1.1                          A bill for an act 
  1.2             relating to the financing and operation of state and 
  1.3             local government; changing appropriations to reflect 
  1.4             forecast changes; reducing appropriations for the 
  1.5             fiscal years ending June 30, 2002 and 2003; canceling 
  1.6             balances and appropriations and transferring balances 
  1.7             to the general fund in order to avert a deficit; 
  1.8             authorizing the sale of state bonds; modifying 
  1.9             education levies and aids; modifying provisions 
  1.10            relating to income, franchise, sales, property, 
  1.11            cigarette and tobacco products, taconite, and other 
  1.12            taxes, and tax administration; imposing cigarette and 
  1.13            tobacco products floor stock taxes; modifying property 
  1.14            tax and other state aids and credits; modifying tax 
  1.15            court jurisdiction; changing provisions relating to 
  1.16            Hennepin county and Ramsey county environmental 
  1.17            response funds; authorizing cities and counties to 
  1.18            impose taxes, issue debt, and exercise other powers; 
  1.19            providing local development incentives; modifying tax 
  1.20            increment financing and public finance provisions; 
  1.21            transferring duties of the state treasurer; requiring 
  1.22            payment of prevailing wages; modifying housing with 
  1.23            services establishment provisions; modifying provider 
  1.24            surcharges; modifying medical assistance and 
  1.25            MinnesotaCare provisions; modifying certain payments 
  1.26            to counties; modifying provisions relating to 
  1.27            emissions reduction projects by public utilities; 
  1.28            providing for a crime victim ombudsman; providing for 
  1.29            legislative approval of certain collective bargaining 
  1.30            agreements, arbitration awards, and state compensation 
  1.31            provisions; providing an early retirement incentive; 
  1.32            authorizing extra unemployment benefits; changing 
  1.33            certain employer fees and assessments; providing for 
  1.34            eminent domain proceedings; changing water quality 
  1.35            permit fees; authorizing school district fund 
  1.36            transfers; modifying the length of the school year; 
  1.37            providing exceptions from hiring freeze; repealing 
  1.38            contract moratorium; changing provisions relating to 
  1.39            data privacy; changing lawful purpose for purposes of 
  1.40            lawful gambling; imposing a fee on telecommunications 
  1.41            services; changing or requiring certain reports, 
  1.42            studies, and recommendations; appropriating money; 
  1.43            amending Minnesota Statutes 2000, sections 3.855, 
  1.44            subdivision 2; 7.26; 13.871, subdivision 5, as 
  1.45            amended; 16A.27, subdivision 5; 16A.28, subdivision 6; 
  1.46            16A.626; 35.08; 49.24, subdivisions 13, 16; 60D.20, 
  2.1             subdivision 2; 62J.692, subdivision 4, as amended; 
  2.2             84A.11; 84A.23, subdivision 4; 84A.33, subdivision 4; 
  2.3             84A.40; 85A.05, subdivision 2; 94.53; 115A.557, 
  2.4             subdivision 1; 115A.58, subdivision 2; 116.16, 
  2.5             subdivision 4; 116.17, subdivision 2; 117.075; 
  2.6             118A.05, subdivision 5; 120A.41; 124D.69, by adding a 
  2.7             subdivision; 125A.65, subdivisions 1, 3, 8, 9; 
  2.8             125B.25, subdivision 9; 126C.44; 126C.72, subdivision 
  2.9             2; 127A.40; 127A.45, subdivisions 2, 3, 10, 13, 14, 
  2.10            16, by adding a subdivision; 135A.15, subdivision 1, 
  2.11            as amended; 136A.08, subdivision 3; 144D.01, 
  2.12            subdivision 4; 161.05, subdivision 3; 161.07; 167.50, 
  2.13            subdivision 2; 174.51, subdivision 2; 176.181, 
  2.14            subdivision 2; 176.581; 190.11; 241.08, subdivision 1; 
  2.15            241.10; 241.13, subdivision 1; 244.19, subdivision 7; 
  2.16            246.15, subdivision 1; 246.18, subdivision 1; 246.21; 
  2.17            256.9657, subdivision 1, as amended; 256B.19, 
  2.18            subdivision 1, as amended; 256B.69, subdivision 5a, as 
  2.19            amended; 256E.06, subdivision 3; 256I.04, subdivision 
  2.20            2a; 256L.12, subdivision 9, as amended; 268.035, 
  2.21            subdivision 24; 268.051, subdivision 8; 270.063, 
  2.22            subdivision 4; 270.60, subdivision 4; 270B.01, 
  2.23            subdivision 8; 270B.02, subdivision 4; 270B.14, 
  2.24            subdivision 8; 272.02, subdivisions 15, 42, by adding 
  2.25            subdivisions; 272.0212, subdivisions 1, 4, by adding a 
  2.26            subdivision; 273.11, subdivision 16, by adding a 
  2.27            subdivision; 273.125, subdivision 4; 273.1398, 
  2.28            subdivision 3; 275.08, subdivision 1d; 278.01, 
  2.29            subdivision 1; 279.01, subdivision 3; 280.29; 287.01, 
  2.30            subdivision 3; 289A.19, subdivision 1; 290.06, by 
  2.31            adding a subdivision; 290.067, subdivisions 1, 2a; 
  2.32            290.081; 290.0922, subdivision 1; 290.17, subdivisions 
  2.33            2, 3; 290.191, subdivision 4; 290A.03, subdivision 3; 
  2.34            293.06; 295.53, subdivision 1; 295.57, by adding a 
  2.35            subdivision; 296A.18, subdivision 8; 297A.66, by 
  2.36            adding a subdivision; 297A.67, subdivision 5, by 
  2.37            adding subdivisions; 297A.68, by adding a subdivision; 
  2.38            297A.71, by adding subdivisions; 297F.05, subdivisions 
  2.39            1, 3, 4; 297F.08, subdivision 7; 297F.09, subdivision 
  2.40            2; 297G.07, subdivision 1; 297H.06, subdivision 2; 
  2.41            297I.05, subdivision 11; 298.27; 298.28, subdivisions 
  2.42            5, 9b, 11; 352.05; 352B.03, subdivision 2; 354.06, 
  2.43            subdivision 3; 354.52, subdivision 5; 373.01, 
  2.44            subdivision 3; 383A.81, by adding subdivisions; 
  2.45            383B.81, by adding subdivisions; 385.05; 410.32; 
  2.46            412.301; 465.73; 469.012, subdivision 1; 469.034, 
  2.47            subdivision 2; 469.102, subdivision 2; 469.153, by 
  2.48            adding a subdivision; 469.155, subdivisions 3, 4, 8; 
  2.49            469.157; 473.251; 473.252, subdivision 3; 473.39, by 
  2.50            adding a subdivision; 475.67, subdivision 13; 475A.04; 
  2.51            475A.06, subdivision 2; 477A.011, subdivision 20; 
  2.52            481.01; 490.123, subdivision 2; 525.161; 525.841; 
  2.53            611A.371, subdivision 1, as amended; 611A.373, 
  2.54            subdivisions 1, as amended, 2, as amended; 611A.72, as 
  2.55            amended; 611A.73, subdivision 2, as amended; 611A.74, 
  2.56            subdivisions 2, as amended, 3, as amended, 4, as 
  2.57            amended, 5, as amended, 6, as amended; 641.23; 
  2.58            Minnesota Statutes 2001 Supplement, sections 35.09, 
  2.59            subdivision 3; 69.021, subdivision 5; 122A.21; 
  2.60            123B.54, as amended; 124D.11, subdivision 9; 124D.86, 
  2.61            subdivision 3; 126C.17, subdivisions 7, 7a; 126C.21, 
  2.62            subdivision 4; 126C.40, subdivision 1; 126C.43, 
  2.63            subdivision 3; 126C.48, subdivision 8; 127A.45, 
  2.64            subdivision 14a; 216B.1692, subdivisions 2, 3, 6; 
  2.65            241.021, subdivision 4; 256.01, subdivision 2, as 
  2.66            amended; 256.022, subdivision 1, as amended; 256B.057, 
  2.67            subdivision 9; 256B.0625, subdivision 13, as amended; 
  2.68            268.022, subdivision 1; 270.69, subdivision 2; 
  2.69            270.691, subdivision 8; 270B.02, subdivision 3; 
  2.70            270B.08, subdivision 2; 271.01, subdivision 5; 271.21, 
  2.71            subdivision 2; 272.02, subdivision 22; 272.028; 
  3.1             273.121; 273.124, subdivision 11; 273.13, subdivisions 
  3.2             22, 24; 273.1384, subdivision 2; 273.1392; 273.1398, 
  3.3             subdivision 4c; 275.025, subdivision 2; 275.065, 
  3.4             subdivision 3; 275.70, subdivision 5; 275.71, 
  3.5             subdivisions 2, 3, 4; 275.74, subdivision 2; 276.11, 
  3.6             subdivision 1; 289A.02, subdivision 7; 289A.20, 
  3.7             subdivisions 2, 4; 289A.60, subdivision 2; 290.01, 
  3.8             subdivisions 19, 19b, 31; 290.0675, subdivisions 1, 3; 
  3.9             290.091, subdivision 2; 290.0921, subdivisions 2, 6; 
  3.10            290.21, subdivision 4; 290A.03, subdivision 15; 
  3.11            290A.04, subdivision 2h; 295.60, subdivisions 2, 7, by 
  3.12            adding subdivisions; 297A.61, subdivisions 3, 26; 
  3.13            297A.66, subdivision 1; 297A.67, subdivisions 2, 25, 
  3.14            29; 297A.68, subdivision 3; 297A.70, subdivision 3; 
  3.15            297A.71, subdivision 23; 297A.995, subdivision 4; 
  3.16            298.01, subdivisions 3b, 4c; 298.225, subdivision 1; 
  3.17            298.28, subdivisions 4, 6, 9a, 10; 298.296, 
  3.18            subdivision 2; 299D.03, subdivision 5; 349.12, 
  3.19            subdivision 25; 469.1734, subdivision 6; 469.1763, 
  3.20            subdivision 6; 469.1792, subdivisions 1, 2; 469.1813, 
  3.21            subdivision 6; 475.58, subdivision 1; 477A.011, 
  3.22            subdivision 36; 477A.013, subdivision 9; 477A.03, 
  3.23            subdivision 2; 477A.07, subdivisions 1, 3; 611A.372, 
  3.24            as amended; 611A.74, subdivision 1, as amended; Laws 
  3.25            1971, chapter 773, section 1, subdivision 2, as 
  3.26            amended; Laws 1989, chapter 211, section 8, as 
  3.27            amended; Laws 1990, chapter 604, article 6, section 9, 
  3.28            subdivision 1, as amended; Laws 1993, chapter 375, 
  3.29            article 5, section 42; Laws 1995, chapter 264, article 
  3.30            5, section 45, subdivision 1, as amended; Laws 1996, 
  3.31            chapter 471, article 2, section 29; Laws 1998, chapter 
  3.32            389, article 8, section 37, subdivision 2; Laws 2001, 
  3.33            First Special Session chapter 3, article 1, section 
  3.34            17, subdivisions 2, 3, as amended, 4, 7, as amended, 
  3.35            9, as amended; Laws 2001, First Special Session 
  3.36            chapter 3, article 1, section 19, subdivisions 3, as 
  3.37            amended, 5, as amended; Laws 2001, First Special 
  3.38            Session chapter 3, article 2, section 15, subdivisions 
  3.39            3, as amended, 4, 6; Laws 2001, First Special Session 
  3.40            chapter 3, article 3, section 9, subdivisions 5, 7; 
  3.41            Laws 2001, First Special Session chapter 3, article 4, 
  3.42            section 5, subdivisions 2, as amended, 3, 4, as 
  3.43            amended; Laws 2001, First Special Session chapter 4, 
  3.44            article 2, section 31; Laws 2001, First Special 
  3.45            Session chapter 5, article 2, section 29, subdivision 
  3.46            2, as amended; Laws 2001, First Special Session 
  3.47            chapter 5, article 3, section 96; Laws 2001, First 
  3.48            Special Session chapter 5, article 9, section 3, the 
  3.49            effective date; Laws 2001, First Special Session 
  3.50            chapter 5, article 12, section 11, the effective date; 
  3.51            Laws 2001, First Special Session chapter 5, article 
  3.52            12, section 82, the effective date; Laws 2001, First 
  3.53            Special Session chapter 5, article 12, section 95; 
  3.54            Laws 2001, First Special Session chapter 6, article 1, 
  3.55            section 54, subdivisions 2, as amended, 4, as amended, 
  3.56            5, as amended, 6, as amended, 7, as amended; Laws 
  3.57            2001, First Special Session chapter 6, article 2, 
  3.58            section 77, subdivisions 4, as amended, 5, as amended, 
  3.59            6, 8, as amended, 11, as amended, 15, as amended, 18, 
  3.60            as amended; Laws 2001, First Special Session chapter 
  3.61            6, article 3, section 21, subdivisions 2, as amended, 
  3.62            3, as amended, 4, as amended, 5, as amended, 7, as 
  3.63            amended; Laws 2001, First Special Session chapter 6, 
  3.64            article 4, section 27, subdivisions 2, as amended, 3, 
  3.65            as amended, 5, as amended; Laws 2001, First Special 
  3.66            Session chapter 6, article 5, section 13, subdivisions 
  3.67            3, 5, as amended; Laws 2001, First Special Session 
  3.68            chapter 6, article 7, section 14, as amended; Laws 
  3.69            2001, First Special Session chapter 8, article 11, 
  3.70            section 14, as amended; Laws 2001, First Special 
  3.71            Session chapter 8, article 11, section 17; Laws 2001, 
  4.1             First Special Session chapter 9, article 2, section 
  4.2             74; Laws 2001, First Special Session chapter 9, 
  4.3             article 19, section 15; Laws 2001, First Special 
  4.4             Session chapter 9, article 19, section 16; Laws 2001, 
  4.5             First Special Session chapter 9, article 19, section 
  4.6             17; Laws 2002, chapter 220, article 2, section 14; 
  4.7             Laws 2002, chapter 220, article 5, section 1; Laws 
  4.8             2002, chapter 220, article 5, section 2, subdivisions 
  4.9             1, 2; Laws 2002, chapter 220, article 6, section 1; 
  4.10            Laws 2002, chapter 220, article 6, section 3, 
  4.11            subdivision 2; Laws 2002, chapter 220, article 7, 
  4.12            section 1; Laws 2002, chapter 220, article 7, section 
  4.13            4, subdivisions 1, 5; Laws 2002, chapter 220, article 
  4.14            7, section 34; Laws 2002, chapter 220, article 8, 
  4.15            section 15; Laws 2002, chapter 220, article 9, section 
  4.16            2, subdivision 4; Laws 2002, chapter 220, article 10, 
  4.17            section 17; Laws 2002, chapter 220, article 10, 
  4.18            section 36; Laws 2002, chapter 220, article 10, 
  4.19            section 38, subdivisions 2, 3; Laws 2002, chapter 220, 
  4.20            article 10, section 39; Laws 2002, chapter 220, 
  4.21            article 13, section 7; Laws 2002, chapter 220, article 
  4.22            13, section 9, subdivision 2; Laws 2002, chapter 220, 
  4.23            article 17, section 2, subdivision 6; proposing coding 
  4.24            for new law in Minnesota Statutes, chapters 126C; 
  4.25            144D; 177; 237; 272; 469; 473; 477A; repealing 
  4.26            Minnesota Statutes 2000, sections 7.21; 272.02, 
  4.27            subdivision 40; 278.01, subdivision 4; 290.01, 
  4.28            subdivisions 19g, 32; 290.0921, subdivision 5; 295.44; 
  4.29            297A.68, subdivision 26; 383A.80, subdivision 4; 
  4.30            383B.80, subdivision 4; 611A.373, subdivision 3, as 
  4.31            added; 611A.73, subdivision 6, as added; Minnesota 
  4.32            Statutes 2001 Supplement, sections 134.47, subdivision 
  4.33            3; 297A.61, subdivision 31; Laws 2001, First Special 
  4.34            Session chapter 5, article 3, section 88; Laws 2002, 
  4.35            chapter 220, article 6, section 4; Laws 2002, chapter 
  4.36            220, article 7, sections 5, 32, 33; Laws 2002, chapter 
  4.37            220, article 10, section 37; Minnesota Rules, parts 
  4.38            8130.1400; 8130.2100; 8130.2350; 8130.2600; 8130.3000; 
  4.39            8130.3850; 8130.5000. 
  4.40  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  4.41                             ARTICLE 1
  4.42                    EDUCATION AID PAYMENT DELAY
  4.43     Section 1.  Minnesota Statutes 2001 Supplement, section 
  4.44  124D.11, subdivision 9, is amended to read: 
  4.45     Subd. 9.  [PAYMENT OF AIDS TO CHARTER SCHOOLS.] (a) 
  4.46  Notwithstanding section 127A.45, subdivision 3, aid payments for 
  4.47  the current fiscal year to a charter school not in its first 
  4.48  year of operation shall be of an equal amount on each of the 23 
  4.49  payment dates.  A charter school in its first year of operation 
  4.50  shall receive, on its first payment date, ten percent of its 
  4.51  cumulative amount guaranteed for the year and 22 payments of an 
  4.52  equal amount thereafter the sum of which shall be 90 percent of 
  4.53  the cumulative amount guaranteed. 
  4.54     (b) Notwithstanding paragraph (a), for a charter school 
  4.55  ceasing operation prior to the end of a school year, 90 85 
  5.1   percent of the amount due for the school year may be paid to the 
  5.2   school after audit of prior fiscal year and current fiscal year 
  5.3   pupil counts. 
  5.4      (c) Notwithstanding section 127A.45, subdivision 3, and 
  5.5   paragraph (a), 90 85 percent of the start-up cost aid under 
  5.6   subdivision 8 shall be paid within 45 days after the first day 
  5.7   of student attendance for that school year. 
  5.8      (d) In order to receive state aid payments under this 
  5.9   subdivision, a charter school in its first three years of 
  5.10  operation must submit a quarterly report to the department of 
  5.11  children, families, and learning.  The report must list each 
  5.12  student by grade, show the student's start and end dates, if 
  5.13  any, with the charter school, and for any student participating 
  5.14  in a learning year program, the report must list the hours and 
  5.15  times of learning year activities.  The report must be submitted 
  5.16  not more than two weeks after the end of the calendar quarter to 
  5.17  the department.  The department must develop a Web-based 
  5.18  reporting form for charter schools to use when submitting 
  5.19  enrollment reports.  A charter school in its fourth and 
  5.20  subsequent year of operation must submit enrollment information 
  5.21  to the department in the form and manner requested by the 
  5.22  department. 
  5.23     Sec. 2.  Minnesota Statutes 2000, section 127A.45, 
  5.24  subdivision 2, is amended to read: 
  5.25     Subd. 2.  [DEFINITIONS.] (a) The term "other district 
  5.26  receipts" means payments by county treasurers pursuant to 
  5.27  section 276.10, apportionments from the school endowment fund 
  5.28  pursuant to section 127A.33, apportionments by the county 
  5.29  auditor pursuant to section 127A.34, subdivision 2, and payments 
  5.30  to school districts by the commissioner of revenue pursuant to 
  5.31  chapter 298.  
  5.32     (b) The term "cumulative amount guaranteed" means the 
  5.33  product of 
  5.34     (1) the cumulative disbursement percentage shown in 
  5.35  subdivision 3; times 
  5.36     (2) the sum of 
  6.1      (i) 90 85 percent of the estimated aid and credit 
  6.2   entitlements paid according to subdivision 13; plus 
  6.3      (ii) 100 percent of the entitlements paid according to 
  6.4   subdivisions 11 and 12; plus 
  6.5      (iii) the other district receipts; plus 
  6.6      (iv) the final adjustment payment according to subdivision 
  6.7   9.  
  6.8      (c) The term "payment date" means the date on which state 
  6.9   payments to districts are made by the electronic funds transfer 
  6.10  method.  If a payment date falls on a Saturday, a Sunday, or a 
  6.11  weekday which is a legal holiday, the payment shall be made on 
  6.12  the immediately preceding business day.  The commissioner may 
  6.13  make payments on dates other than those listed in subdivision 3, 
  6.14  but only for portions of payments from any preceding payment 
  6.15  dates which could not be processed by the electronic funds 
  6.16  transfer method due to documented extenuating circumstances.  
  6.17     Sec. 3.  Minnesota Statutes 2000, section 127A.45, 
  6.18  subdivision 3, is amended to read: 
  6.19     Subd. 3.  [PAYMENT DATES AND PERCENTAGES.] (a) For fiscal 
  6.20  year 2003, the commissioner shall pay to a district on the dates 
  6.21  indicated an amount computed as follows:  the cumulative amount 
  6.22  guaranteed minus the sum of (a) the district's other district 
  6.23  receipts through the current payment, and (b) the aid and credit 
  6.24  payments through the immediately preceding payment.  For 
  6.25  purposes of this computation, the payment dates and the 
  6.26  cumulative disbursement percentages are as follows:  
  6.27                           Payment date               Percentage 
  6.28  Payment 1    July 15:                                    4.6 5.1
  6.29  Payment 2    July 30:                                    6.9 7.7
  6.30  Payment 3    August 15:  the greater of (a) the final        
  6.31               adjustment for the prior fiscal year for
  6.32               the state paid property tax credits
  6.33               established in section 273.1392, or
  6.34               (b) the amount needed to provide 15.2 percent 16.9
  6.35  Payment 4    August 30:                                 17.4 19.3
  6.36  Payment 5    September 15:                              19.6 21.8
  7.1   Payment 6    September 30:                              21.8 24.3
  7.2   Payment 7    October 15:  the greater of (a) one-half of
  7.3                the final adjustment for the prior fiscal year
  7.4                for all aid entitlements except state paid
  7.5                property tax credits, or (b) the amount needed to
  7.6                provide 24 percent 26.3
  7.7   Payment 8    October 30:  the greater of (a) one-half of the
  7.8                final adjustment for the prior fiscal year for all
  7.9                aid entitlements except state paid property
  7.10               tax credits, or (b) the amount needed
  7.11               to provide 27.3 percent 28.3
  7.12  Payment 9    November 15:                               33.3 32.8
  7.13  Payment 10   November 30:                               39.3 39.1
  7.14  Payment 11   December 15:                               42.3 42.4
  7.15  Payment 12   December 30:                               45.3 45.6
  7.16  Payment 13   January 15:                                49.5 50.5
  7.17  Payment 14   January 30:                                53.8 55.0
  7.18  Payment 15   February 15:                               58.3 60.2
  7.19  Payment 16   February 28:                               62.8 65.0
  7.20  Payment 17   March 15:                                  67.6 69.7
  7.21  Payment 18   March 30:                                  72.3 74.3
  7.22  Payment 19   April 15:                                  75.3 78.3
  7.23  Payment 20   April 30:                                  81.3 84.2
  7.24  Payment 21   May 15:                                    84.3 88.7
  7.25  Payment 22   May 30:                                    92.3 93.3
  7.26  Payment 23   June 20:                                       100.0
  7.27     (b) In addition to the amounts paid under paragraph (a), 
  7.28  for fiscal year 2003, the commissioner shall pay to a district 
  7.29  on the dates indicated an amount computed as follows: 
  7.30  Payment 3    August 15:  the final adjustment for the
  7.31               prior fiscal year for the state paid
  7.32               property tax credits established in
  7.33               section 273.1392
  7.34  Payment 7    October 15:  one-half of the final adjustment
  7.35               for the prior fiscal year for all aid
  7.36               entitlements except state paid property
  8.1                tax credits 
  8.2   Payment 8    October 30:  one-half of the final adjustment
  8.3                for the prior fiscal year for all aid
  8.4                entitlements except state paid property
  8.5                tax credits 
  8.6      (c) For fiscal year 2004 and later, the commissioner shall 
  8.7   pay to a district on the dates indicated an amount computed as 
  8.8   follows:  the cumulative amount guaranteed minus the sum of (a) 
  8.9   the district's other district receipts through the current 
  8.10  payment, and (b) the aid and credit payments through the 
  8.11  immediately preceding payment.  For purposes of this 
  8.12  computation, the payment dates and the cumulative disbursement 
  8.13  percentages are as follows: 
  8.14             Payment date                      Percentage 
  8.15  Payment 1    July 15:                                    5.1
  8.16  Payment 2    July 30:                                    7.7
  8.17  Payment 3    August 15:                                 16.9
  8.18  Payment 4    August 30:                                 19.3
  8.19  Payment 5    September 15:                              21.8
  8.20  Payment 6    September 30:                              24.3
  8.21  Payment 7    October 15:                                26.3
  8.22  Payment 8    October 30:                                28.3
  8.23  Payment 9    November 15:                               30.3
  8.24  Payment 10   November 30:                               35.0
  8.25  Payment 11   December 15:                               40.0
  8.26  Payment 12   December 30:                               43.0
  8.27  Payment 13   January 15:                                48.0
  8.28  Payment 14   January 30:                                52.0
  8.29  Payment 15   February 15:                               56.0
  8.30  Payment 16   February 28:                               61.0
  8.31  Payment 17   March 15:                                  66.0
  8.32  Payment 18   March 30:                                  72.0
  8.33  Payment 19   April 15:                                  76.0
  8.34  Payment 20   April 30:                                  83.0
  8.35  Payment 21   May 15:                                    88.0
  8.36  Payment 22   May 30:                                    95.0
  9.1   Payment 23   June 20:                                  100.0
  9.2      (d) In addition to the amounts paid under paragraph (c), 
  9.3   for fiscal year 2004 and later, the commissioner shall pay to a 
  9.4   district on the dates indicated an amount computed as follows: 
  9.5   Payment 3    August 15:  the final adjustment for the
  9.6                prior fiscal year for the state paid
  9.7                property tax credits established in 
  9.8                section 273.1392 
  9.9   Payment 4    August 30:  one-third of the final adjustment
  9.10               for the prior fiscal year for all aid
  9.11               entitlements except state paid property
  9.12               tax credits 
  9.13  Payment 7    October 15:  one-third of the final adjustment
  9.14               for the prior fiscal year for all aid
  9.15               entitlements except state paid property
  9.16               tax credits 
  9.17  Payment 8    October 30:  one-third of the final adjustment
  9.18               for the prior fiscal year for all aid
  9.19               entitlements except state paid property
  9.20               tax credits
  9.21     Sec. 4.  Minnesota Statutes 2000, section 127A.45, is 
  9.22  amended by adding a subdivision to read: 
  9.23     Subd. 7a.  [ADVANCE FINAL PAYMENT.] (a) Notwithstanding 
  9.24  subdivisions 3 and 7, a school district or a charter school 
  9.25  exceeding its expenditure limitations under section 123B.83 as 
  9.26  of June 30 of the prior fiscal year may receive a portion of its 
  9.27  final payment for the current fiscal year on June 20, if 
  9.28  requested by the district.  The amount paid under this 
  9.29  subdivision must not exceed the lesser of: 
  9.30     (1) five percent of the district or charter school's 
  9.31  general education aid for the current fiscal year; or 
  9.32     (2) the amount by which the district or charter school's 
  9.33  net negative unreserved general fund balance as of June 30 of 
  9.34  the prior fiscal year exceeds 2.5 percent of the district or 
  9.35  charter school's expenditures for that fiscal year. 
  9.36     (b) The state total advance final payment under this 
 10.1   subdivision for any year must not exceed $13,900,000.  If the 
 10.2   amount requested exceeds $13,900,000, the advance final payment 
 10.3   for each eligible district must be reduced proportionately. 
 10.4      Sec. 5.  Minnesota Statutes 2000, section 127A.45, 
 10.5   subdivision 10, is amended to read: 
 10.6      Subd. 10.  [PAYMENTS TO SCHOOL NONOPERATING FUNDS.] Each 
 10.7   fiscal year state general fund payments for a district 
 10.8   nonoperating fund must be made at 90 85 percent of the estimated 
 10.9   entitlement during the fiscal year of the entitlement.  This 
 10.10  amount shall be paid in 12 equal monthly installments.  The 
 10.11  amount of the actual entitlement, after adjustment for actual 
 10.12  data, minus the payments made during the fiscal year of the 
 10.13  entitlement must be paid prior to October 31 of the following 
 10.14  school year.  The commissioner may make advance payments of debt 
 10.15  service equalization aid or homestead and agricultural credit 
 10.16  aid for a district's debt service fund earlier than would occur 
 10.17  under the preceding schedule if the district submits evidence 
 10.18  showing a serious cash flow problem in the fund.  The 
 10.19  commissioner may make earlier payments during the year and, if 
 10.20  necessary, increase the percent of the entitlement paid to 
 10.21  reduce the cash flow problem. 
 10.22     Sec. 6.  Minnesota Statutes 2000, section 127A.45, 
 10.23  subdivision 13, is amended to read: 
 10.24     Subd. 13.  [AID PAYMENT PERCENTAGE.] Except as provided in 
 10.25  subdivisions 11, 12, 12a, and 14, each fiscal year, all 
 10.26  education aids and credits in this chapter and chapters 120A, 
 10.27  120B, 121A, 122A, 123A, 123B, 124D, 125A, 125B, 126C, 134, and 
 10.28  section 273.1392, shall be paid at 90 85 percent of the 
 10.29  estimated entitlement during the fiscal year of the 
 10.30  entitlement.  The final adjustment payment, according to 
 10.31  subdivision 9, must be the amount of the actual entitlement, 
 10.32  after adjustment for actual data, minus the payments made during 
 10.33  the fiscal year of the entitlement. 
 10.34     Sec. 7.  Minnesota Statutes 2000, section 127A.45, 
 10.35  subdivision 14, is amended to read: 
 10.36     Subd. 14.  [NONPUBLIC AIDS.] The state shall pay aid 
 11.1   according to sections 123B.40 to 123B.48 for pupils attending 
 11.2   nonpublic schools as follows: 
 11.3      (1) an advance payment by November 30 equal to 90 85 
 11.4   percent of the estimated entitlement for the current fiscal 
 11.5   year; and 
 11.6      (2) a final payment by October 31 of the following fiscal 
 11.7   year, adjusted for actual data.  
 11.8      If a payment advance to meet cash flow needs is requested 
 11.9   by a district and approved by the commissioner, the state shall 
 11.10  pay nonpublic pupil transportation aid according to section 
 11.11  123B.92 by October 31. 
 11.12     Sec. 8.  Minnesota Statutes 2001 Supplement, section 
 11.13  127A.45, subdivision 14a, is amended to read: 
 11.14     Subd. 14a.  [STATE NUTRITION PROGRAMS.] Notwithstanding 
 11.15  subdivision 3, the state shall pay 100 percent of the aid for 
 11.16  the current year according to sections 124D.111, 124D.115, and 
 11.17  124D.118 and 90 85 percent of the aid for the current year 
 11.18  according to section 124D.1156 based on submitted monthly 
 11.19  vouchers showing meals and milk served.  The remaining ten 15 
 11.20  percent according to section 124D.1156 shall be paid by October 
 11.21  30 of the following fiscal year. 
 11.22     Sec. 9.  Minnesota Statutes 2000, section 127A.45, 
 11.23  subdivision 16, is amended to read: 
 11.24     Subd. 16.  [PAYMENTS TO THIRD PARTIES.] Notwithstanding 
 11.25  subdivision 3, 90 85 percent of the amounts under section 
 11.26  123A.26, subdivision 3, shall be paid in equal installments on 
 11.27  August 30, December 30, and March 30, with a ten 15 percent 
 11.28  final adjustment payment on October 30 of the next fiscal year. 
 11.29     Sec. 10.  [APPROPRIATION, ADVANCE FINAL PAYMENT.] 
 11.30     $13,900,000 is appropriated from the general fund to the 
 11.31  commissioner of children, families, and learning to make advance 
 11.32  final payments to school districts and charter schools under 
 11.33  section 9.  
 11.34                             ARTICLE 2
 11.35                EARLY CHILDHOOD AND FAMILY EDUCATION
 11.36     Section 1.  Laws 2001, First Special Session chapter 3, 
 12.1   article 1, section 17, subdivision 2, is amended to read: 
 12.2      Subd. 2.  [SCHOOL READINESS PROGRAM REVENUE.] For revenue 
 12.3   for school readiness programs according to Minnesota Statutes, 
 12.4   sections 124D.15 and 124D.16: 
 12.5        $10,395,000    .....     2002
 12.6        $10,395,000 $9,875,000    .....     2003
 12.7      The 2002 appropriation includes $1,039,000 for 2001 and 
 12.8   $9,356,000 for 2002. 
 12.9      The 2003 appropriation includes $1,039,000 for 2002 and 
 12.10  $9,356,000 $8,836,000 for 2003.  
 12.11     Any balance in the first year does not cancel but is 
 12.12  available in the second year. 
 12.13     Sec. 2.  Laws 2001, First Special Session chapter 3, 
 12.14  article 1, section 17, subdivision 3, as amended by Laws 2002, 
 12.15  chapter 220, article 2, section 2, is amended to read: 
 12.16     Subd. 3.  [EARLY CHILDHOOD FAMILY EDUCATION AID.] For early 
 12.17  childhood family education aid according to Minnesota Statutes, 
 12.18  section 124D.135: 
 12.19       $20,725,000 $20,746,000     .....     2002 
 12.20       $20,624,000 $19,597,000     .....     2003
 12.21     The 2002 appropriation includes $2,036,000 for 2001 and 
 12.22  $18,689,000 $18,710,000 for 2002.  
 12.23     The 2003 appropriation includes $2,076,000 $2,079,000 for 
 12.24  2002 and $18,548,000 $17,518,000 for 2003.  
 12.25     Any balance in the first year does not cancel but is 
 12.26  available in the second year. 
 12.27     Sec. 3.  Laws 2001, First Special Session chapter 3, 
 12.28  article 1, section 17, subdivision 4, is amended to read: 
 12.29     Subd. 4.  [HEALTH AND DEVELOPMENTAL SCREENING AID.] For 
 12.30  health and developmental screening aid according to Minnesota 
 12.31  Statutes, sections 121A.17 and 121A.19: 
 12.32       $2,661,000     .....     2002 
 12.33       $2,661,000 $2,528,000     .....     2003 
 12.34     The 2002 appropriation includes $266,000 for 2001 and 
 12.35  $2,395,000 for 2002.  
 12.36     The 2003 appropriation includes $266,000 for 2002 and 
 13.1   $2,395,000 $2,262,000 for 2003.  
 13.2      Any balance in the first year does not cancel but is 
 13.3   available in the second year. 
 13.4      Sec. 4.  Laws 2001, First Special Session chapter 3, 
 13.5   article 1, section 17, subdivision 7, as amended by Laws 2002, 
 13.6   chapter 220, article 2, section 3, is amended to read: 
 13.7      Subd. 7.  [SCHOOL AGE CARE AID.] For school age care aid 
 13.8   according to Minnesota Statutes, section 124D.22: 
 13.9        $221,000     .....     2002 
 13.10       $100,000 $95,000     .....     2003
 13.11     The 2002 appropriation includes $30,000 for 2001 and 
 13.12  $191,000 for 2002. 
 13.13     The 2003 appropriation includes $21,000 for 2002 and 
 13.14  $79,000 $74,000 for 2003. 
 13.15     Any balance in the first year does not cancel but is 
 13.16  available in the second year. 
 13.17     Sec. 5.  Laws 2001, First Special Session chapter 3, 
 13.18  article 1, section 17, subdivision 9, as amended by Laws 2002, 
 13.19  chapter 220, article 2, section 5, is amended to read: 
 13.20     Subd. 9.  [MFIP CHILD CARE.] For child care assistance 
 13.21  according to Minnesota Statutes, section 119B.05: 
 13.22       $69,201,000 $59,956,000     .....     2002 
 13.23       $77,122,000 $68,182,000     .....     2003 
 13.24     Any balance in the first year does not cancel but is 
 13.25  available in the second year. 
 13.26     Sec. 6.  Laws 2001, First Special Session chapter 3, 
 13.27  article 1, section 19, subdivision 3, as amended by Laws 2002, 
 13.28  chapter 220, article 2, section 8, is amended to read: 
 13.29     Subd. 3.  [TRANSITION YEAR FAMILIES.] To provide 
 13.30  uninterrupted assistance under Minnesota Statutes, section 
 13.31  119B.03, for families completing transition year child care 
 13.32  assistance: 
 13.33       $1,404,000 $1,695,000   .....     2002
 13.34       $1,357,000 $1,014,000   .....     2003
 13.35     Any unspent balance from the appropriations for 2002 and 
 13.36  2003 is returned to the TANF reserve. TANF dollars appropriated 
 14.1   for this purpose in 2001 which are not encumbered by January 1, 
 14.2   2002, are returned to the TANF reserve. 
 14.3      Sec. 7.  Laws 2001, First Special Session chapter 3, 
 14.4   article 1, section 19, subdivision 5, as amended by Laws 2002, 
 14.5   chapter 220, article 2, section 9, is amended to read: 
 14.6      Subd. 5.  [MFIP SOCIAL SERVICES CHILD CARE.] For social 
 14.7   services child care costs of eligible MFIP participants under 
 14.8   Minnesota Statutes, section 119B.05, subdivision 1, clause (5): 
 14.9        $973,000 $775,000   .....     2002
 14.10       $997,000 $801,000   .....     2003
 14.11     Any unspent balance from the appropriations for 2002 and 
 14.12  2003 is returned to the TANF reserve. TANF dollars appropriated 
 14.13  for this purpose in 2001 which are not encumbered by January 1, 
 14.14  2002, are returned to the TANF reserve. 
 14.15     Sec. 8.  Laws 2001, First Special Session chapter 3, 
 14.16  article 2, section 15, subdivision 3, as amended by Laws 2002, 
 14.17  chapter 220, article 2, section 10, is amended to read: 
 14.18     Subd. 3.  [COMMUNITY EDUCATION AID.] For community 
 14.19  education aid according to Minnesota Statutes, section 124D.20: 
 14.20       $14,190,000 $14,194,000     .....     2002
 14.21       $ 8,186,000 $ 7,815,000     .....     2003
 14.22     The 2002 appropriation includes $1,528,000 for 2001 and 
 14.23  $12,662,000 $12,666,000 for 2002.  
 14.24     The 2003 appropriation includes $1,406,000 $1,407,000 for 
 14.25  2002 and $6,780,000 $6,408,000 for 2003.  
 14.26     Any balance in the first year does not cancel but is 
 14.27  available in the second year. 
 14.28     Sec. 9.  Laws 2001, First Special Session chapter 3, 
 14.29  article 2, section 15, subdivision 4, is amended to read: 
 14.30     Subd. 4.  [ADULTS WITH DISABILITIES PROGRAM AID.] For 
 14.31  adults with disabilities programs according to Minnesota 
 14.32  Statutes, section 124D.56: 
 14.33       $639,000     .....     2002 
 14.34       $710,000 $675,000     .....     2003 
 14.35     The 2002 appropriation includes $0 for 2001 and $639,000 
 14.36  for 2002. 
 15.1      The 2003 appropriation includes $71,000 for 2002 and 
 15.2   $639,000 $604,000 for 2003. 
 15.3      Any balance in the first year does not cancel but is 
 15.4   available in the second year. 
 15.5      Sec. 10.  Laws 2001, First Special Session chapter 3, 
 15.6   article 2, section 15, subdivision 6, is amended to read: 
 15.7      Subd. 6.  [VIOLENCE PREVENTION EDUCATION GRANTS.] For 
 15.8   violence prevention education grants according to Minnesota 
 15.9   Statutes, section 120B.23: 
 15.10       $1,305,000     .....     2002
 15.11       $1,450,000 $1,378,000     .....     2003
 15.12     The 2002 appropriation includes $0 for 2001 and $1,305,000 
 15.13  for 2002. 
 15.14     The 2003 appropriation includes $145,000 for 2002 and 
 15.15  $1,305,000 $1,233,000 for 2003. 
 15.16     Any balance in the first year does not cancel but is 
 15.17  available in the second year. 
 15.18     Sec. 11.  Laws 2001, First Special Session chapter 3, 
 15.19  article 3, section 9, subdivision 5, is amended to read: 
 15.20     Subd. 5.  [ADULT BASIC EDUCATION AID.] For adult basic 
 15.21  education aid according to Minnesota Statutes, section 124D.531: 
 15.22       $32,150,000     .....     2002 
 15.23       $34,731,000 $32,982,000     .....     2003
 15.24     The 2002 appropriation includes $3,019,000 for 2001 and 
 15.25  $29,131,000 for 2002.  
 15.26     The 2003 appropriation includes $3,237,000 for 2002 and 
 15.27  $31,494,000 $29,745,000 for 2003.  
 15.28     Sec. 12.  Laws 2001, First Special Session chapter 3, 
 15.29  article 3, section 9, subdivision 7, is amended to read: 
 15.30     Subd. 7.  [ADULT GRADUATION AID.] For adult graduation aid 
 15.31  according to Minnesota Statutes, section 124D.54: 
 15.32       $3,195,000 $2,462,000     .....     2002 
 15.33       $3,356,000 $2,378,000     .....     2003 
 15.34     The 2002 appropriation includes $305,000 for 2001 and 
 15.35  $2,890,000 $2,157,000 for 2002.  
 15.36     The 2003 appropriation includes $321,000 $240,000 for 2002 
 16.1   and $3,035,000 $2,138,000 for 2003.  
 16.2      Sec. 13.  Laws 2001, First Special Session chapter 3, 
 16.3   article 4, section 5, subdivision 2, as amended by Laws 2002, 
 16.4   chapter 220, article 2, section 12, is amended to read: 
 16.5      Subd. 2.  [BASIC SUPPORT GRANTS.] For basic support grants 
 16.6   according to Minnesota Statutes, sections 134.32 to 134.35: 
 16.7        $8,570,000     .....     2002 
 16.8        $8,570,000 $8,142,000     .....     2003 
 16.9      The 2002 appropriation includes $857,000 for 2001 and 
 16.10  $7,713,000 for 2002. 
 16.11     The 2003 appropriation includes $857,000 for 2002 and 
 16.12  $7,713,000 $7,285,000 for 2003. 
 16.13     Base level funding for fiscal year 2004 is 
 16.14  $9,823,000 $9,754,000 and $9,822,000 $9,962,000 for fiscal year 
 16.15  2005. 
 16.16     Sec. 14.  Laws 2001, First Special Session chapter 3, 
 16.17  article 4, section 5, subdivision 3, is amended to read: 
 16.18     Subd. 3.  [MULTICOUNTY, MULTITYPE LIBRARY SYSTEMS.] For 
 16.19  grants according to Minnesota Statutes, sections 134.353 and 
 16.20  134.354, to multicounty, multitype library systems: 
 16.21       $903,000     .....     2002 
 16.22       $903,000 $858,000     .....     2003 
 16.23     The 2002 appropriation includes $90,000 for 2001 and 
 16.24  $813,000 for 2002. 
 16.25     The 2003 appropriation includes $90,000 for 2002 and 
 16.26  $813,000 $768,000 for 2003. 
 16.27     Any balance in the first year does not cancel but is 
 16.28  available in the second year. 
 16.29     Sec. 15.  Laws 2002, chapter 220, article 2, section 14, is 
 16.30  amended to read: 
 16.31     Sec. 14.  [TANF APPROPRIATIONS.] 
 16.32     Subdivision 1.  [DEPARTMENT OF CHILDREN, FAMILIES, AND 
 16.33  LEARNING.] The sum indicated in this section is appropriated to 
 16.34  the commissioner of children, families, and learning transferred 
 16.35  from the federal Temporary Assistance for Needy Families block 
 16.36  grant to the child care and development fund and appropriated to 
 17.1   the department of children, families, and learning for the 
 17.2   fiscal year designated.  This amount is available for 
 17.3   expenditure until June 30, 2003. 
 17.4      Subd. 2.  [BASIC SLIDING FEE CHILD CARE.] For child care 
 17.5   assistance according to Minnesota Statutes, section 119B.03: 
 17.6        $3,000,000     .....     2003
 17.7      Sec. 16.  [EFFECTIVE DATE.] 
 17.8      This article is effective the day following final enactment.
 17.9                              ARTICLE 3
 17.10              K-12 EDUCATION APPROPRIATION ADJUSTMENTS
 17.11     Section 1.  Minnesota Statutes 2001 Supplement, section 
 17.12  123B.54, as amended by Laws 2002, chapter 220, article 4, 
 17.13  section 1, is amended to read: 
 17.14     123B.54 [DEBT SERVICE APPROPRIATION.] 
 17.15     (a) $25,987,000 in fiscal year 2002, 
 17.16  $31,892,000 $30,600,000 in fiscal year 2003, 
 17.17  $36,629,000 $40,246,000 in fiscal year 2004, and 
 17.18  $36,931,000 $39,732,000 in fiscal years 2005 and later are 
 17.19  appropriated from the general fund to the commissioner of 
 17.20  children, families, and learning for payment of debt service 
 17.21  equalization aid under section 123B.53.  
 17.22     (b) The appropriations in paragraph (a) must be reduced by 
 17.23  the amount of any money specifically appropriated for the same 
 17.24  purpose in any year from any state fund. 
 17.25     Sec. 2.  Laws 2001, First Special Session chapter 5, 
 17.26  article 2, section 29, subdivision 2, as amended by Laws 2002, 
 17.27  chapter 220, article 4, section 2, is amended to read: 
 17.28     Subd. 2.  [REFERENDUM TAX BASE REPLACEMENT AID.] For 
 17.29  referendum tax base replacement aid according to Minnesota 
 17.30  Statutes, section 126C.17, subdivision 7a: 
 17.31       $7,616,000 $7,197,000     .....     2003
 17.32     The 2003 appropriation includes $0 for 2002 and 
 17.33  $7,616,000 $7,197,000 for 2003.  
 17.34     Sec. 3.  Laws 2001, First Special Session chapter 6, 
 17.35  article 1, section 54, subdivision 2, as amended by Laws 2002, 
 17.36  chapter 220, article 3, section 8, is amended to read: 
 18.1      Subd. 2.  [GENERAL AND SUPPLEMENTAL EDUCATION AID.] (a) For 
 18.2   general and supplemental education aid:  
 18.3        $3,404,787,000 $3,414,168,000     .....     2002
 18.4        $4,982,334,000 $4,720,954,000     .....     2003
 18.5      The 2002 appropriation includes $323,767,000 $333,756,000 
 18.6   for 2001 and $3,081,020,000 $3,080,412,000 for 2002.  
 18.7      The 2003 appropriation includes $335,220,000 $335,163,000 
 18.8   for 2002 and $4,647,114,000 $4,385,791,000 for 2003.  
 18.9      (b) The fiscal year 2003 appropriation in paragraph (a) is 
 18.10  reduced by $1,901,000. 
 18.11     Sec. 4.  Laws 2001, First Special Session chapter 6, 
 18.12  article 1, section 54, subdivision 4, as amended by Laws 2002, 
 18.13  chapter 220, article 4, section 3, is amended to read: 
 18.14     Subd. 4.  [ABATEMENT AID.] For abatement aid according to 
 18.15  Minnesota Statutes, section 127A.49:  
 18.16       $5,698,000    .....     2002 
 18.17       $2,990,000 $2,925,000    .....     2003 
 18.18     The 2002 appropriation includes $640,000 for 2001 and 
 18.19  $5,058,000 for 2002.  
 18.20     The 2003 appropriation includes $562,000 for 2002 
 18.21  and $2,428,000 $2,363,000 for 2003.  
 18.22     Sec. 5.  Laws 2001, First Special Session chapter 6, 
 18.23  article 1, section 54, subdivision 5, as amended by Laws 2002, 
 18.24  chapter 220, article 4, section 4, is amended to read: 
 18.25     Subd. 5.  [NONPUBLIC PUPIL AID.] For nonpublic pupil 
 18.26  education aid according to Minnesota Statutes, sections 123.79 
 18.27  and 123B.40 to 123B.43: 
 18.28       $14,441,000 $14,254,000   .....     2002 
 18.29       $15,977,000 $14,568,000   .....     2003 
 18.30     The 2002 appropriation includes $1,330,000 for 2001 and 
 18.31  $13,111,000 $12,924,000 for 2002. 
 18.32     The 2003 appropriation includes $1,457,000 $1,436,000 for 
 18.33  2002 and $14,520,000 $13,132,000 for 2003. 
 18.34     Sec. 6.  Laws 2001, First Special Session chapter 6, 
 18.35  article 1, section 54, subdivision 6, as amended by Laws 2002, 
 18.36  chapter 220, article 4, section 5, is amended to read: 
 19.1      Subd. 6.  [NONPUBLIC PUPIL TRANSPORTATION.] For nonpublic 
 19.2   pupil transportation aid under Minnesota Statutes, section 
 19.3   123B.92, subdivision 9: 
 19.4        $20,635,000 $20,634,000    .....     2002 
 19.5        $25,347,000 $22,723,000    .....     2003 
 19.6      The 2002 appropriation includes $2,000,000 for 2001 and 
 19.7   $18,635,000 $18,634,000 for 2002. 
 19.8      The 2003 appropriation includes $2,070,000 $2,071,000 for 
 19.9   2002 and $23,277,000 $20,652,000 for 2003. 
 19.10     Sec. 7.  Laws 2001, First Special Session chapter 6, 
 19.11  article 1, section 54, subdivision 7, as amended by Laws 2002, 
 19.12  chapter 220, article 4, section 6, is amended to read: 
 19.13     Subd. 7.  [CONSOLIDATION TRANSITION AID.] For districts 
 19.14  consolidating under Minnesota Statutes, section 123A.485: 
 19.15       $531,000 $539,000       .....     2002 
 19.16       $736,000 $229,000       .....     2003 
 19.17     The 2002 appropriation includes $44,000 for 2001 and 
 19.18  $487,000 $495,000 for 2002. 
 19.19     The 2003 appropriation includes $54,000 for 2002 
 19.20  and $682,000 $175,000 for 2003. 
 19.21     Any balance in the first year does not cancel but is 
 19.22  available in the second year. 
 19.23     Sec. 8.  Laws 2001, First Special Session chapter 6, 
 19.24  article 2, section 77, subdivision 4, as amended by Laws 2002, 
 19.25  chapter 220, article 4, section 7, is amended to read: 
 19.26     Subd. 4.  [CHARTER SCHOOL BUILDING LEASE AID.] For building 
 19.27  lease aid under Minnesota Statutes, section 124D.11, subdivision 
 19.28  4: 
 19.29       $12,323,000 $12,286,000     .....     2002 
 19.30       $15,330,000 $14,711,000     .....     2003 
 19.31     The 2002 appropriation includes $1,114,000 for 2001 and 
 19.32  $11,209,000 $11,172,000 for 2002. 
 19.33     The 2003 appropriation includes $1,245,000 $1,241,000 for 
 19.34  2002 and $14,085,000 $13,470,000 for 2003.  
 19.35     Sec. 9.  Laws 2001, First Special Session chapter 6, 
 19.36  article 2, section 77, subdivision 5, as amended by Laws 2002, 
 20.1   chapter 220, article 4, section 8, is amended to read: 
 20.2      Subd. 5.  [CHARTER SCHOOL STARTUP GRANTS.] For charter 
 20.3   school startup cost aid under Minnesota Statutes, section 
 20.4   124D.11: 
 20.5        $2,090,000 $2,064,000    .....     2002 
 20.6        $1,549,000 $1,486,000    .....     2003 
 20.7      The 2002 appropriation includes $258,000 for 2001 
 20.8   and $1,832,000 $1,806,000 for 2002.  
 20.9      The 2003 appropriation includes $204,000 $200,000 for 2002 
 20.10  and $1,345,000 $1,286,000 for 2003. 
 20.11     Sec. 10.  Laws 2001, First Special Session chapter 6, 
 20.12  article 2, section 77, subdivision 6, is amended to read: 
 20.13     Subd. 6.  [CHARTER SCHOOL INTEGRATION AID.] For grants to 
 20.14  charter schools to promote integration and desegregation under 
 20.15  Minnesota Statutes, section 124D.11, subdivision 6, paragraph 
 20.16  (e): 
 20.17       $45,000        .....     2002 
 20.18       $50,000 $48,000        .....     2003 
 20.19     The 2002 appropriation includes $0 for 2001 and $45,000 for 
 20.20  2002.  
 20.21     The 2003 appropriation includes $5,000 for 2002 and 
 20.22  $45,000 $43,000 for 2003. 
 20.23     Any balance in the first year does not cancel but is 
 20.24  available in the second year. 
 20.25     Sec. 11.  Laws 2001, First Special Session chapter 6, 
 20.26  article 2, section 77, subdivision 8, as amended by Laws 2002, 
 20.27  chapter 220, article 4, section 9, is amended to read: 
 20.28     Subd. 8.  [INTEGRATION AID.] For integration aid: 
 20.29       $63,421,000 $63,311,000     .....    2002 
 20.30       $53,890,000 $51,478,000     .....    2003 
 20.31     The 2002 appropriation includes $5,729,000 for 2001 and 
 20.32  $57,692,000 $57,582,000 for 2002. 
 20.33     The 2003 appropriation includes $6,410,000 $6,398,000 for 
 20.34  2002 and $47,480,000 $45,080,000 for 2003.  
 20.35     Sec. 12.  Laws 2001, First Special Session chapter 6, 
 20.36  article 2, section 77, subdivision 11, as amended by Laws 2002, 
 21.1   chapter 220, article 4, section 10, is amended to read: 
 21.2      Subd. 11.  [MAGNET SCHOOL STARTUP AID.] For magnet school 
 21.3   startup aid under Minnesota Statutes, section 124D.88: 
 21.4        $475,000 $448,000      .....     2002 
 21.5        $298,000 $333,000      .....     2003 
 21.6      The 2002 appropriation includes $25,000 for 2001 and 
 21.7   $450,000 $423,000 for 2002.  
 21.8      The 2003 appropriation includes $50,000 $47,000 for 2002 
 21.9   and $248,000 $286,000 for 2003. 
 21.10     Sec. 13.  Laws 2001, First Special Session chapter 6, 
 21.11  article 2, section 77, subdivision 15, as amended by Laws 2002, 
 21.12  chapter 220, article 4, section 11, is amended to read: 
 21.13     Subd. 15.  [SUCCESS FOR THE FUTURE.] For American Indian 
 21.14  success for the future grants according to Minnesota Statutes, 
 21.15  section 124D.81: 
 21.16       $1,924,000     .....     2002
 21.17       $2,137,000 $2,030,000     .....     2003
 21.18     The 2002 appropriation includes $0 for 2001 and $1,924,000 
 21.19  for 2002. 
 21.20     The 2003 appropriation includes $213,000 for 2002 
 21.21  and $1,924,000 $1,817,000 for 2003. 
 21.22     Sec. 14.  Laws 2001, First Special Session chapter 6, 
 21.23  article 2, section 77, subdivision 18, as amended by Laws 2002, 
 21.24  chapter 220, article 4, section 12, is amended to read: 
 21.25     Subd. 18.  [TRIBAL CONTRACT SCHOOLS.] For tribal contract 
 21.26  school aid under Minnesota Statutes, section 124D.83: 
 21.27       $2,304,000 $2,147,000    .....     2002
 21.28       $2,408,000 $2,269,000    .....     2003
 21.29     The 2002 appropriation includes $192,000 for 2001 and 
 21.30  $2,112,000 $1,955,000 for 2002. 
 21.31     The 2003 appropriation includes $235,000 $217,000 for 2002 
 21.32  and $2,173,000 2,052,000 for 2003. 
 21.33     Sec. 15.  Laws 2001, First Special Session chapter 6, 
 21.34  article 3, section 21, subdivision 2, as amended by Laws 2002, 
 21.35  chapter 220, article 4, section 13, is amended to read: 
 21.36     Subd. 2.  [SPECIAL EDUCATION AID.] For special education 
 22.1   aid according to Minnesota Statutes, section 125A.75: 
 22.2        $507,841,000 $507,928,000  .....     2002 
 22.3        $532,282,000 $505,728,000  .....     2003 
 22.4      The 2002 appropriation includes $47,400,000 for 2001 and 
 22.5   $460,441,000 $460,528,000 for 2002. 
 22.6      The 2003 appropriation includes $51,160,000 $51,170,000 for 
 22.7   2002 and $481,122,000 $454,558,000 for 2003. 
 22.8      Sec. 16.  Laws 2001, First Special Session chapter 6, 
 22.9   article 3, section 21, subdivision 3, as amended by Laws 2002, 
 22.10  chapter 220, article 4, section 14, is amended to read: 
 22.11     Subd. 3.  [AID FOR CHILDREN WITH A DISABILITY.] For aid 
 22.12  according to Minnesota Statutes, section 125A.75, subdivision 3, 
 22.13  for children with a disability placed in residential facilities 
 22.14  within the district boundaries for whom no district of residence 
 22.15  can be determined: 
 22.16       $1,358,000 $1,346,000    .....     2002 
 22.17       $3,161,000 $2,363,000    .....     2003 
 22.18     If the appropriation for either year is insufficient, the 
 22.19  appropriation for the other year is available.  
 22.20     Any balance in the first year does not cancel but is 
 22.21  available in the second year. 
 22.22     Sec. 17.  Laws 2001, First Special Session chapter 6, 
 22.23  article 3, section 21, subdivision 4, as amended by Laws 2002, 
 22.24  chapter 220, article 4, section 15, is amended to read: 
 22.25     Subd. 4.  [TRAVEL FOR HOME-BASED SERVICES.] For aid for 
 22.26  teacher travel for home-based services according to Minnesota 
 22.27  Statutes, section 125A.75, subdivision 1: 
 22.28       $143,000 $139,000      .....     2002 
 22.29       $148,000 $137,000      .....     2003 
 22.30     The 2002 appropriation includes $14,000 $13,000 for 2001 
 22.31  and $129,000 $126,000 for 2002. 
 22.32     The 2003 appropriation includes $15,000 $14,000 for 2002 
 22.33  and $133,000 $123,000 for 2003. 
 22.34     Sec. 18.  Laws 2001, First Special Session chapter 6, 
 22.35  article 3, section 21, subdivision 5, as amended by Laws 2002, 
 22.36  chapter 220, article 4, section 16, is amended to read: 
 23.1      Subd. 5.  [SPECIAL EDUCATION EXCESS COST AID.] For excess 
 23.2   cost aid: 
 23.3        $103,061,000 $92,622,000     .....     2002 
 23.4        $105,289,000 $88,823,000     .....     2003 
 23.5      The 2002 appropriation includes $9,889,000 for 2001 and 
 23.6   $93,172,000 $82,733,000 for 2002. 
 23.7      The 2003 appropriation includes $10,352,000 $9,192,000 for 
 23.8   2002 and $94,937,000 $79,631,000 for 2003. 
 23.9      Sec. 19.  Laws 2001, First Special Session chapter 6, 
 23.10  article 3, section 21, subdivision 7, as amended by Laws 2002, 
 23.11  chapter 220, article 4, section 17, is amended to read: 
 23.12     Subd. 7.  [TRANSITION PROGRAMS; STUDENTS WITH 
 23.13  DISABILITIES.] For aid for transition programs for pupils with 
 23.14  disabilities according to Minnesota Statutes, section 124D.454: 
 23.15       $8,960,000 $8,962,000    .....     2002 
 23.16       $8,952,000 $8,507,000    .....     2003 
 23.17     The 2002 appropriation includes $896,000 for 2001 and 
 23.18  $8,064,000 $8,066,000 for 2002.  
 23.19     The 2003 appropriation includes $896,000 for 2002 
 23.20  and $8,056,000 $7,611,000 for 2003.  
 23.21     Sec. 20.  Laws 2001, First Special Session chapter 6, 
 23.22  article 4, section 27, subdivision 2, as amended by Laws 2002, 
 23.23  chapter 220, article 4, section 18, is amended to read: 
 23.24     Subd. 2.  [HEALTH AND SAFETY AID.] For health and safety 
 23.25  aid according to Minnesota Statutes, section 123B.57, 
 23.26  subdivision 5: 
 23.27       $13,630,000 $12,280,000   .....     2002 
 23.28       $10,800,000 $ 9,275,000   .....     2003 
 23.29     The 2002 appropriation includes $1,480,000 for 2001 and 
 23.30  $12,150,000 $10,800,000 for 2002. 
 23.31     The 2003 appropriation includes $1,350,000 $1,200,000 for 
 23.32  2002 and $9,450,000 $8,075,000 for 2003. 
 23.33     Sec. 21.  Laws 2001, First Special Session chapter 6, 
 23.34  article 4, section 27, subdivision 3, as amended by Laws 2002, 
 23.35  chapter 220, article 4, section 19, is amended to read: 
 23.36     Subd. 3.  [DEBT SERVICE AID.] For debt service aid 
 24.1   according to Minnesota Statutes, section 123B.53, subdivision 6: 
 24.2        $25,987,000     .....     2002 
 24.3        $31,892,000 $30,600,000     .....     2003 
 24.4      The 2002 appropriation includes $2,890,000 for 2001 and 
 24.5   $23,097,000 for 2002. 
 24.6      The 2003 appropriation includes $2,566,000 for 2002 
 24.7   and $29,326,000 $28,034,000 for 2003. 
 24.8      Sec. 22.  Laws 2001, First Special Session chapter 6, 
 24.9   article 4, section 27, subdivision 5, as amended by Laws 2002, 
 24.10  chapter 220, article 4, section 20, is amended to read: 
 24.11     Subd. 5.  [ALTERNATIVE FACILITIES BONDING AID.] For 
 24.12  alternative facilities bonding aid, according to Minnesota 
 24.13  Statutes, section 123B.59, subdivision 1: 
 24.14       $19,280,000     .....     2002 
 24.15       $19,287,000 $18,322,000     .....     2003 
 24.16     The 2002 appropriation includes $1,921,000 for 2001 and 
 24.17  $17,359,000 for 2002. 
 24.18     The 2003 appropriation includes $1,928,000 for 2002 
 24.19  and $17,359,000 $16,394,000 for 2003. 
 24.20     Sec. 23.  Laws 2001, First Special Session chapter 6, 
 24.21  article 5, section 13, subdivision 3, is amended to read: 
 24.22     Subd. 3.  [SCHOOL BREAKFAST.] For school breakfast aid 
 24.23  under Minnesota Statutes, section 124D.115: 
 24.24       $640,000       .....     2002 
 24.25       $700,000 $680,000       .....     2003 
 24.26     Sec. 24.  Laws 2001, First Special Session chapter 6, 
 24.27  article 5, section 13, subdivision 5, as amended by Laws 2002, 
 24.28  chapter 220, article 4, section 23, is amended to read: 
 24.29     Subd. 5.  [FAST BREAK TO LEARNING GRANTS.] For fast break 
 24.30  to learning grants under Minnesota Statutes, section 124D.1156: 
 24.31       $2,446,000     .....     2002 
 24.32       $2,839,000 $2,697,000     .....     2003 
 24.33     The 2002 appropriation includes $0 for 2001 and $2,446,000 
 24.34  for 2002. 
 24.35     The 2003 appropriation includes $271,000 for 2002 
 24.36  and $2,568,000 $2,426,000 for 2003. 
 25.1      Sec. 25.  [EFFECTIVE DATE.] 
 25.2      This article is effective the day following final enactment.
 25.3                              ARTICLE 4
 25.4                            E-12 EDUCATION
 25.5      Section 1.  Minnesota Statutes 2000, section 120A.41, is 
 25.6   amended to read: 
 25.7      120A.41 [LENGTH OF SCHOOL YEAR; DAYS OF INSTRUCTION.] 
 25.8      A school board's annual school calendar must include at 
 25.9   least three additional days of student instruction or staff 
 25.10  development training related to implementing section 120B.031, 
 25.11  subdivision 1, paragraph (f), beyond the number of days of 
 25.12  student instruction the board formally adopted as its school 
 25.13  calendar at the beginning of the 1996-1997 school year. 
 25.14     Sec. 2.  Minnesota Statutes 2000, section 124D.69, is 
 25.15  amended by adding a subdivision to read: 
 25.16     Subd. 3.  [UNCOMMON SCHOOLS SERVING STUDENTS WITH CHEMICAL 
 25.17  DEPENDENCIES; ALLOCATION OF FUNDS.] In addition to the amounts 
 25.18  provided in section 124D.68, subdivision 9, a school district 
 25.19  may allocate funds from its undesignated general fund to a 
 25.20  private contracted alternative program, including a private 
 25.21  contracted alternative program that is tuition free and provides 
 25.22  a comprehensive secondary academic program for students who have 
 25.23  been assessed chemically dependent and who have completed a 
 25.24  licensed treatment program for chemical dependency. 
 25.25     Sec. 3.  Minnesota Statutes 2000, section 125A.65, 
 25.26  subdivision 1, is amended to read: 
 25.27     Subdivision 1.  [RESPONSIBILITY ALLOCATED.] Responsibility 
 25.28  for special instruction and services for a visually 
 25.29  disabled blind/visually impaired or hearing impaired deaf/hard 
 25.30  of hearing child attending the Minnesota state academy for the 
 25.31  deaf or the Minnesota state academy for the blind must be 
 25.32  determined in subdivisions 2 to 10. 
 25.33     Sec. 4.  Minnesota Statutes 2000, section 125A.65, 
 25.34  subdivision 3, is amended to read: 
 25.35     Subd. 3.  [EDUCATIONAL PROGRAM; TUITION.] When it is 
 25.36  determined pursuant to section 125A.69, subdivision 1 or 2, that 
 26.1   the child is entitled to attend either school, the board of the 
 26.2   Minnesota state academies must provide the appropriate 
 26.3   educational program for the child.  The board of the Minnesota 
 26.4   state academies must make a tuition charge to the child's 
 26.5   district of residence for the cost of providing the program.  
 26.6   The amount of tuition charged must not exceed the basic revenue 
 26.7   of the district general education revenue formula allowance 
 26.8   times the pupil unit weighting factor pursuant to section 
 26.9   126C.05 for that child, for the amount of time the child is in 
 26.10  the program.  For purposes of this subdivision, "basic revenue" 
 26.11  has the meaning given it in section 126C.10, subdivision 2.  The 
 26.12  district of the child's residence must pay the tuition and may 
 26.13  claim general education aid for the child.  Tuition received by 
 26.14  the board of the Minnesota state academies, except for tuition 
 26.15  received under subdivision 4, must be deposited in the state 
 26.16  treasury as provided in subdivision 8. 
 26.17     Sec. 5.  Minnesota Statutes 2000, section 125A.65, 
 26.18  subdivision 8, is amended to read: 
 26.19     Subd. 8.  [STUDENT COUNT; TUITION.] (a) On May 1 of each 
 26.20  year, 1996, and each year thereafter, the board of the Minnesota 
 26.21  state academies shall count the actual number of Minnesota 
 26.22  resident kindergarten and elementary students and the actual 
 26.23  number of Minnesota resident secondary special education 
 26.24  eligible students enrolled and receiving education services at 
 26.25  the Minnesota state academy for the deaf and the Minnesota state 
 26.26  academy for the blind.  The board of the Minnesota state 
 26.27  academies shall deposit in the state treasury an amount equal to 
 26.28  all tuition received less: the amount calculated in paragraph 
 26.29  (b). 
 26.30     (1) the total number of students on May 1 less 175, times 
 26.31  the ratio of the number of kindergarten and elementary students 
 26.32  to the total number of students on May 1, times the general 
 26.33  education formula allowance; plus 
 26.34     (2) the total number of students on May 1 less 175, times 
 26.35  the ratio of the number of secondary students on May 1 to the 
 26.36  total number of students on May 1, times 1.3, times the general 
 27.1   education formula allowance. 
 27.2      (b) The Minnesota state academies shall credit to their 
 27.3   general operation account an amount equal to the tuition 
 27.4   received which represents tuition earned for the total number of 
 27.5   students over 175 based on: 
 27.6      (1) the total number of enrolled students on May 1 less 
 27.7   175; times 
 27.8      (2) the ratio of the number of students in that grade 
 27.9   category to the total number of students on May 1; times 
 27.10     (3) the general education revenue formula allowance; times 
 27.11     (4) the pupil unit weighting factor pursuant to section 
 27.12  126C.05. 
 27.13     Sec. 6.  Minnesota Statutes 2000, section 125A.65, 
 27.14  subdivision 9, is amended to read: 
 27.15     Subd. 9.  [CALCULATION.] The sum provided by the 
 27.16  calculation in subdivision 8, clauses (1) and (2), must be 
 27.17  deposited in the state treasury and credited to the general 
 27.18  operation account of the academy for the deaf and the academy 
 27.19  for the blind Minnesota state academy for the deaf and the 
 27.20  Minnesota state academy for the blind. 
 27.21     Sec. 7.  Minnesota Statutes 2001 Supplement, section 
 27.22  126C.17, subdivision 7, is amended to read: 
 27.23     Subd. 7.  [REFERENDUM EQUALIZATION AID.] (a) A district's 
 27.24  referendum equalization aid equals the difference between its 
 27.25  referendum equalization revenue and levy. 
 27.26     (b) If a district's actual levy for first or second tier 
 27.27  referendum equalization revenue is less than its maximum levy 
 27.28  limit for that tier, aid shall be proportionately reduced. 
 27.29     (c) Notwithstanding paragraph (a), the referendum 
 27.30  equalization aid for a district, where the referendum 
 27.31  equalization aid under paragraph (a) exceeds 90 percent of the 
 27.32  referendum revenue, must not exceed 18.2 percent of the formula 
 27.33  allowance times the district's resident marginal cost pupil 
 27.34  units.  A district's referendum levy is increased by the amount 
 27.35  of any reduction in referendum aid under this paragraph. 
 27.36     <h>[EFFECTIVE DATE.]</h> This section is effective for operating 
 28.1   referendum elections January 1, 2002, and later. 
 28.2      Sec. 8.  Laws 2001, First Special Session chapter 6, 
 28.3   article 7, section 14, as amended by Laws 2002, chapter 220, 
 28.4   article 3, section 16, is amended to read: 
 28.5      Sec. 14.  [APPROPRIATIONS; PERPICH CENTER FOR ARTS 
 28.6   EDUCATION.] 
 28.7      The sums indicated in this section are appropriated from 
 28.8   the general fund to the Perpich Center for Arts Education for 
 28.9   the fiscal years designated: 
 28.10   $7,431,000 $7,681,000    .....     2002 
 28.11   $7,316,000 $7,816,000    .....     2003 
 28.12     $150,000 each year is to extend the partnership network to 
 28.13  up to five new partnership sites and for developing 
 28.14  whole-school, arts-based teaching and learning curriculum at new 
 28.15  sites. 
 28.16     Any balance in the first year does not cancel but is 
 28.17  available in the second year. 
 28.18     Sec. 9.  [REFERENDUM TRANSFER ADJUSTMENT.] 
 28.19     Notwithstanding Minnesota Statutes, section 126C.17, 
 28.20  subdivision 1, paragraph (b), for fiscal year 2003 and later, 
 28.21  the initial referendum allowance for independent school district 
 28.22  No. 709, Duluth, equals the sum of the allowance under Minnesota 
 28.23  Statutes, section 126C.16, subdivision 2, plus the referendum 
 28.24  conversion allowance approved under Minnesota Statutes, section 
 28.25  126C.17, subdivision 13, minus $373.  If the district has more 
 28.26  than one referendum authority, the reduction must be computed 
 28.27  separately for each authority.  The reduction must be applied 
 28.28  first to the referendum authority with the earliest expiration 
 28.29  date.  The district's initial referendum allowance may not be 
 28.30  less than zero. 
 28.31     Sec. 10.  [DECLINING PUPIL UNIT AID; ALBERT LEA.] 
 28.32     Subdivision 1.  [FISCAL YEAR 2003.] For fiscal year 2003, 
 28.33  independent school district No. 241, Albert Lea, is eligible for 
 28.34  family dislocation declining enrollment aid equal to $300,000. 
 28.35     Subd. 2.  [FISCAL YEAR 2004.] For fiscal year 2004, 
 28.36  independent school district No. 241, Albert Lea, is eligible for 
 29.1   family dislocation declining enrollment aid equal to 75 percent 
 29.2   of the fiscal year 2003 appropriation in subdivision 1. 
 29.3      Subd. 3.  [FISCAL YEAR 2005.] For fiscal year 2005, 
 29.4   independent school district No. 241, Albert Lea, is eligible for 
 29.5   family dislocation declining enrollment aid equal to 50 percent 
 29.6   of the fiscal year 2003 appropriation in subdivision 1. 
 29.7      Subd. 4.  [FISCAL YEAR 2006.] For fiscal year 2006, 
 29.8   independent school district No. 241, Albert Lea, is eligible for 
 29.9   family dislocation declining enrollment aid equal to 25 percent 
 29.10  of the fiscal year 2003 appropriation in subdivision 1. 
 29.11     Sec. 11.  [DECLINING ENROLLMENT; LTV DISLOCATION.] 
 29.12     Subdivision 1.  [FISCAL YEAR 2003.] For fiscal year 2003, 
 29.13  independent school districts Nos. 706, Virginia; 2154, 
 29.14  Eveleth-Gilbert; 2711, Mesabi East; and the portion of 2142, St. 
 29.15  Louis county that comprises the Babbitt-Embarass and 
 29.16  Tower-Soudan attendance areas are eligible for LTV dislocation 
 29.17  declining pupil aid equal to one-half of the difference between 
 29.18  each district's fiscal year 2001 adjusted marginal cost pupil 
 29.19  units and its fiscal year 2003 pupil units times $4,601. 
 29.20     Subd. 2.  [FISCAL YEAR 2004.] For fiscal year 2004, 
 29.21  independent school districts Nos. 706, Virginia; 2154, 
 29.22  Eveleth-Gilbert; 2711, Mesabi East; 2142, St. Louis county are 
 29.23  eligible for LTV dislocation declining enrollment aid equal to 
 29.24  75 percent of the amount that the district received in the 
 29.25  fiscal year 2003 appropriation in subdivision 1. 
 29.26     Subd. 3.  [FISCAL YEAR 2005.] For fiscal year 2005, 
 29.27  independent school districts Nos. 706, Virginia; 2154, 
 29.28  Eveleth-Gilbert; 2711, Mesabi East; 2142, St. Louis county are 
 29.29  eligible for LTV dislocation declining enrollment aid equal to 
 29.30  50 percent of the amount that the district received in the 
 29.31  fiscal year 2003 appropriation in subdivision 1. 
 29.32     Subd. 4.  [FISCAL YEAR 2006.] For fiscal year 2006, 
 29.33  independent school districts Nos. 706, Virginia; 2154, 
 29.34  Eveleth-Gilbert; 2711, Mesabi East; 2142, St. Louis county are 
 29.35  eligible for LTV dislocation declining enrollment aid equal to 
 29.36  25 percent of the amount that the district received in the 
 30.1   fiscal year 2003 appropriation in subdivision 1. 
 30.2      Subd. 5.  [CALCULATION.] For the purpose of calculating the 
 30.3   pupil loss of independent school district No. 2142, St. Louis 
 30.4   county, under subdivision 1, the department of children, 
 30.5   families, and learning shall calculate the loss in the 
 30.6   Babbitt-Embarass and Tower-Soudan attendance areas only. 
 30.7      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 30.8   following final enactment. 
 30.9      Sec. 12.  [STAFF DEVELOPMENT REVENUE ALLOCATION.] 
 30.10     Notwithstanding Minnesota Statutes, section 122A.61, school 
 30.11  districts may reallocate up to one-half of the basic revenue 
 30.12  reserved for staff development for any operating expenses in 
 30.13  fiscal year 2003 only, unless a majority of licensed teachers in 
 30.14  the district vote to oppose the staff development revenue 
 30.15  reallocation. 
 30.16     Sec. 13.  [FUND TRANSFER; BUTTERFIELD.] 
 30.17     Notwithstanding Minnesota Statutes, section 123B.79 or 
 30.18  123B.80, on June 30, 2002, independent school district No. 836, 
 30.19  Butterfield, may permanently transfer up to $117,000 from its 
 30.20  reserves for operating capital account in its general fund to 
 30.21  the undesignated fund balance. 
 30.22     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 30.23  following final enactment. 
 30.24     Sec. 14.  [FUND TRANSFER; TRUMAN.] 
 30.25     Notwithstanding Minnesota Statutes, section 123B.79 or 
 30.26  123B.80, on June 30, 2002, independent school district No. 458, 
 30.27  Truman, may permanently transfer up to $500,000 from its 
 30.28  reserves for operating capital account in its general fund to 
 30.29  the undesignated fund balance. 
 30.30     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 30.31  following final enactment. 
 30.32     Sec. 15.  [FUND TRANSFER.] 
 30.33     Notwithstanding Minnesota Statutes, section 123B.79 or 
 30.34  123B.80, for fiscal year 2003 only, a school district, with the 
 30.35  approval of the school board, may permanently transfer any 
 30.36  available amount from its reserve for operating capital account 
 31.1   in its general fund to its undesignated fund balance.  A school 
 31.2   district that utilizes the operating capital account in 
 31.3   combination with the debt service equalization program, under 
 31.4   Minnesota Statutes, section 123B.53, to support a building 
 31.5   program may not utilize this fund transfer authority. 
 31.6      Sec. 16.  [APPROPRIATION.] 
 31.7      (a) $300,000 in fiscal year 2003 is appropriated from the 
 31.8   general fund to the commissioner of children, families, and 
 31.9   learning for declining pupil unit aid to independent school 
 31.10  district No. 241, Albert Lea. 
 31.11     (b) In addition to the amounts appropriated for general and 
 31.12  supplemental education aid, $295,000 in fiscal year 2003 is 
 31.13  appropriated from the general fund to the commissioner of 
 31.14  children, families, and learning for the aid portion of the 
 31.15  referendum transfer adjustment for independent school district 
 31.16  No. 709, Duluth. 
 31.17     (c) $1,000,000 in fiscal year 2003 is appropriated from the 
 31.18  general fund to the commissioner of children, families, and 
 31.19  learning for declining pupil unit aid to independent school 
 31.20  districts Nos. 706, Virginia; 2154, Eveleth-Gilbert; 2711, 
 31.21  Mesabi East; and 2142, St. Louis county. 
 31.22     Sec. 17.  [EFFECTIVE DATE.] 
 31.23     Except as otherwise provided in this article, this article 
 31.24  is effective the day following final enactment. 
 31.25                             ARTICLE 5
 31.26                          EDUCATION LEVIES
 31.27     Section 1.  Minnesota Statutes 2001 Supplement, section 
 31.28  124D.86, subdivision 3, is amended to read: 
 31.29     Subd. 3.  [INTEGRATION REVENUE.] Integration revenue equals 
 31.30  the following amounts: 
 31.31     (1) for independent school district No. 709, Duluth, $207 
 31.32  times the adjusted pupil units for the school year; 
 31.33     (2) for independent school district No. 625, St. Paul, and 
 31.34  for special school district No. 1, Minneapolis, $446 times the 
 31.35  adjusted pupil units for the school year; 
 31.36     (3) for special school district No. 1, Minneapolis, the sum 
 32.1   of $446 times the adjusted pupil units for the school year and 
 32.2   an additional $35 times the adjusted pupil units for the school 
 32.3   year that is provided entirely through a local levy; 
 32.4      (4) for a district not listed in clause (1) or, (2), or 
 32.5   (3), that must implement a plan under Minnesota Rules, parts 
 32.6   3535.0100 to 3535.0180, where the district's enrollment of 
 32.7   protected students, as defined under Minnesota Rules, part 
 32.8   3535.0110, exceeds 15 percent, the lesser of (i) the actual cost 
 32.9   of implementing the plan during the fiscal year minus the aid 
 32.10  received under subdivision 6, or (ii) $130 times the adjusted 
 32.11  pupil units for the school year; 
 32.12     (4) (5) for a district not listed in clause (1), (2), 
 32.13  or (3), or (4), that is required to implement a plan according 
 32.14  to the requirements of Minnesota Rules, parts 3535.0100 to 
 32.15  3535.0180, the lesser of 
 32.16     (i) the actual cost of implementing the plan during the 
 32.17  fiscal year minus the aid received under subdivision 6, or 
 32.18     (ii) $93 times the adjusted pupil units for the school year.
 32.19     Any money received by districts in clauses (1) to (3) (4) 
 32.20  which exceeds the amount received in fiscal year 2000 shall be 
 32.21  subject to the budget requirements in subdivision 1a; and 
 32.22     (5) (6) for a member district of a multidistrict 
 32.23  integration collaborative that files a plan with the 
 32.24  commissioner, but is not contiguous to a racially isolated 
 32.25  district, integration revenue equals the amount defined in 
 32.26  clause (4) (5). 
 32.27     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 32.28  following final enactment for revenue for fiscal year 2003. 
 32.29     Sec. 2.  Minnesota Statutes 2001 Supplement, section 
 32.30  126C.40, subdivision 1, is amended to read: 
 32.31     Subdivision 1.  [TO LEASE BUILDING OR LAND.] (a) When a an 
 32.32  independent or a special school district or a group of 
 32.33  independent or special school districts finds it economically 
 32.34  advantageous to rent or lease a building or land for any 
 32.35  instructional purposes or for school storage or furniture 
 32.36  repair, and it determines that the operating capital revenue 
 33.1   authorized under section 126C.10, subdivision 13, is 
 33.2   insufficient for this purpose, it may apply to the commissioner 
 33.3   for permission to make an additional capital expenditure levy 
 33.4   for this purpose.  An application for permission to levy under 
 33.5   this subdivision must contain financial justification for the 
 33.6   proposed levy, the terms and conditions of the proposed lease, 
 33.7   and a description of the space to be leased and its proposed use.
 33.8      (b) The criteria for approval of applications to levy under 
 33.9   this subdivision must include:  the reasonableness of the price, 
 33.10  the appropriateness of the space to the proposed activity, the 
 33.11  feasibility of transporting pupils to the leased building or 
 33.12  land, conformity of the lease to the laws and rules of the state 
 33.13  of Minnesota, and the appropriateness of the proposed lease to 
 33.14  the space needs and the financial condition of the district.  
 33.15  The commissioner must not authorize a levy under this 
 33.16  subdivision in an amount greater than the cost to the district 
 33.17  of renting or leasing a building or land for approved purposes.  
 33.18  The proceeds of this levy must not be used for custodial or 
 33.19  other maintenance services.  A district may not levy under this 
 33.20  subdivision for the purpose of leasing or renting a 
 33.21  district-owned building or site to itself. 
 33.22     (c) For agreements finalized after July 1, 1997, a district 
 33.23  may not levy under this subdivision for the purpose of leasing:  
 33.24  (1) a newly constructed building used primarily for regular 
 33.25  kindergarten, elementary, or secondary instruction; or (2) a 
 33.26  newly constructed building addition or additions used primarily 
 33.27  for regular kindergarten, elementary, or secondary instruction 
 33.28  that contains more than 20 percent of the square footage of the 
 33.29  previously existing building. 
 33.30     (d) Notwithstanding paragraph (b), a district may levy 
 33.31  under this subdivision for the purpose of leasing or renting a 
 33.32  district-owned building or site to itself only if the amount is 
 33.33  needed by the district to make payments required by a lease 
 33.34  purchase agreement, installment purchase agreement, or other 
 33.35  deferred payments agreement authorized by law, and the levy 
 33.36  meets the requirements of paragraph (c).  A levy authorized for 
 34.1   a district by the commissioner under this paragraph may be in 
 34.2   the amount needed by the district to make payments required by a 
 34.3   lease purchase agreement, installment purchase agreement, or 
 34.4   other deferred payments agreement authorized by law, provided 
 34.5   that any agreement include a provision giving the school 
 34.6   districts the right to terminate the agreement annually without 
 34.7   penalty. 
 34.8      (e) The total levy under this subdivision for a district 
 34.9   for any year must not exceed $100 times the resident pupil units 
 34.10  for the fiscal year to which the levy is attributable. 
 34.11     (f) For agreements for which a review and comment have been 
 34.12  submitted to the department of children, families, and learning 
 34.13  after April 1, 1998, the term "instructional purpose" as used in 
 34.14  this subdivision excludes expenditures on stadiums. 
 34.15     (g) The commissioner of children, families, and learning 
 34.16  may authorize a school district to exceed the limit in paragraph 
 34.17  (e) if the school district petitions the commissioner for 
 34.18  approval.  The commissioner shall grant approval to a school 
 34.19  district to exceed the limit in paragraph (e) for not more than 
 34.20  five years if the district meets the following criteria: 
 34.21     (1) the school district has been experiencing pupil 
 34.22  enrollment growth in the preceding five years; 
 34.23     (2) the purpose of the increased levy is in the long-term 
 34.24  public interest; 
 34.25     (3) the purpose of the increased levy promotes colocation 
 34.26  of government services; and 
 34.27     (4) the purpose of the increased levy is in the long-term 
 34.28  interest of the district by avoiding over construction of school 
 34.29  facilities. 
 34.30     (h) A school district that is a member of an intermediate 
 34.31  school district may include in its authority under this section 
 34.32  the costs associated with leases of administrative and classroom 
 34.33  space for intermediate school district programs.  This authority 
 34.34  must not exceed $25 times the adjusted marginal cost pupil units 
 34.35  of the member districts.  This authority is in addition to any 
 34.36  other authority authorized under this section. 
 35.1      (i) In addition to the allowable capital levies in 
 35.2   paragraph (a), a district that is a member of the "Total 
 35.3   Information for Educational Systems" data processing joint 
 35.4   board, that finds it economically advantageous to enter into a 
 35.5   lease purchase agreement for a building for a group of school 
 35.6   districts or special school districts for staff development 
 35.7   purposes, may levy for its portion of lease costs attributed to 
 35.8   the district within the total levy limit in paragraph (e). 
 35.9      <h>[EFFECTIVE DATE.]</h> This section is effective for revenue for 
 35.10  fiscal year 2003. 
 35.11     Sec. 3.  Minnesota Statutes 2001 Supplement, section 
 35.12  126C.43, subdivision 3, is amended to read: 
 35.13     Subd. 3.  [TAX LEVY FOR JUDGMENT.] A district may levy the 
 35.14  amounts necessary to pay judgments against the district under 
 35.15  section 123B.25 that became final after the date the district 
 35.16  certified its proposed levy in the previous year.  With the 
 35.17  approval of the commissioner, a district may spread this levy 
 35.18  over a period not to exceed three years.  Upon approval through 
 35.19  the adoption of a resolution by each of an intermediate 
 35.20  district's member school district boards, a member school 
 35.21  district may include its proportionate share of the costs of a 
 35.22  judgment against an intermediate school district that became 
 35.23  final under section 123B.25 after the date that the earliest 
 35.24  member school district certified its proposed levy in the 
 35.25  previous year.  With the approval of the commissioner, an 
 35.26  intermediate school district member school district may spread 
 35.27  this levy over a period not to exceed three years. 
 35.28     <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
 35.29  payable in 2003 and later. 
 35.30     Sec. 4.  Minnesota Statutes 2000, section 126C.44, is 
 35.31  amended to read: 
 35.32     126C.44 [CRIME-RELATED COSTS SAFE SCHOOLS LEVY.] 
 35.33     Each district may make a levy on all taxable property 
 35.34  located within the district for the purposes specified in this 
 35.35  section.  The maximum amount which may be levied for all costs 
 35.36  under this section shall be equal to $11 $30 multiplied by the 
 36.1   district's adjusted marginal cost pupil units for the school 
 36.2   year.  The proceeds of the levy must be used for directly 
 36.3   funding the following purposes or for reimbursing the cities and 
 36.4   counties who contract with the district for the following 
 36.5   purposes:  (1) to pay the costs incurred for the salaries, 
 36.6   benefits, and transportation costs of peace officers and 
 36.7   sheriffs for liaison in services in the district's schools; (2) 
 36.8   to pay the costs for a drug abuse prevention program as defined 
 36.9   in section 609.101, subdivision 3, paragraph (e), in the 
 36.10  elementary schools; (3) to pay the costs for a gang resistance 
 36.11  education training curriculum in the district's schools; (4) to 
 36.12  pay the costs for security in the district's schools and on 
 36.13  school property; or (5) to pay the costs for other crime 
 36.14  prevention, drug abuse, student and staff safety, and violence 
 36.15  prevention measures taken by the school district.  The district 
 36.16  must initially attempt to contract for services to be provided 
 36.17  by peace officers or sheriffs with the police department of each 
 36.18  city or the sheriff's department of the county within the 
 36.19  district containing the school receiving the services.  If a 
 36.20  local police department or a county sheriff's department does 
 36.21  not wish to provide the necessary services, the district may 
 36.22  contract for these services with any other police or sheriff's 
 36.23  department located entirely or partially within the school 
 36.24  district's boundaries.  The levy authorized under this section 
 36.25  is not included in determining the school district's levy 
 36.26  limitations. 
 36.27     <h>[EFFECTIVE DATE.]</h> This section is effective for revenue for 
 36.28  levies payable in 2003 and thereafter. 
 36.29     Sec. 5.  [STAFF DEVELOPMENT LEVY.] 
 36.30     For taxes payable in 2003 only, each school district that 
 36.31  reallocates staff development revenue under article 4, section 
 36.32  12, shall levy an equivalent amount and dedicate the revenue for 
 36.33  staff development purposes under Minnesota Statutes, section 
 36.34  122A.61, subdivision 1. 
 36.35     <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
 36.36  payable in 2003 and shall be recognized in fiscal year 2003. 
 37.1      Sec. 6.  [DISABLED ACCESS LEVY AUTHORITY; WESTBROOK-WALNUT 
 37.2   GROVE.] 
 37.3      Notwithstanding the time limit in Minnesota Statutes, 
 37.4   section 123B.58, subdivision 3, independent school district No. 
 37.5   2898, Westbrook-Walnut Grove, may levy its remaining disabled 
 37.6   access levy authority over five or fewer years. 
 37.7      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 37.8   following final enactment. 
 37.9      Sec. 7.  [DISABLED ACCESS LEVY AUTHORITY; PINE CITY.] 
 37.10     Notwithstanding the time limits in Minnesota Statutes, 
 37.11  section 123B.58, subdivision 3, independent school district No. 
 37.12  578, Pine City, may levy its remaining disabled access levy 
 37.13  authority over five or fewer years.  
 37.14     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 37.15  following final enactment. 
 37.16     Sec. 8.  [BLUE EARTH AREA PUBLIC SCHOOLS.] 
 37.17     In addition to other levies, for taxes payable in 2003 
 37.18  through 2012, independent school district No. 2860, Blue Earth 
 37.19  Area public school, may levy up to $46,000 each year for up to 
 37.20  ten years for the costs associated with the replacement of a 
 37.21  boiler at Blue Earth Area elementary/junior high. 
 37.22     Sec. 9.  [LEVY; ELY.] 
 37.23     Independent school district No. 696, Ely, may levy up to 
 37.24  $100,000 in taxes payable in 2003 for the development and 
 37.25  completion of the boundary waters wilderness program.  
 37.26     <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
 37.27  payable in 2003. 
 37.28                             ARTICLE 6
 37.29                          HIGHER EDUCATION
 37.30     Section 1.  Laws 2002, chapter 220, article 5, section 1, 
 37.31  is amended to read: 
 37.32  Section 1.  [HIGHER EDUCATION APPROPRIATIONS.] 
 37.33     The dollar amounts in the columns marked "APPROPRIATIONS" 
 37.34  are added to or, if shown in parentheses, are subtracted from 
 37.35  the appropriations in Laws 2001, First Special Session chapter 
 37.36  1, or other law to the specified agencies.  The appropriations 
 38.1   are from the general fund or any other named fund and are 
 38.2   available for the fiscal years indicated for each purpose.  The 
 38.3   figure 2002 or 2003 means that the addition to or subtraction 
 38.4   from the appropriations listed under the figure are for the 
 38.5   fiscal year ending June 30, 2002, or June 30, 2003, 
 38.6   respectively.  If only one figure is shown in the text for a 
 38.7   specified purpose, the addition or subtraction is for 2002 
 38.8   unless the context intends another fiscal year. 
 38.9                           SUMMARY BY FUND
 38.10                            2002          2003           TOTAL
 38.11  General            $ ( 2,744,000) $ (47,256,000) $ (50,000,000)
 38.12                         2,256,000    (47,256,000)   (45,000,000)
 38.13                   SUMMARY BY AGENCY - ALL FUNDS
 38.14                            2002          2003           TOTAL
 38.15  Higher Education 
 38.16  Services Office   $ ( 2,744,000)  $ (   931,000) $ ( 3,675,000)
 38.17                        2,256,000                      1,325,000 
 38.18  Board of Trustees of 
 38.19  the Minnesota State Colleges 
 38.20  and Universities                  $ (22,692,000) $ (22,692,000)
 38.21  Board of Regents of the 
 38.22  University of Minnesota           $ (23,633,000) $ (23,633,000)
 38.23                                APPROPRIATIONS 
 38.24                            Available for the Year 
 38.25                                Ending June 30 
 38.26                              2002         2003 
 38.27     Sec. 2.  Laws 2002, chapter 220, article 5, section 2, 
 38.28  subdivision 1, is amended to read: 
 38.29  Subdivision 1.  Total       
 38.30  Appropriation Changes   (2,744,000)   (  931,000)  ( 3,675,000)
 38.31                           2,256,000                   1,325,000
 38.32     Sec. 3.  Laws 2002, chapter 220, article 5, section 2, 
 38.33  subdivision 2, is amended to read: 
 38.34  Subd. 2.  State Grants   1,460,000     2,995,000     4,455,000
 38.35                           6,460,000                   9,455,000
 38.36  Notwithstanding Laws 2001, First 
 38.37  Special Session chapter 1, article 1, 
 38.38  section 2, subdivision 2, savings in 
 38.39  the state grant program in fiscal year 
 38.40  2003 resulting from any increase in the 
 38.41  maximum federal grant over $3,750 or 
 38.42  from any other source, after use to 
 38.43  provide additional decreases in the 
 38.44  family responsibility for independent 
 39.1   students as provided by law, shall 
 39.2   remain in the state grant program.  
 39.3   A reduction of $75,000 each year is 
 39.4   made to appropriations for the summer 
 39.5   scholarship program.  A reduction of 
 39.6   $125,000 each year is made to 
 39.7   appropriations for the national service 
 39.8   scholars program.  The appropriation 
 39.9   for the advanced placement scholarship 
 39.10  is reduced by $75,000 in fiscal year 
 39.11  2003. 
 39.12     Sec. 4.  [FULL STATE GRANT AWARDS.] 
 39.13     The higher education services office shall transfer to the 
 39.14  state grant appropriation from the work study appropriation and 
 39.15  notwithstanding Minnesota Statutes, section 136A.125, 
 39.16  subdivision 4c, from the child care grant appropriation in Laws 
 39.17  2001, First Special Session, chapter 1, article 1, section 2, 
 39.18  the amount necessary, if any, to make full state grant awards in 
 39.19  fiscal year 2003. 
 39.20                             ARTICLE 7
 39.21                 ENVIRONMENT AND NATURAL RESOURCES
 39.22     Section 1.  Minnesota Statutes 2000, section 115A.557, 
 39.23  subdivision 1, is amended to read: 
 39.24     Subdivision 1.  [DISTRIBUTION; FORMULA.] Any funds 
 39.25  appropriated to the director for the purpose of distribution to 
 39.26  counties under this section must be distributed each fiscal year 
 39.27  by the director based on population, except a county may not 
 39.28  receive less than $55,000 in a fiscal year.  If the amount 
 39.29  available for distribution under this section is less than the 
 39.30  amount available in fiscal year 2001, the minimum county payment 
 39.31  under this section is reduced proportionately.  For purposes of 
 39.32  this subdivision, "population" has the definition given in 
 39.33  section 477A.011, subdivision 3.  A county that participates in 
 39.34  a multicounty district that manages solid waste and that has 
 39.35  responsibility for recycling programs as authorized in section 
 39.36  115A.552, must pass through to the districts funds received by 
 39.37  the county in excess of the $55,000 annual base minimum county 
 39.38  payment under this section in proportion to the population of 
 39.39  the county served by that district. 
 39.40     Sec. 2.  Laws 2002, chapter 220, article 8, section 15, is 
 40.1   amended to read: 
 40.2      Sec. 15.  [INCREASE TO WATER QUALITY PERMIT FEES.] 
 40.3      (a) The pollution control agency shall collect water 
 40.4   quality permit application and annual fees that reflect the fees 
 40.5   in Minnesota Rules, part 7002.0310, increased to the amounts 
 40.6   described in paragraphs (b) to (g). 
 40.7      (b) The application fee for individual permits, general 
 40.8   permits, and general industrial stormwater permits is $240. 
 40.9      (c) The annual fees for individual National Pollutant 
 40.10  Discharge Elimination System permits for major municipal 
 40.11  facilities are as follows: 
 40.12        Design Flow in  
 40.13        Million Gallons Per Day           Annual Fee
 40.15          50 and over                      $175,750 $175,500
 40.16          20 to 49.99                       $40,350
 40.17           5 to 19.99                       $14,350
 40.18           Up to 4.99                        $5,900
 40.19     (d) The annual fees for individual National Pollutant 
 40.20  Discharge Elimination System permits for major nonmunicipal 
 40.21  facilities are as follows: 
 40.22        Design Flow in  
 40.23        Million Gallons Per Day           Annual Fee 
 40.25          20 to 49.99                       $44,200
 40.26           5 to 19.99                       $18,250
 40.27           Up to 4.99                        $8,450
 40.28          Cooling or mine pit 
 40.29          dewatering (any flow)             $16,900
 40.30     (e) The annual fees for individual National Pollutant 
 40.31  Discharge Elimination System and State Disposal System permits 
 40.32  for nonmajor municipal facilities with design flows greater than 
 40.33  0.100 million gallons per day are $1,450. 
 40.34     (f) The annual fees for general industrial stormwater 
 40.35  permits are $280. 
 40.36     (g) The annual fees for general National Pollutant 
 40.37  Discharge Elimination System and State Disposal System permits 
 40.38  are $345. 
 40.39     (h) The application and annual fees are not increased for 
 40.40  general construction stormwater permits and sanitary sewer 
 40.41  extension permits.  The annual fees are not increased for 
 40.42  National Pollutant Discharge Elimination System and State 
 41.1   Disposal System permits regulating municipal nonmajors with 
 41.2   facility design flow of 0 to .100, sewage sludge landspreading 
 41.3   facilities, and nonmajor nonmunicipal facilities. 
 41.4      (i) The increased permit fees are effective July 1, 2002.  
 41.5   The agency shall adopt amended water quality permit fee rules 
 41.6   incorporating the permit fee increases in this subdivision under 
 41.7   Minnesota Statutes, section 14.389.  The pollution control 
 41.8   agency shall begin collecting the increased permit fees on July 
 41.9   1, 2002, even if the rule adoption process has not been 
 41.10  initiated or completed.  Notwithstanding Minnesota Statutes, 
 41.11  section 14.18, subdivision 2, the increased permit fees 
 41.12  reflecting the permit fee increases in this section and the rule 
 41.13  amendments incorporating those permit fee increases do not 
 41.14  require further legislative approval. 
 41.15     Sec. 3.  Laws 2002, chapter 220, article 9, section 2, 
 41.16  subdivision 4, is amended to read: 
 41.17  Subd. 4.  Administration and
 41.18  Financial Assistance 
 41.19        (5,000)       (489,000)
 41.20  $5,000 the first year and $2,000 the 
 41.21  second year of this reduction are from 
 41.22  family farm security interest payment 
 41.23  adjustments. 
 41.24  $175,000 the second year of this 
 41.25  reduction is from grants to agriculture 
 41.26  information centers. 
 41.27  $11,500 the second year of this 
 41.28  reduction is from the appropriation for 
 41.29  the Seaway Port Authority of Duluth. 
 41.30  Base funding for the administration and 
 41.31  financial assistance program is 
 41.32  $4,344,000 for the fiscal year 
 41.33  beginning July 1, 2003. 
 41.34     Sec. 4. [EFFECTIVE DATE.] 
 41.35     This article is effective the day following final enactment.
 41.36                             ARTICLE 8
 41.37                           PUBLIC SAFETY
 41.38     Section 1.  Minnesota Statutes 2000, section 13.871, 
 41.39  subdivision 5, as amended by Laws 2002, chapter 220, article 7, 
 41.40  section 6, is amended to read: 
 41.41     Subd. 5.  [CRIME VICTIMS.] (a)  [CRIME VICTIM NOTICE OF 
 42.1   RELEASE.] Data on crime victims who request notice of an 
 42.2   offender's release are classified under section 611A.06.  
 42.3      (b)  [SEX OFFENDER HIV TESTS.] Results of HIV tests of sex 
 42.4   offenders under section 611A.19, subdivision 2, are classified 
 42.5   under that section.  
 42.6      (c)  [BATTERED WOMEN.] Data on battered women maintained by 
 42.7   grantees for emergency shelter and support services for battered 
 42.8   women are governed by section 611A.32, subdivision 5.  
 42.9      (d) [VICTIMS OF DOMESTIC ABUSE.] Data on battered women and 
 42.10  victims of domestic abuse maintained by grantees and recipients 
 42.11  of per diem payments for emergency shelter for battered women 
 42.12  and support services for battered women and victims of domestic 
 42.13  abuse are governed by sections 611A.32, subdivision 5, and 
 42.14  611A.371, subdivision 3. 
 42.15     (e)  [CRIME VICTIM CLAIMS FOR REPARATIONS.] Claims and 
 42.16  supporting documents filed by crime victims seeking reparations 
 42.17  are classified under section 611A.57, subdivision 6.  
 42.18     (f)  [CRIME VICTIM OVERSIGHT ACT OMBUDSMAN.] Data 
 42.19  maintained by the commissioner of public safety under the crime 
 42.20  victim Oversight Act ombudsman are classified under section 
 42.21  611A.74, subdivision 2.  
 42.22     Sec. 2.  Minnesota Statutes 2000, section 135A.15, 
 42.23  subdivision 1, as amended by Laws 2002, chapter 220, article 7, 
 42.24  section 8, is amended to read: 
 42.25     Subdivision 1.  [POLICY REQUIRED.] The board of trustees of 
 42.26  the Minnesota state colleges and universities shall, and the 
 42.27  University of Minnesota is requested to, adopt a clear, 
 42.28  understandable written policy on sexual harassment and sexual 
 42.29  violence that informs victims of their rights under the crime 
 42.30  victims bill of rights, including the right to assistance from 
 42.31  the crime victims reparations board and the commissioner of 
 42.32  public safety office of the crime victim ombudsman.  The policy 
 42.33  must apply to students and employees and must provide 
 42.34  information about their rights and duties.  The policy must 
 42.35  apply to criminal incidents occurring on property owned by the 
 42.36  post-secondary system or institution in which the victim is a 
 43.1   student or employee of that system or institution.  It must 
 43.2   include procedures for reporting incidents of sexual harassment 
 43.3   or sexual violence and for disciplinary actions against 
 43.4   violators.  During student registration, each technical college, 
 43.5   community college, or state university shall, and the University 
 43.6   of Minnesota is requested to, provide each student with 
 43.7   information regarding its policy.  A copy of the policy also 
 43.8   shall be posted at appropriate locations on campus at all 
 43.9   times.  Each private post-secondary institution that is an 
 43.10  eligible institution as defined in section 136A.101, subdivision 
 43.11  4, must adopt a policy that meets the requirements of this 
 43.12  section. 
