1.1                          A bill for an act 
  1.2             relating to taxation; making changes to income, 
  1.3             estate, franchise, sales and use, property, motor 
  1.4             vehicle sales tax and registration, cigarette and 
  1.5             tobacco, liquor, aggregate and minerals taxes; 
  1.6             creating and modifying certain sales tax exemptions; 
  1.7             extending sunset dates for certain sales and property 
  1.8             tax exemptions; providing for the disposition of local 
  1.9             sales taxes for the cities of Duluth, St. Paul, 
  1.10            Hermantown, Rochester, Mankato, and Proctor; 
  1.11            authorizing local sales taxes in the cities of Beaver 
  1.12            Bay, Bemidji, Clearwater, Cloquet, Hopkins, Medford, 
  1.13            and Park Rapids; authorizing lodging taxes in the city 
  1.14            of Newport and Itasca county; providing property tax 
  1.15            exemptions and exclusions from property valuations; 
  1.16            modifying truth-in-taxation provisions; providing for 
  1.17            the creation of housing districts; authorizing or 
  1.18            modifying the authority of tax increment financing 
  1.19            districts in Detroit Lakes, Duluth, Monticello, New 
  1.20            Hope, Richfield, Roseville, and St. Michael; extending 
  1.21            sunset date for a tax levy in the city of Moorhead; 
  1.22            authorizing the creation of and modifying the 
  1.23            authority of local districts and economic development 
  1.24            authorities; granting bonding authority to the state 
  1.25            agricultural society and other political subdivisions; 
  1.26            allowing bonding for computer systems and other 
  1.27            purposes; authorizing cities to establish a program 
  1.28            for issuance of capital improvement bonds; limiting 
  1.29            challenges to tax increment financing actions; 
  1.30            establishing the corporate status of an entity; 
  1.31            updating to federal provisions; modifying payment, 
  1.32            penalty, interest, and enforcement provisions; 
  1.33            distributing payments to counties; changing 
  1.34            requirements for purchases of recycled materials; 
  1.35            regulating tax preparers; making technical changes; 
  1.36            imposing penalties; amending Minnesota Statutes 2002, 
  1.37            sections 16B.121; 115B.24, subdivision 8; 168.012, 
  1.38            subdivision 1; 168A.03; 216B.2424, subdivision 5; 
  1.39            270.06; 270.10, subdivision 1a; 270.60, subdivision 4; 
  1.40            270.69, by adding a subdivision; 270.701, subdivision 
  1.41            2, by adding a subdivision; 270.72, subdivision 2; 
  1.42            270A.03, subdivision 2; 270B.12, by adding a 
  1.43            subdivision; 272.02, subdivisions 26, 31, 47, 53, by 
  1.44            adding subdivisions; 272.12; 273.01; 273.05, 
  1.45            subdivision 1; 273.061, by adding subdivisions; 
  1.46            273.08; 273.11, subdivision 1a, by adding 
  2.1             subdivisions; 273.124, subdivision 1; 273.13, 
  2.2             subdivisions 22, 25; 273.1315; 273.1398, subdivisions 
  2.3             4b, 4d; 273.372; 273.42, subdivision 2; 274.01, 
  2.4             subdivision 1; 274.13, subdivision 1; 275.025, 
  2.5             subdivisions 1, 3, 4; 275.065, subdivisions 1, 1a, 3; 
  2.6             276.04, subdivision 2; 276.10; 276.11, subdivision 1; 
  2.7             277.20, subdivision 2; 278.03, subdivision 1; 278.05, 
  2.8             subdivision 6; 279.01, subdivision 1, by adding a 
  2.9             subdivision; 279.06, subdivision 1; 281.17; 282.01, 
  2.10            subdivisions 1b, 7a; 282.08; 287.12; 287.29, 
  2.11            subdivision 1; 287.31, by adding a subdivision; 
  2.12            289A.02, subdivision 7; 289A.10, subdivision 1; 
  2.13            289A.19, subdivision 4; 289A.31, subdivisions 3, 4, by 
  2.14            adding a subdivision; 289A.36, subdivision 7, by 
  2.15            adding subdivisions; 289A.50, subdivision 2a; 289A.56, 
  2.16            subdivision 3; 289A.60, subdivision 7, by adding a 
  2.17            subdivision; 290.01, subdivisions 19, 19b, 19d, 31; 
  2.18            290.05, subdivision 1; 290.06, subdivision 2c; 
  2.19            290.0671, subdivision 1; 290.0675, subdivisions 2, 3; 
  2.20            290.0679, subdivision 2; 290.0802, subdivision 1; 
  2.21            290.17, subdivision 4; 290.191, subdivision 1; 
  2.22            290A.03, subdivisions 8, 15; 290C.02, subdivisions 3, 
  2.23            7; 290C.03; 290C.07; 290C.09; 290C.10; 290C.11; 
  2.24            291.005, subdivision 1; 291.03, subdivision 1; 295.50, 
  2.25            subdivision 9b; 295.53, subdivision 1; 297A.61, 
  2.26            subdivisions 3, 12, 34, by adding subdivisions; 
  2.27            297A.62, subdivision 3; 297A.665; 297A.67, 
  2.28            subdivisions 2, 18, by adding subdivisions; 297A.68, 
  2.29            subdivisions 4, 5, 36, by adding a subdivision; 
  2.30            297A.69, subdivisions 2, 3, 4; 297A.70, subdivisions 
  2.31            8, 16; 297A.71, subdivision 10, by adding 
  2.32            subdivisions; 297A.85; 297B.025, subdivisions 1, 2; 
  2.33            297B.03; 297B.035, subdivision 1, by adding a 
  2.34            subdivision; 297F.01, subdivisions 21a, 23; 297F.06, 
  2.35            subdivision 4; 297F.08, by adding a subdivision; 
  2.36            297F.20, subdivisions 1, 2, 3, 6, 9; 297G.01, by 
  2.37            adding a subdivision; 297G.03, subdivision 1; 297I.01, 
  2.38            subdivision 9; 297I.20; 298.001, by adding a 
  2.39            subdivision; 298.01, subdivisions 3, 3a; 298.015; 
  2.40            298.016, subdivisions 1, 2, 4; 298.018; 352.15, 
  2.41            subdivision 1; 353.15, subdivision 1; 354.10, 
  2.42            subdivision 1; 354B.30; 354C.165; 373.01, subdivision 
  2.43            3; 373.45, subdivision 1; 373.47, subdivision 1; 
  2.44            376.009; 376.55, subdivision 3, by adding a 
  2.45            subdivision; 376.56, subdivision 3; 383B.77, 
  2.46            subdivisions 1, 2; 410.32; 412.301; 469.169, by adding 
  2.47            a subdivision; 469.1731, subdivision 3; 469.174, 
  2.48            subdivision 10, by adding subdivisions; 469.175, 
  2.49            subdivision 3, by adding a subdivision; 469.176, 
  2.50            subdivision 7; 469.1761, by adding a subdivision; 
  2.51            469.1763, subdivision 2; 469.177, subdivision 1; 
  2.52            469.1792; 473.39, by adding a subdivision; 473F.07, 
  2.53            subdivision 4; 473F.08, by adding a subdivision; 
  2.54            475.58, subdivision 3b; 477A.011, subdivision 30; 
  2.55            515B.1-116; Laws 1967, chapter 558, section 1, 
  2.56            subdivision 5, as amended; Laws 1980, chapter 511, 
  2.57            section 1, subdivision 2, as amended; Laws 1980, 
  2.58            chapter 511, section 2, as amended; Laws 1989, chapter 
  2.59            211, section 8, subdivision 2, as amended; Laws 1989, 
  2.60            chapter 211, section 8, subdivision 4, as amended; 
  2.61            Laws 1991, chapter 291, article 8, section 27, 
  2.62            subdivision 3, as amended; Laws 1991, chapter 291, 
  2.63            article 8, section 27, subdivision 4; Laws 1993, 
  2.64            chapter 375, article 9, section 46, subdivision 2, as 
  2.65            amended; Laws 1996, chapter 471, article 2, section 
  2.66            29; Laws 1998, chapter 389, article 8, section 43, 
  2.67            subdivision 3; Laws 1998, chapter 389, article 8, 
  2.68            section 43, subdivision 4; Laws 1999, chapter 243, 
  2.69            article 4, section 18, subdivision 1; Laws 1999, 
  2.70            chapter 243, article 4, section 18, subdivision 3; 
  2.71            Laws 1999, chapter 243, article 4, section 18, 
  3.1             subdivision 4; Laws 1999, chapter 243, article 4, 
  3.2             section 19, as amended; Laws 2001, First Special 
  3.3             Session chapter 5, article 3, section 61, the 
  3.4             effective date; Laws 2001 First Special Session 
  3.5             chapter 5, article 3, section 63, the effective date; 
  3.6             Laws 2001, First Special Session chapter 5, article 3, 
  3.7             section 96; Laws 2001, First Special Session chapter 
  3.8             5, article 9, section 12, the effective date; Laws 
  3.9             2001, First Special Session chapter 5, article 12, 
  3.10            section 67, the effective date; Laws 2002, chapter 
  3.11            377, article 3, section 15, the effective date; Laws 
  3.12            2002 chapter 377, article 6, section 4, the effective 
  3.13            date; Laws 2002, chapter 377, article 11, section 1; 
  3.14            proposing coding for new law in Minnesota Statutes, 
  3.15            chapters 37; 270; 273; 275; 276; 290C; 298; 410; 
  3.16            repealing Minnesota Statutes 2002, sections 270.691, 
  3.17            subdivision 8; 274.04; 290.0671, subdivision 3; 
  3.18            290.0675, subdivision 5; 294.01; 294.02; 294.021; 
  3.19            294.03; 294.06; 294.07; 294.08; 294.09; 294.10; 
  3.20            294.11; 294.12; 297A.72, subdivision 1; 297A.97; 
  3.21            298.01, subdivisions 3c, 3d; 298.017; 477A.065; Laws 
  3.22            1984, chapter 652, section 2; Laws 2002, chapter 377, 
  3.23            article 9, section 12, the effective date; Minnesota 
  3.24            Rules, parts 8007.0300, subpart 3; 8009.7100; 
  3.25            8009.7200; 8009.7300; 8009.7400; 8092.1000; 8106.0100, 
  3.26            subparts 11, 15, 16; 8106.0200; 8125.1000; 8125.1300, 
  3.27            subpart 1; 8125.1400; 8130.0800, subparts 5, 12; 
  3.28            8130.1300; 8130.1600, subpart 5; 8130.1700, subparts 
  3.29            3, 4; 8130.4800, subpart 2; 8130.7500, subpart 5; 
  3.30            8130.8000; 8130.8300. 
  3.31  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  3.32                             ARTICLE 1
  3.33                             SALES TAX
  3.34     Section 1.  Minnesota Statutes 2002, section 16B.121, is 
  3.35  amended to read: 
  3.36     16B.121 [PURCHASE OF RECYCLED, REPAIRABLE, AND DURABLE 
  3.37  MATERIALS.] 
  3.38     The commissioner shall take the recycled content and 
  3.39  recyclability of commodities to be purchased into consideration 
  3.40  in bid specifications.  When feasible and when the price of 
  3.41  recycled materials does not exceed the price of nonrecycled 
  3.42  materials by more than ten percent, The commissioner, and state 
  3.43  agencies when purchasing under delegated authority, shall 
  3.44  purchase recycled materials, unless the commissioner determines 
  3.45  that the price of the recycled materials exceeds the price of 
  3.46  nonrecycled materials by more than ten percent or that use of 
  3.47  the recycled materials would be impracticable.  In order to 
  3.48  maximize the quantity and quality of recycled materials 
  3.49  purchased, the commissioner, and state agencies when purchasing 
  3.50  under delegated authority, may also use other appropriate 
  4.1   procedures to acquire recycled materials at the most economical 
  4.2   cost to the state. 
  4.3      When purchasing commodities and services, the commissioner, 
  4.4   and state agencies when purchasing under delegated authority, 
  4.5   shall apply and promote the preferred waste management practices 
  4.6   listed in section 115A.02, with special emphasis on reduction of 
  4.7   the quantity and toxicity of materials in waste.  The 
  4.8   commissioner, and state agencies when purchasing under delegated 
  4.9   authority, in developing bid specifications, shall consider the 
  4.10  extent to which a commodity or product is durable, reusable, or 
  4.11  recyclable and marketable through the state resource recovery 
  4.12  program and the extent to which the commodity or product 
  4.13  contains postconsumer material. 
  4.14     Sec. 2.  Minnesota Statutes 2002, section 168.012, 
  4.15  subdivision 1, is amended to read: 
  4.16     Subdivision 1.  [VEHICLES EXEMPT FROM TAX, FEES, OR PLATE 
  4.17  DISPLAY.] (a) The following vehicles are exempt from the 
  4.18  provisions of this chapter requiring payment of tax and 
  4.19  registration fees, except as provided in subdivision 1c:  
  4.20     (1) vehicles owned and used solely in the transaction of 
  4.21  official business by the federal government, the state, or any 
  4.22  political subdivision; 
  4.23     (2) vehicles owned and used exclusively by educational 
  4.24  institutions and used solely in the transportation of pupils to 
  4.25  and from those institutions; 
  4.26     (3) vehicles used solely in driver education programs at 
  4.27  nonpublic high schools; 
  4.28     (4) vehicles owned by nonprofit charities and used 
  4.29  exclusively to transport disabled persons for educational 
  4.30  purposes; 
  4.31     (5) ambulances owned by ambulance services licensed under 
  4.32  section 144E.10, the general appearance of which is 
  4.33  unmistakable; and 
  4.34     (6) vehicles used to provide emergency medical services, 
  4.35  except as provided in paragraph (b), and owned by the state, a 
  4.36  political subdivision, or an ambulance service licensed under 
  5.1   section 144E.10; and 
  5.2      (7) vehicles owned by a commercial driving school licensed 
  5.3   under section 171.34, or an employee of a commercial driving 
  5.4   school licensed under section 171.34, and the vehicle is used 
  5.5   exclusively for driver education and training. 
  5.6      (b) Vehicles owned by the federal government, municipal 
  5.7   fire apparatuses including fire-suppression support vehicles, 
  5.8   police patrols, and ambulances, the general appearance of which 
  5.9   is unmistakable, are not required to register or display number 
  5.10  plates.  
  5.11     (c) Unmarked vehicles used in general police work, liquor 
  5.12  investigations, or arson investigations, and passenger 
  5.13  automobiles, pickup trucks, and buses owned or operated by the 
  5.14  department of corrections, must be registered and must display 
  5.15  appropriate license number plates, furnished by the registrar at 
  5.16  cost.  Original and renewal applications for these license 
  5.17  plates authorized for use in general police work and for use by 
  5.18  the department of corrections must be accompanied by a 
  5.19  certification signed by the appropriate chief of police if 
  5.20  issued to a police vehicle, the appropriate sheriff if issued to 
  5.21  a sheriff's vehicle, the commissioner of corrections if issued 
  5.22  to a department of corrections vehicle, or the appropriate 
  5.23  officer in charge if issued to a vehicle of any other law 
  5.24  enforcement agency.  The certification must be on a form 
  5.25  prescribed by the commissioner and state that the vehicle will 
  5.26  be used exclusively for a purpose authorized by this section.  
  5.27     (d) Unmarked vehicles used by the departments of revenue 
  5.28  and labor and industry, fraud unit, in conducting seizures or 
  5.29  criminal investigations must be registered and must display 
  5.30  passenger vehicle classification license number plates, 
  5.31  furnished at cost by the registrar.  Original and renewal 
  5.32  applications for these passenger vehicle license plates must be 
  5.33  accompanied by a certification signed by the commissioner of 
  5.34  revenue or the commissioner of labor and industry.  The 
  5.35  certification must be on a form prescribed by the commissioner 
  5.36  and state that the vehicles will be used exclusively for the 
  6.1   purposes authorized by this section. 
  6.2      (e) Unmarked vehicles used by the division of disease 
  6.3   prevention and control of the department of health must be 
  6.4   registered and must display passenger vehicle classification 
  6.5   license number plates.  These plates must be furnished at cost 
  6.6   by the registrar.  Original and renewal applications for these 
  6.7   passenger vehicle license plates must be accompanied by a 
  6.8   certification signed by the commissioner of health.  The 
  6.9   certification must be on a form prescribed by the commissioner 
  6.10  and state that the vehicles will be used exclusively for the 
  6.11  official duties of the division of disease prevention and 
  6.12  control.  
  6.13     (f) Unmarked vehicles used by staff of the gambling control 
  6.14  board in gambling investigations and reviews must be registered 
  6.15  and must display passenger vehicle classification license number 
  6.16  plates.  These plates must be furnished at cost by the 
  6.17  registrar.  Original and renewal applications for these 
  6.18  passenger vehicle license plates must be accompanied by a 
  6.19  certification signed by the board chair.  The certification must 
  6.20  be on a form prescribed by the commissioner and state that the 
  6.21  vehicles will be used exclusively for the official duties of the 
  6.22  gambling control board.  
  6.23     (g) All other motor vehicles must be registered and display 
  6.24  tax-exempt number plates, furnished by the registrar at cost, 
  6.25  except as provided in subdivision 1c.  All vehicles required to 
  6.26  display tax-exempt number plates must have the name of the state 
  6.27  department or political subdivision, nonpublic high school 
  6.28  operating a driver education program, or licensed commercial 
  6.29  driving school, plainly displayed on both sides of the vehicle; 
  6.30  except that each state hospital and institution for the mentally 
  6.31  ill and mentally retarded may have one vehicle without the 
  6.32  required identification on the sides of the vehicle, and county 
  6.33  social service agencies may have vehicles used for child and 
  6.34  vulnerable adult protective services without the required 
  6.35  identification on the sides of the vehicle.  This identification 
  6.36  must be in a color giving contrast with that of the part of the 
  7.1   vehicle on which it is placed and must endure throughout the 
  7.2   term of the registration.  The identification must not be on a 
  7.3   removable plate or placard and must be kept clean and visible at 
  7.4   all times; except that a removable plate or placard may be 
  7.5   utilized on vehicles leased or loaned to a political subdivision 
  7.6   or to a nonpublic high school driver education program. 
  7.7      <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2003. 
  7.8      Sec. 3.  Minnesota Statutes 2002, section 168A.03, is 
  7.9   amended to read: 
  7.10     168A.03 [EXEMPT VEHICLES.] 
  7.11     Subdivision 1.  The registrar shall not issue a certificate 
  7.12  of title for: 
  7.13     (1) a vehicle owned by the United States; 
  7.14     (2) a vehicle owned by a manufacturer or dealer and held 
  7.15  for sale, even though incidentally moved on the highway or used 
  7.16  pursuant to section 168.27 or 168.28, or a vehicle used by a 
  7.17  manufacturer solely for testing; 
  7.18     (3) a vehicle owned by a nonresident and not required by 
  7.19  law to be registered in this state; 
  7.20     (4) (3) a vehicle owned by a nonresident and regularly 
  7.21  engaged in the interstate transportation of persons or property 
  7.22  for which a currently effective certificate of title has been 
  7.23  issued in another state; 
  7.24     (5) (4) a vehicle moved solely by animal power; 
  7.25     (6) (5) an implement of husbandry; 
  7.26     (7) (6) special mobile equipment; 
  7.27     (8) (7) a self-propelled wheelchair or invalid tricycle; 
  7.28     (9) (8) a trailer (i) having a gross weight of 4,000 pounds 
  7.29  or less unless a secured party holds an interest in the trailer 
  7.30  or a certificate of title was previously issued by this state or 
  7.31  any other state or (ii) designed primarily for agricultural 
  7.32  purposes except recreational equipment or a manufactured home, 
  7.33  both as defined in section 168.011, subdivisions 8 and 25; 
  7.34     (10) (9) a snowmobile.  
  7.35     Subd. 2.  [DEALERS.] No certificate of title need be 
  7.36  obtained for a vehicle owned by a manufacturer or dealer and 
  8.1   held for sale, even though incidentally moved on the highway or 
  8.2   used pursuant to section 168.27 or 168.28, or a vehicle used by 
  8.3   a manufacturer solely for testing. 
  8.4      <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2003. 
  8.5      Sec. 4.  Minnesota Statutes 2002, section 297A.61, 
  8.6   subdivision 3, is amended to read: 
  8.7      Subd. 3.  [SALE AND PURCHASE.] (a) "Sale" and "purchase" 
  8.8   include, but are not limited to, each of the transactions listed 
  8.9   in this subdivision. 
  8.10     (b) Sale and purchase include: 
  8.11     (1) any transfer of title or possession, or both, of 
  8.12  tangible personal property, whether absolutely or conditionally, 
  8.13  for a consideration in money or by exchange or barter; and 
  8.14     (2) the leasing of or the granting of a license to use or 
  8.15  consume, for a consideration in money or by exchange or barter, 
  8.16  tangible personal property, other than a manufactured home used 
  8.17  for residential purposes for a continuous period of 30 days or 
  8.18  more. 
  8.19     (c) Sale and purchase include the production, fabrication, 
  8.20  printing, or processing of tangible personal property for a 
  8.21  consideration for consumers who furnish either directly or 
  8.22  indirectly the materials used in the production, fabrication, 
  8.23  printing, or processing. 
  8.24     (d) Sale and purchase include the preparing for a 
  8.25  consideration of food.  Notwithstanding section 297A.67, 
  8.26  subdivision 2, taxable food includes, but is not limited to, the 
  8.27  following: 
  8.28     (1) prepared food sold by the retailer; 
  8.29     (2) soft drinks; 
  8.30     (3) candy; and 
  8.31     (4) all food sold through vending machines. 
  8.32     (e) A sale and a purchase includes the furnishing for a 
  8.33  consideration of electricity, gas, water, or steam for use or 
  8.34  consumption within this state. 
  8.35     (f) A sale and a purchase includes the transfer for a 
  8.36  consideration of computer software.  
  9.1      (g) A sale and a purchase includes the furnishing for a 
  9.2   consideration of the following services: 
  9.3      (1) the privilege of admission to places of amusement, 
  9.4   recreational areas, or athletic events, and the making available 
  9.5   of amusement devices, tanning facilities, reducing salons, steam 
  9.6   baths, turkish baths, health clubs, and spas or athletic 
  9.7   facilities; 
  9.8      (2) lodging and related services by a hotel, rooming house, 
  9.9   resort, campground, motel, or trailer camp and the granting of 
  9.10  any similar license to use real property other than the renting 
  9.11  or leasing of it for a continuous period of 30 days or more; 
  9.12     (3) parking services, whether on a contractual, hourly, or 
  9.13  other periodic basis, except for parking at a meter; 
  9.14     (4) the granting of membership in a club, association, or 
  9.15  other organization if: 
  9.16     (i) the club, association, or other organization makes 
  9.17  available for the use of its members sports and athletic 
  9.18  facilities, without regard to whether a separate charge is 
  9.19  assessed for use of the facilities; and 
  9.20     (ii) use of the sports and athletic facility is not made 
  9.21  available to the general public on the same basis as it is made 
  9.22  available to members.  
  9.23  Granting of membership means both onetime initiation fees and 
  9.24  periodic membership dues.  Sports and athletic facilities 
  9.25  include golf courses; tennis, racquetball, handball, and squash 
  9.26  courts; basketball and volleyball facilities; running tracks; 
  9.27  exercise equipment; swimming pools; and other similar athletic 
  9.28  or sports facilities; 
  9.29     (5) delivery of aggregate materials and concrete block by a 
  9.30  third party if the delivery would be subject to the sales tax if 
  9.31  provided by the seller of the aggregate material or concrete 
  9.32  block; and 
  9.33     (6) services as provided in this clause: 
  9.34     (i) laundry and dry cleaning services including cleaning, 
  9.35  pressing, repairing, altering, and storing clothes, linen 
  9.36  services and supply, cleaning and blocking hats, and carpet, 
 10.1   drapery, upholstery, and industrial cleaning.  Laundry and dry 
 10.2   cleaning services do not include services provided by coin 
 10.3   operated facilities operated by the customer; 
 10.4      (ii) motor vehicle washing, waxing, and cleaning services, 
 10.5   including services provided by coin operated facilities operated 
 10.6   by the customer, and rustproofing, undercoating, and towing of 
 10.7   motor vehicles; 
 10.8      (iii) building and residential cleaning, maintenance, and 
 10.9   disinfecting and exterminating services; 
 10.10     (iv) detective, security, burglar, fire alarm, and armored 
 10.11  car services; but not including services performed within the 
 10.12  jurisdiction they serve by off-duty licensed peace officers as 
 10.13  defined in section 626.84, subdivision 1, or services provided 
 10.14  by a nonprofit organization for monitoring and electronic 
 10.15  surveillance of persons placed on in-home detention pursuant to 
 10.16  court order or under the direction of the Minnesota department 
 10.17  of corrections; 
 10.18     (v) pet grooming services; 
 10.19     (vi) lawn care, fertilizing, mowing, spraying and sprigging 
 10.20  services; garden planting and maintenance; tree, bush, and shrub 
 10.21  pruning, bracing, spraying, and surgery; indoor plant care; 
 10.22  tree, bush, shrub, and stump removal; and tree trimming for 
 10.23  public utility lines.  Services performed under a construction 
 10.24  contract for the installation of shrubbery, plants, sod, trees, 
 10.25  bushes, and similar items are not taxable; 
 10.26     (vii) massages, except when provided by a licensed health 
 10.27  care facility or professional or upon written referral from a 
 10.28  licensed health care facility or professional for treatment of 
 10.29  illness, injury, or disease; and 
 10.30     (viii) the furnishing of lodging, board, and care services 
 10.31  for animals in kennels and other similar arrangements, but 
 10.32  excluding veterinary and horse boarding services. 
 10.33     In applying the provisions of this chapter, the terms 
 10.34  "tangible personal property" and "sales at retail" include 
 10.35  taxable services and the provision of taxable services, unless 
 10.36  specifically provided otherwise.  Services performed by an 
 11.1   employee for an employer are not taxable.  Services performed by 
 11.2   a partnership or association for another partnership or 
 11.3   association are not taxable if one of the entities owns or 
 11.4   controls more than 80 percent of the voting power of the equity 
 11.5   interest in the other entity.  Services performed between 
 11.6   members of an affiliated group of corporations are not taxable.  
 11.7   For purposes of this section, "affiliated group of corporations" 
 11.8   includes those entities that would be classified as members of 
 11.9   an affiliated group under United States Code, title 26, section 
 11.10  1504, and that are eligible to file a consolidated tax return 
 11.11  for federal income tax purposes. 
 11.12     (h) A sale and a purchase includes the furnishing for a 
 11.13  consideration of tangible personal property or taxable services 
 11.14  by the United States or any of its agencies or 
 11.15  instrumentalities, or the state of Minnesota, its agencies, 
 11.16  instrumentalities, or political subdivisions. 
 11.17     (i) A sale and a purchase includes the furnishing for a 
 11.18  consideration of telecommunications services, including cable 
 11.19  television services and direct satellite services.  
 11.20  Telecommunications services are taxed to the extent allowed 
 11.21  under federal law if those services: 
 11.22     (1) either (i) originate and terminate in this state; or 
 11.23  (ii) originate in this state and terminate outside the state and 
 11.24  the service is charged to a telephone number customer located in 
 11.25  this state or to the account of any transmission instrument in 
 11.26  this state; or (iii) originate outside this state and terminate 
 11.27  in this state and the service is charged to a telephone number 
 11.28  customer located in this state or to the account of any 
 11.29  transmission instrument in this state; or 
 11.30     (2) are rendered by providing a private communications 
 11.31  service for which the customer has one or more locations within 
 11.32  Minnesota connected to the service and the service is charged to 
 11.33  a telephone number customer located in this state or to the 
 11.34  account of any transmission instrument in this state. 
 11.35     All charges for mobile telecommunications services, as 
 11.36  defined in United States Code, title 4, section 124, are deemed 
 12.1   to be provided by the customer's home service provider and 
 12.2   sourced to the customer's place of primary use and are subject 
 12.3   to tax based upon the customer's place of primary use in 
 12.4   accordance with the Mobile Telecommunications Sourcing Act, 
 12.5   United States Code, title 4, sections 116 to 126.  All other 
 12.6   definitions and provisions of the Mobile Telecommunications 
 12.7   Sourcing Act as provided in United States Code, title 4, are 
 12.8   hereby adopted. 
 12.9      (j) A sale and a purchase includes the furnishing for a 
 12.10  consideration of installation if the installation charges would 
 12.11  be subject to the sales tax if the installation were provided by 
 12.12  the seller of the item being installed. 
 12.13     (k) A sale and a purchase includes the rental of a vehicle 
 12.14  by a motor vehicle dealer to a customer when (1) the vehicle is 
 12.15  rented by the customer for a consideration, or (2) the motor 
 12.16  vehicle dealer is reimbursed pursuant to a service contract as 
 12.17  defined in section 65B.29, subdivision 1, clause (1). 
 12.18     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
 12.19  purchases made on or after July 1, 2003. 
 12.20     Sec. 5.  Minnesota Statutes 2002, section 297A.61, is 
 12.21  amended by adding a subdivision to read: 
 12.22     Subd. 35.  [DIRECT MAIL.] "Direct mail" means printed 
 12.23  material delivered or distributed by United States Mail or other 
 12.24  delivery service to a mass audience or to addressees on a 
 12.25  mailing list provided by the purchaser or at the direction of 
 12.26  the purchaser when the cost of the items is not billed directly 
 12.27  to the recipients.  "Direct mail" includes tangible personal 
 12.28  property supplied directly or indirectly by the purchaser to the 
 12.29  direct mail seller for inclusion in the package containing the 
 12.30  printed material.  "Direct mail" does not include multiple 
 12.31  identical items of printed material delivered to a single 
 12.32  address. 
 12.33     <b>[EFFECTIVE DATE.]</b> This section is effective retroactively 
 12.34  for delivery or distribution charges on sales and purchases made 
 12.35  after December 31, 2001. 
 12.36     Sec. 6.  Minnesota Statutes 2002, section 297A.62, 
 13.1   subdivision 3, is amended to read: 
 13.2      Subd. 3.  [MANUFACTURED HOUSING AND PARK TRAILERS.] For 
 13.3   retail sales of manufactured homes as defined in section 327.31, 
 13.4   subdivision 6, for residential uses, the sales tax under 
 13.5   subdivision 1 is imposed on 65 percent of the dealer's cost of 
 13.6   the manufactured home.  For retail sales of new or used park 
 13.7   trailers, as defined in section 168.011, subdivision 8, 
 13.8   paragraph (b), the sales tax under subdivision 1 is imposed on 
 13.9   65 percent of the sales price of the park trailer.  For retail 
 13.10  sales of prefabricated homes subject to regulation under 
 13.11  Minnesota Rules, chapter 1360 or 1361, for residential use, the 
 13.12  sales tax under subdivision 1 is imposed on 65 percent of the 
 13.13  manufacturer's wholesale list price of the prefabricated home. 
 13.14     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
 13.15  purchases occurring on or after July 1, 2003. 
 13.16     Sec. 7.  Minnesota Statutes 2002, section 297A.67, 
 13.17  subdivision 18, is amended to read: 
 13.18     Subd. 18.  [USED AND REREFINED MOTOR OILS.] Used motor oils 
 13.19  are exempt.  Rerefined motor oils that meet American Petroleum 
 13.20  Institute specifications for gasoline or diesel engines are 
 13.21  exempt.  The exemption for rerefined motor oils expires July 1, 
 13.22  2007.  
 13.23     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
 13.24  purchases made after June 30, 2003, and before July 1, 2007. 
 13.25     Sec. 8.  Minnesota Statutes 2002, section 297A.67, is 
 13.26  amended by adding a subdivision to read: 
 13.27     Subd. 31.  [RECYCLED COPIER AND PRINTING PAPER.] Copier 
 13.28  paper with a minimum postconsumer recycled content of 30 percent 
 13.29  by weight is exempt.  Uncoated printing paper with a minimum of 
 13.30  30 percent postconsumer recycled content by weight is exempt.  
 13.31  Coated printing paper with a minimum of ten percent postconsumer 
 13.32  recycled content by weight is exempt.  These exemptions expire 
 13.33  July 1, 2007. 
 13.34     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
 13.35  purchases made after June 30, 2003, and before July 1, 2007. 
 13.36     Sec. 9.  Minnesota Statutes 2002, section 297A.67, is 
 14.1   amended by adding a subdivision to read: 
 14.2      Subd. 32.  [SERVICE LOANER VEHICLE COVERED BY 
 14.3   WARRANTY.] The loan of a vehicle by a motor vehicle dealer to a 
 14.4   customer as a replacement for a vehicle being serviced or 
 14.5   repaired is exempt if the vehicle is loaned pursuant to a 
 14.6   warranty included in the original purchase price of the vehicle 
 14.7   being serviced or repaired. 
 14.8      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 14.9   following final enactment. 
 14.10     Sec. 10.  Minnesota Statutes 2002, section 297A.68, 
 14.11  subdivision 36, is amended to read: 
 14.12     Subd. 36.  [DELIVERY OR DISTRIBUTION CHARGES; PRINTED 
 14.13  MATERIALS DIRECT MAIL.] Charges for the delivery or distribution 
 14.14  of printed materials, including individual account 
 14.15  information, direct mail are exempt if (1) the charges are 
 14.16  separately stated, (2) the delivery or distribution is to a mass 
 14.17  audience or to a mailing list provided at the direction of the 
 14.18  customer, and (3) the cost of the materials is not billed 
 14.19  directly to the recipients on an invoice or similar billing 
 14.20  document given to the purchaser. 
 14.21     <b>[EFFECTIVE DATE.]</b> This section is effective retroactively 
 14.22  for delivery or distribution charges on sales and purchases made 
 14.23  after December 31, 2001. 
 14.24     Sec. 11.  Minnesota Statutes 2002, section 297A.70, 
 14.25  subdivision 8, is amended to read: 
 14.26     Subd. 8.  [REGIONWIDE PUBLIC SAFETY RADIO COMMUNICATION 
 14.27  SYSTEM; PRODUCTS AND SERVICES.] Products and services including, 
 14.28  but not limited to, end user equipment used for construction, 
 14.29  ownership, operation, maintenance, and enhancement of the 
 14.30  backbone system of the regionwide public safety radio 
 14.31  communication system established under sections 473.891 to 
 14.32  473.905, are exempt.  For purposes of this subdivision, backbone 
 14.33  system is defined in section 473.891, subdivision 9.  This 
 14.34  subdivision is effective for purchases, sales, storage, use, or 
 14.35  consumption occurring before August 1, 2003 2005, in the 
 14.36  counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and 
 15.1   Washington. 
 15.2      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 15.3   following final enactment. 
 15.4      Sec. 12.  Minnesota Statutes 2002, section 297A.70, 
 15.5   subdivision 16, is amended to read: 
 15.6      Subd. 16.  [CAMP FEES.] Camp fees to camps or other 
 15.7   recreation facilities owned and operated by an exempt 
 15.8   organization under section 501(c)(3) of the Internal Revenue 
 15.9   Code are exempt if the camps or facilities provide educational 
 15.10  and social activities for young people primarily age 18 and 
 15.11  under primarily for children and adults accompanying children, 
 15.12  or persons with disabilities. 
 15.13     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
 15.14  purchases made on or after June 30, 2003. 
 15.15     Sec. 13.  Minnesota Statutes 2002, section 297A.71, 
 15.16  subdivision 10, is amended to read: 
 15.17     Subd. 10.  [AIRCRAFT HEAVY MAINTENANCE FACILITY.] 
 15.18  Materials, equipment, and supplies used or consumed in 
 15.19  constructing a heavy maintenance facility for aircraft that is 
 15.20  to be owned by the state of Minnesota or one of its political 
 15.21  subdivisions and leased by an airline company, an aircraft 
 15.22  repair company, or an aircraft engine repair facility described 
 15.23  in section 116R.02, subdivision 6, are exempt.  Except for 
 15.24  equipment owned or leased by a contractor, all machinery, 
 15.25  equipment, and tools necessary to the construction and equipping 
 15.26  of that facility in order to provide those services are also 
 15.27  exempt. 
 15.28     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
 15.29  purchases made on or after July 1, 2003. 
 15.30     Sec. 14.  Minnesota Statutes 2002, section 297A.71, is 
 15.31  amended by adding a subdivision to read: 
 15.32     Subd. 32.  [CONSTRUCTION MATERIALS; MINNEAPOLIS 
 15.33  PLANETARIUM.] Materials and supplies used or consumed in the 
 15.34  construction of a Minneapolis planetarium are exempt. 
 15.35     <b>[EFFECTIVE DATE.]</b> This section is effective for purchases 
 15.36  made on or after January 1, 2002, and before July 1, 2006. 
 16.1      Sec. 15.  Minnesota Statutes 2002, section 297A.71, is 
 16.2   amended by adding a subdivision to read: 
 16.3      Subd. 33.  [GUTHRIE THEATER.] Materials, equipment, and 
 16.4   supplies used or consumed in construction of the Guthrie Theater 
 16.5   and the related parking garage are exempt. 
 16.6      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 16.7   following final enactment. 
 16.8      Sec. 16.  Minnesota Statutes 2002, section 297A.71, is 
 16.9   amended by adding a subdivision to read: 
 16.10     Subd. 34.  [CHILDREN'S THEATRE.] Materials, equipment, and 
 16.11  supplies used or consumed in construction of the Children's 
 16.12  Theatre in the city of Minneapolis are exempt. 
 16.13     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
 16.14  purchases made on or after July 1, 2003. 
 16.15     Sec. 17.  Minnesota Statutes 2002, section 297A.71, is 
 16.16  amended by adding a subdivision to read: 
 16.17     Subd. 35.  [WALKER ART CENTER.] Materials, equipment, and 
 16.18  supplies used or consumed in construction of the Walker Art 
 16.19  Center are exempt if more than $70,000,000 is raised from 
 16.20  private sources to pay for a portion of the costs of the project.
 16.21     <b>[EFFECTIVE DATE.]</b> This section is effective for purchases 
 16.22  made on or after June 1, 2003. 
 16.23     Sec. 18.  Minnesota Statutes 2002, section 297B.03, is 
 16.24  amended to read: 
 16.25     297B.03 [EXEMPTIONS.] 
 16.26     There is specifically exempted from the provisions of this 
 16.27  chapter and from computation of the amount of tax imposed by it 
 16.28  the following:  
 16.29     (1) purchase or use, including use under a lease purchase 
 16.30  agreement or installment sales contract made pursuant to section 
 16.31  465.71, of any motor vehicle by the United States and its 
 16.32  agencies and instrumentalities and by any person described in 
 16.33  and subject to the conditions provided in section 297A.67, 
 16.34  subdivision 11; 
 16.35     (2) purchase or use of any motor vehicle by any person who 
 16.36  was a resident of another state or country at the time of the 
 17.1   purchase and who subsequently becomes a resident of Minnesota, 
 17.2   provided the purchase occurred more than 60 days prior to the 
 17.3   date such person began residing in the state of Minnesota and 
 17.4   the motor vehicle was registered in the person's name in the 
 17.5   other state or country; 
 17.6      (3) purchase or use of any motor vehicle by any person 
 17.7   making a valid election to be taxed under the provisions of 
 17.8   section 297A.90; 
 17.9      (4) purchase or use of any motor vehicle previously 
 17.10  registered in the state of Minnesota when such transfer 
 17.11  constitutes a transfer within the meaning of section 118, 331, 
 17.12  332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 
 17.13  1563(a) of the Internal Revenue Code of 1986, as amended through 
 17.14  December 31, 1999; 
 17.15     (5) purchase or use of any vehicle owned by a resident of 
 17.16  another state and leased to a Minnesota based private or for 
 17.17  hire carrier for regular use in the transportation of persons or 
 17.18  property in interstate commerce provided the vehicle is titled 
 17.19  in the state of the owner or secured party, and that state does 
 17.20  not impose a sales tax or sales tax on motor vehicles used in 
 17.21  interstate commerce; 
 17.22     (6) purchase or use of a motor vehicle by a private 
 17.23  nonprofit or public educational institution for use as an 
 17.24  instructional aid in automotive training programs operated by 
 17.25  the institution.  "Automotive training programs" includes motor 
 17.26  vehicle body and mechanical repair courses but does not include 
 17.27  driver education programs; 
 17.28     (7) purchase of a motor vehicle for use as an ambulance or 
 17.29  to provide emergency medical services by an ambulance service 
 17.30  licensed under section 144E.10; 
 17.31     (8) purchase of a motor vehicle by or for a public library, 
 17.32  as defined in section 134.001, subdivision 2, as a bookmobile or 
 17.33  library delivery vehicle; 
 17.34     (9) purchase of a ready-mixed concrete truck; 
 17.35     (10) purchase or use of a motor vehicle by a town for use 
 17.36  exclusively for road maintenance, including snowplows and dump 
 18.1   trucks, but not including automobiles, vans, or pickup trucks; 
 18.2      (11) purchase or use of a motor vehicle by a corporation, 
 18.3   society, association, foundation, or institution organized and 
 18.4   operated exclusively for charitable, religious, or educational 
 18.5   purposes, except a public school, university, or library, but 
 18.6   only if the vehicle is: 
 18.7      (i) a truck, as defined in section 168.011, a bus, as 
 18.8   defined in section 168.011, or a passenger automobile, as 
 18.9   defined in section 168.011, if the automobile is designed and 
 18.10  used for carrying more than nine persons including the driver; 
 18.11  and 
 18.12     (ii) intended to be used primarily to transport tangible 
 18.13  personal property or individuals, other than employees, to whom 
 18.14  the organization provides service in performing its charitable, 
 18.15  religious, or educational purpose; 
 18.16     (12) purchase of a motor vehicle for use by a transit 
 18.17  provider exclusively to provide transit service is exempt if the 
 18.18  transit provider is either (i) receiving financial assistance or 
 18.19  reimbursement under section 174.24 or 473.384, or (ii) operating 
 18.20  under section 174.29, 473.388, or 473.405. 
 18.21     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
 18.22  purchases made on or after July 1, 2003. 
 18.23     Sec. 19.  Minnesota Statutes 2002, section 297B.035, is 
 18.24  amended by adding a subdivision to read: 
 18.25     Subd. 5.  [USE BY DEALER.] If a motor vehicle dealer uses a 
 18.26  vehicle, purchased for resale in the ordinary course of 
 18.27  business, other than for demonstration purposes, the dealer may 
 18.28  elect to pay the motor vehicle sales tax under this chapter or 
 18.29  the use tax under chapter 297A based on the reasonable rental 
 18.30  value of the vehicle.  If the motor vehicle dealer fails to 
 18.31  report the use tax under chapter 297A, it is presumed that the 
 18.32  dealer elected to pay the motor vehicle sales tax under this 
 18.33  chapter. 
 18.34     <b>[EFFECTIVE DATE.]</b> This section is effective for purchases 
 18.35  made on or after July 1, 2003. 
 18.36     Sec. 20.  Laws 1999, chapter 243, article 4, section 19, as 
 19.1   amended by Laws 2001, First Special Session chapter 5, article 
 19.2   12, section 88, is amended to read: 
 19.3      Sec. 19.  [EFFECTIVE DATES.] 
 19.4      Sections 1, 2, 5, 7, 9, and 11 are effective for sales and 
 19.5   purchases made after June 30, 1999.  
 19.6      Section 3 is effective for amended returns and refund 
 19.7   claims filed on or after July 1, 1999. 
 19.8      Section 4 is effective the day following final enactment 
 19.9   and applies retroactively to all open tax years and to 
 19.10  assessments and appeals under Minnesota Statutes, sections 
 19.11  289A.38 and 289A.65, for which the time limits have not expired 
 19.12  on the date of final enactment of this act.  The provisions of 
 19.13  Minnesota Statutes, section 289A.50, apply to refunds claimed 
 19.14  under section 4.  Refunds claimed under section 4 must be filed 
 19.15  by the later of December 31, 1999, or the time limit under 
 19.16  Minnesota Statutes, section 289A.40, subdivision 1. 
 19.17     Section 6 is effective retroactively for sales and 
 19.18  purchases made after June 30, 1998. 
 19.19     Section 8 is effective for purchases and sales made after 
 19.20  the date of final enactment.  
 19.21     Section 10 is effective for purchases made after the date 
 19.22  of final enactment and before July 1, 2003 2005. 
 19.23     Section 12 is effective the day after final enactment.  
 19.24  Section 12, paragraphs (a) to (c), apply to all local sales 
 19.25  taxes enacted after July 1, 1999.  Section 12, paragraph (d), 
 19.26  applies to all local sales taxes in effect at the time of, or 
 19.27  imposed after the day of, the enactment of this section. 
 19.28     Section 13 is effective the day following final enactment. 
 19.29     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 19.30  following final enactment. 
 19.31     Sec. 21.  Laws 2001, First Special Session chapter 5, 
 19.32  article 12, section 67, the effective date, is amended to read: 
 19.33     <b>[EFFECTIVE DATE.]</b> This section is effective for purchases 
 19.34  and sales made after June 30, 2001, and before January 1, 2003 
 19.35  July 1, 2005. 
 19.36     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 20.1   following final enactment. 
 20.2      Sec. 22.  [STATE CONVENTION CENTER.] 
 20.3      (a) Building materials, supplies, or equipment used or 
 20.4   consumed in constructing or equipping improvements to a state 
 20.5   convention center located in a city outside the metropolitan 
 20.6   area as defined in Minnesota Statutes, section 473.121, 
 20.7   subdivision 2, and governed by an 11-person board of which four 
 20.8   are appointed by the governor are exempt if the improvements are 
 20.9   financed in whole or in part by nonstate resources including, 
 20.10  but not limited to, revenue or general obligations issued by the 
 20.11  state convention center board of the city in which the center is 
 20.12  located.  This exemption applies regardless of whether the items 
 20.13  are purchased by the owner or by a contractor, subcontractor, or 
 20.14  builder. 
 20.15     (b) This section is intended to clarify the original intent 
 20.16  of Minnesota Statutes, section 297A.71, subdivision 2. 
 20.17     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 20.18  following final enactment and applies retroactively to sales and 
 20.19  purchases made after June 30, 1995, and before July 1, 2001. 
 20.20     Sec. 23.  [REPEALER.] 
 20.21     Laws 2002, chapter 377, article 9, section 12, the 
 20.22  effective date, is repealed effective the day following final 
 20.23  enactment. 
 20.24                             ARTICLE 2
 20.25                LOCAL LODGING AND SALES TAX ARTICLE
 20.26     Section 1.  Laws 1980, chapter 511, section 1, subdivision 
 20.27  2, as amended by Laws 1991, chapter 291, article 8, section 22, 
 20.28  and Laws 1998, chapter 389, article 8, section 25, is amended to 
 20.29  read: 
 20.30     Subd. 2.  Notwithstanding Minnesota Statutes, Section 
 20.31  477A.016, or any other law, ordinance, or city charter provision 
 20.32  to the contrary, the city of Duluth may, by ordinance, impose an 
 20.33  additional sales tax of up to one and one-half percent on sales 
 20.34  transactions which are described in Minnesota Statutes 2000, 
 20.35  Section 297A.01, Subdivision 3, Clause (c).  When the city 
 20.36  council determines that the taxes imposed under this subdivision 
 21.1   and under section 26 at a rate of one-half of one percent have 
 21.2   produced revenue sufficient to pay (1) the debt service on bonds 
 21.3   in a principal amount of $8,000,000 issued for capital 
 21.4   improvements to the Duluth Entertainment and Convention Center, 
 21.5   and (2) debt service on outstanding bonds originally issued in 
 21.6   the principal amount of $4,970,000 to finance capital 
 21.7   improvements to the Great Lakes Aquarium since the imposition of 
 21.8   the taxes at the rate of one and one-half percent, the rate of 
 21.9   the tax under this subdivision is reduced to one percent.  The 
 21.10  imposition of this tax shall not be subject to voter referendum 
 21.11  under either state law or city charter provisions.  
 21.12     <b>[EFFECTIVE DATE.]</b> This section is effective the day after 
 21.13  the governing body of the city of Duluth and its chief clerical 
 21.14  officer comply with Minnesota Statutes, section 645.021, 
 21.15  subdivisions 2 and 3. 
 21.16     Sec. 2.  Laws 1980, chapter 511, section 2, as amended by 
 21.17  Laws 1998, chapter 389, article 8, section 26, is amended to 
 21.18  read: 
 21.19     Sec. 2.  [CITY OF DULUTH; TAX ON RECEIPTS BY HOTELS AND 
 21.20  MOTELS.] 
 21.21     Notwithstanding Minnesota Statutes, Section 477A.016, or 
 21.22  any other law, or ordinance, or city charter provision to the 
 21.23  contrary, the city of Duluth may, by ordinance, impose an 
 21.24  additional tax of one and one-half percent upon the gross 
 21.25  receipts from the sale of lodging for periods of less than 30 
 21.26  days in hotels and motels located in the city.  When the city 
 21.27  council determines that the taxes imposed under this section and 
 21.28  section 25 at a rate of one-half of one percent have produced 
 21.29  revenue sufficient to pay (1) the debt service on bonds in a 
 21.30  principal amount of $8,000,000 issued for capital improvements 
 21.31  for the Duluth Entertainment and Convention Center, and (2) the 
 21.32  debt service on outstanding bonds originally issued in the 
 21.33  principal amount of $4,970,000 to finance capital improvements 
 21.34  to the Great Lakes Aquarium since the imposition of the taxes at 
 21.35  the rate of one and one-half percent, the rate of the tax under 
 21.36  this section is reduced to one percent.  The tax shall be 
 22.1   collected in the same manner as the tax set forth in the Duluth 
 22.2   city charter, section 54(d), paragraph one.  The imposition of 
 22.3   this tax shall not be subject to voter referendum under either 
 22.4   state law or city charter provisions. 
 22.5      <b>[EFFECTIVE DATE.]</b> This section is effective the day after 
 22.6   the governing body of the city of Duluth and its chief clerical 
 22.7   officer comply with Minnesota Statutes, section 645.021, 
 22.8   subdivisions 2 and 3. 
 22.9      Sec. 3.  Laws 1991, chapter 291, article 8, section 27, 
 22.10  subdivision 3, as amended by Laws 1998, chapter 389, article 8, 
 22.11  section 28, is amended to read: 
 22.12     Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
 22.13  authorized by subdivisions 1 and 2 shall be used by the city to 
 22.14  pay the cost of collecting the tax and to pay all or a portion 
 22.15  of the expenses of constructing and operating facilities as part 
 22.16  of an urban revitalization project in downtown Mankato known as 
 22.17  Riverfront 2000.  Authorized expenses include, but are not 
 22.18  limited to, acquiring property and paying relocation expenses 
 22.19  related to the development of Riverfront 2000 and related 
 22.20  facilities, and securing or paying debt service on bonds or 
 22.21  other obligations issued to finance the construction of 
 22.22  Riverfront 2000 and related facilities.  For purposes of this 
 22.23  section, "Riverfront 2000 and related facilities" means a 
 22.24  civic-convention center, an arena, a riverfront park, a 
 22.25  technology center and related educational facilities, and all 
 22.26  publicly owned real or personal property that the governing body 
 22.27  of the city determines will be necessary to facilitate the use 
 22.28  of these facilities, including but not limited to parking, 
 22.29  skyways, pedestrian bridges, lighting, and landscaping. 
 22.30     Revenues collected each year shall be used to pay 
 22.31  authorized expenses in the following order of priority: 
 22.32     (1) cost of collecting the tax; 
 22.33     (2) annual debt service on principal and interest; 
 22.34     (3) a reserve balance equal to 105 percent of the debt 
 22.35  service principal and interest payments for the following year; 
 22.36  and 
 23.1      (4) any remaining balance for capital, administrative, and 
 23.2   operating expenses of the Riverfront 2000 district.  
 23.3      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 23.4   following final enactment.  
 23.5      Sec. 4.  Laws 1991, chapter 291, article 8, section 27, 
 23.6   subdivision 4, is amended to read:  
 23.7      Subd. 4.  [EXPIRATION OF TAXING AUTHORITY AND EXPENDITURE 
 23.8   LIMITATION.] The authority granted by subdivisions 1 and 2 to 
 23.9   the city to impose a sales tax and an excise tax shall expire 
 23.10  when the principal and interest on any bonds or obligations 
 23.11  issued to finance construction of Riverfront 2000 and related 
 23.12  facilities have been paid or at an earlier time as the city 
 23.13  shall, by ordinance, determine.  The total capital, 
 23.14  administrative, and operating expenditures payable from bond 
 23.15  proceeds and revenues received from the taxes authorized by 
 23.16  subdivisions 1 and 2, excluding investment earnings on bond 
 23.17  proceeds and revenues, shall not exceed $25,000,000 for 
 23.18  Riverfront 2000 and related facilities. 
 23.19     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 23.20  following final enactment. 
 23.21     Sec. 5.  Laws 1993, chapter 375, article 9, section 46, 
 23.22  subdivision 2, as amended by Laws 1997, chapter 231, article 7, 
 23.23  section 40, and Laws 1998, chapter 389, article 8, section 30, 
 23.24  is amended to read: 
 23.25     Subd. 2.  [USE OF REVENUES.] Revenues received from the tax 
 23.26  authorized by subdivision 1 may only be used by the city to pay 
 23.27  the cost of collecting the tax, and to pay for the following 
 23.28  projects or to secure or pay any principal, premium, or interest 
 23.29  on bonds issued in accordance with subdivision 3 for the 
 23.30  following projects.  
 23.31     (a) To pay all or a portion of the capital expenses of 
 23.32  construction, equipment and acquisition costs for the expansion 
 23.33  and remodeling of the St. Paul Civic Center complex, including 
 23.34  the demolition of the existing arena and the construction and 
 23.35  equipping of a new arena. 
 23.36     (b) The remainder of the funds must be spent for: 
 24.1      (1) capital projects to further residential, cultural, 
 24.2   commercial, and economic development in both downtown St. Paul 
 24.3   and St. Paul neighborhoods.  The amount apportioned under this 
 24.4   paragraph shall be no less than 60 percent of the revenues 
 24.5   derived from the tax each year, except to the extent that a 
 24.6   portion of that amount is required to pay debt service on (1) 
 24.7   bonds issued for the purposes of paragraph (a) prior to March 1, 
 24.8   1998; or (2) bonds issued for the purposes of paragraph (a) 
 24.9   after March 1, 1998, but only if the city council determines 
 24.10  that 40 percent of the revenues derived from the tax together 
 24.11  with other revenues pledged to the payment of the bonds, 
 24.12  including the proceeds of definitive bonds, is expected to 
 24.13  exceed the annual debt service on the bonds; and 
 24.14     (2) the operating expenses of cultural organizations in the 
 24.15  city, provided that the amount spent under this clause may not 
 24.16  exceed must equal ten percent of the total amount spent under 
 24.17  this paragraph in any year.  
 24.18     (c) The amount apportioned under paragraph (b) shall be no 
 24.19  less than 60 percent of the revenues derived from the tax each 
 24.20  year, except to the extent that a portion of that amount is 
 24.21  required to pay debt service on (1) bonds issued for the 
 24.22  purposes of paragraph (a) prior to March 1, 1998; or (2) bonds 
 24.23  issued for the purposes of paragraph (a) after March 1, 1998, 
 24.24  but only if the city council determines that 40 percent of the 
 24.25  revenues derived from the tax together with other revenues 
 24.26  pledged to the payment of the bonds, including the proceeds of 
 24.27  definitive bonds, is expected to exceed the annual debt service 
 24.28  on the bonds. 
 24.29     (d) If in any year more than 40 percent of the revenue 
 24.30  derived from the tax authorized by subdivision 1 is used to pay 
 24.31  debt service on the bonds issued for the purposes of paragraph 
 24.32  (a) and to fund a reserve for the bonds, the amount of the debt 
 24.33  service payment that exceeds 40 percent of the revenue must be 
 24.34  determined for that year.  In any year when 40 percent of the 
 24.35  revenue produced by the sales tax exceeds the amount required to 
 24.36  pay debt service on the bonds and to fund a reserve for the 
 25.1   bonds under paragraph (a), the amount of the excess must be made 
 25.2   available for capital projects to further residential, cultural, 
 25.3   commercial, and economic development in the neighborhoods and 
 25.4   downtown until the cumulative amounts determined for all years 
 25.5   under the preceding sentence have been made available under this 
 25.6   sentence.  The amount made available as reimbursement in the 
 25.7   preceding sentence is not included in the 60 percent determined 
 25.8   under paragraph (b) (c). 
 25.9      (d) (e) By January 15 of each odd-numbered year, the mayor 
 25.10  and the city council must report to the legislature on the use 
 25.11  of sales tax revenues during the preceding two-year period. 
 25.12     <b>[EFFECTIVE DATE.]</b> This section is effective for 
 25.13  distributions after April 30, 2003. 
 25.14     Sec. 6.  Laws 1996, chapter 471, article 2, section 29, is 
 25.15  amended to read: 
 25.16     Sec. 29.  [CITY OF HERMANTOWN; SALES AND USE TAX.] 
 25.17     Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] (a) 
 25.18  Notwithstanding Minnesota Statutes, section 477A.016, or any 
 25.19  other contrary provision of law, ordinance, or city charter, the 
 25.20  city of Hermantown may, by ordinance, impose an additional sales 
 25.21  and use tax of up to one percent on sales transactions, storage, 
 25.22  and use taxable pursuant to Minnesota Statutes, chapter 297A, 
 25.23  that occur within the city. 
 25.24     (b) The proceeds of the first one-half of one percent of 
 25.25  tax imposed under this section must be used to meet the costs of 
 25.26  by the city for the following projects: 
 25.27     (1) extending a sewer interceptor line; 
 25.28     (2) construction of a booster pump station, reservoirs, and 
 25.29  related improvements to the water system; and 
 25.30     (3) construction of a police and fire station. 
 25.31     (c) Revenues received from the remaining one-half of one 
 25.32  percent of the tax authorized under this section must be used by 
 25.33  the city to pay all or part of the capital and administrative 
 25.34  costs of developing, acquiring, constructing, and initially 
 25.35  furnishing and equipping for the following projects: 
 25.36     (1) construction of a community recreation center; 
 26.1      (2) completion of a civic center services complex; 
 26.2      (3) construction and relocation of a new public works 
 26.3   facility; 
 26.4      (4) construction of roads, street improvements, and other 
 26.5   traffic control measures within the city; and 
 26.6      (5) acquisition, construction, and improvement of parks and 
 26.7   trails within the city. 
 26.8      (d) Authorized expenses include, but are not limited to, 
 26.9   acquiring property, paying construction, administrative, and 
 26.10  operating expenses related to the development of the projects 
 26.11  listed in paragraph (c), paying debt service on bonds or other 
 26.12  obligations, including lease obligations, issued to finance 
 26.13  construction, expansion, or improvement of the projects listed 
 26.14  in paragraph (c), and other compatible uses, including but not 
 26.15  limited to, parking, lighting, and landscaping. 
 26.16     Subd. 2.  [REFERENDUM.] (a) If the Hermantown city council 
 26.17  proposes to impose the sales tax authorized by this section, it 
 26.18  shall conduct a referendum on the issue. 
 26.19     (b) If the Hermantown city council initially imposes the 
 26.20  tax at a rate less than one percent and proposes increasing it 
 26.21  at a later date up to the authorized rate in subdivision 1, it 
 26.22  shall conduct a referendum on the increase. 
 26.23     (c) The question of imposing or increasing the tax must be 
 26.24  submitted to the voters at a special or general election.  The 
 26.25  tax may not be imposed unless a majority of votes cast on the 
 26.26  question of imposing the tax are in the affirmative.  The 
 26.27  commissioner of revenue shall prepare a suggested form of 
 26.28  question to be presented at the election.  This subdivision 
 26.29  applies notwithstanding any city charter provision to the 
 26.30  contrary. 
 26.31     Subd. 3.  [ENFORCEMENT; COLLECTION; AND ADMINISTRATION OF 
 26.32  TAXES.] A sales tax imposed under this section must be reported 
 26.33  and paid to the commissioner of revenue with the state sales 
 26.34  taxes, and be subject to the same penalties, interest, and 
 26.35  enforcement provisions.  The proceeds of the tax, less refunds 
 26.36  and a proportionate share of the cost of collection, shall be 
 27.1   remitted at least quarterly to the city.  The commissioner shall 
 27.2   deduct from the proceeds remitted an amount that equals the 
 27.3   indirect statewide cost as well as the direct and indirect 
 27.4   department costs necessary to administer, audit, and collect the 
 27.5   tax.  The amount deducted shall be deposited in the state 
 27.6   general fund. 
 27.7      Subd. 3a.  [BONDING AUTHORITY.] (a) The city may issue 
 27.8   general obligation bonds under Minnesota Statutes, chapter 475, 
 27.9   to finance the costs in subdivision 1, paragraph (c).  The total 
 27.10  amount of bonds issued for the projects under subdivision 1, 
 27.11  paragraph (c), may not exceed $12,900,000 in the aggregate.  An 
 27.12  election to approve the bonds is not required. 
 27.13     (b) The bonds are not included in computing any debt 
 27.14  limitation applicable to the city and the levy of taxes under 
 27.15  Minnesota Statutes, section 475.61, to pay principal of and 
 27.16  interest on the bonds is not subject to any levy limitation. 
 27.17     (c) The taxes authorized under this section may be pledged 
 27.18  to and used for the payment of the bonds and any bonds issued to 
 27.19  refund them. 
 27.20     Subd. 4.  [TERMINATION.] The portion of the tax authorized 
 27.21  under this section to finance the improvements described in 
 27.22  subdivision 1, paragraph (b), terminates at the later of (1) ten 
 27.23  years after the date of initial imposition of the tax, or (2) on 
 27.24  the first day of the second month next succeeding a 
 27.25  determination by the city council that sufficient funds have 
 27.26  been received from that portion of the tax dedicated to finance 
 27.27  the those improvements described in subdivision 1, clauses (1) 
 27.28  to (3), and to prepay or retire at maturity the principal, 
 27.29  interest, and premium due on any bonds issued for the 
 27.30  improvements.  The portion of the tax authorized to finance the 
 27.31  improvements described in subdivision 1, paragraph (c), 
 27.32  terminates when the revenues raised are sufficient to finance 
 27.33  those improvements, up to an amount equal to $12,900,000 plus 
 27.34  any interest, premium, and other costs associated with the bonds 
 27.35  issued under subdivision 3a.  The city council may terminate 
 27.36  this portion of the tax earlier.  Any funds remaining after 
 28.1   completion of the improvements and retirement or redemption of 
 28.2   the bonds may be placed in the general fund of the city. 
 28.3      Subd. 5.  [LOCAL APPROVAL; EFFECTIVE DATE.] This section is 
 28.4   effective the day after final enactment, upon compliance with 
 28.5   Minnesota Statutes, section 645.021, subdivision 3, by the city 
 28.6   of Hermantown. 
 28.7      <b>[EFFECTIVE DATE.]</b> This section is effective the day after 
 28.8   the governing body of the city of Hermantown and its chief 
 28.9   clerical officer comply with Minnesota Statutes, section 
 28.10  645.021, subdivisions 2 and 3. 
 28.11     Sec. 7.  Laws 1998, chapter 389, article 8, section 43, 
 28.12  subdivision 3, is amended to read: 
 28.13     Subd. 3.  [USE OF REVENUES.] Revenues received from the 
 28.14  taxes authorized by subdivisions 1 and 2 must be used by the 
 28.15  city to pay for the cost of collecting and administering the 
 28.16  taxes and to pay for the following projects: 
 28.17     (1) transportation infrastructure improvements including 
 28.18  both regional highway and airport improvements; 
 28.19     (2) improvements to the civic center complex; 
 28.20     (3) a municipal water, sewer, and storm sewer project 
 28.21  necessary to improve regional ground water quality; and 
 28.22     (4) construction of a regional recreation and sports center 
 28.23  and associated other facilities available for both community and 
 28.24  student use, that are located on state-owned land at or adjacent 
 28.25  to the Rochester center. 
 28.26  The total amount of capital expenditures or bonds for these 
 28.27  projects that may be paid from the revenues raised from the 
 28.28  taxes authorized in this section may not exceed 
 28.29  $71,500,000 $111,500,000.  The total amount of capital 
 28.30  expenditures or bonds for the project in clause (4) that may be 
 28.31  paid from the revenues raised from the taxes authorized in this 
 28.32  section may not exceed $20,000,000 $28,000,000. 
 28.33     <b>[EFFECTIVE DATE.]</b> This section is effective the day after 
 28.34  the governing body of Rochester and its chief clerical officer 
 28.35  timely complete their compliance with Minnesota Statutes, 
 28.36  section 645.021, subdivisions 2 and 3. 
 29.1      Sec. 8.  Laws 1998, chapter 389, article 8, section 43, 
 29.2   subdivision 4, is amended to read: 
 29.3      Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
 29.4   under Minnesota Statutes, chapter 475, to finance the capital 
 29.5   expenditure and improvement projects.  An election to approve 
 29.6   the bonds under Minnesota Statutes, section 475.58, may be held 
 29.7   in combination with the election to authorize imposition of the 
 29.8   tax under subdivision 1.  Whether to permit imposition of the 
 29.9   tax and issuance of bonds may be posed to the voters as a single 
 29.10  question.  The question must state that the sales tax revenues 
 29.11  are pledged to pay the bonds, but that the bonds are general 
 29.12  obligations and will be guaranteed by the city's property taxes. 
 29.13     (b) The issuance of bonds under this subdivision is not 
 29.14  subject to Minnesota Statutes, section 275.60. 
 29.15     (c) The bonds are not included in computing any debt 
 29.16  limitation applicable to the city, and the levy of taxes under 
 29.17  Minnesota Statutes, section 475.61, to pay principal of and 
 29.18  interest on the bonds is not subject to any levy limitation. 
 29.19  The aggregate principal amount of bonds, plus the aggregate of 
 29.20  the taxes used directly to pay eligible capital expenditures and 
 29.21  improvements may not exceed $71,500,000 $111,500,000, plus an 
 29.22  amount equal to the costs related to issuance of the bonds. 
 29.23     (d) The taxes may be pledged to and used for the payment of 
 29.24  the bonds and any bonds issued to refund them, only if the bonds 
 29.25  and any refunding bonds are general obligations of the city. 
 29.26     <b>[EFFECTIVE DATE.]</b> This section is effective the day after 
 29.27  the governing body of Rochester and its chief clerical officer 
 29.28  timely complete their compliance with Minnesota Statutes, 
 29.29  section 645.021, subdivisions 2 and 3. 
 29.30     Sec. 9.  Laws 1999, chapter 243, article 4, section 18, 
 29.31  subdivision 1, is amended to read:  
 29.32     Subdivision 1.  [SALES AND USE TAX.] (a) Notwithstanding 
 29.33  Minnesota Statutes, section 297A.48, subdivision 1a, 477A.016, 
 29.34  or any other provision of law, ordinance, or city charter, if 
 29.35  approved by the city voters at the first municipal general 
 29.36  election held after the date of final enactment of this act or 
 30.1   at a special election held November 2, 1999, the city of Proctor 
 30.2   may impose by ordinance a sales and use tax of up to one-half of 
 30.3   one percent for the purposes specified in subdivision 3, 
 30.4   paragraph (a).  The provisions of Minnesota Statutes, 
 30.5   section 297A.48 297A.99, govern the imposition, administration, 
 30.6   collection, and enforcement of the tax authorized under this 
 30.7   subdivision. 
 30.8      (b) The city of Proctor may impose by ordinance an 
 30.9   additional sales and use tax of up to one-half of one percent if 
 30.10  approved by the city voters at a general election or at a 
 30.11  special election held for this purpose.  The revenues received 
 30.12  from this additional tax must be used for the purposes specified 
 30.13  in subdivision 3, paragraph (b).  
 30.14     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 30.15  following final enactment, upon compliance by the city of 
 30.16  Proctor with Minnesota Statutes, section 645.021, subdivision 3. 
 30.17     Sec. 10.  Laws 1999, chapter 243, article 4, section 18, 
 30.18  subdivision 3, is amended to read:  
 30.19     Subd. 3.  [USE OF REVENUES.] (a) Revenues received from 
 30.20  taxes authorized by subdivisions 1, paragraph (a), and 2 must be 
 30.21  used by the city to pay the cost of collecting the taxes and to 
 30.22  pay for construction and improvement of the following city 
 30.23  facilities: 
 30.24     (1) streets; and 
 30.25     (2) constructing and equipping the Proctor community 
 30.26  activity center. 
 30.27     Authorized expenses include, but are not limited to, 
 30.28  acquiring property, paying construction and operating expenses 
 30.29  related to the development of an authorized facility, and paying 
 30.30  debt service on bonds or other obligations, including lease 
 30.31  obligations, issued to finance the construction, expansion, or 
 30.32  improvement of an authorized facility.  The capital expenses for 
 30.33  all projects authorized under this paragraph that may be paid 
 30.34  with these taxes is limited to $3,600,000, plus an amount equal 
 30.35  to the costs related to issuance of the bonds. 
 30.36     (b) Revenues received from taxes authorized by subdivision 
 31.1   1, paragraph (b), must be used by the city to pay the cost of 
 31.2   collecting the taxes and for construction and improvements of 
 31.3   city streets, public utilities, sidewalks, bikeways, and trails. 
 31.4      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 31.5   following final enactment, upon compliance by the city of 
 31.6   Proctor with Minnesota Statutes, section 645.021, subdivision 3. 
 31.7      Sec. 11.  Laws 1999, chapter 243, article 4, section 18, 
 31.8   subdivision 4, is amended to read:  
 31.9      Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
 31.10  under Minnesota Statutes, chapter 475, to finance the capital 
 31.11  expenditure and improvement projects described in subdivision 
 31.12  3.  An election to approve the bonds under Minnesota Statutes, 
 31.13  section 475.58, is not required. 
 31.14     (b) The issuance of bonds under this subdivision is not 
 31.15  subject to Minnesota Statutes, sections 275.60 and 279.61 275.61.
 31.16     (c) The bonds are not included in computing any debt 
 31.17  limitation applicable to the city, and the levy of taxes under 
 31.18  Minnesota Statutes, section 475.61, to pay principal of and 
 31.19  interest on the bonds is not subject to any levy limitation.  
 31.20     (d) For projects described in subdivision 3, paragraph (a), 
 31.21  the aggregate principal amount of bonds, plus the aggregate of 
 31.22  the taxes used directly to pay eligible capital expenditures and 
 31.23  improvements, may not exceed $3,600,000, plus an amount equal to 
 31.24  the costs related to issuance of the bonds, including interest 
 31.25  on the bonds.  For projects described in subdivision 3, 
 31.26  paragraph (b), the aggregate principal amount of bonds may not 
 31.27  exceed $7,200,000, plus an amount equal to the costs related to 
 31.28  issuance of the bonds, including interest on the bonds.  
 31.29     (e) The sales and use and excise taxes authorized in this 
 31.30  section may be pledged to and used for the payment of the bonds 
 31.31  and any bonds issued to refund them only if the bonds and any 
 31.32  refunding bonds are general obligations of the city. 
 31.33     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 31.34  following final enactment, upon compliance by the city of 
 31.35  Proctor with Minnesota Statutes, section 645.021, subdivision 3. 
 31.36     Sec. 12.  [CITY OF BEAVER BAY; TAXES AUTHORIZED.] 
 32.1      Subdivision 1.  [SALES AND USE TAXES.] Notwithstanding 
 32.2   Minnesota Statutes, section 477A.016, or any other provision of 
 32.3   law or ordinance, if approved by the voters of the city at the 
 32.4   next general election held after the date of final enactment of 
 32.5   this act, the city of Beaver Bay may impose by ordinance a sales 
 32.6   and use tax at a rate of up to one percent for the purposes 
 32.7   specified in subdivision 2.  The provisions of Minnesota 
 32.8   Statutes, section 297A.99, govern the imposition, 
 32.9   administration, collection, and enforcement of the tax 
 32.10  authorized under this subdivision. 
 32.11     Subd. 2.  [USE OF REVENUES.] The revenues received from 
 32.12  taxes authorized by subdivision 1 must be used to pay the bonded 
 32.13  indebtedness on the city community building and to provide 
 32.14  funding for recreational facilities, the upgrading of the water 
 32.15  and sewer system, upgrading and replacement of fire equipment, 
 32.16  and improvement of streets. 
 32.17     Subd. 3.  [TERMINATION OF TAXES.] The authority granted 
 32.18  under subdivision 1 to the city of Beaver Bay to impose sales 
 32.19  and use taxes expires when the city council determines that the 
 32.20  amount of revenue received to pay the costs of the projects 
 32.21  described in subdivision 2 shall meet or exceed $1,500,000.  Any 
 32.22  funds remaining after completion of the projects may be placed 
 32.23  in the general fund of the city.  The tax imposed under 
 32.24  subdivision 1 may expire at an earlier time if the city so 
 32.25  determines by ordinance. 
 32.26     <b>[EFFECTIVE DATE.]</b> This section is effective the day after 
 32.27  the governing body of the city of Beaver Bay and its chief 
 32.28  clerical officer timely comply with Minnesota Statutes, section 
 32.29  645.021, subdivisions 2 and 3. 
 32.30     Sec. 13.  [CITY OF BEMIDJI.] 
 32.31     Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] 
 32.32  Notwithstanding Minnesota Statutes, section 477A.016, or any 
 32.33  other provision of law, ordinance, or city charter, pursuant to 
 32.34  the approval of the city voters at the general election held on 
 32.35  November 5, 2002, the city of Bemidji may impose by ordinance a 
 32.36  sales and use tax of one-half of one percent for the purposes 
 33.1   specified in subdivision 2.  The provisions of Minnesota 
 33.2   Statutes, section 297A.99, govern the imposition, 
 33.3   administration, collection, and enforcement of the tax 
 33.4   authorized under this subdivision. 
 33.5      Subd. 2.  [USE OF REVENUES.] Revenues received from the tax 
 33.6   authorized by subdivision 1 must be used for the cost of 
 33.7   collecting and administering the tax and to pay all or part of 
 33.8   the capital or administrative costs of the acquisition, 
 33.9   construction, and improvement of parks and trails within the 
 33.10  city, as provided for in the city of Bemidji's parks, open space 
 33.11  and trail system plan, adopted by the Bemidji city council on 
 33.12  November 21, 2001.  Authorized expenses include, but are not 
 33.13  limited to, acquiring property, paying construction expenses 
 33.14  related to the development of these facilities and improvements, 
 33.15  and securing and paying debt service on bonds or other 
 33.16  obligations issued to finance acquisition, construction, 
 33.17  improvement, or development of parks and trails within the city 
 33.18  of Bemidji. 
 33.19     Subd. 3.  [BONDS.] Pursuant to the approval of the city 
 33.20  voters at the general election held on November 5, 2002, the 
 33.21  city of Bemidji may issue without additional election general 
 33.22  obligation bonds of the city in an amount not to exceed 
 33.23  $9,826,000 to pay capital and administrative expenses for the 
 33.24  acquisition, construction, improvement, and development of parks 
 33.25  and trails as specified in subdivision 2.  The debt represented 
 33.26  by the bonds must not be included in computing any debt 
 33.27  limitations applicable to the city, and the levy of taxes 
 33.28  required by Minnesota Statutes, section 475.61, to pay the 
 33.29  principal of any interest on the bonds must not be subject to 
 33.30  any levy limitations or be included in computing or applying any 
 33.31  levy limitation applicable to the city. 
 33.32     Subd. 4.  [TERMINATION OF TAX.] The tax imposed under 
 33.33  subdivision 1 expires when the Bemidji city council determines 
 33.34  that the amount described in subdivision 3 has been received 
 33.35  from the tax to finance the capital and administrative costs for 
 33.36  acquisition, construction, improvement, and development of parks 
 34.1   and trails and to repay or retire at maturity the principal, 
 34.2   interest, and premium due on any bonds issued for the park and 
 34.3   trail improvements under subdivision 3.  Any funds remaining 
 34.4   after completion of the park and trail improvements and 
 34.5   retirement or redemption of the bonds may be placed in the 
 34.6   general fund of the city.  The tax imposed under subdivision 1 
 34.7   may expire at an earlier time if the city so determines by 
 34.8   ordinance. 
 34.9      Subd. 5.  [EXEMPTION.] Products and services used for 
 34.10  repair or maintenance of aircraft are exempt from the taxes 
 34.11  imposed under this section. 
 34.12     <b>[EFFECTIVE DATE.]</b> This section is effective the day after 
 34.13  compliance by the governing body of the city of Bemidji with 
 34.14  Minnesota Statutes, section 645.021, subdivision 3. 
 34.15     Sec. 14.  [CITY OF CLOQUET; TAXES AUTHORIZED.] 
 34.16     Subdivision 1.  [SALES AND USE TAX.] Notwithstanding 
 34.17  Minnesota Statutes, section 477A.016, or any other provision of 
 34.18  law, ordinance, or city charter, if approved by the voters 
 34.19  pursuant to Minnesota Statutes, section 297A.99, the city of 
 34.20  Cloquet may impose by ordinance a sales and use tax of up to 
 34.21  one-half of one percent for the purpose specified in subdivision 
 34.22  3.  The provisions of Minnesota Statutes, section 297A.99, 
 34.23  govern the imposition, administration, collection, and 
 34.24  enforcement of the tax authorized under this subdivision. 
 34.25     Subd. 2.  [EXCISE TAX AUTHORIZED.] Notwithstanding 
 34.26  Minnesota Statutes, section 477A.016, or any other provision of 
 34.27  law, ordinance, or city charter, the city of Cloquet may impose 
 34.28  by ordinance, for the purposes specified in subdivision 3, an 
 34.29  excise tax of up to $20 per motor vehicle, as defined by 
 34.30  ordinance, purchased or acquired from any person engaged within 
 34.31  the city in the business of selling motor vehicles at retail. 
 34.32     Subd. 3.  [USE OF REVENUES.] Revenues received from taxes 
 34.33  authorized by subdivisions 1 and 2 must be used by the city to 
 34.34  pay the cost of collecting the taxes and to pay for the 
 34.35  following projects: 
 34.36     (1) construction and implementation of riverfront task 
 35.1   force park improvements including Veteran's Park; and 
 35.2      (2) extension of water and sewer lines and other 
 35.3   improvements to city infrastructure necessary for construction 
 35.4   of a city industrial park. 
