 17.4      Subd. 14.  [VACANT LAND PLATTED ON OR AFTER BEFORE AUGUST 
 17.5   1, 1991 2001.] (a) All land platted on or after before August 1, 
 17.6   1991 2001, and not improved with a permanent structure, shall be 
 17.7   assessed as provided in this subdivision.  The assessor shall 
 17.8   determine the market value of each individual lot based upon the 
 17.9   highest and best use of the property as unplatted land.  In 
 17.10  establishing the market value of the property, the assessor 
 17.11  shall consider the sale price of the unplatted land or 
 17.12  comparable sales of unplatted land of similar use and similar 
 17.13  availability of public utilities. 
 17.14     (b) The market value determined in paragraph (a) shall be 
 17.15  increased as follows for each of the three assessment years 
 17.16  immediately following the final approval of the plat:  one-third 
 17.17  of the difference between the property's unplatted market value 
 17.18  as determined under paragraph (a) and the market value based 
 17.19  upon the highest and best use of the land as platted property 
 17.20  shall be added in each of the three subsequent assessment years. 
 17.21     (c) Any increase in market value after the first assessment 
 17.22  year following the plat's final approval shall be added to the 
 17.23  property's market value in the next assessment year.  
 17.24  Notwithstanding paragraph (b), if construction begins before the 
 17.25  expiration of the three years in paragraph (b), that lot shall 
 17.26  be eligible for revaluation in the next assessment year.  The 
 17.27  market value of a platted lot determined under this subdivision 
 17.28  shall not exceed the value of that lot based upon the highest 
 17.29  and best use of the property as platted land. 
 17.30     <b>[EFFECTIVE DATE.]</b> This section is effective for land 
 17.31  platted after July 31, 2001. 
 17.32     Sec. 15.  Minnesota Statutes 2000, section 273.11, is 
 17.33  amended by adding a subdivision to read: 
 17.34     Subd. 14a.  [VACANT LAND PLATTED ON OR AFTER AUGUST 1, 
 17.35  2001; LOCATED IN METROPOLITAN COUNTIES.] (a) All land platted on 
 17.36  or after August 1, 2001, located in a metropolitan county, and 
 18.1   not improved with a permanent structure, shall be assessed as 
 18.2   provided in this subdivision.  The assessor shall determine the 
 18.3   market value of each individual lot based upon the highest and 
 18.4   best use of the property as unplatted land.  In establishing the 
 18.5   market value of the property, the assessor shall consider the 
 18.6   sale price of the unplatted land or comparable sales of 
 18.7   unplatted land of similar use and similar availability of public 
 18.8   utilities. 
 18.9      (b) The market value determined in paragraph (a) shall be 
 18.10  increased as follows for each of the three assessment years 
 18.11  immediately following the final approval of the plat:  one-third 
 18.12  of the difference between the property's unplatted market value 
 18.13  as determined under paragraph (a) and the market value based 
 18.14  upon the highest and best use of the land as platted property 
 18.15  shall be added in each of the three subsequent assessment years. 
 18.16     (c) Any increase in market value after the first assessment 
 18.17  year following the plat's final approval shall be added to the 
 18.18  property's market value in the next assessment year.  
 18.19  Notwithstanding paragraph (b), if construction begins before the 
 18.20  expiration of the three years in paragraph (b), that lot shall 
 18.21  be eligible for revaluation in the next assessment year.  The 
 18.22  market value of a platted lot determined under this subdivision 
 18.23  shall not exceed the value of that lot based upon the highest 
 18.24  and best use of the property as platted land. 
 18.25     (d) For purposes of this section, "metropolitan county" 
 18.26  means the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, 
 18.27  Scott, and Washington. 
 18.28     <b>[EFFECTIVE DATE.]</b> This section is effective for land 
 18.29  platted after July 31, 2001. 
 18.30     Sec. 16.  Minnesota Statutes 2000, section 273.11, is 
 18.31  amended by adding a subdivision to read: 
 18.32     Subd. 14b.  [VACANT LAND PLATTED ON OR AFTER AUGUST 1, 
 18.33  2001; LOCATED IN NONMETROPOLITAN COUNTIES.] (a) All land platted 
 18.34  on or after August 1, 2001, located in a nonmetropolitan county, 
 18.35  and not improved with a permanent structure, shall be assessed 
 18.36  as provided in this subdivision.  The assessor shall determine 
 19.1   the market value of each individual lot based upon the highest 
 19.2   and best use of the property as unplatted land.  In establishing 
 19.3   the market value of the property, the assessor shall consider 
 19.4   the sale price of the unplatted land or comparable sales of 
 19.5   unplatted land of similar use and similar availability of public 
 19.6   utilities. 
 19.7      (b) The market value determined in paragraph (a) shall be 
 19.8   increased as follows for each of the five assessment years 
 19.9   immediately following the final approval of the plat:  one-fifth 
 19.10  of the difference between the property's unplatted market value 
 19.11  as determined under paragraph (a) and the market value based 
 19.12  upon the highest and best use of the land as platted property 
 19.13  shall be added in each of the five subsequent assessment years. 
 19.14     (c) Any increase in market value after the first assessment 
 19.15  year following the plat's final approval shall be added to the 
 19.16  property's market value in the next assessment year.  
 19.17  Notwithstanding paragraph (b), if construction begins before the 
 19.18  expiration of the five years in paragraph (b), that lot shall be 
 19.19  eligible for revaluation in the next assessment year.  The 
 19.20  market value of a platted lot determined under this subdivision 
 19.21  shall not exceed the value of that lot based upon the highest 
 19.22  and best use of the property as platted land. 
 19.23     <b>[EFFECTIVE DATE.]</b> This section is effective for land 
 19.24  platted after July 31, 2001. 
 19.25     Sec. 17.  Minnesota Statutes 2000, section 273.124, 
 19.26  subdivision 1, is amended to read: 
 19.27     Subdivision 1.  [GENERAL RULE.] (a) Residential real estate 
 19.28  that is occupied and used for the purposes of a homestead by its 
 19.29  owner, who must be a Minnesota resident, is a residential 
 19.30  homestead.  
 19.31     Agricultural land, as defined in section 273.13, 
 19.32  subdivision 23, that is occupied and used as a homestead by its 
 19.33  owner, who must be a Minnesota resident, is an agricultural 
 19.34  homestead. 
 19.35     Dates for establishment of a homestead and homestead 
 19.36  treatment provided to particular types of property are as 
 20.1   provided in this section.  
 20.2      Property held by a trustee under a trust is eligible for 
 20.3   homestead classification if the requirements under this chapter 
 20.4   are satisfied. 
 20.5      The assessor shall require proof, as provided in 
 20.6   subdivision 13, of the facts upon which classification as a 
 20.7   homestead may be determined.  Notwithstanding any other law, the 
 20.8   assessor may at any time require a homestead application to be 
 20.9   filed in order to verify that any property classified as a 
 20.10  homestead continues to be eligible for homestead status.  
 20.11  Notwithstanding any other law to the contrary, the department of 
 20.12  revenue may, upon request from an assessor, verify whether an 
 20.13  individual who is requesting or receiving homestead 
 20.14  classification has filed a Minnesota income tax return as a 
 20.15  resident for the most recent taxable year for which the 
 20.16  information is available. 
 20.17     When there is a name change or a transfer of homestead 
 20.18  property, the assessor may reclassify the property in the next 
 20.19  assessment unless a homestead application is filed to verify 
 20.20  that the property continues to qualify for homestead 
 20.21  classification. 
 20.22     (b) For purposes of this section, homestead property shall 
 20.23  include property which is used for purposes of the homestead but 
 20.24  is separated from the homestead by a road, street, lot, 
 20.25  waterway, or other similar intervening property.  The term "used 
 20.26  for purposes of the homestead" shall include but not be limited 
 20.27  to uses for gardens, garages, or other outbuildings commonly 
 20.28  associated with a homestead, but shall not include vacant land 
 20.29  held primarily for future development.  In order to receive 
 20.30  homestead treatment for the noncontiguous property, the owner 
 20.31  must use the property for the purposes of the homestead, and 
 20.32  must apply to the assessor, both by the deadlines given in 
 20.33  subdivision 9.  After initial qualification for the homestead 
 20.34  treatment, additional applications for subsequent years are not 
 20.35  required. 
 20.36     (c) Residential real estate that is occupied and used for 
 21.1   purposes of a homestead by a relative of the owner is a 
 21.2   homestead but only to the extent of the homestead treatment that 
 21.3   would be provided if the related owner occupied the property.  
 21.4   For purposes of this paragraph and paragraph (g), "relative" 
 21.5   means a parent, stepparent, child, stepchild, grandparent, 
 21.6   grandchild, brother, sister, uncle, aunt, nephew, or niece.  
 21.7   This relationship may be by blood or marriage.  Property that 
 21.8   has been classified as seasonal recreational residential 
 21.9   property at any time during which it has been owned by the 
 21.10  current owner or spouse of the current owner will not be 
 21.11  reclassified as a homestead unless it is occupied as a homestead 
 21.12  by the owner; this prohibition also applies to property that, in 
 21.13  the absence of this paragraph, would have been classified as 
 21.14  seasonal recreational residential property at the time when the 
 21.15  residence was constructed.  Neither the related occupant nor the 
 21.16  owner of the property may claim a property tax refund under 
 21.17  chapter 290A for a homestead occupied by a relative.  In the 
 21.18  case of a residence located on agricultural land, only the 
 21.19  house, garage, and immediately surrounding one acre of land 
 21.20  shall be classified as a homestead under this paragraph, except 
 21.21  as provided in paragraph (d). 
 21.22     (d) Agricultural property that is occupied and used for 
 21.23  purposes of a homestead by a relative of the owner, is a 
 21.24  homestead, only to the extent of the homestead treatment that 
 21.25  would be provided if the related owner occupied the property, 
 21.26  and only if all of the following criteria are met: 
 21.27     (1) the relative who is occupying the agricultural property 
 21.28  is a son, daughter, grandson, granddaughter, father, or mother 
 21.29  of the owner of the agricultural property or a son, daughter, 
 21.30  grandson, or granddaughter of the spouse of the owner of the 
 21.31  agricultural property; 
 21.32     (2) the owner of the agricultural property must be a 
 21.33  Minnesota resident; 
 21.34     (3) the owner of the agricultural property must not receive 
 21.35  homestead treatment on any other agricultural property in 
 21.36  Minnesota; and 
 22.1      (4) the owner of the agricultural property is limited to 
 22.2   only one agricultural homestead per family under this paragraph. 
 22.3      Neither the related occupant nor the owner of the property 
 22.4   may claim a property tax refund under chapter 290A for a 
 22.5   homestead occupied by a relative qualifying under this 
 22.6   paragraph.  For purposes of this paragraph, "agricultural 
 22.7   property" means the house, garage, other farm buildings and 
 22.8   structures, and agricultural land. 
 22.9      Application must be made to the assessor by the owner of 
 22.10  the agricultural property to receive homestead benefits under 
 22.11  this paragraph.  The assessor may require the necessary proof 
 22.12  that the requirements under this paragraph have been met. 
 22.13     (e) In the case of property owned by a property owner who 
 22.14  is married, the assessor must not deny homestead treatment in 
 22.15  whole or in part if only one of the spouses occupies the 
 22.16  property and the other spouse is absent due to:  (1) marriage 
 22.17  dissolution proceedings, (2) legal separation, (3) employment or 
 22.18  self-employment in another location, or (4) other personal 
 22.19  circumstances causing the spouses to live separately, not 
 22.20  including an intent to obtain two homestead classifications for 
 22.21  property tax purposes.  To qualify under clause (3), the 
 22.22  spouse's place of employment or self-employment must be at least 
 22.23  50 miles distant from the other spouse's place of employment, 
 22.24  and the homesteads must be at least 50 miles distant from each 
 22.25  other.  Homestead treatment, in whole or in part, shall not be 
 22.26  denied to the owner's spouse who previously occupied the 
 22.27  residence with the owner if the absence of the owner is due to 
 22.28  one of the exceptions provided in this paragraph. 
 22.29     (f) The assessor must not deny homestead treatment in whole 
 22.30  or in part if: 
 22.31     (1) in the case of a property owner who is not married, the 
 22.32  owner is absent due to residence in a nursing home or, boarding 
 22.33  care facility, or an elderly assisted living facility property 
 22.34  as defined in section 273.13, subdivision 25a, and the property 
 22.35  is not otherwise occupied; or 
 22.36     (2) in the case of a property owner who is married, the 
 23.1   owner or the owner's spouse or both are absent due to residence 
 23.2   in a nursing home or, boarding care facility, or an elderly 
 23.3   assisted living facility property as defined in section 273.13, 
 23.4   subdivision 25a, and the property is not occupied or is occupied 
 23.5   only by the owner's spouse. 
 23.6      (g) If an individual is purchasing property with the intent 
 23.7   of claiming it as a homestead and is required by the terms of 
 23.8   the financing agreement to have a relative shown on the deed as 
 23.9   a coowner, the assessor shall allow a full homestead 
 23.10  classification.  This provision only applies to first-time 
 23.11  purchasers, whether married or single, or to a person who had 
 23.12  previously been married and is purchasing as a single individual 
 23.13  for the first time.  The application for homestead benefits must 
 23.14  be on a form prescribed by the commissioner and must contain the 
 23.15  data necessary for the assessor to determine if full homestead 
 23.16  benefits are warranted. 
 23.17     (h) If residential or agricultural real estate is occupied 
 23.18  and used for purposes of a homestead by a child of a deceased 
 23.19  owner and the property is subject to jurisdiction of probate 
 23.20  court, the child shall receive relative homestead classification 
 23.21  under paragraph (c) or (d) to the same extent they would be 
 23.22  entitled to it if the owner was still living, until the probate 
 23.23  is completed.  For purposes of this paragraph, "child" includes 
 23.24  a relationship by blood or by marriage. 
 23.25     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 23.26  levied in 2001, payable in 2002, and thereafter. 
 23.27     Sec. 18.  Minnesota Statutes 2000, section 273.124, 
 23.28  subdivision 8, is amended to read: 
 23.29     Subd. 8.  [HOMESTEAD OWNED BY OR LEASED TO FAMILY FARM 
 23.30  CORPORATION, JOINT FAMILY FARM VENTURE, LIMITED LIABILITY 
 23.31  COMPANY, OR PARTNERSHIP.] (a) Each family farm corporation, each 
 23.32  joint family farm venture, each limited liability company, and 
 23.33  each partnership operating a family farm is entitled to class 1b 
 23.34  under section 273.13, subdivision 22, paragraph (b), or class 2a 
 23.35  assessment for one homestead occupied by a shareholder, member, 
 23.36  or partner thereof who is residing on the land except as 
 24.1   provided in subdivision 14, paragraph (g), and actively engaged 
 24.2   in farming of the land owned by the family farm corporation, 
 24.3   joint family farm venture, limited liability company, or 
 24.4   partnership operating a family farm.  Homestead treatment 
 24.5   applies even if legal title to the property is in the name of 
 24.6   the family farm corporation, joint family farm venture, limited 
 24.7   liability company, or partnership operating the family farm, and 
 24.8   not in the name of the person residing on it. 
 24.9      "Family farm corporation," "family farm," and "farm 
 24.10  partnership operating a family farm" have the meanings given in 
 24.11  section 500.24, except that the number of allowable 
 24.12  shareholders, members, or partners under this subdivision shall 
 24.13  not exceed 12.  "Limited liability company" has the meaning 
 24.14  contained in section sections 322B.03, subdivision 28, and 
 24.15  500.24, subdivision 2, paragraphs (l) and (m).  "Joint family 
 24.16  farm venture" means a cooperative agreement among two or more 
 24.17  farm enterprises authorized to operate a family farm land under 
 24.18  section 500.24. 
 24.19     (b) In addition to property specified in paragraph (a), any 
 24.20  other residences owned by family farm corporations, joint family 
 24.21  farm ventures, limited liability companies, or 
 24.22  partnerships operating a family farm described in paragraph (a) 
 24.23  which are located on agricultural land and occupied as 
 24.24  homesteads by its shareholders, members, or partners who are 
 24.25  actively engaged in farming on behalf of the that corporation, 
 24.26  joint farm venture, limited liability company, or partnership 
 24.27  must also be assessed as class 2a property or as class 1b 
 24.28  property under section 273.13, subdivision 22, paragraph (b). 
 24.29     (c) Agricultural property that is owned by a member, 
 24.30  partner, or shareholder of a family farm corporation or 
 24.31  joint family farm venture, as defined in paragraph (a), or by a 
 24.32  member of a limited liability company, or by a partner in a 
 24.33  partnership operating a family farm and leased to the family 
 24.34  farm corporation by the shareholder, or to a member of a, 
 24.35  limited liability company, or to the partnership by the partner 
 24.36  operating a family farm, or joint farm venture, as defined in 
 25.1   paragraph (a), is eligible for classification as class 1b or 
 25.2   class 2a under section 273.13, subdivision 22, paragraph (b), or 
 25.3   class 2a under section 273.13, subdivision 23, paragraph (a), if 
 25.4   the owner is actually residing on the property except as 
 25.5   provided in subdivision 14, paragraph (g), and is actually 
 25.6   engaged in farming the land on behalf of the that corporation, 
 25.7   joint farm venture, limited liability company, or partnership.  
 25.8   This paragraph applies without regard to any legal possession 
 25.9   rights of the family farm corporation, joint family farm 
 25.10  venture, limited liability company, or partnership operating a 
 25.11  family farm under the lease. 
 25.12     <b>[EFFECTIVE DATE.]</b> This section is effective for the 2001 
 25.13  assessment, taxes payable in 2002, and thereafter. 
 25.14     Sec. 19.  Minnesota Statutes 2000, section 273.124, 
 25.15  subdivision 13, is amended to read: 
 25.16     Subd. 13.  [HOMESTEAD APPLICATION.] (a) A person who meets 
 25.17  the homestead requirements under subdivision 1 must file a 
 25.18  homestead application with the county assessor to initially 
 25.19  obtain homestead classification. 
 25.20     (b) On or before January 2, 1993, each county assessor 
 25.21  shall mail a homestead application to the owner of each parcel 
 25.22  of property within the county which was classified as homestead 
 25.23  for the 1992 assessment year.  The format and contents of a 
 25.24  uniform homestead application shall be prescribed by the 
 25.25  commissioner of revenue.  The commissioner shall consult with 
 25.26  the chairs of the house and senate tax committees on the 
 25.27  contents of the homestead application form.  The application 
 25.28  must clearly inform the taxpayer that this application must be 
 25.29  signed by all owners who occupy the property or by the 
 25.30  qualifying relative and returned to the county assessor in order 
 25.31  for the property to continue receiving homestead treatment.  The 
 25.32  envelope containing the homestead application shall clearly 
 25.33  identify its contents and alert the taxpayer of its necessary 
 25.34  immediate response. 
 25.35     (c) Every property owner applying for homestead 
 25.36  classification must furnish to the county assessor the social 
 26.1   security number of each occupant who is listed as an owner of 
 26.2   the property on the deed of record, the name and address of each 
 26.3   owner who does not occupy the property, and the name and social 
 26.4   security number of each owner's spouse who occupies the 
 26.5   property.  The application must be signed by each owner who 
 26.6   occupies the property and by each owner's spouse who occupies 
 26.7   the property, or, in the case of property that qualifies as a 
 26.8   homestead under subdivision 1, paragraph (c), by the qualifying 
 26.9   relative. 
 26.10     If a property owner occupies a homestead, the property 
 26.11  owner's spouse may not claim another property as a homestead 
 26.12  unless the property owner and the property owner's spouse file 
 26.13  with the assessor an affidavit or other proof required by the 
 26.14  assessor stating that the property qualifies as a homestead 
 26.15  under subdivision 1, paragraph (e). 
 26.16     Owners or spouses occupying residences owned by their 
 26.17  spouses and previously occupied with the other spouse, either of 
 26.18  whom fail to include the other spouse's name and social security 
 26.19  number on the homestead application or provide the affidavits or 
 26.20  other proof requested, will be deemed to have elected to receive 
 26.21  only partial homestead treatment of their residence.  The 
 26.22  remainder of the residence will be classified as nonhomestead 
 26.23  residential.  When an owner or spouse's name and social security 
 26.24  number appear on homestead applications for two separate 
 26.25  residences and only one application is signed, the owner or 
 26.26  spouse will be deemed to have elected to homestead the residence 
 26.27  for which the application was signed. 
 26.28     The social security numbers or affidavits or other proofs 
 26.29  of the property owners and spouses are private data on 
 26.30  individuals as defined by section 13.02, subdivision 12, but, 
 26.31  notwithstanding that section, the private data may be disclosed 
 26.32  to the commissioner of revenue, or, for purposes of proceeding 
 26.33  under the Revenue Recapture Act to recover personal property 
 26.34  taxes owing, to the county treasurer. 
 26.35     (d) If residential real estate is occupied and used for 
 26.36  purposes of a homestead by a relative of the owner and qualifies 
 27.1   for a homestead under subdivision 1, paragraph (c), in order for 
 27.2   the property to receive homestead status, a homestead 
 27.3   application must be filed with the assessor.  The social 
 27.4   security number of each relative occupying the property and the 
 27.5   social security number of each owner who is related to an 
 27.6   occupant of the property shall be required on the homestead 
 27.7   application filed under this subdivision.  If a different 
 27.8   relative of the owner subsequently occupies the property, the 
 27.9   owner of the property must notify the assessor within 30 days of 
 27.10  the change in occupancy.  The social security number of a 
 27.11  relative occupying the property is private data on individuals 
 27.12  as defined by section 13.02, subdivision 12, but may be 
 27.13  disclosed to the commissioner of revenue.  
 27.14     (e) The homestead application shall also notify the 
 27.15  property owners that the application filed under this section 
 27.16  will not be mailed annually and that if the property is granted 
 27.17  homestead status for the 1993 assessment, or any assessment year 
 27.18  thereafter, that same property shall remain classified as 
 27.19  homestead until the property is sold or transferred to another 
 27.20  person, or the owners, the spouse of the owner, or the relatives 
 27.21  no longer use the property as their homestead.  Upon the sale or 
 27.22  transfer of the homestead property, a certificate of value must 
 27.23  be timely filed with the county auditor as provided under 
 27.24  section 272.115.  Failure to notify the assessor within 30 days 
 27.25  that the property has been sold, transferred, or that the owner, 
 27.26  the spouse of the owner, or the relative is no longer occupying 
 27.27  the property as a homestead, shall result in the penalty 
 27.28  provided under this subdivision and the property will lose its 
 27.29  current homestead status. 
 27.30     (f) If the homestead application is not returned within 30 
 27.31  days, the county will send a second application to the present 
 27.32  owners of record.  The notice of proposed property taxes 
 27.33  prepared under section 275.065, subdivision 3, shall reflect the 
 27.34  property's classification.  Beginning with assessment year 1993 
 27.35  for all properties, if a homestead application has not been 
 27.36  filed with the county by December 15, the assessor shall 
 28.1   classify the property as nonhomestead for the current assessment 
 28.2   year for taxes payable in the following year, provided that the 
 28.3   owner may be entitled to receive the homestead classification by 
 28.4   proper application under section 375.192. 
 28.5      (g) At the request of the commissioner, each county must 
 28.6   give the commissioner a list that includes the name and social 
 28.7   security number of each property owner and the property owner's 
 28.8   spouse occupying the property, or relative of a property owner, 
 28.9   applying for homestead classification under this subdivision.  
 28.10  The commissioner shall use the information provided on the lists 
 28.11  as appropriate under the law, including for the detection of 
 28.12  improper claims by owners, or relatives of owners, under chapter 
 28.13  290A.  
 28.14     (h) If the commissioner finds that a property owner may be 
 28.15  claiming a fraudulent homestead, the commissioner shall notify 
 28.16  the appropriate counties.  Within 90 days of the notification, 
 28.17  the county assessor shall investigate to determine if the 
 28.18  homestead classification was properly claimed.  If the property 
 28.19  owner does not qualify, the county assessor shall notify the 
 28.20  county auditor who will determine the amount of homestead 
 28.21  benefits that had been improperly allowed.  For the purpose of 
 28.22  this section, "homestead benefits" means the tax reduction 
 28.23  resulting from the classification as a homestead under section 
 28.24  273.13, the taconite homestead credit under section 273.135, and 
 28.25  the supplemental homestead credit under section 273.1391. 
 28.26     The county auditor shall send a notice to the person who 
 28.27  owned the affected property at the time the homestead 
 28.28  application related to the improper homestead was filed, 
 28.29  demanding reimbursement of the homestead benefits plus a penalty 
 28.30  equal to 100 percent of the homestead benefits.  The person 
 28.31  notified may appeal the county's determination by serving copies 
 28.32  of a petition for review with county officials as provided in 
 28.33  section 278.01 and filing proof of service as provided in 
 28.34  section 278.01 with the Minnesota tax court within 60 days of 
 28.35  the date of the notice from the county.  Procedurally, the 
 28.36  appeal is governed by the provisions in chapter 271 which apply 
 29.1   to the appeal of a property tax assessment or levy, but without 
 29.2   requiring any prepayment of the amount in controversy.  If the 
 29.3   amount of homestead benefits and penalty is not paid within 60 
 29.4   days, and if no appeal has been filed, the county auditor shall 
 29.5   certify the amount of taxes and penalty to the county 
 29.6   treasurer.  The county treasurer will add interest to the unpaid 
 29.7   homestead benefits and penalty amounts at the rate provided in 
 29.8   section 279.03 for real property taxes becoming delinquent in 
 29.9   the calendar year during which the amount remains unpaid.  
 29.10  Interest may be assessed for the period beginning 60 days after 
 29.11  demand for payment was made. 
 29.12     If the person notified is the current owner of the 
 29.13  property, the treasurer may add the total amount of homestead 
 29.14  benefits, penalty, interest, and costs to the ad valorem taxes 
 29.15  otherwise payable on the property by including the amounts on 
 29.16  the property tax statements under section 276.04, subdivision 
 29.17  3.  The amounts added under this paragraph to the ad valorem 
 29.18  taxes shall include interest accrued through December 31 of the 
 29.19  year preceding the taxes payable year for which the amounts are 
 29.20  first added.  These amounts, when added to the property tax 
 29.21  statement, become subject to all the laws for the enforcement of 
 29.22  real or personal property taxes for that year, and for any 
 29.23  subsequent year. 
 29.24     If the person notified is not the current owner of the 
 29.25  property, the treasurer may collect the amounts due under the 
 29.26  Revenue Recapture Act in chapter 270A, or use any of the powers 
 29.27  granted in sections 277.20 and 277.21 without exclusion, to 
 29.28  enforce payment of the homestead benefits, penalty, interest, 
 29.29  and costs, as if those amounts were delinquent tax obligations 
 29.30  of the person who owned the property at the time the application 
 29.31  related to the improperly allowed homestead was filed.  The 
 29.32  treasurer may relieve a prior owner of personal liability for 
 29.33  the homestead benefits, penalty, interest, and costs, and 
 29.34  instead extend those amounts on the tax lists against the 
 29.35  property as provided in this paragraph to the extent that the 
 29.36  current owner agrees in writing.  On all demands, billings, 
 30.1   property tax statements, and related correspondence, the county 
 30.2   must list and state separately the amounts of homestead 
 30.3   benefits, penalty, interest and costs being demanded, billed or 
 30.4   assessed. 
 30.5      (i) Any amount of homestead benefits recovered by the 
 30.6   county from the property owner shall be distributed to the 
 30.7   county, city or town, and school district where the property is 
 30.8   located in the same proportion that each taxing district's levy 
 30.9   was to the total of the three taxing districts' levy for the 
 30.10  current year.  Any amount recovered attributable to taconite 
 30.11  homestead credit shall be transmitted to the St. Louis county 
 30.12  auditor to be deposited in the taconite property tax relief 
 30.13  account.  Any amount recovered that is attributable to 
 30.14  supplemental homestead credit is to be transmitted to the 
 30.15  commissioner of revenue for deposit in the general fund of the 
 30.16  state treasury.  The total amount of penalty collected must be 
 30.17  deposited in the county general fund. 
 30.18     (j) If a property owner has applied for more than one 
 30.19  homestead and the county assessors cannot determine which 
 30.20  property should be classified as homestead, the county assessors 
 30.21  will refer the information to the commissioner.  The 
 30.22  commissioner shall make the determination and notify the 
 30.23  counties within 60 days. 
 30.24     (k) In addition to lists of homestead properties, the 
 30.25  commissioner may ask the counties to furnish lists of all 
 30.26  properties and the record owners.  The social security numbers 
 30.27  and federal identification numbers that are maintained by a 
 30.28  county or city assessor for property tax administration 
 30.29  purposes, and that may appear on the lists retain their 
 30.30  classification as private or nonpublic data; but may be viewed, 
 30.31  accessed, and used by the county auditor or treasurer of the 
 30.32  same county for the limited purpose of assisting the 
 30.33  commissioner in the preparation of microdata samples under 
 30.34  section 270.0681. 
 30.35     <b>[EFFECTIVE DATE.]</b> This section is effective for homestead 
 30.36  applications submitted on or after the day following final 
 31.1   enactment. 
 31.2      Sec. 20.  Minnesota Statutes 2000, section 273.124, 
 31.3   subdivision 14, is amended to read: 
 31.4      Subd. 14.  [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.] 
 31.5   (a) Real estate of less than ten acres that is the homestead of 
 31.6   its owner must be classified as class 2a under section 273.13, 
 31.7   subdivision 23, paragraph (a), if:  
 31.8      (1) the parcel on which the house is located is contiguous 
 31.9   on at least two sides to (i) agricultural land, (ii) land owned 
 31.10  or administered by the United States Fish and Wildlife Service, 
 31.11  or (iii) land administered by the department of natural 
 31.12  resources on which in lieu taxes are paid under sections 477A.11 
 31.13  to 477A.14; 
 31.14     (2) its owner also owns a noncontiguous parcel of 
 31.15  agricultural land that is at least 20 acres; 
 31.16     (3) the noncontiguous land is located not farther than four 
 31.17  townships or cities, or a combination of townships or cities 
 31.18  from the homestead; and 
 31.19     (4) the agricultural use value of the noncontiguous land 
 31.20  and farm buildings is equal to at least 50 percent of the market 
 31.21  value of the house, garage, and one acre of land. 
 31.22     Homesteads initially classified as class 2a under the 
 31.23  provisions of this paragraph shall remain classified as class 
 31.24  2a, irrespective of subsequent changes in the use of adjoining 
 31.25  properties, as long as the homestead remains under the same 
 31.26  ownership, the owner owns a noncontiguous parcel of agricultural 
 31.27  land that is at least 20 acres, and the agricultural use value 
 31.28  qualifies under clause (4).  Homestead classification under this 
 31.29  paragraph is limited to property that qualified under this 
 31.30  paragraph for the 1998 assessment. 
 31.31     (b)(i) Agricultural property consisting of at least 40 
 31.32  acres shall be classified as the owner's homestead, to the same 
 31.33  extent as other agricultural homestead property, if all of the 
 31.34  following criteria are met: 
 31.35     (1) the owner, the owner's spouse, or the owner's son or 
 31.36  daughter of the owner or owner's spouse, is actively farming the 
 32.1   agricultural property, either on the person's own behalf as an 
 32.2   individual or on behalf of a partnership operating a family 
 32.3   farm, family farm corporation, joint family farm venture, or 
 32.4   limited liability company of which the person is a partner, 
 32.5   shareholder, or member; 
 32.6      (2) both the owner of the agricultural property is a 
 32.7   Minnesota resident, and if the owner's son or daughter person 
 32.8   who is actively farming the agricultural property under clause 
 32.9   (1), that person must also be a are Minnesota 
 32.10  resident residents; 
 32.11     (3) neither the owner nor the spouse of the owner claims 
 32.12  another agricultural homestead in Minnesota; and 
 32.13     (4) neither the owner does not live nor the person actively 
 32.14  farming the property lives farther than four townships or 
 32.15  cities, or a combination of four townships or cities, from the 
 32.16  agricultural property, and except that if the owner's son or 
 32.17  daughter is actively farming the agricultural property under 
 32.18  clause (1), that person must also live within the owner or the 
 32.19  owner's spouse is required to live in employer-provided housing, 
 32.20  the owner or owner's spouse, whichever is actively farming the 
 32.21  agricultural property, may live more than four townships or 
 32.22  cities, or combination of four townships or cities from the 
 32.23  agricultural property. 
 32.24     The relationship under this paragraph may be either by 
 32.25  blood or marriage. 
 32.26     (ii) Real property held by a trustee under a trust is 
 32.27  eligible for agricultural homestead classification under this 
 32.28  paragraph if the qualifications in clause (i) are met, except 
 32.29  that "owner" means the grantor of the trust. 
 32.30     (ii) (iii) Property containing the residence of an owner 
 32.31  who owns qualified property under clause (i) shall be classified 
 32.32  as part of the owner's agricultural homestead, if that property 
 32.33  is also used for noncommercial storage or drying of agricultural 
 32.34  crops. 
 32.35     (c) Except as provided in paragraph (e), Noncontiguous land 
 32.36  shall be included as part of a homestead under section 273.13, 
 33.1   subdivision 23, paragraph (a), only if the homestead is 
 33.2   classified as class 2a and the detached land is located in the 
 33.3   same township or city, or not farther than four townships or 
 33.4   cities or combination thereof from the homestead.  Any taxpayer 
 33.5   of these noncontiguous lands must notify the county assessor 
 33.6   that the noncontiguous land is part of the taxpayer's homestead, 
 33.7   and, if the homestead is located in another county, the taxpayer 
 33.8   must also notify the assessor of the other county. 
 33.9      (d) Agricultural land used for purposes of a homestead and 
 33.10  actively farmed by a person holding a vested remainder interest 
 33.11  in it must be classified as a homestead under section 273.13, 
 33.12  subdivision 23, paragraph (a).  If agricultural land is 
 33.13  classified class 2a, any other dwellings on the land used for 
 33.14  purposes of a homestead by persons holding vested remainder 
 33.15  interests who are actively engaged in farming the property, and 
 33.16  up to one acre of the land surrounding each homestead and 
 33.17  reasonably necessary for the use of the dwelling as a home, must 
 33.18  also be assessed class 2a. 
 33.19     (e) Agricultural land and buildings that were class 2a 
 33.20  homestead property under section 273.13, subdivision 23, 
 33.21  paragraph (a), for the 1997 assessment shall remain classified 
 33.22  as agricultural homesteads for subsequent assessments if:  
 33.23     (1) the property owner abandoned the homestead dwelling 
 33.24  located on the agricultural homestead as a result of the April 
 33.25  1997 floods; 
 33.26     (2) the property is located in the county of Polk, Clay, 
 33.27  Kittson, Marshall, Norman, or Wilkin; 
 33.28     (3) the agricultural land and buildings remain under the 
 33.29  same ownership for the current assessment year as existed for 
 33.30  the 1997 assessment year and continue to be used for 
 33.31  agricultural purposes; 
 33.32     (4) the dwelling occupied by the owner is located in 
 33.33  Minnesota and is within 30 miles of one of the parcels of 
 33.34  agricultural land that is owned by the taxpayer; and 
 33.35     (5) the owner notifies the county assessor that the 
 33.36  relocation was due to the 1997 floods, and the owner furnishes 
 34.1   the assessor any information deemed necessary by the assessor in 
 34.2   verifying the change in dwelling.  Further notifications to the 
 34.3   assessor are not required if the property continues to meet all 
 34.4   the requirements in this paragraph and any dwellings on the 
 34.5   agricultural land remain uninhabited. 
 34.6      (f) Agricultural land and buildings that were class 2a 
 34.7   homestead property under section 273.13, subdivision 23, 
 34.8   paragraph (a), for the 1998 assessment shall remain classified 
 34.9   agricultural homesteads for subsequent assessments if: 
 34.10     (1) the property owner abandoned the homestead dwelling 
 34.11  located on the agricultural homestead as a result of damage 
 34.12  caused by a March 29, 1998, tornado; 
 34.13     (2) the property is located in the county of Blue Earth, 
 34.14  Brown, Cottonwood, LeSueur, Nicollet, Nobles, or Rice; 
 34.15     (3) the agricultural land and buildings remain under the 
 34.16  same ownership for the current assessment year as existed for 
 34.17  the 1998 assessment year; 
 34.18     (4) the dwelling occupied by the owner is located in this 
 34.19  state and is within 50 miles of one of the parcels of 
 34.20  agricultural land that is owned by the taxpayer; and 
 34.21     (5) the owner notifies the county assessor that the 
 34.22  relocation was due to a March 29, 1998, tornado, and the owner 
 34.23  furnishes the assessor any information deemed necessary by the 
 34.24  assessor in verifying the change in homestead dwelling.  For 
 34.25  taxes payable in 1999, the owner must notify the assessor by 
 34.26  December 1, 1998.  Further notifications to the assessor are not 
 34.27  required if the property continues to meet all the requirements 
 34.28  in this paragraph and any dwellings on the agricultural land 
 34.29  remain uninhabited. 
 34.30     (g) Agricultural property consisting of at least 40 acres 
 34.31  of a family farm corporation, joint family farm venture, limited 
 34.32  liability company, or partnership operating a family farm as 
 34.33  described under subdivision 8 shall be classified homestead, to 
 34.34  the same extent as other agricultural homestead property, if all 
 34.35  of the following criteria are met: 
 34.36     (1) the a shareholder, member, or partner of that entity is 
 35.1   actively farming the agricultural property; 
 35.2      (2) the that shareholder, member, or partner of who is 
 35.3   actively farming the agricultural property is a Minnesota 
 35.4   resident; 
 35.5      (3) neither the that shareholder, member, or partner, nor 
 35.6   the spouse of the that shareholder, member, or partner claims 
 35.7   another agricultural homestead in Minnesota; and 
 35.8      (4) the that shareholder, member, or partner does not live 
 35.9   farther than four townships or cities, or a combination of four 
 35.10  townships or cities, from the agricultural property. 
 35.11     Homestead treatment applies under this paragraph for 
 35.12  property leased to a family farm corporation, joint farm 
 35.13  venture, limited liability company, or partnership operating a 
 35.14  family farm if legal title to the property is in the name of an 
 35.15  individual who is a member, shareholder, or partner in the 
 35.16  entity. 
 35.17     <b>[EFFECTIVE DATE.]</b> This section is effective for the 2001 
 35.18  assessment, taxes payable in 2002, and thereafter. 
 35.19     Sec. 21.  Minnesota Statutes 2000, section 273.13, 
 35.20  subdivision 23, is amended to read: 
 35.21     Subd. 23.  [CLASS 2.] (a) Class 2a property is agricultural 
 35.22  land including any improvements that is homesteaded.  The market 
 35.23  value of the house and garage and immediately surrounding one 
 35.24  acre of land has the same class rates as class 1a property under 
 35.25  subdivision 22.  The value of the remaining land including 
 35.26  improvements up to $115,000 has a net class rate of 0.35 percent 
 35.27  of market value.  The value of class 2a property over $115,000 
 35.28  of market value up to and including $600,000 market value has a 
 35.29  net class rate of 0.8 percent of market value.  The remaining 
 35.30  property over $600,000 market value has a class rate of 1.20 
 35.31  percent of market value. 
 35.32     (b) Class 2b property is (1) real estate, rural in 
 35.33  character and used exclusively for growing trees for timber, 
 35.34  lumber, and wood and wood products; (2) real estate that is not 
 35.35  improved with a structure and is used exclusively for growing 
 35.36  trees for timber, lumber, and wood and wood products, if the 
 36.1   owner has participated or is participating in a cost-sharing 
 36.2   program for afforestation, reforestation, or timber stand 
 36.3   improvement on that particular property, administered or 
 36.4   coordinated by the commissioner of natural resources; (3) real 
 36.5   estate that is nonhomestead agricultural land; or (4) a landing 
 36.6   area or public access area of a privately owned public use 
 36.7   airport.  Class 2b property has a net class rate of 1.20 percent 
 36.8   of market value. 
 36.9      (c) Agricultural land as used in this section means 
 36.10  contiguous acreage of ten acres or more, used during the 
 36.11  preceding year for agricultural purposes.  "Agricultural 
 36.12  purposes" as used in this section means the raising or 
 36.13  cultivation of agricultural products or enrollment in the 
 36.14  Reinvest in Minnesota program under sections 103F.501 to 
 36.15  103F.535 or the federal Conservation Reserve Program as 
 36.16  contained in Public Law Number 99-198.  Contiguous acreage on 
 36.17  the same parcel, or contiguous acreage on an immediately 
 36.18  adjacent parcel under the same ownership, may also qualify as 
 36.19  agricultural land, but only if it is pasture, timber, waste, 
 36.20  unusable wild land, or land included in state or federal farm 
 36.21  programs.  Agricultural classification for property shall be 
 36.22  determined excluding the house, garage, and immediately 
 36.23  surrounding one acre of land, and shall not be based upon the 
 36.24  market value of any residential structures on the parcel or 
 36.25  contiguous parcels under the same ownership. 
 36.26     (d) Real estate, excluding the house, garage, and 
 36.27  immediately surrounding one acre of land, of less than ten acres 
 36.28  which is exclusively and intensively used for raising or 
 36.29  cultivating agricultural products, shall be considered as 
 36.30  agricultural land.  
 36.31     Land shall be classified as agricultural even if all or a 
 36.32  portion of the agricultural use of that property is the leasing 
 36.33  to, or use by another person for agricultural purposes. 
 36.34     Classification under this subdivision is not determinative 
 36.35  for qualifying under section 273.111. 
 36.36     The property classification under this section supersedes, 
 37.1   for property tax purposes only, any locally administered 
 37.2   agricultural policies or land use restrictions that define 
 37.3   minimum or maximum farm acreage. 
 37.4      (e) The term "agricultural products" as used in this 
 37.5   subdivision includes production for sale of:  
 37.6      (1) livestock, dairy animals, dairy products, poultry and 
 37.7   poultry products, fur-bearing animals, horticultural and nursery 
 37.8   stock described in sections 18.44 to 18.61, fruit of all kinds, 
 37.9   vegetables, forage, grains, bees, and apiary products by the 
 37.10  owner; 
 37.11     (2) fish bred for sale and consumption if the fish breeding 
 37.12  occurs on land zoned for agricultural use; 
 37.13     (3) the commercial boarding of horses if the boarding is 
 37.14  done in conjunction with raising or cultivating agricultural 
 37.15  products as defined in clause (1); 
 37.16     (4) property which is owned and operated by nonprofit 
 37.17  organizations used for equestrian activities, excluding racing; 
 37.18     (5) game birds and waterfowl bred and raised for use on a 
 37.19  shooting preserve licensed under section 97A.115; 
 37.20     (6) insects primarily bred to be used as food for 
 37.21  animals; and 
 37.22     (7) trees, grown for sale as a crop, and not sold for 
 37.23  timber, lumber, wood, or wood products; and 
 37.24     (8) maple syrup taken from trees grown by a person licensed 
 37.25  by the Minnesota department of agriculture under chapter 28A as 
 37.26  a food processor. 
 37.27     (f) If a parcel used for agricultural purposes is also used 
 37.28  for commercial or industrial purposes, including but not limited 
 37.29  to:  
 37.30     (1) wholesale and retail sales; 
 37.31     (2) processing of raw agricultural products or other goods; 
 37.32     (3) warehousing or storage of processed goods; and 
 37.33     (4) office facilities for the support of the activities 
 37.34  enumerated in clauses (1), (2), and (3), 
 37.35  the assessor shall classify the part of the parcel used for 
 37.36  agricultural purposes as class 1b, 2a, or 2b, whichever is 
 38.1   appropriate, and the remainder in the class appropriate to its 
 38.2   use.  The grading, sorting, and packaging of raw agricultural 
 38.3   products for first sale is considered an agricultural purpose.  
 38.4   A greenhouse or other building where horticultural or nursery 
 38.5   products are grown that is also used for the conduct of retail 
 38.6   sales must be classified as agricultural if it is primarily used 
 38.7   for the growing of horticultural or nursery products from seed, 
 38.8   cuttings, or roots and occasionally as a showroom for the retail 
 38.9   sale of those products.  Use of a greenhouse or building only 
 38.10  for the display of already grown horticultural or nursery 
 38.11  products does not qualify as an agricultural purpose.  
 38.12     The assessor shall determine and list separately on the 
 38.13  records the market value of the homestead dwelling and the one 
 38.14  acre of land on which that dwelling is located.  If any farm 
 38.15  buildings or structures are located on this homesteaded acre of 
 38.16  land, their market value shall not be included in this separate 
 38.17  determination.  
 38.18     (g) To qualify for classification under paragraph (b), 
 38.19  clause (4), a privately owned public use airport must be 
 38.20  licensed as a public airport under section 360.018.  For 
 38.21  purposes of paragraph (b), clause (4), "landing area" means that 
 38.22  part of a privately owned public use airport properly cleared, 
 38.23  regularly maintained, and made available to the public for use 
 38.24  by aircraft and includes runways, taxiways, aprons, and sites 
 38.25  upon which are situated landing or navigational aids.  A landing 
 38.26  area also includes land underlying both the primary surface and 
 38.27  the approach surfaces that comply with all of the following:  
 38.28     (i) the land is properly cleared and regularly maintained 
 38.29  for the primary purposes of the landing, taking off, and taxiing 
 38.30  of aircraft; but that portion of the land that contains 
 38.31  facilities for servicing, repair, or maintenance of aircraft is 
 38.32  not included as a landing area; 
 38.33     (ii) the land is part of the airport property; and 
 38.34     (iii) the land is not used for commercial or residential 
 38.35  purposes. 
 38.36  The land contained in a landing area under paragraph (b), clause 
 39.1   (4), must be described and certified by the commissioner of 
 39.2   transportation.  The certification is effective until it is 
 39.3   modified, or until the airport or landing area no longer meets 
 39.4   the requirements of paragraph (b), clause (4).  For purposes of 
 39.5   paragraph (b), clause (4), "public access area" means property 
 39.6   used as an aircraft parking ramp, apron, or storage hangar, or 
 39.7   an arrival and departure building in connection with the airport.
 39.8      <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 39.9   levied in 2001, payable in 2002, and thereafter. 
 39.10     Sec. 22.  Minnesota Statutes 2000, section 275.065, 
 39.11  subdivision 3, is amended to read: 
 39.12     Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
 39.13  county auditor shall prepare and the county treasurer shall 
 39.14  deliver after November 10 and on or before November 24 each 
 39.15  year, by first class mail to each taxpayer at the address listed 
 39.16  on the county's current year's assessment roll, a notice of 
 39.17  proposed property taxes.  
 39.18     (b) The commissioner of revenue shall prescribe the form of 
 39.19  the notice. 
 39.20     (c) The notice must inform taxpayers that it contains the 
 39.21  amount of property taxes each taxing authority proposes to 
 39.22  collect for taxes payable the following year.  In the case of a 
 39.23  town, or in the case of the state determined portion of the 
 39.24  school district levy, the final tax amount will be its proposed 
 39.25  tax.  In the case of taxing authorities required to hold a 
 39.26  public meeting under subdivision 6, the notice must clearly 
 39.27  state that each taxing authority, including regional library 
 39.28  districts established under section 134.201, and including the 
 39.29  metropolitan taxing districts as defined in paragraph (i), but 
 39.30  excluding all other special taxing districts and towns, will 
 39.31  hold a public meeting to receive public testimony on the 
 39.32  proposed budget and proposed or final property tax levy, or, in 
 39.33  case of a school district, on the current budget and proposed 
 39.34  property tax levy.  It must clearly state the time and place of 
 39.35  each taxing authority's meeting, a telephone number for the 
 39.36  taxing authority that taxpayers may call if they have questions 
 40.1   related to the notice, and an address where comments will be 
 40.2   received by mail.  
 40.3      (d) The notice must state for each parcel: 
 40.4      (1) the market value of the property as determined under 
 40.5   section 273.11, and used for computing property taxes payable in 
 40.6   the following year and for taxes payable in the current year as 
 40.7   each appears in the records of the county assessor on November 1 
 40.8   of the current year; and, in the case of residential property, 
 40.9   whether the property is classified as homestead or 
 40.10  nonhomestead.  The notice must clearly inform taxpayers of the 
 40.11  years to which the market values apply and that the values are 
 40.12  final values; 
 40.13     (2) the items listed below, shown separately by county, 
 40.14  city or town, state determined school tax net of the education 
 40.15  homestead credit under section 273.1382, voter approved school 
 40.16  levy, other local school levy, and the sum of the special taxing 
 40.17  districts, and as a total of all taxing authorities:  
 40.18     (i) the actual tax for taxes payable in the current year; 
 40.19     (ii) the tax change due to spending factors, defined as the 
 40.20  proposed tax minus the constant spending tax amount; 
 40.21     (iii) the tax change due to other factors, defined as the 
 40.22  constant spending tax amount minus the actual current year tax; 
 40.23  and 
 40.24     (iv) the proposed tax amount. 
 40.25     In the case of a town or the state determined school tax, 
 40.26  the final tax shall also be its proposed tax unless the town 
 40.27  changes its levy at a special town meeting under section 
 40.28  365.52.  If a school district has certified under section 
 40.29  126C.17, subdivision 9, that a referendum will be held in the 
 40.30  school district at the November general election, the county 
 40.31  auditor must note next to the school district's proposed amount 
 40.32  that a referendum is pending and that, if approved by the 
 40.33  voters, the tax amount may be higher than shown on the notice.  
 40.34  In the case of the city of Minneapolis, the levy for the 
 40.35  Minneapolis library board and the levy for Minneapolis park and 
 40.36  recreation shall be listed separately from the remaining amount 
 41.1   of the city's levy.  In the case of a parcel where tax increment 
 41.2   or the fiscal disparities areawide tax under chapter 276A or 
 41.3   473F applies, the proposed tax levy on the captured value or the 
 41.4   proposed tax levy on the tax capacity subject to the areawide 
 41.5   tax must each be stated separately and not included in the sum 
 41.6   of the special taxing districts; and 
 41.7      (3) the increase or decrease between the total taxes 
 41.8   payable in the current year and the total proposed taxes, 
 41.9   expressed as a percentage. 
 41.10     For purposes of this section, the amount of the tax on 
 41.11  homesteads qualifying under the senior citizens' property tax 
 41.12  deferral program under chapter 290B is the total amount of 
 41.13  property tax before subtraction of the deferred property tax 
 41.14  amount. 
 41.15     (e) The notice must clearly state that the proposed or 
 41.16  final taxes do not include the following: 
 41.17     (1) special assessments; 
 41.18     (2) levies approved by the voters after the date the 
 41.19  proposed taxes are certified, including bond referenda, school 
 41.20  district levy referenda, and levy limit increase referenda; 
 41.21     (3) amounts necessary to pay cleanup or other costs due to 
 41.22  a natural disaster occurring after the date the proposed taxes 
 41.23  are certified; 
 41.24     (4) amounts necessary to pay tort judgments against the 
 41.25  taxing authority that become final after the date the proposed 
 41.26  taxes are certified; and 
 41.27     (5) the contamination tax imposed on properties which 
 41.28  received market value reductions for contamination. 
 41.29     (f) Except as provided in subdivision 7, failure of the 
 41.30  county auditor to prepare or the county treasurer to deliver the 
 41.31  notice as required in this section does not invalidate the 
 41.32  proposed or final tax levy or the taxes payable pursuant to the 
 41.33  tax levy. 
 41.34     (g) If the notice the taxpayer receives under this section 
 41.35  lists the property as nonhomestead, and satisfactory 
 41.36  documentation is provided to the county assessor by the 
 42.1   applicable deadline, and the property qualifies for the 
 42.2   homestead classification in that assessment year, the assessor 
 42.3   shall reclassify the property to homestead for taxes payable in 
 42.4   the following year. 
 42.5      (h) In the case of class 4 residential property used as a 
 42.6   residence for lease or rental periods of 30 days or more, the 
 42.7   taxpayer must either: 
 42.8      (1) mail or deliver a copy of the notice of proposed 
 42.9   property taxes to each tenant, renter, or lessee; or 
 42.10     (2) post a copy of the notice in a conspicuous place on the 
 42.11  premises of the property.  
 42.12     The notice must be mailed or posted by the taxpayer by 
 42.13  November 27 or within three days of receipt of the notice, 
 42.14  whichever is later.  A taxpayer may notify the county treasurer 
 42.15  of the address of the taxpayer, agent, caretaker, or manager of 
 42.16  the premises to which the notice must be mailed in order to 
 42.17  fulfill the requirements of this paragraph. 
 42.18     (i) For purposes of this subdivision, subdivisions 5a and 
 42.19  6, "metropolitan special taxing districts" means the following 
 42.20  taxing districts in the seven-county metropolitan area that levy 
 42.21  a property tax for any of the specified purposes listed below: 
 42.22     (1) metropolitan council under section 473.132, 473.167, 
 42.23  473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 
 42.24     (2) metropolitan airports commission under section 473.667, 
 42.25  473.671, or 473.672; and 
 42.26     (3) metropolitan mosquito control commission under section 
 42.27  473.711. 
 42.28     For purposes of this section, any levies made by the 
 42.29  regional rail authorities in the county of Anoka, Carver, 
 42.30  Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
 42.31  398A shall be included with the appropriate county's levy and 
 42.32  shall be discussed at that county's public hearing. 
 42.33     (j) If a statutory or home rule charter city or a town has 
 42.34  exercised the local levy option provided by section 473.388, 
 42.35  subdivision 7, it may include in the notice of its proposed 
 42.36  taxes the amount of its proposed taxes attributable to its 
 43.1   exercise of the option.  In the first year of the city or town's 
 43.2   exercise of this option, the statement shall include an estimate 
 43.3   of the reduction of the metropolitan council's tax on the parcel 
 43.4   due to exercise of that option.  The metropolitan council's levy 
 43.5   shall be adjusted accordingly. 
 43.6      <b>[EFFECTIVE DATE.]</b> This section is effective for notices of 
 43.7   proposed property taxes required in 2001 for taxes payable in 
 43.8   2002, and thereafter. 
 43.9      Sec. 23.  Minnesota Statutes 2000, section 275.065, 
 43.10  subdivision 5a, is amended to read: 
 43.11     Subd. 5a.  [PUBLIC ADVERTISEMENT.] (a) A city that has a 
 43.12  population of more than 2,500, county, a metropolitan special 
 43.13  taxing district as defined in subdivision 3, paragraph (i), a 
 43.14  regional library district established under section 134.201, or 
 43.15  school district shall advertise in a newspaper a notice of its 
 43.16  intent to adopt a budget and property tax levy or, in the case 
 43.17  of a school district, to review its current budget and proposed 
 43.18  property taxes payable in the following year, at a public 
 43.19  hearing, if a public hearing is required under subdivision 6.  
 43.20  The notice must be published not less than two business days nor 
 43.21  more than six business days before the hearing. 
 43.22     The advertisement must be at least one-eighth page in size 
 43.23  of a standard-size or a tabloid-size newspaper.  The 
 43.24  advertisement must not be placed in the part of the newspaper 
 43.25  where legal notices and classified advertisements appear.  The 
 43.26  advertisement must be published in an official newspaper of 
 43.27  general circulation in the taxing authority.  The newspaper 
 43.28  selected must be one of general interest and readership in the 
 43.29  community, and not one of limited subject matter.  The 
 43.30  advertisement must appear in a newspaper that is published at 
 43.31  least once per week.  
 43.32     For purposes of this section, the metropolitan special 
 43.33  taxing district's advertisement must only be published in the 
 43.34  Minneapolis Star and Tribune and the Saint Paul Pioneer Press. 
 43.35     In addition to other requirements, a county and a city 
 43.36  having a population of more than 2,500 must show in the public 
 44.1   advertisement required under this subdivision the current local 
 44.2   tax rate, the proposed local tax rate if no property tax levy 
 44.3   increase is adopted, and the proposed rate if the proposed levy 
 44.4   is adopted.  For purposes of this subdivision, "local tax rate" 
 44.5   means the city's or county's net tax capacity levy divided by 
 44.6   the city's or county's taxable net tax capacity.  
 44.7      (b) The advertisement for school districts, metropolitan 
 44.8   special taxing districts, and regional library districts must be 
 44.9   in the following form, except that the notice for a school 
 44.10  district may include references to the current budget in regard 
 44.11  to proposed property taxes.  
 44.12                             "NOTICE OF
 44.13                      PROPOSED PROPERTY TAXES
 44.14                   (School District/Metropolitan
 44.15                  Special Taxing District/Regional
 44.16                   Library District) of .........
 44.17  The governing body of ........ will soon hold budget hearings 
 44.18  and vote on the property taxes for (metropolitan special taxing 
 44.19  district/regional library district services that will be 
 44.20  provided in (year)/school district services that will be 
 44.21  provided in (year) and (year)). 
 44.22                     NOTICE OF PUBLIC HEARING:
 44.23  All concerned citizens are invited to attend a public hearing 
 44.24  and express their opinions on the proposed (school 
 44.25  district/metropolitan special taxing district/regional library 
 44.26  district) budget and property taxes, or in the case of a school 
 44.27  district, its current budget and proposed property taxes, 
 44.28  payable in the following year.  The hearing will be held on 
 44.29  (Month/Day/Year) at (Time) at (Location, Address)." 
 44.30     (c) The advertisement for cities and counties must be in 
 44.31  the following form. 
 44.32                        "NOTICE OF PROPOSED
 44.33                  TOTAL BUDGET AND PROPERTY TAXES
 44.34  The (city/county) governing body or board of commissioners will 
 44.35  hold a public hearing to discuss the budget and to vote on the 
 44.36  amount of property taxes to collect for services the 
 45.1   (city/county) will provide in (year). 
 45.2      
 45.3   SPENDING:  The total budget amounts below compare 
 45.4   (city's/county's) (year) total actual budget with the amount the 
 45.5   (city/county) proposes to spend in (year). 
 45.6      
 45.7   (Year) Total          Proposed (Year)         Change from 
 45.8   Actual Budget         Budget                  (Year)-(Year)
 45.9      
 45.10  $.......              $.......                ...%
 45.11     
 45.12  TAXES:  The property tax amounts below compare that portion of 
 45.13  the current budget levied in property taxes in (city/county) for 
 45.14  (year) with the property taxes the (city/county) proposes to 
 45.15  collect in (year). 
 45.16     
 45.17  (Year) Property       Proposed (Year)          Change from
 45.18  Taxes                 Property Taxes           (Year)-(Year)
 45.19     
 45.20  $.......              $.......                 ...% 
 45.21     
 45.22  LOCAL TAX RATE COMPARISON:  The current local tax rate, the 
 45.23  local tax rate if no tax levy increase is adopted, and the 
 45.24  proposed local tax rate if the proposed levy is adopted. 
 45.25     
 45.26  (Year)                (Year)                       (Year) 
 45.27  Tax Rate              Tax Rate if NO               Proposed 
 45.28                        Levy Increase                Tax Rate 
 45.30  .......               .......                      ....... 
 45.31     
 45.32                     ATTEND THE PUBLIC HEARING
 45.33  All (city/county) residents are invited to attend the public 
 45.34  hearing of the (city/county) to express your opinions on the 
 45.35  budget and the proposed amount of (year) property taxes.  The 
 45.36  hearing will be held on: 
 46.1                        (Month/Day/Year/Time)
 46.2                          (Location/Address)
 46.3   If the discussion of the budget cannot be completed, a time and 
 46.4   place for continuing the discussion will be announced at the 
 46.5   hearing.  You are also invited to send your written comments to: 
 46.6                            (City/County)
 46.7                         (Location/Address)"
 46.8      (d) For purposes of this subdivision, the budget amounts 
 46.9   listed on the advertisement mean: 
 46.10     (1) for cities, the total government fund expenditures, as 
 46.11  defined by the state auditor under section 471.6965, less any 
 46.12  expenditures for improvements or services that are specially 
 46.13  assessed or charged under chapter 429, 430, 435, or the 
 46.14  provisions of any other law or charter; and 
 46.15     (2) for counties, the total government fund expenditures, 
 46.16  as defined by the state auditor under section 375.169, less any 
 46.17  expenditures for direct payments to recipients or providers for 
 46.18  the human service aids listed below: 
 46.19     (i) Minnesota family investment program under chapters 256J 
 46.20  and 256K; 
 46.21     (ii) medical assistance under sections 256B.041, 
 46.22  subdivision 5, and 256B.19, subdivision 1; 
 46.23     (iii) general assistance medical care under section 
 46.24  256D.03, subdivision 6; 
 46.25     (iv) general assistance under section 256D.03, subdivision 
 46.26  2; 
 46.27     (v) emergency assistance under section 256J.48; 
 46.28     (vi) Minnesota supplemental aid under section 256D.36, 
 46.29  subdivision 1; 
 46.30     (vii) preadmission screening under section 256B.0911, and 
 46.31  alternative care grants under section 256B.0913; 
 46.32     (viii) general assistance medical care claims processing, 
 46.33  medical transportation and related costs under section 256D.03, 
 46.34  subdivision 4; 
 46.35     (ix) medical transportation and related costs under section 
 46.36  256B.0625, subdivisions 17 to 18a; 
 47.1      (x) group residential housing under section 256I.05, 
 47.2   subdivision 8, transferred from programs in clauses (iv) and 
 47.3   (vi); or 
 47.4      (xi) any successor programs to those listed in clauses (i) 
 47.5   to (x). 
 47.6      (e) A city with a population of over 500 but not more than 
 47.7   2,500 that is required to hold a public hearing under 
 47.8   subdivision 6 must advertise by posted notice as defined in 
 47.9   section 645.12, subdivision 1.  The advertisement must be posted 
 47.10  at the time provided in paragraph (a).  It must be in the form 
 47.11  required in paragraph (b). 
 47.12     (f) For purposes of this subdivision, the population of a 
 47.13  city is the most recent population as determined by the state 
 47.14  demographer under section 4A.02. 
 47.15     (g) The commissioner of revenue, subject to the approval of 
 47.16  the chairs of the house and senate tax committees, shall 
 47.17  prescribe the form and format of the advertisement 
 47.18  advertisements required under this subdivision. 
 47.19     <b>[EFFECTIVE DATE.]</b> This section is effective for public 
 47.20  advertisements required in 2001 for taxes payable in 2002, and 
 47.21  thereafter. 
 47.22     Sec. 24.  Minnesota Statutes 2000, section 275.065, 
 47.23  subdivision 6, is amended to read: 
 47.24     Subd. 6.  [PUBLIC HEARING; ADOPTION OF BUDGET AND LEVY.] 
 47.25  (a) For purposes of this section, the following terms shall have 
 47.26  the meanings given: 
 47.27     (1) "Initial hearing" means the first and primary hearing 
 47.28  held to discuss the taxing authority's proposed budget and 
 47.29  proposed property tax levy for taxes payable in the following 
 47.30  year, or, for school districts, the current budget and the 
 47.31  proposed property tax levy for taxes payable in the following 
 47.32  year. 
 47.33     (2) "Continuation hearing" means a hearing held to complete 
 47.34  the initial hearing, if the initial hearing is not completed on 
 47.35  its scheduled date. 
 47.36     (3) "Subsequent hearing" means the hearing held to adopt 
 48.1   the taxing authority's final property tax levy, and, in the case 
 48.2   of taxing authorities other than school districts, the final 
 48.3   budget, for taxes payable in the following year. 
 48.4      (b) Between November 29 and December 20, the governing 
 48.5   bodies of a city that has a population over 500, county, 
 48.6   metropolitan special taxing districts as defined in subdivision 
 48.7   3, paragraph (i), and regional library districts shall each hold 
 48.8   an initial public hearing to discuss and seek public comment on 
 48.9   its final budget and property tax levy for taxes payable in the 
 48.10  following year, and the governing body of the school district 
 48.11  shall hold an initial public hearing to review its current 
 48.12  budget and proposed property tax levy for taxes payable in the 
 48.13  following year.  The metropolitan special taxing districts shall 
 48.14  be required to hold only a single joint initial public hearing, 
 48.15  the location of which will be determined by the affected 
 48.16  metropolitan agencies.  A city, county, metropolitan special 
 48.17  taxing district as defined in subdivision 3, paragraph (i), 
 48.18  regional library district established under section 134.201, or 
 48.19  school district is not required to hold a public hearing under 
 48.20  this subdivision unless its proposed property tax levy for taxes 
 48.21  payable in the following year, as certified under subdivision 1, 
 48.22  has increased over its final property tax levy for taxes payable 
 48.23  in the current year by a percentage that is greater than the 
 48.24  percentage increase in the implicit price deflator for 
 48.25  government consumption expenditures and gross investment for 
 48.26  state and local governments prepared by the Bureau of Economic 
 48.27  Analysts of the United States Department of Commerce for the 
 48.28  12-month period ending March 31 of the current year. 
 48.29     (c) The initial hearing must be held after 5:00 p.m. if 
 48.30  scheduled on a day other than Saturday.  No initial hearing may 
 48.31  be held on a Sunday.  
 48.32     (d) At the initial hearing under this subdivision, the 
 48.33  percentage increase in property taxes proposed by the taxing 
 48.34  authority, if any, and the specific purposes for which property 
 48.35  tax revenues are being increased must be discussed.  During the 
 48.36  discussion, the governing body shall hear comments regarding a 
 49.1   proposed increase and explain the reasons for the proposed 
 49.2   increase.  The public shall be allowed to speak and to ask 
 49.3   questions.  At the public hearing, the school district must also 
 49.4   provide and discuss information on the distribution of its 
 49.5   revenues by revenue source, and the distribution of its spending 
 49.6   by program area.  
 49.7      (e) If the initial hearing is not completed on its 
 49.8   scheduled date, the taxing authority must announce, prior to 
 49.9   adjournment of the hearing, the date, time, and place for the 
 49.10  continuation of the hearing.  The continuation hearing must be 
 49.11  held at least five business days but no more than 14 business 
 49.12  days after the initial hearing.  A continuation hearing may not 
 49.13  be held later than December 20 except as provided in paragraphs 
 49.14  (f) and (g).  A continuation hearing must be held after 5:00 
 49.15  p.m. if scheduled on a day other than Saturday.  No continuation 
 49.16  hearing may be held on a Sunday. 
 49.17     (f) The governing body of a county shall hold its initial 
 49.18  hearing on the first Thursday in December each year, and may 
 49.19  hold additional initial hearings on other dates before December 
 49.20  20 if necessary for the convenience of county residents.  If the 
 49.21  county needs a continuation of its hearing, the continuation 
 49.22  hearing shall be held on the third Tuesday in December.  If the 
 49.23  third Tuesday in December falls on December 21, the county's 
 49.24  continuation hearing shall be held on Monday, December 20.  
 49.25     (g) The metropolitan special taxing districts shall hold a 
 49.26  joint initial public hearing on the first Wednesday of 
 49.27  December.  A continuation hearing, if necessary, shall be held 
 49.28  on the second Wednesday of December even if that second 
 49.29  Wednesday is after December 10. 
 49.30     (h) The county auditor shall provide for the coordination 
 49.31  of initial and continuation hearing dates for all school 
 49.32  districts and cities within the county to prevent conflicts 
 49.33  under clauses (i) and (j). 
 49.34     (i) By August 10, each school board and the board of the 
 49.35  regional library district shall certify to the county auditors 
 49.36  of the counties in which the school district or regional library 
 50.1   district is located the dates on which it elects to hold its 
 50.2   initial hearing and any continuation hearing.  If a school board 
 50.3   or regional library district does not certify these dates by 
 50.4   August 10, the auditor will assign the initial and continuation 
 50.5   hearing dates.  The dates elected or assigned must not conflict 
 50.6   with the initial and continuation hearing dates of the county or 
 50.7   the metropolitan special taxing districts.  
 50.8      (j) By August 20, the county auditor shall notify the 
 50.9   clerks of the cities within the county of the dates on which 
 50.10  school districts and regional library districts have elected to 
 50.11  hold their initial and continuation hearings.  At the time a 
 50.12  city certifies its proposed levy under subdivision 1 it shall 
 50.13  certify the dates on which it elects to hold its initial hearing 
 50.14  and any continuation hearing.  Until September 15, the first and 
 50.15  second Mondays of December are reserved for the use of the 
 50.16  cities.  If a city does not certify its hearing dates by 
 50.17  September 15, the auditor shall assign the initial and 
 50.18  continuation hearing dates.  The dates elected or assigned for 
 50.19  the initial hearing must not conflict with the initial hearing 
 50.20  dates of the county, metropolitan special taxing districts, 
 50.21  regional library districts, or school districts within which the 
 50.22  city is located.  To the extent possible, the dates of the 
 50.23  city's continuation hearing should not conflict with the 
 50.24  continuation hearing dates of the county, metropolitan special 
 50.25  taxing districts, regional library districts, or school 
 50.26  districts within which the city is located.  This paragraph does 
 50.27  not apply to cities of 500 population or less. 
 50.28     (k) The county initial hearing date and the city, 
 50.29  metropolitan special taxing district, regional library district, 
 50.30  and school district initial hearing dates must be designated on 
 50.31  the notices required under subdivision 3.  The continuation 
 50.32  hearing dates need not be stated on the notices.  
 50.33     (l) At a subsequent hearing, each county, school district, 
 50.34  city over 500 population, and metropolitan special taxing 
 50.35  district may amend its proposed property tax levy and must adopt 
 50.36  a final property tax levy.  Each county, city over 500 
 51.1   population, and metropolitan special taxing district may also 
 51.2   amend its proposed budget and must adopt a final budget at the 
 51.3   subsequent hearing.  The final property tax levy must be adopted 
 51.4   prior to adopting the final budget.  A school district is not 
 51.5   required to adopt its final budget at the subsequent hearing.  
 51.6   The subsequent hearing of a taxing authority must be held on a 
 51.7   date subsequent to the date of the taxing authority's initial 
 51.8   public hearing.  If a continuation hearing is held, the 
 51.9   subsequent hearing must be held either immediately following the 
 51.10  continuation hearing or on a date subsequent to the continuation 
 51.11  hearing.  The subsequent hearing may be held at a regularly 
 51.12  scheduled board or council meeting or at a special meeting 
 51.13  scheduled for the purposes of the subsequent hearing.  The 
 51.14  subsequent hearing of a taxing authority does not have to be 
 51.15  coordinated by the county auditor to prevent a conflict with an 
 51.16  initial hearing, a continuation hearing, or a subsequent hearing 
 51.17  of any other taxing authority.  All subsequent hearings must be 
 51.18  held prior to five working days after December 20 of the levy 
 51.19  year.  The date, time, and place of the subsequent hearing must 
 51.20  be announced at the initial public hearing or at the 
 51.21  continuation hearing. 
 51.22     (m) The property tax levy certified under section 275.07 by 
 51.23  a city of any population, county, metropolitan special taxing 
 51.24  district, regional library district, or school district must not 
 51.25  exceed the proposed levy determined under subdivision 1, except 
 51.26  by an amount up to the sum of the following amounts: 
 51.27     (1) the amount of a school district levy whose voters 
 51.28  approved a referendum to increase taxes under section 123B.63, 
 51.29  subdivision 3, or 126C.17, subdivision 9, after the proposed 
 51.30  levy was certified; 
 51.31     (2) the amount of a city or county levy approved by the 
 51.32  voters after the proposed levy was certified; 
 51.33     (3) the amount of a levy to pay principal and interest on 
 51.34  bonds approved by the voters under section 475.58 after the 
 51.35  proposed levy was certified; 
 51.36     (4) the amount of a levy to pay costs due to a natural 
 52.1   disaster occurring after the proposed levy was certified, if 
 52.2   that amount is approved by the commissioner of revenue under 
 52.3   subdivision 6a; 
 52.4      (5) the amount of a levy to pay tort judgments against a 
 52.5   taxing authority that become final after the proposed levy was 
 52.6   certified, if the amount is approved by the commissioner of 
 52.7   revenue under subdivision 6a; 
 52.8      (6) the amount of an increase in levy limits certified to 
 52.9   the taxing authority by the commissioner of children, families, 
 52.10  and learning or the commissioner of revenue after the proposed 
 52.11  levy was certified; and 
 52.12     (7) the amount required under section 126C.55. 
 52.13     (n) This subdivision does not apply to towns and special 
 52.14  taxing districts other than regional library districts and 
 52.15  metropolitan special taxing districts. 
 52.16     (o) Notwithstanding the requirements of this section, the 
 52.17  employer is required to meet and negotiate over employee 
 52.18  compensation as provided for in chapter 179A.  
 52.19     <b>[EFFECTIVE DATE.]</b> This section is effective for hearings 
 52.20  required in 2001 for taxes payable in 2002 and thereafter. 
 52.21     Sec. 25.  Minnesota Statutes 2000, section 275.066, is 
 52.22  amended to read: 
 52.23     275.066 [SPECIAL TAXING DISTRICTS; DEFINITION.] 
 52.24     For the purposes of property taxation and property tax 
 52.25  state aids, the term "special taxing districts" includes the 
 52.26  following entities: 
 52.27     (1) watershed districts under chapter 103D; 
 52.28     (2) sanitary districts under sections 115.18 to 115.37; 
 52.29     (3) regional sanitary sewer districts under sections 115.61 
 52.30  to 115.67; 
 52.31     (4) regional public library districts under section 
 52.32  134.201; 
 52.33     (5) park districts under chapter 398; 
 52.34     (6) regional railroad authorities under chapter 398A; 
 52.35     (7) hospital districts under sections 447.31 to 447.38; 
 52.36     (8) St. Cloud metropolitan transit commission under 
 53.1   sections 458A.01 to 458A.15; 
 53.2      (9) Duluth transit authority under sections 458A.21 to 
 53.3   458A.37; 
 53.4      (10) regional development commissions under sections 
 53.5   462.381 to 462.398; 
 53.6      (11) housing and redevelopment authorities under sections 
 53.7   469.001 to 469.047; 
 53.8      (12) port authorities under sections 469.048 to 469.068; 
 53.9      (13) economic development authorities under sections 
 53.10  469.090 to 469.1081; 
 53.11     (14) metropolitan council under sections 473.123 to 
 53.12  473.549; 
 53.13     (15) metropolitan airports commission under sections 
 53.14  473.601 to 473.680; 
 53.15     (16) metropolitan mosquito control commission under 
 53.16  sections 473.701 to 473.716; 
 53.17     (17) Morrison county rural development financing authority 
 53.18  under Laws 1982, chapter 437, section 1; 
 53.19     (18) Croft Historical Park District under Laws 1984, 
 53.20  chapter 502, article 13, section 6; 
 53.21     (19) East Lake county medical clinic district under Laws 
 53.22  1989, chapter 211, sections 1 to 6; 
 53.23     (20) Floodwood area ambulance district under Laws 1993, 
 53.24  chapter 375, article 5, section 39; 
 53.25     (21) Middle Mississippi river watershed management 
 53.26  organization under sections 103B.211 and 103B.241; and 
 53.27     (22) emergency medical services special taxing districts 
 53.28  under section 144F.01; 
 53.29     (23) a county levying under the authority of section 
 53.30  103B.241, 103B.245, or 103B.251; and 
 53.31     (24) any other political subdivision of the state of 
 53.32  Minnesota, excluding counties, school districts, cities, and 
 53.33  towns, that has the power to adopt and certify a property tax 
 53.34  levy to the county auditor, as determined by the commissioner of 
 53.35  revenue. 
 53.36     <b>[EFFECTIVE DATE.]</b> Clause (22) of this section is effective 
 54.1   for taxes levied in 2001, payable in 2002, through taxes levied 
 54.2   in 2006, payable in 2007.  Clause (23) of this section is 
 54.3   effective for taxes levied in 2001, payable in 2002, and 
 54.4   thereafter. 