 43.13     Sec. 3.  Minnesota Statutes 2001 Supplement, section 
 43.14  256.022, subdivision 1, as amended by Laws 2002, chapter 220, 
 43.15  article 7, section 11, is amended to read: 
 43.16     Subdivision 1.  [CREATION.] The commissioner of human 
 43.17  services shall establish a review panel for purposes of 
 43.18  reviewing investigating agency determinations regarding 
 43.19  maltreatment of a child in a facility in response to requests 
 43.20  received under section 626.556, subdivision 10i, paragraph (b).  
 43.21  The review panel consists of the commissioners of health; human 
 43.22  services; children, families, and learning; public safety; and 
 43.23  corrections; the ombudsman for crime victims; and the ombudsman 
 43.24  for mental health and mental retardation; or their designees. 
 43.25     Sec. 4. Minnesota Statutes 2000, section 611A.371, 
 43.26  subdivision 1, as amended by Laws 2002, chapter 220, article 7, 
 43.27  section 16, is amended to read: 
 43.28     Subdivision 1.  [PURPOSE.] The purpose of the grant per 
 43.29  diem program is to provide reimbursement in a timely, efficient 
 43.30  manner to local programs for the reasonable and necessary costs 
 43.31  of providing battered women and their children with food, 
 43.32  lodging, and safety.  Grant Per diem funding may not be used for 
 43.33  other purposes. 
 43.34     Sec. 5.  Minnesota Statutes 2001 Supplement, section 
 43.35  611A.372, as amended by Laws 2002, chapter 220, article 7, 
 43.36  section 17, is amended to read: 
 44.1      611A.372 [DUTIES OF DIRECTOR.] 
 44.2      In addition to any other duties imposed by law, the 
 44.3   director, with the approval of the commissioner of public 
 44.4   safety, shall: 
 44.5      (1) supervise the administration of grant per diem payments 
 44.6   to designated shelter facilities; 
 44.7      (2) collect data on shelter facilities; 
 44.8      (3) conduct an annual evaluation of the grant per diem 
 44.9   program; 
 44.10     (4) report to the governor and the legislature on the need 
 44.11  for emergency secure shelter; 
 44.12     (5) develop an application process for shelter facilities 
 44.13  to follow in seeking reimbursement under the grant per diem 
 44.14  program; and 
 44.15     (6) adopt rules to implement and administer sections 
 44.16  611A.37 to 611A.375. 
 44.17     Sec. 6.  Minnesota Statutes 2000, section 611A.373, 
 44.18  subdivision 1, as amended by Laws 2002, chapter 220, article 7, 
 44.19  section 18, is amended to read: 
 44.20     Subdivision 1.  [PAYMENT REQUESTS.] Payments to designated 
 44.21  shelter facilities must be in the form of a grant.  Designated 
 44.22  shelter facilities may submit requests for payment monthly based 
 44.23  on their expenses.  The process for the submission of payments 
 44.24  and for the submission of requests may be established by the 
 44.25  director the number of persons housed.  Upon approval of the 
 44.26  request for payment by the center, payments shall be made 
 44.27  directly to designated shelter facilities from grant per diem 
 44.28  funds on behalf of women and their children who reside in the 
 44.29  shelter facility.  Payments made to a designated shelter 
 44.30  facility must not exceed the grant annual reserve amount for 
 44.31  that facility unless approved by the director.  These payments 
 44.32  must not affect the eligibility of individuals who reside in 
 44.33  shelter facilities for public assistance benefits, except when 
 44.34  required by federal law or regulation. 
 44.35     Sec. 7.  Minnesota Statutes 2000, section 611A.373, 
 44.36  subdivision 2, as amended by Laws 2002, chapter 220, article 7, 
 45.1   section 18, is amended to read: 
 45.2      Subd. 2.  [RESERVE GRANT AMOUNT.] The center shall 
 45.3   calculate the grant annually the reserve amount for each 
 45.4   designated shelter facility.  This calculation may be based upon 
 45.5   program type, average occupancy rates, and licensed capacity 
 45.6   limits.  The total of all grant reserve amounts shall not exceed 
 45.7   the legislative per diem appropriation. 
 45.8      Sec. 8.  Minnesota Statutes 2000, section 611A.72, as 
 45.9   amended by Laws 2002, chapter 220, article 7, section 19, is 
 45.10  amended to read: 
 45.11     611A.72 [CITATION.] 
 45.12     Sections 611A.72 to 611A.74 may be cited as the "Crime 
 45.13  Victim Oversight Ombudsman Act." 
 45.14     Sec. 9.  Minnesota Statutes 2000, section 611A.73, 
 45.15  subdivision 2, as amended by Laws 2002, chapter 220, article 7, 
 45.16  section 20, is amended to read: 
 45.17     Subd. 2.  [APPROPRIATE AUTHORITY.] "Appropriate authority" 
 45.18  includes anyone who is the subject of a complaint under sections 
 45.19  611A.72 to 611A.74 to the commissioner crime victim ombudsman or 
 45.20  anyone within the agency who is in a supervisory position with 
 45.21  regard to one who is the subject of a complaint under sections 
 45.22  611A.72 to 611A.74. 
 45.23     Sec. 10.  Minnesota Statutes 2001 Supplement, section 
 45.24  611A.74, subdivision 1, as amended by Laws 2002, chapter 220, 
 45.25  article 7, section 22, is amended to read: 
 45.26     Subdivision 1.  [AUTHORITY UNDER THIS ACT CREATION.] The 
 45.27  office of crime victim ombudsman for Minnesota is created.  The 
 45.28  ombudsman shall be appointed by the governor, shall serve in the 
 45.29  unclassified service at the pleasure of the governor, and shall 
 45.30  be selected without regard to political affiliation.  No person 
 45.31  may serve as ombudsman while holding any other public office.  
 45.32  The ombudsman is directly accountable to the governor and must 
 45.33  periodically report to the commissioner of public safety on the 
 45.34  operations and activities of the office.  The commissioner 
 45.35  ombudsman shall have the authority under sections 611A.72 to 
 45.36  611A.74 to investigate decisions, acts, and other matters of the 
 46.1   criminal justice system so as to promote the highest attainable 
 46.2   standards of competence, efficiency, and justice for crime 
 46.3   victims in the criminal justice system. 
 46.4      Sec. 11.  Minnesota Statutes 2000, section 611A.74, 
 46.5   subdivision 2, as amended by Laws 2002, chapter 220, article 7, 
 46.6   section 23, is amended to read: 
 46.7      Subd. 2.  [DUTIES.] The commissioner crime victim ombudsman 
 46.8   may investigate complaints concerning possible violation of the 
 46.9   rights of crime victims or witnesses provided under this 
 46.10  chapter, the delivery of victim services by victim assistance 
 46.11  programs, the administration of the crime victims reparations 
 46.12  act, and other complaints of mistreatment by elements of the 
 46.13  criminal justice system or victim assistance programs.  
 46.14  The commissioner ombudsman shall act as a liaison, when 
 46.15  the commissioner ombudsman deems necessary, between agencies, 
 46.16  either in the criminal justice system or in victim assistance 
 46.17  programs, and victims and witnesses.  The commissioner ombudsman 
 46.18  may be concerned with activities that strengthen procedures and 
 46.19  practices which lessen the risk that objectionable 
 46.20  administrative acts will occur.  The commissioner ombudsman must 
 46.21  be made available through the use of a toll-free telephone 
 46.22  number and shall answer questions concerning the criminal 
 46.23  justice system and victim services put to the commissioner 
 46.24  ombudsman by victims and witnesses in accordance with 
 46.25  the commissioner's ombudsman's knowledge of the facts or law, 
 46.26  unless the information is otherwise restricted.  The 
 46.27  commissioner ombudsman shall establish a procedure for referral 
 46.28  to the crime victim crisis centers, the crime victims 
 46.29  reparations board, and other victim assistance programs when 
 46.30  services are requested by crime victims or deemed necessary by 
 46.31  the commissioner ombudsman.  
 46.32     The commissioner's ombudsman's files are confidential data 
 46.33  as defined in section 13.02, subdivision 3, during the course of 
 46.34  an investigation or while the files are active.  Upon completion 
 46.35  of the investigation or when the files are placed on inactive 
 46.36  status, they are private data on individuals as defined in 
 47.1   section 13.02, subdivision 12. 
 47.2      Sec. 12.  Minnesota Statutes 2000, section 611A.74, 
 47.3   subdivision 3, as amended by Laws 2002, chapter 220, article 7, 
 47.4   section 24, is amended to read: 
 47.5      Subd. 3.  [POWERS.] The commissioner crime victim ombudsman 
 47.6   has those powers necessary to carry out the duties set out in 
 47.7   subdivision 2, including:  
 47.8      (a) The commissioner ombudsman may investigate, with or 
 47.9   without a complaint, any action of an element of the criminal 
 47.10  justice system or a victim assistance program included in 
 47.11  subdivision 2. 
 47.12     (b) The commissioner ombudsman may request and shall be 
 47.13  given access to information and assistance the commissioner 
 47.14  ombudsman considers necessary for the discharge of 
 47.15  responsibilities.  The commissioner ombudsman may inspect, 
 47.16  examine, and be provided copies of records and documents of all 
 47.17  elements of the criminal justice system and victim assistance 
 47.18  programs.  The commissioner ombudsman may request and shall be 
 47.19  given access to police reports pertaining to juveniles and 
 47.20  juvenile delinquency petitions, notwithstanding section 260B.171 
 47.21  or 260C.171.  Any information received by the commissioner 
 47.22  ombudsman retains its data classification under chapter 13 while 
 47.23  in the commissioner's ombudsman's possession.  Juvenile records 
 47.24  obtained under this subdivision may not be released to any 
 47.25  person. 
 47.26     (c) The commissioner ombudsman may prescribe the methods by 
 47.27  which complaints are to be made, received, and acted upon; may 
 47.28  determine the scope and manner of investigations to be made; and 
 47.29  subject to the requirements of sections 611A.72 to 611A.74, may 
 47.30  determine the form, frequency, and distribution of commissioner 
 47.31  ombudsman conclusions, recommendations, and proposals.  
 47.32     (d) After completing investigation of a complaint, the 
 47.33  commissioner ombudsman shall inform in writing the complainant, 
 47.34  the investigated person or entity, and other appropriate 
 47.35  authorities of the action taken.  If the complaint involved the 
 47.36  conduct of an element of the criminal justice system in relation 
 48.1   to a criminal or civil proceeding, the commissioner's 
 48.2   ombudsman's findings shall be forwarded to the court in which 
 48.3   the proceeding occurred.  
 48.4      (e) Before announcing a conclusion or recommendation that 
 48.5   expressly or impliedly criticizes an administrative agency or 
 48.6   any person, the commissioner ombudsman shall consult with that 
 48.7   agency or person. 
 48.8      Sec. 13.  Minnesota Statutes 2000, section 611A.74, 
 48.9   subdivision 4, as amended by Laws 2002, chapter 220, article 7, 
 48.10  section 25, is amended to read: 
 48.11     Subd. 4.  [NO COMPELLED TESTIMONY.] Neither the 
 48.12  commissioner ombudsman nor any member of the commissioner's 
 48.13  ombudsman's staff may be compelled to testify or produce 
 48.14  evidence in any judicial or administrative proceeding with 
 48.15  respect to matters involving the exercise of official 
 48.16  duties under sections 611A.72 to 611A.74 except as may be 
 48.17  necessary to enforce the provisions of this section. 
 48.18     Sec. 14.  Minnesota Statutes 2000, section 611A.74, 
 48.19  subdivision 5, as amended by Laws 2002, chapter 220, article 7, 
 48.20  section 26, is amended to read: 
 48.21     Subd. 5.  [RECOMMENDATIONS.] (a) On finding a complaint 
 48.22  valid after duly considering the complaint and whatever material 
 48.23  the commissioner ombudsman deems pertinent, the commissioner 
 48.24  ombudsman may recommend action to the appropriate authority.  
 48.25     (b) If the commissioner ombudsman makes a recommendation to 
 48.26  an appropriate authority for action, the authority shall, within 
 48.27  a reasonable time period, but not more than 30 days, inform the 
 48.28  commissioner ombudsman about the action taken or the reasons for 
 48.29  not complying with the recommendation.  
 48.30     (c) The commissioner ombudsman may publish conclusions and 
 48.31  suggestions by transmitting them to the governor, the 
 48.32  legislature or any of its committees, the press, and others who 
 48.33  may be concerned.  When publishing an opinion adverse to an 
 48.34  administrative agency, the commissioner ombudsman shall include 
 48.35  any statement the administrative agency may have made to the 
 48.36  commissioner ombudsman by way of explaining its past 
 49.1   difficulties or its present rejection of the commissioner's 
 49.2   ombudsman's proposals. 
 49.3      Sec. 15.  Minnesota Statutes 2000, section 611A.74, 
 49.4   subdivision 6, as amended by Laws 2002, chapter 220, article 7, 
 49.5   section 27, is amended to read: 
 49.6      Subd. 6.  [REPORTS.] In addition to whatever reports the 
 49.7   commissioner ombudsman may make from time to time, the 
 49.8   commissioner ombudsman shall biennially report to the 
 49.9   legislature and to the governor concerning the exercise of 
 49.10  the commissioner's ombudsman's functions under sections 611A.72 
 49.11  to 611A.74 during the preceding biennium.  The biennial report 
 49.12  is due on or before the beginning of the legislative session 
 49.13  following the end of the biennium.  
 49.14     Sec. 16.  Laws 2001, First Special Session chapter 8, 
 49.15  article 11, section 14, as amended by Laws 2002, chapter 220, 
 49.16  article 6, section 14, is amended to read: 
 49.17     Sec. 14.  [FELONY DWI STUDY.] 
 49.18     By January July 15, 2004, and each year thereafter through 
 49.19  January July 15, 2007, the commissioner of corrections must 
 49.20  report to the chairs and ranking minority members of the house 
 49.21  and senate committees having jurisdiction over criminal justice 
 49.22  and judiciary finance issues on the implementation and effects 
 49.23  of the felony level driving while impaired offense.  The report 
 49.24  must include the following information on felony level driving 
 49.25  while impaired offenses: 
 49.26     (1) the number of persons convicted; 
 49.27     (2) the month and county of conviction; 
 49.28     (3) the offenders' ages and gender; 
 49.29     (4) the offenders' prior impaired driving histories and 
 49.30  prior criminal histories; 
 49.31     (5) the number of trials taken to verdict, separating out 
 49.32  cases tried to a judge versus cases tried to a jury, and the 
 49.33  number of convictions for each; 
 49.34     (6) the number of offenders incarcerated locally and the 
 49.35  term of incarceration; 
 49.36     (7) the number placed on probation and the length of the 
 50.1   probation; 
 50.2      (8) the number for whom probation is revoked, the reasons 
 50.3   for revocation, and the consequences imposed; 
 50.4      (9) the number given an executed prison sentence upon 
 50.5   conviction and the length of the sentence; 
 50.6      (10) the number given an executed prison sentence upon 
 50.7   revocation of probation and the length of sentence; 
 50.8      (11) the number who successfully complete treatment in 
 50.9   prison; 
 50.10     (12) the number placed on intensive supervision following 
 50.11  release from incarceration; 
 50.12     (13) the number who violate supervised release and the 
 50.13  consequences imposed; 
 50.14     (14) per diem costs, including treatment costs, for 
 50.15  offenders incarcerated under the felony sentence provisions; and 
 50.16     (15) any other information the commissioner deems relevant 
 50.17  to estimating future costs. 
 50.18     The commissioner of corrections shall share preliminary 
 50.19  information with the commissioner of administration for the 
 50.20  purpose of issuance of a request for proposals under section 6.  
 50.21     Sec. 17.  Laws 2001, First Special Session chapter 8, 
 50.22  article 11, section 17, is amended to read: 
 50.23     Sec. 17.  [EFFECTIVE DATE.] 
 50.24     Sections 1 to 11, 13, and 14 are effective August February 
 50.25  1, 2002 2003, and apply to crimes committed on or after that 
 50.26  date.  However, violations occurring before August February 1, 
 50.27  2002 2003, that are listed in Minnesota Statutes, section 
 50.28  169A.03, subdivisions 20 and 21, are considered qualified prior 
 50.29  impaired driving incidents for purposes of this act.  The 
 50.30  remaining sections are effective July 1, 2001. 
 50.31     Sec. 18.  Laws 2001, First Special Session chapter 9, 
 50.32  article 19, section 15, is amended to read: 
 50.33     Sec. 15.  [FELONY DWI STUDY.] 
 50.34     By January July 15, 2004, and each year thereafter through 
 50.35  January July 15, 2007, the commissioner of corrections must 
 50.36  report to the chairs and ranking minority members of the house 
 51.1   and senate committees having jurisdiction over criminal justice 
 51.2   and judiciary finance issues on the implementation and effects 
 51.3   of the felony level driving while impaired offense.  The report 
 51.4   must include the following information on felony level driving 
 51.5   while impaired offenses: 
 51.6      (1) the number of persons convicted; 
 51.7      (2) the number of trials taken to verdict, separating out 
 51.8   cases tried to a judge versus cases tried to a jury, and the 
 51.9   number of convictions for each; 
 51.10     (3) the number of offenders incarcerated locally and the 
 51.11  term of incarceration; 
 51.12     (4) the number placed on probation and the length of the 
 51.13  probation; 
 51.14     (5) the number for whom probation is revoked, the reasons 
 51.15  for revocation, and the consequences imposed; 
 51.16     (6) the number given an executed prison sentence upon 
 51.17  conviction and the length of the sentence; 
 51.18     (7) the number given an executed prison sentence upon 
 51.19  revocation of probation and the length of sentence; 
 51.20     (8) the number who successfully complete treatment in 
 51.21  prison; 
 51.22     (9) the number placed on intensive supervision following 
 51.23  release from incarceration; 
 51.24     (10) the number who violate supervised release and the 
 51.25  consequences imposed; and 
 51.26     (11) any other information the commissioner deems relevant 
 51.27  to estimating future costs.  
 51.28     Sec. 19.  Laws 2001, First Special Session chapter 9, 
 51.29  article 19, section 16, is amended to read: 
 51.30     Sec. 16.  [REPORT ON INSURANCE COVERAGE.] 
 51.31     By February August 1, 2004, the commissioner of corrections 
 51.32  shall report to the chairs of the senate and house committees 
 51.33  with jurisdiction over criminal justice funding on the number of 
 51.34  cases in which a felony DWI offender had private health 
 51.35  insurance coverage for chemical dependency treatment, and the 
 51.36  results of the commissioner's attempts to obtain coverage for 
 52.1   this treatment under Minnesota Statutes, section 62Q.137.  
 52.2      Sec. 20.  Laws 2001, First Special Session chapter 9, 
 52.3   article 19, section 17, is amended to read: 
 52.4      Sec. 17.  [EFFECTIVE DATE.] 
 52.5      Sections 1 to 12 and 14 to 16 are effective August February 
 52.6   1, 2002 2003, and apply to crimes committed on or after that 
 52.7   date.  However, violations occurring before August February 1, 
 52.8   2002 2003, that are listed in Minnesota Statutes, section 
 52.9   169A.03, subdivisions 20 and 21, are considered qualified prior 
 52.10  impaired driving incidents for purposes of this act.  Section 13 
 52.11  is effective July 1, 2001. 
 52.12     Sec. 21.  Laws 2002, chapter 220, article 6, section 1, is 
 52.13  amended to read: 
 52.14  Section 1.  [APPROPRIATIONS/REDUCTIONS.] 
 52.15     The dollar amounts in the columns under "APPROPRIATIONS" 
 52.16  are added to or, if shown in parentheses, are subtracted from 
 52.17  the appropriations in Laws 2001, First Special Session chapters 
 52.18  8, 9, or other law to the specified agencies.  The 
 52.19  appropriations are from the general fund or other named fund and 
 52.20  are available for the fiscal years indicated for each purpose.  
 52.21  The figure "2002" or "2003" means that the addition to or 
 52.22  subtraction from the appropriations listed under the figure are 
 52.23  for the fiscal year ending June 30, 2002, or June 30, 2003, 
 52.24  respectively. 
 52.25                                          2002           2003 
 52.26  APPROPRIATION REDUCTIONS             (5,165,000)   (11,489,000)
 52.27                                                     (11,321,000)
 52.28     Sec. 22.  Laws 2002, chapter 220, article 7, section 1, is 
 52.29  amended to read: 
 52.30  Section 1.  [TRANSPORTATION AND OTHER AGENCY APPROPRIATIONS.] 
 52.31     The dollar amounts in the columns marked "APPROPRIATIONS" 
 52.32  are added to or, if shown in parentheses, are subtracted from 
 52.33  the appropriations in Laws 2001, First Special Session chapter 
 52.34  8, 9, or other law to the specified agencies.  The 
 52.35  appropriations are from the general fund or any other named fund 
 52.36  and are available for the fiscal years indicated for each 
 53.1   purpose.  The figure 2002 or 2003 means that the addition to or 
 53.2   subtraction from the appropriations listed under the figure are 
 53.3   for the fiscal year ending June 30, 2002, or June 30, 2003, 
 53.4   respectively.  If only one figure is shown in the text for a 
 53.5   specified purpose, the addition or subtraction is for 2002 
 53.6   unless the context intends another fiscal year. 
 53.7                           SUMMARY BY FUND
 53.8                             2002          2003           TOTAL
 53.9   APPROPRIATIONS
 53.10  General            $   (2,018,000) $  (6,932,000) $  (8,950,000)
 53.11                                        (5,921,000)    (7,939,000)
 53.12  TRANSFERS IN           (2,705,000)    (1,996,000)    (4,701,000)
 53.13     Sec. 23.  Laws 2002, chapter 220, article 7, section 4, 
 53.14  subdivision 1, is amended to read: 
 53.15  Subdivision 1.  Total Appropriation
 53.16  Changes                               (2,018,000)    (3,296,000)
 53.17                                                       (2,696,000)
 53.18     Sec. 24.  Laws 2002, chapter 220, article 7, section 4, 
 53.19  subdivision 5, is amended to read: 
 53.20  Subd. 5.  Crime Victims
 53.21  Services Center                         (384,000)    (1,368,000)
 53.22                                                       (  768,000)
 53.23  [SHELTER PER DIEMS.] $600,000 the 
 53.24  second year is a reduction in per diem 
 53.25  funding for shelters. The base for the 
 53.26  crime victim services center shall be 
 53.27  reduced by $600,000 in fiscal year 2004 
 53.28  and $600,000 in fiscal year 2005 to 
 53.29  reflect reduced funding for shelters. 
 53.30  [CRIME VICTIMS SERVICES STAFF AND 
 53.31  GRANTS.] $384,000 the first year and 
 53.32  $768,000 the second year are reductions 
 53.33  for crime victims services staff and 
 53.34  grants.  For crime victims services 
 53.35  grants, the base for fiscal year 2004 
 53.36  shall be reduced by $2,000,000 and for 
 53.37  fiscal year 2005 by $2,000,000. 
 53.38     Sec. 25.  Laws 2002, chapter 220, article 7, section 34, is 
 53.39  amended to read: 
 53.40     Sec. 34.  [EFFECTIVE DATE.] 
 53.41     (a) Sections 1 to 5, 9, 12, and 30 are effective the day 
 53.42  following final enactment. 
 53.43     (b) Sections 16, 17, and 33, paragraph (a), are effective 
 53.44  July 1, 2003. 
 54.1      (c) The amendments to section 18, subdivisions 1 and 2, are 
 54.2   effective July 1, 2003.  Section 18, subdivision 3, is effective 
 54.3   the day following final enactment. 
 54.4      Sec. 26.  [FELONY DWI APPROPRIATION REDUCTIONS.] 
 54.5      The following dollar amounts are subtracted from the 
 54.6   general fund appropriations to the specified agencies for the 
 54.7   fiscal year ending June 30, 2003, enacted in Laws 2001, First 
 54.8   Special Session chapters 8 and 9, and Laws 2002, chapter 220, 
 54.9   article 6, section 3, related to the felony driving while 
 54.10  impaired penalty:  
 54.11     (1) public safety $(84,000); 
 54.12     (2) board of public defense $(125,000); and 
 54.13     (3) attorney general $(127,000). 
 54.14     Sec. 27.  [REPEALER.] 
 54.15     (a) Minnesota Statutes 2000, sections 611A.373, subdivision 
 54.16  3, as added by Laws 2002, chapter 220, article 7, section 18; 
 54.17  and 611A.73, subdivision 6, as added by Laws 2002, chapter 220, 
 54.18  article 7, section 21, are repealed.  
 54.19     (b) Laws 2002, chapter 220, article 6, section 4, and 
 54.20  article 7, sections 5, 32, and 33, are repealed. 
 54.21     Sec. 28.  [EFFECTIVE DATE.] 
 54.22     This article is effective the day following final enactment.
 54.23                             ARTICLE 9
 54.24                          STATE GOVERNMENT
 54.25     Section 1.  Minnesota Statutes 2000, section 3.855, 
 54.26  subdivision 2, is amended to read: 
 54.27     Subd. 2.  [STATE EMPLOYEE NEGOTIATIONS.] (a) The 
 54.28  commissioner of employee relations shall regularly advise the 
 54.29  commission on the progress of collective bargaining activities 
 54.30  with state employees under the state Public Employment Labor 
 54.31  Relations Act.  During negotiations, the commission may make 
 54.32  recommendations to the commissioner as it deems appropriate but 
 54.33  no recommendation shall impose any obligation or grant any right 
 54.34  or privilege to the parties.  
 54.35     (b) The commissioner shall submit to the chair of the 
 54.36  commission any negotiated collective bargaining agreements, 
 55.1   arbitration awards, compensation plans, or salaries for 
 55.2   legislative approval or disapproval.  Negotiated agreements 
 55.3   shall be submitted within five days of the date of approval by 
 55.4   the commissioner or the date of approval by the affected state 
 55.5   employees, whichever occurs later.  Arbitration awards shall be 
 55.6   submitted within five days of their receipt by the 
 55.7   commissioner.  If the commission disapproves a collective 
 55.8   bargaining agreement, award, compensation plan, or salary, the 
 55.9   commission shall specify in writing to the parties those 
 55.10  portions with which it disagrees and its reasons.  If the 
 55.11  commission approves a collective bargaining agreement, award, 
 55.12  compensation plan, or salary, it shall submit the matter to the 
 55.13  legislature to be accepted or rejected under this section.  
 55.14     (c) When the legislature is not in session, the commission 
 55.15  may give interim approval to a negotiated collective bargaining 
 55.16  agreement, salary, compensation plan, or arbitration award.  
 55.17  When the legislature is not in session, failure of the 
 55.18  commission to disapprove a collective bargaining agreement or 
 55.19  arbitration award within 30 days constitutes approval.  The 
 55.20  commission shall submit the negotiated collective bargaining 
 55.21  agreements, salaries, compensation plans, or arbitration awards 
 55.22  for which it has provided approval to the entire legislature for 
 55.23  ratification at a special legislative session called to consider 
 55.24  them or at its next regular legislative session as provided in 
 55.25  this section.  Approval or disapproval by the commission is not 
 55.26  binding on the legislature. 
 55.27     (d) When the legislature is not in session, the proposed 
 55.28  collective bargaining agreement, arbitration decision, salary, 
 55.29  or compensation plan must be implemented upon its approval by 
 55.30  the commission, and state employees covered by the proposed 
 55.31  agreement or arbitration decision do not have the right to 
 55.32  strike while the interim approval is in effect.  Wages and 
 55.33  economic fringe benefit increases provided for in the agreement 
 55.34  or arbitration decision paid in accordance with the interim 
 55.35  approval by the commission are not affected, but the wages or 
 55.36  benefit increases must cease to be paid or provided effective 
 56.1   upon the rejection of the agreement, arbitration decision, 
 56.2   salary, or compensation plan, or upon adjournment of the 
 56.3   legislature without acting on it.  Failure of the legislature to 
 56.4   disapprove a collective bargaining agreement or arbitration 
 56.5   award before adjournment of the legislature constitutes approval.
 56.6   Failure of the legislature to disapprove a compensation plan or 
 56.7   salary that has been submitted to the legislative coordinating 
 56.8   commission under section 3.855 at least 45 days before 
 56.9   adjournment constitutes approval. 
 56.10     Sec. 2.  Minnesota Statutes 2000, section 16A.28, 
 56.11  subdivision 6, is amended to read: 
 56.12     Subd. 6.  [CANCELED OCTOBER 15.] On October 15 all 
 56.13  allotments and encumbrances for the last fiscal year shall be 
 56.14  canceled unless an agency head certifies to the commissioner 
 56.15  that there is an encumbrance for services rendered or, goods 
 56.16  ordered, or grants issued in the last fiscal year, or certifies 
 56.17  that funding will be carried forward under subdivision 
 56.18  1.  Encumbrances for grants issued by June 30 may be certified 
 56.19  for a period of one year beyond the year in which the funds were 
 56.20  originally appropriated.  Services rendered under grant 
 56.21  contracts may occur during the certification period.  The 
 56.22  commissioner may: reinstate the part of the cancellation needed 
 56.23  to meet the certified encumbrance or charge the certified 
 56.24  encumbrance against the current year's appropriation. 
 56.25     Sec. 3.  Laws 2002, chapter 220, article 10, section 17, is 
 56.26  amended to read: 
 56.27  Sec. 17.  MILITARY AFFAIRS            (452,000)      (2,399,000)
 56.28  The base funding for the 2004-2005 
 56.29  biennium is $12,472,000 $12,619,000 
 56.30  each year. 
 56.31     Sec. 4.  Laws 2002, chapter 220, article 10, section 36, is 
 56.32  amended to read: 
 56.33     Sec. 36.  [REDUCTION IN CONTRACT EXPENDITURES.] 
 56.34     During the biennium ending June 30, 2003, the governor must 
 56.35  reduce planned executive branch state agency general fund 
 56.36  expenditures on contracts for professional or technical services 
 56.37  by at least $35,000,000 $27,300,000.  The governor must allocate 
 57.1   this reduction among executive branch state agencies.  For 
 57.2   purposes of this section, "professional or technical services" 
 57.3   has the meaning given in Minnesota Statutes, section 16C.08, 
 57.4   subdivision 1; and "executive branch state agency" has the 
 57.5   meaning given in Minnesota Statutes, section 16A.011, 
 57.6   subdivision 12a, and includes but does not include the Minnesota 
 57.7   state colleges and universities, the higher education services 
 57.8   office, the department of corrections, or the department of 
 57.9   human services with respect to contracts for state operated 
 57.10  services.  The base for these reductions is the amount allocated 
 57.11  for professional or technical service contracts in agency 
 57.12  spending plans as of January 1, 2002.  
 57.13     Sec. 5.  Laws 2002, chapter 220, article 10, section 38, 
 57.14  subdivision 2, is amended to read: 
 57.15     Subd. 2.  [EXCEPTIONS.] Subdivision 1 does not apply to: 
 57.16     (1) an employee at a state correctional facility; 
 57.17     (2) an employee of state operated services under the 
 57.18  department of human services; 
 57.19     (3) a lateral transfer of an employee within an agency; 
 57.20     (4) a student in a work-study position; or 
 57.21     (2) (5) a position that is necessary to perform essential 
 57.22  government services; or 
 57.23     (6) an employee who is paid entirely with federal money. 
 57.24     A determination under clause (2) (5) must be made by the 
 57.25  speaker of the house of representatives with respect to house 
 57.26  employees, the chair of the committee on rules and 
 57.27  administration with respect to senate employees, and the 
 57.28  legislative coordinating commission with respect to its 
 57.29  employees, by a constitutional officer with respect to employees 
 57.30  of the constitutional office, and by the governor with respect 
 57.31  to any other employee covered by this section.  Exceptions 
 57.32  granted under clause (2) (5) must be reported monthly by the 
 57.33  entity granting the exception.  The reports must be published on 
 57.34  the entity's Web site, and copies must be provided to the chairs 
 57.35  of the house ways and means and senate finance committees and to 
 57.36  the legislative reference library. 
 58.1      Sec. 6.  Laws 2002, chapter 220, article 10, section 38, 
 58.2   subdivision 3, is amended to read: 
 58.3      Subd. 3.  [ANTICIPATED SAVINGS.] The legislature 
 58.4   anticipates that application of this section to executive branch 
 58.5   agencies and to the Minnesota state colleges and universities 
 58.6   will result in savings to the general fund of $40,000,000 by 
 58.7   June 30, 2003.  If the governor determines that application of 
 58.8   this section will not result in $40,000,000 in savings to the 
 58.9   general fund by June 30, 2003, the governor must make 
 58.10  proportional reductions in executive agency operating budgets 
 58.11  necessary to achieve these savings.  If the governor makes 
 58.12  proportional reductions to executive agency operating budgets to 
 58.13  achieve the required savings, the governor shall exclude the 
 58.14  department of corrections from the reductions. 
 58.15     Sec. 7.  Laws 2002, chapter 220, article 10, section 39, is 
 58.16  amended to read: 
 58.17     Sec. 39.  [SAVINGS ARE ADDITIONAL.] 
 58.18     Savings achieved in sections 36 to 38 from the freeze in 
 58.19  state hiring or the reduction in the number of state contracts 
 58.20  for professional or technical services are in addition to 
 58.21  reductions in spending required by other sections of this 
 58.22  article act. 
 58.23     Sec. 8.  [REPORT ON REDUCTIONS.] 
 58.24     By August 1, 2002, state agencies shall report to the 
 58.25  commissioner of finance on how budget cuts and the hiring freeze 
 58.26  have been implemented.  Reports must identify positions cut and 
 58.27  specific programs and services that have been cut back or 
 58.28  eliminated.  To the extent possible, departments must identify 
 58.29  the impact on Minnesotans of the changes made in state programs 
 58.30  and services as a result of the 2002-2003 budget agreements.  
 58.31  The commissioner of finance must make the reports available to 
 58.32  members of the legislature and to the public. 
 58.33     Sec. 9.  [EARLY RETIREMENT INCENTIVE.] 
 58.34     Subdivision 1.  [AGENCY ELIGIBILITY.] The early retirement 
 58.35  incentive provided by this section may be offered to eligible 
 58.36  employees by agencies in the executive branch of state 
 59.1   government that are forced by budget reductions to make 
 59.2   significant reductions in staff or by a legislative employer.  
 59.3   For purposes of this section, "agency" means a legislative 
 59.4   employer as well as an agency in the executive branch. 
 59.5      Subd. 2.  [EMPLOYEE ELIGIBILITY.] The early retirement 
 59.6   incentive provided by this section is available to an employee 
 59.7   of an eligible agency or a legislative employer who is paid from 
 59.8   the general fund and who: 
 59.9      (1) on the date of retirement is at least 55 years old and 
 59.10  has at least 25 years of allowable service in one or more of the 
 59.11  funds listed in Minnesota Statutes, section 356.30, subdivision 
 59.12  3; 
 59.13     (2) upon retirement is immediately eligible for a 
 59.14  retirement annuity from one or more of those funds; 
 59.15     (3) retires on or after the effective date of this section 
 59.16  but before January 1, 2003; and 
 59.17     (4) holds a position designated by the agency as eligible 
 59.18  for the incentive. 
 59.19     Subd. 3.  [INCENTIVE.] For an eligible employee who retires 
 59.20  under this section, the employer shall provide an amount to be 
 59.21  determined by the employer, but not to exceed $20,000, to be 
 59.22  used, at the employee's option, for: 
 59.23     (1) deposit on the employee's behalf in the postretirement 
 59.24  health care savings plan established by Minnesota Statutes, 
 59.25  section 352.98; 
 59.26     (2) notwithstanding Minnesota Statutes, section 352.01, 
 59.27  subdivision 11, or 356.55, purchase of service credit for 
 59.28  unperformed service sufficient to enable the employee to retire 
 59.29  under Minnesota Statutes, section 352.116, subdivision 1, 
 59.30  paragraph (b); or 
 59.31     (3) purchase of a lifetime annuity or annuity for a 
 59.32  specific number of years from the state unclassified retirement 
 59.33  program to provide additional retirement benefits to the 
 59.34  employee calculated under Minnesota Statutes, section 352D.061, 
 59.35  subdivision 1. 
 59.36  An employee selecting the option in clause (2) may use money 
 60.1   from the employee's deferred compensation account to purchase 
 60.2   additional service credit if the employer contribution under 
 60.3   this subdivision is not sufficient to purchase enough credit to 
 60.4   enable the employee to retire under Minnesota Statutes, section 
 60.5   352.116, subdivision 1, paragraph (b). 
 60.6      Subd. 4.  [DESIGNATION OF ELIGIBLE POSITIONS.] If an 
 60.7   eligible agency chooses to offer the retirement incentive under 
 60.8   this section, the agency must designate the positions or groups 
 60.9   of positions within the agency that will qualify for 
 60.10  participation in the incentive program and may exclude otherwise 
 60.11  eligible employees.  The agency may at any time modify its 
 60.12  designation.  Unilateral implementation of this subdivision is 
 60.13  not an unfair labor practice for purposes of Minnesota Statutes, 
 60.14  chapter 179A. 
 60.15     Sec. 10.  [REPEALER.] 
 60.16     Laws 2002, chapter 220, article 10, section 37, is repealed.
 60.17     Sec. 11.  [EFFECTIVE DATE.] 
 60.18     This article is effective the day following final enactment.
 60.19                             ARTICLE 10
 60.20                        ECONOMIC DEVELOPMENT
 60.21     Section 1.  Minnesota Statutes 2001 Supplement, section 
 60.22  268.022, subdivision 1, is amended to read: 
 60.23     Subdivision 1.  [DETERMINATION AND COLLECTION OF SPECIAL 
 60.24  ASSESSMENT.] (a) In addition to all other taxes, assessments, 
 60.25  and payment obligations under chapter 268, each employer, except 
 60.26  an employer making payments in lieu of taxes is liable for a 
 60.27  special assessment levied at the rate of one-tenth of one 
 60.28  percent per year until June 30, 2000, and seven-hundredths of 
 60.29  one percent per year on and after July 1, 2000, on all taxable 
 60.30  wages, as defined in section 268.035, subdivision 24.  The 
 60.31  assessment shall become due and be paid by each employer to the 
 60.32  department on the same schedule and in the same manner as other 
 60.33  taxes. 
 60.34     (b) The special assessment levied under this section shall 
 60.35  not affect the computation of any other taxes, assessments, or 
 60.36  payment obligations due under this chapter. 
 61.1      Sec. 2.  Minnesota Statutes 2000, section 268.035, 
 61.2   subdivision 24, is amended to read: 
 61.3      Subd. 24.  [TAXABLE WAGES.] (a) "Taxable wages" means those 
 61.4   wages paid to an employee in covered employment each calendar 
 61.5   year up to an amount equal to 60 70 percent of the state's 
 61.6   average annual wage, rounded to the nearest $1,000. 
 61.7      (b) Taxable wages includes the amount of wages paid for 
 61.8   covered employment by the employer's predecessor when there has 
 61.9   been an experience rating record transfer under section 268.051, 
 61.10  subdivision 4. 
 61.11     Sec. 3.  Minnesota Statutes 2000, section 268.051, 
 61.12  subdivision 8, is amended to read: 
 61.13     Subd. 8.  [SOLVENCY SPECIAL ASSESSMENT FOR INTEREST ON 
 61.14  FEDERAL LOAN.] (a) If the fund balance is less than $150,000,000 
 61.15  on June 30 October 31 of any year, the commissioner, in 
 61.16  consultation with the commissioner of finance, determines that 
 61.17  an interest payment will be due during the following calendar 
 61.18  year on any loan from the federal unemployment trust fund under 
 61.19  section 268.194, subdivision 6, a solvency special assessment on 
 61.20  taxpaying employers will be in effect for the following calendar 
 61.21  year.  The taxpaying employer shall pay quarterly a solvency 
 61.22  legislature authorizes the commissioner, in consultation with 
 61.23  the commissioner of finance, to determine the appropriate level 
 61.24  of the assessment, of ten from two percent to eight percent of 
 61.25  the quarterly unemployment taxes due, that will be necessary to 
 61.26  pay the interest due on the loan. 
 61.27     (b) The solvency special assessment shall be placed into a 
 61.28  special account from which the commissioner shall pay any 
 61.29  interest accruing that has accrued on any loan from the federal 
 61.30  unemployment trust fund provided for under section 268.194, 
 61.31  subdivision 6.  If, at the end of each calendar quarter, the 
 61.32  commissioner, in consultation with the commissioner of finance, 
 61.33  determines that the balance in this special account, including 
 61.34  interest earned on the special account, is more than is 
 61.35  necessary to pay the interest which has accrued on any loan as 
 61.36  of that date, or will accrue over the following calendar 
 62.1   quarter, the commissioner shall immediately pay to the fund the 
 62.2   amount in excess of that necessary to pay the interest on any 
 62.3   loan. 
 62.4      Sec. 4.  Laws 2001, First Special Session chapter 4, 
 62.5   article 2, section 31, is amended to read: 
 62.6      Sec. 31.  [WORKFORCE ENHANCEMENT FEE.] 
 62.7      Subdivision 1.  [FEE.] Notwithstanding Minnesota Statutes, 
 62.8   section 268.022, effective January 1, 2002, the special 
 62.9   assessment under that section on taxable wages as defined in 
 62.10  Minnesota Statutes, section 268.035, subdivision 24, is 
 62.11  suspended until December 31, 2005.  Effective January 1, 2002, 
 62.12  there shall be assessed, in addition to unemployment taxes due 
 62.13  under Minnesota Statutes, section 268.051, a workforce 
 62.14  enhancement fee of .09 .12 percent on taxable wages.  This fee 
 62.15  shall be due and be paid on the same schedule and in the same 
 62.16  manner as unemployment taxes under Minnesota Statutes, section 
 62.17  268.051.  Any amount past due under this section shall be 
 62.18  subject to the same interest and collection provisions as 
 62.19  unemployment taxes.  This fee shall expire on December 31, 2005. 
 62.20     Subd. 2.  [USE OF FUNDS COLLECTED.] An amount equal to 
 62.21  .07 0.1 percent on taxable wages shall be deposited in the 
 62.22  workforce development fund provided for under Minnesota 
 62.23  Statutes, section 268.022, subdivision 2.  An amount equal to 
 62.24  .02 percent on taxable wages, less reimbursement for collection 
 62.25  costs of the total amount of the fee, shall be deposited in the 
 62.26  unemployment insurance technology initiative account provided 
 62.27  for in section 32. 
 62.28     Sec. 5.  [EXTRA UNEMPLOYMENT BENEFITS.] 
 62.29     Subdivision 1.  [EXTRA BENEFITS; AVAILABILITY.] Extra 
 62.30  unemployment benefits are available to an applicant: 
 62.31     (1) who has a benefit account effective March 11, 2001, or 
 62.32  thereafter if the applicant was laid off due to lack of work 
 62.33  from Northwest Airlines, Sun Country Airlines, Mark Travel 
 62.34  Corporation, Mesaba Airlines, United Airlines, MLT Vacations, 
 62.35  Carlson Wagonlit Travel, LSG Sky Chefs, Air Wisconsin, American 
 62.36  Airlines, American TransAir, Champion Air, Chautaugua Airlines, 
 63.1   Continental Airlines, Emery Worldwide Air, Great Lakes Airlines, 
 63.2   PanAm International, Skyway Airlines, and U.S. Airways; 
 63.3      (2) who was laid off on or after January 1, 2002, due to 
 63.4   lack of work from Fingerhut Companies, Incorporated; 
 63.5      (3) who was laid off due to a lack of work on or after July 
 63.6   8, 2001, from the Farmland Foods Company in Freeborn county; or 
 63.7      (4) who was laid off due to a lack of work on or after 
 63.8   March 18, 2002, from Potlatch Corporation in Crow Wing county.  
 63.9      Subd. 2.  [PAYMENT FROM FUND; EFFECT ON EMPLOYER.] Extra 
 63.10  unemployment benefits are payable from the fund.  
 63.11     Subd. 3.  [ELIGIBILITY CONDITIONS.] An applicant described 
 63.12  under subdivision 1, clause (1), is eligible to receive extra 
 63.13  unemployment benefits under this section for any week through 
 63.14  March 15, 2003, an applicant described under subdivision 1, 
 63.15  clauses (2) and (4), is eligible to receive extra unemployment 
 63.16  benefits under this section for any week through January 3, 
 63.17  2004, and an applicant described under subdivision 1, clause 
 63.18  (3), is eligible to receive extra unemployment benefits under 
 63.19  this section for any week through July 1, 2003, if:  
 63.20     (1) a majority of the applicant's wage credits were with an 
 63.21  employer specified under subdivision 1; 
 63.22     (2) the applicant meets the eligibility requirements of 
 63.23  Minnesota Statutes, section 268.085; 
 63.24     (3) the applicant is not subject to a disqualification 
 63.25  under Minnesota Statutes, section 268.095; 
 63.26     (4) the applicant is not entitled to any regular, 
 63.27  additional, or extended unemployment benefits for that week and 
 63.28  the applicant is not entitled to receive unemployment benefits 
 63.29  under any other state or federal law for that week; 
 63.30     (5) the applicant is enrolled in, or has within the last 
 63.31  two weeks successfully completed, a program that qualifies as 
 63.32  reemployment assistance training under the state dislocated 
 63.33  worker program, except that an applicant whose training is 
 63.34  scheduled to begin in more than 30 days may be considered to be 
 63.35  in training if:  (i) the applicant's chosen training program 
 63.36  does not offer an available start date within 30 days; (ii) the 
 64.1   applicant is scheduled to begin training on the earliest 
 64.2   available start date for the chosen training program; and (iii) 
 64.3   the applicant is scheduled to begin training in no more than 60 
 64.4   days; and 
 64.5      (6) an applicant qualifies for a new regular benefit 
 64.6   account at any time after exhausting regular unemployment 
 64.7   benefits as a result of the layoff under subdivision 1, the 
 64.8   applicant must apply for and exhaust entitlement to those new 
 64.9   regular or any other type of unemployment benefits under any 
 64.10  state or federal law. 
 64.11     Subd. 4.  [WEEKLY AMOUNT OF EXTRA BENEFITS.] The weekly 
 64.12  extra unemployment benefits amount available to an applicant is 
 64.13  the same as the applicant's weekly regular unemployment benefit 
 64.14  amount on the benefit account established as a result of a 
 64.15  layoff under subdivision 1. 
 64.16     Subd. 5.  [MAXIMUM AMOUNT OF EXTRA UNEMPLOYMENT 
 64.17  BENEFITS.] The maximum amount of extra unemployment benefits 
 64.18  available is 26 times the applicant's weekly extra unemployment 
 64.19  benefits amount.  Any type of unemployment benefits, under any 
 64.20  state or federal law, the applicant may be entitled to after 
 64.21  exhausting regular unemployment benefits as a result of a layoff 
 64.22  under subdivision 1, shall reduce the maximum amount of extra 
 64.23  unemployment benefits available.  The reduction in total extra 
 64.24  unemployment benefits available shall equal the total amount of 
 64.25  any other type of unemployment benefits available.  
 64.26     Subd. 6.  [PROGRAM EXPIRATION.] This extra unemployment 
 64.27  benefit program expires on January 3, 2004.  No extra 
 64.28  unemployment benefits shall be paid for any week after the 
 64.29  expiration of this program. 
 64.30     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 64.31  following final enactment and is retroactive to September 16, 
 64.32  2001. 
 64.33     Sec. 6.  [UNIFORM LAWS COMMISSION APPROPRIATION.] 
 64.34     The following amounts are added to the appropriations from 
 64.35  the general fund to the uniform laws commission in Laws 2001, 
 64.36  First Special Session chapter 8, article 4, section 8:  $5,000 
 65.1   in the fiscal year ending June 30, 2002, and $5,000 in the 
 65.2   fiscal year ending June 30, 2003. 
 65.3      Sec. 7.  [EFFECTIVE DATE.] 
 65.4      This article is effective the day following final enactment.
 65.5                              ARTICLE 11
 65.6                CANCELLATIONS; INFLATION; TRANSFERS IN
 65.7      Section 1.  Laws 2002, chapter 220, article 13, section 7, 
 65.8   is amended to read: 
 65.9      Sec. 7.  [BALANCES CANCELED TO GENERAL FUND.] 
 65.10     The unobligated balances in the following general fund 
 65.11  accounts created in the sections of Minnesota Statutes indicated 
 65.12  are canceled to the general fund in the fiscal years indicated: 
 65.13     (1) the budget reserve account, Minnesota Statutes, section 
 65.14  16A.152, subdivision 1a, estimated to be $653,000,000, in fiscal 
 65.15  year 2002; 
 65.16     (2) the local government aid reform account, Minnesota 
 65.17  Statutes, section 16A.1523, estimated to be $14,000,000, in 
 65.18  fiscal year 2003; 
 65.19     (3) the tax relief account, Minnesota Statutes, section 
 65.20  16A.1522, subdivision 4, estimated to be $158,148,000, in fiscal 
 65.21  year 2004 2003; and 
 65.22     (4) $195,000,000 of the unobligated balance in the cash 
 65.23  flow account in Minnesota Statutes, section 16A.152, subdivision 
 65.24  1. 
 65.25     Sec. 2.  Laws 2002, chapter 220, article 13, section 9, 
 65.26  subdivision 2, is amended to read: 
 65.27     Subd. 2.  [SPECIAL COMPENSATION FUND.] After June 1, 2003, 
 65.28  but no later than June 30, 2003, the commissioner of finance 
 65.29  shall transfer $230,000,000 $282,000,000 in assets of the excess 
 65.30  surplus account of the special compensation fund created under 
 65.31  Minnesota Statutes, section 176.129, to the general fund. 
 65.32     Sec. 3.  [TRAFFIC BOTTLENECKS AND INTERREGIONAL CORRIDORS.] 
 65.33     Subdivision 1.  [CANCELLATION.] $245,240,000 of the 
 65.34  appropriation from the general fund in Laws 2000, chapter 479, 
 65.35  article 1, section 2, subdivision 3, is canceled to the general 
 65.36  fund. 
 66.1      Subd. 2.  [APPROPRIATION.] $245,240,000 is appropriated 
 66.2   from the trunk highway fund to the commissioner of 
 66.3   transportation.  One-half is for state trunk highway 
 66.4   improvements within the seven-county metropolitan area primarily 
 66.5   for the purpose of improving traffic flow and expanding highway 
 66.6   capacity by eliminating traffic bottlenecks.  One-half is for 
 66.7   improvements on state trunk highways outside the seven-county 
 66.8   metropolitan area that the commissioner designates as at-risk 
 66.9   interregional corridors. 
 66.10     Subd. 3.  [BOND SALE.] To provide the money appropriated in 
 66.11  this section from the trunk highway fund, the commissioner of 
 66.12  finance shall sell and issue bonds of the state in an amount up 
 66.13  to $245,240,000 in the manner, upon the terms, and with the 
 66.14  effect prescribed by Minnesota Statutes, sections 167.50 to 
 66.15  167.52, and by the Minnesota Constitution, article XIV, section 
 66.16  11, at the times and in the amounts requested by the 
 66.17  commissioner of transportation.  The proceeds of the bonds, 
 66.18  except accrued interest and any premium received on the sale of 
 66.19  the bonds, must be credited to a bond proceeds account in the 
 66.20  trunk highway fund. 
 66.21     Sec. 4.  [CASH FLOW ACCOUNT CANCELLATION.] 
 66.22     $155,000,000 of the unobligated balance in the cash flow 
 66.23  account created in Minnesota Statutes, section 16A.152, 
 66.24  subdivision 1, is canceled to the general fund. 
 66.25     Sec. 5.  [BALANCES DEPOSITED IN BUDGET RESERVE.] 
 66.26     Notwithstanding Minnesota Statutes, section 16A.1522, any 
 66.27  positive unrestricted general fund balance on June 30, 2003, 
 66.28  must be deposited in the budget reserve account in the general 
 66.29  fund. 
 66.30     Sec. 6.  [APPROPRIATION TO EDUCATION RESERVE ACCOUNT.] 
 66.31     $61,000,000 is appropriated in fiscal year 2004, and 
 66.32  $148,000,000 is appropriated in fiscal year 2005 to the 
 66.33  education reserve account created under Minnesota Statutes, 
 66.34  section 275.025, subdivision 1. 
 66.35     Sec. 7.  [EFFECTIVE DATE.] 
 66.36     This article is effective the day following final enactment.
 67.1                              ARTICLE 12
 67.2               HEALTH AND HUMAN SERVICES APPROPRIATIONS 
 67.3   Section 1.  [HEALTH AND HUMAN SERVICES APPROPRIATIONS.] 
 67.4      The dollar amounts shown in the columns marked 
 67.5   "APPROPRIATIONS" are added to or, if shown in parentheses, are 
 67.6   subtracted from the appropriations in Laws 2001, First Special 
 67.7   Session chapter 9, and Laws 2002, chapter 220, or other law, and 
 67.8   are appropriated from the general fund, or any other fund named, 
 67.9   to the agencies and for the purposes specified in this article, 
 67.10  to be available for the fiscal years indicated for each 
 67.11  purpose.  The figures "2002" and "2003" used in this article 
 67.12  mean that the appropriation or appropriations listed under them 
 67.13  are available for the fiscal year ending June 30, 2002, or June 
 67.14  30, 2003, respectively.  
 67.15                          SUMMARY BY FUND
 67.16                            2002          2003           TOTAL
 67.17  General  
 67.18  Forecast 
 67.19  Adjustments           $47,032,000    $26,019,000    $73,051,000
 67.20  Nonforecast               350,000    (35,633,000)   (35,283,000)
 67.21  Health Care
 67.22  Access                 (2,605,000)    (4,816,000)    (7,421,000)
 67.23  Federal TANF           (7,383,000)     8,636,000      1,253,000 
 67.24  State Government
 67.25  Special Revenue           -0-              4,000          4,000
 67.26                                             APPROPRIATIONS 
 67.27                                         Available for the Year 
 67.28                                             Ending June 30 
 67.29                                            2002         2003 
 67.30  Sec. 2.  COMMISSIONER OF
 67.31  HUMAN SERVICES
 67.32  Subdivision 1.  Total
 67.33  Appropriation                     $   37,394,000 $(6,294,000)
 67.34                Summary by Fund
 67.35  General              47,382,000   (10,114,000)
 67.36  Health Care
 67.37  Access               (2,605,000)   (4,816,000)
 67.38  Federal TANF         (7,383,000)    8,636,000
 67.39  Subd. 2.  Children's
 67.40  Grants                   
 67.41  General                 -0-        (4,714,000)
 68.1   This appropriation includes a reduction 
 68.2   of $6,548,000 in family preservation 
 68.3   and children's mental health grants due 
 68.4   to changes in allocations and an 
 68.5   increase of $1,834,000 in local 
 68.6   collaboratives wraparound services 
 68.7   coordination grants. 
 68.8   Subd. 3.  Basic Health Care
 68.9   Grants
 68.10  General               9,689,000     1,188,000
 68.11  Health Care
 68.12  Access               (2,605,000)   (4,816,000)
 68.13  The amounts that may be spent from this 
 68.14  appropriation for each purpose are as 
 68.15  follows: 
 68.16  (a) MinnesotaCare Grants
 68.17  Health Care
 68.18  Access               (2,605,000)   (4,816,000)
 68.19  (b) MA Basic Health Care
 68.20  Grants - Families and Children
 68.21  General               7,437,000    (6,007,000)
 68.22  (c) MA Basic Health Care
 68.23  Grants - Elderly and Disabled
 68.24  General                (779,000)    2,757,000
 68.25  [CRITICAL ACCESS PHARMACY PROVIDERS.] 
 68.26  Of this appropriation, $1,975,000 in 
 68.27  fiscal year 2003 is to the commissioner 
 68.28  to increase pharmacy dispensing fees to 
 68.29  critical access pharmacies as 
 68.30  authorized under Minnesota Statutes, 
 68.31  section 256B.0625, subdivision 13, 
 68.32  paragraph (d). 
 68.33  [NOTICE OF CHANGE IN DOCUMENTATION.] 
 68.34  The commissioner shall provide to all 
 68.35  medical assistance recipients receiving 
 68.36  coverage through the employed persons 
 68.37  with disabilities program under 
 68.38  Minnesota Statutes, section 256B.057, 
 68.39  subdivision 9, three-months advance 
 68.40  notice of the new employment 
 68.41  documentation requirement. 
 68.42  [MENTAL HEALTH SERVICES RATE INCREASE 
 68.43  PASSTHROUGH.] Prepaid health plans must 
 68.44  pass through to service providers the 
 68.45  rate increases provided under Minnesota 
 68.46  Statutes, section 256B.761. 
 68.47  (d) General Assistance
 68.48  Medical Care Grants
 68.49  General               2,681,000     4,438,000
 68.50  (e) Health Care Grants -
 68.51  Other Assistance
 68.52  General                 350,000       -0-     
 68.53  [U SPECIAL KIDS PROGRAM.] Of this 
 69.1   appropriation, $350,000 in fiscal year 
 69.2   2002 is immediately available to the 
 69.3   commissioner to be transferred 
 69.4   immediately to the University of 
 69.5   Minnesota for the U Special Kids 
 69.6   program.  The money may be used to 
 69.7   match private grants.  The money shall 
 69.8   be used to provide physician-supervised 
 69.9   medical case management services for up 
 69.10  to 50 Minnesota children in the program 
 69.11  who are eligible for medical 
 69.12  assistance. Any unspent portion of this 
 69.13  appropriation shall not cancel but 
 69.14  shall be available for these purposes 
 69.15  until June 30, 2005.  This is a 
 69.16  one-time appropriation and shall not 
 69.17  become part of base level funding for 
 69.18  the 2004-2005 biennium. 
 69.19  [HIV/AIDS DRUG REBATES.] General fund 
 69.20  appropriations for HIV/AIDS grants and 
 69.21  services that are no longer needed as a 
 69.22  result of greater than anticipated 
 69.23  collections under the AIDS drug 
 69.24  assistance program rebate must first be 
 69.25  used to meet funding needs of the state 
 69.26  prescription drug program. 
 69.27  Subd. 4.  Basic Health Care
 69.28  Management
 69.29  General                   -0-         75,000 
 69.30  The amounts that may be spent from this 
 69.31  appropriation for each purpose are as 
 69.32  follows: 
 69.33  Health Care Policy
 69.34  Administration
 69.35  General                   -0-         75,000
 69.36  Subd. 5.  State-Operated
 69.37  Services
 69.38  General                   -0-      5,000,000 
 69.39  Subd. 6.  Continuing Care 
 69.40  Grants
 69.41  [FUNDING USAGE.] Up to 75 percent of 
 69.42  the fiscal year 2004 appropriations for 
 69.43  family preservation grants, 
 69.44  developmental disability 
 69.45  semi-independent living services, 
 69.46  developmental disability family 
 69.47  support, adult mental health grants, 
 69.48  and children's mental health grants may 
 69.49  be used to fund calendar year 2003 
 69.50  allocations for these programs, with 
 69.51  the resulting calendar year funding 
 69.52  pattern continuing into the future.  
 69.53  Appropriation reductions associated 
 69.54  with this shift are onetime only.  
 69.55  General              27,896,000   (9,713,000)
 69.56  The amounts that may be spent from this 
 69.57  appropriation for each purpose are as 
 69.58  follows: 
 70.1   (a) Medical Assistance
 70.2   Long-Term Care Waivers and
 70.3   Home Care Grants
 70.4   General              26,054,000   26,552,000
 70.5   [COMMUNITY SERVICES DEVELOPMENT GRANTS 
 70.6   USAGE.] For fiscal year 2003, the 
 70.7   commissioner may make grants under the 
 70.8   community services development grants 
 70.9   program in Minnesota Statutes, section 
 70.10  256.9754, for the development of 
 70.11  housing options for persons under age 
 70.12  65 residing in nursing facilities. 
 70.13  (b) Medical Assistance
 70.14  Long-Term Care Facilities
 70.15  Grants
 70.16  General               1,815,000    (5,586,000)
 70.17  (c) Group Residential
 70.18  Housing Grants
 70.19  General                  27,000       689,000
 70.20  (d) Chemical Dependency 
 70.21  Entitlement Grants
 70.22  General                  -0-       (1,000,000)
 70.23  (e) Community Social
 70.24  Service Grants         
 70.25  General                  -0-      (13,730,000)
 70.26  (f) Mental Health 
 70.27  Grants  
 70.28  General                  -0-      (13,635,000)
 70.29  This reduction is onetime only. 
 70.30  (g) Community Support
 70.31  Grants 
 70.32  General                  -0-       (3,003,000)
 70.33  Subd. 7.  Economic
 70.34  Support Grants
 70.35  General               9,797,000    (1,950,000)
 70.36  Federal TANF         (7,383,000)    8,636,000
 70.37  The amounts that may be spent from the 
 70.38  appropriation for each purpose are as 
 70.39  follows: 
 70.40  (a) Assistance to Families
 70.41  Grants
 70.42  General               8,712,000    (3,740,000)
 70.43  Federal TANF         (7,383,000)    8,636,000
 70.44  (b) General Assistance
 70.45  Grants
 70.46  General               1,361,000     1,779,000
 71.1   (c) Minnesota Supplemental
 71.2   Aid Grants
 71.3   General                (276,000)       11,000
 71.4   Sec. 3.  COMMISSIONER OF HEALTH
 71.5   Subdivision 1.  Total Appropriation
 71.6   Reductions                               -0-              4,000
 71.7                 Summary by Fund
 71.8   State Government
 71.9   Special Revenue         -0-             4,000  
 71.10  Subd. 2.  Family and Provider 
 71.11  Compliance    
 71.12  State Government
 71.13  Special Revenue         -0-             4,000
 71.14  [REGISTRATION COSTS.] This 
 71.15  appropriation in fiscal year 2003 is to 
 71.16  the commissioner for the costs of 
 71.17  registering establishments under 
 71.18  Minnesota Statutes, section 144D.025. 
 71.19  Sec. 4.  VETERANS NURSING
 71.20  HOMES BOARD 
 71.21                Summary by Fund
 71.22  General                 -0-           500,000
 71.23  [DEFICIENCY APPROPRIATION.] The 
 71.24  appropriation to the veterans nursing 
 71.25  homes board for fiscal year 2003 is for 
 71.26  a deficiency in board operations.  This 
 71.27  is a one-time appropriation and shall 
 71.28  not become part of base-level funding 
 71.29  for the 2004-2005 biennium. 
 71.30     Sec. 5.  Laws 2002, chapter 220, article 6, section 3, 
 71.31  subdivision 2, is amended to read: 
 71.32  Subd. 2.  Adult Institutions         (5,200,000)    (1,750,000)
 71.33  The base for fiscal year 2004 shall be 
 71.34  reduced by $8,145,000 $1,750,000, and 
 71.35  for fiscal year 2005 by $8,145,000.  
 71.36  The commissioner of corrections shall 
 71.37  develop an agencywide spending plan for 
 71.38  the 2004-2005 biennium and report to 
 71.39  the chairs and ranking minority members 
 71.40  of the house and senate committees with 
 71.41  jurisdiction over criminal justice 
 71.42  policy and funding on its 
 71.43  recommendations by January 15, 
 71.44  2003 $1,750,000. 
 71.45     Sec. 6.  [VETERANS NURSING HOMES BOARD FUNDING.] 
 71.46     (a) Notwithstanding Minnesota Statutes, section 16B.31, 
 71.47  subdivision 7, on July 1, 2002, the commissioner of 
 71.48  administration shall transfer to the veterans nursing homes 
 71.49  board any remaining portion of the payments received from 
 72.1   contractors for the mold damage at the Luverne facility. 
 72.2      (b) Notwithstanding the provisions of Minnesota Statutes, 
 72.3   section 16A.151, any payments made during fiscal year 2003 from 
 72.4   contractors to settle legal issues regarding the mold damage at 
 72.5   the Luverne facility are appropriated to the veterans nursing 
 72.6   homes board. 
 72.7      (c) Total appropriations to the veterans nursing homes 
 72.8   board under this section shall not exceed $900,000. 
 72.9      Sec. 7.  [EXEMPTIONS FROM REDUCTION IN CONTRACT 
 72.10  EXPENDITURES AND FROM HIRING FREEZE.] 
 72.11     The department of human services is exempt from the hiring 
 72.12  freeze established in Laws 2002, chapter 220, article 10, 
 72.13  section 38, and the contract moratorium established in Laws 
 72.14  2002, chapter 220, article 10, section 37, as it relates to the 
 72.15  establishment and implementation of a supplemental drug rebate 
 72.16  program and a critical access pharmacy program. 
 72.17     Sec. 8.  [SUNSET OF UNCODIFIED LANGUAGE.] 
 72.18     All uncodified language contained in this article expires 
 72.19  on June 30, 2003, unless a different expiration date is explicit.
 72.20     Sec. 9.  [EFFECTIVE DATE.] 
 72.21     Except as otherwise provided in this article, this article 
 72.22  is effective the day following final enactment. 
 72.23                             ARTICLE 13
 72.24                     HEALTH AND HUMAN SERVICES
 72.25     Section 1.  Minnesota Statutes 2000, section 62J.692, 
 72.26  subdivision 4, as amended by Laws 2002, chapter 220, article 15, 
 72.27  section 1, is amended to read: 
 72.28     Subd. 4.  [DISTRIBUTION OF FUNDS.] (a) The commissioner 
 72.29  shall annually distribute medical education funds to all 
 72.30  qualifying applicants based on the following criteria:  
 72.31     (1) total medical education funds available for 
 72.32  distribution; 
 72.33     (2) total number of eligible trainee FTEs in each clinical 
 72.34  medical education program; and 
 72.35     (3) the statewide average cost per trainee as determined by 
 72.36  the application information provided in the first year of the 
 73.1   biennium, by type of trainee, in each clinical medical education 
 73.2   program.  
 73.3      (b) Funds distributed shall not be used to displace current 
 73.4   funding appropriations from federal or state sources.  
 73.5      (c) Funds shall be distributed to the sponsoring 
 73.6   institutions indicating the amount to be distributed to each of 
 73.7   the sponsor's clinical medical education programs based on the 
 73.8   criteria in this subdivision and in accordance with the 
 73.9   commissioner's approval letter.  Each clinical medical education 
 73.10  program must distribute funds to the training sites as specified 
 73.11  in the commissioner's approval letter.  Sponsoring institutions, 
 73.12  which are accredited through an organization recognized by the 
 73.13  department of education or the health care financing 
 73.14  administration, may contract directly with training sites to 
 73.15  provide clinical training.  To ensure the quality of clinical 
 73.16  training, those accredited sponsoring institutions must: 
 73.17     (1) develop contracts specifying the terms, expectations, 
 73.18  and outcomes of the clinical training conducted at sites; and 
 73.19     (2) take necessary action if the contract requirements are 
 73.20  not met.  Action may include the withholding of payments under 
 73.21  this section or the removal of students from the site.  
 73.22     (d) Any funds not distributed in accordance with the 
 73.23  commissioner's approval letter must be returned to the medical 
 73.24  education and research fund within 30 days of receiving notice 
 73.25  from the commissioner.  The commissioner shall distribute 
 73.26  returned funds to the appropriate training sites in accordance 
 73.27  with the commissioner's approval letter. 
 73.28     (e) The commissioner shall distribute no later than by June 
 73.29  30 of each year an amount equal to the funds transferred under 
 73.30  section 62J.694, subdivision 2a, paragraph (b), plus five 
 73.31  percent interest at a rate equal to the average earnings paid 
 73.32  under section 62J.694, subdivision 2a, to the University of 
 73.33  Minnesota board of regents for the costs of the academic health 
 73.34  center as specified under section 62J.694, subdivision 2a, 
 73.35  paragraph (a). 
 73.36     Sec. 2.  Minnesota Statutes 2000, section 144D.01, 
 74.1   subdivision 4, is amended to read: 
 74.2      Subd. 4.  [HOUSING WITH SERVICES ESTABLISHMENT OR 
 74.3   ESTABLISHMENT.] (a) "Housing with services establishment" or 
 74.4   "establishment" means: 
 74.5      (1) an establishment providing sleeping accommodations to 
 74.6   one or more adult residents, at least 80 percent of which are 55 
 74.7   years of age or older, and offering or providing, for a fee, one 
 74.8   or more regularly scheduled health-related services or two or 
 74.9   more regularly scheduled supportive services, whether offered or 
 74.10  provided directly by the establishment or by another entity 
 74.11  arranged for by the establishment; or 
 74.12     (2) an establishment that registers under section 144D.025. 
 74.13     (b) Housing with services establishment does not include: 
 74.14     (1) a nursing home licensed under chapter 144A; 
 74.15     (2) a hospital, certified boarding care home, or supervised 
 74.16  living facility licensed under sections 144.50 to 144.56; 
 74.17     (3) a board and lodging establishment licensed under 
 74.18  chapter 157 and Minnesota Rules, parts 9520.0500 to 9520.0670, 
 74.19  9525.0215 to 9525.0355, 9525.0500 to 9525.0660, or 9530.4100 to 
 74.20  9530.4450, or under chapter 245B; 
 74.21     (4) a board and lodging establishment which serves as a 
 74.22  shelter for battered women or other similar purpose; 
 74.23     (5) a family adult foster care home licensed by the 
 74.24  department of human services; 
 74.25     (6) private homes in which the residents are related by 
 74.26  kinship, law, or affinity with the providers of services; 
 74.27     (7) residential settings for persons with mental 
 74.28  retardation or related conditions in which the services are 
 74.29  licensed under Minnesota Rules, parts 9525.2100 to 9525.2140, or 
 74.30  applicable successor rules or laws; 
 74.31     (8) a home-sharing arrangement such as when an elderly or 
 74.32  disabled person or single-parent family makes lodging in a 
 74.33  private residence available to another person in exchange for 
 74.34  services or rent, or both; 
 74.35     (9) a duly organized condominium, cooperative, common 
 74.36  interest community, or owners' association of the foregoing 
 75.1   where at least 80 percent of the units that comprise the 
 75.2   condominium, cooperative, or common interest community are 
 75.3   occupied by individuals who are the owners, members, or 
 75.4   shareholders of the units; or 
 75.5      (10) services for persons with developmental disabilities 
 75.6   that are provided under a license according to Minnesota Rules, 
 75.7   parts 9525.2000 to 9525.2140 in effect until January 1, 1998, or 
 75.8   under chapter 245B. 
 75.9      Sec. 3.  [144D.025] [OPTIONAL REGISTRATION.] 
 75.10     An establishment that meets all the requirements of this 
 75.11  chapter except that fewer than 80 percent of the adult residents 
 75.12  are age 55 or older may, at its option, register as a housing 
 75.13  with services establishment. 
 75.14     Sec. 4.  Minnesota Statutes 2001 Supplement, section 
 75.15  241.021, subdivision 4, is amended to read: 
 75.16     Subd. 4.  [HEALTH CARE.] The commissioner of corrections 
 75.17  shall provide professional health care to persons confined in 
 75.18  institutions under the control of the commissioner of 
 75.19  corrections and pay the costs of their care in hospitals and 
 75.20  other medical facilities not under the control of the 
 75.21  commissioner of corrections.  All reimbursements for these 
 75.22  health care services shall be deposited in the general fund.  
 75.23  The commissioner of corrections is authorized to contract 
 75.24  with or reimburse entities, including health care management 
 75.25  companies, to provide health care to inmates, at reimbursement 
 75.26  rates equal to medical assistance unless otherwise negotiated.  
 75.27  With respect to these contracts, these entities shall not be 
 75.28  regulated as, or otherwise considered to be, health plan 
 75.29  companies as defined in section 62Q.01, subdivision 4. 
 75.30     Sec. 5.  Minnesota Statutes 2001 Supplement, section 
 75.31  256.01, subdivision 2, as amended by Laws 2002, chapter 220, 
 75.32  article 15, section 4, is amended to read: 
 75.33     Subd. 2.  [SPECIFIC POWERS.] Subject to the provisions of 
 75.34  section 241.021, subdivision 2, the commissioner of human 
 75.35  services shall: 
 75.36     (1) Administer and supervise all forms of public assistance 
 76.1   provided for by state law and other welfare activities or 
 76.2   services as are vested in the commissioner.  Administration and 
 76.3   supervision of human services activities or services includes, 
 76.4   but is not limited to, assuring timely and accurate distribution 
 76.5   of benefits, completeness of service, and quality program 
 76.6   management.  In addition to administering and supervising human 
 76.7   services activities vested by law in the department, the 
 76.8   commissioner shall have the authority to: 
 76.9      (a) require county agency participation in training and 
 76.10  technical assistance programs to promote compliance with 
 76.11  statutes, rules, federal laws, regulations, and policies 
 76.12  governing human services; 
 76.13     (b) monitor, on an ongoing basis, the performance of county 
 76.14  agencies in the operation and administration of human services, 
 76.15  enforce compliance with statutes, rules, federal laws, 
 76.16  regulations, and policies governing welfare services and promote 
 76.17  excellence of administration and program operation; 
 76.18     (c) develop a quality control program or other monitoring 
 76.19  program to review county performance and accuracy of benefit 
 76.20  determinations; 
 76.21     (d) require county agencies to make an adjustment to the 
 76.22  public assistance benefits issued to any individual consistent 
 76.23  with federal law and regulation and state law and rule and to 
 76.24  issue or recover benefits as appropriate; 
 76.25     (e) delay or deny payment of all or part of the state and 
 76.26  federal share of benefits and administrative reimbursement 
 76.27  according to the procedures set forth in section 256.017; 
 76.28     (f) make contracts with and grants to public and private 
 76.29  agencies and organizations, both profit and nonprofit, and 
 76.30  individuals, using appropriated funds; and 
 76.31     (g) enter into contractual agreements with federally 
 76.32  recognized Indian tribes with a reservation in Minnesota to the 
 76.33  extent necessary for the tribe to operate a federally approved 
 76.34  family assistance program or any other program under the 
 76.35  supervision of the commissioner.  The commissioner shall consult 
 76.36  with the affected county or counties in the contractual 
 77.1   agreement negotiations, if the county or counties wish to be 
 77.2   included, in order to avoid the duplication of county and tribal 
 77.3   assistance program services.  The commissioner may establish 
 77.4   necessary accounts for the purposes of receiving and disbursing 
 77.5   funds as necessary for the operation of the programs. 
 77.6      (2) Inform county agencies, on a timely basis, of changes 
 77.7   in statute, rule, federal law, regulation, and policy necessary 
 77.8   to county agency administration of the programs. 
 77.9      (3) Administer and supervise all child welfare activities; 
 77.10  promote the enforcement of laws protecting handicapped, 
 77.11  dependent, neglected and delinquent children, and children born 
 77.12  to mothers who were not married to the children's fathers at the 
 77.13  times of the conception nor at the births of the children; 
 77.14  license and supervise child-caring and child-placing agencies 
 77.15  and institutions; supervise the care of children in boarding and 
 77.16  foster homes or in private institutions; and generally perform 
 77.17  all functions relating to the field of child welfare now vested 
 77.18  in the state board of control. 
 77.19     (4) Administer and supervise all noninstitutional service 
 77.20  to handicapped persons, including those who are visually 
 77.21  impaired, hearing impaired, or physically impaired or otherwise 
 77.22  handicapped.  The commissioner may provide and contract for the 
 77.23  care and treatment of qualified indigent children in facilities 
 77.24  other than those located and available at state hospitals when 
 77.25  it is not feasible to provide the service in state hospitals. 
 77.26     (5) Assist and actively cooperate with other departments, 
 77.27  agencies and institutions, local, state, and federal, by 
 77.28  performing services in conformity with the purposes of Laws 
 77.29  1939, chapter 431. 
 77.30     (6) Act as the agent of and cooperate with the federal 
 77.31  government in matters of mutual concern relative to and in 
 77.32  conformity with the provisions of Laws 1939, chapter 431, 
 77.33  including the administration of any federal funds granted to the 
 77.34  state to aid in the performance of any functions of the 
 77.35  commissioner as specified in Laws 1939, chapter 431, and 
 77.36  including the promulgation of rules making uniformly available 
 78.1   medical care benefits to all recipients of public assistance, at 
 78.2   such times as the federal government increases its participation 
 78.3   in assistance expenditures for medical care to recipients of 
 78.4   public assistance, the cost thereof to be borne in the same 
 78.5   proportion as are grants of aid to said recipients. 
 78.6      (7) Establish and maintain any administrative units 
 78.7   reasonably necessary for the performance of administrative 
 78.8   functions common to all divisions of the department. 
 78.9      (8) Act as designated guardian of both the estate and the 
 78.10  person of all the wards of the state of Minnesota, whether by 
 78.11  operation of law or by an order of court, without any further 
 78.12  act or proceeding whatever, except as to persons committed as 
 78.13  mentally retarded.  For children under the guardianship of the 
 78.14  commissioner whose interests would be best served by adoptive 
 78.15  placement, the commissioner may contract with a licensed 
 78.16  child-placing agency or a Minnesota tribal social services 
 78.17  agency to provide adoption services.  A contract with a licensed 
 78.18  child-placing agency must be designed to supplement existing 
 78.19  county efforts and may not replace existing county programs, 
 78.20  unless the replacement is agreed to by the county board and the 
 78.21  appropriate exclusive bargaining representative or the 
 78.22  commissioner has evidence that child placements of the county 
 78.23  continue to be substantially below that of other counties.  
 78.24  Funds encumbered and obligated under an agreement for a specific 
 78.25  child shall remain available until the terms of the agreement 
 78.26  are fulfilled or the agreement is terminated. 
 78.27     (9) Act as coordinating referral and informational center 
 78.28  on requests for service for newly arrived immigrants coming to 
 78.29  Minnesota. 
 78.30     (10) The specific enumeration of powers and duties as 
 78.31  hereinabove set forth shall in no way be construed to be a 
 78.32  limitation upon the general transfer of powers herein contained. 
 78.33     (11) Establish county, regional, or statewide schedules of 
 78.34  maximum fees and charges which may be paid by county agencies 
 78.35  for medical, dental, surgical, hospital, nursing and nursing 
 78.36  home care and medicine and medical supplies under all programs 
 79.1   of medical care provided by the state and for congregate living 
 79.2   care under the income maintenance programs. 
 79.3      (12) Have the authority to conduct and administer 
 79.4   experimental projects to test methods and procedures of 
 79.5   administering assistance and services to recipients or potential 
 79.6   recipients of public welfare.  To carry out such experimental 
 79.7   projects, it is further provided that the commissioner of human 
 79.8   services is authorized to waive the enforcement of existing 
 79.9   specific statutory program requirements, rules, and standards in 
 79.10  one or more counties.  The order establishing the waiver shall 
 79.11  provide alternative methods and procedures of administration, 
 79.12  shall not be in conflict with the basic purposes, coverage, or 
 79.13  benefits provided by law, and in no event shall the duration of 
 79.14  a project exceed four years.  It is further provided that no 
 79.15  order establishing an experimental project as authorized by the 
 79.16  provisions of this section shall become effective until the 
 79.17  following conditions have been met: 
 79.18     (a) The secretary of health and human services of the 
 79.19  United States has agreed, for the same project, to waive state 
 79.20  plan requirements relative to statewide uniformity. 
 79.21     (b) A comprehensive plan, including estimated project 
 79.22  costs, shall be approved by the legislative advisory commission 
 79.23  and filed with the commissioner of administration.  
 79.24     (13) According to federal requirements, establish 
 79.25  procedures to be followed by local welfare boards in creating 
 79.26  citizen advisory committees, including procedures for selection 
 79.27  of committee members. 
 79.28     (14) Allocate federal fiscal disallowances or sanctions 
 79.29  which are based on quality control error rates for the aid to 
 79.30  families with dependent children program formerly codified in 
 79.31  sections 256.72 to 256.87, medical assistance, or food stamp 
 79.32  program in the following manner:  
 79.33     (a) One-half of the total amount of the disallowance shall 
 79.34  be borne by the county boards responsible for administering the 
 79.35  programs.  For the medical assistance and the AFDC program 
 79.36  formerly codified in sections 256.72 to 256.87, disallowances 
 80.1   shall be shared by each county board in the same proportion as 
 80.2   that county's expenditures for the sanctioned program are to the 
 80.3   total of all counties' expenditures for the AFDC program 
 80.4   formerly codified in sections 256.72 to 256.87, and medical 
 80.5   assistance programs.  For the food stamp program, sanctions 
 80.6   shall be shared by each county board, with 50 percent of the 
 80.7   sanction being distributed to each county in the same proportion 
 80.8   as that county's administrative costs for food stamps are to the 
 80.9   total of all food stamp administrative costs for all counties, 
 80.10  and 50 percent of the sanctions being distributed to each county 
 80.11  in the same proportion as that county's value of food stamp 
 80.12  benefits issued are to the total of all benefits issued for all 
 80.13  counties.  Each county shall pay its share of the disallowance 
 80.14  to the state of Minnesota.  When a county fails to pay the 
 80.15  amount due hereunder, the commissioner may deduct the amount 
 80.16  from reimbursement otherwise due the county, or the attorney 
 80.17  general, upon the request of the commissioner, may institute 
 80.18  civil action to recover the amount due. 
 80.19     (b) Notwithstanding the provisions of paragraph (a), if the 
 80.20  disallowance results from knowing noncompliance by one or more 
 80.21  counties with a specific program instruction, and that knowing 
 80.22  noncompliance is a matter of official county board record, the 
 80.23  commissioner may require payment or recover from the county or 
 80.24  counties, in the manner prescribed in paragraph (a), an amount 
 80.25  equal to the portion of the total disallowance which resulted 
 80.26  from the noncompliance, and may distribute the balance of the 
 80.27  disallowance according to paragraph (a).  
 80.28     (15) Develop and implement special projects that maximize 
 80.29  reimbursements and result in the recovery of money to the 
 80.30  state.  For the purpose of recovering state money, the 
 80.31  commissioner may enter into contracts with third parties.  Any 
 80.32  recoveries that result from projects or contracts entered into 
 80.33  under this paragraph shall be deposited in the state treasury 
 80.34  and credited to a special account until the balance in the 
 80.35  account reaches $1,000,000.  When the balance in the account 
 80.36  exceeds $1,000,000, the excess shall be transferred and credited 
 81.1   to the general fund.  All money in the account is appropriated 
 81.2   to the commissioner for the purposes of this paragraph. 
 81.3      (16) Have the authority to make direct payments to 
 81.4   facilities providing shelter to women and their children 
 81.5   according to section 256D.05, subdivision 3.  Upon the written 
 81.6   request of a shelter facility that has been denied payments 
 81.7   under section 256D.05, subdivision 3, the commissioner shall 
 81.8   review all relevant evidence and make a determination within 30 
 81.9   days of the request for review regarding issuance of direct 
 81.10  payments to the shelter facility.  Failure to act within 30 days 
 81.11  shall be considered a determination not to issue direct payments.
 81.12     (17) Have the authority to establish and enforce the 
 81.13  following county reporting requirements:  
 81.14     (a) The commissioner shall establish fiscal and statistical 
 81.15  reporting requirements necessary to account for the expenditure 
 81.16  of funds allocated to counties for human services programs.  
 81.17  When establishing financial and statistical reporting 
 81.18  requirements, the commissioner shall evaluate all reports, in 
 81.19  consultation with the counties, to determine if the reports can 
 81.20  be simplified or the number of reports can be reduced. 
 81.21     (b) The county board shall submit monthly or quarterly 
 81.22  reports to the department as required by the commissioner.  
 81.23  Monthly reports are due no later than 15 working days after the 
 81.24  end of the month.  Quarterly reports are due no later than 30 
 81.25  calendar days after the end of the quarter, unless the 
 81.26  commissioner determines that the deadline must be shortened to 
 81.27  20 calendar days to avoid jeopardizing compliance with federal 
 81.28  deadlines or risking a loss of federal funding.  Only reports 
 81.29  that are complete, legible, and in the required format shall be 
 81.30  accepted by the commissioner.  
 81.31     (c) If the required reports are not received by the 
 81.32  deadlines established in clause (b), the commissioner may delay 
 81.33  payments and withhold funds from the county board until the next 
 81.34  reporting period.  When the report is needed to account for the 
 81.35  use of federal funds and the late report results in a reduction 
 81.36  in federal funding, the commissioner shall withhold from the 
 82.1   county boards with late reports an amount equal to the reduction 
 82.2   in federal funding until full federal funding is received.  
 82.3      (d) A county board that submits reports that are late, 
 82.4   illegible, incomplete, or not in the required format for two out 
 82.5   of three consecutive reporting periods is considered 
 82.6   noncompliant.  When a county board is found to be noncompliant, 
 82.7   the commissioner shall notify the county board of the reason the 
 82.8   county board is considered noncompliant and request that the 
 82.9   county board develop a corrective action plan stating how the 
 82.10  county board plans to correct the problem.  The corrective 
 82.11  action plan must be submitted to the commissioner within 45 days 
 82.12  after the date the county board received notice of noncompliance.
 82.13     (e) The final deadline for fiscal reports or amendments to 
 82.14  fiscal reports is one year after the date the report was 
 82.15  originally due.  If the commissioner does not receive a report 
 82.16  by the final deadline, the county board forfeits the funding 
 82.17  associated with the report for that reporting period and the 
 82.18  county board must repay any funds associated with the report 
 82.19  received for that reporting period. 
 82.20     (f) The commissioner may not delay payments, withhold 
 82.21  funds, or require repayment under paragraph (c) or (e) if the 
 82.22  county demonstrates that the commissioner failed to provide 
 82.23  appropriate forms, guidelines, and technical assistance to 
 82.24  enable the county to comply with the requirements.  If the 
 82.25  county board disagrees with an action taken by the commissioner 
 82.26  under paragraph (c) or (e), the county board may appeal the 
 82.27  action according to sections 14.57 to 14.69. 
 82.28     (g) Counties subject to withholding of funds under 
 82.29  paragraph (c) or forfeiture or repayment of funds under 
 82.30  paragraph (e) shall not reduce or withhold benefits or services 
 82.31  to clients to cover costs incurred due to actions taken by the 
 82.32  commissioner under paragraph (c) or (e). 
 82.33     (18) Allocate federal fiscal disallowances or sanctions for 
 82.34  audit exceptions when federal fiscal disallowances or sanctions 
 82.35  are based on a statewide random sample for the foster care 
 82.36  program under title IV-E of the Social Security Act, United 
 83.1   States Code, title 42, in direct proportion to each county's 
 83.2   title IV-E foster care maintenance claim for that period. 
 83.3      (19) Be responsible for ensuring the detection, prevention, 
 83.4   investigation, and resolution of fraudulent activities or 
 83.5   behavior by applicants, recipients, and other participants in 
 83.6   the human services programs administered by the department. 
 83.7      (20) Require county agencies to identify overpayments, 
 83.8   establish claims, and utilize all available and cost-beneficial 
 83.9   methodologies to collect and recover these overpayments in the 
 83.10  human services programs administered by the department. 
 83.11     (21) Have the authority to administer a drug rebate program 
 83.12  for drugs purchased pursuant to the prescription drug program 
 83.13  established under section 256.955 after the beneficiary's 
 83.14  satisfaction of any deductible established in the program.  The 
 83.15  commissioner shall require a rebate agreement from all 
 83.16  manufacturers of covered drugs as defined in section 256B.0625, 
 83.17  subdivision 13.  Rebate agreements for prescription drugs 
 83.18  delivered on or after July 1, 2002, must include rebates for 
 83.19  individuals covered under the prescription drug program who are 
 83.20  under 65 years of age.  For each drug, the amount of the rebate 
 83.21  shall be equal to the basic rebate as defined for purposes of 
 83.22  the federal rebate program in United States Code, title 42, 
 83.23  section 1396r-8(c)(1).  This basic rebate shall be applied to 
 83.24  single-source and multiple-source drugs.  The manufacturers must 
 83.25  provide full payment within 30 days of receipt of the state 
 83.26  invoice for the rebate within the terms and conditions used for 
 83.27  the federal rebate program established pursuant to section 1927 
 83.28  of title XIX of the Social Security Act.  The manufacturers must 
 83.29  provide the commissioner with any information necessary to 
 83.30  verify the rebate determined per drug.  The rebate program shall 
 83.31  utilize the terms and conditions used for the federal rebate 
 83.32  program established pursuant to section 1927 of title XIX of the 
 83.33  Social Security Act. 
 83.34     (22) Have the authority to administer the federal drug 
 83.35  rebate program for drugs purchased under the medical assistance 
 83.36  program as allowed by section 1927 of title XIX of the Social 
 84.1   Security Act and according to the terms and conditions of 
 84.2   section 1927.  Rebates shall be collected for all drugs that 
 84.3   have been dispensed or administered in an outpatient setting and 
 84.4   that are from manufacturers who have signed a rebate agreement 
 84.5   with the United States Department of Health and Human Services. 
 84.6      (23) Have the authority to administer a supplemental drug 
 84.7   rebate program for drugs purchased under the medical assistance 
 84.8   program and under the prescription drug program established in 
 84.9   section 256.955.  The commissioner may enter into supplemental 
 84.10  rebate contracts with pharmaceutical manufacturers and may 
 84.11  require prior authorization for drugs that are from 
 84.12  manufacturers that have not signed a supplemental rebate 
 84.13  contract.  Prior authorization of drugs shall be subject to the 
 84.14  provisions of section 256B.0625, subdivision 13, paragraph (b). 
 84.15     (24) Operate the department's communication systems account 
 84.16  established in Laws 1993, First Special Session chapter 1, 
 84.17  article 1, section 2, subdivision 2, to manage shared 
 84.18  communication costs necessary for the operation of the programs 
 84.19  the commissioner supervises.  A communications account may also 
 84.20  be established for each regional treatment center which operates 
 84.21  communications systems.  Each account must be used to manage 
 84.22  shared communication costs necessary for the operations of the 
 84.23  programs the commissioner supervises.  The commissioner may 
 84.24  distribute the costs of operating and maintaining communication 
 84.25  systems to participants in a manner that reflects actual usage. 
 84.26  Costs may include acquisition, licensing, insurance, 
 84.27  maintenance, repair, staff time and other costs as determined by 
 84.28  the commissioner.  Nonprofit organizations and state, county, 
 84.29  and local government agencies involved in the operation of 
 84.30  programs the commissioner supervises may participate in the use 
 84.31  of the department's communications technology and share in the 
 84.32  cost of operation.  The commissioner may accept on behalf of the 
 84.33  state any gift, bequest, devise or personal property of any 
 84.34  kind, or money tendered to the state for any lawful purpose 
 84.35  pertaining to the communication activities of the department.  
 84.36  Any money received for this purpose must be deposited in the 
 85.1   department's communication systems accounts.  Money collected by 
 85.2   the commissioner for the use of communication systems must be 
 85.3   deposited in the state communication systems account and is 
 85.4   appropriated to the commissioner for purposes of this section. 
 85.5      (25) Receive any federal matching money that is made 
 85.6   available through the medical assistance program for the 
 85.7   consumer satisfaction survey.  Any federal money received for 
 85.8   the survey is appropriated to the commissioner for this 
 85.9   purpose.  The commissioner may expend the federal money received 
 85.10  for the consumer satisfaction survey in either year of the 
 85.11  biennium. 
 85.12     (26) Incorporate cost reimbursement claims from First Call 
 85.13  Minnesota and Greater Twin Cities United Way into the federal 
 85.14  cost reimbursement claiming processes of the department 
 85.15  according to federal law, rule, and regulations.  Any 
 85.16  reimbursement received is appropriated to the commissioner and 
 85.17  shall be disbursed to First Call Minnesota and Greater Twin 
 85.18  Cities United Way according to normal department payment 
 85.19  schedules. 
 85.20     (27) Develop recommended standards for foster care homes 
 85.21  that address the components of specialized therapeutic services 
 85.22  to be provided by foster care homes with those services.  
 85.23     Sec. 6.  Minnesota Statutes 2000, section 256.9657, 
 85.24  subdivision 1, as amended by Laws 2002, chapter 220, article 14, 
 85.25  section 5, is amended to read: 
 85.26     Subdivision 1.  [NURSING HOME LICENSE SURCHARGE.] (a) 
 85.27  Effective July 1, 1993, each non-state-operated nursing home 
 85.28  licensed under chapter 144A shall pay to the commissioner an 
 85.29  annual surcharge according to the schedule in subdivision 4.  
 85.30  The surcharge shall be calculated as $620 per licensed bed.  If 
 85.31  the number of licensed beds is reduced, the surcharge shall be 
 85.32  based on the number of remaining licensed beds the second month 
 85.33  following the receipt of timely notice by the commissioner of 
 85.34  human services that beds have been delicensed.  The nursing home 
 85.35  must notify the commissioner of health in writing when beds are 
 85.36  delicensed.  The commissioner of health must notify the 
 86.1   commissioner of human services within ten working days after 
 86.2   receiving written notification.  If the notification is received 
 86.3   by the commissioner of human services by the 15th of the month, 
 86.4   the invoice for the second following month must be reduced to 
 86.5   recognize the delicensing of beds.  Beds on layaway status 
 86.6   continue to be subject to the surcharge.  The commissioner of 
 86.7   human services must acknowledge a medical care surcharge appeal 
 86.8   within 30 days of receipt of the written appeal from the 
 86.9   provider. 
 86.10     (b) Effective July 1, 1994, the surcharge in paragraph (a) 
 86.11  shall be increased to $625. 
 86.12     (c) Effective August 15, 2003, the surcharge under 
 86.13  paragraph (b) shall be increased by an amount necessary to 
 86.14  ensure a net gain to the general fund of $9,620,000 during 
 86.15  fiscal year 2004 as a result of: 
 86.16     (1) the total transfers anticipated during the fiscal year 
 86.17  ending June 30, 2004, under section 256B.19, subdivision 1d, 
 86.18  paragraph (c); 
 86.19     (2) the county nursing home payment adjustments under 
 86.20  section 256B.431, subdivision 23, paragraph (c); 
 86.21     (3) the surcharges under this paragraph; and 
 86.22     (4) the nursing facility rate increases under section 
 86.23  256B.431, subdivision 37. 
 86.24  The increase under this paragraph shall not exceed $365 per bed. 
 86.25     (d) Effective August 15, 2004, the surcharge under 
 86.26  paragraph (c) shall be equal to an amount necessary to ensure a 
 86.27  net gain to the general fund each fiscal year of $10,228,000 as 
 86.28  a result of: 
 86.29     (1) the total transfers anticipated during the fiscal year 
 86.30  under section 256B.19, subdivision 1d, paragraph (c); 
 86.31     (2) the county nursing home payment adjustments under 
 86.32  section 256B.431, subdivision 23, paragraph (c); 
 86.33     (3) the surcharges under this paragraph; and 
 86.34     (4) the nursing facility rate increases under section 
 86.35  256B.431, subdivision 37. 
 86.36  The surcharge under this paragraph shall not exceed $365 per bed.
 87.1      (e) Between April 1, 2002, and August 15, 2003, a facility 
 87.2   governed by this subdivision may elect to assume full 
 87.3   participation in the medical assistance program by agreeing to 
 87.4   comply with all of the requirements of the medical assistance 
 87.5   program, including the rate equalization law in section 256B.48, 
 87.6   subdivision 1, paragraph (a), and all other requirements 
 87.7   established in law or rule, and to begin intake of new medical 
 87.8   assistance recipients.  Rates will be determined under Minnesota 
 87.9   Rules, parts 9549.0010 to 9549.0080.  Notwithstanding section 
 87.10  256B.431, subdivision 27, paragraph (i), rate calculations will 
 87.11  be subject to limits as prescribed in rule and law.  Other than 
 87.12  the adjustments in Minnesota Rules, part 9549.0057; sections 
 87.13  256B.431, subdivisions 30 and 32; 256B.437, subdivision 3, 
 87.14  paragraph (b), and any other applicable legislation enacted 
 87.15  prior to the finalization of rates, facilities assuming full 
 87.16  participation in medical assistance under this paragraph are not 
 87.17  eligible for any rate adjustments until the July 1 following 
 87.18  their settle-up period. 
 87.19     <h>[EFFECTIVE DATE.]</h> This section is effective April 1, 2002. 
 87.20     Sec. 7.  Minnesota Statutes 2001 Supplement, section 
 87.21  256B.057, subdivision 9, is amended to read: 
 87.22     Subd. 9.  [EMPLOYED PERSONS WITH DISABILITIES.] (a) Medical 
 87.23  assistance may be paid for a person who is employed and who: 
 87.24     (1) meets the definition of disabled under the supplemental 
 87.25  security income program; 
 87.26     (2) is at least 16 but less than 65 years of age; 
 87.27     (3) meets the asset limits in paragraph (b); and 
 87.28     (4) pays a premium, if required, under paragraph (c).  
 87.29  The person must verify earnings from employment by documenting 
 87.30  that social security and Medicare taxes are withheld, and, if 
 87.31  applicable, state and federal income taxes are also withheld.  
 87.32  If the person is self-employed, the person must document payment 
 87.33  of self-employment tax and, if applicable, state and federal 
 87.34  income taxes. 
 87.35  Any spousal income or assets shall be disregarded for purposes 
 87.36  of eligibility and premium determinations. 
 88.1      After the month of enrollment, a person enrolled in medical 
 88.2   assistance under this subdivision who is temporarily unable to 
 88.3   work and without receipt of earned income due to a medical 
 88.4   condition, as verified by a physician, may retain eligibility 
 88.5   for up to four calendar months. 
 88.6      (b) For purposes of determining eligibility under this 
 88.7   subdivision, a person's assets must not exceed $20,000, 
 88.8   excluding: 
 88.9      (1) all assets excluded under section 256B.056; 
 88.10     (2) retirement accounts, including individual accounts, 
 88.11  401(k) plans, 403(b) plans, Keogh plans, and pension plans; and 
 88.12     (3) medical expense accounts set up through the person's 
 88.13  employer. 
 88.14     (c) A person whose earned and unearned income is equal to 
 88.15  or greater than 100 percent of federal poverty guidelines for 
 88.16  the applicable family size must pay a premium to be eligible for 
 88.17  medical assistance under this subdivision.  The premium shall be 
 88.18  based on the person's gross earned and unearned income and the 
 88.19  applicable family size using a sliding fee scale established by 
 88.20  the commissioner, which begins at one percent of income at 100 
 88.21  percent of the federal poverty guidelines and increases to 7.5 
 88.22  percent of income for those with incomes at or above 300 percent 
 88.23  of the federal poverty guidelines.  Annual adjustments in the 
 88.24  premium schedule based upon changes in the federal poverty 
 88.25  guidelines shall be effective for premiums due in July of each 
 88.26  year.  
 88.27     (d) A person's eligibility and premium shall be determined 
 88.28  by the local county agency.  Premiums must be paid to the 
 88.29  commissioner.  All premiums are dedicated to the commissioner. 
 88.30     (e) Any required premium shall be determined at application 
 88.31  and redetermined annually at recertification or when a change in 
 88.32  income or family size occurs. 
 88.33     (f) Premium payment is due upon notification from the 
 88.34  commissioner of the premium amount required.  Premiums may be 
 88.35  paid in installments at the discretion of the commissioner. 
 88.36     (g) Nonpayment of the premium shall result in denial or 
 89.1   termination of medical assistance unless the person demonstrates 
 89.2   good cause for nonpayment.  Good cause exists if the 
 89.3   requirements specified in Minnesota Rules, part 9506.0040, 
 89.4   subpart 7, items B to D, are met.  Nonpayment shall include 
 89.5   payment with a returned, refused, or dishonored instrument.  The 
 89.6   commissioner may require a guaranteed form of payment as the 
 89.7   only means to replace a returned, refused, or dishonored 
 89.8   instrument. 
 89.9      Sec. 8.  Minnesota Statutes 2001 Supplement, section 
 89.10  256B.0625, subdivision 13, as amended by Laws 2002, chapter 220, 
 89.11  article 15, section 13, is amended to read: 
 89.12     Subd. 13.  [DRUGS.] (a) Medical assistance covers drugs, 
 89.13  except for fertility drugs when specifically used to enhance 
 89.14  fertility, if prescribed by a licensed practitioner and 
 89.15  dispensed by a licensed pharmacist, by a physician enrolled in 
 89.16  the medical assistance program as a dispensing physician, or by 
 89.17  a physician or a nurse practitioner employed by or under 
 89.18  contract with a community health board as defined in section 
 89.19  145A.02, subdivision 5, for the purposes of communicable disease 
 89.20  control.  The commissioner, after receiving recommendations from 
 89.21  professional medical associations and professional pharmacist 
 89.22  associations, shall designate a formulary committee to advise 
 89.23  the commissioner on the names of drugs for which payment is 
 89.24  made, recommend a system for reimbursing providers on a set fee 
 89.25  or charge basis rather than the present system, and develop 
 89.26  methods encouraging use of generic drugs when they are less 
 89.27  expensive and equally effective as trademark drugs.  The 
 89.28  formulary committee shall consist of nine members, four of whom 
 89.29  shall be physicians who are not employed by the department of 
 89.30  human services, and a majority of whose practice is for persons 
 89.31  paying privately or through health insurance, three of whom 
 89.32  shall be pharmacists who are not employed by the department of 
 89.33  human services, and a majority of whose practice is for persons 
 89.34  paying privately or through health insurance, a consumer 
 89.35  representative, and a nursing home representative.  Committee 
 89.36  members shall serve three-year terms and shall serve without 
 90.1   compensation.  Members may be reappointed once.  
 90.2      (b) The commissioner shall establish a drug formulary.  Its 
 90.3   establishment and publication shall not be subject to the 
 90.4   requirements of the Administrative Procedure Act, but the 
 90.5   formulary committee shall review and comment on the formulary 
 90.6   contents.  