 35.5      Authorized expenses include, but are not limited to, 
 35.6   acquiring property and paying construction expenses related to 
 35.7   these improvements, and paying debt service on bonds or other 
 35.8   obligations issued to finance acquisition and construction of 
 35.9   these improvements. 
 35.10     Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
 35.11  under Minnesota Statutes, chapter 475, to pay capital and 
 35.12  administrative expenses for the improvements described in 
 35.13  subdivision 3 in an amount that does not exceed $6,000,000.  An 
 35.14  election to approve the bonds under Minnesota Statutes, section 
 35.15  475.58, is not required. 
 35.16     (b) The issuance of bonds under this subdivision is not 
 35.17  subject to Minnesota Statutes, sections 275.60 and 275.61. 
 35.18     (c) The debt represented by the bonds is not included in 
 35.19  computing any debt limitation applicable to the city, and any 
 35.20  levy of taxes under Minnesota Statutes, section 475.61, to pay 
 35.21  principal of and interest on the bonds is not subject to any 
 35.22  levy limitation.  
 35.23     Subd. 5.  [TERMINATION OF TAXES.] The taxes imposed under 
 35.24  subdivisions 1 and 2 expire at the earlier of (1) 12 years, or 
 35.25  (2) when the city council determines that sufficient funds have 
 35.26  been received from the taxes to finance the capital and 
 35.27  administrative costs of the improvements described in 
 35.28  subdivision 3, plus the additional amount needed to pay the 
 35.29  costs related to issuance of bonds under subdivision 4, 
 35.30  including interest on the bonds.  Any funds remaining after 
 35.31  completion of the project and retirement or redemption of the 
 35.32  bonds may be placed in the general fund of the city.  The taxes 
 35.33  imposed under subdivisions 1 and 2 may expire at an earlier time 
 35.34  if the city so determines by ordinance. 
 35.35     <b>[EFFECTIVE DATE.]</b> This section is effective the day after 
 35.36  the governing body of the city of Cloquet and its chief clerical 
 36.1   officer timely comply with Minnesota Statutes, section 645.021, 
 36.2   subdivisions 2 and 3. 
 36.3      Sec. 15.  [CITY OF HOPKINS; FOOD AND BEVERAGE TAX.] 
 36.4      Subdivision 1.  [SALES AND USE TAX.] Notwithstanding 
 36.5   Minnesota Statutes, section 477A.016, or any ordinance, city 
 36.6   charter, or other provision of law, the city of Hopkins may, by 
 36.7   ordinance, impose a sales tax of up to one percent on the gross 
 36.8   receipts of all food and beverages, including on-sale 
 36.9   intoxicating beverages and fermented malt beverages, sold at 
 36.10  licensed on-sale liquor establishments, restaurants, or other 
 36.11  places of refreshment located within the geographic boundaries 
 36.12  of the city.  The imposition of this tax is subject to the 
 36.13  referendum requirement in subdivision 3. 
 36.14     Subd. 2.  [USE OF PROCEEDS FROM FOOD AND BEVERAGE TAX.] The 
 36.15  proceeds of any tax imposed under subdivision 1 shall be used by 
 36.16  the city to fund public arts purposes.  Authorized expenses 
 36.17  include, but are not limited to, expenses related to public art 
 36.18  facilities, community or public arts projects, or purchase or 
 36.19  acquisition of art for public purposes. 
 36.20     Subd. 3.  [REFERENDUM.] The tax must not be imposed until 
 36.21  it has been submitted to the voters at a general or special 
 36.22  election and a majority of votes cast on the question of 
 36.23  approving the imposition of the tax is in the affirmative. 
 36.24     Subd. 4.  [ENFORCEMENT, COLLECTION, AND ADMINISTRATION OF 
 36.25  THE TAX.] The tax shall be collected and administered in the 
 36.26  same manner as general local sales taxes under Minnesota 
 36.27  Statutes, section 297A.99, subdivision 9.  
 36.28     Subd. 5.  [EXPIRATION.] The tax imposed under this section 
 36.29  expires five years after it first becomes effective. 
 36.30     <b>[EFFECTIVE DATE.]</b> This section is effective upon approval 
 36.31  by the city of Hopkins city council and compliance with 
 36.32  Minnesota Statutes, section 645.021, subdivision 3. 
 36.33     Sec. 16.  [LODGING TAX; ITASCA COUNTY AUTHORITY.] 
 36.34     Notwithstanding Minnesota Statutes, section 469.190, 
 36.35  subdivisions 1 and 4, no town located in Itasca county may 
 36.36  impose the local lodging tax authorized in Minnesota Statutes, 
 37.1   section 469.190, but the county of Itasca may impose the local 
 37.2   lodging tax authorized in that section in all towns and 
 37.3   unorganized territories within the county.  Any existing taxes 
 37.4   imposed by a town in that county will expire the day that a 
 37.5   county tax is imposed under this section. 
 37.6      If the county board exercises the authority under this 
 37.7   section, it must determine by resolution that imposition of the 
 37.8   tax is in the county's interest.  The resolution is subject to 
 37.9   the same notice and reverse referendum requirements that would 
 37.10  apply under Minnesota Statutes, section 469.190, subdivision 5, 
 37.11  if the county was only imposing the tax in an unorganized 
 37.12  territory.  The provisions of Minnesota Statutes, section 
 37.13  469.190, subdivisions 2, 3, 6, and 7, also apply to a tax 
 37.14  imposed under this section. 
 37.15     <b>[EFFECTIVE DATE.]</b> This section is effective the day after 
 37.16  the governing body of Itasca county and its chief clerical 
 37.17  officer comply with Minnesota Statutes, section 645.021, 
 37.18  subdivisions 2 and 3. 
 37.19     Sec. 17.  [CITY OF MEDFORD; SALES AND USE TAX.] 
 37.20     Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] 
 37.21  Notwithstanding Minnesota Statutes, section 477A.016, or any 
 37.22  other provision of law, ordinance, or city charter, the city of 
 37.23  Medford may, by ordinance, impose a sales and use tax of 
 37.24  one-half of one percent for the purposes specified in 
 37.25  subdivision 2.  Except as otherwise specifically provided, the 
 37.26  provisions of Minnesota Statutes, section 297A.99, govern the 
 37.27  imposition, administration, collection, and enforcement of the 
 37.28  tax authorized under this subdivision. 
 37.29     Subd. 2.  [USE OF REVENUES.] The proceeds of the tax 
 37.30  imposed under this section must be used to pay up to $5,000,000 
 37.31  in costs related to improving the city's wastewater system and 
 37.32  wastewater treatment plant. 
 37.33     Subd. 3.  [REFERENDUM.] If the Medford city council 
 37.34  proposes to impose the tax authorized by this section, the 
 37.35  question of imposing the tax must be submitted to the voters at 
 37.36  the next general election.  The tax may not be imposed unless 
 38.1   the majority of votes cast on the question of imposing the tax 
 38.2   are in the affirmative.  The commissioner of revenue shall 
 38.3   prepare a suggested form of the question to be presented at the 
 38.4   election.  The question must state that the sales tax revenues 
 38.5   would be pledged to pay any bonds issued under subdivision 4 and 
 38.6   that these bonds are guaranteed by the city's property taxes. 
 38.7      Subd. 4.  [BONDING AUTHORITY.] (a) The city may issue bonds 
 38.8   under Minnesota Statutes, chapter 475, to finance the capital 
 38.9   expenditure and improvement projects authorized under 
 38.10  subdivision 2.  The total amount of bonds issued for the 
 38.11  projects listed in subdivision 2 may not exceed $5,000,000 in 
 38.12  aggregate.  An election to approve the bonds, as required under 
 38.13  Minnesota Statutes, section 475.58, is not required. 
 38.14     (b) The issuance of the bonds under this subdivision is not 
 38.15  subject to Minnesota Statutes, sections 275.60 and 275.61. 
 38.16     (c) The bonds are not included in computing any debt 
 38.17  limitation applicable to the city, and the levy of taxes under 
 38.18  Minnesota Statutes, section 475.61, to pay the principal of and 
 38.19  interest on the bonds is not subject to any levy limitation. 
 38.20     (d) The taxes authorized under this section may be pledged 
 38.21  to and used for the payment of the bonds and any bonds issued to 
 38.22  refund them only if the bonds and any refunding bonds are 
 38.23  general obligations of the city. 
 38.24     Subd. 5.  [TERMINATION OF TAXES.] The taxes imposed under 
 38.25  this section expire at the earlier of (1) 20 years after the 
 38.26  taxes are first imposed, or (2) when the city council first 
 38.27  determines that the amount of revenues raised to pay for the 
 38.28  projects under subdivision 2 shall meet or exceed the sum of 
 38.29  $5,000,000, plus an amount equal to the costs related to the 
 38.30  issuance of bonds under subdivision 4.  Any funds remaining 
 38.31  after completion of the projects and retirement or redemption of 
 38.32  the bonds may be placed in the general funds of the city. 
 38.33     <b>[EFFECTIVE DATE.]</b> This section is effective the day after 
 38.34  compliance with the governing body of the city of Medford with 
 38.35  Minnesota Statutes, section 645.021, subdivision 3. 
 38.36     Sec. 18.  [CITY OF NEWPORT; LODGING TAX.] 
 39.1      Subdivision 1.  [LODGING TAX.] Notwithstanding Minnesota 
 39.2   Statutes, section 477A.016, or any ordinance, city charter, or 
 39.3   other provision of law, the city of Newport may, by ordinance, 
 39.4   impose a tax of up to four percent upon the gross receipts from 
 39.5   the sale of lodging for periods of less than 30 days in hotels 
 39.6   and motels located in the city.  The tax does not apply to the 
 39.7   furnishing of lodging by a business having less than 25 lodging 
 39.8   rooms.  The total amount of taxes imposed under this section and 
 39.9   under Minnesota Statutes, section 469.190, shall not exceed 
 39.10  three percent. 
 39.11     Subd. 2.  [USE OF PROCEEDS.] The proceeds of any tax 
 39.12  imposed in subdivision 1 shall be used by the city to fund 
 39.13  economic development and redevelopment of the city.  Authorized 
 39.14  expenses include, but are not limited to, acquisition and 
 39.15  development costs of open space, parks, and trails. 
 39.16     Subd. 3.  [ENFORCEMENT, COLLECTION, AND 
 39.17  ADMINISTRATION.] The tax shall be collected and administered in 
 39.18  the same manner as local lodging taxes under Minnesota Statutes, 
 39.19  section 469.190. 
 39.20     <b>[EFFECTIVE DATE.]</b> This section is effective upon approval 
 39.21  by the Newport city council and compliance with Minnesota 
 39.22  Statutes, section 645.021, subdivision 3. 
 39.23     Sec. 19.  [CITY OF PARK RAPIDS.] 
 39.24     Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] 
 39.25  Notwithstanding Minnesota Statutes, section 477A.016, or any 
 39.26  other provision of law, ordinance, or city charter, pursuant to 
 39.27  the approval of the city voters at the next general election or 
 39.28  at a special election held for this purpose, the city of Park 
 39.29  Rapids may impose by ordinance a sales and use tax of one 
 39.30  percent for the purposes specified in subdivision 2.  The 
 39.31  provisions of Minnesota Statutes, section 297A.99, govern the 
 39.32  imposition, administration, collection, and enforcement of the 
 39.33  tax authorized under this subdivision. 
 39.34     Subd. 2.  [USE OF REVENUES.] Revenues received from the tax 
 39.35  authorized by subdivision 1 must be used for the cost of 
 39.36  collecting and administering the tax and to pay all or part of 
 40.1   the capital or administrative costs of the development, 
 40.2   acquisition, construction, and improvement of the following 
 40.3   projects:  
 40.4      (1) two-thirds of the cost of construction and operation of 
 40.5   a community center that may include a senior citizen center, 
 40.6   fitness center, swimming pool, meeting rooms, indoor track, and 
 40.7   racquetball, basketball, and tennis courts, provided that an 
 40.8   amount equal to one-third of the cost of construction is 
 40.9   received from private sources; 
 40.10     (2) capital improvement projects including, but not limited 
 40.11  to, installation of water, sewer, storm sewer, street 
 40.12  improvements, new city water tower and well, costs related to 
 40.13  improvements to marked trunk highway 34; and 
 40.14     (3) park improvements. 
 40.15     Authorized expenses include, but are not limited to, 
 40.16  acquiring property, paying construction expenses related to the 
 40.17  development of these facilities and improvements, and securing 
 40.18  and paying debt service on bonds or other obligations issued to 
 40.19  finance acquisition, construction, improvement, or development. 
 40.20     Subd. 3.  [BONDS.] Pursuant to the approval of the city 
 40.21  voters to impose the tax authorized in subdivision 1, the city 
 40.22  of Park Rapids may issue without an additional election general 
 40.23  obligation bonds of the city to pay capital and administrative 
 40.24  expenses for the acquisition, construction, improvement, and 
 40.25  development of the projects specified in subdivision 2.  The 
 40.26  debt represented by the bonds must not be included in computing 
 40.27  any debt limitations applicable to the city, and the levy of 
 40.28  taxes required by Minnesota Statutes, section 475.61, to pay the 
 40.29  principal or any interest on the bonds must not be subject to 
 40.30  any levy limitations or be included in computing or applying any 
 40.31  levy limitation applicable to the city. 
 40.32     Subd. 4.  [TERMINATION OF TAX.] The tax imposed under 
 40.33  subdivision 1 expires the earlier of July 1, 2023, or when the 
 40.34  city council determines that sufficient revenues have been 
 40.35  received to retire the bonds in subdivision 3.  Any funds 
 40.36  remaining after completion of the projects specified in 
 41.1   subdivision 2 and retirement or redemption of the bonds may be 
 41.2   placed in the general fund of the city.  The tax imposed under 
 41.3   subdivision 1 may expire at an earlier time if the city so 
 41.4   determines by ordinance. 
 41.5      <b>[EFFECTIVE DATE.]</b> This section is effective the day after 
 41.6   compliance by the governing body of the city of Park Rapids with 
 41.7   Minnesota Statutes, section 645.021, subdivision 3. 
 41.8      Sec. 20.  [CITY OF CLEARWATER.] 
 41.9      Subdivision 1.  [SALES AND USE TAX AUTHORIZED.] 
 41.10  Notwithstanding Minnesota Statutes, section 477A.016, or any 
 41.11  other provision of law, ordinance, or city charter, pursuant to 
 41.12  the approval of the city voters at the next general election or 
 41.13  at a special election held for this purpose, the city of 
 41.14  Clearwater may impose by ordinance a sales and use tax of 
 41.15  one-half of one percent for the purposes specified in 
 41.16  subdivision 2.  The provisions of Minnesota Statutes, section 
 41.17  297A.99, govern the imposition, administration, collection, and 
 41.18  enforcement of the tax authorized under this subdivision. 
 41.19     Subd. 2.  [USE OF REVENUES.] Revenues received from the tax 
 41.20  authorized by subdivision 1 must be used for the cost of 
 41.21  collecting and administering the tax and to pay all or part of 
 41.22  the capital or administrative costs of the development, 
 41.23  acquisition, construction, and improvement of parks, trails, 
 41.24  parkland, open space, and land and buildings for a regional 
 41.25  community and recreation center.  Authorized expenses include, 
 41.26  but are not limited to, acquiring property, paying construction 
 41.27  expenses related to the development of these facilities and 
 41.28  improvements, and securing and paying debt service on bonds or 
 41.29  other obligations issued to finance acquisition, construction, 
 41.30  improvement, or development. 
 41.31     Subd. 3.  [BONDS.] Pursuant to the approval of the city 
 41.32  voters to impose the tax authorized in subdivision 1, the city 
 41.33  of Clearwater may issue without an additional election general 
 41.34  obligation bonds of the city in an amount not to exceed 
 41.35  $3,000,000 to pay capital and administrative expenses for the 
 41.36  acquisition, construction, improvement, and development of the 
 42.1   projects specified in subdivision 2.  The debt represented by 
 42.2   the bonds must not be included in computing any debt limitations 
 42.3   applicable to the city, and the levy of taxes required by 
 42.4   Minnesota Statutes, section 475.61, to pay the principal or any 
 42.5   interest on the bonds must not be subject to any levy 
 42.6   limitations or be included in computing or applying any levy 
 42.7   limitation applicable to the city. 
 42.8      Subd. 4.  [TERMINATION OF TAX.] The tax imposed under 
 42.9   subdivision 1 expires when the Clearwater city council 
 42.10  determines that the amount described in subdivision 3 has been 
 42.11  received from the tax to finance the capital and administrative 
 42.12  costs for acquisition, construction, improvement, and 
 42.13  development of the projects specified in subdivision 2 and to 
 42.14  repay or retire at maturity the principal, interest, and premium 
 42.15  due on any bonds issued for the projects under subdivision 3.  
 42.16  Any funds remaining after completion of the projects specified 
 42.17  in subdivision 2 and retirement or redemption of the bonds may 
 42.18  be placed in the general fund of the city.  The tax imposed 
 42.19  under subdivision 1 may expire at an earlier time if the city so 
 42.20  determines by ordinance. 
 42.21     <b>[EFFECTIVE DATE.]</b> This section is effective the day after 
 42.22  compliance by the governing body of the city of Clearwater with 
 42.23  Minnesota Statutes, section 645.021, subdivision 3. 
 42.24                             ARTICLE 3
 42.25                            PROPERTY TAX
 42.26     Section 1.  Minnesota Statutes 2002, section 216B.2424, 
 42.27  subdivision 5, is amended to read: 
 42.28     Subd. 5.  [MANDATE.] (a) A public utility, as defined in 
 42.29  section 216B.02, subdivision 4, that operates a nuclear-powered 
 42.30  electric generating plant within this state must construct and 
 42.31  operate, purchase, or contract to construct and operate (1) by 
 42.32  December 31, 1998, 50 megawatts of electric energy installed 
 42.33  capacity generated by farm-grown closed-loop biomass scheduled 
 42.34  to be operational by December 31, 2001; and (2) by December 31, 
 42.35  1998, an additional 75 megawatts of installed capacity so 
 42.36  generated scheduled to be operational by December 31, 2002.  
 43.1      (b) Of the 125 megawatts of biomass electricity installed 
 43.2   capacity required under this subdivision, no more than 50 
 43.3   megawatts of this capacity may be provided by a facility that 
 43.4   uses poultry litter as its primary fuel source and any such 
 43.5   facility:  
 43.6      (1) need not use biomass that complies with the definition 
 43.7   in subdivision 1; 
 43.8      (2) must enter into a contract with the public utility for 
 43.9   such capacity, that has an average purchase price per megawatt 
 43.10  hour over the life of the contract that is equal to or less than 
 43.11  the average purchase price per megawatt hour over the life of 
 43.12  the contract in contracts approved by the public utilities 
 43.13  commission before April 1, 2000, to satisfy the mandate of this 
 43.14  section, and file that contract with the public utilities 
 43.15  commission prior to September 1, 2000; and 
 43.16     (3) must schedule such capacity to be operational by 
 43.17  December 31, 2002.  
 43.18     (c) Of the total 125 megawatts of biomass electric energy 
 43.19  installed capacity required under this section, no more than 75 
 43.20  megawatts may be provided by a single project.  
 43.21     (d) Of the 75 megawatts of biomass electric energy 
 43.22  installed capacity required under paragraph (a), clause (2), no 
 43.23  more than 25 megawatts of this capacity may be provided by a St. 
 43.24  Paul district heating and cooling system cogeneration facility 
 43.25  utilizing waste wood as a primary fuel source.  The St. Paul 
 43.26  district heating and cooling system cogeneration facility need 
 43.27  not use biomass that complies with the definition in subdivision 
 43.28  1.  
 43.29     (e) The public utility must accept and consider on an equal 
 43.30  basis with other biomass proposals: 
 43.31     (1) a proposal to satisfy the requirements of this section 
 43.32  that includes a project that exceeds the megawatt capacity 
 43.33  requirements of either paragraph (a), clause (1) or (2), and 
 43.34  that proposes to sell the excess capacity to the public utility 
 43.35  or to other purchasers; and 
 43.36     (2) a proposal for a new facility to satisfy more than ten 
 44.1   but not more than 20 megawatts of the electrical generation 
 44.2   requirements by a small business-sponsored independent power 
 44.3   producer facility to be located within the northern quarter of 
 44.4   the state, which means the area located north of Constitutional 
 44.5   Route No. 8 as described in section 161.114, subdivision 2, and 
 44.6   that utilizes biomass residue wood, sawdust, bark, chipped wood, 
 44.7   or brush to generate electricity.  A facility described in this 
 44.8   clause is not required to utilize biomass complying with the 
 44.9   definition in subdivision 1, but must have the capacity required 
 44.10  by this clause operational by December 31, 2002 2005. 
 44.11     (f) If a public utility files a contract with the 
 44.12  commission for electric energy installed capacity that uses 
 44.13  poultry litter as its primary fuel source, the commission must 
 44.14  do a preliminary review of the contract to determine if it meets 
 44.15  the purchase price criteria provided in paragraph (b), clause 
 44.16  (2), of this subdivision.  The commission shall perform its 
 44.17  review and advise the parties of its determination within 30 
 44.18  days of filing of such a contract by a public utility.  A public 
 44.19  utility may submit by September 1, 2000, a revised contract to 
 44.20  address the commission's preliminary determination.  
 44.21     (g) The commission shall finally approve, modify, or 
 44.22  disapprove no later than July 1, 2001, all contracts submitted 
 44.23  by a public utility as of September 1, 2000, to meet the mandate 
 44.24  set forth in this subdivision.  
 44.25     (h) If a public utility subject to this section exercises 
 44.26  an option to increase the generating capacity of a project in a 
 44.27  contract approved by the commission prior to April 25, 2000, to 
 44.28  satisfy the mandate in this subdivision, the public utility must 
 44.29  notify the commission by September 1, 2000, that it has 
 44.30  exercised the option and include in the notice the amount of 
 44.31  additional megawatts to be generated under the option 
 44.32  exercised.  Any review by the commission of the project after 
 44.33  exercise of such an option shall be based on the same criteria 
 44.34  used to review the existing contract. 
 44.35     (i) A facility specified in this subdivision qualifies for 
 44.36  exemption from property taxation under section 272.02, 
 45.1   subdivision 43. 
 45.2      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 45.3   following final enactment. 
 45.4      Sec. 2.  Minnesota Statutes 2002, section 270B.12, is 
 45.5   amended by adding a subdivision to read: 
 45.6      Subd. 13.  [COUNTY ASSESSORS; CLASS 1B HOMESTEADS.] The 
 45.7   commissioner may disclose to a county assessor, and to the 
 45.8   assessor's designated agents or employees, a listing of parcels 
 45.9   of property qualifying for the class 1b property tax 
 45.10  classification under section 273.13, subdivision 22. 
 45.11     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 45.12  following final enactment. 
 45.13     Sec. 3.  Minnesota Statutes 2002, section 272.02, 
 45.14  subdivision 26, is amended to read: 
 45.15     Subd. 26.  [LOW-INCOME HOUSING.] A structure that is 
 45.16  situated on real property is exempt if it is used for: 
 45.17     (i) housing for the elderly or for low- and moderate-income 
 45.18  families as defined in Title II of the National Housing Act, as 
 45.19  amended through December 31, 1990, and funded by a direct 
 45.20  federal loan or federally insured loan made pursuant to Title II 
 45.21  of the act; or 
 45.22     (ii) housing lower income families or elderly or 
 45.23  handicapped persons, as defined in Section 8 of the United 
 45.24  States Housing Act of 1937, as amended. 
 45.25     In order for a structure to be exempt under item (i) or 
 45.26  (ii), it must also meet each of the following criteria: 
 45.27     (A) is owned by an entity which is operated as a nonprofit 
 45.28  corporation organized under chapter 317A; 
 45.29     (B) is owned by an entity which has not entered into a 
 45.30  housing assistance payments contract under Section 8 of the 
 45.31  United States Housing Act of 1937, or, if the entity which owns 
 45.32  the structure has entered into a housing assistance payments 
 45.33  contract under Section 8 of the United States Housing Act of 
 45.34  1937, the contract provides assistance for less than 90 percent 
 45.35  of the dwelling units in the structure, excluding dwelling units 
 45.36  intended for management or maintenance personnel; 
 46.1      (C) operates an on-site congregate dining program in which 
 46.2   participation by residents is mandatory, and provides assisted 
 46.3   living or similar social and physical support services for 
 46.4   residents; and 
 46.5      (D)(1) was not assessed and did not pay tax under chapter 
 46.6   273 prior to the 1991 levy, while meeting the other conditions 
 46.7   of this subdivision; or 
 46.8      (2) is physically attached to a church exempt from taxation 
 46.9   under subdivision 6, and not less than 30 percent of the units 
 46.10  therein are occupied by individuals or families whose annual 
 46.11  income does not exceed 50 percent of the median family income, 
 46.12  as most recently established by the United States Department of 
 46.13  Housing and Urban Development for the applicable standard 
 46.14  metropolitan statistical area, adjusted for family size. 
 46.15     An exemption under this subdivision remains in effect for 
 46.16  taxes levied in each year or partial year of the term of its 
 46.17  permanent financing. 
 46.18     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 46.19  following final enactment. 
 46.20     Sec. 4.  Minnesota Statutes 2002, section 272.02, 
 46.21  subdivision 31, is amended to read: 
 46.22     Subd. 31.  [BUSINESS INCUBATOR PROPERTY.] Property owned by 
 46.23  a nonprofit charitable organization that qualifies for tax 
 46.24  exemption under section 501(c)(3) of the Internal Revenue Code 
 46.25  of 1986, as amended through December 31, 1997, that is intended 
 46.26  to be used as a business incubator in a high-unemployment 
 46.27  county, is exempt.  As used in this subdivision, a "business 
 46.28  incubator" is a facility used for the development of nonretail 
 46.29  businesses, offering access to equipment, space, services, and 
 46.30  advice to the tenant businesses, for the purpose of encouraging 
 46.31  economic development, diversification, and job creation in the 
 46.32  area served by the organization, and "high-unemployment county" 
 46.33  is a county that had an average annual unemployment rate of 7.9 
 46.34  percent or greater in 1997.  Property that qualifies for the 
 46.35  exemption under this subdivision is limited to no more than two 
 46.36  contiguous parcels and structures that do not exceed in the 
 47.1   aggregate 40,000 square feet.  This exemption expires after 
 47.2   taxes payable in 2005 2011. 
 47.3      Sec. 5.  Minnesota Statutes 2002, section 272.02, 
 47.4   subdivision 47, is amended to read: 
 47.5      Subd. 47.  [POULTRY LITTER BIOMASS GENERATION FACILITY; 
 47.6   PERSONAL PROPERTY.] Notwithstanding subdivision 9, clause (a), 
 47.7   attached machinery and other personal property which is part of 
 47.8   an electrical generating facility that meets the requirements of 
 47.9   this subdivision is exempt.  At the time of construction, the 
 47.10  facility must: 
 47.11     (1) be designed to utilize poultry litter as a primary fuel 
 47.12  source; and 
 47.13     (2) be constructed for the purpose of generating power at 
 47.14  the facility that will be sold pursuant to a contract approved 
 47.15  by the public utilities commission in accordance with the 
 47.16  biomass mandate imposed under section 216B.2424. 
 47.17     Construction of the facility must be commenced after 
 47.18  January 1, 2000 2003, and before December 31, 2002 2003.  
 47.19  Property eligible for this exemption does not include electric 
 47.20  transmission lines and interconnections or gas pipelines and 
 47.21  interconnections appurtenant to the property or the facility. 
 47.22     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 47.23  levied in 2004, payable in 2005, and thereafter. 
 47.24     Sec. 6.  Minnesota Statutes 2002, section 272.02, 
 47.25  subdivision 53, is amended to read: 
 47.26     Subd. 53.  [ELECTRIC GENERATION FACILITY; PERSONAL 
 47.27  PROPERTY.] Notwithstanding subdivision 9, clause (a), attached 
 47.28  machinery and other personal property which is part of a 3.2 
 47.29  megawatt run-of-the-river hydroelectric generation facility and 
 47.30  that meets the requirements of this subdivision is exempt.  At 
 47.31  the time of construction, the facility must: 
 47.32     (1) utilize two turbine generators at a dam site existing 
 47.33  on March 31, 1994; 
 47.34     (2) be located on publicly owned land and within 1,500 feet 
 47.35  of a 13.8 kilovolt distribution substation; and 
 47.36     (3) be eligible to receive a renewable energy production 
 48.1   incentive payment under section 216C.41. 
 48.2      Construction of the facility must be commenced after 
 48.3   January 1, 2002, and before January 1, 2004 2005.  Property 
 48.4   eligible for this exemption does not include electric 
 48.5   transmission lines and interconnections or gas pipelines and 
 48.6   interconnections appurtenant to the property or the facility. 
 48.7      Sec. 7.  Minnesota Statutes 2002, section 272.02, is 
 48.8   amended by adding a subdivision to read: 
 48.9      Subd. 56.  [ELECTRIC GENERATION FACILITY PERSONAL 
 48.10  PROPERTY.] (a) Notwithstanding subdivision 9, clause (a), 
 48.11  attached machinery and other personal property which is part of 
 48.12  a combined-cycle combustion-turbine electric generation facility 
 48.13  that exceeds 150 megawatts of installed capacity and that meets 
 48.14  the requirements of this subdivision is exempt.  At the time of 
 48.15  construction, the facility must: 
 48.16     (1) utilize natural gas as a primary fuel; 
 48.17     (2) be owned by an electric generation and transmission 
 48.18  cooperative; 
 48.19     (3) be located within ten miles of parallel existing 
 48.20  24-inch and 30-inch natural gas pipelines and a 345-kilovolt 
 48.21  high-voltage electric transmission line; and 
 48.22     (4) be designed to provide intermediate energy and 
 48.23  ancillary services, and have received a certificate of need 
 48.24  under section 216B.243, demonstrating demand for its capacity. 
 48.25     (b) Construction of the facility must be commenced after 
 48.26  January 1, 2004, and before January 1, 2009.  Property eligible 
 48.27  for this exemption does not include electric transmission lines 
 48.28  and interconnections or gas pipelines and interconnections 
 48.29  appurtenant to the property or the facility. 
 48.30     (c) The exemption under this section will take effect only 
 48.31  if the owner of the facility enters into agreements with the 
 48.32  governing bodies of the county and the city or town in which the 
 48.33  facility is located.  The agreements may include a requirement 
 48.34  that the facility must pay a host fee to compensate the county 
 48.35  and city or town for hosting the facility. 
 48.36     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 49.1   levied in 2005, payable in 2006, and thereafter. 
 49.2      Sec. 8.  Minnesota Statutes 2002, section 272.02, is 
 49.3   amended by adding a subdivision to read: 
 49.4      Subd. 57.  [ELECTRIC GENERATION FACILITY PERSONAL 
 49.5   PROPERTY.] (a) Notwithstanding subdivision 9, clause (a), 
 49.6   attached machinery and other personal property which is part of 
 49.7   a combined-cycle combustion-turbine electric generation facility 
 49.8   that exceeds 550 megawatts of installed capacity and that meets 
 49.9   the requirements of this subdivision is exempt.  At the time of 
 49.10  construction, the facility must: 
 49.11     (1) be designed to utilize natural gas as a primary fuel; 
 49.12     (2) not be owned by a public utility as defined in section 
 49.13  216B.02, subdivision 4; 
 49.14     (3) be located within five miles of an existing natural gas 
 49.15  pipeline and within four miles of an existing electrical 
 49.16  transmission substation; and 
 49.17     (4) be designed to provide energy and ancillary services 
 49.18  and have received a certificate of need under section 216B.243. 
 49.19     (b) Construction of the facility must be commenced after 
 49.20  January 1, 2004, and before January 1, 2007.  Property eligible 
 49.21  for this exemption does not include electric transmission lines 
 49.22  and interconnections or gas pipelines and interconnections 
 49.23  appurtenant to the property or the facility. 
 49.24     <b>[EFFECTIVE DATE.]</b> This section is effective for assessment 
 49.25  year 2005, taxes payable in 2006, and thereafter. 
 49.26     Sec. 9.  Minnesota Statutes 2002, section 273.01, is 
 49.27  amended to read: 
 49.28     273.01 [LISTING AND ASSESSMENT, TIME.] 
 49.29     All real property subject to taxation shall be listed and 
 49.30  at least one-fourth one-fifth of the parcels listed shall be 
 49.31  appraised each year with reference to their value on January 2 
 49.32  preceding the assessment so that each parcel shall be 
 49.33  reappraised at maximum intervals of four five years.  All real 
 49.34  property becoming taxable in any year shall be listed with 
 49.35  reference to its value on January 2 of that year.  Except as 
 49.36  provided in this section and section 274.01, subdivision 1, all 
 50.1   real property assessments shall be completed two weeks prior to 
 50.2   the date scheduled for the local board of review or 
 50.3   equalization.  No changes in valuation or classification which 
 50.4   are intended to correct errors in judgment by the county 
 50.5   assessor may be made by the county assessor after the board of 
 50.6   review or the county board of equalization has adjourned; 
 50.7   however, corrections of errors that are merely clerical in 
 50.8   nature or changes that extend homestead treatment to property 
 50.9   are permitted after adjournment until the tax extension date for 
 50.10  that assessment year.  Any changes made by the assessor after 
 50.11  adjournment must be fully documented and maintained in a file in 
 50.12  the assessor's office and shall be available for review by any 
 50.13  person.  A copy of any changes made during this period shall be 
 50.14  sent to the county board no later than December 31 of the 
 50.15  assessment year.  In the event a valuation and classification is 
 50.16  not placed on any real property by the dates scheduled for the 
 50.17  local board of review or equalization the valuation and 
 50.18  classification determined in the preceding assessment shall be 
 50.19  continued in effect and the provisions of section 273.13 shall, 
 50.20  in such case, not be applicable, except with respect to real 
 50.21  estate which has been constructed since the previous 
 50.22  assessment.  Real property containing iron ore, the fee to which 
 50.23  is owned by the state of Minnesota, shall, if leased by the 
 50.24  state after January 2 in any year, be subject to assessment for 
 50.25  that year on the value of any iron ore removed under said lease 
 50.26  prior to January 2 of the following year.  Personal property 
 50.27  subject to taxation shall be listed and assessed annually with 
 50.28  reference to its value on January 2; and, if acquired on that 
 50.29  day, shall be listed by or for the person acquiring it.  
 50.30     <b>[EFFECTIVE DATE.]</b> This section is effective for assessments 
 50.31  on or after January 2, 2004. 
 50.32     Sec. 10.  Minnesota Statutes 2002, section 273.08, is 
 50.33  amended to read: 
 50.34     273.08 [ASSESSOR'S DUTIES.] 
 50.35     The assessor shall actually view, and determine the market 
 50.36  value of each tract or lot of real property listed for taxation, 
 51.1   including the value of all improvements and structures thereon, 
 51.2   at maximum intervals of four five years and shall enter the 
 51.3   value opposite each description. 
 51.4      <b>[EFFECTIVE DATE.]</b> This section is effective for assessments 
 51.5   on or after January 2, 2004. 
 51.6      Sec. 11.  Minnesota Statutes 2002, section 273.11, is 
 51.7   amended by adding a subdivision to read: 
 51.8      Subd. 21.  [VALUATION EXCLUSION FOR LEAD PAINT 
 51.9   REMOVAL.] Owners of property classified as class 1a, 1b, 1c, 2a, 
 51.10  4b, or 4bb under section 273.13 may apply for a valuation 
 51.11  exclusion under this subdivision, provided that the property is 
 51.12  located in a city which has authorized valuation exclusions 
 51.13  under this subdivision.  A city which authorizes valuation 
 51.14  exclusions under this subdivision must establish guidelines for 
 51.15  qualifying lead paint removal projects and must designate an 
 51.16  agency within the city to issue certificates of completion of 
 51.17  qualifying projects. 
 51.18     The property owner must obtain a certificate from the city 
 51.19  stating that the project has been completed and the cost 
 51.20  incurred by the owner in completing the project.  Only projects 
 51.21  originating after April 1, 2003, may qualify for exclusion under 
 51.22  this subdivision.  The property owner shall apply for a 
 51.23  valuation exclusion to the assessor on a form prescribed by the 
 51.24  assessor. 
 51.25     A qualifying property is eligible for a valuation exclusion 
 51.26  equal to 50 percent of the actual costs incurred, to a maximum 
 51.27  exclusion of $10,000, for a period of five years.  The valuation 
 51.28  exclusion shall terminate upon the sale of the property.  If a 
 51.29  property owner applies for exclusion under this subdivision 
 51.30  between January 1 and June 30 of any year, the exclusion shall 
 51.31  first apply for taxes payable in the following year.  If a 
 51.32  property owner applies for exclusion under this subdivision 
 51.33  between July 1 and December 31 of any year, the exclusion shall 
 51.34  first apply for taxes payable in the second following year. 
 51.35     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 51.36  payable in 2004 and subsequent years. 
 52.1      Sec. 12.  Minnesota Statutes 2002, section 273.11, is 
 52.2   amended by adding a subdivision to read: 
 52.3      Subd. 22.  [VALUATION OF CLASS 4D CERTIFIED PROPERTY.] In 
 52.4   determining the market value of class 4d rental property 
 52.5   certified under section 462A.071, the assessor shall reduce the 
 52.6   value of the property by its restricted use value.  "Restricted 
 52.7   use value" is the amount of market value reduction that results 
 52.8   from the restrictions on uses that qualify the property for 
 52.9   certification as class 4d under section 273.13, subdivision 25, 
 52.10  paragraph (e).  The assessor shall determine the restricted use 
 52.11  value of the property using guidelines set by the commissioner 
 52.12  of revenue. 
 52.13     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 52.14  levied in 2003, payable in 2004, and thereafter. 
 52.15     Sec. 13.  Minnesota Statutes 2002, section 273.11, is 
 52.16  amended by adding a subdivision to read: 
 52.17     Subd. 23.  [VALUATION EXCLUSION FOR SEWAGE TREATMENT SYSTEM 
 52.18  IMPROVEMENTS.] Owners of property classified as class 1a, 1b, 
 52.19  1c, 2a, 4b, 4bb, or noncommercial 4c under section 273.13 may 
 52.20  apply for a valuation exclusion under this subdivision, provided 
 52.21  that the following conditions are met: 
 52.22     (1) a notice of noncompliance has been issued by a licensed 
 52.23  compliance inspector with regard to the individual sewage 
 52.24  treatment system serving the property under section 115.55, 
 52.25  subdivision 5b; 
 52.26     (2) the owner of the property furnishes documentation to 
 52.27  the satisfaction of the assessor that the property's individual 
 52.28  sewage treatment system has been replaced or refurbished between 
 52.29  January 1, 2003, and December 31, 2007; and 
 52.30     (3) a certificate of compliance has been issued for the new 
 52.31  or refurbished system under section 115.55, subdivision 5. 
 52.32     Application shall be made to the assessor on a form 
 52.33  prescribed by the assessor.  Property meeting the requirements 
 52.34  above shall be eligible for a valuation exclusion equal to 50 
 52.35  percent of the actual costs incurred, to a maximum exclusion of 
 52.36  $7,500, for a period of five years.  The valuation exclusion 
 53.1   shall terminate upon the sale of the property.  If a property 
 53.2   owner applies for exclusion under this subdivision between 
 53.3   January 1 and June 30 of any year, the exclusion shall first 
 53.4   apply for taxes payable in the following year.  If a property 
 53.5   owner applies for exclusion under this subdivision between July 
 53.6   1 and December 31 of any year, the exclusion shall first apply 
 53.7   for taxes payable in the second following year. 
 53.8      <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 53.9   payable in 2004 and subsequent years. 
 53.10     Sec. 14.  [273.1115] [HOMESTEAD RESORTS; VALUATION AND 
 53.11  DEFERMENT.] 
 53.12     Subdivision 1.  [REQUIREMENTS.] Real property qualifying 
 53.13  for classification as class 1c under section 273.13, subdivision 
 53.14  22, paragraph (c), is entitled to valuation and tax deferment 
 53.15  under this section, provided that if part of a resort is not 
 53.16  classified as class 1c, only that portion of the value of the 
 53.17  property that is classified as class 1c property qualifies under 
 53.18  this section. 
 53.19     Subd. 2.  [DETERMINATION OF VALUE.] Upon timely application 
 53.20  by the owner, as provided in subdivision 4, the value of real 
 53.21  property described in subdivision 1 must be determined by the 
 53.22  assessor solely with reference to its classification value as 
 53.23  class 1c property, notwithstanding sections 272.03, subdivision 
 53.24  8, and 273.11.  The owner must furnish information on the income 
 53.25  generated by the property and other information required by the 
 53.26  assessor to determine the value of the property.  The assessor 
 53.27  shall not consider any added values resulting from other factors.
 53.28     Subd. 3.  [SEPARATE DETERMINATION OF MARKET VALUE AND TAX.] 
 53.29  The assessor shall, however, make a separate determination of 
 53.30  the market value of the real estate.  The assessor shall record 
 53.31  on the property assessment records the tax based upon the 
 53.32  appropriate local tax rate applicable to the property in the 
 53.33  taxing district. 
 53.34     Subd. 4.  [APPLICATION.] Application for deferment of taxes 
 53.35  and assessment under this section must be filed by May 1 of the 
 53.36  year prior to the year in which the taxes are payable.  The 
 54.1   application must be filed with the assessor of the taxing 
 54.2   district in which the real property is located on a form 
 54.3   prescribed by the commissioner of revenue.  The assessor may 
 54.4   require proof by affidavit or otherwise that the property 
 54.5   qualifies under subdivision 1.  An application approved by the 
 54.6   assessor continues in effect for subsequent years until the 
 54.7   property no longer qualifies under subdivision 1. 
 54.8      Subd. 5.  [ADDITIONAL TAXES.] When real property valued and 
 54.9   assessed under this section no longer qualifies under 
 54.10  subdivision 1, the portion no longer qualifying is subject to 
 54.11  additional taxes, in the amount equal to the difference between 
 54.12  the taxes determined in accordance with subdivision 2, and the 
 54.13  amount determined under subdivision 3, provided, however, that 
 54.14  the amount determined under subdivision 3 must not be greater 
 54.15  than it would have been had the actual bona fide sale price of 
 54.16  the real property at an arms length transaction been used in 
 54.17  lieu of the market value determined under subdivision 3.  The 
 54.18  additional taxes must be extended against the property on the 
 54.19  tax list for the current year, except that no interest or 
 54.20  penalties may be levied on the additional taxes if timely paid, 
 54.21  and except that the additional taxes must only be levied with 
 54.22  respect to the last seven years that the property has been 
 54.23  valued and assessed under this section. 
 54.24     Subd. 6.  [LIEN.] The tax imposed by this section is a lien 
 54.25  on the property assessed to the same extent and for the same 
 54.26  duration as other taxes imposed on property within this state.  
 54.27  The tax must be annually extended by the county auditor and when 
 54.28  payable must be collected and distributed in the manner provided 
 54.29  by law for the collection and distribution of other property 
 54.30  taxes. 
 54.31     Subd. 7.  [SPECIAL LOCAL ASSESSMENTS.] The payment of 
 54.32  special local assessments levied after June 30, 2003, for 
 54.33  improvements made to any real property described in subdivision 
 54.34  2, together with the interest thereon must, on timely 
 54.35  application under subdivision 4, be deferred as long as the 
 54.36  property qualifies under subdivision 1.  If special assessments 
 55.1   against the property have been deferred under this subdivision, 
 55.2   the governmental unit shall file with the county recorder in the 
 55.3   county in which the property is located a certificate containing 
 55.4   the legal description of the affected property and of the amount 
 55.5   deferred.  When the property no longer qualifies under 
 55.6   subdivision 1, all deferred special assessments plus interest 
 55.7   are payable in equal installments spread over the time remaining 
 55.8   until the last maturity date of the bonds issued to finance the 
 55.9   improvement for which the assessments were levied.  If the bonds 
 55.10  have matured, the deferred special assessments plus interest are 
 55.11  payable within 90 days.  The provisions of section 429.061, 
 55.12  subdivision 2, apply to the collection of these installments.  
 55.13  Penalty must not be levied on the special assessments if timely 
 55.14  paid. 
 55.15     Subd. 8.  [CONTINUATION OF TAX TREATMENT UPON SALE.] When 
 55.16  real property qualifying under subdivision 1 is sold, no 
 55.17  additional taxes or deferred special assessments plus interest 
 55.18  may be extended against the property if: 
 55.19     (1) the property continues to qualify pursuant to 
 55.20  subdivision 1; and 
 55.21     (2) the new owner files an application for continued 
 55.22  deferment within 30 days after the sale. 
 55.23     Subd. 9.  [APPLICABILITY OF SPECIAL ASSESSMENT PROVISIONS.] 
 55.24  This section applies to special local assessments levied after 
 55.25  June 30, 2003, and payable in the years thereafter, but shall 
 55.26  not apply to any special assessments levied at any time by a 
 55.27  county or district court under the provisions of chapter 116A. 
 55.28     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 55.29  levied in 2003, payable in 2004, and thereafter.  For 
 55.30  applications for taxes payable in 2004 only, the application 
 55.31  deadline in subdivision 4 is extended to August 1, 2003. 
 55.32     Sec. 15.  Minnesota Statutes 2002, section 273.13, 
 55.33  subdivision 22, is amended to read: 
 55.34     Subd. 22.  [CLASS 1.] (a) Except as provided in subdivision 
 55.35  23 and in paragraphs (b) and (c), real estate which is 
 55.36  residential and used for homestead purposes is class 1a.  In the 
 56.1   case of a duplex or triplex in which one of the units is used 
 56.2   for homestead purposes, the entire property is deemed to be used 
 56.3   for homestead purposes.  The market value of class 1a property 
 56.4   must be determined based upon the value of the house, garage, 
 56.5   and land.  
 56.6      The first $500,000 of market value of class 1a property has 
 56.7   a net class rate of one percent of its market value; and the 
 56.8   market value of class 1a property that exceeds $500,000 has a 
 56.9   class rate of 1.25 percent of its market value. 
 56.10     (b) Class 1b property includes homestead real estate or 
 56.11  homestead manufactured homes used for the purposes of a 
 56.12  homestead by 
 56.13     (1) any blind person who is blind as defined in section 
 56.14  256D.35, or the blind person and the blind person's spouse; or 
 56.15     (2) any person, hereinafter referred to as "veteran," who: 
 56.16     (i) served in the active military or naval service of the 
 56.17  United States; and 
 56.18     (ii) is entitled to compensation under the laws and 
 56.19  regulations of the United States for permanent and total 
 56.20  service-connected disability due to the loss, or loss of use, by 
 56.21  reason of amputation, ankylosis, progressive muscular 
 56.22  dystrophies, or paralysis, of both lower extremities, such as to 
 56.23  preclude motion without the aid of braces, crutches, canes, or a 
 56.24  wheelchair; and 
 56.25     (iii) has acquired a special housing unit with special 
 56.26  fixtures or movable facilities made necessary by the nature of 
 56.27  the veteran's disability, or the surviving spouse of the 
 56.28  deceased veteran for as long as the surviving spouse retains the 
 56.29  special housing unit as a homestead; or 
 56.30     (3) any person who: 
 56.31     (i) is permanently and totally disabled and 
 56.32     (ii) receives 90 percent or more of total household income, 
 56.33  as defined in section 290A.03, subdivision 5, from 
 56.34     (A) aid from any state as a result of that disability; or 
 56.35     (B) supplemental security income for the disabled; or 
 56.36     (C) workers' compensation based on a finding of total and 
 57.1   permanent disability; or 
 57.2      (D) social security disability, including the amount of a 
 57.3   disability insurance benefit which is converted to an old age 
 57.4   insurance benefit and any subsequent cost of living increases; 
 57.5   or 
 57.6      (E) aid under the federal Railroad Retirement Act of 1937, 
 57.7   United States Code Annotated, title 45, section 228b(a)5; or 
 57.8      (F) a pension from any local government retirement fund 
 57.9   located in the state of Minnesota as a result of that 
 57.10  disability; or 
 57.11     (G) pension, annuity, or other income paid as a result of 
 57.12  that disability from a private pension or disability plan, 
 57.13  including employer, employee, union, and insurance plans and 
 57.14     (iii) has household income as defined in section 290A.03, 
 57.15  subdivision 5, of $50,000 or less; or 
 57.16     (4) any person who is permanently and totally disabled and 
 57.17  whose household income as defined in section 290A.03, 
 57.18  subdivision 5, is 275 percent or less of the federal poverty 
 57.19  level. 
 57.20     Property is classified and assessed under clause (4) (3) 
 57.21  only if the government agency or income-providing source 
 57.22  certifies, upon the request of the homestead occupant, that the 
 57.23  homestead occupant satisfies the disability requirements of this 
 57.24  paragraph. 
 57.25     Property is classified and assessed pursuant to clause (1) 
 57.26  only if the commissioner of economic security revenue certifies 
 57.27  to the assessor that the homestead occupant satisfies the 
 57.28  requirements of this paragraph.  
 57.29     Permanently and totally disabled for the purpose of this 
 57.30  subdivision means a condition which is permanent in nature and 
 57.31  totally incapacitates the person from working at an occupation 
 57.32  which brings the person an income.  The first $32,000 market 
 57.33  value of class 1b property has a net class rate of .45 percent 
 57.34  of its market value.  The remaining market value of class 1b 
 57.35  property has a class rate using the rates for class 1a or class 
 57.36  2a property, whichever is appropriate, of similar market value.  
 58.1      (c) Class 1c property is commercial use real property that 
 58.2   abuts a lakeshore line and is devoted to temporary and seasonal 
 58.3   residential occupancy for recreational purposes but not devoted 
 58.4   to commercial purposes for more than 250 days in the year 
 58.5   preceding the year of assessment, and that includes a portion 
 58.6   used as a homestead by the owner, which includes a dwelling 
 58.7   occupied as a homestead by a shareholder of a corporation that 
 58.8   owns the resort or, a partner in a partnership that owns the 
 58.9   resort, or a member of a limited liability company that owns the 
 58.10  resort even if the title to the homestead is held by the 
 58.11  corporation or, partnership, or limited liability company.  For 
 58.12  purposes of this clause, property is devoted to a commercial 
 58.13  purpose on a specific day if any portion of the property, 
 58.14  excluding the portion used exclusively as a homestead, is used 
 58.15  for residential occupancy and a fee is charged for residential 
 58.16  occupancy.  The first $500,000 of market value of class 1c 
 58.17  property has a class rate of one percent, and the remaining 
 58.18  market value of class 1c property has a class rate of one 
 58.19  percent, with the following limitation:  the area of the 
 58.20  property must not exceed 100 feet of lakeshore footage for each 
 58.21  cabin or campsite located on the property up to a total of 800 
 58.22  feet and 500 feet in depth, measured away from the lakeshore.  
 58.23  If any portion of the class 1c resort property is classified as 
 58.24  class 4c under subdivision 25, the entire property must meet the 
 58.25  requirements of subdivision 25, paragraph (d), clause (1), to 
 58.26  qualify for class 1c treatment under this paragraph. 
 58.27     (d) Class 1d property includes structures that meet all of 
 58.28  the following criteria: 
 58.29     (1) the structure is located on property that is classified 
 58.30  as agricultural property under section 273.13, subdivision 23; 
 58.31     (2) the structure is occupied exclusively by seasonal farm 
 58.32  workers during the time when they work on that farm, and the 
 58.33  occupants are not charged rent for the privilege of occupying 
 58.34  the property, provided that use of the structure for storage of 
 58.35  farm equipment and produce does not disqualify the property from 
 58.36  classification under this paragraph; 
 59.1      (3) the structure meets all applicable health and safety 
 59.2   requirements for the appropriate season; and 
 59.3      (4) the structure is not salable as residential property 
 59.4   because it does not comply with local ordinances relating to 
 59.5   location in relation to streets or roads. 
 59.6      The market value of class 1d property has the same class 
 59.7   rates as class 1a property under paragraph (a). 
 59.8      <b>[EFFECTIVE DATE.]</b> This section is effective for property 
 59.9   taxes levied in 2003, payable in 2004, and thereafter, except 
 59.10  that the amendments to paragraph (b) are effective for taxes 
 59.11  payable in 2005 and thereafter. 
 59.12     Sec. 16.  Minnesota Statutes 2002, section 273.1315, is 
 59.13  amended to read: 
 59.14     273.1315 [CERTIFICATION OF 1B PROPERTY.] 
 59.15     Any property owner seeking classification and assessment of 
 59.16  the owner's homestead as class 1b property pursuant to section 
 59.17  273.13, subdivision 22, paragraph (b), clause (2) or (3), shall 
 59.18  file with the commissioner of revenue for each assessment year a 
 59.19  1b homestead declaration, on a form prescribed by the 
 59.20  commissioner.  The declaration shall contain the following 
 59.21  information:  
 59.22     (a) the information necessary to verify that the property 
 59.23  owner or the owner's spouse satisfies the requirements of 
 59.24  section 273.13, subdivision 22, paragraph (b), clause (2) or 
 59.25  (3), for 1b classification; and 
 59.26     (b) the property owner's household income, as defined in 
 59.27  section 290A.03, for the previous calendar year; and 
 59.28     (c) any additional information prescribed by the 
 59.29  commissioner.  
 59.30     The declaration shall must be filed on or before March 
 59.31  October 1 of each year to be effective for property taxes 
 59.32  payable during the succeeding calendar year.  The declaration 
 59.33  and any supplementary information received from the property 
 59.34  owner pursuant to this section shall be subject to chapter 
 59.35  270B.  If approved by the commissioner, the declaration remains 
 59.36  in effect until the property no longer qualifies under section 
 60.1   273.13, subdivision 22, paragraph (b).  Failure to notify the 
 60.2   commissioner within 30 days that the property no longer 
 60.3   qualifies under that paragraph because of a sale, change in 
 60.4   occupancy, or change in the status or condition of an occupant 
 60.5   shall result in the penalty provided in section 273.124, 
 60.6   subdivision 13, computed on the basis of the class 1b benefits 
 60.7   for the property, and the property shall lose its current class 
 60.8   1b classification. 
 60.9      The commissioner shall provide to the assessor on or before 
 60.10  April November 1 a listing of the parcels of property qualifying 
 60.11  for 1b classification.  
 60.12     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 60.13  payable in 2005 and thereafter. 
 60.14     Sec. 17.  Minnesota Statutes 2002, section 275.025, 
 60.15  subdivision 4, is amended to read: 
 60.16     Subd. 4.  [APPORTIONMENT AND LEVY OF STATE GENERAL TAX.] 
 60.17  The state general tax must be distributed among the counties by 
 60.18  applying a uniform rate to each county's commercial-industrial 
 60.19  tax capacity and its seasonal recreational tax capacity.  Within 
 60.20  each county, the tax must be levied by applying a uniform rate 
 60.21  against commercial-industrial tax capacity and seasonal 
 60.22  recreational tax capacity.  By November 1 October 1 each year, 
 60.23  the commissioner of revenue shall certify the state general levy 
 60.24  rate to each county auditor. 
 60.25     Sec. 18.  Minnesota Statutes 2002, section 275.065, 
 60.26  subdivision 1, is amended to read: 
 60.27     Subdivision 1.  [PROPOSED LEVY.] (a) Notwithstanding any 
 60.28  law or charter to the contrary, on or before September 15 5, 
 60.29  each taxing authority, other than a school district, shall adopt 
 60.30  a proposed budget and shall certify to the county auditor the 
 60.31  proposed or, in the case of a town, the final property tax levy 
 60.32  for taxes payable in the following year. 
 60.33     (b) On or before September 30 20, each school district 
 60.34  shall certify to the county auditor the proposed property tax 
 60.35  levy for taxes payable in the following year.  The school 
 60.36  district shall certify the proposed levy as: 
 61.1      (1) the state determined school levy amount as prescribed 
 61.2   under section 126C.13, subdivision 2; 
 61.3      (2) voter approved referendum and debt levies; and 
 61.4      (3) the sum of the remaining school levies, or the maximum 
 61.5   levy limitation certified by the commissioner of children, 
 61.6   families, and learning according to section 126C.48, subdivision 
 61.7   1, less the amounts levied under clauses (1) and (2). 
 61.8      (c) If the board of estimate and taxation or any similar 
 61.9   board that establishes maximum tax levies for taxing 
 61.10  jurisdictions within a first class city certifies the maximum 
 61.11  property tax levies for funds under its jurisdiction by charter 
 61.12  to the county auditor by September 15 5, the city shall be 
 61.13  deemed to have certified its levies for those taxing 
 61.14  jurisdictions. 
 61.15     (d) For purposes of this section, "taxing authority" 
 61.16  includes all home rule and statutory cities, towns, counties, 
 61.17  school districts, and special taxing districts as defined in 
 61.18  section 275.066.  Intermediate school districts that levy a tax 
 61.19  under chapter 124 or 136D, joint powers boards established under 
 61.20  sections 123A.44 to 123A.446, and common school districts No. 
 61.21  323, Franconia, and No. 815, Prinsburg, are also special taxing 
 61.22  districts for purposes of this section.  
 61.23     Sec. 19.  Minnesota Statutes 2002, section 275.065, 
 61.24  subdivision 1a, is amended to read: 
 61.25     Subd. 1a.  [OVERLAPPING JURISDICTIONS.] In the case of a 
 61.26  taxing authority lying in two or more counties, the home county 
 61.27  auditor shall certify the proposed levy and the proposed local 
 61.28  tax rate to the other county auditor by September 20 10.  The 
 61.29  home county auditor must estimate the levy or rate in preparing 
 61.30  the notices required in subdivision 3, if the other county has 
 61.31  not certified the appropriate information.  If requested by the 
 61.32  home county auditor, the other county auditor must furnish an 
 61.33  estimate to the home county auditor. 
 61.34     Sec. 20.  Minnesota Statutes 2002, section 275.065, 
 61.35  subdivision 3, is amended to read: 
 61.36     Subd. 3.  [NOTICE OF PROPOSED PROPERTY TAXES.] (a) The 
 62.1   county auditor shall prepare and the county treasurer shall 
 62.2   deliver after November 10 October 17 and on or before November 
 62.3   24 October 31 each year, by first class mail to each taxpayer at 
 62.4   the address listed on the county's current year's assessment 
 62.5   roll, a notice of proposed property taxes.  If the information 
 62.6   necessary to provide these notices is not available by the time 
 62.7   required to mail the notice by October 31, they must be mailed 
 62.8   no later than November 24. 
 62.9      If the county provides access to parcel-specific property 
 62.10  tax information on its Web site, it may elect to provide the 
 62.11  information required under this subdivision by that means 
 62.12  instead of mailing the notices to taxpayers.  If the county 
 62.13  elects to provide the information through the Web site, it must 
 62.14  provide a notice in its newsletter or by publication in a 
 62.15  newspaper described in subdivision 5a that any taxpayer may 
 62.16  contact the county and request a mailed notice, which must be 
 62.17  mailed within ten days of the receipt of the request.  Beginning 
 62.18  in 2004, information regarding the taxpayer's option to request 
 62.19  a mailed notice must be included with the property tax statement.
 62.20     (b) The commissioner of revenue shall prescribe the form of 
 62.21  the notice. 
 62.22     (c) The notice must inform taxpayers that it contains the 
 62.23  amount of property taxes each taxing authority proposes to 
 62.24  collect for taxes payable the following year.  In the case of a 
 62.25  town, or in the case of the state general tax, the final tax 
 62.26  amount will be its proposed tax.  In the case of taxing 
 62.27  authorities required to hold a public meeting under subdivision 
 62.28  6, the notice must clearly state that each taxing authority, 
 62.29  including regional library districts established under section 
 62.30  134.201, and including the metropolitan taxing districts as 
 62.31  defined in paragraph (i), but excluding all other special taxing 
 62.32  districts and towns, will hold a public meeting to receive 
 62.33  public testimony on the proposed budget and proposed or final 
 62.34  property tax levy, or, in case of a school district, on the 
 62.35  current budget and proposed property tax levy.  It must clearly 
 62.36  state the time and place of each taxing authority's meeting, a 
 63.1   telephone number for the taxing authority that taxpayers may 
 63.2   call if they have questions related to the notice, and an 
 63.3   address where comments will be received by mail.  
 63.4      (d) The notice must state for each parcel: 
 63.5      (1) the market value of the property as determined under 
 63.6   section 273.11, and used for computing property taxes payable in 
 63.7   the following year and for taxes payable in the current year as 
 63.8   each appears in the records of the county assessor on November 1 
 63.9   October 10 of the current year; and, in the case of residential 
 63.10  property, whether the property is classified as homestead or 
 63.11  nonhomestead.  The notice must clearly inform taxpayers of the 
 63.12  years to which the market values apply and that the values are 
 63.13  final values; 
 63.14     (2) the items listed below, shown separately by county, 
 63.15  city or town, and state general tax, net of the residential and 
 63.16  agricultural homestead credit under section 273.1384, voter 
 63.17  approved school levy, other local school levy, and the sum of 
 63.18  the special taxing districts, and as a total of all taxing 
 63.19  authorities:  
 63.20     (i) the actual tax for taxes payable in the current year; 
 63.21     (ii) the tax change due to spending factors, defined as the 
 63.22  proposed tax minus the constant spending tax amount; 
 63.23     (iii) the tax change due to other factors, defined as the 
 63.24  constant spending tax amount minus the actual current year tax; 
 63.25  and 
 63.26     (iv) (ii) the proposed tax amount. 
 63.27     If the county levy under clause (2) includes an amount for 
 63.28  a lake improvement district as defined under sections 103B.501 
 63.29  to 103B.581, the amount attributable for that purpose must be 
 63.30  separately stated from the remaining county levy amount.  
 63.31     In the case of a town or the state general tax, the final 
 63.32  tax shall also be its proposed tax unless the town changes its 
 63.33  levy at a special town meeting under section 365.52.  If a 
 63.34  school district has certified under section 126C.17, subdivision 
 63.35  9, that a referendum will be held in the school district at the 
 63.36  November general election, the county auditor must note next to 
 64.1   the school district's proposed amount that a referendum is 
 64.2   pending and that, if approved by the voters, the tax amount may 
 64.3   be higher than shown on the notice.  In the case of the city of 
 64.4   Minneapolis, the levy for the Minneapolis library board and the 
 64.5   levy for Minneapolis park and recreation shall be listed 
 64.6   separately from the remaining amount of the city's levy.  In the 
 64.7   case of the city of St. Paul, the levy for the St. Paul library 
 64.8   agency must be listed separately from the remaining amount of 
 64.9   the city's levy.  In the case of Ramsey county, any amount 
 64.10  levied under section 134.07 must be listed separately from the 
 64.11  remaining amount of the county's levy.  In the case of a parcel 
 64.12  where tax increment or the fiscal disparities areawide tax under 
 64.13  chapter 276A or 473F applies, the proposed tax levy on the 
 64.14  captured value or the proposed tax levy on the tax capacity 
 64.15  subject to the areawide tax must each be stated separately and 
 64.16  not included in the sum of the special taxing districts; and 
 64.17     (3) the increase or decrease between the total taxes 
 64.18  payable in the current year and the total proposed taxes, 
 64.19  expressed as a percentage. 
 64.20     For purposes of this section, the amount of the tax on 
 64.21  homesteads qualifying under the senior citizens' property tax 
 64.22  deferral program under chapter 290B is the total amount of 
 64.23  property tax before subtraction of the deferred property tax 
 64.24  amount. 
 64.25     (e) The notice must clearly state that the proposed or 
 64.26  final taxes do not include the following: 
 64.27     (1) special assessments; 
 64.28     (2) levies approved by the voters after the date the 
 64.29  proposed taxes are certified, including bond referenda, school 
 64.30  district levy referenda, and levy limit increase referenda; 
 64.31     (3) amounts necessary to pay cleanup or other costs due to 
 64.32  a natural disaster occurring after the date the proposed taxes 
 64.33  are certified; 
 64.34     (4) amounts necessary to pay tort judgments against the 
 64.35  taxing authority that become final after the date the proposed 
 64.36  taxes are certified; and 
 65.1      (5) the contamination tax imposed on properties which 
 65.2   received market value reductions for contamination. 
 65.3      (f) Except as provided in subdivision 7, failure of the 
 65.4   county auditor to prepare or the county treasurer to deliver the 
 65.5   notice as required in this section does not invalidate the 
 65.6   proposed or final tax levy or the taxes payable pursuant to the 
 65.7   tax levy. 
 65.8      (g) If the notice the taxpayer receives under this section 
 65.9   lists the property as nonhomestead, and satisfactory 
 65.10  documentation is provided to the county assessor by the 
 65.11  applicable deadline, and the property qualifies for the 
 65.12  homestead classification in that assessment year, the assessor 
 65.13  shall reclassify the property to homestead for taxes payable in 
 65.14  the following year. 
 65.15     (h) In the case of class 4 residential property used as a 
 65.16  residence for lease or rental periods of 30 days or more, the 
 65.17  taxpayer must either: 
 65.18     (1) mail or deliver a copy of the notice of proposed 
 65.19  property taxes to each tenant, renter, or lessee; or 
 65.20     (2) post a copy of the notice in a conspicuous place on the 
 65.21  premises of the property.  
 65.22     The notice must be mailed or posted by the taxpayer by 
 65.23  November 27 3 or within three days of receipt of the notice, 
 65.24  whichever is later.  A taxpayer may notify the county treasurer 
 65.25  of the address of the taxpayer, agent, caretaker, or manager of 
 65.26  the premises to which the notice must be mailed in order to 
 65.27  fulfill the requirements of this paragraph. 
 65.28     (i) For purposes of this subdivision, subdivisions 5a and 
 65.29  6, "metropolitan special taxing districts" means the following 
 65.30  taxing districts in the seven-county metropolitan area that levy 
 65.31  a property tax for any of the specified purposes listed below: 
 65.32     (1) metropolitan council under section 473.132, 473.167, 
 65.33  473.249, 473.325, 473.446, 473.521, 473.547, or 473.834; 
 65.34     (2) metropolitan airports commission under section 473.667, 
 65.35  473.671, or 473.672; and 
 65.36     (3) metropolitan mosquito control commission under section 
 66.1   473.711. 
 66.2      For purposes of this section, any levies made by the 
 66.3   regional rail authorities in the county of Anoka, Carver, 
 66.4   Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 
 66.5   398A shall be included with the appropriate county's levy and 
 66.6   shall be discussed at that county's public hearing. 
 66.7      (j) If a statutory or home rule charter city or a town has 
 66.8   exercised the local levy option provided by section 473.388, 
 66.9   subdivision 7, it may include in the notice of its proposed 
 66.10  taxes the amount of its proposed taxes attributable to its 
 66.11  exercise of the option.  In the first year of the city or town's 
 66.12  exercise of this option, the statement shall include an estimate 
 66.13  of the reduction of the metropolitan council's tax on the parcel 
 66.14  due to exercise of that option.  The metropolitan council's levy 
 66.15  shall be adjusted accordingly. 
 66.16     Sec. 21.  [275.75] [CHARTER EXEMPTION FOR AID LOSS.] 
 66.17     Notwithstanding any other provision of a municipal charter 
 66.18  that limits ad valorem taxes to a lesser amount, or that would 
 66.19  require voter approval for any increase, the governing body of a 
 66.20  municipality may by resolution increase its levy for taxes 
 66.21  payable in 2004 and 2005 only by an amount equal to the 
 66.22  reduction in the amount of aid it is certified to receive under 
 66.23  sections 477A.011 to 477A.03 for that same payable year compared 
 66.24  to the amount certified in 2003.  
 66.25     Sec. 22.  Minnesota Statutes 2002, section 276.04, 
 66.26  subdivision 2, is amended to read: 
 66.27     Subd. 2.  [CONTENTS OF TAX STATEMENTS.] (a) The treasurer 
 66.28  shall provide for the printing of the tax statements.  The 
 66.29  commissioner of revenue shall prescribe the form of the property 
 66.30  tax statement and its contents.  The statement must contain a 
 66.31  tabulated statement of the dollar amount due to each taxing 
 66.32  authority and the amount of the state tax from the parcel of 
 66.33  real property for which a particular tax statement is prepared.  
 66.34  The dollar amounts attributable to the county, the state tax, 
 66.35  the voter approved school tax, the other local school tax, the 
 66.36  township or municipality, and the total of the metropolitan 
 67.1   special taxing districts as defined in section 275.065, 
 67.2   subdivision 3, paragraph (i), must be separately stated.  The 
 67.3   amounts due all other special taxing districts, if any, may be 
 67.4   aggregated.  If the county levy under this paragraph includes an 
 67.5   amount for a lake improvement district as defined under sections 
 67.6   103B.501 to 103B.581, the amount attributable for that purpose 
 67.7   must be separately stated from the remaining county levy 
 67.8   amount.  In the case of Ramsey county, if the county levy under 
 67.9   this paragraph includes an amount for public library service 
 67.10  under section 134.07, the amount attributable for that purpose 
 67.11  must be separately stated from the remaining county levy 
 67.12  amount.  The amount of the tax on homesteads qualifying under 
 67.13  the senior citizens' property tax deferral program under chapter 
 67.14  290B is the total amount of property tax before subtraction of 
 67.15  the deferred property tax amount.  The amount of the tax on 
 67.16  contamination value imposed under sections 270.91 to 270.98, if 
 67.17  any, must also be separately stated.  The dollar amounts, 
 67.18  including the dollar amount of any special assessments, may be 
 67.19  rounded to the nearest even whole dollar.  For purposes of this 
 67.20  section whole odd-numbered dollars may be adjusted to the next 
 67.21  higher even-numbered dollar.  The amount of market value 
 67.22  excluded under section 273.11, subdivision 16, if any, must also 
 67.23  be listed on the tax statement. 
 67.24     (b) The property tax statements for manufactured homes and 
 67.25  sectional structures taxed as personal property shall contain 
 67.26  the same information that is required on the tax statements for 
 67.27  real property.  
 67.28     (c) Real and personal property tax statements must contain 
 67.29  the following information in the order given in this paragraph.  
 67.30  The information must contain the current year tax information in 
 67.31  the right column with the corresponding information for the 
 67.32  previous year in a column on the left: 
 67.33     (1) the property's estimated market value under section 
 67.34  273.11, subdivision 1; 
 67.35     (2) the property's taxable market value after reductions 
 67.36  under section 273.11, subdivisions 1a and 16; 
 68.1      (3) the property's gross tax, calculated by adding the 
 68.2   property's total property tax to the sum of the aids enumerated 
 68.3   in clause (4); 
 68.4      (4) a total of the following aids: 
 68.5      (i) education aids payable under chapters 122A, 123A, 123B, 
 68.6   124D, 125A, 126C, and 127A; 
 68.7      (ii) local government aids for cities, towns, and counties 
 68.8   under chapter 477A; 
 68.9      (iii) disparity reduction aid under section 273.1398; and 
 68.10     (iv) homestead and agricultural credit aid under section 
 68.11  273.1398; 
 68.12     (5) for homestead residential and agricultural properties, 
 68.13  the credits under section 273.1384; 
 68.14     (6) any credits received under sections 273.119; 273.123; 
 68.15  273.135; 273.1391; 273.1398, subdivision 4; 469.171; and 
 68.16  473H.10, except that the amount of credit received under section 
 68.17  273.135 must be separately stated and identified as "taconite 
 68.18  tax relief"; and 
 68.19     (7) the net tax payable in the manner required in paragraph 
 68.20  (a). 
 68.21     (d) If the county uses envelopes for mailing property tax 
 68.22  statements and if the county agrees, a taxing district may 
 68.23  include a notice with the property tax statement notifying 
 68.24  taxpayers when the taxing district will begin its budget 
 68.25  deliberations for the current year, and encouraging taxpayers to 
 68.26  attend the hearings.  If the county allows notices to be 
 68.27  included in the envelope containing the property tax statement, 
 68.28  and if more than one taxing district relative to a given 
 68.29  property decides to include a notice with the tax statement, the 
 68.30  county treasurer or auditor must coordinate the process and may 
 68.31  combine the information on a single announcement.  
 68.32     The commissioner of revenue shall certify to the county 
 68.33  auditor the actual or estimated aids enumerated in clause (4) 
 68.34  that local governments will receive in the following year.  The 
 68.35  commissioner must certify this amount by January 1 of each year. 
 68.36     Sec. 23.  Minnesota Statutes 2002, section 278.03, 
 69.1   subdivision 1, is amended to read: 
 69.2      Subdivision 1.  [REAL PROPERTY.] In the case of real 
 69.3   property, If the proceedings instituted by the filing of the 
 69.4   petition have not been completed before the 16th day of May next 
 69.5   following the filing or, in the case of class 1c property or 
 69.6   class 4c resort property before the 16th day of July for taxes 
 69.7   payable in 2004 and 2005 only, the petitioner shall pay to the 
 69.8   county treasurer 50 percent of the tax levied for such year 
 69.9   against the property involved, unless permission to continue 
 69.10  prosecution of the petition without such payment is obtained as 
 69.11  herein provided. If the proceedings instituted by the filing of 
 69.12  the petition have not been completed by the next October 16, or, 
 69.13  in the case of class 1b agricultural homestead, class 2a 
 69.14  agricultural homestead, and class 2b(2) agricultural 
 69.15  nonhomestead property, November 16, the petitioner shall pay to 
 69.16  the county treasurer 50 percent of the unpaid balance of the 
 69.17  taxes levied for the year against the property involved if the 
 69.18  unpaid balance is $2,000 or less and 80 percent of the unpaid 
 69.19  balance if the unpaid balance is over $2,000, unless permission 
 69.20  to continue prosecution of the petition without payment is 
 69.21  obtained as herein provided.  The petitioner, upon ten days' 
 69.22  notice to the county attorney and to the county auditor, given 
 69.23  at least ten days prior to the 16th day of May or, in the case 
 69.24  of class 1c or class 4c resort property, the 16th day of July 
 69.25  for taxes payable in 2004 and 2005 only, or the 16th day of 
 69.26  October, or, in the case of class 1b agricultural homestead, 
 69.27  class 2a agricultural homestead, and class 2b(2) agricultural 
 69.28  nonhomestead property, the 16th day of November, may apply to 
 69.29  the court for permission to continue prosecution of the petition 
 69.30  without payment; and, if it is made to appear 
 69.31     (1) that the proposed review is to be taken in good faith; 
 69.32     (2) that there is probable cause to believe that the 
 69.33  property may be held exempt from the tax levied or that the tax 
 69.34  may be determined to be less than 50 percent of the amount 
 69.35  levied; and 
 69.36     (3) that it would work a hardship upon petitioner to pay 
 70.1   the taxes due, 
 70.2      the court may permit the petitioner to continue prosecution 
 70.3   of the petition without payment, or may fix a lesser amount to 
 70.4   be paid as a condition of continuing the prosecution of the 
 70.5   petition. 
 70.6      Failure to make payment of the amount required when due 
 70.7   shall operate automatically to dismiss the petition and all 
 70.8   proceedings thereunder unless the payment is waived by an order 
 70.9   of the court permitting the petitioner to continue prosecution 
 70.10  of the petition without payment.  The petition shall be 
 70.11  automatically reinstated upon payment of the entire tax plus 
 70.12  interest and penalty if the payment is made within one year of 
 70.13  the dismissal.  The county treasurer shall, upon request of the 
 70.14  petitioner, issue duplicate receipts for the tax payment, one of 
 70.15  which shall be filed by the petitioner in the proceeding. 
 70.16     Sec. 24.  Minnesota Statutes 2002, section 278.05, 
 70.17  subdivision 6, is amended to read: 
 70.18     Subd. 6.  [DISMISSAL OF PETITION; EXCLUSION OF CERTAIN 
 70.19  EVIDENCE.] (a) Information, including income and expense 
 70.20  figures, verified net rentable areas, and anticipated income and 
 70.21  expenses, for income-producing property must be provided to the 
 70.22  county assessor within 60 days after the petition has been filed 
 70.23  under this chapter no later than 60 days after the applicable 
 70.24  filing deadline contained in section 278.01, subdivision 1 or 
 70.25  4.  Failure to provide the information required in this 
 70.26  paragraph shall result in the dismissal of the petition, 
 70.27  unless (1) the failure to provide it was due to the 
 70.28  unavailability of the evidence at that the time that the 
 70.29  information was due, or (2) the petitioner was not informed in 
 70.30  writing by the assessor of the requirement to provide the 
 70.31  information. 
 70.32  If the petitioner proves that the assessor did not provide the 
 70.33  written information, the petitioner has an additional 30 days to 
 70.34  provide the information from the time the petitioner was 
 70.35  informed of the requirement to provide the information, 
 70.36  otherwise the petition shall be dismissed.  
 71.1      (b) Provided that the information as contained in paragraph 
 71.2   (a) is timely submitted to the county assessor, the county 
 71.3   assessor shall furnish the petitioner at least five days before 
 71.4   the hearing under this chapter with the property's appraisal, if 
 71.5   any, which will be presented to the court at the hearing.  The 
 71.6   petitioner shall furnish to the county assessor at least five 
 71.7   days before the hearing under this chapter with the property's 
 71.8   appraisal, if any, which will be presented to the court at the 
 71.9   hearing.  An appraisal of the petitioner's property done by or 
 71.10  for the county shall not be admissible as evidence if the county 
 71.11  assessor does not comply with the provisions in this paragraph.  
 71.12  The petition shall be dismissed if the petitioner does not 
 71.13  comply with the provisions in this paragraph. 
 71.14     <b>[EFFECTIVE DATE.]</b> This section is effective for petitions 
 71.15  filed on or after July 1, 2003. 