 54.5      Sec. 26.  Minnesota Statutes 2000, section 275.07, 
 54.6   subdivision 1, is amended to read: 
 54.7      Subdivision 1.  [CERTIFICATION OF LEVY.] (a) Except as 
 54.8   provided under paragraph (b), the taxes voted by cities, 
 54.9   counties, school districts, and special districts shall be 
 54.10  certified by the proper authorities to the county auditor on or 
 54.11  before five working days after December 20 in each year.  A town 
 54.12  must certify the levy adopted by the town board to the county 
 54.13  auditor by September 15 each year.  If the town board modifies 
 54.14  the levy at a special town meeting after September 15, the town 
 54.15  board must recertify its levy to the county auditor on or before 
 54.16  five working days after December 20.  The taxes certified shall 
 54.17  not be reduced by the county auditor by the aid received under 
 54.18  section 273.1398, subdivision 2, but shall be reduced by the 
 54.19  county auditor by the aid received under section 273.1398, 
 54.20  subdivision 3.  If a city, town, county, school district, or 
 54.21  special district fails to certify its levy by that date, its 
 54.22  levy shall be the amount levied by it for the preceding year. 
 54.23     (b)(i) The taxes voted by counties under sections 103B.241, 
 54.24  103B.245, and 103B.251 shall be separately certified by the 
 54.25  county to the county auditor on or before five working days 
 54.26  after December 20 in each year.  The taxes certified shall not 
 54.27  be reduced by the county auditor by the aid received under 
 54.28  section 273.1398, subdivisions 2 and 3.  If a county fails to 
 54.29  certify its levy by that date, its levy shall be the amount 
 54.30  levied by it for the preceding year.  
 54.31     (ii) For purposes of the proposed property tax notice under 
 54.32  section 275.065 and the property tax statement under section 
 54.33  276.04, for the first year in which the county implements the 
 54.34  provisions of this paragraph, the county auditor shall reduce 
 54.35  the county's levy for the preceding year to reflect any amount 
 54.36  levied for water management purposes under clause (i) included 
 55.1   in the county's levy. 
 55.2      <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 55.3   levied in 2001, payable in 2002, and thereafter. 
 55.4      Sec. 27.  Minnesota Statutes 2000, section 275.62, 
 55.5   subdivision 1, is amended to read: 
 55.6      Subdivision 1.  [REPORT ON TAXES LEVIED.] The commissioner 
 55.7   of revenue shall establish procedures for the annual reporting 
 55.8   of local government levies.  Each local governmental unit shall 
 55.9   submit a report to the commissioner by December 30 of the year 
 55.10  in which the tax is levied.  A local governmental unit is 
 55.11  required to file this report only for levy years in which it is 
 55.12  not subject to levy limits under sections 275.70 to 275.74.  The 
 55.13  report shall include, but is not limited to, information on the 
 55.14  amount of the tax levied by the governmental unit for the 
 55.15  following purposes: 
 55.16     (1) debt, which includes taxes levied for the purposes 
 55.17  defined in Minnesota Statutes 1991 Supplement, section 275.50, 
 55.18  subdivision 5, clauses (b), (c), (d), and (e); 
 55.19     (2) social services and related programs, which include 
 55.20  taxes levied for the purposes defined in Minnesota Statutes 1991 
 55.21  Supplement, section 275.50, subdivision 5, clauses (a), (j), and 
 55.22  (v); 
 55.23     (3) libraries, which include taxes levied for the purposes 
 55.24  defined in Minnesota Statutes 1991 Supplement, section 275.50, 
 55.25  subdivision 5, clause (n); 
 55.26     (4) for counties only, the amount of levy needed to fund 
 55.27  increased county costs associated with the welfare reform under 
 55.28  Laws 1997, chapter 85, including increased administration and 
 55.29  program costs of the income maintenance programs and also 
 55.30  related support services as they relate directly to the welfare 
 55.31  reform the amounts levied for each of the purposes listed in 
 55.32  section 275.70, subdivision 5; and 
 55.33     (5) (2) other levies, which include the taxes levied for 
 55.34  all purposes not included in clause (1), (2), (3), or (4). 
 55.35     Sec. 28.  Minnesota Statutes 2000, section 281.17, is 
 55.36  amended to read: 
 56.1      281.17 [PERIOD FOR REDEMPTION.] 
 56.2      Except for properties for which the period of redemption 
 56.3   has been limited under sections 281.173 and 281.174, the 
 56.4   following periods for redemption apply. 
 56.5      The period of redemption for all lands sold to the state at 
 56.6   a tax judgment sale shall be three years from the date of sale 
 56.7   to the state of Minnesota if the land is within an incorporated 
 56.8   area unless it is:  (a) nonagricultural homesteaded land as 
 56.9   defined in section 273.13, subdivision 22; (b) homesteaded 
 56.10  agricultural land as defined in section 273.13, subdivision 23, 
 56.11  paragraph (a); or (c) seasonal recreational land as defined in 
 56.12  section 273.13, subdivision 22, paragraph (c), or 25, paragraph 
 56.13  (c) (d), clause (5) (1), for which the period of redemption is 
 56.14  five years from the date of sale to the state of Minnesota. 
 56.15     The period of redemption for homesteaded lands as defined 
 56.16  in section 273.13, subdivision 22, located in a targeted 
 56.17  neighborhood as defined in Laws 1987, chapter 386, article 6, 
 56.18  section 4, and sold to the state at a tax judgment sale is three 
 56.19  years from the date of sale.  The period of redemption for all 
 56.20  lands located in a targeted neighborhood as defined in Laws 
 56.21  1987, chapter 386, article 6, section 4, except (1) homesteaded 
 56.22  lands as defined in section 273.13, subdivision 22, and (2) for 
 56.23  periods of redemption beginning after June 30, 1991, but before 
 56.24  July 1, 1996, lands located in the Loring Park targeted 
 56.25  neighborhood on which a notice of lis pendens has been served, 
 56.26  and sold to the state at a tax judgment sale is one year from 
 56.27  the date of sale. 
 56.28     The period of redemption for all real property constituting 
 56.29  a mixed municipal solid waste disposal facility that is a 
 56.30  qualified facility under section 115B.39, subdivision 1, is one 
 56.31  year from the date of the sale to the state of Minnesota. 
 56.32     The period of redemption for all other lands sold to the 
 56.33  state at a tax judgment sale shall be five years from the date 
 56.34  of sale, except that the period of redemption for nonhomesteaded 
 56.35  agricultural land as defined in section 273.13, subdivision 23, 
 56.36  paragraph (b), shall be two years from the date of sale if at 
 57.1   that time that property is owned by a person who owns one or 
 57.2   more parcels of property on which taxes are delinquent, and the 
 57.3   delinquent taxes are more than 25 percent of the prior year's 
 57.4   school district levy. 
 57.5      Sec. 29.  Minnesota Statutes 2000, section 282.01, 
 57.6   subdivision 1, is amended to read: 
 57.7      Subdivision 1.  [CLASSIFICATION AS CONSERVATION OR 
 57.8   NONCONSERVATION.] It is the general policy of this state to 
 57.9   encourage the best use of tax-forfeited lands, recognizing that 
 57.10  some lands in public ownership should be retained and managed 
 57.11  for public benefits while other lands should be returned to 
 57.12  private ownership.  Parcels of land becoming the property of the 
 57.13  state in trust under law declaring the forfeiture of lands to 
 57.14  the state for taxes must be classified by the county board of 
 57.15  the county in which the parcels lie as conservation or 
 57.16  nonconservation.  In making the classification the board shall 
 57.17  consider the present use of adjacent lands, the productivity of 
 57.18  the soil, the character of forest or other growth, accessibility 
 57.19  of lands to established roads, schools, and other public 
 57.20  services, their peculiar suitability or desirability for 
 57.21  particular uses and the suitability of the forest resources on 
 57.22  the land for multiple use, sustained yield management.  The 
 57.23  classification, furthermore, must encourage and foster a mode of 
 57.24  land utilization that will facilitate the economical and 
 57.25  adequate provision of transportation, roads, water supply, 
 57.26  drainage, sanitation, education, and recreation; facilitate 
 57.27  reduction of governmental expenditures; conserve and develop the 
 57.28  natural resources; and foster and develop agriculture and other 
 57.29  industries in the districts and places best suited to them. 
 57.30     In making the classification the county board may use 
 57.31  information made available by any office or department of the 
 57.32  federal, state, or local governments, or by any other person or 
 57.33  agency possessing pertinent information at the time the 
 57.34  classification is made.  The lands may be reclassified from time 
 57.35  to time as the county board considers necessary or desirable, 
 57.36  except for conservation lands held by the state free from any 
 58.1   trust in favor of any taxing district.  
 58.2      If the lands are located within the boundaries of an 
 58.3   organized town, with taxable valuation in excess of $20,000, or 
 58.4   incorporated municipality, the classification or 
 58.5   reclassification and sale must first be approved by the town 
 58.6   board of the town or the governing body of the municipality in 
 58.7   which the lands are located.  The town board of the town or the 
 58.8   governing body of the municipality is considered to have 
 58.9   approved the classification or reclassification and sale if the 
 58.10  county board is not notified of the disapproval of the 
 58.11  classification or reclassification and sale within 60 days of 
 58.12  the date the request for approval was transmitted to the town 
 58.13  board of the town or governing body of the municipality.  If the 
 58.14  town board or governing body desires to acquire any parcel lying 
 58.15  in the town or municipality by procedures authorized in this 
 58.16  section, it must file a written application with the county 
 58.17  board to withhold the parcel from public sale.  The application 
 58.18  must be filed within 60 days of the request for classification 
 58.19  or reclassification and sale.  The county board shall then 
 58.20  withhold the parcel from public sale for six months.  A 
 58.21  municipality or governmental subdivision shall pay maintenance 
 58.22  costs incurred by the county during the six-month period while 
 58.23  the property is withheld from public sale, provided the property 
 58.24  is not offered for public sale after the six-month period.  A 
 58.25  clerical error made by county officials does not serve to 
 58.26  eliminate the request of the town board or governing body if the 
 58.27  board or governing body has forwarded the application to the 
 58.28  county auditor.  If the town board or governing body of the 
 58.29  municipality fails to submit an application and a resolution of 
 58.30  the board or governing body to acquire the property within the 
 58.31  withholding period, the county may offer the property for sale 
 58.32  upon the expiration of the withholding period. 
 58.33     Sec. 30.  Minnesota Statutes 2000, section 282.01, 
 58.34  subdivision 1b, is amended to read: 
 58.35     Subd. 1b.  [CONVEYANCE; TARGETED NEIGHBORHOOD LANDS.] (a) 
 58.36  Notwithstanding subdivision 1a, in the case of tax-forfeited 
 59.1   lands located in a targeted neighborhood, as defined in section 
 59.2   469.201, subdivision 10, outside the metropolitan area, as 
 59.3   defined in and section 473.121, subdivision 2, the commissioner 
 59.4   of revenue may shall convey by deed in the name of the state any 
 59.5   tract of tax-forfeited land held in trust in favor of the taxing 
 59.6   districts, to a political subdivision that submits an 
 59.7   application to the commissioner of revenue and the 
 59.8   recommendation of the county board. 
 59.9      (b) Notwithstanding subdivision 1a, in the case of 
 59.10  tax-forfeited lands located in a targeted neighborhood, as 
 59.11  defined in section 469.201, subdivision 10, in a county in the 
 59.12  metropolitan area, as defined in section 473.121, subdivision 2, 
 59.13  the commissioner of revenue shall convey by deed in the name of 
 59.14  the state any tract of tax-forfeited land held in trust in favor 
 59.15  of the taxing districts, to a political subdivision that submits 
 59.16  an application to the commissioner of revenue and the county 
 59.17  board. 
 59.18     (c) The application under paragraph (a) or (b) must include 
 59.19  a statement of facts as to the use to be made of the tract, the 
 59.20  need therefor, and a resolution, adopted by the governing body 
 59.21  of the political subdivision, finding that the conveyance of a 
 59.22  tract of tax-forfeited land to the political subdivision is 
 59.23  necessary to provide for the redevelopment of land as productive 
 59.24  taxable property.  Deeds of conveyance issued under paragraph 
 59.25  (a) are not conditioned on continued use of the property for the 
 59.26  use stated in the application.  
 59.27     <b>[EFFECTIVE DATE.]</b> This section is effective for deeds 
 59.28  issued on or after July 1, 2001. 
 59.29     Sec. 31.  Minnesota Statutes 2000, section 282.01, 
 59.30  subdivision 1c, is amended to read: 
 59.31     Subd. 1c.  [DEED OF CONVEYANCE; FORM; APPROVALS.] The deed 
 59.32  of conveyance for property conveyed for a public use must be on 
 59.33  a form approved by the attorney general and must be conditioned 
 59.34  on continued use for the purpose stated in the application.  If, 
 59.35  however, the governing body of the governmental subdivision by 
 59.36  resolution determines that some other public use should be made 
 60.1   of the lands, and the change of use is approved by the county 
 60.2   board and an application for change of use is made to, and 
 60.3   approved by, the commissioner, the changed use may be made 
 60.4   without conveying the lands back to the state and securing a new 
 60.5   conveyance for the new public use. 
 60.6      <b>[EFFECTIVE DATE.]</b> This section is effective for deeds 
 60.7   issued on or after July 1, 2001.  
 60.8      Sec. 32.  Minnesota Statutes 2000, section 282.01, 
 60.9   subdivision 1d, is amended to read: 
 60.10     Subd. 1d.  [REVERTER FOR FAILURE TO USE; CONVEYANCE TO 
 60.11  STATE.] When If after three years from the date of the 
 60.12  conveyance a governmental subdivision to which tax-forfeited 
 60.13  land has been conveyed for a specified public use as provided in 
 60.14  this section fails to put the land to that use, or to some other 
 60.15  authorized public use as provided in this section, or abandons 
 60.16  that use, the governing body of the subdivision shall may, with 
 60.17  the approval of the county board, purchase the property for an 
 60.18  authorized public purpose at the present appraised value as 
 60.19  determined by the county board.  In that case, the commissioner 
 60.20  of revenue shall, upon proper written application approved by 
 60.21  the county board, issue an appropriate deed to the subdivisions 
 60.22  free of a use restriction and reverter.  The governing body may 
 60.23  also authorize the proper officers to convey the land, or the 
 60.24  part of the land not required for an authorized public use, to 
 60.25  the state of Minnesota.  The officers shall execute a deed of 
 60.26  conveyance immediately.  The conveyance is subject to the 
 60.27  approval of the commissioner and its form must be approved by 
 60.28  the attorney general.  A sale, lease, transfer, or other 
 60.29  conveyance of tax-forfeited lands by a housing and redevelopment 
 60.30  authority, a port authority, an economic development authority, 
 60.31  or a city as authorized by chapter 469 is not an abandonment of 
 60.32  use and the lands shall not be reconveyed to the state nor shall 
 60.33  they revert to the state.  A certificate made by a housing and 
 60.34  redevelopment authority, a port authority, an economic 
 60.35  development authority, or a city referring to a conveyance by it 
 60.36  and stating that the conveyance has been made as authorized by 
 61.1   chapter 469 may be filed with the county recorder or registrar 
 61.2   of titles, and the rights of reverter in favor of the state 
 61.3   provided by subdivision 1e will then terminate.  No vote of the 
 61.4   people is required for the conveyance. 
 61.5      <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2001.  
 61.6   For deeds existing on the effective date, the three-year 
 61.7   limitation begins on July 1, 2001, except no deed issued prior 
 61.8   to July 1, 2001, shall have a limitation of less than five years.
 61.9      Sec. 33.  Minnesota Statutes 2000, section 282.01, 
 61.10  subdivision 1e, is amended to read: 
 61.11     Subd. 1e.  [NOTICE AND DECLARATION OF REVERSION.] If the 
 61.12  tax-forfeited land is not either purchased or conveyed to the 
 61.13  state in accordance with subdivision 1d, the commissioner of 
 61.14  revenue shall by written instrument, in form approved by the 
 61.15  attorney general, declare the land to have reverted to the 
 61.16  state, and shall serve a notice of reversion, with a copy of the 
 61.17  declaration, by certified mail upon the clerk or recorder of the 
 61.18  governmental subdivision concerned.  No declaration of reversion 
 61.19  under this subdivision shall be made earlier than five years 
 61.20  from the date of conveyance for failure to put land to the use 
 61.21  specified or from the date of abandonment of that use if the 
 61.22  lands have been put to that use 60 days after the expiration of 
 61.23  the three-year period described in subdivision 1d.  The 
 61.24  commissioner shall file the original declaration in the 
 61.25  commissioner's office, with verified proof of service.  The 
 61.26  governmental subdivision may appeal to the district court of the 
 61.27  county in which the land lies by filing with the court 
 61.28  administrator a notice of appeal, specifying the grounds of 
 61.29  appeal and the description of the land involved, mailing a copy 
 61.30  of the notice of appeal by certified mail to the commissioner of 
 61.31  revenue, and filing a copy for record with the county recorder 
 61.32  or registrar of titles, all within 30 days after the mailing of 
 61.33  the notice of reversion.  The appeal shall be tried by the court 
 61.34  in like manner as a civil action.  If no appeal is taken as 
 61.35  provided in this subdivision, the declaration of reversion is 
 61.36  final.  The commissioner of revenue shall file for record with 
 62.1   the county recorder or registrar of titles, of the county within 
 62.2   which the land lies, a certified copy of the declaration of 
 62.3   reversion and proof of service. 
 62.4      <b>[EFFECTIVE DATE.]</b> This section is effective for deeds 
 62.5   issued on or after July 1, 2001. 
 62.6      Sec. 34.  Minnesota Statutes 2000, section 282.241, is 
 62.7   amended to read: 
 62.8      282.241 [REPURCHASE AFTER FORFEITURE.] 
 62.9      Subdivision 1.  [REPURCHASE REQUIREMENTS.] The owner at the 
 62.10  time of forfeiture, or the owner's heirs, devisees, or 
 62.11  representatives, or any person to whom the right to pay taxes 
 62.12  was given by statute, mortgage, or other agreement, may 
 62.13  repurchase any parcel of land claimed by the state to be 
 62.14  forfeited to the state for taxes unless before the time 
 62.15  repurchase is made the parcel is sold under installment 
 62.16  payments, or otherwise, by the state as provided by law, or is 
 62.17  under mineral prospecting permit or lease, or proceedings have 
 62.18  been commenced by the state or any of its political subdivisions 
 62.19  or by the United States to condemn the parcel of land.  The 
 62.20  parcel of land may be repurchased for the sum of all delinquent 
 62.21  taxes and assessments computed under section 282.251, together 
 62.22  with penalties, interest, and costs, that accrued or would have 
 62.23  accrued if the parcel of land had not forfeited to the state.  
 62.24  Except for property which was homesteaded on the date of 
 62.25  forfeiture, repurchase is permitted during one year only from 
 62.26  the date of forfeiture, and in any case only after the adoption 
 62.27  of a resolution by the board of county commissioners determining 
 62.28  that by repurchase undue hardship or injustice resulting from 
 62.29  the forfeiture will be corrected, or that permitting the 
 62.30  repurchase will promote the use of the lands that will best 
 62.31  serve the public interest.  If the county board has good cause 
 62.32  to believe that a repurchase installment payment plan for a 
 62.33  particular parcel is unnecessary and not in the public interest, 
 62.34  the county board may require as a condition of repurchase that 
 62.35  the entire repurchase price be paid at the time of repurchase.  
 62.36  A repurchase is subject to any easement, lease, or other 
 63.1   encumbrance granted by the state before the repurchase, and if 
 63.2   the land is located within a restricted area established by any 
 63.3   county under Laws 1939, chapter 340, the repurchase must not be 
 63.4   permitted unless the resolution approving the repurchase is 
 63.5   adopted by the unanimous vote of the board of county 
 63.6   commissioners. 
 63.7      The person seeking to repurchase under this section shall 
 63.8   pay all maintenance costs incurred by the county auditor during 
 63.9   the time the property was tax-forfeited.  
 63.10     Subd. 2.  [ALTERNATIVE COMPUTATION OF REPURCHASE AMOUNT.] A 
 63.11  county board may by resolution establish an alternative method 
 63.12  of computing the repurchase amount under this subdivision for 
 63.13  property homesteaded at the time of forfeiture that has been in 
 63.14  forfeited status for more than ten years.  Equivalent taxes, 
 63.15  penalties, interest, and costs for each year the property was in 
 63.16  forfeiture status must be computed using the simple average of 
 63.17  the assessor's estimated market value at forfeiture and the 
 63.18  assessor's current estimated market value multiplied by the 
 63.19  class rates under current law and applying the current tax, 
 63.20  penalty, and interest rates.  Those amounts, plus any unpaid 
 63.21  special assessments reinstated and included in the purchase 
 63.22  price under section 282.251, including the penalties and 
 63.23  interest that accrued or would have accrued on the special 
 63.24  assessments, computed under current rates, are the repurchase 
 63.25  price.  The county assessor shall determine the current market 
 63.26  value and classification of the property. 
 63.27     Sec. 35.  [383A.76] [TAX-FORFEITED LANDS.] 
 63.28     Subdivision 1.  [SALE; VALUATION.] The Ramsey county board 
 63.29  may sell tax-forfeited lands in the county to an organized or 
 63.30  incorporated governmental subdivision of the state for any 
 63.31  public purpose for which the subdivision is authorized to 
 63.32  acquire property.  In the case of tax-forfeited land in the 
 63.33  county which a governmental subdivision has requested for 
 63.34  housing purposes, the county board may sell that property to the 
 63.35  requesting subdivision for the specified housing use at a value, 
 63.36  which may be less than its appraised value, as determined by the 
 64.1   county board.  Factors that may be considered by the county 
 64.2   board in determining value for lands to be held for a permitted 
 64.3   public purpose or redeveloped under chapter 469 include the 
 64.4   projected gap financing and public subsidy needed for a 
 64.5   redevelopment project, expected increases in property taxes, 
 64.6   before and after redevelopment appraised values, the potential 
 64.7   use of the property for affordable housing, environmental 
 64.8   contamination and pollution, site preparation and infrastructure 
 64.9   costs, and any other relevant factors.  The commissioner of 
 64.10  revenue shall convey by deed in the name of the state a tract of 
 64.11  tax-forfeited land held in trust in favor of the taxing 
 64.12  districts to a governmental subdivision for an authorized public 
 64.13  use, if an application is submitted to the commissioner.  The 
 64.14  application must include a statement of facts as to the use to 
 64.15  be made of the tract, the need for it, and the recommendation of 
 64.16  the county board.  Property conveyed under this section for a 
 64.17  value that is less than its appraised value cannot be included 
 64.18  in a tax increment financing district.  To the extent the 
 64.19  provisions of chapter 282 are not inconsistent with this 
 64.20  section, the provisions of chapter 282 apply to the sale of tax 
 64.21  forfeited land in Ramsey county. 
 64.22     Subd. 2.  [USE OF LAND.] For lands located within Ramsey 
 64.23  county, the deed of conveyance of tax-forfeited land to an 
 64.24  organized or incorporated governmental subdivision of the state 
 64.25  for an authorized use must be on a form approved by the attorney 
 64.26  general and must be conditioned on continued use for the purpose 
 64.27  stated in the application.  If the governing body of the 
 64.28  governmental subdivision determines by resolution after public 
 64.29  hearing that some other public use should be made of the lands, 
 64.30  the changed use may be made upon filing with the county recorder 
 64.31  or registrar of titles a certified copy of the resolution and 
 64.32  without conveying the lands back to the state and securing a new 
 64.33  conveyance for the new public use.  Permitted public uses under 
 64.34  this section include street, storm water ponding, drainage, 
 64.35  parks, watershed, wetlands, library, fire and police stations, 
 64.36  utility easements, and public facilities.  
 65.1      Subd. 3.  [REVERTER OF LAND.] When a subdivision to which 
 65.2   tax-forfeited land has been conveyed for a housing purpose at a 
 65.3   value of less than the appraised value, fails to pass a 
 65.4   resolution designating a developer or approving a redevelopment 
 65.5   contract within three years of the date of conveyance, the 
 65.6   Ramsey county board may by resolution declare the land to have 
 65.7   reverted to the state, and shall serve a notice of reversion, 
 65.8   with a copy of the declaration, by certified mail to the 
 65.9   subdivision and shall reimburse the subdivision for the 
 65.10  consideration for the lands from the tax-forfeited sale fund.  
 65.11  The Ramsey county board shall file for record with the Ramsey 
 65.12  county recorder or registrar of titles a certified copy of the 
 65.13  declaration of reversion and proof of service.  A certificate 
 65.14  made by a subdivision referring to a conveyance made to it and 
 65.15  stating that it has passed a resolution designating a developer 
 65.16  or approving a redevelopment contract for a housing 
 65.17  redevelopment project may be filed with the Ramsey county 
 65.18  recorder or registrar of titles, and the right of reverter in 
 65.19  favor of the state under this section will then terminate. 
 65.20     Subd. 4.  [REPORT BY SUBDIVISION.] Each subdivision to 
 65.21  which tax-forfeited lands have been conveyed under this section 
 65.22  for a value of less than its appraised value must file a report 
 65.23  with the commissioner of revenue by September 1, 2004, and by 
 65.24  September 1 of each third year thereafter.  The report shall 
 65.25  contain a description of the lands conveyed to it, a status of 
 65.26  the development efforts for the lands, the intended or actual 
 65.27  uses being made of the lands, and the amount of property taxes 
 65.28  being paid on the lands.  The commissioner shall retain each 
 65.29  report for a minimum of ten years.  Failure of a subdivision to 
 65.30  file a report shall be cause for the commissioner to declare a 
 65.31  reversion of the parcel under section 282.01, subdivision 1e. 
 65.32     <b>[EFFECTIVE DATE.]</b> This section is effective only after its 
 65.33  approval by a majority of the governing body of Ramsey county 
 65.34  and upon compliance with the provisions of Minnesota Statutes, 
 65.35  section 645.021, subdivision 3. 
 65.36     Sec. 36.  Minnesota Statutes 2000, section 469.040, 
 66.1   subdivision 5, is amended to read: 
 66.2      Subd. 5.  [DESIGNATED HOUSING CORPORATION.] (a) To the 
 66.3   extent not exempt from taxation under section 272.01, 
 66.4   subdivision 1, property located within the exterior boundaries 
 66.5   of the White Earth an Indian reservation in the state that is 
 66.6   owned by the tribe's designated housing entity as defined in 
 66.7   United States Code, title 25, section 4103(21), and that is a 
 66.8   housing project or a housing development project, as defined in 
 66.9   section 469.002, subdivisions 13 and 15, is exempt from all real 
 66.10  and personal property taxes of the city, the county, the state, 
 66.11  or any political subdivision thereof, but the property. 
 66.12     (b) Property exempt from taxation under paragraph (a) is 
 66.13  subject to subdivision 3.  A copy of those portions of the 
 66.14  annual reports submitted on behalf of the housing entity to the 
 66.15  Secretary of the United States Department of Housing and Urban 
 66.16  Development for the project that contain information sufficient 
 66.17  to determine the amount due under subdivision 3 satisfies the 
 66.18  reporting requirements of subdivision 3 for the project. 
 66.19     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 66.20  levied in 2001, payable in 2002, and thereafter. 
 66.21     Sec. 37.  Minnesota Statutes 2000, section 469.202, 
 66.22  subdivision 2, is amended to read: 
 66.23     Subd. 2.  [ELIGIBILITY REQUIREMENTS FOR TARGETED 
 66.24  NEIGHBORHOODS.] An area within a city is eligible for 
 66.25  designation as a targeted neighborhood if the area meets two of 
 66.26  the following three criteria: 
 66.27     (a) The area had an unemployment rate that was twice the 
 66.28  unemployment rate for the Minneapolis and Saint Paul standard 
 66.29  metropolitan statistical area as determined by the 1980 most 
 66.30  recent federal decennial census. 
 66.31     (b) The median household income in the area was no more 
 66.32  than half the median household income for the Minneapolis and 
 66.33  Saint Paul standard metropolitan statistical area as determined 
 66.34  by the 1980 most recent federal decennial census. 
 66.35     (c) The area is characterized by residential dwelling units 
 66.36  in need of substantial rehabilitation.  An area qualifies under 
 67.1   this paragraph if 25 percent or more of the residential dwelling 
 67.2   units are in substandard condition as determined by the city, or 
 67.3   if 70 percent or more of the residential dwelling units in the 
 67.4   area were built before 1940 as determined by the 1980 most 
 67.5   recent federal decennial census. 
 67.6      <b>[EFFECTIVE DATE.]</b> This section is effective upon the 
 67.7   availability of the federal 2000 census data required to 
 67.8   determine eligibility requirements under this section. 
 67.9      Sec. 38.  Minnesota Statutes 2000, section 477A.12, is 
 67.10  amended to read: 
 67.11     477A.12 [ANNUAL APPROPRIATIONS; LANDS ELIGIBLE; 
 67.12  CERTIFICATION OF ACREAGE.] 
 67.13     Subdivision 1.  [TYPES OF LAND; PAYMENTS.] (a) As an offset 
 67.14  for expenses incurred by counties and towns in support of 
 67.15  natural resources lands, the following amounts are annually 
 67.16  appropriated to the commissioner of natural resources from the 
 67.17  general fund for transfer to the commissioner of revenue.  The 
 67.18  commissioner of revenue shall pay the transferred funds to 
 67.19  counties as required by sections 477A.11 to 477A.145.  The 
 67.20  amounts are: 
 67.21     (1) for acquired natural resources land, $3, as adjusted 
 67.22  for inflation under section 477A.145, multiplied by the total 
 67.23  number of acres of acquired natural resources land or, at the 
 67.24  county's option three-fourths of one percent of the appraised 
 67.25  value of all acquired natural resources land in the county, 
 67.26  whichever is greater; 
 67.27     (2) 75 cents, as adjusted for inflation under section 
 67.28  477A.145, multiplied by the number of acres of 
 67.29  county-administered other natural resources land; and 
 67.30     (3) 37.5 cents, as adjusted for inflation under section 
 67.31  477A.145, multiplied by the number of acres of 
 67.32  commissioner-administered other natural resources land located 
 67.33  in each county as of July 1 of each year prior to the payment 
 67.34  year. 
 67.35     (b) The amount determined under paragraph (a), clause (1), 
 67.36  is payable for land that is acquired from a private owner and 
 68.1   owned by the department of transportation for the purpose of 
 68.2   replacing wetland losses caused by transportation projects, but 
 68.3   only if the county contains more than 500 acres of such land at 
 68.4   the time the certification is made under subdivision 2. 
 68.5      Subd. 2.  [PROCEDURE.] Lands for which payments in lieu are 
 68.6   made pursuant to section 97A.061, subdivision 3, and Laws 1973, 
 68.7   chapter 567, shall not be eligible for payments under this 
 68.8   section.  Each county auditor shall certify to the department of 
 68.9   natural resources during July of each year prior to the payment 
 68.10  year the number of acres of county-administered other natural 
 68.11  resources land within the county.  The department of natural 
 68.12  resources may, in addition to the certification of acreage, 
 68.13  require descriptive lists of land so certified.  The 
 68.14  commissioner of natural resources shall determine and certify to 
 68.15  the commissioner of revenue by March 1 of the payment year:  
 68.16     (1) the number of acres and most recent appraised value of 
 68.17  acquired natural resources land within each county; 
 68.18     (2) the number of acres of commissioner-administered 
 68.19  natural resources land within each county; and 
 68.20     (3) the number of acres of county-administered other 
 68.21  natural resources land within each county, based on the reports 
 68.22  filed by each county auditor with the commissioner of natural 
 68.23  resources. 
 68.24     The commissioner of transportation shall determine and 
 68.25  certify to the commissioner of revenue by March 1 of the payment 
 68.26  year the number of acres of land and the appraised value of the 
 68.27  land described in subdivision 1, paragraph (b), but only if it 
 68.28  exceeds 500 acres. 
 68.29     The commissioner of revenue shall determine the 
 68.30  distributions provided for in this section using the number of 
 68.31  acres and appraised values certified by the commissioner of 
 68.32  natural resources and the commissioner of transportation by 
 68.33  March 1 of the payment year. 
 68.34     (c) Subd 3.  [DETERMINATION OF APPRAISED VALUE.] For the 
 68.35  purposes of this section, the appraised value of acquired 
 68.36  natural resources land is the purchase price for the first five 
 69.1   years after acquisition.  The appraised value of acquired 
 69.2   natural resources land received as a donation is the value 
 69.3   determined for the commissioner of natural resources by a 
 69.4   licensed appraiser, or the county assessor's estimated market 
 69.5   value if no appraisal is done.  The appraised value must be 
 69.6   determined by the county assessor every five years after the 
 69.7   land is acquired. 
 69.8      <b>[EFFECTIVE DATE.]</b> This section is effective for payments in 
 69.9   2002 and thereafter. 
 69.10     Sec. 39.  Minnesota Statutes 2000, section 477A.14, is 
 69.11  amended to read: 
 69.12     477A.14 [USE OF FUNDS.] 
 69.13     Except as provided in section 97A.061, subdivision 5, 40 
 69.14  percent of the total payment to the county shall be deposited in 
 69.15  the county general revenue fund to be used to provide property 
 69.16  tax levy reduction.  The remainder shall be distributed by the 
 69.17  county in the following priority:  
 69.18     (a) 37.5 cents, as adjusted for inflation under section 
 69.19  477A.145, for each acre of county-administered other natural 
 69.20  resources land shall be deposited in a resource development fund 
 69.21  to be created within the county treasury for use in resource 
 69.22  development, forest management, game and fish habitat 
 69.23  improvement, and recreational development and maintenance of 
 69.24  county-administered other natural resources land.  Any county 
 69.25  receiving less than $5,000 annually for the resource development 
 69.26  fund may elect to deposit that amount in the county general 
 69.27  revenue fund; 
 69.28     (b) From the funds remaining, within 30 days of receipt of 
 69.29  the payment to the county, the county treasurer shall pay each 
 69.30  organized township 30 cents, as adjusted for inflation under 
 69.31  section 477A.145, for each acre of acquired natural resources 
 69.32  land and each acre of land described in section 477A.12, 
 69.33  subdivision 1, paragraph (b), and 7.5 cents, as adjusted for 
 69.34  inflation under section 477A.145, for each acre of other natural 
 69.35  resources land located within its boundaries.  Payments for 
 69.36  natural resources lands not located in an organized township 
 70.1   shall be deposited in the county general revenue fund.  Payments 
 70.2   to counties and townships pursuant to this paragraph shall be 
 70.3   used to provide property tax levy reduction, except that of the 
 70.4   payments for natural resources lands not located in an organized 
 70.5   township, the county may allocate the amount determined to be 
 70.6   necessary for maintenance of roads in unorganized townships.  
 70.7   Provided that, if the total payment to the county pursuant to 
 70.8   section 477A.12 is not sufficient to fully fund the distribution 
 70.9   provided for in this clause, the amount available shall be 
 70.10  distributed to each township and the county general revenue fund 
 70.11  on a pro rata basis; and 
 70.12     (c) Any remaining funds shall be deposited in the county 
 70.13  general revenue fund.  Provided that, if the distribution to the 
 70.14  county general revenue fund exceeds $35,000, the excess shall be 
 70.15  used to provide property tax levy reduction. 
 70.16     <b>[EFFECTIVE DATE.]</b> This section is effective for payments in 
 70.17  2002 and thereafter. 
 70.18     Sec. 40.  Laws 1992, chapter 499, article 7, section 31, as 
 70.19  amended by Laws 1998, chapter 398, article 1, section 39, Laws 
 70.20  1999, chapter 241, article 1, section 54, and Laws 2000, chapter 
 70.21  489, article 2, section 28, is amended to read: 
 70.22     Sec. 31.  [REPEALER.] 
 70.23     Minnesota Statutes 1990, sections 124A.02, subdivision 24; 
 70.24  124A.23, subdivisions 2 and 3; 124A.26, subdivisions 2 and 3; 
 70.25  124A.27; 124A.28; and 124A.29, subdivision 2; and Minnesota 
 70.26  Statutes 1991 Supplement, sections 124A.02, subdivisions 16 and 
 70.27  23; 124A.03, subdivisions 1b, 1c, 1d, 1e, 1f, 1g, 1h, and 1i; 
 70.28  124A.04; 124A.22, subdivisions 2, 3, 4, 4a, 4b, 8, and 9; 
 70.29  124A.23, subdivisions 1, 4, and 5; 124A.24; 124A.26, subdivision 
 70.30  1; and 124A.29, subdivision 1, are repealed effective June 30, 
 70.31  2004; Laws 1991, chapter 265, article 7, section 35, is repealed.
 70.32     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2001. 
 70.33     Sec. 41.  [CONVEYANCE OF TAX-FORFEITED LAND; DAKOTA 
 70.34  COUNTY.] 
 70.35     (a) If special school district No. 6 conveys the land 
 70.36  described in paragraph (c) to the state according to Minnesota 
 71.1   Statutes, section 282.01, subdivision 1d, then, notwithstanding 
 71.2   any other provision of Minnesota Statutes, chapter 282, the 
 71.3   commissioner of revenue shall reconvey the land described in 
 71.4   paragraph (c) to special school district No. 6 for no 
 71.5   consideration.  
 71.6      (b) The conveyance must be in a form approved by the 
 71.7   attorney general.  Notwithstanding Minnesota Statutes, chapter 
 71.8   282, or other law to the contrary, special school district No. 6 
 71.9   may use or sell the land for other than a public use.  
 71.10  Notwithstanding Minnesota Statutes, chapter 282, or other law to 
 71.11  the contrary, the state shall not retain a reversionary interest 
 71.12  and shall convey the land free of the trust in favor of the 
 71.13  taxing district. 
 71.14     (c) The land to be conveyed is in the city of South St. 
 71.15  Paul, Dakota county, and is described as:  
 71.16     (1) Lots 4, 5, 6, and 7, Block 1, Lookout Park Addition; 
 71.17     (2) Lots 25 and 26, Block 1, Lookout Park Addition; 
 71.18     (3) Lots 11, 12, 13, 14, 15, 16, 17, 18, 19, and 20, Block 
 71.19  2, Lookout Park Addition; 
 71.20     (4) Lots 1, 2, 3, 4, and 5, Block 1, Bryants First Addition 
 71.21  to the city of South St. Paul; and 
 71.22     (5) Lot 21, Block 1, Bryants First Addition to the city of 
 71.23  South St. Paul, together with that part of the vacated alley and 
 71.24  vacated Stanley Place accruing thereto. 
 71.25     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 71.26  following final enactment. 
 71.27     Sec. 42.  [MINNEHAHA CREEK WATERSHED DISTRICT.] 
 71.28     Subdivision 1.  [LEVY AUTHORIZED.] Notwithstanding 
 71.29  Minnesota Statutes, section 103D.905, subdivision 3, the 
 71.30  Minnehaha Creek watershed district may annually levy an 
 71.31  additional amount up to $50,000 for enforcing rules and permits. 
 71.32     Subd. 2.  [EFFECTIVE DATE.] This section is effective, 
 71.33  without local approval, beginning with taxes levied in 2001, 
 71.34  payable in 2002. 
 71.35     Sec. 43.  [PRIVATE SALE OF TAX-FORFEITED LAND; ST. LOUIS 
 71.36  COUNTY.] 
 72.1      (a) Notwithstanding the public sale provisions of Minnesota 
 72.2   Statutes, chapter 282, or other law to the contrary, St. Louis 
 72.3   county may sell by private sale the tax-forfeited land described 
 72.4   in paragraph (c) to one or more of the owners at the time of 
 72.5   forfeiture. 
 72.6      (b) The conveyance must be in a form approved by the 
 72.7   attorney general for a consideration of taxes due on the 
 72.8   property and any penalties, interest, and costs. 
 72.9      (c) The land to be sold is located in St. Louis county and 
 72.10  is described as: 
 72.11     (1) Parcel 200-10-1720:  Sec. 11, Twp. 61, Rge 19 NW 1/4 of 
 72.12  NW 1/4; and 
 72.13     (2) Parcel 200-10-280:  Sec. 2, Twp. 61, Rge 19 SW 1/4 of 
 72.14  SW 1/4. 
 72.15     (d) The county has determined that the county's land 
 72.16  management interests would best be served if the lands were 
 72.17  returned to private ownership. 
 72.18     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 72.19  following final enactment. 
 72.20     Sec. 44.  [RED RIVER WATERSHED MANAGEMENT BOARD; PAYMENT IN 
 72.21  LIEU OF TAXES.] 
 72.22     (a) The Red River watershed management board may spend 
 72.23  money from its general fund to compensate counties and townships 
 72.24  for lost tax revenue from land that becomes tax exempt after it 
 72.25  is acquired by the board or a member watershed district for 
 72.26  flood damage reduction project.  The amount that may be paid 
 72.27  under this section to a county or township must not exceed the 
 72.28  tax that was payable to that taxing jurisdiction on the land in 
 72.29  the last taxes payable year before the land became exempt due to 
 72.30  the acquisition, not to exceed $4 per acre, multiplied by 20.  
 72.31  This total amount may be paid in one payment, or in equal annual 
 72.32  installments over a period that does not exceed 20 years.  A 
 72.33  member watershed district of the Red River management board may 
 72.34  spend money from its construction fund for the purposes 
 72.35  described in this section. 
 72.36     (b) For the purposes of this section, "Red River watershed 
 73.1   management board" refers to the board established by Laws 1976, 
 73.2   chapter 162, section 1, as amended by Laws 1982, chapter 474, 
 73.3   section 1, Laws 1983, chapter 338, section 1, Laws 1989 First 
 73.4   Special Session chapter 1, article 5, section 45, Laws 1991, 
 73.5   chapter 167, section 1, and Laws 1998, chapter 389, article 3, 
 73.6   section 29. 
 73.7      Sec. 45.  [FORGIVENESS OF PENALTY AND INTEREST.] 
 73.8      If the owner of record of property located in St. Louis 
 73.9   county that has parcel number 060-0030-03840 enters into an 
 73.10  agreement with the county by June 30, 2001, to make installment 
 73.11  payments over a ten-year period of the amount of taxes and 
 73.12  special assessments due on the property for the 1997 payable 
 73.13  year and the owner makes the payments required under the 
 73.14  agreement when due, the amount of penalties, interest, and 
 73.15  related fees due as of June 30, 2001, with respect to the 
 73.16  delinquent taxes will not be required to be paid. 
 73.17     Sec. 46.  [RENEWAL OF RULEMAKING AUTHORITY.] 
 73.18     Notwithstanding Minnesota Statutes, section 14.125, the 
 73.19  Minnesota housing finance agency may adopt administrative rules 
 73.20  under Minnesota Statutes, chapter 14, to carry out the 
 73.21  provisions of Minnesota Statutes, section 462A.071, and 
 73.22  determinations made under Minnesota Statutes, section 462A.071, 
 73.23  subdivision 11, paragraph (b), are valid until January 1, 2003. 
 73.24     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 73.25  following final enactment. 
 73.26     Sec. 47.  [REPEALER.] 
 73.27     (a) Minnesota Statutes 2000, section 275.078, is repealed 
 73.28  effective for taxes levied in 2001, payable in 2002, and 
 73.29  thereafter. 
 73.30     (b) Laws 1988, chapter 426, section 1; Laws 1988, chapter 
 73.31  702, section 16; Laws 1992, chapter 511, article 2, section 52, 
 73.32  as amended by Laws 1997, chapter 231, article 2, section 50, and 
 73.33  Laws 1998, chapter 389, article 3, section 32; Laws 1996, 
 73.34  chapter 471, article 8, section 45; Laws 1999, chapter 243, 
 73.35  article 6, section 14; Laws 1999, chapter 243, article 6, 
 73.36  section 15; and Laws 2000, chapter 490, article 6, section 17, 
 74.1   are repealed effective for taxes levied in 2001, payable in 2002 
 74.2   and thereafter. 
 74.3      (c) Minnesota Statutes 2000, sections 126C.30; 126C.31; 
 74.4   126C.32; 126C.33; 126C.34; 126C.35; and 126C.36, are repealed 
 74.5   effective July 1, 2001. 
 74.6                              ARTICLE 2
 74.7                         SALES AND USE TAXES 
 74.8      Section 1.  Minnesota Statutes 2000, section 289A.31, 
 74.9   subdivision 7, is amended to read: 
 74.10     Subd. 7.  [SALES AND USE TAX.] (a) The sales and use tax 
 74.11  required to be collected by the retailer under chapter 297A 
 74.12  constitutes a debt owed by the retailer to Minnesota, and the 
 74.13  sums collected must be held as a special fund in trust for the 
 74.14  state of Minnesota. 
 74.15     A retailer who does not maintain a place of business within 
 74.16  this state as defined by section 297A.21, subdivision 1, shall 
 74.17  not be indebted to Minnesota for amounts of tax that it was 
 74.18  required to collect but did not collect unless the retailer knew 
 74.19  or had been advised by the commissioner of its obligation to 
 74.20  collect the tax.  
 74.21     (b) The use tax required to be paid by a purchaser is a 
 74.22  debt owed by the purchaser to Minnesota. 
 74.23     (c) The tax imposed by chapter 297A, and interest and 
 74.24  penalties, is a personal debt of the individual required to file 
 74.25  a return from the time the liability arises, irrespective of 
 74.26  when the time for payment of that liability occurs.  The debt 
 74.27  is, in the case of the executor or administrator of the estate 
 74.28  of a decedent and in the case of a fiduciary, that of the 
 74.29  individual in an official or fiduciary capacity unless the 
 74.30  individual has voluntarily distributed the assets held in that 
 74.31  capacity without reserving sufficient assets to pay the tax, 
 74.32  interest, and penalties, in which case the individual is 
 74.33  personally liable for the deficiency. 
 74.34     (d) Liability for payment of sales and use taxes includes 
 74.35  any responsible person or entity described in the personal 
 74.36  liability provisions of section 270.101. 
 75.1      (e) Any amounts collected, even if erroneously or illegally 
 75.2   collected, from a purchaser under a representation that they are 
 75.3   taxes imposed under chapter 297A are state funds from the time 
 75.4   of collection and must be reported on a return filed with the 
 75.5   commissioner.  The amounts collected are not subject to refund 
 75.6   unless the seller submits written evidence to the commissioner 
 75.7   that the tax and any interest earned on the tax has been or will 
 75.8   be refunded or credited to the purchaser by the seller. 
 75.9      (f) The tax imposed under chapter 297A on sales of tickets 
 75.10  to the premises of or events sponsored by the state agricultural 
 75.11  society and conducted on the state fairgrounds during the period 
 75.12  of the annual state fair may be retained by the state 
 75.13  agricultural society if the funds are used and matched as 
 75.14  required under section 37.13, subdivision 2. 
 75.15     <b>[EFFECTIVE DATE.]</b> This section is effective for amounts 
 75.16  collected after June 30, 2001. 
 75.17     Sec. 2.  Minnesota Statutes 2000, section 289A.50, 
 75.18  subdivision 2, is amended to read: 
 75.19     Subd. 2.  [REFUND OF SALES TAX TO VENDORS; LIMITATION.] If 
 75.20  a vendor has collected from a purchaser and remitted to the 
 75.21  state a tax on a transaction that is not subject to the tax 
 75.22  imposed by chapter 297A, the tax is refundable to the vendor 
 75.23  only if and to the extent that it the tax and any interest 
 75.24  earned on the tax is credited to amounts due to the vendor by 
 75.25  the purchaser or returned to the purchaser by the vendor.  In 
 75.26  addition to the requirements of subdivision 1, a claim for 
 75.27  refund under this subdivision must state in writing that the tax 
 75.28  and interest earned on the tax has been or will be refunded or 
 75.29  credited to the purchaser by the vendor. 
 75.30     <b>[EFFECTIVE DATE.]</b> This section is effective for claims for 
 75.31  refunds after June 30, 2001. 
 75.32     Sec. 3.  [295.60] [SPECIAL FUR CLOTHING TAX.] 
 75.33     Subdivision 1.  [IMPOSITION.] If clothing made of fur is 
 75.34  not subject to the sales tax under chapter 297A, a tax is 
 75.35  imposed on each furrier equal to 6.5 percent of gross revenues 
 75.36  from retail sales in Minnesota of clothing made from fur. 
 76.1      Subd. 2.  [DEFINITIONS.] (a) For purposes of this section, 
 76.2   the following terms have the meanings given. 
 76.3      (b) "Commissioner" means the commissioner of revenue. 
 76.4      (c) "Furrier" means a retailer that sells clothing made of 
 76.5   fur. 
 76.6      (d) "Clothing made of fur" means articles of clothing made 
 76.7   of fur on the hide or pelt, and articles of clothing of which 
 76.8   such fur is the component material of chief value, but only if 
 76.9   such value is more than three times the value of the next most 
 76.10  valuable material.  
 76.11     (e) "Retail sale" has the meaning given in section 297A.61, 
 76.12  subdivision 4. 
 76.13     Subd. 3.  [PAYMENT.] (a) Each furrier shall make estimated 
 76.14  payments of the taxes for the calendar year in quarterly 
 76.15  installments to the commissioner by April 15, July 15, October 
 76.16  15, and January 15 of the following calendar year. 
 76.17     (b) Estimated tax payments are not required if: 
 76.18     (1) the tax for the current calendar year is less than 
 76.19  $500; or 
 76.20     (2) the tax for the previous calendar year is less than 
 76.21  $500, if the taxpayer had a tax liability and was doing business 
 76.22  the entire year. 
 76.23     (c) Underpayment of estimated installments bear interest at 
 76.24  the rate specified in section 270.75, from the due date of the 
 76.25  payment until paid or until the due date of the annual return, 
 76.26  whichever comes first.  An underpayment of an estimated 
 76.27  installment is the difference between the amount paid and the 
 76.28  lesser of (1) 90 percent of one-quarter of the tax for the 
 76.29  calendar year or (2) one-quarter of the total tax for the 
 76.30  previous calendar year if the taxpayer had a tax liability and 
 76.31  was doing business the entire year. 
 76.32     Subd. 4.  [ELECTRONIC FUNDS TRANSFER PAYMENTS.] A taxpayer 
 76.33  with an aggregate tax liability of $120,000 or more during a 
 76.34  fiscal year ending June 30 must remit all liabilities by 
 76.35  electronic means. 
 76.36     Subd. 5.  [ANNUAL RETURN.] The taxpayer must file an annual 
 77.1   return reconciling the estimated payments by March 15 of the 
 77.2   following calendar year. 
 77.3      Subd. 6.  [FORM OF RETURNS.] The estimated payments and 
 77.4   annual return must contain the information and be in the form 
 77.5   prescribed by the commissioner. 
 77.6      Subd. 7.  [APPLICATION OF OTHER CHAPTERS.] Unless 
 77.7   specifically provided otherwise by this section, the 
 77.8   enforcement, interest, and penalty provisions under chapter 294, 
 77.9   appeal provisions in sections 289A.43 and 289A.65, criminal 
 77.10  penalties in section 289A.63, refunds provisions in section 
 77.11  289A.50, and collection and rulemaking provisions under chapter 
 77.12  270, apply to a liability for the taxes imposed under this 
 77.13  section. 
 77.14     Subd. 8.  [INTEREST ON OVERPAYMENTS.] Interest must be paid 
 77.15  on an overpayment refunded or credited to the taxpayer from the 
 77.16  date of payment of the tax until the date the refund is paid or 
 77.17  credited.  For purposes of this subdivision, the date of payment 
 77.18  is the due date of the return or the date of actual payment of 
 77.19  the tax, whichever is later. 
 77.20     Subd. 9.  [DEPOSIT OF REVENUES.] The commissioner shall 
 77.21  deposit all revenues, including penalties and interest, derived 
 77.22  from the tax imposed by this section in the general fund. 
 77.23     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
 77.24  purchases made after December 31, 2001. 
 77.25     Sec. 4.  Minnesota Statutes 2000, section 297A.01, 
 77.26  subdivision 5, is amended to read: 
 77.27     Subd. 5.  "Storage" includes any keeping or retention in 
 77.28  Minnesota for any purpose except sale in the regular course of 
 77.29  business or subsequent use solely outside Minnesota of tangible 
 77.30  personal property. 
 77.31     <b>[EFFECTIVE DATE; INSTRUCTIONS TO REVISOR.]</b> (a) This section 
 77.32  is effective for storage, use, or consumption occurring after 
 77.33  June 30, 2001, but refunds, based on claims that meet the 
 77.34  requirements of all other applicable provisions of law, shall be 
 77.35  issued for and tax not imposed on tangible personal property 
 77.36  stored in Minnesota after June 30, 1997, and before July 1, 
 78.1   2001, if (1) the property was kept or retained in a public 
 78.2   warehouse or in a common carrier's or for-hire carrier's storage 
 78.3   facility, (2) the property was shipped or brought into Minnesota 
 78.4   by common carrier or for-hire carrier for the purpose of 
 78.5   subsequently being transported outside Minnesota, and (3) the 
 78.6   property is thereafter used solely outside Minnesota or in the 
 78.7   course of interstate commerce. 
 78.8      (b) In the next edition of Minnesota Statutes, the revisor 
 78.9   shall codify the amendment to this section in Minnesota 
 78.10  Statutes, section 297A.61, subdivision 5. 
 78.11     Sec. 5.  Minnesota Statutes 2000, section 297A.25, 
 78.12  subdivision 28, is amended to read: 
 78.13     Subd. 28.  [WASTE PROCESSING EQUIPMENT.] The gross receipts 
 78.14  from the sale of and storage, use, or consumption of equipment 
 78.15  used for processing solid or hazardous waste at a resource 
 78.16  recovery facility, as defined in section 115A.03, subdivision 
 78.17  28, are exempt, including pollution control equipment at a 
 78.18  resource recovery facility that burns refuse-derived fuel or 
 78.19  mixed municipal solid waste as its primary fuel.  An electric 
 78.20  generation facility that processes and utilizes waste tires as 
 78.21  its primary fuel is a resource recovery facility for the 
 78.22  purposes of this section.  
 78.23     <b>[EFFECTIVE DATE; INSTRUCTION TO REVISOR.]</b> This section is 
 78.24  effective for purchases and sales made after the date of final 
 78.25  enactment.  In the next edition of Minnesota Statutes, the 
 78.26  revisor of statutes shall codify the amendment to this section 
 78.27  in section 297A.68, subdivision 24. 
 78.28     Sec. 6.  Minnesota Statutes 2000, section 297A.61, 
 78.29  subdivision 2, is amended to read: 
 78.30     Subd. 2.  [PERSON.] (a) "Person" includes any individual, 
 78.31  and any or group or and any combination of individuals, 
 78.32  groups, or individuals and groups acting as a unit, and the 
 78.33  plural as well as the singular number.  
 78.34     (b) Person includes a firm, partnership, joint venture, 
 78.35  limited liability company, association, cooperative, social 
 78.36  club, fraternal organization, municipal or private corporation 
 79.1   whether or not organized for profit, estates, trusts, business 
 79.2   trusts estate, trust, business trust, receiver, trustee, 
 79.3   syndicate, the United States, and a state and its political 
 79.4   subdivisions.  
 79.5      (c) Person includes, but is not limited to, directors and 
 79.6   officers of corporations, governors and managers of a limited 
 79.7   liability company, or members of partnerships who, either 
 79.8   individually or jointly with others, have the control, 
 79.9   supervision, or responsibility of filing returns and making 
 79.10  payment of the amount of tax imposed by this chapter. 
 79.11     (d) Person also includes any agent or consignee of any 
 79.12  individual or organization enumerated listed in this subdivision.
 79.13     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
 79.14  purchases made after June 30, 2001. 
 79.15     Sec. 7.  Minnesota Statutes 2000, section 297A.61, 
 79.16  subdivision 3, is amended to read: 
 79.17     Subd. 3.  [SALE AND PURCHASE.] (a) "Sale" and "purchase" 
 79.18  include, but are not limited to, each of the transactions listed 
 79.19  in this subdivision. 
 79.20     (b) Sale and purchase include: 
 79.21     (1) any transfer of title or possession, or both, of 
 79.22  tangible personal property, whether absolutely or conditionally, 
 79.23  for a consideration in money or by exchange or barter; and 
 79.24     (2) the leasing of or the granting of a license to use or 
 79.25  consume, for a consideration in money or by exchange or barter, 
 79.26  tangible personal property, other than a manufactured home used 
 79.27  for residential purposes for a continuous period of 30 days or 
 79.28  more. 
 79.29     (c) Sale and purchase include the production, fabrication, 
 79.30  printing, or processing of tangible personal property for a 
 79.31  consideration for consumers who furnish either directly or 
 79.32  indirectly the materials used in the production, fabrication, 
 79.33  printing, or processing. 
 79.34     (d) Sale and purchase include the furnishing, preparing, or 
 79.35  serving for a consideration of food or drinks.  Notwithstanding 
 79.36  section 297A.67, subdivision 2, taxable food or drinks 
 80.1   include includes, but are is not limited to, the following: 
 80.2      (1) prepared food or drinks sold by the retailer for 
 80.3   immediate consumption on the retailer's premises.  Food and 
 80.4   drinks sold within a building or grounds that require an 
 80.5   admission charge for entrance are presumed to be sold for 
 80.6   consumption on the premises; 
 80.7      (2) food or drinks prepared by the retailer for immediate 
 80.8   consumption either on or off the retailer's premises.  For 
 80.9   purposes of this subdivision, "food or drinks prepared for 
 80.10  immediate consumption" means any food product upon which an act 
 80.11  of preparation including, but not limited to, cooking, mixing, 
 80.12  sandwich making, blending, heating, or pouring has been 
 80.13  performed by the retailer so the food product may be immediately 
 80.14  consumed by the purchaser; 
 80.15     (3) ice cream, ice milk, frozen yogurt products, or frozen 
 80.16  novelties sold in single or individual servings including, but 
 80.17  not limited to, cones, sundaes, and snow cones; 
 80.18     (4) (2) soft drinks and other beverages, including all 
 80.19  carbonated and noncarbonated beverages or drinks sold in liquid 
 80.20  form, but not including beverages or drinks which contain milk 
 80.21  or milk products, beverages or drinks containing 15 or more 
 80.22  percent fruit juice, and noncarbonated and noneffervescent 
 80.23  bottled water sold in individual containers of one-half gallon 
 80.24  or more in size; 
 80.25     (5) gum, (3) candy, and candy products; and 
 80.26     (6) ice; 
 80.27     (7) (4) all food sold from through vending machines;.  
 80.28     (8) all food for immediate consumption sold from concession 
 80.29  stands and vehicles; 
 80.30     (9) party trays; 
 80.31     (10) all meals and single servings of packaged snack food 
 80.32  sold in restaurants and bars; and 
 80.33     (11) bakery products that are: 
 80.34     (i) prepared by the retailer for consumption on the 
 80.35  retailer's premises; 
 80.36     (ii) sold at a place that charges admission; 
 81.1      (iii) sold from vending machines; or 
 81.2      (iv) sold in single or individual servings from concession 
 81.3   stands, vehicles, bars, and restaurants.  
 81.4      For purposes of this paragraph, "single or individual 
 81.5   servings" does not include products when sold in bulk containers 
 81.6   or bulk packaging.  
 81.7      For purposes of this paragraph, "premises" means the total 
 81.8   space and facilities, including buildings, grounds, and parking 
 81.9   lots that are made available or that are available for use by 
 81.10  the retailer or customer for the purpose of sale or consumption 
 81.11  of prepared food and drinks.  The premises of a caterer is the 
 81.12  place where the catered food or drinks are served. 
 81.13     (e) A sale and a purchase includes the furnishing for a 
 81.14  consideration of electricity, gas, water, or steam for use or 
 81.15  consumption within this state or local exchange telephone 
 81.16  service, intrastate toll service, and interstate toll service, 
 81.17  if that service originates from and is charged to a telephone 
 81.18  located in this state.  Telephone service includes (1) paging 
 81.19  services, and (2) private communication service, as defined in 
 81.20  United States Code, title 26, section 4252(d), except for 
 81.21  private communication service purchased by an agent acting on 
 81.22  behalf of the state lottery.  Telephone service does not include 
 81.23  services purchased with a prepaid telephone calling card.  The 
 81.24  furnishing for a consideration of access to telephone services 
 81.25  by a hotel to its guests is a sale.  The furnishing for a 
 81.26  consideration of items listed in this paragraph by a municipal 
 81.27  corporation is a sale. 
 81.28     (f) A sale and a purchase includes the transfer for a 
 81.29  consideration of computer software.  
 81.30     (g) A sale and a purchase includes the furnishing for a 
 81.31  consideration of taxable services as defined in subdivision 
 81.32  16. the following services: 
 81.33     (1) the privilege of admission to places of amusement, 
 81.34  recreational areas, or athletic events, and the making available 
 81.35  of amusement devices, tanning facilities, reducing salons, steam 
 81.36  baths, turkish baths, health clubs, and spas or athletic 
 82.1   facilities; 
 82.2      (2) lodging and related services by a hotel, rooming house, 
 82.3   resort, campground, motel, or trailer camp and the granting of 
 82.4   any similar license to use real property other than the renting 
 82.5   or leasing of it for a continuous period of 30 days or more; 
 82.6      (3) cable television services or similar television 
 82.7   services, including, but not limited to, charges for basic, 
 82.8   premium, pay-per-view, and any other similar service; 
 82.9      (4) parking services, whether on a contractual, hourly, or 
 82.10  other periodic basis, except for parking at a meter; 
 82.11     (5) the granting of membership in a club, association, or 
 82.12  other organization if: 
 82.13     (i) the club, association, or other organization makes 
 82.14  available for the use of its members sports and athletic 
 82.15  facilities, without regard to whether a separate charge is 
 82.16  assessed for use of the facilities; and 
 82.17     (ii) use of the sports and athletic facility is not made 
 82.18  available to the general public on the same basis as it is made 
 82.19  available to members.  
 82.20  Granting of membership means both one-time initiation fees and 
 82.21  periodic membership dues.  Sports and athletic facilities 
 82.22  include golf courses; tennis, racquetball, handball, and squash 
 82.23  courts; basketball and volleyball facilities; running tracks; 
 82.24  exercise equipment; swimming pools; and other similar athletic 
 82.25  or sports facilities; and 
 82.26     (6) services as provided in this clause: 
 82.27     (i) laundry and dry cleaning services including cleaning, 
 82.28  pressing, repairing, altering, and storing clothes, linen 
 82.29  services and supply, cleaning and blocking hats, and carpet, 
 82.30  drapery, upholstery, and industrial cleaning.  Laundry and dry 
 82.31  cleaning services do not include services provided by coin 
 82.32  operated facilities operated by the customer; 
 82.33     (ii) motor vehicle washing, waxing, and cleaning services, 
 82.34  including services provided by coin operated facilities operated 
 82.35  by the customer, and rustproofing, undercoating, and towing of 
 82.36  motor vehicles; 
 83.1      (iii) building and residential cleaning, maintenance, and 
 83.2   disinfecting and exterminating services; 
 83.3      (iv) detective, security, burglar, fire alarm, and armored 
 83.4   car services; but not including services performed within the 
 83.5   jurisdiction they serve by off-duty licensed peace officers as 
 83.6   defined in section 626.84, subdivision 1, or services provided 
 83.7   by a nonprofit organization for monitoring and electronic 
 83.8   surveillance of persons placed on in-home detention pursuant to 
 83.9   court order or under the direction of the Minnesota department 
 83.10  of corrections; 
 83.11     (v) pet grooming services; 
 83.12     (vi) lawn care, fertilizing, mowing, spraying and sprigging 
 83.13  services; garden planting and maintenance; tree, bush, and shrub 
 83.14  pruning, bracing, spraying, and surgery; indoor plant care; 
 83.15  tree, bush, shrub, and stump removal; and tree trimming for 
 83.16  public utility lines.  Services performed under a construction 
 83.17  contract for the installation of shrubbery, plants, sod, trees, 
 83.18  bushes, and similar items are not taxable; 
 83.19     (vii) massages, except when provided by a licensed health 
 83.20  care facility or professional or upon written referral from a 
 83.21  licensed health care facility or professional for treatment of 
 83.22  illness, injury, or disease; and 
 83.23     (viii) the furnishing of lodging, board, and care services 
 83.24  for animals in kennels and other similar arrangements, but 
 83.25  excluding veterinary and horse boarding services. 
 83.26     In applying the provisions of this chapter, the terms 
 83.27  "tangible personal property" and "sales at retail" include 
 83.28  taxable services and the provision of taxable services, unless 
 83.29  specifically provided otherwise.  Services performed by an 
 83.30  employee for an employer are not taxable.  Services performed by 
 83.31  a partnership or association for another partnership or 
 83.32  association are not taxable if one of the entities owns or 
 83.33  controls more than 80 percent of the voting power of the equity 
 83.34  interest in the other entity.  Services performed between 
 83.35  members of an affiliated group of corporations are not taxable.  
 83.36  For purposes of this section, "affiliated group of corporations" 
 84.1   includes those entities that would be classified as members of 
 84.2   an affiliated group under United States Code, title 26, section 
 84.3   1504, and that are eligible to file a consolidated tax return 
 84.4   for federal income tax purposes. 
 84.5      (h) A sale and a purchase includes the furnishing for a 
 84.6   consideration of tangible personal property or taxable services 
 84.7   by the United States or any of its agencies or 
 84.8   instrumentalities, or the state of Minnesota, its agencies, 
 84.9   instrumentalities, or political subdivisions. 
 84.10     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
 84.11  purchases made after June 30, 2001, except that paragraph (d) is 
 84.12  effective for sales and purchases occurring after December 31, 
 84.13  2001. 
 84.14     Sec. 8.  Minnesota Statutes 2000, section 297A.61, 
 84.15  subdivision 4, is amended to read: 
 84.16     Subd. 4.  [RETAIL SALE.] (a) A "retail sale" means a any 
 84.17  sale, lease, or rental for any purpose other than resale in the 
 84.18  regular course of business, sublease, or subrent.  
 84.19     (b) A sale of property used by the owner only by leasing it 
 84.20  to others or by holding it in an effort to lease it, and put to 
 84.21  no use by the owner other than resale after the lease or effort 
 84.22  to lease, is a sale of property for resale.  
 84.23     (c) A sale of master computer software that is purchased 
 84.24  and used to make copies for sale or lease is a sale of property 
 84.25  for resale.  
 84.26     (d) A sale of building materials, supplies, and equipment 
 84.27  to owners, contractors, subcontractors, or builders for the 
 84.28  erection of buildings or the alteration, repair, or improvement 
 84.29  of real property is a retail sale in whatever quantity sold, 
 84.30  whether the sale is for purposes of resale in the form of real 
 84.31  property or otherwise.  
 84.32     (e) A sale of carpeting, linoleum, or similar floor 
 84.33  covering to a person who provides for installation of the floor 
 84.34  covering is a retail sale and not a sale for resale since a sale 
 84.35  of floor covering which includes installation is a contract for 
 84.36  the improvement of real property. 
 85.1      (f) A sale of shrubbery, plants, sod, trees, and similar 
 85.2   items to a person who provides for installation of the items is 
 85.3   a retail sale and not a sale for resale since a sale of 
 85.4   shrubbery, plants, sod, trees, and similar items that includes 
 85.5   installation is a contract for the improvement of real property. 
 85.6      (g) A sale of tangible personal property that is awarded as 
 85.7   prizes is a retail sale and is not considered a sale of property 
 85.8   for resale. 
 85.9      (h) A sale of tangible personal property utilized or 
 85.10  employed in the furnishing or providing of services under 
 85.11  subdivision 16 3, paragraph (b) (g), clause (1), including, but 
 85.12  not limited to, property given as promotional items, is a retail 
 85.13  sale and is not considered a sale of property for resale. 
 85.14     (i) A sale of tangible personal property used in conducting 
 85.15  lawful gambling under chapter 349 or the state lottery under 
 85.16  chapter 349A, including, but not limited to, property given as 
 85.17  promotional items, is a retail sale and is not considered a sale 
 85.18  of property for resale. 
 85.19     (j) A sale of machines, equipment, or devices that are used 
 85.20  to furnish, provide, or dispense goods or services, including, 
 85.21  but not limited to, coin-operated devices, is a retail sale and 
 85.22  is not considered a sale of property for resale. 
 85.23     (k) In the case of a lease, a retail sale occurs when an 
 85.24  obligation to make a lease payment becomes due under the terms 
 85.25  of the agreement or the trade practices of the lessor. 
 85.26     (l) In the case of a conditional sales contract, a retail 
 85.27  sale occurs upon the transfer of title or possession of the 
 85.28  tangible personal property. 
 85.29     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
 85.30  purchases made after June 30, 2001, except that paragraph (a) is 
 85.31  effective January 1, 2002. 
 85.32     Sec. 9.  Minnesota Statutes 2000, section 297A.61, 
 85.33  subdivision 6, is amended to read: 
 85.34     Subd. 6.  [USE.] (a) "Use" includes the exercise of a right 
 85.35  or power incident to the ownership of any interest in tangible 
 85.36  personal property, or taxable services, purchased from a 
 86.1   retailer, other than the sale of that property in the regular 
 86.2   course of business.  
 86.3      (b) Use includes the consumption of printed materials in 
 86.4   the creation of nontaxable advertising that is distributed, 
 86.5   either directly or indirectly, within Minnesota. 
 86.6      <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
 86.7   purchases made after June 30, 2001. 
 86.8      Sec. 10.  Minnesota Statutes 2000, section 297A.61, 
 86.9   subdivision 7, is amended to read: 
 86.10     Subd. 7.  [SALES PRICE.] (a) "Sales price" means the total 
 86.11  consideration for a retail sale, valued in money, whether paid 
 86.12  in money or by barter or exchange. the measure subject to sales 
 86.13  tax, and means the total amount of consideration, including 
 86.14  cash, credit, property, and services, for which personal 
 86.15  property or services are sold, leased, or rented, valued in 
 86.16  money, whether received in money or otherwise, without any 
 86.17  deduction for the following: 
 86.18     (1) the seller's cost of the property sold; 
 86.19     (2) the cost of materials used, labor or service cost, 
 86.20  interest, losses, all costs of transportation to the seller, all 
 86.21  taxes imposed on the seller, and any other expenses of the 
 86.22  seller; 
 86.23     (3) charges by the seller for any services necessary to 
 86.24  complete the sale, other than delivery and installation charges; 
 86.25     (4) delivery charges; 
 86.26     (5) installation charges; and 
 86.27     (6) the value of exempt property given to the purchaser 
 86.28  when taxable and exempt personal property have been bundled 
 86.29  together and sold by the seller as a single product or piece of 
 86.30  merchandise. 
 86.31     (b) Sales price includes: 
 86.32     (1) the cost of the property sold, cost of materials used, 
 86.33  labor or service cost, interest, or discount allowed after the 
 86.34  sale is consummated; 
 86.35     (2) the cost of transportation incurred prior to the time 
 86.36  of sale; 
 87.1      (3) any amount for which credit is given by the seller to 
 87.2   the purchaser; 
 87.3      (4) charges for services that are part of a sale; or 
 87.4      (5) any other expense whatsoever. 
 87.5      (c) (b) Sales price does not include the following: 
 87.6      (1) an amount allowed as credit for tangible personal 
 87.7   property taken in trade for resale discounts, including cash, 
 87.8   terms, or coupons that are not reimbursed by a third party and 
 87.9   that are allowed by the seller and taken by a purchaser on a 
 87.10  sale; 
 87.11     (2) charges of up to 15 percent in lieu of tips if the 
 87.12  charges are separately stated interest, financing, and carrying 
 87.13  charges from credit extended on the sale of personal property or 
 87.14  services, if the amount is separately stated on the invoice, 
 87.15  bill of sale, or similar document given to the purchaser; and 
 87.16     (3) interest, financing, or carrying charges if the charges 
 87.17  are separately stated; any taxes legally imposed directly on the 
 87.18  consumer that are separately stated on the invoice, bill of 
 87.19  sale, or similar document given to the purchaser. 
 87.20     (4) charges for labor or services used in installing or 
 87.21  applying the property sold if the charges are separately stated; 
 87.22     (5) transportation charges if the transportation occurs 
 87.23  after the retail sale of the property if the charges are 
 87.24  separately stated; 
 87.25     (6) cash discounts allowed and taken on sales or the amount 
 87.26  refunded either in cash or in credit for property returned by 
 87.27  purchasers; 
 87.28     (7) the rental motor vehicle tax imposed under section 
 87.29  297A.64; or 
 87.30     (8) the amount of any tax imposed by the United States on 
 87.31  communications services under United States Code, title 26, 
 87.32  section 4251(a). 
 87.33     (d) Notwithstanding paragraph (c), "sales price," for 
 87.34  purposes of sales of ready-mixed concrete sold from a 
 87.35  ready-mixed concrete truck, includes any transportation, 
 87.36  delivery, or other service charges, and no deduction is allowed 
 88.1   for those charges, whether or not the charges are separately 
 88.2   stated.  
 88.3      <b>[EFFECTIVE DATE.]</b> This section is effective January 1, 2002.
 88.4      Sec. 11.  Minnesota Statutes 2000, section 297A.61, 
 88.5   subdivision 9, is amended to read: 
 88.6      Subd. 9.  [RETAILER AND SELLER.] "Retailer" and "seller" 
 88.7   means every any person engaged in making retail sales, leases, 
 88.8   or rentals of personal property or services. 
 88.9      <b>[EFFECTIVE DATE.]</b> This section is effective January 1, 2002.
 88.10     Sec. 12.  Minnesota Statutes 2000, section 297A.61, 
 88.11  subdivision 10, is amended to read: 
 88.12     Subd. 10.  [TANGIBLE PERSONAL PROPERTY.] (a) "Tangible 
 88.13  personal property" means corporeal personal property of any 
 88.14  kind, including property that is to become real property as a 
 88.15  result of incorporation, attachment, or installation following 
 88.16  its acquisition. 
 88.17     (b) Tangible personal property includes, but is not limited 
 88.18  to: 
 88.19     (1) computer software, whether contained on tape, discs, 
 88.20  cards, or other devices; and 
 88.21     (2) prepaid telephone calling cards.  
 88.22     (c) Tangible personal property does not include: 
 88.23     (1) large ponderous machinery and equipment used in a 
 88.24  business or production activity which at common law would be 
 88.25  considered to be real property; 
 88.26     (2) property which is subject to an ad valorem property 
 88.27  tax; 
 88.28     (3) property described in section 272.02, subdivision 9, 
 88.29  clauses (a) to (d); and 
 88.30     (4) property described in section 272.03, subdivision 2, 
 88.31  clauses (3) and (5). 
 88.32     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
 88.33  purchases made after June 30, 2001. 
 88.34     Sec. 13.  Minnesota Statutes 2000, section 297A.61, 
 88.35  subdivision 14, is amended to read: 
 88.36     Subd. 14.  [LEASING; LEASE.] "Leasing" includes all 
 89.1   transfers of possession or the use of tangible personal property 
 89.2   by the lessee for a consideration, if title remains with the 
 89.3   lessor at the end of the lease.  For purposes of this chapter, A 
 89.4   lease of tangible personal property is a series of sales 
 89.5   transactions that impose upon the lessee multiple payment 
 89.6   obligations.  "Leasing" does not include a transaction defined 
 89.7   under subdivision 15.  
 89.8      <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
 89.9   purchases made after June 30, 2001. 