 90.7      The formulary shall not include:  
 90.8      (i) drugs or products for which there is no federal 
 90.9   funding; 
 90.10     (ii) over-the-counter drugs, except for antacids, 
 90.11  acetaminophen, family planning products, aspirin, insulin, 
 90.12  products for the treatment of lice, vitamins for adults with 
 90.13  documented vitamin deficiencies, vitamins for children under the 
 90.14  age of seven and pregnant or nursing women, and any other 
 90.15  over-the-counter drug identified by the commissioner, in 
 90.16  consultation with the drug formulary committee, as necessary, 
 90.17  appropriate, and cost-effective for the treatment of certain 
 90.18  specified chronic diseases, conditions or disorders, and this 
 90.19  determination shall not be subject to the requirements of 
 90.20  chapter 14; 
 90.21     (iii) anorectics, except that medically necessary 
 90.22  anorectics shall be covered for a recipient previously diagnosed 
 90.23  as having pickwickian syndrome and currently diagnosed as having 
 90.24  diabetes and being morbidly obese; 
 90.25     (iv) drugs for which medical value has not been 
 90.26  established; and 
 90.27     (v) drugs from manufacturers who have not signed a rebate 
 90.28  agreement with the Department of Health and Human Services 
 90.29  pursuant to section 1927 of title XIX of the Social Security Act.
 90.30     The commissioner shall publish conditions for prohibiting 
 90.31  payment for specific drugs after considering the formulary 
 90.32  committee's recommendations.  An honorarium of $100 per meeting 
 90.33  and reimbursement for mileage shall be paid to each committee 
 90.34  member in attendance.  
 90.35     (c) The basis for determining the amount of payment shall 
 90.36  be the lower of the actual acquisition costs of the drugs plus a 
 91.1   fixed dispensing fee; the maximum allowable cost set by the 
 91.2   federal government or by the commissioner plus the fixed 
 91.3   dispensing fee; or the usual and customary price charged to the 
 91.4   public.  The pharmacy dispensing fee shall be $3.65 $4.15, 
 91.5   except that the dispensing fee for intravenous solutions which 
 91.6   must be compounded by the pharmacist shall be $8 per bag, $14 
 91.7   per bag for cancer chemotherapy products, and $30 per bag for 
 91.8   total parenteral nutritional products dispensed in one liter 
 91.9   quantities, or $44 per bag for total parenteral nutritional 
 91.10  products dispensed in quantities greater than one liter.  Actual 
 91.11  acquisition cost includes quantity and other special discounts 
 91.12  except time and cash discounts.  The actual acquisition cost of 
 91.13  a drug shall be estimated by the commissioner, at average 
 91.14  wholesale price minus nine 14 percent, except that where a drug 
 91.15  has had its wholesale price reduced as a result of the actions 
 91.16  of the National Association of Medicaid Fraud Control Units, the 
 91.17  estimated actual acquisition cost shall be the reduced average 
 91.18  wholesale price, without the nine 14 percent deduction.  The 
 91.19  maximum allowable cost of a multisource drug may be set by the 
 91.20  commissioner and it shall be comparable to, but no higher than, 
 91.21  the maximum amount paid by other third-party payors in this 
 91.22  state who have maximum allowable cost programs.  The 
 91.23  commissioner shall set maximum allowable costs for multisource 
 91.24  drugs that are not on the federal upper limit list as described 
 91.25  in United States Code, title 42, chapter 7, section 1396r-8(e), 
 91.26  the Social Security Act, and Code of Federal Regulations, title 
 91.27  42, part 447, section 447.332.  Establishment of the amount of 
 91.28  payment for drugs shall not be subject to the requirements of 
 91.29  the Administrative Procedure Act.  An additional dispensing fee 
 91.30  of $.30 may be added to the dispensing fee paid to pharmacists 
 91.31  for legend drug prescriptions dispensed to residents of 
 91.32  long-term care facilities when a unit dose blister card system, 
 91.33  approved by the department, is used.  Under this type of 
 91.34  dispensing system, the pharmacist must dispense a 30-day supply 
 91.35  of drug.  The National Drug Code (NDC) from the drug container 
 91.36  used to fill the blister card must be identified on the claim to 
 92.1   the department.  The unit dose blister card containing the drug 
 92.2   must meet the packaging standards set forth in Minnesota Rules, 
 92.3   part 6800.2700, that govern the return of unused drugs to the 
 92.4   pharmacy for reuse.  The pharmacy provider will be required to 
 92.5   credit the department for the actual acquisition cost of all 
 92.6   unused drugs that are eligible for reuse.  Over-the-counter 
 92.7   medications must be dispensed in the manufacturer's unopened 
 92.8   package.  The commissioner may permit the drug clozapine to be 
 92.9   dispensed in a quantity that is less than a 30-day supply.  
 92.10  Whenever a generically equivalent product is available, payment 
 92.11  shall be on the basis of the actual acquisition cost of the 
 92.12  generic drug, unless the prescriber specifically indicates 
 92.13  "dispense as written - brand necessary" on the prescription as 
 92.14  required by section 151.21, subdivision 2. 
 92.15     (d) For purposes of this subdivision, "multisource drugs" 
 92.16  means covered outpatient drugs, excluding innovator multisource 
 92.17  drugs for which there are two or more drug products, which: 
 92.18     (1) are related as therapeutically equivalent under the 
 92.19  Food and Drug Administration's most recent publication of 
 92.20  "Approved Drug Products with Therapeutic Equivalence 
 92.21  Evaluations"; 
 92.22     (2) are pharmaceutically equivalent and bioequivalent as 
 92.23  determined by the Food and Drug Administration; and 
 92.24     (3) are sold or marketed in Minnesota. 
 92.25  "Innovator multisource drug" means a multisource drug that was 
 92.26  originally marketed under an original new drug application 
 92.27  approved by the Food and Drug Administration Effective for 
 92.28  prescriptions dispensed on or after July 1, 2002, the 
 92.29  commissioner, may, within the limits of available appropriation, 
 92.30  increase the dispensing fee described in paragraph (c) to 
 92.31  pharmacies deemed by the commissioner to be a critical-access 
 92.32  pharmacy.  In determining whether a pharmacy shall be deemed a 
 92.33  critical-access pharmacy, the commissioner shall consider the 
 92.34  following criteria:  
 92.35     (1) for pharmacies located outside the seven-county 
 92.36  metropolitan area: 
 93.1      (i) the total annual sum of the pharmacy's fee-for-service 
 93.2   medical assistance payments for the previous year in all 
 93.3   locations, excluding payments for prescriptions dispensed to 
 93.4   residents residing in nursing homes.  The pharmacy's total 
 93.5   annual sum must be no greater than $300,000; and 
 93.6      (ii) the proximity of the pharmacy to other medical 
 93.7   assistance pharmacy providers in a specified geographic area; 
 93.8   and 
 93.9      (2) for pharmacies located within the seven-county 
 93.10  metropolitan area: 
 93.11     (i) the percentage of the pharmacy's annual fee-for-service 
 93.12  medical assistance payments in that location, excluding payments 
 93.13  for prescriptions dispensed to residents in nursing homes 
 93.14  compared to the pharmacy's total annual prescription drug 
 93.15  sales.  The pharmacy's percentage must be greater than the 
 93.16  average percentage for pharmacies enrolled as a medical 
 93.17  assistance provider; and 
 93.18     (ii) the proximity of the pharmacy to other medical 
 93.19  assistance pharmacy providers in a specified geographic area.  
 93.20     The commissioner may establish regions within the state for 
 93.21  purposes of applying this criteria and may assign different 
 93.22  weights to the criteria depending on the region.  
 93.23     (e) The formulary committee shall review and recommend 
 93.24  drugs which require prior authorization.  The formulary 
 93.25  committee may recommend drugs for prior authorization directly 
 93.26  to the commissioner, as long as opportunity for public input is 
 93.27  provided.  Prior authorization may be requested by the 
 93.28  commissioner based on medical and clinical criteria and on cost 
 93.29  before certain drugs are eligible for payment.  Before a drug 
 93.30  may be considered for prior authorization at the request of the 
 93.31  commissioner: 
 93.32     (1) the drug formulary committee must develop criteria to 
 93.33  be used for identifying drugs; the development of these criteria 
 93.34  is not subject to the requirements of chapter 14, but the 
 93.35  formulary committee shall provide opportunity for public input 
 93.36  in developing criteria; 
 94.1      (2) the drug formulary committee must hold a public forum 
 94.2   and receive public comment for an additional 15 days; and 
 94.3      (3) the drug formulary committee must consider data from 
 94.4   the state Medicaid program if such data is available; and 
 94.5      (4) the commissioner must provide information to the 
 94.6   formulary committee on the impact that placing the drug on prior 
 94.7   authorization will have on the quality of patient care and on 
 94.8   program costs, and information regarding whether the drug is 
 94.9   subject to clinical abuse or misuse.  
 94.10     Prior authorization may be required by the commissioner 
 94.11  before certain formulary drugs are eligible for payment.  If 
 94.12  prior authorization of a drug is required by the commissioner, 
 94.13  the commissioner must provide a 30-day notice period before 
 94.14  implementing the prior authorization.  If a prior authorization 
 94.15  request is denied by the department, the recipient may appeal 
 94.16  the denial in accordance with section 256.045.  If an appeal is 
 94.17  filed, the drug must be provided without prior authorization 
 94.18  until a decision is made on the appeal.  
 94.19     (f) The basis for determining the amount of payment for 
 94.20  drugs administered in an outpatient setting shall be the lower 
 94.21  of the usual and customary cost submitted by the provider; the 
 94.22  average wholesale price minus five percent; or the maximum 
 94.23  allowable cost set by the federal government under United States 
 94.24  Code, title 42, chapter 7, section 1396r-8(e), and Code of 
 94.25  Federal Regulations, title 42, section 447.332, or by the 
 94.26  commissioner under paragraph (c). 
 94.27     (g) Prior authorization shall not be required or utilized 
 94.28  for any antipsychotic drug prescribed for the treatment of 
 94.29  mental illness where there is no generically equivalent drug 
 94.30  available unless the commissioner determines that prior 
 94.31  authorization is necessary for patient safety.  This paragraph 
 94.32  applies to any supplemental drug rebate program established or 
 94.33  administered by the commissioner. 
 94.34     Sec. 9.  Minnesota Statutes 2000, section 256B.19, 
 94.35  subdivision 1, as amended by Laws 2002, chapter 220, article 14, 
 94.36  section 7, is amended to read: 
 95.1      Subdivision 1.  [DIVISION OF COST.] The state and county 
 95.2   share of medical assistance costs not paid by federal funds 
 95.3   shall be as follows:  
 95.4      (1) ninety 90 percent state funds and ten percent county 
 95.5   funds, unless otherwise provided below; 
 95.6      (2) beginning January 1, 1992, 50 percent state funds and 
 95.7   50 percent county funds for the cost of placement of severely 
 95.8   emotionally disturbed children in regional treatment centers; 
 95.9   and 
 95.10     (3) beginning January 1, 2003, 80 percent state funds and 
 95.11  20 percent county funds for the costs of nursing facility 
 95.12  placements of persons with disabilities under the age of 65 that 
 95.13  have exceeded 90 days.  This clause shall be subject to chapter 
 95.14  256G and shall not apply to placements in facilities not 
 95.15  certified to participate in medical assistance. 
 95.16     For counties that participate in a Medicaid demonstration 
 95.17  project under sections 256B.69 and 256B.71, the division of the 
 95.18  nonfederal share of medical assistance expenses for payments 
 95.19  made to prepaid health plans or for payments made to health 
 95.20  maintenance organizations in the form of prepaid capitation 
 95.21  payments, this division of medical assistance expenses shall be 
 95.22  95 percent by the state and five percent by the county of 
 95.23  financial responsibility.  
 95.24     In counties where prepaid health plans are under contract 
 95.25  to the commissioner to provide services to medical assistance 
 95.26  recipients, the cost of court ordered treatment ordered without 
 95.27  consulting the prepaid health plan that does not include 
 95.28  diagnostic evaluation, recommendation, and referral for 
 95.29  treatment by the prepaid health plan is the responsibility of 
 95.30  the county of financial responsibility. 
 95.31     Sec. 10.  Minnesota Statutes 2000, section 256B.69, 
 95.32  subdivision 5a, as amended by Laws 2002, chapter 220, article 
 95.33  15, section 15, is amended to read: 
 95.34     Subd. 5a.  [MANAGED CARE CONTRACTS.] (a) Managed care 
 95.35  contracts under this section and sections 256L.12 and 256D.03, 
 95.36  shall be entered into or renewed on a calendar year basis 
 96.1   beginning January 1, 1996.  Managed care contracts which were in 
 96.2   effect on June 30, 1995, and set to renew on July 1, 1995, shall 
 96.3   be renewed for the period July 1, 1995 through December 31, 1995 
 96.4   at the same terms that were in effect on June 30, 1995. 
 96.5      (b) A prepaid health plan providing covered health services 
 96.6   for eligible persons pursuant to chapters 256B, 256D, and 256L, 
 96.7   is responsible for complying with the terms of its contract with 
 96.8   the commissioner.  Requirements applicable to managed care 
 96.9   programs under chapters 256B, 256D, and 256L, established after 
 96.10  the effective date of a contract with the commissioner take 
 96.11  effect when the contract is next issued or renewed. 
 96.12     (c) Effective for services rendered on or after January 1, 
 96.13  2003, the commissioner shall withhold five percent of managed 
 96.14  care plan payments under this section for the prepaid medical 
 96.15  assistance and general assistance medical care programs pending 
 96.16  completion of performance targets.  The withheld funds will must 
 96.17  be returned no sooner than July of the following year if 
 96.18  performance targets in the contract are achieved.  The 
 96.19  commissioner may exclude special demonstration projects under 
 96.20  subdivision 23.  A managed care plan may include as admitted 
 96.21  assets under section 62D.044 any amount withheld under this 
 96.22  paragraph that is reasonably expected to be returned.  
 96.23     Sec. 11.  Minnesota Statutes 2000, section 256E.06, 
 96.24  subdivision 3, is amended to read: 
 96.25     Subd. 3.  [PAYMENTS TO COUNTIES.] The commissioner of human 
 96.26  services shall make payments for community social services to 
 96.27  each county in four installments per on or before July 10 of 
 96.28  each year.  The commissioner of human services may certify the 
 96.29  payments for the first three months of a calendar year based on 
 96.30  estimates of the unduplicated number of persons receiving 
 96.31  Minnesota family investment program assistance, general 
 96.32  assistance, and medical assistance for the prior year.  The 
 96.33  following three payments shall be adjusted to reflect the actual 
 96.34  unduplicated number of persons who received Minnesota family 
 96.35  investment program assistance, general assistance, and medical 
 96.36  assistance as required by subdivision 1.  The commissioner shall 
 97.1   ensure that the pertinent payment of the allotment for that 
 97.2   quarter is made to each county on the first working day after 
 97.3   the end of each quarter of the calendar year, except for the 
 97.4   last quarter of the calendar year.  The commissioner shall 
 97.5   ensure that each county receives its payment of the allotment 
 97.6   for that quarter no later than the last working day of that 
 97.7   quarter.  This scheduling of payments does not require 
 97.8   compliance with subdivision 10.  
 97.9      Sec. 12.  Minnesota Statutes 2000, section 256I.04, 
 97.10  subdivision 2a, is amended to read: 
 97.11     Subd. 2a.  [LICENSE REQUIRED.] A county agency may not 
 97.12  enter into an agreement with an establishment to provide group 
 97.13  residential housing unless:  
 97.14     (1) the establishment is licensed by the department of 
 97.15  health as a hotel and restaurant; a board and lodging 
 97.16  establishment; a residential care home; a boarding care home 
 97.17  before March 1, 1985; or a supervised living facility, and the 
 97.18  service provider for residents of the facility is licensed under 
 97.19  chapter 245A.  However, an establishment licensed by the 
 97.20  department of health to provide lodging need not also be 
 97.21  licensed to provide board if meals are being supplied to 
 97.22  residents under a contract with a food vendor who is licensed by 
 97.23  the department of health; 
 97.24     (2) the residence is licensed by the commissioner of human 
 97.25  services under Minnesota Rules, parts 9555.5050 to 9555.6265, or 
 97.26  certified by a county human services agency prior to July 1, 
 97.27  1992, using the standards under Minnesota Rules, parts 9555.5050 
 97.28  to 9555.6265; or 
 97.29     (3) the establishment is registered under chapter 144D and 
 97.30  provides three meals a day, except that an establishment 
 97.31  registered under section 144D.025 is not eligible for an 
 97.32  agreement to provide group residential housing. 
 97.33     The requirements under clauses (1), (2), and (3) do not 
 97.34  apply to establishments exempt from state licensure because they 
 97.35  are located on Indian reservations and subject to tribal health 
 97.36  and safety requirements. 
 98.1      Sec. 13.  Minnesota Statutes 2000, section 256L.12, 
 98.2   subdivision 9, as amended by Laws 2002, chapter 220, article 15, 
 98.3   section 23, is amended to read: 
 98.4      Subd. 9.  [RATE SETTING.] (a) Rates will be prospective, 
 98.5   per capita, where possible.  The commissioner may allow health 
 98.6   plans to arrange for inpatient hospital services on a risk or 
 98.7   nonrisk basis.  The commissioner shall consult with an 
 98.8   independent actuary to determine appropriate rates. 
 98.9      (b) For services rendered on or after January 1, 2003, the 
 98.10  commissioner shall withhold .5 percent of managed care plan 
 98.11  payments under this section pending completion of performance 
 98.12  targets.  The withheld funds will must be returned no sooner 
 98.13  than July 1 and no later than July 31 of the following year if 
 98.14  performance targets in the contract are achieved.  A managed 
 98.15  care plan may include as admitted assets under section 62D.044 
 98.16  any amount withheld under this paragraph that is reasonably 
 98.17  expected to be returned.  
 98.18     Sec. 14.  Laws 2001, First Special Session chapter 9, 
 98.19  article 2, section 74, is amended to read: 
 98.20     Sec. 74.  [ELIGIBILITY EXCEPTION TO THE PRESCRIPTION DRUG 
 98.21  PROGRAM.] 
 98.22     Notwithstanding the requirements of Minnesota Statutes, 
 98.23  section 256.955, subdivision 2, paragraph (d), from March 1, 
 98.24  2001, to June 30, 2002, the definition of a "qualified 
 98.25  individual" in the prescription drug program established under 
 98.26  Minnesota Statutes, section 256.955, shall include an individual 
 98.27  who: 
 98.28     (1) was enrolled in the prescription drug program prior to 
 98.29  March 1, 2001; 
 98.30     (2) was enrolled in a Medicare risk plan prior to March 1, 
 98.31  2001, to which an annual prescription drug benefit of $400 was 
 98.32  added on March 1, 2001; and 
 98.33     (3) meets the requirements described in Minnesota Statutes, 
 98.34  section 256.955, subdivision 2, paragraph (d), clauses (1) and 
 98.35  (5), and subdivision 2a. 
 98.36  The prescription benefit offered by the Medicare risk plan shall 
 99.1   be primary to benefits provided under the prescription drug 
 99.2   program. 
 99.3      Sec. 15.  Laws 2002, chapter 220, article 17, section 2, 
 99.4   subdivision 6, is amended to read: 
 99.5   Subd. 6.  Continuing Care 
 99.6   Grants
 99.7   General              (8,907,000) (26,227,000)
 99.8   The amounts that may be spent from this 
 99.9   appropriation for each purpose are as 
 99.10  follows: 
 99.11  (a) Aging Adult Service
 99.12  Grants
 99.13  General                   -0-     (2,638,000)
 99.14  [PLANNING AND SERVICE DEVELOPMENT.] The 
 99.15  planning and service development grant 
 99.16  from Laws 2001, First Special Session 
 99.17  chapter 9, article 17, section 2, 
 99.18  subdivision 9, is eliminated for fiscal 
 99.19  year 2003.  Base funding for the 
 99.20  2004-2005 biennium shall be $550,000 
 99.21  each year.  Notwithstanding Laws 2001, 
 99.22  First Special Session chapter 9, 
 99.23  article 17, section 2, subdivision 9, 
 99.24  beginning in fiscal year 2004, the 
 99.25  commissioner shall annually distribute 
 99.26  $5,000 to each county.  Counties with 
 99.27  more than 10,000 persons over age 65 
 99.28  shall receive a distribution of an 
 99.29  additional 25 cents for each person 
 99.30  over age 65.  The amount distributed to 
 99.31  each area agency on aging shall be 
 99.32  $2,500. 
 99.33  [COMMUNITY SERVICES DEVELOPMENT 
 99.34  GRANTS.] For fiscal year 2003, base 
 99.35  level funding for community services 
 99.36  development grants under Minnesota 
 99.37  Statutes, section 256.9754, is reduced 
 99.38  by $1,478,000.  For fiscal year 2004, 
 99.39  base level funding for these grants is 
 99.40  reduced by $768,000.  For fiscal year 
 99.41  2005, base level funding shall be 
 99.42  $3,000,000, and this amount shall be 
 99.43  the base funding level for these grants 
 99.44  for the biennium beginning July 1, 
 99.45  2005.  Notwithstanding section 5, this 
 99.46  provision shall not expire. 
 99.47  (b) Medical Assistance
 99.48  Long-Term Care Waivers and
 99.49  Home Care Grants
 99.50  General              18,471,000    12,833,000
 99.51  (c) Medical Assistance
 99.52  Long-Term Care Facilities
 99.53  Grants
 99.54  General             (27,382,000)  (31,922,000)
 99.55  (d) Group Residential
 99.56  Housing Grants
100.1   General                   4,000       574,000
100.2   [FEDERAL FUNDING FOR GROUP RESIDENTIAL 
100.3   HOUSING COSTS.] The commissioner shall 
100.4   seek federal funding to offset costs 
100.5   for group residential housing services 
100.6   under Minnesota Statutes, chapter 256I. 
100.7   Any federal funding received shall be 
100.8   distributed to counties on a pro rata 
100.9   basis according to county spending 
100.10  under Minnesota Statutes, section 
100.11  256B.19, subdivision 1, clause (3), for 
100.12  the costs of nursing facility 
100.13  placements of persons with disabilities 
100.14  under the age of 65 that have exceeded 
100.15  90 days.  The commissioner shall report 
100.16  to the legislature by January 15, 2003, 
100.17  on the status of additional federal 
100.18  funding for group residential housing 
100.19  costs. 
100.20  (e) Chemical Dependency 
100.21  Entitlement Grants
100.22  General                  -0-          (84,000)
100.23  [CONSOLIDATED CHEMICAL DEPENDENCY 
100.24  TREATMENT FUND RESERVE TRANSFER.] In 
100.25  fiscal year 2003, $8,544,000 of funds 
100.26  available in the consolidated chemical 
100.27  dependency treatment fund general 
100.28  reserve account is transferred to the 
100.29  general fund. 
100.30  (f) Community Social Services
100.31  Block Grants
100.32  General                  -0-       (4,990,000)
100.33  [CSSA TRADITIONAL APPROPRIATION 
100.34  REDUCTION.] For fiscal year 2003, base 
100.35  level funding for community social 
100.36  service aids under Minnesota Statutes, 
100.37  section 256E.06, subdivisions 1 and 2, 
100.38  is reduced by $4,700,000.  This 
100.39  reduction shall become part of base 
100.40  level funding for the biennium 
100.41  beginning July 1, 2003.  
100.42  Notwithstanding section 5, this 
100.43  provision shall not expire. 
100.44  [CSSA GRANTS FOR FORMER GRH 
100.45  RECIPIENTS.] For fiscal year 2003, base 
100.46  level funding for community social 
100.47  service aids under Minnesota Statutes, 
100.48  section 256E.06, subdivision 2b, is 
100.49  reduced by $290,000.  This reduction 
100.50  shall become part of base level funding 
100.51  for the biennium beginning July 1, 
100.52  2003.  These reductions shall be made 
100.53  on a pro rata basis to each affected 
100.54  county.  Notwithstanding section 5, 
100.55  this provision shall not expire. 
100.56     Sec. 16.  [ACCESS TO AFFORDABLE HOUSING.] 
100.57     The commissioners of human services and the Minnesota 
100.58  housing finance agency shall make recommendations to the 
101.1   long-term care task force by January 15, 2003, on ways to 
101.2   increase the ability of persons with disabilities to access 
101.3   affordable housing.  The recommendations shall include: 
101.4      (1) income supplement or housing subsidy options that 
101.5   support efforts to relocate persons under the age of 65 from 
101.6   nursing facilities or to divert them from a nursing facility 
101.7   placement; 
101.8      (2) an analysis of the impacts of the state using a fixed 
101.9   amount attributable to room and board costs for home and 
101.10  community-based waiver recipients in group residential settings; 
101.11     (3) options to maximize federal funding that result in no 
101.12  additional costs to the state.  These options may include the 
101.13  transfer of state funds between income maintenance programs and 
101.14  the Medicaid program.  These options may be implemented prior to 
101.15  the report to the task force.  Any additional funds made 
101.16  available through implementation of these options and not 
101.17  utilized to support persons relocating from nursing facilities 
101.18  shall be used to reduce the county share enacted in Laws 2002, 
101.19  chapter 220, article 14, section 8; and 
101.20     (4) alternatives that provide additional incentives to 
101.21  county agencies that successfully discharge persons with 
101.22  disabilities under the age of 65 from nursing facilities. 
101.23     Sec. 17.  [PRIOR AUTHORIZATION REPORT.] 
101.24     The commissioner of human services shall review prior 
101.25  authorization of prescription drugs in the fee-for-service 
101.26  medical assistance program in terms of the cost effectiveness 
101.27  achieved through prior authorization on prescription drug costs 
101.28  and on other medical assistance costs and evaluate the effect 
101.29  that placing a drug on prior authorization has had on the 
101.30  quality of patient care.  The commissioner shall submit the 
101.31  results to the chairs and ranking minority members of the senate 
101.32  and house of representatives committees having jurisdiction over 
101.33  human services funding by January 15, 2004. 
101.34                             ARTICLE 14
101.35                             INCOME TAX
101.36     Section 1.  Minnesota Statutes 2000, section 60D.20, 
102.1   subdivision 2, is amended to read: 
102.2      Subd. 2.  [DIVIDENDS AND OTHER DISTRIBUTIONS.] (a) Subject 
102.3   to the limitations and requirements of this subdivision, the 
102.4   board of directors of any domestic insurer within an insurance 
102.5   holding company system may authorize and cause the insurer to 
102.6   declare and pay any dividend or distribution to its shareholders 
102.7   as the directors deem prudent from the earned surplus of the 
102.8   insurer.  An insurer's earned surplus, also known as unassigned 
102.9   funds, shall be determined in accordance with the accounting 
102.10  procedures and practices governing preparation of its annual 
102.11  statement.  Dividends which are paid from sources other than an 
102.12  insurer's earned surplus as of the end of the immediately 
102.13  preceding quarter for which the insurer has filed a quarterly or 
102.14  annual statement as appropriate, or are extraordinary dividends 
102.15  or distributions may be paid only as provided in paragraphs (d), 
102.16  (e), and (f). 
102.17     (b) The insurer shall notify the commissioner within five 
102.18  business days following declaration of a dividend declared 
102.19  pursuant to paragraph (a) and at least ten days prior to its 
102.20  payment.  The commissioner shall promptly consider the 
102.21  notification filed pursuant to this paragraph, taking into 
102.22  consideration the factors described in subdivision 4. 
102.23     (c) The commissioner shall review at least annually the 
102.24  dividends paid by an insurer pursuant to paragraph (a) for the 
102.25  purpose of determining if the dividends are reasonable based 
102.26  upon (1) the adequacy of the level of surplus as regards 
102.27  policyholders remaining after the dividend payments, and (2) the 
102.28  quality of the insurer's earnings and extent to which the 
102.29  reported earnings include extraordinary items, such as surplus 
102.30  relief reinsurance transactions and reserve destrengthening. 
102.31     (d) No domestic insurer shall pay any extraordinary 
102.32  dividend or make any other extraordinary distribution to its 
102.33  shareholders until:  (1) 30 days after the commissioner has 
102.34  received notice of the declaration of it and has not within the 
102.35  period disapproved the payment; or (2) the commissioner has 
102.36  approved the payment within the 30-day period. 
103.1      (e) For purposes of this section, an extraordinary dividend 
103.2   or distribution includes any dividend or distribution of cash or 
103.3   other property, whose fair market value together with that of 
103.4   other dividends or distributions made within the preceding 12 
103.5   months exceeds the greater of (1) ten percent of the insurer's 
103.6   surplus as regards policyholders on December 31 of the preceding 
103.7   year; or (2) the net gain from operations of the insurer, if the 
103.8   insurer is a life insurer, or the net income, if the insurer is 
103.9   not a life insurer, not including realized capital gains, for 
103.10  the 12-month period ending on December 31 of the preceding year, 
103.11  but does not include pro rata distributions of any class of the 
103.12  insurer's own securities.  
103.13     (f) Notwithstanding any other provision of law, an insurer 
103.14  may declare an extraordinary dividend or distribution that is 
103.15  conditional upon the commissioner's approval, and the 
103.16  declaration shall confer no rights upon shareholders until:  (1) 
103.17  the commissioner has approved the payment of such a dividend or 
103.18  distribution; or (2) the commissioner has not disapproved the 
103.19  payment within the 30-day period referred to above. 
103.20     (g) For purposes of state law, dividends paid to an 
103.21  insurer's parent company from an insurer which is a member of an 
103.22  insurance holding company system are not considered income to 
103.23  the parent company. 
103.24     <h>[EFFECTIVE DATE.]</h> This section is effective for dividends 
103.25  paid after December 31, 2000. 
103.26     Sec. 2.  Minnesota Statutes 2000, section 136A.08, 
103.27  subdivision 3, is amended to read: 
103.28     Subd. 3.  [WISCONSIN.] A higher education reciprocity 
103.29  agreement with the state of Wisconsin may include provision for 
103.30  the transfer of funds between Minnesota and Wisconsin provided 
103.31  that an income tax reciprocity agreement between Minnesota and 
103.32  Wisconsin is in effect for the period of time included under the 
103.33  higher education reciprocity agreement.  If this provision is 
103.34  included, the amount of funds to be transferred shall be 
103.35  determined according to a formula which is mutually acceptable 
103.36  to the office and a duly designated agency representing 
104.1   Wisconsin.  The formula shall recognize differences in tuition 
104.2   rates between the two states and the number of students 
104.3   attending institutions in each state under the agreement.  Any 
104.4   payments to Minnesota by Wisconsin shall be deposited by the 
104.5   office in the general fund of the state treasury.  The amount 
104.6   required for the payments shall be certified by the director of 
104.7   the office to the commissioner of finance annually. 
104.8      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
104.9   following final enactment. 
104.10     Sec. 3.  Minnesota Statutes 2000, section 290.081, is 
104.11  amended to read: 
104.12     290.081 [INCOME OF NONRESIDENTS, RECIPROCITY.] 
104.13     (a) The compensation received for the performance of 
104.14  personal or professional services within this state by an 
104.15  individual whose residence, place of abode, and place 
104.16  customarily returned to at least once a month is in another 
104.17  state, shall be excluded from gross income to the extent such 
104.18  compensation is subject to an income tax imposed by the state of 
104.19  residence; provided that such state allows a similar exclusion 
104.20  of compensation received by residents of Minnesota for services 
104.21  performed therein. 
104.22     (b) When it is deemed to be in the best interests of the 
104.23  people of this state, the commissioner may determine that the 
104.24  provisions of clause paragraph (a) shall not apply.  As long as 
104.25  the provisions of clause (a) apply between Minnesota and 
104.26  Wisconsin, the provisions of clause (a) shall apply to any 
104.27  individual who is domiciled in Wisconsin.  
104.28     (c) For the purposes of clause (a), whenever the Wisconsin 
104.29  tax on Minnesota residents which would have been paid Wisconsin 
104.30  without clause (a) exceeds the Minnesota tax on Wisconsin 
104.31  residents which would have been paid Minnesota without clause 
104.32  (a), or vice versa, then the state with the net revenue loss 
104.33  resulting from clause (a) shall receive from the other state the 
104.34  amount of such loss.  This provision shall be effective for all 
104.35  years beginning after December 31, 1972.  The data used for 
104.36  computing the loss to either state shall be determined on or 
105.1   before September 30 of the year following the close of the 
105.2   previous calendar year. 
105.3      Interest shall be payable on all delinquent balances 
105.4   relating to taxable years beginning after December 31, 1977.  
105.5   The commissioner of revenue is authorized to enter into 
105.6   agreements with the state of Wisconsin specifying the 
105.7   reciprocity payment due date, conditions constituting 
105.8   delinquency, interest rates, and a method for computing interest 
105.9   due on any delinquent amounts. 
105.10     If an agreement cannot be reached as to the amount of the 
105.11  loss, the commissioner of revenue and the taxing official of the 
105.12  state of Wisconsin shall each appoint a member of a board of 
105.13  arbitration and these members shall appoint the third member of 
105.14  the board.  The board shall select one of its members as chair.  
105.15  Such board may administer oaths, take testimony, subpoena 
105.16  witnesses, and require their attendance, require the production 
105.17  of books, papers and documents, and hold hearings at such places 
105.18  as are deemed necessary.  The board shall then make a 
105.19  determination as to the amount to be paid the other state which 
105.20  determination shall be final and conclusive. 
105.21     The commissioner may furnish copies of returns, reports, or 
105.22  other information to the taxing official of the state of 
105.23  Wisconsin, a member of the board of arbitration, or a consultant 
105.24  under joint contract with the states of Minnesota and Wisconsin 
105.25  for the purpose of making a determination as to the amount to be 
105.26  paid the other state under the provisions of this section.  
105.27  Prior to the release of any information under the provisions of 
105.28  this section, the person to whom the information is to be 
105.29  released shall sign an agreement which provides that the person 
105.30  will protect the confidentiality of the returns and information 
105.31  revealed thereby to the extent that it is protected under the 
105.32  laws of the state of Minnesota. 
105.33     <h>[EFFECTIVE DATE.]</h> This section is effective for tax years 
105.34  beginning after December 31, 2002. 
105.35     Sec. 4.  Minnesota Statutes 2001 Supplement, section 
105.36  290.0921, subdivision 2, is amended to read: 
106.1      Subd. 2.  [DEFINITIONS.] (a) For purposes of this section, 
106.2   the following terms have the meanings given them. 
106.3      (b) "Alternative minimum taxable net income" is alternative 
106.4   minimum taxable income, 
106.5      (1) less the exemption amount, and 
106.6      (2) apportioned or allocated to Minnesota under section 
106.7   290.17, 290.191, or 290.20. 
106.8      (c) The "exemption amount" is $40,000, reduced, but not 
106.9   below zero, by 25 percent of the excess of alternative minimum 
106.10  taxable income over $150,000. 
106.11     (d) "Minnesota alternative minimum taxable income" is 
106.12  alternative minimum taxable net income, less the deductions for 
106.13  alternative tax net operating loss under subdivision 4; 
106.14  charitable contributions under subdivision 5; and dividends 
106.15  received under subdivision 6.  The sum of the deductions under 
106.16  this paragraph may not exceed 90 percent of alternative minimum 
106.17  taxable net income.  This limitation does not apply to: 
106.18     (1) a deduction for dividends paid to or received from a 
106.19  corporation which is subject to tax under section 290.36 and 
106.20  which is a member of an affiliated group of corporations as 
106.21  defined by the Internal Revenue Code; or 
106.22     (2) a deduction for dividends paid to or received from a 
106.23  corporation which is subject to tax under section 297I.05 and 
106.24  which is a member of an affiliated group of corporations as 
106.25  defined by the Internal Revenue Code and either:  (i) the 
106.26  dividend is eliminated in consolidation under Treasury 
106.27  Regulation 1.1502-14(a), as amended through December 31, 1989; 
106.28  or (ii) the dividend is deducted under an election under section 
106.29  243(b) of the Internal Revenue Code. 
106.30  The deduction under this clause is limited to the amount of 
106.31  distributions of the recipient corporation to another member of 
106.32  the affiliated group of corporations subject to tax under 
106.33  section 297I.05 in the same taxable year. 
106.34     <h>[EFFECTIVE DATE.]</h> This section is effective for tax years 
106.35  beginning after December 31, 2000. 
106.36     Sec. 5.  Minnesota Statutes 2001 Supplement, section 
107.1   290.0921, subdivision 6, is amended to read: 
107.2      Subd. 6.  [DIVIDENDS RECEIVED.] (a) A deduction is allowed 
107.3   from alternative minimum taxable net income equal to the 
107.4   deduction for dividends received under section 290.21, 
107.5   subdivision 4, for purposes of calculating taxable income under 
107.6   section 290.01, subdivision 29. 
107.7      (b) The amount of the deduction must not exceed 90 percent 
107.8   of alternative minimum taxable net income. 
107.9      This limitation does not apply to: 
107.10     (1) dividends paid to or received from a corporation which 
107.11  is subject to tax under section 290.36 and which is a member of 
107.12  an affiliated group of corporations as defined by the Internal 
107.13  Revenue Code; or 
107.14     (2) dividends paid to or received from a corporation which 
107.15  is subject to tax under section 297I.05 and which is a member of 
107.16  an affiliated group of corporations as defined by the Internal 
107.17  Revenue Code and either:  (i) the dividend is eliminated in 
107.18  consolidation under Treasury Regulation 1.1502-14(a), as amended 
107.19  through December 31, 1989; or (ii) the dividend is deducted 
107.20  under an election under section 243(b) of the Internal Revenue 
107.21  Code.  
107.22  The deduction under this clause is limited to the amount of 
107.23  distributions of the recipient corporation to another member of 
107.24  the affiliated group of corporations subject to tax under 
107.25  section 297I.05 in the same taxable year. 
107.26     <h>[EFFECTIVE DATE.]</h> This section is effective for tax years 
107.27  beginning after December 31, 2000. 
107.28     Sec. 6.  Minnesota Statutes 2000, section 290.0922, 
107.29  subdivision 1, is amended to read: 
107.30     Subdivision 1.  [IMPOSITION.] (a) In addition to the tax 
107.31  imposed by this chapter without regard to this section, the 
107.32  franchise tax imposed on a corporation required to file under 
107.33  section 289A.08, subdivision 3, other than a corporation treated 
107.34  as an "S" corporation under section 290.9725 for the taxable 
107.35  year includes a tax equal to the following amounts: 
107.36       If the sum of the corporation's
108.1   Minnesota property, payrolls, and sales
108.2   or receipts is:                            the tax equals:
108.3              less than $500,000                    $0 $50
108.4      $   500,000 to $   999,999                  $100 $150
108.5      $ 1,000,000 to $ 4,999,999                  $300 $450
108.6      $ 5,000,000 to $ 9,999,999                $1,000 $1,500 
108.7      $10,000,000 to $19,999,999                $2,000 $3,000
108.8      $20,000,000 or more                       $5,000 $7,500
108.9      (b) A tax is imposed for each taxable year on a corporation 
108.10  required to file a return under section 289A.12, subdivision 3, 
108.11  that is treated as an "S" corporation under section 290.9725 and 
108.12  on a partnership required to file a return under section 
108.13  289A.12, subdivision 3, other than a partnership that derives 
108.14  over 80 percent of its income from farming.  The tax imposed 
108.15  under this paragraph is due on or before the due date of the 
108.16  return for the taxpayer due under section 289A.18, subdivision 
108.17  1.  The commissioner shall prescribe the return to be used for 
108.18  payment of this tax.  The tax under this paragraph is equal to 
108.19  the following amounts:  
108.20       If the sum of the S corporation's or partnership's 
108.21  Minnesota property, payrolls, and sales
108.22  or receipts is:                        the tax equals:
108.23               less than $500,000                $0 $50
108.24       $   500,000 to $   999,999              $100 $150
108.25       $ 1,000,000 to $ 4,999,999              $300 $450
108.26       $ 5,000,000 to $ 9,999,999            $1,000 $1,500
108.27       $10,000,000 to $19,999,999            $2,000 $3,000
108.28       $20,000,000 or more                   $5,000 $7,500
108.29     <h>[EFFECTIVE DATE.]</h> This section is effective for tax years 
108.30  beginning after December 31, 2001. 
108.31     Sec. 7.  Minnesota Statutes 2000, section 290.17, 
108.32  subdivision 2, is amended to read: 
108.33     Subd. 2.  [INCOME NOT DERIVED FROM CONDUCT OF A TRADE OR 
108.34  BUSINESS.] The income of a taxpayer subject to the allocation 
108.35  rules that is not derived from the conduct of a trade or 
108.36  business must be assigned in accordance with paragraphs (a) to 
109.1   (f):  
109.2      (a)(1) Subject to paragraphs (a)(2), and (a)(3), and 
109.3   (a)(4), income from wages as defined in section 3401(a) and (f) 
109.4   of the Internal Revenue Code is assigned to this state if, and 
109.5   to the extent that, the work of the employee is performed within 
109.6   it; all other income from such sources is treated as income from 
109.7   sources without this state.  
109.8      Severance pay shall be considered income from labor or 
109.9   personal or professional services. 
109.10     (2) In the case of an individual who is a nonresident of 
109.11  Minnesota and who is an athlete or entertainer, income from 
109.12  compensation for labor or personal services performed within 
109.13  this state shall be determined in the following manner:  
109.14     (i) The amount of income to be assigned to Minnesota for an 
109.15  individual who is a nonresident salaried athletic team employee 
109.16  shall be determined by using a fraction in which the denominator 
109.17  contains the total number of days in which the individual is 
109.18  under a duty to perform for the employer, and the numerator is 
109.19  the total number of those days spent in Minnesota.  For purposes 
109.20  of this paragraph, off-season training activities, unless 
109.21  conducted at the team's facilities as part of a team imposed 
109.22  program, are not included in the total number of duty days.  
109.23  Bonuses earned as a result of play during the regular season or 
109.24  for participation in championship, play-off, or all-star games 
109.25  must be allocated under the formula.  Signing bonuses are not 
109.26  subject to allocation under the formula if they are not 
109.27  conditional on playing any games for the team, are payable 
109.28  separately from any other compensation, and are nonrefundable; 
109.29  and 
109.30     (ii) The amount of income to be assigned to Minnesota for 
109.31  an individual who is a nonresident, and who is an athlete or 
109.32  entertainer not listed in clause (i), for that person's athletic 
109.33  or entertainment performance in Minnesota shall be determined by 
109.34  assigning to this state all income from performances or athletic 
109.35  contests in this state.  
109.36     (3) For purposes of this section, amounts received by a 
110.1   nonresident as "retirement income" as defined in section (b)(1) 
110.2   of the State Income Taxation of Pension Income Act, Public Law 
110.3   Number 104-95, are not considered income derived from carrying 
110.4   on a trade or business or from wages or other compensation for 
110.5   work an employee performed in Minnesota, and are not taxable 
110.6   under this chapter.  
110.7      (4) Wages, otherwise assigned to this state under clause 
110.8   (1) and not qualifying under clause (3), are not taxable under 
110.9   this chapter if the following conditions are met: 
110.10     (i) the recipient was not a resident of this state for any 
110.11  part of the taxable year in which the wages were received; and 
110.12     (ii) the wages are for work performed while the recipient 
110.13  was a resident of this state. 
110.14     (b) Income or gains from tangible property located in this 
110.15  state that is not employed in the business of the recipient of 
110.16  the income or gains must be assigned to this state. 
110.17     (c) Income or gains from intangible personal property not 
110.18  employed in the business of the recipient of the income or gains 
110.19  must be assigned to this state if the recipient of the income or 
110.20  gains is a resident of this state or is a resident trust or 
110.21  estate.  
110.22     Gain on the sale of a partnership interest is allocable to 
110.23  this state in the ratio of the original cost of partnership 
110.24  tangible property in this state to the original cost of 
110.25  partnership tangible property everywhere, determined at the time 
110.26  of the sale.  If more than 50 percent of the value of the 
110.27  partnership's assets consists of intangibles, gain or loss from 
110.28  the sale of the partnership interest is allocated to this state 
110.29  in accordance with the sales factor of the partnership for its 
110.30  first full tax period immediately preceding the tax period of 
110.31  the partnership during which the partnership interest was sold. 
110.32     Gain on the sale of goodwill or income from a covenant not 
110.33  to compete that is connected with a business operating all or 
110.34  partially in Minnesota is allocated to this state to the extent 
110.35  that the income from the business in the year preceding the year 
110.36  of sale was assignable to Minnesota under subdivision 3.  
111.1      When an employer pays an employee for a covenant not to 
111.2   compete, the income allocated to this state is in the ratio of 
111.3   the employee's service in Minnesota in the calendar year 
111.4   preceding leaving the employment of the employer over the total 
111.5   services performed by the employee for the employer in that year.
111.6      (d) Income from winnings on Minnesota pari-mutuel betting 
111.7   tickets, the Minnesota state lottery, and lawful gambling as 
111.8   defined in section 349.12, subdivision 24, conducted within the 
111.9   boundaries of the state of Minnesota shall be assigned to this 
111.10  state.  
111.11     (e) All items of gross income not covered in paragraphs (a) 
111.12  to (d) and not part of the taxpayer's income from a trade or 
111.13  business shall be assigned to the taxpayer's domicile. 
111.14     (f) For the purposes of this section, working as an 
111.15  employee shall not be considered to be conducting a trade or 
111.16  business. 
111.17     <h>[EFFECTIVE DATE.]</h> This section is effective for wages 
111.18  received in tax years beginning after December 31, 2001. 
111.19     Sec. 8.  Minnesota Statutes 2000, section 290.191, 
111.20  subdivision 4, is amended to read: 
111.21     Subd. 4.  [APPORTIONMENT FORMULA FOR CERTAIN MAIL ORDER 
111.22  BUSINESSES.] If the business of a corporation, partnership, or 
111.23  proprietorship consists exclusively of the selling of tangible 
111.24  personal property and services at retail, as defined in section 
111.25  297A.61, subdivision 4, in response to orders received by United 
111.26  States mail, telephone, facsimile, or other electronic media, 
111.27  and 99 percent of the taxpayer's property and payroll is within 
111.28  Minnesota, then the taxpayer may apportion net income to 
111.29  Minnesota based solely upon the percentage that the sales made 
111.30  within this state in connection with its trade or business 
111.31  during the tax period are of the total sales wherever made in 
111.32  connection with the trade or business during the tax period.  
111.33  Property and payroll factors are disregarded.  In determining 
111.34  eligibility for this subdivision:  
111.35     (1) the sale not in the ordinary course of business of 
111.36  tangible or intangible assets used in conducting business 
112.1   activities must be disregarded; and 
112.2      (2) property and payroll at a distribution center outside 
112.3   of Minnesota are disregarded if the sole activity at the 
112.4   distribution center is the filling of orders, and no 
112.5   solicitation of orders occurs at the distribution center. 
112.6      <h>[EFFECTIVE DATE.]</h> This section is effective for tax years 
112.7   beginning after December 31, 2001. 
112.8      Sec. 9.  Minnesota Statutes 2001 Supplement, section 
112.9   290.21, subdivision 4, is amended to read: 
112.10     Subd. 4.  (a)(1) Eighty percent of dividends received by a 
112.11  corporation during the taxable year from another corporation, in 
112.12  which the recipient owns 20 percent or more of the stock, by 
112.13  vote and value, not including stock described in section 
112.14  1504(a)(4) of the Internal Revenue Code when the corporate stock 
112.15  with respect to which dividends are paid does not constitute the 
112.16  stock in trade of the taxpayer or would not be included in the 
112.17  inventory of the taxpayer, or does not constitute property held 
112.18  by the taxpayer primarily for sale to customers in the ordinary 
112.19  course of the taxpayer's trade or business, or when the trade or 
112.20  business of the taxpayer does not consist principally of the 
112.21  holding of the stocks and the collection of the income and gains 
112.22  therefrom; and 
112.23     (2)(i) the remaining 20 percent of dividends if the 
112.24  dividends received are the stock in an affiliated company 
112.25  transferred in an overall plan of reorganization and the 
112.26  dividend is eliminated in consolidation under Treasury 
112.27  Department Regulation 1.1502-14(a), as amended through December 
112.28  31, 1989; or 
112.29     (ii) the remaining 20 percent of dividends if the dividends 
112.30  are received from a corporation which is subject to tax under 
112.31  section 290.36 and which is a member of an affiliated group of 
112.32  corporations as defined by the Internal Revenue Code and the 
112.33  dividend is eliminated in consolidation under Treasury 
112.34  Department Regulation 1.1502-14(a), as amended through December 
112.35  31, 1989, or is deducted under an election under section 243(b) 
112.36  of the Internal Revenue Code; or 
113.1      (iii) the remaining 20 percent of the dividends if the 
113.2   dividends are received from a corporation which is subject to 
113.3   tax under section 297I.05 and which is a member of an affiliated 
113.4   group of corporations as defined by the Internal Revenue Code 
113.5   and either:  (A) the dividend is eliminated in consolidation 
113.6   under Treasury Regulation 1.1502-14(a), as amended through 
113.7   December 31, 1989; or (B) the dividend is deducted under an 
113.8   election under section 243(b) of the Internal Revenue Code. 
113.9   The deduction under this item is limited to the amount of 
113.10  distributions of the recipient corporation to another member of 
113.11  the affiliated group of corporations subject to tax under 
113.12  section 297I.05 in the same taxable year. 
113.13     (b) Seventy percent of dividends received by a corporation 
113.14  during the taxable year from another corporation in which the 
113.15  recipient owns less than 20 percent of the stock, by vote or 
113.16  value, not including stock described in section 1504(a)(4) of 
113.17  the Internal Revenue Code when the corporate stock with respect 
113.18  to which dividends are paid does not constitute the stock in 
113.19  trade of the taxpayer, or does not constitute property held by 
113.20  the taxpayer primarily for sale to customers in the ordinary 
113.21  course of the taxpayer's trade or business, or when the trade or 
113.22  business of the taxpayer does not consist principally of the 
113.23  holding of the stocks and the collection of income and gain 
113.24  therefrom.  
113.25     (c) The dividend deduction provided in this subdivision 
113.26  shall be allowed only with respect to dividends that are 
113.27  included in a corporation's Minnesota taxable net income for the 
113.28  taxable year. 
113.29     The dividend deduction provided in this subdivision does 
113.30  not apply to a dividend from a corporation which, for the 
113.31  taxable year of the corporation in which the distribution is 
113.32  made or for the next preceding taxable year of the corporation, 
113.33  is a corporation exempt from tax under section 501 of the 
113.34  Internal Revenue Code. 
113.35     The dividend deduction provided in this subdivision applies 
113.36  to the amount of regulated investment company dividends only to 
114.1   the extent determined under section 854(b) of the Internal 
114.2   Revenue Code. 
114.3      The dividend deduction provided in this subdivision shall 
114.4   not be allowed with respect to any dividend for which a 
114.5   deduction is not allowed under the provisions of section 246(c) 
114.6   of the Internal Revenue Code. 
114.7      (d) If dividends received by a corporation that does not 
114.8   have nexus with Minnesota under the provisions of Public Law 
114.9   Number 86-272 are included as income on the return of an 
114.10  affiliated corporation permitted or required to file a combined 
114.11  report under section 290.34, subdivision 2, then for purposes of 
114.12  this subdivision the determination as to whether the trade or 
114.13  business of the corporation consists principally of the holding 
114.14  of stocks and the collection of income and gains therefrom shall 
114.15  be made with reference to the trade or business of the 
114.16  affiliated corporation having a nexus with Minnesota. 
114.17     (e) The deduction provided by this subdivision does not 
114.18  apply if the dividends are paid by a FSC as defined in section 
114.19  922 of the Internal Revenue Code. 
114.20     (f) If one or more of the members of the unitary group 
114.21  whose income is included on the combined report received a 
114.22  dividend, the deduction under this subdivision for each member 
114.23  of the unitary business required to file a return under this 
114.24  chapter is the product of:  (1) 100 percent of the dividends 
114.25  received by members of the group; (2) the percentage allowed 
114.26  pursuant to paragraph (a) or (b); and (3) the percentage of the 
114.27  taxpayer's business income apportionable to this state for the 
114.28  taxable year under section 290.191 or 290.20. 
114.29     <h>[EFFECTIVE DATE.]</h> This section is effective for tax years 
114.30  beginning after December 31, 2000. 
114.31                             ARTICLE 15
114.32                             SALES TAX
114.33     Section 1.  Minnesota Statutes 2000, section 270.60, 
114.34  subdivision 4, is amended to read: 
114.35     Subd. 4.  [PAYMENTS TO COUNTIES.] (a) The commissioner 
114.36  shall pay to a county in which an Indian gaming casino is 
115.1   located ten percent of the state share of all taxes generated 
115.2   from activities on reservations and collected under a tax 
115.3   agreement under this section with the tribal government for the 
115.4   reservation located in the county.  If the tribe has casinos 
115.5   located in more than one county, the payment must be divided 
115.6   equally among the counties in which the casinos are located. 
115.7      (b) A county is a qualified county under this subdivision 
115.8   if one of the following conditions is met: 
115.9      (1) the county's per capita income is less than 80 percent 
115.10  of the state per capita personal income, based on the most 
115.11  recent estimates made by the United States Bureau of Economic 
115.12  Analysis; or 
115.13     (2) 30 percent or more of the total market value of real 
115.14  property in the county is exempt from ad valorem taxation. 
115.15     (c) The commissioner shall make the payments required under 
115.16  this subdivision by February 28 of the year following the year 
115.17  the taxes are collected. 
115.18     (d) (c) An amount sufficient to make the payments 
115.19  authorized by this subdivision, not to exceed $1,100,000 in any 
115.20  fiscal year, is annually appropriated from the general fund to 
115.21  the commissioner.  If the authorized payments exceed the amount 
115.22  of the appropriation, the commissioner shall first 
115.23  proportionately reduce the payments to counties other than 
115.24  qualified counties so that the total amount equals the 
115.25  appropriation.  If the authorized payments to qualified counties 
115.26  also exceed the amount of the appropriation, the commissioner 
115.27  shall then proportionately reduce the rate so that the total 
115.28  amount to be paid to qualified counties equals the appropriation.
115.29     <h>[EFFECTIVE DATE.]</h> This section is effective for payments 
115.30  made after December 31, 2002. 
115.31     Sec. 2.  Minnesota Statutes 2001 Supplement, section 
115.32  289A.20, subdivision 4, is amended to read: 
115.33     Subd. 4.  [SALES AND USE TAX.] (a) The taxes imposed by 
115.34  chapter 297A are due and payable to the commissioner monthly on 
115.35  or before the 20th day of the month following the month in which 
115.36  the taxable event occurred, or following another reporting 
116.1   period as the commissioner prescribes or as allowed under 
116.2   section 289A.18, subdivision 4, paragraph (f), except that use 
116.3   taxes due on an annual use tax return as provided under section 
116.4   289A.11, subdivision 1, are payable by April 15 following the 
116.5   close of the calendar year. 
116.6      (b) For a fiscal year ending before July 1, 2002 2006, a 
116.7   vendor having a liability of $120,000 or more during a fiscal 
116.8   year ending June 30 must remit the June liability for the next 
116.9   year in the following manner: 
116.10     (1) Two business days before June 30 of the year, the 
116.11  vendor must remit 62 percent of the estimated June liability to 
116.12  the commissioner.  
116.13     (2) On or before August 20 of the year, the vendor must pay 
116.14  any additional amount of tax not remitted in June. 
116.15     (c) A vendor having a liability of $120,000 or more during 
116.16  a fiscal year ending June 30 must remit all liabilities on 
116.17  returns due for periods beginning in the subsequent calendar 
116.18  year by electronic means on or before the 20th day of the month 
116.19  following the month in which the taxable event occurred, or on 
116.20  or before the 20th day of the month following the month in which 
116.21  the sale is reported under section 289A.18, subdivision 4, 
116.22  except for 62 percent of the estimated June liability, which is 
116.23  due two business days before June 30.  The remaining amount of 
116.24  the June liability is due on August 20.  
116.25     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
116.26  following final enactment. 
116.27     Sec. 3.  Minnesota Statutes 2001 Supplement, section 
116.28  297A.61, subdivision 3, is amended to read: 
116.29     Subd. 3.  [SALE AND PURCHASE.] (a) "Sale" and "purchase" 
116.30  include, but are not limited to, each of the transactions listed 
116.31  in this subdivision. 
116.32     (b) Sale and purchase include: 
116.33     (1) any transfer of title or possession, or both, of 
116.34  tangible personal property, whether absolutely or conditionally, 
116.35  for a consideration in money or by exchange or barter; and 
116.36     (2) the leasing of or the granting of a license to use or 
117.1   consume, for a consideration in money or by exchange or barter, 
117.2   tangible personal property, other than a manufactured home used 
117.3   for residential purposes for a continuous period of 30 days or 
117.4   more. 
117.5      (c) Sale and purchase include the production, fabrication, 
117.6   printing, or processing of tangible personal property for a 
117.7   consideration for consumers who furnish either directly or 
117.8   indirectly the materials used in the production, fabrication, 
117.9   printing, or processing. 
117.10     (d) Sale and purchase include the furnishing, preparing, or 
117.11  serving for a consideration of food or drinks.  Notwithstanding 
117.12  section 297A.67, subdivision 2, taxable food includes or drinks 
117.13  include, but is are not limited to, the following: 
117.14     (1) prepared food sold by the retailer food or drinks sold 
117.15  by the retailer for immediate consumption on the retailer's 
117.16  premises.  Food and drinks sold within a building or grounds 
117.17  that require an admission charge for entrance are presumed to be 
117.18  sold for consumption on the premises; 
117.19     (2) soft drinks food or drinks prepared by the retailer for 
117.20  immediate consumption either on or off the retailer's premises.  
117.21  For purposes of this subdivision, "food or drinks prepared for 
117.22  immediate consumption" means any food product upon which an act 
117.23  of preparation, including, but not limited to, cooking, mixing, 
117.24  sandwich making, blending, heating, or pouring has been 
117.25  performed by the retailer so the food product may be immediately 
117.26  consumed by the purchaser; 
117.27     (3) candy ice cream, ice milk, frozen yogurt products, or 
117.28  frozen novelties sold in single or individual servings, 
117.29  including, but not limited to, cones, sundaes, and snow 
117.30  cones; and 
117.31     (4) all food sold through vending machines soft drinks and 
117.32  other beverages, including all carbonated and noncarbonated 
117.33  beverages or drinks sold in liquid form, but not including 
117.34  beverages or drinks which contain milk or milk products, 
117.35  beverages or drinks containing 15 or more percent fruit juice, 
117.36  and noncarbonated and noneffervescent bottled water sold in 
118.1   individual containers of one-half gallon or more in size; 
118.2      (5) gum, candy, and candy products; 
118.3      (6) ice; 
118.4      (7) all food sold from vending machines; 
118.5      (8) all food for immediate consumption sold from concession 
118.6   stands and vehicles; 
118.7      (9) party trays; 
118.8      (10) all meals and single servings of packaged snack food 
118.9   sold in restaurants and bars; and 
118.10     (11) bakery products that are: 
118.11     (i) prepared by the retailer for consumption on the 
118.12  retailer's premises; 
118.13     (ii) sold at a place that charges admission; 
118.14     (iii) sold from vending machines; or 
118.15     (iv) sold in single or individual servings from concession 
118.16  stands, vehicles, bars, and restaurants. 
118.17     For purposes of this paragraph, "single or individual 
118.18  servings" does not include products when sold in bulk containers 
118.19  or bulk packaging. 
118.20     For purposes of this paragraph, "premises" means the total 
118.21  space and facilities, including buildings, grounds, and parking 
118.22  lots that are made available or that are available for use by 
118.23  the retailer or customer for the purpose of sale or consumption 
118.24  of prepared food and drinks.  The premises of a caterer is the 
118.25  place where the catered food or drinks are served. 
118.26     (e) A sale and a purchase includes the furnishing for a 
118.27  consideration of electricity, gas, water, or steam for use or 
118.28  consumption within this state. 
118.29     (f) A sale and a purchase includes the transfer for a 
118.30  consideration of computer software.  
118.31     (g) A sale and a purchase includes the furnishing for a 
118.32  consideration of the following services: 
118.33     (1) the privilege of admission to places of amusement, 
118.34  recreational areas, or athletic events, and the making available 
118.35  of amusement devices, tanning facilities, reducing salons, steam 
118.36  baths, turkish baths, health clubs, and spas or athletic 
119.1   facilities; 
119.2      (2) lodging and related services by a hotel, rooming house, 
119.3   resort, campground, motel, or trailer camp and the granting of 
119.4   any similar license to use real property other than the renting 
119.5   or leasing of it for a continuous period of 30 days or more; 
119.6      (3) parking services, whether on a contractual, hourly, or 
119.7   other periodic basis, except for parking at a meter; 
119.8      (4) the granting of membership in a club, association, or 
119.9   other organization if: 
119.10     (i) the club, association, or other organization makes 
119.11  available for the use of its members sports and athletic 
119.12  facilities, without regard to whether a separate charge is 
119.13  assessed for use of the facilities; and 
119.14     (ii) use of the sports and athletic facility is not made 
119.15  available to the general public on the same basis as it is made 
119.16  available to members.  
119.17  Granting of membership means both one-time initiation fees and 
119.18  periodic membership dues, but do not include fees or charges for 
119.19  pen-raised game or poultry by a game farm or hunting preserve.  
119.20  Sports and athletic facilities include golf courses; tennis, 
119.21  racquetball, handball, and squash courts; basketball and 
119.22  volleyball facilities; running tracks; exercise equipment; 
119.23  swimming pools; and other similar athletic or sports facilities; 
119.24  and 
119.25     (5) delivery of aggregate materials and concrete block; and 
119.26     (6) services as provided in this clause: 
119.27     (i) laundry and dry cleaning services including cleaning, 
119.28  pressing, repairing, altering, and storing clothes, linen 
119.29  services and supply, cleaning and blocking hats, and carpet, 
119.30  drapery, upholstery, and industrial cleaning.  Laundry and dry 
119.31  cleaning services do not include services provided by coin 
119.32  operated facilities operated by the customer; 
119.33     (ii) motor vehicle washing, waxing, and cleaning services, 
119.34  including services provided by coin operated facilities operated 
119.35  by the customer, and rustproofing, undercoating, and towing of 
119.36  motor vehicles; 
120.1      (iii) building and residential cleaning, maintenance, and 
120.2   disinfecting and exterminating services; 
120.3      (iv) detective, security, burglar, fire alarm, and armored 
120.4   car services; but not including services performed within the 
120.5   jurisdiction they serve by off-duty licensed peace officers as 
120.6   defined in section 626.84, subdivision 1, or services provided 
120.7   by a nonprofit organization for monitoring and electronic 
120.8   surveillance of persons placed on in-home detention pursuant to 
120.9   court order or under the direction of the Minnesota department 
120.10  of corrections; 
120.11     (v) pet grooming services; 
120.12     (vi) lawn care, fertilizing, mowing, spraying and sprigging 
120.13  services; garden planting and maintenance; tree, bush, and shrub 
120.14  pruning, bracing, spraying, and surgery; indoor plant care; 
120.15  tree, bush, shrub, and stump removal; and tree trimming for 
120.16  public utility lines.  Services performed under a construction 
120.17  contract for the installation of shrubbery, plants, sod, trees, 
120.18  bushes, and similar items are not taxable; 
120.19     (vii) massages, except when provided by a licensed health 
120.20  care facility or professional or upon written referral from a 
120.21  licensed health care facility or professional for treatment of 
120.22  illness, injury, or disease; and 
120.23     (viii) the furnishing of lodging, board, and care services 
120.24  for animals in kennels and other similar arrangements, but 
120.25  excluding veterinary and horse boarding services. 
120.26     In applying the provisions of this chapter, the terms 
120.27  "tangible personal property" and "sales at retail" include 
120.28  taxable services and the provision of taxable services, unless 
120.29  specifically provided otherwise.  Services performed by an 
120.30  employee for an employer are not taxable.  Services performed by 
120.31  a partnership or association for another partnership or 
120.32  association are not taxable if one of the entities owns or 
120.33  controls more than 80 percent of the voting power of the equity 
120.34  interest in the other entity.  Services performed between 
120.35  members of an affiliated group of corporations are not taxable.  
120.36  For purposes of this section, "affiliated group of corporations" 
121.1   includes those entities that would be classified as members of 
121.2   an affiliated group under United States Code, title 26, section 
121.3   1504, and that are eligible to file a consolidated tax return 
121.4   for federal income tax purposes. 
121.5      (h) A sale and a purchase includes the furnishing for a 
121.6   consideration of tangible personal property or taxable services 
121.7   by the United States or any of its agencies or 
121.8   instrumentalities, or the state of Minnesota, its agencies, 
121.9   instrumentalities, or political subdivisions. 
121.10     (i) A sale and a purchase includes the furnishing for a 
121.11  consideration of telecommunications services, including cable 
121.12  television services and direct satellite services.  
121.13  Telecommunications services are taxed to the extent allowed 
121.14  under federal law if those services: 
121.15     (1) either (i) originate and terminate in this state; or 
121.16  (ii) originate in this state and terminate outside the state and 
121.17  the service is charged to a telephone number customer located in 
121.18  this state or to the account of any transmission instrument in 
121.19  this state; or (iii) originate outside this state and terminate 
121.20  in this state and the service is charged to a telephone number 
121.21  customer located in this state or to the account of any 
121.22  transmission instrument in this state; or 
121.23     (2) are rendered by providing a private communications 
121.24  service for which the customer has one or more locations within 
121.25  Minnesota connected to the service and the service is charged to 
121.26  a telephone number customer located in this state or to the 
121.27  account of any transmission instrument in this state. 
121.28     All charges for mobile telecommunications services, as 
121.29  defined in United States Code, title 4, section 124, are deemed 
121.30  to be provided by the customer's home service provider and 
121.31  sourced to the customer's place of primary use and are subject 
121.32  to tax based upon the customer's place of primary use in 
121.33  accordance with the Mobile Telecommunications Sourcing Act, 
121.34  United States Code, title 4, sections 116 to 126.  All other 
121.35  definitions and provisions of the Mobile Telecommunications 
121.36  Sourcing Act as provided in United States Code, title 4, are 
122.1   hereby adopted. 
122.2      (j) A sale and a purchase includes the furnishing for a 
122.3   consideration of installation if the installation charges would 
122.4   be subject to the sales tax if the installation were provided by 
122.5   the seller of the item being installed. 
122.6      <h>[EFFECTIVE DATE.]</h> This section is effective for sales made 
122.7   after June 30, 2002. 
122.8      Sec. 4.  Minnesota Statutes 2001 Supplement, section 
122.9   297A.66, subdivision 1, is amended to read: 
122.10     Subdivision 1.  [DEFINITIONS.] (a) To the extent allowed by 
122.11  the United States Constitution and the laws of the United 
122.12  States, "retailer maintaining a place of business in this 
122.13  state," or a similar term, means a retailer: 
122.14     (1) having or maintaining within this state, directly or by 
122.15  a subsidiary or an affiliate, an office, place of distribution, 
122.16  sales or sample room or place, warehouse, or other place of 
122.17  business; or 
122.18     (2) having a representative, including, but not limited to 
122.19  an affiliate agent, salesperson, canvasser, or solicitor 
122.20  operating in this state under the authority of the retailer or 
122.21  its subsidiary, for any purpose, including the repairing, 
122.22  selling, delivering, installing, or soliciting of orders for the 
122.23  retailer's goods or services, or the leasing of tangible 
122.24  personal property located in this state, whether the place of 
122.25  business or agent, representative, affiliate, salesperson, 
122.26  canvasser, or solicitor is located in the state permanently or 
122.27  temporarily, or whether or not the retailer or, subsidiary, or 
122.28  affiliate is authorized to do business in this state. 
122.29     (b) "Destination of a sale" means the location to which the 
122.30  retailer makes delivery of the property sold, or causes the 
122.31  property to be delivered, to the purchaser of the property, or 
122.32  to the agent or designee of the purchaser.  The delivery may be 
122.33  made by any means, including the United States Postal Service or 
122.34  a for-hire carrier. 
122.35     <h>[EFFECTIVE DATE.]</h> (a) This section is effective the day 
122.36  following final enactment and is intended to confirm the 
123.1   original intent of the legislature in enacting Minnesota 
123.2   Statutes, section 297A.66, and its predecessor provisions. 
123.3      (b) A retailer may elect that the provisions of this 
123.4   section apply only to sales it made after August 31, 2002, by 
123.5   notifying the commissioner and by applying for a permit under 
123.6   Minnesota Statutes, section 297A.84, by August 15, 2002, to 
123.7   collect the tax imposed under Minnesota Statutes, chapter 297A.  
123.8   A retailer qualifies under this paragraph only if it: 
123.9      (1) did not maintain an office, place of distribution, 
123.10  sales or sample room or place, warehouse, or other place of 
123.11  business in Minnesota except through an affiliate or did not 
123.12  have a representative, agent, salesperson, canvasser, or 
123.13  solicitor in Minnesota except through an affiliate; and 
123.14     (2) has not registered to collect tax under Minnesota 
123.15  Statutes, chapter 297A, as of the date of enactment of this 
123.16  section. 
123.17     Sec. 5.  Minnesota Statutes 2000, section 297A.66, is 
123.18  amended by adding a subdivision to read: 
123.19     Subd. 4.  [AFFILIATED ENTITIES.] (a) An entity is an 
123.20  "affiliate" of the retailer for purposes of subdivision 1, 
123.21  paragraph (a), if: 
123.22     (1) the entity uses its facilities or employees in this 
123.23  state to advertise, promote or facilitate the establishment or 
123.24  maintenance of a market for sales of items by the retailer to 
123.25  purchasers in this state or for the provision of services to the 
123.26  retailer's purchasers in this state, such as accepting returns 
123.27  of purchases for the retailer, providing assistance in resolving 
123.28  customer complaints of the retailer, or providing other 
123.29  services; and 
123.30     (2) the retailer and the entity are related parties. 
123.31     (b) Two entities are related parties under this section if 
123.32  one of the entities meets at least one of the following tests 
123.33  with respect to the other entity: 
123.34     (1) one or both entities is a corporation, and one entity 
123.35  and any party related to that entity in a manner that would 
123.36  require an attribution of stock from the corporation to the 
124.1   party or from the party to the corporation under the attribution 
124.2   rules of section 318 of the Internal Revenue Code owns directly, 
124.3   indirectly, beneficially, or constructively at least 50 percent 
124.4   of the value of the corporation's outstanding stock; 
124.5      (2) one or both entities is a partnership, estate, or trust 
124.6   and any partner or beneficiary, and the partnership, estate, or 
124.7   trust and its partners or beneficiaries own directly, 
124.8   indirectly, beneficially, or constructively, in the aggregate, 
124.9   at least 50 percent of the profits, capital, stock, or value of 
124.10  the other entity or both entities; or 
124.11     (3) an individual stockholder and the members of the 
124.12  stockholder's family (as defined in section 318 of the Internal 
124.13  Revenue Code) owns directly, indirectly, beneficially, or 
124.14  constructively, in the aggregate, at least 50 percent of the 
124.15  value of both entities' outstanding stock. 
124.16     (c) An entity is an affiliate under the provisions of this 
124.17  subdivision if the requirements of paragraphs (a) and (b) are 
124.18  met during any part of the 12-month period ending on the first 
124.19  day of the month before the month in which the sale was made. 
124.20     <h>[EFFECTIVE DATE.]</h> (a) This section is effective the day 
124.21  following final enactment and is intended to confirm the 
124.22  original intent of the legislature in enacting Minnesota 
124.23  Statutes, section 297A.66, and its predecessor provisions. 
124.24     (b) A retailer may elect that the provisions of this 
124.25  section apply only to sales it made after August 31, 2002, by 
124.26  notifying the commissioner and by applying for a permit under 
124.27  Minnesota Statutes, section 297A.84, by August 15, 2002, to 
124.28  collect the tax imposed under Minnesota Statutes, chapter 297A. 
124.29  A retailer qualifies under this paragraph only if it: 
124.30     (1) did not maintain an office, place of distribution, 
124.31  sales or sample room or place, warehouse, or other place of 
124.32  business in Minnesota except through an affiliate or did not 
124.33  have a representative, agent, salesperson, canvasser, or 
124.34  solicitor in Minnesota except through an affiliate; and 
124.35     (2) has not registered to collect tax under Minnesota 
124.36  Statutes, chapter 297A, as of the date of enactment of this 
125.1   section. 
125.2      Sec. 6.  Minnesota Statutes 2001 Supplement, section 
125.3   297A.67, subdivision 2, is amended to read: 
125.4      Subd. 2.  [FOOD AND FOOD INGREDIENTS PRODUCTS.] Food and 
125.5   food ingredients are exempt.  For purposes of this subdivision, 
125.6   "food" and "food ingredients" mean substances, whether in 
125.7   liquid, concentrated, solid, frozen, dried, or dehydrated form, 
125.8   that are sold for ingestion or chewing by humans and are 
125.9   consumed for their taste or nutritional value.  Food and food 
125.10  ingredients do not include candy, soft drinks, food sold through 
125.11  vending machines, and prepared foods.  Food and food ingredients 
125.12  do not include alcoholic beverages, dietary supplements, and 
125.13  tobacco.  For purposes of this subdivision, "alcoholic 
125.14  beverages" means beverages that are suitable for human 
125.15  consumption and contain one-half of one percent or more of 
125.16  alcohol by volume.  For purposes of this subdivision, "tobacco" 
125.17  means cigarettes, cigars, chewing or pipe tobacco, or any other 
125.18  item that contains tobacco.  For purposes of this subdivision, 
125.19  "dietary supplements" means any product, other than tobacco, 
125.20  intended to supplement the diet that: 
125.21     (1) contains one or more of the following dietary 
125.22  ingredients: 
125.23     (i) a vitamin; 
125.24     (ii) a mineral; 
125.25     (iii) an herb or other botanical; 
125.26     (iv) an amino acid; 
125.27     (v) a dietary substance for use by humans to supplement the 
125.28  diet by increasing the total dietary intake; and 
125.29     (vi) a concentrate, metabolite, constituent, extract, or 
125.30  combination of any ingredient described in items (i) to (v); 
125.31     (2) is intended for ingestion in tablet, capsule, powder, 
125.32  softgel, gelcap, or liquid form, or if not intended for 
125.33  ingestion in such form, is not represented as conventional food 
125.34  and is not represented for use as a sole item of a meal or of 
125.35  the diet; and 
125.36     (3) is required to be labeled as a dietary supplement, 
126.1   identifiable by the supplement facts box found on the label and 
126.2   as required pursuant to Code of Federal Regulations, title 21, 
126.3   section 101.36. 
126.4      Food products, including, but not limited to, cereal and 
126.5   cereal products, butter, cheese, milk and milk products, 
126.6   oleomargarine, meat and meat products, fish and fish products, 
126.7   eggs and egg products, vegetables and vegetable products, fruit 
126.8   and fruit products, spices and salt, sugar and sugar products, 
126.9   coffee and coffee substitutes, tea, and cocoa and cocoa products 
126.10  are exempt. 
126.11     <h>[EFFECTIVE DATE.]</h> This section is effective for sales or 
126.12  purchases made on or after July 1, 2002. 
126.13     Sec. 7.  Minnesota Statutes 2000, section 297A.67, 
126.14  subdivision 5, is amended to read: 
126.15     Subd. 5.  [EXEMPT MEALS AT SCHOOLS.] Meals and lunches 
126.16  served at public and private elementary, middle, or secondary 
126.17  schools, universities, or colleges as defined in section 120A.05 
126.18  are exempt.  Meals and lunches served to students at a college, 
126.19  university, and private career school under a board contract, 
126.20  are exempt.  
126.21     <h>[EFFECTIVE DATE.]</h> This section is effective for sales and 
126.22  purchases made after June 30, 2002. 
126.23     Sec. 8.  Minnesota Statutes 2000, section 297A.67, is 
126.24  amended by adding a subdivision to read: 
126.25     Subd. 13a.  [INSTRUCTIONAL MATERIALS.] Instructional 
126.26  materials, other than textbooks, that are prescribed for use in 
126.27  conjunction with a course of study in a post-secondary school, 
126.28  college, university, or private career school to students who 
126.29  are regularly enrolled at such institutions are exempt.  For 
126.30  purposes of this subdivision, "instructional materials" means 
126.31  materials required to be used directly in the completion of the 
126.32  course of study, including, but not limited to, interactive CDs, 
126.33  tapes, and computer software. 
126.34     Instructional materials do not include general reference 
126.35  works or other items incidental to the instructional process 
126.36  such as pens, pencils, paper, folders, or computers.  For 
127.1   purposes of this subdivision, "school" and "private career 
127.2   school" have the meanings given in subdivision 13. 
127.3      <h>[EFFECTIVE DATE.]</h> This section is effective for sales after 
127.4   June 30, 2003. 
127.5      Sec. 9.  Minnesota Statutes 2001 Supplement, section 
127.6   297A.67, subdivision 25, is amended to read: 
127.7      Subd. 25.  [MAINTENANCE OF CEMETERY GROUNDS.] Lawn care and 
127.8   related services used in the maintenance of cemetery grounds are 
127.9   exempt.  For purposes of this subdivision, "lawn care and 
127.10  related services" means the services listed in section 297A.61, 
127.11  subdivision 3, paragraph (g), clause (5) (6), item (vi), and 
127.12  "cemetery" means a cemetery for human burial. 
127.13     Sec. 10.  Minnesota Statutes 2001 Supplement, section 
127.14  297A.67, subdivision 29, is amended to read: 
127.15     Subd. 29.  [ENERGY EFFICIENT PRODUCTS.] (a) A residential 
127.16  lighting fixture or a compact fluorescent bulb is exempt if it 
127.17  has an energy star label. 
127.18     (b) The following products are exempt if they have an 
127.19  energyguide label that indicates that the product meets or 
127.20  exceeds the standards listed below: 
127.21     (1) an electric heat pump hot water heater with an energy 
127.22  factor of at least 1.9; 
127.23     (2) a natural gas water heater with an energy factor of at 
127.24  least 0.62; and 
127.25     (3) a propane gas water heater with an energy factor of at 
127.26  least 0.62; 
127.27     (4) a natural gas furnace with an annual fuel utilization 
127.28  efficiency greater than 92 percent; and 
127.29     (5) a propane gas furnace with an annual fuel utilization 
127.30  efficiency greater than 92 percent. 
127.31     (c) A photovoltaic device is exempt.  For purposes of this 
127.32  subdivision, "photovoltaic device" means a solid-state 
127.33  electrical device, such as a solar module, that converts light 
127.34  directly into direct current electricity of voltage-current 
127.35  characteristics that are a function of the characteristics of 
127.36  the light source and the materials in and design of the device.  
128.1   A "solar module" is a photovoltaic device that produces a 
128.2   specified power output under defined test conditions, usually 
128.3   composed of groups of solar cells connected in series, in 
128.4   parallel, or in series-parallel combinations. 
128.5      (d) For purposes of this subdivision, "energy star label" 
128.6   means the label granted to certain products that meet United 
128.7   States Environmental Protection Agency and United States 
128.8   Department of Energy criteria for energy efficiency.  For 
128.9   purposes of this subdivision, "energyguide label" means the 
128.10  label that the United States Federal Trade Commissioner requires 
128.11  manufacturers to apply to certain appliances under United States 
128.12  Code, title 16, part 305. 
128.13     <h>[EFFECTIVE DATE.]</h> This section is effective for sales and 
128.14  purchases made on or after the day following final enactment and 
128.15  before August 1, 2005. 
128.16     Sec. 11.  Minnesota Statutes 2000, section 297A.67, is 
128.17  amended by adding a subdivision to read: 
128.18     Subd. 31.  [NORTHRUP AUDITORIUM.] Sales of admissions to 
128.19  events at the Northrup auditorium are exempt.  
128.20     <h>[EFFECTIVE DATE.]</h> This section is effective for sales or 
128.21  purchases made on or after July 1, 2002. 
128.22     Sec. 12.  Minnesota Statutes 2001 Supplement, section 
128.23  297A.68, subdivision 3, is amended to read: 
128.24     Subd. 3.  [MATERIALS USED IN PROVIDING CERTAIN TAXABLE 
128.25  SERVICES.] (a) Materials stored, used, or consumed in providing 
128.26  a taxable service listed in section 297A.61, subdivision 3, 
128.27  paragraph (g), clause (5) (6), intended to be sold ultimately at 
128.28  retail are exempt. 
128.29     (b) This exemption includes, but is not limited to: 
128.30     (1) chemicals, lubricants, packaging materials, seeds, 
128.31  trees, fertilizers, and herbicides, if these items are used or 
128.32  consumed in providing the taxable service; 
128.33     (2) chemicals used to treat waste generated as a result of 
128.34  providing the taxable service; 
128.35     (3) accessory tools, equipment, and other items that are 
128.36  separate detachable units used in providing the service and that 
129.1   have an ordinary useful life of less than 12 months; and 
129.2      (4) fuel, electricity, gas, and steam used or consumed in 
129.3   the production process, except that electricity, gas, or steam 
129.4   used for space heating, cooling, or lighting is exempt if (i) it 
129.5   is in excess of average climate control or lighting, and (ii) it 
129.6   is necessary to produce that particular service. 
129.7      (c) This exemption does not include machinery, equipment, 
129.8   implements, tools, accessories, appliances, contrivances, 
129.9   furniture, and fixtures used in providing the taxable service. 
129.10     Sec. 13.  Minnesota Statutes 2001 Supplement, section 
129.11  297A.71, subdivision 23, is amended to read: 
129.12     Subd. 23.  [CONSTRUCTION MATERIALS FOR QUALIFIED LOW-INCOME 
129.13  HOUSING PROJECTS.] (a) Purchases of materials and supplies used 
129.14  or consumed in and equipment incorporated into the construction, 
129.15  improvement, or expansion of qualified low-income housing 
129.16  projects are exempt from the tax imposed under this chapter if 
129.17  the owner of the qualified low-income housing project is: 
129.18     (1) the public housing agency or housing and redevelopment 
129.19  authority of a political subdivision; 
129.20     (2) an entity exercising the powers of a housing and 
129.21  redevelopment authority within a political subdivision; 
129.22     (3) a limited partnership in which the sole general partner 
129.23  is an authority under clause (1) or an entity under clause (2); 
129.24  or 
129.25     (4) a nonprofit corporation subject to the provisions of 
129.26  chapter 317A, and qualifying under section 501(c)(3) or 
129.27  501(c)(4) of the Internal Revenue Code of 1986, as amended; or 
129.28     (5) for purposes of qualified low-income housing described 
129.29  in paragraph (b), clause (5), only, an owner entity, as defined 
129.30  in Code of Federal Regulations, title 24, part 941.604. 
129.31     This exemption applies regardless of whether the purchases 
129.32  are made by the owner of the facility or a contractor.  
129.33     (b) For purposes of this exemption, "qualified low-income 
129.34  housing project" means: 
129.35     (1) a housing or mixed use project in which at least 20 
129.36  percent of the residential units are qualifying low-income 
130.1   rental housing units as defined in section 273.126; 
130.2      (2) a federally assisted low-income housing project 
130.3   financed by a mortgage insured or held by the United States 
130.4   Department of Housing and Urban Development under United States 
130.5   Code, title 12, section 1701s, 1715l(d)(3), 1715l(d)(4), or 
130.6   1715z-1; United States Code, title 42, section 1437f; the Native 
130.7   American Housing Assistance and Self-Determination Act, United 
130.8   States Code, title 25, section 4101 et seq.; or any similar 
130.9   successor federal low-income housing program; 
130.10     (3) a qualified low-income housing project as defined in 
130.11  United States Code, title 26, section 42(g), meeting all of the 
130.12  requirements for a low-income housing credit under section 42 of 
130.13  the Internal Revenue Code regardless of whether the project 
130.14  actually applies for or receives a low-income housing credit; or 
130.15     (4) a project that will be operated in compliance with 
130.16  Internal Revenue Service revenue procedure 96-32; or 
130.17     (5) a housing or mixed-use project in which all or a 
130.18  portion of the residential units are subject to the requirements 
130.19  of section 5 of the United States Housing Act of 1937.  For a 
130.20  housing or mixed-use project under this clause, the exempt 
130.21  amount must be determined by multiplying each purchase described 
130.22  in paragraph (a) for the project by the ratio of (1) the total 
130.23  gross square footage of units subject to the requirements of 
130.24  section 5 of the United States Housing Act of 1937 to (2) the 
130.25  total gross square footage of all units in the project. 
130.26     <h>[EFFECTIVE DATE.]</h> This section is effective retroactive for 
130.27  sales and purchases made after July 31, 2001.  For sales and 
130.28  purchases made after July 31, 2001, and before July 1, 2002, an 
130.29  owner entity under this section may apply on a form prescribed 
130.30  by the commissioner for a refund of the tax paid on the exempt 
130.31  amount as determined under this section. 
130.32     Sec. 14.  Minnesota Statutes 2000, section 297A.71, is 
130.33  amended by adding a subdivision to read: 
130.34     Subd. 28.  [CONSTRUCTION MATERIALS AND EQUIPMENT; 
130.35  REPLACEMENT AGRICULTURAL PROCESSING FACILITY.] Materials and 
130.36  supplies used or consumed in, and machinery and equipment 
131.1   incorporated into, the construction of a meat-packing or 
131.2   meat-processing facility are exempt if: 
131.3      (1) the cost of the project exceeds $75,000,000; and 
131.4      (2) the facility replaces a facility that was destroyed by 
131.5   fire. 
131.6      <h>[EFFECTIVE DATE.]</h> This section is effective for sales and 
131.7   purchases made after March 31, 2002, and before January 1, 2005. 
131.8      Sec. 15.  Minnesota Statutes 2000, section 297A.71, is 
131.9   amended by adding a subdivision to read: 
131.10     Subd. 29.  [HYDROELECTRIC GENERATING FACILITY.] Materials 
131.11  and supplies used or consumed in the construction of a 
131.12  hydroelectric generating facility that meets the requirements of 
131.13  this subdivision are exempt.  To qualify for the exemption under 
131.14  this subdivision, a hydroelectric generating facility must: 
131.15     (1) utilize two turbine generators at a dam site existing 
131.16  on March 31, 1994; 
131.17     (2) be located on publicly owned land and within 2,500 feet 
131.18  of a 13.8 kilovolt distribution circuit; and 
131.19     (3) be eligible to receive a renewable energy production 
131.20  incentive payment under section 216C.41. 
131.21     <h>[EFFECTIVE DATE.]</h> This section is effective for sales made 
131.22  after August 31, 2002, and on or before December 31, 2003. 
131.23     Sec. 16.  Minnesota Statutes 2000, section 297A.71, is 
131.24  amended by adding a subdivision to read: 
131.25     Subd. 30.  [GUTHRIE THEATER.] Materials, equipment, and 
131.26  supplies used or consumed in construction of the Guthrie 
131.27  Theater, the related parking garage, and the related parking 
131.28  ramp are exempt. 
131.29     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
131.30  following final enactment. 
131.31     Sec. 17.  Minnesota Statutes 2000, section 297A.71, is 
131.32  amended by adding a subdivision to read: 
131.33     Subd. 31.  [CHILDREN'S THEATRE.] Materials, equipment, and 
131.34  supplies used or consumed in construction of a Children's 
131.35  Theatre in the city of Minneapolis are exempt. 
131.36     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
132.1   following final enactment. 
132.2      Sec. 18.  Minnesota Statutes 2000, section 297A.71, is 
132.3   amended by adding a subdivision to read: 
132.4      Subd. 32.  [THIEF RIVER FALLS.] Construction materials and 
132.5   supplies used and consumed in the construction of a community or 
132.6   regional project by the city of Thief River Falls are exempt if 
132.7   the city receives 80 percent or more of the funding for the 
132.8   project from private sources. 
132.9      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
132.10  following final enactment. 
132.11     Sec. 19.  Minnesota Statutes 2000, section 297A.71, is 
132.12  amended by adding a subdivision to read: 
132.13     Subd. 33.  [WALKER ART CENTER.] Materials, equipment, and 
132.14  supplies used or consumed in construction of the Walker Art 
132.15  Center and the related parking garage are exempt. 
132.16     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
132.17  following final enactment. 
132.18     Sec. 20.  Minnesota Statutes 2001 Supplement, section 
132.19  297A.995, subdivision 4, is amended to read: 
132.20     Subd. 4.  [AUTHORITY TO ENTER AGREEMENT.] The commissioner 
132.21  of revenue is authorized and directed to enter into the 
132.22  agreement with one or more states to simplify and modernize 
132.23  sales and use tax administration in order to substantially 
132.24  reduce the burden of tax compliance for all sellers and for all 
132.25  types of commerce.  In furtherance of the agreement, the 
132.26  commissioner is authorized to act jointly with other states that 
132.27  are members of the agreement to establish standards for 
132.28  certification of a certified service provider and certified 
132.29  automated system and establish performance standards for 
132.30  multistate sellers. 
132.31     The commissioner of revenue is further directed to 
132.32  negotiate the agreement with the express intention of ensuring 
132.33  uniform sales and use taxation as applied to like-kind 
132.34  transactions.  
132.35     The commissioner is further authorized to take other 
132.36  actions reasonably required to implement the provisions set 
133.1   forth in this article.  Other actions authorized by this section 
133.2   include, but are not limited to, the adoption of rules and 
133.3   regulations and the joint procurement, with other member states, 
133.4   of goods and services in furtherance of the cooperative 
133.5   agreement. 
133.6      The commissioner or the commissioner's designee is 
133.7   authorized to represent this state before the other states that 
133.8   are signatories to the agreement. 
133.9      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
133.10  following final enactment. 
133.11     Sec. 21.  Laws 1990, chapter 604, article 6, section 9, 
133.12  subdivision 1, as amended by Laws 1991, chapter 291, article 8, 
133.13  section 25, is amended to read:  
133.14     Subdivision 1.  [AUTHORIZATION.] Notwithstanding Minnesota 
133.15  Statutes, section 469.190, 477A.016, or other law, in addition 
133.16  to the tax authorized in Laws 1986, chapter 391, section 4, the 
133.17  governing body of the city of Bloomington may impose a tax of up 
133.18  to one two percent on the gross receipts from the furnishing for 
133.19  consideration of lodging at a hotel, motel, rooming house, 
133.20  tourist court, or resort, other than the renting or leasing of 
133.21  it for a continuous period of 30 days or more, located in the 
133.22  city.  The city may agree with the commissioner of revenue that 
133.23  a tax imposed under this section shall be collected by the 
133.24  commissioner together with the tax imposed by Minnesota 
133.25  Statutes, chapter 297A, and subject to the same interest, 
133.26  penalties, and other rules and that its proceeds, less the cost 
133.27  of collection, shall be remitted to the city.  The proceeds of 
133.28  the tax must be used by the Bloomington convention bureau only 
133.29  to market and promote the city as a tourist or convention 
133.30  center.  If the duties of the convention bureau as they existed 
133.31  on January 1, 1991, are assigned to another agency, the tax 
133.32  shall cease.  
133.33     <h>[EFFECTIVE DATE; LOCAL APPROVAL.]</h> This section takes effect 
133.34  the day after the governing body of the city of Bloomington 
133.35  complies with Minnesota Statutes, section 645.021, subdivision 3.
133.36     Sec. 22.  Laws 1996, chapter 471, article 2, section 29, is 
134.1   amended to read: 
134.2      Sec. 29.  [CITY OF HERMANTOWN; SALES AND USE TAX.] 
134.3      Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] (a) 
134.4   Notwithstanding Minnesota Statutes, section 477A.016, or any 
134.5   other contrary provision of law, ordinance, or city charter, the 
134.6   city of Hermantown may, by ordinance, impose an additional sales 
134.7   and use tax of up to one percent on sales transactions taxable 
134.8   pursuant to Minnesota Statutes, chapter 297A, that occur within 
134.9   the city. 
134.10     (b) The proceeds of the first one-half of one percent of 
134.11  tax imposed under this section must be used to meet the costs of 
134.12  by the city for the following projects: 
134.13     (1) extending a sewer interceptor line; 
134.14     (2) construction of a booster pump station, reservoirs, and 
134.15  related improvements to the water system; and 
134.16     (3) construction of a police and fire station. 
134.17     (c) Revenues received from the remaining one-half of one 
134.18  percent of the tax authorized under this section must be used by 
134.19  the city to pay all or part of the capital and administrative 
134.20  costs of developing, acquiring, constructing, and initially 
134.21  furnishing and equipping for the following projects: 
134.22     (1) construction of a community education and recreation 
134.23  center that includes a senior citizens center, fitness center, 
134.24  swimming pool, community meeting and education room, community 
134.25  technology library, and indoor track; 
134.26     (2) renovation or construction of an addition to the 
134.27  school's existing ice facility; 
134.28     (3) construction of a new city hall; 
134.29     (4) construction of a new public works garage; 
134.30     (5) construction of frontage roads and other traffic 
134.31  control measures along Highway 53 within the city of Hermantown; 
134.32  and 
134.33     (6) construction of bleachers, and outdoor soccer, 
134.34  football, and track facilities at the school. 
134.35     (d) Authorized expenses include, but are not limited to, 
134.36  acquiring property, paying construction, administrative, and 
135.1   operating expenses related to the development of the projects 
135.2   listed in paragraph (c), paying debt service on bonds or other 
135.3   obligations, including lease obligations, issued to finance 
135.4   construction, expansion, or improvement of the projects listed 
135.5   in paragraph (c), and other compatible uses, including but not 
135.6   limited to, parking, lighting, and landscaping. 
135.7      Subd. 2.  [REFERENDUM.] (a) If the Hermantown city council 
135.8   proposes to impose the sales tax authorized by this section, it 
135.9   shall conduct a referendum on the issue. 
135.10     (b) If the Hermantown city council initially imposes the 
135.11  tax at a rate less than one percent and proposes increasing it 
135.12  at a later date up to the authorized rate in subdivision 1, it 
135.13  shall conduct a referendum on the increase. 
135.14     (c) The question of imposing or increasing the tax must be 
135.15  submitted to the voters at a special or general election.  The 
135.16  tax may not be imposed unless a majority of votes cast on the 
135.17  question of imposing the tax are in the affirmative.  The 
135.18  commissioner of revenue shall prepare a suggested form of 
135.19  question to be presented at the election.  This subdivision 
135.20  applies notwithstanding any city charter provision to the 
135.21  contrary. 
135.22     Subd. 3.  [ENFORCEMENT; COLLECTION; AND ADMINISTRATION OF 
135.23  TAXES.] A sales tax imposed under this section must be reported 
135.24  and paid to the commissioner of revenue with the state sales 
135.25  taxes, and be subject to the same penalties, interest, and 
135.26  enforcement provisions.  The proceeds of the tax, less refunds 
135.27  and a proportionate share of the cost of collection, shall be 
135.28  remitted at least quarterly to the city.  The commissioner shall 
135.29  deduct from the proceeds remitted an amount that equals the 
135.30  indirect statewide cost as well as the direct and indirect 
135.31  department costs necessary to administer, audit, and collect the 
135.32  tax.  The amount deducted shall be deposited in the state 
135.33  general fund. 
135.34     Subd. 3a.  [BONDING AUTHORITY.] (a) The city may issue 
135.35  general obligation bonds under Minnesota Statutes, chapter 475, 
135.36  to finance the costs in subdivision 1, paragraph (c).  The total 
136.1   amount of bonds issued for the projects under subdivision 1, 
136.2   paragraph (c), may not exceed $12,900,000 in the aggregate.  An 
136.3   election to approve the bonds is not required. 
136.4      (b) The bonds are not included in computing any debt 
136.5   limitation applicable to the city and the levy of taxes under 
136.6   Minnesota Statutes, section 475.61, to pay principal of and 
136.7   interest on the bonds is not subject to any levy limitation. 
136.8      (c) The taxes authorized under this section may be pledged 
136.9   to and used for the payment of the bonds and any bonds issued to 
136.10  refund them. 
136.11     Subd. 4.  [TERMINATION.] The portion of the tax authorized 
136.12  under this section to finance the improvements described in 
136.13  subdivision 1, paragraph (b), terminates at the later of (1) ten 
136.14  years after the date of initial imposition of the tax, or (2) on 
136.15  the first day of the second month next succeeding a 
136.16  determination by the city council that sufficient funds have 
136.17  been received from that portion of the tax dedicated to finance 
136.18  the those improvements described in subdivision 1, clauses (1) 
136.19  to (3), and to prepay or retire at maturity the principal, 
136.20  interest, and premium due on any bonds issued for the 
136.21  improvements.  The portion of the tax authorized under this 
136.22  section to finance the improvements described in subdivision 1, 
136.23  paragraph (c), terminates when the revenues raised are 
136.24  sufficient to finance those improvements, up to an amount equal 
136.25  to $12,900,000 plus any interest, premium, and other costs 
136.26  associated with the bonds issued under subdivision 3a.  The city 
136.27  council may terminate this portion of the tax earlier.  Any 
136.28  funds remaining after completion of the improvements and 
136.29  retirement or redemption of the bonds may be placed in the 
136.30  general fund of the city. 
136.31     Subd. 5.  [LOCAL APPROVAL; EFFECTIVE DATE.] This section is 
136.32  effective the day after final enactment, upon compliance with 
136.33  Minnesota Statutes, section 645.021, subdivision 3, by the city 
136.34  of Hermantown. 
136.35     <h>[EFFECTIVE DATE.]</h> This section is effective the day after 
136.36  final enactment, upon compliance with Minnesota Statutes, 
137.1   section 645.021, subdivision 3, by the city of Hermantown. 
137.2      Sec. 23.  Laws 1998, chapter 389, article 8, section 37, 
137.3   subdivision 2, is amended to read: 
137.4      Subd. 2.  [APPOINTMENT OF MEMBERS.] The citizen review 
137.5   panel must consist of 17 members, each of whom represents one of 
137.6   the district councils consists of three residents from each of 
137.7   the seven city council wards, for a total of 21 members.  The 
137.8   mayor must appoint the members, and the appointments are subject 
137.9   to confirmation by a majority vote of the city council.  Members 
137.10  serve for a term of four years.  Elected officials and employees 
137.11  of the city are ineligible to serve as members of the panel. 
137.12     <h>[EFFECTIVE DATE.]</h> This section is effective upon approval 
137.13  by the governing body of the city of St. Paul and compliance 
137.14  with Minnesota Statutes, section 645.021. 
137.15     Sec. 24.  Laws 2001, First Special Session chapter 5, 
137.16  article 12, section 11, the effective date, is amended to read: 
137.17     <h>[EFFECTIVE DATE.]</h> This section is effective for January 1, 
137.18  2002, however, for contracts entered into before January 1, 
137.19  2002, the sale price for aggregate materials and concrete block 
137.20  does not include delivery charges until January 1, 2005. 
137.21     Sec. 25.  Laws 2001, First Special Session chapter 5, 
137.22  article 12, section 82, the effective date, is amended to read: 
137.23     <h>[EFFECTIVE DATE.]</h> This section is effective January 1, 2003 
137.24  for sales and purchases made after December 31, 2005. 
137.25     Sec. 26.  [ROCHESTER LODGING TAX.] 
137.26     Subdivision 1.  [AUTHORIZATION.] Notwithstanding Minnesota 
137.27  Statutes, section 469.190 or 477A.016, or any other law, the 
137.28  city of Rochester may impose an additional tax of two percent on 
137.29  the gross receipts from the furnishing for consideration of 
137.30  lodging at a hotel, motel, rooming house, tourist court, or 
137.31  resort, other than the renting or leasing of it for a continuous 
137.32  period of 30 days or more. 
137.33     Subd. 2.  [DISPOSITION OF PROCEEDS.] The gross proceeds 
137.34  from any tax imposed under subdivision 1 must be used by the 
137.35  city to fund a local convention or tourism bureau for the 
137.36  purpose of marketing and promoting the city as a tourist or 
138.1   convention center.  
138.2      <h>[EFFECTIVE DATE.]</h> This section is effective for lodging 
138.3   furnished on or after July 1, 2002. 
138.4      Sec. 27.  [CITY OF ALBERT LEA; SALES AND USE TAX.] 
138.5      Subdivision 1.  [SALES AND USE TAX 
138.6   AUTHORIZED.] Notwithstanding Minnesota Statutes, section 
138.7   477A.016, or any other provision of law, ordinance, or city 
138.8   charter, the city of Albert Lea may, by ordinance, impose a 
138.9   sales and use tax of one-half of one percent for the purposes 
138.10  specified in subdivision 2.  Except as otherwise specifically 
138.11  provided, the provisions of Minnesota Statutes, section 297A.99, 
138.12  govern the imposition, administration, collection, and 
138.13  enforcement of the tax authorized under this subdivision. 
138.14     Subd. 2.  [USE OF REVENUES.] The proceed of the tax imposed 
138.15  under this section must be used to pay the costs of the 
138.16  following projects: 
138.17     (1) lake improvement projects, which are specified at least 
138.18  90 days before the occurrence of the referendum as required by 
138.19  Minnesota Statutes, section 297A.99, subdivision 3; and 
138.20     (2) downtown improvement projects, which are specified at 
138.21  least 90 days before the occurrence of the referendum as 
138.22  required by Minnesota Statutes, section 297A.99, subdivision 3. 
138.23     Subd. 3.  [REFERENDUM.] If the Albert Lea city council 
138.24  proposes to impose the tax authorized by this section, the 
138.25  question of imposing the tax must be submitted to the voters at 
138.26  the next general election.  The tax must not be imposed unless 
138.27  the majority of votes cast on the question of imposing the tax 
138.28  are in the affirmative.  The commissioner of revenue shall 
138.29  prepare a suggested form of the question to be presented at the 
138.30  election.  The question must state that the sales and use tax 
138.31  revenues would be pledged to pay any bonds issued under 
138.32  subdivision 4 and that these bonds are guaranteed by the city's 
138.33  property taxes. 
138.34     Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
138.35  under Minnesota Statutes, chapter 475, to finance the capital 
138.36  expenditure and improvement projects authorized under 
139.1   subdivision 2.  The total amount of bonds issued for the 
139.2   projects listed in subdivision 2 may not exceed $14,500,000 in 
139.3   aggregate.  An election to approve the bonds, as required under 
139.4   Minnesota Statutes, section 475.58, is not required. 
139.5      (b) The issuance of the bonds under this subdivision is not 
139.6   subject to Minnesota Statutes, sections 275.60 and 275.61. 
139.7      (c) The bonds are not included in computing any debt 
139.8   limitation applicable to the city, and the levy of taxes under 
139.9   Minnesota Statutes, section 475.61, to pay the principal of and 
139.10  interest on the bonds is not subject to any levy limitation. 
139.11     (d) The tax authorized under this section may be pledged to 
139.12  and used for the payment of the bonds and any bonds issued to 
139.13  refund them only if the bonds and any refunding bonds are 
139.14  general obligations of the city. 
139.15     Subd. 5.  [TERMINATION OF TAXES.] The tax imposed under 
139.16  this section expires at the earlier of (1) ten years after the 
139.17  tax is first imposed, or (2) when the city council first 
139.18  determines that the amount of revenues raised to pay for the 
139.19  projects under subdivision 2, shall meet or exceed the sum of 
139.20  $14,500,000, plus an amount equal to the costs related to the 
139.21  issuance of bonds under subdivision 4.  Any funds remaining 
139.22  after completion of the projects and retirement or redemption of 
139.23  the bonds may be placed in the general funds of the city. 