 71.16     Sec. 25.  Minnesota Statutes 2002, section 279.01, 
 71.17  subdivision 1, is amended to read: 
 71.18     Subdivision 1.  [DUE DATES; PENALTIES.] Except as provided 
 71.19  in subdivision 3 or 4 this section, on May 16 or 21 days after 
 71.20  the postmark date on the envelope containing the property tax 
 71.21  statement, whichever is later, a penalty shall accrue and 
 71.22  thereafter be charged upon all unpaid taxes on real estate on 
 71.23  the current lists in the hands of the county treasurer.  The 
 71.24  penalty shall be at a rate of two percent on homestead property 
 71.25  until May 31 and four percent on June 1.  The penalty on 
 71.26  nonhomestead property shall be at a rate of four percent until 
 71.27  May 31 and eight percent on June 1.  This penalty shall not 
 71.28  accrue until June 1 of each year, or 21 days after the postmark 
 71.29  date on the envelope containing the property tax statements, 
 71.30  whichever is later, on commercial use real property used for 
 71.31  seasonal residential recreational purposes and classified as 
 71.32  class 1c or 4c, and on other commercial use real property 
 71.33  classified as class 3a, provided that over 60 percent of the 
 71.34  gross income earned by the enterprise on the class 3a property 
 71.35  is earned during the months of May, June, July, and August.  Any 
 71.36  property owner of such class 3a property who pays the first half 
 72.1   of the tax due on the property after May 15 and before June 1, 
 72.2   or 21 days after the postmark date on the envelope containing 
 72.3   the property tax statement, whichever is later, shall attach an 
 72.4   affidavit to the payment attesting to compliance with the income 
 72.5   provision of this subdivision.  Thereafter, for both homestead 
 72.6   and nonhomestead property, on the first day of each month 
 72.7   beginning July 1, up to and including October 1 following, an 
 72.8   additional penalty of one percent for each month shall accrue 
 72.9   and be charged on all such unpaid taxes provided that if the due 
 72.10  date was extended beyond May 15 as the result of any delay in 
 72.11  mailing property tax statements no additional penalty shall 
 72.12  accrue if the tax is paid by the extended due date.  If the tax 
 72.13  is not paid by the extended due date, then all penalties that 
 72.14  would have accrued if the due date had been May 15 shall be 
 72.15  charged.  When the taxes against any tract or lot exceed $50, 
 72.16  one-half thereof may be paid prior to May 16 or 21 days after 
 72.17  the postmark date on the envelope containing the property tax 
 72.18  statement, whichever is later; and, if so paid, no penalty shall 
 72.19  attach; the remaining one-half shall be paid at any time prior 
 72.20  to October 16 following, without penalty; but, if not so paid, 
 72.21  then a penalty of two percent shall accrue thereon for homestead 
 72.22  property and a penalty of four percent on nonhomestead 
 72.23  property.  Thereafter, for homestead property, on the first day 
 72.24  of November an additional penalty of four percent shall accrue 
 72.25  and on the first day of December following, an additional 
 72.26  penalty of two percent shall accrue and be charged on all such 
 72.27  unpaid taxes.  Thereafter, for nonhomestead property, on the 
 72.28  first day of November and December following, an additional 
 72.29  penalty of four percent for each month shall accrue and be 
 72.30  charged on all such unpaid taxes.  If one-half of such taxes 
 72.31  shall not be paid prior to May 16 or 21 days after the postmark 
 72.32  date on the envelope containing the property tax statement, 
 72.33  whichever is later, the same may be paid at any time prior to 
 72.34  October 16, with accrued penalties to the date of payment added, 
 72.35  and thereupon no penalty shall attach to the remaining one-half 
 72.36  until October 16 following.  
 73.1      This section applies to payment of personal property taxes 
 73.2   assessed against improvements to leased property, except as 
 73.3   provided by section 277.01, subdivision 3. 
 73.4      A county may provide by resolution that in the case of a 
 73.5   property owner that has multiple tracts or parcels with 
 73.6   aggregate taxes exceeding $50, payments may be made in 
 73.7   installments as provided in this subdivision. 
 73.8      The county treasurer may accept payments of more or less 
 73.9   than the exact amount of a tax installment due.  If the accepted 
 73.10  payment is less than the amount due, payments must be applied 
 73.11  first to the penalty accrued for the year the payment is made.  
 73.12  Acceptance of partial payment of tax does not constitute a 
 73.13  waiver of the minimum payment required as a condition for filing 
 73.14  an appeal under section 278.03 or any other law, nor does it 
 73.15  affect the order of payment of delinquent taxes under section 
 73.16  280.39. 
 73.17     Sec. 26.  Minnesota Statutes 2002, section 279.01, is 
 73.18  amended by adding a subdivision to read: 
 73.19     Subd. 5.  [SEASONAL RESIDENTIAL RECREATIONAL PROPERTY USED 
 73.20  FOR COMMERCIAL PURPOSES.] For taxes payable in 2004 and 2005 
 73.21  only, in the case of class 1c property and class 4c seasonal 
 73.22  residential recreational property used for commercial purposes, 
 73.23  no penalties shall accrue to the first one-half property tax 
 73.24  payment as provided in this section if paid by July 15.  On July 
 73.25  16, a penalty shall accrue and thereafter be charged upon all 
 73.26  unpaid taxes.  On class 1c property the penalty is at a rate of 
 73.27  two percent until July 31, and four percent on August 1.  On 
 73.28  class 4c seasonal residential recreational property used for 
 73.29  commercial purposes, the penalty is four percent until July 31 
 73.30  and eight percent on August 1.  Thereafter, for both class 1c 
 73.31  and class 4c seasonal residential recreational property used for 
 73.32  commercial purposes, on the first day of September and on the 
 73.33  first day of October, an additional penalty of one percent shall 
 73.34  accrue and be charged on unpaid taxes.  The remaining one-half 
 73.35  property taxes must be paid and penalties accrue as provided in 
 73.36  subdivision 1. 
 74.1      Sec. 27.  Minnesota Statutes 2002, section 290A.03, 
 74.2   subdivision 8, is amended to read: 
 74.3      Subd. 8.  [CLAIMANT.] (a) "Claimant" means a person, other 
 74.4   than a dependent, as defined under sections 151 and 152 of the 
 74.5   Internal Revenue Code disregarding section 152(b)(3) of the 
 74.6   Internal Revenue Code, who filed a claim authorized by this 
 74.7   chapter and who was a resident of this state as provided in 
 74.8   chapter 290 during the calendar year for which the claim for 
 74.9   relief was filed. 
 74.10     (b) In the case of a claim relating to rent constituting 
 74.11  property taxes, the claimant shall have resided in a rented or 
 74.12  leased unit on which ad valorem taxes or payments made in lieu 
 74.13  of ad valorem taxes, including payments of special assessments 
 74.14  imposed in lieu of ad valorem taxes, are payable at some time 
 74.15  during the calendar year covered by the claim.  
 74.16     (c) "Claimant" shall not include a resident of a nursing 
 74.17  home, intermediate care facility, or long-term residential 
 74.18  facility, or a facility that accepts group residential housing 
 74.19  payments whose rent constituting property taxes is paid pursuant 
 74.20  to the supplemental security income program under title XVI of 
 74.21  the Social Security Act, the Minnesota supplemental aid program 
 74.22  under sections 256D.35 to 256D.54, the medical assistance 
 74.23  program pursuant to title XIX of the Social Security Act, or the 
 74.24  general assistance medical care program pursuant to section 
 74.25  256D.03, subdivision 3, or the group residential housing program 
 74.26  under chapter 256I. 
 74.27  If only a portion of the rent constituting property taxes is 
 74.28  paid by these programs, the resident shall be a claimant for 
 74.29  purposes of this chapter, but the refund calculated pursuant to 
 74.30  section 290A.04 shall be multiplied by a fraction, the numerator 
 74.31  of which is income as defined in subdivision 3, paragraphs (1) 
 74.32  and (2), reduced by the total amount of income from the above 
 74.33  sources other than vendor payments under the medical assistance 
 74.34  program or the general assistance medical care program and the 
 74.35  denominator of which is income as defined in subdivision 3, 
 74.36  paragraphs (1) and (2), plus vendor payments under the medical 
 75.1   assistance program or the general assistance medical care 
 75.2   program, to determine the allowable refund pursuant to this 
 75.3   chapter. 
 75.4      (d) Notwithstanding paragraph (c), if the claimant was a 
 75.5   resident of the nursing home, intermediate care facility or, 
 75.6   long-term residential facility, or facility for which the rent 
 75.7   was paid for the claimant by the group residential housing 
 75.8   program for only a portion of the calendar year covered by the 
 75.9   claim, the claimant may compute rent constituting property taxes 
 75.10  by disregarding the rent constituting property taxes from the 
 75.11  nursing home, intermediate care facility, or long-term 
 75.12  residential facility and use only that amount of rent 
 75.13  constituting property taxes or property taxes payable relating 
 75.14  to that portion of the year when the claimant was not in the 
 75.15  facility.  The claimant's household income is the income for the 
 75.16  entire calendar year covered by the claim.  
 75.17     (e) In the case of a claim for rent constituting property 
 75.18  taxes of a part-year Minnesota resident, the income and rental 
 75.19  reflected in this computation shall be for the period of 
 75.20  Minnesota residency only.  Any rental expenses paid which may be 
 75.21  reflected in arriving at federal adjusted gross income cannot be 
 75.22  utilized for this computation.  When two individuals of a 
 75.23  household are able to meet the qualifications for a claimant, 
 75.24  they may determine among them as to who the claimant shall be. 
 75.25  If they are unable to agree, the matter shall be referred to the 
 75.26  commissioner of revenue whose decision shall be final.  If a 
 75.27  homestead property owner was a part-year Minnesota resident, the 
 75.28  income reflected in the computation made pursuant to section 
 75.29  290A.04 shall be for the entire calendar year, including income 
 75.30  not assignable to Minnesota. 
 75.31     (f) If a homestead is occupied by two or more renters, who 
 75.32  are not husband and wife, the rent shall be deemed to be paid 
 75.33  equally by each, and separate claims shall be filed by each.  
 75.34  The income of each shall be each renter's household income for 
 75.35  purposes of computing the amount of credit to be allowed. 
 75.36     <b>[EFFECTIVE DATE.]</b> This section is effective for claims 
 76.1   based on rent paid in 2003 and thereafter. 
 76.2      Sec. 28.  Laws 1989, chapter 211, section 8, subdivision 2, 
 76.3   as amended by Laws 2002, chapter 390, section 24, is amended to 
 76.4   read: 
 76.5      Subd. 2.  [OPERATION OF DISTRICT.] (a) A hospital district 
 76.6   created under this section shall be subject to Minnesota 
 76.7   Statutes, sections 447.32, except subdivision 1, to 447.41, and 
 76.8   except as provided otherwise in this act.  
 76.9      (b) A hospital district created under this section is a 
 76.10  municipal corporation and a political subdivision of the state. 
 76.11     <b>[EFFECTIVE DATE.]</b> This section is effective upon compliance 
 76.12  with Minnesota Statutes, section 645.021, subdivision 3, by the 
 76.13  governing body of the Cook county hospital district. 
 76.14     Sec. 29.  Laws 1989, chapter 211, section 8, subdivision 4, 
 76.15  as amended by Laws 2002, chapter 390, section 24, is amended to 
 76.16  read: 
 76.17     Subd. 4.  [TAX LEVY.] The tax levied under Minnesota 
 76.18  Statutes, section 447.34, shall not exceed $300,000 in any year, 
 76.19  and its for taxes levied in 2002.  For taxes levied in 2003 and 
 76.20  subsequent years, the tax must not exceed the lesser of: 
 76.21     (1) the product of the hospital district's property tax 
 76.22  levy limitation for the previous year determined under this 
 76.23  subdivision, multiplied by 103 percent; or 
 76.24     (2) the product of the hospital district's property tax 
 76.25  levy limitation for the previous year determined under this 
 76.26  subdivision multiplied by the ratio of the most recent available 
 76.27  annual medical care expenditure category of the revised Consumer 
 76.28  Price Index, U.S. citywide average, for all urban consumers 
 76.29  prepared by the United States Department of Labor to the same 
 76.30  annual index for the previous year. 
 76.31     The proceeds of the tax may be used for all purposes of the 
 76.32  hospital district. 
 76.33     <b>[EFFECTIVE DATE.]</b> This section is effective upon compliance 
 76.34  with Minnesota Statutes, section 645.021, subdivision 3, by the 
 76.35  governing body of the Cook county hospital district. 
 76.36     Sec. 30.  Laws 2001, First Special Session chapter 5, 
 77.1   article 3, section 96, is amended to read: 
 77.2      Sec. 96.  [REPEALER.] 
 77.3      (a) Minnesota Statutes 2000, sections 273.13, subdivision 
 77.4   24a; 273.1382; 273.1399; 275.078; 275.08, subdivision 1e; 
 77.5   473.446, subdivisions 1a and 1b; and 473.3915, are repealed 
 77.6   effective for taxes levied in 2001, payable in 2002, and 
 77.7   thereafter and aids or credits payable in 2002 and thereafter. 
 77.8      (b) Laws 1988, chapter 426, section 1; Laws 1988, chapter 
 77.9   702, section 16; Laws 1992, chapter 511, article 2, section 52, 
 77.10  as amended by Laws 1997, chapter 231, article 2, section 50, and 
 77.11  Laws 1998, chapter 389, article 3, section 32; Laws 1996, 
 77.12  chapter 471, article 8, section 45; Laws 1999, chapter 243, 
 77.13  article 6, section 14; Laws 1999, chapter 243, article 6, 
 77.14  section 15; and Laws 2000, chapter 490, article 6, section 17, 
 77.15  are repealed effective for taxes levied in 2001, payable in 2002 
 77.16  and thereafter. 
 77.17     (c) Minnesota Statutes 2000, sections 126C.30; 126C.31; 
 77.18  126C.32; 126C.33; 126C.34; 126C.35; and 126C.36, are repealed 
 77.19  effective July 1, 2001. 
 77.20     (d) Minnesota Statutes 2000, section 273.126 and 462A.071, 
 77.21  are repealed effective for property taxes payable in 2004, and 
 77.22  any agreement entered into pursuant to the provisions of those 
 77.23  sections expires, effective January 1, 2004, regardless of the 
 77.24  term of the agreement. 
 77.25     Sec. 31.  Laws 2002, chapter 377, article 3, section 15, 
 77.26  the effective date, is amended to read: 
 77.27     <b>[EFFECTIVE DATE.]</b> This section is effective for sales made 
 77.28  after August 31, 2002, and on or before December 31, 2003 2004. 
 77.29     Sec. 32.  [PROPERTY TAX ASSESSMENT OF LOW-INCOME HOUSING, 
 77.30  RULES.] 
 77.31     The commissioner of revenue shall develop guidelines for 
 77.32  use by assessors in calculating the restricted use value of 
 77.33  class 4d property under Minnesota Statutes, section 273.11, 
 77.34  subdivision 22. 
 77.35     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 77.36  following final enactment. 
 78.1      Sec. 33.  [COMMERCIAL-INDUSTRIAL LAND VALUE TAXATION; LOCAL 
 78.2   OPTION.] 
 78.3      The governing body of any municipality that has a 
 78.4   population in excess of 70,000, or any municipality located in 
 78.5   the taconite tax relief area defined in Minnesota Statutes, 
 78.6   section 273.134, may by resolution adopt a system of valuing 
 78.7   commercial-industrial property in its jurisdiction that is based 
 78.8   on the value of the land, not including improvements.  The 
 78.9   governing body may make the election under this section if it 
 78.10  finds that implementation of the land value system will enhance 
 78.11  economic development in the city.  An election under this 
 78.12  section must be made by December 31, 2003.  If any municipality 
 78.13  makes the election, it must notify the commissioner of revenue 
 78.14  of the election and the legislature must enact during the 2004 
 78.15  legislative session the legislation necessary to implement the 
 78.16  system for taxes levied in 2004, payable in 2005, and thereafter.
 78.17     Sec. 34.  [LEGISLATIVE APPROVAL OF CONSUMPTIVE USE OF 
 78.18  WATER.] 
 78.19     Pursuant to Minnesota Statutes, section 103G.265, 
 78.20  subdivision 3, the legislature approves the consumptive use 
 78.21  under a permit of more than 2,000,000 gallons per day average in 
 78.22  a 30-day period in Rosemount, in connection with a gas fueled 
 78.23  combined-cycle electric generating facility, subject to the 
 78.24  commissioner of natural resources making a determination that 
 78.25  the water remaining in the basin of origin will be adequate to 
 78.26  meet the basin's need for water and approval by the commissioner 
 78.27  of natural resources of all applicable permits. 
 78.28     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 78.29  following final enactment. 
 78.30     Sec. 35.  [LEGISLATIVE APPROVAL OF CONSUMPTIVE USE OF 
 78.31  WATER.] 
 78.32     Pursuant to Minnesota Statutes, section 103G.265, 
 78.33  subdivision 3, the legislature approves the consumptive use 
 78.34  under a permit of more than 2,000,000 gallons per day average in 
 78.35  a 30-day period in Mankato, in connection with a gas fueled 
 78.36  combined-cycle electric generating facility, subject to the 
 79.1   commissioner of natural resources making a determination that 
 79.2   the water remaining in the basin of origin will be adequate to 
 79.3   meet the basin's need for water and approval by the commissioner 
 79.4   of natural resources of all applicable permits. 
 79.5      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 79.6   following final enactment. 
 79.7                              ARTICLE 4
 79.8                          LOCAL DEVELOPMENT
 79.9      Section 1.  Minnesota Statutes 2002, section 469.169, is 
 79.10  amended by adding a subdivision to read: 
 79.11     Subd. 16.  [ADDITIONAL BORDER CITY ALLOCATIONS.] (a) In 
 79.12  addition to tax reductions authorized in subdivisions 7 to 15, 
 79.13  the commissioner shall allocate $750,000 for tax reductions to 
 79.14  border city enterprise zones in cities located on the western 
 79.15  border of the state.  The commissioner shall make allocations to 
 79.16  zones in cities on the western border on a per capita basis.  
 79.17  Allocations made under this subdivision may be used for tax 
 79.18  reductions as provided in section 469.171, or for other offsets 
 79.19  of taxes imposed on or remitted by businesses located in the 
 79.20  enterprise zone, but only if the municipality determines that 
 79.21  the granting of the tax reduction or offset is necessary in 
 79.22  order to retain a business within or attract a business to the 
 79.23  zone.  Any portion of the allocation provided in this paragraph 
 79.24  may alternatively be used for tax reductions under section 
 79.25  469.1732 or 469.1734. 
 79.26     (b) The commissioner shall allocate $750,000 for tax 
 79.27  reductions under section 469.1732 or 469.1734 to cities with 
 79.28  border city enterprise zones located on the western border of 
 79.29  the state.  The commissioner shall allocate this amount among 
 79.30  the cities on a per capita basis.  Any portion of the allocation 
 79.31  provided in this paragraph may alternatively be used for tax 
 79.32  reductions as provided in section 469.171. 
 79.33     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 79.34  following final enactment. 
 79.35     Sec. 2.  Minnesota Statutes 2002, section 469.1731, 
 79.36  subdivision 3, is amended to read: 
 80.1      Subd. 3.  [FILING.] The city must file a copy of the 
 80.2   resolution and development plan with the commissioner of trade 
 80.3   and economic development.  The designation takes effect for the 
 80.4   first calendar year that begins more than 90 30 days after the 
 80.5   filing. 
 80.6      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 80.7   following final enactment. 
 80.8      Sec. 3.  Minnesota Statutes 2002, section 469.174, 
 80.9   subdivision 10, is amended to read: 
 80.10     Subd. 10.  [REDEVELOPMENT DISTRICT.] (a) "Redevelopment 
 80.11  district" means a type of tax increment financing district 
 80.12  consisting of a project, or portions of a project, within which 
 80.13  the authority finds by resolution that one or more of the 
 80.14  following conditions, reasonably distributed throughout the 
 80.15  district, exists: 
 80.16     (1) parcels consisting of 70 percent of the area of the 
 80.17  district are occupied by buildings, streets, utilities, paved or 
 80.18  gravel parking lots, or other similar structures and more than 
 80.19  50 percent of the buildings, not including outbuildings, are 
 80.20  structurally substandard to a degree requiring substantial 
 80.21  renovation or clearance; or 
 80.22     (2) the property consists of vacant, unused, underused, 
 80.23  inappropriately used, or infrequently used railyards, rail 
 80.24  storage facilities, or excessive or vacated railroad 
 80.25  rights-of-way; or 
 80.26     (3) tank facilities, or property whose immediately previous 
 80.27  use was for tank facilities, as defined in section 115C.02, 
 80.28  subdivision 15, if the tank facilities: 
 80.29     (i) have or had a capacity of more than 1,000,000 gallons; 
 80.30     (ii) are located adjacent to rail facilities; and 
 80.31     (iii) have been removed or are unused, underused, 
 80.32  inappropriately used, or infrequently used; or 
 80.33     (4) a qualifying disaster area, as defined in subdivision 
 80.34  10b. 
 80.35     (b) For purposes of this subdivision, "structurally 
 80.36  substandard" shall mean containing defects in structural 
 81.1   elements or a combination of deficiencies in essential utilities 
 81.2   and facilities, light and ventilation, fire protection including 
 81.3   adequate egress, layout and condition of interior partitions, or 
 81.4   similar factors, which defects or deficiencies are of sufficient 
 81.5   total significance to justify substantial renovation or 
 81.6   clearance. 
 81.7      (c) A building is not structurally substandard if it is in 
 81.8   compliance with the building code applicable to new buildings or 
 81.9   could be modified to satisfy the building code at a cost of less 
 81.10  than 15 percent of the cost of constructing a new structure of 
 81.11  the same square footage and type on the site.  The municipality 
 81.12  may find that a building is not disqualified as structurally 
 81.13  substandard under the preceding sentence on the basis of 
 81.14  reasonably available evidence, such as the size, type, and age 
 81.15  of the building, the average cost of plumbing, electrical, or 
 81.16  structural repairs, or other similar reliable evidence.  The 
 81.17  municipality may not make such a determination without an 
 81.18  interior inspection of the property, but need not have an 
 81.19  independent, expert appraisal prepared of the cost of repair and 
 81.20  rehabilitation of the building.  An interior inspection of the 
 81.21  property is not required, if the municipality finds that (1) the 
 81.22  municipality or authority is unable to gain access to the 
 81.23  property after using its best efforts to obtain permission from 
 81.24  the party that owns or controls the property; and (2) the 
 81.25  evidence otherwise supports a reasonable conclusion that the 
 81.26  building is structurally substandard.  Items of evidence that 
 81.27  support such a conclusion include recent fire or police 
 81.28  inspections, on-site property tax appraisals or housing 
 81.29  inspections, exterior evidence of deterioration, or other 
 81.30  similar reliable evidence.  Written documentation of the 
 81.31  findings and reasons why an interior inspection was not 
 81.32  conducted must be made and retained under section 469.175, 
 81.33  subdivision 3, clause (1). 
 81.34     (d) A parcel is deemed to be occupied by a structurally 
 81.35  substandard building for purposes of the finding under paragraph 
 81.36  (a) if all of the following conditions are met: 
 82.1      (1) the parcel was occupied by a substandard building 
 82.2   within three years of the filing of the request for 
 82.3   certification of the parcel as part of the district with the 
 82.4   county auditor; 
 82.5      (2) the substandard building was demolished or removed by 
 82.6   the authority or the demolition or removal was financed by the 
 82.7   authority or was done by a developer under a development 
 82.8   agreement with the authority; 
 82.9      (3) the authority found by resolution before the demolition 
 82.10  or removal that the parcel was occupied by a structurally 
 82.11  substandard building and that after demolition and clearance the 
 82.12  authority intended to include the parcel within a district; and 
 82.13     (4) upon filing the request for certification of the tax 
 82.14  capacity of the parcel as part of a district, the authority 
 82.15  notifies the county auditor that the original tax capacity of 
 82.16  the parcel must be adjusted as provided by section 469.177, 
 82.17  subdivision 1, paragraph (h). 
 82.18     (e) For purposes of this subdivision, a parcel is not 
 82.19  occupied by buildings, streets, utilities, paved or gravel 
 82.20  parking lots, or other similar structures unless 15 percent of 
 82.21  the area of the parcel contains buildings, streets, utilities, 
 82.22  paved or gravel parking lots, or other similar structures. 
 82.23     (f) For districts consisting of two or more noncontiguous 
 82.24  areas, each area must qualify as a redevelopment district under 
 82.25  paragraph (a) to be included in the district, and the entire 
 82.26  area of the district must satisfy paragraph (a). 
 82.27     <b>[EFFECTIVE DATE.]</b> This section is effective for districts 
 82.28  for which the request for certification is made after the day 
 82.29  following final enactment. 
 82.30     Sec. 4.  Minnesota Statutes 2002, section 469.174, is 
 82.31  amended by adding a subdivision to read: 
 82.32     Subd. 10b.  [QUALIFIED DISASTER AREA.] A "qualified 
 82.33  disaster area" is an area that meets the following requirements: 
 82.34     (1) parcels consisting of 70 percent of the area of the 
 82.35  district were occupied by buildings, streets, utilities, paved 
 82.36  or gravel parking lots, or other similar structures immediately 
 83.1   before the disaster or emergency; 
 83.2      (2) the area of the district was subject to a disaster or 
 83.3   emergency, as defined in section 273.123, subdivision 1, within 
 83.4   the 18-month period ending on the day the request for 
 83.5   certification of the district is made; and 
 83.6      (3) 50 percent or more of the buildings in the area have 
 83.7   suffered substantial damage as a result of the disaster or 
 83.8   emergency. 
 83.9      <b>[EFFECTIVE DATE.]</b> This section is effective for districts 
 83.10  for which the request for certification is made after the day 
 83.11  following final enactment.  
 83.12     Sec. 5.  Minnesota Statutes 2002, section 469.174, is 
 83.13  amended by adding a subdivision to read: 
 83.14     Subd. 29.  [QUALIFIED HOUSING DISTRICT.] "Qualified housing 
 83.15  district" means: 
 83.16     (1) a housing district for a residential rental project or 
 83.17  projects in which the only properties receiving assistance from 
 83.18  revenues derived from tax increments from the district meet all 
 83.19  of the requirements for a low-income housing credit under 
 83.20  section 42 of the Internal Revenue Code of 1986, as amended 
 83.21  through December 31, 1992, regardless of whether the project 
 83.22  actually receives a low-income housing credit; or 
 83.23     (2) a housing district for a single-family homeownership 
 83.24  project or projects, if 95 percent or more of the homes 
 83.25  receiving assistance from tax increments from the district are 
 83.26  purchased by qualified purchasers.  A qualified purchaser means 
 83.27  the first purchaser of a home after the tax increment assistance 
 83.28  is provided whose income is at or below 100 percent of the 
 83.29  median gross income for a family of the same size as the 
 83.30  purchaser.  Median gross income is the greater of (i) area 
 83.31  median gross income, or (ii) the statewide median gross income, 
 83.32  as determined by the secretary of housing and urban development. 
 83.33     Sec. 6.  Minnesota Statutes 2002, section 469.176, 
 83.34  subdivision 7, is amended to read: 
 83.35     Subd. 7.  [PARCELS NOT INCLUDABLE IN DISTRICTS.] (a) The 
 83.36  authority may request inclusion in a tax increment financing 
 84.1   district and the county auditor may certify the original tax 
 84.2   capacity of a parcel or a part of a parcel that qualified under 
 84.3   the provisions of section 273.111 or 273.112 or chapter 473H for 
 84.4   taxes payable in any of the five calendar years before the 
 84.5   filing of the request for certification only for: 
 84.6      (1) a district in which 85 percent or more of the planned 
 84.7   buildings and facilities (determined on the basis of square 
 84.8   footage) are a qualified manufacturing facility or a qualified 
 84.9   distribution facility or a combination of both; or 
 84.10     (2) a qualified housing district as defined in section 
 84.11  273.1399, subdivision 1. 
 84.12     (b)(1) A distribution facility means buildings and other 
 84.13  improvements to real property that are used to conduct 
 84.14  activities in at least each of the following categories: 
 84.15     (i) to store or warehouse tangible personal property; 
 84.16     (ii) to take orders for shipment, mailing, or delivery; 
 84.17     (iii) to prepare personal property for shipment, mailing, 
 84.18  or delivery; and 
 84.19     (iv) to ship, mail, or deliver property. 
 84.20     (2) A manufacturing facility includes space used for 
 84.21  manufacturing or producing tangible personal property, including 
 84.22  processing resulting in the change in condition of the property, 
 84.23  and space necessary for and related to the manufacturing 
 84.24  activities. 
 84.25     (3) To be a qualified facility, the owner or operator of a 
 84.26  manufacturing or distribution facility must agree to pay and pay 
 84.27  90 percent or more of the employees of the facility at a rate 
 84.28  equal to or greater than 160 percent of the federal minimum wage 
 84.29  for individuals over the age of 20. 
 84.30     Sec. 7.  Minnesota Statutes 2002, section 469.1761, is 
 84.31  amended by adding a subdivision to read: 
 84.32     Subd. 3a.  [MIXED-INCOME OCCUPANCY PROJECTS.] (a) 
 84.33  Notwithstanding the income requirements in section 469.174, 
 84.34  subdivision 11, or subdivisions 2 and 3, an authority may create 
 84.35  housing districts for developments that contain both 
 84.36  owner-occupied and residential rental units for mixed-income 
 85.1   occupancy.  Such a district consists of a project, or a portion 
 85.2   of a project, intended for occupancy, in part, by persons of low 
 85.3   and moderate income as defined in chapter 462A, Title II, of the 
 85.4   National Housing Act of 1934; the National Housing Act of 1959; 
 85.5   the United States Housing Act of 1937, as amended; Title V of 
 85.6   the Housing Act of 1949, as amended; any other similar present 
 85.7   or future federal, state, or municipal legislation, or the 
 85.8   regulations promulgated under any of those acts, as further set 
 85.9   forth in this section.  Twenty percent of the units in the 
 85.10  development in the housing district must be occupied by 
 85.11  individuals whose family income is equal to or less than 50 
 85.12  percent of area median gross income and an additional 60 percent 
 85.13  of the units in the development in the housing district must be 
 85.14  occupied by individuals whose family income is equal to or less 
 85.15  than 115 percent of area median gross income.  Twenty percent of 
 85.16  the units in the development in the housing district shall not 
 85.17  be subject to any income limitations. 
 85.18     (b) For purposes of this subdivision, "family income" means 
 85.19  the median gross income for the area as determined under section 
 85.20  42 of the Internal Revenue Code of 1986, as amended.  The income 
 85.21  requirements of this subdivision shall be deemed to be satisfied 
 85.22  if the sum of qualified owner-occupied units and qualified 
 85.23  residential rental units equals the required total number of 
 85.24  qualified units.  Owner-occupied units must be initially 
 85.25  purchased and occupied by individuals whose family income 
 85.26  satisfies the income requirements of this subdivision.  For 
 85.27  residential rental property, the income requirements of this 
 85.28  subdivision apply for the duration of the tax increment district.
 85.29     (c) The development in the housing district, but not the 
 85.30  project, does not qualify under this subdivision if the fair 
 85.31  market value of the improvements that are constructed for 
 85.32  commercial uses or for uses other than owner-occupied and rental 
 85.33  mixed-income housing consists of more than 20 percent of the 
 85.34  total fair market value of the planned improvements in the 
 85.35  development plan or agreement.  The fair market value of the 
 85.36  improvements may be determined using the cost of construction, 
 86.1   capitalized income, or other appropriate method of estimating 
 86.2   market value. 
 86.3      <b>[EFFECTIVE DATE.]</b> This section is effective for districts 
 86.4   for which certification is requested after July 31, 2003. 
 86.5      Sec. 8.  Minnesota Statutes 2002, section 469.1763, 
 86.6   subdivision 2, is amended to read: 
 86.7      Subd. 2.  [EXPENDITURES OUTSIDE DISTRICT.] (a) For each tax 
 86.8   increment financing district, an amount equal to at least 75 
 86.9   percent of the revenue derived from tax increments paid by 
 86.10  properties in the district must be expended on activities in the 
 86.11  district or to pay bonds, to the extent that the proceeds of the 
 86.12  bonds were used to finance activities in the district or to pay, 
 86.13  or secure payment of, debt service on credit enhanced bonds.  
 86.14  For districts, other than redevelopment districts for which the 
 86.15  request for certification was made after June 30, 1995, the 
 86.16  in-district percentage for purposes of the preceding sentence is 
 86.17  80 percent.  Not more than 25 percent of the revenue derived 
 86.18  from tax increments paid by properties in the district may be 
 86.19  expended, through a development fund or otherwise, on activities 
 86.20  outside of the district but within the defined geographic area 
 86.21  of the project except to pay, or secure payment of, debt service 
 86.22  on credit enhanced bonds.  For districts, other than 
 86.23  redevelopment districts for which the request for certification 
 86.24  was made after June 30, 1995, the pooling percentage for 
 86.25  purposes of the preceding sentence is 20 percent.  The revenue 
 86.26  derived from tax increments for the district that are expended 
 86.27  on costs under section 469.176, subdivision 4h, paragraph (b), 
 86.28  may be deducted first before calculating the percentages that 
 86.29  must be expended within and without the district.  
 86.30     (b) In the case of a housing district, a housing project, 
 86.31  as defined in section 469.174, subdivision 11, is an activity in 
 86.32  the district.  
 86.33     (c) All administrative expenses are for activities outside 
 86.34  of the district, except that if the only expenses for activities 
 86.35  outside of the district under this subdivision are for the 
 86.36  purposes described in paragraph (d), administrative expenses 
 87.1   will be considered as expenditures for activities in the 
 87.2   district. 
 87.3      (d) The authority may elect, in the tax increment financing 
 87.4   plan for the district, to increase by up to ten percentage 
 87.5   points the permitted amount of expenditures for activities 
 87.6   located outside the geographic area of the district under 
 87.7   paragraph (a).  As permitted by section 469.176, subdivision 4k, 
 87.8   the expenditures, including the permitted expenditures under 
 87.9   paragraph (a), need not be made within the geographic area of 
 87.10  the project.  To qualify for the increase under this paragraph, 
 87.11  the expenditures must: 
 87.12     (1) be used exclusively to assist housing that meets the 
 87.13  requirement for a qualified low-income building, as that term is 
 87.14  used in section 42 of the Internal Revenue Code; 
 87.15     (2) not exceed the qualified basis of the housing, as 
 87.16  defined under section 42(c) of the Internal Revenue Code, less 
 87.17  the amount of any credit allowed under section 42 of the 
 87.18  Internal Revenue Code; and 
 87.19     (3) be used to: 
 87.20     (i) acquire and prepare the site of the housing; 
 87.21     (ii) acquire, construct, or rehabilitate the housing; or 
 87.22     (iii) make public improvements directly related to the 
 87.23  housing. 
 87.24     Sec. 9.  Minnesota Statutes 2002, section 469.177, 
 87.25  subdivision 1, is amended to read: 
 87.26     Subdivision 1.  [ORIGINAL NET TAX CAPACITY.] (a) Upon or 
 87.27  after adoption of a tax increment financing plan, the auditor of 
 87.28  any county in which the district is situated shall, upon request 
 87.29  of the authority, certify the original net tax capacity of the 
 87.30  tax increment financing district and that portion of the 
 87.31  district overlying any subdistrict as described in the tax 
 87.32  increment financing plan and shall certify in each year 
 87.33  thereafter the amount by which the original net tax capacity has 
 87.34  increased or decreased as a result of a change in tax exempt 
 87.35  status of property within the district and any subdistrict, 
 87.36  reduction or enlargement of the district or changes pursuant to 
 88.1   subdivision 4.  
 88.2      (b) For districts approved under section 469.175, 
 88.3   subdivision 3, or parcels added to existing districts after May 
 88.4   1, 1988, if the classification under section 273.13 of property 
 88.5   located in a district changes to a classification that has a 
 88.6   different assessment ratio, the original net tax capacity of 
 88.7   that property must be redetermined at the time when its use is 
 88.8   changed as if the property had originally been classified in the 
 88.9   same class in which it is classified after its use is changed. 
 88.10     (c) The amount to be added to the original net tax capacity 
 88.11  of the district as a result of previously tax exempt real 
 88.12  property within the district becoming taxable equals the net tax 
 88.13  capacity of the real property as most recently assessed pursuant 
 88.14  to section 273.18 or, if that assessment was made more than one 
 88.15  year prior to the date of title transfer rendering the property 
 88.16  taxable, the net tax capacity assessed by the assessor at the 
 88.17  time of the transfer.  If improvements are made to tax exempt 
 88.18  property after certification of the district and before the 
 88.19  parcel becomes taxable, the assessor shall, at the request of 
 88.20  the authority, separately assess the estimated market value of 
 88.21  the improvements.  If the property becomes taxable, the county 
 88.22  auditor shall add to original net tax capacity, the net tax 
 88.23  capacity of the parcel, excluding the separately assessed 
 88.24  improvements.  If substantial taxable improvements were made to 
 88.25  a parcel after certification of the district and if the property 
 88.26  later becomes tax exempt, in whole or part, as a result of the 
 88.27  authority acquiring the property through foreclosure or exercise 
 88.28  of remedies under a lease or other revenue agreement or as a 
 88.29  result of tax forfeiture, the amount to be added to the original 
 88.30  net tax capacity of the district as a result of the property 
 88.31  again becoming taxable is the amount of the parcel's value that 
 88.32  was included in original net tax capacity when the parcel was 
 88.33  first certified.  The amount to be added to the original net tax 
 88.34  capacity of the district as a result of enlargements equals the 
 88.35  net tax capacity of the added real property as most recently 
 88.36  certified by the commissioner of revenue as of the date of 
 89.1   modification of the tax increment financing plan pursuant to 
 89.2   section 469.175, subdivision 4. 
 89.3      (d) For districts approved under section 469.175, 
 89.4   subdivision 3, or parcels added to existing districts after May 
 89.5   1, 1988, if the net tax capacity of a property increases because 
 89.6   the property no longer qualifies under the Minnesota 
 89.7   Agricultural Property Tax Law, section 273.111; the Minnesota 
 89.8   Open Space Property Tax Law, section 273.112; or the 
 89.9   Metropolitan Agricultural Preserves Act, chapter 473H, or 
 89.10  because platted, unimproved property is improved or three years 
 89.11  pass after approval of the plat under section 273.11, 
 89.12  subdivision 1, the increase in net tax capacity must be added to 
 89.13  the original net tax capacity.  
 89.14     (e) The amount to be subtracted from the original net tax 
 89.15  capacity of the district as a result of previously taxable real 
 89.16  property within the district becoming tax exempt, or a reduction 
 89.17  in the geographic area of the district, shall be the amount of 
 89.18  original net tax capacity initially attributed to the property 
 89.19  becoming tax exempt or being removed from the district.  If the 
 89.20  net tax capacity of property located within the tax increment 
 89.21  financing district is reduced by reason of a court-ordered 
 89.22  abatement, stipulation agreement, voluntary abatement made by 
 89.23  the assessor or auditor or by order of the commissioner of 
 89.24  revenue, the reduction shall be applied to the original net tax 
 89.25  capacity of the district when the property upon which the 
 89.26  abatement is made has not been improved since the date of 
 89.27  certification of the district and to the captured net tax 
 89.28  capacity of the district in each year thereafter when the 
 89.29  abatement relates to improvements made after the date of 
 89.30  certification.  The county auditor may specify reasonable form 
 89.31  and content of the request for certification of the authority 
 89.32  and any modification thereof pursuant to section 469.175, 
 89.33  subdivision 4.  
 89.34     (f) If a parcel of property contained a substandard 
 89.35  building that was demolished or removed and if the authority 
 89.36  elects to treat the parcel as occupied by a substandard building 
 90.1   under section 469.174, subdivision 10, paragraph (b), the 
 90.2   auditor shall certify the original net tax capacity of the 
 90.3   parcel using the greater of (1) the current net tax capacity of 
 90.4   the parcel, or (2) the estimated market value of the parcel for 
 90.5   the year in which the building was demolished or removed, but 
 90.6   applying the class rates for the current year. 
 90.7      (g) For a redevelopment district qualifying under section 
 90.8   469.174, subdivision 10, paragraph (a), clause (4), as a 
 90.9   qualified disaster area, the auditor shall certify the value of 
 90.10  the land as the original tax capacity for any parcel in the 
 90.11  district that contains a building that suffered substantial 
 90.12  damage as a result of the disaster or emergency. 
 90.13     <b>[EFFECTIVE DATE.]</b> This section is effective for districts 
 90.14  for which the request for certification is made after the day 
 90.15  following final enactment. 
 90.16     Sec. 10.  Minnesota Statutes 2002, section 469.1792, is 
 90.17  amended to read: 
 90.18     469.1792 [SPECIAL DEFICIT AUTHORITY.] 
 90.19     Subdivision 1.  [SCOPE.] This section applies only to an 
 90.20  authority with a preexisting district for which: 
 90.21     (1) the increments from the district were insufficient to 
 90.22  pay preexisting obligations as a result of the class rate 
 90.23  changes or the elimination of the state-determined general 
 90.24  education property tax levy under this act, or both; or 
 90.25     (2)(i) the development authority has a binding contract 
 90.26  with a person requiring the authority to pay to the person an 
 90.27  amount that may not exceed the increment from the district or a 
 90.28  specific development within the district; and 
 90.29     (ii) the authority is unable to pay the full amount under 
 90.30  the contract from the pledged increments or other increments 
 90.31  from the district that would have been due if the class rate 
 90.32  changes or elimination of the state-determined general education 
 90.33  property tax levy or both had not been made under Laws 2001, 
 90.34  First Special Session chapter 5; 
 90.35     (3) the authority amends its tax increment financing plan 
 90.36  to establish an affordable housing account to which increments 
 91.1   are pledged; or 
 91.2      (4) the authority amends its tax increment financing plan 
 91.3   to establish a hazardous substance, pollutant, or contaminant 
 91.4   remediation account to which increments are pledged. 
 91.5      Subd. 2.  [DEFINITIONS.] (a) For purposes of this section, 
 91.6   the following terms have the meanings given. 
 91.7      (b) "Affordable housing account" means an account in which 
 91.8   increment is deposited solely for affordable housing activities 
 91.9   as defined in section 469.174, subdivision 11.  
 91.10     (c) "Hazardous substance, pollutant, or contaminant 
 91.11  remediation account" means an account in which increment is 
 91.12  deposited solely for removal or remediation activities described 
 91.13  in section 469.174, subdivisions 16 to 19.  
 91.14     (d) "Preexisting district" means a tax increment financing 
 91.15  district for which the request for certification was made before 
 91.16  August 1, 2001. 
 91.17     (c) (e) "Preexisting obligation" means a bond or binding 
 91.18  contract that: 
 91.19     (1) was issued or approved before August 1, 2001, or was 
 91.20  issued pursuant to a binding contract entered into before August 
 91.21  1, 2001; 
 91.22     (2) is secured by increments from a preexisting district. 
 91.23     Subd. 3.  [ACTIONS AUTHORIZED.] (a) An authority with a 
 91.24  district qualifying under this section may take either or both 
 91.25  any or all of the following actions for any or all of its 
 91.26  preexisting districts: 
 91.27     (1) the authority may elect that the original local tax 
 91.28  rate under section 469.177, subdivision 1a, does not apply to 
 91.29  the district; and 
 91.30     (2) the authority may elect the fiscal disparities 
 91.31  contribution will be computed under section 469.177, subdivision 
 91.32  3, paragraph (a), regardless of the election that was made for 
 91.33  the district; or 
 91.34     (3) the authority may elect to extend the duration of the 
 91.35  district by up to eight additional years beyond the duration 
 91.36  limit on the collection of increment under section 469.176, 
 92.1   subdivision 1b or 1e, or a special law applicable to the 
 92.2   district. 
 92.3      (b) The authority may take action under this subdivision 
 92.4   only after the municipality approves the action, by resolution, 
 92.5   after notice and public hearing in the manner provided under 
 92.6   section 469.175, subdivision 2. 
 92.7      (c) The additional increment that may be collected as a 
 92.8   result of actions taken under this section and any increments 
 92.9   transferred to the district under section 469.1763, subdivision 
 92.10  6, is limited to the lesser of: 
 92.11     (1) the amount the authority is obligated to pay under 
 92.12  preexisting obligations out of the increments from the district 
 92.13  that result in application of this section under subdivision 1; 
 92.14  or 
 92.15     (2) an amount estimated to represent the difference between 
 92.16  the increment that would have been collected if the class rate 
 92.17  changes and elimination of the state-determined general 
 92.18  education property tax levy had not been made under Laws 2001, 
 92.19  First Special Session chapter 5, for the term of the district 
 92.20  under general law, and the actual increments collected for the 
 92.21  term of the district. 
 92.22     Subd. 4.  [EXPENDITURES FROM AFFORDABLE HOUSING 
 92.23  ACCOUNTS.] Increment from an affordable housing account may be 
 92.24  spent by an authority anywhere within its area of operation.  
 92.25  Notwithstanding the definition of a project under section 
 92.26  469.174, increments may be spent to assist housing that meets 
 92.27  the requirements under section 469.1761.  The limitation imposed 
 92.28  by section 469.1763, subdivision 2, does not apply to any 
 92.29  transfers of increment to the affordable housing account to the 
 92.30  extent that the amount transferred to the account under this 
 92.31  subdivision does not exceed ten percent of the revenue derived 
 92.32  from tax increments paid by properties in the district in the 
 92.33  year. 
 92.34     Subd. 5.  [EXPENDITURES FROM HAZARDOUS SUBSTANCE, 
 92.35  POLLUTANT, OR CONTAMINANT REMEDIATION ACCOUNT.] Increment from a 
 92.36  hazardous substance, pollutant, or contaminant remediation 
 93.1   account may be spent by an authority anywhere within its area of 
 93.2   operation.  Notwithstanding the definition of a project under 
 93.3   section 469.174, increments may be expended to remediation and 
 93.4   removal activities that meet the requirements of section 
 93.5   469.176, subdivision 4b or 4e.  The limitation imposed by 
 93.6   section 469.1763, subdivision 2, does not apply to any transfers 
 93.7   of increment to the hazardous substance, pollutant, or 
 93.8   contaminant remediation account to the extent that the amount 
 93.9   transferred to the account under this subdivision does not 
 93.10  exceed ten percent of the revenue derived from tax increments 
 93.11  paid by properties in the district in the year. 
 93.12     <b>[EFFECTIVE DATE.]</b> This section is effective for actions 
 93.13  taken and resolutions approved after June 30, 2003. 
 93.14     Sec. 11.  Laws 1967, chapter 558, section 1, subdivision 5, 
 93.15  as amended by Laws 1979, chapter 135, section 1, and Laws 1985, 
 93.16  chapter 98, section 2, is amended to read:  
 93.17     Subd. 5.  Promotion of tourist, agricultural and industrial 
 93.18  developments.  The amount to be spent annually for the purposes 
 93.19  of this subdivision shall not exceed one dollar five dollars per 
 93.20  capita of the county's population.  
 93.21     <b>[EFFECTIVE DATE.]</b> This section is effective the day after 
 93.22  the governing body of Beltrami county and its chief clerical 
 93.23  officer timely complete their compliance with Minnesota 
 93.24  Statutes, section 645.021, subdivisions 2 and 3. 
 93.25     Sec. 12.  Laws 2002, chapter 377, article 11, section 1, is 
 93.26  amended to read: 
 93.27     Section 1.  [CITY OF MOORHEAD; TAX LEVY AUTHORIZED.] 
 93.28     (a) Each year the city of Moorhead may impose a tax on all 
 93.29  class 3a and class 3b property located in the city in an amount 
 93.30  which the city determines is equal to the reduction in revenues 
 93.31  from increment from all tax increment financing districts in the 
 93.32  city resulting from the class rate changes and the elimination 
 93.33  of the state-determined general education property levy under 
 93.34  Laws 2001, First Special Session chapter 5.  The proceeds of 
 93.35  this tax may only be used to pay preexisting obligations as 
 93.36  defined in Minnesota Statutes, section 469.1763, subdivision 6, 
 94.1   whether general obligations or payable wholly from tax 
 94.2   increments.  The tax must be levied and collected in the same 
 94.3   manner and as part of the property tax levied by the city and is 
 94.4   subject to the same administrative, penalty, and enforcement 
 94.5   provisions.  A tax imposed under this section is a special levy 
 94.6   and is not subject to levy limitations under Minnesota Statutes, 
 94.7   section 275.71. 
 94.8      (b) This section expires December 31, 2005. 
 94.9      <b>[EFFECTIVE DATE.]</b> This section is effective upon approval 
 94.10  by and compliance with Minnesota Statutes, section 645.021, 
 94.11  subdivision 3, by the governing body of the city of Moorhead." 
 94.12     Sec. 13.  [DEFINITIONS.] 
 94.13     Subdivision 1.  [DEFINITIONS.] For the purposes of sections 
 94.14  13 to 19, the terms defined in this section have the following 
 94.15  meanings. 
 94.16     Subd. 2.  [LAKES AREA ECONOMIC DEVELOPMENT 
 94.17  AUTHORITY.] "Lakes area economic development authority" or 
 94.18  "authority" means the lakes area economic authority established 
 94.19  as provided in section 14. 
 94.20     Subd. 3.  [PERSON.] "Person" means an individual, 
 94.21  partnership, corporation, cooperative, or other organization or 
 94.22  entity, public or private. 
 94.23     Subd. 4.  [MEMBER.] "Member" means the city of Alexandria 
 94.24  or Garfield or the township of Alexandria or La Grand, or any 
 94.25  other municipality, the geographic area of which is included 
 94.26  within the jurisdiction of the authority. 
 94.27     Subd. 5.  [MUNICIPALITY.] "Municipality" means a statutory 
 94.28  or home rule charter city or town located in Douglas county. 
 94.29     Sec. 14.  [LAKES AREA ECONOMIC DEVELOPMENT AUTHORITY.] 
 94.30     Subdivision 1.  [ESTABLISHMENT.] A lakes area economic 
 94.31  development authority with jurisdiction over the geographic area 
 94.32  of its members is established as a public corporation and 
 94.33  political subdivision of the state with perpetual succession and 
 94.34  all the rights, powers, privileges, immunities, and duties that 
 94.35  may be validly granted to or imposed upon a municipal 
 94.36  corporation, as provided in sections 13 to 19. 
 95.1      Subd. 2.  [BOARD OF COMMISSIONERS.] The authority is 
 95.2   governed by a board of commissioners to be selected as follows:  
 95.3   the mayor of each member city, and the chair of the town board 
 95.4   of each member town shall appoint one commissioner, subject to 
 95.5   the approval of the respective city council or town board.  The 
 95.6   terms of the commissioner are as provided in subdivision 5. 
 95.7      Subd. 3.  [TIME LIMITS FOR SELECTION, ALTERNATIVE 
 95.8   APPOINTMENT BY DISTRICT JUDGE.] The initial appointment of 
 95.9   commissioners must be made no later than 60 days after sections 
 95.10  13 to 19 become effective.  Subsequent appointments must be made 
 95.11  within 60 days before the expiration of a term in the same 
 95.12  manner as the predecessor was selected.  A vacancy on the board 
 95.13  must be filled within 60 days after it occurs.  If a selection 
 95.14  is not made within the prescribed time, the chief judge of the 
 95.15  seventh judicial district of the Minnesota district court on 
 95.16  application by an interested person shall appoint an eligible 
 95.17  person to the board. 
 95.18     Subd. 4.  [VACANCIES.] If a vacancy occurs in the office of 
 95.19  commissioner, the vacancy must be filled for the unexpired term 
 95.20  in a like manner as provided for selection of the commissioner 
 95.21  who vacated the office.  The office must be considered vacant 
 95.22  under the conditions specified in Minnesota Statutes, section 
 95.23  351.02. 
 95.24     Subd. 5.  [TERMS OF OFFICE.] The terms of the initial 
 95.25  appointees to the board of commissioners are for three, four, 
 95.26  five, and six years and must be established by lot among the 
 95.27  initial four commissioners.  The mayor or town board chair of 
 95.28  any new member added under section 17 shall designate the term, 
 95.29  not to exceed six years, of the first commissioner selected to 
 95.30  represent the member.  Succeeding terms of all commissioners are 
 95.31  six years, except that each commissioner serves until a 
 95.32  successor has been duly selected and qualified. 
 95.33     Subd. 6.  [REMOVAL.] A commissioner may be removed by the 
 95.34  unanimous vote of the appointing governing body, with or without 
 95.35  cause. 
 95.36     Subd. 7.  [QUALIFICATIONS.] A commissioner may, but need 
 96.1   not, be a resident of the territory of the member appointing 
 96.2   that commissioner. 
 96.3      Subd. 8.  [COMPENSATION.] A commissioner must be paid a per 
 96.4   diem compensation for attending a regular or special meeting in 
 96.5   an amount determined by the board.  A commissioner must be 
 96.6   reimbursed for all reasonable expenses incurred in the 
 96.7   performance of the commissioner's duties as determined by the 
 96.8   board. 
 96.9      Sec. 15.  [POWERS; APPLICATION OF EDA LAW.] 
 96.10     Subdivision 1.  [USE OF EDA POWERS.] Except as otherwise 
 96.11  provided in sections 13 to 19, the authority may exercise any of 
 96.12  the powers of an economic development authority (EDA) provided 
 96.13  by Minnesota Statutes, sections 469.090 to 469.1082, and for 
 96.14  this purpose the term "city" means a member.  Minnesota 
 96.15  Statutes, sections 469.096 to 469.101, 469.103 to 469.106, and 
 96.16  469.108 to 469.1081, apply to the authority, except that the 
 96.17  authority's fiscal year is the calendar year.  
 96.18     Subd. 2.  [LAW THAT IS NOT APPLICABLE.] The provisions in: 
 96.19     (1) Minnesota Statutes, section 469.091, subdivision 1, 
 96.20  expressly relating to: 
 96.21     (i) the adoption of an enabling resolution; 
 96.22     (ii) Minnesota Statutes, section 469.092; or 
 96.23     (iii) housing and redevelopment authorities; and 
 96.24     (2) Minnesota Statutes, sections 469.093, 469.095, 469.102, 
 96.25  and 469.107; 
 96.26  do not apply to the authority. 
 96.27     Sec. 16.  [MEMBERS MUST LEVY TAXES FOR AUTHORITY.] 
 96.28     (a) A member shall, at the request of the authority, levy a 
 96.29  tax in any year for the benefit of the authority.  The tax is, 
 96.30  for each member, a pro rata portion of the total amount of tax 
 96.31  requested by the authority based on the taxable market value 
 96.32  within a member's jurisdiction, but in no event may the tax in 
 96.33  any year exceed 0.01813 percent of taxable market value.  For 
 96.34  purposes of this section, "taxable market value" has the meaning 
 96.35  as given in Minnesota Statutes, section 273.032. 
 96.36     (b) The treasurer of each member city or town shall, within 
 97.1   15 days after receiving the property tax settlements from the 
 97.2   county treasurer, pay to the treasurer of the authority the 
 97.3   amount collected for this purpose.  The money must be used by 
 97.4   the authority for the purposes provided by sections 13 to 19. 
 97.5      Sec. 17.  [ADDITION AND WITHDRAWAL OF MEMBERS.] 
 97.6      Subdivision 1.  [ADDITIONS.] A municipality upon a 
 97.7   resolution adopted by a four-fifths vote of all of its governing 
 97.8   body may petition the authority to be included within the 
 97.9   jurisdiction of the authority and, if approved by the authority, 
 97.10  the geographic area of the municipality must be included within 
 97.11  the jurisdiction of the authority and subject to the 
 97.12  jurisdiction of the authority under sections 13 to 19. 
 97.13     Subd. 2.  [WITHDRAWALS.] A municipality may withdraw from 
 97.14  the authority by resolution of its governing body.  The 
 97.15  municipality must notify the board of commissioners of the 
 97.16  authority of the withdrawal by providing a copy of the 
 97.17  resolution at least two years in advance of the proposed 
 97.18  withdrawal.  Unless the authority and the withdrawing member 
 97.19  agree otherwise by action of their governing bodies, the taxable 
 97.20  property of the withdrawing member is subject to the property 
 97.21  tax levy under section 16 for two taxes payable years following 
 97.22  the notification of the withdrawal and the withdrawing member 
 97.23  retains any rights, obligations, and liabilities obtained or 
 97.24  incurred during its participation. 
 97.25     Sec. 18.  [CONTRACTS WITH NONPROFIT CORPORATIONS.] 
 97.26     The authority may enter into contracts with one or more 
 97.27  nonprofit corporations to make, from funds of and under 
 97.28  guidelines set by the authority, loans or grants for projects 
 97.29  the authority may undertake under sections 13 to 19.  Minnesota 
 97.30  Statutes, section 465.719, does not apply so long as the 
 97.31  nonprofit corporation is not described in Minnesota Statutes, 
 97.32  section 465.719, subdivision 1, paragraph (b), item (i), or (b), 
 97.33  item (ii). 
 97.34     Sec. 19.  [RELATION TO EXISTING LAWS.] 
 97.35     Sections 13 to 19 must be given full effect notwithstanding 
 97.36  any law or charter that is inconsistent with them. 
 98.1      Sec. 20.  [LOCAL APPROVAL; EFFECTIVE DATE.] 
 98.2      Sections 13 to 19 are only effective as to all affected 
 98.3   governing bodies on the day after the last of the governing 
 98.4   bodies or town boards of the cities of Alexandria and Garfield 
 98.5   and the towns of Alexandria and La Grand in Douglas county and 
 98.6   the chief clerical officer of each of them timely complete their 
 98.7   compliance with Minnesota Statutes, section 645.021, 
 98.8   subdivisions 2 and 3. 
 98.9      Sec. 21.  [MULTICITY HOUSING AND REDEVELOPMENT AUTHORITY.] 
 98.10     Subdivision 1.  [ESTABLISHED.] A multicity authority is 
 98.11  established that includes the cities of Arden Hills, Blaine, 
 98.12  Circle Pines, Mounds View, New Brighton, Roseville, and 
 98.13  Shoreview, to be known as the housing and redevelopment 
 98.14  authority in and for the "I-35W Corridor Coalition." 
 98.15     Subd. 2.  [PURPOSES.] In addition to the purposes set forth 
 98.16  in Minnesota Statutes, sections 469.001 to 469.047, the purposes 
 98.17  of the authority are: 
 98.18     (1) to assist homeowners with flexible financing tools to 
 98.19  complete home improvement projects; 
 98.20     (2) to assist owners through the complex construction 
 98.21  process when renovating their homes; 
 98.22     (3) to assist individuals and families to become new 
 98.23  homeowners; 
 98.24     (4) to reduce the number of substandard housing units; and 
 98.25     (5) to keep the community's housing stock usable for future 
 98.26  generations. 
 98.27     Subd. 3.  [DEFINITIONS.] (a) For the purposes of this 
 98.28  section, the terms defined in Minnesota Statutes, sections 
 98.29  469.001 to 469.047, have the meanings given to them.  The terms 
 98.30  defined in this subdivision apply to this section unless the 
 98.31  context indicates a different meaning. 
 98.32     (b) "Area of operation" means the area within the 
 98.33  territorial boundaries of the seven cities. 
 98.34     (c) "Authority" means the housing and redevelopment 
 98.35  authority in and for the I-35W Corridor Coalition. 
 98.36     (d) "Multicounty authority" means the authority. 
 99.1      (e) "State public body" means the authority. 
 99.2      Subd. 4.  [COMMISSIONERS.] The authority consists of 14 
 99.3   commissioners who shall be the mayor or acting mayor and the 
 99.4   city manager, acting city manager, city administrator, or acting 
 99.5   city administrator of each city in the authority.  The term of 
 99.6   the mayor or acting mayor is coterminous with the mayoral term 
 99.7   of office.  In the case of the city manager, acting city 
 99.8   manager, city administrator, or acting city administrator, the 
 99.9   term is five years from the date of appointment.  Each 
 99.10  commissioner has one vote. 
 99.11     Subd. 5.  [LEVY AUTHORITY.] Subject to the consent by 
 99.12  resolution of the cities in and for which a levy is created, the 
 99.13  authority may levy a tax upon all taxable property within its 
 99.14  area of operation in accordance with Minnesota Statutes, section 
 99.15  469.033, subdivision 6.  Any tax levied under this section by 
 99.16  the authority is not considered to be in addition to any tax 
 99.17  previously levied or to be levied under Minnesota Statutes, 
 99.18  section 469.033, subdivision 6.  A levy by the authority under 
 99.19  this section and a levy by any city under Minnesota Statutes, 
 99.20  section 469.033, subdivision 6, may not together exceed the levy 
 99.21  limits in that section.  The levy is effective after the 
 99.22  resolutions of consent have been adopted by all the cities in 
 99.23  the area of operation. 
 99.24     Subd. 6.  [APPROVAL OF EXISTING AUTHORITIES.] All projects, 
 99.25  redevelopment plans, or levies must be approved by the cities in 
 99.26  which they will be located, implemented, or levied.  Approval of 
 99.27  projects, redevelopment plans, or levies is not required by the 
 99.28  county in which the affected city is located or by an existing 
 99.29  housing and redevelopment authority or economic development 
 99.30  authority of the affected city. 
 99.31     Subd. 7.  [APPLICATION OF OTHER LAWS.] Provisions in 
 99.32  Minnesota Statutes, sections 469.001 to 469.047, applicable to 
 99.33  housing and redevelopment authorities also apply to the housing 
 99.34  and redevelopment authority in and for the 1-35W Corridor 
 99.35  Coalition subject to this section. 
 99.36     Subd. 8.  [SUNSET.] This section expires on December 31, 
100.1   2013. 
100.2      Subd. 9.  [EFFECTIVE DATE.] This section is effective for 
100.3   the cities of Arden Hills, Blaine, Circle Pines, Mounds View, 
100.4   New Brighton, Roseville, and Shoreview after the governing body 
100.5   and its chief clerical officer of the last of those seven cities 
100.6   timely complete their compliance with Minnesota Statutes, 
100.7   section 645.021, subdivisions 2 and 3. 
100.8      Sec. 22.  [CITY OF DETROIT LAKES.] 
100.9      Notwithstanding limitations on the amount of increment that 
100.10  may be pooled to eliminate a deficit under Minnesota Statutes, 
100.11  section 469.1763, subdivision 6, the city of Detroit Lakes may 
100.12  transfer available increments from any of its tax increment 
100.13  financing districts to TIF District 21-1 to be used to eliminate 
100.14  a deficit in the increment generated by TIF District 21-1 that 
100.15  is required to pay debt service on obligations issued for the 
100.16  district.  The authority under this section applies to deficits 
100.17  occurring in 2000 and subsequent years.  
100.18     <b>[EFFECTIVE DATE.]</b> This section is effective upon approval 
100.19  by the governing body of Detroit Lakes and compliance with 
100.20  Minnesota Statutes, section 645.021. 
100.21     Sec. 23.  [CITY OF DULUTH; EXPENDITURE OF TAX INCREMENTS.] 
100.22     Subdivision 1.  [EXPENDITURES AUTHORIZED.] Notwithstanding 
100.23  Minnesota Statutes, section 469.1764, the Duluth economic 
100.24  development authority may expend up to $3,000,000 of tax 
100.25  increments collected from development district No. 3 on 
100.26  activities located outside the geographic boundaries of the 
100.27  district, subject to the conditions in this section. 
100.28     Subd. 2.  [LOCATION OF EXPENDITURES.] Tax increments must 
100.29  be spent within the area bounded by the following described 
100.30  lines: 
100.31     (1) to the north by a line described as follows:  beginning 
100.32  at the intersection of the centerline of 29th Avenue West and 
100.33  the southerly line of West Michigan Street, thence southwesterly 
100.34  along the southerly line of West Michigan Street to the east 
100.35  limit of the DM&IR railway right-of-way; thence northwesterly 
100.36  along the easterly limit of the DM&IR railway right-of-way to 
101.1   the centerline of West Superior Street to its intersection with 
101.2   the centerline of Jenswold Street; thence southwesterly along 
101.3   the centerline of Jenswold Street to its intersection with the 
101.4   centerline of the Northern Pacific Railway Company's main line 
101.5   to St. Paul; thence southwesterly along the centerline of the 
101.6   Northern Pacific Railway Company's main line to St. Paul to its 
101.7   intersection with the extended centerline of 37th Avenue West; 
101.8      (2) to the west by a line described as follows:  beginning 
101.9   at the intersection of the centerline of the Northern Pacific 
101.10  Railway Company's main line to St. Paul and the extended 
101.11  centerline of 37th Avenue West; then southeasterly along said 
101.12  extended centerline of 37th Avenue West to its intersection with 
101.13  the centerline of Interstate highway 35; 
101.14     (3) to the south by the centerline of Interstate highway 
101.15  35; and 
101.16     (4) to the east by the centerline of 29th Avenue West. 
101.17     Subd. 3.  [LIMITATIONS ON USE.] All expenditures of tax 
101.18  increments permitted by this section must meet the requirements 
101.19  of Minnesota Statutes, section 469.176, subdivision 4j. 
101.20     <b>[EFFECTIVE DATE.]</b> This section is effective June 1, 2003. 
101.21     Sec. 24.  [CITY OF DULUTH; TAX INCREMENT FINANCING 
101.22  DISTRICT.] 
101.23     Subdivision 1.  [AUTHORIZATION.] Upon approval of the 
101.24  governing body of the city of Duluth, the Duluth economic 
101.25  development authority may create an economic development tax 
101.26  increment financing district for aircraft related facilities.  
101.27  Except as otherwise provided in this section, the provisions of 
101.28  Minnesota Statutes, sections 469.174 to 469.179, apply to the 
101.29  district. 
101.30     Subd. 2.  [SPECIAL RULES.] (a) Notwithstanding the 
101.31  provisions of Minnesota Statutes, section 469.176, subdivision 
101.32  1b, paragraph (a), clause (3), no tax increment shall be paid to 
101.33  the authority after 25 years after receipt by the authority of 
101.34  the first tax increment for the district authorized by this 
101.35  section. 
101.36     (b) The development in the district authorized by this 
102.1   section shall be deemed to be a purpose authorized under 
102.2   Minnesota Statutes, section 469.176, subdivision 4c, paragraph 
102.3   (a). 
102.4      (c) For purposes of Minnesota Statutes, section 469.177, 
102.5   subdivision 12, the applicable maximum duration limit of the 
102.6   district authorized by this section shall be as set forth in 
102.7   paragraph (a). 
102.8      <b>[EFFECTIVE DATE.]</b> This section is effective upon compliance 
102.9   with the requirements of Minnesota Statutes, sections 469.1782 
102.10  and 645.021. 
102.11     Sec. 25.  [CITY OF MONTICELLO; EXTENSION OF TIME FOR 
102.12  ACTIVITY IN A TAX INCREMENT FINANCING DISTRICT.] 
102.13     The requirements of Minnesota Statutes, section 469.1763, 
102.14  subdivision 3, that activities must be undertaken within a 
102.15  five-year period from the date of certification of a tax 
102.16  increment financing district, must be considered to be met for 
102.17  the city of Monticello tax increment financing district no. 1-22 
102.18  if the activities are undertaken within ten years from the date 
102.19  of certification of the district. 
102.20     <b>[EFFECTIVE DATE.]</b> This section is effective upon compliance 
102.21  by the governing body of the city of Monticello with the 
102.22  requirements of Minnesota Statutes, section 645.021. 
102.23     Sec. 26.  [CITY OF NEW HOPE; TAX INCREMENT FINANCING 
102.24  DISTRICT.] 
102.25     Subdivision 1.  [SPECIAL RULES.] (a) At the election of the 
102.26  city, upon adoption of the tax increment financing plan for a 
102.27  district or districts described in this section, the rules 
102.28  provided under this section apply to each such district. 
102.29     For purposes of this section, "district" means a 
102.30  redevelopment or soils condition tax increment financing 
102.31  district established by the city of New Hope or the economic 
102.32  development authority of the city within the following area:  
102.33  beginning at the intersection of Winnetka Avenue N. and the 
102.34  westerly extension of 58th Avenue N., east on the westerly 
102.35  extension of 58th Avenue N. to Sumter Avenue N., south on Sumter 
102.36  Avenue N. to Bass Lake Road, east on Bass Lake Road to the city 
103.1   boundaries of New Hope and Crystal, MN, south along that city 
103.2   boundary to St. Raphael Drive, west on St. Raphael Drive to 
103.3   Sumter Avenue N., south on Sumter Avenue N. to 53rd Avenue N., 
103.4   west on 53rd Avenue N. to Winnetka Avenue N., north on Winnetka 
103.5   Avenue N. to 55th Avenue N., west on 55th Avenue N. to Zealand 
103.6   Avenue N., north on Zealand Avenue N. to Bass Lake Road, east on 
103.7   Bass Lake Road to Yukon Avenue N., north on Yukon Avenue N. to 
103.8   Meadow Lake Road E., east on Meadow Lake Road E. to the 
103.9   intersection with the west property line of New Hope golf 
103.10  course, south along the west property line of New Hope golf 
103.11  course to Bass Lake Road, east on Bass Lake Road to Winnetka 
103.12  Avenue N., north on Winnetka Avenue N. to the point of 
103.13  beginning.  The total number of parcels that may be included 
103.14  within all such redevelopment or soils condition tax increment 
103.15  financing districts must not exceed 131 and the total acreage, 
103.16  including roads, easements, and rights-of-way, must not exceed 
103.17  130 acres. 
103.18     (b) The five-year rule under Minnesota Statutes, section 
103.19  469.1763, subdivision 3, applies as if the limit is nine years. 
103.20     (c) The limitations on expenditure of increment outside of 
103.21  the district under Minnesota Statutes, section 469.1763, 
103.22  subdivision 2, do not apply, provided that increments may only 
103.23  be expended on improvements or activities within the area 
103.24  identified in paragraph (a).  
103.25     (d) The requirement relating to the original local tax rate 
103.26  for the district under Minnesota Statutes, section 469.177, 
103.27  subdivision 1a, does not apply.  
103.28     (e) The requirements for qualifying a redevelopment 
103.29  district under Minnesota Statutes, section 469.174, subdivision 
103.30  10, do not apply to the parcels identified as 08-118-21-22-0001, 
103.31  08-118-21-33-0008, 08-118-21-33-0009, 08-118-21-33-0010, 
103.32  08-118-21-33-0011, 08-118-21-33-0013, 08-118-21-33-0018, 
103.33  08-118-21-33-0019, 08-118-21-33-0025, 08-118-21-33-0027, 
103.34  08-118-21-33-0029, 08-118-21-33-0082, and 08-118-21-33-0087, 
103.35  which are deemed substandard for the purpose of qualifying the 
103.36  district as a redevelopment district.  
104.1      Subd. 2.  [EXPIRATION.] (a) The exception under subdivision 
104.2   1, paragraph (c), from the limitations of Minnesota Statutes, 
104.3   section 469.1763, subdivision 2, expires 20 years after the 
104.4   receipt of the first increment from a district for which the 
104.5   city has elected that this section applies.  
104.6      (b) The authority to approve tax increment financing plans 
104.7   to establish a tax increment financing district subject to this 
104.8   section expires on December 31, 2013.  
104.9      Subd. 3.  [EFFECTIVE DATE.] This section is effective upon 
104.10  approval by the governing bodies of the city of New Hope and 
104.11  Hennepin county and upon compliance by the city with Minnesota 
104.12  Statutes, section 645.021, subdivision 3. 
104.13     Sec. 27.  [CITY OF RICHFIELD; TAX INCREMENT FINANCING 
104.14  DISTRICT.] 
104.15     Subdivision 1.  [AUTHORIZATION.] The city of Richfield may 
104.16  create a tax increment financing district consisting of an area 
104.17  bordered by crosstown highway 62 on the north, 66th street on 
104.18  the south, trunk highway 77 on the east, and the east side of 
104.19  16th avenue to the west.  The city or its housing and 
104.20  redevelopment authority may be the authority for the purposes of 
104.21  Minnesota Statutes, sections 469.174 to 469.179. 
104.22     Subd. 2.  [DISTRICT IS REDEVELOPMENT DISTRICT.] The 
104.23  redevelopment tax increment district created pursuant to 
104.24  subdivision 1 is deemed to be a redevelopment district and is 
104.25  subject to Minnesota Statutes, sections 469.174 to 469.179, 
104.26  except that expenditures for activities as defined in Minnesota 
104.27  Statutes, section 469.1763, subdivision 1, paragraph (b), 
104.28  anywhere in the district are deemed to be the costs of 
104.29  correcting conditions that allow the designation of 
104.30  redevelopment districts pursuant to Minnesota Statutes, section 
104.31  469.174, subdivision 10. 
104.32     <b>[EFFECTIVE DATE.]</b> This section is effective upon local 
104.33  approval by the city of Richfield in compliance with Minnesota 
104.34  Statutes, section 645.021. 
104.35     Sec. 28.  [CITY OF ROSEVILLE; TAX INCREMENT FINANCING 
104.36  DISTRICT.] 
105.1      Subdivision 1.  [SPECIAL RULES.] (a) At the election of the 
105.2   city, upon adoption of the tax increment financing plan for a 
105.3   district or districts described in this section, the rules 
105.4   provided under this section apply to each such district. 
105.5      For purposes of this section, "district" means a 
105.6   redevelopment or soils condition tax increment financing 
105.7   district established by the city of Roseville or the economic 
105.8   development authority of the city within an area generally 
105.9   described as follows:  from the Northwest corner of Section 4, 
105.10  Township 29, Range 23, Ramsey County, Minnesota, south 1,265 
105.11  feet along the centerline of Cleveland Avenue to the point of 
105.12  beginning, then easterly a distance of approximately 902 feet, 
105.13  then southerly 315 feet, then easterly 416 feet to the west 
105.14  right-of-way line of the 33 foot wide Prior Avenue, then 
105.15  southerly along that line approximately 602 feet to the 
105.16  intersection with a line running southwesterly approximately 790 
105.17  feet to a point along the centerline of County Road C-2 which is 
105.18  approximately 980 feet east of its intersection with the 
105.19  centerline of Cleveland Avenue, then southerly approximately 650 
105.20  feet, then easterly 35 feet, then southerly approximately 300 
105.21  feet, then easterly 240 feet, then southerly 270 feet, then 
105.22  easterly 580 feet, then north and easterly along an irregular 
105.23  line on the eastern boundary of Langton Lake a distance of 835 
105.24  feet, then easterly 2,346 feet along the south edge of platted 
105.25  and Oasis Park property, then southerly a distance of 2,101 feet 
105.26  to the south right-of-way of County Road C, then westerly along 
105.27  the south right-of-way a distance of approximately 4,210 feet to 
105.28  the intersection with the centerline of Cleveland Avenue, then 
105.29  northerly along the Cleveland Avenue centerline a distance of 
105.30  approximately 4,371 feet to the point of beginning.  Also 
105.31  included are the additional connected public rights-of-way and 
105.32  public lands as follows:  the Terrace Drive right-of-way from 
105.33  the eastern boundary of the Business Park boundary, easterly 
105.34  approximately 1,000 feet to the intersection with the western 
105.35  right-of-way of Snelling Avenue; the County Road C right-of-way 
105.36  from the eastern boundary of the Business Park boundary, 
106.1   easterly approximately 1,080 feet to the intersection with the 
106.2   centerline of Snelling Avenue; and the area generally west of 
106.3   Cleveland Avenue between Cleveland Avenue and marked Interstate 
106.4   Highway 35W, from County Road C approximately 3,000 feet north, 
106.5   encompassing entry ramps, wetlands, and regional storm water 
106.6   storage ponds. 
106.7      (b) The five-year rule under Minnesota Statutes, section 
106.8   469.1763, subdivision 3, applies as if the limit is nine years. 
106.9      (c) The limitations on expenditure of increment outside of 
106.10  the district under Minnesota Statutes, section 469.1763, 
106.11  subdivision 2, do not apply, provided that increments may only 
106.12  be expended on improvements or activities within the areas 
106.13  identified in paragraph (a). 
106.14     (d) The requirement relating to the original local tax rate 
106.15  for the district under Minnesota Statutes, section 469.177, 
106.16  subdivision 1a, does not apply. 
106.17     Subd. 2.  [APPLICATION OF OTHER LAWS.] All references in 
106.18  Minnesota Statutes to tax increment financing districts created 
106.19  and tax increments generated under Minnesota Statutes, sections 
106.20  469.174 to 469.1799, apply subject to this section, provided 
106.21  that Minnesota Statutes, sections 469.174 to 469.1799, apply 
106.22  only to the extent specified in this section. 
106.23     Subd. 3.  [EXPIRATION.] (a) The exception under subdivision 
106.24  1, paragraph (c), from the limitations of Minnesota Statutes, 
106.25  section 469.1763, subdivision 2, expires 20 years after the 
106.26  receipt of the first increment from a district for which the 
106.27  city has elected that this section applies. 
106.28     (b) The authority to approve tax increment financing plans 
106.29  to establish a tax increment financing district subject to this 
106.30  section expires on December 31, 2013. 
106.31     <b>[EFFECTIVE DATE.]</b> This section is effective upon approval 
106.32  by the governing bodies of the city of Roseville and Ramsey 
106.33  county and upon compliance by the the city with Minnesota 
106.34  Statutes, section 645.021, subdivision 3. 
106.35     Sec. 29.  [CITY OF ST. MICHAEL; TAX INCREMENT FINANCING 
106.36  DISTRICT.] 
107.1      Subdivision 1.  [ESTABLISHMENT OF DISTRICT.] The city of St.
107.2   Michael may establish a redevelopment tax increment financing 
107.3   district subject to Minnesota Statutes, sections 469.174 to 
107.4   469.179, except as provided in this section.  The district must 
107.5   be established within an area that includes the downtown and 
107.6   town center areas as designated by the city as well as all 
107.7   parcels adjacent to marked trunk highway 241 within the city. 
107.8      Subd. 2.  [SPECIAL RULES.] (a) Notwithstanding the 
107.9   requirements of Minnesota Statutes, section 469.174, subdivision 
107.10  10, the district may be established and operated as a 
107.11  redevelopment district. 
107.12     (b) Notwithstanding the restrictions of Minnesota Statutes, 
107.13  sections 469.176, subdivisions 4 and 4j, and 469.1763, 
107.14  subdivision 2, revenues derived from tax increments from the 
107.15  district created under this section may be used to meet the cost 
107.16  of land acquisition, removal of buildings in the right-of-way 
107.17  acquisition area, and other costs incurred by the city of St. 
107.18  Michael in the expansion and improvement of marked trunk highway 
107.19  241 within the city. 
107.20     (c) Minnesota Statutes, section 469.176, subdivision 5, 
107.21  does not apply to the district. 
107.22     <b>[EFFECTIVE DATE.]</b> This section is effective the day after 
107.23  the governing body of the city of St. Michael complies with 
107.24  Minnesota Statutes, section 645.021, subdivision 3. 
107.25     Sec. 30.  [KANDIYOHI COUNTY AND CITY OF WILLMAR.] 
107.26     Subdivision 1.  [POWERS.] Notwithstanding Minnesota 
107.27  Statutes, sections 469.090 and 469.1082, Kandiyohi county may 
107.28  exercise the powers of a city under Minnesota Statutes, sections 
107.29  469.090 to 469.107.  Kandiyohi county and the city of Willmar 
107.30  may enter into a joint powers agreement under Minnesota 
107.31  Statutes, section 471.59, to jointly or cooperatively exercise 
107.32  any of the powers common to both the county and the city under 
107.33  Minnesota Statutes, sections 469.090 to 469.107, in a manner to 
107.34  be determined by a majority of the Kandiyohi county board and 
107.35  the Willmar city council.  