 89.10     Sec. 14.  Minnesota Statutes 2000, section 297A.61, 
 89.11  subdivision 17, is amended to read: 
 89.12     Subd. 17.  [COMPUTER SOFTWARE.] "Computer software" means a 
 89.13  computer program, either in the form of written procedures or in 
 89.14  the form of storage media on which, or in which, the program is 
 89.15  recorded contained on tapes, discs, cards, or another device, or 
 89.16  any required documentation or manuals designed to facilitate the 
 89.17  use of the computer program.  For purposes of this subdivision: 
 89.18     (1) "Storage media" includes punched cards, tapes, discs, 
 89.19  diskettes, or drums on which computer programs may be embodied 
 89.20  or stored; 
 89.21     (2) "Computer" does not include tape-controlled automatic 
 89.22  drilling, milling, or other manufacturing machinery or 
 89.23  equipment; and 
 89.24     (3) (2) "Computer program" means information and directions 
 89.25  that dictate the function performed by data processing 
 89.26  equipment.  It includes the complete plan for the solution of a 
 89.27  problem, such as the complete sequence of automatic data 
 89.28  processing equipment instructions necessary to solve a problem 
 89.29  and includes both systems and application programs and 
 89.30  subdivisions, such as assemblers, compilers, routines, 
 89.31  generators, and utility programs.  Computer program includes a 
 89.32  "canned" or prewritten computer program that is held or existing 
 89.33  for general or repeated sale or lease, even if the prewritten or 
 89.34  "canned" program was initially developed on a custom basis or 
 89.35  for in-house use. 
 89.36     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
 90.1   purchases made after June 30, 2001. 
 90.2      Sec. 15.  Minnesota Statutes 2000, section 297A.61, 
 90.3   subdivision 19, is amended to read: 
 90.4      Subd. 19.  [COMMON FOR-HIRE CARRIER.] "Common For-hire 
 90.5   carrier" means a person engaged in transportation for hire of 
 90.6   tangible personal property by motor vehicle, if the person:. 
 90.7      (1) has a certificate or permit or has completed a 
 90.8   registration process that authorizes for-hire transportation of 
 90.9   property from the United States Department of Transportation, 
 90.10  the transportation regulation board, or the department of 
 90.11  transportation; 
 90.12     (2) is transporting commodities defined as "exempt" in 
 90.13  for-hire transportation; or 
 90.14     (3) transports tangible personal property pursuant to a 
 90.15  contract with a person described in clause (1) or (2). 
 90.16     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
 90.17  purchases made after June 30, 2001. 
 90.18     Sec. 16.  Minnesota Statutes 2000, section 297A.61, 
 90.19  subdivision 22, is amended to read: 
 90.20     Subd. 22.  [INTERNAL REVENUE CODE.] Unless specifically 
 90.21  provided otherwise, "Internal Revenue Code" means the Internal 
 90.22  Revenue Code of 1986, as amended through December 31, 1999 2000. 
 90.23     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
 90.24  purchases made after June 30, 2001. 
 90.25     Sec. 17.  Minnesota Statutes 2000, section 297A.61, 
 90.26  subdivision 23, is amended to read: 
 90.27     Subd. 23.  [UNITED STATES CODE.] Unless specifically 
 90.28  provided otherwise, "United States Code" means the United States 
 90.29  Code as amended through December 31, 1999 2000. 
 90.30     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
 90.31  purchases made after June 30, 2001. 
 90.32     Sec. 18.  Minnesota Statutes 2000, section 297A.61, is 
 90.33  amended by adding a subdivision to read: 
 90.34     Subd. 24.  [PURCHASE PRICE.] "Purchase price" means the 
 90.35  measure subject to the use tax and has the same meaning as 
 90.36  "sales price." 
 91.1      <b>[EFFECTIVE DATE.]</b> This section is effective January 1, 2002.
 91.2      Sec. 19.  Minnesota Statutes 2000, section 297A.61, is 
 91.3   amended by adding a subdivision to read: 
 91.4      Subd. 25.  [STATE.] Unless specifically provided otherwise, 
 91.5   "state" means any state of the United States and the District of 
 91.6   Columbia. 
 91.7      <b>[EFFECTIVE DATE.]</b> This section is effective January 1, 2002.
 91.8      Sec. 20.  Minnesota Statutes 2000, section 297A.61, is 
 91.9   amended by adding a subdivision to read: 
 91.10     Subd. 26.  [DELIVERY CHARGES.] "Delivery charges" means 
 91.11  charges by the seller for preparation and delivery to a location 
 91.12  designated by the purchaser of personal property or services 
 91.13  including, but not limited to, transportation, shipping, 
 91.14  postage, handling, crating, and packing. 
 91.15     <b>[EFFECTIVE DATE.]</b> This section is effective January 1, 2002.
 91.16     Sec. 21.  Minnesota Statutes 2000, section 297A.61, is 
 91.17  amended by adding a subdivision to read: 
 91.18     Subd. 27.  [PREPARED FOOD.] "Prepared food" means (i) food 
 91.19  sold in a heated state or heated by the seller; (ii) two or more 
 91.20  food ingredients mixed or combined by the seller for sale as a 
 91.21  single item; or (iii) food sold with eating utensils provided by 
 91.22  the seller, including plates, knives, forks, spoons, glasses, 
 91.23  cups, napkins, or straws.  Prepared food does not include food 
 91.24  that is sliced, repackaged, or pasteurized by the seller. 
 91.25     <b>[EFFECTIVE DATE.]</b> This section is effective January 1, 2002.
 91.26     Sec. 22.  Minnesota Statutes 2000, section 297A.61, is 
 91.27  amended by adding a subdivision to read: 
 91.28     Subd. 28.  [SOFT DRINKS.] "Soft drinks" means nonalcoholic 
 91.29  beverages that contain natural or artificial sweeteners.  Soft 
 91.30  drinks do not include beverages that contain milk or milk 
 91.31  products; soy, rice, or similar milk substitutes; or greater 
 91.32  than 50 percent vegetable or fruit juice by volume. 
 91.33     <b>[EFFECTIVE DATE.]</b> This section is effective January 1, 2002.
 91.34     Sec. 23.  Minnesota Statutes 2000, section 297A.61, is 
 91.35  amended by adding a subdivision to read:  
 91.36     Subd. 29.  [CANDY.] "Candy" means a preparation of sugar, 
 92.1   honey, or other natural or artificial sweeteners in combination 
 92.2   with chocolate, fruits, nuts, or other ingredients or flavorings 
 92.3   in the form of bars, drops, or pieces.  Candy does not include 
 92.4   any preparation containing flour and must require no 
 92.5   refrigeration. 
 92.6      <b>[EFFECTIVE DATE.]</b> This section is effective January 1, 2002.
 92.7      Sec. 24.  Minnesota Statutes 2000, section 297A.61, is 
 92.8   amended by adding a subdivision to read: 
 92.9      Subd. 30.  [FOOD SOLD THROUGH VENDING MACHINES.] "Food sold 
 92.10  through vending machines" means food dispensed from a machine or 
 92.11  other mechanical device that accepts payment. 
 92.12     <b>[EFFECTIVE DATE.]</b> This section is effective January 1, 2002.
 92.13     Sec. 25.  Minnesota Statutes 2000, section 297A.64, 
 92.14  subdivision 3, is amended to read: 
 92.15     Subd. 3.  [ADMINISTRATION.] The retailer shall report and 
 92.16  pay the tax imposed in subdivision 1 to the commissioner of 
 92.17  revenue with the taxes imposed in this chapter.  The tax imposed 
 92.18  in subdivision 1 and the fee imposed in subdivision 2 are is 
 92.19  subject to the same interest, penalty, and other provisions 
 92.20  provided for sales and use taxes under chapter 289A and this 
 92.21  chapter.  The commissioner has the same powers to assess and 
 92.22  collect the tax and fee that are given the commissioner in 
 92.23  chapters 270 and 289A and this chapter to assess and collect 
 92.24  sales and use tax. 
 92.25     <b>[EFFECTIVE DATE.]</b> This section is effective for leases 
 92.26  entered into after December 31, 2005. 
 92.27     Sec. 26.  Minnesota Statutes 2000, section 297A.64, 
 92.28  subdivision 4, is amended to read: 
 92.29     Subd. 4.  [EXEMPTIONS.] (a) The tax and the fee imposed by 
 92.30  this section do does not apply to a lease or rental of (1) a 
 92.31  vehicle to be used by the lessee to provide a licensed taxi 
 92.32  service; (2) a hearse or limousine used in connection with a 
 92.33  burial or funeral service; or (3) a van designed or adapted 
 92.34  primarily for transporting property rather than passengers. 
 92.35     (b) The lessor may elect not to charge the fee imposed in 
 92.36  subdivision 2 if in the previous calendar year the lessor had no 
 93.1   more than 20 vehicles available for lease that would have been 
 93.2   subject to tax under this section, or no more than $50,000 in 
 93.3   gross receipts that would have been subject to tax under this 
 93.4   section.  
 93.5      <b>[EFFECTIVE DATE.]</b> This section is effective for leases 
 93.6   entered into after December 31, 2005. 
 93.7      Sec. 27.  Minnesota Statutes 2000, section 297A.66, 
 93.8   subdivision 1, is amended to read: 
 93.9      Subdivision 1.  [DEFINITIONS.] (a) "Retailer maintaining a 
 93.10  place of business in this state," or a similar term, means a 
 93.11  retailer: 
 93.12     (1) having or maintaining within this state, directly or by 
 93.13  a subsidiary, an office, place of distribution, sales or sample 
 93.14  room or place, warehouse, or other place of business; or 
 93.15     (2) having a representative, agent, salesperson, canvasser, 
 93.16  or solicitor operating in this state under the authority of the 
 93.17  retailer or its subsidiary, for any purpose, including the 
 93.18  repairing, selling, delivering, installing, or soliciting of 
 93.19  orders for the retailer's goods or services, or the leasing of 
 93.20  tangible personal property located in this state, whether the 
 93.21  place of business or agent, representative, salesperson, 
 93.22  canvasser, or solicitor is located in the state permanently or 
 93.23  temporarily, or whether or not the retailer or subsidiary is 
 93.24  authorized to do business in this state. 
 93.25     (b) "Destination of a sale" means the location to which the 
 93.26  retailer makes delivery of the property sold, or causes the 
 93.27  property to be delivered, to the purchaser of the property, or 
 93.28  to the agent or designee of the purchaser.  The delivery may be 
 93.29  made by any means, including the United States Postal Service, a 
 93.30  common carrier, or a contract for-hire carrier. 
 93.31     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
 93.32  purchases made after June 30, 2001. 
 93.33     Sec. 28.  Minnesota Statutes 2000, section 297A.66, 
 93.34  subdivision 3, is amended to read: 
 93.35     Subd. 3.  [RETAILER NOT MAINTAINING A PLACE OF BUSINESS IN 
 93.36  THIS STATE.] (a) To the extent allowed by the United States 
 94.1   Constitution and the laws of the United States, a retailer 
 94.2   making retail sales from outside this state to a destination 
 94.3   within this state and not maintaining a place of business in 
 94.4   this state shall collect sales and use taxes and remit them to 
 94.5   the commissioner under section 297A.77, if the retailer engages 
 94.6   in the regular or systematic soliciting of sales from potential 
 94.7   customers in this state by: 
 94.8      (1) distribution, by mail or otherwise, of catalogs, 
 94.9   periodicals, advertising flyers, or other written solicitations 
 94.10  of business to customers in this state; 
 94.11     (2) display of advertisements on billboards or other 
 94.12  outdoor advertising in this state; 
 94.13     (3) advertisements in newspapers published in this state; 
 94.14     (4) advertisements in trade journals or other periodicals 
 94.15  the circulation of which is primarily within this state; 
 94.16     (5) advertisements in a Minnesota edition of a national or 
 94.17  regional publication or a limited regional edition in which this 
 94.18  state is included as part of a broader regional or national 
 94.19  publication which are not placed in other geographically defined 
 94.20  editions of the same issue of the same publication; 
 94.21     (6) advertisements in regional or national publications in 
 94.22  an edition which is not by its contents geographically targeted 
 94.23  to Minnesota but which is sold over the counter in Minnesota or 
 94.24  by subscription to Minnesota residents; 
 94.25     (7) advertisements broadcast on a radio or television 
 94.26  station located in Minnesota; or 
 94.27     (8) any other solicitation by telegraphy, telephone, 
 94.28  computer database, cable, optic, microwave, or other 
 94.29  communication system. 
 94.30     This paragraph (a) must be construed without regard to the 
 94.31  state from which distribution of the materials originated or in 
 94.32  which they were prepared.  
 94.33     (b) The location within or without this state of 
 94.34  independent vendors independent of the retailer that provide 
 94.35  products or services to the retailer in connection with its 
 94.36  solicitation of customers within this state, including such 
 95.1   products and services as creation of copy, printing, 
 95.2   distribution, and recording, is not considered in determining 
 95.3   whether the retailer is required to collect tax.  
 95.4      (c) A retailer not maintaining a place of business in this 
 95.5   state is presumed, subject to rebuttal, to be engaged in regular 
 95.6   solicitation within this state if it engages in any of the 
 95.7   activities in paragraph (a) and: 
 95.8      (1) makes 100 or more retail sales from outside this state 
 95.9   to destinations in this state during a period of 12 consecutive 
 95.10  months; or 
 95.11     (2) makes ten or more retail sales totaling more than 
 95.12  $100,000 from outside this state to destinations in this state 
 95.13  during a period of 12 consecutive months. 
 95.14     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
 95.15  purchases made after June 30, 2001. 
 95.16     Sec. 29.  [297A.668] [SOURCING OF SALE; SITUS IN THIS 
 95.17  STATE.] 
 95.18     Subdivision 1.  [SOURCING RULES.] (a) The following 
 95.19  provisions apply regardless of the characterization of a product 
 95.20  as tangible personal property, a digital good, or a service; but 
 95.21  do not apply to telecommunications services, or the sales of 
 95.22  motor vehicles, watercraft, aircraft, modular homes, 
 95.23  manufactured homes, or mobile homes.  These provisions only 
 95.24  apply to determine a seller's obligation to pay or collect and 
 95.25  remit a sales or use tax with respect to the seller's sale of a 
 95.26  product.  These provisions do not affect the obligation of a 
 95.27  seller as purchaser to remit tax on the use of the product. 
 95.28     (b) When the product is received by the purchaser at a 
 95.29  business location of the seller, the sale is sourced to that 
 95.30  business location. 
 95.31     (c) When the product is not received by the purchaser at a 
 95.32  business location of the seller, the sale is sourced to the 
 95.33  location where receipt by the purchaser or the donee designated 
 95.34  by the purchaser occurs, including the location indicated by 
 95.35  instructions for delivery to the purchasers or the purchaser's 
 95.36  donee, known to the seller. 
 96.1      (d) When paragraphs (b) and (c) do not apply, the sale is 
 96.2   sourced to the location indicated by an address for the 
 96.3   purchaser that is available from the business records of the 
 96.4   seller that are maintained in the ordinary course of the 
 96.5   seller's business, when use of this address does not constitute 
 96.6   bad faith. 
 96.7      (e) When paragraphs (b), (c), and (d) do not apply, the 
 96.8   sale is sourced to the location indicated by an address for the 
 96.9   purchaser obtained during the consummation of the sale, 
 96.10  including the address of a purchaser's payment instrument if no 
 96.11  other address is available, when use of this address does not 
 96.12  constitute bad faith. 
 96.13     (f) When paragraphs (b), (c), (d), and (e) do not apply, 
 96.14  including the circumstance where the seller is without 
 96.15  sufficient information to apply the previous paragraphs, then 
 96.16  the location is determined by the address from which tangible 
 96.17  personal property was shipped, from which the digital good was 
 96.18  first available for transmission by the seller, or from which 
 96.19  the service was provided. 
 96.20     Subd. 2.  [MULTIPLE POINTS OF USE.] (a) Notwithstanding the 
 96.21  provisions of subdivision 1, a business purchaser that is not a 
 96.22  holder of a direct pay permit that knows at the time of its 
 96.23  purchase of a digital good or service that the digital good or 
 96.24  service will be concurrently available for use in more than one 
 96.25  taxing jurisdiction shall deliver to the seller in conjunction 
 96.26  with its purchase a multiple points of use exemption certificate 
 96.27  disclosing this fact. 
 96.28     (b) Upon receipt of the multiple points of use exemption 
 96.29  certificate, the seller is relieved of the obligation to 
 96.30  collect, pay, or remit the applicable tax and the purchaser is 
 96.31  obligated to collect, pay, or remit the applicable tax on a 
 96.32  direct pay basis. 
 96.33     (c) A purchaser delivering the multiple points of use 
 96.34  exemption certificate may use any reasonable, but consistent and 
 96.35  uniform, method of apportionment that is supported by the 
 96.36  purchaser's business records as they exist at the time of the 
 97.1   consummation of the sale. 
 97.2      (d) The multiple points of use exemption certificate 
 97.3   remains in effect for all future sales by the seller to the 
 97.4   purchaser until it is revoked in writing. 
 97.5      (e) A holder of a direct pay permit is not required to 
 97.6   deliver a multiple points or use exemption certificate to the 
 97.7   seller.  A direct pay permit holder shall follow the provisions 
 97.8   of paragraph (c) in apportioning the tax due on a digital good 
 97.9   or a service that will be concurrently available for use in more 
 97.10  than one taxing jurisdiction. 
 97.11     Subd. 3.  [DEFINITION OF TERMS.] For purposes of this 
 97.12  section, the terms "receive" and "receipt" mean taking 
 97.13  possession of tangible personal property, making first use of 
 97.14  services, or taking possession of making first use of digital 
 97.15  goods, whichever occurs first.  The terms receive and receipt do 
 97.16  not include possession by a carrier for hire on behalf of the 
 97.17  purchaser. 
 97.18     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
 97.19  purchases made after December 31, 2001. 
 97.20     Sec. 30.  Minnesota Statutes 2000, section 297A.67, 
 97.21  subdivision 2, is amended to read: 
 97.22     Subd. 2.  [FOOD PRODUCTS AND FOOD INGREDIENTS.] 
 97.23  Food products including, but not limited to, cereal and cereal 
 97.24  products, butter, cheese, milk and milk products, oleomargarine, 
 97.25  meat and meat products, fish and fish products, eggs and egg 
 97.26  products, vegetables and vegetable products, fruit and fruit 
 97.27  products, spices and salt, sugar and sugar products, coffee and 
 97.28  coffee substitutes, tea, and cocoa and cocoa products and food 
 97.29  ingredients are exempt.  For purposes of this subdivision, 
 97.30  "food" and "food ingredients" mean substances, whether in 
 97.31  liquid, concentrated, solid, frozen, dried, or dehydrated form, 
 97.32  that are sold for ingestion or chewing by humans and are 
 97.33  consumed for their taste or nutritional value.  Food and food 
 97.34  ingredients do not include candy, soft drinks, food sold through 
 97.35  vending machines, and prepared foods.  Food and food ingredients 
 97.36  do not include alcoholic beverages, dietary supplements, and 
 98.1   tobacco.  For purposes of this subdivision, "alcoholic 
 98.2   beverages" means beverages that are suitable for human 
 98.3   consumption and contain one-half of one percent or more of 
 98.4   alcohol by volume.  For purposes of this subdivision, "tobacco" 
 98.5   means cigarettes, cigars, chewing or pipe tobacco, or any other 
 98.6   item that contains tobacco.  For purposes of this subdivision, 
 98.7   "dietary supplements" means any product, other than tobacco, 
 98.8   intended to supplement the diet that: 
 98.9      (1) contains one or more of the following dietary 
 98.10  ingredients: 
 98.11     (i) a vitamin; 
 98.12     (ii) a mineral; 
 98.13     (iii) an herb or other botanical; 
 98.14     (iv) an amino acid; 
 98.15     (v) a dietary substance for use by humans to supplement the 
 98.16  diet by increasing the total dietary intake; and 
 98.17     (vi) a concentrate, metabolite, constituent, extract, or 
 98.18  combination of any ingredient described in items (i) to (v); 
 98.19     (2) is intended for ingestion in tablet, capsule, powder, 
 98.20  softgel, gelcap, or liquid form, or if not intended for 
 98.21  ingestion in such form, is not represented as conventional food 
 98.22  and is not represented for use as a sole item of a meal or of 
 98.23  the diet; and 
 98.24     (3) is required to be labeled as a dietary supplement, 
 98.25  identifiable by the supplement facts box found on the label and 
 98.26  as required pursuant to Code of Federal Regulations, title 21, 
 98.27  section 101.36. 
 98.28     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
 98.29  purchases made after December 31, 2001. 
 98.30     Sec. 31.  Minnesota Statutes 2000, section 297A.67, 
 98.31  subdivision 8, is amended to read: 
 98.32     Subd. 8.  [CLOTHING.] (a) Clothing and wearing apparel, 
 98.33  including sewing materials to be directly incorporated into 
 98.34  wearing apparel, are is exempt.  For purposes of this 
 98.35  subdivision, clothing and wearing apparel do not include the 
 98.36  following: 
 99.1      (1) articles designed primarily for use while engaging in a 
 99.2   specific sport or recreational activity that are not also worn 
 99.3   for general use; 
 99.4      (2) articles designed primarily to provide safety or 
 99.5   protection against injury while the user is engaged in 
 99.6   industrial or general job activities; 
 99.7      (3) all articles commonly or commercially known as jewelry 
 99.8   including, but not limited to, watches; 
 99.9      (4) nonprescription optical glasses of any sort; 
 99.10     (5) articles made entirely of fur on the hide or pelt, or 
 99.11  partially of such fur if the value of the fur is more than three 
 99.12  times the value of the next most valuable component material; 
 99.13     (6) perfume, lotions, creams, dyes, or other substances 
 99.14  that are applied to the skin or the hair; and 
 99.15     (7) luggage, bags, purses, wallets, or cases of any 
 99.16  sort. "clothing" means all human wearing apparel suitable for 
 99.17  general use. 
 99.18     (b) Clothing includes, but is not limited to, aprons, 
 99.19  household and shop; athletic supporters; baby receiving 
 99.20  blankets; bathing suits and caps; beach capes and coats; belts 
 99.21  and suspenders; boots; coats and jackets; costumes; children and 
 99.22  adult diapers, including disposable; ear muffs; footlets; formal 
 99.23  wear; garters and garter belts; girdles; gloves and mittens for 
 99.24  general use; hats and caps; hosiery; insoles for shoes; lab 
 99.25  coats; neckties; overshoes; pantyhose; rainwear; rubber pants; 
 99.26  sandals; scarves; shoes and shoe laces; slippers; sneakers; 
 99.27  socks and stockings; steel-toed boots; underwear; uniforms, 
 99.28  athletic and nonathletic; and wedding apparel. 
 99.29     (c) Clothing does not include the following: 
 99.30     (1) belt buckles sold separately; 
 99.31     (2) costume masks sold separately; 
 99.32     (3) patches and emblems sold separately; 
 99.33     (4) sewing equipment and supplies, including but not 
 99.34  limited to, knitting needles, patterns, pins, scissors, sewing 
 99.35  machines, sewing needles, tape measures, and thimbles; 
 99.36     (5) sewing materials that become part of clothing, 
100.1   including but not limited to, buttons, fabric, lace, thread, 
100.2   yarn, and zippers; 
100.3      (6) clothing accessories or equipment; 
100.4      (7) sports or recreational equipment; and 
100.5      (8) protective equipment. 
100.6   Clothing also does not include apparel made from fur if a 
100.7   uniform definition of "apparel made from fur" is developed by 
100.8   the member states of the Streamlined Sales and Use Tax Agreement.
100.9      For purposes of this subdivision, "clothing accessories or 
100.10  equipment" means incidental items worn on the person or in 
100.11  conjunction with clothing.  Clothing accessories include, but 
100.12  are not limited to, briefcases; cosmetics; hair notions, 
100.13  including barrettes, hair bows, and hairnets; handbags; 
100.14  handkerchiefs; jewelry; nonprescription sunglasses; umbrellas; 
100.15  wallets; watches; and wigs and hairpieces.  "Sports or 
100.16  recreational equipment" means items designed for human use and 
100.17  worn in conjunction with an athletic or recreational activity 
100.18  that are not suitable for general use.  Sports and recreational 
100.19  equipment includes, but is not limited to, ballet and tap shoes; 
100.20  cleated or spiked athletic shoes; baseball, bowling, boxing, 
100.21  hockey, and golf gloves; goggles; hand and elbow guards; life 
100.22  preservers and vests; mouth guards; roller and ice skates; shin 
100.23  guards; shoulder pads; ski boots; waders; and wetsuits and 
100.24  fins.  "Protective equipment" means items for human wear and 
100.25  designed as protection of the wearer against injury or disease 
100.26  or as protection against damage or injury of other persons or 
100.27  property but not suitable for general use.  Protective equipment 
100.28  includes, but is not limited to, breathing masks; clean room 
100.29  apparel and equipment; ear and hearing protectors; face shields; 
100.30  finger guards; hard hats; helmets; paint or dust respirators; 
100.31  protective gloves; safety glasses and goggles; safety belts; 
100.32  tool belts; and welders gloves and masks. 
100.33     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
100.34  purchases made after December 31, 2001. 
100.35     Sec. 32.  Minnesota Statutes 2000, section 297A.67, 
100.36  subdivision 23, is amended to read: 
101.1      Subd. 23.  [OCCASIONAL SALES.] Isolated and occasional 
101.2   sales in Minnesota not made in the normal course of business, 
101.3   and of selling that kind of property or service are exempt.  The 
101.4   storage, use, or consumption of property or services resulting 
101.5   from such sales, are acquired as a result of such a sale is 
101.6   exempt.  This exemption does not apply to sales of tangible 
101.7   personal property primarily used in a trade or business. 
101.8      <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
101.9   purchases made after June 30, 2001. 
101.10     Sec. 33.  Minnesota Statutes 2000, section 297A.67, 
101.11  subdivision 24, is amended to read: 
101.12     Subd. 24.  [CONSTITUTIONAL PROHIBITIONS.] The gross 
101.13  receipts from The sale of and the storage, use, or other 
101.14  consumption in Minnesota of tangible personal property, tickets, 
101.15  or admissions, electricity, gas, or local exchange telephone 
101.16  service or services, that the state of Minnesota is prohibited 
101.17  from taxing under the Constitution or laws of the United States 
101.18  or under the Constitution of Minnesota, are exempt. 
101.19     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
101.20  purchases made after June 30, 2001. 
101.21     Sec. 34.  Minnesota Statutes 2000, section 297A.67, 
101.22  subdivision 25, is amended to read: 
101.23     Subd. 25.  [MAINTENANCE OF CEMETERY GROUNDS.] Lawn care and 
101.24  related services used in the maintenance of cemetery grounds are 
101.25  exempt.  For purposes of this subdivision, "lawn care and 
101.26  related services" means the services listed in section 297A.61, 
101.27  subdivision 16 3, paragraph (g), clause (6), item (vi), and 
101.28  "cemetery" means a cemetery for human burial. 
101.29     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
101.30  purchases made after June 30, 2001. 
101.31     Sec. 35.  Minnesota Statutes 2000, section 297A.67, is 
101.32  amended by adding a subdivision to read: 
101.33     Subd. 26.  [TRADE ALLOWANCE.] The amount allowed as a 
101.34  credit against the sales price for tangible personal property 
101.35  taken in trade for resale is exempt. 
101.36     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
102.1   purchases made after December 31, 2001. 
102.2      Sec. 36.  Minnesota Statutes 2000, section 297A.67, is 
102.3   amended by adding a subdivision to read: 
102.4      Subd. 27.  [SEWING MATERIALS.] Sewing materials are exempt. 
102.5   For purposes of this subdivision "sewing materials" mean fabric, 
102.6   thread, zippers, interfacing, buttons, trim, and other items 
102.7   that are usually directly incorporated into the construction of 
102.8   clothing, regardless of whether it is actually used for making 
102.9   clothing.  It does not include batting, foam, or fabric 
102.10  specifically manufactured for arts and craft projects, or other 
102.11  materials for craft projects. 
102.12     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
102.13  purchases made after December 31, 2001. 
102.14     Sec. 37.  Minnesota Statutes 2000, section 297A.67, is 
102.15  amended by adding a subdivision to read: 
102.16     Subd. 28.  [AMBULANCE SUPPLIES, PARTS, AND EQUIPMENT.] The 
102.17  following sales to or use by an ambulance service licensed under 
102.18  section 144E.10 are exempt: 
102.19     (1) supplies and equipment used to provide medical care; 
102.20  and 
102.21     (2) repair and replacement parts for ambulances. 
102.22     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
102.23  purchases made after July 31, 2001. 
102.24     Sec. 38.  Minnesota Statutes 2000, section 297A.68, 
102.25  subdivision 2, is amended to read: 
102.26     Subd. 2.  [MATERIALS CONSUMED IN INDUSTRIAL PRODUCTION.] 
102.27  (a) Materials stored, used, or consumed in industrial production 
102.28  of personal property intended to be sold ultimately at retail 
102.29  are exempt, whether or not the item so used becomes an 
102.30  ingredient or constituent part of the property produced.  
102.31  Materials that qualify for this exemption include, but are not 
102.32  limited to, the following: 
102.33     (1) chemicals, including chemicals used for cleaning food 
102.34  processing machinery and equipment; 
102.35     (2) materials, including chemicals, fuels, and electricity 
102.36  purchased by persons engaged in industrial production to treat 
103.1   waste generated as a result of the production process; 
103.2      (3) fuels, electricity, gas, and steam used or consumed in 
103.3   the production process, except that electricity, gas, or steam 
103.4   used for space heating, cooling, or lighting is exempt only if 
103.5   (i) it is in excess of the average climate control or lighting 
103.6   for the production area, and (ii) it is necessary to produce 
103.7   that particular industrial product; 
103.8      (4) petroleum products and lubricants; 
103.9      (5) packaging materials, including returnable containers 
103.10  used in packaging food and beverage products; 
103.11     (6) accessory tools, equipment, and other items that are 
103.12  separate detachable units with an ordinary useful life of less 
103.13  than 12 months used in producing a direct effect upon the 
103.14  product; and 
103.15     (7) the following materials, tools, and equipment used in 
103.16  metalcasting:  crucibles, thermocouple protection sheaths and 
103.17  tubes, stalk tubes, refractory materials, molten metal filters 
103.18  and filter boxes, degassing lances, and base blocks. 
103.19     (b) This exemption does not include: 
103.20     (1) machinery, equipment, implements, tools, accessories, 
103.21  appliances, contrivances and furniture and fixtures, except 
103.22  those listed in paragraph (a), clause (6); and 
103.23     (2) petroleum and special fuels used in producing or 
103.24  generating power for propelling ready-mixed concrete trucks on 
103.25  the public highways of this state. 
103.26     (c) Industrial production includes, but is not limited to, 
103.27  research, development, design or production of any tangible 
103.28  personal property, manufacturing, processing (other than by 
103.29  restaurants and consumers) of agricultural products (whether 
103.30  vegetable or animal), commercial fishing, refining, smelting, 
103.31  reducing, brewing, distilling, printing, mining, quarrying, 
103.32  lumbering, generating electricity and the production of road 
103.33  building materials.  Industrial production does not include 
103.34  painting, cleaning, repairing or similar processing of property 
103.35  except as part of the original manufacturing process.  
103.36     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
104.1   purchases made after June 30, 2001. 
104.2      Sec. 39.  Minnesota Statutes 2000, section 297A.68, 
104.3   subdivision 3, is amended to read: 
104.4      Subd. 3.  [MATERIALS USED IN PROVIDING CERTAIN TAXABLE 
104.5   SERVICES.] (a) Materials stored, used, or consumed in providing 
104.6   a taxable service listed in section 297A.61, subdivision 16 3, 
104.7   paragraph (g), clause (6), intended to be sold ultimately at 
104.8   retail are exempt. 
104.9      (b) This exemption includes, but is not limited to: 
104.10     (1) chemicals, lubricants, packaging materials, seeds, 
104.11  trees, fertilizers, and herbicides, if these items are used or 
104.12  consumed in providing the taxable service; 
104.13     (2) chemicals used to treat waste generated as a result of 
104.14  providing the taxable service; 
104.15     (3) accessory tools, equipment, and other items that are 
104.16  separate detachable units used in providing the service and that 
104.17  have an ordinary useful life of less than 12 months; and 
104.18     (4) fuel, electricity, gas, and steam used or consumed in 
104.19  the production process, except that electricity, gas, or steam 
104.20  used for space heating, cooling, or lighting is exempt only if 
104.21  (i) it is in excess of average climate control or lighting, and 
104.22  (ii) it is necessary to produce that particular taxable service. 
104.23     (c) This exemption does not include machinery, equipment, 
104.24  implements, tools, accessories, appliances, contrivances, 
104.25  furniture, and fixtures used in providing the taxable service. 
104.26     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
104.27  purchases made after June 30, 2001. 
104.28     Sec. 40.  Minnesota Statutes 2000, section 297A.68, 
104.29  subdivision 5, is amended to read: 
104.30     Subd. 5.  [CAPITAL EQUIPMENT.] (a) Capital equipment is 
104.31  exempt.  The tax must be imposed and collected as if the rate 
104.32  under section 297A.62, subdivision 1, applied, and then refunded 
104.33  in the manner provided in section 297A.75. 
104.34     "Capital equipment" means machinery and equipment purchased 
104.35  or leased, and used in this state by the purchaser or lessee 
104.36  primarily for manufacturing, fabricating, mining, or refining 
105.1   tangible personal property to be sold ultimately at retail. 
105.2      Capital equipment means if the machinery and equipment is 
105.3   essential to the integrated production process of manufacturing, 
105.4   fabricating, mining, or refining.  Capital equipment also 
105.5   includes machinery and equipment used to electronically transmit 
105.6   results retrieved by a customer of an online computerized data 
105.7   retrieval system. 
105.8      (b) Capital equipment includes, but is not limited to: 
105.9      (1) machinery and equipment used to operate, control, or 
105.10  regulate the production equipment; 
105.11     (2) machinery and equipment used for research and 
105.12  development, design, quality control, and testing activities; 
105.13     (3) environmental control devices that are used to maintain 
105.14  conditions such as temperature, humidity, light, or air pressure 
105.15  when those conditions are essential to and are part of the 
105.16  production process; 
105.17     (4) materials and supplies used to construct and install 
105.18  machinery or equipment; 
105.19     (5) repair and replacement parts, including accessories, 
105.20  whether purchased as spare parts, repair parts, or as upgrades 
105.21  or modifications to machinery or equipment; 
105.22     (6) materials used for foundations that support machinery 
105.23  or equipment; 
105.24     (7) materials used to construct and install special purpose 
105.25  buildings used in the production process; and 
105.26     (8) ready-mixed concrete trucks in which the ready-mixed 
105.27  concrete is mixed as part of the delivery process.  
105.28     (c) Capital equipment does not include the following: 
105.29     (1) motor vehicles taxed under chapter 297B; 
105.30     (2) machinery or equipment used to receive or store raw 
105.31  materials; 
105.32     (3) building materials, except for materials included in 
105.33  paragraph (b), clauses (6) and (7); 
105.34     (4) machinery or equipment used for nonproduction purposes, 
105.35  including, but not limited to, the following:  plant security, 
105.36  fire prevention, first aid, and hospital stations; support 
106.1   operations or administration; pollution control; and plant 
106.2   cleaning, disposal of scrap and waste, plant communications, 
106.3   space heating, cooling, lighting, or safety; 
106.4      (5) farm machinery and aquaculture production equipment as 
106.5   defined by section 297A.61, subdivisions 12 and 13; 
106.6      (6) machinery or equipment purchased and installed by a 
106.7   contractor as part of an improvement to real property; or 
106.8      (7) any other item that is not essential to the integrated 
106.9   process of manufacturing, fabricating, mining, or refining. 
106.10     (d) For purposes of this subdivision: 
106.11     (1) "Machinery" means mechanical, electronic, or electrical 
106.12  devices, including computers and computer software, that are 
106.13  purchased or constructed to be used for the activities set forth 
106.14  in paragraph (a), beginning with the removal of raw materials 
106.15  from inventory through completion of the product, including 
106.16  packaging of the product. 
106.17     (2) "Equipment" means independent devices or tools separate 
106.18  from machinery but essential to an integrated production 
106.19  process, including computers and computer software, used in 
106.20  operating, controlling, or regulating machinery and equipment; 
106.21  and any subunit or assembly comprising a component of any 
106.22  machinery or accessory or attachment parts of machinery, such as 
106.23  tools, dies, jigs, patterns, and molds.  
106.24     (3) "Primarily" means machinery and equipment used 50 
106.25  percent or more of the time in an activity described in 
106.26  paragraph (a). 
106.27     (4) "Manufacturing" means an operation or series of 
106.28  operations where raw materials are changed in form, composition, 
106.29  or condition by machinery and equipment and which results in the 
106.30  production of a new article of tangible personal property.  For 
106.31  purposes of this subdivision, "manufacturing" includes the 
106.32  generation of electricity or steam to be sold at retail. 
106.33     (5) "Fabricating" means to make, build, create, produce, or 
106.34  assemble components or property to work in a new or different 
106.35  manner. 
106.36     (6) "Mining" means the extraction of minerals, ores, stone, 
107.1   or peat. 
107.2      (7) "Refining" means the process of converting a natural 
107.3   resource to a product, including the treatment of water to be 
107.4   sold at retail. 
107.5      (8) "Integrated production process" means a process 
107.6   beginning with the removal of raw materials from inventory 
107.7   through the completion of the product, including packaging of 
107.8   the product. 
107.9      (9) "Online data retrieval system" means a system whose 
107.10  cumulation of information is equally available and accessible to 
107.11  all its customers. 
107.12     (10) (9) "Machinery and equipment used for pollution 
107.13  control" means machinery and equipment used solely to eliminate, 
107.14  prevent, or reduce pollution resulting from an activity 
107.15  described in paragraph (a).  
107.16     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
107.17  purchases made after June 30, 2001. 
107.18     Sec. 41.  Minnesota Statutes 2000, section 297A.68, 
107.19  subdivision 11, is amended to read: 
107.20     Subd. 11.  [ADVERTISING MATERIALS.] Material Materials 
107.21  designed to advertise and promote the sale of merchandise or 
107.22  services is are exempt if the material is purchased and stored 
107.23  for the purpose of subsequently shipping or otherwise 
107.24  transferring outside the state by the purchaser for later these 
107.25  materials are mailed or transferred to a person outside the 
107.26  state for use solely outside the state of Minnesota.  Mailing 
107.27  and reply envelopes and cards used exclusively in connection 
107.28  with these advertising and promotional materials are included in 
107.29  this exemption.  The exemption applies regardless of where the 
107.30  mailing occurs.  The storage of these materials in the state for 
107.31  the purpose of subsequently shipping or otherwise transferring 
107.32  the material out of state is also exempt if the other conditions 
107.33  in this subdivision are met. 
107.34     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
107.35  purchases made after June 30, 2001. 
107.36     Sec. 42.  Minnesota Statutes 2000, section 297A.68, 
108.1   subdivision 13, is amended to read: 
108.2      Subd. 13.  [OUTSTATE TRANSPORT OR DELIVERY.] (a) Tangible 
108.3   personal property is exempt if the property, without 
108.4   intermediate use, is all of the following conditions are met:  
108.5      (1) the property, without intermediate use, is shipped or 
108.6   transported outside Minnesota by the purchaser or is stored, 
108.7   processed, fabricated or manufactured into, attached to or 
108.8   incorporated into other tangible personal property that is 
108.9   transported or shipped outside Minnesota; and 
108.10     (2) the property is used in a trade or business outside 
108.11  Minnesota after being shipped or transported outside of 
108.12  Minnesota, and is not returned to Minnesota, except in the 
108.13  course of interstate commerce; and 
108.14     (3) the property is either (i) not subject to tax in the 
108.15  state or country to which it is transported for storage or use, 
108.16  or (ii) to be used in other states or countries as part of a 
108.17  maintenance contract. 
108.18     (b) For purposes of this subdivision, storage or 
108.19  processing, fabricating, manufacturing, attaching to, or 
108.20  incorporating into other property is not intermediate use. 
108.21     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
108.22  purchases made after June 30, 2001. 
108.23     Sec. 43.  Minnesota Statutes 2000, section 297A.68, 
108.24  subdivision 14, is amended to read: 
108.25     Subd. 14.  [TEMPORARY STORAGE PROPERTY IN TRANSIT.] 
108.26  Tangible personal property is exempt if all of the following 
108.27  conditions are met: 
108.28     (1) it is shipped or brought into Minnesota by a common 
108.29  for-hire carrier; 
108.30     (2) without intermediate use, it is kept in a public 
108.31  warehouse; 
108.32     (3) it is kept for the purpose of being later transported 
108.33  outside Minnesota; and 
108.34     (4) after storage, it is used solely outside Minnesota, 
108.35  except in the course of interstate commerce. 
108.36     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
109.1   purchases made after June 30, 2001. 
109.2      Sec. 44.  Minnesota Statutes 2000, section 297A.68, 
109.3   subdivision 18, is amended to read: 
109.4      Subd. 18.  [CUSTOM COMPUTER SOFTWARE.] The design, 
109.5   development, writing, translation, fabrication, lease, or 
109.6   transfer for a consideration of title or possession of a custom 
109.7   computer program is exempt.  "Custom computer program" means a 
109.8   computer program prepared to the special order of the customer, 
109.9   either in the form of written procedures or in the form of 
109.10  storage media on which, or in which, the program is 
109.11  recorded contained on tapes, discs, cards, or another device, or 
109.12  any required documentation or manuals designed to facilitate the 
109.13  use of the custom computer program transferred.  It includes 
109.14  those services represented by separately stated charges for 
109.15  modifications to an existing prewritten program that are 
109.16  prepared to the special order of the customer.  It does not 
109.17  include a "canned" or prewritten computer program that is held 
109.18  or existing for general or repeated sale or lease, even if the 
109.19  prewritten or "canned" program was initially developed on a 
109.20  custom basis or for in-house use.  Modification to an existing 
109.21  prewritten program to meet the customer's needs is custom 
109.22  computer programming only to the extent of the modification.  
109.23     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
109.24  purchases made after June 30, 2001. 
109.25     Sec. 45.  Minnesota Statutes 2000, section 297A.68, 
109.26  subdivision 19, is amended to read: 
109.27     Subd. 19.  [PETROLEUM PRODUCTS.] The following petroleum 
109.28  products are exempt: 
109.29     (1) products upon which a tax has been imposed and paid 
109.30  under chapter 296A, and for which no refund has been or will be 
109.31  allowed because the buyer used the fuel for nonhighway use; 
109.32     (2) products that are used in the improvement of 
109.33  agricultural land by constructing, maintaining, and repairing 
109.34  drainage ditches, tile drainage systems, grass waterways, water 
109.35  impoundment, and other erosion control structures; 
109.36     (3) products purchased by a transit system receiving 
110.1   financial assistance under section 174.24, 256B.0625, 
110.2   subdivision 17, or 473.384; 
110.3      (4) products purchased by an ambulance service licensed 
110.4   under chapter 144E; 
110.5      (5) products used in a passenger snowmobile, as defined in 
110.6   section 296A.01, subdivision 39, for off-highway business use as 
110.7   part of the operations of a resort as provided under section 
110.8   296A.16, subdivision 2, clause (2); or 
110.9      (5) (6) products purchased by a state or a political 
110.10  subdivision of a state for use in motor vehicles exempt from 
110.11  registration under section 168.012, subdivision 1, paragraph (b).
110.12     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
110.13  purchases made after July 31, 2001. 
110.14     Sec. 46.  Minnesota Statutes 2000, section 297A.68, 
110.15  subdivision 25, is amended to read: 
110.16     Subd. 25.  [OCCASIONAL SALES SALE OF PROPERTY USED IN A 
110.17  TRADE OR BUSINESS.] (a) Isolated or occasional sales of The sale 
110.18  of tangible personal property in Minnesota primarily used in a 
110.19  trade or business is exempt if the sale is not made in the 
110.20  normal course of business of selling that kind of property are 
110.21  exempt.  The storage, use, or consumption of property acquired 
110.22  as a result of such a sale is exempt. 
110.23     (b) This exemption applies to a sale of tangible personal 
110.24  property primarily used in a trade or business only and if one 
110.25  of the following conditions is satisfied:  
110.26     (1) the sale occurs in a transaction subject to or 
110.27  described in section 118, 331, 332, 336, 337, 338, 351, 355, 
110.28  368, 721, 731, 1031, or 1033 of the Internal Revenue Code; 
110.29     (2) the sale is between members of a controlled group as 
110.30  defined in section 1563(a) of the Internal Revenue Code; 
110.31     (3) the sale is a sale of farm machinery; 
110.32     (4) the sale is a farm auction sale; 
110.33     (5) the sale is a sale of substantially all of the assets 
110.34  of a trade or business; or 
110.35     (6) the total amount of gross receipts from the sale of 
110.36  trade or business property made during the calendar month of the 
111.1   sale and the preceding 11 calendar months does not exceed $1,000.
111.2      The use, storage, distribution, or consumption of tangible 
111.3   personal property acquired as a result of a sale exempt under 
111.4   this subdivision is also exempt. 
111.5      (c) (b) For purposes of this subdivision, the following 
111.6   terms have the meanings given.  
111.7      (1) A "farm auction" is a public auction conducted by a 
111.8   licensed auctioneer if substantially all of the property sold 
111.9   consists of property used in the trade or business of farming 
111.10  and property not used primarily in a trade or business. 
111.11     (2) "Trade or business" includes the assets of a separate 
111.12  division, branch, or identifiable segment of a trade or business 
111.13  if, before the sale, the income and expenses attributable to the 
111.14  separate division, branch, or identifiable segment could be 
111.15  separately ascertained from the books of account or record (the 
111.16  lease or rental of an identifiable segment does not qualify for 
111.17  the exemption). 
111.18     (3) A "sale of substantially all of the assets of a trade 
111.19  or business" must occur as a single transaction or a series of 
111.20  related transactions within the 12-month period beginning on the 
111.21  date of the first sale of assets intended to qualify for the 
111.22  exemption provided in paragraph (b) (a), clause (5). 
111.23     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
111.24  purchases made after June 30, 2001. 
111.25     Sec. 47.  Minnesota Statutes 2000, section 297A.69, 
111.26  subdivision 2, is amended to read: 
111.27     Subd. 2.  [MATERIALS CONSUMED IN AGRICULTURAL PRODUCTION.] 
111.28  (a) Materials stored, used, or consumed in agricultural 
111.29  production of personal property intended to be sold ultimately 
111.30  at retail are exempt, whether or not the item becomes an 
111.31  ingredient or constituent part of the property produced.  
111.32  Materials that qualify for this exemption include, but are not 
111.33  limited to, the following: 
111.34     (1) feeds, seeds, trees, fertilizers, and herbicides, 
111.35  including when purchased for use by farmers in a federal or 
111.36  state farm or conservation program; 
112.1      (2) materials sold to a veterinarian to be used or consumed 
112.2   in the care, medication, and treatment of agricultural 
112.3   production animals and horses; 
112.4      (3) chemicals, including chemicals used for cleaning food 
112.5   processing machinery and equipment; 
112.6      (4) materials, including chemicals, fuels, and electricity 
112.7   purchased by persons engaged in agricultural production to treat 
112.8   waste generated as a result of the production process; 
112.9      (5) fuels, electricity, gas, and steam used or consumed in 
112.10  the production process, except that electricity, gas, or steam 
112.11  used for space heating, cooling, or lighting is exempt only if 
112.12  (i) it is in excess of the average climate control or lighting 
112.13  for the production area, and (ii) it is necessary to produce 
112.14  that particular agricultural product; 
112.15     (6) petroleum products and lubricants; 
112.16     (7) packaging materials, including returnable containers 
112.17  used in packaging food and beverage products; and 
112.18     (8) accessory tools and equipment that are separate 
112.19  detachable units with an ordinary useful life of less than 12 
112.20  months used in producing a direct effect upon the product. 
112.21  Machinery, equipment, implements, tools, accessories, 
112.22  appliances, contrivances, and furniture and fixtures, except 
112.23  those listed in this clause are not included within this 
112.24  exemption. 
112.25     (b) For purposes of this subdivision, "agricultural 
112.26  production" includes, but is not limited to, horticulture, 
112.27  floriculture, maple syrup harvesting, and the raising of pets, 
112.28  fur-bearing animals, research animals, horses, farmed cervidae 
112.29  as defined in section 17.451, subdivision 2, llamas as defined 
112.30  in section 17.455, subdivision 2, and ratitae as defined in 
112.31  section 17.453, subdivision 3. 
112.32     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
112.33  purchases made after June 30, 2001. 
112.34     Sec. 48.  Minnesota Statutes 2000, section 297A.70, 
112.35  subdivision 1, is amended to read: 
112.36     Subdivision 1.  [SCOPE.] (a) To the extent provided in this 
113.1   section, the gross receipts from sales of items to or by, and 
113.2   storage, distribution, use, or consumption of items by the 
113.3   organizations listed in this section are specifically exempted 
113.4   from the taxes imposed by this chapter. 
113.5      (b) Notwithstanding any law to the contrary enacted before 
113.6   1992, only sales to governments and political subdivisions 
113.7   listed in this section are exempt from the taxes imposed by this 
113.8   chapter.  
113.9      (c) "Sales" includes purchases under an installment 
113.10  contract or lease purchase agreement under section 465.71. 
113.11     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
113.12  purchases made after June 30, 2001. 
113.13     Sec. 49.  Minnesota Statutes 2000, section 297A.70, 
113.14  subdivision 2, is amended to read: 
113.15     Subd. 2.  [SALES TO GOVERNMENT.] (a) All sales, except 
113.16  those listed in paragraph (b), to the following governments and 
113.17  political subdivisions, or to the listed agencies or 
113.18  instrumentalities of governments and political subdivisions, are 
113.19  exempt: 
113.20     (1) the United States and its agencies and 
113.21  instrumentalities; 
113.22     (2) school districts, the University of Minnesota, state 
113.23  universities, community colleges, technical colleges, state 
113.24  academies, the Perpich Minnesota center for arts education, and 
113.25  an instrumentality of a political subdivision that is accredited 
113.26  as an optional/special function school by the North Central 
113.27  Association of Colleges and Schools; 
113.28     (3) hospitals and nursing homes owned and operated by 
113.29  political subdivisions of the state; 
113.30     (4) other states or political subdivisions of other states, 
113.31  if the sale would be exempt from taxation if it occurred in that 
113.32  state; and 
113.33     (5) sales to public libraries, public library systems, 
113.34  multicounty, multitype library systems as defined in section 
113.35  134.001, county law libraries under chapter 134A, state agency 
113.36  libraries, the state library under section 480.09, and the 
114.1   legislative reference library.  
114.2      (b) This exemption does not apply to the sales of the 
114.3   following products and services: 
114.4      (1) building, construction, or reconstruction materials 
114.5   purchased by a contractor or a subcontractor as a part of a 
114.6   lump-sum contract or similar type of contract with a guaranteed 
114.7   maximum price covering both labor and materials for use in the 
114.8   construction, alteration, or repair of a building or facility; 
114.9      (2) construction materials purchased by tax exempt entities 
114.10  or their contractors to be used in constructing buildings or 
114.11  facilities which will not be used principally by the tax exempt 
114.12  entities; 
114.13     (3) the leasing of a motor vehicle as defined in section 
114.14  297B.01, subdivision 5, except for leases entered into by the 
114.15  United States or its agencies or instrumentalities; or 
114.16     (4) meals and lodging as defined under section 297A.61, 
114.17  subdivisions subdivision 3, paragraph paragraphs (d), and 16 
114.18  (g), paragraph (c) clause (2), except for meals and lodging 
114.19  purchased directly by the United States or its agencies or 
114.20  instrumentalities. 
114.21     (c) As used in this subdivision, "school districts" means 
114.22  public school entities and districts of every kind and nature 
114.23  organized under the laws of the state of Minnesota, and any 
114.24  instrumentality of a school district, as defined in section 
114.25  471.59. 
114.26     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
114.27  purchases made after June 30, 2001. 
114.28     Sec. 50.  Minnesota Statutes 2000, section 297A.70, 
114.29  subdivision 3, is amended to read: 
114.30     Subd. 3.  [SALES OF CERTAIN GOODS AND SERVICES TO 
114.31  GOVERNMENT.] (a) The following sales to or use by the specified 
114.32  governments and political subdivisions of the state are exempt: 
114.33     (1) supplies and equipment used to provide medical care in 
114.34  the operation of an ambulance service owned and operated by a 
114.35  political subdivision of the state; 
114.36     (2) repair and replacement parts for emergency rescue 
115.1   vehicles, fire trucks, and fire apparatus to a political 
115.2   subdivision; 
115.3      (3) (2) machinery and equipment, except for motor vehicles, 
115.4   used directly for mixed municipal solid waste management 
115.5   services at a solid waste disposal facility as defined in 
115.6   section 115A.03, subdivision 10; 
115.7      (4) (3) chore and homemaking services to a political 
115.8   subdivision of the state to be provided to elderly or disabled 
115.9   individuals; 
115.10     (5) (4) telephone services to the department of 
115.11  administration that are used to provide telecommunications 
115.12  services through the intertechnologies revolving fund; 
115.13     (6) (5) firefighter personal protective equipment as 
115.14  defined in paragraph (b), if purchased or authorized by and for 
115.15  the use of an organized fire department, fire protection 
115.16  district, or fire company regularly charged with the 
115.17  responsibility of providing fire protection to the state or a 
115.18  political subdivision; 
115.19     (7) (6) bullet-resistant body armor that provides the 
115.20  wearer with ballistic and trauma protection, if purchased by a 
115.21  law enforcement agency of the state or a political subdivision 
115.22  of the state, or a licensed peace officer, as defined in section 
115.23  626.84, subdivision 1; 
115.24     (8) (7) motor vehicles purchased or leased by political 
115.25  subdivisions of the state if the vehicles are exempt from 
115.26  registration under section 168.012, subdivision 1, paragraph 
115.27  (b), or exempt from taxation under section 473.448; 
115.28     (9) (8)  equipment designed to process, dewater, and 
115.29  recycle biosolids for wastewater treatment facilities of 
115.30  political subdivisions, and materials incidental to installation 
115.31  of that equipment; and materials used to construct buildings to 
115.32  house the equipment, if the materials are purchased after June 
115.33  30, 1998, and before July 1, 2001; and 
115.34     (10) (9) sales to a town of gravel and of machinery, 
115.35  equipment, and accessories, except motor vehicles, used 
115.36  exclusively for road and bridge maintenance, and leases by a 
116.1   town of motor vehicles exempt from tax under section 297B.03, 
116.2   clause (10). 
116.3      (b) For purposes of this subdivision, "firefighters 
116.4   personal protective equipment" means helmets, including face 
116.5   shields, chin straps, and neck liners; bunker coats and pants, 
116.6   including pant suspenders; boots; gloves; head covers or hoods; 
116.7   wildfire jackets; protective coveralls; goggles; self-contained 
116.8   breathing apparatus; canister filter masks; personal alert 
116.9   safety systems; spanner belts; optical or thermal imaging search 
116.10  devices; and all safety equipment required by the Occupational 
116.11  Safety and Health Administration. 
116.12     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
116.13  purchases made after July 31, 2001. 
116.14     Sec. 51.  Minnesota Statutes 2000, section 297A.70, 
116.15  subdivision 4, is amended to read: 
116.16     Subd. 4.  [SALES TO NONPROFIT GROUPS.] (a) All sales, 
116.17  except those listed in paragraph (b), to the following 
116.18  "nonprofit organizations" are exempt: 
116.19     (1) an entity a corporation, society, association, 
116.20  foundation, or institution organized and operated exclusively 
116.21  for charitable, religious, or educational purposes if the item 
116.22  purchased is used in the performance of charitable, religious, 
116.23  or educational functions; and 
116.24     (2) any senior citizen group or association of groups that: 
116.25     (i) in general limits membership to persons who are either 
116.26  age 55 or older, or physically disabled; and 
116.27     (ii) is organized and operated exclusively for pleasure, 
116.28  recreation, and other nonprofit purposes, no part of the net 
116.29  earnings of which inures to the benefit of any private 
116.30  shareholders; and. 
116.31     (3) an entity organized and operated exclusively to 
116.32  maintain 
116.33  For purposes of this subdivision, charitable purpose includes 
116.34  the maintenance of a cemetery owned by a religious organization. 
116.35     (b) This exemption does not apply to the following sales: 
116.36     (1) building, construction, or reconstruction materials 
117.1   purchased by a contractor or a subcontractor as a part of a 
117.2   lump-sum contract or similar type of contract with a guaranteed 
117.3   maximum price covering both labor and materials for use in the 
117.4   construction, alteration, or repair of a building or facility; 
117.5      (2) construction materials purchased by tax-exempt entities 
117.6   or their contractors to be used in constructing buildings or 
117.7   facilities that will not be used principally by the tax-exempt 
117.8   entities; and 
117.9      (3) meals and lodging as defined under section 297A.61, 
117.10  subdivisions subdivision 3, paragraph paragraphs (d), and 
117.11  16 (g), paragraph (c) clause (2); and 
117.12     (4) leasing of a motor vehicle as defined in section 
117.13  297B.01, subdivision 5, except as provided in paragraph (c). 
117.14     (c) This exemption applies to the leasing of a motor 
117.15  vehicle as defined in section 297B.01, subdivision 5, only if 
117.16  the vehicle is: 
117.17     (1) a truck, as defined in section 168.011, a bus, as 
117.18  defined in section 168.011, or a passenger automobile, as 
117.19  defined in section 168.011, if the automobile is designed and 
117.20  used for carrying more than nine persons including the driver; 
117.21  and 
117.22     (2) intended to be used primarily to transport tangible 
117.23  personal property or individuals, other than employees, to whom 
117.24  the organization provides service in performing its charitable, 
117.25  religious, or educational purpose. 
117.26     (d) A limited liability company also qualifies for 
117.27  exemption under this subdivision if (1) it consists of a sole 
117.28  member that would qualify for the exemption, and (2) the items 
117.29  purchased qualify for the exemption. 
117.30     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
117.31  purchases made after June 30, 2001. 
117.32     Sec. 52.  Minnesota Statutes 2000, section 297A.70, 
117.33  subdivision 7, is amended to read: 
117.34     Subd. 7.  [HOSPITALS AND OUTPATIENT SURGICAL CENTERS.] (a) 
117.35  Sales, except for those listed in paragraph (c), to a hospital 
117.36  are exempt, if the items purchased are used in providing 
118.1   hospital services.  For purposes of this subdivision, "hospital" 
118.2   means a hospital organized and operated for charitable purposes 
118.3   within the meaning of section 501(c)(3) of the Internal Revenue 
118.4   Code, and licensed under chapter 144 or by any other 
118.5   jurisdiction, and "hospital services" are services authorized or 
118.6   required to be performed by a "hospital" under chapter 144. 
118.7      (b) Sales, except for those listed in paragraph (c), to an 
118.8   outpatient surgical center are exempt, if the items purchased 
118.9   are used in providing outpatient surgical services.  For 
118.10  purposes of this subdivision, "outpatient surgical center" means 
118.11  an outpatient surgical center organized and operated for 
118.12  charitable purposes within the meaning of section 501(c)(3) of 
118.13  the Internal Revenue Code, and licensed under chapter 144 or by 
118.14  any other jurisdiction.  For the purposes of this subdivision, 
118.15  "outpatient surgical services" means:  (1) services authorized 
118.16  or required to be performed by an outpatient surgical center 
118.17  under chapter 144 or under the applicable licensure law of any 
118.18  other jurisdiction; and (2) urgent care.  For purposes of this 
118.19  subdivision, "urgent care" means health services furnished to a 
118.20  person whose medical condition is sufficiently acute to require 
118.21  treatment unavailable through, or inappropriate to be provided 
118.22  by, a clinic or physician's office, but not so acute as to 
118.23  require treatment in a hospital emergency room.  
118.24     (c) This exemption does not apply to the following products 
118.25  and services: 
118.26     (1) purchases made by a clinic, physician's office, or any 
118.27  other medical facility not operating as a hospital or outpatient 
118.28  surgical center, even though the clinic, office, or facility may 
118.29  be owned and operated by a hospital or outpatient surgical 
118.30  center; 
118.31     (2) sales under section 297A.61, subdivisions 3, paragraph 
118.32  (d), and 16, paragraph (c); 
118.33     (3) building and construction materials used in 
118.34  constructing buildings or facilities that will not be used 
118.35  principally by the hospital or outpatient surgical center; 
118.36     (4) building, construction, or reconstruction materials 
119.1   purchased by a contractor or a subcontractor as a part of a 
119.2   lump-sum contract or similar type of contract with a guaranteed 
119.3   maximum price covering both labor and materials for use in the 
119.4   construction, alteration, or repair of a hospital or outpatient 
119.5   surgical center; or 
119.6      (5) the leasing of a motor vehicle as defined in section 
119.7   297B.01, subdivision 5. 
119.8      (d) A limited liability company also qualifies for 
119.9   exemption under this subdivision if (1) it consists of a sole 
119.10  member that would qualify for the exemption, and (2) the items 
119.11  purchased qualify for the exemption. 
119.12     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
119.13  purchases made after June 30, 2001. 
119.14     Sec. 53.  Minnesota Statutes 2000, section 297A.70, 
119.15  subdivision 8, is amended to read: 
119.16     Subd. 8.  [REGIONWIDE PUBLIC SAFETY RADIO COMMUNICATION 
119.17  SYSTEM; PRODUCTS AND SERVICES.] Products and services including, 
119.18  but not limited to, end user equipment used for construction, 
119.19  ownership, operation, maintenance, and enhancement of the 
119.20  backbone system of the regionwide public safety radio 
119.21  communication system established under sections 473.891 to 
119.22  473.905, are exempt.  For purposes of this subdivision, backbone 
119.23  system is defined in section 473.891, subdivision 9.  This 
119.24  subdivision is effective for purchases, sales, storage, use, or 
119.25  consumption occurring before August 1, 2003, in the counties of 
119.26  Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. 
119.27     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
119.28  purchases made after June 30, 2001. 
119.29     Sec. 54.  Minnesota Statutes 2000, section 297A.70, 
119.30  subdivision 13, is amended to read: 
119.31     Subd. 13.  [FUNDRAISING SALES BY OR FOR NONPROFIT GROUPS.] 
119.32  (a) The following sales by the specified organizations for 
119.33  fundraising purposes are exempt, subject to the limitations 
119.34  listed in paragraph (b): 
119.35     (1) all sales made by an organization that exists solely 
119.36  for the purpose of providing educational or social activities 
120.1   for young people primarily age 18 and under; 
120.2      (2) all sales made by an organization that is a senior 
120.3   citizen group or association of groups if (i) in general it 
120.4   limits membership to persons age 55 or older; (ii) it is 
120.5   organized and operated exclusively for pleasure, recreation, and 
120.6   other nonprofit purposes; and (iii) no part of its net earnings 
120.7   inures to the benefit of any private shareholders; 
120.8      (3) the sale or use of tickets or admissions to a golf 
120.9   tournament held in Minnesota if the beneficiary of the 
120.10  tournament's net proceeds qualifies as a tax-exempt organization 
120.11  under section 501(c)(3) of the Internal Revenue Code; and 
120.12     (4) sales of gum, candy, and candy products sold for 
120.13  fundraising purposes by a nonprofit organization that provides 
120.14  educational and social activities primarily for young people age 
120.15  18 years of age and under. 
120.16     (b) The exemptions listed in paragraph (a) are limited in 
120.17  the following manner: 
120.18     (1) the exemption under paragraph (a), clauses (1) and (2), 
120.19  applies only if the gross annual receipts of the organization 
120.20  from fundraising do not exceed $10,000; and 
120.21     (2) the exemption under paragraph (a), clause (1), does not 
120.22  apply if the sales are derived from admission charges or from 
120.23  activities for which the money must be deposited with the school 
120.24  district treasurer under section 123B.49, subdivision 2, or be 
120.25  recorded in the same manner as other revenues or expenditures of 
120.26  the school district under section 123B.49, subdivision 4. 
120.27     (c) Sales of tangible personal property are exempt if the 
120.28  entire proceeds, less the necessary expenses for obtaining the 
120.29  property, will be contributed to a registered combined 
120.30  charitable organization described in section 309.501, to be used 
120.31  exclusively for charitable, religious, or educational purposes, 
120.32  and the registered combined charitable organization has given 
120.33  its written permission for the sale.  Sales that occur over a 
120.34  period of more than 24 days per year are not exempt under this 
120.35  paragraph. 
120.36     (d) For purposes of this subdivision, a club, association, 
121.1   or other organization of elementary or secondary school students 
121.2   organized for the purpose of carrying on sports, educational, or 
121.3   other extracurricular activities is a separate organization from 
121.4   the school district or school for purposes of applying the 
121.5   $10,000 limit. 
121.6      <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
121.7   purchases made after June 30, 2001. 
121.8      Sec. 55.  Minnesota Statutes 2000, section 297A.70, 
121.9   subdivision 14, is amended to read: 
121.10     Subd. 14.  [FUNDRAISING EVENTS SPONSORED BY NONPROFIT 
121.11  GROUPS.] (a) Sales of tangible personal property at, and 
121.12  admission charges for fundraising events sponsored by, a 
121.13  nonprofit organization are exempt if the entire proceeds, less 
121.14  the necessary expenses for the event, will be used solely and 
121.15  exclusively for charitable, religious, or educational purposes.  
121.16  Exempt sales include the sale of food, meals, and drinks, and 
121.17  taxable services at the fundraising event. 
121.18     (b) This exemption is limited in the following manner: 
121.19     (1) it does not apply to admission charges for events 
121.20  involving bingo or other gambling activities or to charges for 
121.21  use of amusement devices involving bingo or other gambling 
121.22  activities; 
121.23     (2) all gross receipts are taxable if the profits are not 
121.24  used solely and exclusively for charitable, religious, or 
121.25  educational purposes; 
121.26     (3) it does not apply unless the organization keeps a 
121.27  separate accounting record, including receipts and disbursements 
121.28  from each fundraising event that documents all deductions from 
121.29  gross receipts with receipts and other records; 
121.30     (4) it does not apply to any sale made by or in the name of 
121.31  a nonprofit corporation as the active or passive agent of a 
121.32  person that is not a nonprofit corporation; 
121.33     (5) all gross receipts are taxable if fundraising events 
121.34  exceed 24 days per year; and 
121.35     (6) it does not apply to fundraising events conducted on 
121.36  premises leased for more than five days but less than 30 days. 
122.1      (c) For purposes of this subdivision, a "nonprofit 
122.2   organization" means any unit of government, corporation, 
122.3   society, association, foundation, or institution organized and 
122.4   operated for charitable, religious, educational, civic, 
122.5   fraternal, and senior citizens' or veterans' purposes, no part 
122.6   of the net earnings of which inures to the benefit of a private 
122.7   individual. 
122.8      <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
122.9   purchases made after June 30, 2001. 
122.10     Sec. 56.  Minnesota Statutes 2000, section 297A.71, 
122.11  subdivision 6, is amended to read: 
122.12     Subd. 6.  [BUSINESS INCUBATOR AND INDUSTRIAL PARK.] 
122.13  Building materials and supplies for construction of a facility 
122.14  that includes a business incubator and industrial park are 
122.15  exempt if the facility: 
122.16     (1) is owned and operated by a nonprofit charitable 
122.17  organization that qualifies for tax exemption under section 
122.18  501(c)(3) of the Internal Revenue Code; 
122.19     (2) is used for the development of nonretail businesses, 
122.20  offering access to equipment, space, services, and advice to the 
122.21  tenant businesses, for the purpose of encouraging economic 
122.22  development and job creation in the area served by the 
122.23  organization, and emphasizes development of businesses that 
122.24  manufacture products from materials found in the waste stream, 
122.25  or manufacture alternative energy and conservation systems, or 
122.26  make use of emerging environmental technologies; 
122.27     (3) includes in its structure systems of material and 
122.28  energy exchanges that use waste products from one industrial 
122.29  process as sources of energy and material for other processes; 
122.30  and 
122.31     (4) makes use of solar and wind energy technology and 
122.32  incorporates salvaged materials in its construction. 
122.33     A limited liability company also qualifies for exemption 
122.34  under this subdivision if (1) it consists of a sole member that 
122.35  would qualify for the exemption, and (2) the items purchased 
122.36  qualify for the exemption. 
123.1      <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
123.2   purchases made after June 30, 2001. 
123.3      Sec. 57.  Minnesota Statutes 2000, section 297A.72, 
123.4   subdivision 1, is amended to read: 
123.5      Subdivision 1.  [DUTY OF RETAILER.] An A fully completed 
123.6   exemption certificate conclusively relieves the retailer from 
123.7   collecting and remitting the tax only if taken in good faith 
123.8   from the purchaser at the time of sale. 
123.9      <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
123.10  purchases occurring after December 31, 2001. 
123.11     Sec. 58.  Minnesota Statutes 2000, section 297A.75, is 
123.12  amended to read: 
123.13     297A.75 [REFUND; APPROPRIATION.] 
123.14     Subdivision 1.  [TAX COLLECTED.] The tax on the gross 
123.15  receipts from the sale of the following exempt items must be 
123.16  imposed and collected as if the sale were taxable and the rate 
123.17  under section 297A.62, subdivision 1, applied.  The exempt items 
123.18  include: 
123.19     (1) capital equipment exempt under section 297A.68, 
123.20  subdivision 5; 
123.21     (2) building materials for an agricultural processing 
123.22  facility exempt under section 297A.71, subdivision 13; 
123.23     (3) building materials for mineral production facilities 
123.24  exempt under section 297A.71, subdivision 14; 
123.25     (4) building materials for correctional facilities under 
123.26  section 297A.71, subdivision 3; 
123.27     (5) building materials used in a residence for disabled 
123.28  veterans exempt under section 297A.71, subdivision 11; and 
123.29     (6) chair lifts, ramps, elevators, and associated building 
123.30  materials exempt under section 297A.71, subdivision 12; and 
123.31     (7) building materials for the Long Lake Conservation 
123.32  Center exempt under section 297A.71, subdivision 17. 
123.33     Subd. 2.  [REFUND; ELIGIBLE PERSONS.] Upon application on 
123.34  forms prescribed by the commissioner, a refund equal to the tax 
123.35  paid on the gross receipts of the exempt items must be paid to 
123.36  the applicant.  Only the following persons may apply for the 
124.1   refund: 
124.2      (1) for subdivision 1, clauses (1) to (3), the applicant 
124.3   must be the purchaser; 
124.4      (2) for subdivision 1, clause clauses (4) and (7), the 
124.5   applicant must be the governmental subdivision; 
124.6      (3) for subdivision 1, clause (5), the applicant must be 
124.7   the recipient of the benefits provided in United States Code, 
124.8   title 38, chapter 21; and 
124.9      (4) for subdivision 1, clause (6), the applicant must be 
124.10  the owner of the homestead property. 
124.11     Subd. 3.  [APPLICATION.] (a) The application must include 
124.12  sufficient information to permit the commissioner to verify the 
124.13  tax paid.  If the tax was paid by a contractor, subcontractor, 
124.14  or builder, under subdivision 1, clause (4), (5), or (6), or 
124.15  (7), the contractor, subcontractor, or builder must furnish to 
124.16  the refund applicant a statement including the cost of the 
124.17  exempt items and the taxes paid on the items unless otherwise 
124.18  specifically provided by this subdivision.  The provisions of 
124.19  sections 289A.40 and 289A.50 apply to refunds under this section.
124.20     (b) An applicant may not file more than two applications 
124.21  per calendar year for refunds for taxes paid on capital 
124.22  equipment exempt under section 297A.68, subdivision 5.  
124.23     Subd. 4.  [INTEREST.] Interest must be paid on the refund 
124.24  at the rate in section 270.76 from the date the refund claim is 
124.25  filed for taxes paid under subdivision 1, clauses (1) to (3), 
124.26  and (5), and from 60 days after the date the refund claim is 
124.27  filed with the commissioner for claims filed under subdivision 
124.28  1, clauses (4) and, (6), and (7). 
124.29     Subd. 5.  [APPROPRIATION.] The amount required to make the 
124.30  refunds is annually appropriated to the commissioner. 
124.31     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
124.32  purchases made after June 30, 2001. 
124.33     Sec. 59.  Minnesota Statutes 2000, section 297A.77, 
124.34  subdivision 1, is amended to read: 
124.35     Subdivision 1.  [COLLECTION OF TAX AT TIME OF SALE.] The 
124.36  tax must be stated and charged separately from the sales 
125.1   price or charge for service insofar as practicable and must be 
125.2   collected by the seller from the purchaser.  
125.3      <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
125.4   purchases made after June 30, 2001. 
125.5      Sec. 60.  Minnesota Statutes 2000, section 297A.80, is 
125.6   amended to read: 
125.7      297A.80 [TAXES IN OTHER STATES; OFFSET AGAINST USE TAX.] 
125.8      If an article of tangible personal property or an item 
125.9   listed in section 297A.63 has already been taxed by another 
125.10  state and any subdivision thereof for its sale, storage, use, or 
125.11  other consumption in an amount less than the tax imposed by this 
125.12  chapter, then as to the person who paid the tax in the other 
125.13  state or any subdivision thereof, section 297A.63 applies only 
125.14  at a rate measured by the difference between the rate imposed 
125.15  under section 297A.62 and the rate by which the previous tax was 
125.16  computed.  If the tax imposed in the other state or any 
125.17  subdivision thereof is equal to or greater than the tax imposed 
125.18  in this state, then no tax is due from that person under section 
125.19  297A.63.  The credit shall be applied first against the amount 
125.20  of any use tax due the state, and any unused portion of the 
125.21  credit shall then be applied against any use tax due a 
125.22  subdivision. 
125.23     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
125.24  purchases occurring after December 31, 2001. 
125.25     Sec. 61.  Minnesota Statutes 2000, section 297A.86, 
125.26  subdivision 1, is amended to read: 
125.27     Subdivision 1.  [NOTICE OF REVOCATION; HEARINGS.] (a) If:  
125.28  (1) a person fails to comply with this chapter or the sales and 
125.29  use tax provisions of chapter 289A or the rules adopted under 
125.30  either chapter related to sales tax, or (2) any retailer 
125.31  purchases for resale from an unlicensed seller more than 20,000 
125.32  cigarettes or $500 or more worth of tobacco products, without 
125.33  reasonable cause, the commissioner may give the person 30 days' 
125.34  notice in writing, specifying the violations, and stating that 
125.35  based on the violations the commissioner intends to revoke the 
125.36  person's permit.  The notice must also advise the person of the 
126.1   right to contest the revocation under this subdivision.  It must 
126.2   also explain the general procedures for a contested case hearing 
126.3   under chapter 14.  The notice may be served personally or by 
126.4   mail in the manner prescribed for service of an order of 
126.5   assessment. 
126.6      (b) If the person does not request a hearing within 30 days 
126.7   after the date of the notice of intent, the commissioner may 
126.8   serve a notice of revocation of permit upon the person, and the 
126.9   permit is revoked.  If a hearing is timely requested, and held, 
126.10  the permit is revoked after the commissioner serves an order of 
126.11  revocation of permit under section 14.62, subdivision 1. 
126.12     <b>[EFFECTIVE DATE.]</b> This section is effective for violations 
126.13  occurring on or after August 1, 2001. 
126.14     Sec. 62.  Minnesota Statutes 2000, section 297A.89, 
126.15  subdivision 1, is amended to read: 
126.16     Subdivision 1.  [COMMISSIONER MAY PERMIT.] The commissioner 
126.17  may permit purchasers to pay taxes imposed by this chapter 
126.18  directly to the commissioner.  Any taxes paid by purchasers 
126.19  under this section are considered use taxes, except for local 
126.20  sales taxes when no corresponding local use tax is imposed.  
126.21     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
126.22  purchases made after June 30, 2001. 