139.24     <h>[EFFECTIVE DATE.]</h> This section is effective the day after 
139.25  compliance by the governing body of the city of Albert Lea with 
139.26  Minnesota Statutes, section 645.021, subdivision 3. 
139.27     Sec. 28.  [CITY OF CLOQUET; TAXES AUTHORIZED.] 
139.28     Subdivision 1.  [SALES AND USE TAX.] Notwithstanding 
139.29  Minnesota Statutes, section 477A.016, or any other provision of 
139.30  law, ordinance, or city charter, the city of Cloquet may impose 
139.31  by ordinance a sales and use tax of up to one-half of one 
139.32  percent for the purpose specified in subdivision 3.  Except as 
139.33  otherwise specifically provided in this section, the provisions 
139.34  of Minnesota Statutes, section 297A.99, govern the imposition, 
139.35  administration, collection, and enforcement of the tax 
139.36  authorized under this subdivision. 
140.1      Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
140.2   Minnesota Statutes, section 477A.016, or any other provision of 
140.3   law, ordinance, or city charter, the city of Cloquet may impose 
140.4   by ordinance, for the purposes specified in subdivision 3, an 
140.5   excise tax of up to $20 per motor vehicle, as defined by 
140.6   ordinance, purchased or acquired from any person engaged within 
140.7   the city in the business of selling motor vehicles at retail. 
140.8      Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
140.9   authorized by subdivisions 1 and 2 must be used by the city to 
140.10  pay the cost of collecting the taxes and to pay for the 
140.11  following projects: 
140.12     (1) construction and equipment of a senior and community 
140.13  center; 
140.14     (2) construction and improvements to park land along the St.
140.15  Louis river; and 
140.16     (3) extension of water and sewer lines and other 
140.17  improvements to city infrastructure for expansion of a city 
140.18  industrial park. 
140.19     Authorized expenses include, but are not limited to, 
140.20  acquiring property, paying construction, and operating expenses 
140.21  related to the development of the facility, and paying debt 
140.22  service on bonds or other obligations, including lease 
140.23  obligations, issued to finance the construction, expansion, or 
140.24  improvement of the facility. 
140.25     Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
140.26  under Minnesota Statutes, chapter 475, to finance the capital 
140.27  expenditure and improvement projects described in subdivision 3. 
140.28  An election to approve the bonds under Minnesota Statutes, 
140.29  section 475.58, is not required. 
140.30     (b) The issuance of bonds under this subdivision is not 
140.31  subject to Minnesota Statutes, sections 275.60 and 275.61. 
140.32     (c) The bonds are not included in computing any debt 
140.33  limitation applicable to the city, and the levy of taxes under 
140.34  Minnesota Statutes, section 475.61, to pay principal of and 
140.35  interest on the bonds is not subject to any levy limitation.  
140.36     (d) The sales and use and excise taxes authorized in this 
141.1   section may be pledged to and used for the payment of the bonds 
141.2   and any bonds issued to refund them only if the bonds and any 
141.3   refunding bonds are general obligations of the city. 
141.4      Subd. 5.  [TERMINATION OF TAXES.] The taxes imposed under 
141.5   subdivisions 1 and 2 expire at the earlier of (1) 20 years, or 
141.6   (2) when the city council determines that sufficient funds have 
141.7   been received from the taxes to finance the capital and 
141.8   administrative costs for the acquisition, construction, 
141.9   expansion, and improvement of the facility described in 
141.10  subdivision 3, plus the additional amount needed to pay the 
141.11  costs related to issuance of bonds under subdivision 4, 
141.12  including interest on the bonds.  Any funds remaining after 
141.13  completion of the project and retirement or redemption of the 
141.14  bonds may be placed in the general fund of the city.  The taxes 
141.15  imposed under subdivisions 1 and 2 may expire at an earlier time 
141.16  if the city so determines by ordinance. 
141.17     <h>[EFFECTIVE DATE.]</h> This section is effective the day after 
141.18  compliance by the governing body of the city of Cloquet with 
141.19  Minnesota Statutes, section 645.021, subdivision 3. 
141.20     Sec. 29.  [CITY OF ELY; TAXES AUTHORIZED.] 
141.21     Subdivision 1.  [SALES AND USE TAX.] Notwithstanding 
141.22  Minnesota Statutes, section 297A.99, subdivision 3; 477A.016; or 
141.23  any other provision of law, ordinance, or city charter, if 
141.24  approved by the city voters at the first municipal general or 
141.25  special election held after the date of final enactment of this 
141.26  act, the city of Ely may impose by ordinance a sales and use tax 
141.27  of up to one percent for the purposes specified in subdivision 
141.28  2.  Except as otherwise provided in this section, the provisions 
141.29  of Minnesota Statutes, section 297A.99, govern the imposition, 
141.30  administration, collection, and enforcement of the tax 
141.31  authorized under this subdivision. 
141.32     Subd. 2.  [USE OF REVENUES.] Revenues received from taxes 
141.33  authorized by subdivision 1 must be used by the city to pay the 
141.34  cost of collecting and administering the taxes and to pay all or 
141.35  part of the capital and administrative costs of acquiring, 
141.36  constructing, furnishing, equipping, expanding, improving, and 
142.1   developing city facilities, which the city council finds, by 
142.2   resolution, are related to economic development or job creation, 
142.3   including, but not limited to, the following: 
142.4      (1) land acquisition and site development; 
142.5      (2) installation of improvements authorized by Minnesota 
142.6   Statutes, chapter 429; 
142.7      (3) development or redevelopment activities in the central 
142.8   business district of the city; 
142.9      (4) business park development; 
142.10     (5) development of a small business incubator; 
142.11     (6) development of a technology center; or 
142.12     (7) Americans With Disabilities Act compliance improvements 
142.13  to the Ely community center and city hall. 
142.14  Authorized expenses include, but are not limited to, acquiring 
142.15  and clearing property; paying construction, administrative, and 
142.16  operating expenses related to the development of the facilities 
142.17  listed herein; and paying debt service on bonds or other 
142.18  obligations, including lease obligations, issued to finance the 
142.19  activities listed herein and other compatible and related 
142.20  activities, including, but not limited to, parking, lighting, 
142.21  and landscaping improvements.  The capital expenses for all 
142.22  projects authorized under this paragraph that may be paid with 
142.23  these taxes are limited to $4,000,000 plus an amount equal to 
142.24  the costs related to issuance of the bonds. 
142.25     Subd. 3.  [BONDING AUTHORITY.] (a) The city may issue bonds 
142.26  under Minnesota Statutes, chapter 475, to finance the capital 
142.27  expenditure and improvement projects described in subdivision 
142.28  2.  An election to approve the bonds under Minnesota Statutes, 
142.29  section 475.58, is not required. 
142.30     (b) The issuance of bonds under this subdivision is not 
142.31  subject to Minnesota Statutes, section 275.60 or 275.61. 
142.32     (c) The bonds are not included in computing any debt 
142.33  limitation applicable to the city, and the levy of taxes under 
142.34  Minnesota Statutes, section 475.61, to pay principal of and 
142.35  interest on the bonds is not subject to any levy limitation. 
142.36     (d) The aggregate principal amount of bonds plus the 
143.1   aggregate of the taxes used directly to pay eligible capital 
143.2   expenditures and improvements may not exceed $4,000,000 plus an 
143.3   amount equal to the costs related to issuance of the bonds, 
143.4   including interest on the bonds. 
143.5      (e) The taxes may be pledged to and used for the payment of 
143.6   the bonds, and any bonds issued to refund them, only if the 
143.7   bonds and any refunding bonds are general obligations of the 
143.8   city. 
143.9      Subd. 4.  [TERMINATION OF TAXES.] The taxes imposed under 
143.10  subdivision 1 expire when the city council determines that the 
143.11  amount described in subdivision 3, paragraph (d), has been 
143.12  received from the taxes to finance the activities described in 
143.13  subdivision 2 plus the additional amount needed to pay the costs 
143.14  related to issuance of bonds under subdivision 3.  Any funds 
143.15  remaining after completion of the activities described in 
143.16  subdivision 3 and retirement or redemption of the bonds may be 
143.17  placed in the general fund of the city.  The taxes imposed under 
143.18  subdivisions 1 and 2 may expire at an earlier time if the city 
143.19  so determines by ordinance. 
143.20     Subd. 5.  [LOCAL APPROVAL; EFFECTIVE DATE.] This section is 
143.21  effective the day following final enactment, upon compliance 
143.22  with Minnesota Statutes, section 645.021, subdivision 3, by the 
143.23  city of Ely. 
143.24     Sec. 30.  [CITY OF BEAVER BAY; TAXES AUTHORIZED.] 
143.25     Subdivision 1.  [SALES AND USE TAXES.] Notwithstanding 
143.26  Minnesota Statutes, section 477A.016, or any other provision of 
143.27  law or ordinance, if approved by the voters of the city at the 
143.28  next general election held after the date of final enactment of 
143.29  this act, the city of Beaver Bay may impose by ordinance a sales 
143.30  and use tax at a rate of up to one percent for the purposes 
143.31  specified in subdivision 2.  The provisions of Minnesota 
143.32  Statutes, section 297A.99, govern the imposition, 
143.33  administration, collection, and enforcement of the tax 
143.34  authorized under this subdivision. 
143.35     Subd. 2.  [USE OF REVENUES.] The revenues received from 
143.36  taxes authorized by subdivision 1 must be used to pay the bonded 
144.1   indebtedness on the city community building and to provide 
144.2   funding for recreational facilities, the upgrading of the water 
144.3   and sewer system, a fire hall and equipment, and improvement of 
144.4   streets. 
144.5      Subd. 3.  [TERMINATION OF TAXES.] The authority granted 
144.6   under subdivision 1 to the city of Beaver Bay to impose sales 
144.7   and use taxes expires when the city council determines that 
144.8   sufficient funds have been received to pay the costs of the 
144.9   projects described in subdivision 2. 
144.10     <h>[EFFECTIVE DATE.]</h> This section is effective the day after 
144.11  approval by the governing body of the city of Beaver Bay and 
144.12  compliance with Minnesota Statutes, section 645.021, subdivision 
144.13  3. 
144.14     Sec. 31.  [CITY OF MEDFORD; SALES AND USE TAX.] 
144.15     Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] 
144.16  Notwithstanding Minnesota Statutes, section 477A.016, or any 
144.17  other provision of law, ordinance, or city charter, the city of 
144.18  Medford may, by ordinance, impose a sales and use tax of 
144.19  one-half of one percent for the purposes specified in 
144.20  subdivision 2.  Except as otherwise specifically provided, the 
144.21  provisions of Minnesota Statutes, section 297A.99, govern the 
144.22  imposition, administration, collection, and enforcement of the 
144.23  tax authorized under this subdivision. 
144.24     Subd. 2.  [USE OF REVENUES.] Revenues received from the tax 
144.25  authorized by subdivision 1 must be used to pay for the cost of 
144.26  collecting and administering the tax and to pay all or part of 
144.27  the capital and administrative costs of the construction and 
144.28  improvement of wastewater treatment facilities.  Authorized 
144.29  expenses include, but are not limited to, acquiring the 
144.30  property, paying construction and operating expenses related to 
144.31  the development of the facilities, and securing and paying debt 
144.32  service on bonds or other obligations issued to finance 
144.33  construction and improvement of the authorized facilities.  
144.34     Subd. 3.  [REFERENDUM.] If the Medford city council 
144.35  proposes to impose the tax authorized by this section, the 
144.36  question of imposing the tax must be submitted to the voters at 
145.1   the next general election.  The tax must not be imposed unless 
145.2   the majority of votes cast on the question of imposing the tax 
145.3   are in the affirmative.  The commissioner of revenue shall 
145.4   prepare a suggested form of the question to be presented at the 
145.5   election.  The question must state that the sales and use tax 
145.6   revenues would be pledged to pay any bonds issued under 
145.7   subdivision 4 and that these bonds are guaranteed by the city's 
145.8   property taxes. 
145.9      Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
145.10  under Minnesota Statutes, chapter 475, to finance the capital 
145.11  expenditure and improvement projects authorized under 
145.12  subdivision 2.  The total amount of bonds issued for the 
145.13  projects listed in subdivision 2 may not exceed $5,500,000 in 
145.14  aggregate.  An election to approve the bonds, as required under 
145.15  Minnesota Statutes, section 475.58, is not required. 
145.16     (b) The issuance of the bonds under this subdivision is not 
145.17  subject to Minnesota Statutes, sections 275.60 and 275.61. 
145.18     (c) The bonds are not included in computing any debt 
145.19  limitation applicable to the city, and the levy of taxes under 
145.20  Minnesota Statutes, section 475.61, to pay the principal of and 
145.21  interest on the bonds is not subject to any levy limitation. 
145.22     (d) The tax authorized under this section may be pledged to 
145.23  and used for the payment of the bonds and any bonds issued to 
145.24  refund them only if the bonds and any refunding bonds are 
145.25  general obligations of the city. 
145.26     Subd. 5.  [TERMINATION OF TAXES.] The tax imposed under 
145.27  this section expires at the earlier of (1) 20 years after the 
145.28  tax is first imposed, or (2) when the city council first 
145.29  determines that the amount of revenues raised to pay for the 
145.30  projects under subdivision 2 shall meet or exceed the sum of 
145.31  $5,500,000, plus an amount equal to the costs related to the 
145.32  issuance of bonds under subdivision 4.  Any funds remaining 
145.33  after completion of the projects and retirement or redemption of 
145.34  the bonds may be placed in the general funds of the city. 
145.35     <h>[EFFECTIVE DATE.]</h> This section is effective the day after 
145.36  compliance by the governing body of the city of Medford with 
146.1   Minnesota Statutes, section 645.021, subdivision 3. 
146.2      Sec. 32.  [REPEALER.] 
146.3      (a) Minnesota Statutes 2000, section 297A.68, subdivision 
146.4   26, is repealed effective for sales and purchases made after 
146.5   June 30, 2003. 
146.6      (b) Minnesota Statutes 2001 Supplement, section 297A.61, 
146.7   subdivision 31, is repealed, effective July 1, 2002. 
146.8                              ARTICLE 16
146.9                             PROPERTY TAX
146.10     Section 1.  Minnesota Statutes 2001 Supplement, section 
146.11  126C.21, subdivision 4, is amended to read: 
146.12     Subd. 4.  [TACONITE DEDUCTIONS.] (1) Notwithstanding any 
146.13  provisions of any other law to the contrary, the adjusted net 
146.14  tax capacity used in calculating general education aid may 
146.15  include only that property that is currently taxable in the 
146.16  district.  
146.17     (2) For districts that received payments under sections 
146.18  298.018; 298.225; 298.28; 298.34 to 298.39; 298.391 to 298.396; 
146.19  and 298.405, or any law imposing a tax upon severed mineral 
146.20  values; or recognized revenue under section 477A.15; the general 
146.21  education aid must be reduced in the final adjustment payment by 
146.22  the difference between the dollar amount of the payments 
146.23  received pursuant to those sections, or revenue recognized under 
146.24  section 477A.15 in the fiscal year to which the final adjustment 
146.25  is attributable and the amount that was calculated, pursuant to 
146.26  section 126C.48, subdivision 8, as a reduction of the levy 
146.27  attributable to the fiscal year to which the final adjustment is 
146.28  attributable.  If the final adjustment of a district's general 
146.29  education aid for a fiscal year is a negative amount because of 
146.30  this clause, the next fiscal year's general education aid to 
146.31  that district must be reduced by this negative amount in the 
146.32  following manner:  there must be withheld from each scheduled 
146.33  general education aid payment due the district in such fiscal 
146.34  year, 15 percent of the total negative amount, until the total 
146.35  negative amount has been withheld.  The amount reduced from 
146.36  general education aid pursuant to this clause must be recognized 
147.1   as revenue in the fiscal year to which the final adjustment 
147.2   payment is attributable. 
147.3      Sec. 2.  [126C.445] [TREE GROWTH REPLACEMENT REVENUE.] 
147.4      For taxes payable in 2003 and later, a school district may 
147.5   levy an amount not to exceed its miscellaneous revenue for tree 
147.6   growth revenue for taxes payable in 2002.  
147.7      Sec. 3.  Minnesota Statutes 2001 Supplement, section 
147.8   126C.48, subdivision 8, is amended to read: 
147.9      Subd. 8.  [TACONITE PAYMENT AND OTHER REDUCTIONS.] (1) 
147.10  Reductions in levies pursuant to sections 126C.48, subdivision 
147.11  1, and 273.138, must be made prior to the reductions in clause 
147.12  (2). 
147.13     (2) Notwithstanding any other law to the contrary, 
147.14  districts which received payments pursuant to sections 298.018; 
147.15  298.225; 298.28, except an amount distributed under section 
147.16  298.28, subdivision 4, paragraph (c), clause (ii); 298.34 to 
147.17  298.39; 298.391 to 298.396; 298.405; and any law imposing a tax 
147.18  upon severed mineral values; or recognized revenue under section 
147.19  477A.15 must not include a portion of these aids in their 
147.20  permissible levies pursuant to those sections, but instead must 
147.21  reduce the permissible levies authorized by this chapter and 
147.22  chapters 120B, 122A, 123A, 123B, 124A, 124D, 125A, and 127A by 
147.23  the greater of the following: 
147.24     (a) an amount equal to 50 percent of the total dollar 
147.25  amount of the payments received pursuant to those sections or 
147.26  revenue recognized under section 477A.15 in the previous fiscal 
147.27  year; or 
147.28     (b) an amount equal to the total dollar amount of the 
147.29  payments received pursuant to those sections or revenue 
147.30  recognized under section 477A.15 in the previous fiscal year 
147.31  less the product of the same dollar amount of payments or 
147.32  revenue times five percent. 
147.33     For levy year 2002 only, 77 percent of the amounts 
147.34  distributed under section 298.225; 298.28 except an amount 
147.35  distributed under section 298.28, subdivision 4, paragraph (c), 
147.36  clause (ii); and 100 percent of the amounts distributed under 
148.1   sections 298.018; 298.34 to 298.39; 298.391 to 298.396; 298.405; 
148.2   and any law imposing a tax upon severed mineral values, or 
148.3   recognized revenue under section 477A.15 shall be used for 
148.4   purposes of the calculations under this paragraph. 
148.5      (3) The amount of any increased levy authorized by 
148.6   referendum pursuant to section 126C.17, subdivision 9, shall not 
148.7   be reduced pursuant to this subdivision.  The amount of any levy 
148.8   authorized by section 126C.43, to make payments for bonds issued 
148.9   and for interest thereon, shall not be reduced pursuant to this 
148.10  subdivision In no instance may this subdivision reduce the levy 
148.11  of a school district before application of this subdivision by 
148.12  greater than 75 percent.  
148.13     (4) Before computing the reduction pursuant to this 
148.14  subdivision of the health and safety levy authorized by sections 
148.15  123B.57 and 126C.40, subdivision 5, the commissioner shall 
148.16  ascertain from each affected school district the amount it 
148.17  proposes to levy under each section or subdivision.  The 
148.18  reduction shall be computed on the basis of the amount so 
148.19  ascertained. 
148.20     (5) Notwithstanding any law to the contrary, any amounts 
148.21  received by districts in any fiscal year pursuant to sections 
148.22  298.018; 298.34 to 298.39; 298.391 to 298.396; 298.405; or any 
148.23  law imposing a tax on severed mineral values; and not deducted 
148.24  from general education aid pursuant to section 126C.21, 
148.25  subdivision 4, clause (2), and not applied to reduce levies 
148.26  pursuant to this subdivision shall be paid by the district to 
148.27  the St. Louis county auditor in the following amount by March 15 
148.28  of each year, the amount required to be subtracted from the 
148.29  previous fiscal year's general education aid pursuant to section 
148.30  126C.21, subdivision 4, which is in excess of the general 
148.31  education aid earned for that fiscal year.  The county auditor 
148.32  shall deposit any amounts received pursuant to this clause in 
148.33  the St. Louis county treasury for purposes of paying the 
148.34  taconite homestead credit as provided in section 273.135 To the 
148.35  extent the levy reduction calculated under paragraph 2 exceeds 
148.36  the limitation in paragraph 3, an amount equal to the excess 
149.1   must be distributed from the school district's distribution 
149.2   under sections 298.225 and 298.28 in the following year to the 
149.3   cities and townships within the school district in the 
149.4   proportion that their taxable net tax capacity within the school 
149.5   district bears to the taxable net tax capacity of the school 
149.6   district for property taxes payable in the year prior to 
149.7   distribution.  No city or township shall receive a distribution 
149.8   greater than its levy for taxes payable in the year prior to 
149.9   distribution.  The commissioner of revenue shall certify the 
149.10  distributions of cities and towns under this paragraph to the 
149.11  county auditor by September 30 of the year preceding 
149.12  distribution.  The county auditor shall reduce the proposed and 
149.13  final levies of cities and towns receiving distributions by the 
149.14  amount of their distribution.  Distributions to the cities and 
149.15  towns shall be made at the times provided under section 298.27. 
149.16     Sec. 4.  [177.356] [TAX-SUBSIDIZED ENERGY PROJECTS.] 
149.17     Construction, erection, remodeling, or repair of an 
149.18  electric energy generating plant or other energy facility that 
149.19  is specifically identified by a law and granted special tax 
149.20  treatment by that law is a project as defined in section 177.42, 
149.21  subdivision 2.  A contract for such a project must comply with 
149.22  section 177.43. 
149.23     Sec. 5.  Minnesota Statutes 2001 Supplement, section 
149.24  272.02, subdivision 22, is amended to read: 
149.25     Subd. 22.  [WIND ENERGY CONVERSION SYSTEMS.] (a) Small 
149.26  scale wind energy conversion systems installed after January 1, 
149.27  1991, and used as an electric power source are exempt. 
149.28     "Small scale wind energy conversion systems" are wind 
149.29  energy conversion systems, as defined in section 216C.06, 
149.30  subdivision 12, including the foundation or support pad, which 
149.31  (i) are used as an electric power source; (ii) are located 
149.32  within one county and owned by the same owner; and (iii) produce 
149.33  two megawatts or less of electricity as measured by nameplate 
149.34  ratings. 
149.35     (b) Medium scale wind energy conversion systems installed 
149.36  after January 1, 1991, are treated as follows:  (i) the 
150.1   foundation and support pad are taxable; (ii) the associated 
150.2   supporting and protective structures are exempt for the first 
150.3   five assessment years after they have been constructed, and 
150.4   thereafter, 30 percent of the market value of the associated 
150.5   supporting and protective structures are taxable; and (iii) the 
150.6   turbines, blades, transformers, and its related equipment, are 
150.7   exempt.  "Medium scale wind energy conversion systems" are wind 
150.8   energy conversion systems as defined in section 216C.06, 
150.9   subdivision 12, including the foundation or support pad, which:  
150.10  (i) are used as an electric power source; (ii) are located 
150.11  within one county and owned by the same owner; and (iii) produce 
150.12  more than two but equal to or less than 12 megawatts of energy 
150.13  as measured by nameplate ratings. 
150.14     (c) Large scale wind energy conversion systems installed 
150.15  after January 1, 1991, are treated as follows:  25 percent of 
150.16  the market value of all property is taxable, including (i) the 
150.17  foundation and support pad; (ii) the associated supporting and 
150.18  protective structures; and (iii) the turbines, blades, 
150.19  transformers, and its related equipment.  "Large scale wind 
150.20  energy conversion systems" are wind energy conversion systems as 
150.21  defined in section 216C.06, subdivision 12, including the 
150.22  foundation or support pad, which (i) are used as an electric 
150.23  power source; and (ii) produce more than 12 megawatts of energy 
150.24  as measured by nameplate ratings. 
150.25     (d) The total size of a wind energy conversion system under 
150.26  this subdivision shall be determined according to this paragraph.
150.27  Unless the systems are interconnected with different 
150.28  distribution systems, the nameplate capacity of one wind energy 
150.29  conversion system shall be combined with the nameplate capacity 
150.30  of any other wind energy conversion system that is: 
150.31     (1) located within five miles of the wind energy conversion 
150.32  system; 
150.33     (2) constructed within the same calendar year as the wind 
150.34  energy conversion system; and 
150.35     (3) under common ownership.  
150.36     In the case of a dispute, the commissioner of commerce 
151.1   shall determine the total size of the system, and shall draw all 
151.2   reasonable inferences in favor of combining the systems. 
151.3      (e) In making a determination under paragraph (d), the 
151.4   commissioner of commerce may determine that two wind energy 
151.5   conversion systems are under common ownership when the 
151.6   underlying ownership structure contains similar persons or 
151.7   entities, even if the ownership shares differ between the two 
151.8   systems.  Wind energy conversion systems are not under common 
151.9   ownership solely because the same person or entity provided 
151.10  equity financing for the systems. 
151.11     All real and personal property of a wind energy conversion 
151.12  system as defined in section 272.029, subdivision 2, is exempt 
151.13  from property tax in lieu of payments received under section 
151.14  272.028 or 272.029, except the land on which it is located 
151.15  remains taxable. 
151.16     Sec. 6.  Minnesota Statutes 2000, section 272.02, 
151.17  subdivision 42, is amended to read: 
151.18     Subd. 42.  [PROPERTY LEASED TO SCHOOL DISTRICTS.] Property 
151.19  that is leased or rented to a school district is exempt from 
151.20  taxation if it meets the following requirements: 
151.21     (1) the lease must be for a period of at least 12 
151.22  consecutive months; 
151.23     (2) the terms of the lease must either: 
151.24     (i) require the school district to pay a nominal 
151.25  consideration for use of the building; or 
151.26     (ii) provide that the consideration that would otherwise be 
151.27  charged to the school district for lease or rental of the 
151.28  property, which must be no greater than market rent, will be 
151.29  reduced by an amount equal to the property tax foregone due to 
151.30  the exemption, as verified by the assessor.  The owner of the 
151.31  property must provide the information required by the assessor 
151.32  to verify these conditions; 
151.33     (3) the school district must use the property to provide 
151.34  direct instruction in any grade from kindergarten through grade 
151.35  12; special education for handicapped children; adult basic 
151.36  education as described in section 124D.52; preschool and early 
152.1   childhood family education; or community education programs, 
152.2   including provision of administrative services directly related 
152.3   to the educational program at that site; and 
152.4      (4) the lease must provide that the school district has the 
152.5   exclusive use of the property during the lease period. 
152.6      <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
152.7   payable in 2003 and thereafter. 
152.8      Sec. 7.  Minnesota Statutes 2000, section 272.02, is 
152.9   amended by adding a subdivision to read: 
152.10     Subd. 50.  [ELECTRIC GENERATION FACILITY PERSONAL 
152.11  PROPERTY.] Notwithstanding subdivision 9, clause (a), attached 
152.12  machinery and other personal property which is part of a 
152.13  combined cycle natural gas turbine electric generation facility 
152.14  of 43 megawatts of installed capacity and that meets the 
152.15  requirements of this subdivision is exempt.  At the time of 
152.16  construction, the facility must: 
152.17     (1) utilize a combined cycle gas turbine generator fueled 
152.18  by natural gas; 
152.19     (2) be connected to an existing 115-kilovolt high-voltage 
152.20  electric transmission line that is within one mile of the 
152.21  facility; 
152.22     (3) be located on an underground natural gas storage 
152.23  aquifer; 
152.24     (4) be designed as an intermediate load facility; and 
152.25     (5) have received, by resolution, the approval from the 
152.26  governing body of the county for the exemption of personal 
152.27  property under this subdivision. 
152.28     Construction of the facility must be commenced after 
152.29  January 1, 2002, and before January 1, 2004.  Property eligible 
152.30  for this exemption does not include electric transmission lines 
152.31  and interconnections or gas pipelines and interconnections 
152.32  appurtenant to the property or the facility. 
152.33     <h>[EFFECTIVE DATE.]</h> This section is effective for the 2002 
152.34  assessment and thereafter. 
152.35     Sec. 8.  Minnesota Statutes 2000, section 272.02, is 
152.36  amended by adding a subdivision to read: 
153.1      Subd. 51.  [ELECTRIC GENERATION FACILITY PERSONAL 
153.2   PROPERTY.] Notwithstanding subdivision 9, clause (a), attached 
153.3   machinery and other personal property which is part of a 
153.4   simple-cycle combustion-turbine electric generation facility of 
153.5   more than 40 megawatts and less than 50 megawatts of installed 
153.6   capacity and that meets the requirements of this subdivision is 
153.7   exempt.  At the time of construction, the facility must: 
153.8      (1) utilize natural gas as a primary fuel; 
153.9      (2) be located within two miles of parallel existing 
153.10  36-inch natural gas pipelines and an existing 115-kilovolt 
153.11  high-voltage electric transmission line; 
153.12     (3) be designed to provide peaking, emergency backup, or 
153.13  contingency services; and 
153.14     (4) satisfy a resource deficiency identified in an approved 
153.15  integrated resource plan filed under section 216B.2422. 
153.16     Construction of the facility must be commenced after 
153.17  January 1, 2001, and before January 1, 2005.  Property eligible 
153.18  for this exemption does not include electric transmission lines 
153.19  and interconnections or gas pipelines and interconnections 
153.20  appurtenant to the property or the facility. 
153.21     <h>[EFFECTIVE DATE.]</h> This section is effective for the 2002 
153.22  assessment and thereafter. 
153.23     Sec. 9.  Minnesota Statutes 2000, section 272.02, is 
153.24  amended by adding a subdivision to read: 
153.25     Subd. 52.  [ELECTRIC GENERATION FACILITY; PERSONAL 
153.26  PROPERTY.] Notwithstanding subdivision 9, clause (a), attached 
153.27  machinery and other personal property which is part of an 
153.28  electric generating facility that meets the requirements of this 
153.29  subdivision is exempt.  At the time of construction, the 
153.30  facility must be sited on an energy park that (i) is located on 
153.31  an active mining site, or on a former mining or industrial site 
153.32  where mining or industrial operations have terminated, (ii) is 
153.33  within a tax relief area as defined in section 273.134, (iii) 
153.34  has on-site access to existing railroad infrastructure, (iv) has 
153.35  direct rail access to a Great Lakes port, (v) has sufficient 
153.36  private water resources on site, and (vi) is designed to host at 
154.1   least 500 megawatts of electrical generation.  
154.2      Construction of the first 250 megawatts of the facility 
154.3   must be commenced after January 1, 2002, and before January 1, 
154.4   2005.  Construction of up to an additional 750 megawatts of 
154.5   generation must be commenced before January 1, 2010. 
154.6      <h>[EFFECTIVE DATE.]</h> This section is effective for assessment 
154.7   year 2003 and thereafter. 
154.8      Sec. 10.  Minnesota Statutes 2000, section 272.02, is 
154.9   amended by adding a subdivision to read: 
154.10     Subd. 53.  [SMALL BIOMASS ELECTRIC GENERATION FACILITY; 
154.11  PERSONAL PROPERTY.] Notwithstanding subdivision 9, clause (a), 
154.12  attached machinery and other personal property which is part of 
154.13  an electrical generating facility that meets the requirements of 
154.14  this subdivision is exempt.  At the time of construction the 
154.15  facility must: 
154.16     (1) have a generation capacity of less than 25 megawatts; 
154.17     (2) provide process heating needs in addition to electrical 
154.18  generation; and 
154.19     (3) utilize agricultural by-products from the malting 
154.20  process and other biomass fuels as its primary fuel source.  
154.21     Property eligible for this exemption does not include 
154.22  electric transmission lines and interconnections or gas 
154.23  pipelines and interconnections appurtenant to the property or 
154.24  facility. 
154.25     <h>[EFFECTIVE DATE.]</h> This section is effective for assessment 
154.26  year 2003, and thereafter. 
154.27     Sec. 11.  Minnesota Statutes 2000, section 272.02, is 
154.28  amended by adding a subdivision to read: 
154.29     Subd. 54.  [ELECTRIC GENERATION FACILITY PERSONAL 
154.30  PROPERTY.] Notwithstanding subdivision 9, clause (a), attached 
154.31  machinery and other personal property which is part of a 3.2 
154.32  megawatt run-of-the-river hydroelectric generation facility and 
154.33  that meets the requirements of this subdivision is exempt.  At 
154.34  the time of construction, the facility must: 
154.35     (1) utilize two turbine generators at a dam site existing 
154.36  on March 31, 1994; 
155.1      (2) be located on publicly owned land and within 2,500 feet 
155.2   of a 13.8 kilovolt distribution circuit; and 
155.3      (3) be eligible to receive a renewable energy production 
155.4   incentive payment under section 216C.41. 
155.5      Construction of the facility must be commenced after 
155.6   January 1, 2002, and before January 1, 2004.  Property eligible 
155.7   for this exemption does not include electric transmission lines 
155.8   and interconnections or gas pipelines and interconnections 
155.9   appurtenant to the property or the facility. 
155.10     <h>[EFFECTIVE DATE.]</h> This section is effective for the 2002 
155.11  assessment and thereafter. 
155.12     Sec. 12.  Minnesota Statutes 2001 Supplement, section 
155.13  272.028, is amended to read: 
155.14     272.028 [PAYMENT IN LIEU OF PERSONAL PROPERTY TAX; WIND 
155.15  GENERATION FACILITIES.] 
155.16     A developer of a new or existing medium or large scale wind 
155.17  energy conversion system, as defined under section 272.02, 
155.18  subdivision 22, paragraphs (b) and (c), 272.029, subdivision 2, 
155.19  may negotiate with the city or town and the county where the 
155.20  wind energy conversion system is located to establish a payment 
155.21  in lieu of tax on personal property used to generate electric 
155.22  power.  The in lieu payment is to provide fees or compensation 
155.23  to the host jurisdictions to maintain public infrastructure and 
155.24  services.  A host jurisdiction includes a city or town and the 
155.25  county in which a facility is located.  The payment in lieu of 
155.26  personal property tax may be based on production capacity, 
155.27  historical production, or other factors agreed upon by the 
155.28  parties.  The payment in lieu of tax agreement must be signed by 
155.29  the parties and filed with the commissioner of revenue and the 
155.30  county recorder.  Upon execution and filing of the agreement, 
155.31  the personal property to which the in lieu payment applies shall 
155.32  be deemed exempt from tax under section 272.02, subdivision 22, 
155.33  paragraphs (b) and (c).  This exemption shall be effective for 
155.34  the assessment year in which the in lieu payment is agreed upon 
155.35  and shall remain exempt for the same duration as the in lieu 
155.36  payments are in effect. 
156.1      Sec. 13.  [272.029] [WIND ENERGY PRODUCTION TAX.] 
156.2      Subdivision 1.  [PRODUCTION TAX.] A tax is imposed on the 
156.3   production of electricity from a wind energy conversion system 
156.4   installed after January 1, 1991, and that is used as an electric 
156.5   power source. 
156.6      Subd. 2.  [DEFINITIONS.] (a) For the purposes of this 
156.7   section, the term: 
156.8      (1) "wind energy conversion system" has the meaning given 
156.9   that term in section 216C.06, subdivision 12; 
156.10     (2) "large scale wind energy conversion system" means a 
156.11  wind energy conversion system of more than 12 megawatts, as 
156.12  measured by the nameplate capacity of the system or as combined 
156.13  with other systems as provided in paragraph (b); 
156.14     (3) "medium scale wind energy conversion system" means a 
156.15  wind energy conversion system of over 2 and not more than 12 
156.16  megawatts, as measured by the nameplate capacity of the system 
156.17  or as combined with other systems as provided in paragraph (b); 
156.18     (4) "small scale wind energy conversion system" means a 
156.19  wind energy conversion system of 2 megawatts and under, as 
156.20  measured by the nameplate capacity of the system or as combined 
156.21  with other systems as provided in paragraph (b). 
156.22     (b) For systems installed or contracted for after January 
156.23  1, 2002, the total size of a wind energy conversion system under 
156.24  this subdivision shall be determined according to this paragraph.
156.25  Unless the systems are interconnected with different 
156.26  distribution systems, the nameplate capacity of one wind energy 
156.27  conversion system shall be combined with the nameplate capacity 
156.28  of any other wind energy conversion system that is: 
156.29     (1) located within five miles of the wind energy conversion 
156.30  system; 
156.31     (2) constructed within the same calendar year as the wind 
156.32  energy conversion system; and 
156.33     (3) under common ownership.  
156.34     In the case of a dispute, the commissioner of commerce 
156.35  shall determine the total size of the system, and shall draw all 
156.36  reasonable inferences in favor of combining the systems. 
157.1      (c) In making a determination under paragraph (b), the 
157.2   commissioner of commerce may determine that two wind energy 
157.3   conversion systems are under common ownership when the 
157.4   underlying ownership structure contains similar persons or 
157.5   entities, even if the ownership shares differ between the two 
157.6   systems.  Wind energy conversion systems are not under common 
157.7   ownership solely because the same person or entity provided 
157.8   equity financing for the systems. 
157.9      Subd. 3.  [RATE OF TAX.] The owner of a wind energy 
157.10  conversion system shall pay a tax based on the following 
157.11  schedule: 
157.12     (1) for a large scale wind energy conversion system, .12 
157.13  cents per kilowatt-hour of electricity produced by the system; 
157.14  and 
157.15     (2) for a medium scale wind energy conversion system, .036 
157.16  cents per kilowatt-hour of electricity produced by the system; 
157.17  and 
157.18     (3) for a small scale wind energy conversion system of 2 
157.19  megawatts or less, but greater than .25 megawatts capacity, .012 
157.20  cents per kilowatt-hour of electricity produced by the system; 
157.21  and 
157.22     (4) small scale wind energy conversion systems with the 
157.23  capacity of .25 megawatts or less, and small scale wind energy 
157.24  conversion systems with a capacity of less than two megawatts 
157.25  that are owned by a political subdivision, are exempt from the 
157.26  wind energy production tax. 
157.27     Subd. 4.  [REPORTS.] An owner of a wind energy conversion 
157.28  system subject to tax under subdivision 3 shall file a report 
157.29  with the commissioner of revenue annually on or before March 1 
157.30  detailing the amount of electricity in kilowatt-hours that was 
157.31  produced by the wind energy conversion system for the previous 
157.32  calendar year.  The commissioner shall prescribe the form of the 
157.33  report.  The report must contain the information required by the 
157.34  commissioner to determine the tax due to each county under this 
157.35  subdivision for the current year.  If an owner of a wind energy 
157.36  conversion system subject to taxation under subdivision 3 fails 
158.1   to file the report by the due date, the commissioner of revenue 
158.2   shall determine the tax based upon the nameplate capacity of the 
158.3   system multiplied by a capacity factor of 40 percent. 
158.4      On or before March 31, the commissioner of revenue shall 
158.5   notify the owner of the wind energy conversion systems of the 
158.6   tax due to each county for the current year and shall certify to 
158.7   the county auditor of each county in which the systems are 
158.8   located the tax due from each owner for the current year. 
158.9      Subd. 5.  [PAYMENT OF TAX; COLLECTION.] The amount of 
158.10  production tax determined under subdivision 4 must be paid to 
158.11  the county treasurer at the time and in the manner provided for 
158.12  payment of property taxes under section 277.01, subdivision 3, 
158.13  and, if unpaid, are subject to the same enforcement, collection, 
158.14  and interest and penalties as delinquent personal property 
158.15  taxes.  Except to the extent inconsistent with this section, the 
158.16  provisions of section 277.01 to 277.24 and 278.01 to 278.13 
158.17  apply to the taxes imposed under this section, and for purposes 
158.18  of those provisions the taxes imposed under this section are 
158.19  considered personal property taxes. 
158.20     Subd. 6.  [DISTRIBUTION OF REVENUES.] Revenues from the 
158.21  taxes imposed under subdivision 5 must be part of the settlement 
158.22  between the county treasurer and the county auditor under 
158.23  section 276.09.  The revenue must be distributed by the county 
158.24  auditor and the county treasurer to all taxing jurisdictions in 
158.25  which the wind energy conversion system is located, in the same 
158.26  proportion that each of the taxing jurisdiction's current year's 
158.27  net tax capacity based tax rate is to the current year's total 
158.28  net tax capacity based rate. 
158.29     Subd. 7.  [ALTERNATIVE PAYMENT FOR CURRENT 
158.30  FACILITIES.] Prior to December 31, 2002, facilities installed or 
158.31  contracted for before January 1, 2002, may negotiate a payment 
158.32  in lieu of wind energy production tax pursuant to section 
158.33  272.028.  Any wind energy conversion systems installed or 
158.34  contracted for between January 1, 1991, and January 1, 2002, for 
158.35  which an agreement is executed pursuant to section 272.028 is 
158.36  exempt from the wind energy production tax established in this 
159.1   section. 
159.2      <h>[EFFECTIVE DATE.]</h> This section is effective for all energy 
159.3   produced by wind energy conversion systems as of January 1, 2003.
159.4      Sec. 14.  Minnesota Statutes 2000, section 273.11, 
159.5   subdivision 16, is amended to read: 
159.6      Subd. 16.  [VALUATION EXCLUSION FOR CERTAIN IMPROVEMENTS.] 
159.7   Improvements to homestead property made before January 2, 
159.8   2003 2013, shall be fully or partially excluded from the value 
159.9   of the property for assessment purposes provided that (1) the 
159.10  house is at least 45 years old at the time of the improvement 
159.11  and (2) the assessor's estimated market value of the house on 
159.12  January 2 of the current year is equal to or less than $400,000. 
159.13     For purposes of determining this eligibility, "house" means 
159.14  land and buildings.  
159.15     The age of a residence is the number of years since the 
159.16  original year of its construction.  In the case of a residence 
159.17  that is relocated, the relocation must be from a location within 
159.18  the state and the only improvements eligible for exclusion under 
159.19  this subdivision are (1) those for which building permits were 
159.20  issued to the homeowner after the residence was relocated to its 
159.21  present site, and (2) those undertaken during or after the year 
159.22  the residence is initially occupied by the homeowner, excluding 
159.23  any market value increase relating to basic improvements that 
159.24  are necessary to install the residence on its foundation and 
159.25  connect it to utilities at its present site.  In the case of an 
159.26  owner-occupied duplex or triplex, the improvement is eligible 
159.27  regardless of which portion of the property was improved. 
159.28     If the property lies in a jurisdiction which is subject to 
159.29  a building permit process, a building permit must have been 
159.30  issued prior to commencement of the improvement.  The 
159.31  improvements for a single project or in any one year must add at 
159.32  least $5,000 to the value of the property to be eligible for 
159.33  exclusion under this subdivision.  Only improvements to the 
159.34  structure which is the residence of the qualifying homesteader 
159.35  or construction of or improvements to no more than one two-car 
159.36  garage per residence qualify for the provisions of this 
160.1   subdivision.  If an improvement was begun between January 2, 
160.2   1992, and January 2, 1993, any value added from that improvement 
160.3   for the January 1994 and subsequent assessments shall qualify 
160.4   for exclusion under this subdivision provided that a building 
160.5   permit was obtained for the improvement between January 2, 1992, 
160.6   and January 2, 1993.  Whenever a building permit is issued for 
160.7   property currently classified as homestead, the issuing 
160.8   jurisdiction shall notify the property owner of the possibility 
160.9   of valuation exclusion under this subdivision.  The assessor 
160.10  shall require an application, including documentation of the age 
160.11  of the house from the owner, if unknown by the assessor.  The 
160.12  application may be filed subsequent to the date of the building 
160.13  permit provided that the application must be filed within three 
160.14  years of the date the building permit was issued for the 
160.15  improvement.  If the property lies in a jurisdiction which is 
160.16  not subject to a building permit process, the application must 
160.17  be filed within three years of the date the improvement was 
160.18  made.  The assessor may require proof from the taxpayer of the 
160.19  date the improvement was made.  Applications must be received 
160.20  prior to July 1 of any year in order to be effective for taxes 
160.21  payable in the following year. 
160.22     No exclusion for an improvement may be granted by a local 
160.23  board of review or county board of equalization, and no 
160.24  abatement of the taxes for qualifying improvements may be 
160.25  granted by the county board unless (1) a building permit was 
160.26  issued prior to the commencement of the improvement if the 
160.27  jurisdiction requires a building permit, and (2) an application 
160.28  was completed. 
160.29     The assessor shall note the qualifying value of each 
160.30  improvement on the property's record, and the sum of those 
160.31  amounts shall be subtracted from the value of the property in 
160.32  each year for ten years after the improvement has been made.  
160.33  After ten years the amount of the qualifying value shall be 
160.34  added back as follows: 
160.35     (1) 50 percent in the two subsequent assessment years if 
160.36  the qualifying value is equal to or less than $10,000 market 
161.1   value; or 
161.2      (2) 20 percent in the five subsequent assessment years if 
161.3   the qualifying value is greater than $10,000 market value. 
161.4   If an application is filed after the first assessment date at 
161.5   which an improvement could have been subject to the valuation 
161.6   exclusion under this subdivision, the ten-year period during 
161.7   which the value is subject to exclusion is reduced by the number 
161.8   of years that have elapsed since the property would have 
161.9   qualified initially.  The valuation exclusion shall terminate 
161.10  whenever (1) the property is sold, or (2) the property is 
161.11  reclassified to a class which does not qualify for treatment 
161.12  under this subdivision.  Improvements made by an occupant who is 
161.13  the purchaser of the property under a conditional purchase 
161.14  contract do not qualify under this subdivision unless the seller 
161.15  of the property is a governmental entity.  The qualifying value 
161.16  of the property shall be computed based upon the increase from 
161.17  that structure's market value as of January 2 preceding the 
161.18  acquisition of the property by the governmental entity. 
161.19     The total qualifying value for a homestead may not exceed 
161.20  $50,000.  The total qualifying value for a homestead with a 
161.21  house that is less than 70 years old may not exceed $25,000.  
161.22  The term "qualifying value" means the increase in estimated 
161.23  market value resulting from the improvement if the improvement 
161.24  occurs when the house is at least 70 years old, or one-half of 
161.25  the increase in estimated market value resulting from the 
161.26  improvement otherwise.  The $25,000 and $50,000 maximum 
161.27  qualifying value under this subdivision may result from multiple 
161.28  improvements to the homestead.  
161.29     If 50 percent or more of the square footage of a structure 
161.30  is voluntarily razed or removed, the valuation increase 
161.31  attributable to any subsequent improvements to the remaining 
161.32  structure does not qualify for the exclusion under this 
161.33  subdivision.  If a structure is unintentionally or accidentally 
161.34  destroyed by a natural disaster, the property is eligible for an 
161.35  exclusion under this subdivision provided that the structure was 
161.36  not completely destroyed.  The qualifying value on property 
162.1   destroyed by a natural disaster shall be computed based upon the 
162.2   increase from that structure's market value as determined on 
162.3   January 2 of the year in which the disaster occurred.  A 
162.4   property receiving benefits under the homestead disaster 
162.5   provisions under section 273.123 is not disqualified from 
162.6   receiving an exclusion under this subdivision.  If any 
162.7   combination of improvements made to a structure after January 1, 
162.8   1993, increases the size of the structure by 100 percent or 
162.9   more, the valuation increase attributable to the portion of the 
162.10  improvement that causes the structure's size to exceed 100 
162.11  percent does not qualify for exclusion under this subdivision. 
162.12     Sec. 15.  Minnesota Statutes 2000, section 273.11, is 
162.13  amended by adding a subdivision to read: 
162.14     Subd. 20.  [VALUATION OF CLASS 4D CERTIFIED PROPERTY.] In 
162.15  determining the market value of class 4d rental property 
162.16  certified under section 462A.071, the assessor shall reduce the 
162.17  value of the property by its restricted use value.  "Restricted 
162.18  use value" is the amount of market value reduction that results 
162.19  from the restrictions on uses that qualify the property for 
162.20  certification as class 4d under section 273.13, subdivision 25, 
162.21  paragraph (e).  The assessor shall determine the restricted use 
162.22  value of the property using guidelines set by the commissioner 
162.23  of revenue. 
162.24     <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
162.25  levied in 2003, payable in 2004, and thereafter. 
162.26     Sec. 16.  Minnesota Statutes 2001 Supplement, section 
162.27  273.124, subdivision 11, is amended to read: 
162.28     Subd. 11.  [LIMITATION ON HOMESTEAD REDUCTIONS.] If the 
162.29  assessor has classified a property as both homestead and 
162.30  nonhomestead, the greater of (1) the value attributable to the 
162.31  portion of the property classified as class 1 or class 2a; or 
162.32  (2) $76,000, is entitled to assessment as a homestead under 
162.33  section 273.13, subdivision 22 or 23.  The limitation in this 
162.34  subdivision does not apply to buildings containing fewer than 
162.35  four residential units or to a single rented or leased dwelling 
162.36  unit located within or attached to a private garage or similar 
163.1   structure owned by the owner of a homestead and located on the 
163.2   premises of that homestead.  Treatment of property under this 
163.3   paragraph terminates when (1) the property is sold or (2) the 
163.4   property is no longer used for homestead purposes by the person 
163.5   homesteading it for taxes payable in 2001. 
163.6      If the assessor has classified a property as both homestead 
163.7   and nonhomestead, the reductions in tax provided under sections 
163.8   273.135 and 273.1391 apply to the value of both the homestead 
163.9   and the nonhomestead portions of the property. 
163.10     <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
163.11  levied in 2002, payable in 2003, and thereafter. 
163.12     Sec. 17.  Minnesota Statutes 2001 Supplement, section 
163.13  273.13, subdivision 22, is amended to read: 
163.14     Subd. 22.  [CLASS 1.] (a) Except as provided in subdivision 
163.15  23 and in paragraphs (b) and (c), real estate which is 
163.16  residential and used for homestead purposes is class 1a.  The 
163.17  market value of class 1a property must be determined based upon 
163.18  the value of the house, garage, and land.  
163.19     The first $500,000 of market value of class 1a property has 
163.20  a net class rate of one percent of its market value; and the 
163.21  market value of class 1a property that exceeds $500,000 has a 
163.22  class rate of 1.25 percent of its market value. 
163.23     (b) Class 1b property includes homestead real estate or 
163.24  homestead manufactured homes used for the purposes of a 
163.25  homestead by 
163.26     (1) any blind person, or the blind person and the blind 
163.27  person's spouse; or 
163.28     (2) any person, hereinafter referred to as "veteran," who: 
163.29     (i) served in the active military or naval service of the 
163.30  United States; and 
163.31     (ii) is entitled to compensation under the laws and 
163.32  regulations of the United States for permanent and total 
163.33  service-connected disability due to the loss, or loss of use, by 
163.34  reason of amputation, ankylosis, progressive muscular 
163.35  dystrophies, or paralysis, of both lower extremities, such as to 
163.36  preclude motion without the aid of braces, crutches, canes, or a 
164.1   wheelchair; and 
164.2      (iii) has acquired a special housing unit with special 
164.3   fixtures or movable facilities made necessary by the nature of 
164.4   the veteran's disability, or the surviving spouse of the 
164.5   deceased veteran for as long as the surviving spouse retains the 
164.6   special housing unit as a homestead; or 
164.7      (3) any person who: 
164.8      (i) is permanently and totally disabled and 
164.9      (ii) receives 90 percent or more of total household income, 
164.10  as defined in section 290A.03, subdivision 5, from 
164.11     (A) aid from any state as a result of that disability; or 
164.12     (B) supplemental security income for the disabled; or 
164.13     (C) workers' compensation based on a finding of total and 
164.14  permanent disability; or 
164.15     (D) social security disability, including the amount of a 
164.16  disability insurance benefit which is converted to an old age 
164.17  insurance benefit and any subsequent cost of living increases; 
164.18  or 
164.19     (E) aid under the federal Railroad Retirement Act of 1937, 
164.20  United States Code Annotated, title 45, section 228b(a)5; or 
164.21     (F) a pension from any local government retirement fund 
164.22  located in the state of Minnesota as a result of that 
164.23  disability; or 
164.24     (G) pension, annuity, or other income paid as a result of 
164.25  that disability from a private pension or disability plan, 
164.26  including employer, employee, union, and insurance plans and 
164.27     (iii) has household income as defined in section 290A.03, 
164.28  subdivision 5, of $50,000 or less; or 
164.29     (4) any person who is permanently and totally disabled and 
164.30  whose household income as defined in section 290A.03, 
164.31  subdivision 5, is 275 percent or less of the federal poverty 
164.32  level. 
164.33     Property is classified and assessed under clause (4) only 
164.34  if the government agency or income-providing source certifies, 
164.35  upon the request of the homestead occupant, that the homestead 
164.36  occupant satisfies the disability requirements of this paragraph.
165.1      Property is classified and assessed pursuant to clause (1) 
165.2   only if the commissioner of economic security certifies to the 
165.3   assessor that the homestead occupant satisfies the requirements 
165.4   of this paragraph.  
165.5      Permanently and totally disabled for the purpose of this 
165.6   subdivision means a condition which is permanent in nature and 
165.7   totally incapacitates the person from working at an occupation 
165.8   which brings the person an income.  The first $32,000 market 
165.9   value of class 1b property has a net class rate of .45 percent 
165.10  of its market value.  The remaining market value of class 1b 
165.11  property has a class rate using the rates for class 1a or class 
165.12  2a property, whichever is appropriate, of similar market value.  
165.13     (c) Class 1c property is commercial use real property that 
165.14  abuts a lakeshore line and is devoted to temporary and seasonal 
165.15  residential occupancy for recreational purposes but not devoted 
165.16  to commercial purposes for more than 250 days in the year 
165.17  preceding the year of assessment, and that includes a portion 
165.18  used as a homestead by the owner, which includes a dwelling 
165.19  occupied as a homestead by a shareholder of a corporation that 
165.20  owns the resort or a partner in a partnership that owns the 
165.21  resort, even if the title to the homestead is held by the 
165.22  corporation or partnership.  For purposes of this clause, 
165.23  property is devoted to a commercial purpose on a specific day if 
165.24  any portion of the property, excluding the portion used 
165.25  exclusively as a homestead, is used for residential occupancy 
165.26  and a fee is charged for residential occupancy.  The first 
165.27  $500,000 of market value of class 1c property has a class rate 
165.28  of one percent, and the remaining market value of class 1c 
165.29  property has a class rate of one percent, with the following 
165.30  limitation:  the area of the property must not exceed 100 feet 
165.31  of lakeshore footage for each cabin or campsite located on the 
165.32  property up to a total of 800 feet and 500 feet in depth, 
165.33  measured away from the lakeshore.  If any portion of the class 
165.34  1c resort property is classified as class 4c under subdivision 
165.35  25, the entire property must meet the requirements of 
165.36  subdivision 25, paragraph (d), clause (1), to qualify for class 
166.1   1c treatment under this paragraph. 
166.2      (d) Class 1d property includes structures that meet all of 
166.3   the following criteria: 
166.4      (1) the structure is located on property that is classified 
166.5   as agricultural property under section 273.13, subdivision 23; 
166.6      (2) the structure is occupied exclusively by seasonal farm 
166.7   workers during the time when they work on that farm, and the 
166.8   occupants are not charged rent for the privilege of occupying 
166.9   the property, provided that use of the structure for storage of 
166.10  farm equipment and produce does not disqualify the property from 
166.11  classification under this paragraph; 
166.12     (3) the structure meets all applicable health and safety 
166.13  requirements for the appropriate season; and 
166.14     (4) the structure is not salable as residential property 
166.15  because it does not comply with local ordinances relating to 
166.16  location in relation to streets or roads. 
166.17     The market value of class 1d property has the same class 
166.18  rates as class 1a property under paragraph (a). 
166.19     (e) Class 1e includes property used as a bed and breakfast 
166.20  lodging facility.  As used in this subdivision, a "bed and 
166.21  breakfast lodging facility" means property that: 
166.22     (1) provides rooms for rent to guests who are staying for a 
166.23  continuous period of less than 30 days; 
166.24     (2) is located on the same parcel as the homestead of the 
166.25  owner or a parcel contiguous to the parcel on which the 
166.26  homestead of the owner is located; 
166.27     (3) does not include a facility at which meals are 
166.28  regularly provided to the public, other than meals served to 
166.29  persons who rent rooms, or meals provided at special events 
166.30  which must be conducted at no more than 12 times each year; and 
166.31     (4) is zoned as residential property. 
166.32     The market value of class 1e property has the same class 
166.33  rates as class 1a property under paragraph (a). 
166.34     <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
166.35  payable in 2003 and thereafter. 
166.36     Sec. 18.  Minnesota Statutes 2001 Supplement, section 
167.1   273.1384, subdivision 2, is amended to read: 
167.2      Subd. 2.  [AGRICULTURAL HOMESTEAD MARKET VALUE CREDIT.] 
167.3   Property classified as class 2a agricultural homestead is 
167.4   eligible for an agricultural credit.  The credit is equal to 0.2 
167.5   0.3 percent of the first $115,000 of the property's market 
167.6   value.  The credit under this subdivision is limited 
167.7   to $230 $345 for each homestead. 
167.8      <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
167.9   payable in 2003 and thereafter. 
167.10     Sec. 19.  Minnesota Statutes 2000, section 273.1398, 
167.11  subdivision 3, is amended to read: 
167.12     Subd. 3.  [DISPARITY REDUCTION AID.] For taxes payable 
167.13  in 1995 2003, and subsequent years, the amount of disparity aid 
167.14  certified for each taxing district within each unique taxing 
167.15  jurisdiction for taxes payable in the prior year shall be 
167.16  multiplied by the ratio of (1) the jurisdiction's tax capacity 
167.17  using the class rates for taxes payable in the year for which 
167.18  aid is being computed, to (2) its tax capacity using the class 
167.19  rates for taxes payable in the year prior to that for which aid 
167.20  is being computed, both based upon market values for taxes 
167.21  payable in the year prior to that for which aid is being 
167.22  computed.  For the purposes of this aid determination, disparity 
167.23  reduction aid certified for taxes payable in the prior year for 
167.24  a taxing entity other than a town or school district is deemed 
167.25  to be county government disparity reduction aid.  For taxes 
167.26  payable in 1992 and subsequent years, shall equal 87 percent of 
167.27  its disparity reduction aid for taxes payable in 2001.  The 
167.28  amount of disparity aid certified to each taxing jurisdiction 
167.29  shall be reduced by any reductions required in the current year 
167.30  or permanent reductions required in previous years under section 
167.31  477A.0132. 
167.32     Sec. 20.  Minnesota Statutes 2001 Supplement, section 
167.33  275.025, subdivision 2, is amended to read: 
167.34     Subd. 2.  [COMMERCIAL-INDUSTRIAL TAX CAPACITY.] For the 
167.35  purposes of this section, "commercial-industrial tax capacity" 
167.36  means the tax capacity of all taxable property classified as 
168.1   class 3 or class 5(1) under section 273.13, except for 25 
168.2   percent of the value of electric generation attached machinery 
168.3   under class 3 and all property described in section 473.625.  
168.4   County commercial-industrial tax capacity amounts are not 
168.5   adjusted for the captured net tax capacity of a tax increment 
168.6   financing district under section 469.177, subdivision 2, the net 
168.7   tax capacity of transmission lines deducted from a local 
168.8   government's total net tax capacity under section 273.425, or 
168.9   fiscal disparities contribution and distribution net tax 
168.10  capacities under chapter 276A or 473F. 
168.11     <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
168.12  payable in 2003 and thereafter. 
168.13     Sec. 21.  Minnesota Statutes 2001 Supplement, section 
168.14  275.065, subdivision 3, is amended to read: 
168.15     Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
168.16  county auditor shall prepare and the county treasurer shall 
168.17  deliver after November 10 and on or before November 24 each 
168.18  year, by first class mail to each taxpayer at the address listed 
168.19  on the county's current year's assessment roll, a notice of 
168.20  proposed property taxes.  
168.21     (b) The commissioner of revenue shall prescribe the form of 
168.22  the notice. 
168.23     (c) The notice must inform taxpayers that it contains the 
168.24  amount of property taxes each taxing authority proposes to 
168.25  collect for taxes payable the following year.  In the case of a 
168.26  town, or in the case of the state determined portion of the 
168.27  school district levy, the final tax amount will be its proposed 
168.28  tax.  In the case of taxing authorities required to hold a 
168.29  public meeting under subdivision 6, the notice must clearly 
168.30  state that each taxing authority, including regional library 
168.31  districts established under section 134.201, and including the 
168.32  metropolitan taxing districts as defined in paragraph (i), but 
168.33  excluding all other special taxing districts and towns, will 
168.34  hold a public meeting to receive public testimony on the 
168.35  proposed budget and proposed or final property tax levy, or, in 
168.36  case of a school district, on the current budget and proposed 
169.1   property tax levy.  It must clearly state the time and place of 
169.2   each taxing authority's meeting, a telephone number for the 
169.3   taxing authority that taxpayers may call if they have questions 
169.4   related to the notice, and an address where comments will be 
169.5   received by mail.  
169.6      (d) The notice must state for each parcel: 
169.7      (1) the market value of the property as determined under 
169.8   section 273.11, and used for computing property taxes payable in 
169.9   the following year and for taxes payable in the current year as 
169.10  each appears in the records of the county assessor on November 1 
169.11  of the current year; and, in the case of residential property, 
169.12  whether the property is classified as homestead or 
169.13  nonhomestead.  The notice must clearly inform taxpayers of the 
169.14  years to which the market values apply and that the values are 
169.15  final values; 
169.16     (2) the items listed below, shown separately by county, 
169.17  city or town, state determined school tax net of the education 
169.18  homestead credit under section 273.1382, voter approved school 
169.19  levy, other local school levy, and the sum of the special taxing 
169.20  districts, and as a total of all taxing authorities:  
169.21     (i) the actual tax for taxes payable in the current year; 
169.22     (ii) the tax change due to spending factors, defined as the 
169.23  proposed tax minus the constant spending tax amount; 
169.24     (iii) the tax change due to other factors, defined as the 
169.25  constant spending tax amount minus the actual current year tax; 
169.26  and 
169.27     (iv) the proposed tax amount. 
169.28     In the case of a town or the state determined school tax, 
169.29  the final tax shall also be its proposed tax unless the town 
169.30  changes its levy at a special town meeting under section 
169.31  365.52.  If a school district has certified under section 
169.32  126C.17, subdivision 9, that a referendum will be held in the 
169.33  school district at the November general election, the county 
169.34  auditor must note next to the school district's proposed amount 
169.35  that a referendum is pending and that, if approved by the 
169.36  voters, the tax amount may be higher than shown on the notice.  
170.1   In the case of the city of Minneapolis, the levy for the 
170.2   Minneapolis library board and the levy for Minneapolis park and 
170.3   recreation shall be listed separately from the remaining amount 
170.4   of the city's levy.  In the case of the city of St. Paul, the 
170.5   levy for the St. Paul library agency shall be listed separately 
170.6   from the remaining amount of the city's levy.  In the case of a 
170.7   parcel where tax increment or the fiscal disparities areawide 
170.8   tax under chapter 276A or 473F applies, the proposed tax levy on 
170.9   the captured value or the proposed tax levy on the tax capacity 
170.10  subject to the areawide tax must each be stated separately and 
170.11  not included in the sum of the special taxing districts; and 
170.12     (3) the increase or decrease between the total taxes 
170.13  payable in the current year and the total proposed taxes, 
170.14  expressed as a percentage. 
170.15     For purposes of this section, the amount of the tax on 
170.16  homesteads qualifying under the senior citizens' property tax 
170.17  deferral program under chapter 290B is the total amount of 
170.18  property tax before subtraction of the deferred property tax 
170.19  amount. 
170.20     (e) The notice must clearly state that the proposed or 
170.21  final taxes do not include the following: 
170.22     (1) special assessments; 
170.23     (2) levies approved by the voters after the date the 
170.24  proposed taxes are certified, including bond referenda, school 
170.25  district levy referenda, and levy limit increase referenda; 
170.26     (3) amounts necessary to pay cleanup or other costs due to 
170.27  a natural disaster occurring after the date the proposed taxes 
170.28  are certified; 
170.29     (4) amounts necessary to pay tort judgments against the 
170.30  taxing authority that become final after the date the proposed 
170.31  taxes are certified; and 
170.32     (5) the contamination tax imposed on properties which 
170.33  received market value reductions for contamination. 
170.34     (f) Except as provided in subdivision 7, failure of the 
170.35  county auditor to prepare or the county treasurer to deliver the 
170.36  notice as required in this section does not invalidate the 
171.1   proposed or final tax levy or the taxes payable pursuant to the 
171.2   tax levy. 
171.3      (g) If the notice the taxpayer receives under this section 
171.4   lists the property as nonhomestead, and satisfactory 
171.5   documentation is provided to the county assessor by the 
171.6   applicable deadline, and the property qualifies for the 
171.7   homestead classification in that assessment year, the assessor 
171.8   shall reclassify the property to homestead for taxes payable in 
171.9   the following year. 
171.10     (h) In the case of class 4 residential property used as a 
171.11  residence for lease or rental periods of 30 days or more, the 
171.12  taxpayer must either: 
171.13     (1) mail or deliver a copy of the notice of proposed 
171.14  property taxes to each tenant, renter, or lessee; or 
171.15     (2) post a copy of the notice in a conspicuous place on the 
171.16  premises of the property.  
171.17     The notice must be mailed or posted by the taxpayer by 
171.18  November 27 or within three days of receipt of the notice, 
171.19  whichever is later.  A taxpayer may notify the county treasurer 
171.20  of the address of the taxpayer, agent, caretaker, or manager of 
171.21  the premises to which the notice must be mailed in order to 
171.22  fulfill the requirements of this paragraph. 
171.23     (i) For purposes of this subdivision, subdivisions 5a and 
171.24  6, "metropolitan special taxing districts" means the following 
171.25  taxing districts in the seven-county metropolitan area that levy 
171.26  a property tax for any of the specified purposes listed below: 
171.27     (1) metropolitan council under section 473.132, 473.167, 
171.28  473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 
171.29     (2) metropolitan airports commission under section 473.667, 
171.30  473.671, or 473.672; and 
171.31     (3) metropolitan mosquito control commission under section 
171.32  473.711. 
171.33     For purposes of this section, any levies made by the 
171.34  regional rail authorities in the county of Anoka, Carver, 
171.35  Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
171.36  398A shall be included with the appropriate county's levy and 
172.1   shall be discussed at that county's public hearing. 
172.2      (j) If a statutory or home rule charter city or a town has 
172.3   exercised the local levy option provided by section 473.388, 
172.4   subdivision 7, it may include in the notice of its proposed 
172.5   taxes the amount of its proposed taxes attributable to its 
172.6   exercise of the option.  In the first year of the city or town's 
172.7   exercise of this option, the statement shall include an estimate 
172.8   of the reduction of the metropolitan council's tax on the parcel 
172.9   due to exercise of that option.  The metropolitan council's levy 
172.10  shall be adjusted accordingly. 
172.11     Sec. 22.  Minnesota Statutes 2000, section 275.08, 
172.12  subdivision 1d, is amended to read: 
172.13     Subd. 1d.  [ADDITIONAL ADJUSTMENT.] If, after computing 
172.14  each local government's adjusted local tax rate within a unique 
172.15  taxing jurisdiction pursuant to subdivision 1c, the auditor 
172.16  finds that the total adjusted local tax rate of all local 
172.17  governments combined is less than 90 percent of gross tax 
172.18  capacity for taxes payable in 1989 and 90 50 percent of net tax 
172.19  capacity for taxes payable in 1990 2003 and thereafter, the 
172.20  auditor shall increase each local government's adjusted local 
172.21  tax rate proportionately so the total adjusted local tax rate of 
172.22  all local governments combined equals 90 50 percent.  The total 
172.23  amount of the increase in tax resulting from the increased local 
172.24  tax rates must not exceed the amount of disparity aid allocated 
172.25  to the unique taxing district under section 273.1398.  The 
172.26  auditor shall certify to the department of revenue the 
172.27  difference between the disparity aid originally allocated under 
172.28  section 273.1398, subdivision 3, and the amount necessary to 
172.29  reduce the total adjusted local tax rate of all local 
172.30  governments combined to 90 50 percent.  Each local government's 
172.31  disparity reduction aid payment under section 273.1398, 
172.32  subdivision 6, must be reduced accordingly. 
172.33     Sec. 23.  Minnesota Statutes 2001 Supplement, section 
172.34  275.70, subdivision 5, is amended to read: 
172.35     Subd. 5.  [SPECIAL LEVIES.] "Special levies" means those 
172.36  portions of ad valorem taxes levied by a local governmental unit 
173.1   for the following purposes or in the following manner: 
173.2      (1) to pay the costs of the principal and interest on 
173.3   bonded indebtedness or to reimburse for the amount of liquor 
173.4   store revenues used to pay the principal and interest due on 
173.5   municipal liquor store bonds in the year preceding the year for 
173.6   which the levy limit is calculated; 
173.7      (2) to pay the costs of principal and interest on 
173.8   certificates of indebtedness issued for any corporate purpose 
173.9   except for the following: 
173.10     (i) tax anticipation or aid anticipation certificates of 
173.11  indebtedness; 
173.12     (ii) certificates of indebtedness issued under sections 
173.13  298.28 and 298.282; 
173.14     (iii) certificates of indebtedness used to fund current 
173.15  expenses or to pay the costs of extraordinary expenditures that 
173.16  result from a public emergency; or 
173.17     (iv) certificates of indebtedness used to fund an 
173.18  insufficiency in tax receipts or an insufficiency in other 
173.19  revenue sources; 
173.20     (3) to provide for the bonded indebtedness portion of 
173.21  payments made to another political subdivision of the state of 
173.22  Minnesota; 
173.23     (4) to fund payments made to the Minnesota state armory 
173.24  building commission under section 193.145, subdivision 2, to 
173.25  retire the principal and interest on armory construction bonds; 
173.26     (5) property taxes approved by voters which are levied 
173.27  against the referendum market value as provided under section 
173.28  275.61; 
173.29     (6) to fund matching requirements needed to qualify for 
173.30  federal or state grants or programs to the extent that either 
173.31  (i) the matching requirement exceeds the matching requirement in 
173.32  calendar year 2001, or (ii) it is a new matching requirement 
173.33  that didn't exist prior to 2002; 
173.34     (7) to pay the expenses reasonably and necessarily incurred 
173.35  in preparing for or repairing the effects of natural disaster 
173.36  including the occurrence or threat of widespread or severe 
174.1   damage, injury, or loss of life or property resulting from 
174.2   natural causes, in accordance with standards formulated by the 
174.3   emergency services division of the state department of public 
174.4   safety, as allowed by the commissioner of revenue under section 
174.5   275.74, paragraph (b); 
174.6      (8) pay amounts required to correct an error in the levy 
174.7   certified to the county auditor by a city or county in a levy 
174.8   year, but only to the extent that when added to the preceding 
174.9   year's levy it is not in excess of an applicable statutory, 
174.10  special law or charter limitation, or the limitation imposed on 
174.11  the governmental subdivision by sections 275.70 to 275.74 in the 
174.12  preceding levy year; 
174.13     (9) to pay an abatement under section 469.1815; 
174.14     (10) to pay any costs attributable to increases in the 
174.15  employer contribution rates under chapter 353 that are effective 
174.16  after June 30, 2001; 
174.17     (11) to pay the operating or maintenance costs of a county 
174.18  jail as authorized in section 641.01 or 641.262, or of a 
174.19  correctional facility as defined in section 241.021, subdivision 
174.20  1, paragraph (5), to the extent that the county can demonstrate 
174.21  to the commissioner of revenue that the amount has been included 
174.22  in the county budget as a direct result of a rule, minimum 
174.23  requirement, minimum standard, or directive of the department of 
174.24  corrections, or to pay the operating or maintenance costs of a 
174.25  regional jail as authorized in section 641.262.  For purposes of 
174.26  this clause, a district court order is not a rule, minimum 
174.27  requirement, minimum standard, or directive of the department of 
174.28  corrections.  If the county utilizes this special levy, any 
174.29  amount levied by the county in the previous levy year for the 
174.30  purposes specified under this clause and included in the 
174.31  county's previous year's levy limitation computed under section 
174.32  275.71, shall be deducted from the levy limit base under section 
174.33  275.71, subdivision 2, when determining the county's current 
174.34  year levy limitation.  The county shall provide the necessary 
174.35  information to the commissioner of revenue for making this 
174.36  determination; 
175.1      (12) to pay for operation of a lake improvement district, 
175.2   as authorized under section 103B.555.  If the county utilizes 
175.3   this special levy, any amount levied by the county in the 
175.4   previous levy year for the purposes specified under this clause 
175.5   and included in the county's previous year's levy limitation 
175.6   computed under section 275.71 shall be deducted from the levy 
175.7   limit base under section 275.71, subdivision 2, when determining 
175.8   the county's current year levy limitation.  The county shall 
175.9   provide the necessary information to the commissioner of revenue 
175.10  for making this determination; 
175.11     (13) to repay a state or federal loan used to fund the 
175.12  direct or indirect required spending by the local government due 
175.13  to a state or federal transportation project or other state or 
175.14  federal capital project.  This authority may only be used if the 
175.15  project is not a local government initiative; 
175.16     (14) for counties only, to pay the costs reasonably 
175.17  expected to be incurred in 2002 related to the redistricting of 
175.18  election districts and establishment of election precincts under 
175.19  sections 204B.135 and 204B.14, the notice required by section 
175.20  204B.14, subdivision 4, and the reassignment of voters in the 
175.21  statewide registration system, not to exceed $1 per capita, 
175.22  provided that the county shall distribute a portion of the 
175.23  amount levied under this clause equal to 25 cents times the 
175.24  population of the city to all cities in the county with a 
175.25  population of 30,000 or more; and 
175.26     (15) to pay for court administration costs as required 
175.27  under section 273.1398, subdivision 4b; however, for taxes 
175.28  levied to pay for these costs in the year in which the court 
175.29  financing is transferred to the state, the amount under this 
175.30  section is limited to one-third of the aid reduction under 
175.31  section 273.1398, subdivision 4a; and 
175.32     (16) to pay amounts attributable to increases in the cost 
175.33  of health insurance coverage purchased by the local government 
175.34  unit for its employees, to the extent the amount reasonably 
175.35  anticipated to be payable for that purpose in the year in which 
175.36  the taxes are payable exceeds the amount paid for that purpose 
176.1   in calendar year 2001. 
176.2      <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
176.3   payable in 2003 only. 
176.4      Sec. 24.  Minnesota Statutes 2001 Supplement, section 
176.5   275.71, subdivision 2, is amended to read: 
176.6      Subd. 2.  [LEVY LIMIT BASE.] (a) The levy limit base for a 
176.7   local governmental unit for taxes levied in 2001 is equal to the 
176.8   greater of: 
176.9      (1) the sum of its adjusted levy limit base for taxes 
176.10  levied in 1999 plus the amount it levied in 1999 under Minnesota 
176.11  Statutes 1999 Supplement, section 275.70, subdivision 5, clauses 
176.12  (8) and (13), multiplied by: 
176.13     (i) one plus the percentage growth in the implicit price 
176.14  deflator for the 12-month period ending March 30, 2000; 
176.15     (ii) one plus a percentage equal to the annual percentage 
176.16  increase in the estimated number of households, if any, for the 
176.17  most recent 12-month period that was available on July 1, 2000; 
176.18  and 
176.19     (iii) one plus a percentage equal to 50 percent of the 
176.20  percentage increase in the taxable market value of the 
176.21  jurisdiction due to new construction of class 3 property, as 
176.22  defined in section 273.13, subdivision 24, except for 
176.23  state-assessed utility and railroad operating property, for the 
176.24  most recent year for which data was available as of July 1, 
176.25  2000; or 
176.26     (2) an amount equal to: 
176.27     (i) the sum of the amount it levied in 2000 plus the amount 
176.28  of aids it was certified to receive in calendar year 2001 under 
176.29  sections 273.1398, 298.282, 477A.011 to 477A.03, prior to any 
176.30  aid reductions under section 273.1399, subdivision 5, 477A.06, 
176.31  and 477A.065; less 
176.32     (ii) the amount it levied in 2000 that would qualify as 
176.33  special levies under section 275.70, subdivision 6, for taxes 
176.34  levied in 2001.  The local governmental unit shall provide the 
176.35  commissioner of revenue with sufficient information to make this 
176.36  calculation. 
177.1      (b) If the governmental unit was not subject to levy limits 
177.2   for taxes levied in 1999, its levy limit base for taxes levied 
177.3   in 2001 is equal to the amount calculated under paragraph (a), 
177.4   clause (2). 
177.5      (c) The levy limit base for a local governmental unit for 
177.6   taxes levied in 2002 is equal to its adjusted levy limit base in 
177.7   the previous year, plus the amount of tree growth tax it 
177.8   received in calendar year 2001 under sections 270.31 to 270.39, 
177.9   and subject to any adjustments under section 275.72. 
177.10     <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
177.11  payable in 2003 only. 
177.12     Sec. 25.  Minnesota Statutes 2001 Supplement, section 
177.13  275.71, subdivision 4, is amended to read: 
177.14     Subd. 4.  [ADJUSTED LEVY LIMIT BASE.] (a) For taxes levied 
177.15  in 2001 and 2002, the adjusted levy limit base is equal to the 
177.16  levy limit base computed under subdivisions 2 and 3 or section 
177.17  275.72, multiplied by: 
177.18     (1) one plus a percentage equal to the percentage growth in 
177.19  the implicit price deflator, provided that the increase under 
177.20  this clause shall be no less than two percent; 
177.21     (2) one plus a percentage equal to the percentage increase 
177.22  in number of households, if any, for the most recent 12-month 
177.23  period for which data is available; and 
177.24     (3) one plus a percentage equal to 50 percent of the 
177.25  percentage increase in the taxable market value of the 
177.26  jurisdiction due to new construction of class 3 property, as 
177.27  defined in section 273.13, subdivision 24, except for 
177.28  state-assessed utility and railroad operating property, for the 
177.29  most recent year for which data is available. 
177.30     (b) For counties only, for taxes levied in 2001 and 2002, 
177.31  the adjusted levy limit base is also reduced by any amount of 
177.32  levy reduction required under section 275.07, subdivision 1, 
177.33  paragraph (b), clause (ii). 
177.34     Sec. 26.  Minnesota Statutes 2001 Supplement, section 
177.35  298.225, subdivision 1, is amended to read: 
177.36     Subdivision 1.  (a) The distribution of the taconite 
178.1   production tax as provided in section 298.28, subdivisions 3 to 
178.2   5, 6, paragraph (b), 7, and 8, shall equal the lesser of the 
178.3   following amounts:  
178.4      (1) the amount distributed pursuant to this section and 
178.5   section 298.28, with respect to 1983 production if the 
178.6   production for the year prior to the distribution year is no 
178.7   less than 42,000,000 taxable tons.  If the production is less 
178.8   than 42,000,000 taxable tons, the amount of the distributions 
178.9   shall be reduced proportionately at the rate of two percent for 
178.10  each 1,000,000 tons, or part of 1,000,000 tons by which the 
178.11  production is less than 42,000,000 tons; or 
178.12     (2)(i) for the distributions made pursuant to section 
178.13  298.28, subdivisions 4, paragraphs (b) and (c), and 6, paragraph 
178.14  (c), 40.5 31.2 percent of the amount distributed pursuant to 
178.15  this section and section 298.28, with respect to 1983 
178.16  production; 
178.17     (ii) for the distributions made pursuant to section 298.28, 
178.18  subdivision 5, paragraphs (b) and (d), 75 percent of the amount 
178.19  distributed pursuant to this section and section 298.28, with 
178.20  respect to 1983 production.  
178.21     (b) The distribution of the taconite production tax as 
178.22  provided in section 298.28, subdivision 2, shall equal the 
178.23  following amount: 
178.24     (1) if the production for the year prior to the 
178.25  distribution year is at least 42,000,000 taxable tons, the 
178.26  amount distributed pursuant to this section and section 298.28 
178.27  with respect to 1999 production; or 
178.28     (2) if the production for the year prior to the 
178.29  distribution year is less than 42,000,000 taxable tons, the 
178.30  amount distributed pursuant to this section and section 298.28 
178.31  with respect to 1999 production, reduced proportionately at the 
178.32  rate of two percent for each 1,000,000 tons or part of 1,000,000 
178.33  tons by which the production is less than 42,000,000 tons. 
178.34     Sec. 27.  Minnesota Statutes 2000, section 298.27, is 
178.35  amended to read: 
178.36     298.27 [COLLECTION AND PAYMENT OF TAX.] 
179.1      The taxes provided by section 298.24 shall be paid directly 
179.2   to each eligible county and the iron range resources and 
179.3   rehabilitation board.  The commissioner of revenue shall notify 
179.4   each producer of the amount to be paid each recipient prior to 
179.5   February 15.  Every person subject to taxes imposed by section 
179.6   298.24 shall file a correct report covering the preceding year.  
179.7   The report must contain the information required by the 
179.8   commissioner.  The report shall be filed on or before February 
179.9   1.  A remittance equal to 50 percent of the total tax required 
179.10  to be paid hereunder in 2003 and 100 percent of the total tax 
179.11  required to be paid hereunder in 2004 and thereafter shall be 
179.12  paid on or before February 24.  A remittance equal to the 
179.13  remaining total tax required to be paid hereunder in 2003 shall 
179.14  be paid on or before August 24.  On or before February 25, and 
179.15  in 2003, August 25, the county auditor shall make distribution 
179.16  of the payment payments previously received by the county in the 
179.17  manner provided by section 298.28.  Reports shall be made and 
179.18  hearings held upon the determination of the tax in accordance 
179.19  with procedures established by the commissioner of revenue.  The 
179.20  commissioner of revenue shall have authority to make reasonable 
179.21  rules as to the form and manner of filing reports necessary for 
179.22  the determination of the tax hereunder, and by such rules may 
179.23  require the production of such information as may be reasonably 
179.24  necessary or convenient for the determination and apportionment 
179.25  of the tax.  All the provisions of the occupation tax law with 
179.26  reference to the assessment and determination of the occupation 
179.27  tax, including all provisions for appeals from or review of the 
179.28  orders of the commissioner of revenue relative thereto, but not 
179.29  including provisions for refunds, are applicable to the taxes 
179.30  imposed by section 298.24 except in so far as inconsistent 
179.31  herewith.  If any person subject to section 298.24 shall fail to 
179.32  make the report provided for in this section at the time and in 
179.33  the manner herein provided, the commissioner of revenue shall in 
179.34  such case, upon information possessed or obtained, ascertain the 
179.35  kind and amount of ore mined or produced and thereon find and 
179.36  determine the amount of the tax due from such person.  There 
180.1   shall be added to the amount of tax due a penalty for failure to 
180.2   report on or before February 1, which penalty shall equal ten 
180.3   percent of the tax imposed and be treated as a part thereof. 
180.4      If any person responsible for making a tax payment at the 
180.5   time and in the manner herein provided fails to do so, there 
180.6   shall be imposed a penalty equal to ten percent of the amount so 
180.7   due, which penalty shall be treated as part of the tax due. 
180.8      In the case of any underpayment of the tax payment required 
180.9   herein, there may be added and be treated as part of the tax due 
180.10  a penalty equal to ten percent of the amount so underpaid. 
180.11     A person having a liability of $120,000 or more during a 
180.12  calendar year must remit all liabilities by means of a funds 
180.13  transfer as defined in section 336.4A-104, paragraph (a).  The 
180.14  funds transfer payment date, as defined in section 336.4A-401, 
180.15  must be on or before the date the tax is due.  If the date the 
180.16  tax is due is not a funds transfer business day, as defined in 
180.17  section 336.4A-105, paragraph (a), clause (4), the payment date 
180.18  must be on or before the funds transfer business day next 
180.19  following the date the tax is due. 
180.20     Sec. 28.  Minnesota Statutes 2001 Supplement, section 
180.21  298.28, subdivision 4, is amended to read: 
180.22     Subd. 4.  [SCHOOL DISTRICTS.] (a) 22.28 17.15 cents per 
180.23  taxable ton plus the increase provided in paragraph (d) must be 
180.24  allocated to qualifying school districts to be distributed, 
180.25  based upon the certification of the commissioner of revenue, 
180.26  under paragraphs (b) and (c), except as otherwise provided in 
180.27  paragraph (f). 
180.28     (b) 4.46 3.43 cents per taxable ton must be distributed to 
180.29  the school districts in which the lands from which taconite was 
180.30  mined or quarried were located or within which the concentrate 
180.31  was produced.  The distribution must be based on the 
180.32  apportionment formula prescribed in subdivision 2. 
180.33     (c)(i) 17.82 13.72 cents per taxable ton, less any amount 
180.34  distributed under paragraph (e), shall be distributed to a group 
180.35  of school districts comprised of those school districts in which 
180.36  the taconite was mined or quarried or the concentrate produced 
181.1   or in which there is a qualifying municipality as defined by 
181.2   section 273.134, paragraph (b), in direct proportion to school 
181.3   district indexes as follows:  for each school district, its 
181.4   pupil units determined under section 126C.05 for the prior 
181.5   school year shall be multiplied by the ratio of the average 
181.6   adjusted net tax capacity per pupil unit for school districts 
181.7   receiving aid under this clause as calculated pursuant to 
181.8   chapters 122A, 126C, and 127A for the school year ending prior 
181.9   to distribution to the adjusted net tax capacity per pupil unit 
181.10  of the district.  Each district shall receive that portion of 
181.11  the distribution which its index bears to the sum of the indices 
181.12  for all school districts that receive the distributions.  
181.13     (ii) Notwithstanding clause (i), each school district that 
181.14  receives a distribution under sections 298.018; 298.23 to 
181.15  298.28, exclusive of any amount received under this clause; 
181.16  298.34 to 298.39; 298.391 to 298.396; 298.405; or any law 
181.17  imposing a tax on severed mineral values that is less than the 
181.18  amount of its levy reduction under section 126C.48, subdivision 
181.19  8, for the second year prior to the year of the distribution 
181.20  shall receive a distribution equal to the difference; the amount 
181.21  necessary to make this payment shall be derived from 
181.22  proportionate reductions in the initial distribution to other 
181.23  school districts under clause (i).  
181.24     (d) Any school district described in paragraph (c) where a 
181.25  levy increase pursuant to section 126C.17, subdivision 9, was 
181.26  authorized by referendum for taxes payable in 2001, shall 
181.27  receive a distribution from a fund that receives a distribution 
181.28  in 1998 of 21.3 cents per ton.  On July 15 of 1999, and each 
181.29  year thereafter, the increase over the amount established for 
181.30  the prior year shall be determined according to the increase in 
181.31  the implicit price deflator as provided in section 298.24, 
181.32  subdivision 1.  Each district shall receive $175 times the pupil 
181.33  units identified in section 126C.05, subdivision 1, enrolled in 
181.34  the second previous year or the 1983-1984 school year, whichever 
181.35  is greater, less the product of 1.8 percent times the district's 
181.36  taxable net tax capacity in the second previous year. 
182.1      If the total amount provided by paragraph (d) is 
182.2   insufficient to make the payments herein required then the 
182.3   entitlement of $175 per pupil unit shall be reduced uniformly so 
182.4   as not to exceed the funds available.  Any amounts received by a 
182.5   qualifying school district in any fiscal year pursuant to 
182.6   paragraph (d) shall not be applied to reduce general education 
182.7   aid which the district receives pursuant to section 126C.13 or 
182.8   the permissible levies of the district.  Any amount remaining 
182.9   after the payments provided in this paragraph shall be paid to 
182.10  the commissioner of iron range resources and rehabilitation who 
182.11  shall deposit the same in the taconite environmental protection 
182.12  fund and the northeast Minnesota economic protection trust fund 
182.13  as provided in subdivision 11. 
182.14     Each district receiving money according to this paragraph 
182.15  shall reserve $25 times the number of pupil units in the 
182.16  district.  It may use the money for early childhood programs or 
182.17  for outcome-based learning programs that enhance the academic 
182.18  quality of the district's curriculum.  The outcome-based 
182.19  learning programs must be approved by the commissioner of 
182.20  children, families, and learning. 
182.21     (e) There shall be distributed to any school district the 
182.22  amount which the school district was entitled to receive under 
182.23  section 298.32 in 1975. 
182.24     (f) Effective with for the distribution in 2003 and 
182.25  thereafter only, five percent of the distributions to school 
182.26  districts under paragraphs (b), (c), and (e); subdivision 6, 
182.27  paragraph (c); subdivision 11; and 100 percent of the 
182.28  distributions to school districts under section 477A.15, shall 
182.29  be distributed to the general fund.  The remainder shall be 
182.30  distributed to the cities and townships within each school 
182.31  district in the proportion that their taxable net tax capacity 
182.32  within the school district bears to the taxable net tax capacity 
182.33  of the school district for property taxes payable in the year 
182.34  prior to distribution.  No city or township shall receive a 
182.35  distribution greater than its levy for taxes payable in the year 
182.36  prior to distribution added to the sums available for 
183.1   expenditure under section 298.293 as governed by section 298.296.
183.2      Sec. 29.  Minnesota Statutes 2001 Supplement, section 
183.3   298.28, subdivision 6, is amended to read: 
183.4      Subd. 6.  [PROPERTY TAX RELIEF.] (a) In 2002 and 
183.5   thereafter, 35.9 cents per taxable ton, less any amount required 
183.6   to be distributed under paragraphs (b) and (c), and less any 
183.7   amount required to be deducted under paragraph (d), must be 
183.8   allocated to St. Louis county acting as the counties' fiscal 
183.9   agent, to be distributed as provided in sections 273.134 to 
183.10  273.136. 
183.11     (b) If an electric power plant owned by and providing the 
183.12  primary source of power for a taxpayer mining and concentrating 
183.13  taconite is located in a county other than the county in which 
183.14  the mining and the concentrating processes are conducted, .1875 
183.15  cent per taxable ton of the tax imposed and collected from such 
183.16  taxpayer shall be paid to the county. 
183.17     (c) If an electric power plant owned by and providing the 
183.18  primary source of power for a taxpayer mining and concentrating 
183.19  taconite is located in a school district other than a school 
183.20  district in which the mining and concentrating processes are 
183.21  conducted, .7282 .5607 cent per taxable ton of the tax imposed 
183.22  and collected from the taxpayer shall be paid to the school 
183.23  district. 
183.24     (d) Two cents per taxable ton must be deducted from the 
183.25  amount allocated to the St. Louis county auditor under paragraph 
183.26  (a). 
183.27     Sec. 30.  Minnesota Statutes 2001 Supplement, section 
183.28  298.28, subdivision 9a, is amended to read: 
183.29     Subd. 9a.  [TACONITE ECONOMIC DEVELOPMENT FUND.] (a) 30.1 
183.30  cents per ton for distributions in 2002 and thereafter must be 
183.31  paid to the taconite economic development fund.  No distribution 
183.32  shall be made under this paragraph in 2004 or any subsequent 
183.33  year in which total industry production falls below 30 million 
183.34  tons.  Distribution shall only be made to a taconite producer's 
183.35  fund under section 298.227 if the producer timely pays its tax 
183.36  under section 298.24 by the dates provided under section 298.27, 
184.1   or pursuant to the due dates provided by an administrative 
184.2   agreement with the commissioner. 
184.3      (b) An amount equal to 50 percent of the tax under section 
184.4   298.24 for concentrate sold in the form of pellet chips and 
184.5   fines not exceeding 5/16 inch in size and not including crushed 
184.6   pellets shall be paid to the taconite economic development 
184.7   fund.  The amount paid shall not exceed $700,000 annually for 
184.8   all companies.  If the initial amount to be paid to the fund 
184.9   exceeds this amount, each company's payment shall be prorated so 
184.10  the total does not exceed $700,000. 
184.11     Sec. 31.  Minnesota Statutes 2000, section 298.28, 
184.12  subdivision 9b, is amended to read: 
184.13     Subd. 9b.  [TACONITE ENVIRONMENTAL FUND.] Five cents per 
184.14  ton for distributions in 1999, 2000, 2001, and 2002, and 2003 
184.15  must be paid to the taconite environmental fund for use under 
184.16  section 298.2961.  No distribution may be made under this 
184.17  paragraph in any year in which total industry production falls 
184.18  below 30,000,000 tons. 
184.19     Sec. 32.  Minnesota Statutes 2000, section 298.28, 
184.20  subdivision 11, is amended to read: 
184.21     Subd. 11.  [REMAINDER.] (a) The proceeds of the tax imposed 
184.22  by section 298.24 which remain after the distributions and 
184.23  payments in subdivisions 2 to 10a, as certified by the 
184.24  commissioner of revenue, and paragraphs (b), (c), and (d), and 
184.25  (e) have been made, together with interest earned on all money 
184.26  distributed under this section prior to distribution, shall be 
184.27  divided between the taconite environmental protection fund 
184.28  created in section 298.223 and the northeast Minnesota economic 
184.29  protection trust fund created in section 298.292 as follows:  
184.30  Two-thirds to the taconite environmental protection fund and 
184.31  one-third to the northeast Minnesota economic protection trust 
184.32  fund.  The proceeds shall be placed in the respective special 
184.33  accounts. 
184.34     (b) There shall be distributed to each city, town, and 
184.35  county the amount that it received under section 294.26 in 
184.36  calendar year 1977; provided, however, that the amount 
185.1   distributed in 1981 to the unorganized territory number 2 of 
185.2   Lake county and the town of Beaver Bay based on the 
185.3   between-terminal trackage of Erie Mining Company will be 
185.4   distributed in 1982 and subsequent years to the unorganized 
185.5   territory number 2 of Lake county and the towns of Beaver Bay 
185.6   and Stony River based on the miles of track of Erie Mining 
185.7   Company in each taxing district. 
185.8      (c) There shall be distributed to the iron range resources 
185.9   and rehabilitation board the amounts it received in 1977 under 
185.10  section 298.22.  The amount distributed under this paragraph 
185.11  shall be expended within or for the benefit of the tax relief 
185.12  area defined in section 273.134. 
185.13     (d) There shall be distributed to each school district 81 
185.14  62 percent of the amount that it received under section 294.26 
185.15  in calendar year 1977. 
185.16     (e) In 2003 only, $100,000 must be distributed to a 
185.17  township located in a taconite tax relief area as defined in 
185.18  section 273.134, paragraph (a), that received $119,259 of 
185.19  homestead and agricultural credit aid and $182,014 in local 
185.20  government aid in 2001. 
185.21     Sec. 33.  Minnesota Statutes 2001 Supplement, section 
185.22  298.296, subdivision 2, is amended to read: 
185.23     Subd. 2.  [EXPENDITURE OF FUNDS.] Before January 1, 2003, 
185.24  (a) Funds may be expended on projects and for administration of 
185.25  the trust fund only from the net interest, earnings, and 
185.26  dividends arising from the investment of the trust at any time, 
185.27  including net interest, earnings, and dividends that have arisen 
185.28  prior to July 13, 1982, plus $10,000,000 made available for use 
185.29  in fiscal year 1983, except that any amount required to be paid 
185.30  out of the trust fund to provide the property tax relief 
185.31  specified in Laws 1977, chapter 423, article X, section 4, and 
185.32  to make school bond payments and payments to recipients of 
185.33  taconite production tax proceeds pursuant to section 298.225, 
185.34  may be taken from the corpus of the trust.  
185.35     (b) Additionally, upon recommendation by the board, up to 
185.36  $13,000,000 from the corpus of the trust may be made available 
186.1   for use as provided in subdivision 4, and up to $10,000,000 from 
186.2   the corpus of the trust may be made available for use as 
186.3   provided in section 298.2961.  
186.4      (c) On and after January 1, 2003, Funds may be expended on 
186.5   projects and for administration from any assets of the 
186.6   trust Additionally, an amount equal to 20 percent of the value 
186.7   of the corpus of the trust on the date of enactment of this act, 
186.8   not including the funds authorized in paragraph (b), may be 
186.9   expended on projects and for administration from any assets of 
186.10  the trust.  Funds may be expended under this paragraph only if 
186.11  approved by the board upon an affirmative vote of at least ten 
186.12  of its members. 
186.13     (d) Annual administrative costs, not including detailed 
186.14  engineering expenses for the projects, shall not exceed five 
186.15  percent of the net interest, dividends, and earnings arising 
186.16  from the trust in the preceding fiscal year.  
186.17     (e) Principal and interest received in repayment of loans 
186.18  made pursuant to this section, and earnings on other investments 
186.19  made under section 298.292, subdivision 2, clause (4), shall be 
186.20  deposited in the state treasury and credited to the trust.  
186.21  These receipts are appropriated to the board for the purposes of 
186.22  sections 298.291 to 298.298. 
186.23     <h>[EFFECTIVE DATE.]</h> This section is effective January 1, 2003.
186.24     Sec. 34.  Minnesota Statutes 2001 Supplement, section 
186.25  477A.011, subdivision 36, is amended to read: 
186.26     Subd. 36.  [CITY AID BASE.] (a) Except as provided in 
186.27  paragraphs (b) to (o) otherwise in this subdivision, "city aid 
186.28  base" means, for each city, the sum of the local government aid 
186.29  and equalization aid it was originally certified to receive in 
186.30  calendar year 1993 under Minnesota Statutes 1992, section 
186.31  477A.013, subdivisions 3 and 5, and the amount of disparity 
186.32  reduction aid it received in calendar year 1993 under Minnesota 
186.33  Statutes 1992, section 273.1398, subdivision 3. 
186.34     (b) For aids payable in 1996 and thereafter, a city that in 
186.35  1992 or 1993 transferred an amount from governmental funds to 
186.36  its sewer and water fund, which amount exceeded its net levy for 
187.1   taxes payable in the year in which the transfer occurred, has a 
187.2   "city aid base" equal to the sum of (i) its city aid base, as 
187.3   calculated under paragraph (a), and (ii) one-half of the 
187.4   difference between its city aid distribution under section 
187.5   477A.013, subdivision 9, for aids payable in 1995 and its city 
187.6   aid base for aids payable in 1995. 
187.7      (c) The city aid base for any city with a population less 
187.8   than 500 is increased by $40,000 for aids payable in calendar 
187.9   year 1995 and thereafter, and the maximum amount of total aid it 
187.10  may receive under section 477A.013, subdivision 9, paragraph 
187.11  (c), is also increased by $40,000 for aids payable in calendar 
187.12  year 1995 only, provided that: 
187.13     (i) the average total tax capacity rate for taxes payable 
187.14  in 1995 exceeds 200 percent; 
187.15     (ii) the city portion of the tax capacity rate exceeds 100 
187.16  percent; and 
187.17     (iii) its city aid base is less than $60 per capita. 
187.18     (d) The city aid base for a city is increased by $20,000 in 
187.19  1998 and thereafter and the maximum amount of total aid it may 
187.20  receive under section 477A.013, subdivision 9, paragraph (c), is 
187.21  also increased by $20,000 in calendar year 1998 only, provided 
187.22  that: 
187.23     (i) the city has a population in 1994 of 2,500 or more; 
187.24     (ii) the city is located in a county, outside of the 
187.25  metropolitan area, which contains a city of the first class; 
187.26     (iii) the city's net tax capacity used in calculating its 
187.27  1996 aid under section 477A.013 is less than $400 per capita; 
187.28  and 
187.29     (iv) at least four percent of the total net tax capacity, 
187.30  for taxes payable in 1996, of property located in the city is 
187.31  classified as railroad property. 
187.32     (e) The city aid base for a city is increased by $200,000 
187.33  in 1999 and thereafter and the maximum amount of total aid it 
187.34  may receive under section 477A.013, subdivision 9, paragraph 
187.35  (c), is also increased by $200,000 in calendar year 1999 only, 
187.36  provided that: 
188.1      (i) the city was incorporated as a statutory city after 
188.2   December 1, 1993; 
188.3      (ii) its city aid base does not exceed $5,600; and 
188.4      (iii) the city had a population in 1996 of 5,000 or more. 
188.5      (f) The city aid base for a city is increased by $450,000 
188.6   in 1999 to 2008 and the maximum amount of total aid it may 
188.7   receive under section 477A.013, subdivision 9, paragraph (c), is 
188.8   also increased by $450,000 in calendar year 1999 only, provided 
188.9   that: 
188.10     (i) the city had a population in 1996 of at least 50,000; 
188.11     (ii) its population had increased by at least 40 percent in 
188.12  the ten-year period ending in 1996; and 
188.13     (iii) its city's net tax capacity for aids payable in 1998 
188.14  is less than $700 per capita. 
188.15     (g) Beginning in 2002, the city aid base for a city is 
188.16  equal to the sum of its city aid base in 2001 and the amount of 
188.17  additional aid it was certified to receive under section 477A.06 
188.18  in 2001.  For 2002 only, the maximum amount of total aid a city 
188.19  may receive under section 477A.013, subdivision 9, paragraph 
188.20  (c), is also increased by the amount it was certified to receive 
188.21  under section 477A.06 in 2001. 
188.22     (h) The city aid base for a city is increased by $150,000 
188.23  for aids payable in 2000 and thereafter, and the maximum amount 
188.24  of total aid it may receive under section 477A.013, subdivision 
188.25  9, paragraph (c), is also increased by $150,000 in calendar year 
188.26  2000 only, provided that: 
188.27     (1) the city has a population that is greater than 1,000 
188.28  and less than 2,500; 
188.29     (2) its commercial and industrial percentage for aids 
188.30  payable in 1999 is greater than 45 percent; and 
188.31     (3) the total market value of all commercial and industrial 
188.32  property in the city for assessment year 1999 is at least 15 
188.33  percent less than the total market value of all commercial and 
188.34  industrial property in the city for assessment year 1998. 
188.35     (i) The city aid base for a city is increased by $200,000 
188.36  in 2000 and thereafter, and the maximum amount of total aid it 
189.1   may receive under section 477A.013, subdivision 9, paragraph 
189.2   (c), is also increased by $200,000 in calendar year 2000 only, 
189.3   provided that: 
189.4      (1) the city had a population in 1997 of 2,500 or more; 
189.5      (2) the net tax capacity of the city used in calculating 
189.6   its 1999 aid under section 477A.013 is less than $650 per 
189.7   capita; 
189.8      (3) the pre-1940 housing percentage of the city used in 
189.9   calculating 1999 aid under section 477A.013 is greater than 12 
189.10  percent; 
189.11     (4) the 1999 local government aid of the city under section 
189.12  477A.013 is less than 20 percent of the amount that the formula 
189.13  aid of the city would have been if the need increase percentage 
189.14  was 100 percent; and 
189.15     (5) the city aid base of the city used in calculating aid 
189.16  under section 477A.013 is less than $7 per capita. 