107.36     Subd. 2.  [SPECIAL TAXING DISTRICT.] A joint powers entity 
108.1   created under this section is a political subdivision of the 
108.2   state and a special taxing district as defined by Minnesota 
108.3   Statutes, section 275.066, clause (24), with the power to adopt 
108.4   and certify a property tax levy to the county auditor.  
108.5      Subd. 3.  [EFFECTIVE DATE; NO LOCAL APPROVAL 
108.6   REQUIRED.] Under Minnesota Statutes, section 645.023, 
108.7   subdivision 1, paragraph (a), no local approval of this section 
108.8   is required. 
108.9      <b>[EFFECTIVE DATE.]</b> This sections is effective the day after 
108.10  final enactment. 
108.11     Sec. 31. ï¿½CITY OF HOPKINS; TAX INCREMENT FINANCING 
108.12  DISTRICT; EXTENSION OF FIVE-YEAR RULE.] 
108.13     The requirements of Minnesota Statutes, section 469.1763, 
108.14  subdivision 3, that activities must be undertaken within a 
108.15  five-year period from the date of certification of tax increment 
108.16  financing district must be considered to be met for the city of 
108.17  Hopkins redevelopment tax increment district 2-11, if the 
108.18  activities are undertaken within ten years from the date of 
108.19  certification of the district. 
108.20     <b>[EFFECTIVE DATE.]</b> This section is effective upon compliance 
108.21  by the governing body of the city of Hopkins with the provisions 
108.22  of Minnesota Statutes, section 645.021. 
108.23     Sec. 32.  [CITIES OF ELGIN, EYOTA, BYRON, AND ORONOCO; TAX 
108.24  INCREMENT FINANCING DISTRICTS.] 
108.25     Subdivision 1.  [AUTHORIZATION.] Notwithstanding the 
108.26  mileage limitation in Minnesota Statutes, section 469.174, 
108.27  subdivision 27, the cities of Elgin, Eyota, Byron, and Oronoco 
108.28  are deemed to be small cities for purposes of Minnesota 
108.29  Statutes, sections 469.174 to 469.1799, as long as they do not 
108.30  exceed the population limit in that section. 
108.31     Subd. 2.  [LOCAL APPROVAL.] This section is available for 
108.32  each of the cities of Elgin, Eyota, Byron, and Oronoco upon 
108.33  approval of that city's governing body and compliance with 
108.34  Minnesota Statutes, section 645.021, subdivisions 2 and 3. 
108.35                             ARTICLE 5
108.36                           PUBLIC FINANCE 
109.1      Section 1.  [37.31] [ISSUANCE OF BONDS.] 
109.2      Subdivision 1.  [BONDING AUTHORITY.] The society may issue 
109.3   negotiable bonds in a principal amount that the society 
109.4   determines necessary to provide sufficient money for achieving 
109.5   its purposes, including the payment of interest on bonds of the 
109.6   society, the establishment of reserves to secure its bonds, the 
109.7   payment of fees to a third party providing credit enhancement, 
109.8   and the payment of all other expenditures of the society 
109.9   incident to and necessary or convenient to carry out its 
109.10  corporate purposes and powers.  Bonds of the society may be 
109.11  issued as bonds or notes or in any other form authorized by 
109.12  law.  The principal amount of bonds issued and outstanding under 
109.13  this section at any time may not exceed $20,000,000, excluding 
109.14  bonds for which refunding bonds or crossover refunding bonds 
109.15  have been issued.  
109.16     Subd. 2.  [REFUNDING OF BONDS.] The society may issue bonds 
109.17  to refund outstanding bonds of the society, to pay any 
109.18  redemption premiums on those bonds, and to pay interest accrued 
109.19  or to accrue to the redemption date next succeeding the date of 
109.20  delivery of the refunding bonds.  The society may apply the 
109.21  proceeds of any refunding bonds to the purchase or payment at 
109.22  maturity of the bonds to be refunded, or to the redemption of 
109.23  outstanding bonds on the redemption date next succeeding the 
109.24  date of delivery of the refunding bonds and may, pending the 
109.25  application, place the proceeds in escrow to be applied to the 
109.26  purchase, retirement, or redemption of the bonds.  Pending use, 
109.27  escrowed proceeds may be invested and reinvested in obligations 
109.28  issued or guaranteed by the state or the United States or by any 
109.29  agency or instrumentality of the state or the United States, or 
109.30  in certificates of deposit or time deposits secured in a manner 
109.31  determined by the society, maturing at a time appropriate to 
109.32  assure the prompt payment of the principal and interest and 
109.33  redemption premiums, if any, on the bonds to be refunded.  The 
109.34  income realized on any investment may also be applied to the 
109.35  payment of the bonds to be refunded.  After the terms of the 
109.36  escrow have been fully satisfied, any balance of the proceeds 
110.1   and any investment income may be returned to the society for use 
110.2   by it in any lawful manner.  All refunding bonds issued under 
110.3   this subdivision must be issued and secured in the manner 
110.4   provided by resolution of the society. 
110.5      Subd. 3.  [KIND OF BONDS.] Bonds issued under this section 
110.6   must be negotiable investment securities within the meaning and 
110.7   for all purposes of the Uniform Commercial Code, subject only to 
110.8   the provisions of the bonds for registration.  The bonds issued 
110.9   must be limited obligations of the society not secured by its 
110.10  full faith and credit and payable solely from specified sources 
110.11  or assets.  
110.12     Subd. 4.  [RESOLUTION AND TERMS OF SALE.] The bonds of the 
110.13  society must be authorized by a resolution or resolutions 
110.14  adopted by the society.  The bonds must bear the date or dates, 
110.15  mature at the time or times, bear interest at a fixed or 
110.16  variable rate, including a rate varying periodically at the time 
110.17  or times and on the terms determined by the society, or any 
110.18  combination of fixed and variable rates, be in the 
110.19  denominations, be in the form, carry the registration 
110.20  privileges, be executed in the manner, be payable in lawful 
110.21  money of the United States, at the place or places within or 
110.22  without the state, and be subject to the terms of redemption or 
110.23  purchase before maturity as the resolutions or certificates 
110.24  provide.  If, for any reason existing at the date of issue of 
110.25  the bonds or existing at the date of making or purchasing any 
110.26  loan or securities from the proceeds or after that date, the 
110.27  interest on the bonds is or becomes subject to federal income 
110.28  taxation, this fact does not affect the validity or the 
110.29  provisions made for the security of the bonds.  The society may 
110.30  make covenants and take or have taken actions that are in its 
110.31  judgment necessary or desirable to comply with conditions 
110.32  established by federal law or regulations for the exemption of 
110.33  interest on its obligations.  The society may refrain from 
110.34  compliance with those conditions if in its judgment this would 
110.35  serve the purposes and policies set forth in this chapter with 
110.36  respect to any particular issue of bonds, unless this would 
111.1   violate covenants made by the society.  The maximum maturity of 
111.2   a bond, whether or not issued for the purpose of refunding, must 
111.3   be 30 years from its date.  The bonds of the society may be sold 
111.4   at public or private sale, at a price or prices determined by 
111.5   the society; provided that: 
111.6      (1) the aggregate price at which an issue of bonds is 
111.7   initially offered by underwriters to investors, as stated in the 
111.8   authority's official statement with respect to the offering, 
111.9   must not exceed by more than three percent the aggregate price 
111.10  paid by the underwriters to the society at the time of delivery; 
111.11     (2) the commission paid by the society to an underwriter 
111.12  for placing an issue of bonds with investors must not exceed 
111.13  three percent of the aggregate price at which the issue is 
111.14  offered to investors as stated in the society's offering 
111.15  statement; and 
111.16     (3) the spread or commission must be an amount determined 
111.17  by the society to be reasonable in light of the risk assumed and 
111.18  the expenses of issuance, if any, required to be paid by the 
111.19  underwriters.  
111.20     Subd. 5.  [EXEMPTION.] The notes and bonds of the society 
111.21  are not subject to sections 16C.03, subdivision 4, and 16C.05. 
111.22     Subd. 6.  [RESERVES; FUNDS; ACCOUNTS.] The society may 
111.23  establish reserves, funds, or accounts necessary to carry out 
111.24  the purposes of the society or to comply with any agreement made 
111.25  by or any resolution passed by the society. 
111.26     Sec. 2.  [37.32] [TENDER OPTION.] 
111.27     An obligation may be issued giving its owner the right to 
111.28  tender or the society to demand tender of the obligation to the 
111.29  society or another person designated by it, for purchase at a 
111.30  specified time or times, if the society has first entered into 
111.31  an agreement with a suitable financial institution obligating 
111.32  the financial institution to provide funds on a timely basis for 
111.33  purchase of bonds tendered.  The obligation is not considered to 
111.34  mature on any tender date and the purchase of a tendered 
111.35  obligation is not considered a payment or discharge of the 
111.36  obligation by the society.  Obligations tendered for purchase 
112.1   may be remarketed by or on behalf of the society or another 
112.2   purchaser.  The society may enter into agreements it considers 
112.3   appropriate to provide for the purchase and remarketing of 
112.4   tendered obligations, including: 
112.5      (1) provisions under which undelivered obligations may be 
112.6   considered tendered for purchase and new obligations may be 
112.7   substituted for them; 
112.8      (2) provisions for the payment of charges of tender agents, 
112.9   remarketing agents, and financial institutions extending lines 
112.10  of credit or letters of credit assuring repurchase; and 
112.11     (3) provisions for reimbursement of advances under letters 
112.12  of credit that may be paid from the proceeds of the obligations 
112.13  or from tax and other revenues appropriated for the payment and 
112.14  security of the obligations and similar or related provisions. 
112.15     Sec. 3.  [37.33] [BOND FUND.] 
112.16     Subdivision 1.  [CREATION AND CONTENTS.] The society may 
112.17  establish a special fund or funds for the security of one or 
112.18  more or all series of its bonds.  The funds must be known as 
112.19  debt service reserve funds.  The society may pay into each debt 
112.20  service reserve fund: 
112.21     (1) the proceeds of sale of bonds to the extent provided in 
112.22  the resolution or indenture authorizing the issuance of them; 
112.23     (2) money directed to be transferred by the society to the 
112.24  debt service reserve fund; and 
112.25     (3) other money made available to the society from any 
112.26  other source only for the purpose of the fund. 
112.27     Subd. 2.  [USE OF FUNDS.] Except as provided in this 
112.28  section, the money credited to each debt service reserve fund 
112.29  must be used only for the payment of the principal of bonds of 
112.30  the society as they mature, the purchase of the bonds, the 
112.31  payment of interest on them, or the payment of any premium 
112.32  required when the bonds are redeemed before maturity.  Money in 
112.33  a debt service reserve fund must not be withdrawn at a time and 
112.34  in an amount that reduces the amount of the fund to less than 
112.35  the amount the society determines to be reasonably necessary for 
112.36  the purposes of the fund.  However, money may be withdrawn to 
113.1   pay principal or interest due on bonds secured by the fund if 
113.2   other money of the society is not available. 
113.3      Subd. 3.  [INVESTMENT.] Money in a debt service reserve 
113.4   fund not required for immediate use may be invested in 
113.5   accordance with section 37.07. 
113.6      Subd. 4.  [MINIMUM AMOUNT OF RESERVE AT ISSUANCE.] If the 
113.7   society establishes a debt service reserve fund for the security 
113.8   of any series of bonds, it shall not issue additional bonds that 
113.9   are similarly secured if the amount of any of the debt service 
113.10  reserve funds at the time of issuance does not equal or exceed 
113.11  the minimum amount required by the resolution creating the fund, 
113.12  unless the society deposits in each fund at the time of 
113.13  issuance, from the proceeds of the bonds, or otherwise, an 
113.14  amount that when added together with the amount then in the fund 
113.15  will be at least the minimum amount required. 
113.16     Subd. 5.  [TRANSFER OF EXCESS.] To the extent consistent 
113.17  with the resolutions and indentures securing outstanding bonds, 
113.18  the society may at the close of a fiscal year transfer to any 
113.19  other fund or account from any debt service reserve fund any 
113.20  excess in that reserve fund over the amount determined by the 
113.21  society to be reasonably necessary for the purpose of the 
113.22  reserve fund. 
113.23     Sec. 4.  [37.34] [MONEY OF THE SOCIETY.] 
113.24     The society may contract with the holders of any of its 
113.25  bonds as to the custody, collection, securing, investment, and 
113.26  payment of money of the society or money held in trust or 
113.27  otherwise for the payment of bonds, and to carry out the 
113.28  contract.  Money held in trust or otherwise for the payment of 
113.29  bonds or in any way to secure bonds and deposits of the money 
113.30  may be secured in the same manner as money of the society, and 
113.31  all banks and trust companies are authorized to give security 
113.32  for the deposits.  
113.33     Sec. 5.  [37.35] [NONLIABILITY.] 
113.34     Subdivision 1.  [NONLIABILITY OF INDIVIDUALS.] No member of 
113.35  the society or other person executing the bonds is liable 
113.36  personally on the bonds or is subject to any personal liability 
114.1   or accountability by reason of their issuance.  
114.2      Subd. 2.  [NONLIABILITY OF STATE.] The state is not liable 
114.3   on bonds of the society issued under section 37.31 and those 
114.4   bonds are not a debt of the state.  The bonds must contain on 
114.5   their face a statement to that effect. 
114.6      Sec. 6.  [37.36] [PURCHASE AND CANCELLATION BY SOCIETY.] 
114.7      Subject to agreements with bondholders that may then exist, 
114.8   the society may purchase out of money available for the purpose, 
114.9   bonds of the society which shall then be canceled, at a price 
114.10  not exceeding the following amounts: 
114.11     (1) if the bonds are then redeemable, the redemption price 
114.12  then applicable plus accrued interest to the next interest 
114.13  payment date of the bonds; or 
114.14     (2) if the bonds are not redeemable, the redemption price 
114.15  applicable on the first date after the purchase upon which the 
114.16  bonds become subject to redemption plus accrued interest to that 
114.17  date. 
114.18     Sec. 7.  [37.37] [STATE PLEDGE AGAINST IMPAIRMENT OF 
114.19  CONTRACTS.] 
114.20     The state pledges and agrees with the holders of bonds 
114.21  issued under section 37.31 that the state will not limit or 
114.22  alter the rights vested in the society to fulfill the terms of 
114.23  any agreements made with the bondholders or in any way impair 
114.24  the rights and remedies of the holders until the bonds, together 
114.25  with interest on them, with interest on any unpaid installments 
114.26  of interest, and all costs and expenses in connection with any 
114.27  action or proceeding by or on behalf of the bondholders, are 
114.28  fully met and discharged.  The society may include this pledge 
114.29  and agreement of the state in any agreement with the holders of 
114.30  bonds issued under section 37.31. 
114.31     Sec. 8.  Minnesota Statutes 2002, section 373.01, 
114.32  subdivision 3, is amended to read: 
114.33     Subd. 3.  [CAPITAL NOTES.] A county board may, by 
114.34  resolution and without referendum, issue capital notes subject 
114.35  to the county debt limit to purchase capital equipment useful 
114.36  for county purposes that has an expected useful life at least 
115.1   equal to the term of the notes.  The notes shall be payable in 
115.2   not more than five years and shall be issued on terms and in a 
115.3   manner the board determines.  A tax levy shall be made for 
115.4   payment of the principal and interest on the notes, in 
115.5   accordance with section 475.61, as in the case of bonds.  For 
115.6   purposes of this subdivision, "capital equipment" means public 
115.7   safety, ambulance, road construction or maintenance, and medical 
115.8   , and data processing equipment, and computer hardware and 
115.9   original operating system software. 
115.10     Sec. 9.  Minnesota Statutes 2002, section 373.45, 
115.11  subdivision 1, is amended to read: 
115.12     Subdivision 1.  [DEFINITIONS.] (a) As used in this section, 
115.13  the following terms have the meanings given. 
115.14     (b) "Authority" means the Minnesota public facilities 
115.15  authority. 
115.16     (c) "Commissioner" means the commissioner of finance. 
115.17     (d) "Debt obligation" means a general obligation bond 
115.18  issued by a county, or a bond payable from a county lease 
115.19  obligation under section 641.24, to provide funds for the 
115.20  construction of: 
115.21     (1) jails; 
115.22     (2) correctional facilities; 
115.23     (3) law enforcement facilities; 
115.24     (4) social services and human services facilities; or 
115.25     (5) solid waste facilities. 
115.26     Sec. 10.  Minnesota Statutes 2002, section 373.47, 
115.27  subdivision 1, is amended to read: 
115.28     Subdivision 1.  [AUTHORITY TO INCUR DEBT.] (a) Subject to 
115.29  prior approval by the public safety radio system planning 
115.30  committee under section 473.907, the governing body of a county 
115.31  may finance the cost of designing, constructing, and acquiring 
115.32  public safety communication system infrastructure and equipment 
115.33  for use on the statewide, shared public safety radio system by 
115.34  issuing: 
115.35     (1) capital improvement bonds under section 373.40, as if 
115.36  the infrastructure and equipment qualified as a "capital 
116.1   improvement" within the meaning of section 373.40, subdivision 
116.2   1, paragraph (b); and 
116.3      (2) capital notes under the provisions of section 373.01, 
116.4   subdivision 3, as if the equipment qualified as "capital 
116.5   equipment" within the meaning of section 373.01, subdivision 3. 
116.6      (b) For purposes of this section, "county" means the 
116.7   following counties:  Anoka, Benton, Carver, Chisago, Dakota, 
116.8   Dodge, Fillmore, Freeborn, Goodhue, Hennepin, Houston, Isanti, 
116.9   Mower, Olmsted, Ramsey, Rice, Scott, Sherburne, Steele, Wabasha, 
116.10  Washington, Wright, and Winona. 
116.11     (c) The authority to incur debt under this section is not 
116.12  effective until July 1, 2003, for the following counties:  
116.13  Benton, Dodge, Fillmore, Freeborn, Goodhue, Houston, Mower, 
116.14  Olmsted, Rice, Sherburne, Steele, Wabasha, Wright, and Winona. 
116.15     Sec. 11.  Minnesota Statutes 2002, section 376.009, is 
116.16  amended to read: 
116.17     376.009 [COUNTY HOSPITAL DEFINED; MAY HAVE MANY BUILDINGS, 
116.18  SITES.] 
116.19     For the purposes of sections 376.01 to 376.06, "county 
116.20  hospital" means any hospital owned or operated by a county which 
116.21  may consist of any number of buildings at one location or any 
116.22  number of buildings at different locations within the 
116.23  county.  The county board of any county that has not established 
116.24  a county hospital may by resolution authorize a statutory or 
116.25  home rule charter city in the county and its city council to 
116.26  exercise the powers of a county and the county board under 
116.27  sections 376.01 to 376.07, in which case references in sections 
116.28  376.01 to 376.07 to "county" and "county board" refer to the 
116.29  city so designated and its governing body, respectively. 
116.30     Sec. 12.  Minnesota Statutes 2002, section 376.55, 
116.31  subdivision 3, is amended to read: 
116.32     Subd. 3.  [FINANCING.] The county board may transfer 
116.33  surplus funds from any fund except the road and bridge, sinking 
116.34  or drainage ditch funds for the purpose of 
116.35  establishing, acquiring, maintaining, enlarging, or adding to a 
116.36  county nursing home.  When surplus funds are not available for 
117.1   transfer, a county board may issue bonds to pay the cost of 
117.2   establishing, acquiring, equipping, furnishing, enlarging, or 
117.3   adding to a county nursing home, subject to section 376.56. 
117.4      Sec. 13.  Minnesota Statutes 2002, section 376.55, is 
117.5   amended by adding a subdivision to read: 
117.6      Subd. 7.  [CITY POWERS.] The county board of any county 
117.7   that has not established a nursing home may by resolution 
117.8   authorize a statutory or home rule charter city within the 
117.9   county to exercise the powers of a county under sections 376.55 
117.10  to 376.60.  A city so designated may exercise within its 
117.11  boundaries all the powers of a county under sections 376.55 to 
117.12  376.60. 
117.13     Sec. 14.  Minnesota Statutes 2002, section 376.56, 
117.14  subdivision 3, is amended to read: 
117.15     Subd. 3.  [CHAPTER 475 BONDS.] Bonds issued under section 
117.16  376.55, subdivision 3, may be general obligations of the county 
117.17  and may be issued and sold, and taxes levied for their payment 
117.18  as provided under chapter 475.  No election shall be required to 
117.19  authorize the bond issue for acquiring, improving, remodeling, 
117.20  or replacing an existing nursing home without increasing the 
117.21  total number of accommodations for residents in all nursing 
117.22  homes in the county.  The revenues of the nursing home shall 
117.23  also be pledged for the payment of the bonds and for any 
117.24  interest and premium.  Part of the proceeds may be deposited in 
117.25  the debt service fund for the issue, to capitalize interest and 
117.26  create a reserve to reduce or eliminate the tax otherwise 
117.27  required by section 475.61 to be levied before issuing the 
117.28  bonds.  The remaining proceeds from the sale of the bonds and 
117.29  any surplus funds transferred under section 376.55, subdivision 
117.30  3 must be credited to and deposited in the county nursing home 
117.31  building fund of the county in which the nursing home is located.
117.32     Sec. 15.  Minnesota Statutes 2002, section 383B.77, 
117.33  subdivision 1, is amended to read: 
117.34     Subdivision 1.  [CREATION.] The Hennepin county housing and 
117.35  redevelopment authority is created in the county of Hennepin.  
117.36  It shall have all of the powers and duties of a housing and 
118.1   redevelopment authority under sections 469.001 to 469.047.  For 
118.2   the purposes of applying the municipal housing and redevelopment 
118.3   act to Hennepin county, the county has all of the powers and 
118.4   duties of a city, the county board has all the powers and duties 
118.5   of a governing body, the chair of the county board has all of 
118.6   the powers and duties of a mayor, and, notwithstanding section 
118.7   469.008, the area of operation includes the area within the 
118.8   territorial boundaries of the county. 
118.9      Sec. 16.  Minnesota Statutes 2002, section 383B.77, 
118.10  subdivision 2, is amended to read: 
118.11     Subd. 2.  [LIMITATION.] This section does not limit or 
118.12  restrict any existing housing and redevelopment authority or 
118.13  prevent a municipality from creating an authority.  For purposes 
118.14  of this subdivision, "housing and redevelopment authority" 
118.15  includes any municipal department, agency, or authority of the 
118.16  city of Minneapolis which exercises the powers of a housing and 
118.17  redevelopment authority pursuant to section 469.003 or other 
118.18  law.  The county authority shall notify a municipal authority by 
118.19  January 31 of each year as to the activities the county 
118.20  authority plans to participate in within the municipality.  The 
118.21  municipal authority shall notify the county authority within 45 
118.22  days of the date of the notice from the county authority, if the 
118.23  municipal authority does not consent to the activities of the 
118.24  county authority.  The county authority shall not exercise its 
118.25  powers in a municipality where a housing and redevelopment 
118.26  authority was created under Minnesota Statutes 1969, chapter 
118.27  462, before June 8, 1971, except as provided in this 
118.28  subdivision.  If a city housing and redevelopment authority 
118.29  requests the county housing and redevelopment authority to 
118.30  exercise any power or perform any function of the municipal 
118.31  authority, the county authority may do so. 
118.32     Sec. 17.  Minnesota Statutes 2002, section 410.32, is 
118.33  amended to read: 
118.34     410.32 [CITIES MAY ISSUE CAPITAL NOTES TO BUY CAPITAL 
118.35  EQUIPMENT.] 
118.36     Notwithstanding any contrary provision of other law or 
119.1   charter, a home rule charter city may, by resolution and without 
119.2   public referendum, issue capital notes subject to the city debt 
119.3   limit to purchase public safety equipment, ambulance and other 
119.4   medical equipment, road construction and maintenance equipment, 
119.5   and other capital equipment having and computer hardware and 
119.6   original operating system software, provided the equipment or 
119.7   software has an expected useful life at least as long as the 
119.8   term of the notes.  The notes shall be payable in not more than 
119.9   five years and be issued on terms and in the manner the city 
119.10  determines.  The total principal amount of the capital notes 
119.11  issued in a fiscal year shall not exceed 0.03 percent of the 
119.12  market value of taxable property in the city for that year.  A 
119.13  tax levy shall be made for the payment of the principal and 
119.14  interest on the notes, in accordance with section 475.61, as in 
119.15  the case of bonds.  Notes issued under this section shall 
119.16  require an affirmative vote of two-thirds of the governing body 
119.17  of the city.  Notwithstanding a contrary provision of other law 
119.18  or charter, a home rule charter city may also issue capital 
119.19  notes subject to its debt limit in the manner and subject to the 
119.20  limitations applicable to statutory cities pursuant to section 
119.21  412.301. 
119.22     Sec. 18.  [410.326] [CAPITAL IMPROVEMENT BONDS.] 
119.23     Subdivision 1.  [DEFINITIONS.] For purposes of this 
119.24  section, the following terms have the meanings given. 
119.25     (a) "Bonds" mean an obligation defined under section 475.51.
119.26     (b) "Capital improvement" means acquisition or betterment 
119.27  of public lands, development rights in the form of conservation 
119.28  easements under chapter 84C, buildings or other improvements for 
119.29  the purpose of a city hall, administrative building, public 
119.30  safety, public works facility, parks, library, and roads and 
119.31  bridges.  An improvement must have an expected useful life of 
119.32  five years or more to qualify.  Capital improvement does not 
119.33  include light rail transit or any activity related to it or to a 
119.34  recreational or sports facility building, including, but not 
119.35  limited to, a gymnasium, ice arena, racquet sports facility, 
119.36  swimming pool, exercise room, or health spa, unless the building 
120.1   is part of an outdoor park and is incidental to the primary 
120.2   purpose of outdoor recreation. 
120.3      (c) "City" means a home rule charter or statutory city. 
120.4      Subd. 2.  [ELECTION REQUIREMENT.] (a) Bonds issued by a 
120.5   city to finance capital improvements under an approved capital 
120.6   improvements plan are not subject to the election requirements 
120.7   of section 475.58.  The bonds are subject to the net debt limits 
120.8   under section 475.53.  The bonds must be approved by an 
120.9   affirmative vote of three-fifths of the members of a five-member 
120.10  city council.  In the case of a city council having more than 
120.11  five members, the bonds must be approved by a vote of at least 
120.12  two-thirds of the city council. 
120.13     (b) Before the issuance of bonds qualifying under this 
120.14  section, the city must publish a notice of its intention to 
120.15  issue the bonds and the date and time of the hearing to obtain 
120.16  public comment on the matter.  The notice must be published in 
120.17  the official newspaper of the city or in a newspaper of general 
120.18  circulation in the city.  Additionally, the notice may be posted 
120.19  on the official Web site, if any, of the city.  The notice must 
120.20  be published at least 14 but not more than 28 days before the 
120.21  date of the hearing. 
120.22     (c) A city may issue the bonds only after obtaining the 
120.23  approval of a majority of the voters voting on the question of 
120.24  issuing the obligations, if a petition requesting a vote on the 
120.25  issuance is signed by voters equal to five percent of the votes 
120.26  cast in the city in the last general election and is filed with 
120.27  the city clerk within 30 days after the public hearing.  The 
120.28  commissioner of revenue shall prepare a suggested form of the 
120.29  question to be presented at the election. 
120.30     Subd. 3.  [CAPITAL IMPROVEMENT PLAN.] (a) A city may adopt 
120.31  a capital improvement plan.  The plan must cover at least a 
120.32  five-year period beginning with the date of its adoption.  The 
120.33  plan must set forth the estimated schedule, timing, and details 
120.34  of specific capital improvements by year, together with the 
120.35  estimated cost, the need for the improvement, and sources of 
120.36  revenue to pay for the improvement.  In preparing the capital 
121.1   improvement plan, the city council must consider for each 
121.2   project and for the overall plan: 
121.3      (1) the condition of the city's existing infrastructure, 
121.4   including the projected need for repair or replacement; 
121.5      (2) the likely demand for the improvement; 
121.6      (3) the estimated cost of the improvement; 
121.7      (4) the available public resources; 
121.8      (5) the level of overlapping debt in the city; 
121.9      (6) the relative benefits and costs of alternative uses of 
121.10  the funds; 
121.11     (7) operating costs of the proposed improvements; and 
121.12     (8) alternatives for providing services most efficiently 
121.13  through shared facilities with other cities or local government 
121.14  units. 
121.15     (b) The capital improvement plan and annual amendments to 
121.16  it must be approved by the city council after public hearing. 
121.17     Subd. 4.  [LIMITATIONS ON AMOUNT.] A city may not issue 
121.18  bonds under this section if the maximum amount of principal and 
121.19  interest to become due in any year on all the outstanding bonds 
121.20  issued under this section, including the bonds to be issued, 
121.21  will equal or exceed 0.05367 percent of taxable market value of 
121.22  property in the county.  Calculation of the limit must be made 
121.23  using the taxable market value for the taxes payable year in 
121.24  which the obligations are issued and sold.  This section does 
121.25  not limit the authority to issue bonds under any other special 
121.26  or general law. 
121.27     Subd. 5.  [APPLICATION OF CHAPTER 475.] Bonds to finance 
121.28  capital improvements qualifying under this section must be 
121.29  issued under the issuance authority in chapter 475 and the 
121.30  provisions of chapter 475 apply, except as otherwise 
121.31  specifically provided in this section. 
121.32     Sec. 19.  Minnesota Statutes 2002, section 412.301, is 
121.33  amended to read: 
121.34     412.301 [FINANCING PURCHASE OF CERTAIN EQUIPMENT.] 
121.35     The council may issue certificates of indebtedness or 
121.36  capital notes subject to the city debt limits to purchase public 
122.1   safety equipment, ambulance equipment, road construction or 
122.2   maintenance equipment, and other capital equipment having and 
122.3   computer hardware and original operating system software, 
122.4   provided the equipment or software has an expected useful life 
122.5   at least as long as the terms of the certificates or notes.  
122.6   Such certificates or notes shall be payable in not more than 
122.7   five years and except that certificates or notes issued after 
122.8   June 30, 2003, and before July 1, 2008, shall be payable in not 
122.9   more than ten years.  The certificates or notes shall be issued 
122.10  on such terms and in such manner as the council may determine.  
122.11  If the amount of the certificates or notes to be issued to 
122.12  finance any such purchase exceeds 0.25 percent of the market 
122.13  value of taxable property in the city, they shall not be issued 
122.14  for at least ten days after publication in the official 
122.15  newspaper of a council resolution determining to issue them; and 
122.16  if before the end of that time, a petition asking for an 
122.17  election on the proposition signed by voters equal to ten 
122.18  percent of the number of voters at the last regular municipal 
122.19  election is filed with the clerk, such certificates or notes 
122.20  shall not be issued until the proposition of their issuance has 
122.21  been approved by a majority of the votes cast on the question at 
122.22  a regular or special election.  A tax levy shall be made for the 
122.23  payment of the principal and interest on such certificates or 
122.24  notes, in accordance with section 475.61, as in the case of 
122.25  bonds.  
122.26     Sec. 20.  Minnesota Statutes 2002, section 469.175, 
122.27  subdivision 3, is amended to read: 
122.28     Subd. 3.  [MUNICIPALITY APPROVAL.] A county auditor shall 
122.29  not certify the original net tax capacity of a tax increment 
122.30  financing district until the tax increment financing plan 
122.31  proposed for that district has been approved by the municipality 
122.32  in which the district is located.  If an authority that proposes 
122.33  to establish a tax increment financing district and the 
122.34  municipality are not the same, the authority shall apply to the 
122.35  municipality in which the district is proposed to be located and 
122.36  shall obtain the approval of its tax increment financing plan by 
123.1   the municipality before the authority may use tax increment 
123.2   financing.  The municipality shall approve the tax increment 
123.3   financing plan only after a public hearing thereon after 
123.4   published notice in a newspaper of general circulation in the 
123.5   municipality at least once not less than ten days nor more than 
123.6   30 days prior to the date of the hearing.  The published notice 
123.7   must include a map of the area of the district from which 
123.8   increments may be collected and, if the project area includes 
123.9   additional area, a map of the project area in which the 
123.10  increments may be expended.  The hearing may be held before or 
123.11  after the approval or creation of the project or it may be held 
123.12  in conjunction with a hearing to approve the project.  Before or 
123.13  at the time of approval of the tax increment financing plan, the 
123.14  municipality shall make the following findings, and shall set 
123.15  forth in writing the reasons and supporting facts for each 
123.16  determination: 
123.17     (1) that the proposed tax increment financing district is a 
123.18  redevelopment district, a renewal or renovation district, a 
123.19  housing district, a soils condition district, or an economic 
123.20  development district; if the proposed district is a 
123.21  redevelopment district or a renewal or renovation district, the 
123.22  reasons and supporting facts for the determination that the 
123.23  district meets the criteria of section 469.174, subdivision 10, 
123.24  paragraph (a), clauses (1) and (2), or subdivision 10a, must be 
123.25  documented in writing and retained and made available to the 
123.26  public by the authority until the district has been terminated; 
123.27     (2) that the proposed development or redevelopment, in the 
123.28  opinion of the municipality, would not reasonably be expected to 
123.29  occur solely through private investment within the reasonably 
123.30  foreseeable future and that the increased market value of the 
123.31  site that could reasonably be expected to occur without the use 
123.32  of tax increment financing would be less than the increase in 
123.33  the market value estimated to result from the proposed 
123.34  development after subtracting the present value of the projected 
123.35  tax increments for the maximum duration of the district 
123.36  permitted by the plan.  The requirements of this clause do not 
124.1   apply if the district is a qualified housing district, as 
124.2   defined in section 273.1399, subdivision 1; 
124.3      (3) that the tax increment financing plan conforms to the 
124.4   general plan for the development or redevelopment of the 
124.5   municipality as a whole; 
124.6      (4) that the tax increment financing plan will afford 
124.7   maximum opportunity, consistent with the sound needs of the 
124.8   municipality as a whole, for the development or redevelopment of 
124.9   the project by private enterprise; 
124.10     (5) that the municipality elects the method of tax 
124.11  increment computation set forth in section 469.177, subdivision 
124.12  3, clause (b), if applicable. 
124.13     When the municipality and the authority are not the same, 
124.14  the municipality shall approve or disapprove the tax increment 
124.15  financing plan within 60 days of submission by the authority.  
124.16  When the municipality and the authority are not the same, the 
124.17  municipality may not amend or modify a tax increment financing 
124.18  plan except as proposed by the authority pursuant to subdivision 
124.19  4.  Once approved, the determination of the authority to 
124.20  undertake the project through the use of tax increment financing 
124.21  and the resolution of the governing body shall, except as 
124.22  provided in subdivision 9, be conclusive of the findings therein 
124.23  and of the public need for the financing. 
124.24     Sec. 21.  Minnesota Statutes 2002, section 469.175, is 
124.25  amended by adding a subdivision to read: 
124.26     Subd. 9.  [LIMITS ON ACTIONS.] (a) A taxpayer in the county 
124.27  where the district is located or another person in interest may 
124.28  contest an action as provided in this subdivision.  The 
124.29  procedure set out in this subdivision is the exclusive means to 
124.30  contest: 
124.31     (1) the formation and approval or the legality of a 
124.32  district, or a tax financing plan or its modification; 
124.33     (2) the inclusion of a parcel in a district; or 
124.34     (3) the legality of the collection or retention of a tax 
124.35  increment from the district, or the legality of the bonds issued 
124.36  under a tax increment financing plan based on a defect in the 
125.1   formation of the district or the adoption or approval of the 
125.2   plan or its modification. 
125.3   This restriction applies to proceedings under section 469.1771.  
125.4      (b) The contestant must object in writing to the authority 
125.5   within 90 days after the adoption of a resolution approving a 
125.6   tax increment financing plan under subdivision 3 or modification 
125.7   of the plan under subdivision 4. 
125.8      (c) After the 90-day period has expired, no government unit 
125.9   or state agency may contest the matters described in paragraph 
125.10  (a). 
125.11     (d) The state auditor retains all rights and powers granted 
125.12  to the state auditor under section 469.1771, except to the 
125.13  extent otherwise provided in this subdivision. 
125.14     (e) If the state auditor files a notice of noncompliance 
125.15  with the county attorney regarding a matter limited by this 
125.16  subdivision, and the notice is filed after 30 days from the 
125.17  adoption of the approving resolution, then in any action begun 
125.18  later by the county attorney under section 469.1771, subdivision 
125.19  1, paragraph (b), the remedy in district court is limited to the 
125.20  remedies that would apply under section 469.1771, subdivision 
125.21  2b, paragraphs (c) and (d), for petitions filed by the attorney 
125.22  general in tax court under section 469.1771, subdivision 2b, 
125.23  paragraph (a). 
125.24     Sec. 22.  Minnesota Statutes 2002, section 473.39, is 
125.25  amended by adding a subdivision to read: 
125.26     Subd. 1j.  [OBLIGATIONS.] After July 1, 2003, in addition 
125.27  to the authority in subdivisions 1a, 1b, 1c, 1d, 1e, 1g, 1h, and 
125.28  1i, the council may issue certificates of indebtedness, bonds, 
125.29  or other obligations under this section in an amount not 
125.30  exceeding $45,000,000 for capital expenditures as prescribed in 
125.31  the council's regional transit master plan and transit capital 
125.32  improvement program and for related costs, including the costs 
125.33  of issuance and sale of the obligations.  
125.34     [APPLICATION.] This section applies to the counties of 
125.35  Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington. 
125.36     Sec. 23.  Minnesota Statutes 2002, section 475.58, 
126.1   subdivision 3b, is amended to read: 
126.2      Subd. 3b.  [STREET RECONSTRUCTION.] (a) A municipality may, 
126.3   without regard to the election requirement under subdivision 1, 
126.4   issue and sell obligations for street reconstruction, if the 
126.5   following conditions are met: 
126.6      (1) the streets are reconstructed under a street 
126.7   reconstruction plan that describes the streets to be 
126.8   reconstructed, the estimated costs, and any planned 
126.9   reconstruction of other streets in the municipality over the 
126.10  next five years, and the plan and issuance of the obligations 
126.11  has been approved by a vote of all of the members of the 
126.12  governing body following a public hearing for which notice has 
126.13  been published in the official newspaper at least ten days but 
126.14  not more than 28 days prior to the hearing; and 
126.15     (2) if a petition requesting a vote on the issuance is 
126.16  signed by voters equal to five percent of the votes cast in the 
126.17  last municipal general election and is filed with the municipal 
126.18  clerk within 30 days of the public hearing, the municipality may 
126.19  issue the bonds only after obtaining the approval of a majority 
126.20  of the voters voting on the question of the issuance of the 
126.21  obligations. 
126.22     (b) Obligations issued under this subdivision are subject 
126.23  to the debt limit of the municipality and are not excluded from 
126.24  net debt under section 475.51, subdivision 4. 
126.25  For purposes of this subdivision, street reconstruction includes 
126.26  utility replacement and relocation and other activities 
126.27  incidental to the street reconstruction, but does not include 
126.28  the portion of project cost allocable to widening a street or 
126.29  adding curbs and gutters where none previously existed. 
126.30     Sec. 24.  [BONDS ISSUANCE VALIDATED.] 
126.31     The provisions of Minnesota Statutes, sections 373.47, 
126.32  subdivision 1, and 473.907, subdivision 3, requiring prior 
126.33  review and approval by the public radio safety committee do not 
126.34  apply to the general obligation bonds issued by Anoka county in 
126.35  a principal amount of $10,500,000 on November 20, 2002. 
126.36     <b>[EFFECTIVE DATE.]</b> This section is effective upon compliance 
127.1   by the governing body of Anoka county with the provisions of 
127.2   Minnesota Statutes, section 645.021. 
127.3      Sec. 25.  [BUFFALO; CITY BONDS FOR HIGHWAY 55.] 
127.4      The city of Buffalo may issue up to $1,300,000 of its 
127.5   general obligation bonds to pay for the city's share of costs of 
127.6   reconstruction and upgrading of that part of Minnesota trunk 
127.7   highway marked 55 that lies within the city of Buffalo. 
127.8      The bonds must be issued and sold in accordance with 
127.9   Minnesota Statutes, chapter 475, except that the debt need not 
127.10  be included within any limit on net debt imposed by Minnesota 
127.11  Statutes, chapter 475, and no election is required to authorize 
127.12  the bond issue. 
127.13     Notwithstanding any other law, including any law enacted 
127.14  during the 2003 legislative session whether enacted before or 
127.15  after the enactment of this act, the debt or debt service on 
127.16  bonds issued under this section is excluded from any levy or 
127.17  other taxing limits and is not spending or revenue for purposes 
127.18  of calculating local government aids or local government aids 
127.19  reductions. 
127.20     <b>[EFFECTIVE DATE.]</b> This section is effective the day after 
127.21  the governing body of Buffalo and its chief clerical officer 
127.22  timely complete their compliance with Minnesota Statutes, 
127.23  section 645.021, subdivisions 2 and 3. 
127.24     Sec. 26.  [CORPORATE STATUS FOR CERTAIN FEDERAL TAX LAW.] 
127.25     For purposes of section 1.103-1 of the federal income tax 
127.26  regulations, Lewis and Clark Rural Water System, Inc. is hereby 
127.27  recognized as a corporation authorized to act on behalf of its 
127.28  members, including its Minnesota member governmental units, to 
127.29  provide drinking water to their communities and to issue debt 
127.30  obligations in its own name on behalf of some or all of its 
127.31  members, provided that Minnesota member governmental units are 
127.32  not liable for the payment of principal of or interest on such 
127.33  obligations. 
127.34     Sec. 27.  [NURSING HOME BONDS AUTHORIZED.] 
127.35     Itasca county may issue bonds under Minnesota Statutes, 
127.36  sections 376.55 and 376.56, to finance the construction of a 
128.1   35-bed nursing home facility to replace an existing 35-bed 
128.2   private facility located in the county.  For the purposes of 
128.3   Minnesota Statutes, section 376.56, subdivision 3, the 
128.4   construction constitutes replacement of an existing nursing home 
128.5   without increasing the number of accommodations for residents. 
128.6      <b>[EFFECTIVE DATE.]</b> This section is effective the day after 
128.7   the governing body of Itasca county and its chief clerical 
128.8   officer timely complete their compliance with Minnesota 
128.9   Statutes, section 645.021, subdivisions 2 and 3. 
128.10     Sec. 28.  [VALIDATION OF APPROVAL.] 
128.11     Notwithstanding Minnesota Statutes, section 645.021, 
128.12  subdivision 3, Laws 1980, chapter 569, sections 2 through 8, 
128.13  approved by the board of directors of local government 
128.14  information systems by resolution adopted on July 30, 1980, are 
128.15  effective as of July 1, 1980, and apply to obligations issued by 
128.16  local government information systems after April 1, 2003. 
128.17     Sec. 29.  [EFFECTIVE DATES.] 
128.18     This article is effective the day following final enactment.
128.19  Sections 20 and 21 apply to all districts, regardless of when 
128.20  created, and are effective the day following final enactment and 
128.21  for all actions commenced after November 13, 2001. 
128.22                             ARTICLE 6 
128.23            DEPARTMENT INCOME, CORPORATE FRANCHISE, AND 
128.24                       ESTATE TAX INITIATIVES 
128.25     Section 1.  Minnesota Statutes 2002, section 289A.10, 
128.26  subdivision 1, is amended to read: 
128.27     Subdivision 1.  [RETURN REQUIRED.] In the case of a 
128.28  decedent who has an interest in property with a situs in 
128.29  Minnesota, the personal representative must submit a Minnesota 
128.30  estate tax return to the commissioner, on a form prescribed by 
128.31  the commissioner, if: 
128.32     (1) a federal estate tax return is required to be filed; or 
128.33     (2) the federal gross estate exceeds $700,000 for estates 
128.34  of decedents dying after December 31, 2001, and before January 
128.35  1, 2004; $850,000 for estates of decedents dying after December 
128.36  31, 2003, and before January 1, 2005; $950,000 for estates of 
129.1   decedents dying after December 31, 2004, and before January 1, 
129.2   2006; and $1,000,000 for estates of decedents dying after 
129.3   December 31, 2005. 
129.4      The return must contain a computation of the Minnesota 
129.5   estate tax due.  The return must be signed by the personal 
129.6   representative. 
129.7      <b>[EFFECTIVE DATE.]</b> This section is effective for estates of 
129.8   decedents dying after December 31, 2002. 
129.9      Sec. 2.  Minnesota Statutes 2002, section 289A.19, 
129.10  subdivision 4, is amended to read: 
129.11     Subd. 4.  [ESTATE TAX RETURNS.] When in the commissioner's 
129.12  judgment good cause exists, the commissioner may extend the time 
129.13  for filing an estate tax return for not more than six months.  
129.14  When an extension to file the federal estate tax return has been 
129.15  granted under section 6081 of the Internal Revenue Code, the 
129.16  time for filing the estate tax return is extended for that 
129.17  period.  
129.18     <b>[EFFECTIVE DATE.]</b> This section is effective for estates of 
129.19  decedents dying after December 31, 2001. 
129.20     Sec. 3.  Minnesota Statutes 2002, section 289A.31, is 
129.21  amended by adding a subdivision to read: 
129.22     Subd. 8.  [LIABILITY OF VENDOR FOR REPAYMENT OF REFUND.] If 
129.23  an individual income tax refund resulting from claiming an 
129.24  education credit under section 290.0674 is paid by means of 
129.25  directly depositing the proceeds of the refund into a bank 
129.26  account controlled by the vendor of the product or service upon 
129.27  which the education credit is based, and the commissioner 
129.28  subsequently disallows the credit, the commissioner may seek 
129.29  repayment of the refund from the vendor.  The amount of the 
129.30  repayment must be assessed and collected in the same time and 
129.31  manner as an erroneous refund under section 289A.37, subdivision 
129.32  2. 
129.33     <b>[EFFECTIVE DATE.]</b> This section is effective for refunds 
129.34  paid to accounts controlled by a vendor on or after the day 
129.35  following final enactment. 
129.36     Sec. 4.  Minnesota Statutes 2002, section 289A.56, 
130.1   subdivision 3, is amended to read: 
130.2      Subd. 3.  [WITHHOLDING TAX, ENTERTAINER WITHHOLDING TAX, 
130.3   WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, ESTATE 
130.4   TAX, AND SALES TAX OVERPAYMENTS.] When a refund is due for 
130.5   overpayments of withholding tax, entertainer withholding tax, or 
130.6   withholding from payments to out-of-state contractors, or estate 
130.7   tax, interest is computed from the date of payment to the date 
130.8   the refund is paid or credited.  For purposes of this 
130.9   subdivision, the date of payment is the later of the date the 
130.10  tax was finally due or was paid. 
130.11     For the purposes of computing interest on estate tax 
130.12  refunds, interest is paid from the later of the date of 
130.13  overpayment, the date the estate tax return is due, or the date 
130.14  the original estate tax return is filed to the date the refund 
130.15  is paid. 
130.16     For purposes of computing interest on sales and use tax 
130.17  refunds, interest is paid from the date of payment to the date 
130.18  the refund is paid or credited, if the refund claim includes a 
130.19  detailed schedule reflecting the tax periods covered in the 
130.20  claim.  If the refund claim submitted does not include a 
130.21  detailed schedule reflecting the tax periods covered in the 
130.22  claim, interest is computed from the date the claim was filed. 
130.23     <b>[EFFECTIVE DATE.]</b> This section is effective for estates of 
130.24  decedents dying after December 31, 2003. 
130.25     Sec. 5.  Minnesota Statutes 2002, section 289A.60, 
130.26  subdivision 7, is amended to read: 
130.27     Subd. 7.  [PENALTY FOR FRIVOLOUS RETURN.] If a taxpayer 
130.28  files what purports to be a tax return or a claim for refund but 
130.29  which does not contain information on which the substantial 
130.30  correctness of the purported return or claim for refund may be 
130.31  judged or contains information that on its face shows that the 
130.32  purported return or claim for refund is substantially incorrect 
130.33  and the conduct is due to a position that is frivolous or a 
130.34  desire that appears on the purported return or claim for refund 
130.35  to delay or impede the administration of Minnesota tax laws, 
130.36  then the individual shall pay a penalty of $500 the greater of 
131.1   $1,000 or 25 percent of the amount of tax required to be shown 
131.2   on the return.  In a proceeding involving the issue of whether 
131.3   or not a person is liable for this penalty, the burden of proof 
131.4   is on the commissioner.  
131.5      <b>[EFFECTIVE DATE.]</b> This section is effective for returns 
131.6   filed after December 31, 2003. 
131.7      Sec. 6.  Minnesota Statutes 2002, section 290.01, 
131.8   subdivision 19b, is amended to read: 
131.9      Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
131.10  individuals, estates, and trusts, there shall be subtracted from 
131.11  federal taxable income: 
131.12     (1) interest income on obligations of any authority, 
131.13  commission, or instrumentality of the United States to the 
131.14  extent includable in taxable income for federal income tax 
131.15  purposes but exempt from state income tax under the laws of the 
131.16  United States; 
131.17     (2) if included in federal taxable income, the amount of 
131.18  any overpayment of income tax to Minnesota or to any other 
131.19  state, for any previous taxable year, whether the amount is 
131.20  received as a refund or as a credit to another taxable year's 
131.21  income tax liability; 
131.22     (3) the amount paid to others, less the amount used to 
131.23  claim the credit allowed under section 290.0674, not to exceed 
131.24  $1,625 for each qualifying child in grades kindergarten to 6 and 
131.25  $2,500 for each qualifying child in grades 7 to 12, for tuition, 
131.26  textbooks, and transportation of each qualifying child in 
131.27  attending an elementary or secondary school situated in 
131.28  Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, 
131.29  wherein a resident of this state may legally fulfill the state's 
131.30  compulsory attendance laws, which is not operated for profit, 
131.31  and which adheres to the provisions of the Civil Rights Act of 
131.32  1964 and chapter 363.  For the purposes of this clause, 
131.33  "tuition" includes fees or tuition as defined in section 
131.34  290.0674, subdivision 1, clause (1).  As used in this clause, 
131.35  "textbooks" includes books and other instructional materials and 
131.36  equipment purchased or leased for use in elementary and 
132.1   secondary schools in teaching only those subjects legally and 
132.2   commonly taught in public elementary and secondary schools in 
132.3   this state.  Equipment expenses qualifying for deduction 
132.4   includes expenses as defined and limited in section 290.0674, 
132.5   subdivision 1, clause (3).  "Textbooks" does not include 
132.6   instructional books and materials used in the teaching of 
132.7   religious tenets, doctrines, or worship, the purpose of which is 
132.8   to instill such tenets, doctrines, or worship, nor does it 
132.9   include books or materials for, or transportation to, 
132.10  extracurricular activities including sporting events, musical or 
132.11  dramatic events, speech activities, driver's education, or 
132.12  similar programs.  For purposes of the subtraction provided by 
132.13  this clause, "qualifying child" has the meaning given in section 
132.14  32(c)(3) of the Internal Revenue Code; 
132.15     (4) income as provided under section 290.0802; 
132.16     (5) to the extent included in federal adjusted gross 
132.17  income, income realized on disposition of property exempt from 
132.18  tax under section 290.491; 
132.19     (6) to the extent not deducted in determining federal 
132.20  taxable income or used to claim the long-term care insurance 
132.21  credit under section 290.0672, the amount paid for health 
132.22  insurance of self-employed individuals as determined under 
132.23  section 162(l) of the Internal Revenue Code, except that the 
132.24  percent limit does not apply.  If the individual deducted 
132.25  insurance payments under section 213 of the Internal Revenue 
132.26  Code of 1986, the subtraction under this clause must be reduced 
132.27  by the lesser of: 
132.28     (i) the total itemized deductions allowed under section 
132.29  63(d) of the Internal Revenue Code, less state, local, and 
132.30  foreign income taxes deductible under section 164 of the 
132.31  Internal Revenue Code and the standard deduction under section 
132.32  63(c) of the Internal Revenue Code; or 
132.33     (ii) the lesser of (A) the amount of insurance qualifying 
132.34  as "medical care" under section 213(d) of the Internal Revenue 
132.35  Code to the extent not deducted under section 162(1) of the 
132.36  Internal Revenue Code or excluded from income or (B) the total 
133.1   amount deductible for medical care under section 213(a); 
133.2      (7) the exemption amount allowed under Laws 1995, chapter 
133.3   255, article 3, section 2, subdivision 3; 
133.4      (8) to the extent included in federal taxable income, 
133.5   postservice benefits for youth community service under section 
133.6   124D.42 for volunteer service under United States Code, title 
133.7   42, sections 12601 to 12604; 
133.8      (9) (7) to the extent not deducted in determining federal 
133.9   taxable income by an individual who does not itemize deductions 
133.10  for federal income tax purposes for the taxable year, an amount 
133.11  equal to 50 percent of the excess of charitable contributions 
133.12  allowable as a deduction for the taxable year under section 
133.13  170(a) of the Internal Revenue Code over $500; 
133.14     (10) (8) for taxable years beginning before January 1, 
133.15  2008, the amount of the federal small ethanol producer credit 
133.16  allowed under section 40(a)(3) of the Internal Revenue Code 
133.17  which is included in gross income under section 87 of the 
133.18  Internal Revenue Code; 
133.19     (11) (9) for individuals who are allowed a federal foreign 
133.20  tax credit for taxes that do not qualify for a credit under 
133.21  section 290.06, subdivision 22, an amount equal to the carryover 
133.22  of subnational foreign taxes for the taxable year, but not to 
133.23  exceed the total subnational foreign taxes reported in claiming 
133.24  the foreign tax credit.  For purposes of this clause, "federal 
133.25  foreign tax credit" means the credit allowed under section 27 of 
133.26  the Internal Revenue Code, and "carryover of subnational foreign 
133.27  taxes" equals the carryover allowed under section 904(c) of the 
133.28  Internal Revenue Code minus national level foreign taxes to the 
133.29  extent they exceed the federal foreign tax credit; and 
133.30     (12) (10) in each of the five tax years immediately 
133.31  following the tax year in which an addition is required under 
133.32  subdivision 19a, clause (7), an amount equal to one-fifth of the 
133.33  delayed depreciation.  For purposes of this clause, "delayed 
133.34  depreciation" means the amount of the addition made by the 
133.35  taxpayer under subdivision 19a, clause (7), minus the positive 
133.36  value of any net operating loss under section 172 of the 
134.1   Internal Revenue Code generated for the tax year of the 
134.2   addition.  The resulting delayed depreciation cannot be less 
134.3   than zero. 
134.4      <b>[EFFECTIVE DATE.]</b> This section is effective for tax years 
134.5   beginning after December 31, 2003. 
134.6      Sec. 7.  Minnesota Statutes 2002, section 290.01, 
134.7   subdivision 19d, is amended to read: 
134.8      Subd. 19d.  [CORPORATIONS; MODIFICATIONS DECREASING FEDERAL 
134.9   TAXABLE INCOME.] For corporations, there shall be subtracted 
134.10  from federal taxable income after the increases provided in 
134.11  subdivision 19c:  
134.12     (1) the amount of foreign dividend gross-up added to gross 
134.13  income for federal income tax purposes under section 78 of the 
134.14  Internal Revenue Code; 
134.15     (2) the amount of salary expense not allowed for federal 
134.16  income tax purposes due to claiming the federal jobs credit 
134.17  under section 51 of the Internal Revenue Code; 
134.18     (3) any dividend (not including any distribution in 
134.19  liquidation) paid within the taxable year by a national or state 
134.20  bank to the United States, or to any instrumentality of the 
134.21  United States exempt from federal income taxes, on the preferred 
134.22  stock of the bank owned by the United States or the 
134.23  instrumentality; 
134.24     (4) amounts disallowed for intangible drilling costs due to 
134.25  differences between this chapter and the Internal Revenue Code 
134.26  in taxable years beginning before January 1, 1987, as follows: 
134.27     (i) to the extent the disallowed costs are represented by 
134.28  physical property, an amount equal to the allowance for 
134.29  depreciation under Minnesota Statutes 1986, section 290.09, 
134.30  subdivision 7, subject to the modifications contained in 
134.31  subdivision 19e; and 
134.32     (ii) to the extent the disallowed costs are not represented
134.33  by physical property, an amount equal to the allowance for cost 
134.34  depletion under Minnesota Statutes 1986, section 290.09, 
134.35  subdivision 8; 
134.36     (5) the deduction for capital losses pursuant to sections 
135.1   1211 and 1212 of the Internal Revenue Code, except that: 
135.2      (i) for capital losses incurred in taxable years beginning 
135.3   after December 31, 1986, capital loss carrybacks shall not be 
135.4   allowed; 
135.5      (ii) for capital losses incurred in taxable years beginning 
135.6   after December 31, 1986, a capital loss carryover to each of the 
135.7   15 taxable years succeeding the loss year shall be allowed; 
135.8      (iii) for capital losses incurred in taxable years 
135.9   beginning before January 1, 1987, a capital loss carryback to 
135.10  each of the three taxable years preceding the loss year, subject 
135.11  to the provisions of Minnesota Statutes 1986, section 290.16, 
135.12  shall be allowed; and 
135.13     (iv) for capital losses incurred in taxable years beginning 
135.14  before January 1, 1987, a capital loss carryover to each of the 
135.15  five taxable years succeeding the loss year to the extent such 
135.16  loss was not used in a prior taxable year and subject to the 
135.17  provisions of Minnesota Statutes 1986, section 290.16, shall be 
135.18  allowed; 
135.19     (6) an amount for interest and expenses relating to income 
135.20  not taxable for federal income tax purposes, if (i) the income 
135.21  is taxable under this chapter and (ii) the interest and expenses 
135.22  were disallowed as deductions under the provisions of section 
135.23  171(a)(2), 265 or 291 of the Internal Revenue Code in computing 
135.24  federal taxable income; 
135.25     (7) in the case of mines, oil and gas wells, other natural 
135.26  deposits, and timber for which percentage depletion was 
135.27  disallowed pursuant to subdivision 19c, clause (11), a 
135.28  reasonable allowance for depletion based on actual cost.  In the 
135.29  case of leases the deduction must be apportioned between the 
135.30  lessor and lessee in accordance with rules prescribed by the 
135.31  commissioner.  In the case of property held in trust, the 
135.32  allowable deduction must be apportioned between the income 
135.33  beneficiaries and the trustee in accordance with the pertinent 
135.34  provisions of the trust, or if there is no provision in the 
135.35  instrument, on the basis of the trust's income allocable to 
135.36  each; 
136.1      (8) for certified pollution control facilities placed in 
136.2   service in a taxable year beginning before December 31, 1986, 
136.3   and for which amortization deductions were elected under section 
136.4   169 of the Internal Revenue Code of 1954, as amended through 
136.5   December 31, 1985, an amount equal to the allowance for 
136.6   depreciation under Minnesota Statutes 1986, section 290.09, 
136.7   subdivision 7; 
136.8      (9) amounts included in federal taxable income that are due 
136.9   to refunds of income, excise, or franchise taxes based on net 
136.10  income or related minimum taxes paid by the corporation to 
136.11  Minnesota, another state, a political subdivision of another 
136.12  state, the District of Columbia, or a foreign country or 
136.13  possession of the United States to the extent that the taxes 
136.14  were added to federal taxable income under section 290.01, 
136.15  subdivision 19c, clause (1), in a prior taxable year; 
136.16     (10) 80 percent of royalties, fees, or other like income 
136.17  accrued or received from a foreign operating corporation or a 
136.18  foreign corporation which is part of the same unitary business 
136.19  as the receiving corporation; 
136.20     (11) income or gains from the business of mining as defined 
136.21  in section 290.05, subdivision 1, clause (a), that are not 
136.22  subject to Minnesota franchise tax; 
136.23     (12) the amount of handicap access expenditures in the 
136.24  taxable year which are not allowed to be deducted or capitalized 
136.25  under section 44(d)(7) of the Internal Revenue Code; 
136.26     (13) the amount of qualified research expenses not allowed 
136.27  for federal income tax purposes under section 280C(c) of the 
136.28  Internal Revenue Code, but only to the extent that the amount 
136.29  exceeds the amount of the credit allowed under section 290.068; 
136.30     (14) the amount of salary expenses not allowed for federal 
136.31  income tax purposes due to claiming the Indian employment credit 
136.32  under section 45A(a) of the Internal Revenue Code; 
136.33     (15) the amount of any refund of environmental taxes paid 
136.34  under section 59A of the Internal Revenue Code; 
136.35     (16) for taxable years beginning before January 1, 2008, 
136.36  the amount of the federal small ethanol producer credit allowed 
137.1   under section 40(a)(3) of the Internal Revenue Code which is 
137.2   included in gross income under section 87 of the Internal 
137.3   Revenue Code; 
137.4      (17) for a corporation whose foreign sales corporation, as 
137.5   defined in section 922 of the Internal Revenue Code, constituted 
137.6   a foreign operating corporation during any taxable year ending 
137.7   before January 1, 1995, and a return was filed by August 15, 
137.8   1996, claiming the deduction under this section 290.21, 
137.9   subdivision 4, for income received from the foreign operating 
137.10  corporation, an amount equal to 1.23 multiplied by the amount of 
137.11  income excluded under section 114 of the Internal Revenue Code, 
137.12  provided the income is not income of a foreign operating 
137.13  company; 
137.14     (18) any decrease in subpart F income, as defined in 
137.15  section 952(a) of the Internal Revenue Code, for the taxable 
137.16  year when subpart F income is calculated without regard to the 
137.17  provisions of section 614 of Public Law Number 107-147; and 
137.18     (19) in each of the five tax years immediately following 
137.19  the tax year in which an addition is required under subdivision 
137.20  19c, clause (16), an amount equal to one-fifth of the delayed 
137.21  depreciation.  For purposes of this clause, "delayed 
137.22  depreciation" means the amount of the addition made by the 
137.23  taxpayer under subdivision 19c, clause (16).  The resulting 
137.24  delayed depreciation cannot be less than zero. 
137.25     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
137.26  following final enactment. 
137.27     Sec. 8.  Minnesota Statutes 2002, section 290.06, 
137.28  subdivision 2c, is amended to read: 
137.29     Subd. 2c.  [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 
137.30  AND TRUSTS.] (a) The income taxes imposed by this chapter upon 
137.31  married individuals filing joint returns and surviving spouses 
137.32  as defined in section 2(a) of the Internal Revenue Code must be 
137.33  computed by applying to their taxable net income the following 
137.34  schedule of rates: 
137.35     (1) On the first $25,680, 5.35 percent; 
137.36     (2) On all over $25,680, but not over $102,030, 7.05 
138.1   percent; 
138.2      (3) On all over $102,030, 7.85 percent. 
138.3      Married individuals filing separate returns, estates, and 
138.4   trusts must compute their income tax by applying the above rates 
138.5   to their taxable income, except that the income brackets will be 
138.6   one-half of the above amounts.  
138.7      (b) The income taxes imposed by this chapter upon unmarried 
138.8   individuals must be computed by applying to taxable net income 
138.9   the following schedule of rates: 
138.10     (1) On the first $17,570, 5.35 percent; 
138.11     (2) On all over $17,570, but not over $57,710, 7.05 
138.12  percent; 
138.13     (3) On all over $57,710, 7.85 percent. 
138.14     (c) The income taxes imposed by this chapter upon unmarried 
138.15  individuals qualifying as a head of household as defined in 
138.16  section 2(b) of the Internal Revenue Code must be computed by 
138.17  applying to taxable net income the following schedule of rates: 
138.18     (1) On the first $21,630, 5.35 percent; 
138.19     (2) On all over $21,630, but not over $86,910, 7.05 
138.20  percent; 
138.21     (3) On all over $86,910, 7.85 percent. 
138.22     (d) In lieu of a tax computed according to the rates set 
138.23  forth in this subdivision, the tax of any individual taxpayer 
138.24  whose taxable net income for the taxable year is less than an 
138.25  amount determined by the commissioner must be computed in 
138.26  accordance with tables prepared and issued by the commissioner 
138.27  of revenue based on income brackets of not more than $100.  The 
138.28  amount of tax for each bracket shall be computed at the rates 
138.29  set forth in this subdivision, provided that the commissioner 
138.30  may disregard a fractional part of a dollar unless it amounts to 
138.31  50 cents or more, in which case it may be increased to $1. 
138.32     (e) An individual who is not a Minnesota resident for the 
138.33  entire year must compute the individual's Minnesota income tax 
138.34  as provided in this subdivision.  After the application of the 
138.35  nonrefundable credits provided in this chapter, the tax 
138.36  liability must then be multiplied by a fraction in which:  
139.1      (1) the numerator is the individual's Minnesota source 
139.2   federal adjusted gross income as defined in section 62 of the 
139.3   Internal Revenue Code and increased by the additions required 
139.4   under section 290.01, subdivision 19a, clauses (1), (5), and 
139.5   (6), and reduced by the Minnesota assignable portion of the 
139.6   subtraction for United States government interest under section 
139.7   290.01, subdivision 19b, clause (1), after applying the 
139.8   allocation and assignability provisions of section 290.081, 
139.9   clause (a), or 290.17; and 
139.10     (2) the denominator is the individual's federal adjusted 
139.11  gross income as defined in section 62 of the Internal Revenue 
139.12  Code of 1986, increased by the amounts specified in section 
139.13  290.01, subdivision 19a, clauses (1), (5), and (6), and reduced 
139.14  by the amounts specified in section 290.01, subdivision 19b, 
139.15  clause (1). 
139.16     <b>[EFFECTIVE DATE.]</b> This section is effective for tax years 
139.17  beginning after December 31, 2002. 
139.18     Sec. 9.  Minnesota Statutes 2002, section 290.0671, 
139.19  subdivision 1, is amended to read: 
139.20     Subdivision 1.  [CREDIT ALLOWED.] (a) An individual is 
139.21  allowed a credit against the tax imposed by this chapter equal 
139.22  to a percentage of earned income.  To receive a credit, a 
139.23  taxpayer must be eligible for a credit under section 32 of the 
139.24  Internal Revenue Code.  
139.25     (b) For individuals with no qualifying children, the credit 
139.26  equals 1.9125 percent of the first $4,620 of earned income.  The 
139.27  credit is reduced by 1.9125 percent of earned income or modified 
139.28  adjusted gross income, whichever is greater, in excess of 
139.29  $5,770, but in no case is the credit less than zero. 
139.30     (c) For individuals with one qualifying child, the credit 
139.31  equals 8.5 percent of the first $6,920 of earned income and 8.5 
139.32  percent of earned income over $12,080 but less than $13,450.  
139.33  The credit is reduced by 5.73 percent of earned income or 
139.34  modified adjusted gross income, whichever is greater, in excess 
139.35  of $15,080, but in no case is the credit less than zero. 
139.36     (d) For individuals with two or more qualifying children, 
140.1   the credit equals ten percent of the first $9,720 of earned 
140.2   income and 20 percent of earned income over $14,860 but less 
140.3   than $16,800.  The credit is reduced by 10.3 percent of earned 
140.4   income or modified adjusted gross income, whichever is greater, 
140.5   in excess of $17,890, but in no case is the credit less than 
140.6   zero. 
140.7      (e) For a nonresident or part-year resident, the credit 
140.8   must be allocated based on the percentage calculated under 
140.9   section 290.06, subdivision 2c, paragraph (e). 
140.10     (f) For a person who was a resident for the entire tax year 
140.11  and has earned income not subject to tax under this chapter, the 
140.12  credit must be allocated based on the ratio of federal adjusted 
140.13  gross income reduced by the earned income not subject to tax 
140.14  under this chapter over federal adjusted gross income. 
140.15     (g) For tax years beginning after December 31, 2001, and 
140.16  before December 31, 2004, the $5,770 in paragraph (b) is 
140.17  increased to $6,770, the $15,080 in paragraph (c) is increased 
140.18  to $16,080, and the $17,890 in paragraph (d) is increased to 
140.19  $18,890, after being adjusted for inflation under subdivision 7, 
140.20  are each increased by $1,000 for married taxpayers filing joint 
140.21  returns. 
140.22     (h) For tax years beginning after December 31, 2004, and 
140.23  before December 31, 2007, the $5,770 in paragraph (b) is 
140.24  increased to $7,770, the $15,080 in paragraph (c) is increased 
140.25  to $17,080, and the $17,890 in paragraph (d) is increased to 
140.26  $19,890, after being adjusted for inflation under subdivision 7, 
140.27  are each increased by $2,000 for married taxpayers filing joint 
140.28  returns. 
140.29     (i) For tax years beginning after December 31, 2007, and 
140.30  before December 31, 2010, the $5,770 in paragraph (b) is 
140.31  increased to $8,770, the $15,080 in paragraph (c) is increased 
140.32  to $18,080, and the $17,890 in paragraph (d) is increased to 
140.33  $20,890, after being adjusted for inflation under subdivision 7, 
140.34  are each increased by $3,000 for married taxpayers filing joint 
140.35  returns.  For tax years beginning after December 31, 2008, the 
140.36  $3,000 is adjusted annually for inflation under subdivision 7. 
141.1      (j) The commissioner shall construct tables showing the 
141.2   amount of the credit at various income levels and make them 
141.3   available to taxpayers.  The tables shall follow the schedule 
141.4   contained in this subdivision, except that the commissioner may 
141.5   graduate the transition between income brackets. 
141.6      <b>[EFFECTIVE DATE.]</b> This section is effective for tax years 
141.7   beginning after December 31, 2002. 
141.8      Sec. 10.  Minnesota Statutes 2002, section 290.0675, 
141.9   subdivision 2, is amended to read: 
141.10     Subd. 2.  [CREDIT ALLOWED.] A married couple filing a joint 
141.11  return is allowed a credit against the tax imposed under section 
141.12  290.06.  
141.13     The minimum taxable income for the married couple to be 
141.14  eligible for the credit is $25,680, and the minimum earned 
141.15  income in order for the couple to be eligible for the credit is 
141.16  $14,250 for each spouse. 
141.17     <b>[EFFECTIVE DATE.]</b> This section is effective for tax years 
141.18  beginning after December 31, 2002. 
141.19     Sec. 11.  Minnesota Statutes 2002, section 290.0675, 
141.20  subdivision 3, is amended to read: 
141.21     Subd. 3.  [CREDIT AMOUNT.] The credit amount is the 
141.22  difference between the tax on the couple's joint Minnesota 
141.23  taxable income under the rates and income levels in section 
141.24  290.06, subdivision 2c, paragraph (a), as adjusted for the 
141.25  taxable year by section 290.06, subdivision 2d, and the sum of 
141.26  the tax under the rates and income levels of section 290.06, 
141.27  subdivision 2c, paragraph (b), as adjusted for the taxable year 
141.28  by section 290.06, subdivision 2d, on the earned income of the 
141.29  lesser-earning spouse, and the tax under the rates and income 
141.30  levels of section 290.06, subdivision 2c, paragraph (b), as 
141.31  adjusted for the taxable year by section 290.06, subdivision 2d, 
141.32  on the couple's joint Minnesota taxable income, minus the earned 
141.33  income of the lesser-earning spouse. 
141.34     The commissioner of revenue shall prepare and make 
141.35  available to taxpayers a comprehensive table showing the credit 
141.36  under this section at brackets of earnings of the lesser-earning 
142.1   spouse and joint taxable income.  The brackets of earnings shall 
142.2   not be more than $2,000. 
142.3      <b>[EFFECTIVE DATE.]</b> This section is effective for tax years 
142.4   beginning after December 31, 2002. 
142.5      Sec. 12.  Minnesota Statutes 2002, section 290.0679, 
142.6   subdivision 2, is amended to read: 
142.7      Subd. 2.  [CONDITIONS FOR ASSIGNMENT.] A qualifying 
142.8   taxpayer may assign all or part of an anticipated refund for the 
142.9   current and future taxable years to a financial institution or a 
142.10  qualifying organization.  A financial institution or qualifying 
142.11  organization accepting assignment must pay the amount secured by 
142.12  the assignment to a third-party vendor.  The commissioner of 
142.13  children, families, and learning shall provide a list of 
142.14  categories of, upon request from a third-party vendor, certify 
142.15  that the vendor's products and services that qualify for the 
142.16  education credit to financial institutions and qualifying 
142.17  organizations.  A denial of a certification is subject to the 
142.18  contested case procedure under chapter 14.  A financial 
142.19  institution or qualifying organization that accepts assignments 
142.20  under this section must verify as part of the assignment 
142.21  documentation that the product or service to be provided by the 
142.22  third-party vendor qualifies has been certified by the 
142.23  commissioner of children, families, and learning as qualifying 
142.24  for the education credit.  The amount assigned for the current 
142.25  and future taxable years may not exceed the maximum allowable 
142.26  education credit for the current taxable year.  Both the 
142.27  taxpayer and spouse must consent to the assignment of a refund 
142.28  from a joint return. 
142.29     <b>[EFFECTIVE DATE.]</b> This section is effective for assignments 
142.30  made on or after the day following final enactment. 
142.31     Sec. 13.  Minnesota Statutes 2002, section 290.0802, 
142.32  subdivision 1, is amended to read: 
142.33     Subdivision 1.  [DEFINITIONS.] For purposes of this 
142.34  section, the following terms have the meanings given. 
142.35     (a) "Adjusted gross income" means federal adjusted gross 
142.36  income as used in section 22(d) of the Internal Revenue Code for 
143.1   the taxable year, plus a lump sum distribution as defined in 
143.2   section 402(e)(3) of the Internal Revenue Code, and less any 
143.3   pension, annuity, or disability benefits included in federal 
143.4   gross income but not subject to state taxation other than the 
143.5   subtraction allowed under section 290.01, subdivision 19b, 
143.6   clause (4). 
143.7      (b) "Disability income" means disability income as defined 
143.8   in section 22(c)(2)(B)(iii) of the Internal Revenue Code. 
143.9      (c) "Nontaxable retirement and disability benefits" means 
143.10  the amount of pension, annuity, or disability benefits that 
143.11  would be included in the reduction under section 22(c)(3) of the 
143.12  Internal Revenue Code and pension, annuity, or disability 
143.13  benefits included in federal gross income but not subject to 
143.14  state taxation other than the subtraction allowed under section 
143.15  290.01, subdivision 19b, clause (4). 
143.16     (d) "Qualified individual" means a qualified individual as 
143.17  defined in section 22(b) of the Internal Revenue Code. 
143.18     (e) "Social security benefits above the second federal 
143.19  threshold" means the amount of social security benefits included 
143.20  in federal taxable income due to the provisions of section 13215 
143.21  of the Omnibus Budget Reconciliation Act of 1993, Public Law 
143.22  Number 103-66. 
143.23     <b>[EFFECTIVE DATE.]</b> This section is effective for tax years 
143.24  beginning after December 31, 2002. 
143.25     Sec. 14.  Minnesota Statutes 2002, section 291.005, 
143.26  subdivision 1, is amended to read: 
143.27     Subdivision 1.  Unless the context otherwise clearly 
143.28  requires, the following terms used in this chapter shall have 
143.29  the following meanings: 
143.30     (1) "Federal gross estate" means the gross estate of a 
143.31  decedent as valued and otherwise determined for federal estate 
143.32  tax purposes by federal taxing authorities pursuant to the 
143.33  provisions of the Internal Revenue Code. 
143.34     (2) "Minnesota gross estate" means the federal gross estate 
143.35  of a decedent after (a) excluding therefrom any property 
143.36  included therein which has its situs outside Minnesota and 
144.1   pensions exempt from tax under this chapter pursuant to section 
144.2   352.15, subdivision 1; 353.15, subdivision 1; 354.10, 
144.3   subdivision 1; 354B.30; or 354C.165, and (b) including therein 
144.4   any property omitted from the federal gross estate which is 
144.5   includable therein, has its situs in Minnesota, and was not 
144.6   disclosed to federal taxing authorities.  
144.7      (3) "Personal representative" means the executor, 
144.8   administrator or other person appointed by the court to 
144.9   administer and dispose of the property of the decedent.  If 
144.10  there is no executor, administrator or other person appointed, 
144.11  qualified, and acting within this state, then any person in 
144.12  actual or constructive possession of any property having a situs 
144.13  in this state which is included in the federal gross estate of 
144.14  the decedent shall be deemed to be a personal representative to 
144.15  the extent of the property and the Minnesota estate tax due with 
144.16  respect to the property. 
144.17     (4) "Resident decedent" means an individual whose domicile 
144.18  at the time of death was in Minnesota. 
144.19     (5) "Nonresident decedent" means an individual whose 
144.20  domicile at the time of death was not in Minnesota. 
144.21     (6) "Situs of property" means, with respect to real 
144.22  property, the state or country in which it is located; with 
144.23  respect to tangible personal property, the state or country in 
144.24  which it was normally kept or located at the time of the 
144.25  decedent's death; and with respect to intangible personal 
144.26  property, the state or country in which the decedent was 
144.27  domiciled at death. 
144.28     (7) "Commissioner" means the commissioner of revenue or any 
144.29  person to whom the commissioner has delegated functions under 
144.30  this chapter. 
144.31     (8) "Internal Revenue Code" means the United States 
144.32  Internal Revenue Code of 1986, as amended through December 31, 
144.33  2000 2002. 
144.34     <b>[EFFECTIVE DATE.]</b> This section is effective for estates of 
144.35  decedents dying after December 31, 2002. 
144.36     Sec. 15.  Minnesota Statutes 2002, section 291.03, 
145.1   subdivision 1, is amended to read: 
145.2      Subdivision 1.  [TAX AMOUNT.] The tax imposed shall be an 
145.3   amount equal to the proportion of the maximum credit computed 
145.4   under section 2011 of the Internal Revenue Code, as amended 
145.5   through December 31, 2000, for state death taxes as the 
145.6   Minnesota gross estate bears to the value of the federal gross 
145.7   estate.  For a resident decedent, the tax shall be the maximum 
145.8   credit computed under section 2011 of the Internal Revenue Code 
145.9   reduced by the amount of the death tax paid the other state and 
145.10  credited against the federal estate tax if this results in a 
145.11  larger amount of tax than the proportionate amount of the 
145.12  credit.  The tax determined under this paragraph shall not be 
145.13  greater than the federal estate tax computed under section 2001 
145.14  of the Internal Revenue Code after the allowance of the federal 
145.15  credits allowed under section 2010 of the Internal Revenue Code 
145.16  of 1986, as amended through December 31, 2000.  For the purposes 
145.17  of this section, expenses which are deducted for federal income 
145.18  tax purposes under section 642(g) of the Internal Revenue Code 
145.19  as amended through December 31, 2002, are not allowable in 
145.20  computing the tax under this chapter. 