126.23     Sec. 63.  Minnesota Statutes 2000, section 297A.90, 
126.24  subdivision 1, is amended to read: 
126.25     Subdivision 1.  [REGISTRATION; RECORDS.] (a) A person who 
126.26  is engaged in interstate for-hire transportation of tangible 
126.27  personal property or passengers by motor vehicle may, under 
126.28  rules prescribed by the commissioner, register as a retailer and 
126.29  pay the taxes imposed by this chapter in accordance with this 
126.30  section.  Any taxes paid under this section are use taxes, 
126.31  except local sales taxes when no corresponding local use tax is 
126.32  imposed. 
126.33     (b) As used in this section, "person" means:  
126.34     (1) one who possesses a certificate or permit or has 
126.35  completed a registration process that authorizes for-hire 
126.36  transportation of property or passengers from the United States 
127.1   Department of Transportation, the transportation regulation 
127.2   board, or the department of transportation; 
127.3      (2) one who transports commodities defined as "exempt" in 
127.4   for-hire transportation in interstate commerce; or 
127.5      (3) one who transports tangible personal property in 
127.6   interstate commerce, pursuant to contracts with persons 
127.7   described in clause (1) or (2).  
127.8   Persons qualifying under clause (2) or (3) must maintain on a 
127.9   current basis the same type of mileage records that are required 
127.10  by persons specified in clause (1) by the United States 
127.11  Department of Transportation.  
127.12     (c) Persons who in the course of their business are 
127.13  transporting solely their own goods in interstate commerce may 
127.14  also register as retailers under rules prescribed by the 
127.15  commissioner and pay the taxes imposed by this chapter in 
127.16  accordance with this section.  
127.17     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes paid 
127.18  after June 30, 2001. 
127.19     Sec. 64.  Minnesota Statutes 2000, section 297A.91, 
127.20  subdivision 1, is amended to read: 
127.21     Subdivision 1.  [SEIZURE OF PROPERTY USED IN ILLEGAL 
127.22  TRANSPORT.] (a) If the retailer does not have a sales or use tax 
127.23  permit and has been engaging in transporting personal property 
127.24  into the state without payment of the tax, the commissioner of 
127.25  revenue or the commissioner's agents may seize in the name of 
127.26  the state any truck, automobile, or means of transportation not 
127.27  owned or operated by a common for-hire carrier, used in the 
127.28  illegal importation and transportation of any tangible personal 
127.29  property by a retailer or the retailer's agent or employee.  The 
127.30  commissioner may demand the forfeiture and sale of the truck, 
127.31  automobile, or other means of transportation together with the 
127.32  property being transported illegally, unless the owner 
127.33  establishes to the satisfaction of the commissioner or the court 
127.34  that the owner had no notice or knowledge or reason to believe 
127.35  that the vehicle was used or intended to be used in any such 
127.36  violation. 
128.1      (b) Within two days after the seizure, the person making 
128.2   the seizure shall deliver an inventory of the vehicle and 
128.3   property seized to the person from whom the seizure was made, if 
128.4   known, and to any person known or believed to have any right, 
128.5   title, interest, or lien on the vehicle or property.  The person 
128.6   making the seizure shall also file a copy of the inventory with 
128.7   the commissioner.  
128.8      <b>[EFFECTIVE DATE.]</b> This section is effective for seizures 
128.9   made after June 30, 2001. 
128.10     Sec. 65.  Minnesota Statutes 2000, section 297A.92, 
128.11  subdivision 2, is amended to read: 
128.12     Subd. 2.  [AUCTIONS OF SECURITY.] The commissioner may sell 
128.13  property deposited as security at public auction if necessary to 
128.14  recover the amount required to be collected, including any 
128.15  interest and penalties.  Notice of the sale must be served upon 
128.16  the person who deposited the security.  It must be served 
128.17  personally, or by mail as prescribed for the service of a notice 
128.18  of a deficiency an order of assessment under section 289A.37, 
128.19  subdivision 5.  After a sale any surplus above the amount due 
128.20  not required as security under this section must be returned to 
128.21  the person who deposited the security. 
128.22     <b>[EFFECTIVE DATE.]</b> This section is effective for auctions 
128.23  held after June 30, 2001. 
128.24     Sec. 66.  Minnesota Statutes 2000, section 297A.94, as 
128.25  amended by Laws 2001, chapter 185, section 33, is amended to 
128.26  read: 
128.27     297A.94 [DEPOSIT OF REVENUES.] 
128.28     (a) Except as provided in this section, the commissioner 
128.29  shall deposit the revenues, including interest and penalties, 
128.30  derived from the taxes imposed by this chapter in the state 
128.31  treasury and credit them to the general fund.  
128.32     (b) The commissioner shall deposit taxes in the Minnesota 
128.33  agricultural and economic account in the special revenue fund if:
128.34     (1) the taxes are derived from sales and use of property 
128.35  and services purchased for the construction and operation of an 
128.36  agricultural resource project; and 
129.1      (2) the purchase was made on or after the date on which a 
129.2   conditional commitment was made for a loan guaranty for the 
129.3   project under section 41A.04, subdivision 3. 
129.4   The commissioner of finance shall certify to the commissioner 
129.5   the date on which the project received the conditional 
129.6   commitment.  The amount deposited in the loan guaranty account 
129.7   must be reduced by any refunds and by the costs incurred by the 
129.8   department of revenue to administer and enforce the assessment 
129.9   and collection of the taxes.  
129.10     (c) The commissioner shall deposit the revenues, including 
129.11  interest and penalties, derived from the taxes imposed on sales 
129.12  and purchases included in section 297A.61, subdivision 16, 
129.13  paragraphs (b) and (f) 3, paragraph (g), clauses (1) and (5), in 
129.14  the state treasury, and credit them as follows: 
129.15     (1) first to the general obligation special tax bond debt 
129.16  service account in each fiscal year the amount required by 
129.17  section 16A.661, subdivision 3, paragraph (b); and 
129.18     (2) after the requirements of clause (1) have been met, the 
129.19  balance to the general fund. 
129.20     (d) The commissioner shall deposit the revenues, including 
129.21  interest and penalties, collected under section 297A.64, 
129.22  subdivision 5, in the state treasury and credit them to the 
129.23  general fund.  By July 15 of each year the commissioner shall 
129.24  transfer to the highway user tax distribution fund an amount 
129.25  equal to the excess fees collected under section 297A.64, 
129.26  subdivision 5, for the previous calendar year. 
129.27     (e) For fiscal year 2001, 97 percent, and for fiscal year 
129.28  2002 and thereafter, 87 percent of the revenues, including 
129.29  interest and penalties, transmitted to the commissioner under 
129.30  section 297A.65, must be deposited by the commissioner in the 
129.31  state treasury as follows: 
129.32     (1) 50 percent of the receipts must be deposited in the 
129.33  heritage enhancement account in the game and fish fund, and may 
129.34  be spent only on activities that improve, enhance, or protect 
129.35  fish and wildlife resources, including conservation, 
129.36  restoration, and enhancement of land, water, and other natural 
130.1   resources of the state; 
130.2      (2) 22.5 percent of the receipts must be deposited in the 
130.3   natural resources fund, and may be spent only for state parks 
130.4   and trails; 
130.5      (3) 22.5 percent of the receipts must be deposited in the 
130.6   natural resources fund, and may be spent only on metropolitan 
130.7   park and trail grants; 
130.8      (4) three percent of the receipts must be deposited in the 
130.9   natural resources fund, and may be spent only on local trail 
130.10  grants; and 
130.11     (5) two percent of the receipts must be deposited in the 
130.12  natural resources fund, and may be spent only for the Minnesota 
130.13  zoological garden, the Como park zoo and conservatory, and the 
130.14  Duluth zoo. 
130.15     (f) The revenue dedicated under paragraph (e) may not be 
130.16  used as a substitute for traditional sources of funding for the 
130.17  purposes specified, but the dedicated revenue shall supplement 
130.18  traditional sources of funding for those purposes.  Land 
130.19  acquired with money deposited in the game and fish fund under 
130.20  paragraph (e) must be open to public hunting and fishing during 
130.21  the open season, except that in aquatic management areas or on 
130.22  lands where angling easements have been acquired, fishing may be 
130.23  prohibited during certain times of the year and hunting may be 
130.24  prohibited.  At least 87 percent of the money deposited in the 
130.25  game and fish fund for improvement, enhancement, or protection 
130.26  of fish and wildlife resources under paragraph (e) must be 
130.27  allocated for field operations. 
130.28     <b>[EFFECTIVE DATE.]</b> This section is effective for revenues 
130.29  deposited after June 30, 2001. 
130.30     Sec. 67.  Minnesota Statutes 2000, section 297A.99, 
130.31  subdivision 7, is amended to read: 
130.32     Subd. 7.  [EXEMPTIONS.] (a) All goods or services that are 
130.33  otherwise exempt from taxation under this chapter are exempt 
130.34  from a political subdivision's tax. 
130.35     (b) The gross receipts from the sale of tangible personal 
130.36  property that meets the requirement of section 297A.68, 
131.1   subdivision 13 or 14 15, are exempt, except the qualification 
131.2   test applies based on the boundaries of the political 
131.3   subdivision instead of the state of Minnesota. 
131.4      (c) All mobile transportation equipment, and parts and 
131.5   accessories attached to or to be attached to the equipment are 
131.6   exempt, if purchased by a holder of a motor carrier direct pay 
131.7   permit under section 297A.90.  
131.8      <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
131.9   purchases made after June 30, 2001. 
131.10     Sec. 68.  Minnesota Statutes 2000, section 297A.99, 
131.11  subdivision 9, is amended to read: 
131.12     Subd. 9.  [ENFORCEMENT; COLLECTION; AND ADMINISTRATION.] 
131.13  (a) The commissioner of revenue shall collect the taxes subject 
131.14  to this section.  The commissioner may collect the tax with the 
131.15  state sales and use tax.  All taxes under this section are 
131.16  subject to the same penalties, interest, and enforcement 
131.17  provisions as apply to the state sales and use tax. 
131.18     (b) A request for a refund of state sales tax paid in 
131.19  excess of the amount of tax legally due includes a request for a 
131.20  refund of the political subdivision taxes paid on the goods or 
131.21  services.  The commissioner shall refund to the taxpayer the 
131.22  full amount of the political subdivision taxes paid on exempt 
131.23  sales or use. 
131.24     (c) A political subdivision that is collecting and 
131.25  administering its own sales and use tax before January 1, 1998, 
131.26  may elect to be exempt from this subdivision and subdivision 11. 
131.27     <b>[EFFECTIVE DATE.]</b> This section is effective January 1, 2003.
131.28     Sec. 69.  Minnesota Statutes 2000, section 297A.99, 
131.29  subdivision 11, is amended to read: 
131.30     Subd. 11.  [REVENUES; COST OF COLLECTION.] The commissioner 
131.31  shall remit the proceeds of the tax, less refunds and a 
131.32  proportionate share of the cost of collection, at least 
131.33  quarterly, to the political subdivision.  The commissioner shall 
131.34  deduct from the proceeds remitted an amount that equals 
131.35     (1) the direct and indirect costs of the department to 
131.36  administer, audit, and collect the political subdivision's tax, 
132.1   plus 
132.2      (2) the political subdivision's proportionate share of the 
132.3   indirect cost of administering all taxes under this section, 
132.4   plus 
132.5      (3) the cost of constructing and maintaining a zip code or 
132.6   geo-code data base necessary for local sales tax collections 
132.7   under the Streamlined Sales and Use Tax Agreement in section 
132.8   297A.995. 
132.9      The initial cost of constructing a data base under clause 
132.10  (3) shall be distributed among the cities with a local sales tax 
132.11  based on each city's population.  The commissioner shall develop 
132.12  a method for distributing the cost of maintaining the data base 
132.13  among the cities with a local sales tax based on the number of 
132.14  boundary changes for each city. 
132.15     <b>[EFFECTIVE DATE.]</b> This section is effective for payments to 
132.16  political subdivisions made after June 30, 2001, for costs 
132.17  incurred after June 30, 2001. 
132.18     Sec. 70.  [297A.995] [UNIFORM SALES AND USE TAX 
132.19  ADMINISTRATION ACT.] 
132.20     Subdivision 1.  [TITLE.] This section may be cited as the 
132.21  Uniform Sales and Use Tax Administration Act. 
132.22     Subd. 2.  [DEFINITIONS.] As used in this section: 
132.23     (a) "Agreement" means the Streamlined Sales and Use Tax 
132.24  Agreement. 
132.25     (b) "Certified automated system" means software certified 
132.26  jointly by the states that are signatories to the agreement to 
132.27  calculate the tax imposed by each jurisdiction on a transaction, 
132.28  determine the amount of tax to remit to the appropriate state, 
132.29  and maintain a record of the transaction. 
132.30     (c) "Certified service provider" means an agent certified 
132.31  jointly by the states that are signatories to the agreement to 
132.32  perform all of the seller's sales tax functions. 
132.33     Subd. 3.  [LEGISLATIVE FINDING.] The legislature finds that 
132.34  this state should enter into an agreement with one or more 
132.35  states to simplify and modernize sales and use tax 
132.36  administration in order to substantially reduce the burden of 
133.1   tax compliance for all sellers and for all types of commerce. 
133.2      Subd. 4.  [AUTHORITY TO ENTER AGREEMENT.] The commissioner 
133.3   of revenue is authorized and directed to enter into the 
133.4   agreement with one or more states to simplify and modernize 
133.5   sales and use tax administration in order to substantially 
133.6   reduce the burden of tax compliance for all sellers and for all 
133.7   types of commerce.  In furtherance of the agreement, the 
133.8   commissioner is authorized to act jointly with other states that 
133.9   are members of the agreement to establish standards for 
133.10  certification of a certified service provider and certified 
133.11  automated system and establish performance standards for 
133.12  multistate sellers. 
133.13     The commissioner is further authorized to take other 
133.14  actions reasonably required to implement the provisions set 
133.15  forth in this article.  Other actions authorized by this section 
133.16  include, but are not limited to, the adoption of rules and 
133.17  regulations and the joint procurement, with other member states, 
133.18  of goods and services in furtherance of the cooperative 
133.19  agreement. 
133.20     The commissioner or the commissioner's designee is 
133.21  authorized to represent this state before the other states that 
133.22  are signatories to the agreement. 
133.23     Subd. 5.  [RELATIONSHIP TO STATE LAW.] No provision of the 
133.24  agreement authorized by this bill in whole or part invalidates 
133.25  or amends any provision of the law of this state.  Adoption of 
133.26  the agreement by this state does not amend or modify any law of 
133.27  this state.  Implementation of any condition of the agreement in 
133.28  this state, whether adopted before, at, or after membership of 
133.29  this state in the agreement, must be by the action of this state.
133.30     Subd. 6.  [AGREEMENT REQUIREMENTS.] The commissioner of 
133.31  revenue shall not enter into the agreement unless the agreement 
133.32  requires each state to abide by the following requirements: 
133.33     (a) [UNIFORM STATE RATE.] The agreement must set 
133.34  restrictions to achieve more uniform state rates through the 
133.35  following: 
133.36     (1) limiting the number of state rates; 
134.1      (2) eliminating maximums on the amount of state tax that is 
134.2   due on a transaction; and 
134.3      (3) eliminating thresholds on the application of state tax. 
134.4      (b) [UNIFORM STANDARDS.] The agreement must establish 
134.5   uniform standards for the following: 
134.6      (1) the sourcing of transactions to taxing jurisdictions; 
134.7      (2) the administration of exempt sales; 
134.8      (3) the allowances a seller can take for bad debts; and 
134.9      (4) sales and use tax returns and remittances. 
134.10     (c) [UNIFORM DEFINITIONS.] The agreement must require 
134.11  states to develop and adopt uniform definitions of sales and use 
134.12  tax terms.  The definitions must enable a state to preserve its 
134.13  ability to make policy choices not inconsistent with the uniform 
134.14  definitions. 
134.15     (d) [CENTRAL REGISTRATION.] The agreement must provide a 
134.16  central, electronic registration system that allows a seller to 
134.17  register to collect and remit sales and use taxes for all 
134.18  signatory states. 
134.19     (e) [NO NEXUS ATTRIBUTION.] The agreement must provide that 
134.20  registration with the central registration system and the 
134.21  collection of sales and use taxes in the signatory states will 
134.22  not be used as a factor in determining whether the seller has 
134.23  nexus with a state for any tax. 
134.24     (f) [LOCAL SALES AND USE TAXES.] The agreement must provide 
134.25  for reduction of the burdens of complying with local sales and 
134.26  use taxes through the following: 
134.27     (1) restricting and eliminating variances between the state 
134.28  and local tax bases; 
134.29     (2) requiring states to administer any sales and use taxes 
134.30  levied by local jurisdictions within the state so that sellers 
134.31  collecting and remitting these taxes will not have to register 
134.32  or file returns with, remit funds to, or be subject to 
134.33  independent audits from local taxing jurisdictions; 
134.34     (3) restricting the frequency of changes in the local sales 
134.35  and use tax rates and setting effective dates for the 
134.36  application of local jurisdictional boundary changes to local 
135.1   sales and use taxes; and 
135.2      (4) providing notice of changes in local sales and use tax 
135.3   rates and of changes in the boundaries of local taxing 
135.4   jurisdictions. 
135.5      (g) [MONETARY ALLOWANCES.] The agreement must outline any 
135.6   monetary allowances that are to be provided by the states to 
135.7   sellers or certified service providers. 
135.8      (h) [STATE COMPLIANCE.] The agreement must require each 
135.9   state to certify compliance with the terms of the agreement 
135.10  prior to joining and to maintain compliance, under the laws of 
135.11  the member state, with all provisions of the agreement while a 
135.12  member. 
135.13     (i) [CONSUMER PRIVACY.] The agreement must require each 
135.14  state to adopt a uniform policy for certified service providers 
135.15  that protects the privacy of consumers and maintains the 
135.16  confidentiality of tax information. 
135.17     (j) [ADVISORY COUNCILS.] The agreement must provide for the 
135.18  appointment of an advisory council of private sector 
135.19  representatives and an advisory council of nonmember state 
135.20  representatives to consult with in the administration of the 
135.21  agreement. 
135.22     Subd. 7.  [COOPERATING SOVEREIGNS.] The agreement 
135.23  authorized by this bill is an accord among individual 
135.24  cooperating sovereigns in furtherance of their governmental 
135.25  functions.  The agreement provides a mechanism among the member 
135.26  states to establish and maintain a cooperative, simplified 
135.27  system for the application and administration of sales and use 
135.28  taxes under the duly adopted law of each member state. 
135.29     Subd. 8.  [LIMITED BINDING AND BENEFICIAL EFFECT.] (a) The 
135.30  agreement authorized by this bill binds and inures only to the 
135.31  benefit of this state and the other member states.  No person, 
135.32  other than a member state, is an intended beneficiary of the 
135.33  agreement.  Any benefit to a person other than a state is 
135.34  established by the law of this state and the other member states 
135.35  and not by the terms of the agreement. 
135.36     (b) Consistent with paragraph (a), no person shall have any 
136.1   cause of action or defense under the agreement or by virtue of 
136.2   this state's approval of the agreement.  No person may 
136.3   challenge, in any action brought under any provision of law, any 
136.4   action or inaction by any department, agency, or other 
136.5   instrumentality of this state, or any political subdivision of 
136.6   this state, on the ground that the action or inaction is 
136.7   inconsistent with the agreement. 
136.8      (c) No law of this state, or its application, may be 
136.9   declared invalid as to any person or circumstance on the ground 
136.10  that the provision or application is inconsistent with the 
136.11  agreement. 
136.12     Subd. 9.  [SELLER AND THIRD-PARTY LIABILITY.] (a) A 
136.13  certified service provider is the agent of a seller, with whom 
136.14  the certified service provider has contracted, for the 
136.15  collection and remittance of sales and use taxes.  As the 
136.16  seller's agent, the certified service provider is liable for 
136.17  sales and use tax due each member state on all sales 
136.18  transactions it processes for the seller except as set out in 
136.19  this section. 
136.20     A seller that contracts with a certified service provider 
136.21  is not liable to the state for sales or use tax due on 
136.22  transactions processed by the certified service provider unless 
136.23  the seller misrepresented the type of items it sells or 
136.24  committed fraud.  In the absence of probable cause to believe 
136.25  that the seller has committed fraud or made a material 
136.26  misrepresentation, the seller is not subject to audit on the 
136.27  transactions processed by the certified service provider.  A 
136.28  seller is subject to audit for transactions not processed by the 
136.29  certified service provider.  The member states acting jointly 
136.30  may perform a system check of the seller and review the seller's 
136.31  procedures to determine if the certified service provider's 
136.32  system is functioning properly and the extent to which the 
136.33  seller's transactions are being processed by the certified 
136.34  service provider. 
136.35     (b) A person that provides a certified automated system is 
136.36  responsible for the proper functioning of that system and is 
137.1   liable to the state for underpayments of tax attributable to 
137.2   errors in the functioning of the certified automated system.  A 
137.3   seller that uses a certified automated system remains 
137.4   responsible and is liable to the state for reporting and 
137.5   remitting tax. 
137.6      (c) A seller that has a proprietary system for determining 
137.7   the amount of tax due on transactions and has signed an 
137.8   agreement establishing a performance standard for that system is 
137.9   liable for the failure of the system to meet the performance 
137.10  standard. 
137.11     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
137.12  following final enactment. 
137.13     Sec. 71.  [297F.185] [REVOCATION OF SALES AND USE TAX 
137.14  PERMITS.] 
137.15     If a retailer purchases for resale from an unlicensed 
137.16  seller more than 20,000 cigarettes or $500 or more worth of 
137.17  tobacco products, the commissioner may revoke the person's sales 
137.18  and use tax permit as provided in section 297A.86. 
137.19     <b>[EFFECTIVE DATE.]</b> This section is effective for violations 
137.20  occurring on or after August 1, 2001. 
137.21     Sec. 72.  Laws 1986, chapter 396, section 5, is amended to 
137.22  read: 
137.23     Sec. 5.  [LIQUOR, LODGING, AND RESTAURANT TAXES.] 
137.24     The city may, by resolution, levy in addition to taxes 
137.25  authorized by other law: 
137.26     (1) a sales tax of not more than three percent on the gross 
137.27  receipts on retail on-sales of intoxicating liquor and fermented 
137.28  malt beverages described in section 473.592 occurring in the 
137.29  downtown taxing area, provided that this tax may not be imposed 
137.30  if sales of intoxicating liquor and fermented malt beverages are 
137.31  exempt from taxation under chapter 297A; 
137.32     (2) a sales tax of not more than three percent on the gross 
137.33  receipts from the furnishing for consideration of lodging 
137.34  described in section 473.592 by a hotel or motel which has more 
137.35  than 50 rooms available for lodging; the tax imposed under this 
137.36  clause shall be at a rate that, when added to the sum of the 
138.1   rate of the sales tax imposed under Minnesota Statutes, chapter 
138.2   297A, the rate of the sales tax imposed under section 4, and the 
138.3   rate of any other taxes on lodging in the city of Minneapolis, 
138.4   equals 12 13 percent; and 
138.5      (3) a sales tax of not more than three percent on the gross 
138.6   receipts on all sales of food primarily for consumption on or 
138.7   off the premises by restaurants and places of refreshment as 
138.8   defined by resolution of the city that occur within the downtown 
138.9   taxing area. 
138.10  These taxes shall be applied solely to pay costs of collection 
138.11  and to pay or secure the payment of any principal of, premium 
138.12  and interest on any bonds or any costs referred to in section 4, 
138.13  subdivision 3.  The commissioner of revenue may enter into 
138.14  appropriate agreements with the city to provide for the 
138.15  collection of these taxes by the state on behalf of the city.  
138.16  The commissioner may charge the city a reasonable fee for its 
138.17  collection from the proceeds of any taxes.  These taxes shall be 
138.18  subject to the same interest penalties and enforcement 
138.19  provisions as the taxes imposed under section 473.592. 
138.20     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
138.21  following final enactment. 
138.22     Sec. 73.  [PLAN FOR REPLACEMENT OF REVENUES RAISED BY 
138.23  CURRENT TAXES ON ALCOHOL.] 
138.24     The commissioner of revenue, in consultation with 
138.25  interested parties from the alcohol beverage industry, shall 
138.26  prepare a plan to replace the current higher sales tax on liquor 
138.27  and beer under Minnesota Statutes, section 297A.62, subdivision 
138.28  2, and the liquor tax under Minnesota Statutes, chapter 297G, 
138.29  with a single tax on liquor.  The commissioner shall report the 
138.30  plan to the legislature by January 1, 2003.  The plan should 
138.31  include recommendations for tax rates, tax base, and tax 
138.32  administration, and should be structured so that the revenue 
138.33  raised is equivalent to the revenue lost from the repeal of the 
138.34  current taxes.  The plan should also, to the extent practical, 
138.35  mirror the current incidence of the tax as it relates to 
138.36  different types of liquor, and whether the liquor is consumed 
139.1   on-site or off-site. 
139.2      <b>[EFFECTIVE DATE.]</b> This section is effective the day after 
139.3   final enactment. 
139.4      Sec. 74.  [PLAN FOR REPLACEMENT OF REVENUES RAISED BY TAXES 
139.5   ON SHORT-TERM MOTOR VEHICLE RENTAL.] 
139.6      The commissioner of revenue, in consultation with 
139.7   interested parties from the industry, shall prepare a plan to 
139.8   replace the current sales tax on short-term motor vehicle 
139.9   rentals under Minnesota Statutes, section 297A.64, with a single 
139.10  tax or fee on motor vehicle rentals.  The commissioner shall 
139.11  report the plan to the legislature by January 1, 2003.  The plan 
139.12  should include recommendations for tax rates, tax base, and tax 
139.13  administration, and should be structured so that the state 
139.14  revenue raised is equivalent to the state revenue lost from the 
139.15  repeal of the current taxes. 
139.16     <b>[EFFECTIVE DATE.]</b> This section is effective the day after 
139.17  final enactment. 
139.18     Sec. 75.  [DIRECTIONS TO COMMISSIONER OF REVENUE.] 
139.19     The commissioner of revenue shall request that the member 
139.20  states of the Streamlined Sales and Use Tax Agreement adopt at 
139.21  their earliest convenience a uniform definition of clothing made 
139.22  from fur. 
139.23     <b>[EFFECTIVE DATE.]</b> This section is effective the day after 
139.24  final enactment. 
139.25     Sec. 76.  [INSTRUCTIONS TO REVISOR.] 
139.26     (a) In the next edition of Minnesota Statutes, the revisor 
139.27  of statutes shall put the definitions in section 297A.68, 
139.28  subdivision 5, paragraph (d), in alphabetical order and correct 
139.29  any references to the reordered definitions. 
139.30     (b) In the next edition of Minnesota Statutes, the revisor 
139.31  of statutes shall renumber section 297A.68, subdivision 27, as 
139.32  297A.67, subdivision 26, and correct any references to the 
139.33  renumbered section. 
139.34     Sec. 77.  [REPEALER.] 
139.35     (a) Minnesota Statutes 2000, sections 297A.61, subdivision 
139.36  16; 297A.68, subdivision 21; and 297A.71, subdivisions 2 and 16, 
140.1   are repealed effective for sales and purchases occurring after 
140.2   June 30, 2001. 
140.3      (b) Minnesota Statutes 2000, sections 297A.62, subdivision 
140.4   2, and 297A.64, subdivision 1, are repealed effective for sales 
140.5   and purchases made after December 31, 2005. 
140.6      (c) Minnesota Statutes 2000, section 297A.71, subdivision 
140.7   15, is repealed effective for sales and purchases made after 
140.8   June 30, 2002. 
140.9      (d) Minnesota Statutes 2000, section 297B.032, is repealed 
140.10  effective the day following final enactment. 
140.11                             ARTICLE 3 
140.12                           SPECIAL TAXES 
140.13     Section 1.  Minnesota Statutes 2000, section 69.021, 
140.14  subdivision 5, as amended by Laws 2001, chapter 7, section 17, 
140.15  is amended to read: 
140.16     Subd. 5.  [CALCULATION OF STATE AID.] (a) The amount of 
140.17  fire state aid available for apportionment, before the addition 
140.18  of the minimum fire state aid allocation amount under 
140.19  subdivision 7, is equal to 107 percent of the amount of premium 
140.20  taxes paid to the state upon the fire, lightning, sprinkler 
140.21  leakage, and extended coverage premiums reported to the 
140.22  commissioner by insurers on the Minnesota Firetown Premium 
140.23  Report.  This amount shall be reduced by the amount required to 
140.24  pay the state auditor's costs and expenses of the audits or 
140.25  exams of the firefighters relief associations. 
140.26     The total amount for apportionment in respect to fire state 
140.27  aid must not be less than two percent of the premiums reported 
140.28  to the commissioner by insurers on the Minnesota Firetown 
140.29  Premium Report after subtracting the following amounts: 
140.30     (1) the amount required to pay the state auditor's costs 
140.31  and expenses of the audits or exams of the firefighters relief 
140.32  associations; and 
140.33     (2) one percent of the premiums reported by town and 
140.34  farmers' mutual insurance companies and mutual property and 
140.35  casualty companies with total assets of $5,000,000 or less.  
140.36     (b) The total amount for apportionment as police state aid 
141.1   is equal to 104 percent of the amount of premium taxes paid to 
141.2   the state on the premiums reported to the commissioner by 
141.3   insurers on the Minnesota Aid to Police Premium Report, plus the 
141.4   payment amounts received under section 297I.05, subdivision 8, 
141.5   since the last aid apportionment, and reduced by the amount 
141.6   required to pay the costs and expenses of the state auditor for 
141.7   audits or exams of police relief associations.  The total amount 
141.8   for apportionment in respect to the police state aid program 
141.9   must not be less than two percent of the amount of premiums 
141.10  reported to the commissioner by insurers on the Minnesota Aid to 
141.11  Police Premium Report after subtracting the amount required to 
141.12  pay the state auditor's cost and expenses of the audits or exams 
141.13  of the police relief associations. 
141.14     (c) The commissioner shall calculate the percentage of 
141.15  increase or decrease reflected in the apportionment over or 
141.16  under the previous year's available state aid using the same 
141.17  premiums as a basis for comparison. 
141.18     (d) The amount for apportionment in respect to peace 
141.19  officer state aid under paragraph (b) must be further reduced by 
141.20  $1,779,000 in fiscal year 1999, $2,077,000 in fiscal year 2000, 
141.21  and $2,404,000 in fiscal year 2001.  These reductions in this 
141.22  paragraph cancel to the general fund. 
141.23     (e) The amount for apportionment of police state aid under 
141.24  paragraph (b) is annually increased by an amount equal to the 
141.25  revenues under the tax on automobile risk self-insurance under 
141.26  Minnesota Statutes 2000, section 297I.05, subdivision 8, that 
141.27  were collected in fiscal year 2001.  An amount sufficient to pay 
141.28  this increase is annually appropriated from the general fund. 
141.29     <b>[EFFECTIVE DATE.]</b> This section is effective beginning with 
141.30  fiscal year 2002. 
141.31     Sec. 2.  Minnesota Statutes 2000, section 168.013, 
141.32  subdivision 1a, is amended to read: 
141.33     Subd. 1a.  [PASSENGER AUTOMOBILE; HEARSE.] (a) On passenger 
141.34  automobiles as defined in section 168.011, subdivision 7, and 
141.35  hearses, except as otherwise provided, the tax shall be $10 plus 
141.36  an additional tax equal to 1.25 percent of the base value.  
142.1      (b) Subject to the classification provisions herein, "base 
142.2   value" means the manufacturer's suggested retail price of the 
142.3   vehicle including destination charge using list price 
142.4   information published by the manufacturer or determined by the 
142.5   registrar if no suggested retail price exists, and shall not 
142.6   include the cost of each accessory or item of optional equipment 
142.7   separately added to the vehicle and the suggested retail price. 
142.8      (c) If the manufacturer's list price information contains a 
142.9   single vehicle identification number followed by various 
142.10  descriptions and suggested retail prices, the registrar shall 
142.11  select from those listings only the lowest price for determining 
142.12  base value. 
142.13     (d) If unable to determine the base value because the 
142.14  vehicle is specially constructed, or for any other reason, the 
142.15  registrar may establish such value upon the cost price to the 
142.16  purchaser or owner as evidenced by a certificate of cost but not 
142.17  including Minnesota sales or use tax or any local sales or other 
142.18  local tax. 
142.19     (e) The registrar shall classify every vehicle in its 
142.20  proper base value class as follows: 
142.21                        FROM                   TO
142.22                        $  0                $199.99
142.23                         200                 399.99
142.24  and thereafter a series of classes successively set in brackets 
142.25  having a spread of $200 consisting of such number of classes as 
142.26  will permit classification of all vehicles. 
142.27     (f) The base value for purposes of this section shall be 
142.28  the middle point between the extremes of its class. 
142.29     (g) The registrar shall establish the base value, when new, 
142.30  of every passenger automobile and hearse registered prior to the 
142.31  effective date of Extra Session Laws 1971, chapter 31, using 
142.32  list price information published by the manufacturer or any 
142.33  nationally recognized firm or association compiling such data 
142.34  for the automotive industry.  If unable to ascertain the base 
142.35  value of any registered vehicle in the foregoing manner, the 
142.36  registrar may use any other available source or method.  The tax 
143.1   on all previously registered vehicles shall be computed upon the 
143.2   base value thus determined taking into account the depreciation 
143.3   provisions of paragraph (h). 
143.4      (h) Except as provided in paragraph (i), The annual 
143.5   additional tax computed upon the base value as provided herein, 
143.6   during the first and second years of vehicle life shall be 
143.7   computed upon 100 percent of the base value; for the third and 
143.8   fourth years, 90 percent of such value; for the fifth and sixth 
143.9   years, 75 percent of such value; for the seventh year, 60 
143.10  percent of such value; for the eighth year, 40 percent of such 
143.11  value; for the ninth year, 30 percent of such value; for the 
143.12  tenth year, ten percent of such value; for the 11th and each 
143.13  succeeding year, the sum of $25.  
143.14  In no event shall the annual additional tax be less than $25.  
143.15  The total tax under this subdivision shall not exceed $189 for 
143.16  the first renewal period and shall not exceed $99 for subsequent 
143.17  renewal periods.  The total tax under this subdivision on any 
143.18  vehicle filing its initial registration in Minnesota in the 
143.19  second year of vehicle life shall not exceed $189 and shall not 
143.20  exceed $99 for subsequent renewal periods.  The total tax under 
143.21  this subdivision on any vehicle filing its initial registration 
143.22  in Minnesota in the third or subsequent year of vehicle life 
143.23  shall not exceed $99 and shall not exceed $99 in any subsequent 
143.24  renewal period. 
143.25     (i) The annual additional tax under paragraph (h) on a 
143.26  motor vehicle on which the first annual tax was paid before 
143.27  January 1, 1990, must not exceed the tax that was paid on that 
143.28  vehicle the year before.  As used in sections 168.013, 
143.29  subdivision 1a and 168.017, the following terms have the 
143.30  meanings given:  "initial registration" means the 12 consecutive 
143.31  month calendar period from the day of first registration of a 
143.32  vehicle in Minnesota; and "renewal periods" means the 12 
143.33  consecutive calendar month periods following the initial 
143.34  registration period. 
143.35     <b>[EFFECTIVE DATE.]</b> This section is effective June 1, 2001, 
143.36  for taxes payable on and after that date. 
144.1      Sec. 3.  Minnesota Statutes 2000, section 168.017, 
144.2   subdivision 3, is amended to read: 
144.3      Subd. 3.  [EXCEPTIONS.] (a) The registrar shall register 
144.4   all vehicles subject to registration under the monthly series 
144.5   system for a period of 12 consecutive calendar months, unless: 
144.6      (1) the application is an original rather than renewal 
144.7   application; or 
144.8      (2) the applicant is a licensed motor vehicle lessor under 
144.9   section 168.27, in which case the applicant may apply for 
144.10  original initial or renewed registration of a vehicle for a 
144.11  period of four or more months, the month of expiration to be 
144.12  designated by the applicant at the time of registration.  
144.13  However, to qualify for this exemption, the applicant must 
144.14  present the application to the registrar at St. Paul, or at 
144.15  deputy registrar offices as the registrar may designate. 
144.16     (b) In any instance except that of a licensed motor vehicle 
144.17  lessor, the registrar shall not approve registering the vehicle 
144.18  subject to the application for a period of less than three 
144.19  months, except when the registrar determines that to do 
144.20  otherwise will help to equalize the registration and renewal 
144.21  work load of the department. 
144.22     <b>[EFFECTIVE DATE.]</b> This section is effective for first 
144.23  registrations in Minnesota occurring on or after July 1, 2001, 
144.24  and for renewals of registrations that have been assigned 
144.25  expiration dates of August 2001 or later. 
144.26     Sec. 4.  Minnesota Statutes 2000, section 239.101, 
144.27  subdivision 3, is amended to read: 
144.28     Subd. 3.  [PETROLEUM INSPECTION FEE.] A person who owns 
144.29  petroleum products held in storage at a pipeline terminal, river 
144.30  terminal, or refinery shall pay a petroleum inspection fee of 85 
144.31  cents for every 1,000 gallons sold or withdrawn from the 
144.32  terminal or refinery storage An inspection fee is imposed on 
144.33  petroleum products when received by the first licensed 
144.34  distributor, and on petroleum products received and held for 
144.35  sale or use by any person when the petroleum products have not 
144.36  previously been received by a licensed distributor.  The 
145.1   petroleum inspection fee is 85 cents for every 1,000 gallons 
145.2   received.  The commissioner of revenue shall collect the fee.  
145.3   The revenue from the fee must first be applied to cover the 
145.4   amounts appropriated for petroleum product quality inspection 
145.5   expenses, for the inspection and testing of petroleum product 
145.6   measuring equipment, and for petroleum supply monitoring under 
145.7   chapter 216C.  
145.8      The commissioner of revenue shall credit a person for 
145.9   inspection fees previously paid in error or for any material 
145.10  exported or sold for export from the state upon filing of a 
145.11  report as prescribed by the commissioner of revenue.  The 
145.12  commissioner of revenue may collect the inspection fee along 
145.13  with any taxes due under chapter 296A.  
145.14     <b>[EFFECTIVE DATE.]</b> This section is effective for petroleum 
145.15  products received on or after July 1, 2001. 
145.16     Sec. 5.  Minnesota Statutes 2000, section 296A.07, 
145.17  subdivision 4, is amended to read: 
145.18     Subd. 4.  [TRANSIT SYSTEM EXEMPT EXEMPTIONS.] The 
145.19  provisions of subdivision 1 do not apply to gasoline purchased 
145.20  by: 
145.21     (1) a transit system or transit provider receiving 
145.22  financial assistance or reimbursement under section 174.24, 
145.23  256B.0625, subdivision 17, or 473.384; or 
145.24     (2) an ambulance service licensed under chapter 144E. 
145.25     <b>[EFFECTIVE DATE.]</b> This section is effective August 1, 2001. 
145.26     Sec. 6.  Minnesota Statutes 2000, section 296A.08, 
145.27  subdivision 3, is amended to read: 
145.28     Subd. 3.  [TRANSIT SYSTEM EXEMPT EXEMPTIONS.] The 
145.29  provisions of subdivisions 1 and 2 do not apply to special fuel 
145.30  or alternative fuels purchased by: 
145.31     (1) a transit system or transit provider receiving 
145.32  financial assistance or reimbursement under section 174.24, 
145.33  256B.0625, subdivision 17, or 473.384; or 
145.34     (2) an ambulance service licensed under chapter 144E.  
145.35     <b>[EFFECTIVE DATE.]</b> This section is effective August 1, 2001. 
145.36     Sec. 7.  Minnesota Statutes 2000, section 296A.15, 
146.1   subdivision 1, is amended to read: 
146.2      Subdivision 1.  [MONTHLY GASOLINE REPORT; SHRINKAGE 
146.3   ALLOWANCE.] (a) Except as provided in paragraph (e), on or 
146.4   before the 23rd day of each month, every person who is required 
146.5   to pay a gasoline tax shall file with the commissioner a report, 
146.6   in the form and manner prescribed by the commissioner, showing 
146.7   the number of gallons of petroleum products received by the 
146.8   reporter during the preceding calendar month, and other 
146.9   information the commissioner may require.  A written report is 
146.10  deemed to have been filed as required in this subdivision if 
146.11  postmarked on or before the 23rd day of the month in which the 
146.12  tax is payable. 
146.13     (b) The number of gallons of gasoline must be reported in 
146.14  United States standard liquid gallons, 231 cubic inches, except 
146.15  that the commissioner may upon written application and for cause 
146.16  shown permit the distributor to report the number of gallons of 
146.17  gasoline as corrected to a temperature of 60-degrees 
146.18  Fahrenheit.  If the application is granted, all gasoline covered 
146.19  in the application and allowed by the commissioner must continue 
146.20  to be reported by the distributor on the adjusted basis for a 
146.21  period of one year from the date of the granting of the 
146.22  application.  The number of gallons of petroleum products other 
146.23  than gasoline must be reported as originally invoiced.  Each 
146.24  report must show separately the number of gallons of aviation 
146.25  gasoline received by the reporter during each calendar month. 
146.26     (c) Each report must also include the amount of gasoline 
146.27  tax on gasoline received by the reporter during the preceding 
146.28  month.  In computing the tax a deduction of three 2.5 percent of 
146.29  the quantity of gasoline received by a distributor shall be made 
146.30  for evaporation and loss.  At the time of reporting, the 
146.31  reporter shall submit satisfactory evidence that one-third of 
146.32  the three 2.5 percent deduction has been credited or paid to 
146.33  dealers on quantities sold to them. 
146.34     (d) Each report shall contain a confession of judgment for 
146.35  the amount of the tax shown due to the extent not timely paid. 
146.36     (e) Under certain circumstances and with the approval of 
147.1   the commissioner, taxpayers may be allowed to file reports 
147.2   annually. 
147.3      <b>[EFFECTIVE DATE.]</b> This section is effective for reports due 
147.4   on or after July 1, 2001. 
147.5      Sec. 8.  Minnesota Statutes 2000, section 297H.04, is 
147.6   amended by adding a subdivision to read: 
147.7      Subd. 4.  [DISPOSAL WITH MIXED WASTE; RATE.] Nonmixed 
147.8   municipal solid waste that is separately collected or processed, 
147.9   but is disposed of within the permitted boundaries of a land 
147.10  disposal facility that is also actively accepting and disposing 
147.11  of mixed municipal solid waste, shall be taxed at the rate for 
147.12  mixed municipal solid waste, unless the facility owner and 
147.13  operator can demonstrate a physical separation between the mixed 
147.14  municipal solid waste disposal area and nonmixed municipal solid 
147.15  waste disposal area, such that any air or liquid emissions being 
147.16  collected from the disposal areas are collected separately. 
147.17     <b>[EFFECTIVE DATE.]</b> This section is effective for waste 
147.18  disposed of after June 30, 2001. 
147.19     Sec. 9.  Minnesota Statutes 2000, section 297H.06, is 
147.20  amended by adding a subdivision to read: 
147.21     Subd. 3.  [CONSTRUCTION DEBRIS IN A DISASTER AREA.] The tax 
147.22  is not imposed on construction debris generated from repair and 
147.23  demolition activities caused by a disaster occurring in a 
147.24  presidentially declared disaster area, provided that the 
147.25  construction debris is disposed of in a waste management 
147.26  facility designated by the commissioner of the pollution control 
147.27  agency.  To be exempt, the debris must be disposed of within 18 
147.28  months following the presidential declaration. 
147.29     <b>[EFFECTIVE DATE.]</b> This section is effective for disaster 
147.30  areas declarations made after April 15, 2001. 
147.31     Sec. 10.  Minnesota Statutes 2000, section 349.19, 
147.32  subdivision 2a, is amended to read: 
147.33     Subd. 2a.  [TAX REFUND OR CREDIT.] (a) Each organization 
147.34  that receives a refund or credit under section 297E.02, 
147.35  subdivision 4, paragraph (d), must within four business days of 
147.36  receiving a refund under that paragraph deposit the refund in 
148.1   the organization's gambling account.  
148.2      (b) In addition, each organization must annually calculate 
148.3   5.26 percent of the sum of the amount of tax it paid under: 
148.4      (1) section 297E.02, subdivision 1, on gross receipts, less 
148.5   prizes paid, after August 1, 1998; and 
148.6      (2) section 297E.02, subdivision 6, on combined receipts 
148.7   received after August 1, 1998. 
148.8      (c) The calculated amount must be reported to the board on 
148.9   a form prescribed by the board by March 20 of the year after the 
148.10  calendar year for which the calculated amount is made.  The 
148.11  calculated amount must be filed as part of the organization's 
148.12  report of expenditure of profits from lawful gambling required 
148.13  under section 349.19, subdivision 5. 
148.14     (d) The organization may expend the tax refund or credit 
148.15  issued under section 297E.02, subdivision 4, paragraph (d), plus 
148.16  the amount calculated under paragraph (b), only for lawful 
148.17  purposes, other than lawful purposes described in section 
148.18  349.12, subdivision 25, paragraph (a), clauses (8), (9), and 
148.19  (12).  Amounts subject to this paragraph must be spent for 
148.20  qualifying lawful purposes no later than one year after the 
148.21  refund or credit is received or the tax savings calculated under 
148.22  paragraph (b). 
148.23     Sec. 11.  [REPEALER.] 
148.24     Minnesota Statutes 2000, sections 297I.05, subdivision 8; 
148.25  and 297I.30, subdivision 3, are repealed effective for calendar 
148.26  years beginning after December 31, 1999. 
148.27                             ARTICLE 4 
148.28                           FEDERAL UPDATE 
148.29     Section 1.  Minnesota Statutes 2000, section 289A.02, 
148.30  subdivision 7, is amended to read: 
148.31     Subd. 7.  [INTERNAL REVENUE CODE.] Unless specifically 
148.32  defined otherwise, "Internal Revenue Code" means the Internal 
148.33  Revenue Code of 1986, as amended through December 31, 1999 2000. 
148.34     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
148.35  following final enactment. 
148.36     Sec. 2.  Minnesota Statutes 2000, section 290.01, 
149.1   subdivision 6b, is amended to read: 
149.2      Subd. 6b.  [FOREIGN OPERATING CORPORATION.] The term 
149.3   "foreign operating corporation," when applied to a corporation, 
149.4   means a domestic corporation with the following characteristics: 
149.5      (1) it is part of a unitary business at least one member of 
149.6   which is taxable in this state; 
149.7      (2) it is not a foreign sales corporation under section 922 
149.8   of the Internal Revenue Code, as amended through December 31, 
149.9   1999, for the taxable year; and 
149.10     (3) either (i) the average of the percentages of its 
149.11  property and payrolls assigned to locations inside the United 
149.12  States and the District of Columbia, excluding the commonwealth 
149.13  of Puerto Rico and possessions of the United States, as 
149.14  determined under section 290.191 or 290.20, is 20 percent or 
149.15  less; or (ii) it has in effect a valid election under section 
149.16  936 of the Internal Revenue Code. 
149.17     <b>[EFFECTIVE DATE.]</b> This section is effective for taxable 
149.18  years beginning after December 31, 2001. 
149.19     Sec. 3.  Minnesota Statutes 2000, section 290.01, 
149.20  subdivision 19, is amended to read: 
149.21     Subd. 19.  [NET INCOME.] The term "net income" means the 
149.22  federal taxable income, as defined in section 63 of the Internal 
149.23  Revenue Code of 1986, as amended through the date named in this 
149.24  subdivision, incorporating any elections made by the taxpayer in 
149.25  accordance with the Internal Revenue Code in determining federal 
149.26  taxable income for federal income tax purposes, and with the 
149.27  modifications provided in subdivisions 19a to 19f. 
149.28     In the case of a regulated investment company or a fund 
149.29  thereof, as defined in section 851(a) or 851(g) of the Internal 
149.30  Revenue Code, federal taxable income means investment company 
149.31  taxable income as defined in section 852(b)(2) of the Internal 
149.32  Revenue Code, except that:  
149.33     (1) the exclusion of net capital gain provided in section 
149.34  852(b)(2)(A) of the Internal Revenue Code does not apply; 
149.35     (2) the deduction for dividends paid under section 
149.36  852(b)(2)(D) of the Internal Revenue Code must be applied by 
150.1   allowing a deduction for capital gain dividends and 
150.2   exempt-interest dividends as defined in sections 852(b)(3)(C) 
150.3   and 852(b)(5) of the Internal Revenue Code; and 
150.4      (3) the deduction for dividends paid must also be applied 
150.5   in the amount of any undistributed capital gains which the 
150.6   regulated investment company elects to have treated as provided 
150.7   in section 852(b)(3)(D) of the Internal Revenue Code.  
150.8      The net income of a real estate investment trust as defined 
150.9   and limited by section 856(a), (b), and (c) of the Internal 
150.10  Revenue Code means the real estate investment trust taxable 
150.11  income as defined in section 857(b)(2) of the Internal Revenue 
150.12  Code.  
150.13     The net income of a designated settlement fund as defined 
150.14  in section 468B(d) of the Internal Revenue Code means the gross 
150.15  income as defined in section 468B(b) of the Internal Revenue 
150.16  Code. 
150.17     The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 
150.18  1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 
150.19  1616, 1617, 1704(l), and 1704(m) of the Small Business Job 
150.20  Protection Act, Public Law Number 104-188, the provisions of 
150.21  Public Law Number 104-117, the provisions of sections 313(a) and 
150.22  (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 1002, 
150.23  1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 1087, 
150.24  1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 1601(f)(5) 
150.25  and (h), and 1604(d)(1) of the Taxpayer Relief Act of 1997, 
150.26  Public Law Number 105-34, the provisions of section 6010 of the 
150.27  Internal Revenue Service Restructuring and Reform Act of 1998, 
150.28  Public Law Number 105-206, and the provisions of section 4003 of 
150.29  the Omnibus Consolidated and Emergency Supplemental 
150.30  Appropriations Act, 1999, Public Law Number 105-277, and the 
150.31  provisions of section 318 of the Consolidated Appropriation Act 
150.32  of 2001, Public Law Number 106-554, shall become effective at 
150.33  the time they become effective for federal purposes. 
150.34     The Internal Revenue Code of 1986, as amended through 
150.35  December 31, 1996, shall be in effect for taxable years 
150.36  beginning after December 31, 1996. 
151.1      The provisions of sections 202(a) and (b), 221(a), 225, 
151.2   312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 
151.3   (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 
151.4   1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 
151.5   1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 
151.6   of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 
151.7   the provisions of sections 6004, 6005, 6012, 6013, 6015, 6016, 
151.8   7002, and 7003 of the Internal Revenue Service Restructuring and 
151.9   Reform Act of 1998, Public Law Number 105-206, the provisions of 
151.10  section 3001 of the Omnibus Consolidated and Emergency 
151.11  Supplemental Appropriations Act, 1999, Public Law Number 
151.12  105-277, and the provisions of section 3001 of the Miscellaneous 
151.13  Trade and Technical Corrections Act of 1999, Public Law Number 
151.14  106-36, and the provisions of section 316 of the Consolidated 
151.15  Appropriation Act of 2001, Public Law Number 106-554, shall 
151.16  become effective at the time they become effective for federal 
151.17  purposes. 
151.18     The Internal Revenue Code of 1986, as amended through 
151.19  December 31, 1997, shall be in effect for taxable years 
151.20  beginning after December 31, 1997. 
151.21     The provisions of sections 5002, 6009, 6011, and 7001 of 
151.22  the Internal Revenue Service Restructuring and Reform Act of 
151.23  1998, Public Law Number 105-206, the provisions of section 9010 
151.24  of the Transportation Equity Act for the 21st Century, Public 
151.25  Law Number 105-178, the provisions of sections 1004, 4002, and 
151.26  5301 of the Omnibus Consolidation and Emergency Supplemental 
151.27  Appropriations Act, 1999, Public Law Number 105-277, the 
151.28  provision of section 303 of the Ricky Ray Hemophilia Relief Fund 
151.29  Act of 1998, Public Law Number 105-369, and the provisions of 
151.30  sections 532, 534, 536, 537, and 538 of the Ticket to Work and 
151.31  Work Incentives Improvement Act of 1999, Public Law Number 
151.32  106-170, the provisions of the Installment Tax Correction Act of 
151.33  2000, Public Law Number 106-573, and the provisions of section 
151.34  309 of the Consolidated Appropriation Act of 2001, Public Law 
151.35  Number 106-554, shall become effective at the time they become 
151.36  effective for federal purposes. 
152.1      The Internal Revenue Code of 1986, as amended through 
152.2   December 31, 1998, shall be in effect for taxable years 
152.3   beginning after December 31, 1998.  
152.4      The provisions of the FSC Repeal and Extraterritorial 
152.5   Income Exclusion Act of 2000, Public Law Number 106-519, shall 
152.6   become effective at the time it became effective for federal 
152.7   purposes. 
152.8      The Internal Revenue Code of 1986, as amended through 
152.9   December 31, 1999, shall be in effect for taxable years 
152.10  beginning after December 31, 1999.  The provisions of sections 
152.11  306 and 401 of the Consolidated Appropriation Act of 2001, 
152.12  Public Law Number 106-554, shall become effective at the same 
152.13  time it became effective for federal purposes. 
152.14     The Internal Revenue Code of 1986, as amended through 
152.15  December 31, 2000, shall be in effect for taxable years 
152.16  beginning after December 31, 2000. 
152.17     Except as otherwise provided, references to the Internal 
152.18  Revenue Code in subdivisions 19a to 19g mean the code in effect 
152.19  for purposes of determining net income for the applicable year. 
152.20     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
152.21  following final enactment. 
152.22     Sec. 4.  Minnesota Statutes 2000, section 290.01, 
152.23  subdivision 19c, is amended to read: 
152.24     Subd. 19c.  [CORPORATIONS; ADDITIONS TO FEDERAL TAXABLE 
152.25  INCOME.] For corporations, there shall be added to federal 
152.26  taxable income: 
152.27     (1) the amount of any deduction taken for federal income 
152.28  tax purposes for income, excise, or franchise taxes based on net 
152.29  income or related minimum taxes, including but not limited to 
152.30  the tax imposed under section 290.0922, paid by the corporation 
152.31  to Minnesota, another state, a political subdivision of another 
152.32  state, the District of Columbia, or any foreign country or 
152.33  possession of the United States; 
152.34     (2) interest not subject to federal tax upon obligations 
152.35  of:  the United States, its possessions, its agencies, or its 
152.36  instrumentalities; the state of Minnesota or any other state, 
153.1   any of its political or governmental subdivisions, any of its 
153.2   municipalities, or any of its governmental agencies or 
153.3   instrumentalities; the District of Columbia; or Indian tribal 
153.4   governments; 
153.5      (3) exempt-interest dividends received as defined in 
153.6   section 852(b)(5) of the Internal Revenue Code; 
153.7      (4) the amount of any net operating loss deduction taken 
153.8   for federal income tax purposes under section 172 or 832(c)(10) 
153.9   of the Internal Revenue Code or operations loss deduction under 
153.10  section 810 of the Internal Revenue Code; 
153.11     (5) the amount of any special deductions taken for federal 
153.12  income tax purposes under sections 241 to 247 of the Internal 
153.13  Revenue Code; 
153.14     (6) losses from the business of mining, as defined in 
153.15  section 290.05, subdivision 1, clause (a), that are not subject 
153.16  to Minnesota income tax; 
153.17     (7) the amount of any capital losses deducted for federal 
153.18  income tax purposes under sections 1211 and 1212 of the Internal 
153.19  Revenue Code; 
153.20     (8) the amount of any charitable contributions deducted for 
153.21  federal income tax purposes under section 170 of the Internal 
153.22  Revenue Code; 
153.23     (9) the exempt foreign trade income of a foreign sales 
153.24  corporation under sections 921(a) and 291 of the Internal 
153.25  Revenue Code; 
153.26     (10) the amount of percentage depletion deducted under 
153.27  sections 611 through 614 and 291 of the Internal Revenue Code; 
153.28     (11) for certified pollution control facilities placed in 
153.29  service in a taxable year beginning before December 31, 1986, 
153.30  and for which amortization deductions were elected under section 
153.31  169 of the Internal Revenue Code of 1954, as amended through 
153.32  December 31, 1985, the amount of the amortization deduction 
153.33  allowed in computing federal taxable income for those 
153.34  facilities; 
153.35     (12) the amount of any deemed dividend from a foreign 
153.36  operating corporation determined pursuant to section 290.17, 
154.1   subdivision 4, paragraph (g); 
154.2      (13) the amount of any environmental tax paid under section 
154.3   59(a) of the Internal Revenue Code; and 
154.4      (14) the amount of a partner's pro rata share of net income 
154.5   which does not flow through to the partner because the 
154.6   partnership elected to pay the tax on the income under section 
154.7   6242(a)(2) of the Internal Revenue Code; and 
154.8      (15) the amount of net income excluded under section 114 of 
154.9   the Internal Revenue Code. 
154.10     <b>[EFFECTIVE DATE.]</b> This section is effective for taxable 
154.11  years beginning after December 31, 2000. 
154.12     Sec. 5.  Minnesota Statutes 2000, section 290.01, 
154.13  subdivision 19d, is amended to read: 
154.14     Subd. 19d.  [CORPORATIONS; MODIFICATIONS DECREASING FEDERAL 
154.15  TAXABLE INCOME.] For corporations, there shall be subtracted 
154.16  from federal taxable income after the increases provided in 
154.17  subdivision 19c:  
154.18     (1) the amount of foreign dividend gross-up added to gross 
154.19  income for federal income tax purposes under section 78 of the 
154.20  Internal Revenue Code; 
154.21     (2) the amount of salary expense not allowed for federal 
154.22  income tax purposes due to claiming the federal jobs credit 
154.23  under section 51 of the Internal Revenue Code; 
154.24     (3) any dividend (not including any distribution in 
154.25  liquidation) paid within the taxable year by a national or state 
154.26  bank to the United States, or to any instrumentality of the 
154.27  United States exempt from federal income taxes, on the preferred 
154.28  stock of the bank owned by the United States or the 
154.29  instrumentality; 
154.30     (4) amounts disallowed for intangible drilling costs due to 
154.31  differences between this chapter and the Internal Revenue Code 
154.32  in taxable years beginning before January 1, 1987, as follows: 
154.33     (i) to the extent the disallowed costs are represented by 
154.34  physical property, an amount equal to the allowance for 
154.35  depreciation under Minnesota Statutes 1986, section 290.09, 
154.36  subdivision 7, subject to the modifications contained in 
155.1   subdivision 19e; and 
155.2      (ii) to the extent the disallowed costs are not represented 
155.3   by physical property, an amount equal to the allowance for cost 
155.4   depletion under Minnesota Statutes 1986, section 290.09, 
155.5   subdivision 8; 
155.6      (5) the deduction for capital losses pursuant to sections 
155.7   1211 and 1212 of the Internal Revenue Code, except that: 
155.8      (i) for capital losses incurred in taxable years beginning 
155.9   after December 31, 1986, capital loss carrybacks shall not be 
155.10  allowed; 
155.11     (ii) for capital losses incurred in taxable years beginning 
155.12  after December 31, 1986, a capital loss carryover to each of the 
155.13  15 taxable years succeeding the loss year shall be allowed; 
155.14     (iii) for capital losses incurred in taxable years 
155.15  beginning before January 1, 1987, a capital loss carryback to 
155.16  each of the three taxable years preceding the loss year, subject 
155.17  to the provisions of Minnesota Statutes 1986, section 290.16, 
155.18  shall be allowed; and 
155.19     (iv) for capital losses incurred in taxable years beginning 
155.20  before January 1, 1987, a capital loss carryover to each of the 
155.21  five taxable years succeeding the loss year to the extent such 
155.22  loss was not used in a prior taxable year and subject to the 
155.23  provisions of Minnesota Statutes 1986, section 290.16, shall be 
155.24  allowed; 
155.25     (6) an amount for interest and expenses relating to income 
155.26  not taxable for federal income tax purposes, if (i) the income 
155.27  is taxable under this chapter and (ii) the interest and expenses 
155.28  were disallowed as deductions under the provisions of section 
155.29  171(a)(2), 265 or 291 of the Internal Revenue Code in computing 
155.30  federal taxable income; 
155.31     (7) in the case of mines, oil and gas wells, other natural 
155.32  deposits, and timber for which percentage depletion was 
155.33  disallowed pursuant to subdivision 19c, clause (11), a 
155.34  reasonable allowance for depletion based on actual cost.  In the 
155.35  case of leases the deduction must be apportioned between the 
155.36  lessor and lessee in accordance with rules prescribed by the 
156.1   commissioner.  In the case of property held in trust, the 
156.2   allowable deduction must be apportioned between the income 
156.3   beneficiaries and the trustee in accordance with the pertinent 
156.4   provisions of the trust, or if there is no provision in the 
156.5   instrument, on the basis of the trust's income allocable to 
156.6   each; 
156.7      (8) for certified pollution control facilities placed in 
156.8   service in a taxable year beginning before December 31, 1986, 
156.9   and for which amortization deductions were elected under section 
156.10  169 of the Internal Revenue Code of 1954, as amended through 
156.11  December 31, 1985, an amount equal to the allowance for 
156.12  depreciation under Minnesota Statutes 1986, section 290.09, 
156.13  subdivision 7; 
156.14     (9) the amount included in federal taxable income 
156.15  attributable to the credits provided in Minnesota Statutes 1986, 
156.16  section 273.1314, subdivision 9, or Minnesota Statutes, section 
156.17  469.171, subdivision 6; 
156.18     (10) amounts included in federal taxable income that are 
156.19  due to refunds of income, excise, or franchise taxes based on 
156.20  net income or related minimum taxes paid by the corporation to 
156.21  Minnesota, another state, a political subdivision of another 
156.22  state, the District of Columbia, or a foreign country or 
156.23  possession of the United States to the extent that the taxes 
156.24  were added to federal taxable income under section 290.01, 
156.25  subdivision 19c, clause (1), in a prior taxable year; 
156.26     (11) 80 percent of royalties, fees, or other like income 
156.27  accrued or received from a foreign operating corporation or a 
156.28  foreign corporation which is part of the same unitary business 
156.29  as the receiving corporation; 
156.30     (12) income or gains from the business of mining as defined 
156.31  in section 290.05, subdivision 1, clause (a), that are not 
156.32  subject to Minnesota franchise tax; 
156.33     (13) the amount of handicap access expenditures in the 
156.34  taxable year which are not allowed to be deducted or capitalized 
156.35  under section 44(d)(7) of the Internal Revenue Code; 
156.36     (14) the amount of qualified research expenses not allowed 
157.1   for federal income tax purposes under section 280C(c) of the 
157.2   Internal Revenue Code, but only to the extent that the amount 
157.3   exceeds the amount of the credit allowed under section 290.068; 
157.4      (15) the amount of salary expenses not allowed for federal 
157.5   income tax purposes due to claiming the Indian employment credit 
157.6   under section 45A(a) of the Internal Revenue Code; 
157.7      (16) the amount of any refund of environmental taxes paid 
157.8   under section 59A of the Internal Revenue Code; and 
157.9      (17) for taxable years beginning before January 1, 2008, 
157.10  the amount of the federal small ethanol producer credit allowed 
157.11  under section 40(a)(3) of the Internal Revenue Code which is 
157.12  included in gross income under section 87 of the Internal 
157.13  Revenue Code; and 
157.14     (18) for a corporation whose foreign sales corporation, as 
157.15  defined in section 922 of the Internal Revenue Code, constituted 
157.16  a foreign operating corporation during the taxable years ending 
157.17  during calendar year 1992 and a return was filed by August 15, 
157.18  1996, claiming the deduction under this subdivision for income 
157.19  received from the foreign operating corporation, an amount equal 
157.20  to 1.23 multiplied by the amount of income excluded under 
157.21  section 114 of the Internal Revenue Code, provided the income is 
157.22  not income of a foreign operating company. 
157.23     <b>[EFFECTIVE DATE.]</b> This section is effective for taxable 
157.24  years beginning after December 31, 2000. 
157.25     Sec. 6.  Minnesota Statutes 2000, section 290.01, 
157.26  subdivision 31, is amended to read: 
157.27     Subd. 31.  [INTERNAL REVENUE CODE.] Unless specifically 
157.28  defined otherwise, "Internal Revenue Code" means the Internal 
157.29  Revenue Code of 1986, as amended through December 31, 1999 2000. 
157.30     <b>[EFFECTIVE DATE.]</b> This section is effective at the same 
157.31  time and in the same manner as the federal changes made by the 
157.32  FSC Repeal and Extraterritorial Income Exclusion Act of 2000, 
157.33  Public Law Number 106-519, and the Consolidated Appropriation 
157.34  Act of 2001, Public Law Number 106-554, becomes effective. 
157.35     Sec. 7.  Minnesota Statutes 2000, section 290A.03, 
157.36  subdivision 15, is amended to read: 
158.1      Subd. 15.  [INTERNAL REVENUE CODE.] "Internal Revenue Code" 
158.2   means the Internal Revenue Code of 1986, as amended through 
158.3   December 31, 1999 2000. 
158.4      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
158.5   following final enactment. 
158.6      Sec. 8.  Minnesota Statutes 2000, section 291.005, 
158.7   subdivision 1, is amended to read: 
158.8      Subdivision 1.  Unless the context otherwise clearly 
158.9   requires, the following terms used in this chapter shall have 
158.10  the following meanings: 
158.11     (1) "Federal gross estate" means the gross estate of a 
158.12  decedent as valued and otherwise determined for federal estate 
158.13  tax purposes by federal taxing authorities pursuant to the 
158.14  provisions of the Internal Revenue Code. 
158.15     (2) "Minnesota gross estate" means the federal gross estate 
158.16  of a decedent after (a) excluding therefrom any property 
158.17  included therein which has its situs outside Minnesota and (b) 
158.18  including therein any property omitted from the federal gross 
158.19  estate which is includable therein, has its situs in Minnesota, 
158.20  and was not disclosed to federal taxing authorities.  
158.21     (3) "Personal representative" means the executor, 
158.22  administrator or other person appointed by the court to 
158.23  administer and dispose of the property of the decedent.  If 
158.24  there is no executor, administrator or other person appointed, 
158.25  qualified, and acting within this state, then any person in 
158.26  actual or constructive possession of any property having a situs 
158.27  in this state which is included in the federal gross estate of 
158.28  the decedent shall be deemed to be a personal representative to 
158.29  the extent of the property and the Minnesota estate tax due with 
158.30  respect to the property. 
158.31     (4) "Resident decedent" means an individual whose domicile 
158.32  at the time of death was in Minnesota. 
158.33     (5) "Nonresident decedent" means an individual whose 
158.34  domicile at the time of death was not in Minnesota. 
158.35     (6) "Situs of property" means, with respect to real 
158.36  property, the state or country in which it is located; with 
159.1   respect to tangible personal property, the state or country in 
159.2   which it was normally kept or located at the time of the 
159.3   decedent's death; and with respect to intangible personal 
159.4   property, the state or country in which the decedent was 
159.5   domiciled at death. 
159.6      (7) "Commissioner" means the commissioner of revenue or any 
159.7   person to whom the commissioner has delegated functions under 
159.8   this chapter. 
159.9      (8) "Internal Revenue Code" means the United States 
159.10  Internal Revenue Code of 1986, as amended through December 31, 
159.11  1999 2000. 
159.12     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
159.13  following final enactment. 
159.14                             ARTICLE 5 
159.15                         TAX ADMINISTRATION 
159.16     Section 1.  Minnesota Statutes 2000, section 16D.08, 
159.17  subdivision 2, is amended to read: 
159.18     Subd. 2.  [POWERS.] (a) In addition to the collection 
159.19  remedies available to private collection agencies in this state, 
159.20  the commissioner, with legal assistance from the attorney 
159.21  general, may utilize any statutory authority granted to a 
159.22  referring agency for purposes of collecting debt owed to that 
159.23  referring agency.  The commissioner may also delegate to the 
159.24  enterprise the tax collection remedies in sections 270.06, 
159.25  clauses (7) and (17), excluding the power to subpoena witnesses; 
159.26  270.66; 270.69, excluding subdivisions 7 and 13; 270.70, 
159.27  excluding subdivision 14; 270.7001 to 270.72; and 290.92, 
159.28  subdivision 23, except that a continuous wage levy under section 
159.29  290.92, subdivision 23, is only effective for 70 days, unless no 
159.30  competing wage garnishments, executions, or levies are served 
159.31  within the 70-day period, in which case a wage levy is 
159.32  continuous until a competing garnishment, execution, or levy is 
159.33  served in the second or a succeeding 70-day period, in which 
159.34  case a continuous wage levy is effective for the remainder of 
159.35  that period.  A debtor who qualifies for cancellation of 
159.36  collection costs under section 16D.11, subdivision 3, clause 
160.1   (1), can apply to the commissioner for reduction or release of a 
160.2   continuous wage levy, if the debtor establishes that the debtor 
160.3   needs all or a portion of the wages being levied upon to pay for 
160.4   essential living expenses, such as food, clothing, shelter, 
160.5   medical care, or expenses necessary for maintaining employment.  
160.6   The commissioner's determination not to reduce or release a 
160.7   continuous wage levy is appealable to district court.  The word 
160.8   "tax" or "taxes" when used in the tax collection statutes listed 
160.9   in this subdivision also means debts referred under this chapter.
160.10     (b) For debts other than state taxes or, child support, or 
160.11  student loans, before any of the tax collection remedies listed 
160.12  in this subdivision can be used, except for the remedies in 
160.13  section 270.06, clauses (7) and (17), if the referring agency 
160.14  has not already obtained a judgment or filed a lien, the 
160.15  commissioner must first obtain a judgment against the debtor.  
160.16  For student loans when the referring agency has not obtained a 
160.17  judgment or filed a lien, before using the tax collection 
160.18  remedies listed in this subdivision, except for the remedies in 
160.19  section 270.06, clauses (7) and (17), the commissioner shall 
160.20  give the debtor 30 days' notice in writing, which may be served 
160.21  in any manner permitted in section 270.68 for service of a 
160.22  summons and complaint.  The notice must advise the debtor of the 
160.23  debtor's right to request that the commissioner commence a court 
160.24  action, and that if no such request is made within 30 days after 
160.25  service of the notice, the commissioner may use these tax 
160.26  collection remedies.  If a timely request is made, the 
160.27  commissioner shall obtain a judgment before using these tax 
160.28  collection remedies. 
160.29     <b>[EFFECTIVE DATE.]</b> This section is effective for student 
160.30  loans referred to the commissioner for collection on or after 
160.31  July 1, 2001. 
160.32     Sec. 2.  Minnesota Statutes 2000, section 84.922, is 
160.33  amended by adding a subdivision to read: 
160.34     Subd. 11.  [PROOF OF SALES TAX PAYMENT.] A person applying 
160.35  for initial registration in Minnesota of an all-terrain vehicle 
160.36  shall provide a purchaser's certificate showing a complete 
161.1   description of the all-terrain vehicle, the seller's name and 
161.2   address, the full purchase price of the all-terrain vehicle, and 
161.3   the trade-in allowance, if any.  The certificate also must 
161.4   include information showing either that (1) the sales and use 
161.5   tax under chapter 297A was paid, or (2) the purchase was exempt 
161.6   from tax under chapter 297A.  The certificate is not required if 
161.7   the applicant provides a receipt, invoice, or other document 
161.8   that shows the all-terrain vehicle was purchased from a retailer 
161.9   maintaining a place of business in this state as defined in 
161.10  section 297A.66, subdivision 1. 
161.11     <b>[EFFECTIVE DATE.]</b> This section is effective for 
161.12  registrations occurring on or after July 1, 2001. 
161.13     Sec. 3.  Minnesota Statutes 2000, section 144.3831, 
161.14  subdivision 2, is amended to read: 
161.15     Subd. 2.  [COLLECTION AND PAYMENT OF FEE.] The public water 
161.16  supply described in subdivision 1 shall: 
161.17     (1) collect the fees assessed on its service connections; 
161.18     (2) pay the department of revenue health an amount 
161.19  equivalent to the fees based on the total number of service 
161.20  connections.  The service connections for each public water 
161.21  supply described in subdivision 1 shall be verified every four 
161.22  years by the department of health; and 
161.23     (3) pay one-fourth of the total yearly fee to the 
161.24  department of revenue health each calendar quarter.  The first 
161.25  quarterly payment is due on or before September 30, 1992.  In 
161.26  lieu of quarterly payments, a public water supply described in 
161.27  subdivision 1 with fewer than 50 service connections may make a 
161.28  single annual payment by June 30 each year, starting in 1993.  
161.29  The fees payable to the department of revenue health shall be 
161.30  deposited in the state treasury as nondedicated state government 
161.31  special revenue fund revenues. 
161.32     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
161.33  following final enactment. 
161.34     Sec. 4.  Minnesota Statutes 2000, section 270.06, is 
161.35  amended to read: 
161.36     270.06 [POWERS AND DUTIES.] 