189.17     (j) The city aid base for a city is increased by $225,000 
189.18  in calendar years 2000 to 2002 and the maximum amount of total 
189.19  aid it may receive under section 477A.013, subdivision 9, 
189.20  paragraph (c), is also increased by $225,000 in calendar year 
189.21  2000 only, provided that: 
189.22     (1) the city had a population of at least 5,000; 
189.23     (2) its population had increased by at least 50 percent in 
189.24  the ten-year period ending in 1997; 
189.25     (3) the city is located outside of the Minneapolis-St. Paul 
189.26  metropolitan statistical area as defined by the United States 
189.27  Bureau of the Census; and 
189.28     (4) the city received less than $30 per capita in aid under 
189.29  section 477A.013, subdivision 9, for aids payable in 1999. 
189.30     (k) The city aid base for a city is increased by $102,000 
189.31  in 2000 and thereafter, and the maximum amount of total aid it 
189.32  may receive under section 477A.013, subdivision 9, paragraph 
189.33  (c), is also increased by $102,000 in calendar year 2000 only, 
189.34  provided that: 
189.35     (1) the city has a population in 1997 of 2,000 or more; 
189.36     (2) the net tax capacity of the city used in calculating 
190.1   its 1999 aid under section 477A.013 is less than $455 per 
190.2   capita; 
190.3      (3) the net levy of the city used in calculating 1999 aid 
190.4   under section 477A.013 is greater than $195 per capita; and 
190.5      (4) the 1999 local government aid of the city under section 
190.6   477A.013 is less than 38 percent of the amount that the formula 
190.7   aid of the city would have been if the need increase percentage 
190.8   was 100 percent. 
190.9      (l) The city aid base for a city is increased by $32,000 in 
190.10  2001 and thereafter, and the maximum amount of total aid it may 
190.11  receive under section 477A.013, subdivision 9, paragraph (c), is 
190.12  also increased by $32,000 in calendar year 2001 only, provided 
190.13  that: 
190.14     (1) the city has a population in 1998 that is greater than 
190.15  200 but less than 500; 
190.16     (2) the city's revenue need used in calculating aids 
190.17  payable in 2000 was greater than $200 per capita; 
190.18     (3) the city net tax capacity for the city used in 
190.19  calculating aids available in 2000 was equal to or less than 
190.20  $200 per capita; 
190.21     (4) the city aid base of the city used in calculating aid 
190.22  under section 477A.013 is less than $65 per capita; and 
190.23     (5) the city's formula aid for aids payable in 2000 was 
190.24  greater than zero. 
190.25     (m) The city aid base for a city is increased by $7,200 in 
190.26  2001 and thereafter, and the maximum amount of total aid it may 
190.27  receive under section 477A.013, subdivision 9, paragraph (c), is 
190.28  also increased by $7,200 in calendar year 2001 only, provided 
190.29  that: 
190.30     (1) the city had a population in 1998 that is greater than 
190.31  200 but less than 500; 
190.32     (2) the city's commercial industrial percentage used in 
190.33  calculating aids payable in 2000 was less than ten percent; 
190.34     (3) more than 25 percent of the city's population was 60 
190.35  years old or older according to the 1990 census; 
190.36     (4) the city aid base of the city used in calculating aid 
191.1   under section 477A.013 is less than $15 per capita; and 
191.2      (5) the city's formula aid for aids payable in 2000 was 
191.3   greater than zero. 
191.4      (n) The city aid base for a city is increased by $45,000 in 
191.5   2001 and thereafter and by an additional $50,000 in calendar 
191.6   years 2002 to 2011, and the maximum amount of total aid it may 
191.7   receive under section 477A.013, subdivision 9, paragraph (c), is 
191.8   also increased by $45,000 in calendar year 2001 only, and by 
191.9   $50,000 in calendar year 2002 only, provided that: 
191.10     (1) the net tax capacity of the city used in calculating 
191.11  its 2000 aid under section 477A.013 is less than $810 per 
191.12  capita; 
191.13     (2) the population of the city declined more than two 
191.14  percent between 1988 and 1998; 
191.15     (3) the net levy of the city used in calculating 2000 aid 
191.16  under section 477A.013 is greater than $240 per capita; and 
191.17     (4) the city received less than $36 per capita in aid under 
191.18  section 477A.013, subdivision 9, for aids payable in 2000. 
191.19     (o) The city aid base for a city with a population of 
191.20  10,000 or more which is located outside of the seven-county 
191.21  metropolitan area is increased in 2002 and thereafter, and the 
191.22  maximum amount of total aid it may receive under section 
191.23  477A.013, subdivision 9, paragraph (b) or (c), is also increased 
191.24  in calendar year 2002 only, by an amount equal to the lesser of: 
191.25     (1)(i) the total population of the city, as determined by 
191.26  the United States Bureau of the Census, in the 2000 census, (ii) 
191.27  minus 5,000, (iii) times 60; or 
191.28     (2) $2,500,000. 
191.29     (p) The city aid base is increased by $50,000 in 2002 and 
191.30  thereafter, and the maximum amount of total aid it may receive 
191.31  under section 477A.013, subdivision 9, paragraph (c), is also 
191.32  increased by $50,000 in calendar year 2002 only, provided that: 
191.33     (1) the city is located in the seven-county metropolitan 
191.34  area; 
191.35     (2) its population in 2000 is between 10,000 and 20,000; 
191.36  and 
192.1      (3) its commercial industrial percentage, as calculated for 
192.2   city aid payable in 2001, was greater than 25 percent. 
192.3      (q) The city aid base for a city is increased by $150,000 
192.4   in calendar years 2002 to 2011 and the maximum amount of total 
192.5   aid it may receive under section 477A.013, subdivision 9, 
192.6   paragraph (c), is also increased by $150,000 in calendar year 
192.7   2002 only, provided that: 
192.8      (1) the city had a population of at least 3,000 but no more 
192.9   than 4,000 in 1999; 
192.10     (2) its home county is located within the seven-county 
192.11  metropolitan area; 
192.12     (3) its pre-1940 housing percentage is less than 15 
192.13  percent; and 
192.14     (4) its city net tax capacity per capita for taxes payable 
192.15  in 2000 is less than $900 per capita. 
192.16     (r) The city aid base for a city that is located outside of 
192.17  the metropolitan area defined in section 473.121, subdivision 2, 
192.18  and has a population of 1,000 or less is increased in calendar 
192.19  year 2003 and thereafter, and the maximum amount of total aid it 
192.20  may receive under section 477A.013, subdivision 9, paragraph (b) 
192.21  or (c), is also increased by an amount equal to the positive 
192.22  difference between the sum of the aids received in calendar year 
192.23  2001 by the city under sections 273.1398, subdivision 2, and 
192.24  477A.013, subdivision 9, after any reduction under Minnesota 
192.25  Statutes 2000, section 273.1399, and the aid the city received 
192.26  in calendar year 2002 under section 477A.013, subdivision 9. 
192.27     Sec. 35.  Minnesota Statutes 2001 Supplement, section 
192.28  477A.03, subdivision 2, is amended to read: 
192.29     Subd. 2.  [ANNUAL APPROPRIATION.] (a) A sum sufficient to 
192.30  discharge the duties imposed by sections 477A.011 to 477A.014 is 
192.31  annually appropriated from the general fund to the commissioner 
192.32  of revenue.  
192.33     (b) Aid payments to counties under section 477A.0121 are 
192.34  limited to $20,265,000 in 1996.  Aid payments to counties under 
192.35  section 477A.0121 are limited to $27,571,625 in 1997.  For aid 
192.36  payable in 1998 and thereafter, the total aids paid under 
193.1   section 477A.0121 are the amounts certified to be paid in the 
193.2   previous year, adjusted for inflation as provided under 
193.3   subdivision 3. 
193.4      (c)(i) For aids payable in 1998 and thereafter, the total 
193.5   aids paid to counties under section 477A.0122 are the amounts 
193.6   certified to be paid in the previous year, adjusted for 
193.7   inflation as provided under subdivision 3. 
193.8      (ii) Aid payments to counties under section 477A.0122 in 
193.9   2000 are further increased by an additional $20,000,000 in 2000. 
193.10     (d) Aid payments to cities in 2002 under section 477A.013, 
193.11  subdivision 9, are limited to the amounts certified to be paid 
193.12  in the previous year, adjusted for inflation as provided in 
193.13  subdivision 3, and increased by $140,000,000.  For aids payable 
193.14  in 2003, the total aids paid under section 477A.013, subdivision 
193.15  9, are the amounts certified to be paid in the previous year, 
193.16  adjusted for inflation as provided under subdivision 3, and 
193.17  increased by $2,700,000 to pay the aids provided in section 
193.18  477A.011, subdivision 36, paragraph (r).  For aids payable in 
193.19  2004, the total aids paid under section 477A.013, subdivision 9, 
193.20  are the amounts certified to be paid in the previous year, 
193.21  adjusted for inflation as provided under subdivision 3, and 
193.22  increased by the amount certified to be paid in 2003 under 
193.23  section 477A.06.  For aids payable in 2005 and thereafter, the 
193.24  total aids paid under section 477A.013, subdivision 9, are the 
193.25  amounts certified to be paid in the previous year, adjusted for 
193.26  inflation as provided under subdivision 3.  The additional 
193.27  amount authorized under subdivision 4 is not included when 
193.28  calculating the appropriation limits under this paragraph. 
193.29     (e) Reimbursements made to counties under section 477A.0123 
193.30  in calendar year 2004 and thereafter are limited to an amount 
193.31  equal to the maximum allowed appropriation under this section in 
193.32  the previous year, multiplied by a percent to be established by 
193.33  law. 
193.34     Sec. 36.  [477A.08] [UTILITY TAX BASE REPLACEMENT AID.] 
193.35     Subdivision 1.  [AID AMOUNT.] A county is eligible for aid 
193.36  under this section if the sum of its net tax capacity for 
194.1   assessment year 2000 of public utility real property and 
194.2   personal property consisting of tools, implements and machinery 
194.3   of a pipeline system transporting or distributing gas, crude oil 
194.4   or petroleum products is greater than 40 percent of its total 
194.5   net tax capacity for that year.  For aid payable in 2003, each 
194.6   county is eligible for aid equal to the sum of: 
194.7      (1) 0.9 percent of the assessment year 2000 taxable market 
194.8   value of public utility real property valued at less than 
194.9   $150,000; 
194.10     (2) 1.4 percent of the taxable market value of public 
194.11  utility real property valued at more than $150,000; and 
194.12     (3) 1.4 percent of the taxable market value of tools, 
194.13  implements and machinery of pipeline systems transporting or 
194.14  distributing gas, crude oil, or petroleum products multiplied by 
194.15  the jurisdiction's local tax rate for taxes payable in 2001. 
194.16     Subd. 2.  [APPROPRIATION.] The amount required to make the 
194.17  payments under this section is annually appropriated from the 
194.18  general fund to the commissioner of revenue. 
194.19     Sec. 37.  Laws 1989, chapter 211, section 8, as amended by 
194.20  Laws 1992, chapter 505, section 3, is amended to read: 
194.21     Sec. 8.  [COOK COUNTY; HOSPITAL DISTRICT.] 
194.22     Subdivision 1.  [CREATION; REFERENDUM.] The board of 
194.23  commissioners of Cook county may by resolution create a Cook 
194.24  county hospital district.  The resolution providing for creation 
194.25  of the district must be published in the official newspaper of 
194.26  the county.  If within ten days after the publication a petition 
194.27  is filed with the county board that is signed by qualified 
194.28  voters of the county at least equal in number to ten percent of 
194.29  the number of voters voting at the most recent election of 
194.30  county commissioners, requesting a referendum on the resolution, 
194.31  it shall not be effective until it is approved by a majority of 
194.32  qualified voters voting on the question at a special or general 
194.33  election.  
194.34     Subd. 2.  [OPERATION OF DISTRICT.] A hospital district 
194.35  created under this section shall be subject to Minnesota 
194.36  Statutes, sections 397.06 to 397.102 447.32, except subdivision 
195.1   1, to 447.41, and except as provided otherwise in this act.  
195.2      Subd. 3.  [BOARD.] Notwithstanding Minnesota Statutes, 
195.3   section 397.06 447.32, the board of the district shall be 
195.4   comprised of one member from each county commissioner district 
195.5   elected by the voters at the first general election in the 
195.6   county after the resolution has become effective.  At the 1992 
195.7   general election, the board members from districts one, three, 
195.8   and five shall be elected to two-year terms and board members 
195.9   from districts two and four to four-year terms.  Their 
195.10  successors shall be elected to regular four-year terms in 1994, 
195.11  1996, and thereafter.  Terms shall begin on the first day of 
195.12  January following the election.  
195.13     If members are elected in 1990, their terms shall be two 
195.14  years.  When the district is first created, the county 
195.15  commissioner from each district shall appoint a member of the 
195.16  board to serve until the commencement of the term of a successor.
195.17     When a vacancy occurs, the county commissioner from the 
195.18  district affected majority of the remaining members of the board 
195.19  of the hospital district shall appoint a member to serve until 
195.20  January 1 following the next general election in the county, 
195.21  when at which a successor shall be elected for a full regular 
195.22  term if the full regular term of the seat that had the vacancy 
195.23  is expiring on that January 1 or otherwise, for the unexpired 
195.24  remainder of the regular that seat's term. 
195.25     Subd. 4.  [TAX LEVY.] (a) The tax levied under Minnesota 
195.26  Statutes, section 397.09 447.34, shall not exceed $300,000 in 
195.27  any year, and its proceeds may be used for all purposes of the 
195.28  hospital district for taxes levied in 2002.  
195.29     (b) For taxes levied in 2003, and thereafter, the tax 
195.30  levied under Minnesota Statutes, section 447.34, must not exceed 
195.31  the greater of:  (1) $300,000, or (2) $300,000 multiplied by the 
195.32  ratio of the most recent available annual medical care 
195.33  expenditure category of the revised Consumer Price Index, U.S. 
195.34  citywide average, for all urban consumers prepared by the United 
195.35  States Department of Labor to the same annual index for 2001. 
195.36     Subd. 5.  [TERRITORY.] The territory of the entire county 
196.1   of Cook is the hospital district. 
196.2      Subd. 6.  [REFERENCES.] The county acts in the place of 
196.3   cities and towns for purposes of Minnesota Statutes, sections 
196.4   447.32, except subdivision 1, to 447.41; and all references made 
196.5   to hospital districts in Minnesota Statutes, sections 447.32, 
196.6   except subdivision 1, to 447.41, apply to the Cook county 
196.7   hospital district. 
196.8      Subd. 7.  [APPLICATION.] Minnesota Statutes, section 
196.9   447.38, subdivision 2, does not apply to the hospital district 
196.10  created under this section. 
196.11     <h>[EFFECTIVE DATE.]</h> For purposes of Minnesota Statutes, 
196.12  section 645.021, subdivisions 2 and 3, Cook county and the Cook 
196.13  county hospital district are the local governmental units 
196.14  affected.  This section is effective the day after the latter of 
196.15  the governing bodies of: 
196.16     (1) Cook county and its chief clerical officer; and 
196.17     (2) the Cook county hospital district and its chief 
196.18  clerical officer; 
196.19  timely complete their compliance with Minnesota Statutes, 
196.20  section 645.021, subdivisions 2 and 3. 
196.21     Sec. 38.  Laws 2001, First Special Session chapter 5, 
196.22  article 3, section 96, is amended to read: 
196.23     Sec. 96.  [REPEALER.] 
196.24     (a) Minnesota Statutes 2000, sections 273.13, subdivision 
196.25  24a; 273.1382; 273.1399; 275.078; 275.08, subdivision 1e; 
196.26  473.446, subdivisions 1a and 1b; and 473.3915, are repealed 
196.27  effective for taxes levied in 2001, payable in 2002, and 
196.28  thereafter and aids or credits payable in 2002 and thereafter. 
196.29     (b) Laws 1988, chapter 426, section 1; Laws 1988, chapter 
196.30  702, section 16; Laws 1992, chapter 511, article 2, section 52, 
196.31  as amended by Laws 1997, chapter 231, article 2, section 50, and 
196.32  Laws 1998, chapter 389, article 3, section 32; Laws 1996, 
196.33  chapter 471, article 8, section 45; Laws 1999, chapter 243, 
196.34  article 6, section 14; Laws 1999, chapter 243, article 6, 
196.35  section 15; and Laws 2000, chapter 490, article 6, section 17, 
196.36  are repealed effective for taxes levied in 2001, payable in 2002 
197.1   and thereafter. 
197.2      (c) Minnesota Statutes 2000, sections 126C.30; 126C.31; 
197.3   126C.32; 126C.33; 126C.34; 126C.35; and 126C.36, are repealed 
197.4   effective July 1, 2001. 
197.5      (d) Minnesota Statutes 2000, section 273.126 and 462A.071, 
197.6   are repealed effective for property taxes payable in 2004, and 
197.7   any agreement entered into pursuant to the provisions of those 
197.8   sections expires, effective January 1, 2004, regardless of the 
197.9   term of the agreement. 
197.10     Sec. 39.  [COOK COUNTY; EXPENDITURE OF ROAD AND BRIDGE 
197.11  LEVY.] 
197.12     Notwithstanding Minnesota Statutes, section 163.06, 
197.13  subdivisions 4 and 5, the county board of Cook county, by 
197.14  resolution, may expend the proceeds of the levy under Minnesota 
197.15  Statutes, section 163.06, in any organized or unorganized 
197.16  township or portion thereof in the county. 
197.17     <h>[EFFECTIVE DATE.]</h> This section is effective is effective 
197.18  the day after the governing body of Cook county and its chief 
197.19  clerical officer timely complete their compliance with Minnesota 
197.20  Statutes, section 645.021, subdivisions 2 and 3. 
197.21     Sec. 40.  [DELAYED DUE DATE FOR CERTAIN PROPERTY TAXES.] 
197.22     Notwithstanding Minnesota Statutes, sections 278.03, 
197.23  subdivision 1, and 279.01, subdivision 1, for taxes payable in 
197.24  2002 only, property taxes due by May 15 on class 1c property and 
197.25  class 4c seasonal residential recreational property used for 
197.26  commercial purposes will be considered to be timely paid if they 
197.27  are paid by July 15, 2002, and no penalties shall accrue to the 
197.28  first one-half property tax payment as provided in this section 
197.29  if paid by July 15.  On July 16, a penalty shall accrue and 
197.30  thereafter be charged upon all unpaid taxes.  On class 1c 
197.31  property the penalty is at a rate of two percent until July 31, 
197.32  and four percent on August 1.  On class 4c seasonal residential 
197.33  recreational property used for commercial purposes, the penalty 
197.34  is four percent until July 31 and eight percent August 1.  
197.35  Thereafter, for both class 1c and class 4c seasonal residential 
197.36  recreational property used for commercial purposes, on the first 
198.1   day of September and on the first day of October, an additional 
198.2   penalty of one percent shall accrue and be charged on unpaid 
198.3   taxes.  The remaining one-half property taxes must be paid and 
198.4   penalties accrue as provided in subdivision 1. 
198.5      Sec. 41.  [PROPERTY TAX ASSESSMENT OF LOW-INCOME HOUSING, 
198.6   RULES.] 
198.7      The commissioner of revenue shall develop guidelines for 
198.8   use by assessors in calculating the restricted use value of 
198.9   class 4d property under Minnesota Statutes, section 273.11, 
198.10  subdivision 20. 
198.11     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
198.12  following final enactment. 
198.13     Sec. 42.  [SOUTHWEST REGIONAL DEVELOPMENT COMMISSION LEVY 
198.14  FOR DEBT.] 
198.15     (a) In addition to other levies authorized by law, the 
198.16  Southwest Regional Development Commission may levy in each year 
198.17  through 2010, payable through 2011, an additional amount 
198.18  sufficient to retire its remaining debt in connection with the 
198.19  Prairie Expo project located in Worthington, not to exceed 
198.20  $232,080 annually. 
198.21     (b) The commission may issue bonds or other obligations 
198.22  under Minnesota Statutes, chapter 475, in an aggregate principal 
198.23  amount not to exceed $1,632,224 to retire the debt sooner. In 
198.24  that case the levy authorized in paragraph (a) may be used for 
198.25  debt service on the bonds or other obligations. 
198.26     <h>[EFFECTIVE DATE; LOCAL APPROVAL.]</h> This section is effective 
198.27  the day after: 
198.28     (1) the governing body of the Southwest Regional 
198.29  Development Commission and its chief clerical officer timely 
198.30  complete their compliance with Minnesota Statutes, section 
198.31  645.021, subdivisions 2 and 3; and 
198.32     (2) the governing body of each county in the development 
198.33  region and its chief clerical officer timely comply with 
198.34  Minnesota Statutes, section 645.021, subdivisions 2 and 3. 
198.35     Sec. 43.  [ST. PAUL LIBRARY AGENCY.] 
198.36     (a) Notwithstanding any law or charter to the contrary, the 
199.1   city council of the city of St. Paul may, by ordinance, 
199.2   establish an independent library agency, a public body corporate 
199.3   and politic, which is a governmental subdivision of the state of 
199.4   Minnesota.  The library agency shall be responsible for all 
199.5   libraries and library operations within the city of St. Paul.  
199.6   The actions of the city council as library board shall be 
199.7   subject to mayoral veto and override of that veto in the same 
199.8   manner as other actions of the city council. 
199.9      (b) All employees of the library agency shall be employees 
199.10  of the city of St. Paul. 
199.11     (c) The city may transfer any real or personal property 
199.12  used or to be used for library purposes to the library agency. 
199.13     (d) The library board shall designate from among its 
199.14  members a chair, secretary, and treasurer, and may adopt bylaws. 
199.15     (e) The director of the library agency shall be appointed 
199.16  by the mayor. 
199.17     <h>[EFFECTIVE DATE.]</h> This section is effective the day after 
199.18  the governing body of St. Paul and its chief clerical officer 
199.19  timely complete their compliance with Minnesota Statutes, 
199.20  section 645.021, subdivisions 2 and 3. 
199.21     Sec. 44.  [ST. PAUL LIBRARY TAX LEVIES; FISCAL MATTERS.] 
199.22     Subdivision 1.  [BUDGET TO CITY.] Annually, at a time fixed 
199.23  by charter, resolution, or ordinance of the city, the library 
199.24  board shall send its budget to the city council.  The budget 
199.25  must include a detailed written estimate of the amount of money 
199.26  that the library board expects to need from the city to operate 
199.27  the library agency during the next fiscal year in excess of any 
199.28  expected receipts from other sources. 
199.29     Subd. 2.  [FISCAL YEAR.] The fiscal year of the library 
199.30  agency must be the same as the fiscal year of the city. 
199.31     Subd. 3.  [CITY LEVY.] The city shall, at the request of 
199.32  the library board, levy a tax in any year for the benefit of the 
199.33  library agency.  The amount collected pursuant to the levy must 
199.34  be used by the city treasurer exclusively for operations of the 
199.35  library agency. 
199.36     <h>[EFFECTIVE DATE.]</h> This section is effective the day after 
200.1   the governing body of St. Paul and its chief clerical officer 
200.2   timely complete their compliance with Minnesota Statutes, 
200.3   section 645.021, subdivisions 2 and 3. 
200.4      Sec. 45.  [ST. PAUL LIBRARY AGENCY GENERAL OBLIGATION 
200.5   BONDS.] 
200.6      Subdivision 1.  [POWER; PROCEDURE.] The St. Paul library 
200.7   agency may issue bonds in the principal amount authorized by the 
200.8   city council.  The bonds may be issued in anticipation of income 
200.9   from any source.  The bonds may be issued: 
200.10     (1) to secure funds needed by the library agency to pay for 
200.11  acquired real or personal property; or 
200.12     (2) for capital improvements to property owned or used by 
200.13  the library. 
200.14     The bonds must be in the amount and form and bear interest 
200.15  at the rate set by the city council.  Except as otherwise 
200.16  provided in this section, the issuance of the bonds is governed 
200.17  by Minnesota Statutes, chapter 475.  The library agency when 
200.18  issuing the bonds is a municipality under Minnesota Statutes, 
200.19  chapter 475.  Notwithstanding any city charter provision or any 
200.20  general or special law to the contrary, the bonds may be issued 
200.21  and sold without submission of the question to the electors of 
200.22  the city, provided that the ordinance of the city council 
200.23  authorizing issuance of the bonds by the library agency is 
200.24  subject to provisions in the city charter pertaining to the 
200.25  procedure for referendum on ordinances enacted by the city 
200.26  council. 
200.27     Subd. 2.  [OUTSIDE DEBT LIMIT.] Bonds issued by the library 
200.28  agency must not be included in the net debt of the city of St. 
200.29  Paul.  Money received under this section must not be included in 
200.30  a per capita limit on taxing or spending in the city charter.  
200.31  The library agency is also exempt from the limit. 
200.32     Subd. 3.  [PLEDGE.] The bonds must be secured by the pledge 
200.33  of the full faith, credit, and resources of the city of St. 
200.34  Paul.  The city council must first decide whether the issuance 
200.35  of the bonds by the library agency is proper in each case and, 
200.36  if so, the amount of bonds to issue.  The city council shall 
201.1   give specific consent in an ordinance to the pledge of the 
201.2   city's full faith, credit, and resources.  The city shall pay 
201.3   the principal amount of the bonds and the interest on them from 
201.4   taxes levied under this section to make the payment or from 
201.5   library board income from any source. 
201.6      <h>[EFFECTIVE DATE.]</h> This section is effective the day after 
201.7   the governing body of St. Paul and its chief clerical officer 
201.8   timely complete their compliance with Minnesota Statutes, 
201.9   section 645.021, subdivisions 2 and 3. 
201.10     Sec. 46.  [CITY OF AFTON; EARLY TERMINATION OF AGRICULTURAL 
201.11  PRESERVE.] 
201.12     Notwithstanding Minnesota Statutes, sections 473H.08 and 
201.13  473H.09, providing for the duration and early termination of a 
201.14  metropolitan agricultural preserve, the city of Afton may 
201.15  initiate expiration of a parcel of land from an agricultural 
201.16  preserve for which the landowner has previously initiated 
201.17  expiration under Minnesota Statutes, section 473H.08, 
201.18  subdivision 2, located in the city of Afton, Washington county, 
201.19  and described as:  
201.20     the Northeast Quarter of the Northeast Quarter of Section 
201.21  29, Township 28 North, Range 20 West of the Fourth Principal 
201.22  Meridian. 
201.23     The effective date of the expiration may be on any date 
201.24  after the effective date of this section as determined by the 
201.25  Afton city council, once the council has otherwise complied with 
201.26  the procedural requirements of Minnesota Statutes, sections 
201.27  473H.04 and 473H.08.  All benefits accruing to the parcel as an 
201.28  agricultural preserve, including benefits relating to the 
201.29  valuation and assessment of the parcel for ad valorem property 
201.30  taxes under Minnesota Statutes, chapter 273, and section 
201.31  473H.10, shall cease on the date of expiration.  
201.32     <h>[EFFECTIVE DATE.]</h> This section is effective without local 
201.33  approval on the day following final enactment. 
201.34     Sec. 47.  [ADDITIONAL DISTRIBUTION.] 
201.35     The difference between the distribution to school districts 
201.36  under Minnesota Statutes, sections 298.225 and 298.28, as 
202.1   amended by this act, and the amount the districts would have 
202.2   received under Minnesota Statutes 2000, sections 298.225 and 
202.3   298.28 for distributions in 2004 only, shall be added to the 
202.4   sums available for expenditure under Minnesota Statutes, section 
202.5   298.293, as governed by Minnesota Statutes, section 298.296. 
202.6      Sec. 48.  [REPEALER.] 
202.7      Laws 2001, First Special Session chapter 5, article 3, 
202.8   section 88, is repealed. 
202.9      <h>[EFFECTIVE DATE.]</h> This section is effective July 1, 2002. 
202.10                             ARTICLE 17
202.11                         LOCAL DEVELOPMENT
202.12     Section 1.  Minnesota Statutes 2000, section 272.0212, 
202.13  subdivision 1, is amended to read: 
202.14     Subdivision 1.  [EXEMPTION.] All qualified property in a 
202.15  zone is exempt to the extent and for the duration provided by 
202.16  the zone designation and under sections 469.1731 to 469.1735 to 
202.17  the extent limited by this section. 
202.18     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
202.19  following final enactment. 
202.20     Sec. 2.  Minnesota Statutes 2000, section 272.0212, 
202.21  subdivision 4, is amended to read: 
202.22     Subd. 4.  [DEFINITIONS.] (a) For purposes of this section, 
202.23  the following terms have the meanings given. 
202.24     (b) "City" means a statutory or home rule charter city. 
202.25     (c) "Qualified property" means class 3 and: 
202.26     (1) class 1, 3, 4, and 5 property as defined in section 
202.27  273.13 that is located in a zone and is newly constructed after 
202.28  the zone was designated, including the land that contains the 
202.29  improvements; and 
202.30     (2) property qualifying under subdivision 6. 
202.31     (c) (d) "Zone" means a border city development zone 
202.32  designated under the provisions of section 469.1731. 
202.33     <h>[EFFECTIVE DATE.]</h> This section is effective beginning for 
202.34  assessment year 2003. 
202.35     Sec. 3.  Minnesota Statutes 2000, section 272.0212, is 
202.36  amended by adding a subdivision to read: 
203.1      Subd. 6.  [NEWLY CONSTRUCTED PROPERTY.] (a) This 
203.2   subdivision applies in the following cities: 
203.3      (1) The governing body of a city authorized to establish a 
203.4   zone may, by resolution, grant an exemption under the provisions 
203.5   of this subdivision. 
203.6      (2) The governing body of a city, other than a city under 
203.7   clause (1), that is located in a county containing a city that 
203.8   is authorized to establish a zone may, by resolution, grant an 
203.9   exemption under the provisions of this subdivision. 
203.10     (b) The authority under this subdivision applies to the 
203.11  entire area of the city and is not limited to the designated 
203.12  area of a zone. 
203.13     (c) An exemption under this subdivision may only be granted:
203.14     (1) to property, excluding land, that is not qualified 
203.15  property under subdivision 4, paragraph (c), clause (1), and 
203.16  that is classified as: 
203.17     (i) class 1 under section 273.13, subdivision 22; 
203.18     (ii) class 2 for the house and garage only under section 
203.19  273.13, subdivision 23; or 
203.20     (iii) class 4 for the portion of the property used for 
203.21  residential occupancy under section 273.13, subdivision 25; and 
203.22     (2) for the first two assessment years immediately 
203.23  following the year that the construction has begun. 
203.24     (d) In order to grant an exemption under this subdivision, 
203.25  the city must approve the exemption before building permits are 
203.26  issued for construction of the property.  The city must notify 
203.27  the official, designated by the governing body of the county, of 
203.28  each exemption by no later than June 1 of the first assessment 
203.29  year to which the exemption applies. 
203.30     (e) The provisions of subdivision 2, clauses (2) and (3), 
203.31  and subdivision 5, do not apply to this subdivision. 
203.32     <h>[EFFECTIVE DATE.]</h> This section is effective beginning for 
203.33  assessment year 2003. 
203.34     Sec. 4.  Minnesota Statutes 2000, section 290.06, is 
203.35  amended by adding a subdivision to read: 
203.36     Subd. 29.  [REGIONAL INVESTMENT CREDIT.] (a) A credit is 
204.1   allowed against the tax imposed by this chapter for investment 
204.2   in a qualifying regional angel investment network fund.  The 
204.3   credit equals 25 percent of the taxpayer's investment made in 
204.4   the fund for the taxable year, but not to exceed the lesser of: 
204.5      (1) the liability for tax under this chapter, including the 
204.6   applicable alternative minimum tax; or 
204.7      (2) the amount of the certificate under paragraph (c) 
204.8   provided to the taxpayer by the fund. 
204.9      (b) For purposes of this subdivision, a regional angel 
204.10  investment network fund means a pool investment fund that: 
204.11     (1) is organized as a limited liability company and 
204.12  consists of members who are accredited investors within the 
204.13  meaning of Regulation D of the Securities and Exchange 
204.14  Commission, Code of Federal Regulations, title 17, section 
204.15  230.501(a), and at least one member of which is certified as a 
204.16  community development financial institution by the United States 
204.17  Department of Treasury; and 
204.18     (2) primarily makes equity investments in emerging 
204.19  companies that are located in local communities in Minnesota 
204.20  outside of the metropolitan area as defined in section 473.121, 
204.21  subdivision 2. 
204.22     (c) Regional angel investment network funds may apply to 
204.23  the commissioner of trade and economic development for 
204.24  certification as a qualifying regional angel investment net 
204.25  fund.  The application must be in the form and made under 
204.26  procedures specified by the commissioner of trade and economic 
204.27  development.  The commissioner of trade and economic development 
204.28  may certify up to ten qualifying funds and provide certificates 
204.29  entitling investors in the funds to credits under this 
204.30  subdivision of up to $250,000 for each ($2,500,000 in total 
204.31  credits authorized).  In awarding certificates under this 
204.32  paragraph, the commissioner of trade and economic development 
204.33  shall seek to certify funds that are broadly dispersed across 
204.34  the entire state outside of the metropolitan area, as defined in 
204.35  section 473.121, subdivision 2. 
204.36     (d) The commissioner may require a taxpayer to provide a 
205.1   copy of the credit certificate under paragraph (c) to verify the 
205.2   taxpayer's entitlement to a credit under this subdivision. 
205.3      (e) If the amount of the credit under this subdivision for 
205.4   any taxable year exceeds the limitation under paragraph (a), 
205.5   clause (1), the excess is a credit carryover to each of the 15 
205.6   succeeding taxable years.  The entire amount of the excess 
205.7   unused credit for the taxable year must be carried first to the 
205.8   earliest of the taxable years to which the credit may be carried 
205.9   and then to each successive year to which the credit may be 
205.10  carried.  The amount of the unused credit which may be added 
205.11  under this paragraph may not exceed the taxpayer's liability for 
205.12  tax less the credit for the taxable year. 
205.13     (f) $2,500,000 is appropriated from the general fund in 
205.14  fiscal year 2003 to the commissioner of trade and economic 
205.15  development for the regional investment credit.  This 
205.16  appropriation is available until expended. 
205.17     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
205.18  following final enactment and for taxable years beginning after 
205.19  December 31, 2001.  It applies to investments made after the 
205.20  fund has been certified by the commissioner of trade and 
205.21  economic development under this section. 
205.22     Sec. 5.  Minnesota Statutes 2001 Supplement, section 
205.23  469.1734, subdivision 6, is amended to read: 
205.24     Subd. 6.  [SALES TAX EXEMPTION; EQUIPMENT; CONSTRUCTION 
205.25  MATERIALS.] (a) The gross receipts from the sale of machinery 
205.26  and equipment and repair parts are exempt from taxation under 
205.27  chapter 297A, if the machinery and equipment: 
205.28     (1) are used in connection with a trade or business; 
205.29     (2) are placed in service in a city that is authorized to 
205.30  designate a zone under section 469.1731, regardless of whether 
205.31  the machinery and equipment are used in a zone; and 
205.32     (3) have a useful life of 12 months or more. 
205.33     (b) The gross receipts from the sale of construction 
205.34  materials are exempt, if they are used to construct: 
205.35     (1) a facility for use in a trade or business located in a 
205.36  city that is authorized to designate a zone under section 
206.1   469.1731, regardless of whether the facility is located in a 
206.2   zone; or 
206.3      (2) housing that is located in a zone.  
206.4   The exemptions under this paragraph apply regardless of whether 
206.5   the purchase is made by the owner, the user, or a contractor. 
206.6      (c) A purchaser may claim an exemption under this 
206.7   subdivision for tax on the purchases up to, but not exceeding: 
206.8      (1) the amount of the tax credit certificates received from 
206.9   the city, less 
206.10     (2) any tax credit certificates used under the provisions 
206.11  of subdivisions 4 and 5, and section 469.1732, subdivision 2. 
206.12     (d) The tax on sales of items exempted under this 
206.13  subdivision shall be imposed and collected as if the applicable 
206.14  rate under section 297A.62 applied.  Upon application by the 
206.15  purchaser, on forms prescribed by the commissioner, a refund 
206.16  equal to the tax paid shall be paid to the purchaser.  The 
206.17  application must include sufficient information to permit the 
206.18  commissioner to verify the sales tax paid and the eligibility of 
206.19  the claimant to receive the credit.  No more than two 
206.20  applications for refunds may be filed under this subdivision in 
206.21  a calendar year.  The provisions of section 289A.40 apply to the 
206.22  refunds payable under this subdivision.  There is annually 
206.23  appropriated to the commissioner of revenue the amount required 
206.24  to make the refunds, which must be deducted from the amount of 
206.25  the city's allocation under section 469.169, subdivision 12, 
206.26  that remains available and its limitation under section 469.1735.
206.27  The amount to be refunded shall bear interest at the rate in 
206.28  section 270.76 from the date the refund claim is filed with the 
206.29  commissioner. 
206.30     <h>[EFFECTIVE DATE.]</h> This section is effective for sales made 
206.31  after June 30, 2002. 
206.32     Sec. 6.  Minnesota Statutes 2001 Supplement, section 
206.33  469.1763, subdivision 6, is amended to read: 
206.34     Subd. 6.  [POOLING PERMITTED FOR DEFICITS.] (a) This 
206.35  subdivision applies only to districts for which the request for 
206.36  certification was made before August 1, 2001, and without regard 
207.1   to whether the request for certification was made prior to 
207.2   August 1, 1979. 
207.3      (b) The municipality for the district may transfer 
207.4   available increments from another tax increment financing 
207.5   district located in the municipality, if the transfer is 
207.6   necessary to eliminate a deficit in the district to which the 
207.7   increments are transferred.  A deficit in the district for 
207.8   purposes of this subdivision means the lesser of the following 
207.9   two amounts: 
207.10     (1)(i) the amount due during the calendar year to pay 
207.11  preexisting obligations of the district; minus 
207.12     (ii) the total increments to be collected from properties 
207.13  located within the district that are available for the calendar 
207.14  year; plus 
207.15     (iii) total increments from properties located in other 
207.16  districts in the municipality that are available to be used to 
207.17  meet the district's obligations under this section, excluding 
207.18  this subdivision, or other provisions of law (but excluding a 
207.19  special tax under section 469.1791 and the grant program under 
207.20  Laws 1997, chapter 231, article 1, section 19, or Laws 2001, 
207.21  First Special Session chapter 5); or 
207.22     (2) the reduction in increments collected from properties 
207.23  located in the district for the calendar year as a result of the 
207.24  changes in class rates in Laws 1997, chapter 231, article 1; 
207.25  Laws 1998, chapter 389, article 2; and Laws 1999, chapter 243, 
207.26  and Laws 2001, First Special Session chapter 5, or the 
207.27  elimination of the general education tax levy under Laws 2001, 
207.28  First Special Session chapter 5. 
207.29     (c) A preexisting obligation means: 
207.30     (1) bonds issued and sold before August 1, 2001, or bonds 
207.31  issued pursuant to a binding contract requiring the issuance of 
207.32  bonds entered into before July 1, 2001, and bonds issued to 
207.33  refund such bonds or to reimburse expenditures made in 
207.34  conjunction with a signed contractual agreement entered into 
207.35  before August 1, 2001, to the extent that the bonds are secured 
207.36  by a pledge of increments from the tax increment financing 
208.1   district; and 
208.2      (2) binding contracts entered into before August 1, 2001, 
208.3   to the extent that the contracts require payments secured by a 
208.4   pledge of increments from the tax increment financing district. 
208.5      (d) The municipality may require a development authority, 
208.6   other than a seaway port authority, to transfer available 
208.7   increments for any of its tax increment financing districts in 
208.8   the municipality to make up an insufficiency in another district 
208.9   in the municipality, regardless of whether the district was 
208.10  established by the development authority or another development 
208.11  authority.  This authority applies notwithstanding any law to 
208.12  the contrary, but applies only to a development authority that: 
208.13     (1) was established by the municipality; or 
208.14     (2) the governing body of which is appointed, in whole or 
208.15  part, by the municipality or an officer of the municipality or 
208.16  which consists, in whole or part, of members of the governing 
208.17  body of the municipality.  The municipality may use this 
208.18  authority only after it has first used all available increments 
208.19  of the receiving development authority to eliminate the 
208.20  insufficiency and exercised any permitted action under section 
208.21  469.1792, subdivision 3, for preexisting districts of the 
208.22  receiving development authority to eliminate the insufficiency. 
208.23     (e) The authority under this subdivision to spend tax 
208.24  increments outside of the area of the district from which the 
208.25  tax increments were collected: 
208.26     (1) may only be exercised after obtaining approval of the 
208.27  use of the increments, in writing, by the commissioner of 
208.28  revenue; 
208.29     (2) is an exception to the restrictions under section 
208.30  469.176, subdivision 4i, and the other provisions of this 
208.31  section, and the percentage restrictions under subdivision 2 
208.32  must be calculated after deducting increments spent under this 
208.33  subdivision from the total increments for the district; and 
208.34     (3) applies notwithstanding the provisions of the Tax 
208.35  Increment Financing Act in effect for districts for which the 
208.36  request for certification was made before June 30, 1982, or any 
209.1   other law to the contrary. 
209.2      (f) If a preexisting obligation requires the development 
209.3   authority to pay an amount that is limited to the increment from 
209.4   the district or a specific development within the district and 
209.5   if the obligation requires paying a higher amount to the extent 
209.6   that increments are available, the municipality may determine 
209.7   that the amount due under the preexisting obligation equals the 
209.8   higher amount and may authorize the transfer of increments under 
209.9   this subdivision to pay up to the higher amount.  The existence 
209.10  of a guarantee of obligations by the individual or entity that 
209.11  would receive the payment under this paragraph is disregarded in 
209.12  the determination of eligibility to pool under this 
209.13  subdivision.  The authority to transfer increments under this 
209.14  paragraph may only be used to the extent that the payment of all 
209.15  other preexisting obligations in the municipality due during the 
209.16  calendar year have been satisfied. 
209.17     <h>[EFFECTIVE DATE.]</h> This section is effective for increments 
209.18  payable in 2002 and thereafter. 
209.19     Sec. 7.  Minnesota Statutes 2001 Supplement, section 
209.20  469.1792, subdivision 1, is amended to read: 
209.21     Subdivision 1.  [SCOPE.] This section applies only to an 
209.22  authority with a preexisting district for which: 
209.23     (1)(i) the increments from the district were insufficient 
209.24  to pay preexisting obligations as a result of the class rate 
209.25  changes or the elimination of the state-determined general 
209.26  education property tax levy under this act, or both; or 
209.27     (ii) (2)(i) the development authority has a binding 
209.28  contract with a person requiring the authority to pay to the 
209.29  person an amount that may not exceed the increment from the 
209.30  district or a specific development within the district and as a 
209.31  result of the reduction in increment because of the class rate 
209.32  changes or the elimination of the state-determined general 
209.33  education property tax levy under this act, or both,; and 
209.34     (ii) the authority is unable to pay the full amount under 
209.35  the contract from the pledged increments or other increments 
209.36  from the district that would have been due if the class rate 
210.1   changes or elimination of the state-determined general education 
210.2   property tax levy or both had not been made under Laws 2001, 
210.3   First Special Session chapter 5; and 
210.4      (2) the municipality exercised its full authority to pool 
210.5   under section 469.1763, subdivision 6, and the transfer of 
210.6   increments did not eliminate the insufficiency under clause (1), 
210.7   item (i), or the inability to pay the full amount under clause 
210.8   (1), item (ii); or 
210.9      (3) the authority amends its tax increment financing plan 
210.10  to establish an affordable housing account to which increments 
210.11  are pledged. 
210.12     <h>[EFFECTIVE DATE.]</h> This section is effective for actions 
210.13  taken and resolutions approved after June 30, 2002. 
210.14     Sec. 8.  Minnesota Statutes 2001 Supplement, section 
210.15  469.1792, subdivision 2, is amended to read: 
210.16     Subd. 2.  [DEFINITIONS.] (a) For purposes of this section, 
210.17  the following terms have the meanings given. 
210.18     (b) "Preexisting district" means a tax increment financing 
210.19  district for which the request for certification was made before 
210.20  August 1, 2001 "Affordable housing account" means an account in 
210.21  which increment is deposited solely for affordable housing 
210.22  activities as defined in section 469.174, subdivision 11.  
210.23  Increment from the affordable housing account may be spent by an 
210.24  authority anywhere within its area of operation.  
210.25  Notwithstanding the definition of a project under section 
210.26  469.174, increments may be spent to assist housing that meets 
210.27  the requirements under section 469.1761.  Any transfers of 
210.28  increment to the affordable housing account shall be outside the 
210.29  limitations imposed by section 469.1763, subdivision 2. 
210.30     (c) "Preexisting district" means a tax increment financing 
210.31  district for which the request for certification was made before 
210.32  August 1, 2001. 
210.33     (d) "Preexisting obligation" means: 
210.34     (1) a bond or binding contract that: 
210.35     (1) (i) was issued or approved before August 1, 2001, or 
210.36  was issued pursuant to a binding contract entered into before 
211.1   August 1, 2001; and 
211.2      (2) (ii) is secured by increments from a preexisting 
211.3   district; and 
211.4      (2) any tax increment eligible expense specifically 
211.5   described in the preexisting plan which the authority intends to 
211.6   finance with tax increments generated from the preexisting 
211.7   district.  Modification of a preexisting plan after August 1, 
211.8   2001, to increase tax increment eligible expenses within a 
211.9   preexisting district shall not be considered a preexisting 
211.10  obligation. 
211.11     (e) "Preexisting plan" means a tax increment financing plan 
211.12  approved and adopted by an authority prior to August 1, 2001, in 
211.13  conjunction with the preexisting district. 
211.14     <h>[EFFECTIVE DATE.]</h> This section is effective for actions 
211.15  taken and resolutions approved after June 30, 2002. 
211.16     Sec. 9.  [469.1794] [TIF GRANTS; APPROPRIATIONS.] 
211.17     Subdivision 1.  [TIF GRANTS.] (a) In calendar year 2003 and 
211.18  thereafter, the commissioner of revenue shall pay grants to 
211.19  municipalities for deficits in tax increment financing districts 
211.20  caused by the changes in class rates and the elimination of the 
211.21  state-determined general education property tax levy under Laws 
211.22  2001, First Special Session chapter 5.  Municipalities must 
211.23  submit applications for the grants in a form prescribed by the 
211.24  commissioner no later than August 1 for grants payable during 
211.25  the calendar year.  The maximum grant equals the lesser of: 
211.26     (1) for taxes payable in the year before the grant is paid, 
211.27  the reduction in the tax increment financing district's revenues 
211.28  derived from increment resulting from the class rate changes and 
211.29  the elimination of the state-determined general education 
211.30  property tax levy under Laws 2001, First Special Session chapter 
211.31  5; or 
211.32     (2) the amount due during the calendar year to pay: 
211.33     (i) a preexisting obligation as defined in section 
211.34  469.1763, subdivision 6, but excluding the additional amount of 
211.35  a preexisting obligation that the municipality elects to include 
211.36  under paragraph (f) of that subdivision with respect to a 
212.1   preexisting obligation to a developer or property owner in the 
212.2   district or an assignee or successor in interest; less 
212.3      (ii) the municipality's total tax increments, including 
212.4   unspent increments from previous years; 
212.5      (iii) the amount of any state aid reductions that would 
212.6   have applied to any district in the municipality for the 
212.7   calendar year, if Minnesota Statutes 2000, section 273.1399, had 
212.8   not been repealed; and 
212.9      (iv) the amount of any unpaid local contributions that the 
212.10  municipality would have been required to make for the calendar 
212.11  year under an election under Minnesota Statutes 2000, section 
212.12  273.1399, subdivision 6, if that subdivision had not been 
212.13  repealed. 
212.14     (b) The commissioner of revenue may require applicants for 
212.15  grants under this section to provide any information the 
212.16  commissioner deems appropriate.  The commissioner shall 
212.17  calculate the amount under paragraph (a), clause (2), based on 
212.18  the reports for the tax increment financing district or 
212.19  districts filed with the state auditor on or before August 1 of 
212.20  the year in which the grant is to be paid. 
212.21     (c) This subdivision applies only to deficits in tax 
212.22  increment districts for which: 
212.23     (1) the request for certification of the district, or a 
212.24  district transferred under special law, was made before August 
212.25  1, 2001; 
212.26     (2) all timely reports have been filed with the state 
212.27  auditor, as required by section 469.175; and 
212.28     (3) the authority and municipality have exercised any 
212.29  permitted action under section 469.1792, subdivision 3, to 
212.30  increase increments to pay preexisting obligations as defined 
212.31  under this section. 
212.32     (d) The commissioner shall pay the grants under this 
212.33  section by December 26 of the year. 
212.34     (e) For the purposes of this section, "tax increments" and 
212.35  "revenues derived from tax increments" have the meanings given 
212.36  in section 469.174, subdivision 25, except that the definition 
213.1   applies to all tax increment districts, regardless of when the 
213.2   request for certification was made and regardless of when the 
213.3   revenues were received, notwithstanding the effective date of 
213.4   section 469.174, subdivision 25.  For purposes of this section, 
213.5   "bonds" and "binding contracts" do not include interfund loans. 
213.6      (f) If the district was authorized or certified pursuant to 
213.7   a special law and the special law permitted original tax 
213.8   capacity to be reduced to zero, the required dates under 
213.9   paragraph (a), clause (2), and paragraph (c), clause (1), are 
213.10  extended to December 31, 2001. 
213.11     Subd. 2.  [APPROPRIATION.] $10,000,000 is appropriated in 
213.12  fiscal year 2003 to the commissioner of revenue from the general 
213.13  fund to make grants under this section. 
213.14     Sec. 10.  Minnesota Statutes 2001 Supplement, section 
213.15  469.1813, subdivision 6, is amended to read: 
213.16     Subd. 6.  [DURATION LIMIT.] (a) A political subdivision may 
213.17  grant an abatement for a period no longer than ten years, except 
213.18  as provided under paragraph paragraphs (b) and (c).  The 
213.19  subdivision may specify in the abatement resolution a shorter 
213.20  duration.  If the resolution does not specify a period of time, 
213.21  the abatement is for eight years.  If an abatement has been 
213.22  granted to a parcel of property and the period of the abatement 
213.23  has expired, the political subdivision that granted the 
213.24  abatement may not grant another abatement for eight years after 
213.25  the expiration of the first abatement.  This prohibition does 
213.26  not apply to improvements added after and not subject to the 
213.27  first abatement. 
213.28     (b) A political subdivision proposing to abate taxes for a 
213.29  parcel may request, in writing, that the other political 
213.30  subdivisions in which the parcel is located grant an abatement 
213.31  for the property.  If one of the other political subdivisions 
213.32  declines, in writing, to grant an abatement or if 90 days pass 
213.33  after receipt of the request to grant an abatement without a 
213.34  written response from one of the political subdivisions, the 
213.35  duration limit for an abatement for the parcel by the requesting 
213.36  political subdivision and any other participating political 
214.1   subdivision is increased to 15 years.  If the political 
214.2   subdivision which declined to grant an abatement later grants an 
214.3   abatement for the parcel, the 15-year duration limit is reduced 
214.4   by one year for each year that the declining political 
214.5   subdivision grants an abatement for the parcel during the period 
214.6   of the abatement granted by the requesting political 
214.7   subdivision.  The duration limit may not be reduced below the 
214.8   limit under paragraph (a).  
214.9      (c) For a property that is used in the operation of a 
214.10  qualified business, as defined in section 469.193, a political 
214.11  subdivision may grant an abatement for a period of up to 20 
214.12  years, notwithstanding paragraph (a) or (b). 
214.13     <h>[EFFECTIVE DATE.]</h> This section is effective for abatement 
214.14  resolutions approved after June 30, 2002. 
214.15     Sec. 11.  [469.193] [DEFINITION OF QUALIFIED BUSINESS.] 
214.16     (a) The definition of a "qualified business" in this 
214.17  section applies for purposes of section 469.1813, subdivision 6. 
214.18     (b) To be a "qualified business," the operations of the 
214.19  business that qualify for tax or other state provided incentives 
214.20  must be: 
214.21     (1) located outside of the metropolitan area, as defined in 
214.22  section 473.121, subdivision 2; and 
214.23     (2) at least 50 percent of the payroll of the business is 
214.24  for employees engaged in one of the following lines of business 
214.25  or any combination of them: 
214.26     (i) manufacturing; 
214.27     (ii) agricultural processing; 
214.28     (iii) mining; 
214.29     (iv) research and development; 
214.30     (v) warehousing; or 
214.31     (vi) qualified high technology. 
214.32     (c)(1) "Manufacturing" means the material staging and 
214.33  production of tangible personal property by procedures commonly 
214.34  regarded as manufacturing, processing, fabrication, or 
214.35  assembling which changes some existing material into new shapes, 
214.36  new qualities, or new combinations. 
215.1      (2) "Mining" has the meaning given in section 613(c) of the 
215.2   Internal Revenue Code of 1986. 
215.3      (3) "Agricultural processing" means transforming, 
215.4   packaging, sorting, or grading livestock or livestock products, 
215.5   agricultural commodities, or plants or plant products into goods 
215.6   that are used for intermediate or final consumption including 
215.7   goods for nonfood use. 
215.8      (4) "Research and development" means qualified research as 
215.9   defined in section 41(d) of the Internal Revenue Code of 1986. 
215.10     (5) "Qualified high technology" means one or more of the 
215.11  following activities: 
215.12     (i) advanced computing, which is any technology used in the 
215.13  design and development of any of the following: 
215.14     (A) computer hardware and software; 
215.15     (B) data communications; and 
215.16     (C) information technologies; 
215.17     (ii) advanced materials, which are materials with 
215.18  engineered properties created through the development of 
215.19  specialized process and synthesis technology; 
215.20     (iii) biotechnology, which is any technology that uses 
215.21  living organisms, cells, macromolecules, microorganisms, or 
215.22  substances from living organisms to make or modify a product, 
215.23  improve plants or animals, or develop microorganisms for useful 
215.24  purposes; 
215.25     (iv) electronic device technology, which is any technology 
215.26  that involves microelectronics, semiconductors, electronic 
215.27  equipment, and instrumentation, radio frequency, microwave, and 
215.28  millimeter electronics, and optical and optic-electrical 
215.29  devices, or data and digital communications and imaging devices; 
215.30     (v) engineering or laboratory testing related to the 
215.31  development of a product; 
215.32     (vi) technology that assists in the assessment or 
215.33  prevention of threats or damage to human health or the 
215.34  environment, including, but not limited to, environmental 
215.35  cleanup technology, pollution prevention technology, or 
215.36  development of alternative energy sources; 
216.1      (vii) medical device technology, which is any technology 
216.2   that involves medical equipment or products other than a 
216.3   pharmaceutical product that has therapeutic or diagnostic value 
216.4   and is regulated; or 
216.5      (viii) advanced vehicles technology which is any technology 
216.6   that involves electric vehicles, hybrid vehicles, or alternative 
216.7   fuel vehicles, or components used in the construction of 
216.8   electric vehicles, hybrid vehicles, or alternative fuel 
216.9   vehicles.  An electric vehicle is a road vehicle that draws 
216.10  propulsion energy only from an on-board source of electrical 
216.11  energy.  A hybrid vehicle is a road vehicle that can draw 
216.12  propulsion energy from both a consumable fuel and a rechargeable 
216.13  energy storage system. 
216.14     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
216.15  following final enactment. 
216.16     Sec. 12.  Laws 1995, chapter 264, article 5, section 45, 
216.17  subdivision 1, as amended by Laws 1996, chapter 471, article 7, 
216.18  section 22, and Laws 1997, chapter 231, article 10, section 13, 
216.19  is amended to read: 
216.20     Subdivision 1.  [CREATION OF PROJECTS.] (a) An authority 
216.21  may create a housing replacement project under sections 44 to 
216.22  47, as provided in this section. 
216.23     (b) For the cities of Crystal, Fridley, Richfield, and 
216.24  Columbia Heights, the authority may designate up to 50 parcels 
216.25  in the city to be included in a housing replacement district.  
216.26  No more than ten parcels may be included in year one of the 
216.27  district, with up to ten additional parcels added to the 
216.28  district in each of the following nine years.  For the cities of 
216.29  Minneapolis, St. Paul, and Duluth, each authority may designate 
216.30  up to 100 not more than 200 parcels in the city to be included 
216.31  in a housing replacement district over the life of the 
216.32  district.  The only parcels that may be included in a district 
216.33  are (1) vacant sites, (2) parcels containing vacant houses, or 
216.34  (3) parcels containing houses that are structurally substandard, 
216.35  as defined in Minnesota Statutes, section 469.174, subdivision 
216.36  10.  
217.1      (c) The city in which the authority is located must pay at 
217.2   least 25 percent of the housing replacement project costs from 
217.3   its general fund, a property tax levy, or other unrestricted 
217.4   money, not including tax increments. 
217.5      (d) The housing replacement district plan must have as its 
217.6   sole object the acquisition of parcels for the purpose of 
217.7   preparing the site to be sold for market rate housing.  As used 
217.8   in this section, "market rate housing" means housing that has a 
217.9   market value that does not exceed 150 percent of the average 
217.10  market value of single-family housing in that municipality. 
217.11     Sec. 13.  [CITY OF ALBERT LEA; TAX INCREMENT FINANCING 
217.12  DISTRICT.] 
217.13     Subdivision 1.  [AUTHORIZATION.] The governing body of the 
217.14  city of Albert Lea may create a redevelopment tax increment 
217.15  financing district as provided in this section.  The city or its 
217.16  port authority may be the "authority" for the purposes of 
217.17  Minnesota Statutes, sections 469.174 to 469.179. 
217.18     Subd. 2.  [DEFINITIONS.] (a) For the purposes of this 
217.19  section, the terms defined in this subdivision have the meanings 
217.20  given them. 
217.21     (b) "Redevelopment parcel" means the property in the city 
217.22  of Albert Lea bounded by Main Street, Garfield Avenue, Front 
217.23  Street, the Union Pacific railway line, and Albert Lea lake. 
217.24     (c) "Reconstruction parcel" means the property in the city 
217.25  of Albert Lea described as lot 1, block 5, Habben First Addition.
217.26     Subd. 3.  [SPECIAL RULES.] (a) The district established 
217.27  under this section is subject to the provisions of Minnesota 
217.28  Statutes, sections 469.174 to 469.179, except as provided in 
217.29  this subdivision. 
217.30     (b) The district may consist of the redevelopment parcel 
217.31  and the reconstruction parcel. 
217.32     (c) Minnesota Statutes, section 469.174, subdivision 10, 
217.33  paragraph (f), does not apply to the district, and if the city 
217.34  finds that the redevelopment parcel meets the criteria described 
217.35  in Minnesota Statutes, section 469.174, subdivision 10, 
217.36  paragraph (a), clause (1), then both the redevelopment parcel 
218.1   and the reconstruction parcel and the district as a whole are 
218.2   considered to meet those criteria. 
218.3      (d) Expenditures for activities, as defined in Minnesota 
218.4   Statutes, section 469.1763, subdivision 1, paragraph (b), 
218.5   anywhere within the district are considered costs of correcting 
218.6   conditions that allow designation of redevelopment districts 
218.7   within the meaning of Minnesota Statutes, section 469.176, 
218.8   subdivision 4j. 
218.9      (e) For the purposes of Minnesota Statutes, section 
218.10  469.1763, subdivision 3, expenditures on the redevelopment 
218.11  parcel are considered to have been expended on an activity 
218.12  within the district if a qualifying action occurs within ten 
218.13  years after certification of the district. 
218.14     <h>[EFFECTIVE DATE.]</h> This section is effective upon local 
218.15  approval in compliance with the requirements of Minnesota 
218.16  Statutes, section 645.021. 
218.17     Sec. 14.  [CITY OF MINNEAPOLIS TAX INCREMENT DISTRICT; 
218.18  HAZARDOUS SUBSTANCE SUBDISTRICT ALLOWED; DURATION EXTENSION.] 
218.19     (a) Upon approval of the city council of the city of 
218.20  Minneapolis, the Minneapolis community development agency may 
218.21  take the following actions with respect to the east Hennepin and 
218.22  University tax increment district: 
218.23     (1) notwithstanding Minnesota Statutes, section 469.176, 
218.24  subdivision 1b, extend the duration of the district for a period 
218.25  of up to seven years, or until all amounts payable to the 
218.26  developers and to the agency to reimburse the agency's provision 
218.27  of $1,100,000 of city of Minneapolis HOME funds to assist 
218.28  low-income housing are repaid, whichever is shorter; and 
218.29     (2) notwithstanding Minnesota Statutes, section 469.175, 
218.30  subdivision 7d, create a hazardous substance subdistrict 
218.31  encompassing the entire east Hennepin and University tax 
218.32  increment district, and continue the subdistrict for the time, 
218.33  not to exceed the duration of the underlying district, necessary 
218.34  to reimburse the project developers the amount of $950,000 to 
218.35  repay the Hennepin county hazardous substance loan funds that 
218.36  were loaned to the developers and used for remediation within 
219.1   the district. 
219.2      (b) Minnesota Statutes, section 469.1782, subdivision 2, 
219.3   does not apply to the duration extension under this section. 
219.4      (c) This section is effective upon compliance by the 
219.5   Minneapolis city council with the requirements of Minnesota 
219.6   Statutes, section 645.021. 
219.7      Sec. 15.  [CITY OF MINNEAPOLIS TAX INCREMENT DISTRICT; 
219.8   DURATION EXTENSION.] 
219.9      (a) Upon approval of the city council of the city of 
219.10  Minneapolis, the Minneapolis community development agency may, 
219.11  with respect to the southeast Minneapolis industrial area 
219.12  redevelopment area phase 4 tax increment financing district, 
219.13  notwithstanding Minnesota Statutes, section 469.176, subdivision 
219.14  1b, extend the duration of the district for a period of up to 
219.15  six years. 
219.16     (b) This section is effective upon compliance by the 
219.17  Minneapolis city council with the requirements of Minnesota 
219.18  Statutes, section 645.021. 
219.19     (c) Upon payment in full of the Minneapolis community 
219.20  development agency amended and restated tax increment revenue 
219.21  note, in the original face amount of $1,000,000, issued December 
219.22  4, 1997, the district shall terminate and the authority granted 
219.23  under this section shall terminate. 
219.24     (d) Minnesota Statutes, section 469.1782, subdivision 2, 
219.25  does not apply to the duration extension under this section. 
219.26     Sec. 16.  [GRANT TO WASHBURN-CROSBY PROJECT.] 
219.27     Notwithstanding the requirements of Minnesota Statutes, 
219.28  section 469.1794, the commissioner of revenue shall pay a 
219.29  one-time grant of $2,600,000 from the fund established in that 
219.30  section for the Washburn-Crosby Mill City Museum project as 
219.31  provided under Laws 2001, First Special Session chapter 5, 
219.32  article 15, section 39.  The grant must be disbursed on July 1, 
219.33  2002, from the appropriation under section 9. 
219.34     Sec. 17.  [RUSHFORD TAX INCREMENT FINANCING EXTENSION.] 
219.35     The governing body of the city of Rushford may elect to 
219.36  extend the duration of its downtown redevelopment tax increment 
220.1   financing district by up to two additional years.  The city may 
220.2   apply for a grant under Minnesota Statutes, section 469.1799, 
220.3   for any deficit that occurs during any year of the district's 
220.4   duration, including the extension. 
220.5      <h>[EFFECTIVE DATE.]</h> This section is effective upon compliance 
220.6   with the requirements of Minnesota Statutes, sections 469.1782, 
220.7   subdivision 2; and 645.021. 
220.8      Sec. 18.  [CITY OF WEST ST. PAUL TAX INCREMENT DISTRICT 
220.9   EXTENSION.] 
220.10     The governing body of the city of West St. Paul may elect 
220.11  to extend the duration of its South Robert Street redevelopment 
220.12  tax increment financing district by up to five additional years. 
220.13     <h>[EFFECTIVE DATE.]</h> This section is effective upon approval 
220.14  by the governing body of the city of West St. Paul, and 
220.15  compliance with Minnesota Statutes, sections 469.1782, 
220.16  subdivision 2, and 645.021. 
220.17                             ARTICLE 18
220.18                 GENERAL PUBLIC FINANCE PROVISIONS
220.19     Section 1.  Minnesota Statutes 2000, section 117.075, is 
220.20  amended to read: 
220.21     117.075 [COURT TO APPOINT COMMISSIONERS.] 
220.22     Upon proof being filed of the service of such notice, the 
220.23  court, at the time and place therein fixed or to which the 
220.24  hearing may be adjourned, shall hear all competent evidence 
220.25  offered for or against the granting of the petition, regulating 
220.26  the order of proof as it may deem best.  If the proposed taking 
220.27  shall appear to be necessary and such as is authorized by law, 
220.28  the court by an order shall appoint three disinterested 
220.29  commissioners, and at least two alternates, residents of the 
220.30  county, to ascertain and report the amount of damages that will 
220.31  be sustained by the several owners on account of such taking.  
220.32     Before appointing a commissioner, the court shall inquire 
220.33  whether each prospective commissioner has any relationship, 
220.34  business or otherwise, to any of the parties in the proceeding, 
220.35  or any interest in the proceeding which may constitute a 
220.36  conflict of interest, or which may create the appearance of 
221.1   impropriety should that person be appointed.  Responses to this 
221.2   inquiry must be either written or on the record and made 
221.3   available by the court to any party in the proceeding before and 
221.4   after appointment.  No person who might have difficulty in 
221.5   rendering an unbiased decision may be appointed to serve.  The 
221.6   court, in its discretion, may appoint one registered, practicing 
221.7   attorney to the commission who is knowledgeable in eminent 
221.8   domain matters.  All other commissioners appointed must be 
221.9   persons actively engaged in the occupation of real estate sales 
221.10  or real estate appraising or persons knowledgeable in real 
221.11  estate values.  The order shall fix the time and place of the 
221.12  first meeting of the three commissioners and prescribe their 
221.13  compensation.  At the first meeting at the office of the court 
221.14  administrator of district court the appointees must be sworn by 
221.15  the court administrator or an authorized deputy and shall take 
221.16  and sign the following oath before assuming their duties as 
221.17  commissioners: 
221.18                       (TITLE OF PROCEEDING) 
221.19     .................................  does swear under penalty 
221.20     of perjury as follows: 
221.21     I will faithfully and justly perform to the best of my 
221.22     ability, all the duties of the office and trust which I now 
221.23     assume as commissioner in the above entitled proceeding.  I 
221.24     further swear that, except as disclosed in writing or on 
221.25     the record, I have no interest in any of the lands in the 
221.26     above proceeding or any present or past relationship, 
221.27     business or personal, with any of the parties to the above 
221.28     proceeding or any other actual or potential conflict of 
221.29     interest, and that I will render fair and impartial 
221.30     decisions, so help me God. 
221.31     The order may, in the discretion of the court, limit the 
221.32  title or easement to be acquired by the petitioner by defining 
221.33  the rights and privileges which the owner of any of the lands 
221.34  may exercise therein in subordination to the public uses to 
221.35  which it is appropriated.  In case any commissioner fails to act 
221.36  or fails to meet the qualifications required by this section, 
222.1   the court without further notice may appoint another in that 
222.2   commissioner's place.  
222.3      The court administrator of court in each county shall post 
222.4   in the courthouse in a prominent place a notice that a qualified 
222.5   person may apply to have the person's name placed upon a list of 
222.6   potential commission appointees for eminent domain proceedings. 
222.7   The notice must contain the language of the oath which the 
222.8   commissioners are required to take upon appointment and shall 
222.9   list the other qualifications set forth in this section.  The 
222.10  court shall give due consideration to the names appearing on the 
222.11  list, but is not bound to make appointments from the list. 
222.12     Sec. 2.  Minnesota Statutes 2000, section 118A.05, 
222.13  subdivision 5, is amended to read: 
222.14     Subd. 5.  [GUARANTEED INVESTMENT CONTRACTS.] Agreements or 
222.15  contracts for guaranteed investment contracts may be entered 
222.16  into if they are issued or guaranteed by United States 
222.17  commercial banks, domestic branches of foreign banks, United 
222.18  States insurance companies, or their Canadian subsidiaries.  The 
222.19  credit quality of the issuer's or guarantor's short- and 
222.20  long-term unsecured debt must be rated in one of the two highest 
222.21  categories by a nationally recognized rating agency.  Agreements 
222.22  or contracts for guaranteed investment contracts may also be 
222.23  entered into if they are issued or guaranteed by other financial 
222.24  institutions whose short- and long-term unsecured debt is rated 
222.25  in the highest rating category by a nationally recognized rating 
222.26  agency.  Should the issuer's or guarantor's credit quality be 
222.27  downgraded below "A", the government entity must have withdrawal 
222.28  rights. 
222.29     Sec. 3.  Minnesota Statutes 2000, section 287.01, 
222.30  subdivision 3, is amended to read: 
222.31     Subd. 3.  [DEBT.] "Debt" means the principal amount of an 
222.32  obligation to pay money that is secured in whole or in part by a 
222.33  mortgage of an interest in real property.  An obligation of a 
222.34  political subdivision and a loan made with the proceeds of the 
222.35  obligation constitute a single debt. 
222.36     Sec. 4.  Minnesota Statutes 2000, section 373.01, 
223.1   subdivision 3, is amended to read: 
223.2      Subd. 3.  [CAPITAL NOTES.] A county board may, by 
223.3   resolution and without referendum, issue capital notes subject 
223.4   to the county debt limit to purchase capital equipment useful 
223.5   for county purposes that has an expected useful life at least 
223.6   equal to the term of the notes.  The notes shall be payable in 
223.7   not more than five years and shall be issued on terms and in a 
223.8   manner the board determines.  A tax levy shall be made for 
223.9   payment of the principal and interest on the notes, in 
223.10  accordance with section 475.61, as in the case of bonds.  For 
223.11  purposes of this subdivision, "capital equipment" means public 
223.12  safety, ambulance, road construction or maintenance, medical, 
223.13  and data processing equipment and computer hardware and software.
223.14     Sec. 5.  Minnesota Statutes 2000, section 410.32, is 
223.15  amended to read: 
223.16     410.32 [CITIES AUTHORIZED TO ISSUE CAPITAL NOTES FOR 
223.17  CERTAIN EQUIPMENT ACQUISITIONS.] 
223.18     Notwithstanding any contrary provision of other law or 
223.19  charter, a home rule charter city may, by resolution and without 
223.20  public referendum, issue capital notes subject to the city debt 
223.21  limit to purchase public safety equipment, ambulance and other 
223.22  medical equipment, road construction and maintenance equipment, 
223.23  and other capital equipment having and computer software, 
223.24  provided such equipment or software has an expected useful life 
223.25  at least as long as the term of the notes.  The notes shall be 
223.26  payable in not more than five years and be issued on terms and 
223.27  in the manner the city determines.  The total principal amount 
223.28  of the capital notes issued in a fiscal year shall not exceed 
223.29  0.03 percent of the market value of taxable property in the city 
223.30  for that year.  A tax levy shall be made for the payment of the 
223.31  principal and interest on the notes, in accordance with section 
223.32  475.61, as in the case of bonds.  Notes issued under this 
223.33  section shall require an affirmative vote of two-thirds of the 
223.34  governing body of the city.  Notwithstanding a contrary 
223.35  provision of other law or charter, a home rule charter city may 
223.36  also issue capital notes subject to its debt limit in the manner 
224.1   and subject to the limitations applicable to statutory cities 
224.2   pursuant to section 412.301. 
224.3      Sec. 6.  Minnesota Statutes 2000, section 412.301, is 
224.4   amended to read: 
224.5      412.301 [FINANCING PURCHASE OF CERTAIN EQUIPMENT.] 
224.6      The council may issue certificates of indebtedness or 
224.7   capital notes subject to the city debt limits to purchase public 
224.8   safety equipment, ambulance equipment, road construction or 
224.9   maintenance equipment, and other capital equipment having and 
224.10  computer software, provided such equipment or software has an 
224.11  expected useful life at least as long as the terms of the 
224.12  certificates or notes.  Such certificates or notes shall be 
224.13  payable in not more than five years and shall be issued on such 
224.14  terms and in such manner as the council may determine.  If the 
224.15  amount of the certificates or notes to be issued to finance any 
224.16  such purchase exceeds 0.25 percent of the market value of 
224.17  taxable property in the city, they shall not be issued for at 
224.18  least ten days after publication in the official newspaper of a 
224.19  council resolution determining to issue them; and if before the 
224.20  end of that time, a petition asking for an election on the 
224.21  proposition signed by voters equal to ten percent of the number 
224.22  of voters at the last regular municipal election is filed with 
224.23  the clerk, such certificates or notes shall not be issued until 
224.24  the proposition of their issuance has been approved by a 
224.25  majority of the votes cast on the question at a regular or 
224.26  special election.  A tax levy shall be made for the payment of 
224.27  the principal and interest on such certificates or notes, in 
224.28  accordance with section 475.61, as in the case of bonds.  
224.29     Sec. 7.  Minnesota Statutes 2000, section 465.73, is 
224.30  amended to read: 
224.31     465.73 [TOWN HALLS; FIRE HALLS OR RESCUE EQUIPMENT; LOANS 
224.32  TO POLITICAL SUBDIVISIONS.] 
224.33     For purposes of constructing, repairing, or acquiring city 
224.34  halls, town halls, fire halls or fire or rescue equipment any, 
224.35  or libraries or child care facilities if otherwise authorized by 
224.36  law, a city, county, or town may borrow up not to 
225.1   $250,000 exceed $450,000 from (i) funds granted to a rural 
225.2   electric cooperative organized under chapter 308A by, the United 
225.3   States Department of Agriculture Rural Business-Cooperative 
225.4   Service or (ii) directly from or in the form of funds guaranteed 
225.5   by the Farmers Home Administration Rural Housing Service or 
225.6   other agency of the United States Department of Agriculture on 
225.7   by a note secured by a mortgage or other security agreement on 
225.8   the property purchased with the borrowed funds.  The city, 
225.9   county, or town may pledge its full faith and credit and assign 
225.10  or pledge the revenues, if any, from the town halls, fire or 
225.11  rescue department, or fire hall or facilities or equipment so 
225.12  financed together with any other properly available funds, 
225.13  including taxes levied pursuant to section 475.61 to the Farmers 
225.14  Home Administration or other agency of the United States 
225.15  Department of Agriculture or its guaranteed lender or a rural 
225.16  electric cooperative organized under chapter 308A as its grantee 
225.17  to repay to secure the loan.  The amount of the obligation shall 
225.18  not be obligation of the note is not to be included when 
225.19  computing the net debt of the city, county, or town.  An 
225.20  election shall not be required to authorize the note and 
225.21  mortgage or assignment of revenues, nor is the approval of the 
225.22  voters required for the issuance of the note. 
225.23     Sec. 8.  Minnesota Statutes 2000, section 469.012, 
225.24  subdivision 1, is amended to read: 
225.25     Subdivision 1.  [SCHEDULE OF POWERS.] An authority shall be 
225.26  a public body corporate and politic and shall have all the 
225.27  powers necessary or convenient to carry out the purposes of 
225.28  sections 469.001 to 469.047, except that the power to levy and 
225.29  collect taxes or special assessments is limited to the power 
225.30  provided in sections 469.027 to 469.033.  Its powers include the 
225.31  following powers in addition to others granted in sections 
225.32  469.001 to 469.047:  
225.33     (1) to sue and be sued; to have a seal, which shall be 
225.34  judicially noticed, and to alter it; to have perpetual 
225.35  succession; and to make, amend, and repeal rules consistent with 
225.36  sections 469.001 to 469.047; 
226.1      (2) to employ an executive director, technical experts, and 
226.2   officers, agents, and employees, permanent and temporary, that 
226.3   it requires, and determine their qualifications, duties, and 
226.4   compensation; for legal services it requires, to call upon the 
226.5   chief law officer of the city or to employ its own counsel and 
226.6   legal staff; so far as practicable, to use the services of local 
226.7   public bodies in its area of operation, provided that those 
226.8   local public bodies, if requested, shall make the services 
226.9   available; 
226.10     (3) to delegate to one or more of its agents or employees 
226.11  the powers or duties it deems proper; 
226.12     (4) within its area of operation, to undertake, prepare, 
226.13  carry out, and operate projects and to provide for the 
226.14  construction, reconstruction, improvement, extension, 
226.15  alteration, or repair of any project or part thereof; 
226.16     (5) subject to the provisions of section 469.026, to give, 
226.17  sell, transfer, convey, or otherwise dispose of real or personal 
226.18  property or any interest therein and to execute leases, deeds, 
226.19  conveyances, negotiable instruments, purchase agreements, and 
226.20  other contracts or instruments, and take action that is 
226.21  necessary or convenient to carry out the purposes of these 
226.22  sections; 
226.23     (6) within its area of operation, to acquire real or 
226.24  personal property or any interest therein by gifts, grant, 
226.25  purchase, exchange, lease, transfer, bequest, devise, or 
226.26  otherwise, and by the exercise of the power of eminent domain, 
226.27  in the manner provided by chapter 117, to acquire real property 
226.28  which it may deem necessary for its purposes, after the adoption 
226.29  by it of a resolution declaring that the acquisition of the real 
226.30  property is necessary to eliminate one or more of the conditions 
226.31  found to exist in the resolution adopted pursuant to section 
226.32  469.003 or to provide decent, safe, and sanitary housing for 
226.33  persons of low and moderate income, or is necessary to carry out 
226.34  a redevelopment project.  Real property needed or convenient for 
226.35  a project may be acquired by the authority for the project by 
226.36  condemnation pursuant to this section.  This includes Prior to 
227.1   adoption of a resolution authorizing acquisition of property by 
227.2   condemnation, the governing body of the authority must hold a 
227.3   public hearing on the proposed acquisition after published 
227.4   notice in a newspaper of general circulation in the 
227.5   municipality, which must be made at least one time not less than 
227.6   ten days nor more than 30 days prior to the date of the 
227.7   hearing.  The notice must reasonably describe the property to be 
227.8   acquired and state that the purpose of the hearing is to 
227.9   consider acquisition by exercise of the authority's powers of 
227.10  eminent domain.  Not less than ten days before the hearing, 
227.11  notice of the hearing must also be mailed to the owner of each 
227.12  parcel proposed to be acquired, but failure to give mailed 
227.13  notice or any defects in the notice does not invalidate the 
227.14  acquisition.  For the purpose of giving mailed notice, owners 
227.15  are determined in accordance with section 429.031, subdivision 
227.16  1, paragraph (a).  Property acquired by condemnation under this 
227.17  section may include any property devoted to a public use, 
227.18  whether or not held in trust, notwithstanding that the property 
227.19  may have been previously acquired by condemnation or is owned by 
227.20  a public utility corporation, because the public use in 
227.21  conformity with the provisions of sections 469.001 to 469.047 
227.22  shall be deemed a superior public use.  Property devoted to a 
227.23  public use may be so acquired only if the governing body of the 
227.24  municipality has approved its acquisition by the authority.  An 
227.25  award of compensation shall not be increased by reason of any 
227.26  increase in the value of the real property caused by the 
227.27  assembly, clearance or reconstruction, or proposed assembly, 
227.28  clearance or reconstruction for the purposes of sections 469.001 
227.29  to 469.047 of the real property in an area; 
227.30     (7) within its area of operation, and without the adoption 
227.31  of an urban renewal plan, to acquire, by all means as set forth 
227.32  in clause (6) but without the adoption of a resolution provided 
227.33  for in clause (6), real property, and to demolish, remove, 
227.34  rehabilitate, or reconstruct the buildings and improvements or 
227.35  construct new buildings and improvements thereon, or to so 
227.36  provide through other means as set forth in Laws 1974, chapter 
228.1   228, or to grade, fill, and construct foundations or otherwise 
228.2   prepare the site for improvements.  The authority may dispose of 
228.3   the property pursuant to section 469.029, provided that the 
228.4   provisions of section 469.029 requiring conformance to an urban 
228.5   renewal plan shall not apply.  The authority may finance these 
228.6   activities by means of the redevelopment project fund or by 
228.7   means of tax increments or tax increment bonds or by the methods 
228.8   of financing provided for in section 469.033 or by means of 
228.9   contributions from the municipality provided for in section 
228.10  469.041, clause (9), or by any combination of those means.  Real 
228.11  property with buildings or improvements thereon shall only be 
228.12  acquired under this clause when the buildings or improvements 
228.13  are substandard.  The exercise of the power of eminent domain 
228.14  under this clause shall be limited to real property which 
228.15  contains, or has contained within the three years immediately 
228.16  preceding the exercise of the power of eminent domain and is 
228.17  currently vacant, buildings and improvements which are vacated 
228.18  and substandard.  Notwithstanding the prior sentence, in cities 
228.19  of the first class the exercise of the power of eminent domain 
228.20  under this clause shall be limited to real property which 
228.21  contains, or has contained within the three years immediately 
228.22  preceding the exercise of the power of eminent domain, buildings 
228.23  and improvements which are substandard.  For the purpose of this 
228.24  clause, substandard buildings or improvements mean hazardous 
228.25  buildings as defined in section 463.15, subdivision 3, or 
228.26  buildings or improvements that are dilapidated or obsolescent, 
228.27  faultily designed, lack adequate ventilation, light, or sanitary 
228.28  facilities, or any combination of these or other factors that 
228.29  are detrimental to the safety or health of the community.  The 
228.30  exercise of the power of eminent domain under this clause is 
228.31  subject to the notice and hearing requirements described in 
228.32  clause (6); 
228.33     (8) within its area of operation, to determine the level of 
228.34  income constituting low or moderate family income.  The 
228.35  authority may establish various income levels for various family 
228.36  sizes.  In making its determination, the authority may consider 
229.1   income levels that may be established by the Department of 
229.2   Housing and Urban Development or a similar or successor federal 
229.3   agency for the purpose of federal loan guarantees or subsidies 
229.4   for persons of low or moderate income.  The authority may use 
229.5   that determination as a basis for the maximum amount of income 
229.6   for admissions to housing development projects or housing 
229.7   projects owned or operated by it; 
229.8      (9) to provide in federally assisted projects any 
229.9   relocation payments and assistance necessary to comply with the 
229.10  requirements of the Federal Uniform Relocation Assistance and 
229.11  Real Property Acquisition Policies Act of 1970, and any 
229.12  amendments or supplements thereto; 
229.13     (10) to make an agreement with the governing body or bodies 
229.14  creating the authority which provides exemption from all ad 
229.15  valorem real and personal property taxes levied or imposed by 
229.16  the body or bodies creating the authority.  In the case of 
229.17  low-rent public housing that received financial assistance under 
229.18  the United States Housing Act of 1937, or successor federal 
229.19  legislation, an authority may make an agreement with the 
229.20  governing body or bodies creating the authority to provide 
229.21  exemption from all real and personal property taxes levied or 
229.22  imposed by the state, city, county, or other political 
229.23  subdivision, for which the authority shall make payments in lieu 
229.24  of taxes to the state, city, county, or other political 
229.25  subdivisions as provided in section 469.040.  The governing body 
229.26  shall agree on behalf of all the applicable governing bodies 
229.27  affected that local cooperation as required by the federal 
229.28  government shall be provided by the local governing body or 
229.29  bodies in whose jurisdiction the project is to be located, at no 
229.30  cost or at no greater cost than the same public services and 
229.31  facilities furnished to other residents; 
229.32     (11) to cooperate with or act as agent for the federal 
229.33  government, the state or any state public body, or any agency or 
229.34  instrumentality of the foregoing, in carrying out any of the 
229.35  provisions of sections 469.001 to 469.047 or of any other 
229.36  related federal, state, or local legislation; and upon the 
230.1   consent of the governing body of the city to purchase, lease, 
230.2   manage, or otherwise take over any housing project already owned 
230.3   and operated by the federal government; 
230.4      (12) to make plans for carrying out a program of voluntary 
230.5   repair and rehabilitation of buildings and improvements, and 
230.6   plans for the enforcement of laws, codes, and regulations 
230.7   relating to the use of land and the use and occupancy of 
230.8   buildings and improvements, and to the compulsory repair, 
230.9   rehabilitation, demolition, or removal of buildings and 
230.10  improvements.  The authority may develop, test, and report 
230.11  methods and techniques, and carry out demonstrations and other 
230.12  activities for the prevention and elimination of slums and 
230.13  blight; 
230.14     (13) to borrow money or other property and accept 
230.15  contributions, grants, gifts, services, or other assistance from 
230.16  the federal government, the state government, state public 
230.17  bodies, or from any other public or private sources; 
230.18     (14) to include in any contract for financial assistance 
230.19  with the federal government any conditions that the federal 
230.20  government may attach to its financial aid of a project, not 
230.21  inconsistent with purposes of sections 469.001 to 469.047, 
230.22  including obligating itself (which obligation shall be 
230.23  specifically enforceable and not constitute a mortgage, 
230.24  notwithstanding any other laws) to convey to the federal 
230.25  government the project to which the contract relates upon the 
230.26  occurrence of a substantial default with respect to the 
230.27  covenants or conditions to which the authority is subject; to 
230.28  provide in the contract that, in case of such conveyance, the 
230.29  federal government may complete, operate, manage, lease, convey, 
230.30  or otherwise deal with the project until the defaults are cured 
230.31  if the federal government agrees in the contract to reconvey to 
230.32  the authority the project as then constituted when the defaults 
230.33  have been cured; 
230.34     (15) to issue bonds for any of its corporate purposes and 
230.35  to secure the bonds by mortgages upon property held or to be 
230.36  held by it or by pledge of its revenues, including grants or 
231.1   contributions; 
231.2      (16) to invest any funds held in reserves or sinking funds, 
231.3   or any funds not required for immediate disbursement, in 
231.4   property or securities in which savings banks may legally invest 
231.5   funds subject to their control or in the manner and subject to 
231.6   the conditions provided in section 118A.04 for the deposit and 
231.7   investment of public funds; 
231.8      (17) within its area of operation, to determine where 
231.9   blight exists or where there is unsafe, unsanitary, or 
231.10  overcrowded housing; 
231.11     (18) to carry out studies of the housing and redevelopment 
231.12  needs within its area of operation and of the meeting of those 
231.13  needs.  This includes study of data on population and family 
231.14  groups and their distribution according to income groups, the 
231.15  amount and quality of available housing and its distribution 
231.16  according to rentals and sales prices, employment, wages, 
231.17  desirable patterns for land use and community growth, and other 
231.18  factors affecting the local housing and redevelopment needs and 
231.19  the meeting of those needs; to make the results of those studies 
231.20  and analyses available to the public and to building, housing, 
231.21  and supply industries; 
231.22     (19) if a local public body does not have a planning agency 
231.23  or the planning agency has not produced a comprehensive or 
231.24  general community development plan, to make or cause to be made 
231.25  a plan to be used as a guide in the more detailed planning of 
231.26  housing and redevelopment areas; 
231.27     (20) to lease or rent any dwellings, accommodations, lands, 
231.28  buildings, structures, or facilities included in any project 
231.29  and, subject to the limitations contained in sections 469.001 to 
231.30  469.047 with respect to the rental of dwellings in housing 
231.31  projects, to establish and revise the rents or charges therefor; 
231.32     (21) to own, hold, and improve real or personal property 
231.33  and to sell, lease, exchange, transfer, assign, pledge, or 
231.34  dispose of any real or personal property or any interest 
231.35  therein; 
231.36     (22) to insure or provide for the insurance of any real or 
232.1   personal property or operations of the authority against any 
232.2   risks or hazards; 
232.3      (23) to procure or agree to the procurement of government 
232.4   insurance or guarantees of the payment of any bonds or parts 
232.5   thereof issued by an authority and to pay premiums on the 
232.6   insurance; 
232.7      (24) to make expenditures necessary to carry out the 
232.8   purposes of sections 469.001 to 469.047; 
232.9      (25) to enter into an agreement or agreements with any 
232.10  state public body to provide informational service and 
232.11  relocation assistance to families, individuals, business 
232.12  concerns, and nonprofit organizations displaced or to be 
232.13  displaced by the activities of any state public body; 
232.14     (26) to compile and maintain a catalog of all vacant, open 
232.15  and undeveloped land, or land which contains substandard 
232.16  buildings and improvements as that term is defined in clause 
232.17  (7), that is owned or controlled by the authority or by the 
232.18  governing body within its area of operation and to compile and 
232.19  maintain a catalog of all authority owned real property that is 
232.20  in excess of the foreseeable needs of the authority, in order to 
232.21  determine and recommend if the real property compiled in either 
232.22  catalog is appropriate for disposal pursuant to the provisions 
232.23  of section 469.029, subdivisions 9 and 10; 
232.24     (27) to recommend to the city concerning the enforcement of 
232.25  the applicable health, housing, building, fire prevention, and 
232.26  housing maintenance code requirements as they relate to 
232.27  residential dwelling structures that are being rehabilitated by 
232.28  low- or moderate-income persons pursuant to section 469.029, 
232.29  subdivision 9, for the period of time necessary to complete the 
232.30  rehabilitation, as determined by the authority; 
232.31     (28) to recommend to the city the initiation of municipal 
232.32  powers, against certain real properties, relating to repair, 
232.33  closing, condemnation, or demolition of unsafe, unsanitary, 
232.34  hazardous, and unfit buildings, as provided in section 469.041, 
232.35  clause (5); 
232.36     (29) to sell, at private or public sale, at the price or 
233.1   prices determined by the authority, any note, mortgage, lease, 
233.2   sublease, lease purchase, or other instrument or obligation 
233.3   evidencing or securing a loan made for the purpose of economic 
233.4   development, job creation, redevelopment, or community 
233.5   revitalization by a public agency to a business, for-profit or 
233.6   nonprofit organization, or an individual; 
233.7      (30) within its area of operation, to acquire and sell real 
233.8   property that is benefited by federal housing assistance 
233.9   payments, other rental subsidies, interest reduction payments, 
233.10  or interest reduction contracts for the purpose of preserving 
233.11  the affordability of low- and moderate-income multifamily 
233.12  housing; 
233.13     (31) to apply for, enter into contracts with the federal 
233.14  government, administer, and carry out a section 8 program.  
233.15  Authorization by the governing body creating the authority to 
233.16  administer the program at the authority's initial application is 
233.17  sufficient to authorize operation of the program in its area of 
233.18  operation for which it was created without additional local 
233.19  governing body approval.  Approval by the governing body or 
233.20  bodies creating the authority constitutes approval of a housing 
233.21  program for purposes of any special or general law requiring 
233.22  local approval of section 8 programs undertaken by city, county, 
233.23  or multicounty authorities; and 
233.24     (32) to secure a mortgage or loan for a rental housing 
233.25  project by obtaining the appointment of receivers or assignments 
233.26  of rents and profits under sections 559.17 and 576.01, except 
233.27  that the limitation relating to the minimum amounts of the 
233.28  original principal balances of mortgages specified in sections 
233.29  559.17, subdivision 2, clause (2); and 576.01, subdivision 2, 
233.30  does not apply. 
233.31     Sec. 9.  Minnesota Statutes 2000, section 469.034, 
233.32  subdivision 2, is amended to read: 
233.33     Subd. 2.  [GENERAL OBLIGATION REVENUE BONDS.] (a) An 
233.34  authority may pledge the general obligation of the general 
233.35  jurisdiction governmental unit as additional security for bonds 
233.36  payable from income or revenues of the project or the 
234.1   authority.  The authority must find that the pledged revenues 
234.2   will equal or exceed 110 percent of the principal and interest 
234.3   due on the bonds for each year.  The proceeds of the bonds must 
234.4   be used for a qualified housing development project or 
234.5   projects.  The obligations must be issued and sold in the manner 
234.6   and following the procedures provided by chapter 475, except the 
234.7   obligations are not subject to approval by the electors and the 
234.8   maturities may extend to not more than 30 years from the 
234.9   estimated date of completion.  The authority is the municipality 
234.10  for purposes of chapter 475.  
234.11     (b) The principal amount of the issue must be approved by 
234.12  the governing body of the general jurisdiction governmental unit 
234.13  whose general obligation is pledged.  Public hearings must be 
234.14  held on issuance of the obligations by both the authority and 
234.15  the general jurisdiction governmental unit.  The hearings must 
234.16  be held at least 15 days, but not more than 120 days, before the 
234.17  sale of the obligations. 
234.18     (c) The maximum amount of general obligation bonds that may 
234.19  be issued and outstanding under this section equals the greater 
234.20  of (1) one-half of one percent of the taxable market value of 
234.21  the general jurisdiction governmental unit whose general 
234.22  obligation which includes a tax on property is pledged, or (2) 
234.23  $3,000,000.  In the case of county or multicounty general 
234.24  obligation bonds, the outstanding general obligation bonds of 
234.25  all cities in the county or counties issued under this 
234.26  subdivision must be added in calculating the limit under clause 
234.27  (1). 
234.28     (d) "General jurisdiction governmental unit" means the city 
234.29  in which the housing development project is located.  In the 
234.30  case of a county or multicounty authority, the county or 
234.31  counties may act as the general jurisdiction governmental unit.  
234.32  In the case of a multicounty authority, the pledge of the 
234.33  general obligation is a pledge of a tax on the taxable property 
234.34  in each of the counties. 
234.35     (e) "Qualified housing development project" means a housing 
234.36  development project providing housing either for the elderly or 
235.1   for individuals and families with incomes not greater than 80 
235.2   percent of the median family income as estimated by the United 
235.3   States Department of Housing and Urban Development for the 
235.4   standard metropolitan statistical area or the nonmetropolitan 
235.5   county in which the project is located, and will be owned by the 
235.6   authority for the term of the bonds.  A qualified housing 
235.7   development project may admit nonelderly individuals and 
235.8   families with higher incomes if: 
235.9      (1) three years have passed since initial occupancy; 
235.10     (2) the authority finds the project is experiencing 
235.11  unanticipated vacancies resulting in insufficient revenues, 
235.12  because of changes in population or other unforeseen 
235.13  circumstances that occurred after the initial finding of 
235.14  adequate revenues; and 
235.15     (3) the authority finds a tax levy or payment from general 
235.16  assets of the general jurisdiction governmental unit will be 
235.17  necessary to pay debt service on the bonds if higher income 
235.18  individuals or families are not admitted. 
235.19     Sec. 10.  Minnesota Statutes 2000, section 469.102, 
235.20  subdivision 2, is amended to read: 
235.21     Subd. 2.  [DETAIL; MATURITY.] The authority with the 
235.22  consent of its city's council shall set the date, denominations, 
235.23  place of payment, form, and details of the bonds.  The bonds 
235.24  must mature serially.  The first installment is due in not more 
235.25  than three years and the last in not more than 20 30 years from 
235.26  the date of issuance.  
235.27     Sec. 11.  Minnesota Statutes 2000, section 469.153, is 
235.28  amended by adding a subdivision to read: 
235.29     Subd. 13.  [RELATED PUBLIC IMPROVEMENTS.] "Related public 
235.30  improvements" means any public improvements described in section 
235.31  429.021, that are acquired and constructed in connection with 
235.32  the project and are financed by the contracting party under the 
235.33  revenue agreement. 
235.34     Sec. 12.  Minnesota Statutes 2000, section 469.155, 
235.35  subdivision 3, is amended to read: 
235.36     Subd. 3.  [REVENUE BONDS.] (a) It may issue revenue bonds, 
236.1   in anticipation of the collection of revenues of a project to be 
236.2   situated within the state, to finance, in whole or in part, the 
236.3   cost of the acquisition, construction, reconstruction, 
236.4   improvement, betterment, or extension thereof and of any related 
236.5   public improvements.  
236.6      (b) It may issue revenue bonds to purchase the obligations 
236.7   of local government units located in whole or in part within the 
236.8   boundaries of the municipality.  The proceeds of bonds issued to 
236.9   purchase obligations as provided under this paragraph may be 
236.10  disbursed or otherwise used to pay underwriter's or placement 
236.11  fees, expenses, or other costs of issuance and sale for the 
236.12  bonds only on a pro rata basis determined with respect to the 
236.13  portion of the proceeds that are used to purchase the 
236.14  obligations.  The municipality may not pay the underwriter's or 
236.15  placement fees, expenses, or other costs of issuance and sale 
236.16  out of other money. 
236.17     Sec. 13.  Minnesota Statutes 2000, section 469.155, 
236.18  subdivision 4, is amended to read: 
236.19     Subd. 4.  [REFINANCING NONPROFIT FACILITIES.] It may issue 
236.20  revenue bonds to pay, purchase, or discharge all or any part of 
236.21  the outstanding indebtedness of a contracting party that is an 
236.22  organization described in section 501(c)(3) of the Internal 
236.23  Revenue Code primarily engaged in health care-related activities 
236.24  or in activities for mentally or physically disabled persons or 
236.25  that is engaged primarily in the operation of one or more 
236.26  nonprofit hospitals or nursing homes previously incurred in the 
236.27  acquisition or betterment of its existing facilities to the 
236.28  extent deemed necessary by the governing body of the 
236.29  municipality or redevelopment agency; this may include any 
236.30  unpaid interest on the indebtedness accrued or to accrue to the 
236.31  date on which the indebtedness is finally paid, and any premium 
236.32  the governing body of the municipality or redevelopment agency 
236.33  determines to be necessary to be paid to pay, purchase, or 
236.34  defease the outstanding indebtedness.  If revenue bonds are 
236.35  issued for this purpose, the refinancing and the existing 
236.36  properties of the contracting party shall be deemed to 
237.1   constitute a project under section 469.153, subdivision 2, 
237.2   clause (b), (c), or (d).  
237.3      Sec. 14.  Minnesota Statutes 2000, section 469.155, 
237.4   subdivision 8, is amended to read: 
237.5      Subd. 8.  [IMPLEMENTATION OF POWERS AND COVENANTS; 
237.6   CONSTRUCTION AND ACQUISITION BY CONTRACTING PARTY.] It may make 
237.7   all contracts, execute all instruments, and do all things 
237.8   necessary or convenient in the exercise of the powers granted in 
237.9   sections 469.152 to 469.165, or in the performance of its 
237.10  covenants or duties, or in order to secure the payment of its 
237.11  bonds.  It may enter into a revenue agreement authorizing the 
237.12  contracting party, subject to any terms and conditions the 
237.13  municipality or redevelopment agency finds necessary or 
237.14  desirable and proper, to provide for the construction, 
237.15  acquisition, and installation of the buildings, improvements, 
237.16  and equipment to be included in the project and any related 
237.17  public improvements by any means legally available to the 
237.18  contracting party and in the manner determined by the 
237.19  contracting party and without advertisement for bids unless 
237.20  advertisement by the contracting party is otherwise required by 
237.21  law.  
237.22     Sec. 15.  Minnesota Statutes 2000, section 469.157, is 
237.23  amended to read: 
237.24     469.157 [DETERMINATION OF COST OF PROJECT.] 
237.25     In determining the cost of a project, the governing body 
237.26  may include all cost and estimated cost of the acquisition, 
237.27  construction, reconstruction, improvement, betterment, and 
237.28  extension of the project and any related public improvements, 
237.29  all engineering, inspection, fiscal, legal, administrative, and 
237.30  printing expense, the interest which it is estimated will accrue 
237.31  during the construction period and for six months thereafter on 
237.32  money borrowed or which it is estimated will be borrowed 
237.33  pursuant to sections 469.152 to 469.165, working capital for the 
237.34  project not to exceed five percent of bond proceeds, and bond 
237.35  reserves and premiums for insurance of lease rentals pledged to 
237.36  pay the bonds.  
238.1      Sec. 16.  Minnesota Statutes 2000, section 473.251, is 
238.2   amended to read: 
238.3      473.251 [METROPOLITAN LIVABLE COMMUNITIES FUND.] 
238.4      The metropolitan livable communities fund is created and 
238.5   consists of the following accounts:  
238.6      (1) the tax base revitalization account; 
238.7      (2) the livable communities demonstration account; 
238.8      (3) the local housing incentives account; and 
238.9      (4) the inclusionary housing account; and 
238.10     (5) the redevelopment revolving loan account. 
238.11     Sec. 17.  Minnesota Statutes 2000, section 473.252, 
238.12  subdivision 3, is amended to read: 
238.13     Subd. 3.  [DISTRIBUTION OF FUNDS.] (a) The council must use 
238.14  the funds in the account to make grants to municipalities or 
238.15  development authorities for the cleanup of polluted land in the 
238.16  metropolitan area.  A grant to a metropolitan county or a 
238.17  development authority must be used for a project in a 
238.18  participating municipality.  The council shall prescribe and 
238.19  provide the grant application form to municipalities.  The 
238.20  council must consider the probability of funding from other 
238.21  sources when making grants under this section. 
238.22     (b)(1) The legislature expects that applications for grants 
238.23  will exceed the available funds and the council will be able to 
238.24  provide grants to only some of the applicant municipalities.  If 
238.25  applications for grants for qualified sites exceed the available 
238.26  funds, the council shall make grants that provide the highest 
238.27  return in public benefits for the public costs incurred, that 
238.28  encourage commercial and industrial development that will lead 
238.29  to the preservation or growth of living-wage jobs or the 
238.30  production of affordable housing, and that enhance the tax base 
238.31  of the recipient municipality. 
238.32     (2) In making grants, the council shall establish regular 
238.33  application deadlines in which grants will be awarded from the 
238.34  available money in the account.  If the council provides for 
238.35  application cycles of less than six-month intervals, the council 
238.36  must reserve at least 40 percent of the receipts of the account 
239.1   for a year for application deadlines that occur in the second 
239.2   half of the year.  If the applications for grants exceed the 
239.3   available funds for an application cycle, no more than one-half 
239.4   of the funds may be granted to projects in a statutory or home 
239.5   rule charter city and no more than three-quarters of the funds 
239.6   may be granted to projects located in cities of the first class. 
239.7      (c) A municipality may use the grant to provide a portion 
239.8   of the local match requirement for project costs that qualify 
239.9   for a grant under sections 116J.551 to 116J.557. 
239.10     Sec. 18.  [473.256] [REDEVELOPMENT REVOLVING LOAN PROGRAM.] 
239.11     Subdivision 1.  [DEFINITIONS.] (a) For the purpose of this 
239.12  section, "municipality" means a statutory or home rule charter 
239.13  city or town participating in the local housing incentives 
239.14  program under section 473.254, or a county in the metropolitan 
239.15  area. 
239.16     (b) For the purpose of this section, "development authority"
239.17  means a housing and redevelopment authority, economic 
239.18  development authority, or a port authority in the metropolitan 
239.19  area. 
239.20     Subd. 2.  [SOURCES OF FUNDS.] The council must credit to 
239.21  the redevelopment revolving loan account established in section 
239.22  473.251: 
239.23     (1) gifts or grants from private or public entities given 
239.24  for the purposes of this section; 
239.25     (2) any money appropriated to the council specifically for 
239.26  the purposes of the redevelopment revolving loan account; 
239.27     (3) all money paid to the council by recipients of loans, 
239.28  and all interest on proceeds and payments; 
239.29     (4) loans of available funds held by the council for other 
239.30  purposes, provided that such loans meet the conditions in 
239.31  subdivision 4; and 
239.32     (5) the proceeds of any property tax levy made pursuant to 
239.33  the provisions of subdivision 4, paragraph (b). 