145.21     <b>[EFFECTIVE DATE.]</b> This section is effective for estates of 
145.22  decedents dying after December 31, 2002. 
145.23     Sec. 16.  Minnesota Statutes 2002, section 352.15, 
145.24  subdivision 1, is amended to read: 
145.25     Subdivision 1.  [EXEMPTION; EXCEPTIONS.] None of the money, 
145.26  annuities, or other benefits mentioned in this chapter is 
145.27  assignable either in law or in equity or subject to state estate 
145.28  tax, or to execution, levy, attachment, garnishment, or other 
145.29  legal process, except as provided in subdivision 1a or section 
145.30  518.58, 518.581, or 518.6111.  
145.31     <b>[EFFECTIVE DATE.]</b> This section is effective for estates of 
145.32  decedents dying after December 31, 2002. 
145.33     Sec. 17.  Minnesota Statutes 2002, section 353.15, 
145.34  subdivision 1, is amended to read: 
145.35     Subdivision 1.  [EXEMPTION; EXCEPTIONS.] No money, annuity, 
145.36  or benefit provided for in this chapter is assignable or subject 
146.1   to any state estate tax, or to execution, levy, attachment, 
146.2   garnishment, or legal process, except as provided in subdivision 
146.3   2 or section 518.58, 518.581, or 518.6111.  
146.4      <b>[EFFECTIVE DATE.]</b> This section is effective for estates of 
146.5   decedents dying after December 31, 2002. 
146.6      Sec. 18.  Minnesota Statutes 2002, section 354.10, 
146.7   subdivision 1, is amended to read: 
146.8      Subdivision 1.  [EXEMPTION; EXCEPTIONS.] The right of a 
146.9   teacher to take advantage of the benefits provided by this 
146.10  chapter, is a personal right only and is not assignable.  All 
146.11  money to the credit of a teacher's account in the fund or any 
146.12  money payable to the teacher from the fund belongs to the state 
146.13  of Minnesota until actually paid to the teacher or a beneficiary 
146.14  under this chapter.  The association may acknowledge a properly 
146.15  completed power of attorney form.  An assignment or attempted 
146.16  assignment of a teacher's interest in the fund, or of the 
146.17  beneficiary's interest in the fund, by a teacher or a 
146.18  beneficiary is void and exempt from taxation under chapter 291 
146.19  and from garnishment or levy under attachment or execution, 
146.20  except as provided in subdivision 2 or 3, or section 518.58, 
146.21  518.581, or 518.6111.  
146.22     <b>[EFFECTIVE DATE.]</b> This section is effective for estates of 
146.23  decedents dying after December 31, 2002. 
146.24     Sec. 19.  Minnesota Statutes 2002, section 354B.30, is 
146.25  amended to read: 
146.26     354B.30 [PROHIBITION ON LOANS OR PRETERMINATION 
146.27  DISTRIBUTIONS.] 
146.28     (a) No participant may obtain a loan from the plan or 
146.29  obtain any distribution from the plan at a time before the 
146.30  participant terminates the employment that gave rise to plan 
146.31  coverage. 
146.32     (b) No amounts to the credit of the plan are assignable 
146.33  either in law or in equity, are subject to state estate tax, or 
146.34  are subject to execution, levy, attachment, garnishment, or 
146.35  other legal process, except as provided in section 518.58, 
146.36  518.581, or 518.6111.  
147.1      <b>[EFFECTIVE DATE.]</b> This section is effective for estates of 
147.2   decedents dying after December 31, 2002. 
147.3      Sec. 20.  Minnesota Statutes 2002, section 354C.165, is 
147.4   amended to read: 
147.5      354C.165 [PROHIBITION ON LOANS OR PRETERMINATION 
147.6   DISTRIBUTIONS.] 
147.7      (a) Except as provided in paragraph (c), no participant may 
147.8   obtain a loan or any distribution from the plan before the 
147.9   participant terminates the employment that gave rise to plan 
147.10  coverage. 
147.11     (b) No amounts to the credit of the plan are assignable 
147.12  either in law or in equity, are subject to state estate tax, or 
147.13  are subject to execution, levy, attachment, garnishment, or 
147.14  other legal process, except as provided in section 518.58, 
147.15  518.581, or 518.6111.  
147.16     (c) Unless prohibited by or subject to a penalty under 
147.17  federal law, a teacher who is a participant in the supplemental 
147.18  retirement plan may request, in writing, a transfer of all or a 
147.19  portion of the funds accumulated in the person's supplemental 
147.20  plan account to the teachers retirement association to purchase 
147.21  service credit under sections 354.53, 354.533, 354.534, 354.535, 
147.22  354.536, 354.537, and 354.538 or to the teachers retirement fund 
147.23  association to purchase service credit under sections 354A.097, 
147.24  354A.098, 354A.099, 354A.101, 354A.102, 354A.103, and 354A.104.  
147.25  Upon receipt of a valid request, the board shall execute the 
147.26  transfer.  The transfer must be a fund-to-fund transfer, and in 
147.27  no event shall the participant directly receive any of the funds 
147.28  while still employed by the board.  In no event may the board 
147.29  transfer more than the participant's account balance.  The 
147.30  board, in cooperation with the executive director of the 
147.31  teachers retirement association, shall develop the forms for 
147.32  requesting a transfer and the procedures for executing the 
147.33  requested transfers. 
147.34     <b>[EFFECTIVE DATE.]</b> This section is effective for estates of 
147.35  decedents dying after December 31, 2002. 
147.36     Sec. 21.  Laws 2001, First Special Session chapter 5, 
148.1   article 9, section 12, the effective date, is amended to read: 
148.2      <b>[EFFECTIVE DATE.]</b> This section is effective for assignment 
148.3   of refunds filed with the commissioner after December 31, 2001.  
148.4   The time period for filing assignments expires December 31, 
148.5   2003, but assignments filed on or before that date remain in 
148.6   effect until satisfied or canceled. 
148.7      Sec. 22.  [REPEALER.] 
148.8      (a) Minnesota Statutes 2002, sections 290.0671, subdivision 
148.9   3; and 290.0675, subdivision 5, are repealed effective for tax 
148.10  years beginning after December 31, 2002. 
148.11     (b) Minnesota Rules, parts 8007.0300, subpart 3; 8009.7100; 
148.12  8009.7200; 8009.7300; 8009.7400; and 8092.1000, are repealed 
148.13  effective the day following final enactment.  
148.14                             ARTICLE 7 
148.15                           FEDERAL UPDATE 
148.16     Section 1.  Minnesota Statutes 2002, section 289A.02, 
148.17  subdivision 7, is amended to read: 
148.18     Subd. 7.  [INTERNAL REVENUE CODE.] Unless specifically 
148.19  defined otherwise, "Internal Revenue Code" means the Internal 
148.20  Revenue Code of 1986, as amended through March 15 December 31, 
148.21  2002. 
148.22     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
148.23  following final enactment. 
148.24     Sec. 2.  Minnesota Statutes 2002, section 290.01, 
148.25  subdivision 19, is amended to read: 
148.26     Subd. 19.  [NET INCOME.] The term "net income" means the 
148.27  federal taxable income, as defined in section 63 of the Internal 
148.28  Revenue Code of 1986, as amended through the date named in this 
148.29  subdivision, incorporating any elections made by the taxpayer in 
148.30  accordance with the Internal Revenue Code in determining federal 
148.31  taxable income for federal income tax purposes, and with the 
148.32  modifications provided in subdivisions 19a to 19f. 
148.33     In the case of a regulated investment company or a fund 
148.34  thereof, as defined in section 851(a) or 851(g) of the Internal 
148.35  Revenue Code, federal taxable income means investment company 
148.36  taxable income as defined in section 852(b)(2) of the Internal 
149.1   Revenue Code, except that:  
149.2      (1) the exclusion of net capital gain provided in section 
149.3   852(b)(2)(A) of the Internal Revenue Code does not apply; 
149.4      (2) the deduction for dividends paid under section 
149.5   852(b)(2)(D) of the Internal Revenue Code must be applied by 
149.6   allowing a deduction for capital gain dividends and 
149.7   exempt-interest dividends as defined in sections 852(b)(3)(C) 
149.8   and 852(b)(5) of the Internal Revenue Code; and 
149.9      (3) the deduction for dividends paid must also be applied 
149.10  in the amount of any undistributed capital gains which the 
149.11  regulated investment company elects to have treated as provided 
149.12  in section 852(b)(3)(D) of the Internal Revenue Code.  
149.13     The net income of a real estate investment trust as defined 
149.14  and limited by section 856(a), (b), and (c) of the Internal 
149.15  Revenue Code means the real estate investment trust taxable 
149.16  income as defined in section 857(b)(2) of the Internal Revenue 
149.17  Code.  
149.18     The net income of a designated settlement fund as defined 
149.19  in section 468B(d) of the Internal Revenue Code means the gross 
149.20  income as defined in section 468B(b) of the Internal Revenue 
149.21  Code. 
149.22     The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 
149.23  1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 
149.24  1616, 1617, 1704(l), and 1704(m) of the Small Business Job 
149.25  Protection Act, Public Law Number 104-188, the provisions of 
149.26  Public Law Number 104-117, the provisions of sections 313(a) and 
149.27  (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 1002, 
149.28  1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 1087, 
149.29  1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 1601(f)(5) 
149.30  and (h), and 1604(d)(1) of the Taxpayer Relief Act of 1997, 
149.31  Public Law Number 105-34, the provisions of section 6010 of the 
149.32  Internal Revenue Service Restructuring and Reform Act of 1998, 
149.33  Public Law Number 105-206, the provisions of section 4003 of the 
149.34  Omnibus Consolidated and Emergency Supplemental Appropriations 
149.35  Act, 1999, Public Law Number 105-277, and the provisions of 
149.36  section 318 of the Consolidated Appropriation Act of 2001, 
150.1   Public Law Number 106-554, shall become effective at the time 
150.2   they become effective for federal purposes. 
150.3      The Internal Revenue Code of 1986, as amended through 
150.4   December 31, 1996, shall be in effect for taxable years 
150.5   beginning after December 31, 1996. 
150.6      The provisions of sections 202(a) and (b), 221(a), 225, 
150.7   312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 
150.8   (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 
150.9   1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 
150.10  1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 
150.11  of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 
150.12  the provisions of sections 6004, 6005, 6012, 6013, 6015, 6016, 
150.13  7002, and 7003 of the Internal Revenue Service Restructuring and 
150.14  Reform Act of 1998, Public Law Number 105-206, the provisions of 
150.15  section 3001 of the Omnibus Consolidated and Emergency 
150.16  Supplemental Appropriations Act, 1999, Public Law Number 
150.17  105-277, the provisions of section 3001 of the Miscellaneous 
150.18  Trade and Technical Corrections Act of 1999, Public Law Number 
150.19  106-36, and the provisions of section 316 of the Consolidated 
150.20  Appropriation Act of 2001, Public Law Number 106-554, shall 
150.21  become effective at the time they become effective for federal 
150.22  purposes. 
150.23     The Internal Revenue Code of 1986, as amended through 
150.24  December 31, 1997, shall be in effect for taxable years 
150.25  beginning after December 31, 1997. 
150.26     The provisions of sections 5002, 6009, 6011, and 7001 of 
150.27  the Internal Revenue Service Restructuring and Reform Act of 
150.28  1998, Public Law Number 105-206, the provisions of section 9010 
150.29  of the Transportation Equity Act for the 21st Century, Public 
150.30  Law Number 105-178, the provisions of sections 1004, 4002, and 
150.31  5301 of the Omnibus Consolidation and Emergency Supplemental 
150.32  Appropriations Act, 1999, Public Law Number 105-277, the 
150.33  provision of section 303 of the Ricky Ray Hemophilia Relief Fund 
150.34  Act of 1998, Public Law Number 105-369, the provisions of 
150.35  sections 532, 534, 536, 537, and 538 of the Ticket to Work and 
150.36  Work Incentives Improvement Act of 1999, Public Law Number 
151.1   106-170, the provisions of the Installment Tax Correction Act of 
151.2   2000, Public Law Number 106-573, and the provisions of section 
151.3   309 of the Consolidated Appropriation Act of 2001, Public Law 
151.4   Number 106-554, shall become effective at the time they become 
151.5   effective for federal purposes. 
151.6      The Internal Revenue Code of 1986, as amended through 
151.7   December 31, 1998, shall be in effect for taxable years 
151.8   beginning after December 31, 1998.  
151.9      The provisions of the FSC Repeal and Extraterritorial 
151.10  Income Exclusion Act of 2000, Public Law Number 106-519, and the 
151.11  provision of section 412 of the Job Creation and Worker 
151.12  Assistance Act of 2002, Public Law Number 107-147, shall become 
151.13  effective at the time it became effective for federal purposes. 
151.14     The Internal Revenue Code of 1986, as amended through 
151.15  December 31, 1999, shall be in effect for taxable years 
151.16  beginning after December 31, 1999.  The provisions of sections 
151.17  306 and 401 of the Consolidated Appropriation Act of 2001, 
151.18  Public Law Number 106-554, and the provision of section 
151.19  632(b)(2)(A) of the Economic Growth and Tax Relief 
151.20  Reconciliation Act of 2001, Public Law Number 107-16, and 
151.21  provisions of sections 101 and 402 of the Job Creation and 
151.22  Worker Assistance Act of 2002, Public Law Number 107-147, shall 
151.23  become effective at the same time it became effective for 
151.24  federal purposes. 
151.25     The Internal Revenue Code of 1986, as amended through 
151.26  December 31, 2000, shall be in effect for taxable years 
151.27  beginning after December 31, 2000.  The provisions of sections 
151.28  659a and 671 of the Economic Growth and Tax Relief 
151.29  Reconciliation Act of 2001, Public Law Number 107-16, the 
151.30  provisions of sections 104, 105, and 111 of the Victims of 
151.31  Terrorism Tax Relief Act of 2001, Public Law Number 107-134, and 
151.32  the provisions of sections 201, 403, 413, and 606 of the Job 
151.33  Creation and Worker Assistance Act of 2002, Public Law Number 
151.34  107-147, shall become effective at the same time it became 
151.35  effective for federal purposes. 
151.36     The Internal Revenue Code of 1986, as amended through March 
152.1   15, 2002, shall be in effect for taxable years beginning after 
152.2   December 31, 2001. 
152.3      The provisions of sections 101 and 102 of the Victims of 
152.4   Terrorism Tax Relief Act of 2001, Public Law Number 107-134, 
152.5   shall become effective at the same time it becomes effective for 
152.6   federal purposes. 
152.7      The Internal Revenue Code of 1986, as amended through 
152.8   December 31, 2002, shall be in effect for taxable years 
152.9   beginning after December 31, 2002. 
152.10     Except as otherwise provided, references to the Internal 
152.11  Revenue Code in subdivisions 19a to 19g mean the code in effect 
152.12  for purposes of determining net income for the applicable year. 
152.13     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
152.14  following final enactment. 
152.15     Sec. 3.  Minnesota Statutes 2002, section 290.01, 
152.16  subdivision 31, is amended to read: 
152.17     Subd. 31.  [INTERNAL REVENUE CODE.] Unless specifically 
152.18  defined otherwise, "Internal Revenue Code" means the Internal 
152.19  Revenue Code of 1986, as amended through March 15 December 31, 
152.20  2002. 
152.21     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
152.22  following final enactment. 
152.23     Sec. 4.  Minnesota Statutes 2002, section 290A.03, 
152.24  subdivision 15, is amended to read: 
152.25     Subd. 15.  [INTERNAL REVENUE CODE.] "Internal Revenue Code" 
152.26  means the Internal Revenue Code of 1986, as amended 
152.27  through March 15 December 31, 2002. 
152.28     <b>[EFFECTIVE DATE.]</b> This section is effective for refunds 
152.29  payable for rents paid in 2003 and thereafter and property taxes 
152.30  payable in 2004 and thereafter. 
152.31                             ARTICLE 8 
152.32                DEPARTMENT PROPERTY TAX INITIATIVES 
152.33     Section 1.  Minnesota Statutes 2002, section 270.06, is 
152.34  amended to read: 
152.35     270.06 [POWERS AND DUTIES.] 
152.36     The commissioner of revenue shall: 
153.1      (1) have and exercise general supervision over the 
153.2   administration of the assessment and taxation laws of the state, 
153.3   over assessors, town, county, and city boards of review and 
153.4   equalization, and all other assessing officers in the 
153.5   performance of their duties, to the end that all assessments of 
153.6   property be made relatively just and equal in compliance with 
153.7   the laws of the state; 
153.8      (2) confer with, advise, and give the necessary 
153.9   instructions and directions to local assessors and local boards 
153.10  of review throughout the state as to their duties under the laws 
153.11  of the state; 
153.12     (3) direct proceedings, actions, and prosecutions to be 
153.13  instituted to enforce the laws relating to the liability and 
153.14  punishment of public officers and officers and agents of 
153.15  corporations for failure or negligence to comply with the 
153.16  provisions of the laws of this state governing returns of 
153.17  assessment and taxation of property, and cause complaints to be 
153.18  made against local assessors, members of boards of equalization, 
153.19  members of boards of review, or any other assessing or taxing 
153.20  officer, to the proper authority, for their removal from office 
153.21  for misconduct or negligence of duty; 
153.22     (4) require county attorneys to assist in the commencement 
153.23  of prosecutions in actions or proceedings for removal, 
153.24  forfeiture and punishment for violation of the laws of this 
153.25  state in respect to the assessment and taxation of property in 
153.26  their respective districts or counties; 
153.27     (5) require town, city, county, and other public officers 
153.28  to report information as to the assessment of property, 
153.29  collection of taxes received from licenses and other sources, 
153.30  and such other information as may be needful in the work of the 
153.31  department of revenue, in such form and upon such blanks as the 
153.32  commissioner may prescribe; 
153.33     (6) require individuals, copartnerships, companies, 
153.34  associations, and corporations to furnish information concerning 
153.35  their capital, funded or other debt, current assets and 
153.36  liabilities, earnings, operating expenses, taxes, as well as all 
154.1   other statements now required by law for taxation purposes; 
154.2      (7) subpoena witnesses, at a time and place reasonable 
154.3   under the circumstances, to appear and give testimony, and to 
154.4   produce books, records, papers and documents for inspection and 
154.5   copying relating to any matter which the commissioner may have 
154.6   authority to investigate or determine; 
154.7      (8) issue a subpoena which does not identify the person or 
154.8   persons with respect to whose liability the subpoena is issued, 
154.9   but only if (a) the subpoena relates to the investigation of a 
154.10  particular person or ascertainable group or class of persons, 
154.11  (b) there is a reasonable basis for believing that such person 
154.12  or group or class of persons may fail or may have failed to 
154.13  comply with any law administered by the commissioner, (c) the 
154.14  information sought to be obtained from the examination of the 
154.15  records (and the identity of the person or persons with respect 
154.16  to whose liability the subpoena is issued) is not readily 
154.17  available from other sources, (d) the subpoena is clear and 
154.18  specific as to the information sought to be obtained, and (e) 
154.19  the information sought to be obtained is limited solely to the 
154.20  scope of the investigation.  Provided further that the party 
154.21  served with a subpoena which does not identify the person or 
154.22  persons with respect to whose tax liability the subpoena is 
154.23  issued shall have the right, within 20 days after service of the 
154.24  subpoena, to petition the district court for the judicial 
154.25  district in which lies the county in which that party is located 
154.26  for a determination as to whether the commissioner of revenue 
154.27  has complied with all the requirements in (a) to (e), and thus, 
154.28  whether the subpoena is enforceable.  If no such petition is 
154.29  made by the party served within the time prescribed, the 
154.30  subpoena shall have the force and effect of a court order; 
154.31     (9) cause the deposition of witnesses residing within or 
154.32  without the state, or absent therefrom, to be taken, upon notice 
154.33  to the interested party, if any, in like manner that depositions 
154.34  of witnesses are taken in civil actions in the district court, 
154.35  in any matter which the commissioner may have authority to 
154.36  investigate or determine; 
155.1      (10) investigate the tax laws of other states and countries 
155.2   and to formulate and submit to the legislature such legislation 
155.3   as the commissioner may deem expedient to prevent evasions of 
155.4   assessment and taxing laws, and secure just and equal taxation 
155.5   and improvement in the system of assessment and taxation in this 
155.6   state; 
155.7      (11) consult and confer with the governor upon the subject 
155.8   of taxation, the administration of the laws in regard thereto, 
155.9   and the progress of the work of the department of revenue, and 
155.10  furnish the governor, from time to time, such assistance and 
155.11  information as the governor may require relating to tax matters; 
155.12     (12) transmit to the governor, on or before the third 
155.13  Monday in December of each even-numbered year, and to each 
155.14  member of the legislature, on or before November 15 of each 
155.15  even-numbered year, the report of the department of revenue for 
155.16  the preceding years, showing all the taxable property in the 
155.17  state and the value of the same, in tabulated form; 
155.18     (13) inquire into the methods of assessment and taxation 
155.19  and ascertain whether the assessors faithfully discharge their 
155.20  duties, particularly as to their compliance with the laws 
155.21  requiring the assessment of all property not exempt from 
155.22  taxation; 
155.23     (14) administer and enforce the assessment and collection 
155.24  of state taxes and fees, including the use of any remedy 
155.25  available to nongovernmental creditors, and, from time to time, 
155.26  make, publish, and distribute rules for the administration and 
155.27  enforcement of assessments and fees laws administered by the 
155.28  commissioner and state tax laws.  The rules have the force of 
155.29  law; 
155.30     (15) prepare blank forms for the returns required by state 
155.31  tax law and distribute them throughout the state, furnishing 
155.32  them subject to charge on application; 
155.33     (16) prescribe rules governing the qualification and 
155.34  practice of agents, attorneys, or other persons representing 
155.35  taxpayers before the commissioner.  The rules may require that 
155.36  those persons, agents, and attorneys show that they are of good 
156.1   character and in good repute, have the necessary qualifications 
156.2   to give taxpayers valuable services, and are otherwise competent 
156.3   to advise and assist taxpayers in the presentation of their case 
156.4   before being recognized as representatives of taxpayers.  After 
156.5   due notice and opportunity for hearing, the commissioner may 
156.6   suspend and bar from further practice before the commissioner 
156.7   any person, agent, or attorney who is shown to be incompetent or 
156.8   disreputable, who refuses to comply with the rules, or who with 
156.9   intent to defraud, willfully or knowingly deceives, misleads, or 
156.10  threatens a taxpayer or prospective taxpayer, by words, 
156.11  circular, letter, or by advertisement.  This clause does not 
156.12  curtail the rights of individuals to appear in their own behalf 
156.13  or partners or corporations' officers to appear in behalf of 
156.14  their respective partnerships or corporations; 
156.15     (17) appoint agents as the commissioner considers necessary 
156.16  to make examinations and determinations.  The agents have the 
156.17  rights and powers conferred on the commissioner to subpoena, 
156.18  examine, and copy books, records, papers, or memoranda, subpoena 
156.19  witnesses, administer oaths and affirmations, and take 
156.20  testimony.  In addition to administrative subpoenas of the 
156.21  commissioner and the agents, upon demand of the commissioner or 
156.22  an agent, the court administrator of any district court shall 
156.23  issue a subpoena for the attendance of a witness or the 
156.24  production of books, papers, records, or memoranda before the 
156.25  agent for inspection and copying.  Disobedience of a court 
156.26  administrator's subpoena shall be punished by the district court 
156.27  of the district in which the subpoena is issued, or in the case 
156.28  of a subpoena issued by the commissioner or an agent, by the 
156.29  district court of the district in which the party served with 
156.30  the subpoena is located, in the same manner as contempt of the 
156.31  district court; 
156.32     (18) appoint and employ additional help, purchase supplies 
156.33  or materials, or incur other expenditures in the enforcement of 
156.34  state tax laws as considered necessary.  The salaries of all 
156.35  agents and employees provided for in this chapter shall be fixed 
156.36  by the appointing authority, subject to the approval of the 
157.1   commissioner of administration; 
157.2      (19) execute and administer any agreement with the 
157.3   secretary of the treasury of the United States or a 
157.4   representative of another state regarding the exchange of 
157.5   information and administration of the tax laws; 
157.6      (20) authorize the use of unmarked motor vehicles to 
157.7   conduct seizures or criminal investigations pursuant to the 
157.8   commissioner's authority; and 
157.9      (21) exercise other powers and perform other duties 
157.10  required of or imposed upon the commissioner of revenue by law.  
157.11     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
157.12  following final enactment. 
157.13     Sec. 2.  Minnesota Statutes 2002, section 270.10, 
157.14  subdivision 1a, is amended to read: 
157.15     Subd. 1a.  [NOTIFICATION TO TAXPAYER.] At the same time 
157.16  that notice of the assessment, determination, or order of the 
157.17  commissioner is given to a taxpayer, the taxpayer must be 
157.18  notified in writing of the right to appeal to the tax court, and 
157.19  if applicable, to the small claims division.  Except in the case 
157.20  of mathematical or clerical errors, the notice must contain a 
157.21  description of the basis for, including applicable law and other 
157.22  factors considered in the determination, and a listing of the 
157.23  amounts of tax due, interest, additions to tax, and penalties.  
157.24  Failure to provide all the required information does not 
157.25  invalidate the notice for purposes of satisfying statutory 
157.26  notice requirements if the notice contains sufficient 
157.27  information to advise the taxpayer that an assessment, order, or 
157.28  other determination has been made.  The taxpayer may request 
157.29  further clarification within the time provided for appealing the 
157.30  determination.  In any notice of assessment, determination, or 
157.31  order dealing with property valuation or assessment for property 
157.32  tax purposes by the commissioner of revenue or a local unit of 
157.33  government, the taxpayer must be notified in writing that a 
157.34  taxpayer must appeal to the town or city board of equalization 
157.35  and to the county board of equalization before appealing to the 
157.36  small claims division of the tax court, except for those 
158.1   taxpayers whose original assessments are determined by the 
158.2   commissioner of revenue.  
158.3      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
158.4   following final enactment. 
158.5      Sec. 3.  Minnesota Statutes 2002, section 272.02, is 
158.6   amended by adding a subdivision to read: 
158.7      Subd. 56.  [COMPREHENSIVE HEALTH ASSOCIATION.] All property 
158.8   owned by the comprehensive health association is exempt to the 
158.9   extent provided in section 62E.10, subdivision 1. 
158.10     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
158.11  following final enactment. 
158.12     Sec. 4.  Minnesota Statutes 2002, section 272.02, is 
158.13  amended by adding a subdivision to read: 
158.14     Subd. 57.  [PRIVATE CEMETERIES.] All property owned by 
158.15  private cemeteries is exempt to the extent provided in section 
158.16  307.09. 
158.17     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
158.18  following final enactment. 
158.19     Sec. 5.  Minnesota Statutes 2002, section 272.02, is 
158.20  amended by adding a subdivision to read: 
158.21     Subd. 58.  [WESTERN LAKE SUPERIOR SANITARY BOARD.] All 
158.22  property owned, leased, controlled, used, or occupied for 
158.23  public, governmental, and municipal purposes by the Western Lake 
158.24  Superior Sanitary Board is exempt to the extent provided in 
158.25  section 458D.23. 
158.26     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
158.27  following final enactment. 
158.28     Sec. 6.  Minnesota Statutes 2002, section 272.02, is 
158.29  amended by adding a subdivision to read: 
158.30     Subd. 59.  [UNFINISHED SALE OR RENTAL PROJECTS.] Unfinished 
158.31  sale or rental projects are exempt to the extent provided in 
158.32  section 469.155, subdivision 17. 
158.33     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
158.34  following final enactment. 
158.35     Sec. 7.  Minnesota Statutes 2002, section 272.02, is 
158.36  amended by adding a subdivision to read: 
159.1      Subd. 60.  [SKYWAYS.] The pedestrian skyway system, 
159.2   underground pedestrian concourse, the people mover system, and 
159.3   publicly owned parking structures are exempt to the extent 
159.4   provided in section 469.127. 
159.5      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
159.6   following final enactment. 
159.7      Sec. 8.  Minnesota Statutes 2002, section 272.02, is 
159.8   amended by adding a subdivision to read: 
159.9      Subd. 61.  [MUNICIPAL RECREATION FACILITIES.] All property 
159.10  acquired and used by a city is exempt to the extent provided in 
159.11  section 471.191, subdivision 4. 
159.12     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
159.13  following final enactment. 
159.14     Sec. 9.  Minnesota Statutes 2002, section 272.02, is 
159.15  amended by adding a subdivision to read: 
159.16     Subd. 62.  [WATER AND WASTEWATER TREATMENT 
159.17  FACILITIES.] Related facilities owned by water and wastewater 
159.18  treatment providers who have contracted with a municipality to 
159.19  provide capital intensive public services to the municipality 
159.20  are exempt to the extent provided in section 471A.05. 
159.21     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
159.22  following final enactment. 
159.23     Sec. 10.  Minnesota Statutes 2002, section 272.12, is 
159.24  amended to read: 
159.25     272.12 [CONVEYANCES, TAXES PAID BEFORE RECORDING.] 
159.26     When: 
159.27     (a) a deed or other instrument conveying land, 
159.28     (b) a plat of any town site or addition thereto, 
159.29     (c) a survey required pursuant to section 508.47, 
159.30     (d) a condominium plat subject to chapter 515 or 515A or a 
159.31  declaration that contains such a plat, or 
159.32     (e) a common interest community plat subject to chapter 
159.33  515B or a declaration that contains such a plat, 
159.34  is presented to the county auditor for transfer, the auditor 
159.35  shall ascertain from the records if there be taxes delinquent 
159.36  upon the land described therein, or if it has been sold for 
160.1   taxes.  An assignment of a sheriff's or referee's certificate of 
160.2   sale, when the certificate of sale describes real estate, and 
160.3   certificates of redemption from mortgage or lien foreclosure 
160.4   sales, when the certificate of redemption encompasses real 
160.5   estate and is issued to a junior creditor, are considered 
160.6   instruments conveying land for the purposes of this section and 
160.7   section 272.121.  If there are taxes delinquent, the auditor 
160.8   shall certify to the same; and upon payment of such taxes, or in 
160.9   case no taxes are delinquent, shall transfer the land upon the 
160.10  books of the auditor's office, and note upon the instrument, 
160.11  over official signature, the words, "no delinquent taxes and 
160.12  transfer entered," or, if the land described has been sold or 
160.13  assigned to an actual purchaser for taxes, the words "paid by 
160.14  sale of land described within;" and, unless such statement is 
160.15  made upon such instrument, the county recorder or the registrar 
160.16  of titles shall refuse to receive or record the same; provided, 
160.17  that sheriff's or referees' certificates of sale on execution or 
160.18  foreclosure of a lien or mortgage, certificates of redemption 
160.19  from mortgage or lien foreclosure sales issued to the redeeming 
160.20  mortgagor or lienee, deeds of distribution made by a personal 
160.21  representative in probate proceedings, decrees and judgments, 
160.22  receivers receipts, patents, and copies of town or statutory 
160.23  city plats, in case the original plat filed in the office of the 
160.24  county recorder has been lost or destroyed, and the instruments 
160.25  releasing, removing and discharging reversionary and forfeiture 
160.26  provisions affecting title to land and instruments releasing, 
160.27  removing or discharging easement rights in land or building or 
160.28  other restrictions, may be recorded without such certificate; 
160.29  and, provided that instruments conveying land and, as 
160.30  appurtenant thereto an easement over adjacent tract or tracts of 
160.31  land, may be recorded without such certificate as to the land 
160.32  covered by such easement; and provided further, that any 
160.33  instrument granting an easement made in favor of any public 
160.34  utility or pipe line for conveying gas, liquids or solids in 
160.35  suspension, in the nature of a right-of-way over, along, across 
160.36  or under a tract of land may be recorded without such 
161.1   certificate as to the land covered by such easement.  Any 
161.2   instrument amending or restating the declarations, bylaws, 
161.3   plats, or other enabling Documents governing homeowners 
161.4   associations of condominiums, townhouses, common interest 
161.5   ownership communities, and other planned unit developments may 
161.6   be recorded without the auditor's certificate to the extent 
161.7   provided in section 515B.1-116(f). 
161.8      A deed of distribution made by a personal representative in 
161.9   a probate proceeding, a decree, or a judgment that conveys land 
161.10  shall be presented to the county auditor, who shall transfer the 
161.11  land upon the books of the auditor's office and note upon the 
161.12  instrument, over official signature, the words, "transfer 
161.13  entered", and the instrument may then be recorded.  A decree or 
161.14  judgment that affects title to land but does not convey land may 
161.15  be recorded without presentation to the auditor. 
161.16     A violation of this section by the county recorder or the 
161.17  registrar of titles shall be a gross misdemeanor, and, in 
161.18  addition to the punishment therefor, the recorder or registrar 
161.19  shall be liable to the grantee of any instrument so recorded for 
161.20  the amount of any damages sustained. 
161.21     When, as a condition to permitting the recording of deed or 
161.22  other instrument affecting the title to real estate previously 
161.23  forfeited to the state under the provisions of sections 281.16 
161.24  to 281.25, county officials, after such real estate has been 
161.25  purchased or repurchased, have required the payment of taxes 
161.26  erroneously assumed to have accrued against such real estate 
161.27  after forfeiture and before the date of purchase or repurchase, 
161.28  the sum required to be so paid shall be refunded to the persons 
161.29  entitled thereto out of moneys in the funds in which the sum so 
161.30  paid was placed.  Delinquent taxes are those taxes deemed 
161.31  delinquent under section 279.02. 
161.32     <b>[EFFECTIVE DATE.]</b> This section is effective for deeds or 
161.33  instruments accepted for recording or registration on or after 
161.34  July 1, 2003. 
161.35     Sec. 11.  Minnesota Statutes 2002, section 273.05, 
161.36  subdivision 1, is amended to read: 
162.1      Subdivision 1.  [APPOINTMENT OF TOWN AND CITY ASSESSORS.] 
162.2   Notwithstanding any other provision of law all town assessors 
162.3   shall be appointed by the town board, and notwithstanding any 
162.4   charter provisions to the contrary, all city assessors shall be 
162.5   appointed by the city council or other appointing authority as 
162.6   provided by law or charter.  Such assessors shall be residents 
162.7   of the state but need not be a resident of the town or city for 
162.8   which they are appointed.  They shall be selected and appointed 
162.9   because of their knowledge and training in the field of property 
162.10  taxation.  All town and statutory city assessors shall be 
162.11  appointed for indefinite terms.  A town or statutory city 
162.12  assessor who is an employee may be dismissed by the appointing 
162.13  authority for cause.  The term of the town or city assessors may 
162.14  be terminated at any time by the town board or city council on 
162.15  charges by the commissioner of revenue of inefficiency or 
162.16  neglect of duty.  Vacancies in the office of town or city 
162.17  assessor shall be filled within 90 days by appointment of the 
162.18  respective appointing authority indicated above.  If the vacancy 
162.19  is not filled within 90 days, the office shall be terminated.  
162.20  When a vacancy in the office of town or city assessor is not 
162.21  filled by appointment, and it is imperative that the office of 
162.22  assessor be filled, the county auditor shall appoint some 
162.23  resident of the county as assessor for such town or city.  The 
162.24  county auditor may appoint the county assessor as assessor for 
162.25  such town or city, in which case the town or city shall pay to 
162.26  the county treasurer the amount determined by the county auditor 
162.27  to be due for the services performed and expenses incurred by 
162.28  the county assessor in acting as assessor for such town or 
162.29  city.  The term of any town or statutory city assessor in a 
162.30  county electing in accordance with section 273.052 shall be 
162.31  terminated as provided in section 273.055. 
162.32     The commissioner of revenue may recommend to the state 
162.33  board of assessors the nonrenewal, suspension, or revocation of 
162.34  an assessor's license as provided in sections 270.41 to 270.53. 
162.35     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
162.36  following final enactment and applies to every town or city 
163.1   assessor whether that assessor was appointed before, on, or 
163.2   after the effective date. 
163.3      Sec. 12.  Minnesota Statutes 2002, section 273.061, is 
163.4   amended by adding a subdivision to read: 
163.5      Subd. 1a.  [COMPATIBLE OFFICES.] A person appointed as the 
163.6   county assessor also may serve as the county auditor, county 
163.7   treasurer, or county auditor-treasurer if those offices are 
163.8   appointive, provided that the person in the combined appointed 
163.9   office must not serve on the county board of appeal and 
163.10  equalization under section 274.13.  In a county in which the 
163.11  functions of the county assessor are combined with those of the 
163.12  county auditor or county auditor-treasurer, the county board may 
163.13  not delegate any authority, power, or responsibility under 
163.14  section 375.192, subdivision 4. 
163.15     Sec. 13.  Minnesota Statutes 2002, section 273.061, is 
163.16  amended by adding a subdivision to read: 
163.17     Subd. 1b.  [COMPATIBLE OFFICES IN COUNTIES CHANGING TO 
163.18  APPOINTED AUDITOR.] In a county in which the office of auditor, 
163.19  treasurer, or auditor-treasurer is an elective position, a 
163.20  person appointed as the county assessor also may serve as the 
163.21  county auditor, county treasurer, or county auditor-treasurer if 
163.22  a proposal to make the affected office appointive has been 
163.23  approved as required by other law and will be effective within 
163.24  five years. 
163.25     Sec. 14.  Minnesota Statutes 2002, section 273.061, is 
163.26  amended by adding a subdivision to read: 
163.27     Subd. 1c.  [INCOMPATIBLE OFFICES.] The person appointed as 
163.28  the county assessor must not also be the county attorney, a 
163.29  county board member, an elected county auditor, an elected 
163.30  county treasurer, an elected county auditor-treasurer, a town 
163.31  board supervisor for a town in the same county, or a city mayor 
163.32  or council member for a city in the same county.  The person 
163.33  appointed as the city assessor must not also be a city council 
163.34  member or mayor for the same city.  A person appointed as the 
163.35  town assessor must not also be a town board supervisor for the 
163.36  same town.  Except as provided in subdivision 1b, an assessor 
164.1   who accepts a position that is incompatible with the office of 
164.2   assessor is deemed to have resigned from the assessor position. 
164.3      Sec. 15.  Minnesota Statutes 2002, section 273.11, 
164.4   subdivision 1a, is amended to read: 
164.5      Subd. 1a.  [LIMITED MARKET VALUE.] In the case of all 
164.6   property classified as agricultural homestead or nonhomestead, 
164.7   residential homestead or nonhomestead, timber, or noncommercial 
164.8   seasonal residential recreational residential, the assessor 
164.9   shall compare the value with the taxable portion of the value 
164.10  determined in the preceding assessment.  
164.11     For assessment year 2002, the amount of the increase shall 
164.12  not exceed the greater of (1) ten percent of the value in the 
164.13  preceding assessment, or (2) 15 percent of the difference 
164.14  between the current assessment and the preceding assessment. 
164.15     For assessment year 2003, the amount of the increase shall 
164.16  not exceed the greater of (1) 12 percent of the value in the 
164.17  preceding assessment, or (2) 20 percent of the difference 
164.18  between the current assessment and the preceding assessment. 
164.19     For assessment year 2004, the amount of the increase shall 
164.20  not exceed the greater of (1) 15 percent of the value in the 
164.21  preceding assessment, or (2) 25 percent of the difference 
164.22  between the current assessment and the preceding assessment. 
164.23     For assessment year 2005, the amount of the increase shall 
164.24  not exceed the greater of (1) 15 percent of the value in the 
164.25  preceding assessment, or (2) 33 percent of the difference 
164.26  between the current assessment and the preceding assessment.  
164.27     For assessment year 2006, the amount of the increase shall 
164.28  not exceed the greater of (1) 15 percent of the value in the 
164.29  preceding assessment, or (2) 50 percent of the difference 
164.30  between the current assessment and the preceding assessment. 
164.31     This limitation shall not apply to increases in value due 
164.32  to improvements.  For purposes of this subdivision, the term 
164.33  "assessment" means the value prior to any exclusion under 
164.34  subdivision 16. 
164.35     The provisions of this subdivision shall be in effect 
164.36  through assessment year 2006 as provided in this subdivision. 
165.1      For purposes of the assessment/sales ratio study conducted 
165.2   under section 127A.48, and the computation of state aids paid 
165.3   under chapters 122A, 123A, 123B, 124D, 125A, 126C, 127A, and 
165.4   477A, market values and net tax capacities determined under this 
165.5   subdivision and subdivision 16, shall be used. 
165.6      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
165.7   following final enactment. 
165.8      Sec. 16.  Minnesota Statutes 2002, section 273.124, 
165.9   subdivision 1, is amended to read: 
165.10     Subdivision 1.  [GENERAL RULE.] (a) Residential real estate 
165.11  that is occupied and used for the purposes of a homestead by its 
165.12  owner, who must be a Minnesota resident, is a residential 
165.13  homestead.  
165.14     Agricultural land, as defined in section 273.13, 
165.15  subdivision 23, that is occupied and used as a homestead by its 
165.16  owner, who must be a Minnesota resident, is an agricultural 
165.17  homestead. 
165.18     Dates for establishment of a homestead and homestead 
165.19  treatment provided to particular types of property are as 
165.20  provided in this section.  
165.21     Property held by a trustee under a trust is eligible for 
165.22  homestead classification if the requirements under this chapter 
165.23  are satisfied. 
165.24     The assessor shall require proof, as provided in 
165.25  subdivision 13, of the facts upon which classification as a 
165.26  homestead may be determined.  Notwithstanding any other law, the 
165.27  assessor may at any time require a homestead application to be 
165.28  filed in order to verify that any property classified as a 
165.29  homestead continues to be eligible for homestead status.  
165.30  Notwithstanding any other law to the contrary, the department of 
165.31  revenue may, upon request from an assessor, verify whether an 
165.32  individual who is requesting or receiving homestead 
165.33  classification has filed a Minnesota income tax return as a 
165.34  resident for the most recent taxable year for which the 
165.35  information is available. 
165.36     When there is a name change or a transfer of homestead 
166.1   property, the assessor may reclassify the property in the next 
166.2   assessment unless a homestead application is filed to verify 
166.3   that the property continues to qualify for homestead 
166.4   classification. 
166.5      (b) For purposes of this section, homestead property shall 
166.6   include property which is used for purposes of the homestead but 
166.7   is separated from the homestead by a road, street, lot, 
166.8   waterway, or other similar intervening property.  The term "used 
166.9   for purposes of the homestead" shall include but not be limited 
166.10  to uses for gardens, garages, or other outbuildings commonly 
166.11  associated with a homestead, but shall not include vacant land 
166.12  held primarily for future development.  In order to receive 
166.13  homestead treatment for the noncontiguous property, the owner 
166.14  must use the property for the purposes of the homestead, and 
166.15  must apply to the assessor, both by the deadlines given in 
166.16  subdivision 9.  After initial qualification for the homestead 
166.17  treatment, additional applications for subsequent years are not 
166.18  required. 
166.19     (c) Residential real estate that is occupied and used for 
166.20  purposes of a homestead by a relative of the owner is a 
166.21  homestead but only to the extent of the homestead treatment that 
166.22  would be provided if the related owner occupied the property.  
166.23  For purposes of this paragraph and paragraph (g), "relative" 
166.24  means a parent, stepparent, child, stepchild, grandparent, 
166.25  grandchild, brother, sister, uncle, aunt, nephew, or niece.  
166.26  This relationship may be by blood or marriage.  Property that 
166.27  has been classified as seasonal residential recreational 
166.28  residential property at any time during which it has been owned 
166.29  by the current owner or spouse of the current owner will not be 
166.30  reclassified as a homestead unless it is occupied as a homestead 
166.31  by the owner; this prohibition also applies to property that, in 
166.32  the absence of this paragraph, would have been classified as 
166.33  seasonal residential recreational residential property at the 
166.34  time when the residence was constructed.  Neither the related 
166.35  occupant nor the owner of the property may claim a property tax 
166.36  refund under chapter 290A for a homestead occupied by a 
167.1   relative.  In the case of a residence located on agricultural 
167.2   land, only the house, garage, and immediately surrounding one 
167.3   acre of land shall be classified as a homestead under this 
167.4   paragraph, except as provided in paragraph (d). 
167.5      (d) Agricultural property that is occupied and used for 
167.6   purposes of a homestead by a relative of the owner, is a 
167.7   homestead, only to the extent of the homestead treatment that 
167.8   would be provided if the related owner occupied the property, 
167.9   and only if all of the following criteria are met: 
167.10     (1) the relative who is occupying the agricultural property 
167.11  is a son, daughter, grandson, granddaughter, father, or mother 
167.12  of the owner of the agricultural property or a son, daughter, 
167.13  grandson, or granddaughter of the spouse of the owner of the 
167.14  agricultural property; 
167.15     (2) the owner of the agricultural property must be a 
167.16  Minnesota resident; 
167.17     (3) the owner of the agricultural property must not receive 
167.18  homestead treatment on any other agricultural property in 
167.19  Minnesota; and 
167.20     (4) the owner of the agricultural property is limited to 
167.21  only one agricultural homestead per family under this paragraph. 
167.22     Neither the related occupant nor the owner of the property 
167.23  may claim a property tax refund under chapter 290A for a 
167.24  homestead occupied by a relative qualifying under this 
167.25  paragraph.  For purposes of this paragraph, "agricultural 
167.26  property" means the house, garage, other farm buildings and 
167.27  structures, and agricultural land. 
167.28     Application must be made to the assessor by the owner of 
167.29  the agricultural property to receive homestead benefits under 
167.30  this paragraph.  The assessor may require the necessary proof 
167.31  that the requirements under this paragraph have been met. 
167.32     (e) In the case of property owned by a property owner who 
167.33  is married, the assessor must not deny homestead treatment in 
167.34  whole or in part if only one of the spouses occupies the 
167.35  property and the other spouse is absent due to:  (1) marriage 
167.36  dissolution proceedings, (2) legal separation, (3) employment or 
168.1   self-employment in another location, or (4) other personal 
168.2   circumstances causing the spouses to live separately, not 
168.3   including an intent to obtain two homestead classifications for 
168.4   property tax purposes.  To qualify under clause (3), the 
168.5   spouse's place of employment or self-employment must be at least 
168.6   50 miles distant from the other spouse's place of employment, 
168.7   and the homesteads must be at least 50 miles distant from each 
168.8   other.  Homestead treatment, in whole or in part, shall not be 
168.9   denied to the owner's spouse who previously occupied the 
168.10  residence with the owner if the absence of the owner is due to 
168.11  one of the exceptions provided in this paragraph. 
168.12     (f) The assessor must not deny homestead treatment in whole 
168.13  or in part if: 
168.14     (1) in the case of a property owner who is not married, the 
168.15  owner is absent due to residence in a nursing home, boarding 
168.16  care facility, or an elderly assisted living facility property 
168.17  as defined in section 273.13, subdivision 25a, and the property 
168.18  is not otherwise occupied; or 
168.19     (2) in the case of a property owner who is married, the 
168.20  owner or the owner's spouse or both are absent due to residence 
168.21  in a nursing home, boarding care facility, or an elderly 
168.22  assisted living facility property as defined in section 273.13, 
168.23  subdivision 25a, and the property is not occupied or is occupied 
168.24  only by the owner's spouse. 
168.25     (g) If an individual is purchasing property with the intent 
168.26  of claiming it as a homestead and is required by the terms of 
168.27  the financing agreement to have a relative shown on the deed as 
168.28  a coowner, the assessor shall allow a full homestead 
168.29  classification.  This provision only applies to first-time 
168.30  purchasers, whether married or single, or to a person who had 
168.31  previously been married and is purchasing as a single individual 
168.32  for the first time.  The application for homestead benefits must 
168.33  be on a form prescribed by the commissioner and must contain the 
168.34  data necessary for the assessor to determine if full homestead 
168.35  benefits are warranted. 
168.36     (h) If residential or agricultural real estate is occupied 
169.1   and used for purposes of a homestead by a child of a deceased 
169.2   owner and the property is subject to jurisdiction of probate 
169.3   court, the child shall receive relative homestead classification 
169.4   under paragraph (c) or (d) to the same extent they would be 
169.5   entitled to it if the owner was still living, until the probate 
169.6   is completed.  For purposes of this paragraph, "child" includes 
169.7   a relationship by blood or by marriage. 
169.8      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
169.9   following final enactment. 
169.10     Sec. 17.  Minnesota Statutes 2002, section 273.13, 
169.11  subdivision 25, is amended to read: 
169.12     Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
169.13  estate containing four or more units and used or held for use by 
169.14  the owner or by the tenants or lessees of the owner as a 
169.15  residence for rental periods of 30 days or more.  Class 4a also 
169.16  includes hospitals licensed under sections 144.50 to 144.56, 
169.17  other than hospitals exempt under section 272.02, and contiguous 
169.18  property used for hospital purposes, without regard to whether 
169.19  the property has been platted or subdivided.  The market value 
169.20  of class 4a property has a class rate of 1.8 percent for taxes 
169.21  payable in 2002, 1.5 percent for taxes payable in 2003, and 1.25 
169.22  percent for taxes payable in 2004 and thereafter, except that 
169.23  class 4a property consisting of a structure for which 
169.24  construction commenced after June 30, 2001, has a class rate of 
169.25  1.25 percent of market value for taxes payable in 2003 and 
169.26  subsequent years. 
169.27     (b) Class 4b includes: 
169.28     (1) residential real estate containing less than four units 
169.29  that does not qualify as class 4bb, other than seasonal 
169.30  residential, and recreational property; 
169.31     (2) manufactured homes not classified under any other 
169.32  provision; 
169.33     (3) a dwelling, garage, and surrounding one acre of 
169.34  property on a nonhomestead farm classified under subdivision 23, 
169.35  paragraph (b) containing two or three units; and 
169.36     (4) unimproved property that is classified residential as 
170.1   determined under subdivision 33.  
170.2      The market value of class 4b property has a class rate of 
170.3   1.5 percent for taxes payable in 2002, and 1.25 percent for 
170.4   taxes payable in 2003 and thereafter. 
170.5      (c) Class 4bb includes: 
170.6      (1) nonhomestead residential real estate containing one 
170.7   unit, other than seasonal residential, and recreational 
170.8   property; and 
170.9      (2) a single family dwelling, garage, and surrounding one 
170.10  acre of property on a nonhomestead farm classified under 
170.11  subdivision 23, paragraph (b). 
170.12     Class 4bb property has the same class rates as class 1a 
170.13  property under subdivision 22. 
170.14     Property that has been classified as seasonal recreational 
170.15  residential recreational property at any time during which it 
170.16  has been owned by the current owner or spouse of the current 
170.17  owner does not qualify for class 4bb. 
170.18     (d) Class 4c property includes: 
170.19     (1) except as provided in subdivision 22, paragraph (c), 
170.20  real property devoted to temporary and seasonal residential 
170.21  occupancy for recreation purposes, including real property 
170.22  devoted to temporary and seasonal residential occupancy for 
170.23  recreation purposes and not devoted to commercial purposes for 
170.24  more than 250 days in the year preceding the year of 
170.25  assessment.  For purposes of this clause, property is devoted to 
170.26  a commercial purpose on a specific day if any portion of the 
170.27  property is used for residential occupancy, and a fee is charged 
170.28  for residential occupancy.  In order for a property to be 
170.29  classified as class 4c, seasonal residential recreational 
170.30  residential for commercial purposes, at least 40 percent of the 
170.31  annual gross lodging receipts related to the property must be 
170.32  from business conducted during 90 consecutive days and either 
170.33  (i) at least 60 percent of all paid bookings by lodging guests 
170.34  during the year must be for periods of at least two consecutive 
170.35  nights; or (ii) at least 20 percent of the annual gross receipts 
170.36  must be from charges for rental of fish houses, boats and 
171.1   motors, snowmobiles, downhill or cross-country ski equipment, or 
171.2   charges for marina services, launch services, and guide 
171.3   services, or the sale of bait and fishing tackle.  For purposes 
171.4   of this determination, a paid booking of five or more nights 
171.5   shall be counted as two bookings.  Class 4c also includes 
171.6   commercial use real property used exclusively for recreational 
171.7   purposes in conjunction with class 4c property devoted to 
171.8   temporary and seasonal residential occupancy for recreational 
171.9   purposes, up to a total of two acres, provided the property is 
171.10  not devoted to commercial recreational use for more than 250 
171.11  days in the year preceding the year of assessment and is located 
171.12  within two miles of the class 4c property with which it is 
171.13  used.  Class 4c property classified in this clause also includes 
171.14  the remainder of class 1c resorts provided that the entire 
171.15  property including that portion of the property classified as 
171.16  class 1c also meets the requirements for class 4c under this 
171.17  clause; otherwise the entire property is classified as class 3.  
171.18  Owners of real property devoted to temporary and seasonal 
171.19  residential occupancy for recreation purposes and all or a 
171.20  portion of which was devoted to commercial purposes for not more 
171.21  than 250 days in the year preceding the year of assessment 
171.22  desiring classification as class 1c or 4c, must submit a 
171.23  declaration to the assessor designating the cabins or units 
171.24  occupied for 250 days or less in the year preceding the year of 
171.25  assessment by January 15 of the assessment year.  Those cabins 
171.26  or units and a proportionate share of the land on which they are 
171.27  located will be designated class 1c or 4c as otherwise 
171.28  provided.  The remainder of the cabins or units and a 
171.29  proportionate share of the land on which they are located will 
171.30  be designated as class 3a.  The owner of property desiring 
171.31  designation as class 1c or 4c property must provide guest 
171.32  registers or other records demonstrating that the units for 
171.33  which class 1c or 4c designation is sought were not occupied for 
171.34  more than 250 days in the year preceding the assessment if so 
171.35  requested.  The portion of a property operated as a (1) 
171.36  restaurant, (2) bar, (3) gift shop, and (4) other nonresidential 
172.1   facility operated on a commercial basis not directly related to 
172.2   temporary and seasonal residential occupancy for recreation 
172.3   purposes shall not qualify for class 1c or 4c; 
172.4      (2) qualified property used as a golf course if: 
172.5      (i) it is open to the public on a daily fee basis.  It may 
172.6   charge membership fees or dues, but a membership fee may not be 
172.7   required in order to use the property for golfing, and its green 
172.8   fees for golfing must be comparable to green fees typically 
172.9   charged by municipal courses; and 
172.10     (ii) it meets the requirements of section 273.112, 
172.11  subdivision 3, paragraph (d). 
172.12     A structure used as a clubhouse, restaurant, or place of 
172.13  refreshment in conjunction with the golf course is classified as 
172.14  class 3a property; 
172.15     (3) real property up to a maximum of one acre of land owned 
172.16  by a nonprofit community service oriented organization; provided 
172.17  that the property is not used for a revenue-producing activity 
172.18  for more than six days in the calendar year preceding the year 
172.19  of assessment and the property is not used for residential 
172.20  purposes on either a temporary or permanent basis.  For purposes 
172.21  of this clause, a "nonprofit community service oriented 
172.22  organization" means any corporation, society, association, 
172.23  foundation, or institution organized and operated exclusively 
172.24  for charitable, religious, fraternal, civic, or educational 
172.25  purposes, and which is exempt from federal income taxation 
172.26  pursuant to section 501(c)(3), (10), or (19) of the Internal 
172.27  Revenue Code of 1986, as amended through December 31, 1990.  For 
172.28  purposes of this clause, "revenue-producing activities" shall 
172.29  include but not be limited to property or that portion of the 
172.30  property that is used as an on-sale intoxicating liquor or 3.2 
172.31  percent malt liquor establishment licensed under chapter 340A, a 
172.32  restaurant open to the public, bowling alley, a retail store, 
172.33  gambling conducted by organizations licensed under chapter 349, 
172.34  an insurance business, or office or other space leased or rented 
172.35  to a lessee who conducts a for-profit enterprise on the 
172.36  premises.  Any portion of the property which is used for 
173.1   revenue-producing activities for more than six days in the 
173.2   calendar year preceding the year of assessment shall be assessed 
173.3   as class 3a.  The use of the property for social events open 
173.4   exclusively to members and their guests for periods of less than 
173.5   24 hours, when an admission is not charged nor any revenues are 
173.6   received by the organization shall not be considered a 
173.7   revenue-producing activity; 
173.8      (4) post-secondary student housing of not more than one 
173.9   acre of land that is owned by a nonprofit corporation organized 
173.10  under chapter 317A and is used exclusively by a student 
173.11  cooperative, sorority, or fraternity for on-campus housing or 
173.12  housing located within two miles of the border of a college 
173.13  campus; 
173.14     (5) manufactured home parks as defined in section 327.14, 
173.15  subdivision 3; 
173.16     (6) real property that is actively and exclusively devoted 
173.17  to indoor fitness, health, social, recreational, and related 
173.18  uses, is owned and operated by a not-for-profit corporation, and 
173.19  is located within the metropolitan area as defined in section 
173.20  473.121, subdivision 2; 
173.21     (7) a leased or privately owned noncommercial aircraft 
173.22  storage hangar not exempt under section 272.01, subdivision 2, 
173.23  and the land on which it is located, provided that: 
173.24     (i) the land is on an airport owned or operated by a city, 
173.25  town, county, metropolitan airports commission, or group 
173.26  thereof; and 
173.27     (ii) the land lease, or any ordinance or signed agreement 
173.28  restricting the use of the leased premise, prohibits commercial 
173.29  activity performed at the hangar. 
173.30     If a hangar classified under this clause is sold after June 
173.31  30, 2000, a bill of sale must be filed by the new owner with the 
173.32  assessor of the county where the property is located within 60 
173.33  days of the sale; and 
173.34     (8) residential real estate, a portion of which is used by 
173.35  the owner for homestead purposes, and that is also a place of 
173.36  lodging, if all of the following criteria are met: 
174.1      (i) rooms are provided for rent to transient guests that 
174.2   generally stay for periods of 14 or fewer days; 
174.3      (ii) meals are provided to persons who rent rooms, the cost 
174.4   of which is incorporated in the basic room rate; 
174.5      (iii) meals are not provided to the general public except 
174.6   for special events on fewer than seven days in the calendar year 
174.7   preceding the year of the assessment; and 
174.8      (iv) the owner is the operator of the property. 
174.9   The market value subject to the 4c classification under this 
174.10  clause is limited to five rental units.  Any rental units on the 
174.11  property in excess of five, must be valued and assessed as class 
174.12  3a.  The portion of the property used for purposes of a 
174.13  homestead by the owner must be classified as class 1a property 
174.14  under subdivision 22. 
174.15     Class 4c property has a class rate of 1.5 percent of market 
174.16  value, except that (i) each parcel of seasonal residential 
174.17  recreational property not used for commercial purposes has the 
174.18  same class rates as class 4bb property, (ii) manufactured home 
174.19  parks assessed under clause (5) have the same class rate as 
174.20  class 4b property, (iii) commercial-use seasonal residential 
174.21  recreational property has a class rate of one percent for the 
174.22  first $500,000 of market value, which includes any market value 
174.23  receiving the one percent rate under subdivision 22, and 1.25 
174.24  percent for the remaining market value, (iv) the market value of 
174.25  property described in clause (4) has a class rate of one 
174.26  percent, (v) the market value of property described in clauses 
174.27  (2) and (6) has a class rate of 1.25 percent, and (vi) that 
174.28  portion of the market value of property in clause (8) qualifying 
174.29  for class 4c property has a class rate of 1.25 percent.  
174.30     (e) Class 4d property is qualifying low-income rental 
174.31  housing certified to the assessor by the housing finance agency 
174.32  under sections 273.126 and 462A.071.  Class 4d includes land in 
174.33  proportion to the total market value of the building that is 
174.34  qualifying low-income rental housing.  For all properties 
174.35  qualifying as class 4d, the market value determined by the 
174.36  assessor must be based on the normal approach to value using 
175.1   normal unrestricted rents. 
175.2      Class 4d property has a class rate of 0.9 percent for taxes 
175.3   payable in 2002, and one percent for taxes payable in 2003 and 
175.4   1.25 percent for taxes payable in 2004 and thereafter.  
175.5      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
175.6   following final enactment. 
175.7      Sec. 18.  Minnesota Statutes 2002, section 273.1398, 
175.8   subdivision 4b, is amended to read: 
175.9      Subd. 4b.  [COURT EXPENDITURES; MAINTENANCE OF EFFORT.] (a) 
175.10  Until the costs of court administration as defined under section 
175.11  480.183, subdivision 3, in a county have been transferred to the 
175.12  state, each county in a judicial district transferring court 
175.13  administration costs to state funding after July 1, 2001, shall 
175.14  budget for the funding of these costs an amount at least equal 
175.15  to the certified budget amount for calendar year 2001, increased 
175.16  by six percent for each year from 2001 to 2003 and by eight 
175.17  percent from 2004 to the year of the transfer.  The county shall 
175.18  budget, fund, and authorize expenditures not less than the 
175.19  amount calculated under this paragraph plus the temporary aid 
175.20  amount under subdivision 4c for maintenance of effort of 
175.21  administrative costs. 
175.22     (b) By July 15, 2001, the court shall certify to each 
175.23  county in the judicial district its cost of court administration 
175.24  as defined under section 480.183, subdivision 3, based on 2001 
175.25  budgets.  In making that determination, the court shall exclude 
175.26  the budget costs of the county for the following categories: 
175.27     (1) rent; 
175.28     (2) examiner of titles; 
175.29     (3) civil court appointed attorneys for civil matters; 
175.30     (4) hospitalization costs; and 
175.31     (5) cost of maintaining vital statistics. 
175.32     The amount of funding provided by a county for courts that 
175.33  is increased by the maintenance of effort requirement may not be 
175.34  used by a county to pay the costs described in clauses (1) to 
175.35  (5). 
175.36     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
176.1   following final enactment. 
176.2      Sec. 19.  Minnesota Statutes 2002, section 273.1398, 
176.3   subdivision 4d, is amended to read: 
176.4      Subd. 4d.  [AID OFFSET FOR OUT-OF-HOME PLACEMENT COSTS.] 
176.5   For aid payable in 2004, each county's aid under subdivision 2 
176.6   shall be permanently reduced by an amount equal to the county's 
176.7   2004 reimbursement for nonfederal expenditures for out-of-home 
176.8   placements, as provided in section 245.775, provided that 
176.9   payments will be made under section 477A.0123 in calendar year 
176.10  2004.  The counties shall provide all information requested by 
176.11  the commissioner of human services necessary to allow the 
176.12  commissioner to certify the previous three years' average 
176.13  nonfederal costs to the commissioner of revenue by July 15, 2004 
176.14  1, 2003.  The aid reduction under this subdivision must not 
176.15  exceed the difference between (1) the amount of aid calculated 
176.16  for the county for calendar year 2004 under subdivision 2, 
176.17  including any addition under section 477A.07, and (2) the amount 
176.18  of any aid reductions for the state takeover of courts contained 
176.19  in Laws 2001, First Special Session chapter 5, article 5. 
176.20     <b>[EFFECTIVE DATE.]</b> This section is effective for aids 
176.21  payable in 2004 and thereafter. 
176.22     Sec. 20.  Minnesota Statutes 2002, section 273.372, is 
176.23  amended to read: 
176.24     273.372 [PROCEEDINGS AND APPEALS; UTILITY OR RAILROAD 
176.25  VALUATIONS.] 
176.26     An appeal by a utility or railroad company concerning the 
176.27  exemption, valuation, or classification on of property for which 
176.28  the commissioner of revenue has provided the city or county 
176.29  assessor with commissioner's orders valuations by order, or for 
176.30  which the commissioner has recommended values to the city or 
176.31  county assessor, must be brought against the commissioner in tax 
176.32  court or in district court of the county where the property is 
176.33  located, and not against the county or taxing district where the 
176.34  property is located.  If the appeal to a court is of from an 
176.35  order of the commissioner, it must be brought under chapter 
176.36  271.  If the appeal is from the exemption, valuation, 
177.1   classification, or tax that results from implementation of the 
177.2   commissioner's order or recommendation, it must be brought under 
177.3   chapter 278, and the procedures provisions in that chapter 
177.4   apply, except that service shall be on the commissioner only and 
177.5   not on the county officials specified in section 278.01, 
177.6   subdivision 1.  This provision applies to the property contained 
177.7   under described in sections 273.33, 273.35, 273.36, and 273.37, 
177.8   but only if the appealed values have remained unchanged from 
177.9   those provided to the city or county by the commissioner.  If 
177.10  the exemption, valuation, or classification being appealed has 
177.11  been changed by the city or county, then the action must be 
177.12  brought under chapter 278 in the county where the property is 
177.13  located and proper service must be made upon the county 
177.14  officials as specified in section 278.01, subdivision 1. 
177.15     Upon filing of any appeal by a utility company or railroad 
177.16  against the commissioner, the commissioner shall give notice by 
177.17  first class mail to each county which would be affected by the 
177.18  appeal. 
177.19     Companies that submit the reports under section 270.82 or 
177.20  273.371 by the date specified in that section, or by the date 
177.21  specified by the commissioner in an extension, may appeal 
177.22  administratively to the commissioner under the procedures in 
177.23  section 270.11, subdivision 6, prior to bringing an action in 
177.24  tax court or in district court, however, instituting an 
177.25  administrative appeal with the commissioner does not change or 
177.26  modify the deadline in section 271.06 for appealing an order of 
177.27  the commissioner in tax court or the deadline in section 278.01 
177.28  for bringing an action filing a property tax claim or objection 
177.29  in tax court or district court. 
177.30     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
177.31  following final enactment. 
177.32     Sec. 21.  Minnesota Statutes 2002, section 273.42, 
177.33  subdivision 2, is amended to read: 
177.34     Subd. 2.  Owners of land that is an agricultural or 
177.35  nonagricultural homestead, nonhomestead agricultural land, 
177.36  rental residential property, and both commercial and 
178.1   noncommercial seasonal residential recreational property, as 
178.2   those terms are defined in section 273.13 listed on records of 
178.3   the county auditor or county treasurer over which runs a high 
178.4   voltage transmission line as defined in section 116C.52, 
178.5   subdivision 3 with a capacity of 200 kilovolts or more, except a 
178.6   high voltage transmission line the construction of which was 
178.7   commenced prior to July 1, 1974, shall receive a property tax 
178.8   credit in an amount determined by multiplying a fraction, the 
178.9   numerator of which is the length of high voltage transmission 
178.10  line which runs over that parcel and the denominator of which is 
178.11  the total length of that particular line running over all 
178.12  property within the city or township by ten percent of the 
178.13  transmission line tax revenue derived from the tax on that 
178.14  portion of the line within the city or township pursuant to 
178.15  section 273.36.  In the case of property owners in unorganized 
178.16  townships, the property tax credit shall be determined by 
178.17  multiplying a fraction, the numerator of which is the length of 
178.18  the qualifying high voltage transmission line which runs over 
178.19  the parcel and the denominator of which is the total length of 
178.20  the qualifying high voltage transmission line running over all 
178.21  property within all the unorganized townships within the county, 
178.22  by the total utility property tax credit fund amount available 
178.23  within the county for that year pursuant to subdivision 1.  
178.24  Where a right-of-way width is shared by more than one property 
178.25  owner, the numerator shall be adjusted by multiplying the length 
178.26  of line on the parcel by the proportion of the total width on 
178.27  the parcel owned by that property owner.  The amount of credit 
178.28  for which the property qualifies shall not exceed 20 percent of 
178.29  the total gross tax on the parcel prior to deduction of the 
178.30  state paid agricultural credit and the state paid homestead 
178.31  credit, provided that, if the property containing the 
178.32  right-of-way is included in a parcel which exceeds 40 acres, the 
178.33  total gross tax on the parcel shall be multiplied by a fraction, 
178.34  the numerator of which is the sum of the number of acres in each 
178.35  quarter-quarter section or portion thereof which contains a 
178.36  right-of-way and the denominator of which is the total number of 
179.1   acres in the parcel set forth on the tax statement, and the 
179.2   maximum credit shall be 20 percent of the product of that 
179.3   computation, prior to deduction of those credits.  The auditor 
179.4   of the county in which the affected parcel is located shall 
179.5   calculate the amount of the credit due for each parcel and 
179.6   transmit that information to the county treasurer.  The county 
179.7   auditor, in computing the credit received pursuant to section 
179.8   273.135, shall reduce the gross tax by the amount of the credit 
179.9   received pursuant to this section, unless the amount of the 
179.10  credit would be less than $10. 
179.11     If, after the county auditor has computed the credit to 
179.12  those qualifying property owners in unorganized townships, there 
179.13  is money remaining in the utility property tax credit fund, then 
179.14  that excess amount in the fund shall be returned to the general 
179.15  school fund of the county. 
179.16     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
179.17  following final enactment. 
179.18     Sec. 22.  Minnesota Statutes 2002, section 274.01, 
179.19  subdivision 1, is amended to read: 
179.20     Subdivision 1.  [ORDINARY BOARD; MEETINGS, DEADLINES, 
179.21  GRIEVANCES.] (a) The town board of a town, or the council or 
179.22  other governing body of a city, is the board of appeal and 
179.23  equalization except (1) in cities whose charters provide for a 
179.24  board of equalization or (2) in any city or town that has 
179.25  transferred its local board of review power and duties to the 
179.26  county board as provided in subdivision 3.  The county assessor 
179.27  shall fix a day and time when the board or the board of 
179.28  equalization shall meet in the assessment districts of the 
179.29  county.  Notwithstanding any law or city charter to the 
179.30  contrary, a city board of equalization shall be referred to as a 
179.31  board of appeal and equalization.  On or before February 15 of 
179.32  each year the assessor shall give written notice of the time to 
179.33  the city or town clerk.  Notwithstanding the provisions of any 
179.34  charter to the contrary, the meetings must be held between April 
179.35  1 and May 31 each year.  The clerk shall give published and 
179.36  posted notice of the meeting at least ten days before the date 
180.1   of the meeting.  
180.2      The board shall meet at the office of the clerk to review 
180.3   the assessment and classification of property in the town or 
180.4   city.  No changes in valuation or classification which are 
180.5   intended to correct errors in judgment by the county assessor 
180.6   may be made by the county assessor after the board has adjourned 
180.7   in those cities or towns that hold a local board of review; 
180.8   however, corrections of errors that are merely clerical in 
180.9   nature or changes that extend homestead treatment to property 
180.10  are permitted after adjournment until the tax extension date for 
180.11  that assessment year.  The changes must be fully documented and 
180.12  maintained in the assessor's office and must be available for 
180.13  review by any person.  A copy of the changes made during this 
180.14  period in those cities or towns that hold a local board of 
180.15  review must be sent to the county board no later than December 
180.16  31 of the assessment year.  
180.17     (b) The board shall determine whether the taxable property 
180.18  in the town or city has been properly placed on the list and 
180.19  properly valued by the assessor.  If real or personal property 
180.20  has been omitted, the board shall place it on the list with its 
180.21  market value, and correct the assessment so that each tract or 
180.22  lot of real property, and each article, parcel, or class of 
180.23  personal property, is entered on the assessment list at its 
180.24  market value.  No assessment of the property of any person may 
180.25  be raised unless the person has been duly notified of the intent 
180.26  of the board to do so.  On application of any person feeling 
180.27  aggrieved, the board shall review the assessment or 
180.28  classification, or both, and correct it as appears just.  The 
180.29  board may not make an individual market value adjustment or 
180.30  classification change that would benefit the property in cases 
180.31  where the owner or other person having control over the property 
180.32  will not permit the assessor to inspect the property and the 
180.33  interior of any buildings or structures.  
180.34     (c) A local board may reduce assessments upon petition of 
180.35  the taxpayer but the total reductions must not reduce the 
180.36  aggregate assessment made by the county assessor by more than 
181.1   one percent.  If the total reductions would lower the aggregate 
181.2   assessments made by the county assessor by more than one 
181.3   percent, none of the adjustments may be made.  The assessor 
181.4   shall correct any clerical errors or double assessments 
181.5   discovered by the board without regard to the one percent 
181.6   limitation.  
181.7      (d) A local board does not have authority to grant an 
181.8   exemption or to order property removed from the tax rolls. 
181.9      (e) A majority of the members may act at the meeting, and 
181.10  adjourn from day to day until they finish hearing the cases 
181.11  presented.  The assessor shall attend, with the assessment books 
181.12  and papers, and take part in the proceedings, but must not 
181.13  vote.  The county assessor, or an assistant delegated by the 
181.14  county assessor shall attend the meetings.  The board shall list 
181.15  separately, on a form appended to the assessment book, all 
181.16  omitted property added to the list by the board and all items of 
181.17  property increased or decreased, with the market value of each 
181.18  item of property, added or changed by the board, placed opposite 
181.19  the item.  The county assessor shall enter all changes made by 
181.20  the board in the assessment book.  
181.21     (e) (f) Except as provided in subdivision 3, if a person 
181.22  fails to appear in person, by counsel, or by written 
181.23  communication before the board after being duly notified of the 
181.24  board's intent to raise the assessment of the property, or if a 
181.25  person feeling aggrieved by an assessment or classification 
181.26  fails to apply for a review of the assessment or classification, 
181.27  the person may not appear before the county board of appeal and 
181.28  equalization for a review of the assessment or classification.  
181.29  This paragraph does not apply if an assessment was made after 
181.30  the local board meeting, as provided in section 273.01, or if 
181.31  the person can establish not having received notice of market 
181.32  value at least five days before the local board meeting.  
181.33     (f) (g) The local board must complete its work and adjourn 
181.34  within 20 days from the time of convening stated in the notice 
181.35  of the clerk, unless a longer period is approved by the 
181.36  commissioner of revenue.  No action taken after that date is 
182.1   valid.  All complaints about an assessment or classification 
182.2   made after the meeting of the board must be heard and determined 
182.3   by the county board of equalization.  A nonresident may, at any 
182.4   time, before the meeting of the board file written objections to 
182.5   an assessment or classification with the county assessor.  The 
182.6   objections must be presented to the board at its meeting by the 
182.7   county assessor for its consideration. 
182.8      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
182.9   following final enactment. 
182.10     Sec. 23.  Minnesota Statutes 2002, section 274.13, 
182.11  subdivision 1, is amended to read: 
182.12     Subdivision 1.  [MEMBERS; MEETINGS; RULES FOR EQUALIZING 
182.13  ASSESSMENTS.] The county commissioners, or a majority of them, 
182.14  with the county auditor, or, if the auditor cannot be present, 
182.15  the deputy county auditor, or, if there is no deputy, the court 
182.16  administrator of the district court, shall form a board for the 
182.17  equalization of the assessment of the property of the county, 
182.18  including the property of all cities whose charters provide for 
182.19  a board of equalization.  This board shall be referred to as the 
182.20  county board of appeal and equalization.  The board shall meet 
182.21  annually, on the date specified in section 274.14, at the office 
182.22  of the auditor.  Each member shall take an oath to fairly and 
182.23  impartially perform duties as a member.  The board shall examine 
182.24  and compare the returns of the assessment of property of the 
182.25  towns or districts, and equalize them so that each tract or lot 
182.26  of real property and each article or class of personal property 
182.27  is entered on the assessment list at its market value, subject 
182.28  to the following rules: 
182.29     (1) The board shall raise the valuation of each tract or 
182.30  lot of real property which in its opinion is returned below its 
182.31  market value to the sum believed to be its market value.  The 
182.32  board must first give notice of intention to raise the valuation 
182.33  to the person in whose name it is assessed, if the person is a 
182.34  resident of the county.  The notice must fix a time and place 
182.35  for a hearing.  
182.36     (2) The board shall reduce the valuation of each tract or 
183.1   lot which in its opinion is returned above its market value to 
183.2   the sum believed to be its market value. 
183.3      (3) The board shall raise the valuation of each class of 
183.4   personal property which in its opinion is returned below its 
183.5   market value to the sum believed to be its market value.  It 
183.6   shall raise the aggregate value of the personal property of 
183.7   individuals, firms, or corporations, when it believes that the 
183.8   aggregate valuation, as returned, is less than the market value 
183.9   of the taxable personal property possessed by the individuals, 
183.10  firms, or corporations, to the sum it believes to be the market 
183.11  value.  The board must first give notice to the persons of 
183.12  intention to do so.  The notice must set a time and place for a 
183.13  hearing. 
183.14     (4) The board shall reduce the valuation of each class of 
183.15  personal property that is returned above its market value to the 
183.16  sum it believes to be its market value.  Upon complaint of a 
183.17  party aggrieved, the board shall reduce the aggregate valuation 
183.18  of the individual's personal property, or of any class of 
183.19  personal property for which the individual is assessed, which in 
183.20  its opinion has been assessed at too large a sum, to the sum it 
183.21  believes was the market value of the individual's personal 
183.22  property of that class.  
183.23     (5) The board must not reduce the aggregate value of all 
183.24  the property of its county, as submitted to the county board of 
183.25  equalization, with the additions made by the auditor under this 
183.26  chapter, by more than one percent of its whole valuation.  The 
183.27  board may raise the aggregate valuation of real property, and of 
183.28  each class of personal property, of the county, or of any town 
183.29  or district of the county, when it believes it is below the 
183.30  market value of the property, or class of property, to the 
183.31  aggregate amount it believes to be its market value. 
183.32     (6) The board shall change the classification of any 
183.33  property which in its opinion is not properly classified. 
183.34     (7) The board does not have the authority to grant an 
183.35  exemption or to order property removed from the tax rolls. 
183.36     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
184.1   following final enactment. 
184.2      Sec. 24.  Minnesota Statutes 2002, section 275.025, 
184.3   subdivision 1, is amended to read: 
184.4      Subdivision 1.  [LEVY AMOUNT.] The state general levy is 
184.5   levied against commercial-industrial property and 
184.6   seasonal residential recreational property, as defined in this 
184.7   section.  The state general levy base amount is $592,000,000 for 
184.8   taxes payable in 2002.  For taxes payable in subsequent years, 
184.9   the levy base amount is increased each year by multiplying the 
184.10  levy base amount for the prior year by the sum of one plus the 
184.11  rate of increase, if any, in the implicit price deflator for 
184.12  government consumption expenditures and gross investment for 
184.13  state and local governments prepared by the Bureau of Economic 
184.14  Analysts of the United States Department of Commerce for the 
184.15  12-month period ending March 31 of the year prior to the year 
184.16  the taxes are payable.  The tax under this section is not 
184.17  treated as a local tax rate under section 469.177 and is not the 
184.18  levy of a governmental unit under chapters 276A and 473F.  