162.1      The commissioner of revenue shall: 
162.2      (1) have and exercise general supervision over the 
162.3   administration of the assessment and taxation laws of the state, 
162.4   over assessors, town, county, and city boards of review and 
162.5   equalization, and all other assessing officers in the 
162.6   performance of their duties, to the end that all assessments of 
162.7   property be made relatively just and equal in compliance with 
162.8   the laws of the state; 
162.9      (2) confer with, advise, and give the necessary 
162.10  instructions and directions to local assessors and local boards 
162.11  of review throughout the state as to their duties under the laws 
162.12  of the state; 
162.13     (3) direct proceedings, actions, and prosecutions to be 
162.14  instituted to enforce the laws relating to the liability and 
162.15  punishment of public officers and officers and agents of 
162.16  corporations for failure or negligence to comply with the 
162.17  provisions of the laws of this state governing returns of 
162.18  assessment and taxation of property, and cause complaints to be 
162.19  made against local assessors, members of boards of equalization, 
162.20  members of boards of review, or any other assessing or taxing 
162.21  officer, to the proper authority, for their removal from office 
162.22  for misconduct or negligence of duty; 
162.23     (4) require county attorneys to assist in the commencement 
162.24  of prosecutions in actions or proceedings for removal, 
162.25  forfeiture and punishment for violation of the laws of this 
162.26  state in respect to the assessment and taxation of property in 
162.27  their respective districts or counties; 
162.28     (5) require town, city, county, and other public officers 
162.29  to report information as to the assessment of property, 
162.30  collection of taxes received from licenses and other sources, 
162.31  and such other information as may be needful in the work of the 
162.32  department of revenue, in such form and upon such blanks as the 
162.33  commissioner may prescribe; 
162.34     (6) require individuals, copartnerships, companies, 
162.35  associations, and corporations to furnish information concerning 
162.36  their capital, funded or other debt, current assets and 
163.1   liabilities, earnings, operating expenses, taxes, as well as all 
163.2   other statements now required by law for taxation purposes; 
163.3      (7) subpoena witnesses, at a time and place reasonable 
163.4   under the circumstances, to appear and give testimony, and to 
163.5   produce books, records, papers and documents for inspection and 
163.6   copying relating to any matter which the commissioner may have 
163.7   authority to investigate or determine; 
163.8      (8) issue a subpoena which does not identify the person or 
163.9   persons with respect to whose liability the subpoena is issued, 
163.10  but only if (a) the subpoena relates to the investigation of a 
163.11  particular person or ascertainable group or class of persons, 
163.12  (b) there is a reasonable basis for believing that such person 
163.13  or group or class of persons may fail or may have failed to 
163.14  comply with any law administered by the commissioner, (c) the 
163.15  information sought to be obtained from the examination of the 
163.16  records (and the identity of the person or persons with respect 
163.17  to whose liability the subpoena is issued) is not readily 
163.18  available from other sources, (d) the subpoena is clear and 
163.19  specific as to the information sought to be obtained, and (e) 
163.20  the information sought to be obtained is limited solely to the 
163.21  scope of the investigation.  Provided further that the party 
163.22  served with a subpoena which does not identify the person or 
163.23  persons with respect to whose tax liability the subpoena is 
163.24  issued shall have the right, within 20 days after service of the 
163.25  subpoena, to petition the district court for the judicial 
163.26  district in which lies the county in which that party is located 
163.27  for a determination as to whether the commissioner of revenue 
163.28  has complied with all the requirements in (a) to (e), and thus, 
163.29  whether the subpoena is enforceable.  If no such petition is 
163.30  made by the party served within the time prescribed, the 
163.31  subpoena shall have the force and effect of a court order; 
163.32     (9) cause the deposition of witnesses residing within or 
163.33  without the state, or absent therefrom, to be taken, upon notice 
163.34  to the interested party, if any, in like manner that depositions 
163.35  of witnesses are taken in civil actions in the district court, 
163.36  in any matter which the commissioner may have authority to 
164.1   investigate or determine; 
164.2      (10) investigate the tax laws of other states and countries 
164.3   and to formulate and submit to the legislature such legislation 
164.4   as the commissioner may deem expedient to prevent evasions of 
164.5   assessment and taxing laws, and secure just and equal taxation 
164.6   and improvement in the system of assessment and taxation in this 
164.7   state; 
164.8      (11) consult and confer with the governor upon the subject 
164.9   of taxation, the administration of the laws in regard thereto, 
164.10  and the progress of the work of the department of revenue, and 
164.11  furnish the governor, from time to time, such assistance and 
164.12  information as the governor may require relating to tax matters; 
164.13     (12) transmit to the governor, on or before the third 
164.14  Monday in December of each even-numbered year, and to each 
164.15  member of the legislature, on or before November 15 of each 
164.16  even-numbered year, the report of the department of revenue for 
164.17  the preceding years, showing all the taxable property in the 
164.18  state and the value of the same, in tabulated form; 
164.19     (13) inquire into the methods of assessment and taxation 
164.20  and ascertain whether the assessors faithfully discharge their 
164.21  duties, particularly as to their compliance with the laws 
164.22  requiring the assessment of all property not exempt from 
164.23  taxation; 
164.24     (14) administer and enforce the assessment and collection 
164.25  of state taxes and fees, including the use of any remedy 
164.26  available to nongovernmental creditors, and, from time to time, 
164.27  make, publish, and distribute rules for the administration and 
164.28  enforcement of assessments and fees administered by the 
164.29  commissioner and state tax laws.  The rules have the force of 
164.30  law; 
164.31     (15) prepare blank forms for the returns required by state 
164.32  tax law and distribute them throughout the state, furnishing 
164.33  them subject to charge on application; 
164.34     (16) prescribe rules governing the qualification and 
164.35  practice of agents, attorneys, or other persons representing 
164.36  taxpayers before the commissioner.  The rules may require that 
165.1   those persons, agents, and attorneys show that they are of good 
165.2   character and in good repute, have the necessary qualifications 
165.3   to give taxpayers valuable services, and are otherwise competent 
165.4   to advise and assist taxpayers in the presentation of their case 
165.5   before being recognized as representatives of taxpayers.  After 
165.6   due notice and opportunity for hearing, the commissioner may 
165.7   suspend and disbar bar from further practice before the 
165.8   commissioner any person, agent, or attorney who is shown to be 
165.9   incompetent or disreputable, who refuses to comply with the 
165.10  rules, or who with intent to defraud, willfully or knowingly 
165.11  deceives, misleads, or threatens a taxpayer or prospective 
165.12  taxpayer, by words, circular, letter, or by advertisement.  This 
165.13  clause does not curtail the rights of individuals to appear in 
165.14  their own behalf or partners or corporations' officers to appear 
165.15  in behalf of their respective partnerships or corporations; 
165.16     (17) appoint agents as the commissioner considers necessary 
165.17  to make examinations and determinations.  The agents have the 
165.18  rights and powers conferred on the commissioner to subpoena, 
165.19  examine, and copy books, records, papers, or memoranda, subpoena 
165.20  witnesses, administer oaths and affirmations, and take 
165.21  testimony.  In addition to administrative subpoenas of the 
165.22  commissioner and the agents, upon demand of the commissioner or 
165.23  an agent, the court administrator of any district court shall 
165.24  issue a subpoena for the attendance of a witness or the 
165.25  production of books, papers, records, or memoranda before the 
165.26  agent for inspection and copying.  Disobedience of a court 
165.27  administrator's subpoena shall be punished by the district court 
165.28  of the district in which the subpoena is issued, or in the case 
165.29  of a subpoena issued by the commissioner or an agent, by the 
165.30  district court of the district in which the party served with 
165.31  the subpoena is located, in the same manner as contempt of the 
165.32  district court; 
165.33     (18) appoint and employ additional help, purchase supplies 
165.34  or materials, or incur other expenditures in the enforcement of 
165.35  state tax laws as considered necessary.  The salaries of all 
165.36  agents and employees provided for in this chapter shall be fixed 
166.1   by the appointing authority, subject to the approval of the 
166.2   commissioner of administration; 
166.3      (19) execute and administer any agreement with the 
166.4   secretary of the treasury of the United States or a 
166.5   representative of another state regarding the exchange of 
166.6   information and administration of the tax laws; 
166.7      (20) administer and enforce the provisions of sections 
166.8   325D.30 to 325D.42, the Minnesota Unfair Cigarette Sales Act; 
166.9      (21) authorize the use of unmarked motor vehicles to 
166.10  conduct seizures or criminal investigations pursuant to the 
166.11  commissioner's authority; and 
166.12     (22) exercise other powers and perform other duties 
166.13  required of or imposed upon the commissioner of revenue by law.  
166.14     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
166.15  following final enactment. 
166.16     Sec. 5.  Minnesota Statutes 2000, section 270.60, is 
166.17  amended by adding a subdivision to read: 
166.18     Subd. 5.  [FEES; APPROPRIATION.] (a) The commissioner may 
166.19  enter into an agreement with the governing body of any federally 
166.20  recognized Indian reservation in Minnesota concerning fees 
166.21  administered by the commissioner that are paid by the tribe, 
166.22  members of the tribe, or persons who conduct business with the 
166.23  tribe, or otherwise imposed on on-reservation activities.  The 
166.24  agreement may provide for the refund or sharing of the fee.  The 
166.25  commissioner may make any payments required by the agreement 
166.26  from the fees collected. 
166.27     (b) Each head of an agency, board, or other governmental 
166.28  entity that administers a program that is funded by fees 
166.29  administered by the commissioner may sign an agreement entered 
166.30  into by the commissioner under this subdivision.  An agreement 
166.31  is not valid until signed by the head of each agency, board, or 
166.32  other governmental entity that administers a program funded by 
166.33  the particular fee covered in an agreement and by the 
166.34  commissioner of revenue. 
166.35     (c) There is annually appropriated to the commissioner of 
166.36  revenue from the funds for which the fees are collected the 
167.1   amounts necessary to make payments as provided in this 
167.2   subdivision. 
167.3      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
167.4   following final enactment and applies to all fees administered 
167.5   by the commissioner of revenue for which timely claims for 
167.6   refund have been, or can be, filed. 
167.7      Sec. 6.  Minnesota Statutes 2000, section 270.70, 
167.8   subdivision 13, is amended to read: 
167.9      Subd. 13.  [LEVY AND SALE BY SHERIFF.] If any tax payable 
167.10  to the commissioner of revenue or to the department of revenue 
167.11  is not paid as provided in subdivision 2, the commissioner may, 
167.12  within five years after the date of assessment of the 
167.13  tax, within the time periods provided in subdivision 1 for 
167.14  collection of taxes, delegate the authority granted by 
167.15  subdivision 1, by means of issuing a warrant to the sheriff of 
167.16  any county of the state commanding the sheriff, as agent for the 
167.17  commissioner, to levy upon and sell the real and personal 
167.18  property of the person liable for the payment or collection of 
167.19  the tax and to levy upon the rights to property of that person 
167.20  within the county, or to levy upon and seize any property within 
167.21  the county on which there is a lien provided in section 270.69, 
167.22  and to return the warrant to the commissioner and pay to the 
167.23  commissioner the money collected by virtue thereof by a time to 
167.24  be therein specified not less than 60 days from the date of the 
167.25  warrant.  The sheriff shall proceed thereunder to levy upon and 
167.26  seize any property of the person and to levy upon the rights to 
167.27  property of the person within the county (except the person's 
167.28  homestead or that property which is exempt from execution 
167.29  pursuant to section 550.37), or to levy upon and seize any 
167.30  property within the county on which there is a lien provided in 
167.31  section 270.69.  For purposes of the preceding sentence, the 
167.32  term "tax" shall include any penalty, interest and costs 
167.33  properly payable.  The sheriff shall then sell so much of the 
167.34  property levied upon as is required to satisfy the taxes, 
167.35  interest, and penalties, together with the sheriff's costs; but 
167.36  the sales, and the time and manner of redemption therefrom, 
168.1   shall, to the extent not provided in sections 270.701 to 
168.2   270.709, be governed by chapter 550.  The proceeds of the sales, 
168.3   less the sheriff's costs, shall be turned over to the 
168.4   commissioner, who shall then apply the proceeds as provided in 
168.5   section 270.708. 
168.6      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
168.7   following final enactment for all taxes for which issuance of a 
168.8   warrant under this subdivision has not been barred as of that 
168.9   date. 
168.10     Sec. 7.  Minnesota Statutes 2000, section 270.73, 
168.11  subdivision 1, is amended to read: 
168.12     Subdivision 1.  [POSTING, NOTICE.] Pursuant to the 
168.13  authority to disclose under section 270B.12, subdivision 4, the 
168.14  commissioner shall, by the 15th of each month, submit to the 
168.15  commissioner of public safety a list of all taxpayers who are 
168.16  required to pay, withhold, or collect the tax imposed by section 
168.17  290.02, 290.0922, 290.92, 290.9727, 290.9728, 290.9729, or 
168.18  297A.02, or local sales and use tax payable to the commissioner 
168.19  of revenue, or a local option tax administered and collected by 
168.20  the commissioner of revenue, and who are ten days or more 
168.21  delinquent in either filing a tax return or paying the tax. 
168.22     The commissioner of revenue is under no obligation to list 
168.23  a taxpayer whose business is inactive.  At least ten days before 
168.24  notifying the commissioner of public safety, the commissioner of 
168.25  revenue shall notify the taxpayer of the intended action. 
168.26     The commissioner of public safety shall post the list in 
168.27  the same manner as provided in section 340A.318, subdivision 3.  
168.28  The list will prominently show the date of posting.  If a 
168.29  taxpayer previously listed files all returns and pays all taxes 
168.30  then due, the commissioner shall notify the commissioner of 
168.31  public safety within two business days. 
168.32     <b>[EFFECTIVE DATE.]</b> This section is effective for lists 
168.33  submitted to the commissioner of public safety on or after the 
168.34  day following final enactment. 
168.35     Sec. 8.  Minnesota Statutes 2000, section 270A.03, 
168.36  subdivision 5, is amended to read: 
169.1      Subd. 5.  [DEBT.] "Debt" means a legal obligation of a 
169.2   natural person to pay a fixed and certain amount of money, which 
169.3   equals or exceeds $25 and which is due and payable to a claimant 
169.4   agency.  The term includes criminal fines imposed under section 
169.5   609.10 or 609.125 and restitution.  A debt may arise under a 
169.6   contractual or statutory obligation, a court order, or other 
169.7   legal obligation, but need not have been reduced to judgment.  
169.8      A debt includes any legal obligation of a current recipient 
169.9   of assistance which is based on overpayment of an assistance 
169.10  grant where that payment is based on a client waiver or an 
169.11  administrative or judicial finding of an intentional program 
169.12  violation; or where the debt is owed to a program wherein the 
169.13  debtor is not a client at the time notification is provided to 
169.14  initiate recovery under this chapter and the debtor is not a 
169.15  current recipient of food stamps, transitional child care, or 
169.16  transitional medical assistance. 
169.17     A debt does not include any legal obligation to pay a 
169.18  claimant agency for medical care, including hospitalization if 
169.19  the income of the debtor at the time when the medical care was 
169.20  rendered does not exceed the following amount: 
169.21     (1) for an unmarried debtor, an income of $6,400 $8,800 or 
169.22  less; 
169.23     (2) for a debtor with one dependent, an income 
169.24  of $8,200 $11,270 or less; 
169.25     (3) for a debtor with two dependents, an income 
169.26  of $9,700 $13,330 or less; 
169.27     (4) for a debtor with three dependents, an income of 
169.28  $11,000 $15,120 or less; 
169.29     (5) for a debtor with four dependents, an income 
169.30  of $11,600 $15,950 or less; and 
169.31     (6) for a debtor with five or more dependents, an income of 
169.32  $12,100 $16,630 or less.  
169.33     The income amounts in this subdivision shall be adjusted 
169.34  for inflation for debts incurred in calendar years 1991 2001 and 
169.35  thereafter.  The dollar amount of each income level that applied 
169.36  to debts incurred in the prior year shall be increased in the 
170.1   same manner as provided in section 290.06, subdivision 2d, for 
170.2   the expansion of the tax rate brackets 1f of the Internal 
170.3   Revenue Code of 1986, as amended through December 31, 2000, 
170.4   except that for the purposes of this subdivision the percentage 
170.5   increase shall be determined from the year starting September 1, 
170.6   1999, and ending August 31, 2000, as the base year for adjusting 
170.7   for inflation for debts incurred after December 31, 2000. 
170.8      Debt also includes an agreement to pay a MinnesotaCare 
170.9   premium, regardless of the dollar amount of the premium 
170.10  authorized under section 256L.15, subdivision 1a. 
170.11     <b>[EFFECTIVE DATE.]</b> This section is effective for debts 
170.12  incurred after December 31, 2000. 
170.13     Sec. 9.  Minnesota Statutes 2000, section 270A.11, is 
170.14  amended to read: 
170.15     270A.11 [DATA PRIVACY.] 
170.16     Private and confidential data on individuals may be 
170.17  exchanged among the department, the taxpayer's rights advocate, 
170.18  the attorney general, the claimant agency, and the debtor as 
170.19  necessary to accomplish and effectuate the intent of sections 
170.20  270A.01 to 270A.12, as provided by section 13.05, subdivision 4, 
170.21  clause (b).  The department may disclose to the claimant agency 
170.22  only the debtor's name, address, social security number and the 
170.23  amount of the refund, and in the case of a joint return, the 
170.24  name of the debtor's spouse.  Any person employed by, or 
170.25  formerly employed by, a claimant agency who discloses any such 
170.26  information for any other purpose, shall be subject to the civil 
170.27  and criminal penalties of section 270B.18.  Data collected by 
170.28  the department from claimant agencies relating to claims filed 
170.29  under this chapter are private data on individuals. 
170.30     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
170.31  following final enactment. 
170.32     Sec. 10.  Minnesota Statutes 2000, section 270B.02, 
170.33  subdivision 2, is amended to read: 
170.34     Subd. 2.  [PROTECTED NONPUBLIC DATA.] The following are 
170.35  protected nonpublic data as defined in section 13.02, 
170.36  subdivision 13: 
171.1      (1) criteria for determining which computer processed 
171.2   returns are selected for audit; 
171.3      (2) criteria for determining which returns are selected for 
171.4   an in-depth audit; and 
171.5      (3) criteria for determining which accounts receivable 
171.6   balances below a stated amount are written off or canceled; and 
171.7      (4) criteria or information used in determining which 
171.8   alleged criminal violations of any law administered by the 
171.9   commissioner are selected for criminal investigation.  
171.10     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
171.11  following final enactment. 
171.12     Sec. 11.  Minnesota Statutes 2000, section 270B.02, 
171.13  subdivision 3, is amended to read: 
171.14     Subd. 3.  [CONFIDENTIAL DATA ON INDIVIDUALS; PROTECTED 
171.15  NONPUBLIC DATA.] (a) Except as provided in paragraph (b), the 
171.16  name or existence of an informer, informer letters, and other 
171.17  unsolicited data, in whatever form, given to the department of 
171.18  revenue by a person, other than the data subject, who informs 
171.19  that a specific taxpayer is not or may not be in compliance with 
171.20  tax laws, or nontax laws administered by the department of 
171.21  revenue, including laws not listed in section 270B.01, 
171.22  subdivision 8, are confidential data on individuals or protected 
171.23  nonpublic data as defined in section 13.02, subdivisions 3 and 
171.24  13. 
171.25     (b) Data under paragraph (a) may be disclosed with the 
171.26  consent of the informer or upon a written finding by a court 
171.27  that the information provided by the informer was false and that 
171.28  there is evidence that the information was provided in bad 
171.29  faith.  This subdivision does not alter disclosure 
171.30  responsibilities or obligations under the rules of criminal 
171.31  procedure. 
171.32     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
171.33  following final enactment. 
171.34     Sec. 12.  Minnesota Statutes 2000, section 270B.03, 
171.35  subdivision 6, is amended to read: 
171.36     Subd. 6.  [INVESTIGATIVE DATA.] For purposes of any law 
172.1   administered by the department of revenue, including laws not 
172.2   listed in section 270B.01, subdivision 8, investigative data 
172.3   collected or created by the department of revenue in order to 
172.4   prepare a case against a person, whether known or unknown, for 
172.5   the commission of a crime is confidential or protected nonpublic 
172.6   during an investigation.  When the investigation becomes 
172.7   inactive, as defined in section 13.82, subdivision 5, the 
172.8   classifications otherwise applicable under any other laws become 
172.9   effective data is private or nonpublic. 
172.10     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
172.11  following final enactment. 
172.12     Sec. 13.  Minnesota Statutes 2000, section 272.02, 
172.13  subdivision 10, is amended to read: 
172.14     Subd. 10.  [PERSONAL PROPERTY USED FOR POLLUTION CONTROL.] 
172.15  Personal property used primarily for the abatement and control 
172.16  of air, water, or land pollution is exempt to the extent that it 
172.17  is so used, and real property is exempt if it is used primarily 
172.18  for abatement and control of air, water, or land pollution as 
172.19  part of an agricultural operation, as a part of a centralized 
172.20  treatment and recovery facility operating under a permit issued 
172.21  by the Minnesota pollution control agency pursuant to chapters 
172.22  115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 
172.23  and 7045.0020 to 7045.1260, as a wastewater treatment facility 
172.24  and for the treatment, recovery, and stabilization of metals, 
172.25  oils, chemicals, water, sludges, or inorganic materials from 
172.26  hazardous industrial wastes, or as part of an electric 
172.27  generation system.  For purposes of this subdivision, personal 
172.28  property includes ponderous machinery and equipment used in a 
172.29  business or production activity that at common law is considered 
172.30  real property. 
172.31     Any taxpayer requesting exemption of all or a portion of 
172.32  any real property or any equipment or device, or part thereof, 
172.33  operated primarily for the control or abatement of air or, 
172.34  water, or land pollution shall file an application with the 
172.35  commissioner of revenue.  The equipment or device shall meet 
172.36  standards, rules, or criteria prescribed by the Minnesota 
173.1   pollution control agency, and must be installed or operated in 
173.2   accordance with a permit or order issued by that agency.  The 
173.3   Minnesota pollution control agency shall upon request of the 
173.4   commissioner furnish information or and advice to the 
173.5   commissioner.  
173.6      The information and advice furnished by the Minnesota 
173.7   pollution control agency must include statements as to whether 
173.8   the equipment, device, or real property meets a standard, rule, 
173.9   criteria, guideline, policy, or order of the Minnesota pollution 
173.10  control agency, and whether the equipment, device, or real 
173.11  property is installed or operated in accordance with it.  On 
173.12  determining that property qualifies for exemption, the 
173.13  commissioner shall issue an order exempting the property from 
173.14  taxation.  The equipment or, device, or real property shall 
173.15  continue to be exempt from taxation as long as the permit order 
173.16  issued by the Minnesota pollution control agency commissioner 
173.17  remains in effect. 
173.18     <b>[EFFECTIVE DATE.]</b> This section is effective for exemption 
173.19  applications received on or after July 1, 2001.  
173.20     Sec. 14.  Minnesota Statutes 2000, section 273.061, 
173.21  subdivision 1, is amended to read: 
173.22     Subdivision 1.  [OFFICE CREATED; APPOINTMENT, 
173.23  QUALIFICATIONS.] Every county in this state shall have a county 
173.24  assessor.  The county assessor shall be appointed by the board 
173.25  of county commissioners.  The assessor shall be selected and 
173.26  appointed because of knowledge and training in the field of 
173.27  property taxation and appointment shall be approved by the 
173.28  commissioner of revenue before the same shall become effective.  
173.29  Upon receipt by the county commissioners of the commissioner of 
173.30  revenue's refusal to approve an appointment, the term of the 
173.31  appointee shall terminate at the end of that day.  
173.32     The commissioner of revenue may grant approval on a 
173.33  probationary basis for a period of two years.  The commissioner 
173.34  must base the decision to impose a probationary period on 
173.35  objective and consistent criteria.  At the end of the two-year 
173.36  probationary period, the commissioner may either refuse to 
174.1   approve the person's appointment for the remainder of the 
174.2   person's four-year term, approve the person's appointment but 
174.3   only for another two-year probationary period, or 
174.4   unconditionally approve the person's appointment for the 
174.5   remainder of the four-year term for which the person was 
174.6   originally appointed by the county board.  The criteria shall 
174.7   not be considered rules and are not subject to the 
174.8   Administrative Procedure Act. 
174.9      Notwithstanding any law to the contrary, a county assessor 
174.10  must have senior accreditation from the state board of assessors 
174.11  by January 1, 1992, or within two years of the assessor's first 
174.12  appointment under this section, whichever is later. 
174.13     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
174.14  following final enactment. 
174.15     Sec. 15.  Minnesota Statutes 2000, section 273.061, 
174.16  subdivision 2, is amended to read: 
174.17     Subd. 2.  [TERM; VACANCY.] (a) The terms of county 
174.18  assessors appointed under this section shall be four years.  A 
174.19  new term shall begin on January 1 of every fourth year after 
174.20  1973.  When any vacancy in the office occurs, the board of 
174.21  county commissioners, within 30 90 days thereafter, shall fill 
174.22  the same by appointment for the remainder of the term, following 
174.23  the procedure prescribed in subdivision 1.  The term of the 
174.24  county assessor may be terminated by the board of county 
174.25  commissioners at any time, on charges of inefficiency or neglect 
174.26  of duty malfeasance, misfeasance, or nonfeasance by the 
174.27  commissioner of revenue.  If the board of county commissioners 
174.28  does not intend to reappoint a county assessor who has been 
174.29  certified by the state board of assessors, the board shall 
174.30  present written notice to the county assessor not later than 90 
174.31  days prior to the termination of the assessor's term, that it 
174.32  does not intend to reappoint the assessor.  If written notice is 
174.33  not timely made, the county assessor will automatically be 
174.34  reappointed by the board of county commissioners. 
174.35     The commissioner of revenue may recommend to the state 
174.36  board of assessors the nonrenewal, suspension, or revocation of 
175.1   an assessor's license as provided in sections 270.41 to 270.53.  
175.2      (b) In the event of a vacancy in the office of county 
175.3   assessor, through death, resignation or other reasons, the 
175.4   deputy (or chief deputy, if more than one) shall perform the 
175.5   functions of the office.  If there is no deputy, the county 
175.6   auditor shall designate a person to perform the duties of the 
175.7   office until an appointment is made as provided in clause (a).  
175.8   Such person shall perform the duties of the office for a period 
175.9   not exceeding 30 90 days during which the county board must 
175.10  appoint a county assessor.  Such 30-day 90-day period may, 
175.11  however, be extended by written approval of the commissioner of 
175.12  revenue. 
175.13     (c) In the case of the first appointment under paragraph 
175.14  (a) of a county assessor who is accredited but who does not have 
175.15  senior accreditation, an approval of the appointment by the 
175.16  commissioner shall be provisional, provided that a county 
175.17  assessor appointed to a provisional term under this paragraph 
175.18  must reapply to the commissioner at the end of the provisional 
175.19  term.  A provisional term may not exceed two years.  The 
175.20  commissioner shall not approve the appointment for the remainder 
175.21  of the four-year term unless the assessor has obtained senior 
175.22  accreditation. 
175.23     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
175.24  following final enactment. 
175.25     Sec. 16.  Minnesota Statutes 2000, section 273.072, 
175.26  subdivision 1, is amended to read: 
175.27     Subdivision 1.  Any county and any city or town lying 
175.28  wholly or partially within the county and constituting a 
175.29  separate assessment district may, by agreement entered into 
175.30  under section 471.59 and approved by the commissioner of 
175.31  revenue, provide for the assessment of property in the 
175.32  municipality or town by the county assessor.  Any two or more 
175.33  cities or towns constituting separate assessment districts, 
175.34  whether their assessors are elective or appointive, may enter 
175.35  into an agreement under section 471.59 for the assessment of 
175.36  property in the contracting units by the assessor of one of the 
176.1   units or by an assessor who is jointly employed.  
176.2      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
176.3   following final enactment. 
176.4      Sec. 17.  Minnesota Statutes 2000, section 273.1104, 
176.5   subdivision 2, is amended to read: 
176.6      Subd. 2.  [NOTICE OF MARKET VALUE.] On or before May 1 in 
176.7   each year, the commissioner shall send to each person subject to 
176.8   the tax on unmined iron ores and to each taxing district 
176.9   affected, a notice of the market value of the unmined ores as 
176.10  determined by the commissioner prior to adjustment under 
176.11  subdivision 1.  Said notice shall be sent by mail directed to 
176.12  such person at the address given in the report filed and the 
176.13  assessor of such taxing district, but the validity of the tax 
176.14  shall not be affected by the failure of the commissioner of 
176.15  revenue to mail such notice or the failure of the person subject 
176.16  to the tax to receive it. 
176.17     On the first secular day following May 20, the commissioner 
176.18  of revenue shall hold a hearing which may be adjourned from day 
176.19  to day.  All relevant and material evidence having probative 
176.20  value with respect to the issues shall be submitted at the 
176.21  hearing and such hearing shall not be a "contested case" within 
176.22  the meaning of section 14.02, subdivision 3.  Every person 
176.23  subject to such tax may at such hearing present evidence and 
176.24  argument on any matter bearing upon the validity or correctness 
176.25  of the tax determined to be due, and the commissioner of revenue 
176.26  shall review the determination of such tax. 
176.27     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
176.28  following final enactment. 
176.29     Sec. 18.  Minnesota Statutes 2000, section 273.111, 
176.30  subdivision 4, is amended to read: 
176.31     Subd. 4.  [DETERMINATION OF VALUE.] The value of any real 
176.32  estate described in subdivision 3 shall upon timely application 
176.33  by the owner, in the manner provided in subdivision 8, be 
176.34  determined solely with reference to its appropriate agricultural 
176.35  classification and value notwithstanding sections 272.03, 
176.36  subdivision 8, and 273.11.  In determining the value for ad 
177.1   valorem tax purposes, the assessor shall use sales data obtained 
177.2   from for agricultural lands located outside the seven 
177.3   metropolitan counties but within the region used for computing 
177.4   the range of values under section 273.11, subdivision 10.  The 
177.5   sales shall have having similar soil types, number of degree 
177.6   days, and other similar agricultural characteristics as 
177.7   contained in section 273.11, subdivision 10.  Furthermore, the 
177.8   assessor shall not consider any added values resulting from 
177.9   nonagricultural factors. 
177.10     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
177.11  following final enactment. 
177.12     Sec. 19.  Minnesota Statutes 2000, section 273.121, is 
177.13  amended to read: 
177.14     273.121 [VALUATION OF REAL PROPERTY, NOTICE.] 
177.15     Any county assessor or city assessor having the powers of a 
177.16  county assessor, valuing or classifying taxable real property 
177.17  shall in each year notify those persons whose property is to be 
177.18  assessed or reclassified included on the assessment roll that 
177.19  year if the person's address is known to the assessor, otherwise 
177.20  the occupant of the property.  The notice shall be in writing 
177.21  and shall be sent by ordinary mail at least ten days before the 
177.22  meeting of the local board of review or appeal and equalization 
177.23  under section 274.01 or the review process established under 
177.24  section 274.13, subdivision 1c.  It shall contain:  (1) the 
177.25  market value for the current and prior assessment, (2) the 
177.26  limited market value under section 273.11, subdivision 1a for 
177.27  the current and prior assessment, (3) the qualifying amount of 
177.28  any improvements under section 273.11, subdivision 16 for the 
177.29  current assessment, (4) the market value subject to taxation 
177.30  after subtracting the amount of any qualifying improvements for 
177.31  the current assessment, (5) the new classification of the 
177.32  property for the current and prior assessment, (6) a note that 
177.33  if the property is homestead and at least 35 years old, 
177.34  improvements made to the property may be eligible for a 
177.35  valuation exclusion under section 273.11, subdivision 16, (7) 
177.36  the assessor's office address, and (8) the dates, places, and 
178.1   times set for the meetings of the local board of review or 
178.2   appeal and equalization, the review process established under 
178.3   section 274.13, subdivision 1c, and the county board of appeal 
178.4   and equalization.  If the assessment roll is not complete, the 
178.5   notice shall be sent by ordinary mail at least ten days prior to 
178.6   the date on which the board of review has adjourned The 
178.7   commissioner of revenue shall specify the form of the notice.  
178.8   The assessor shall attach to the assessment roll a statement 
178.9   that the notices required by this section have been mailed.  Any 
178.10  assessor who is not provided sufficient funds from the 
178.11  assessor's governing body to provide such notices, may make 
178.12  application to the commissioner of revenue to finance such 
178.13  notices.  The commissioner of revenue shall conduct an 
178.14  investigation and, if satisfied that the assessor does not have 
178.15  the necessary funds, issue a certification to the commissioner 
178.16  of finance of the amount necessary to provide such notices.  The 
178.17  commissioner of finance shall issue a warrant for such amount 
178.18  and shall deduct such amount from any state payment to such 
178.19  county or municipality.  The necessary funds to make such 
178.20  payments are hereby appropriated.  Failure to receive the notice 
178.21  shall in no way affect the validity of the assessment, the 
178.22  resulting tax, the procedures of any board of review or 
178.23  equalization, or the enforcement of delinquent taxes by 
178.24  statutory means. 
178.25     <b>[EFFECTIVE DATE.]</b> This section is effective for notices 
178.26  required to be mailed in 2002 and thereafter. 
178.27     Sec. 20.  Minnesota Statutes 2000, section 274.01, 
178.28  subdivision 1, is amended to read: 
178.29     Subdivision 1.  [ORDINARY BOARD; MEETINGS, DEADLINES, 
178.30  GRIEVANCES.] (a) The town board of a town, or the council or 
178.31  other governing body of a city, is the board of review appeal 
178.32  and equalization except (1) in cities whose charters provide for 
178.33  a board of equalization or (2) in any city or town that has 
178.34  transferred its local board of review power and duties to the 
178.35  county board as provided in subdivision 3.  The county assessor 
178.36  shall fix a day and time when the board or the board of 
179.1   equalization shall meet in the assessment districts of the 
179.2   county.  Notwithstanding any law or city charter to the 
179.3   contrary, a city board of equalization shall be referred to as a 
179.4   board of appeal and equalization.  On or before February 15 of 
179.5   each year the assessor shall give written notice of the time to 
179.6   the city or town clerk.  Notwithstanding the provisions of any 
179.7   charter to the contrary, the meetings must be held between April 
179.8   1 and May 31 each year.  The clerk shall give published and 
179.9   posted notice of the meeting at least ten days before the date 
179.10  of the meeting.  
179.11     If in any county, at least 25 percent of the total net tax 
179.12  capacity of a city or town is noncommercial seasonal residential 
179.13  recreational property classified under section 273.13, 
179.14  subdivision 25, the county must hold two countywide 
179.15  informational meetings on Saturdays.  The meetings will allow 
179.16  noncommercial seasonal residential recreational taxpayers to 
179.17  discuss their property valuation with the appropriate assessment 
179.18  staff.  These Saturday informational meetings must be scheduled 
179.19  to allow the owner of the noncommercial seasonal residential 
179.20  recreational property the opportunity to attend one of the 
179.21  meetings prior to the scheduled board of review for their city 
179.22  or town.  The Saturday meeting dates must be contained on the 
179.23  notice of valuation of real property under section 273.121.  
179.24     The board shall meet at the office of the clerk to review 
179.25  the assessment and classification of property in the town or 
179.26  city.  No changes in valuation or classification which are 
179.27  intended to correct errors in judgment by the county assessor 
179.28  may be made by the county assessor after the board of review has 
179.29  adjourned in those cities or towns that hold a local board of 
179.30  review; however, corrections of errors that are merely clerical 
179.31  in nature or changes that extend homestead treatment to property 
179.32  are permitted after adjournment until the tax extension date for 
179.33  that assessment year.  The changes must be fully documented and 
179.34  maintained in the assessor's office and must be available for 
179.35  review by any person.  A copy of the changes made during this 
179.36  period in those cities or towns that hold a local board of 
180.1   review must be sent to the county board no later than December 
180.2   31 of the assessment year.  
180.3      (b) The board shall determine whether the taxable property 
180.4   in the town or city has been properly placed on the list and 
180.5   properly valued by the assessor.  If real or personal property 
180.6   has been omitted, the board shall place it on the list with its 
180.7   market value, and correct the assessment so that each tract or 
180.8   lot of real property, and each article, parcel, or class of 
180.9   personal property, is entered on the assessment list at its 
180.10  market value.  No assessment of the property of any person may 
180.11  be raised unless the person has been duly notified of the intent 
180.12  of the board to do so.  On application of any person feeling 
180.13  aggrieved, the board shall review the assessment or 
180.14  classification, or both, and correct it as appears just.  The 
180.15  board may not make an individual market value adjustment or 
180.16  classification change that would benefit the property in cases 
180.17  where the owner or other person having control over the property 
180.18  will not permit the assessor to inspect the property and the 
180.19  interior of any buildings or structures.  
180.20     (c) A local board of review may reduce assessments upon 
180.21  petition of the taxpayer but the total reductions must not 
180.22  reduce the aggregate assessment made by the county assessor by 
180.23  more than one percent.  If the total reductions would lower the 
180.24  aggregate assessments made by the county assessor by more than 
180.25  one percent, none of the adjustments may be made.  The assessor 
180.26  shall correct any clerical errors or double assessments 
180.27  discovered by the board of review without regard to the one 
180.28  percent limitation.  
180.29     (d) A majority of the members may act at the meeting, and 
180.30  adjourn from day to day until they finish hearing the cases 
180.31  presented.  The assessor shall attend, with the assessment books 
180.32  and papers, and take part in the proceedings, but must not 
180.33  vote.  The county assessor, or an assistant delegated by the 
180.34  county assessor shall attend the meetings.  The board shall list 
180.35  separately, on a form appended to the assessment book, all 
180.36  omitted property added to the list by the board and all items of 
181.1   property increased or decreased, with the market value of each 
181.2   item of property, added or changed by the board, placed opposite 
181.3   the item.  The county assessor shall enter all changes made by 
181.4   the board in the assessment book.  
181.5      (e) Except as provided in subdivision 3, if a person fails 
181.6   to appear in person, by counsel, or by written communication 
181.7   before the board after being duly notified of the board's intent 
181.8   to raise the assessment of the property, or if a person feeling 
181.9   aggrieved by an assessment or classification fails to apply for 
181.10  a review of the assessment or classification, the person may not 
181.11  appear before the county board of appeal and equalization for a 
181.12  review of the assessment or classification.  This paragraph does 
181.13  not apply if an assessment was made after the local board 
181.14  meeting, as provided in section 273.01, or if the person can 
181.15  establish not having received notice of market value at least 
181.16  five days before the local board of review meeting.  
181.17     (f) The local board of review or the board of equalization 
181.18  must complete its work and adjourn within 20 days from the time 
181.19  of convening stated in the notice of the clerk, unless a longer 
181.20  period is approved by the commissioner of revenue.  No action 
181.21  taken after that date is valid.  All complaints about an 
181.22  assessment or classification made after the meeting of the board 
181.23  must be heard and determined by the county board of 
181.24  equalization.  A nonresident may, at any time, before the 
181.25  meeting of the board of review file written objections to an 
181.26  assessment or classification with the county assessor.  The 
181.27  objections must be presented to the board of review at its 
181.28  meeting by the county assessor for its consideration. 
181.29     <b>[EFFECTIVE DATE.]</b> This section is effective January 1, 
181.30  2002, and thereafter. 
181.31     Sec. 21.  Minnesota Statutes 2000, section 274.13, 
181.32  subdivision 1, is amended to read: 
181.33     Subdivision 1.  [MEMBERS; MEETINGS; RULES FOR EQUALIZING 
181.34  ASSESSMENTS.] The county commissioners, or a majority of them, 
181.35  with the county auditor, or, if the auditor cannot be present, 
181.36  the deputy county auditor, or, if there is no deputy, the court 
182.1   administrator of the district court, shall form a board for the 
182.2   equalization of the assessment of the property of the county, 
182.3   including the property of all cities whose charters provide for 
182.4   a board of equalization.  This board shall be referred to as the 
182.5   county board of appeal and equalization.  The board shall meet 
182.6   annually, on the date specified in section 274.14, at the office 
182.7   of the auditor.  Each member shall take an oath to fairly and 
182.8   impartially perform duties as a member.  The board shall examine 
182.9   and compare the returns of the assessment of property of the 
182.10  towns or districts, and equalize them so that each tract or lot 
182.11  of real property and each article or class of personal property 
182.12  is entered on the assessment list at its market value, subject 
182.13  to the following rules: 
182.14     (1) The board shall raise the valuation of each tract or 
182.15  lot of real property which in its opinion is returned below its 
182.16  market value to the sum believed to be its market value.  The 
182.17  board must first give notice of intention to raise the valuation 
182.18  to the person in whose name it is assessed, if the person is a 
182.19  resident of the county.  The notice must fix a time and place 
182.20  for a hearing.  
182.21     (2) The board shall reduce the valuation of each tract or 
182.22  lot which in its opinion is returned above its market value to 
182.23  the sum believed to be its market value. 
182.24     (3) The board shall raise the valuation of each class of 
182.25  personal property which in its opinion is returned below its 
182.26  market value to the sum believed to be its market value.  It 
182.27  shall raise the aggregate value of the personal property of 
182.28  individuals, firms, or corporations, when it believes that the 
182.29  aggregate valuation, as returned, is less than the market value 
182.30  of the taxable personal property possessed by the individuals, 
182.31  firms, or corporations, to the sum it believes to be the market 
182.32  value.  The board must first give notice to the persons of 
182.33  intention to do so.  The notice must set a time and place for a 
182.34  hearing. 
182.35     (4) The board shall reduce the valuation of each class of 
182.36  personal property that is returned above its market value to the 
183.1   sum it believes to be its market value.  Upon complaint of a 
183.2   party aggrieved, the board shall reduce the aggregate valuation 
183.3   of the individual's personal property, or of any class of 
183.4   personal property for which the individual is assessed, which in 
183.5   its opinion has been assessed at too large a sum, to the sum it 
183.6   believes was the market value of the individual's personal 
183.7   property of that class.  
183.8      (5) The board must not reduce the aggregate value of all 
183.9   the property of its county, as submitted to the county board of 
183.10  equalization, with the additions made by the auditor under this 
183.11  chapter, by more than one percent of its whole valuation.  The 
183.12  board may raise the aggregate valuation of real property, and of 
183.13  each class of personal property, of the county, or of any town 
183.14  or district of the county, when it believes it is below the 
183.15  market value of the property, or class of property, to the 
183.16  aggregate amount it believes to be its market value. 
183.17     (6) The board shall change the classification of any 
183.18  property which in its opinion is not properly classified. 
183.19     <b>[EFFECTIVE DATE.]</b> This section is effective January 1, 
183.20  2002, and thereafter. 
183.21     Sec. 22.  Minnesota Statutes 2000, section 282.04, 
183.22  subdivision 2, is amended to read: 
183.23     Subd. 2.  [RIGHTS BEFORE SALE; IMPROVEMENTS, INSURANCE, 
183.24  DEMOLITION.] Before the sale of a parcel of forfeited land the 
183.25  county auditor may, with the approval of the county board of 
183.26  commissioners, provide for the repair and improvement of any 
183.27  building or structure located upon the parcel, and may provide 
183.28  for maintenance of tax-forfeited lands, if it is determined by 
183.29  the county board that such repairs, improvements, or maintenance 
183.30  are necessary for the operation, use, preservation and safety of 
183.31  the building or structure.  If so authorized by the county 
183.32  board, the county auditor may insure the building or structure 
183.33  against loss or damage resulting from fire or windstorm, may 
183.34  purchase workers' compensation insurance to insure the county 
183.35  against claims for injury to the persons employed in the 
183.36  building or structure by the county, and may insure the county, 
184.1   its officers and employees against claims for injuries to 
184.2   persons or property because of the management, use or operation 
184.3   of the building or structure.  The county auditor may, with the 
184.4   approval of the county board, provide for the demolition of the 
184.5   building or structure, which has been determined by the county 
184.6   board to be within the purview of section 299F.10, and for the 
184.7   sale of salvaged materials from the building or structure.  The 
184.8   county auditor, with the approval of the county board, may 
184.9   provide for the sale of abandoned personal property under either 
184.10  chapter 345 or 566, as appropriate.  The sale may be made by the 
184.11  sheriff using the procedures for the sale of abandoned property 
184.12  in section 345.15 or by the county auditor using the procedures 
184.13  for the sale of abandoned property in section 504B.271.  The net 
184.14  proceeds from any sale of the personal property, salvaged 
184.15  materials, timber or other products, or leases made under this 
184.16  law must be deposited in the forfeited tax sale fund and must be 
184.17  distributed in the same manner as if the parcel had been sold. 
184.18     The county auditor, with the approval of the county board, 
184.19  may provide for the demolition of any structure on tax-forfeited 
184.20  lands, if in the opinion of the county board, the county 
184.21  auditor, and the land commissioner, if there is one, the sale of 
184.22  the land with the structure on it, or the continued existence of 
184.23  the structure by reason of age, dilapidated condition or 
184.24  excessive size as compared with nearby structures, will result 
184.25  in a material lessening of net tax capacities of real estate in 
184.26  the vicinity of the tax-forfeited lands, or if the demolition of 
184.27  the structure or structures will aid in disposing of the 
184.28  tax-forfeited property. 
184.29     Before the sale of a parcel of forfeited land located in an 
184.30  urban area, the county auditor may with the approval of the 
184.31  county board provide for the grading of the land by filling or 
184.32  the removal of any surplus material from it.  If the physical 
184.33  condition of forfeited lands is such that a reasonable grading 
184.34  of the lands is necessary for the protection and preservation of 
184.35  the property of any adjoining owner, the adjoining property 
184.36  owner or owners may apply to the county board to have the 
185.1   grading done.  If, after considering the application, the county 
185.2   board believes that the grading will enhance the value of the 
185.3   forfeited lands commensurate with the cost involved, it may 
185.4   approve it, and the work must be performed under the supervision 
185.5   of the county or city engineer, as the case may be, and the 
185.6   expense paid from the forfeited tax sale fund. 
185.7      Sec. 23.  Minnesota Statutes 2000, section 287.08, is 
185.8   amended to read: 
185.9      287.08 [TAX, HOW PAYABLE; RECEIPTS.] 
185.10     (a) The tax imposed by sections 287.01 to 287.12 must be 
185.11  paid to the treasurer of any county in this state in which the 
185.12  real property or some part is located at or before the time of 
185.13  filing the mortgage for record.  The treasurer shall endorse 
185.14  receipt on the mortgage and the receipt is conclusive proof that 
185.15  the tax has been paid in the amount stated and authorizes any 
185.16  county recorder or registrar of titles to record the mortgage.  
185.17  Its form, in substance, shall be "registration tax hereon of 
185.18  ..................... dollars paid."  If the mortgage is exempt 
185.19  from taxation the endorsement shall, in substance, be "exempt 
185.20  from registration tax."  In either case the receipt must be 
185.21  signed by the treasurer.  In case the treasurer is unable to 
185.22  determine whether a claim of exemption should be allowed, the 
185.23  tax must be paid as in the case of a taxable mortgage.  
185.24     (b) Upon written application of the taxpayer, The county 
185.25  treasurer may refund in whole or in part any mortgage registry 
185.26  tax that has been erroneously paid, or a person having paid a 
185.27  mortgage registry tax amount may seek a refund of the tax, or 
185.28  other appropriate relief, overpayment if a written application 
185.29  by the taxpayer is submitted to the county treasurer within 
185.30  three and one-half years from the date of the overpayment.  If 
185.31  the county has not issued a denial of the application, the 
185.32  taxpayer may bring an action in tax court in the county in which 
185.33  the tax was paid at any time after the expiration of six months 
185.34  from the time that the application was submitted.  A denial of 
185.35  refund may be appealed within 60 days from the date of the 
185.36  denial by bringing an action in tax court in the county in which 
186.1   the tax was paid, within 60 days of the payment.  The action is 
186.2   commenced by the serving of a petition for relief on the county 
186.3   treasurer, and by filing a copy with the court.  The county 
186.4   attorney shall defend the action.  The county treasurer shall 
186.5   notify the treasurer of each county that has or would receive a 
186.6   portion of the tax as paid.  
186.7      (c) If the county treasurer determines a refund should be 
186.8   paid, or if a refund is ordered by the court, the county 
186.9   treasurer of each county that actually received a portion of the 
186.10  tax shall immediately pay a proportionate share of three percent 
186.11  of the refund using any available county funds.  The county 
186.12  treasurer of each county that received, or would have received, 
186.13  a portion of the tax shall also pay their county's proportionate 
186.14  share of the remaining 97 percent of the court-ordered refund on 
186.15  or before the 20th day of the following month using solely the 
186.16  mortgage registry tax funds that would be paid to the 
186.17  commissioner of revenue on that date under section 287.12.  If 
186.18  the funds on hand under this procedure are insufficient to fully 
186.19  fund 97 percent of the court-ordered refund, the county 
186.20  treasurer of the county in which the action was brought shall 
186.21  file a claim with the commissioner of revenue under section 
186.22  16A.48 for the remaining portion of 97 percent of the refund, 
186.23  and shall pay over the remaining portion upon receipt of a 
186.24  warrant from the state issued pursuant to the claim. 
186.25     (d) When any mortgage covers real property located in more 
186.26  than one county in this state the total tax must be paid to the 
186.27  treasurer of the county where the mortgage is first presented 
186.28  for recording, and the payment must be receipted as provided in 
186.29  paragraph (a).  If the principal debt or obligation secured by 
186.30  such a multiple county mortgage exceeds $1,000,000, the nonstate 
186.31  portion of the tax must be divided and paid over by the county 
186.32  treasurer receiving it, on or before the 20th day of each month 
186.33  after receipt, to the county or counties entitled in the ratio 
186.34  that the market value of the real property covered by the 
186.35  mortgage in each county bears to the market value of all the 
186.36  real property in this state described in the mortgage.  In 
187.1   making the division and payment the county treasurer shall send 
187.2   a statement giving the description of the real property 
187.3   described in the mortgage and the market value of the part 
187.4   located in each county.  For this purpose, the treasurer of any 
187.5   county may require the treasurer of any other county to certify 
187.6   to the former the market valuation of any tract of real property 
187.7   in any mortgage. 
187.8      <b>[EFFECTIVE DATE.]</b> This section is effective for 
187.9   overpayments made on or after July 1, 2001. 
187.10     Sec. 24.  Minnesota Statutes 2000, section 287.20, 
187.11  subdivision 2, is amended to read: 
187.12     Subd. 2.  [CONSIDERATION.] (a) "Consideration" means 
187.13  generally the total monetary value that is given in return for a 
187.14  conveyance of real property in this state and includes all 
187.15  lump-sum payments, all prior or future installment payments that 
187.16  are required under the agreement between the parties, and the 
187.17  fair market value of any property taken, or to be taken, in 
187.18  exchange. 
187.19     (b) Consideration does not include the reasonable and 
187.20  lawful amounts of interest paid for the privilege of paying the 
187.21  purchase price in installments and the fair market value of any 
187.22  items of intangible personal property that are conveyed by the 
187.23  taxable instrument. 
187.24     (c) Consideration does not include the amount paid for the 
187.25  personal property located on the real property being conveyed 
187.26  and transferred as a part of the total consideration, except 
187.27  that the amount paid for the personal property located on the 
187.28  real property being conveyed must be included if the real 
187.29  property being conveyed is a one-, two-, or three-unit 
187.30  residential structure. 
187.31     (d) When a conveyance of real property is made pursuant to 
187.32  a contract for deed, the consideration is the price for the real 
187.33  property reflected in the contract; except that, subject to the 
187.34  limitations under section 287.221, when the conveyance is made 
187.35  by a person engaged in the business of land sales or 
187.36  construction of buildings and other improvements, or by an 
188.1   affiliated person if the contract for deed, or other agreement 
188.2   entered into as a condition to the seller executing the 
188.3   contract, requires the property to be improved during the term 
188.4   of the contract and the price of the real property as reflected 
188.5   in the contract does not include the consideration for the 
188.6   required improvements, then the consideration is the amount paid 
188.7   for the land price for the real property as reflected in the 
188.8   contract and the consideration for the required improvements 
188.9   added during the term of the contract.  By January 1, 2001, the 
188.10  commissioner shall adopt rules that define the phrases "engaged 
188.11  in the business of land sales or construction of buildings and 
188.12  other improvements" and "affiliated person" as those phrases are 
188.13  used in this paragraph. 
188.14     (e) "Total consideration" has the same meaning as 
188.15  consideration. 
188.16     (f) "Consideration, exclusive of the value of any lien or 
188.17  encumbrance remaining at the time of sale" or "net 
188.18  consideration" means the amount of consideration as reduced by 
188.19  the amount outstanding under any lien that attached to the real 
188.20  property prior to the time of sale and that is not released or 
188.21  satisfied as a result of the sale. 
188.22     <b>[EFFECTIVE DATE.]</b> This section is effective for deeds 
188.23  acknowledged and recorded after June 30, 2001. 
188.24     Sec. 25.  Minnesota Statutes 2000, section 287.20, 
188.25  subdivision 9, is amended to read: 
188.26     Subd. 9.  [REORGANIZATION.] "Reorganization" means the 
188.27  transfer of substantially all of the assets of a corporation, a 
188.28  limited liability company, or a partnership not in the usual or 
188.29  regular course of business if at the time of the transfer the 
188.30  transfer qualifies as:  (i) a corporate reorganization under 
188.31  section 368(a) of the Internal Revenue Code of 1986, as amended 
188.32  through December 31, 2000; or (ii) a transfer pursuant to the 
188.33  continuation of an existing partnership under section 708 of the 
188.34  Internal Revenue Code of 1986, as amended through December 31, 
188.35  2000. 
188.36     <b>[EFFECTIVE DATE.]</b> This section is effective for taxable 
189.1   deeds acknowledged and recorded after June 30, 2001.  
189.2      Sec. 26.  Minnesota Statutes 2000, section 287.21, 
189.3   subdivision 1, is amended to read: 
189.4      Subdivision 1.  [DETERMINATION OF TAX.] (a) A tax is 
189.5   imposed on each deed or instrument by which any real property in 
189.6   this state is granted, assigned, transferred, or otherwise 
189.7   conveyed.  The tax applies against the net consideration. 
189.8      (b) The tax is determined in the following manner:  (1) 
189.9   when transfers are made by instruments pursuant to mergers, 
189.10  consolidations, sales, or transfers of substantially all of the 
189.11  assets of the entities as defined in section 287.20, subdivision 
189.12  9, pursuant to plans of reorganization, the tax is $1.65; (2) 
189.13  when there is no consideration or when the consideration, 
189.14  exclusive of the value of any lien or encumbrance remaining 
189.15  thereon at the time of sale, is $500 or less, the tax is $1.65; 
189.16  or (3) when the consideration, exclusive of the value of any 
189.17  lien or encumbrance remaining at the time of sale, exceeds $500, 
189.18  the tax is $1.65 plus $1.65 for each additional $500 or fraction 
189.19  of that amount .0033 of the net consideration. 
189.20     (c) The tax is due at the time a taxable deed or instrument 
189.21  is presented for recording. 
189.22     <b>[EFFECTIVE DATE.]</b> This section is effective for documents 
189.23  acknowledged and recorded after June 30, 2001. 
189.24     Sec. 27.  Minnesota Statutes 2000, section 287.28, is 
189.25  amended to read: 
189.26     287.28 [REFUNDS OR REDEMPTION.] 
189.27     (a) The county treasurer may refund in whole or in part any 
189.28  tax which has been erroneously paid and may allow for or redeem 
189.29  such of the stamps, issued under the authority of sections 
189.30  287.20 to 287.31 as may that have been spoiled, destroyed, or 
189.31  rendered useless or unfit for the purpose intended or for which 
189.32  the owner may have no use or which through mistake may have been 
189.33  improperly or unnecessarily used.  Such order Redemption shall 
189.34  be made only upon written application of the taxpayer.  
189.35     (b) A person having paid a deed tax amount may seek a 
189.36  refund of the tax, or other appropriate relief, The county 
190.1   treasurer may refund any deed tax overpayment if a written 
190.2   application by the taxpayer is submitted to the county treasurer 
190.3   within three and one-half years from the date of the 
190.4   overpayment.  If the county has not issued a denial of the 
190.5   application, the taxpayer may bring an action in tax court in 
190.6   the county in which the tax was paid at any time after the 
190.7   expiration of six months from the time that the application was 
190.8   submitted.  A denial of refund may be appealed within 60 days 
190.9   from the date of the denial by commencing an action in tax court 
190.10  in the county where the tax was paid, within 60 days of the 
190.11  payment.  The action is commenced by serving a petition for 
190.12  relief on the county treasurer, and filing a copy with the 
190.13  court.  The county attorney shall defend the action.  The county 
190.14  treasurer shall notify the treasurer of each county that has, or 
190.15  would receive a portion of the tax as paid.  Any refund of deed 
190.16  tax which the county treasurer determines should be made, and 
190.17  any court ordered refund of deed tax, shall be accomplished 
190.18  using the refund procedures in section 287.08. 
190.19     <b>[EFFECTIVE DATE.]</b> This section is effective for 
190.20  overpayments occurring after June 30, 2001.  
190.21     Sec. 28.  Minnesota Statutes 2000, section 289A.12, 
190.22  subdivision 3, is amended to read: 
190.23     Subd. 3.  [RETURNS OR REPORTS BY PARTNERSHIPS, FIDUCIARIES, 
190.24  AND S CORPORATIONS.] (a) Partnerships must file a return with 
190.25  the commissioner for each taxable year.  The return must conform 
190.26  to the requirements of section 290.31 290.311, and must include 
190.27  the names and addresses of the partners entitled to a 
190.28  distributive share in their taxable net income, gain, loss, or 
190.29  credit, and the amount of the distributive share to which each 
190.30  is entitled.  A partnership required to file a return for a 
190.31  partnership taxable year must furnish a copy of the information 
190.32  required to be shown on the return to a person who is a partner 
190.33  at any time during the taxable year, on or before the day on 
190.34  which the return for the taxable year was filed. 
190.35     (b) The fiduciary of an estate or trust making the return 
190.36  required to be filed under section 289A.08, subdivision 2, for a 
191.1   taxable year must give a beneficiary who receives a distribution 
191.2   from the estate or trust with respect to the taxable year or to 
191.3   whom any item with respect to the taxable year is allocated, a 
191.4   statement containing the information required to be shown on the 
191.5   return, on or before the date on which the return was filed. 
191.6      (c) An S corporation must file a return with the 
191.7   commissioner for a taxable year during which an election under 
191.8   section 290.9725 is in effect, stating specifically the names 
191.9   and addresses of the persons owning stock in the corporation at 
191.10  any time during the taxable year, the number of shares of stock 
191.11  owned by a shareholder at all times during the taxable year, the 
191.12  shareholder's pro rata share of each item of the corporation for 
191.13  the taxable year, and other information the commissioner 
191.14  requires.  An S corporation required to file a return under this 
191.15  paragraph for any taxable year must furnish a copy of the 
191.16  information shown on the return to the person who is a 
191.17  shareholder at any time during the taxable year, on or before 
191.18  the day on which the return for the taxable year was filed. 
191.19     (d) The partnership or S corporation return must be signed 
191.20  by someone designated by the partnership or S corporation. 
191.21     <b>[EFFECTIVE DATE.]</b> This section is effective for tax years 
191.22  beginning after December 31, 2000. 
191.23     Sec. 29.  Minnesota Statutes 2000, section 289A.50, 
191.24  subdivision 2a, is amended to read: 
191.25     Subd. 2a.  [REFUND OF SALES TAX TO PURCHASERS.] If a vendor 
191.26  has collected from a purchaser a tax on a transaction that is 
191.27  not subject to the tax imposed by chapter 297A, the purchaser 
191.28  may apply directly to the commissioner for a refund under this 
191.29  section if: 
191.30     (a) the purchaser is currently registered to collect and 
191.31  remit the sales and tax or to remit the use tax; and 
191.32     (b) the amount of the refund applied for exceeds $500. 
191.33     The purchaser may not file more than two applications for 
191.34  refund under this subdivision in a calendar year. 
191.35     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
191.36  following final enactment. 
192.1      Sec. 30.  Minnesota Statutes 2000, section 290.06, 
192.2   subdivision 2c, is amended to read: 
192.3      Subd. 2c.  [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 
192.4   AND TRUSTS.] (a) The income taxes imposed by this chapter upon 
192.5   married individuals filing joint returns and surviving spouses 
192.6   as defined in section 2(a) of the Internal Revenue Code must be 
192.7   computed by applying to their taxable net income the following 
192.8   schedule of rates: 
192.9      (1) On the first $25,680, 5.35 percent; 
192.10     (2) On all over $25,680, but not over $102,030, 7.05 
192.11  percent; 
192.12     (3) On all over $102,030, 7.85 percent. 
192.13     Married individuals filing separate returns, estates, and 
192.14  trusts must compute their income tax by applying the above rates 
192.15  to their taxable income, except that the income brackets will be 
192.16  one-half of the above amounts.  
192.17     (b) The income taxes imposed by this chapter upon unmarried 
192.18  individuals must be computed by applying to taxable net income 
192.19  the following schedule of rates: 
192.20     (1) On the first $17,570, 5.35 percent; 
192.21     (2) On all over $17,570, but not over $57,710, 7.05 
192.22  percent; 
192.23     (3) On all over $57,710, 7.85 percent. 
192.24     (c) The income taxes imposed by this chapter upon unmarried 
192.25  individuals qualifying as a head of household as defined in 
192.26  section 2(b) of the Internal Revenue Code must be computed by 
192.27  applying to taxable net income the following schedule of rates: 
192.28     (1) On the first $21,630, 5.35 percent; 
192.29     (2) On all over $21,630, but not over $86,910, 7.05 
192.30  percent; 
192.31     (3) On all over $86,910, 7.85 percent. 
192.32     (d) In lieu of a tax computed according to the rates set 
192.33  forth in this subdivision, the tax of any individual taxpayer 
192.34  whose taxable net income for the taxable year is less than an 
192.35  amount determined by the commissioner must be computed in 
192.36  accordance with tables prepared and issued by the commissioner 
193.1   of revenue based on income brackets of not more than $100.  The 
193.2   amount of tax for each bracket shall be computed at the rates 
193.3   set forth in this subdivision, provided that the commissioner 
193.4   may disregard a fractional part of a dollar unless it amounts to 
193.5   50 cents or more, in which case it may be increased to $1. 
193.6      (e) An individual who is not a Minnesota resident for the 
193.7   entire year must compute the individual's Minnesota income tax 
193.8   as provided in this subdivision.  After the application of the 
193.9   nonrefundable credits provided in this chapter, the tax 
193.10  liability must then be multiplied by a fraction in which:  
193.11     (1) the numerator is the individual's Minnesota source 
193.12  federal adjusted gross income as defined in section 62 of the 
193.13  Internal Revenue Code and increased by the additions required 
193.14  under section 290.01, subdivision 19a, clauses (1) and (6), and 
193.15  reduced by the Minnesota assignable portion of the subtraction 
193.16  for United States government interest under section 290.01, 
193.17  subdivision 19b, clause (1), after applying the allocation and 
193.18  assignability provisions of section 290.081, clause (a), or 
193.19  290.17; and 
193.20     (2) the denominator is the individual's federal adjusted 
193.21  gross income as defined in section 62 of the Internal Revenue 
193.22  Code of 1986, increased by the amounts specified in section 
193.23  290.01, subdivision 19a, clauses (1) and (6), and reduced by the 
193.24  amounts specified in section 290.01, subdivision 19b, clause (1).
193.25     <b>[EFFECTIVE DATE.]</b> This section is effective for taxable 
193.26  years beginning after December 31, 2000. 
193.27     Sec. 31.  Minnesota Statutes 2000, section 290.06, 
193.28  subdivision 23, is amended to read: 
193.29     Subd. 23.  [REFUND OF CONTRIBUTIONS TO POLITICAL PARTIES 
193.30  AND CANDIDATES.] (a) A taxpayer may claim a refund equal to the 
193.31  amount of the taxpayer's contributions made in the calendar year 
193.32  to candidates and to a political party.  The maximum refund for 
193.33  an individual must not exceed $50 and for a married couple, 
193.34  filing jointly, must not exceed $100.  A refund of a 
193.35  contribution is allowed only if the taxpayer files a form 
193.36  required by the commissioner and attaches to the form a copy of 
194.1   an official refund receipt form issued by the candidate or party 
194.2   and signed by the candidate, the treasurer of the candidate's 
194.3   principal campaign committee, or the chair or treasurer of the 
194.4   party unit, after the contribution was received.  The receipt 
194.5   forms must be numbered, and the data on the receipt that are not 
194.6   public must be made available to the campaign finance and public 
194.7   disclosure board upon its request.  A claim must be filed with 
194.8   the commissioner no sooner than January 1 of the calendar year 
194.9   in which the contribution was made and no later than April 15 of 
194.10  the calendar year following the calendar year in which the 
194.11  contribution was made.  A taxpayer may file only one claim per 
194.12  calendar year.  Amounts paid by the commissioner after June 15 
194.13  of the calendar year following the calendar year in which the 
194.14  contribution was made must include interest at the rate 
194.15  specified in section 270.76. 
194.16     (b) No refund is allowed under this subdivision for a 
194.17  contribution to a candidate unless the candidate: 
194.18     (1) has signed an agreement to limit campaign expenditures 
194.19  as provided in section 10A.322; 
194.20     (2) is seeking an office for which voluntary spending 
194.21  limits are specified in section 10A.25; and 
194.22     (3) has designated a principal campaign committee.  
194.23     This subdivision does not limit the campaign expenditures 
194.24  of a candidate who does not sign an agreement but accepts a 
194.25  contribution for which the contributor improperly claims a 
194.26  refund.  
194.27     (c) For purposes of this subdivision, "political party" 
194.28  means a major political party as defined in section 200.02, 
194.29  subdivision 7, or a minor political party qualifying for 
194.30  inclusion on the income tax or property tax refund form under 
194.31  section 10A.31, subdivision 3a.  
194.32     A "major party" or "minor party" includes the aggregate of 
194.33  that party's organization within each house of the legislature, 
194.34  the state party organization, and the party organization within 
194.35  congressional districts, counties, legislative districts, 
194.36  municipalities, and precincts.  
195.1      "Candidate" means a candidate as defined in section 10A.01, 
195.2   subdivision 10, except a candidate for judicial office.  
195.3      "Contribution" means a gift of money. 
195.4      (d) The commissioner shall make copies of the form 
195.5   available to the public and candidates upon request. 
195.6      (e) The following data collected or maintained by the 
195.7   commissioner under this subdivision are private:  the identities 
195.8   of individuals claiming a refund, the identities of candidates 
195.9   to whom those individuals have made contributions, and the 
195.10  amount of each contribution.  
195.11     (f) The commissioner shall report to the campaign finance 
195.12  and public disclosure board by each August 1 a summary showing 
195.13  the total number and aggregate amount of political contribution 
195.14  refunds made on behalf of each candidate and each political 
195.15  party.  These data are public. 
195.16     (g) The amount necessary to pay claims for the refund 
195.17  provided in this section is appropriated from the general fund 
195.18  to the commissioner of revenue. 
195.19     (h) For a taxpayer who files a claim for refund via the 
195.20  Internet or other electronic means, the commissioner may accept 
195.21  the number on the official receipt as documentation that a 
195.22  contribution was made rather than the actual receipt as required 
195.23  by paragraph (a). 
195.24     <b>[EFFECTIVE DATE.]</b> This section is effective for refund 
195.25  claims based on contributions made after December 31, 2001. 
195.26     Sec. 32.  Minnesota Statutes 2000, section 290.067, 
195.27  subdivision 2, is amended to read: 
195.28     Subd. 2.  [LIMITATIONS.] The credit for expenses incurred 
195.29  for the care of each dependent shall not exceed $720 in any 
195.30  taxable year, and the total credit for all dependents of a 
195.31  claimant shall not exceed $1,440 in a taxable year.  The maximum 
195.32  total credit shall be reduced according to the amount of the 
195.33  income of the claimant and a spouse, if any, as follows:  
195.34     income up to $13,350 $18,040, $720 maximum for one 
195.35  dependent, $1,440 for all dependents; 
195.36     income over $13,350 $18,040, the maximum credit for one 
196.1   dependent shall be reduced by $18 for every $350 of additional 
196.2   income, $36 for all dependents. 
196.3      The commissioner shall construct and make available to 
196.4   taxpayers tables showing the amount of the credit at various 
196.5   levels of income and expenses.  The tables shall follow the 
196.6   schedule contained in this subdivision, except that the 
196.7   commissioner may graduate the transitions between expenses and 
196.8   income brackets.  
196.9      <b>[EFFECTIVE DATE.]</b> This section is effective for tax years 
196.10  beginning after December 31, 1999. 
196.11     Sec. 33.  Minnesota Statutes 2000, section 290.067, 
196.12  subdivision 2b, is amended to read: 
196.13     Subd. 2b.  [INFLATION ADJUSTMENT.] The dollar amount of the 
196.14  income threshold at which the maximum credit begins to be 
196.15  reduced under subdivision 2 must be adjusted for inflation.  The 
196.16  commissioner shall adjust the threshold amount by the percentage 
196.17  determined under section 290.06, subdivision 2d, for the taxable 
196.18  year. make the inflation adjustments in accordance with section 
196.19  1f of the Internal Revenue Code except that for the purposes of 
196.20  this subdivision the percentage increase must be determined from 
196.21  the year starting September 1, 1999, and ending August 31, 2000, 
196.22  as the base year for adjusting for inflation for the tax year 
196.23  beginning after December 31, 2000.  The determination of the 
196.24  commissioner under this subdivision is not a rule under the 
196.25  Administrative Procedures Act. 
196.26     <b>[EFFECTIVE DATE.]</b> This section is effective for tax years 
196.27  beginning after December 31, 2000. 
196.28     Sec. 34.  Minnesota Statutes 2000, section 290.0671, 
196.29  subdivision 1, is amended to read: 
196.30     Subdivision 1.  [CREDIT ALLOWED.] (a) An individual is 
196.31  allowed a credit against the tax imposed by this chapter equal 
196.32  to a percentage of earned income.  To receive a credit, a 
196.33  taxpayer must be eligible for a credit under section 32 of the 
196.34  Internal Revenue Code.  
196.35     (b) For individuals with no qualifying children, the credit 
196.36  equals 1.9125 percent of the first $4,460 $4,620 of earned 
197.1   income.  The credit is reduced by 1.9125 percent of earned 
197.2   income or modified adjusted gross income, whichever is greater, 
197.3   in excess of $5,570 $5,770, but in no case is the credit less 
197.4   than zero. 
197.5      (c) For individuals with one qualifying child, the credit 
197.6   equals 8.5 percent of the first $6,680 $6,920 of earned income 
197.7   and 8.5 percent of earned income over $11,650 $12,080 but less 
197.8   than $12,990 $13,450. The credit is reduced by 5.73 percent of 
197.9   earned income or modified adjusted gross income, whichever is 
197.10  greater, in excess of $14,560 $15,080, but in no case is the 
197.11  credit less than zero. 
197.12     (d) For individuals with two or more qualifying children, 
197.13  the credit equals ten percent of the first $9,390 $9,720 of 
197.14  earned income and 20 percent of earned income 
197.15  over $14,350 $14,860 but less than $16,230 $16,800.  The credit 
197.16  is reduced by 10.3 percent of earned income or modified adjusted 
197.17  gross income, whichever is greater, in excess 
197.18  of $17,280 $17,890, but in no case is the credit less than zero. 
197.19     (e) For a nonresident or part-year resident, the credit 
197.20  must be allocated based on the percentage calculated under 
197.21  section 290.06, subdivision 2c, paragraph (e). 
197.22     (f) For a person who was a resident for the entire tax year 
197.23  and has earned income not subject to tax under this chapter, the 
197.24  credit must be allocated based on the ratio of federal adjusted 
197.25  gross income reduced by the earned income not subject to tax 
197.26  under this chapter over federal adjusted gross income. 
197.27     (g) The commissioner shall construct tables showing the 
197.28  amount of the credit at various income levels and make them 
197.29  available to taxpayers.  The tables shall follow the schedule 
197.30  contained in this subdivision, except that the commissioner may 
197.31  graduate the transition between income brackets. 
197.32     <b>[EFFECTIVE DATE.]</b> This section is effective for taxable 
197.33  years beginning after December 31, 1999. 
197.34     Sec. 35.  Minnesota Statutes 2000, section 290.0671, 
197.35  subdivision 7, is amended to read: 
197.36     Subd. 7.  [INFLATION ADJUSTMENT.] The earned income amounts 
198.1   used to calculate the credit and the income thresholds at which 
198.2   the maximum credit begins to be reduced in subdivision 1 must be 
198.3   adjusted for inflation.  The commissioner shall adjust the 
198.4   earned income and threshold amounts by the percentage determined 
198.5   under section 290.06, subdivision 2d, for the taxable year. make 
198.6   the inflation adjustments in accordance with section 1f of the 
198.7   Internal Revenue Code except that for the purposes of this 
198.8   subdivision the percentage increase shall be determined from the 
198.9   year starting September 1, 1999, and ending August 31, 2000, as 
198.10  the base year for adjusting for inflation for the tax year 
198.11  beginning after December 31, 2000.  The determination of the 
198.12  commissioner under this subdivision is not a rule under the 
198.13  Administrative Procedures Act. 
198.14     <b>[EFFECTIVE DATE.]</b> This section is effective for tax years 
198.15  beginning after December 31, 2000. 
198.16     Sec. 36.  Minnesota Statutes 2000, section 290.0675, 
198.17  subdivision 1, is amended to read: 
198.18     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
198.19  section the following terms have the meanings given. 
198.20     (b) "Earned income" means the sum of the following, to the 
198.21  extent included in Minnesota taxable income: 
198.22     (1) earned income as defined in section 32(c)(2) of the 
198.23  Internal Revenue Code; 
198.24     (2) to the extent included in Minnesota taxable income, 
198.25  income received from a retirement pension, profit-sharing, stock 
198.26  bonus, or annuity plan; and 
198.27     (3) to the extent included in Minnesota taxable income, 
198.28  social security benefits as defined in section 86(d)(1) of the 
198.29  Internal Revenue Code. 
198.30     (c) "Taxable income" means net income as defined in section 
198.31  290.01, subdivision 19. 
198.32     (d) "Earned income of lesser-earning spouse" means the 
198.33  earned income of the spouse with the lesser amount of earned 
198.34  income as defined in paragraph (b) for the taxable year.  
198.35     <b>[EFFECTIVE DATE.]</b> This section is effective for taxable 
198.36  years beginning after December 31, 2000. 
199.1      Sec. 37.  Minnesota Statutes 2000, section 290.0675, 
199.2   subdivision 3, is amended to read: 
199.3      Subd. 3.  [CREDIT AMOUNT.] The credit amount is as shown in 
199.4   the table in this subdivision, based on the couple's taxable 
199.5   income for the tax year and on the earned income of the 
199.6   lesser-earning spouse the difference between the tax on the 
199.7   couple's joint Minnesota taxable income under the rates in 
199.8   section 290.06, subdivision 2c, paragraph (a), and the sum of 
199.9   the tax under the rates of section 290.06, subdivision 2c, 
199.10  paragraph (b), on the earned income of the lesser-earning 
199.11  spouse, and the tax under the rates of section 290.06, 
199.12  subdivision 2c, paragraph (b), on the couple's joint Minnesota 
199.13  taxable income, minus the earned income of the lesser-earning 
199.14  spouse. 
199.15                               Credit For          Credit For
199.16    Earned Income of           Taxable Income      Taxable Income
199.17    Lesser Earning Spouse      $25,680-$102,029    $102,030-over
199.18    $14,250 - $15,249          $7                  $0    
199.19    $15,250 - $16,249          $24                 $0    
199.20    $16,250 - $17,249          $41                 $0    
199.21    $17,250 - $18,249          $58                 $0    
199.22    $18,250 - $19,249          $75                 $0    
199.23    $19,250 - $20,249          $92                 $0  
199.24    $20,250 - $21,249          $109                $0  
199.25    $21,250 - $22,249          $126                $0 
199.26    $22,250 - $23,249          $143                $0
199.27    $23,250 - $24,249          $160                $0 
199.28    $24,250 - $25,249          $161                $0   
199.29    $25,250 - $26,249          $161                $0  
199.30    $26,250 - $27,249          $161                $0   
199.31    $27,250 - $28,249          $161                $0
199.32    $28,250 - $29,249          $161                $0
199.33    $29,250 - $30,249          $161                $0
199.34    $30,250 - $31,249          $161                $0
199.35    $31,250 - $32,249          $161                $6
199.36    $32,250 - $33,249          $161                $14
200.1     $33,250 - $34,249          $161                $22
200.2     $34,250 - $35,249          $161                $30
200.3     $35,250 - $36,249          $161                $38
200.4     $36,250 - $37,249          $161                $46
200.5     $37,250 - $38,249          $161                $54
200.6     $38,250 - $39,249          $161                $62
200.7     $39,250 - $40,249          $161                $70
200.8     $40,250 - $41,249          $161                $78
200.9     $41,250 - $42,249          $161                $86
200.10    $42,250 - $43,249          $161                $94
200.11    $43,250 - $44,249          $161                $102
200.12    $44,250 - $45,249          $161                $110
200.13    $45,250 - $46,249          $161                $118
200.14    $46,250 - $47,249          $161                $126
200.15    $47,250 - $48,249          $161                $134
200.16    $48,250 - $49,249          $161                $142
200.17    $49,250 - $50,249          $161                $150
200.18    $50,250 - $51,249          $161                $158
200.19    $51,250 - $52,249          $161                $166
200.20    $52,250 - $53,249          $161                $174
200.21    $53,250 - $54,249          $161                $182
200.22    $54,250 - $55,249          $161                $190
200.23    $55,250 - $56,249          $161                $198
200.24    $56,250 - $57,249          $161                $206
200.25    $57,250 - $58,249          $161                $214
200.26    $58,250 - $59,249          $161                $222
200.27    $59,250 - $60,249          $161                $230
200.28    $60,250 - $61,249          $161                $238
200.29    $61,250 - $62,249          $161                $246
200.30    $62,250 - $63,249          $161                $254
200.31    $63,250 - $64,249          $161                $262
200.32    $64,250 and over           $161                $268
200.33     For taxable years beginning after December 31, 2001, the 
200.34  commissioner of revenue shall prepare and make available to 
200.35  taxpayers a comprehensive table showing the credit under this 
200.36  section at brackets of earnings of the lesser-earning spouse and 
201.1   joint taxable income.  The brackets of earnings shall not be 
201.2   more than $2,000. 