239.34     Subd. 3.  [DISTRIBUTION OF FUNDS.] (a) The council must use 
239.35  the funds in the account to make repayments of amounts loaned to 
239.36  the account under subdivision 4 and to make loans to 
240.1   municipalities or development authorities for projects which 
240.2   have a reasonable probability of resulting in lower housing 
240.3   costs in the metropolitan area.  Eligible projects include, 
240.4   without limitation, those which support housing production and 
240.5   ensure integration of land use and transportation needs in 
240.6   development of the community.  A loan to a metropolitan county 
240.7   or a development authority must be used for a project in a 
240.8   statutory or home rule charter city or town participating in the 
240.9   local housing incentives program under section 473.254.  The 
240.10  council must prescribe and provide the loan application form to 
240.11  municipalities and development authorities. 
240.12     (b) Loans from the redevelopment revolving loan account 
240.13  must be made under terms and conditions determined by the 
240.14  council, but including at least the following: 
240.15     (1) loans must be made at an interest rate comparable to 
240.16  that which would be earned by funds invested by the council; and 
240.17     (2) loans must be secured at a minimum by either: 
240.18     (i) a pledge of the full faith and credit of the 
240.19  municipality in which the project is located; or 
240.20     (ii) a pledge of other properties or assets of the types, 
240.21  and in the amounts, that is satisfactory to the council. 
240.22     (c) The council may require the local governmental unit to 
240.23  provide matching funds in a percentage determined by the council.
240.24     Subd. 4.  [LOANS FROM AVAILABLE FUNDS.] (a) The council is 
240.25  authorized to loan to the redevelopment revolving loan account 
240.26  any available funds held by the council for other purposes but 
240.27  only in such a manner as to ensure full repayment of principal 
240.28  and interest to the source fund.  Loans of the funds must be 
240.29  under terms and conditions determined by the council, but 
240.30  including at least the following: 
240.31     (1) not more than $50,000,000 of the funds must be on loan 
240.32  to the redevelopment revolving loan account at any time; 
240.33     (2) the schedule for repayment of loaned funds must be 
240.34  structured in such a manner that funds will be available at the 
240.35  times required by the source program; and 
240.36     (3) money loaned to the redevelopment revolving loan 
241.1   account must bear interest at an amount comparable to that which 
241.2   would be earned by the source funds if invested in accordance 
241.3   with the council's regular investment strategy. 
241.4      (b) In the event of any shortfall or default in repayment 
241.5   of principal and interest on loans to the redevelopment 
241.6   revolving loan account as they become due, the council is 
241.7   required to levy a tax on all taxable property in the 
241.8   metropolitan area to provide sufficient funds to make up the 
241.9   shortfall or default.  This tax must be certified, levied, and 
241.10  collected in the manner provided by section 473.13.  The tax is 
241.11  in addition to that authorized by section 473.249, and any other 
241.12  law and does not affect the amount or rate of taxes which may be 
241.13  levied by the council or any metropolitan agency or local 
241.14  governmental unit. 
241.15     Sec. 19.  Minnesota Statutes 2000, section 473.39, is 
241.16  amended by adding a subdivision to read: 
241.17     Subd. 1i.  [OBLIGATIONS.] After July 1, 2002, in addition 
241.18  to the authority in subdivisions 1a, 1b, 1c, 1d, 1e, 1g, and 1h, 
241.19  the council may issue certificates of indebtedness, bonds, or 
241.20  other obligations under this section for capital expenditures as 
241.21  prescribed in the council's regional transit master plan and 
241.22  transit capital improvement program and for related costs, 
241.23  including the costs of issuance and sale of the obligations.  
241.24  The amount of the obligations issued under this subdivision in 
241.25  any year must not exceed an amount equal to the following 
241.26  limitations, except as provided in this subdivision: 
241.27     (1) for 2003, the limitation is $50,000,000; and 
241.28     (2) for each subsequent year, the limitation is equal to 
241.29  the last year's limitation calculated under this subdivision 
241.30  adjusted for inflation using the United States Department of 
241.31  Labor's Bureau of Labor Statistics Minneapolis-St. Paul Consumer 
241.32  Price Index for All Urban Consumers (CPI-U) for the last 
241.33  taxes-payable year.  For any year in which the council does not 
241.34  issue obligations totaling the limitation calculated under this 
241.35  subdivision, the remaining available limitation amount may be 
241.36  carried forward to later years.  The council may issue 
242.1   obligations in a carry-forward year in an amount exceeding the 
242.2   annual limitation for that year by the limitation amount carried 
242.3   forward, but the limitation amount carried forward is not a 
242.4   permanent increase in the annual limitation calculated under 
242.5   this subdivision. 
242.6      Sec. 20.  Minnesota Statutes 2001 Supplement, section 
242.7   475.58, subdivision 1, is amended to read: 
242.8      Subdivision 1.  [APPROVAL BY ELECTORS; EXCEPTIONS.] 
242.9   Obligations authorized by law or charter may be issued by any 
242.10  municipality upon obtaining the approval of a majority of the 
242.11  electors voting on the question of issuing the obligations, but 
242.12  an election shall not be required to authorize obligations 
242.13  issued: 
242.14     (1) to pay any unpaid judgment against the municipality; 
242.15     (2) for refunding obligations; 
242.16     (3) for an improvement or improvement program, which 
242.17  obligation is payable wholly or partly from the proceeds of 
242.18  special assessments levied upon property specially benefited by 
242.19  the improvement or by an improvement within the improvement 
242.20  program, or of taxes levied upon the increased value of property 
242.21  within a district for the development of which the improvement 
242.22  is undertaken, including obligations which are the general 
242.23  obligations of the municipality, if the municipality is entitled 
242.24  to reimbursement in whole or in part from the proceeds of such 
242.25  special assessments or taxes and not less than 20 percent of the 
242.26  cost of the improvement or the improvement program is to be 
242.27  assessed against benefited property or is to be paid from the 
242.28  proceeds of federal grant funds or a combination thereof, or is 
242.29  estimated to be received from such taxes within the district; 
242.30     (4) payable wholly from the income of revenue producing 
242.31  conveniences; 
242.32     (5) under the provisions of a home rule charter which 
242.33  permits the issuance of obligations of the municipality without 
242.34  election; 
242.35     (6) under the provisions of a law which permits the 
242.36  issuance of obligations of a municipality without an election; 
243.1      (7) to fund pension or retirement fund liabilities pursuant 
243.2   to section 475.52, subdivision 6; 
243.3      (8) under a capital improvement plan under section 373.40; 
243.4   and 
243.5      (9) under sections 469.1813 to 469.1815 (property tax 
243.6   abatement authority bonds), if the proceeds of the bonds are not 
243.7   used for a purpose prohibited under section 469.176, subdivision 
243.8   4g, paragraph (b); and 
243.9      (10) to pay for reconstruction of streets if special 
243.10  assessments were levied to pay all or a portion of the initial 
243.11  costs of such streets. 
243.12     Sec. 21.  Minnesota Statutes 2000, section 475.67, 
243.13  subdivision 13, is amended to read: 
243.14     Subd. 13.  [CROSSOVER REFUNDING OBLIGATIONS.] Crossover 
243.15  refunding obligations may be issued by a municipality without 
243.16  regard to the limitations in subdivisions 4 to 10.  The proceeds 
243.17  of crossover refunding obligations, less any proceeds applied to 
243.18  payment of the costs of their issuance, shall be deposited in a 
243.19  debt service fund irrevocably appropriated to the payment of 
243.20  principal of and interest on the refunding obligations until the 
243.21  date the proceeds are applied to payment of the obligations to 
243.22  be refunded.  The debt service fund shall be maintained as an 
243.23  escrow account with a suitable financial institution within or 
243.24  without the state and amounts in it shall be invested in 
243.25  securities described in subdivision 8 or in an investment 
243.26  contract or similar agreement with a bank or, insurance company, 
243.27  or other financial institution meeting the requirements of 
243.28  section 118A.05, subdivision 5.  Excess proceeds, if any, of the 
243.29  tax levy pursuant to section 475.61, subdivision 1, made with 
243.30  respect to the obligations to be refunded, and any other 
243.31  available amounts, may be deposited in the escrow account.  In 
243.32  the resolution authorizing the issuance of crossover refunding 
243.33  obligations, the governing body may pledge to their payment any 
243.34  source of payment of the obligations to be refunded.  The 
243.35  resolution may provide that the refunding obligations are 
243.36  payable solely from the escrow account prior to the date 
244.1   scheduled for payment of the obligations to be refunded and that 
244.2   the obligations to be refunded shall not be discharged if the 
244.3   amounts on deposit in the escrow account on that date are 
244.4   insufficient.  Subdivision 12 applies to crossover refunding 
244.5   obligations, but the present value of debt service on the 
244.6   refunding and refunded obligations shall be determined as of the 
244.7   date the proceeds are applied to payment of the obligations to 
244.8   be refunded.  Subject to section 475.61, subdivision 3, in the 
244.9   case of general obligation bonds, taxes shall be levied pursuant 
244.10  to section 475.61 and appropriated to the debt service fund in 
244.11  the amounts needed, together with estimated investment income of 
244.12  the debt service fund and any other revenues available upon 
244.13  discharge of the obligations refunded, to pay when due the 
244.14  principal of and interest on the refunding obligations.  The 
244.15  levy so imposed may be reduced by earnings to be received from 
244.16  investments on hand in the debt service fund to the extent the 
244.17  applicable recording officer certifies to the county auditor 
244.18  that the earnings are expected to be received in amounts and at 
244.19  such times as to be sufficient, together with the remaining 
244.20  levy, to satisfy the purpose of the levy requirements under 
244.21  section 475.61. 
244.22     Sec. 22.  Minnesota Statutes 2000, section 641.23, is 
244.23  amended to read: 
244.24     641.23 [FUNDS, HOW PROVIDED.] 
244.25     Before any contract is made for the erection of a county 
244.26  jail, sheriff's residence, or both, the county board shall 
244.27  either levy a sufficient tax to provide the necessary funds, or 
244.28  issue county bonds therefor in accordance with the provisions of 
244.29  chapter 475, provided that, unless the issuance of the bonds is 
244.30  approved by the majority of voters voting on the question of 
244.31  their issuance, no election is required if the amount of all 
244.32  bonds issued for this purpose and interest on them which are due 
244.33  and payable in any year shall does not exceed an amount equal to 
244.34  0.09671 percent of market value of taxable property within the 
244.35  county, as last determined before the bonds are issued.  
244.36     Sec. 23.  Laws 1971, chapter 773, section 1, subdivision 2, 
245.1   as amended by Laws 1976, chapter 234, sections 1 and 7, Laws 
245.2   1978, chapter 788, section 1, Laws 1981, chapter 369, section 1, 
245.3   Laws 1983, chapter 302, sections 1, Laws 1988, chapter 513, 
245.4   section 1, Laws 1992, chapter 511, article 9, section 23, and 
245.5   Laws 1998, chapter 389, article 3, section 27, is amended to 
245.6   read: 
245.7      Subd. 2.  For each of the years through 2003 to 2013, the 
245.8   city of St. Paul is authorized to issue bonds in the aggregate 
245.9   principal amount of $15,000,000 $20,000,000 for each year; or in 
245.10  an amount equal to one-fourth of one percent of the assessors 
245.11  estimated market value of taxable property in St. Paul, 
245.12  whichever is greater, provided that no more than 15,000,000 of 
245.13  bonds is authorized to be issued in any year, unless St. Paul's 
245.14  local general obligation debt as defined in this section is less 
245.15  than six percent of market value calculated as of December 31 of 
245.16  the preceding year; but at no time shall the aggregate principal 
245.17  amount of bonds authorized exceed $18,000,000 in 1998, 
245.18  $18,000,000 in 1999, $19,000,000 in 2000, $19,000,000 in 2001, 
245.19  $19,500,000 in 2002, and $20,000,000 in 2003. 
245.20     Sec. 24.  [CITY OF ST. PAUL; ECONOMIC DEVELOPMENT RESERVE 
245.21  BOND PROGRAM.] 
245.22     Subdivision 1.  [AUTHORIZATION TO ISSUE 
245.23  BONDS.] Notwithstanding any contrary provision of the St. Paul 
245.24  city charter, the St. Paul city council may by a resolution 
245.25  adopted by five members authorize the issuance and sale of 
245.26  general obligation bonds of the city in the amount of up to 
245.27  $5,000,000 annually in the years 2002, 2003, 2004, and 2005, and 
245.28  pledge the full faith and credit of the city to the payment of 
245.29  the bonds.  The bonds shall be issued and sold under Minnesota 
245.30  Statutes, chapter 475, except that an election is not required, 
245.31  unless within 30 days of the effective date of this section a 
245.32  petition signed by eight percent of the registered voters of the 
245.33  city who voted at the last city mayoral election is filed with 
245.34  the city clerk requesting a referendum on the question of the 
245.35  authority to issue the bonds.  If a petition is filed, the 
245.36  authority to issue the bonds under this section is not effective 
246.1   until approved by a majority of the voters of the city voting on 
246.2   the question at a general or special election.  
246.3      Subd. 2.  [USE OF PROCEEDS.] The proceeds of the bonds 
246.4   issued under subdivision 1 must be used exclusively to fund one 
246.5   or more reserve funds to be pledged for the payment of debt 
246.6   service on revenue bonds issued by the city of St. Paul, the St. 
246.7   Paul housing and redevelopment authority, or the St. Paul port 
246.8   authority for projects described in subdivision 3.  
246.9      Subd. 3.  [PROJECT APPROVAL.] The proceeds of the bonds 
246.10  issued under subdivision 1 shall be pledged to or expended to 
246.11  pay debt service on bonds issued to finance only projects that 
246.12  have been reviewed and approved by the St. Paul city council.  
246.13     Subd. 4.  [AUTHORITY CUMULATIVE.] The authority granted to 
246.14  the city of St. Paul to issue bonds under this section is in 
246.15  addition to the authority provided by any other law. 
246.16     Subd. 5.  [EFFECTIVE DATE.] This section is effective upon 
246.17  the approval of the governing body of the city of St. Paul and 
246.18  upon compliance with Minnesota Statutes, section 645.021. 
246.19     Sec. 25.  [ANOKA COUNTY DEBT AUTHORITY.] 
246.20     Subdivision 1.  [AUTHORITY TO INCUR DEBT.] To finance the 
246.21  cost of designing, constructing, and acquiring public safety 
246.22  communication system infrastructure and equipment, the governing 
246.23  body of Anoka may issue: 
246.24     (1) capital improvement bonds under the provisions of 
246.25  Minnesota Statutes, section 373.40, as if the infrastructure and 
246.26  equipment qualified as a "capital improvement" within the 
246.27  meaning of Minnesota Statutes, section 373.40, subdivision 1, 
246.28  paragraph (b); or 
246.29     (2) capital notes under the provisions of Minnesota 
246.30  Statutes, section 373.01, subdivision 3, as if the equipment 
246.31  qualified as "capital equipment" within the meaning of Minnesota 
246.32  Statutes, section 373.01, subdivision 3. 
246.33     Subd. 2.  [TREATMENT OF LEVY.] The county may report the 
246.34  tax attributable to any levy to pay bonds or notes issued under 
246.35  this section as a separate line item on the property tax 
246.36  statement.  The levy to pay the notes or bonds is exempt from 
247.1   the limits on the amount or rate of tax imposed under any other 
247.2   provision of law. 
247.3      Subd. 3.  [EXPIRATION.] This section expires ten years 
247.4   after the first day on which the county issues a note or bond 
247.5   under this section.  The county may not issue a bond or note 
247.6   under this section with a maturity or payment date after the 
247.7   expiration date of this section.  No property tax may be levied 
247.8   under this section for taxes payable in a calendar year after 
247.9   the calendar year in which this section expires.  Expiration of 
247.10  this section does not affect the obligation to pay or the 
247.11  authority to collect taxes levied under this section before its 
247.12  expiration. 
247.13     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
247.14  following final enactment without local approval. 
247.15     Sec. 26.  [APPLICATION.] 
247.16     Sections 16 to 19 apply in the counties of Anoka, Carver, 
247.17  Dakota, Hennepin, Ramsey, Scott, and Washington. 
247.18     Sec. 27.  [EFFECTIVE DATE.] 
247.19     Section 8 is effective August 1, 2002, and applies to 
247.20  resolutions adopted on or after that date. 
247.21     The remainder of this article is effective the day after 
247.22  final enactment. 
247.23                             ARTICLE 19
247.24                       STATE TREASURER DUTIES
247.25     Section 1.  [TRANSFER.] 
247.26     All powers, responsibilities, and duties of the state 
247.27  treasurer are transferred to the commissioner of finance under 
247.28  Minnesota Statutes, section 15.039, except as otherwise 
247.29  prescribed in this article and Laws 1998, chapter 387, and 
247.30  except that Minnesota Statutes, section 15.039, subdivision 7, 
247.31  does not apply to the state treasurer or deputy state treasurer. 
247.32     Sec. 2.  Minnesota Statutes 2000, section 7.26, is amended 
247.33  to read: 
247.34     7.26 [DELIVERY OF DUPLICATES; BOND.] 
247.35     Such duplicate obligation when executed shall be delivered 
247.36  by the state treasurer commissioner of finance to the owner of 
248.1   the original obligation, the owner's guardian, or the 
248.2   representative of the owner's estate; provided, such owner, 
248.3   guardian, or representative shall first file with the state 
248.4   treasurer commissioner a bond in the full amount of such 
248.5   obligation and unpaid interest to maturity, with sufficient 
248.6   sureties, approved by the same authority as state depository 
248.7   bonds, indemnifying the state against any loss thereon by reason 
248.8   of the existence of the original obligation or any coupon 
248.9   thereto attached, unless such bond is waived as hereinafter 
248.10  provided; and, provided, such owner, guardian, or representative 
248.11  shall furnish satisfactory proof to the state treasurer 
248.12  commissioner that such original obligation and coupons have not 
248.13  been found or presented for payment up to the time of such 
248.14  delivery; and, if any thereof have been found or presented, 
248.15  duplicates shall be delivered only of such as have not been 
248.16  found or presented.  A record of the issuance and delivery of 
248.17  each duplicate obligation and attached coupons shall be made by 
248.18  the state treasurer and forthwith reported by the treasurer to 
248.19  the commissioner of finance, who shall also make a record of the 
248.20  same.  Such duplicate obligations and coupons, when issued and 
248.21  delivered as hereinbefore provided shall have the same force and 
248.22  effect as the originals.  
248.23     Sec. 3.  Minnesota Statutes 2000, section 16A.27, 
248.24  subdivision 5, is amended to read: 
248.25     Subd. 5.  [CHARGES, COMPENSATING BALANCES.] The 
248.26  commissioner may, after consulting with the state treasurer, 
248.27  agree that the treasurer may pay a depository a reasonable 
248.28  charge from appropriated money, maintain appropriate 
248.29  compensating balances with the depository, or purchase 
248.30  non-interest-bearing certificates of deposit from the depository 
248.31  for performing depository related services. 
248.32     Sec. 4.  Minnesota Statutes 2000, section 16A.626, is 
248.33  amended to read: 
248.34     16A.626 [ELECTRONIC PAYMENTS.] 
248.35     (a) For purposes of this section, the terms defined in this 
248.36  paragraph have the meaning given them.  "Agency" means a state 
249.1   officer, employee, board, commission, authority, department, 
249.2   entity, or organization of the executive branch of state 
249.3   government.  "Government services transaction" means the conduct 
249.4   of business between an agency and an individual or business 
249.5   entity where the individual or business entity is paying a 
249.6   license or permit fee or tax or purchasing goods or services. 
249.7      (b) Notwithstanding any other provision of law, rule, or 
249.8   regulation to the contrary, an agency may accept credit cards, 
249.9   charge cards, debit cards, or other method of electronic funds 
249.10  transfer for payment in government services transactions, 
249.11  including electronic transactions. 
249.12     (c) The commissioner of finance, in consultation with the 
249.13  state treasurer, shall contract with one or more entities for 
249.14  the purpose of enabling agencies to accept and process credit 
249.15  cards and other electronic financial transactions.  All agencies 
249.16  shall process their credit card and other electronic financial 
249.17  transactions through the contracts negotiated by the 
249.18  commissioner of finance, unless the commissioner of finance 
249.19  grants a waiver allowing an agency to negotiate its own contract 
249.20  with an entity.  These contracts must be approved by the 
249.21  commissioner of finance. 
249.22     (d) Agencies that accept credit cards, charge cards, debit 
249.23  cards, or other method of electronic funds transfer for payment 
249.24  may impose a convenience fee to be added to each transaction, 
249.25  except that the department of revenue shall not impose a fee 
249.26  under this section on any payment of tax that is required by law 
249.27  or rule to be made by electronic funds transfer.  The total 
249.28  amount of such convenience fee must be equal to the transaction 
249.29  fee charged by a processing contractor for such credit services 
249.30  during the most recent collection period.  An agency imposing a 
249.31  convenience fee must notify the person using the credit services 
249.32  of the fee before the transaction is processed.  Fees collected 
249.33  under this section are appropriated to the agency collecting the 
249.34  fee for purposes of paying the processing contractor. 
249.35     (e) A convenience fee imposed by an agency under this 
249.36  section is in addition to any tax, fee, charge, or cost 
250.1   otherwise imposed for a license, permit, tax, service, or good 
250.2   provided by the agency. 
250.3      (f) Credit card, charge card, debit card, or other method 
250.4   of electronic funds transfer account numbers are nonpublic data 
250.5   not on individuals as defined in section 13.02, subdivision 9, 
250.6   or private data on individuals as defined in section 13.02, 
250.7   subdivision 12. 
250.8      Sec. 5.  Minnesota Statutes 2000, section 35.08, is amended 
250.9   to read: 
250.10     35.08 [KILLING OF DISEASED ANIMALS.] 
250.11     If the board decides upon the killing of an animal affected 
250.12  with tuberculosis, paratuberculosis, or brucellosis, it shall 
250.13  notify the animal's owner or keeper of the decision.  If the 
250.14  board, through its executive director, orders that an animal may 
250.15  be transported for immediate slaughter to any abattoir where the 
250.16  meat inspection division of the United States Department of 
250.17  Agriculture maintains inspection, or where the animal and plant 
250.18  health inspection service of the United States Department of 
250.19  Agriculture or the board establishes field postmortem 
250.20  inspection, the owner must receive the value of the net salvage 
250.21  of the carcass. 
250.22     Before the animal is removed from the premises of the 
250.23  owner, the representative or authorized agent of the board must 
250.24  agree with the owner in writing as to the value of the animal.  
250.25  In the absence of an agreement, three competent, disinterested 
250.26  persons, one appointed by the board, one by the owner, and a 
250.27  third by the first two, shall appraise the animal at its full 
250.28  replacement cost taking into consideration the purpose and use 
250.29  of the animal. 
250.30     The appraisement made under this section must be in 
250.31  writing, signed by the appraisers, and certified by the board to 
250.32  the commissioner of finance, who shall draw a warrant on the 
250.33  state treasurer for the amount due the owner. 
250.34     Sec. 6.  Minnesota Statutes 2001 Supplement, section 35.09, 
250.35  subdivision 3, is amended to read: 
250.36     Subd. 3.  [EMERGENCIES.] (a) When it is determined by the 
251.1   board that it is necessary to eradicate any dangerous, 
251.2   infectious, communicable disease among domestic animals in the 
251.3   state, the presence of which constitutes an emergency declared 
251.4   by resolution of the board, order of the governor, or by the 
251.5   United States Department of Agriculture, the board may take 
251.6   reasonable and necessary steps to suppress and eradicate the 
251.7   disease.  The board may cooperate with the animal and plant 
251.8   health inspection service of the United States Department of 
251.9   Agriculture, federally recognized Indian tribes, state or local 
251.10  government agencies, or any other private or public entity in 
251.11  the suppression and eradication of the disease. 
251.12     (b) When an emergency has been declared, the board may 
251.13  appraise and destroy animals affected with, or which have been 
251.14  exposed to the disease, or which are highly susceptible to 
251.15  exposure to the disease because of proximity to diseased 
251.16  animals, appraise and destroy personal property in order to 
251.17  remove the infection and complete the cleaning and disinfection 
251.18  of the premises, temporarily commandeer real property under 
251.19  paragraph (c) for the purpose of disposing of animals, and do 
251.20  any act and incur any other expense reasonably necessary to 
251.21  suppress the disease.  
251.22     (c) The governor, at the request of the board, may 
251.23  temporarily commandeer agricultural or other suitable 
251.24  nonresidential land under the provisions of chapter 12 to be 
251.25  used for disposal of the destroyed animals when an emergency has 
251.26  been declared by the governor under section 35.0661 and the 
251.27  board determines that: 
251.28     (1) the owner of destroyed animals lacks sufficient land to 
251.29  properly dispose of the animals; 
251.30     (2) the animals cannot be transported to other sites; 
251.31     (3) no landowner within the appropriate area will consent 
251.32  to voluntarily provide land for animal disposal; 
251.33     (4) time pressures prevent formal condemnation procedures; 
251.34  and 
251.35     (5) other means of animal disposal are either impractical 
251.36  or contrary to good disease control practices. 
252.1   After the land has been used for animal disposal, possession 
252.2   shall return to the owner or occupant.  Damages resulting from 
252.3   the temporary taking shall be paid in the same amount and manner 
252.4   as if the land had been temporarily condemned for other public 
252.5   purposes. 
252.6      (d) The board may accept, on behalf of the state, the rules 
252.7   adopted by the animal and plant health inspection service of the 
252.8   United States Department of Agriculture pertaining to the 
252.9   disease, authorized under an act of Congress, or the portion of 
252.10  the regulations deemed necessary, suitable, or applicable, and 
252.11  cooperate with the animal and plant health inspection service of 
252.12  the United States Department of Agriculture, in the enforcement 
252.13  of those rules.  Alternatively, the board may follow the 
252.14  procedure only as to quarantine, inspection, condemnation, 
252.15  appraisal, compensation, destruction, burial of animals, 
252.16  disinfection, or other acts the board considers reasonably 
252.17  necessary for the suppression of the disease, as agreed upon and 
252.18  adopted by the board and representatives or authorized agents of 
252.19  the animal and plant health inspection service of the United 
252.20  States Department of Agriculture.  
252.21     (e) For the purpose of compensation under paragraph (f), 
252.22  appraisals of animals or personal property destroyed in order to 
252.23  remove the infection and complete the cleaning and disinfection 
252.24  of premises where the animals are found, must be made by an 
252.25  appraisal board consisting of a representative of the board, a 
252.26  representative of the animal and plant health inspection service 
252.27  of the United States Department of Agriculture, and the owner of 
252.28  the animals or the owner's representative.  Notwithstanding any 
252.29  law to the contrary, when, in the judgment of the board, 
252.30  physical appraisal of the animals to be killed or personal 
252.31  property to be destroyed poses a disease threat, appraisals may 
252.32  be conducted after the animals are killed based on documents, 
252.33  testimony, or other relevant evidence.  Appraisals must be in 
252.34  writing and signed by the appraisers, and must be made at the 
252.35  true market value of all animals and personal property 
252.36  appraised, unless otherwise provided by applicable federal law 
253.1   or regulation when compensation is paid by federal funds. 
253.2      (f) Upon destruction of animals or personal property, or 
253.3   temporary commandeering of real property, and burial or other 
253.4   disposition of the carcasses of the animals in accordance with 
253.5   the law and rules of the board and the animal and plant health 
253.6   inspection service of the United States Department of 
253.7   Agriculture, and the completion of the cleaning and disinfection 
253.8   of the premises, the board shall certify the appraisal or the 
253.9   condemnation award to the commissioner of finance, who shall 
253.10  draw a warrant on the state treasurer for the proper amount 
253.11  payable to the owner, excluding any compensation received by the 
253.12  owner from other sources, from appropriations made available for 
253.13  this purpose.  
253.14     (g) No entity of any kind may begin or proceed with any 
253.15  proceeding to collect a debt from the owner of animals or 
253.16  personal property destroyed under this subdivision, until the 
253.17  owner has received compensation under paragraph (d).  For 
253.18  purposes of this paragraph, "proceeding to collect a debt" 
253.19  includes foreclosure, repossession, garnishment, levy, contract 
253.20  for deed cancellation, an action to obtain a court judgment, a 
253.21  proceeding to collect real estate taxes or special assessments, 
253.22  eviction, and any other in-court and out-of-court proceedings to 
253.23  collect a debt.  The term does not include sending bills or 
253.24  other routine communications to the owner.  If an entity refuses 
253.25  to comply with this paragraph after being informed that the 
253.26  owner qualifies for relief under this paragraph, the owner may 
253.27  apply to the district court in the county in which the owner 
253.28  resides for a court order directing the entity to comply with 
253.29  this paragraph and to reimburse the owner for reasonable 
253.30  attorney fees incurred in obtaining the court order.  This 
253.31  paragraph does not affect the validity of a mortgage 
253.32  foreclosure, contract for deed cancellation or other proceeding 
253.33  involving the title to real property, unless the owner records 
253.34  in the office of the county recorder, or files in the office of 
253.35  the registrar of titles, prior to completion of the proceeding 
253.36  to collect a debt, a certified copy of a court order, which 
254.1   includes a legal description of the property, determining that 
254.2   the owner qualifies for relief under this paragraph.  For 
254.3   purposes of proceedings involving title to real property, the 
254.4   court order must provide that it expires 90 days after the court 
254.5   order was applied for, unless the court extends the court order 
254.6   prior to that date for good cause shown.  A certified copy of 
254.7   any extension of the court order must be recorded or filed in 
254.8   order to affect the validity of a proceeding affecting the title 
254.9   to real property.  For purposes of this paragraph, "completion 
254.10  of a proceeding to collect a debt" means, in the case of a 
254.11  mortgage foreclosure under chapter 580 or 581 or of a 
254.12  foreclosure of any other lien on real property, the filing or 
254.13  recording of the sheriff's certificate of sale; and, in the case 
254.14  of a contract for deed cancellation under section 559.21, the 
254.15  end of the cancellation period provided in that section. 
254.16     Sec. 7.  Minnesota Statutes 2000, section 49.24, 
254.17  subdivision 13, is amended to read: 
254.18     Subd. 13.  [DISPOSITION OF UNCLAIMED DIVIDENDS.] Upon the 
254.19  liquidation of any financial institution liquidated by the 
254.20  commissioner as statutory liquidator, if any dividends or other 
254.21  moneys set apart for the payment of claims remain unpaid, and 
254.22  the places of residence of the owners thereof are unknown to the 
254.23  commissioner, the commissioner may pay same into the state 
254.24  treasury as hereinafter provided.  Whenever the commissioner 
254.25  shall be satisfied that the process of liquidation should not be 
254.26  further continued the commissioner may make and certify 
254.27  triplicate lists of any such unclaimed dividends or other 
254.28  moneys, specifying the name of each owner, the amount due , and 
254.29  the last known address.  Upon one of such lists, to be retained 
254.30  by the commissioner shall be endorsed the commissioner's order 
254.31  that such unclaimed moneys be forthwith deposited in the state 
254.32  treasury.  When so deposited, one of said lists shall be 
254.33  delivered to the state treasurer and another to the commissioner 
254.34  of finance and the commissioner shall retain in the 
254.35  commissioner's office such records and proofs concerning said 
254.36  claims as the commissioner may have, which shall thereafter 
255.1   remain on file in the office.  The treasurer commissioner of 
255.2   finance shall execute upon the list retained by the commissioner 
255.3   a receipt for such money, which shall operate as a full 
255.4   discharge of the commissioner on account of such claims.  At any 
255.5   time within six years after such receipt, but not afterward, the 
255.6   claimant may apply to the commissioner for the amount so 
255.7   deposited for the claimant's benefit, and upon proof 
255.8   satisfactory to the governor, the attorney general and the 
255.9   commissioner, or to a majority of them, they shall give an order 
255.10  to the commissioner of finance to issue a warrant upon the 
255.11  treasurer for such amount, and such warrant shall thereupon be 
255.12  issued.  If no such claim be presented within six years, the 
255.13  commissioner shall so note upon the commissioner's copy of said 
255.14  list and certify the fact to the commissioner of finance and 
255.15  treasurer who shall make like entries upon the commissioner of 
255.16  finance's corresponding lists in their hands; and all further 
255.17  claims to said money shall be barred.  Provided, that the state 
255.18  treasurer commissioner of finance shall transfer to the 
255.19  commissioner of commerce's liquidation fund created by this 
255.20  section not to exceed 50 percent of the amount so turned over by 
255.21  the commissioner, to be used to partially defray expenses in 
255.22  connection with the liquidation of closed banks and the conduct 
255.23  of the liquidation division, in such amounts and at such times 
255.24  as the commissioner shall request. 
255.25     There is hereby appropriated to the persons entitled to 
255.26  such amounts, from such moneys in the state treasury not 
255.27  otherwise appropriated, an amount sufficient to make such 
255.28  payment.  
255.29     Sec. 8.  Minnesota Statutes 2000, section 49.24, 
255.30  subdivision 16, is amended to read: 
255.31     Subd. 16.  [TRANSFERS TO LIQUIDATION FUND.] The following 
255.32  moneys shall be transferred to and deposited in the commissioner 
255.33  of commerce's liquidation fund: 
255.34     (1) All moneys paid to the state treasurer commissioner of 
255.35  finance by the commissioner out of funds of any financial 
255.36  institution in the commissioner's hands as reimbursement for 
256.1   services and expenses pursuant to the provisions of subdivision 
256.2   7.  
256.3      (2) All moneys in the possession of the commissioner set 
256.4   aside for the purpose of meeting unforeseen and contingent 
256.5   expenses incident to the liquidation of closed financial 
256.6   institutions, which funds have been or shall be hereafter 
256.7   established by withholding portions of final liquidating 
256.8   dividends in such cases.  
256.9      (3) All moneys which the commissioner shall request the 
256.10  state treasurer commissioner of finance to transfer to such fund 
256.11  pursuant to the provisions of subdivision 13.  
256.12     (4) All moneys in the possession of the commissioner now 
256.13  carried on the commissioner's books in "stamp account," 
256.14  "suspense account," and "unclaimed deposit account."  
256.15     (5) All moneys in the possession of the commissioner which 
256.16  the commissioner may be authorized by order of any district 
256.17  court having jurisdiction of any liquidation proceedings to 
256.18  transfer to such fund, or to use for any of the purposes for 
256.19  which the fund is established.  
256.20     (6) All moneys in the possession of the commissioner 
256.21  carried on the commissioner's books in the "unclaimed bonds 
256.22  account."  At any time within one year after the effective date 
256.23  of Laws 1945, chapter 128, or within six years after any bond 
256.24  the proceeds of the sale of which constitute a portion of the 
256.25  moneys in this paragraph referred to came into the possession of 
256.26  the commissioner as liquidator of any financial institution, 
256.27  whichever is later, any claimant thereto may apply to the 
256.28  commissioner for the proceeds of the sale of such bond, and, 
256.29  upon proof satisfactory to the governor, the attorney general, 
256.30  and the commissioner, or a majority of them, they shall give an 
256.31  order to the commissioner of finance to issue a warrant upon the 
256.32  treasurer for such amount, without interest, and such warrant 
256.33  shall thereupon be issued and the amount thereof paid out of the 
256.34  commissioner of commerce's liquidation fund.  If no such claim 
256.35  be presented within such period, all further claims to the 
256.36  proceeds of any such bond shall be barred.  
257.1      (7) All sums which the commissioner may receive from the 
257.2   sale of personal property of liquidated financial institutions 
257.3   where the final dividend has been paid and no disposition of 
257.4   said property made by any order of the court, and the proceeds 
257.5   of sales of any personal property used by the liquidation 
257.6   division which have been purchased with funds of financial 
257.7   institutions in liquidation.  
257.8      Sec. 9.  Minnesota Statutes 2000, section 84A.11, is 
257.9   amended to read: 
257.10     84A.11 [WHEN BONDS PAID IN PART BY COUNTIES.] 
257.11     A county containing a portion of the preserve may 
257.12  voluntarily assume, in the manner specified in this section, the 
257.13  obligation to pay a portion of the principal and interest of the 
257.14  bonds issued before April 19, 1929, and remaining unpaid at 
257.15  maturity, of any school district or town in the county and 
257.16  wholly or partly within the preserve.  The portion must bear the 
257.17  same proportion to the whole of the unpaid principal and 
257.18  interest as the 1928 assessed valuation of lands then acquired 
257.19  by the state under sections 84A.01 to 84A.11 in that school 
257.20  district or town bears to the total 1928 assessed valuation of 
257.21  the school district or town. 
257.22     This assumption must be evidenced by a resolution of the 
257.23  county board.  A copy of the resolution must be certified to the 
257.24  commissioner of finance within one year after the passage of 
257.25  sections 84A.01 to 84A.11. 
257.26     After that time, if any bonds remain unpaid at maturity, 
257.27  the county board shall, upon demand of the governing body of the 
257.28  school district or town or of a bondholder, provide for the 
257.29  payment of the portion assumed.  The county board shall levy 
257.30  general taxes on all the taxable property of the county for that 
257.31  purpose, or shall issue its bonds to raise the sum needed 
257.32  conforming to law respecting the issuance of county refunding 
257.33  bonds.  The proceeds of these taxes or bonds must be paid by the 
257.34  county treasurer to the treasurers of the respective school 
257.35  districts or towns.  
257.36     If a county fails to adopt and certify this resolution, the 
258.1   commissioner of finance shall withhold from the payments to be 
258.2   made to the county, under section 84A.04, a sum equal to that 
258.3   portion of the principal and interest of these outstanding bonds 
258.4   that bears the same proportion to the whole principal and 
258.5   interest as the 1928 assessed valuation of lands acquired by the 
258.6   state within the preserve bears to the total 1928 assessed 
258.7   valuation of the school district or town.  The money withheld 
258.8   must be set aside in the state treasury and not paid to the 
258.9   county until the full principal and interest of these school 
258.10  district and town bonds is paid.  
258.11     If any bonds remain unpaid at maturity, upon the demand of 
258.12  the governing body of the school district or town, or a 
258.13  bondholder, the commissioner of finance shall issue to the 
258.14  treasurer of the school district or town a warrant on the state 
258.15  treasurer for that portion of the past due principal and 
258.16  interest computed as in the case of the county liability 
258.17  authorized to be voluntarily assumed.  Money received by a 
258.18  school district or town under this section must be applied to 
258.19  the payment of these past due bonds and interest.  
258.20     Sec. 10.  Minnesota Statutes 2000, section 84A.23, 
258.21  subdivision 4, is amended to read: 
258.22     Subd. 4.  [DRAINAGE DITCH BONDS; REPORTS.] (a) Immediately 
258.23  after a project is approved and accepted and then after each 
258.24  distribution of the tax collections on the June and November tax 
258.25  settlements, the county auditor shall certify to the 
258.26  commissioner of finance the following information relating to 
258.27  bonds issued to finance or refinance public drainage ditches 
258.28  wholly or partly within the projects, and the collection of 
258.29  assessments levied on account of the ditches: 
258.30     (1) the amount of principal and interest to become due on 
258.31  the bonds before the next tax settlement and distribution; 
258.32     (2) the amount of money collected from the drainage 
258.33  assessments and credited to the funds of the ditches; and 
258.34     (3) the amount of the deficit in the ditch fund of the 
258.35  county chargeable to the ditches.  
258.36     (b) On approving the certificate, the commissioner of 
259.1   finance shall draw a warrant on the state treasurer, payable out 
259.2   of the fund pertaining to the project, for the amount of the 
259.3   deficit in favor of the county.  
259.4      (c) As to public drainage ditches wholly within a project, 
259.5   the amount of money paid to or for the benefit of the county 
259.6   under paragraph (b) must never exceed the principal and interest 
259.7   of the bonds issued to finance or refinance the ditches 
259.8   outstanding at the time of the passage and approval of sections 
259.9   84A.20 to 84A.30, less money on hand in the county ditch fund to 
259.10  the credit of the ditches.  The liabilities must be reduced from 
259.11  time to time by the amount of all payments of assessments after 
259.12  April 25, 1931, made by the owners of lands assessed before that 
259.13  date for benefits on account of the ditches. 
259.14     (d) As to public drainage ditches partly within and partly 
259.15  outside a project, the amount paid from the fund pertaining to 
259.16  the project to or for the benefit of the county must never 
259.17  exceed a certain percentage of bonds issued to finance and 
259.18  refinance the ditches so outstanding, less money on hand in the 
259.19  county ditch fund to the credit of the ditches on April 25, 
259.20  1931.  The percentage must bear the same proportion to the whole 
259.21  amount of these bonds as the original benefits assessed against 
259.22  lands within the project bear to the original total benefits 
259.23  assessed to the entire system of the ditches.  This liability 
259.24  shall be reduced from time to time by the payments of all 
259.25  assessments extended after April 25, 1931, made by the owners of 
259.26  lands within the project of assessments for benefits assessed 
259.27  before that date on account of a ditch.  
259.28     (e) The commissioner of finance may provide and prescribe 
259.29  forms for reports required by sections 84A.20 to 84A.30 and 
259.30  require any additional information from county officials that 
259.31  the commissioner of finance considers necessary for the proper 
259.32  administration of sections 84A.20 to 84A.30.  
259.33     Sec. 11.  Minnesota Statutes 2000, section 84A.33, 
259.34  subdivision 4, is amended to read: 
259.35     Subd. 4.  [DITCH BONDS; FUNDS; PAYMENTS TO COUNTIES.] (a) 
259.36  Upon the approval and acceptance of a project and after each 
260.1   distribution of the tax collections for the June and November 
260.2   tax settlements, the county auditor shall certify to the 
260.3   commissioner of finance the following information about bonds 
260.4   issued to finance or refinance public drainage ditches wholly or 
260.5   partly within the projects, and the collection of assessments 
260.6   levied for the ditches: 
260.7      (1) the amount of principal and interest to become due on 
260.8   the bonds before the next tax settlement and distribution; 
260.9      (2) the amount of money collected from the drainage 
260.10  assessments and credited to the funds of the ditches, not 
260.11  already sent to the state treasurer commissioner of finance as 
260.12  provided in sections 84A.31 to 84A.42; and 
260.13     (3) the amount of the deficit in the ditch fund of the 
260.14  county chargeable to the ditches.  
260.15     (b) On approving this certificate of the county auditor, 
260.16  the commissioner of finance shall draw a warrant on the state 
260.17  treasurer, payable out of the fund provided for in sections 
260.18  84A.31 to 84A.42, and send it to the county treasurer of the 
260.19  county.  These funds must be credited to the proper ditch of the 
260.20  county and placed in the ditch bond fund of the county, which is 
260.21  created, and used only to pay the ditch bonded indebtedness of 
260.22  the county assumed by the state under sections 84A.31 to 
260.23  84A.42.  The total amount of warrants drawn must not exceed in 
260.24  any one year the total amount of the deficit provided for under 
260.25  this section.  
260.26     (c) The state is subrogated to all title, right, interest, 
260.27  or lien of the county in or on the lands so certified within 
260.28  these projects.  
260.29     (d) As to public drainage ditches wholly within a project, 
260.30  the amount paid to, or for the benefit of, the county under this 
260.31  subdivision must never exceed the principal and interest of the 
260.32  bonds issued to finance or refinance a ditch outstanding on 
260.33  April 22, 1933, less money on hand in the county ditch fund to 
260.34  the credit of a ditch.  These liabilities must be reduced from 
260.35  time to time by the amount of any payments of assessments 
260.36  extended after April 22, 1933, made by the owners of lands 
261.1   assessed before that date for benefits on account of the ditches.
261.2      As to public drainage ditches partly within and partly 
261.3   outside a project the amount paid from the fund pertaining to 
261.4   the project to or for the benefit of the county must never 
261.5   exceed a certain percentage of bonds issued to finance and 
261.6   refinance a ditch so outstanding, less money on hand in the 
261.7   county ditch fund to the credit of a ditch on April 22, 1932.  
261.8   The percentage must bear the same proportion to the whole amount 
261.9   of the bonds as the original benefits assessed against these 
261.10  lands within the project bear to the original total benefits 
261.11  assessed to the entire system for a ditch.  This liability must 
261.12  be reduced from time to time by the payments of all assessments 
261.13  extended after April 22, 1933, made by the owners of lands 
261.14  within the project of assessments for benefits assessed before 
261.15  that date on account of a ditch.  
261.16     Sec. 12.  Minnesota Statutes 2000, section 84A.40, is 
261.17  amended to read: 
261.18     84A.40 [COUNTY MAY ASSUME BONDS.] 
261.19     Any county where a project or portion of it is located may 
261.20  voluntarily assume, in the manner specified in this section, the 
261.21  obligation to pay a portion of the principal and interest of the 
261.22  bonds issued before the approval and acceptance of the project 
261.23  and remaining unpaid at maturity, of any school district or town 
261.24  in the county and wholly or partly within the project.  The 
261.25  portion must bear the same proportion to the whole of the unpaid 
261.26  principal and interest as the last net tax capacity, before the 
261.27  acceptance of the project, of lands then acquired by the state 
261.28  under sections 84A.31 to 84A.42 in the school districts or towns 
261.29  bears to the total net tax capacity for the same year of the 
261.30  school district or town.  This assumption must be evidenced by a 
261.31  resolution of the county board of the county.  A copy of the 
261.32  resolution must be certified to the commissioner of finance 
261.33  within one year after the acceptance of the project. 
261.34     Later, if any of the bonds remains unpaid at maturity, the 
261.35  county board shall, upon demand of the governing body of the 
261.36  school district or town or of a bondholder, provide for the 
262.1   payment of the portion assumed.  The county shall levy general 
262.2   taxes on all the taxable property of the county for that 
262.3   purpose, or issue its bonds to raise the sum needed, conforming 
262.4   to law respecting the issuance of county refunding bonds.  The 
262.5   proceeds of taxes or bonds must be paid by the county treasurer 
262.6   to the treasurer of the school district or town.  No payments 
262.7   shall be made by the county to the school district or town until 
262.8   the money in the treasury of the school district or town, 
262.9   together with the money to be paid by the county, is sufficient 
262.10  to pay in full each of the bonds as it becomes due.  
262.11     If a county fails to adopt and certify the resolution, the 
262.12  commissioner of finance shall withhold from the payments to be 
262.13  made to the county under section 84A.32 a sum equal to that 
262.14  portion of the principal and interest of the outstanding bonds 
262.15  that bears the same proportion to the whole of the bonds as the 
262.16  above determined net tax capacity of lands acquired by the state 
262.17  within the project bears to the total net tax capacity for the 
262.18  same year of the school district or town.  Money withheld from 
262.19  the county must be set aside in the state treasury and not paid 
262.20  to the county until the full principal and interest of the 
262.21  school district and town bonds have been paid.  
262.22     If any bonds remain unpaid at maturity, upon the demand of 
262.23  the governing body of the school district or town, or a 
262.24  bondholder, the commissioner of finance shall issue to the 
262.25  treasurer of the school district or town a warrant on the state 
262.26  treasurer for that portion of the past due principal and 
262.27  interest computed as in the case of the county's liability 
262.28  authorized in this section to be voluntarily assumed.  Money 
262.29  received by a school district or town under this section must be 
262.30  applied to the payment of past-due bonds and interest.  
262.31     Sec. 13.  Minnesota Statutes 2000, section 85A.05, 
262.32  subdivision 2, is amended to read: 
262.33     Subd. 2.  [ISSUANCE OF BONDS.] Upon request by resolution 
262.34  of the Minnesota zoological board and upon authorization as 
262.35  provided in subdivision 1 the commissioner of finance shall sell 
262.36  and issue Minnesota zoological garden bonds in the aggregate 
263.1   amount requested, upon sealed bids and upon such notice, at such 
263.2   price, in such form and denominations, bearing interest at such 
263.3   rate or rates, maturing in such amounts and on such dates, 
263.4   without option of prepayment or subject to prepayment upon such 
263.5   notice and at such times and prices, payable at such bank or 
263.6   banks within or outside the state, with such provisions for 
263.7   registration, conversion, and exchange and for the issuance of 
263.8   notes in anticipation of the sale or delivery of definitive 
263.9   bonds, and in accordance with such further rules, as the 
263.10  commissioner of finance shall determine, subject to the approval 
263.11  of the attorney general, but not subject to chapter 14, 
263.12  including section 14.386.  The bonds shall be executed by the 
263.13  commissioner of finance and attested by the state treasurer 
263.14  under their official seals seal.  The signatures of the officers 
263.15  signature on the bonds and any appurtenant interest coupons and 
263.16  their seals the seal may be printed, lithographed, engraved, or 
263.17  stamped thereon, except that each bond shall be authenticated by 
263.18  the manual signature on its face of one of the officers the 
263.19  commissioner of finance or of an officer of a bank designated by 
263.20  them as authenticating agent.  The commissioner of finance shall 
263.21  ascertain and certify to the purchasers of the bonds the 
263.22  performance and existence of all acts, conditions, and things 
263.23  necessary to make them valid and binding general obligations of 
263.24  the state of Minnesota, subject to the approval of the attorney 
263.25  general.  
263.26     Sec. 14.  Minnesota Statutes 2000, section 94.53, is 
263.27  amended to read: 
263.28     94.53 [WARRANT TO COUNTY TREASURERS; FEDERAL LOANS TO 
263.29  COUNTIES.] 
263.30     It shall be the duty of the commissioner of finance to 
263.31  transmit warrants on the state treasury to the county treasurers 
263.32  of the respective counties for the sum that may be due in 
263.33  accordance with sections 94.52 to 94.54, which sum or sums are 
263.34  hereby appropriated out of the state treasury from the amounts 
263.35  received from the United States government pursuant to the 
263.36  aforesaid act of Congress.  The commissioner of finance, upon 
264.1   being notified by the federal government or any agencies thereof 
264.2   that a loan has been made to any such county the repayment of 
264.3   which is to be made from such fund, is authorized to transmit a 
264.4   warrant or warrants on the state treasurer to the federal 
264.5   government or any agency thereof sufficient to repay such loan 
264.6   out of any money apportioned or due to such county under the 
264.7   provisions of such act of Congress, approved May 23, 1908 
264.8   (Statutes at Large, volume 35, page 260).  
264.9      Sec. 15.  Minnesota Statutes 2000, section 115A.58, 
264.10  subdivision 2, is amended to read: 
264.11     Subd. 2.  [ISSUANCE OF BONDS.] Upon request by the director 
264.12  and upon authorization as provided in subdivision 1, the 
264.13  commissioner of finance shall sell Minnesota state waste 
264.14  management bonds.  The bonds shall be in the aggregate amount 
264.15  requested, and sold upon sealed bids upon the notice, at the 
264.16  price in the form and denominations, bearing interest at the 
264.17  rate or rates, maturing in the amounts and on the dates (with or 
264.18  without option of prepayment upon notice and at specified times 
264.19  and prices), payable at a bank or banks within or outside the 
264.20  state (with provisions, if any, for registration, conversion, 
264.21  and exchange and for the issuance of temporary bonds or notes in 
264.22  anticipation of the sale or delivery of definitive bonds), and 
264.23  in accordance with further provisions as the commissioner of 
264.24  finance shall determine, subject to the approval of the attorney 
264.25  general, but not subject to chapter 14, including section 
264.26  14.386.  The bonds shall be executed by the commissioner of 
264.27  finance and attested by the state treasurer under their official 
264.28  seals seal.  The signatures of the officers signature on the 
264.29  bonds and any interest coupons and their seals the seal may be 
264.30  printed, lithographed, engraved, stamped, or otherwise 
264.31  reproduced thereon, except that each bond shall be authenticated 
264.32  by the manual signature on its face of one of the officers the 
264.33  commissioner of finance or of an authorized representative of a 
264.34  bank designated by the commissioner of finance as registrar or 
264.35  other authenticating agent.  The commissioner of finance shall 
264.36  ascertain and certify to the purchasers of the bonds the 
265.1   performance and existence of all acts, conditions, and things 
265.2   necessary to make them valid and binding general obligations of 
265.3   the state of Minnesota, subject to the approval of the attorney 
265.4   general. 
265.5      Sec. 16.  Minnesota Statutes 2000, section 116.16, 
265.6   subdivision 4, is amended to read: 
265.7      Subd. 4.  [DISBURSEMENTS.] Disbursements for the water 
265.8   pollution control program shall be made by the state treasurer 
265.9   upon order of the commissioner of finance at the times and in 
265.10  the amounts requested by the agency or the Minnesota public 
265.11  facilities authority in accordance with the applicable state and 
265.12  federal law governing such disbursements; except that no 
265.13  appropriation or loan of state funds for any project shall be 
265.14  disbursed to any municipality until and unless the agency has by 
265.15  resolution determined the total estimated cost of the project, 
265.16  and ascertained that financing of the project is assured by: 
265.17     (1) a grant to the municipality by an agency of the federal 
265.18  government within the amount of funds then appropriated to that 
265.19  agency and allocated by it to projects within the state; or 
265.20     (2) a grant of funds appropriated by state law; or 
265.21     (3) a loan authorized by state law; or 
265.22     (4) the appropriation of proceeds of bonds or other funds 
265.23  of the municipality to a fund for the construction of the 
265.24  project; or 
265.25     (5) any or all of the means referred to in clauses (1) to 
265.26  (4); and 
265.27     (6) an irrevocable undertaking, by resolution of the 
265.28  governing body of the municipality, to use all funds so made 
265.29  available exclusively for the construction of the project, and 
265.30  to pay any additional amount by which the cost of the project 
265.31  exceeds the estimate, by the appropriation to the construction 
265.32  fund of additional municipal funds or the proceeds of additional 
265.33  bonds to be issued by the municipality; and 
265.34     (7) conformity of the project and of the loan or grant 
265.35  application with the state water pollution control plan as 
265.36  certified to the federal government and with all other 
266.1   conditions under applicable state and federal law for a grant of 
266.2   state or federal funds of the nature and in the amount involved. 
266.3      Sec. 17.  Minnesota Statutes 2000, section 116.17, 
266.4   subdivision 2, is amended to read: 
266.5      Subd. 2.  [ISSUANCE OF BONDS.] Upon request by resolution 
266.6   of the agency and upon authorization as provided in subdivision 
266.7   1 the commissioner of finance shall sell and issue Minnesota 
266.8   state water pollution control bonds in the aggregate amount 
266.9   requested, upon sealed bids and upon such notice, at such price, 
266.10  in such form and denominations, bearing interest at a rate or 
266.11  rates, maturing in amounts and on dates, with or without option 
266.12  of prepayment upon notice and at specified times and prices, 
266.13  payable at a bank or banks within or outside the state, with 
266.14  provisions, if any, for registration, conversion, and exchange 
266.15  and for the issuance of temporary bonds or notes in anticipation 
266.16  of the sale or delivery of definitive bonds, and in accordance 
266.17  with further provisions, as the commissioner of finance shall 
266.18  determine, subject to the approval of the attorney general, but 
266.19  not subject to chapter 14, including section 14.386.  The bonds 
266.20  shall be executed by the commissioner of finance and attested by 
266.21  the state treasurer under their official seals seal.  The 
266.22  signatures signature of the officers commissioner on the bonds 
266.23  and any appurtenant interest coupons and their seals the seal 
266.24  may be printed, lithographed, engraved, stamped, or otherwise 
266.25  reproduced thereon, except that each bond shall be authenticated 
266.26  by the manual signature on its face of one of the officers the 
266.27  commissioner or of an authorized representative of a bank 
266.28  designated by the commissioner as registrar or other 
266.29  authenticating agent.  The commissioner of finance shall 
266.30  ascertain and certify to the purchasers of the bonds the 
266.31  performance and existence of all acts, conditions, and things 
266.32  necessary to make them valid and binding general obligations of 
266.33  the state of Minnesota, subject to the approval of the attorney 
266.34  general. 
266.35     Sec. 18.  Minnesota Statutes 2001 Supplement, section 
266.36  122A.21, is amended to read: 
267.1      122A.21 [TEACHERS' AND ADMINISTRATORS' LICENSES; FEES.] 
267.2      Each application for the issuance, renewal, or extension of 
267.3   a license to teach must be accompanied by a processing fee in an 
267.4   amount set by the board of teaching by rule.  Each application 
267.5   for issuing, renewing, or extending the license of a school 
267.6   administrator or supervisor must be accompanied by a processing 
267.7   fee in the amount set by the board of teaching.  The processing 
267.8   fee for a teacher's license and for the licenses of supervisory 
267.9   personnel must be paid to the executive secretary of the 
267.10  appropriate board.  The executive secretary of the board shall 
267.11  deposit the fees with the state treasurer, as provided by law, 
267.12  and report each month to the commissioner of finance the amount 
267.13  of fees collected.  The fees as set by the board are 
267.14  nonrefundable for applicants not qualifying for a license.  
267.15  However, a fee must be refunded by the state treasurer 
267.16  commissioner of finance in any case in which the applicant 
267.17  already holds a valid unexpired license.  The board may waive or 
267.18  reduce fees for applicants who apply at the same time for more 
267.19  than one license. 
267.20     Sec. 19.  Minnesota Statutes 2000, section 126C.72, 
267.21  subdivision 2, is amended to read: 
267.22     Subd. 2.  [ISSUANCE AND SALE OF BONDS; COMMISSIONER OF 
267.23  FINANCE.] Upon receipt of each such certification, subject to 
267.24  authorization as provided in subdivision 4, the commissioner of 
267.25  finance shall from time to time as needed issue and sell state 
267.26  of Minnesota school loan bonds in the aggregate principal amount 
267.27  stated in the commissioner's certificate, for the prompt and 
267.28  full payment of which, with the interest thereon, the full 
267.29  faith, credit, and taxing powers of the state are hereby 
267.30  irrevocably pledged.  The commissioner of finance shall credit 
267.31  the net proceeds of the sale of the bonds to the purposes for 
267.32  which they are appropriated by section 126C.66, subdivision 1.  
267.33  The bonds shall be issued and sold at such price, in such 
267.34  manner, in such number of series, at such times, and in such 
267.35  form and denominations, shall bear such dates of issue and of 
267.36  maturity, either without option of prior redemption or subject 
268.1   to prepayment upon such notice and at such times and prices, 
268.2   shall bear interest at such rate or rates and payable at such 
268.3   intervals, shall be payable at such bank or banks within or 
268.4   without the state, with such provisions for registration, 
268.5   conversion, and exchange, and for the issuance of notes in 
268.6   anticipation of the sale and delivery of definitive bonds, and 
268.7   in accordance with such further provisions as the commissioner 
268.8   of finance shall determine subject to the limitations stated in 
268.9   this subdivision (but not subject to chapter 14, including 
268.10  section 14.386).  The maturity date must not be more than 20 
268.11  years after the date of issue of any bond and the principal 
268.12  amounts.  The due dates must conform as near as may be with the 
268.13  commissioner's estimates of dates and amounts of payments to be 
268.14  received on debt service and capital loans.  The bonds and any 
268.15  interest coupons attached to them must be executed by the 
268.16  commissioner of finance and attested by the state treasurer 
268.17  under their official seals seal.  The signatures signature of 
268.18  these officers the commissioner and their seals the seal may be 
268.19  printed, lithographed, stamped, engraved, or otherwise 
268.20  reproduced thereon.  Each bond must be authenticated by the 
268.21  manual signature on its face of one of the officers commissioner 
268.22  or a person authorized to sign on behalf of a bank or trust 
268.23  company designated by the commissioner to act as registrar or 
268.24  other authenticating agent.  The commissioner of finance is 
268.25  authorized and directed to ascertain and certify to purchasers 
268.26  of the bonds the performance and existence of all acts, 
268.27  conditions, and things necessary to make them valid and binding 
268.28  general obligations of the state of Minnesota in accordance with 
268.29  their terms.  
268.30     Sec. 20.  Minnesota Statutes 2000, section 127A.40, is 
268.31  amended to read: 
268.32     127A.40 [MANNER OF PAYMENT OF STATE AIDS.] 
268.33     It shall be the duty of the commissioner to deliver to the 
268.34  commissioner of finance a certificate for each district entitled 
268.35  to receive state aid under the provisions of this chapter.  Upon 
268.36  the receipt of such certificate, it shall be the duty of the 
269.1   commissioner of finance to draw a warrant upon the state 
269.2   treasurer in favor of the district for the amount shown by each 
269.3   certificate to be due to the district.  The commissioner of 
269.4   finance shall transmit such warrants to the district together 
269.5   with a copy of the certificate prepared by the commissioner. 
269.6      Sec. 21.  Minnesota Statutes 2000, section 161.05, 
269.7   subdivision 3, is amended to read: 
269.8      Subd. 3.  [CERTIFICATE.] Before the state treasurer 
269.9   commissioner of finance shall make any such loan, the 
269.10  commissioner shall file with the commissioner of finance and the 
269.11  state treasurer a certificate showing the amount of 
269.12  disbursements from the trunk highway fund which are to be repaid 
269.13  to the state by the federal government.  
269.14     Sec. 22.  Minnesota Statutes 2000, section 161.07, is 
269.15  amended to read: 
269.16     161.07 [MANNER OF PAYMENTS.] 
269.17     Subdivision 1.  [ABSTRACT FOR PAYMENT.] In all cases of 
269.18  payments to be made as herein authorized by the commissioner out 
269.19  of the trunk highway fund, the same shall be made in the 
269.20  following manner.  The commissioner shall furnish verified 
269.21  abstracts of the same, prepared in triplicate duplicate, one of 
269.22  which shall be delivered to the commissioner of finance, one to 
269.23  the state treasurer, and one to be retained by the commissioner 
269.24  of transportation.  The abstract shall contain the name, 
269.25  residence, and the amount due each claimant and designate the 
269.26  contract or purpose for which the payment is made. 
269.27     Subd. 2.  [PAYMENT.] The copy of the abstracts delivered to 
269.28  the commissioner of finance shall be accompanied by the original 
269.29  voucher or vouchers, together with the proof of claim for each 
269.30  item included in such abstracts.  If there be sufficient money 
269.31  in the proper fund, the commissioner of finance shall issue a 
269.32  warrant upon the state treasurer for the gross amount shown by 
269.33  such abstract.  The state treasurer commissioner of finance 
269.34  shall deliver checks to the several persons entitled thereto as 
269.35  shown by such abstracts, and shall preserve in the treasurer's 
269.36  commissioner's office a record of each check and remittance 
270.1   showing the date of each issue, the name of the payee, and any 
270.2   other facts tending to evidence its payment. 
270.3      Sec. 23.  Minnesota Statutes 2000, section 167.50, 
270.4   subdivision 2, is amended to read: 
270.5      Subd. 2.  [ISSUANCE AND SALE.] The bonds shall be issued 
270.6   and sold upon competitive bids after published notice.  The 
270.7   bonds shall be issued and sold at the times and prices (not less 
270.8   than par and accrued interest), in the form and denominations, 
270.9   bearing interest at the rate or rates, maturing on dates, with 
270.10  or without option of prior redemption upon notice and at 
270.11  specified times and prices, payable at a bank or banks, within 
270.12  or without the state, with provisions for registration, 
270.13  conversion, and exchange and for the issuance of temporary bonds 
270.14  or notes in anticipation of the sale and delivery of definitive 
270.15  bonds, and in accordance with such further provisions, as the 
270.16  commissioner of finance may determine, subject to the approval 
270.17  of the attorney general (but not subject to the provisions of 
270.18  chapter 14, including 14.386).  Each bond shall mature within 20 
270.19  years from its date of issue and shall be executed by the 
270.20  commissioner of finance and attested by the state treasurer 
270.21  under their official seals seal.  The signatures signature of 
270.22  these officers the commissioner on the face of and any interest 
270.23  coupons appurtenant to any bond, and their seals the seal may be 
270.24  printed, lithographed, stamped, engraved, or otherwise 
270.25  reproduced thereon, provided that the signature of one of the 
270.26  officers, or of an authorized representative of a corporate 
270.27  registrar or other agent designated by the commissioner of 
270.28  finance to authenticate the bonds, shall be manually subscribed 
270.29  on the face of each bond.  
270.30     Sec. 24.  Minnesota Statutes 2000, section 174.51, 
270.31  subdivision 2, is amended to read: 
270.32     Subd. 2.  [SALE; GENERAL OBLIGATIONS.] The bonds shall be 
270.33  sold upon sealed bids and upon notice, at a price, in form and 
270.34  denominations, bearing interest at a rate or rates, maturing in 
270.35  amounts and on dates, without option of prior redemption or 
270.36  subject to prepayment upon notice and at times and prices, 
271.1   payable at a bank or banks within or outside the state, with or 
271.2   without provisions for registration, conversion, exchange, and 
271.3   issuance of temporary bonds or notes in anticipation of the sale 
271.4   or delivery of definitive bonds, and in accordance with further 
271.5   provisions, as the commissioner of finance shall determine 
271.6   subject to the approval of the attorney general, but not subject 
271.7   to the provisions of chapter 14, including section 14.386.  Each 
271.8   bond shall mature within 20 years from its date of issue and 
271.9   shall be executed by the commissioner of finance and attested by 
271.10  the state treasurer under their official seals seal.  The 
271.11  signatures signature on the bonds and on any interest coupons 
271.12  and the seals seal may be printed or otherwise reproduced, 
271.13  except that each bond shall be authenticated by the manual 
271.14  signature on its face of one of the officers the commissioner of 
271.15  finance or of a person authorized to sign on behalf of a bank 
271.16  designated by the commissioner of finance as registrar or other 
271.17  authenticating agent.  The commissioner of finance shall 
271.18  ascertain and certify to the purchasers of the bonds the 
271.19  performance and existence of all acts, conditions, and things 
271.20  necessary to make them valid and binding general obligations of 
271.21  the state of Minnesota, subject to the approval of the attorney 
271.22  general. 
271.23     Sec. 25.  Minnesota Statutes 2000, section 176.181, 
271.24  subdivision 2, is amended to read: 
271.25     Subd. 2.  [COMPULSORY INSURANCE; SELF-INSURERS.] (1) Every 
271.26  employer, except the state and its municipal subdivisions, 
271.27  liable under this chapter to pay compensation shall insure 
271.28  payment of compensation with some insurance carrier authorized 
271.29  to insure workers' compensation liability in this state, or 
271.30  obtain a written order from the commissioner of commerce 
271.31  exempting the employer from insuring liability for compensation 
271.32  and permitting self-insurance of the liability.  The terms, 
271.33  conditions and requirements governing self-insurance shall be 
271.34  established by the commissioner pursuant to chapter 14.  The 
271.35  commissioner of commerce shall also adopt, pursuant to clause 
271.36  (2)(c), rules permitting two or more employers, whether or not 
272.1   they are in the same industry, to enter into agreements to pool 
272.2   their liabilities under this chapter for the purpose of 
272.3   qualifying as group self-insurers.  With the approval of the 
272.4   commissioner of commerce, any employer may exclude medical, 
272.5   chiropractic and hospital benefits as required by this chapter.  
272.6   An employer conducting distinct operations at different 
272.7   locations may either insure or self-insure the other portion of 
272.8   operations as a distinct and separate risk.  An employer 
272.9   desiring to be exempted from insuring liability for compensation 
272.10  shall make application to the commissioner of commerce, showing 
272.11  financial ability to pay the compensation, whereupon by written 
272.12  order the commissioner of commerce, on deeming it proper, may 
272.13  make an exemption.  An employer may establish financial ability 
272.14  to pay compensation by providing financial statements of the 
272.15  employer to the commissioner of commerce.  Upon ten days' 
272.16  written notice the commissioner of commerce may revoke the order 
272.17  granting an exemption, in which event the employer shall 
272.18  immediately insure the liability.  As a condition for the 
272.19  granting of an exemption the commissioner of commerce may 
272.20  require the employer to furnish security the commissioner of 
272.21  commerce considers sufficient to insure payment of all claims 
272.22  under this chapter, consistent with subdivision 2b.  If the 
272.23  required security is in the form of currency or negotiable 
272.24  bonds, the commissioner of commerce shall deposit it with the 
272.25  state treasurer commissioner of finance.  In the event of any 
272.26  default upon the part of a self-insurer to abide by any final 
272.27  order or decision of the commissioner of labor and industry 
272.28  directing and awarding payment of compensation and benefits to 
272.29  any employee or the dependents of any deceased employee, then 
272.30  upon at least ten days' notice to the self-insurer, the 
272.31  commissioner of commerce may by written order to the state 
272.32  treasurer commissioner of finance require the 
272.33  treasurer commissioner of finance to sell the pledged and 
272.34  assigned securities or a part thereof necessary to pay the full 
272.35  amount of any such claim or award with interest thereon.  This 
272.36  authority to sell may be exercised from time to time to satisfy 
273.1   any order or award of the commissioner of labor and industry or 
273.2   any judgment obtained thereon.  When securities are sold the 
273.3   money obtained shall be deposited in the state treasury to the 
273.4   credit of the commissioner of commerce and awards made against 
273.5   any such self-insurer by the commissioner of commerce shall be 
273.6   paid to the persons entitled thereto by the state treasurer 
273.7   commissioner of finance upon warrants prepared by the 
273.8   commissioner of commerce and approved by the commissioner of 
273.9   finance out of the proceeds of the sale of securities.  Where 
273.10  the security is in the form of a surety bond or personal 
273.11  guaranty the commissioner of commerce, at any time, upon at 
273.12  least ten days' notice and opportunity to be heard, may require 
273.13  the surety to pay the amount of the award, the payments to be 
273.14  enforced in like manner as the award may be enforced. 
273.15     (2)(a) No association, corporation, partnership, sole 
273.16  proprietorship, trust or other business entity shall provide 
273.17  services in the design, establishment or administration of a 
273.18  group self-insurance plan under rules adopted pursuant to this 
273.19  subdivision unless it is licensed, or exempt from licensure, 
273.20  pursuant to section 60A.23, subdivision 8, to do so by the 
273.21  commissioner of commerce.  An applicant for a license shall 
273.22  state in writing the type of activities it seeks authorization 
273.23  to engage in and the type of services it seeks authorization to 
273.24  provide.  The license shall be granted only when the 
273.25  commissioner of commerce is satisfied that the entity possesses 
273.26  the necessary organization, background, expertise, and financial 
273.27  integrity to supply the services sought to be offered.  The 
273.28  commissioner of commerce may issue a license subject to 
273.29  restrictions or limitations, including restrictions or 
273.30  limitations on the type of services which may be supplied or the 
273.31  activities which may be engaged in.  The license is for a 
273.32  two-year period. 
273.33     (b) To assure that group self-insurance plans are 
273.34  financially solvent, administered in a fair and capable fashion, 
273.35  and able to process claims and pay benefits in a prompt, fair 
273.36  and equitable manner, entities licensed to engage in such 
274.1   business are subject to supervision and examination by the 
274.2   commissioner of commerce. 
274.3      (c) To carry out the purposes of this subdivision, the 
274.4   commissioner of commerce may promulgate administrative rules 
274.5   pursuant to sections 14.001 to 14.69. These rules may: 
274.6      (i) establish reporting requirements for administrators of 
274.7   group self-insurance plans; 
274.8      (ii) establish standards and guidelines consistent with 
274.9   subdivision 2b to assure the adequacy of the financing and 
274.10  administration of group self-insurance plans; 
274.11     (iii) establish bonding requirements or other provisions 
274.12  assuring the financial integrity of entities administering group 
274.13  self-insurance plans; 
274.14     (iv) establish standards, including but not limited to 
274.15  minimum terms of membership in self-insurance plans, as 
274.16  necessary to provide stability for those plans; 
274.17     (v) establish standards or guidelines governing the 
274.18  formation, operation, administration, and dissolution of 
274.19  self-insurance plans; and 
274.20     (vi) establish other reasonable requirements to further the 
274.21  purposes of this subdivision.  
274.22     Sec. 26.  Minnesota Statutes 2000, section 176.581, is 
274.23  amended to read: 
274.24     176.581 [PAYMENT TO STATE EMPLOYEES.] 
274.25     Upon a warrant prepared by the commissioner of the 
274.26  department of employee relations and approved by the 
274.27  commissioner of finance, and in accordance with the terms of the 
274.28  order awarding compensation, the state treasurer commissioner of 
274.29  finance shall pay compensation to the employee or the employee's 
274.30  dependent.  These payments shall be made from money appropriated 
274.31  for this purpose. 
274.32     Sec. 27.  Minnesota Statutes 2000, section 190.11, is 
274.33  amended to read: 
274.34     190.11 [CAMP GROUNDS AND MILITARY RESERVATIONS.] 
274.35     The adjutant general shall have charge of the camp grounds 
274.36  and military reservations of the state and shall be responsible 
275.1   for the protection and safety thereof, and promulgate rules for 
275.2   the maintenance of order thereon, for the enforcement of traffic 
275.3   rules and for all other lawful rules as may be ordered for the 
275.4   operation, care and preservation of existing facilities and 
275.5   installations on all state military reservations.  
275.6      The adjutant general shall keep in repair all state 
275.7   buildings, and other improvements thereon, including water pipes 
275.8   laid by the state on highways leading thereto and of all 
275.9   military property connected with the grounds and may make such 
275.10  further improvements thereon as the good of the service requires.
275.11     Private property may be acquired by condemnation, upon the 
275.12  application of the adjutant general, for camp ground, rifle 
275.13  range, and other military purposes.  All damages, cost, and 
275.14  expense incurred in condemning such property shall be paid by 
275.15  the state treasurer commissioner of finance, upon certificate of 
275.16  the adjutant general and warrant of the commissioner of finance, 
275.17  from any unexpended balance of the military fund after meeting 
275.18  the demands of the national guard.  
275.19     Sec. 28.  Minnesota Statutes 2000, section 241.08, 
275.20  subdivision 1, is amended to read: 
275.21     Subdivision 1.  The chief executive officer of each 
275.22  institution under the jurisdiction of the commissioner of 
275.23  corrections shall have the care and custody of all money 
275.24  belonging to inmates thereof which may come into the chief 
275.25  executive officer's hands, keep accurate accounts thereof, and 
275.26  pay them out under rules prescribed by law under section 243.23, 
275.27  subdivision 3, or by the commissioner of corrections, taking 
275.28  vouchers therefor.  All such money received by any officer or 
275.29  employee shall be paid to the chief executive officer 
275.30  forthwith.  Every such executive officer, at the close of each 
275.31  month, or oftener if required by the commissioner, shall forward 
275.32  to the commissioner a statement of the amount of all money so 
275.33  received and the names of the inmates from whom received, 
275.34  accompanied by a check for the amount, payable to the state 
275.35  treasurer commissioner of finance.  On receipt of such 
275.36  statement, the commissioner shall transmit the same to the 
276.1   commissioner of finance, together with such check, who shall 
276.2   deliver the same to the state treasurer.  Upon the payment of 
276.3   such check, the amount shall be credited to a fund to be known 
276.4   as "Correctional Inmates Fund," for the institution from which 
276.5   the same was received.  All such funds shall be paid out by 
276.6   the state treasurer commissioner of finance upon vouchers duly 
276.7   approved by the commissioner of corrections as in other cases.  
276.8   The commissioner may permit a contingent fund to remain in the 
276.9   hands of the executive officer of any such institution from 
276.10  which necessary expenditure may from time to time be made.  
276.11     Sec. 29.  Minnesota Statutes 2000, section 241.10, is 
276.12  amended to read: 
276.13     241.10 [DISPOSAL OF FUNDS; CORRECTIONAL INSTITUTIONS.] 
276.14     Every officer and employee of the several institutions 
276.15  under the jurisdiction of the commissioner of corrections shall 
276.16  pay to the accounting officer thereof any funds in the officer's 
276.17  or employee's hands belonging to the institution.  Every 
276.18  accounting officer, at the close of each month or oftener, shall 
276.19  forward to the commissioner of corrections a statement of the 
276.20  amount and sources of all money received.  On receipt of such 
276.21  statement, the commissioner shall transmit the same to the 
276.22  commissioner of finance, who shall deliver to the state 
276.23  treasurer a draft upon the accounting officer for the same, 
276.24  specifying the funds to which it is to be credited.  Upon 
276.25  payment of such draft, the amount shall be so credited. 
276.26     Sec. 30.  Minnesota Statutes 2000, section 241.13, 
276.27  subdivision 1, is amended to read: 
276.28     Subdivision 1.  [CONTINGENT ACCOUNT.] The commissioner of 
276.29  corrections may permit a contingent account to remain in the 
276.30  hands of the accounting officer of any such institution from 
276.31  which expenditures may be made in case of actual emergency 
276.32  requiring immediate payment to prevent loss or danger to the 
276.33  institution or its inmates and for the purpose of paying 
276.34  freight, purchasing produce, livestock and other commodities 
276.35  requiring a cash settlement, and for the purpose of discounting 
276.36  bills incurred, but in all cases subject to revision by the 
277.1   commissioner of corrections.  An itemized statement of every 
277.2   expenditure made during the month from such account shall be 
277.3   submitted to the commissioner under rules established by the 
277.4   commissioner.  If necessary, the commissioner shall make proper 
277.5   requisition upon the commissioner of finance for a warrant upon 
277.6   the state treasurer to secure the contingent account for each 
277.7   institution. 
277.8      Sec. 31.  Minnesota Statutes 2000, section 244.19, 
277.9   subdivision 7, is amended to read: 
277.10     Subd. 7.  [CERTIFICATE OF COUNTIES ENTITLED TO STATE AID.] 
277.11  On or before January 1 of each year, until 1970 and on or before 
277.12  April 1 thereafter, the commissioner of corrections shall 
277.13  deliver to the commissioner of finance a certificate in 
277.14  duplicate for each county of the state entitled to receive state 
277.15  aid under the provisions of this section.  Upon the receipt of 
277.16  such certificate, the commissioner of finance shall draw a 
277.17  warrant upon the state treasurer in favor of the county 
277.18  treasurer for the amount shown by each certificate to be due to 
277.19  the county specified.  The commissioner of finance shall 
277.20  transmit such warrant to the county treasurer together with a 
277.21  copy of the certificate prepared by the commissioner of 
277.22  corrections. 
277.23     Sec. 32.  Minnesota Statutes 2000, section 246.15, 
277.24  subdivision 1, is amended to read: 
277.25     Subdivision 1.  The chief executive officer of each 
277.26  institution under the jurisdiction of the commissioner of human 
277.27  services shall have the care and custody of all money belonging 
277.28  to inmates thereof which may come into the chief executive 
277.29  officer's hands, keep accurate accounts thereof, and pay them 
277.30  out under rules prescribed by law or by the commissioner of 
277.31  human services, taking vouchers therefor.  All such money 
277.32  received by any officer or employee shall be paid to the chief 
277.33  executive officer forthwith.  Every such executive officer, at 
277.34  the close of each month, or oftener if required by the 
277.35  commissioner, shall forward to the commissioner a statement of 
277.36  the amount of all money so received and the names of the inmates 
278.1   from whom received, accompanied by a check for the amount, 
278.2   payable to the state treasurer commissioner of finance.  On 
278.3   receipt of such statement, the commissioner shall transmit the 
278.4   same to the commissioner of finance, together with such check, 
278.5   who shall deliver the same to the state treasurer.  Upon the 
278.6   payment of such check, the amount shall be credited to a fund to 
278.7   be known as "Inmates Fund," for the institution from which the 
278.8   same was received.  All such funds shall be paid out by 
278.9   the state treasurer commissioner of finance upon vouchers duly 
278.10  approved by the commissioner of human services as in other 
278.11  cases.  The commissioner may permit a contingent fund to remain 
278.12  in the hands of the executive officer of any such institution 
278.13  from which necessary expenditure may from time to time be made.  
278.14     Sec. 33.  Minnesota Statutes 2000, section 246.18, 
278.15  subdivision 1, is amended to read: 
278.16     Subdivision 1.  [GENERALLY.] Except as provided in 
278.17  subdivisions 2 and 4, every officer and employee of the several 
278.18  institutions under the jurisdiction of the commissioner of human 
278.19  services who has money belonging to an institution shall pay the 
278.20  money to the accounting officer thereof.  Every accounting 
278.21  officer, at the close of each month or oftener, shall forward to 
278.22  the commissioner of human services a statement of the amount and 
278.23  sources of all money received.  On receipt of such statement, 
278.24  the commissioner shall transmit the same to the commissioner of 
278.25  finance, who shall deliver to the state treasurer a draft upon 
278.26  the accounting officer for the same specifying the funds to 
278.27  which it is to be credited.  Upon payment of such draft, the 
278.28  amount shall be so credited.  
278.29     Sec. 34.  Minnesota Statutes 2000, section 246.21, is 
278.30  amended to read: 
278.31     246.21 [CONTINGENT FUND.] 
278.32     The commissioner of human services may permit a contingent 
278.33  fund to remain in the hands of the accounting officer of any 
278.34  such institution from which expenditures may be made in case of 
278.35  actual emergency requiring immediate payment to prevent loss or 
278.36  danger to the institution or its inmates and for the purpose of 
279.1   paying freight, purchasing produce, livestock and other 
279.2   commodities requiring a cash settlement, and for the purpose of 
279.3   discounting bills incurred, but in all cases subject to revision 
279.4   by the commissioner of human services.  An itemized statement of 
279.5   every expenditure made during the month from such fund shall be 
279.6   submitted to the commissioner under rules established by the 
279.7   commissioner.  If necessary, the commissioner shall make proper 
279.8   requisition upon the commissioner of finance for a warrant upon 
279.9   the state treasurer to secure the contingent fund for each 
279.10  institution.  
279.11     Sec. 35.  Minnesota Statutes 2001 Supplement, section 
279.12  276.11, subdivision 1, is amended to read: 
279.13     Subdivision 1.  [GENERALLY.] As soon as practical after the 
279.14  settlement day determined in section 276.09, the county 
279.15  treasurer shall pay to the state treasurer commissioner of 
279.16  finance or the treasurer of a town, city, school district, or 
279.17  special district, on the warrant of the county auditor, all 
279.18  receipts of taxes levied by the taxing district and deliver up 
279.19  all orders and other evidences of indebtedness of the taxing 
279.20  district, taking triplicate receipts for them.  The treasurer or 
279.21  commissioner of finance shall file one of the receipts with the 
279.22  county auditor, and shall return one by mail on the day of its 
279.23  receipt to the clerk of the town, city, school district, or 
279.24  special district to which payment was made.  The clerk shall 
279.25  keep the receipt in the clerk's office.  Upon written request of 
279.26  the taxing district, to the extent practicable, the county 
279.27  treasurer shall make partial payments of amounts collected 
279.28  periodically in advance of the next settlement and 
279.29  distribution.  A statement prepared by the county treasurer must 
279.30  accompany each payment.  It must state the years for which taxes 
279.31  included in the payment were collected and, for each year, the 
279.32  amount of the taxes and any penalties on the tax.  Upon written 
279.33  request of a taxing district, except school districts, the 
279.34  county treasurer shall pay at least 70 percent of the estimated 
279.35  collection within 30 days after the settlement date determined 
279.36  in section 276.09.  Within seven business days after the due 
280.1   date, or 28 calendar days after the postmark date on the 
280.2   envelopes containing real or personal property tax statements, 
280.3   whichever is latest, the county treasurer shall pay to the 
280.4   treasurer of the school districts 50 percent of the estimated 
280.5   collections arising from taxes levied by and belonging to the 
280.6   school district, unless the school district elects to receive 50 
280.7   percent of the estimated collections arising from taxes levied 
280.8   by and belonging to the school district after making a 
280.9   proportionate reduction to reflect any loss in collections as 
280.10  the result of any delay in mailing tax statements.  In that 
280.11  case, 50 percent of those adjusted, estimated collections shall 
280.12  be paid by the county treasurer to the treasurer of the school 
280.13  district within seven business days of the due date.  The 
280.14  remaining 50 percent of the estimated collections must be paid 
280.15  to the treasurer of the school district within the next seven 
280.16  business days of the later of the dates in the preceding 
280.17  sentence, unless the school district elects to receive the 
280.18  remainder of its estimated collections after a proportionate 
280.19  reduction has been made to reflect any loss in collections as 
280.20  the result of any delay in mailing tax statements.  In that 
280.21  case, the remaining 50 percent of those adjusted, estimated 
280.22  collections shall be paid by the county treasurer to the 
280.23  treasurer of the school district within 14 days of the due 
280.24  date.  The treasurer shall pay the balance of the amounts 
280.25  collected to the state before June 30, or to a municipal 
280.26  corporation or other body within 60 days after the settlement 
280.27  date determined in section 276.09.  After 45 days interest at an 
280.28  annual rate of eight percent accrues and must be paid to the 
280.29  taxing district.  Interest must be paid upon appropriation from 
280.30  the general revenue fund of the county.  If not paid, it may be 
280.31  recovered by the taxing district, in a civil action. 
280.32     Sec. 36.  Minnesota Statutes 2000, section 280.29, is 
280.33  amended to read: 
280.34     280.29 [PROCEEDS OF SALE, HOW DISTRIBUTED.] 
280.35     The proceeds of any parcel of land so sold, to the amount 
280.36  of taxes, penalties, interest, and costs charged thereon, shall 
281.1   be distributed as provided by law for the distribution of the 
281.2   like sums upon sales for delinquent taxes.  The portion thereof 
281.3   due to the state shall be paid to the state treasurer upon the 
281.4   draft of the commissioner of finance, and the excess, if any, 
281.5   above the taxes, penalties, interest, and costs charged upon the 
281.6   land, shall be included in such draft and be paid in like manner 
281.7   for the benefit of the state.  If any parcel be sold for less 
281.8   than the amount charged thereon, the state taxes shall first be 
281.9   paid and the remainder, if any, distributed pro rata to the 
281.10  several funds for which the taxes were levied.  
281.11     Sec. 37.  Minnesota Statutes 2000, section 293.06, is 
281.12  amended to read: 
281.13     293.06 [CONSIDERATION AND DETERMINATION OF REPORT.] 
281.14     Upon the receipt of the report provided for in section 
281.15  293.03, the commissioner shall determine, from information 
281.16  possessed or obtained, whether the same is correct or otherwise. 
281.17  If found correct, the commissioner shall determine therefrom the 
281.18  amount of tax due from such income or annuity recipient, and 
281.19  shall record the amount thereof and shall make a certificate of 
281.20  taxes due thereon from such person; and, on or before the first 
281.21  day of May, of each year, file the same with the commissioner of 
281.22  finance and a duplicate thereof with the state treasurer; and 
281.23  the commissioner of revenue shall have power, in case the report 
281.24  is deemed incorrect, to make findings as to the amount of such 
281.25  taxes due after hearing upon notice to the person interested, 
281.26  and the findings shall have the same effect as the determination 
281.27  of the amount of such taxes upon a report made as hereinbefore 
281.28  provided. 
281.29     Sec. 38.  Minnesota Statutes 2001 Supplement, section 
281.30  299D.03, subdivision 5, is amended to read: 
281.31     Subd. 5.  [FINES AND FORFEITED BAIL MONEY.] (a) All fines 
281.32  and forfeited bail money, from traffic and motor vehicle law 
281.33  violations, collected from persons apprehended or arrested by 
281.34  officers of the state patrol, shall be paid by the person or 
281.35  officer collecting the fines, forfeited bail money or 
281.36  installments thereof, on or before the tenth day after the last 
282.1   day of the month in which these moneys were collected, to the 
282.2   county treasurer of the county where the violation occurred.  
282.3   Three-eighths of these receipts shall be credited to the general 
282.4   revenue fund of the county, except that in a county in a 
282.5   judicial district under section 480.181, subdivision 1, 
282.6   paragraph (b), this three-eighths share must be transmitted to 
282.7   the state treasurer commissioner of finance for deposit in the 
282.8   state treasury and credited to the general fund.  The other 
282.9   five-eighths of these receipts shall be transmitted by that 
282.10  officer to the state treasurer commissioner of finance and must 
282.11  be credited to the trunk highway fund.  If, however, the 
282.12  violation occurs within a municipality and the city attorney 
282.13  prosecutes the offense, and a plea of not guilty is entered, 
282.14  one-third of the receipts shall be credited to the general 
282.15  revenue fund of the county, one-third of the receipts shall be 
282.16  paid to the municipality prosecuting the offense, and one-third 
282.17  shall be transmitted to the state treasurer commissioner of 
282.18  finance as provided in this subdivision.  All costs of 
282.19  participation in a nationwide police communication system 
282.20  chargeable to the state of Minnesota shall be paid from 
282.21  appropriations for that purpose. 
282.22     (b) Notwithstanding any other provisions of law, all fines 
282.23  and forfeited bail money from violations of statutes governing 
282.24  the maximum weight of motor vehicles, collected from persons 
282.25  apprehended or arrested by employees of the state of Minnesota, 
282.26  by means of stationary or portable scales operated by these 
282.27  employees, shall be paid by the person or officer collecting the 
282.28  fines or forfeited bail money, on or before the tenth day after 
282.29  the last day of the month in which the collections were made, to 
282.30  the county treasurer of the county where the violation 
282.31  occurred.  Five-eighths of these receipts shall be transmitted 
282.32  by that officer to the state treasurer commissioner of finance 
282.33  and shall be credited to the highway user tax distribution 
282.34  fund.  Three-eighths of these receipts shall be credited to the 
282.35  general revenue fund of the county, except that in a county in a 
282.36  judicial district under section 480.181, subdivision 1, 
283.1   paragraph (b), this three-eighths share must be transmitted to 
283.2   the state treasurer commissioner of finance for deposit in the 
283.3   state treasury and credited to the general fund. 
283.4      Sec. 39.  Minnesota Statutes 2000, section 352.05, is 
283.5   amended to read: 
283.6      352.05 [STATE TREASURER COMMISSIONER OF FINANCE TO BE 
283.7   TREASURER OF SYSTEM.] 
283.8      The state treasurer commissioner of finance is ex officio 
283.9   treasurer of the retirement funds of the system.  The general 
283.10  bond to the state shall cover all liability for actions as 
283.11  treasurer of these funds.  Funds of the system received by 
283.12  the treasurer commissioner of finance must be set aside in the 
283.13  state treasury to the credit of the proper fund.  The treasurer 
283.14  commissioner of finance shall deliver to the director copies of 
283.15  all payroll abstracts of the state together with the 
283.16  commissioner of finance's warrants covering the deductions made 
283.17  on these payroll abstracts for the retirement fund.  The 
283.18  director shall have a list made of the commissioner of finance's 
283.19  warrants.  These warrants must then be deposited with the state 
283.20  treasurer to be credited to the retirement fund.  The treasurer 
283.21  commissioner of finance shall pay out of this fund only on 
283.22  warrants issued by the commissioner of finance, upon abstracts 
283.23  signed by the director, or by the finance officer designated by 
283.24  the director during the disability or the absence of the 
283.25  director from the city of St. Paul, Minnesota.  Abstracts for 
283.26  investments may be signed by the executive director of the state 
283.27  board of investment.  
283.28     Sec. 40.  Minnesota Statutes 2000, section 352B.03, 
283.29  subdivision 2, is amended to read: 
283.30     Subd. 2.  [DUTIES OF TREASURER COMMISSIONER OF FINANCE.] 
283.31  The state treasurer commissioner of finance is ex officio 
283.32  treasurer of the state patrol retirement fund.  The treasurer's 
283.33  commissioner of finance's general bond to the state covers all 
283.34  liability for actions as treasurer of the fund. 
283.35     All money of the fund received by the treasurer 
283.36  commissioner of finance under this chapter must be set aside in 
284.1   the state treasury and credited to the state patrol retirement 
284.2   fund.  The treasurer commissioner of finance shall transmit, 
284.3   monthly, to the director, a detailed statement showing all 
284.4   credits to and disbursements from the fund.  The treasurer 
284.5   commissioner of finance shall disburse money from the fund 
284.6   only on warrants issued by the commissioner of finance upon 
284.7   vouchers signed by the director.  
284.8      Sec. 41.  Minnesota Statutes 2000, section 354.06, 
284.9   subdivision 3, is amended to read: 
284.10     Subd. 3.  [TREASURER COMMISSIONER OF FINANCE.] The state 
284.11  treasurer commissioner of finance shall be ex officio treasurer 
284.12  of the association and the treasurer's commissioner's general 
284.13  bond to the state shall cover any liabilities for acts as 
284.14  treasurer of the association.  The state treasurer commissioner 
284.15  shall receive all moneys payable to the association and pay out 
284.16  the same only on warrants issued by the commissioner of finance 
284.17  upon forms signed by the executive director. 
284.18     Sec. 42.  Minnesota Statutes 2000, section 354.52, 
284.19  subdivision 5, is amended to read: 
284.20     Subd. 5.  The state treasurer commissioner of finance, the 
284.21  several county treasurers, and the treasurers of the various 
284.22  school districts and institutions to which the provisions of 
284.23  this chapter apply shall be officially liable for the receipt, 
284.24  handling, and disbursement of all moneys coming into their hands 
284.25  belonging to the fund and the sureties on the official bonds of 
284.26  each of these treasurers and the commissioner of finance shall 
284.27  be liable for such moneys the same as for all other moneys 
284.28  belonging to the school funds of this state.  
284.29     Sec. 43.  Minnesota Statutes 2000, section 385.05, is 
284.30  amended to read: 
284.31     385.05 [RECEIPT AND PAYMENT OF MONEY.] 
284.32     The county treasurer shall receive all moneys directed by 
284.33  law to be paid to the treasurer and pay them out only on the 
284.34  order of the proper authority.  All moneys belonging to the 
284.35  county shall be paid out upon the order of the county board, 
284.36  signed by the chair thereof, and attested by the county auditor, 
285.1   or upon the warrant of the county auditor upon the presentation 
285.2   to the auditor of the proper certificate of the person or 
285.3   tribunal allowing the same, and not otherwise.  All moneys due 
285.4   the state, arising from the collection of taxes or from other 
285.5   sources, shall be paid upon the draft of the commissioner of 
285.6   finance, drawn in favor of the state treasurer, and a duplicate 
285.7   copy of the receipt for payment of such draft shall be forwarded 
285.8   by the state treasurer commissioner of finance to the county 
285.9   auditor, who shall preserve the same, and credit the county 
285.10  treasurer with the amount thereof.  The county auditor shall 
285.11  issue a warrant in favor of the state for the amount of such 
285.12  draft and the county treasurer shall pay the warrant forthwith 
285.13  without endorsement thereof by the state treasurer commissioner 
285.14  of finance or other state official, and without expense to the 
285.15  state for collection charges.  
285.16     Sec. 44.  Minnesota Statutes 2000, section 475A.04, is 
285.17  amended to read: 
285.18     475A.04 [DEBT SERVICE DEFICIENCY LOANS.] 
285.19     Subdivision 1.  [PROCEDURE.] In the event that funds 
285.20  sufficient to pay all of the principal and interest due on any 
285.21  guaranteed bond are not in the hands of the municipal treasurer 
285.22  or the paying agent at least 15 days before the due date, the 
285.23  treasurer or agent shall report the amount of the deficiency to 
285.24  the paying agent and the auditor who shall grant a loan to the 
285.25  issuer in this amount and shall certify to the issuer, the 
285.26  paying agent, and the auditor and treasurer of each county in 
285.27  which property subject to taxation by the issuer is situated, 
285.28  the amount of the loan and interest to accrue thereon to the due 
285.29  date of the loan, and the commissioner of finance shall issue a 
285.30  warrant for the principal amount and the state treasurer shall 
285.31  remit it to the paying agent on or before the due date.  If the 
285.32  municipal treasurer fails to deposit funds with the paying agent 
285.33  sufficient to pay all principal and interest due on any 
285.34  guaranteed bond on any date, without having previously given the 
285.35  notice herein required, the paying agent may report the amount 
285.36  of the deficiency to the commissioner of finance, who shall 
286.1   forthwith grant a loan to the issuer for this amount plus 
286.2   interest to accrue thereon for one month at the rate represented 
286.3   by the coupons then due, and the loan shall be certified and 
286.4   remitted as provided above.  The paying agent may advance its 
286.5   own funds for the payment of any guaranteed bonds and interest 
286.6   due for which it has not received sufficient funds from the 
286.7   municipality, and may contract with the municipality to make 
286.8   such advances, and shall be entitled to reimbursement therefor 
286.9   from the proceeds of the loan, with interest at the rate 
286.10  represented by the coupons due.  The issuing municipality shall 
286.11  give a receipt to the commissioner of finance for the amount of 
286.12  the loan and interest.  
286.13     Subd. 2.  [DUE DATE; INTEREST; PREPAYMENT.] Each loan shall 
286.14  become due on December 31 in the year following the year when a 
286.15  tax is levied for its payment as provided in subdivision 3, and 
286.16  shall bear interest from the date of its disbursement until 
286.17  paid, at a rate determined by the commissioner of finance, not 
286.18  less than the average annual rate payable on state municipal aid 
286.19  bonds most recently issued before such disbursement, and in no 
286.20  event less than 3-1/2 percent per annum.  Any loan may be 
286.21  prepaid at any time with interest to the date of prepayment, by 
286.22  remittance to the commissioner of finance, who shall deposit the 
286.23  prepayment with the state treasurer to the credit of the 
286.24  municipal bond guarantee fund and shall issue a receipt to the 
286.25  municipality with a copy to the treasurer of each county in 
286.26  which taxable property within the municipality is situated.  
286.27  Interest on loans not prepaid shall be due at the same time as 
286.28  principal.  
286.29     Subd. 3.  [LEVY.] Before October 1 in each year the state 
286.30  auditor shall certify to the county auditor and treasurer of 
286.31  each county containing taxable property situated within any 
286.32  municipality having an outstanding loan, and to the 
286.33  municipality, the amount, if any, necessary to be levied to 
286.34  produce the total amount of principal and interest to become due 
286.35  in the next ensuing year on such loan plus the amount of any 
286.36  guaranty fee unpaid.  After receipt of the certification each 
287.1   county auditor, upon ascertaining the current year's net tax 
287.2   capacity of all taxable property within the municipality which 
287.3   is situated within that county, and upon ascertaining from the 
287.4   county auditors of other counties the net tax capacity of any 
287.5   such property situated within their counties, shall extend upon 
287.6   the tax rolls an ad valorem tax upon all such property within 
287.7   that county, in an amount equal to that proportion of the total 
287.8   amount certified by the secretary which the net tax capacity of 
287.9   such property bears to the net tax capacity of all taxable 
287.10  property within the municipality.  
287.11     Subd. 4.  [FIRST LIEN.] Each loan shall be a first lien and 
287.12  charge on all collections of taxes levied on property by the 
287.13  municipality to which the loan is granted, which are due and 
287.14  payable on and after October 31 in the year in which the loan is 
287.15  due.  Unless a receipt for the prepayment thereof has 
287.16  theretofore been filed with the treasurer of each county in 
287.17  which property taxable by the municipality to which the loan was 
287.18  granted is situated, each such treasurer shall deduct from the 
287.19  first such taxes to be distributed to the municipality the full 
287.20  amount of the tax extended pursuant to subdivision 3, and shall 
287.21  remit the same to the commissioner of finance, who shall deposit 
287.22  the remittance with the state treasurer to the credit of the 
287.23  municipal bond guaranty fund and shall issue a receipt to the 
287.24  municipality with a copy to the county treasurer. 
287.25     Sec. 45.  Minnesota Statutes 2000, section 475A.06, 
287.26  subdivision 2, is amended to read: 
287.27     Subd. 2.  [FORMALITIES.] The bonds shall be issued and sold 
287.28  upon sealed bids and upon such notice, at such price, at such 
287.29  times, in such form and denominations, bearing interest at such 
287.30  rate or rates, maturing in such amounts and on such dates, 
287.31  either without option of prepayment or subject to prepayment 
287.32  upon such notice and at such times and prices, payable at such 
287.33  bank or banks within or outside the state, with such provisions 
287.34  for registration, conversion, and exchange and for the issuance 
287.35  of notes in anticipation of the sale or delivery of definitive 
287.36  bonds, and in accordance with such further rules, as the 
288.1   commissioner of finance shall determine, subject to the approval 
288.2   of the attorney general, but not subject to chapter 14, 
288.3   including section 14.386.  The bonds shall be executed by the 
288.4   commissioner of finance and attested by the state treasurer 
288.5   under their official seals seal.  The signatures signature of 
288.6   the officers commissioner on the bonds and any appurtenant 
288.7   interest coupons and their seals the seal may be printed, 
288.8   lithographed, engraved, or stamped thereon, except that each 
288.9   bond shall be authenticated by the manual signature on its face 
288.10  of one of the officers the commissioner or of an officer of a 
288.11  bank designated by them as authenticating agent.  The 
288.12  commissioner of finance shall ascertain and certify to the 
288.13  purchasers of the bonds the performance and existence of all 
288.14  acts, conditions, and things necessary to make them valid and 
288.15  binding general obligations of the state of Minnesota, subject 
288.16  to the approval of the attorney general.  
288.17     Sec. 46.  Minnesota Statutes 2000, section 481.01, is 
288.18  amended to read: 
288.19     481.01 [BOARD OF LAW EXAMINERS; EXAMINATIONS; ALTERNATIVE 
288.20  DISPUTE FEES.] 
288.21     The supreme court shall, by rule from time to time, 
288.22  prescribe the qualifications of all applicants for admission to 
288.23  practice law in this state, and shall appoint a board of law 
288.24  examiners, which shall be charged with the administration of the 
288.25  rules and with the examination of all applicants for admission 
288.26  to practice law.  The board shall consist of not less than 
288.27  three, nor more than seven, attorneys at law, who shall be 
288.28  appointed each for the term of three years and until a successor 
288.29  qualifies.  The supreme court may fill any vacancy in the board 
288.30  for the unexpired term and in its discretion may remove any 
288.31  member of it.  The board shall have a seal and shall keep a 
288.32  record of its proceedings, of all applications for admission to 
288.33  practice, and of persons admitted to practice upon its 
288.34  recommendation.  At least two times a year the board shall hold 
288.35  examinations and report the result of them, with its 
288.36  recommendations, to the supreme court.  Upon consideration of 
289.1   the report, the supreme court shall enter an order in the case 
289.2   of each person examined, directing the board to reject or to 
289.3   issue to the person a certificate of admission to practice.  The 
289.4   board shall have such officers as may, from time to time, be 
289.5   prescribed and designated by the supreme court.  The fee for 
289.6   examination shall be fixed, from time to time, by the supreme 
289.7   court.  This fee, and any other fees which may be received 
289.8   pursuant to any rules the supreme court adopts governing the 
289.9   practice of law and court-related alternative dispute resolution 
289.10  practices shall be paid to the state treasurer commissioner of 
289.11  finance and shall constitute a special fund in the state 
289.12  treasury which shall be exempt from section 16A.127.  The money 
289.13  in this fund is appropriated annually to the supreme court for 
289.14  the payment of compensation and expenses of the members of the 
289.15  board of law examiners and for otherwise regulating the practice 
289.16  of law.  The money in the fund shall never cancel.  Payments 
289.17  from it shall be made by the state treasurer, upon warrants of 
289.18  the commissioner of finance issued commissioner of finance upon 
289.19  vouchers signed by one of the justices of the supreme court.  