184.19  Beginning in fiscal year 2004, and in each year thereafter, the 
184.20  commissioner of finance shall deposit in an education reserve 
184.21  account, which account is hereby established, the increased 
184.22  amount of the state general levy received for deposit in the 
184.23  general fund for that year over the amount of the state general 
184.24  levy received for deposit in the general fund in fiscal year 
184.25  2003.  The amounts in the education reserve account do not lapse 
184.26  or cancel each year, but remain until appropriated by law for 
184.27  education aid or higher education funding. 
184.28     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
184.29  payable in 2004 and thereafter, except that the change from 
184.30  "seasonal recreational property" to "seasonal residential 
184.31  recreational property" is effective the day following final 
184.32  enactment. 
184.33     Sec. 25.  Minnesota Statutes 2002, section 275.025, 
184.34  subdivision 3, is amended to read: 
184.35     Subd. 3.  [SEASONAL RESIDENTIAL RECREATIONAL TAX CAPACITY.] 
184.36  For the purposes of this section, "seasonal residential 
185.1   recreational tax capacity" means the tax capacity of all class 
185.2   4c(1) property under section 273.13, subdivision 25, except that 
185.3   the first $76,000 of market value of each noncommercial class 
185.4   4c(1) property has a tax capacity for this purpose equal to 40 
185.5   percent of its tax capacity under section 273.13. 
185.6      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
185.7   following final enactment. 
185.8      Sec. 26.  Minnesota Statutes 2002, section 275.025, 
185.9   subdivision 4, is amended to read: 
185.10     Subd. 4.  [APPORTIONMENT AND LEVY OF STATE GENERAL TAX.] 
185.11  The state general tax must be distributed among the counties by 
185.12  applying a uniform rate to each county's commercial-industrial 
185.13  tax capacity and its seasonal residential recreational tax 
185.14  capacity.  Within each county, the tax must be levied by 
185.15  applying a uniform rate against commercial-industrial tax 
185.16  capacity and seasonal residential recreational tax capacity.  By 
185.17  On or before November 1 each year, the commissioner of revenue 
185.18  shall certify the a preliminary state general levy rate to each 
185.19  county auditor that must be used to prepare the notices of 
185.20  proposed property taxes for taxes payable in the following 
185.21  year.  By January 1 of each year, the commissioner shall certify 
185.22  the final state general levy rate to each county auditor that 
185.23  shall be used in spreading taxes.  
185.24     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
185.25  payable in 2004 and thereafter, except that the change from 
185.26  "seasonal recreational tax capacity" to "seasonal residential 
185.27  recreational tax capacity" is effective the day following final 
185.28  enactment. 
185.29     Sec. 27.  Minnesota Statutes 2002, section 276.10, is 
185.30  amended to read: 
185.31     276.10 [APPORTIONMENT AND DISTRIBUTION OF FUNDS.] 
185.32     On the settlement day determined in section 276.09 for each 
185.33  year, the county auditor and county treasurer shall distribute 
185.34  all undistributed funds in the treasury.  The funds must be 
185.35  apportioned as provided by law, and credited to the state, town, 
185.36  city, school district, special district and each county fund.  
186.1   Within 20 days after the distribution is completed, the county 
186.2   auditor shall report to the state auditor in the form prescribed 
186.3   by the state auditor.  The county auditor shall issue a warrant 
186.4   for the payment of money in the county treasury to the credit of 
186.5   the state, town, city, school district, or special districts on 
186.6   application of the persons entitled to receive the payment.  The 
186.7   county auditor may apply the local tax rate from the year before 
186.8   the year of distribution when apportioning and distributing 
186.9   delinquent tax proceeds, if the composition of the previous 
186.10  year's local tax rate between taxing districts is not 
186.11  significantly different from the local tax rate that existed for 
186.12  the year of the delinquency.  
186.13     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
186.14  payable in 2004 and thereafter. 
186.15     Sec. 28.  Minnesota Statutes 2002, section 276.11, 
186.16  subdivision 1, is amended to read: 
186.17     Subdivision 1.  [GENERALLY.] As soon as practical after the 
186.18  settlement day determined in section 276.09, the county 
186.19  treasurer shall pay to the state treasurer or the treasurer of a 
186.20  town, city, school district, or special district, on the warrant 
186.21  of the county auditor, all receipts of taxes levied by the 
186.22  taxing district and deliver up all orders and other evidences of 
186.23  indebtedness of the taxing district, taking triplicate receipts 
186.24  for them.  The treasurer shall file one of the receipts with the 
186.25  county auditor, and shall return one by mail on the day of its 
186.26  receipt to the clerk of the town, city, school district, or 
186.27  special district to which payment was made.  The clerk shall 
186.28  keep the receipt in the clerk's office.  Upon written request of 
186.29  the taxing district, to the extent practicable, the county 
186.30  treasurer shall make partial payments of amounts collected 
186.31  periodically in advance of the next settlement and 
186.32  distribution.  A statement prepared by the county treasurer must 
186.33  accompany each payment.  It must state the years for which taxes 
186.34  included in the payment were collected and, for each year, the 
186.35  amount of the taxes and any penalties on the tax.  Upon written 
186.36  request of a taxing district, except school districts, the 
187.1   county treasurer shall pay at least 70 percent of the estimated 
187.2   collection within 30 days after the settlement date determined 
187.3   in section 276.09.  Within seven business days after the due 
187.4   date, or 28 calendar days after the postmark date on the 
187.5   envelopes containing real or personal property tax statements, 
187.6   whichever is latest, the county treasurer shall pay to the 
187.7   treasurer of the school districts 50 percent of the estimated 
187.8   collections arising from taxes levied by and belonging to the 
187.9   school district, unless the school district elects to receive 50 
187.10  percent of the estimated collections arising from taxes levied 
187.11  by and belonging to the school district after making a 
187.12  proportionate reduction to reflect any loss in collections as 
187.13  the result of any delay in mailing tax statements.  In that 
187.14  case, 50 percent of those adjusted, estimated collections shall 
187.15  be paid by the county treasurer to the treasurer of the school 
187.16  district within seven business days of the due date.  The 
187.17  remaining 50 percent of the estimated collections must be paid 
187.18  to the treasurer of the school district within the next seven 
187.19  business days of the later of the dates in the preceding 
187.20  sentence, unless the school district elects to receive the 
187.21  remainder of its estimated collections after a proportionate 
187.22  reduction has been made to reflect any loss in collections as 
187.23  the result of any delay in mailing tax statements.  In that 
187.24  case, the remaining 50 percent of those adjusted, estimated 
187.25  collections shall be paid by the county treasurer to the 
187.26  treasurer of the school district within 14 days of the due 
187.27  date.  The treasurer shall pay the balance of the amounts 
187.28  collected to the state before June 30, or to a municipal 
187.29  corporation or other body within 60 days after the settlement 
187.30  date determined in section 276.09.  After 45 days interest at an 
187.31  annual rate of eight percent accrues and must be paid to the 
187.32  taxing district.  Interest must be paid upon appropriation from 
187.33  the general revenue fund of the county.  If not paid, it may be 
187.34  recovered by the taxing district, in a civil action. 
187.35     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
187.36  payable in 2004 and thereafter. 
188.1      Sec. 29.  [276.112] [STATE PROPERTY TAXES; COUNTY 
188.2   TREASURER.] 
188.3      On or before January 25 each year, for the period ending 
188.4   December 31 of the prior year, and on or before June 29 each 
188.5   year, for the period ending on the most recent settlement day 
188.6   determined in section 276.09, and on or before December 2 each 
188.7   year, for the period ending ten business days after November 15, 
188.8   the county treasurer must make full settlement with the county 
188.9   auditor according to sections 276.09, 276.10, and 276.111 for 
188.10  all receipts of state property taxes levied under section 
188.11  275.025, and must transmit those receipts to the commissioner of 
188.12  revenue by electronic means. 
188.13     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
188.14  following final enactment. 
188.15     Sec. 30.  Minnesota Statutes 2002, section 277.20, 
188.16  subdivision 2, is amended to read: 
188.17     Subd. 2.  [FILING OF LIEN FOR ENFORCEABILITY.] The lien 
188.18  imposed by subdivision 1 is not enforceable against any 
188.19  purchaser, mortgagee, pledgee, holder of a Uniform Commercial 
188.20  Code security interest, mechanic's lienor, or judgment lien 
188.21  creditor until a notice of lien has been filed by the county 
188.22  treasurer in the office of the county recorder of the county in 
188.23  which the property is situated, or, in the case of personal 
188.24  property belonging to an individual who is not a resident of 
188.25  this state, or that is a corporation, partnership, or other 
188.26  organization, in the office of the secretary of state.  Priority 
188.27  of a lien created under Laws 1991, chapter 291, article 15, 
188.28  shall be determined in accordance with the provisions of section 
188.29  507.34.  Liens filed in the office of the county recorder shall 
188.30  be filed with the state tax liens filed pursuant to section 
188.31  270.69, and the index shall indicate the name of the county for 
188.32  which the lien was filed.  If the land is registered, the notice 
188.33  of lien shall be filed in the office of the registrar of titles 
188.34  of the county in which the property is registered.  
188.35  Notwithstanding any other law to the contrary, the county 
188.36  treasurer is exempt from the payment of fees when the lien is 
189.1   offered for filing or recording; the fee for filing or recording 
189.2   the lien must be paid at the time the release of lien is offered 
189.3   for filing or recording.  Notwithstanding any law to the 
189.4   contrary, the fee for filing or recording the lien or the 
189.5   release of lien is $15.  
189.6      <b>[EFFECTIVE DATE.]</b> This section is effective for liens filed 
189.7   on or after the day following final enactment. 
189.8      Sec. 31.  Minnesota Statutes 2002, section 279.06, 
189.9   subdivision 1, is amended to read: 
189.10     Subdivision 1.  [LIST AND NOTICE.] Within five days after 
189.11  the filing of such list, the court administrator shall return a 
189.12  copy thereof to the county auditor, with a notice prepared and 
189.13  signed by the court administrator, and attached thereto, which 
189.14  may be substantially in the following form: 
189.15     State of Minnesota        )                            
189.16                               ) ss.                        
189.17     County of ............... )                            
189.18                                              District Court
189.19                               .......... Judicial District.
189.20     The state of Minnesota, to all persons, companies, or 
189.21  corporations who have or claim any estate, right, title, or 
189.22  interest in, claim to, or lien upon, any of the several parcels 
189.23  of land described in the list hereto attached: 
189.24     The list of taxes and penalties on real property for the 
189.25  county of ............................... remaining delinquent 
189.26  on the first Monday in January, ......., has been filed in the 
189.27  office of the court administrator of the district court of said 
189.28  county, of which that hereto attached is a copy.  Therefore, 
189.29  you, and each of you, are hereby required to file in the office 
189.30  of said court administrator, on or before the 20th day after the 
189.31  publication of this notice and list, your answer, in writing, 
189.32  setting forth any objection or defense you may have to the 
189.33  taxes, or any part thereof, upon any parcel of land described in 
189.34  the list, in, to, or on which you have or claim any estate, 
189.35  right, title, interest, claim, or lien, and, in default thereof, 
189.36  judgment will be entered against such parcel of land for the 
190.1   taxes on such list appearing against it, and for all penalties, 
190.2   interest, and costs.  Based upon said judgment, the land shall 
190.3   be sold to the state of Minnesota on the second Monday in May, 
190.4   .......  The period of redemption for all lands sold to the 
190.5   state at a tax judgment sale shall be three years from the date 
190.6   of sale to the state of Minnesota if the land is within an 
190.7   incorporated area unless it is: 
190.8      (a) nonagricultural homesteaded land as defined in section 
190.9   273.13, subdivision 22; 
190.10     (b) homesteaded agricultural land as defined in section 
190.11  273.13, subdivision 23, paragraph (a); 
190.12     (c) seasonal residential recreational land as defined in 
190.13  section 273.13, subdivisions 22, paragraph (c), and 25, 
190.14  paragraph (c) (d), clause (5) (1), in which event the period of 
190.15  redemption is five years from the date of sale to the state of 
190.16  Minnesota; 
190.17     (d) abandoned property and pursuant to section 281.173 a 
190.18  court order has been entered shortening the redemption period to 
190.19  five weeks; or 
190.20     (e) vacant property as described under section 281.174, 
190.21  subdivision 2, and for which a court order is entered shortening 
190.22  the redemption period under section 281.174. 
190.23     The period of redemption for all other lands sold to the 
190.24  state at a tax judgment sale shall be five years from the date 
190.25  of sale.  
190.26     Inquiries as to the proceedings set forth above can be made 
190.27  to the county auditor of ..... county whose address is ..... .  
190.28      (Signed) ............................................., 
190.29      Court Administrator of the District Court of the County 
190.30      of .................................................... 
190.31      (Here insert list.) 
190.32     The list referred to in the notice shall be substantially 
190.33  in the following form: 
190.34     List of real property for the county of 
190.35  ......................., on which taxes remain delinquent on the 
190.36  first Monday in January, .......: 
191.1                         Town of (Fairfield), 
191.2                      Township (40), Range (20), 
191.3    Names (and 
191.4    Current Filed 
191.5    Addresses) for 
191.6    the Taxpayers 
191.7    and Fee Owners 
191.8    and in Addition 
191.9    Those Parties 
191.10   Who Have Filed 
191.11   Their Addresses                            Tax 
191.12   Pursuant to     Subdivision of            Parcel   Total Tax 
191.13   section 276.041    Section       Section  Number  and Penalty
191.14                                                       $ cts.
191.15   John Jones  S.E. 1/4 of S.W. 1/4    10    23101       2.20  
191.16   (825 Fremont  
191.17   Fairfield, MN 
191.18   55000) 
191.19   Bruce Smith  That part of N.E. 1/4 
191.20   (2059 Hand   of S.W. 1/4 desc. as 
191.21   Fairfield,   follows:  Beg. at the 
191.22   MN 55000)    S.E. corner of said 
191.23   and          N.E. 1/4 of S.W. 1/4;  
191.24   Fairfield    thence N. along the E.  
191.25   State Bank   line of said N.E. 1/4 
191.26   (100 Main    of S.W. 1/4 a distance 
191.27   Street       of 600 ft.; thence W. 
191.28   Fairfield,   parallel with the S. 
191.29   MN 55000)    line of said N.E. 1/4 
191.30                of S.W. 1/4 a distance 
191.31                of 600 ft.; thence S. 
191.32                parallel with said E. 
191.33                line a distance of 600 
191.34                ft. to S. line of said 
191.35                N.E. 1/4 of S.W. 1/4;
191.36                thence E. along said S. 
192.1                 line a distance of 600 
192.2                 ft. to the point of 
192.3                 beg. ...............    21    33211       3.15  
192.4      As to platted property, the form of heading shall conform 
192.5   to circumstances and be substantially in the following form:  
192.6                         City of (Smithtown) 
192.7                   Brown's Addition, or Subdivision 
192.8    Names (and 
192.9    Current Filed 
192.10   Addresses) for 
192.11   the Taxpayers 
192.12   and Fee Owners 
192.13   and in Addition 
192.14   Those Parties 
192.15   Who have Filed 
192.16   Their Addresses                         Tax 
192.17   Pursuant to                            Parcel      Total Tax 
192.18   section 276.041     Lot     Block      Number     and Penalty
192.19                                                       $ cts.
192.20   John Jones           15         9      58243          2.20 
192.21   (825 Fremont 
192.22   Fairfield, 
192.23   MN 55000) 
192.24   Bruce Smith          16         9      58244          3.15 
192.25   (2059 Hand 
192.26   Fairfield, 
192.27   MN 55000) 
192.28   and 
192.29   Fairfield 
192.30   State Bank 
192.31   (100 Main Street 
192.32   Fairfield, 
192.33   MN 55000) 
192.34     The names, descriptions, and figures employed in 
192.35  parentheses in the above forms are merely for purposes of 
192.36  illustration. 
193.1      The name of the town, township, range or city, and addition 
193.2   or subdivision, as the case may be, shall be repeated at the 
193.3   head of each column of the printed lists as brought forward from 
193.4   the preceding column.  
193.5      Errors in the list shall not be deemed to be a material 
193.6   defect to affect the validity of the judgment and sale. 
193.7      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
193.8   following final enactment. 
193.9      Sec. 32.  Minnesota Statutes 2002, section 281.17, is 
193.10  amended to read: 
193.11     281.17 [PERIOD FOR REDEMPTION.] 
193.12     Except for properties for which the period of redemption 
193.13  has been limited under sections 281.173 and 281.174, the 
193.14  following periods for redemption apply. 
193.15     The period of redemption for all lands sold to the state at 
193.16  a tax judgment sale shall be three years from the date of sale 
193.17  to the state of Minnesota if the land is within an incorporated 
193.18  area unless it is:  (a) nonagricultural homesteaded land as 
193.19  defined in section 273.13, subdivision 22; (b) homesteaded 
193.20  agricultural land as defined in section 273.13, subdivision 23, 
193.21  paragraph (a); or (c) seasonal residential recreational land as 
193.22  defined in section 273.13, subdivision 22, paragraph (c), or 25, 
193.23  paragraph (d), clause (1), for which the period of redemption is 
193.24  five years from the date of sale to the state of Minnesota. 
193.25     The period of redemption for homesteaded lands as defined 
193.26  in section 273.13, subdivision 22, located in a targeted 
193.27  neighborhood as defined in Laws 1987, chapter 386, article 6, 
193.28  section 4, and sold to the state at a tax judgment sale is three 
193.29  years from the date of sale.  The period of redemption for all 
193.30  lands located in a targeted neighborhood as defined in Laws 
193.31  1987, chapter 386, article 6, section 4, except (1) homesteaded 
193.32  lands as defined in section 273.13, subdivision 22, and (2) for 
193.33  periods of redemption beginning after June 30, 1991, but before 
193.34  July 1, 1996, lands located in the Loring Park targeted 
193.35  neighborhood on which a notice of lis pendens has been served, 
193.36  and sold to the state at a tax judgment sale is one year from 
194.1   the date of sale. 
194.2      The period of redemption for all real property constituting 
194.3   a mixed municipal solid waste disposal facility that is a 
194.4   qualified facility under section 115B.39, subdivision 1, is one 
194.5   year from the date of the sale to the state of Minnesota. 
194.6      The period of redemption for all other lands sold to the 
194.7   state at a tax judgment sale shall be five years from the date 
194.8   of sale, except that the period of redemption for nonhomesteaded 
194.9   agricultural land as defined in section 273.13, subdivision 23, 
194.10  paragraph (b), shall be two years from the date of sale if at 
194.11  that time that property is owned by a person who owns one or 
194.12  more parcels of property on which taxes are delinquent, and the 
194.13  delinquent taxes are more than 25 percent of the prior year's 
194.14  school district levy. 
194.15     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
194.16  following final enactment. 
194.17     Sec. 33.  Minnesota Statutes 2002, section 282.01, 
194.18  subdivision 1b, is amended to read: 
194.19     Subd. 1b.  [CONVEYANCE; TARGETED NEIGHBORHOOD LANDS.] (a) 
194.20  Notwithstanding subdivision 1a, in the case of tax-forfeited 
194.21  lands located in a targeted neighborhood, as defined in section 
194.22  469.201, subdivision 10, and section 473.121, subdivision 2, the 
194.23  commissioner of revenue shall convey by deed in the name of the 
194.24  state any tract of tax-forfeited land held in trust in favor of 
194.25  the taxing districts, to a political subdivision that submits an 
194.26  application to the commissioner of revenue and, in the case of 
194.27  targeted neighborhoods located outside of the metropolitan area 
194.28  as defined in section 473.121, the recommendation of the county 
194.29  board. 
194.30     (b) The application under paragraph (a) must include a 
194.31  statement of facts as to the use to be made of the tract, the 
194.32  need therefor, and a resolution, adopted by the governing body 
194.33  of the political subdivision, finding that the conveyance of a 
194.34  tract of tax-forfeited land to the political subdivision is 
194.35  necessary to provide for the redevelopment of land as productive 
194.36  taxable property.  Deeds of conveyance issued under paragraph 
195.1   (a) are not conditioned on continued use of the property for the 
195.2   use stated in the application.  
195.3      <b>[EFFECTIVE DATE.]</b> This section is effective for deeds 
195.4   issued on or after July 1, 2003. 
195.5      Sec. 34.  Minnesota Statutes 2002, section 282.01, 
195.6   subdivision 7a, is amended to read: 
195.7      Subd. 7a.  [CITY SALES; ALTERNATE PROCEDURES.] Land located 
195.8   in a home rule charter or statutory city, or in a town which 
195.9   cannot be improved because of noncompliance with local 
195.10  ordinances regarding minimum area, shape, frontage or access may 
195.11  be sold by the county auditor pursuant to this subdivision if 
195.12  the auditor determines that a nonpublic sale will encourage the 
195.13  approval of sale of the land by the city or town and promote its 
195.14  return to the tax rolls.  If the physical characteristics of the 
195.15  land indicate that its highest and best use will be achieved by 
195.16  combining it with an adjoining parcel and the city or town has 
195.17  not adopted a local ordinance governing minimum area, shape, 
195.18  frontage, or access, the land may also be sold pursuant to this 
195.19  subdivision.  If the property consists of an undivided interest 
195.20  in land or land and improvements, the property may also be sold 
195.21  to the other owners under this subdivision.  The sale of land 
195.22  pursuant to this subdivision shall be subject to any conditions 
195.23  imposed by the county board pursuant to section 282.03.  The 
195.24  governing body of the city or town may recommend to the county 
195.25  board conditions to be imposed on the sale.  The county auditor 
195.26  may restrict the sale to owners of lands adjoining the land to 
195.27  be sold.  The county auditor shall conduct the sale by sealed 
195.28  bid or may select another means of sale.  The land shall be sold 
195.29  to the highest bidder but in no event shall the land be sold for 
195.30  less than its appraised value.  All owners of land adjoining the 
195.31  land to be sold shall be given a written notice at least 30 days 
195.32  prior to the sale.  
195.33     This subdivision shall be liberally construed to encourage 
195.34  the sale and utilization of tax-forfeited land, to eliminate 
195.35  nuisances and dangerous conditions and to increase compliance 
195.36  with land use ordinances. 
196.1      <b>[EFFECTIVE DATE.]</b> This section is effective for sales 
196.2   occurring on or after the day following final enactment. 
196.3      Sec. 35.  Minnesota Statutes 2002, section 282.08, is 
196.4   amended to read: 
196.5      282.08 [APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.] 
196.6      The net proceeds from the sale or rental of any parcel of 
196.7   forfeited land, or from the sale of products from the forfeited 
196.8   land, must be apportioned by the county auditor to the taxing 
196.9   districts interested in the land, as follows: 
196.10     (1) the amounts necessary to pay the state general tax levy 
196.11  against the parcel for taxes payable in the year for which the 
196.12  tax judgment was entered, and for each subsequent payable year 
196.13  up to and including the year of forfeiture, must be apportioned 
196.14  to the state; 
196.15     (2) the portion required to pay any amounts included in the 
196.16  appraised value under section 282.01, subdivision 3, as 
196.17  representing increased value due to any public improvement made 
196.18  after forfeiture of the parcel to the state, but not exceeding 
196.19  the amount certified by the clerk of the municipality must be 
196.20  apportioned to the municipal subdivision entitled to it; 
196.21     (2) (3) the portion required to pay any amount included in 
196.22  the appraised value under section 282.019, subdivision 5, 
196.23  representing increased value due to response actions taken after 
196.24  forfeiture of the parcel to the state, but not exceeding the 
196.25  amount of expenses certified by the pollution control agency or 
196.26  the commissioner of agriculture, must be apportioned to the 
196.27  agency or the commissioner of agriculture and deposited in the 
196.28  fund from which the expenses were paid; 
196.29     (3) (4) the portion of the remainder required to discharge 
196.30  any special assessment chargeable against the parcel for 
196.31  drainage or other purpose whether due or deferred at the time of 
196.32  forfeiture, must be apportioned to the municipal subdivision 
196.33  entitled to it; and 
196.34     (4) (5) any balance must be apportioned as follows: 
196.35     (i) The county board may annually by resolution set aside 
196.36  no more than 30 percent of the receipts remaining to be used for 
197.1   timber development on tax-forfeited land and dedicated memorial 
197.2   forests, to be expended under the supervision of the county 
197.3   board.  It must be expended only on projects approved by the 
197.4   commissioner of natural resources. 
197.5      (ii) The county board may annually by resolution set aside 
197.6   no more than 20 percent of the receipts remaining to be used for 
197.7   the acquisition and maintenance of county parks or recreational 
197.8   areas as defined in sections 398.31 to 398.36, to be expended 
197.9   under the supervision of the county board. 
197.10     (iii) Any balance remaining must be apportioned as 
197.11  follows:  county, 40 percent; town or city, 20 percent; and 
197.12  school district, 40 percent, provided, however, that in 
197.13  unorganized territory that portion which would have accrued to 
197.14  the township must be administered by the county board of 
197.15  commissioners. 
197.16     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
197.17  payable in 2004 and thereafter. 
197.18     Sec. 36.  Minnesota Statutes 2002, section 290C.02, 
197.19  subdivision 3, is amended to read: 
197.20     Subd. 3.  [CLAIMANT.] "Claimant" means a person, as that 
197.21  term is defined in section 290.01, subdivision 2, who owns 
197.22  forest land in Minnesota and files an application authorized by 
197.23  the Sustainable Forest Incentive Act.  For purposes of section 
197.24  290C.11, claimant also includes any person bound by the covenant 
197.25  required in section 290C.04.  No more than one claimant is 
197.26  entitled to a payment under this chapter with respect to any 
197.27  tract, parcel, or piece of land enrolled under this chapter that 
197.28  has been assigned the same parcel identification number.  When 
197.29  enrolled forest land is owned by two or more persons, the owners 
197.30  must determine between them which person may claim the payments 
197.31  provided under sections 290C.01 to 290C.11. 
197.32     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
197.33  following final enactment. 
197.34     Sec. 37.  Minnesota Statutes 2002, section 290C.02, 
197.35  subdivision 7, is amended to read: 
197.36     Subd. 7.  [FOREST MANAGEMENT PLAN.] "Forest management 
198.1   plan" means a written document providing a framework for 
198.2   site-specific healthy, productive, and sustainable forest 
198.3   resources.  A forest management plan must include at least the 
198.4   following:  (i) owner-specific forest management goals for the 
198.5   property land; (ii) a reliable field inventory of the individual 
198.6   forest cover types, their age, and density; (iii) a description 
198.7   of the soil type and quality; (iv) an aerial photo and/or map of 
198.8   the vegetation and other natural features of the property land 
198.9   clearly indicating the boundaries of the property land and of 
198.10  the forest land; (v) the proposed future conditions of the 
198.11  property land; (vi) prescriptions to meet proposed future 
198.12  conditions of the property land; (vii) a recommended timetable 
198.13  for implementing the prescribed activities; and (viii) a legal 
198.14  description of the parcels land encompassing the parcels 
198.15  included in the plan.  All management activities prescribed in a 
198.16  plan must be in accordance with the recommended timber 
198.17  harvesting and forest management guidelines.  The commissioner 
198.18  of natural resources shall provide a framework for plan content 
198.19  and updating and revising plans. 
198.20     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
198.21  following final enactment. 
198.22     Sec. 38.  Minnesota Statutes 2002, section 290C.03, is 
198.23  amended to read: 
198.24     290C.03 [ELIGIBILITY REQUIREMENTS.] 
198.25     (a) Property Land may be enrolled in the sustainable forest 
198.26  incentive program under this chapter if all of the following 
198.27  conditions are met: 
198.28     (1) property the land consists of at least 20 contiguous 
198.29  acres and at least 50 percent of the land must meet the 
198.30  definition of forest land in section 88.01, subdivision 7, 
198.31  during the enrollment; 
198.32     (2) a forest management plan for the property land must be 
198.33  prepared by an approved plan writer and implemented during the 
198.34  period in which the land is enrolled; 
198.35     (3) timber harvesting and forest management guidelines must 
198.36  be used in conjunction with any timber harvesting or forest 
199.1   management activities conducted on the land during the period in 
199.2   which the land is enrolled; 
199.3      (4) the property land must be enrolled for a minimum of 
199.4   eight years; 
199.5      (5) there are no delinquent property taxes on the property 
199.6   land; and 
199.7      (6) claimants enrolling more than 1,920 acres in the 
199.8   sustainable forest incentive program must allow year-round, 
199.9   nonmotorized access to fish and wildlife resources on enrolled 
199.10  land except within one-fourth mile of a permanent dwelling or 
199.11  during periods of high fire hazard as determined by the 
199.12  commissioner of natural resources. 
199.13     (b) Claimants required to allow access under paragraph (a), 
199.14  clause (6), do not by that action: 
199.15     (1) extend any assurance that the land is safe for any 
199.16  purpose; 
199.17     (2) confer upon the person the legal status of an invitee 
199.18  or licensee to whom a duty of care is owed; or 
199.19     (3) assume responsibility for or incur liability for any 
199.20  injury to the person or property caused by an act or omission of 
199.21  the person. 
199.22     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
199.23  following final enactment. 
199.24     Sec. 39.  Minnesota Statutes 2002, section 290C.07, is 
199.25  amended to read: 
199.26     290C.07 [CALCULATION OF INCENTIVE PAYMENT.] 
199.27     An approved claimant under the sustainable forest incentive 
199.28  program is eligible to receive an annual payment.  The payment 
199.29  shall equal the greater of: 
199.30     (1) the difference between the property tax that would be 
199.31  paid on the property land using the previous year's statewide 
199.32  average total township tax rate and the class rate for class 2b 
199.33  timberland under section 273.13, subdivision 23, paragraph (b), 
199.34  if the property land were valued at (i) the average statewide 
199.35  timberland market value per acre calculated under section 
199.36  290C.06, and (ii) the average statewide timberland current use 
200.1   value per acre calculated under section 290C.02, subdivision 5; 
200.2      (2) two-thirds of the property tax amount determined by 
200.3   using the previous year's statewide average total township tax 
200.4   rate, the estimated market value per acre as calculated in 
200.5   section 290C.06, and the class rate for 2b timberland under 
200.6   section 273.13, subdivision 23, paragraph (b); or 
200.7      (3) $1.50 per acre for each acre enrolled in the 
200.8   sustainable forest incentive program. 
200.9      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
200.10  following final enactment. 
200.11     Sec. 40.  Minnesota Statutes 2002, section 290C.09, is 
200.12  amended to read: 
200.13     290C.09 [REMOVAL FOR PROPERTY TAX DELINQUENCY.] 
200.14     The commissioner shall immediately remove any property land 
200.15  enrolled in the sustainable forest incentive program for which 
200.16  taxes are determined to be delinquent as provided in chapter 279 
200.17  and shall notify the claimant of such action.  Lands terminated 
200.18  from the sustainable forest incentive program under this section 
200.19  are not entitled to any payments provided in this chapter and 
200.20  are subject to removal penalties prescribed in section 290C.11.  
200.21  The claimant has 60 days from the receipt of notice from the 
200.22  commissioner under this section to pay the delinquent taxes.  If 
200.23  the delinquent taxes are paid within this 60-day period, the 
200.24  lands shall be reinstated in the program as if they had not been 
200.25  withdrawn and without the payment of a penalty. 
200.26     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
200.27  following final enactment. 
200.28     Sec. 41.  Minnesota Statutes 2002, section 290C.10, is 
200.29  amended to read: 
200.30     290C.10 [WITHDRAWAL PROCEDURES.] 
200.31     An approved claimant under the sustainable forest incentive 
200.32  program for a minimum of four years may notify the commissioner 
200.33  of the intent to terminate enrollment.  Within 90 days of 
200.34  receipt of notice to terminate enrollment, the commissioner 
200.35  shall inform the claimant in writing, acknowledging receipt of 
200.36  this notice and indicating the effective date of termination 
201.1   from the sustainable forest incentive program.  Termination of 
201.2   enrollment in the sustainable forest incentive program occurs on 
201.3   January 1 of the fifth calendar year that begins after receipt 
201.4   by the commissioner of the termination notice.  After the 
201.5   commissioner issues an effective date of termination, a claimant 
201.6   wishing to continue the property's land's enrollment in the 
201.7   sustainable forest incentive program beyond the termination date 
201.8   must apply for enrollment as prescribed in section 290C.04.  A 
201.9   claimant who withdraws a parcel of land from this program may 
201.10  not reenroll the parcel for a period of three years.  Within 90 
201.11  days after the termination date, the commissioner shall execute 
201.12  and acknowledge a document releasing the land from the covenant 
201.13  required under this chapter.  The document must be mailed to the 
201.14  claimant and is entitled to be recorded.  The commissioner may 
201.15  allow early withdrawal from the Sustainable Forest Incentive Act 
201.16  without penalty in cases of condemnation for a public purpose 
201.17  notwithstanding the provisions of this section. 
201.18     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
201.19  following final enactment. 
201.20     Sec. 42.  Minnesota Statutes 2002, section 290C.11, is 
201.21  amended to read: 
201.22     290C.11 [PENALTIES FOR REMOVAL.] 
201.23     (a) If the commissioner determines that property land 
201.24  enrolled in the sustainable forest incentive program is in 
201.25  violation of the conditions for enrollment as specified in 
201.26  section 290C.03, the commissioner shall notify the claimant of 
201.27  the intent to remove all enrolled land from the sustainable 
201.28  forest incentive program.  The claimant has 60 days to appeal 
201.29  this determination. The appeal must be made in writing to the 
201.30  commissioner, who shall, within 60 days, notify the claimant as 
201.31  to the outcome of the appeal.  Within 60 days after the 
201.32  commissioner denies an appeal, or within 120 days after the 
201.33  commissioner received a written appeal if the commissioner has 
201.34  not made a determination in that time, the owner may appeal to 
201.35  tax court under chapter 271 as if the appeal is from an order of 
201.36  the commissioner. 
202.1      (b) If the commissioner determines the property land is to 
202.2   be removed from the sustainable forest incentive program, the 
202.3   claimant is liable for payment to the commissioner in the amount 
202.4   equal to the payments received under this chapter for the 
202.5   previous four-year period, plus interest.  The claimant has 90 
202.6   days to satisfy the payment for removal of land from the 
202.7   sustainable forest incentive program under this section.  If the 
202.8   penalty is not paid within the 90-day period under this 
202.9   paragraph, the commissioner shall certify the amount to the 
202.10  county auditor for collection as a part of the general ad 
202.11  valorem real property taxes on the land in the following taxes 
202.12  payable year.  
202.13     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
202.14  following final enactment. 
202.15     Sec. 43.  [290C.12] [DEATH OF CLAIMANT.] 
202.16     Within one year after the death of the claimant, the 
202.17  claimant's heir, devisee, or estate must either: 
202.18     (1) notify the commissioner of election to terminate 
202.19  enrollment in the sustainable forest incentive program; or 
202.20     (2) make an application under this chapter to continue 
202.21  enrollment of the land in the program.  
202.22     Upon notification under clause (1), the commissioner shall 
202.23  terminate the enrollment and issue a document releasing the land 
202.24  from the covenant as provided in section 290C.04, paragraph 
202.25  (c).  Penalties under section 290C.11 shall not apply.  If the 
202.26  application under clause (2) is approved, the land is enrolled 
202.27  in the program without a break.  If the commissioner does not 
202.28  receive notification within one year after the date of death, 
202.29  enrollment in the program shall be terminated and penalties 
202.30  under section 290C.11 shall not apply. 
202.31     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
202.32  following final enactment, except in the case of claimants dying 
202.33  prior to the day following final enactment, heirs, devisees, or 
202.34  estates may make the election either six months after the 
202.35  effective date of this provision or one year after the death of 
202.36  the claimant, whichever is later. 
203.1      Sec. 44.  Minnesota Statutes 2002, section 469.1792, 
203.2   subdivision 3, is amended to read: 
203.3      Subd. 3.  [ACTIONS AUTHORIZED.] (a) An authority with a 
203.4   district qualifying under this section may take either or both 
203.5   of the following actions for any or all of its preexisting 
203.6   districts: 
203.7      (1) the authority may elect that the original local tax 
203.8   rate under section 469.177, subdivision 1a, does not apply to 
203.9   the district; and 
203.10     (2) the authority may elect the fiscal disparities 
203.11  contribution will be computed under section 469.177, subdivision 
203.12  3, paragraph (a), regardless of the election that was made for 
203.13  the district. 
203.14     (b) The authority may take action under this subdivision 
203.15  only after the municipality approves the action, by resolution, 
203.16  after notice and public hearing in the manner provided under 
203.17  section 469.175, subdivision 2.  To be effective for taxes 
203.18  payable in the following year, the resolution must be adopted 
203.19  and the county auditor must be notified of the adoption on or 
203.20  before July 1. 
203.21     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
203.22  payable in 2004 and thereafter. 
203.23     Sec. 45.  Minnesota Statutes 2002, section 473F.07, 
203.24  subdivision 4, is amended to read: 
203.25     Subd. 4.  [DISTRIBUTION NET TAX CAPACITY.] The 
203.26  administrative auditor shall determine the proportion which the 
203.27  index of each municipality bears to the sum of the indices of 
203.28  all municipalities and shall then multiply this proportion in 
203.29  the case of each municipality, by the areawide net tax capacity, 
203.30  provided that if the distribution net tax capacity for a 
203.31  municipality is less than 95 percent of the municipality's 
203.32  previous year distribution net tax capacity, and more than ten 
203.33  percent of the municipality's fiscal capacity consists of 
203.34  manufactured home property, the municipality's distribution net 
203.35  tax capacity will be increased to 95 percent of the previous 
203.36  year net tax capacity and the distribution net tax capacity of 
204.1   other municipalities in the area will be proportionately reduced.
204.2      <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
204.3   payable in 2004 and subsequent years. 
204.4      Sec. 46.  Minnesota Statutes 2002, section 477A.011, 
204.5   subdivision 30, is amended to read: 
204.6      Subd. 30.  [PRE-1940 HOUSING PERCENTAGE.] "Pre-1940 housing 
204.7   percentage" for a city is 100 times the most recent 1990 federal 
204.8   census count of all housing units in the city built before 1940, 
204.9   divided by the total number of all housing units in the city.  
204.10  Housing units includes both occupied and vacant housing units as 
204.11  defined by the federal census. 
204.12     <b>[EFFECTIVE DATE.]</b> This section is effective for aids 
204.13  payable in 2003 and thereafter. 
204.14     Sec. 47.  Minnesota Statutes 2002, section 515B.1-116, is 
204.15  amended to read: 
204.16     515B.1-116 [RECORDING.] 
204.17     (a) A declaration, bylaws, any amendment to a declaration 
204.18  or bylaws, and any other instrument affecting a common interest 
204.19  community shall be entitled to be recorded.  In those counties 
204.20  which have a tract index, the county recorder shall enter the 
204.21  declaration in the tract index for each unit affected.  The 
204.22  registrar of titles shall file the declaration in accordance 
204.23  with section 508.351 or 508A.351. 
204.24     (b) The recording officer shall upon request promptly 
204.25  assign a number (CIC number) to a common interest community to 
204.26  be formed or to a common interest community resulting from the 
204.27  merger of two or more common interest communities. 
204.28     (c) Documents recorded pursuant to this chapter shall in 
204.29  the case of registered land be filed, and references to the 
204.30  recording of documents shall mean filed in the case of 
204.31  registered land. 
204.32     (d) Subject to any specific requirements of this chapter, 
204.33  if a recorded document relating to a common interest community 
204.34  purports to require a certain vote or signatures approving any 
204.35  restatement or amendment of the document by a certain number or 
204.36  percentage of unit owners or secured parties, and if the 
205.1   amendment or restatement is to be recorded pursuant to this 
205.2   chapter, an affidavit of the president or secretary of the 
205.3   association stating that the required vote or signatures have 
205.4   been obtained shall be attached to the document to be recorded 
205.5   and shall constitute prima facie evidence of the representations 
205.6   contained therein. 
205.7      (e) If a common interest community is located on registered 
205.8   land, the recording fee for any document affecting two or more 
205.9   units shall be the then-current fee for registering the document 
205.10  on the certificates of title for the first ten affected 
205.11  certificates and one-third of the then-current fee for each 
205.12  additional affected certificate.  This provision shall not apply 
205.13  to recording fees for deeds of conveyance, with the exception of 
205.14  deeds given pursuant to sections 515B.2-119 and 515B.3-112. 
205.15     (f) Except as permitted under this subsection, a recording 
205.16  officer shall not file or record a declaration creating a new 
205.17  common interest community, unless the county treasurer has 
205.18  certified that the property taxes payable in the current year 
205.19  for the real estate included in the proposed common interest 
205.20  community have been paid.  This certification is in addition to 
205.21  the certification for delinquent taxes required by section 
205.22  272.12.  In the case of preexisting common interest communities, 
205.23  the recording officer shall accept, file, and record the 
205.24  following instruments, without requiring a certification as to 
205.25  the current or delinquent taxes on any of the units in the 
205.26  common interest community:  (i) a declaration subjecting the 
205.27  common interest community to this chapter; (ii) a declaration 
205.28  changing the form of a common interest community pursuant to 
205.29  section 515B.2-123; or (iii) an amendment to or restatement of 
205.30  the declaration, bylaws, or CIC plat.  In order for the 
205.31  instruments an instrument to be accepted and recorded under the 
205.32  preceding sentence, the assessor must certify or otherwise 
205.33  inform the recording officer that, for taxes payable in the 
205.34  current year, the assessor has allocated taxable values to each 
205.35  unit or has separately assessed each unit instrument must not 
205.36  create or change unit or common area boundaries. 
206.1      <b>[EFFECTIVE DATE.]</b> This section is effective for deeds or 
206.2   instruments accepted for recording or registration on or after 
206.3   July 1, 2003. 
206.4      Sec. 48.  Laws 2001, First Special Session chapter 5, 
206.5   article 3, section 61, the effective date, is amended to read: 
206.6      <b>[EFFECTIVE DATE.]</b> This section is effective August 1, 2001, 
206.7   for deeds issued on or after August 1, 2001.  This section is 
206.8   effective August 1, 2006, for deeds issued before August 1, 2001.
206.9      Sec. 49.  Laws 2001, First Special Session chapter 5, 
206.10  article 3, section 63, the effective date, is amended to read: 
206.11     <b>[EFFECTIVE DATE.]</b> This section is effective August 1, 2001, 
206.12  for deeds issued on or after August 1, 2001.  This section is 
206.13  effective August 1, 2006, for deeds issued before August 1, 2001.
206.14     Sec. 50.  Laws 2002, chapter 377, article 6, section 4, the 
206.15  effective date, is amended to read: 
206.16     <b>[EFFECTIVE DATE.]</b> This section is effective for aids 
206.17  payable in 2004 May 16, 2002, and thereafter. 
206.18     Sec. 51.  [REPEALER.] 
206.19     (a) Minnesota Statutes 2002, section 274.04, is repealed. 
206.20     (b) Minnesota Statutes 2002, section 477A.065, is repealed 
206.21  effective for aid payable in 2004 and thereafter. 
206.22     (c) Minnesota Rules, parts 8106.0100, subparts 11, 15, and 
206.23  16; and 8106.0200, are repealed effective the day following 
206.24  final enactment. 
206.25                             ARTICLE 9 
206.26              DEPARTMENT SALES AND USE TAX INITIATIVES 
206.27     Section 1.  Minnesota Statutes 2002, section 289A.50, 
206.28  subdivision 2a, is amended to read: 
206.29     Subd. 2a.  [REFUND OF SALES TAX TO PURCHASERS.] (a) If a 
206.30  vendor has collected from a purchaser a tax on a transaction 
206.31  that is not subject to the tax imposed by chapter 297A, the 
206.32  purchaser may apply directly to the commissioner for a refund 
206.33  under this section if: 
206.34     (a) (1) the purchaser is currently registered or was 
206.35  registered during the period of the claim, to collect and remit 
206.36  the sales tax or to remit the use tax; and 
207.1      (2) either 
207.2      (b) (i) the amount of the refund to be applied for exceeds 
207.3   $500, or 
207.4      (ii) the amount of the refund to be applied for does not 
207.5   exceed $500, but the purchaser also applies for a capital 
207.6   equipment claim at the same time, and the total of the two 
207.7   refunds exceeds $500. 
207.8      (b) The purchaser may not file more than two applications 
207.9   for refund under this subdivision in a calendar year. 
207.10     <b>[EFFECTIVE DATE.]</b> This section is effective for claims 
207.11  filed on or after the day following final enactment. 
207.12     Sec. 2.  Minnesota Statutes 2002, section 289A.60, is 
207.13  amended by adding a subdivision to read: 
207.14     Subd. 25.  [PENALTY FOR FAILURE TO PROPERLY COMPLETE SALES 
207.15  TAX RETURN.] A person who fails to report local sales tax on a 
207.16  sales tax return or who fails to report local sales tax on 
207.17  separate tax lines on the sales tax return is subject to a 
207.18  penalty of five percent of the amount of tax not properly 
207.19  reported on the return.  A person who files a consolidated tax 
207.20  return but fails to report location information is subject to a 
207.21  $500 penalty for each return not containing location 
207.22  information.  In addition, the commissioner may revoke the 
207.23  privilege for a taxpayer to file consolidated returns and may 
207.24  require the taxpayer to separately register each location and to 
207.25  file a tax return for each location. 
207.26     <b>[EFFECTIVE DATE.]</b> This section is effective for returns 
207.27  filed after June 30, 2003. 
207.28     Sec. 3.  Minnesota Statutes 2002, section 297A.61, 
207.29  subdivision 3, is amended to read: 
207.30     Subd. 3.  [SALE AND PURCHASE.] (a) "Sale" and "purchase" 
207.31  include, but are not limited to, each of the transactions listed 
207.32  in this subdivision. 
207.33     (b) Sale and purchase include: 
207.34     (1) any transfer of title or possession, or both, of 
207.35  tangible personal property, whether absolutely or conditionally, 
207.36  for a consideration in money or by exchange or barter; and 
208.1      (2) the leasing of or the granting of a license to use or 
208.2   consume, for a consideration in money or by exchange or barter, 
208.3   tangible personal property, other than a manufactured home used 
208.4   for residential purposes for a continuous period of 30 days or 
208.5   more. 
208.6      (c) Sale and purchase include the production, fabrication, 
208.7   printing, or processing of tangible personal property for a 
208.8   consideration for consumers who furnish either directly or 
208.9   indirectly the materials used in the production, fabrication, 
208.10  printing, or processing. 
208.11     (d) Sale and purchase include the preparing for a 
208.12  consideration of food.  Notwithstanding section 297A.67, 
208.13  subdivision 2, taxable food includes, but is not limited to, the 
208.14  following: 
208.15     (1) prepared food sold by the retailer; 
208.16     (2) soft drinks; 
208.17     (3) candy; and 
208.18     (4) all food sold through vending machines. 
208.19     (e) A sale and a purchase includes the furnishing for a 
208.20  consideration of electricity, gas, water, or steam for use or 
208.21  consumption within this state. 
208.22     (f) A sale and a purchase includes the transfer for a 
208.23  consideration of computer software.  
208.24     (g) A sale and a purchase includes the furnishing for a 
208.25  consideration of the following services: 
208.26     (1) the privilege of admission to places of amusement, 
208.27  recreational areas, or athletic events, and the making available 
208.28  of amusement devices, tanning facilities, reducing salons, steam 
208.29  baths, turkish baths, health clubs, and spas or athletic 
208.30  facilities; 
208.31     (2) lodging and related services by a hotel, rooming house, 
208.32  resort, campground, motel, or trailer camp and the granting of 
208.33  any similar license to use real property other than the renting 
208.34  or leasing of it for a continuous period of 30 days or more; 
208.35     (3) nonresidential parking services, whether on a 
208.36  contractual, hourly, or other periodic basis, except for parking 
209.1   at a meter; 
209.2      (4) the granting of membership in a club, association, or 
209.3   other organization if: 
209.4      (i) the club, association, or other organization makes 
209.5   available for the use of its members sports and athletic 
209.6   facilities, without regard to whether a separate charge is 
209.7   assessed for use of the facilities; and 
209.8      (ii) use of the sports and athletic facility is not made 
209.9   available to the general public on the same basis as it is made 
209.10  available to members.  
209.11  Granting of membership means both onetime initiation fees and 
209.12  periodic membership dues.  Sports and athletic facilities 
209.13  include golf courses; tennis, racquetball, handball, and squash 
209.14  courts; basketball and volleyball facilities; running tracks; 
209.15  exercise equipment; swimming pools; and other similar athletic 
209.16  or sports facilities; 
209.17     (5) delivery of aggregate materials and concrete block by a 
209.18  third party if the delivery would be subject to the sales tax if 
209.19  provided by the seller of the aggregate material or concrete 
209.20  block; and 
209.21     (6) services as provided in this clause: 
209.22     (i) laundry and dry cleaning services including cleaning, 
209.23  pressing, repairing, altering, and storing clothes, linen 
209.24  services and supply, cleaning and blocking hats, and carpet, 
209.25  drapery, upholstery, and industrial cleaning.  Laundry and dry 
209.26  cleaning services do not include services provided by coin 
209.27  operated facilities operated by the customer; 
209.28     (ii) motor vehicle washing, waxing, and cleaning services, 
209.29  including services provided by coin operated facilities operated 
209.30  by the customer, and rustproofing, undercoating, and towing of 
209.31  motor vehicles; 
209.32     (iii) building and residential cleaning, maintenance, and 
209.33  disinfecting and exterminating services; 
209.34     (iv) detective, security, burglar, fire alarm, and armored 
209.35  car services; but not including services performed within the 
209.36  jurisdiction they serve by off-duty licensed peace officers as 
210.1   defined in section 626.84, subdivision 1, or services provided 
210.2   by a nonprofit organization for monitoring and electronic 
210.3   surveillance of persons placed on in-home detention pursuant to 
210.4   court order or under the direction of the Minnesota department 
210.5   of corrections; 
210.6      (v) pet grooming services; 
210.7      (vi) lawn care, fertilizing, mowing, spraying and sprigging 
210.8   services; garden planting and maintenance; tree, bush, and shrub 
210.9   pruning, bracing, spraying, and surgery; indoor plant care; 
210.10  tree, bush, shrub, and stump removal; and tree trimming for 
210.11  public utility lines.  Services performed under a construction 
210.12  contract for the installation of shrubbery, plants, sod, trees, 
210.13  bushes, and similar items are not taxable; 
210.14     (vii) massages, except when provided by a licensed health 
210.15  care facility or professional or upon written referral from a 
210.16  licensed health care facility or professional for treatment of 
210.17  illness, injury, or disease; and 
210.18     (viii) the furnishing of lodging, board, and care services 
210.19  for animals in kennels and other similar arrangements, but 
210.20  excluding veterinary and horse boarding services. 
210.21     In applying the provisions of this chapter, the terms 
210.22  "tangible personal property" and "sales at retail" include 
210.23  taxable services listed in clause (6), items (i) to (vi) and 
210.24  (viii) and the provision of these taxable services, unless 
210.25  specifically provided otherwise.  Services performed by an 
210.26  employee for an employer are not taxable.  Services performed by 
210.27  a partnership or association for another partnership or 
210.28  association are not taxable if one of the entities owns or 
210.29  controls more than 80 percent of the voting power of the equity 
210.30  interest in the other entity.  Services performed between 
210.31  members of an affiliated group of corporations are not taxable.  
210.32  For purposes of this section the preceding sentence, "affiliated 
210.33  group of corporations" includes those entities that would be 
210.34  classified as members of an affiliated group under United States 
210.35  Code, title 26, section 1504, and that are eligible to file a 
210.36  consolidated tax return for federal income tax purposes. 
211.1      (h) A sale and a purchase includes the furnishing for a 
211.2   consideration of tangible personal property or taxable services 
211.3   by the United States or any of its agencies or 
211.4   instrumentalities, or the state of Minnesota, its agencies, 
211.5   instrumentalities, or political subdivisions. 
211.6      (i) A sale and a purchase includes the furnishing for a 
211.7   consideration of telecommunications services, including cable 
211.8   television services and direct satellite services.  
211.9   Telecommunications services are taxed to the extent allowed 
211.10  under federal law if those services: 
211.11     (1) either (i) originate and terminate in this state; or 
211.12  (ii) originate in this state and terminate outside the state and 
211.13  the service is charged to a telephone number telecommunications 
211.14  customer located in this state or to the account of any 
211.15  transmission instrument in this state; or (iii) originate 
211.16  outside this state and terminate in this state and the service 
211.17  is charged to a telephone number telecommunications customer 
211.18  located in this state or to the account of any transmission 
211.19  instrument in this state; or 
211.20     (2) are rendered by providing a private communications 
211.21  service for which the customer has one or more locations within 
211.22  Minnesota connected to the service and the service is charged to 
211.23  a telephone number telecommunications customer located in this 
211.24  state or to the account of any transmission instrument in this 
211.25  state. 
211.26     All charges for mobile telecommunications services, as 
211.27  defined in United States Code, title 4, section 124, are deemed 
211.28  to be provided by the customer's home service provider and 
211.29  sourced to the customer's place of primary use and are subject 
211.30  to tax based upon the customer's place of primary use in 
211.31  accordance with the Mobile Telecommunications Sourcing Act, 
211.32  United States Code, title 4, sections 116 to 126.  All other 
211.33  definitions and provisions of the Mobile Telecommunications 
211.34  Sourcing Act as provided in United States Code, title 4, are 
211.35  hereby adopted. 
211.36     (j) A sale and a purchase includes the furnishing for a 
212.1   consideration of installation if the installation charges would 
212.2   be subject to the sales tax if the installation were provided by 
212.3   the seller of the item being installed. 
212.4      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
212.5   following final enactment. 
212.6      Sec. 4.  Minnesota Statutes 2002, section 297A.61, 
212.7   subdivision 12, is amended to read: 
212.8      Subd. 12.  [FARM MACHINERY.] (a) "Farm machinery" means new 
212.9   or used machinery, equipment, implements, accessories, and 
212.10  contrivances used directly and principally in the agricultural 
212.11  production for sale, but not including the processing, of 
212.12  livestock, dairy animals, dairy products, poultry and poultry 
212.13  products, fruits, vegetables, trees and shrubs, plants, forage, 
212.14  grains, and bees and apiary products.  
212.15     (b) Farm machinery includes including, but not limited to: 
212.16     (1) machinery for the preparation, seeding, or cultivation 
212.17  of soil for growing agricultural crops and sod, for the 
212.18  harvesting and threshing of agricultural products, or for the 
212.19  harvesting or mowing of sod; 
212.20     (2) barn cleaners, milking systems, grain dryers, feeding 
212.21  systems including stationary feed bunks, and similar 
212.22  installations, whether or not the equipment is installed by the 
212.23  seller and becomes part of the real property; and 
212.24     (3) irrigation equipment sold for exclusively agricultural 
212.25  use, including pumps, pipe fittings, valves, sprinklers, and 
212.26  other equipment necessary to the operation of an irrigation 
212.27  system when sold as part of an irrigation system, whether or not 
212.28  the equipment is installed by the seller and becomes part of the 
212.29  real property;. 
212.30     (4) logging equipment, including chain saws used for 
212.31  commercial logging; 
212.32     (5) fencing used for the containment of farmed cervidae, as 
212.33  defined in section 17.451, subdivision 2; 
212.34     (6) primary and backup generator units used to generate 
212.35  electricity for the purpose of operating farm machinery, as 
212.36  defined in this subdivision, or providing light or space heating 
213.1   necessary for the production of livestock, dairy animals, dairy 
213.2   products, or poultry and poultry products; 
213.3      (7) aquaculture production equipment as defined in 
213.4   subdivision 13; and 
213.5      (8) equipment used for maple syrup harvesting.  
213.6      (c) (b) Farm machinery does not include: 
213.7      (1) repair or replacement parts; 
213.8      (2) tools, shop equipment, grain bins, fencing material 
213.9   except fencing material covered by paragraph (b), clause (5), 
213.10  communication equipment, and other farm supplies; 
213.11     (3) motor vehicles taxed under chapter 297B; 
213.12     (4) snowmobiles or snow blowers; or 
213.13     (5) lawn mowers except those used in the production of sod 
213.14  for sale, or garden-type tractors or garden tillers; or 
213.15     (6) machinery, equipment, implements, accessories, and 
213.16  contrivances used directly in the production of horses not 
213.17  raised for slaughter, fur-bearing animals, or research animals. 
213.18     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
213.19  purchases made after June 30, 2003. 
213.20     Sec. 5.  Minnesota Statutes 2002, section 297A.61, 
213.21  subdivision 34, is amended to read: 
213.22     Subd. 34.  [FOOD SOLD THROUGH VENDING MACHINES.] "Food sold 
213.23  through vending machines" means food dispensed from a machine or 
213.24  other mechanical device that accepts payment including honor 
213.25  payments. 
213.26     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
213.27  purchases made on or after the day following final enactment. 
213.28     Sec. 6.  Minnesota Statutes 2002, section 297A.61, is 
213.29  amended by adding a subdivision to read: 
213.30     Subd. 35.  [AGRICULTURAL PRODUCTION.] "Agricultural 
213.31  production" includes, but is not limited to, horticulture, 
213.32  floriculture, maple syrup harvesting, and the raising of pets, 
213.33  livestock as defined in section 17A.03, subdivision 5, poultry, 
213.34  dairy and poultry products, bees and apiary products, the 
213.35  raising and harvesting of agricultural crops, sod, fur-bearing 
213.36  animals, research animals, and horses. 
214.1      <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
214.2   purchases made after June 30, 2003. 
214.3      Sec. 7.  Minnesota Statutes 2002, section 297A.665, is 
214.4   amended to read: 
214.5      297A.665 [PRESUMPTION OF TAX; BURDEN OF PROOF.] 
214.6      (a) For the purpose of the proper administration of this 
214.7   chapter and to prevent evasion of the tax, until the contrary is 
214.8   established, it is presumed that:  
214.9      (1) all gross receipts are subject to the tax; and 
214.10     (2) all retail sales for delivery in Minnesota are for 
214.11  storage, use, or other consumption in Minnesota.  
214.12     (b) The burden of proving that a sale is not a taxable 
214.13  retail sale is on the seller.  However, the seller may take from 
214.14  the purchaser at the time of the sale an a fully completed 
214.15  exemption certificate claiming that the property purchased is 
214.16  for resale or that the sale is otherwise exempt from the tax 
214.17  imposed by this chapter which conclusively relieves the seller 
214.18  from collecting and remitting the tax.  This relief from 
214.19  liability does not apply to a seller who fraudulently fails to 
214.20  collect the tax or solicits purchasers to participate in the 
214.21  unlawful claim of an exemption.  If a seller claiming that 
214.22  certain sales are exempt, who does is not possess in possession 
214.23  of the required exemption certificates, must acquire the 
214.24  certificates within 60 days after receiving written notice from 
214.25  the commissioner that the certificates are required, deductions 
214.26  claimed by the seller that required delivery of the certificates 
214.27  must be disallowed.  If the certificates are not 
214.28  obtained delivered to the commissioner within the 60-day period, 
214.29  the sales are considered taxable sales under this 
214.30  chapter. commissioner may verify the reason or basis for the 
214.31  exemption claimed in the certificates before allowing any 
214.32  deductions.  A deduction must not be granted on the basis of 
214.33  certificates delivered to the commissioner after the 60-day 
214.34  period. 
214.35     (c) A purchaser of tangible personal property or any items 
214.36  listed in section 297A.63 that are shipped or brought to 
215.1   Minnesota by the purchaser has the burden of proving that the 
215.2   property was not purchased from a retailer for storage, use, or 
215.3   consumption in Minnesota.  
215.4      <b>[EFFECTIVE DATE.]</b> This section is effective for exemption 
215.5   certificates received for sales occurring after June 30, 2003. 
215.6      Sec. 8.  Minnesota Statutes 2002, section 297A.67, 
215.7   subdivision 2, is amended to read: 
215.8      Subd. 2.  [FOOD AND FOOD INGREDIENTS.] Food and food 
215.9   ingredients are exempt.  For purposes of this subdivision, 
215.10  "food" and "food ingredients" mean substances, whether in 
215.11  liquid, concentrated, solid, frozen, dried, or dehydrated form, 
215.12  that are sold for ingestion or chewing by humans and are 
215.13  consumed for their taste or nutritional value.  Food and food 
215.14  ingredients exempt under this subdivision do not include candy, 
215.15  soft drinks, food sold through vending machines, and prepared 
215.16  foods.  Food and food ingredients do not include alcoholic 
215.17  beverages, dietary supplements, and tobacco.  For purposes of 
215.18  this subdivision, "alcoholic beverages" means beverages that are 
215.19  suitable for human consumption and contain one-half of one 
215.20  percent or more of alcohol by volume.  For purposes of this 
215.21  subdivision, "tobacco" means cigarettes, cigars, chewing or pipe 
215.22  tobacco, or any other item that contains tobacco.  For purposes 
215.23  of this subdivision, "dietary supplements" means any product, 
215.24  other than tobacco, intended to supplement the diet that: 
215.25     (1) contains one or more of the following dietary 
215.26  ingredients: 
215.27     (i) a vitamin; 
215.28     (ii) a mineral; 
215.29     (iii) an herb or other botanical; 
215.30     (iv) an amino acid; 
215.31     (v) a dietary substance for use by humans to supplement the 
215.32  diet by increasing the total dietary intake; and 
215.33     (vi) a concentrate, metabolite, constituent, extract, or 
215.34  combination of any ingredient described in items (i) to (v); 
215.35     (2) is intended for ingestion in tablet, capsule, powder, 
215.36  softgel, gelcap, or liquid form, or if not intended for 
216.1   ingestion in such form, is not represented as conventional food 
216.2   and is not represented for use as a sole item of a meal or of 
216.3   the diet; and 
216.4      (3) is required to be labeled as a dietary supplement, 
216.5   identifiable by the supplement facts box found on the label and 
216.6   as required pursuant to Code of Federal Regulations, title 21, 
216.7   section 101.36. 
216.8      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
216.9   following final enactment. 
216.10     Sec. 9.  Minnesota Statutes 2002, section 297A.68, 
216.11  subdivision 5, is amended to read: 
216.12     Subd. 5.  [CAPITAL EQUIPMENT.] (a) Capital equipment is 
216.13  exempt.  The tax must be imposed and collected as if the rate 
216.14  under section 297A.62, subdivision 1, applied, and then refunded 
216.15  in the manner provided in section 297A.75. 
216.16     "Capital equipment" means machinery and equipment purchased 
216.17  or leased, and used in this state by the purchaser or lessee 
216.18  primarily for manufacturing, fabricating, mining, or refining 
216.19  tangible personal property to be sold ultimately at retail if 
216.20  the machinery and equipment are essential to the integrated 
216.21  production process of manufacturing, fabricating, mining, or 
216.22  refining.  Capital equipment also includes machinery and 
216.23  equipment used to electronically transmit results retrieved by a 
216.24  customer of an online computerized data retrieval system. 
216.25     (b) Capital equipment includes, but is not limited to: 
216.26     (1) machinery and equipment used to operate, control, or 
216.27  regulate the production equipment; 
216.28     (2) machinery and equipment used for research and 
216.29  development, design, quality control, and testing activities; 
216.30     (3) environmental control devices that are used to maintain 
216.31  conditions such as temperature, humidity, light, or air pressure 
216.32  when those conditions are essential to and are part of the 
216.33  production process; 
216.34     (4) materials and supplies used to construct and install 
216.35  machinery or equipment; 
216.36     (5) repair and replacement parts, including accessories, 
217.1   whether purchased as spare parts, repair parts, or as upgrades 
217.2   or modifications to machinery or equipment; 
217.3      (6) materials used for foundations that support machinery 
217.4   or equipment; 
217.5      (7) materials used to construct and install special purpose 
217.6   buildings used in the production process; and 
217.7      (8) ready-mixed concrete trucks equipment in which the 
217.8   ready-mixed concrete is mixed as part of the delivery 
217.9   process regardless if mounted on a chassis and leases of 
217.10  ready-mixed concrete trucks. 
217.11     (c) Capital equipment does not include the following: 
217.12     (1) motor vehicles taxed under chapter 297B; 
217.13     (2) machinery or equipment used to receive or store raw 
217.14  materials; 
217.15     (3) building materials, except for materials included in 
217.16  paragraph (b), clauses (6) and (7); 
217.17     (4) machinery or equipment used for nonproduction purposes, 
217.18  including, but not limited to, the following:  plant security, 
217.19  fire prevention, first aid, and hospital stations; support 
217.20  operations or administration; pollution control; and plant 
217.21  cleaning, disposal of scrap and waste, plant communications, 
217.22  space heating, cooling, lighting, or safety; 
217.23     (5) farm machinery and aquaculture production equipment as 
217.24  defined by section 297A.61, subdivisions 12 and 13; 
217.25     (6) machinery or equipment purchased and installed by a 
217.26  contractor as part of an improvement to real property; or 
217.27     (7) any other item that is not essential to the integrated 
217.28  process of manufacturing, fabricating, mining, or refining. 
217.29     (d) For purposes of this subdivision: 
217.30     (1) "Equipment" means independent devices or tools separate 
217.31  from machinery but essential to an integrated production 
217.32  process, including computers and computer software, used in 
217.33  operating, controlling, or regulating machinery and equipment; 
217.34  and any subunit or assembly comprising a component of any 
217.35  machinery or accessory or attachment parts of machinery, such as 
217.36  tools, dies, jigs, patterns, and molds.  
218.1      (2) "Fabricating" means to make, build, create, produce, or 
218.2   assemble components or property to work in a new or different 
218.3   manner. 
218.4      (3) "Integrated production process" means a process or 
218.5   series of operations through which tangible personal property is 
218.6   manufactured, fabricated, mined, or refined.  For purposes of 
218.7   this clause, (i) manufacturing begins with the removal of raw 
218.8   materials from inventory and ends when the last process prior to 
218.9   loading for shipment has been completed; (ii) fabricating begins 
218.10  with the removal from storage or inventory of the property to be 
218.11  assembled, processed, altered, or modified and ends with the 
218.12  creation or production of the new or changed product; (iii) 
218.13  mining begins with the removal of overburden from the site of 
218.14  the ores, minerals, stone, peat deposit, or surface materials 
218.15  and ends when the last process before stockpiling is completed; 
218.16  and (iv) refining begins with the removal from inventory or 
218.17  storage of a natural resource and ends with the conversion of 
218.18  the item to its completed form. 
218.19     (4) "Machinery" means mechanical, electronic, or electrical 
218.20  devices, including computers and computer software, that are 
218.21  purchased or constructed to be used for the activities set forth 
218.22  in paragraph (a), beginning with the removal of raw materials 
218.23  from inventory through completion of the product, including 
218.24  packaging of the product. 
218.25     (4) (5) "Machinery and equipment used for pollution control"
218.26  means machinery and equipment used solely to eliminate, prevent, 
218.27  or reduce pollution resulting from an activity described in 
218.28  paragraph (a).  
218.29     (5) (6) "Manufacturing" means an operation or series of 
218.30  operations where raw materials are changed in form, composition, 
218.31  or condition by machinery and equipment and which results in the 
218.32  production of a new article of tangible personal property.  For 
218.33  purposes of this subdivision, "manufacturing" includes the 
218.34  generation of electricity or steam to be sold at retail. 
218.35     (6) (7) "Mining" means the extraction of minerals, ores, 
218.36  stone, or peat. 
219.1      (7) (8) "Online data retrieval system" means a system whose 
219.2   cumulation of information is equally available and accessible to 
219.3   all its customers. 
219.4      (8) (9) "Primarily" means machinery and equipment used 50 
219.5   percent or more of the time in an activity described in 
219.6   paragraph (a). 
219.7      (9) (10) "Refining" means the process of converting a 
219.8   natural resource to a an intermediate or finished product, 
219.9   including the treatment of water to be sold at retail. 
219.10     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
219.11  purchases made after December 31, 2003. 
219.12     Sec. 10.  Minnesota Statutes 2002, section 297A.68, is 
219.13  amended by adding a subdivision to read: 
219.14     Subd. 39.  [PREEXISTING BIDS OR CONTRACTS.] (a) The sale of 
219.15  tangible personal property or services is exempt from tax for a 
219.16  period of six months from the effective date of the law change 
219.17  that results in the imposition of the tax under this chapter if: 
219.18     (1) the act imposing the tax does not have transitional 
219.19  effective date language for existing construction contracts and 
219.20  construction bids; and 
219.21     (2) the requirements of paragraph (b) are met. 
219.22     (b) A sale is tax exempt under paragraph (a) if it meets 
219.23  the requirements of either clause (1) or (2): 
219.24     (1) For a construction contract: 
219.25     (i) the goods or services sold must be used for the 
219.26  performance of a bona fide written lump sum or fixed price 
219.27  construction contract; 
219.28     (ii) the contract must be entered into before the date the 
219.29  goods or services become subject to the sales tax; 
219.30     (iii) the contract must not provide for allocation of 
219.31  future taxes; and 
219.32     (iv) for each qualifying contract the contractor must give 
219.33  the seller documentation of the contract on which an exemption 
219.34  is to be claimed. 
219.35     (2) For a bid: 
219.36     (i) the goods or services sold must be used pursuant to an 
220.1   obligation of a bid or bids; 
220.2      (ii) the bid or bids must be submitted and accepted before 
220.3   the date the goods or services became subject to the sales tax; 
220.4      (iii) the bid or bids must not be able to be withdrawn, 
220.5   modified, or changed without forfeiting a bond; and 
220.6      (iv) for each qualifying bid, the contractor must give the 
220.7   seller documentation of the bid on which an exemption is to be 
220.8   claimed. 
220.9      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
220.10  following final enactment. 
220.11     Sec. 11.  Minnesota Statutes 2002, section 297A.69, 
220.12  subdivision 2, is amended to read: 
220.13     Subd. 2.  [MATERIALS CONSUMED IN AGRICULTURAL PRODUCTION.] 
220.14  (a) Materials stored, used, or consumed in agricultural 
220.15  production of personal property intended to be sold ultimately 
220.16  at retail are exempt, whether or not the item becomes an 
220.17  ingredient or constituent part of the property produced.  
220.18  Materials that qualify for this exemption include, but are not 
220.19  limited to, the following: 
220.20     (1) feeds, seeds, trees, fertilizers, and herbicides, 
220.21  including when purchased for use by farmers in a federal or 
220.22  state farm or conservation program; 
220.23     (2) materials sold to a veterinarian to be used or consumed 
220.24  in the care, medication, and treatment of agricultural 
220.25  production animals and horses; 
220.26     (3) chemicals, including chemicals used for cleaning food 
220.27  processing machinery and equipment; 
220.28     (4) materials, including chemicals, fuels, and electricity 
220.29  purchased by persons engaged in agricultural production to treat 
220.30  waste generated as a result of the production process; 
220.31     (5) fuels, electricity, gas, and steam used or consumed in 
220.32  the production process, except that electricity, gas, or steam 
220.33  used for space heating, cooling, or lighting is exempt if (i) it 
220.34  is in excess of the average climate control or lighting for the 
220.35  production area, and (ii) it is necessary to produce that 
220.36  particular product; 
221.1      (6) petroleum products and lubricants; 
221.2      (7) packaging materials, including returnable containers 
221.3   used in packaging food and beverage products; and 
221.4      (8) accessory tools and equipment that are separate 
221.5   detachable units with an ordinary useful life of less than 12 
221.6   months used in producing a direct effect upon the product. 
221.7   Machinery, equipment, implements, tools, accessories, 
221.8   appliances, contrivances, and furniture and fixtures, except 
221.9   those listed in this clause are not included within this 
221.10  exemption. 
221.11     (b) For purposes of this subdivision, "agricultural 
221.12  production" includes, but is not limited to, horticulture, 
221.13  floriculture, maple syrup harvesting, and the raising of pets, 
221.14  fur-bearing animals, research animals, horses, farmed cervidae 
221.15  as defined in section 17.451, subdivision 2, llamas as defined 
221.16  in section 17.455, subdivision 2, and ratitae as defined in 
221.17  section 17.453, subdivision 3. 
221.18     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
221.19  purchases made after December 31, 2003. 
221.20     Sec. 12.  Minnesota Statutes 2002, section 297A.69, 
221.21  subdivision 3, is amended to read: 
221.22     Subd. 3.  [FARM MACHINERY REPAIR AND REPLACEMENT PARTS.] 
221.23  Repair and replacement parts, except tires, used for maintenance 
221.24  or repair of farm machinery, logging equipment, and aquaculture 
221.25  production equipment are exempt, if the part replaces a farm 
221.26  machinery part assigned a specific or generic part number by the 
221.27  manufacturer of the farm machinery.  
221.28     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
221.29  purchases made after June 30, 2003. 
221.30     Sec. 13.  Minnesota Statutes 2002, section 297A.69, 
221.31  subdivision 4, is amended to read: 
221.32     Subd. 4.  [FARM MACHINERY, EQUIPMENT, AND FENCING.] The 
221.33  following machinery, equipment, and fencing is exempt: 
221.34     (1) farm machinery is exempt.; 
221.35     (2) logging equipment, including chain saws used for 
221.36  commercial logging; 
222.1      (3) fencing used for the containment of farmed cervidae, as 
222.2   defined in section 17.451, subdivision 2; 
222.3      (4) primary and backup generator units used to generate 
222.4   electricity for the purpose of operating farm machinery, 
222.5   aquacultural production equipment, or logging equipment, or 
222.6   providing light or space heating necessary for the production of 
222.7   livestock, dairy animals, dairy products, or poultry and poultry 
222.8   products; and 
222.9      (5) aquaculture production equipment.  
222.10     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
222.11  purchases made after June 30, 2003. 
222.12     Sec. 14.  Minnesota Statutes 2002, section 297B.025, 
222.13  subdivision 1, is amended to read: 
222.14     Subdivision 1.  [NONCOLLECTOR VEHICLE.] Purchase or use of 
222.15  a passenger automobile as defined in section 168.011, 
222.16  subdivision 7, shall be taxed pursuant to section 297B.02, 
222.17  subdivision 2, if the passenger automobile is (1) is in the 
222.18  tenth or subsequent year of vehicle life, and (2) is not an 
222.19  above-market automobile as designated by the registrar of motor 
222.20  vehicles does not have a resale value of $3,000 or more, as 
222.21  determined using nationally recognized sources of information on 
222.22  automobile resale values, as designated by the registrar of 
222.23  motor vehicles. 
222.24     The registrar of motor vehicles shall prepare, and 
222.25  distribute to all deputy motor vehicle registrars by July 15, 
222.26  1985, a listing by make, model, and year of above-market 
222.27  automobiles.  Except as provided by subdivision 2, the registrar 
222.28  must include in the list all automobiles with a resale value of 
222.29  $3,000 or more, as determined using nationally recognized 
222.30  sources of information on automobile resale values.  The 
222.31  registrar shall revise the list by February 1 of each year.  The 
222.32  initial list and all subsequent revisions must include only 
222.33  those automobiles which are in the tenth or subsequent year of 
222.34  vehicle life.  
222.35     <b>[EFFECTIVE DATE.]</b> This section is effective for vehicles 
222.36  purchased after June 30, 2003. 
223.1      Sec. 15.  Minnesota Statutes 2002, section 297B.025, 
223.2   subdivision 2, is amended to read: 
223.3      Subd. 2.  [COLLECTOR VEHICLE.] A passenger automobile that 
223.4   is registered under section 168.10, subdivision 1a, 1b, 1c, 1d, 
223.5   or 1h, or a fire truck registered under section 168.10, 
223.6   subdivision 1c, shall be taxed under section 297B.02, 
223.7   subdivision 3, and the registrar shall not designate as an 
223.8   above-market automobile a passenger automobile or a fire truck 
223.9   registered under those subdivisions.  If the vehicle is 
223.10  subsequently registered in another class not under section 
223.11  168.10, subdivision 1a, 1b, 1c, 1d, or 1h, within one year of 
223.12  the date of registration under those subdivisions, it shall be 
223.13  subject to the full excise tax imposed under subdivision 1. 
223.14     <b>[EFFECTIVE DATE.]</b> This section is effective for vehicles 
223.15  purchased after December 31, 2003. 
223.16     Sec. 16.  Minnesota Statutes 2002, section 297B.035, 
223.17  subdivision 1, is amended to read: 
223.18     Subdivision 1.  [ORDINARY COURSE OF BUSINESS.] Except as 
223.19  provided in this section, motor vehicles purchased for resale in 
223.20  the ordinary course of business or used by any motor vehicle 
223.21  dealer, as defined in section 168.011, subdivision 21, who is 
223.22  licensed under section 168.27, subdivision 2 or 3, which bear 
223.23  dealer plates as authorized by section 168.27, subdivision 16, 
223.24  shall be exempt from the provisions of this chapter. 
223.25     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
223.26  following final enactment. 
223.27     Sec. 17.  [REPEALER.] 
223.28     (a) Minnesota Statutes 2002, section 297A.72, subdivision 
223.29  1, is repealed effective for exemption certificates received for 
223.30  sales occurring after June 30, 2003. 
223.31     (b) Minnesota Statutes 2002, section 297A.97, is repealed 
223.32  effective for sales and purchases occurring after December 31, 
223.33  2003. 
223.34     (c) Minnesota Rules, parts 8130.0800, subparts 5 and 12; 
223.35  8130.1300; 8130.1600, subpart 5; 8130.1700, subparts 3 and 4; 
223.36  8130.4800, subpart 2; 8130.7500, subpart 5; 8130.8000; and 
224.1   8130.8300, are repealed effective the day following final 
224.2   enactment. 
224.3                              ARTICLE 10 
224.4                 DEPARTMENT SPECIAL TAXES INITIATIVES 
224.5      Section 1.  Minnesota Statutes 2002, section 115B.24, 
224.6   subdivision 8, is amended to read: 
224.7      Subd. 8.  [PENALTIES; ENFORCEMENT.] The audit, penalty and 
224.8   enforcement provisions applicable to corporate franchise taxes 
224.9   imposed under chapter 290 apply to the taxes imposed under 
224.10  section 115B.22 and those provisions shall be administered by 
224.11  the commissioner.  