201.3      For taxable years beginning after December 31, 2000 2002, 
201.4   the commissioner shall update the table as necessary to provide 
201.5   a credit that reflects the relationship between the marginal tax 
201.6   rates imposed under section 290.06, subdivision 2c. 
201.7      <b>[EFFECTIVE DATE.]</b> This section is effective for taxable 
201.8   years beginning after December 31, 2000. 
201.9      Sec. 38.  Minnesota Statutes 2000, section 290.0921, 
201.10  subdivision 3, is amended to read: 
201.11     Subd. 3.  [ALTERNATIVE MINIMUM TAXABLE INCOME.] 
201.12  "Alternative minimum taxable income" is Minnesota net income as 
201.13  defined in section 290.01, subdivision 19, and includes the 
201.14  adjustments and tax preference items in sections 56, 57, 58, and 
201.15  59(d), (e), (f), and (h) of the Internal Revenue Code.  If a 
201.16  corporation files a separate company Minnesota tax return, the 
201.17  minimum tax must be computed on a separate company basis.  If a 
201.18  corporation is part of a tax group filing a unitary return, the 
201.19  minimum tax must be computed on a unitary basis.  The following 
201.20  adjustments must be made. 
201.21     (1) For purposes of the depreciation adjustments under 
201.22  section 56(a)(1) and 56(g)(4)(A) of the Internal Revenue Code, 
201.23  the basis for depreciable property placed in service in a 
201.24  taxable year beginning before January 1, 1990, is the adjusted 
201.25  basis for federal income tax purposes, including any 
201.26  modification made in a taxable year under section 290.01, 
201.27  subdivision 19e, or Minnesota Statutes 1986, section 290.09, 
201.28  subdivision 7, paragraph (c). 
201.29     For taxable years beginning after December 31, 2000, the 
201.30  amount of any remaining modification made under section 290.01, 
201.31  subdivision 19e, or Minnesota Statutes 1986, section 290.09, 
201.32  subdivision 7, paragraph (c), not previously deducted is a 
201.33  depreciation allowance in the first taxable year after December 
201.34  31, 2000. 
201.35     (2) The alternative tax net operating loss deduction under 
201.36  sections 56(a)(4) and 56(d) of the Internal Revenue Code does 
202.1   not apply. 
202.2      (3) The special rule for certain dividends under section 
202.3   56(g)(4)(C)(ii) of the Internal Revenue Code does not apply. 
202.4      (4) The special rule for dividends from section 936 
202.5   companies under section 56(g)(4)(C)(iii) does not apply. 
202.6      (5) The tax preference for depletion under section 57(a)(1) 
202.7   of the Internal Revenue Code does not apply. 
202.8      (6) The tax preference for intangible drilling costs under 
202.9   section 57(a)(2) of the Internal Revenue Code must be calculated 
202.10  without regard to subparagraph (E) and the subtraction under 
202.11  section 290.01, subdivision 19d, clause (4). 
202.12     (7) The tax preference for tax exempt interest under 
202.13  section 57(a)(5) of the Internal Revenue Code does not apply.  
202.14     (8) The tax preference for charitable contributions of 
202.15  appreciated property under section 57(a)(6) of the Internal 
202.16  Revenue Code does not apply. 
202.17     (9) For purposes of calculating the tax preference for 
202.18  accelerated depreciation or amortization on certain property 
202.19  placed in service before January 1, 1987, under section 57(a)(7) 
202.20  of the Internal Revenue Code, the deduction allowable for the 
202.21  taxable year is the deduction allowed under section 290.01, 
202.22  subdivision 19e. 
202.23     For taxable years beginning after December 31, 2000, the 
202.24  amount of any remaining modification made under section 290.01, 
202.25  subdivision 19e, not previously deducted is a depreciation or 
202.26  amortization allowance in the first taxable year after December 
202.27  31, 2000. 
202.28     (10) For purposes of calculating the adjustment for 
202.29  adjusted current earnings in section 56(g) of the Internal 
202.30  Revenue Code, the term "alternative minimum taxable income" as 
202.31  it is used in section 56(g) of the Internal Revenue Code, means 
202.32  alternative minimum taxable income as defined in this 
202.33  subdivision, determined without regard to the adjustment for 
202.34  adjusted current earnings in section 56(g) of the Internal 
202.35  Revenue Code. 
202.36     (11) For purposes of determining the amount of adjusted 
203.1   current earnings under section 56(g)(3) of the Internal Revenue 
203.2   Code, no adjustment shall be made under section 56(g)(4) of the 
203.3   Internal Revenue Code with respect to (i) the amount of foreign 
203.4   dividend gross-up subtracted as provided in section 290.01, 
203.5   subdivision 19d, clause (1), (ii) the amount of refunds of 
203.6   income, excise, or franchise taxes subtracted as provided in 
203.7   section 290.01, subdivision 19d, clause (10), or (iii) the 
203.8   amount of royalties, fees or other like income subtracted as 
203.9   provided in section 290.01, subdivision 19d, clause (11). 
203.10     Items of tax preference must not be reduced below zero as a 
203.11  result of the modifications in this subdivision. 
203.12     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
203.13  following final enactment. 
203.14     Sec. 39.  Minnesota Statutes 2000, section 290.92, 
203.15  subdivision 23, is amended to read: 
203.16     Subd. 23.  [WITHHOLDING BY EMPLOYER OF DELINQUENT TAXES.] 
203.17  (1) The commissioner may, within five years after the date of 
203.18  assessment of the tax, or if a lien has been filed under section 
203.19  270.69, within the statutory period for enforcement of the lien, 
203.20  give notice to any employer deriving income which has a taxable 
203.21  situs in this state regardless of whether the income is exempt 
203.22  from taxation, that an employee of that employer is delinquent 
203.23  in a certain amount with respect to any state taxes, including 
203.24  penalties, interest, and costs.  The commissioner can proceed 
203.25  under this subdivision only if the tax is uncontested or if the 
203.26  time for appeal of the tax has expired.  The commissioner shall 
203.27  not proceed under this subdivision until the expiration of 30 
203.28  days after mailing to the taxpayer, at the taxpayer's last known 
203.29  address, a written notice of (a) the amount of taxes, interest, 
203.30  and penalties due from the taxpayer and demand for their 
203.31  payment, and (b) the commissioner's intention to require 
203.32  additional withholding by the taxpayer's employer pursuant to 
203.33  this subdivision.  The effect of the notice shall expire 180 
203.34  days one year after it has been mailed to the taxpayer provided 
203.35  that the notice may be renewed by mailing a new notice which is 
203.36  in accordance with this subdivision.  The renewed notice shall 
204.1   have the effect of reinstating the priority of the original 
204.2   claim.  The notice to the taxpayer shall be in substantially the 
204.3   same form as that provided in section 571.72.  The notice shall 
204.4   further inform the taxpayer of the wage exemptions contained in 
204.5   section 550.37, subdivision 14.  If no statement of exemption is 
204.6   received by the commissioner within 30 days from the mailing of 
204.7   the notice, the commissioner may proceed under this 
204.8   subdivision.  The notice to the taxpayer's employer may be 
204.9   served by mail or by delivery by an employee of the department 
204.10  of revenue and shall be in substantially the same form as 
204.11  provided in section 571.75.  Upon receipt of notice, the 
204.12  employer shall withhold from compensation due or to become due 
204.13  to the employee, the total amount shown by the notice, subject 
204.14  to the provisions of section 571.922.  The employer shall 
204.15  continue to withhold each pay period until the notice is 
204.16  released by the commissioner under section 270.709.  Upon 
204.17  receipt of notice by the employer, the claim of the state of 
204.18  Minnesota shall have priority over any subsequent garnishments 
204.19  or wage assignments.  The commissioner may arrange between the 
204.20  employer and the employee for withholding a portion of the total 
204.21  amount due the employee each pay period, until the total amount 
204.22  shown by the notice plus accrued interest has been withheld.  
204.23     The "compensation due" any employee is defined in 
204.24  accordance with the provisions of section 571.921.  The maximum 
204.25  withholding allowed under this subdivision for any one pay 
204.26  period shall be decreased by any amounts payable pursuant to a 
204.27  garnishment action with respect to which the employer was served 
204.28  prior to being served with the notice of delinquency and any 
204.29  amounts covered by any irrevocable and previously effective 
204.30  assignment of wages; the employer shall give notice to the 
204.31  department of the amounts and the facts relating to such 
204.32  assignments within ten days after the service of the notice of 
204.33  delinquency on the form provided by the department of revenue as 
204.34  noted in this subdivision.  
204.35     (2) If the employee ceases to be employed by the employer 
204.36  before the full amount set forth in a notice of delinquency plus 
205.1   accrued interest has been withheld, the employer shall 
205.2   immediately notify the commissioner in writing of the 
205.3   termination date of the employee and the total amount withheld.  
205.4   No employer may discharge any employee by reason of the fact 
205.5   that the commissioner has proceeded under this subdivision.  If 
205.6   an employer discharges an employee in violation of this 
205.7   provision, the employee shall have the same remedy as provided 
205.8   in section 571.927, subdivision 2.  
205.9      (3) Within ten days after the expiration of such pay 
205.10  period, the employer shall remit to the commissioner, on a form 
205.11  and in the manner prescribed by the commissioner, the amount 
205.12  withheld during each pay period under this subdivision.  
205.13     (4) Clauses (1), (2), and (3), except provisions imposing a 
205.14  liability on the employer for failure to withhold or remit, 
205.15  shall apply to cases in which the employer is the United States 
205.16  or any instrumentality thereof or this state or any municipality 
205.17  or other subordinate unit thereof.  
205.18     (5) The commissioner shall refund to the employee excess 
205.19  amounts withheld from the employee under this subdivision.  If 
205.20  any excess results from payments by the employer because of 
205.21  willful failure to withhold or remit as prescribed in clause 
205.22  (3), the excess attributable to the employer's payment shall be 
205.23  refunded to the employer.  
205.24     (6) Employers required to withhold delinquent taxes, 
205.25  penalties, interest, and costs under this subdivision shall not 
205.26  be required to compute any additional interest, costs or other 
205.27  charges to be withheld.  
205.28     (7) The collection remedy provided to the commissioner by 
205.29  this subdivision shall have the same legal effect as if it were 
205.30  a levy made pursuant to section 270.70.  
205.31     <b>[EFFECTIVE DATE.]</b> This section is effective for notices of 
205.32  intent mailed on or after the day following final enactment. 
205.33     Sec. 40.  Minnesota Statutes 2000, section 290A.03, 
205.34  subdivision 12, is amended to read: 
205.35     Subd. 12.  [GROSS RENT.] (a) "Gross rent" means rental paid 
205.36  for the right of occupancy, at arms-length, of a homestead, 
206.1   exclusive of charges for any medical services furnished by the 
206.2   landlord as a part of the rental agreement, whether expressly 
206.3   set out in the rental agreement or not. 
206.4      (b) The gross rent of a resident of a nursing home or 
206.5   intermediate care facility is $350 per month.  The gross rent of 
206.6   a resident of an adult foster care home is $550 per month.  
206.7   Beginning for rent paid in 2002, the commissioner shall annually 
206.8   adjust for inflation the gross rent amounts stated in this 
206.9   paragraph.  The adjustment must be made in accordance with 
206.10  section 1f of the Internal Revenue Code, except that for 
206.11  purposes of this paragraph the percentage increase shall be 
206.12  determined from the year ending on June 30, 2001, to the year 
206.13  ending on June 30 of the year in which the rent is paid.  The 
206.14  commissioner shall round the gross rents to the nearest $10 
206.15  amount.  If the amount ends in $5, the commissioner shall round 
206.16  it up to the next $10 amount.  The determination of the 
206.17  commissioner under this paragraph is not a rule under the 
206.18  Administrative Procedure Act. 
206.19     (c) If the landlord and tenant have not dealt with each 
206.20  other at arms-length and the commissioner determines that the 
206.21  gross rent charged was excessive, the commissioner may adjust 
206.22  the gross rent to a reasonable amount for purposes of this 
206.23  chapter. 
206.24     (d) Any amount paid by a claimant residing in property 
206.25  assessed pursuant to section 273.124, subdivision 3, 4, 5, or 6 
206.26  for occupancy in that property shall be excluded from gross rent 
206.27  for purposes of this chapter.  However, property taxes imputed 
206.28  to the homestead of the claimant or the dwelling unit occupied 
206.29  by the claimant that qualifies for homestead treatment pursuant 
206.30  to section 273.124, subdivision 3, 4, 5, or 6 shall be included 
206.31  within the term "property taxes payable" as defined in 
206.32  subdivision 13, notwithstanding the fact that ownership is not 
206.33  in the name of the claimant. 
206.34     <b>[EFFECTIVE DATE.]</b> This section is effective for refunds 
206.35  based on rent paid after December 31, 2000. 
206.36     Sec. 41.  Minnesota Statutes 2000, section 290A.15, is 
207.1   amended to read: 
207.2      290A.15 [CLAIM APPLIED AGAINST OUTSTANDING LIABILITY.] 
207.3      The amount of any claim otherwise payable under this 
207.4   chapter may be applied by the commissioner against any 
207.5   delinquent tax liability of the claimant or spouse of the 
207.6   claimant payable to the department of revenue any member of the 
207.7   household.  If there are two members of the household, the 
207.8   commissioner may apply only one-half of a refund to the separate 
207.9   liability of either member of the household. 
207.10     <b>[EFFECTIVE DATE.]</b> This section is effective beginning with 
207.11  refunds paid on or after July 1, 2001. 
207.12     Sec. 42.  Minnesota Statutes 2000, section 296A.16, 
207.13  subdivision 2, is amended to read: 
207.14     Subd. 2.  [FUEL USED IN OTHER VEHICLE; CLAIM FOR REFUND.] 
207.15  Any person who shall buy buys and use uses gasoline for a 
207.16  qualifying purpose other than use in motor vehicles, snowmobiles 
207.17  except as provided in clause (2), or motorboats, or special fuel 
207.18  for a qualifying purpose other than use in licensed motor 
207.19  vehicles, and who shall have paid the tax directly or indirectly 
207.20  through the amount of the tax being included in the price of the 
207.21  gasoline or special fuel, or otherwise, shall be reimbursed and 
207.22  repaid the amount of the tax paid upon filing with the 
207.23  commissioner a claim for refund in the form and manner 
207.24  prescribed by the commissioner, and containing the information 
207.25  the commissioner shall require.  By signing any such claim which 
207.26  is false or fraudulent, the applicant shall be subject to the 
207.27  penalties provided in this chapter for knowingly making a false 
207.28  claim.  The claim shall set forth the total amount of the 
207.29  gasoline so purchased and used by the applicant other than in 
207.30  motor vehicles, or special fuel purchased and used by the 
207.31  applicant other than in licensed motor vehicles, and shall state 
207.32  when and for what purpose it was used.  When a claim contains an 
207.33  error in computation or preparation, the commissioner is 
207.34  authorized to adjust the claim in accordance with the evidence 
207.35  shown on the claim or other information available to the 
207.36  commissioner.  The commissioner, on being satisfied that the 
208.1   claimant is entitled to the payments, shall approve the claim 
208.2   and transmit it to the commissioner of finance.  The words 
208.3   "gasoline" or "special fuel" as used in this subdivision do not 
208.4   include aviation gasoline or special fuel for aircraft.  
208.5   Gasoline or special fuel bought and used for a "qualifying 
208.6   purpose" means: 
208.7      (1) Gasoline or special fuel used in carrying on a trade or 
208.8   business, used on a farm situated in Minnesota, and used for a 
208.9   farming purpose.  "Farm" and "farming purpose" have the meanings 
208.10  given them in section 6420(c)(2), (3), and (4) of the Internal 
208.11  Revenue Code of 1986, as amended through December 31, 1997. 
208.12     (2) Gasoline or special fuel used for off-highway business 
208.13  use.  "Off-highway business use" means any use off the public 
208.14  highway by a person in that person's trade, business, or 
208.15  activity for the production of income.  Off-highway business use 
208.16  includes: 
208.17     (i) use of a passenger snowmobile off the public highways 
208.18  as part of the operations of a resort as defined in section 
208.19  157.15, subdivision 11; and 
208.20     (ii) use of gasoline or special fuel to operate a power 
208.21  takeoff unit on a vehicle, but not including fuel consumed 
208.22  during idling time.  
208.23  Off-highway business use does not include: 
208.24     (i) use as a fuel in a motor vehicle which, at the time of 
208.25  use, is registered or is required to be registered for highway 
208.26  use under the laws of any state or foreign country; or 
208.27     (ii) use of a licensed motor vehicle fuel tank in lieu of a 
208.28  separate storage tank for storing fuel to be used for a 
208.29  qualifying purpose, as defined in this section.  Fuel purchased 
208.30  to be used for a qualifying purpose cannot be placed in the fuel 
208.31  tank of a licensed motor vehicle and must be stored in a 
208.32  separate supply tank. 
208.33     (3) Gasoline or special fuel placed in the fuel tanks of 
208.34  new motor vehicles, manufactured in Minnesota, and shipped by 
208.35  interstate carrier to destinations in other states or foreign 
208.36  countries.  
209.1      By July 1, 1998, the commissioner shall adopt rules that 
209.2   determine the rates and percentages necessary to develop 
209.3   formulas for calculating the refund under clause (2), item (ii). 
209.4      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
209.5   following final enactment. 
209.6      Sec. 43.  [296A.201] [ASSESSMENTS.] 
209.7      Subdivision 1.  [GENERAL RULE.] The commissioner may make 
209.8   determinations, corrections, and assessments with respect to any 
209.9   tax or fee under this chapter, including interest, additions to 
209.10  taxes and fees, and assessable penalties. 
209.11     Subd. 2.  [COMMISSIONER FILED RETURNS.] If a taxpayer fails 
209.12  to file a required return, the commissioner, from information in 
209.13  the commissioner's possession or obtainable by the commissioner, 
209.14  may make a return for the taxpayer.  The return is prima facie 
209.15  correct and valid.  The commissioner may use statistical or 
209.16  other sampling techniques consistent with generally accepted 
209.17  auditing standards in examining returns or records and making 
209.18  assessments. 
209.19     Subd. 3.  [ORDER OF ASSESSMENT; NOTICE AND DEMAND TO 
209.20  TAXPAYER.] (a) If a return has been filed and the commissioner 
209.21  determines that the tax or fee disclosed by the return is 
209.22  different than the tax or fee determined by the examination, the 
209.23  commissioner shall send an order of assessment to the taxpayer.  
209.24  If no return has been filed, the commissioner may make a return 
209.25  for the taxpayer under subdivision 2 or may send an order of 
209.26  assessment under this subdivision.  The order must explain the 
209.27  basis for the assessment and must explain the taxpayer's appeal 
209.28  rights.  An order of assessment is final when made but may be 
209.29  reconsidered by the commissioner under section 296A.25. 
209.30     (b) Penalties under this chapter are not imposed and no 
209.31  collection action can be taken, including the filing of liens 
209.32  under section 270.69, if the amount shown on the order is paid 
209.33  to the commissioner: 
209.34     (1) within 60 days after notice of the amount and demand 
209.35  for its payment have been mailed to the taxpayer by the 
209.36  commissioner; or 
210.1      (2) if an administrative appeal is filed under this 
210.2   chapter, or a tax court appeal is filed under chapter 271, 
210.3   within 60 days following final determination of the appeal if 
210.4   the appeal is based upon a constitutional challenge to the tax 
210.5   or fee, and if not, when the decision of the tax court is made. 
210.6      Subd. 4.  [ERRONEOUS REFUNDS.] An erroneous refund is 
210.7   considered an underpayment of tax or fee on the date made.  An 
210.8   assessment of a deficiency arising out of an erroneous refund 
210.9   may be made at any time within two years from the making of the 
210.10  refund.  If part of the refund was induced by fraud or 
210.11  misrepresentation of a material fact, the assessment may be made 
210.12  at any time. 
210.13     Subd. 5.  [ASSESSMENT PRESUMED VALID.] A return or 
210.14  assessment of tax or fee made by the commissioner is prima facie 
210.15  correct and valid.  The taxpayer has the burden of establishing 
210.16  its incorrectness or invalidity in any related action or 
210.17  proceeding. 
210.18     Subd. 6.  [AGGREGATE REFUND OR ASSESSMENT.] The 
210.19  commissioner, on examining returns of a taxpayer for more than 
210.20  one year or period, may issue one order covering the period 
210.21  under examination that reflects the aggregate refund or 
210.22  additional tax or fee due. 
210.23     Subd. 7.  [SUFFICIENCY OF NOTICE.] An order of assessment, 
210.24  sent postage prepaid by United States mail to the taxpayer at 
210.25  the taxpayer's last known address, is sufficient even if the 
210.26  taxpayer is deceased or is under a legal disability, or, in the 
210.27  case of a corporation, even if the corporation has terminated 
210.28  its existence, unless the department has been provided with a 
210.29  new address by a party authorized to receive notices of 
210.30  assessment. 
210.31     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
210.32  following final enactment. 
210.33     Sec. 44.  Minnesota Statutes 2000, section 296A.21, 
210.34  subdivision 1, is amended to read: 
210.35     Subdivision 1.  [GENERAL RULE RULES.] (a) The commissioner 
210.36  shall make determinations, corrections, and assessments, and 
211.1   refunds with respect to taxes and fees under this chapter, 
211.2   including interest, additions to taxes, and assessable 
211.3   penalties.  Except as otherwise provided in this section, the 
211.4   amount of taxes assessable must be assessed within 3-1/2 years 
211.5   after the date the return is filed. 
211.6      (b) A claim for a refund of an overpayment of state tax or 
211.7   fees must be filed within 3-1/2 years from the date prescribed 
211.8   for filing the return, plus any extension of time granted for 
211.9   filing the return, but only if filed within the extended time; 
211.10  or the claim must be filed within one year from the date of an 
211.11  order assessing tax or fees, or from the date of a return filed 
211.12  by the commissioner, upon payment in full of the tax, fees, 
211.13  penalties, and interest shown on the order or return, whichever 
211.14  period expires later. 
211.15     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
211.16  following final enactment. 
211.17     Sec. 45.  Minnesota Statutes 2000, section 296A.21, 
211.18  subdivision 4, is amended to read: 
211.19     Subd. 4.  [TIME LIMIT FOR REPAYMENT CERTAIN REFUNDS.] No 
211.20  repayment Notwithstanding subdivision 1, paragraph (b), no 
211.21  refund under section 296A.16, subdivision 2, shall be made 
211.22  unless the claim for refund and invoice shall be are filed with 
211.23  the commissioner within one year from the date of purchase.  The 
211.24  postmark on the envelope in which a written claim is mailed 
211.25  shall determine its date of filing. 
211.26     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
211.27  following final enactment. 
211.28     Sec. 46.  Minnesota Statutes 2000, section 297A.07, 
211.29  subdivision 3, is amended to read: 
211.30     Subd. 3.  [NEW PERMITS AFTER REVOCATION.] The commissioner 
211.31  shall not issue a new permit or reinstate a revoked permit after 
211.32  revocation unless the taxpayer applies for a permit and provides 
211.33  reasonable evidence of intention to comply with the sales and 
211.34  use tax laws and rules.  The commissioner may require the 
211.35  applicant to supply security, in addition to that authorized by 
211.36  section 297A.28, as is reasonably necessary to insure compliance 
212.1   with the sales and use tax laws and rules.  If the commissioner 
212.2   issues or reinstates a permit not in conformance with the 
212.3   requirements of this subdivision or applicable rules, the 
212.4   commissioner may cancel the permit upon notice to the permit 
212.5   holder.  The notice must be served by first class and certified 
212.6   mail at the permit holder's last known address.  The 
212.7   cancellation shall be effective immediately, subject to the 
212.8   right of the permit holder to show that the permit was issued in 
212.9   conformance with the requirements of this subdivision and 
212.10  applicable rules.  Upon such showing, the permit must be 
212.11  reissued. 
212.12     If a taxpayer has had a permit or permits revoked three 
212.13  times in a five-year period, the commissioner shall not issue a 
212.14  new permit or reinstate the revoked permit until 24 months have 
212.15  elapsed after revocation and the taxpayer has satisfied the 
212.16  conditions for reinstatement of a revoked permit or issuance of 
212.17  a new permit imposed by this section and rules adopted hereunder.
212.18     For purposes of this subdivision, the term "taxpayer" means 
212.19  an individual, if a revoked permit was issued to or in the name 
212.20  of an individual, or a corporation or partnership, if a revoked 
212.21  permit was issued to or in the name of a corporation or 
212.22  partnership.  Taxpayer also means an officer of a corporation, a 
212.23  member of a partnership, or an individual who is liable for 
212.24  delinquent sales taxes, either for the entity for which the new 
212.25  or reinstated permit is at issue, or for another entity for 
212.26  which a permit was previously revoked, or personally as a permit 
212.27  holder. 
212.28     <b>[EFFECTIVE DATE; INSTRUCTION TO REVISOR.]</b> (a) This section 
212.29  is effective the day following final enactment.  
212.30     (b) In the next edition of Minnesota Statutes, the revisor 
212.31  shall codify the amendments to this section in Minnesota 
212.32  Statutes, section 297A.86, subdivision 2. 
212.33     Sec. 47.  Minnesota Statutes 2000, section 297A.25, 
212.34  subdivision 3, is amended to read: 
212.35     Subd. 3.  [MEDICINES; MEDICAL DEVICES.] The gross receipts 
212.36  from the sale of and storage, use, or consumption of prescribed 
213.1   drugs, prescribed medicine and insulin, intended for use, 
213.2   internal or external, in the cure, mitigation, treatment or 
213.3   prevention of illness or disease in human beings are exempt, 
213.4   together with prescription glasses, fever thermometers, 
213.5   therapeutic, and prosthetic devices.  "Prescribed drugs" or 
213.6   "prescribed medicine" includes over-the-counter drugs or 
213.7   medicine prescribed by a licensed physician health care 
213.8   professional.  "Therapeutic devices" includes reusable finger 
213.9   pricking devices for the extraction of blood, blood glucose 
213.10  monitoring machines, and other diagnostic agents used in 
213.11  diagnosing, monitoring, or treating diabetes.  Nonprescription 
213.12  analgesics consisting principally (determined by the weight of 
213.13  all ingredients) of acetaminophen, acetylsalicylic acid, 
213.14  ibuprofen, ketoprofen, naproxen, and other nonprescription 
213.15  analgesics that are approved by the United States Food and Drug 
213.16  Administration for internal use by human beings, or a 
213.17  combination thereof, are exempt. 
213.18     Medical supplies purchased by a licensed health care 
213.19  facility or licensed health care professional to provide medical 
213.20  treatment to residents or patients are exempt.  The exemption 
213.21  does not apply to medical equipment or components of medical 
213.22  equipment, laboratory supplies, radiological supplies, and other 
213.23  items used in providing medical services.  For purposes of this 
213.24  subdivision, "medical supplies" means adhesive and nonadhesive 
213.25  bandages, gauze pads and strips, cotton applicators, 
213.26  antiseptics, nonprescription drugs, eye solution, and other 
213.27  similar supplies used directly on the resident or patient in 
213.28  providing medical services. 
213.29     <b>[EFFECTIVE DATE; INSTRUCTION TO REVISOR.]</b> This section is 
213.30  effective the day following final enactment.  In the next 
213.31  edition of Minnesota Statutes, the revisor of statutes shall 
213.32  codify the amendment in this section in Minnesota Statutes, 
213.33  section 297A.67, subdivision 7. 
213.34     Sec. 48.  Minnesota Statutes 2000, section 297A.25, 
213.35  subdivision 11, is amended to read: 
213.36     Subd. 11.  [SALES TO GOVERNMENT.] The gross receipts from 
214.1   all sales, including sales in which title is retained by a 
214.2   seller or a vendor or is assigned to a third party under an 
214.3   installment sale or lease purchase agreement under section 
214.4   465.71, of tangible personal property to, and all storage, use 
214.5   or consumption of such property by, the United States and its 
214.6   agencies and instrumentalities, the University of Minnesota, 
214.7   state universities, community colleges, technical colleges, 
214.8   state academies, the Perpich center for arts education, an 
214.9   instrumentality of a political subdivision that is accredited as 
214.10  an optional/special function school by the North Central 
214.11  Association of Colleges and Schools, school districts, public 
214.12  libraries, public library systems, multicounty, multitype 
214.13  library systems as defined in section 134.001, county law 
214.14  libraries under chapter 134A, state agency libraries, the state 
214.15  library under section 480.09, and the legislative reference 
214.16  library are exempt. 
214.17     As used in this subdivision, "school districts" means 
214.18  public school entities and districts of every kind and nature 
214.19  organized under the laws of the state of Minnesota, including, 
214.20  without limitation, school districts, intermediate school 
214.21  districts, education districts, service cooperatives, secondary 
214.22  vocational cooperative centers, special education cooperatives, 
214.23  joint purchasing cooperatives, telecommunication cooperatives, 
214.24  regional management information centers, and any instrumentality 
214.25  of a school district, as defined in section 471.59. 
214.26     Sales exempted by this subdivision include sales under 
214.27  section 297A.01, subdivision 3, paragraph (f).  
214.28     Sales to hospitals and nursing homes owned and operated by 
214.29  political subdivisions of the state of tangible personal 
214.30  property and taxable services used at or by the hospitals and 
214.31  nursing homes are exempt under this subdivision.  
214.32     Sales of supplies and equipment used in the operation of an 
214.33  ambulance service owned and operated by a political subdivision 
214.34  of the state are exempt under this subdivision provided that the 
214.35  supplies and equipment are used in the course of providing 
214.36  medical care.  Sales to a political subdivision of repair and 
215.1   replacement parts for emergency rescue vehicles and fire trucks 
215.2   and apparatus are exempt under this subdivision.  
215.3      Sales to a political subdivision of machinery and 
215.4   equipment, except for motor vehicles, used directly for mixed 
215.5   municipal solid waste management services at a solid waste 
215.6   disposal facility as defined in section 115A.03, subdivision 10, 
215.7   are exempt under this subdivision.  
215.8      Sales to political subdivisions of chore and homemaking 
215.9   services to be provided to elderly or disabled individuals are 
215.10  exempt. 
215.11     Sales to a town of gravel and of machinery, equipment, and 
215.12  accessories, except motor vehicles, used exclusively for road 
215.13  and bridge maintenance, and leases of motor vehicles exempt from 
215.14  tax under section 297B.03, clause (10), are exempt. 
215.15     Sales of telephone services to the department of 
215.16  administration that are used to provide telecommunications 
215.17  services through the intertechnologies revolving fund are exempt 
215.18  under this subdivision. 
215.19     This exemption shall not apply to building, construction or 
215.20  reconstruction materials purchased by a contractor or a 
215.21  subcontractor as a part of a lump-sum contract or similar type 
215.22  of contract with a guaranteed maximum price covering both labor 
215.23  and materials for use in the construction, alteration, or repair 
215.24  of a building or facility.  This exemption does not apply to 
215.25  construction materials purchased by tax exempt entities or their 
215.26  contractors to be used in constructing buildings or facilities 
215.27  which will not be used principally by the tax exempt entities. 
215.28     This exemption does not apply to the leasing of a motor 
215.29  vehicle as defined in section 297B.01, subdivision 5, except for 
215.30  leases entered into by the United States or its agencies or 
215.31  instrumentalities. 
215.32     The tax imposed on sales to political subdivisions of the 
215.33  state under this section applies to all political subdivisions 
215.34  other than those explicitly exempted under this subdivision, 
215.35  notwithstanding section 115A.69, subdivision 6, 116A.25, 
215.36  360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2, 
216.1   469.127, 473.448, 473.545, or 473.608 or any other law to the 
216.2   contrary enacted before 1992. 
216.3      Sales exempted by this subdivision include sales made to 
216.4   other states or political subdivisions of other states, if the 
216.5   sale would be exempt from taxation if it occurred in that state, 
216.6   but do not include sales under section 297A.01, subdivision 3, 
216.7   paragraphs (c) and (e). 
216.8      <b>[EFFECTIVE DATE; INSTRUCTION TO REVISOR.]</b> This section is 
216.9   effective the day following final enactment.  In the next 
216.10  edition of Minnesota Statutes, the revisor of statutes shall 
216.11  codify the amendment in this section in Minnesota Statutes, 
216.12  section 297A.70, subdivision 2. 
216.13     Sec. 49.  Minnesota Statutes 2000, section 297A.82, 
216.14  subdivision 3, is amended to read: 
216.15     Subd. 3.  [PAYMENT OF TAX TO COMMISSIONER.] If the an 
216.16  aircraft is purchased from a person who is not the holder of a 
216.17  valid sales and use tax permit under this chapter, the purchaser 
216.18  shall pay the tax to the commissioner of revenue prior to 
216.19  registering or licensing the aircraft in this state.  The 
216.20  commissioner of revenue shall issue a certificate stating that 
216.21  the sales and use tax in respect to the transaction has been 
216.22  paid. 
216.23     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
216.24  purchases occurring after the day following final enactment. 
216.25     Sec. 50.  Minnesota Statutes 2000, section 297A.82, is 
216.26  amended by adding a subdivision to read: 
216.27     Subd. 7.  [AGREEMENT WITH COMMISSIONER OF 
216.28  TRANSPORTATION.] Notwithstanding subdivisions 1 to 4, the 
216.29  commissioner may enter into an agreement with the commissioner 
216.30  of transportation whereby, upon approval of both commissioners, 
216.31  the commissioner of transportation will collect the sales tax on 
216.32  aircraft from persons required to register or license aircraft 
216.33  in this state.  For purposes of collecting the tax, the 
216.34  commissioner of transportation shall act as agent of the 
216.35  commissioner of revenue and shall be subject to all rules not 
216.36  inconsistent with the provisions of this chapter, that may be 
217.1   prescribed by the commissioner. 
217.2      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
217.3   following final enactment. 
217.4      Sec. 51.  Minnesota Statutes 2000, section 297B.03, is 
217.5   amended to read: 
217.6      297B.03 [EXEMPTIONS.] 
217.7      There is specifically exempted from the provisions of this 
217.8   chapter and from computation of the amount of tax imposed by it 
217.9   the following:  
217.10     (1) purchase or use, including use under a lease purchase 
217.11  agreement or installment sales contract made pursuant to section 
217.12  465.71, of any motor vehicle by the United States and its 
217.13  agencies and instrumentalities and by any person described in 
217.14  and subject to the conditions provided in section 297A.25, 
217.15  subdivision 18; 
217.16     (2) purchase or use of any motor vehicle by any person who 
217.17  was a resident of another state or country at the time of the 
217.18  purchase and who subsequently becomes a resident of Minnesota, 
217.19  provided the purchase occurred more than 60 days prior to the 
217.20  date such person began residing in the state of Minnesota and 
217.21  the motor vehicle was registered in the person's name in the 
217.22  other state or country; 
217.23     (3) purchase or use of any motor vehicle by any person 
217.24  making a valid election to be taxed under the provisions of 
217.25  section 297A.211; 
217.26     (4) purchase or use of any motor vehicle previously 
217.27  registered in the state of Minnesota when such transfer 
217.28  constitutes a transfer within the meaning of section 118, 331, 
217.29  332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 
217.30  1563(a) of the Internal Revenue Code of 1986, as amended through 
217.31  December 31, 1999; 
217.32     (5) purchase or use of any vehicle owned by a resident of 
217.33  another state and leased to a Minnesota based private or for 
217.34  hire carrier for regular use in the transportation of persons or 
217.35  property in interstate commerce provided the vehicle is titled 
217.36  in the state of the owner or secured party, and that state does 
218.1   not impose a sales tax or sales tax on motor vehicles used in 
218.2   interstate commerce; 
218.3      (6) purchase or use of a motor vehicle by a private 
218.4   nonprofit or public educational institution for use as an 
218.5   instructional aid in automotive training programs operated by 
218.6   the institution.  "Automotive training programs" includes motor 
218.7   vehicle body and mechanical repair courses but does not include 
218.8   driver education programs; 
218.9      (7) purchase of a motor vehicle for use as an ambulance by 
218.10  an ambulance service licensed under section 144E.10; 
218.11     (8) purchase of a motor vehicle by or for a public library, 
218.12  as defined in section 134.001, subdivision 2, as a bookmobile or 
218.13  library delivery vehicle; 
218.14     (9) purchase of a ready-mixed concrete truck; 
218.15     (10) purchase or use of a motor vehicle by a town for use 
218.16  exclusively for road maintenance, including snowplows and dump 
218.17  trucks, but not including automobiles, vans, or pickup trucks; 
218.18     (11) purchase or use of a motor vehicle by a corporation, 
218.19  society, association, foundation, or institution organized and 
218.20  operated exclusively for charitable, religious, or educational 
218.21  purposes, except a public school, university, or library, but 
218.22  only if the vehicle is: 
218.23     (i) a truck, as defined in section 168.011, a bus, as 
218.24  defined in section 168.011, or a passenger automobile, as 
218.25  defined in section 168.011, if the automobile is designed and 
218.26  used for carrying more than nine persons including the driver; 
218.27  and 
218.28     (ii) intended to be used primarily to transport tangible 
218.29  personal property or individuals, other than employees, to whom 
218.30  the organization provides service in performing its charitable, 
218.31  religious, or educational purpose. 
218.32     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
218.33  following final enactment, except that the change to paragraph 
218.34  (11) is effective for sales and purchases occurring after June 
218.35  30, 2000. 
218.36     Sec. 52.  Minnesota Statutes 2000, section 297F.16, 
219.1   subdivision 4, is amended to read: 
219.2      Subd. 4.  [ERRONEOUS REFUNDS OR CREDITS.] An erroneous 
219.3   refund or credit is considered an underpayment of tax on the 
219.4   date made.  An assessment of a deficiency arising out of an 
219.5   erroneous refund or credit must be made within 3-1/2 years from 
219.6   the date prescribed for filing the return, plus any extension of 
219.7   time granted for filing the return, but only if filed within the 
219.8   extended time, or two years from the time the tax is paid in 
219.9   full, whichever period expires later two years from the making 
219.10  of the refund.  If part of the refund was induced by fraud or 
219.11  misrepresentation of a material fact, the assessment may be made 
219.12  at any time. 
219.13     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
219.14  following final enactment. 
219.15     Sec. 53.  Minnesota Statutes 2000, section 297G.15, 
219.16  subdivision 4, is amended to read: 
219.17     Subd. 4.  [ERRONEOUS REFUNDS OR CREDITS.] An erroneous 
219.18  refund or credit is considered an underpayment of tax on the 
219.19  date made.  An assessment of a deficiency arising out of an 
219.20  erroneous refund or credit must be made within 3-1/2 years from 
219.21  the date prescribed for filing the return, plus any extension of 
219.22  time granted for filing the return, but only if filed within the 
219.23  extended time, or two years from the time the tax is paid in 
219.24  full, whichever period expires later two years from the making 
219.25  of the refund.  If part of the refund was induced by fraud or 
219.26  misrepresentation of a material fact, the assessment may be made 
219.27  at any time. 
219.28     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
219.29  following final enactment. 
219.30     Sec. 54.  Minnesota Statutes 2000, section 297G.16, 
219.31  subdivision 5, is amended to read: 
219.32     Subd. 5.  [TIME LIMIT FOR REFUNDS.] Unless otherwise 
219.33  provided in this chapter, a claim for a refund of an overpayment 
219.34  of tax must be filed within 3-1/2 years from the date prescribed 
219.35  for filing the return, plus any extension of time granted for 
219.36  filing the return, but only if filed within the extended time, 
220.1   or two years from the time the tax is paid in full, whichever 
220.2   period expires later.  Claimants under this section are subject 
220.3   to the notice requirements of section 289A.38, subdivision 7 or 
220.4   within one year from the date of an order assessing tax or from 
220.5   the date of a return filed by the commissioner, upon payment in 
220.6   full of the tax, penalties, and interest shown on the order or 
220.7   return made by the commissioner, whichever period expires later. 
220.8      <b>[EFFECTIVE DATE.]</b> This section is effective for returns 
220.9   becoming due or orders assessing tax issued on or after the day 
220.10  following final enactment. 
220.11     Sec. 55.  Minnesota Statutes 2000, section 297G.16, 
220.12  subdivision 7, is amended to read: 
220.13     Subd. 7.  [TIME LIMIT FOR A BAD DEBT DEDUCTION.] Claims for 
220.14  refund must be filed with the commissioner within one year of 
220.15  the filing of the taxpayer's income tax return containing the 
220.16  bad debt deduction that is being claimed.  Claimants under this 
220.17  subdivision are subject to the notice requirements of section 
220.18  289A.38, subdivision 7. 
220.19     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
220.20  following final enactment. 
220.21     Sec. 56.  [297H.115] [USE TAX.] 
220.22     Subdivision 1.  [IMPOSITION; LIABILITY OF GENERATORS AND 
220.23  SELF-HAULERS.] (a) A use tax is imposed on the sales price of 
220.24  mixed municipal solid waste management services received by a 
220.25  residential generator at the rate imposed under section 297H.02, 
220.26  unless the tax imposed under section 297H.02 was paid.  The 
220.27  residential generator is liable. 
220.28     (b) A use tax is imposed on the sales price of mixed 
220.29  municipal solid waste management services received by a 
220.30  commercial generator at the rate imposed under section 297H.03, 
220.31  unless the tax imposed under section 297H.03 was paid.  The 
220.32  commercial generator is liable. 
220.33     (c) A use tax is imposed on the volume of nonmixed 
220.34  municipal solid waste that is managed at the rate imposed under 
220.35  section 297H.04, unless the tax imposed under section 297H.04 
220.36  was paid.  The generator is liable. 
221.1      (d) A use tax is imposed on the sales price of mixed 
221.2   municipal solid waste management services received by a 
221.3   self-hauler at the rate imposed under section 297H.05, paragraph 
221.4   (a), unless the tax imposed under section 297H.05, paragraph 
221.5   (a), was paid.  The self-hauler is liable. 
221.6      (e) A use tax is imposed on the volume of nonmixed 
221.7   municipal solid waste managed at the rate imposed under section 
221.8   297H.05, paragraph (b), unless the tax imposed under section 
221.9   297H.05, paragraph (b), was paid.  The self-hauler is liable. 
221.10     Subd. 2.  [PAYMENT; REPORTING.] A generator or self-hauler 
221.11  that is liable under subdivision 1 shall report the use tax on a 
221.12  return prescribed by the commissioner of revenue, and shall 
221.13  remit the tax with the return.  The return and the tax must be 
221.14  filed using the filing cycle and due dates provided for taxes 
221.15  imposed under chapter 297A. 
221.16     Subd. 3.  [COMMISSIONER ASSESSMENT.] (a) The commissioner 
221.17  of revenue may not assess the generator or self-hauler a use tax 
221.18  on a transaction for which the waste management service provider 
221.19  has paid the solid waste management tax, except as provided in 
221.20  paragraph (b). 
221.21     (b) If the waste management service provider who is an 
221.22  accrual basis taxpayer remits a payment and thereafter offsets 
221.23  the amount as a bad debt under section 297H.09, the commissioner 
221.24  of revenue may assess the generator or self-hauler a use tax for 
221.25  the offset amount. 
221.26     <b>[EFFECTIVE DATE.]</b> This section is effective for services 
221.27  received on or after July 1, 2001. 
221.28     Sec. 57.  Minnesota Statutes 2000, section 461.12, is 
221.29  amended by adding a subdivision to read: 
221.30     Subd. 8.  [NOTICE TO COMMISSIONER.] The licensing authority 
221.31  under this section shall, within 30 days of the issuance of a 
221.32  license, inform the commissioner of revenue of the licensee's 
221.33  name, address, trade name, and the effective and expiration 
221.34  dates of the license.  The commissioner of revenue must also be 
221.35  informed of a license renewal, transfer, cancellation, 
221.36  suspension, or revocation during the license period. 
222.1      <b>[EFFECTIVE DATE.]</b> This section is effective for licenses 
222.2   issued, renewed, transferred, canceled, suspended, or revoked on 
222.3   or after January 1, 2002. 
222.4      Sec. 58.  Minnesota Statutes 2000, section 473H.10, 
222.5   subdivision 3, is amended to read: 
222.6      Subd. 3.  [COMPUTATION OF TAX; STATE REIMBURSEMENT.] (a) 
222.7   After having determined the market value of all land valued 
222.8   according to subdivision 2, the assessor shall compute the net 
222.9   tax capacity of those properties by applying the appropriate 
222.10  class rates.  When computing the rate of tax pursuant to section 
222.11  275.08, the county auditor shall include the net tax capacity of 
222.12  land as provided in this clause.  
222.13     (b) The county auditor shall compute the tax on lands 
222.14  valued according to subdivision 2 and nonresidential buildings 
222.15  by multiplying the net tax capacity times the total local tax 
222.16  rate for all purposes as provided in clause (a).  
222.17     (c) The county auditor shall then compute the tax on lands 
222.18  valued according to subdivision 2 and nonresidential buildings 
222.19  by multiplying the net tax capacity times the total local tax 
222.20  rate for all purposes as provided in clause (a), subtracting 
222.21  $1.50 per acre of land in the preserve.  
222.22     (d) The county auditor shall then compute the maximum ad 
222.23  valorem property tax on lands valued according to subdivision 2 
222.24  and nonresidential buildings by multiplying the net tax capacity 
222.25  times 105 percent of the previous year's statewide average local 
222.26  tax rate levied on property located within townships for all 
222.27  purposes.  
222.28     (e) The tax due and payable by the owner of preserve land 
222.29  valued according to subdivision 2 and nonresidential buildings 
222.30  will be the amount determined in clause (c) or (d), whichever is 
222.31  less.  The state shall reimburse the taxing jurisdictions for 
222.32  the amount of the difference between the net tax determined 
222.33  under this clause and the gross tax in clause (b).  Residential 
222.34  buildings shall continue to be valued and classified according 
222.35  to the provisions of sections 273.11 and 273.13, as they would 
222.36  be in the absence of this section, and the tax on those 
223.1   buildings shall not be subject to the limitation contained in 
223.2   this clause.  
223.3      The county may transfer money from the county conservation 
223.4   account created in section 40A.152 to the county revenue fund to 
223.5   reimburse the fund for the tax lost as a result of this 
223.6   subdivision or to pay taxing jurisdictions within the county for 
223.7   the tax lost.  The county auditor shall certify to the 
223.8   commissioner of revenue on or before June 1 the total amount of 
223.9   tax lost to the county and taxing jurisdictions located within 
223.10  the county as a result of this subdivision and the extent that 
223.11  the tax lost exceeds funds available in the county conservation 
223.12  account.  Payment shall be made by the state on December 26 15 
223.13  to each of the affected taxing jurisdictions, other than school 
223.14  districts, in the same proportion that the ad valorem tax is 
223.15  distributed if the county conservation account is insufficient 
223.16  to make the reimbursement.  There is annually appropriated from 
223.17  the Minnesota conservation fund under section 40A.151 to the 
223.18  commissioner of revenue an amount sufficient to make the 
223.19  reimbursement provided in this subdivision.  If the amount 
223.20  available in the Minnesota conservation fund is insufficient, 
223.21  the balance that is needed is appropriated from the general fund.
223.22     Sec. 59.  [REPORT ON INCOME TAX RECIPROCITY WITH 
223.23  WISCONSIN.] 
223.24     By March 1, 2002, the commissioner of revenue must report 
223.25  to house and senate committees dealing with taxes on the 
223.26  advisability of terminating individual income tax reciprocity 
223.27  with the state of Wisconsin under Minnesota Statutes, section 
223.28  290.081. 
223.29     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
223.30  following final enactment. 
223.31     Sec. 60.  [REPEALER.] 
223.32     (a) Minnesota Statutes 2000, section 296A.16, subdivision 
223.33  6, is repealed effective the day following final enactment. 
223.34     (b) Minnesota Statutes 2000, sections 290.095, subdivision 
223.35  7; 290.23; 290.25; and 290.31, subdivisions 2, 2a, 3, 4, 5, and 
223.36  19, are repealed effective for tax years beginning after 
224.1   December 31, 2000. 
224.2      (c) Minnesota Statutes 2000, section 297B.032, is repealed 
224.3   effective the day following final enactment. 
224.4      (d) Minnesota Statutes 2000, sections 290.06, subdivision 
224.5   25, and 290A.04, subdivision 2j, are repealed effective for 
224.6   taxable years beginning after December 31, 2001. 
224.7      (e)  Minnesota Rules, parts 8120.0200; 8120.0500; 
224.8   8120.0700; 8120.0900; 8120.1300; 8120.1600; 8120.2000; 
224.9   8120.2100; 8120.2200; 8120.2300; 8120.2500; 8120.2700; 
224.10  8120.2800; 8120.3000; 8120.3200; 8120.4300; 8120.4400; 
224.11  8120.4500; 8120.4600; 8120.4900; 8120.5000; 8120.5100; and 
224.12  8120.5300, are repealed effective the day following final 
224.13  enactment. 
224.14                             ARTICLE 6 
224.15                         LOCAL DEVELOPMENT 
224.16     Section 1.  Minnesota Statutes 2000, section 276A.01, 
224.17  subdivision 3, is amended to read: 
224.18     Subd. 3.  [COMMERCIAL-INDUSTRIAL PROPERTY.] 
224.19  "Commercial-industrial property" means the following categories 
224.20  of property, as defined in section 273.13, excluding that 
224.21  portion of the property (i) that may, by law, constitute the tax 
224.22  base for a tax increment pledged pursuant to section 469.042 or 
224.23  469.162 or sections 469.174 to 469.178, certification of which 
224.24  was requested prior to May 1, 1996, to the extent and while the 
224.25  tax increment is so pledged; or (ii) that is exempt from 
224.26  taxation under section 272.02:  
224.27     (1) that portion of class 5 property consisting of unmined 
224.28  iron ore and low-grade iron-bearing formations as defined in 
224.29  section 273.14, tools, implements, and machinery, except the 
224.30  portion of high voltage transmission lines, the value of which 
224.31  is deducted from net tax capacity under section 273.425; and 
224.32     (2) that portion of class 3 and class 5 property which is 
224.33  either used or zoned for use for any commercial or industrial 
224.34  purpose, except for such property which is, or, in the case of 
224.35  property under construction, will when completed be used 
224.36  exclusively for residential occupancy and the provision of 
225.1   services to residential occupants thereof.  Property must be 
225.2   considered as used exclusively for residential occupancy only if 
225.3   each of not less than 80 percent of its occupied residential 
225.4   units is, or, in the case of property under construction, will 
225.5   when completed be occupied under an oral or written agreement 
225.6   for occupancy over a continuous period of not less than 30 days. 
225.7      If the classification of property prescribed by section 
225.8   273.13 is modified by legislative amendment, the references in 
225.9   this subdivision are to the successor class or classes of 
225.10  property, or portions thereof, that include the kinds of 
225.11  property designated in this subdivision.  
225.12     <b>[EFFECTIVE DATE.]</b> This section is effective retroactive to 
225.13  July 1, 1997, for taxes levied in 1997, payable in 1998, and 
225.14  subsequent years. 
225.15     Sec. 2.  Minnesota Statutes 2000, section 469.169, is 
225.16  amended by adding a subdivision to read: 
225.17     Subd. 15.  [ADDITIONAL BORDER CITY ALLOCATIONS.] In 
225.18  addition to tax reductions authorized in subdivisions 7 to 14, 
225.19  the commissioner shall allocate $1,500,000 for tax reductions to 
225.20  border city enterprise zones in cities located on the western 
225.21  border of the state.  The commissioner shall make allocations to 
225.22  zones in cities on the western border on a per capita basis.  
225.23  Allocations made under this subdivision may be used for tax 
225.24  reductions as provided in section 469.171, or for other offsets 
225.25  of taxes imposed on or remitted by businesses located in the 
225.26  enterprise zone, but only if the municipality determines that 
225.27  the granting of the tax reduction or offset is necessary in 
225.28  order to retain a business within or attract a business to the 
225.29  zone.  Any portion of the allocation provided in this section 
225.30  may alternatively be used for tax reductions under section 
225.31  469.1732 or 469.1734.  If, at the end of the biennium, the total 
225.32  amount allowable under this section has not been expended, a 
225.33  city that has expended its allocation may submit a request for 
225.34  an additional allocation for qualifying reductions from the 
225.35  amount remaining.  If more than one city exceeds their 
225.36  allocation and the additional qualifying amounts exceed the 
226.1   balance remaining, the commissioner shall allocate the amount 
226.2   remaining to each qualifying city in proportion to its request 
226.3   for additional allocation.  Limitations on allocations under 
226.4   subdivision 7 do not apply to this allocation. 
226.5      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
226.6   following final enactment. 
226.7      Sec. 3.  Minnesota Statutes 2000, section 469.174, 
226.8   subdivision 3, is amended to read: 
226.9      Subd. 3.  [BONDS.] "Bonds" means any bonds, including 
226.10  refunding bonds, notes, interim certificates, 
226.11  debentures, interfund loans or advances, or other obligations 
226.12  issued by an authority under section 469.178 or which were 
226.13  issued in aid of a project under any other law, except revenue 
226.14  bonds issued pursuant to sections 469.152 to 469.165, prior to 
226.15  August 1, 1979. 
226.16     Sec. 4.  Minnesota Statutes 2000, section 469.174, 
226.17  subdivision 10, is amended to read: 
226.18     Subd. 10.  [REDEVELOPMENT DISTRICT.] (a) "Redevelopment 
226.19  district" means a type of tax increment financing district 
226.20  consisting of a project, or portions of a project, within which 
226.21  the authority finds by resolution that one or more of the 
226.22  following conditions, reasonably distributed throughout the 
226.23  district, exists: 
226.24     (1) parcels consisting of 70 percent of the area of the 
226.25  district are occupied by buildings, streets, utilities, paved or 
226.26  gravel parking lots, or other improvements similar structures 
226.27  and more than 50 percent of the buildings, not including 
226.28  outbuildings, are structurally substandard to a degree requiring 
226.29  substantial renovation or clearance; or 
226.30     (2) the property consists of vacant, unused, underused, 
226.31  inappropriately used, or infrequently used railyards, rail 
226.32  storage facilities, or excessive or vacated railroad 
226.33  rights-of-way; or 
226.34     (3) tank facilities, or property whose immediately previous 
226.35  use was for tank facilities, as defined in section 115C.02, 
226.36  subdivision 15, if the tank facilities: 
227.1      (i) have or had a capacity of more than 1,000,000 gallons; 
227.2      (ii) are located adjacent to rail facilities; and 
227.3      (iii) have been removed or are unused, underused, 
227.4   inappropriately used, or infrequently used. 
227.5      (b) For purposes of this subdivision, "structurally 
227.6   substandard" shall mean containing defects in structural 
227.7   elements or a combination of deficiencies in essential utilities 
227.8   and facilities, light and ventilation, fire protection including 
227.9   adequate egress, layout and condition of interior partitions, or 
227.10  similar factors, which defects or deficiencies are of sufficient 
227.11  total significance to justify substantial renovation or 
227.12  clearance. 
227.13     (c) A building is not structurally substandard if it is in 
227.14  compliance with the building code applicable to new buildings or 
227.15  could be modified to satisfy the building code at a cost of less 
227.16  than 15 percent of the cost of constructing a new structure of 
227.17  the same square footage and type on the site.  The municipality 
227.18  may find that a building is not disqualified as structurally 
227.19  substandard under the preceding sentence on the basis of 
227.20  reasonably available evidence, such as the size, type, and age 
227.21  of the building, the average cost of plumbing, electrical, or 
227.22  structural repairs, or other similar reliable evidence.  The 
227.23  municipality may not make such a determination without an 
227.24  interior inspection of the property, but need not have an 
227.25  independent, expert appraisal prepared of the cost of repair and 
227.26  rehabilitation of the building.  An interior inspection of the 
227.27  property is not required, if the municipality finds that (1) the 
227.28  municipality or authority is unable to gain access to the 
227.29  property after using its best efforts to obtain permission from 
227.30  the party that owns or controls the property; and (2) the 
227.31  evidence otherwise supports a reasonable conclusion that the 
227.32  building is structurally substandard.  Items of evidence that 
227.33  support such a conclusion include recent fire or police 
227.34  inspections, on-site property tax appraisals or housing 
227.35  inspections, exterior evidence of deterioration, or other 
227.36  similar reliable evidence.  Written documentation of the 
228.1   findings and reasons why an interior inspection was not 
228.2   conducted must be made and retained under section 469.175, 
228.3   subdivision 3, clause (1). 
228.4      (d) A parcel is deemed to be occupied by a structurally 
228.5   substandard building for purposes of the finding under paragraph 
228.6   (a) if all of the following conditions are met: 
228.7      (1) the parcel was occupied by a substandard building 
228.8   within three years of the filing of the request for 
228.9   certification of the parcel as part of the district with the 
228.10  county auditor; 
228.11     (2) the substandard building was demolished or removed by 
228.12  the authority or the demolition or removal was financed by the 
228.13  authority or was done by a developer under a development 
228.14  agreement with the authority; 
228.15     (3) the authority found by resolution before the demolition 
228.16  or removal that the parcel was occupied by a structurally 
228.17  substandard building and that after demolition and clearance the 
228.18  authority intended to include the parcel within a district; and 
228.19     (4) upon filing the request for certification of the tax 
228.20  capacity of the parcel as part of a district, the authority 
228.21  notifies the county auditor that the original tax capacity of 
228.22  the parcel must be adjusted as provided by section 469.177, 
228.23  subdivision 1, paragraph (h). 
228.24     (e) For purposes of this subdivision, a parcel is not 
228.25  occupied by buildings, streets, utilities, paved or gravel 
228.26  parking lots, or other improvements similar structures unless 15 
228.27  percent of the area of the parcel contains improvements 
228.28  buildings, streets, utilities, paved or gravel parking lots, or 
228.29  other similar structures. 
228.30     (f) For districts consisting of two or more noncontiguous 
228.31  areas, each area must qualify as a redevelopment district under 
228.32  paragraph (a) to be included in the district, and the entire 
228.33  area of the district must satisfy paragraph (a). 
228.34     <b>[EFFECTIVE DATE.]</b> This section is effective for districts 
228.35  for which the request for certification is made after June 30, 
228.36  2001. 
229.1      Sec. 5.  Minnesota Statutes 2000, section 469.174, 
229.2   subdivision 10a, is amended to read: 
229.3      Subd. 10a.  [RENEWAL AND RENOVATION DISTRICT.] (a) "Renewal 
229.4   and renovation district" means a type of tax increment financing 
229.5   district consisting of a project, or portions of a project, 
229.6   within which the authority finds by resolution that: 
229.7      (1)(i) parcels consisting of 70 percent of the area of the 
229.8   district are occupied by buildings, streets, utilities, paved or 
229.9   gravel parking lots, or other improvements similar structures; 
229.10  (ii) 20 percent of the buildings are structurally substandard; 
229.11  and (iii) 30 percent of the other buildings require substantial 
229.12  renovation or clearance to remove existing conditions such as:  
229.13  inadequate street layout, incompatible uses or land use 
229.14  relationships, overcrowding of buildings on the land, excessive 
229.15  dwelling unit density, obsolete buildings not suitable for 
229.16  improvement or conversion, or other identified hazards to the 
229.17  health, safety, and general well-being of the community; and 
229.18     (2) the conditions described in clause (1) are reasonably 
229.19  distributed throughout the geographic area of the district. 
229.20     (b) For purposes of determining whether a building is 
229.21  structurally substandard, whether parcels are occupied by 
229.22  buildings, streets, utilities, paved or gravel parking lots, or 
229.23  other improvements similar structures, or whether noncontiguous 
229.24  areas qualify, the provisions of subdivision 10, 
229.25  paragraphs (b), (c), (e), and (d) (f) apply.  
229.26     <b>[EFFECTIVE DATE.]</b> This section is effective for districts 
229.27  for which the requests for certification are made after June 30, 
229.28  1997, except the provision requiring parcels to be occupied by 
229.29  structures is effective for districts for which the request for 
229.30  certification is made after June 30, 2001. 
229.31     Sec. 6.  Minnesota Statutes 2000, section 469.174, 
229.32  subdivision 12, is amended to read: 
229.33     Subd. 12.  [ECONOMIC DEVELOPMENT DISTRICT.] "Economic 
229.34  development district" means a type of tax increment financing 
229.35  district which consists of any project, or portions of a 
229.36  project, not meeting the requirements found in the definition of 
230.1   redevelopment district, renewal and renovation district, soils 
230.2   condition district, or housing district, but which the authority 
230.3   finds to be in the public interest because: 
230.4      (1) it will discourage commerce, industry, or manufacturing 
230.5   from moving their operations to another state or municipality; 
230.6   or 
230.7      (2) it will result in increased employment in the state; or 
230.8      (3) it will result in preservation and enhancement of the 
230.9   tax base of the state. 
230.10     <b>[EFFECTIVE DATE.]</b> This section is effective for districts 
230.11  for which the request for certification is made after June 30, 
230.12  2001. 
230.13     Sec. 7.  Minnesota Statutes 2000, section 469.175, 
230.14  subdivision 1, is amended to read: 
230.15     Subdivision 1.  [TAX INCREMENT FINANCING PLAN.] (a) A tax 
230.16  increment financing plan shall contain:  
230.17     (1) a statement of objectives of an authority for the 
230.18  improvement of a project; 
230.19     (2) a statement as to the development program for the 
230.20  project, including the property within the project, if any, that 
230.21  the authority intends to acquire; 
230.22     (3) a list of any development activities that the plan 
230.23  proposes to take place within the project, for which contracts 
230.24  have been entered into at the time of the preparation of the 
230.25  plan, including the names of the parties to the contract, the 
230.26  activity governed by the contract, the cost stated in the 
230.27  contract, and the expected date of completion of that activity; 
230.28     (4) identification or description of the type of any other 
230.29  specific development reasonably expected to take place within 
230.30  the project, and the date when the development is likely to 
230.31  occur; 
230.32     (5) estimates of the following:  
230.33     (i) cost of the project, including administration expenses; 
230.34     (ii) amount of bonded indebtedness to be incurred; 
230.35     (iii) sources of revenue to finance or otherwise pay public 
230.36  costs; 
231.1      (iv) the most recent net tax capacity of taxable real 
231.2   property within the tax increment financing district and within 
231.3   any subdistrict; 
231.4      (v) the estimated captured net tax capacity of the tax 
231.5   increment financing district at completion; and 
231.6      (vi) the duration of the tax increment financing district's 
231.7   and any subdistrict's existence; 
231.8      (6) statements of the authority's alternate estimates of 
231.9   the impact of tax increment financing on the net tax capacities 
231.10  of all taxing jurisdictions in which the tax increment financing 
231.11  district is located in whole or in part.  For purposes of one 
231.12  statement, the authority shall assume that the estimated 
231.13  captured net tax capacity would be available to the taxing 
231.14  jurisdictions without creation of the district, and for purposes 
231.15  of the second statement, the authority shall assume that none of 
231.16  the estimated captured net tax capacity would be available to 
231.17  the taxing jurisdictions without creation of the district or 
231.18  subdistrict; 
231.19     (7) identification and description of studies and analyses 
231.20  used to make the determination set forth in subdivision 3, 
231.21  clause (2); and 
231.22     (8) identification of all parcels to be included in the 
231.23  district or any subdistrict. 
231.24     (b) For a housing district, redevelopment district, or a 
231.25  hazardous substance subdistrict, the authority may elect in the 
231.26  tax increment financing plan to provide for the identification 
231.27  of a minimum market value in the plan, development agreement, or 
231.28  assessment agreement, and provide that increment is first 
231.29  received by the authority when (1) the market value of the 
231.30  improvements as determined by the assessor reaches or exceeds 
231.31  the minimum market value, or (2) four years has elapsed from the 
231.32  date of certification of the original net tax capacity of the 
231.33  taxable real property in the district or subdistrict by the 
231.34  county auditor, whichever is earlier. 
231.35     <b>[EFFECTIVE DATE.]</b> This section is effective for requests 
231.36  for certification of tax increment financing districts received 
232.1   after June 30, 2001. 
232.2      Sec. 8.  Minnesota Statutes 2000, section 469.175, is 
232.3   amended by adding a subdivision to read: 
232.4      Subd. 4a.  [FILING PLAN WITH STATE.] (a) The authority must 
232.5   file a copy of the tax increment financing plan and amendments 
232.6   to the plan with the commissioner of revenue.  The authority 
232.7   must also file a copy of the development plan or the project 
232.8   plan for the project area with the commissioner of revenue.  The 
232.9   commissioner of revenue shall provide a copy of a plan to the 
232.10  state auditor upon request. 
232.11     (b) Filing under this subdivision must be made within 60 
232.12  days after the latest of: 
232.13     (1) the filing of the request for certification of the 
232.14  district; 
232.15     (2) approval of the plan by the municipality; or 
232.16     (3) adoption of the plan by the authority. 
232.17     <b>[EFFECTIVE DATE.]</b> This section is effective for plans and 
232.18  amendments approved after July 1, 2000. 
232.19     Sec. 9.  Minnesota Statutes 2000, section 469.175, 
232.20  subdivision 6b, is amended to read: 
232.21     Subd. 6b.  [DURATION OF DISCLOSURE AND REPORTING 
232.22  REQUIREMENTS.] The disclosure and reporting requirements imposed 
232.23  by subdivisions 5, and 6, and 6a apply with respect to a tax 
232.24  increment financing district beginning with the annual 
232.25  disclosure and reports for the year in which the original net 
232.26  tax capacity of the district was certified and ending with the 
232.27  annual disclosure and reports for the year in which both of the 
232.28  following events have occurred: 
232.29     (1) decertification of the district; and 
232.30     (2) expenditure or return to the county auditor of all 
232.31  remaining revenues derived from tax increments paid by 
232.32  properties in the district. 
232.33     <b>[EFFECTIVE DATE.]</b> This section is effective for reports 
232.34  filed after December 31, 2000. 
232.35     Sec. 10.  Minnesota Statutes 2000, section 469.176, 
232.36  subdivision 1b, is amended to read: 
233.1      Subd. 1b.  [DURATION LIMITS; TERMS.] (a) No tax increment 
233.2   shall in any event be paid to the authority 
233.3      (1) after 15 years after receipt by the authority of the 
233.4   first increment for a renewal and renovation district, 
233.5      (2) after 20 years after receipt by the authority of the 
233.6   first increment for a soils condition district, 
233.7      (3) after eight years after receipt by the authority of the 
233.8   first increment for an economic development district, 
233.9      (4) for a housing district or a redevelopment district, 
233.10  after 20 years from the date of receipt by the authority of the 
233.11  first tax increment by the authority pursuant to section 
233.12  469.175, subdivision 1, paragraph (b); or, if no provision is 
233.13  made under section 469.175, subdivision 1, paragraph (b), after 
233.14  25 years from the date of receipt by the authority of the first 
233.15  increment. 
233.16     (b) For purposes of determining a duration limit under this 
233.17  subdivision or subdivision 1e that is based on the receipt of an 
233.18  increment, any increments from taxes payable in the year in 
233.19  which the district terminates shall be paid to the authority.  
233.20  This paragraph does not affect a duration limit calculated from 
233.21  the date of approval of the tax increment financing plan or 
233.22  based on the recovery of costs or to a duration limit under 
233.23  subdivision 1c.  This paragraph does not supersede the 
233.24  restrictions on payment of delinquent taxes in subdivision 1f. 
233.25     (c) Except as authorized by section 469.175, subdivision 1, 
233.26  paragraph (b), An action by the authority to waive or decline to 
233.27  accept an increment has no effect for purposes of computing a 
233.28  duration limit based on the receipt of increment under this 
233.29  subdivision or any other provision of law.  The authority is 
233.30  deemed to have received an increment for any year in which it 
233.31  waived or declined to accept an increment, regardless of whether 
233.32  the increment was paid to the authority. 
233.33     (d) Receipt by a hazardous substance subdistrict of an 
233.34  increment as a result of a reduction in original net tax 
233.35  capacity under section 469.174, subdivision 7, paragraph (b), 
233.36  does not constitute receipt of increment by the overlying 
234.1   district for purpose of calculating the duration limit under 
234.2   this section. 
234.3      <b>[EFFECTIVE DATE.]</b> This section is effective for districts 
234.4   for which the request for certification is made after June 30, 
234.5   2001. 
234.6      Sec. 11.  Minnesota Statutes 2000, section 469.176, 
234.7   subdivision 1e, is amended to read: 
234.8      Subd. 1e.  [DURATION LIMITS; HAZARDOUS SUBSTANCE 
234.9   SUBDISTRICTS.] If a parcel of a district is part of a designated 
234.10  hazardous substance site or a hazardous substance subdistrict, 
234.11  tax increment may be paid to the authority from the parcel for 
234.12  longer than the period otherwise provided by subdivisions 1 to 
234.13  1f for the overlying district.  The extended period for 
234.14  collection of tax increment begins on the date of receipt of the 
234.15  first tax increment from the parcel that is more than any tax 
234.16  increment received from the parcel before the date of the 
234.17  certification under section 469.174, subdivision 7, paragraph 
234.18  (b), and received after the date of certification to the county 
234.19  auditor described in section 469.174, subdivision 7, paragraph 
234.20  (b).  The extended period for collection of tax increment is the 
234.21  lesser of:  (1) 25 years from the date of commencement of the 
234.22  extended period or 20 years if the authority elects under 
234.23  section 469.175, subdivision 1, paragraph (b), to defer receipt 
234.24  of the first increment; or (2) the period necessary to recover 
234.25  the costs of removal actions or remedial actions specified in a 
234.26  development response action plan. 
234.27     <b>[EFFECTIVE DATE.]</b> This section is effective for requests 
234.28  for certification of subdistricts made after June 30, 2001. 
234.29     Sec. 12.  Minnesota Statutes 2000, section 469.176, 
234.30  subdivision 3, is amended to read: 
234.31     Subd. 3.  [LIMITATION ON ADMINISTRATIVE EXPENSES.] (a) For 
234.32  districts for which certification was requested before August 1, 
234.33  1979, or after June 30, 1982, no tax increment shall be used to 
234.34  pay any administrative expenses for a project which exceed ten 
234.35  percent of the total tax increment expenditures authorized by 
234.36  the tax increment financing plan or the total tax increment 
235.1   expenditures for the project, whichever is less.  
235.2      (b) For districts for which certification was requested 
235.3   after July 31, 1979, and before July 1, 1982, no tax increment 
235.4   shall be used to pay administrative expenses, as defined in 
235.5   Minnesota Statutes 1980, section 273.73, for a project district 
235.6   which exceeds five percent of the total tax increment 
235.7   expenditures authorized by the tax increment financing plan or 
235.8   the total tax increment expenditures for the project district, 
235.9   whichever is less. 
235.10     (c) For districts for which certification was requested 
235.11  after June 30, 2001, no tax increment may be used to pay any 
235.12  administrative expenses for a project which exceed ten percent 
235.13  of total tax increment expenditures authorized by the tax 
235.14  increment financing plan or the total tax increments from the 
235.15  district, whichever is less. 
235.16     <b>[EFFECTIVE DATE.]</b> This section is effective for districts 
235.17  for which the request for certification is received after June 
235.18  30, 2001. 
235.19     Sec. 13.  Minnesota Statutes 2000, section 469.176, 
235.20  subdivision 4g, is amended to read: 
235.21     Subd. 4g.  [GENERAL GOVERNMENT USE PROHIBITED.] (a) These 
235.22  revenues shall Tax increments may not be used to circumvent 
235.23  existing levy limit law.  
235.24     (b) No revenues derived from tax increment from any 
235.25  district, whether certified before or after August 1, 1979, 
235.26  shall may be used for the acquisition, construction, renovation, 
235.27  operation, or maintenance of a building to be used primarily and 
235.28  regularly for conducting the business of a municipality, county, 
235.29  school district, or any other local unit of government or the 
235.30  state or federal government or for a commons area used as a 
235.31  public park, or a facility used for social, recreational, or 
235.32  conference purposes.  This provision shall does not prohibit the 
235.33  use of revenues derived from tax increments for the construction 
235.34  or renovation of a parking structure or of a privately owned 
235.35  facility for conference purposes.  
235.36     (b) If any publicly owned facility used for social, 
236.1   recreational, or conference purposes and financed in whole or in 
236.2   part from revenues derived from a district is operated or 
236.3   managed by an entity other than the authority, the operating and 
236.4   management policies of the facility must be approved by the 
236.5   governing body of the authority. 
236.6      (c)(1) Tax increments may not be used to pay for the cost 
236.7   of public improvements, equipment, or other items, if: 
236.8      (i) the improvements, equipment, or other items are located 
236.9   outside of the area of the tax increment financing district from 
236.10  which the increments were collected; and 
236.11     (ii) the improvements, equipment, or items that (A) 
236.12  primarily serve a decorative or aesthetic purpose, or (B) serve 
236.13  a functional purpose, but their cost is increased by more than 
236.14  100 percent as a result of the selection of materials, design, 
236.15  or type as compared with more commonly used materials, designs, 
236.16  or types for similar improvements, equipment, or items. 
236.17     (2) The provisions of this paragraph do not apply to 
236.18  expenditures related to the rehabilitation of historic 
236.19  structures that are: 
236.20     (i) individually listed on the National Register of 
236.21  Historic Places; or 
236.22     (ii) a contributing element to a historic district listed 
236.23  on the National Register of Historic Places. 
236.24     <b>[EFFECTIVE DATE.]</b> This section is effective for 
236.25  expenditures of increment made after June 30, 2001. 
236.26     Sec. 14.  Minnesota Statutes 2000, section 469.176, is 
236.27  amended by adding a subdivision to read: 
236.28     Subd. 41.  [PROHIBITED FACILITIES.] (a) No tax increment 
236.29  from any district may be used for: 
236.30     (1) a commons area used as a public park; or 
236.31     (2) a facility used for social, recreational, or conference 
236.32  purposes. 
236.33     (b) This subdivision does not apply to a privately owned 
236.34  facility for conference purposes or a parking structure. 
236.35     <b>[EFFECTIVE DATE.]</b> This section is effective for 
236.36  expenditures of increment made after June 30, 2001, but does not 
237.1   apply to (1) expenditures made before January 1, 2000; (2) 
237.2   expenditures made under a binding contract entered before 
237.3   January 1, 2000; or (3) expenditures made under a binding 
237.4   contract entered pursuant to a letter of intent with the 
237.5   developer or contractor or its assigns if the letter of intent 
237.6   was entered before January 1, 2000. 
237.7      Sec. 15.  Minnesota Statutes 2000, section 469.177, 
237.8   subdivision 1, is amended to read: 
237.9      Subdivision 1.  [ORIGINAL NET TAX CAPACITY.] (a) Upon or 
237.10  after adoption of a tax increment financing plan, the auditor of 
237.11  any county in which the district is situated shall, upon request 
237.12  of the authority, certify the original net tax capacity of the 
237.13  tax increment financing district and that portion of the 
237.14  district overlying any subdistrict as described in the tax 
237.15  increment financing plan and shall certify in each year 
237.16  thereafter the amount by which the original net tax capacity has 
237.17  increased or decreased as a result of a change in tax exempt 
237.18  status of property within the district and any subdistrict, 
237.19  reduction or enlargement of the district or changes pursuant to 
237.20  subdivision 4.  