289.20  The members of the board shall have compensation and allowances 
289.21  for expenses as may, from time to time, be fixed by the supreme 
289.22  court. 
289.23     Sec. 47.  Minnesota Statutes 2000, section 490.123, 
289.24  subdivision 2, is amended to read: 
289.25     Subd. 2.  [TREASURER COMMISSIONER OF FINANCE.] The state 
289.26  treasurer commissioner of finance shall be ex officio treasurer 
289.27  of the judges' retirement fund and the treasurer's 
289.28  commissioner's general bond to the state shall be so conditioned 
289.29  as to cover all liability for acting as treasurer of this fund.  
289.30  All moneys received by the treasurer commissioner pursuant to 
289.31  this section shall be set aside in the state treasury to the 
289.32  credit of the judges' retirement fund.  The treasurer 
289.33  commissioner shall transmit monthly to the executive director 
289.34  described in section 352.03, subdivision 5, a detailed statement 
289.35  of all amounts so received and credited to the fund.  
289.36  The treasurer commissioner shall pay out the fund only on 
290.1   warrants issued by the commissioner of finance, upon vouchers 
290.2   signed by said executive director; provided that vouchers for 
290.3   investment may be signed by the secretary of the state board of 
290.4   investment. 
290.5      Sec. 48.  Minnesota Statutes 2000, section 525.161, is 
290.6   amended to read: 
290.7      525.161 [NO SURVIVING SPOUSE OR KINDRED, NOTICES TO 
290.8   ATTORNEY GENERAL.] 
290.9      When it appears from the petition or application for 
290.10  administration of the estate, or otherwise, in a proceeding in 
290.11  the court that the intestate left surviving no spouse or 
290.12  kindred, the court shall give notice of such fact and notice of 
290.13  all subsequent proceedings in such estate to the attorney 
290.14  general forthwith; and the attorney general shall protect the 
290.15  interests of the state during the course of administration.  The 
290.16  residue which escheats to the state shall be transmitted to the 
290.17  attorney general.  All moneys, stocks, bonds, notes, mortgages 
290.18  and other securities, and all other personal property so 
290.19  escheated shall then be given into the custody of the state 
290.20  treasurer, who shall notify the commissioner of finance thereof 
290.21  and who shall immediately credit the moneys received to the 
290.22  general fund.  The treasurer commissioner of finance shall hold 
290.23  such stocks, bonds, notes, mortgages and other securities, and 
290.24  all other personal property, subject to such investment, sale or 
290.25  other disposition as the state board of investment may direct 
290.26  pursuant to section 11A.04, clause (9).  The attorney general 
290.27  shall immediately report to the state executive council all real 
290.28  property received in the individual escheat, and any sale or 
290.29  disposition of such real estate shall be made in accordance with 
290.30  sections 94.09 to 94.16.  
290.31     Sec. 49.  Minnesota Statutes 2000, section 525.841, is 
290.32  amended to read: 
290.33     525.841 [ESCHEAT RETURNED.] 
290.34     In all such cases the commissioner of finance shall be 
290.35  furnished with a certified copy of the court's order assigning 
290.36  the escheated property to the persons entitled thereto, and upon 
291.1   notification of payment of the estate tax, the commissioner of 
291.2   finance shall draw a warrant on the state treasurer, or execute 
291.3   a proper conveyance to the persons designated in such order.  In 
291.4   the event any escheated property has been sold pursuant to 
291.5   sections 11A.04, clause (9), and 11A.10, subdivision 2, or 94.09 
291.6   to 94.16, then the warrant shall be for the appraised value as 
291.7   established during the administration of the decedent's estate.  
291.8   There is hereby annually appropriated from any moneys in the 
291.9   state treasury not otherwise appropriated an amount sufficient 
291.10  to make payment to all such designated persons.  No interest 
291.11  shall be allowed on any amount paid to such persons.  
291.12     Sec. 50.  [INSTRUCTION TO REVISOR.] 
291.13     (a) The revisor shall delete "treasurer," "state 
291.14  treasurer," and "treasurer-elect," as appropriate, and make 
291.15  necessary grammatical changes in the following sections of 
291.16  Minnesota Statutes:  3C.12, subdivision 2; 4.06; 8.02, 
291.17  subdivision 2; 8.05; 10.01; 15.16, subdivision 3; 16A.125, 
291.18  subdivision 5; 16B.05, subdivision 2; 43A.08, subdivisions 1 and 
291.19  1a; 43A.18, subdivision 4; 89.43; 116.16, subdivision 3; 116.17, 
291.20  subdivision 5; 117.135, subdivision 2; 126C.55, subdivision 3; 
291.21  161.06, subdivision 1; 167.51, subdivision 2; 174.51, 
291.22  subdivision 5; 204B.11, subdivision 1; 204D.10, subdivision 2; 
291.23  209.01, subdivision 2; 241.27, subdivision 4; 270.74; 272.68, 
291.24  subdivision 1; 352.01, subdivision 3; 352B.01, subdivision 4; 
291.25  352C.021, subdivision 2; 352D.02, subdivision 1; 355.621, 
291.26  subdivision 4; and 475A.06, subdivision 5. 
291.27     (b) The revisor shall delete "state treasurer," "state 
291.28  treasurer's," "treasurer," and "treasurer's" where it refers to 
291.29  the state treasurer, and substitute "commissioner of finance" 
291.30  and "commissioner of finance's" respectively in the following 
291.31  sections of Minnesota Statutes:  6.60; 7.06; 7.09; 7.10; 7.12, 
291.32  subdivision 1; 7.19; 7.193; 7.20; 7.22; 7.24; 7.25; 7.27; 9.031; 
291.33  11A.04; 11A.07, subdivision 4; 11A.10, subdivisions 1 and 4; 
291.34  11A.15, subdivisions 3 and 5; 12.24, subdivision 2; 15.73, 
291.35  subdivision 3; 16A.011, subdivision 15; 16A.126, subdivision 3; 
291.36  16A.127, subdivision 7; 16A.13, subdivisions 1 and 2a; 16A.131, 
292.1   subdivision 1; 16A.27, subdivisions 1 and 2; 16A.45, subdivision 
292.2   1; 16A.672, subdivision 11; 31.15; 41B.17, subdivision 3; 
292.3   46.041, subdivision 1; 46.34; 48A.03, subdivisions 2, 4, and 5; 
292.4   49.24, subdivision 7; 51A.51, subdivisions 1, 2, and 3a; 52.06, 
292.5   subdivision 1; 52.20, subdivision 5; 53.03, subdivisions 1 and 
292.6   6; 56.02; 60B.47; 60K.03, subdivisions 1, 5, and 6; 60K.13, 
292.7   subdivision 3; 79.34, subdivision 1; 79A.04, subdivisions 5, 6, 
292.8   7, and 10; 79A.071; 79A.15; 79A.24, subdivision 4; 79A.25, 
292.9   subdivision 3; 82.24, subdivision 8; 82.34, subdivisions 1 and 
292.10  5; 84.153; 84.415, subdivision 5; 84A.04, subdivisions 3 and 4; 
292.11  84A.23, subdivision 3; 84A.33, subdivision 4; 85A.05, 
292.12  subdivision 4; 90.173; 92.21, subdivision 1; 92.23; 92.24; 
292.13  93.17; 93.20, subdivisions 7, 19, and 31; 94.346, subdivision 2; 
292.14  97A.055, subdivision 2; 97A.065, subdivision 2; 103I.521; 
292.15  115.77, subdivision 2; 115A.54, subdivision 3; 115A.58, 
292.16  subdivision 4; 116.16, subdivision 8; 116.17, subdivision 4; 
292.17  116J.64, subdivisions 6, 7, and 10; 116R.11, subdivision 2; 
292.18  126C.68, subdivision 3; 126C.69, subdivision 14; 127A.09, 
292.19  subdivision 3; 141.25, subdivision 5; 141.26, subdivision 3; 
292.20  144.09; 144.10; 144.226, subdivision 4; 144.7022, subdivision 4; 
292.21  149A.06, subdivision 4; 149A.20, subdivision 8; 149A.30, 
292.22  subdivision 2; 149A.40, subdivision 8; 149A.50, subdivision 6; 
292.23  149A.51, subdivision 7; 149A.97, subdivision 7; 161.04, 
292.24  subdivision 2; 161.05, subdivisions 1, 2, 4, and 5; 161.081, 
292.25  subdivision 2; 161.36, subdivision 5; 161.41, subdivision 3; 
292.26  162.16; 163.051, subdivision 2; 168.33, subdivision 2; 168.67; 
292.27  168C.11, subdivision 1; 169.781, subdivision 7; 174.50, 
292.28  subdivision 3; 174.51, subdivision 4; 176.129, subdivisions 1, 
292.29  7, and 8; 176.181, subdivision 5; 176.421, subdivision 4; 
292.30  176.591, subdivisions 2 and 3; 193.23, subdivision 1; 214.13, 
292.31  subdivision 1; 222.025; 223.17, subdivision 4; 231.17; 237.11; 
292.32  240.10; 240.15, subdivision 6; 240.22; 241.09; 243.48, 
292.33  subdivision 1; 245.4932, subdivision 4; 246.16; 246.18, 
292.34  subdivision 2a; 246.41, subdivision 2; 246.51, subdivision 1; 
292.35  248.07, subdivisions 8 and 12; 256.89; 256.90; 256.92; 256B.041, 
292.36  subdivision 5; 256B.0625, subdivision 20; 256B.0945, subdivision 
293.1   3; 256F.10, subdivision 10; 257.69, subdivision 2; 260B.331, 
293.2   subdivision 6; 260C.331, subdivision 6; 270.45; 271.12; 273.02, 
293.3   subdivision 6; 282.19; 282.226; 282.33, subdivision 1; 284.28, 
293.4   subdivisions 8 and 9; 290.431; 290.432; 293.08; 293.09; 293.11; 
293.5   296A.03, subdivision 5; 297E.02, subdivision 3; 298.39; 298.396; 
293.6   299F.17, subdivision 1; 299F.60, subdivision 4; 300.19; 
293.7   302A.771; 303.07, subdivision 1; 303.16, subdivision 2; 303.19, 
293.8   subdivision 2; 303.25, subdivision 3; 317A.771; 322B.86; 
293.9   325A.06, subdivision 3; 325G.415; 332.15, subdivision 4; 332.30; 
293.10  332.55; 340A.409, subdivision 1; 340A.904, subdivision 2; 
293.11  341.10; 352.04, subdivision 4; 352B.02, subdivisions 1b and 1d; 
293.12  353.05; 353B.06, subdivision 1; 354.07, subdivision 4; 357.021, 
293.13  subdivisions 1a, 2, 6, and 7; 357.022; 357.08; 360.017, 
293.14  subdivision 2; 385.20; 446A.085, subdivision 3; 446A.16, 
293.15  subdivisions 1 and 2; 458A.03, subdivision 3; 462A.17, 
293.16  subdivision 3; 462A.18; 469.177, subdivision 11; 475A.06, 
293.17  subdivision 4; 480.058, subdivision 2; 480.175, subdivision 2; 
293.18  485.018, subdivision 5; 487.31, subdivision 1; 487.32, 
293.19  subdivision 3; 487.33, subdivision 5; 490.102, subdivision 6; 
293.20  508.75; 508.77; 508.82, subdivision 1; 508A.22, subdivision 3; 
293.21  508A.77; 508A.82, subdivision 1; 517.08, subdivision 1c; 
293.22  518.165, subdivision 3; 525.033; 563.01, subdivisions 9 and 10; 
293.23  574.261, subdivisions 1, 2, and 3; 574.264, subdivision 1; 
293.24  609.101, subdivisions 3 and 4; 611.20, subdivisions 2 and 3; and 
293.25  626.85, subdivisions 2 and 3.  
293.26     (c) The revisor shall recodify Minnesota Statutes, chapter 
293.27  7, in Minnesota Statutes, chapter 16A. 
293.28     (d) The revisor shall delete "state treasurer" where it 
293.29  means the state treasurer of Minnesota and substitute 
293.30  "commissioner of finance" in Minnesota Rules. 
293.31     Sec. 51.  [REPEALER.] 
293.32     Minnesota Statutes 2000, section 7.21, is repealed. 
293.33     Sec. 52.  [EFFECTIVE DATE.] 
293.34     This article is effective January 6, 2003. 
293.35                             ARTICLE 20
293.36              DEPARTMENT OF REVENUE POLICY PROVISIONS
294.1      Section 1.  Minnesota Statutes 2000, section 270.063, 
294.2   subdivision 4, is amended to read: 
294.3      Subd. 4.  [FEDERAL TAX REFUND OFFSET FEES; TIME LIMIT FOR 
294.4   SUBMITTING CLAIMS FOR OFFSET.] For fees charged by the 
294.5   department of the treasury of the United States for the offset 
294.6   of federal tax refunds that are deducted from the refund amounts 
294.7   remitted to the commissioner, the unpaid debts of the taxpayers 
294.8   whose refunds are being offset to satisfy the debts are reduced 
294.9   only by the actual amount of the refund payments received by the 
294.10  commissioner.  Notwithstanding any other provision of law to the 
294.11  contrary, a claim for the offset of a federal tax refund must be 
294.12  submitted to the department of the treasury of the United States 
294.13  within ten years after the date of the assessment of the tax 
294.14  owed by the taxpayer whose refund is to be offset to satisfy the 
294.15  debt. 
294.16     <h>[EFFECTIVE DATE.]</h> This section is effective for claims for 
294.17  offset that were submitted before and are pending on the date of 
294.18  final enactment, and for claims submitted on or after the day 
294.19  following final enactment. 
294.20     Sec. 2.  Minnesota Statutes 2001 Supplement, section 
294.21  270.691, subdivision 8, is amended to read: 
294.22     Subd. 8.  [EXPIRATION DATE.] The program authorized under 
294.23  this section terminates on June 30, 2002 2003. 
294.24     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
294.25  following final enactment. 
294.26     Sec. 3.  Minnesota Statutes 2000, section 273.125, 
294.27  subdivision 4, is amended to read: 
294.28     Subd. 4.  [PETITIONS OF GRIEVANCE.] A person who claims 
294.29  that the person's manufactured home has been unfairly or 
294.30  unequally assessed, or that the property has been assessed at a 
294.31  valuation greater than its real or actual value, or that the tax 
294.32  levied against it is illegal, in whole or in part, or has been 
294.33  paid, or that the property is exempt from the tax so levied, may 
294.34  have the validity of the claim, defense, or objection determined 
294.35  in court.  The determination must be made by the district court 
294.36  of the county in which the tax is levied or by the tax court.  A 
295.1   person can request the determination by filing a petition for it 
295.2   in the office of the court administrator of the district court 
295.3   on or before the later of September 1 of the year in which the 
295.4   tax becomes payable or 30 days after the postmark on the 
295.5   envelope containing the property tax statement for the 
295.6   property.  A petition for determination under this section may 
295.7   be transferred by the district court to the tax court. 
295.8      <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
295.9   payable in 2003 and thereafter. 
295.10     Sec. 4.  Minnesota Statutes 2001 Supplement, section 
295.11  275.71, subdivision 4, is amended to read: 
295.12     Subd. 4.  [ADJUSTED LEVY LIMIT BASE.] (a) For taxes levied 
295.13  in 2001 and 2002, the adjusted levy limit base is equal to 
295.14  the sum of the levy limit base computed under subdivisions 2 and 
295.15  3 or section 275.72, plus, in the case of a city, the amount it 
295.16  was certified to receive in calendar year 2001 under section 
295.17  273.166, multiplied by: 
295.18     (1) one plus a percentage equal to the percentage growth in 
295.19  the implicit price deflator; 
295.20     (2) one plus a percentage equal to the percentage increase 
295.21  in number of households, if any, for the most recent 12-month 
295.22  period for which data is available; and 
295.23     (3) one plus a percentage equal to 50 percent of the 
295.24  percentage increase in the taxable market value of the 
295.25  jurisdiction due to new construction of class 3 property, as 
295.26  defined in section 273.13, subdivision 24, except for 
295.27  state-assessed utility and railroad operating property, for the 
295.28  most recent year for which data is available. 
295.29     (b) For counties only, for taxes levied in 2001 and 2002, 
295.30  the adjusted levy limit base is also reduced by any amount of 
295.31  levy reduction required under section 275.07, subdivision 1, 
295.32  paragraph (b), clause (ii). 
295.33     <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
295.34  payable in 2003. 
295.35     Sec. 5.  Minnesota Statutes 2000, section 278.01, 
295.36  subdivision 1, is amended to read: 
296.1      Subdivision 1.  [DETERMINATION OF VALIDITY.] (a) Any person 
296.2   having personal property, or any estate, right, title, or 
296.3   interest in or lien upon any parcel of land, who claims that 
296.4   such property has been partially, unfairly, or unequally 
296.5   assessed in comparison with other property in the (1) city, or 
296.6   (2) county, or (3) in the case of a county containing a city of 
296.7   the first class, the portion of the county excluding the first 
296.8   class city, or that the parcel has been assessed at a valuation 
296.9   greater than its real or actual value, or that the tax levied 
296.10  against the same is illegal, in whole or in part, or has been 
296.11  paid, or that the property is exempt from the tax so levied, may 
296.12  have the validity of the claim, defense, or objection determined 
296.13  by the district court of the county in which the tax is levied 
296.14  or by the tax court by serving one copy of a petition for such 
296.15  determination upon the county auditor, one copy on the county 
296.16  attorney, one copy on the county treasurer, and three copies on 
296.17  the county assessor.  The county assessor shall immediately 
296.18  forward one copy of the petition to the appropriate governmental 
296.19  authority in a home rule charter or statutory city or town in 
296.20  which the property is located if that city or town employs its 
296.21  own certified assessor.  A copy of the petition shall also be 
296.22  forwarded by the assessor to the school board of the school 
296.23  district in which the property is located. 
296.24     (b) In counties where the office of county treasurer has 
296.25  been combined with the office of county auditor, the county may 
296.26  elect to require the petitioner to serve the number of copies as 
296.27  determined by the county.  The county assessor shall immediately 
296.28  forward one copy of the petition to the appropriate governmental 
296.29  authority in a home rule charter or statutory city or town in 
296.30  which the property is located if that city or town employs its 
296.31  own certified assessor.  A list of petitioned properties, 
296.32  including the name of the petitioner, the identification number 
296.33  of the property, and the estimated market value, shall be sent 
296.34  on or before the first day of July by the county 
296.35  auditor/treasurer to the school board of the school district in 
296.36  which the property is located. 
297.1      (c) For all counties, the petitioner must file the copies 
297.2   with proof of service, in the office of the court administrator 
297.3   of the district court on or before March 31 the later of April 
297.4   30 of the year in which the tax becomes payable or 30 days after 
297.5   the postmark on the envelope containing the property tax 
297.6   statement for the property.  A petition for determination under 
297.7   this section may be transferred by the district court to the tax 
297.8   court.  An appeal may also be taken to the tax court under 
297.9   chapter 271 at any time following receipt of the valuation 
297.10  notice required by section 273.121 but prior to April 1 of the 
297.11  year in which the taxes are payable the deadline in this 
297.12  paragraph. 
297.13     <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
297.14  payable in 2003 and thereafter. 
297.15     Sec. 6.  Minnesota Statutes 2000, section 279.01, 
297.16  subdivision 3, is amended to read: 
297.17     Subd. 3.  [AGRICULTURAL PROPERTY.] In the case of class 1b 
297.18  agricultural homestead, class 2a agricultural homestead 
297.19  property, and class 2b(3) agricultural nonhomestead property, no 
297.20  penalties shall attach to the second one-half property tax 
297.21  payment as provided in this section if paid by November 15.  
297.22  Thereafter for class 1b agricultural homestead and class 2a 
297.23  homestead property, on November 16 following, a penalty of six 
297.24  percent shall accrue and be charged on all such unpaid taxes and 
297.25  on December 1 following, an additional two percent shall be 
297.26  charged on all such unpaid taxes.  Thereafter for class 2b(3) 
297.27  agricultural nonhomestead property, on November 16 following, a 
297.28  penalty of eight percent shall accrue and be charged on all such 
297.29  unpaid taxes and on December 1 following, an additional four 
297.30  percent shall be charged on all such unpaid taxes. 
297.31     If the owner of class 1b agricultural homestead, class 2a, 
297.32  or class 2b(3) agricultural property receives a consolidated 
297.33  property tax statement that shows only an aggregate of the taxes 
297.34  and special assessments due on that property and on other 
297.35  property not classified as class 1b agricultural homestead, 
297.36  class 2a, or class 2b(3) agricultural property, the aggregate 
298.1   tax and special assessments shown due on the property by the 
298.2   consolidated statement will be due on November 15 provided that 
298.3   at least 50 percent of the property's market value is classified 
298.4   class 1b agricultural, class 2a, or class 2b(3) agricultural. 
298.5      <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
298.6   payable in 2003 and thereafter. 
298.7      Sec. 7.  Minnesota Statutes 2000, section 289A.19, 
298.8   subdivision 1, is amended to read: 
298.9      Subdivision 1.  [FIDUCIARY INCOME, ENTERTAINMENT TAX, AND 
298.10  INFORMATION RETURNS.] When, in the commissioner's judgment, good 
298.11  cause exists, the commissioner may extend the time for filing 
298.12  entertainment tax returns for not more than six months.  If an 
298.13  extension to file the federal fiduciary income tax return or 
298.14  information return has been granted under section 6081 of the 
298.15  Internal Revenue Code, the time for filing the state return is 
298.16  extended for that period.  The commissioner may require the 
298.17  taxpayer to file a tentative return when the regularly required 
298.18  return is due, and to pay a tax on the basis of the tentative 
298.19  return at the times required for the payment of taxes on the 
298.20  basis of the regularly required return from the taxpayer.  The 
298.21  commissioner shall grant an automatic extension of six months to 
298.22  file a partnership, "S" corporation, or fiduciary income tax 
298.23  return if all of the taxes imposed on the entity for the year by 
298.24  chapter 290 and section 289A.08, subdivision 7, have been paid 
298.25  by the date prescribed by section 289A.18, subdivision 1. 
298.26     <h>[EFFECTIVE DATE.]</h> This section is effective for returns due 
298.27  after December 31, 2002. 
298.28     Sec. 8.  Minnesota Statutes 2000, section 295.53, 
298.29  subdivision 1, is amended to read: 
298.30     Subdivision 1.  [EXEMPTIONS.] (a) The following payments 
298.31  are excluded from the gross revenues subject to the hospital, 
298.32  surgical center, or health care provider taxes under sections 
298.33  295.50 to 295.57: 
298.34     (1) payments received for services provided under the 
298.35  Medicare program, including payments received from the 
298.36  government, and organizations governed by sections 1833 and 1876 
299.1   of title XVIII of the federal Social Security Act, United States 
299.2   Code, title 42, section 1395, and enrollee deductibles, 
299.3   coinsurance, and copayments, whether paid by the Medicare 
299.4   enrollee or by a Medicare supplemental coverage as defined in 
299.5   section 62A.011, subdivision 3, clause (10).  Payments for 
299.6   services not covered by Medicare are taxable; 
299.7      (2) medical assistance payments including payments received 
299.8   directly from the government or from a prepaid plan; 
299.9      (3) payments received for home health care services; 
299.10     (4) payments received from hospitals or surgical centers 
299.11  for goods and services on which liability for tax is imposed 
299.12  under section 295.52 or the source of funds for the payment is 
299.13  exempt under clause (1), (2), (7), (8), (10), (13), or (20); 
299.14     (5) payments received from health care providers for goods 
299.15  and services on which liability for tax is imposed under this 
299.16  chapter or the source of funds for the payment is exempt under 
299.17  clause (1), (2), (7), (8), (10), (13), or (20); 
299.18     (6) amounts paid for legend drugs, other than nutritional 
299.19  products, to a wholesale drug distributor who is subject to tax 
299.20  under section 295.52, subdivision 3, reduced by reimbursements 
299.21  received for legend drugs under clauses (1), (2), (7), and 
299.22  (8) otherwise exempt under chapter 295; 
299.23     (7) payments received under the general assistance medical 
299.24  care program including payments received directly from the 
299.25  government or from a prepaid plan; 
299.26     (8) payments received for providing services under the 
299.27  MinnesotaCare program including payments received directly from 
299.28  the government or from a prepaid plan and enrollee deductibles, 
299.29  coinsurance, and copayments.  For purposes of this clause, 
299.30  coinsurance means the portion of payment that the enrollee is 
299.31  required to pay for the covered service; 
299.32     (9) payments received by a health care provider or the 
299.33  wholly owned subsidiary of a health care provider for care 
299.34  provided outside Minnesota; 
299.35     (10) payments received from the chemical dependency fund 
299.36  under chapter 254B; 
300.1      (11) payments received in the nature of charitable 
300.2   donations that are not designated for providing patient services 
300.3   to a specific individual or group; 
300.4      (12) payments received for providing patient services 
300.5   incurred through a formal program of health care research 
300.6   conducted in conformity with federal regulations governing 
300.7   research on human subjects.  Payments received from patients or 
300.8   from other persons paying on behalf of the patients are subject 
300.9   to tax; 
300.10     (13) payments received from any governmental agency for 
300.11  services benefiting the public, not including payments made by 
300.12  the government in its capacity as an employer or insurer; 
300.13     (14) payments received for services provided by community 
300.14  residential mental health facilities licensed under Minnesota 
300.15  Rules, parts 9520.0500 to 9520.0690, community support programs 
300.16  and family community support programs approved under Minnesota 
300.17  Rules, parts 9535.1700 to 9535.1760, and community mental health 
300.18  centers as defined in section 245.62, subdivision 2; 
300.19     (15) government payments received by a regional treatment 
300.20  center; 
300.21     (16) payments received for hospice care services; 
300.22     (17) payments received by a health care provider for 
300.23  hearing aids and related equipment or prescription eyewear 
300.24  delivered outside of Minnesota; 
300.25     (18) payments received by an educational institution from 
300.26  student tuition, student activity fees, health care service 
300.27  fees, government appropriations, donations, or grants.  Fee for 
300.28  service payments and payments for extended coverage are taxable; 
300.29     (19) payments received for services provided by:  assisted 
300.30  living programs and congregate housing programs; and 
300.31     (20) payments received under the federal Employees Health 
300.32  Benefits Act, United States Code, title 5, section 8909(f), as 
300.33  amended by the Omnibus Reconciliation Act of 1990. 
300.34     (b) Payments received by wholesale drug distributors for 
300.35  legend drugs sold directly to veterinarians or veterinary bulk 
300.36  purchasing organizations are excluded from the gross revenues 
301.1   subject to the wholesale drug distributor tax under sections 
301.2   295.50 to 295.59. 
301.3      <h>[EFFECTIVE DATE.]</h> This section is effective for payments 
301.4   received after December 31, 2001. 
301.5      Sec. 9.  Minnesota Statutes 2000, section 295.57, is 
301.6   amended by adding a subdivision to read: 
301.7      Subd. 5.  [EXEMPTION FOR AMOUNTS PAID FOR LEGEND DRUGS.] If 
301.8   a hospital or health care provider cannot determine the actual 
301.9   cost or reimbursement of legend drugs under the exemption 
301.10  provided in section 295.53, subdivision 1, paragraph (a), clause 
301.11  (6), the following method must be used: 
301.12     A hospital or health care provider must determine the 
301.13  amount paid for legend drugs used during the month or quarter 
301.14  and multiply that amount by a ratio, the numerator of which is 
301.15  the total amount received for taxable patient services, and the 
301.16  denominator of which is the total amount received for all 
301.17  patient services, including amounts exempt under section 295.53, 
301.18  subdivision 1.  The result represents the allowable exemption 
301.19  for the monthly or quarterly cost of drugs. 
301.20     <h>[EFFECTIVE DATE.]</h> This section is effective for payments 
301.21  received on or after July 1, 2002. 
301.22     Sec. 10.  Minnesota Statutes 2001 Supplement, section 
301.23  295.60, subdivision 2, is amended to read: 
301.24     Subd. 2.  [DEFINITIONS.] (a) For purposes of this section, 
301.25  the following terms have the meanings given. 
301.26     (b) "Commissioner" means the commissioner of revenue. 
301.27     (c) "Furrier" means a retailer that sells clothing made of 
301.28  fur. 
301.29     (d) "Clothing made of fur" means articles of clothing made 
301.30  of fur on the hide or pelt, and articles of clothing of which 
301.31  such fur is the component material of chief value, but only if 
301.32  such value is more than three times the value of the next most 
301.33  valuable material.  
301.34     (e) "Retail sale" has the meaning given in section 297A.61, 
301.35  subdivision 4. 
301.36     (f) "Delivered outside of Minnesota" means fur clothing 
302.1   which the furrier delivers to a common carrier for delivery 
302.2   outside Minnesota, places in the United States mail or parcel 
302.3   post directed to the purchaser outside Minnesota, or delivers to 
302.4   the purchaser outside Minnesota by means of the seller's own 
302.5   delivery vehicles, and which is not returned to a point within 
302.6   Minnesota, except in the course of interstate commerce. 
302.7      <h>[EFFECTIVE DATE.]</h> This section is effective January 1, 2002.
302.8      Sec. 11.  Minnesota Statutes 2001 Supplement, section 
302.9   295.60, is amended by adding a subdivision to read: 
302.10     Subd. 2a.  [EXEMPTIONS.] Payments received by a furrier for 
302.11  clothing made of fur delivered outside of Minnesota are exempt 
302.12  from gross revenues subject to the fur clothing tax. 
302.13     <h>[EFFECTIVE DATE.]</h> This section is effective for payments 
302.14  received on or after January 1, 2002. 
302.15     Sec. 12.  Minnesota Statutes 2001 Supplement, section 
302.16  297A.61, subdivision 26, is amended to read: 
302.17     Subd. 26.  [PRIVATE COMMUNICATION SERVICE.] "Private 
302.18  communication service" means a communication telecommunication 
302.19  service furnished to a subscriber which that entitles the 
302.20  subscriber customer to:  
302.21     (1) exclusive or priority use of any a communication 
302.22  channel or group of channels; 
302.23     (2) the use of an intercommunication system for the 
302.24  subscriber's stations, or regardless of whether the channel, 
302.25  group of channels, or intercommunication system may be connected 
302.26  through switching; 
302.27     (3) the between or among termination points, regardless of 
302.28  the manner in which the channel or channels are connected, and 
302.29  includes switching capacity, extension lines and, stations, 
302.30  or and any other associated services that are provided in 
302.31  connection with, and are necessary or unique to the use of, the 
302.32  use of the channel or channels or systems described in clause 
302.33  (1); or 
302.34     (4) any combination of tunneling, encryption, 
302.35  authentication, and access control technologies and services 
302.36  used to carry traffic over the Internet, a managed Internet 
303.1   provider network or provider's backbone. 
303.2      <h>[EFFECTIVE DATE.]</h> This section is effective retroactively 
303.3   for sales and purchases occurring after July 31, 2001. 
303.4      Sec. 13.  Minnesota Statutes 2000, section 297A.68, is 
303.5   amended by adding a subdivision to read: 
303.6      Subd. 37.  [DELIVERY OR DISTRIBUTION CHARGES; PRINTED 
303.7   MATERIALS.] Charges for the delivery or distribution of printed 
303.8   materials, including individual account information, are exempt 
303.9   if (1) the charges are separately stated, (2) the delivery or 
303.10  distribution is to a mass audience or to a mailing list provided 
303.11  at the direction of the customer, and (3) the cost of the 
303.12  materials is not billed directly to the recipients. 
303.13     <h>[EFFECTIVE DATE.]</h> This section is effective retroactive to 
303.14  delivery charges on sales and purchases made after December 31, 
303.15  2001. 
303.16     Sec. 14.  Minnesota Statutes 2000, section 297G.07, 
303.17  subdivision 1, is amended to read: 
303.18     Subdivision 1.  [EXEMPTIONS.] The following are not subject 
303.19  to the excise tax: 
303.20     (1) Sales by a manufacturer, brewer, or wholesaler for 
303.21  shipment outside the state in interstate commerce. 
303.22     (2) Alcoholic beverages sold or transferred between 
303.23  Minnesota wholesalers. 
303.24     (3) Sales to common carriers engaged in interstate 
303.25  transportation of passengers, except as provided in this chapter.
303.26     (4) Malt beverages served by a brewery for on-premise 
303.27  consumption at no charge, or distributed to brewery employees 
303.28  for on-premise consumption under a labor contract. 
303.29     (5) Shipments of wine to Minnesota residents under section 
303.30  340A.417. 
303.31     (6) Fruit juices naturally fermented or beer naturally 
303.32  brewed in the home for family use. 
303.33     (7) Sales of wine for sacramental purposes under section 
303.34  340A.316. 
303.35     (8) Alcoholic beverages sold to authorized manufacturers of 
303.36  food products or pharmaceutical firms.  The alcoholic beverage 
304.1   must be used exclusively in the manufacture of food products or 
304.2   medicines.  For purposes of this clause, "manufacturer" means a 
304.3   person who manufactures food products intended for sale to 
304.4   wholesalers or retailers for ultimate sale to the consumer. 
304.5      (9) Liqueur-filled candy. 
304.6      (10) Sales to a federal agency, that the state of Minnesota 
304.7   is prohibited from taxing under the constitution or laws of the 
304.8   United States or under the constitution of Minnesota. 
304.9      (11) Sales to Indian tribes as defined in section 297G.08. 
304.10     (12) Shipments of intoxicating liquor from foreign 
304.11  countries to diplomatic personnel of foreign countries assigned 
304.12  to service in this state. 
304.13     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
304.14  following final enactment. 
304.15     Sec. 15.  Minnesota Statutes 2000, section 298.27, is 
304.16  amended to read: 
304.17     298.27 [COLLECTION AND PAYMENT OF TAX.] 
304.18     The taxes provided by section 298.24 shall be paid directly 
304.19  to each eligible county and the iron range resources and 
304.20  rehabilitation board.  The commissioner of revenue shall notify 
304.21  each producer of the amount to be paid each recipient prior to 
304.22  February 15.  Every person subject to taxes imposed by section 
304.23  298.24 shall file a correct report covering the preceding year.  
304.24  The report must contain the information required by the 
304.25  commissioner.  The report shall be filed on or before February 
304.26  1.  A remittance equal to 100 percent of the total tax required 
304.27  to be paid hereunder shall be paid by each producer on or before 
304.28  February 24.  On or before February 25, the county auditor shall 
304.29  make distribution of the payment received by the county in the 
304.30  manner provided by section 298.28.  Reports shall be made and 
304.31  hearings held upon the determination of the tax in accordance 
304.32  with procedures established by the commissioner of revenue.  The 
304.33  commissioner of revenue shall have authority to make reasonable 
304.34  rules as to the form and manner of filing reports necessary for 
304.35  the determination of the tax hereunder, and by such rules may 
304.36  require the production of such information as may be reasonably 
305.1   necessary or convenient for the determination and apportionment 
305.2   of the tax.  All the provisions of the occupation tax law with 
305.3   reference to the assessment and determination of the occupation 
305.4   tax, including all provisions for appeals from or review of the 
305.5   orders of the commissioner of revenue relative thereto, but not 
305.6   including provisions for refunds, are applicable to the taxes 
305.7   imposed by section 298.24 except in so far as inconsistent 
305.8   herewith.  If any person subject to section 298.24 shall fail to 
305.9   make the report provided for in this section at the time and in 
305.10  the manner herein provided, the commissioner of revenue shall in 
305.11  such case, upon information possessed or obtained, ascertain the 
305.12  kind and amount of ore mined or produced and thereon find and 
305.13  determine the amount of the tax due from such person.  There 
305.14  shall be added to the amount of tax due a penalty for failure to 
305.15  report on or before February 1, which penalty shall equal ten 
305.16  percent of the tax imposed and be treated as a part thereof. 
305.17     If any person responsible for making a tax payment at the 
305.18  time and in the manner herein provided fails to do so, there 
305.19  shall be imposed a penalty equal to ten percent of the amount so 
305.20  due, which penalty shall be treated as part of the tax due. 
305.21     In the case of any underpayment of the tax payment required 
305.22  herein, there may be added and be treated as part of the tax due 
305.23  a penalty equal to ten percent of the amount so underpaid. 
305.24     A person having a liability of $120,000 or more during a 
305.25  calendar year must remit all liabilities by means of a funds 
305.26  transfer as defined in section 336.4A-104, paragraph (a).  The 
305.27  funds transfer payment date, as defined in section 336.4A-401, 
305.28  must be on or before the date the tax is due.  If the date the 
305.29  tax is due is not a funds transfer business day, as defined in 
305.30  section 336.4A-105, paragraph (a), clause (4), the payment date 
305.31  must be on or before the funds transfer business day next 
305.32  following the date the tax is due. 
305.33     <h>[EFFECTIVE DATE.]</h> This section is effective for years 
305.34  beginning after December 31, 2001. 
305.35     Sec. 16.  Minnesota Statutes 2000, section 298.28, 
305.36  subdivision 5, is amended to read: 
306.1      Subd. 5.  [COUNTIES.] (a) 16.5 26.05 cents per taxable ton 
306.2   is allocated to counties to be distributed, based upon 
306.3   certification by the commissioner of revenue, under paragraphs 
306.4   (b) to (d). 
306.5      (b) 13 20.525 cents per taxable ton shall be distributed to 
306.6   the county in which the taconite is mined or quarried or in 
306.7   which the concentrate is produced, less any amount which is to 
306.8   be distributed pursuant to paragraph (c).  The apportionment 
306.9   formula prescribed in subdivision 2 is the basis for the 
306.10  distribution. 
306.11     (c) If an electric power plant owned by and providing the 
306.12  primary source of power for a taxpayer mining and concentrating 
306.13  taconite is located in a county other than the county in which 
306.14  the mining and the concentrating processes are conducted, one 
306.15  cent per taxable ton of the tax distributed to the counties 
306.16  pursuant to paragraph (b) and imposed on and collected from such 
306.17  taxpayer shall be paid to the county in which the power plant is 
306.18  located. 
306.19     (d) 3.5 5.525 cents per taxable ton shall be paid to the 
306.20  county from which the taconite was mined, quarried or 
306.21  concentrated to be deposited in the county road and bridge 
306.22  fund.  If the mining, quarrying and concentrating, or separate 
306.23  steps in any of those processes are carried on in more than one 
306.24  county, the commissioner shall follow the apportionment formula 
306.25  prescribed in subdivision 2. 
306.26     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
306.27  following final enactment. 
306.28     Sec. 17.  Minnesota Statutes 2001 Supplement, section 
306.29  298.28, subdivision 6, is amended to read: 
306.30     Subd. 6.  [PROPERTY TAX RELIEF.] (a) In 2002 and 
306.31  thereafter, 35.9 33.9 cents per taxable ton, less any amount 
306.32  required to be distributed under paragraphs (b) and (c), and 
306.33  less any amount required to be deducted under paragraph (d), 
306.34  must be allocated to St. Louis county acting as the counties' 
306.35  fiscal agent, to be distributed as provided in sections 273.134 
306.36  to 273.136. 
307.1      (b) If an electric power plant owned by and providing the 
307.2   primary source of power for a taxpayer mining and concentrating 
307.3   taconite is located in a county other than the county in which 
307.4   the mining and the concentrating processes are conducted, .1875 
307.5   cent per taxable ton of the tax imposed and collected from such 
307.6   taxpayer shall be paid to the county. 
307.7      (c) If an electric power plant owned by and providing the 
307.8   primary source of power for a taxpayer mining and concentrating 
307.9   taconite is located in a school district other than a school 
307.10  district in which the mining and concentrating processes are 
307.11  conducted,.7282 .5898 cent per taxable ton of the tax imposed 
307.12  and collected from the taxpayer shall be paid to the school 
307.13  district. 
307.14     (d) Two cents per taxable ton must be deducted from the 
307.15  amount allocated to the St. Louis county auditor under paragraph 
307.16  (a). 
307.17     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
307.18  following final enactment. 
307.19     Sec. 18.  Minnesota Statutes 2001 Supplement, section 
307.20  298.28, subdivision 10, is amended to read: 
307.21     Subd. 10.  [INCREASE.] Beginning with distributions in 
307.22  2000, the amount determined under subdivision 9 shall be 
307.23  increased in the same proportion as the increase in the implicit 
307.24  price deflator as provided in section 298.24, subdivision 1.  
307.25  Beginning with distributions in 2003, the amount determined 
307.26  under subdivision 6, paragraph (a), shall be increased in the 
307.27  same proportion as the increase in the implicit price deflator 
307.28  as provided in section 298.24, subdivision 1.  
307.29     The distributions per ton determined under subdivisions 5, 
307.30  paragraphs (b) and (d), and 6, paragraph (b), for distribution 
307.31  in 1988 and subsequent years shall be the distribution per ton 
307.32  determined for distribution in 1987.  The distribution per ton 
307.33  under subdivision 6, paragraph (c), for distribution in 2000 and 
307.34  subsequent years shall be 81 percent of the distribution per ton 
307.35  determined for distribution in 1987. 
307.36     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
308.1   following final enactment. 
308.2      Sec. 19.  Minnesota Statutes 2001 Supplement, section 
308.3   469.1763, subdivision 6, is amended to read: 
308.4      Subd. 6.  [POOLING PERMITTED FOR DEFICITS.] (a) This 
308.5   subdivision applies only to districts for which the request for 
308.6   certification was made before August 1, 2001, and without regard 
308.7   to whether the request for certification was made prior to 
308.8   August 1, 1979. 
308.9      (b) The municipality for the district may transfer 
308.10  available increments from another tax increment financing 
308.11  district located in the municipality, if the transfer is 
308.12  necessary to eliminate a deficit in the district to which the 
308.13  increments are transferred.  A deficit in the district for 
308.14  purposes of this subdivision means the lesser of the following 
308.15  two amounts: 
308.16     (1)(i) the amount due during the calendar year to pay 
308.17  preexisting obligations of the district; minus 
308.18     (ii) the total increments collected or to be collected from 
308.19  properties located within the district that are available for 
308.20  the calendar year including amounts collected in prior years 
308.21  that are currently available; plus 
308.22     (iii) total increments from properties located in other 
308.23  districts in the municipality including amounts collected in 
308.24  prior years that are available to be used to meet the district's 
308.25  obligations under this section, excluding this subdivision, or 
308.26  other provisions of law (but excluding a special tax under 
308.27  section 469.1791 and the grant program under Laws 1997, chapter 
308.28  231, article 1, section 19, or Laws 2001, First Special Session 
308.29  chapter 5); or 
308.30     (2) the reduction in increments collected from properties 
308.31  located in the district for the calendar year as a result of the 
308.32  changes in class rates in Laws 1997, chapter 231, article 1; 
308.33  Laws 1998, chapter 389, article 2; and Laws 1999, chapter 243, 
308.34  and Laws 2001, First Special Session chapter 5, or the 
308.35  elimination of the general education tax levy under Laws 2001, 
308.36  First Special Session chapter 5. 
309.1      (c) A preexisting obligation means: 
309.2      (1) bonds issued and sold before August 1, 2001, or bonds 
309.3   issued pursuant to a binding contract requiring the issuance of 
309.4   bonds entered into before July 1, 2001, and bonds issued to 
309.5   refund such bonds or to reimburse expenditures made in 
309.6   conjunction with a signed contractual agreement entered into 
309.7   before August 1, 2001, to the extent that the bonds are secured 
309.8   by a pledge of increments from the tax increment financing 
309.9   district; and 
309.10     (2) binding contracts entered into before August 1, 2001, 
309.11  to the extent that the contracts require payments secured by a 
309.12  pledge of increments from the tax increment financing district. 
309.13     (d) The municipality may require a development authority, 
309.14  other than a seaway port authority, to transfer available 
309.15  increments including amounts collected in prior years that are 
309.16  currently available for any of its tax increment financing 
309.17  districts in the municipality to make up an insufficiency in 
309.18  another district in the municipality, regardless of whether the 
309.19  district was established by the development authority or another 
309.20  development authority.  This authority applies notwithstanding 
309.21  any law to the contrary, but applies only to a development 
309.22  authority that: 
309.23     (1) was established by the municipality; or 
309.24     (2) the governing body of which is appointed, in whole or 
309.25  part, by the municipality or an officer of the municipality or 
309.26  which consists, in whole or part, of members of the governing 
309.27  body of the municipality.  The municipality may use this 
309.28  authority only after it has first used all available increments 
309.29  of the receiving development authority to eliminate the 
309.30  insufficiency and exercised any permitted action under section 
309.31  469.1792, subdivision 3, for preexisting districts of the 
309.32  receiving development authority to eliminate the insufficiency. 
309.33     (e) The authority under this subdivision to spend tax 
309.34  increments outside of the area of the district from which the 
309.35  tax increments were collected: 
309.36     (1) may only be exercised after obtaining approval of the 
310.1   use of the increments, in writing, by the commissioner of 
310.2   revenue; 
310.3      (2) is an exception to the restrictions under section 
310.4   469.176, subdivision 4i, and the other provisions of this 
310.5   section, and the percentage restrictions under subdivision 2 
310.6   must be calculated after deducting increments spent under this 
310.7   subdivision from the total increments for the district; and 
310.8      (3) applies notwithstanding the provisions of the Tax 
310.9   Increment Financing Act in effect for districts for which the 
310.10  request for certification was made before June 30, 1982, or any 
310.11  other law to the contrary. 
310.12     (f) If a preexisting obligation requires the development 
310.13  authority to pay an amount that is limited to the increment from 
310.14  the district or a specific development within the district and 
310.15  if the obligation requires paying a higher amount to the extent 
310.16  that increments are available, the municipality may determine 
310.17  that the amount due under the preexisting obligation equals the 
310.18  higher amount and may authorize the transfer of increments under 
310.19  this subdivision to pay up to the higher amount.  The authority 
310.20  to transfer increments under this paragraph may only be used to 
310.21  the extent that the payment of all other preexisting obligations 
310.22  in the municipality due during the calendar year have been 
310.23  satisfied. 
310.24     <h>[EFFECTIVE DATE.]</h> This section is effective retroactively 
310.25  to January 2, 2002, and thereafter. 
310.26     Sec. 20.  Laws 2001, First Special Session chapter 5, 
310.27  article 12, section 95, is amended to read: 
310.28     Sec. 95.  [REPEALER.] 
310.29     (a) Minnesota Statutes 2000, sections 297A.61, subdivision 
310.30  16; 297A.68, subdivision 21; and 297A.71, subdivisions 2 and 16, 
310.31  are repealed effective for sales and purchases occurring after 
310.32  June 30, 2001, except that the repeal of section 297A.61, 
310.33  subdivision 16, paragraph (d), is effective for sales and 
310.34  purchases occurring after July 31, 2001. 
310.35     (b) Minnesota Statutes 2000, sections 297A.62, subdivision 
310.36  2, and 297A.64, subdivision 1, are repealed effective for sales 
311.1   and purchases made after December 31, 2005. 
311.2      (c) Minnesota Statutes 2000, section 297A.71, subdivision 
311.3   15, is repealed effective for sales and purchases made after 
311.4   June 30, 2002. 
311.5      (d) Minnesota Statutes 2000, section 289A.60, subdivision 
311.6   15, is repealed effective for liabilities after January 1, 2003. 
311.7      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
311.8   following final enactment. 
311.9      Sec. 21.  [REPEALER.] 
311.10     Minnesota Statutes 2000, section 278.01, subdivision 4, is 
311.11  repealed effective for taxes payable in 2003 and thereafter. 
311.12                             ARTICLE 21
311.13             DEPARTMENT OF REVENUE TECHNICAL PROVISIONS
311.14     Section 1.  Minnesota Statutes 2001 Supplement, section 
311.15  69.021, subdivision 5, is amended to read: 
311.16     Subd. 5.  [CALCULATION OF STATE AID.] (a) The amount of 
311.17  fire state aid available for apportionment, before the addition 
311.18  of the minimum fire state aid allocation amount under 
311.19  subdivision 7, is equal to 107 percent of the amount of premium 
311.20  taxes paid to the state upon the fire, lightning, sprinkler 
311.21  leakage, and extended coverage premiums reported to the 
311.22  commissioner by insurers on the Minnesota Firetown Premium 
311.23  Report.  This amount shall be reduced by the amount required to 
311.24  pay the state auditor's costs and expenses of the audits or 
311.25  exams of the firefighters relief associations. 
311.26     The total amount for apportionment in respect to fire state 
311.27  aid must not be less than two percent of the premiums reported 
311.28  to the commissioner by insurers on the Minnesota Firetown 
311.29  Premium Report after subtracting the following amounts: 
311.30     (1) the amount required to pay the state auditor's costs 
311.31  and expenses of the audits or exams of the firefighters relief 
311.32  associations; and 
311.33     (2) one percent of the premiums reported by town and 
311.34  farmers' mutual insurance companies and mutual property and 
311.35  casualty companies with total assets of $5,000,000 or less.  
311.36     (b) The total amount for apportionment as police state aid 
312.1   is equal to 104 percent of the amount of premium taxes paid to 
312.2   the state on the premiums reported to the commissioner by 
312.3   insurers on the Minnesota Aid to Police Premium Report, plus the 
312.4   payment amounts received under section 297I.05, subdivision 8, 
312.5   since the last aid apportionment, and reduced by the amount 
312.6   required to pay the costs and expenses of the state auditor for 
312.7   audits or exams of police relief associations.  The total amount 
312.8   for apportionment in respect to the police state aid program 
312.9   must not be less than two percent of the amount of premiums 
312.10  reported to the commissioner by insurers on the Minnesota Aid to 
312.11  Police Premium Report after subtracting the amount required to 
312.12  pay the state auditor's cost and expenses of the audits or exams 
312.13  of the police relief associations.  
312.14     (c) The commissioner shall calculate the percentage of 
312.15  increase or decrease reflected in the apportionment over or 
312.16  under the previous year's available state aid using the same 
312.17  premiums as a basis for comparison. 
312.18     (d) The amount for apportionment in respect to peace 
312.19  officer state aid under paragraph (b) must be further reduced by 
312.20  $1,779,000 in fiscal year 1999, $2,077,000 in fiscal year 2000, 
312.21  and $2,404,000 in fiscal year 2001.  These reductions in this 
312.22  paragraph cancel to the general fund. 
312.23     (e) In addition to the amount for apportionment of police 
312.24  state aid under paragraph (b) is annually increased by an amount 
312.25  equal to the revenues under the tax on automobile risk 
312.26  self-insurance under Minnesota Statutes 2000, section 297I.05, 
312.27  subdivision 8, that were collected in fiscal year 2001, each 
312.28  year $100,000 shall be apportioned for police state aid.  An 
312.29  amount sufficient to pay this increase is annually appropriated 
312.30  from the general fund. 
312.31     <h>[EFFECTIVE DATE.]</h> This section is effective beginning with 
312.32  fiscal year 2003. 
312.33     Sec. 2.  Minnesota Statutes 2001 Supplement, section 
312.34  126C.17, subdivision 7a, is amended to read: 
312.35     Subd. 7a.  [REFERENDUM TAX BASE REPLACEMENT AID.] For each 
312.36  school district that had a referendum allowance for fiscal year 
313.1   2002 exceeding $415, for each separately authorized referendum 
313.2   levy, the commissioner of revenue, in consultation with the 
313.3   commissioner of children, families, and learning, shall certify 
313.4   the amount of the referendum levy in taxes payable year 2001 
313.5   attributable to the portion of the referendum allowance 
313.6   exceeding $415 levied against property classified as class 2, 
313.7   noncommercial 4c(1), or 4c(4), under section 273.13, excluding 
313.8   the portion of the tax paid by the portion of class 2a property 
313.9   consisting of the house, garage, and surrounding one acre of 
313.10  land.  The resulting amount must be used to reduce the 
313.11  district's referendum levy amount otherwise determined, and must 
313.12  be paid to the district each year that the referendum authority 
313.13  remains in effect.  The aid payable under this subdivision must 
313.14  be subtracted from the district's referendum equalization aid 
313.15  under subdivision 7.  The referendum equalization aid after the 
313.16  subtraction must not be less than zero. 
313.17     For the purposes of this subdivision, the referendum levy 
313.18  with the latest year of expiration is assumed to be at the 
313.19  highest level of equalization, and the referendum levy with the 
313.20  earliest year of expiration is assumed to be at the lowest level 
313.21  of equalization. 
313.22     <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
313.23  payable in 2002 and thereafter. 
313.24     Sec. 3.  Minnesota Statutes 2001 Supplement, section 
313.25  270.69, subdivision 2, is amended to read: 
313.26     Subd. 2.  [FILING OF LIENS NECESSARY FOR ENFORCEABILITY 
313.27  AGAINST CERTAIN PERSONS; METHODS OF FILING; FEES.] (a) The lien 
313.28  imposed by subdivision 1 is not enforceable against any 
313.29  purchaser, mortgagee, pledgee, holder of a Uniform Commercial 
313.30  Code security interest, mechanic's lienor, or judgment lien 
313.31  creditor whose interest has been duly perfected or is a 
313.32  conveyance or interest entitled to protection against judgments 
313.33  and attachments under section 507.34 or under any other 
313.34  applicable provisions of state law, until a notice of lien has 
313.35  been filed by the commissioner of revenue in the office of the 
313.36  county recorder of the county in which real property is 
314.1   situated, or in the case of personal property belonging to an 
314.2   individual who is not a resident of this state or to a 
314.3   corporation, partnership, or other organization, in the office 
314.4   of the secretary of state, or in the case of personal property 
314.5   belonging to a resident individual, in the office of the county 
314.6   recorder of the county of residence of the individual. 
314.7      (b)(1) Notices of liens, and lien releases, transcriptions, 
314.8   and renewals, in a form prescribed by the commissioner of 
314.9   revenue, may be filed with the county recorder or the secretary 
314.10  of state by mail, personal delivery, or by electronic 
314.11  transmission by the commissioner or a delegate into the 
314.12  computerized filing system of the secretary of state.  The 
314.13  secretary of state shall transmit the notice electronically to 
314.14  the office of the county recorder, if that is the place of 
314.15  filing, in the county or counties shown on the computer entry.  
314.16  The filing officer, whether the county recorder or the secretary 
314.17  of state, shall endorse and index a printout of the notice in 
314.18  the same manner as if the notice had been mailed or delivered.  
314.19     (2) County recorders and the secretary of state shall enter 
314.20  information relative to lien notices, transcriptions, renewals, 
314.21  and releases filed in their offices into the central database of 
314.22  the secretary of state.  For notices filed electronically with 
314.23  the county recorders, the date and time of receipt of the notice 
314.24  and county recorder's file number, and for notices filed 
314.25  electronically with the secretary of state, the secretary of 
314.26  state's recording information, must be entered by the filing 
314.27  officer into the central database before the close of the 
314.28  working day following the day of the original data entry by the 
314.29  department of revenue.  
314.30     The filing and indexing of all notices must be in 
314.31  accordance with the filing and indexing of notices of federal 
314.32  liens, certificates of release, and refiled notices under 
314.33  section 272.483.  
314.34     (c) Notwithstanding any other law to the contrary, the 
314.35  department of revenue is exempt from payment of fees when a 
314.36  lien, lien renewal, or lien transcription is offered for 
315.1   recording.  The recording fees must be paid along with the 
315.2   release fee at the end of the month in which the release of lien 
315.3   is recorded, after receipt of a monthly statement from a county 
315.4   recorder or the secretary of state.  The department of revenue 
315.5   shall add the recording fees to the delinquent tax liability of 
315.6   the taxpayer.  Notwithstanding any other law to the contrary, 
315.7   the fee for filing or recording a notice of lien, or lien 
315.8   release, transcription, or renewal is $15.  
315.9      (d) There is appropriated to the commissioner of revenue an 
315.10  amount representing the cost of payment of recording fees to the 
315.11  county recorders and the secretary of state.  The commissioner 
315.12  shall keep a separate accounting of the costs and of payments 
315.13  for recording fees remitted by taxpayers, and make the records 
315.14  available to the legislature upon request.  
315.15     <h>[EFFECTIVE DATE.]</h> As to the protection of interests in 
315.16  property of third parties, this section is effective for liens 
315.17  of record and enforceable as of the day following final 
315.18  enactment, and for liens filed thereafter.  As to the place of 
315.19  filing of liens against personal property, this section is 
315.20  effective for liens filed on or after the day following final 
315.21  enactment. 
315.22     Sec. 4.  Minnesota Statutes 2001 Supplement, section 
315.23  271.01, subdivision 5, is amended to read: 
315.24     Subd. 5.  [JURISDICTION.] The tax court shall have 
315.25  statewide jurisdiction.  Except for an appeal to the supreme 
315.26  court or any other appeal allowed under this subdivision, the 
315.27  tax court shall be the sole, exclusive, and final authority for 
315.28  the hearing and determination of all questions of law and fact 
315.29  arising under the tax laws of the state, as defined in this 
315.30  subdivision, in those cases that have been appealed to the tax 
315.31  court and in any case that has been transferred by the district 
315.32  court to the tax court.  The tax court shall have no 
315.33  jurisdiction in any case that does not arise under the tax laws 
315.34  of the state or in any criminal case or in any case determining 
315.35  or granting title to real property or in any case that is under 
315.36  the probate jurisdiction of the district court.  The small 
316.1   claims division of the tax court shall have no jurisdiction in 
316.2   any case dealing with property valuation or assessment for 
316.3   property tax purposes until the taxpayer has appealed the 
316.4   valuation or assessment to the county board of equalization, and 
316.5   in those towns and cities which have not transferred their 
316.6   duties to the county, the town or city board of equalization, 
316.7   except for:  (i) those taxpayers whose original assessments are 
316.8   determined by the commissioner of revenue; (ii) those taxpayers 
316.9   appealing a denial of a current year application for the 
316.10  homestead classification for their property and the denial was 
316.11  not reflected on a valuation notice issued in the year; and 
316.12  (iii) any case dealing with property valuation, assessment, or 
316.13  taxation for property tax purposes and meeting the 
316.14  jurisdictional requirements of section 271.21, subdivision 2, 
316.15  paragraph (c) only as provided in section 271.21, subdivision 2. 
316.16  The tax court shall have no jurisdiction in any case involving 
316.17  an order of the state board of equalization unless a taxpayer 
316.18  contests the valuation of property.  Laws governing taxes, aids, 
316.19  and related matters administered by the commissioner of revenue, 
316.20  laws dealing with property valuation, assessment or taxation of 
316.21  property for property tax purposes, and any other laws that 
316.22  contain provisions authorizing review of taxes, aids, and 
316.23  related matters by the tax court shall be considered tax laws of 
316.24  this state subject to the jurisdiction of the tax court.  This 
316.25  subdivision shall not be construed to prevent an appeal, as 
316.26  provided by law, to an administrative agency, board of 
316.27  equalization, review under section 274.13, subdivision 1c, or to 
316.28  the commissioner of revenue.  Wherever used in this chapter, the 
316.29  term commissioner shall mean the commissioner of revenue, unless 
316.30  otherwise specified. 
316.31     <h>[EFFECTIVE DATE.]</h> This section is effective for petitions 
316.32  filed pertaining to the 2002 assessment, and thereafter. 
316.33     Sec. 5.  Minnesota Statutes 2001 Supplement, section 
316.34  271.21, subdivision 2, is amended to read: 
316.35     Subd. 2.  [JURISDICTION.] At the election of the taxpayer, 
316.36  the small claims division shall have jurisdiction only in the 
317.1   following matters: 
317.2      (a) cases involving valuation, assessment, or taxation of 
317.3   real or personal property, if the taxpayer has satisfied the 
317.4   requirements of section 271.01, subdivision 5, and:  
317.5      (i) the issue is a denial of a current year application for 
317.6   the homestead classification for the taxpayer's property and the 
317.7   denial was not reflected on a valuation notice issued in the 
317.8   year; or 
317.9      (ii) in the case of nonhomestead property, only one parcel 
317.10  is included in the petition, the entire parcel is classified as 
317.11  homestead class 1a or 1b under section 273.13 and the parcel 
317.12  contains no more than one dwelling unit; 
317.13     (iii) the entire property is classified as agricultural 
317.14  homestead class 2a or 1b under section 273.13; or 
317.15     (iv) the assessor's estimated market value of the property 
317.16  included in the petition is less than $100,000 $300,000; or 
317.17     (b) any other case concerning the tax laws as defined in 
317.18  section 271.01, subdivision 5, not involving valuation, 
317.19  assessment, or taxation of real and personal property in which 
317.20  the amount in controversy does not exceed $5,000, including 
317.21  penalty and interest; or. 
317.22     (c) cases involving valuation, assessment, or taxation of 
317.23  real or personal property if: 
317.24     (i) the issue is a denial of a current year application for 
317.25  the homestead classification for the taxpayer's property; 
317.26     (ii) only one parcel is included in the petition, the 
317.27  entire parcel is classified as homestead 1a or 1b pursuant to 
317.28  section 273.13, and the parcel contains no more than one 
317.29  dwelling unit; or 
317.30     (iii) the assessor's estimated market value of the property 
317.31  included in the petition is less than $300,000. 
317.32     <h>[EFFECTIVE DATE.]</h> This section is effective for petitions 
317.33  filed pertaining to the 2002 assessment, and thereafter. 
317.34     Sec. 6.  Minnesota Statutes 2000, section 272.02, 
317.35  subdivision 15, is amended to read: 
317.36     Subd. 15.  [PROPERTY USED TO GENERATE HYDROELECTRIC OR 
318.1   HYDROMECHANICAL POWER.] To the extent provided by section 295.44 
318.2   Notwithstanding the provisions of subdivision 39, and sections 
318.3   272.01, subdivision 2, and 273.19, subdivision 1, real and 
318.4   personal property used or to be used primarily for the 
318.5   production of hydroelectric or hydromechanical power on a site 
318.6   owned by the federal government, the state, or a local 
318.7   governmental unit which is and developed and operated pursuant 
318.8   to the provisions of section 103G.535 is exempt from property 
318.9   tax for all years during which the site is developed and 
318.10  operated under the terms of a lease or agreement authorized by 
318.11  section 103G.535. 
318.12     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
318.13  following final enactment. 
318.14     Sec. 7.  Minnesota Statutes 2001 Supplement, section 
318.15  273.121, is amended to read: 
318.16     273.121 [VALUATION OF REAL PROPERTY, NOTICE.] 
318.17     Any county assessor or city assessor having the powers of a 
318.18  county assessor, valuing or classifying taxable real property 
318.19  shall in each year notify those persons whose property is to be 
318.20  included on the assessment roll that year if the person's 
318.21  address is known to the assessor, otherwise the occupant of the 
318.22  property.  The notice shall be in writing and shall be sent by 
318.23  ordinary mail at least ten days before the meeting of the local 
318.24  board of appeal and equalization under section 274.01 or the 
318.25  review process established under section 274.13, subdivision 
318.26  1c.  It shall contain:  (1) the market value for the current and 
318.27  prior assessment, (2) the limited market value under section 
318.28  273.11, subdivision 1a, for the current and prior assessment, (3)
318.29  the qualifying amount of any improvements under section 273.11, 
318.30  subdivision 16, for the current assessment, (4) the market value 
318.31  subject to taxation after subtracting the amount of any 
318.32  qualifying improvements for the current assessment, (5) the 
318.33  classification of the property for the current and prior 
318.34  assessment, (6) a note that if the property is homestead and at 
318.35  least 35 45 years old, improvements made to the property may be 
318.36  eligible for a valuation exclusion under section 273.11, 
319.1   subdivision 16, (7) the assessor's office address, and (8) the 
319.2   dates, places, and times set for the meetings of the local board 
319.3   of appeal and equalization, the review process established under 
319.4   section 274.13, subdivision 1c, and the county board of appeal 
319.5   and equalization.  The commissioner of revenue shall specify the 
319.6   form of the notice.  The assessor shall attach to the assessment 
319.7   roll a statement that the notices required by this section have 
319.8   been mailed.  Any assessor who is not provided sufficient funds 
319.9   from the assessor's governing body to provide such notices, may 
319.10  make application to the commissioner of revenue to finance such 
319.11  notices.  The commissioner of revenue shall conduct an 
319.12  investigation and, if satisfied that the assessor does not have 
319.13  the necessary funds, issue a certification to the commissioner 
319.14  of finance of the amount necessary to provide such notices.  The 
319.15  commissioner of finance shall issue a warrant for such amount 
319.16  and shall deduct such amount from any state payment to such 
319.17  county or municipality.  The necessary funds to make such 
319.18  payments are hereby appropriated.  Failure to receive the notice 
319.19  shall in no way affect the validity of the assessment, the 
319.20  resulting tax, the procedures of any board of review or 
319.21  equalization, or the enforcement of delinquent taxes by 
319.22  statutory means. 
319.23     <h>[EFFECTIVE DATE.]</h> This section is effective for notices 
319.24  required to be mailed in 2002 and thereafter. 
319.25     Sec. 8.  Minnesota Statutes 2001 Supplement, section 
319.26  273.13, subdivision 24, is amended to read: 
319.27     Subd. 24.  [CLASS 3.] (a) Commercial and industrial 
319.28  property and utility real and personal property is class 3a.  
319.29     (1) Except as otherwise provided, each parcel of 
319.30  commercial, industrial, or utility real property has a class 
319.31  rate of 1.5 percent of the first tier of market value, and 2.0 
319.32  percent of the remaining market value.  In the case of 
319.33  contiguous parcels of property owned by the same person or 
319.34  entity, only the value equal to the first-tier value of the 
319.35  contiguous parcels qualifies for the reduced class rate, except 
319.36  that contiguous parcels owned by the same person or entity shall 
320.1   be eligible for the first-tier value class rate on each separate 
320.2   business operated by the owner of the property, provided the 
320.3   business is housed in a separate structure.  For the purposes of 
320.4   this subdivision, the first tier means the first $150,000 of 
320.5   market value.  Real property owned in fee by a utility for 
320.6   transmission line right-of-way shall be classified at the class 
320.7   rate for the higher tier.  
320.8      For purposes of this subdivision, parcels are considered to 
320.9   be contiguous even if they are separated from each other by a 
320.10  road, street, waterway, or other similar intervening type of 
320.11  property.  Connections between parcels that consist of power 
320.12  lines or pipelines do not cause the parcels to be contiguous.  
320.13  Property owners who have contiguous parcels of property that 
320.14  constitute separate businesses that may qualify for the 
320.15  first-tier class rate shall notify the assessor by July 1, for 
320.16  treatment beginning in the following taxes payable year.  
320.17     (2) All railroad operating property and All personal 
320.18  property that is:  (i) part of an electric generation, 
320.19  transmission, or distribution system; or (ii) part of a pipeline 
320.20  system transporting or distributing water, gas, crude oil, or 
320.21  petroleum products; and (iii) not described in clause (3), and 
320.22  all railroad operating property has a class rate as provided 
320.23  under clause (1) for the first tier of market value and the 
320.24  remaining market value.  In the case of multiple parcels in one 
320.25  county that are owned by one person or entity, only one first 
320.26  tier amount is eligible for the reduced rate.  
320.27     (3) The entire market value of personal property that is:  
320.28  (i) tools, implements, and machinery of an electric generation, 
320.29  transmission, or distribution system; (ii) tools, implements, 
320.30  and machinery of a pipeline system transporting or distributing 
320.31  water, gas, crude oil, or petroleum products; or (iii) the mains 
320.32  and pipes used in the distribution of steam or hot or chilled 
320.33  water for heating or cooling buildings, has a class rate as 
320.34  provided under clause (1) for the remaining market value in 
320.35  excess of the first tier. 
320.36     (b) Employment property defined in section 469.166, during 
321.1   the period provided in section 469.170, shall constitute class 
321.2   3b.  The class rates for class 3b property are determined under 
321.3   paragraph (a). 
321.4      <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
321.5   payable in 2002 and thereafter. 
321.6      Sec. 9.  Minnesota Statutes 2001 Supplement, section 
321.7   273.1392, is amended to read: 
321.8      273.1392 [PAYMENT; SCHOOL DISTRICTS.] 
321.9      The amounts of conservation tax credits under section 
321.10  273.119; disaster or emergency reimbursement under section 
321.11  273.123; attached machinery aid under section 273.138; homestead 
321.12  and agricultural credits under section 273.1384; aids and 
321.13  credits under section 273.1398; wetlands reimbursement under 
321.14  section 275.295; enterprise zone property credit payments under 
321.15  section 469.171; and metropolitan agricultural preserve 
321.16  reduction under section 473H.10 for school districts, shall be 
321.17  certified to the department of children, families, and learning 
321.18  by the department of revenue.  The amounts so certified shall be 
321.19  paid according to section 127A.45, subdivisions 9 and 13. 
321.20     <h>[EFFECTIVE DATE.]</h> This section is effective for aids and 
321.21  credits payable in 2002 and thereafter. 
321.22     Sec. 10.  Minnesota Statutes 2001 Supplement, section 
321.23  273.1398, subdivision 4c, is amended to read: 
321.24     Subd. 4c.  [TEMPORARY AID; COURT ADMINISTRATION COSTS.] For 
321.25  calendar years 2004 and 2005, each county in a judicial district 
321.26  that has not been transferred to the state by January 1 of that 
321.27  year shall receive additional homestead and agricultural credit 
321.28  aid.  This amount is in addition to the amount calculated under 
321.29  subdivision 2 and must not be included in the definition of 
321.30  homestead and agricultural credit base under subdivision 1, 
321.31  paragraph (j).  The amount of additional aid is equal to the 
321.32  difference between (1) the amount budgeted for court 
321.33  administration costs in 2001 as determined under subdivision 4b, 
321.34  paragraph (c) (b), multiplied by the maintenance of effort 
321.35  percent for the calendar year as determined under subdivision 
321.36  4b, paragraph (d) (a), and (2) the amount calculated under 
322.1   subdivision 4b, paragraph (a), for calendar year 2003.  This 
322.2   additional aid must be used only to fund court administration 
322.3   expenditures as defined in section 480.183, subdivision 3.  This 
322.4   amount must be added to the state court's base budget in the 
322.5   year when the court in that judicial district in which the 
322.6   county is located is transferred to the state. 
322.7      <h>[EFFECTIVE DATE.]</h> This section is effective retroactively 
322.8   to July 1, 2001, and thereafter. 
322.9      Sec. 11.  Minnesota Statutes 2001 Supplement, section 
322.10  275.065, subdivision 3, is amended to read: 
322.11     Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
322.12  county auditor shall prepare and the county treasurer shall 
322.13  deliver after November 10 and on or before November 24 each 
322.14  year, by first class mail to each taxpayer at the address listed 
322.15  on the county's current year's assessment roll, a notice of 
322.16  proposed property taxes.  
322.17     (b) The commissioner of revenue shall prescribe the form of 
322.18  the notice. 
322.19     (c) The notice must inform taxpayers that it contains the 
322.20  amount of property taxes each taxing authority proposes to 
322.21  collect for taxes payable the following year.  In the case of a 
322.22  town, or in the case of the state determined portion of the 
322.23  school district levy general tax, the final tax amount will be 
322.24  its proposed tax.  In the case of taxing authorities required to 
322.25  hold a public meeting under subdivision 6, the notice must 
322.26  clearly state that each taxing authority, including regional 
322.27  library districts established under section 134.201, and 
322.28  including the metropolitan taxing districts as defined in 
322.29  paragraph (i), but excluding all other special taxing districts 
322.30  and towns, will hold a public meeting to receive public 
322.31  testimony on the proposed budget and proposed or final property 
322.32  tax levy, or, in case of a school district, on the current 
322.33  budget and proposed property tax levy.  It must clearly state 
322.34  the time and place of each taxing authority's meeting, a 
322.35  telephone number for the taxing authority that taxpayers may 
322.36  call if they have questions related to the notice, and an 
323.1   address where comments will be received by mail.  
323.2      (d) The notice must state for each parcel: 
323.3      (1) the market value of the property as determined under 
323.4   section 273.11, and used for computing property taxes payable in 
323.5   the following year and for taxes payable in the current year as 
323.6   each appears in the records of the county assessor on November 1 
323.7   of the current year; and, in the case of residential property, 
323.8   whether the property is classified as homestead or 
323.9   nonhomestead.  The notice must clearly inform taxpayers of the 
323.10  years to which the market values apply and that the values are 
323.11  final values; 
323.12     (2) the items listed below, shown separately by county, 
323.13  city or town, and state determined school general tax, net of 
323.14  the education residential and agricultural homestead credit 
323.15  under section 273.1382 273.1384, voter approved school levy, 
323.16  other local school levy, and the sum of the special taxing 
323.17  districts, and as a total of all taxing authorities:  
323.18     (i) the actual tax for taxes payable in the current year; 
323.19     (ii) the tax change due to spending factors, defined as the 
323.20  proposed tax minus the constant spending tax amount; 
323.21     (iii) the tax change due to other factors, defined as the 
323.22  constant spending tax amount minus the actual current year tax; 
323.23  and 
323.24     (iv) the proposed tax amount. 
323.25     In the case of a town or the state determined school 
323.26  general tax, the final tax shall also be its proposed tax unless 
323.27  the town changes its levy at a special town meeting under 
323.28  section 365.52.  If a school district has certified under 
323.29  section 126C.17, subdivision 9, that a referendum will be held 
323.30  in the school district at the November general election, the 
323.31  county auditor must note next to the school district's proposed 
323.32  amount that a referendum is pending and that, if approved by the 
323.33  voters, the tax amount may be higher than shown on the notice.  
323.34  In the case of the city of Minneapolis, the levy for the 
323.35  Minneapolis library board and the levy for Minneapolis park and 
323.36  recreation shall be listed separately from the remaining amount 
324.1   of the city's levy.  In the case of a parcel where tax increment 
324.2   or the fiscal disparities areawide tax under chapter 276A or 
324.3   473F applies, the proposed tax levy on the captured value or the 
324.4   proposed tax levy on the tax capacity subject to the areawide 
324.5   tax must each be stated separately and not included in the sum 
324.6   of the special taxing districts; and 
324.7      (3) the increase or decrease between the total taxes 
324.8   payable in the current year and the total proposed taxes, 
324.9   expressed as a percentage. 
324.10     For purposes of this section, the amount of the tax on 
324.11  homesteads qualifying under the senior citizens' property tax 
324.12  deferral program under chapter 290B is the total amount of 
324.13  property tax before subtraction of the deferred property tax 
324.14  amount. 
324.15     (e) The notice must clearly state that the proposed or 
324.16  final taxes do not include the following: 
324.17     (1) special assessments; 
324.18     (2) levies approved by the voters after the date the 
324.19  proposed taxes are certified, including bond referenda, school 
324.20  district levy referenda, and levy limit increase referenda; 
324.21     (3) amounts necessary to pay cleanup or other costs due to 
324.22  a natural disaster occurring after the date the proposed taxes 
324.23  are certified; 
324.24     (4) amounts necessary to pay tort judgments against the 
324.25  taxing authority that become final after the date the proposed 
324.26  taxes are certified; and 
324.27     (5) the contamination tax imposed on properties which 
324.28  received market value reductions for contamination. 
324.29     (f) Except as provided in subdivision 7, failure of the 
324.30  county auditor to prepare or the county treasurer to deliver the 
324.31  notice as required in this section does not invalidate the 
324.32  proposed or final tax levy or the taxes payable pursuant to the 
324.33  tax levy. 
324.34     (g) If the notice the taxpayer receives under this section 
324.35  lists the property as nonhomestead, and satisfactory 
324.36  documentation is provided to the county assessor by the 
325.1   applicable deadline, and the property qualifies for the 
325.2   homestead classification in that assessment year, the assessor 
325.3   shall reclassify the property to homestead for taxes payable in 
325.4   the following year. 
325.5      (h) In the case of class 4 residential property used as a 
325.6   residence for lease or rental periods of 30 days or more, the 
325.7   taxpayer must either: 
325.8      (1) mail or deliver a copy of the notice of proposed 
325.9   property taxes to each tenant, renter, or lessee; or 
325.10     (2) post a copy of the notice in a conspicuous place on the 
325.11  premises of the property.  
325.12     The notice must be mailed or posted by the taxpayer by 
325.13  November 27 or within three days of receipt of the notice, 
325.14  whichever is later.  A taxpayer may notify the county treasurer 
325.15  of the address of the taxpayer, agent, caretaker, or manager of 
325.16  the premises to which the notice must be mailed in order to 
325.17  fulfill the requirements of this paragraph. 
325.18     (i) For purposes of this subdivision, subdivisions 5a and 
325.19  6, "metropolitan special taxing districts" means the following 
325.20  taxing districts in the seven-county metropolitan area that levy 
325.21  a property tax for any of the specified purposes listed below: 
325.22     (1) metropolitan council under section 473.132, 473.167, 
325.23  473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 
325.24     (2) metropolitan airports commission under section 473.667, 
325.25  473.671, or 473.672; and 
325.26     (3) metropolitan mosquito control commission under section 
325.27  473.711. 
325.28     For purposes of this section, any levies made by the 
325.29  regional rail authorities in the county of Anoka, Carver, 
325.30  Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
325.31  398A shall be included with the appropriate county's levy and 
325.32  shall be discussed at that county's public hearing. 
325.33     (j) If a statutory or home rule charter city or a town has 
325.34  exercised the local levy option provided by section 473.388, 
325.35  subdivision 7, it may include in the notice of its proposed 
325.36  taxes the amount of its proposed taxes attributable to its 
326.1   exercise of the option.  In the first year of the city or town's 
326.2   exercise of this option, the statement shall include an estimate 
326.3   of the reduction of the metropolitan council's tax on the parcel 
326.4   due to exercise of that option.  The metropolitan council's levy 
326.5   shall be adjusted accordingly. 
326.6      <h>[EFFECTIVE DATE.]</h> This section is effective for notices of 
326.7   proposed property taxes required in 2002 for taxes payable in 
326.8   2003, and thereafter. 
326.9      Sec. 12.  Minnesota Statutes 2001 Supplement, section 
326.10  275.71, subdivision 3, is amended to read: 
326.11     Subd. 3.  [ADJUSTMENTS FOR STATE TAKEOVERS.] (a) The levy 
326.12  limit base for each local unit of government shall be adjusted 
326.13  to reflect the assumption by the state of financing for certain 
326.14  government functions as indicated in this subdivision. 
326.15     (b) For a county in a judicial district for which financing 
326.16  has not been transferred to the state by January 1, 2001, the 
326.17  levy limit base for 2001 is permanently reduced by the amount of 
326.18  the county's 2001 budget for court administration costs, as 
326.19  certified under section 273.1398, subdivision 4b, paragraph (b), 
326.20  net of the county's share of transferred fines and fees 
326.21  collected by the district courts in the county for the same 
326.22  budget period. 
326.23     (c) For a governmental unit which levied a tax in 2000 
326.24  under section 473.388, subdivision 7, the levy limit base for 
326.25  2001 is permanently reduced by an amount equal to the sum of the 
326.26  governmental unit's taxes payable 2001 nondebt transit services 
326.27  levy plus the portion of its 2001 homestead and agricultural 
326.28  credit aid under section 273.1398, subdivision 2, attributable 
326.29  to nondebt transit services. 
326.30     (d) For counties in a judicial district in which the state 
326.31  assumed financing of mandated services costs as defined in 
326.32  section 480.181, subdivision 4, on July 1, 2001, the levy limit 
326.33  base for taxes levied in 2001 is permanently reduced by an 
326.34  amount equal to one-half of the aid reduction under section 
326.35  273.1398, subdivision 4a, paragraph (g). 
326.36     <h>[EFFECTIVE DATE.]</h> This section is effective retroactively 
327.1   for taxes payable in 2002 and 2003. 
327.2      Sec. 13.  Minnesota Statutes 2001 Supplement, section 
327.3   275.74, subdivision 2, is amended to read: 
327.4      Subd. 2.  [AUTHORIZATION FOR SPECIAL LEVIES.] A local 
327.5   governmental unit may request authorization to levy for 
327.6   unreimbursed costs for other natural disasters under section 
327.7   275.70, subdivision 5, clause (6) (7).  The local governmental 
327.8   unit shall submit a request to levy under section 275.70, 
327.9   subdivision 5, clause (6) (7), to the commissioner of revenue by 
327.10  September 30 of the levy year and the request must include 
327.11  information documenting the estimated unreimbursed costs.  The 
327.12  commissioner of revenue may grant levy authority, up to the 
327.13  amount requested based on the documentation submitted.  All 
327.14  decisions of the commissioner are final. 
327.15     <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
327.16  payable in 2002 and 2003. 
327.17     Sec. 14.  Minnesota Statutes 2001 Supplement, section 
327.18  289A.02, subdivision 7, is amended to read: 
327.19     Subd. 7.  [INTERNAL REVENUE CODE.] Unless specifically 
327.20  defined otherwise, "Internal Revenue Code" means the Internal 
327.21  Revenue Code of 1986, as amended through June 15, 2001 February 
327.22  1, 2002. 
327.23     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
327.24  following final enactment. 
327.25     Sec. 15.  Minnesota Statutes 2001 Supplement, section 
327.26  289A.20, subdivision 2, is amended to read: 
327.27     Subd. 2.  [WITHHOLDING FROM WAGES, ENTERTAINER WITHHOLDING, 
327.28  WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, AND 
327.29  WITHHOLDING BY PARTNERSHIPS AND SMALL BUSINESS CORPORATIONS.] 
327.30  (a) A tax required to be deducted and withheld during the 
327.31  quarterly period must be paid on or before the last day of the 
327.32  month following the close of the quarterly period, unless an 
327.33  earlier time for payment is provided.  A tax required to be 
327.34  deducted and withheld from compensation of an entertainer and 
327.35  from a payment to an out-of-state contractor must be paid on or 
327.36  before the date the return for such tax must be filed under 
328.1   section 289A.18, subdivision 2.  Taxes required to be deducted 
328.2   and withheld by partnerships and S corporations must be paid on 
328.3   or before the date the return must be filed under section 
328.4   289A.18, subdivision 2. 
328.5      (b) An employer who, during the previous quarter, withheld 
328.6   more than $1,500 of tax under section 290.92, subdivision 2a or 
328.7   3, or 290.923, subdivision 2, must deposit tax withheld under 
328.8   those sections with the commissioner within the time allowed to 
328.9   deposit the employer's federal withheld employment taxes under 
328.10  Treasury Regulation Code of Federal Regulations, title 26, 
328.11  section 31.6302-1, as amended through December 31, 2001, without 
328.12  regard to the safe harbor or de minimis rules in subparagraph 
328.13  (f) or the one-day rule in subsection (c), clause (3).  
328.14  Taxpayers must submit a copy of their federal notice of deposit 
328.15  status to the commissioner upon request by the commissioner. 
328.16     (c) The commissioner may prescribe by rule other return 
328.17  periods or deposit requirements.  In prescribing the reporting 
328.18  period, the commissioner may classify payors according to the 
328.19  amount of their tax liability and may adopt an appropriate 
328.20  reporting period for the class that the commissioner judges to 
328.21  be consistent with efficient tax collection.  In no event will 
328.22  the duration of the reporting period be more than one year. 
328.23     (d) If less than the correct amount of tax is paid to the 
328.24  commissioner, proper adjustments with respect to both the tax 
328.25  and the amount to be deducted must be made, without interest, in 
328.26  the manner and at the times the commissioner prescribes.  If the 
328.27  underpayment cannot be adjusted, the amount of the underpayment 
328.28  will be assessed and collected in the manner and at the times 
328.29  the commissioner prescribes. 
328.30     (e) If the aggregate amount of the tax withheld during a 
328.31  fiscal year ending June 30 under section 290.92, subdivision 2a 
328.32  or 3, is equal to or exceeds the amounts established for 
328.33  remitting federal withheld taxes pursuant to the regulations 
328.34  promulgated under section 6302(h) of the Internal Revenue Code, 
328.35  the employer must remit each required deposit for wages paid in 
328.36  the subsequent calendar year by electronic means. 
329.1      (f) A third-party bulk filer as defined in section 290.92, 
329.2   subdivision 30, paragraph (a), clause (2), who remits 
329.3   withholding deposits must remit all deposits by electronic means 
329.4   as provided in paragraph (e), regardless of the aggregate amount 
329.5   of tax withheld during a fiscal year for all of the employers.  
329.6      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
329.7   following final enactment. 
329.8      Sec. 16.  Minnesota Statutes 2001 Supplement, section 
329.9   289A.60, subdivision 2, is amended to read: 
329.10     Subd. 2.  [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If 
329.11  a taxpayer fails to make and file a tax return within the time 
329.12  prescribed, including an extension, or fails to file an 
329.13  individual income tax return within six months after the due 
329.14  date, a penalty of five percent of the amount of tax not paid by 
329.15  the end of that period is added to the tax.  
329.16     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
329.17  following final enactment. 
329.18     Sec. 17.  Minnesota Statutes 2001 Supplement, section 
329.19  290.01, subdivision 19, is amended to read: 
329.20     Subd. 19.  [NET INCOME.] The term "net income" means the 
329.21  federal taxable income, as defined in section 63 of the Internal 
329.22  Revenue Code of 1986, as amended through the date named in this 
329.23  subdivision, incorporating any elections made by the taxpayer in 
329.24  accordance with the Internal Revenue Code in determining federal 
329.25  taxable income for federal income tax purposes, and with the 
329.26  modifications provided in subdivisions 19a to 19f. 
329.27     In the case of a regulated investment company or a fund 
329.28  thereof, as defined in section 851(a) or 851(g) of the Internal 
329.29  Revenue Code, federal taxable income means investment company 
329.30  taxable income as defined in section 852(b)(2) of the Internal 
329.31  Revenue Code, except that:  
329.32     (1) the exclusion of net capital gain provided in section 
329.33  852(b)(2)(A) of the Internal Revenue Code does not apply; 
329.34     (2) the deduction for dividends paid under section 
329.35  852(b)(2)(D) of the Internal Revenue Code must be applied by 
329.36  allowing a deduction for capital gain dividends and 
330.1   exempt-interest dividends as defined in sections 852(b)(3)(C) 
330.2   and 852(b)(5) of the Internal Revenue Code; and 
330.3      (3) the deduction for dividends paid must also be applied 
330.4   in the amount of any undistributed capital gains which the 
330.5   regulated investment company elects to have treated as provided 
330.6   in section 852(b)(3)(D) of the Internal Revenue Code.  
330.7      The net income of a real estate investment trust as defined 
330.8   and limited by section 856(a), (b), and (c) of the Internal 
330.9   Revenue Code means the real estate investment trust taxable 
330.10  income as defined in section 857(b)(2) of the Internal Revenue 
330.11  Code.  
330.12     The net income of a designated settlement fund as defined 
330.13  in section 468B(d) of the Internal Revenue Code means the gross 
330.14  income as defined in section 468B(b) of the Internal Revenue 
330.15  Code. 
330.16     The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 
330.17  1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 
330.18  1616, 1617, 1704(l), and 1704(m) of the Small Business Job 
330.19  Protection Act, Public Law Number 104-188, the provisions of 
330.20  Public Law Number 104-117, the provisions of sections 313(a) and 
330.21  (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 1002, 
330.22  1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 1087, 
330.23  1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 1601(f)(5) 
330.24  and (h), and 1604(d)(1) of the Taxpayer Relief Act of 1997, 
330.25  Public Law Number 105-34, the provisions of section 6010 of the 
330.26  Internal Revenue Service Restructuring and Reform Act of 1998, 
330.27  Public Law Number 105-206, the provisions of section 4003 of the 
330.28  Omnibus Consolidated and Emergency Supplemental Appropriations 
330.29  Act, 1999, Public Law Number 105-277, and the provisions of 
330.30  section 318 of the Consolidated Appropriation Act of 2001, 
330.31  Public Law Number 106-554, shall become effective at the time 
330.32  they become effective for federal purposes. 
330.33     The Internal Revenue Code of 1986, as amended through 
330.34  December 31, 1996, shall be in effect for taxable years 
330.35  beginning after December 31, 1996. 
330.36     The provisions of sections 202(a) and (b), 221(a), 225, 
331.1   312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 
331.2   (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 
331.3   1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 
331.4   1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 
331.5   of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 
331.6   the provisions of sections 6004, 6005, 6012, 6013, 6015, 6016, 
331.7   7002, and 7003 of the Internal Revenue Service Restructuring and 
331.8   Reform Act of 1998, Public Law Number 105-206, the provisions of 
331.9   section 3001 of the Omnibus Consolidated and Emergency 
331.10  Supplemental Appropriations Act, 1999, Public Law Number 
331.11  105-277, the provisions of section 3001 of the Miscellaneous 
331.12  Trade and Technical Corrections Act of 1999, Public Law Number 
331.13  106-36, and the provisions of section 316 of the Consolidated 
331.14  Appropriation Act of 2001, Public Law Number 106-554, shall 
331.15  become effective at the time they become effective for federal 
331.16  purposes. 
331.17     The Internal Revenue Code of 1986, as amended through 
331.18  December 31, 1997, shall be in effect for taxable years 
331.19  beginning after December 31, 1997. 
331.20     The provisions of sections 5002, 6009, 6011, and 7001 of 
331.21  the Internal Revenue Service Restructuring and Reform Act of 
331.22  1998, Public Law Number 105-206, the provisions of section 9010 
331.23  of the Transportation Equity Act for the 21st Century, Public 
331.24  Law Number 105-178, the provisions of sections 1004, 4002, and 
331.25  5301 of the Omnibus Consolidation and Emergency Supplemental 
331.26  Appropriations Act, 1999, Public Law Number 105-277, the 
331.27  provision of section 303 of the Ricky Ray Hemophilia Relief Fund 
331.28  Act of 1998, Public Law Number 105-369, the provisions of 
331.29  sections 532, 534, 536, 537, and 538 of the Ticket to Work and 
331.30  Work Incentives Improvement Act of 1999, Public Law Number 
331.31  106-170, the provisions of the Installment Tax Correction Act of 
331.32  2000, Public Law Number 106-573, and the provisions of section 
331.33  309 of the Consolidated Appropriation Act of 2001, Public Law 
331.34  Number 106-554, shall become effective at the time they become 
331.35  effective for federal purposes. 
331.36     The Internal Revenue Code of 1986, as amended through 
332.1   December 31, 1998, shall be in effect for taxable years 
332.2   beginning after December 31, 1998.  
332.3      The provisions of the FSC Repeal and Extraterritorial 
332.4   Income Exclusion Act of 2000, Public Law Number 106-519, shall 
332.5   become effective at the time it became effective for federal 
332.6   purposes. 
332.7      The Internal Revenue Code of 1986, as amended through 
332.8   December 31, 1999, shall be in effect for taxable years 
332.9   beginning after December 31, 1999.  The provisions of sections 
332.10  306 and 401 of the Consolidated Appropriation Act of 2001, 
332.11  Public Law Number 106-554, and the provision of section 
332.12  632(b)(2)(A) of the Economic Growth and Tax Relief 
332.13  Reconciliation Act of 2001, Public Law Number 107-16, shall 
332.14  become effective at the same time it became effective for 
332.15  federal purposes. 
332.16     The Internal Revenue Code of 1986, as amended through 
332.17  December 31, 2000, shall be in effect for taxable years 
332.18  beginning after December 31, 2000.  The provisions of sections 
332.19  659a and 671 of the Economic Growth and Tax Relief 
332.20  Reconciliation Act of 2001, Public Law Number 107-16, and the 
332.21  provisions of sections 104, 105, and 111 of the Victims of 
332.22  Terrorism Tax Relief Act of 2001, Public Law Number 107-134, 
332.23  shall become effective at the same time it became effective for 
332.24  federal purposes. 
332.25     The Internal Revenue Code of 1986, as amended through June 
332.26  15, 2001 February 1, 2002, shall be in effect for taxable years 
332.27  beginning after December 31, 2001. 
332.28     The provisions of sections 101 and 102 of the Victims of 
332.29  Terrorism Tax Relief Act of 2001, Public Law Number 107-134, 
332.30  shall become effective at the same time it becomes effective for 
332.31  federal purposes. 
332.32     Except as otherwise provided, references to the Internal 
332.33  Revenue Code in subdivisions 19a to 19g mean the code in effect 
332.34  for purposes of determining net income for the applicable year. 
332.35     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
332.36  following final enactment. 
333.1      Sec. 18.  Minnesota Statutes 2001 Supplement, section 
333.2   290.01, subdivision 19b, is amended to read: 
333.3      Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
333.4   individuals, estates, and trusts, there shall be subtracted from 
333.5   federal taxable income: 
333.6      (1) interest income on obligations of any authority, 
333.7   commission, or instrumentality of the United States to the 
333.8   extent includable in taxable income for federal income tax 
333.9   purposes but exempt from state income tax under the laws of the 
333.10  United States; 
333.11     (2) if included in federal taxable income, the amount of 
333.12  any overpayment of income tax to Minnesota or to any other 
333.13  state, for any previous taxable year, whether the amount is 
333.14  received as a refund or as a credit to another taxable year's 
333.15  income tax liability; 
333.16     (3) the amount paid to others, less the amount used to 
333.17  claim the credit allowed under section 290.0674, not to exceed 
333.18  $1,625 for each qualifying child in grades kindergarten to 6 and 
333.19  $2,500 for each qualifying child in grades 7 to 12, for tuition, 
333.20  textbooks, and transportation of each qualifying child in 
333.21  attending an elementary or secondary school situated in 
333.22  Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, 
333.23  wherein a resident of this state may legally fulfill the state's 
333.24  compulsory attendance laws, which is not operated for profit, 
333.25  and which adheres to the provisions of the Civil Rights Act of 
333.26  1964 and chapter 363.  For the purposes of this clause, 
333.27  "tuition" includes fees or tuition as defined in section 
333.28  290.0674, subdivision 1, clause (1).  As used in this clause, 
333.29  "textbooks" includes books and other instructional materials and 
333.30  equipment purchased or leased for use in elementary and 
333.31  secondary schools in teaching only those subjects legally and 
333.32  commonly taught in public elementary and secondary schools in 
333.33  this state.  Equipment expenses qualifying for deduction 
333.34  includes expenses as defined and limited in section 290.0674, 
333.35  subdivision 1, clause (3).  "Textbooks" does not include 
333.36  instructional books and materials used in the teaching of 
334.1   religious tenets, doctrines, or worship, the purpose of which is 
334.2   to instill such tenets, doctrines, or worship, nor does it 
334.3   include books or materials for, or transportation to, 
334.4   extracurricular activities including sporting events, musical or 
334.5   dramatic events, speech activities, driver's education, or 
334.6   similar programs.  For purposes of the subtraction provided by 
334.7   this clause, "qualifying child" has the meaning given in section 
334.8   32(c)(3) of the Internal Revenue Code; 
334.9      (4) contributions made in taxable years beginning after 
334.10  December 31, 1981, and before January 1, 1985, to a qualified 
334.11  governmental pension plan, an individual retirement account, 
334.12  simplified employee pension, or qualified plan covering a 
334.13  self-employed person that were included in Minnesota gross 
334.14  income in the taxable year for which the contributions were made 
334.15  but were deducted or were not included in the computation of 
334.16  federal adjusted gross income, less any amount allowed to be 
334.17  subtracted as a distribution under this subdivision or a 
334.18  predecessor provision in taxable years that began before January 
334.19  1, 2000.  This subtraction applies only for taxable years 
334.20  beginning after December 31, 1999, and before January 1, 2001.  
334.21  If an individual's subtraction under this clause exceeds the 
334.22  individual's taxable income, the excess may be carried forward 
334.23  to taxable years beginning after December 31, 2000, and before 
334.24  January 1, 2002; 
334.25     (5) income as provided under section 290.0802; 
334.26     (6) (5) to the extent included in federal adjusted gross 
334.27  income, income realized on disposition of property exempt from 
334.28  tax under section 290.491; 
334.29     (7) (6) to the extent not deducted in determining federal 
334.30  taxable income or used to claim the long-term care insurance 
334.31  credit under section 290.0672, the amount paid for health 
334.32  insurance of self-employed individuals as determined under 
334.33  section 162(l) of the Internal Revenue Code, except that the 
334.34  percent limit does not apply.  If the individual deducted 
334.35  insurance payments under section 213 of the Internal Revenue 
334.36  Code of 1986, the subtraction under this clause must be reduced 
335.1   by the lesser of: 
335.2      (i) the total itemized deductions allowed under section 
335.3   63(d) of the Internal Revenue Code, less state, local, and 
335.4   foreign income taxes deductible under section 164 of the 
335.5   Internal Revenue Code and the standard deduction under section 
335.6   63(c) of the Internal Revenue Code; or 
335.7      (ii) the lesser of (A) the amount of insurance qualifying 
335.8   as "medical care" under section 213(d) of the Internal Revenue 
335.9   Code to the extent not deducted under section 162(1) of the 
335.10  Internal Revenue Code or excluded from income or (B) the total 
335.11  amount deductible for medical care under section 213(a); 
335.12     (8) (7) the exemption amount allowed under Laws 1995, 
335.13  chapter 255, article 3, section 2, subdivision 3; 
335.14     (9) (8) to the extent included in federal taxable income, 
335.15  postservice benefits for youth community service under section 
335.16  124D.42 for volunteer service under United States Code, title 
335.17  42, sections 12601 to 12604; 
335.18     (10) (9) to the extent not deducted in determining federal 
335.19  taxable income by an individual who does not itemize deductions 
335.20  for federal income tax purposes for the taxable year, an amount 
335.21  equal to 50 percent of the excess of charitable contributions 
335.22  allowable as a deduction for the taxable year under section 
335.23  170(a) of the Internal Revenue Code over $500; 
335.24     (11) (10) for taxable years beginning before January 1, 
335.25  2008, the amount of the federal small ethanol producer credit 
335.26  allowed under section 40(a)(3) of the Internal Revenue Code 
335.27  which is included in gross income under section 87 of the 
335.28  Internal Revenue Code; and 
335.29     (12) (11) for individuals who are allowed a federal foreign 
335.30  tax credit for taxes that do not qualify for a credit under 
335.31  section 290.06, subdivision 22, an amount equal to the carryover 
335.32  of subnational foreign taxes for the taxable year, but not to 
335.33  exceed the total subnational foreign taxes reported in claiming 
335.34  the foreign tax credit.  For purposes of this clause, "federal 
335.35  foreign tax credit" means the credit allowed under section 27 of 
335.36  the Internal Revenue Code, and "carryover of subnational foreign 
336.1   taxes" equals the carryover allowed under section 904(c) of the 
336.2   Internal Revenue Code minus national level foreign taxes to the 
336.3   extent they exceed the federal foreign tax credit. 
336.4      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
336.5   following final enactment. 
336.6      Sec. 19.  Minnesota Statutes 2001 Supplement, section 
336.7   290.01, subdivision 31, is amended to read: 
336.8      Subd. 31.  [INTERNAL REVENUE CODE.] Unless specifically 
336.9   defined otherwise, "Internal Revenue Code" means the Internal 
336.10  Revenue Code of 1986, as amended through June 15, 2001 February 
336.11  1, 2002. 
336.12     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
336.13  following final enactment. 
336.14     Sec. 20.  Minnesota Statutes 2000, section 290.067, 
336.15  subdivision 1, is amended to read: 
336.16     Subdivision 1.  [AMOUNT OF CREDIT.] (a) A taxpayer may take 
336.17  as a credit against the tax due from the taxpayer and a spouse, 
336.18  if any, under this chapter an amount equal to the dependent care 
336.19  credit for which the taxpayer is eligible pursuant to the 
336.20  provisions of section 21 of the Internal Revenue Code subject to 
336.21  the limitations provided in subdivision 2 except that in 
336.22  determining whether the child qualified as a dependent, income 
336.23  received as a Minnesota family investment program grant or 
336.24  allowance to or on behalf of the child must not be taken into 
336.25  account in determining whether the child received more than half 
336.26  of the child's support from the taxpayer, and the provisions of 
336.27  section 32(b)(1)(D) of the Internal Revenue Code do not apply. 
336.28     (b) If a child who has not attained the age of six years at 
336.29  the close of the taxable year is cared for at a licensed family 
336.30  day care home operated by the child's parent, the taxpayer is 
336.31  deemed to have paid employment-related expenses.  If the child 
336.32  is 16 months old or younger at the close of the taxable year, 
336.33  the amount of expenses deemed to have been paid equals the 
336.34  maximum limit for one qualified individual under section 21(c) 
336.35  and (d) of the Internal Revenue Code.  If the child is older 
336.36  than 16 months of age but has not attained the age of six years 
337.1   at the close of the taxable year, the amount of expenses deemed 
337.2   to have been paid equals the amount the licensee would charge 
337.3   for the care of a child of the same age for the same number of 
337.4   hours of care.  
337.5      (c) If a married couple: 
337.6      (1) has a child who has not attained the age of one year at 
337.7   the close of the taxable year; 
337.8      (2) files a joint tax return for the taxable year; and 
337.9      (3) does not participate in a dependent care assistance 
337.10  program as defined in section 129 of the Internal Revenue Code, 
337.11  in lieu of the actual employment related expenses paid for that 
337.12  child under paragraph (a) or the deemed amount under paragraph 
337.13  (b), the lesser of (i) the combined earned income of the couple 
337.14  or (ii) $2,400 the amount of the maximum limit for one qualified 
337.15  individual under section 21(c) and (d) of the Internal Revenue 
337.16  Code will be deemed to be the employment related expense paid 
337.17  for that child.  The earned income limitation of section 21(d) 
337.18  of the Internal Revenue Code shall not apply to this deemed 
337.19  amount.  These deemed amounts apply regardless of whether any 
337.20  employment-related expenses have been paid.  
337.21     (d) If the taxpayer is not required and does not file a 
337.22  federal individual income tax return for the tax year, no credit 
337.23  is allowed for any amount paid to any person unless: 
337.24     (1) the name, address, and taxpayer identification number 
337.25  of the person are included on the return claiming the credit; or 
337.26     (2) if the person is an organization described in section 
337.27  501(c)(3) of the Internal Revenue Code and exempt from tax under 
337.28  section 501(a) of the Internal Revenue Code, the name and 
337.29  address of the person are included on the return claiming the 
337.30  credit.  
337.31  In the case of a failure to provide the information required 
337.32  under the preceding sentence, the preceding sentence does not 
337.33  apply if it is shown that the taxpayer exercised due diligence 
337.34  in attempting to provide the information required. 