224.12     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
224.13  following final enactment. 
224.14     Sec. 2.  Minnesota Statutes 2002, section 295.50, 
224.15  subdivision 9b, is amended to read: 
224.16     Subd. 9b.  [PATIENT SERVICES.] (a) "Patient services" means 
224.17  inpatient and outpatient services and other goods and services 
224.18  provided by hospitals, surgical centers, or health care 
224.19  providers.  They include the following health care goods and 
224.20  services provided to a patient or consumer: 
224.21     (1) bed and board; 
224.22     (2) nursing services and other related services; 
224.23     (3) use of hospitals, surgical centers, or health care 
224.24  provider facilities; 
224.25     (4) medical social services; 
224.26     (5) drugs, biologicals, supplies, appliances, and 
224.27  equipment; 
224.28     (6) other diagnostic or therapeutic items or services; 
224.29     (7) medical or surgical services; 
224.30     (8) items and services furnished to ambulatory patients not 
224.31  requiring emergency care; 
224.32     (9) emergency services; and 
224.33     (10) covered services listed in section 256B.0625 and in 
224.34  Minnesota Rules, parts 9505.0170 to 9505.0475. 
224.35     (b) "Patient services" does not include:  
224.36     (1) services provided to nursing homes licensed under 
225.1   chapter 144A; and 
225.2      (2) examinations for purposes of utilization reviews, 
225.3   insurance claims or eligibility, litigation, and employment, 
225.4   including reviews of medical records for those purposes; 
225.5      (3) services provided by community residential mental 
225.6   health facilities licensed under Minnesota Rules, parts 
225.7   9520.0500 to 9520.0690; 
225.8      (4) services provided by community support programs and 
225.9   family community support programs approved under Minnesota 
225.10  Rules, parts 9535.1700 to 9535.1760; 
225.11     (5) services provided by community mental health centers as 
225.12  defined in section 245.62, subdivision 2; 
225.13     (6) services provided by assisted living programs and 
225.14  congregate housing programs; and 
225.15     (7) hospice care services. 
225.16     <b>[EFFECTIVE DATE.]</b> This section is effective for gross 
225.17  revenues received after December 31, 2002. 
225.18     Sec. 3.  Minnesota Statutes 2002, section 295.53, 
225.19  subdivision 1, is amended to read: 
225.20     Subdivision 1.  [EXEMPTIONS.] (a) The following payments 
225.21  are excluded from the gross revenues subject to the hospital, 
225.22  surgical center, or health care provider taxes under sections 
225.23  295.50 to 295.57 295.59: 
225.24     (1) payments received for services provided under the 
225.25  Medicare program, including payments received from the 
225.26  government, and organizations governed by sections 1833 and 1876 
225.27  of title XVIII of the federal Social Security Act, United States 
225.28  Code, title 42, section 1395, and enrollee deductibles, 
225.29  coinsurance, and copayments, whether paid by the Medicare 
225.30  enrollee or by a Medicare supplemental coverage as defined in 
225.31  section 62A.011, subdivision 3, clause (10).  Payments for 
225.32  services not covered by Medicare are taxable; 
225.33     (2) medical assistance payments including payments received 
225.34  directly from the government or from a prepaid plan; 
225.35     (3) payments received for home health care services; 
225.36     (4) payments received from hospitals or surgical centers 
226.1   for goods and services on which liability for tax is imposed 
226.2   under section 295.52 or the source of funds for the payment is 
226.3   exempt under clause (1), (2), (7), (8), (10), (13), 
226.4   or (20) (17); 
226.5      (5) payments received from health care providers for goods 
226.6   and services on which liability for tax is imposed under this 
226.7   chapter or the source of funds for the payment is exempt under 
226.8   clause (1), (2), (7), (8), (10), (13), or (20) (17); 
226.9      (6) amounts paid for legend drugs, other than nutritional 
226.10  products, to a wholesale drug distributor who is subject to tax 
226.11  under section 295.52, subdivision 3, reduced by reimbursements 
226.12  received for legend drugs otherwise exempt under this chapter; 
226.13     (7) payments received under the general assistance medical 
226.14  care program including payments received directly from the 
226.15  government or from a prepaid plan; 
226.16     (8) payments received for providing services under the 
226.17  MinnesotaCare program including payments received directly from 
226.18  the government or from a prepaid plan and enrollee deductibles, 
226.19  coinsurance, and copayments.  For purposes of this clause, 
226.20  coinsurance means the portion of payment that the enrollee is 
226.21  required to pay for the covered service; 
226.22     (9) payments received by a health care provider or the 
226.23  wholly owned subsidiary of a health care provider for care 
226.24  provided outside Minnesota; 
226.25     (10) payments received from the chemical dependency fund 
226.26  under chapter 254B; 
226.27     (11) payments received in the nature of charitable 
226.28  donations that are not designated for providing patient services 
226.29  to a specific individual or group; 
226.30     (12) payments received for providing patient services 
226.31  incurred through a formal program of health care research 
226.32  conducted in conformity with federal regulations governing 
226.33  research on human subjects.  Payments received from patients or 
226.34  from other persons paying on behalf of the patients are subject 
226.35  to tax; 
226.36     (13) payments received from any governmental agency for 
227.1   services benefiting the public, not including payments made by 
227.2   the government in its capacity as an employer or insurer; 
227.3      (14) payments received for services provided by community 
227.4   residential mental health facilities licensed under Minnesota 
227.5   Rules, parts 9520.0500 to 9520.0690, community support programs 
227.6   and family community support programs approved under Minnesota 
227.7   Rules, parts 9535.1700 to 9535.1760, and community mental health 
227.8   centers as defined in section 245.62, subdivision 2; 
227.9      (15) (14) government payments received by a regional 
227.10  treatment center; 
227.11     (16) payments received for hospice care services; 
227.12     (17) (15) payments received by a health care provider for 
227.13  hearing aids and related equipment or prescription eyewear 
227.14  delivered outside of Minnesota; 
227.15     (18) (16) payments received by an educational institution 
227.16  from student tuition, student activity fees, health care service 
227.17  fees, government appropriations, donations, or grants.  Fee for 
227.18  service payments and payments for extended coverage are taxable; 
227.19  and 
227.20     (19) payments received for services provided by:  assisted 
227.21  living programs and congregate housing programs; and 
227.22     (20) (17) payments received under the federal Employees 
227.23  Health Benefits Act, United States Code, title 5, section 
227.24  8909(f), as amended by the Omnibus Reconciliation Act of 1990. 
227.25     (b) Payments received by wholesale drug distributors for 
227.26  legend drugs sold directly to veterinarians or veterinary bulk 
227.27  purchasing organizations are excluded from the gross revenues 
227.28  subject to the wholesale drug distributor tax under sections 
227.29  295.50 to 295.59. 
227.30     <b>[EFFECTIVE DATE.]</b> This section is effective for gross 
227.31  revenues received after December 31, 2002. 
227.32     Sec. 4.  Minnesota Statutes 2002, section 297F.01, 
227.33  subdivision 21a, is amended to read: 
227.34     Subd. 21a.  [UNLICENSED SELLER.] "Unlicensed seller" means 
227.35  anyone who is not licensed under section 297F.03 or 461.12 to 
227.36  sell the particular product to the purchaser or possessor of the 
228.1   product. 
228.2      <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2003. 
228.3      Sec. 5.  Minnesota Statutes 2002, section 297F.01, 
228.4   subdivision 23, is amended to read: 
228.5      Subd. 23.  [WHOLESALE SALES PRICE.] "Wholesale sales price" 
228.6   means the established price stated on the price list in effect 
228.7   at the time of sale for which a manufacturer or person sells a 
228.8   tobacco product to a distributor, exclusive of any discount, 
228.9   promotional offer, or other reduction.  For purposes of this 
228.10  subdivision, "price list" means the manufacturer's price at 
228.11  which tobacco products are made available for sale to all 
228.12  distributors on an ongoing basis. 
228.13     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2003. 
228.14     Sec. 6.  Minnesota Statutes 2002, section 297F.06, 
228.15  subdivision 4, is amended to read: 
228.16     Subd. 4.  [TOBACCO PRODUCTS USE TAX.] The tobacco products 
228.17  use tax does not apply to the possession, use, or storage of 
228.18  tobacco products in quantities of: that have an aggregate cost 
228.19  in any calendar month to the consumer of $100 or less. 
228.20     (1) not more than 50 cigars; 
228.21     (2) not more than ten ounces snuff or snuff powder; 
228.22     (3) not more than one pound smoking or chewing tobacco or 
228.23  any other tobacco product in the possession of any one consumer. 
228.24     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2003. 
228.25     Sec. 7.  Minnesota Statutes 2002, section 297F.20, 
228.26  subdivision 1, is amended to read: 
228.27     Subdivision 1.  [PENALTIES FOR FAILURE TO FILE OR PAY.] (a) 
228.28  A person or consumer required to file a return, report, or other 
228.29  document with the commissioner who fails to do so is guilty of a 
228.30  misdemeanor. 
228.31     (b) A person or consumer required to pay or to collect and 
228.32  remit a tax under this chapter, who fails to do so when 
228.33  required, is guilty of a misdemeanor. 
228.34     <b>[EFFECTIVE DATE.]</b> This section is effective for acts 
228.35  committed on or after July 1, 2003. 
228.36     Sec. 8.  Minnesota Statutes 2002, section 297F.20, 
229.1   subdivision 2, is amended to read: 
229.2      Subd. 2.  [PENALTIES FOR KNOWING FAILURE TO FILE OR PAY.] 
229.3   (a) A person or consumer required to file a return, report, or 
229.4   other document with the commissioner, who knowingly, rather than 
229.5   accidentally, inadvertently, or negligently, fails to file it 
229.6   when required, is guilty of a gross misdemeanor.  
229.7      (b) A person or consumer required to pay or to collect and 
229.8   remit a tax under this chapter, who knowingly, rather than 
229.9   accidentally, inadvertently, or negligently, fails to file it 
229.10  when required, is guilty of a gross misdemeanor. 
229.11     <b>[EFFECTIVE DATE.]</b> This section is effective for acts 
229.12  committed on or after July 1, 2003. 
229.13     Sec. 9.  Minnesota Statutes 2002, section 297F.20, 
229.14  subdivision 3, is amended to read: 
229.15     Subd. 3.  [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A 
229.16  person or consumer who files with the commissioner a return, 
229.17  report, or other document, or who maintains or provides invoices 
229.18  subject to review by the commissioner under this chapter, known 
229.19  by the person or consumer to be fraudulent or false concerning a 
229.20  material matter, is guilty of a felony. 
229.21     (b) A person or consumer who knowingly aids or assists in, 
229.22  or advises in the preparation or presentation of a return, 
229.23  report, invoice, or other document that is fraudulent or false 
229.24  concerning a material matter, whether or not the falsity or 
229.25  fraud is committed with the knowledge or consent of the 
229.26  person or consumer authorized or required to present the return, 
229.27  report, invoice, or other document, is guilty of a felony. 
229.28     <b>[EFFECTIVE DATE.]</b> This section is effective for acts 
229.29  committed on or after July 1, 2003. 
229.30     Sec. 10.  Minnesota Statutes 2002, section 297F.20, 
229.31  subdivision 6, is amended to read: 
229.32     Subd. 6.  [UNSTAMPED CIGARETTES; UNTAXED TOBACCO PRODUCTS.] 
229.33  (a) A person, other than a licensed distributor or a consumer, 
229.34  who possesses, receives, or transports more than 200 but fewer 
229.35  than 5,000 unstamped cigarettes, or up to $100 $350 worth of 
229.36  untaxed tobacco products is guilty of a misdemeanor. 
230.1      (b) A person, other than a licensed distributor or a 
230.2   consumer, who possesses, receives, or transports 5,000 or more, 
230.3   but fewer than 20,001 unstamped cigarettes, or up to $500 more 
230.4   than $350 but less than $1,400 worth of untaxed tobacco products 
230.5   is guilty of a gross misdemeanor. 
230.6      (c) A person, other than a licensed distributor or a 
230.7   consumer, who possesses, receives, or transports more than 
230.8   20,000 unstamped cigarettes, or $500 $1,400 or more worth of 
230.9   untaxed tobacco products is guilty of a felony. 
230.10     (d) For purposes of this subdivision, an individual in 
230.11  possession of more than 4,999 unstamped cigarettes, or more than 
230.12  $350 worth of untaxed tobacco products, is presumed not to be a 
230.13  consumer. 
230.14     <b>[EFFECTIVE DATE.]</b> This section is effective for acts 
230.15  committed on or after July 1, 2003. 
230.16     Sec. 11.  Minnesota Statutes 2002, section 297F.20, 
230.17  subdivision 9, is amended to read: 
230.18     Subd. 9.  [PURCHASES FROM UNLICENSED SELLERS.] (a) No 
230.19  retailer or subjobber shall purchase cigarettes or tobacco 
230.20  products from any person who is not licensed under section 
230.21  297F.03 as a licensed distributor or subjobber. 
230.22     (b) A retailer, or subjobber, or consumer who purchases 
230.23  from an unlicensed seller more than 200 but fewer than 5,000 
230.24  cigarettes or up to $100 $350 worth of tobacco products is 
230.25  guilty of a misdemeanor. 
230.26     (b) (c) A retailer, or subjobber, or consumer who 
230.27  purchases from an unlicensed seller 5,000 or more, but fewer 
230.28  than 20,001 cigarettes or up to $500 more than $350 but less 
230.29  than $1,400 worth of untaxed tobacco products is guilty of a 
230.30  gross misdemeanor. 
230.31     (c) (d) A retailer, or subjobber, or consumer who 
230.32  purchases from an unlicensed seller more than 20,000 cigarettes 
230.33  or $500 $1,400 or more worth of tobacco products is guilty of a 
230.34  felony. 
230.35     <b>[EFFECTIVE DATE.]</b> This section is effective for acts 
230.36  committed on or after July 1, 2003. 
231.1      Sec. 12.  Minnesota Statutes 2002, section 297I.01, 
231.2   subdivision 9, is amended to read: 
231.3      Subd. 9.  [GROSS PREMIUMS.] "Gross premiums" means total 
231.4   premiums paid by policyholders and applicants of policies, 
231.5   whether received in the form of money or other valuable 
231.6   consideration, on property, persons, lives, interests and other 
231.7   risks located, resident, or to be performed in this state, but 
231.8   excluding consideration and premiums for reinsurance assumed 
231.9   from other insurance companies.  The term "gross premiums" 
231.10  includes the total consideration paid to bail bond agents for 
231.11  bail bonds.  For title insurance companies, "gross premiums" 
231.12  means the charge for title insurance made by a title insurance 
231.13  company or its agents according to the company's rate filing 
231.14  approved by the commissioner of commerce without a deduction for 
231.15  commissions paid to or retained by the agent.  Gross premiums of 
231.16  a title insurance company does not include any other charge or 
231.17  fee for abstracting, searching, or examining the title, or 
231.18  escrow, closing, or other related services.  The term "gross 
231.19  premiums" includes any workers' compensation special 
231.20  compensation fund premium surcharge pursuant to section 176.129. 
231.21     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
231.22  following final enactment. 
231.23     Sec. 13.  Minnesota Statutes 2002, section 297I.20, is 
231.24  amended to read: 
231.25     297I.20 [GUARANTY ASSOCIATION ASSESSMENT OFFSET OFFSETS 
231.26  AGAINST PREMIUM TAXES.] 
231.27     Subdivision 1.  [GUARANTY ASSOCIATION ASSESSMENT OFFSETS.] 
231.28  (a) An insurance company may offset against its premium tax 
231.29  liability to this state any amount paid for assessments made for 
231.30  insolvencies which occur after July 31, 1994, under sections 
231.31  60C.01 to 60C.22; and any amount paid for assessments made after 
231.32  July 31, 1994, under Minnesota Statutes 1992, sections 61B.01 to 
231.33  61B.16, or under sections 61B.18 to 61B.32 as follows: 
231.34     (1) Each such assessment shall give rise to an amount of 
231.35  offset equal to 20 percent of the amount of the assessment for 
231.36  each of the five calendar years following the year in which the 
232.1   assessment was paid. 
232.2      (2) The amount of offset initially determined for each 
232.3   taxable year is the sum of the amounts determined under clause 
232.4   (1) for that taxable year. 
232.5      (b)(1) Each year the commissioner shall compare total 
232.6   guaranty association assessments levied over the preceding five 
232.7   calendar years to the sum of all premium tax and corporate 
232.8   franchise tax revenues collected from insurance companies, 
232.9   without reduction for any guaranty association assessment offset 
232.10  in the preceding calendar year, referred to in this subdivision 
232.11  as "preceding year insurance tax revenues." 
232.12     (2) If total guaranty association assessments levied over 
232.13  the preceding five years exceed the preceding year insurance tax 
232.14  revenues, insurance companies must be allowed only a 
232.15  proportionate part of the premium tax offset calculated under 
232.16  paragraph (a) for the current calendar year. 
232.17     (3) The proportionate part of the premium tax offset 
232.18  allowed in the current calendar year is determined by 
232.19  multiplying the amount calculated under paragraph (a) by a 
232.20  fraction.  The numerator of the fraction equals the preceding 
232.21  year insurance tax revenues, and its denominator equals total 
232.22  guaranty association assessments levied over the preceding 
232.23  five-year period. 
232.24     (4) The proportionate part of the premium tax offset that 
232.25  is not allowed must be carried forward to subsequent tax years 
232.26  and added to the amount of premium tax offset calculated under 
232.27  paragraph (a) prior to application of the limitation imposed by 
232.28  this paragraph. 
232.29     (5) Any amount carried forward from prior years must be 
232.30  allowed before allowance of the offset for the current year 
232.31  calculated under paragraph (a). 
232.32     (6) The premium tax offset limitation must be calculated 
232.33  separately for (i) insurance companies subject to assessment 
232.34  under sections 60C.01 to 60C.22, and (ii) insurance companies 
232.35  subject to assessment under Minnesota Statutes 1992, sections 
232.36  61B.01 to 61B.16, or 61B.18 to 61B.32. 
233.1      (7) When the premium tax offset is limited by this 
233.2   provision, the commissioner shall notify affected insurance 
233.3   companies on a timely basis for purposes of completing premium 
233.4   and corporate franchise tax returns.  
233.5      (8) The guaranty associations created under sections 60C.01 
233.6   to 60C.22, Minnesota Statutes 1992, sections 61B.01 to 61B.16, 
233.7   and 61B.18 to 61B.32, shall provide the commissioner with the 
233.8   necessary information on guaranty association assessments. 
233.9      (c)(1) If the offset determined by the application of 
233.10  paragraphs (a) and (b) exceeds the insurance company's premium 
233.11  tax liability under this section prior to allowance of the 
233.12  credit for premium taxes, then the insurance company may carry 
233.13  forward the excess, referred to in this subdivision as the 
233.14  "carryforward credit" to subsequent taxable years. 
233.15     (2) The carryforward credit is allowed as an offset against 
233.16  premium tax liability for the first succeeding year to the 
233.17  extent that the premium tax liability for that year exceeds the 
233.18  amount of the allowable offset for the year determined under 
233.19  paragraphs (a) and (b). 
233.20     (3) The carryforward credit must be reduced, but not below 
233.21  zero, by the amount of the carryforward credit allowed as an 
233.22  offset against the premium tax under this paragraph.  The 
233.23  remainder, if any, of the carryforward credit must be carried 
233.24  forward to succeeding taxable years until the entire 
233.25  carryforward credit has been credited against the insurance 
233.26  company's liability for premium tax under this chapter if 
233.27  applicable for that taxable year. 
233.28     (d) When an insurer has offset against taxes its payment of 
233.29  an assessment of the Minnesota life and health guaranty 
233.30  association, and the association pays the insurer a refund with 
233.31  respect to the assessment under Minnesota Statutes 1992, section 
233.32  61B.07, subdivision 6, or 61B.24, subdivision 6, then the refund 
233.33  reduces the insurer's carryforward credit under paragraph (c).  
233.34  If the refund exceeds the amount of the carryforward credit, the 
233.35  excess amount must be repaid to the state by the insurers to the 
233.36  extent of the offset in the manner the commissioner requires. 
234.1      Subd. 2.  [JOINT UNDERWRITING ASSOCIATION OFFSET.] An 
234.2   assessment made pursuant to section 62I.06, subdivision 6, shall 
234.3   be deductible by the member from past or future premium taxes 
234.4   due the state. 
234.5      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
234.6   following final enactment. 
234.7      Sec. 14.  [REVISOR'S INSTRUCTION.] 
234.8      In the next edition of Minnesota Rules, the revisor shall 
234.9   delete any references to the sections repealed in section 15, 
234.10  paragraph (a). 
234.11     Sec. 15.  [REPEALER.] 
234.12     (a) Minnesota Statutes 2002, sections 294.01; 294.02; 
234.13  294.021; 294.03; 294.06; 294.07; 294.08; 294.09; 294.10; 294.11; 
234.14  and 294.12, are repealed effective the day following final 
234.15  enactment. 
234.16     (b) Minnesota Rules, parts 8125.1000; 8125.1300, subpart 1; 
234.17  and 8125.1400, are repealed effective the day following final 
234.18  enactment. 
234.19                             ARTICLE 11 
234.20         DEPARTMENT COLLECTIONS AND COMPLIANCE INITIATIVES 
234.21     Section 1.  [270.278] [PENALTY FOR FILING CERTAIN DOCUMENTS 
234.22  AGAINST DEPARTMENT OF REVENUE EMPLOYEES.] 
234.23     Subdivision 1.  [DEFINITIONS.] (a) "Recording office" means 
234.24  a county recorder, registrar of titles, or secretary of state in 
234.25  this state or another state. 
234.26     (b) "Filing party" means the person or persons requesting 
234.27  or causing another person to request that the recording office 
234.28  accept documents or instruments for recording or filing. 
234.29     Subd. 2.  [INVALID DOCUMENTS NAMING THE COMMISSIONER OR 
234.30  DEPARTMENT OF REVENUE EMPLOYEES.] Filing a document, including a 
234.31  nonconsensual common law lien under section 514.99, that 
234.32  purports to create a claim against the commissioner of revenue 
234.33  or an employee of the department of revenue based on performance 
234.34  or nonperformance of duties by the commissioner or employee is 
234.35  invalid unless accompanied by a specific order from a court of 
234.36  competent jurisdiction authorizing the filing of the document or 
235.1   unless a specific statute authorizes the filing of the document. 
235.2      Subd. 3.  [CIVIL PENALTY.] If a filing party causes a 
235.3   document described in subdivision 2 to be recorded in a 
235.4   recording office, the commissioner may assess a penalty against 
235.5   the filing party of $1,000 per document filed, payable to the 
235.6   general fund.  An order assessing a penalty under this section 
235.7   is reviewable administratively under section 289A.65 and is 
235.8   appealable to tax court under chapter 271.  The penalty is 
235.9   collected and paid in the same manner as income tax.  The 
235.10  penalty is in addition to any other remedy available to the 
235.11  commissioner of revenue or to an employee of the department of 
235.12  revenue against whom the document has been filed.  
235.13     <b>[EFFECTIVE DATE.]</b> This section is effective for documents 
235.14  filed on or after July 1, 2003. 
235.15     Sec. 2.  Minnesota Statutes 2002, section 270.69, is 
235.16  amended by adding a subdivision to read: 
235.17     Subd. 16.  [ATTACHMENT TO PROCEEDS OF PROPERTY.] Any lien 
235.18  imposed under this section attaches to the proceeds of property 
235.19  with the same priority that the lien has with respect to the 
235.20  property itself.  "Proceeds of property" means proceeds from the 
235.21  sale, lease, license, exchange, or other disposition of the 
235.22  property, including insurance proceeds arising from the loss or 
235.23  destruction of the property. 
235.24     <b>[EFFECTIVE DATE.]</b> This section is effective for all liens, 
235.25  whether imposed prior to, on, or after the day following final 
235.26  enactment. 
235.27     Sec. 3.  Minnesota Statutes 2002, section 270.701, 
235.28  subdivision 2, is amended to read: 
235.29     Subd. 2.  [NOTICE OF SALE.] The commissioner shall as soon 
235.30  as practicable after the seizure of the property give notice of 
235.31  sale of the property to the owner, in the manner of service 
235.32  prescribed in subdivision 1.  In the case of personal property, 
235.33  the notice shall be served at least 10 days prior to the sale.  
235.34  In the case of real property, the notice shall be served at 
235.35  least four weeks prior to the sale.  The commissioner shall also 
235.36  cause public notice of each sale to be made.  In the case of 
236.1   personal property, notice shall be posted at least 10 days prior 
236.2   to the sale at the county courthouse for the county where the 
236.3   seizure is made, and in not less than two other public 
236.4   places.  For purposes of this requirement, the Internet is a 
236.5   public place for posting the information.  In the case of real 
236.6   property, six weeks' published notice shall be given prior to 
236.7   the sale, in a newspaper published or generally circulated in 
236.8   the county.  The notice of sale provided in this subdivision 
236.9   shall specify the property to be sold, and the time, place, 
236.10  manner and conditions of the sale.  Whenever levy is made 
236.11  without regard to the 30-day period provided in section 270.70, 
236.12  subdivision 2, public notice of sale of the property seized 
236.13  shall not be made within the 30-day period unless section 
236.14  270.702 (relating to sale of perishable goods) is applicable.  
236.15     <b>[EFFECTIVE DATE.]</b> This section is effective for notices of 
236.16  sales posted on or after the day following final enactment. 
236.17     Sec. 4.  Minnesota Statutes 2002, section 270.701, is 
236.18  amended by adding a subdivision to read: 
236.19     Subd. 7.  [SALE OF SEIZED SECURITIES.] (a) At the time of 
236.20  levy on securities, the commissioner shall provide notice to the 
236.21  taxpayer that the securities may be sold after ten days from the 
236.22  date of seizure.  
236.23     (b) If the commissioner levies upon nonexempt publicly 
236.24  traded securities and the value of the securities is less than 
236.25  or equal to the total obligation for which the levy is done, 
236.26  after ten days the person who possesses or controls the 
236.27  securities shall liquidate the securities in a commercially 
236.28  reasonable manner.  After liquidation, the person shall transfer 
236.29  the proceeds to the commissioner, less any applicable 
236.30  commissions or fees, or both, which are charged in the normal 
236.31  course of business.  
236.32     (c) If the commissioner levies upon nonexempt publicly 
236.33  traded securities and the value of the securities exceeds the 
236.34  total amount of the levy, the owner of the securities may, 
236.35  within seven days after receipt of the department's notice of 
236.36  levy given pursuant to subdivision 1, instruct the person who 
237.1   possesses or controls the securities which securities are to be 
237.2   sold to satisfy the obligation.  If the owner does not provide 
237.3   instructions for liquidation, the person who possesses or 
237.4   controls the securities shall liquidate the securities in an 
237.5   amount sufficient to pay the obligation, plus any applicable 
237.6   commissions or fees, or both, which are charged in the normal 
237.7   course of business, beginning with the nonexempt securities 
237.8   purchased most recently.  After liquidation, the person who 
237.9   possesses or controls the securities shall transfer to the 
237.10  commissioner the amount of money needed to satisfy the levy. 
237.11     <b>[EFFECTIVE DATE.]</b> This section is effective for sales of 
237.12  securities seized on or after the day following final enactment. 
237.13     Sec. 5.  Minnesota Statutes 2002, section 270.72, 
237.14  subdivision 2, is amended to read: 
237.15     Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
237.16  following terms have the meanings given.  
237.17     (a) "Taxes" are mean all taxes payable to the commissioner 
237.18  including penalties and interest due on the taxes. 
237.19     (b) "Delinquent taxes" do not include a tax liability if 
237.20  (i) an administrative or court action which contests the amount 
237.21  or validity of the liability has been filed or served, (ii) the 
237.22  appeal period to contest the tax liability has not expired, or 
237.23  (iii) the applicant has entered into a payment agreement and is 
237.24  current with the payments.  
237.25     (c) "Applicant" means an individual if the license is 
237.26  issued to or in the name of an individual or the corporation or 
237.27  partnership if the license is issued to or in the name of a 
237.28  corporation or partnership.  "Applicant" also means an officer 
237.29  of a corporation, a member of a partnership, or an individual 
237.30  who is liable for delinquent taxes, either for the entity for 
237.31  which the license is at issue or for another entity for which 
237.32  the liability was incurred, or personally as a licensee.  In the 
237.33  case of a license transfer, "applicant" also means both the 
237.34  transferor and the transferee of the license.  "Applicant" also 
237.35  means any holder of a license. 
237.36     (d) "License" includes means any permit, registration, 
238.1   certification, or other form of approval authorized by statute 
238.2   or rule to be issued by the state or a political subdivision of 
238.3   the state as a condition of doing business or conducting a 
238.4   trade, profession, or occupation in Minnesota, specifically 
238.5   including, but not limited to, a contract for space rental at 
238.6   the Minnesota state fair and authorization to operate 
238.7   concessions or rides at county and local fairs, festivals, or 
238.8   events. 
238.9      (e) "Licensing authority" includes the Minnesota state fair 
238.10  board and county and local boards or governing bodies. 
238.11     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
238.12  following final enactment. 
238.13     Sec. 6.  Minnesota Statutes 2002, section 270A.03, 
238.14  subdivision 2, is amended to read: 
238.15     Subd. 2.  [CLAIMANT AGENCY.] "Claimant agency" means any 
238.16  state agency, as defined by section 14.02, subdivision 2, the 
238.17  regents of the University of Minnesota, any district court of 
238.18  the state, any county, any statutory or home rule charter city 
238.19  presenting a claim for a municipal hospital or a public library 
238.20  or a municipal ambulance service, a hospital district, a private 
238.21  nonprofit hospital that leases its building from the county in 
238.22  which it is located, any public agency responsible for child 
238.23  support enforcement, any public agency responsible for the 
238.24  collection of court-ordered restitution, and any public agency 
238.25  established by general or special law that is responsible for 
238.26  the administration of a low-income housing program, and the 
238.27  Minnesota collection enterprise as defined in section 16D.02, 
238.28  subdivision 8, for the purpose of collecting the costs imposed 
238.29  under section 16D.11. 
238.30     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
238.31  following final enactment. 
238.32     Sec. 7.  Minnesota Statutes 2002, section 289A.31, 
238.33  subdivision 3, is amended to read: 
238.34     Subd. 3.  [TRANSFEREES AND FIDUCIARIES.] The amounts of the 
238.35  following liabilities are, except as otherwise provided in 
238.36  section 289A.38, subdivision 13, assessed, collected, and paid 
239.1   in the same manner and subject to the same provisions and 
239.2   limitations as a deficiency in a tax imposed by chapter 290, 
239.3   including any provisions of law for the collection of taxes: 
239.4      (1) the liability, at law or in equity, of a transferee of 
239.5   property of a taxpayer for tax or overpayment of a refund, 
239.6   including interest, additional amounts, and additions to the tax 
239.7   or overpayment provided by law, imposed upon the taxpayer by 
239.8   chapter 290 or provided for in chapter 290A; and 
239.9      (2) the liability of a fiduciary under subdivision 4 for 
239.10  the payment of tax from the estate of the taxpayer.  The 
239.11  liability may reflect the amount of tax shown on the return or 
239.12  any deficiency in tax.  
239.13     <b>[EFFECTIVE DATE.]</b> This section is effective for refunds 
239.14  paid on or after the day following final enactment. 
239.15     Sec. 8.  Minnesota Statutes 2002, section 289A.31, 
239.16  subdivision 4, is amended to read: 
239.17     Subd. 4.  [TAX AS A PERSONAL DEBT OF A FIDUCIARY.] The A 
239.18  tax imposed by chapter 290 and an overpayment of a refund 
239.19  provided for in chapter 290A, and interest and penalties, is a 
239.20  personal debt of the taxpayer from the time the liability 
239.21  arises, regardless of when the time for discharging the 
239.22  liability by payment occurs.  The debt is, in the case of the 
239.23  personal representative of the estate of a decedent and in the 
239.24  case of any fiduciary, that of the individual in the 
239.25  individual's official or fiduciary capacity only, unless the 
239.26  individual has voluntarily distributed the assets held in that 
239.27  capacity without reserving sufficient assets to pay the tax, 
239.28  interest, and penalties, in which event the individual is 
239.29  personally liable for the deficiency.  
239.30     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
239.31  imposed and property tax refunds claimed on or after the day 
239.32  following final enactment. 
239.33     Sec. 9.  Minnesota Statutes 2002, section 289A.36, 
239.34  subdivision 7, is amended to read: 
239.35     Subd. 7.  [APPLICATION TO COURT FOR ENFORCEMENT OF 
239.36  SUBPOENA.] (a) Disobedience of subpoenas issued under this 
240.1   section shall be punished by the district court of the district 
240.2   in which the party served with the subpoena is located, in the 
240.3   same manner as contempt of the district court.  
240.4      (b) Disobedience of a subpoena issued under subdivision 9 
240.5   shall be punished by the district court for Ramsey county in the 
240.6   same manner as contempt of the district court.  In addition to 
240.7   contempt remedies, the court may issue any order the court deems 
240.8   reasonably necessary to enforce compliance with the subpoena. 
240.9      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
240.10  following final enactment. 
240.11     Sec. 10.  Minnesota Statutes 2002, section 289A.36, is 
240.12  amended by adding a subdivision to read: 
240.13     Subd. 9.  [ACCESS TO RECORDS IN CONNECTION WITH EXAMINATION 
240.14  OF BUSINESSES LOCATED OUTSIDE THE STATE.] (a) In order to 
240.15  determine whether a business located outside the state of 
240.16  Minnesota is required to file a return under this chapter, the 
240.17  commissioner may examine the relevant records and files of the 
240.18  business. 
240.19     (b) To the full extent permitted by the Minnesota and 
240.20  United States constitutions, the commissioner may compel 
240.21  production of those relevant records and files by subpoena.  The 
240.22  subpoena may be served on the secretary of state along with the 
240.23  address to which service of the subpoena is to be sent and a fee 
240.24  of $50.  The secretary of state shall forward a copy of the 
240.25  subpoena to the business using the procedures for service of 
240.26  process in section 5.25, subdivision 6.  
240.27     (c) The commissioner shall pay the reasonable cost of 
240.28  producing records subject to subpoena under this subdivision if: 
240.29     (1) the subpoenaed party cannot produce the records without 
240.30  undue burden; and 
240.31     (2) the examination made pursuant to paragraph (a) shows 
240.32  that the subpoenaed party is not required to file a return under 
240.33  this chapter. 
240.34     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
240.35  following final enactment. 
240.36     Sec. 11.  Minnesota Statutes 2002, section 289A.36, is 
241.1   amended by adding a subdivision to read: 
241.2      Subd. 10.  [PENALTY.] In addition to sanctions imposed 
241.3   under subdivision 7, a penalty of $250 per day is imposed on any 
241.4   business that is in violation of a court order to comply with a 
241.5   subpoena that is seeking information necessary for the 
241.6   commissioner to be able to determine whether the business is 
241.7   required to file a return or pay a tax.  The maximum penalty is 
241.8   $25,000.  Upon the request of the commissioner, the court shall 
241.9   determine the amount of the penalty and enter it as a judgment 
241.10  in favor of the commissioner.  The penalty is not payable until 
241.11  the judgment is entered. 
241.12     <b>[EFFECTIVE DATE.]</b> This section is effective for violations 
241.13  of court orders to enforce subpoenas issued on or after the day 
241.14  following final enactment. 
241.15     Sec. 12.  Minnesota Statutes 2002, section 297A.85, is 
241.16  amended to read: 
241.17     297A.85 [CANCELLATION OF PERMITS.] 
241.18     The commissioner may cancel a permit if one of the 
241.19  following conditions occurs: 
241.20     (1) the permit holder has not filed a sales or use tax 
241.21  return for at least one year; 
241.22     (2) the permit holder has not reported any sales or use tax 
241.23  liability on the permit holder's returns for at least two years; 
241.24  or 
241.25     (3) the permit holder requests cancellation of the permit; 
241.26  or 
241.27     (4) the permit is subject to cancellation pursuant to 
241.28  section 297A.86, subdivision 2, paragraph (a). 
241.29     <b>[EFFECTIVE DATE.]</b> This section is effective for 
241.30  cancellations of permits done on or after the day following 
241.31  final enactment. 
241.32     Sec. 13.  [REPEALER.] 
241.33     Minnesota Statutes 2002, section 270.691, subdivision 8, is 
241.34  repealed effective the day following final enactment. 
241.35                             ARTICLE 12
241.36               CENTRAL LAKES REGION SANITARY DISTRICT
242.1      Section 1.  [DEFINITIONS.] 
242.2      Subdivision 1.  [APPLICATION.] The terms defined in this 
242.3   section shall have the meaning given them unless otherwise 
242.4   provided or indicated by the context.  
242.5      Subd. 2.  [ACQUISITION AND BETTERMENT.] "Acquisition" and 
242.6   "betterment" shall have the meanings given them in Minnesota 
242.7   Statutes, section 475.51.  
242.8      Subd. 3.  [AGENCY.] "Agency" means the Minnesota pollution 
242.9   control agency created and established by Minnesota Statutes, 
242.10  chapter 116.  
242.11     Subd. 4.  [AGRICULTURAL PROPERTY.] "Agricultural property" 
242.12  means land as is classified agricultural land within the meaning 
242.13  of Minnesota Statutes, section 273.13, subdivision 23.  
242.14     Subd. 5.  [CURRENT COSTS OF ACQUISITION, BETTERMENT, AND 
242.15  DEBT SERVICE.] "Current costs of acquisition, betterment, and 
242.16  debt service" means interest and principal estimated to be due 
242.17  during the budget year on bonds issued to finance the 
242.18  acquisition and betterment and all other costs of acquisition 
242.19  and betterment estimated to be paid during the budget year from 
242.20  funds other than bond proceeds and federal or state grants. 
242.21     Subd. 6.  [DISTRICT DISPOSAL SYSTEM.] "District disposal 
242.22  system" means any and all of the interceptors or treatment works 
242.23  owned, constructed, or operated by the board unless designated 
242.24  by the board as local sanitary sewer facilities.  
242.25     Subd. 7.  [CENTRAL LAKES REGION SANITARY DISTRICT AND 
242.26  DISTRICT.] "Central Lakes Region Sanitary District" and 
242.27  "district" mean the area over which the sanitary sewer board has 
242.28  jurisdiction, including those parts of the Douglas county 
242.29  townships of Carlos, Brandon, La Grand, Leaf Valley, Miltona, 
242.30  and Moe, as more particularly described by metes and bounds in 
242.31  the comprehensive plan adopted under section 4.  
242.32     Subd. 8.  [INTERCEPTOR.] "Interceptor" means any sewer and 
242.33  necessary appurtenances to it, including but not limited to, 
242.34  mains, pumping stations, and sewage flow regulating and 
242.35  measuring stations, that is designed for or used to conduct 
242.36  sewage originating in more than one local government unit, or 
243.1   that is designed or used to conduct all or substantially all the 
243.2   sewage originating in a single local government unit from a 
243.3   point of collection in that unit to an interceptor or treatment 
243.4   works outside that unit, or that is determined by the board to 
243.5   be a major collector of sewage used or designed to serve a 
243.6   substantial area in the district.  
243.7      Subd. 9.  [LOCAL GOVERNMENT UNIT OR GOVERNMENT 
243.8   UNIT.] "Local government unit" or "government unit" means any 
243.9   municipal or public corporation or governmental or political 
243.10  subdivision or agency located in whole or in part in the 
243.11  district, authorized by law to provide for the collection and 
243.12  disposal of sewage. 
243.13     Subd. 10.  [LOCAL SANITARY SEWER FACILITIES.] "Local 
243.14  sanitary sewer facilities" means all or any part of any disposal 
243.15  system in the district other than the district disposal system.  
243.16     Subd. 11.  [MUNICIPALITY.] "Municipality" means any city or 
243.17  town located in whole or in part in the district.  
243.18     Subd. 12.  [PERSON.] "Person" means any individual, 
243.19  partnership, corporation, limited liability company, 
243.20  cooperative, or other organization or entity, public or private. 
243.21     Subd. 13.  [POLLUTION AND SEWER SYSTEM.] "Pollution" and 
243.22  "sewer system" have the meanings given them in Minnesota 
243.23  Statutes, section 115.01.  
243.24     Subd. 14.  [SANITARY SEWER BOARD OR BOARD.] "Sanitary sewer 
243.25  board" or "board" means the sanitary sewer board established for 
243.26  the Central Lakes Region Sanitary District as provided in 
243.27  section 2.  
243.28     Subd. 15.  [SEWAGE.] "Sewage" means all liquid or 
243.29  water-carried waste products from whatever sources derived, 
243.30  together with the groundwater infiltration and surface water 
243.31  that may be present.  
243.32     Subd. 16.  [TOTAL COSTS OF ACQUISITION AND BETTERMENT AND 
243.33  COSTS OF ACQUISITION AND BETTERMENT.] "Total costs of 
243.34  acquisition and betterment" and "costs of acquisition and 
243.35  betterment" mean all acquisition and betterment expenses that 
243.36  are permitted to be financed out of bond proceeds issued in 
244.1   accordance with section 12, subdivision 4, whether or not the 
244.2   expenses are in fact financed out of the bond proceeds.  
244.3      Subd. 17.  [TREATMENT WORKS AND DISPOSAL 
244.4   SYSTEM.] "Treatment works" and "disposal system" have the 
244.5   meanings given them in Minnesota Statutes, section 115.01. 
244.6      Sec. 2.  [SANITARY SEWER BOARD.] 
244.7      Subdivision 1.  [ESTABLISHMENT.] A sanitary sewer board 
244.8   with jurisdiction in the Central Lakes Region Sanitary District 
244.9   is established as a public corporation and political subdivision 
244.10  of the state with perpetual succession and all the rights, 
244.11  powers, privileges, immunities, and duties that may be validly 
244.12  granted to or imposed upon a municipal corporation, as provided 
244.13  in this article.  
244.14     Subd. 2.  [MEMBERS AND SELECTION.] The number of board 
244.15  members and method by which they are selected is as follows:  
244.16  The elected chief executive officer of any municipality and the 
244.17  town board chair of each township located in whole or part 
244.18  within the district must each separately select one member.  
244.19  Upon the board's ordering of a project to construct a sanitary 
244.20  sewer, the elected chief executive officer or town board chair 
244.21  respectively of any municipality or township must appoint one 
244.22  additional member for each full 800 special assessments included 
244.23  in the ordered project to be levied against property located in 
244.24  the municipality or township.  The term of each member is 
244.25  subject to the approval of the voting members of the city 
244.26  council or town board.  
244.27     Subd. 3.  [TIME LIMIT; ALTERNATIVE APPOINTMENT.] The 
244.28  initial board members must be selected as provided in 
244.29  subdivision 2 within 60 days after this article is effective.  A 
244.30  successor must be selected at any time within 60 days before the 
244.31  expiration of the predecessor's term in the same manner as the 
244.32  predecessor was selected.  Any vacancy on the board must be 
244.33  filled within 60 days after it occurs.  If a selection is not 
244.34  made as provided within the time prescribed, the chief judge of 
244.35  the seventh judicial district of the Minnesota district court, 
244.36  on application by any interested person, shall appoint an 
245.1   eligible person to the board. 
245.2      Subd. 4.  [VACANCIES.] If the office of any board member 
245.3   becomes vacant, the vacancy shall be filled for the unexpired 
245.4   term in the manner as provided for selection of the member who 
245.5   vacated the office.  The office shall be deemed vacant under the 
245.6   conditions specified in Minnesota Statutes, section 351.02.  
245.7      Subd. 5.  [TERMS OF OFFICE.] The terms of all board members 
245.8   shall be for one, two, three, or four calendar years to be 
245.9   determined in accordance with subdivision 2 by the governing 
245.10  body selecting such member.  Terms shall expire on January 1 of 
245.11  a calendar year, except that each member shall serve until a 
245.12  successor has been duly selected and qualified.  
245.13     Subd. 6.  [REMOVAL.] A board member may be removed by the 
245.14  unanimous vote of the appointing governing body with or without 
245.15  cause.  
245.16     Subd. 7.  [QUALIFICATIONS.] Each board member may, but need 
245.17  not be a resident of the district and may, but need not be an 
245.18  elected public official.  
245.19     Subd. 8.  [CERTIFICATES OF SELECTION; OATH OF OFFICE.] A 
245.20  certificate of selection to a seat of every board member, 
245.21  stating the seat's term, must be made by the respective 
245.22  municipal or town clerk.  The certificate, with the approval 
245.23  attached by other authority, if required, must be filled with 
245.24  the secretary of state.  A copy must be furnished to the board 
245.25  member and the secretary of the board.  Each member must qualify 
245.26  by taking and subscribing to the oath of office prescribed by 
245.27  the Minnesota Constitution, article V, section 6.  The oath, 
245.28  duly certified by the official administering the same, must be 
245.29  filed with the secretary of state and the secretary of the board.
245.30     Subd. 9.  [COMPENSATION OF BOARD MEMBERS.] Each board 
245.31  member may be paid a per diem compensation to attend meetings 
245.32  and for other services in an amount as may be specifically 
245.33  authorized by the board from time to time.  Per diem 
245.34  compensation may not exceed $4,000 for any member in any one 
245.35  year.  All members of the board must be reimbursed for all 
245.36  reasonable expenses incurred in the performance of their duties 
246.1   as determined by the board.  
246.2      Sec. 3.  [GENERAL PROVISION FOR ORGANIZATION AND OPERATION 
246.3   OF BOARD.] 
246.4      Subdivision 1.  [OFFICERS MEETINGS; SEAL.] A majority of 
246.5   the members is a quorum at all meetings of the board, but a 
246.6   lesser number may meet and adjourn from time to time and compel 
246.7   the attendance of absent members.  The board must meet regularly 
246.8   at the time and place as the board by resolution designates.  
246.9   Special meetings may be held at any time upon call of the chair 
246.10  or any two members, upon written notice sent by mail to each 
246.11  member at least three days before the meeting, or upon the 
246.12  notice as the board by resolution may provide, or without notice 
246.13  if each member is present or files with the secretary a written 
246.14  consent to the meeting either before or after the meeting.  
246.15  Except as otherwise provided in this article, any action within 
246.16  the authority of the board may be taken by the affirmative vote 
246.17  of a majority of the board at a regular or adjourned regular 
246.18  meeting or at a duly held special meeting, but in any case only 
246.19  if a quorum is present.  All meetings of the board must be open 
246.20  to the public as provided in Minnesota Statutes, chapter 13D.  
246.21     Subd. 2.  [CHAIR.] The board must elect a chair from its 
246.22  membership.  The term of the chair expires on January 1 of each 
246.23  year.  The chair presides at all meetings of the board, if 
246.24  present, and must perform all other duties and functions usually 
246.25  incumbent upon the officer, and all administrative functions 
246.26  assigned to the chair by the board.  The board must elect a 
246.27  vice-chair from its membership to act for the chair during a 
246.28  temporary absence or disability.  
246.29     Subd. 3.  [SECRETARY AND TREASURER.] The board must select 
246.30  one or more persons who may, but need not be a member of the 
246.31  board, to act as its secretary and treasurer.  The secretary and 
246.32  treasurer hold office at the pleasure of the board, subject to 
246.33  the terms of any contract of employment that the board may enter 
246.34  into with the secretary or treasurer.  The secretary must record 
246.35  the minutes of all meetings of the board, and is custodian of 
246.36  all books and records of the board except those the board 
247.1   entrusts to the custody of a designated employee.  The board may 
247.2   appoint a deputy to perform any and all functions of either the 
247.3   secretary or the treasurer.  A secretary or treasurer or a 
247.4   deputy of either who is not a member of the board shall not have 
247.5   any right to vote.  
247.6      Subd. 4.  [GENERAL MANAGER.] The board may appoint a 
247.7   general manager who shall be selected solely upon the basis of 
247.8   training, experience, and other qualifications.  The general 
247.9   manager serves at the pleasure of the board and at a 
247.10  compensation to be determined by the board.  The general manager 
247.11  need not be a resident of the district and may also be selected 
247.12  by the board to serve as either secretary or treasurer, or both, 
247.13  of the board.  The general manager must attend all meetings of 
247.14  the board but must not vote.  The general manager must:  
247.15     (1) see that all resolutions, rules, regulations, or orders 
247.16  of the board are enforced; 
247.17     (2) appoint and remove, upon the basis of merit and 
247.18  fitness, all subordinate officers and regular employees of the 
247.19  board except the secretary and the treasurer and their deputies; 
247.20     (3) present to the board plans, studies, and other reports 
247.21  prepared for board purposes and recommend to the board for 
247.22  adoption such measures as the general manager considers 
247.23  necessary to enforce or carry out the powers and duties of the 
247.24  board, or for the efficient administration of the affairs of the 
247.25  board; 
247.26     (4) keep the board fully advised as to its financial 
247.27  condition, and prepare and submit to the board, and to the 
247.28  governing bodies of the local government units, the board's 
247.29  annual budget and other financial information the board 
247.30  requests; 
247.31     (5) recommend to the board for adoption rules recommended 
247.32  as necessary for the efficient operation of a district disposal 
247.33  system and all local sanitary sewer facilities over which the 
247.34  board may assume responsibility as provided in section 17; and 
247.35     (6) perform other duties as may be prescribed by the board. 
247.36     Subd. 5.  [PUBLIC EMPLOYEES.] The general manager and all 
248.1   persons employed by the general manager are public employees, 
248.2   and have all the rights and duties conferred on public employees 
248.3   under the Minnesota Public Employment Labor Relations Act.  The 
248.4   compensation and conditions of employment of the employees is 
248.5   not governed by any rule applicable to state employees in the 
248.6   classified service or by Minnesota Statutes, chapter 15A, except 
248.7   as specifically authorized by law. 
248.8      Subd. 6.  [PROCEDURES.] The board must adopt resolutions or 
248.9   bylaws establishing procedures for board action, personnel 
248.10  administration, record keeping, investment policy, approving 
248.11  claims, authorizing or making disbursements, safekeeping funds, 
248.12  and audit of all financial operations of the board.  
248.13     Subd. 7.  [SURETY BONDS AND INSURANCE.] The board may 
248.14  procure surety bonds for its officers and employees in such 
248.15  amounts as are considered necessary to assure proper performance 
248.16  of their duties and proper accounting for funds in their custody.
248.17  It may buy insurance against risks to property and liability of 
248.18  the board and its officers, agents, and employees for personal 
248.19  injuries or death and property damage and destruction in the 
248.20  amounts as it considers necessary or desirable, with the force 
248.21  and effect stated in Minnesota Statutes, chapter 466.  
248.22     Sec. 4.  [COMPREHENSIVE PLAN.] 
248.23     Subdivision 1.  [BOARD PLAN AND PROGRAM.] The board shall 
248.24  adopt a comprehensive plan for the collection, treatment, and 
248.25  disposal of sewage in the district for designated periods that 
248.26  the board considers proper and reasonable.  The board must 
248.27  prepare and adopt subsequent comprehensive plans for the 
248.28  collection, treatment, and disposal of sewage in the district 
248.29  for each succeeding designated period as the board considers 
248.30  proper and reasonable.  The plan must take into account the 
248.31  preservation and best and most economic use of water and other 
248.32  natural resources in the area; the preservation, use, and 
248.33  potential for use of lands adjoining waters of the state to be 
248.34  used for the disposal of sewage; and the impact such a disposal 
248.35  system will have on present and future land use in the affected 
248.36  area.  The plans shall include the following: 
249.1      (1) the exact legal description of the boundaries of the 
249.2   district; 
249.3      (2) the general location of needed interceptors and 
249.4   treatment works; 
249.5      (3) a description of the area that is to be served by the 
249.6   various interceptors and treatment works; 
249.7      (4) a long-range capital improvements program; and 
249.8      (5) such other details as the board deems appropriate. 
249.9   In developing the plans, the board shall consult with persons 
249.10  designated by the governing bodies of any municipal or public 
249.11  corporation or governmental or political subdivision or agency 
249.12  within or without the district to represent such entities and 
249.13  shall consider the data, resources, and input offered to the 
249.14  board by such entities and any planning agency acting on behalf 
249.15  of one or more such entities.  Each plan, when adopted, must be 
249.16  followed in the district and may be revised as often as the 
249.17  board considers necessary.  
249.18     Subd. 2.  [REPORT TO DOUGLAS COUNTY.] Upon adoption of any 
249.19  comprehensive plan that establishes or reestablishes the 
249.20  boundaries of the district, the board must supply the 
249.21  appropriate Douglas county offices with the boundaries of the 
249.22  district.  
249.23     Subd. 3.  [COMPREHENSIVE PLANS; HEARING.] Before adopting 
249.24  any later comprehensive plan, the board must hold a public 
249.25  hearing on the proposed plan at the time and place in the 
249.26  district it determines.  The hearing may be continued from time 
249.27  to time.  Not less than 45 days before the hearing, the board 
249.28  must publish notice of it in a newspaper or newspapers having 
249.29  general circulation in the district stating the date, time, and 
249.30  place of the hearing, and the place where the proposed plan may 
249.31  be examined by any interested person.  At the hearing, all 
249.32  interested persons must be permitted to present their views on 
249.33  the plan.  
249.34     Subd. 4.  [MUNICIPAL PLANS AND PROGRAMS; COORDINATION WITH 
249.35  BOARD'S RESPONSIBILITIES.] Before undertaking the construction 
249.36  of new sewers or other disposal facilities or the substantial 
250.1   alteration or improvement of any existing sewers or other 
250.2   disposal facilities, each local government unit may, and must if 
250.3   the construction or alteration of any sewage disposal facilities 
250.4   is contemplated by the government unit, adopt a comprehensive 
250.5   plan and program for the collection, treatment, and disposal of 
250.6   sewage for which the local government unit is responsible, 
250.7   coordinated with the board's comprehensive plan, and may revise 
250.8   the plan as often as deemed necessary.  Each local plan or 
250.9   revision must be submitted to the board for review and is 
250.10  subject to the approval of the board as to those features of the 
250.11  plan affecting the board's responsibilities as determined by the 
250.12  board.  Any features disapproved by the board must be modified 
250.13  in accordance with the board's recommendations.  No construction 
250.14  project involving those features may be undertaken by the local 
250.15  government unit unless its governing body first finds the 
250.16  project to be in accordance with the government unit's 
250.17  comprehensive plan and program as approved by the board.  Before 
250.18  approval by the board of the comprehensive plan and program of 
250.19  any local government unit in the district, no construction 
250.20  project may be undertaken by the government unit unless approval 
250.21  of the project is first gotten from the board as to those 
250.22  features of the project affecting the board's responsibilities 
250.23  as determined by the board.  
250.24     Sec. 5.  [SEWER SERVICE FUNCTION.] 
250.25     Subdivision 1.  [DUTY OF BOARD; ACQUISITION OF EXISTING 
250.26  FACILITIES; NEW FACILITIES.] At any time after the board has 
250.27  become organized, it must assume ownership of all existing 
250.28  interceptors and treatment works that are needed to implement 
250.29  the board's comprehensive plan for the collection, treatment, 
250.30  and disposal of sewage in the district, in the manner and 
250.31  subject to the conditions prescribed in subdivision 2, and must 
250.32  design, acquire, construct, better, equip, operate, and maintain 
250.33  all additional interceptors and treatment works that will be 
250.34  needed for this purpose.  The board must assume ownership of all 
250.35  treatment works owned by a local government unit if any part of 
250.36  those treatment works are so needed. 
251.1      Subd. 2.  [METHOD OF ACQUISITION; EXISTING DEBT.] The board 
251.2   may require any local government unit to transfer to the board 
251.3   all of its right, title, and interest in any interceptors or 
251.4   treatment works and all necessary appurtenances to them owned by 
251.5   the local government unit that will be needed for the purpose 
251.6   stated in subdivision 1.  Appropriate instruments of conveyance 
251.7   for all the property must be executed and delivered to the board 
251.8   by the proper officers of each local government unit concerned.  
251.9   The board, upon assuming ownership of any of the interceptors or 
251.10  treatment works, is obligated to pay to the local government 
251.11  unit amounts sufficient to pay, when due, all remaining 
251.12  principal of and interest on bonds issued by the local 
251.13  government unit for the acquisition or betterment of the 
251.14  interceptors or treatment works.  The board must also assume the 
251.15  same obligation with respect to any other existing disposal 
251.16  system owned by a local government unit that the board 
251.17  determines to have been replaced or rendered useless by the 
251.18  district disposal system.  The amounts to be paid under this 
251.19  subdivision may be offset against any amount to be paid to the 
251.20  board by the local government unit as provided in section 8.  
251.21  The board is not obligated to pay the local government unit 
251.22  anything in addition to the assumption of debt provided for in 
251.23  this subdivision.  
251.24     Subd. 3.  [EXISTING JOINT POWERS BOARD.] Effective December 
251.25  31, 2004, or an earlier date as determined by the board, the 
251.26  corporate existence of the joint powers board created by 
251.27  agreement among local government units under Minnesota Statutes, 
251.28  section 471.59, to provide the financing, acquisition, 
251.29  construction, improvement, extension, operation, and maintenance 
251.30  of facilities for the collection, treatment, and disposal of 
251.31  sewage is terminated.  All persons regularly employed by the 
251.32  joint powers board on that date become employees of the board, 
251.33  and may at their option become members of the retirement system 
251.34  applicable to persons employed directly by the board or may 
251.35  continue as members of a public retirement association under any 
251.36  other law, to which they belonged before that date, and retain 
252.1   all pension rights that they may have under the other law and 
252.2   all other rights to which they are entitled by contract or law.  
252.3   The board must make the employer's contributions to pension 
252.4   funds of its employees.  The employees must perform duties as 
252.5   may be prescribed by the board.  On December 31, 2004, or the 
252.6   earlier date, all funds of the joint powers board and all later 
252.7   collections of taxes, special assessments, or service charges, 
252.8   or any other sums due the joint powers board, or levied or 
252.9   imposed by or for the joint powers board, must be transferred to 
252.10  or made payable to the sanitary sewer board and the county 
252.11  auditor must remit the sums to the board.  The local government 
252.12  units otherwise entitled to the cash, taxes, assessments, or 
252.13  service charges must be credited with the amounts, and the 
252.14  credits must be offset against any amounts to be paid by them to 
252.15  the board as provided in section 8.  On December 31, 2004, or 
252.16  the earlier chosen date, the board shall succeed to and become 
252.17  vested with all right, title, and interest in and to any 
252.18  property, real or personal, owned or operated by the joint 
252.19  powers board.  Before that date, the proper officers of the 
252.20  joint powers board must execute and deliver to the sanitary 
252.21  sewer board all deeds, conveyances, bills of sale, and other 
252.22  documents or instruments required to vest in the board good and 
252.23  marketable title to all the real or personal property, but this 
252.24  article operates as the transfer and conveyance to the board of 
252.25  the real or personal property, if not transferred, as may be 
252.26  required under the law or under the circumstances.  On December 
252.27  31, 2004, or the earlier chosen date, the board is obligated to 
252.28  pay or assume all outstanding bonds or other debt and all 
252.29  contracts or obligations incurred by the joint powers board, and 
252.30  all bonds, obligations, or debts of the joint powers board 
252.31  outstanding on the date this article is effective, are validated.
252.32     Subd. 4.  [CONTRACTS BETWEEN LOCAL GOVERNMENT UNITS.] The 
252.33  board may terminate, upon 60 days' mailed notice to the 
252.34  contracting parties, any existing contract between or among 
252.35  local government units requiring payments by a local government 
252.36  unit to any other local government unit for the use of a 
253.1   disposal system, or as reimbursement of capital costs of a 
253.2   disposal system, all or part of which are needed to implement 
253.3   the board's comprehensive plan.  All contracts between or among 
253.4   local government units for use of a disposal system entered into 
253.5   after the date on which this article becomes effective must be 
253.6   submitted to the board for approval as to those features 
253.7   affecting the board's responsibilities as determined by the 
253.8   board and are not effective until the approval is given.  
253.9      Sec. 6.  [SEWAGE COLLECTION AND DISPOSAL; POWERS.] 
253.10     Subdivision 1.  [POWERS.] In addition to all other powers 
253.11  conferred upon the board in this article, the board has the 
253.12  powers specified in this section. 
253.13     Subd. 2.  [DISCHARGE OF TREATED SEWAGE.] The board may 
253.14  discharge the effluent from any treatment works operated by it 
253.15  into any waters of the state, subject to approval of the agency 
253.16  if required and in accordance with any effluent or water quality 
253.17  standards lawfully adopted by the agency, any interstate agency, 
253.18  or any federal agency having jurisdiction.  
253.19     Subd. 3.  [USE OF DISTRICT SYSTEM.] The board may require 
253.20  any person or local government unit to provide for the discharge 
253.21  of any sewage, directly or indirectly, into the district 
253.22  disposal system, or to connect any disposal system or a part of 
253.23  it with the district disposal system wherever reasonable 
253.24  opportunity is provided; may regulate the manner in which the 
253.25  connections are made; may require any person or local government 
253.26  unit discharging sewage into the disposal system to provide 
253.27  preliminary treatment for it; may prohibit the discharge into 
253.28  the district disposal system of any substance it determines will 
253.29  or may be harmful to the system or any persons operating it; may 
253.30  prohibit any extraneous flow into the system; and may require 
253.31  any local government unit to discontinue the acquisition, 
253.32  betterment, or operation of any facility for the unit's disposal 
253.33  system wherever and so far as adequate service is or will be 
253.34  provided by the district disposal system.  
253.35     Sec. 7.  [BUDGET.] 
253.36     Except as otherwise specifically provided in this article, 
254.1   the board is subject to Minnesota Statutes, section 275.065, the 
254.2   Truth in Taxation Act.  The board shall prepare and adopt, on or 
254.3   before September 15 of each year, a budget showing for the 
254.4   following calendar year or other fiscal year determined by the 
254.5   board, sometimes referred to in this article as the budget year, 
254.6   estimated receipts of money from all sources, including but not 
254.7   limited to, payments by each local government unit, federal or 
254.8   state grants, taxes on property, and funds on hand at the 
254.9   beginning of the year, and estimated expenditures for:  
254.10     (1) costs of operation, administration, and maintenance of 
254.11  the district disposal system; 
254.12     (2) cost acquisition and betterment of the district 
254.13  disposal system; and 
254.14     (3) debt service, including principal and interest, on 
254.15  general obligation bonds and certificates issued under section 
254.16  12, obligations and debts assumed under section 5, subdivisions 
254.17  2 and 3, and any money judgments entered by a court of competent 
254.18  jurisdiction.  Expenditures within these general categories, and 
254.19  others that the board may from time to time determine, must be 
254.20  itemized in the detail the board prescribes.  The board and its 
254.21  officers, agents, and employees must not spend money for any 
254.22  purpose other than debt service without having set forth the 
254.23  expense in the budget, nor may they spend in excess of the 
254.24  amount in the budget, and an excess expenditure or one for an 
254.25  unauthorized purpose is enforceable except as the obligation of 
254.26  the person incurring it; but the board may amend the budget at 
254.27  any time by transferring from one budgetary purpose to another 
254.28  any sums, except money for debt service and bond proceeds, or by 
254.29  increasing expenditures in any amount by which cash receipts 
254.30  during the budget year actually exceed the total amounts 
254.31  designated in the original budget.  The creation of any 
254.32  obligation pursuant to section 12 or the receipts of any federal 
254.33  or state grant is a sufficient budget designation of the 
254.34  proceeds for the purpose for which it is authorized, and of the 
254.35  tax or other revenue pledged to pay the obligation and interest 
254.36  on it, whether or not specifically included in any annual budget.
255.1      Sec. 8.  [ALLOCATION OF COSTS.] 
255.2      Subdivision 1.  [DEFINITION OF CURRENT COSTS.] The 
255.3   estimated cost of administration, operation, maintenance, and 
255.4   debt service of the district disposal system to be paid by the 
255.5   board in each fiscal year and the estimated costs of acquisition 
255.6   and betterment of the system that are to be paid during the year 
255.7   from funds other than state or federal grants and bond proceeds 
255.8   and all other previously unallocated payments made by the board 
255.9   under this article in the fiscal year are referred to as current 
255.10  costs.  
255.11     Subd. 2.  [COLLECTION OF CURRENT COSTS.] Current costs 
255.12  shall be collected as described in paragraphs (a) and (b).  
255.13     (a) Current costs may be allocated to local government 
255.14  units in the district on an equitable basis as the board may 
255.15  from time to time determine by resolution to be fair and 
255.16  reasonable and in the best interests of the district.  In making 
255.17  the allocation, the board may provide for the deferment of 
255.18  payment of all or part of current costs, the reallocation of 
255.19  deferred costs, and the reimbursement of reallocated deferred 
255.20  costs on an equitable basis as the board may from time to time 
255.21  determine by resolution to be fair and reasonable and in the 
255.22  best interests of the district.  The adoption or revision of a 
255.23  method of allocation, deferment, reallocation, or reimbursement 
255.24  used by the board shall be made by the affirmative vote of at 
255.25  least two-thirds of the members of the board.  
255.26     (b) Upon approval of at least two-thirds of the members of 
255.27  the board, the board may provide for direct collection of 
255.28  current costs by monthly or other periodic billing of sewer 
255.29  users.  
255.30     Sec. 9.  [GOVERNMENT UNITS; PAYMENTS TO BOARD.] 
255.31     Subdivision 1.  [OBLIGATIONS OF GOVERNMENT UNITS TO THE 
255.32  BOARD.] Each government unit must pay to the board all sums 
255.33  charged to it as provided in section 8, at the times and in the 
255.34  manner determined by the board.  The governing body of each 
255.35  government unit must take all action necessary to provide the 
255.36  funds required for the payments and to make the payments when 
256.1   due.  
256.2      Subd. 2.  [AMOUNTS DUE BOARD; WHEN PAYABLE.] Charges 
256.3   payable to the board by local government units may be made 
256.4   payable at the times during each year as the board determines, 
256.5   after it has taken into account the dates on which taxes, 
256.6   assessments, revenue collections, and other funds become 
256.7   available to the government unit required to pay such charges.  
256.8      Subd. 3.  [GENERAL POWERS OF GOVERNMENT UNITS; LOCAL TAX 
256.9   LEVIES.] To accomplish any duty imposed on it by the board, the 
256.10  governing body of every government unit may, in addition to the 
256.11  powers granted in this article and in any other law or charter, 
256.12  exercise the powers granted any municipality by Minnesota 
256.13  Statutes, chapters 117, 412, 429, and 475, and sections 115.46, 
256.14  444.075, and 471.59, with respect to the area of the government 
256.15  unit located in the district.  In addition, the governing body 
256.16  of every government unit located in whole or in part within the 
256.17  district may levy taxes upon all taxable property in that part 
256.18  of the government unit located in this district for all or a 
256.19  part of the amount payable to the board.  If the levy is for 
256.20  only part of the amount payable to the board, the governing body 
256.21  of the government unit may levy additional taxes on the entire 
256.22  net tax capacity of all taxable property of the government unit 
256.23  for all or a part of the balance remaining payable.  The taxes 
256.24  levied under this subdivision must be assessed and extended as a 
256.25  tax upon the taxable property by the county auditor for the next 
256.26  calendar year, free from any limit of rate or amount imposed by 
256.27  law or charter.  The tax must be collected and remitted in the 
256.28  same manner as other general taxes of the government unit. 
256.29     Subd. 4.  [ALTERNATE LEVY.] In place of levying taxes on 
256.30  all taxable property under subdivision 3, the governing body of 
256.31  the government unit may elect to levy taxes upon the net tax 
256.32  capacity of all taxable property, except agricultural property, 
256.33  and upon only 25 percent of the net tax capacity of all 
256.34  agricultural property, in that part of the government unit 
256.35  located in the district for all or a part of the amount payable 
256.36  to the board.  If the levy is for only part of the amount 
257.1   payable to the board, the governing body may levy additional 
257.2   taxes on the entire net tax capacity of all the property, 
257.3   including agricultural property, for all or a part of the 
257.4   balance.  The taxes must be assessed and extended as a tax upon 
257.5   the taxable property by the county auditor for the next calendar 
257.6   year, free from any limit of rate or amount imposed by law or 
257.7   charter, and must be collected and remitted in the same manner 
257.8   as other general taxes of the government unit.  In computing the 
257.9   tax capacity under this subdivision, the county auditor must 
257.10  include only 25 percent of the net tax capacity of all taxable 
257.11  agricultural property and 100 percent of the net tax capacity of 
257.12  all other taxable property in that part of the government unit 
257.13  located within the district and, in spreading the levy, the 
257.14  auditor must apply the tax rate upon the same percentages of 
257.15  agricultural and nonagricultural taxable property.  If the 
257.16  government unit elects to levy taxes under this subdivision and 
257.17  any of the taxable agricultural property is reclassified so as 
257.18  to no longer qualify as agricultural property, it is subject to 
257.19  additional taxes.  The additional taxes must be in an amount 
257.20  which, together with any additional taxes previously levied and 
257.21  the estimated collection of additional taxes subsequently levied 
257.22  on any other reclassified property, is determined by the 
257.23  governing body of the government unit to be at least sufficient 
257.24  to reimburse each other government unit for any excess current 
257.25  costs reallocated to it as a result of the board deferring any 
257.26  current cost under section 8 on account of the difference 
257.27  between the amount of the current costs initially allocated to 
257.28  each government unit based on the total net tax capacity of all 
257.29  taxable property in the district and the amount of the current 
257.30  costs reallocated to each government unit based on 25 percent of 
257.31  the net tax capacity of agricultural property and 100 percent of 
257.32  the net tax capacity of all other taxable property in the 
257.33  district.  Any reimbursement must be made on terms which the 
257.34  board determines to be just and reasonable.  These additional 
257.35  taxes may be levied in any greater amount as the governing body 
257.36  of the government unit determines to be appropriate, but the 
258.1   total amount of the additional taxes must not exceed the 
258.2   difference between: 
258.3      (1) the total amount of taxes that would have been levied 
258.4   upon the reclassified property to help pay current costs charged 
258.5   in each year to the government unit by the board if that part of 
258.6   the costs, if any, initially allocated by the board solely on 
258.7   the basis of 100 percent of the net tax capacity of all taxable 
258.8   property in the district and then reallocated on the basis of 
258.9   inclusion of only 25 percent of the net tax capacity of 
258.10  agricultural property in the district was not reallocated and if 
258.11  the amount of taxes levied by the government unit each year 
258.12  under this subdivision to pay current costs had been based on 
258.13  the initial allocation and had been imposed upon 100 percent of 
258.14  the net tax capacity of all taxable property, including 
258.15  agricultural property, in that part of the government unit 
258.16  located in the district; and 
258.17     (2) the amount of taxes levied each year under this 
258.18  subdivision upon reclassified property, plus interest on the 
258.19  cumulative amount of the difference accruing each year at the 
258.20  approximate average annual rate borne by bonds issued by the 
258.21  board and outstanding at the beginning of the year or, if no 
258.22  bonds are then outstanding, at a rate of interest which may be 
258.23  determined by the board, but not exceeding the maximum rate of 
258.24  interest that may then be paid on bonds issued by the board.  
258.25  The additional taxes are a lien upon the reclassified property 
258.26  assessed in the same manner and for the same duration as all 
258.27  other ad valorem taxes levied upon the property.  The additional 
258.28  taxes must be extended against the reclassified property on the 
258.29  tax list for the current year and must be collected and remitted 
258.30  in the same manner as other general taxes of the government 
258.31  unit.  No penalties or additional interest may be levied on the 
258.32  additional taxes if timely paid. 
258.33     Subd. 5.  [DEBT LIMIT.] Any ad valorem taxes levied under 
258.34  subdivision 3, by the governing body of a government unit to pay 
258.35  any sums charged to it by the board pursuant to this article are 
258.36  not subject to, or counted toward, any limit imposed by law on 
259.1   the levy of taxes upon taxable property within any governmental 
259.2   unit. 
259.3      Subd. 6.  [DEFICIENCY TAX LEVIES.] If the local government 
259.4   unit fails to make a payment to the board when due, the board 
259.5   may certify to the Douglas county auditor the amount required 
259.6   for payment, with interest at not more than the maximum rate per 
259.7   year authorized at that time on assessments under Minnesota 
259.8   Statutes, section 429.061, subdivision 2.  The auditor must levy 
259.9   and extend the amount as a tax upon all taxable property in that 
259.10  part of the government unit located in the district, for the 
259.11  next calendar year, free from any limits imposed by law or 
259.12  charter.  The tax must be collected in the same manner as other 
259.13  general taxes of the government unit, and the proceeds, when 
259.14  collected, shall be paid by the county treasurer to the 
259.15  treasurer of the board and credited to the government unit for 
259.16  which the tax was levied. 
259.17     Sec. 10.  [PUBLIC HEARING AND SPECIAL ASSESSMENTS.] 
259.18     Subdivision 1.  [PUBLIC HEARING REQUIREMENT ON SPECIFIC 
259.19  PROJECT.] Before the board orders any project involving the 
259.20  acquisition or betterment of any interceptor or treatment works, 
259.21  all or a part of the cost of which will be allocated to local 
259.22  government units under section 8 as current costs, the board 
259.23  must hold a public hearing on the proposed project following two 
259.24  publications in a newspaper or newspapers having general 
259.25  circulation in the district, stating the time and place of the 
259.26  hearing, the general nature and location of the project, the 
259.27  estimated total cost of acquisition and betterment, that portion 
259.28  of costs estimated to be paid out of federal and state grants, 
259.29  and that portion of costs estimated to be allocated to each 
259.30  local government unit affected.  The two publications must be a 
259.31  week apart and the hearing must be at least three days after the 
259.32  last publication.  Not less than 45 days before the hearing, 
259.33  notice must also be mailed to each clerk of all local government 
259.34  units in the district, but failure to give mailed notice of any 
259.35  defects in the notice does not invalidate the proceedings.  The 
259.36  project may include all or part of one or more interceptors or 
260.1   treatment works.  A hearing is not required with respect to a 
260.2   project, no part of the costs of which are to be allocated to 
260.3   local government units as the current cost of acquisition, 
260.4   betterment, and debt service.  
260.5      Subd. 2.  [NOTICE TO BENEFITED PROPERTY OWNERS.] If the 
260.6   governing body of a local government unit in the district 
260.7   proposes to assess against benefited property within units, all 
260.8   or any part of the allocable costs of the project as provided in 
260.9   subdivision 5, the governing body must, not less than ten days 
260.10  before the hearing provided for in subdivision 1 mail a notice 
260.11  of the hearing to the owner of each parcel within the area 
260.12  proposed to be specially assessed and must also give one week's 
260.13  published notice of the hearing.  The notice of hearing must 
260.14  contain the same information provided in the notice published by 
260.15  the board under subdivision 1, and in addition, a description of 
260.16  the area proposed to be assessed by the local government unit.  
260.17  To give mailed notice, owners must be those shown to be on the 
260.18  records of the county auditor or, in a county where tax 
260.19  statements are mailed by the county treasurer, on the records of 
260.20  the county treasurer; but other appropriate records may be used 
260.21  for this purpose.  However, for properties that are tax exempt 
260.22  or subject to taxation on a gross earnings basis and are not 
260.23  listed on the records of the county auditor or the county 
260.24  treasurer, the owners may be ascertained by any practicable 
260.25  means and mailed notice must be given to them.  Failure to give 
260.26  mailed notice or any defects in the notice does not invalidate 
260.27  the proceedings of the board or the local governing body.  
260.28     Subd. 3.  [BOARD PROCEEDINGS PERTAINING TO HEARING.] Before 
260.29  adoption of the resolution calling for the hearing, the board 
260.30  shall get from the district engineer, or other competent person 
260.31  of the board's selection, a preliminary report advising whether 
260.32  the proposed project is feasible, necessary, and cost-effective, 
260.33  and whether it should best be made as proposed or in connection 
260.34  with another project, and the estimated costs of the project as 
260.35  recommended.  No error or omission in the report invalidates the 
260.36  proceeding.  The board may also take steps before the hearing 
261.1   that will, in its judgment, provide helpful information in 
261.2   determining the desirability and feasibility of the project 
261.3   including, but not limited to, preparation of plans and 
261.4   specifications and advertisement for bids.  The hearing may be 
261.5   adjourned from time to time and a resolution ordering the 
261.6   project may be adopted at any time within six months after the 
261.7   date of hearing.  In ordering the project, the board may reduce 
261.8   but not increase the extent of the project as stated in the 
261.9   notice of hearing, unless another hearing is held, and must find 
261.10  that the project as ordered is in accordance with the 
261.11  comprehensive plan and program adopted by the board under 
261.12  section 4.  
261.13     Subd. 4.  [EMERGENCY ACTION.] If the board by resolution 
261.14  adopted by the affirmative vote of not less than two-thirds of 
261.15  its members determines that an emergency exists requiring the 
261.16  immediate purchase of materials or supplies or the making of 
261.17  emergency repairs, it may order the purchase of the supplies and 
261.18  materials and the making of the repairs before any hearing 
261.19  required under this section.  But the board must set as early a 
261.20  date as practicable for that hearing at the time it declares the 
261.21  emergency.  All other provisions of this section must be 
261.22  followed in giving notice of and conducting a hearing.  This 
261.23  subdivision does not prevent the board or its agents from 
261.24  purchasing maintenance supplies or incurring maintenance costs 
261.25  without regard to the requirements of this section.  
261.26     Subd. 5.  [POWER OF GOVERNMENT UNIT TO SPECIALLY ASSESS.] A 
261.27  local government unit may specially assess all or part of the 
261.28  costs of acquisition and betterment of any project ordered by 
261.29  the board under this section.  A special assessment must be 
261.30  levied in accordance with Minnesota Statutes, sections 429.051 
261.31  to 429.081, except as otherwise provided in this subdivision.  
261.32  No other provisions of Minnesota Statutes, chapter 429, apply.  
261.33  For purposes of levying special assessments, the hearing on the 
261.34  project required in subdivision 1 must serve as the hearing on 
261.35  the making of the original improvement provided for by Minnesota 
261.36  Statutes, section 429.051.  The area assessed may be less than 
262.1   but must not exceed the area proposed to be assessed as stated 
262.2   in the notice of hearing on the project provided for in 
262.3   subdivision 2.  To determine the allocable cost of the project 
262.4   to the local government units, the government unit may adopt one 
262.5   of the procedures in paragraph (a) or (b).  