237.21     (b) For districts approved under section 469.175, 
237.22  subdivision 3, or parcels added to existing districts after May 
237.23  1, 1988, if the classification under section 273.13 of property 
237.24  located in a district changes to a classification that has a 
237.25  different assessment ratio, the original net tax capacity of 
237.26  that property must be redetermined at the time when its use is 
237.27  changed as if the property had originally been classified in the 
237.28  same class in which it is classified after its use is changed. 
237.29     (c) The amount to be added to the original net tax capacity 
237.30  of the district as a result of previously tax exempt real 
237.31  property within the district becoming taxable equals the net tax 
237.32  capacity of the real property as most recently assessed pursuant 
237.33  to section 273.18 or, if that assessment was made more than one 
237.34  year prior to the date of title transfer rendering the property 
237.35  taxable, the net tax capacity assessed by the assessor at the 
237.36  time of the transfer.  If improvements are made to tax exempt 
238.1   property after certification of the district and before the 
238.2   parcel becomes taxable, the assessor shall, at the request of 
238.3   the authority, separately assess the estimated market value of 
238.4   the improvements.  If the property becomes taxable, the county 
238.5   auditor shall add to original net tax capacity, the net tax 
238.6   capacity of the parcel, excluding the separately assessed 
238.7   improvements.  If substantial taxable improvements were made to 
238.8   a parcel after certification of the district and if the property 
238.9   later becomes tax exempt, in whole or part, as a result of the 
238.10  authority acquiring the property through foreclosure or exercise 
238.11  of remedies under a lease or other revenue agreement or as a 
238.12  result of tax forfeiture, the amount to be added to the original 
238.13  net tax capacity of the district as a result of the property 
238.14  again becoming taxable is the amount of the parcel's value that 
238.15  was included in original net tax capacity when the parcel was 
238.16  first certified.  The amount to be added to the original net tax 
238.17  capacity of the district as a result of enlargements equals the 
238.18  net tax capacity of the added real property as most recently 
238.19  certified by the commissioner of revenue as of the date of 
238.20  modification of the tax increment financing plan pursuant to 
238.21  section 469.175, subdivision 4. 
238.22     (d) For districts approved under section 469.175, 
238.23  subdivision 3, or parcels added to existing districts after May 
238.24  1, 1988, if the net tax capacity of a property increases because 
238.25  the property no longer qualifies under the Minnesota 
238.26  Agricultural Property Tax Law, section 273.111; the Minnesota 
238.27  Open Space Property Tax Law, section 273.112; or the 
238.28  Metropolitan Agricultural Preserves Act, chapter 473H, or 
238.29  because platted, unimproved property is improved or three years 
238.30  pass after approval of the plat under section 273.11, 
238.31  subdivision 1, the increase in net tax capacity must be added to 
238.32  the original net tax capacity.  
238.33     (e) The amount to be subtracted from the original net tax 
238.34  capacity of the district as a result of previously taxable real 
238.35  property within the district becoming tax exempt, or a reduction 
238.36  in the geographic area of the district, shall be the amount of 
239.1   original net tax capacity initially attributed to the property 
239.2   becoming tax exempt or being removed from the district.  If the 
239.3   net tax capacity of property located within the tax increment 
239.4   financing district is reduced by reason of a court-ordered 
239.5   abatement, stipulation agreement, voluntary abatement made by 
239.6   the assessor or auditor or by order of the commissioner of 
239.7   revenue, the reduction shall be applied to the original net tax 
239.8   capacity of the district when the property upon which the 
239.9   abatement is made has not been improved since the date of 
239.10  certification of the district and to the captured net tax 
239.11  capacity of the district in each year thereafter when the 
239.12  abatement relates to improvements made after the date of 
239.13  certification.  The county auditor may specify reasonable form 
239.14  and content of the request for certification of the authority 
239.15  and any modification thereof pursuant to section 469.175, 
239.16  subdivision 4.  
239.17     (f) If a parcel of property contained a substandard 
239.18  building that was demolished or removed and if the authority 
239.19  elects to treat the parcel as occupied by a substandard building 
239.20  under section 469.174, subdivision 10, paragraph (b), the 
239.21  auditor shall certify the original net tax capacity of the 
239.22  parcel using the greater of (1) the current net tax capacity of 
239.23  the parcel, or (2) the estimated market value of the parcel for 
239.24  the year in which the building was demolished or removed, but 
239.25  applying the class rates for the current year. 
239.26     <b>[EFFECTIVE DATE.]</b> This section is effective for parcels 
239.27  that become taxable after June 30, 2001, and applies to tax 
239.28  increment financing districts, regardless of when the request 
239.29  for certification was made. 
239.30     Sec. 16.  Minnesota Statutes 2000, section 469.178, is 
239.31  amended by adding a subdivision to read: 
239.32     Subd. 7.  [INTERFUND LOANS.] The authority or municipality 
239.33  may advance or loan money to finance expenditures under section 
239.34  469.176, subdivision 4, from its general fund or any other fund 
239.35  under which it has legal authority to do so.  The loan or 
239.36  advance must be approved, by resolution of the governing body, 
240.1   before money is transferred, advanced, or spent, whichever is 
240.2   earliest.  The terms and conditions for repayment of the loan 
240.3   must be provided in writing and include, at a minimum, the 
240.4   principal amount, the interest rate, and maximum term.  The 
240.5   maximum rate of interest permitted to be charged is limited to 
240.6   the greater of the rates specified under section 270.75 or 
240.7   549.09. 
240.8      <b>[EFFECTIVE DATE.]</b> This section is effective for loans and 
240.9   advances made after June 30, 2001.  Interfund loans and advances 
240.10  made before July 1, 2001, are ratified and approved, subject to 
240.11  the following restrictions:  (1) the interest accrued or paid 
240.12  after June 30, 2001, may not exceed the limit in this section 
240.13  and (2) if there is no resolution or other document created 
240.14  contemporaneously with the making of the loan or advance that 
240.15  specifies the principal amount of the loan or advance, the 
240.16  principal amount of the loan or advance is limited to a maximum 
240.17  amount equal to the largest negative cash balance that existed 
240.18  at any time in the fund that received the undocumented loan or 
240.19  advance.  An authority or municipality may modify the terms of 
240.20  an interfund loan or advance made before July 1, 2001, to comply 
240.21  with any of the requirements of this section as the authority or 
240.22  municipality deems appropriate. 
240.23     Sec. 17.  Minnesota Statutes 2000, section 469.1812, 
240.24  subdivision 2, is amended to read: 
240.25     Subd. 2.  [GOVERNING BODY.] "Governing body" means, for a 
240.26  city, the city council; for a school district, the school board; 
240.27  for a county, the county board; and for a town, the annual 
240.28  meeting of the town board of supervisors. 
240.29     <b>[EFFECTIVE DATE.]</b> This section is effective retroactive to 
240.30  May 26, 1999. 
240.31     Sec. 18.  Minnesota Statutes 2000, section 469.1813, 
240.32  subdivision 6, is amended to read: 
240.33     Subd. 6.  [DURATION LIMIT.] (a) A political subdivision may 
240.34  grant an abatement for a period no longer than ten years, except 
240.35  as provided under paragraph (b).  The subdivision may specify in 
240.36  the abatement resolution a shorter duration.  If the resolution 
241.1   does not specify a period of time, the abatement is for eight 
241.2   years.  If an abatement has been granted to a parcel of property 
241.3   and the period of the abatement has expired, the political 
241.4   subdivision that granted the abatement may not grant another 
241.5   abatement for eight years after the expiration of the first 
241.6   abatement.  This prohibition does not apply to improvements 
241.7   added after and not subject to the first abatement. 
241.8      (b) A political subdivision proposing to abate taxes for a 
241.9   parcel may request, in writing, that the other political 
241.10  subdivisions in which the parcel is located grant an abatement 
241.11  for the property.  If one of the other political subdivisions 
241.12  declines, in writing, to grant an abatement or if 90 days pass 
241.13  after receipt of the request to grant an abatement without a 
241.14  written response from one of the political subdivisions, the 
241.15  duration limit for an abatement for the parcel by the requesting 
241.16  political subdivision and any other participating political 
241.17  subdivision is increased to 15 years.  If the political 
241.18  subdivision which declined to grant an abatement later grants an 
241.19  abatement for the parcel, the 15-year duration limit is reduced 
241.20  by one year for each year that the declining political 
241.21  subdivision grants an abatement for the parcel during the period 
241.22  of the abatement granted by the requesting political 
241.23  subdivision.  The duration limit may not be reduced below the 
241.24  limit under paragraph (a).  
241.25     <b>[EFFECTIVE DATE.]</b> This section is effective for abatements 
241.26  approved after the day following final enactment. 
241.27     Sec. 19.  Minnesota Statutes 2000, section 475.58, 
241.28  subdivision 1, as amended by Laws 2001, chapter 214, section 43, 
241.29  is amended to read: 
241.30     Subdivision 1.  [APPROVAL BY ELECTORS; EXCEPTIONS.] 
241.31  Obligations authorized by law or charter may be issued by any 
241.32  municipality upon obtaining the approval of a majority of the 
241.33  electors voting on the question of issuing the obligations, but 
241.34  an election shall not be required to authorize obligations 
241.35  issued: 
241.36     (1) to pay any unpaid judgment against the municipality; 
242.1      (2) for refunding obligations; 
242.2      (3) for an improvement or improvement program, which 
242.3   obligation is payable wholly or partly from the proceeds of 
242.4   special assessments levied upon property specially benefited by 
242.5   the improvement or by an improvement within the improvement 
242.6   program, or of taxes levied upon the increased value of property 
242.7   within a district for the development of which the improvement 
242.8   is undertaken, including obligations which are the general 
242.9   obligations of the municipality, if the municipality is entitled 
242.10  to reimbursement in whole or in part from the proceeds of such 
242.11  special assessments or taxes and not less than 20 percent of the 
242.12  cost of the improvement or the improvement program is to be 
242.13  assessed against benefited property or is to be paid from the 
242.14  proceeds of federal grant funds or a combination thereof, or is 
242.15  estimated to be received from such taxes within the district; 
242.16     (4) payable wholly from the income of revenue producing 
242.17  conveniences; 
242.18     (5) under the provisions of a home rule charter which 
242.19  permits the issuance of obligations of the municipality without 
242.20  election; 
242.21     (6) under the provisions of a law which permits the 
242.22  issuance of obligations of a municipality without an election; 
242.23     (7) to fund pension or retirement fund liabilities pursuant 
242.24  to section 475.52, subdivision 6; 
242.25     (8) under a capital improvement plan under section 373.40; 
242.26  and 
242.27     (9) under sections 469.1813 to 469.1815 (property tax 
242.28  abatement authority bonds), if the proceeds of the bonds are not 
242.29  used for a purpose prohibited under section 469.176, subdivision 
242.30  4g, paragraph (b). 
242.31     <b>[EFFECTIVE DATE.]</b> This section is effective for bonds 
242.32  issued or sold after the day following final enactment. 
242.33     Sec. 20.  Laws 2000, chapter 490, article 11, section 26, 
242.34  the effective date, is amended to read: 
242.35     <b>EFFECTIVE DATE:</b>  This section is effective for increments 
242.36  spent after July 1, 2000, from districts for which certification 
243.1   was requested after May 1, 1990 June 30, 1982. 
243.2      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
243.3   following final enactment. 
243.4      Sec. 21.  [HOLLMAN DECREE HOUSING.] 
243.5      To implement a federal court order or decree relating to 
243.6   the provision of low-rent public housing finance, in whole or in 
243.7   part, with federal financial assistance under section 5 of the 
243.8   United States Housing Act, or any successor legislation, the 
243.9   Minneapolis public housing authority or the metropolitan 
243.10  council, acting under the powers of Minnesota Statutes, sections 
243.11  469.001 to 469.047, may enter a cooperation agreement with the 
243.12  governing body of any municipality or county within the 
243.13  metropolitan area, as defined in Minnesota Statutes, section 
243.14  473.121, subdivision 2, to provide exemption from all real and 
243.15  personal taxes levied or imposed by the state, city, county, or 
243.16  other political subdivision, for which the Minneapolis public 
243.17  housing authority or the metropolitan council shall make, or 
243.18  cause to be made, payments in lieu of taxes as provided under 
243.19  Minnesota Statutes, section 469.040.  This exemption and 
243.20  obligation to make payments in lieu of taxes continues until the 
243.21  housing is no longer subject to the provisions of section 5 of 
243.22  the United States Housing Act, or any successor legislation. 
243.23     <b>[EFFECTIVE DATE.]</b> This section is effective with respect to 
243.24  any cooperation agreement entered into on or after November 1, 
243.25  1997.  Any owner of low-rent public housing acquired and 
243.26  renovated or constructed under a cooperation agreement under 
243.27  this section may apply for abatement of the real or personal 
243.28  property taxes under Minnesota Statutes, section 375.192, 
243.29  notwithstanding the time limitation for filing application under 
243.30  section 375.192.  This section applies in counties of Anoka, 
243.31  Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. 
243.32     Sec. 22.  [CITY OF LUVERNE.] 
243.33     Subdivision 1.  [AUTHORIZATION.] The governing body of the 
243.34  city of Luverne may designate between one and three areas of the 
243.35  city as border city development zones.  The total area of the 
243.36  zones may not exceed 100 acres. 
244.1      Subd. 2.  [APPLICATION OF GENERAL LAW.] (a) The provisions 
244.2   of Minnesota Statutes, sections 469.1731 to 469.1735, apply to 
244.3   the border city development zones designated under this section. 
244.4   The governing body of the city may exercise the powers granted 
244.5   under Minnesota Statutes, sections 469.1731 to 469.1735, 
244.6   including powers that apply outside of the zones. 
244.7      (b) The allocation under subdivision 3 for purposes of 
244.8   Minnesota Statutes, section 469.1735, subdivision 2, and the 
244.9   necessary amount of the allocation is appropriated to the 
244.10  commissioner of revenue. 
244.11     Subd. 3.  [ALLOCATION OF STATE TAX REDUCTIONS.] (a) The 
244.12  cumulative total amount of tax reductions for all years of the 
244.13  program under Minnesota Statutes, sections 469.1731 to 469.1735, 
244.14  is limited to $175,000. 
244.15     (b) This allocation may be used for tax reductions provided 
244.16  in Minnesota Statutes, section 469.1732 or 469.1734, or for 
244.17  reimbursements under Minnesota Statutes, section 469.1735, 
244.18  subdivision 3, but only if the governing body of the city of 
244.19  Luverne determines that the tax reduction or offset is necessary 
244.20  to enable a business to expand within a city or to attract a 
244.21  business to the city. 
244.22     (c) The commissioner of revenue may waive the limit under 
244.23  this subdivision using the same rules and standards provided in 
244.24  Minnesota Statutes, section 469.169, subdivision 12, paragraph 
244.25  (b). 
244.26     Subd. 4.  [EFFECTIVE DATE.] This section is effective upon 
244.27  compliance by the governing body of the city of Luverne with the 
244.28  requirements of Minnesota Statutes, section 645.021. 
244.29                             ARTICLE 7 
244.30                  SUSTAINABLE FOREST INCENTIVE ACT
244.31     Section 1.  Minnesota Statutes 2000, section 88.49, 
244.32  subdivision 5, is amended to read: 
244.33     Subd. 5.  [CANCELLATION.] Upon the failure of the owner 
244.34  faithfully to fulfill and perform such contract or any provision 
244.35  thereof, or any requirement of sections 88.47 to 88.53, or any 
244.36  rule adopted by the commissioner thereunder, the commissioner 
245.1   may cancel the contract in the manner herein provided.  The 
245.2   commissioner shall give to the owner, in the manner prescribed 
245.3   in section 88.48, subdivision 4, 60 days' notice of a hearing 
245.4   thereon at which the owner may appear and show cause, if any, 
245.5   why the contract should not be canceled.  The commissioner shall 
245.6   thereupon determine whether the contract should be canceled and 
245.7   make an order to that effect.  Notice of the commissioner's 
245.8   determination and the making of the order shall be given to the 
245.9   owner in the manner provided in section 88.48, subdivision 4.  
245.10  On determining that the contract should be canceled and no 
245.11  appeal therefrom be taken, the commissioner shall send notice 
245.12  thereof to the auditor of the county and to the town clerk of 
245.13  the town affected and file with the recorder a certified copy of 
245.14  the order, who shall forthwith note the cancellation upon the 
245.15  record thereof, and thereupon the land therein described shall 
245.16  cease to be an auxiliary forest and, together with the timber 
245.17  thereon, become liable to all taxes and assessments that 
245.18  otherwise would have been levied against it had it never been an 
245.19  auxiliary forest from the time of the making of the contract, 
245.20  any provisions of the statutes of limitation to the contrary 
245.21  notwithstanding, less the amount of taxes paid under the 
245.22  provisions of section 88.51, subdivision 1, together with 
245.23  interest on such taxes and assessments at six percent per annum, 
245.24  but without penalties. 
245.25     The commissioner may in like manner and with like effect 
245.26  cancel the contract upon written application of the owner. 
245.27     The commissioner shall cancel any contract if the owner has 
245.28  made successful application under sections 270.31 to 270.39 
245.29  inclusive 290C.01 to 290C.11, the Minnesota Tree Growth Tax Law 
245.30  Sustainable Forest Incentive Act, and has paid to the county 
245.31  treasurer the difference between the amount which would have 
245.32  been paid had the land under contract been subject to the 
245.33  Minnesota Tree Growth Tax Law and the Sustainable Forest 
245.34  Incentive Act from the date of the filing of the contract and 
245.35  the amount actually paid under section 88.51, subdivisions 1 and 
245.36  2.  This tax difference must be calculated based on the years 
246.1   the lands would have been taxed under the Tree Growth Tax Law 
246.2   and the Sustainable Forest Incentive Act.  The sustainable 
246.3   forest tax difference is net of the incentive payment of section 
246.4   290C.07.  If the amount which would have been paid, had the land 
246.5   under contract been under the Minnesota Tree Growth Tax Law and 
246.6   the Sustainable Forest Incentive Act from the date of the filing 
246.7   of the contract, is less than the amount actually paid under the 
246.8   contract, the cancellation shall be made without further payment 
246.9   by the owner. 
246.10     When the execution of any contract creating an auxiliary 
246.11  forest shall have been procured through fraud or deception 
246.12  practiced upon the county board or the commissioner or any other 
246.13  person or body representing the state, it may be canceled upon 
246.14  suit brought by the attorney general at the direction of the 
246.15  commissioner.  This cancellation shall have the same effect as 
246.16  the cancellation of a contract by the commissioner. 
246.17     Sec. 2.  Minnesota Statutes 2000, section 88.49, 
246.18  subdivision 9a, is amended to read: 
246.19     Subd. 9a.  [LAND TRADES WITH GOVERNMENTAL UNITS.] 
246.20  Notwithstanding subdivisions 6 and 9, or section 88.491, 
246.21  subdivision 2, if an owner trades land under auxiliary forest 
246.22  contract for land owned by a governmental unit and the owner 
246.23  agrees to use the land received in trade from the governmental 
246.24  unit for the production of forest products, upon resolution of 
246.25  the county board, no taxes and assessments shall be levied 
246.26  against the land traded, except that any current or delinquent 
246.27  annual taxes or yield taxes due on that land while it was under 
246.28  the auxiliary forest provision must be paid prior to the land 
246.29  exchange.  The land received from the governmental unit in the 
246.30  land trade automatically qualifies for inclusion in the Tree 
246.31  Growth Tax Law Sustainable Forest Incentive Act. 
246.32     Sec. 3.  Minnesota Statutes 2000, section 88.491, 
246.33  subdivision 2, is amended to read: 
246.34     Subd. 2.  [EFFECT OF EXPIRED CONTRACT.] When auxiliary 
246.35  forest contracts expire, or prior to expiration by mutual 
246.36  agreement between the land owner and the appropriate county 
247.1   office, the lands previously covered by an auxiliary forest 
247.2   contract automatically qualify for inclusion in the Tree Growth 
247.3   Tax Law under the provisions of the Sustainable Forest Incentive 
247.4   Act; provided that when such lands are included in the Tree 
247.5   Growth Tax Law Sustainable Forest Incentive Act prior to 
247.6   expiration of the auxiliary forest contract they will be 
247.7   transferred and a tax paid as provided in accordance with the 
247.8   provisions of section 88.49, subdivision 5, upon application and 
247.9   inclusion in the sustainable forest incentive program.  The land 
247.10  owner shall pay taxes in an amount equal to the difference 
247.11  between: 
247.12     (1) the sum of: 
247.13     (i) the amount which would have been paid from the date of 
247.14  the filing of the contract had the land under contract been 
247.15  subject to the Minnesota Tree Growth Tax Law from the date of 
247.16  the filing of the contract and; plus 
247.17     (ii) beginning with taxes payable in 2003, the taxes that 
247.18  would have been paid if the land had been enrolled in the 
247.19  sustainable forest incentive program; and 
247.20     (2) the amount actually paid under section 88.51, 
247.21  subdivisions 1 and 2. 
247.22     Sec. 4.  Minnesota Statutes 2000, section 270A.03, 
247.23  subdivision 7, is amended to read: 
247.24     Subd. 7.  [REFUND.] "Refund" means an individual income tax 
247.25  refund or political contribution refund, pursuant to chapter 
247.26  290, or a property tax credit or refund, pursuant to chapter 
247.27  290A, or a sustainable forest tax payment to a claimant under 
247.28  chapter 290C.  
247.29     For purposes of this chapter, lottery prizes, as set forth 
247.30  in section 349A.08, subdivision 8, and amounts granted to 
247.31  persons by the legislature on the recommendation of the joint 
247.32  senate-house of representatives subcommittee on claims shall be 
247.33  treated as refunds. 
247.34     In the case of a joint property tax refund payable to 
247.35  spouses under chapter 290A, the refund shall be considered as 
247.36  belonging to each spouse in the proportion of the total refund 
248.1   that equals each spouse's proportion of the total income 
248.2   determined under section 290A.03, subdivision 3.  In the case of 
248.3   a joint income tax refund under chapter 289A, the refund shall 
248.4   be considered as belonging to each spouse in the proportion of 
248.5   the total refund that equals each spouse's proportion of the 
248.6   total taxable income determined under section 290.01, 
248.7   subdivision 29.  The commissioner shall remit the entire refund 
248.8   to the claimant agency, which shall, upon the request of the 
248.9   spouse who does not owe the debt, determine the amount of the 
248.10  refund belonging to that spouse and refund the amount to that 
248.11  spouse.  For court fines, fees, and surcharges and court-ordered 
248.12  restitution under section 611A.04, subdivision 2, the notice 
248.13  provided by the commissioner of revenue under section 270A.07, 
248.14  subdivision 2, paragraph (b), serves as the appropriate legal 
248.15  notice to the spouse who does not owe the debt. 
248.16     <b>[EFFECTIVE DATE.]</b> This section is effective for refunds in 
248.17  2003 and thereafter. 
248.18     Sec. 5.  [290C.01] [PURPOSE.] 
248.19     It is the policy of this state to promote sustainable 
248.20  forest resource management on the state's public and private 
248.21  lands.  Recognizing that private forests comprise approximately 
248.22  one-half of the state forest land resources, that healthy and 
248.23  robust forest land provides significant benefits to the state of 
248.24  Minnesota, and that ad valorem property taxes represent a 
248.25  significant annual cost that can discourage long-term forest 
248.26  management investments, this chapter, hereafter referred to as 
248.27  the "Sustainable Forest Incentive Act," is enacted to encourage 
248.28  the state's private forest landowners to make a long-term 
248.29  commitment to sustainable forest management. 
248.30     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
248.31  levied in 2002, payable in 2003, and thereafter. 
248.32     Sec. 6.  [290C.02] [DEFINITIONS.] 
248.33     Subdivision 1.  [APPLICATION.] When used in sections 
248.34  290C.01 to 290C.11, the terms in this section have the meanings 
248.35  given them. 
248.36     Subd. 2.  [APPROVED PLAN WRITERS.] "Approved plan writers" 
249.1   are natural resource professionals who are self-employed, 
249.2   employed by private companies or individuals, nonprofit 
249.3   organizations, local units of government, or public agencies, 
249.4   and who are approved by the commissioner of natural resources.  
249.5   Persons determined to be certified foresters by the Society of 
249.6   American Foresters shall be deemed to meet the standards 
249.7   required under this subdivision.  The commissioner of natural 
249.8   resources shall issue a unique identification number to each 
249.9   approved planner. 
249.10     Subd. 3.  [CLAIMANT.] "Claimant" means a person, as that 
249.11  term is defined in section 290.01, subdivision 2, who owns 
249.12  forest land in Minnesota and files an application authorized by 
249.13  the Sustainable Forest Incentive Act.  No more than one claimant 
249.14  is entitled to a payment under this chapter with respect to any 
249.15  tract, parcel, or piece of land enrolled under this chapter.  
249.16  When enrolled forest land is owned by two or more persons, the 
249.17  owners must determine between them which person may claim the 
249.18  payments provided under sections 290C.01 to 290C.11. 
249.19     Subd. 4.  [COMMISSIONER.] "Commissioner" means the 
249.20  commissioner of revenue. 
249.21     Subd. 5.  [CURRENT USE VALUE.] "Current use value" means 
249.22  the statewide average annual income per acre, multiplied by 90 
249.23  percent and divided by the capitalization rate determined under 
249.24  subdivision 9.  The statewide net annual income shall be a 
249.25  weighted average based on the most recent data as of July 1 of 
249.26  the computation year on stumpage prices and annual tree growth 
249.27  rates and acreage by cover type provided by the department of 
249.28  natural resources and the United States Department of 
249.29  Agriculture Forest Service North Central Research Station. 
249.30     Subd. 6.  [FOREST LAND.] "Forest land" means land 
249.31  containing a minimum of 20 contiguous acres for which the owner 
249.32  has implemented a forest management plan that was prepared or 
249.33  updated within the past ten years by an approved plan writer.  
249.34  For purposes of this subdivision, acres are considered to be 
249.35  contiguous even if they are separated by a road, waterway, 
249.36  railroad track, or other similar intervening property.  At least 
250.1   50 percent of the contiguous acreage must meet the definition of 
250.2   forest land in section 88.01, subdivision 7.  For the purposes 
250.3   of sections 290C.01 to 209C.11, forest land does not include (i) 
250.4   land used for residential or agricultural purposes, (ii) land 
250.5   enrolled in the reinvest in Minnesota program, a state or 
250.6   federal conservation reserve or easement reserve program under 
250.7   sections 103F.501 to 103F.531, the Minnesota agricultural 
250.8   property tax law under section 273.111, or land subject to 
250.9   agricultural land preservation controls or restrictions as 
250.10  defined in section 40A.02 or under the Metropolitan Agricultural 
250.11  Preserves Act under chapter 473H, or (iii) land improved with a 
250.12  structure, pavement, sewer, campsite, or any road, other than a 
250.13  township road, used for purposes not prescribed in the forest 
250.14  management plan. 
250.15     Subd. 7.  [FOREST MANAGEMENT PLAN.] "Forest management plan"
250.16  means a written document providing a framework for site-specific 
250.17  healthy, productive, and sustainable forest resources.  A forest 
250.18  management plan must include at least the following:  (i) 
250.19  owner-specific forest management goals for the property 
250.20  including, when available, goals for individual cover types; 
250.21  (ii) a reliable field inventory of the individual forest cover 
250.22  types, their age, and density; (iii) a description of the soil 
250.23  type and quality; (iv) an aerial photo and/or map of the 
250.24  vegetation and other natural features of the property clearly 
250.25  indicating the boundaries of the property and of the forest 
250.26  land; (v) the proposed future conditions of the property; (vi) 
250.27  prescriptions to meet proposed future conditions of the 
250.28  property; (vii) a recommended timetable for implementing the 
250.29  prescribed activities; and (viii) a legal description of the 
250.30  parcels encompassing the parcels included in the plan.  All 
250.31  management activities prescribed in a plan must be in accordance 
250.32  with the recommended timber harvesting and forest management 
250.33  guidelines.  The commissioner of natural resources shall provide 
250.34  a framework for plan content and updating and revising plans. 
250.35     Subd. 8.  [TIMBER HARVESTING AND FOREST MANAGEMENT 
250.36  GUIDELINES.] "Timber harvesting and forest management guidelines"
251.1   means guidelines developed under section 89A.05 and adopted by 
251.2   the Minnesota forest resources council in 1998. 
251.3      Subd. 9.  [CAPITALIZATION RATE.] By July 1 of each year, 
251.4   the commissioner shall determine a statewide capitalization rate 
251.5   for use under this chapter.  The rate shall be the average 
251.6   annual effective interest rate for St. Paul on new loans under 
251.7   the Farm Credit Bank system calculated under section 
251.8   2032A(e)(7)(A) of the Internal Revenue Code. 
251.9      <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
251.10  levied in 2002, payable in 2003, and thereafter. 
251.11     Sec. 7.  [290C.03] [ELIGIBILITY REQUIREMENTS.] 
251.12     (a) Property may be enrolled in the sustainable forest 
251.13  incentive program under this chapter if all of the following 
251.14  conditions are met: 
251.15     (1) property consists of at least 20 contiguous acres and 
251.16  at least 50 percent of the land must meet the definition of 
251.17  forest land in section 88.01, subdivision 7, during the 
251.18  enrollment; 
251.19     (2) a forest management plan for the property must be 
251.20  prepared by an approved plan writer and implemented during the 
251.21  period in which the land is enrolled; 
251.22     (3) timber harvesting and forest management guidelines must 
251.23  be used in conjunction with any timber harvesting or forest 
251.24  management activities conducted on the land during the period in 
251.25  which the land is enrolled; 
251.26     (4) the property must be enrolled for a minimum of eight 
251.27  years; 
251.28     (5) there are no delinquent property taxes on the property; 
251.29  and 
251.30     (6) claimants enrolling more than 1,920 acres in the 
251.31  sustainable forest incentive program must allow year-round, 
251.32  nonmotorized access to fish and wildlife resources on enrolled 
251.33  land except within one-fourth mile of a permanent dwelling or 
251.34  during periods of high fire hazard as determined by the 
251.35  commissioner of natural resources. 
251.36     (b) Claimants required to allow access under paragraph (a), 
252.1   clause (6), do not by that action: 
252.2      (1) extend any assurance that the land is safe for any 
252.3   purpose; 
252.4      (2) confer upon the person the legal status of an invitee 
252.5   or licensee to whom a duty of care is owed; or 
252.6      (3) assume responsibility for or incur liability for any 
252.7   injury to the person or property caused by an act or omission of 
252.8   the person. 
252.9      <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
252.10  levied in 2002, payable in 2003, and thereafter. 
252.11     Sec. 8.  [290C.04] [APPLICATIONS.] 
252.12     (a) A landowner may apply to enroll forest land for the 
252.13  sustainable forest incentive program under this chapter.  The 
252.14  claimant must complete, sign, and submit an application to the 
252.15  commissioner by September 30 in order for the land to become 
252.16  eligible beginning in the next year.  The application shall be 
252.17  on a form prescribed by the commissioner and must include the 
252.18  information the commissioner deems necessary.  At a minimum, the 
252.19  application must show the following information for the land and 
252.20  the claimant:  (i) the claimant's social security number or 
252.21  state or federal business tax registration number and date of 
252.22  birth, (ii) the claimant's address, (iii) the claimant's 
252.23  signature, (iv) the county's parcel identification numbers for 
252.24  the tax parcels that completely contain the claimant's forest 
252.25  land that is sought to be enrolled, (v) the number of acres 
252.26  eligible for enrollment in the program, (vi) the approved plan 
252.27  writer's signature and identification number, and (vii) proof, 
252.28  in a form specified by the commissioner, that the claimant has 
252.29  executed and acknowledged in the manner required by law for a 
252.30  deed, and recorded, a covenant that the land is not and shall 
252.31  not be developed in a manner inconsistent with the requirements 
252.32  and conditions of this chapter.  The covenant shall state in 
252.33  writing that the covenant is binding on the claimant and the 
252.34  claimant's successor or assignee, and that it runs with the land 
252.35  for a period of not less than eight years.  The commissioner 
252.36  shall specify the form of the covenant and provide copies upon 
253.1   request.  The covenant must include a legal description that 
253.2   encompasses all the forest land that the claimant wishes to 
253.3   enroll under this section or the certificate of title number for 
253.4   that land if it is registered land. 
253.5      (b) In all cases, the commissioner shall notify the 
253.6   claimant within 90 days after receipt of a completed application 
253.7   that either the land has or has not been approved for enrollment.
253.8   The claimant for which the application is denied may, within 60 
253.9   days of receipt of a notice of denial, appeal the denial to the 
253.10  commissioner. 
253.11     (c) Within 45 days after the denial of an application, or 
253.12  within 45 days after the denial of an appeal, the commissioner 
253.13  shall execute and acknowledge a document releasing the land from 
253.14  the covenant required under this chapter.  The document must be 
253.15  mailed to the claimant and is entitled to be recorded. 
253.16     (d) The social security numbers collected from individuals 
253.17  under this section are private data as provided in section 13.49.
253.18  The state or federal business tax registration number and date 
253.19  of birth data collected under this section are also private data 
253.20  but may be shared with county assessors for purposes of tax 
253.21  administration and with county treasurers for purposes of the 
253.22  revenue recapture under chapter 270A. 
253.23     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
253.24  levied in 2002, payable in 2003, and thereafter. 
253.25     Sec. 9.  [290C.05] [ANNUAL CERTIFICATION.] 
253.26     On or before July 1 of each year, beginning with the year 
253.27  after the claimant has received an approved application, the 
253.28  commissioner shall send each claimant enrolled under the 
253.29  sustainable forest incentive program a certification form.  The 
253.30  claimant must sign the certification, attesting that the 
253.31  requirements and conditions for continued enrollment in the 
253.32  program are currently being met, and must return the signed 
253.33  certification form to the commissioner by August 15 of that same 
253.34  year.  Failure to return an annual certification form by the due 
253.35  date shall result in removal of the lands from the provisions of 
253.36  the sustainable forest incentive program, and the imposition of 
254.1   any applicable removal penalty.  The claimant may appeal the 
254.2   removal and any associated penalty according to the procedures 
254.3   and within the time allowed under this chapter. 
254.4      <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
254.5   levied in 2002, payable in 2003, and thereafter. 
254.6      Sec. 10.  [290C.06] [CALCULATION OF AVERAGE ESTIMATED 
254.7   MARKET VALUE; TIMBERLAND.] 
254.8      The commissioner shall annually calculate a statewide 
254.9   average estimated market value per acre for class 2b timberland 
254.10  under section 273.13, subdivision 23, paragraph (b). 
254.11     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
254.12  levied in 2002, payable in 2003, and thereafter. 
254.13     Sec. 11.  [290C.07] [CALCULATION OF INCENTIVE PAYMENT.] 
254.14     An approved claimant under the sustainable forest incentive 
254.15  program is eligible to receive an annual payment.  The payment 
254.16  shall equal the greater of: 
254.17     (1) the difference between the property tax that would be 
254.18  paid on the property using the previous year's statewide average 
254.19  total township tax rate and the class rate for class 2b 
254.20  timberland under section 273.13, subdivision 23, paragraph (b), 
254.21  if the property were valued at (i) the average statewide 
254.22  timberland market value per acre calculated under section 
254.23  290C.06, and (ii) the average statewide timberland current use 
254.24  value per acre calculated under section 290C.02, subdivision 5; 
254.25     (2) two-thirds of the property tax amount determined by 
254.26  using the previous year's statewide average total township tax 
254.27  rate, the estimated market value per acre as calculated in 
254.28  section 290C.06, and the class rate for 2b timberland under 
254.29  section 273.13, subdivision 23, paragraph (b); or 
254.30     (3) $1.50 per acre for each acre enrolled in the 
254.31  sustainable forest incentive program. 
254.32     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
254.33  levied in 2002, payable in 2003, and thereafter. 
254.34     Sec. 12.  [290C.08] [ANNUAL INCENTIVE PAYMENT; 
254.35  APPROPRIATION.] 
254.36     Subdivision 1.  [ANNUAL PAYMENT.] An incentive payment for 
255.1   each acre of enrolled land will be made annually to each 
255.2   claimant in the amount determined under section 290C.07.  The 
255.3   incentive payment shall be paid on or before October 1 each year 
255.4   based on the certifications due August 15 of that year.  
255.5   Interest at the annual rate determined under section 270.75 
255.6   shall be included with any incentive payment not paid by the 
255.7   later of October 1 of the year the certification was due, or 45 
255.8   days after the completed certification was returned or filed if 
255.9   the commissioner accepts a certification filed after August 15 
255.10  of the taxes payable year as the resolution of an appeal. 
255.11     Subd. 2.  [APPROPRIATION.] The amount necessary to make the 
255.12  payments under this section is annually appropriated to the 
255.13  commissioner from the general fund. 
255.14     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
255.15  levied in 2002, payable in 2003, and thereafter. 
255.16     Sec. 13.  [290C.09] [REMOVAL FOR PROPERTY TAX DELINQUENCY.] 
255.17     The commissioner shall immediately remove any property 
255.18  enrolled in the sustainable forest incentive program for which 
255.19  taxes are determined to be delinquent as provided in chapter 279 
255.20  and shall notify the claimant of such action.  Lands terminated 
255.21  from the sustainable forest incentive program under this section 
255.22  are not entitled to any payments provided in this chapter and 
255.23  are subject to removal penalties prescribed in section 290C.11.  
255.24  The claimant has 90 days from the receipt of notice from the 
255.25  commissioner under this section to pay the delinquent taxes.  If 
255.26  the delinquent taxes are paid within this 90-day period, the 
255.27  lands shall be reinstated in the program as if they had not been 
255.28  withdrawn and without the payment of a penalty. 
255.29     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
255.30  levied in 2002, payable in 2003, and thereafter. 
255.31     Sec. 14.  [290C.10] [WITHDRAWAL PROCEDURES.] 
255.32     An approved claimant under the sustainable forest incentive 
255.33  program for a minimum of four years may notify the commissioner 
255.34  of the intent to terminate enrollment.  Within 90 days of 
255.35  receipt of notice to terminate enrollment, the commissioner 
255.36  shall inform the claimant in writing, acknowledging receipt of 
256.1   this notice and indicating the effective date of termination 
256.2   from the sustainable forest incentive program.  Termination of 
256.3   enrollment in the sustainable forest incentive program occurs on 
256.4   January 1 of the fifth calendar year that begins after receipt 
256.5   by the commissioner of the termination notice.  After the 
256.6   commissioner issues an effective date of termination, a claimant 
256.7   wishing to continue the property's enrollment in the sustainable 
256.8   forest incentive program beyond the termination date must apply 
256.9   for enrollment as prescribed in section 290C.04.  A claimant who 
256.10  withdraws a parcel of land from this program may not reenroll 
256.11  the parcel for a period of three years.  Within 45 days after 
256.12  the termination date, the commissioner shall execute and 
256.13  acknowledge a document releasing the land from the covenant 
256.14  required under this chapter.  The document must be mailed to the 
256.15  claimant and is entitled to be recorded.  The commissioner may 
256.16  allow early withdrawal from the Sustainable Forest Incentive Act 
256.17  without penalty in cases of condemnation for a public purpose 
256.18  notwithstanding the provisions of this section. 
256.19     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
256.20  levied in 2002, payable in 2003, and thereafter. 
256.21     Sec. 15.  [290C.11] [PENALTIES FOR REMOVAL.] 
256.22     (a) If the commissioner determines that property enrolled 
256.23  in the sustainable forest incentive program is in violation of 
256.24  the conditions for enrollment as specified in section 290C.03, 
256.25  the commissioner shall notify the claimant of the intent to 
256.26  remove all enrolled land from the sustainable forest incentive 
256.27  program.  The claimant has 90 days to appeal this determination. 
256.28  The appeal must be made in writing to the commissioner, who 
256.29  shall, within 60 days, notify the claimant as to the outcome of 
256.30  the appeal.  Within 60 days after the commissioner denies an 
256.31  appeal, or within 120 days after the commissioner received a 
256.32  written appeal if the commissioner has not made a determination 
256.33  in that time, the owner may appeal to tax court under chapter 
256.34  271 as if the appeal is from an order of the commissioner. 
256.35     (b) If the commissioner determines the property is to be 
256.36  removed from the sustainable forest incentive program, the 
257.1   claimant is liable for payment to the commissioner in the amount 
257.2   equal to the payments received under this chapter for the 
257.3   previous four-year period, plus interest.  The claimant has 90 
257.4   days to satisfy the payment for removal of land from the 
257.5   sustainable forest incentive program under this section.  If the 
257.6   penalty is not paid within the 90-day period under paragraph 
257.7   (a), the commissioner shall certify the amount to the county 
257.8   auditor for collection as a part of the general ad valorem real 
257.9   property taxes on the land in the following taxes payable year.  
257.10     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
257.11  levied in 2002, payable in 2003, and thereafter. 
257.12     Sec. 16.  [REPEALER.] 
257.13     Minnesota Statutes 2000, sections 270.31; 270.32; 270.33; 
257.14  270.34; 270.35; 270.36; 270.37; 270.38; and 270.39, are repealed.
257.15     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
257.16  levied in 2002, payable in 2003, and thereafter. 
257.17                             ARTICLE 8 
257.18                    CIVIL AND CRIMINAL PENALTIES 
257.19     Section 1.  Minnesota Statutes 2000, section 289A.55, 
257.20  subdivision 9, is amended to read: 
257.21     Subd. 9.  [INTEREST ON PENALTIES.] (a) A penalty imposed 
257.22  under section 289A.60, subdivision 1, 2, 3, 2a, 4, 5, 6, or 21 
257.23  bears interest from the date the return or payment was required 
257.24  to be filed or paid, including any extensions, to the date of 
257.25  payment of the penalty. 
257.26     (b) A penalty not included in paragraph (a) bears interest 
257.27  only if it is not paid within 60 days from the date of notice.  
257.28  In that case interest is imposed from the date of notice to the 
257.29  date of payment. 
257.30     <b>[EFFECTIVE DATE.]</b> This section is effective for tax years 
257.31  beginning after December 31, 2000, and for estate tax returns 
257.32  due after January 1, 2002. 
257.33     Sec. 2.  Minnesota Statutes 2000, section 289A.60, 
257.34  subdivision 1, is amended to read: 
257.35     Subdivision 1.  [PENALTY FOR FAILURE TO PAY TAX.] (a) If a 
257.36  tax other than a withholding or sales or use tax is not paid 
258.1   within the time specified for payment, a penalty must be added 
258.2   to the amount required to be shown as tax.  The penalty is three 
258.3   percent of the tax not paid on or before the date specified for 
258.4   payment of the tax if the failure is for not more than 30 days, 
258.5   with an additional penalty of three percent of the amount of tax 
258.6   remaining unpaid during each additional 30 days or fraction of 
258.7   30 days during which the failure continues, not exceeding 24 
258.8   percent in the aggregate.  If a corporate franchise, fiduciary 
258.9   income, mining company, estate, partnership, S corporation, or 
258.10  nonresident entertainer tax is not paid within the time 
258.11  specified for payment, a penalty of six percent is added to the 
258.12  unpaid tax, except that if a corporation or mining company meets 
258.13  the requirements of section 289A.19, subdivision 2, the penalty 
258.14  is not imposed.  
258.15     (b) For the taxes listed in paragraph (a), in addition to 
258.16  the penalty in that paragraph, whether imposed or not, if a 
258.17  return or amended return is filed after the due date, without 
258.18  regard to extensions, and any tax reported as remaining due is 
258.19  not remitted with the return or amended return, a penalty of 
258.20  five percent of the tax not paid is added to the tax.  If the 
258.21  commissioner issues an order assessing additional tax for a tax 
258.22  listed in paragraph (a), and the tax is not paid within 60 days 
258.23  after the mailing of the order or, if appealed, within 60 days 
258.24  after final resolution of the appeal, a penalty of five percent 
258.25  of the unpaid tax is added to the tax. 
258.26     (c) If an individual files a state individual income tax 
258.27  return and pays all of the state individual income tax with the 
258.28  filing of a return within six months of the date the return is 
258.29  due and the amount paid by the due date of the return is at 
258.30  least 90 percent of the amount of tax due, as shown on the 
258.31  return, the individual is presumed to have reasonable cause for 
258.32  the late payment.  If an individual income tax is not paid 
258.33  within the time specified for payment, a penalty of four percent 
258.34  is added to the unpaid tax.  There is a presumption of 
258.35  reasonable cause for the late payment if the individual:  (i) 
258.36  pays by the due date of the return at least 90 percent of the 
259.1   amount of tax, after credits other than withholding and 
259.2   estimated payments, shown owing on the return; (ii) files the 
259.3   return within six months after the due date; and (iii) pays the 
259.4   remaining balance of the reported tax when the return is filed. 
259.5      (d) If the commissioner issues an order assessing 
259.6   additional individual income tax, and the tax is not paid within 
259.7   60 days after the mailing of the order or, if appealed, within 
259.8   60 days after final resolution of the appeal, a penalty of four 
259.9   percent of the unpaid tax is added to the tax.  
259.10     (b) (e) If a withholding or sales or use tax is not paid 
259.11  within the time specified for payment, a penalty must be added 
259.12  to the amount required to be shown as tax.  The penalty is five 
259.13  percent of the tax not paid on or before the date specified for 
259.14  payment of the tax if the failure is for not more than 30 days, 
259.15  with an additional penalty of five percent of the amount of tax 
259.16  remaining unpaid during each additional 30 days or fraction of 
259.17  30 days during which the failure continues, not exceeding 15 
259.18  percent in the aggregate. 
259.19     <b>[EFFECTIVE DATE.]</b> This section is effective for tax years 
259.20  beginning after December 31, 2000, and for estate tax returns 
259.21  due after January 1, 2002. 
259.22     Sec. 3.  Minnesota Statutes 2000, section 289A.60, 
259.23  subdivision 2, is amended to read: 
259.24     Subd. 2.  [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If 
259.25  a taxpayer fails to make and file a return other than an income 
259.26  tax return of an individual, a withholding return, or sales or 
259.27  use tax return, within the time prescribed or an extension, a 
259.28  penalty is added to the tax.  The penalty is three percent of 
259.29  the amount of tax not paid on or before the date prescribed for 
259.30  payment of the tax including any extensions if the failure is 
259.31  for not more than 30 days, with an additional five percent of 
259.32  the amount of tax remaining unpaid during each additional 30 
259.33  days or fraction of 30 days, during which the failure continues, 
259.34  not exceeding 23 percent in the aggregate. 
259.35     If a taxpayer fails to file an individual income tax return 
259.36  within six months after the date prescribed for filing of the 
260.1   return, a penalty of ten percent of the amount of tax not paid 
260.2   by the end of that six-month period is added to the tax.  
260.3      If a taxpayer fails to file a withholding or sales or use 
260.4   tax return within the time prescribed, including an extension, a 
260.5   penalty of five percent of the amount of tax not timely paid by 
260.6   the end of that period is added to the tax.  
260.7      <b>[EFFECTIVE DATE.]</b> This section is effective for tax years 
260.8   beginning after December 31, 2000, and for estate tax returns 
260.9   due after January 1, 2002. 
260.10     Sec. 4.  Minnesota Statutes 2000, section 289A.60, is 
260.11  amended by adding a subdivision to read: 
260.12     Subd. 2a.  [PENALTIES FOR EXTENDED DELINQUENCY.] (a) If an 
260.13  individual income tax is not paid within 180 days after the date 
260.14  of filing of a return or, in the case of taxes assessed by the 
260.15  commissioner, within 180 days after the assessment date or, if 
260.16  appealed, within 180 days after final resolution of the appeal, 
260.17  an extended delinquency penalty of five percent of the tax 
260.18  remaining unpaid is added to the amount due.  
260.19     (b) If a corporate franchise, fiduciary income, mining 
260.20  company, estate, partnership, S corporation, or nonresident 
260.21  entertainer tax return is not filed within 30 days after written 
260.22  demand for the filing of a delinquent return, an extended 
260.23  delinquency penalty of five percent of the tax not paid prior to 
260.24  the demand is added to the tax, or in the case of an individual 
260.25  income tax return, a minimum penalty of $100 or the five percent 
260.26  penalty is imposed, whichever amount is greater. 
260.27     <b>[EFFECTIVE DATE.]</b> This section is effective for tax years 
260.28  beginning after December 31, 2000, and for estate tax returns 
260.29  due after January 1, 2002. 
260.30     Sec. 5.  Minnesota Statutes 2000, section 289A.60, 
260.31  subdivision 7, is amended to read: 
260.32     Subd. 7.  [PENALTY FOR FRIVOLOUS RETURN.] If an individual 
260.33  a taxpayer files what purports to be a tax return required by 
260.34  chapter 290 or a claim for refund but which does not contain 
260.35  information on which the substantial correctness of 
260.36  the assessment purported return or claim for refund may be 
261.1   judged or contains information that on its face shows that the 
261.2   assessment purported return or claim for refund is substantially 
261.3   incorrect and the conduct is due to a position that is frivolous 
261.4   or a desire that appears on the purported return or claim for 
261.5   refund to delay or impede the administration of Minnesota tax 
261.6   laws, then the individual shall pay a penalty of $500.  In a 
261.7   proceeding involving the issue of whether or not a person is 
261.8   liable for this penalty, the burden of proof is on the 
261.9   commissioner.  
261.10     <b>[EFFECTIVE DATE.]</b> This section is effective for returns or 
261.11  claims for refunds filed on or after the day following final 
261.12  enactment. 
261.13     Sec. 6.  Minnesota Statutes 2000, section 297F.20, 
261.14  subdivision 3, is amended to read: 
261.15     Subd. 3.  [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A 
261.16  person who files with the commissioner a return, report, or 
261.17  other document, or who maintains or provides invoices subject to 
261.18  review by the commissioner under this chapter, known by the 
261.19  person to be fraudulent or false concerning a material matter, 
261.20  is guilty of a felony. 
261.21     (b) A person who knowingly aids or assists in, or advises 
261.22  in the preparation or presentation of a return, report, invoice, 
261.23  or other document that is fraudulent or false concerning a 
261.24  material matter, whether or not the falsity or fraud is 
261.25  committed with the knowledge or consent of the person authorized 
261.26  or required to present the return, report, invoice, or other 
261.27  document, is guilty of a felony. 
261.28     <b>[EFFECTIVE DATE.]</b> This section is effective for crimes 
261.29  occurring on or after July 1, 2001. 
261.30     Sec. 7.  [APPROPRIATION.] 
261.31     $545,000 in fiscal year 2002 and $25,000 in fiscal year 
261.32  2003 is appropriated from the general fund to the commissioner 
261.33  of revenue to implement sections 2 to 4.  $520,000 of the 
261.34  appropriation in fiscal year 2002 is for a one-time expenditure 
261.35  related to system programming costs.  This appropriation is 
261.36  available for expenditure until June 30, 2003. 
262.1      <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2001. 
262.2      Sec. 8.  [REPEALER.] 
262.3      Minnesota Statutes 2000, section 289A.60, subdivision 3, is 
262.4   repealed. 
262.5      <b>[EFFECTIVE DATE.]</b> This section is effective for tax years 
262.6   beginning after December 31, 2000, and for estate tax returns 
262.7   due after January 1, 2002. 
262.8                              ARTICLE 9 
262.9                        SEIZURES OF CONTRABAND 
262.10     Section 1.  Minnesota Statutes 2000, section 296A.24, 
262.11  subdivision 1, is amended to read: 
262.12     Subdivision 1.  [SEIZURE.] The commissioner or authorized 
262.13  agents may seize gasoline or special fuel being transported for 
262.14  delivery in violation of section 296A.03, subdivision 1, and any 
262.15  vehicle or other method of conveyance used for transporting the 
262.16  gasoline or special fuel.  Any untaxed motor vehicle fuel that 
262.17  is received by a person other than a licensee is subject to 
262.18  seizure along with the vehicle or other means of transportation 
262.19  used to transport the motor vehicle fuel.  Any motor vehicle 
262.20  fuel, along with the transporting vehicle, brought into the 
262.21  state of Minnesota by a transporter for use, distribution, 
262.22  storage, or sale that is not supported by a manifest, bill of 
262.23  lading, or invoice, reflecting the licensed distributor 
262.24  responsible for the tax and/or fees is subject to seizure by the 
262.25  Minnesota department of revenue.  Property seized under this 
262.26  subdivision is subject to forfeiture as provided in subdivisions 
262.27  subdivision 2 and 3. 
262.28     <b>[EFFECTIVE DATE.]</b> This section is effective for seizures 
262.29  made on or after July 1, 2001. 
262.30     Sec. 2.  Minnesota Statutes 2000, section 296A.24, 
262.31  subdivision 2, is amended to read: 
262.32     Subd. 2.  [DISPOSITION OF SEIZED PROPERTY.] (a) Within ten 
262.33  days after the seizure of gasoline or special fuel, the person 
262.34  making the seizure shall deliver serve by certified mail an 
262.35  inventory of the vehicle or property seized to on the person 
262.36  from whom the seizure was made, if known, and on any person 
263.1   known or believed to have any right, title, interest, or lien on 
263.2   the vehicle or property, at the last known address, and file a 
263.3   copy with the office of the commissioner.  The notice must 
263.4   include an explanation of the right to demand a judicial 
263.5   forfeiture determination. 
263.6      (b) Within ten 60 days after the date of service of the 
263.7   inventory, which is the date of mailing, the person from whom 
263.8   the vehicle or property was seized or any person claiming an 
263.9   interest in the property it may file with the commissioner a 
263.10  demand for a judicial determination of whether the vehicle or 
263.11  property was lawfully subject to seizure and forfeiture.  The 
263.12  commissioner, within 60 days of demand for a judicial 
263.13  determination, shall begin an action in the district court of 
263.14  the county where the seizure was made to determine the issue of 
263.15  forfeiture. 
263.16     (b) The action must be brought in the name of the state and 
263.17  prosecuted by the county attorney or by the attorney 
263.18  general.  The demand must be in the form of a civil complaint 
263.19  and must be filed with the court administrator in the county in 
263.20  which the seizure occurred, together with proof of service of a 
263.21  copy of the complaint on the commissioner of revenue, and the 
263.22  standard filing fee for civil actions unless the petitioner has 
263.23  the right to sue in forma pauperis under section 563.01.  If the 
263.24  value of the seized property or vehicle is $7,500 or less, the 
263.25  claimant may file an action in conciliation court for its 
263.26  recovery.  If the value of the seized property or vehicle is 
263.27  less than $500, the claimant does not have to pay the 
263.28  conciliation court filing fee. 
263.29     (c) The complaint must be captioned in the name of the 
263.30  claimant as plaintiff and the seized property or vehicle as 
263.31  defendant, and must state with specificity the grounds on which 
263.32  the claimant alleges the property or vehicle was improperly 
263.33  seized and the plaintiff's interest in the property or vehicle 
263.34  seized.  No responsive pleading is required of the commissioner 
263.35  and no court fees may be charged for the commissioner's 
263.36  appearance in the matter.  The proceedings are governed by the 
264.1   Rules of Civil Procedure.  Notwithstanding any law to the 
264.2   contrary, an action for the return of property or a vehicle 
264.3   seized under this section may not be maintained by or on behalf 
264.4   of any person who has been served with an inventory unless the 
264.5   person has complied with this subdivision.  The court shall hear 
264.6   the action without a jury and shall try and determine the issues 
264.7   of fact and law involved. 
264.8      (c) (d) When a judgment of forfeiture is entered, the 
264.9   commissioner may, unless the judgment is stayed pending an 
264.10  appeal, either: 
264.11     (1) cause the forfeited property gasoline or special fuel 
264.12  to be destroyed; or 
264.13     (2) cause it the forfeited property in clause (1) or 
264.14  vehicle to be sold at public auction as provided by 
264.15  law.  Proceeds of a sale, after deducting the expense of keeping 
264.16  the gasoline or special fuel and costs of the sale, must be paid 
264.17  into the state treasury.  The commissioner shall reimburse 
264.18  designees for costs incurred.  After deducting the expense of 
264.19  keeping the property and vehicle and the costs of the sale, the 
264.20  commissioner shall pay from the funds collected all liens 
264.21  according to their priority, which are established as being bona 
264.22  fide and as existing without the lienor having any notice or 
264.23  knowledge that the property or vehicle was being used or was 
264.24  intended to be used for or in connection with any violation, and 
264.25  shall pay the balance of the proceeds into the general fund.  
264.26     (d) If a demand for judicial determination is made and no 
264.27  action is commenced as provided in this subdivision, the 
264.28  property must be released by the commissioner and redelivered to 
264.29  the person entitled to it.  (e) If no demand for judicial 
264.30  determination is made, the property or vehicle seized must be 
264.31  considered forfeited to the state by operation of law and may be 
264.32  disposed of by the commissioner as provided where there has been 
264.33  a judgment of forfeiture.  When the commissioner is satisfied 
264.34  that a person from whom property is seized under this chapter 
264.35  was acting in good faith and without intent to evade the tax, 
264.36  the commissioner shall release the property seized, without 
265.1   further legal proceedings. 
265.2      <b>[EFFECTIVE DATE.]</b> This section is effective for seizures 
265.3   made on or after July 1, 2001. 
265.4      Sec. 3.  Minnesota Statutes 2000, section 297A.91, is 
265.5   amended to read: 
265.6      297A.91 [SEIZURE; COURT REVIEW.] 
265.7      Subdivision 1.  [SEIZURE OF PROPERTY USED IN ILLEGAL 
265.8   TRANSPORT.] (a) If the retailer does not have a sales or use tax 
265.9   permit and has been engaging in transporting personal property 
265.10  into the state without payment of the tax, the commissioner of 
265.11  revenue or the commissioner's agents may seize in the name of 
265.12  the state any truck, automobile, or means of transportation not 
265.13  owned or operated by a common carrier, used in the illegal 
265.14  importation and transportation of any tangible personal property 
265.15  by a retailer or the retailer's agent or employee.  The 
265.16  commissioner may demand the forfeiture and sale of the truck, 
265.17  automobile, or other means of transportation together with the 
265.18  property being transported illegally, unless the owner 
265.19  establishes to the satisfaction of the commissioner or the court 
265.20  that the owner had no notice or knowledge or reason to believe 
265.21  that the vehicle was used or intended to be used in any such 
265.22  violation. 
265.23     (b) Within two ten days after the seizure, the person 
265.24  making the seizure shall deliver serve by certified mail an 
265.25  inventory of the vehicle and property seized to on the person 
265.26  from whom the seizure was made, if known, and to on any person 
265.27  known or believed to have any right, title, interest, or lien on 
265.28  the vehicle or property, at the last known address.  The person 
265.29  making the seizure shall also file a copy of the inventory with 
265.30  the commissioner.  The notice must include an explanation of the 
265.31  right to demand a judicial forfeiture determination.  
265.32     Subd. 2.  [COURT REVIEW OF FORFEITURE.] (a) Within ten 60 
265.33  days after the date of service of the inventory, which is the 
265.34  date of mailing, the person from whom the vehicle and property 
265.35  were seized or any person claiming an interest in the vehicle or 
265.36  property may file with the commissioner a demand for a judicial 
266.1   determination of the question of whether the vehicle or property 
266.2   was lawfully subject to seizure and forfeiture.  The 
266.3   commissioner, within 30 days, shall institute an action in the 
266.4   district court of the county where the seizure was made to 
266.5   determine the issue of forfeiture. 
266.6      (b) The action must be brought in the name of the state and 
266.7   prosecuted by the county attorney or the attorney general.  The 
266.8   demand must be in the form of a civil complaint and must be 
266.9   filed with the court administrator in the county in which the 
266.10  seizure occurred, together with proof of service or a copy of 
266.11  the complaint on the commissioner of revenue, and the standard 
266.12  filing fee for civil actions unless the petitioner has the right 
266.13  to sue in forma pauperis under section 563.01.  If the value of 
266.14  the seized property or vehicle is $7,500 or less, the claimant 
266.15  may file an action in conciliation court for its recovery.  If 
266.16  the value of the seized property or vehicle is less than $500, 
266.17  the claimant does not have to pay the conciliation court filing 
266.18  fee.  
266.19     (c) The complaint must be captioned in the name of the 
266.20  claimant as plaintiff and the seized property or vehicle as 
266.21  defendant, and must state with specificity the grounds on which 
266.22  the claimant alleges the property or vehicle was improperly 
266.23  seized and the plaintiff's interest in the property or vehicle 
266.24  seized.  No responsive pleading is required of the commissioner, 
266.25  and no court fees may be charged for the commissioner's 
266.26  appearance in the matter.  The proceedings are governed by the 
266.27  Rules of Civil Procedure.  Notwithstanding any law to the 
266.28  contrary, an action for the return of property or a vehicle 
266.29  seized under this subdivision may not be maintained by or on 
266.30  behalf of any person who has been served with an inventory 
266.31  unless the person has complied with this subdivision.  The court 
266.32  shall hear the action without a jury and shall determine the 
266.33  issues of fact and law involved.  If a judgment of forfeiture is 
266.34  entered and is not stayed pending an appeal, the commissioner 
266.35  may have the forfeited vehicle and property sold at public 
266.36  auction as provided by law.  
267.1      Subd. 3.  [TREATMENT OF SEIZED PROPERTY.] If a demand for 
267.2   judicial determination is made and no action is commenced as 
267.3   provided in this subdivision, the vehicle and property must be 
267.4   released by the commissioner and redelivered to the person 
267.5   entitled to it.  If no demand for judicial determination is 
267.6   made, the vehicle and property seized are considered forfeited 
267.7   to the state by operation of law and may be disposed of by the 
267.8   commissioner as if there were a judgment of forfeiture.  The 
267.9   forfeiture and sale of the automobile, truck, or other means of 
267.10  transportation, and of the property being transported illegally 
267.11  in it, are a penalty for the violation of this chapter.  After 
267.12  deducting the expense of keeping the vehicle and property, the 
267.13  fee for seizure, and the costs of the sale, the commissioner 
267.14  shall pay liens from the funds collected.  The commissioner 
267.15  shall pay all liens, according to their priority, that are 
267.16  established at the hearing as being bona fide and as existing 
267.17  without the lienor having any notice or knowledge that the 
267.18  vehicle or property was being used or was intended to be used 
267.19  for or in connection with any such violation as specified in the 
267.20  order of the court.  The commissioner shall pay the balance of 
267.21  the proceeds into the state treasury to be credited to the 
267.22  general fund.  The state is not liable for any liens in excess 
267.23  of the proceeds from the sale after allowable deductions.  A 
267.24  sale under this section frees the vehicle and property sold from 
267.25  all liens.  The order of the district court may be appealed as 
267.26  in other civil cases.  
267.27     <b>[EFFECTIVE DATE.]</b> This section is effective for seizures 
267.28  made on or after July 1, 2001. 
267.29     Sec. 4.  Minnesota Statutes 2000, section 297E.16, 
267.30  subdivision 1, is amended to read: 
267.31     Subdivision 1.  [SEIZURE.] Contraband may be seized by the 
267.32  commissioner or by any sheriff or other police officer, 
267.33  hereinafter referred to as the "seizing authority," with or 
267.34  without process, and is subject to forfeiture as provided in 
267.35  subdivisions subdivision 2 and 3.  
267.36     <b>[EFFECTIVE DATE.]</b> This section is effective for seizures 
268.1   made on or after July 1, 2001. 
268.2      Sec. 5.  Minnesota Statutes 2000, section 297E.16, 
268.3   subdivision 2, is amended to read: 
268.4      Subd. 2.  [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 
268.5   DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the 
268.6   seizure of alleged contraband described in section 349.2125, 
268.7   subdivision 1, the person making the seizure shall make 
268.8   available serve by certified mail an inventory of the property 
268.9   seized to on the person from whom the property was seized, if 
268.10  known, and on any person known or believed to have any right, 
268.11  title, interest, or lien in the property, at the last known 
268.12  address, and file a copy with the commissioner or the director 
268.13  of alcohol and gambling enforcement.  The notice must include an 
268.14  explanation of the right to demand a judicial forfeiture 
268.15  determination. 
268.16     (b) Within ten 60 days after the date of service of the 
268.17  inventory, which is the date of mailing, the person from whom 
268.18  the property was seized or any person claiming an interest in 
268.19  the property may file with the seizing authority a demand for 
268.20  judicial determination of whether the property was lawfully 
268.21  subject to seizure and forfeiture.  Within 60 days after the 
268.22  date of filing of the demand, the seizing authority must bring 
268.23  an action in the district court of the county where seizure was 
268.24  made to determine the issue of forfeiture.  The action must be 
268.25  brought in the name of the state and be prosecuted by the county 
268.26  attorney or by the attorney general.  The demand must be in the 
268.27  form of a civil complaint and must be filed with the court 
268.28  administrator in the county in which the seizure occurred, 
268.29  together with proof of service of a copy of the complaint on the 
268.30  commissioner of revenue or the director of alcohol and gambling 
268.31  enforcement, and the standard filing fee for civil actions 
268.32  unless the petitioner has the right to sue in forma pauperis 
268.33  under section 563.01.  If the value of the seized property is 
268.34  $7,500 or less, the claimant may file an action in conciliation 
268.35  court for recovery of the property.  If the value of the seized 
268.36  property is less than $500, the claimant does not have to pay 
269.1   the conciliation court filing fee.  
269.2      (c) The complaint must be captioned in the name of the 
269.3   claimant as plaintiff and the seized property as defendant, and 
269.4   must state with specificity the grounds on which the claimant 
269.5   alleges the property was improperly seized and the plaintiff's 
269.6   interest in the property seized.  No responsive pleading is 
269.7   required of the commissioner or director, and no court fees may 
269.8   be charged for the commissioner's or director's appearance in 
269.9   the matter.  The proceedings are governed by the Rules of Civil 
269.10  Procedure.  Notwithstanding any law to the contrary, an action 
269.11  for the return of property seized under this section may not be 
269.12  maintained by or on behalf of any person who has been served 
269.13  with an inventory unless the person has complied with this 
269.14  subdivision.  The court shall hear the action without a jury and 
269.15  determine the issues of fact and law involved.  
269.16     (d) If a judgment of forfeiture is entered, the seizing 
269.17  authority may, unless the judgment is stayed pending an appeal, 
269.18  either (1) cause the forfeited property, other than a vehicle, 
269.19  to be destroyed; or (2) cause it to be sold at a public auction 
269.20  as provided by law.  The person making a sale, after deducting 
269.21  the expense of keeping the property, the fee for seizure, and 
269.22  the costs of the sale, shall pay all liens according to their 
269.23  priority, which are established as being bona fide and as 
269.24  existing without the lienor having any notice or knowledge that 
269.25  the property was being used or was intended to be used for or in 
269.26  connection with the violation.  The balance of the proceeds must 
269.27  be paid 70 percent to the seizing authority for deposit as a 
269.28  supplement to its operating fund or similar fund for official 
269.29  use, and 20 percent to the county attorney or other prosecuting 
269.30  agency that handled the court proceeding, if there is one, for 
269.31  deposit as a supplement to its operating fund or similar fund 
269.32  for prosecutorial purposes.  The remaining ten percent of the 
269.33  proceeds must be forwarded within 60 days after resolution of 
269.34  the forfeiture to the department of human services to fund 
269.35  programs for the treatment of compulsive gamblers.  If there is 
269.36  no prosecuting authority involved in the forfeiture, the 20 
270.1   percent of the proceeds otherwise designated for the prosecuting 
270.2   authority must be deposited into the general fund.  
270.3      If demand for judicial determination is made and no action 
270.4   is commenced by the seizing authority as provided in this 
270.5   subdivision, the property must be released by the seizing 
270.6   authority and delivered to the person entitled to it.  (e) If no 
270.7   demand for judicial determination is made, the property seized 
270.8   is considered forfeited to the seizing authority by operation of 
270.9   law and may be disposed of by the seizing authority as provided 
270.10  where there has been a judgment of forfeiture.  When the seizing 
270.11  authority is satisfied that a person from whom property is 
270.12  seized was acting in good faith and without intent to evade the 
270.13  tax imposed by section 297E.02, the seizing authority shall 
270.14  release the property seized without further legal proceedings. 
270.15     <b>[EFFECTIVE DATE.]</b> This section is effective for seizures 
270.16  made on or after July 1, 2001. 
270.17     Sec. 6.  Minnesota Statutes 2000, section 297F.21, 
270.18  subdivision 1, is amended to read: 
270.19     Subdivision 1.  [CONTRABAND DEFINED.] The following are 
270.20  declared to be contraband and therefore subject to civil and 
270.21  criminal penalties under this chapter: 
270.22     (a) Cigarette packages which do not have stamps affixed to 
270.23  them as provided in this chapter, including but not limited to 
270.24  (i) packages with illegible stamps and packages with stamps that 
270.25  are not complete or whole even if the stamps are legible, and 
270.26  (ii) all devices for the vending of cigarettes in which packages 
270.27  as defined in item (i) are found, including all contents 
270.28  contained within the devices. 
270.29     (b) A device for the vending of cigarettes and all packages 
270.30  of cigarettes, where the device does not afford at least partial 
270.31  visibility of contents.  Where any package exposed to view does 
270.32  not carry the stamp required by this chapter, it shall be 
270.33  presumed that all packages contained in the device are unstamped 
270.34  and contraband. 
270.35     (c) A device for the vending of cigarettes to which the 
270.36  commissioner or authorized agents have been denied access for 
271.1   the inspection of contents.  In lieu of seizure, the 
271.2   commissioner or an agent may seal the device to prevent its use 
271.3   until inspection of contents is permitted. 
271.4      (d) A device for the vending of cigarettes which does not 
271.5   carry the name and address of the owner, plainly marked and 
271.6   visible from the front of the machine. 
271.7      (e) A device including, but not limited to, motor vehicles, 
271.8   trailers, snowmobiles, airplanes, and boats used with the 
271.9   knowledge of the owner or of a person operating with the consent 
271.10  of the owner for the storage or transportation of more than 
271.11  5,000 cigarettes which are contraband under this subdivision.  
271.12  When cigarettes are being transported in the course of 
271.13  interstate commerce, or are in movement from either a public 
271.14  warehouse to a distributor upon orders from a manufacturer or 
271.15  distributor, or from one distributor to another, the cigarettes 
271.16  are not contraband, notwithstanding the provisions of clause (a).
271.17     (f) A device including, but not limited to, motor vehicles, 
271.18  trailers, snowmobiles, airplanes, and boats used with the 
271.19  knowledge of the owner, or of a person operating with the 
271.20  consent of the owner, for the storage or transportation of 
271.21  untaxed tobacco products intended for sale in Minnesota other 
271.22  than those in the possession of a licensed distributor on or 
271.23  before the due date for payment of the tax under section 
271.24  297F.09, subdivision 2. 
271.25     (g) Cigarette packages or tobacco products obtained from an 
271.26  unlicensed seller. 
271.27     (g) (h) Cigarette packages offered for sale or held as 
271.28  inventory in violation of section 297F.20, subdivision 7. 
271.29     (h) (i) Tobacco products on which the tax has not been paid 
271.30  by a licensed distributor. 
271.31     (i) (j) Any cigarette packages or tobacco products offered 
271.32  for sale or held as inventory for which there is not an invoice 
271.33  from a licensed seller as required under section 297F.13, 
271.34  subdivision 4.  
271.35     (j) (k) Cigarette packages which have been imported into 
271.36  the United States in violation of United States Code, title 26, 
272.1   section 5754.  All cigarettes held in violation of that section 
272.2   shall be presumed to have entered the United States after 
272.3   December 31, 1999, in the absence of proof to the contrary. 
272.4      <b>[EFFECTIVE DATE.]</b> This section is effective for seizures 
272.5   made on or after July 1, 2001. 
272.6      Sec. 7.  Minnesota Statutes 2000, section 297F.21, 
272.7   subdivision 2, is amended to read: 
272.8      Subd. 2.  [SEIZURE.] Cigarettes, tobacco products, or other 
272.9   property made contraband by subdivision 1 may be seized by the 
272.10  commissioner or authorized agents or by any sheriff or other 
272.11  police officer, with or without process, and are subject to 
272.12  forfeiture as provided in subdivisions subdivision 3 and 4. 
272.13     <b>[EFFECTIVE DATE.]</b> This section is effective for seizures 
272.14  made on or after July 1, 2001. 
272.15     Sec. 8.  Minnesota Statutes 2000, section 297F.21, 
272.16  subdivision 3, is amended to read: 
272.17     Subd. 3.  [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 
272.18  DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the 
272.19  seizure of any alleged contraband, the person making the seizure 
272.20  shall make available serve by certified mail an inventory of the 
272.21  property seized to on the person from whom the seizure was made, 
272.22  if known, and on any person known or believed to have any right, 
272.23  title, interest, or lien in the property, at the last known 
272.24  address, and file a copy with the commissioner.  The notice must 
272.25  include an explanation of the right to demand a judicial 
272.26  forfeiture determination. 
272.27     (b) Within ten 60 days after the date of service of the 
272.28  inventory, which is the date of mailing, the person from whom 
272.29  the property was seized or any person claiming an interest in 
272.30  the property may file with the commissioner a demand for a 
272.31  judicial determination of the question as to whether the 
272.32  property was lawfully subject to seizure and forfeiture.  The 
272.33  commissioner, within 60 days, shall institute an action in the 
272.34  district court of the county where the seizure was made to 
272.35  determine the issue of forfeiture.  The demand must be in the 
272.36  form of a civil complaint and must be filed with the court 
273.1   administrator in the county in which the seizure occurred, 
273.2   together with proof of service of a copy of the complaint on the 
273.3   commissioner of revenue, and the standard filing fee for civil 
273.4   actions unless the petitioner has the right to sue in forma 
273.5   pauperis under section 563.01.  If the value of the seized 
273.6   property is $7,500 or less, the claimant may file an action in 
273.7   conciliation court for recovery of the property.  If the value 
273.8   of the seized property is less than $500, the claimant does not 
273.9   have to pay the conciliation court filing fee. 
273.10     (c) The complaint must be captioned in the name of the 
273.11  claimant as plaintiff and the seized property as defendant, and 
273.12  must state with specificity the grounds on which the claimant 
273.13  alleges the property was improperly seized and the plaintiff's 
273.14  interest in the property seized.  No responsive pleading is 
273.15  required of the commissioner, and no court fees may be charged 
273.16  for the commissioner's appearance in the matter.  The 
273.17  proceedings are governed by the Rules of Civil Procedure.  
273.18  Notwithstanding any law to the contrary, an action for the 
273.19  return of property seized under this section may not be 
273.20  maintained by or on behalf of any person who has been served 
273.21  with an inventory unless the person has complied with this 
273.22  subdivision.  The court shall decide whether the alleged 
273.23  contraband is contraband, as defined in subdivision 1. 
273.24     (b) The action must be brought in the name of the state and 
273.25  must be prosecuted by the county attorney or by the attorney 
273.26  general.  The court shall hear the action without a jury and 
273.27  shall try and determine the issues of fact and law involved. 
273.28     (c) (d) When a judgment of forfeiture is entered, the 
273.29  commissioner may, unless the judgment is stayed pending an 
273.30  appeal, either: 
273.31     (1) deliver the forfeited property cigarette packages or 
273.32  tobacco products to the commissioner of human services for use 
273.33  by patients in state institutions; 
273.34     (2) cause it the property in clause (1) to be destroyed; or 
273.35     (3) cause it the forfeited property to be sold at public 
273.36  auction as provided by law.  