337.35     In the case of a nonresident, part-year resident, or a 
337.36  person who has earned income not subject to tax under this 
338.1   chapter, the credit determined under section 21 of the Internal 
338.2   Revenue Code must be allocated based on the ratio by which the 
338.3   earned income of the claimant and the claimant's spouse from 
338.4   Minnesota sources bears to the total earned income of the 
338.5   claimant and the claimant's spouse. 
338.6      <h>[EFFECTIVE DATE.]</h> This section is effective for tax years 
338.7   beginning after December 31, 2002. 
338.8      Sec. 21.  Minnesota Statutes 2000, section 290.067, 
338.9   subdivision 2a, is amended to read: 
338.10     Subd. 2a.  [INCOME.] (a) For purposes of this section, 
338.11  "income" means the sum of the following: 
338.12     (1) federal adjusted gross income as defined in section 62 
338.13  of the Internal Revenue Code; and 
338.14     (2) the sum of the following amounts to the extent not 
338.15  included in clause (1): 
338.16     (i) all nontaxable income; 
338.17     (ii) the amount of a passive activity loss that is not 
338.18  disallowed as a result of section 469, paragraph (i) or (m) of 
338.19  the Internal Revenue Code and the amount of passive activity 
338.20  loss carryover allowed under section 469(b) of the Internal 
338.21  Revenue Code; 
338.22     (iii) an amount equal to the total of any discharge of 
338.23  qualified farm indebtedness of a solvent individual excluded 
338.24  from gross income under section 108(g) of the Internal Revenue 
338.25  Code; 
338.26     (iv) cash public assistance and relief; 
338.27     (v) any pension or annuity (including railroad retirement 
338.28  benefits, all payments received under the federal Social 
338.29  Security Act, supplemental security income, and veterans 
338.30  benefits), which was not exclusively funded by the claimant or 
338.31  spouse, or which was funded exclusively by the claimant or 
338.32  spouse and which funding payments were excluded from federal 
338.33  adjusted gross income in the years when the payments were made; 
338.34     (vi) interest received from the federal or a state 
338.35  government or any instrumentality or political subdivision 
338.36  thereof; 
339.1      (vii) workers' compensation; 
339.2      (viii) nontaxable strike benefits; 
339.3      (ix) the gross amounts of payments received in the nature 
339.4   of disability income or sick pay as a result of accident, 
339.5   sickness, or other disability, whether funded through insurance 
339.6   or otherwise; 
339.7      (x) a lump sum distribution under section 402(e)(3) of the 
339.8   Internal Revenue Code; 
339.9      (xi) contributions made by the claimant to an individual 
339.10  retirement account, including a qualified voluntary employee 
339.11  contribution; simplified employee pension plan; self-employed 
339.12  retirement plan; cash or deferred arrangement plan under section 
339.13  401(k) of the Internal Revenue Code; or deferred compensation 
339.14  plan under section 457 of the Internal Revenue Code; and 
339.15     (xii) nontaxable scholarship or fellowship grants. 
339.16     In the case of an individual who files an income tax return 
339.17  on a fiscal year basis, the term "federal adjusted gross income" 
339.18  means federal adjusted gross income reflected in the fiscal year 
339.19  ending in the next calendar year.  Federal adjusted gross income 
339.20  may not be reduced by the amount of a net operating loss 
339.21  carryback or carryforward or a capital loss carryback or 
339.22  carryforward allowed for the year. 
339.23     (b) "Income" does not include: 
339.24     (1) amounts excluded pursuant to the Internal Revenue Code, 
339.25  sections 101(a) and 102; 
339.26     (2) amounts of any pension or annuity that were exclusively 
339.27  funded by the claimant or spouse if the funding payments were 
339.28  not excluded from federal adjusted gross income in the years 
339.29  when the payments were made; 
339.30     (3) surplus food or other relief in kind supplied by a 
339.31  governmental agency; 
339.32     (4) relief granted under chapter 290A; and 
339.33     (5) child support payments received under a temporary or 
339.34  final decree of dissolution or legal separation; and 
339.35     (6) restitution payments received by eligible individuals 
339.36  and excludible interest as defined in section 803 of the 
340.1   Economic Growth and Tax Relief Reconciliation Act of 2001, 
340.2   Public Law Number 107-16. 
340.3      <h>[EFFECTIVE DATE.]</h> This section is effective for tax years 
340.4   beginning after December 31, 2000. 
340.5      Sec. 22.  Minnesota Statutes 2001 Supplement, section 
340.6   290.0675, subdivision 1, is amended to read: 
340.7      Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
340.8   section the following terms have the meanings given. 
340.9      (b) "Earned income" means the sum of the following, to the 
340.10  extent included in Minnesota taxable income: 
340.11     (1) earned income as defined in section 32(c)(2) of the 
340.12  Internal Revenue Code; 
340.13     (2) income received from a retirement pension, 
340.14  profit-sharing, stock bonus, or annuity plan; and 
340.15     (3) social security benefits as defined in section 86(d)(1) 
340.16  of the Internal Revenue Code. 
340.17     (c) "Taxable income" means net income as defined in section 
340.18  290.01, subdivision 19. 
340.19     (d) "Earned income of lesser-earning spouse" means the 
340.20  earned income of the spouse with the lesser amount of earned 
340.21  income as defined in paragraph (b) for the taxable year minus 
340.22  the sum of (i) the amount for one exemption under section 151(d) 
340.23  of the Internal Revenue Code and (ii) one-half the amount of the 
340.24  standard deduction under section 63(c)(2)(A) and (4) of the 
340.25  Internal Revenue Code.  
340.26     <h>[EFFECTIVE DATE.]</h> This section is effective for tax years 
340.27  beginning after December 31, 2000. 
340.28     Sec. 23.  Minnesota Statutes 2001 Supplement, section 
340.29  290.0675, subdivision 3, is amended to read: 
340.30     Subd. 3.  [CREDIT AMOUNT.] The credit amount is the 
340.31  difference between the tax on the couple's joint Minnesota 
340.32  taxable income under the rates in section 290.06, subdivision 
340.33  2c, paragraph (a), and the sum of the tax under the rates of 
340.34  section 290.06, subdivision 2c, paragraph (b), on the earned 
340.35  income of the lesser-earning spouse, and the tax under the rates 
340.36  of section 290.06, subdivision 2c, paragraph (b), on the 
341.1   couple's joint Minnesota taxable income, minus the earned income 
341.2   of the lesser-earning spouse. 
341.3      For taxable years beginning after December 31, 2001, The 
341.4   commissioner of revenue shall prepare and make available to 
341.5   taxpayers a comprehensive table showing the credit under this 
341.6   section at brackets of earnings of the lesser-earning spouse and 
341.7   joint taxable income.  The brackets of earnings shall not be 
341.8   more than $2,000. 
341.9      For taxable years beginning after December 31, 2002, the 
341.10  commissioner shall update the table as necessary to provide a 
341.11  credit that reflects the relationship between the marginal tax 
341.12  rates imposed under section 290.06, subdivision 2c. 
341.13     <h>[EFFECTIVE DATE.]</h> This section is effective for tax years 
341.14  beginning after December 31, 2000. 
341.15     Sec. 24.  Minnesota Statutes 2001 Supplement, section 
341.16  290.091, subdivision 2, is amended to read: 
341.17     Subd. 2.  [DEFINITIONS.] For purposes of the tax imposed by 
341.18  this section, the following terms have the meanings given: 
341.19     (a) "Alternative minimum taxable income" means the sum of 
341.20  the following for the taxable year: 
341.21     (1) the taxpayer's federal alternative minimum taxable 
341.22  income as defined in section 55(b)(2) of the Internal Revenue 
341.23  Code; 
341.24     (2) the taxpayer's itemized deductions allowed in computing 
341.25  federal alternative minimum taxable income, but excluding: 
341.26     (i) the Minnesota charitable contribution deduction; 
341.27     (ii) the medical expense deduction; 
341.28     (iii) the casualty, theft, and disaster loss deduction; and 
341.29     (iv) the impairment-related work expenses of a disabled 
341.30  person; and 
341.31     (v) holocaust victims' settlement payments to the extent 
341.32  allowed under section 290.01, subdivision 19b; 
341.33     (3) for depletion allowances computed under section 613A(c) 
341.34  of the Internal Revenue Code, with respect to each property (as 
341.35  defined in section 614 of the Internal Revenue Code), to the 
341.36  extent not included in federal alternative minimum taxable 
342.1   income, the excess of the deduction for depletion allowable 
342.2   under section 611 of the Internal Revenue Code for the taxable 
342.3   year over the adjusted basis of the property at the end of the 
342.4   taxable year (determined without regard to the depletion 
342.5   deduction for the taxable year); 
342.6      (4) to the extent not included in federal alternative 
342.7   minimum taxable income, the amount of the tax preference for 
342.8   intangible drilling cost under section 57(a)(2) of the Internal 
342.9   Revenue Code determined without regard to subparagraph (E); and 
342.10     (5) to the extent not included in federal alternative 
342.11  minimum taxable income, the amount of interest income as 
342.12  provided by section 290.01, subdivision 19a, clause (1); 
342.13     less the sum of the amounts determined under the following: 
342.14     (1) interest income as defined in section 290.01, 
342.15  subdivision 19b, clause (1); 
342.16     (2) an overpayment of state income tax as provided by 
342.17  section 290.01, subdivision 19b, clause (2), to the extent 
342.18  included in federal alternative minimum taxable income; and 
342.19     (3) the amount of investment interest paid or accrued 
342.20  within the taxable year on indebtedness to the extent that the 
342.21  amount does not exceed net investment income, as defined in 
342.22  section 163(d)(4) of the Internal Revenue Code.  Interest does 
342.23  not include amounts deducted in computing federal adjusted gross 
342.24  income; and 
342.25     (4) amounts subtracted from federal taxable income as 
342.26  provided by section 290.01, subdivision 19b, clause (4). 
342.27     In the case of an estate or trust, alternative minimum 
342.28  taxable income must be computed as provided in section 59(c) of 
342.29  the Internal Revenue Code. 
342.30     (b) "Investment interest" means investment interest as 
342.31  defined in section 163(d)(3) of the Internal Revenue Code. 
342.32     (c) "Tentative minimum tax" equals 6.4 percent of 
342.33  alternative minimum taxable income after subtracting the 
342.34  exemption amount determined under subdivision 3. 
342.35     (d) "Regular tax" means the tax that would be imposed under 
342.36  this chapter (without regard to this section and section 
343.1   290.032), reduced by the sum of the nonrefundable credits 
343.2   allowed under this chapter.  
343.3      (e) "Net minimum tax" means the minimum tax imposed by this 
343.4   section. 
343.5      (f) "Minnesota charitable contribution deduction" means a 
343.6   charitable contribution deduction under section 170 of the 
343.7   Internal Revenue Code to or for the use of an entity described 
343.8   in Minnesota Statutes 2000, section 290.21, subdivision 3, 
343.9   clauses (a) to (e).  When the federal deduction for charitable 
343.10  contributions is limited under section 170(b) of the Internal 
343.11  Revenue Code, the allowable contributions in the year of 
343.12  contribution are deemed to be first contributions to entities 
343.13  described in Minnesota Statutes 2000, section 290.21, 
343.14  subdivision 3, clauses (a) to (e). 
343.15     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
343.16  following final enactment. 
343.17     Sec. 25.  Minnesota Statutes 2001 Supplement, section 
343.18  290.0921, subdivision 2, is amended to read: 
343.19     Subd. 2.  [DEFINITIONS.] (a) For purposes of this section, 
343.20  the following terms have the meanings given them. 
343.21     (b) "Alternative minimum taxable net income" is alternative 
343.22  minimum taxable income, 
343.23     (1) less the exemption amount, and 
343.24     (2) apportioned or allocated to Minnesota under section 
343.25  290.17, 290.191, or 290.20. 
343.26     (c) The "exemption amount" is $40,000, reduced, but not 
343.27  below zero, by 25 percent of the excess of alternative minimum 
343.28  taxable income over $150,000. 
343.29     (d) "Minnesota alternative minimum taxable income" is 
343.30  alternative minimum taxable net income, less the deductions for 
343.31  alternative tax net operating loss under subdivision 4; 
343.32  charitable contributions under subdivision 5; and dividends 
343.33  received under subdivision 6.  The sum of the deductions under 
343.34  this paragraph may not exceed 90 percent of alternative minimum 
343.35  taxable net income.  This limitation does not apply to a 
343.36  deduction for dividends paid to or received from a corporation 
344.1   which is subject to tax under section 290.36 and which is a 
344.2   member of an affiliated group of corporations as defined by the 
344.3   Internal Revenue Code. 
344.4      <h>[EFFECTIVE DATE.]</h> This section is effective for taxable 
344.5   years beginning after December 31, 2001. 
344.6      Sec. 26.  Minnesota Statutes 2000, section 290.17, 
344.7   subdivision 2, is amended to read: 
344.8      Subd. 2.  [INCOME NOT DERIVED FROM CONDUCT OF A TRADE OR 
344.9   BUSINESS.] The income of a taxpayer subject to the allocation 
344.10  rules that is not derived from the conduct of a trade or 
344.11  business must be assigned in accordance with paragraphs (a) to 
344.12  (f):  
344.13     (a)(1) Subject to paragraphs (a)(2), (a)(3), and (a)(4), 
344.14  income from wages as defined in section 3401(a) and (f) of the 
344.15  Internal Revenue Code is assigned to this state if, and to the 
344.16  extent that, the work of the employee is performed within it; 
344.17  all other income from such sources is treated as income from 
344.18  sources without this state.  
344.19     Severance pay shall be considered income from labor or 
344.20  personal or professional services. 
344.21     (2) In the case of an individual who is a nonresident of 
344.22  Minnesota and who is an athlete or entertainer, income from 
344.23  compensation for labor or personal services performed within 
344.24  this state shall be determined in the following manner:  
344.25     (i) The amount of income to be assigned to Minnesota for an 
344.26  individual who is a nonresident salaried athletic team employee 
344.27  shall be determined by using a fraction in which the denominator 
344.28  contains the total number of days in which the individual is 
344.29  under a duty to perform for the employer, and the numerator is 
344.30  the total number of those days spent in Minnesota.  For purposes 
344.31  of this paragraph, off-season training activities, unless 
344.32  conducted at the team's facilities as part of a team imposed 
344.33  program, are not included in the total number of duty days.  
344.34  Bonuses earned as a result of play during the regular season or 
344.35  for participation in championship, play-off, or all-star games 
344.36  must be allocated under the formula.  Signing bonuses are not 
345.1   subject to allocation under the formula if they are not 
345.2   conditional on playing any games for the team, are payable 
345.3   separately from any other compensation, and are nonrefundable; 
345.4   and 
345.5      (ii) The amount of income to be assigned to Minnesota for 
345.6   an individual who is a nonresident, and who is an athlete or 
345.7   entertainer not listed in clause (i), for that person's athletic 
345.8   or entertainment performance in Minnesota shall be determined by 
345.9   assigning to this state all income from performances or athletic 
345.10  contests in this state.  
345.11     (3) For purposes of this section, amounts received by a 
345.12  nonresident as "retirement income" as defined in section (b)(1) 
345.13  of the State Income Taxation of Pension Income Act, Public Law 
345.14  Number 104-95, are not considered income derived from carrying 
345.15  on a trade or business or from wages or other compensation for 
345.16  work an employee performed in Minnesota, and are not taxable 
345.17  under this chapter.  
345.18     (4) Wages, otherwise assigned to this state under clause 
345.19  (1) and not qualifying under clause (3), are not taxable under 
345.20  this chapter if the following conditions are met: 
345.21     (i) the recipient was not a resident of this state for any 
345.22  part of the taxable year in which the wages were received; and 
345.23     (ii) the wages are for work performed while the recipient 
345.24  was a resident of this state. 
345.25     (b) Income or gains from tangible property located in this 
345.26  state that is not employed in the business of the recipient of 
345.27  the income or gains must be assigned to this state. 
345.28     (c) Income or gains from intangible personal property not 
345.29  employed in the business of the recipient of the income or gains 
345.30  must be assigned to this state if the recipient of the income or 
345.31  gains is a resident of this state or is a resident trust or 
345.32  estate.  
345.33     Gain on the sale of a partnership interest is allocable to 
345.34  this state in the ratio of the original cost of partnership 
345.35  tangible property in this state to the original cost of 
345.36  partnership tangible property everywhere, determined at the time 
346.1   of the sale.  If more than 50 percent of the value of the 
346.2   partnership's assets consists of intangibles, gain or loss from 
346.3   the sale of the partnership interest is allocated to this state 
346.4   in accordance with the sales factor of the partnership for its 
346.5   first full tax period immediately preceding the tax period of 
346.6   the partnership during which the partnership interest was sold. 
346.7      Gain on the sale of goodwill or income from a covenant not 
346.8   to compete that is connected with a business operating all or 
346.9   partially in Minnesota is allocated to this state to the extent 
346.10  that the income from the business in the year preceding the year 
346.11  of sale was assignable to Minnesota under subdivision 3.  
346.12     When an employer pays an employee for a covenant not to 
346.13  compete, the income allocated to this state is in the ratio of 
346.14  the employee's service in Minnesota in the calendar year 
346.15  preceding leaving the employment of the employer over the total 
346.16  services performed by the employee for the employer in that year.
346.17     (d) Income from winnings on Minnesota pari-mutuel betting 
346.18  tickets, the Minnesota state lottery, and lawful gambling as 
346.19  defined in section 349.12, subdivision 24, conducted within the 
346.20  boundaries of the state of Minnesota shall be assigned to this 
346.21  state a bet made by an individual while in Minnesota is assigned 
346.22  to this state.  In this paragraph, "bet" has the meaning given 
346.23  in section 609.75, subdivision 2, as limited by section 609.75, 
346.24  subdivision 3, clauses (1), (2), and (3).  
346.25     (e) All items of gross income not covered in paragraphs (a) 
346.26  to (d) and not part of the taxpayer's income from a trade or 
346.27  business shall be assigned to the taxpayer's domicile. 
346.28     (f) For the purposes of this section, working as an 
346.29  employee shall not be considered to be conducting a trade or 
346.30  business. 
346.31     <h>[EFFECTIVE DATE.]</h> This section is effective for tax years 
346.32  beginning after December 31, 2001. 
346.33     Sec. 27.  Minnesota Statutes 2000, section 290.17, 
346.34  subdivision 3, is amended to read: 
346.35     Subd. 3.  [TRADE OR BUSINESS INCOME; GENERAL RULE.] All 
346.36  income of a trade or business is subject to apportionment except 
347.1   nonbusiness income.  Income derived from carrying on a trade or 
347.2   business must be assigned to this state if the trade or business 
347.3   is conducted wholly within this state, assigned outside this 
347.4   state if conducted wholly without this state and apportioned 
347.5   between this state and other states and countries under this 
347.6   subdivision if conducted partly within and partly without this 
347.7   state.  For purposes of determining whether a trade or business 
347.8   is carried on exclusively within or without this state:  
347.9      (a) A trade or business physically located exclusively 
347.10  within this state is nevertheless carried on partly within and 
347.11  partly without this state if any of the principles set forth in 
347.12  section 290.191 for the allocation of sales or receipts within 
347.13  or without this state when applied to the taxpayer's situation 
347.14  result in the allocation of any sales or receipts without this 
347.15  state.  
347.16     (b) A trade or business physically located exclusively 
347.17  without this state is nevertheless carried on partly within and 
347.18  partly without this state if any of the principles set forth in 
347.19  section 290.191 for the allocation of sales or receipts within 
347.20  or without this state when applied to the taxpayer's situation 
347.21  result in the allocation of any sales or receipts without within 
347.22  this state.  The jurisdiction to tax such a business under this 
347.23  chapter must be determined in accordance with sections 290.014 
347.24  and 290.015. 
347.25     <h>[EFFECTIVE DATE.]</h> This section is effective for tax years 
347.26  beginning after December 31, 2001. 
347.27     Sec. 28.  Minnesota Statutes 2000, section 290A.03, 
347.28  subdivision 3, is amended to read: 
347.29     Subd. 3.  [INCOME.] (1) "Income" means the sum of the 
347.30  following:  
347.31     (a) federal adjusted gross income as defined in the 
347.32  Internal Revenue Code; and 
347.33     (b) the sum of the following amounts to the extent not 
347.34  included in clause (a):  
347.35     (i) all nontaxable income; 
347.36     (ii) the amount of a passive activity loss that is not 
348.1   disallowed as a result of section 469, paragraph (i) or (m) of 
348.2   the Internal Revenue Code and the amount of passive activity 
348.3   loss carryover allowed under section 469(b) of the Internal 
348.4   Revenue Code; 
348.5      (iii) an amount equal to the total of any discharge of 
348.6   qualified farm indebtedness of a solvent individual excluded 
348.7   from gross income under section 108(g) of the Internal Revenue 
348.8   Code; 
348.9      (iv) cash public assistance and relief; 
348.10     (v) any pension or annuity (including railroad retirement 
348.11  benefits, all payments received under the federal Social 
348.12  Security Act, supplemental security income, and veterans 
348.13  benefits), which was not exclusively funded by the claimant or 
348.14  spouse, or which was funded exclusively by the claimant or 
348.15  spouse and which funding payments were excluded from federal 
348.16  adjusted gross income in the years when the payments were made; 
348.17     (vi) interest received from the federal or a state 
348.18  government or any instrumentality or political subdivision 
348.19  thereof; 
348.20     (vii) workers' compensation; 
348.21     (viii) nontaxable strike benefits; 
348.22     (ix) the gross amounts of payments received in the nature 
348.23  of disability income or sick pay as a result of accident, 
348.24  sickness, or other disability, whether funded through insurance 
348.25  or otherwise; 
348.26     (x) a lump sum distribution under section 402(e)(3) of the 
348.27  Internal Revenue Code; 
348.28     (xi) contributions made by the claimant to an individual 
348.29  retirement account, including a qualified voluntary employee 
348.30  contribution; simplified employee pension plan; self-employed 
348.31  retirement plan; cash or deferred arrangement plan under section 
348.32  401(k) of the Internal Revenue Code; or deferred compensation 
348.33  plan under section 457 of the Internal Revenue Code; and 
348.34     (xii) nontaxable scholarship or fellowship grants.  
348.35     In the case of an individual who files an income tax return 
348.36  on a fiscal year basis, the term "federal adjusted gross income" 
349.1   shall mean federal adjusted gross income reflected in the fiscal 
349.2   year ending in the calendar year.  Federal adjusted gross income 
349.3   shall not be reduced by the amount of a net operating loss 
349.4   carryback or carryforward or a capital loss carryback or 
349.5   carryforward allowed for the year.  
349.6      (2) "Income" does not include:  
349.7      (a) amounts excluded pursuant to the Internal Revenue Code, 
349.8   sections 101(a) and 102; 
349.9      (b) amounts of any pension or annuity which was exclusively 
349.10  funded by the claimant or spouse and which funding payments were 
349.11  not excluded from federal adjusted gross income in the years 
349.12  when the payments were made; 
349.13     (c) surplus food or other relief in kind supplied by a 
349.14  governmental agency; 
349.15     (d) relief granted under this chapter; 
349.16     (e) child support payments received under a temporary or 
349.17  final decree of dissolution or legal separation; or 
349.18     (f) holocaust settlement payments as defined in section 
349.19  290.01, subdivision 32 restitution payments received by eligible 
349.20  individuals and excludible interest as defined in section 803 of 
349.21  the Economic Growth and Tax Relief Reconciliation Act of 2001, 
349.22  Public Law Number 107-16.  
349.23     (3) The sum of the following amounts may be subtracted from 
349.24  income:  
349.25     (a) for the claimant's first dependent, the exemption 
349.26  amount multiplied by 1.4; 
349.27     (b) for the claimant's second dependent, the exemption 
349.28  amount multiplied by 1.3; 
349.29     (c) for the claimant's third dependent, the exemption 
349.30  amount multiplied by 1.2; 
349.31     (d) for the claimant's fourth dependent, the exemption 
349.32  amount multiplied by 1.1; 
349.33     (e) for the claimant's fifth dependent, the exemption 
349.34  amount; and 
349.35     (f) if the claimant or claimant's spouse was disabled or 
349.36  attained the age of 65 on or before December 31 of the year for 
350.1   which the taxes were levied or rent paid, the exemption amount.  
350.2      For purposes of this subdivision, the "exemption amount" 
350.3   means the exemption amount under section 151(d) of the Internal 
350.4   Revenue Code for the taxable year for which the income is 
350.5   reported.  
350.6      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
350.7   following final enactment. 
350.8      Sec. 29.  Minnesota Statutes 2001 Supplement, section 
350.9   290A.03, subdivision 15, is amended to read: 
350.10     Subd. 15.  [INTERNAL REVENUE CODE.] "Internal Revenue Code" 
350.11  means the Internal Revenue Code of 1986, as amended through June 
350.12  15, 2001 February 1, 2002. 
350.13     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
350.14  following final enactment. 
350.15     Sec. 30.  Minnesota Statutes 2001 Supplement, section 
350.16  290A.04, subdivision 2h, is amended to read: 
350.17     Subd. 2h.  [ADDITIONAL REFUND.] (a) Beginning with gross 
350.18  property taxes payable in 2003, If the gross property taxes 
350.19  payable on a homestead increase more than 12 percent over the 
350.20  property taxes payable in the prior year on the same property 
350.21  that is owned and occupied by the same owner on January 2 of 
350.22  both years, and the amount of that increase is $100 or more, a 
350.23  claimant who is a homeowner shall be allowed an additional 
350.24  refund equal to 60 percent of the amount of the increase over 
350.25  the greater of 12 percent of the prior year's property taxes 
350.26  payable or $100.  This subdivision shall not apply to any 
350.27  increase in the gross property taxes payable attributable to 
350.28  improvements made to the homestead after the assessment date for 
350.29  the prior year's taxes.  This subdivision shall not apply to any 
350.30  increase in the gross property taxes payable attributable to the 
350.31  termination of valuation exclusions under section 273.11, 
350.32  subdivision 16. 
350.33     The maximum refund allowed under this subdivision is $1,000.
350.34     (b) For purposes of this subdivision "gross property taxes 
350.35  payable" means property taxes payable determined without regard 
350.36  to the refund allowed under this subdivision. 
351.1      (c) In addition to the other proofs required by this 
351.2   chapter, each claimant under this subdivision shall file with 
351.3   the property tax refund return a copy of the property tax 
351.4   statement for taxes payable in the preceding year or other 
351.5   documents required by the commissioner. 
351.6      (d) Upon request, the appropriate county official shall 
351.7   make available the names and addresses of the property taxpayers 
351.8   who may be eligible for the additional property tax refund under 
351.9   this section.  The information shall be provided on a magnetic 
351.10  computer disk.  The county may recover its costs by charging the 
351.11  person requesting the information the reasonable cost for 
351.12  preparing the data.  The information may not be used for any 
351.13  purpose other than for notifying the homeowner of potential 
351.14  eligibility and assisting the homeowner, without charge, in 
351.15  preparing a refund claim. 
351.16     <h>[EFFECTIVE DATE.]</h> This section is effective beginning with 
351.17  refunds based on gross property taxes payable in 2002. 
351.18     Sec. 31.  Minnesota Statutes 2001 Supplement, section 
351.19  295.60, is amended by adding a subdivision to read: 
351.20     Subd. 1a.  [USE TAX; CREDIT FOR TAXES PAID.] (a) A person 
351.21  that receives fur clothing for use or storage in Minnesota, 
351.22  other than from a furrier that paid the tax under subdivision 1, 
351.23  is subject to tax at the rate imposed under subdivision 1.  
351.24  Liability for the tax is incurred when the person has possession 
351.25  of the fur clothing in Minnesota.  The tax must be remitted to 
351.26  the commissioner in the manner prescribed by subdivision 3. 
351.27     (b) A person that has paid taxes to another jurisdiction on 
351.28  the same transaction and is subject to tax under this section is 
351.29  entitled to a credit for the tax legally due and paid to another 
351.30  jurisdiction to the extent of the lesser of (1) the tax actually 
351.31  paid to the other jurisdiction, or (2) the amount of tax imposed 
351.32  by Minnesota on the transaction subject to tax in the other 
351.33  jurisdiction. 
351.34     <h>[EFFECTIVE DATE.]</h> This section is effective for fur 
351.35  clothing purchased and brought into Minnesota on or after 
351.36  January 1, 2002. 
352.1      Sec. 32.  Minnesota Statutes 2001 Supplement, section 
352.2   295.60, is amended by adding a subdivision to read: 
352.3      Subd. 1b.  [TAX COLLECTION REQUIRED.] A furrier with nexus 
352.4   in Minnesota, who is not subject to tax under subdivision 1, is 
352.5   required to collect the tax imposed under subdivision 1a from 
352.6   the purchaser of the clothing made from fur and give the 
352.7   purchaser a receipt for the tax paid.  The tax collected must be 
352.8   remitted to the commissioner in the manner prescribed by 
352.9   subdivision 3. 
352.10     <h>[EFFECTIVE DATE.]</h> This section is effective for fur 
352.11  clothing purchased and brought into Minnesota on or after 
352.12  January 1, 2002. 
352.13     Sec. 33.  Minnesota Statutes 2001 Supplement, section 
352.14  295.60, is amended by adding a subdivision to read: 
352.15     Subd. 1c.  [TAXES PAID TO ANOTHER JURISDICTION; CREDIT.] A 
352.16  furrier that has paid taxes to another jurisdiction measured by 
352.17  gross revenue and is subject to tax under this section on the 
352.18  same gross revenues is entitled to a credit for the tax legally 
352.19  due and paid to another jurisdiction to the extent of the lesser 
352.20  of (1) the tax actually paid to the other jurisdiction, or (2) 
352.21  the amount of tax imposed by Minnesota on the gross revenues 
352.22  subject to tax in the other taxing jurisdictions. 
352.23     <h>[EFFECTIVE DATE.]</h> This section is effective for gross 
352.24  revenues received on or after January 1, 2002. 
352.25     Sec. 34.  Minnesota Statutes 2001 Supplement, section 
352.26  295.60, subdivision 7, is amended to read: 
352.27     Subd. 7.  [APPLICATION OF OTHER CHAPTERS.] Unless 
352.28  specifically provided otherwise by this section, the 
352.29  enforcement, interest, and penalty provisions under chapter 294, 
352.30  appeal provisions in sections 289A.43 and 289A.65, criminal 
352.31  penalties in section 289A.63, and refunds provisions in section 
352.32  289A.50 chapter 289A, civil penalty provisions applicable to 
352.33  withholding and sales taxes under section 289A.60, and 
352.34  collection and rulemaking provisions under chapter 270, apply to 
352.35  a liability for the taxes imposed under this section. 
352.36     <h>[EFFECTIVE DATE.]</h> This section is effective January 1, 2002.
353.1      Sec. 35.  Minnesota Statutes 2000, section 296A.18, 
353.2   subdivision 8, is amended to read: 
353.3      Subd. 8.  [AVIATION FUEL TAX STATE AIRPORTS FUND.] The 
353.4   revenues derived from the excise taxes on aviation gasoline and 
353.5   on special fuel received, sold, stored, or withdrawn from 
353.6   storage as substitutes for aviation gasoline, shall be paid into 
353.7   the state treasury and credited to the aviation fuel tax state 
353.8   airports fund.  There is hereby appropriated such sums as are 
353.9   needed to carry out the provisions of this subdivision. 
353.10     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
353.11  following final enactment. 
353.12     Sec. 36.  Minnesota Statutes 2001 Supplement, section 
353.13  297A.70, subdivision 3, is amended to read: 
353.14     Subd. 3.  [SALES OF CERTAIN GOODS AND SERVICES TO 
353.15  GOVERNMENT.] (a) The following sales to or use by the specified 
353.16  governments and political subdivisions of the state are exempt: 
353.17     (1) repair and replacement parts for emergency rescue 
353.18  vehicles, fire trucks, and fire apparatus to a political 
353.19  subdivision; 
353.20     (2) machinery and equipment, except for motor vehicles, 
353.21  used directly for mixed municipal solid waste management 
353.22  services at a solid waste disposal facility as defined in 
353.23  section 115A.03, subdivision 10; 
353.24     (3) chore and homemaking services to a political 
353.25  subdivision of the state to be provided to elderly or disabled 
353.26  individuals; 
353.27     (4) telephone services to the department of administration 
353.28  that are used to provide telecommunications services through the 
353.29  intertechnologies revolving fund; 
353.30     (5) firefighter personal protective equipment as defined in 
353.31  paragraph (b), if purchased or authorized by and for the use of 
353.32  an organized fire department, fire protection district, or fire 
353.33  company regularly charged with the responsibility of providing 
353.34  fire protection to the state or a political subdivision; 
353.35     (6) bullet-resistant body armor that provides the wearer 
353.36  with ballistic and trauma protection, if purchased by a law 
354.1   enforcement agency of the state or a political subdivision of 
354.2   the state, or a licensed peace officer, as defined in section 
354.3   626.84, subdivision 1; 
354.4      (7) motor vehicles purchased or leased by political 
354.5   subdivisions of the state if the vehicles are exempt from 
354.6   registration under section 168.012, subdivision 1, paragraph 
354.7   (b), exempt from taxation under section 473.448, or exempt from 
354.8   the motor vehicle sales tax under section 297B.03, clause (12); 
354.9      (8) equipment designed to process, dewater, and recycle 
354.10  biosolids for wastewater treatment facilities of political 
354.11  subdivisions, and materials incidental to installation of that 
354.12  equipment; and materials used to construct buildings to house 
354.13  the equipment, if the materials are purchased after June 30, 
354.14  1998, and before July 1, 2001; and 
354.15     (9) sales to a town of gravel and of machinery, equipment, 
354.16  and accessories, except motor vehicles, used exclusively for 
354.17  road and bridge maintenance, and leases by a town of motor 
354.18  vehicles exempt from tax under section 297B.03, clause (10). 
354.19     (b) For purposes of this subdivision, "firefighters 
354.20  personal protective equipment" means helmets, including face 
354.21  shields, chin straps, and neck liners; bunker coats and pants, 
354.22  including pant suspenders; boots; gloves; head covers or hoods; 
354.23  wildfire jackets; protective coveralls; goggles; self-contained 
354.24  breathing apparatus; canister filter masks; personal alert 
354.25  safety systems; spanner belts; optical or thermal imaging search 
354.26  devices; and all safety equipment required by the Occupational 
354.27  Safety and Health Administration. 
354.28     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
354.29  following final enactment. 
354.30     Sec. 37.  Minnesota Statutes 2000, section 297I.05, 
354.31  subdivision 11, is amended to read: 
354.32     Subd. 11.  [RETALIATORY PROVISIONS.] (a) If any other state 
354.33  or country imposes any taxes, fines, deposits, penalties, 
354.34  licenses, or fees upon any insurance companies of this state and 
354.35  their agents doing business in another state or country that are 
354.36  in addition to or in excess of those imposed by the laws of this 
355.1   state upon foreign insurance companies and their agents doing 
355.2   business in this state, the same taxes, fines, deposits, 
355.3   penalties, licenses, and fees are imposed upon every similar 
355.4   insurance company of that state or country and their agents 
355.5   doing or applying to do business in this state. 
355.6      (b) If any conditions precedent to the right to do business 
355.7   in any other state or country are imposed by the laws of that 
355.8   state or country, beyond those imposed upon foreign companies by 
355.9   the laws of this state, the same conditions precedent are 
355.10  imposed upon every similar insurance company of that state or 
355.11  country and their agents doing or applying to do business in 
355.12  that state. 
355.13     (c) For purposes of this subdivision, "taxes, fines, 
355.14  deposits, penalties, licenses, or fees" means an amount of money 
355.15  that is deposited in the general revenue fund of the state or 
355.16  other similar fund in another state or country and is not 
355.17  dedicated to a special purpose or use or money deposited in the 
355.18  general revenue fund of the state or other similar fund in 
355.19  another state or country and appropriated to the commissioner of 
355.20  commerce or insurance for the operation of the department of 
355.21  commerce or other similar agency with jurisdiction over 
355.22  insurance.  Taxes, fines, deposits, penalties, licenses, or fees 
355.23  do not include: 
355.24     (1) special purpose obligations or assessments imposed in 
355.25  connection with particular kinds of insurance, including but not 
355.26  limited to assessments imposed in connection with residual 
355.27  market mechanisms; or 
355.28     (2) assessments made by the insurance guaranty association, 
355.29  life and health guarantee association, or similar association. 
355.30     (d) This subdivision applies to taxes imposed under 
355.31  subdivisions 1, 3, 4, 6, and 12, paragraph (a), clauses (1) and 
355.32  (3) (2). 
355.33     (e) This subdivision does not apply to insurance companies 
355.34  organized or domiciled in a state or country, the laws of which 
355.35  do not impose retaliatory taxes, fines, deposits, penalties, 
355.36  licenses, or fees or which grant, on a reciprocal basis, 
356.1   exemptions from retaliatory taxes, fines, deposits, penalties, 
356.2   licenses, or fees to insurance companies domiciled in this state.
356.3      <h>[EFFECTIVE DATE.]</h> This section is effective retroactively 
356.4   to tax years beginning on or after January 1, 2001. 
356.5      Sec. 38.  Minnesota Statutes 2001 Supplement, section 
356.6   298.01, subdivision 3b, is amended to read: 
356.7      Subd. 3b.  [DEDUCTIONS.] (a) For purposes of determining 
356.8   taxable income under subdivision 3, the deductions from gross 
356.9   income include only those expenses necessary to convert raw ores 
356.10  to marketable quality.  Such expenses include costs associated 
356.11  with refinement but do not include expenses such as 
356.12  transportation, stockpiling, marketing, or marine insurance that 
356.13  are incurred after marketable ores are produced, unless the 
356.14  expenses are included in gross income. 
356.15     (b) The provisions of section 290.01, subdivisions 19c, 
356.16  clauses (6) and (10) (9), and 19d, clauses (7) and (11), are not 
356.17  used to determine taxable income. 
356.18     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
356.19  following final enactment. 
356.20     Sec. 39.  Minnesota Statutes 2001 Supplement, section 
356.21  298.01, subdivision 4c, is amended to read: 
356.22     Subd. 4c.  [SPECIAL DEDUCTIONS; NET OPERATING LOSS.] (a) 
356.23  For purposes of determining taxable income under subdivision 
356.24  4, the following modifications are allowed: 
356.25     (1) the provisions of section 290.01, subdivisions 19c, 
356.26  clauses (6) and (10) (9), and 19d, clauses (7) and (11), are not 
356.27  used to determine taxable income; and. 
356.28     (2) for assets placed in service before January 1, 1990, 
356.29  the deduction for depreciation will be the same amount allowed 
356.30  under chapter 290, except that after an asset has been fully 
356.31  depreciated for federal income tax purposes any remaining 
356.32  depreciable basis is allowed as a deduction using the 
356.33  straight-line method over the following number of years: 
356.34     (i) three-year property, one year; 
356.35     (ii) five- and seven-year property, two years; 
356.36     (iii) ten-year property, five years; and 
357.1      (iv) all other property, seven years. 
357.2      No deduction is allowed if an asset is fully depreciated 
357.3   for occupation tax purposes before January 1990. 
357.4      (b) For purposes of determining the deduction allowed under 
357.5   paragraph (a), clause (2), the remaining depreciable basis of 
357.6   property placed in service before January 1, 1990, is calculated 
357.7   as follows: 
357.8      (1) the adjusted basis of the property on December 31, 
357.9   1989, which was used to calculate the hypothetical corporate 
357.10  franchise tax under Minnesota Statutes 1988, section 298.40, 
357.11  including salvage value; less 
357.12     (2) deductions for depreciation allowed under section 
357.13  290.01, subdivision 19e. 
357.14     (c) The basis for determining gain or loss on sale or 
357.15  disposition of assets placed in service before January 1, 1990, 
357.16  is the basis determined under paragraph (b), less the deductions 
357.17  allowed under paragraph (a), clause (2). 
357.18     (d) (b) The amount of net operating loss incurred in a 
357.19  taxable year beginning before January 1, 1990, that may be 
357.20  carried over to a taxable year beginning after December 31, 
357.21  1989, is the amount of net operating loss carryover determined 
357.22  in the calculation of the hypothetical corporate franchise tax 
357.23  under Minnesota Statutes 1988, sections 298.40 and 298.402. 
357.24     <h>[EFFECTIVE DATE.]</h> This section is effective for taxes 
357.25  payable May 1, 2002, and thereafter. 
357.26     Sec. 40.  Minnesota Statutes 2000, section 477A.011, 
357.27  subdivision 20, is amended to read: 
357.28     Subd. 20.  [CITY NET TAX CAPACITY.] "City net tax capacity" 
357.29  means (1) the net tax capacity computed using the net tax 
357.30  capacity rates in section 273.13 for taxes payable in the year 
357.31  of the aid distribution, and the market values for taxes payable 
357.32  in the year prior to the aid distribution plus (2) a city's 
357.33  fiscal disparities distribution tax capacity under section 
357.34  276A.06, subdivision 2, paragraph (b), or 473F.08, subdivision 
357.35  2, paragraph (b), for taxes payable in the year prior to that 
357.36  for which aids are being calculated.  The market value utilized 
358.1   in computing city net tax capacity shall be reduced by the sum 
358.2   of (1) a city's market value of commercial industrial property 
358.3   as defined in section 276A.01, subdivision 3, or 473F.02, 
358.4   subdivision 3, multiplied by the ratio determined pursuant to 
358.5   section 276A.06, subdivision 2, paragraph (a), or 473F.08, 
358.6   subdivision 2, paragraph (a), (2) the market value of the 
358.7   captured value of tax increment financing districts as defined 
358.8   in section 469.177, subdivision 2, and (3) the market value of 
358.9   transmission lines deducted from a city's total net tax capacity 
358.10  under section 273.425.  The city net tax capacity will be 
358.11  computed using equalized market values.  
358.12     <h>[EFFECTIVE DATE.]</h> This section is effective for aid payable 
358.13  in 2002 and thereafter. 
358.14     Sec. 41.  Minnesota Statutes 2001 Supplement, section 
358.15  477A.011, subdivision 36, is amended to read: 
358.16     Subd. 36.  [CITY AID BASE.] (a) Except as otherwise 
358.17  provided in paragraphs (b) to (o) this subdivision, "city aid 
358.18  base" means, for each city, the sum of the local government aid 
358.19  and equalization aid it was originally certified to receive in 
358.20  calendar year 1993 under Minnesota Statutes 1992, section 
358.21  477A.013, subdivisions 3 and 5, and the amount of disparity 
358.22  reduction aid it received in calendar year 1993 under Minnesota 
358.23  Statutes 1992, section 273.1398, subdivision 3. 
358.24     (b) For aids payable in 1996 and thereafter, a city that in 
358.25  1992 or 1993 transferred an amount from governmental funds to 
358.26  its sewer and water fund, which amount exceeded its net levy for 
358.27  taxes payable in the year in which the transfer occurred, has a 
358.28  "city aid base" equal to the sum of (i) its city aid base, as 
358.29  calculated under paragraph (a), and (ii) one-half of the 
358.30  difference between its city aid distribution under section 
358.31  477A.013, subdivision 9, for aids payable in 1995 and its city 
358.32  aid base for aids payable in 1995. 
358.33     (c) The city aid base for any city with a population less 
358.34  than 500 is increased by $40,000 for aids payable in calendar 
358.35  year 1995 and thereafter, and the maximum amount of total aid it 
358.36  may receive under section 477A.013, subdivision 9, paragraph 
359.1   (c), is also increased by $40,000 for aids payable in calendar 
359.2   year 1995 only, provided that: 
359.3      (i) the average total tax capacity rate for taxes payable 
359.4   in 1995 exceeds 200 percent; 
359.5      (ii) the city portion of the tax capacity rate exceeds 100 
359.6   percent; and 
359.7      (iii) its city aid base is less than $60 per capita. 
359.8      (d) The city aid base for a city is increased by $20,000 in 
359.9   1998 and thereafter and the maximum amount of total aid it may 
359.10  receive under section 477A.013, subdivision 9, paragraph (c), is 
359.11  also increased by $20,000 in calendar year 1998 only, provided 
359.12  that: 
359.13     (i) the city has a population in 1994 of 2,500 or more; 
359.14     (ii) the city is located in a county, outside of the 
359.15  metropolitan area, which contains a city of the first class; 
359.16     (iii) the city's net tax capacity used in calculating its 
359.17  1996 aid under section 477A.013 is less than $400 per capita; 
359.18  and 
359.19     (iv) at least four percent of the total net tax capacity, 
359.20  for taxes payable in 1996, of property located in the city is 
359.21  classified as railroad property. 
359.22     (e) The city aid base for a city is increased by $200,000 
359.23  in 1999 and thereafter and the maximum amount of total aid it 
359.24  may receive under section 477A.013, subdivision 9, paragraph 
359.25  (c), is also increased by $200,000 in calendar year 1999 only, 
359.26  provided that: 
359.27     (i) the city was incorporated as a statutory city after 
359.28  December 1, 1993; 
359.29     (ii) its city aid base does not exceed $5,600; and 
359.30     (iii) the city had a population in 1996 of 5,000 or more. 
359.31     (f) The city aid base for a city is increased by $450,000 
359.32  in 1999 to 2008 and the maximum amount of total aid it may 
359.33  receive under section 477A.013, subdivision 9, paragraph (c), is 
359.34  also increased by $450,000 in calendar year 1999 only, provided 
359.35  that: 
359.36     (i) the city had a population in 1996 of at least 50,000; 
360.1      (ii) its population had increased by at least 40 percent in 
360.2   the ten-year period ending in 1996; and 
360.3      (iii) its city's net tax capacity for aids payable in 1998 
360.4   is less than $700 per capita. 
360.5      (g) Beginning in 2002 2004, the city aid base for a city is 
360.6   equal to the sum of its city aid base in 2001 2003 and the 
360.7   amount of additional aid it was certified to receive under 
360.8   section 477A.06 in 2001 2003.  For 2002 2004 only, the maximum 
360.9   amount of total aid a city may receive under section 477A.013, 
360.10  subdivision 9, paragraph (c), is also increased by the amount it 
360.11  was certified to receive under section 477A.06 in 2001 2003. 
360.12     (h) The city aid base for a city is increased by $150,000 
360.13  for aids payable in 2000 and thereafter, and the maximum amount 
360.14  of total aid it may receive under section 477A.013, subdivision 
360.15  9, paragraph (c), is also increased by $150,000 in calendar year 
360.16  2000 only, provided that: 
360.17     (1) the city has a population that is greater than 1,000 
360.18  and less than 2,500; 
360.19     (2) its commercial and industrial percentage for aids 
360.20  payable in 1999 is greater than 45 percent; and 
360.21     (3) the total market value of all commercial and industrial 
360.22  property in the city for assessment year 1999 is at least 15 
360.23  percent less than the total market value of all commercial and 
360.24  industrial property in the city for assessment year 1998. 
360.25     (i) The city aid base for a city is increased by $200,000 
360.26  in 2000 and thereafter, and the maximum amount of total aid it 
360.27  may receive under section 477A.013, subdivision 9, paragraph 
360.28  (c), is also increased by $200,000 in calendar year 2000 only, 
360.29  provided that: 
360.30     (1) the city had a population in 1997 of 2,500 or more; 
360.31     (2) the net tax capacity of the city used in calculating 
360.32  its 1999 aid under section 477A.013 is less than $650 per 
360.33  capita; 
360.34     (3) the pre-1940 housing percentage of the city used in 
360.35  calculating 1999 aid under section 477A.013 is greater than 12 
360.36  percent; 
361.1      (4) the 1999 local government aid of the city under section 
361.2   477A.013 is less than 20 percent of the amount that the formula 
361.3   aid of the city would have been if the need increase percentage 
361.4   was 100 percent; and 
361.5      (5) the city aid base of the city used in calculating aid 
361.6   under section 477A.013 is less than $7 per capita. 
361.7      (j) The city aid base for a city is increased by $225,000 
361.8   in calendar years 2000 to 2002 and the maximum amount of total 
361.9   aid it may receive under section 477A.013, subdivision 9, 
361.10  paragraph (c), is also increased by $225,000 in calendar year 
361.11  2000 only, provided that: 
361.12     (1) the city had a population of at least 5,000; 
361.13     (2) its population had increased by at least 50 percent in 
361.14  the ten-year period ending in 1997; 
361.15     (3) the city is located outside of the Minneapolis-St. Paul 
361.16  metropolitan statistical area as defined by the United States 
361.17  Bureau of the Census; and 
361.18     (4) the city received less than $30 per capita in aid under 
361.19  section 477A.013, subdivision 9, for aids payable in 1999. 
361.20     (k) The city aid base for a city is increased by $102,000 
361.21  in 2000 and thereafter, and the maximum amount of total aid it 
361.22  may receive under section 477A.013, subdivision 9, paragraph 
361.23  (c), is also increased by $102,000 in calendar year 2000 only, 
361.24  provided that: 
361.25     (1) the city has a population in 1997 of 2,000 or more; 
361.26     (2) the net tax capacity of the city used in calculating 
361.27  its 1999 aid under section 477A.013 is less than $455 per 
361.28  capita; 
361.29     (3) the net levy of the city used in calculating 1999 aid 
361.30  under section 477A.013 is greater than $195 per capita; and 
361.31     (4) the 1999 local government aid of the city under section 
361.32  477A.013 is less than 38 percent of the amount that the formula 
361.33  aid of the city would have been if the need increase percentage 
361.34  was 100 percent. 
361.35     (l) The city aid base for a city is increased by $32,000 in 
361.36  2001 and thereafter, and the maximum amount of total aid it may 
362.1   receive under section 477A.013, subdivision 9, paragraph (c), is 
362.2   also increased by $32,000 in calendar year 2001 only, provided 
362.3   that: 
362.4      (1) the city has a population in 1998 that is greater than 
362.5   200 but less than 500; 
362.6      (2) the city's revenue need used in calculating aids 
362.7   payable in 2000 was greater than $200 per capita; 
362.8      (3) the city net tax capacity for the city used in 
362.9   calculating aids available in 2000 was equal to or less than 
362.10  $200 per capita; 
362.11     (4) the city aid base of the city used in calculating aid 
362.12  under section 477A.013 is less than $65 per capita; and 
362.13     (5) the city's formula aid for aids payable in 2000 was 
362.14  greater than zero. 
362.15     (m) The city aid base for a city is increased by $7,200 in 
362.16  2001 and thereafter, and the maximum amount of total aid it may 
362.17  receive under section 477A.013, subdivision 9, paragraph (c), is 
362.18  also increased by $7,200 in calendar year 2001 only, provided 
362.19  that: 
362.20     (1) the city had a population in 1998 that is greater than 
362.21  200 but less than 500; 
362.22     (2) the city's commercial industrial percentage used in 
362.23  calculating aids payable in 2000 was less than ten percent; 
362.24     (3) more than 25 percent of the city's population was 60 
362.25  years old or older according to the 1990 census; 
362.26     (4) the city aid base of the city used in calculating aid 
362.27  under section 477A.013 is less than $15 per capita; and 
362.28     (5) the city's formula aid for aids payable in 2000 was 
362.29  greater than zero. 
362.30     (n) The city aid base for a city is increased by $45,000 in 
362.31  2001 and thereafter and by an additional $50,000 in calendar 
362.32  years 2002 to 2011, and the maximum amount of total aid it may 
362.33  receive under section 477A.013, subdivision 9, paragraph (c), is 
362.34  also increased by $45,000 in calendar year 2001 only, and by 
362.35  $50,000 in calendar year 2002 only, provided that: 
362.36     (1) the net tax capacity of the city used in calculating 
363.1   its 2000 aid under section 477A.013 is less than $810 per 
363.2   capita; 
363.3      (2) the population of the city declined more than two 
363.4   percent between 1988 and 1998; 
363.5      (3) the net levy of the city used in calculating 2000 aid 
363.6   under section 477A.013 is greater than $240 per capita; and 
363.7      (4) the city received less than $36 per capita in aid under 
363.8   section 477A.013, subdivision 9, for aids payable in 2000. 
363.9      (o) The city aid base for a city with a population of 
363.10  10,000 or more which is located outside of the seven-county 
363.11  metropolitan area is increased in 2002 and thereafter, and the 
363.12  maximum amount of total aid it may receive under section 
363.13  477A.013, subdivision 9, paragraph (b) or (c), is also increased 
363.14  in calendar year 2002 only, by an amount equal to the lesser of: 
363.15     (1)(i) the total population of the city, as determined by 
363.16  the United States Bureau of the Census, in the 2000 census, (ii) 
363.17  minus 5,000, (iii) times 60; or 
363.18     (2) $2,500,000. 
363.19     (p) The city aid base is increased by $50,000 in 2002 and 
363.20  thereafter, and the maximum amount of total aid it may receive 
363.21  under section 477A.013, subdivision 9, paragraph (c), is also 
363.22  increased by $50,000 in calendar year 2002 only, provided that: 
363.23     (1) the city is located in the seven-county metropolitan 
363.24  area; 
363.25     (2) its population in 2000 is between 10,000 and 20,000; 
363.26  and 
363.27     (3) its commercial industrial percentage, as calculated for 
363.28  city aid payable in 2001, was greater than 25 percent. 
363.29     (q) The city aid base for a city is increased by $150,000 
363.30  in calendar years 2002 to 2011 and the maximum amount of total 
363.31  aid it may receive under section 477A.013, subdivision 9, 
363.32  paragraph (c), is also increased by $150,000 in calendar year 
363.33  2002 only, provided that: 
363.34     (1) the city had a population of at least 3,000 but no more 
363.35  than 4,000 in 1999; 
363.36     (2) its home county is located within the seven-county 
364.1   metropolitan area; 
364.2      (3) its pre-1940 housing percentage is less than 15 
364.3   percent; and 
364.4      (4) its city net tax capacity per capita for taxes payable 
364.5   in 2000 is less than $900 per capita. 
364.6      <h>[EFFECTIVE DATE.]</h> This section is effective for aid payable 
364.7   in 2002 and thereafter. 
364.8      Sec. 42.  Minnesota Statutes 2001 Supplement, section 
364.9   477A.013, subdivision 9, is amended to read: 
364.10     Subd. 9.  [CITY AID DISTRIBUTION.] (a) In calendar year 
364.11  2002 and thereafter, each city shall receive an aid distribution 
364.12  equal to the sum of (1) the city formula aid under subdivision 
364.13  8, and (2) its city aid base. 
364.14     (b) The percentage increase for a first class city in 
364.15  calendar year 1995 and thereafter, except for 2002, shall not 
364.16  exceed the percentage increase in the sum of the aid to all 
364.17  cities under this section in the current calendar year compared 
364.18  to the sum of the aid to all cities in the previous year.  For 
364.19  aids payable in 2002 only, the amount of the aid paid to a first 
364.20  class city shall not exceed the sum of its aid amount for 
364.21  calendar year 2001 under this section and its aid payment in 
364.22  calendar year 2001 under section 273.1398, subdivision 2, by 
364.23  more than 2.5 percent. 
364.24     (c) For aids payable in all years except 2002, the total 
364.25  aid for any city, except a first class city, shall not exceed 
364.26  the sum of (1) ten percent of the city's net levy for the year 
364.27  prior to the aid distribution plus (2) its total aid in the 
364.28  previous year before any increases or decreases under sections 
364.29  16A.711, subdivision 5, and 477A.0132.  For aids payable in 2002 
364.30  only, the total aid for any city, except a first class city, 
364.31  shall not exceed 40 percent of the sum of (1) 40 percent of the 
364.32  city's net levy for taxes payable in the year prior to the aid 
364.33  distribution plus (2) 40 percent of its total aid in the 
364.34  previous year under section 273.1398, subdivision 2, before any 
364.35  increases or decreases under sections 16A.711, subdivision 5, 
364.36  and 477A.0132 plus (3) its total aid in the previous year under 
365.1   this section. 
365.2      <h>[EFFECTIVE DATE.]</h> This section is effective for aid payable 
365.3   in 2002 and thereafter. 
365.4      Sec. 43.  Minnesota Statutes 2001 Supplement, section 
365.5   477A.07, subdivision 1, is amended to read: 
365.6      Subdivision 1.  [AID AMOUNT.] (a) For aid payable in 2003, 
365.7   each county and city is eligible for aid equal to the amount by 
365.8   which (i) 0.3 percent of the assessment year 2001 taxable market 
365.9   value of class 4a property, plus 0.25 percent of the assessment 
365.10  year 2001 market value of class 4b property, as defined in 
365.11  section 273.13, subdivision 25, multiplied by the jurisdiction's 
365.12  average tax rate for taxes payable in 2002, exceeds (ii) 0.4 
365.13  percent of the jurisdiction's total taxable net tax capacity for 
365.14  taxes payable in 2002, multiplied by the jurisdiction's average 
365.15  tax rate for taxes payable in 2002. 
365.16     (b) For aid payable in 2004, each county and city is 
365.17  eligible for aid equal to the amount by which (i) 0.25 percent 
365.18  of the assessment year 2002 taxable market value of class 4a 
365.19  property, as defined in section 273.13, subdivision 
365.20  25, multiplied by the jurisdiction's average tax rate for taxes 
365.21  payable in 2003, exceeds (ii) 0.4 percent of the jurisdiction's 
365.22  total taxable net tax capacity for taxes payable in 2003, 
365.23  multiplied by the jurisdiction's average tax rate for taxes 
365.24  payable in 2003. 
365.25     <h>[EFFECTIVE DATE.]</h> This section is effective for aid payable 
365.26  in 2003 and thereafter. 
365.27     Sec. 44.  Minnesota Statutes 2001 Supplement, section 
365.28  477A.07, subdivision 3, is amended to read: 
365.29     Subd. 3.  [CITY AID.] Each city's 2003 aid amount 
365.30  determined under subdivision 1 must be permanently added to its 
365.31  city aid base under section 477A.011, subdivision 36, and the 
365.32  maximum amount of total aid it may receive under section 
365.33  477A.013, subdivision 9, paragraph (b) or (c), is increased by 
365.34  the same amount for aid payable in 2003.  Each city's 2004 aid 
365.35  amount determined under subdivision 1 must be permanently added 
365.36  to its city aid base under section 477A.011, subdivision 36, and 
366.1   the maximum amount of total aid it may receive under section 
366.2   477A.013, subdivision 9, paragraph (b) or _(c), is increased by 
366.3   the same amount for aid payable in 2004. 
366.4      <h>[EFFECTIVE DATE.]</h> This section is effective for aids 
366.5   payable in calendar years 2003 and 2004. 
366.6      Sec. 45.  Laws 1993, chapter 375, article 5, section 42, is 
366.7   amended to read: 
366.8      Sec. 42. [REPORT TO LEGISLATURE.] 
366.9      By February March 1 of each year, the commissioner of 
366.10  revenue shall make a report to the legislature on the use of 
366.11  limited market value under section 273.13, subdivision 1a, and 
366.12  the valuation exclusion under section 273.13, subdivision 16.  
366.13  For the limited market value provision, the report shall include 
366.14  the total value excluded from taxation by type of property for 
366.15  each city and town.  For the valuation exclusion provision, the 
366.16  report shall include the total market value excluded from 
366.17  taxation for each city and town, as well as a breakdown of the 
366.18  excluded improvement amounts by age and value of the property 
366.19  being improved and the amount of the qualifying improvement.  
366.20  The county assessors shall provide the information necessary for 
366.21  the commissioner to compile the report in a manner prescribed by 
366.22  the commissioner. 
366.23     Sec. 46.  Laws 2001, First Special Session chapter 5, 
366.24  article 9, section 3, the effective date, is amended to read: 
366.25     <h>[EFFECTIVE DATE.]</h> This section is effective for tax years 
366.26  beginning after December 31, 2001, except that the amendment 
366.27  to clause clauses (3) is and (12) are effective for tax years 
366.28  beginning after December 31, 2000. 
366.29     Sec. 47.  [EARLY DECERTIFICATION OF TAX INCREMENT 
366.30  DISTRICTS; EFFECTIVE DATE.] 
366.31     Laws 2001, First Special Session chapter 5, article 15, 
366.32  section 12, is retroactively effective for decertifications 
366.33  occurring on or after July 1, 2001, regardless of the date of 
366.34  the request for certification of the district or any portion of 
366.35  the district. 
366.36     Sec. 48.  [REPEALER.] 
367.1      (a) Minnesota Statutes 2000, sections 272.02, subdivision 
367.2   40; 290.01, subdivisions 19g and 32; and 295.44, are repealed 
367.3   effective the day following final enactment. 
367.4      (b) Minnesota Statutes 2000, section 290.0921, subdivision 
367.5   5, is repealed effective for taxable years beginning after 
367.6   December 31, 2001. 
367.7      (c) Minnesota Rules, parts 8130.1400; 8130.2100; 8130.2350; 
367.8   8130.2600; 8130.3000; 8130.3850; and 8130.5000, are repealed 
367.9   effective the day following final enactment. 
367.10                             ARTICLE 22
367.11                         TELECOMMUNICATIONS
367.12     Section 1.  Minnesota Statutes 2000, section 125B.25, 
367.13  subdivision 9, is amended to read: 
367.14     Subd. 9.  [EXPIRATION INSUFFICIENT FUNDING.] This section 
367.15  expires on July 1, 2002. If the amount appropriated for purposes 
367.16  of this section is insufficient to fully fund the program, the 
367.17  Minnesota education telecommunications council must allocate the 
367.18  amount available to enable districts or regional clusters to 
367.19  maintain current connections within available funding.  
367.20     Sec. 2.  [237.82] [TELECOMMUNICATIONS ACCESS FEE.] 
367.21     Unless specifically provided otherwise in this section, the 
367.22  terms used in this section have the meanings given in section 
367.23  297A.61. 
367.24     A fee equal to one-half of one percent of the gross 
367.25  receipts from sales at retail of telecommunication services that 
367.26  are subject to taxation under chapter 297A, is imposed.  The fee 
367.27  must be shown as a separate line item on a bill for the 
367.28  telecommunications services.  The fee must be collected by the 
367.29  commissioner of revenue in the same manner, and is subject to 
367.30  the same interest and penalties as the tax imposed under chapter 
367.31  297A, provided that section 297A.94 does not apply to the 
367.32  revenues derived from the fee.  The commissioner of revenue 
367.33  shall deposit the revenues, including interest and penalties, 
367.34  derived from the fee imposed under this section in the state 
367.35  treasury and credit them to the public telecommunication 
367.36  services account. 
368.1      The fee terminates upon the effective date of the creation 
368.2   of a universal service fund by the public utilities commission 
368.3   or the legislature that addresses a broad range of access and 
368.4   affordability issues, but no later than June 30, 2005. 
368.5      Sec. 3.  [237.83] [PUBLIC TELECOMMUNICATION SERVICES 
368.6   ACCOUNT.] 
368.7      Subdivision 1.  [ACCOUNT ESTABLISHED.] A public 
368.8   telecommunication services account is established in the state 
368.9   treasury.  Earnings, such as interest, dividends, and any other 
368.10  earnings arising from fund assets, must be credited to the 
368.11  account.  
368.12     Subd. 2.  [PURPOSE.] The purpose of the account is to 
368.13  provide money to fund the learning network of Minnesota formerly 
368.14  funded through the higher education services office, the 
368.15  telecommunication access revenue program under section 125B.25, 
368.16  regional library telecommunication aid under section 134.47.  To 
368.17  the extent money is available after fully funding those 
368.18  programs, the account will be used to fund the hospital 
368.19  emergency telecommunications network under section 237.84. 
368.20     Subd. 3.  [COORDINATED PLAN.] The Minnesota education 
368.21  telecommunications council shall develop a specific funding plan 
368.22  that integrates the funding for education programs under 
368.23  subdivision 2, consistent with the regional distribution method 
368.24  recommended by the permanent funding committee in the report 
368.25  required by the legislature.  The council shall submit the plan 
368.26  to the education budget division chairs of the legislature by 
368.27  January 15, 2003.  All entities receiving funding under 
368.28  subdivision 2 that are eligible for federal telecommunication 
368.29  aid or discounts must apply for the maximum assistance available 
368.30  and must use the amounts or discounts received to reduce the 
368.31  state aid that may be necessary. 
368.32     Subd. 4.  [ADMINISTRATION.] The commissioner of 
368.33  administration shall award grants from the account, but not 
368.34  manage or operate the programs funded by the grants.  The 
368.35  commissioner shall consult with the Minnesota education 
368.36  telecommunications council before making grant decisions related 
369.1   to education networks.  
369.2      Subd. 5.  [COST REDUCTIONS; PERFORMANCE IMPROVEMENTS.] In 
369.3   awarding grants, the commissioner and the technology enterprise 
369.4   board must attempt to obtain cost reductions and performance 
369.5   improvements by encouraging cooperation among education and 
369.6   health care recipients of state telecommunication assistance.  
369.7      Subd. 6.  [CONNECTION COSTS.] Connection costs funded under 
369.8   this section may not be paid to a state agency unless the 
369.9   regional group making the application demonstrates that: 
369.10     (1) no other entity submitted bids to provide the 
369.11  connection; 
369.12     (2) the state agency had been a recipient of money under a 
369.13  program described in subdivision 2; or 
369.14     (3) the participation of a state agency is necessary to the 
369.15  interoperability of a network.  
369.16     Sec. 4.  [237.84] [HOSPITAL EMERGENCY COMMUNICATIONS 
369.17  NETWORK.] 
369.18     The commissioner of administration shall make grants to 
369.19  fund a hospital emergency communications network.  The initial 
369.20  grants may be used for hospital telecommunications equipment and 
369.21  connection charges.  Subsequent grants are only for connection 
369.22  costs.  Applications for the grants must be submitted by 
369.23  regional groups of hospitals.  The commissioner must ensure the 
369.24  interoperability of networks among hospitals with the learning 
369.25  network.  The commissioner shall establish an application 
369.26  procedure for grants and award grants with the advice of the 
369.27  commissioner of health and the technology enterprise board.  
369.28  Grants may not exceed 80 percent of the cost of the proposal.  
369.29  The hospital network must be redundant to the telephone network 
369.30  and use Internet technology.  The network must be designed so 
369.31  that it can also be used for telemedicine and education.  All 
369.32  entities that are eligible for federal telecommunication aid or 
369.33  discounts must apply for the maximum assistance available and 
369.34  must use the amounts or discounts received to reduce the state 
369.35  aid that may be necessary.  Grants may be used to upgrade 
369.36  existing systems.  The goal of the grant program is to connect 
370.1   all hospitals in Minnesota to one interoperable network for the 
370.2   sharing of information.  
370.3      Sec. 5.  Laws 2001, First Special Session chapter 3, 
370.4   article 4, section 5, subdivision 2, as amended by Laws 2002, 
370.5   chapter 220, article 2, section 12, is amended to read: 
370.6      Subd. 2.  [BASIC SUPPORT GRANTS.] For basic support grants 
370.7   according to Minnesota Statutes, sections 134.32 to 134.35: 
370.8        $8,570,000     .....     2002 
370.9        $8,570,000     .....     2003 
370.10     The 2002 appropriation includes $857,000 for 2001 and 
370.11  $7,713,000 for 2002. 
370.12     The 2003 appropriation includes $857,000 for 2002 and 
370.13  $7,713,000 for 2003. 
370.14     Base level funding for fiscal year 2004 is 
370.15  $9,823,000 $8,423,000 and $9,822,000 $8,423,000 for fiscal year 
370.16  2005. 
370.17     Sec. 6.  Laws 2001, First Special Session chapter 3, 
370.18  article 4, section 5, subdivision 4, as amended by Laws 2002, 
370.19  chapter 220, article 2, section 13, is amended to read: 
370.20     Subd. 4.  [REGIONAL LIBRARY TELECOMMUNICATIONS AID.] For 
370.21  aid to regional public library systems under Minnesota Statutes, 
370.22  section 134.47: 
370.23       $1,200,000     .....     2002 
370.24       $1,400,000     .....     2003 
370.25     This is a one-time appropriation.  Any balance in the first 
370.26  year does not cancel but is available in the second year. 
370.27     Base level funding for fiscal year 2004 is $1,400,000 and 
370.28  $1,400,000 for fiscal year 2005.  
370.29     Sec. 7.  [APPROPRIATIONS.] 
370.30     $8,600,000 is appropriated from the public 
370.31  telecommunication services account to the commissioner of 
370.32  children, families, and learning for the fiscal year ending June 
370.33  30, 2003, for the following purposes: 
370.34     (1)  $7,800,000 for the telecommunications access revenue 
370.35  program under Minnesota Statutes, section 125B.25; and 
370.36     (2) $800,000 for regional library telecommunications aid 
371.1   under Minnesota Statutes, section 134.47, to supplement money 
371.2   previously appropriated from the general fund. 
371.3      Sec. 8.  [REPEALER.] 
371.4      Minnesota Statutes 2001 Supplement, section 134.47, 
371.5   subdivision 3, is repealed. 
371.6      Sec. 9.  [EFFECTIVE DATE.] 
371.7      This act is effective January 1, 2003. 
371.8                              ARTICLE 23
371.9                            MISCELLANEOUS
371.10     Section 1.  Minnesota Statutes 2001 Supplement, section 
371.11  216B.1692, subdivision 2, is amended to read: 
371.12     Subd. 2.  [PROPOSAL SUBMISSION.] A public utility that 
371.13  intends to submit a proposal for an emissions reduction rider 
371.14  under this section, or that is ordered to do so by the 
371.15  commission, must submit to the commission, the department, the 
371.16  pollution control agency, and interested parties its plans for 
371.17  emissions reduction projects at its generating facilities.  This 
371.18  submission must be made at least 60 days in advance of a 
371.19  petition for a rider and shall include: 
371.20     (1) the priority order of emissions reduction projects the 
371.21  utility plans to pursue at its generating facilities; 
371.22     (2) the planned schedule for implementation; 
371.23     (3) the analysis and considerations relied on by the public 
371.24  utility to develop that priority ranking; 
371.25     (4) the alternative emissions reduction projects 
371.26  considered, including but not limited to applications of the 
371.27  best available control technology and repowering with natural 
371.28  gas, and reasons for not pursuing them; 
371.29     (5) the emissions reductions expected to be achieved by the 
371.30  projects and their relation to applicable standards for new 
371.31  facilities under the federal Clean Air Act; and 
371.32     (6) the general rationale and conclusions of the public 
371.33  utility in determining the priority ranking. 
371.34     <h>[EFFECTIVE DATE.]</h> This section is effective January 1, 2003.
371.35     Sec. 2.  Minnesota Statutes 2001 Supplement, section 
371.36  216B.1692, subdivision 3, is amended to read: 
372.1      Subd. 3.  [FILING PETITION TO RECOVER PROJECT COSTS.] 
372.2   (a) The commission may order a public utility may to petition 
372.3   the commission for approval of an emissions reduction rider to 
372.4   recover the costs of a qualifying emissions reduction project 
372.5   outside of a general rate case proceeding under section 
372.6   216B.16.  A public utility may also voluntarily submit such a 
372.7   petition.  In its filing, the public utility shall provide: 
372.8      (1) a description of the planned emissions reduction 
372.9   project; 
372.10     (2) the activities involved in the project; 
372.11     (3) a schedule for implementation; 
372.12     (4) any analysis provided to the pollution control agency 
372.13  regarding the project; 
372.14     (5) an assessment of alternatives to the project, including 
372.15  costs, environmental impact, and operational issues; 
372.16     (6) the proposed method of cost recovery; 
372.17     (7) any proposed recovery above cost; and 
372.18     (8) the projected emissions reductions from the project.  
372.19     (b) Nothing in this section precludes a public utility or 
372.20  interested party from seeking commission guidelines for 
372.21  emissions reduction rider filings; however, commission 
372.22  guidelines are not required as a prerequisite to a public 
372.23  utility-initiated filing. 
372.24     <h>[EFFECTIVE DATE.]</h> This section is effective January 1, 2003.
372.25     Sec. 3.  Minnesota Statutes 2001 Supplement, section 
372.26  216B.1692, subdivision 6, is amended to read: 
372.27     Subd. 6.  [IMPLEMENTATION.] Within 60 days of a final 
372.28  commission order, the public utility shall notify the commission 
372.29  and the pollution control agency whether it will implement the 
372.30  order and proceed with the project.  Nothing in this section 
372.31  commits a public utility to implementing a proposed emissions 
372.32  reduction project if the proposed project or terms of the 
372.33  emissions reduction rider have been either modified or rejected 
372.34  by the commission.  A public utility implementing a project 
372.35  under this section will not be required for a period of eight 
372.36  years after installation to undertake additional investments to 
373.1   comply with a new state requirement regarding pollutants 
373.2   addressed by the project at the project generating facility.  
373.3   This section does not affect requirements of federal law.  The 
373.4   term of the rider shall extend for the period approved by the 
373.5   commission regardless of any subsequent state or federal 
373.6   requirement affecting any pollutant addressed by the approved 
373.7   emissions reduction project and regardless of the sunset date in 
373.8   subdivision 8.  
373.9      <h>[EFFECTIVE DATE.]</h> This section is effective January 1, 2003.
373.10     Sec. 4.  Minnesota Statutes 2000, section 270B.01, 
373.11  subdivision 8, is amended to read: 
373.12     Subd. 8.  [MINNESOTA TAX LAWS.] For purposes of this 
373.13  chapter only, unless expressly stated otherwise, "Minnesota tax 
373.14  laws" means the taxes, refunds, and fees administered by or paid 
373.15  to the commissioner under chapters 115B (except taxes imposed 
373.16  under sections 115B.21 to 115B.24), 289A (except taxes imposed 
373.17  under sections 298.01, 298.015, and 298.24), 290, 290A, 
373.18  291, 295, 297A, and 297H and sections 295.50 to 295.59, or any 
373.19  similar Indian tribal tax administered by the commissioner 
373.20  pursuant to any tax agreement between the state and the Indian 
373.21  tribal government, and includes any laws for the assessment, 
373.22  collection, and enforcement of those taxes, refunds, and fees. 
373.23     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
373.24  following final enactment. 
373.25     Sec. 5.  Minnesota Statutes 2001 Supplement, section 
373.26  270B.02, subdivision 3, is amended to read: 
373.27     Subd. 3.  [CONFIDENTIAL DATA ON INDIVIDUALS; PROTECTED 
373.28  NONPUBLIC DATA.] (a) Except as provided in paragraph (b), the 
373.29  name or existence of an informer, informer letters, and other 
373.30  data, in whatever form, given to the department of revenue by a 
373.31  person, other than the data subject, who informs that a specific 
373.32  taxpayer person is not or may not be in compliance with tax 
373.33  laws, or nontax laws administered by the department of revenue, 
373.34  including laws other than those relating to property taxes not 
373.35  listed in section 270B.01, subdivision 8, are confidential data 
373.36  on individuals or protected nonpublic data as defined in section 
374.1   13.02, subdivisions 3 and 13. 
374.2      (b) Data under paragraph (a) may be disclosed with the 
374.3   consent of the informer or upon a written finding by a court 
374.4   that the information provided by the informer was false and that 
374.5   there is evidence that the information was provided in bad 
374.6   faith.  This subdivision does not alter disclosure 
374.7   responsibilities or obligations under the rules of criminal 
374.8   procedure. 
374.9      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
374.10  following final enactment. 
374.11     Sec. 6.  Minnesota Statutes 2000, section 270B.02, 
374.12  subdivision 4, is amended to read: 
374.13     Subd. 4.  [PUBLIC DATA.] Information required to be filed 
374.14  by exempt individuals, corporations, organizations, estates, and 
374.15  trusts under section 290.05, subdivisions 1 and 4, or that 
374.16  relates to exempt status under section 290.05, subdivision 2, is 
374.17  public data on individuals or public data not on individuals, as 
374.18  defined in section 13.02, subdivisions 14 and 15.  The 
374.19  commissioner may publish a list of organizations exempt from 
374.20  taxation under section 290.05, except that the name or address 
374.21  of any contributor to any organization that is or was exempt, or 
374.22  that has applied for tax exempt status, or any other information 
374.23  that could not be disclosed under section 6104 of the Internal 
374.24  Revenue Code of 1986, as amended through December 31, 1988, is 
374.25  classified as private data on individuals or nonpublic data as 
374.26  defined in section 13.02, subdivisions 9 and 12. 
374.27     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
374.28  following final enactment. 
374.29     Sec. 7.  Minnesota Statutes 2001 Supplement, section 
374.30  270B.08, subdivision 2, is amended to read: 
374.31     Subd. 2.  [REVOCATION.] When a taxpayer's sales tax permit 
374.32  has been revoked under section 297A.86, the commissioner may 
374.33  disclose data identifying the holder of the revoked permit and, 
374.34  stating the basis for the revocation, and stating whether the 
374.35  permit has been reinstated. 
374.36     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
375.1   following final enactment. 
375.2      Sec. 8.  Minnesota Statutes 2000, section 270B.14, 
375.3   subdivision 8, is amended to read: 
375.4      Subd. 8.  [EXCHANGE BETWEEN DEPARTMENTS OF LABOR AND 
375.5   INDUSTRY AND REVENUE.] The departments of labor and industry and 
375.6   revenue may exchange information as follows:  
375.7      (1) data used in determining whether a business is an 
375.8   employer or a contracting agent; 
375.9      (2) taxpayer identity information relating to employers and 
375.10  employees for purposes of supporting tax administration and 
375.11  chapter chapters 176, 177, and 181; and 
375.12     (3) data to the extent provided in and for the purpose set 
375.13  out in section 176.181, subdivision 8. 
375.14     <h>[EFFECTIVE DATE.]</h> This section is effective the day 
375.15  following final enactment. 
375.16     Sec. 9.  Minnesota Statutes 2000, section 297F.05, 
375.17  subdivision 1, is amended to read: 
375.18     Subdivision 1.  [RATES; CIGARETTES.] (a) A tax is imposed 
375.19  upon the sale of cigarettes in this state, upon having 
375.20  cigarettes in possession in this state with intent to sell, upon 
375.21  any person engaged in business as a distributor, and upon the 
375.22  use or storage by consumers, at the following rates, subject to 
375.23  the discount provided in this chapter, and subject to paragraph 
375.24  (b): 
375.25     (1) on cigarettes weighing not more than three pounds per 
375.26  thousand, 24 39 mills and, after December 31, 2002, 54 mills on 
375.27  each such cigarette; and 
375.28     (2) on cigarettes weighing more than three pounds per 
375.29  thousand, 48 78 mills and, after December 31, 2002, 108 mills on 
375.30  each such cigarette. 
375.31     (b) Before June 1 of 2004 and each subsequent year the 
375.32  commissioner shall recompute and publish the rate for the tax 
375.33  imposed under this subdivision.  The new rate must be calculated 
375.34  by multiplying the rate in effect at the time of the calculation 
375.35  by the ratio obtained under paragraph (c). 
375.36     (c) Divide the annual average U.S. Consumer Price Index for 
376.1   all urban consumers, as determined by the U.S. Department of 
376.2   Labor, for the previous calendar year, by the annual average for 
376.3   the calendar year before the previous year. 
376.4      (d) The rate calculated under this section must be rounded 
376.5   to the nearest one-half mill. 
376.6      (e) The new rate calculated under this section is effective 
376.7   for cigarette stamp purchases and for use and storage of 
376.8   cigarettes acquired by consumers after May 31.  The 
376.9   determination of the commissioner pursuant to this section must 
376.10  not be considered a "rule" and is not subject to the 
376.11  Administrative Procedure Act contained in chapter 14. 
376.12     <h>[EFFECTIVE DATE.]</h> This section is effective for cigarette 
376.13  stamp purchases occurring after April 30, 2002, and for use and 
376.14  storage of cigarettes acquired by consumers after April 30, 2002.
376.15     Sec. 10.  Minnesota Statutes 2000, section 297F.05, 
376.16  subdivision 3, is amended to read: 
376.17     Subd. 3.  [RATES; TOBACCO PRODUCTS.] A tax is imposed upon 
376.18  all tobacco products in this state and upon any person engaged 
376.19  in business as a distributor, at the rate of 35 49 percent of 
376.20  the wholesale sales price of the tobacco products.  The tax is 
376.21  imposed at the time the distributor: 
376.22     (1) brings, or causes to be brought, into this state from 
376.23  outside the state tobacco products for sale; 
376.24     (2) makes, manufactures, or fabricates tobacco products in 
376.25  this state for sale in this state; or 
376.26     (3) ships or transports tobacco products to retailers in 
376.27  this state, to be sold by those retailers. 
376.28     <h>[EFFECTIVE DATE.]</h> This section is effective for tobacco 
376.29  products brought into the state, or made or manufactured in the 
376.30  state, or for shipments to retailers in this state occurring 
376.31  after April 30, 2002. 
376.32     Sec. 11.  Minnesota Statutes 2000, section 297F.05, 
376.33  subdivision 4, is amended to read: 
376.34     Subd. 4.  [USE TAX; TOBACCO PRODUCTS.] A tax is imposed 
376.35  upon the use or storage by consumers of tobacco products in this 
376.36  state, and upon such consumers, at the rate of 35 49 percent of 
377.1   the cost to the consumer of the tobacco products. 
377.2      <h>[EFFECTIVE DATE.]</h> This section is effective for use or 
377.3   storage of tobacco products acquired by consumers after April 
377.4   30, 2002. 
377.5      Sec. 12.  Minnesota Statutes 2000, section 297F.08, 
377.6   subdivision 7, is amended to read: 
377.7      Subd. 7.  [PRICE OF STAMPS.] The commissioner shall sell 
377.8   stamps to any person licensed as a distributor at a discount 
377.9   of 1.0 0.65 percent from the face amount of the stamps for the 
377.10  first $1,500,000 $2,400,000 of such stamps purchased in any 
377.11  fiscal year; and at a discount of 0.6 0.4 percent on the 
377.12  remainder of such stamps purchased in any fiscal year.  The 
377.13  commissioner shall not sell stamps to any other person.  The 
377.14  commissioner may prescribe the method of shipment of the stamps 
377.15  to the distributor as well as the quantities of stamps purchased.
377.16     <h>[EFFECTIVE DATE.]</h> This section is effective for cigarette 
377.17  stamp purchases occurring after April 30, 2002. 
377.18     Sec. 13.  Minnesota Statutes 2000, section 297F.09, 
377.19  subdivision 2, is amended to read: 
377.20     Subd. 2.  [MONTHLY RETURN; TOBACCO PRODUCTS DISTRIBUTOR.] 
377.21  On or before the 18th day of each calendar month, a distributor 
377.22  with a place of business in this state shall file a return with 
377.23  the commissioner showing the quantity and wholesale sales price 
377.24  of each tobacco product: 
377.25     (1) brought, or caused to be brought, into this state for 
377.26  sale; and 
377.27     (2) made, manufactured, or fabricated in this state for 
377.28  sale in this state, during the preceding calendar month.  
377.29  Every licensed distributor outside this state shall in like 
377.30  manner file a return showing the quantity and wholesale sales 
377.31  price of each tobacco product shipped or transported to 
377.32  retailers in this state to be sold by those retailers, during 
377.33  the preceding calendar month.  Returns must be made in the form 
377.34  and manner prescribed by the commissioner and must contain any 
377.35  other information required by the commissioner.  The return must 
377.36  be accompanied by a remittance for the full tax liability shown, 
378.1   less 1.5 1.0 percent of the liability as compensation to 
378.2   reimburse the distributor for expenses incurred in the 
378.3   administration of this chapter.  
378.4      <h>[EFFECTIVE DATE.]</h> This section is effective for tobacco 
378.5   products brought into the state, or made or manufactured in the 
378.6   state, after April 30, 2002. 
378.7      Sec. 14.  Minnesota Statutes 2000, section 297H.06, 
378.8   subdivision 2, is amended to read: 
378.9      Subd. 2.  [MATERIALS.] The tax is not imposed upon charges 
378.10  to generators of mixed municipal solid waste or upon the volume 
378.11  of non-mixed-municipal solid waste for waste management services 
378.12  to manage the following materials: 
378.13     (1) mixed municipal solid waste and non-mixed-municipal 
378.14  solid waste generated outside of Minnesota; 
378.15     (2) recyclable materials that are separated for recycling 
378.16  by the generator, collected separately from other waste, and 
378.17  recycled, to the extent the price of the service for handling 
378.18  recyclable material is separately itemized; 
378.19     (3) recyclable non-mixed-municipal solid waste that is 
378.20  separated for recycling by the generator, collected separately 
378.21  from other waste, delivered to a waste facility for the purpose 
378.22  of recycling, and recycled; 
378.23     (4) industrial waste, when it is transported to a facility 
378.24  owned and operated by the same person that generated it; 
378.25     (5) mixed municipal solid waste from a recycling facility 
378.26  that separates or processes recyclable materials and reduces the 
378.27  volume of the waste by at least 85 percent, provided that the 
378.28  exempted waste is managed separately from other waste; 
378.29     (6) recyclable materials that are separated from mixed 
378.30  municipal solid waste by the generator, collected and delivered 
378.31  to a waste facility that recycles at least 85 percent of its 
378.32  waste, and are collected with mixed municipal solid waste that 
378.33  is segregated in leakproof bags, provided that the mixed 
378.34  municipal solid waste does not exceed five percent of the total 
378.35  weight of the materials delivered to the facility and is 
378.36  ultimately delivered to a waste facility identified as a 
379.1   preferred waste management facility in county solid waste plans 
379.2   under section 115A.46; 
379.3      (7) through December 31, 2002, source-separated compostable 
379.4   waste, if the waste is delivered to a facility exempted as 
379.5   described in this clause.  To initially qualify for an 
379.6   exemption, a facility must apply for an exemption in its 
379.7   application for a new or amended solid waste permit to the 
379.8   pollution control agency.  The first time a facility applies to 
379.9   the agency it must certify in its application that it will 
379.10  comply with the criteria in items (i) to (v) and the 
379.11  commissioner of the agency shall so certify to the commissioner 
379.12  of revenue who must grant the exemption.  For each subsequent 
379.13  calendar year, by October 1 of the preceding year, the facility 
379.14  must apply to the agency for certification to renew its 
379.15  exemption for the following year.  The application must be filed 
379.16  according to the procedures of, and contain the information 
379.17  required by, the agency.  The commissioner of revenue shall 
379.18  grant the exemption if the commissioner of the pollution control 
379.19  agency finds and certifies to the commissioner of revenue that 
379.20  based on an evaluation of the composition of incoming waste and 
379.21  residuals and the quality and use of the product: 
379.22     (i) generators separate materials at the source; 
379.23     (ii) the separation is performed in a manner appropriate to 
379.24  the technology specific to the facility that: 
379.25     (A) maximizes the quality of the product; 
379.26     (B) minimizes the toxicity and quantity of residuals; and 
379.27     (C) provides an opportunity for significant improvement in 
379.28  the environmental efficiency of the operation; 
379.29     (iii) the operator of the facility educates generators, in 
379.30  coordination with each county using the facility, about 
379.31  separating the waste to maximize the quality of the waste stream 
379.32  for technology specific to the facility; 
379.33     (iv) process residuals do not exceed 15 percent of the 
379.34  weight of the total material delivered to the facility; and 
379.35     (v) the final product is accepted for use; 
379.36     (8) waste and waste by-products for which the tax has been 
380.1   paid; and 
380.2      (9) daily cover for landfills that has been approved in 
380.3   writing by the Minnesota pollution control agency. 
380.4      Sec. 15.  Minnesota Statutes 2001 Supplement, section 
380.5   349.12, subdivision 25, is amended to read: 
380.6      Subd. 25.  [LAWFUL PURPOSE.] (a) "Lawful purpose" means one 
380.7   or more of the following:  
380.8      (1) any expenditure by or contribution to a 501(c)(3) or 
380.9   festival organization, as defined in subdivision 15a, provided 
380.10  that the organization and expenditure or contribution are in 
380.11  conformity with standards prescribed by the board under section 
380.12  349.154, which standards must apply to both types of 
380.13  organizations in the same manner and to the same extent; 
380.14     (2) a contribution to an individual or family suffering 
380.15  from poverty, homelessness, or physical or mental disability, 
380.16  which is used to relieve the effects of that poverty, 
380.17  homelessness, or disability; 
380.18     (3) a contribution to an individual for treatment for 
380.19  delayed posttraumatic stress syndrome or a contribution to a 
380.20  program recognized by the Minnesota department of human services 
380.21  for the education, prevention, or treatment of compulsive 
380.22  gambling; 
380.23     (4) a contribution to or expenditure on a public or private 
380.24  nonprofit educational institution registered with or accredited 
380.25  by this state or any other state; 
380.26     (5) a contribution to a scholarship fund for defraying the 
380.27  cost of education to individuals where the funds are awarded 
380.28  through an open and fair selection process; 
380.29     (6) activities by an organization or a government entity 
380.30  which recognize humanitarian or military service to the United 
380.31  States, the state of Minnesota, or a community, subject to rules 
380.32  of the board, provided that the rules must not include mileage 
380.33  reimbursements in the computation of the per occasion 
380.34  reimbursement limit and must impose no aggregate annual limit on 
380.35  the amount of reasonable and necessary expenditures made to 
380.36  support: 
381.1      (i) members of a military marching or color guard unit for 
381.2   activities conducted within the state; 
381.3      (ii) members of an organization solely for services 
381.4   performed by the members at funeral services; or 
381.5      (iii) members of military marching, color guard, or honor 
381.6   guard units may be reimbursed for participating in color guard, 
381.7   honor guard, or marching unit events within the state or states 
381.8   contiguous to Minnesota at a per participant rate of up to $35 
381.9   per occasion; 
381.10     (7) recreational, community, and athletic facilities and 
381.11  activities intended primarily for persons under age 21, provided 
381.12  that such facilities and activities do not discriminate on the 
381.13  basis of gender and the organization complies with section 
381.14  349.154; 
381.15     (8) payment of local taxes authorized under this chapter, 
381.16  taxes imposed by the United States on receipts from lawful 
381.17  gambling, the taxes imposed by section 297E.02, subdivisions 1, 
381.18  4, 5, and 6, and the tax imposed on unrelated business income by 
381.19  section 290.05, subdivision 3; 
381.20     (9) payment of real estate taxes and assessments on 
381.21  permitted gambling premises wholly owned by the licensed 
381.22  organization paying the taxes, or wholly leased by a licensed 
381.23  veterans organization under a national charter organized under 
381.24  section 501(c)(19) of the Internal Revenue Code, not to exceed: 
381.25     (i) for premises used for bingo, the amount that an 
381.26  organization may expend under board rules on rent for bingo; and 
381.27     (ii) $35,000 per year for premises used for other forms of 
381.28  lawful gambling; 
381.29     (10) a contribution to the United States, this state or any 
381.30  of its political subdivisions, or any agency or instrumentality 
381.31  thereof other than a direct contribution to a law enforcement or 
381.32  prosecutorial agency; 
381.33     (11) a contribution to or expenditure by a nonprofit 
381.34  organization which is a church or body of communicants gathered 
381.35  in common membership for mutual support and edification in 
381.36  piety, worship, or religious observances; 
382.1      (12) payment of the reasonable costs of an audit required 
382.2   in section 297E.06, subdivision 4, provided the annual audit is 
382.3   filed in a timely manner with the department of revenue; 
382.4      (13) a contribution to or expenditure on a wildlife 
382.5   management project that benefits the public at-large, provided 
382.6   that the state agency with authority over that wildlife 
382.7   management project approves the project before the contribution 
382.8   or expenditure is made; 
382.9      (14) expenditures, approved by the commissioner of natural 
382.10  resources, by an organization for grooming and maintaining 
382.11  snowmobile trails and all-terrain vehicle trails that are (1) 
382.12  grant-in-aid trails established under section 85.019, or (2) 
382.13  other trails open to public use, including purchase or lease of 
382.14  equipment for this purpose; or 
382.15     (15) conducting nutritional programs, food shelves, and 
382.16  congregate dining programs primarily for persons who are age 62 
382.17  or older or disabled; or 
382.18     (16) a contribution to a community arts organization, or an 
382.19  expenditure to sponsor arts programs in the community, including 
382.20  but not limited to visual, literary, performing, or musical arts.
382.21     (b) Notwithstanding paragraph (a), "lawful purpose" does 
382.22  not include: 
382.23     (1) any expenditure made or incurred for the purpose of 
382.24  influencing the nomination or election of a candidate for public 
382.25  office or for the purpose of promoting or defeating a ballot 
382.26  question; 
382.27     (2) any activity intended to influence an election or a 
382.28  governmental decision-making process; 
382.29     (3) the erection, acquisition, improvement, expansion, 
382.30  repair, or maintenance of real property or capital assets owned 
382.31  or leased by an organization, unless the board has first 
382.32  specifically authorized the expenditures after finding that (i) 
382.33  the real property or capital assets will be used exclusively for 
382.34  one or more of the purposes in paragraph (a); (ii) with respect 
382.35  to expenditures for repair or maintenance only, that the 
382.36  property is or will be used extensively as a meeting place or 
383.1   event location by other nonprofit organizations or community or 
383.2   service groups and that no rental fee is charged for the use; 
383.3   (iii) with respect to expenditures, including a mortgage payment 
383.4   or other debt service payment, for erection or acquisition only, 
383.5   that the erection or acquisition is necessary to replace with a 
383.6   comparable building, a building owned by the organization and 
383.7   destroyed or made uninhabitable by fire or natural disaster, 
383.8   provided that the expenditure may be only for that part of the 
383.9   replacement cost not reimbursed by insurance; (iv) with respect 
383.10  to expenditures, including a mortgage payment or other debt 
383.11  service payment, for erection or acquisition only, that the 
383.12  erection or acquisition is necessary to replace with a 
383.13  comparable building a building owned by the organization that 
383.14  was acquired from the organization by eminent domain or sold by 
383.15  the organization to a purchaser that the organization reasonably 
383.16  believed would otherwise have acquired the building by eminent 
383.17  domain, provided that the expenditure may be only for that part 
383.18  of the replacement cost that exceeds the compensation received 
383.19  by the organization for the building being replaced; or (v) with 
383.20  respect to an expenditure to bring an existing building into 
383.21  compliance with the Americans with Disabilities Act under item 
383.22  (ii), an organization has the option to apply the amount of the 
383.23  board-approved expenditure to the erection or acquisition of a 
383.24  replacement building that is in compliance with the Americans 
383.25  with Disabilities Act; 
383.26     (4) an expenditure by an organization which is a 
383.27  contribution to a parent organization, foundation, or affiliate 
383.28  of the contributing organization, if the parent organization, 
383.29  foundation, or affiliate has provided to the contributing 
383.30  organization within one year of the contribution any money, 
383.31  grants, property, or other thing of value; 
383.32     (5) a contribution by a licensed organization to another 
383.33  licensed organization unless the board has specifically 
383.34  authorized the contribution.  The board must authorize such a 
383.35  contribution when requested to do so by the contributing 
383.36  organization unless it makes an affirmative finding that the 
384.1   contribution will not be used by the recipient organization for 
384.2   one or more of the purposes in paragraph (a); or 
384.3      (6) a contribution to a statutory or home rule charter 
384.4   city, county, or town by a licensed organization with the 
384.5   knowledge that the governmental unit intends to use the 
384.6   contribution for a pension or retirement fund. 
384.7      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
384.8   following final enactment. 
384.9      Sec. 16.  Minnesota Statutes 2000, section 383A.81, is 
384.10  amended by adding a subdivision to read: 
384.11     Subd. 8.  [PRIORITIES.] Beginning July 1, 2002, the board 
384.12  of county commissioners must give priority to projects that 
384.13  reclaim polluted land for housing and for remediation projects 
384.14  in which other governmental and private sector funds are limited.
384.15     Sec. 17.  Minnesota Statutes 2000, section 383A.81, is 
384.16  amended by adding a subdivision to read: 
384.17     Subd. 9.  [SOLICITATION OF PROPOSALS.] At least annually, 
384.18  the board of county commissioners must solicit proposals from 
384.19  private sector developers and organizations for projects that 
384.20  qualify pursuant to subdivision 2. 
384.21     Sec. 18.  Minnesota Statutes 2000, section 383A.81, is 
384.22  amended by adding a subdivision to read: 
384.23     Subd. 10.  [REPORT.] Beginning July 1, 2002, and annually 
384.24  thereafter, the board of county commissioners must prepare a 
384.25  report on the amount of the revenues generated by the tax 
384.26  imposed in section 383A.80, and any expenditures made by the 
384.27  fund.  The first report will cover the activities of the fund 
384.28  from the date of inception. 
384.29     Sec. 19.  Minnesota Statutes 2000, section 383B.81, is 
384.30  amended by adding a subdivision to read: 
384.31     Subd. 9.  [PRIORITIES.] Beginning July 1, 2002, the board 
384.32  of county commissioners must give priority to projects that 
384.33  reclaim polluted land for housing and for remediation projects 
384.34  in which other governmental and private sector funds are limited.
384.35     Sec. 20.  Minnesota Statutes 2000, section 383B.81, is 
384.36  amended by adding a subdivision to read: 
385.1      Subd. 10.  [SOLICITATION OF PROPOSALS.] At least annually, 
385.2   the board of county commissioners must solicit proposals from 
385.3   private sector developers and organizations for projects that 
385.4   qualify pursuant to subdivision 2. 
385.5      Sec. 21.  Minnesota Statutes 2000, section 383B.81, is 
385.6   amended by adding a subdivision to read: 
385.7      Subd. 11.  [REPORT.] Beginning July 1, 2002, and annually 
385.8   thereafter, the board of county commissioners must prepare a 
385.9   report on the amount of the revenues generated by the tax 
385.10  imposed in section 383B.80, and any expenditures made by the 
385.11  fund.  The first report will cover the activities of the fund 
385.12  from the date of inception. 
385.13     Sec. 22.  [FLOOR STOCKS TAX.] 
385.14     Subdivision 1.  [CIGARETTES.] (a) A floor stocks tax is 
385.15  imposed on every person engaged in business in this state as a 
385.16  distributor, retailer, subjobber, vendor, manufacturer, or 
385.17  manufacturer's representative of cigarettes, on the stamped 
385.18  cigarettes and unaffixed stamps in the person's possession or 
385.19  under the person's control at 12:01 a.m. on May 1, 2002.  The 
385.20  tax is imposed at the following rates: 
385.21     (1) on cigarettes weighing not more than three pounds a 
385.22  thousand, 15 mills on each cigarette; and 
385.23     (2) on cigarettes weighing more than three pounds a 
385.24  thousand, 30 mills on each cigarette. 
385.25     Each distributor, by May 8, 2002, shall file a report with 
385.26  the commissioner, in the form the commissioner prescribes, 
385.27  showing the cigarettes on hand at 12:01 a.m. on May 1, 2002, and 
385.28  the amount of tax due on the cigarettes.  The tax imposed by 
385.29  this section is due and payable by June 1, 2002, and after that 
385.30  date bears interest at the rate of one percent a month. 
385.31     Each retailer, subjobber, vendor, manufacturer, or 
385.32  manufacturer's representative shall file a return with the 
385.33  commissioner, in the form the commissioner prescribes, showing 
385.34  the cigarettes on hand at 12:01 a.m. on May 1, 2002, and pay the 
385.35  tax due thereon by July 1, 2002.  Tax not paid by the due date 
385.36  bears interest at the rate of one percent a month. 
386.1      (b) A floor stocks tax is imposed on every person engaged 
386.2   in business in this state as a distributor, retailer, subjobber, 
386.3   vendor, manufacturer, or manufacturer's representative of 
386.4   cigarettes, on the stamped cigarettes and unaffixed stamps in 
386.5   the person's possession or under the person's control at 12:01 
386.6   a.m. on January 1, 2003.  The tax is imposed at the following 
386.7   rates: 
386.8      (1) on cigarettes weighing not more than three pounds a 
386.9   thousand, 15 mills on each cigarette; and 
386.10     (2) on cigarettes weighing more than three pounds a 
386.11  thousand, 30 mills on each cigarette. 
386.12     Each distributor, by January 8, 2003, shall file a report 
386.13  with the commissioner, in the form the commissioner prescribes, 
386.14  showing the cigarettes on hand at 12:01 a.m. on January 1, 2003, 
386.15  and the amount of tax due on the cigarettes.  The tax imposed by 
386.16  this section is due and payable by February 1, 2003, and after 
386.17  that date bears interest at the rate of one percent a month. 
386.18     Each retailer, subjobber, vendor, manufacturer, or 
386.19  manufacturer's representative shall file a return with the 
386.20  commissioner, in the form the commissioner prescribes, showing 
386.21  the cigarettes on hand at 12:01 a.m. on January 1, 2003, and pay 
386.22  the tax due thereon by March 1, 2003.  Tax not paid by the due 
386.23  date bears interest at the rate of one percent a month. 
386.24     Subd. 1a.  [TOBACCO PRODUCTS.] A floor stocks tax is 
386.25  imposed at the rate of 15 percent on every person engaged in 
386.26  business in this state as a distributor, retailer, subjobber, 
386.27  vendor, manufacturer, or manufacturer's representative of 
386.28  tobacco products, on the tobacco products in the person's 
386.29  possession or under the person's control at 12:01 a.m. on 
386.30  January 1, 2003.  
386.31     Each distributor, by January 8, 2003, shall file a report 
386.32  with the commissioner, in the form the commissioner prescribes, 
386.33  showing the tobacco products on hand at 12:01 a.m. on January 1, 
386.34  2003, and the amount of tax due on the tobacco products.  The 
386.35  tax imposed by this section is due and payable by March 1, 2003, 
386.36  and after that date bears interest at the rate of one percent a 
387.1   month. 
387.2      Each retailer, subjobber, vendor, manufacturer, or 
387.3   manufacturer's representative shall file a return with the 
387.4   commissioner, in the form the commissioner prescribes, showing 
387.5   the tobacco products on hand at 12:01 a.m. on January 1, 2003, 
387.6   and pay the tax due thereon by March 1, 2003.  Tax not paid by 
387.7   the due date bears interest at the rate of one percent a month. 
387.8      Subd. 2.  [AUDIT AND ENFORCEMENT.] The taxes imposed by 
387.9   this section are subject to the audit, assessment, and 
387.10  collection provisions applicable to the taxes imposed under 
387.11  Minnesota Statutes, chapter 297F.  The commissioner may require 
387.12  a distributor to receive and maintain copies of floor stock tax 
387.13  returns filed by all persons requesting a credit for returned 
387.14  cigarettes. 
387.15     Subd. 3.  [DEPOSIT OF PROCEEDS.] The revenue from the taxes 
387.16  imposed under this section shall be deposited by the 
387.17  commissioner in the general fund. 
387.18     Sec. 23.  [REPEALER.] 
387.19     Minnesota Statutes 2000, sections 383A.80, subdivision 4; 
387.20  and 383B.80, subdivision 4, are repealed.