262.6      (a) At any time after a contract is let for the project, 
262.7   the local government unit may get from the board a current 
262.8   written estimate, on the basis of historical and reasonably 
262.9   projected data, of that part of the total cost of acquisition 
262.10  and betterment of the project or of some part of the project 
262.11  that will be allocated to the local government unit and the 
262.12  number of years over which such costs will be allocated as 
262.13  current costs of acquisition, betterment, and debt service under 
262.14  section 8.  The board is not bound by this estimate for 
262.15  allocating the costs of the project to local government units. 
262.16     (b) The governing body may get from the board a written 
262.17  statement showing, for the prior period that the governing body 
262.18  designates, that part of the costs previously allocated to the 
262.19  local government unit as current costs of acquisition, 
262.20  betterment, and debt service only, of all or any part of the 
262.21  project designated by the governing body.  In addition to the 
262.22  allocable costs, the local government unit may include in the 
262.23  total expense, as a basis for levying assessments, all other 
262.24  expenses incurred directly by the local government unit in 
262.25  connection with the project.  Special assessments levied by the 
262.26  government unit with respect to previously allocated costs 
262.27  ascertained under this paragraph are payable in equal annual 
262.28  installments extending over a period not exceeding by more than 
262.29  one year the number of years that the costs have been allocated 
262.30  to the local government unit or the estimated useful life of the 
262.31  project, or part of the project, whichever number of years is 
262.32  the lesser.  No limit is placed on the number of times the 
262.33  governing body of a local government unit may assess the 
262.34  previously allocated costs not previously assessed by the 
262.35  government unit.  The power to specially assess provided for in 
262.36  this section is in addition and supplemental to all other powers 
263.1   of local government units to levy special assessments. 
263.2      Sec. 11.  [INITIAL COSTS.] 
263.3      Subdivision 1.  [CONTRIBUTIONS OR ADVANCES FROM LOCAL 
263.4   GOVERNMENT UNITS.] The board may, at the time it considers 
263.5   necessary and proper, request from a local government unit 
263.6   necessary money to defray the costs of any obligations assumed 
263.7   under section 5 and the costs of administration, operation, and 
263.8   maintenance.  Before making a request, the board must, by formal 
263.9   resolution, determine the necessity for the money, setting forth 
263.10  the purposes for which the money is needed and the estimated 
263.11  amount for each purpose.  Upon receiving a request, the 
263.12  governing body of each local government unit may provide for 
263.13  payment of the amount requested as it considers fair and 
263.14  reasonable.  The money may be paid out of general revenue funds 
263.15  or any other available funds of any local government unit and 
263.16  its governing body thereof may levy taxes to provide funds, free 
263.17  from any existing limit imposed by law or charter.  Money may be 
263.18  provided by government units with or without interest, but if 
263.19  interest is charged it must not exceed five percent per year.  
263.20  The board must credit the local government unit for the payments 
263.21  in allocating current costs under section 8, on the terms and at 
263.22  the times as are agreed to with the local government unit. 
263.23     Subd. 2.  [LIMITED TAX LEVY.] The board may levy ad valorem 
263.24  taxes on all taxable property in the district to defray any of 
263.25  the costs described in subdivision 1, provided the costs have 
263.26  not been defrayed by contribution under subdivision 1.  Before 
263.27  certifying a levy to the county auditor, the board must 
263.28  determine the need for the money to be derived from the levy by 
263.29  formal resolution setting forth the purposes for which the tax 
263.30  money will be used and the amount proposed to be used for each 
263.31  purpose.  In allocating current costs under section 8, the board 
263.32  must credit the government units for taxes collected under the 
263.33  levy made under this subdivision on the terms and at the time 
263.34  the board considers fair and reasonable and on terms consistent 
263.35  with section 8, subdivision 2. 
263.36     Sec. 12.  [BONDS, CERTIFICATES, AND OTHER OBLIGATIONS.] 
264.1      Subdivision 1.  [BUDGET ANTICIPATION CERTIFICATES OF 
264.2   INDEBTEDNESS.] (a) Before adopting its annual budget and in 
264.3   anticipation of the collection of tax and other revenues 
264.4   estimated and set forth by the board in the budget, the board 
264.5   may by resolution, authorize the issuance, negotiation, and sale 
264.6   in accordance with subdivision 5 in such form and manner and 
264.7   upon such terms as it may determine of its negotiable general 
264.8   obligation certificates of indebtedness in aggregate principal 
264.9   amounts not exceeding 50 percent of the total amount of such tax 
264.10  collections and other revenues and maturing not later than three 
264.11  months after the close of the budget year in which issued.  
264.12  Revenues listed in clauses (1) to (3) must not be anticipated 
264.13  for this purpose: 
264.14     (1) taxes already anticipated by the issuance of 
264.15  certificates under subdivision 2; 
264.16     (2) deficiency taxes levied pursuant to this subdivision; 
264.17  and 
264.18     (3) taxes levied for the payment of certificates issued 
264.19  pursuant to subdivision 3. 
264.20     (b) The proceeds of the sale of the certificates must be 
264.21  used only for the purposes for which tax collections and other 
264.22  revenues are to be expended under the budget. 
264.23     (c) All tax collections and other revenues included in the 
264.24  budget for the budget year, after the expenditures of tax 
264.25  collections and other revenues in accordance with the budget, 
264.26  must be irrevocably pledged and appropriated to a special fund 
264.27  to pay the principal and interest on the certificates when due.  
264.28     (d) If for any reason the tax collections and other 
264.29  revenues are insufficient to pay the certificates and interest 
264.30  when due, the board must levy a tax in the amount of the 
264.31  deficiency on all taxable property in the district and must 
264.32  appropriate this amount when received to the special fund.  
264.33     Subd. 2.  [TAX LEVY ANTICIPATION CERTIFICATES OF 
264.34  INDEBTEDNESS.] After a tax is levied by the board under section 
264.35  11, subdivision 2, and certified to the county auditors in 
264.36  anticipation of the collection of the tax, if the tax has not 
265.1   been anticipated by the issuance of certificates under 
265.2   subdivision 1, the board may, by resolution, authorize the 
265.3   issuance, negotiation, and sale in accordance with subdivision 5 
265.4   in the form and manner and on the terms and conditions as it 
265.5   determines its negotiable general obligation tax levy 
265.6   anticipation certificates of indebtedness in aggregate principal 
265.7   amounts not exceeding 50 percent of the uncollected tax for 
265.8   which no penalty for nonpayment or delinquency has been 
265.9   attached.  The certificates must mature not later than April 1 
265.10  in the year after the year in which the tax is collectible.  The 
265.11  proceeds of the tax in anticipation of which the certificates 
265.12  were issued and other funds that may become available must be 
265.13  applied to the extent necessary to repay the certificates.  
265.14     Subd. 3.  [EMERGENCY CERTIFICATES OF INDEBTEDNESS.] If in 
265.15  any budget year the receipts of tax and other revenues for some 
265.16  unforeseen cause become insufficient to pay the board's current 
265.17  expenses, or if any calamity or other public emergency subjects 
265.18  it to the necessity of making extraordinary expenditures, the 
265.19  board may by resolution authorize the issuance, negotiation, and 
265.20  sale in accordance with subdivision 5 in the form and manner and 
265.21  on the terms and conditions as it may determine of its 
265.22  negotiable general obligation certificates of indebtedness in an 
265.23  amount sufficient to meet the deficiency, and the board must 
265.24  levy on all taxable property in the district a tax sufficient to 
265.25  pay the certificates and interest and shall appropriate all 
265.26  collections of the tax to a special fund created for the payment 
265.27  of the certificates and interest. 
265.28     Subd. 4.  [GENERAL OBLIGATION BONDS.] The board may by 
265.29  resolution authorize the issuance of general obligation bonds 
265.30  maturing serially in one or more annual or semiannual 
265.31  installments for the acquisition or betterment of any part of 
265.32  the district disposal system, including but not limited to, the 
265.33  payment of interest during construction and for a reasonable 
265.34  period thereafter, or for the refunding of outstanding bonds, 
265.35  certificates of indebtedness, or judgments.  The board must 
265.36  pledge its full faith and credit and taxing power for the 
266.1   payment of the bonds and shall provide for the issuance and sale 
266.2   and for the security of the bonds in the manner provided in 
266.3   Minnesota Statutes, chapter 475, and must have the same powers 
266.4   and duties as a municipality issuing bonds under that law.  An 
266.5   election is not required to authorize the issuance of bonds and 
266.6   the debt limit of Minnesota Statutes, chapter 475, do not apply 
266.7   to the bonds.  The board may also pledge for the payment of the 
266.8   bonds and deduct from the amount of any tax levy required under 
266.9   Minnesota Statutes, section 475.61, subdivision 1, any sums 
266.10  receivable under section 9 or any state and federal grants 
266.11  anticipated by the board and may covenant to refund the bonds if 
266.12  and when and to the extent that for any reason the revenues, 
266.13  together with other funds properly available and appropriated 
266.14  for the purpose, are not sufficient to pay all principal and 
266.15  interest due or about to become due; if the revenues have not 
266.16  been anticipated by the issuance of certificates under 
266.17  subdivision 1.  All bonds that have been or shall hereafter be 
266.18  issued and sold in conformity with the provisions of this 
266.19  subdivision, and otherwise in conformity with law, are hereby 
266.20  authorized, legalized, and validated. 
266.21     Subd. 5.  [MANNER OF SALE AND ISSUANCE OF 
266.22  CERTIFICATES.] Certificates issued under subdivisions 1, 2, and 
266.23  3 may be issued and sold by negotiation, without public sale, 
266.24  and may be sold at a price equal to the percentage of their par 
266.25  value, plus accrued interest, and bearing interest at the rate 
266.26  or rates as may be determined by the board.  No election is 
266.27  required to authorize the issuance of certificates.  
266.28  Certificates must bear the same rate of interest after maturity 
266.29  as before and the full faith and credit and taxing power of the 
266.30  board must be pledged to the payment of the certificates.  
266.31     Sec. 13.  [TAX LEVIES.] 
266.32     The board may levy taxes to pay the bonds or other 
266.33  obligations assumed by the district under section 5 and for debt 
266.34  service of the district disposal system authorized in section 12 
266.35  upon all taxable property within the district without limit of 
266.36  rate or amount and without affecting the amount or rate of taxes 
267.1   that may be levied by the board for other purposes or by any 
267.2   local government unit in the district.  No other provision of 
267.3   law relating to debt limit shall restrict or in any way limit 
267.4   the power of the board to issue the bonds and certificates 
267.5   authorized in section 12.  The board may also levy taxes as 
267.6   provided in sections 9 and 11.  The county auditor must annually 
267.7   assess and extend upon the tax rolls the part of the taxes 
267.8   levied by the board in each year that is certified to the 
267.9   auditor by the board.  The county treasurer must collect and 
267.10  make settlement of the taxes with the treasurer of the board. 
267.11     Sec. 14.  [DEPOSITORIES.] 
267.12     The board must from time to time designate one or more 
267.13  national or state banks or trust companies authorized to do a 
267.14  banking business as official depositories for money of the 
267.15  board, and must require the treasurer to deposit all or a part 
267.16  of the money in those institutions.  The designation must be in 
267.17  writing and must set forth all the terms and conditions on which 
267.18  the deposits are made, and must be signed by the chair and 
267.19  treasurer, and made a part of the minutes of the board.  A 
267.20  designated bank or trust company must qualify as a depository by 
267.21  furnishing a corporate surety bond or collateral in the amount 
267.22  required by Minnesota Statutes, section 118A.03.  But, no bond 
267.23  or collateral is required to secure any deposit insofar as it is 
267.24  insured under federal law. 
267.25     Sec. 15.  [MONEY; ACCOUNTS AND INVESTMENTS.] 
267.26     Subdivision 1.  [RECEIPT AND APPLICATION.] All money 
267.27  received by the board must be deposited or invested by the 
267.28  treasurer and disposed of as the board directs in accordance 
267.29  with its budget.  But any money that has been pledged or 
267.30  dedicated by the board to the payment of obligations or interest 
267.31  on them or expenses incident to them, or for any other specific 
267.32  purpose authorized by law, must be paid by the treasurer into 
267.33  the fund to which they have been pledged.  
267.34     Subd. 2.  [FUNDS AND ACCOUNTS.] The board's treasurer must 
267.35  establish funds and accounts as necessary or convenient to 
267.36  handle the receipts and disbursements of the board in an orderly 
268.1   fashion.  
268.2      Subd. 3.  [DEPOSIT AND INVESTMENT.] The money on hand in 
268.3   the board's funds and accounts may be deposited in the official 
268.4   depositories of the board or invested as provided in this 
268.5   subdivision.  The amount not currently needed or required by law 
268.6   to be kept in cash on deposit may be invested in obligations 
268.7   authorized by law for the investment of municipal sinking 
268.8   funds.  The money may also be held under certificates of deposit 
268.9   issued by any official depository of the board.  All investments 
268.10  by the board must conform to an investment policy adopted by the 
268.11  board as amended from time to time.  
268.12     Subd. 4.  [BOND PROCEEDS.] The use of proceeds of all bonds 
268.13  issued by the board for the acquisition and betterment of the 
268.14  district disposal system, and the use, other than investment, of 
268.15  all money on hand in any sinking fund or funds of the board must 
268.16  be governed by Minnesota Statutes, chapter 475, this article, 
268.17  and the resolutions authorizing the issuance of the bonds.  The 
268.18  bond proceeds, when received, must be transferred to the 
268.19  treasurer of the board for safekeeping, investment, and payment 
268.20  of the costs for which they were issued.  
268.21     Subd. 5.  [AUDIT.] The board must provide for and pay the 
268.22  cost of an independent annual audit of its official books and 
268.23  records by the state public examiner or a certified public 
268.24  accountant.  
268.25     Sec. 16.  [GENERAL POWERS OF BOARD.] 
268.26     Subdivision 1.  [ALL NECESSARY OR CONVENIENT POWERS.] The 
268.27  board has powers necessary or convenient to discharge the duties 
268.28  imposed upon it by law.  The powers include those specified in 
268.29  this article, but the express grant or enumeration of powers 
268.30  does not limit the generality or scope of the grant of power in 
268.31  this subdivision. 
268.32     Subd. 2.  [LAWSUITS.] The board may sue or be sued.  
268.33     Subd. 3.  [CONTRACTS.] The board may enter into any 
268.34  contract necessary or proper for the exercise of its powers or 
268.35  the accomplishment of its purposes.  
268.36     Subd. 4.  [RULES.] The board may adopt rules relating to 
269.1   the board's responsibilities and may provide penalties not 
269.2   exceeding the maximum penalty specified for a misdemeanor, and 
269.3   the cost of prosecution may be added to the penalties imposed.  
269.4   Any rule prescribing a penalty for violation must be published 
269.5   at least once in a newspaper having general circulation in the 
269.6   district.  A violation may be prosecuted before any court in the 
269.7   district having jurisdiction of misdemeanor, and every court has 
269.8   jurisdiction of violations.  A constable or other peace officer 
269.9   of any municipality in the district may make arrests for 
269.10  violations committed anywhere in the district in the manner and 
269.11  with the effect as for violations of local ordinances or for 
269.12  statutory misdemeanors.  All fines collected must be deposited 
269.13  in the treasury of the board, or may be allocated between the 
269.14  board and the municipality in which the prosecution occurs on 
269.15  terms agreed to by the board and the municipality.  
269.16     Subd. 5.  [GIFTS; GRANTS.] The board may accept gifts, may 
269.17  apply for and accept grants or loans of money or other property 
269.18  from the United States, the state, or any person for any of its 
269.19  purposes, may enter into any agreement required to get the gift, 
269.20  grant, loan, or other property; and may hold, use, and dispose 
269.21  of money or property in accordance with the terms of the gift, 
269.22  grant, loan or agreement.  With respect to any loans or grants 
269.23  of funds or real or personal property or other assistance from 
269.24  any state or federal government or any agency or instrumentality 
269.25  of the government, the board may contract to do and perform all 
269.26  acts and things required as a condition or consideration under 
269.27  state or federal law or rule or regulation, whether or not 
269.28  included among the powers expressly granted to the board in this 
269.29  article.  
269.30     Subd. 6.  [JOINT POWERS.] The board may act under Minnesota 
269.31  Statutes, section 471.59, or any other appropriate law providing 
269.32  for joint or cooperative action between government units.  
269.33     Subd. 7.  [RESEARCH; HEARINGS; INVESTIGATIONS; ADVISE.] The 
269.34  board may conduct research studies and programs, collect and 
269.35  analyze data, prepare reports, maps, charts, and tables, and 
269.36  conduct all necessary hearings and investigations in connection 
270.1   with the design, construction, and operation of the district 
270.2   disposal system, and may advise and assist other government 
270.3   units on system planning matters within the scope of its powers, 
270.4   duties, and objectives, and may provide at the request of any 
270.5   governmental unit other technical and administrative assistance 
270.6   as the board considers appropriate for the government unit to 
270.7   carry out the powers and duties vested in the government unit 
270.8   under this article or imposed on or by the board.  
270.9      Subd. 8.  [EMPLOYEES; CONTRACTORS; INSURANCE.] The board 
270.10  may employ on the terms it considers advisable, persons or firms 
270.11  performing engineering, legal, or other services of a 
270.12  professional nature; require any employee to get and file with 
270.13  it an individual bond or fidelity insurance policy; and procure 
270.14  insurance in the amounts it considers necessary against 
270.15  liability of the board or its officers or both, for personal 
270.16  injury or death and property damage or destruction, with the 
270.17  force and effect stated in Minnesota Statutes, chapter 466, and 
270.18  against risks of damage to or destruction of any of its 
270.19  facilities, equipment, or other property as it considers 
270.20  necessary.  
270.21     Subd. 9.  [PROPERTY.] The board may acquire by purchase, 
270.22  lease, condemnation, gift, or grant, real or personal property 
270.23  including positive and negative easements and water and air 
270.24  rights, and it may construct, enlarge, improve, replace, repair, 
270.25  maintain, and operate any interceptor, treatment works, or water 
270.26  facility determined to be necessary or convenient for the 
270.27  collection and disposal of sewage in the district.  Any local 
270.28  government unit and the commissioners of transportation and 
270.29  natural resources may convey to or permit the use of these 
270.30  facilities owned or controlled by the board, subject to the 
270.31  rights of the holders of any bonds issued with respect to them 
270.32  with or without compensation and without an election or approval 
270.33  by any other government unit or agency.  All powers conferred by 
270.34  this subdivision may be exercised both within or outside the 
270.35  district as may be necessary for the exercise by the board of 
270.36  its powers or the accomplishment of its purposes.  The board may 
271.1   hold, lease, convey, or otherwise dispose of such property for 
271.2   its purposes, upon the terms and in the manner it deems 
271.3   advisable.  Unless otherwise provided, the right to acquire 
271.4   lands and property rights by condemnation must be exercised in 
271.5   accordance with Minnesota Statutes, chapter 117, and must apply 
271.6   to any property or interest in property owned by any local 
271.7   government unit, but property devoted to an actual public use at 
271.8   the time, or held to be devoted to such use within a reasonable 
271.9   time, must not be so acquired unless a court of competent 
271.10  jurisdiction determines that the use proposed by the board is 
271.11  paramount.  In case of property in actual public use, the board 
271.12  may take possession of any property of which condemnation 
271.13  proceedings have begun at any time after the issuance of a court 
271.14  order appointing commissioners for its condemnation.  
271.15     Subd. 10.  [RIGHTS-OF-WAY.] The board may construct or 
271.16  maintain its systems or facilities in, along, on, under, over, 
271.17  or through public waters, streets, bridges, viaducts, and other 
271.18  public rights-of-way without first getting a franchise from any 
271.19  county or local government unit having jurisdiction over them, 
271.20  but the facilities must be constructed and maintained in 
271.21  accordance with the ordinances and resolutions of the county or 
271.22  government unit relating to construction, installation, and 
271.23  maintenance of similar facilities on public properties and must 
271.24  not unnecessarily obstruct the public use of the rights-of-way. 
271.25     Subd. 11.  [DISPOSAL OF PROPERTY.] The board may sell, 
271.26  lease, or otherwise dispose of any real or personal property 
271.27  acquired by it that is no longer required to accomplish its 
271.28  purposes.  The property may be sold in the manner provided by 
271.29  Minnesota Statutes, section 469.065, insofar as practical.  The 
271.30  board may give notice of sale it considers appropriate.  When 
271.31  the board determines that any property or any part of the 
271.32  district disposal system that has been acquired from a local 
271.33  government unit without compensation is no longer required, but 
271.34  is required as a local facility by the government unit from 
271.35  which is was acquired, the board may by resolution transfer it 
271.36  to the government unit.  
272.1      Subd. 12.  [JOINT OPERATIONS.] The board may contract with 
272.2   the United States or an agency of it, any state or agency of it, 
272.3   or any regional public planning body in the state with 
272.4   jurisdiction over any part of the district, or any other 
272.5   municipal or public corporation, or governmental subdivision in 
272.6   any state, for the joint use of any facility owned by the board 
272.7   or the entity, for the operation by the entity of any system or 
272.8   facility of the board, or for the performance on the board's 
272.9   behalf of any service including, but not limited to, planning, 
272.10  on the terms that may be agreed to by the contracting parties.  
272.11  Unless designated by the board as a local sanitary sewer 
272.12  facility, any treatment works or interceptor jointly used, or 
272.13  operated on behalf of the board, as provided in this 
272.14  subdivision, must be considered to be operated by the board to 
272.15  include the facilities in the district disposal system.  
272.16     Sec. 17.  [LOCAL FACILITIES.] 
272.17     Subdivision 1.  [SANITARY SEWER FACILITIES.] Except as 
272.18  otherwise provided in this article, local government units must 
272.19  retain responsibility for the planning, design, acquisition, 
272.20  betterment, operation, administration, and maintenance of all 
272.21  local sanitary sewer facilities as provided by law.  
272.22     Subd. 2.  [ASSUMPTION OF RESPONSIBILITY OVER LOCAL SANITARY 
272.23  SEWER FACILITIES.] The board must upon request of any government 
272.24  unit assume, either alone or jointly with the local government 
272.25  unit, all or any part of the responsibility of the local 
272.26  government unit described in subdivision 1.  Except as provided 
272.27  in subdivision 4 and to exercise the responsibility, the board 
272.28  has all the powers and duties elsewhere conferred in this 
272.29  article with the same force and effect as if the local sanitary 
272.30  sewer facilities were a part of the district disposal system.  
272.31     Subd. 3.  [WATER AND STREET FACILITIES.] The board may, on 
272.32  request of any governmental unit, enter into an agreement under 
272.33  which the board may assume, either alone or jointly with such 
272.34  unit, the responsibility to get and construct water and street 
272.35  facilities in conjunction with any project for the acquisition 
272.36  or betterment of the district disposal system or any project 
273.1   undertaken by the board under subdivision 2.  Except as provided 
273.2   in subdivision 4, and to exercise any responsibilities under 
273.3   this subdivision, the board has all the powers and duties 
273.4   elsewhere conferred in this article with the same force and 
273.5   effect as if the water or street facilities were a part of the 
273.6   district disposal system.  
273.7      Subd. 4.  [ALLOCATION OF CURRENT COSTS.] All current costs 
273.8   attributable to responsibilities assumed by the board over local 
273.9   sanitary sewer facilities and water and street facilities as 
273.10  provided in this section must be allocated solely to the local 
273.11  unit for or with whom the responsibilities are assumed on the 
273.12  terms and over a period as the board determines to be equitable 
273.13  and in the best interest of the district.  But if two or more 
273.14  government units form a region in accordance with this section 
273.15  all or part of the current costs attributable to the region 
273.16  must, at the request of its joint board, be allocated to the 
273.17  region and provided in the agreement establishing the region.  
273.18     Subd. 5.  [PART OF DISTRICT SYSTEM.] This section or any 
273.19  other part of this article does not prevent the board from 
273.20  including, where appropriate, treatment works or interceptors, 
273.21  previously designated or treated as local sanitary sewer 
273.22  facilities, as a part of the district disposal system. 
273.23     Sec. 18.  [SERVICE CONTRACTS WITH GOVERNMENTS OUTSIDE 
273.24  DISTRICT.] 
273.25     The board may contract with the United States or any agency 
273.26  of it, any state or any agency of it, or any municipal or public 
273.27  corporation, governmental subdivision or agency, or political 
273.28  subdivision in any state, outside the jurisdiction of the board, 
273.29  for furnishing to the entities any services which the board may 
273.30  furnish to local government units in the district under this 
273.31  article including, but not limited to, planning for and the 
273.32  acquisition, betterment, operation, administration, and 
273.33  maintenance of any or all interceptors, treatment works, and 
273.34  local sanitary sewer facilities; if the board may further 
273.35  include as one of the terms of the contract that the entity also 
273.36  pay to the board an amount as may be agreed upon as a reasonable 
274.1   estimate of the proportionate share properly allocable to the 
274.2   entity of costs of acquisition, betterment, and debt service 
274.3   previously allocated to local government units in the district.  
274.4   When the payments are made by the entities to the board, they 
274.5   must be applied in reduction of the total amount of costs 
274.6   allocated after that to each local government unit in the 
274.7   district, on the equitable basis the board considers to be in 
274.8   the best interest of the district.  Any municipality in the 
274.9   state may enter into the contract and perform all acts and 
274.10  things required as a condition or consideration for it 
274.11  consistent with the purpose of this article, whether or not 
274.12  included among the powers otherwise granted to the municipality 
274.13  by law or charter, the powers to include those powers set out in 
274.14  section 9, subdivisions 3, 3a, and 4. 
274.15     Sec. 19.  [CONSTRUCTION, MATERIALS, SUPPLIES, EQUIPMENT; 
274.16  CONTRACTS.] 
274.17     Subdivision 1.  [PLANS AND SPECIFICATIONS.] When the board 
274.18  orders a project involving the acquisition or betterment of a 
274.19  part of the district disposal system, it must cause plans and 
274.20  specifications of this project to be made, or if previously 
274.21  made, to be modified, if necessary, and to be approved by the 
274.22  agency if required, and after any required approval by the 
274.23  agency, one or more contracts for work and materials called for 
274.24  by the plans and specification may be awarded as provided in 
274.25  this section.  
274.26     Subd. 2.  [UNIFORM MUNICIPAL CONTRACTING LAW.] Except as 
274.27  otherwise provided in this section, all contracts for work to be 
274.28  done or for purchases of materials, supplies, or equipment must 
274.29  be done in accordance with Minnesota Statutes, section 471.345.  
274.30     Subd. 3.  [CONTRACTS OR PURCHASES.] The board may without 
274.31  advertising for bids, enter into any contract or purchase any 
274.32  materials, supplies, or equipment of the type referred to in 
274.33  subdivision 2 in accordance with applicable state law.  
274.34     Sec. 20.  [ANNEXATION OF TERRITORY.] 
274.35     Any municipality in Douglas county, upon resolution adopted 
274.36  by a four-fifths vote of its governing body, may petition the 
275.1   board for annexation to the district of the area then comprising 
275.2   the municipality or any part of it and, if accepted by the 
275.3   board, the area must be considered annexed to the district and 
275.4   subject to the jurisdiction of the board under the terms and 
275.5   provisions of this article.  The territory so annexed is subject 
275.6   to taxation and assessment under this article and is subject to 
275.7   taxation by the board like other property in the district for 
275.8   the payment of principal and interest thereafter becoming due on 
275.9   general obligations of the board, whether authorized or issued 
275.10  before or after the annexation.  The board may condition 
275.11  approval of the annexation upon the contribution, by or on 
275.12  behalf of the municipality petitioning for annexation, to the 
275.13  board of an amount as may be agreed upon as being a reasonable 
275.14  estimate of the proportionate share, properly allocable to the 
275.15  municipality, of cost or acquisition, betterment, and debt 
275.16  service previously allocated to local government units in the 
275.17  district, on the terms as may be agreed upon and in place of or 
275.18  in addition to further conditions as the board deems in the best 
275.19  interests of the district.  Notwithstanding any other provisions 
275.20  of this article to the contrary, the conditions established for 
275.21  annexation may include the requirement that the annexed 
275.22  municipality pay for, contract for, and oversee the construction 
275.23  of local sanitary sewer facilities and interceptor sewers as 
275.24  those terms are defined in section 1.  To pay the contribution 
275.25  or satisfy any other condition established by the board, the 
275.26  municipality petitioning annexation may exercise the powers 
275.27  conferred in section 9.  When the contributions are made by the 
275.28  municipality to the board, they must be applied to reduce the 
275.29  total amount of costs thereafter allocated to each local 
275.30  government unit in the district, on the equitable basis as the 
275.31  board considers to be in the best interests of the district, 
275.32  applying so far as practicable and appropriate the criteria set 
275.33  forth in section 8, subdivision 2.  On annexation of the 
275.34  territory, the secretary of the board must certify to the 
275.35  auditor and treasurer of the county in which the municipality is 
275.36  located the fact of the annexation and a legal description of 
276.1   the territory annexed.  
276.2      Sec. 21.  [PROPERTY EXEMPT FROM TAXATION.] 
276.3      Any properties, real or personal, owned, leased, 
276.4   controlled, used, or occupied by the sanitary sewer board for 
276.5   any purpose under this article are declared to be acquired, 
276.6   owned, leased, controlled, used, and occupied for public, 
276.7   governmental, and municipal purposes, and are exempt from 
276.8   taxation by the state or any political subdivision of the state; 
276.9   but the properties are subject to special assessments levied by 
276.10  a political subdivision for a local improvement in amounts 
276.11  proportionate to and not exceeding the special benefit received 
276.12  by the properties from the improvement.  No possible use of any 
276.13  of the properties in any manner different from their use as part 
276.14  of the disposal system at the time may be considered in 
276.15  determining the special benefit received by the properties.  All 
276.16  of the assessments are subject to final approval by the board, 
276.17  whose determination of the benefits is conclusive upon the 
276.18  political subdivision levying the assessment. 
276.19     Sec. 22.  [RELATION TO EXISTING LAWS.] 
276.20     This article prevails over any law or charter inconsistent 
276.21  with it.  The powers conferred on the board under this article 
276.22  do not diminish or supersede the powers conferred on the agency 
276.23  by Minnesota Statutes, chapters 115 and 116.  
276.24     Sec. 23.  [APPLICATION.] 
276.25     This article applies to the townships of Carlos, Brandon, 
276.26  La Grand, Leaf Valley, Miltona, and Moe in Douglas county. 
276.27     Sec. 24.  [LOCAL APPROVAL.] 
276.28     Sections 1 to 23 take effect for those townships that have 
276.29  approved it the day after each of the governing bodies of at 
276.30  least four of the local governmental units referred to in 
276.31  section 23 have complied with Minnesota Statutes, section 
276.32  645.021, subdivision 3.  A township listed in section 23 that 
276.33  has not complied with Minnesota Statutes, section 645.021, 
276.34  subdivision 3, by the date when the first four townships have 
276.35  done so may opt back in to the district at a later time by 
276.36  annexation as provided in this article. 
277.1                              ARTICLE 13
277.2                          MINERALS TAXATION
277.3      Section 1.  Minnesota Statutes 2002, section 272.02, is 
277.4   amended by adding a subdivision to read: 
277.5      Subd. 56.  [PROPERTY USED IN THE BUSINESS OF MINING SUBJECT 
277.6   TO THE NET PROCEEDS TAX.] The following property used in the 
277.7   business of mining subject to the net proceeds tax under section 
277.8   298.015 is exempt: 
277.9      (1) deposits of ores, metals, and minerals and the lands in 
277.10  which they are contained; 
277.11     (2) all real and personal property used in a process that 
277.12  includes both mining and producing or refining ores, minerals, 
277.13  or metals, including lands occupied by or used in connection 
277.14  with the mining or production facilities; and 
277.15     (3) concentrate or direct reduced ore. 
277.16  This exemption applies for taxes payable in each year that a 
277.17  person subject to the tax under section 298.015 uses the 
277.18  property for mining and producing or refining ores, metals, or 
277.19  minerals. 
277.20     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
277.21  payable in 2004 and thereafter. 
277.22     Sec. 2.  Minnesota Statutes 2002, section 290.05, 
277.23  subdivision 1, is amended to read: 
277.24     Subdivision 1.  [EXEMPT ENTITIES.] The following 
277.25  corporations, individuals, estates, trusts, and organizations 
277.26  shall be exempted from taxation under this chapter, provided 
277.27  that every such person or corporation claiming exemption under 
277.28  this chapter, in whole or in part, must establish to the 
277.29  satisfaction of the commissioner the taxable status of any 
277.30  income or activity: 
277.31     (a) corporations, individuals, estates, and trusts engaged 
277.32  in the business of mining or producing iron ore and mining, 
277.33  producing, or refining other ores, metals, and minerals, the 
277.34  mining or, production, or refining of which is subject to the 
277.35  occupation tax imposed by section 298.01; but if any such 
277.36  corporation, individual, estate, or trust engages in any other 
278.1   business or activity or has income from any property not used in 
278.2   such business it shall be subject to this tax computed on the 
278.3   net income from such property or such other business or 
278.4   activity.  Royalty shall not be considered as income from the 
278.5   business of mining or producing iron ore within the meaning of 
278.6   this section; 
278.7      (b) the United States of America, the state of Minnesota or 
278.8   any political subdivision of either agencies or 
278.9   instrumentalities, whether engaged in the discharge of 
278.10  governmental or proprietary functions; and 
278.11     (c) any insurance company. 
278.12     <b>[EFFECTIVE DATE.]</b> This section is effective for taxable 
278.13  years beginning after December 31, 2002. 
278.14     Sec. 3.  Minnesota Statutes 2002, section 290.17, 
278.15  subdivision 4, is amended to read: 
278.16     Subd. 4.  [UNITARY BUSINESS PRINCIPLE.] (a) If a trade or 
278.17  business conducted wholly within this state or partly within and 
278.18  partly without this state is part of a unitary business, the 
278.19  entire income of the unitary business is subject to 
278.20  apportionment pursuant to section 290.191.  Notwithstanding 
278.21  subdivision 2, paragraph (c), none of the income of a unitary 
278.22  business is considered to be derived from any particular source 
278.23  and none may be allocated to a particular place except as 
278.24  provided by the applicable apportionment formula.  The 
278.25  provisions of this subdivision do not apply to business income 
278.26  subject to subdivision 5, income of an insurance company, or 
278.27  income of an investment company determined under section 290.36, 
278.28  or income of a mine or mineral processing facility subject to 
278.29  tax under section 298.01. 
278.30     (b) The term "unitary business" means business activities 
278.31  or operations which result in a flow of value between them.  The 
278.32  term may be applied within a single legal entity or between 
278.33  multiple entities and without regard to whether each entity is a 
278.34  sole proprietorship, a corporation, a partnership or a trust.  
278.35     (c) Unity is presumed whenever there is unity of ownership, 
278.36  operation, and use, evidenced by centralized management or 
279.1   executive force, centralized purchasing, advertising, 
279.2   accounting, or other controlled interaction, but the absence of 
279.3   these centralized activities will not necessarily evidence a 
279.4   nonunitary business.  Unity is also presumed when business 
279.5   activities or operations are of mutual benefit, dependent upon 
279.6   or contributory to one another, either individually or as a 
279.7   group. 
279.8      (d) Where a business operation conducted in Minnesota is 
279.9   owned by a business entity that carries on business activity 
279.10  outside the state different in kind from that conducted within 
279.11  this state, and the other business is conducted entirely outside 
279.12  the state, it is presumed that the two business operations are 
279.13  unitary in nature, interrelated, connected, and interdependent 
279.14  unless it can be shown to the contrary.  
279.15     (e) Unity of ownership is not deemed to exist when a 
279.16  corporation is involved unless that corporation is a member of a 
279.17  group of two or more business entities and more than 50 percent 
279.18  of the voting stock of each member of the group is directly or 
279.19  indirectly owned by a common owner or by common owners, either 
279.20  corporate or noncorporate, or by one or more of the member 
279.21  corporations of the group.  For this purpose, the term "voting 
279.22  stock" shall include membership interests of mutual insurance 
279.23  holding companies formed under section 60A.077.  
279.24     (f) The net income and apportionment factors under section 
279.25  290.191 or 290.20 of foreign corporations and other foreign 
279.26  entities which are part of a unitary business shall not be 
279.27  included in the net income or the apportionment factors of the 
279.28  unitary business.  A foreign corporation or other foreign entity 
279.29  which is required to file a return under this chapter shall file 
279.30  on a separate return basis.  The net income and apportionment 
279.31  factors under section 290.191 or 290.20 of foreign operating 
279.32  corporations shall not be included in the net income or the 
279.33  apportionment factors of the unitary business except as provided 
279.34  in paragraph (g). 
279.35     (g) The adjusted net income of a foreign operating 
279.36  corporation shall be deemed to be paid as a dividend on the last 
280.1   day of its taxable year to each shareholder thereof, in 
280.2   proportion to each shareholder's ownership, with which such 
280.3   corporation is engaged in a unitary business.  Such deemed 
280.4   dividend shall be treated as a dividend under section 290.21, 
280.5   subdivision 4. 
280.6      Dividends actually paid by a foreign operating corporation 
280.7   to a corporate shareholder which is a member of the same unitary 
280.8   business as the foreign operating corporation shall be 
280.9   eliminated from the net income of the unitary business in 
280.10  preparing a combined report for the unitary business.  The 
280.11  adjusted net income of a foreign operating corporation shall be 
280.12  its net income adjusted as follows: 
280.13     (1) any taxes paid or accrued to a foreign country, the 
280.14  commonwealth of Puerto Rico, or a United States possession or 
280.15  political subdivision of any of the foregoing shall be a 
280.16  deduction; and 
280.17     (2) the subtraction from federal taxable income for 
280.18  payments received from foreign corporations or foreign operating 
280.19  corporations under section 290.01, subdivision 19d, clause (10), 
280.20  shall not be allowed. 
280.21     If a foreign operating corporation incurs a net loss, 
280.22  neither income nor deduction from that corporation shall be 
280.23  included in determining the net income of the unitary business. 
280.24     (h) For purposes of determining the net income of a unitary 
280.25  business and the factors to be used in the apportionment of net 
280.26  income pursuant to section 290.191 or 290.20, there must be 
280.27  included only the income and apportionment factors of domestic 
280.28  corporations or other domestic entities other than foreign 
280.29  operating corporations that are determined to be part of the 
280.30  unitary business pursuant to this subdivision, notwithstanding 
280.31  that foreign corporations or other foreign entities might be 
280.32  included in the unitary business.  
280.33     (i) Deductions for expenses, interest, or taxes otherwise 
280.34  allowable under this chapter that are connected with or 
280.35  allocable against dividends, deemed dividends described in 
280.36  paragraph (g), or royalties, fees, or other like income 
281.1   described in section 290.01, subdivision 19d, clause (10), shall 
281.2   not be disallowed. 
281.3      (j) Each corporation or other entity, except a sole 
281.4   proprietorship, that is part of a unitary business must file 
281.5   combined reports as the commissioner determines.  On the 
281.6   reports, all intercompany transactions between entities included 
281.7   pursuant to paragraph (h) must be eliminated and the entire net 
281.8   income of the unitary business determined in accordance with 
281.9   this subdivision is apportioned among the entities by using each 
281.10  entity's Minnesota factors for apportionment purposes in the 
281.11  numerators of the apportionment formula and the total factors 
281.12  for apportionment purposes of all entities included pursuant to 
281.13  paragraph (h) in the denominators of the apportionment formula. 
281.14     (k) If a corporation has been divested from a unitary 
281.15  business and is included in a combined report for a fractional 
281.16  part of the common accounting period of the combined report:  
281.17     (1) its income includable in the combined report is its 
281.18  income incurred for that part of the year determined by 
281.19  proration or separate accounting; and 
281.20     (2) its sales, property, and payroll included in the 
281.21  apportionment formula must be prorated or accounted for 
281.22  separately. 
281.23     <b>[EFFECTIVE DATE.]</b> This section is effective for taxable 
281.24  years beginning after December 31, 2002. 
281.25     Sec. 4.  Minnesota Statutes 2002, section 290.191, 
281.26  subdivision 1, is amended to read: 
281.27     Subdivision 1.  [GENERAL RULE.] (a) Except as otherwise 
281.28  provided in section 290.17, subdivision 5, the net income from a 
281.29  trade or business carried on partly within and partly without 
281.30  this state must be apportioned to this state as provided in this 
281.31  section.  To the extent that an entity is exempt from taxation 
281.32  under this chapter as provided in section 290.05, the 
281.33  apportionment factors associated with the entity's exempt 
281.34  activities are excluded from the apportionment formula under 
281.35  this section. 
281.36     (b) For purposes of this section, "state" means a state of 
282.1   the United States, the District of Columbia, the commonwealth of 
282.2   Puerto Rico, or any territory or possession of the United States 
282.3   or any foreign country. 
282.4      <b>[EFFECTIVE DATE.]</b> This section is effective for taxable 
282.5   years beginning after December 31, 2002. 
282.6      Sec. 5.  Minnesota Statutes 2002, section 297A.68, 
282.7   subdivision 4, is amended to read: 
282.8      Subd. 4.  [TACONITE, OTHER ORES, METALS, OR MINERALS; 
282.9   PRODUCTION MATERIALS.] Mill liners, grinding rods, and grinding 
282.10  balls that are substantially consumed in the production of 
282.11  taconite or other ores, metals, or minerals are exempt when sold 
282.12  to or stored, used, or consumed by persons taxed under the 
282.13  in-lieu provisions of chapter 298.  
282.14     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
282.15  purchases made after June 30, 2005. 
282.16     Sec. 6.  Minnesota Statutes 2002, section 297A.71, is 
282.17  amended by adding a subdivision to read: 
282.18     Subd. 32.  [CONSTRUCTION MATERIALS AND EQUIPMENT; 
282.19  NONFERROUS METALS AND MINERALS FACILITY.] Materials and supplies 
282.20  used or consumed in, and equipment incorporated into, the 
282.21  improvement or construction of an existing taconite ore 
282.22  processing facility to extract and refine nonferrous ores, 
282.23  metals, and minerals, including the construction or improvement 
282.24  of a hydrometallurgical processing facility, are exempt.  This 
282.25  exemption includes any delivery or installation charges relating 
282.26  to materials, supplies, and equipment exempt under this section. 
282.27     <b>[EFFECTIVE DATE.]</b> This section is effective for sales and 
282.28  purchases made after June 30, 2005, and before July 1, 2012. 
282.29     Sec. 7.  Minnesota Statutes 2002, section 298.001, is 
282.30  amended by adding a subdivision to read: 
282.31     Subd. 9.  [PRECIOUS MINERALS TAX RELIEF AREA.] The 
282.32  "precious minerals tax relief area" means the area of the 
282.33  following independent school districts: 
282.34     (1) No. 166, Cook County; 
282.35     (2) No. 316, Coleraine; 
282.36     (3) No. 318, Grand Rapids; 
283.1      (4) No. 319, Nashwauk-Keewatin; 
283.2      (5) No. 381, Lake Superior; 
283.3      (6) No. 695, Chisholm; 
283.4      (7) No. 696, Ely; 
283.5      (8) No. 701, Hibbing; 
283.6      (9) No. 706, Virginia; 
283.7      (10) No. 712, Mountain Iron-Buhl; 
283.8      (11) No. 2711, Mesabi East; 
283.9      (12) No. 2142, St. Louis County; and 
283.10     (13) No. 2154, Eveleth-Gilbert. 
283.11     Sec. 8.  Minnesota Statutes 2002, section 298.01, 
283.12  subdivision 3, is amended to read: 
283.13     Subd. 3.  [OCCUPATION TAX; OTHER ORES.] Every person 
283.14  engaged in the business of mining, refining, or producing ores, 
283.15  metals, or minerals in this state, except iron ore or taconite 
283.16  concentrates, shall pay an occupation tax to the state of 
283.17  Minnesota as provided in this subdivision.  For purposes of this 
283.18  subdivision, mining includes the application of 
283.19  hydrometallurgical processes.  The tax is determined in the same 
283.20  manner as the tax imposed by section 290.02, except that 
283.21  sections 290.05, subdivision 1, clause (a), 290.0921, and 
283.22  290.17, subdivision 4, do not apply and the rate of taxation is 
283.23  1.8 percent.  Except as provided in section 290.05, subdivision 
283.24  1, paragraph (a), the tax is in addition to all other taxes. 
283.25     <b>[EFFECTIVE DATE.]</b> This section is effective for taxable 
283.26  years beginning after December 31, 2002. 
283.27     Sec. 9.  Minnesota Statutes 2002, section 298.01, 
283.28  subdivision 3a, is amended to read: 
283.29     Subd. 3a.  [GROSS INCOME.] (a) For purposes of determining 
283.30  a person's taxable income under subdivision 3, gross income is 
283.31  determined by the amount of gross proceeds from mining in this 
283.32  state under section 298.016 and includes any gain or loss 
283.33  recognized from the sale or disposition of assets used in the 
283.34  business in this state. 
283.35     (b) In applying section 290.191, subdivision 5, transfers 
283.36  of ores, metals, or minerals that are subject to this chapter 
284.1   are deemed to be sales outside this state if the ores, metals, 
284.2   or minerals are transported out of this state after the ores 
284.3   have been converted to a commercially marketable quality. 
284.4      <b>[EFFECTIVE DATE.]</b> This section is effective for taxable 
284.5   years beginning after December 31, 2002. 
284.6      Sec. 10.  Minnesota Statutes 2002, section 298.015, is 
284.7   amended to read: 
284.8      298.015 [NET PROCEEDS TAX ON MINING.] 
284.9      Subdivision 1.  [TAX IMPOSED.] A person engaged in the 
284.10  business of mining shall pay to the state of Minnesota for 
284.11  distribution as provided in section 298.018 a net proceeds tax 
284.12  equal to two four percent of the net proceeds from mining in 
284.13  Minnesota.  The tax applies to all mineral and energy resources 
284.14  ores, metals, and minerals mined or, extracted, or produced 
284.15  within the state of Minnesota except for sand, silica sand, 
284.16  gravel, building stone, crushed rock, limestone, granite, 
284.17  dimension granite, dimension stone, horticultural peat, clay, 
284.18  soil, iron ore, and taconite concentrates.  The tax is in 
284.19  addition to all other taxes provided for by law.  
284.20     Subd. 2.  [NET PROCEEDS.] For purposes of this section, the 
284.21  term "net proceeds" means the gross proceeds from mining, as 
284.22  defined in section 298.016, less the same deductions allowed in 
284.23  section 298.017 for purposes of determining taxable income under 
284.24  section 298.01.  No other credits or deductions shall apply to 
284.25  this tax except for those provided in section 298.017.  
284.26     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
284.27  payable in 2004 and thereafter. 
284.28     Sec. 11.  Minnesota Statutes 2002, section 298.016, 
284.29  subdivision 1, is amended to read: 
284.30     Subdivision 1.  [COMPUTATION; ARM'S-LENGTH TRANSACTIONS.] 
284.31  When a an ore, metal or mineral product is sold by the producer 
284.32  in an arm's-length transaction, the gross proceeds are equal to 
284.33  the proceeds from the sale of the product.  This subdivision 
284.34  applies to sales realized on all metal ores, metals, or mineral 
284.35  products minerals produced from mining, including reduction, 
284.36  beneficiation, refining, or any treatment used by a producer to 
285.1   obtain a metal or mineral product which is commercially 
285.2   marketable.  
285.3      Sec. 12.  Minnesota Statutes 2002, section 298.016, 
285.4   subdivision 2, is amended to read: 
285.5      Subd. 2.  [OTHER TRANSACTIONS.] When a an ore, metal, or 
285.6   mineral product is used by the producer or disposed of in a 
285.7   non-arm's-length transaction, the gross proceeds must be 
285.8   determined using the alternative computation in subdivision 3.  
285.9   Transactions subject to this subdivision include, but are not 
285.10  limited to, shipments to a wholly owned smelter, transactions 
285.11  with associated or affiliated companies, and any other 
285.12  transactions which are not at arm's length. 
285.13     Sec. 13.  Minnesota Statutes 2002, section 298.016, 
285.14  subdivision 4, is amended to read: 
285.15     Subd. 4.  [DEFINITIONS.] For the purposes of sections 
285.16  298.015 and 298.017, the terms defined in this subdivision have 
285.17  the meaning given them unless the context clearly indicates 
285.18  otherwise.  
285.19     (a) "Ore, metal, or mineral products" means all 
285.20  those mineral and energy resources ores, metals, and minerals 
285.21  subject to the tax provided in section 298.015. 
285.22     (b) "Exploration" means activities designed and engaged in 
285.23  to ascertain the existence, location, extent, or quality of any 
285.24  deposit of metal or mineral products prior to the development of 
285.25  a mining site.  
285.26     (c) "Development" means activities designed and engaged in 
285.27  to prepare or develop a potential mining site for mining after 
285.28  the existence of metal or mineral products in commercially 
285.29  marketable quantities has been disclosed including, but not 
285.30  limited to, the clearing of forestation, the building of roads, 
285.31  removal of overburden, or the sinking of shafts.  
285.32     (d) "Research" means activities designed and engaged in to 
285.33  create new or improved methods of mining, producing, processing, 
285.34  beneficiating, smelting, or refining metal or mineral products.  
285.35     Sec. 14.  Minnesota Statutes 2002, section 298.018, is 
285.36  amended to read: 
286.1      298.018 [DISTRIBUTION OF PROCEEDS.] 
286.2      Subdivision 1.  [WITHIN TACONITE PRECIOUS MINERALS TAX 
286.3   RELIEF AREA.] The proceeds of the tax paid under sections 
286.4   298.015 to 298.017 on ores, metals, and minerals and energy 
286.5   resources mined or extracted within the taconite precious 
286.6   minerals tax relief area defined in section 273.134, paragraph 
286.7   (b), shall be allocated as follows: 
286.8      (1) five percent to the city or town within which the ores, 
286.9   metals, or minerals or energy resources are mined or extracted; 
286.10     (2) ten percent to the taconite municipal aid account to be 
286.11  distributed as provided in section 298.282 to qualifying 
286.12  municipalities, as defined in section 298.282 and located in the 
286.13  precious mineral tax relief area; 
286.14     (3) ten percent to the school district within which the 
286.15  ores, metals, or minerals or energy resources are mined or 
286.16  extracted; 
286.17     (4) 20 30 percent to a group of school districts comprised 
286.18  of those school districts wherein the mineral or energy resource 
286.19  was mined or extracted or in which there is a qualifying 
286.20  municipality as defined by section 273.134, paragraph (b), in 
286.21  direct proportion to school district indexes as follows:  for 
286.22  each school district, its pupil units determined under section 
286.23  126C.05 for the prior school year shall be multiplied by the 
286.24  ratio of the average adjusted net tax capacity per pupil unit 
286.25  for school districts receiving aid under this clause as 
286.26  calculated pursuant to chapters 122A, 126C, and 127A for the 
286.27  school year ending prior to distribution to the adjusted net tax 
286.28  capacity per pupil unit of the district.  Each district shall 
286.29  receive that portion of the distribution which its index bears 
286.30  to the sum of the indices for all school districts that receive 
286.31  the distributions the state general fund to represent the 
286.32  portion of the tax that is in lieu of the state general tax 
286.33  under section 275.025; 
286.34     (5) 20 percent to the county within which the ores, metals, 
286.35  or minerals or energy resources are mined or extracted; 
286.36     (6) 20 percent to St. Louis county acting as the counties' 
287.1   fiscal agent to be distributed as provided in sections 273.134 
287.2   to 273.136; 
287.3      (7) five percent to the iron range resources and 
287.4   rehabilitation board for the purposes of section 298.22; 
287.5      (8) (7) five ten percent to the northeast Minnesota 
287.6   Douglas J. Johnson economic protection trust fund; and 
287.7      (9) (8) five ten percent to the taconite environmental 
287.8   protection fund. 
287.9      The proceeds of the tax shall be distributed on July 15 
287.10  each year.  
287.11     Subd. 2.  [OUTSIDE TACONITE PRECIOUS MINERALS TAX RELIEF 
287.12  AREA.] The proceeds of the tax paid under sections 298.015 to 
287.13  298.017 on ores, metals, or minerals and energy resources mined 
287.14  or extracted outside of the taconite precious minerals tax 
287.15  relief area defined in section 273.134, paragraph (b), shall be 
287.16  deposited in the general fund. 
287.17     Subd. 3.  [SEGREGATION OF FUNDS.] The proceeds of the tax 
287.18  allocated under subdivision 1, clauses (2), (6), (7), and (8), 
287.19  including any investment earnings on them, must be segregated 
287.20  and separately accounted for in the respective funds or accounts 
287.21  to which they are allocated.  These amounts must only be 
287.22  distributed to municipalities within the precious minerals tax 
287.23  relief area or used for projects located in the precious 
287.24  minerals tax relief area. 
287.25     <b>[EFFECTIVE DATE.]</b> This section is effective for 
287.26  distribution of net proceeds tax revenues made after July 1, 
287.27  2003. 
287.28     Sec. 15.  [298.021] [ROYALTY TAX.] 
287.29     In addition to any other taxes imposed by law, a tax is 
287.30  imposed on a royalty, as defined in section 290.923, subdivision 
287.31  1, paid on ore, other than iron ore, taconite, iron sulphides, 
287.32  or semitaconite.  The tax equals 12 percent of the amount of the 
287.33  royalty paid.  The person paying the royalty shall withhold the 
287.34  tax from the payment and remit the payment to the commissioner 
287.35  at the times and under the procedures provided under section 
287.36  290.923.  The commissioner shall deposit proceeds in the general 
288.1   fund and allocate the proceeds as provided under section 
288.2   298.018, subdivision 1. 
288.3      <b>[EFFECTIVE DATE.]</b> This section is effective for royalties 
288.4   paid after June 30, 2003. 
288.5      Sec. 16.  [REPEALER.] 
288.6      (a) Minnesota Statutes 2002, section 298.01, subdivisions 
288.7   3c and 3d, are repealed effective for taxable years beginning 
288.8   after December 31, 2002. 
288.9      (b) Minnesota Statutes 2002, section 298.017, is repealed 
288.10  effective for taxes payable in 2004 and thereafter. 
288.11                             ARTICLE 14
288.12                           MISCELLANEOUS
288.13     Section 1.  [270.30] [DEFINITIONS.] 
288.14     Subdivision 1.  [SCOPE.] For the purposes of sections 
288.15  270.30 to 270.303, the terms defined in this section have the 
288.16  meanings given them. 
288.17     Subd. 2.  [CLIENT.] "Client" means an individual for whom a 
288.18  tax preparer performs or agrees to perform tax preparation 
288.19  services. 
288.20     Subd. 3.  [COMMISSIONER.] "Commissioner" means the 
288.21  commissioner of revenue. 
288.22     Subd. 4.  [CONFIDENTIAL INFORMATION.] "Confidential 
288.23  information" means information furnished to a tax preparer by a 
288.24  client for, or in connection with, the preparation of a client's 
288.25  individual income tax or business return. 
288.26     Subd. 5.  [DEPARTMENT.] "Department" means the department 
288.27  of revenue. 
288.28     Subd. 6.  [FAMILY MEMBER.] "Family member" means spouse, 
288.29  parent, grandparent, child, or sibling. 
288.30     Subd. 7.  [FINANCIAL INSTITUTION.] "Financial institution" 
288.31  means a lending institution chartered by an agency of the 
288.32  federal government or regulated by the commissioner of commerce. 
288.33     Subd. 8.  [NONPUBLIC PERSONAL INFORMATION.] "Nonpublic 
288.34  personal information" means personally identifiable information 
288.35  provided by a client to a tax preparer resulting from any 
288.36  transaction or any service performed. 
289.1      Subd. 9.  [PERSON.] "Person" means an individual, 
289.2   corporation, partnership, association, trustee, or other legal 
289.3   entity. 
289.4      Subd. 10.  [TAX PREPARATION BUSINESS.] "Tax preparation 
289.5   business" means a corporation, partnership, association, or 
289.6   other entity that directly employs or otherwise has a business 
289.7   arrangement with two or more tax preparers. 
289.8      Subd. 11.  [TAX PREPARATION SERVICES.] "Tax preparation 
289.9   services" means the services provided by a tax preparer for a 
289.10  fee or other consideration, which include, but are not limited 
289.11  to, assisting with, preparing or filing individual income tax or 
289.12  business returns for a client, assuming final responsibility for 
289.13  completed work on an individual income tax or business return on 
289.14  which preliminary work has been done by another, offering to 
289.15  assist with, prepare or file an individual income tax or 
289.16  business return, and offering or providing loans, on behalf of a 
289.17  tax preparer or a financial institution, in anticipation of and 
289.18  for which payment is intended to be a client's tax refund or 
289.19  federal or state tax credit. 
289.20     Subd. 12.  [TAX PREPARER.] "Tax preparer" means a person 
289.21  who provides tax preparation services for a fee or other 
289.22  consideration. 
289.23     Sec. 2.  [270.301] [REQUIREMENTS OF TAX PREPARERS.] 
289.24     Subdivision 1.  [FEES.] No tax preparer or tax preparation 
289.25  business shall: 
289.26     (1) charge a fee that has no reasonable relation to the 
289.27  services provided; 
289.28     (2) charge a fee for a service where the service is not 
289.29  actually provided; 
289.30     (3) misrepresent the amount charged by or paid to a third 
289.31  party for a service; 
289.32     (4) charge, offer to accept, or accept a contingent fee for 
289.33  tax preparation services; 
289.34     (5) charge, offer to accept, or accept a fee for 
289.35  electronically filing a client's individual income tax or 
289.36  business return that is related to or calculated as a percentage 
290.1   of a client's refund or a loan offered or provided to a client, 
290.2   on behalf of the tax preparer or a financial institution, in 
290.3   anticipation of and for which payment is intended to be a 
290.4   client's refund or federal or state tax credit; or 
290.5      (6) fail to completely itemize all charges for tax 
290.6   preparation services. 
290.7      Subd. 2.  [STANDARDS OF CONDUCT.] No tax preparer or tax 
290.8   preparation business shall: 
290.9      (1) fail to promptly, diligently, and without unreasonable 
290.10  delay complete a client's tax return; 
290.11     (2) obtain the signature of a client to a tax return or 
290.12  authorizing document that contains blank spaces to be filled in 
290.13  after it has been signed; 
290.14     (3) fail to sign a client's tax return when payment for 
290.15  services rendered has been made; 
290.16     (4) fail or refuse to give a client a copy of any document 
290.17  requiring the client's signature within a reasonable time after 
290.18  the client signs the document; 
290.19     (5) fail to retain for at least four years a copy of 
290.20  individual income tax returns and for at least seven years a 
290.21  copy of business returns; 
290.22     (6) fail to maintain a confidential relationship between 
290.23  themselves and their clients or former clients; 
290.24     (7) fail to safeguard a client's nonpublic personal 
290.25  information; 
290.26     (8) make, authorize, or cause to make, either directly or 
290.27  indirectly, any false, deceptive, or misleading statement or 
290.28  representation, whether oral, written, or recorded by any means, 
290.29  in connection with the offering or provision of tax preparation 
290.30  services; 
290.31     (9) make, publish, disseminate, circulate, place before the 
290.32  public, or cause to be made, directly or indirectly, any 
290.33  advertisement or marketing materials of any type, or any 
290.34  statement or representation relating to the offering or 
290.35  provision of tax preparation services that is false, deceptive, 
290.36  or misleading; 
291.1      (10) include in a contract any provision that requires, or 
291.2   requires in any other way, a client to assert any claim or 
291.3   defense in a forum that is less convenient, more costly, or more 
291.4   dilatory for the resolution of the dispute than a judicial forum 
291.5   established in this state where the client may otherwise 
291.6   properly bring a claim or defense, or limits in any way any 
291.7   claim or defense the client may have; 
291.8      (11) require a taxpayer to enter into a loan arrangement in 
291.9   order to complete a tax return; 
291.10     (12) claim credits or deductions on a client's tax return 
291.11  for which the tax preparer knows or should know the taxpayer 
291.12  does not qualify. 
291.13     Subd. 3.  [DISCLOSURES.] (a) Prior to entering into any 
291.14  oral or written agreement to provide tax preparation services, a 
291.15  tax preparer or tax preparation business offering to make or 
291.16  making loans, on behalf of the tax preparer or a financial 
291.17  institution, in anticipation of and for which payment is 
291.18  intended to be a client's tax refund or federal or state tax 
291.19  credit shall provide in writing, on a single sheet of paper, 
291.20  separate from any other written document or oral statement, and 
291.21  shall orally read to a prospective client the following 
291.22  statement:  "You may be eligible for FREE tax preparation 
291.23  services.  For information about free tax preparation services, 
291.24  contact the Minnesota Department of Revenue at (insert the 
291.25  current telephone number.)"  It is the obligation of the tax 
291.26  preparer to ensure that the telephone number provided for the 
291.27  department is current. 
291.28     (b) Prior to entering into any oral or written agreement to 
291.29  provide a loan, on behalf of the tax preparer or a financial 
291.30  institution, in anticipation of and for which payment is 
291.31  intended to be a client's tax refund or federal or state tax 
291.32  credit, a tax preparer or tax preparation business shall orally 
291.33  read to and provide in writing, on a single sheet of paper, 
291.34  separate from any other written document or oral statement, to a 
291.35  prospective client, a notice containing: 
291.36     (1) a legend, centered at the top of the single sheet of 
292.1   paper, in bold, capital letters, and in 28-point type stating 
292.2   "WARNING"; and 
292.3      (2) the following verbatim statements in capital and small 
292.4   type, in a minimum of 14-point type, with at least a double 
292.5   space between each line in the statement and four spaces between 
292.6   each statement: 
292.7      (i) This is a loan.  The annual percentage rate (APR) is 
292.8   (fill in APR). 
292.9      (ii) Your refund will be reduced by (fill in appropriate 
292.10  number) percent or $(fill in appropriate number of dollars) due 
292.11  to fees, interest, and other charges. 
292.12     (iii) You can get your refund in about two weeks if you 
292.13  file your return electronically and have the IRS send your 
292.14  refund to your own bank account.  You do not need to pay for a 
292.15  loan to get your money quickly. 
292.16     (iv) If you choose to take this loan and your refund is 
292.17  delayed, you may have to pay additional interest. 
292.18     (c) The notice must be signed and dated by the tax preparer 
292.19  and the client or clients if a joint return. 
292.20     Sec. 3.  [270.302] [ENFORCEMENT.] 
292.21     Subdivision 1.  [CIVIL PENALTIES.] When a tax preparer or 
292.22  tax preparation business has violated any of the provisions of 
292.23  section 270.301, the commissioner may impose an administrative 
292.24  penalty of not more than $10,000 for each violation.  Imposition 
292.25  of the penalty is subject to the contested case procedure under 
292.26  chapter 14.  Demonstration by the commissioner of a pattern and 
292.27  practice of violation shall establish a rebuttable presumption 
292.28  that the violation for which the commissioner is bringing an 
292.29  action was not due to unintentional error.  The penalty is 
292.30  collected in the same manner as income tax. 
292.31     Subd. 2.  [CIVIL ACTIONS.] (a) Any violation of sections 
292.32  270.30 to 270.303 constitutes an unfair, deceptive, and unlawful 
292.33  trade practice within the meaning of section 8.31. 
292.34     (b) A client may bring a civil action seeking redress for a 
292.35  violation of sections 270.30 to 270.303 in the district court of 
292.36  the county wherein the unlawful action or practice is alleged to 
293.1   have been committed or where the respondent resides or has a 
293.2   principal place of business. 
293.3      (c) A court finding for the plaintiff shall award actual 
293.4   damages, including incidental and consequential damages, 
293.5   reasonable attorney fees, court costs, and any other equitable 
293.6   relief as the court considers appropriate. 
293.7      Subd. 3.  [ASSIGNEE LIABILITY.] Any person who purchases or 
293.8   is otherwise assigned rights granted under a contract entered 
293.9   into in connection with tax preparation services is subject to 
293.10  all affirmative claims and any defenses with respect to the loan 
293.11  that the borrower could assert against the seller or assignor. 
293.12     Subd. 4.  [ACTION BY OTHER OVERSIGHT BODIES.] Nothing in 
293.13  sections 270.30 to 270.303 should be construed to constrain 
293.14  disciplinary or other action from being taken by the Minnesota 
293.15  state board of accountancy, the Minnesota lawyers professional 
293.16  responsibility board, or any other entity that has oversight 
293.17  responsibility over persons providing tax preparation services. 
293.18     Sec. 4.  [270.303] [EXEMPTIONS.] 
293.19     Sections 270.30 to 270.302, except for section 270.301, 
293.20  subdivision 3, do not apply to: 
293.21     (1) an attorney admitted to practice law in this state 
293.22  pursuant to section 481.01; 
293.23     (2) a certified public accountant holding a certificate 
293.24  issued pursuant to section 326A.04 or a person issued a permit 
293.25  to practice under section 326A.05; 
293.26     (3) a person designated as a registered accounting 
293.27  practitioner under Minnesota Rules, part 1105.6600, or a 
293.28  registered accounting practitioner firm issued a permit under 
293.29  Minnesota Rules, part 1105.7100; 
293.30     (4) an enrolled agent who has passed the special enrollment 
293.31  examination administered by the Internal Revenue Service; 
293.32     (5) any person who, as part of the regular clerical duties 
293.33  of employment, prepares income, sales, or payroll tax returns 
293.34  for an employer; 
293.35     (6) any person who provides, for a fee or valuable 
293.36  consideration, tax preparation services for fewer than six 
294.1   clients in a calendar year; 
294.2      (7) any person who provides tax preparation services for a 
294.3   family member; and 
294.4      (8) while acting as such, any fiduciary, or the regular 
294.5   employees of a fiduciary, acting on behalf of the fiduciary 
294.6   estate, the testator, trustor, grantor, or beneficiaries thereof.
294.7      Sec. 5.  Minnesota Statutes 2002, section 270.60, 
294.8   subdivision 4, is amended to read: 
294.9      Subd. 4.  [PAYMENTS TO COUNTIES.] (a) The commissioner 
294.10  shall pay to a county in which an Indian gaming casino is 
294.11  located: 
294.12     (1) ten percent of the state share of all taxes generated 
294.13  from activities on reservations and collected under a tax 
294.14  agreement under this section with the tribal government for the 
294.15  reservation located in the county; or 
294.16     (2) five percent of excise taxes collected by the state 
294.17  that are determined by the department of revenue to have been 
294.18  generated from activities on a reservation located in the 
294.19  county, the tribal government of which has not entered into a 
294.20  tax agreement under this section. 
294.21     If the tribe has casinos located in more than one county, 
294.22  the payment must be divided equally among the counties in which 
294.23  the casinos are located. 
294.24     (b) The commissioner shall make the payments required under 
294.25  this subdivision by February 28 of the year following the year 
294.26  the taxes are collected. 
294.27     (c) An amount sufficient to make the payments authorized by 
294.28  this subdivision is annually appropriated from the general fund 
294.29  to the commissioner.  
294.30     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
294.31  collected after June 30, 2003. 
294.32     Sec. 6.  Minnesota Statutes 2002, section 287.12, is 
294.33  amended to read: 
294.34     287.12 [TAXES, HOW APPORTIONED.] 
294.35     (a) All taxes paid to the county treasurer under the 
294.36  provisions of sections 287.01 to 287.12 must be apportioned, 97 
295.1   percent to the general fund of the state, and three percent to 
295.2   the county revenue fund. 
295.3      (b) On or before the 20th day of each month the county 
295.4   treasurer shall determine and pay to the commissioner of revenue 
295.5   for deposit in the state treasury and credit to the general fund 
295.6   the state's portion of the receipts from the mortgage registry 
295.7   tax during the preceding month subject to the electronic payment 
295.8   requirements of section 270.771.  The county treasurer shall 
295.9   provide any related reports requested by the commissioner of 
295.10  revenue. 
295.11     (c) Counties must remit 81 percent of the state's portion 
295.12  of the June receipts collected through June 25 and the estimated 
295.13  state's portion of the receipts to be collected during the 
295.14  remainder of the month to the commissioner of revenue two 
295.15  business days before June 30 of each year.  The remaining amount 
295.16  of the June receipts is due on August 20. 
295.17     <b>[EFFECTIVE DATE.]</b> This section is effective January 1, 2004.
295.18     Sec. 7.  Minnesota Statutes 2002, section 287.29, 
295.19  subdivision 1, is amended to read: 
295.20     Subdivision 1.  [APPOINTMENT AND PAYMENT OF TAX PROCEEDS.] 
295.21  (a) The proceeds of the taxes levied and collected under 
295.22  sections 287.21 to 287.39 must be apportioned, 97 percent to the 
295.23  general fund of the state, and three percent to the county 
295.24  revenue fund. 
295.25     (b) On or before the 20th day of each month, the county 
295.26  treasurer shall determine and pay to the commissioner of revenue 
295.27  for deposit in the state treasury and credit to the general fund 
295.28  the state's portion of the receipts for deed tax from the 
295.29  preceding month subject to the electronic transfer requirements 
295.30  of section 270.771.  The county treasurer shall provide any 
295.31  related reports requested by the commissioner of revenue. 
295.32     (c) Counties must remit 81 percent of the state's portion 
295.33  of the June receipts collected through June 25 and the estimated 
295.34  state's portion of the receipts to be collected during the 
295.35  remainder of the month to the commissioner of revenue two 
295.36  business days before June 30 of each year.  The remaining amount 
296.1   of the June receipts is due on August 20. 
296.2      <b>[EFFECTIVE DATE.]</b> This section is effective January 1, 2004.
296.3      Sec. 8.  Minnesota Statutes 2002, section 287.31, is 
296.4   amended by adding a subdivision to read: 
296.5      Subd. 3.  [UNDERPAYMENTS OF ACCELERATED PAYMENT OF JUNE TAX 
296.6   RECEIPTS.] If a county fails to timely remit the specified 
296.7   percentage of the state portion of the actual June tax receipts 
296.8   at the time required by section 287.12 or 287.29, the county 
296.9   shall pay a penalty equal to ten percent of the state portion of 
296.10  actual June receipts less the amount remitted to the 
296.11  commissioner of revenue in June.  The penalty must not be 
296.12  imposed, however, if the amount remitted in June equals either: 
296.13     (1) 75 percent of the state's portion of the preceding 
296.14  May's receipts; or 
296.15     (2) 75 percent of the average monthly amount of the state's 
296.16  portion for the previous calendar year. 
296.17     <b>[EFFECTIVE DATE.]</b> This section is effective January 1, 2004.
296.18     Sec. 9.  Minnesota Statutes 2002, section 297F.08, is 
296.19  amended by adding a subdivision to read: 
296.20     Subd. 12.  [CIGARETTES IN INTERSTATE COMMERCE.] (a) A 
296.21  person may not transport or cause to be transported from this 
296.22  state cigarettes for sale in another state without first 
296.23  affixing to the cigarettes the stamp required by the state in 
296.24  which the cigarettes are to be sold or paying any other excise 
296.25  tax on the cigarettes imposed by the state in which the 
296.26  cigarettes are to be sold. 
296.27     (b) A person may not affix to cigarettes the stamp required 
296.28  by another state or pay any other excise tax on the cigarettes 
296.29  imposed by another state if the other state prohibits stamps 
296.30  from being affixed to the cigarettes, prohibits the payment of 
296.31  any other excise tax on the cigarettes, or prohibits the sale of 
296.32  the cigarettes. 
296.33     (c) Not later than 15 days after the end of each calendar 
296.34  quarter, a person who transports or causes to be transported 
296.35  from this state cigarettes for sale in another state shall 
296.36  submit to the commissioner a report identifying the quantity and 
297.1   style of each brand of the cigarettes transported or caused to 
297.2   be transported in the preceding calendar quarter, and the name 
297.3   and address of each recipient of the cigarettes. 
297.4      (d) For purposes of this section, "person" has the meaning 
297.5   given in section 297F.01, subdivision 12.  Person does not 
297.6   include any common or contract carrier, or public warehouse that 
297.7   is not owned, in whole or in part, directly or indirectly by 
297.8   such person. 
297.9      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
297.10  following final enactment. 
297.11     Sec. 10.  Minnesota Statutes 2002, section 297G.01, is 
297.12  amended by adding a subdivision to read: 
297.13     Subd. 21.  [LOW-ALCOHOL DAIRY COCKTAIL.] "Low-alcohol dairy 
297.14  cocktail" means a premixed cocktail, or any other product except 
297.15  liqueur-filled candy, that: 
297.16     (1) consists primarily of milk products; 
297.17     (2) contains distilled spirits; 
297.18     (3) is drinkable as a beverage or is promoted as an 
297.19  alcoholic product; and 
297.20     (4) contains less than 3.2 percent alcohol by volume. 
297.21     <b>[EFFECTIVE DATE.]</b> This section is effective for sales made 
297.22  after June 30, 2003. 
297.23     Sec. 11.  Minnesota Statutes 2002, section 297G.03, 
297.24  subdivision 1, is amended to read: 
297.25     Subdivision 1.  [GENERAL RATE; DISTILLED SPIRITS AND WINE.] 
297.26  The following excise tax is imposed on all distilled spirits and 
297.27  wine manufactured, imported, sold, or possessed in this state: 
297.28                                  Standard             Metric
297.29  (a) Distilled spirits,      $5.03 per gallon   $1.33 per liter
297.30  liqueurs, cordials, 
297.31  and specialties regardless 
297.32  of alcohol content 
297.33  (excluding ethyl alcohol) 
297.34  (b) Wine containing         $ .30 per gallon   $ .08 per liter 
297.35  14 percent or less
297.36  alcohol by volume 
298.1   (except cider as defined 
298.2   in section 297G.01, 
298.3   subdivision 3a) 
298.4   (c) Wine containing         $ .95 per gallon   $ .25 per liter
298.5   more than 14 percent 
298.6   but not more than 21
298.7   percent alcohol by volume 
298.8   (d) Wine containing more    $1.82 per gallon   $ .48 per liter
298.9   than 21 percent but not 
298.10  more than 24 percent
298.11  alcohol by volume 
298.12  (e) Wine containing more    $3.52 per gallon   $ .93 per liter
298.13  than 24 percent alcohol
298.14  by volume
298.15  (f) Natural and             $1.82 per gallon   $ .48 per liter
298.16  artificial sparkling wines
298.17  containing alcohol 
298.18  (g) Cider as defined in     $ .15 per gallon   $ .04 per liter
298.19  section 297G.01,
298.20  subdivision 3a
298.21  (h) Low alcohol dairy       $ .08 per gallon   $ .02 per liter
298.22  cocktails
298.23     In computing the tax on a package of distilled spirits or 
298.24  wine, a proportional tax at a like rate on all fractional parts 
298.25  of a gallon or liter must be paid, except that the tax on a 
298.26  fractional part of a gallon less than 1/16 of a gallon is the 
298.27  same as for 1/16 of a gallon. 
298.28     <b>[EFFECTIVE DATE.]</b> This section is effective for sales made 
298.29  after June 30, 2003. 
298.30     Sec. 12.  Minnesota Statutes 2002, section 473F.08, is 
298.31  amended by adding a subdivision to read: 
298.32     Subd. 3c.  [CHARITY CARE REIMBURSEMENT.] (a) As used in 
298.33  this subdivision, the following terms have the meanings given in 
298.34  this paragraph. 
298.35     (1) "Charity care" means the amount that would have been 
298.36  charged by a facility for rendering free or discounted care to 
299.1   persons who cannot afford to pay and for which the facility did 
299.2   not expect payment.  Charity care does not include any amount 
299.3   for which a hospital received a payment from a county under 
299.4   section 256.969, subdivision 9c. 
299.5      (2) A "qualifying hospital" means a hospital in the area 
299.6   that is owned or operated by a local unit of government, or 
299.7   formerly owned by a university, has a licensed bed capacity 
299.8   greater than 400, and provides uncompensated care valued at more 
299.9   than 1.8 percent of its gross charges as stated in the 
299.10  Healthcare cost information system database, maintained by the 
299.11  Minnesota hospital association for the Minnesota department of 
299.12  health. 
299.13     (b) A county that contains a qualifying hospital that 
299.14  provides charity care to residents of the area is eligible for 
299.15  reimbursement of the charity care amount that is above the 
299.16  statewide average for hospitals for charity care, adjusted to 
299.17  cost.  By July 15, 2004, and each subsequent year, the county 
299.18  shall notify its county auditor, as well as the administrative 
299.19  auditor, of the amount of qualifying charity care provided, 
299.20  adjusted to cost using the hospital's cost-to-charge ratio, 
299.21  during the 12-month period ending on June 30 of the current year.
299.22     (c) The areawide levy of each governmental unit calculated 
299.23  in subdivision 3, paragraph (a), must be reduced in an amount 
299.24  equal to the reimbursement multiplied by the proportion of the 
299.25  areawide levy of each governmental unit to the total areawide 
299.26  levy of all governmental units. 
299.27     (d) The administrative auditor shall pay one-half of the 
299.28  reimbursement to the county auditor of the county that contains 
299.29  the qualifying hospital on or before June 15 and the remaining 
299.30  one-half of the reimbursement on or before November 15.  The 
299.31  county auditor receiving the payment shall disburse the 
299.32  reimbursement to the qualifying hospital within 15 days of 
299.33  receipt of the reimbursement. 
299.34     (e) Prior to the reporting specified in paragraph (b) 
299.35  above, all qualifying hospitals that participate in this program 
299.36  shall agree upon and implement a common standard for reporting 
300.1   charity care, and a common standard for determining eligibility 
300.2   for charity care for all participating hospitals. 
300.3      <b>[EFFECTIVE DATE.]</b> This section is effective for fiscal 
300.4   disparities contribution and distribution tax capacities for 
300.5   taxes payable in 2005 and subsequent years. 
300.6      Sec. 13.  [REPEALER.] 
300.7      Laws 1984, chapter 652, section 2, is repealed. 
300.8      <b>[EFFECTIVE DATE.]</b> This section is effective for Benton 
300.9   county the day after the governing body of Benton county and its 
300.10  chief clerical officer timely complete their compliance with 
300.11  Minnesota Statutes, section 645.021, subdivisions 2 and 3.  
300.12     This section is effective for Stearns county the day after 
300.13  the governing body of Stearns county and its chief clerical 
300.14  officer timely complete their compliance with Minnesota 
300.15  Statutes, section 645.021, subdivisions 2 and 3.