274.1   The person making a sale, after deducting the expense of keeping 
274.2   the property, the fee for seizure, and the costs of the sale, 
274.3   shall pay all liens according to their priority, which are 
274.4   established as being bona fide and as existing without the 
274.5   lienor having any notice or knowledge that the property was 
274.6   being used or was intended to be used for or in connection with 
274.7   the violation.  The balance of the proceeds must be paid 75 
274.8   percent to the department of revenue for deposit as a supplement 
274.9   to its operating fund or similar fund for official use, and 25 
274.10  percent to the county attorney or other prosecuting agency that 
274.11  handled the court proceeding, if there is one, for deposit as a 
274.12  supplement to its operating fund or similar fund for 
274.13  prosecutorial purposes.  If there is no prosecuting authority 
274.14  involved in the forfeiture, the 25 percent of the proceeds 
274.15  otherwise designated for the prosecuting authority must be 
274.16  deposited into the general fund.  
274.17     (d) If a demand for judicial determination is made and no 
274.18  action commenced as provided in this subdivision, the property 
274.19  must be released by the commissioner and returned to the person 
274.20  entitled to it.  (e) If no demand for judicial determination is 
274.21  made, the property seized is considered forfeited to the state 
274.22  by operation of law and may be disposed of by the commissioner 
274.23  as provided in the case of a judgment of forfeiture. 
274.24     <b>[EFFECTIVE DATE.]</b> This section is effective for seizures 
274.25  made on or after July 1, 2001. 
274.26     Sec. 9.  Minnesota Statutes 2000, section 297G.20, 
274.27  subdivision 3, is amended to read: 
274.28     Subd. 3.  [SEIZURE.] Distilled spirits, wine, fermented 
274.29  malt beverages, or other property made contraband by subdivision 
274.30  1 may be seized by the commissioner of revenue or public safety 
274.31  and their authorized agents or by any sheriff or other police 
274.32  officer, with or without process, and are subject to forfeiture 
274.33  as provided in subdivisions subdivision 4 and 5. 
274.34     <b>[EFFECTIVE DATE.]</b> This section is effective for seizures 
274.35  made on or after July 1, 2001. 
274.36     Sec. 10.  Minnesota Statutes 2000, section 297G.20, 
275.1   subdivision 4, is amended to read: 
275.2      Subd. 4.  [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 
275.3   DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the 
275.4   seizure of alleged contraband, the person making the seizure 
275.5   shall make available serve by certified mail an inventory of the 
275.6   property seized to on the person from whom the property was 
275.7   seized, if known, and on any person known or believed to have 
275.8   any right, title, interest, or lien in the property, at the last 
275.9   known address, and file a copy with both the commissioners of 
275.10  revenue and public safety.  The notice must include an 
275.11  explanation of the right to demand a judicial forfeiture 
275.12  determination. 
275.13     (b) Within ten 60 days after the date of service of the 
275.14  inventory, which is the date of mailing, the person from whom 
275.15  the property was seized or any person claiming an interest in 
275.16  the property may file with the seizing authority a demand for 
275.17  judicial determination of whether the property was lawfully 
275.18  subject to seizure and forfeiture.  Within 60 days after the 
275.19  date of the filing of the demand, the seizing authority must 
275.20  bring an action in the district court of the county where 
275.21  seizure was made to determine the issue of forfeiture.  The 
275.22  demand must be in the form of a civil complaint and must be 
275.23  filed with the court administrator in the county in which the 
275.24  seizure occurred, together with proof of service of a copy of 
275.25  the complaint on the commissioner of revenue or public safety, 
275.26  and the standard filing fee for civil actions unless the 
275.27  petitioner has the right to sue in forma pauperis under section 
275.28  563.01.  If the value of the seized property or vehicle is 
275.29  $7,500 or less, the claimant may file an action in conciliation 
275.30  court for recovery of the property.  If the value of the seized 
275.31  property is less than $500, the claimant does not have to pay 
275.32  the conciliation court filing fee.  
275.33     (c) The complaint must be captioned in the name of the 
275.34  claimant as plaintiff and the seized property as defendant, and 
275.35  must state with specificity the grounds on which the claimant 
275.36  alleges the property was improperly seized and the plaintiff's 
276.1   interest in the property seized.  No responsive pleading is 
276.2   required of the commissioner of revenue or public safety and no 
276.3   court fees may be charged for either commissioner's appearance 
276.4   in the matter.  The proceedings are governed by the Rules of 
276.5   Civil Procedure.  Notwithstanding any law to the contrary, an 
276.6   action for the return of property seized under this section may 
276.7   not be maintained by or on behalf of any person who has been 
276.8   served with an inventory unless the person has complied with 
276.9   this subdivision.  
276.10     (b) The action must be brought in the name of the state and 
276.11  must be prosecuted by the county attorney or by the attorney 
276.12  general.  The court shall hear the action without a jury and 
276.13  determine the issues of fact and law involved. 
276.14     (c) (d) If a judgment of forfeiture is entered, the seizing 
276.15  authority may, unless the judgment is stayed pending an appeal, 
276.16  either: 
276.17     (1) cause the forfeited property, other than a vehicle, to 
276.18  be destroyed; or 
276.19     (2) cause it to be sold at a public auction as provided by 
276.20  law.  
276.21     The person making a sale, after deducting the expense of 
276.22  keeping the property, the fee for seizure, and the costs of the 
276.23  sale, shall pay all liens according to their priority, which are 
276.24  established as being bona fide and as existing without the 
276.25  lienor having any notice or knowledge that the property was 
276.26  being used or was intended to be used for or in connection with 
276.27  the violation.  The balance of the proceeds must be paid 75 
276.28  percent to the seizing authority for deposit as a supplement to 
276.29  its operating fund or similar fund for official use, and 25 
276.30  percent to the county attorney or other prosecuting agency that 
276.31  handled the court proceeding, if there is one, for deposit as a 
276.32  supplement to its operating fund or similar fund for 
276.33  prosecutorial purposes.  If there is no prosecuting authority 
276.34  involved in the forfeiture, the 25 percent of the proceeds 
276.35  otherwise designated for the prosecuting authority must be 
276.36  deposited into the general fund.  
277.1      (d) If demand for judicial determination is made and no 
277.2   action is commenced by the seizing authority as provided in this 
277.3   subdivision, the property must be released by the seizing 
277.4   authority and delivered to the person entitled to it.  (e) If no 
277.5   demand is made, the property seized is considered forfeited to 
277.6   the seizing authority by operation of law and may be disposed of 
277.7   by the seizing authority as provided for a judgment of 
277.8   forfeiture.  When the seizing authority is satisfied that a 
277.9   person from whom property is seized was acting in good faith and 
277.10  without intent to evade the tax imposed by this chapter, the 
277.11  seizing authority shall release the property seized without 
277.12  further legal proceedings. 
277.13     <b>[EFFECTIVE DATE.]</b> This section is effective for seizures 
277.14  made on or after July 1, 2001. 
277.15     Sec. 11.  [REPEALER.] 
277.16     Minnesota Statutes 2000, sections 296A.24, subdivision 3; 
277.17  297E.16, subdivision 3; 297F.21, subdivision 4; and 297G.20, 
277.18  subdivision 5, are repealed. 
277.19     <b>[EFFECTIVE DATE.]</b> This section is effective for seizures 
277.20  made on or after July 1, 2001. 
277.21                             ARTICLE 10 
277.22                   ELECTRONIC FILING AND PAYMENT
277.23     Section 1.  Minnesota Statutes 2000, section 115B.24, 
277.24  subdivision 2, is amended to read: 
277.25     Subd. 2.  [DECLARATIONS OF ESTIMATED TAX.] For 1983, every 
277.26  generator of hazardous waste required to pay a tax pursuant to 
277.27  section 115B.22 shall make a declaration of estimated hazardous 
277.28  waste generated for the last six months of calendar year 1983 if 
277.29  the tax can reasonably be estimated to exceed $500.  The 
277.30  declaration of the estimated tax shall be filed by October 15, 
277.31  1983.  The amount of estimated tax with respect to which a 
277.32  declaration is required shall be paid in two equal installments 
277.33  by October 15, 1983 and January 15, 1984.  For 1984 and 
277.34  subsequent years, every generator of hazardous waste required to 
277.35  pay a tax pursuant to section 115B.22 shall make a declaration 
277.36  of estimated hazardous waste generated for the calendar year if 
278.1   the tax can reasonably be expected to be in excess of $1,000.  
278.2   The declaration of estimated tax shall be filed by March 15.  
278.3   The amount of estimated tax with respect to which a declaration 
278.4   is required shall be paid in four equal installments on or 
278.5   before the 15th day of March, June, September, and December.  
278.6      An amendment of a declaration may be filed in any interval 
278.7   between installment dates prescribed above but only one 
278.8   amendment may be filed in each interval.  If an amendment of a 
278.9   declaration is filed, the amount of each remaining installment 
278.10  shall be the amount which would have been payable if the new 
278.11  estimate had been made when the first estimate for the calendar 
278.12  year was made, increased or decreased, as the case may be, by 
278.13  the amount computed by dividing 
278.14     (1) the difference between (A) the amount of estimated tax 
278.15  required to be paid before the date on which the amendment was 
278.16  made, and (B) the amount of estimated tax which would have been 
278.17  required to be paid before that date if the new estimate had 
278.18  been made when the first estimate was made, by 
278.19     (2) the number of installments remaining to be paid on or 
278.20  after the date on which the amendment is made.  
278.21     The commissioner of revenue may grant a reasonable 
278.22  extension of time for filing any declaration but the extension 
278.23  shall not be for more than six months.  
278.24     If the aggregate amount of estimated tax payments made 
278.25  during a fiscal year ending June 30 is equal to or exceeds 
278.26  $80,000, all estimated tax payments in the subsequent calendar 
278.27  year must be paid by electronic means of a funds transfer as 
278.28  defined in section 336.4A-104, paragraph (a).  The funds 
278.29  transfer payment date, as defined in section 336.4A-401, must be 
278.30  on or before the date the estimated tax payment is due.  If the 
278.31  date the estimated tax payment is due is not a funds transfer 
278.32  business day, as defined in section 336.4A-105, paragraph (a), 
278.33  clause (4), the payment date must be on or before the funds 
278.34  transfer business day next following the date the estimated tax 
278.35  payment is due. 
278.36     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
279.1   following final enactment. 
279.2      Sec. 2.  Minnesota Statutes 2000, section 270.271, 
279.3   subdivision 1, is amended to read: 
279.4      Subdivision 1.  [DATE OF DELIVERY.] When a document, 
279.5   including a return, claim, or statement, is required to be 
279.6   filed, or a payment is required to be made to the commissioner 
279.7   within a prescribed period, or on or before a prescribed date, 
279.8   and if the document or payment is delivered by electronic means 
279.9   or by United States mail after the period or the date to the 
279.10  place prescribed for filing or payment, then the date of 
279.11  delivery or of payment is the date of the confirmation 
279.12  time-and-date stamp of the transaction, if delivered by 
279.13  electronic means, or the date of the United States postmark 
279.14  stamped on the cover in which the document or payment is mailed, 
279.15  if delivered by United States mail shall be considered the date 
279.16  of delivery or of payment, as the case may be. 
279.17     <b>[EFFECTIVE DATE.]</b> This section is effective for returns and 
279.18  payments due on or after July 1, 2001. 
279.19     Sec. 3.  Minnesota Statutes 2000, section 270.271, 
279.20  subdivision 3, is amended to read: 
279.21     Subd. 3.  [CONFIRMATION OF ELECTRONIC FILING AND PAYMENT 
279.22  AND UNITED STATES POSTAL SERVICE POSTMARK.] The confirmation 
279.23  numbers and confirmation time-and-date stamps received by the 
279.24  taxpayer following electronic payment or filing is proof of the 
279.25  payment authorization and filing dates.  Only the postmark of 
279.26  the United States Postal Service, rather than those of private 
279.27  postage meters, qualifies as proof of timely mailing under this 
279.28  section.  If the document or payment is sent by United States 
279.29  registered mail, the date of registration shall be treated as 
279.30  the postmark date.  If the document or payment is sent by United 
279.31  States certified mail and the sender's receipt is postmarked by 
279.32  the postal employee to whom the envelope containing such 
279.33  document or payment is presented, the date of the United States 
279.34  postmark on the receipt shall be treated as the postmark date of 
279.35  the document or payment. 
279.36     <b>[EFFECTIVE DATE.]</b> This section is effective for returns and 
280.1   payments due on or after July 1, 2001. 
280.2      Sec. 4.  Minnesota Statutes 2000, section 270.771, is 
280.3   amended to read: 
280.4      270.771 [PAYMENTS REQUIRED TO BE MADE BY ELECTRONIC FUNDS 
280.5   TRANSFER ELECTRONICALLY.] 
280.6      (a) If a taxpayer is required to make payment of a tax to 
280.7   the commissioner by electronic means of electronic funds 
280.8   transfer as defined in section 336.4A-104, paragraph (a), the 
280.9   taxpayer shall make all payments of all taxes and fees paid to 
280.10  the commissioner by electronic means of electronic funds 
280.11  transfer. 
280.12     (b) Paragraph (a) does not apply to payments required to be 
280.13  made for individual income taxes under section 289A.20, 
280.14  subdivision 1, paragraph (a), or 289A.25.  
280.15     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
280.16  following final enactment. 
280.17     Sec. 5.  Minnesota Statutes 2000, section 270.78, is 
280.18  amended to read: 
280.19     270.78 [PENALTY FOR FAILURE TO MAKE PAYMENT BY ELECTRONIC 
280.20  FUNDS TRANSFER PAY ELECTRONICALLY.] 
280.21     In addition to other applicable penalties imposed by law, 
280.22  after notification from the commissioner of revenue to the 
280.23  taxpayer that payments for a tax administered by the 
280.24  commissioner are required to be made by electronic means of 
280.25  electronic funds transfer, and the payments are remitted by some 
280.26  other means, there is a penalty in the amount of five percent of 
280.27  each payment that should have been remitted electronically. 
280.28  After the commissioner's initial notification to the taxpayer 
280.29  that payments are required to be made by electronic means, the 
280.30  commissioner is not required to notify the taxpayer in 
280.31  subsequent periods if the initial notification specified the 
280.32  amount of tax liability at which a taxpayer is required to remit 
280.33  payments by electronic means.  The penalty can be abated under 
280.34  the abatement procedures prescribed in section 270.07, 
280.35  subdivision 6, if the failure to remit the payment 
280.36  electronically is due to reasonable cause.  The penalty bears 
281.1   interest at the rate specified in section 270.75 from the due 
281.2   date of the payment of the tax to the date of payment of the 
281.3   penalty. 
281.4      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
281.5   following final enactment. 
281.6      Sec. 6.  Minnesota Statutes 2000, section 287.12, is 
281.7   amended to read: 
281.8      287.12 [TAXES, HOW APPORTIONED.] 
281.9      (a) All taxes paid to the county treasurer under the 
281.10  provisions of sections 287.01 to 287.12 must be apportioned, 97 
281.11  percent to the general fund of the state, and three percent to 
281.12  the county revenue fund. 
281.13     (b) On or before the 20th day of each month the county 
281.14  treasurer shall determine and pay to the commissioner of revenue 
281.15  for deposit in the state treasury and credit to the general fund 
281.16  the state's portion of the receipts from the mortgage registry 
281.17  tax during the preceding month subject to the electronic funds 
281.18  transfer payment requirements of section 270.771.  The county 
281.19  treasurer shall provide any related reports requested by the 
281.20  commissioner of revenue. 
281.21     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
281.22  following final enactment. 
281.23     Sec. 7.  Minnesota Statutes 2000, section 289A.02, is 
281.24  amended by adding a subdivision to read: 
281.25     Subd. 8.  [ELECTRONIC MEANS.] "Electronic means" refers to 
281.26  a method that is electronic, as defined in section 325L.02, 
281.27  paragraph (e), and that is prescribed by the commissioner. 
281.28     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
281.29  following final enactment. 
281.30     Sec. 8.  Minnesota Statutes 2000, section 289A.18, 
281.31  subdivision 4, as amended by Laws 2001, chapter 7, section 56, 
281.32  is amended to read: 
281.33     Subd. 4.  [SALES AND USE TAX RETURNS.] (a) Sales and use 
281.34  tax returns must be filed on or before the 20th day of the month 
281.35  following the close of the preceding reporting period, except 
281.36  that annual use tax returns provided for under section 289A.11, 
282.1   subdivision 1, must be filed by April 15 following the close of 
282.2   the calendar year, in the case of individuals.  Annual use tax 
282.3   returns of businesses, including sole proprietorships, and 
282.4   annual sales tax returns must be filed by February 5 following 
282.5   the close of the calendar year.  
282.6      (b) Except for the return for the June reporting period, 
282.7   which is due on the following August 25, Returns for the June 
282.8   reporting period filed by retailers required to 
282.9   remit liabilities by means of funds transfer their June 
282.10  liability under section 289A.20, subdivision 4, 
282.11  paragraph (c) (b), are due on or before the 25th day of the 
282.12  month following the close of the preceding reporting 
282.13  period August 20.  
282.14     (c) If a retailer has an average sales and use tax 
282.15  liability, including local sales and use taxes administered by 
282.16  the commissioner, equal to or less than $500 per month in any 
282.17  quarter of a calendar year, and has substantially complied with 
282.18  the tax laws during the preceding four calendar quarters, the 
282.19  retailer may request authorization to file and pay the taxes 
282.20  quarterly in subsequent calendar quarters.  The authorization 
282.21  remains in effect during the period in which the retailer's 
282.22  quarterly returns reflect sales and use tax liabilities of less 
282.23  than $1,500 and there is continued compliance with state tax 
282.24  laws. 
282.25     (d) If a retailer has an average sales and use tax 
282.26  liability, including local sales and use taxes administered by 
282.27  the commissioner, equal to or less than $100 per month during a 
282.28  calendar year, and has substantially complied with the tax laws 
282.29  during that period, the retailer may request authorization to 
282.30  file and pay the taxes annually in subsequent years.  The 
282.31  authorization remains in effect during the period in which the 
282.32  retailer's annual returns reflect sales and use tax liabilities 
282.33  of less than $1,200 and there is continued compliance with state 
282.34  tax laws. 
282.35     (e) The commissioner may also grant quarterly or annual 
282.36  filing and payment authorizations to retailers if the 
283.1   commissioner concludes that the retailers' future tax 
283.2   liabilities will be less than the monthly totals identified in 
283.3   paragraphs (c) and (d).  An authorization granted under this 
283.4   paragraph is subject to the same conditions as an authorization 
283.5   granted under paragraphs (c) and (d). 
283.6      (f) A taxpayer who is a materials supplier may report gross 
283.7   receipts either on: 
283.8      (1) the cash basis as the consideration is received; or 
283.9      (2) the accrual basis as sales are made.  
283.10  As used in this paragraph, "materials supplier" means a person 
283.11  who provides materials for the improvement of real property; who 
283.12  is primarily engaged in the sale of lumber and building 
283.13  materials-related products to owners, contractors, 
283.14  subcontractors, repairers, or consumers; who is authorized to 
283.15  file a mechanics lien upon real property and improvements under 
283.16  chapter 514; and who files with the commissioner an election to 
283.17  file sales and use tax returns on the basis of this paragraph. 
283.18     <b>[EFFECTIVE DATE.]</b> This section is effective for returns due 
283.19  on or after July 1, 2001. 
283.20     Sec. 9.  Minnesota Statutes 2000, section 289A.20, 
283.21  subdivision 1, is amended to read: 
283.22     Subdivision 1.  [INDIVIDUAL INCOME, FIDUCIARY INCOME, 
283.23  MINING COMPANY, CORPORATE FRANCHISE, AND ENTERTAINMENT TAXES.] 
283.24  (a) Individual income, fiduciary, mining company, and corporate 
283.25  franchise taxes must be paid to the commissioner on or before 
283.26  the date the return must be filed under section 289A.18, 
283.27  subdivision 1, or the extended due date as provided in section 
283.28  289A.19, unless an earlier date for payment is provided.  
283.29     Notwithstanding any other law, a taxpayer whose unpaid 
283.30  liability for income or corporate franchise taxes, as reflected 
283.31  upon the return, is $1 or less need not pay the tax.  
283.32     (b) Entertainment taxes must be paid on or before the date 
283.33  the return must be filed under section 289A.18, subdivision 1. 
283.34     (c) If a fiduciary administers 100 or more trusts, 
283.35  fiduciary income taxes for all trusts administered by the 
283.36  fiduciary must be paid by funds transfer as defined in section 
284.1   336.4A-104, paragraph (a).  The funds transfer payment date, as 
284.2   defined in section 336.4A-401, must be on or before the date the 
284.3   tax payment is due.  If the date the payment is due is not a 
284.4   funds transfer business day, as defined in section 336.4A-105, 
284.5   paragraph (a), clause (4), the payment date must be on or before 
284.6   the funds transfer business day next following the date the 
284.7   payment is due electronic means.  
284.8      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
284.9   following final enactment. 
284.10     Sec. 10.  Minnesota Statutes 2000, section 289A.20, 
284.11  subdivision 2, is amended to read: 
284.12     Subd. 2.  [WITHHOLDING FROM WAGES, ENTERTAINER WITHHOLDING, 
284.13  WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, AND 
284.14  WITHHOLDING BY PARTNERSHIPS AND SMALL BUSINESS CORPORATIONS.] 
284.15  (a) A tax required to be deducted and withheld during the 
284.16  quarterly period must be paid on or before the last day of the 
284.17  month following the close of the quarterly period, unless an 
284.18  earlier time for payment is provided.  A tax required to be 
284.19  deducted and withheld from compensation of an entertainer and 
284.20  from a payment to an out-of-state contractor must be paid on or 
284.21  before the date the return for such tax must be filed under 
284.22  section 289A.18, subdivision 2.  Taxes required to be deducted 
284.23  and withheld by partnerships and S corporations must be paid on 
284.24  or before the date the return must be filed under section 
284.25  289A.18, subdivision 2. 
284.26     (b) An employer who, during the previous quarter, withheld 
284.27  more than $1,500 of tax under section 290.92, subdivision 2a or 
284.28  3, or 290.923, subdivision 2, must deposit tax withheld under 
284.29  those sections with the commissioner within the time allowed to 
284.30  deposit the employer's federal withheld employment taxes under 
284.31  Treasury Regulation, section 31.6302-1, without regard to the 
284.32  safe harbor or de minimis rules in subparagraph (f) or the 
284.33  one-day rule in subsection (c), clause (3).  Taxpayers must 
284.34  submit a copy of their federal notice of deposit status to the 
284.35  commissioner upon request by the commissioner. 
284.36     (c) The commissioner may prescribe by rule other return 
285.1   periods or deposit requirements.  In prescribing the reporting 
285.2   period, the commissioner may classify payors according to the 
285.3   amount of their tax liability and may adopt an appropriate 
285.4   reporting period for the class that the commissioner judges to 
285.5   be consistent with efficient tax collection.  In no event will 
285.6   the duration of the reporting period be more than one year. 
285.7      (d) If less than the correct amount of tax is paid to the 
285.8   commissioner, proper adjustments with respect to both the tax 
285.9   and the amount to be deducted must be made, without interest, in 
285.10  the manner and at the times the commissioner prescribes.  If the 
285.11  underpayment cannot be adjusted, the amount of the underpayment 
285.12  will be assessed and collected in the manner and at the times 
285.13  the commissioner prescribes. 
285.14     (e) If the aggregate amount of the tax withheld during a 
285.15  fiscal year ending June 30 under section 290.92, subdivision 2a 
285.16  or 3, is equal to or exceeds the amounts established for 
285.17  remitting federal withheld taxes pursuant to the regulations 
285.18  promulgated under section 6302(h) of the Internal Revenue Code, 
285.19  the employer must remit each required deposit for wages paid in 
285.20  the subsequent calendar year by electronic means of a funds 
285.21  transfer as defined in section 336.4A-104, paragraph (a).  The 
285.22  funds transfer payment date, as defined in section 336.4A-401, 
285.23  must be on or before the date the deposit is due.  If the date 
285.24  the deposit is due is not a funds transfer business day, as 
285.25  defined in section 336.4A-105, paragraph (a), clause (4), the 
285.26  payment date must be on or before the funds transfer business 
285.27  day next following the date the deposit is due. 
285.28     (f) A third-party bulk filer as defined in section 290.92, 
285.29  subdivision 30, paragraph (a), clause (2), who remits 
285.30  withholding deposits must remit all deposits by electronic means 
285.31  of a funds transfer as provided in paragraph (e), regardless of 
285.32  the aggregate amount of tax withheld during a fiscal year for 
285.33  all of the employers.  
285.34     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
285.35  following final enactment. 
285.36     Sec. 11.  Minnesota Statutes 2000, section 289A.20, 
286.1   subdivision 4, is amended to read: 
286.2      Subd. 4.  [SALES AND USE TAX.] (a) The taxes imposed by 
286.3   chapter 297A are due and payable to the commissioner monthly on 
286.4   or before the 20th day of the month following the month in which 
286.5   the taxable event occurred, or following another reporting 
286.6   period as the commissioner prescribes or as allowed under 
286.7   section 289A.18, subdivision 4, paragraph (f), except that use 
286.8   taxes due on an annual use tax return as provided under section 
286.9   289A.11, subdivision 1, are payable by April 15 following the 
286.10  close of the calendar year. 
286.11     (b) A vendor having a liability of $120,000 or more during 
286.12  a fiscal year ending June 30 must remit the June liability for 
286.13  the next year in the following manner: 
286.14     (1) Two business days before June 30 of the year, the 
286.15  vendor must remit 62 percent of the estimated June liability to 
286.16  the commissioner.  
286.17     (2) On or before August 14 20 of the year, the vendor must 
286.18  pay any additional amount of tax not remitted in June. 
286.19     (c) A vendor having a liability of $120,000 or more during 
286.20  a fiscal year ending June 30 must remit all liabilities on 
286.21  returns due for periods beginning in the subsequent calendar 
286.22  year by electronic means of a funds transfer as defined in 
286.23  section 336.4A-104, paragraph (a).  The funds transfer payment 
286.24  date, as defined in section 336.4A-401, must be on or before the 
286.25  14th 20th day of the month following the month in which the 
286.26  taxable event occurred, or on or before the 14th 20th day of the 
286.27  month following the month in which the sale is reported under 
286.28  section 289A.18, subdivision 4, except for 62 percent of the 
286.29  estimated June liability, which is due two business days before 
286.30  June 30.  The remaining amount of the June liability is due on 
286.31  August 14 20.  If the date the tax is due is not a funds 
286.32  transfer business day, as defined in section 336.4A-105, 
286.33  paragraph (a), clause (4), the payment date must be on or before 
286.34  the funds transfer business day next following the date the tax 
286.35  is due. 
286.36     (d) If the vendor required to remit by electronic funds 
287.1   transfer as provided in paragraph (c) is unable due to 
287.2   reasonable cause to determine the actual sales and use tax due 
287.3   on or before the due date for payment, the vendor may remit an 
287.4   estimate of the tax owed using one of the following options: 
287.5      (1) 100 percent of the tax reported on the previous month's 
287.6   sales and use tax return; 
287.7      (2) 100 percent of the tax reported on the sales and use 
287.8   tax return for the same month in the previous calendar year; or 
287.9      (3) 95 percent of the actual tax due. 
287.10     Any additional amount of tax that is not remitted on or 
287.11  before the due date for payment, must be remitted with the 
287.12  return.  If a vendor fails to remit the actual liability or does 
287.13  not remit using one of the estimate options by the due date for 
287.14  payment, the vendor must remit actual liability as provided in 
287.15  paragraph (c) in all subsequent periods.  This paragraph does 
287.16  not apply to the June sales and use tax liability. 
287.17     <b>[EFFECTIVE DATE.]</b> This section is effective for payments 
287.18  due on or after July 1, 2001. 
287.19     Sec. 12.  Minnesota Statutes 2000, section 289A.26, 
287.20  subdivision 2a, is amended to read: 
287.21     Subd. 2a.  [ELECTRONIC FUNDS TRANSFER PAYMENTS.] If the 
287.22  aggregate amount of estimated tax payments made during a 
287.23  calendar year is equal to or exceeds $20,000, all estimated tax 
287.24  payments in the subsequent calendar year must be paid 
287.25  by electronic means of a funds transfer as defined in section 
287.26  336.4A-104, paragraph (a).  The funds transfer payment date, as 
287.27  defined in section 336.4A-401, must be on or before the date the 
287.28  estimated tax payment is due.  If the date the estimated tax 
287.29  payment is due is not a funds transfer business day, as defined 
287.30  in section 336.4A-105, paragraph (a), clause (4), the payment 
287.31  date must be on or before the funds transfer business day next 
287.32  following the date the estimated tax payment is due. 
287.33     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
287.34  following final enactment. 
287.35     Sec. 13.  Minnesota Statutes 2000, section 289A.60, 
287.36  subdivision 21, as amended by Laws 2001, chapter 7, section 60, 
288.1   is amended to read: 
288.2      Subd. 21.  [PENALTY FOR FAILURE TO MAKE PAYMENT BY 
288.3   ELECTRONIC FUNDS TRANSFER MEANS.] In addition to other 
288.4   applicable penalties imposed by this section, after notification 
288.5   from the commissioner to the taxpayer that payments are required 
288.6   to be made by electronic means of electronic funds transfer 
288.7   under section 289A.20, subdivision 2, paragraph (e), or 4, 
288.8   paragraph (c), or 289A.26, subdivision 2a, and the payments are 
288.9   remitted by some other means, there is a penalty in the amount 
288.10  of five percent of each payment that should have been remitted 
288.11  electronically.  After the commissioner's initial notification 
288.12  to the taxpayer that payments are required to be made by 
288.13  electronic means, the commissioner is not required to notify the 
288.14  taxpayer in subsequent periods if the initial notification 
288.15  specified the amount of tax liability at which a taxpayer is 
288.16  required to remit payments by electronic means.  The penalty can 
288.17  be abated under the abatement procedures prescribed in section 
288.18  270.07, subdivision 6, if the failure to remit the payment 
288.19  electronically is due to reasonable cause. 
288.20     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
288.21  following final enactment. 
288.22     Sec. 14.  Minnesota Statutes 2000, section 295.55, 
288.23  subdivision 4, is amended to read: 
288.24     Subd. 4.  [ELECTRONIC FUNDS TRANSFER PAYMENTS.] A taxpayer 
288.25  with an aggregate tax liability of $120,000 or more during a 
288.26  fiscal year ending June 30, must remit all liabilities by 
288.27  electronic means of a funds transfer as defined in section 
288.28  336.4A-104, paragraph (a), in the subsequent calendar year.  The 
288.29  funds transfer payment date, as defined in section 336.4A-401, 
288.30  is on or before the date the tax is due.  If the date the tax is 
288.31  due is not a funds-transfer business day, as defined in section 
288.32  336.4A-105, paragraph (a), clause (4), the payment date is on or 
288.33  before the first funds-transfer business day after the date the 
288.34  tax is due. 
288.35     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
288.36  following final enactment. 
289.1      Sec. 15.  Minnesota Statutes 2000, section 296A.15, 
289.2   subdivision 7, is amended to read: 
289.3      Subd. 7.  [ELECTRONIC FUNDS TRANSFER PAYMENT REQUIRED.] All 
289.4   remittances must be made by electronic means of electronic funds 
289.5   transfer as defined in section 336.4A-104, paragraph (a).  The 
289.6   funds transfer payment date, as defined in section 336.4A-401, 
289.7   must be on or before the date the remittance is due.  If the 
289.8   date the remittance is due is not a funds transfer business day, 
289.9   as defined in section 336.4A-105, paragraph (a), clause (4), the 
289.10  payment date must be on or before the funds transfer business 
289.11  day next following the date the remittance is due.  
289.12     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
289.13  following final enactment. 
289.14     Sec. 16.  Minnesota Statutes 2000, section 297E.02, 
289.15  subdivision 4, is amended to read: 
289.16     Subd. 4.  [PULL-TAB AND TIPBOARD TAX.] (a) A tax is imposed 
289.17  on the sale of each deal of pull-tabs and tipboards sold by a 
289.18  distributor.  The rate of the tax is 1.7 percent of the ideal 
289.19  gross of the pull-tab or tipboard deal.  The sales tax imposed 
289.20  by chapter 297A on the sale of the pull-tabs and tipboards by 
289.21  the distributor is imposed on the retail sales price less the 
289.22  tax imposed by this subdivision.  The retail sale of pull-tabs 
289.23  or tipboards by the organization is exempt from taxes imposed by 
289.24  chapter 297A and is exempt from all local taxes and license fees 
289.25  except a fee authorized under section 349.16, subdivision 8.  
289.26     (b) The liability for the tax imposed by this section is 
289.27  incurred when the pull-tabs and tipboards are delivered by the 
289.28  distributor to the customer or to a common or contract carrier 
289.29  for delivery to the customer, or when received by the customer's 
289.30  authorized representative at the distributor's place of 
289.31  business, regardless of the distributor's method of accounting 
289.32  or the terms of the sale.  
289.33     The tax imposed by this subdivision is imposed on all sales 
289.34  of pull-tabs and tipboards, except the following:  
289.35     (1) sales to the governing body of an Indian tribal 
289.36  organization for use on an Indian reservation; 
290.1      (2) sales to distributors licensed under the laws of 
290.2   another state or of a province of Canada, as long as all 
290.3   statutory and regulatory requirements are met in the other state 
290.4   or province; 
290.5      (3) sales of promotional tickets as defined in section 
290.6   349.12; and 
290.7      (4) pull-tabs and tipboards sold to an organization that 
290.8   sells pull-tabs and tipboards under the exemption from licensing 
290.9   in section 349.166, subdivision 2.  A distributor shall require 
290.10  an organization conducting exempt gambling to show proof of its 
290.11  exempt status before making a tax-exempt sale of pull-tabs or 
290.12  tipboards to the organization.  A distributor shall identify, on 
290.13  all reports submitted to the commissioner, all sales of 
290.14  pull-tabs and tipboards that are exempt from tax under this 
290.15  subdivision.  
290.16     (c) A distributor having a liability of $120,000 or more 
290.17  during a fiscal year ending June 30 must remit all liabilities 
290.18  in the subsequent calendar year by a funds transfer as defined 
290.19  in section 336.4A-104, paragraph (a).  The funds transfer 
290.20  payment date, as defined in section 336.4A-401, must be on or 
290.21  before the date the tax is due.  If the date the tax is due is 
290.22  not a funds transfer business day, as defined in section 
290.23  336.4A-105, paragraph (a), clause (4), the payment date must be 
290.24  on or before the funds transfer business day next following the 
290.25  date the tax is due electronic means. 
290.26     (d) Any customer who purchases deals of pull-tabs or 
290.27  tipboards from a distributor may file an annual claim for a 
290.28  refund or credit of taxes paid pursuant to this subdivision for 
290.29  unsold pull-tab and tipboard tickets.  The claim must be filed 
290.30  with the commissioner on a form prescribed by the commissioner 
290.31  by March 20 of the year following the calendar year for which 
290.32  the refund is claimed.  The refund must be filed as part of the 
290.33  customer's February monthly return.  The refund or credit is 
290.34  equal to 1.7 percent of the face value of the unsold pull-tab or 
290.35  tipboard tickets, provided that the refund or credit will be 
290.36  1.75 percent of the face value of the unsold pull-tab or 
291.1   tipboard tickets for claims for a refund or credit of taxes 
291.2   filed on the February 2001 monthly return.  The refund claimed 
291.3   will be applied as a credit against tax owing under this chapter 
291.4   on the February monthly return.  If the refund claimed exceeds 
291.5   the tax owing on the February monthly return, that amount will 
291.6   be refunded.  The amount refunded will bear interest pursuant to 
291.7   section 270.76 from 90 days after the claim is filed.  
291.8      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
291.9   following final enactment. 
291.10     Sec. 17.  Minnesota Statutes 2000, section 297F.09, 
291.11  subdivision 7, is amended to read: 
291.12     Subd. 7.  [ELECTRONIC FUNDS TRANSFER PAYMENT.] A cigarette 
291.13  or tobacco products distributor having a liability of $120,000 
291.14  or more during a fiscal year ending June 30 must remit all 
291.15  liabilities in the subsequent calendar year by electronic means 
291.16  of a fund transfer as defined in section 336.4A-104, paragraph 
291.17  (a).  The funds transfer payment date, as defined in section 
291.18  336.4A-401, must be on or before the date the tax is due.  If 
291.19  the date the tax is due is not a funds transfer business day, as 
291.20  defined in section 336.4A-105, paragraph (a), clause (4), the 
291.21  payment date must be on or before the funds transfer day 
291.22  immediately following the date the tax is due. 
291.23     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
291.24  following final enactment. 
291.25     Sec. 18.  Minnesota Statutes 2000, section 297G.09, 
291.26  subdivision 6, is amended to read: 
291.27     Subd. 6.  [ELECTRONIC FUNDS TRANSFER PAYMENTS.] A licensed 
291.28  brewer, importer, or wholesaler having an excise tax liability 
291.29  of $120,000 or more during a fiscal year ending June 30 must 
291.30  remit all excise tax liabilities in the subsequent calendar year 
291.31  by electronic means of a funds transfer as defined in section 
291.32  336.4A-104, paragraph (a).  The funds transfer payment date, as 
291.33  defined in section 336.4A-401, must be on or before the date the 
291.34  excise tax is due.  If the date the excise tax is due is not a 
291.35  funds transfer business day, as defined in section 336.4A-105, 
291.36  paragraph (a), clause (4), the payment date must be on or before 
292.1   the funds transfer business day next following the date the 
292.2   excise tax is due. 
292.3      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
292.4   following final enactment. 
292.5      Sec. 19.  Minnesota Statutes 2000, section 297I.35, 
292.6   subdivision 2, is amended to read: 
292.7      Subd. 2.  [ELECTRONIC FUNDS TRANSFER PAYMENTS.] If the 
292.8   aggregate amount of tax and surcharges due under this chapter 
292.9   during a calendar year is equal to or exceeds $120,000, or if 
292.10  the taxpayer is required to make payment of any other tax to the 
292.11  commissioner by electronic means of electronic funds transfer as 
292.12  defined in section 336.4A-104, paragraph (a), then all tax and 
292.13  surcharge payments in the subsequent calendar year must be paid 
292.14  by electronic means of a funds transfer as defined in section 
292.15  336.4A-104, paragraph (a).  The funds transfer payment date, as 
292.16  defined in section 336.4A-104, must be on or before the date the 
292.17  payment is due.  If the date the payment is due is not a funds 
292.18  transfer business day, as defined in section 336.4A-105, 
292.19  paragraph (a), clause (4), the payment date must be on or before 
292.20  the funds transfer business day next following the date the 
292.21  payment is due. 
292.22     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
292.23  following final enactment. 
292.24     Sec. 20.  Minnesota Statutes 2000, section 297I.85, 
292.25  subdivision 7, is amended to read: 
292.26     Subd. 7.  [PENALTY FOR FAILURE TO MAKE PAYMENT BY 
292.27  ELECTRONIC FUNDS TRANSFER PAY ELECTRONICALLY.] In addition to 
292.28  other applicable penalties imposed by this section, if the 
292.29  commissioner notifies the taxpayer that payments are required to 
292.30  be made by electronic means of electronic funds transfer, and 
292.31  the payments are made by some other means, a penalty is 
292.32  imposed.  The amount of the penalty is equal to five percent of 
292.33  each payment that should have been paid electronically.  After 
292.34  the commissioner's initial notification to the taxpayer that 
292.35  payments are required to be made by electronic means, the 
292.36  commissioner is not required to notify the taxpayer in 
293.1   subsequent periods if the initial notification specified the 
293.2   amount of tax liability at which a taxpayer is required to remit 
293.3   payments by electronic means.  The penalty may be abated under 
293.4   the abatement procedures prescribed in section 270.07, 
293.5   subdivision 6, if the failure to pay electronically is due to 
293.6   reasonable cause. 
293.7      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
293.8   following final enactment. 
293.9      Sec. 21.  Minnesota Statutes 2000, section 473.843, 
293.10  subdivision 3, is amended to read: 
293.11     Subd. 3.  [PAYMENT OF FEE.] On or before the 20th day of 
293.12  each month each operator shall pay the fee due under this 
293.13  section for the previous month, using a form provided by the 
293.14  commissioner of revenue.  
293.15     An operator having a fee of $120,000 or more during a 
293.16  fiscal year ending June 30 must pay all fees in the subsequent 
293.17  calendar year by electronic means of a funds transfer as defined 
293.18  in section 336.4A-104, paragraph (a).  The funds transfer 
293.19  payment date, as defined in section 336.4A-401, must be on or 
293.20  before the date the fee is due.  If the date the fee is due is 
293.21  not a funds transfer business day, as defined in section 
293.22  336.4A-105, paragraph (a), clause (4), the payment date must be 
293.23  on or before the funds transfer business day next following the 
293.24  date the fee is due. 
293.25     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
293.26  following final enactment. 
293.27                             ARTICLE 11 
293.28                           MISCELLANEOUS 
293.29     Section 1.  [12.38] [STATE AGENCIES; TEMPORARY WAIVER OF 
293.30  FEES.] 
293.31     Notwithstanding any law to the contrary, a state agency as 
293.32  defined in section 16B.01, subdivision 2, with the approval of 
293.33  the governor, may waive fees that would otherwise be charged for 
293.34  agency services.  The waiver of fees must be confined to 
293.35  geographic areas within a presidentially declared disaster area, 
293.36  and to the minimum periods of time necessary to deal with the 
294.1   emergency situation.  The requirements of section 14.05, 
294.2   subdivision 4, do not apply to a waiver made under this 
294.3   section.  The agency must promptly report the reasons for and 
294.4   the impact of any suspended fees to the chairs of the 
294.5   legislative committees that oversee the policy and budgetary 
294.6   affairs of the agency.  
294.7      <b>[EFFECTIVE DATE.]</b> This section is effective for disaster 
294.8   declarations made after April 15, 2001. 
294.9      Sec. 2.  Minnesota Statutes 2000, section 16A.152, 
294.10  subdivision 2, is amended to read: 
294.11     Subd. 2.  [ADDITIONAL REVENUES; PRIORITY.] If on the basis 
294.12  of a forecast of general fund revenues and expenditures after 
294.13  November 1 in an odd-numbered year, the commissioner of finance 
294.14  determines that there will be a positive unrestricted budgetary 
294.15  general fund balance at the close of the biennium, the 
294.16  commissioner of finance must allocate money as follows: 
294.17     (1) first, to the budget reserve until the total amount in 
294.18  the account equals $622,000,000; then 
294.19     (2) 60 percent to the property tax reform account 
294.20  established in section 16A.1521; and 
294.21     (3) 40 percent is, and then as an unrestricted balance in 
294.22  the general fund. 
294.23     The amounts necessary to meet the requirements of this 
294.24  section are appropriated from the general fund within two weeks 
294.25  after the forecast is released. 
294.26     Sec. 3.  Minnesota Statutes 2000, section 45.011, 
294.27  subdivision 1, is amended to read: 
294.28     Subdivision 1.  [SCOPE.] As used in chapters 45 to 83, 
294.29  155A, 309, 332, 345, and 359, and sections 325D.30 to 325D.42, 
294.30  326.83 to 326.991, and 386.61 to 386.78, unless the context 
294.31  indicates otherwise, the terms defined in this section have the 
294.32  meanings given them.  
294.33     Sec. 4.  Minnesota Statutes 2000, section 270.06, is 
294.34  amended to read: 
294.35     270.06 [POWERS AND DUTIES.] 
294.36     The commissioner of revenue shall: 
295.1      (1) have and exercise general supervision over the 
295.2   administration of the assessment and taxation laws of the state, 
295.3   over assessors, town, county, and city boards of review and 
295.4   equalization, and all other assessing officers in the 
295.5   performance of their duties, to the end that all assessments of 
295.6   property be made relatively just and equal in compliance with 
295.7   the laws of the state; 
295.8      (2) confer with, advise, and give the necessary 
295.9   instructions and directions to local assessors and local boards 
295.10  of review throughout the state as to their duties under the laws 
295.11  of the state; 
295.12     (3) direct proceedings, actions, and prosecutions to be 
295.13  instituted to enforce the laws relating to the liability and 
295.14  punishment of public officers and officers and agents of 
295.15  corporations for failure or negligence to comply with the 
295.16  provisions of the laws of this state governing returns of 
295.17  assessment and taxation of property, and cause complaints to be 
295.18  made against local assessors, members of boards of equalization, 
295.19  members of boards of review, or any other assessing or taxing 
295.20  officer, to the proper authority, for their removal from office 
295.21  for misconduct or negligence of duty; 
295.22     (4) require county attorneys to assist in the commencement 
295.23  of prosecutions in actions or proceedings for removal, 
295.24  forfeiture and punishment for violation of the laws of this 
295.25  state in respect to the assessment and taxation of property in 
295.26  their respective districts or counties; 
295.27     (5) require town, city, county, and other public officers 
295.28  to report information as to the assessment of property, 
295.29  collection of taxes received from licenses and other sources, 
295.30  and such other information as may be needful in the work of the 
295.31  department of revenue, in such form and upon such blanks as the 
295.32  commissioner may prescribe; 
295.33     (6) require individuals, copartnerships, companies, 
295.34  associations, and corporations to furnish information concerning 
295.35  their capital, funded or other debt, current assets and 
295.36  liabilities, earnings, operating expenses, taxes, as well as all 
296.1   other statements now required by law for taxation purposes; 
296.2      (7) subpoena witnesses, at a time and place reasonable 
296.3   under the circumstances, to appear and give testimony, and to 
296.4   produce books, records, papers and documents for inspection and 
296.5   copying relating to any matter which the commissioner may have 
296.6   authority to investigate or determine; 
296.7      (8) issue a subpoena which does not identify the person or 
296.8   persons with respect to whose liability the subpoena is issued, 
296.9   but only if (a) the subpoena relates to the investigation of a 
296.10  particular person or ascertainable group or class of persons, 
296.11  (b) there is a reasonable basis for believing that such person 
296.12  or group or class of persons may fail or may have failed to 
296.13  comply with any law administered by the commissioner, (c) the 
296.14  information sought to be obtained from the examination of the 
296.15  records (and the identity of the person or persons with respect 
296.16  to whose liability the subpoena is issued) is not readily 
296.17  available from other sources, (d) the subpoena is clear and 
296.18  specific as to the information sought to be obtained, and (e) 
296.19  the information sought to be obtained is limited solely to the 
296.20  scope of the investigation.  Provided further that the party 
296.21  served with a subpoena which does not identify the person or 
296.22  persons with respect to whose tax liability the subpoena is 
296.23  issued shall have the right, within 20 days after service of the 
296.24  subpoena, to petition the district court for the judicial 
296.25  district in which lies the county in which that party is located 
296.26  for a determination as to whether the commissioner of revenue 
296.27  has complied with all the requirements in (a) to (e), and thus, 
296.28  whether the subpoena is enforceable.  If no such petition is 
296.29  made by the party served within the time prescribed, the 
296.30  subpoena shall have the force and effect of a court order; 
296.31     (9) cause the deposition of witnesses residing within or 
296.32  without the state, or absent therefrom, to be taken, upon notice 
296.33  to the interested party, if any, in like manner that depositions 
296.34  of witnesses are taken in civil actions in the district court, 
296.35  in any matter which the commissioner may have authority to 
296.36  investigate or determine; 
297.1      (10) investigate the tax laws of other states and countries 
297.2   and to formulate and submit to the legislature such legislation 
297.3   as the commissioner may deem expedient to prevent evasions of 
297.4   assessment and taxing laws, and secure just and equal taxation 
297.5   and improvement in the system of assessment and taxation in this 
297.6   state; 
297.7      (11) consult and confer with the governor upon the subject 
297.8   of taxation, the administration of the laws in regard thereto, 
297.9   and the progress of the work of the department of revenue, and 
297.10  furnish the governor, from time to time, such assistance and 
297.11  information as the governor may require relating to tax matters; 
297.12     (12) transmit to the governor, on or before the third 
297.13  Monday in December of each even-numbered year, and to each 
297.14  member of the legislature, on or before November 15 of each 
297.15  even-numbered year, the report of the department of revenue for 
297.16  the preceding years, showing all the taxable property in the 
297.17  state and the value of the same, in tabulated form; 
297.18     (13) inquire into the methods of assessment and taxation 
297.19  and ascertain whether the assessors faithfully discharge their 
297.20  duties, particularly as to their compliance with the laws 
297.21  requiring the assessment of all property not exempt from 
297.22  taxation; 
297.23     (14) administer and enforce the assessment and collection 
297.24  of state taxes and fees, including the use of any remedy 
297.25  available to nongovernmental creditors, and, from time to time, 
297.26  make, publish, and distribute rules for the administration and 
297.27  enforcement of assessments and fees administered by the 
297.28  commissioner and state tax laws.  The rules have the force of 
297.29  law; 
297.30     (15) prepare blank forms for the returns required by state 
297.31  tax law and distribute them throughout the state, furnishing 
297.32  them subject to charge on application; 
297.33     (16) prescribe rules governing the qualification and 
297.34  practice of agents, attorneys, or other persons representing 
297.35  taxpayers before the commissioner.  The rules may require that 
297.36  those persons, agents, and attorneys show that they are of good 
298.1   character and in good repute, have the necessary qualifications 
298.2   to give taxpayers valuable services, and are otherwise competent 
298.3   to advise and assist taxpayers in the presentation of their case 
298.4   before being recognized as representatives of taxpayers.  After 
298.5   due notice and opportunity for hearing, the commissioner may 
298.6   suspend and disbar from further practice before the commissioner 
298.7   any person, agent, or attorney who is shown to be incompetent or 
298.8   disreputable, who refuses to comply with the rules, or who with 
298.9   intent to defraud, willfully or knowingly deceives, misleads, or 
298.10  threatens a taxpayer or prospective taxpayer, by words, 
298.11  circular, letter, or by advertisement.  This clause does not 
298.12  curtail the rights of individuals to appear in their own behalf 
298.13  or partners or corporations' officers to appear in behalf of 
298.14  their respective partnerships or corporations; 
298.15     (17) appoint agents as the commissioner considers necessary 
298.16  to make examinations and determinations.  The agents have the 
298.17  rights and powers conferred on the commissioner to subpoena, 
298.18  examine, and copy books, records, papers, or memoranda, subpoena 
298.19  witnesses, administer oaths and affirmations, and take 
298.20  testimony.  In addition to administrative subpoenas of the 
298.21  commissioner and the agents, upon demand of the commissioner or 
298.22  an agent, the court administrator of any district court shall 
298.23  issue a subpoena for the attendance of a witness or the 
298.24  production of books, papers, records, or memoranda before the 
298.25  agent for inspection and copying.  Disobedience of a court 
298.26  administrator's subpoena shall be punished by the district court 
298.27  of the district in which the subpoena is issued, or in the case 
298.28  of a subpoena issued by the commissioner or an agent, by the 
298.29  district court of the district in which the party served with 
298.30  the subpoena is located, in the same manner as contempt of the 
298.31  district court; 
298.32     (18) appoint and employ additional help, purchase supplies 
298.33  or materials, or incur other expenditures in the enforcement of 
298.34  state tax laws as considered necessary.  The salaries of all 
298.35  agents and employees provided for in this chapter shall be fixed 
298.36  by the appointing authority, subject to the approval of the 
299.1   commissioner of administration; 
299.2      (19) execute and administer any agreement with the 
299.3   secretary of the treasury of the United States or a 
299.4   representative of another state regarding the exchange of 
299.5   information and administration of the tax laws; 
299.6      (20) administer and enforce the provisions of sections 
299.7   325D.30 to 325D.42, the Minnesota Unfair Cigarette Sales Act; 
299.8      (21) authorize the use of unmarked motor vehicles to 
299.9   conduct seizures or criminal investigations pursuant to the 
299.10  commissioner's authority; and 
299.11     (22) (21) exercise other powers and perform other duties 
299.12  required of or imposed upon the commissioner of revenue by law.  
299.13     Sec. 5.  Minnesota Statutes 2000, section 270.07, 
299.14  subdivision 3, is amended to read: 
299.15     Subd. 3.  [ADDITIONAL POWERS OF COMMISSIONER.] 
299.16  Notwithstanding any other provision of law the commissioner of 
299.17  revenue may, 
299.18     (a) based upon the administrative costs of processing, 
299.19  determine minimum standards for the determination of additional 
299.20  tax for which an order shall be issued, and 
299.21     (b) based upon collection costs as compared to the amount 
299.22  of tax involved, determine minimum standards of collection, and 
299.23     (c) based upon the administrative costs of processing, 
299.24  determine the minimum amount of refunds for which an order shall 
299.25  be issued and refund made where no claim therefor has been 
299.26  filed, and 
299.27     (d) cancel any amounts below these minimum standards 
299.28  determined under (a) and (b) hereof, and 
299.29     (e) based upon the inability of a taxpayer to pay a 
299.30  delinquent tax liability, abate the liability if the taxpayer 
299.31  agrees to perform uncompensated public service work for a state 
299.32  agency, a political subdivision or public corporation of this 
299.33  state, or a nonprofit educational, medical, or social service 
299.34  agency.  The department of corrections shall administer the work 
299.35  program.  No benefits under chapter 176 or 268 shall be 
299.36  available, but a claim authorized under section 3.739 may be 
300.1   made by the taxpayer.  The state may not enter into any 
300.2   agreement that has the purpose of or results in the displacement 
300.3   of public employees by a delinquent taxpayer under this 
300.4   section.  The state must certify to the appropriate bargaining 
300.5   agent or employees, as applicable, that the work performed by a 
300.6   delinquent taxpayer will not result in the displacement of 
300.7   currently employed workers or layoff from a substantially 
300.8   equivalent position, including partial displacement such as 
300.9   reduction in hours of nonovertime work, wages, or other 
300.10  employment benefits, and 
300.11     (f) based on a showing of reasonable cause reissue an 
300.12  uncashed rebate warrant or check that has lapsed under any 
300.13  provision of law relating to rebates or under section 290A.18, 
300.14  subdivision 2.  The authority to reissue warrants or checks 
300.15  under this paragraph is limited to five years after the date of 
300.16  issuance of the original warrant or check. 
300.17     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
300.18  following final enactment. 
300.19     Sec. 6.  Minnesota Statutes 2000, section 270.07, is 
300.20  amended by adding a subdivision to read: 
300.21     Subd. 3a.  [APPROPRIATION.] An amount sufficient for the 
300.22  reissuance of rebate warrants authorized under this section is 
300.23  appropriated to the commissioner from the general fund. 
300.24     Sec. 7.  [270.277] [NOTICES TO HOLDERS OF POWERS OF 
300.25  ATTORNEY.] 
300.26     If a taxpayer has executed a written power of attorney, in 
300.27  a form prescribed by the commissioner, the commissioner shall 
300.28  allow the taxpayer to elect, in writing, that all notices and 
300.29  correspondence between the department of revenue and the 
300.30  taxpayer will be sent to the holder of the power of attorney. 
300.31     Sec. 8.  [270.691] [PUBLICATION OF NAMES OF DELINQUENT 
300.32  TAXPAYERS.] 
300.33     Subdivision 1.  [COMMISSIONER MAY PUBLISH.] (a) 
300.34  Notwithstanding any other law, the commissioner may publish a 
300.35  list or lists of taxpayers who owe delinquent taxes or fees 
300.36  administered by the commissioner, and who meet the requirements 
301.1   of paragraph (b). 
301.2      (b) For purposes of this section, a taxpayer may be 
301.3   included on a list if: 
301.4      (1) the taxes or fees owed remain unpaid at least 180 days 
301.5   after the dates they were due; 
301.6      (2) the taxpayer's total liability for the taxes and fees, 
301.7   including penalties, interest, and other charges, is at least 
301.8   $5,000; and 
301.9      (3) a tax lien has been filed or a judgment for the 
301.10  liability has been entered against the taxpayer before notice is 
301.11  given under subdivision 3. 
301.12     (c) In the case of listed taxpayers that are business 
301.13  entities, the commissioner may also list the names of 
301.14  responsible persons assessed pursuant to section 270.101 for 
301.15  listed liabilities, who are not protected from publication by 
301.16  subdivision 2, and for whom the requirements of paragraph (b) 
301.17  are satisfied with regard to the personal assessment. 
301.18     (d) Before any list is published under this section, the 
301.19  commissioner of revenue must certify in writing that each of the 
301.20  conditions for publication as provided in this section has been 
301.21  satisfied, and that procedures were followed to ensure the 
301.22  accuracy of the list and notice was given to the affected 
301.23  taxpayers. 
301.24     Subd. 2.  [REQUIRED AND EXCLUDED TAXPAYERS.] (a) The 
301.25  commissioner may publish lists of some or all of the taxpayers 
301.26  described in subdivision 1.  A list must include the taxpayers 
301.27  with the largest unpaid liabilities of the kind used to define 
301.28  the list, subject to the limitations of paragraphs (b) and (c). 
301.29     (b) For the purposes of this section, a tax or fee is not 
301.30  delinquent if: 
301.31     (1) an administrative or court action contesting the amount 
301.32  or validity of the taxpayer's liability has been filed or served 
301.33  and is unresolved at the time when notice would be given under 
301.34  subdivision 3; 
301.35     (2) an appeal period to contest the liability has not 
301.36  expired; or 
302.1      (3) the liability is subject to a payment agreement and 
302.2   there is no delinquency in the payments required under the 
302.3   agreement. 
302.4      (c) Unpaid liabilities are not subject to publication if: 
302.5      (1) the commissioner is in the process of reviewing or 
302.6   adjusting the liability; 
302.7      (2) the taxpayer is a debtor in a bankruptcy proceeding and 
302.8   the automatic stay is in effect; 
302.9      (3) the commissioner has been notified that the taxpayer is 
302.10  deceased; or 
302.11     (4) the time period for collecting the taxes or fees has 
302.12  expired. 
302.13     Subd. 3.  [NOTICE TO TAXPAYER.] (a) At least 30 days before 
302.14  publishing the name of a delinquent taxpayer, the commissioner 
302.15  shall mail a written notice to the taxpayer, detailing the 
302.16  amount and nature of each liability and the intended publication 
302.17  of the information listed in subdivision 4 related to the 
302.18  liability.  The notice must be mailed by first class and 
302.19  certified mail addressed to the last known address of the 
302.20  taxpayer.  The notice must include information regarding the 
302.21  exceptions listed in subdivision 2 and must state that the 
302.22  taxpayer's information will not be published if the taxpayer 
302.23  pays the delinquent obligation, enters into an agreement to pay, 
302.24  or provides information establishing that subdivision 2 
302.25  prohibits publication of the taxpayer's name. 
302.26     (b) After at least 30 days has elapsed since the notice was 
302.27  mailed and the delinquent tax or fee has not been paid and the 
302.28  taxpayer has not proved to the commissioner that subdivision 2 
302.29  prohibits publication, the commissioner may publish in a list of 
302.30  delinquent taxpayers the information about the taxpayer that is 
302.31  listed in subdivision 4. 
302.32     Subd. 4.  [FORM OF LIST.] The list may be published by any 
302.33  medium or method.  The list must contain the name, address, type 
302.34  of tax or fee, and period for which payment is due for each 
302.35  liability, including penalties, interest, and other charges owed 
302.36  by each listed delinquent taxpayer. 
303.1      Subd. 5.  [REMOVAL FROM LIST.] The commissioner shall 
303.2   remove the name of a taxpayer from the list of delinquent 
303.3   taxpayers after the commissioner receives written notice of and 
303.4   verifies any of the following facts about the liability in 
303.5   question: 
303.6      (1) the taxpayer has contacted the commissioner and 
303.7   arranged resolution of the liability; 
303.8      (2) an active bankruptcy proceeding has been initiated for 
303.9   the liability; 
303.10     (3) a bankruptcy proceeding concerning the liability has 
303.11  resulted in discharge of the liability; or 
303.12     (4) the commissioner has written off the liability. 
303.13     Subd. 6.  [NAMES PUBLISHED IN ERROR.] If the commissioner 
303.14  publishes a name under subdivision 1 in error, the taxpayer 
303.15  whose name was erroneously published has a right to request a 
303.16  retraction and apology.  If the taxpayer so requests, the 
303.17  commissioner shall publish a retraction and apology 
303.18  acknowledging that the taxpayer's name was published in error.  
303.19  The retraction and apology must appear in the same medium and 
303.20  the same format as the original list that contained the name 
303.21  listed in error. 
303.22     Subd. 7.  [PAYMENT OF DAMAGES.] Actions against the 
303.23  commissioner of revenue or the state of Minnesota arising out of 
303.24  the implementation of this program must be brought under section 
303.25  270.276.  If an action results in damages awarded to a taxpayer, 
303.26  the damages must be paid out of the department of revenue 
303.27  operating budget rather than in accordance with section 3.736, 
303.28  subdivision 7. 
303.29     Subd. 8.  [EXPIRATION DATE.] The program authorized under 
303.30  this section terminates on June 30, 2002. 
303.31     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
303.32  following final enactment for all liabilities owing on that date 
303.33  for which the statute of limitations for collection has not 
303.34  expired, and all liabilities arising after that date. 
303.35     Sec. 9.  Minnesota Statutes 2000, section 297F.04, 
303.36  subdivision 1, is amended to read: 
304.1      Subdivision 1.  [POWERS OF COMMISSIONER.] The commissioner 
304.2   may revoke or suspend the license or licenses of any distributor 
304.3   or subjobber for violation of this chapter, any other act 
304.4   applicable to the sale of cigarettes or tobacco products, or any 
304.5   rule promulgated by the commissioner, in furtherance of this 
304.6   chapter.  The commissioner may also revoke, cancel, or suspend 
304.7   the license or licenses of any distributor or subjobber for 
304.8   violation of sections 325D.30 to 325D.42. 
304.9      Sec. 10.  Minnesota Statutes 2000, section 297F.13, 
304.10  subdivision 4, is amended to read: 
304.11     Subd. 4.  [RETAILER AND SUBJOBBER TO PRESERVE PURCHASE 
304.12  INVOICES.] Every retailer and subjobber shall procure itemized 
304.13  invoices of all cigarettes or tobacco products purchased.  
304.14     The retailer and subjobber shall preserve a legible copy of 
304.15  each invoice for one year from the date of the invoice.  The 
304.16  retailer and subjobber shall preserve copies of the invoices at 
304.17  each retail location or at a central location provided that the 
304.18  invoice must be produced and made available at a retail location 
304.19  within one hour when requested by the commissioner or duly 
304.20  authorized agents and employees.  Copies should be numbered and 
304.21  kept in chronological order. 
304.22     To determine whether the business is in compliance with the 
304.23  provisions of this chapter and sections 325D.30 to 325D.42, at 
304.24  any time during usual business hours, the commissioner, or duly 
304.25  authorized agents and employees, may enter any place of business 
304.26  of a retailer or subjobber without a search warrant and inspect 
304.27  the premises, the records required to be kept under this 
304.28  chapter, and the packages of cigarettes, tobacco products, and 
304.29  vending devices contained on the premises. 
304.30     Sec. 11.  Minnesota Statutes 2000, section 325D.33, is 
304.31  amended by adding a subdivision to read: 
304.32     Subd. 2a.  [COMMISSIONER.] "Commissioner" means the 
304.33  commissioner of commerce or the commissioner's designated 
304.34  representative.  
304.35     Sec. 12.  Minnesota Statutes 2000, section 325D.33, 
304.36  subdivision 8, is amended to read: 
305.1      Subd. 8.  [PENALTIES.] (a) A retailer who sells cigarettes 
305.2   for less than a legal retail price may be assessed a penalty in 
305.3   the full amount of three times the difference between the actual 
305.4   selling price and a legal price under sections 325D.30 to 
305.5   325D.42.  This penalty may be collected by the commissioner 
305.6   under the authorities given the commissioner of revenue in 
305.7   chapters chapter 270 and 297F, and the penalty shall bear 
305.8   interest at the rate prescribed by section 270.75, subdivision 5.
305.9      (b) A wholesaler who sells cigarettes for less than a legal 
305.10  price may be assessed a penalty in the full amount of three 
305.11  times the difference between the actual selling price and the 
305.12  legal price under sections 325D.30 to 325D.42.  This penalty may 
305.13  be collected by the commissioner under the authorities given the 
305.14  commissioner of revenue in chapters chapter 270 and 297F, and 
305.15  the penalty shall bear interest at the rate prescribed by 
305.16  section 270.75, subdivision 5.  
305.17     (c) A retailer who engages in a plan, scheme, or device 
305.18  with a wholesaler to purchase cigarettes at a price which the 
305.19  retailer knows to be less than a legal price may be assessed a 
305.20  penalty in the full amount of three times the difference between 
305.21  the actual purchase price and the legal price under sections 
305.22  325D.30 to 325D.42.  A retailer that coerces or requires a 
305.23  wholesaler to sell cigarettes at a price which the retailer 
305.24  knows to be less than a legal price may be assessed a penalty in 
305.25  the full amount of three times the difference between the actual 
305.26  purchase price and the legal price.  These penalties may be 
305.27  collected by the commissioner under the authorities given the 
305.28  commissioner of revenue in chapters chapter 270 and 297F, and 
305.29  the penalties shall bear interest at the rate prescribed by 
305.30  section 270.75, subdivision 5. 
305.31     For purposes of this subdivision, a retailer is presumed to 
305.32  know that a purchase price is less than a legal price if any of 
305.33  the following have been done: 
305.34     (1) the commissioner has published the legal price in the 
305.35  Minnesota State Register; 
305.36     (2) the commissioner has provided written notice to the 
306.1   retailer of the legal price; 
306.2      (3) the commissioner has provided written notice to the 
306.3   retailer that the retailer is purchasing cigarettes for less 
306.4   than a legal price; 
306.5      (4) the commissioner has issued a written order to the 
306.6   retailer to cease and desist from purchases of cigarettes for 
306.7   less than a legal price; or 
306.8      (5) there is evidence that the retailer has knowledge of, 
306.9   or has participated in, efforts to disguise or misrepresent the 
306.10  actual purchase price as equal to or more than a legal price, 
306.11  when it is actually less than a legal price. 
306.12     In any proceeding arising under this subdivision, the 
306.13  commissioner shall have the burden of providing by a reasonable 
306.14  preponderance of the evidence that the facts necessary to 
306.15  establish the presumption set forth in this section exist, or 
306.16  that the retailer had knowledge that a purchase price was less 
306.17  than the legal price. 
306.18     (d) The commissioner may not assess penalties against any 
306.19  wholesaler, retailer, or combination of wholesaler and retailer, 
306.20  which are greater than three times the difference between the 
306.21  actual price and the legal price under sections 325D.30 to 
306.22  325D.42. 
306.23     Sec. 13.  Minnesota Statutes 2000, section 325D.405, is 
306.24  amended to read: 
306.25     325D.405 [INVESTIGATIONS.] 
306.26     The commissioner or duly authorized agents may conduct 
306.27  investigations to determine compliance with the provisions of 
306.28  sections 325D.30 to 325D.42 and, in connection with such 
306.29  investigations, the commissioner and duly authorized agents have 
306.30  all the powers conferred upon the commissioner by section 270.06 
306.31  45.027. 
306.32     Sec. 14.  Minnesota Statutes 2000, section 325D.415, is 
306.33  amended to read: 
306.34     325D.415 [CIGARETTE DISTRIBUTOR FEES.] 
306.35     A cigarette distributor as defined in section 297F.01, 
306.36  subdivision 4, shall pay to the commissioner an annual fee as 
307.1   follows:  
307.2      (1) a fee of $2,500 is due from those distributors whose 
307.3   annual cigarette tax collections exceed $2,000,000; and 
307.4      (2) a fee of $1,200 is due from those distributors whose 
307.5   annual cigarette tax collections are $2,000,000 or less. 
307.6      The annual fee must be paid by December 31 of each year.  
307.7   If the fee is not paid when due, the commissioner shall revoke 
307.8   or refuse to issue or renew the license under chapter 297F.  The 
307.9   annual fee must be deposited into the general fund. 
307.10     Sec. 15.  Minnesota Statutes 2000, section 345.41, is 
307.11  amended to read: 
307.12     345.41 [REPORT OF ABANDONED PROPERTY.] 
307.13     (a) Every person holding funds or other property, tangible 
307.14  or intangible, presumed abandoned under sections 345.31 to 
307.15  345.60 shall report annually to the commissioner with respect to 
307.16  the property as hereinafter provided. 
307.17     (b) The report shall be verified and shall include: 
307.18     (1) except with respect to traveler's checks and money 
307.19  orders, the name, if known, and last known address, if any, of 
307.20  each person appearing from the records of the holder to be the 
307.21  owner of any property of the value of $100 or more presumed 
307.22  abandoned under sections 345.31 to 345.60; 
307.23     (2) in case of unclaimed funds of life insurance 
307.24  corporations, the full name of the policyholder, insured or 
307.25  annuitant and that person's last known address according to the 
307.26  life insurance corporation's records; 
307.27     (3) the nature and identifying number, if any, or 
307.28  description of the property and the amount appearing from the 
307.29  records to be due, except that items of value under $100 each 
307.30  may be reported in aggregate; 
307.31     (4) the date when the property became payable, demandable 
307.32  or returnable, and the date of the last transaction with the 
307.33  owner with respect to the property; and 
307.34     (5) other information which the commissioner prescribes by 
307.35  rule as necessary for the administration of sections 345.31 to 
307.36  345.60. 
308.1      (c) If the person holding property presumed abandoned is a 
308.2   successor to other persons who previously held the property for 
308.3   the owner, or if the holder has changed a name while holding the 
308.4   property, the holder shall file with the report all prior known 
308.5   names and addresses of each holder of the property. 
308.6      (d) The report shall be filed before November 1 of each 
308.7   year as of June 30 next preceding, but the report of life 
308.8   insurance corporations shall be filed before October 1 of each 
308.9   year as of December 31 next preceding.  The commissioner may 
308.10  postpone the reporting date upon written request by any person 
308.11  required to file a report. 
308.12     (e) Not more than 120 days before filing the report 
308.13  required by this section, the holder in possession of property 
308.14  abandoned and subject to custody as unclaimed property under 
308.15  this chapter shall send written notice to the presumed owner at 
308.16  that owner's last known address informing the owner that the 
308.17  holder is in possession of property subject to this chapter and 
308.18  advising the owner of the steps necessary to prevent abandonment 
308.19  if: 
308.20     (1) the holder has in its records an address for the 
308.21  presumed owner that the holder's records do not disclose to be 
308.22  inaccurate; 
308.23     (2) the claim of the apparent owner is not barred by the 
308.24  statute of limitations; and 
308.25     (3) the property has a value of $100 or more. 
308.26     (f) Verification, if made by a partnership, shall be 
308.27  executed by a partner; if made by an unincorporated association 
308.28  or private corporation, by an officer, and if made by a public 
308.29  corporation, by its chief fiscal officer. 
308.30     (g) Holders of property described in section 345.32 shall 
308.31  not impose any charges against property which is described in 
308.32  section 345.32, clause (a), (b) or (c). 
308.33     (h) Any person who has possession of property which the 
308.34  person has reason to believe will be reportable in the future as 
308.35  unclaimed property may, with the permission of the commissioner, 
308.36  report and deliver such property prior to the date required for 
309.1   reporting in accordance with this section. 
309.2      (i) Before the last day of each calendar year, the 
309.3   commissioner of revenue shall report to the commissioner as 
309.4   unclaimed property under this section any uncashed checks or 
309.5   warrants for overpayments of taxes that were issued more than 
309.6   two years preceding the date of the report. 
309.7      <b>[EFFECTIVE DATE.]</b> This section is effective August 1, 2001. 
309.8      Sec. 16.  [471.699] [EXTENSION OF FINANCIAL REPORT FILING 
309.9   TIME LIMITS; DISASTER AREAS.] 
309.10     The time limit by which financial reports are required to 
309.11  be filed under section 471.697 or 471.698, is extended by 90 
309.12  days for any city or town located in whole or in part within a 
309.13  presidentially declared disaster area, if the time period for 
309.14  which the area is so designated includes at least one of the 30 
309.15  days immediately preceding the time limit. 
309.16     <b>[EFFECTIVE DATE.]</b> This section is effective for disaster 
309.17  declarations made after April 15, 2001. 
309.18     Sec. 17.  Minnesota Statutes 2000, section 609.75, 
309.19  subdivision 1, is amended to read: 
309.20     Subdivision 1.  [LOTTERY.] (a) A lottery is a plan which 
309.21  provides for the distribution of money, property or other reward 
309.22  or benefit to persons selected by chance from among participants 
309.23  some or all of whom have given a consideration for the chance of 
309.24  being selected.  A participant's payment for use of a 900 
309.25  telephone number or another means of communication that results 
309.26  in payment to the sponsor of the plan constitutes consideration 
309.27  under this paragraph. 
309.28     (b) An in-package chance promotion is not a lottery if all 
309.29  of the following are met:  
309.30     (1) participation is available, free and without purchase 
309.31  of the package, from the retailer or by mail or toll-free 
309.32  telephone request to the sponsor for entry or for a game piece; 
309.33     (2) the label of the promotional package and any related 
309.34  advertising clearly states any method of participation and the 
309.35  scheduled termination date of the promotion; 
309.36     (3) the sponsor on request provides a retailer with a 
310.1   supply of entry forms or game pieces adequate to permit free 
310.2   participation in the promotion by the retailer's customers; 
310.3      (4) the sponsor does not misrepresent a participant's 
310.4   chances of winning any prize; 
310.5      (5) the sponsor randomly distributes all game pieces and 
310.6   maintains records of random distribution for at least one year 
310.7   after the termination date of the promotion; 
310.8      (6) all prizes are randomly awarded if game pieces are not 
310.9   used in the promotion; and 
310.10     (7) the sponsor provides on request of a state agency a 
310.11  record of the names and addresses of all winners of prizes 
310.12  valued at $100 or more, if the request is made within one year 
310.13  after the termination date of the promotion.  
310.14     (c) Except as provided by section 349.40, acts in this 
310.15  state in furtherance of a lottery conducted outside of this 
310.16  state are included notwithstanding its validity where conducted. 
310.17     (d) The distribution of property, or other reward or 
310.18  benefit by an employer to persons selected by chance from among 
310.19  participants who have made a contribution through a payroll or 
310.20  pension deduction campaign to a registered combined charitable 
310.21  organization, within the meaning of section 309.501, as a 
310.22  precondition to the chance of being selected, is not a lottery 
310.23  if: 
310.24     (1) all of the persons eligible to be selected are employed 
310.25  by or retirees of the employer; and 
310.26     (2) the cost of the property or other reward or benefit 
310.27  distributed and all costs associated with the distribution are 
310.28  borne by the employer; and 
310.29     (3) the total amount actually expended by the employer to 
310.30  obtain the property or other rewards or benefits distributed by 
310.31  the employer during the calendar year does not exceed $500. 
310.32     Sec. 18.  [TRANSFER OF RESPONSIBILITIES.] 
310.33     Minnesota Statutes, section 15.039, subdivisions 1 to 6 and 
310.34  8, apply to the transfer of responsibilities made by this 
310.35  article.  Consistent with Minnesota Statutes, section 15.039, 
310.36  subdivision 6, the commissioner of finance shall transfer a 
311.1   portion of the general fund appropriations in fiscal years 2002 
311.2   and 2003 for the department of revenue to the department of 
311.3   commerce for the enforcement and administration of Minnesota 
311.4   Statutes, sections 325D.30 to 325D.42. 
311.5      Sec. 19.  [REPEALER.] 
311.6      (a) Minnesota Statutes 2000, section 16A.1521, is repealed 
311.7   effective the day following final enactment. 
311.8      (b) Minnesota Statutes 2000, section 325D.33, subdivision 
311.9   5, is repealed effective the day following final enactment.